CSR Annual report of Chongqing Sichuan Instrument Microcircuit Co., Ltd. 

（2010）

1.  Introduction

    Corporate's social responsibility refers to the corporate's efforts to maximize profit while responding to the overall development of the country and society, the natural environment and resources, and shareholders, creditors, customers, employees, consumers, suppliers, communities, and other stakeholders responsibility.

With the development of economy and the progress of society, corporate's social responsibility is increasingly being taken care of by people and becomes an important criterion for measuring the merits and demerits of a corporation. Chongqing Sichuan Instrument Microcircuit Co., Ltd. (hereinafter referred to as "the corporation" or CSIMC) has always paid attention to the realization of the corporation's social value. While pursuing the corporation's economic benefits, it treats and protects other stakeholders with integrity, strives to promote environmental friendliness and resource conservation, and actively participates in charity and donate to social welfare, and expects to influence and spur the rejuvenation of the local economy through its own development, and promotes the coordination and harmonious development of the corporation with society, communities and nature.

2.  CSR Vision and Strategy

The corporation always persists in carrying out valuable business. At the same time, based on “Customer Supremacy”, it provides products and services that satisfy customers, and strives to establish the image of “CSIMC with progressive spirit”. While realizing the role of economy, the corporation must pay full attention to the social significance of CSIMC, strengthen awareness of environmental protection, and conduct activities honestly in order to continuously improve corporation value.The corporation continued to improve each employee's understanding of CSR, strengthen corporate governance, consolidate the operational basis for achieving CSR, and make positive contributions to society,The corporation attaches great importance to two-way communication with investors, fulfills its responsibility for explaining CSR, and pursues continuous improvement of CSR activities based on feedback.

3  Social Contributions

While developing its own economy, CSIMC actively participates in social welfare activities such as science and education health, community construction, donation assistance, poverty alleviation, etc. in the corporation's area to promote regional development.

In 2010, the corporation continued to donate to counterpart poverty alleviation districts and counties (Shibaozhai, Zhong County, Chongqing), accumulatively donated CNY¥ 180,000 ,and provided 134 new jobs for the region in the same year. The senior management of the corporation also annually donated a total of more than CNY¥ 10,000 to the “Difficulty Help Fund” established by the corporation in 2006. The "Difficulty Help Fund" has paid accumulatively more than CNY¥ 40,000 for seriously afflicted and distressed employees.

4.  Environment and sustainable development

4.1 Environment and Protection

As an industrial production enterprise, the corporation is guided by building a conservation-oriented society and enhancing its sustainable development capabilities, promoting the conservation and comprehensive utilization of resources such as energy and land, and improving the efficiency of resource utilization.The corporation has accelerated technological progress in energy saving and environmental protection, actively promoted equipment renewal and technological transformation with energy saving and emission reduction as the main goals, and adopted new equipment, new processes and new technologies that are conducive to energy conservation and environmental protection.The greatest economic and social benefits are obtained with as little resource consumption and environment as possible.

The corporation has long-term research and development of the surrounding environmental protection policies, assigns personnel responsible for the establishment, implementation, maintenance and improvement of the surrounding environmental protection system, and provides the necessary human and material resources and technical and financial support for environmental protection work.

The corporation takes the initiative to accept the supervision and management of the local environmental protection department, and strictly implements the opinions on rectification proposed by the local environmental protection department.

The corporation has built a ROHS6 production line that can fully meet the customer's ROHS6 requirements, and at the same time do a good job in product design, production, packaging, storage, transportation and other aspects of the work to ensure that customers' rights are not compromised.

4.2 Occupational health and safety

The corporation establishes and improves the labor safety and health system, strictly implements the relevant national labor safety regulations and standards, conducts labor safety and health education for employees, provides employees with a healthy and safe working environment and living environment, and minimizes the labor accidents, reducing occupational hazards.

The corporation has established a sound safety management organization in accordance with the relevant national safety production regulations and fire safety management requirements, equipped with safety production management personnel that are compatible with the scale of production and operation of the corporation and the level of technological development, and has formulated and continuously improved the responsibility system for safety production. The core rules and regulations actively take various measures to provide employees with a healthy and safe working environment and living environment.

4.3 Energy Saving and Emission Reduction

Advocate and popularize the concept of protecting the environment and saving energy inside and outside the corporation and turn it into a part of the corporate culture;

The corporation develops and sells products that are as effective as possible for environmental protection and energy saving;

The company controls the procurement process and uses energy-saving and environmentally friendly equipment as much as possible;

The corporation has established and improved rules and regulations for saving resources and energy and protecting the environment, and supervising implementation.

The corporation actively promotes energy-saving and emission reduction, reduces consumption, and advocates that all employees save every single kilowatt of electricity, every sheet of paper, every drop of water .On the basis of the introduction of electronic network tools such as computerization and intranets, the office will basically be paperless. In 2017 the corporation's output value energy consumption per ten thousand yuan decreased by 8% year-on-year.

Following the ISO14001 environmental management system certification in 2006, it later passed the re-evaluation certification every year.

4.4 Labor Protection

The corporation protects the legitimate rights and interests of employees according to the "Labor Law." In accordance with the relevant regulations and standards, the corporation has formulated a remuneration and welfare system including social security and medical insurance, and signed "labor contracts" with all registered employees. The corporation adhering to the "people-oriented" business philosophy, follow the principle of distribution according to work, equal pay for equal work, established a systematic and standardized performance appraisal system for different positions, conduct a comprehensive, objective, fair and accurate assessment of employees' performance of duties and tasks. The corporation introduced salary incentives such as variable bonuses linked to performance to introduce compensation management, which greatly mobilized the enthusiasm and creativity of employees.

The corporation implements special labor protection for female employees in accordance with the relevant provisions of the Women's Rights and Interests Protection Law, respects the personality of employees, cares for employees, and ensures the harmonious and stable relationship between labor and capital. Completed a physical survey of female employees in 2017.

The corporation has established the system of selecting directors and employee supervisors according to the “Company Law” and the Articles of Association, ensuring that employees enjoy full rights in corporate governance; supporting trade unions to carry out their work in accordance with the law; Employees' opinions are heard in the form of employee representative meetings, matters that involve the vital interests of employees such as wages, benefits, labor safety and health, social insurance, etc. and care about and value their reasonable needs.

The corporation has never interfered with the freedom of belief of its employees. It has never discriminated against employees for reasons such as employment, remuneration, training opportunities, promotion, dismissal or retirement due to ethnicity, race, religion, gender, age,etc.

4.5 Training and Promotion

The corporation has established a vocational training system, withdraws and uses funds for vocational training in accordance with national regulations, actively develops employee training, and encourages and supports employees to participate in amateur training and provides more opportunities for employee development.

4.6 International Standards and Regulations

The corporation introduced the ISO14000 environmental management system to publicize and implement the corporation's environmental protection policies and improve the environmental awareness of all employees.

5.  Supply Chain CSR

5.1 Supplier CSR Policies and Requirements

The Type A production suppliers are required to implement CSR management in strict accordance with our CSR policies and requirements.

5.2 Supplier CSR Certification

5.2.1 Approximately 2% of the percentage of suppliers who are critical to our corporation are required to pass CSR certification.

5.2.2 Requirements for other important suppliers to pass ISO9000, ISO14000 and ROHS6 agreements.

5.3 Supplier CSR Risk Management

For suppliers that require CSR certification, they must strictly follow the five steps of CSR risk management (ie, risk planning, risk identification, risk assessment, risk management and risk monitoring), and perform monitoring inspections on suppliers from time to time.

5.4 International Standards and Regulations

    The corporation fully implements relevant international standards and regulations, and strictly follows the general specifications of the MTL-T-21038D low-power electronic transformer, the GB/2828.1 count sampling inspection program, and the GB8554 transformer and inductor test and experiment program for electronic and communications equipment, IPC-A-610D electronic assembly acceptance criteria, ROHS2002/95/EC directive and European automotive REACH EC/1907/2006 regulations and other standards during the actual procurement process.

6.  Employee

6.1 Code of Business Conduct

As a manufacturing corporation, the corporation deeply understands the co-existence and common development of fish and water symbiosis between upstream and downstream. To this end, the corporation regards honesty and trustworthiness as the foundation for enterprise development, establishes a strategic partnership with suppliers and customers, fully respects and protects the legitimate rights and interests of suppliers and customers, and never infringes the trademark rights of suppliers and customers. Intellectual property rights such as patents, strictly protects the confidential information and proprietary information of suppliers and customers, and maintains a long-term good relationship of cooperation.

6.2 Operating Environment

    The health and safety of employees and the working environment and living environment are always the top concerns of the corporation. The corporation has established a series of labor safety and health systems including the "Safety Production Responsibility System" and "Labor Protection Products Distribution Management Measures." In 2017, the corporation carried out various special inspection and management activities for hidden dangers, implemented corrective measures for hidden dangers, and created a safe working environment and living environment through the implementation of various systems and labor protection measures.

6.3 Career Development

    The corporation pays attention to employee training and career planning, actively develops employee training, cooperates with colleges and universities to run schools, organizes employees to participate in professional knowledge and special closed training, encourages and supports employees to participate in amateur training, strengthens job title review, and strives to enhance their quality and comprehensiveness. Ability to provide more opportunities and a broader arena for the development of employees.The corporation has established employee career planning in 2009 and is implementing it gradually as planned in 2010.

6.4 Staff Club

The corporation attaches great importance to communication with employees，convenes employee forums from time to time, organizes employee satisfaction surveys, and conducts one-on-one interviews with department heads and employees to listen to employees' opinions.Through the creation of an internal publication "Micro Circuits Company Briefing", the bridge between the corporation and employees was established, making it an important platform for the corporation to communicate information internally, exchange experiences, display achievements, commend advanced skills, boost morale, show itself, and strengthen corporate culture.The corporation and the labor union have staff reading rooms and more than 1,500 books.

                                    Chongqing Sichuan Instrument Microcircuit Co., Ltd

                                           April 6, 2017