Zhejiang Laifual Drive Co., Ltd. (Laifual) has released the Terms of Reference for its newly established Remuneration and Appraisal Committee, laying the groundwork for director and senior-management pay governance as the company prepares for its H-share listing on the Main Board of The Stock Exchange of Hong Kong.

Committee Structure • Size and Independence: The committee will comprise at least three directors, with independent non-executive directors (INEDs) forming the majority. • Leadership: The chair must be an INED, nominated by the board chairman and approved by the full board. • Tenure & Succession: Members serve concurrent terms with the board. Vacancies arising from loss of directorship or INED status must be filled within three months.

Key Responsibilities 1. Remuneration Framework – Recommend overall remuneration policy and structure for directors and senior management, ensuring a “formal and transparent” process. – Review and approve management’s remuneration proposals against board-set corporate goals. – Propose or determine compensation packages, including salary, incentives, pensions and termination payments. – Assess peer company pay levels, time commitments and responsibilities to benchmark remuneration.

2. Oversight & Compliance – Monitor execution of the company’s remuneration system. – Review and approve loss-of-office or misconduct-related compensation, ensuring fairness and contractual compliance. – Prevent directors or their associates from participating in decisions on their own pay.

3. Equity Incentive Administration – Draft, review and/or approve share incentive schemes for directors, supervisors, senior management and other eligible participants, in line with PRC regulations and Hong Kong Listing Rules (including Chapter 17). – Oversee eligibility, grant conditions and exercise criteria for equity plans.

Meeting Protocols • Frequency: At least one regular meeting annually; ad-hoc meetings can be convened by the board, committee chair or two members. • Quorum: Minimum attendance of two-thirds of members; each member holds one vote, and resolutions require a simple majority. • Abstention: Members must disclose conflicts of interest and abstain from related discussions and votes. • Reporting: Decisions and summaries are reported to the board; minutes and materials are archived by the board office.

Implementation Timeline The charter becomes effective on the date Laifual’s H shares commence trading on the Hong Kong exchange.

Governance Safeguards The board retains veto power over any remuneration plan deemed detrimental to shareholders. Director pay plans require shareholder approval unless shareholders have delegated authority to the board; senior management packages need board approval.

By formalizing these terms, Laifual aligns its governance framework with PRC regulations and the Hong Kong Listing Rules, reinforcing oversight of compensation and performance evaluation as it transitions to public-company status.