Overall 

Zhejiang Sanhua Intelligent Controls Co., Ltd. (hereinafter referred to as "Sanhua Controls" or "the Company") is committed to strict compliance with applicable laws and regulations, ensuring that employees conduct business with the highest ethical standards. We engage with customers, suppliers, and subcontractors with integrity and fairness to achieve sustainable, high-quality development.

The company attaches great importance to the management of integrity, strengthens the ability to supervise the integrity of key partners such as suppliers, and prevents employees in risk positions from engaging in conflicts of interest and unfair competition. The company pays attention to the confidentiality requirements of customers, employees and suppliers personal information, and standardizes the safe use and management of information networks.

Scope

This statement applies to all employees of Zhejiang Sanhua Intelligent Controls Co., Ltd. and its wholly-owned subsidiaries and controlled subsidiaries. The Company expects third-party partners, including suppliers, service providers, distributors, contractors, and other business associates, to actively comply with this statement or equivalent policy requirements.

Internal audit and supervision

The audit department of the company is responsible for formulating internal audit system, improving risk management system, and continuously promoting comprehensive risk management from the process management of risk identification, assessment, response and improvement, crisis response.

The companys supervision group is responsible for formulating business ethics management policies, carrying out business ethics management work, performing supervision and inspection duties, establishing channels for appeal and report, and investigating and handling the reported cases.

The companys legal department is responsible for identifying, monitoring and checking the compliance of production and operation process according to relevant laws and regulations.

The company has an information security department and an infrastructure department to plan the overall network architecture of the company and guide the network security management of each business segment; each business segment ITBP implements the specific requirements of management norms.

Sanhuas action commitment

1.Employee integrity management

The company adheres to zero tolerance for corruption, insists on investigating all cases and punishing all corruption, and has formulated relevant documents such as supervision work methods, integrity return visit system, integrity self-discipline cooperation agreement, employee integrity self-discipline agreement, and employee gift acceptance management measures, so as to protect the interests of individuals and enterprises from infringement and create a fair, open and just clean working environment.

· The company promises that 100% of the employees sign the "Employee Clean Self-discipline Agreement", carry out daily clean training and publicity, and send clean reminder messages to the employees before traditional festivals.

· The company strictly prohibits employees from accepting rebates or commissions in any form from partners in business or external exchanges.

· The company requires employees to truthfully and fully hand over the gifts received to the company. If the value of the gifts received by employees exceeds the amount stipulated by the company, they should be returned in principle. If they cannot refuse or return the gifts, they should register them with the supervision liaison within 30 days from the date of receiving the gifts.

· The company regularly combs the basic information of employees in risky positions, carries out risk assessment of business behaviors, and forms a classified supervision and management plan.

· Objective of clean training: The coverage rate of anti-corruption training for procurement personnel should reach 100% every year.

2.Protection of informants

The company actively unblocks all kinds of reporting channels, gives play to the supervision role of employees and external affiliated units, and protects the legitimate rights and interests of informants.

· The company has formulated regulations on the management and disposal of reporting clues to encourage employees to report violations of business ethics.

· Each business unit of the company has set up a physical reporting box, and posted a publicity announcement to clarify the contents of reporting and appeal. The reporting methods include web page, telephone, email, official account, wechat, physical reporting box, etc.

· The company pays attention to the protection of informants, allows anonymous or pseudonymous reporting, and strictly protects the information of informants in all links such as acceptance, registration, storage and investigation.

· The company strictly prohibits retaliation against informants, and any form of retaliation will be investigated for criminal responsibility in accordance with national laws and regulations.

3. Supplier clean management

The company provides a good competitive business environment for suppliers, promotes long-term and stable cooperation between the company and suppliers, and strengthens the ability to supervise the integrity of suppliers and other key partners.

· The company requires the supplier not to violate the Supplier Code of Conduct, prohibit any form of seeking improper interests in the economic activities between the two parties, and put an end to black box operation, commercial bribery and improper transactions.

· The company requires suppliers to comply with laws and regulations, be honest and trustworthy, compete fairly, protect intellectual property rights, standardize marketing behaviors, and strictly prevent theft, infringement of others property and dissemination of false information.

· The company requires suppliers to sign and abide by the "Integrity Cooperation Agreement", and conducts special publicity on integrity for suppliers and subcontractors.

· Supplier integrity management target: more than 90% of all suppliers sign the "Integrity and Self-discipline Cooperation Agreement" every year.

4. Prevent conflicts of interest

The company strives to avoid conflicts of interest between employees and the company, is committed to identifying and prohibiting such conflicts of interest, and avoids the influence of private interests in personnel appointments.

· The company requires employees to strictly manage and restrain their specific relations, including spouses, children and parents of both spouses, children and spouses of parents, and other people with common interests. If employees specific relations accept gifts from partners, employees should register or hand them over according to regulations.

· The company strictly prohibits employees from engaging in or instructing others to engage in or invest in economic activities that are competitive with the company or have conflicts of interest, as well as engaging in economic activities that conflict with their job responsibilities.

· The company strictly prohibits employees from having employment or investment relationship with the companys customers, suppliers or competitors.

· Objective of preventing conflicts of interest: conduct annual internal audit on the risks of business activities, identify conflicts of interest risks, improve countermeasures, and audit 100% of employees in risk positions.

5. Anti-unfair competition

The company complies with the Anti-Unfair Competition Law of the Peoples Republic of China and the Anti-Monopoly Law of the Peoples Republic of China, participates in business competition on the principle of fairness and honesty, and refuses to seek competitive advantage through unethical and illegal business practices.

· Anti-unfair competition: conduct annual internal audit on the risks of business activities, identify the risk level of unfair competition, improve countermeasures, and audit 100% of employees in risky positions.

6.Abide by business ethics

· The company undertakes to abide by the Anti-Money Laundering Law of the Peoples Republic of China, prohibit any money laundering in business activities, and prevent illegal money from being introduced into the legal commercial and financial system.

· The company promises that the publicity and description of products and services are true, and prohibits employees from making false, misleading or deceptive statements about competitors or their products.

7.Ensure information security and personal privacy

· The company places a high emphasis on the construction of safety management, paying close attention to the confidentiality requirements of personal information for customers, employees, and suppliers. It continuously improves its information security management system to comply with ISO/IEC 27001 standards, enhancing the information security awareness of all staff. This ensures the confidentiality, integrity, and availability of all information in every aspect of business operations, prevents information security incidents, enhances public trust, and boosts the companys competitiveness.

· The company standardizes the safe use and management of information network, and formulates systematic management procedures and norms such as "Information Security Risk Management Procedure", "Information Security Management System Manual", "Office terminal security management Specification" and "Third-party network security management Specification", so as to ensure the smooth operation of information network and the safe use of computer resources.

· The company requires all employees and qualified suppliers to sign the "Confidentiality Agreement" to prevent relevant parties from leaking IT information.

· Information security management objectives: receive no more than 2 complaints from customers about information security incidents per year, and no more than 2 internal level 1 information security incidents per year. All technical personnel should participate in information security knowledge popularization training at least once per year.

Implementation and review

· The companys audit department will regularly review the contents of this statement to ensure that it meets the latest legal and regulatory requirements and ensures the effectiveness of the business ethics management system.

· The companys supervision team and the legal department shall regularly review the implementation of this statement, initiate accountability and punishment procedures for employees who violate the management provisions of business ethics, and impose oral criticism, assessment or termination of labor contract penalties according to the seriousness of the violation of the standards of this statement, so as to ensure that employees comply with the commitments made in this statement.