Supply Chain Management Policy

Updates on 01 Jun,2023

I. Purpose

Concord New Energy Group Limited ("the Group") is devoted to the responsible management of its supply chains by discipling and supervising suppliers and contractors to fulfill their environmental and social responsibilities. The Group prefers suppliers with higher standards who share the same sustainability philosophy with the Group.

II. Administrative Rules

The management of the Group's suppliers entails the following measures:

• Adhere to the principle of fair, just and open tendering and procurement.

• At the beginning of the bidding stage, the qualification requirements for bidders are announced on the official website, such as personnel professional qualification certification, quality, environment, occupational safety and health management system certification, and integrity performance certification, etc. Suppliers will be notified for purchasing bidding documents after they have passed the qualification examination.

• Establish a list of qualified suppliers: the approved suppliers must meet the entry requirements of strong supply capacity, stable quality, and good reputation. Suppliers are audited by the Group in terms of their qualifications, EHS management skills, and legal risks.

• For key commodities purchased, the Group organizes internal procurement management team to carry out on-site assessment of suppliers and engages external third-party companies to strictly control the quality of the purchased commodities in accordance with relevant domestic and international product specifications and technical agreement standards, to safeguard the stability of the equipment operation. Suppliers will take rectification measures if they fail the assessment, and those who still assessed to be unqualified after multiple rectifications will be removed from the list of qualified suppliers.

• Supplier evaluation and assessment: annual assessment is conducted, during which various indicators are evaluated, with a focus on supplier profitability, product quality, governance structure, service awareness, sustainable development, corporate reputation, performance capability, etc. Suppliers assessed to be unqualified shall be removed from the list.

• Suppliers are required to sign an Integrity Commitment Pact, which is publicized during the bidding process.

• The contract clearly requires the contractor to comply with laws and regulations of employment, labor, health and safety to protect the legitimate rights and interests of employees.

• While performing the contract, the Group strictly supervises and assesses the contractor to ensure that its safety and quality management is up to standard.

III. Policy Review

The Group will carry out periodic review of the effectiveness of this policy.