2024 Yantai Cash Industrial Co., Ltd. Nickel Supply Chain Due Diligence Assessment Summary Report(1)

LME-listed Brand

CASH (Nickel)

Assessment Type

☑Main Assessment         □Tracking Assessment

Assessment Result

□AAA                              □AA                               ☑A

□B

□C

Assessment Firm

China Quality Mark Certification Group

Assessor

Lu Da, Wang Jinghan

This assessment program is an independent third-party assessment conducted by China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC) based on Chinese Due Diligence Guidelines for Mineral Supply Chain  (Second Edition), aiming to assess the performance of the company's due diligence management system and process, and support the company to identify the gaps that need further improvements and develop corresponding improvement measures.

Basis of the Assessment

The assessment is based on Chinese Due Diligence Guidelines for Mineral Supply Chain (Second Edition), hereinafter referred to as the Guidelines. The

companies shall meet the content of "Companies should" in the Guidelines. "Companies should" refers to specific requirements of the Guidelines for companies ’ due diligence management, as well as the specific refinement of the requirements, which is consistent with the OECD Due Diligence

Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (Third Edition).

Explanation of Conformity Degree

Conformity: Indicates that the company's management system, policies, procedures or processes meet the requirements of corresponding provisions of the Guidelines.

Need improvement: Indicates that the company’s management system, policies, procedures or processes partially meet the requirements of corresponding provisions of the Guidelines, but lack some necessary elements or content, or can not prove or lack evidence to prove that they  are substantively functional, and further measures are needed to improve its performance.

Non-conformity: Indicates that the company's management system, policies, procedures, or processes cannot meet the requirements of corresponding provisions of the Guidelines, resulting in systematic and repetitive non-conformities.

Not applicable: Indicates that corresponding provisions of the Guidelines do not apply to the Company. Zero tolerance: If any of the following situations occurs, it is a "zero tolerance" situation.

Explanation of Assessment Results

The overall assessment result is based on the percentages of "non-conformity" items and "need improvement" items. The China

Chamber of Commerce  of Metals, Minerals  & Chemical Importers & Exporters (CCCMC) provides the following suggestions on the assessment results:

Level  AAA:  There  is  no  "non-conformity"  items,  indicating  that  the  company  has  excellent  supply  chain  due  diligence  management performance.

Level AA: the percentage of "Need improvement" items does not exceed 15% of all applicable items, and the percentage of "non-conformity" items does not exceed 5% of all applicable items.

Level A: the percentage of "Need improvement" items does not exceed 25% of all applicable items, and the percentage of "non-conformity" items does not exceed 10% of all applicable items.

Level B: the percentage of "Need improvement" items does not exceed 35% of all applicable items, and the percentage of "non- conformity" items does not exceed 20% of all applicable items.

Description of Assessment Type

The assessment is divided into main assessment and tracking assessment. The main assessment needs to be carried out once a year. The tracking  assessment is conducted every six months or during there-assessment (main assessment) based on the conformity degree and assessment results.

Location

No. 215, Xingfu Road, Yantai, Shandong Province, China

Profile Number

DDMSC-CNNiCo0103

Result

□ Level AAA

□ Level AA

口 Level A

□ Level B

□ Level C

LME-listed Brand

CASH (Nickel)

Types of Materials

口 Mine materials                                     □ Recycled materials                                 □ Both

Assessment Period

口  12 months: 1/10/2023-30/9/2024                □ Less than 12 months:

Develop and adopt due diligence policy

The company formulated and approved Aluminum Supply Chain Due Diligence Policy, in line with the requirements of the Chinese Due Diligence Guidelines for Mineral Supply Chain.

Structure appropriate internal management systems

The company has established a Supply Chain Due Diligence Management Committee, setup a Joint Office for Supply Chain Due Diligence Management across departments, responsible for the operation of the supply  chain  due  diligence  management   system  and  assigned  the  responsibility   of  due   diligence management to relevant management and employees.

Establish a system of controls and transparency over the supply

chain

The company has established a supply chain control and transparency system and developed a Supplier Classification Management Procedure to collect and understand the company's mineral supply chain traceability information. For suppliers that trigger warning signs, the company required to further collect mineral supply chain traceability information needed for reviewing supply chain warning signs.

Strengthen engagement with suppliers

The company has formulated the Responsibility Contract Terms, Supply Chain Due Diligence Management Statement and Commitment, and Supplier Code of Conduct, requiring suppliers to sign these documents to ensure their compliance with supplier policies aligned with the company's due diligence management

Establish a company level

grievance mechanism and/or participate an industrial level grievance mechanism

The company has established the Grievance Mechanism for Supply Chain Due Diligence which includes record,  response  and  settlement  of  the  grievance.  The  Company  has  identified  and  committed  to participating in the grievance mechanism at the industry level.

Step 2: Risk Identification and Assessment

Conduct warning signs review,    and identify the scope of the risk assessment of the mineral supply chain based on the results of

warning signs review

The company has developed the High Risk Areas (CAHRAs) Identification Management Measures 、 Mineral Supply Chain Risk Management Procedures, and conducted warning sign review on suppliers. The company has clarified the information verification requirements, and verified information by collecting the Know Your Supplier (KYS) Questionnaire and Supply Chain Traceability Form from the suppliers. Further improvement is needed in the completeness of information collection for supply chain traceability.

When warning signs are

identified, companies shall

conduct an on-the-ground

assessment of the corresponding supply chain

The company has developed the On-the-ground Assessment Plan and On-the-ground Assessment Tool, which can be used to guide field assessments. During this assessment period, the company did not identify any supply chain warning signals and did not establish an On-the-ground Assessment team. However, due to some suppliers have not yet tracing back to the mine source information, it remains unconfirmed whether field assessments were conducted in accordance with all category 1 risk factors.

Assess risks in the supply chain

The  company  has  conducted  a  supply  chain  risk  assessment  and  formed  a  Risk  Identification  and Assessment Report. Due to some suppliers'inability to trace back to the origin of minerals, the scope of the risk assessment was incomplete, requiring further refinement of the risk assessment report.

Step 3: Risk Prevention and Mitigation

Develop and adopt risk management plan

The company has developed and approved the Risk Management Plan, covering mitigation strategies for different types of risks.

Implement risk management plan, monitor and track performance of risk mitigation strategies

The company has implemented the Risk Management Plan and needs to strengthen its performance in collaborating with stakeholders to promote the implementation, monitoring, and tracking of mitigation measures. However, monitoring and tracking records have not been provided.

Supplementary assessment of   risks that need to be mitigated. Supplementary assessment can also be conducted after actual   circumstances have changed

The company has clearly stipulated that it will conduct continuous monitoring and additional assessment of risks that need to be mitigated when there are changes in the actual situation or supply chain during implementation of the Risk Management Plan.

Step 4: Internal and External Assessment

Companies      should      establish internal   assessment   system,   to continuously monitor and manage due diligence performance

The company has developed an internal Assessment work plan, established an internal Assessment team, conducted internal Assessment and completed an Internal Assessment Report. The practical capabilities in conducting internal assessments of supply chain due diligence management of the company's internal evaluators needs to be further improved.

Companies  should  designate  the second  or third party to  conduct assessment when applicable

It’s the second time for the company to participate in the independent third-party assessment of aluminum supply chain due diligence management.

Step 5: Reporting and Communication

Develop due diligence progress report

The company has compiled the 2023-2024 Yantai Cash Industrial Co., Ltd. Annual Progress Report on Supply Chain Due Diligence Management.

With due regard to business confidentiality and other

competitive concerns, companies should publish due diligence

progress reports or summary

The company has publicly released the 2023-2024 Yantai Cash Industrial Co., Ltd. Annual Progress Report on Supply Chain Due Diligence Management.

Link:click here

Step 6: Provide for or Cooperate in Remediation When Appropriate

When the company recognize that it  has  caused  or  contributed  to actual    adverse    impacts,    they should mitigate these impacts by providing  for  or  cooperating  in remediation when appropriate

N/A