Due Diligence Report Of 2022

1. Company information(ALL SOURCES)

The company is called RFH RECYCLING METALS COMPANY LIMITED. CID:003159.
The company was established in 2016 with its office address is in located in 1507 Huijie Plaza, No.268 Zhongshan Road, Nanjing Jiangsu Province and its factory is located in No.98 Changjiang Northwest Road, Nangjing Economy & Technology Development District, Nanjing. RFH is specialized in Strategic rare metals supply chain integration management, production and processing and international trade, including the processing of physical forged to Tantalum raw materials into Tantalum chunks. Our company always adheres to the "quality first" policy and fully implement the ISO9001 quality system and also has good business trading relationships with many well-known companies in International Metal Industry to meet the requirements of the customers and ensure a 100% satisfaction. 

2. RMAP Assessment Summary (ALL SOURCES)
As a responsible company. We are committed to helping the upstream supply chain share social responsibility. Strictly abide by the relevant laws and regulations of our country and international rules. On September 27, 2021, we conducted a DAP audit by UL, an independent third-party audit firm, with the Assessment Period  date of 06/07/2019- 04/24/2021, with Roc Liao, the lead auditor. This assessment summary report was posted on the RMI website:
https://www.responsiblemineralsinitiative.org/media/docs/Public%20Reports/RFH%20Yancheng%20Jinye%20Public%20Report.pdf .
In 2022, our company complied with the “OECD Due Diligence Guidelines for Responsible Global Supply Chains for Minerals from Conflict-affected and High-risk Regions” and only purchased  RMI-approved company raw materials. The entire process was strictly controlled and firmly implemented in accordance with the requirements of the OECD five-step Framework and the “Responsible Minerals Audit Process”. This report was posted on the company's website: 
https://www.rfh-metals.com/jinzhi.html?cid=2.

3. Company Supply Chain Policy (ALL SOURCE) 
We use the policy of openness and transparency to the purchasing of raw materials and obey OECD Guidance. The supply chain policy has been formulated and incorporated into the contracts / agreements signed with suppliers. In order to avoid the use of conflict minerals that directly or indirectly finance or benefit non-state armed groups, and / or involve other serious human rights violations in high-risk and conflict affected areas, illegal taxation or extortion, money laundering, minerals that do not disclose such payments in accordance with the principles set forth under the Extractive Industry Transparency Initiative (EITI) . The policy is completely meet the requirements of OECD Guidance, which includes all the risks mentioned in Appendix II and apply to the global. We promise to conduct as soon as the risks were found. The policy are audited by senior manager and approved by the general manager, all the managing departments are supporting the policy. Also we have wide spread it to the related beneficiary such as supplier, customers, staff and so on, which is also available on the website of
https://en.rfh-metals.com/news11.html?introId=7

4. Company Management System (ALL SOURCES)
4.1 Our company is committed to the policy in supply chain and formulate the following process 
of due diligence.
The General Manager is responsible to oversee the due diligence program and risk management design and implementation.
The company has assigned a due diligence program Senior manager Sun Wei to coordinate the work of relevant departments (including the Social responsibility Center, Operation Center, Technical Center, Production Center) to ensure each department follows up on their roles and responsibilities to implement the due diligence program and report any red flags and potential risks identified.
In accordance with the requirements of the due diligence system, the company has conducted due diligence management system training for key personnel of all relevant departments every year. If the system is updated, the company will carry out additional training as required. On May 24, 2022, one new employee had been received induction training; On June 8, 2022, all staff were trained according to the training plan.
The senior manager shall organize management review at least once a year. Analyze the changes of internal and external factors, the needs and expectations of stakeholders, the realization degree of company policies and commitments, management process performance, the status of improvement measures, the results of internal and external audit, resource adequacy, etc., and report the audit results and continuous improvement plan to the general manager.

4.2 Internal System of Control
Our company has established its due diligence management system and formulate the “Due Diligence Management Manual”. by carrying out “Supplier Management Procedure”, “Internal Raw Material Control Procedure” and “Identifying and Traceability Procedure” to control the choosing/permission and the flow of materials. So to get a balance evaluation and keep pace with OECD Guidance and RMAP during the whole process.

Company through telephone, mail, network, training and other ways, Our company only purchases raw materials from suppliers approved by RMI. We has communicated the newest supply chain policy and purchase requirements to the all direct suppliers. We had incorporated the supply chain policy into specific legally binding agreements with direct suppliers. We inspects 100% of the direct suppliers once a year, accounting for 100% of the annual sales volume, and transmits the risk assessment report to the suppliers. We will spare no effort to improve supplier performance, and organize relevant personnel to train and build capacity of suppliers when necessary.
Our company has established the “Complaint Management Procedure” and disclosed the contact information of senior managers on the website of
https://en.rfh-metals.com/news11.html?introId=9 as a complaint channel to accept all the supervision from all sides, either from RMI is available.

4.3 Record Keeping System
The company requires that all records relating to the due diligence program are maintained at least for five years. Carrying out “Documents and Records Control Procedure”.
All paper documents must be classified and stored in the filing cabinet, and measures shall be taken to prevent moisture, mildew and moth. Electronic documents and records shall be processed and backed up by computer, and anti-virus shall be carried out on schedule to ensure the safety of documents and records.

5. Risk Identification (ALL SOURCES)
5.1 The Company implements the ”Risk Management Procedure” to identify risks in the supply chain. Review all information collected against internal procurement requirements such as “UN Sanctions list” , ”US Sanctions List”, local laws and “Supply Management Procedure”. All direct suppliers conduct risk assessments at least once a year.
5.2 Our company designed “Supplier Management Program” to understand suppliers, include information concerning supplier legal status and identity, supplier mapping and potential risks. The all of our suppliers have completed and returned a KYC form. The senior manager reviewed the provided information and the Sanction List with the Purchasing Team. Whenever inconsistencies, errors or incomplete information were identified in the KYC form, the company communicated the improvement areas to suppliers and requested an updated form. If red flags were identified, the company would further engage with its suppliers to clarify and improve the documents as needed. During this reporting period, no red flags were identified related to submitted KYS forms.
5.3 The Company only purchases tantalum raw materials from suppliers approved by RMI, conducts basic due diligence on suppliers in accordance with the “Risk Management Procedure”, and logs on RMI's website to check the list of smelters that meet the standards to confirm and verify their identities; Visit the supplier's website to review the Supply Chain Policy and Due Diligence Report; View supplier evaluation reports, etc. Assess and mitigate risks in the supply chain and verify the presence of the warning signals mentioned in OECD Appendix II to check compliance with our supply chain policy.
5.4 For each transaction, the Company requires the supplier to provide the production date analysis certificate of each batch of goods and the complete set of traceability documents for comparison. Conduct further due diligence if inconsistencies or discrepancies are found.
5.5 In the supply of raw materials or supplier activities, there are the following circumstances that require further due diligence:
a) The batch provided by the material is not within the compliant production period;
b) Lack of traceability documents;
c) Providing products beyond the previous production capacity;
d) Supplier's latest information is not updated and reported in time;
e) Other recognizable warning signals.

6. Risk Reduction
6.1 According to the above methods to identify risk, for materials and supply chains determined to be “high -risk”. If necessary, spot checks will be carried out, conduct enhanced due diligence and develop feasible risk mitigation plans in consultation with suppliers, local and central authorities and affected parties.
6.2 Risk reduction strategies include:
a) Trade continues throughout the measurable risk management process.
b) Temporarily suspend trade while continuously reducing risks.
c) Terminate cooperation with suppliers when risk reduction measures are not feasible or acceptable.
6.3 The risk management plan shall be reported to the general manager and communicated to the supplier, and the relevant departments shall regularly supervise the implementation.
6.4 In this evaluation cycle, our company has no "high-risk" procurement, and there is no risk mitigation plan under implementation for the time being.