Zhumadian Henan Valiant Braking System Corporation.

Social Responsibility Report (2021)

I. Corporate Governance System

Good corporate governance is the intrinsic driving force behind a company’s sustainable development. Since... 2013 Since its establishment, the company has seamlessly integrated corporate governance with production and operational activities. In strict accordance with the requirements of the Company Law and relevant national laws, regulations, and rules, the company has established a modern enterprise system, refined its corporate governance structure, and standardized its operational procedures. A systematic and scientific set of rules has been put in place, based on the company’s Articles of Association and underpinned by key frameworks such as the Rules of Procedure for the Shareholders’ Meeting, the Rules of Procedure for the Board of Directors, the Rules of Procedure for the Supervisory Board, and the Detailed Work Procedures for the General Manager. This has created a balanced mechanism of checks and balances among the shareholders’ meeting, the board of directors, the supervisory board, and management, ensuring healthy operation of all business activities—including production and operations—and achieving the company’s sustainable and sound development.

II. Company Development

Focusing on the themes of reform and innovation, the company has thoroughly implemented the Scientific Outlook on Development, innovated its marketing strategies, proactively responded to market changes, pursued independent innovation, placed great emphasis on financial budgeting and cost assessment, strengthened its ability to defend against and control risks, and thereby continued to drive sustained and rapid growth in its business performance.

We attach great importance to product R&D and technological innovation, continuously enhancing our mechanical manufacturing capabilities. We remain committed to management innovation and the promotion of standardization, gradually moving toward refined management. Among the company’s most prominent and significant achievements in establishing a green factory is the groundbreaking innovation in production technology and processes. By adopting a single-step spin-forming process combined with centrifugal casting, we have revolutionized the manufacturing of automotive brake drums—completely transforming the traditional casting-based production method. This innovative approach has eliminated the four highly polluting and energy-intensive steps—“sand mixing, mold making, core production, and core setting”—that were integral to conventional brake drum production. As a result, our new process is not only more efficient and energy-saving but also cleaner and more environmentally friendly, truly achieving energy conservation, emission reduction, and green environmental protection.

2020 The company’s product output and sales volume have continued to rise significantly, with sales of lightweight bimetallic composite brake drums. 82 Ten thousand units, single-product sales revenue 3.1 100 million yuan, profits and taxes 2500 Ten thousand yuan. 2020 Annual projected compound brake drum production and sales 120 Ten thousand items, total revenue 4.5 100 million yuan.

The company’s domestically first-developed bimetallic composite brake disc for commercial vehicles has entered the small-batch production phase, has been granted a patent, and has... 2020 Year 6 The company has begun construction of a brake disc factory, and it is expected... 2021 To be completed by year-end; upon reaching full production capacity, annual output can reach... 200 Ten thousand units, annual sales revenue 8 100 million yuan, profits and taxes 7500 Ten thousand yuan.

The aluminum alloy forged wheel hub jointly developed by the company and Beijing Jiaotong University has been successfully developed, and the production facility for this product is currently under construction.

III. Product Management

The product’s manufacturing process is at a leading level domestically. The company’s developed bimetallic composite brake drum, along with its associated technologies and processes, has successfully broken the U.S. technological monopoly and surpassed domestic competitors in the same industry. This technology... 2016 Received the Second Prize for Scientific and Technological Progress in China's Machinery Industry in that year. 2017 Year, 2018 The company has separately won the Excellence Award in the 6th and 7th China Innovation and Entrepreneurship Competitions, as well as being recognized as an Excellent Enterprise in the 9th and 10th Henan Province Innovation and Entrepreneurship Competitions. 2017 In the same year, it won the second prize in the first “Yu Chuang Tian Xia” Competition held by Henan Province. 2018 In the same year, it was named among the “Top 10” in the Henan Province finals of “Maker China.”

Product research and development and technological innovation have achieved outstanding results and have received full recognition from the government and all sectors of society. Over the past several years, HJZD Company has successively been recognized as a National High-Tech Enterprise, a National Science and Technology-based Small and Medium-sized Enterprise, a “Specialized, Fine, Distinctive, and Innovative” High-Quality SME in Henan Province, a Green Leading Enterprise in Henan Province, a Green Factory in Henan Province, a Key Pre-IPO Reserve Enterprise in Henan Province, and the Henan Provincial Engineering Technology Research Center for Lightweight Composite Brake Drums. 2018 Recipient of the Annual Special Fund for Advanced Manufacturing, Henan University of Science and Technology Industry-University-Research Base, Top 30 Strategic Emerging Enterprises in Zhumadian City, Zhumadian City 2017 Outstanding Enterprise for Innovative Development in the Industrial Economy, Excellent Non-Public Enterprise of Zhumadian City, Top Ten Landmark Equipment Manufacturing Enterprises of Zhumadian City, Zhumadian City 2018 Recipient of the Annual Mayor's Quality Award.

The product quality has also been recognized and affirmed by customers. The company has launched the construction of a “Quality Management System,” vigorously promoting the “craftsman spirit” and rigorously focusing on quality management details on the production line every day. We have established a product quality tracking system, with each outgoing product equipped with information such as a QR code—effectively giving each product an “ID card.” Our products have successively passed the inspection and testing reports from two national-level laboratories: Shaanxi HanDe Axle and Liuzhou FangSheng Axle. Our products are now supplied in配套 fashion to China’s top five automakers—FAW, Dongfeng, Sinotruk, Shaanxi Automobile, and Beiqi Foton—and we have already begun exporting them in large quantities to the United States. The demand for our products far exceeds supply, making our company the hidden champion in China’s bimetallic composite brake drum industry. Our products’ quality and performance have reached internationally leading levels.

IV. Talent Development

The company has introduced a series of preferential policies and implemented measures to attract and recruit talented individuals, ensuring that they genuinely feel our commitment is sincere and heartfelt—making them happy to join us and satisfied with their work. Thanks to these efforts, in recent years we have recruited numerous engineering and technical personnel from across the country who hold at least an associate’s degree and possess mid- to senior-level professional titles. 50 Multiple individuals provide a talent guarantee for the enterprise’s technological innovation and development.

The company places great emphasis on enhancing employee quality. It has formulated and implemented company-wide... - Department - The workshop (team) “three-level education” training mechanism conducts assessments every two months for newly hired and transferred employees, comprehensively gauging their safety awareness and technical operational proficiency. The company places great emphasis on training in safety and technical operating procedures as well as identifying risks during work processes. Within the workshops, “mentor-apprentice” skill-training programs are actively implemented, and a wide range of on-the-job training sessions have been organized and carried out cumulatively. 400 A total of [number] person-times, ensuring that employees taking up their posts meet the technical standards of skilled workers.

The company pays close attention to the occupational health and well-being of its employees, has launched the construction of an “Occupational Health System,” provides free pre-employment medical examinations for employees, and organizes periodic medical checkups. Currently, occupational health records have been established. 400 We have safeguarded employees’ health rights by strengthening training on occupational health knowledge and promoting the “Handbook for the Prevention and Control of Occupational Diseases,” thereby continuously enhancing employees’ awareness of self-protection. We have also intensified supervision and management over the distribution and use of personal protective equipment, ensuring strict compliance with industry standards in the allocation and issuance of such equipment, and promptly correcting any improper use of PPE during routine inspections.

Most of the company’s employees come from rural areas and, under current social conditions, their living standards are still relatively modest. Guided by the employees’ immediate interests and fundamental needs, the company has addressed their housing issues. Moreover, the dormitories are equipped with amenities such as air conditioners, water heaters, and washing machines. The company provides meal services to its employees at prices below cost, and frequently organizes free meal events. Workshop workers receive two free additional meals each day, ensuring that employees can eat their fill and enjoy high-quality meals at prices significantly lower than those on the market.

The company’s union is conducting registration and assistance activities for employees living in poverty, starting from... 2015 Cumulative assistance provided to employees since the year. 40 Number of person-times, relief funds 8 Ten thousand yuan. At the same time, the company actively fulfills its social responsibilities by providing support through various means—including employment recruitment, material donations, and cash contributions—to impoverished rural areas and disadvantaged college students. The total value of donated materials amounts to... 310 Over ten thousand yuan.

V. Environmental Protection

The company attaches great importance to environmental protection efforts and firmly adheres to the development philosophy that “lucid waters and lush mountains are invaluable assets.” It strictly implements the new requirements and arrangements set forth by the 19th National Congress of the Communist Party of China regarding ecological civilization and environmental protection, making environmental protection an integral part of its corporate sustainable development strategy. The company places high priority on energy conservation, emission reduction, and environmental governance, actively fulfills its social responsibility for environmental protection, and proactively pursues environmentally friendly and resource-efficient development. It strives to forge a path that balances economic and social benefits while promoting harmonious development between enterprises and the surrounding environment.

The company is increasing its investment in environmental protection facilities and equipment. 150 Over ten thousand yuan, including 4 Set up dust removal equipment for electric furnaces, 2 Photocatalytic environmental protection equipment, 2 Pulse dust removal equipment set, 2 Including plasma dust removal equipment, online dust monitoring devices, and secondary dust collection systems for flue gas and particulate matter; the company has optimized its production processes by establishing enclosed, automated spray booths and installing spray water curtains to minimize the escape of smoke and dust.

The company has strengthened its environmental protection system management and construction, earnestly implemented the responsibility system for environmental protection work, and initiated the development of both the “Environmental Management System” and the “Energy Management System.” Environmental management indicators have been integrated into every stage of the product production process. A target responsibility system has been established, spanning from senior and mid-level management down to team-level operations, thereby creating a comprehensive management network. An online monitoring system has also been set up to promptly report on production-related pollutant discharge. Personnel found lacking in or negligent about environmental protection management will be subject to performance evaluations, ensuring that responsibilities are clearly defined and rewards and punishments are strictly enforced.

The company is strengthening the promotion of environmental protection concepts by using various forms such as slogans, brochures, and bulletin boards to disseminate environmental knowledge and enhance employees’ environmental awareness. The company is also intensifying its efforts to improve the appearance and environment of the plant premises, implementing beautification, hardening, greening, and lighting projects in the construction and management of the factory area, and planting various types of trees. 1000 Remaining trees, green area 2 Over 10,000 square meters, green space ratio 27.57% . Company use OA Office System Finance ERP Employ modern information technology tools such as management systems and internal networks to promote paperless office operations and actively advance the construction of a resource-saving society.

The company encourages employees to engage in technological innovation and invites all staff to participate in a campaign to solicit rationalization proposals under the theme of “Energy Conservation, Cost Reduction, Increased Production, and Enhanced Efficiency.” Employees are encouraged to propose innovative improvements in areas such as waste recycling, optimization of production systems, and equipment upgrades, thereby reducing energy consumption, enhancing resource recycling, and further advancing energy-saving and emission-reduction efforts.

Through technological innovation, the company has revolutionized and transformed its production processes, completely eliminating the four highly polluting and energy-intensive procedures—mixing sand, molding, core making, and sand removal. This change allows the company to save nearly renewable mineral resources such as molding sand, coal powder, and bentonite each year. 2 Ten thousand tons, while simultaneously reducing solid emissions by nearly 2 Ten thousand tons. Moreover, this product is lighter than conventional products. 20%-30% can carry more goods each year 9000 Ton, save fuel 1.8 Ten thousand tons, saving fuel costs. 1.25 hundred million yuan. If widely implemented nationwide, it could save non-renewable mineral resources annually. 800 Ten thousand tons, while reducing solid emissions. 800 Ten thousand tons, annually transporting multiple types of goods. 180 Ten thousand tons, annual fuel savings 360 Ten thousand tons, annual fuel cost savings 250 100 million yuan. This project will break the U.S. technology monopoly and has high potential for widespread application, yielding significant economic, social, and environmental benefits.

Zhumadian Henan Valiant Braking System Corporation.