2022SUSTAINABILITY REPORT
Connecting the Future with Technology
About This Report
Chairman’s Statement
About Luxshare
Precision
Appendix
Assurance Report
Key Performance Data
Summary of Honors of
Each Factory GRI Content Index
Contents
Corporate Governance 17Integrity in Management 20Risk Control 22Information Security and 23Privacy Protection
Sustainability Strategy 09Sustainability Governance 12Structure and PracticeStakeholder Communication 13Material Issues Analysis 14Relevant to Value Chain
Environmental Management System 26Climate Change Action 27Emission Management 30Energy Management 31Water Resources Management 34Circular Production 37Hazardous Substance Management 39Chemical Management 40Clean Technology Opportunities 40
Human Rights and Labor 43ManagementTalent Attraction and Retention 45Boost Talent Development 47Building a Harmonious Workplace 51Occupational Health and Safety 57Implement Community Involvement 64
Supply Chain Management System 66Responsible Supply Chain 67
Focus on Intelligent Manufacturing 72Strengthen Innovative Research 74and DevelopmentEnhance Quality Management 74
Responsibility Governance andValue Conservation
Stable and Healthy Operation Leadsto Sustainable Development
Environmentally Friendly and CircularEconomy
Achieve Growth and HappinessTogether
Making Responsible Purchase toDeliver Value
Seek Step-wise Perfection ThroughIntelligent and Quality Manufacturing
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
IntroductionThis is the 2022 Sustainability Report of Luxshare Precision Industry Company Limited. The Report focuses on the concepts, workprogress and future plans of Luxshare Precision and its subsidiaries in terms of sustainable development. In case of inconsistency ordiscrepancy, please refer to the Chinese version.Terms DefinitionFor the convenience of expression and reading, “Luxshare Precision”, “this Company”, “the Company”, “We” and “us” in this Report referto Luxshare Precision Industry Company Limited and its subsidiaries. Unless otherwise specified, the terms used in this Report have thesame meanings as those defined in theCompany’s 2022 Annual Report.Preparation BasisLuxshare Precision has prepared this Report in accordance with theGlobal Reporting Initiative (GRI) Standards, and takes referenceto of theSocial Responsibility Instructions to Listed Companyissued by the Shenzhen Stock Exchange, theUN Global Compact,ISO 26000: Guidance on Social Responsibility. To prepare this report, we identified and communicated with important stakeholders,determined the scope of the Report, as well as collected, summarized and organized relevant information. For climate-related disclosure,we adopted the disclosure recommendations developed by the TCFD (Task Force on Climate-Related Financial Disclosure).Report Scope and BoundariesUnless otherwise specified, the policies, statements and materials in this Report cover the actual business scope of Luxshare Precision,and the entities included in the Report scope is the same as that of the2022 Annual Reportissued by Luxshare Precision IndustryCompany Limited.
About This Report
Time Period
Unless otherwise specified, this Report covers the period from January 1, 2022 to December 31, 2022, which has the same ReportingPeriod as the Financial Report.Data SourceAll data used in the Report originates from Luxshare Precision Industry Company Limited and its subsidiaries.
Reliability Statement and Assurance
The Board of Directors is responsible for the truthfulness, accuracy and completeness of the Report. Luxshare Precision hascommissioned T?V Rheinland (Guangdong) Ltd. to conduct an external audit according toAccountAbility AA1000 VerificationStandards. The statement of independent verification is provided on page 77 of the Report.
Confirmation and Approval
This Report was approved by the Board of Directors for release on April 27, 2023.
Report PublishingLuxshare Precision Sustainability Report is released annually at the same time as the Annual Financial Report. You can access theelectronic version of this Report through the following website:
https://www.luxshare-ict.com/about/sustainability.html.
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
2022 is a year full of challenges, along with the rampancy of extreme weathers, exacerbated geopoliticalconflicts in global economy. Under such circumstances, all employees of Luxshare Precision strivedto seek out opportunities amongst the challenges by capitalizing on their cohesion and vigorousefforts. During this year, we have achieved fruitful accomplishments in ESG (environmental, social andgovernance), gaining recognition by the Carbon Disclosure Project (CDP), as well as a number of awardsfrom Forbes China, Bloomberg Green, and Xinhua Credit. Luxshare Precision, as a benchmark in China’selectronic component industry, hopes to contribute to the sustainable development of the industry andeven society through active ESG practices.The governance system is indispensable to the sound development of an enterprise. Luxshare Precisionremains steadfast in the high-quality, stable and efficient corporate governance, and continuouslyupgrades its corporate governance framework and risk management system. While conscientiouslyguarding the red lines of business ethics, we give top priority to reinforcing the culture of integrity.Luxshare Precision respects and protects intellectual property rights of all parties, and integrates pursuitof perfection into our high-quality product manufacturing, empowering “intelligent future” with “intelligentinnovation”.Employees are the powerhouse for creating enterprise value. We not only adhere to the concept of“people-oriented”, but also intend to deliver a safe and healthy working environment, a democratic andinclusive workplace, and sophisticated and competitive compensation and benefit to our employees.With a view to enhancing the common recognition to the corporate culture, we jointly create an employeeeco-community with characteristic of Luxshare Precision, namely “Star Community”, and sufficientlysupport employees in realizing personal value and career development.
Chairman’s Statement
Green and low-carbon operation is a significant proposition for enterprises to meet future needs. We takethe initiative to practice green and low-carbon sustainable development, and are dedicated to energyconservation, water saving, and waste reduction, to minimize the environmental impact of our operations.We are committed to setting science based targets, and have completed greenhouse gas emissions dataverification, while setting an energy restructuring target of scaling up the proportion of clean energy to50% in the next three years. We have increased input in research and development of clean technologiesto help achieve the “carbon peaking and carbon neutrality goals”.Supply chain cooperation is the requisite path for enterprises to achieve synergy and a win-winoutcome. We consider responsible supply chain management as an indispensable guarantee for win-win cooperation, as we set up a green, safe and sustainable supply chain system with our partnersworldwide. The supplier access standards have been set in compliance with strict environmentaland social standards, and we have developed a risk assessment and audit system for suppliers toconsistently keep track of environmental violation records throughout the value chain, striving to eradicatethe environmental risks of suppliers. We also integrate carbon emission data verification into supply chainmanagement, in a bid to upgrade and optimize the entire industry to achieve green and sustainabledevelopment.We can only break through by fighting even harder. Luxshare Precision has embarked on a new journeyand ushered in new challenges. In the future, we will push forward stable and healthy development in themanufacturing industry. Meanwhile, we will put more efforts in consolidating ESG management, striveto be a warm and responsible enterprise, and serve the grand blueprint of green, sustainable and high-quality development.
Wang Laichun
Chairman
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
About Luxshare PrecisionCompany ProfileLuxshare Precision Industry Company Limited is a Sino-foreign joint venture with limited liability. The Company has a wide range ofbusiness at home and abroad, and its manufacturing bases are expanding to Guangdong, Jiangxi, Jiangsu, Anhui, Zhejiang, Shanxi,Hubei, Sichuan, Hebei, Taiwan, and Southeast Asia. Also, it has set up R&D centers in Beijing, Shanghai, Hebei, Guangdong, Jiangsu,Shaanxi, and Taiwan.
Corporate CultureLuxshare Precision takes “Pragmatism, Enterprising, Developing, Innovation, Cooperation, Fusion, Thanksgiving, and Return” as theCompany’s core values, which is also the basic belief and basic principle that the Company and all “Luxshare” members adhere to whenpursuing our goals.
Main BusinessLuxshare Precision’s business covering four major sectors: consumer electronics, communications and data centers, automotiveelectronics and medical. Holding fast to the top-class design concept of “practicing intelligent production”, the Company provides a fullrange of design and manufacturing integration services for consumer electronic products from parts to accessories, modules to intelligentfinished products. The Company seized the opportunity to be the first in tapping into the markets through vertical integration andhorizontal business expansion, and strives to become a leading player in the industry as guided by the “Made in China 2025” strategyand a pioneer in the same industry in the world.In terms of product application, the Company is committed to providing parts, modules and systems all-in-one intelligent solutions forenterprise communication products (high-speed interconnection, optical modules, heat dissipation modules, base station antennas, basestation filters), consumer electronics products (TWS wireless headsets, smart wearables, wireless charging modules, 5G routers, VRglasses and smart speakers), automotive electronic systems (vehicle wiring harnesses, connectors, smart cockpit,, intelligent driving), andcentral gateways.
Industry EngagementAs a leading participant in the technology-based manufacturing industry, Luxshare Precision pays close attention to the developmentof the industry, actively participates in the formulation of relevant standards and exchange activities organized by more than 30 industryassociations, and assumes the responsibilities and obligations as a leading enterprise in the industry.
Luxshare PrecisionCorporate Culture
No.
of theBackboneEnterprises inChina’s ElectronicComponentsIndustry in 2022
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
2004
2010
2011
2015
2016
20192020
202120222005
2013
2014
2017
?In May, Luxshare Precision IndustryCo., Ltd. was founded
?Luxshare was publicly traded as an A-share(Stock Code: 002475) on the Shenzhen Stock Exchange
?In January, Luxshare acquired ASAP TECHNOLOGY(JIANGXI) CO., LTD.
?In May, Luxshare acquired Lanto Electronic Limited
?In June, Luxshare acquired ICT-Lanto Limited, and establishedfully-owned subsidiaries Luxshare Precision Limited andLuxshare Precision Technology Co., Ltd. in Hong Kong
?In September, Dongguan Luxshare Precision Industry Co.,Ltd. was established
?In October, Kunshan Luxshare Precision Industry Co., Ltd.was established
?In November, Xiexun Electronic (Ji’an)Co., Ltd. was established
2012?In January, Luxshare acquired Shenzhen Kertong Technology Co., Ltd.?In May, Dongguan Luxshare Jingsheng Industry Co., Ltd. wasrenamed as Dongguan Leader Precision Industry Co., Ltd.
?In June, acquired Dongguan Zhanyi Hardware Co., Ltd. and itrenamed as Donguan Xuntao Electronic Co., Ltd.
?In September, invested in Taiwan SpeedTech Co., Ltd., and acquiredZhuhai Win-win Flexible Circuit Co., Ltd.?In November, renamed as Luxshare Precision Industry Co., Ltd.
?In October, Luxshare acquired SUK Kunststofftechnik GmbH (Germany)
?In December, China Securities Regulatory Commission approvedLuxshare’s publicly issued corporate bonds plan
?In November, Dongguan Luxshare PrecisionIndustry Co., Ltd. was established
?In March, Luxshare increased investment inToyoshima Electronics Technologies (Suzhou)Co., Ltd.
?In August, the 2013 non-public offering ofstocks was approved by China SecuritiesRegulatory Commission
?In August, the 2015 non-public offeringof stocks was approved by ChinaSecurities Regulatory Commission
?In December, Luxshare-ICT (Vietnam)Limited was established
?In April, Luxshare acquired M&A MerryElectronics (Huizhou) Co., Ltd. and M&AMerry Electronics (Shanghai) Co., Ltd.
?In December, Guangdong Luxshare & MerryElectronics Co., Ltd. was established?In August, Luxshare-ICT (Nghe An)Limited was established
?In November, the joint venture Changshu LizhenIntelligent Manufacturing Technology Partnership(limited partnership) was established
?In December, became a shareholder of WistronInvestment (Jiangsu) Co., Ltd. and LuxsanTechnology (Kunshan) Co., Ltd.
?In February, increased investment in and became a controllingshareholder of Rikai Precision Technology (Yancheng) Co., Ltd.(formerly known as Rikai Computer Accessories Co., Ltd.)?In April, the Company increased its capital to Rida IntelligentManufacture Technology (Rugao) Co.,LTD.
?In February, Luxshare Thermal Technology (Huizhou) Co., Ltd.was established
?In April, acquired TIME Interconnect Technology Limited?In April, Luxshare New Energy (Anhui) Co., Ltd. was established
Development History
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Annual Honors
Morgan Stanley CapitalInternational (MSCI) Index
Securities TimesAll-China Federation ofIndustry and Commerce
All-China Federation ofIndustry and Commerce
“Top 100 Value of Main Board ListedCompanies” in the 16
th
Award of the Value ofListed Companies in ChinaThe 28thof ChinaTop 500 Private Manufacturing Enterprises
The 50thof ChinaTop 500 Private Enterprises
In 2022, Luxshare Precision was awarded a “BB”rating in the MSCI ESG primary rating evaluation
“B” rating for the climate change questionnaire;“B” rating for the water safety questionnaire;The Company was awarded the “EnvironmentalLeap Forward Award for Excellent Enterprise inEnvironmental Information Disclosure” by CDP.
CDP
Forbes China2022 Forbes China Most Innovative Companies Top 50
Disclaimers: Luxshare Precision’ use of any data of MSCI ESG Research LLC or its affiliates (“MSCI”), and the use of the MSCI logo, trademark, service mark or index name herein, does not constitute a sponsorship, endorsement, recommendation or promotion by MSCI of LuxsharePrecision. MSCI services and data are the property of MSCI or its information providers and are provided “as is” without warranty of any kind. The MSCI name and logo are trademarks or service marks of MSCI.
MSD ChinaCertificate of Woman SupplierThe Institute of Public &Environmental Affairs (IPE)Ranked 4
thin electronics industry category in terms of theGreen Supply Chain Corporate Information Transparency IndexRanked 7
thin electronics industry category in terms ofCorporate Climate Action CATI Evaluation
Wind ESGCompany’s comprehensive ESG score a “A” rating.
EcoVadis Certification
The Company was awarded the “Bronze”.
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
ESG excellent case forXinhua Credit Jinlan Cup
ESG excellent case forXinhua Credit Jinlan CupThe 5th Social Responsibility Conference2022 Yicai The Corporate SocialResponsibility Ranking in China
51Job.comHaitou.ccZhaopin.com
Excellent case of carbon neutralityCase of outstanding ESG contributionsHonour Award – 2022 Outstanding Corporate Governance Award
Environmental and Ecological Contribution Award ofCorporate Social Responsibility Ranking in China
2022 Top Graduate Employers2023 Most Influential EmployersChina Best Employer Award 2022
Shenzhen Best Employers
International Green Zero-Carbon Festival
Sina Finance2022 China ESG Golden Awards for Chinese Enterprises – ExcellentEnterprise for Environmental Responsibility
Green Sustainable Development Contribution Awardof ESG and Sustainability Summit 2022
The 12
th Philanthropy Festival
2022 Responsible Brand of the Year
Annual Honors (Continued)
Luxshare Precision integrates strategies of enterprise with sustainable developmentconcept, puts into practice the requirements of SDGs (Sustainable DevelopmentGoals), analyzes and responds to the ESG concerns from stakeholders.
Responsibility Governanceand Value Conservation
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Luxshare Precision has established a Sustainable Development Center led by the Board of Directors. Focusing on the “Connecting theFuture with Technology” vision, it has built a sustainability strategy system based on the stakeholders concerns from the three dimensionsof environmental, social and governance, to propel materializing global sustainability blueprint.
Responding to Global Sustainable Development ActionsWe draw on international excellent cases and successful practice of customer, carry out own value chain activities, take the initiative torespond to SDGs (Sustainable Development Goals), and constantly explores the contribution of production and operation activities of thewhole value chain to SDGs as well as the action paths and direction.
Value chain activities and corresponding SDGs
ESG Management Policy
EmployeesSupply chain
CommunityengagementProducts
Maintain a benign relationship with suppliers of mutualbenefit, win-win cooperation and common development,establish a sound supply chain social responsibilitymanagement system, build a green and responsible valuechain, and jointly work for a sustainable future.
Build a harmonious workplace, respect the human rights ofemployees in each operation site, establish smooth communicationchannels, continuously improve the democratic managementsystem, provide diversified development pathways and a soundoccupational health management system for employees, and createa harmonious, democratic, safe and comfortable work environment.
?Making Responsible Purchase to Deliver ValueESG practice?Achieve Growth and Happiness TogetherESG practice
Responsible procurementHarmony and health
Continuously improve corporate governance structure,enhance corporate governance, follow the requirements ofbusiness ethics, build trust with all stakeholders, boost thelong-term value of the Company, and pursue sustainablecorporate development and business model.
Scientific governance
Implement the national green development strategy,advance green and low-carbon transformation, reducewaste and increase efficiency, promote green and eco-friendly products and services, help achieve scientificcarbon goals, seize clean technology opportunities, anddrive green and low-carbon development of the wholeindustry and society.?Responsibility Governance and Value Conservation?Stable and Healthy Operation Leads to SustainableDevelopmentESG practice?Environmentally Friendly and Circular EconomyESG practice
Green and low-carbon development
Production/Operation
Sustainability Strategy
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Environmental goalsEnvironmental goal progress?Set GHG emission reduction goals consistent with the scientific carbon reduction goal of a 1.5℃ pathway
?The Company has initiated the formulation of emission reduction plans and pathways, as well as science-based targets, and final version of ourscience-based targets will be prepared in 2023.?The Company shall save 250 million kWh energy cumulatively from 2023 to 2025? Newly set goals in 2022?Continuously improve utilization rate of clean energy to reach 30% by 2023, 40% by 2024 and 50% by 2025? Newly set goals in 2022?Improve the utilization rate of water resources, reduce water withdrawal and consumption, and decrease generation and discharge of wastewater
?Promote the establishment of water resources management system meeting AWS standards in each factory, carry out a series of water-savingactions, and develop and innovate waste water treatment technologies?Employ external qualified environment monitoring institution to conduct environment monitoring at least once a year of wastewater discharge of factories? Newly set goals in 2022?Implement the principle of 4R (reduction, reuse, regeneration and recycling), promote the “zero-waste landfill” practice, enhance utilization rate of resources,and achieve a waste transformation rate of over 90% by 2025
?The total amount of waste reused was 104,007.10 tons, and the average waste conversion rate of subsidiaries reached 83.15%
?Impose strict graded control of all materials, components, finished products and hazardous substances involved in the production process and constantlyimplement removal of hazardous substances to gradually materialize reduction and elimination goals comprehensively
?Build and gradually improve the Green Product Information Management System to effectively control the risk of harmful substances in products
Governance goalGovernance goal progress?Continue to improve corporate governance and internal control system?Establish three defense lines for risk management and internal control under the guidance of COSO framework
?Conduct regular stakeholder communication through multiple channels?Continuously conduct stakeholder communication through multiple channels
?Enhance diversity and independence of management, realizing the goals that percentage of female directors and independent directors is not less thanone third
? Female directors accounted for 42.86%; independent directors accounted for 42.86%?Continuously improve business ethics standards and unblock whistleblowing channels to complete a 100% handling rate of business ethics relatedcomplaints
?The handling rate of business ethics-related complaints was 100%?Conduct regular business ethics training and build a culture of honest management?100% employee anti-corruption training coverage, 100% pass rate of the COC exam
?Improve the safe and stable operation of information systems, achieve “zero major information leaks, zero major information system failures and zerobusiness continuity interruption incidents”
?Luxshare Precision had zero relevant incidents
?Carry out responsible procurement and commit to achieving 100% avoidance of conflict minerals
?Update and improve theConflict Minerals Management Measures, published theConflict Minerals Policy of Luxshare Precisionon our officialwebsite
?Continuously maintain a response rate of at least 95% for supplier conflict mineral survey?Supplier survey response rate reached 97%?By 2025, more than 80% smelteries/refineries which involve 3TG (abbreviation of Ta, Sn, W and Au) business pass certification of Responsible MineralsAssurance Process (RMAP) or other relevant certifications
? Newly set goals in 2022?Initiate green supply chain initiatives to promote environmental and social responsibility among suppliers
?Constantly supervise and guide the suppliers to improve environmental and social performance through IPE and other platforms, and had assisted66 suppliers and subsidiaries in achieving the removal of environmental violation records.?Set GHG emission reduction goals consistent with the scientific carbon reduction goal of a 1.5℃ pathway and involve the Scope 3 reductions, raise utilizationrate of clean energy constantly
?Carbon investigation has been included in the Scope 3 discharge data of supply chain, with scientific carbon targets estimated to be set by theend of 2023?Promote suppliers to save energy and reduce emission and the goals are to conserve 100 million kWh energy cumulatively from 2023 to 2025 by our suppliers? Newly set goals in 2022
Value chainSustainable development goals and commitments of Luxshare PrecisionProgress in 2022
Supplychain
Commitment for Critical Goals
Production/Operation
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
?Complete the intelligent production and manufacturing system, and gradually promote the industrial intelligent transformation? Newly set goals in 2022?Strengthen the quality management system and continuously improve product quality?Certified by IS0 9001 Quality Management System and ISO 17025 Laboratory Management System?Motivate R&D and innovation of core technologies and encourage associated patent R&D and application in clean technologies?1,585 patents were newly added, and the total number of patent gazettes is 4,526?Constantly increase R&D investment of green products and clean technologies?The relevant R&D investment of green products and clean technologies is nearly RMB260 million, and obtained 6 granted patents
?Maintain good communications with local communities where operations are conducted?Take part in projects that further the welfare of our local communities?Actively contribute to local community development?Invested RMB2.298 million in public charity activities in total?Actively contribute to local community construction?Carry out environmental protection public welfare activities, promote environmental protection concepts
?Value and respect the human rights of all employees at home and abroad, to avoid discrimination and damage to human rights? No Incidence of human rights violation and discrimination?Eliminate health and safety hazards at workplace, realize “zero work-related death incidents and zero occupational disease incidents”, and achieve 10%reduction in annual work-related injury incidents of the Company each year compared to previous year from 2023 to 2025.
? Newly set goals in 2022?Construct an occupational environment with diversity, inclusiveness and equality, provide a competitive remuneration plan for all employees, providediverse promotion channels, and build a team of employees with high satisfaction and engagement
?Set up 4 major promotion principles; Conducted employee satisfaction and engagement survey with over 160,000 responses
?Unblock employee complaint channels, and actively carry out employee communications?Conducted a survey on employee satisfaction and engagement, covering employees from all operations
?Retain 100% signing rate of theEmployees’ Letter of Integrity Commitment?Employees 100% signed rate of theEmployees’ Letter of Integrity Commitment
?Strengthen employees’ awareness of confidentiality, and training on information security and privacy protection?58,771 person-times in total participated in the information security training?Establish a sound training system covering all employees and 100% employees receive on average 20 hours of training annually by 2025? Newly set goals in 2022
Value chainSustainable development goals and commitments of Luxshare PrecisionProgress in 2022
Commitment for Critical Goals (Continued)
Products
Employees
Communityengagement
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
The decision-making level is responsible for the decision-making and supervision of the Company’ssustainability related issues, regularly listens to the work reports of the Sustainable DevelopmentCenter, reviews internal documents as the Sustainability Report, major ESG events, key ESG plans andsystems, audits and approves ESG significant issues, and ensures that the sustainable developmentstrategies are aligned with the Company’s core strategies.
The execution level is composed of the Company’s offices, committees, central functionaldepartments, business groups, ESG working group and other important internal execution units,and responsible for implementing the corresponding work and reporting the implementation andperformance regularly as guided and planned by the Sustainable Development Center, and ensuringthat the concept of sustainable development is fully implemented in the Company’s operations.
As the main management of sustainability affairs, the planning level is responsible for formulatingmedium- and long-term sustainability plans of the Company, deploying and tracking the sustainabilitywork progress and reporting to the Board of Directors regularly, and promoting the effectiveimplementation of sustainability decisions of the Board of Directors within the Company.
Main responsibilities of each levelSustainability governance structure
Sustainability Governance Structure and Practice
Board of Directors
SustainableDevelopment Center
Human Resources
Department
Central ProcurementInformation SafetyManagement Department
Intellectual PropertyManagement Department
Central Functional
Departments
Business Unit ESG
Working Group
Other Functionaland ServiceDepartmentsEHS CommitteeDisciplinaryCommitteeOffice of the Secretary
of the Board
Chairman andGeneral Manager
Decision-makingLevel
Planning
Level
Luxshare Precision has implemented a three-level sustainability governance structure featuring “decision-making - planning - execution”,which consists of the Board of Directors, the Sustainable Development Center and the Sustainability Implementation Team. The Board ofDirectors shall review the Company’s reports on sustainable development strategies, implementation plan, objectives and performanceproposed by the Sustainable Development Center through regular and ad hoc meetings.
Meanwhile, we employ third-party organizations with sustainable development expertise to constantly update knowledge, ideas, skills andexperience of sustainable development and conduct annual training for sustainable development governance team (including the Boardof Directors), such as themed reports, management improvement communication and other aspects.
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Stakeholders
Majorconcernedmaterial issue
Communicationchannels
Government andregulatory agencies?Risks and opportunitiesbrought by climate change?Zero-carbon commitment
and carbon management?Waste and circular production?Occupational health and
safety?Innovative research and
development
?Responsible supply chain
management
?Corporate governance and
risk management
?
Supervision
acceptance
?
Regular disclosure
?
Irregular reporting
?
Participation in
relevant meetings
?Risks and opportunitiesbrought by climate change
?Zero-carbon commitment
and carbon management
? Financial performance
? Product quality management
? Business ethics
?Innovative research and
development
?Occupational health and
safety
?Regular/irregular information
disclosure
?General meetings of
shareholders
? Investor exchange activities
?Communication hotline and
? Survey questionnaires
Shareholdersand investors
?Responsible supply chain
management
? Occupational health and safety? Product quality management
?Business ethics
?Open tendering?Daily communication withsuppliers
?Supplier inspection andaudit
?Supplier training and
empowerment
? Survey questionnaires
?Annual Supplier
Conference
Suppliers
?Risks and opportunities
brought by climate change
?Zero-carbon commitment
and carbon management
? Product quality management
?Information security and
privacy protection
? Green product and business
?Occupational health and
safety
? Energy management
?Online communication
platforms
?Customer complaints andreturn visits
? Satisfaction surveys
?Annual and quarterly
Communication meetings
Customers
? Occupational health and safety?Protection of employee rights
and interests
? Chemical management?Employee diversity and equalopportunities?Employee training anddevelopment? Talent attraction and retention
?Trade unions? Safety education and drills? Employee training?Employee complaints andrequests? Staff activities? Survey questionnaire
Employees
? Community engagement
?Occupational health and
safety?Employee diversity and equalopportunities
? Information disclosure? Complaint hotline
? Field visits? Volunteer activities
Community
members
?Information security and privacyprotection
? Product quality management? Talent attraction and retention
? Occupational health and safety
?Employee diversity and equal
opportunities
?Zero-carbon commitment and
carbon management
? Water resource management
? Information disclosure
?Communication and
interview
? On-site activities
?Wechat official account
platform
Partners andsocial media
Stakeholder Communication
Luxshare Precision is in the conviction that each stakeholder holds a significant impact on the Company’s development. Through a reviewof upstream & downstream businesses and value chain, we have identified seven categories of stakeholders: government and regulatoryagencies, shareholders and investors, suppliers, customers, employees, community members, partners and social media. LuxsharePrecision takes a sincere attitude to communicate with stakeholders by means of various channels to perceive material issue they areconcerned about and proactively take corresponding actions.
We respect opinions and feedbacks from all stakeholders and establish multiple channels including open email address and complainthotline to receive concerns and opinions from them. Stakeholders can report the negative impact caused by the Company viapublic@luxshare-ict.com. Relevant personnels shall contact claimants without delay and energetically remedy alone or jointly with relevantparty(ies) the negative impacts incurred or caused to be incurred. We receive supervision and examination upon the improvements untilrelevant negative impact has been rectified and the improvement has been recognized. We shall continue to monitor the effectiveness ofremedial actions and regularly communicate and share progress with stakeholders to ensure validity of the remedial process.
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Matrix of Material Issues of Luxshare Precision 2022 Sustainability Report
Risk and opportunity brought by climatechangeZero-carbon commitment and carbonmanagement
Employee training and developmentGreen products and businessResponsible supply chain managementTalent attraction and retentionWaste and circular productionCompany governance and riskmanagementEnergy managementEmployee diversity and equal opportunitiesWater resource managementBusiness ethicsProduct quality managementInformation security and privacy protectionInnovative research and developmentCommunity engagement
Protection of employee rights and interestsChemical managementOccupational health and safety
High Materiality
Moderate Materiality
Low Materiality
Luxshare Precision takes GRI principles as basis to implement identification of material issuesand adopts various channels such as questionnaires and email communication to understand allstakeholders’ expectations. Considering the internal business objectives, overall situation of theindustry and impacts of business activities, advice of third-party experts, the lastest ESG managementtrend, and 2021 material issues results, we have finally identified 19 material issues.We sought for suggestions through questionnaires, conducted a material issue survey on the sevenstakeholders based on these 19 material issues, and collected their suggestions on sustainabledevelopment and material issues. We received 4,558 effective responses and more than 800valid recommendations in total. Based on the findings of the questionnaire survey, interviews withstakeholders, and field research information, we identified 6 highly important issues and 9 moderatelyimportant issues, forming a material issues matrix and resulting in findings of the impact of the materialissues on value chain. During the Reporting Period, the Sustainable Development Center identifiedimportant concerns through internal representations, supplier CSR audits, etc., and reported to theBoard of Directors on important concerns such as environmental impact and labor rights among the19 material issues, and the Board of Directors has approved the analysis findings of this year’s materialissues.
Material Issues Analysis Relevant to Value Chain
Governance material issueEnvironment material issueSocial material issue
Chemical management
Zero-carbon commitment andcarbon management
Risk and opportunity broughtby climate changeEmployee training and
developmentBusiness ethics
Employee diversity and equal opportunitiesWater resource management
Company governance and risk management
Energy managementInnovative researchand development
Community engagement
Product quality managementInformation security and privacy protection
Talent attraction and retentionWaste and circular production
Responsible supply chainmanagement
Occupational health and safety
Green products and business
Protection of employeerights and interests
Material Issues Identification Process
materialissues
Six highly importantissuesQuestionnaire Survey
E-mailCommunicationOnsite InspectionField Research.......
Operation objectivesOverall Industry pictureBusiness activitiesThird-partyexpert opinionThe latest ESG trends
Board ofDirectors’Approval
Nine moderatelyimportant issues
Four lowlyimportant issues
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
ESG Category19 Material issuesGRI Issues
SupplychainProduction/Operation
ProductEmployee
Communityengagement
Relevant chapter
Environment
Risks and opportunitiesbrought by climatechange
GRI 201 Economic PerformanceGRI 302 EnergyGRI 305 Discharge
Climate Change ActionEmission ManagementEnergy ManagementEnvironment
Zero-carboncommitment and carbonmanagement
GRI 302 EnergyGRI 305 Discharge
Emission ManagementEnergy ManagementSociety
Occupational health andsafety
GRI 403 Occupational health and safety
Occupational Health andSafetyEnvironmentChemical management
GRI 308 Supplier EnvironmentalGRI 403 Occupational Health and SafetyGRI 414 Supplier Social AssessmentGRI 416 Customer Health and Safety
Chemical ManagementHazardous SubstanceManagement
Society
Protection of employeerights and interests
GRI 201 Economic PerformanceGRI 401 EmploymentGRI 402 Labor-capital relationsGRI 406 Anti-discriminationGRI 407 Freedom of association andcollective bargainingGRI 408 Child laborGRI 409 Forced or Compulsory labor
Human Rights and LaborManagementBuilding a HarmoniousWorkplaceSociety
Employee training anddevelopment
GRI 202 Market PresenceGRI 404 Training and education
Boost TalentDevelopmentEnvironment
Green products andbusiness
GRI 302 EnergyGRI 306 Waste
Clean TechnologyOpportunitiesCircular ProductionSociety
Responsible supplychain management
GRI 205 Anti-corruptionGRI 308 Environment assessment ofsupplyGRI 414 Society assessment of supply
Supply ChainManagement SystemResponsible SupplyChainSociety
Talent attraction andretention
GRI 202 Market PresenceGRI 401 EmploymentGRI 405 Diversity and Equal Opportunity
Talent Attraction andRetention
ESG Category19 Material issuesGRI Issues
SupplychainProduction/Operation
ProductEmployee
Communityengagement
Relevant chapter
Environment
Waste and circularproduction
GRI 306 WasteCircular ProductionGovernance
Corporate governanceand risk management
GRI 201 Economic PerformanceGRI 207 TaxGRI 405 Diversity and Equal OpportunityGRI 418 Customer privacy
Corporate GovernanceRisk ControlInformation Security andPrivacy ProtectionEnvironmentEnergy management
GRI 302 EnergyGRI 305 Emissions
Emission ManagementEnergy ManagementSociety
Employee diversity andequal opportunities
GRI 405 Diversity and equal opportunities
Human Rights and LaborManagementTalent Attraction andRetentionEnvironment
Water resourcemanagement
GRI 303 Water resources and sewage
Water ResourcesManagementGovernance Business ethics
GRI 205 Anti-corruptionGRI 206 Anti-fair competition
Integrity in ManagementGovernance
Product qualitymanagement
GRI 416 Customer health and safety
Enhance Quality
ManagementSociety
Information security andprivacy protection
GRI 418 Customer privacy
Information Security and
Privacy ProtectionGovernance
Innovative research anddevelopment
GRI 302 Energy
Clean Technology
Opportunities
Strengthen Innovative
Research and
DevelopmentSociety
Communityengagement
GRI 413 Local community
Implement Community
Involvement
The Impact of Material Issue on Value Chain
For the information of the material issues-related policies, public commitments and integration of each policy of responsible business conduct into operations andbusiness, please refer to corresponding chapter(s).Material issues have impact upon value chainIssues MaterialityHigh Moderate Low
? Business ethics
100%
signing rate ofthe Employee’sLetter of IntegrityCommitment
LuxsharePrecision hasobtainedISO 27001certificate
2022 ForbesChina MostInnovativeEnterprises
Top
communication
meetings with
investors
Luxshare Precision insists on improving the internal management system, continuouslyidentifying and controlling the changing internal risks, adhering to business ethics, ensuringinformation security, and protecting the privacy and information of customers and employees.
? Company governance and riskmanagement
? Information security and
privacy protection
Stable and HealthyOperation Leads toSustainable Development
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Luxshare Precision holds on to the concept of excellent, stable and effective corporate governance, constantly improves the corporategovernance system, and standardizes corporate operation through institutional guarantee to deliver long-term value to shareholders,customers, employees, and other stakeholders. We hold general meetings of shareholders at least once a year, and update periodicreports, financial reports and information related to the Company according to actual situation on the official information disclosurewebsite, and report the operation of the Company to various stakeholders in a timely manner. All operations in China and overseas ofLuxshare Precision strictly comply with local tax regulations. For the Company’s generation, distribution and retention of economic valueand financial assistance received from government, please refer to Section X Financial Report of the2022 Annual Reportfor more detailsin terms of the Company’s generation, distribution and retention of economic value and financial assistance received from government.
Protection of Shareholders’ Rights and InterestsThe Company continuously improves theArticles of Associationin accordance with the requirements of theCompany Law of thePeople’s Republic of China, the Securities Law of the People’s Republic of China, the Rules Governing the Listing of Shares on theShenzhen Stock Exchange, Guidelines on the Bylaws of Listed Companies, Code of Corporate Governance of Listed Companies,Shenzhen Stock Exchange Listed Companies Self-Regulatory Guidelines No. 1 – Standardized Operation of Main Board ListedCompanies, and other laws, regulations, and normative documents. Simultaneously, we standardize the convening and votingprocedures of general meetings of shareholders in strict accordance with the provisions and requirements of theCompany Law of thePeople’s Republic of China, Articles of Association,and theRules of Procedures of the General Meetings of Shareholders, to ensurethat shareholders, especially minority shareholders, can fully exercise their rights. The Company notifies all registered shareholders of thematters to be considered at the meeting and the date and place of the meeting by issuing a written notice prior to the convening of themeeting. The shareholders (including the shareholders’ agents) exercise their voting rights corresponding to the number of voting sharesthey represent and are entitled to one vote for each share.
Corporate Governance Structure
Management Responsibilities of the Board of DirectorsThe Board of Directors is the highest governance body of the Company, making decisions on material corporate matters with seniormanagement, playing a vital role in formulating, approving and updating the organization’s purpose, values or mission statement,strategies, policies and sustainability goals.
General Meetingsof ShareholdersAudit CommitteeStrategy CommitteeCompensationand PerformanceAppraisal CommitteeNomination Committee
Board of Directors
C-suite
Board ofSupervisors
The Board ofDirectors held
meetings
Operation Mechanism of the Board of DirectorsIn accordance with relevant laws and regulations, when the Board of Directors and the general meetingof shareholders deliberate various proposals, members of the Board of Directors who are related to theproposal shall abstain from voting on the proposal. The Company shall annually disclose the estimatesof the related party transaction for the year, the information of the counterparty to the related partytransaction and the estimated transaction amount in the announcement of the estimates of the relatedparty transaction, as well as the reasons why the related party relationship with the counterparty exists.During the Reporting Period, the Company’s Board of Directors deliberated and adopted a number ofmotions, such as the2021 Sustainability Report,theMotion on the Stock Option Incentive Plan 2022of Luxshare Precision Industry Company Limited (Draft) and its Summary.
Board of Directors and CommitteesLuxshare Precision has set up the Board of Directors and the Board of Supervisorsin accordance with the law, the Board of Directors is responsible for conveningshareholders’ general meetings and implementing the resolutions of the shareholders’general meetings, and reporting the work to the shareholders’ general meetings,deciding the Company’s business plan and investment plan, while the Board ofSupervisors supervises the Company’s operation, the legality of the Company’s Boardof Directors and senior management in performing their duties in accordance withthe law, and safeguarding the legitimate rights and interests of the Company andshareholders.
Corporate Governance
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
Manufacturing
Stable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability ReportThe Company has established the Board of Supervisors in accordance with the law. See Section IV Corporate Governance of the2022 Annual Report for more details.
Composition of the Board of DirectorsThe Board of Directors follows the principles of meritocracy and diversity, and considers multipledimensions when selecting candidates, such as age, gender, culture, educational background,professional experience, skills, educational degree and years of service. At the end of the ReportingPeriod, the Board of Directors consisted of seven directors, of whom three were independent directorsand three were female directors. We promote scientific decision-making of the Board of Directorsto prevent and mitigate potential conflicts of interest. The Audit Committee, Compensation andPerformance Appraisal Committee of the Board of Directors is composed of independent directors,safeguards the independence and effectiveness of the Committees, and protect the legitimate rights andinterests of the Company and its shareholders.
NamePosts
Tenure of IndependentDirectors
Gender
Professional Knowledgeand Skills
Main ExperienceAge
Employee
Status
years3-9yearsAbove9 years
Industry orTechnology
Legal, Financialor Accounting
Technology
Industry
Legal, Financialor Accounting
Bellow 55years old
56-65years old
66-75years oldWang LaichunChairmanFemaleWang LaishengVice ChairmanMale
Li WeiDirectorMaleWang TaoDirectorMale
Zhang Ying
Independent
Director
FemaleLiu Zhonghua
Independent
Director
Male
Song Yuhong
Independent
Director
Female
Structure of the Board of Directors Members
Responsibilities of the Specialized Committees
The Audit Committee, the Strategy Committee, Compensation and the Performance Appraisal Committee, and the NominationCommittee are set up under the Board of Directors to safeguard the rights and interests of shareholders and investors, improve thecompleteness and transparency of corporate governance procedures, and enhance the efficiency of corporate governance. Thespecialized committees are established by law to monitor and review all corporate governance issues, report regularly to the Board ofDirectors, and assist the Board of Directors in participating in corporate governance.
Key Responsibilities of the Committees of the Board of Directors
?Monitor and evaluate external audits?Supervise the internal audit work?Review the Company’s financial information and disclosure?Review the Company’s risk management?Review the Company’s quarterly, interim and annual reports before they are submitted to theBoard of Directors?Research, review and formulate compensation plans or programs for directors and seniormanagers, including but not limited to performance evaluation criteria, procedures and mainevaluation systems, as well as major programs and systems for rewards and penalties?Study the criteria for evaluating directors and senior management, organize and evaluate theperformance of directors and senior managers and put forward recommendations?Study the selection criteria and procedures for directors and senior managers and putforward recommendations?Conduct extensive searches for qualified candidates for directors and senior managers?Review and put forward recommendations on director candidates and senior managementcandidates?Organize and carry out research on major strategic issues of the Company, and provideadvice to the Board of Directors on investment strategy, development strategy, marketingstrategy and other issues, such as reviewing specific issues related to the core developmentstrategy of the enterprise proposed by the Sustainable Development Center, including riskidentification, target setting and achievement of special topics such as climate change andwater security?Organize and coordinate the preparation of medium – and long-term overall developmentplans of the Company, and submit them to the Board of Directors for research and decision-making?Investigate and analyze the implementation of major strategic issues, and submit suggestionsfor improvement and adjustment to the Board of Directors?Before bring to the Board of Directors for discussion, conduct research and demonstrationon the annual investment plan formulated by the Company’s functional departments toprovide reference opinions to the Board of Directors for their formal deliberation
AuditCommittee
NominationCommittee
StrategyCommittee
Compensationand PerformanceAppraisalCommittee
The board of directorsconsists of
directors,
of whom are independentdirectors and
of whomare female directors
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturing
Stable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Resolution Procedure for Executives’ Remuneration
Luxshare Precision adopts the salary structure of“basic annual salary + long-term incentive”, has put in place a benefit sharingand risk sharing mechanism between shareholders, management and core technical (business) cadres, and formulated a seriesof individual performance evaluation indicators including sustainable development performance to ensure the fulfilment of theCompany’s future development strategies and business goals. The Remuneration Committee under the Board of Directors willdiscuss and review remuneration-related issues annually. The Remuneration Committee consists of three members, of whom morethan one half are independent directors. Candidates for membership shall be nominated by the Chairman of the Board, one half ofthe independent directors and one third of the directors, and shall be elected by a majority of all directors of the Board of Directors.The Committee shall have a Chairman who shall be an independent director and shall be elected by a majority of all members of theCommittee. The Committee practices a system of regular and ad hoc meetings and holds meetings at least once a year. The equityinvolved in the remuneration shall be brought forward with a stock option incentive draft and then discussed by the RemunerationCommittee, the Board of Directors and the general meeting of shareholders before implementation. The Company complies withnational regulations on resignation and retirement, and provide welfare guarantee for employees in accordance with the law.In 2022, the Company formulated and adoptedthe Motion on the Stock Option Incentive Plan 2022 of Luxshare PrecisionIndustry Company Limited (Draft) and its Summary,which is for all staffand with business partners working together withLuxshare Precision for a long term as the incentive object, including management personnel, core technology (business) backbonesand loyal grass-roots staff meeting the incentive conditions.The remuneration of independent directors is determined in accordance with the relevant provisions of theCSRC’s Rules for theIndependent Directors of Listed Companies, the Articles of Association and other regulations, taking into account the currentoverall economic environment and the remuneration level of listed companies in the industry, and shall be implemented afterdeliberation by the Board of Directors and the general meeting of shareholders step by step. In accordance with the relevant lawsand regulations, when the Board of Directors and the general meeting of shareholders deliberate on each proposal, the members ofthe Board involved in the proposal will abstain from voting. Please see Section IV Corporate Governance of2022 Annual Reportfordetails of salaries obtained by directors and the senior management during the Reporting Period.
Investor CommunicationsIn support for investors’ sufficient knowledge of the Company’s operation anddynamic in a timely manner, Luxshare Precision has established a multiple-channelcommunication platform for domestic and foreign investors, such as regular emailexchanges, online performance briefings, on-site exchange meetings, online inquiryplatforms, etc., for sharing the latest achievements with public investors, exchangingthe industry dynamic information, and responding to investors’ concerns about thestrategies and planning of the Company’s business, development driving force andcore competitiveness, in a bid to enhance investors’ understanding of the Company’sbusiness, strategies and planning, and industry development trends, and protect theinterests of minority investors.
Large-scale investorcommunications
Small-scale communicationsby phone, email, etc.
Inquiry and communicationson easy IR
On May 18, 2022, Luxshare Precision held a shareholders’ meeting and investor exchange activity in Dongguan.Chairman Ms. Wang Laichun responded to investors’ concerns about the dynamics, future strategies, overseas layoutof the Company’s main business, as well as our strategies for coping with the external environment and competitiveenvironment, and introduced the trend and our strategic layout of the automobile industry in detail. The Company iscommitted to establishing an efficient and transparent communication mechanism, constantly improving and strengtheningthe governance and maintaining a healthy relationship with investors through communication and interaction, as well aspromptly following up on investors’ suggestions.
As for sustainability, the Company has laid down internal and external two-way communication channels to continuously promote theresolutions of the Board of Directors and respond to investors’ concerns. The Company provides investors with timely information onmaterial issues such as climate change, energy management, corporate governance, risk management, business ethics, innovative R&D,and low-carbon technologies.
Case | Dongguan General Meeting of Shareholders
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Luxshare Precision holds fast to the values and corporate culture of anti-corruption and anti-bribery, and is committed to creating acorporate image with ethics, integrity and honesty, and building an honest and transparent business society. As we pursue a soundcorporate system, upgraded governance and integrity culture, we continue to deepen our employees’ concept of fair competition andbusiness ethics, in order to create a fair and just business environment. There was no significant punishment and rectification occurredduring the Reporting Period of the Company, please refer toAnnual Report 2022 for details.Strengthening Integrity ConstructionPursuant to the relevant anti-corruption and anti-bribery laws and regulations, Luxshare Precision has developed a series of rules andregulations, such as theEmployee Handbook, theGlobal Code of Business Conduct and Ethics, theEmployee IncorruptibilityManagement Systemand theProcurement Business Ethics Management System, to guide and restrict the business conduct ofemployees and partners. Under the guidance of the corporate culture of “integrity and honesty, openness and fairness, reliability andcompliance, incorruptibility and self-discipline”, we regularly carry out integrity training and assessment to consolidate the Company’sintegrity culture.A special taskforce is set up under the Company’s Discipline Committee to independently undertake its oversight and managementresponsibilities, handle complaints and reports related to violations of law and discipline, breaches of professional ethics, and acts thatharm the interests of the Company with respect to Luxshare Precision employees or organizations. As the Chairman directly leads theDiscipline Committee, she receives regular reports and is accountable to the Board.
Integrity Education and TrainingThe Company actively conducts integrity education for all employees and managers. Weincorporate theGlobal Code of Business Conduct and Ethics (“COC”)into our employees’quarterly training and appraisals, and the results of the appraisals are linked to their performanceappraisals and promotions, in an effort to enhance their awareness of integrity.In 2022, the Company carried out annual anti-corruption and integrity online training for allemployees, and special publicity for personnel in quality control, strategic procurement, salesand other positions. The training includes the interpretation of internal corruption cases, theCompany’s penalty system standards, and reward policies and reporting channels for anti-corruption and integrity.Preventing the Risks of CorruptionAnti-bribery and anti-corruption are the fundamental principle of building an honest andtransparent business society, which is also an inherent requirement of Luxshare’s values andcorporate culture. Preventing corruption risks reflects management’s commitment to ethics,honesty and integrity in operations. During the Reporting Period, the Company received 4internal feedback report on corruption and bribery, unfair transactions, etc. after internal audit.The employees involved were dismissed and the money was returned in accordance with theCompany’s relevant systems, in which no significant risks were involved. And there was zerolitigation case involving the Company and employee corruption in 2022.Business Ethics Governance Structure
Chairman
DisciplineCommittee
Inspection/Supervision Group
Legal GroupAudit GroupFinancial GroupPublicity Group
100%
employee anti-corruption training coverageDuring the Reporting Period ofthe last three years,
100%
of all employees signed theEmployee’s Letter of IntegrityCommitment and Employee’sLetter of Commitment on Codeof Conduct.
959,488
total hours ofanti-corruption and businessethics-related trainingA total of
business ethicstraining sessions for managersof M3 or above in high-riskpositions such as procurementpass rate of the COC exam
100%
Integrity in Management
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Whistleblower ProtectionThe Company understands whistleblowers’ concerns about reporting-related issues and willnot tolerate discrimination or retaliation against whistleblowers by anyone.We assure that anyperson who reports such matters in good faith will not be retaliated against, and stipulatethat if an incident of retaliation is discovered or an employee is found to make any retaliationattempt, such incident must report to the factory’s top supervisor and the Director of theDiscipline Committee. The Company will punish the supervisor, manager or other employeewho retaliates or attempts to retaliate, with a maximum penalty including but not limited totermination of employment.All reports of the Company are handled confidentially by specialized auditors designated byour senior management to ensure that specialized auditors do not have or are unlikely tohave any conflict of interest with the reported person, to prevent reported person/departmentfrom knowing the relevant reporting source. We respect the privacy of whistleblowers andkeep their personal information strictly confidential. It is prohibited to provide whistleblowers’personal information to anyone outside the Company, except as required by law or thewhistleblower’s special authorization, in order to ensure such information are properlymanaged. The members of the Discipline Committee and investigators of the case must signtheStatement of Discipline Committee and Case Investigation Personnelprior to caseinvestigation.
Fair CompetitionAnti-unfair CompetitionLuxshare Precision actively creates a fair and just business environment. According to theAdvertising Law of the People’s Republic of China, theAnti-Unfair Competition Law of thePeople’s Republic of Chinaand theSeveral Provisions on Prohibiting Infringements upon TradeSecretsand anti-monopoly related laws and regulations in the countries or regions of business, theCompany has formulated theCode of Ethical Operating Procedures. Also, the Company stipulatesthat no employee shall use illegal means to access competitors’ trade secrets or other confidentialinformation, conduct illegal hacking, theft, wiretapping, bribery, and publication of false or misleadingadvertising information, and conspire with peers to set prices to disrupt market order and carry outother illegal acts.Intellectual Property Right ProtectionSafeguarding technological innovation achievements is the basis for encouraging continuousinnovation of R&D personnel. We strictly abide by thePatent Law of the People’s Republicof China,theCopyright Law of the People’s Republic of China, theTrademark Law of thePeople’s Republic of Chinaand other laws, regulations and standards related to intellectualproperty. The Company has developed internal management systems as theIntellectualProperty Management Manual, theIntellectual Property Management and Control Procedureand the Procedures for Risk Management of Intellectual Property. We not only prioritize theprotection of our own intellectual property rights, but also respect the intellectual property rightsand interests of all parties. Under the premise of non-infringement of the intellectual propertyrights of companies and individuals, we enhance our own intellectual property protection.Various measures are adopted to control potential risks of infringement of intellectual property,including market patent investigation, internal risk investigation and other forms, to safeguard thelegitimate rights and interests of the Company.During the Reporting Period, The Company carried out anti-unfair competition publicity andtraining in the form of quarterly assessments, and regularly sent theNotice on Respectingthe Intellectual Property Rights of Others,Strictly Keeping Trade Secrets and Complyingwith Previous Employers Obligationsto affiliated companies and internal employees byemail every month, so as to enhance employees’ awareness of fair competition and restrictemployees’ behaviors. With regard to intellectual property protection, we actively keep trackof the development of research projects, and conduct intellectual property rights assessmentsthrough patent investigations, internal risk investigations and other forms. We have alsoimplemented relevant measures such as patent infringement avoidance or invalidation based onthe assessment results to control patent infringement risks.
During the ReportingPeriod, there were atotal of
cases oftrademark invalidationand opposition, andwe analyzed at least
patent maps ofcompetitors in the newmarkets that we intendto break into
In 2022,there were
anti-unfaircompetition, antitrustand antitrust-relatedlegal proceedings
Address:
#311 Beihuan Road, QingxiTown, Dongguan, GuangdongProvince, ChinaTel:
0769-38800880WeChat:
13688847351QQ:
3413207068Email:
justice@luxshare-ict.com
ReportingChannels
Whistleblowing Management Flowchart
?
Deciding whether thesuspected act is true or not?
Implementing reward andpunishment mechanisms?
Evidence collectionand verification?
Assigning taskforces?Signing the Statement ofInvestigation
InvestigationCase ArrangementCase Conclusion?Accepting the reportedcaseReport Receiving
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
Environmentally
Friendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
To effectively prevent and address major risks, Luxshare Precision continuously strengthens risk management and control, and improvesinternal management measures and systems. We develop risk management strategies, facilitate the internal audit process, and promotethe Company’s continued sound operation through regular risk identification.Risk Identification and Response
Risk Management and Processes
Luxshare Precision formulates corporate internal control related system by law to regulate its risk assessment and managementprocesses. With regular and accurate identification of internal and external risks, the Company comprehensively applies risk avoidance,risk reduction, risk sharing and risk acceptance strategies to address potential risks, to minimize the impact of adverse factors, and ensurethe steady development of the Company. In 2022, we carried out risk identification and management work, identified and assessed arange of risks, including climate change risk, and formulated strategies accordingly through qualitative and quantitative methods.
Internal ControlManagementLuxshare Precision internal control system is guidedby the Committee of Sponsoring Organizations ofthe Treadway Commission (COSO) framework,and has established three defense lines for riskmanagement and internal control.
Compliance ManagementLuxshare Precision’s compliance management is focused on key operational areas such as procurement, production and sales. The Companyhas formulated and strictly implemented the corresponding standards to standardize the operation process. In the implementation of the wholeprocess supervision and management, timely rectification of problems will be adopted to ensure that the Company’s development and operationcomply with regulations, and compliance management is effective.Internal Audit
To improve the transparency of the Company’s operations, Luxshare Precision has established an Audit Committee, directly led byindependent director Liu Zhonghua, with a Internal Audit Department responsible for auditing the effectiveness and completeness ofCompany’s policies and standards, and reviewing the compliance of daily operations. The Internal Audit Department, as the Company’sindependent internal audit institution, has built a “specialized, comprehensive, and focused” internal audit system to guarantee theindependent performance of our regulatory duties. The Company conducts internal financial and non-financial audits once a year for allfactories and operating sites at home and abroad, marketing and production management audits at least semi-annually, and procurementaudits for suppliers at least once a year. The internal audit system and coverage in 2022 include human resources and compensation,social responsibility, capital activities, procurement business, asset management, sales business, business ethics etc.
Thefirst defenseline: BusinessDepartmentThe second defense
line: Compliance
ManagementThe third defense line: Audit Committee
Integrate risk management into daily work to manage risksin the actual operation of each business
Organize and promote risk management processesand activities, and build the Company’s riskmanagement and internal control system
Review the effectiveness and adequacyof the Company’s risk managementand internal controls, and oversee theimplementation of improvement measures
Risk TypeMain Risk ItemResponse Strategies
Corporategovernance risk
Continuously improve the corporate systems, standardize the Company’s production andoperations, perfect the corporate governance structure, pay attention to the protectionof shareholders’ rights and interests and investor relations management, and constantlyenhance corporate governance.Productcompetitivenessrisk
The Company’s products and business layout show diversified and vertical integrationcharacteristics, comprehensively covering components, modules and system assembly,and providing one-stop professional services in an all-round way, which accelerates theapplication of intelligent manufacturing and big data operation and management platform.
运运运运
New technologyand new productdevelopment risk
Continue to actively invest required R&D expenses in the development of new technologiesand new products, introduce and cultivate new technology and new product developmenttalents, improve research and development capacity.Product quality risk
Optimize the quality management process, continuously promote an intelligent testing andintelligent quality management system, and improve the quality management at all stages,including supplier management.Climate change risk
Regularly monitor climate changes, sign the letter of commitment of science-basedtarget (SBTi) of 1.5℃ pathway, identify climate-related risks, and formulate short-,medium – and long-term carbon reduction goals and action plans, the management takecountermeasures against risks with high importance and urgency.Labor relations risk
Improve the labor management system, set up trade unions in each production base, andactively maintain good communications with employees through multiple channels.Business ethics risk
Set up the Disciplinary Committee led by the chairman, implement business conductcompliance management, and conduct a regular internal audits of business ethics.Intellectual propertymanagement andprotection risk
Establish the intellectual property management system, investigate and confirm othercompanies’ intellectual property at the appropriate time of design and development.
Risk Control
Strategic
Risks
Operational
risks
Compliance
Risk
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturing
Stable and Healthy
Operation Leads
to SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Information security is the foundation for the Company’s survival and development. Luxshare Precision continues to strengthenemployees’ awareness of privacy protection through system improvement, risk management and security training, and maintains theinformation security of customers, employees and the Company.
We have adopted the following management measures to protect the information of our employees and customers in all aspects:
During the ReportingPeriod, LuxsharePrecision successfullypassed the annualaudit of the
ISO27001
informationsecurity standardcertification, andsuccessfully obtained theISO 27001 certificate inan independent audit forXuancheng factoryDuring the ReportingPeriod, LuxsharePrecision had
incidents of informationleakage
Information Security
Luxshare Precision adheres to the goal of “zero major information security leaks, zero major informationsystem failures and zero business continuity interruption incidents”. In addition to establishment ofthe Information Security Department, the Company has developedabout 60internal systems andoperating procedures, including theInformation Security Management Manual, theManagementProcedure of Information Security Monitoring, theManagement Procedure of Information SecurityIncidents,theNetwork Security Management Procedure, Information System Emergency Plan andtheManagement Procedure of Information Security of Related Parties, and built a strong informationsecurity system, to ensure the information security of the Company’s information infrastructure,information application system and products, and customers.
Information Security Risk Management
Luxshare Precision has formulated an internal information security risk management system for thepurpose of effectively controlling information security risks, practically protecting the information securityof the Company, employees and customers, and maintaining the stable operation of the Company’sinformation system. It has established five security systems for emergency response, timely protection,training, operation and maintenance, and supervision, as well as five security modules for vulnerabilitymanagement, development security, confidentiality area compliance, terminal security and businesscontinuity assurance, in addition to certain risk control enhancements such as off-site backup,penetration testing, code audit, patch update, and anti-virus and loophole scanning.
Organization and personnel?Establish a management framework within the organization,initiate and control the establishment and operation ofinformation security.?Conduct information security training for the Company’semployees and external personnel, and define theinformation security responsibilities of employees at work.Training is conducted at least semi-annually.
?Provide the relevant personnel with appropriate access
rights for their job responsibilities, develop a list of useraccess rights and regularly review.
?Set network boundaries and security domains for access
control, monitor and manage network devices and networkactivities, and formulate network security policies andoperation procedures.
Network access control
?Evaluate and analyze system security requirements andimplement security mechanisms corresponding to servicesecurity level requirements.
?Establish an independent development environment to
ensure information security of design and implementation inthe information system development life cycle.
?Conduct code audit during the development process,
and implement vulnerability scanning on the system andapplication server after development, and fix all medium –and high-risk loopholes.
?Ensure environment guarantees for different levels ofequipment rooms, including UPS, temperature and humidity,fire protection, and static protection.
?Use area isolation, access control system, video surveillance,
and security to prevent unauthorized activities such asaccessing, damaging, and interfering with the security zones.
Software development securityPhysical security
Information Security and Privacy Protection
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Information Security TrainingLuxshare Precision put a premium on information security training of employees. Training coversinformation security and confidentiality awareness, information and communication technology (ICT)information security and others.Information Security Emergency Response PlanIn 2022, in order to resolve and prevent the risk of major information security leakage, the Companyestablished an Emergency Response Management Team (CMT), formulated an information securityemergency response plan, including an emergency contact list, set up an emergency command structure,laid down emergency response processes and measures, and prepared emergency response drill planscovering the entire process. The scope and content of the emergency response plan is determined basedon the risk assessment of potential security incidents and the risk identification of potential informationsecurity threats. To test the feasibility and integrity of the emergency response plan, we regularly carry outinformation security emergency response drills, and revise and improve the emergency response plans.During the Reporting Period, the Company carried out business continuity drills, monthly vulnerabilityscans, quarterly failure drills, and semi-annual penetration tests for key business databases, and fixed atotal of
system vulnerabilities.Privacy ProtectionLuxshare Precision attaches great importance to the privacy security of customers, employees and itself,and has formulated privacy management measures such as theTrade Secret Management Procedure,theThird-Party Service Management Procedure, and theManagement Procedure of InformationSecurity of Related Parties, as well as well-established desensitization standards and processes. Inorder to manage the customers’ privacy, employees’ behaviors are regulated by the provisions of theEmployee Handbookand theGlobal Code of Business Conduct and Ethicsand regular assessments.It is prohibited to disclose partners’ privacy and business information.
ClassifiedManagement
AssetManagement
AccessPermission
PersonnelManagement
Privacy protection content: Defined
according to customer requirements orthe Company’s confidentiality standards.Privacy protection mark: According to
the determined level of confidentialityand confidentiality period, attacha confidential mark or affix theidentification seal for the commercialsecret matters of each unit.
High-sensitivity data protection: Detailed
desensitization standards are developedaccording to different businesses,departments and interested parties.
Confidential information management:
Relevant confidential information obtainedin the course of work shall be properly keptby the personnel involved, and shall not betaken to home or public places or disclosed.Storage of confidential information:
Confidential documents, records, disks,optical discs or other storage mediashould be placed in locked file cabinets,safes or other forms of insurance furniturewhen not in use, and special personshould be designated to manage the keys.
Authorization management: Computer
application personnel should use alegitimate user name, password orpassphrase, and such password orpassphrase should not be disclosed to anyirrelevant or unauthorized personnel.Equipment repair and maintenance: The
installation, debugging and overhaul ofcomputer equipment involving enterprisesecrets shall be undertaken by theprofessional technical personnel of theInformation Service Office, and otherpersonnel shall not disassemble andoverhaul the computer equipment.
Secret-involving conference management:
The organizing department shall strictlydetermine the attending personnel for anysecret-involving meeting.Access permission terms: All parties
providing various products or servicesto the Company that require physical orlogical access to our information assetsmust sign a confidentiality agreement orconfidentiality clauses document.
Privacy protection training: Provide training
and assessment on privacy protection foremployees.
Privacy Protection Measures
During the ReportingPeriod, the Companyconducted a total of
489,000
hoursof online and offlinetraining with a total of58,771
person-times
During the ReportingPeriod, LuxsharePrecision had
substantiatedcomplaints involvinginfringement uponcustomer privacyand loss of customerinformation
As a leading player in manufacturing, Luxshare Precision fulfills its environmental responsibilityand is dedicated to realizing its environmentally friendly commitment. We have focused on thegoal of carbon neutrality, constantly improved the environmental management system, andincreased investment in environmental protection. We have empowered the Company to addressclimate change with actions and fulfilled commitment to climate change wholeheartedly. We haveoptimized the transformation of the energy structure, improved energy efficiency, promoted thesmart transformation of energy management, and comprehensively promoted energy conservationand emission reduction. Meanwhile, we have carried out a series of water-saving actions andadopted innovative sewage treatment technologies to actively address enterprise-level water risks.In response to the national development plan, we have vigorously developed circular productionand explored opportunities to improve the utilization rate of resources and reduce waste dischargein the whole process from material selection to waste disposal. We have strengthened the control ofchemicals and hazardous substances. With the goal of comprehensively reducing and eliminatingharmful substances in our products, we have worked with our suppliers to craft more environmentallyfriendly and healthier products. By fully making use of our advantages in industry and technology, theCompany vigorously expands its business in such clean technology fields as solar power, battery,new energy vehicles to propel green transformation.
? Risks and opportunities brought
by climate change? Zero carbon commitment andcarbon management? Chemical management
? Energy management? Water resourcesmanagement? Waste and circularproduction
Energyconservation
and carbonreduction investment
RMB
73.50
million
factoriescertified asGreen Factory and
as Near ZeroCarbon Factory
subsidiariesreceived Platinumrating and
receivedGold rating inUL 2799 in total
Clean electricity
usage
639,674
MWh
? Green products and
business
Environmentally Friendlyand Circular Economy
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Luxshare Precision is bound up with the environmental management policy of “participation of all, prevention and control of pollution,providing green products in line with the requirements of environmental protection; continuously reducing waste and operating asa green enterprise conforming to the requirements of laws and regulations”. The Company constantly improves its environmentalmanagement system and continues to promote the system certification work, in order to achieve standard management. In themeantime, we continue to increase the investment in various environmental technologies and projects, to support LuxsharePrecision’s green manufacturing transformation.Management SystemLuxshare Precision strictly abides by the EnvironmentalProtection Law of the People’s Republic of China, the Lawof the People’s Republic of China on Environmental ImpactAssessment, the Cleaner Production Promotion Law of thePeople’s Republic of China, the Regulations on EnvironmentalImpact Assessment of Planning, the Measures for theManagement of Ecological Environment Standards, and hasformulated and promulgated system documents coveringenvironmental management such as the EHS ManagementHandbook and the Employee EHS Handbook. In order tocontinuously promote the standardization of environmentalmanagement of the Company, we have also developed theControl Procedure of Environmental Factor Identification andAssessment, the Operation Procedure of Environmental Safetyand Health Policy, the Control Procedure of Laws, Regulationsand Other Requirements, the Control Procedure for Objectives,Indicators and Management Plans, and other environmentalmanagement procedures. We are dedicated to the pursuitof better environmental performance based on ensuringcorporate environmental compliance.
Participation in Standard Formulation
Simultaneously, the Company applies its own experience in the certification of standard environmental management system to theformulation of standards, and promotes the enhancement of environmental management in the industry. In June 2022, LuxsharePrecision cooperated with Envision Group to jointly formulate and promulgate the complete and quantifiable construction standardsand evaluation rules for “zero-carbon factories” - Zero-carbon Factory Evaluation Specification together with more than 20 globalauthoritative institutions and leading enterprises such as China Energy Conservation Association, to advance the industrial “carbonpeaking and carbon neutrality” transformation.
Quantifiable Evaluation RulesZero-carbon Factory Evaluation Specification
Luxshare Precision and its
factories werecertified by ISO 14001 Environmental ManagementSystem
This year, an accumulative total of
factories were awarded national orprovincial or municipal Green Factory,
factories were newly awarded national orprovincial or municipal Green FactoryIts subsidiary Luxshare Electronic Technology (Kunshan)Co., Ltd. was evaluated as a
Near ZeroCarbon Factory in Suzhou
By the end of the Reporting Period,
Environmental Management System
Luxshare Precision ISO 14001 EnvironmentalManagement System Certification Certificate
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Luxshare Precision integrates climate change into corporate strategy, systematically identifies and responds to climate risks andopportunities that may affect the business operations, carries out innovative climate actions in a comprehensive manner, andimplements zero carbon management throughout the value chain.
GovernanceStrategy
Risk managementMetrics and targets
? Identifying applicable climate risks and opportunitiesbased on the classification of climate risks andopportunities by the Task Force on Climate-relatedFinancial Disclosures (TCFD), in consideration ofLuxshare Precision’s business segments.? Conducting relevant policy review based on theidentified results to understand the importance andfuture development trend of various climate risks andopportunities in the macro environment.
? Assessing the impact of climate change-relatedrisks and opportunities on the Company’s business,strategy and financial planning over time and underdifferent scenarios through qualitative climate scenarioanalysis.
? Establishing a Task Force on Carbon Neutrality led by
the Board of Directors, coordinated by the SustainableDevelopment Center, and joined by each factory tocomprehensively promote climate change-relatedmatters, and ensure that all affairs are implementedin accordance with the plan and relevant goals areachieved.? The Strategy Committee under the Board of Directorsis responsible for the deliberation of the Company’ssustainable development-related matters involvingclimate change, including internal and externalstakeholder communication, materiality assessment,risk identification, target and strategy formulation,etc., to ensure the implementation of the Company’ssustainable development and climate strategy.
? We intend to complete the development of carbon
reduction targets in line with the Science BasedTargets initiative (SBTi) 1.5°C pathway in 2023, andcommit to achieving carbon neutrality no later than2050.
? Setting clean energy transformation targets and aiming
to achieve 50% clean energy use by 2025.
? With identification, selection and assessment of
Luxshare Precision’s potential climate risks everyyear, risk management departments devise theircountermeasures, which are subject to deliberation ofthe Strategy Committee under the Board of Directors,who will develop additional countermeasures ifnecessary.
? Categorizing various climate risks according to
probability of occurrence and impact, and themanagement takes countermeasures against risks withhigh importance and urgency.
Climate Risks and OpportunitiesWe have placed considerable emphasis on responding to climate change, established and made continuous efforts inimproving the climate governance structure, and committed to integrating climate governance with the Company’s managementand business system.As we developed strategies and actions to address climate change after identifying climate risks and opportunities, we responded tostakeholders’ increasing concerns about business continuity and sustainability in the context of climate change. Referring to the TCFDrecommendations, we organized key units highly related to climate risks and opportunities to evaluate and investigate potential risksand opportunities in upstream, downstream and our own operations during the Reporting Period. Moreover, we carried out specialtraining on climate change to improve employees’ understanding of risks and opportunities relating to climate change. For details ofidentification and countermeasures regarding climate-related risks and opportunities, please refer to the Luxshare Precision ClimateRisk and Opportunity Identification and Response Strategy.
Climate Change Action
Luxshare Precision Climate Risk and Opportunity Training 2022
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Luxshare Precision 2022 Sustainability Report
Project preparation survey
SBTi commitment releaseGuidance for data collection
of greenhouse gasScope 3
ISO 14064 Company certi?cationSBTi document development
Completed as of the end of 2022
Mid- to long-term plan
ISO 14064 greenhouse gasinventory training
Greenhouse gas data guidanceand inventory completion
Greenhouse gas carbon neutralityand emission reduction plan,and formulation of emission reduction path
SBT submission, approvaland amendment
Stage 0Stage 2Stage 4Stage 9Stage 11
Stage 10Stage 8Stage 3Stage 1Supply chain low-carbonmanagement scheme designStage 7Supply chain greenhouse gas inventory auditStage 6
Supply chain low-carbon capacity buildingStage 5
Formulate the implementationpath and follow up onimplementationAdjust the goal according tothe operation and businessneeds
?
?
Planned to implement in 2023Planned to implement in themid- to long-term
Climate Action and Planning
Climate Change Commitments
Luxshare Precision remains steadfast in sustainable development, and makes proactive response to global climate action. Wehave set ambitious carbon reduction targets, for which we have initiated practical activities, such as investing heavily in theenergy conservation and emission reduction, assisting our supply chain partners to achieve green and low-carbon development.On January 5, 2022, we publicly committed ourselves to setting carbon reduction targets that conform to the requirementsof the SBTi1.5°C pathway and expected to achieve carbon neutrality no later than 2050. We steadily promote the action planfor carbon inventory, carbon emission reduction and carbon neutrality in accordance with the climate action plan roadmap,formulate a climate change strategy that is in line with the business strategy and the actual operation of each factory, and planto regularly review and adjust the climate change strategy according to the actual business situation to ensure that our climateaction and planning are timely, feasible and effective. As at the end of the Reporting Period, the Company has initiated theformulation of emission reduction plans and pathways, as well as science-based targets, and final version of our science-basedtargets will be prepared in 2023.
Conduct carbon inventory within theCompany to identify greenhousegas emission sources and typesat all stages and and quantifythe emissions, so as to have acomprehensive understanding ofcarbon emissions
Carbon Inventory
Identify links to reduce carbonemissions on the basis of carboninventory analysis and developrelevant emission reductionmeasures for the purpose ofeffective control and management
Carbon emission
reduction
Neutralize GHG that cannot becompletely eliminated On the basisof emission reduction by purchasingcarbon credits, so as to achieve“zero carbon”
Carbon neutrality
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In order to promote the work related to climate change response and ensure the achievement of carbon reduction goals, we take the energystructure adjustment and low-carbon transformation as the core of our emission reduction work, and advocate extensive use of clean energy.In our plan, the proportion of clean energy utilization will reach 50% by 2025. We are committed to promoting the low-carbon energy structure ofLuxshare Precision and helping to achieve the goal of carbon neutrality through low-carbon actions such as energy-saving transformation, rooftopphotovoltaic business, direct purchase of green electricity, green energy investment, and procurement of products with green certificate.
10%
30%
30%
20%
5%
5%
GHG emission
Carbon offsetBaseline yearEnergy
increase
Grid emissionintensity
Carbonneutrality
gap
Energy savingRooftopphotovoltaic
power
Directpurchaseof greenelectricity
Green energy investment
Purchasing
greencerti?cate
Carbon emissionCarbon neutrality gapScope 2 carbon neutralityScope 1 carbon neutrality
During the Reporting Period, we continued to promote the inventory of Scope 3 greenhouse gases, inaccordance with the climate change plan. We invested a lot of resources to carry out green and low-carbonactions with suppliers to increase our capacity of supply chain carbon reduction, to promote the low-carbondevelopment of supply chains.
Luxshare Precision was awarded the “2022 EnvironmentalLeap Forward Award for Excellent Enterprise inEnvironmental Information Disclosure” by CDP, a global
non-profit environmental organization, in recognition ofthe Company’s outstanding performance in environmentalinformation disclosure.
In the CATI (Climate Action Transparency Index)evaluation of listed companies by IPE (Institute of Publicand Environmental Affairs), Luxshare Precision ranked2nd among 500 A-share and H-share listed companies,top 10 in the industry ranking and top 20 in the overallranking, and we were also highly praised for excellentcarbon emission management throughout the value chainand supply chain carbon reduction capacity building.
Luxshare Precision’s Pathway to Operational Carbon Neutrality by 2050
OverallRanking17420212022
IndustryRanking
Climate Action Evaluation
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Luxshare Precision 2022 Sustainability Report
As a responsible corporate citizen, in the context of the increasing impact of climate change on the global environment, LuxsharePrecision has constantly raised the requirements of emission management and remained steadfast in the concept of low-carbondevelopment, aiming to reduce the impact of its production and operation on the atmospheric environment, and help mitigateclimate change.Greenhouse Gas Emission ManagementIn response to the national “carbon peaking and carbon neutrality” goals and practicing our commitment to carbon neutrality by2050, we have continued to optimize greenhouse gas emission management, proactively identified opportunities for emissionreduction, and strived to reduce the Company’s carbon footprint.In order to clarify the status quo of the Company’s greenhouse gas emissions and lay the foundation for formulating carbon emissionreduction strategies and conducting related work, we have carried out third-party greenhouse gas verification in accordance withthe Guidelines for Enterprise Greenhouse Gas Emission Reporting and Verification (for Trial Implementation), the Measures for theAdministration of Carbon Emission Trading (for Trial Implementation), and the ISO 14064-1 standards. During the Reporting Period,the Company completed the 2021 ISO 14064-1 third-party greenhouse gas verification.In the future, we will continue to make the inventory of greenhouse gases in the supply chain, in order to determine scientific andfeasible carbon neutrality and emission reduction programs and emission reduction pathways based on the complete baselineemissions, and strive to realize the Company’s carbon reduction targets.
ISO 14064-1 Third-party Greenhouse GasVerification Statement for 2021
During the Reporting Period,Direct Greenhouse Gas Emissions (Scope 1):
82,335.27
metric tons of CO
equivalentIndirect Greenhouse Gas Emissions (Scope 2)(Location-based):
1,693,867.06
metric tons of CO
equivalentIndirect Greenhouse Gas Emissions (Scope 3)
:
1,388,277.91
metric tons of CO
equivalentGreenhouse Gas Emission Density (Scope 1 and 2)(Location-based):
8.30
metric tons of CO
equivalent/RMB1 million
Luxshare Precision’s greenhouse gas emissions data for 2022 were unverified greenhouse gas emissions data. Scope 3 emissions data were disclosed
partially in five categories: capital goods, waste generated in operations, business travel, employee commuting, downstream transportation and distribution.Complete and verified greenhouse gas emissions data of 2022 will be disclosed in the 2023 CDP questionnaire.
Emission Management
? Replace some diesel forklifts withelectric forklifts? Reduce use of private cars
? Improve compliance management
of waste gas emissions? Upgrate waste gas treatment
equipment
Case | TIME Interconnect Technology Carried out “One Factory & One Policy”Exhaust Gas Emission Compliance Improvement Campaign
Air Pollutant Emission ManagementThe Company is well aware of the importance of compliant emissions to ecological and environmental protection. In accordancewith national laws and regulations such as the Atmospheric Pollution Prevention and Control Law of the People’s Republic of China,the Regulation on the Administration of Ozone Depleting Substances, and the Catalogue of Classified Management of DischargePermits for Fixed Pollution Sources (2019 Version), we have carried out environmental impact assessments on all projects,implemented real-time monitoring and early warning through on-line data monitoring, and carried out regular environmental testingevery year, to strictly control the emission of nitrogen oxides, sulfur oxides, particulate matter and other air pollutants. In addition, westrictly control raw materials in accordance with laws and regulations to ensure that they do not contain ozone-depleting substances(ODS).Meanwhile, we have minimized the impact of our emissions on the environment around our operating sites by reducing energy useat source and strengthening compliant exhaust gas emissions.
In 2022, TIME Interconnect Technology Limited carried out acampaign to improve exhaust gas emissions compliance. Combiningwith the requirements of “One Factory & One Policy” proposedby the environmental protection department of the government,it upgraded the exhaust gas treatment equipment, and addedexhaust gas activated carbon adsorption equipment to the originalUV photocatalytic equipment. During the year, Time InterconnectTechnology Limited installed a total of eight activated carbon filterboxes on the rooftop of the Huizhou factory. All the exhaust gasesproduced in the factory, such as solder dust and injection gas, werefiltered through the filter boxes and then discharged at high altitude.
Emission Management
Reduce energyuse at resource
Strengthen compliantwaste gas emissions
Installation of Activated Carbon Filter Box
on Rooftop of the Factory
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ISO 50001 Energy Management System Certificates
The outstanding energy management is a material part of Luxshare Precision’sblueprint for carbon neutrality. Adhering to the energy management policy of“compliance with regulations, cleaner production, higher energy efficiencyand continuous improvement”, we have continued to promote the use ofrenewable energy, comprehensively carried out projects of energy conservationtransformation. Also, we promoted intelligent transformation of energymanagement and strove to make the Company carbon neutral.
Promoting the utilization of renewable and clean energy is crucial forLuxshare Precision to transform its energy structure and address therisks of climate change. We have continued to develop rooftop PV power,invested a lot of resources in promoting the PV panel installation amongfactories, and explored the possibility of leveraging on other types ofrenewable energy and clean energy through direct procurement of greenelectricity, investment in Clean Energy Fund and procurement of greencertificate. We plan to increase the proportion of clean energy usageto 50% by 2025 and reduce greenhouse gas emissions arising fromelectricity usage.
By the end of the Reporting Period,
of the Company’s factorieshad passed ISO 50001 EnergyManagement System Certification.
Utilization of Renewable Energy
Energy Management
Chuzhou Factory Laid Rooftop PV
Power Generation Equipment
Likai (Yancheng) ProcuredGreen Certificates
The Company calculates the total reduced greenhousegas emissions based on the baseline of emissions withoutany renewable energy utilization measures taken, includinggreenhouse gas emissions reduced by self-consumption ofsolar PV power generation, green certificate procurement,investment in Clean Energy Fund, and direct purchase of greenelectricity.
Total reduced greenhousegas emissions emissions
Tons of carbondioxide equivalent394,605.79
Key Performance of Clean ElectricityUtilization in 2022
Overall installed capacity of rooftopsolar PV power generation
Megawatts
54.64
Total solar PV power generated
MWh41,021.89Procurement of green certificate
MWh301,490.00Directly purchased green electricity
MWh271,619.41
Emission rights obtained via investmentin Clean Energy Fund
MWh26,463.96
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Energy Conservation TransformationLuxshare Precision has a strong conviction that energy conservation is the key to realizing sustainable development formanufacturing enterprises. We formulated the Energy Conservation and Consumption Reduction Control Procedure to standardizeand guide the energy conservation work of the Company and each factory. We set goals and improvement plans of energyconservation for the Company every year. Each factory also sets energy conservation goals according to its own production andoperation situations. In addition, we keep track of the achievement of the goals.
Frequency Conversion Transformation of FansIn this fan frequency conversion transformation project, a frequency converterwas installed on the air conditioning fan and the blower in the factory toreduce the rotation frequency of the fan when the refrigeration demand waslow to realize energy conservation. During the Reporting Period, Jinxi factoryhas completed partial building transformation and is expected to save 4,470MWh of electricity annually. It is expected to complete the whole factorytransformation by 2023.
Case | Jinxi Factory Carried out a Number of Technology Projects of Energy Conservation
Waste Heat Recovery Transformation of Air CompressorIn order to reduce the heat escape of air compressor equipment and theenergy waste, Jinxi factory installed waste heat recovery machine in the aircompressor system to absorb the escaped heat, and the recovered heat wasused to produce hot water. At present, all dormitories in Jinxi factory haveadopted waste heat recovery from air compressors to supply hot water, with anestimated annual power conservation of 6,269 MWh.
Frequency Conversion Transformation
of Fans in Factories
Waste Heat Recovery Transformation
of Air Compressor
Investment in energysaving projectInvestment in cleanenergyNote: Clean energy investment includes 2022 direct purchase of green electricity, green certificateprocurement and investment in Clean Energy Fund.
30%
70%
Investment in Energy Conservation and Carbon Reduction
The Company is in the conviction that continuous and efficient investment in energy conservation and carbon reduction is thecornerstone of improving energy efficiency and promoting low-carbon transformation of energy structure. We have actively carriedout all kinds of energy conservation transformation projects within the Company, and invested heavily in clean energy to help realizethe carbon reduction goal of SBTi 1.5°C pathway.
Energy Conservation Transformation Projects in 2022Number of energyconservation projectsModule of Energy Conservation
Annual powerconservation
(MWh)
Annual greenhouse gas emission reduction (tCO
e)
ProductionpowerconsumptionCentral airconditioning
Life andoffice powerconsumptionGas supplysystemExhaust fan infactories
4139,576.5724,531.94
Total
189,975.21117,404.85
7346,571.3328,700.852718,706.8611,551.44
4824,105.2114,897.217761,015.2437,723.41
We regularly carry out transformation of energy conservation for five major energyconsumption modules: production power consumption, gas supply system, central airconditioning, exhaust fans in factories, and power consumption of living and office. Withthe combination of management and technology optimization, we can effectively reducethe energy and greenhouse gas emissions of the Company and factories.
In 2022, the Company’s investment in energy conservationand carbon reduction reached RMB
73.50
million,showcasing Luxshare Precision’s determination topropel green production and operation.
Electricity saving rate
reached9%
Electricity saving rate = (Electricity saving in the current Reporting Period/total Electricity consumption in the previous Reporting Period) *100%. This indicator
represents the energy saving opportunities identified by the Company during the Reporting Period and provides an estimate of future energy saving potential.
Annual power saving of energy conservation transformation project = 12* (Monthly electricity consumption before transformation – monthly electricityconsumption after transformation).
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Intelligent Energy Management
Luxshare Precision draws on its technical advantages to organically combine energy management and intelligent parkmanagement, and continues to promote the construction of IOE (Internet of Energy) intelligent energy management platform. TheIOE intelligent energy management platform is mainly composed of eight functional systems. By means of software technology, thedigital and intensive management of production and equipment can be achieved to improve the production and operation efficiencyof the Company and reduce the energy consumed by the operation and maintenance of electromechanical equipment.
? Digital twin, panorama and otherthree-dimensional visualizationmeans, achieve the acquisitionof realtime energy consumptioninformation of electromechanicalequipment
? Equipment operation data, energy
consumption data, dynamic ringdata, are collected to realize thevisualization of electromechanicalequipment energy management inthe whole field of factory
? Carry out dynamic
monitoring and managementfor the energy utilizationwhole process of “production- distribution - use”, andachieve multidimensionalanalysis of energy data
? Quickly locate abnormity of
equipment energy utilizationthrough intelligent alarms andwork order generation andsending, and enhance theefficiency of the Company’senergy management? Reinforce the Company’s
energy consumptionsafety through meticulousmanagement ofelectromechanicalequipment warehousing andexiting
? Provide information
support for equipmentenergy efficiency managementcovering the whole life cycle ofequipment such as equipmentpurchase, use, replacement,repair, maintenance, andscrapping
? Install cctv for rooms with
energy equipment, setaccess permissions, recordspersonnel’s access, andproperly manage equipmentroom safety
? Automatically analyze equipmentenergy consumption, in referenceto end demands. Seek the optimalenergy efficiency combinationcombining AI algorithm and dataanalysis
During the Reporting Period, we have upgraded the intelligent energy management platform, optimized the energy data analysisand visualization functions, and realized quicker and more accurate discovery of energy consumption anomalies. And we havechecked abnormal electricity consumption to ensure energy use safety and eliminate energy waste. In the meantime, we areexploring the next stage of intelligent energy management technology – intelligent group control, to realize the automatic control ofpower distribution system, air compressor system and air conditioning system, and improve the efficiency of energy management.At present, the construction of IOE intelligent energy management platform has been promoted to the factories in Jinxi, Wuzhong,Rishan and Changshu, and all newly built factories are automatically connected to the platform for management. We plan togradually extend the IOE intelligent energy management platform to all factories, and achieve energy conservation rate of 20% by2025.
3D visualization
system
Equipment controlbin systemEnergymanagementsystemAlarm and workorder systemWarehousemanagement
system
Equipmentrecording
system
Access control
securitysystem
Group control
energysaving
IOE Intelligent
EnergyManagement
Platform
IOE Intelligent Energy Management Platform
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Luxshare Precision 2022 Sustainability Report
The water resources used by Luxshare Precision are mainly from the municipal water supply system, mainly used for domesticwater, indirect cooling water used for cooling equipment in production and manufacturing of products, and other production waterthat enters the production line in a small amount. Some factories have built rainwater collection pool to reuse the collected rainwaterfor greening of the parks. In order to improve the water resources management of the Company and better cope with the pressureand risks of water resources, we have established a complete water resources management system, and invested a lot of resourcesto carry out water-saving actions and develop the technologies of sewage treatment. During the Reporting Period, our subsidiaryRiming Computer Accessories (Shanghai) Co., Ltd. was awarded “Shanghai Water Conservation Demonstration (Benchmark)Enterprise of 2021”.
Water Resources Utilization
Luxshare Precision attaches great importance to the impact of its operations on water resources. In order to comprehensivelyimprove the water resources management of the Company, Luxshare Precision has taken the subsidiaries Lanto ElectronicLimited and Luxshare Electronic Technology (Kunshan) Co., Ltd. as piloting bases, gradually implemented AWS in each factory,systematically identified and managed enterprise-level water risks, and set targets higher than the industrial regulations. TheCompany improves the water resources management system in accordance with the requirements of AWS, takes the initiative tocarry out publicity to and cooperation with suppliers/service providers, employees, government, and other stakeholders, and jointlyaddresses Luxshare Precision’s water risks and basin water challenges.During the Reporting Period, Lanto Electronic Limited and Luxshare Electronic Technology (Kunshan) Co., Ltd. completed thepreparation for AWS certification, were reviewed in early 2023, and won the Gold Level rating. The Company continues to promoteAWS certification work in each factory, and 4 factories intend to obtain AWS Gold Level certification in two years.
Water Risk Identification and ManagementEvery year, we use the “Aqueduct” water risk tool developed by WRI (World Resources Institute) to identify the water risks of allfactories based on the operation conditions of the factories. In line with the identification results, the Company develops controlplans catering for factories in different operating locations. The results of the annual water risk assessment are reviewed by theStrategic Committee of the Board of Directors.
Water Resources Management TargetsLuxshare Precision pays close attention to the national and local governments’ policies and requirements on water use, water reuse,sewage discharge and water quality, and sets strict annual water resources management targets according to the latest regulations,in the hope of improving water resources management to be beyond the compliance level. In addition, AWS factories are requiredto develop water management, water balance, water quality, WASH (water, sanitation, and hygiene), and IWRAs (Important Water-Related Areas) targets, and comprehensively manage enterprise-level water risks.For details of the piloting factories’ efforts in the field of sustainable water management in 2022 and their specific quantitativeperformances, please refer to the Announcement-2022 Lanto Electronic Sustainable Water Management Planand theAnnouncement-2022 Luxshare Electronic Technology Sustainable Water Management Plan.Water Resources Management System
In order to improve the water use efficiency of the Company, Luxshare Precision conducts periodic monitoring and verification on thewater consumption, reuse rate and water quality of factories, so as to follow up on the water utilization compliance of each factory,promptly identify and deal with water anomalies, and reduce water waste. Intelligent water management system has been installedin part of the factories, which can realize the functions of remote monitoring management, system operation management, andequipment management, identify and deal with water anomalies in real time and ensure stable operation of equipment. LuxsharePrecision has also carried out a series of water-saving measures such as installation of water-saving appliances and recycling ofproduction wastewater, and is dedicated to reducing water resource withdrawl and consumption and sewage discharge.
Intelligent watermanagement system
Water qualitylaboratorymanagementEquipmentmanagement
OperationassessmentmanagementSafeproductionmanagementEnergyconsumption
costmanagementRemotemonitoringmanagement
Systemoperationmanagement
Officemanagement
Water Resources Management
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? Identify and output the List of the Parties in Interest, conduct questionnaire survey, and output theAnalysis Table of the Parties in Interest? Collect water-related data such as water balance, water quality, potential pollution sources, and
IWRAs? Output the Supplier/Service Provider Water Utilization Analysis? Output the Site Water Risks and Opportunities and the List of Common Water Challenges in the Basin? Signing and publicizing the Sustainable Water Management Commitment? Develop water management strategies? Develop annual water management objectives and plans? Develop management systems such as the Operational Procedures for Sustainable Water
Management? Implement measures aimed at water balance, such as the development of water-saving
technologies at source and the reuse of production wastewater? Implement measures targeting water quality, such as regular testing of stormwater, domestic
sewage and drinking water quality? Implement measures aimed at IWRA objectives, such as weed removal? Implement WASH objectives such as providing WASH facilities such as potable water,
washrooms, hand sinks, etc., for outsiders? Conduct supplier/service provider water surveys? Evaluate the site benefits and basin common benefits of the water management plan? Assess the impact of water-related contingencies? Assess feedback of the parties in interest? Disclose the internal water management model for the site? Communicate water management plans with the parties in interest? Disclose the annual water management performance of the site? Release the Common Water Challenges and Our Corresponding Efforts? Promote the disclosure of water-related compliance information, as documented by the Institute
of Public and Environmental Affairs (IPE)
Water Resources Management WorkIn order to further improve the factory water resources management system, AWS piloting factories carry out water resourcesmanagement according to the five steps, “collection and analysis – commitment and planning – implementation – evaluation –communication and disclosure”, as required by the standards, forming an open, comprehensive and effective water resourcesmanagement system. With the vigorous promotion of AWS certification in each factory, the Company’s water resources managementsystem will be gradually improved to reach the standard management level.
Publicity to and Cooperation with Stakeholders
The participation of stakeholders is a material part of Luxshare Precision’s water management. Through questionnaire surveysand other forms, the Company actively keeps close tabs on the concerns of stakeholders on the Company’s utilization of waterresources, and takes the initiative to carry out publicity to and cooperation with suppliers/service providers, surrounding businesses,communities, the government, employees, etc. In 2022, Luxshare Precision worked with 3 suppliers to remove water-related violationrecords on IPE.
Water-saving promotion and employee awareness improvement? Put up water saving signs and posters throughout thefactories? Publish water-saving promotion articles on Wechatofficial account? Provide WASH training to employees
Implementation of government water requirements? Actively cooperate with the local government in waterusage declaration, water balance test, industrial waterreuse survey and other work? Attend water conservation employee training? Work with relevant departments to protect key water-related areas
Water Resources Management Work in Accordance with the AWS Standard
Collection andAnalysis
Commitment and
Planning
Implementation
Assessment
Communication and
Disclosure
Supplier/service provider analysis and survey? Conduct water utilization analysis and survey on suppliers/service providers, and require suppliers with annual waterconsumption of more than 10,000 tons to provide annual water quality inspection reports? Push suppliers to remove waterrelated violation records on IPE? Carry out AWS certification promotion activities to discuss sustainable water management cooperation issues, encourage
suppliers/service providers to participate in AWS certification, jointly improve the water management performance of theCompany
Water Conversation Training of StaffWater Conversation Publicity
On WeChat Official Account
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Luxshare Precision 2022 Sustainability Report
Kunshan factory conducts regular inspection on theBaijiadang water area. If weeds or dirt were found in thewater, the factory would report to the River Service Officeand cooperate in weed removal.Baijiadang is not a key protection area required by the state.In order to make contributions to the basin, Kunshan factorytakes the initiative to include Baijiadang into its materialwater area management scope.
Case | Kunshan Factory Cooperated with the River Service Office in Weed Removal in Baijiadang
Wastewater ManagementLuxshare Precision strictly follows the Water Pollution Prevention and Control Law of the People’s Republic of China, the Regulationson Urban Drainage and Sewage Treatment and other national laws and regulations, and has formulated the internal OperatingProcedure of Waste Water, Waste Gas and Noise Control to regulate sewage management. Based on the diversity of LuxsharePrecision’s production process, in accordance with the type and concentration of wastewater pollutants produced by each factory,we apply different sewage treatment processes to ensure that the quality of the wastewater discharged conforms to the nationaland local discharge standards such as the Integrated Wastewater Discharge Standard (GB8978-1996) and the Discharge Standardof Pollutants for Municipal Wastewater Treatment Plant (GB 18918-2002) to minimize the impact on the receiving water body. Atthe same time, we have engaged qualified external environmental monitoring agencies and require each factory to carry outenvironmental monitoring of wastewater discharge at least once a year.
In 2019, Likai factory set up ZHD (Zero Discharge of Industrial Wastewater Pollutants) Project, aiming at realizing the goalof “above 85% of water reused and 95% of acid recovered” for anode production line, to continuously develop advancedindustrial wastewater treatment technology.Water reuse:
Through the introduction of intelligent crane water control system, UV (ultraviolet) sterilization system, post-water pre-use system, pFET heavy metal-containing wastewater treatment system, APU acid recovery system and otherwater-saving systems, the reuse of anode productionline body water reached more than 52%. In 2022, we developed amodular on-line water recovery system, which is expected to be completed by 2023. The development and application ofthis system will be the key to achieving more than 75% of the target water reused in the first phase of the project.Acid reuse:
By using ion exchange technology, the recovery rate of sulfuric acid and phosphoric acid can be improved, andthe production cost can be greatly reduced. We expect to complete the acid reuse construction of the first anode productionline by 2023, realizing the recovery of more than 95% of sulfuric acid and phosphoric acid.After the completion of the project, it is expected to save 1,684,800 tons of water and 17,056 tons of acid, and save RMB186million of cost, annually. The ZHD project not only brings environmental benefits, but also contributes to improved productquality and yield. We will continue to promote the introduction of the ZHD project, and be dedicated to improving theCompany’s overall utilization rate of production wastewater and waste acid recovered.
Case | Likai Factory’s Zero Discharge of Industrial Wastewater Pollutants Project
We have followed the 4R principle to design industrial wastewater treatment technology,vigorously developed RO concentrated water recycling and other advanced industrialwastewater treatment technologies, and invested resources to install heavy metal-containing wastewater treatment equipment, phosphorus-containing wastewatertreatment system, comprehensive wastewater treatment system, on-line water reusesystem and other water treatment facilities, aiming to improve the water treatmenttechnologies of each production base, reduce the production of waste water anddischarge.
By the end of the Reporting Period,Luxshare Precision achievedzero wastewater discharge in
factories.
APU Phosphoric Acid Reuse SystemOn-line Water Recovery System
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Our waste mainly comes from the production waste and household waste generated in the production and operation activities ofthe factories, as well as the waste packaging materials generated by suppliers in the delivery and transportation stage. In order toreduce the impact of waste produced by the Company and its value chain, Luxshare Precision actively responds to the nationalcall and vigorously develops circular production. Through green product design, adopting recyclable and environmentally friendlymaterials, cooperating with suppliers to carry out material reuse, advocating waste transformation and other ways, LuxsharePrecision comprehensively improves the resource utilization efficiency of all links of production and operation and reducesunnecessary resource waste.
Dongguan Luxshare PrecisionIndustry ISCC PLUS Certificate
Material Recycling and ReuseLuxshare Precision always adheres to the 4R principle to minimize use of materials.In the process of product design, we adopt lightweight design, try our best to userecyclable materials, and phase out and update non-recyclable materials. In theprocess of material procurement, we cooperate with suppliers and encourage themto recycle products, packaging materials, coils and cable reels that do not complywith quality standards, are from transport losses or can be recycled. In the process ofproduction, we carry out process improvement and internal recycling of plastic greenplates, coils, cable reels, pallets and other materials, to reduce the input of materialsin the production process. During the Reporting Period, Dongguan Luxshare PrecisionIndustry Co., Ltd. procured ISCC PLUS (International Sustainability and CarbonCertification) certificate.
In the future, we will continue to explore the application of recyclable and environmentally friendly materials such as rPET (RecycledPolyethylene Terephthalate), promote green technology innovation planning, and adopt production technologies that can improveresource utilization rate, such as closely clean forming, MIM (Metal Injection Molding), 3D printing and other advanced formingtechnologies, to reduce material waste and promote the development of green products.
Vietnam Factory used tin furnace oxidation layer which could not be used directly, extracted and recovered, and cooperatedwith vendors to replace and transfer tin residue. While reducing resource waste and waste generation, the factory receivedthe corresponding amount of tin wire, tin strip and other production materials to reduce the procurement and use of newmaterials. In 2022, Vietnam Factory replaced tin residue with tin wire and tin strips, totaling 1.26 tons.
Case | Tin Residue Replacement Project in Vietnam Factory
In order to improve the efficiency and quality of the Company’s waste management, we develop an electronic waste managementinformation management system based on UL2799 standard and embed it into the Company’s EHS system to achieve integratedmanagement. The electronic waste management information management system covers the category, weight, transformationmode, information of disposal provider, statement of disposal provider, waste disposal process and waste disposal documents ofthe factories, realizing the systematic collection and monitoring of waste related data.
Waste ManagementLuxshare Precision strictly follows the Law of the People’s Republic of China on the Prevention and Control of EnvironmentalPollution Caused by Solid Waste, and has accordingly formulated the Waste Control Operating Procedure to clarify the managementregulations of the whole process of waste from classification and storage to compliant disposal and record.
Solid waste generated inthe production processshall be identified andclassified in accordancewith the National HazardousWaste Directory and theSolid Waste IdentificationStandard (GB- 34330) andother national standards
Classification
Storage facilities shall bebuilt in accordance with thePollution Control Standard forStorage and Disposal Sites ofGeneral Industrial Solid Wastes(GB-18599) and the PollutionControl Standard for HazardousWaste Storage (GB 18597) toprevent waste from causingsecondary pollution to thesurrounding environment, soiland groundwater
Storage
In strict accordance withthe requirements of theEnvironmental ProtectionBureau, solid waste shall bedisposed by a qualified thirdparty
Compliant
disposal
All factories are required toset up solid waste recordingaccount and record detailedinformation such as wastecategory, production volume,transportation mode andtreatment mode
Record
Circular Production
39,101 Ton14,448 Ton
100,820 Ton
Hazardous wasteDomestic waste
Non-hazardous waste
Waste disposal volume by pathway in 2022Waste generation in 2022
154,368 Ton
Total
Overall reduced amountTotal amount of reusedTotal amount of recycledTotal amount of subject to incineration
(with energy recovery)Total amount of subject toanaerobic digestionTotal amount of subject to composting
33,345 Ton13,061 Ton1,219 Ton2,737 Ton
48,143 Ton55,864 TonWasteConversionand Disposal
Due to the integration of waste generation data by category, the sum of breakdown data is not equal to the total data here. Please refer to Appendix – KeyPerformance Data for details.
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Zero Waste to LandfillWe continue to promote the advanced waste management concept of zero waste to landfill, supervise the waste management ofall factories, explore the optimal waste disposal methods, and carry out special improvement work, in order to replace direct wasteincineration and landfill, and comprehensively improve the waste conversion rate and resource utilization rate. We classify andreuse recyclable wastes such as plastics, metals and cartons. Hazardous wastes and other non-recyclable wastes are incineratedby qualified service providers to advocate heat recovery. As of the end of the Reporting Period, average waste conversion rate ofsubsidiaries reached 83.15%. 3 factories intend to carry out UL 2799 Zero Waste to Landfill validation in 2023 for the first time.
Likai factory adopts advanced high-speed centrifugal separation technology to realize efficient liquid, liquid and solid three-phase separation of polluted metal processing liquid. The main pollutants in the metal processing liquid (impurity oil andsolid impurities) are removed. With multi-stage filtration and sterilization device, the factory purifies and reuses corrupted,blackened, smelly metal processing liquid, with a recovery rate of as high as 97%. This technology not only reduces thehazardous waste disposal cost of waste metal processing liquid and the cost of purchasing new liquid, but also realizes theautomatic reuse of metal processing liquid.
In 2022, Huaxun Industry (Suzhou) Limited carried out apackaging material improvement project. It recycled thepackaging boards used by suppliers, and used them on theCompany’s product shipping packaging to reduce wastegeneration. A total of 251 boards were recovered during theyear, saving RMB12,550.
Case | Reuse of Metal Processing Liquid in Likai Factory
Case | Huaxun Industry (Suzhou) Limited’s Packaging Material Improvement Project
UL 2799 Zero Waste to Landfill Validation
Platinum Grade Certificate
Waste Disposal Method
Production
factory
Reuse
Not EncouragedReductionLand?ll
Incineration
withoutenergy recoveryWaste-to-energy
(WTE)
Anaerobicdigestion
Composting
Recycling
WastesNot ConvertedConversionPathwaysoutside the FactoryConversionpathwayswithin the factory
Biofuel
As of the end of the Reporting Period,
LuxsharePrecision companies received Platinum ratings forUL 2799 Zero Waste to Landfill validation, of which
companies received the UL 2799 validation for the firsttime.As of the end of the Reporting Period,
companieshave received Platinum ratings and
company hasreceived Gold rating for the UL 2799 Zero Waste toLandfill validation successively.
Recycled Used BoardsShipment Package of
Finished Goods
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Luxshare Precision 2022 Sustainability Report
Whole Process Management of Hazardous Chemical Substances in ProductsDevelopmentProcurementManufacturingShipment
During productdesign, the conformityassessment of hazardoussubstances shall becarried out to excludehazardous substancesthat do not meet theregulations.
Only procure componentswith compositioninformation, hazardoussubstance test report andour certification.
Regular inspection ofproducts and auxiliarymaterials is conducted inthe production processto avoid contamination ofhazardous substancesin the manufacturingprocess.
Conduct finished producttesting for hazardoussubstances, prohibitproducts that do not meetcustomer and regulatoryrequirements from beingshipped to customers.
Abatement of Hazardous Substances
We implement the applicable standards of chemical safety at home and abroad and the customer’s relevant requirements for thespecifications of restricted substances with high standards. Therefore, we formulated the Management Standards of RestrictedSubstances of Materials and Finished Products, and the General Principles for Ecological Design of Products to standardize thewhole process control of product development, procurement, production process and shipment traceability. Materials, components,finished products and chemicals involved in the production process of all products are classified and controlled, forming ahazardous substance management system throughout the whole life cycle of products. By the end of the Reporting Period, a total of17 companies have obtained QC 080000 hazardous substances process management system certification.
Specification for the Management of Restricted Substances
We continue to track the dynamics of domestic and overseas laws and regulations, benchmark against the latest standards andrequirements, and identify the improvement areas of restricted substances management. During the Reporting Period, globalinterest in PFAS (perfluorinated and polyfluoroalkyl substances) increased, French regulation Arrêté du 13 avril 2022 released andEU REACH SVHC (Substances of Very High Concern) regulations updated. By referring to the above trend of hazardous substancescontrol and customers’ updated standards, we have updated the Management Standard for Restricted Substances of Materials andFinished Products to Version 34, which stipulates a total of 71 prohibited substances, 256 restricted substances and 76 declaredsubstances. Especially, we have also stipulated restrictions on materials that directly or indirectly come into contact with the skin forprolonged periods of time.CategoryNew substances (substance groups)Prohibited substances
Mineral oil (MOSH&MOAH), oxidation-degradable plastics, pesticides restricted by law in packagingor transportation materials, antelin (endrin), PFBS and related substances, PFHxA and its salts andrelated substances, N,N-dimethylformamideRestricted substances
Orthoboric acid, sodium salt, benzyl trichloride, benzyl chloride, p-chlorobenzotrichlorotoluene,disperse blue 1, alkaline red 9, crystal violet, 2-amino-5-chlorotoluene hydrochloride, ammonium2-naphthaleneacetate, 2, 4-diaminoanisole sulfate, aniline, 2, 4, 5-trimethyl hydrochloride, quinolineDeclared substancesDimethyl sulfoxide, kalanaldehyde, nanomaterial, isocyanate, cobalt and its compoundsHazardous Material Management of SuppliersIn 2022, the Company established and gradually improved Green Product Information Management System, systematically collectedand managed product environmental protection information along the supply chain, and connected the whole process managementlink of hazardous substances to effectively control the risks of hazardous substances, and fully empower the environmentalcompliance capability of products. We opened an external port of the system for suppliers to publish and promptly update laws,regulations and industry trends related to hazardous substances, in order to facilitate suppliers to understand the Company’spolicies in a timely manner. Meanwhile, we have set up full-composition declaration standards in the system, requiring suppliersto declare the full-substance composition of materials and provide relevant environmental protection data to ensure materialcompliance at source. The system also has a built-in standard material database and a basic chemical substance database, whichrealize forward-looking substance identification and risk material analysis based on material full-composition data resources andassist environmental compliance personnel in quickly identifying possible risk points in materials and suppliers involved. The risks ofhazardous substances are reduced and the health and safety impact of products is avoided through investigation or early warningby the system.For information on hazardous material management at Luxshare Precision’s suppliers, please refer to the chapter of Environmentaland Social Responsibility of Supply Chain.
List of Prohibited, Restricted and Declared Chemical Substances
We take HSF (Hazardous Substance Free product program) as our long-term goal, haveprepared the hazardous substance reduction plan, and actively look for alternatives toreduce and eliminate the use of hazardous substances.We set up detection equipment for hazardous substances and test management systemin the laboratories of each production base. We adopt international testing standardsto test hazardous substances such as ROHS2.0 (Directive on Restriction of the Use ofCertain Hazardous Substances in Electrical and Electronic Equipment), and providetesting reports for customers requiring hazardous substances testing. In addition, problemimprovement tracking and settlement are carried out based on abnormal test results to avoidenvironmental protection risks of materials to the greatest extent.
Hazardous Substance Management
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Luxshare Precision 2022 Sustainability Report
Five phases of Luxshare Precision’s green chemicals project
Collect laws and regulationsrelated to chemicals andidentify compliance risks
Carry out the investigations ofchemicals in each factory, andclarify the current situation ofchemical use and management
Work with suppliers to findand test cleaner and greeneralternatives to chemicals
Update and improve the chemicalmanagement mechanism andprocedure documents
Guide the compliance selection of chemicalsin each factory and assist in improving thecompliance management of chemical discharge
In addition, we are dedicated to industry co-construction, working with all parties in the society to promote the research anddevelopment and exchange of new technologies in the field of clean technology through participation in industry conferences andindustry-university-research cooperation. We have carried out long-term cooperation with Shanghai Jiao Tong University, NanjingUniversity of Aeronautics and Astronautics, Fuzhou University, Shaanxi University of Science & Technology and other universities toestablish an innovation chain combining R&D and engineering demonstration, and extensively participated in industry technologyexchanges and industry standard formulation, to promote the common development of the expertise and industry.In August 2022, we attended the technical seminar on technical specifications and certification implementation rules for portableenergy storage power sources. We conducted in-depth and detailed analysis of industry standards and specifications of outdoorpower supplies with industry partners, exchanged on and shared application technologies and solutions of outdoor power supplies,and jointly contributed to the innovative development of the outdoor power supply industry.
Luxshare Precision complies with the Regulation of the People’s Republic of China on the Administration of Chemicals Subject toSupervision and Control, Regulations on the Safety Management of Hazardous Chemicals, Interim Provisions on the Supervisionand Management of Major Hazard Sources of Dangerous Chemicals, Catalogue of Hazardous Chemicals and other Chinese andoverseas laws and regulations on chemical safety, and has formulated the Chemical Control Operating Procedure and Measuresfor the Management of Chemical Operations, clarifying the management standards of the whole process of chemical procurement,transportation, warehousing, storage, use, emergency treatment, and waste treatment.We have developed a strict management process of hazardous chemicals, approval the chemical procurement demands and theintroduction of new chemicals proposed by the factories through the EHS information system, and control the procurement andstorage of restricted substances, highly toxic chemicals and chemicals with serious occupational health and safety hazards in strictaccordance with laws and regulations in the locations of operation.
In order to improve the Company’s chemical management, Luxshare Precision has set up a project team under the supervision andguidance of the Board of Directors. The Company works with its subsidiaries to promote green chemical projects, strengthen at-source control, conduct whole-process closed-loop management and supervision of chemicals, and ensure compliance with lawsand regulations. Also, the Company cooperates with suppliers to actively look for chemicals that are more friendly to safety, healthand environment. During the Reporting Period, we have completed the five phases of the chemical project. Improvement was madefor anomalies identified through assessment of the subsidiary’s chemicals. In addition, we have encouraged our subsidiaries towork with manufacturers and suppliers of detergent products to find water-based/semi-water-based detergents to replace alcoholcleaning fixture. Two subsidiaries have introduced chemical alternatives, reducing VOCs emission by 1.16 tons this year.
During the Reporting Period, we invested nearlyRMB
million in clean technology researchand development, and plan to invest more thanRMB
million in 2023.During the Reporting Period, we submitted
clean technology patent applications and obtained
granted patents.
As a leading company in the electronics manufacturing industry,Luxshare Precision actively empowers clean transformation withits efforts in promoting the research and development, productionand application of clean technologies and products. While activelyexpanding our presence in solar energy, batteries, new energy vehicles,data center power and other fields, we keep investing in the researchand development and commercialization of clean technologies in thedirection of photovoltaic modules, energy storage power supplies, heatdissipation system, etc., to continuously promote the energy efficiencyof products. As we constantly push forward the application of cleanenergy, we intend to provide customers with more energy-efficientproducts and solutions, and are dedicated to building a sustainableand smart connected future. We will continue to expand and intensifyresearch and development in clean technologies to contribute to thegreen and low-carbon development of society.
Clean Technology OpportunitiesChemical Management
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Super liquid cooling charging module
It adopts three-phase midline ACinput, featuring the advantages ofultra-high power intensity and ultra-low static power consumption toensure efficient energy utilization
Super direct current charging gunIt can safely transmit up to 500A ofcharging current, and can chargeelectric vehicles in a matter of minutesfor a travel range of 200 kilometers
High voltage distribution unit PDU
Equipped with intelligent detection andprotection functions, always monitorvoltage, power supply and temperatureconditions to ensure long-term stableand reliable operation of the systemHigh power liquid cooling direct current charging gunUsing a new cooling material, combined with thecable structure separated from the conductor andthe liquid cooling pipeline, the over-circulationcooling medium reduces the charging temperatureand greatly improves the charging power of newenergy vehicles
Luxshare Precision focuses on improvement of thetechnologies and solutions of new energy vehicleenergy utilization, develops power transmission-optimized systems and products, and enhance thecharging efficiency and performance and safety ofelectric vehicles. Meanwhile, the Company polishesup energy utilization efficiency, gives a impetus toindustrial energy transformation, and pushes forwardgreen development.Based on control algorithms, voltage tracking andother intelligent optimized technologies and solutions,Luxshare Precision develops energy utilization-optimized technologies and products, achievesintelligent optimization and intelligent control of energyutilization system in multiple scenarios including datacenter and consumers, and ensures high energyutilization efficiency, thus to reduce energy consumptionand greenhouse gas emission.Luxshare Precision adopts advanced power conversionmodules, polishes up power conversion efficiency, andreduces power loss.
A full range of CDU
from Mini model to cabinet model
The product collects data through rock-mounted server, executes intelligent interactiveheat transfer management, and continuously transmits heat to outdoor cooling tower orcooling water machine, so as to achieve cooling through heat exchange, save machineenergy consumption, and ensure stable and reliable operation of equipment
130W gallium nitride desktop multiport adapter
The product has passed the EU ErP
and US Department of Energy Level VI energy efficiencycertification, using digital integrated soft switch resonant control technology and the thirdgeneration of high-frequency switch semiconductor charging, effectively reducing the lossof the charging process in terminal application scenarios, and reducing greenhouse gasemissions
Titanium CRP1300W server power supplyThe product conforms to the mainstream Intel X86 CPU architecture, is suitable for a wide input range of 90-264Vac, and achieves a peak efficiency of 96%in a wide range of 30%-60%, effectively meeting the requirements of the EU server power supply Titanium in 2023, effectively reducing power conversionloss, improving power conversion efficiency, and steadily reducing data center PUE
PV inverter 5000W continuous power supplyThe photovoltaic energy storage inverter converts the direct current generated by the module into alternating current, tracks the maximum output power ofthe photovoltaic array, and feeds its output energy into the grid with minimum conversion loss, which not only meets the power demand of customers for self-generated power for self use, but contributings to an energy-saving, environmental-friendly and low-carbon life by tapping in the surplus electricity suppliedto the power gridBased on its insights into the application and industrydevelopment trends of photovoltaic power generationsystem, Luxshare Precision focuses on industrialtechnological innovation, flexibly caters to thedifferentiated needs of different customers, and deliversstable, efficient, safe and reliable solutions, by means ofphotovoltaic solar power connected into the electricitygrid and products and services of bidirectional energystorage inverter.Luxshare Precision deeply explores opportunitiesof recycling of waste materials, and innovates novelaluminum and plastic recycling technologies. Also, theCompany takes the initiative to carry out technologicalimprovement in the Company’s products, and promotesand applies them to and in its suppliers, in a bid toreduce raw material consumption of the whole society.
Wireless charging base & charging series productsThis series of products is made of recycled plastic waste through polymerized modification, with a recycled plastic PCR
content as high as 98%, reducingcarbon emissions by an average of 0.013kg per product
PDU: Power Distribution Unit
CDU: Coolant Distribution Unit
ErP: Energy-Related Products
PUE: Power Usage Effectiveness
PCR: Post-Consumer Recycled Material
EnergyEfficiency
Alternative
Energy
PollutionPreventionand Control
Optimize systemsand technologies
Data centerpower source
Solar powerRecycling
New EnergyVehiclesClean Technologies and Products
Luxshare Precision has a strong conviction that talents are the backbone of an enterprise forsustainable development, and promoting talent development is our constant pursuit. We protectthe legal rights and interests of our employees and are committed to creating a harmoniousand equal workplace atmosphere. We set up diversified training courses, improve the talentdevelopment platform, and promote the overall development of our employees. We develop aperfect compensation and benefits system as well as performance appraisal policy, providecompetitive salaries, and share the fruits of corporate development with our employees. Wealso focus on employee occupational health and safety, and continuously improve employeesatisfaction and their work and life experience. At the same time, we remain steadfast in thesocial responsibility of the Company, actively participate in industry exchanges, and promotethe common development of the industry. Besides, we actively participate in communitydevelopment and construction, engage in various charitable activities, and contribute to theconstruction of a harmonious society.
Amountinvested in publicservice and charityactivities RMB
2.3
million
Year-roundtraining coverage
1,958,541person-times
Averageemployee training
hours
Safetyresponsibilityletter signing rate
100%
Achieve Growth andHappiness Together
? Occupational health and
safety? Protection of employee rights
and interests
? Employee diversity and equal
opportunities? Talent attraction and retention
? Employee training and
development? Community engagement
AchieveGrowth andHappinessTogetherAbout This Report
Chairman’sStatement
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
We are committed to following and implementing international labor conventions andinitiatives, including the Universal Declaration of Human Rights, the Core Conventionsof the International Labor Organization, the UN Guiding Principles on Business andHuman Rights, the Responsible Business Alliance Code of Conduct, the Global SullivanPrinciples, and the Social Accountability 8000 (SA 8000). We comply with the LaborLaw of the People’s Republic of China, the Labor Contract Law of the People’s Republicof China, and other applicable laws and regulations in our overseas and domesticoperations. The management of labor rights issues is also deeply rooted in LuxsharePrecision ESG management system. We respect and insist on protecting the legitimaterights and interests of our employees and eliminating any violation of human rights.In order to further improve human rights management, the Company has formulatedthe Social Responsibility Management Manual, the Employee Handbook, RecruitmentManagement Measures, Operating Procedures of Unforced Work, the OperatingProcedure of Child Labor and Minor labor Management, Overtime ManagementMeasures, the Management Procedure of Freedom of Association and CollectiveBargaining, the Operating Procedure of Discrimination and Harassment Prevention, theManagement Procedure of Female Employees’ Rights and Labor Protection, OperationalMeasures for the Management of Religious Beliefs, the Diversity and IntegrationManagement Procedure and other labor rights protection systems. These systems areused to regulate work practices, prevent illegal acts such as forced labor and childlabor, oppose discrimination and harassment, ensure employees’ reasonable workinghours and overtime pay, and respect employees’ rights to freedom of association andcollective bargaining, thus providing an inclusive and diverse work environment foremployees. We have disclosed the Luxshare Precision Statement on the Protection ofLabor Human Rights on our official website. We focus on the protection of labor humanrights throughout the value chain and conduct CSR (Corporate Social Responsibility)risk assessments and audits on suppliers to effectively prevent and control human rightsrisks in the supply chain, such as forced labor, child labor, and violations of freedom ofassociation and collective bargaining right.In order to ensure the implementation of our labor management system, we haveestablished a triple audit mechanism consisting of internal special audits, customeraudits, and external third-party audits (such as the RBA Responsible Business Alliance) to
achieve full coverage of labor-related issues in our factories.Luxshare Precision complies with the relevant provisions of national laws and regulationson the minimum notice period for operational changes, and fully protects the legitimaterights and interests of all stakeholders. During the Reporting Period, Luxshare Precisiondid not involve any matters that need to be notified to stakeholders.
Key Initiatives in Human Rights Protection
In the recruitment stage and during daily inspection, manually check ID card, relevant certificate issued by the localpublic security authority and other documents to check and verify employee age; the personnel system is designed witha control module which will automatically give a warning when the ID number of a minor candidate is entered and hasnot reached the legal age.
Ensure that workers exercise their organization right in an environment free from violence, pressure, fear, intimidation
and threats, and provide such facilities as may be appropriate for the formation of trade unions or other forms ofemployee organization so that they can carry out their duties promptly and effectively.Freedom ofAssociation
Child LaborPrevention
It’s specified that human trafficking or the use of any form of slave (including modern slave labor), coerced labor,bonded labor, indentured labor or prison labor is prohibited.ForcedLabor
Follow the requirements for overtime fee/allowance in the Employee Handbook; employees who work extra hours
beyond normal working hours are considered working overtime, and are paid overtime fee as required by law.OvertimeCompensation
ResponsibleRestructing
Stipulate that all overtime work shall be voluntary and employees shall not be forced to participate in any production or
manufacturing related meetings or activities related during non-working hours.If the employee needs to work overtime temporarily, he/she shall go through the overtime application procedure as
stipulated in the Employee Handbook and submit it to the relevant supervisor for approval before execution.
The Company is fair and just to all employees, and never commit any act of discrimination in employment, job
assignment, wage, benefits, training opportunities, promotion, punishment, dismissal or retirement on the basis of race,
age, gender, sexual orientation, ethnicity, geographic region, disability, religion, political affiliation, union membership,
military status, nationality, marital status, pregnancy status, medical conditions, social stratum, physical characteristics
(height, weight, eyesight, place of birth).Strictly comply with the laws and regulations of the countries and regions where we operate regarding severance pay
for employees. We provide employees with severance pay and support the employees eligible to apply for subsidies
from local government in the countries and regions where it operates, fulfill the obligations to the Company, and assist
the employees to obtain reemployment training after responsible communication.
Anti-discrimination
WorkingHours
As of the end of the ReportingPeriod, we found
neither
incident involving violation offreedom of association andcollective bargaining rights,forced labor, illegal slavery, childlabor and underage workers,
norincident of discriminationwithin all operations and suppliers
Human Rights and Labor Management
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Male employees
Employees at or below 29Number of employees from Chinese Mainland
114.915
1,773
102,164
134,768
Female employees
Employees between 30 and 49Number of employees from Hong Kong, Macao and Taiwan regionsEmployees at or above 50Number of overseas employees (excluding employees fromHong Kong, Macao and Taiwan regions)
120,244
Number of employees by genderNumber of employees by ageNumber of employees by region
As of the end of the ReportingPeriod
Equal and Diverse Workforce
57%48%
1%
43%
51%
187,784
79%
1,350
1%
47,798
20%
236,932
Total numberof employeesPerson
AchieveGrowth andHappiness
TogetherAbout This Report
Chairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
CompensationLuxshare Precision is committed to providing a competitive remuneration system for all employees, so as to “attract, retain, motivatetalents and boost their success”. We adhere to the principle of “equal pay for equal work”, and continue to adjust the salary level tomaintain it at the upper and middle level of the industry to ensure that employees’ remuneration is in line with the market level andnot lower than the statutory minimum wage standard of the place where we operate, demonstrating the Company’s people-orienteddevelopment philosophy.
Luxshare Precision keeps refining its talent management system, constantly enriches our talent reserve, builds a clear careerdevelopment path for employees, and improves the promotion process. The Company also has established a fair, just and opensalary system, formulated scientific performance appraisal policies, and provided all employees with abundant benefits, so thatemployees can enjoy the fruits of development with the Company. We stimulate the potential and passion of the employees, andimprove the Company’s competitiveness in an all-round way.Talent Recruitment
We continue to carry out campus recruitment, cultivate high-qualitytalents, and build a talent pool. During the Reporting Period, we carriedout campus associate trainee recruitment program among recentgraduates graduating in 2022 and 2023 at home and abroad. Majorlinks include demand collection, program planning, project launch,campus employer brand promotion, college appointment, college visit,on-site publicity, interview and signing, etc. In June 2022, LuxsharePrecision won the award of Chinese College Students’ FavoriteEmployer of 2022 on 51job with its image as a good employer. In thefuture, the Company will further deepen the campus associate traineerecruitment operation to provide itself with suitable and high-qualityknowledge and technology-oriented talents stably and constantly.
Performance Assessment
The Company has established a comprehensive performance appraisal system covering 100% of our employees at home andabroad, and set up a regular appraisal system, comprehensive appraisal indicators and clear appraisal procedures to obtaininformation on the objective performance and development of employees in the workplace as the basis for annual performanceevaluation. Performance assessments include operational business objectives and key work matters, depending on the departmentand job duties. During the appraisal process, employees need to communicate with their supervisors in multiple rounds, clarify theappraisal objectives, obtain feedback results, and develop appropriate improvement plans. To ensure the objectivity and fairness ofthe assessment results, we implement a two-level approval system, namely, setting up a supervisor for re-evaluations. Through theapplication of scientific and reasonable performance appraisal system, Luxshare Precision constantly strengthens human resourcemanagement, improves the performance feedback process, and stimulate employee’s passion and long-term retention rate.
Talent Attraction and Retention
Campus Recruitment Talk
Performance Assessment Content
AssessmentProcedure
Operation ObjectivesBreak down the annualorganizational operationobjectives of each unit intothe business objectives ofemployees in combinationwith the key responsibilities ofeach department and position.
Key Work Matters
Specific work tasks, plansand measures that must beimplemented to achieve thepost objectives according tothe breakdown of operationobjectives of each unit.
According to the responsibility requirementsof the position, the employee communicatesand discusses with the direct supervisor toclarify the assessment objectives during theassessment period.
The supervisor conducts an assessmentfeedback interview with the assessedpersonnel, confirms the assessment results,and makes a follow-up performanceimprovement plan.
The two-level approval system is implementedfor individual performance, and the relevantresult is filed and comes into effect aftersupervisor approval.
The HR Center files the assessment results.
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Luxshare Precision established a three-star promotion channel as part of our effort to improve the promotion and assessmentmechanisms for DL (direct labor). The Company provides supporting benefits and priority for promotion for employees withdifferent star ratings to motivate the passion and creativity of DL employees and develop their employment potential.
Star RatingCriteria
Qualified workers whohave worked continuouslyfor over 1 month andengaged in key workstations and positions,passed the work stationassessment, and obtainedthe induction certificate.
Multi-skilled workers who havebeen working continuously forover 3 months, engaged in keystations and positions, masteredthe skills of 80% of the stationsof the line and passed the know-how course examinations onposts such as 8s, quality, andsafety.
All-round workers who have beenworking continuously for over 5months, engaged in key stationsand positions, mastered the skillsof all the stations of the line, andpassed the know-how courseexaminations on posts such as8s, quality, and safety.
Establish Promotion Channels
The Company has developed a clear dual-channel career development path for employees in leadership and technical expertise.Besides, it continues to improve the promotion process and policies to maximize the potential of employees, so that the Companycan achieve fair, just and reasonable employment, while improving the passion and sense of identity of employees. We have set uptransparent promotion process as well as four major promotion principles, in an effort to create a scientific and reasonable promotionsystem.
Case | Luxshare Precision Established the Three-star Staff Promotion Assessment Mechanism
M5P5
P4P3P2P1
M4M3M2M1
Decision-makingLevel
Senior Expert LevelExpert LevelSenior ProfessionalLevelIntermediateProfessional LevelJunior ProfessionalLevel
OperationsManagement LevelSenior ManagementLevelIntermediateManagement LevelJunior ManagementLevel
ManagementPathway
ProfessionalPathway
Comprehensively considerate individual quality, capabilities andachievements at work of employees.Principle of EqualEmphasis on Attitudeand Performance
Number of EmployeesPromoted by theManagement Pathway
3,040
PersonNumber of EmployeesPromoted by theTechnical ExpertisePathway10,444
Person
Employees can be promoted vertically in a single pathway ordevelop horizontally across pathways.
Principle of CombiningVertical Promotion withHorizontal Development
Employees are promoted level by level according to their promotionpathways, but for those with exceptional performance or specialcontributions to the Company can be promoted across the levels.Principle of CombiningLevel-by-levelPromotion with Cross-Level Promotion
According to the assessment results, the employees can bepromoted for good performance or demoted for poor performance.
Principle of Promotionand Demotion
Promotion Principle
AchieveGrowth andHappinessTogetherAbout This Report
Chairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
Environmentally
Friendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
the Company spent a total ofover RMB
millionon employee training programs,with a total of approximately
10.72
million hoursthe per capita training time isabout
45.23
hours.
The Company speaks with conviction that talents are the key to the development of the Company. We coordinate multiple resourcesand have set up rich training courses to promote the career development of our employees, so that they can realize their own valueand make progress together with the Company.Focus on Employee DevelopmentEmployee Training SystemWe have built and implemented a comprehensive talent development system for all employees of the Company, and developed atraining course system matching with it. The course system contains various dimensions such as corporate culture, EHS, humanrights and diversity training, information security, business ethics, etc., covering each stage of employee growth. In order to enrichthe courses, while organizing offline training, we also have created an online learning platform “i School”, so that employees canfreely choose the learning time and get a variety of learning resources.
Specialized TrainingTotal Hours of TrainingNumber of Trainees
Protection of HumanRights and Diversity
458,35579,025Anti-corruption Training959,488313,498EHS Training2,505,922349,882
Quality Control128,54219,762Information Security489,38058,771Intellectual Property Rights132,96416,445
In 2022
For newemployees
Help employees
familiarize with
the new role
Corporate culture, organizational structure & department overview and responsibilitydivision, product knowledge, and know-how of the role (including EHS contents).
Learn the newrequirementsof the role
Direct labor: Company profile, rules and regulations, quality requirements,environmental/EHS/social responsibility basics, human rights and diversity, businessethics, information security.Indirect labor: Company-level training includes common knowledge courses suchas company profile, HR administrative rules and regulations, safe production,corporate culture integration, Passport to Success (PTS); BU-level training includesBU services, BU organizational structure, BU product processes, and BU commonsystems; position-specific training includes learning map of the roles.
Help employeesmaster newrequirements
Know-how of the new role, and required training courses for the new role asspecified in the annual training plan.
Training ProgramTraineesTraining Contents
Know-how of the role, product knowledge, quality knowledge, EHS, corporate codeof conduct, business ethics, social responsibility knowledge, information securityand specialized training courses.
In order to boost the growth of marketing businesspersonnel, establish a standard position-specific trainingmode, and build a rapid sharing system of position-specific excellent experience, Luxshare Precision hasdesigned a marketing training program. On June 10, 2022,Dongguan Luxshare held a kick-off meeting for the 2022Luxshare Precision Marketing Training Class program,proposing that the program design starts from themarketing ability and quality model, and conducts trainingfrom three perspectives, business quality, professionalknowledge, and workflow, to help participants improvetheir work ability in all aspects.
Case | Dongguan Luxshare Precision Organized the Marketing Training ClassOrientationTraining
On-the-job
TrainingPre-job TrainingJob-transfer
Training
Boost Talent Development
AchieveGrowth andHappinessTogetherAbout This Report
Chairman’sStatement
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
In October 2022, Suzhou Meite Factory invited externallecturers to conduct training for trainers. During the class,the instructor introduced the “Star Engine” program in detail,including the positioning of Luxshare’s internal lecturers,the lecturer competency model, and the lecturer echelonconstruction process. This training mainly included “LecturerRole Cognition and Style Shaping”, “Course Design andProduction” and “Classroom Presentation and ControlTechniques”. We aimed at consolidating the foundationof course development through theoretical teaching andpractice, and focused on the comprehensive ability oflecturing skills and course presentation.
Case | Suzhou Meite Factory Organized the “Star Engine” Training Program
Internal Lecturer Training
In order to provide professional knowledge and teaching, enrich course content, andcreate a positive atmosphere for internal sharing, communication and learning, we havelaunched the “Star Engine” program since 2020, setting up multiple links such as training,certification, practical work and awarding, etc., to build a professional lecturers team.The lecturers of some of our operating locations have started to teach in internal transfertraining.
Continuing EducationWe take the initiative to conduct educational upgrade program for our talents wherewe operate, and encourage and support serving employees to participate in programssuch as academic upgrading and external certification, ensuring all employees areeligible for application. We collaborate with external institutes and universities including,Beijing Institute of Technology, Beijing Language and Culture University, Jilin University,Guangzhou Pearl-River Vocational College of Technology to provide educational upgradesupport (such as high school to junior college upgrade, junior college to undergraduateupgrading), including tuition reimbursement, subsidies and other forms for eligibleemployees. This helps employees to improve themselves and also enhances the corecompetitiveness of the Company, achieving both corporate and personal development.
Preparation
Kickoffmeeting
Onlinecourses
Face-to-face
courses
Practice
Courseaudition
Practice
aftertraining
Awardingceremony
In 2022, Luxis Technology (Kunshan) Co., Ltd. activelyresponded to the government’s policy, conductedgovernment-enterprise cooperation, to help the innovationand development of highly skilled personnel. Besides, ithad established internal incentive mechanisms, smoothedthe career development channels of skilled personnel,and carried out a series of training for vocational skilllevel recognition. We had trained 30 people cumulativelyincluding computer programmer, industrial robot systemoperator, and electronic fitter for broadcasting andcommunication equipment, 27 of them certified withvocational skill levels.
As of the end of the ReportingPeriod, we have trained over
lecturers in our overseasand domestic operating locations
During the ReportingPeriod, a total of over
people participatedin the academic upgradingprogram.
Procedure of “Star Engine” Lecturer Training
Case | Luxis Technology Supported Employees to Improve Their Vocational Skills
AchieveGrowth andHappinessTogetherAbout This Report
Chairman’sStatement
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
In July 2022, in order to support the continuousdevelopment of the business and build up themanagement talent echelon, Meite Technology(Suzhou) Co., Ltd. organized a two-day M3reserve training program. The program wastaught by human resources experts from thetraining center, covering middle management,coaching and cultivation of employees andother aspects, promoting the construction ofcorporate talent echelon.
Case | Suzhou Meite Factory Organized the M3 Reserve Training Program
Based on the perfect training system and management mode, we actively promote thedevelopment of overseas managers. In overseas operation sites such as the Vietnam factories,we continue to promote the localization through employment of local managers, expandthe appointment of local managers and professionals, strengthen the integration, training,motivation and development of overseas cadres, and promote the stability of talents supply inoverseas operating locations.Luxshare Precision Leadership Model
Develop Workplace LeadershipWe have developed a Luxshare Precision Leadership Model from five dimensions, thinking, decision-making, execution, influenceand expertise. The Company has set up appropriate growth pathways from basic to outstanding capacity improvement targetingeach dimension, laying a solid theoretical foundation and orientation guidance for developing cadre leadership.We hope to grow with our employees. In order to fully implement the development strategy of “Talent Helps Strengthen Enterprise”of Luxshare Precision, we have launched the leadership training program “Star Making Series” to enhance the management abilityof managers, broaden professional thinking, promote talent development, and help employees’ career development continue toadvance and grow.
Leadership Development SystemTraining ProgramTraineesContents
M4 Reserve PracticeProgramM3 Reserve PracticeProgramP3P4 High-potentialTalent Practice Program
ManagementAdvancement Program
Line Leader Practice
Program
Star Program
Executive reserve
cadresSenior management
reserve cadresSpecialists for high-potential talent poolSenior management
current cadres
junior cadres
Reserve cadres
Aim to unify cultural values and cadre management concepts, andimprove cadre leadershipAim to unify cultural values and cadre management concepts, andimprove cadre management skillsAim to broaden the thinking innovation and professional communication ofprofessional talentsAim to unify cultural values and cadre management concepts, and improvecadre leadership and management skillsAim to uniformly enhance the management skills of junior cadresAim to unify cultural values, and help reserve cadres to quickly integrate intothe Company and team, and realize the transition from student to employee
During the Reporting Period,the number of Vietnamesemanagers at Vietnamfactories increased by136%
compared to2021
In 2022, the total durationof the leadershiptraining program was
494,762
hours,with
75,454
person-times
Drive LuxshareBusiness to Success
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be
achi
eved
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Promote School-Enterprise Cooperation
The Company actively cooperates with external universities and institutes to carry out talent training programs. Since 2020,Luxshare Precision has continued to promote the “A+ Eyas Program” and explored the joint school-enterprise talent training modelwith the platform. Besides, it has cooperated with Ji’an Vocational and Technical College and other schools to train and providetalents to enterprises under the modern apprenticeship system. We have established a perfect talent training process, covering aseries of contents such as corporate culture promotion, factory visit and learning, job function understanding, professional skills andequipment use training, etc., to promote the overall development of talents. We also attach importance to in-school teacher training,and have now completed the transformation from dual-teacher teaching at school and enterprise to separate teaching by schoolinstructors.Meanwhile, the Company promotes various forms of school-enterprise cooperation with local colleges and universities to promotethe development of talents in schools while providing candidate talents for enterprise development, so as to realize resourcesharing, complementary advantages integration, and common development between schools and enterprises.
On December 23, 2022, the opening ceremony of theOrientation Class was successfully held between the factoriesin Vietnam Van Trung and Quang Chau and Vietnam HanoiUniversity of Industry. 38 outstanding college studentsparticipated in this “Orientation Class” training program.At the opening ceremony, the students of the “OrientationClass” listened to the sharing and guidance from the schoolteachers and company leaders, and they also participated ininteresting games and cultural exchange activities togetherin the sharing and interaction part. In order to increase theschool teachers and students’ understanding of LuxsharePrecision, after the opening ceremony, the Company speciallyinvited teachers and students to visit the Company to deepentheir understanding, laying a good foundation for long-termcooperation.
Case | Vietnam Factories Cooperates with Universities to Carry out Orientation Class Training Program
On July 29, 2022, staff of Hefei University of Technology wentto Xuancheng Luxshare Precision to carry out the specialaction of visiting enterprises and promoting employment. Thetwo parties communicated on the establishment of scientificresearch platform, integration of education and production,personnel training, internship training, cultural exchangeand enterprise staff training, etc., and signed the Agreementon Joint Construction of Hefei University of TechnologyStudent Employment and Internship Base. All of these furtherexpanded the school-enterprise cooperation and realized awin-win situation for both schools and enterprises.
Case | Xuancheng Luxshare Precision Signed an Agreement on Employment and Internship Base for College Students
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Luxshare Precision is committed to building a harmonious workplace and maintains a good relationship between the Company andemployees. We have set up multiple communication channels for employees to feed back their real demands and strive to solveemployees’ reasonable needs in a timely and effective manner. In the meantime, we organize various forms of employee activities toenrich employee welfare mechanisms in a bid to lift employees’ workplace experience.
Employee Communication and ExchangeLuxshare Precision strictly implements the requirements of laws and regulations,fully respects and ensures the legal rights of all employees, including rights of equalnegotiation and collective agreement. We have set up labor unions in domestic andoverseas operation locations, and employees have the right to choose whether to join theunion.
Engagement IndexSatisfaction Index
Overall StatusIdentify the Company’s key characteristics and capacity for sustainabilityAnalysis of Key IndicatorsAnalyze employee engagement and their satisfaction with the CompanyAnalysis of Key Drivers
Identify the topics that employees are most concerned about and that are mostsignificant for the enhancement of their engagementAnalysis of Major Issues
Analyze the outstanding problems affecting the employees’ willingness to improvetheir engagementAnalysis of Focus GroupIdentify critical issues in high-risk unitsBrief SummaryEvaluate the Company as a whole
Employee Satisfaction and Engagement
To better understand employees, the Company conducts an annual survey on employee satisfaction and engagement. In 2022,we conducted a survey on all employees at home and abroad and further refined the survey content. Two sets of questionnaireswere set respectively for direct labor and indirect labor to better match the characteristics of employees and allow the Companyto know the actual situation of employees in detail. The survey lasted 56 days and was conducted in the form of a combination ofoffline interviews and online surveys, with a total of 9 executives invited for interviews, 18 IDL (indirect labor) focus group interviewscovering 121 person-times, and more than 160,000 valid online answer sheets were collected. After the survey, a total of 191improvement goals and plans were formulated by Luxshare Precision’s subsidiaries and operating locations, covering variousaspects such as job recognition, staff training, stress management, staff activities, accommodation and transportation management,etc.Each operating location of the Company also carried out a survey on employee satisfaction according to the realities and madeaction plans for improvement and implementation according to the survey results to respond to and satisfy various reasonabledemands of employees, thus enhancing the sense of identity and belonging of employees and promoting the sound development ofthe Company.
Propermanagement
Employeeactivity
Employeerelationship
Jobsupport
Fairnessand justice
Introduction
training
MaterialrewardsWorkloadCanteenmanagementJobrecognitionWorkingenvironmentDormitorymanagement
Cognition
EmotionBehavior
Identity
SatisfactionAccomplishment
RecommendationEndeavorLoyalty
Analytical StructureBuilding a Harmonious Workplace
At the end of the ReportingPeriod, Luxshare Precisionhad established
tradeunions in its domestic andoverseas operation locations
AchieveGrowth andHappiness
TogetherAbout This Report
Chairman’sStatement
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Six Modules of Employee Interview
Employee CommunicationWe have set up various communication channels and platforms for employees, including global direct reporting channel and starcommunity communication platform at the company level, and actively expanded communication channels in each factory bysetting up employee care center, service hotline and online platform to collect employees’ voices and listen to their demands.
Global directreportingchannel
Star community
WeChat official accountof Luxshare Precision
Onlineplatform
Reports related to cadres’ working style,discipline violations, dereliction of duty andother behaviors on the direct platform willbe handled by the human resources center,and serious cases will be directly reportedto the chairman
Build a smooth online feedback platform foremployees
It is composed of “Star Factory Talk”, “StarDiscovery”, “Star Factory Life”, “Voice ofLuxshare”, “Luxshare Video” and othersections, providing a communication platformfor employees to express their opinions,complaints, reports, etc.
Communication Channels of the Factories
Care centerService hotline
Staff symposium
Offlinechannels
Onlineplatform
Provide system consultation, psychologicalcounseling, assistance in difficulties,record employee suggestions andfeedback, accept them in real time, andresolve them in a timely mannerVolunteers of labor unions can collect theemployee needs at the grassroots level,help employees to address the needs orgive feedback to Employee Care Center,so as to deal with employee needs in atimely and effective manner
Build a smooth online feedback platform foremployees
To provide more efficient information exchange andlistening interaction channels, show the spiritualoutlook and spread the culture of “Luxshare”
members, the Company has launched an onlinelistening platform “Star Community” based on theconcept of employer brand “Star Factory”, so as tobuild an employee eco-community characteristic ofLuxshare Precision.
Case | Luxshare Precision Builds the Communication Platform “Star Community”
Voice of Luxshare
Luxshare Video
Star Factory Life
Star Discovery
Star Factory Talk
Include Four Segments: Free Talk, Contribution,
Vietnam, LandscapeShare all kinds of breakthroughprogress or awards related to theCompany’s internal business activitiesand departments exchange businessresults, share business knowledge, and
launch special plans and projects
Display all kinds of activities ofLuxshare Precision employees,employees can share their life,emotions, interests and hobbies
A platform for employees tocontribute articles, show theirspare-time life and spiritual outlook
Cultural propaganda
video integration
window
We pay attention to employees’ workplace experience and expectations, and regard employee satisfaction as the “barometer” ofhappiness index and management of the Company. Therefore, the Company regularly organizes face-to-face interviews betweensenior executives and employees of each factory every year, calling for senior executives to go to the front line to understand thereal demands of employees and enhance enterprise cohesion. The annual employee interview in 2022 covers opinions on sixmodules: workshop environment, workshop management, working atmosphere, accommodation, salary and rebate and culturalactivities. BU and human resources administration department develop and implement future work improvement plans under theguidance of the interview results. Staff interview will also be carried out regularly in each operating location to continuously collectstaff opinions and improve daily management.
WorkshopEnvironment
WorkshopManagement
WorkingAtmosphere
Accommodation
Salary and
Rebate
CulturalActivities
Communication Channels of the Company
Luxshare serviceaccount
Sunlight envoyplatformTiktok officialaccount
Voice of theemployees
WeChat officialaccount
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Complainant ProtectionTo fully protect employees’ privacy, we have established a sound mechanism to protect complainants. In the process of complaintprocessing, we ensure that the privacy of whistleblowers is completely protected and their personal information is kept strictlyconfidential, which is only known by the platform administrator. The information related to the report content and investigationprocess is only accessible to the human resource center and the care center in the factory. The whole investigation process is keptconfidential by the special auditors.
Creation of a Happy Working Environment
The Company aspires to benefit the future through sharing. Care for people is an important part of our value co-creation andachievement sharing chain. We value our employees’ feelings, promote the honor system of Luxshare Precision, hold a number ofemployee activities to convey our care and continuously improve our employees’ workplace experience.Employee HonorIn 2021, the Company launched the Luxshare Precision Honor System which plans the awards from three aspects of seniority,individual honor and group honor. The “Thanks to You” Anniversary Award was launched to reward full-time employees who haveserved the Company for 10 years, 15 years, 20 years, 25 years or more.
Lixson Precision Dongguan Factory and Jinxi Factory conducted the “Walking Together, Growing Together” - 2022Anniversary Award Ceremony, where a number of anniversary representatives were presented with commemorative awards.Besides, outstanding employee awards, including the annual Best Craftsman Award, the annual Best Site ManagementAward, the Best Lecturer Award, and the Best Candidate Award, were presented to reward employees who haveaccompanied Luxshare Precision for many years and performed well, in gratitude for their hard work and dedication.
Case | Luxshare Precision Held the “Thanks To You” Anniversary Award
In 2022, Shenzhen Luxshare Electroacoustic carried out a series ofactions for employee care quarterly, interviewing employees in theform of executive interviews, employee interviews and employeesymposiums. The survey covered many aspects such as employeecareer planning, working status, job satisfaction, managementevaluation, career development needs, and sense of belonging tothe Company. We retroactively followed up on employee evaluationto comprehensively promote employees’ career development.
Case | Shenzhen Luxshare Electroacoustic Regularly Conducted Employee Interviews
More than
interviews andsymposiums were held with morethan
1,000
employees involvedin 2022
Staff Symposium of Shenzhen Luxshare Electroacoustic
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Employee Activities
To enrich employees’ life experience and further enhance the cohesion in the Company, we have actively organized a variety ofcultural and sports activities and encouraged our employees to participate in the activities, spicing up our employees’ spare-timelife.
In October 2022, Luxshare Precision East China Regionheld the Voice of Luxshare singing contest for allemployees. In the form of on-the-spot selection, the contestprovided a platform for the employees to showcase theirtalents. Contestants that had passed rounds of competitiondelivered dazzling performances in the final. On the night ofthe final, East China Region also arranged a family campingbase, a fun street vending event and a delicious feast for itsemployees to relax in their spare time.
Case | Luxshare Precision East China Region Held the Voice of Luxshare
In September 2022, to enrich employees’ spare-time life andimprove their physical fitness, Shanxi Luxshare Precision heldan annual tug of war for its operating department. Apart fromgenerous prizes, there was a lucky draw session to encouragethe employees to actively participate in the competition andstrive for good results. In the end, amid the high enthusiasm ofthe participants, the competition concluded with the secondassembly team winning the first place.
Case | Shanxi Luxshare Precision Held a Tug of War EventIn 2022, Luxshare Precision launched a series of activities of “Star Characters”, which implies that the employees, just like stars,light the whole sky with their good qualities, to commend and encourage those pragmatic, enterprising, pioneering and innovativeLuxshare employees who practice the core values of Luxshare Precision through their actions.In November 2022, Jiashan Factory launched the Avenueof Stars project in Luxshare Precision to select outstandingindividuals with outstanding performance, attitude,teamwork spirit, skills and learning and innovation ability inwork related to quality, cost, efficiency, consumption, safetyand management as quarterly stars and annual stars. Theawarded employees would receive trophies, extra pointsfor appraisal and corresponding material rewards. Theirexcellent deeds would also be displayed on the honor wallof the Factory and through online publicity channels.
Case | The Avenue of Stars Project Was Launched in Jiashan Factory
Employee Soccer Competition in
Vietnam Factory
Art Club Activities in Dongguan FactoryBasketball Competition inChuzhou Factory
“Health Attends Me” Five-KilometerTraining Camp Activity of Luxshare
Technology
Sports ActivitiesClub Activities
2023 Spring Festival Activity ofLuxshare Smart Manufacturing
Flower Arrangement Activity forWomen’s Day in Vietnam Factory
Festival Celebrations
Employee Honor Wall in Jiashan Factory
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Chairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
Environmentally
Friendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Employee Care
All along, we have regarded “integration” as one of our corporate core values and striven to build a diverse and inclusive workplaceenvironment, in order to provide all employees with a warm and comfortable platform for them to give full play to their value. To thisend, we not only provide high-quality services in aspects such as clothing, food, shelter and transportation, but also continuouslyseek employee opinions, striving to improve our employee service system. We also reach out to employees in dire straits and showsolicitude for vulnerable groups to ensure that our care reaches every Luxshare Precision employee.In November 2022, Luxshare Automation (Jiangsu) Ltd. held one-on-one interviews between senior executives and morethan 50 employees in the factory. In the seminar, the employees expressed their expectation that cultural life and canteenservices would be further enriched and improved and the factory proposed corresponding improvement measures basedon the employee opinions. Administrative departments planned to rearrange the entertainment venues and renovate thedormitory and entertainment areas. The canteen will also develop new dishes to satisfy the diversified needs of employees.
Case | Luxshare Automation (Jiangsu) Held Employee Interviews
In September 2022, Luxshare Precision Industry (Chuzhou) chose to lend a hand immediately after learning that anemployee was diagnosed with acute lymphocytic leukemia. It applied for a one-off subsidy of RMB10,000 which wasdelivered to the employee by hand when the Production Section Chief and representatives of the Employee Relations Sectionvisited the employee. Additionally, Luxshare Precision Industry (Chuzhou) also launched an employee donation initiative, setup a care hotline and issued a call for charitable donations from all employees to jointly help the employee get through thehard time.
Case | Luxshare Precision Industry (Chuzhou) Organized Charitable Donations
In 2022, Luxshare Precision released the Diversity and Integration Management Procedure, aiming to provide an equaland inclusive workplace environment for employees with disabilities. During the Reporting Period, Luxshare Precision’s 32subsidiaries have provided suitable positions for disabled employees, among which, Jinxi Factory successively employedmore than a hundred employees with disabilities in multiple functions such as testing, pretreatment, wire organization andpackaging. Before they started working, the Factory had arranged for a professional sign language teacher to offer pre-jobtraining to ensure that the employees were aware of its corporate code of conduct. The factory also provided the employeeswith green factory logo bands, special dormitory labels and other meticulous care. In the future, the factory will further explorethe supporting work for employees with disabilities, such as increasing current barrier-free facilities and clarifying the promotionchannels for employees with disabilities.
Case | Jinxi Factory Ran a Diversified Talent Empowerment Project
Cross-cultural ExchangeLuxshare Precision always attaches great importance to cultural communication among employees. We hold various cross-culturalexchange activities to encourage employees from different cultural backgrounds to participate in communication, promote culturalintegration and continuously enrich employees’ spiritual world.
In June 2022, Luxshare Precision Vietnam Factory held the first “So You Think You Can Dance” contest with a view toencouraging local employees to actively participate in cultural activities. A total of 14 teams participated in the contest. Aftera month of intense rehearsals and fierce competition, the contest officially came to an end on June 18. While enhancing theteamwork spirit of the local participating employees, the event also promoted cultural and artistic exchange, implementingthe development of humanistic care and corporate culture.
Case | Vietnam Factory Held a Dance Contest
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Employee BenefitsLuxshare Precision adheres to people-oriented development philosophy, and attaches importance to employees’ satisfaction fromwork and life, for which we have established well-developed employee benefit system, and provided employees with diversifiedcaring facilities and activities, hence continuously boosting employees’ satisfaction. We provide all employees in the locations wherewe operate with statutory benefits and paid festivals and holidays according to law, e.g., paying social insurance for employees.Based on these, we also provide multiple routine benefits to enhance employees’ sense of happiness and identity.
In order to further improve the services for employees, Luxshare Precision has formulated the “Three-star Inspection Plan forFood, Shelter, and Transportation”, and each factory has arranged specially-assigned persons responsible for inspectingthe current situation of food, shelter, and transportation of the factory, and supervising the improvement. In 2022, all factoriestotally inspected nearly 200 supporting facilities at multiple public areas such as employee dormitories, canteens, andmovement areas. For the problems identified in the inspection processes, all factories have made statistics, and worked outand implemented the improvement plans. By the end of the Reporting Period, more than 15 items have been improved withthe star levels increased in the re-evaluation, solving multiple improvement requirements such as inadequate shuttle buspoints, not scientifically planned living areas, and water seepage of employee dormitories.
Case | Carry out Three-star Inspection Plan Amongst Factories
Employee Health Care
Purchase of Commercial Insurance
Employee Accommodation
Diversified Administrative Care
Office Space
Birthday Greeting
Schooling NeedsCultural Team-building
Employee Canteen
The Company provides a variety of health examination andspecialized examination packages, health knowledge lectures, andMy Voice consultation hotline for employees, conducts psychologicalinterviews with them, and carries out mental health questionnairesurveys, to care for the mental health of vast numbers of employees.
Employees can choose whether they get accommodation in theCompany’s dormitories based on actual personal needs, andthose who choose not to live in the dormitories will be given anaccommodation subsidy according to internal managementregulations.The Company has set up an exclusive administrative communicationwindow to answer employees’ questions regarding clothing, food,shelter, and transportation to communicate interactively, and theservices of answering questions intelligently and manually have beenput into use.
We cooperate with local governments to ensure that the needsof employees’ children can be met so that they can study in localschools, offer shuttle buses from/to schools for such children, providethe assistance of after-school care, and run enterprise kindergartensat some factories; some factories subsidize tuition for their employees’children during the undergraduate period, if the children are enrolledby the universities which are on the university list of the Company andafter the applications are approved.Each factory of the Company is built with different types of canteensto serve a variety of cuisines for employees from different culturalbackgrounds.
Each factory of the Company provides an open reading room foremployees, and regularly organizes movie watching as well asdiversified cultural team-building activities and holiday activities. Inaddition, we provide employees with multiple presents for traditionalfestivals such as mooncakes and Spring Festival goods.
The Company cares for the personal safety of employees on businesstrips/dispatched to other regions, and purchases comprehensiveaccident insurance for such employees.
The Company is committed to creating a warm and efficient workatmosphere, providing a bright and clean office environment.
On the birthday of an employee, a birthday greeting will be sentthrough the internal channel of the Company. The employee andhis/her immediate supervisor will receive an email and customizedbirthday greeting message, and will be invited to the employee’sbirthday party.
Employee Canteen
Xingning Luxshare Precision Completes Planning for
Employees’ Movement AreaNewly Built Green Lawn and Basketball Court in
Xingning Luxshare Precision
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TogetherAbout This Report
Chairman’sStatement
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Ensure Employees’ SafetyLuxshare Precision attaches great importance to the occupational health and safety ofemployees, is committed to providing healthy and safe working conditions for employees,and constantly improves the occupational health and safety management system andsafety production system and management norms with the goal of “zero work-relatedaccidents and zero occupational diseases”. In strict compliance with the Work SafetyLaw of the People’s Republic of China, the Law of the People’s Republic of China on thePrevention and Control of Occupational Diseases, the Measures for the Administration ofContingency Plans for Work Safety Accidents and other laws and regulations, under thecoordination of the EHS (Environment, Hygiene and Safety) Management Committee, weformulated a series of policies in the year, such as the Management Guidelines for Newequipment, New Materials, New Processes, and New Technologies before Application,the Management Measures of the Group for Safety Education and Training, theManagement Measures of the Group for EHS Checks, and the Standards for the Displayof Safety Signs, so as to further consolidate the foundation of policy-based standards.We actively identify, assess, investigate, respond to and manage occupational healthand safety hazard, develop the Identification of Hazard Installations and Risk EvaluationControl Procedure, work with multiple responsible departments to organize theidentification and risk assessment of work-related hazards, and develop objectives andmanagement plans to form an effective risk prevention and management mechanism.In order to create a management chain that is more efficient, Luxshare Precision hasgradually established a two-level mode for occupational health and safety matterstargeting the Company and the local institutions. The Company is responsible for theformulation and optimization of the standard systems, and the promotion and supervisionof the implementation of the systems, while the local institutions conduct detailedmanagement based on their specific situations. In the process of practices, we alsocontinue to improve the management system of occupational health and safety.
As of the end of the ReportingPeriod, a total of
domesticand overseas major productionbases have passed theISO45001 certification foroccupational health and safetymanagement systemsDuring the ReportingPeriod, the EHS Committeeconducted
spotchecks or inspections onthe Company’s factoriesregarding occupational safetymanagement
EHS Management Committee
We unremittingly adhere to the safety policy of “safety first, prevention foremost and comprehensive treatment”. During theReporting Period, the EHS Management Committee led by the Company’s chairman continued to consolidate the foundations foroccupational safety management, improved the long-acting safety mechanism and ensured accountability for production safety.Systems such as the Group EHS Management Committee Operation Supervision and Management System, the BU (Business Unit)EHS Responsibility Letter, the EHS Management Organization Setup and Personnel Allocation Specifications, the EHS OperationMonitoring and Control Procedure have been established. The organization and management capability supervised by the Boardof Directors, led by the EHS Management Committee, executed by the work groups including Audit Group, Publicity Group andLegal Group and factories are improved. To ensure the participation of employees in occupational health and safety management,the members of the EHS Management Committee also include employee representatives to fully listen to employees’ opinions onoccupational health and safety affairs. Meanwhile, we have a complaint mechanism related to occupational health and safety affairs,encouraging employees to report the identified risks through this mechanism and protecting them from retaliation.
? Responsible for overall planning of the Company’s EHS-related work;? Listen to the reports on EHS work by the Director-General of EHS
? Responsible for all EHS work in factories of the Company? Responsible for the direction of the inspection of EHS work in BU/SBU/factories? Implement the EHS-related measures and review capital investment? Work with the Executive Director of each factory to carry out the EHS management of the BU
? Establish and continuously improve the Company’s safety management system? Establish and improve the Company’s EHS management system documents? Hold quarterly EHS meetings, and plan and deploy the overall EHS work of Luxshare Precision? Formulate the EHS inspection plans and standards of Luxshare Precision, carry out the EHSinspections of the Company according to the plans, and follow up problem improvement? Coordinate and command emergency events, conduct crisis public relations according to the severityof the events, and initiate emergency response procedures promptly? Organize and carry out the EHS-related inspections in all factories of the Company as planned? Follow up the EHS problems in each factory and resolve them timely
Legal Group
Audit GroupPublicity Group
Board of Directors
EHS Management Committee
EHS Officers of Factories
? Establish relevant management systems and work procedures and organize their implementation? Carry out EHS-related publicity activities and training? Responsible for the collection, collation and analysis of the Company’s EHS related data? Collect the latest laws and regulations related to EHS, and establish internal implementation standards? Provide necessary legal assistance
Structure of the EHS ManagementOccupational Health and Safety
During the Reporting Period, 3 EHS special meetings of senior managers were organized, the content of which included the arrangementfor EHS-related work, the establishment and improvement of the EHS Information Management System, and the reporting on EHS-relatedworks.
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
EHS Information Management SystemBy launching the EHS Information Management System of Luxshare Precision, the EHS Management Committee established acompany-wide EHS management and control system, unified ways for planning and management and integrated reporting channelvia information-based means, so that the EHS management of the Company became more systematic, intelligent and standardized.Incorporating 13 modules, the EHS Information Management System covers all aspects of EHS management. The electronicand intelligent management of data will steadily promote the information-based development of EHS management and improvethe efficiency of the Company’s EHS management. During the Reporting Period, the first phase of the system development wasconcluded, as a total of nine modules were put into operation, and the factory reporting and data collection functions are realized. Inthe future, continued efforts will be made to promote the development of the data dashboard and the risk warning function so as tofurther improve the information-based EHS management.
Safety Training
In order to enhance the company-wide safety awareness, we actively organized trainingfor occupational health and safety in various forms, and set up EHS-related courseson the online learning platform “i School” for employees to study the EHS managementsystem of the Company, learn about their EHS related responsibilities, and propose theirsuggestions on EHS management. During the Reporting Period, Luxshare Precisionprovided all employees with training for occupational health and safety in various forms.
Modules in Operation for EHS Management
EHS Training
We carried out EHS training covering all employees from top to bottom, and actively promoted the improvement of the three-levelsafety management training at the Company level, department level and post level.
From June 24 to June 25 in 2022, with the goal of further enhancing the safety awareness of management personnel atall levels and ensuring that they have “well informed of, developed a good understanding of, and faithfully assumed theirresponsibilities”, in the South China Region of the Company, we invited external experts to provide the EHS managementpersonnel of all factories in the region with a two-day training session for skill improvements of EHS management. In thetraining session, accident cause analysis of real cases was incorporated into a series of theoretical lectures on safetyresponsibilities and regulations to inspire trainees to conduct in-depth contemplation and analysis. Meanwhile, theindispensability of EHS management for accident prevention was emphasized and the safety management awareness ofEHS management personnel was further enhanced.
Case | Training for Skill Improvements of EHS Management Personnel Was Implemented in South China Region
Basic information
of EHSmanagementinstitutions
Safety accident
reporting
EHS-related laws
and regulations
Contractormanagement
Hidden dangerreportingOccupational healthmanagementSpecial equipmentmanagement
List ofchemicals
Emergencymanagement
EHSInformationManagement
System
During the Reporting Period,349,882
trainees accepteda total of
2,505,922
hoursof training
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Chairman’sStatement
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Production Safety Training
We implemented all laws, regulations and internal policies and systems related to production safety, and required that all productionfactories should conduct regular training for production safety, publicize knowledge of production safety, enhance the safe practiceskills of employees, and cultivate employees’ sensitivity to potential safety hazards and risks.
On February 24, 2022, Xuancheng Luxshare Precisionconducted safe practice training for the use of machineryand special equipment to let employees understand andmaster the basic knowledge of the risk control measures forsafety regarding the use of machinery. The trainees wereemployees holding various posts such as product teamleaders, storekeepers, operators and manufacturing engineers.In order to enhance trainees’ understanding of machinery andequipment, as well as their awareness of safety regardingthe use of machinery and equipment, the lecturer taught theknowledge of the use of machinery and equipment, as wellas the basic knowledge of the safety regarding the use ofmachinery and equipment to all trainees.
Case | Xuancheng Luxshare Precision Conducted Training for Safe Practice regarding the Use of Machinery and Special Equipment
Huarong Factory held a series of events for the SafetyProduction Month and the Firefighting Publicity Day in Juneand November 2022, respectively, and effectively enhancedthe employees’ awareness of the safety responsibility.These events included the mobilization meeting and thethemed training session for the Safety Production Month,fire drills, promotion campaigns with banners and posters,themed video study sessions, special checks of hazardouschemicals, training for the identification and practical use offire protection equipment, etc.
Case | Huarong Factory Held Safety Production Month and Firefighting Publicity Day Events
In order to foster an atmosphere of safety culture of“promoting the safety, safety awareness and safety skillsof employees”, enhance all employees’ safety awareness,and apply safety knowledge to real tasks, Jiangxi LuxshareSmart Manufacturing held a knowledge competitionfor production safety in May 2022. 40 questions aboutsafety knowledge were prepared for the competition inthree rounds, namely the compulsory question round, theresponse-based question round, and the risk questionround. All teams participating in the competition masteredthe safety knowledge better and all staff developed adeeper understanding of the importance of productionsafety through the competition.
Case | Jiangxi Luxshare Smart Manufacturing Organized a Knowledge Competition for Production Safety
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Supplier Training
Luxshare Precision organizes special training of suppliers for EHS safety every year topinpoint the standards and specifications of the Company, as well as the safety risks andthe corresponding prevention and control measures in all construction processes, so asto urge the contractors to implement their principal responsibility for production safety.
From September to October in 2022, Luxshare Precision held two sessions of contractor safety training with the theme of “JointDiscussion on Safety for a Shared Future” for a total of 205 management officers from 57 contractors in the constructionsector, the electromechanical sector, the decoration sector, etc., with the aim of letting the safety management personnel ofthe contractors be familiar with the standards and specifications of Luxshare Precision and its branches/subsidiaries, as wellas the safety risks and the corresponding prevention and control measures in all construction processes, through systematictraining. The training courses included the Comprehensive Safety Mindset and Legal Risks, the Emergency Management,the EHS Value and Operation, the Interpretation of the Contractor Safety Management System, the Key Points for SafetyManagement of High-risk Operations and other safety management courses. At the end, Luxshare Precision organized all thecontractors participating in the training to sign the Contractor’s Letter of Safety Commitment.
Case | Luxshare Precision Held the Kick-off Meeting for Contractor Safety Training
Chemical Safety Training
Attaching great importance to the safe use of chemicals, we regularly offer training courses in relation to chemical labeling styles,storage and use requirements and packaging requirements. Drills on emergency handling measures after the misuse of hazardouschemicals are also organized to effectively prevent personal injury incidents caused by dangerous chemicals in the operation.
From August 15 to 19, 2022, Vietnam factories inviteda third party to conduct chemical safety training foremployees. The training covered a total of 113 participants,including department heads of production, procurement,and biotech departments, full-time and part-timepersonnel responsible for chemical safety, and personneldirectly using chemicals. In order to enhance employees’chemical safety awareness in all aspects, the trainingexplained to the employees participating in the trainingthe legal requirements for chemical activities, hazardouscharacteristics of chemicals, chemical safety instructionsfor hazardous chemicals in production, operation, storageand usage, chemical classification and labeling, chemicalsafety management process, and chemical accidentprevention and response procedures.
Case | Vietnam Factories Conducted Chemical Safety TrainingIn 2022,
suppliersattended the EHS training
On November 7, 2022, in order to improve the emergencyresponse capability of relevant accountable persons incase of chemical leakage, poisoning, burns and otherhazards of hazardous substances, Enshi LuxsharePrecision held a variety of drills in its warehouse forhazardous chemicals, such as the emergency response,personal protection and aftercare for alcohol leakage,alcohol poisoning, welding flux burns, etc. During thedrills, the operators had to wear supplies for laborconservation and protection provided and operate instrict accordance with the drill plan. With the drills, theparticipants deepened their understanding of chemicaluse protection and improved their emergency responsecapability.
Case | Enshi Luxshare Precision Organized a Chemical Emergency Drill
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Safety Emergency DrillAll production factories of Luxshare Precision actively identify various hazard sources, formulate several emergency plans,and conduct emergency drills many times, such as fire emergency drill, mechanical injury emergency drill, special equipmentemergency drill, and electrical emergency drill. Employees’ emergency response capability can be improved and relevant safetyknowledge can be popularized in the process of simulating and handling incidents.On March 24, 2022, Jinxi Factory conducted an electricshock emergency drill to simulate an incident where anemployee fell to the ground after an electric shock on thesite. Immediately after the incident, the first aid personnelwere organized to carry out emergency rescue andrelevant accountable persons such as the EHS Officersand the alert team were notified. First-aid measures suchas CPR (cardiopulmonary resuscitation) on the spot wereimplemented in a timely manner, and vehicles were sentfor the simulation of taking the injured to the hospital. Theemployees who participated in the drill deeply learned thesafety production knowledge about electric shock, improvedtheir awareness of safety production, and mastered the firstaid skills for electric shock incidents.
Case | Jinxi Factory Organized an Electric Shock Emergency Dril
In September 2022, Fujian Yuanguang organized a fire drill,with the participation of a total of 575 people. During the drillprocess, firefighters in the factory simulated using the fire-fighting equipment, and employees learned and masteredbasic fire-fighting skills and knowledge. No safety incidentsoccurred in the drill and the expected effect was achieved.
Case | Fujian Yuanguang Organized a Fire Drill
On September 14, 2022, typhoon “Meihua” hit Suzhou.In order to be prepared for emergency before thetyphoon, Jinxi Factory held a meeting on guardingagainst typhoon and flood prevention, organized theproduction and relevant management units to conductsafety inspections with the fixed points tracked by theperson in charge of flood prevention in each region,and prepared sufficient flood prevention materialssuch as sandbags for flood prevention.We conducted a comprehensive inspection of potentialsafety hazard areas such as the machine room,chemical warehouse, and high roof in the productionarea. Besides, the sewers and outfalls in each areawere dredged and high-power pumps were deployedto prevent waterlogging due to rainstorm and ensuresmooth drainage in low-lying areas. In addition, weinspected all buildings for overhead objects, roofdrainage, and internal circuits to fully ensure the safetyof the factory.In the living area, we also conducted inspections atthe same time. We carried out publicity and guidanceon guarding against typhoon and flood preventionin each building and reminded the employees toretrieve the laundry in time to reduce property losses.Meanwhile, we confirmed the stability of roof fencesand photovoltaic panels in the living area to eliminaterisks and hidden dangers in a timely manner.
Case | Jinxi Factory Dealt with Typhoon “Meihua”
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Chairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Work-Related Injury ManagementLuxshare Precision has formulated a series of policies and procedures for handling work-related injuries and emergencies,such as the Work-Related Injury Management Measures, the Operating Procedure of Medical Health and Occupational DiseasePrevention, and the Control Procedures on Reporting, Investigation and Handling of Accidents (Incidents), and actively carries outthe formulation and drills of emergency rescue plans for work-related incidents. We have set up a 24-hour clinic in each productionbase to ensure that the employees in need can receive timely help.
We have also continued to implement the EHS management responsibilities of thesupervisors of each factory and BU. We require the relevant person in charge toimmediately report incidents through Luxshare Precision’s EHS management system andthe factory to report to the relevant government regulators according to the grade of theincident within the prescribed time. After emergency handling, each factory is required toconduct a cause analysis and to formulate and implement the corrective and preventivemeasures. Luxshare Precision requires the supervisor of each BG/BU/SBU to signthe EHS Management Responsibility Letter, take full charge of EHS management andstrengthen the EHS management of each BG/BU/SBU.
Incident FactoryCompany EHS CommitteeChairman
Incident OccursReport to the EHS ManagementPersonnel of the Factory
Report in the Incident
Reporting System
Incident Investigation and
Cause Analysis
Formulate and Implement
Improvement MeasuresIssue the Incident
Handling Report
Incident Investigation and
Cause AnalysisIssue the Preliminary
Incident Report
Evaluate the IncidentSeverity Level
General Incident and Below
Major Incident
and Above
Report approved after review
Review theIncident Report
Con?rm theImprovement Results
NotifyNotify
Incident Reporting and Handling Procedures
By the end of the ReportingPeriod,
100%
of the BG/BU/SBU supervisors of theCompany had signed theResponsibility Letter
IncidentDepartmentAdministration
EHSHR
Employees
Evacuate and protectthe employees
Announce the incidentwithin 2 hours
Assist in accidentinvestigation
Implement incidentrecti?cationHandle the work-relatedinjury incidentHandle the work-relatedinjury incidentHandle the work-relatedinjury incident
Arrange for medicaltreatment and review
Reimburse the feesConduct incidentinvestigation and analysis
Track incidentrecti?cation
Check safetytrainingReport the work-relatedinjury
Update the work-related injuryhandling progressReport the work-relatedinjury incident
Evacuate from the site with risk of work-related injury
Division of
Duties inWork-RelatedInjury Handling
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
In September 2022, a mechanical injury emergency drillwas conducted in the Jinxi Factory, simulating an incidentwhere an employee’s hand was crushed and injured afteraccidentally entering a wire cutting machine. After a seriesof procedures such as notifying the production line leader,informing the equipment biotechnician, reporting upwardlevel by level, and carrying out on-site rescue, the employeewas sent to the hospital within 13 minutes, which verified theeffectiveness of the Production Safety Incident EmergencyPlan.
Case | Jinxi Factory Conducted a Mechanical Injury Emergency Drill
In order to enrich employees’ spare time life, encourage them to participate in sports activities, and enhance their physicalquality, the labor union of Lanto Electronics establishes several sports clubs and keeps expanding their scale, includingsoccer club, basketball club, badminton club, dance club, yoga club, and square dance club. Employees can join clubsaccording to their interests and take part in sports activities.
Case | The Labor Union of Lanto Electronics Established Several Sports Clubs
In 2022, the Employee Relations Section in the East Chinaregion launched a series of mental health care activitiesfor employees. In the face of the high mental stress ofemployees during the special period, the EmployeeRelations Section organized one-on-one counseling to helpa total of seven employees solve their problems and torelieve them from emotional stress. In addition to regularlypopularizing mental health knowledge in the “WeeklyVoice” mental health column, a mental health knowledgecontest is also organized in the East China Region toencourage employees to take the initiative to learn relevantknowledge and care about their mental health.
Case | Mental Health Care Activities in East China Region
Occupational Health Risk Management
In order to further reduce occupational health risks, we step up the analysisof and remediation for past work-related injury incidents. We make statisticalanalysis of the factories with a high frequency of work-related injuries and thetypes of injuries, require the factories to make comprehensive remediation forthe incidents and to determine the most common types of work-related injuriessuch as mechanical injuries and object strikes after the statistics. If similarinjuries occur repeatedly, the factory must overhaul or replace all the relevantequipment, so that the equipment failing to meet safety requirements can bewithdrawn from the production line of Luxshare Precision. Under the strict safetyrequirements of Luxshare Precision, the Company has achieved effective resultsin risk control of occupational health and safety. During the Reporting Period,there was no work-related fatality and 269 injuries occurred. In the future, we willfurther standardize occupational health and safety management to achieve thegoal of “zero work-related fatalities and zero occupational disease incidents”.
Mechanical injuriesdecreased by
30%
year-on-year
During the ReportingPeriod,
work-relatedinjury incidents occurred
We are also concerned about the mental health of our employees. Hence, we offer a hotline for mental care, establish a mentalhealth column “Weekly Voice”, and carry out a series of activities to popularize the knowledge about mental health and providecomprehensive health care for our employees.
Focus on Employees’ HealthLuxshare Precision highly values the physical and mental health of its employees. We regularly organize physical checkups forour employees. Additionally, we also set up various sports clubs and organize diversified sports activities to meet the needs of ouremployees for spare-time activities and to improve their physical quality.
Dance ClubSoccer Club
Mental Health Knowledge
Contest
“Weekly Voice” MentalHealth Column
RMB
million wasinvested in occupationalhealth and safety
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
In November 2022, the Labor Union Federation ofLuxshare Precision (Kunshan) organized a public welfareand environmental protection-themed activity called“Clothes for Love, Clothes in Color” to fully embody thegreen concept of low-carbon, environmental protection,recycling, and regeneration. The event called uponall members of Jinxi factory to contribute to the publicwelfare. On the day of the event, volunteers checked,weighed, sorted and packaged the donated clothesand kept records of them. They also explained the stepsand purposes of old clothes recycling to employeeswho came to donate their clothes. Each employee whoparticipated in this old clothes donation activity receiveda donation certificate.
In June 2022, the Second Member Conference of the 8th Zhejiang Wire andCable Industry Association was held, and the Huzhou Factory attended theconference as a member of the association. Through this event, the factoryengaged in industry exchanges and learned the experiences of other industryplayers to contribute to the development of the wire and cable industry.
Luxshare Precision strives to be a contributing member of the global community. We are a citizen of each locality where we areestablished to do business. Like individual citizens, we have a responsibility to support the community. It is our goal to take part inprojects that further the welfare of our local communities and to be a dedicated and involved citizen. We incorporate the concept ofsocial responsibility into daily operations and pro-actively participates in industry exchanges to promote the industry development.In the meantime, we also arrange diverse activities to give back to society, show concern for particular groups and activelyparticipate in constructing a harmonious society.Promote the Industry DevelopmentLuxshare Precision actively participates in industry exchanges and explores industry cooperation and development by joiningvarious industry associations to achieve mutual growth and progress.
Case | Huzhou Factory Participated in Zhejiang Wire and Cable Industry Association
Engage in Community Construction
Luxshare Precision actively participates in constructing a better community by carrying out environmental protection public welfareactivities, promoting environmental protection concepts, and contributing to building an environmentally-friendly society.
Case | Jinxi Factory Conducted an Old Clothes Recycling Activity
Care for Special GroupsAssisting special groups has always been our critical public welfare work. During the Reporting Period, Luxshare Precision activelyconducted activities to offer support and comfort to special groups in various operating locations, providing companionship andconsolation items and spreading the “Warmth of the Luxshare Precision”.
On October 4, 2022, Rishan Computer Accessory (Jiashan) Co., Ltd. teamed up with volunteers from Ganyao Nursing Home,Dayun Caojia Village Community and Huimin Youjia Village Community to carry out a “Fill the Double Ninth Festival with Love,Warm the Hearts of the Elderly” themed the Double Ninth Festival condolences activity. They brought rice, oil, milk, and othergifts to the elderly in the nursing home for consolation and accompanied them for a pleasant time. The Secretary of HuiminYoujia Village awarded the volunteers who participated in the activity a pennant.
Case | Ri Shan Computer Accessory (Jiashan) Co., Ltd. Conducted a Visit to a Nursing Home
In 2022, Luxshare PrecisionVietnam actively reached out tolocal impoverished families andbrought warmth to their homes byproviding children with stationeryand gifts, etc.
During the Reporting Period,the Vietnam Factory visited andprovided materials to multipleunderprivileged children in
local kindergartens andprimary schools.
Case | Luxshare Precision Vietnam Visited Impoverished ChildrenThis event collected
397.5
kg of oldclothes, and all of themwere donated to therecycling platform.
Implement Community Involvement
Rishan Company Comforting the ElderlyVolunteers and Employees Receiving a
Pennant from Huimin Youjia Village
Luxshare Precision works with suppliers to promote sustainable development across the valuechain. With a comprehensive life-cycle management process of the supply chain, we focus onresponsible supply chain management, strengthen conflict mineral management, and promotesustainable development of suppliers through strict requirements, publicity and training onsocial responsibility, in order to jointly improve the supply chain system.
100%
of the supplierscommitted tocomplying withintegrityrequirements
1,609
CMRTquestionnaires
issued
CMRTresponse rate
97%
Making ResponsiblePurchase to Deliver Value
? Responsible supplychain management
? Business ethics? Chemical management
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Risk Assessment
According to different supplier risk levels, we adopt the three different review methods of direct review, indirect review and self-declaration, and designate the reviewers qualified for ISO review to assess potential suppliers from the perspectives of systemmanagement, institutional management, procurement management, project management and RBA management to confirm theircompliance with our requirements. The approved suppliers can be included in the list of qualified suppliers after signing theagreement and passing the examination and approval; if a supplier fails to pass the review, it can conduct rectification as required.After rectification, a review will be conducted. If the supplier fails to pass the review again, it will lose the opportunity of beingincluded into the list.
Tiered ManagementIn daily management, we continuously control qualified suppliers to maintain the stability of the supply chain and ensure theproduct quality and service level of the supply chain. We conduct monthly comprehensive evaluation on qualified suppliers fromfour dimensions: technical ability, quality ability, delivery and supply ability and cost leadership ability, and classify them into fourgrades: A, B, C and D. For Grade C suppliers with poor performance, we will require them to provide an improvement report andtrack their improvement effects. When necessary, we will conduct an on-site review. Cooperation with suppliers will be suspendedif they are rated C for two consecutive years. For Grade D suppliers, we will refuse to renew contracts or sign new contracts withthem and require suspension of supply, and provide them with instructions for improvement. If all improvements are implemented,we will agree to accept their delivery and keep constant tracking. Otherwise, we will cancel their qualification as qualified suppliers.For manufacturers designated by customers, Luxshare Precision will work with customers to adopt the same control method forsuppliers to ensure the stability of the supply chain.Evaluation and Audit
Luxshare Precision carries out annual audits on its suppliers. In 2022, we adopted a combination of online and offline methods tocarry out annual audit work, thus strengthening the preservation and inquiry of audit records, and promoting the standardizationof the annual audit of the suppliers. With an audit dimension in line with the access audit, we aim to periodically review and checkwhether the qualified suppliers in the roster always meet the compliance requirements.
Quality Management Systems Certification
ISO 9001, IATF 16949, ISO 13485, TL 9000, QC 080000, SONY GP or third-partyquality systems Certification of other categoriesSocial Responsibility Systems CertificationISO 14001, OHSAS 18001, ISO 45001, SA 8000, RBA-VAP or third-party socialresponsibility systems of other categories
Annual Audit Process in 2022
In 2022, we launched
the supplieraudit system
toimprove the efficiency ofsupplier management.
Suppliers must obtain atleast
quality systemcertification and
socialresponsibility systemcertification to be includedin the list of potentialsuppliers
Total number of suppliers inthe database 10,680 suppliers
Number of Suppliers in 2022
8,8112,403
1,869
Chinese SuppliersService providers
Overseas suppliers
Suppliers of raw and
auxiliary materials
8,277
Luxshare Precision has formulated the Supplier Code of Conduct, the SupplierManagement Operating Procedure, the Supplier Management Operating Practiceand a range of management systems and procedures to manage suppliers from fourdimensions: development access, risk assessment, tiered management, evaluation andaudit.
Development Access
We will conduct an access evaluation on suppliers. We have set up the AccessQuestionnaire for Suppliers, the Competency Baseline Questionnaire for Suppliers toconduct qualification examination for suppliers in the access stage, and audit suppliersaccording to the supplier management standards, product quality and environmentalprotection standards, responsible business alliance code of conduct and other standardsof Luxshare Precision, and require potential suppliers to sign the Letter of integrityCommitment for Supplier, Letter of Guarantee on Responsible Business Alliance Code ofConduct and other documents.
Supply Chain Management System
Annual auditQualified supplierUnqualified supplierGive it thepriority incooperation
Long-termcontract
Grantpreferentialpayment terms
Reduce thefuture cost
Assist andcoach it forimprovement
Qualified suppliers
If there is any majordeficiency, cancel thequalification of supplier
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Conflict Minerals Management Framework of Luxshare Precision
Board of Directors
SustainableDevelopment CenterImplementation teamwithin SubsidiariesDirect suppliersQuality Department
Engineering
Department
PurchasingDepartment
Other relevant functionaldepartmentsUpstream suppliers
Supply chain related functional departments under
the Company and subsidiaries
Chairman and general
manager
Project working group
Supplier coordinator
PMContact person
Conflict Minerals Management
Luxshare Precision is committed to responsible mineral procurement. We donot prohibit suppliers from sourcing minerals from DRC and neighbouringcountries, but they should purchase minerals from the list of SORs certified bythe Responsible Minerals Initiative (“RMI”) through the Responsible MineralsAssurance Process (“RMAP”). Smelteries and refineries that are not RMAPcertified or do not meet customer requirements must be removed from thesupply chain.
In March 2022, we updatedand reissued the
ConflictMinerals ManagementMeasures
and published theConflict Minerals Policyof Luxshare Precision
onour official website.
Luxshare Precision adoptsthe CMRT (Conflict MineralReporting Template) and EMRT(Extended Mineral ReportingTemplate) provided by RMIas the survey templates toinvestigate five minerals inthe supply chain includingtantalum, tin, tungsten, gold(3TGs) and cobalt (Co),advancing due diligenceaudits of SORs.
In 2022, we identifiedand contacted 42 high-risk suppliers, made areconfirmation and urged themto conduct management andimprovement, and cancelledour cooperation with non-certified SORs in a timelymanner. We are also activelyseeking other suppliers ofcompliance SORs materialsand will consider cancellingcooperation with those who areunwilling to make improvement.
Under the guidance of themanagement team led by theBoard of Directors, LuxsharePrecision has established adue diligence project teamfor conflict minerals led bythe Sustainable DevelopmentCenter for its conflict mineralsmanagement, with an aim tojointly promote responsiblemineral procurement andannual due diligenceon conflict minerals withsubsidiaries and suppliers inthe mineral supply chain.
The 2022 due diligence onconflict minerals covered theproducts for mass productionbetween March 2021 andMarch 2022, and the 2021/22Conflict Minerals Report hasbeen compiled.
Annual ReportDue Diligence and
OversightRisk Assessment and
ManagementManagement System
2022 Luxshare Precision Conflict Minerals Risk Traceability Process
We have developed a due diligence framework for suppliers related to conflict mineral value chains based on the OECD (Organizationfor Economic Co-operation and Development) five-step process, planned and implemented the specific process of establishingconflict minerals management system and implementing due diligence, so as to determine that the necessary conflict minerals usedin our products are “conflict-free”.We welcome and encourage employees, suppliers and other stakeholders to report any problems, concerns or irregularities relatedto conflict mining procedures through our special email address on the official website.
Sort andsummarize
supplierCMRTDetermine thecorrespondingsuppliers ofcomponentscontaining 3TGIdentifycomponentswith 3TGDeterminethe list ofinvestigatedproductsSelectthe scopeof CRMTdeclaration
Luxshare Precision requires that suppliers should first understand the processing factories of the related minerals or relatedmaterials in the supply chain to identify the high risk in the supply chain. For the related materials, the high risk should be tracedback to the source or root cause. We annually conduct due diligence on conflict minerals for our suppliers and require them toconduct due diligence on their supply chain to ensure that the metals used in the products supplied to us do not originate fromconflict minerals. Direct suppliers are responsible for managing the change in the information (including addition or removal)of SORs (smelteries or refineries) of their upstream supply chain. In case of any change, they shall report to Luxshare Precisionimmediately. In the process of supplier selection and recruitment, we will publicize the Supplier Code of Conduct and ConflictMinerals Management Measures to the suppliers, and require them to sign the Letter of Guarantee on Responsible BusinessAlliance Code of Conduct to promise that the raw materials purchased must come from environmentally and socially responsiblesources.
Responsible Supply Chain
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
Environmentally
Friendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
97%
3%
Suppliers having repliedSuppliers not replied
Certi?edNon-certi?ed
Conducted due diligenceon their upstream suppliers
Formulated con?ict-free
minerals policy
1,462
1,5401,492
Number ofCMRTs issued1,609
Luxshare Precision plans to conduct a company-wide cobalt survey in 2023. In 2022,the Company took the lead in conducting cobalt survey in the Kunshan factory, and 80manufacturers involved in cobalt were investigated by the EMRT form, and the suppliersurvey response rate was 100%. A total of 77 source cobalt SORs were involved in theprocurement of cobalt metal, of which 45 SORs were not certified, involving 29 suppliers.We will continue to require the suppliers to remove unqualified SORs until they are 100%compliant.Luxshare Precision is committed to enhancing the management level of conflict mineralsand deepening the communication and exchange with suppliers on conflict mineralsissues. In March 2022, we prepared training materials for International and domesticconflict minerals conventions and conflict minerals management requirements of LuxsharePrecision, and organized the project leaders of our subsidiaries to participate in the training,realizing a training coverage rate of 100%. We aimed to better convey our managementphilosophy and requirements of conflict minerals to suppliers through project leaders.
Luxshare Precision CMRT Due Diligence Results of Conflict Minerals
Survey response rate
Details of SORs certification involved in the 3TG supply chain are as follows
Environmental and Social Responsibility ofSupply Chain
We have published the Supplier Code of Conduct on our official website, which containsour social responsibility standards in labor, health and safety, environment, businessethics, management system, etc. Any violation of this code may jeopardize the businessrelationship between the supplier and Luxshare Precision, and in the most serious case mayresult in the termination of the business relationship between the parties.In strict accordance with the RBA Code of Conduct, we have formulated the Supplier SocialResponsibility Behavior Handbook and Letter of Guarantee on the Responsible BusinessAlliance Code of Conduct. These two documents have been distributed to all suppliersfor them to learn about and understand our requirements for social responsibility, andstandardize their behaviors. All new suppliers are required to sign the Letter of Guaranteeon the Responsible Business Alliance Code of Conduct.We have formulated the Supplier Corporate Social Responsibility Management OperatingProcedure which provides detailed regulations on the supplier CSR management process tofurther standardize and systemize supplier CSR management. Moreover, we have designedthe Supplier CSR Risk Identification and Assessment Form and conducted preliminary CSRrisk audit on the suppliers during the new suppliers’ risk assessment, so as to determinetheir CSR risk level and avoid cooperation with suppliers with high CSR risk.
Conflict minerals relatedpersonnel training coveragerate is
100%
suppliers are certified,
suppliers are in the process of certification or not participated, theproportion of certification is
78.60%
The signing rate of newsuppliers in 2022 was
100%
Number of suppliers sourcing from SORs
Number of suppliers performing the
corresponding procedures
97%
3%
Certi?ed
Tantalum
77%
23%
Tin
70%
Gold
91%
Tungsten
30%9%
In the process of certi?cation/not participated
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Management of Hazardous Substances in Supply ChainAs the connection point between customers and suppliers, Luxshare Precision understands thatproviding clear material requirements to suppliers is an important prerequisite for providing high-quality and environmentally friendly products to customers. In order to improve the Company’s overallmanagement of hazardous substances, we set consistent standards for suppliers, so as to drive thesuppliers to carry out sound hazardous substances management and reduce the risk of non-compliantprocurement.
Environmental and Social Responsibility Management ofSuppliersFrom management systems of the Company, environmental management, labor management,occupational health and safety management, business ethics management these five aspects,we identified supplier’s CSR risks, and assist them to enhance and improve their CSRmanagement. In 2022, the cooperation with 1 supplier was terminated due to majoroccupational health and safety risks, 461 suppliers completed the rectification work after auditon-site with the amount of 592 items in total.
Management
Systems
of theCompany
Audit dimensionAudit dimensionAudit contentsAudit contentsRectification items
completed
Rectificationitems completed
EnvironmentalManagement
? ESG management system? Conflict minerals management? Intellectual property protection? Information disclosure? Environmental permit and report? Pollution prevention, control
and treatment? Energy conservation andemission reduction? Restricted substances? Hazardous substances
? Occupational safety? Emergency plan? Prevention and control of
occupational diseases? Industry hygiene? Hard physical labor? Mechanical safety protection? Public hygiene, food andaccommodation
Occupational
Health and
SafetyManagement
Actively carry out the replacementor reduction of hazardous chemicalsubstances, and phase outhazardous chemical substances orreplace them with safer chemicalsubstances as soon as practicableWe strengthen communication and cooperation with suppliers through visits, phone calls, online communication and offline meetings every year. We alsocarry out supplier training to deepen suppliers’ understanding of product and service quality, social responsibility and other requirements, discuss and reachconsensus on the sustainable development of the future supply chain, and help suppliers improve their management ability in all aspects.
Sign the Letter of Guarantee forEnvironmental Protection to ensure thatraw materials, components, packagingmaterials, semi-finished products andfinished products supplied to LuxsharePrecision meet the managementrequirements of the ManagementStandard for Restricted Substances ofMaterials and Finished Products
Conduct regular audit related to the
control of hazardous substances,check the product ingredient list andthird-party hazardous substancetesting report, and send it to theCompany’s internal laboratory forhazardous substance testing to preventthe non-environmentally friendlymaterials and products from flowinginto the Company’s product chain
Timely communicate and require
suppliers to complete self-inspection,feedback and confirm compliancewithin the prescribed time limitafter the Management Standard forRestricted Substances of Materialsand Finished Products is updated
Number of suppliers for which environmental and socialimpact assessments have been carried out in 20222,451Proportion of new suppliers screened using the socialresponsibility evaluation dimension
100%Number of suppliers who completed on-site audits
LaborManagement
? Prohibit child labor and forced
labor? Right of free association? Anti-discrimination and anti-
harassment? Humanitarian treatment? Compliance in working hours? Compliance in remuneration
Business
EthicsManagement
? Business integrity? Fair trade, advertising and
competition? Identity protection and anti-
retaliation policies? Privacy protection
Supply chain hazardous substances management requirementsEntry Conditions
Regular Audit
Change Management
Replacement or Reduction
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Green Supply Chain ManagementLuxshare Precision is committed to building a green supply chain, conveying the conceptof green and low-carbon development to the core suppliers, in order to jointly reducepollution and carbon emission. Luxshare Precision partnered with the Institute of Publicand Environmental Affairs (IPE) and launched the Green Supply Chain Initiative at the endof 2021. During the Reporting Period, under the supervision and guidance of the Boardof Directors, we set up a project team to build a green supply chain and released the firstGreen Supply Chain Project Periodic Report on our official website in August 2022.Luxshare Precision will make its best efforts to build a green supply chain. In 2022, wecooperated with IPE to provide regular special training for subsidiaries and suppliers,answering questions on a one-to-one basis and assisting subsidiaries and suppliers insolving issues such as GCA (Green Choice) audit on removal of environmental violationinformation submitted and refined the PRTR (Pollutant Release and Transfer Register)information disclosure.We believe that dynamic monitoring of environmental violation records helps us identifypotential environmental risks. We hope that by correcting the risk spots of environmentalviolations, we can fundamentally promote the emission reduction of polluting substancesin our supply chain and improve our treatment of environmental pollutants.
Luxshare Precision’sCommitment on Anti-corruption
Themes of Supplier Training
In 2022, we carried out a totalof
trainings for suppliers with6,754
person-times.
On December 28, 2022, we held the 2022 Luxshare Precision Sustainable Development & GreenLow-carbon Supplier Conference online. We presented our social responsibility management,hazardous substance management, responsible procurement and other related requirements,as well as the progress and planning of “green and low-carbon” construction, progress andprospect of green supply chain construction, and the action of achieving the scientific carbongoal at the conference. During the conference, we explained the Supplier Code of Conduct,the Letter of Guarantee for Environmental Protection, Quality Contract, Letter of Guaranteeon Responsible Business Alliance Code of Conduct and other documents, and put forwardthe requirements and expectations of building a sustainable, clean, green and low-carbonresponsible supply chain.
Case study | Organizing Supplier Conference
Training for Suppliers
Luxshare Precision pays attention to the communication and exchange with suppliers,and hopes to build a responsible supply chain with them.
Incorruption ManagementLuxshare Precision attaches great importance to the commitment and review of fairnessand integrity in the process of business dealings, and follows the principles of fairness,openness and fairness. It requires the procurement personnel to carry out all businessactivities in the process of cooperation with suppliers based on the ethical code of“keeping good faith, advocating honesty and punishing corruption” of the Company.We issue the Supplier’s Voluntary Declaration to encourage suppliers to monitor andreport improper situations in a timely manner, specify the business ethics guidelines andreporting methods to be followed between the Company and suppliers through LuxsharePrecision’s Commitment on Anti-corruption, and ask the suppliers to sign the SupplierIntegrity Commitment letter upon the inclusion of the suppliers. In 2022, 98.69% ofsuppliers signed the Supplier Integrity Commitment letter with Luxshare Precision.
Some of the designated suppliers have directly signed the Integrity Commitment Letter with ourcustomers, and the Company has confirmed that they do not need to sign it again.
Systemoperationprocess
Anti-corruptionand business
ethics
HazardoussubstancemanagementCSRmanagement
Updates tothe suppliermanagement
system
EHS
Responsibleprocurement
In 2022, we assisted
suppliers and subsidiariesin achieving the removalof environmental violationrecords,promoted
suppliersand subsidiaries tocomplete the PRTRinformationdisclosure.
High-quality products and services are the beginning of the pursuit of excellence and the key topromoting the sustainable development of an enterprise. Always sticking to the craftsmanshipspirit, Luxshare Precision constantly explores the extreme of intelligent R&D design, digitaloperation management and automatic manufacturing, and is committed to continuouslycreating high-quality product experience for customers through lean quality and technologicalinnovation.
Seek Step-wise PerfectionThrough Intelligent andQuality Manufacturing
Total number ofpatents4,526
? Innovative research anddevelopment
? Product quality management
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
Manufacturing
Stable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Intelligent Manufacturing SystemWe actively respond to the national intelligent layout and constantly promote the intelligent transformation of the industry. We providedata decision-making analysis and visualized business management for R&D, supply, production, quality, after-sales service and otheroperation and manufacturing links through the digital empowerment of the whole-procedure enterprise optimization and upstream-and-downstream connection, supported by platforms and technologies such as the Industrial Internet of Things, artificial intelligence, bigdata, 5G communication, the Internet of Things and Digital Twin, in an effort to ensure timely delivery, improve production efficiency andoptimize operating costs. We aim to craft a lean, agile, interconnected, intelligent and platform-based organizational management model,and enhance the core competitiveness of our business.Additionally, in a bid to effectively enhance the operation management of the enterprise, we make overall planning and coordinationfor production activities such as production and operation, quality control, safe execution, equipment operation and maintenance,manpower management and performance appraisal and strengthen the all-round tracking management of product manufacturingparameters including cost, quantity, safety and time in a production data-centered and business-linked manner and by capitalizing onthe manufacturing operation management (MOM) platform. The platform consists of the Intelligent Manufacturing Execution System,Luxshare Quality Information Management, Intelligent Asset Management System, Intelligent Total Productive Management andWarehouse Management System.
With the in-depth development of industrial transformation,Luxshare Precision adheres to the “Industry 4.0”intelligent manufacturing strategy, insists on the precisionmanufacturing with digital empowerment, proactivelypromotes the intelligent development of production andoperation, and establishes and improves the intelligentmanufacturing system. Through these efforts, LuxsharePrecision has gradually leaped from conventionalmanufacturing to intelligent manufacturing and enhancedthe development potential and competitiveness of theenterprise.
Luxshare Precision Manufacturing Operation Management (MOM) Platform Subsystems
With the aid of the visualized information system,convenient document transmission, viewing andapproval and the administrative regulations onautomatically effective signed and approveddocuments, the production and operation efficiencyof each workshop and production line is effectivelyimproved, and paperless office work is achieved.
Through platforms such as system application and product system,supplier relationship management system, test management systemand green supply chain management system, the production andoperation departments of the Company are linked with the upstreamand downstream suppliers, so as to strengthen the informationsharing and quality control of incoming quality control, in-processquality control, finished quality control, statistical process control andother links.
The whole-process automatic operationof product warehousing is realized by theintelligent system to ensure the efficient andaccurate warehousing operation, which greatlyimproves the warehousing management level.
The operation management of production planning,material information, testing results and manufacturingprocedures are optimized through the real-timemonitoring and intelligent analysis and decision-makingof data in manufacturing links such as the quantity ofwork orders, packaging materials, assembly testing, andprocedures and processes.
Intelligent Manufacturing Execution System
Electronic Standard Operating Procedure (E-SOP)
Due to the fast identification of physical assetinformation including category and model based onintelligent identification technologies such as QR codeand RFID label, the inventory accuracy is improved,the labor and time costs of inventory taking are saved,and the unified control of the Company’s fixed assetsis achieved.
Intelligent Asset Management System
Luxshare Quality Information Management
By setting basic equipment information such as operationand maintenance status and workflow, maintenancepersonnel can precisely identify the abnormal equipmentwith the aid of real-time monitoring and intelligent warning,which can enhance the efficiency of spot inspection andmaintenance, effectively avoid potential safety hazardscaused by improper patrol inspections, and improve theoperation safety of personnel.
Intelligent Total Productive Management
Intelligent Warehouse Management System
Luxshare Precision Manufacturing Operation Management (MOM) Platform
ManpowerTransparencyManagement
Luxshare Quality Information Management Intelligent Warehouse Management System Intelligent Manufacturing Execution System Electronic Standard Operating Procedure (E-SOP) Enterprise System Integration Luxshare Project Information Management Manufacturing Process Management IaaS PaaS SaaS
KPI
DigitalPerformanceManagement
Client SystemIntegration
Intelligent Asset Management System Intelligent Total Productive Management
Intelligent Manufacturing Strategy in the Industry 4.0
See
Know
Prepare
Optimize
Visibility
Transparency
Predictability
Adaptability
ProgrammableLogic Controller
Digital Cloud
Services
Surface Mounted
TechnologicalEquipment
TestEquipment
Test System
WarehouseControl System
Automatic Guided
Vehicle System
Vendor System
Focus on Intelligent Manufacturing
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Intelligent Manufacturing Development PlanIn the future, we will continue to drive production management on a digital basis, constantly and deeply develop information sharing,automatic control, visualized management and other lean manufacturing fields, gradually achieve whole-procedure transparentproduction and whole-link intelligent manufacturing of the industrial chain, and lead the development of intelligent manufacturing inthe industry.
To promote the intelligent and lean operation of the enterprise, Luxshare Precision hasvigorously developed the application scenarios of WiFi 6 and 5G wireless communicationand consistently promoted the construction of wireless factories. With the collaborativeoperation and precise scheduling of multiple intelligent devices, including RGV (railguided vehicle), AGV (automatic guided vehicle), non-wheeled mobile robot and opticalvision quality inspection system, the all-round intelligent and automatic operationhas been achieved in in-warehouse, handling, loading, calibration, testing, storage,sorting, packing, ex-warehouse and other links, which effectively lowers manpowercosts, guarantees the safety and efficiency of cargo transportation, and improves themanufacturing benefits. Meanwhile, by means of narrowing the channel width in thewarehouse, reducing the number of channels in the warehouse and increasing thestorage height, dense storage has been achieved, and the utilization rate of storagespace has been further improved.
Case | Unmanned Factories Combining Software and Hardware
Loading
AGV
AGV
AOI
MES Passing Station
Testing
PackingPacking
Luxshare Precision’s 5-year Plan for Intelligent Manufacturing
? Cooperate in the interconnected operations of
materials, manufacturing and supply? Promote intelligence application for premaintenanceand repair, logistics path optimization, etc.
2023
? Strengthen the management of engineering
data, processes and procedures and otherproduction information
? Strengthen data mining and advance the
application of Digital Twin, big data and othertechnologies
? Improve the automation coverage of all links
in manufacturing
2024
? Promote the application of intelligent
decisionmaking, intelligent production
scheduling, quality analysis and other
intelligent services
? Deeply explore the artificial intelligence
field and apply machine learning in the
manufacturing process
2025
? Establish the interconnection of the underlying
equipment
? Implement the precise distribution and importing of
logistics in unmanned workshops
? Establish lean standardization of production lines
2026
? Build the value of lean talent, cultivate
lean talents for the enterprise, and assistsuppliers in lean coaching
? Promote the application of 3D printing,
graphic processing, machine vision andother intelligent technologies
2027
The wireless coveragerate of newly built factorieshas exceeded
50%
The constructionefficiency of wirelessworkshops was improvedby30%
compared towired workshops
Intelligent WarehouseIntelligent Logistics in Factories
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Quality Management SystemWe insist on “Qualify First” and strictly abide by the Product Quality Law of the People’sRepublic of China and the laws and regulations of the operation and shipment locations.Based on customers’ audit requirements and the Company’s annual operation reviewresults, we constantly improve the quality management system, create a qualityassurance mechanism for product manufacturing, and earnestly guarantee the effectiveimplementation of quality control measures in all aspects of manufacturing in strictaccordance with product quality standards. Our main production bases were alsocertified by IS0 9001 Quality Management System, and further certified by IATF 16949Quality Management System Standard for the Automotive Industry and ISO 13485Medical Devices – Quality Management Systems according to customer needs and theCompany’s development strategy.Depending on the product positioning, process characteristics and development needsof the factories, the main production bases of the Company conduct quality performancecontrol in material selection, sample testing, finished product inspection and supplieraudit. Besides, the quality control work is decomposed item by item and implementedlayer by layer to the direct responsible persons in charge of relevant procedures, and wehave established a quality objective management system linked to the performance ofeach responsible personnel, so as to ensure the effective operation of quality standardsand the continuous improvement of quality performance. In accordance with the qualityevaluation standards, the Quality Department of the Company regularly carries outquality audits, tracks and assesses the achievement of quality management objectivesin the main production bases, and disseminates excellent quality management practicesinternally, in a bid to guarantee that each main production base optimizes the qualitymanagement regulations in a timely manner and to achieve the improvement of theCompany’s overall quality management level.
At the end of the ReportingPeriod, Luxshare Precision wascertified by
IS0 9001
Quality Management System and
ISO 17025
LaboratoryManagement System.
Quality Certification
Amid the development trend of being “fast, miniature and integrated” of the precision technology industry, Luxshare Precisionunswervingly follows the development path of technological innovation and independent R&D. With the capacity building of innovativeresearch and development as the cornerstone of long-term development, Luxshare Precision continues to optimize precisionelectronic products and solutions, flexibly meets the differentiated demands of customers worldwide, and connects the bright futurewith technology.Moreover, we actively invest a quantity of resources in R&D and innovation. For example, several R&D centers have been set upin Beijing, Shanghai, Hebei, Guangdong, Jiangsu, Shaanxi, and Taiwan. We constantly pursue technological innovation in theapplication of connecting wires, connectors, wireless chargers, micro motors, acoustics and electronic modules to products andservices in important fields such as consumer electronics, communication, automobiles and medical care, to gradually achieve theinnovation strategy from “customer demand” to “customer satisfaction”.To provide a solid talent guarantee for corporate R&D, we consistently absorb and develop talent resources, cultivate skilled andexperienced R&D personnel and teams for a long time. We reward patent inventors in accordance with the Measures for RewardingPatents and Business Secrets, and added quarterly bonus management in the Measures for Rewarding Patents and Business Secretsto publicly commend units with outstanding patent application results in each quarter, and excellent inventors. These efforts aim tostimulate the innovation vitality of the R&D teams, promote the development of scientific research, and create a corporate atmospherefor courageous innovations.
Quality management is the foundation of enterprise development, the focus of customers attention and the lifeline of marketexploration. Luxshare Precision abides by the quality management policy of “customer first, integrity management, scientificmanagement and excellence”, sticks to the management standards of quality and processes consolidation, comprehensivelyimplements the intelligent quality management model, encourages employees to strive to be “Luxshare” members with craftsmanshipspirit, to achieve superiority with heart, to cast excellence with professionalism, and to continuously provide customers with safe andstable high-quality products.
Strengthen Innovative Research and Development
Number of Newly Increased Patents in the YearTotal Number of Patents
Patents Grantedfor InventionsPatents for UtilityModelPatents forDesign
1,108
Number of Patents in the Company
Enhance Quality Management
3,373
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturing
Stable and Healthy
Operation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Quality and Services ManagementTo enhance the quality management of the industrial chain, we adopt the triple management method of“continuous improvement, effective interception and systematic prevention”, continuously improve the abilityof supplier quality management, and ensure that the product quality and production techniques of suppliersmeet the Company’s quality management requirements, in a bid to reduce the risks of supply chainmanagement and cooperate with suppliers to develop together.Meanwhile, we regularly communicate with customers face-to-face and other channels and forms toearnestly learn about customers’ demands for product quality, handle customers’ opinions in a timelyand appropriate manner in accordance with the Operating Procedure for Information Communication, theHandling Procedure for Customer Complaints, the Operating Procedure for Continuous Improvement andother internal regulations, and make continuous improvements to process or management deficiencies.With regard to products that need to be recalled due to product quality or safety issues, we developed theHandling Procedure for Product Sales and Return and other management documents, in which the recallimplementation procedure was defined, proper arrangements were made for product recall, maintenanceand transportation, and appropriate remedial measures were adopted to earnestly safeguard customers’rights and interests.In addition, in order to continuously improve customer service quality and optimize customer experience,we have developed and implemented the Management Procedure for Customer Satisfaction.Multi-dimensional surveys, such as annual customer satisfaction surveys, monthly evaluation of customersatisfaction indicators and on-site audits, help us to acquire a comprehensive and in-depth understandingof customers’ demands and expectations for Luxshare Precision’s products and services. Moreover, therelevant responsible business departments followed up on the feedback, developed remediation plansand solutions, and improved the service standards and quality in a targeted manner, in a bid to providecustomers with higher-quality products and services and enhance customer recognition and satisfaction.
Intelligent Quality ControlAimed at strengthened quality management efficiency, we have established and improved the Luxshare Quality Information Management, which verticallyconnects the quality information chains of upstream and downstream suppliers of the Company and factories and horizontally runs through the qualitybusiness chains of procurement, research and development, production and testing. The platform assists each factory in systematically managing quality-related business procedures and data. Besides, with quality control methods such as quality data recording, online quality measurement and visualizedreal-time progress, we achieved the intercommunication of quality information, paperless quality inspection and transparent quality management, andcomprehensively improved the quality management level.
Luxshare Quality Information Management
Materialreceiving
IQCIPQCFQC
Data integration
Monitor anomalies
Paperlessforms/sheets
WarehouseWarehouseOQCGood deliveryManufacturingPackaging
GSCM
LQIM
SAPSRMWMSOA
IQC inspection/measurement, IPQA spot inspection and patrolinspection/?rst and last inspection, FQC inspection/measurement,environmental testing/reliability testing and other data recordingInspection
LAB
SPC monitoringEnvironmentalcompliance
sheet of
| production lines |
Handling sheet
for abnormalquality
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
For problems in conventional quality anomaly analysis such as a complicated process and slow timeliness, Likai PrecisionTechnology Co., Ltd., a subsidiary of Luxshare Precision, adopted the intelligent Fault Analysis and Corrective Action (FACA)system to monitor the production status of non-conforming products. The Company used the early warning for product yieldand product serial number as the design parameters and generated inspection path maps and inspection analysis resultsin the intelligent FACA system based on quality requirements. With the inspection charts, the working personnel can rapidlyand accurately identify risky stations and risky supplies and precisely intercept the generation and outflow of risky products,which has effectively reduced the non-conforming rate of the process and manpower management costs and guaranteedthe delivery quality.
Case | Likai Precision Technology Adopts Intelligent Risk Analysis to Achieve Efficient Quality Inspection
Procedure of Intelligent FACA
Development of Quality CultureDue to our sufficient awareness of the significance of management optimization to improve organizational efficiency, we improveour quality management level by enhancing employees’ quality risk responsibility consciousness, hoping to achieve high-qualitydevelopment in competitive marketplace. In accordance with the Company’s quality management standards, and based onthe annual quality management objectives, business development needs and position competency requirements, we developtraining plans for quality control and management, and regularly organize employees to participate in offline quality managementknowledge education and practical training on laws and regulations, quality knowledge and position skills. Besides, we assistemployees in mastering the core operation skills of business lines, continuously improve the awareness and practice through theannual “Quality Month Activities”, “Stick to the End – Quality Knowledge Competition”, online “Quality Knowledge Class” and quality
award application competition, and share easy-to-understand knowledge articles, in order to further deepen employees’ qualitymanagement consciousness and consistently promote the development of corporate quality culture.
Quality is the cornerstone of an enterprise’s development. In an active response to the national call of Quality Monthover the years, Luxshare Precision has continued to carry out a number of large-scale corporate quality culturalactivities in the forms of quality lectures, knowledge competitions, quality essays and operation skill competitions,so as to stimulate employees’ innovation consciousness, deepen employees’ quality consciousness, enhanceemployees’ operation level, improve employees’ quality management capacities, and create a normalized andstandardized corporate atmosphere.
Case | Luxshare Precision Conducts “Quality Month” Activities at Multiple Factories
“Quality Month” Activities
Set the early warning forproduct yield andinput the productserial number
Generate theinspection path map
in the system
Identify risky stationsand supplies based
on the results
Intercept risky products
and improve the
product yield
In order to improve the product quality inspection efficiency and product yield, we have adopted the intelligent quality managementmode of automatic production and automatic inspection, extensively applied machine vision, intelligent patrol inspection andother technologies, and actively promoted the implementation of smart quality inspection techniques. The visual quality inspectionsystem adopts automated optical detection technology. After comparing the inspection image of products with the standard image,the quality of products can be quickly distinguished, and non-conforming products can be intercepted in time. This system caneffectively eliminate the interference of human factors such as the negligence of manual detection and different quality inspectionstandards of different inspectors, ensure the stability, repeatability and accuracy of the inspection results, and guarantee thedelivery quality. Meanwhile, the quality inspection personnel can track the quality inspection status of product appearance, sizeand function according to the color blocks in different areas of the intelligent patrol inspection system. They can also quickly identifynon-conforming products and the reasons based on product categories and system color prompts. With this system, the cost andtime required for manual inspection and abnormal problem classification are effectively reduced, and the efficiency of processquality control is improved.
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Appendix
Assurance Report
Independent Assurance Statement
Introduction:
T?V Rheinland (Guangdong) Ltd., member of T?V Rheinland Group, Germany (hereinafter “T?V”,“We”) has been entrusted by the management of Luxshare Precision Industry Company Limited(hereinafter “Luxshare”, “the Company”) to conduct independent assurance of Luxshare’s 2022Sustainability Report (hereinafter “the Report”). All contractual contents for this assuranceengagement rest entirely within the responsibility of Luxshare. Our task was to give a fair and adequatejudgment on the Report.The intended users of this assurance statement are stakeholders who have relevance to the Luxshare’soverall Sustainability Performance and impacts of its business activities during year 2022 (1 January2022 ~ 31 December 2022). T?V Rheinland is a global service provider of Corporate SocialResponsibility (CSR) & Sustainability Services in over 65 countries, having qualified professionals in thefield of Corporate Sustainability Assurance, Environment, Social and Stakeholder Engagement. Wehave maintained complete impartiality and independence during the assurance engagement, and notbeen involved in the preparation of the Report contents.Assurance Standard:
This assurance engagement was performed in accordance with the AA1000 Assurance Standard(AA1000AS v3), and based on the AA1000AP Principles of Inclusivity, Materiality, Responsiveness andImpact.Scope & Type of Assurance:
Our assurance engagement covers the following:
? Reporting in accordance with the GRI Sustainability Reporting Standards (GRI Standards) 2021,and information and data related to economics, environment & social, and material topics andsustainability performance disclosed in the Report, also defined within reporting boundaries.? The CSR Guideline for Listed Company issued by the Shenzhen Stock Exchange.? ISO 26000: Guidance on Social Responsibility.? Evaluation of disclosed information and data in the Report as per the Assurance Standards.? Type-1, Moderate Assurance Level as per the AA1000AS v3.
Limitations:
The assurance was conducted based on a moderate level of assurance under the AA1000AS forengagement. Information and performance data subject to assurance is limited to the contents of theReport.The assurance did not cover financial data such as the income statement and cash flow statement,technical descriptions of buildings, equipment and production processes or other information notrelated to sustainability.Assurance Methodology:
T?V has challenged the Report contents supported by documentary evidence and managementrepresentations, and assessed the processes undertaken by Luxshare from source to aggregation indisclosure of information and data pertaining to sustainability performance. Our judgment is madebased on the objective review of reported information against the assurance criteria and the AA1000Assurance Standards, including AA1000 AccountAbility Principles of inclusivity, materiality,responsiveness, and impact.Analytical methods and the performance of interviews as well as data verification were used on asample basis, to verify and validate the correctness of reported data and contents in light of contractualagreement and the factual Luxshare sustainability strategy, governance, stakeholder engagement, andmaterial topics determination process as mentioned in the Report.Our work covered interviews with Luxshare’s representatives including senior management atexecutive and functional levels and relevant management personnel responsible for collection,aggregation, analysis, internal review, and reporting the disclosures, to assess the effectiveness ofprocesses used. The approach deemed to be appropriate for the purpose of assurance of the Reportsince all data therein could be verified through original proofs and/or verified database entries.The assurance was performed by our multidisciplinary team of experienced professionals in the field ofCorporate Sustainability, Environment, Social and Stakeholder Engagement. We are of the opinion thatour work offers a sufficient and substantiated basis to enable us to come to a conclusion mentionedbelow and based on the content of our contract.
Adherence to the AA1000 AccountAbility Principles:
Inclusivity:
Luxshare has identified key stakeholders, including government and supervision organization,shareholders and investors, suppliers, cooperation partners, customers, employees, communities, andmedias, and communicates with them to have understanding of the issues they concerned via multiplechannels covering public Hotmail and complaint hotline for actions.Materiality:
Luxshare implements a materiality determination process that involves both internal and externalstakeholders to reflect on material issues. Those material sustainability issues are identified by
considering internal operational goals, industrial benchmarking, and impacts in business activities,expert opinion, and latest trend of ESG management. Luxshare has also conducted stakeholder surveyin 2022 about material issues, and eventually assured and prioritized its material topics based on theirpotential impacts. The company conducted impact analysis and risk assessment for those topics, anddisclosed them in the Report, focusing on environment, climate change risks and opportunities, laborrights protection, chemical safety, and responsible supply chain management, etc.Responsiveness:
Luxshare has a variety of channels such as industrial associations, customer conferences, audits andemployee trainings, etc. to communicate with its stakeholders about concerns on sustainability.Grievance mechanism is in place for investigating, assessing, resolving and monitoring of grievancesfrom those affected by the activities of Luxshare, and the company can give responses to stakeholdersin a timely, fair and appropriate manner. Luxshare shares progress information about remedial actionswith stakeholders (e.g., IPE, China Green Supply Chain Alliance) during regular communications, toensure effectiveness of its process and remedial actions. The company disclosed corporatesustainability strategy and policies, corporate governance, sustainability goals and status, impactanalysis in its value chain, and quantized sustainability performance data, etc. in the Report.Impact:
Luxshare implements a sustainability strategy that is comprised of key sustainability goals and progressmeasurement both qualitatively and quantitatively that aligns with United Nations SustainableDevelopment Goals (SDGs). Impact analysis focusing on environment, social and governance ispresented in the Report, indicating that material sustainability topics (especially climate action, GHGemissions, labor rights, occupational health and safety, etc.) have impacts in the activities of its valuechain. Luxshare has integrated its policies and commitments associated with material topics, andresponsible business code into its business activities and business relations. The company conducts riskassessment on its strategy, operation and compliance, and carries out internal control includinggrievance and remediation mechanisms, to manage potential negative impacts on its businessoperation.
Conclusion:
In conclusion, we can mention that no instances or information came to our attention that would be tothe contrary of the statement made below:
? Luxshare’s 2022 Sustainability Report meets the requirements of Type-1, Moderate Assurance
Level according to the AA1000AS v3, and follows the reporting requirements in accordancewith the GRI Standards.? The Report includes statements and claims that can reflect Luxshare’s sustainabilityachievements and challenges supported by documentary evidence and internal records.? The performance data we found in the Report are collected, aggregated and analyzed in a
systematic and professional manner, which can be assessed by supporting evidence.
? T?V Rheinland shall not bear any liability or responsibility to a third party for perception anddecision about Luxshare based on this Assurance Statement.
Daniel PanCorporate Sustainability Service Technical Manager
T?V Rheinland (Guangdong) Ltd
10 April 2023, Guangzhou, China
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
Environmentally
Friendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Key Performance DataEnvironmental Performance Table
1, 2IndicatorUnit2022GRI 302-1 Energy consumption within the organization
3, 4
Non-renewable energy consumptionMWh268,068.10GasolineMWh 3,733.51 Diesel oilMWh5,243.06Liquefied petroleum gasMWh 1,225.21Natural gasMWh 257,866.32Renewable energy consumptionMWh40,545.00Biomass energy (including light white oil, ethanol gasoline and alcohol-based fuels, etc.)
MWh444.28 Solar PV power generation for self-useMWh40,100.72Purchased municipal electricityMWh2,705,689.25Total solar PV power generationMWh41,021.89Purchased green electricityMWh271,619.41Purchased green certificatesMWh301,490.00
Unless otherwise specified, the statistical scope of environmental performance data covers all production bases of the Company.
In the calculation of emissions, energy consumption and waste density, the operating revenue unit is RMB1 million for the current year.
The Company’s main energy consumption sources are natural gas, gasoline, diesel, liquefied petroleum gas, power generated by self-owned renewableenergy facilities, outsourced electricity from municipal power supply, outsourced clean energy and outsourced steam.
Data of the energy consumption in 2022 is based on the electricity and fuel consumption and relevant conversion factors provided by the General Rules forCalculation of Comprehensive Energy Consumption (GB/T 2589-2020).
IndicatorUnit2022Purchased steamMWh37,496.01Solar PV power soldMWh921.17Emission rights obtained via investment in Clean Energy FundMWh26,463.96Total energy consumptionMWh3,051,798.36GRI 302-3 Energy intensityEnergy consumption intensity per unit of business revenueMWh/RMB1 million14.26Electricity consumption intensity per unit of business revenueMWh/RMB1 million12.83GRI 302-4 Reduction of energy consumptionAnnual electricity savingsMWh189,975.21Installed photovoltaic capacity
MW54.64GRI 303-3 Water withdrawalTotal water withdrawalML24,550.64 Surface waterML0.00 Amount of rainwater collectedML73.74 Groundwater (renewable)ML6.29
Installed photovoltaic capacity is the total installed photovoltaic capacity of the Company as the end of the Reporting Year.
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
IndicatorUnit2022 Groundwater (non-renewable)ML0.00 SeawaterML0.00 Extracted/entrained water/generated waterML0.00 Third-party water sourcesML24,470.61Total water withdrawals in areas under waterresources stress
ML4,204.99GRI 303-4 Water dischargeTotal water dischargeML 22,492.04 Total discharge to surface waterML0.00 Total discharge to groundwaterML0.00 Total discharge to seawaterML0.00Total discharge to third-party organizationML22,492.04Total industrial wastewaterML 6,111.67Total domestic sewage dischargeML 16,380.38Total discharge in areas under water resources stressML 3,773.17Times of administrative penalties for sewage discharge of the CompanyTimes0GRI 303-5 Water consumption
Total water consumption
ML2,058.60Recycled water in production processesML54.89Total water consumption in areas under water resources stressML431.82
After verifying the data of total water withdrawal and discharge in 2021, the total water consumption in 2021 was corrected to 1,653.74 megaliters, which was
obtained by subtracting the total water discharge from total water consumption.
IndicatorUnit2022GRI 305-1 Direct (Scope 1) GHG emissionsTotal Scope 1 Greenhouse Gas emissionsMetric tons of CO
equivalent82,335.27Total CO
emissionsMetric tons of CO
equivalent57,357.86Total CH
emissionsMetric tons of CO
equivalent23,583.89Total N
O emissionsMetric tons of CO
equivalent150.21Total HFCs emissionsMetric tons of CO
equivalent1,243.31Total PFCs emissionsMetric tons of CO
equivalent0.00Total SF
emissionsMetric tons of CO
equivalent0.00Total NF
emissionsMetric tons of CO
equivalent0.00Biogenic CO
emissionsMetric tons of CO
equivalent0.00GRI 305-2 Energy indirect (Scope 2) GHG emissions
Total (Location-based) Scope 2 GreenhouseGas emissions
Metric tons of CO
equivalent1,693,867.06Total (Market-based) Scope 2 GreenhouseGas emissions
Metric tons of CO
equivalent1,323,990.25
GRI 305-3 Other indirect (Scope 3) GHG emissions
Total Scope 3 Greenhouse Gas emissionsMetric tons of CO
equivalent1,388,277.91Category 1: Purchased Goods and ServicesMetric tons of CO
equivalentCategory 2: Capital GoodsMetric tons of CO
equivalent120,928.80Category 3: Fuel and Energy-related Activities (excluded in Scope 1or Scope 2)
Metric tons of CO
equivalent
Environmental Performance Table (continued)
About LuxsharePrecision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
IndicatorUnit2022Category 4: Upstream Transportation and DistributionMetric tons of CO
equivalentCategory 5: Waste Generated in OperationsMetric tons of CO
equivalent36,849.47Category 6: Business TravelMetric tons of CO
equivalent3,725.36Category 7: Employee CommutingMetric tons of CO
equivalent42,519.79Category 8: Upstream Leased AssetsMetric tons of CO
equivalentCategory 9: Downstream Transportation and DistributionMetric tons of CO
equivalent1,184,254.49Category 10: Processing of Sold ProductsMetric tons of CO
equivalentCategory 11: Use of Sold ProductsMetric tons of CO
equivalentCategory 12: End-of-life Treatment of Sold ProductsMetric tons of CO
equivalentCategory 13: Downstream Leased AssetsMetric tons of CO
equivalentCategory 14: FranchisesMetric tons of CO
equivalentCategory 15: InvestmentsMetric tons of CO
equivalent
GRI 305-4 GHG emissions intensity
Total Scope 1 & Scope 2 (Location-based) Greenhouse Gas EmissionsMetric tons of CO
equivalent1,776,202.33Total Scope 1 & Scope 2 (Market-based) Greenhouse Gas EmissionsMetric tons of CO
equivalent1,406,325.52Scope 1 & Scope 2 (Location-based) Greenhouse Gas Emission IntensityMetric tons of CO
equivalent/RMB1 million
8.30
Scope 1 & Scope 2 (Market-based) Greenhouse Gas Emission IntensityMetric tons of CO
equivalent/RMB1 million
6.57
IndicatorUnit2022Scope 1 Greenhouse Gas Emission IntensityMetric tons of CO
equivalent/RMB1 million
0.38
Scope 2 (Location-based) Greenhouse Gas Emission IntensityMetric tons of CO
equivalent/RMB1 million
7.91
Scope 2 (Market-based) Greenhouse Gas Emission IntensityMetric tons of CO
equivalent/RMB1 million
6.19
GRI 305-5 Reduction of GHG emissionsTotal reduction of GHG emissionsMetric tons of CO
equivalent512,010.64
GRI 305-7 Nitrogen Oxides (NO
x
), Sulfur Oxides (SO
x
), and other significant air emissions
Total exhaust gas emissions
Metric ton304.75 Boiler exhaust gasMetric ton5.48 Kitchen fumeMetric ton5.15 Industrial exhaust gasMetric ton258.77 NOx (Nitrogen Oxides) emissionsMetric ton6.03 Sox (Sulfur Oxides) emissionsMetric ton1.13 Persistent organic pollutant (POP) emissionsMetric ton0.00 VOC (volatile organic compound) emissionsMetric ton95.18 Sulfuretted hydrogen emissionsMetric ton0.56 Particulate matter emissionsMetric ton118.07 Tin and its compounds emissionsMetric ton37.80 Other exhaust gas emissionsMetric ton35.35
Due to the nature of the Company’s business, exhaust gases mainly include boiler exhaust gas, kitchen fume and industrial exhaust gas.
Environmental Performance Table (continued)
Note: Due to the nature of the Company’s business, greenhouse gas emissions mainly come from outsourced municipal electricity, outsourced steam and fossil
fuel combustion. The list of greenhouse gases includes carbon dioxide, methane and nitrous oxide, hydrofluorocarbons. Greenhouse gas emissionsare presented in terms of carbon dioxide equivalent. Greenhouse gases in 2022 are based on the General Rules for Calculation of ComprehensiveEnergy Consumption (GB/T 2589-2020) promulgated by the State Administration for Market Regulation and the Standardization Administration of China,IPCC Sixth Assessment Report issued by the Intergovernmental Panel on Climate Change (IPCC), the Guide to Accounting Methods and Reportingof Greenhouse Gas Emissions from Enterprises in Other Industrial Sectors (for Trial Implementation) and the International Energy Agency (IEA) poweremission factors. Some Scope 3 GHG emissions are based on the Greenhouse gas reporting: conversion factors 2022 promulgated by the Departmentfor Business Innovation and Skills (BIS) and Department for Environment, Food and Rural Affairs (DEFRA).
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
IndicatorUnit2022GRI 306-3 Waste generated
Overall waste generatedMetric ton154,368.43 Hazardous waste generated
Metric ton39,100.72 Non-hazardous waste generated
Metric ton100,819.82 Domestic waste generated
Metric ton14,447.89GRI 306-4 Waste diverted from disposal
Total amount of waste recoveredMetric ton104,007.10Amount of hazardous waste recoveredMetric ton13,319.50Amount of hazardous waste transferred for reuseMetric ton1,316.29Amount of hazardous waste transferred for recyclingMetric ton12,003.21Amount of hazardous waste transferred to other recovery operationsMetric ton0.00Amount of non-hazardous waste recoveredMetric ton86,181.94Amount of non-hazardous waste transferred for reuseMetric ton46,826.46Amount of waste reused off-siteMetric ton3,145.13Amount of waste reused on-siteMetric ton43,681.33Amount of non-hazardous waste transferred for recyclingMetric ton39,355.48Amount of non-hazardous waste transferred for other recovery
operations
Metric ton0.00Amount of domestic waste recoveredMetric ton4,505.66Amount of domestic waste transferred for reuseMetric ton0.00Amount of domestic waste transferred for recyclingMetric ton4,505.66
Hazardous wastes include waste organic solvents, waste mineral oil, waste chemical containers, etc.
Non-hazardous wastes include general industrial waste such as waste plastics, waste paper and waste metal.
Domestic wastes include non-recyclable household waste, mixed recyclable household waste and kitchen waste.
The disposal method of non-hazardous waste transferred for reuse is divided into off-site and on-site, and the other disposal methods of waste diverted fromdisposal are off-site.
Environmental Performance Table (continued)
IndicatorUnit2022Amount of domestic waste transferred for other recovery operationsMetric ton0.00GRI 306-5 Waste directed to disposal
Total amount of waste directed to disposalMetric ton50,361.27 Amount of hazardous waste directed to disposalMetric ton25,781.16Amount of hazardous waste directed to disposal by incineration (with
energy recovery)
Metric ton797.07Amount of hazardous waste directed to disposal by incineration
(without energy recovery)
Metric ton0.00Amount of hazardous waste directed to disposal by landfillingMetric ton0.00Amount of hazardous waste directed to disposal by other disposalmethods
Metric ton24,984.09Amount of non-hazardous waste directed to disposalMetric ton14,637.88Amount of non-hazardous waste directed to disposal by incineration
(with energy recovery)
Metric ton6,530.28Amount of non-hazardous waste directed to disposal by incineration
(without energy recovery)
Metric ton0.00Amount of non-hazardous waste directed to disposal by landfillingMetric ton0.00Amount of non-hazardous waste directed to disposal by other
disposal methods
Metric ton8,107.61Amount of domestic waste directed to disposalMetric ton9,942.23Amount of domestic waste directed to disposal by incineration (withenergy recovery)
Metric ton5,733.80Amount of domestic waste directed to disposal by incineration
(without energy recovery)
Metric ton0.00Amount of domestic waste directed to disposal by landfillingMetric ton0.00Amount of domestic waste directed to disposal by other disposal
methods
Metric ton4,208.43 Amount of waste directed to disposal off-siteMetric ton3,955,52 Amount of waste directed to disposal on-siteMetric ton252.91
The other disposal methods of domestic waste directed to disposal are divided into offsite and onsite, and the other disposal methods of hazardous waste andnon-hazardous waste are onsite, while the disposal methods of the remaining wastes directed to disposal are offsite.
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Social Performance Table
IndicatorUnit2022GRI 2-6 Activity, value chain and other business relationsTotal number of suppliers in the database
Supplier10,680 Overseas suppliersSupplier1,869 Chinese suppliersSupplier8,811 Service suppliersSupplier2,403 Suppliers of raw and auxiliary materialsSupplier8,277GRI 2-7 EmployeesTotal number of employeesPerson236,932 Employees aged 29 or belowPerson114,915 Employees between 30 and 49Person120,244 Employees aged 50 or abovePerson1,773 Male employeesPerson134,768 Female employeesPerson102,164 Employees from Chinese MainlandPerson187,784 Employees from Hong Kong, Macao and Taiwan regions Person1,350Overseas employees (excluding employees from Hong Kong, Macao
and Taiwan regions)
Person47,798Total number of indirect laborPerson69,801Total number of direct laborPerson167,131
The data of “Total number of suppliers in the database”, “Overseas suppliers” by regions, “Chinese suppliers”, “Service suppliers” by type, and “Suppliers ofraw and auxiliary materials” in the 2021 sustainability report were corrected in the report of this year. Among them, there are 1,057 overseas suppliers, 7,210Chinese suppliers, 455 service suppliers and 7,812 suppliers of raw and auxiliary materials.
IndicatorUnit2022Total number of long-term employees
Person236,932Total number of temporary employeesPerson0Total number of full-time employees Person236,932Total number of part-time employees Person0
GRI 2-28 Membership associations
Total number of important associations participated inAssociation32
GRI 201-1 Direct economic value generated and distributedAmount of operating revenue RMB1 million214,028.39Operating revenue growth compared with previous year%39.03
GRI 201-2 Financial implications and other risks and opportunities due to climate change
Premiums of Property All Risks Insurance (Compensated amount ofinsurance)
RMB10,0004,039,585.09Annual premiums for Property All Risks InsuranceRMB10,000347.40Investment in Clean Technology/Near RMB260
millionInvestment goal in Clean Technology in 2023/Over RMB300
million
GRI 205-1 Operations assessed for risks related to corruption
Percentage of the subsidiaries conducting internal risk assessment ofintegrity/anti-corruption this year
%100GRI 205-2 Communication and training about anti-corruption policies and proceduresNumber of employees signing the letter of integrity commitment/signingthe letter of integrity notice
Person236,932
In accordance with the labor-related laws, regulations and practices of the place of operation, we conduct classified statistics on long-term employees andtemporary employees.
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
IndicatorUnit2022Number of governance bodies’ members signing the letter of integritycommitment/signing the letter of integrity notice
Person12 Chinese Mainland%66.67 Hongkong, Macao and Taiwan regions %33.33 Overseas (excluding Hongkong, Macao and Taiwan regions)%0.00Number of general employees signing the letter of integritycommitment/signing the letter of integrity notice
Person236,920 Chinese Mainland%79.26 Hongkong, Macao and Taiwan regions %0.57 Overseas (excluding Hongkong, Macao and Taiwan regions)%20.17
Number of direct labor signing the letter of integrity commitment/signing the letter of integrity notice
%70.54Number of indirect labor signing the letter of integrity commitment/signing the letter of integrity notice
%29.46Number of suppliers signing the Letter of Integrity CommitmentSupplier10,540 Chinese Mainland%83.60 Hongkong, Macao and Taiwan regions %9.02 Overseas (excluding Hongkong, Macao and Taiwan regions)%7.38 Service suppliers%22.50 Suppliers of raw and auxiliary materials%77.50Total number of employees receiving anti-corruption trainingsPerson236,932Number of governance bodies’ members receiving anti-corruptiontrainings
Person12 Chinese Mainland%66.67
IndicatorUnit2022 Hongkong, Macao and Taiwan regions %33.33 overseas (excluding Hongkong, Macao and Taiwan regions)%0.00 Number of general employees receiving anti-corruption trainingsPerson236,920 Chinese Mainland%79.26 Hongkong, Macao and Taiwan regions %0.57 overseas (excluding Hongkong, Macao and Taiwan regions)%20.17 Number of direct labor trained%70.54 Number of indirect labor trained%29.46Total number of employees receiving anti-corruption trainingsPerson-times313,498Total hours of anti-corruption trainingsHour959,488.00
GRI 205-3 Confirmed incidents of corruption and actions taken
Times of internal corruption whistleblowing receivedEvent12Total number of confirmed incidents of corruptionEvent4Total number of the confirmed events (among which the employees werefired or disciplined due to the corruption)
Event3Total number of the confirmed events (where the contract with businesspartners was terminated or unrenewed due to the violations related tocorruption)
Event1Confirmed legal actions involving company and employee corruptionEvent0Corruption litigation concluded involving the Company and employeesTimes0Compensation amount of corruption litigation concluded involving theCompany and employees
RMB0.00
Social Performance Table (continued)
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
IndicatorUnit2022GRI 206-1 Legal actions for anti-competitive behavior, anti-trust, and anti-monopoly practicesConfirmed anti-unfair competition, antitrust and anti-monopoly lawsuitEvent0Compensation amount of anti-unfair competition, anti-trust and anti-monopoly lawsuit concluded involving the Company
Event0Compensation amount of anti-unfair competitive conduct, antitrust andantitrust practices concluded involving the Company
RMB0.00
GRI 401-1 New employee hires and employee turnover
Turnover of indirect labor (Loss of employees include quitting, dismissedand fired employees)
%18.74
GRI 401-3 Parental leave
Number of employees having rights of parental leave (male)Person134,768Number of employees actually using parental leave (male)Person3,988Number of employees having rights of parental leave (female)Person102,164Number of employees actually using parental leave (female)Person2,536GRI 403-5 Worker training on occupational health and safetyTotal hours of EHS trainingHour2,505,922.00Total number of employees receiving EHS trainingPerson119,089Total person-times of employee receiving EHS trainingPerson-times349,882Total hours of Board of Directors members receiving EHS trainingHour14.00
Turnover of employees is calculated by: Number of turnover employees in this category / (Number of employees of this category at the end of the year +Number of turnover employees in this category).
The parental leave mentioned in this article includes the statutory rights and interests such as childcare leave, maternity leave, and paternity leave equallygranted to employees in accordance with the relevant laws and regulations of the place where it operates.
IndicatorUnit2022Total number of Board of Directors members receiving EHS trainingPerson7Total person-times of Board of Directors members receiving EHS trainingPerson-times7
GRI 403-8 Workers covered by an occupational health and safety management system
Number of employees in the operational sites with occupational healthand safety management system
Person236,932Proportion of employees in the operational sites with occupational healthand safety management system
%100.00Number of employees in the operational sites with occupational healthand safety management system having passed internal audit
Person236,932Proportion of employees in the operational sites with occupational healthand safety management system having passed internal audit
%100.00Number of employees in the operational sites with occupational healthand safety management system having passed external audit
Person184,479Proportion of employees in the operational sites with occupational healthand safety management system having passed external audit
%77.86
GRI 403-9 Work-related injuriesGRI 403-10 Work-related ill healthTotal working hours (Total working hours of all employees)Million hours471.97Number of fatalities due to work-related injuriesPerson0Rate of fatalities due to million-hour work-related injuriesTimes/Million Hours0Number of serious injuries due to work-related injuriesPerson-times1
Social Performance Table (continued)
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
IndicatorUnit2022
Rate of million-hour work-related injuries with serious consequencesTimes/Million hours0.0021Number of work-related injuries other than the above fatalities andserious injuries
Times268Total number of recorded employee injuriesTimes269Rate of recorded work-related injuries per million working hoursTimes/Million hours0.57GRI 404-1 Average hours of training per year per employee
1, 2Total hours of employee trainedHour10,715,691.29 Total hours of male employees trainedHour6,107,944.04 Total hours of female employees trainedHour4,607,747.26 Total hours of direct labor trainedHour1,901,896.00 Total hours of indirect labor trainedHour8,813,795.29Average employee training hoursHour45.23
Average male employee training hoursHour45.32Average female employee training hoursHour45.10Average direct labor training hoursHour11.38Average indirect labor training hoursHour126.27Total person-times of employees trainedPerson-times1,958,541
Average employee training hour is calculated by: Total training hours provided for the employees in this category/Total number of the employees in thiscategory.
Total hours of employee trained, Average employee training hours, Total number of employees trained, and total person-times of employees trained are allrecorded in the online learning platform “i School” system.
IndicatorUnit2022GRI 404-2 Programs for upgrading employee skills and transition assistance programsTotal training expenseRMB10,0001,309.48Number of employees enrolling in academic educationPerson860Total number of internally certified instructorsPerson909GRI 404-3 Percentage of employees receiving regular performance and career development reviews
Percentage of indirect labor receiving regular performance and careerdevelopment reviews
%100.00Percentage of male indirect labor receiving regular performance and careerdevelopment reviews
%71.28Percentage of female indirect labor receiving regular performance and careerdevelopment reviews
%28.72
GRI 405-1 Diversity of governance bodies and employees
Total number of governance bodies’ membersPerson12 Number of male governance bodies’ membersPerson6 Proportion of male governance bodies’ members%50.00 Number of female governance bodies’ membersPerson6 Proportion of female governance bodies’ members%50.00 Number of governance bodies’ members aged 29 or belowPerson0 Proportion of governance bodies’ members aged 29 or below%0.00
The statistical scope of this indicator is the number of indirect labor who receive regular performance and career development appraisals and the percentage
of them by gender. This indicator is not applicable to direct labor because performance appraisals of direct labor are conducted in a flexible manner.
Social Performance Table (continued)
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
IndicatorUnit2022 Number of governance bodies’ members aged between 30 and 49Person5 Proportion of governance bodies’ members aged between 30 and 49%41.67 Number of governance bodies’ members aged 50 or abovePerson7 Proportion of governance bodies’ members aged 50 or above%58.33Number of governance bodies’ members with previous riskmanagement background
Person0Proportion of governance bodies’ members with previous risk
management background
%0.00Number of governance bodies’ members with previous industry
management background
Person6Proportion of governance bodies’ members with previous industry
management background
%50.00Number of governance bodies’ members with previous law
management background
Person2Proportion of governance bodies’ members with previous law
management background
%16.67Proportion of employees aged 29 or below%48.50Proportion of employees between aged 30 and 49%50.75Proportion of employees aged 50 or above%0.75Proportion of male employees %56.88Proportion of female employees %43.12Proportion of disabled employees %0.17
IndicatorUnit2022GRI 308-1 New suppliers that were screened using environmental criteriaGRI 308-2 Negative environmental impacts in the supply chain and actions takenGRI 414-1 New suppliers that were screened using social criteriaGRI 414-2 Negative social impacts in the supply chain and actions takenNumber of new suppliersSupplier2,389Percentage of new suppliers subject to audit of environmental and socialstandards (CSR audit)
%100.00Number of suppliers completing environmental and social audits (CSRaudit) in 2022
Supplier2,451 Number of suppliers completing audit on-siteSupplier800Number of suppliers having significant, actual and potential negativeenvironmental and social impacts confirmed
Supplier1 Percentage of suppliers agreeing to improvements after assessments%0.00 Number of suppliers terminating relationships after assessmentsSupplier1 Percentage of suppliers terminating relationships after assessments%100.00
GRI 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer dataSubstantiated complaints concerning breaches of customer privacy andlosses of customer data
Event0
Social Performance Table (continued)
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Summary of Honors of Each Factory
Company NameName of HonorLevelLuxshare Precision Industry (Chuzhou) Co., Ltd.National-level Green FactoryNationalShenZhen Luxshare Electroacoustic Technology Co., Ltd.Certificate Level III in Smart ManufacturingNationalFujian J.k Wiring Systems Co., Ltd.National Intellectual Property Advantage
Enterprise
NationalASAP Technology (Jiangxi) Co., Ltd. Awarded National Enterprise Technology
Centre
NationalLanto Electronic LimitedTop 100 Electronic Information Enterprises in
China in 2022
NationalLanto Electronic LimitedMaturity Level III AssessmentNationalLuxshare Electronic Technology (Kunshan) Co., Ltd.Top 100 Electronic Information Enterprises in
China in 2022
NationalLuxshare Electronic Technology (Kunshan) Co., Ltd.2022 Special Contribution Enterprise for
Promoting High Quality Development of Smalland Medium-sized Cities
NationalLuxshare-ICT (Vietnam) LimitedTypical Company for Service of the Workforce
in 2022
ProvincialLuxshare-ICT (Nghe An) Co., Ltd.Award for Contribution to the Development of
the Local Economy and Society
ProvincialLuxshare-ICT (Van Trung) Company Limited. 2022 Excellent Enterprises for Welfare for
Employees
ProvincialLuxshare Precision Industry (Baoding) Co., Ltd.Science and Technology SME in Hebei
Province
ProvincialKunshan Luxshare RF Technology Co., Ltd.Provincial Enterprise Technology Centre of
Jiangsu Province
ProvincialASAP Technology (Jiangxi) Co., Ltd.Second Prize of Jiangxi Province Outstanding
New Product
ProvincialASAP Technology (Jiangxi) Co., Ltd.Third Prize of Jiangxi Province Excellent New
Product
ProvincialASAP Technology (Jiangxi) Co., Ltd.Awarded the Jiangxi Province “Sea Wisdom
Workstation”
ProvincialJiangxi ASAP Electronic Co., Ltd.Jiangxi “Specialized and New” SME in 2021ProvincialJiangxi ASAP Electronic Co., Ltd.Third Prize of Jiangxi Province Excellent New
Product
ProvincialJiangxi Luxshare Smart Manufacturing Co., Ltd.First prize of Jiangxi Province Excellent New
Product
Provincial
Company NameName of HonorLevelJiangxi Luxshare Smart Manufacturing Co., Ltd.Special Award for Excellent and Powerful
Enterprises of Jiangxi Province in 2019-2021
ProvincialJiangxi Luxshare Smart Manufacturing Co., Ltd.No. 14 in Jiangxi Top 100 Private Enterprises in
2022
ProvincialJiangxi Luxshare Smart Manufacturing Co., Ltd.No. 11 in Jiangxi Top 100 Manufacturing
Private Enterprises in 2022
ProvincialJiangxi Luxshare Smart Manufacturing Co., Ltd.Jiangxi Technology Innovation Center for
Intelligent Bluetooth Earphone and WearableTerminal Equipment
ProvincialLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Model Project of Transformation of Production
and Manufacturing Methods in ZhejiangProvince in 2022
ProvincialLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Top 100 Private Enterprises in Zhejiang in 2022ProvincialLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Jiangsu Top 100 Manufacturing Industry
Enterprise
ProvincialLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Zhejiang Developing Enterprise for “Eagle
Action”
ProvincialLuxshare Precision Industry (Enshi) Co., Ltd.Hubei Specialized New “Small Giant”ProvincialLuxshare Precision Industry (Enshi) Co., Ltd.High-tech Enterprise in Hubei ProvinceProvincialBozhou Lanto Electronic LimitedSmart Factory in Anhui ProvinceProvincialXiexun Electronic (Ji’an) Co., Ltd.Awarded the Provincial Advanced Unit for
Accelerating Industrial Development andAccelerating the Rise of Industry from 2019 to2021
Provincial
Xiexun Electronic (Ji’an) Co., Ltd. (25th batch) Provincial Enterprise Technology
Centre in Jiangxi Province in 2022
ProvincialXuancheng Luxshare Precision Industry Co., Ltd.Provincial Smart FactoryProvincialXuancheng Luxshare Precision Industry Co., Ltd.Provincial Industrial Design CenterProvincialHuzhou Jiuding Electronic Co., Ltd.Provincial Engineering Research CenterProvincialHuzhou Jiuding Electronic Co., Ltd.“Boutiques Made in Zhejiang” in 2021ProvincialHuzhou Jiuding Electronic Co., Ltd.Model Project of Transformation of Production
and Manufacturing Methods in in 2022
Provincial
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
Company NameName of HonorLevelShanxi Luxshare Precision Industry Co., Ltd. May Day Labor Award in Shanxi ProvinceProvincialMeite Technology (Suzhou) Co., Ltd.Provincial Internet Benchmark FactoryProvincialMeite Technology (Suzhou) Co., Ltd.Provincial Star-level Cloud EnterpriseProvincialLanto Electronic Limited.Standardization pilot of strategic emerging
industries in Jiangsu Province
ProvincialLanto Electronic Limited.Provincial engineering technology research
center evaluation-excellent
ProvincialLanto Electronic Limited.Jiangsu Quality Benchmark in 2022ProvincialLanto Electronic Limited.Jiangsu Province Corporate Social
Responsibility Construction Exemplary List
ProvincialLanto Electronic Limited.Jiangsu Top 100 Manufacturing EnterprisesProvincialLuxshare Precision Components (Kunshan) Co., Ltd.Jiangsu Province Corporate Social
Responsibility Construction Model List
ProvincialLuxshare Precision Components (Suzhou) Co., Ltd.Private Science and Technology Enterprises in
Jiangsu Province
ProvincialRi Shan Computer Accessory (Jiashan) Co., Ltd.Municipal Green FactoryMunicipalLuxshare Smart Manufacture Technology (Changshu) Co., Ltd.Top 100 Tax PayersMunicipalLuxshare Smart Manufacture Technology (Changshu) Co., Ltd.Company with Outstanding ContributionsMunicipalLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Municipal Green FactoryMunicipalLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Jiaxing Top 100 Private Enterprise in 2021MunicipalLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Jiaxing Top 100 Private Enterprise for Profits in
2021
MunicipalLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Jiaxing Top 100 Private Enterprise for R&D
Investments in 2021
MunicipalLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Jiaxing Top 100 Private Enterprise for Foreign
Trade Exports in 2021
Municipal
Company NameName of HonorLevelLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Jiaxing Top 100 Private Enterprise with Social
Contributions in 2021
MunicipalLuxshare Smart Manufacturing (Zhejiang) Co., Ltd.Jiaxing Municipal Pilot Project for the
Integrated Development of AdvancedManufacturing and Modern Service Industries
MunicipalBozhou Lanto Electronic LimitedEnterprise Award for Outstanding Contribution
to Foreign Trade Import and Export
MunicipalXiexun Electronic (Ji’an) Co.,Ltd. Gian Municipal Enterprise Technology CenterMunicipalXiexun Electronic (Ji’an) Co.,Ltd. Municipal Expert WorkstationMunicipalXuancheng Luxshare Precision Industry Co., Ltd.Chairman Unit of Xuancheng Electronic
Information Industry Association
MunicipalXuancheng Luxshare Precision Industry Co., Ltd.Standing Committee Chairman Unit of
Xuancheng Industry Association for VehicleParts and Components
MunicipalXuancheng Luxshare Precision Industry Co., Ltd.Municipal Green FactoryMunicipalLuxshare Precision Industry (Suzhou) Co., Ltd.Advanced Enterprise for Industry Revenue in
2021 in Wuzhong District
MunicipalLuxshare Precision Industry (Suzhou) Co., Ltd.Demonstration Enterprise for Intelligent
Transformation and Digital Transformation in2021 in Wuzhong District
MunicipalLuxshare Precision Industry (Suzhou) Co., Ltd.Suzhou Employment Practice Base for
University of Science and Technology TianpingCollege Student
MunicipalM&A Merry Electronics (Huizhou) Co., LTD.International Business Gold Customer in 2021MunicipalYongxin County Boshuo Electronics Co., Ltd.May Day Labor Award in Ji’an CityMunicipalLuxshare Electronic Technology (Kunshan) Co., Ltd.“Near zero carbon” factory in SuzhouMunicipal
Summary of Honors of Each Factory (continued)
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and Healthy
Operation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Content Index
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation
GRI 2: General Disclosures 20212-1 Organizational detailsCompany Profile2-2 Entities included in the organization’s sustainability reportingAbout This Report2-3 Reporting period, frequency and contact pointAbout This Report2-4 Restatements of information
Emission ManagementKey Performance Data2-5 External assuranceAssurance Report2-6 Activities, value chain and other business relationships
Company ProfileKey Performance Data2-7 EmployeesKey Performance Data2-8 Workers who are not employeesGRI Content Index2-8-a 2-8-b 2-8-c
Informationunavailable/incomplete
The Company respects the employees employed by all forms of employment, the data
statistics are incomplete for disclosure.2-9 Governance structure and compositionBoard of Directors and Committees2-10 Nomination and selection of the highest governance bodyBoard of Directors and Committees2-11 Chair of the highest governance bodyBoard of Directors and Committees2-12 Role of the highest governance body in overseeing the management ofimpacts
Board of Directors and Committees2-13 Delegation of responsibility for managing impactsBoard of Directors and Committees
Statement of use
Luxshare Precision Industry Company Limited has reported in accordancewith the GRI Standard for the period from January 1, 2022 to December31, 2022.
GRI 1 usedGRI 1: Foundation 2021
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation
2-14 Role of the highest governance body in sustainability reporting
Sustainability Governance Structureand Practice2-15 Conflicts of interestBoard of Directors and Committees2-16 Communication of critical concernsBoard of Directors and Committees2-17 Collective knowledge of the highest governance bodyBoard of Directors and Committees2-18 Evaluation of the performance of the highest governance bodyBoard of Directors and Committees2-19 Remuneration policiesBoard of Directors and Committees2-20 Process to determine remunerationBoard of Directors and Committees2-21 Annual total compensation ratioGRI Content Index2-21-a 2-21-b 2-21-c
Confidentialityconstraints
The Company actively promotes fairness in employee compensation, and disclosures
are omitted to protect employee privacy.2-22 Statement on sustainable development strategy
Responding to Global SustainableDevelopment Actions2-23 Policy commitmentsCommitment for Critical Goals2-24 Embedding policy commitmentsCommitment for Critical Goals2-25 Processes to remediate negative impactsStakeholder Communication2-26 Mechanisms for seeking advice and raising concernsStakeholder Communication2-27 Compliance with laws and regulationsIntegrity in Management2-28 Membership associations
Company ProfileKey Performance Data2-29 Approach to stakeholder engagement
Stakeholder CommunicationMaterial Issues Analysis Relevant toValue Chain2-30 Collective bargaining agreementsGRI Content Index2-30-a 2-30-b
Informationunavailable/incomplete
The Company complies with relevant laws and regulations and protects the
legitimate rights and interests of employees, which cannot be fully disclosed due to
the difficulty of accurate statistics.
GRI Content Index (continued)
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanationGRI 3: Material Topics 20213-1 Process to determine material topics
Material Issues Analysis Relevant toValue Chain3-2 List of material topics
Material Issues Analysis Relevant toValue ChainGRI 201: Economic Performance 20163-3 Management of material topics
Key Performance DataClimate Risks and OpportunitiesEmployee Benefits201-1 Direct economic value generated and distributedKey Performance Data201-2 Financial implications and other risks and opportunities due to climatechange
Climate Risks and OpportunitiesKey Performance Data201-3 Defined benefit plan obligations and other retirement plansGRI Content Index
201-3-a 201-3-b 201-3-c201-3-d 201-3-e
Informationunavailable/incomplete
The Company provides benefits and retirement plans for its employees in accordance
with laws and regulations, which cannot be accurately calculated and are therefore
omitted from this year’s disclosure.201-4 Financial assistance received from governmentCorporate GovernanceGRI 202: Market Presence 20163-3 Management of material topicsCompensation202-1 Ratios of standard entry level wage by gender compared to localminimum wage
GRI Content Index
202-1-a 202-1-b202-1-c 202-1-d
Confidentialityconstraints
The Company upholds the principle of “equal pay for equal work” and offers basic
salaries that are not lower than the local minimum wage, which are not disclosed
due to confidentiality requirements.202-2 Proportion of senior management hired from the local community
Develop Workplace LeadershipGRI Content Index
202-2-a
Confidentialityconstraints
The Company continues to promote a level of management diversity and localization
that is omitted from disclosure due to confidentiality requirements.
GRI Content Index (continued)
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanationGRI 205: Anti-corruption 20163-3 Management of material topics
Preventing the Risks of CorruptionStrengthening Integrity Construction205-1 Operations assessed for risks related to corruption
Preventing the Risks of CorruptionKey Performance Data205-2 Communication and training about anti-corruption policies andprocedures
Strengthening Integrity ConstructionKey Performance Data205-3 Confirmed incidents of corruption and actions taken
Preventing the Risks of CorruptionKey Performance DataGRI 206: Anti-competitive Behavior 20163-3 Management of material topicsFair Competition206-1 Legal actions for anti-competitive behavior, anti-trust, and monopolypractices
Fair CompetitionKey Performance DataGRI 207: Tax 20193-3 Management of material topicsCorporate Governance207-1 Approach to taxCorporate Governance207-2 Tax governance, control, and risk managementCorporate Governance207-3 Stakeholder engagement and management of concerns related to taxCorporate Governance207-4 Country-by-country reportingGRI Content IndexLuxshare Precision complies with the local requirements of each operating site and submits tax information to the local tax authorities.
GRI Content Index (continued)
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and Healthy
Operation Leads
to SustainableDevelopment
Environmentally
Friendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation
GRI 302: Energy 20163-3 Management of material topics
Energy Conservation TransformationIntelligent Energy Management302-1 Energy consumption within the organizationKey Performance Data302-2 Energy consumption outside of the organizationGRI Content Index302-2-a 302-2-b 302-2-c
Informationunavailable/incomplete
The estimation/statistics of energy consumption occurring in upstream and downstream
activities are not yet well developed and therefore can’t be accurately disclosed.302-3 Energy intensityKey Performance Data302-4 Reduction of energy consumption
Energy Conservation TransformationKey Performance Data302-5 Reductions in energy requirements of products and servicesGRI Content Index302-5-a 302-5-b 302-5-c
Confidentialityconstraints
Disclosure is omitted due to confidentiality requirements.GRI 303: Water and Effluents 20183-3 Management of material topics
Water Resources UtilizationWastewater Management303-1 Interactions with water as a shared resourceWater Resources Utilization303-2 Management of water discharge-related impactsWastewater Management303-3 Water withdrawalKey Performance Data303-4 Water dischargeKey Performance Data303-5 Water consumptionKey Performance Data
GRI Content Index (continued)
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation
GRI 305: Emissions 20163-3 Management of material topics
Greenhouse Gas Emission ManagementAir Pollutant Emission Management305-1 Direct (Scope 1) GHG emissions
Greenhouse Gas Emission ManagementKey Performance Data305-2 Energy indirect (Scope 2) GHG emissions
Greenhouse Gas Emission ManagementKey Performance Data305-3 Other indirect (Scope 3) GHG emissions
Greenhouse Gas Emission ManagementKey Performance Data305-4 GHG emissions intensity
Greenhouse Gas Emission ManagementKey Performance Data305-5 Reduction of GHG emissions
Energy Conservation TransformationKey Performance Data305-6 Emissions of ozone-depleting substances (ODS)Air Pollutant Emission Management305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant airemissions
Key Performance DataGRI 306: Waste 20203-3 Management of material topicsWaste Management306-1 Waste generation and significant waste-related impactsWaste Management306-2 Management of significant waste-related impactsWaste Management306-3 Waste generated
Waste Management
Key Performance Data
GRI Content Index (continued)
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation
306-4 Waste diverted from disposal
Waste ManagementKey Performance Data306-5 Waste directed to disposal
Waste ManagementKey Performance DataGRI 308: Supplier Environmental Assessment 20163-3 Management of material topics
Environmental and Social Responsibilityof Supply Chain308-1 New suppliers that were screened using environmental criteria
Environmental and Social Responsibilityof Supply ChainKey Performance Data308-2 Negative environmental impacts in the supply chain and actions taken
Environmental and Social Responsibilityof Supply ChainKey Performance DataGRI 401: Employment 20163-3 Management of material topics
Human Rights and Labor ManagementEmployee Benefits401-1 New employee hires and employee turnover
Key Performance DataGRI Content Index
401-1-a
Confidentialityconstraints
Only the annual turnover rate of indirect labor is disclosed here due to confidentiality
requirements.401-2 Benefits provided to full-time employees that are not provided totemporary or part-time employees
Employee Benefits401-3 Parental leave
Employee Benefits
Key Performance Data
GRI Content Index
401-3-c 401-3-d 401-3-e
Informationunavailable/incomplete
The Company provides parental leave for all employees. Some of the indicators in thisdisclosure are omitted this year because data management is still to be improved.
GRI Content Index (continued)
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leads
to SustainableDevelopment
EnvironmentallyFriendlyand Circular
Economy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation
GRI 402: Labor/Management Relations 20163-3 Management of material topicsHuman Rights and Labor Management402-1 Minimum notice periods regarding operational changesHuman Rights and Labor ManagementGRI 403: Occupational Health and Safety 20183-3 Management of material topicsEnsure Employees’ Safety403-1 Occupational health and safety management systemEnsure Employees’ Safety403-2 Hazard identification, risk assessment, and incident investigationEnsure Employees’ Safety403-3 Occupational health servicesEnsure Employees’ Safety403-4 Worker participation, consultation, and communication on occupationalhealth and safety
Focus on Employees’ Health403-5 Worker training on occupational health and safety
Ensure Employees’ Safety
Key Performance Data403-6 Promotion of worker healthFocus on Employees’ Health403-7 Prevention and mitigation of occupational health and safety impactsdirectly linked by business relationships
Ensure Employees’ Safety403-8 Workers covered by an occupational health and safety managementsystem
Ensure Employees’ Safety
Key Performance Data403-9 Work-related injuries
Ensure Employees’ Safety
Key Performance Data403-10 Work-related ill health
Ensure Employees’ Safety
Key Performance Data
GRI Content Index (continued)
AchieveGrowth andHappiness
TogetherAbout This ReportChairman’sStatement
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and Quality
ManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation
GRI 404: Training and Education 20163-3 Management of material topics
Focus on Employee DevelopmentDevelop Workplace LeadershipPerformance Assessment404-1 Average hours of training per year per employeeKey Performance Data404-2 Programs for upgrading employee skills and transition assistanceprograms
Focus on Employee DevelopmentDevelop Workplace LeadershipKey Performance Data404-3 Percentage of employees receiving regular performance and careerdevelopment reviews
Performance AssessmentGRI 405: Diversity and Equal Opportunity 20163-3 Management of material topics
Human Rights and Labor Management
Compensation405-1 Diversity of governance bodies and employees
Board of Directors and Committees
Human Rights and Labor Management
Key Performance Data405-2 Ratio of basic salary and remuneration of women to menGRI Content Index405-2-a 405-2-b
Confidentialityconstraints
The Company upholds the principle of “equal pay for equal work” and is committedto creating an equal and diverse workplace, disclosure of which is omitted due toconfidentiality requirements.
GRI Content Index (continued)
About LuxsharePrecision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
EnvironmentallyFriendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation
GRI 406: Non-discrimination 20163-3 Management of material topicsHuman Rights and Labor Management406-1 Incidents of discrimination and corrective actions takenHuman Rights and Labor ManagementGRI 407: Freedom of Association and Collective Bargaining 20163-3 Management of material topicsHuman Rights and Labor Management407-1 Operations and suppliers in which the right to freedom of associationand collective bargaining may be at risk
Human Rights and Labor ManagementGRI 408: Child Labor 20163-3 Management of material topicsHuman Rights and Labor Management408-1 Operations and suppliers at significant risk for incidents of child laborHuman Rights and Labor ManagementGRI 409: Forced or Compulsory Labor 20163-3 Management of material topics
Environmental and Social Responsibility
of Supply Chain409-1 Operations and suppliers at significant risk for incidents of forced orcompulsory labor
Human Rights and Labor ManagementGRI 413: Local Communities 20163-3 Management of material topicsImplement Community Involvement413-1 Operations with local community engagement, impact assessments, anddevelopment programs
Implement Community Involvement413-2 Operations with significant actual and potential negative impacts onlocal communities
Emission Management
Energy Management
Water Resources Management
GRI Content Index (continued)
About Luxshare
Precision
ResponsibilityGovernanceand ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
GRI Standards and Disclosure ItemsLocation
Omission/DescriptionsRequirement(s) OmittedReasonExplanation413-2 Operations with significant actual and potential negative impacts onlocal communities (continued)
Circular ProductionChemical ManagementHazardous Substance ManagementImplement Community InvolvementKey Performance DataGRI 414: Supplier Social Assessment 20163-3 Management of material topics
Environmental and Social Responsibilityof Supply Chain414-1 New suppliers that were screened using social criteria
Environmental and Social Responsibilityof Supply ChainKey Performance Data414-2 Negative social impacts in the supply chain and actions taken
Environmental and Social Responsibilityof Supply ChainKey Performance DataGRI 416: Customer Health and Safety 20163-3 Management of material topicsEnhance Quality Management416-1 Assessment of the health and safety impacts of product and servicecategories
Enhance Quality Management416-2 Incidents of non compliance concerning the health and safety impactsof products and services
GRI Content Index416-2-a 416-2-b
Confidentialityconstraints
The Company is committed to providing high quality and non-hazardous products, thedisclosure of which is omitted due to confidentiality requirements.GRI 418: Customer Privacy 20163-3 Management of material topicsPrivacy Protection418-1 Substantiated complaints concerning breaches of customer privacy andlosses of customer data
Privacy Protection
Key Performance Data
GRI Content Index (continued)
About Luxshare
Precision
ResponsibilityGovernance
and ValueConservation
Seek Step-wisePerfection ThroughIntelligent and QualityManufacturingStable and HealthyOperation Leadsto SustainableDevelopment
Environmentally
Friendlyand CircularEconomy
MakingResponsiblePurchase toDeliver ValueAppendix
Luxshare Precision 2022 Sustainability Report
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