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ESG

Xiamen Solex High-tech Industries Co. Ltd. Stock Code 603992

2024 Environmental Social and Governance (ESG) Report

Official website：https://www.solex.cn/

Tel.：0592-6192666

Address: No. 298 Yangguang West Road

Haicang District Xiamen City Fujian Province05 About Solex 23 Energy Saving and Carbon

Table of Contents Company Profile 05 Reduction for Green Develop-Corporate Culture 05 ment

Business Layout 06 Response to Climate Change 24

Milestones in 2024 06 Environmental Compliance 28

Major Honors 07 Resource Utilization 34

Membership in Industry Associations 08

Opening

About This Report 02

Message from the Chairman 03 Responsibility Focus - Special 38 Innovation for Quality Respon-

Sustainable Development 09 Topics sibility First

Highlights in 2024 04 Advancing Green and Intelligent Innovation-driven 39

Upgrades Leading Development 09 Product Quality 43

Protection of Customers' Rights and

Interests 48

11 ESG Management Information Security and Privacy

Postscription ESG Governance System 11 Protection 50

Annex 73 Response to Sustainable Supply Chain Management 52

Key Performance 73 Development Goals 12

Indexes 75 Materiality Assessment 13

Feedback 77 Analysis of Stakeholders 15

55 Working Together for Success

Protection of Employees’Rights

16 Standardized Governance and Interests 56

Bolstering Steady Develop- Training and Development 63

ment Occupational Health and Safety 65

Governance through the General

Meeting of Shareholders Board of

Directors and Board of Supervisors 17

Risk Control and Internal Control 18 70 Giving Back to Society Advanc-

Information Disclosure and Investor ing Public Welfare Together

Relations Management 20 Social Welfare 71

Business Ethics 21 Rural Revitalization 72

CONTENTSXiamen Solex High-tech Industries Co. Ltd. Opening

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About This Report

Introduction Data Sources and Reliability Assurance

This is the 5th Environmental Social and Governance Report ("ESG Report") publicly released by Xiamen Solex Data sources used in this report include public data from government agencies and Solex's official documents

High-tech Industries Co. Ltd. It objectively discloses to stakeholders such as shareholders employees govern- statistical reports and third-party questionnaire surveys which have been collected audited and summarized by

ments clients and consumers the efforts and achievements made by Solex in aspects such as safety production the Company's functional departments and operating units. This report doesn’t contain any false records

environmental protection social welfare corporate governance and talent development. misleading statements or material omissions. For any discrepancy between the data in this report and that in the

annual report the data in the annual report shall prevail. Unless otherwise specified all amounts in this report are

Reporting Period expressed in RMB.The Reporting Period of this report is consistent with that of the Company's Annual Report. To improve the compa-

rability and completeness some sections of this report may be appropriately backdated to previous years or

extended to 2025. Appellation Description

Reporting Scope For the ease of expression and readability "Xiamen Solex High-tech Industries Co. Ltd." is also referred to as "Solex" "the Company" or "we" in this report. Furthermore“ country” and“ government” in this report refer to

The content of this report covers Xiamen Solex High-tech Industries Co. Ltd. and its wholly-owned and controlled the People's Republic of China and its administrative agencies.subsidiaries. Unless otherwise specified the scope of this report is consistent with that of the Company's Annual

Report. Short Name Full Name

Preparation Basis Zhangzhou Solex Zhangzhou Solex Smart Home Co. Ltd.Shanghai Stock Exchange "Self-Regulatory Guidelines for Listed Companies No. 1 - Standardized Operation of Bestter Bestter (Xiamen) Technology Inc.Listed Companies" (Revised in December 2023)

Shanghai Stock Exchange "Self-Regulatory Guidelines for Listed Companies No. 14 - Sustainability Report (for

Trial Implementation)"

Shanghai Stock Exchange "Self-Regulatory Guidelines for Listed Companies No. 4 - Preparation of Sustainability Access to this Report

Reports"

HKEX "Environmental Social and Governance Reporting Guide (Main Board)" (Reference Basis) You may access and download the electronic version of this report at the websites of Xiamen Solex High-tech

China Enterprise Reform and Development Society "Guidelines for Sustainable Development Reports of Chinese Industries Co. Ltd. (https://www.solex.cn/) Shanghai Stock Exchange (www.sse.com.cn) or cninfo (www.cnin-

Enterprises (CASS-ESG6.0)" fo.com.cn) to learn more information about the Company.China National Standardization Administration Committee (CNSA) “Guidelines for Preparing Social Responsibili-ty Reports” (GB/T36001-2015)

UN Sustainable Development Goals (SDGs) 2030

“2021 Sustainability Reporting Standards (GRI Standards)” of the Global Reporting Initiative (Reference Basis)

02Xiamen Solex High-tech Industries Co. Ltd. Opening

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Message from the Chairman

Dear shareholders partners employees and colleagues from In terms of corporate governance we have established an ESG governance system formed a Board Strategy and ESG

all sectors of society Committee and set up an ESG working group under it. We have clearly defined their responsibilities and comprehen-

sively planned ESG-related work creating a vertically and horizontally integrated ESG network across the Company

It is with immense pride that I share the progress made by ensuring that ESG concepts are deeply embedded in every aspect of the Company. At the same time we are also contin-

Solex in the past year in the areas of environmental social and uously optimizing our governance structure gradually improving the composition and operational mechanisms of the

governance. The year 2024 marks a breakthrough year in Board of Directors further clarifying the responsibilities and authority of each department optimizing internal manage-

China's sustainable development information disclosure. ment processes and enhancing the Company's operational efficiency and decision-making execution. Additionally we

Guidelines manuals and standards for ESG and sustainable have formulated compliance rules and regulations to ensure the safety and reliability of the Company's business opera-

development information disclosure have been continuously tions. We have strengthened internal audit and supervision functions and conducted regular compliance reviews of all

issued after solicitation of opinions. As a responsible business activities of the Company to ensure that all operations comply with national laws regulations and industry

enterprise we not only pursue economic benefits but also standards. This effectively protects the legitimate rights and interests of the Company and its shareholders creating a

actively respond to societal expectations. We strive to set an favorable internal environment for the Company's sound operations.example in corporate governance environmental protection

and social responsibility and are committed to building a In terms of environmental protection we continue to strengthen our efforts in energy conservation and emission reduc-

high-quality and sustainable future. tion. By adopting advanced environmentally friendly production technologies and equipment we have upgraded our

production processes. At the same time we actively carry out pollution prevention and control measures to control the

Since its establishment Solex has always emphasized the core emission of pollutants such as exhaust gases and wastewater and properly dispose of waste to ensure environmental

value of "believing in the power of technological innovation." safety. Moreover we are accelerating the use of clean energy increasing investments in and applications of solar

We regard technological innovation as the cornerstone of the energy and gradually achieving a green transformation of the energy structure. In July 2024 the Phase II of the roof

Company’s development. Based on outstanding technologi- photovoltaic project of the subsidiary Zhangzhou Solex was successfully connected to the grid achieving photovoltaic

cal innovation product development capabilities and the power generation and further optimizing the energy structure.ability to understand customer needs we empower product

values with intelligence health and green solutions and We always uphold our social responsibilities and make every effort to safeguard employees' rights and interests.conduct targeted research and development in technology and employee rights and continuously improve our employee welfare system. We offer not only competitive salaries and

products. In 2024 the Company’s R&D investment has comprehensive social security benefits but also a variety of employee care programs. These include support for employ-

reached RMB 225 million accounting for 7.47% of revenue. We ees in need protection of female employees' rights attention to employees' mental health and the organization of

have 818 technical personnel and our R&D team is expanding cultural and sports activities ensuring a holistic approach to the physical and mental well-being of our employees. We

year by year. As of December 31 2024 the Company holds attach great importance to employees' career development and have established a systematic training system and

1337 valid domestic and international patents including 422 career advancement channels. We offer various professional skills and management training courses encouraging

invention patents and 756 utility model patents. It is worth employees to continuously learn and grow thus achieving an organic integration of individual value and corporate

mentioning that products designed by the Company’s design development. Additionally we are committed to public welfare investments covering areas such as education and Chairman of Xiamen Solex

team such as faucets smart toilets and water flossers have assistance for people with disabilities. Through financial and material donations of funds and goods we strive to High-tech Industries Co. Ltd.won top international industrial design awards including the address social issues and promote social equity."IF Design Award" "Red Dot Award" "IDEA" and "G-Mark." The

eco-friendly plastic shower slide rail won the IDEA Silver Award Finally I would like to express my gratitude to all the employees and partners who have worked hard for the develop-

for the first time. As of December 31 2024 Solex has received ment of the Company and to our shareholders and all sectors of society for their trust and support. Let us join hands and

170 domestic and international design awards showcasing the embark on a new chapter of sustainable development together!

Company's extraordinary strength in industrial design.Thank you everyone!

03Xiamen Solex High-tech Industries Co. Ltd. Opening

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Sustainable Development Highlights in 2024

Economic Performance Governance Performance Environmental Performance Social Performance

RMB 4364103600 2times RMB10945000 5044965 kWh 4877 98.69%

Total Assets General Meeting of Shareholders Convened Total Environmental PV Generation Total number of employees Employee Satisfaction

Investment

RMB 3014989600 8times 689.02tCO2e RMB 225113700

Operating Income Meetings of the Board of Directors Convened Greenhouse Gas Emission Reduction Investment in R&D

RMB 493198500 7 2.20tCO2e/10000 yuan of output value 98.76%times

Total Profit Greenhouse Gas Emission Intensity Product Percent of Pass

Meetings of the Board of Supervisors Convened

RMB 63686300 573813 tons RMB1040000

Total Tax Payment 44.44% Total Water Consumption Total Investment in Data Security

Percentage of Female Directors

1.10 yuan/share in the Board of Directors 1.69 tons/10000 yuan of output value RMB6873500

Basic Earnings per Share Water Consumption Intensity Total Investment in Safety Production

RMB 446415000 33.33% 257455.53 tce RMB109400

Percentage of Independent

Net Profit Attributable to Total Energy Consumption Total Public Welfare InputDirectors in the Board of Directors

Shareholders of the Listed Company

0.76 tce/10000 yuan of output value

Energy Consumption Intensity

(For detailed information on the Company’s economic performance please refer to the 2024 Annual Report of Solex.)

04Xiamen Solex High-tech Industries Co. Ltd. About Solex

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About Solex

Company Profile Corporate Culture

Founded in 2004 Xiamen Solex High-tech Industries Co. Ltd. (SHA: 603992) insists on integrating R&D innovation

and industrial design into products with the "Intelligent Hardware IDM (Innovation/Design/Manufacture) Shared

Platform" as its compass and capitalizing on its excellent technological innovation product development and user

demand mastery capabilities. With the concept of model manufacturing and technology sharing it focuses on the

R&D design and intelligent manufacturing of IDM products in such categories as kitchen & bathroom and health Corporate Culture Mission

beauty and health and emerging intelligent health hardware. It aims to enhance the coverage of products in

Customer First Team Legacy Innovation and Create a better health life for the people through

market segments and spares no effort to provide high-value added IDM hardware products with "innovation

Improvement Technology as Basics Compliance continuous innovation

design and manufacture" for professional well-known brands large chain retailers and brand e-commerce players

with Laws Quality Assured

around the world.The Company has received eight national-level honors including: "High-tech Enterprise" "National Intellectual

Property Demonstration Enterprise" "National Enterprise Technology Center" "Service-Oriented Manufacturing

Demonstration Enterprise" "National Green Factory" "National Industrial Design Center" "Postdoctoral Research

Station" "Solex Famous Trademark". The innovative products designed by the Company's design team have won

170 domestic and international design awards including top global industrial design awards such as the Red Dot Vision Core Values

Award (Germany) iF Design Award (Germany) IDEA Award (United States) and Good Design Award (Japan). Solex

firmly believes in the power of technological innovation. As of December 31 2024 the Company holds 1337 valid Maintain a single world champion and become Believe in the power of technological innovation

patents both domestically and internationally including 422 invention patents and 756 utility model patents a leader in health hardware

demonstrating the Company's outstanding strength in innovation!

Enterprise Business Strategy

Insist on the IDM model deeply explore Empower product values with intelli-

Customer the human health life demand to provide Product gence health and green solutions

Strategy B-end customers with smart healthy Strategy based on the idea of technology sharing

and green hardware product solutions lay out various segmented categories

around the underlying logic

05Xiamen Solex High-tech Industries Co. Ltd. About Solex

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Business Layout

Introduction to Businesses Domestic and Overseas Business Layout

The Company's main product categories include kitchen & bathroom and health products beauty and health The Company's IDM hardware business primarily engages in direct sales to specific customers including interna-

products and emerging intelligent health products. Its main business model is the IDM (Innovation Design Manu- tionally renowned/high-end kitchen & bath home beauty and health brands large chain retailers and brand

facturer) model where the Company uses its own resources to analyze and study regional market conditions and e-commerce platforms. The customer base covers more than 50 countries and regions worldwide including the

consumer demand trends proposes innovative product concepts forms complete product planning solutions US Europe Japan and Australia. Currently the Company has set up multiple production bases in Xiamen Zhang-

and delivers product models technical modules or finished products containing the Company's patented technol- zhou Vietnam and other locations effectively ensuring product delivery and supply capacity.ogy and creative designs to customers. In this process creative design of products and research & development of

related technical solutions are all independently completed by the Company.Milestones in 2024

Kitchen & Bathroom and Health

Focusing on kitchen & bathroom and health space scenarios April 27 2024 The groundbreaking ceremony for Solex High-tech Industries (Vietnam) factory

the main products include shower systems micro-bubble project was held in the Bac Tien Phong Industrial Zone Quang Ninh Province

showers micro-current showers smart care faucets smart Vietnam with an initial construction area of over 50000 square meters

toilets and smart bathroom cabinets. May 14-17 2024 Solex participated in the 28th Kitchen & Bath China

Beauty and Health May 22-24 2024 Solex participated in the 28th China Beauty Expo

Focusing on skin care and testing oral care testing hair

care and other scenarios the main products include

commercial analyzers facial cares hair removal devices July 22 2024 The second phase of the Zhangzhou Solex Roof Photovoltaic project

beauty shower heads hair care combs smart water was completed and successfully connected to the grid

flossers and AI electric toothbrushes.September 13 2024 Solex's eco-friendly plastic slide rail Pioneer Elmo won the 2024 IDEA

(U.S. Time) Silver Award in the U.S.Emerging Intelligent Health

November 12-15 2024 Solex participated in the 27th Cosmoprof Asia

Focusing on the categories and scenarios of smart sleep

monitoring and smart fitness the Company has currently

developed products such as smart anti-snoring pillows

sleep monitors and smart yoga mats. November 22 2024 Solex High-tech Industries (Vietnam) factory project in the Bac Tien Phong

Industrial Zone Quang Ninh Province Vietnam successfully topped off

065Xiamen Solex High-tech Industries Co. Ltd. About Solex

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Major Honors

June 2024 September 2024 October 2024 November 2024 November 2024

"Future Unicorn" Innovation Enterprise Ranked 71st Specialized and Sophisticated Ranked 38th Ranked 82nd

in the Core Digital Economy Industry Top 100 Private Manufacturing Small and Medium-sized Enterprise of Fujian Province in Fujian Province Top 100 Strategic Emerging Top 100 Xiamen Enterprises Enterprises in Fujian Province Industry Enterprises in Fujian

Fujian Provincial Bureau of Data Fujian Federation of Fujian Provincial Department Fujian Enterprises and Entrepreneurs Xiamen Enterprises and Entrepreneurs

Management Commerce & Industry of Industry and Information Technology Confederation Fujian Academy Association School of Management

of Social Sciences Fujian Media Group Xiamen University Xiamen Daily

Xiamen Media Group

November 2024 November 2024 November 2024 November 2024 November 2024

Ranked 3rd Ranked 8th Ranked 69th Ranked 12th Ranked 20th

Top 10 Xiamen IP Enterprises Top 10 Xiamen Green Enterprises Top 100 Xiamen Private Enterprises Top 20 Xiamen Private Top 20 Xiamen Private

Technology Innovation Enterprises Manufacturing Enterprises

Xiamen Enterprises and Entrepreneurs Xiamen Enterprises and Entrepreneurs

Association School of Management Association School of Management Xiamen Federation Xiamen Federation Xiamen Federation

Xiamen University Xiamen Daily Xiamen University Xiamen Daily of Industry and Commerce of Industry and Commerce of Industry and Commerce

Xiamen Media Group Xiamen Media Group

07Xiamen Solex High-tech Industries Co. Ltd. About Solex

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Membership in Industry Associations

Kitchen and Bathroom Hardware Standardization Sub-committee of

Xiamen Industrial Design Association?Vice President National Committee for Standardization of Hardware Products?Member

Xiamen Solex High-tech Industries Co. Ltd. Xiamen Solex High-tech Industries Co. Ltd.Bathroom & Sanitary Society of China Building Ceramic

Xiamen Bath and Kitchen Association?Vice President and Sanitaryware Association?Director

Xiamen Solex High-tech Industries Co. Ltd. Xiamen Solex High-tech Industries Co. Ltd.Standardization Committee of Xiamen Standardization Committee of China Building Ceramic

Bath and Kitchen Association?Member and Sanitaryware Association?Member

Xiamen Solex High-tech Industries Co. Ltd. Xiamen Solex High-tech Industries Co. Ltd.Xiamen High-Tech Development

Patent Protection Association Of China?Director

Association?Standing Director

Xiamen Solex High-tech Industries Co. Ltd.Xiamen Solex High-tech Industries Co. Ltd.Xiamen Association for Quality?Vice President China Industrial Design Association?Director

Xiamen Solex High-tech Industries Co. Ltd. Xiamen Solex High-tech Industries Co. Ltd.China National Hardware Association

Xiamen Standardization Association?Director ?Standing Director

Xiamen Solex High-tech Industries Co. Ltd. Xiamen Solex High-tech Industries Co. Ltd.Xiamen Intellectual Property Association?Vice President Fujian Industrial Design Association?Vice President

Xiamen Solex High-tech Industries Co. Ltd. Xiamen Solex High-tech Industries Co. Ltd.Xiamen Association For Medical Devices Zhangzhou Changtai District High-tech Enterprise

?Standing Director Association?Vice President

Xiamen Solex High-tech Industries Co. Ltd. Zhangzhou Solex Smart Home Co. Ltd.

08Xiamen Solex High-tech Industries Co. Ltd. Responsibility Focus - Special Topics

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With the improvement of living standards and the upgrading of consumer concepts people’s demands for home environments are also increasing daily. As the most private space in

the home environment the decoration and accessories of the kitchen and bathroom are closely related to the quality of family life. Therefore kitchen and bathroom products have

been receiving increasing attention from consumers becoming essential necessities in daily life.In recent years the government has vigorously advocated green and environmental protection and the upgrading of electronic products. The Several Measures for Promoting the Con-

s u m p t i o n o f E l e c t r o n i c P r o d u c t s proposed promoting new consumption scenarios for health-oriented bathroom products smart sleep air purification and supporting enterprises' per-

sonalized design and flexible production. Currently the application of smart and green technologies in the kitchen and bathroom market has become an industry trend such as smart

toilets and sensor faucets. At the same time as consumers pursue higher quality of life the trend in kitchen and bathroom products is evolving from basic functionality to a focus on

personalization and comfort. The competition in the industry is fierce and technological innovation and sustainable development will be the key driving forces for the future.By empowering product values with intelligence health and green Solex focuses on energy saving water conservation zero PVC and recycled materials to make products greener

reduce the environmental impact throughout the product life cycle and improve the green quality of products to meet customers' demand for eco-friendly products. Additionally the

Company actively participates in industry events and exchanges engages in deep discussions about innovative ideas and explores breakthroughs in product technologies to inject

vitality into the development of the industry.Practicing Innovative Ideas Creating Green Products Case Study：Eco-friendly Shower Slide Rail “Pioneer Elmo”

The eco-friendly plastic shower slide rail "Pioneer Elmo" developed

In recent years in response to market changes Solex has by Solex won the 2024 IDEA Silver Award in the U.S. It uses recycled

always adhered to technological innovation as the core driving composite plastics as raw materials maintaining the hardness and

force. The Company combines customer needs with innova- toughness of common plastics while also setting an example for

tive ideas and integrates the concept of sustainable develop- promoting resource recycling in the industry. The surface treatment

ment with design processes to create high-value-added IDM process of this slide rail avoids metal contamination ensuring

products with "innovation design and manufacture". long-term reliability and stability of the product while reflecting

Currently multiple innovative products designed by the Solex’s dedication to product quality and user experience.Company have won top international industrial design

awards. As of December 31 2024 Solex has received 170 Green Supply Chain Certification

domestic and international design awards showcasing its

extraordinary strength in the field of industrial design.Furthermore the Company's factories and supply chains have

obtained green certifications injecting green energy into Eco-Friendly Plastic

Solex’s industrial design innovation supporting the creation Shower Slide Rail

of more eco-friendly and sustainable products and production "Pioneer Elmo"

models and further highlighting Solex's green competitive-

ness and social responsibility in the industry. Green Factory Certification

09

Leading Development

Advancing Green and Intelligent Upgrades

Responsibility Focus - Special TopicsXiamen Solex High-tech Industries Co. Ltd. Responsibility Focus - Special Topics

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Exploring Industry Development Leading Trends with Innovation

Adhering to the concepts of intelligence health and green Solex continues to break traditional household product boundaries. With relentless innovation as its driving force the Company consistently injects high-value energy into

products. On the path to excellence Solex has successfully developed a series of leading smart products that not only lead the industry trends but also bring users unprecedented convenience and comfort. In order to better understand

consumer needs and continuously expand the boundaries of product innovation Solex actively participates in industry exhibitions engaging in in-depth exchanges and collaborations with industry leaders to explore new trends and

opportunities for the development of the industry.Case Study: Empowering by AI Technology Starting A New Trend in Beauty and Health Case Study: Smart & Green Philosophy for A Quality Life

Solex showcased its facial cares hair removal devices innovative toothbrushes and water flossers at the 28th China Beauty Expo in Shanghai and On May 14-17 2024 Solex participated in the 28th Kitchen & Bath

the 27th Cosmoprof Asia in Hong Kong. These two influential and large-scale beauty industry events gathered top brands and high-quality companies China. At this exhibition adhered to the philosophy of "intelli-

from around the world showcasing the latest products and cutting-edge technologies and jointly discussing the future development trends of the gence health and green" Solex created four major exhibition

beauty industry. areas: shower space kitchen space basin beauty space and toilet

space. Focusing on smart bathroom and kitchen water applica-

The beauty and health category has become the Company's second growth driver. In the digital era the Company has integrated AI algorithms into tions the Company showcased products such as water-saving

beauty devices to meet users' smart skincare needs and enhance the product experience. Solex through continuous innovation has further showers home soda machines care faucets water purification

developed technologies such as radiofrequency microcurrent and ultrasound for skin and hair care. Additionally the Company integrates image faucets smart toilets smart beauty mirror cabinets and lifting

processing technology and proprietary AI algorithms for applications such as skin detection and oral examination. mirror cabinets. With its deep insights into market demand

continuous technological innovation and human-centered design

Through deep participation in these two exhibitions Solex not only gained valuable industry insights providing fresh ideas and inspiration for philosophy Solex brought an unprecedented experience to

upgrading the beauty and health category but also seized the opportunity to engage in in-depth communication with numerous internationally visitors leading the trend of future home living.renowned brands and establish deeper connections with industry peers.Solex at the 28th China Beauty Expo Solex's debut at the Cosmoprof Asia

Solex at the 28th Kitchen & Bath China

10Xiamen Solex High-tech Industries Co. Ltd. ESG Management

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ESG Management

ESG Governance System Case Study: ESG Training

Aligned with its green innovation strategy Solex is committed to building a sustainable ESG governance system. On November 7 2024 the Company specially invited a professional organization to hold an ESG training

The Company has formulated the Board Strategy and ESG Committee Rules and the Environmental Social and session for the ESG Working Group. During this training the group members delved into the latest regula-

G o v e r n a n c e ( E S G ) M a n a g e m e n t S y s t e m established the Board Strategy and ESG Committee and set up an ESG tions and policies issued by the stock exchanges and experts provided detailed analysis and interpretation

working group to plan and coordinate the Company's ESG-related work in the future. The Company continuously of the Company's ESG ratings. These sessions not only helped the members gain a comprehensive under-

enhances ESG governance creating greater value for shareholders employees customers and society while standing of the latest trends and developments in ESG but also enhanced their ability to comprehend and

effectively driving the Company's practices and development in the ESG field. apply ESG practices.Solex's ESG Management Structure:

Review and approve the Company's ESG development strategy and goals major issues

management structure management systems etc.;

Board Review the Company's ESG report.of Directors

Research the Company's ESG goals strategy governance structure and other related

matters and make recommendations to the Board of Directors;

Identify ESG risks and opportunities that have a significant impact on the Company's

Board Strategy business and guide management in taking responsive actions;

and ESG Supervise the establishment of ESG goals implementation plans performance review the

Committee progress towards achieving ESG goals and propose improvements;

Review the Company's ESG-related disclosure documents.Implement the Company's ESG strategy and goals coordinate various departments in

implementing ESG initiatives;

Draft ESG policies issues plans and implementation schemes;

Collect ESG information and prepares reports and related documents;

ESG Liaise with consulting and rating agencies organize ESG business training and monitor

Working Group ESG policy developments;

Summarize ESG work results report progress to the committee in a timely manner and Specialized Training on ESG

propose improvement suggestions.

11Xiamen Solex High-tech Industries Co. Ltd. ESG Management

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Response to Solex adopts the IDM model developing efficient intelligent low-carbon and

Sustainable SDGs Solex's actions environmentally friendly products based on user needs leading industry trends and has won multiple international awards making it a benchmark for

Development Goals the green transformation of the industry.Solex is committed to promoting ESG The Company has established an employee mutual aid fund to provide The Company is committed to creating a fair and just workplace culture

progress focusing on implementing financial assistance to employees in difficulty. At the same time the ensuring that all employees have equal opportunities for promotion expand-

energy conservation and emission reduc- Company actively participates in public welfare donating to organiza- ing communication channels promoting a democratic management mecha-

tions in need and promoting social harmony and progress.tion measures strictly controlling pollut- nism and firmly resisting the use of child labor and forced labor.ant emissions and dedicating itself to

green technological innovation to con-

tribute to achieving the United Nations The Company regularly organizes a variety of cultural and sports The Company actively promotes energy-saving transformation measures

activities conducts regular employee health check-ups provides labor

Sustainable Development Goals. strengthens communication with surrounding communities and strives to protection equipment and creates a safe and healthy working environ- build environmentally friendly economically efficient and socially inclusive

ment to ensure that employees can work and live in a caring atmosphere. sustainable cities and communities.The Company has developed a complete talent training system and

established a cloud learning platform to help employees successfully The Company has established a complete quality management system

complete various training tasks offering them the right to self-learn conducts risk and opportunity assessments for product quality and

according to their job needs and personalized interests providing unlimit- implements corresponding measures at key nodes throughout the product

ed growth potential. lifecycle.To respond to carbon peaking and carbon neutrality goals the Company

The Company resolutely eliminates all forms of discrimination and actively organizes carbon inventory and energy-saving efforts taking

violations of female workers’ rights ensuring that female employees practical actions to assist in carbon emission reductions and green develop-

enjoy equal work opportunities and rights in the workplace. ment.The Company regularly carries out information disclosure work establishes

The Company actively promotes the photovoltaic power generation and improves audit and supervision systems and implements comprehen-

technology and reduces dependence on fossil fuels thereby reducing sive supervision and review of daily operations to ensure that the Company

carbon emissions. operates in compliance with laws regulations and maintains integrity and

honesty.The Company has established a comprehensive salary and benefits The Company has established a comprehensive supplier management system

system and set up a dual-career development system encouraging optimizes supplier management processes through digital means and

employees to specialize in their fields and continuously refine their skills conducts regular comprehensive evaluations and reviews of suppliers to

achieving a win-win situation between individual value and corporate ensure that the qualifications product quality delivery capabilities and

development. service levels of suppliers meet the Company's standards.

12Xiamen Solex High-tech Industries Co. Ltd. ESG Management

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Materiality Assessment

The Company closely tracks ESG ratings in the capital markets analyzes the challenges of sustainable development based on national policies industry trends and its own strategy and establishes a key issue identification system. A

survey was conducted among stakeholders in the form of questionnaires and expert judgments with 263 responses collected. Based on this 30 key issues were identified to be the focus of the 2024 report.Materiality Assessment Process

1234

Understand the Conduct

Company's preliminary Assess the mat- Identify

background issue screening eriality of issues material issues

Analysis methods Analysis methods Analysis methods Analysis methods

Analyze based on global trends and conduct Based on the Guidelines for Sustainable Assess the impact materiality: Form an issue list based on impact materiali-

macro-environment analysis of China's indus- Development Reports of Listed Companies Identify the potential or actual positive or ty and financial materiality and ensure that

try development trends issued by the stock exchange refer to the negative impacts of each issue on the exter- the relevant issues are transparently fairly

Analyze based on the industry Global Reporting Initiative (GRI) Sustainable nal environment society and economy con- and comprehensively disclosed in the report.Analyze based on the Company's business Development Goals (SDGs) of the United duct a survey among stakeholders in the form

model Nations SASB MSCI as well as related issues of questionnaires and expert judgments.Identify the stakeholders of the Company and from domestic and international peers Assess the financial materiality:

the impacts risks and opportunities the establish a sustainable development issue Through the analysis of impacts dependen-

Company faces library. cies and other factors in combination with

questionnaires and expert judgments and risk

identification and evaluation lists from

departments identify and assess risks and

opportunities under each relevant issue and

identify issues with financial materiality.

13Xiamen Solex High-tech Industries Co. Ltd. ESG Management

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Matrix of Material Issues

01 Environmental compliance management

15 Dual materiality issues

26 02 energy utilization

12 01 03 Response to climate change23 Response to climate change innovation-driven product safety and

10 04 circular economy13 quality responsible supply chain energy utilization

06

02 05 water resource utilization

24 06 pollutant emissions11 07 Impact materiality issues18

16 07 waste disposal03 Environmental compliance management circular economy water 05 27 08 Biodiversity management

17 resource utilization pollutant emissions waste disposal low-carbon

09 low-carbon products

04 products employee rights protection employee training and

10 employee rights protection development occupational health and safety customer rights

22

29 11 employee training and development protection information security and privacy protection shareholder 25 09 12 occupational health and safety rights protection standardized corporate governance anti-commer-

13 innovation-driven cial bribery and anti-corruption anti-unfair competition tax compli-

2820

14 technology ethics ance risk management stakeholder communication

30 15 product safety and quality Relevant issues

19 16 customer rights protection

14

information security and privacy protection Biodiversity management technology ethics equal treatment of 17

SMEs social contribution rural revitalization due diligence ESG

08 18 responsible supply chain governance

19 equal treatment of SMEs

20 social contribution

21

21 rural revitalization

22 shareholder rights protection

23 standardized corporate governance

24 anti-commercial bribery and anti-corruption

25 anti-unfair competition

Importance to the company's financial impact 26 tax compliance

27 risk management

28 due diligence

29 stakeholder communication

Dual materiality issues Financial materiality issues 30 ESG governance

Impact materiality issues Relevant issues

14

Importance to economic social and environmental impactsXiamen Solex High-tech Industries Co. Ltd. ESG Management

invent

Analysis of Stakeholders

The Company focuses on communication and exchange with all stakeholders establishing regular communication channels to ensure timely and accurate understanding of stakeholders' expectations and demands jointly promoting the

Company's steady development.Stakeholder

Category Government Customers Public welfare Suppliers and Partners

and regulatory agencies Investors and Shareholders Employees and community organizations

Legal compliance Win-win cooperation Improvement of Corporate Employee Care Product Innovation Employment Promotion

Environmental protection Promotion of industrial Governance Diversified training Fostering open communication Public welfare and charity

Business ethics and development Return and growth Career Development and channels

anti-corruption Equal reciprocity Timely information disclosure Promotion Product quality assurance

Demands Supplier Management Risk Management Compensation and benefits Protecting the rights and

and Health and safety interests of customers

Expectations Performance appraisals

Upholding the Rights and

Interests of Employees

Complying with laws and Building of cooperation Optimization of governance Organization of cultural activities Strengthening product Provision of Employment

regulations platforms structure Regularly organization innovation and R&D Opportunities

Ecological environmental Strengthening innovation Driving improved business of training activities Improvement of Conducting public

protection fulfillment of and R&D performance Improvement of employee communication efficiency welfare activities

social responsibilities Responsible industry chain Improvement of information career advancement mechanisms Quality and safety

Supervision and inspection Building of a green supply chain disclosure system Enhancement of compensation management

Communication Improvement of Internal Control and benefits Optimization of service processes

and Regular occupational health

Response checkups

Improvement of performance

appraisals

Employee communication and

feedback mechanisms

15Standardized Governance

Bolstering Steady

Development

Our Philosophy

Solex has adhered to the principle of prudent governance. By establish-

ing a governance structure with clear rights and responsibilities coordi-

nated checks and balances the Company continuously improves the

governance system enhances governance capabilities and levels

ensures the legality and compliance of the Company's operations

protects the rights of shareholders and stakeholders and achieves

sustainable development of the enterprise.Our Actions

Governance through the General Meeting of Shareholders Board

of Directors and Board of Supervisors

Risk control and internal control

Information disclosure and investor relations management

Business Ethics

SDGsXiamen Solex High-tech Industries Co. Ltd. Standardized Governance Bolstering Steady Development

invent

Governance through the General Meeting of Board of Directors

Shareholders Board of Directors and Board of Supervisors

The Company has set up the Board of Directors which is accountable to the General Meeting of Shareholders. The

Solex has formulated the A r t i c l e s o f A s s o c i a t i o n the R u l e s o f P r o c e d u r e f o r S h a r e h o l d e r s ' M e e t i n g s the R u l e s o f Board of Directors is responsible for executing the resolutions of the General Meeting of Shareholders deciding the

P r o c e d u r e f o r B o a r d M e e t i n g s and other systems in accordance with relevant laws and regulations such as the Company's business plans and investment proposals etc. ensuring compliant operation of the Company. The

C o m p a n y L a w o f t h e P e o p l e ' s R e p u b l i c o f C h i n a ("Company Law") and the S e c u r i t i e s L a w o f t h e P e o p l e ' s R e p u b l i c B o a r d o f D i r e ctors consists of four specialized committees: the Audit Committee the Nomination Committee the

o f C h i n a ("Securities Law") actively constructing a relatively complete modern governance system and structure Remuneration and Assessment Committee and the Strategy and ESG Committee. These committees have clear

for listed companies. The Company has established the General Meeting of Shareholders Board of Directors Board responsibilities and perform their duties in accordance with the A r t i c l e s o f A s s o c i a t i o n and related working systm-

of Supervisors professional committees and management team with clear responsibilities and checks and s to contribute to the Company's standardized operation.balances among various functional institutions to promote the Company's standardized operations.The Company attaches great importance to the diversity of members in the Board of Directors and gives full

Organizational Structure of Solex consideration to factors such as gender age educational background professional experience and skills. Current-

ly the Company's 9 board members have expertise in multiple fields providing strong support for the scientific

and efficient decision-making of the board.General Meeting of Shareholders Key Performance

During the Reporting Period

Board of Supervisors Strategy and ESG Committee The Board of Directors had 9 members including: 3 independent directors;

Nomination 4 female directors accounting for 44.44%;

Committee

Securities Affairs Secretary of the

Department Board of Directors Board of Directors Remuneration The Board of Directors held 8 meetings and passed 52 resolutions.and Assessment

Committee

The Audit Committee of the Board of Directors held 5 meetings and deliberated 11 proposals;

Audit Committee Audit Department

General Manager The Nomination Committee of the Board of Directors held 0 meetings;

The Remuneration and Assessment Committee of the Board of Directors held 2 meetings and deliberat-

ed 4 proposals;

Adminis- Human Environ- Equip- Category Strategic Legal Finance IT Center The Strategy Committee of the Board of Directors held 2 meetings and deliberated 4 proposals.tration Resources mental ment Division Invest- Depart- Center

Center Depart- Manage- Procure- ment ment

ment ment ment Depart-

Center Center ment

17Xiamen Solex High-tech Industries Co. Ltd. Standardized Governance Bolstering Steady Development

invent

Board of Supervisors Risk Control and Internal Control

The Company has set up the Board of Supervisors which acts as a supervisory body and is accountable to all share- Compliance Risk Management

holders. The Board of Supervisors carries out their work in accordance with the A r t i c l e s o f A s s o c i a t i o n the R u l e s

o f P r o c e d u r e f o r t h e S u p e r v i s o r y B o a r d and other provisions inspects and supervises the Company's major matt-

ers financial status and the performance of duties by the directors and the management team and safeguards the To ensure the Company's business compliance and stable operation the Company identifies classifies and

legitimate rights and interests of the Company and all shareholders. assesses risks during its operations and strengthens the daily monitoring of compliance risks and the implementa-

tion of risk response strategies. To this end the Company has formulated the C o m p liance Management Manual

the C o m p l i a n c e O b l i g a t i o n M a n a g e m e n t S y s t e m the C o m p l i a n c e R i s k M a n a g e m e n t S y s t e m the Compliance Re-

Key Performance view and Reporting Management System and other compliance rules and regulations to ensure the safety and

During the Reporting Period reliability of business operations.Compliance Risk Management Process

The Board of Supervisors has 3 members

including: 1 employee supervisor; Risk Risk Risk Risk

Identification Assessment Response Monitoring

3 female supervisors accounting for 100 %;

The Board of Supervisors convened 7 meetings and deliberated 36 proposals in total. Risk identification per- R i s k m a n a g e m e n t R i s k m a n a g e m e n t R i s k m a n a g e m e n t

sonnel use methods departments analyze departments select departments continu-

such as questionnaire and rate risks based on risk response strate- o u s l y m o n i t o r t h e

surveys Delphi method occurrence probability gies and plans such as implementation of risk

sensitivity analysis and impact degree risk retention avoid- response plans regu-

General Meeting of Shareholders and scenario analysis determine risk levels ance mitigation or larly summarize and

to identify compliance and submit them to transfer for different analyze and continu-

risks and submit them the Internal Control types of r isks and ously improve r isk

The Company has set up the General Meeting of Shareholders as the highest authority and through the establish- to the Internal Control Department for verifi- after being summa- control systems and

ment of the R u l e s o f P r o c e d u r e f o r S h a r e h o l d e r s ' M e e t i n g s and other system documents defined the responsibilit- Department for sum- cation. rized by the Internal processes.mary and risk data- Control Department

ies and powers of the General Meeting of Shareholders ensuring decision-making power on major matters like base establishment. submit them to the

business policies and changes to the Articles of Association protecting shareholders' rights to information and Company for approv-

participation. al.Key Performance Key Performance

During the Reporting Period During the Reporting Period

the Company convened a total of 2 General Meetings of Shareholders the Company provided 7 sessions of training on internal risk

during which 17 proposals were deliberated and adopted. with a total of 12 participants and for a total training duration of 14 hours.

18Xiamen Solex High-tech Industries Co. Ltd. Standardized Governance Bolstering Steady Development

invent

Internal Control Construction

The Company has formulated the I n t e r n a l C o n t r o l M a n u a l the I n t e r n a l C o n t r o l S y s t e m the I n t e r n a l A u d i t System The Company has set up an audit department under the Audit Committee as the internal audit body which

and other systems to ensure that the Company's operations and core business systems run in an orderly and handles routine audits special audits and complaint handling. During the Reporting Period the Company

efficient manner while effectively preventing and controlling related risks. The Company also focuses on internal conducted spot checks and audits on the use and management of seals in various business divisions the imple-

control matters in social responsibility areas like safety production quality control environmental protection mentation of use and control processes of parts samples and warehouse risk management further standardizing

resource conservation employee rights protection and public welfare donations actively fulfilling social responsi- the seal management process and improving the control process for parts samples. In addition the Company hired

bilities and improving corporate governance and risk management capabilities. third-party professional intermediary institutions for independent internal audits each year and issued the Intern-

a l C o n t r o l A u d i t R e p o r t to enhance the objectivity and credibility of the audits and improve the effectiveness of

the Company's internal control system.Internal Control Governance Framework

Key Performance

Responsible for the formulation implementation and improvement of internal

Board During the Reporting Period

of Directors control systems and regularly conducting comprehensive inspections and effect evaluations of internal control status of the Company.Responsible for supervising the implementation of the Company's internal

control systems ordering the Company to rectify identified internal control the Company conducted 3audit projects Board

of Supervisors deficiencies and reporting the implementation of the Company's internal control covering 8 business divisions

systems to the General Meeting of Shareholders.and identifying 38 areas for improvement

Responsible for establishing and improving the internal control system in the with a 100% deficiency rectification rate.operation process and comprehensively promoting the implementation of the

Senior

management Company's internal control system and checking the development and imple-mentation of various specialized internal control systems by company depart-

ments and units.Tax Management Financial Management

To improve the Company's tax management strengthen the tax management organization- Key Performance The Company focuses on improving the construction of the financial

al system and prevent and control tax risks Solex has formulated the Tax Management management system developing the F i n a n c i a l M a n a g e m e n t R u l e s and

Measures in accordance with the T a x C o l l e c t i o n a n d Administration Law of the People's Re- During the Reporting Period other systems strengthening the construction of the financial team

p u b l i c o f C h i n a the E n t e r p r i s e I n c o m e T a x L a w o f t h e P e o p l e ' s R e p u b l i c o f C h i n a and other the Company paid a total of enhancing work efficiency fully leveraging financial functions to provide

tax laws and regulations to standardize the entire process of tax related business research RMB 63686300in taxes. solid support for business management and economic growth contribut-

accounting declaration monitoring planning evaluation forecasting and reporting ing to the Company's steady development and value enhancement.ensuring the Company pays taxes lawfully and in full.

19Xiamen Solex High-tech Industries Co. Ltd. Standardized Governance Bolstering Steady Development

invent

Information Disclosure and Investor Relations Management

Information Disclosure Management Communication with Investors

To regulate the Company's information disclosure process and ensure the The Company attaches great importance to com-

authenticity completeness accuracy timeliness and fairness of disclo- munication and interaction with investors and has Company announcement

sures the Company has formulated the Information Disclosure Manage- formulated the Investor Relations Management Sys- General Meeting of Shareholders

m e n t S y s t e m to improve the quality of information disclosure strengthen t e m to regulate and enhance interaction with inves- Company website

the management of disclosure affairs promote the Company's standard- tors and potential investors. The Company has Investor hotline email

ized operation protect the legitimate rights and interests of investors appointed the board secretary as the person Investor Regular open investor forums performance briefings

and respond to regulatory requirements to ensure that the Company's responsible for investor relations overseeing the Communication Shanghai Stock Exchange e-interactive platform

information disclosure behavior complies with the latest changes in laws planning arrangement and organization of various Channels Reception of various institutional research activities

and regulations. Since its listing the Company has maintained an investor relations activities and daily affairs. Media interviews and reports

information disclosure rating of B and has kept communication with Through close contact with investors the Company

shareholders regulatory authorities analysts and other investors is committed to improving operating performance

through multiple channels establishing a good corporate image in the to achieve substantial returns for investors.capital market.Key Performance

Key Performance

During the Reporting Period

During the Reporting Period

the Company hosted 150 on-site investor research visits

the Company disclosed 4 periodic reports and 86 interim reports received a total of 1230 investors during these visits;

with a total of 148 documents posted online.conducted 8 interactions with investors on e-Interactive

and answered 70 investor calls;

held 4 open investor forums.Visit to Listed Companies

20Xiamen Solex High-tech Industries Co. Ltd. Standardized Governance Bolstering Steady Development

invent

Protection of Shareholders’ Rights and Interests Business Ethics

The Company has formulated the R u l e s f o r t h e I m p l e m e n t a t i o n o f C u m u l a t i v e V o t i n g and the Prevention of Misa- Professional Integrity

p p r o p r i a t i o n o f C o m p a n y F u n d s b y C o n t r o l l i n g S h a r e h o l d e r s a n d R e l a t e d P a r t i e s in accordance with the Articles

o f Association and other documents to protect the legitimate rights and interests of all shareholders especially

minority shareholders. In addition to establish and improve the shareholder return mechanism the Company has The Company has formulated the I n t e g r i t y a n d C o m p l i a n c e M a n u a l and the Integrity and Self-Discipline Manage-

formulated the Shareholder Dividend Return Plan (2022-2024) and strictly follows these planning documents in m e n t S y s t e m o f S o l e x to require employees to maintain integrity and self-discipline prevent illegal and disciplina-

actual operations to enhance the transparency of profit distribution policy decision-making improve its operabili- ry behaviors and has set up a discipline inspection committee as a specialized institution for discipline supervi-

ty and actively deliver returns to investors. sion which monitors and investigates employee violations and imposes penalties based on the severity of

violations.Organizational Structure

Cash Dividends in the Past 3 Years

Unit 2022 2023 Mid-2024

The committee consists of representatives from the labor union human resourc-

Cash dividend per share yuan/share 0.20 0.44 0.27 Discipline es department administration department internal audit department and

Inspection department heads. It has the authority to formulate the Integrity and Self-Disci-

Total cash distribution (including tax) In 10000 yuan 7859.85 17736.31 11015.69 Committee pline Management System and supervise investigate and handle violations of

the integrity and self-discipline requirements.Proportion to net profit attributable

to shareholders of the listed company % 30.10 50.32 49.79

in consolidated financial statements Conduct comprehensive promotion and strict supervision of integrity and

Department self-discipline culture for department employees and report any violations of

heads integrity and self-discipline requirements to the Discipline Inspection Committee

promptly.All employees Comply with discipline accept supervision and cooperate fully with the work of

of the Company. the Discipline Inspection Committee.

21Xiamen Solex High-tech Industries Co. Ltd. Standardized Governance Bolstering Steady Development

invent

Commercial Secret Protection Management System

Anti-corruption Measures Anti-monopoly and Anti-unfair Competition

Employees are prohibited from using the conve- Employees are prohibited from exceeding their authority To create an orderly and healthy competitive environment the Company has formulated the Anti-Monopoly and

nience of position to illegally take company assets during the performance of their duties not following A n t i - U n f a i r C o m p e t i t i o n M a n a g e m e n t S y s t e m t h e D u e D i l i g e n c e M a n a g e m e n t S y s t e m and the to build a system

for personal use through methods such as embezzle- company rules and procedures handling matters of integrity and fair competition. The Company's top management are responsible for supervising the compliance

ment theft or fraud. beyond their authority or improperly exercising their officer to create a company-wide anti-monopoly culture and establish a sound internal control system to prevent

power to harm the interests of the Company or others. monopoly and unfair competition and continuously monitor the Company's anti-monopoly efforts.Anti-monopoly and Anti-unfair Competition Measures

Employees are prohibited from soliciting or accept- Employees are prohibited from privately using

ing money or other forms of benefits (bribes) from company resources for personal or others' benefit The Company is prohibited from reaching or imple- The Company is prohibited from abusing its market

others during business interactions or while causing losses to the Company's interests. menting monopoly agreements or other similar dominance to manipulate the services quantities

performing their duties or from offering bribes to collusive behaviors in business interactions with or other trading conditions of goods.others. competitors industry associations or upstream and

downstream business partners.The Company is prohibited from engaging in or The Company will proactively report any concentra-

participating in behaviors that disrupt market tion of undertakings that meets the reporting

competition order and harm the legitimate rights standards to the enforcement agencies for anti-mo-

and interests of other operators or consumers. nopoly review.Compliance Reporting System

The Company has formulated the Reporting and Investigation Management System and other documents set up

a reporting hotline email and other platforms. The Internal Control Department is responsible for handling

internal and external reports complaints and reconsideration applications verifying the matters and forming

corresponding investigation teams. The compliance officer is responsible for reviewing and approving the investi-

gation results disposal reports and reconsideration results. The Company encourages public reporting and

complaints and also accepts anonymous reports and complaints and maintains confidentiality for the person

making a report/complaint and related content to safeguard the legitimate interests of the person making a

report/complaint.

22Energy Saving and Carbon

Reduction for Green

Development

Our Philosophy

Solex actively faces the challenge of climate change strictly controls

pollutant emissions optimizes resource utilization efficiency promotes

green product development and green management models and is

committed to creating an industry ecosystem that promotes harmonious

coexistence between humans and nature.Our Actions

Response to Climate Change

Environmental Compliance

Resource Utilization

SDGsXiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Response to Climate Change

Governance Strategy

To effectively respond to the challenges posed by climate change the Company actively supports the national As global climate change intensifies the enterprises face increasing climate risks which may not only disrupt daily

carbon peaking and carbon neutrality goals continuously builds and improves the greenhouse gas (GHG) emission operations but also affect their long-term survival and development. The Company identifies climate risks and

inventory system and has formulated the G r e e n h o u s e G a s I n v e n t o r y P r o c e d u r e and established a GHG inventory opportunities related to its operations conducts climate change risk management and develops corresponding

team. The Company's Energy Department assigns a dedicated person to lead the inventory team while other response measures.departments each appoint a dedicated representative to act as team members and the Administrative Director is

designated as the management representative to jointly advance the tracking tasks.Responsibilities of GHG Inventory Management Organization

Management Representative

Responsible for approving GHG policies emission reduction targets and policy statements.Lead the GHG management review meetings and listen to reports from the Energy Department

on GHG project progress and implementation.Provide necessary resources for the smooth implementation of GHG projects.Energy Department

The department head is the first responsible person for GHG management.Formulate GHG policies emission reduction targets plans and policy declarations.Coordinate the implementation and maintenance of the ISO 14064 system organize boundary setting

and identify the Company's GHG emission sources.Responsible for reporting the progress of the GHG project to the management representative and prepar-

ing the GHG inventory and GHG report.Plan the GHG work in the plant coordinate relevant departments to support all GHG-related matters

serve as the main contact point and organize internal verification before completing the inventory report.GHG Inventory Team Leader

Assist various departments in setting GHG reduction targets and track implementation.Lead the completion of the annual GHG inventory formulate and issue the GHG inventory and GHG report.GHG Inventory Team Member

Involving all departments of the Company responsible for providing various activity data.Identify GHG emission sources within the department verify the department's GHG activity data

calculate carbon emissions and provide raw data.Implement GHG reduction measures in the department and supervise target achievement.

24Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Proba-

bility Impact Impact Value Cha- Priority Potential Financial

Risk Type Risk Description of Oc-curre- Size1 Time- in Links offrame2 Impact3 Ranking

4 Impact Response Measures

nce

Maintenance and Updates of Production Equipment and Environmen-

Typhoon tal Protection Facilities: Extreme weather conditions may damage Strengthen daily maintenance and repair of equipment and

factories warehouses etc. leading to production disruptions and Short to Upstream Increased conduct unscheduled inspections;Flood equipment damage; Low High medium operations Medium operatingcosts Develop and implement detailed disaster response plans to

Production Interruption: Extreme weather may cause power or gas term downstream Decreased ensure rapid and effective recovery of production operations Heavy Rain outages interrupting production. operating income during disasters.Sea level rise Increased Long-term Operating Costs: Rising temperatures humidity etc. may require the Company to consume more electricity and fuel to Promote and implement energy alternatives to reduce carbon

High humidity regulate production environment temperatures leading to a signifi- Upstream emissions;cant rise in energy costs; Low Med- Long-term operations Medium Increased Formulate heatstroke prevention plans and concrete measures

Average tem- Employee Health and Safety: The rise in temperature may cause

ium

downstream operating costs and strengthen education on heatstroke prevention for all

perature rise employees to suffer from heatstroke increasing health and safety risks employees.and decreasing work efficiency.The government's increasingly strict environmental protection control

requirements and carbon peak plans promote mandatory corporate Med- Med- Medium Continuously monitor and strictly comply with relevant laws and Policy and

carbon emission disclosure and regulation increasing compliance ium ium and Operations

Medium Increased operating costs regulations and actively respond to the latest environmental Legal Risks

costs for the Company. long-term protection requirements in operational areas.Transitioning to low-emission technologies will incur corresponding Med- Med- Medium Increased

costs. ium ium and Operations Medium operating costslong-term Actively develop green and energy-efficient products improve

Technology Risks research and development of product design capabilities and

continuously enhance R&D personnel reserves and capabilities.The risk of failure in investing in new technologies will cause losses for Med- Med- Increased

the Company. ium ium Mid-term Operations Medium non-operat-ing expenses

If the products provided do not meet customers' low-carbon require- Med- Med- Medium and Downstr- Medium Decreased Increase R&D investment and actively communicate with custom-ments it may result in the loss of orders. ium ium long-term eam operating income ers.Market Risks

Rising raw material costs will increase procurement costs of the Short to Operations Increased

Company leading to higher product pricing causing consumer loss. Med- High medium Medium Optimize product structure improve production processes and ium term Downstream operating costs promote the recycling of raw materials.Reputation Risks Suppliers subject to environmental administrative penalties judicial Med- Short to m- Decreased Regularly conduct environmental compliance assessments for rulings related to environmental issues will affect the Company's reputation. Low ium edium term Operations Medium operating income suppliers and develop environmental training programs.

1Low: If the risk occurs it will have little to no noticeable impact on the enterprise's finances reputation or operations and losses can be easily absorbed. 3Upstream: Involves raw material suppliers procurement and logistics affecting the stability of the supply chain and raw material costs.

Medium: If the risk occurs it will cause some negative impact on the enterprise's finances and reputation and measures may be needed to mitigate the losses. Operations: Involves production manufacturing and internal processes affecting daily operations and production efficiency.High: If the risk occurs it will cause severe financial loss to the enterprise damage to the brand and may even affect business continuity and significant Downstream: Involves distribution sales and customer service affecting customer satisfaction market share and brand image.resources may be needed to recover. 4Low: The risk has relatively minor impact on the business and can be handled in routine operational management.

2Short-term: Generally refers to within 1 year after the end of the Company's sustainability reporting period (including 1 year). Medium: The risk has some impact on the business but can be addressed or mitigated within a reasonable timeframe.

Medium-term: Generally refers to 1 to 5 years after the end of the Company's sustainability reporting period (including 5 years). High: The risk could lead to significant financial loss business disruption or severe legal consequences requiring immediate action.Long-term: Generally refers to more than 5 years after the end of the Company's sustainability reporting period.

25

Acute risk Chronic risk

Physical Risks Transformation RisksXiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Opportunity Probability Opportunity explanation of Occurr- Impact Impact Timeframe Value Chain Links Priority Potential Type ence Size of Impact Ranking

5 Financial Impact Response Measures

By introducing new equipment improving product

Technical Introduce new equipment upgrade processes. High High Medium and Operations Medium Decreased operating costs processes lower product unit prices and enhance long-term the Company's competitiveness.Adopt green and low-carbon photovoltaic energy Assess the pros and cons of investing in photovo-

Energy which is beneficial for achieving carbon High High Short to medium Operations Medium Decreased ltaics within the park and fully utilize the advant-alternatives peaking and carbon neutrality. term operating costs ages of photovoltaics.Products Augmented Encourage innovation increase R&D investment

and services Develop new products or services. Medium High Medium and Operations Medium operating income and develop green and environmentally friendly long-term products.Market Gaining AEO certification from customs

Augmented

can increase customer recognition. High High Short to medium Downstream Medium operating income Actively promote AEO certification from customs. term

5Low: The opportunity has relatively minor impact on business is relatively small but it can still bring some revenue or efficiency improvements and can be handled routine operational management without the need for significant resource investment or strategic adjustments.

Medium: The opportunity can bring certain business growth or market share improvements has a positive impact on the business but requires the enterprise to invest resources and adjust strategies within a certain period to address and seize the opportunity.High: The opportunity can bring significant market breakthroughs business growth or technological innovations significantly improves the enterprise's competitiveness and profitability and requires the enterprise to take immediate action invest considerable resources and possibly adjust its overall strategy to

fully leverage this opportunity.

26Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Impact Risk and Opportunity Management

Management Process Management Measures

During the Reporting Period in order to effectively identify assess and manage the risks and opportunities posed To achieve climate strategy goals including carbon reduction carbon peaking and carbon neutrality the Compa-

by climate change the Company has established a set of climate risk identification and assessment processes to ny has formulated a series of specific carbon reduction measures and actively uses smart carbon emission

ensure the Company maintains competitive advantage and steady development in a constantly changing climate management platforms to track carbon footprints precisely.environment.Climate Risk Identification Assessment and Management Processes Carbon Reduction Measures

1234

Risk identification Formulation of risk Implementation Risk monitoring

and assessment response strategies of risk measures and adjustments Energy structure Production process Carbon emission moni- Supply chain

adjustment optimization toring and management management

The Energy Depart- Based on identification Based on preventive Continuously follow Gradually eliminate Reduce energy con- Establish a complete Encourage suppliers

ment organizes the a n d a s s e s s m e n t and emergency mea- up monitor and ana- high energy consump- sumption and waste c a r b o n e m i s s i o n to adopt low-carbon

i d e n t i fi c a t i o n a n d formulate targeted risk s u r e s d e v e l o p a n lyze r isk measures t ion and high emis- e m i s s i o n s t h r o u g h accounting system materials and produc-

a s s e s s m e n t o f response measures implementation plan. t i m e l y u n d e r s t a n d sions equipment and technological transfor- fully understand the tion processes jointly

climate-related risk including preventive During implementa- changes in risk situa- technology promote mation and process C o m p a n y ' s c a r b o n build a green supply

factors every March m e a s u r e s ( s u c h a s tion track progress tions and adjust opti- c l e a n e n e r g y a n d optimization achieve emissions situation chain and compre-

updates the Energy and e s t a b l i s h i n g e a r l y monthly to ensure the mize and improve risk efficient energy-saving resource recycl ing and provide scientific h e n s i v e l y r e d u c e

Climate Change Risks w a r n i n g s y s t e m s effectiveness and oper- measures based on technologies improve a n d l o w e r c a r b o n basis and data support carbon emissions.a n d O p p o r t u n i t i e s and developing emergency ability of the measures. actual conditions. e n e r g y u t i l i z a t i o n emissions during pro- f o r i m p l e m e n t i n g

rates and classifies plans etc.) and emer- efficiency and reduce duction processes. c a r b o n p e a k a n d

them to determine risk gency measures (such greenhouse gas emis- c a r b o n n e u t r a l i t y

levels. as formulating post-di- sions. goals.saster recovery plans

providing emergency To enhance employees' awareness and ability

supplies etc. ) and in carbon management the Company

evaluate the effective- organized training on carbon management

ness of the developed and carbon inventory systems emphasizing

response measures. the importance of carbon management

through lectures quizzes and other methods

to encourage employees to actively incorpo-

rate energy-saving and carbon-reduction

concepts into their daily work and life. Carbon Management Training

27Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Indicators and Objectives Environmental Compliance

Solex fully implements the national carbon peaking and carbon neutrality strategy and is committed to strictly Environmental Management

monitoring and optimizing greenhouse gas emissions in all production and operational links. The Company

conducts monthly greenhouse gas inventory and develops an annual Greenhouse Gas Inventory. Solex implements the environmental policy of "preventing environmental pollution complying with environmen-

tal regulations promoting energy conservation and consumption reduction and creating a harmonious coexis-

tence between people and water." In accordance with the Environmental Protection Law of the People's Republic

o f C h i n a the Company has formulated documents such as the Solex Environmental Protection Management Sys-

t e m and the S o l e x E n v i r o n m e n t a l P r o t e c t i o n R e w a r d a n d P u n i s h m e n t S y s t e m integrated environmental eventin-

Key Performance Indicators dicators into performance evaluations established reward and penalty mechanisms for environmental pollution

constantly improved the environmental management system and actively fulfilled environmental protection

responsibilities to become an environmentally friendly enterprise.Unit 2024

Environmental Management Organizational Structure

Total Emission of Greenhouse Gases tCO2e 241757.95

Greenhouse Gas Emission Intensity tCO2e/10000 yuan of output value 2.20 Responsible for the Company's daily environmental supervision management

and monitoring work and responsible for formulating the Company’s environ-

Direct Greenhouse Gas Emissions tCO2e 876.31 Environmental mental plans goals and annual work plans and organizing environmental

Management protection awareness campaigns and training improve the Company's environ-

Indirect Greenhouse Gas Emissions tCO2e 240881.64 Center mental conditions reduce pollution to the surrounding environment while

meeting national emission standards and coordinate the Company's work with

Greenhouse Gas Emission Reduction tCO2e 689.02 government departments of ecology and environment.Actively cooperate with the Environmental Management Center adhere to the

Departments policy of “prevention in the first place and integrating prevention with control”

advocate clean production and recycling in workshops and eliminate pollutants

from the source.Administration Responsible for the warehouse management of industrial solid waste and

Center entrusting the waste to a qualified third party for disposal.

28Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

In addition the Company actively carries out environmental manage- Identification of hidden hazards

ment system certification and as of the end of the Reporting Period

Solex and its subsidiary Zhangzhou Solex both obtained the

GB/T24001-2016/ISO 14001:2015 environmental management system The Company has established the Environmental Hazard Identification System and conducts regular environmental monitoring in accordance with pollut-

certification. ant discharge permit requirements. The Environmental Management Center is responsible for identifying the Company's environmental hazards and

proposing corrective measures. Monthly environmental protection meetings are held to review and summarize the environmental hazards from each

department and the findings are documented in a report for record-keeping.Emergency Environmental Management

To effectively prevent respond to and properly

control environmental emergencies the Company

has formulated the Contingency Plans for Environ-

m e n t a l E m e r g e n c i e s and other normative docum-

ents in accordance with relevant laws and regula-

tions established procedures for dealing with

leakage of waste gas waste water hazardous

waste chemicals and other environmental emer-

gencies and organized emergency rescue opera-

tions in an orderly and efficient manner to protect

Solex Environmental Management Zhangzhou Solex Environmental the safety and health of employees and the Training on Emergency Response Plans Emergency Response Drill for Wastewater

System Certification Certificate Management System Certification public and prevent environmental pollution. Intrusion into Stormwater Drain

Certificate

Key Performance Key Performance Environmental Rights Trading

During the Reporting Period During the Reporting Period

On June 6 2024 the subsidiary Zhangzhou

Solex purchased five years of Chemical Oxygen

the Company conducted 17 emergency drills and 3 emergency Demand (COD) emission rights from Fujian

the Company invested RMB 10.945 million in environmen- training sessions specifically for leakage of waste gas waste Fuwei Co. Ltd. with an annual allocation of

tal protection and paid RMB 10600 in environmental protec- 0.8778 tons effectively alleviating environmen-water and hazardous chemicals.tion taxes; tal pressure and providing an environmental

discharge guarantee for its production

activities contributing to both economic and

with 0 environmental incidents occurred and 0 violations of environmental benefits.laws and regulations concerning environmental protection. Emission Rights

Trading Certificate

29Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Pollution Prevention and Control Waste Gas Management

Solex strictly abides by the Law of the People's Republic of China on the Solex has formulated documents such as the S o i l W a t e r a n d A i r P o l l u t i o n P r e v e n t i o n a n d C o n t r o l M a n a g e m e n t M e a s u r e s to manage waste gas emissions.Prevention and Control of Atmospheric Pollution and the Law of the Pe- The Company has set up corresponding waste gas treatment equipment for waste gas generated during electroplating spraying injection molding and

ople's Republic of China on the Prevention and Control of Water Pollution other processes and dust generated during the production process and regularly carried out maintenance to ensure that waste gas emissions meet

actively carried out pollution prevention and control work controlled standards.emissions of waste gas waste water and other pollutants and properly

handled waste to minimize the environmental impact of business

activities. The Environmental Management Center is in charge of Exhaust Gas Treatment Measures:

pollution prevention and control and designated individuals in charge of

sewage treatment plants and hazardous waste are responsible for water

treatment and hazardous waste management. Install dust treatment systems and use cyclone dust removal water spray dust removal and pulse dust removal methods to treat dust.Install exhaust systems to collect acidic exhaust gases which are then treated by matching acid mist scrubbers and discharged through the exhaust

The Company regularly entrusts third-party professional monitoring stack.organizations to monitor the factory environment and pollutant Install organic waste gas purification equipment and use water curtain absorption water spray catalytic combustion and activated carbon adsorption

emissions and provides monitoring reports to ensure that the Company's processes to treat organic waste gases.operations do not have an adverse impact on the surrounding environ-

ment.Clean Production

Solex attaches great importance to clean production aiming to reduce

and minimize the generation and emission of pollutants from the source.In December 2023 the Company completed its third round of clean

production audits and prepared the clean production audit report. In

2024 the Company continued to promote clean production supervised

the implementation of clean production plans regularly organized

employee training on clean production and established clean production

incentive mechanisms.Polishing Exhaust Gas Treatment Facilities Spray Painting Exhaust Injection Molding Exhaust

Gas Treatment Facilities Gas Treatment Facilities

30Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Case Study: Specialized Training on Exhaust Gas Treatment Wastewater Management

On August 26 2024 the The Company actively carries out wastewater management work and has formulated the Sewage Treatment Cen-

Company held a special t e r O p e r a t i o n M a n a g e m e n t M e a s u r e s . The third party environmental monitoring unit is entrusted to monitor the

training session on VOCs Company's sewage discharge situation every year to ensure compliance with local environmental protection

a n d O D S p r o v i d i n g a bureau requirements. The Company's wastewater includes both domestic and industrial wastewater. Domestic

detailed explanation of wastewater is treated by biological treatment technology before discharge while industrial wastewater is treated

the environmental haz- using chemical precipitation and anaerobic and aerobic treatment technologies before discharge.In 2024 The

ards posed by volatile Company recycled 51787 tons of wastewater with a wastewater recycling rate of 35%.organic compounds and

o z o n e - d e p l e t i n g s u b - Case Study: Standardized Training on Wastewater Discharge

stances as well as the

relevant laws and regula- On November 13 2024 the Company conducted standardized

t i o n s . T h e t r a i n i n g training on wastewater discharge carefully explaining waste-

enhanced employees' water discharge-related systems wastewater treatment pro-

understanding of the haz- cesses and discharge requirements. Through this training

ards of air pollutants and employees' understanding of the Company's wastewater treat-

raised awareness of waste ment work was effectively improved laying a solid foundation

gas control. for the further advancement of the Company's environmental

Special Training on Exhaust Gas Treatment protection work. Standardized Training

on Wastewater Discharge

Key Performance Indicators Key Performance Indicators

Unit 2024 Unit 2024

Waste Gas Emissions 10000 m3 513305.88 Wastewater Discharges 10000 m3 28.9458

Nitrogen oxide (NOX) ton 0.0095 Chemical oxygen demand (COD) ton 8.4357

Sulfur dioxide ton 0.0095 Five-day biochemical oxygen demand (BOD5) ton 2.7311

Hydrogen chloride ton 0.2175 Suspended solids ton 5.2513

Volatile organic compounds (VOC) ton 0.8012 Ammonia nitrogen (NH3-N) ton 2.5293

Sulfuric acid mist ton 0.0635 Total phosphorus (P) ton 0.0033

Particulate matter (PM) ton 9.2822 Animal and plant oils ton 0.0015

31Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Management of Wastes Case Study: Standardized Training on Hazardous Waste Management

Solex has formulated the W a s t e M a n a g e m e n t S y s t e m and the Hazardous Waste Environmental Pollution Prevent- On March 19 2024 the Company conducted standardized training on hazardous waste management

i o n a n d C o n t r o l R e s p o n s i b i l i t y S y s t e m to standardize the disposal process of general waste and hazardous waste introducing employees to hazardous waste laws and regulations the Company's hazardous waste manage-

ensuring environmental safety. ment system major hazardous waste categories and the environmental protection bureau's hazardous

waste assessment through PPT presentations. This training enriched employees' professional knowledge in

hazardous waste management and encouraged them to consciously and rigorously practice standardized

hazardous waste management concepts and operational procedures in their daily work.Waste type Main wastes Main disposal measures

Waste mineral oil paint waste Transported to the Company's temporary storage area for

Hazardous waste organic solvents waste hazardous waste for treatment by qualified third-party

waste emulsified liquids etc. service providers

Waste cardboard waste sand

General Entrusted to qualified third-party general solid waste

waste scrap metal waste wood disposal companies for treatment

plastic scrap etc.Household Handed over to the environmental health management Standardized Training on Hazardous Waste Management

garbage Household garbage department for unified processing

Key Performance Other Pollution Emissions

During the Reporting Period

The Company also actively carries out noise pollution control and soil pollution control by installing noise reduc-

Quantity of general waste generated: 1914.29 tons; tion and vibration reduction equipment using double-glazed windows employing soundproof rooms and factory

1914.29 soundproofing techniques for noise control while strictly storing collecting recycling or disposing of substances Quantity of general waste disposed of: tons; that could cause soil pollution in an orderly manner to minimize the potential for soil pollution.

Quantity of Hazardous Waste Generated: 1287.94 tons;

Quantity of hazardous waste disposed of: 1287.94tons.

32Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Green Operations

Green Office Environmental Public Welfare

The Company actively promotes the concept of green office and encourages employees to integrate energy-saving In order to cultivate employees' environmental awareness the Company actively carries out environmental

and environmental protection awareness into their daily work and life making contributions to environmental protection publicity and education and encourages employees to practice environmental protection concepts in

protection and sustainable development. daily life and work through interactive games quizzes and on-site promotions.Green Office Initiatives Case Study: Environment Day “Comprehensively promote the construction of a beautiful China”

Use double-sided printing and advocate paperless office to save paper. On June 5 2024 the Company held the Environment Day "Comprehensively promote the construction of a

Set the air conditioning temperature to 26°C in offices turn off lights computers and projectors in meeting beautiful China" and conveyed the importance of environmental protection to participants through

rooms after use and turn off lights and air conditioning when leaving the office to save electricity. interactive games quizzes and other activities. Employees generally provided feedback that it strength-

Install automatic faucets in water sinks to effectively avoid employees forgetting to turn off the faucet after use ened their environmental awareness. In the future the Company will continue to promote the populariza-

to save water. tion and practice of environmental protection concepts.Set up classified trash bins and post waste sorting posters in the environmental protection bulletin board.Garbage Sorting Posters Air Conditioning Use Automatic Faucets Environment Day event

Temperature Control

33Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Resource Utilization To improve energy management the Company has established an energy leadership team with the Vice Chairman and President serving as the top leaders. The Safety Resources Department oversees the team while each business

division has a designated energy manager and an energy management specialist to coordinate the energy

Improving resource utilization efficiency is an important part of the Company's sustainable development practices management work from top to bottom. The Company incorporates energy management work into performance

and a key measure to protect the ecological environment. Solex is committed to optimizing the efficiency of evaluations scores according to evaluation standards and divides it into four levels: A B C and D with

energy water and material utilization actively developing a circular economy and building a resource-saving corresponding performance rewards.enterprise.Energy Management Organizational Structure

Energy Management

Corporate Governance

Highest Leaders

Solex adheres to the energy management policy of "compliance with law fine management low-carbon manufac-

turing and sustainable development" and has formulated documents such as the Solex Energy Management Ma-

n u a l and the C o m p a n y E n e r g y C o n s u m p t i o n I n d i c a t o r A s s e s s m e n t M a n a g e m e n t M e a s u r e s to guide and regulate Safety Resources Department

the Company's energy usage behavior and improve energy utilization efficiency.In 2025 Solex and its subsidiary

Zhangzhou Solex both passed the ISO 50001:2018 Energy Management System Certification marking a new step

forward in the standardization and normalization of energy management.Beauty and

PME Division Shower Division Intelligent Electronics Division Group Center

Health Division Kitchen and Basin Beauty Space

Division New Category Incubation

Division Innovation Design Center

Energy Energy Energy Energy Energy

Specialist Specialist Specialist Specialist Specialist

Strategy

Under the increasingly strict energy regulation background enterprises are facing growing energy usage risks.These risks may not only disrupt the daily operations of enterprises but could also harm the brand reputation and

Solex's Energy Zhangzhou Solex's Energy market position accumulated by enterprises over the long term. The Company actively identifies related energy

Management System Certification Management System Certification risks and develops response measures.

34Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Probability

Risk Type Risk Description Description of Occurre- Impact Size Impact Timeframe Value Chain

nce6 Links of Impact

Priority Ranking Potential Financial Impact Response Measures

Extreme temperature

events extreme storms Increase the ability to

heavy rainfall droughts resist risks from extreme P r o t e c t e n e r g y f a c i l i t i e s

etc. may cause damage w e a t h e r e v e n t s a n d increase energy diversity opti-Physical

to the Company's energy enhance the enterprise's

Low Medium Short to medium term Upstream Medium Increased energy costs mize energy structure develop

Risks

facilities energy supply management capability

Operations e m e r g e n c y r e s p o n s e a n d

i n t e r r u p t i o n s a n d to cope with energy risk disaster recovery plans etc..increased energy costs. challenges.New energy policies and T h e g o v e r n m e n t h a s

environmental protec- i n t r o d u c e d s u b s i d y

t i o n r e g u l a t i o n s m a y incentive and other poli-

increase enterprises' cies to encourage enter- Optimize energy structure

Policy energy compliance costs prises to adopt clean Medium Medium Medium and long-term Operations Medium Increased energy invest in clean energy technol-

Risks or even restrict energy e n e r g y o r i m p r o v e compliance costs ogies.usage indirectly affect- energy efficiency.i n g p r o d u c t i o n a n d

energy efficiency.I n v e s t m e n t i n n e w Successful energy transi-

energy technologies or t i o n a n d p r o c e s s Reduce technical develop-

e n e r g y e ffi c i e n c y - e n - upgrades make it easier m e n t d i ffi c u l t y a n d r i s k s

Technology hancing products may to attract green inves- Low Medium Short to medium term Operations Medium Increased cost expenditure through technology introduc-

Risks fail causing losses to tors. tion and collaborative R&D.enterprises.Rising energy costs affect Develop energy-saving Increase energy diversity and

Market the Company's costs and products and technolo- High Medium Short to medium term Operations Medium Increased operating costs develop higher-quality prod-

Risks profits. gies explore new mar-

kets. ucts.

6The probability of occurrence the magnitude of impact the time span of the impact the value chain links of impact priority ranking and potential financial impact are all used to assess the risks.

35Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Impacts Risks and Opportunities

Management Process Management Measures

During the Reporting Period the Company formulated the E n e r g y R i s k a n d O p p o r t u n i t y C o n t r o l P r o c e d u r e s and Solex formulates an energy management plan every year and follows up on the implementation of the plan and

other documents and established a complete set of processes for identifying assessing and managing energy energy-saving benefits. During the Reporting Period the Company's energy management plan mainly focused on

risks and opportunities to effectively enhance its ability to resist risks. energy-saving transformation plans the promotion of intelligent energy monitoring system construction replace-

ment of old high-energy-consuming equipment and the adoption of energy-saving equipment to improve energy

efficiency. At the same time in August 2024 the second phase of the roof photovoltaic project of the subsidiary

Zhangzhou Solex was successfully connected to the grid achieving photovoltaic power generation and the energy

Energy risk and opportunity identification assessment and management process structure was further optimized.During the Reporting Period the Company conducted several energy-saving training activities for employees. At

the same time the Company actively carried out energy-saving promotional activities. In July 2024 it hosted an

1 2 3 4 energy-saving outdoor activities across three parks with 454 participants. Through activities such as mini-game

Establish a risk Risk identification Risk control Risk update and challenges and energy-saving science popularization video contests the event effectively raised employees'

identification team and assessment continuous improvement awareness of energy conservation promoted the learning and sharing of energy-saving skills and fostered a green

energy-efficient park environment.The Company has set The risk identification Based on different risk Update the risk control plan

up a risk identification team has formulated a levels develop corre- in a timely manner based on

team led by the ener- risk assessment plan s p o n d i n g r e s p o n s e actual circumstances and

g y - s a v i n g t e a m t o based on the Compa- measures to minimize conduct risk assessment

organize and carry out ny's actual situation the impact of risks and from scratch when signifi-

the work. o r g a n i z e d v a r i o u s regularly review the cant changes occur in rele-

f u n c t i o n a l d e p a r t - r isk control plan to vant laws regulations or

m e n t s t o c a r r y o u t ensure its effective- the Company's situation.i d e n t i fi c a t i o n a n d ness.assessment and man-

aged them according

to risk levels.Energy-saving Outdoor Activities Site

36Xiamen Solex High-tech Industries Co. Ltd. Energy Saving and Carbon Reduction for Green Development

invent

Indicators and Objectives Water resource management

The Company has set an energy-saving target for 2024 specifically aiming to reduce energy consumption by 3% In accordance with the Water Law of the People's Republic

compared to the 2023 levels. To achieve this each department has set corresponding energy-saving targets and o f C h i n a and other laws and regulations the Company has Key Performance

established an energy-saving incentive mechanism to encourage active participation in the formulation of formulated the S o l e x W a t e r M a n a g e m e n t S y s t e m to stren- During the Reporting Period

energy-saving plans and the implementation of energy-saving measures. gthen water management and improve water efficiency.The Company regularly conducts comprehensive inspec- The Company's total water consumption is

tions of the water supply system and water-using facilities 573813 tons with a water consumption

tests water quality for raw water treated water etc. identi-

fies water risks and develops response measures. The intensity of 1.69 tons/10000 yuan of output

Company monitors the water consumption of each factory value.Key Performance Indicators through the intelligent water management system to

improve the fine management of water resources and also

Unit 2024年 recycles wastewater through a reclaimed water system

with a wastewater reuse rate of 35%.Total Energy Consumption tce 257455.53 Material Management

Energy Consumption Intensity tce/10000 yuan of output value 0.76 Upholding the concept of environmental protection the

Company has formulated the Rules on the Use of Returnable

Natural gas 10000 m3 24.56 Items and Early Warning Mechanism Management Measures

with a focus on using environmentally friendly materials

Gasoline liters 96997.36 that are non-plasticized and biodegradable in packaging

and has implemented green packaging initiatives to

Diesel liters 71822.31 minimize environmental impact. At the same time the

Company advocates material recycling and requires suppli-

Purchased electricity MWh 63827.86 ers to promptly recycle cartons pallets plastic blisters and

other returnable items for reuse and incorporates the Recyclable Returnable Pallet

Total purchased heat GJ 10649.62 management cost of returnable items into the performance

assessment of the responsible personnel to effectively

Photovoltaic Power Capacity kWh 5044965 reduce returnable item costs.Key Performance

Clean energy consumption tce 280.59

During the Reporting Period

Fossil energy consumption tce 256554.91

the Company used 17.05 tons of non-plasticized

Non-fossil energy consumption tce 620.03 and biodegradable materials.Recyclable Transparent PVC Blister

37Innovation for Quality

Responsibility First

Our Philosophy

Solex adheres to the product policy of "technological innovation

quality-oriented" and injects strong momentum into the Company's

continuous high-quality growth through the establishment of a sound

R&D structure implementation of comprehensive product lifecycle

quality management active protection of consumer rights and strength-

ening of the resilience and sustainability of the supply chain.Our Actions

Innovation-driven

Product quality

Protection of Customers' Rights And Interests

Information Security and Privacy Protection

Supply chain management

SDGsXiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Innovation-driven R&D Personnel Information

Governance

Solex has always followed the business philosophy of "innovation design and manufacture" and attaches great Master’s Degree or above18Person

importance to the driving force of innovation for the Company. The Company has formulated documents such as

the N e w P r o d u c t D e v e l o p m e n t W o r k G u i d e l i n e s and the N e w P r o d u c t D e v e l o p m e n t C o n t r o l P r o c e d u r e s to standa- Bachelor’s degree542Person

rdize the new product development process and promote the rapid transformation of new products into mass-pro-

duced products. The Company also has an Intelligent Electronics Division that provides R&D support in electronic By academic College134Personqualification

and intelligent technologies to various business divisions. In addition each product division of the Company has High school or below124Person

set up a dedicated R&D department to promote the innovative upgrading of each product category closely linking

the R&D stage with the sales stage ensuring that the R&D process is market-driven and improving the transforma-

tion rate of new product development.The Intelligent Electronics Division is the Company's main R&D department divided into internal R&D teams

(Smart R&D Center) and external R&D teams (Smart Health Joint Research Center Optoelectronic Beauty and Under 30 (exclusive) years old373Person

Health Joint Research Center and Postdoctoral Research Workstation). Additionally an experimental center is set

up to provide one-stop experimental and testing environments for products. 30 (inclusive) to 40 (exclusive) years old302Person

40 (inclusive) to 50 (exclusive) years old123Person

R&D Organizational Structure Diagram By age

50 (inclusive) to 60 (exclusive) years old19Person

60 years old or above1Person

Solex

Innovation Design Center

Intelligent Electronics R&D Department

Total Total R&D team members818Person

R&D team

members

Kitchen and Basin New Category

Shower R&D Beauty Space R&D Beauty and Health Incubation R&D Smart Toilet Toilet Accessories

Department Department R&D Department Department R&D Department R&D Department

39Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Innovation Incentive Mechanism Technological Innovation Platform Construction

The Company has formulated documents such as the Research and Dev- Solex's R&D innovation capabilities have been recognized by government departments and industry associations receiving awards such as National

e l o p m e n t A c h i e v e m e n t R e w a r d M e a s u r e s and the R&D Incentive Manage- Service-Oriented Manufacturing Demonstration Enterprise National Postdoctoral Research Station National Enterprise Technology Center National

m e n t R u l e s to encourage R&D personnel to fully engage their innovative Industrial Design Center and National Intellectual Property Demonstration Enterprise. The subsidiary Zhangzhou Solex has been awarded the Fujian

potential. Different bonus bases have been set for IDM ODM and OEM Provincial Specialized and Innovative Small and Medium Enterprise and National High-tech Enterprise.projects and evaluated and graded based on innovation difficulty and

contribution as bonus coefficients. These measures aim to maximize the

development of new products technologies and projects promote the

commercialization of scientific research achievements enhance the

enterprise’s competitiveness and improve economic benefits.Patent reward Technological innovation

and transformation reward

Project reward Reward types Intellectual property

implementation reward

Proposal reward Scientific research achi-

evement transformation

reward

Key Performance

During the Reporting Period

the Company's innovation incentive expendi-

ture was RMB530868.36

159 Additionally the Company actively collaborates with universities top-tier hospitals and other institutions for cooperative R&D leveraging each other's with people receiving incentives. strengths to jointly build a research and development platform based on industry-university-research cooperation promoting the transformation and

application of technological achievements. For example the Company collaborates with Huaqiao University to establish the Smart Health Research Center

focusing on AI + smart health key technology R&D; and the Company collaborates with the Stomatological Hospital of Xiamen Medical College for the

development of oral care monitoring products and the development and industrialization of smart water flossers.

40Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Strategy

As market competition intensifies developing more energy-efficient products that better meet customer needs is key to maintaining the Company's competitiveness. The Company actively identifies and evalu-

ates the risks and opportunities in R&D innovation and formulates corresponding response measures to enhance its R&D capabilities.Risk Type Risk Description Opportunities Probability Impact Size Impact Timeframe Value Chain Links Priority Ranking Potential Financial of Occurrence of Impact Impact Response Measures

During the process of tech- Conduct patent retrieval and

nological innovation the analysis to avoid infringing on

Legal risks Company may face legal

others' intellectual property

disputes such as patent Low Large Mid-term Operations Medium

Increased

operating costs during R&D; and promptly

infringement trademark apply for patents to protect its

disputes etc.. own R&D results.Product innova- Conduct research and deter-

tion helps the mine the correct direction and

e n t e r p r i s e topics for R&D establish and

New products or technolo- strengthen its implement control processes

g i e s m a y f a c e q u a l i t y core competi- for new technology research Technology

i s s u e s o r f a i l t o m e e t tiveness attract Low Medium

Short to Operations Medium Increased and product development Risks

market trends. more custom-

medium term operating costs strictly adhere to quality plan-

e r s i n c r e a s e ning and process control and

market share ensure that new technologies

a n d i m p r o v e and products meet quality

profits. requirements.Motivate R&D personnel who

Talent Key members leaving the produce innovative results

turnover R&D team causing knowl- Low Medium

Short to Operations Medium Increased

edge loss. medium term operating costs

improve their compensation

and strengthen team cohe-

sion.

41Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Impact Risk and Opportunity Management Innovation-driven Management Measures

The Company has established a complete process for identifying evaluating and managing R&D innovation risks Protection of Intellectual Property Rights

and opportunities to actively respond to R&D innovation risks and ensure the smooth progress of R&D projects.The Company attaches great importance to intellectual property

R&D risk and opportunity identification assessment and management process protection and has formulated systems such as the Patent Managem-

e n t S y s t e m the Intellectual Property Records Management System

and the I n t e l l e c t u a l P r o p e r t y E m e r g e n c y H a n d l i n g M e a s u r e s covering

Identify potential risks Assess the probability of Formulate preventive Continuously follow up the generation maintenance and application of intellectual property

that may arise through- occurrence and impact and emergency mea- on the implementation comprehensively. The Company has also established an Intellectual

out the entire process of of identified risks and sures for the risks to of risk response mea- Property Center responsible for managing patents trademarks etc.developing new tech- determine the risk level minimize their impact sures regularly review tracking updates to laws and regulations handling intellectual proper-

nologies and products a n d m o n i t o r r i s k ty disputes and has been awarded as National Intellectual Property Trade Secrets Protection Seminar

and conduct regular factors and adjust the Demonstration Enterprise and Xiamen Intellectual Property Demon-

project reviews risk list and response stration Enterprise.measures in a timely

manner During the R&D project development process the Company focuses on

Risk Risk Risk Risk the timely registration application and filing of intellectual property

identification Assessment Management tracking to ensure that innovative results are legally protected. In 2024 the

Company successfully applied for a total of 265 domestic and interna-

Indicators and Objectives tional patents and 1 copyright. Additionally the Company conducts

comprehensive intellectual property due diligence through cross-de-

partment collaboration and seminars to reduce the risk of the products

To promote technological innovation the Company has set R&D innovation goals and is firmly advancing techno- infringing on others' intellectual property. Moreover the Company

logical innovation focusing on building an intelligent hardware IDM shared platform integrating and optimizing organizes intellectual property training to strengthen the intellectual Leaders from the Fujian Provincialthe Company's three major resource-sharing platforms of "model technology and manufacturing” and based property awareness of all employees fostering a culture of respecting Administration for Market Regulation

on HOME scenarios and health scenarios leveraging AIOT technology and the concept of big health to empower and protecting intellectual property across the Company. provided guidance on Solex's intellec-

the development design and intelligent manufacturing of kitchen and bathroom and health products beauty and tual property protection efforts

health products and emerging intelligent health hardware IDM products.Key Performance

As of the end of the Reporting Period

Key Performance

During the Reporting Period The Company's R&D investment: RMB 225113700 the Company had a total of 23 trademarks and 1337 authorized patents

Percentage of R&D investment in main operating income:7.47%. including 422 invention patents 756 utility model patents and 159 design patents.

42Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Participation in Standard Development Product Quality

Solex attaches great importance to industry communication and actively participates in industry standard-setting Governance

to jointly build a standardized and harmonious industry environment. The Company has participated in the

development of multiple kitchen and bath industry standards covering 8 national standards 12 industry Since its establishment Solex has always adhered to the quality policy of "Customer-Centric Continuous Improve-

standards and 4 group standards. ment; Technology Innovation Quality Primacy" and has formulated quality management systems such as the

I n s p e c t i o n a n d T e s t C o n t r o l P r o c e d u r e s the Production Management Control Procedures and the Incoming Ma-

Some major standards: n a g e m e n t S p e c i fi c a t i o n s and implemented strict quality control in all aspects such as product R&D material pro-

curement production and product testing thereby establishing a good brand image. To ensure the effective

operation of the Company's quality management system the business divisions have a separate quality manage-

Ceramic cartridge faucets Terminology and classification for the kitchen and sanitary ware fittings ment department responsible for product quality control. During the Reporting Period the Company and its National Standard GB 18145-2014 National Standard GB/T 33733-2017 subsidiary Zhangzhou Solex have obtained the quality management system certification.Sanitary ware - Pressure assistant Minimum allowable values of water efficiency

water flushing devices and water efficiency grades for showers

National Standard GB/T 26750-2011 National Standard GB 28378-2019

Sanitary ware - Gravity water Quality grading of consumer products - Kitchen

flushing devices and supports and sanitary ware fittings (Zhangzhou Solex)

National Standard GB 26730-2011 National Standard GB/T 44212-2024

Sanitary fixture for water saving General technical requirements for kitchen

National Standard GB/T 31436-2015 and sanitary ware fittings (Zhangzhou Solex)National Standard GB/T 44180-2024

Digitalization Construction

Solex actively promotes the digitalization of R&D innova-

tion leverages SAP and OSAP software to manage

various business processes such as finance human

resources materials and procurement and collects

analyzes and monitors data from the R&D and produc-

tion processes through the Manufacturing Execution

System (MES) to ensure precise execution of production

plans and on-time delivery. At the same time the Compa-

ny also uses Business Intelligence (BI) to organize

analyze and visualize internal and external data helping Digitalization Construction Solex's ISO 9001 Zhangzhou Solex's ISO 9001

business managers make wiser decisions. Quality Management System Certificate Quality Management System Certificate

43Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Strategy

The Company actively identifies quality safety risks and potential opportunities related to its products and implements product quality safety risk management measures to ensure that the product quality meets standards.Risk Type Risk Description Description Probability of Impact Value Chain Links Priority Potential Fina-Occurrence Size Impact Timeframe of Impact Ranking ncial Impact Response Measures

F a i l u r e t o p r o m p t l y Product structure adjust-

understand updates to ments and changes in the

Risk of changes Upstream product standards and industry's production Compensation Timely collect and assess laws regulations and stan-

in laws and operations laws and regulations or e n v i r o n m e n t b r i n g Low High Long-term Medium fines dards and translate them into internal company stan-

regulations downstreamcurrent systems not in potential customers to dards for implementation;

line with new standards. the Company. Increase market development.Low production efficien- Improve the Company's Timely post nonconforming labels;

Product manu- cy or high defect rate; product percent of pass The Logistics Department formulates reasonable pro-

facturing and Unclear product labeling and production efficien- Operations Compensation duction plans;

quality safety mixed materials; c y r e d u c e c u s t o m e r Low Medium Long-term downstream Medium fines The Production Department produces according to

risks Substandard product complaints and increase plan and ensures proper labeling;

quality. customer satisfaction. The Quality Department follows up on inspections to ensure the product meets customer requirements.U n d e r s t a n d m a r k e t

Misjudging market devel- d e v e l o p m e n t t r e n d s Increased storage

Customer opment trends failing to identify potential cus- costs and capital Repeatedly verify market demand and product devel-

demand risks understand and meet tomer needs ensure con- Low Medium

Short- and Operations occupation opment trend analysis and monitor and measure cus-

customer needs. tract fulfil lment and medium-term downstream

High

reduced sales tomer requirements.improve customer satis- revenue

faction.Reduce customer com-

Failure to effectively plaints improve custom-

Increased after-

Customer sales service

complaint risks resolve customer com-

er service quality and Short- and Operations Establish a complaint handling process to ensure

plaints. satisfaction bring new

Medium High medium-term downstream Medium costs and oper- timely feedback and handling of customer complaints.projects or products to ational costs

the Company.Properly maintain equip-

Insufficient equipment ment to create a good Provide maintenance and spare parts inventory of

capacity and capability production environment Production Medium- and Reduced profit equipment;

equipment risks f r e q u e n t e q u i p m e n t

and reduce product costs Medium High Upstream Medium Establish a complete emergency plan for equipment

breakdowns. by introducing advanced

long-term margin failures to ensure the smooth continuation of the pro-

production technology duction process.and equipment.

44Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Impact Risk and Opportunity Management Case Study: Inlet Valve Product Knowledge Training

Management Process On May 28 2024 the Company conducted an internal knowledge training on inlet valve product to

strengthen employees' understanding of product performance and usage techniques. On November 4 the

Company expanded the training scope and provided the same product knowledge training to suppliers

followed by an assessment of the training effectiveness to ensure a consistent high standard of product

knowledge across all stages of the supply chain.E a c h d e p a r t m e n t The assessment team E a c h d e p a r t m e n t E a c h d e p a r t m e n t

identifies r isks and evaluates and summa- takes measures based reviews the measures

opportunities within r i z e s t h e r i s k s a n d on the risk assessment taken for r isks and

its department and opportunities identi- results to reduce or opportunities annual-

the Quality Depart- fied by each depart- eliminate risks. ly to verify their effec-

ment organizes a risk ment. tiveness.a n d o p p o r t u n i t y

assessment team to

l ist the assessment

plan.Risk and Opportunity Risk and Opportunity Risk and Opportunity Risk and Opportunity

Identification Assessment Management Review

Management Measures

The Company focuses on managing and maintaining production equipment. All relevant departments have formu-

lated equipment management systems such as the A n n u a l E q u i p m e n t M a i n t e n a n c e P l a n and the Annual Shower

A s s e m b l y E q u i p m e n t M a i n t e n a n c e P l a n and regularly conduct equipment maintenance to ensure efficient operat-

ion of equipment and smooth production processes.The Company organizes quality training and related skill competitions every year including training on quality

systems sampling plans and incoming quality inspection standards aiming to continuously enhance employees' Internal Inlet Valve Product Knowledge Training

quality awareness and improve operational skills.

45Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Indicators and Objectives Product Quality Management Measures

The Quality Departments of each business division adhere to the development strategy of "intelligent hardware Key Node Management in Product Manufacturing Process

IDM" and the business philosophy of "innovation design manufacture" and have set quality objectives.To ensure product quality the Company has developed a set of procedures covering the entire product manufac-

Company Product Service Quality Objectives in 2024 Achievement turing lifecycle ensuring strict control at every stage from raw material procurement to manufacturing and to

after-sales service and product recalls with the aim of achieving continuous stability and optimization of product

Monthly return loss rate ≤ 0.16% Achieved quality.Customer complaint handling timeliness rate: 100% Achieved Product Manufacturing Process

FQC finished product batch acceptance rate ≥ 98.5% Achieved

Customer finished product batch acceptance rate ≥ 98.5% Achieved Inspectors conduct inspections based on the delivery order or pending inspection records in

the OA system;

Inspectors determine inspection plans based on the quality inspection plan and select

samples for inspection according to relevant inspection standards. Products that fail the

1 inspection are rejected on the Inspection Sheet based on the final judgment in the Incoming

Key Performance Incoming

Material Inspection Report and are marked accordingly;

During the Reporting Period Inspection Warehouse personnel notify suppliers through the OA to handle product returns for noncon-

forming materials;

If the materials provided contain hazardous substances it is required to ensure that the

Number of products that are required to be withdrawn and recalled for health and safety received materials are accompanied by the supplier's E n v i r o n m e n t a l D e c l a r a t i o n and have

reasons: 0; undd-party sampling and testing prior to inspection.Solex recorded zero instances of negative public opinion about our company;

Inspectors should inspect the first finished product according to the Quality Inspection Plan

Number of risk assessments conducted: 27; and submit the first product sample and report to the team leader for approval once it is

Product Percent of Pass: 98.76%; 2 confirmed to be conforming;

Process Operators should perform self-inspection and mutual inspection on products and materials

Number of annual internal quality audits: 14; Inspection based on the process card and mark and isolate any defective items found;

The inspectors of the Quality Department should focus on key process or those where

Number of times third-party agencies were engaged for sampling: 20; quality issues frequently occur.Number of participants in quality training: 2459; Inspectors conduct sampling inspections based on inspection standard documents and

1205.50 3 record the inspection results in the corresponding Inspection Report;Total hours of quality training: ;

Final If inspectors find that the product does not meet the requirements they should issue a Qu-

Number of quality training sessions: 244. Inspection a l i t y I s s u e H a n d l i n g F o r m and follow the N o n c o n f o r m i n g P r o d u c t C o n t r o l P r o c e d u r e for r-

ework.

46Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Product Recall Management Product Quality Management Digitalization

The Company has formulated the P r o d u c t R e c a l l W o r k I n s t r u c t i o n P r o d u c t R e c a l l M a n a g e m e n t S y s t e m the and The Company has deeply integrated quality management with digital technology developing systems such as the

the P r o d u c t R e c a l l M a n a g e m e n t P r o c e d u r e s to ensure the orderly and controllable product recall process and OA quality control module an electronic inspection report generation system connected to digital calipers and a

protect the rights and interests of consumers. rework process system. These initiatives have significantly enhanced production efficiency enabled real-time

monitoring of product information and production progress and ensured the rapid identification and timely

rework of nonconforming products during manufacturing thereby ensuring the stability and continuous improve-

Product Recall Management Process ment of product quality.

1234

Sales personnel should The sales manager orga- T h e Q u a l i t y C o n t r o l If the recalled product

clearly and specifically nizes relevant depart- Department analyzes the quantity is too large the

fill out the Product Recall ments and personnel to defective products for general manager should

A p p l i c a t i o n F o r m inclu- analyze the cause of the their root cause writes convene a management

ding customer names product recall for prod- out handling suggestions review meeting.product names quanti- u c t s w i t h o u t q u a l i t y executes the Nonconfor-

ties and the reason for issues and provide han- ming Product Control Pr-

recall; dling suggestions; o c e d u r e for non-conform-

ing products and fills out OA Quality Control Module

the Corrective and Preven-

tive Action Report;

Rework Process System

47Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Protection of Customers' Rights and Interests

Solex adheres to the customer service philosophy of "providing valuable The Company has established a monthly KPI evaluation system for Customer Complaint Response Mechanism

product solutions putting customers first offering professional team customer service focusing mainly on customer visits complaints factory

support ensuring stable points of contact and maintaining transparency inspections and other aspects of customer service handling. The Compa- The Company has established systems such as the Customer Complaint

and sincerity." The Company continuously refines every aspect of ny also organizes non-scheduled training project sharing sessions and M a n a g e m e n t P r o c e d u r e s the Customer Complaint Handling Work Inst-

pre-sales consultation in-sales service and after-sales support with a other activities to enhance employees' customer service awareness and r u c t i o n s t h e E x t e r n a l Q u a l i t y I s s u e M a n a g e m e n t P r o c e d u r e s and the Cu-

commitment to building a high-quality comprehensive customer service improve their skill levels Additionally the Company uses Yingdao stomer Feedback and Complaint Control Procedures and set up a dedicated

system. software to complete processes such as order placement booking and complaint handling team to ensure prompt response and proper resolu-

invoicing thereby improving the efficiency and accuracy of customer

Customer Service Management tion of customer complaints.service.The sales departments of each business division have developed

Process Management Procedures for Customer- Case Study: Induction Training

Sources of customer complaints

documents such as the Customers provide feedback and complaints through written messag-

R e l a t e d P r o c e s s e s to effectively and promptly understand and address es emails verbal communication refusals returns and other means.customer service needs. Through collaboration between the Marketing Timely response

Center R&D Center Quality Assurance Department Production Depart- For new employees joining in the current year the Company Upon receiving a complaint the Sales Department confirms the issue

ment and Warehouse Department the Company ensures that customer regularly conducts SOP training covering a series of customer immediately communicates with the customer and attempts to record

requirements for product quality and other related demands are met service tasks from the quotation process to customer visits and product/problem-related information and promptly clarifies this with

thereby maintaining long-term stable customer relationships and laying relationship maintenance to effectively enhance new employees' the customer if the issue is not related to the Company;

a solid foundation for the Company's high-quality growth. During the professional knowledge and skills in customer service. Customer complaint level classification

Reporting Period the Company received the Excellent Supplier Award. The Quality Department verifies the complaint/feedback classifies it

by severity and determines whether an investigation is needed and

explains the reason and records it if no investigation is conducted;

Root cause analysis

The responsible department investigates the complaint and if neces-

sary invites the general manager to participate in a complaint meeting

to analyze the issue discuss the root cause and determine corrective

and preventive actions;

Customer complaint response

Once the complaint is fully understood the Quality Department pre-

pares a report and the Sales Department communicates the improve-

ment measures or results to the customer;

Follow-up and tracking

The responsible department follows up on the implementation of

New Employee Induction Training corrective and preventive measures. The Quality Department supervis-

The Company Received the Excellent Supplier Award es and collects evidence of corrective actions and keep records.

48Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

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Case Study: Timely and Accurate Handling of Customer Complaints Customer Satisfaction

On January 6 2024 the customer reported that 800 sets of

82ZM42-000-0008 F10 back shell assemblies had cracked screw The Company attaches great importance to customer satisfaction and Key Performance

posts during assembly. The Company’s salesperson went to the has established system documents such as the Customer Satisfaction Su-

customer’s warehouse to conduct a full inspection found 144 r v e y P r o c e d u r e and the Customer Satisfaction Management Procedure. During the Reporting Period

defective items and sent them back to the factory for rework. The The Company conducts customer satisfaction surveys annually focuses

Production Department investigated and determined the cause of on evaluating customer satisfaction in the areas of product quality Customer satisfaction: 82.49%.defects. During process adjustment the glue flow speed was pricing sales service and delivery process and makes improvements

reduced to minimize surface flow marks on the back shell result- based on the survey results.ing in a thin slow-melting glue line near the screw post which

caused cracking. The Company quickly determined a solution.The mold for the screw posts was modified by adding reinforce-

ment ribs around the post to increase its strength. Responsible Marketing

The Company is committed to providing truthful transparent and responsible information through responsible marketing strategies to promote sustain-

able development and enhance consumer trust. The Company regularly provides sales training for sales personnel focusing on the marketing content of

various products to ensure that the sales process with customers is honest transparent and compliant.Investigation of the Cause of Screw Post Cracking

Responsible Marketing Training

49Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Information Security and Privacy Protection

To regulate management activities and ensure information security and Information Security Risk Management

privacy management the Company has formulated the Information Sec-

urity and Privacy Management Manual and the Information Security Man-

a g e m e n t P r o c e d u r e s based on principles regarding information security The Company has formulated the I n f o r m a t i o n A s s e t M a n a g e m e n t R u l e s the Information Resource Management Procedures the Information Security andof“Active prevention total employee involvement ensuring the security P r i v a c y R i s k A s s e s s m e n t P r o c e d u r e s and other systems classifying information and information assets within the Company into five levels based on inform-of company and customer data”and based on national information ation security and managing them accordingly. The Company updates the information assets and risk assessments annually to identify new risks and

security regulations and other relevant requirements as well as the determine whether additional control measures are required. Each department summarizes the risk assessment results to the Information Security

Company's actual situation. During the Reporting Period Solex actively Management Committee. The results of the assessments are used as one of the inputs for management review.pushed forward the application for ISO 27001 Information Security

Management System certification and ISO 27701 Privacy Information

Management System certification to obtain the relevant certificates in Information Security Measures Implemented

2025.

Encrypted communication Secure connections Identity access management Data protection

Specific Implementation Specific Implementation Specific Implementation Specific Implementation

T h e h e a d q u a r t e r s a n d All external systems use SSL Identity access authorization Regularly back up important

branch offices have estab- to establish secure connec- management process business systems and verify

ISO 27001 Information Security ISO 27701 Privacy Information lished IPSEC VPN and SSL tions Regular identity access audit the availability of backups

Management System certification Management System certification VPN process Establish protection mea-

The Company has established a dedicated Information Security Manage- Establish a strict external sures systems and virus

ment Committee to manage and approve the Company's information personnel physical access scanning and cleaning plans

security management system protect internal information security and m a n a g e m e n t s y s t e m t o for malicious software

coordinate information security tasks across departments to support the ensure that access to securi-

Company's operations and business development comprehensively. ty-controlled areas by exter-

nal personnel is strictly con-

Information Security Management Committee trolled

Members

Information Security

Information Security Management Deputy

Management Director Director

Coordinators

50Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Information Security Emergency Management

To respond to potential emergencies implement a scientific procedural and standardized emergency response system for network and information security incidents and build an information and network security guarantee system

the Company has formulated the I n f o r m a t i o n S y s t e m E m e r g e n c y P l a n and established a professional information security team to provide round-the-clock security operations services regularly conduct security assessments vulne-

rability scans and emergency drills and take timely measures during information security emergencies.The Company always considers information security and privacy protection as a top priority. Each year it conducts comprehensive multi-level training on information security and privacy protection for both new and old employees

aiming to strengthen security measures from the ground up thus ensuring the security of the Company's information assets and promoting steady progress in privacy protection efforts.Technical Cooperation

Solex ensures data storage security and efficiency through the construction of data centers and other information Key Performance

security infrastructure and is equipped with firewalls employee internet management systems and other

hardware and software facilities building a physical-logical dual-layer defense system. The Company also actively During the Reporting Period

collaborates with external security technology service providers such as Haichuang Security to conduct security

checks on Solex's information systems perform deep penetration tests and monitor traffic situations. It will

identify potential security risks and system vulnerabilities and promptly fixes vulnerabilities and reduce security

risks. The number of relevant data security training sessions conducted: 7;

The number of participants in training: 56;

Employee coverage rate in training: 100%;

Total investment in data security: RMB 1.04 million;

Number of incidents of information security and privacy protection violations during the

Reporting Period: 0.Traffic Situation Monitoring

51Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Supply Chain Management

Governance 战略

To conduct strict screening and performance management of business Potential

partners to ensure that every product and service provided by the Compa- Risk Type Risk Description Description Probability of Impact Impact Value Chain Priority Financial Response Timeframe Links of Impact Ranking Measures

ny meets quality standards the Company has established systems such Occurrence Size Impact

as the B u s i n e s s P a r t n e r D e v e l o p m e n t a n d M a n a g e m e n t S y s t e m and the

B u s i n e s s P a r t n e r S e c u r i t y and set up a cross-department collaboration

mechanism to carefully plan the supplier screening evaluation and

assessment processes thus establishing a comprehensive supply chain

quality management system. Due to uncertain

geopolitical poli-

Reduce depen-

The Company treats small and medium-sized enterprises equally and cies there may be Backup verification trade route restric- d e n c e o n a Increased for domestic models;

pays them within the contract payment terms. There were no overdue tions or changes in single region Medium Large Short- and Upstream High operating medium-term Operations Small batch intro-payments to small and medium-sized enterprises at the end of the market access and promote costs duction and produc-

Reporting Period. affecting supply

local procure- tion.chain stability and ment.cost-effectiveness.Responsible Departments Responsible Departments

Procurement and

Development Section Quality Department

Responsibilities Responsibilities

Responsible for supplier Responsible for product

development evaluation quality confirmation and

and regular audits and assisting in supplier reviews

maintenance of evaluation a n d p r o m o t i n g s u p p l i e r

records; also responsible for improvements

reviewing anti-terrorism

security evaluation reports C o m p a r i n g Adopt multi-supplier Due to anti-dump- p r i c e s f r o m a n d m u l t i - b r a n d

for suppliers ing investigations multiple sup- Increased material procure-

and other reasons p l i e r s h e l p s Medium Large Short- and Upstream Medium operating ment backup mea-Responsible Departments Responsible Departments raw material prices obtain better medium-term Operations costs sures to reduce risks

R&D Technical Department Sales Department have significantly raw material from market price increased.Responsibilities Responsibilities prices. fluctuations.Responsible for evaluating Responsible for customer

and reviewing the technical development evaluation

performance of products and regular audits

52

Geopolitical risks Market RisksXiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Impact Risk and Opportunity Management

To ensure supply chain stability the Company has established risk management processes created long-term partnerships with key suppliers diversified the supplier base to reduce reliance on a single supplier developed contingency

plans to address potential supply disruptions and regularly evaluates supplier performance to ensure they meet quality delivery and cost requirements.Whole-life-cycle management of suppliers

Procurement personnel collect supplier information from multiple channels based on the company's development

needs deeply understand suppliers' main businesses products quality systems and financial status. On-site assess-

ments are conducted based on the S u p p l i e r C - T P A T Q u e s t i o n n a i r e those who pass the assessments are included in

Supplier Selection the L i s t o f Q u a l i fi e d S u p p l i e r s and the Supplier/Repairer/Transporter Safety Guarantee is signed.The Procurement and Development Section uses supplier performance evaluation auditing procurement contracts

and procurement strategies to identify and manage quality and business risks. The Quality Control Department formu-

lates an annual auditing plan based on supplier performance assessments focusing on core suppliers. The Procure-

ment Department is responsible for the unified evaluation and review of supplier transactions in terms of price service

Supplier Assessment supply capacity etc.Procurement personnel conduct relevant assessments based on the S u p p l i e r C - T P A T Q u e s t i o n n a i r e and

track and manage suppliers' credit and business status in real time.Supplier Evaluation

If the on-site assessment is deemed unsatisfactory such as issues related to trade security the Company may require

the partner to rectify within a specified period. Suppliers who meet the rectification standards may continue the

cooperation while those who fail to meet the standards will have their cooperation eligibility revoked.Supplier Exit

53Xiamen Solex High-tech Industries Co. Ltd. Innovation for Quality Responsibility First

invent

Supplier ESG management Supplier Digital Management

The Company comprehensively examines the overall strength of suppli- The Company regularly conducts ESG training sessions for suppliers to The Company has developed a supplier MES system an efficient material

ers not only considering product quality and supply capability but also enhance their awareness and capabilities in environmental protection receipt call-number system and an intelligent digital procurement

focusing on their performance in environmental protection safety social responsibility and corporate governance. These training sessions platform. With the MES system we have achieved precise scheduling and

production and social responsibility. The Company prepares supplier help promote suppliers' understanding and implementation of ESG detailed management of customer names product names customer

employee rights evaluation reports to examine whether suppliers engage concepts and strengthen the overall sustainable development practices material numbers and delivery dates. The material receipt call-number

in inappropriate practices such as child labor or forced labor and whether of the supply chain. system cleverly controls the timing of suppliers' material delivery

they adequately protect occupational health and employee rights. The effectively avoiding logistics congestion. In addition we have optimized

Company has also developed the Supplier Environmental and Occupatio- the supplier reconciliation and assessment processes through the OA

n a l H e a l t h a n d S a f e t y G u a r a n t e e for suppliers to ensure workplace safety Case Study: ESG Training for Suppliers system enhancing overall operational efficiency.and employee occupational health and safety ensuring that every

employee works in a safe environment and promoting long-term stable

cooperation and common development between the Company and On November 25 2024 the Company held an ESG-related training

suppliers. The Company also adheres to the local procurement principle session for suppliers focusing on enhancing suppliers' awareness

which helps reduce transportation costs and time enhances supply chain and practical capabilities in the ESG field aiming to build a more

response speed and promotes the development of the local economy. sustainable responsible and efficient supply chain system

together.Key Performance Indicators Supplier MES System

Unit 2024 Indicators and Objectives

Number of suppliers certified under The Company has established a comprehensive supply chain manage-

quality management systems Units 484 ment system ensuring that suppliers meet the Company's standards and

requirements through full lifecycle reviews while striving to create an

Number of suppliers certified under

Units 260 open and fair business environment thereby achieving a comprehensive environmental management systems improvement in the Company's supply chain in terms of ESG.Number of suppliers certified under occupational Key Performance

health and safety management systems Units 138

During the Reporting Period

Percentage of suppliers that have signed

the Integrity Agreement % 100 Total number of suppliers: 1147;

Total number of overseas suppliers: 36;

The proportion of spending on purchasing

% 63.87 ESG Training for Suppliers Number of suppliers suspended due to non-compliance: 3.from local suppliers was

54Working Together

for Success

Our Philosophy

Based on a multi-channel talent acquisition strategy Solex has devel-

oped a comprehensive talent development system that provides each

employee with a tailored career development path aiming to create a

dynamic corporate ecosystem that nurtures talent and fosters mutual

growth between employees and the enterprise.Our Actions

Protection of Employees'Rights And Interests

Training and development

Occupational health and safety

SDGsXiamen Solex High-tech Industries Co. Ltd. Working Together for Success

invent

Protection of Employees’ Rights and Interests

Solex adheres to the people-oriented principle respects employees' rights optimizes human resources manage- Employee Distribution in 2024

ment and performance evaluation and enhances human resource efficiency. The Company focuses on employee

health and safety and implements strict measures to ensure a safe working environment. At the same time we

provide growth opportunities for employees facilitate career development through training and promotions and

enhance employee satisfaction and sense of belonging. We firmly believe that the mutual growth of employees and

the enterprise is the foundation of long-term development and are committed to creating a harmonious and

win-win working atmosphere. ?Senior management

5Person

Diversity of employment ?Male ?Mid-level management

2954Person 111Person

In strict compliance with the L a b o r L a w o f t h e P e o p l e ' s R e p u b l i c o f C h i n a and the Labor Contract Law of the Pe- ?Female ?Junior management

o p l e ' s R e p u b l i c o f C h i n a Solex continuously improves its internal H u m a n R e s o u r c e s M a n a g e m e n t M a n u a l and By Gender By Job Level1923Person 641Person

H u m a n R e s o u r c e s M a n a g e m e n t S y s t e m standardizing employee recruitment and onboarding processes. Adhe- ?Individual contributors

ring to the principle of fairness justice openness and competition the Company eradicates all forms of discrimi- 4120Person

nation and bias standardizes employee recruitment and onboarding processes and provides each job applicant

with a fair opportunity to fully demonstrate their talents.Key Performance

?Production

During the Reporting Period 2744Person

?Sales ?Below bachelor’s degree

247Person 3805Person

Percentage of contract workers: 100%; Number of new employees: 1773; ?Technical ?Master’s Degree

818Person 36Person

Total number of employees: 4877; Number of part-time employees: 43; ?By profession Finance By academic ?Bachelor’s degree

64Person qualification 1036Person

Overall employee turnover rate:5.88%. ?Administration

153Person

?Management

851Person

56Xiamen Solex High-tech Industries Co. Ltd. Working Together for Success

invent

Employee Recruitment

The Company attaches great importance to talent recruitment employing both social recruitment and on-campus recruitment to select outstanding talents. During recruitment interviews it is forbidden to ask applicants personal

information detailed family address or other questions that infringe on personal privacy. Applicants have the right to refuse to answer questions unrelated to the job. Through resume submission departmental screening written tests

interviews and recruitment the Company ensures the transparency of the recruitment process.Regarding campus recruitment the Company held a total of 40 campus recruitment presentations and 133 career fairs in collaboration with universities such as Fuzhou University Jimei University Huaqiao University and Fujian University

of Technology recruiting 93 talents. Regarding social recruitment the Company mainly uses various recruitment websites (such as Boss Zhipin Zhaopin etc.) and headhunter channels for external recruitment.Case Study: Campus Recruitment Presentations and Job Fairs

In 2024 the Company visited many local universities including Fuzhou University Fujian Agriculture

Company website and Forestry University and Xiamen University of Technology to host a series of campus recruitment

presentations career fairs and job fairs focusing on attracting local university graduates and contrib-

uting to the development of the local employment market.Recruitment website Recruitment

presentation

Internal recommendation Career fair

Social On-campus

recruitment recruitment

Training institution Job fair

Headhunting firms

Key Performance

During the Reporting Period

On-campus recruitment: 1401;

Social recruitment: 94;

other channels of recruitment:278. Campus Recruitment Presentations and Job Fairs

57Xiamen Solex High-tech Industries Co. Ltd. Working Together for Success

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Diversity Equality and Inclusivity (DE&I)

The Company has developed the D i v e r s i t y E q u a l i t y a n d I n c l u s i v i t y ( D E I ) S y s t e m clearly outlining its commitment to diversity equality and inclusion.The Company regularly organizes diversity and inclusion training sessions and awareness campaigns for employees to enhance their understanding of

multiculturalism equality and inclusion values aiming to foster mutual understanding and respect among employees improve teamwork efficiency and

strengthen the Company’s innovation capacity. In 2024 the Company employed 4 individuals with disabilities and 45 veterans primarily in positions such

as production staff security personnel drivers and warehouse keepers.DE&I Initiatives

Prohibition of Prohibition

discrimination of workplace Prohibition of Prohibit forced Construction of Multilingual Cross-cultural

and bias harassment using child labor labor accessible facilities support conflict

Ensure gender Prohibit coercive Explicitly prohibit Prohibit the use of Provide necessary E n s u r e s m o o t h Report to superiors or

equality and the right abusive or exploit- the employment of threats violence accessible facilities communication for the Human Resourc-

to equal opportunity ative sexual harass- child labor under the deception or any for disabled employ- e m p l o y e e s f r o m es Department and Knowledge Contest for Veterans in 2024

and freedom of choice ment including verbal age of 16. other form of coer- ees to ensure they different language try to resolve through

in matters such as physical or non-ver- cion to force individ- can participate in backgrounds through negotiation compro-

employment com- bal conduct. uals to engage in work on an equal multil ingual sup- mise and win-win Key Performance

pensation benefits work. basis. port. approaches when-

training promotion ever possible. During the Reporting Period

opportunities and

retirement. Number of employees of minority nationalities: 659;

No discrimination on Number of employees with disabilities: 4;

the grounds of race

social class nationali- Percentage of employees of minority nationalities in the manage-

ty religion disability ment: 5.94%.gender or political

affiliation.

58Xiamen Solex High-tech Industries Co. Ltd. Working Together for Success

invent

Compensation and Benefits

The Company has formulated the S a l a r y M a n a g e m e n t S y s t e m and the P e r f o r m a n c e E v a l u a t i o n S y s t e m and othe Performance Evaluation Mechanism

r systems to further regulate the salary management of the Company's business unit leaders ensure fairness and

reasonableness in salary distribution establish effective incentive and restraint mechanisms and inspire employ-

ees' enthusiasm and creativity to drive the successful achievement of the Company's strategic and annual goals. The Company has implemented a "system-based hierarchical" performance evaluation system with assessment

periods spanning monthly quarterly and annually to align with the characteristics and skill levels of different

positions. The performance results are used for performance salary and bonus calculation salary adjustments

promotions position adjustments termination of labor relations training annual awards and special welfare

Compensation Structure applications among other dimensions. The Company promotes a culture of transparency and openness in perfor-

mance management. It has established mechanisms for performance feedback interviews and appeals. Employ-

The Company adopts the 3P salary management model ("Pay for Position Pay for Ability Pay for Performance") ees can raise objections either during the assessment period or within three days of receiving the results and

to define the core components of the salary structure. At the group level the salary control strategy fully takes directly appeal to their department head or the Human Resources Department to ensure clear communication and

into account the management characteristics of each subsidiary allowing them to design and manage their protect the legitimate rights and interests of employees.salary structures independently within the framework of the group's overall compensation system ensuring the

precision and effectiveness of the incentive system. In addition the Company's incentive mechanism integrates Enhancement of Employee Well-being

Maslow's hierarchy of needs theory and the total compensation theory combining both material and spiritual

incentives to effectively balance short-term and long-term employee motivation in line with the corporate Bonuses Performance bonus festival bonus R&D bonus etc.culture. Insurance Social insurance contributions as required by the law

Accommodation Provide housing fund contributions staff dormitories etc.Basic Compensation Structure Public holidays special leave leave in lieu personal leave sick leave marriage leave mater-

Leave nity leave pregnancy check leave breastfeeding leave paternity leave bereavement leave

work-related injury leave parental leave etc.Refers to the base salary determined according to the employee’s position capabilities etc. including basic

salary and comprehensive post wage. Education The Company provides opportunities for further education and training

Health Annual health check-ups gynecologic examinations special post-specific health checks etc.Refers to welfare allowances Annual base Subsidies Birthday allowance compassionate grants marriage allowance maternity allowance and

paid in cash mainly includ- salary high-temperature allowance

ing meal allowances trans- Annual fixed Dining Provide meal allowances or free meals

portation allowances and salaryAnnual welfare Annual total Leisure activities

Festival activities

environment allowances allowance cash income Equity incentives. Currently 116 directors senior management middle management and

Annual total Others key technical (business) personnel of the Company have received equity incentives and hold

6.975 million shares.

Includes performance bonuses compensation Annual variable income

overtime pay special rewards Key Performance

and annual on-the-job incen- During the Reporting Period

tive bonuses etc. Other benefits

Social insurance coverage rate: 100%;

Such as social insurance (pension medical unemployment work-related injury and maternity insurance) Average paid annual leave days per employee: 6;

housing provident fund annual health check-ups holiday gifts mutual aid fund housing assistance programs

and other employee welfare initiatives. 95% of employees underwent regular performance and career development assessments.

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Democratic Management Employee Care

During the Reporting Period the Company held the first session of the Fifth Employee Congress and Labor Union The Company is committed to helping employees with difficulties protecting women's rights and interests paying

Member Congress. During the meeting a new election of the committee was held and the Solex Integrity and Self- attention to employees' mental health and actively carrying out cultural and sports activities to create a caring

D i s c i p l i n e M a n a g e m e n t S y s t e m and the revised H u m a n R e s o u r c e s M a n a g e m e n t S y s t e m were approved. The Con- equal and healthy working environment and enhance team cohesion and employees' sense of belonging.gress collected proposals on key areas such as employee welfare labor relations occupational health and safety

and production operations totaling 73. Each proposal was thoroughly discussed and carefully answered to ensure

its rationality and effectiveness. Additionally a dedicated Q&A session for employee representatives was estab- Supporting Employees with Difficulty

lished where management sincerely listened to their opinions and feedback. This initiative aims to boost employ-

ee satisfaction and strengthen the enterprise’s cohesion.The Company has formulated the S o l e x E m p l o y e e M u t u a l A i d F u n d M a n a g e m e n t M e a s u r e s and established the So-

To improve the suggestion management system and foster an open and inclusive management atmosphere the lex Employee Mutual Aid Fund aiming to provide additional financial support to employees facing temporary

Company has placed suggestion boxes in prominent locations to collect employee opinions suggestions financial difficulties due to illness accidents and other unexpected events. The fund is raised through a combina-

complaints and feedback. In handling this information the Company adheres to the principles of hierarchical tion of voluntary employee contributions and company subsidies ensuring stable and sustainable funding. The

responsibility and centralized handling ensuring that each piece of information is kept confidential and respond- Fund Management Committee is responsible for the daily administration of the fund ensuring that all fund expen-

ed to promptly thereby effectively addressing employee concerns and improving internal communication efficien- ditures are transparent reasonable and in compliance with regulations. Employees facing personal or family

cy. Additionally the Company has established a Labor Dispute Mediation Committee aimed at regulating the financial crises may apply for assistance according to the procedures outlined in the management measures to

negotiation and mediation processes of labor disputes promoting harmonious and stable labor relations. alleviate their financial burden.Key Performance Key Performance

During the Reporting Period During the Reporting Period

Number of proposals deliberated by the Labor Union: 46; The Company's Mutual Aid Fund assisted a total of 30

Proportion of Labor Union members to in-service employees: 91.27%; employees and allocated RMB 118400 for medical

Employees participating in the satisfaction survey: 3290; subsidies;

Employee Suggestion Box Employee participation rate in the satisfaction survey: 88.27%; the Settlement Plan assisted 3 employees with RMB

Employee satisfaction: 98.69%. 300000 .

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Protecting the Rights and Interests of Female Employees Employee Mental Health

Solex attaches great importance to the special needs of female employees and the challenges they face in balanc- The Company deeply recognizes the importance of employee mental health and through establishing a psycho-

ing work and family. Therefore the Company strictly complies with national and Fujian provincial regulations on logical support system encourages employees to cope with stress positively advocates for open communication

special protections for female employees ensuring that female employees are entitled to special leave such as and fosters a supportive and understanding work environment.prenatal check-up leave maternity leave and breastfeeding leave. Regarding the maternity leave policy the

Company offers up to 158 days of leave to ensure that female employees can have sufficient rest and physical

recovery. We are committed to creating a supportive and life-respecting working environment for women and have

specifically set up a comfortable and cozy mother-baby room to provide convenience for female employees after

childbirth. Additionally on International Women's Day (March 8) the Company organizes a variety of activities Case Study: Employee Emotional Support

such as floral arrangement to further foster a corporate culture that respects and cares for women.The Company has set up an Employee Emotional Support Corner in the office building's lounge area which

Key Performance features a suggestion box for employees to anonymously submit postcards to express their concerns or

During the Reporting Period confusion. These are then addressed by emotional counselors and psychological consultants who offer

professional psychological support. Additionally a "Happy Sharing" board is set up each month to

showcase employees' joyful moments encouraging positive interactions. The Company also provides a

Proportion of female managers: 23.81%; mobile poster basket containing candies small gifts and psychology books available for employees to use.Employees are encouraged to leave sticky notes with comments on the displayed photos and events to

promote virtual interactions among colleagues and spread positive energy within the team.Number of employees who took maternity leave: 17;

Return rate from maternity leave: 100%;

Number of employees who took parental leave: 166;

Return rate from parental leave: 100%.Women's Day Flower

Arrangement Activity Emotional Support Corner Interactive Candy Pickup Area

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Organizing Employee Cultural and Sports Activities

Solex firmly believes that employee happiness and team

cohesion are the cornerstone of business development.We are dedicated to creating a human-centered working

environment by regularly organizing activities such as

basketball tournaments parent-child movie outings

Mid-Autumn Festival DIY events and other cultural

sports and holiday activities to enrich employees' spare

time enhance mutual understanding and friendship

and increase the sense of belonging among employees.Parent-Child Visit to Aquarium

Organizing Parent-Child Movie Outing

Basketball Tournament Mid-Autumn Festival Parent-Child DIY Mooncake Activity

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Training and Development Building of Trainer Team

Solex adheres to the philosophy that talent is the primary productive force effectively transforms business The Company has established an internal trainer team to effectively pass on the Company’s corporate culture

development strategies into talent development strategies and ensures the smooth realization of its strategic professional expertise and management experience thereby fostering talent cultivation and organizational

goals through the establishment of a comprehensive talent training system. learning and development. To support this we have developed the I n t e r n a l T r a i n e r M a n a g e m e n t S y s t e m which

covers the assessment selection certification teaching process responsibilities and incentive standards for

internal trainers. Currently internal trainers have delivered 156 courses this year with a total teaching time of 310

Employee Training hours.Training Platform Construction

The Company has developed a series of standardized management systems for employee training including the

R u l e s o f T r a i n i n g M a n a g e m e n t the T r a i n i n g M a n a g e m e n t S y s t e m the Internal Trainer Management System the The Cloud Learning Platform of Solex efficiently integrates and consolidates abundant internal and external course

E x t e r n a l T r a i n i n g M a n a g e m e n t S y s t e m and the Teaching Management Plan for Solex Middle and Senior Mana- resources not only realizing detailed management and supervision of employee training courses ensuring

g e m e n t and has set training plans and evaluation procedures. Training evaluations are based on the Kirkpatrick training quality and effectiveness but also providing employees the opportunity to engage in self-learning.Four-Level Evaluation which consists of four levels of evaluation: Reaction Learning Behavior and Results. It aims Employees can freely select courses on the platform according to their work needs and personal interests enabling

to provide a solid institutional guarantee for the growth of talents and ensure the smooth implementation of self-improvement and development and contributing to the enterprise's continuous growth and the personal

training activities. progress of employees.Training System Development

Operational Level

Trainer System Resource Level Course System

Institutional Level

Overall Approach to Training System Development

At the institutional Level ensuring strong support for training efforts;

At the resource Level providing quality input for training efforts;

At the operational Level ensuring smooth output of training efforts;

From the bottom up establishing the framework

Filling in the modules and operating efficiently.Cloud Learning Platform

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Tiered Training Case Study: "Xiaosong Camp" TrainingThe Company has developed a tiered talent development program which includes Xiaosong Camp High-Potential In July 2024 new graduates from universities participated in the "Xiaosong Camp” training organized by

Talent Training Camp Grassroots Team Leader Training Camp Qingsong Camp and Jinsong Camp extending all the Human Resources Department. The purpose is to help them transition from students to professionals

the way to the senior management. By analyzing the current capabilities of employees at each level the Company cultivate a proactive learning attitude and communication skills deepen their understanding and recogni-

implements targeted training measures for employees at different levels to bridge the gap between current skills tion of the Company culture and enhance their ability to adapt to the job. The training methods include

and future competency requirements. in-person lectures class discussions and online public courses. The training content is divided into four

stages: skill development public courses production internships and job trials. Additionally department

mentors provide one-on-one guidance to help fresh graduates quickly adjust to their roles.Tiered Training

Recipients Training Programs

Senior Management Strategy decoding and strategy implementation Business management Change leadership

Jinsong Camp Non-financial managers' financial management Human resources management for non-HR managers Efficient team building Leadership

Qingsong Camp Basic management communication and collaboration Subordinate cultivation and coaching Planning management Review and growth

Grassroots Camp Team leader role awareness Work skills TWI site management Quality management Office software application

High-Potential Camp Execution Communication and collaboration Project management Problem analysis and solution

Xiaosong Camp Corporate culture Enterprise systems Role transformation Career planning Time management Goal management Mentor-mentee pairing

Training Site

Key Performance

During the Reporting Period

Investment in employee training: RMB 543800; Number of training sessions: 499; Total training hours: 22443; Total number of employees trained: 4016;

Total attendance (person-time): 8654; Average training hours per employee per year: 4.60; Employee training coverage: 82.31%.

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Promotion and Development Occupational Health and Safety

Solex is dedicated to building diverse and seamless career development

channels along with a fair and impartial assessment mechanism. By Safety Production

creating a dual-career development system the Company tailors

development paths for both management and non-management roles. In strict accordance with the Law of the People's Republic of China on Work Safety

The Company also thoughtfully provides employees with personal the Law of the People's Republic of China on Prevention and Control of Occupatio-

development plans to ensure that each employee has the opportunity to n a l D i s e a s e s and other relevant laws and regulations and upholding the principle

grow and improve in roles and fields that suit their strengths. of "safety first prevention-oriented and comprehensive management" Solex has

formulated the Safety Production and Occupational Health Target Management

S y s t e m and established a dual prevention mechanism including a safety risk grading

Dual-Career Development Paths and control system as well as hazard identification and remediation measures

effectively preventing major safety accidents. The Company has built a sound "OneJob Two Responsibilities” safety responsibility system ensuring that each depart- Solex's Level-Three Work Zhangzhou Solex's Level-

Senior Management Chief Engineer ment and position has clear safety production responsibilities and has successfully Safety Standardization Three Work Safety

passed the enterprise safety production standardization evaluation. Certificate Standardization Certificate

Manager Principal Engineer

Senior Engineer Safety CommitteeSection Chief

Head Intermediate Engineer The Company has established a Safety Production Committee which is responsible for the overall planning and supervision of the implementation of the

Company's safety production tasks. Furthermore the Company has established an evaluation mechanism set safety evaluation standards and developed

Shift Leader Junior Engineer practical evaluation indicators grading and standards.Organizational Structure of the Safety Production Committee

Key Performance President's Office Technology Park

Safety Engineer

During the Reporting Period Chief Technical

Engineer

Safety Resources Health/Human-Water

Department Park Safety Engineer

Safety Standard

Number of employees having successfully transitioned Engineer

or applied internally: 390.Shower Beauty and Intelligent Electr- Kitchen and Basin New Category PME Division Division Health Division onics Division Beauty Space Incubation

Innovation Group Center

Division - R&D Division Design Center

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Safety Production Targets Key Performance Safety Risk Classification and Assessment Procedures

During the Reporting Period

Solex's Goals and Planning Determine the assessment scope

Investment in safety production: RMB 6873500;

Form an assessment

Achievements in 2024 Number of work-related deaths：0 person; teamLaws and regula-

tions standards

Continuous improvement of safety production management system Number of working days lost due to work-related injuries: and norms corpo- Collect information

Enhancement of employee safety awareness and skills 747 working days; rate technical data conduct on-site surveys

Optimization of occupational disease prevention facilities Lost Time Injury Ratio LTIR: 2.05. management files

Reduction of occupational disease incidence Determine the Qualitative analysis

assessment method Quantitative analysis

Risk identification

Goals for 2025 Risk assessment Analyze the

Risk management

Achieve zero accidents for the year assessment contentand control

Enhance safety management Safety Production Risk Management

Strengthen safety training Propose safety countermeasures

Improve emergency rescue system The Company has established a dual prevention mechanism including a

safety risk grading and control system as well as hazard identification and Summarize and conclude

Long-term Plan remediation measures identifies and controls safety production risks and

the assessment results

compiles a list of hidden dangers related to safety accidents fundamentally

Build a long-term safety production mechanisms preventing safety accidents and establishing a long-term safety production Prepare assessment

Promote intelligent safety management reportsmechanism.Strengthen international cooperation and communication

Foster a safety culture environment Meanwhile the Company uses the LEC method to conduct risk assessments

of potential safety hazards systematically prepares a risk list and then

develops corresponding risk prevention and control measures according to

Implementing Safety Accountability the operation content outlined in the list. These measures aim to minimize

safety risks and effectively protect employees' lives.Adhering to the principles that principles that "safety must be managed During the Reporting Period the Company conducted multiple comprehen-

alongside production" and "whoever is in charge is responsible" the sive safety checks on production sites according to the established safety

Company has created a safety production responsibility list and inspection plan. In 2024 the Safety Department on-site departments and

developed an annual safety production responsibility letter and set safety security personnel conducted a total of 287 inspections including daily

production goals. During the Reporting Period the total number of safety monthly special and irregular inspections. A total of 4143 safety hazards

responsibility letters signed by employees at all levels was 6991. were identified and all 4143 were rectified with a 100% completion rate. Zhangzhou Solex Safety Hazard Inspection Site

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Management of Hazardous Chemicals Emergency Response Plans and Training Drills

To further strengthen employee safety management the Company has formulated the Chemical Management M- To prevent and control potential accidents or emergencies the Company has developed the First Aid Plans for V-

e t h o d s which regulates the management process of statistics procurement acceptance storage and protection of a r i o u s I n j u r i e s specifying organizational structure division of responsibilities emergency facilities and response

chemicals and also specifies emergency response measures for chemical fire leakage burning and corrosion. The measures. The plan is designed to effectively prevent and manage safety production accidents minimizing casual-

Company regularly conducts special inspections on hazardous chemicals and promptly rectifies identified safety ties and property damage. The plan also includes detailed process supervision measures for daily supervision

hazards. Additionally the Company attaches great importance to employee education and training regarding dangerous operations and safety management of related parties to ensure comprehensive safety management

hazardous chemicals and regularly organizes specialized training sessions to improve employees’ emergency implementation.response skills.The Company regularly conducts various forms of safety education and training activities and fire drills to contin-

Digital Management of Safety Production ually enhance employees’ safety awareness and improve their self-protection and emergency response abilities

in the face of emergency situations effectively reducing the likelihood of accidents and ensuring a safe and stable

production environment.The Company follows a dual prevention mechanism and fully integrates safety management with information

technology. By establishing a safety document system a safety information platform conducting safety culture

management activities and training and setting up an emergency materials management ledger the Company Case Study: Special Emergency Drills

has upgraded safety production standards and enabled real-time monitoring of potential safety hazards.From January to December 2024 in order to strengthen

employees’ fire safety awareness and improve their

evacuation escape and emergency response capabili-

ties for various sudden incidents the Company

organized 28 fire and specialized emergency drills across

various departments involving approximately 6931

participants effectively enhancing their safety aware-

ness and emergency response capabilities.Health Park Fire Emergency Drill

Safety Information Platform - Hazard Identification Diagram

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Key Performance Occupational Health

During the Reporting Period The Company adheres to the occupational health

56400 and safety policy of "Workplace Safety Preven-Total Investment in Safety Training: RMB ; tion-Centric; Employee Well-being Sustainable

Total Hours of Safety Training: 8263 hours; Development" and has established the Occupational

Safety Training Sessions: 1371 sessions; Disease Protective Equipment Management System

Number of participants in safety education and training sessions: 22049 and the Through rigorous and comprehensive sy- person-times; stem development and practical implementation

Coverage rate for safety education and training: 100%; the Company ensures that its occupational health

Coverage rate for safety risk protection training: 100%; and safety management system meets the require-

53 ments of industry standards. During the Reporting Solex's ISO 45001 Zhangzhou Solex's The number of security emergency drills: . Period the Company obtained the Occupational Occupational ISO 45001 Occupational

Health and Safety Management System Certificate. Health Management Health Management

System Certificate System Certificate

Case Study: Safety Month Outdoor Activities

Occupational Disease Hazard Identification

To further strengthen safety awareness and ignite employees’ enthusiasm for safety management the

Company carefully planned and hosted a series of outdoor activities during the Work Safety Month. During The Company complies with laws and regulations such as the Law of the People's Republic of China on Prevention

the activities employees participated in a series of creative activities including energy-saving science and Control of Occupational Diseases the Workplace Occupational Health Management Rules and the Occupati-

popularization video challenges smooth green safety channels and safety knowledge skill challenges o n a l H e a l t h T e c h n i c a l S e r v i c e O r g a n i z a t i o n T e s t i n g S t a n d a r d s . It always prioritizes employee health and regularly

which subtly embedded safety concepts in their minds. These creative activities not only enhanced employ- cond-ucts detailed inspections of occupational disease hazards and sources across its parks based on employees'

ees' safety awareness but also fostered the dissemination and learning of safety knowledge. needs to identify occupational disease hazards such as noise laser radiation formaldehyde tin dioxide grinding

dust isopropyl alcohol alumina dust and high temperatures have been identified as . Testing reports and

analyses have been provided for each risk.Some Hazard Factors and Their Sources:

Occupational Disease Hazard Factors Hazard Factor Sources

Noise tin dioxide isopropyl alcohol Reflow soldering wave soldering

Noise alumina dust Milling machines mold polishing

Noise grinding dust Grinding machines

Noise high temperatures Injection molding

formaldehyde

Safety Month Outdoor Activities

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Occupational Disease Prevention Measures Key Performance

During the Reporting Period

Based on testing results the Company selects and equips employees with protective equipment that meets

national or industry standards chooses occupational disease protective facilities and conducts regular mainte-

nance and strictly implements occupational health management measures. During the Reporting Period the Percentage of special operators licensed: 100%;

Company arranged occupational health check-ups for its employees. The medical reports showed no signs of

occupational diseases. In accordance with regulations such as the Occupational Disease Hazard Warning Signs in Investment of work-related injury insurance for employees:RMB 2229700;

t h e W o r k p l a c e the Company has posted hazard notification cards in various departments and workshops of the

Xiamen park to inform on-site personnel of potential hazards ensuring that every employee works in a safe and Coverage rate of work-related injury insurance for employees: 100%;

healthy environment and strengthening the protection of employees' health.The detection rate of occupational disease hazards: 100%;

Number of new cases of new occupational diseases: 0.Noise Dust grinding dust

Select low-noise equip- Regularly maintain dust

ment removal systems

Provide suitable earplugs Provide suitable dust

for employees working in Protective Protective masks for employees and

noisy positions Measures Measures replace them regularly

Shorten the exposure

time for employees work-

ing in noise-exceeding

positions

Category of occupational

Disease Hazards

Hazardous organic chemicals High temperatures

Improve workplace venti- Install cold air pipes or air

lation conditioning in high-tem-

Provide employees exposed Protective Protective perature areas and pro-

to hazardous organic chemi- Measures Measures vide fans

cals with protective masks Provide adequate heat-

and replace them regularly stroke prevention medica-

tion that meets hygiene

standards

Notification Card of Occupational Disease Employees Wearing Masks

Hazards in the Workshop and Gloves at The Workplace

69Giving Back to Society

Advancing Public

Welfare Together

Our Philosophy

Solex while pursuing excellence in business achievements remains

committed to its social responsibilities and actively fulfills its role as a

responsible corporate citizen. The Company firmly believes that the

growth of a business should go hand in hand with the progress of society

and therefore it has always adhered to the commitment of giving back to

society and participates in various aspects of social welfare through

concrete actions.Our Actions

Social Welfare

Rural Revitalization

SDGsXiamen Solex High-tech Industries Co. Ltd. Giving Back to Society Advancing Public Welfare Together

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Social Welfare Case Study: Donation of Sports Equipment and Teaching Aids for the Disabled

Solex with a strong commitment to social responsibility proactively

takes on its corporate duties. The Company is not only dedicated to On December 5 2024 Solex donated sports and recreational equipment along with daily educational toys valued at RMB 15000 to Haicang Fule

excellence in the economic sector but also actively participates in public Home a facility under the China Disabled Persons’ Federation. This batch of materials includes table tennis tables exercise bikes speakers and

welfare including education and support for the disabled demonstrating microphones projectors and screens as well as a variety of educational toys such as clay DIY materials magnetic educational toys etc. This

its social responsibility through concrete actions. donation is not only a heartfelt expression of care for the disabled residents at Haicang Fule Home but also a tangible demonstration of Solex’s

commitment to social responsibility.Key Performance

During the Reporting Period

Total public welfare input: RMB 109400.Donation of Sports Equipment and Teaching Tools for the Disabled

71Xiamen Solex High-tech Industries Co. Ltd. Giving Back to Society Advancing Public Welfare Together

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Case Study: Zhangzhou Solex 298 Youth Talent Apartment launched a book sharing and donation event Rural Revitalization

During the Reporting Period Zhangzhou Solex 298 The Company actively responds to the national employment poverty

Youth City Talent Apartment meticulously planned and alleviation policy and strictly follow the policies outlined in the N o t i c e b y

launched a unique book sharing event. This event aims the Ministry of Human Resources and Social Security Ministry of Finance

to foster literary vibrancy facilitate knowledge sharing and the State Council Leading Group Office of Poverty Alleviation and

and ignite intellectual curiosity among young talents. It Development of Further Improving Employment Poverty Alleviation Work.encourages young residents in the apartment to The Company provides abundant employment opportunities to impover-

contribute pre-loved quality books within the communi- ished laborers and offers continuous career development support

ty. By doing so dormant books can be put to greater helping many impoverished laborers achieve stable employment. The

use providing more people with access to valuable Company practices social responsibility with concrete actions and

knowledge and the enjoyment of reading. contributes to poverty alleviation and rural revitalization demonstrating

the Company's proactive role in promoting sustainable social develop-

ment.Key Performance

Zhangzhou Solex 298 Youth City Talent Apartment Book Donation Event

During the Reporting Period

Case Study: Funding for the Gunong Farm Central Primary School Sports Meeting Number of poverty-alleviation employment beneficiaries: 336.On May 17 2024 Zhangzhou Solex

provided necessary financial sup-

port for the successful organiza-

tion of the Gunong Farm Central

Primary School Sports Meeting.The smooth progress of the sports

meeting ignited students' enthusi-

asm for sports and strengthened

their team spirit. This initiative by

Zhangzhou Solex demonstrates

the enterprise's attention and sup-

port for youth sports education

and contributes to the healthy

growth of children.Gunong Farm Central Primary School Sports Meeting

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Annex Social Performance

Performance Indicator Unit 2023 2024

Key Performance Percentage of contract workers % 100 100

Employee Performance

Total number of employees person 4688 4877

Environmental Performance Number of part-time employees person 64 43

Number of new employees person 1143 1773

Performance Indicator Unit 2023 2024

Number of employees with disabilities person 5 4

Total environmental investment RMB 10000 1448.81 1094.50

Number of employees of minority nationalities person% 591 659

Number of environmental incidents case 0 0

Employee turnover rate % 4.56 5.88

Number of violations of laws and regulations

concerning environmental protection case 0 0 Employee satisfaction % 97.05 98.69

Energy Consumption Protection of Women's Rights and Interests

Photovoltaic energy yield kWh 5000000 5044965 Proportion of female managers % 24.17 23.81

Gasoline liters 44920.68 96997.36 Number of employees who took maternity leave person 31 17

Diesel liters 62110.68 71822.31 Return rate from maternity leave % 90.32 100

Natural gas 10000 m3 12.09 24.56 Number of employees who took parental leave person 115 166

Return rate from parental leave % 100 100

Total purchased electricity MWh 60054.01 63827.86

Compensation and Benefits

Water Resource Consumption

Social insurance coverage rate % 100 100

Total water consumption m3 463751 573813 Percentage of employees underwent regular % 95 95

Recycled water consumption m3 47330 59820 performance and career development assessments

Training and Development

Pollutant Emission

Investment in employee training RMB 10000 48.85 54.38

Waste gas emissions 10000 m3 373907.82 513305.88

Number of training sessions session 452 499

Wastewater discharges 10000 m3 24.2750 28.9458 Total number of employees trained person 3742 4016

Quantity of general waste generated ton 1947.54 1914.29 Total attendance Person-time 8005 8654

Quantity of hazardous waste generated ton 1100.17 1287.94 Total training hours hour 21096 22443

Waste recovery rate % 100 100 Average training hours per employee per year hour/person 4.50 4.60

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Governance Performance

Performance Indicator Unit 2023 2024 Performance Indicator Unit 2023 2024

Occupational Health and Safety General Meeting of Stockholders

Number of work-related deaths person 0 0 Total number of General Meeting of Stockholders convened meeting 5 2

Number of safety emergency drills session 35 53 Number of proposals deliberated proposal 28 17

Total hours of safety training hour 1802 8263 Board of Directors

Number of new cases of new occupational diseases case 0 0 Number of members of the Board of Directors person 9 9

Research and Innovation Number of meetings of the Board of Directors convened meeting 9 8

R&D investment amount RMB 10000 20353.17 20511.37 Number of proposals deliberated proposal 62 52

Proportion of R&D investment to operating income % 6.82 7.47 Board of Supervisors

Number of R&D personnel person 664 818 Number of meetings of the Board of Supervisors convened meeting 9 7

Customer Service Number of proposals deliberated proposal 40 36

Customer satisfaction % 83.40 82.49 Remuneration Policy

Information Security Remuneration of directors supervisors

RMB 10000 1128.62 1199.50

Number of relevant training sessions conducted session 5 7 and officers (including both current and departing)

Number of incidents of information security and

privacy protection violations during the Reporting Period session 0 0 开展法律培训次数 Compliance and Business Ethics

Supply Chain Management Number of legal training sessions conducted meeting 5 5

Total number of suppliers entity 1338 1147 Total hours of legal training conducted hour 7.50 9.50

Number of incidents with significant risk and Number of participants in legal training person 123 54

impact in the supply chain case 0 0

Number of individuals who signed the integrity commitment letter person 451 3646

Public Welfare

Signing rate of integrity commitment letter % 10 40.50

Total public welfare input RMB 10000 38.88 10.94

Number of corruption lawsuits filed and concluded case 0 0

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Indexes

Shanghai Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 14 - Sustainability Report (for Trial Implementation) Topic Index Table

Dimension S/N Issues Corresponding Section

1 Response to Climate Change Energy Saving and Carbon Reduction for Green Development

2 Pollutant Emissions Energy Saving and Carbon Reduction for Green Development

3 Waste Disposal Energy Saving and Carbon Reduction for Green Development

Ecosystem and Biodiversity Protection / (The Company's production and operation activities 4

Environmental have minimal impact on the ecosystem and biodiversity.)

5 Environmental Compliance Management Energy Saving and Carbon Reduction for Green Development

6 Energy Utilization Energy Saving and Carbon Reduction for Green Development

7 Water resource utilization Energy Saving and Carbon Reduction for Green Development

8 Circular Economy Energy Saving and Carbon Reduction for Green Development

9 Rural Revitalization Giving Back to Society Advancing Public Welfare Together

10 Contribution to Society Giving Back to Society Advancing Public Welfare Together

11 Innovation-driven Innovation for Quality Responsibility First

/ (the Company’s business scope does not involve scientific research technology development

12 Technology Ethics or other activities sensitive to technology ethics such as life sciences and artificial intelligence.)

13 Supply Chain Security Innovation for Quality Responsibility First

14 Equal Treatment of Small and Medium-Sized Enterprises Innovation for Quality Responsibility First

Social Product and Service Safety and Quality

15 Note: It includes two topics: product safety Innovation for Quality Responsibility First

and quality and customer rights protection.

16 Data Security and Customer Privacy Protection Innovation for Quality Responsibility First

Employees

17 Note: It includes three topics: employee rights protection Working Together for Success

employee training and development and occupational health and safety

18 Due Diligence ESG Management

19 Communications with Stakeholders ESG Management

Sustainable Development Related Governance 20 Anti-commercial Bribery and Anti-corruption Standardized Governance Bolstering Steady Development

21 Anti-unfair Competition Standardized Governance Bolstering Steady Development

22 Low-carbon Products Special Topic-Advancing Green and Intelligent Upgrades Leading Development

23 Protection of Shareholders' Rights and Interests Standardized Governance Bolstering Steady Development

24 Standardized corporate governance Standardized Governance Bolstering Steady Development

Self-Determined Disclosure Topics 25 Tax Compliance Standardized Governance Bolstering Steady Development

26 Risk Management Standardized Governance Bolstering Steady Development

27 ESG Governance ESG Management

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2021 GRI Sustainability Reporting Standards ("GRI Standards") Topic Index Table

Chapters and Sections GRI Sustainability Reporting Standards ("GRI Standards")

About This Report 2-2/2-3/2-4

Message from the Chairman 2-22

Sustainable Development Highlights in 2024 201-1/302-1/302-3/303-5/305-4/305-5

Company Profile 2-1

Corporate Culture 2-1

About Solex Business Layout 2-1

Milestones in 2024 2-1

Major Honors 2-1

Membership in Industry Associations 2-1

Responsibility Focus - Special Topics Advancing Green and Intelligent Upgrades Leading Development 2-6/301-3

ESG Governance System 2-12/2-13/2-14/2-17/2-22

Response to Sustainable Development Goals 2-22

ESG Management Materiality Assessment 3-1/3-2/3-3

Analysis of Stakeholders 2-29

Governance through the General Meeting of Shareholders Board of Directors and Board of Supervisors 2-9/2-10/2-11/2-12/2-13/2-17

Standardized Governance Risk Control and Internal Control 207-1

Bolstering Steady Development Information Disclosure and Investor Relations Management 2-27/2-29/201-1

Business Ethics 2-16/2-26/205-2

Response to Climate Change 201-2/305-1/305-2/305-3/305-4/305-5

Energy Saving and Carbon Reduction Environmental Compliance 2-27/303-2/303-4/306-1/306-2/306-3

for Green Development Resource Utilization 301-1/301-2/302-1/302-3/302-4/303-4/303-5

Innovation-driven /

Product quality 416-1/416-2

Innovation for Quality Responsibility First Protection of Customers' Rights And Interests 417-1

Information Security and Privacy Protection 418-1

Supply Chain Management 2-6/308-1/308-2/414-1/414-2

Protection of Employees’ Rights And Interests 2-7/401-1/401-2/401-3/405-1/406-1/408-1/409-1

Working Together or Success Training and Development 404-1/404-2

Occupational Health and Safety 403-1/403-2/403-3/403-4/403-5/403-6/403-7/403-8/403-9/403-10

Giving Back to Society Social Welfare 415-1/413-1

Advancing Public Welfare Together Rural Revitalization 413-1

ESG Performance Chart 201-1/302-1/302-3/303-5/404-1

Annex Indexes /

Feedback Form /

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Feedback

Dear reader

Thank you for reading this report! This is the 2024 Environmental Social and Governance (ESG) Report published by Solex. In order to continuously

improve our ESG management work and enhance our ability to fulfill social responsibilities we sincerely hope that you will evaluate this report and provide

your valuable opinions.

1.Which of the following stakeholders is most relevant to you in relation to Solex

□Shareholder & Investor □Customer □Supplier □Employee □Social Organization □Industry Partner □Government □Media

2.Your overall assessment of the report:

□Excellent □Good □Average □Below Average □Poor

3.Your comments on the layout of this report:

□Excellent □Good □Average □Below Average □Poor

4.How do you rate the information data and completeness disclosed in this report

□Very High □High □Average □Low □Very Low

5.What aspects of the report do you think need improvement

□Layout □Length of Report □Topic Coverage □Publication Format/Media Contact information

6.What topics in the report are of most interest to you (Multiple choices) Tel.: 0592-6192666

□Corporate Governance □Supply Chain Management □Protection of Customers’ Rights and Interests

□Safety Production □Environmental Protection □Employee Care □Social Welfare Email: IRM@solex.cn

□Others

7.What other suggestions do you have for this report

Thank you again for your

understanding and support of our work!

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