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松霖科技:2023年环境、社会及公司治理(ESG)报告(英文)

公告原文类别 2024-04-30 查看全文

Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

About this Report

Overview Basis for Preparation Abbreviations

This is the 4th environmental social and governance (ESG) report * Sustainable Development Goals (SDGs) Corporate Action Guidelines * Xiamen Solex High-tech Industries Co. Ltd. (“Solex” or the

publicly released by Xiamen Solex High-tech Industries Co. Ltd. This * Sustainability Reporting Standards (GRI Standards) from Global “Company”);

Report discloses the practices and performance of Xiamen Solex High- Reporting Initiative

tech Industries Co. Ltd. in economy environment society corporate * Zhangzhou Solex Smart Home Co. Ltd. (“Zhangzhou Solex”);

* Guidelines for Compiling Corporate Social Responsibility Reports in

governance and other responsibility fields in 2023. With this Report from Chinese Academy of Social Sciences (CASS-CSR5.0) * Bestter (Xiamen) Technology Inc. (“Bestter”).China

we want to communicate with stakeholders and to respond to their

expectations and demands in a systematic manner. * Guidelines for Compilation of Social Responsibility Reports from

China’s National Standards (GB/T36001-2015)

* ISO 26000: Guidance on Social Responsibility (2010) from International

Organization for Standardization

* Guidelines on the Self-Regulation Rules for Companies Listed on

Shanghai Stock Exchange No. 1 - Compliant Operation from Shanghai

Stock Exchange

Reporting Period Source of Data Report Access

The reporting period is from January 1 2023 to December 31 2023 The data used in this Report includes the original data on actual You can download the electronic version of this Report on the official

and extends beyond the foregoing scope for some content to enhance operations of the Company pubic data published by government website of Shanghai Stock Exchange (http://www.sse.com.cn) or

the comparability and forward-looking of this Report. authorities annual financial data relevant internal statistics reports Xiamen Solex High-tech Industries Co. Ltd. (http://www.solex.cn/

third-party questionnaires and third-party evaluation interviews notice.html) for more information about the Company.etc. The financial data in this Report are in RMB. In case of any

inconsistency with the financial report the financial report shall prevail.

3Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Message from the Chairman“In 2023 the recovery trend was seen in global economy governance and operational level; emphasizing participates in various social welfare activities and gives

but the growth momentum was waning. Overall demand innovation and creativity increasing R&D investment back to the society and benefits the people with practical

in export markets declined and recovery was at a slow promoting the transformation of scientif ic and actions contributing to a harmonious society.pace. However the China’s economy is staging a steady technological achievements driving technological

recovery. Against the backdrop of complex and severe innovation enhancing market recognition reducing Solex always pays attention to the impact of environmental

macroeconomic environments and unexpected factors market and operational risks in the new development protection social responsibility corporate governance

both at home and abroad the Company made concerted pattern; implementing responsible procurement etc. and devotes itself to achieving its own long-term and

effort to actively respond to the uncertainties and strengthening customer relationship management; stable growth. Practicing ESG is an important measure

challenges in the economic environments and markets safeguarding employee rights valuing employee growth for the Company to pursue the concept of sustainableand deepen the strategy of the “IDM Hardware Invisible paying attention to green environmental protection development. This effort is not only necessary forChampion Incubation Platform”. By empowering product deploying green development models based on its own “going out” but also promotes the implementation of the

values with intelligence health and green the Company characteristics integrating the concept of green low- localization strategies and gains competitive advantages

focuses on the R&D design and intelligent manufacturing carbon into the entire production management process of long-term development in this process. Further the

of IDM hardware products in such categories as kitchen from green supply gain management to green factory Company strongly believes in the power of technological

& bathroom and health beauty and health and emerging and enhancing employees’ awareness of environmental innovation maintains the entrepreneurial spirit and

smart health hardware with a view to building a platform- protection by promoting green packaging and green increases the pace of becoming stronger contributing

based company. office. to the improvement of human life quality sustainable

economic and social development.Solex is committed to integrating the concept of The Company fully implements the national strategy of

environmental protection social responsibility and strengthening the country through quality improvement

corporate governance (ESG) into its production and and spares no effort to promote its high-quality

operation management optimizing its own business development. Also it fulfills corporate social responsibility

and development strategies improving its corporate with a high sense of responsibility and mission actively

4“Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities forand Stable Development Society the Green Earth Postscription

About Solex

Founded in 2004 Xiamen Solex High-tech Industries Co. Ltd. insists on

integrating R&D innovation and industrial design into products with the Solex Technology Co. Ltd.“IDM Hardware Invisible Champion Incubation Platform” as its compass

and capitalizing on its excellent technological innovation product Subsidiaries

development and user demand mastery capabilities. With the concept

of model manufacturing and technology sharing and by empowering

product values with intelligence health and green attributes it focuses on

the R&D design and intelligent manufacturing of IDM hardware products Zhangzhou Solex Smart Bestter (Xiamen) Solex High-tech Industries

in such categories as kitchen & bathroom and health beauty and health Home Co. Ltd. Technology Inc. (Hong Kong) Limited

and emerging smart health hardware. It aims to enhance the coverage of

products in market segments and spares no effort to provide high-value-

added IDM hardware products with “innovation design and manufacture”

for professional well-known brands large chain retailers and brand Solex Italy S.p.a

e-commerce players around the world.Note: (IDM stands for Innovation (original technology creation) Design (art design) and Manufacture (digital intelligent manufacturing) respectively)

Kitchen & Bathroom and Health Beauty and Health Emerging Intelligent Health

* Shower * SPA Beauty Shower Head

* Shower System * Facial Care

* Faucet * Water Flosser * Smart Fitness System

* Smart Toilet * Hair Care Device * Smart Sleep Monitoring System

* Smart Bathroom Cabinet * Smart Skin Analyzer

5Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Product matrix

Kitchen & Bathroom

and Health Shower Shower System Faucet Smart Toilet Smart Bathroom Cabinet

Beauty and Health

SPA Beauty Shower Facial Care Water Flosser Hair Care Device Smart Skin Analyzer

Emerging Intelligent

Health

Smart Fitness System Smart Sleep Monitoring System

6Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Historical Development

19952004200620082010

Founded in Xiamen Solex High-tech Solex Science and Technology Park Established the Italian Design Sanitary Park was completed

Xiamen Industries Co. Ltd. was was completed establishing the base Center combining international establishing an advanced faucet

established for shower and hoses with the national design concepts with an efficient hardware production base in China

leading production scale covering an area design team covering an area of approx. 23590

of approx. 39997 square meters and square meters and specializing in

specializing in the production of plastic the production of hardware products

products with a focus on shower with a focus on faucets

202220212020201920162013

Publicly offered Acquired “Bestter” Phase I of Changtai Solex (Stock Code: Planned to invest RMB Solex laboratory

convertible to expand kitchen & Intelligent Park was 603992) was 2 billion to establish was certified by the

corporate bonds in bathroom and health completed and put successfully listed on Zhangzhou Changtai Canadian Standards

the amount of RMB products into use the SSE for A-share Intelligent Park Association (CAS)

610 million IPO covering an area of 531 and the China

mu (Chinese unit of National Accreditation

area) Service for Conformity

Assessment (CNAS)

7Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Corporate culture Development Strategy

The Company emphasizes fostering the corporate culture and values with Solex characteristics always By upholding the IDM Hardware Platform strategy and with innovation and creation at the core the

“believes in the power of technological innovation” and keeps pursuing excellent performance. With the Company insists on the IDM model and deeply explores the human health life demand to provide

mission of “creating a better health life for the people through continuous innovation” it actively fulfills its B-end customers with smart healthy and green hardware product solutions. In addition with the idea

social responsibilities establishes a positive and good corporate image gathers wisdom and strength of technology sharing it lays out various segmented categories around the underlying logic to enhancefrom all sides and strives to realize the vision of “maintaining a single world champion and becoming a product value.leader in health hardware”.Create a better health life for

the people through continuous

Mission innovation

Ma in ta i n a s i ng le wo r l d

Vision champion and become a

leader in health hardware

Core Value Be l i eve i n t he power o f

technological innovation

8Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Major Honors

China’s Service-oriented Manufacturing Won the title of National Green Factory

Demonstration Enterprise National Industrial Design Center

National Enterprise Technology Center

National High and New Technology Won the Corporate Nodes of National Industrial Top 100 Strategic Emerging Enterprises in Top 100 Private Manufacturing

Enterprise Internet Identification Analysis System Fujian in 2023 Enterprises in Fujian

9Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Major Honors

Top 100 Private Innovative Elite Team of Foreign Trade Top 100 Xiamen Private Top 20 Xiamen Private Technology Top 20 Xiamen Private

Enterprises in Fujian Enterprises in Fujian Enterprises Innovation Enterprises Manufacturing Enterprise

Joined Xiamen Medical Device

Top 10 Xiamen Green Enterprises Association Top 100 Xiamen Enterprise Top 10 Xiamen IP Enterprises Industrial Leader in Zhangzhou

10Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

ESG Management

Stakeholder Analysis

With great importance to communication and exchanges with internal and external stakeholders Solex identifies shareholders governmental authorities customers employees partners communities and the public as its

stakeholders communicates with stakeholders through various channels to understand their demands and expectations respond to them and promote the continuous improvement of ESG management.Stakeholders

Shareholders Governmental Authorities and Regulators Customers Employees Partners Communities and Public

* Intellectual Property Protection * Product R&D and * Green Products * Employee Salaries and Benefits* Business Ethics and Anti-corruption * Industry-university-

Expectations and * Risk Control and Compliance Innovation * Data Security and * Employee Training and * Environmental Management* Clean Technology and Opportunities research Cooperation

Demands * Globalization Strategy * Product Quality Privacy Protection Development * Green Office* Toxic Emissions and Wastes * Responsible Procurement

* Investor Protection Management * Energy Saving and * Occupational Health and Safety

* Customer Services Emission Reduction

* Intellectual Property Protection

Mechanism * Protection of Employee Rights

* Compliance with Laws and * Integrity in Operation * Technology * Green Product Design and Interests

Regulations * Clean Technology Development Innovation * Data Security and * Sound Remuneration System

* Cooperation with Regulatory * Sound Risk Management * Quality Assurance Privacy Protection

* Industry Discussions and

Communication * Unobstructed Promotion * Environmental Management

Inspection * Sound Environmental Safety System * Handling of Customer * Energy-saving

Exchanges

Channels Rules and Systems

and Response Feedback Technology * Sustainable Supply Chain * Globalization Layout * Diverse Training Systems * Green Office

* Regular and Temporary * Customer Improvement

Management

* Rich Employee Activities

Information Disclosure Satisfaction Survey * Construction of Health and Safety

* Unobstructed Investor systems

Communication Channels

11Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Matrix of Material Topics

To gain a deeper and more accurate understanding of the expectations and demands of stakeholders and Matrix of material topics

to enhance the professionalism relevance and substance of this Report the Company invited employees

suppliers service providers customers investors governmental authorities regulators and other stakeholders

through questionnaires to select and analyze 20 material topics related to the Company’s environment High

society and governance directing and laying the foundation for the construction of the Company’s sustainable

development systems.Product Quality

Management

Identification and Selection Stakeholder Surveys Comprehensive Analysis of of Topics Results Data Security and Privacy Product R&D and Innovation

Protection

Customer Services

Energy Saving and

Emission Reduction Employee Training Employee Salaries

and Development and Benefits

Occupational Health Responsible Green Products

and Safety Procurement

Intellectual Property

* Identify material topics that * Communicate with the internal * Conduct a statistical analysis Protection Toxic Emissions and Wastes

Business Ethics and Anti- Investor Protection

have significant impact on and external stakeholders of the topic scores based corruption

Industry-university-

the Company’s growth and of the Company by ways of on the survey results adjust Risk Control and research Cooperation Compliance

s takeho lde rs acco rd ing online questionnaires. mateiral topics with reference Clean Technology and Opportunities

t o t h e n a t i o n a l m a c r o - * 2023 stakeholder surveys to internal management and Environmental

Globalization Management

policy orientation domestic cover employees customers external expert opinions Strategy

and in te rna t iona l soc ia l investors suppliers partners confirm importance rankings

responsibility standard study communities the public and form a matrix of material

Green Office

with reference to annual hot other related groups. topics and respond to topics

topics industry trends and of concern to stakeholders in

rating concerns and based this Report.on the actual development of

the Company.Low Importance to Enterprise Development High

12

Importance to StakeholdersXiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Efficient and Regulated Governance General Meeting of Shareholders

In strict accordance with the requirements of the Companies Law Securities Law Code of Corporate Governance for Listed Companies The Company ensures that the general meeting of shareholders

Rules Governing the Listing of Stocks on Shanghai Stock Exchange and other laws and regulations the Company has established its can exercise its rights in accordance with law and operate in

sound internal control system regulated its operations and enhanced corporate governance so as to ensure that the corporate governance an efficient and regulated manner and make scientific decision-

structure is legal and compliant and operates stably. During the reporting period the convening and voting procedures of all meetings of the making. In strict accordance with the provisions and requirements of

Company complied with the relevant requirements of the laws and regulations and of the Articles of Association and rules of procedure and the Code of Corporate Governance for Listed Companies Articles

all voting results were legal and valid laying a solid foundation for the compliant operations of the Company. of Association and Rules of Procedure for the General Meeting of

Shareholders the Company convened and held general meetings

Organization chart of the Company of shareholders and engaged lawyers to witness general meetings.Shareholders attended general meetings of shareholders and had

General Meeting of the rights to be informed speak inquire and vote at such meetings

Shareholders in accordance with law.Strategy Committee

Board of

Supervisors During the reporting period

Nomination Committee

Securities Affairs Secretary of Board Board of Directors Remuneration and

the Company held a total of

Department of Directors Appraisal Committee

Audit Committee Audit Department 5 general meetings of shareholders

General Manager

including

1 annual general meeting

Administrative HR Environmental Equipment

Product

Category Innovation

extraordinary general meetings

Management Procurement Finance IT CenterCenter Department Center Center Business

Design Center

Unit Center 4

14Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Board of Directors

In accordance with the relevant laws and regulations the Company has

formulated the Rules of Procedure for the Board of Directors specified

legal person governance structure and regulated the mode of the meeting * Guide and supervise the establishment and implementation of internal audit systems

and decision-making procedures of the Board of Directors urges the * Review the annual internal audit work plans of the Company

directors and the Board of Directors to effectively perform their duties

and improves the regulated operation and scientific decision-making level * Supervise and urge the implementation of the internal audit plans of the Company

of the Board of Directors. Independent directors of the Company are all * Guide the effective operation of the Audit Department

senior professionals with expertise in law risk management accounting * Report to the Board of Directors on the progress and quality of internal audits as well as significant issues identified in

finance industry-related technology and business management etc. internal audits

Four special committees are established under the Board of Directors Audit Committee * Coordinate the relationship between the Audit Department and external audit institutions such as accounting firms and

i.e. Strategy Committee Audit Committee Nomination Committee and national audit authorities

Remuneration and Appraisal Committee. Each Committee includes at

least one independent director. Except for the Strategy Committee the

chairmen of other Committees are independent directors. With this it

enhances the autonomy and independence of the Committees’ operations

and provides scientific and professional opinions for the Board of Directors

to make decisions.* To conduct research on the long-term development strategy planning of the Company and make suggestions

* To conduct research on significant strategic investments and financing schemes that shall be approved by the Board of

Directors in accordance with the provisions of the Articles of Association and make suggestions

* To conduct research on significant capital operations and asset management projects that shall be approved by the

Board of Directors in accordance with the provisions of the Articles of Association and make suggestions

* To conduct research on other significant matters affecting the development of the Company and make suggestions

Strategy Committee * To track and inspect the implementation of the aforementioned matters

15Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

* To study the selection criteria and procedures for directors and senior officers and By the end of the reporting period

make suggestions to the Board of Directors

* To extensively search for qualified candidates for directors and senior officers screen

and review such candidates and their qualifications

* To make suggestions to the Board of Directors with respect to the nomination

appointment or removal of directors the Company had female directors representing independent directors representing

* To make suggestions to the Board of Directors with respect to the appointment or

Nomination dismissal of senior officers

Committee 9 members of the 4 44 % 3 33 %* To exercise other functions and powers granted by the Board of Directors and make Board of Directors

recommendations to the Board of Directors in accordance with the provisions of the

laws administrative regulations of the CSRC and of the Articles of Association

During the reporting period the Company held a total of

* To work out remuneration plans or schemes based on the main scope duties

and responsibilities importance of director and senior officer positions and the

remuneration level of other related positions of other related companies

* Remuneration plans or schemes mainly include but are not limited to performance meetings of the Board of Directors Audit Committee meetings Nomination Committee meetings

evaluation criteria procedures and major evaluation systems as well as major

reward and punishment schemes and systems

Remuneration * To review the performance of directors (non-independent directors) and senior

993

and Appraisal officers of the Company and conduct annual performance evaluations on them

Committee * To oversee the implementation of the remuneration system of the Company Strategy Committee meetings Remuneration and Appraisal The average attendance rate of

Committee meetings the board of directors was

33100%

16Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Board of Supervisors

The Company has set up the Board of Supervisors in By the end of the reporting period

accordance with the requirements of the Companies Law

Articles of Association and Rules of Procedure for the Board

of Supervisors and procured the supervisors and the Board

of Supervisors to effectively perform their supervisory duties

namely overseeing the legality and compliance of corporate

the Company had female supervisors representing executive supervisors employee supervisor

governance significant matters and financial position and

performance of duties by the directors managers and other

senior officers of the Company in a manner responsible to 3 members of the Board of 3 100 2 1

shareholders. %Supervisors

During the reporting period

Any ma t te r s

put to the vote

of the meeting

meetings of the Board of Supervisors with an average attendance rate of were approved

unanimously

9100%

17Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Sound Investor Protection

With great importance to the information disclosure and investor communication the Company ensures a good relationship with investors by promoting transparency and trust. During the reporting period

Information Disclosure 信息披露原则

In strict accordance with the provisions of the laws and regulations

such as Companies Law Securities Law Administrative Measures for Truthfulness Accuracy the Company disclosed

Information Disclosure by the Listed Companies and Rules Governing

the Listing of Stocks and of the Articles of Association the Company

has formulated the Management Regulations of Information Disclosure The matters stated in the information The contents o f the in format ion 4 periodic reports

to regulate the information disclosure of the Company and the relevant disclosed by the Company shall be d isc losed by the Company shal l

persons with information disclosure obligation enhance its information consistent with the facts accurately reflect objective reality

disclosure management level and information disclosure quality and

protect the legitimate rights and interests of the Company its shareholders The Company has disclosed

and the relevant stakeholders. ad hoc reports

The securities affairs representative and securities affairs officer of the

Company assist in the information disclosure activities of the Company Completeness Timeliness 88

timely understand important information generated by the Company

in its daily business activities and promptly release it; organize and

arrange the preparation of the Company’s periodic reports interim

The information disclosed by the The information disclosed in the Company

announcements and other documents to be submitted in accordance

Company shal l be free from any shall be finished within the period as Number of announcement

with the requirements of other securities regulatory authorities etc.; and attachments and documents

significant omissions that may be specified by the relevant laws and

assist in the collection transmission summarization organization and posted online

misleading regulations and other normative documents

release of information from the Company’s various information points. The

specialists urge the Company and the relevant persons with disclosure 份

obligation to comply with the provisions on information disclosure and 65

perform their disclosure obligation in good faith.

18Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Investment Communication投资者关系工作基本原则

The Company maintains unobstructed and

transparent communication and interaction Principle of full information In addition to mandatory information disclosure The Company conducts investor relationship work

the Company voluntari ly discloses other Principle of good faithchannels with investors and has formulated disclosure in an objective truthful and accurate manner to relevant information of concern to investors avoid excessive publicity and deception

the Investor Relationship Management System

to effectively protect the legitimate rights and

interests of investors especially small and medium The Company complies with the provisions of the

investors enhance investors’ understanding national laws and regulations and the requirements When select ing the way of the investor

and recognition of the Company and uplift the Principle of compliant of the securities regulatory authorities and Shanghai Principle of high efficiency relationship work the Company fully considers information disclosure Stock Exchange on information disclosure and and low consumption improving communication eff iciency and

corporate governance level and overall corporate ensures that the information is disclosed in a truthful reducing communication costs

value thereby achieving the goal of respecting accurate complete and timely manner.rewarding and protecting investors. The Company

has an investor relationship officer responsible for The Company actively listens to investors’ opinions

managing investor communication maintaining Principle of providing investors The Company treats all shareholders and Principle of Mutual and suggestions achieves two-way communication

with equal opportunities potential investors equally to avoid selective investor relationship monitoring market sentiment communication between the Company and investors so as to form disclosure

disclosing ESG information promoting the brand positive interaction.and strengthening effective communication

between the Company and investors.During the reporting period.com

The Company received

investors

held held received over repied to answered received and responded to

99 times in total through phone or on-site methods 3 performance briefings 1online collective reception 708 investors 5 e-interactive questions 48 investor hotlines 18 emails

19Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

With shareholder return as its top priority the Company has clearly established the basic principles and specific policies of

2023 Online Collective Reception Day for Investors

profit distribution in the Articles of Association. The Board of Directors of the Company updates the Shareholder Dividend

and Return Plan every three years and rewards shareholders first through cash dividends.In May 2023 the Company participated in the “2023 Collective Reception Day forInvestors of Listed Companies in Xiamen” jointly organized by the CSRC Xiamen Office In the future the Company will continue to share its fruits with investors through its steady operation and good

and the Listed Companies Association of Xiamen. The Company’s senior officers performance.communicated with investors online regarding the issues of concern to investors such as During the reporting period

2022 and 2023Q1 performance cash dividends corporate governance development

strategies operating conditions and sustainable development of the Company provided the Company paid cash dividends totaling representing of 2023 net profits

valuable information for investors and created channels and platforms for interaction attributable to the parent company

and communication between the Company and investors.

2 times 178851700 RMB 50.74 %

distributing out of 2022 profit in the first time out of 23Q1-Q3 profit in the second time

78598500 RMB 100253200 RMB

Since its listing the Company has constantly paid reasonable returns to shareholders through cash dividends. By the

end of 2023

the Company’s cumulative cash dividends amounted to RMB

361311200 (including tax)

20Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Risk Control and Compliant Operation

In accordance with the relevant provisions of the Companies Law Securities Law Rules Governing the Listing of Stocks Guidelines for the Internal Control of Listed Companies Articles of Association and other laws and regulations and

based on the actual situation of the Company the Company has formulated its Internal Control System establishes and effectively implements the sound Internal Control System to enhance its risk management level.Purposes of internal control of the company Significant internal control activities

To establish and improve the internal organizational structure that complies with modern corporate management

requirements form scientific decision-making implementation and supervision mechanisms effectively prevent controlling

shareholders and actual controllers from abusing control rights to encroach on the interests of the Company harm the

interests of small and medium investors and ensure the achievement of the Company’s business management objectives

Internal control

over the

Internal control over Internal control appropriation of the

To improve the operational efficiency and effectiveness enhance quality establish an effective risk control system Internal control over majority-owned capital management over related party Company’s funds

strengthen the risk control capabilities increase returns to shareholders and ensure the healthy operation of all business subsidiaries transactions by controlling shareholders and

activities of the Company management

To establish a sound internal economic environment prevent and promptly identify and correct various errors and

frauds and safeguard the security and integrity of the Company’s assets Internal control over Internal control Internal control Internal control

external guarantees over significant on information over work

and financing investments disclosure safety

To ensure that the Company discloses information in a truthful accurate complete and timely manner

To ensure the compliance with and implementation of the relevant national laws regulations and the Company's

internal rules and regulations

21Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Audit Department under the Audit Committee of the Board of Directors is responsible for The Company timely identifies and systematically analyzes the risks related to the achievement of internal

overseeing and inspecting the internal control system of the Company. The Audit Department control objectives in operational activities so as to find a reasonable strategy to deal with the risks. Based

regularly inspects the deficiencies in the Company’s internal control system inspects and on the risk evaluation results the Company takes corresponding control measures to keep the risks within

oversees the Company’s internal control once a year assesses the effectiveness and efficiency tolerable levels and ensures that the management’s instructions are carried out.of its implementation and makes suggestions for improvement and carries out the special

inspections and supervisions over the Company’s internal control from time to time.Risk control measures

Internal control governance structure * Identify risks based on the established objectives and take necessary actions to manage Establish risks

Control

Objectives * Objectives are categorized into objectives both at the level of the Company and the level

of business process

Fully responsible for formulating implementing and

improving the Company’s internal control system and

regularly carrying out comprehensive inspections and

Board of effectiveness evaluations over the Company’s internal * Accurately identify internal and external risks related to the achievement of control Risk

Directors control Identification objectives

* Determine corresponding risk tolerance level

Fully responsible for overseeing the implementation of the

Company’s internal control system ordering the Company

Board of Supervisors to correct the deficiencies in internal control identified * Adopt a combination of qualitative and quantitative methods to analyze and rank the

and report to the general meeting of shareholders on the identified risks based on their possibility of occurrence and degree of impact and

implementation of the Company’s internal control system Risk determine the key areas and risks to be controlled in priority

Analysis * Form a risk analysis team to work according to strictly regulated procedures so as to

Responsible for establishing improving and ensure the accuracy of risk analysis results

comprehensively advancing the implementation

Management

of the Company’s internal control system in the

operational process and inspecting the formulation * Balance risks and returns and determine the risk response strategies based on the

and implementation of various specific internal control Risk results of risk analysis and with reference to the risk tolerance level

systems by the Company’s departments and units Response * Reasonably analyze and accurately understand the risk preferences of different groups Strategies

take appropriate control measures including four risk response strategies namely risk

avoidance reduction sharing and tolerance

22Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Anti-corruption and Integrity in Operation

Code of Conduct for Integrity

The Company attaches great importance to and continues efforts to foster a culture of integrity and integrates the code of business

ethics into daily operations. Additionally it cultivates a clean work atmosphere and strengthens the integrity building through training * The employees of the Company should effectively safeguard the

education warning reminders or otherwise so as to ensure normal business order and the healthy development of the Company. interests of the Company and shareholders and not misuse their

authority or damage the assets and equities of the Company

The Company continues to strengthen the two-tier anti-commercial bribery compliance system of Solex and its subsidiaries and adopts

a zero-tolerance approach towards commercial misconduct across the entire Group. Bestter has formulated the Code of Conduct on * The employees of the Company should diligently perform their

Integrity which regulates employees’ integrity in their work safeguards the interests of the Company and shareholders and encourages responsibilities and not misuse their authority for private gain or

fair competition. Bestter has set up an Integrity Committee and established a sound supervision and restriction mechanism to ensure damage the interests of the Company

the implementation of regulations and the popularization of internal anti-corruption awareness.* The employees of the Company should properly exercise their

management rights to prevent any behavior that may infringe on

Organization chart of the Integrity Committee public interests and the Company’s interests

Chairman of the Integrity Make coordinated advances in the integrity building of the Company and * The employees of the Company should be thrifty and spend

Committee position-related expenses in accordance with the relevant formulate related policies and systems regulations

Vice Chairman

* The employees of the Company should exercise their

Regulatory * Oversee the integrity building of the Company and investigate and handle authority properly perform their duties faithfully and any duty

Department disciplinary offences encroachment or other illegal appropriation is strictly prohibited

Audit Department * Conduct audits on the Company’s internal financial activities and management

behaviors identify issues and promptly report them

Education * Organize and carry out integrity education and training for employees

Department enhance integrity awareness and regulate behaviors Solex has established an employee whistleblowing mailbox and dedicated hotline

Public Supervision * Establish a public supervision platform with whistleblowing hotlines and a

improved the whistleblowing management system and regulated whistleblowing

CEO mailbox responsible for receiving the reports on integrity building from management. The relevant handlers strictly comply with confidentiality rules not

employees and the public disclose any pending matters to the complainants or the accused promptly handle

Integrity Group * Implement integrity requirements and regulations problems and address relevant reports and feedback within 3 working days.

23Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Data and Information Safety

The Company strengthens the protection and management of information assets through the building of digital platforms and systems and ensures the stable and secure operation of information systems. In the future the

Company will further improve business operational efficiency and security to provide customers with safer and more reliable services.Digitalization Construction

Transition from 1.0 Basic IT “Network Management Mode” and 2.0 Standardization Digital Framework Preparation to 3.0 Deep Integration

Intelligent Manufacturing Digital Decision-making

To comply with the Industry 4.0 and Made in China 2025 industrial

policy the Company deepens the application of next-generation 2020 Intelligent

2016 Mobile Officing

information technology transforms production methods through

MES System

development of digital productivity and enhances new capabilities to Weaver OA

thrive and evolve in the digital age so as to achieve its transformation Upgrading

upgrading and innovative development. Digital-driven

2008 Excellence in

Online Operations2005

Characteristics of digital transformation

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2000

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SAP 升级 ECC6 2018 Data Mining and AnalysisOnline

The Company 2010

was founded 2007

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re V Solex IT 1.0 Solex IT 2.0 Solex IT 3.0

Digital development history of the Company

24

Data

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ang Ch asXiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Company defines the overall details and priorities of digital transformation projects

Highlighted applications of digital transformation

devotes output results corresponding technological manpower and time. Meanwhile it

also completes the overall planning of data asset management provides comprehensive

information technology support through ten different dimensions builds an intelligent big

data cloud platform and reshapes productivity and business processes. * Integrate sales production logistics quality finance HR and other business ERP (SAP)

system data

* Provide full-process support from order placement to shipment

Informatization system framework

Process * Deeply support various production and operation processes within the R&D PDM+OA PLM

management Company

Marketing (BPM and OA) * Include daily administrative office production management sales support Marketing Marketing Website WeChat system financial management and R&D processes (PLM)

Service CRM+OA CRM SRM Mini APP WeChat Official Programs Account

Manufacturing ERP+OA APS MRP WIP WMS MES

Supply chain * Achieve whole-process closed-loop system management

Procurement ERP+OA PR PO SRM Electronic management * Receipt inspection and other relevant steps of incoming materials are Contracts system operated at the mobile terminal through scanning QR code on the label

Decision- BI BW Data making Warehouse Data Mining Big Data

HR HR+OA iHR e-Learning iRecruit * Manage the manufacturing process obtain machine production process

Automated Expense parameters provide “transparent factory” production and operation data in Finance ERP+OA Accounting Control Reimbursement Manufacturing real time

execution * Improve production efficiency and product quality and facilitate product

Operation and Infrastructure Virtualization Intelligent Operation system (MES)Maintenance Service and Maintenance quality traceability

Completed * Connect various systems of panel furniture production to achieve semi-

Office OA Mobile Platform IM Under Construction and automated processing in the production

Planning

25Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Company’s informatization covers all business departments to create a digital operation and digital factory

* Solve data mining and analysis for use by the management for the manufacturing industry. In this process the risk is controlled effectively.Big data BI system of the Company in decision-making Internal design process of digital transformation

* Drill down layer by layer to pinpoint business data issues

Source Control Process Management Review and Summary

Management

* Solve the outdated architecture of the old system separate

Sales transaction front end and back end of the new system address he * New knowledge and

CRM system product-linked quotations further interact with customers * Establishment of the techology learning project team

at the mobile terminal and manage customer projects * Budget planning

effectively * Task and plan mechanism management * Ex post review and

* Research methodology * Development process summary

* Project review mechanism control

* Three-dimensional design digital presentation and system * Introduction of technical * Milestone reporting

integration to generate production data such as material resources * Standardized testing

R&D design system

types and usage

* Support VR to view the design effect

* Timely push the report data of core business

* Data center equipped with large screens to display data in

real time

Support mobile office

* Support email sending and receiving integration of report

tools and integration of daily affair sheets

* Intelligent meeting room hardware support

Smart factory

26Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Information Security Protection

Structure of the Information Security Group

The Company has formulated the Computer Network and Data Head of the

Security Management Measures Data Backup and Recovery Information Security

Group

Management Regulations and other information security systems to

guarantee the security of internal and external computer networks Deputy Head of the

and data the protection of intellectual property and the confidentiality Information Security Group

of core technologies of the Company. The IT Center of the Company

is responsible for formulating and revising network and data security Information Liaisons

management systems establishing and maintaining computer Information Security Officer Officer

networks managing electronic media and electronic media devices

and ensuring the security of the computer networks and data of the

Company.Measures for the standardized use of electronic equipment

To effectively ensure the normal management and operation of

computer networks the Company implements unified network

exit management unified user management and publicizes and Not place hazardous items such as flammable explosive Turn off the power switch of electronic equipment in case of long

popularizes the information security knowledge within the intranet of strongly corrosive or strongly magnetic materials in the electronic downtime such as statutory holidays

the Company. Departments using electronic equipment keep a clean equipment application environment and follow the principle of Not use others’ passwords to log into others’ electronic equipment

safe and good work environment for electronic equipment to avoid “whoever uses is responsible” without permission

potential network information security risks. Set a password for the electronic equipment with password setting Contact the relevant electronic equipment administrator of the Group’s

function IT center for assistance when forgetting the password

Turn off electronic equipment when leaving work or not using

electronic equipment for a long time

27Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Company has formulated the Information The Company has formulated the Information Security Emergency Plan strengthens the network operation security and information security effectively handles

Security Management Procedures Information responses to public emergencies related to network and information security and further improves the ability and level of preventing and controlling network and

Resource Management Procedures and other information security emergencies so as to ensure its network operation security and information security. Additionally it has established a leading group of information

information security systems to ensure the system emergency response responsible for leading organizing and coordinating the response to information system emergencies throughout the Company.information security of the Company. It organizes the

assessments on information security management Identification of information security risks

level and the regular vulnerability scans to identify

problems in the information security management Physical-layer Security Risk Analysis Network Security Risks System Security Risks Application Security Risks

process and propose improvement measures.Information safety management measures * Operating system security risk * ID authentication and * System environment security * Network architecture security risk

* Database security risk authorization control security riskrisk * Network communication protocol

Information Safety Information Security * Application system security risk * Confidentiality and non-* Physical device security risk security risk

Risk Assessment Awareness Training repudiation risk in information

* Network operat ing system * Virus hazard security risk transmission

security risk * Hacker intrusion security risk

* Physical-layer security risk

Network Security Server Security analysis

Management Management

Emergency prevention and warning measures

Desktop Terminal Information security education and trainingData Security

Security Management Management Improve the monitoring forecasting and

warning system for public emergencies The Company organized its employees and the

related to network and information security

employees of subsidiaries to participate in information

Website Security Application

Management System Access Set information security level protection

security education and training in June 2023. The

Management and carry out information security risk training covered the email safe use standards

assessments and other relevant contents and the employees

were assessed online to check whether they have

System Administrator Disaster Recovery Make data backup and registration of grasped the contents. This training standardized the

Permission Management servers and data centers and establish a

Management operating methods of the employees enhanced their data disaster recovery mechanism awareness of information security prevention and

created a secure information work environment. Information security training

28Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Innovation-driving

Development

Solex always insists on the business philosophy of

“innovation design and manufacture”. Guided bythe strategy of “IDM Hardware Invisible ChampionIncubation Platform” and capitalizing on the mature

R&D model the Company focuses on closely

integrating the technological innovation and product

R&D of the IDM hardware category with the market

demand continuously builds integrates and

optimizes its three major resource-sharing platforms

of “model manufacturing and technology” enriches

products with more cutting-edge functions and

higher value through continuous innovation so as to

comprehensively enhance the core competitiveness

of its segmented categories.R&D Infrastructure

Quantitative

Indicators Unit 2023 2022 2021

The Company values the cultivation of highly-competent

R&D engineers and managers with team spirit devotes R&D expenditure RMB (in 0000) 20353.17 19221.98 16956.82

itself to discovering and nurturing strategic R&D

management talents and has established a hierarchical Proportion of total

system consisting of experienced technical R&D talents R&D expenditure to % 6.82 6.04 5.70

with a reasonable professional structure. Meanwhile the revenue

Company adopts a mentorship system for one-to-one

training and offers targeted cultivation to the R&D team R&D personnel Person 664 799 732 Post-doctoral research workstation of The Company as the subsidiary

from time to time through internal training university Solex was recognized as a High and New

education and overseas training. Technology Enterprise

30Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

To encourage the R&D team to actively engage in the The Company has established a Scientific and Technological Achievement Award Committee which consists of 9 professionals from diverse fields including 6

transformation of new technologies the Company has research project heads and others heads of the Intellectual Property Center External Relations Technology Department and Finance Department. Each member

formulated the Measures for Rewarding Technology of the Committee has distinct responsibilities and jointly handles matters related to scientific and technological rewards in the Company.Research Achievements R&D Reward System R&D

Incentive System and other documents to innovation Scientific and Technological

incentive and has set up the Innovation Output Prize Achievement Award Committee

Innovation Transformation Prize and other awards

to stimulate the innovation capabilities of individuals * To manage and guide scientific and

and teams. These measures aim to improve the technological achievement awards

overall research level and technological status of * To improve the scientific and technological

the Company and promote the commercialization of achievement award work of the Company

research achievements. * To guide and revise the scientific and

technological achievement award policy

Innovation incentive assessment dimensions * To review and reward achievements

Innovativeness Freshness

Research Project Head IP Center External Relations Finance Department

Technology Department

* To evaluate the award- * To provide the subsequent * To recruit talents and engage * To timely pay awards based

winning scientific and security for the research the experts related to the on the final evaluation

technological inventions achievements of the Company Company’s business results

research projects technology

innovation transformations * To improve the Evaluation

and technological innovation Committee’s construction

reforms of the Company of the hierarchical system

consisting of external talents

31Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Company actively promotes intelligent construction. By the end of the

reporting period the Company has established a globally leading intelligent Innovative R&D Achievements

manufacturing base covering an area of near 700000 square meters and

possessed multiple leading automated production lines in the peer industry The Company regards technological innovation as its core strategies and insists on the innovation and research of original fundamental and

and globally advanced intelligent production management systems. industry-critical technologies. The Company focuses on underlying key technology research continuously strengthens R&D and innovation

investment and takes the lead in such fields as contactless sensing technology quantitative technology and micro-current technology.The Company has established a Product R&D Review Committee responsible for its technological development strategy and R&D strategy

and organization of internal technical exchanges and discussions and conduct of technical reviews phased reviews and evaluations on the

established R&D projects. The Review Committee helps ensure that R&D aligns with the strategic development direction of the Company

promotes internal R&D team communication and advances R&D progress.Product R&D Process

Project Planning and R&D Testing and Evaluation Commercialization

Establishment Standardization

Intelligent production lines

32Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Kitchen and Bathroom Beauty and Health Smart Health AI Technology

* Break through the limitations of traditional * Focus on IDM business model accelerate * Have begun to incubate new smart health * Independent ly engage in algor i thm

and basic household needs of consumers continuous innovation in core and key hardware with the help of the endogenous research and AI application IOT scenario

and seek to create high value-added health technologies such as water saving and R&D technology sharing platform accelerate construction and the R&D and production

life demands for consumers based on the emission reduction water quality improvement the R&D of emerging smart health products of smart electronic components provide

“IDM Hardware Platform” Strategy and with skincare improvement interchangeable head and extend smart health hardware to a software and hardware support for various

the “intelligence health and green” as the technology radio frequency technology broader range of fields. single-product categories and empower

main R&D directions. microcurrent technology smart detection intelligent scenes or spatial solutions for

* Take smart sleep products and smart

* G r a s p t h e c o n s u m e r d e m a n d f o r spectral imaging technology and light wave multi-category integration.energy saving. sports health products as the two core R&D antibacterial beauty health care healthy categories. The smart sleep products focus * Continue to explore AI algorithms + health

water quality and health testing in kitchen * Against the backdrop of segmentation on the smart pillows and smart thin pads fields such as deep image algorithms

and bathroom health products or spaces deepening and diversification of the market while smart sports health products mainly 3D vision and sensor fusion algorithms

and continuously upgrade categories such and user needs the Company accelerates the include smart strengthen smart mats and which have been applied in various multi-

as showers faucets and smart toilets based development of new products in the beauty smart sports rehabilitation. category smart hardware terminals such as

on the concept of “health”. and health fields including smart detection commercial skin analyzers smart mirrors

skin health dental care hair care and beauty and anti-snoring pillows.skincare to meet the needs of customers at

different levels and stages.

33Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Carbonated Spring Shower System Smart ultra-quiet anti-snoring pillow changing sleep position

The Company innovatively developed a carbonated spring shower system which can For patients with obstructive sleep apnea (OSA) and snoring

increase the concentration of carbon dioxide gas in water to 2g/L thereby improving during sleep the Company has developed a smart pillow with

blood flow speed in the human body. Tests showed that a user’s blood flow speed an inserted AI neural network and air pressure sensing monitor

when using this system is 1.2 times that when using ordinary warm water thereby which monitors multiple airbag pressures adjusts the height of the

promoting user metabolism and helping relieve fatigue. In addition this system also airbags and gently changes the head’s sleeping position thereby

helps expand capillaries accelerate blood circulation increase circulating blood improving airway ventilation alleviating snoring symptoms and

volume and reduce the incidence of cardiovascular diseases. Also it can make the improving various health problems caused by breathing pauses.pH value of the bathwater weakly acidic neutralizing residual hair bleach and dye in

the hair thereby effectively removing alkaline substances and caring for the user’s

hair.Carbonated Spring Shower System

Xivi commercial skin tester

The Company works with well-known domestic hospitals and universities to

research and develop the Xivi commercial skin tester with 17 innovative skin

testing dimensions such as horn plugs and the five-spectrum snapshot function. Smart anti-snoring pillow

Such device has unique AI skin testing technology and combines skin medical

testing standards and clinical testing with a big data skin health intelligent

analysis algorithm more suitable for the Asian population. Based on AIOT

deep learning it can quantitatively analyze skin conditions generate electronic

detection reports and intelligent skincare plans in 10 seconds and provide more

medically professional skin diagnostic treatment program for large applications

such as beauty salons and cosmetic counters. The Xivi commercial skin tester

has obtained multiple patent certificates and its innovative technology has won Xivi commercial skin tester

respected recognition.

34Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Participation in craft design competitions

The Company sets up a professional industrial design team which actively participates in international and domestic industrial design competitions

such as the iF Industrie Forum Design Red Dot Design Award International Design Excellence Awards (IDEA) GOOD DESIGN AWARD and Cross-

Straits Industrial Design Competition. While promoting internal innovation and R&D enthusiasm the Company exchanged and cooperated with

outstanding companies participating in the competitions and learned their advanced design concepts and technologies to enhance its brand image

and expand its market channels.Award Awards Awarded by Product Name Category iF Award Certificate 2023Recipient

Oceanus (Quantitative Sensing Water Shower

Solex iF Design Award 2023 Dispenser)

International Forum Design GmbH Wings (Sheet Lifting Pole) Shower

Zhangzhou

Solex iF Design Award 2023 Double (Cup Cleaning Faucet) Hardware

Minerva (Shoulder Spray Lifting Pole) Shower

Solex Red Dot Winner 2023 Red Dot Award AG Red Dot Winner Certificate 2023

Detective (Dental Detection Pen) Shower

Shoulder Spray Lifting Shower Hardware

Solex IDEA 2023-Finalist 2023 Finalist 2023 Finalist 2023 Finalist

Industrial Designers Society of America Slick Shower Shower Slick handheld shower Minerva SLEAVE smart anti-snoring pillow

Professional Professional Professional

Designed By: Wang Xi、Lin Xian、Chen Xiaoling、Chen Zhida、Wang Designed By: Liu Lunzhang、Lin Xian、Lin Tao、Chen Zhida、Luo Designed By: Xu Xiaoyun、Wu Panyu 、Jiao Qilin 、Chen Yiteng 、

Zhangzhou Jiahui Meilin Chen Zhida

Solex IDEA 2023-Finalist Sleave (Smart Anti-snoring Pillow) Health

PIONEER ELMO (ECO-PLASTIC Shower - Lifting

IDEA Award Certificate 2023

Solex GOOD DESIGN AWARD 2023 GOOD DESIGN AWARD BUREAU LIFTING POLE) Pole

Detective (Oral Detection Pen) Beauty

B r o n z e A w a r d i n t h e 5 t h

Cross-Straits “Longjiang Cup” Venus Shower - Lift ing

Zhangzhou (Zhangzhou)

Pole

Organizing Committee of Cross-Straits

Solex Excellence Award in the 5th Industrial Design Contest

Cross-Straits “Longjiang Cup” Pioneer (Front Aluminum Wall-Mounted Shower - Lift ing

(Zhangzhou) Lifting Pole) Pole G-mark Award Certificate 2023 Bronze Award in the 5th Cross-

Straits “Longjiang Cup” (Zhangzhou)

35Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Intellectual Property Protection

With great importance to patent applications and intellectual property protection the Company The Research and Development Management System of the Company clearly stipulates that the Product R&D Department

has formulated documents such as the Basic Management Control Procedures for Intellectual responsible for new technology and product R&D shall file patent applications for each self-developed technology conduct

Property Patent Management System Trademark Management System and Intellectual patent searches and analysis and timely protect and avoid infringement of intellectual property. The Intellectual Property

Property Handbook. It has established an Intellectual Property Center responsible for Review Committee has been established under the Intellectual Property Center responsible for evaluating and reviewing

classifying grading maintaining and modifying intellectual property issuing warnings for intellectual property applications and maintenance filed by various departments to ensure the protection and management of

potential infringement and working out effective preventive plans. The Company continues the Company’s R&D achievements.efforts to improve intellectual property construction and has won the titles of “Xiamen IPDemonstration Enterprise” “Fujian IP Advantage Cultivation Enterprise” and “National-level The Intellectual Property Center is responsible for collecting and updating information on national and local governmentIP Demonstration Enterprise”. intellectual property laws and regulations policy measures domestic and foreign related patent literature and trademark

registration and publishing it on the “Intellectual Property Management Center” module on the Company’s internal website

for reference by the R&D team. Regarding possible intellectual property issues the Company has formulated the Intellectual

Intellectual Property Policy Long-term Goal Property Emergency Response Measures clarifying the work responsibilities of relevant departments so as to timely respond

to possible intellectual property disputes such as patents and trademarks and protect its legitimate rights and interest.Technology leads the future and Stimulate creation effective utilization

intellectual property contributes to emphasize protection strengthen Intellectual property dispute handling process

development management and cultivate culture

Discover Infringement Subject to Official Release Solutions Track Processing

Investigation

Number of invention Number of patents under

patents held review

356 pcs 565 pcs

Number of new patents Number of trademarks Number of patents held

in a year held

213 pcs 106 pcs 1346 pcs

36Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Promotion of Industry Exchange

Industry Cooperation

Solex values common growth with the industry actively involves in the formulation of industry standards participates in industry exhibitions and exchange activities shares advanced knowledge and experience and establishes good

cooperative relationships with upstream and downstream enterprises in the industrial chain to jointly advance industry development.Formulation of industry standards Formulation of industry standards

Standard Nature Standard Nature

Standard Name Standard No. (International/National/ Standard Name Standard No. (International/National/

Industry Standards) Industry Standards)

Ceramic Cartridge Faucets GB/18145-2014 National Standard Specification of Plastic Sanitary Ware Security Production JC/T2353-2016 Industry Standard

Sanitary Ware - Pressure Assistant Water Flushing Devices GB/T 26750-2011 National Standard Specification for Hardware Sanitary Ware Security Production JC/T2355-2016 Industry Standard

Sanitary Ware - Gravity Water Flushing Devices and GB 26730-2011 National Standard Lavatory for Sanitary Fittings QB/T2658-2017 Industry StandardSupports

Accessories of Bathroom QB/T1560-2017 Industry Standard

Sanitary Fixture for Water Saving GB/T 31436-2015 National Standard

Terminology and Classification for the Kitchen and Sanitary Thermotatie Faucets QB/T 2806-2017 Industry Standard

Ware Fittings GB/33733-2017 National Standard Thermostatic shower QB/T 5418-2019 Industry Standard

Minimum Allowable Values of Water Efficiency and Water

Efficiency Grades for Showers GB28378-2019 National Standard Cartridges for Faucet QB/5524-2020 Industry Standard

Quality Classification for the Kitchen and Sanitary Ware Chu Wei Wu Jin Biao Wei Kitchen and Sanitary Ware Fittings-Check Valve QB/T5740-2022 Industry Standard

Fittings (Zhangzhou Solex) 2021 National Standard

Smart Faucets T/CBMF24-2018/T/General Requirements for the Kitchen and Sanitary Ware Chu Wei Wu Jin Biao Wei Group Standard

Fittings (Zhangzhou Solex) 2021 National Standard

CBCSA2-2018

General Principles for Upgrade and Innovation Evaluation of T/CNLIC0012-2020 Group Standard

General Technical Specifications for Faucets QB/T 1334-2013 Industry Standard Consumer Goods

Flow Rate Regulators for Sanitary Tapware JC/T 2117-2012 Industry Standard Extractable Nozzle for Kitchen and Bathroom Faucet T/CBCSA25-2020 Group Standard

Non-contact Sensing-actuating Valves for Water Supply Foam Makers for Faucet T/CBCSA43-2021 Group Standard

Appliance JC/T 2115-2012 Industry Standard

Test Method and Acoustic Group on Noise Emission from

Appliances and Equipment Used in Water Supply Installations JC/T 2193-2013 Industry Standard

37Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Participate in the 27th CEB China Beauty Expo Participate in the 27th Shanghai Kitchen & Bath China Fair

In May 2023 the 27th CBE China Beauty Expo was held at the In June 2023 the 27th China International Kitchen & Bath Facilities Exhibition was

Shanghai New International Expo Center (Pudong). The Company opened at the Shanghai New International Expo Center. Solex and its subsidiary Bestter

displayed a range of R&D achievements in beauty and health jointly participated and set up three kitchen & bath exhibition halls for Solex showers

including commercial skin analyzers nursing RF instruments AI faucets and Bestter’s smart toilets. Around the concept of “big health” these hallshair removal devices dual-use devices for spot lightening and skin perfectly matched the “integrated embedded green interconnected intelligent healthyrejuvenation and ultrasonic essence atomizers. Additionally it also set and innovative” theme attracting thousands of visitors.up an immersive interactive experience area to share new technologies

and achievements with peers and customers.The Company’s booth at the 27th CBE China Beauty Expo The Company’s exhibition hall at the 27th Shanghai Kitchen & Bath China Fair

38Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

University - Enterprise Cooperation Join hands with Huaqiao University to explore “AI+Health”

Solex has established various forms of cooperation with many universities including joint training To further deepen university-enterprise cooperation and industry-educationcollaborative R&D topic cooperation internships and practical training so as to achieve resource integration the Company and Huaqiao University held a “Scholarshipsharing and complementary advantages between universities and enterprises promote the industry- Donation Ceremony and Joint Research Center Opening Ceremony”

university-research integration and contribute to technological innovation and industrial upgrading. in November 2023. Through joint training of postdoctoral fellows and

integration of resources from universities enterprises and vertical

The Company conducted unified promotion for the students majoring in numerical application industry partners the two sides aim to create a localized and

June 2023 control of Xiamen Ocean Vocational College and invited them to visit the exhibition specialized first-class “AI + Health” industry-university-research innovation

hall of the Company

institution. With a focus on the digital economy construction needs of Fujian

The Company invited the students majoring in water engineering of Xiamen and by adhering to an open and joint innovation model between universities

June 2023 University of Technology to visit the exhibition hall and production workshop and and enterprises they are committed to building the Smart Health Joint

conducted unified promotion for them

Research Center into an influential “AI + Health” integration and innovation

platform in the industry. Additionally the donation provided by the Company

The Company conducted unified promotion for the students majoring in mechanicalJuly 2023 University - Enterprise Cooperation Opening and electrical engineering of Xiamen University to attend the theme lecture held by to Huaqiao University was used to establish the “Industry-Educationthe Company and invited them to visit the exhibition hall of the Company CeremonyIntegration Scholarship of Huaqiao University and Solex” with the aim of

supporting the education of Huaqiao University.Students from various majors of Wenshan University attended a career planning

August 2023 lecture held by the Company and visited the production workshop and exhibition hall

of the Company

Students majoring in materials formation and control of Xiamen University of

November 2023 Technology visited the production workshop and exhibition hall of the Company and

attended a career planning lecture held by the Company

Students majoring in industrial design of Huaqiao University attended an industrial

November 2023 design lecture held by the Company and visited the production workshop and

exhibition hall of the Company

Teachers from the Language and Literature College of South China University

December 2023 held an exchange meeting with the Company and visited the exhibition hall of the

Company

December 2023 Overseas study groups from Huaqiao University visited the exhibition hall of the Company University - enterprise cooperation Students from universities were visiting the enterprise

forum

39Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Offer of Top-notch Customer Service Whole-process quality management system of the Company

Product Design and Development Quality Procurement Process Quality

Management Management

Quality Management

* Product input: Clarify the product development cycle and quality requirements and convert

* New suppliers: The development of new suppliers requires sampleSolex always upholds the quality policy of “customer them into quality standards. Key quality elements include appearance performance and trials and the Quality Department R&D Departments and otherfocus continuous improvement; quality first pursuit of special requirements. departments conduct on-site assessments to comprehensivelyexcellence” and exercises strict quality control in all * Design and review: Conduct design reviews to ensure design quality evaluate the suppliers’ quality performance.aspects such as product R&D material procurement * Product development and validation: Conduct type tests on parts and products to complete * Long-term cooperative suppliers: Clarify the basic quality

production and product testing thereby establishing the reliability verification of processes and products requirements for the cooperation between the two sides the

a good brand image. The Company has formulated * Product output and standardization: Review trial assembly analysis reports trial production handling of non-conforming products and other matters conduct on-

quality control procedures including the Incoming analysis reports and type inspection test results site quality assessments and training from time to time to enhance

Inspection and Test Control Procedures Production * Transition into mass production: Establish key control points such as a zero complaint rate the suppliers’ supply quality

Management Control Procedures Process Inspection for new products and 90% of pass rate for the first order

and Test Control Procedures and Final Inspection

and Test Control Procedures promotes and continues

to implement the requirements of the quality Product Manufacturing Process Quality Marketing Service Process Quality

management system executes a comprehensive Management Management

quality management system covering all employees * Manufacturing quality control: Continuously control and improve quality-related indicators * Customer demand: After the Sales Department and Quality

and processes throughout the Company so as to such as sampling pass rate and quality losses department receive the Customer Demand Information Form the

further enhance its product quality. * Parts manufacturing: Introduce automated equipment to improve production quality after-sales quality personnel confirm customer needs including

such as automatic drawing automatic polishing injection molding automation in-mold product model quality requirements packaging methods product

monitoring systems and other automated intelligent equipment; introduce MES information configurations etc. and the personnel of the data group convert

systems to enhance quality reliability handle abnormal work orders and improve data them into relevant SAP data and publish them in digital and written

informatization documents.* Assembly: Continuously improve processes to enhance production quality such as * Quality complaints from customers: Confirm with customers the

standardization of tooling design and removal of residual water details of product defects shipment date of defective products

* Change of management: Establish the change implementation process regarding a change order number and quantity etc. After-sales qualitiy personnel are

in product processes tooling equipment configuration and structure responsible for summarizing customer feedback and submitting it to

the management review meetings.

40Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Company identifies different quality requirements of stakeholders such as customers suppliers partners and internal related parties through the whole-process quality management and enhances its testing system

capabilities including personnel inspection skills equipment testing capabilities laboratory testing capabilities and certification capabilities.Improvement of personal inspection skills

Quality skills competition of the Company Skill assessment tests Internal quality management training

In March 2023 the Company organized a competition for quality skills During the reporting period the Company conducted two QC skill During the reporting period the Company completed 77 sessions of

and knowledge at the management level to promote basic quality assessment tests to enhance the work skills of personnel involved in internal quality improvement training and 10 sessions of external quality

knowledge improve the professional skills of key quality positions and quality control stimulate the learning enthusiasm of personnel involved improvement training focusing on quality management and professional

enhance the enthusiasm of employees in various positions for quality in quality control and improve the overall quality management level of skill enhancement. What’s more it conducted multiple sessions of

improvement. The competition was divided into four parts: written test the Company. training covering the operation and use of inspection tools the concepts

practical exercises quick-response questions and award ceremony and certification requirements of the quality management system and

Contents of skill assessment tests

with the winners being awarded at the end of the competition. the discussions on common customer complaints regarding specific

products etc. so as to enhance the quality management capabilities

and inspection skills of employees.Basic

inspection

skills

Process Visual

review inspection

skills skills

Mastery SAP

skills of application

standards skills

Measuring

tool use

skills

Quality skill competition Quality management training

41Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Enhancement of equipment testing capabilities

Innovation of the instrument measurement size In-mold monitors at the injection molding plant

During the reporting period the Company made breakthroughs and During the reporting period the Company gradually promoted visual

innovations in injection molding quality control measurement reducing monitoring of the production process and post-production visual

measurement time increasing productivity ensuring precise size identification and screening. Unmanned monitoring work can be achieved

measurement reducing labor costs and enhancing its modern quality image. by adding in-mold monitors. Cameras continuously capture images of the

With the help of new measuring tools the Company’s quality management production process inside the mold for monitoring and verification. The

personnel no longer need to position the measured parts manually and the process involves three rounds of image capture and verification. If any

system automatically makes determination and remains unaffected by the skill abnormality is detected during the process the control molding machine is

proficiency of operators. The whole measuring process is simple fast and prohibited from closing the mold and issues an abnormality alarm thereby

accurate reducing the waiting time for the measuring machine eliminating ensuring the stability of the process of parts production.measurement errors caused by human factors and the measurement data at

the end of the process is automatically saved. The precision detection can identify defects with an accuracy of 0.01mm

and the judgment and processing time of 0.01 seconds thereby achieving

stable process production quality reducing labor costs minimizing scrap

generated by abnormalities and customer complaints.Automated measurement Camera monitor

42Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Enhancement of laboratory testing capabilities:实验室测试能力

The Company has a national-level standard

laboratory center and introduces advanced

international and domestic equipment testing Waterproof Parts Life Universal

to conduct repeated tests on a series of quality Testing Testing Testing Testing

requirements for product waterproof performance

structural strength performance life electrical Mechanical Transportation

safety environmental tolerance and transportation Safety Temperature Testing Testing Performance Vibration

safety so as to ensure that product quality achieves Testing Testing

the advanced level.Surface Treatment Performance Comprehensive

Testing Testing Testing

The Company obtained the ISO 17025 CNAS Laboratory Center

Testing and Calibration Laboratory Certification

Capability Certification

Enhancement of certification capabilities

The Company has successfully obtained more

than 20 certifications from many countries in North

America Europe and Australia for more than 400

products such as showers faucets hoses and

ARCs providing high-quality services for customers

to expand their products globally. During the

reporting period the Company and its subsidiaries

obtained ISO 9001 Quality Management System

Certification and the Company obtained ISO 13485

Medical Device Quality Management System

Certification.The Company obtained ISO 9001 The Company obtained ISO 13485 The subsidiary Zhangzhou Solex obtained

Certificationa Certification ISO 9001 Certification

43Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Customer services Cooperate with the customer to develop products

With the “customer-oriented” service philosophy Solex The Company maintains open communication and information sharing with customers swiftly The Company and the customer plan to jointly develop a soda

is willing to listen to and understands the real needs of advances the updating and iteration of its technology and products by fully utilizing R&D system faucet with the Company’s distinctive quantitative function

customers carries out all of its business activities fully database resources and technological innovation capabilities and continuously recommends for high-end clients. In the development process the project

from the perspective of customers. It also keeps making to customers high-value-added technologies or products that meet market demand hotspots to encountered difficulties as the mass production of the support

innovation and improvement to meet the customers’ achieve win-win results thereby effectively enhancing the stickiness of downstream customers. arm could not meet the pass yield requirements. The main reason

current and future demand for products and spares The Company has established a unified customer resource sharing platform where customer was that the original process was stainless steel precision casting

no effort to go beyond customer expectations. These expansion of existing or entirely new categories can fully rely on existing customer resources which resulted in a high defect rate because of the product’s shape

efforts enable Solex to swiftly address customer issues and cross-coverage of different categories of customer groups can generate synergies. and size. After close communication between the Company and

stand in its customers’ shoes and always provide high- Customer service system the customer regarding the R&D process the Company urgently

quality services for customers. switched to the stamping process and the product finally met

Offer Valuable Product Solutions the pass yield requirements. The customer was satisfied with the

Customer service philosophy Continuously provide innovative and valuable product solutions for Company’s attitude to solve the problem and the newly improved

customers base on the life pain points and market trends product had no issues caused by the changes and has been

steadily shipped in batches.Customer-oriented

Customer-oriented

Be guided by customer demand respond quickly and correctly to meet

Offer Valuable customer needs and create value for customers

Product Solutions

Contact a Professional Team

A mature team will provide professional services and suggestions and

Service

Contact a bring efficient and pleasant cooperation experience to customersPhilosophy

Professional Team

Stabilize Contact Window

Stabilize Contact Familiar with customers stabilize contact window and avoid confusion

Window

Transparent and Sincere

Transparent and Treat customers with honesty and transparency without deception

Sincere Soda boiling water drinking faucet

44Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Cooperation with the customer Customer product experience

The Company has been cooperating with a shower brand customer since 2005 The Company provides customers with thoughtful beauty experience services.and provides this customer with showers including design and production. Before the experience it provides makeup removing and cleansing products

As one of core suppliers of customers this Company has established good introduces professional instruments explains health status assessment reports

cooperation with customers. and receives suggestions for areas and solutions to be improved. During the

experience it provides tracking and guidance services technical services

reminders on important points and auxiliary supplies such as gels creams and

NPD Model Quality Management hair regrowth products. After the experience it provides post-care products like

hydrating masks lotions and skincare creams.Leverage the Company’s core Stabilize highly intelligent

innovation competitiveness production capabilities to At the end of the experience the Company provides users with a complete

to provide innovative product ensure product quality enhance experience report comparing data before and after the experience and offering

solutions and cooperate with consumer satisfaction and specific beauty care solutions. Beauty testing services

customers to complete the reduce complaint rates

development and launch of

new products

The Company has established the Identification and Traceability Control

Supply Chain Management Daily Management Procedures to manage products throughout their lifecycle and ensure that

the quality status of products at all phases from entry of raw materials to

delivery of products is identified and traceable. In the incoming phase all

Stabi l ize the product ion * Actively respond to customer directly purchased/outsourced and customer-supplied materials must use

supply chain to ensure on- needs in daily work and the Company’s unified QR code labels specifying supplier information

time delivery of products and provide excellent services order number parts information production date. This facilitates internal

meet market-side inventory * Make improvement based on tracking and traceability of raw materials in case of customer complaints.needs of customers the relevant issues identified Specific product packaging boxes of the Company have traceable labels

in the Annual Review specifying production date and other information which are synchronized

into the SAP management system so as to trace production batch of

Supplier identification of raw materials

parts and provide customers with complete clear and correct product

manufacturing information.

45Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Company has formulated customer after-sales management systems such as the Customer Complaint Handling Operation Guide and The Company has established the Recall Operation Guide and

Customer Satisfaction Survey Evaluation Procedures to understand current and future needs and expectations of customers regarding service Medical Device Recall Control Procedures to strictly manage

quality improve the quality of complaint handling and continuously enhance customer satisfaction. product recall ensure that product recall is under control and

guarantee the safety of users.Customer complaint flow chart Customer satisfaction survey

Product recall process

Collect customer complaints and Quality Services Delivery

feedback Salesperson * Complete the Product Recal l

of Marketing Request Form

Department * Fill in the customer name product

Confirm feedback content * Performance * Communication * Timeliness of name quantity and reasons for

* Appearance and cooperation delivery product recall

* Design with customers * Reliability of

Hold responsible units and relevant capability * Timeliness delivery

personnel accountable for the * Accuracy of of complaint * Lead time of

customer complaint and feedback form technical data handling production

* Packaging * Effectiveness of Manager of * Organize relevant departments

Confirm with customers whether Marketing and personnel to analyze the recall sample shipping

supply can continue and Department reasons for products with normal

temporary supply standards quality

Feed back temporary improvement

measures to customers Quality * Analyze the reasons for products

Management with qual i ty defects and g ive

Department handling suggestions

Organize meetings to review the Three-year customer satisfaction results

reasons

Validate reasons through * Ho ld a management rev iew

necessary tests or experiments 85.55% 78.41% 83.4% General Manager meeting if the recall quantity

is greater than or equal to 200

pieces

Complete the corrective action

report within 7 working days

202120222023

46

Within the 7th working day

Within the 3rd working day

Within the 2nd working day

Within the 1st working dayXiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Stable Procurement Supply

Supplier Management

Solex is committed to building a responsible supply chain continuously The Company has formulated supplier management systems During the reporting period the Company

optimizing communication with suppliers improving quality of delivery including the Procurement Management Control Procedures New conducted supplier assessments

by suppliers and working with suppliers to create a win-win cooperation Product Development and Procurement Operation Procedures

relationship. The Company mainly purchases raw materials and and Business Partner Development and Management Rules and with a coverage rate of a qualification rate of

components sets safety stock levels for raw materials and has formulated put a sound supplier management system in place to standardize

a complete management system and standard system. It strictly supplier selection access evaluation and elimination mechanisms 38 % 98 %

implements the mechanism for supplier introduction and continuous and stabilize the supply of materials to the Company.evaluation and signs the Basic Supply Contract framework with qualified

suppliers to define the rights and obligations of the Parties.

202320222021

Overall Number of

suppliers suppliers 1338 1333 1324

Raw material

suppliers 144 142 139

Equipment

suppliers 180 176 168

Supplier Non-

category production 211 207 200

management suppliers

Production

suppliers 783 790 801

Administrative

and logistical 20 18 16

suppliers

47Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Supplier screening process

The Company identifies and controls quality or business risks in

* Collect the information about potential suppliers through peer recommendation the supply chain through regular supplier performance evaluations

Supplier internet search industrial concentration areas or otherwise based on the

Search/ audits or otherwise. The Company offers coaching and training to development service needs of the Company

Information suppliers whose assessment results are unqualified so as to help

Collection * Collect information about suppliers with performance capabilities select target

Continuous

them improve production and operation. If a supplier’s assessment optimization

suppliers and contact them score is at level D or below for 3 consecutive months and the of supplier

coaching offered by the Company fails or if there is a serious management

violation of contractual terms or the Company’s regulations then

* Contact target suppliers understand their cooperation willingness main business

the Company will handle unresolved orders returns payments

Contact whether the types of products match the procurement needs of the Company and and other matters and remove the supplier from the existing

whether the quality system or financial position is good and conduct preliminary

supplier database.screening

Month assessment scoring criteria

* Suppliers truthfully fill in relevant information such as company profiles Category Weight Scoring Rules

Preliminary organization structures equipment status logistics conditions quality

Evaluation on management environment and safety and intellectual property Incoming qualification rate 30%

Suppliers Quality

Disconnection and 30% A: 90-100 Excellent

* Procurement and development: Evaluate supply capabilities supply chain customer complaints B: 80-90 Good

systems customer service capabilities and safety and compliance of suppliers C: 70-80 To be corrected Delivery period 20% D: 60-70 To be rectified

* R&D technology: Evaluate development capabilities technical capabilities

On-site

Evaluation on equipment capabilities and process capabilities of suppliers

Development of new products 20%

Suppliers * Quality: Evaluate quality management structures quality management systems

equipment and other relevant conditions of suppliers

* Suppliers make samples based on the drawings provided by the procurement and

development department and provide corresponding samples for review

* The Company evaluates the functionality and quality of samples

Sample * Officially place purchase orders if the requirements are met; inform suppliers

Confirmation to make corresponding corrections discuss product design structures

process technology and performance and negotiate for the best solution if the

requirements are not met The Company was conducting appearance training for suppliers The Company awarded

excellent suppliers

48Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

During the reporting period

Transparent and Sustainable Procurement

The Company promotes the sustainable procurement specifies anti-commercial bribery Percentage of suppliers who have Percentage of suppliers who have Percentage of the Company’s

clauses in contracts signed with suppliers improves the supervision mechanism for signed the Code of Conduct for signed agreements containing the internal procurement staff who

commercial cooperation constraints enhances the two sides’ awareness of compliance Suppliers environment and labor requirements have passed the sustainable

with law and integrity in operation and creates a legal honest clean and efficient work clause procurement training

environment to safeguard the legitimate rights and interests of the two sides in cooperation.The Company requests suppliers to comply with the laws and regulations on environmental 100 % 100 % 100 %

and occupational health and safety in operation gives priority to the suppliers that have

passed ISO 14001 Environmental Management System Certification and ISO 45001 Number of suppliers who have conducted Number of suppliers who have conducted

Occupational Health and Safety Management System Certification and conducts on-site environmental impact assessments social impact assessments

evaluations on suppliers’ environmental and safety behaviors from time to time.The Company stipulates the suppliers’ business ethics fair competition anti-corruption 289 289

conflicts of interest human rights prohibition of child labor and forced labor freedom of

association and collective bargaining anti-discrimination and harassment sustainable

products conflict minerals employee health and safety environment and quality among

others in the Code of Conduct for Suppliers and request suppliers to sign the Code of

Conduct for Suppliers.

49Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Common Growth with Employees

With great importance to employee management and care the Company is committed to providing a good work environment and broad career

promotion opportunities for employees. It advocates democratic management values employees’ rights to participate in decision-making and

management focuses on employees’ occupational health and work safety provides regular safety training and health examinations to ensure

physical and mental health of employees.Employee Management

With the people-oriented management philosophy the Company focuses on individual differences among employees and has formulated scientific

and reasonable management strategies. In order to comprehensively standardize key management processes such as employee recruitment

attendance training benefits rewards and punishments the Company has formulated the Employee Handbook and Human Resources Management

System to ensure that all management behaviors are governed by rules and provide employees with clear code of conduct. Meanwhile this also

safeguards the legitimate rights and interests of employees and promote the stable and healthy development of the Company.The Company was named as one of Top 10 Growth Talent Enterprises

During the reporting period the Talent Office of Xiaman Municipal

Committee Xiamen Torch High-tech Zone Management Committee and

Xiamen Human Resources and Social Security Bureau jointly conducted

talent enterprise evaluations and the Company was named one of the

Top 10 Growth Talent Enterprises in Xiamen reflecting the efforts of the

Company in talent introduction and cultivation. High-quality talents are

the driving force for enterprise development. The Company will continue

to deepen talent management reforms improve the quality of talents

and optimize the allocation of talent resources to vigorously promote the

healthy development of the Company.Certificate of Top 10 Growth Talent Enterprises

50Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Adhering to the principle of transparent and open decision-making the Company encourages employees to actively make suggestions and

participate in the operation and management of the Company and focuses on improving employee communication and management mechanisms Set up the CEO mailbox

to build diverse communication channels. Additionally it regularly holds the Congresses of Workers and Staff. At the Congresses it earnestly listens

to the opinions and suggestions of employees promptly responds to and address their demands safeguards their rights to participate in democratic To strengthen communication between employees and management

management so as to enhance their sense of belonging and involvement. the Company has set up a CEO mailbox on the enterprise WeChat

platform to collect the opinions suggestions complaints or feedback

Congress of Workers and Staff of employees and help the management to understand real

thoughts and needs of employees. All letters received are carefully

reviewed categorized and processed to ensure that the opinions

In April 2023 Zhangzhou Solex Smart Home Co. Ltd. held the Third Congress of the First Trade Union at which the important documents including and suggestions of employees are responded to in a timely and

the Rewards and Punishments Management System Human Resources Management System and Compilation of Safety and Health Management reasonable manner and confidentiality measures are taken against

Systems were reviewed and the proposals regarding engineering technology production and operation personnel and labor living benefits and the information of employees during the processing.occupational health were discussed and explained. In addition the Congress set up a Q&A session to fully listen to employees’ opinions and promote

the continuous improvement and development of the Company.Congress of Workers and Staff and Congress of Trade Union

51Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Employee Recruitment

Number of

The Company strictly complies with the Labor employees 研发部门人员情况 By gender (Person) By age (Person)

Law of the People’s Republic of China Labor

Contract Law of the People’s Republic of China

and other laws and regulations signs the labor 1916 1232

contract with each employee ensures that

employees regardless of their ethnic group race Female Below 30

sex or religious belief shall not be discriminated

against in employment and creates a diverse Total employees 研发人员总数

inclusive and harmonious work environment.

27723183273

During the reporting period 4688 Person 664 Person Male 30-50

Above 50

the Company employed veterans By rank (Person) By employment type (Person) By education (Person)

5 disabled persons 52 5 人 117 3760

462429

Senior Middle Below

management management Full-time bachelor Master and above

211899

4355 Junior 64

management Bachelor

General Part-time

employee

Note: Part-time employees refer to employees who have signed service contracts.

52Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Adhering to the principles of fair just and open talent recruitment the

Company has formulated scientific recruitment processes and selection Cultivation and Promotion

criteria to comprehensively evaluate the professional skills comprehensive

qualities and development potential of candidates. The Company actively To meet the development needs of its strategic planning the Company has built a sound hierarchical talent system accurately identifies

attracts outstanding talents both inside and outside the industry through and cultivates employees with potential supplements high-quality talents that meet strategic planning requirements assures the sufficient

multi-channel and multi-form recruitment activities and ensures that the talent reserves at various stages of development further optimizes the talent structure and enhances its overall competitiveness.talents introduced fit with its strategies and business development to build a

high-quality and efficient talent team. A hierarchical talent system

Strategic Planning Enterprise Planning

On-site Talent Construction of Qualification System Employee Competency Requirements HR Planning

Market and

Talent Website

Certification and Assessment of Analysis of Personnel Structure

Recommendation

by Companies and Colleges and

Qualification Levels Quantity and Capability Gaps

Industry Insiders Universities Talent Demand

Personnel Structure Quantity and

Capability Requirements

Multi-channel

recruitment

information No Talent Recruitment/

Newspapers and release

Internal Training

Headhunting Talent Supply Headhunting Mechanism

Periodicals Companies Yes

Performance Management Talent Differentiation

System Mechanism

Talent Training Plan Talent Pool Talent Selection Mechanism

Formal Labor Market

Employment and Employment

Agencies Talent Training MechanismCenters Talent Development

Incentive Mechanism

Job Reporting 360°-degree

On-the-job Coach Off-the-job Training Evaluation

53Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Company is committed to providing employees with

comprehensive career development opportunities assisting

employees in working out personal growth plans and

clarifying their career development direction and goals.By implementing systematic training plans and adopting

scientific training assessment methods the Company

comprehensively improves the professional skills and

comprehensive qualities of employees and promotes

rapid growth of talents. To attract and retain outstanding

talents in the industry the Company has established open

and transparent promotion channels to ensure that every

employee has fair promotion opportunities.Dual-channel career development

To standardize and promote the continuous and efficient training the Company has formulated the Training Management System Internal Trainer

Senior Officer Chief Engineer Management System Outbound Training Management System and Solex Middle and Senior Management Teaching Management Plan. By conducting

online and offline training in a planned way the Company enhances the professional knowledge of employees strengthens their job competency combines

their personal career development with the Company’s strategic goals and helps the common growth between the Company and employees.Manager Senior Engineer

During the reporting period

Section Chief Advanced Engineer

Head Intermediate Engineer

the Company provided with a total training duration of an average duration of employees participating in a pass rate of

a total of training assessments

Team Leader Junior Engineer 452 sessions of training 21244.5 hours 4.5 hours per person 8005 100 %

54Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Training assessment methods

Level Contents of assessment Assessment approach Assessment time Assessment subject

Response assessment Employee satisfaction with training courses and trainers etc. Questionnaires interviews discussions After the courses

Training department/training

organizer

Trainees’ mastery of the training

Learning assessment contents/what they learned from Questioning written tests oral tests After the courses and during the personal experiences courses Training departmentthe training program

Behavior assessment Whether the trainees’ behaviors are

Questionnaires observation

changed as a result of the training performance evaluation 360-degree After three months or six months Direct headevaluation

Impact of the training on the

Result assessment Company’s performance/whether Accident rate quality production rate the changes in behaviors have a wastage rate morale cost revenue After six months or one year Enterprise

positive impact on the organization

Formulation of training plans

Training Personnel Course Determination Plan Content

Preparation

Place Scheduling

Purposes Analysis Survey of Lecturers Formulation Design

and

Selectio Organization

55Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Class-based hierarchical talent training SOLEX E-learning platform

The Company has built a cloud learning platform to optimize the learning experience

High-potential Focus on general skills with basic management knowledge as supplementary enhance job and efficiency of employees and facilitate their learning at any time and at any place.Talent Training competence of trainees and reserve talents for the grassroots and middle management teams

Camp This platform gathers diverse learning materials at which employees can freely in advance. choose courses for learning based on their work needs and personal interests. It

enriches the learning paths of employees and provides new and powerful support for

the knowledge management and talent cultivation of the Company.Provide job skills training on the professional side and provide management knowledge

Junior required by production departments on the managerial side. Through this training team leaders

Management

Training Camp can coordinate and solve specific problems encountered by employees in their work assist and

support superiors collaborate with peers and guide and supervise subordinates.Enhance the job competence of trainees identify high-potential individuals and reserve talents

Qingsong Training

Camp for the meddle management team through training for talents at the level of section chief or

above

Unify the direction clarify strategic goals of the Company; learn and master the management

systems of the Company and fulfill management responsibilities; systematically learn non-

Jinsong Training personnel and non-financial knowledge to master the team goals and team building knowledge

Camp from the perspective of finance and human resources; systematically learn management

knowledge of team building grasp the key points of efficient team building; improve departmental

performance and management level from actual work with the help of senior officers.Focus on enterprise operation management and building of the hierarchical talent system including

Training for Senior

Management but not limited to role cognition coaching techniques effective empowerment organizational

capabilities entrepreneurial spirit enterprise culture management and leadership skills. SOLEX E-learning platform

56Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Welfare Activities Welfare system

To ensure that effective implementation and

The Company is commi t ted to bu i ld ing a management of employee benefits the Company has

comprehensive and high-quality welfare system and Social Insurance Housing Provident Statutory Holidays Marriage Leave Bereavement established and improved multiple systems. To be

Funds Leave

providing employees with competitive salaries and specific the Solex Parental Leave Plan clearly defines

benefits. In addition to basic salaries it stimulates the the vacation rights and interests of employees during

long-term work motivation of employees by granting Maternity Leave Annual leave Sick Leave Work-related Canteen parental leave; the Solex Housing Plan specifies that

equity incentives. It also provides a comprehensive Injury Leave Benefits the eligible employees will be entitled to interest-free

social security system to ensure the basic living loans to alleviate their economic pressure; the Solex

standards of employees. Further the Company Employee Mutual-aid Fund Management Measures Summer Cooling Travel Communication Travel Night Shift

highly values the physical and mental health of Allowance Benefits Subsidy Allowance Allowance stipulates that the Company will provide timely

employees and provides them with regular holidays financial assistance to the employees encountering

and occupational health examinations to enhance special difficulties or disabled ones. The improvement Protective Proposal Annual Outstanding Physical Trade Union

their sense of happiness and security stimulate their Articles Improvement Awards Employee Award Examination Benefits of supplementary welfare systems resolves the

enthusiasm and creativity and jointly promote the concerns of employees fully safeguarding and

sustainable development of the Company. enhancing their benefits.Supplementary welfare

Parental

Leave

Mutual Housing

Aid Fund Program

57Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

With great importance to the well-being of employees the Company regularly plans and organizes various cultural and sports activities as well as holiday celebrations and builds a self-display platform for employees to promote

their interaction and communication. Meanwhile the Company gives special condolences and care to injured employees with the aim of enhancing their well-being strengthening team cohesion and guiding them to pursue a

healthy and sustainable quality of life.Organize the fun sports meet The trade union organized mooncake gambling on the Mid-Autumn Festival Care about injured employees

During the reporting period the Company organized a fun sports meet On the Mid-Autumn Festival the trade union of the Company organized mooncake During the reporting period the Company has always

integrating traditional sports with fun elements and set up challenging gambling and employees actively participated. In this activity employees enjoyed the paid attention to employee health. For injured employees

activities such as relay races and target throwing. Employees actively pleasure of throwing dice and competing for prizes experienced the charm of traditional the Company swiftly took actions and promptly sent

participated in various items not only exercising their bodies enhancing culture and felt the warmth of Mid-Autumn reunion. It not only brought joy to employees representatives to visit them in hospital with fresh fruits

mutual understanding and trust in a relaxing and pleasant atmosphere but also deepened their understanding and respect for traditional culture injecting new expressing condolences on behalf of all employees and

effectively promoting communication and collaboration among teams but vitality into the cultural construction of the Company. conveying the care and blessings of the Company. This

also demonstrating unlimited vitality and creativity of teams. demonstrated the humanistic care of the Company.Scene of the fun sports meeting Mooncake gambling on the Mid-Autumn Festival Representatives were visiting an injured employee

58Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Occupational Health Organization chart of the Safety Production Committee

With great importance to the occupational health and safety CEO Office

of employees the Company strictly complies with the

Work Safety Law of the People’s Republic of China Fire

Protection Law of the People’s Republic of China Law of Safety Engineer

the People’s Republic of China on Prevention and Control

of Occupational Diseases and other laws and regulations Safety Resource Technical Engineer

has formulated dozens of systems including the Hidden Department

Danger Investigation and Management System Fire

Management Measures Major Fire Accident Management Safety Standard

System Warehousing Management Measures and Engineer

Management System for Occupational Disease Protection

Articles and established a Safety Production Committee

to define safety responsibilities at all levels and implement

safety management into various operational activities. Shower Business Beauty and Health Electronics Environmental

By establishing a sound occupational health and safety Unit Business Unit Business Unit Service Center

management system the Company has obtained ISO

45001 and OHSAS 18001 Occupational Health and Safety

Management System Certifications.Quality Logistics Assembly Production Production Environmental IT Department HR Department

Department Department Plant Department Department Department

HOSE Injection Molding Plant Financial Center

Administrative Service

Center

Surface Treatment

Plant Mixed Color Plant Supply Chain

R&D Sales

Department Department

ISO 45001 Occupational ISO 45001 Occupational

Health and Safety Health and Safety

Management System Management System

(Solex) (Zhangzhou Solex) Note: Haicang Park

59Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

During the reporting period The safety management informatization is a key means for the Company to improve the safety The Company has adopted comprehensive and systematic measures to build a

management levels and enhance risk prevention capabilities. By establishing a hidden danger solid defense line of work safety. Specifically it regularly conducts various safety

investigation and analysis system safety document management system and safety training system activities and fire drills to deepen employees’ understanding of safety operation

the Company has achieved real-time monitoring risk warning and data analysis in the whole process procedures familiarize them with emergency response processes improve their

of safety production. With these efforts the Company has enhanced the accuracy and timeliness of risk identification and response capabilities and enhance their safety awareness

safety management and built a comprehensive and efficient safety management system. and self-protection capabilities.Safety-themed activity

the Company had

During the reporting period the Company carried out a theme activity titled

0 fire and explosion accidents “Everyone Knows Safety and Everyone Can Respond to Emergency” including

various kinds of activities such as award-wining quiz explanation of emergency

process wearing of emergency equipment and anti-fraud quiz. Through a

combination of theory and practice the Company helped employees understand

Hidden danger investigation statistics and analysis interface display (Solex) each aspect of emergency response grasp the core points of emergency

response and improve their practical operation capabilities.

0 equipment injury accidents

0 casualties due to electric shock

0 cases of occupational diseases among employees Hidden danger investigation statistics and analysis interface display (Zhangzhou Solex) Safety-themed Activity

60Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Conduct the fire drill

In December 2023 the Company conducted a fire drill

covering employee evacuation indoor exercises and fire

fighting simulations. It is designed to comprehensively

enhance employees’ safety awareness and emergency

response capabilities to ensure that they can respond

to safety accidents if any in a quick orderly timely and

effective manner. Through this drill employees deeply

realized the importance of safety hazard prevention and fully

Indoor fire drill Fire fighting exercise

understood their responsibility for fire safety.To ensure the occupational health and safety of employees the Publicize the Law on the Prevention and Control of Occupational Diseases

Company has established a comprehensive mental health support

system. By setting up a mental health counseling room and providing

professional psychological assessment counseling and educational During the reporting period the Company conducted publicity of the Law on Prevention and Control of Occupational Outdoor evacuation

training services the Company helps employees effectively cope Diseases in the form of a lecture to popularize relevant laws and regulations on prevention and control of occupational

with work pressure and enhance their psychological adjustment diseases to all employees emphasize the importance of occupational disease prevention and guide everyone to establish

capabilities. Meanwhile the Company carries out a series of activities correct concepts of occupational health. Through this lecture employees gained a deeper understanding of occupational

for occupational disease prevention to promote the standardization diseases learned more methods to prevent them and enhanced their awareness of occupational health.and scientific development of its occupational health management.Psychological counseling room Publicize the Law on the Prevention and Control of Occupational Diseases

61Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Participation in Charity

The Company fully implements the national strategy of strengthening the country through quality improvement and spares no effort to drive its high-quality development. It fulfills corporate social responsibility with a high sense of

responsibility and mission actively participates in various social welfare activities gives back to the society and benefits the people with practical actions contributing to a harmonious society and sustainable development.Organize the voluntary blood donation drive among employees Visit the Elderly Association Sponsor the Athletic Meet at the Gunong Farm Middle School

During the reporting period the Company organized a voluntary blood In October 2023 the Company sent representatives to visit the Gunong To promote the development of sports at Gunong Farm Middle School

donation drive titled “Roll Up Your Sleeves Donate Blood Generously” Farm Liming Zhuqu Elderly Association talk with the elderly members and effectively improve the physical fitness of students the Company

and encouraged employees to participate actively. Through this activity learn about their living and health conditions and present them with assisted the Gunong Farm Middle School in organizing an athletic meet by

employees lent their helping hands to patients in urgent need of blood souvenirs. This activity strengthens the connection between the providing necessary funding and material support. This sports meet inspired

and spreading warmth and care. Also employees experienced the Company and the elderly expresses care and respect for the elderly more students to participate in sports cultivated their spirit of teamwork

responsibilities and missions as members of society. and carries forwards the traditional virtues of respecting the old and and competitiveness and laid a solid foundation for their comprehensive

caring for the young. development.Voluntary blood donation activity Visit the Gunong Farm Liming Zhuqu Elderly Association “Solex” Athletic Meet at the Gunong Farm Middle School

62Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Daily Environmental Environmental Management

Protection ManagementWith the environmental policy of “preventing environmental pollution complying with environmental regulations promoting energy conservation andconsumption reduction and creating a harmonious coexistence of people and water” the Company has formulated and revised the Environmental

The Company has established a sound environmental Management Technology system and established an Environmental Management Center fully responsible for the daily environmental supervision

management system and a response management system and management and monitoring of the Company and the coordination between the Company and the government’s environmental departments so as to ensure

hopes that its production activities comply with the requirements of the smooth conduct of daily environmental work. In addition it has established a sound environmental management organization structure and obtained ISO

environmental regulations and standards through comprehensive 14001 Environmental Management System Certification and National Green Factory Certification.assessment and control of possible environmental impacts and Organization chart of the environmental management system

risks in its production activities.Vice Chairman

Manager of the Environmental

Department Hazardous Waste Head

Environmental Water Treatment Head of Hazardous

Protection Section Section Waste Warehouse

ISO 14001 Environmental Management System Certifications Xiamen Environmental Changtai Water Treatment Team Water Treatment of Water Treatment Water Treatment of

obtained by the Company and Zhangzhou Solex Team Environmental Team A Leader of Science Team Head of Building Materials and Technology Park the Health Park Intelligent Park Park

64Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

National Green factory Emergency Management

Being officially put into production in 2020 Zhangzhou Solex is the The Company has established the Environmental Hidden Hazard Investigation System and implemented environmental protection and work safety

Company’s largest smart home manufacturing center in recent years. After according to the principles of “three musts” “who is in charge who is responsible” and “all employees whole process all around and 7*24”. Inonly two years of operation this center has reached the level of a “Green addition the Company has established the Environmental Emergency Response Plan and formed an emergency plan revision group to strengthenFactory” namely achievement of green goals such as intensive land use the response capabilities of the employees when facing environmental emergencies.harmless raw materials clean production waste resource utilization and

low-carbon energy and has become an advanced model of local green

manufacturing. Training on the Environmental Emergency Response Plan Hazardous waste leakage disposal drill

Currently both the Company and Zhangzhou Solex have obtained the

Green Factory Certification. In July 2023 the Company organized special training on the Environmental In August 2023 the Company conducted its annual drill on the disposal of

Emergency Response Plan for the environmental specialists from various hazardous waste (oil) leakage primarily simulating emergency treatment

workshops. The contents of training included but were not limited to the in the process of leaked hazardous waste (oil) cleanup. This drill aimed

types and characteristics of environmental emergencies formulation and to enhance the capabilities of the employees in handling emergencies

implementation process of emergency response plans departmental and their environmental awareness and to test the emergency response

coordination mechanisms and preparation and use of emergency response speed of relevant employees.equipment and resources. This training was designed to enable employees

to respond quickly and effectively to environmental emergencies minimize

damage to the environment and ensure the safety and health of employees.Green Factory plaques

During the reporting period

the Company organized a total of covering

12 sessions of environmental person-timesprotection training 3084

Training on the Environmental Emergency Response Plan Hazardous waste leakage disposal drill

65Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Prevention and Control of Three-waste Pollution Waste Gas

The Company spares no effort to minimize the impact of three wastes (i.e. waste water waste gas and solid waste) hazardous wastes and hazardous The Company has formulated the Waste Gas Operation Manual for each

chemicals on the environment and human health and ensure the work safety. It has also taken a series of effective measures to reduce and treat the production line to standardize the waste gas treatment process abate

emissions of “three wastes”. Through comprehensive treatment and management of three wastes the Company not only protects the environment and unorganized emissions of waste gas and improve the efficiency of terminal

abates pollution but also improves resource utilization efficiency reduces production costs and achieves both economic and environmental benefits. treatment so as to ensure compliance with exhaust emission standards.Training on the operation manual for waste gas treatment

Waste Water facilities and volatile organic compound emissions

The Company has formulated the the Operation Manual for Water Discharge of the Electroplating Workshop to standardize the discharge of various In May 2023 the Company organized the training on the operation

types of waste water and ensure the normal operation of the water treatment system. In the production process the Company discharges the project manual for waste gas treatment facilities and volatile organic compound

waste water into the comprehensive pool after quality separation and diversion processing so as to improve the water resource utilization rate. Some emissions for the equipment staff the person in charge of the

waste water from the comprehensive pool is reused for production after being treated in the water reuse treatment facility while the remaining is management of waste gas treatment facilities and the environmental

discharged after meeting discharge standards. specialists of on-site production workshops. The contents of training

covered basic principles and workflow of waste gas treatment facilities

preparation and updating of the operation manual identification

monitoring and control of volatile organic compound emissions etc.Flow chart of waste water quality separation and diversion processing Training on the operation manual for waste gas treatment facilities and

volatile organic compound emissions 66Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Solid Waste

The Company manages solid waste by garbage classification waste oil recycling devices in the injection molding workshop injection molding granulation ABS recycling and

other measures so as to increase the reuse rate and avoid waste.Training on standardized management of

solid waste

In March 2023 the Company organized the training

on standardized management of solid waste for on-

site hazardous waste management personnel key

environmental management leaders from various

workshops and environmental specialists. The contents

of training covered the knowledge on the classification

collection storage transportation and disposal of solid

waste. Meanwhile the lecturer introduced corresponding

treatment methods and technologies for different types

of solid waste. What’s more the training emphasized

the importance of environmental protection laws and

regulations reminded relevant personnel to strictly

comply with the requirements of relevant regulations Garbage classification in the park

and standardized waste treatment.Training on standardized management of solid waste Waste oil recycling device Injection molding granulation ABS recycling

67Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Hazardous Waste Hazardous Chemicals

The Company has formulated the Hazardous Waste Management System Hazardous Waste Management Plan and Hazardous Waste Warehouse To strengthen the safety management of chemicals

Management System to standardize the management of hazardous waste. Hazardous waste generated in the production process of the Company is transferred ensure work safety and safeguard the lives

to qualified third-party companies for disposal. and properties of employees the Company has

formulated the Measures for Management of

Plan on minimization of toxicity from hazardous waste Chemicals and Operating Regulations for DangerousChemicals and implements a “special izedImprove the quality of raw materials strengthen the quality inspection of incoming raw materials directly return unqualified materials to suppliers for reuse management system” for storage of chemicals.and reduce the chance of their entry into the production line reduce the generation of unqualified materials thereby reducing the generation of toxic and List of chemicals used in the production process

hazardous or low-toxic and low-hazardous waste of the Company

Strengthen the management and control of the production process implement strict classification management and minimize the generation of hazardous Particle urea-formaldehyde molding plastics

waste

Polypropylene

Further abate pollutants from workshop source and increase utilization and recycling rate

Degreasing oil

Measures to reduce the generation of hazardous waste and minimize its toxicity Low-temperature shock-absorbing grease

Improve design Use advanced Use clean Improve Comprehensively use Improve the pollution Hydraulic oil

technology and energy and raw management hazardous waste prevention and

Tailor products according equipment materials control level

to customer demand Use the equipment with Use more Exercise effective Repeatedly use rags Regularly maintain Lubricating oil

and minimize waste better performance to environmentally control in the containing paint waste and exhaust

of raw materials to reduce the generation friendly raw process to reduce or alcohol recycle treatment facilities to

avoid the generation of of hazardous waste materials and waste cleaning waste minimize leaks in the Silicone

hazardous waste and the consumption gradually increase water and reduce workshop

of raw and auxiliary the use of clean generation

materials energy Liquid silicone rubber

68Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Energy and Resource Energy Conservation

Conservation The Company adheres to the energy management policy of “compliance with law fine management low-carbon manufacturing and sustainable development”. The Company has formulated the Energy Management Procedures

Energy Review Management Procedures and Management of Energy Benchmark Energy Performance

The energy and resource conservation is one of the Company’s important Parameters and Goal Indicators and other energy management systems revised the Energy Management Manual

environmental protection efforts. Through the energy and water saving and New Modified Expanded Energy Planning and Design Management Procedures during the reporting period

technology reform the Company not only reduces production costs to standardize its daily energy and resource usage. By establishing a sound energy management system the

meets customer demand but also decreases environmental burdens. Company has obtained ISO 50001 Energy Management System Certification.ISO 50001 Energy Management

System Certification

Chart of energy management system process Organization chart of the energy management system

Demands and

Internal and External Factors Expectations of Energy Conservation Leadership Group

Stakeholders

Energy Management System Specifications

Energy Conservation Work Group

P

Planning

Administrative Production Business R&D Sales Finance Procurement

Department Unit Department Department Department Department HR Department IT Department

A Support and Improvement Leadership DRole Operation Responsible Responsible Responsible Responsible Responsible Responsible Responsible

for water for R&D for for for planning for personnel for the

electricity improvement evaluating accounting procurement and training development

gas and and sales plans cashier and supplier management procurement

Performance steam system management and product budgeting management and

Evaluation measurement of new prices and auditing management

transportation products of software

C maintenance and hardwareadministrative

logistics Organize and oversee

and vehicle the energy conservation

management work management of

Expected Results Shower Business Unit

of the Energy Beauty Business Unit and

Management System Electronics Business Unit

69

Electronics

Business Unit

Beauty Business

Unit

Shower

Business UnitXiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

The Company has established the Energy Risk and Opportunity Control Rewards and punishments for energy conservation assessments of the Company

Procedures and set up an energy risk and opportunity assessment team

which is led by the energy-saving team. After extensive discussions and Commend outstanding units and individuals in energy conservation efforts and criticize the units and

effective analysis and judgement by various departments the Company individuals who consistently fail to meet energy conservation goals

prepares the Energy Risk and Opportunity Assessment Form grades

risks and develops corresponding response measures.Increase assessments on those who are irresponsible in their work and inefficient in their management

In accordance with the provisions of the Energy Operation and who cause energy losses due to human and management responsibilities and impose administrative

Management Procedures the Company shall hold an annual penalties and performance assessments on the managers section chiefs and team leaders on a joint basis

energy conservation summary and analysis meeting conduct

energy conservation publicity and education and organize energy

conservation training at the beginning of each year to enhance

employees’ awareness of energy conservation. Additionally the Conduct an assessment on the responsible person and also on the corresponding department

Company formulates medium- and long-term energy conservation manager on a joint basis based on specific circumstances in case of energy losses caused by

plans and corresponding employee reward and punishment measures equipment systems and other factors or in case of failure to consider analyze study the defects

based on energy conservation goals every year. Adhering to the affecting equipment efficiency or failure to work out improvement or treatment plans in the whole

principle of a combination of both spiritual and material management in production process

energy conservation efforts the Company ensures rewards for savings Increase assessments when there is an improvement and treatment plan but the improvement and

and punishments for waste. treatment fail to be finished within the period as specified therein

During the reporting period

he Company implemented a total of invested approx. RMB Conduct performance assessments when human error results in metering errors omissions or

misreporting of energy consumption and electrical energy

163.75

energy conservation management plans million The Administrative Department is responsible for maintaining and repairing all non-production energy (gas

water electricity) metering devices at measurement points and is required to ensure that the effective use

and accuracy rates of such devices must reach 100%. Conduct an assessment on the responsible person

based on the resulting loss in case of any anomalies

achieve annual electricity savings of annual steam savings of

500000 10.8 Relevant departments should inspect energy-saving measures for the use of water electricity gas and steam at offices and on-site.

Circulate a notice of criticism against any waste behavior due to failure to comply with the requirements

kWh tons

70Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Application of energy-saving air compressors

Zhangzhou Solex invested RMB 1636000 to purchase 4 air compressors with the level-1 energy efficiency label which were equipped with AI controllers.These compressors can automatically start and stop based on backend big data with one featuring load adjustment frequency and two incorporating

waste heat recovery systems. The application of these technologies will effectively reduce energy consumption decrease environmental burdens and also

contribute to improvement in production efficiency and cost savings. This energy-saving technology reform project reflects the Company’s commitment to

energy conservation and emission reduction and has won the title of “Provincial Energy-saving Demonstration Project”.Rooftop PV power generation

In response to the national carbon peaking and carbon neutrality goals Zhangzhou Solex introduced a rooftop PV project taking full advantage of idle

rooftops for distributed PV construction. By adopting the “self-generation and self-consumption with surplus electricity being transmitted to the grid” model

Zhangzhou Solex achieved the dual goals of effective utilization of electricity and energy saving and emission reduction. Clean energy accounted for

25.33% of the total energy consumption at this base.

With PV construction the Company generated

5000000 kWh of electricity annually

reduced carbon emissions by equivalent to planting

Rooftop PV power generation project 5000 tons 209600 trees

71Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Water Saving During the reporting period

The Company has formulated a Water Consumption Management the Company implemented a which can achieve annual Water consumption plan is

System to rationally standardize water consumption strengthen water total of water savings of

management and improve water utilization efficiency. In accordance

with the requirements of the policy the Company’s Energy Department 7 water saving organizes water balance tests every three years and obtains test reports. management plans 64590 tons 50884 tons per month

Water saving management plans

Waste water from production is reused after being treated by equipment The Company’s factories use recycled water in their cooling towers and The production assembly water testing of the Company uses recycled water and

and meeting standards. adopt medication treatment to reduce waste water discharge. the cleaning frequency has been extended from once per quarter to once per year.Waste water recycling treatment center Cycling use of water in injection molding cooling Recycling pool of assembly water testing

72Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Green Water-Saving Products Water saving and energy conservation starting with small stepsThe Company takes “green manufacturing and smart The cross-flow of hot and cold water pipes in faucets leads to significant hidden energy waste. If calculated based Green electroplating technologyhome” as its long-term development strategy. It seeks to on a cross-flow rate of 0.8L/m per time 150 times/day 20 seconds/time a rise in the temperature from 20 degrees

achieve greening of products from four aspects namely Celsius to 70 degrees Celsius and a heater thermal efficiency of 0.9 a conventional temperature-adjustable faucet

Green electroplating is an environmentally friendly surface

energy conservation water saving zero PVC and recycled will waste 900 degrees of electricity a year which can be used by the family for three months. To address this issue

treatment technology which can reduce or eliminate

materials and strives to reduce the impact on environment the Company has developed a completely independent and closed full-cold and full-heat sensor facet helping

environmental pollution and harmful substance emissions

in the product life cycle to enhance the green quality energy conservation from small steps.generated in traditional electroplating process. The Company

of products and to meet the demand of customers for

introduced the advanced Chrome 3 technology to optimize the

environmentally friendly products thereby making positive Efficient water saving Efficient energy conservation

production process reduce energy consumption and waste

contributions to sustainable development.water discharge and minimize the negative impact of the

electroplating process on employees and the environment. The Company has upgraded the temperature The Company developed infrared sensing technology Green products adjustment plan and uses a new faucet structure to ensuring that the static power consumption of the faucet

Manage water and energy ensure cold and hot separation without any leakage. is not greater than 25UA. When a user uses ordinary Comparison of two electroplating technologies

Energy consumption by water usage This design ensures that the faucet ball head and the four AA batteries the faucet can operate normally for

Conservation and water temperature displayed Traditional Chrome 6 technology gasket are completely sealed when the water flow is more than 2 years. When the user uses lithium batteries

on LED display screens thus in either full cold or full hot state thus preventing cold along with super capacitors if calculated at a flow rate

reducing energy consumption

Metallic chromium coating in plating solution water infiltration in full hot state and eliminating hot of 3L/min the charging current can reach over 35mA. It

Mix water with air to reduce comes from Cr6+ or Cr3+ water waste in full cold state. The design has been takes approx. 10 minutes to fully charge the capacitor

Water water consumption by 40% awarded an invention patent. and when fully charged it can power the solenoid valve

Saving without affect ing shower to switch continuously for over 250 times with no need

experience Chrome 3 technology for battery replacement for at least 8 years.Use environmentally friendly

mater ials to manufacture * Metallic chromium coating in plating solution

0 PVC products and not generate comes from Cr3+

harmful gases or heavy metal * Less toxic to human health (toxicity is only 1%

pollution in the production process of Cr6+)

Up to 65% recycled materials * Non-oxidizing

Recycled are contained in the products of * Safer in manufacturing processes and also

Materials the Company which are based for humans and the environment

on the waste plastics discarded

by the end consumer. Updated temperature adjustment plan Hydropower sensor faucet

73Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Green Home Co-creation The recycling rate of the Company’s product packaging materials is

100%

The Company is actively pursuing its carbon neutrality goals and strives to become a carbon-neutral company

by 2025. With a strong conviction that the environmental initiatives are key to building a green home it

hopes to drive environmental concern and involvement among downstream supply chains and employees by the percentage of recycled plastic content

practicing green packaging and green office initiatives. in some plastic packaging materials is

Green Packaging 50 %

The Company uses biodegradable or recyclable

green materials for product packaging such as paper

and bio-based plastics to reduce plastic pollution and

resource waste. All printing adopts environmentally

friendly inks including product silk screen packaging

liner and outer box printing. The Company reduces

the use of packaging materials decreases packaging

weight and volume and minimizes consumption and Forest Stewardship Council (FSC) Certification Provincial Green Supply Chain Management Enterprise

waste generation by optimizing product packaging

design. In addition the Company reuses packaging Basic types of the environmentally friendly packaging materials of the Company

and cargo transport pallets to minimize packaging

waste and environmental pollution. PP nonwoven

PE bags with 30%

The sustainable packaging solutions of the Company Wrapping paper

PE bags with 51% fabric bags that can

recycled content recycled content decompose naturally

have been verified by the Forest Stewardship Council after 90 days outdoor

(FSC). Further the products and raw materials of

the Company have obtained green supply chain

certifications from reputable organizations in multiple PP nonwoven PBAT/PLA blended Bio-based

countries or regions. composite bubble Dust-free paper bags biodegradable hydroentangled bags

bags plastic bags

74Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Reduced packaging

The Company continuously explores and promotes green product packaging and redesigns product packaging and streamlines packaging structure to minimize the use

of packaging materials while ensuring the functionality and protective performance of production packaging are not affected. Additionally it advocates the concept of green

consumption conveys the value and significance of reduced packaging to consumers and guides them to support green products with a view to reducing the negative impact

of packaging waste on the environment.Reduced product packaging of the Company

Item Downsize the color packaging box: Remove internal plastic packaging: Downsize turnover pallets:

Reduce height and width of the color Replace inner PE bags with bundled Downsize turnover pallets of internal parts

packaging box straps Replace the expandable polystyrene with

paper for the turnover pallets of internal parts

Before change

After change

75Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Green Actions

The Company organizes green actions such as environmental knowledge competitions to enhance employees’ awareness of environmental protection and facilitate the dissemination of environmental concepts within the

Company. Meanwhile it devotes itself to promoting green office and taking measures such as water-saving slogans and air-conditioning temperature limitation so as to ensure that energy conservation efforts are integrated into

the daily work of employees.Contest on the Environment Day Green financial investment publicityIn June 2023 the Company organized a World Environment Day activity titled “Building Modernization for Harmonious During the reporting period the Company efficiently and visually promoted the conceptCoexistence between Humans and Nature”. This activity was designed as an interactive environmental knowledge of green investment to employees and the public with help of the electronic screen so as

competition with the aim of enhancing employees’ environmental awareness and increasing their concern to and to popularize knowledge about green financial investment enhance recognition of green

involvement in environmental protection efforts. finance strengthen risk prevention awareness advocate green investment and jointly

promote the sustainable development of the financial industry.Publicity posters and banners

Green financial investment publicity

76Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Key Performance

Environmental

Issue Quantitative Indicator Unit 2023 Data 2022 Data 2021 Data

Total investment in environment management RMB 14488071 13773408 10217587

Environmental Including: Total investment in energy-saving and

Management consumption-reducing improvement initiatives RMB 3173631 5306735 2167666

Including: Total investment in other measures

related to environmental protection RMB 11314440 8466673 8049921

Gasoline consumption in self-owned vehicles for

official use Liter (L) 44921 35897 45690

Diesel consumption in self-owned vehicles for

official use Liter (L) 11358 10587 9681

Diesel consumption in self-owned logistics freight

vehicles Liter (L) 50753 54786 67859

Total natural gas consumption Cubic meter (m3) 120862 140530 163172

Total steam consumption Cubic meter (m3) 9941 10094 10627

Energy Use Total electricity consumption Megawatt hour (Mwh) 62134 59029 67331

Total purchased electricity Megawatt hour (Mwh) 26950 29342 33731

Consumption of self-generated renewable

electricity Megawatt hour (Mwh) 2080 0 0

Electricity consumption per unit output Megawatt hour (Mwh)/RMB 10000 0.21 0.20 0.20

Annual electricity savings directly realized by

energy saving and efficient measures Kilowatt hour (kWh) 8487251 759528 3512004

Annual use of recycled plastic Ton 991 954 905

77Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Issue Quantitative Indicator Unit 2023 Data 2022 Data 2021 Data

Total waste gas emissions 0000 cubic meters (0000 m3) 373908 274140 393156

Nitrogen oxide (NOx) emissions Kilogram (kg) 0.02 0.02 0.22

Sulfur oxides (SOx) emissions Kilogram (kg) 0.02 0.02 0.22

Waste Gas

Management

Volatile organic compounds (VOCs) emissions Kilogram (kg) 1.27 1.63 1.14

Ammonia (NH3) emissions Kilogram (kg) 0.07 0.10 0.31

Hydrogen chloride (HCL) emissions Kilogram (kg) 1.79 0.88 2.31

Total water consumption Cubic meter (m3) 463751 410648 467872

Total net freshwater consumption Cubic meter (m3) 463751 410648 467872

By source of abstraction: municipal water supply Cubic meter (m3) 463751 410648 467872

Recycled/reused water Cubic meter (m3) 47330 45660 44260

Water Resource

Management Water consumption per unit of product Cubic meter (m3)/RMB 10000 1.57 1.39 1.36

Annual water savings directly realized by water

saving measures Ton 76357 50289 56210

Total waste water emissions 0000 cubic meters (0000 m3) 24.28 22.36 24.81

Total chromium Kilogram (kg) 12.60 6.90 22.50

Hexavalent chromium Kilogram (kg) 1.20 0.40 12.00

78Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Issue Quantitative Indicator Unit 2023 Data 2022 Data 2021 Data

Total copper Kilogram (kg) 12.10 6.60 48.90

Total nickel Kilogram (kg) 11.90 8.50 11.1

Chemical oxygen demand in waste water Kilogram (kg) 15842 10809 13926

Water Resource

Management Ammonia and nitrogen in wastewater Kilogram (kg) 4211 3764 5253

Total nitrogen in waste water Kilogram (kg) 5774 6193 7249

Total phosphorus in waste water Kilogram (kg) 801 849 111

Suspended solids in waste water Kilogram (kg) 8164 4904 3723

Total hazardous waste Ton 1100 1112 1299

Total industrial solid waste Ton 1948 2311 1819

Solid waste

management

Total recycled/reused solid waste Ton 3048 3423 3118

Solid waste recycling rate % 100 100 100

79Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Society

Issue Indicator Category Quantitative Indicator Unit 2023 Data 2022 Data 2021 Data

Total hours of environmental and work safety

Environmental training

Hour 1802 1705 2207

training and drills

Number of safety drills (fire toxic gas leakage etc.) Time 35 31 28

Number of employees who were injured at work

(minor injury and above) Person 20 22 25

Number of work-related fatalities Person 0 0 0

Work-related injury Number of lost workdays due to work-related injuries Day 353 729 525

Occupational Health

and Safety Incidence rate of occupational diseases % 0 0 0

Lost time injury frequency rate of employees % 3 3 3

Number of suppliers who were injured at work (minor

injury and above) Person 0 1 0

Number of supplier work-related fatalities Person 0 0 0

Supplier safety

Lost time injury frequency rate of suppliers % 0 0 0

Total hours of supplier safety training Hour 237 284 379

80Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Issue Indicator Category Quantitative Indicator Unit 2023 Data 2022 Data 2021 Data

Total training hours Hour 21245 20768 19436

Training participation hours per capita Hour 4.50 4.00 3.50

Total training hours of male employees Hour 12534 12668 11855

Employee t ra in ing

hours

Training hours per male employee Hour 4.50 4.02 3.51

Talent Training and

Development Total training hours of female employees Hour 8710 8099 7580

Training hours per female employee Hour 4.50 3.96 3.49

Total employees who participate in training and

assessment Person 8005 9042 10484

Employee training and

assessment Total employee who passed the assessment Person 8005 9042 10484

Training assessment pass rate % 100% 100% 100%

Total number of employee satisfaction

questionnaires distributed Copy 4974 5596 5553

Employee Survey Employee satisfaction Questionnaire recovery rate % 100 100 100

Employee satisfaction result % 97% 89% 99%

81Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Issue Indicator Category Quantitative Indicator Unit 2023 Data 2022 Data 2021 Data

Overall suppliers Number of suppliers 1338 1333 1324

Raw material suppliers 144 142 139

Equipment suppliers 180 176 168

Supplier category

management Non-production suppliers 211 207 200

Tier 1 suppliers (direct suppliers) 783 790 801

Non Tier 1 suppliers (indirect suppliers) 20 18 16

Supplier assessment coverage rate % 38 37 36

Supplier assessment

Supplier assessment pass rate % 98 98 98

Supplier

Management Percentage of suppliers who have signed the Code

of Conduct for Suppliers % 100 100 100

Percentage of suppliers who have signed

agreements containing the environment and labor % 100 100 100

requirements clause

Number of suppliers who have conducted social

impact assessments 289 284 277

Number of suppliers who have conducted

Sustainable environmental impact assessments

289284277

procurement Number of suppliers who have been identified as

having actual and potential significant negative 0 0 0

social impacts

Number of suppliers who have been identified as

having actual and potential significant negative 0 0 0

environmental impacts

Percentage of the Company’s internal procurement

staff who have passed the sustainable procurement % 100 100 100

training

82Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Issue Indicator Category Quantitative Indicator Unit 2023 Data 2022 Data 2021 Data

Number of patents held pcs 1346 1475 1328

Number of invention patents held pcs 356 394 397

Number of new patents in a year pcs 213 250 289

Intellectual Property Intellectual property

Number of patents under review pcs 565 640 635

Number of copyrights held pcs 0 2 2

Number of trademarks held pcs 106 138 138

Number of confirmed network safety incidents Case 0 1 1

Number of network safety training sessions Session 5 4 2

Network Safety Network safety

Number of network safety emergency response

drills Time 0 0 0

Number of confirmed network safety incidents Case 0 0 0

Social contribution value per share RMB 3.23 2.61 2.36

Public Welfare Investment in public welfare

Investment in social contribution RMB 0’000 38.88 4.99 10.38

83Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Governance

Issue Indicator Category Quantitative Indicator Unit 2023 Data 2022 Data 2021 Data

Total of corruption incidents under investigation Case 1 0 0

Total of confirmed corruption incidents Case 2 2 0

Corruption incidents Total of resolved corruption incidents Case 2 2 0

Number of personnel involved in resolved

corruption incidents Person 4 2 0

Total of terminations or non-renewals of

contracts with business partners due to Case 2 1 0

corruption-related violations

Anti-Corruption Number of anti-corruption training sessions Session 1 0 0

Anti-Corruption Training

Number of employees participating in anti-

corruption training Person 430 0 0

Number of employees who have signed the

Integrity Commitment Person 451 158 183

Percentage of employees who have signed the

Percentage of employees who Integrity Commitment % 10 3 3

have signed the Commitment

on Code of Conduct Number of suppliers who have signed the Anti-

bribery Committee Person 579 542 498

Percentage of suppliers who have signed the

Anti-bribery Committee % 43 41 38

Number of violations of environmental laws and

regulations pcs 0 2 0

Environmental violations

To t a l f i n e s i m p o s e d o n v i o l a t i o n s o f

environmental laws and regulations RMB (in 0000) 0 4.90 0

Compliance Violations of unfair competitions pcs 0 0 0

Operation Unfair competition Total fines imposed on violations of unfair

competitions RMB (in 0000) 0 0 0

Number of violations of social laws and

regulations pcs 1 2 0

Violations of laws

Total fines imposed on violations of social laws

and regulations RMB (in 0000) 0.20 0.21 0

84Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

GRI Contents Index —“Reporting with reference to GRI Standards”

GRI Standard Disclosure Location

Solex has reported the information cited in this GRI Content Index for the period from January 1 2023 to December 31 2023 with reference to the GRI

Statement of use

Standards.GRI 1 used GRI 1: Foundation 2021

2-1 Organizational details About this Report

2-2 Entities included in the organization’s sustainability reporting About this Report

2-3 Reporting period frequency and contact point About this Report

2-4 Restatements of information About this Report

2-6 Activities value chain and other business relationships About Solex

2-7 Employees Common Growth with Employees

GRI 2: General Disclosures 2021 2-9 Governance structure and composition Efficient and Regulated Governance

2-11 Chair of the highest governance body See the Annual Report

2-16 Communication of critical concerns ESG Management

2-23 Policy commitments About this Report

2-27 Compliance with laws and regulations Efficient and Regulated Governance

2-28 Membership associations Promotion of Industry Exchange

2-29 Approach to stakeholder engagement ESG Management

85Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

GRI Standard Disclosure Location

3-1 Process to determine material topics ESG Management

GRI 3: Material Topics 2021 3-2 List of material topics ESG Management

3-3 Management of material topics ESG Management

GRI 201: Economic Performance 2016 201-1 Direct economic value generated and distributed See the Annual Report

GRI 205: Anti-Corruption 2016 205-2 Communication and training about anti-corruption policies and procedures Anti-corruption and Integrity in Operation

301-1 Materials used by weight or volume Key Performance

GRI 301: Materials 2016 301-2 Recycled input materials used Key Performance

301-3 Reclaimed products and their packaging materials Green Home Co-creation

302-1 Energy consumption within the organization Key Performance

302-3 Energy intensity Key Performance

GRI 302: Energy 2016

302-4 Reduction of energy consumption Energy and Resource Conservation

302-5 Reductions in energy requirements of products and services Energy and Resource Conservation

303-2 Management of water discharge-related impacts Energy and Resource Conservation

GRI 303: Water and Effluents 2018 303-4 Water discharge Energy and Resource Conservation

303-5 Water consumption Energy and Resource Conservation

GRI 306: Waste 2020 306-3 Waste generated Prevention and Control of Three-waste Pollution

GRI 308: Supplier Environmental Assessment 2016 308-1 New suppliers that were screened using environmental criteria Stable Procurement Supply

86Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

GRI Standard Disclosure Location

401-1 New employee hires and employee turnover Key Performance

GRI 401: Employment 2016 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees Common Growth with Employees

401-3 Parental leave Common Growth with Employees

403-1 Occupational health and safety management system Common Growth with Employees

403-2 Hazard identification risk assessment and incident investigation Common Growth with Employees

403-5 Worker training on occupational health and safety Common Growth with Employees

GRI 403: Occupational Health and Safety 2018 403-6 Promotion of worker health Common Growth with Employees

403-7 Prevention and mitigation of occupational health and safety impacts directly linked by

business relationships Common Growth with Employees

403-8 Workers covered by an occupational health and safety management system Common Growth with Employees

403-9 Work-related injuries Common Growth with Employees

GRI 404: Training and Education 2016 404-1 Average hours of training per year per employee Common Growth with Employees

GRI 405: Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees Efficient and Regulated Governance and Common Growth with Employees

GRI 414: Supplier Social Assessment 2016 414-1 New suppliers that were screened using social criteria Stable Procurement Supply

GRI 416: Customer Health and Safety 2016 416-1 Assessment of the health and safety impacts of product and service categories Offer of Top-notch Customer Service

GRI 417: Marketing and Labeling 2016 417-1 Requirements for product and service information and labeling Offer of Top-notch Customer Service

87Xiamen Solex High-tech Industries Co. Ltd. Opening Responsible Governance Hand in Hand with Responsibilities for

and Stable Development Society the Green Earth Postscription

Reader Feedback

Question Excellent Good Mediocre Subpar Bad

Dear reader

Thank you for sparing time to read the 2023 Environmental Social and What's your overall impression on this report

Governance (ESG) Report of Xiamen Solex High-tech Industries Co. Ltd.To provide you and other stakeholders with more valuable information and Does this report respond to the issues that the stakeholders

improve our capabilities of performing the corporate social responsibility we concern about or disclose the information as required

are looking forward to your comments and suggestions.How do you think of Solex in performing the economic

Choices (Please tick the appropriate box √) responsibility

How do you think of Solex in performing the environmental

responsibility

How do you think of Solex in security management

How do you think Solex in performing the employee

responsibilities

How do you think of Solex in performing the community

responsibilities

Are the information indicators and data disclosed in the

report clear accurate and complete

Do you find content arrangement and layout design of the

report reader-friendly 是 否

Open Question:Do you have any comments and

suggestions for Xiamen Solex High-tech Industries Co.Ltd. in performing social responsibility or preparing the

report

88

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