LongShine Technology Co., Ltd. nvironmental, Social and Governance (ESG) Report 2021 1 3 5 LongShine Technology Purse Excellent Take Social Management and Advocate Responsibility and Repay Company Prole 10 Sustainable Development the Society Wholehearted Corporate Culture 12 Adhere to compliance and 32 Adhere to Low-Carbon Operation 60 Main Business 12 ecient management Intelligent Anti-Pandemic Activities 62 Sustainable Development 14 Innovative Product Quality 36 Management Management Assist Social Welfare 63 Strengthen Information Security 43 Management 2 Standardize Supplier Management 46 About This Report evelop Digital Future Prospect Technology and Lead A Low-Carbon Future 4 Adhere to People- Key Performance Indicator Enable Low-Carbon Energy Transition 20 Oriented Principle and Assist Employees Growth Chairman's Speech Lead A Convenient Low-Carbon Life 24 Feedback Form Protect The Interest of Employees 50 Support Employee Development 52 Care for Employees' Life 54 LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 05 About This Report This report is the rst Environmental, Social and Governance (ESG) Report issued by LongShine Technology Group Co., Ltd. Based on the principles of objectivity, standardization, transparency and comprehensiveness, it discloses in detail the practice and achievements of LongShine Technology in practicing sustainable development. Time Frame Abbreviation description The time frame of this report is from January 1, 2021 to December 31, 2021, with part of its contents trace back to For ease of expression and reading, LongShine Technology Group Co., Ltd. is also represented by 'LongShine previous years. Technology', 'company' and 'we' in this report. Organizational Scope Data Description This report takes LongShine Technology Group Co., Ltd. as the principal part, and further includes its branches, All information and data quoted in this report are quoted from the company's ocial documents, statistical subsidiaries and directly aliated organizations. records and nancial reports. The content of this report is provided by employees and partners of LongShine Technology. The sole purpose of this report is to disclose the progress of sustainable development management of LongShine Technology, not for commercial purposes. Compilation References This report is compiled and edited with extensive reference to the Guidelines for the Standardized Operation of Report acquisition Listed Companies of Shenzhen Stock Exchange, the Guidelines for the Disclosure of Environmental, Social E-mail:jiyue@longshine.com Responsibility and Corporate Governance Information of Listed Companies of Shenzhen Stock Exchange (Draft Address:18F, North Star Times Tower, No.8 Beichen East Road, Chaoyang District, Beijing for advice) and the Sustainable Development Report Standards issued by the Global Reporting Initiative (GRI Web site:https://www.longshine.com/ Standards). LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 07 Chairman's Speech Electricity eectively connected to 0.1 million lectric vehicles charging stations and provided services to 0.5 million electric vehicle users. In 2021, the number of charging stations connected to LongShine indiantu electric vehicle aggregation charging platform expanded to 0.3 million, serving over 2.1 million car owners, with an eight-fold increase in charging capacity. Mean- while, it began to explore a new scenario of green travel service which integrates photo-voltaic, energy storage, and charging. It is foreseeable that as electric vehicles become the primary mode of transportation, such a paradigm shift will have a profound eect on the entire energy industry, creating additional market opportunities for LongShine. Along with the business development, we fully recognize that green and low-carbon are the keys to high-quality economic and social development, prompting us to re-examine corporate social responsibility and release the Environmental, Social and Governance report for the rst time. The sustainability of the business is strongly intertwined to the support of partners, govern- ments, employees, and shareholders. In the challenging year of 2021, we overcame the impact of unfavourable factors like the pandemic, created value for partners, protected the rights and interests of employees, provided space for employees' growth, and participated in public welfare undertakings. At the same time, we invested in constructing LongShine Zero Carbon Technol- ogy Industrial Park. The company was named one of China's top 500 enterprises in 2021 for its exceptional contributions to charity and public welfare. Using this report as a guide, LongShine Technology will continue to strengthen its ESG governance, internal corporate gover- In September 2020, President Xi Jinping promised the world that “China will strive to peak carbon dioxide emissions by 2030 nance, and business ethics, rmly establish a defense line of information security and privacy protection, pay attention to talent and achieve carbon neutrality by 2060”. China's 'dual carbon' goal will entail signicant economic and social systemic chang- development needs, place an emphasis on professional talent training, and implement the concept of green development. es. LongShine Technology has persistently focused on the energy and power sector related to national energy security and LongShine will give full play to its advantages of digital technologies in the energy sector, enable low-carbon energy transition, economic development. It has become the main battleeld of carbon emission reduction. lead a green and low-carbon life. By constructing energy internet scenarios, providing care for vulnerable groups, and practic- ing social responsibilities, LongShine will diligently contribute to the sustainable development of society. In the past 20 years, the digital revolution of the communication industry has advanced a tremendous development of its own and at the same time, derived the current consumer internet. The power energy industry is in a similar circumstance to that of LongShine Technology is at the crossroad of energy evolution and the digital revolution. igitization makes the digital world a the communication industry 20 years ago, undergoing massive changes in digitization. Beginning in 2020, China's energy better place, enables energy consumption to be greener, more convenient and more ecient is not only a generational oppor- system will transition from a relatively closed, traditional fossil fuel-based, secure, and unied one-way power grid to a multi-level network-based new power system with an increasing share of renewable energy, openness, and interactive tunity, but also a mandatory mission. LongShine Technology will seize the great opportunity of 'double carbon,' joining hands supply-demand, intelligent. In this new energy system, 'the proportion of new energy will gradually increase,' 'energy supply with partners to help achieve the 'double carbon' goal and create extraordinary value for partners, government, employees, will shift from concentration to distribution,' and 'energy system will become more open and market-oriented, these character- and shareholders with the steady operation and sustainable development, and excellent service. LongShine will rmly stand at istic developments will turn into strategic trends, and the key element connecting these trends is ‘digitization’. the forefront of the new era of ‘energy revolution + digital revolution’! As a digitization company deeply involved in the power energy industry for over 20 years, with its leading energy digitization capabilities and rich experience in energy consumption scenario operation, LongShine has been deeply involved in the Chairman: digitization transition of the energy industry. We believe that integrating energy and power and digital technology will generate new forms of power and energy,new market operation mechanisms and set the stage for new power load and power consumption scenarios. Taking the electric vehicle aggregation charging service as an example, in 2020, LongShine's indiantu March 2022 01 About LongShine Technology ongShine Technology invariably adheres to the corporate mission of digitization enables energy consumption greener, more convenient and more ecient. While having cultivated in power and energy digitization and achieved excellent business performance, the company stands rmly in supporting sustainable development, actively communicates with all stake- holders, and has contributes to the carbon neutralization development y leveraging its indus- try advantages in digitized energy industry and rich scenario operation experience. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 11 Company Prole Founded in 1996, LongShine Technology Group Co., Ltd. has been focusing on providing power and energy consumption Calendar Year Honor services. The business model of Business to Business to Customer (B2B2C) focuses on the two driving development strategies of 'Energy Digitization + Energy Internet.' LongShine Technology (300682 SHE) was listed on the Shenzhen Stock Exchange in August 2017. 2021 Leading Enterprise in Digital Ecology Smart Energy Sector Since 2012, with ity of Wuxi as its headquarters, LongShine technology has set up 8 R&D centers in various regions, with 2021 Top 500 Chinese Enterprises on Charity business and branches in 31 provinces and regions. It now has more than 6,000 employees. LongShine Technology has continu- ously provided digital technology and operation services for over 12,000 government and enterprise customers and over 350 Enlisted as one of the top 100 Software Enterprises by The Ministry of Industry a nd Information Technology in 2021 million household users in China. 2021 Top 100 Competitive Enterprises in Software and Information Technology Service Sector Performance Indicators in 2021 Top ten leading enterprises in China's software and information service industry in 2021 China's leading digitization energy application enterprise in 2021 et income attributed Operation revenue: RMB Cash dividend: RMB Total number of employees to shareholders: RMB two driving development strategies of ,639 illion yuan 47 million yuan 32 million yuan ,020 'Energy Digitization + Energy Internet'. LongShine was listed on 2021 Stock Exchange GEM sector. LongShine built a domestic energy Development History of LongShine Technology service scenario and introduced the 2019 strategic investor Ant Group IDG Capital invested 2017 Hangzhou LongShine Co., Ltd in LongShine Technology. 2015 was established completed the restructuring of 2014 Bang Dao Technology and 2012 YSTen Technology. 2010 2005 trategic development of charging stations, 1996 2003 distributed photo-voltaic and other new energy services. the headquarter of LongShine relocated to the city of Wuxi. Amdocs, a listed company in the US NASDAQ Beijing LongShine Co., Ltd Stock Exchange, invested in LongShine Technology, was founded. and fully introduced the world's leading management system. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 13 Corporate Culture In the power and energy industry, LongShine Technology provides core systems for energy consumption services and other solutions for major enterprise customers including State Grid and China Southern Power Grid. The power and Energy energy customers served by the company locates in 22 provinces / autonomous regions / municipalities directly Digitization Mission statement Value proposition Five principles of business operation under the central government, serving more than 270 million energy end users. The company actively explores the new energy industry and provides distributed photo-voltaic cloud platform and other products as well as SAAS Insist on creating value through technology innovation services. In the gas industry, the company provides core system solutions for large gas enterprises such as China igitization makes ely on digital Adhere to central customer spirit Resources Gas and China Gas. With rich experience in business and high-quality technical services, LongShine the digital world services anddigital Technology has established a solid and leading position in the eld of power and energy digitization. a better place, enables Adhere to lawful and legally compliant operation operation,create energy consumption to be dhere to the mission of enabling employees to gain new values,share greener, more convenient new values the sense of fullment and more ecient. Adhere to the establishment of a sound corporate ecology LongShine Technology develops its own energy internet service platform and builds energy consumption service scenarios with Alipay, UnionPay and other portal. nergy Internet Concerning the household energy consumption, the company is ranked as the largest online service platform in China, covering over 400 cities nationwide. The company has provided professional and convenient online 朗新 【朗新】,语出《淮南子》“日开天霁,朗而新之”其意是描绘宇宙形成、天地初开时一派清 household payment services for over 5300 utility providers of water, electricity and heat, and over 350 million LongShine 新、隽朗的天气。朗新科技以龙的精神,不断突破,勇于创新,聚力数字化,创造新价值,让数 household users. It has promoted quantitative household energy services and low-carbon life services, as well as 字化的世界更美好。 explored household energy management scenarios. In the eld of electric vehicle charging, LongShine created New Electricity Approach, a third-party integrated charging service platform, and provides 'faster, better and more commercial' charging services to new energy owners. By the end of 2021, the indiantu platform has connected to over 400 charging operators, with over 0.32 million charging station in operation, over 2.1 million new energy charging car owners in service, and an accumu- Main Business lated charging capacity of over 630 million kWh. A classic energy operation service mode is being formed. LongShine Technology is a leading technology enterprise in the energy industry, providing power and energy consumption The company has formed a partnership of mutual trust and win-win cooperation with operators of China Mobile, services. It focuses on the double development strategies of "energy digitization + energy Internet" with a B2B2C business Internet TV License Holders Future TV, and local radio and television stations to serve Home Smart TV users jointly.As model; something deeply rooted in the company is the energy industry. On the one hand, it has established a complete solution Smart TV a technical service provider, the company ensures standardized business, ecient operation and good user system assisting customers like State Grid, China Southern Power Grid, Gas Group, and Photo-Voltaic Power Station in achieving experience. It is responsible for the construction of Smart TV platform, system maintenance, operation support, big digital upgrading. It optimized its Mid-End (service and resource allocation platform) capacity, and its platform products aided data analysis, business promotion, after-sales and customer service to ensure the viewing of smart TV family users, in the market-driven development of new power systems and the innovation and upgrading of energy industry services. On the and participates in the dividend sharing based on the prots gained from active users. other hand, the company aims to accomplish the electrication transition and develop a scenario of terminal energy consump- tion. It will provide new platforms for end-users to access various energy services, including household energy consumption, electric vehicle charging, and energy eciency management, through Alipay, UnionPay, and City Super Application portals. The company is developing a new energy internet service platform to manage the energy demand associated with sector service and collaborate with strategic partners so as to realize the digitization of energy sector. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 15 Sustainable Development Management Based on our mission Digitization makes the digital world a better place, enables energy consumption to be greener, more Stakeholders Issues of concerns Response channel Communication eectiveness convenient and more ecient, we actively provide economic, social, and environmental values for customers, employees, investors, partners, and other stakeholders through our eorts allowing everyone to be beneted from the development. Lawful operation Establishing a sustainable development management system improves the management level and the company's perfor- Government Pay taxes according to law Daily report and communication Strategic cooperation with local governments and Increase employment opportunities Special research and on-site meeting Create a good external environment for corporate mance in terms of environment, society, and corporate governance. In 2021, we established a sustainable development supervising Promote sustainable and healthy Forum and exchange project development institutions economic development management system led by the Board of Directors, guided by the ESG working unit, and implemented by relevant functional departments. The Board of Directors is responsible for the overall corporate strategic planning upon achieving sustainable development, supervising and guiding the formulation and implementation of ESG objectives, and coordinating the manage- Annual report and announcement Establish good relationship with investors Shareholders Road show Satisfactory return on investment Improve investor trust and ment of ESG aairs. Good market value Investor conference Obtain support from shareholders and investors in investors Shareholders meeting major decisions Environmental Procurement Administration Operation and service management Continuously improve the business according to department aairs group department department Stable product supply Customer Symposium customer feedback High quality and safe products Customers Considerate and convenient service Telephone service hot-line Customers' demands are eectively and timely solved LongShine Customer satisfaction survey The level of customer service has been continuously Smooth communication channels Technology's ESG improved Board of Social Human Public welfare Public relations Corporate working resources service and marketing development ESG Governance Directors aairs group group department department department department Structure Fair procurement Strengthen supplier management and improve supply Business Supplier conference Honesty and mutual benet chain eciency partner Strategic cooperation Governance Securities Legal aairs Accounting and Quality Long term stable cooperation Drive the common development with partners internal control management department department group department department Safety management and product Complete protection of rights and department Communication and interaction between employees interests Sta congress Clear career development path Sta Career development platform Complaint mailbox Create a harmonious working environment Work life balance Build a healthy and safe working environment Occupational health Stakeholders Communication Establish good community relations Communities Community development Community publicity Create a good external environment for corporate and NGOs Build a harmonious community Participation in public welfare activities Enhancing the communication and participation of stakeholders is a crucial part of realizing sustainable development. We pay development close attention to stakeholder demands and communicate with them via a variety of channels. According to the company's characteristics and development and industry trends, we identify and actively establish a communication mechanism with Annual report and announcement internal and external stakeholders, listen to their suggestions, and respond promptly. We pay visits to shareholders in mainland Financial performance Establish good relationship with the media Press conference Media Corporate governance Maintain the company's image and obtain public China and abroad, organize performance symposiums, and actively participate in relevant investment conferences. Information disclosure Press releases and publications recognition Media interview The company provides direct communication channels for local stakeholders to listen to their suggestions. We highly value the Practice energy conservation and Annual report and announcement concerns and suggestions of all relevant parties and will respond and handle them promptly and properly. Any stakeholders emission reduction Public survey of project and Practice energy conservation and emission reduction Environment Practice green operation environmental impact plan related to the company's local business and development can send an email directly to jiyue@longshine.com to contact us for Develop environmentally friendly Environmental protection organization Launch environmental protection products products communication company aairs. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 17 Sustainable Development Management Judgment on Major Issues We use an anonymous online questionnaire to select prioritized topics so to understand the impor- Regarding the requirements on social responsibility in The Guidelines for The Standardized Operation of Listed Companies on tance of sustainable development issues to internal and external stakeholders. Through the analysis the Shenzhen Stock Exchange, LongShine Technology understands stakeholders' concerns, expectations, and demands for the and calculation of the questionnaire data, the disclosure degree and the boundary of the topic are company's sustainable development through various ways. We fully understand the degree of concern of stakeholders and nally determined. Based on these, the analysis matrix of the critical topics on sustainable develop- identify critical issues. We recognize and screen the sustainable development issues related to LongShine Technology through the suggestions of the company's management, peer-to-peer benchmarking research domestically and abroad, media ment of LongShine technology is drawn. information analysis, and on-site research. Moderate importance issues Major importance issues Product R & D and innovation VIP customer service Protection of employees' rights and interests Screening process of social responsibility topics Privacy and information security Leading the development of the industry Compliance operation Sta training and education Employee care Occupational health and safety Importance to stakeholders Intellectual property protection Stakeholder communication Corporate governance Social welfare Anti-corruption Supplier management Topics source Screening standards Low-carbon products green operation management Suggestions from the company's Contribution to sustainable development Resource utilization Addressing climate change management team General concerns of stakeholders Greenhouse gas emission and management Analysis and suggestions from internal Focus points of social responsibility Pollutant discharge and external experts guidelines Low importance issues Media information analysis Meet the company's strategic development Environment Importance to the sustainable development of LongShine Technology Research on peer bench-marking needs Society domestically and abroad Governance Standard guidelines for social responsibility Matrix of signicant issues concerning ESG of LongShine Technology in 2021 02 Develop Digital Technology and Lead A Low-Carbon Future he 'double carbon' strategy promotes the sustainable development of government adminis- tration, corporate production, and people's lifestyle. LongShine Technology is a leading tech- nology enterprise in the power and energy industry,focuses on the dual-wheel-drive strategy of 'energy digitization + energy Internet', and continues to concentrate on digital transition and upgrading of the energy industry as well as service operation of the energy internet platform. The company is at the intersection of 'energy revolution + digital revolution'. Digitization makes the digital world a better place, enables energy consumption to be greener, more convenient and more ecient, which is not only an opportunity of the era, but also our indispensable mission. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 21 Enable Low-Carbon Energy Transition LongShine Technology focuses on the power and energy industry, deeply participates in digital transformation and the construction of new power systems, complies with the market-oriented development trend, helps customers in the power and Case energy industry reduce costs and increase eciency internally, expand innovation externally, and improve energy utilization eciency and energy service quality. Smart green energy cloud The 'Smart Green Energy Cloud' of Hebei Provincial Energy Big Data Centre jointly built by State Grid Hebei lectric Power Company and LongShine Technology Group is a exploration of the digital transition in power industry , which provides essential digital support for the construction of new power systems and the Assisting energy enterprises to realize the digital management of energy in the entire industrial chain is the key to the realiza- development of digital economy in Hebei province.As the technical platform and operation service portal of Hebei Energy Big Data Centre, Smart Green tion of the dual carbon path of energy by LongShine Technology. The goal of 'double carbon' promotes the continuous deepen- Energy Cloud breaks the industry information barrier, gathers energy data on electricity, oil, gas, and water, and data in meteorology, transportation, nance, ing of the digital transformation of the energy industry. While supporting the pilot mplementation of the ew core system of and other elds. The latform holds a 'green energy development map' that monitors carbon emission, a function to monitor industry development, water power consumption services of the State Grid, the company has also become the main partner of power and energy customers resource conservation and air pollution prevention, standardized power credit products, and other functions. The system provides agile and open data in the elds of new rid digital infrastructure and energy service operation. LongShine has established energy big data centers analysis and sharing services for government departments, nancial institutions, energy-consuming enterprises, and ecological partners.Smart Green with several provincial energy enterprises, developed various data products such as power index and carbon emission index, Energy Cloud successfully collects internal and external data, builds the interactive channel between data and services through the digital ecological model provided energy big data support services for governmental pandemic prevention and control, resumption of work and factory of 'platform+product+operation,' and fullls the integrated entire chain management model and control of energy big data based on ensuring data security. production, industrial support as well as carbon emission monitoring. With the promotion of electricity price reform and the The platform gives full play to the advantages of various resources and power data as a 'barometer,' establishes a high-value energy big data ecosystem, uses data to reect economic development and industry dynamics, assists the government in scientic decision-making, helps enterprises to save energy and formation of a unied national power market, the company has developed a variety of products such as market-oriented reduce consumption, promotes the transition and upgrading of the energy industry and ensures the improvement of people's livelihood. energy sales and electricity load forecasting, which have been successfully applied to rid enterprises in many provinces and cities. Case Construction of igital and smart power supply stations LongShine Technology cooperates with State Grid Zhejiang Electric Power ompany to upport Rural Revitalization, and helps Zhejiang Electric Power company to build a digitized smart power supply station platform with 'management collaborative integration, business worksheets driving, personnel all-round eciency and smart operation', realize the business model of 'one platform and one terminal' of power supply station, and signicantly improve the management of worksheets, worksheets digitization and digital performance. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 23 Enable Low-Carbon Energy Transition Industry Awards Case As a leading digital energy technology and operation service provider in China, LongShine Technology actively participated in industry forums to exchange and discuss technology innovation and development transition of the energy industry. In 2021, the LongShine technology assists Guizhou ower grid company to build a 'measurement automation system.' company was invited to participate in the National Energy Inter-Net Conference.During the meeting, the company's representa- tives shared innovative applications and classic cases on energy digitization, integrated energy services, and distributed LongShine Technology assists Guizhou Power Grid Co., Ltd. in developing the 'Smart Brain' of the power grid and assists the power grid to fulll the automatic metering system. photovoltaic cloud, and was recognized as the Excellent Partner of the National Energy Inter-Net Industry and Technology Innovation Alliance in 2020-2021. Intelligent meter reading: it has the functions of centralized automatic meter reading, accounting, and distribution, resolves the problems of time-con- suming, laborious, and inaccurate manual meter reading, and reaches intelligent management of electricity bill reading. Intelligent management: it focuses on electric energy data acquisition and application and has the functions of metering device monitoring, metering operation and maintenance management, centralized management of electric energy data, etc. The abnormal analysis and management of line loss by ierent region, voltage level, line, and station area can timely update the power grid fault and eectively improve the power supply service capacity and line loss quality control. In addition, based on the measurement automation system, LongShine Technology fully excavates the application value of electric energy data and provides intelligent services for the government and enterprises. By building a big data analysis model, the company provides data support for government monitor- ing and power consumption statistics in high energy consumption, nance, construction, and other industries. In enterprise production management, the metering automation system can accurately locate the weaknesses of the power upply, such as 'low voltage' and 'bottleneck,' shorten the time required for judgment on power failure and improve the energy production eciency of enterprises. As of December 31, 2021, the system has supported more than 0.56 million metering terminals in Guizhou, with about 18 million users. The average automatic meter reading rate is as high as 99.8%, avoiding the waste of resources caused by power waste, and continuously promoting the igital transition and upgrading in the power industry to achieve green and low-carbon development. LongShine joined the Award Ceremony of National Energy Internet Conference LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 25 Lead a Convenient Low-Carbon Life By building its own energy internet service platform, LongShine Technology connects clean energy and consumption scenarios, Payment interconnect with Alipay, Unionpay, Bank APP, City Super APP and other open payment platform, provide the vast amount of users with improves new energy eciency, provides end energy users with new scenarios of energy services, including household energy function convenient payment portal and payment channel. consumption, electric vehicle charging, smart energy conservation and so on, and reduces carbon emissions from daily life and industrial production. uto- payment provide uto-payment function to solve problems such as in the situation of water and power supply being stopped due to users function forgetting to pay, and it also helps users to avoid delayed payment fees. ousehold Energy Consumption Operational attract users to pay online by means of payment with cost reduction. activities Number of users Average daily Connection to accumulated: payment: public service Meanwhile, we have been continuously making eorts to improve the connection coverage with various public service institu- 350 million users over 5.5 million times institutions:5300+ tions, such as those supplying water, gas and heat. These providers are relatively scattered, and the coverage of intelligent billing meter is low, and still in the stage of rapid development. We connect these tility institutions by providing SAAS and other services, in order to enable more users to enjoy convenient online payment and contribute to realizing a low-carbon life. With the product mission of 'let everyone enjoy convenient services' and 'let every family practice energy conservation', Bang Dao Technology has developed an online payment platform, provided a number of convenient payment services, and realized the online tility bill payment service, including water, electricity, gas, property service fee and television broadband fee. Case Bang Dao Technology helps Inner Mongolia to realize online payment Improving the payment service project is one of the important livelihood projects in Inner Mongolia. In view of the weak information infrastructure of thermal energy enterprises located in Inner Mongolia, Bang Dao Technology provides thermal energy institutions with a digital customer service cloud (SAAS) platform, which realizes the integrated management of the whole process of thermal energy business while inter-connecting its functionalities with the open payment platform. It can inter-connect with Alipay, WeChat, nionPay, Bank APP, City Super APP and other open payment platform, with users being able to pay online. It provides a modular service system. The utilities can select the entire business service module according to its own business attributes. The modular system realizes the entire process and integrated service functions such as customer management, meter-reading management, billing management, charging management and business analysis, and improve the digital function of online payment service. As of December 31, 2021, Bang Dao Technology has provided high-quality and convenient revenue management system for 24 thermal enterprises in 12 municipal level administrative regions of Inner Mongolia Autonomous Region, covering approximately 0.5 million users. Online Utility Payment Portal LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 27 Lead a Convenient Low-Carbon Life indiantu LongShine Technology's indiantu onnects with Alipay, AutoNavi Map application, and other super trac portals, breaks the technical barriers between dierent charging stations, stablishes a fast charging platform with a single The number of The Accumulated Charging stations scan by mobile application. The platform prevents users from V owners with charging capacity: in operation: repeatedly downloading charging mobile applications of service provided: 630 million kilowatts over 0.32 million various brands. It also dramatically improves the charging over 2.1 million experience of car owners provides exemplary management, quality service, and brand operation for charging station operators. Convenient and straightforward energy-charging On the road to achieving the dual carbon goal, electric vehicles play an essential role in the energy transition process in the services stimulate the new development of electric vehicles transportation sector. To improve the driving experience of lectric vehicle users, LongShine Technology has directly hit the and enhance the transition towards a low-carbon life. critical point of 'charging diculty' within the lectric vehicle's industry chain. The company has independently developed the aggregated energy-charging service platform, integrated upstream and down-stream sectors of V industry, including leading engine manufacturers, charging operators, vehicle service companies, and o on, built a newly aggregated energy-charging business that served operators and V owners, eventually making the operation more ecient and making energy-charging Industry Award services easier to access. In 2021, the 7th China International Electric Vehicle Charging and Replacement Industry Conference (BRICS Energy-Charging Forum) was grandly held in Shanghai Automobile Exhibition Center. Relying on the innovation and breakthrough of aggrega- tion charging ervice, indiantu system won the highly valued award Unicorn of China's Charging and Replacement Industry in 2021. Charging portal of indiantu LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 29 Lead a Convenient Low-Carbon Life Distributed Photo-Voltaic Cloud Platform Smart Energy Saving LongShine Technology is committed to enabling enterprises with digital technology to assist enterprises in managing daily Case energy consumption. The company creates an integrated energy big data platform for energy enterprises, gathering internal business data, customer IoT data, products, and other data so that enterprises can better understand its energy use during daily operation, improve energy use eciency, and achieve sustainable development. At the same time, LongShine technology Distributed photovoltaic cloud platform builds a smart green energy platform, integrates various energy data service ecological units, provides enterprises with The company's inyao PV Cloud Platform is supported by Energy Internet of Things technologies to escort more ecient power generation of many distributed comprehensive energy management and operation services, ranging from energy eciency management, market-oriented photovoltaic power stations. Through comprehensive monitoring, intelligent alarm, AI decit diagnosis, big data analysis, rened operation and power sales, to smart electricity and charging operation. It aims to eventually help enterprises use energy scientically, improve maintenance, and other core capabilities, the platform improves the power generation eciency of the power station by digital and intelligent means. It energy eciency and achieve low-carbon operations. further reaches the low-cost operation and management goal of 'unattended and few people on duty, and eventually maximizes the outcome of the photovoltaic power station. This platform has eectively contributed to the low-carbon and green development of society. More than 15,000 photovoltaic power stations have been connected, with an installed capacity of nearly 10GW, which adds up to 16.406 billion kWh of green power generation, and a total reduction of 17.817 million tons of carbon dioxide emissions. Case ongshine helps Suzhou Shishan Plaza to launch uilding smart energy (BSE) system ongshine deploys BSE system for Shishan Plaza in Suzhou city. It successfully achieves real-time monitoring of terminal fan coil unit, fresh air system, air treatment system, and other equipment and facilities by installing sensors, articial intelligence algorithms, and a digital platform. By calculating the operation data, the digital latform can accurately analyze the actual energy demand and automatically send instructions to the host, energy consumption terminal, and cold storage system to adjust the temperature, ow, air volume, etc. While ensuring the safety of energy use in venues, it puts an end to the waste of energy consumption such as 'super-cooling' and 'over-heating.' Through this system, the annual carbon emission of Shishan square in Suzhou city is reduced by 5,000 tons. 03 Pursue Excellent Management and Promote Sustainable Development LongShine Technology strictly abides by laws and regulations, improves its established man- agement system, standardizes its internal governance structure, optimizes the risk control mechanism, ensures the company's compliance, safe and ecient operation from the aspects of company structure, information security, product quality, and supplier management to lay a solid foundation for the company's sustainable development with excellent management capacity. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 33 Adhere to Compliance and Ecient Management LongShine Technology is committed to building an ecient and suitable corporate governance structure, in strict accordance The company's Board of Directors consists of eight directors (including one female director), within which three are independent directors. The members of the Board of Directors have in-depth industrial background, professional nancial audit experience or with the requirements of relevant laws, regulations and normative decisions such as the Company Law of The People's Republic rich corporate management experience. The Board of Directors earnestly performs various duties entrusted to the Board of of China, the Securities Law of The People's Republic of China, the Listing Rules of Shenzhen Stock Exchange, the Guidelines for Board of Directors by the company and shareholders in strict accordance with the provisions of the Company Law, the Securities Law, the he Shenzhen Stock Exchange Regulatory Guidelines for Listed Companies No. 2 - Standardized Operation of GEM Listed Directors Shenzhen Stock Exchange Regulatory Guidelines for Listed Companies No. 2 - Standardized Operation of GEM Listed Companies Companies, etc. The company continuously improves its corporate governance mechanism and optimize its internal manage- and other laws and regulations, as well as the Articles of Association, Rules of Procedure of The Board of Directors and other ment system to safeguard its standardized operation. rules and regulations. It implements the resolutions adopted by the general meeting of shareholders and carry out various work diligently to ensure the rapid, healthy and sustainable development of the company. The Board of Directors has a Strategy Committee, a Remuneration and Appraisal Committee, a Nomination Committee and an Audit Committee. Each committee Corporate Governance carries out its work on the development of the company according to their respective responsibilities, and provides opinions and suggestions for the decision-making of the board. During the reporting period, the company has hold 17 general meetings of the In accordance with the requirements of laws, regulations, and normative guidelines issued by China Securities Regulatory Board of Directors. Commission and Shenzhen Stock Exchange, LongShine Technology has established the legal operational structure of share- holder meetings, the Board of Directors and the Board of Supervisors and senior management and handled the relationship The Strategy Committee consists of three directors, including one independent director. with the controlling shareholders, standardized and improved the level of corporate governance. This committee is responsible for conducting researches and making suggestions on the company's long-term development strategies and major investment decisions. Board of Strategy Committee Supervisors The Nomination Committee consists of three directors, including two independent directors. This committee nominates senior managers according to the company's strategic planning, and puts forward Nomination Committee peration and Shareholder Board of suitable suggestions on the structural system and process for appointing and removal of directors and senior Management Meeting Directors Team Remuneration and Appraisal Committee managers. The Remuneration and Appraisal Committee consists of three directors, including two independent directors. Audit Committee This committee reviews the annual performance and salary payment of directors and senior managers, participates in the formulation of annual salary evaluation and performance standards, and formulates equity incentive plans. The Audit Committee consists of three directors, including two independent directors. Shareholder meeting represents the highest decision-making authority of the company. In accordance with the requirements of This committee is mainly responsible for guiding and supervising the company's internal audit system as well as the the Company Law, the Securities Law and other legal regulations, as well as the Articles of Association and the Rules of implementation, supervising and evaluating work carried out by external audit team. Procedure of Shareholders Meeting, the company standardized the convening procedures for shareholder meetings, recruited Shareholder lawyers to provide legal advice on the legitimacy of shareholder meetings. All shareholders are treated equally, ensuring all Meeting shareholders, especially small and medium-sized shareholders, have equal status and hold legitimate rights and interests. During the reporting period, the company had 3 shareholder meetings. he company's Board of Supervisors consists of three supervisors, including one employee representative supervisor (female). In strict accordance with the provisions and requirements of laws, regulations and normative documents such as the company law, the securities law, as well as the Articles of Association, the Rules of Procedure of the Board of Supervisors and other Board of relevant laws and regulations, perform their duties diligently and independently, and monitor the company's legal operation, Supervisors production and management to ensure the company's standardized operation. During the reporting period, the company has hold 9 Board of Supervisors' meetings. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 35 Adhere to Compliance and Ecient Management Investors' Rights and Interests Internal Controls LongShine Technology is focusing on protecting investors’ rights and interests and sharing its value with investors through fair, In accordance with the Company Law of the People's Republic of China, the Securities Law of the people's Republic of China, timely, and complete company information disclosure, continuous and stable cash dividend policy, active and equal investor the Basic Regulations of Enterprise's Internal Control, and other relevant rules, laws, and regulations, and in combination with relationship management, and other methods. the actual circumstances and management needs of the company, LongShine Technology has developed a suitable internal control system to standardize operation, management, and control risks and ensure the daily operation of the company's business activities. Enhance investors' understanding of the company’s status, actively listen to market suggestions and opinions, and respond to investors' suggestions, the company actively builds communication channels with investors, maintains Investor interaction and communication with investors and potential investors in various ways, including regular updates on To optimize internal risk control, accelerate the digitization of the enterprise’s internal operation, the company continued to Communication its status through regular performance summits and road-shows and attending analyst meetings. The company deepen and improve internal information system in 2021 to control online risk on the business, legal and nancial levels. The guarantees that all investors are treated fairly, particularly in maintaining smooth communication and protecting the company's internal control system facilitates information exchange across all departments, strengthens internal coordination rights and interests of small and medium-sized shareholders, setting up communication channels such as investor and collaboration, and streamlines the company's management process. In addition, the company regularly monitors the email, telephone hotline, and ocial website column, hosting timely Q&A and online annual performance brieng. implementation of relevant systems and publishes its annual Internal Control Evaluation Report to ensure that the company has In 2021, the company received 10 investigations and held 1 performance presentation meeting, communicated with no major decits. the market right after the performance announcement, published the record of investor activities, to ensure that all investors can fairly and timely understand the business development of the company. The opinions of shareholders (especially small and medium-sized shareholders), independent directors, and Anti-corruption supervisors must be considered while drafting the company's shareholder return plan. The company's prot Shareholders' LongShine Technology strictly abides by relevant laws and regulations such as the Supervision Law of The People's Republic of distribution policy should maintain its continuity and stability, considering the long-term interests of the company, Return China, the Provisions of the National Audit Oce on Internal Audit, the Governance Standards of Listed Companies, the Listing the overall interests of all shareholders, and the sustainable development of the company, and prioritize cash Rules of Shenzhen Stock Exchange, the Guidelines for The Standardized Operation of Listed Companies of Shenzhen Stock dividend prot distribution. Since its IPO in 2017, the company has paid out four consecutive cash dividends, totaling RMB 246 million. Exchange, and strengthens the all-round supervision system to ensure the integrity and eciency of the company's operation. The company has also established rules and regulations such as the Anti-Commercial Bribery Regulation in 2016, and imple- ment a series of specic measures to ensure the honest operation of enterprises. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 37 Innovative Product Quality Management LongShine Technology pursues excellent product quality, improves the quality management system, establishes product life 7 Unit:RMB 100 million 15.00% cycle management process, encourages technological innovation and intellectual property management, and provides users with ecient, safe, and stable products and services based on the outstanding technical advantages of the company. 6 5.85 14.00% As of December 31, 2021, LongShine Technology has acquired CMMIL5, CS4, ITSS2 certication and ISO9001 quality manage- 5 13.00% ment system certication, and many of its subsidiaries have also acquired CMMIL, CS, ITSS certication and ISO9001 certication 12.60% respectively. 4 3.75 12.00% 3.26 3 11.00% 11.08% 10.97% Research, Development and Innovation 2 10.00% One of LongShine Technology’s core competitive advantages has always been its superior technology application capacity. Therefore, the company continues to invest heavily in R&D. This year, LongShine Group continues to invest in the R&S of new 1 9.00% technology applications, upgrading of technology platforms, development platforms upgrades, and the R&D of utility software products, modules, and components. At the same time, the group increased its R&D investment in cloud computing, big data, 0 8.00% Internet of Things, articial intelligence, and various other new technology applications, platforms, and tools to support the 2019 2020 2021 development of innovative business. It has conducted research and development on multiple industry application platforms Total investment in research Proportion of R&D (research and development) and products for the innovative business. The overall R&D progress is on track, ensuring that the group maintains a leadership and development expenses within operating revenue position in industry technology, and greatly contributes to the rapid expansion of its innovative business. In 2011, the company introduced the industry's advanced product development concept and management IPD system (Integrat- ed Product Development). It successfully acquired the information security service certication based on SDL (Security Develop- Research and Development ment Life-Cycle) in 2014 and the CMMI L5 certication (Software Capability Maturity Model Integration) in 2017. After years of System practices, the company has established a mature integrated product R&D management system integrating IPD+CMMI+SDL and the corresponding project management process. Talents are the essential driving force for corporate development. We have put together a high-quality research team. The company has 3,465 R&D personnel, counts for 57.56% of the total number of the company. The company has set up research institutes and technology R&D centers to conduct forward-looking and basic research. It has established a number of business Research and development departments to conduct product research and development in various application sectors and has established an Development excellent quality supervision system that includes safety and quality management systems. In the eld of energy digitization, Team there are more than 100 industry leaders with over 20 years of industry experience and more than 600 senior experts with over 10 years of industry experience. The research covers various high-tech sectors such as Internet of Things, cloud computing, big data, and block-chain. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 39 Innovative Product Quality Management Intellectual Property Right Quality Management Adhering to the management policy of "technological innovation drives development and intellectual property protection", To enforce the company's quality management measures, standardize quality management processes, clarify the functional LongShine Technology develops the "taking defense as the attack" intellectual property management strategy in combination responsibilities of all parties and improve product quality control capacity, LongShine Technology developed a series of with its own development, aiming to strengthen the transition of the company's innovation capacity and improving the compa- management systems, such as the Full Process Management Measures of Construction Projects, the Management Measures of ny's core competitiveness. To standardize the intellectual property management of LongShine Technology, the company has Key Construction Projects, the Management Measures of Operational Project Delivery and Maintenance, and the Management issued the Intellectual Property Management System and Intellectual Property Reward System, developed an intellectual Measures of Consulting Projects. The company has established an advanced quality management team with exquisite technol- property management system covering legal aairs, nance, manpower, sales, R&D, IT, procurement, quality, and various other ogy, rich experience, unity, and cooperation, and set up a quality management department to coordinate and organize relevant departments, and received the Intellectual Property Management System Certication in 2021. work. The business management unit is responsible for drafting specic work planning and is consisted of a quality improve- ment department, a qualication management department, and a baseline management department to eectively support The company values its core technology highly. It places a strong emphasis on patent applications, formulates patent applica- the sustainable, ecient and rapid development of the company's basic and innovative businesses, and thus enhance the level tion objectives, sets up annual intellectual property planning, regularly tracks and reviews, and manages its intellectual of organizational quality management capacity. property. At the same time, to improve its intellectual property management capacity, LongShine Technology provides regular intellectual property training to drive innovation and development. Quality management department The company actively encourages its employees to invent and innovate. Based on the various type of patent applications, the Business management unit company establishes an inventor reward structure to promote the output of intellectual property. Quantitative data Qualication management Baseline management Quality improvement ce ce ce Quantitative index Unit Data in 2021 Quality and Safety Team Structure Diagram Number of patents applied set 313 The company improves the project management specications, implements the quality monitoring of the entire life cycle for the project, which include processes such as construction, delivery, operation and maintenance, consultation and operation cash management, and takes management measures over risk control, progress monitoring and process optimization around the Number of major patents set 196 stages of project delivery and implementation. In 2021, the quality control pilot program included a total of 221 construction projects, 26 operation and maintenance projects, and 10 consultancy projects. The leakage rate of product development Number of authorized patents set 122 defects was reduced by .8% and the discovery rate of internal test defects was increased by .2%. To further deepen the quality assurance and improvement work, the company has arranged multiple product quality training Number of licensed copyrights set 880 and project review activities, strengthened employee quality and safety awareness, and summarized and shared its experience of key projects. In 2021, LongShine Technology arranged two quality improvement exchange training activities with its subsid- Number of trademarks set 348 iaries, eight training on improvement methods and specications with the network provincial center and business depart- ments, and organized the business and technology departments to carry out 34 resumption work. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 41 Innovative Product Quality Management Case Study Product Life Cycle Safety Management Overview of Safety Construction Baseline Operation and Product Life Demand Development Implementation Create high-quality products, innovative units and carry out quality system training Cycle Safety management department design department Testing team management department management department department eam department Management On May 29, 2021, the innovation business unit of the company invited the quality management department to hold a knowledge sharing event of LongShine quality system, which was attended by the principals and business backbones of Start of project six subsidiaries, including Bangdao Technology, ChangLife, HanClouds and construction Hango Technology. The training is carried out in the form of 'classroom teaching + case analysis', involving quality management norms, quality improvement methods, measurement and tool kits utility, rapid functional point estimation, Oine Safety demand Complete Safety Version check Overall Develop planning Hand investigation, structural measurements code safety planning Safety version management, DevOps and Archimedes platform. Through comprehen- codes and formulation inltration planning and design of and sensor ssuance and formulation and operation Phase checking and editing safety plan scanning acceptance implementation sive discussion, each innovation unit has an in-depth understanding of the implementation company's quality system, with the aim to further improve the product capability as well as to enhance the market competitiveness of the company. LongShine Technology Demand planning Architecture planning Project safety report Inter-media System allocation Operation report Oine report conrmation quality system training conrmation and conrmation and conrmation and and conrmation and conrmation and conrmation and submission submission submission submission submission submission submission KCP KCP LongShine Technology attaches importance to the development of a product safety system. It has issued relevant product Keep in the archives safety systems such as Product Life Cycle Safety Management, Third-Party Product Safety Management System, and Third-Party Product safety factory verication Product safety factory verication (rst stage) (second stage) Product Safety Management Detailed Regulations, to illustrate the safety technology structure in the company's product life cycle and standardize the safety requirements across the entire implementation process of products, including design, devel- KCP:Key Control Parameter opment, testing, release, certication, implementation, maintenance, oine and emergency processes. The company has been working to improve its product safety development capacity and ensure that its product fullls the safety requirements of The company regularly conduct full-scale special product safety management training, including publicity, implement and customers. It continues to improve the safety management mechanism at each stage, requiring each responsible department conduct the examination of DingDing (mobile application) classroom safety training, the establishment of internal safety to establish and implement corresponding safety specication les, checking the safety work at each stage based on the knowledge database, sharing of classic cases, etc., to distribute safety information and technology better and to build a good circumstances, and continuously improving and optimizing the safety specications and systems according to the problems safety culture. In 2021, the company held special training on the third-party product compliance and safety management that have been identied. system. A total of 204 safety ocers and representatives attended the training. The company tests the security function of dierent projects in areas such as application vulnerability scanning and product security. Test reports will be issued based on the results, and rectication and repair will be performed, reducing losses caused by security vulnerabilities and improving the company's overall product security control capacity. In 2021, the company's baseline safety test and internet application security vulnerability bugs were both blocked 221,491 times, with the internal baseline blocking 202,294 security vulnerability bugs. Its Beijing Winter Olympic Games project blocked more than 890 security vulnerability bugs, and the Bangdao Ali-pay mobile application program blocked 78 security vulnerability bugs. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 43 Innovative Product Quality Management Strengthen Information Security Management Customer Service LongShine Technology attaches great importance to information security management and is continually improving its capaci- ty to provide information security and customer privacy protection services. The company is fully committed to providing safe LongShine Technology is completely devoted to a service-oriented principle and is fully committed to providing customers with and reliable technical services to its customer and is constantly establishing and improving the company's network and ecient and comprehensive quality services to grow with customers. The company abides by the Law on the Protection of information security management system. Consumers' Rights of the People's Republic of China and other laws and regulations, establishes internal systems such as Customer Complaint Handling Management System and Operation and Maintenance Service Handling Process, sends profes- In accordance with the Network Security Law of China, the Law on Protection of Personal Information of China , the Data Securi- sional service teams to assist with consultation, planning, implementation, operation and maintenance, and other aspects, and ty Law of China and other laws and regulations, the company has established Internet System Security Work Specication improves its information technology service system. Requirements, and regulations such as Customer Sensitive Information Desensitization Specication, On-Site service Security Management Specication, Document Transparency Encryption Management Measures, etc. As of December 31, 2021, LongShine Technology attaches great importance to the company's operation and maintenance service quality, employing LongShine Technology and its several subsidiaries have received a range of relevant certications on information security hierarchical management for service requests such as consulting, operation, data, and conguration, appropriately allocating management system, information security service qualication, information system construction and service capacity, so as to resources, and timely repairing equipment faults, to minimize the impact on customers. The company actively communicates further strengthen the development of information security system. with users, coordinates and resolves disputes, monitors event completion, and returns visit to collect customers' satisfaction feedback. The company strictly implements the responsibility principles concerning network and information security, implements unied leadership and hierarchical management, and follows the "who is in charge is responsible, who operates the department who Moreover, to increase the service quality even further, the company provides customers channels to complain and standardizes is responsible, who uses nd who is responsible, and who manages business must manage security" principle. The company the customer complaint handling process to ensure that all kinds of customer feedback and complaints are addressed promptly has established a security management department that is responsible for the overall management of the company's security and properly. At the same time, the company pays a follow-up visit to customers based on complaint handling circumstances, work to fully promote the overall security work implementation. Every business management department has set up security makes reasonable suggestions to relevant departments and requests for improvement, to prevent complaints from recurring. posts to rene and dene the responsibilities of network and information security systems. The company continues to conduct customer satisfaction surveys, to better understand customers' multi-dimensional evalua- The company eectively identies and manages network and information security risks, avoids security incidents, integrates tions of the rationality, safety, and stability of the company's product design. A satisfaction survey report will be published, network and information security work in all aspects of production and operation. It has standardized the company's security aiming to steadily improve the company's service quality and create value for customers. In 2021, the comprehensive compa- management system into all aspects including physical security, safe operation, safe production, on-site service, and conden- ny's customer satisfaction score was 85.99, which was signicantly higher than in 2020. tiality management, and establishes emergency response, security monitoring, secure communication, and other mechanisms to further enhance the network and information security management system. Physical Comply with the company's and site's physical safety-related regulations. security Properly handle sensitive information les and mobile media. management Safe ollow the password security policy and standardize the application and approval procedure of account operation and authorization. management Strengthen business computer security management and conduct regular vulnerability inspections. Strengthen personnel safety management, review and oversee cooperative partners' operation quali- cation, and sign security condentiality agreements. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 45 Strengthen Information Security Management The company continues to strengthen its information security capability and carry Safety Ensuring safety production and construction relies on the principle of 'three synchronization', and it out comprehensive information security management for employees, including production needs to ensure that the network security technical measures are 'planned, constructed and operated management synchronously'. signing security related Condentiality Agreement and Security Commitment, issuing induction manual LongShine Security Red Line 15 Prohibitions, regularly Follow the multi-level protection system of the national network security and implement the company's product life cycle security technical specications. carrying out employee security training and examination, preparing and publishing According to the safety production standards required by the state, industry and customers, it includes security briengs and require resigned personnel to sign the Resignation Statement but not limited to: physical network security, environment security of host machinery, application and and promise to continue to keep the company's information condential. In 2021, data security, information content security, business security, etc. the company carried out special training on the Data Security Law and Personal Sta Training on Network Information Protection Law, special training on the safety of fresh graduates, and Information Security On-site Follow the instructions of the buyer or customer for personal data processing, transferring, and other special training on the safety management of third-party products, etc. service safety related businesses. management Prohibited to attack or harm customer's network, obtain any data or information from customer’s The company conducts regular safety inspections and audits on safety management systems, personnel management, termi- network without permission, nor log in to the equipment with an unauthorized account or other accounts. nal security, data security, document asset management, oce environment security, and other aspects. The goal is to conduct The on-site service project team must formulate and strictly implement local management specica- a more thorough assessment of the company's safety management capacity, formulate and follow up the implementation plan tions and apply Implementation Guidelines of On-site Service Safety Management specications in and rectication measures for safety risks. accordance with the customer's safety management requirements. he company complies with national laws and regulations on data security, personal data and privacy ata security protection, network security operations safeguarding and so on, and manages condential data in Entrapment exercises management accordance with relevant national regulations and requirements on company security and customer condentiality. Enhance the company's safety awareness culture and carry out e-mail entrapment practice Data storage and document transmission must comply with the measures according to the Document In order to strengthen personal security awareness and prevention skills, the security management department organized and carried out specic e-mail Condentiality Management Guidelines. Employees are prohibited from copying and transferring entrapment exercises, imitation attack drills, and conduct network information security awareness publicity and education. These exercises monitor the condential documents and internal documents without prior authorization. entrapment success rate of employees in each department in various stages, understands the safety awareness level and risk positioning of each Employees must follow the company's condentiality regulations, handle condential documents and department, improves the sensitivity of employees to entrapment emails, and carries out targeted safety awareness training to further improve the overall contents with care, and not transfer, forward or copy the company's condential information via email safety awareness level of the company. in violation of company’s rules and regulations. mergency Manage network and information security incidents by various levels based on their severity, and response and implement the working mechanism of early warning, analysis, disposal, and notication. safeguard Comprehensively manage network information security through the security system, security depart- mechanism ments and personnel, daily security monitoring, emergency response mechanism, personnel security training, security mechanism supervision, inspection, and other relevant mechanisms. Network and Information Security Management Regulations and Guidelines LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 Standardize Supplier Management LongShine Technology highly values supplier management, establishes rules and regulations such as Supplier Management Procedures, formulates standard processes, agreements, or contracts, conducts eective cost management, and constructs a fair, transparent, and sustainable supply chain for suppliers. The company sets up a procurement business department to manage the third-party and internal procurement to ensure the procurement process compliance. In addition, the company’s operation management platform further standardizes the electronic management of the entire procurement process, including procurement application management, payment application management, and supplier information management, to make the procurement process simpler and more ecient and thus improve customers satisfaction on the products and services. The company standardizes the supplier access system and examinants qualication, access, audit, evaluation, and other management mechanisms to develop reliable supplier networks. The company sets up access conditions based on supplier’s types and requires suppliers to provide corresponding audit materials to establish a Directory of Qualied Suppliers, including Supplier Audit Form, business operation license, account opening permit, product certicate, safety evaluation report, illegal and criminal records, etc. In 2021, LongShine Technology has 396 cooperative suppliers registered in mainland China. The company regularly reviews its suppliers, evaluating their product quality, price, personnel qualication, nancial status, technical capability, after-sales, customer satisfaction, etc., and puts forward rectication requirements or disqualication of unqualied products, to improve the company's supplier management capacity. In 2021, the company integrated supplier resources to further screen high-quality suppliers which provide high-quality products and services. after-sales technical capability product quality 396 cooperative nancial status suppliers price customer satisfaction personnel qualication provide high-quality products and services 17 04 Adhere to People- Oriented Principle and Help Employees Grow mployees are the foundation for the company to survive and develop. Adhering to people-ori- ented principles and paying attention to humanistic care is essential for the company to achieve sustainable development. Longshine Technology thoroughly adheres to the career and talent development concept of 'rely on people for the success of work, rely on work for the success of people'. It pays close attention to employee rights, employee development and employee welfare, and has been continuously creating a straightforward, friendly, just and inclusive work- ing environment. The company persists in setting up a stage for talent growth, paving ways for employee's career development, as well as creating a cohesive spiritual home for all. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 51 Protect the Rights and Interests of Employees Employees promote the development and growth of the company, while the company also endorses the development of Employee Status employees. Based on mutual respect and equality, the company is obligated to safeguard and protect its employees' legitimate As of December 31, 2021, the company has 6020 employees. rights and interests. On the path of co-development with its employees, based on the principle of protecting employees' Senior management reasonable rights and interests, the company is committed to creating an equal and transparent employment mechanism for 37 Middle management Older than 50 516 each employee and resolving their most concerning and realistic problems. 47 Female 1,645 27% 51% 9% Rights and Interests of Employees Between 30 Less than 30 to 50 years old years old General sta LongShine Technology strictly abides by the Labor Law of The People's Republic of China and signs legal labor contracts with Male 2,913 3,060 5,467 4,375 employees from the date of employment. The company adheres to the principle of fair employment and will never discriminate based on gender, age, race, religious belief, and physical condition. Forced labor and child labor are strictly prohibited as well. By gender By age By rank According to national laws and regulations, the company provides the 've insurances and one fund' for all employees and provides employees with an annual physical examination. At the same time, it purchases supplementary medical insurance, full scheme accident insurance, major disease insurance, and other commercial insurance for its employees. It assists employees in handling supplemental medical joint insurance for their families, generally providing full coverage of supplementary commer- Suitable Payment cial insurance. LongShine Technology believes in “adapting to the market environment, reecting the value of talents and maximizing the potential of the incentive role,” principle and following the concept of “paying mainly for the value of the position and The company has established the Vacation Management System. Based on ensuring that employees enjoy legal holidays and personal ability, supplemented by paying for personal performance contribution.” It has issued the Salary Management weekends required by the state, each employee can also enjoy legal annual leave, marriage leave, maternity inspection leave, System of LongShine Technology and established an incentive mechanism that considers internal fairness and market competi- maternity leave, paternity leave, parental leave, funeral leave and other specic vacations. Each employee is also provided with tion. Placing “consistent responsibility and interests, consistent ability and value, consistent risk and return, consistent perfor- the welfare of annual paid leave and annual paid sick leave of 12 days. mance and income” as the goal of employee salary distribution, the company is committed to empowering employees to focus all their eorts on business development and share the company's dividend along with its development. Safeguard measures for employees' rights and interests Relevant system Payment and welfare structure of LongShine Technology Employment principle: openness, equality and non-discrimination. Child labour: take the personnel's age above 18 as employment condition, and eliminate the employ- ecruitment System Recruitment ment of child labour. Forced labour: limit overtime working, and the working hours are recorded in the system on time. Monthly salary Short term incentive Long term incentive Welfare Dismissal Terminate the labour contract after equal consultation with employees. ismissal System Working hours Working hours: standard working hours of 40 hours per week. Employees who requires irregular orking hours and Base payment Sales commission Equity incentive Statutory benets and working hours and comprehensive working hours, the system shall adjust the time according to the holiday leave System holiday leave actual situation. Merit payment Year-end bonus Corporate welfare Employees' work content, position ranking, work performance, employee potential and labour market Employee Payment Payment status are the main basis for determining employees' salary, and the payment are moderately inclined System in favour towards freshly graduated students. Other allowances Other bonus LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 53 Support Employee Development LongShine Technology pays great attention to the training of employees and regards the growth of employees as an essential To help new employees successfully adapt to and integrate into the new working environment, the company has established a factor for enterprise development. LongShine Technology has set up a human resources COE (Center of Expertise) learning and newcomer training channel. It considers the growth stage of new employees, accelerate new employees' in-depth understand- development team, aiming at intensely carrying out training courses to improve the comprehensive qualication of employees. ing of the company's business team through task allocation, set periodic assessments, and other methods. The company The company aims to optimize the learning and development system, normalize the precipitation of internal high-quality assigns a tutor to each fresh graduate and provides guidance and skill training during their employment to regular employ- resources and experience, and build LongShine knowledge center and training resource database. It has been carrying out ment. It also set up customized tools such as Fresh Graduates Knowledge and Capability Model, Learning Map, and 1.5-Year talent training and manager training programs for key posts, build a 'knowledge + learning' management platform, meet the Training Plan for Fresh Graduates to help them successfully pass all stages of the training path.As of December 31, 2021, growth needs of all employees, and continuously stimulate the creativity and initiative of the organization.As of December 31, LongShine Technology has provided a total of 14,524 training hours to fresh graduates, with 82 hours per capita. 2021, LongShine Technology has provided a total of 48,321.52 training hours to employees, with 4.43 hours per capita, and the Promotion stage proportion of trained employees has reached 100%. Positional practice stage Positional training improve core stage capability of Vocational qualication improve general Routine training Key project training General training examination the position stage positional technical knowledge Intern stage knowledge and Training for new employees of social The company designs exclusive training The company takes into consideration of all improve personal skills training recruitment: at the rst day, the rst week, programs for newly appointed grass-roots employees, aims to creates a learning qualication knowledge on the rst month, the rst employment time managers. It arranges managers from all organization, provide possibilities for and ability and other occasions, through mixed training over the country to gather together to turn employees to attend training and certicate all information methods, such as online teaching, oine their roles from experts to managers through examination, reimburses training and about the company department guidance and national online courses and seminars. Under the guidance of examination expenses, encourages employ- communication meeting, the company the tutor, these managers will be able to ees to actively improve their vocational skills, creates a training camp for new employees to adjust to the position quickly and be and provides certicate renewal services for Cultivation growth path for fresh graduates quickly integrate and adjust to their posts. independent. some key certicates. Let the fresh graduates feel and In 2021 LongShine Technology and understand LongShine, cultivate Oracle held technical exchanges. the fresh students' sense of belonging and responsibility in order to integrate into LongShine, and help them adjust their roles, improve their skills and grow rapidly. In 2021 fresh graduates will have a nine day long general training and a ve day long technical training. In order to fully improve the ability of operators from formulating strategies to implementing strategies, as well as to stimulate each business unit to make better achievements, Bangdao Technology launched a three day strategic special training camp in mid November. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 55 Care for Employees' Life Adhering to the “paying equal attention to work and life, and living with happiness concept, LongShine Technology continues to prioritize taking care of its employees, creating a comfortable working environment and enhancing cohesion and sense of Sta Steps Walk belonging through various types of employee activities. The company carries out step walking activities for all employees in May and November every year, and awards the winning employees with a bonus of RMB 100,000, in order to promote employees to pay attention to their own health. Employee Activities To make employees feel the warmth of home and enrich their daily cultural life, LongShine Technology holds various forms of employee activities every year. Induction Celebration The company holds an annual induction celebration to send good wishes to students for the special induction anniversa- ry. In 2021, a total of 563 employees participated in the induction ceremony. 910 Teachers' Day Women's Day Festival On Teachers' Day, the company organizes thanksgiving In order to celebrate International Women's day, the company presents special gifts to female employees on March activities on the theme of expressing thanks to tutors, so as 8 every year. to create an atmosphere of mutual help and learning within the company. In 2021, the company held a Teachers' Day activity with the theme of 'three people walking together, one of them must be my teacher'. Flowers and greeting cards were placed in each oce area to encourage employees to express their gratitude to their tutor. Mid-Autumn Festival Activities The company oers mid-autumn moon cakes to employees Annual Outstanding Employee Tour at every Mid-Autumn Festival, and holds mid-autumn The company holds annual excellent employee tour activities in May every year, which not only provides employees reunion activities to create a warm atmosphere for employ- with opportunities to travel and relax, but also helps employees to integrates into the construction of the company's ees. In 2021, the company launched the LongShine Three culture. In 2021, the company organized tours in northwest regions and Anji Club vacation tour. Line Family Letter Activity. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 57 Care for Employees' Life Employee Assistance The company established the LongShine Love Special Charity Foundation to establish a long-term mechanism in special charity fund to assist employees with medical-care diculties and living diculties. The company sets October 28 as its annual Charity Day and advocates employees to donate on this day. As of December 31, 2021, the company has assisted four employees with family diculties, 322 employees have made voluntary contributions, and a total of RMB 118,900 has been raised. 1024 Program Day Festival The company holds 1024 Program Day Festival on October 24 every year to celebrate the era of digital technology with employees. Employee Communication Table tennis club in Hangzhou city Roller skating club in Wuxi city The company is organizing a family forum to stimulate communication among employees. It aims to help employees create an open, harmonious, inclusive, and positive working atmosphere through online activities. This community will cover three sections: LongShine family aairs, technical exchange, and colorful life. Yoga activities Badminton activities Family LongShine family aairs Technical exchange Colorful life Sports Club Forum In 2021, LongShine Technology ocially established its sports club, which aims to enrich employees' spare time life, Sector Corporate business Technical help employees to develop tness habits, and advocate the concept of happy life and healthy work. As of December and management Daily life exchange area exchange zone 31, 2021, the company has established 90 sports clubs in 20 cities across the country, with a total of 821 employees exchange zone participating. In order to encourage employees to continuously participate in sports, the company has created a sports talent IP, and more than 900 employees take physical exercise in various forms. Moreover, the company pays attention to the health of employees through health-care lectures and public health lecturing mobile application. 05 ake Social Responsibility and Repay the Society wholehearted LongShine Technology has always viewed green and low-carbon operations and participation in public welfare as vital parts of the company's long-term sustainable development strategy. Based on creating value for customers, generating prots for shareholders, building future for employees, and epaying for the society, LongShine Technology always considers its mission and responsibility. It adheres to energy conservation and consumption reduction strategies and helps the development of public welfare undertakings. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 61 Adhere to Low-Carbon Operation LongShine Technology onsist with the global trend toward green development, pursuing the goal of "carbon peaking and Energy Consumption Management carbon neutrality" and implementing a low-carbon strategy through its emission and energy consumption management. The The company attaches great importance to energy management, strictly abides by the Energy Conservation Law of The company seeks to demonstrate its determination to practice low-carbon operations and develop sustainability. People's Republic of China, develops energy consumption management system, standardizes daily behaviors such as air conditioning, electricity and paper in oce areas, denes the responsibilities of administrative departments, constantly improves energy management system, and realizes all-round control of energy use process. As of December 31, 2021, Emission Management LongShine Technology and its ve subsidiaries have acquired the ISO14001 Environmental Management System Certication, The company has carried out relevant training and established a waste classication management system to advocate the and the company's daily operation and production have not aected the environment and natural resources. reduction, recycling, and harmlessness of domestic waste. The company places waste bins centrally and requires employees to classify and dispose of waste. To promote environmental protection and energy conservation, the company endorses the green Case oce concept. It reduces the waste discharge in the oce area by the following activities: distributing non-consumable oce supplies, setting waste battery recycling bins, and using printing paper on both sides; achieving the recycling of oce waste LongShine technology creates a zero-carbon technology industrial park by recycling printing paper, cartons, plastic bags, and document baskets; reduce oce energy consumption by posting energy-saving signs and using energy-saving and environmental protection materials for decoration in the oce. As of Decem- To actively respond to the national low-carbon policy, LongShine Technology implemented the LongShine Technology Industrial Park project in Wuxi city, which became the rst batch of science and technology industrial park projects with zero carbon as the theme in Jiangsu Province. LongShine Technology ber 31, 2021, the company had no environmental accidents, illegal discharges, or other such events. Industrial Park project is located in the central area of 'Internet of Things' Town at Huihai Bay High Tech Zone, with a total construction area of about 250,000 square meters.During the construction, the relevant requirements of green buildings will be strictly implemented, and the comprehensive energy-saving rate The data of emissions and energy consumption in 2021 are as follows of the project building will reach 65%. In terms of energy conservation in the park, rst of all, a 1.2 MW distributed photo-voltaic power station is designed by using photo-voltaic power generation and roof, which is expected to generate about 1.3 to 1.4 million kilowatts of green power every year. At the same time, Types of emissions, energy consumption and utilization Unit Data in 2021 a roof garden is built on the roof without solar photo-voltaic panels to reduce the energy exchange between the roof and the outside. Secondly, a 'sponge city' will be build. The proportion of permeable ground area is more than 40% of hardened ground within the park. A new rainwater collection system is built Waste batteries Ton 0.009 and utilized by biological purication technology, and the utilization rate of rainwater resources is more than 5%. Thirdly, there will be full-scale energy management. The park implies BSE smart energy-saving system independently developed by LongShine Technology to achieve accurate control of tempera- Waste and ture and humidity within buildings and save energy to the greatest extent. In addition, numerous new energy charging stations are planned to be built within contaminants Waste selenium drum Ton 0.071 the park to encourage employees to actively use new energy vehicles and practice the concept of low-carbon travel together. Waste ink cartridge Ton 0.023 Oce paper consumption Ton 4.42 esource utilization Fresh water consumption Ton 9,458 Electricity consumption KWh 1,573,200 LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 63 Intelligent Anti-Pandemic Activities Public elfare After an in-depth analysis of the infection screening workow in other regions with pandemic risks in China, combined with the LongShine Technology consistently adheres to the principals of leading the digital world, helping digitization transition, active- characteristics of pandemic prevention in Wuxi city, the company quickly developed the 'nucleic-acid test link' product. Wuxi ly participating in public welfare events and re-pay the society with practical actions. citizens can book a nucleic-acid test via the 'pandemic prevention and control' directory on the Lingxi mobile app. After quickly completing the nucleic acid test individual application following the functional index, they can go to an oine nucleic-acid test center to take the tests. Afterward, applicants can also acquire the nucleic-acid test results online on Lingxi mobile app. Education assistance LongShine Technology promotes the development of the company's educational public welfare undertakings through Beijing Daisy Public Welfare Foundation, CITIC Trust Student Fund, uch as online free education platform, content, etc. In 2017, LongShine technology and Yishiteng technology jointly launched the Beijing Daisy Public Welfare Foundation to help poor communities in remote areas. In 2019, Beijing Daisy Public Welfare Foundation launched the daisy summer public welfare camp project. They invited 6 teachers and 30 students from Kuoshtag town primary school in Pishan County, Xinjiang, and Keping Bilingual Huzhou Primary School Xinjiang to come to Beijing for a week-long visit and study tour. In August 2021, the situation in Lukou at Nanjing reminded Wuxi city to ring the pandemic prevention alarm again. To assist the government in conducting accurate and ecient community nucleic-acid tests, nearly 200 LongShine Technology employ- ees formed a science and technology anti-pandemic team to develop the rst online nucleic-acid test platform, solidify the digital 'defense line,' and assist the government in conducting nucleic-acid screening and testing (stress testing) for all employees. LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 65 Public elfare Book donation activities onation during pandemic On September 30, 2021, the company carried out book donation activities for Huade county in Inner Mongolia, which is a sister In early 2020, facing the outbreak of Covid-19 pandemic, all sectors of society joined in the ght against the pandemic. ta of city of Beijing, and donated 5,000 books to Huade County Cultural library of lanqab City in Inner Mongolia Autonomous LongShine Technology donated a total of RMB10 million worth of medical supplies and funds to ght against the pandemic and Region. protect front-line worker's safety in Hubei province. Caring co-development activities In November 2021, the Beijing Daisy Public Welfare Foundation, together with the Wuxi Municipal Committee of the Communist Rural development Youth League and the Wuxi Youth Federation, held the "young people's warm childlike innocence - big hands pull small hands" LongShine Technology has always adhered to the concept of "working seriously, developing enterprises and ive back to care activity. Through letter exchange and micro wish help activities, young people paired up with those in Aheqi county and society", and actively promotes rural development. In October 2021, Beijing Daisy Public Welfare Foundation donated RMB 0.1 provided them with 30 love help packages. million to Shule county in Xinjiang, to help the construction project of human settlements in Tokuzi Otak village No. 6 of Tagarqi Township in Shule county, and promote the consolidation and expansion of poverty alleviation in Shule county. LongShine Technology Public Welfare Investment Amount Project Total amount (RMB 10,000) 23 Targeted poverty alleviation in 2021 50 Social welfare activities in 2021 LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 67 Future Prospect ey Performace Indicator Digitization is the ost important technical theme n dierent industries in the 21st century. Along with it, technology and productivity in the energy sector have been making continuous progress. The state rmly dedicated to promoting the 'double Index Unit ata in 2021 carbon' strategy, driving a magnicent energy revolution. The integration of electric energy and digital technology will initiate Operation revenue illion yuan ,639 new forms of electric energy, new market operation mechanisms, multi-level energy network structure, and give birth to a Net income attributed to shareholders illion yuan 47 Economic series of new scenarios of electricity load and electric energy consumption. LongShine Technology is at the ntersection of Cash dividend illion yuan 32 performance 'energy revolution + digital revolution'. igitization makes the digital world a better place, enables energy consumption to be Total investment in R&D illion yuan 585 Proportion of R&D expenses within peration revenue % 12.6% greener, more convenient and more ecient, which is not only an opportunity of the era, but also our indispensable mission. Waste batteries Kg 9 In the future, LongShine Technology Group will rmly focus on the energy industry, as well as focus on the dual development Waste and aste toner cartridge Kg 71 contaminants driving strategy of 'energy digitization + energy internet' based on the business model of B2B2C. The company will continue to Waste ink cartridge Kg 23 Environmental make eorts on the two main business lines of digital transition and upgrading of the energy industry as well as the service performance Oce paper consumption Ton 4.42 operation of the energy internet platform. On the one hand, we will focus on major customers of electric energy and promote Resource Water consumption Ton 9,458 utilization digital energy services applications. On the other hand, we will focus on customer's needs and expand scenario driven energy Electricity consumption KWh 1,573,200 consumption and electric energy operation. In terms of business model, the company will optimize the relationship between supply and demand through technology and business model innovation, not only improve the user experience, but also Electric service user Million >270 achieve scene partners. From software to platform, from service to operation, the company will diligently upgrade its business Number of patents applied Set 313 and enhance its value, continue to contribute to the 'double carbon' goal and promote the sustaining socio-economic develop- Number of major patents Set 196 Number of authorized patents Set 122 ment! Number of licensed copyrights Set 880 Number of trademarks Set 348 Number of cooperative suppliers - 396 Total number of employees Person 6,020 female employees Person 1,645 male employees Person 4,375 Employees less than 30 years old Person 3,060 Employees between 30 to 50 years old Person 2,913 Social Employees older than 50 Person 47 performance Senior management Person 37 Middle management Person 516 rdinary employees Person 5,467 Training hours to employees Hour 48,321.52 Training hours to employees per capita Hour/capita 4.43 Proportion of trained employees % 100 Training hours to fresh graduates Hour 14,524 Training hours to fresh graduates per capita Hour/capita 82 employees of Voluntary contributions Person 322 Voluntary contributions Thousand 18.9 Targeted poverty alleviation Thousand 230 Social welfare activities Thousand 500 LongShine Technology Co., Ltd. Environment, Social and Governance (ESG) Report 2021 69 Feedback Form Dear readers: Hello! Thank you very much for reading the Environmental, Social and Governance (ESG) Report of LongShine Technolo- gy Group Co., Ltd. in 2021. We attach great importance to and look forward to hearing your feedback on the sustainable devel- opment management, practice and information disclosure of LongShine technology. Your opinions and suggestions are an important basis for us to continuously promote the management and practice of sustainable development. We look forward to your reply! Selective questions (Please tick √ in the corresponding position) 1. Do you think this report can reect the signicant impact of LongShine Technology on economy, society and environment? Yes □ General □ No □ 2. Do you think the analysis of the stakeholders identied in this report and their relationship with LongShine Technology is accurate and comprehensive? Yes □ General □ No □ 3. Do you think the information provided in this report is comprehensive? Yes □ General □ No □ 4. 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