The Company deeply understands the needs and expectations of its employees. We have formulated a remuneration and benefits policy that aligns with our employees' actual needs, improved policy systems for the management of gross payroll and medium/long-term incentives, continuously optimized the multi-dimensional salary system including basic wage, allowances, subsidies, and performance bonuses, guaranteed that the above policies cover all employees of the Company, established a scientific performance review system, and consistently ensured that the distribution of remuneration and benefits is fair and just, in order to motivate employees to work enthusiastically and creatively.

The Company implements a relatively standardized remuneration system, which mainly consists of an annual salary system for senior management, a position-grade salary system for middle and lower management and technical personnel, a skill-based salary system for operational personnel, and an agreement-based salary system for scarce talents and easily replaceable positions. We continuously improve our market-oriented remuneration distribution mechanism, ensuring that pay increases align with the labour market and are linked to the Company's economic efficiency and labour productivity. We have also revised policies to support the introduction of core talents and other innovation, incentives, and safeguarding measures. Furthermore, we have optimised our remuneration structure in line with the principle of "equal pay for equal work", improved our internal distribution system, and continued to prioritise the distribution of remuneration to grassroots frontline personnel, those in key challenging positions, and professional and technical staff. Targeted incentives and competitive compensation have been provided to key employee groups, with ongoing focus on high-end operational and management talents, core R&D talents, and high-skilled leaders.The Company has formulated and implemented performance appraisal and remuneration management measures for senior management, stipulating that their remuneration primarily consists of a basic annual salary, a performance-based annual salary, term incentives, and other benefits. The Company sets annual performance targets and conducts multi-dimensional appraisals of employees and their teams, with remuneration linked to the appraisal results. During this process, the Company maintains active communication with employees to ensure that the performance appraisals are aligned with the actual requirements of their positions.

Key indicators such as net profit, economic value added, and return on net assets are incorporated into the performance assessment system for president. Annual performance evaluations are conducted, and the assessment results are linked to the president's annual performance-based salary and term incentive income.Every year, the performance of senior management and employees of the affiliated enterprises is evaluated from multiple dimensions, and the evaluation results are linked to their salaries for implementation. During this process, sufficient communication and coordination are ensured to guarantee that performance evaluations reflect the realities of each position. In the meantime, we have established a sound clawback and malus mechanism for the salaries of senior management personnel. In case senior management personnel violate national laws, regulations, and relevant company policies, or they fail to fulfill or fulfill their duties incorrectly, resulting in losses of the Company's assets, the performance-based annual salary and term-based incentive income of senior management personnel shall be recouped and deducted in accordance with the regulations.

The Company strictly adheres to the provisions of the Social Insurance Law of the People's Republic of China, making punctual and complete payments for the five categories of social insurance: basic pension, basic medical, work-related injury, unemployment, and maternity insurance. Also, in light of our actual situation, the Company provides enterprise annuity and corporate health insurance for employees. We have established and will consistently refine our enterprise annuity and corporate health insurance systems, implementing unified coverage for serious illness protection programmes, offering relevant benefits for all employees, and effectively protecting employees' rights and interests.