Hubei Xingfa Chemicals Group Co. Ltd. 2025
Address: Room 3313 Xingfa Building No. 188-9 Yanjiang Avenue
Wujia District Yichang City Hubei Province China Environmental Social and
Governance Report
Tel: 0717-6760939
Email: dmb@xingfagroup.com Hubei Xingfa Chemicals Group Co. Ltd. Stock Code : 6001412025 Environmental Social and Governance Report
Contents
010304
About This Report 01 Prioritizing Ecology to Win-Win Collaboration Steady Progress for
Message from the Chairman Chart a Green Blueprint Build Better the Long Term 03
Opportunities in Clean Technology 27 Communities Together Consolidating the
About Xingfa Group 05 Building Circular Economy 28 Protection of Employee Rights and Interests 79 Foundations of
Response to Climate Change 31 Employee Training and Development 86 Development
Environmental Compliance Management 35
Performance Highlights in 2025 17 Occupational Health and Safety 89
Energy Utilization 43 Joining Forces for Beneficial Action Standardizing Corporate Governance95 99
Water Resources Utilization 48 Protection of Investors' Rights and
Sustainability Governance 19 Interests
101
Materials Management 51
Compliance Operations and Risk 103
Sustainable Development Goals and Vision 19 Ecological Environmental Protection 52
Management
Upholding Business Ethics
Sustainability Governance 21 107
Sustainable Development Capacity Building 22
Stakeholder Engagement 23
Material Issues Management 24
02 Appendix
ESG Performance Overview 111
Innovation and Quality Indicator Index 121
Feedback Form 124
Improvement Driving
Industrial Upgrades
Innovation-Driven 55
Product and Service Safety and Quality 65
Sustainable Supply Chain 72
Information Security and Privacy Protection 752025 Environmental Social and Governance Report
About This Report
This Report is the seventeenth Environmental Social and Governance (“ESG”) Report issued by Hubei Xingfa Chemicals Group Co. Ltd. (“Xingfa Appellation DescriptionGroup” or the “Company”). Prepared in accordance with the principles of objectivity standardisation transparency and comprehensiveness the
Report presents Xingfa Group’s 2025 ESG philosophy and performance across the environmental social and governance dimensions.For ease of reference “Hubei Xingfa Chemicals Group Co. Ltd.” may be referred to as “Xingfa Group” “the Company” or “we”. References to “theState” and “the Government” denote the People’s Republic of China and its administrative authorities.Reporting Scope
Company Abbreviation Full Company Name
This Report covers Hubei Xingfa Chemicals Group Co. Ltd. its subsidiaries and directly affiliated institutions. Unless otherwise specified the
reporting scope aligns with that of the Company’s Annual Report. Xingfa Group the Company the Joint-Stock Company We Hubei Xingfa Chemicals Group Co. Ltd.Yichang Xingfa Yichang Yingfa Group Co. Ltd.Jixing Chemical Hubei Jixing Chemical Group Co. Ltd.Reporting Period Xiangyang Xingfa Xiangyang Yingfa Chemical Co. Ltd.This Report covers the period from 1 January 2025 to 31 December 2025 (the “Reporting Period”). To enhance comparability and provide Xinjiang Xingfa Xinjiang Yingfa Chemical Co. Ltd.forward-looking insight certain sections reference earlier years or include forward-looking statements. The Report is published annually in line with
the fiscal year. Hubei Xingrui Hubei Xingrui Silicon Materials Co. Ltd.Trisun Chemical Hubei Trisun Chemical Co. Ltd.Period of Impact Inner Mongolia Xingfa Inner Mongolia Xingfa Technology Co. Ltd.Longma Phosphorus Industry Weng’an Longma Phosphorus Industry Co. Ltd.Impact periods in this Report are classified as short term (within 1 year) mid-term (1 to 5 years) and long term (more than 5 years).Baokang Chufeng Baokang Chufeng Chemical Co. Ltd.Sinophorus Electronic Hubei Sinophorus Electronic Materials Co.Ltd.Data Sources and Reliability Assurance Guizhou Xingfa Guizhou Xingfa Chemical Co. Ltd.The data in this Report are drawn from Xingfa Group’s original records publicly available government data annual financial statements internal Yidu Xingfa Yidu Xingfa Chemical Co. Ltd.statistical reports third-party surveys and third-party assessment interviews. The financial figures are denominated in Renminbi (RMB); In the event
of any discrepancy with the audited financial statements the financial statements shall prevail. AMCO PT Adil Makmur Fajar
Hong Kong Xingfa Xingfa (Hong Kong) Imp.&Exp. Limited
Preparation Basis
International Sustainability Standards Board (ISSB): International Financial Reporting Standard S1 — General Requirements for Disclosure of Sustainability-related Financial Access to this Report
Information (IFRS S1)
International Sustainability Standards Board (ISSB): International Financial Reporting Standard S2 — Climate-related Disclosures (IFRS S2) This Report can be viewed or downloaded on Shanghai Stock Exchange website (https://www.sse.com.cn) CNINFO (http://www.cninfo.com.cn) or Xingfa Group website (https://www.xingfagroup.com).United Nations Sustainable Development Goals (SDGs)
Global Reporting Initiative: Global Reporting Initiative Sustainability Reporting Standards (GRI Standards)
Sustainability Accounting Standards Board (SASB): Sustainability Accounting Standards Feedback
Ministry of Finance of the People’s Republic of China: Corporate Sustainability Disclosure Standards — Basic Standards (Trial) If you have any comments or suggestions regarding this Report please contact us through the channels below.State-owned Assets Supervision and Administration Commission of the State Council: Study on the Preparation of ESG Special Reports of Listed Companies
Controlled by Central-State-owned Enterprises Email: dmb@xingfagroup.com
Shanghai Stock Exchange: Self-Regulatory Guidelines for Listed Companies No. 14 — Sustainability Report (Trial) Tel: 0717-6760939
Shanghai Stock Exchange: Self-Regulatory Guidelines for Listed Companies No. 4 — Preparation of Sustainability Reports Address: Room 3313 Xingfa Building No. 188-9 Yanjiang Avenue Wujia District Yichang City Hubei Province China
01 022025 Environmental Social and Governance Report
Message from the Chairman
Dear shareholders partners and friends from all sectors We reinforced our institutional foundations through
robust compliance and transparency.As the global transition to a green economy accelerates climate change and resource scarcity have become defining
challenges for humanity. The chemical industry is undergoing a profound shift from scale expansion to green and sustainable We consistently refined our corporate governance framework
development. We are fully aware that only by deeply embedding ESG principles into every facet of our operations can we promoted boardroom diversity and deeply embedded ESG
ensure resilient long-term growth amidst shifting global dynamics. Over the past year despite a complex and volatile principles into our business strategy. By strengthening risk
economic environment we maintained robust business growth while making solid progress toward high-quality develop- control and compliant operations we ensure that the Company
ment. operates strictly within legal and ethical boundaries. We value
every channel of communication with the capital market.Through frequent multi-channel investor relations initiatives
Driven by innovation we expanded our technological self-reliance over the past year. and maintaining high standards of information disclosure we
rigorously safeguard investor interests.We achieved a series of breakthroughs in new materials fine chemicals and new energy battery materials. Our silicone
leather was successfully applied at Guangzhou Baiyun International Airport and a succession of our domestic-substitution Looking ahead we will continue to collaborate with all
fine chemicals entered the market. We also optimized our quality management system to ensure environmental compliance stakeholders to deepen our exploration in carbon peaking and
and safety throughout the product lifecycle delivering reliable eco-friendly products and services to our customers. The neutrality green product R&D and rural revitalization. With
Company’s nomination for the 5th China Quality Award stands as the highest endorsement of our commitment to lean unwavering determination we will drive the execution of our
quality management. ESG strategy contributing to our vision of building a world-class
fine chemical enterprise where humanity and nature coexist in
harmony.We advanced our green blueprint by fostering a highly efficient circular economy. Chairman of Hubei Xingfa Chemicals Group Co. Ltd.Moving beyond mere emission reduction we integrate the philosophy that “there is no absolute waste only misplaced Li Guozhangresources” across our entire value chain. Our circular economy model operates at peak efficiency: the phosphine tail gas
utilization project yielded exceptional results and the recovery of electronic-grade sulfuric acid waste liquid successfully
drove both environmental and economic gains. We maximize resource efficiency to fortify Xingfa’s sustainable foundation.Our green mines have achieved 100% utilization of waste rock and tailings alongside complete greening of mining areas;
notably the Shukongping Phosphate Mine was selected as a landmark Green Mine Case by the Ministry of Natural Resourc-
es. Furthermore we completed carbon footprint certifications for 26 products obtained life-cycle assessment (LCA) certifi-
cations for 4 products and reduced our greenhouse gas (GHG) emission intensity by 6% year-on-year.Embracing shared growth we worked hand-in-hand with our stakeholders to build a better society.Through a comprehensive compensation and benefits framework and tailored employee training programs we remain
dedicated to caring for empowering and sharing our growth with our workforce. Our responsibility extends far beyond our
facility gates into local communities. In rural areas our on-site task forces have provided targeted industrial assistance and
infrastructure support helping Shukongping and Maocaoping villages consolidate their poverty alleviation achievements and
extending our corporate warmth to every corner. During the “14th Five-Year Plan” period our cumulative charitable
donations exceeded RMB 300 million reinforcing our commitment to sharing development milestones with society.
03 042025 Environmental Social and Governance Report
Organizational
About Xingfa Group Corporate Culture
With global-leading fine
phosphorus chemicals at
its core the Company
committed to becoming a
Company Profile globalized operator in green circular develop- Corporate Vision:ment. Corporate Values: Striving to be recognized as “China’s Innovation Integrity ResponsibilityHubei Xingfa Chemicals Group Co. Ltd.(“Xingfa Group” or the “Company”) Mightiest and Most World Renowned Endeavorfounded in 1994 and is registered in Xingshan County Yichang City Hubei 2025 International Fine Chemicals Enterprise”
Province was listed on the Shanghai Stock Exchange in 1999 (Stock Code: Fortune China 500
600141.SH). The Company has evolved into a global leader in phosphorus-based
fine chemicals committed to green and circular development.Xingfa Group focuses on the core business of fine phosphorus chemicals while 460th
actively expanding the Company’s integrated operations across phosphorus silicon
sulphur salt and fluorine to build an upstream-to-downstream industrial chain. Corporate Mission:
Over the years Xingfa Group has established an industrial structure anchored in Technology-oriented leading the global fine phosphorus chemical industry thus creating value
resources and energy centred on fine chemicals and supported by related for society shareholders employees and partners
industries. The Company is now accelerating Xingfa Group’s transformation into a technology-driven green chemical and new materials
enterprise. During the Reporting Period the Company’s principal products included phosphate rock specialty chemicals agrochemicals
organosilicon products fertilisers and new energy materials serving sectors such as food agriculture integrated circuits automotive
construction and chemicals. The Company ranked 460th on the 2025 Fortune China 500 list.Organizational Structure
General
Meeting of
Shareholders
Board of Directors
Development Strategy
Committee
Board Secretary General Manager Audit Committee
Nomination Remuneration and
Deputy General Manager Assessment Committee
Functional Departments Business Empowerment Center Business Divisions
Various Production and
Operating Units
0506
Hubei Sinophorus Electronic Materials Co. Ltd.and its Subsidiaries
Organosilicon Materials
Business Division
Pesticide Business Division
New Energy Materials
Business Division
Chemical Fertilizer
Business Division
Phosphorus & Sulfur
Business Division
Mineral Business Division
Central Research Institute
Marketing Center
Supply Chain Management Center
Production Management Center
Digital and Intelligent
Management Center
Audit and Compliance Department
Strategic Investment Department
Human Resources Department (HR)
Enterprise Management Department
Finance Department
General Manager’s Office
Board Secretary’s Office2025 Environmental Social and Governance Report
Business Operations Company Advantages and Industry Position
The Company strengthens innovation-driven development and accelerates the green high-end and international transformation of the industrial New Energy Other Frontier Fields
chain developing products in 9 categories 30 series and 723 varieties including food-grade pharmaceutical-grade and electronic-grade Xingfa Group is establishing a new The industrialization of black phospho-
products and participated in the formulation and revision of 119 international national and industry standards. energy battery material cluster by accel- rus stands out having achieved contin-
erating project construction and secur- uous production at the hundred-kilo-
ing key process breakthroughs in LMFP gram scale. Its application ecosystem is
(Lithium Manganese Iron Phosphate) rapidly expanding catalysts have been
and all-vanadium redox flow batteries put into industrial use and the R&D
alongside mastering battery-grade application scenarios cover fields such
About 625 million tonnes of phosphate resources with mining rights (including 580 million tonnes within the consoli- lithium fluoride technologies. as phosphorus-carbon anode materials
dation scope and 45 million tonnes of equity-adjusted phosphate resources from the equity investment in Yi’an optoelectronic chips biopharmaceuti-
Industrial). cals and commercial aerospace.New Materials Achieved key positioning and domestic
Phosphate 258 million tonnes of phosphate resources in the exploration and exploration-to-mining transition stages (equity-ad- Successfully developed products such substitution in high-barrier specialty as electronic-grade phosphoric acid Emerging justed). chemicals such as high-end phosphat-Rock sulfuric acid hydrogen peroxide and Segments ing agents and ethanethiol.etching solutions. Among them
6.422 million tonnes/year of designed equity production capacity of phosphate rock (including 5.85 million tonnes/- Sodium hypophosphite production electronic-grade phosphoric acid and
year within the consolidation scope and 0.572 million tonnes/year of equity-adjusted capacity from the equity capacity is among the global leaders sulfuric acid have broken foreign tech- with product categories covering indus-
investment in Yi’an Industrial). nology blockades with industry-leading trial grade and recrystallized grade and
production capacity. The technologies a dedicated production line formed for
related to phosphoric acid production memory device components.won the Second Prize of the National
Science and Technology Progress Lab-scale R&D of solid-state electro-
Electronic Chemicals: 60000 tonnes/year of electronic-grade phosphoric acid 100000 tonnes/year of electron- Award. Product quality is world-class ly tes has been completed and
ic-grade sulfuric acid 60000 tons/year of electronic-grade hydrogen peroxide 54000 tonnes/year of functional wet and multiple products have achieved construction of the battery-grade phos-
electronic chemicals 20000 tonnes/year of co-produced electronic-grade aqueous ammonia and 10000 tonnes/- stable supply to domestic 12-inch wafer phorus pentasulfide project is accelerat-
year of electronic-grade ammonia gas. fabs making the Company a main- ing supported by matching capacity of Specialty stream supplier to many semiconductor ultra-high-purity yellow phosphorus
Chemicals enterprises worldwide. with leading purification technology.Food Additives: food-grade phosphate production capacity exceeds 150000 tonnes per year.Industrial Solvents and Others: 60000 tonnes/year of dimethyl sulfoxide 61000 tonnes/year of sodium hypophos-phi Glyphosate Phosphate Fertilizer
te total of 10000 tonnes/year of the phosphating agent series 3000 tonnes/year of ethanethiol. Our capacity for techni- We have integrated both Organosilicon
cal-grade glyphosate ranks w e t - p r o c e s s a n d Xingfa ranks among the top tier in
first in China and second thermal-process produc- China’ s silicone industry. Anchored
worldwide. A new green tion lines forming a in the Yichang New Material Indus-
high-efficiency synthesis mineral-to-fer t i l izer trial Park we drive the integration
Glyphosate process has overcome major industrial chain that of our phosphorus and silicone 230000 tonnes/year of glyphosate technical 117000 tonnes/year of supporting formulations 170000 tonnes/year of environmental challenges in encompasses ore benefi- chains–silicon having built a
Series Products supporting yellow phosphorus capacity 460000 tonnes/year of chlor-alkali capacity. the industry. With leading Bulk Chemical ciation purification of 600000 tonnes/year organosilicon
domestic capabilities in cost wet-process phosphoric Products monomer unit supported by
control and clean produc- ac id and fe r t i l i ze r capacities of 120000 tonnes/year
tion the Company exclusive- production. We have for methyl vinyl silicone rubber
ly developed the FAO stan- been des igna ted a 120000 tonnes/year for hydroxyl
1 million tonnes/year of phosphate ammonium 400000 tonnes/year of compound fertilizer 680000 tonnes/year of dard for glyphosate which “National Demonstration terminated polydimethylsiloxaneFertilizers supporting wet-process phosphoric acid (as 100% H3PO4) 150000 tonnes/year of refined purified phosphoric acid has passed the Food and Base for the Comprehen- 60000 tonnes/year for sealant
(as 100% H3PO4) 2 million tonnes/year of sulfuric acid 400000 tonnes/year of synthetic ammonia. Agriculture Organization of s i v e U t i l i z a t i o n o f and 56000 tonnes/year for silicone the United Nations review Medium- and Low-Grade oil achieving industrial synergyand been officially released. Phosphate Ore.” with glyphosate.
6 million tonnes/year of organosilicon monomer unit 120000 tonnes/year of supporting 110 gum 120000 tonnes/-
Organosilicon year of 107 gum 60000 tonnes/year of sealant 56000 tonnes/year of silicone oil 5000 cubic meters/year of Hydropower Resources
Series Products aerogel550 tonnes/year of microcapsules 6 million meters/year of silicone leather 150000 square meters/year of Phosphate and Silica Mineral
silicone foam 50000 tonnes/year of photovoltaic encapsulant. Resources Overseeing smal l hydropowerLeading the consolidation of phos- “Integrated resources in Xingshan with totalphate resources in Hubei Province Mining-Power- hydropower stations installed capaci-with 6 green mines under its Chemicals” ty of 180300 kW and annual powers
umbrella providing ample resource generation of 500 million kWh; 13 Circular Economy
security for the development of distributed photovoltaic power
New Energy phosphate chemicals; concurrently stations have been built across the 100000 tonnes/year of 80000 tonnes/year of 100000 tonnes/year of lithium
Materials ferric phosphate lithium iron phosphate dihydrogen phosphate advancing the strategic layout of
basin with a total installed capacity
supporting resources such as silica. of 1828 kW thereby helping reduce
energy costs.
07 082025 Environmental Social and Governance Report
Development History
2012
Phase III of Yichang Fine Chemical Park broke ground focus-
1978 ing on expanding organosilicon monomers and downstream
products glyphosate technical grade and formulations and
The first large-scale hydropower station the Houzibao organophosphorus water treatment agents
Station has been completed and commenced power genera-
tion. 2005 Yidu Green Ecological Industrial Park completed and commis-
sioned 2024
1984 Established Hubei Trisun Chemical Co. Ltd. Successfully acquired BON ARGO Ltd. achieving full
The Company’ s predecessor the Xingshan Chemical Plant ownership of Xingfa Brazil Co. Ltd.; established BON
was established 2015 ARGO (Singapore) PTE. Ltd. and Xingfa Australia Co.
2006 Ltd. bringing the total number of overseas platforms Completed the acquisition of Jixing Chemical to 10 entities basically covering major global markets
1989 Acquired Yichang Heyou Company and entered the phos- further improving the global layout.
phate fertilizer industry
The Xingshan Chemical Plant was renamed Hubei Xingshan 2017
Chemical General Plant
2007 Sinophorus Electronic successfully developed a one-step
1994 absorption process for producing electronic-grade sulfuric
Jointly formed Chongqing Xingfa Jinguan Chemical Co. Ltd. acid 2025
Hubei Xingfa Chemicals Co. Ltd. was established with Shanghai Baijin Group and commenced construction of
an annual output1ten-thousand-tonne dimethyl sulfoxide proj- 2018 On January 22 the subsidiary Hubei Sinophorus Elec-ect tronic Materials Co.Ltd. (stock abbreviation: Sinopho-
1995 Acquired the former Inner Mongolia Tenglong Bio Fine rus Electronic stock code: 688545.SH) was officially
Chemical Co. Ltd. and renamed it Inner Mongolia Xingfa listed on the STAR Market of the Shanghai Stock
Xingshan Xingsheng Co. Ltd. was established becoming the 2008 Technology Co. Ltd. Exchange.first phosphate mine to be opened
Established Hubei Sinophorus Electronic Materials Co.Ltd. Sinophorus Electronic achieved a major breakthrough in elec- On September 16 the Company received a nomina-
tion for the Fifth China Quality Award Nomination
Phase I of the Yichang Fine Chemicals Park was completed tronic-grade phosphoric acid technology reaching an interna-
1996 building 50000 tonnes/year glyphosate 15000 tonnes/year
tional leading level
of ion-exchange membrane caustic soda20000 tonnes/yearRenamed from “Hubei Xingfa Chemicals Co. Ltd. glycine 15000 tonnes/year of food-grade phosphates and 2020” to “Hubei Xingfa Chemicals Group Co. Ltd.” other projects The project “Key Production Technologies for Ultra-High-Puri-ty Electronic-Grade Phosphoric Acid for Chips and High-Se-
2009 lectivity Etching Solutions” won the Second Prize of the 2019
1999 National Science and Technology Progress Award for the yearEstablished Yidu Xingfa Chemical Co. Ltd.
The Company was listed on the Shanghai Stock Exchange 2021
with the stock abbreviation “Xingfa Group” and the stock
code 600141.SH 2010 Hubei Three Gorges Laboratory was inaugurated
Yichang Xingfa Group Co. Ltd. was formed 10000 tonnes/year of electronic-grade phosphoric acid
co-production and 20000 tonnes/year of food-grade phos- 2023
phoric acid project of Sinophorus Electronic commissioned
2003 Established Xingfa USA Co. Ltd. The Company acquired PT Adil Makmur Fajar
The Company successively established production bases in
Shennongjia and Baokang Xiangyang 2011
Baokang Chufeng Chemical Co. Ltd. was established
Established Xiangyang Xingfa Chemical Co. Ltd.
2004 60000 tonnes/year of organosilicon monomer project of Yichang Fine Chemical Park completed and commissioned
Signed an agreement with the former Yichang State Devel-
opment Investment (original Yichang) to acquire certain
assets of the former Phosphate Group formed the former
Yichang Chu Phosphate Chemical Co. Ltd. and built the Chu
Phosphate Industrial Park
09 102025 Environmental Social and Governance Report
Focused on fine phosphorus chemicals Xingfa Group integrates phosphorus silicon sulfur salt and fluorine to refine its
vertically integrated value chain. By leveraging unique industry synergies—namely mine-electricity-chemical integration
phosphorus-silicon-salt co-development and mine-chemical-fertilizer coupling—we are accelerating our transformation
into a tech-driven green chemical advanced materials enterprise.Main Raw Materials Main Intermediate Products Main Downstream Products Main Downstream Applications
Natural Gas Sulfuric Acid Refined Anhydrous Hydrogen Electronic-grade Electronic-grade Electronic-grade Wet electronic chemicals are widely used in processes such Phosphoric Acid Fluoride Phosphoric Acid Sulfuric Acid Ammonia Water as etching cleaning developing and stripping in the manu-
Electronic-grade Electronic-grade Electronic-grade facturing of integrated circuits and LCD panels.Hydrogen Peroxide Hydrofluoric Acid Mixed Solution
Methanol
Yellow Phosphorus Wet-process Phosphoric Acid Dimethylphosphite
Battery cathode materials are widely applied in fields such as
Ferric Phosphate Lithium Iron Lithium Dihydrogen Phosphate Phosphate EV batteries and large-capacity energy storage batteries.Sulfur
Phosphorus Thermal-process Organosilicon
Trichloride Phosphoric Acid Crude Monomer
Food-grade Industrial-grade High-Grade
Phosphates Phosphates Phosphating Agent High-value fine phosphoric chemicals are widely used in fields
Phosphate Rock Sodium Sodium Phosphorus-based such as food pharmaceuticals pesticides carbon fiber and
Hypophosphite Pyrophosphate Flame Retardant cables mainly as additives solvents etc.Chlor-Alkali Synthetic Ammonia Methyltrichlorosilane Dimethyl
Sulfoxide (DMSO) Dimethyl Sulfide Dimethyl Disulfide
Coal Green low-toxicity herbicides are mainly used for efficient
weeding of bulk economic crops such as soybeans corns
Methyl Chloride DMC Methylhydrogendi- Glyphosate 24-D Technical chlorosilane Products Material Nicosulfuron cottons and cassavas.Salt
Hydroxyl Terminated Photovoltaic Construction
Industrial Silicon Glycine Trimethylchlorosilane Polydimethylsiloxane Adhesive Sealant
New organosilicon materials are widely used in sectors such
Methyl Vinyl High-temperature
Silicon Ore Polydimethylsiloxane as electronics photovoltaics aerospace automotives con-Silicone Rubber Rubber Compound
struction medical care nursing and daily chemicals as
Vinyl Silicone Oil Liquid Silicone Aerogel heat-resistant bonding materials.Rubber
Dimethyl Sulfide Hydrogen Peroxide
Hydroelectric Photovoltaic Microcapsule Silicone Leather Silicone Foam
and other Clean Energy
and Purchased Power
Monoammonium Diammonium Compound Phosphate fertilizers and compound fertilizers are widely used
Phosphate (MAP) Phosphate (DAP) Fertilizer in various crop planting processes.Own Purchased Self-made & externally Purchased
1112
Circular Industrial Chain2025 Environmental Social and Governance Report
Global Layout
BON AGRO LTD. Xingfa Europe PT Adil Makmur Fajar Xingfa USA Xingfa Argentina Xingfa Brazil
Legend Xingfa Hong Kong
Vietnam Office
State
Boundary
Undetermined BON AGRO Country Xingfa Australia
Boundary (SINGAPORE) PTE. LTD.
1:57 000 000 BON AGRO
(C?te d’Ivoire) LTD.
Review Number: GS(2020)4392
Supervised by the Ministry of
Natural Resources
Aksu
Wuhai
Tianjin
Huixian
Taizhou
Yichang
Ngawa Headquarters Shanghai
Xiangyang Xingfa Group has built an expansive industrial footprint establishing manufac-
Chongqing Tianmen turing bases across China (including Hubei Chongqing Jiangsu Xinjiang
Guizhou Sichuan Henan and Inner Mongolia) and in Indonesia. Our global
Fuquan Weng’an marketing platforms span major economies such as Brazil the US Germany
Guangzhou Argentina Vietnam Hong Kong SAR Singapore Australia Ghana and C?te
d’Ivoire. By forging long-term partnerships with Fortune Global 500 leaders—
Hong Kong including Dow Unilever Intel SK Hynix and Coca-Cola—and exporting to 131 exporting to
countries and regions Xingfa Group has solidly cemented its leading position in
the industry. 131countries and regions
13 142025 Environmental Social and Governance Report
Corporate Honors ESG Honors and Awards
ESG Awards ESG Rating
China Quality Award Nomination 2025 Hubei Provincial Science and 2025 Hubei Provincial Science and
-- Fifth China Quality Award Selection Technology Progress Award (First Class) Technology Progress Award (Third Class)
-- Hubei Provincial People’ s Government -- Hubei Provincial People’ s Government 2025 Listed 2025 Listed Companies and Recognition Committee Companies ESG Value High-Quality Development
Communication Award Excellent Practice Model -
-- Shenzhen Value Online Investor Relations
Information Excellent Paragon
Technology Co. Ltd. -- Chinese Securities Journal
Industry Associations
Association Name Positions Held
2025 China Petroleum and Chemical 2025 China Nonferrous Metals
Industry Federation Science and Industry Science and Technology
Technology Progress Award (Second Prize) Award (First Prize) Yichang City Advanced Collective China Petroleum and Chemical Industry Federation Vice President
-- China Petroleum and Chemical -- China Nonferrous Metals -- Yichang Municipal China Electronic Materials Industry Association Vice Chairman
Industry Federation Industry Association People’ s Government
China Chemical Mining Association Vice President
China Chamber of Commerce of Metals
Minerals & Chemicals Importers & Exporters Vice President
China Inorganic Salts Industry Association Vice President
China Nitrogen Fertilizer Industry Association Executive Director
China Pesticide Industry Association Executive Director
China Sulfuric Acid Industry Association Council Member
2024 Annual Report Earnings Special Contribution Award for
Briefing Excellent Practice for 2024 Golden Information Corporate Governance of the 20th China
China Phosphate and Compound Fertilizer Industry Association Vice Chairman
Listed Companies Disclosure Award Listed Companies Board of Directors Golden Roundtable Award China Chemical Environmental Protection Association Vice Chairman
-- China Association for Public Companies -- China Securities Journa -- Board of Directors Magazine Chemical New Materials Professional Committee of the
China Petroleum and Chemical Industry Federation Deputy Director Unit
China Association of Monitoring Chemical Substances Vice Chairman
Expert Committee Member Standards
China Fluorosilicone Organic Materials Industry Association Committee Member Regulatory Affairs and
Product Supervision Committee Member
China Pesticide Development and Application Association Vice President
China Association of Patent Protection Council Member
China Meat Association Vice President
2024 New Fortune Magazine Best Golden Dawn Investor Relations Award
Listed Companies Awards Winners List China Association for Quality Inspection Council Member
-- Capital Week
-- New Fortune Magazine China Association of Mineral Resources and Material Application Innovation Vice Chairman
Inorganic Salts Industry Association of China Phosphorus Chemical Subcommittee President
15 162025 Environmental Social and Governance Report
Performance Highlights in 2025
Environmental Performance Social Performance
Environmental Total Duration of
Protection Investmen 757.31RMB Million Number of Companies Certified under 8 Units Total Number of Employees Personsthe Energy Management System 14580 Employee Training 1423936 Hours
Number of Special 200Units Green Electricity 980 Million kWh Employees from Ethnic Minorities 1145 Persons Total Investment in Environmental Inspections Consumption Employee Training 28.285 RMB Million
Number of Hidden Hazards Number of Products Certified Proportion of Employees 7.85 % On-time Rectification Rate for 100 %
Investigated and Rectified 1109 Units for Life Cycle Assessment 4 Units from Ethnic Minorities Hidden Hazards Investigation
Number of General or Above Number of Products Certified Employee Social Insurance Coverage Rate 100 % Employee Physical 100 %
Sudden Environmental Incidents 0 Cases for Carbon Footprint 26 Units Examination Coverage Rate
Amount of Shares Subscribed under Occupational Disease
the Employee Stock Ownership Plan 26503 RMB 10000 Incidence Rate 0%
Industrial Performance Governance Performance
Total Number of Shareholders’ 3 Times Duration of Legal Innovation Number of Product Spot Checks Meetings Convened Training Conducted 88 Hours
Incentive Bonus 235.4 RMB Million by Third-party Institutions 210 Times
Number of Board Meetings Convened 6 Times Duration of Management’ s Participation in Anti-Corruption Training 43900Hours
Number of R&D Product Spot
Personnel 1749 Persons Check Pass Rate 100 % Board Special Committee Anti-Corruption Training
Meetings Convened 13 Times Coverage Among Management 100 %
Duration of Quality 29.89 Days Supplier Integrity Training Per Capita Agreement Signing Rate 100 % Number of Penalties Received for
Violations in Information Disclosure 0 Times
17 182025 Environmental Social and Governance Report
Sustainability Development Governance Build resilient infrastructure promote inclusivity; sustainable industrialization and foster innovationThe Company has established the Leading Group for Technical Innovation refining its R&D and innovation frameworks continu-
ously upgrading its independent R&D capabilities and exploring novel pathways for school-enterprise cooperation. During the
Reporting Period the Company’s R&D investment reached RMB 1.319 billion securing 4 major technical innovation
breakthroughs.Sustainable Development Goals and Vision
Reduce inequality within and among countries
Xingfa Group aligns its global vision of building a world-class fine chemical enterprise with a robust commitment to sustainable develop- The Company champions equality and inclusiveness resolutely opposing any form of discrimination. We are dedicated to
ment. Through continuous technical innovation we enhance our circular economy and maximize resource efficiency. Moving forward constructing a diverse equal and inclusive workplace environment ensuring that every single employee receives equitable
we will drive industry-wide sustainable practices generate shared economic and social value and lead the sector as a model of responsi- treatment.ble growth.Make cities and human settlements inclusive safe resilient and sustainable
The Company has formulated a quantitative indicator system and implemented monitoring for air emissions establishing air
End poverty in all its forms everywhere emission treatment systems to effectively mitigate the adverse environmental impacts of production exhaust gases. During the
The Company proactively participates in national Rural Revitalization and the “Belt and Road” Initiative extending comprehensive Reporting Period major air pollutants including nitrogen oxides and sulfur dioxide met compliance discharge standards;
technical financial and medical support to demonstrate corporate social responsibility through concrete actions. The Company has built a specialized waste management system selecting differentiated treatment methods based on the
varying properties of waste thereby ensuring an environmentally safe disposal process and minimizing environmental and health
risks.End hunger achieve food security improve nutrition and promote sustainable agriculture
The Company actively delivers green crop protection services to agricultural sectors in regions such as Southeast Asia Africa Ensure sustainable consumption and production patterns
and the Americas empowering the sustainable development of local economies and smallholder farmers. The Company has established a quality management system encompassing the entire product lifecycle signing the Quality
Management Objective Responsibility Statements with its respective accountable business units proactively advancing system
Ensure healthy lives and promote well-being for all at all ages certifications and guaranteeing the compliant delivery of qualified products through robust quality training and inspection regimes;
The Company prioritizes occupational health and safety enhancing employees’ safety awareness and cultivating a safe secure
and healthy working environment; Adhering to the information security management philosophy of “Full Participation Prevention First Continuous Improvement and Compliant Operations” the Company strengthens its information security and privacy protection capabilities through admin-
The Company newly built a “Home of Employees” gymnasium and actively organized sports meets and other staff events istrative controls such as information classification and the execution of cybersecurity training activities.effectively relieving occupational stress and enhancing the physical and mental well-being of our workforce.Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all Take urgent action to combat climate change and its impacts
The Company is dedicated to creating a scientific systematic and high-efficiency training framework providing tailored develop- The Company has established the Leading Group for Carbon Emission Management actively conducting carbon emission
ment paths for employees across all tiers to achieve self-value appreciation; verifications and carbon-related knowledge training. We have identified risks and opportunities in responding to climate change
We have established and perfected a robust digitalized training network setting up training schools cultivating internal lecturer and built a comprehensive risk identification assessment supervision and management process based on which the Company
teams and launching school-enterprise partnerships to lay a rock-solid foundation for high-quality corporate growth. formulated its Energy Conservation and Carbon Reduction Work Program. During the Reporting Period the Company and its subsidiaries had 8 entities included in the Hubei Regional Carbon Market and 2 entities included in the National Carbon Market.Achieve gender equality and empower all women and girls Conserve and sustainably use the oceans seas and marine resources for sustainable development
The Company actively cultivates and upholds a diverse and equal atmosphere placing particular emphasis on the protection and
advancement of women’s rights emphasizing gender equality and equal pay for equal work ensuring that female employees The hydropower stations have comprehensively implemented the ecological water release project cutting discharge openings at dams
enjoy full rights protection during employment and preventing any form of harassment and discrimination. channels and trash racks to give top priority to ecological water release thereby safeguarding the ecological environment.The Company launched the Yangtze River Protection Action comprehensively driving the “Five Major Projects” of closure transforma-
tion relocation pollution control and green restoration.Ensure availability and sustainable management of water and sanitation for all
By continuously optimizing and upgrading its wastewater treatment and management strategies the Company has effectively
reduced pollutant emissions during production. During the Reporting Period industrial wastewater achieved compliant discharge Protect restore and promote the sustainable use of terrestrial ecosystems; sustainably manage forests; combat desertification;
standards. halt and reverse land degradation; and curb the loss of biodiversity
Adhering to the philosophy of green development the Company has fulfilled its ecological protection commitments through
green mine construction and active participation in the Yangtze River Great Protection Initiative achieving a harmonious unity of
Ensure access to affordable reliable sustainable and modern energy for all ecological benefits and economic returns.The Company sets annual energy-saving and emission-reduction targets assigns responsibility to each production unit and
continuously tracks target achievement.The Company has established the Leading Group for Energy Conservation to conduct energy audits in accordance with energy Promote peaceful and inclusive societies for sustainable development provide access to justice for all and build effective
codes and standards successfully enhancing energy efficiency through multiple measures including energy-saving technical accountable and inclusive institutions at all levels
retrofits production process optimization energy-efficient equipment replacement and the utilization of renewable energy. The Company consistently enhances its governance capacity and risk management level to secure long-term corporate develop-
ment and maximize corporate interests stringently executing internal controls and risk management protocols to guarantee
steady and robust operations;
Promote sustained inclusive and sustainable economic growth full and productive employment and decent work for all The Company strictly eradicates any form of child labor and forced labor proactively safeguarding the legitimate rights and
Establishing and perfecting tax management systems and paying taxes in strict accordance with the law to support the govern- interests of workers and diligently practicing social responsibilities and ethical codes.ment in stimulating economic growth;
The Company builds a fair and reasonable compensation and benefits architecture along with a scientific performance appraisal
mechanism fully stimulating employee proactivity and innovative capabilities driving personal growth and facilitating the Strengthen implementation measures and revitalize the Global Partnership for Sustainable Development
achievement of strategic and operational targets to fortify the foundation for long-term development; The Company reinforces its close ties with investors constructing normalized communication channels and earnestly listening
The Company implements an Employee Stock Ownership Plan (ESOP) empowering employees with equity unlocking their full to the voices of all stakeholders; the Company focuses on enhancing supplier capabilities dedicating itself to collaborative growth
potential solidifying the talent base and boosting their sense of belonging and accountability to drive steady corporate growth. with partners. By setting up a comprehensive supplier management framework and digitalized management systems we maintain close cooperation and exchanges with suppliers to achieve mutual benefits and win-win outcomes.
19 202025 Environmental Social and Governance Report
Governance Framework for Sustainable Development Sustainable Development Capacity Building
In active response to the call for sustainable development Xingfa Group has seamlessly integrated ESG philosophies into its corporate To strengthen capacity building for sustainable development Xingfa Group systematically carried out special ESG training sessions. During the
strategic planning. We continuously optimize various management systems across the dimensions of environmental protection social Reporting Period 2 ESG training sessions were conducted with one focusing on ESG knowledge explanation and practice sharing and the other
responsibility and corporate governance while dedicating every effort to building a comprehensive and scientific organizational frame- focusing on the enhancement of ESG management capabilities.work. Concurrently the Company has amended the Detailed Rules for the Implementation of the Strategy Committee of the Board of
Directors clarifying the responsibilities of departments at all hierarchies to ensure the robust implementation of all initiatives. While
driving our own high-quality growth we contribute solid strength to the sustainable development of both society and the environment.Case: Report Meeting on Achievements of the Management Consulting Project
for Building a World-Class Enterprise and SAP Upgrade Training SessionIn June 2025 the Company held the “ReportBoard of Directors Meeting on Deliverables of the Management
Determining ESG strategic objectives; deliberating and approving material ESG matters and annual reports while Consulting Project for Building a World-Classcontinuously monitoring the progress of target achievements. Enterprise and SAP Upgrade Training.” In collaboration with Deloitte China and by
benchmarking against leading international
practices we systematically reviewed the
Development Strategy Committee Company’ s current status and enhancement paths in areas such as strategic management
Decision-Making Conducting research and proposing recommendations on material matters impacting corporate development corporate governance and supply chain man-
Level including long-term corporate development strategic planning major investment and financing initiatives asset
agement with a focus on 10 key sustainabili-
management and capital operations; taking charge of researching the Company’ s ESG strategic planning guiding ty-related management domains: strategic
the implementation of ESG strategies defining short- medium- and long-term targets while supervising work management corporate governance interna-
progress evaluating implementation effectiveness providing advisory guidance and reviewing relevant ESG docu- tionalization management supply chain man-
ments. agement financial management risk manage-
ment human resources management science
and technology innovation management digi-
tal management and marketing manage-
ment.ESG Office
Coordinating and implementing ESG work; establishing and perfecting the ESG management framework and ESG
risk management system; formulating the ESG indicator framework and defining its management protocols; organiz-
ing and supervising the ESG work of various departments; and compiling annual ESG reports. Case: ESG Specialized Training
Management
Level
In November 2025 the Company invited a professional consult-
ing firm to conduct specialized ESG training. Centered on core
ESG concepts and the latest domestic and international policy
trends the training provided improvement recommendations
benchmarked against industry best practices targeting the Com-
panys specific ESG shortcomings. This training marked a key step
for Xingfa Group in advancing its ESG work from compliant
Functional Departments and Subsidiaries disclosure toward refined and strategic management.Formulating departmental ESG work plans and supervising as well as evaluating the progress and outcomes;
assisting in the management of ESG risks and opportunities; communicating with stakeholders and responding to
their ESG appeals; and establishing an ESG information database to submit regular reports to the management
Executive team.Level
Xingfa Group’s Sustainability Governance Structure
21 222025 Environmental Social and Governance Report
Communication with Stakeholders Material Issues Management
Adhering to the principle of paying highly close attention to the opinions of various stakeholders Xingfa Group formulated and distrib-
uted survey questionnaires in alignment with its own actual conditions to widely listen to the voices of all parties. Furthermore the
Company builds normalized communication channels and joins hands with various forces to jointly promote the sustainable develop- Materiality Assessment Process
ment of the Company.In accordance with the assessment methods stated in the domestic and international disclosure standards such as the Shanghai Stock
Exchange Self-Regulatory Guidelines for Listed Companies No. 14 - Sustainability Report (for Trial Implementation) the GRI 3: Material Issues the Inter-
national Financial Reporting Sustainability Disclosure Standards No. 1 - General Requirements for Disclosure of Sustainability (IFRS IFRSS1) Xingfa
Stakeholders Demands and Expectations Communication and Response Group introduces the analysis perspective of impact materiality and financial materiality to identify and assess material issues in the following
steps:
Compliant Operations Policy Response Learn about the Conduct Preliminary
Company Background Issue Screening Assess the Materiality of Issue
Confirm Material
Issues
Lawful Tax Payment Information Disclosure
Identifying impacts Establishing a com- Impact Materiality Assessment: Systematically mapping Formulating definitive
Business Ethics and Anti-Corruption Supervision and Inspection
Government and risks and opportuni- prehensive pool of out the external impacts of each sustainability topic disclosure matrices ties based on a com- sustainability-related and conducting survey research and statistical analysis and topic inventories
Regulatory Authorities prehensive evaluation topics in strict accor- among diverse stakeholders via targeted question- for both impact mate-
consisting of global dance with relevant naires; riality and financial
megatrend analysis E S G r e p o r t i n g materiality and seam-
industry analysis and standards and guide- Financial Materiality Assessment: Evaluating the specif- lessly disclosing them
Social Media business model analy- lines. ic risks and opportunities of each topic based on key within the ESG report
Win-Win Cooperation sis. factors such as environmental/social impacts and based on their respec-
Customer Service Hotline business dependencies combined with expert judg- tive levels of signifi-
Driving Industry Development ment and internal risk registers to ultimately determine cance and priority.Suppliers and Partners Customer Satisfaction Survey financially material topics.General Meeting of Roadshows and
Protecting Shareholders’ Rights and Interests Shareholders Reverse Roadshows Material Issues Analysis Results
Risk Management E-Interaction Media Coverage The Company conducted a cross-sorting and prioritization analysis from the dual dimensions of “financial materiality” and “impact materiality” to
Investors and Shareholders Improving Corporate Governance Report Disclosure Results Briefing construct its core Materiality Matrix. Concurrently a total of 23 material topics were identified among which 6 topics possess double materiality
and 10 topics possess financial materiality.Investor Hotline Information Disclosure
High
Workers’ Congress Phone and Email Protection of Employees’ Legal Rights and Interests Occupational Health and Safety
Compensation and Benefits Employee Training and Development Product and Service Safety and Quality
Labor Union Face-to-face
Health and Safety communication Social Contribution Innovation-Driven
Internal Information Rural Revitalization Energy Utilization
Employees Employee Promotion Communication Platform Employee Satisfaction
Survey Circular Economy Pollutant Emissions
Chairman’ s Mailbox Opportunities in Clean Technology Supply Chain Security
Anti-Commercial Bribery and Anti-Corruption
Unobstructed Communication Channels Social Media Anti-Unfair Competition
Environmental Compliance Management
Ensure Product Quality Customer Service Hotline Due Diligence Waste Disposal
Stakeholder Communication
Customers Protect Customer Rights and Interests Customer Satisfaction Survey Response to Climate Change Equal Treatment of Small and Medium-sized Enterprises
Water Resource Utilization
Data Security and Customer Privacy Protection
Ecosystem and Biodiversity Protection
Improve People’ s Livelihood Low Financial Materiality for Xingfa Group High
Charitable Donations Interviews in the media
Rural Revitalization Issues with Impact Materiality Rather than Financial Materiality Issues with both Financial Materiality and Impact Materiality
Exchange visits Joint activities
Public Welfare Organizations Public Welfare and Charity Issues without Financial Materiality or Impact Materiality Issues with Financial Materiality Rather than Impact Materiality
and Community Organizations
Material Issues Matrix of Xingfa Group
Note 1: The Company does not engage in scientific research or technological development in ethically sensitive fields such as life sciences or artificial intelligence. Therefore technology ethics
is not included in the Company’ s ESG issue assessment.Note 2: The Company has not conducted ESG-specific due diligence; however it continuously carries out risk management to identify and assess potential negative impacts of operations. For
details see the Compliance Operations and Risk Management section.
2324
Materiality of Economic Social and Environmental Impacts01
Prioritizing
Ecology to Chart
a Green Blueprint
SDGs Addressed in This Chapter
Material ESG Issues Covered in This Chapter
Opportunities in Clean Technology Pollutant Emission Water Resource Utilization
Response to Climate Change Waste Disposal Circular Economy
Environmental Compliance Ecosystem and
Management Energy Utilization Biodiversity Protection
25 262025 Environmental Social and Governance Report
Opportunities in Clean Technology Renewable Energy Materials
The Company actively expands into the silicone chemistry and new energy sectors forming an industrial pattern of coordinated development
featuring “phosphorus–silicon new energy” industrial layout. Organosilicon has broad downstream applications and is growing rapidly; in the
Application of Green Products new energy materials field the focus is on phosphorus-based precursors and cathode materials especially the new energy storage market which will be a key direction for capital expenditure.The Company is committed to researching and developing eco-friendly products. In the research development and design process of specific
new products environmental factors must be considered; in the selection of materials the Company also exerts every effort to choose environ- The Company’s Involvement in the Renewable Energy Materials Sector.mentally friendly and recyclable materials so as to reduce carbon emissions and resource consumption throughout the life cycle of its own
products and to create green and eco-friendly products.Xingfa Group’ s silicone prod- Xingfa Group cooperates with photovoltaic giants such as LONGi
Case: Silicone leather shines at Baiyun International Airport ucts can be used as sealing
materials and packaging Green Energy Technology Co. Ltd. and Tongwei Co. Ltd. to
processes for solar photovoltaic provide silicone sealants for photovoltaic module packaging. The
panels improving the durability product (such as high-temperature vulcanized silicone rubber) The Company’ s independently developed and efficiency of the compo- can withstand extreme temperatures and ultraviolet rays extend-and produced high-performance silicone Photovoltaic nents directly supporting the ing the component’ s lifespan to over 25 years and reducing the leather materials have been fully applied to Materials operation and maintenance costs of photovoltaic power plants.the sofas and seats in the public lounge areas development of renewable
of the newly commissioned Terminal 3 (T3) at energy.Guangzhou Baiyun International Airport.Silicone products use high-quality inorganic
silicone gel as the raw material eliminating
harmful substances such as plasticizers and
heavy metals that may be present in tradi-
tional leather and PVC/PU materials achiev- Expand the lithium iron phos- Leverage the Company’ s own phosphate resources to produce
ing zero VOCs (volatile organic compounds) phate (LFP) cathode material lithium battery materials with existing capacities of 100000
emissions and ensuring a clean healthy industry chain utilizing phos- tonnes/year of iron phosphate 80000 tonnes/year of lithium
indoor air environment for travelers. phate chemical resources to iron phosphate and 100000 tonnes/year of lithium dihydrogen
serve the electric vehicle phosphate. The products have entered the supply chains of lead-
Lithium Battery battery market aligning with ing domestic lithium battery companies.Materials sustainable transportation
demands.Case: Silicone foam leads the smart cleaning field Building Circular Economy
The high-performance silicone foam materials
independently researched developed and Xingfa Group follows the concept of “there is no absolute waste only resources placed in the wrong position” and according to the principles
produced by the Company have been fully of “reduction reuse and resource utilization” supports technological innovation with a focus on efficient resource recycling energy conserva-applied to the core sealing and cushioning tion and pollution reduction. This has formed a circular economy development model characterized by “innovation in the cycle efficiencycomponents of sweeping robots precisely improvement in the cycle” covering the utilization of by-products and waste wastewater tail gases and other fields.adapting to the rigorous requirements of
high-frequency operation and multi-scenario The Company has been recognized as a National Clean Production Demonstration Enterprise a National Demonstration Base for Comprehen-
tasks of sweeping robots empowering the sive Utilization of Low-Grade Phosphate Ore a Core Enterprise of the National Circular Economy Pilot Park and a National Demonstration
upgrade of intelligent cleaning with the Enterprise for Resource Conservation and Environmental Friendliness.power of technology. Furthermore utilizing
high-quality liquid silicone as the raw material
the silicone foam eliminates harmful impuri-
ties such as plasticizers and heavy metals
from the traditional foam at the source
achieving zero Volatile Organic Compounds
(VOCs) emissions fortifying the home health
defense line with green technology and
unlocking a more secure and convenient new
experience of smart home living.
27 282025 Environmental Social and Governance Report
Resource Utilization of By-products and Waste Comprehensive Utilization of Recovered Electronic-grade Sulfuric Acid
Chemical enterprises produce large amounts of by-products and “waste water tail gas and solid waste” which can either be used as valuable The Company actively advances the comprehensive utilization of waste liquid to achieve efficient recovery of electronic-grade sulfuric acid
resources or discarded as waste. The park plans its industrial layout under the guidance of “circular development circular utilization” waste liquor. During the Reporting Period the subsidiary Sinophorus Electronic addressing the disposal needs for dilute waste sulfuric acid gen-
leveraging the symbiotic coupling relationships between different products to build industrial chains and make full use of “waste” . erated in downstream electronic-grade sulfuric acid customers’ production processes promoted the implementation of a 50000 tonnes/year
comprehensive utilization project for electronic-grade sulfuric acid waste liquid.Relying on the Company’ s existing 100000 tonnes/year
ultra-high-purity liquid SO3 unit and given the stability of the waste acid impurity composition and the absence of organic impurities the proj-
Green Herbicide ect selected a process route in which the dilute waste sulfuric acid is used as the diluent and introduced into the absorption tower pump tank
to mix with flue-gas SO3 to react and be converted into industrial sulfuric acid for off-site sale. This solution both properly addresses the
waste-liquid discharge challenge of electronic-grade sulfuric acid customers and realizes sulfur recovery and utilization reducing sulfur resource
At the Yichang New Materials Industrial Park of Xingfa Group glyphosate and organosilicon form the most representative circular economy loss and effectively improving the Company’ s level of comprehensive resource utilization and environmental benefits.chain. Glyphosate is a green eco-friendly herbicide. During its production methyl chloride is generated as a by-product; methyl chloride is used
to produce organosilicon. In organosilicon production hydrochloric acid is generated as a by-product and hydrochloric acid can in turn be used
to produce glyphosate thus achieving circular utilization. Recycling and Reuse of Wastewater
Diagram of Circular Industry Chain in Yichang New Materials Industrial Park As of the end of the Reporting Period through pipeline retrofits construction of water cooling towers collection and treatment of phospho-
rus-containing surface water and closed-loop recycling of industrial wastewater the Company has basically achieved industrial wastewater
reuse and zero sewage discharge across all plants.Salt (Sodium
Chloride)
Silicon Reduction and Controlled Utilization of Waste gas
Bleaching Hydrochloric Acid
Powder (By-product ) The Company actively promotes the comprehensive utilization of waste gas achieving efficient recovery of yellow phosphorus off-gas and
Methyl Chloride using it as a power fuel for producing products such as sodium tripolyphosphate and sodium hexametaphosphate as well as for power genera-
Hydrogen Chloride Synthetic Hydrochloric Acid (By-product) tion. In addition phosphine tail gas generated from sodium hypophosphite is used for producing downstream products such as phosphating Organosilicon
Chlor-Alkali Glyphosate agents and flame retardants greatly enhancing the resource utilization of waste gas. In 2025 Jixing Chemicals’ phosphine tail gas comprehen-Monomer sive utilization project was put into production and the market introduction work for the high-end phosphine agent product series was
launched achieving recorded sales of over 800 tonnes for the full year. This not only reduced disposal costs but also realized profitability within
the very year of commissioning.Chloroace- Glycine
tic Acid
Hydrochloric Acid
(By-product) Calcium
Chloride
Phosphorus Dimethylphosphite
Trichloride
Flame Retardants
Yellow Electronic-grade Organosilicon
Phosphorus Phosphoric Acid Products
Food-Grade Special
Phosphoric Acid Phosphates
Resource Utilization of Waste
Solving the Challenge of Phosphogypsum Utilization
The Company has made a series of important breakthroughs in the comprehensive utilization of phosphogypsum gradually overcoming indus-
try challenges through technological innovation and industry-academia-research cooperation. During the Reporting Period the Company contin-
ued to focus on the resource utilization of phosphogypsum prioritizing the development of the waste sulfuric acid recovery process package
and the construction of related units to further enhance resource utilization efficiency. In 2025 the Company’ s pilot unit for producing high-pu-
rity gypsum from phosphogypsum began trial runs. The gypsum product has a purity ≥99% and a whiteness of 85–90% reaching an indus-
try-leading level. In 2025 the technical and economic feasibility study for the project of co-producing sulfuric acid and cement via phosphogyp-
sum calcination was completed and construction of the relevant capacity is planned to begin in 2026. In the future the Company will continue
to focus on technological innovation deepen industry–academia–research collaboration promote the industrialization of comprehensive phos-
phogypsum utilization technologies and contribute to the industry’ s green and sustainable development.
2930
Phosphates (By-product)
Chlorine2025 Environmental Social and Governance Report
Response to Climate Change Opportunity Identification and Assessment Table for Response to Climate Change Issues
Opportunity Type Opportunity Description Period of Impact of Impact Value Chain Financial Impact Reponse Measures
Governance
The government provides support
policies for the green and low-carbon Actively applying for govern-
To further optimize carbon emissions verification and compliance work improve carbon emissions management and actively integrate into the industry such as subsidies and tax Decrease in ment and policy support and
national carbon emissions trading market the Company established a Carbon Emissions Management Leading Group to implement the national Policy Support incentives for companies using renew- Mid-term Operations Operating fully leveraging policy dividends
dual-carbon strategy and organized the formulation of the Carbon Peak and Carbon Neutrality Action Plan systematically planning the Company’ s future able energy and green low-carbon to accelerate and facilitate
reduction pathway and implementation roadmap. An office under the Leading Group is primarily responsible for the daily affairs of carbon technologies which can help the Costs corporate development.emissions trading. In addition the Leading Group has four dedicated teams: a Verification Team an External Liaison Team a Trading Team and development of enterprises.an Information Disclosure Team. With clearly defined responsibilities and close collaborative synergy each sub-group focuses on carbon emis-
sion verification external liaison and communication market trading operations and information disclosure respectively precisely ensuring that With the development of sectors such
carbon trading-related workflows are executed in a highly efficient and orderly manner. as new energy vehicles and energy Increase in Expanding the production Growth in Market storage demand for phosphate chem-
Mid-term Downstream Operating capacity of relevant products
Demand ical products such as lithium iron to consistently elevate and
phosphate is growing rapidly creating Revenue optimize market share.market opportunities for Xingfa Group.Strategy
In the process of green and low-car- Decrease in
bon technological innovation if Xingfa
Risk Identification and Assessment Table for Response to Climate Change Issues Group achieves technological break- Operating Establishing world-class R&D
Technological throughs—such as developing more Operations Costs centers to attract top-tier talent
Innovation efficient carbon-reduction technolo-
Long term
Downstream Increase in and robustly foster a culture of
Period of Impact of gies or new green products—it can innovation.Risk Type Risk Description Impact Value Chain Financial Impact Reponse Measures enhance its competitiveness and open
Operating
up new markets. Revenue
Due to the different locations of each Increase in Enhancing infrastructure
production base and marketing
Acute Risks construction standards to platform the Company faces extreme Operating
such as Upstream weather such as heavy rain and snow Costs upgrade disaster resistance
Extreme Short term Operations capacities; and formulating in Hubei typhoons in Jiangsu and Decrease in Impact Risk and Opportunity Management
Weather comprehensive emergency sandstorms in Xinjiang which can Downstream
Pysical response plans to ensure damage facilities disrupt transporta- Operating
Risk supply chain resilience.tion and affect production and sales. Revenue Xingfa Group has built a comprehensive process for risk identification assessment supervision and management and adjusts it based on
changes in the external environment and company business planning continuously optimizing risk response strategies to ensure that climate
risk management aligns with the Company’ s overall strategy and provide strong support for achieving sustainable development goals.Long-term rising temperatures may Increase in
Chronic Risks affect crop growth thereby impacting
Operations Continuously and further
the stability of the biomass feedstock Long term Operating driving down the comprehen-Downstream
supply needed for chemical products. Costs sive costs of products.Identification Assessment Supervision Management
Regularly updating climate risk Conducting an item-by-item Ensuring that all functional departments Formulating targeted and
As countries tighten requirements on
carbon emissions and environmental analysis scenarios based on diverse granular analysis for each and subsidiaries regularly conduct corresponding mitigation Actively tracking evolving
protection the Company may face policies laws and regulations factors such as the geographical identified risk and opportunity self-inspections of their climate-related and adaptation measures
policy changes such as carbon taxes Increase in to formulate carbon emission environment of the Company’ s to evaluate its potential finan- risk and opportunity management based on the outcomes of Policies and
Regulations and carbon emission quota restric- Long term Operations
operating locations its business cial impacts as well as the workflows so as to promptly detect the comprehensive identifi-
tions. For example the chemical Operating
reduction plans while optimiz-
ing production workflows to scopes and evolving policy chang- specific horizons and magni- and rectify risk control deficiencies and cation and assessment
industry faces strict environmental Costs enhance energy utilization es to systematically identify poten- tudes of such impacts. submit comprehensive inspection processes.protection policies and carbon emis- efficiency. tial risks and opportunities driven reports to the Company’ s Internal
sion regulations. by climate change. Control Department in a timely manner.If the industry shifts toward green and
low-carbon technologies and the Augmenting research and
Company fails to keep pace—falling development (R&D) invest-
Decrease in ments and closely collaborat- Indicators and Targets
Transition behind in areas such as carbon Technological capture utilization and storage Mid-term Operations Operating
ing with scientific research
Risk Transformation (CCUS) novel catalyst technologies institutions as well as peer
and green chemical processes—the Revenue enterprises to co-develop Indicators Unit Year 2025
Conpany may face the risk of being green and low-carbon technol-
phased out. ogies. Direct GHG Emissions (Scope 1) 10000 tCO2e 366.57
Indirect GHG Emissions (Scope 2) 10000 tCO2e 269.87
If consumer demand for green and
environmentally friendly products Strengthening market research Total GHG Emissions 10000 tCO2e 636.44
Changes in increases and Xingfa Group cannot Decrease in
Market promptly adjust its product mix to Long term Downstream
and insights to dynamic adjust
produce more green products that Operating product structures and actively Demand
meet market needs it may lose Revenue develop green eco-friendly
GHG Emission Intensity tCO2e/tonne of product 0.32
products.market competitiveness.Note: See Appendix - Performance Overview for the GHG accounting notes.
31 322025 Environmental Social and Governance Report
Climate Action Carbon Standards System
The Company conducts detailed analysis of the “dual carbon” situation year by year and based on actual conditions adjusts its strategic layout
in a timely manner to ensure that the Company’ s “dual carbon” targets align with the national “dual carbon” goals. In response to the The state advocates that chemical enterprises actively participate in the formulation of domestic and international standards related to carbon
country’ s overall policy deployment on carbon peaking and carbon neutrality the Company will complete the Carbon Peaking and Carbon Neutrality peaking and carbon neutrality so as to improve the level of standards in this field. The Company is deeply involved in the formulation of nation-
Action Plan at the beginning of the “15th Five-Year Plan” period devising a series of effective measures to ensure the achievement of the targets. al and industry standards actively participating in the formulation of carbon footprint accounting specifications for phosphoric acid phosphates
and glyphosate products technical standards for pollution reduction carbon reduction and comprehensive resource utilization in the yellow
phosphorus industry as well as the revision work of green factory standards for the yellow phosphorus industry. During the Reporting Period
the group standard Standards for Pollution Reduction Carbon Reduction and Comprehensive Resource Utilization in the Yellow Phosphorus Industry in the formulation of
which the Company participated was officially released and will be formally implemented in 2026.Energy-Saving and Carbon-Reduction Actions
Based on its actual operational conditions and long-term development planning the Company formulated an energy-saving and carbon-reduc- Carbon Footprint Certification
tion work plan. The plan clearly defines the main objectives key tasks implementation pathways for energy-saving and carbon-reduction retro-
fits and guarantee measures actively promoting the establishment of the Company’ s carbon neutrality management system and
implementing carbon reduction responsibility targets. During the Reporting Period in order to achieve a green and low-carbon transformation The Company attaches great importance to the control of carbon emissions continuously advances the research and development of green
the Company and its subordinate subsidiaries carried out key green and low-carbon upgrade and retrofit projects. and low-carbon products and strives to reduce greenhouse gas emissions throughout the product life cycle dedicating itself to manufacturing environmentally friendly products. During the Reporting Period the construction of the Company’ s carbon footprint management system
Energy-Saving and Carbon-Reduction Work achieved a major breakthrough. The Company and its subsidiaries Hubei Xingrui and the Phosphorus Chemical Industry Research Institute
followed the ISO 14067 carbon footprint research and verification requirements to systematically identify evaluate and calculate the carbon
footprints of a total of 26 products across the two core categories of phosphorus and silicone under their umbrella. The calculation scope cov-
Project Name Project Content Project Benefit Analysis Construction Start Date ered carbon emissions from the raw material acquisition and manufacturing stages and carbon footprint certifications were obtained. In addi-
tion a total of 4 phosphorus chemical products manufactured by the Baishahe Chemical Plant and the Phosphorus Chemical Industry Research
Benefits after project completion: Institute obtained ISO 14040 and ISO 14044 life cycle study certifications. Concurrently the Company organized 51 employees to participate in
The project built a distributed pho- The average annual power genera- the ISO 14067 internal carbon footprint verifier training course and obtained training certificates.Distributed Photovoltaic Power tovoltaic power plant with a total tion are approximately 14.9629
Generation Project installed capacity of 17.743 MWp on million kWh. Based on the park’ s 2025.4.25
the DC side. grid purchase electricity price it is
estimated to save RMB 4.4387
million in electricity costs per year.A comprehensive treatment unit for
sulfur-containing tail gas adopting Benefits after project completion:
Achieve compliant emission of tail
Sulfur-Containing Tail Gas an incineration-to-acid process was
Environmental Upgrade and newly built aiming to treat
gas and treat sulfur-containing
Retrofit Project sulfur-containing tail gas and waste
waste liquid with an estimated net 2025.9.11
liquid in the park with steam and additional benefit of RMB 0.3498
concentrated sulfuric acid as million per year.by-products.A new 30000-tonne /year sodium
Technical Upgrade Project for pyrophosphate incineration unit was Benefits after project completion:
the Sodium Pyrophosphate Unit built and the existing reclaimed Compared with outsourcing dispos-al it is estimated to save RMB 2025.10.24and Reclaimed Water Reuse Unit water reuse unit underwent a tech-
nical upgrade. 27.6955 million in costs annually.ISO 14040/ISO 14044 Life Cycle Study Certification Certificate
Demolish the original coal-fired hot
air furnace install two dual-fuel gas Benefits after project completion: Ammonium Phosphate Hot Air expected to reduce carbon dioxide
Furnace Retrofit Project burners and construct supporting 2025.12.11natural gas and tail gas pipelines emissions by 4076 tonnes annually.and a central control system.Carbon Market Trading
The Company responds to the national call for promoting the low-carbon transformation of enterprises carries out carbon verification work and
actively participates in carbon market trading. By the end of the Reporting Period the Company and its subsidiaries Hubei Xingrui Trisun Chem-
ical Xiangyang Xingfa and others 9 entities were included as emissions-controlled production units. Among them the thermal power plants of
Hubei Xingrui and Inner Mongolia Xingfa were included in the national carbon market and 8 entities were included in the Hubei provincial
carbon market.In the national carbon market the Company had a cumulative surplus of 0.2575 million tonnes of allowances of which 0.1329 million tonnes
were sold in 2025 generating proceeds of RMB 7.76 million. In the Hubei carbon market the Company had a cumulative allowance shortfall of
1.7471 million tonnes. To fulfill compliance the Company purchased a total of 1.7681 million tonnes of allowances with cumulative expenditures
of RMB 56.6784 million.
33 342025 Environmental Social and Governance Report
Environment Compliance Management Environmental Monitoring
The Company and its subsidiaries strictly comply with the requirements of relevant national laws and regulations establishing a dedicated Envi-
Xingfa Group strictly follows the relevant legal provisions such as the Environmental Protection Law of the People’ s Republic of China and the Yangtze River Protec- ronmental Monitoring Station under the Company’ s environmental management organizational framework. This station conducts
tion Law of the People’ s Republic of China and steadily advances the Company’ s environmental compliance work. During the Reporting Period the environmental monitoring operations on a full-time basis supervising and assessing that all operating units achieve compliant discharges of
pollutants and wastes generated in the Company’ s production and office processes were mainly industrial wastewater domestic sewage pollutants including wastewater air emissions and noise in strict accordance with relevant national standards. During the Reporting Period
industrial waste gas and industrial solid waste and there were no penalties imposed by regulatory authorities for violations of laws and regula- production wastewater from all yellow phosphorus production units was fully treated and put into closed-loop circular reutilization; wastewater
tions related to environmental management. from other chemical production units was treated to meet preliminary standards before being discharged into the industrial park’ s centralized wastewater treatment plant. Regarding air emissions exhaust gases from major discharge outfalls achieved compliant discharge under 24-hour
continuous and automated real-time online monitoring systems while tail gases from other production facilities were also thoroughly treated
and discharged in strict compliance with emission standards.Governance
Cleaning Production
Environmental Management System
Adhering to the guiding principle of “cleaner production circular development green transformation and establishing an industry benchmark”
the Company is dedicated to continuously carrying out cleaner production. The Company’ s chemical plant and subsidiaries such as Chufeng
The Company continues to improve its environmental management system has formulated and implemented the Environmental Protection Manage- Chemicals Jixing Chemicals and Jiangsu Futong periodically organize cleaner production audit work comprehensively checking the
ment System and has built an environmental protection management organizational structure composed of the Safety and Environmental Protec- Company’ s cleaner production progress from the perspectives of pollution abatement resource conservation and energy saving so as to set
tion Department the Safety Production Committee (park division) and the Safety and Environmental Protection Sections of each production an environmental benchmark for the chemical industry.unit which collectively oversee the Company’ s environmental protection management and the supervision inspection and assessment of
on-site environmental protection work at each unit. At the same time the Company has issued the Management Measures for Reward and Punishment Upon rigorous verification by the audit team all pollutant emissions of the Company meet the required standards with zero non-compliance
Related to Safety and Environmental Protection incorporating environmental protection indicators into management performance appraisals and has issues no major or exceptionally grave environmental pollution accidents have occurred and all cleaner production schemes have been fully
systematically carried out special environmental protection training covering core topics such as facility management and EHS capability completed and implemented effectively fulfilling the enterprise’ s environmental protection responsibilities.enhancement to ensure employees master the essential environmental knowledge and skills.During the Reporting Period the Company organized a three-day professional capacity enhancement training class in environmental manage-
ment for environmental officers from all units. By combining internal regulations popularization with external expert training the program effec- Strategy
tively improved participants’ awareness of environmental system building providing strong ideological support for the Company’ s green devel-
opment. Risk Identification and Assessment Table for Environmental Protection Issues
The Company and its subsidiaries actively advanced environmental management system certification and reviews. Xingfa Group and its subsid-
iaries Sinophorus Electronic Yidu Xingfa Inner Mongolia Xingfa and Hubei Xingrui passed ISO 14001 environmental management system certifi- Period of Impact of Financial Risk Type Risk Description
cation. Sinophorus Electronic Xinjiang Xingfa Longma Phosphorus Industry and others obtained National-level Green Factory Certification. Impact Value Chain Impact
Reponse Measures
Strengthening equipment patrolling
Environmental Protection-Related Honors and Certifications (Partial) inspections and preventive mainte-
Exhaust gas emissions may exceed nance and refining comprehensive
standards due to equipment failures or emergency response plans to ensure
Company Name Certification Name Certification Level Pollutant process issues; wastewater discharges Increase in Emission Short term Operations Operating swift and timely mitigation in the event
and Leakage may cause water pollution due to Costs of any operational anomalies; and
Hubei Sinophorus Electronic Materials Co.Ltd. Green Factory National Level pipeline leaks malfunctions of treat- conducting targeted environmental
ment facilities and other factors. protection training for personnel to
Weng’an Longma Phosphorus Industry Co. Ltd. Green Factory National Level Physical standardize operational workflows.Xinjiang Xingfa Chemical Co. Ltd. Green Factory National Level Risks If hazardous waste such as waste oil Establishing stringent protocols for
and waste chemicals is improperly
Hubei Xingrui Silicon Materials Co. Ltd. Green Factory National Level waste classification collection and
Improper handled it may leak and contaminate soil and water; if general waste such Increase in
disposal; executing the timely clear-
Hubei Trisun Chemical Co. Ltd. Green Factory National Level Disposal Short term Operations Operating ance and transportation of non-haz-of Waste as office trash and household garbage Costs ardous waste and reinforcing rigorous is piled up or not disposed of in a supervision and management over
Hubei Jixing Chemical Group Co. Ltd. Green Factory Provincial level timely manner it will affect the plant waste storage and disposal areas.area environment.Baokang Chufeng Chemical Co. Ltd. Green Factory Provincial level
Proactively tracking and deciphering
Inner Mongolia Xingfa Technology Co. Ltd. Green Supply Chain Enterprise Provincial level Environmental protection laws and environmental laws policies and regu-
policies are continually evolving. The Increase in lations in a timely manner; periodically
Hubei Xingrui Silicon Materials Co. Ltd. Green Supply Chain Enterprise Provincial level Regulatory
Risks Company may face compliance risks if Short term Operations Operating
evaluating the compliance alignment
Water-Saving Enterprise of Xingfa Group ISO 14001 they fail to adapt in a timely manner Costs
between internal environmental man-
Weng’an Longma Phosphorus Industry Co. Ltd. agement measures and evolving statu-Guizhou Province Provincial level leading to penalties and legal liabilities.Certification Certificate tory regulations to proactively plan and
implement rectifying measures.In the performance rating of key enterprises in heavily polluting industries carried out by the local government’ s environmental protection Transition With the heightening of environmental
authority the subsidiaries Hubei Xingyou New Energy Co. Ltd. and Hubei Xingfa Phosphorus Chemical Research Institute Co. Ltd. received an Risks protection requirementsthe Company Intensifying deep collaboration with
A grade in environmental performance. needs to invest substantial funds in scientific research institutions and
upgrading environmental technologies professional environmental protection Failure of and optimizing management systems. Long term Operations Decrease in enterprises; and formulating long-term Technological
Upgrades If the transformation is not timely or Downstream
Operating strategic blueprints for environmental
Key Perfomance successful the Company may be at a Revenue technology upgrades and manage-
competitive disadvantage in the ment framework optimization to
ensure the seamless and successful
During the Reporting Period the Company continued to increase investment in environmental protection with total environmental protection invest- market and face negative public perception. execution of the green transition.ment of RMB 757.31 million including RMB 419.80 million in operating expenses for environmental protection facilities.
35 362025 Environmental Social and Governance Report
Opportunity Identification and Assessment Table for Environmental Protection Issues
Case: Emergency Response Plan for Liquid Ammonia Leakage
Period of Impact of Financial
Opportunity Type Opportunity Description Impact Value Chain Impact Reponse Measures
To further strengthen risk prevention awareness
Continuously improving environmental
By effectively controlling pollutant management workflows actively partici-
train emergency response teams and enhance the
emissions and properly handling pating in the formulation of environmental ability to handle emergencies Henan Xingfa Eco-
Competitive waste enhance the Company’ s protection standards and industry-wide logical Fertilizer Co. Ltd. conduct an emergency
Advantages environmental image and strengthen Increased in environmental initiatives and widely drill in June 2025. The drill simulated a liquid Brought by market competitiveness—for example Long term Downstream Operating showcasing corporate environmental ammonia storage tank leak in the tank farm to Environmental by obtaining environmental certifica- Revenue achievements; while actively exploring the check whether the Company’ s emergency plan is Improvements tions and participating in green supply research development and production of scientific and complete to assess how the park
chain projects—thereby increasing green products to further unlock and the municipal emergency response linkage depart-
operating revenue. capitalize on the economic benefits driven
by environmental initiatives. ments and Henan Xingfa Ecological Fertilizer Co. Ltd. perform their duties and collaborate in emer-
gency response to hazardous chemical accidents
and to make effective improvements.Impact Risk and Opportunity Management
Management Processes
To strengthen environmental risk control the Company has formulated the Risk Management System regularly carries out the identification of envi-
ronmental risk factors and continuously optimizes risk control measures. Through measures such as standardizing routine environmental man- Hidden Hazard Inspection
agement and enhancing response and disposal capabilities for emergency environmental incidents the Company continuously improves its risk
prevention level earnestly building a solid line of defense for environmental risk management and control.The Company has established a regular safety hazard inspection mechanism and organizes professional personnel to conduct comprehensive
safety inspections. For safety hazards identified during the inspections the Company stipulates that the responsible individuals must complete
Identification Monitoring Management the corrective actions within the specified time.Assessment
Key Perfomance
R i s k s a r e Combining qualitative and Leveraging automated online monitoring Adhering to the overarching
i d e n t i f i e d quantitative methodologies systems the Company conducts real-time principles of maintaining a strict
based on the the Company systematically monitoring of cooling water and air emis- alignment between business During the Reporting Period the Company and its subsidiaries conducted a total of 200 special environmental protection inspections identified
scope of the analyzes and ranks identified sions. Functional departments across all strategy and risk appetite as
Company’ s risks based on their likelihood echelons and each production unit periodi- well as balancing rigorous risk 1109 issues and completed all corrective actions.business. and degree of impact there- cally execute rigorous environmental control with operational efficien-
by defining key areas of focus inspections ensuring that all identified cy the Company formulates and
and prioritizing risks that env i ronmenta l hazards undergo executes end-to-end manage-
require immediate and time-bound rectification and closure valida- ment and control measures
preferred control. tion within specified deadlines. targeting material risks.Environmental Impact Assessment
The Company strictly complies with the Environmental Impact Assessment Law of the People’ s Republic of China and other laws and regulations and conscien-
tiously implements the “Three Simultaneities” principle for projects ensuring that environmental protection facilities are designed constructed
and commissioned simultaneously with the main works to reduce the potential environmental impact of production activities.Emergency Plans and Drills
The Company and its subsidiaries have strictly compiled the Emergency Response Plan for Sudden Environmental Incidents in accordance with the Administrative
Measures for Emergency Response Plans for Emergencies and the Filing Administrative Measures for Emergency Response Plans for Sudden Environmental Incidents of Enterprises and Indicators and Targets
Institutions (Trial) issued by the General Office of the State Council of the People’ s Republic of China and have filed them with the competent
ecological and environmental authorities. At the same time multiple emergency drills are conducted according to the hierarchical requirements
of the annual drill plan to enhance employees’ ability to respond to emergencies reduce the risks and damage that sudden environmental Target Formulation Status Target Achievement Status
incidents may cause and ensure effective prevention and control of potential adverse environmental factors thereby comprehensively improv-
ing the capability to respond to sudden environmental incidents. During the Reporting Period the Company and its subsidiaries conducted a
total of 20 environmental emergency drills. Zero general or more severe sudden environmental incidents
100% compliance rate for emissions of major pollutants in industrial wastewater
100% compliance rate for emissions of major pollutant in industrial waste gas
Waste classification recycling and treatment rate are 100%
37 382025 Environmental Social and Governance Report
Wastewater Management Exhaust Gas Management
Wastewater Management System Exhaust Gas Management System
In accordance with the Environmental Protection Law of the People’ s Republic of China and the Law of the People’ s Republic of China on the Prevention and Control of Water The Company attaches importance to the adverse impacts of exhaust gases on the surrounding environment and proactively carries out
Pollution among other laws and regulations the Company has established a comprehensive wastewater management and monitoring system exhaust emission management and control. The Company strictly adheres to the Environmental Protection Law of the People’ s Republic of China the Law of the
under the Environmental Protection Management System. The Company’ s wastewater mainly originates from production processes and employee living People’ s Republic of China on the Prevention and Control of Atmospheric Pollution and other laws and regulations formulating an exhaust gas management
activities and contains pollutants such as Chemical Oxygen Demand (COD) ammonia nitrogen and total phosphorus. Through continuous opti- system and a quantitative indicator framework and implementing strict monitoring of pollutants primarily tracking emissions of sulfur dioxide
mization of treatment processes and strengthened operational management the Company ensures that monitored pollutant values are con- particulate matter nitrogen oxides and other exhaust gas pollutants. During the reporting eriod the Company’ s exhaust gas emissions were
trolled within the discharge limit values of standards such as Class I of the Integrated Wastewater Discharge Standard (GB8978-1996) ultimately achieving strictly controlled within the limits of emission standards such as the Class II of the Integrated Emission Standard of Air Pollutants (GB16297-1996).clean and compliant wastewater discharge.Wastewater Management Measures Exhaust Gas Management Measures
To strengthen wastewater treatment the Company and its key pollutant-discharging subsidiaries have jointly built 25 wastewater pollution To ensure compliant discharge of exhaust gases the Company built 286 sets of exhaust gas treatment facilities and an environmental data digi-
prevention and control facilities forming a comprehensive technical system covering physical chemical and biological treatment enabling tal monitoring system to carry out comprehensive in-depth treatment of all types of exhaust gases generated during production. Tail gas from
graded treatment and resource-oriented recycling of various types of wastewater. In actual operations wastewater from each yellow phospho- production units in the Company’ s and subsidiaries’ industrial parks is discharged after treatment using combined purification processes such
rus production unit achieves a closed-loop recirculation across the entire system after treatment while wastewater from other chemical units is as in-furnace desulfurization and denitrification coordinated with ultra-low emission technologies outside the furnace baghouse dust removal
centrally disposed of by connecting to the industrial park’ s sewage treatment system after reaching the required standards through caustic scrubbing neutralization activated carbon adsorption and RTO high-temperature combustion achieving an overall dust removal efficien-
professional treatment comprehensively realizing zero discharge of production wastewater. During the Reporting Period the wastewater treat- cy of over 90%. In addition by installing online monitoring facilities at major emission outlets the Company conducts 24-hour real-time tracking
ment facilities of the Company and its subordinate subsidiaries maintained stable operations and no incidents of non-compliant or excessive of environmental data enabling around-the-clock early warning for pollutant generation treatment and flue gas emissions thereby ensuring
discharge occurred. that exhaust gas emissions strictly meet standards. During the Reporting Period the exhaust gas treatment facilities of the Company and its
subsidiaries operated continuously and stably with no instances of exceeding emission standards.Wastewater Discharge of Key Pollutant-Discharging Entities
Exhaust Gas Pollutant Emissions
Indicators Unit Year 2025
Wastewater Discharge Volume 10000 tonnes 1244.27 Types of Pollutants Unit Year 2025
Wastewater Discharge Intensity Tonnes per tonne of product 0.63 Sulfur Dioxide (SO2) Tonnes 917.38
Wastewater Discharge Intensity Tonnes per RMB 10000 of revenue 4.25 Nitrogen Oxides (NOx) Tonnes 673.62
Particulate Matter (PM) Tonnes 135.96
Wastewater Discharge of the Company’s Production Enterprises
Volatile Organic Compounds (VOCs) Tonnes 32.69
Indicators Unit Year 2025
Note: The statistical scope of the data covers key pollutant-discharging entities.Wastewater Discharge Volume 10000 tonnes 2206.48
Wastewater Discharge Intensity Tonnes per tonne of product 1.12
Wastewater Discharge Intensity Tonnes per RMB 10000 of revenue 7.53 Case: Jixing Chemical Phosphine Tail Gas Comprehensive Utilization Project
Wastewater Pollutant Discharge During the Reporting Period the subsidiary Jixing Chemical com-
pleted and commissioned the phosphine tail gas comprehensive
utilization project. This project adopts the Company’ s inde-
Types of Pollutants Unit Year 2025 pendently developed internationally leading technology for com-
prehensive utilization of phosphine tail gas using the phosphine tail
gas generated in the production of sodium hypophosphite as a raw
Chemical Oxygen Demand (COD) Tonnes 614.78 material to produce higher value-added products. This effectively
reduced exhaust gas emissions significantly lowered waste gas
Ammonia Nitrogen (NH3-N) Tonnes 41.74 disposal costs and also generated economic benefits. During the
Reporting Period the project achieved an output of over 800
Total Phosphorus Tonnes 5.99 tonnes of products and reduced phosphine tail gas emissions by
approximately 150 tonnes.Note: The statistical scope of the data covers key pollutant-discharging entities.
39 402025 Environmental Social and Governance Report
Indicators Unit Year 2025
Case: Hubei Xingrui Activated Carbon Unit Retrofit and Upgrade
Non-hazardous Total Waste Generated 10000 tonnes 524.54
During the Reporting Period the subsidiary Non-hazardous Waste Generation Intensity Tonnes per tonne of product 0.27
Hubei Xingrui invested RMB 0.3128 million to
carry out an optimization design on the 901
waste gas absorption and 915 waste gas Non-hazardousWaste Generation Intensity Tonnes per RMB 10000 of revenue 1.79
absorption activated carbon devices in the No.
2 Monomer Workshop. By converting the Hazardous Waste Generation 10000 tonnes 7.18
adsorption tanks into adsorption boxes and
increasing the filling volume of activated Hazardous Waste Generation Intensity Tonnes per tonne of product 0.0037
carbon the daily replacement inspection and
maintenance were facilitated thereby improv-
ing the processing capacity. Hazardous Waste Generation Intensity Tonnes per RMB Million of revenue 0.02
Note: The statistical scope covers key pollutant-discharging entities. Non-hazardous waste refers to general industrial solid waste while hazardous
waste refers to industrial hazardous waste included in the National Hazardous Waste List.Green Office
Waste Management The Company actively advocates for and fully promotes the concept of green office.The Company encourages all employees to start from daily minor details saving every
sheet of paper every drop of water and every kilowatt-hour of electricity and
promoting the use of electronic documents and online collaboration tools to reduce
Waste Management System paper consumption and carbon emissions. Concurrently the Company encourages
employees to utilize video conferencing software for remote communication to
reduce unnecessary business trips thereby lowering energy consumption and trans-
The Company always adheres to the development philosophy that “Lucid waters and lush mountains are invaluable assets” complies with port-related carbon emissions. Internally the Company has set up clear garbage clas-
national laws and regulations and continuously improves its waste management mechanisms. At the same time the Company and its subsid- sification guidelines equipped categorized trash bins and periodically organizes train-
iaries have established a sound solid waste management system and set up dedicated management bodies responsible for day-to-day safety ing to enhance employees’ environmental protection awareness and engagement.and environmental supervision and for implementing relevant national laws regulations and standards striving to minimize solid waste genera-
tion maximize resource utilization and ensure safe disposal.Classified Trash Bins and Sorting Labels
Waste Management Measures
Depending on the differing nature of the waste the Company classifies waste categories into non-hazardous waste and hazardous waste.Non-hazardous waste primarily originates from office waste and general industrial solid waste such as waste packaging materials phosphorus
slag desulfurization gypsum and domestic waste; whereas hazardous waste mainly comprises spent filter membranes waste oil waste paint
buckets and phosphorus sludge. Targeting waste of distinct characteristics the Company has formulated comprehensive and sound manage-
ment methodologies to precisely ensure that all waste undergo rational and compliant disposal.Waste Management Measures
Type Treatment Method
General Solid Waste General solid waste entering or leaving the plant area must be strictly registered and it
Treatment and Disposal must be ensured that no spillage or leakage of solid waste occurs after vehicles leave the plant area.The inter-unit transportation of hazardous waste between various production units requires
prior statutory approval from the environmental management department and their admis-
Hazardous Waste Treatment sion to or departure from plant areas must be authenticated by mandatory Hazardous
and Disposal Waste Manifests. For the ultimate disposal and logistics of hazardous waste the Company
strictly commissions licensed third-party disposal operators for treatment and entrusts qual-
ified hazardous waste logistics providers for transit.Measures for the Recycling Executing systematic identification across the classification collection storage transporta-
and Utilization of Waste tion utilization and disposal pathways of non-hazardous waste while aggressively recover-ing and harvesting the recyclable and renewable components for circular reutilization.
41 422025 Environmental Social and Governance Report
Energy Utilization During the Reporting Period the Company continuously consolidated its benchmarking position in the yellow phosphorus industry’ s energy efficiency winning the title of
“Frontrunner” Benchmarking Enterprise in Yellow Phosphorus Production Energy Efficien-
cy awarded by the China Petroleum and Chemical Industry Federation. The Company’ s
yellow phosphorus cleaner production process has been rated first place in the national
Governance key industry energy efficiency frontrunner list for 13 consecutive years and was promot-ed across the entire industry by the Ministry of Industry and Information Technology as a
typical experience establishing an excellent image for the Company as a model ofXingfa Group adheres to the resource management philosophy of “legal compliance clean production energy conservation and efficiency energy saving and emission reduction.improvement and sustainable low-carbon development” and has formulated a series of management measures such as the Energy Management
Handbook the Energy Management Operational Control Procedure the Energy Design Control Procedure and the Energy Conservation Management System covering all busi-
ness links including energy procurement energy management facility maintenance energy-use monitoring and energy-use assessment there-
by building a sound energy management system and appointing a management representative to coordinate energy management across Energy-Efficiency Front-Runner
departments. At the same time the Company has established an Energy-saving Leading Group. In accordance with national energy conserva- Benchmark Enterprise
tion norms and standards it conducts energy audits and improves energy efficiency through measures such as energy-saving technological Strategy
upgrades production process optimization replacement with energy-efficient equipment and the use of renewable energy.To enhance energy management efficiency and ensure the effectiveness of energy conservation and emissions reduction at the beginning of Risk Identification and Assessment Table for Energy Utilization Issues
each year the Company signs an Energy Management Target Accountability Statement with each production unit implementing a tiered target
responsibility system. The Energy-saving Office conducts assessments on energy conservation and emissions reduction including the comple-
tion status of the “dual control” targets for total energy consumption and energy intensity energy conservation supervision project energy-sav- Period of Impact of Risk Type Risk Description Impact Value Chain Financial Impact Reponse Measures
ing reviews and coal consumption reduction targets and grants rewards to advanced units and individuals in energy management.Tracking and deciphering ener-
Changes in energy-related policies such gy-related national and indus-
as Catalogue for Eliminating Outdated Production try standards as well as statu-
Capacity Processes and Products (Batches I II III tory and regulatory require-
Energy-saving Management Organization and Responsibilities and IV) tightening policies on energy Increase in ments in a timely manner;
conservation and emissions reduction Consulting and formulating
Policy Risk raising energy consumption standards for Mid-term Operations Operating solutions with legal counsels to
Department Responsibilities the chemical industry and restricting Costs effectively respond to contin-
production by high-energy-consuming gencies while executing
The department responsible for energy-saving management improving energy-saving management enterprises. periodic compliance evalua-
Strategy and Investment systems and related technical standards supervising and inspecting the implementation of ener- tions to ensure law-abiding operations.Department gy-saving work conducting assessments and evaluations of energy-saving targets and coordinating
energy-saving management across departments.Production Management Center; The competent departments for energy conservation management across each business segment
Production Management Departments are fully responsible for providing functional guidance as well as conducting regulatory oversight
Increasing R&D investments
and performance evaluation regarding the energy conservation management workflows of the The rapid iteration and upgrading of new actively introducing and devel-
of Business Department respective operating units under their jurisdictions. energy utilization technologies expose oping cutting-edge energy the Company to the potential technologi- Increase in utilization technologies and
Establishing departmental energy conservation accountability matrices and responsibility checklists to Technical Risk cal obsolescence of its existing energy Long term Operations Operating collaborating deeply with Functional Departments clearly demarcate and define energy conservation management mandates. utilization systems thereby escalating Costs scientific research institutions
structural energy costs. to continuously maintain tech-
Formulating and implementing rigorous energy conservation plans and tactical mitigation measures no logy l eadersh ip and
Production Units and conducting comprehensive internal energy auditing so as to securely ensure the absolute attain- advancement.ment of each respective operating unit’ s designated energy efficiency and conservation targets.Extreme volatility in energy commodity Estab l i sh ing an energy Increase in
pricing such as price spikes in coal and procurement risk management
As of the end of the Reporting Period eight subsidiaries including Jixing Chemical Sinophorus Electronic and Trisun Chemical have success- Market Risks natural gas directly inflates the Compa- Short term Upstream Operating framework and stabilizing
fully obtained the Energy Management System (ISO 50001) certification; among them six subsidiaries passed rigorous expert re-audits during ny’ s energy procurement and sourcing energy purchasing prices Costs
the Reporting Period thereby successfully extending the validity periods of their certifications. costs. through strategic mechanisms such as long-term contracts.Strengthening rigorous labora-
tory inspection and chemical
assay ing whereby any
Sub-standard quality of energy raw sub-standard energy raw
materials leads to instabilities in the quali- materials are strictly prohibited
ty of finished products; suboptimal from acceptance;
production scheduling and organization Rationalizing production sched-
cause energy wastage and severe opera- Decrease in uling to fully leverage tiered
Management tional inefficiencies; and competency Short term Operations Operating electricity pricing policies;
Risks deficits among newly recruited or Revenue Intensifying the training on
reassigned personnel may result in oper- energy knowledge and pow-
ational malpractices triggering critical er-consuming equipment oper-
equipment failures or workplace safety ations ensuring that personnel
accidents. achieve mandatory certi-
fied-to-operate status only
upon passing rigorous evalua-
tions.Energy Management System Certification of the Company’s Subsidiaries
43 442025 Environmental Social and Governance Report
Opportunities Identification and Assessment Table for Energy Utilization Issues Indicators and Targets
Opportunity Type Opportunity Description Period of Impact of Financial Impact Reponse Measures The Company adheres to goal orientation sets energy-saving and emission-reduction targets at the beginning of each year assigns responsibil-Impact Value Chain ities to each production unit and conducts daily supervision to promote target achievement.Taking the pioneering lead in the Energy Conservation Management Targets Completion Status
industry the Company has estab-
lished a centralized Energy Manage-
ment Center Platform. The construc- Energy Consumption “Dual Control” and the energy consumption per RMB 10000 of output value will
tion and deployment of this platform decrease by more than 13.5% compared to 2020 and the annual targets set by all levels of government will
The digital Energy Manage- successfully achieve the unified
be completed.Management Efficiency ment System (EMS) enables
Decrease in synergistic dispatching of chemical Achieving energy efficiency benchmark levels industry-advanced values and budget control targets accord-
real-time optimization reduc- Long term Operations Operating processing and hydropower genera-
Improvement ing overall energy consump- tion energy conservation emission
ing to different industries.Costs
tion. reduction workforce optimization and operational efficiency enhance- Achieving carbon emission intensity control targets set by national and provincial/city governments.ment thereby driving significant
mitigations in the emissions of sulfur The energy management system of key energy-consuming units will operate effectively and pass certification
dioxide (SO2) carbon dioxide (CO2) audits.and particulate matter/soot to a
substantial extent.As a renewable and non-pol- Type of Energy
luting energy source with
broad development prospects
hydropower can be developed By 2025 Xingfa Group owned 32
by leveraging local water Decrease in Hydropower Business hydropower stations with a total
Type Unit Year 2025
resources. The Company can Long term Operations Operating installed capacity of 180300 kW and
Opportunities increase investment and tech- Costs an average annual power generation Total Direct Energy Consumption 10000 tonnes of standard coal 124.70nological innovation in hydro- of about 500 million kWh.power generation bringing
stable energy income and a Including: Coal 10000 tonnes of standard coal 114.76
positive social image.Diesel 10000 tonnes of standard coal 0.89
Natural gas 10000 cubic meters 6488.47
Impact Risk and Opportunity Management
Electrodes 10000 tonnes of standard coal 0.42
To effectively identify energy use risks and opportunities in production and service processes and enhance resilience against risks the Company
has formulated the Risk and Opportunity Response Control Procedure. The Phosphorus and Sulfur Division organizes each department (units) annually to Total Indirect Energy Consumption 10000 tonnes of standard coal 76.68
identify review improve and update the opportunities and risks present in the energy management system.Including: Electricity 10000 tonnes of standard coal 65.58
Assessment Monitoring Response Thermal Power 10000 tonnes of standard coal 11.11Identification
Green Electricity Consumption 100 million kWh 9.80
Each department and The severity and frequency of occur- A comprehensive risk Each implementing department
operating unit must rence of the identified risks must be and opportunity review must conduct assessments of the Total Energy Consumption 10000 tonnes of standard coal 201.38
comprehensively identify assessed and confirmed in strict must be executed at identified risks and deploy targeted
the potential risks and accordance with the established Risk l e a s t annua l l y t o measures based on the assess- Energy Consumption Intensity Tonnes of standard coal per RMB 10000 of revenue 0.69
opportunities inherent in Severity Evaluation Criteria; the valida- systematically validate ment metrics thereby achieving
the management activi- tion of risk severity and frequency of the effectiveness of the the strategic objectives of minimiz-
ties within their respec- occurrence is utilized to mathematical- control frameworks ing or eliminating risk exposure; the
tive jurisdictional grids ly determine the Risk Coefficient thereby proactively standardized methodologies for risk
and conduct rigorous based upon which the specific strate- preventing and mitigat- response strictly comprise: risk
evaluations of all identi- gic mitigation measures to be i n g a n y a d v e r s e acceptance risk reduction risk
fied risks. deployed against the risks are defined. impacts. avoidance and risk transfer.
45 462025 Environmental Social and Governance Report
Energy-saving Measures Water Resource Utilization
Use of Renewable Energy Governance
The Company actively responds to the national “Dual Carbon” goals aggressively driving the optimization of its energy structure within the Xingfa Group strictly complies with the Water Law of the People’ s Republic of China the Law of the People’ s Republic of China on Prevention and Control of Water Pollution
production process and fueling the energy transition through innovative practices to increase the proportion of clean and renewable energy the Regulations on the Administration of Water Abstraction Permits and the Collection of Water Resource Fees and other regulations. It has formulated the Energy Manage-
usage thereby injecting new momentum into sustainable development. The Company prioritized and accelerated the project construction of ment Operation Control Procedure which sets clear requirements for water resource use. Each unit should ensure the circular and cascade utilization of
utility-scale photovoltaic (PV) power stations in the Inner Mongolia and Xinjiang regions alongside distributed PV projects across various subsidi- industrial water and each plant actively implements these measures. Liucaopo Chemical Plant formulated the Administrative Measures for Water
ary locations. The Company plans to complete 1300 MW of utility-scale PV power station projects and 13 MW of distributed PV generation Resource Collection and Utilization with reference to management procedures and completed the quantification and structural optimization of the
projects during the 15th Five-Year Plan period. In terms of hydropower generation the Company has consolidated and managed the small-scale Company’ s water resource utilization through water balance testing. The plant’ s industrial circulating water renovation project was listed as a
hydropower resources in Xingshan under a unified portfolio boasting a total installed capacity of 180.3 MW and an annual power generation provincial-level water-saving demonstration project.output of 500 million kWh.Key Performance Strategy
Risk Identification and Assessment Table for Water Resource Utilization Issues
During the Reporting Period the Company used 980 million kWh of clean electricity accounting for 18.38% of the Compa- Period of Impact of Financial Risk Type Risk Description Impact Value Chain Impact Reponse Measures
ny’ s total electricity consumption. The total installed capacity of photovoltaic projects reached 107.31 MW and the installed
capacity of hydropower stations reached 180.30 MW. The area where the hydropower Reinforcing and fortifying hydropower infra-
station is located may face natural structure to significantly elevate its climate and
disasters such as floods and mud- disaster resilience; formulating comprehensive
Natural slides which can damage the hydro- Increase in contingency plans and emergency response
Disaster power station’ s facilities affect Operating
protocols to ensure swift and decisive mobili-
power generation efficiency and even Short term Operations zation in the event of a disaster; and procuring
Risk lead to power outages causing Costs tailored insurance policies to strategically trans-
economic losses to the enterprise. fer the financial risk exposure of economic
Case: Yichang Park 17 MW PV Project Achieves Grid Connection losses incurred by natural disasters.of Module with the Largest Single-Unit Capacity
Executing long-term secured water supply
Water prices are affected by multiple agreements with purveyors to contractually
factors such as market supply and mandate equitable price indexation and adjust-
demand and policy adjustments. If Increase in ment mechanisms; initiating specialized
Water Price water prices rise Xingfa Group’ s water-saving and conservation projects to
In 2025 all eight inverters at the Company’ s Fluctuation Risk production costs will increase espe-
Long term Operations Operating proactively offset cost inflations triggered by
cially in chemical production process- Costs rising water tariffs; and closely monitoring
Yichang New Materials Industrial Park were success- es with high water consumption regulatory dynamics while actively participating
fully connected to the grid increasing the grid-con- potentially squeezing profit margins. in statutory public hearings regarding water
nected capacity by 2.86 MW. This continuously tariff restructurings to legitimately advocate the
injects strong green momentum into the industrial Company’ s justifiable operational interests.park and also marks that the construction of this The refining of wet-process phos-
project has stepped into a brand-new stage. phoric acid and the production of
electronic chemicals require large Increase in
quantities of high-purity water. The
wastewater contains pollutants such Operating
as phosphorus and fluorine. If the Operations Costs Water Quality Risk Mid-term Intensifying and upgrading real-time automat-purification process fluctuates or the Downstream Decrease in ed water quality online monitoring systems.wastewater treatment fails to meet
standards it may lead to environmen- Operating
tal penalties or customer quality Revenue
claims.Energy-saving through Technology
Opportunity Identification and Assessment Table for Water Resource Utilization Issues
To achieve refined energy management the Company lever-
ages technologies such as the Internet of Things (IoT) big
data cloud computing edge computing and intelligent Opportunity Type Opportunity Description
Period of Impact of Financial
Impact Value Chain Impact Reponse Measures
gateways and continuously develops digital systems to real-
ize functions including visualization of energy consumption
and carbon emissions multidimensional and multiscale Through technological innovation and Actively scaling and replicating the proven
dynamic energy-efficiency assessment and dynamic track- equipment upgrades and by strength- expertise and benchmarks of highly Innovation and ening collaboration with universities Decrease in efficient water-recycling facilities compa-ing and quantification of carbon emissions.Collaboration and research institutions carry out Long term Operations Operating ny-wide; accelerating the intelligent and technology innovation and R&D to digital transformation of wastewater treat-
Opportunity improve the recycling rate of water Costs ment infrastructures; and comprehensively
resources reduce production costs fortifying data governance frameworks for
and achieve sustainable development. water resource utilization.Digital Systems
47 482025 Environmental Social and Governance Report
Impact Risk and Opportunity Management Water-Saving Measures
Use water-saving equipment such as the new anti-fog water-saving cooling tower device and the ANJDP500-6640 high-efficiency
energy-saving water pump.Management Processes
The cooling water for the mechanical seals of transfer pumps in the alcohol removal building of the glyphosate workshop and the meth-
anol recovery area is recycled and reused by being recovered into the mechanical seal water tank reducing the generation of wastewa-
To fundamentally fortify its water risk resilience and response capabilities the Company continuously optimizes and refines its water risk and ter and realizing the recycling and comprehensive utilization of mechanical seal water.opportunity management protocols comprehensively identifying the potential risks and opportunities inherent in its production and operational
activities ensuring rigorous risk prevention and control through the deployment of diversified mitigation strategies and thereby securely guaran- Through operations such as evaporation condensate pretreatment membrane treatment and adsorption filtration the water is supplied
teeing the robustness and long-term sustainability of its water resource stewardship. for production material washing water replenishment and other uses successfully realizing the recycling and comprehensive utilization
of evaporation condensate.Monitoring Through a digital system water resource consumption is monitored in real time and intelligently dispatched to improve water-use efficiency.Identification Assessment Response
By constructing a large-ditch rainwater harvesting system to collect rainwater and surface water which is then recycled and utilized
after purification treatment the Company achieves the recycling and utilization of unconventional water sources.Integrating the macro-envi- Analyzing key matri- Utilizing digital platforms and Formulating precision-targeted
ronment industry sector ces such as the advanced management systems to preventative measures and
dynamics and corporate probability of occur- supervise water resource consump- executing rigorous effectiveness The water usage in the yellow phosphorus and gas production systems is self-circulating.business models to com- rence and the mag- tion while implementing real-time evaluations of the deployed miti-
prehensively identify and nitude of impact to IoT-enabled live surveillance and gation strategies to ensure that Persist in promoting water conservation through blackboard posters bulletin boards signage and OA announcements to strengthen
map the water-related risks s y s t e m a t i c a l l y automated early-warning triggers all water-related risks remain employees’ awareness of water saving.and opportunities confront- execute risk prioriti- across critical operational risk nodes strictly controllable and safely
ing the Company. zation and ranking. within the production process. within acceptable tolerances.Case: Hubei Xingrui Chlor-Alkali Resin Tower Upgrade
Indicators and Targets
The Company continuously optimizes and refines its water stewardship performance indicators deploying a diverse array of water-conservation
measures to relentlessly maximize the efficiency and utility of every singular drop of water thereby successfully achieving closed-loop water During the Reporting Period the subsidiary Hubei Xingrui improved
recycling and the absolute minimization of resource depletion and operational loss. water-use efficiency by upgrading the chlor-alkali resin tower. By introduc-
ing compressed air bubbling from the bottom acid and alkali cleaning
became more uniform reducing water consumption by about 30% and
Indicators Unit Year 2025 saving an estimated 120 tonnes of water per day.Water Consumption Volume 10000 tonnes 2367.25
Water Consumption Intensity Tonnes per tonne of product 1.21
Water Consumption Intensity Tonnes per RMB 10000 of revenue 8.08
Digital Management
Note: Water Consumption = Water Intake ? Wastewater Discharge.The Company has introduced a digital management system. By integrating real-time production data with automation system data via the
Industrial Internet and applying a resource dynamic adjustment model it achieves closed-loop management of dispatch instructions for water
resources and dynamic optimization of planning and scheduling thereby enhancing the Company’ s production efficiency scheduling
Water-Saving Measures efficiency and economic value.Recycling and Water-Saving Management and Control Case: Yichang Park Digital Water Resource Management
The Company attaches great importance to the efficient use of water resources and continuously explores new water-saving measures
earnestly implementing the spirit of the Ministry of Industry and Information Technology and the National Office for Water Conservation’ s Notice
on Deepening the Construction of Water-Saving Enterprises and complying with relevant regulations such as the Hubei Province Water Conservation Regulations and the During the Reporting Period through dispatch monitoring the Company
Hubei Province Water Conservation Action Implementation Plan remaining committed to reducing water use and building water-saving enterprises. created water supply diagrams and monitored plant water operations in
real time; meanwhile through dispatch project management it built an
online dispatch work management system for daily scheduling arrange-
ments to meet day-to-day dispatch needs. Based on real-time analysis it
controlled the optimal water supply to conserve water.
49 502025 Environmental Social and Governance Report
Materials Management Ecology Environment Protection
Management System Xingfa Group consistently adheres to the philosophy of ecology priority and green development respecting adapting to and protecting nature
and actively fulfilling its responsibilities for ecological environmental protection. In strict accordance with domestic and international regulations
and policies such as the Convention on Biological Diversity (CBD) the Kunming-Montreal Global Biodiversity Framework and the Forest Law of the People’ s Republic of
Xingfa Group strictly complies with laws and regulations including the Circular Economy Promotion Law and the Law on the Prevention and Control of Environmental China the Company pays close attention to the potential impacts of its business activities on ecosystems and resolutely avoids carrying out
Pollution Caused by Solid Waste constructing a comprehensive materials management system. The Procurement Department serves as the centralized development and construction in ecologically sensitive areas. The Company continuously drives ecological restoration and natural symbiosis
management entity for packaging material procurement where multiple departments divide responsibilities and collaborate with each other to actions promoting the protection and rational utilization of biodiversity resources thereby contributing strength to realizing the sustainable
achieve a seamless connection across all stages including procurement inspection and acceptance safekeeping and disposal. In the procure- development goal of harmonious coexistence between humans and nature.ment stage a “Zero-Receipt” mechanism for packaging materials that fail to meet environmental protection standards is implemented in accor-
dance with the Administrative Measures for Packaging Materials incorporating environmental performance indicators into the core evaluation of procure- As one of the largest fine phosphorus chemical enterprises in the country the Company has always upheld the philosophy of green develop-
ment specifying relevant standards within contracts and prioritizing the selection of eco-friendly packaging materials. In the inventory disposal ment continuously driving the utilization of its resource advantages to cultivate and transform green new kinetic energy. While reducing its own
stage a classified disposal mechanism is established achieving resource utilization through measures such as internal deployment and promot- environmental impacts the Company actively responds to the national call and fulfills its ecological protection commitments successfully realiz-
ing the replacement of wooden pallets with plastic pallets thereby reducing resource consumption lowering environmental risks and actively ing the harmonious unity of ecological benefits and economic benefits.practicing the philosophy of green procurement.Hazardous Chemicals Management Case: Green Mine Development
The Company attaches great importance to the management of hazardous chemicals. By accessing authoritative third-party databases the
Company has developed and utilized three management methodologies—Artificial Intelligence (AI) applications reservation queuing and The Company unswervingly practices the philosophy of “ecology priority and green development” achieving 100% full utilization of
in-transit tracking—to standardize and supervise the behavior of personnel involved in the transportation process such as hazardous chemical waste rock and tailings and full coverage of greening in mining areas. As of the end of the Reporting Period the Company possess-
vehicles and practitioners. This ensures that vehicles entering the industrial park are legal and compliant enhancing park safety improving park es five national-level green mines namely Xingchang Xinglong Chufeng Shukongping Phosphorus Mine and Wawu Section IV as
transportation efficiency and reducing the workload of salespeople and gatekeepers. The Company’ s management system is integrated with well as one provincial-level green mine which is Houping Phosphorus Mine. Among them Shukongping Phosphorus Mine was
the existing logistics system and access control weighbridge system interfacing hazardous chemical vehicle information with waybill information included as a typical case of ecological restoration by the Ministry of Natural Resources in 2025 and received specific praise from
and access control weighbridges thereby achieving full-process control of hazardous chemical vehicle transportation China Central Television (CCTV). The Company has successively invested over RMB 60 million in the comprehensive governance of
the geological environment of the mining areas and related sites invested nearly RMB 100 million annually in backfilling under-
ground mined-out areas and cumulatively invested RMB 40 million in mine land reclamation and vegetation restoration completing
more than 200000 square meters of soil covering and greening successfully transforming the original waste rock dumps into
Measures for the Utilization of Packaging Materials woodlands and gardens.Focusing on the resource circulation and pollution emission reduction of packaging materials the Company adheres to the principles of “costreduction and efficiency enhancement recycling and utilization and quality priority.” In terms of utilization the Company has launched a series
of measures effectively controlling the generation of waste packaging materials and successfully achieving the standardization and green
reform of packaging materials.Measures for the Utilization of Packaging Materials
Deepen Circular Establishing a comprehensive full-lifecycle recycling and recovery infrastructure for specialized
Utilization Mechanisms packaging materials including circular plastic inner liners reconditioned bulk packaging drums and glycine flexible intermediate bulk containers (FIBCs/ton bags).Exploring the innovative reversible shrink-wrap/stretch-hood packaging modality to signifi-
cantly minimize packaging breakage rates during logistics and transportation thereby
Advance the Green Upgrade reducing waste generation;
of Packaging Technologies
Enforcing precision-driven operations to drastically mitigate packaging attrition and materi-
al leakage/pollution during internal transit and material re-feeding processes.Achieving light-weighting consumption reduction and eco-efficiency of packaging materials
through material optimization and structural simplification;
Implement Light-weighting and
Standardization Reforms for Packaging Proactively guiding customers to widely adopt standardized regular packaging while strategi-
cally compressing differentiated and small-specification packaging categories to minimize the
redundant consumption of packaging resources.Build a Digital Shared Implementing full-lifecycle digital asset tracking and traceability for all packaging materials to
Management Platform maximize internal turnover and utilizing efficiency thereby systematically eliminating the risk of resource idling and expiration-induced obsolescence caused by inventory backlogs.
515202
Innovation
and Quality
Improvement
Driving Industrial
Upgrades
SDGs Addressed in This Chapter
Material ESG Issues Covered in This Chapter
Innovation-Driven Equal Treatment of Small and Medium-Sized Enterprises
Product and Service Safety and Quality Data Security and Customer Privacy Protection
Supply Chain Security
53 542025 Environmental Social and Governance Report
Innovation-Driven Doctoral Graduates 40–50 (inclusive of 50 and above
70 40 exclusive of 50) 57
236
Undergraduate
Governance 849 Under 30
Master’s Graduates (exclusive)
Xingfa Group complies with the Law of the People’ s Republic of China on Science and Technology Progress and advances technological innovation in a 830 608
systematic manner. The Company has formulated the Technical Innovation Management System and the Financial Management Measures for Research and Develop-
ment Expenditure among other policies with the Central Research Institute exercising overall management of the entire innovation process. Organi-
zationally a three-tier R&D system has been established: the top-level leadership group responsible for strategic decision-making and resource 30–40 (inclusive
coordination; the Central Research Institute in charge of project and personnel management; and eight Industry Research Institutes that carry
out the full R&D process. This innovation management system forms a closed loop from strategy to execution effectively supporting innova- of 30 exclusive of 40)
tion-driven and sustainable development. 848
Educational Background Structure of R&D Personnel Age Structure of R&D Personnel
Xingfa Group Technological Innovation Leading Group
Central Research Institute Key Performance
As of the end of the Reporting Period the number of the Company’ s R&D team total is 1749 and R&D personnel accounted for
12% of the total number of employees.
Clean
Microelectronic High-value Mineral
New Silicon-based Green Plant
Advanced Wet-process New Energy
New Materials Protection Phosphorus Phosphoric
Utilization Resources
Materials Chemical Acid of Sulfur Development
Battery
Materials
Research Research Research Research Production Resources and Utilization Research R&D Capability Certification
Institute Institute Institute Institute Research Research Research
Institute Institute Institute
Institute
Relying on its strong R&D strength the Company has achieved a series of results in building innovation platforms and obtaining corporate quali-
fications. As of the end of the Reporting Period there were 13 entities within the scope of the consolidated statements certified as High-tech
Enterprises and 5 entities recognized as Specialized and New (Specialized Refined Differentiated and Innovative) Enterprises. In addition the
Company actively participates in the development of industry standards as a member unit of the Inorganic Chemical Subcommittee the Sulfur
and Sulfuric Acid Subcommittee and the Chlor-Alkali Subcommittee of the National Chemical Standardization Technical Committee working
R&D Process with the industry to promote technological progress and industrial upgrading.R&D Project Assessment
Project Application The Company implements grouped management for research and development (R&D) projects and executes an evaluation model that com-Innovation Project Project Change Acceptance and Appraisal bines quarterly and annual assessments. Each R&D platform is subjected to dynamic management and a quarterly evaluation target must be Project Initiation Implementation and Termination and Evaluation of Project Results formulated for every R&D project. The Technology Center organizes an evaluation team to conduct quarterly assessments scoring the projects
based on the completion status of their quarterly targets and ranking the projects according to their annual scores. The total annual project
bonus for R&D personnel is strictly tied to these rankings.The Company places great emphasis on building its R&D team and cultivating talent. In accordance with the Company’ s Management Measures for
R&D Technical Personnel explicit provisions are made regarding R&D personnel’ s academic background competency standards and selection and R&D Incentives
appointment procedures ensuring the professionalism of the Company’ s R&D staff. The Company encourages employees to actively
participate in professional title evaluations related to R&D organized by relevant national authorities so as to continuously enhance the team’ s
professional caliber and build a specialized high-quality R&D technical team to support the Company’ s long-term development. To reward teams and individuals who have made outstanding contributions to the Company’ s technological innovation work and to stimulate
the enthusiasm of technical personnel for innovation the Company has formulated the Administrative Measures for Science and Technology Achievement
Awards establishing the Science and Technology Award the Patent Award and the Xingfa Group Science and Technology Cooperation Award
which incentivize project teams and individuals in the form of bonuses at the end of each year. During the Reporting Period the Company
distributed RMB 23.54 million in bonuses as innovation incentives.
55 562025 Environmental Social and Governance Report
Strategy Opportunity Identification and Assessment Table for Innovation-Driven Issues
Risk Identification and Assessment Table for Innovation-Driven Issues
Opportunity Type Opportunity Description Period of Impact of Financial Impact Value Chain Impact Reponse Measures
Period of Impact of Financial
Risk Type Risk Description Impact Value Chain Impact Reponse Measures By increasing research and develop-
ment (R&D) investment the Company Escalating R&D capital investments
upgrades and replaces existing prod- incentivizing internal innovation and
Assembling cross-functional and diversified
Product Upgrade ucts develops higher-end and high-
Increase in intrapreneurship ecosystems and
task forces to systematically enhance collabo-
Opportunity er-value-added products and expands
Mid-term Downstream Operating partnering with premium scientific
ration and accelerate critical technological into emerging fields such as new Revenue research institutions to execute breakthroughs; pioneering research and break-
R&D entails uncertainty and energy and electronic materials there- throughs in frontier technologies.the possibility of failure; rapid Establishing specialized monitoring commit- by cultivating new performance
technological iteration can Increase in tees to track real-time technology trajectories growth points.Technology Risk render existing results obso- Long Term Operations Operating and emerging industry paradigms;
lete; technology leaks can Costs Fortifying Intellectual Property (IP) protection Deepening cross-sector integration undermine advantages and with the New Energy Vehicle (NEV) Deepening engagement and collab-
trigger disputes. frameworks and confidentiality protocols and other strategic downstream orative dialogue with downstream while deploying advanced data encryption
Industry Integration Increase in industries developing bespoke and enterprises forging strategic industri-binding non-disclosure agreements (NDAs) al alliances and jointly executing
and mandatory training programs to strictly Long term DownstreamOpportunity custom-engineered products and Operating
expanding commercial horizons to Revenue collaborative technological R&D and prevent and mitigate information leakages
successfully achieve inter-industry co-marketing campaigns to drive and data breaches.synergy and collaborative growth. market expansion.Conducting in-depth front-end research
during the pre-R&D phase to rigorously
analyze customer requirements and market
For newly developed prod- Increase in trajectories thereby achieving precision prod-
ucts if the market demon- uct positioning; Impact Risk and Opportunity Management
strates low acceptance or Operating
insufficient demand it may Operations
Market Risk Long Term Costs
Executing multi-channel marketing campaigns
lead to sluggish sales of the and promotional propagation leveraging Downstream Decrease in The Company continuously optimizes its R&D innovation risk and opportunity management processes implements risk controls across all products thereby making it omnichannel strategies across both digital stages of the R&D process and reduces the likelihood of risks through measures such as improving process management and strengthening
impossible to realize the Operating and physical platforms; market demand analysis thereby ensuring the continuity of technological innovation.expected economic benefits. Revenue Establishing a structured market feedback
mechanism to continuously harvest customer
insights and evaluations for the iterative
optimization and refinement of products. Identification Assessment Response Monitoring
Enhancing corporate budget management Integrating external Evaluating key risk metrics including Fo rmu l a t i n g Conducting rigorous data-driven
Insufficient funds or impeded and optimizing capital allocation to strategi- market environments to the probability of occurrence and the precision-target- effectiveness evaluations of the
financing channels may inter- cally safeguard continuous R&D investments; comprehensively identify magnitude of impact against the back- ed preventative deployed mitigation strategies to
rupt research and develop-
ment (R&D) innovation; Diversifying financing channels deepening
and map the potential drop of existing corporate policies and and mitigation guarantee that all R&D-related
furthermore after the R&D Increase in banking-enterprise syndication and actively risks and opportunities institutional controls to systematically measures for risks remain strictly controllable
achievements are marketized exploring equity financing options to optimize inherent in the corporate execute risk prioritization and formulate high-priority risk and safely within predefined
Funding Risk if there is ineffective promo- Long Term Operations Operating the capital structure; R&D workflows. tiered containment strategies. vectors. tolerance thresholds.tion or impeded sales chan- Costs Empowering high-performance sales teams
nels it may lead to difficulties to formulate precision marketing strategies
in capital recovery thereby pioneer new commercial channels and
adversely affecting the capital deepen strategic partnerships thereby
turnover of the enterprise. expanding market share and accelerating the
cash conversion cycle and capital repatriation.Establishing a highly competitive Total
Rewards framework that delivers premium
compensation comprehensive fringe benefits
Talent attrition and shortage and performance-driven incentives;
constrain research and devel-
opment (R&D) innovation; if Increase in Cultivating a robust corporate culture that
the enterprise is unable to Operating prioritizes employee career development
attract and retain highly quali- Operations while providing institutionalized training
Talent Risk fied professionals it will affect Long Term Costs programs and transparent upward mobility
the stability and innovation Downstream Decrease in and promotion tracks;
capability of the R&D team Operating
thereby constraining the Developing a strategic talent pipeline and
implementation of R&D and Revenue repository executing periodic talent inventory-
innovation work. ing and matrix-based competency assess-ments and proactively structuring strategic
workforce succession plans to mitigate future
vacancy risks.
57 582025 Environmental Social and Governance Report
Indicators and Targets Innovation-driven Measures
The Company actively responds to the national innovation-driven development strategy taking technological innovation as the core driving
force for achieving high-quality development and has formulated a series of clear and ambitious technological innovation goals.Technology CooperationThe Company consistently adheres to the principles of “mutual benefit complementary advantages collaborative innovation and commondevelopment” actively establishing and deepening technical and strategic cooperative relationships with universities scientific research insti-
Technology Innovation tutes and industry partners. Through forms such as jointly establishing R&D centers joint talent cultivation and forming technical breakthrough
teams the Company conducts systematic scientific research collaboration centering on the key needs of industrial development. The Company
carries out near-term concentrated breakthroughs targeting “bottleneck” technologies conducts mid-term pre-research oriented toward strate-
Talent Recruitment: gic key technologies and lays out long-term exploratory research on frontier technologies thereby constructing a layered orderly and goal-ori-
During the Reporting Period the Company newly recruited 20 PhDs and 147 master’ s degree holders. The total number of ented collaborative innovation system.full-time R&D personnel reached 640 including 70 PhDs and 521 master’ s degree holders.Company Cooperation Projects
Innovative Enterprise Development:
The Company completed the application for high-tech enterprise status for four subsidiaries: Longma Phosphorus Industry Inner
Mongolia Xingfa Phosphorus Chemical Research Institute and Trisun Chemical. It continued to advance compliance management Cooperative Partners Cooperation Project Directions
for high-tech enterprises guided the improvement of technical and financial documentation for each high-tech enterprise and
actively responded to on-site inspections by tax authorities.Shenzhen Institute of Advanced 18 cooperative projects. The two sides co-built the “Black Phosphorus Joint Laboratory” ; they
Science and Technology Awards: Technology Chinese Academy conduct a series of industrialization-oriented applied studies focusing on organosilicon materials new
During the Reporting Period the Company applied for and obtained approval for 38 various science and technology projects with of Sciences energy materials black phosphorus and other areas.approved funding grants for science and technology projects totaling RMB 10.935 million (excluding talent-related projects).
47 collaborative projects; jointly established the Xingfa Green Manufacturing Joint R&D Center.
Institute of Process Engineering Conducted technical research focusing on traditional industry technology upgrades energy saving
Chinese Academy of Sciences and consumption reduction process intensification and greener processes.Dalian Institute of Chemical
R&D Goals for the Next Fiscal Year Physics Chinese Academy 2 collaborative projects primarily conducting technical research on bio-based materials and fluoro-sili-
of Sciences cone materials.Technological Innovation Management:
Adhere to a results-oriented approach integrate with market demand and continuously strengthen the standardized management Tsinghua University 6 collaborative projects focusing on process optimization research for organosilicon and glyphosate
of technological innovation projects. products.Wuhan Institute of Technology 20 collaborative projects conducting technical research on smart mine construction and mineral Leverage the collaborative Achieve high collaboration among Research Produc- Accelerate the pilot-scale trials
advantages of Research tion and Sales (RPS) to further drive cost reduction of projects including photoinitia- processing methods.Production and Sales and efficiency enhancement for silicone monomers tors for photoresist electron-
(RPS) to focus on develop- glyphosate iron phosphate and lithium iron phosphate ic-grade phosphine medi-
ing high-value-added thereby elevating the core competitiveness of the cal-grade silicone rubber and Quzhou Institute
2 collaborative projects; jointly established the Quzhou Institute of Zhejiang University–Xingfa Group
products such as high-end products; concentrate resources to tackle the core pyroxasulfone striving to ensure Zhejiang University Joint R&D Center and have carried out technical research in areas such as new organosilicon
phosphorizing agents technical challenges of the Houping gravity-flotation that at least 2 products possess materials and wet-process phosphoric acid.ethanethiol and specialty combined beneficiation process ensuring that produc- industrialization conditions by
electronic chemicals. tion and efficiency targets are fully met in 2026. the end of the year.Talent Attraction:
Employ a two-pronged approach utilizing campus recruitment and social recruitment to intensify talent introduction efforts striving
to reach 100 doctoral holders and 800 full-time R&D personnel by the end of 2026. Case: Xingfa Group and BGRIMM Group carried out exchanges and cooperation
Science and Technology Achievement Management:
Apply for 2 provincial and ministerial-level science and technology awards; achieve the acceptance of 600 patent applications and
the authorization of 300 patents bringing the Company’ s total number of authorized patents to 2000. On August 19 2025 the Company held discussions
with the China ENFI Engineering Corporation (Min-
ing and Metallurgical Technology Group) and
reached a consensus to deepen cooperation.Based on the principles of resource sharing and
complementary strengths both parties will
strengthen collaboration in technological innovation
Key Performance and the application of new technologies in areas
such as mineral processing and automation jointly
promoting the development of smart mines and
During the Reporting Period the research and development (R&D) investment reached RMB 1.319 billion accounting for 4.5% of mechanized mining and facilitating the implemen-
the operating revenue. tation of project outcomes.
59 602025 Environmental Social and Governance Report
Major Technological Innovation Achievements Major Technological Innovation Awards
During the Reporting Period the Company implemented a total of 116 planned innovation projects with significant progress achieved in key During the Reporting Period the Company received a total of 4 awards.projects.The Company’s Technological Innovation Achievements
Project Name Award Achieved Certificate
Innovation Projects Technological Innovation Achievements
Upgrades to Existing Products: Through process optimization electronic-grade sulfuric acid hydro-
gen peroxide and phosphoric acid achieved improved particle control higher purity and yield while
reducing costs and easing capacity pressure.New Materials for Breakthroughs in New Product Applications: High-selectivity hydrogen peroxide and photoresist
Microelectronics stripping solution entered supply; among them high-selectivity hydrogen peroxide achieved domestic
Green Process Key First Prize 2025 Hubei
production and drove profit growth. Equipment and Industri- Provincial Science and alization for the Prepara-
Validation of Key Products: High-selectivity phosphoric acid and aluminum etching solution for tion of Methylchlorosi- Technology Progress Award
display panels completed validation by multiple leading customers and the industrialization of pho- lane Monomers
toinitiators is advancing. (Awarding Authority: Hubei
Provincial People’s Government)
Process R&D: Achieved breakthroughs in organosilicon monomer synthesis and silicon powder
processing and completed the design of a new fluidized bed.Silicon-based Volume expansion of products: The production units for liquid silicone rubber hydroxy silicone oil
New Materials and methyl silicone oil reached and exceeded their designated production capacities successfully accomplishing the annual production and sales targets while achieving cost reductions.New Product Industrialization Progress: Organosilicon synthetic leather foam aerogels microcap-
sules and modified silicone oils achieved sales and completed customer qualification/onboarding.Ferric Phosphate: The product demonstrates notable reliability and cost advantages entering core
New Energy Battery supply chains such as BYD. Key Technologies and
Third Prize 2025 Hubei
Materials Lithium Ferric Phosphate (LFP): The production process achieved a generational leap driving ship- Equipment for Intelligent Provincial Science and
ment growth and significantly reducing losses. Mining and Unmanned Technology Progress AwardHaulage in Complex
Phosphate Deposits
Process Optimization: Glyphosate and 24-D improved conversion rates and output through process (Awarding Authority: Hubei
and formulation ratio optimization lowering unit consumption and generating over tens of millions of Provincial People’s Government)
yuan in annualized benefits.Green Crop Protection New Product Launch: Two glyphosate mixture formulations achieved sales with annual volume
nearing 1000 tons and contributing to profits.New Capacity Construction: A 150 tonnes/year sulfentrazone pilot unit is expected to be commis-
sioned.New Project Commissioned: The nation’ s first phosphine tail-gas-to-phosphorylating-agent project
has been brought online and achieved profitability. Second Prize 2025 China
Cost Reduction and Efficiency Gains: Sales of compounded food additives increased; nano calci- Petroleum and Chemical
Advanced Phosphorus um achieved cost reduction and higher sales; phosphorous sludge treatment improved yellow phos- Key Technologies for Industry Federation Science and
Chemicals phorus recovery rates. Multi-Source Early Warn-
New Product Development: Toothpaste-grade phosphates and barium hydrogen phosphate have ing and Prevention and
Technology Progress Award
completed development or customer testing; projects such as black phosphorus catalysts are Control of Rock Bursts in
advancing to pilot trials. Complex Geological (Awarding Authority: China
Phosphate Mining Petroleum and Chemical Industry
New Production Line Commissioned: The nation’ s first ethylene-route ethanethiol production line Federation)
has started up and achieved stable profitability.High-value Utilization New Product Development: Alkyl mercaptans entered pilot production and polysulfides have com-
of Sulfur Resources pleted bench-scale validation.Catalyst Application: In-house developed catalysts have achieved stable operation and increased
unit load and feedstock utilization.Mineral Processing Technology: After applying staged flotation and middlings re-selection phos- Key Technologies and
phorus recovery increased by 1.59 percentage points despite a decline in ore grade. Industr ia l izat ion of First Prize 2025 Nonferrous
Clean Production of Process Optimization: In the pilot-scale continuous operation of the two-stage phosphoric acid D e s l i m i n g - F r e e Metals Industry Science and
Wet-process P process the aluminum content was reduced by more than 30% meeting the conditions for industri- Reverse–Reverse Flota-
alization. tion for High-Alumina Technology Awardhosphoric Acid
Resource Recovery: Industrial application of fluorine extraction technology increased production of Collophanite and Com-
fluosilicic acid. plex Recycled Water (Awarding Authority: China Treatment Nonferrous Metals Industry
Development and Mineral Processing Optimization: Optimization of gravity-flotation flowsheet and application of new Association)hydrocyclones increasing concentrate yield by over 3%.Utilization of
Mineral Resources Intelligent Mining: Efficient application of a horizontal-axis roadheader and localization of key com-ponents saving more than RMB 2 million annually.
61 622025 Environmental Social and Governance Report
Standards Formulation Innovation Management Training
The Company actively participates in the formulation of various standards dedicating itself to driving industry development. It has led or partici- To improve the technological innovation capability of R&D personnel and enhance market insight the Company conducted technology innova-
pated in the formulation of 119 standards including 2 international standards 37 national standards 43 industry standards 36 group standards tion management training with full-time R&D staff from all R&D platforms participating.and 1 local standard.In February 2025 the International Standard for Glyphosate Technical exclusively formulated by Taisheng Chemical passed the review of the
Food and Agriculture Organization (FAO) of the United Nations and was officially released. This marks the first international standard in the
global glyphosate field to be led by a Chinese enterprise making the “Xingfa Standard” a universal language in international trade.Case: Technology Innovation Management Training
From September 3 to 5 2025 the Company invited Aca-
Name Number demician Xu Chunming from the Chinese Academy of
Sciences Professor Zheng Qiang from Zhejiang Universi-
ty and in-house experts in relevant fields to deliver a
Trisun Glyphosate FAO Standard: International Standard FAO Specification 284/TC special training on technology innovation management
for 630 R&D personnel. The training focused on market
insight demand management marketing strategies AI
Dimethyl Sulfoxide GB/T 21395-2024 applications and integrity education guiding R&D staff
to adopt a market-oriented mindset and to integrate
General Method for the Determination of Heavy Metals in research production and sales thereby further enhanc-
GB/T 23950-2024 ing the Company’ s R&D team in technological Inorganic Chemical Products innovation and achievement transformation.Specification for the Treatment and Disposal of Phosphogyp- GB/T 32124-2024
sum Company Technology Innovation Management Training
Industrial Calcium Oxide HG/T 4205-2024
Technical Specification for the Scientific Use of Glyphosate in
Genetically Modified Glyphosate-Tolerant Maize Fields T/CCPIA 271-2025 Intelligent Manufacturing
To cultivate new quality productive forces and develop smart man-
Technical Specification for the Scientific Use of Glyphosate in
Genetically Modified Glyphosate-Tolerant Soybean Fields T/CCPIA 272-2025ufacturing the Company plans to construct the “Xingfa CloudBrain” artificial intelligence platform in two phases. The first phasewith an investment of RMB 1.2 million will build the “Artificial Intelli-gence Data Center” which contains a structural and property data-
Technical Specification for the Scientific Use of Herbicides in base of no less than 15000 types of phosphorus and new energy
Genetically Modified Glyphosate-Tolerant Maize Fields T/CCPIA 273-2025 materials as well as a professional knowledge base of over 150000 items of literature and patents; simultaneously an expert
system with foundational functions such as data entry and intelli-
gent Q&A will be developed to complete preliminary deployment
Technical Specification for the Scientific Use of Herbicides in and testing. The second phase with an investment of RMB 0.8
Genetically Modified Glyphosate-Tolerant Soybean Fields T/CCPIA 274-2025 million will develop and deploy advanced functions of the expert
system relying on customized large language models and special-
ized algorithms to achieve functions including professional Q&A
Flake Ferric Phosphate T/CI 946-2025 experimental protocol generation and report and document draft-
ing ultimately completing the holistic upgrade and continuousoperation and maintenance (O&M) of the “Data Center + ExpertHigh-Density Ferric Phosphate T/CI 943-2025 System.”
Zero-Carbon Port Evaluation Standard T/AIAC 11-2025 Xingfa Cloud Brain
63 642025 Environmental Social and Governance Report
Intellectual Property Protection Governance
To further standardize and strengthen the management of the Company’ s patents and technical papers protect its independent intellectual
property rights and prevent the leakage of proprietary technologies the Company has formulated the Detailed Rules for Confidentiality Work in Technical
Innovation and the Notice on Standardizing the Process of Patent Application and Technical Paper Publication with the Technology Center taking charge of the Compa- Quality Policy
ny’ s patent applications and management. The Company strictly conducts patent applications in accordance with regulations; for technological
innovation achievements eligible for patent applications no papers shall be published prior to the official filing and acceptance date of the
patent application. By tightly managing the confidentiality of scientific and technological achievements the Company safeguards its R&D
outputs and intellectual property rights. During the Reporting Period the Company obtained 1 PCT international patent for the very first time. Pursuit of Perfection Customer First Innovation-Driven Striving for Excellence in Development
Number of Domestic Patents of the Company (Unit: items) Cumulative Number of Patents Integrity and Trustworthiness Quality First Personalized Service Forging a Century-Old Brand
Number of Newly Added
Patents in 2025
Cleaner Production Circular Development Green Transformation Setting an Industry Benchmark
Utility Model
Patents 207 1116
People-Oriented Respect for Safety Culture-Led Practicing Responsible Care
Domestic
Invention Patents 136 627 Focus on customers continuously improve the quality of products and services adhere to an innovation-driven development strategy and strive to build an excellent enterprise
Number of
Domestic Patents 343 1743
To elevate its quality management level the Company has formulated institutional documents such as the Quality Management System and the
0 200 400 600 800 1000 1200 1400 1600 1800 2000 Lot/Batch Number Management Work Instructions implementing end-to-end and all-dimensional control over raw and auxiliary materials production processes product quality and system operations. Serving as the centralized core management department the Quality Management Depart-
ment is responsible for implementing national quality guiding principles and policies perfecting the quality management system and supervis-
ing the rectification of quality issues thereby building a solid line of defense for quality and safety.Key Performance
The Company takes the Chairman and the General Manager as the core
As of the end of the Reporting Period the Company’ s cumulative number of software copyrights is 46 items and a leadership team to comprehensively coordinate quality management work
233 with the Deputy General Manager assisting in promotion. Multiple depart-cumulative total of trademarks. ments including the Quality Management Department the Technology
Center and the Planning and Assessment Department synergistically work
together to guarantee product quality and safety. Every year the Company
signs the Quality Management Objective Responsibility Statements with its
respective accountable business units cascading down objective responsi-
bilities tier by tier and carrying out rigorous evaluations.The Company actively advances its management system construction and
Product and Service Safety and Quality has successfully passed 13 categories of international certifications includ-ing the ISO 9001 Quality Management System the ISO 22000 Food Safety
Management System and the IATF 16949 Automotive Quality Manage-
ment System. During the Reporting Period the Company conducted inter-
Strictly following relevant legal requirements including the Product Quality Law of the People's Republic of China nal audits and on-site inspections of its quality management system
Xingfa Group has established a sound quality management system that encompasses the entire product executing 8 rounds of internal audits through which 815 issues were iden- The Company Quality The Company Food Safety
lifecycle ensuring that every single link complies with national and industry standards. In September tified and 100% successfully rectified effectively identifying and eliminating Management System Management System
2025 the Company was honored with the Nomination for the 5th China Quality Award standing out as quality hazards and management loopholes.
the sole winning entity in Hubei Province. During the Reporting Period the Company experienced zero Certification Certification
major liability-based product quality accidents.China Quality Award Nomination
65 662025 Environmental Social and Governance Report
Strategy Impact Risk and Opportunity Management
Risk Identification and Assessment Table for Product and Service Safety and Quality Issues In accordance with the Risk and Opportunity Control Procedure the Company conducts comprehensive identification review improvement and updat-
ing of activities within the scope covered by the quality management and food safety systems. Based on the review results each production
Period of Impact of Financial unit prepares its own Risk and Opportunity Assessment and Analysis Report.Risk Type Risk Description Impact Value Chain Impact Reponse Measures
Quality nonconformities may Implementing rigorous quality control for all
lead to administrative penalties Increase in Short term Operations Operating finished products upon dispatch to guarantee Identification Assessment Response Monitoringfor The Company resulting in Costs absolute compliance with relevant national serious negative impacts. standards.Increase in All departments and opera- Executing multi-dimensional risk evalua- Deploying strategic Conducting at least
Discovery of foreign matter in Operating Enforcing zero-tolerance protocols for Foreign tional units must compre- tions across critical vectors—including mitigation options— one comprehensive Technology Risk products leading to customer Short term Operations Costs Object Debris (FOD) and particulate contamina- hensively identify the poten- statutes and regulations product and encompassing risk risks and opportunities complaints or even indemnity Downstream Decrease in tion within the production process. tial risks and opportunities customer requirements property loss acceptance risk review annually to audit claims. Operating inherent within the man- and product quality—to analyze the reduction risk avoid- and validate the effec-
Revenue agement activities under severity of hazards and the frequency of ance and risk trans- tiveness of deployed
Instability in product quality Decrease in Establishing standardized Standard Operating their respective jurisdictions occurrence to calculate the definitive risk fer—to systematical- controls thereby proac-resulting in certain products Mid-term Operations Operating Procedures (SOPs) for all operational posts and and compile a standardized coefficient which in turn determines risk ly mitigate or elimi- tively preventing and fai l ing to meet specif ic Revenue mandating the flawless execution of critical Risks and Opportunities Assessment tiers and mandates corresponding mitiga- nate identified risk mitigating adverse customer requirements. process formulations and stoichiometric ratios. and Analysis Register. tion actions. exposures. impacts.Increase in
Damage to outer packaging Upstream Operating Intensifying daily oversight routine inspections during transit leading to Short term Operations Costs Decrease in and performance audits of third-party contrac-customer complaints or Downstream Operating tors and outsourced service providers.indemnity claims.Revenue Indicators and Targets
Supplier Risk
Increase in
Substandard incoming materi- Operating Institutionalizing stringent gatekeeping and
als triggering non-confor- Short term Upstream Costs incoming inspection protocols for raw materials Quality Management Objectives
mance in product quality. Operations Decrease in Operating upon factory entry.Revenue First-pass Yield: Set differentiated first-pass yield targets for various product categories.Inaccurate forecasting of Conducting robust market demand forecasting
Market Risk market dynamics resulting in
Decrease in to actively advance the New Product Develop-
sluggish product sales and Short term Operations Operating ment (NPD) pipeline and commercialize innova-Revenue Quality Incidents: Zero incidents at Category IV and above; fewer than 2 incidents at Category V.inventory gluts. tive high-value product portfolios.Food Safety Incidents: Zero food safety incidents.Opportunity Identification and Assessment Table for Product and Service Safety and Quality Issues
Annual Key Tasks: Complete the annual key tasks on time and with quality.Opportunity Type Opportunity Description Period of Impact of Financial Impact Value Chain Impact Reponse Measures
As a leading fine phosphochemical System Operation: Ensure the management system operates effectively and is continuously improved.enterprise in China the Company
leads the development of industry
Technology standards and incorporates its tech- Increase in
Opportunity nological advantages into them Mid-term Operations Operating
Conducting robust market demand forecasting to
thereby guiding industry quality Revenue actively advance New Product Development (NPD) The Company consistently upholds the philosophy of excellence in quality and in line with market trends and practical conditions formulates and rigorously imple-
standardizing its own production and ments quality management objectives. Guided by these objectives the Company continuously optimizes production processes and strengthens quality control.helping to improve and stabilize prod- During the Reporting Period the Company achieved all of its quality management objectives.uct quality.Firmly aligning with market dynamics to accelerate
Align with the new energy trend to the velocity of product iteration aggressively com-
lay out the materials industry and
Market Upstream Increase in mercializing and introducing the 3.5-generation build high-quality products by Key Performance
Opportunity Long term Operations Operating product portfolio to the market and proactively enhancing technology and quality to Downstream Revenue pioneering the strategic layout and early-stage increase market share and brand pipeline deployment for the research and develop-
influence. ment of the 4th and 5th-generation technologies.During the Reporting Period the Company’ s product pass rate achieved 100% of the target.Solidifying and driving down quality management
Strict quality control helps The Com- target accountabilities directly to individual produc-
pany attract more high-quality tion units to achieve 100% full-coverage execution
Reputation customers promotes the continuous Increase in
of the Quality Management Target Accountability Pacts; and
Opportunity improvement of product and service Mid-term Operations Operating
establishing an integrated Customer Service
quality and creates a virtuous cycle in Revenue System leveraging an omnichannel communication
which brand and quality reinforce matrix encompassing service hotlines official
each other. corporate websites social media accounts (WeChat Official Accounts) and dedicated emails
to optimize customer engagement.
67 682025 Environmental Social and Governance Report
Measures of Ensuring Product Quality Key Performance
Quality Training During the Reporting Period the Company engaged third-party institutions to conduct spot checks 210 times with a 100%
pass rate for the spot checks.The Company leverages regular and diversified quality training to solidify quality awareness among all employees and to cultivate a culture of
excellence thereby injecting sustained momentum into the Company’ s development and building a competitive edge for its products in the
market. During the Reporting Period the Company organized four sessions of Six Sigma Yellow Belt and Green Belt training and two sessions
of internal system auditor training effectively enhancing employees’ quality awareness and promoting further improvements in product quality.Product Traceability
Key Performance To standardize the Company’ s product batch number management the Company has formulated the Work Instruction for Batch Number Management. By
integrating Internet of Things (IoT) technology and interfacing with systems such as SAP WMS and TMS it combines production equipment
data with production process data to build a “one item one code” product quality traceability system effectively ensuring full-process traceabili-
Quality training reached 380 person-times with a total training duration of 11360 days (closed-door training averaging 29.89 ty of products and improving the overall level of quality management.days per person) and a total of 8 training sessions were conducted.Product Recall
Product Quality Control The Company has established a Product Recall Leading Group as a temporary body to handle product complaints and recall matters. Upon
receiving and confirming complaint feedback it handles the matter promptly in accordance with regulations to minimize the degree of harm.The Company attaches great importance to product quality control. By building a full-process quality management system covering source Each year the Product Recall Leading Group organizes relevant departments to conduct simulation drills of the product recall plan and evalu-
management process management and end-stage governance it comprehensively safeguards product quality and consumer safety. ates the recall implementation process making improvements to identified issues to ensure procedural effectiveness.Management Information Acceptance Investigation and Analysis Product Recall
Product Disposition
Process Source Management Process Management End-of-line Remediation
Upon receiving and Conduct a compre- When there is sufficient For recalled products the manufac-
Formulating rigid institutional Establishing comprehensive proto- Implementing the formalized confirming complaint hensive analysis of reason or evidence indi- turer should set up a designated
frameworks including the Techni- cols such as the Administrative Measures Control of Nonconforming Outputs Procedure i n fo rmat ion f rom relevant product cating that products sold area in the warehouse for isolated
cal Specifications for Raw and Auxiliary for Product Preservation and Protection and to systematically identify isolate distributors or custom- production process by The Company have storage hang prominent labels and
Materials and the Technical Specifications the Food Defense Plan to deploy and manage nonconformities ers the information is information and defects or serious food assign dedicated personnel for safe-
Management for Packaging Materials to enforce through-process safety barriers across raw materials intermediate reported separately to promptly report safety issues an emer- keeping to prevent contamination. If
Measures explicit criteria and stringent across product manufacturing stor- products and finished products the leader of the recall information such as gency recall must be rework is approved after evaluation
limitations on all incoming inputs age and transportation phases thereby eliminating the risk of group and the Quality the p roduc t ion carried out to prevent rework must be organized and the
thereby definitively safeguarding ensuring absolute compliance with market infiltration by substandard Management Depart- quantity of the com- harm or to control and process recorded; if rework is not
product quality at the founda- relevant national safety standards products and systematically miti- ment to analyze the plained product and reduce the consequences possible the products should be
tional source; across all key operational nodes; gating operational quality liabilities. cause and carry out the quantity that of any harm that has downgraded or scrapped according
investigation and han- entered the sales already occurred. to procedures with relevant records
dling. channel. retained.Quality Inspection The Company Product Recall Process
To further improve the Company’ s product quality and better establish its reputation for quality in the market the Company has formulated
the Inspection Management System and the Control Procedure for Consistency of Validated and Certified Products standardizing the inspection of raw and auxiliary Protection of Customer Rights and Interests
materials semi-finished products and finished products as well as the management of inspection personnel. By developing the LIMS laboratory
management system project the Company has centralized and digitized master data such as inspection items methods and standards
improving inspection efficiency and data accuracy. During the Reporting Period all internal inspections related to product quality and food Customer Service Management
safety were compliant.In addition the Company strengthened cooperation with inspection institutions by engaging professional third-party agencies to conduct quality In accordance with the Basic Norms for Enterprise Internal Control the Articles of Association and relevant national laws and regulations the Company has
spot checks on the Company’ s products and purchased raw and auxiliary materials and to issue test reports. During the Reporting Period all formulated the Customer Management System to implement systematic control over the entire customer management process covering all aspects
commissioned inspections were compliant. such as customer information sales activities customer service customer evaluations and statistical analysis. The Marketing Department as the
competent department for customer management is primarily responsible for formulating and improving various customer-related manage-
ment systems supervising and inspecting the customer management work of each business unit and taking the lead in conducting annual
evaluations customer satisfaction surveys and related work.At the same time to standardize complaint handling the Company has formulated the Procedure for Processes Related to Customers to better under-
stand and meet customer needs and improve service quality and operational efficiency.
69 702025 Environmental Social and Governance Report
The Company organizes at least one customer exchange each year to listen on-site to opinions and suggestions resolve customer issues and
improve customer satisfaction levels. Sustainable Supply Chain
Customer Complaint Handling Process
Complaints via
Customer
Service System Governance
Confirmation Investigation Communication and Feedback by Marketing by Relevant Feedback to Customers Handling Centering on the core objectives of “stabilizing supply improving quality and efficiency controlling risks and reducing costs” Xingfa Group is Management Departments Based on Analysis and Results committed to deepening the construction of a sustainable supply chain. To standardize supplier and customer management and in accordance Department Investigation Results Archiving with relevant national laws and regulations and the Articles of Association of the Company the Company has formulated management systems such as
the Procurement Management System the Supplier and Customer Management System and the Supplier Evaluation Measures which clarify supplier admission criteria
Complaints to cooperation processes and risk management measures. Through digital management tools the Company has achieved full lifecycle manage-
Salespersons ment of suppliers. As the centralized management department for the procurement of the Company’ s chemical raw and auxiliary materials
and packaging the Procurement Department is responsible for procurement management–related work. During the Reporting Period the Com-
pany used Party-branch themed activity days and departmental meetings as key vehicles to organize all department staff to study relevant laws
and regulations and Company systems. Focusing on the functions responsibilities and risk points of procurement positions the Company com-
bined case analyses to guide employees to be respectful and rule-abiding; it also urged all staff to maintain a proper work attitude and adhere
Customer Service Hotline:400 060 0141 to integrity and self-discipline principles.Strategy
Risk Identification and Assessment Table for Sustainable Supply Chain Issues
Key Performance Period of Impact of Financial
Risk Type Risk Description Impact Value Chain Impact Reponse Measures
During the Reporting Period the Company received 1 customer complaint with a 100% complaint handling rate.The supply of certain critical raw materi- Based on monthly raw material
als may be interrupted due to sudden demand establish appropriate
incidents such as safety accidents or safety stock expand procure-
Supplier Risk environmental protection–related produc- Increase in ment channels and deploy
tion restrictions which would directly Short term Upstream Operating across multiple sources to
affect the Group’ s production continuity avoid single-channel procure-
and could lead to delayed order deliver- Costs ment.Customer Satisfaction Survey ies.The Company has formulated the Customer Satisfaction Monitoring and Measurement Control Procedure. Each year it conducts satisfaction surveys among
valid customers of self-produced products who had business dealings with the Company during the Reporting Period covering product quality
service price and delivery. For identified gaps in customer satisfaction the Company implements targeted optimization plans at different stages Combine maritime road and
to tangibly improve customers’ recognition of the Company. During the Reporting Period overall customer satisfaction was 91% maintaining a rail in multi-modal transport
high level. and enforce hazardous chemi-cals transport protocols by
supervising logistics partners
Chemical transportation is prone to through contracts;
delays due to multiple factors such as
weather and traffic; hazardous chemicals Work with regulatory authori-
Customer Service Training Transportation carry risks of leakage and explosion. Increase in ties to strengthen oversight;
Risk Accidents can cause cargo loss environ-
Short term Upstream Operating conduct regular inspections
mental pollution and casualties damag- and urge vehicles and person-
To improve the quality of customer service provided ing the Company’ s finances and reputa- Costs nel to implement safety mea-
by employees and increase customer satisfaction tion. sures enforce primary respon-sibilities eliminate hidden risks
with the Company the Company provides employ- and ensure no major safety or
ees with marketing training aimed at enabling them environmental incidents
to better serve customers. throughout the year.Changes in the global economy and Analyze upstream and down-
competitive landscape lead to fluctua- stream raw material markets
tions in chemical demand. If market assess trends and industry
Market Risk shifts are not promptly grasped it may Increase in patterns to time purchases
result in product oversupply or shortages Long term Upstream Operating and broaden information chan-
directly affecting the Company’ s sales
and profits. Costs
nels such as communicating
with industry peers and attend-
ing conferences.Customer Service Training
71 722025 Environmental Social and Governance Report
Opportunity Identification and Assessment Table for Sustainable Supply Chain Issues
Target Achievement:
Opportunity Type Opportunity Description Period of Impact of Financial Impact Value Chain Impact Reponse Measures
Optimize the procurement management structure by establishing a Supply Chain Management Center to strengthen the foundation
Leveraging its minerals green power of procurement management;
and chemical industry chain The
Company achieves efficient resource Decrease in Ferric phosphate and lithium ferric Closely anchoring on the main line of the Company's high-quality development we actively respond to price fluctuations in the raw
Industrial Chain utilization and product value enhance- Upstream phosphate have been built and com- and auxiliary materials market and construct multi-sourced supply and emergency stockpiling mechanisms precisely safeguarding
ment improves profitability and Long term Operating missioned and The Company is the safety and stability of the supply chain. Through standardized procurement and refined management we give top priority to Extension Opportunity Operations
promotes internal collaboration there- Costs actively developing the lithium battery promoting circular and reduced packaging materials strictly control the procurement of high-pollution and high-energy consuming
by reducing costs and increasing materials industry. raw materials and drive emission reduction and carbon mitigation in the supply segment so as to achieve reasonably controlled
efficiency. procurement costs and effectively enhance the sustainable development capability of the supply chain.Deepen strategic cooperation with
suppliers to ensure stable supply and The Company has established strate-
Strategic cost reduction; strengthen cooperative Decrease in
Upstream gic partnerships with some bulk raw
Cooperation R&D with customers to develop customized products improving satis- Long term Operating material suppliers and will join hands Operations
Opportunity faction and consolidating channels; Costs with more high-quality partners in the Supply Chain Sustainable Management
and promote supply chain collabora- future.tion. Supplier Management
Following the sequence of business
Leverage digital technologies to processes the Company has broken down barriers among the 1688 For suppliers of purchased raw materials and packaging the Company conducts annual evaluations and assessments and implements tiered enable data sharing and collaboration
Digital Supply Chain across the supply chain respond Decrease in
Procurement Cloud Platform SAP OA management. Scores are assigned across dimensions such as qualification level evaluation results bid price product quality and after-sales
quickly to market changes accurately Upstream and WMS systems achieving online service and are categorized into four company tiers: A (Excellent) B (Qualified) C (Average) and D (Eliminated). In daily procurement activities Transformation forecast supply and demand optimize Long term Operating integration and traceability of various Operations the Company also sets requirements for suppliers regarding safety environmental protection and integrity and strictly regulate the behavior of
Opportunity inventory to reduce costs and Costs documents and end-to-end digital processing thereby enhancing the our procurement personnel to promote a green compliant and transparent procurement process end to end.improve operational efficiency and
cash turnover. standardization of procurement process management and work
efficiency.Key Performance
Impact Risk and Opportunity Management Total number of suppliers: 280 Number of suppliers with environmental management system certification: 44
To control supply chain risks and prevent major risk events such as supply chain disruptions the Company continuously improves its supply Number of suppliers with quality management Number of suppliers with occupational health and safety management system
chain risk and opportunity management processes formulates diversified response strategies and enhances its risk management capabilities. system certification: 67 certification: 45
Vendor Integrity Agreement signing rate: 100% Number of events in the supply chain with significant risks and impacts: 0 cases
Identification Assessment Response Monitoring
Note: The statistical scope is limited to the headquarters of the joint-stock company Yichang Campus and Yidu Campus
Integrating macro-in- Rigorously analyzing risk root causes Designing and Execu t i ng pe r i od i c
dustry paradigms and underlying causal mechanisms inter-fac- deploying preci- data-driven effectiveness
underlying raw material tor correlations and the cascading sion-targeted evaluations and compliance
price fluctuation trajec- transmission dynamics and cross-tier risk-mitigation audits of the deployed miti-
tories to comprehen- propagation of risk impacts throughout toolkits preven- gation controls to guaran- Digitalization Development
sively map and identify the supply chain ecosystem whilst eval- tative controls tee that all procurement-re-
specific risk vectors uating key operational metrics—includ- and structural lated risk exposures remain
and strategic opportu- ing the probability of occurrence and hedging strate- strictly insulated manage- To achieve high-efficiency operations across the entire process of procurement busi-
nities embedded across the magnitude of severity—to systemati- gies tai lored able and within predefined ness the Company breaks down systemic silos by interconnecting the 1688
the entire procurement cally execute mathematical risk classifi- directly to estab- corporate risk tolerance Procurement Cloud Platform SAP OA system and WMS system in accordance with
lifecycle. cation and stratification. lished risk strata. thresholds. the sequence of business workflows. This integration enables online tracing and cen-
tralized checking of documents including purchase requisitions price comparison
sheets order contracts warehouse receipts and invoices while realizing end-to-end
digital processing of digitalized ordering inspection/acceptance and financial settle-
ment thereby significantly upgrading the standardization level and operational
Indicators and Targets efficiency of procurement workflow management.During the Reporting Period the Procurement Department focused on the Company’ s production and operation objectives actively responded
to market fluctuations continuously optimized procurement management concentrated on implementing annual targets and ensured the
stability of the supply chain. Procurement Cloud Work Platform
73 742025 Environmental Social and Governance Report
Equal Treatment of Small and Medium-Sized Enterprises Information Security Management Measures
During the Reporting Period the Company strictly complied with the Law of the People’ s Republic of China on the Promotion of Small and Medium-sized Enterprises To comprehensively ensure information security the Company has established a series of information security protection measures.and the Regulations on Ensuring Payments to Small and Medium-sized Enterprises among other laws regulations and policy requirements and consistently
adhered to the principles of fairness and impartiality treating all partner enterprises equally in the course of business. During the Reporting
Period the Company did not have any arrears of payments to SMEs effectively safeguarding the legitimate rights and interests of SMEs and Information Security Protection Measures
maintaining sound business partnerships.Protective Measures Content
Classify data by sensitivity and business importance and implement differentiated protection measures including
Data Classification access control encrypted storage and secure transmission.Information Security and Privacy Protection and Protection Employing the AES-256 encryption algorithm for sensitive data and strictly implementing robust data destruction mechanisms.Enforcing access control models anchored on the Principle of Least Privilege (PoLP) and establishing a centralized
Information Security Management System Identity and Access Management (IAM) platform;Utilizing encrypted channels—such as Virtual Private Networks (VPNs) or dedicated leased lines—for all internal and
Data Access and external data transmissions with a strict prohibition on the plaintext transmission of sensitive data;
Xingfa Group strictly complies with the Cybersecurity Law the Operations Security Deploying a multi-layered Defense-in-Depth network security architecture encompassing firewalls Intrusion Detec-
Data Security Law the Personal Information Protection Law and other tion/Prevention Systems (IDS/IPS) and enterprise anti-virus solutions;
laws and regulations establishing and improving its informa- Installing biometric/electronic access controls and continuous video surveillance implementing full-disk and cryp-
tion security management system and continuously tographic encryption on critical hardware assets thereby mitigating the risk of data breaches stemming from device
strengthening security construction and technical protection. theft or physical asset loss.Adhering to the principles of “full participation preventionfirst continuous improvement and compliant operations”
the Company formulates documents such as the Information Conducting periodic cyber risk posture assessments and executing time-sensitive patching and remediation of Risk Monitoring and system vulnerabilities
Security Management Regulations based on laws regulations and
internal rules and builds a robust defense through mea- Security Auditing Establishing a robust IT compliance and forensic auditing framework to periodically review system logs and user
sures including information classification access control operations thereby ensuring absolute traceability and non-repudiation of all user actions.password management and system and network security.As the competent management department the Informa- MLPS (Cybersecurity Multi-Level Protection) Certification Institutionalizing a three-tiered data redundancy strategy for critical assets spanning local off-site and real-time
tion Center is fully responsible for system construction risk synchronous backups;
assessment and continuous improvement. As of the end of Data Emergency Conducting periodic stress tests on hardware infrastructure and software systems alongside executing aggressive
the Reporting Period both the Company’ s OA system and Management penetration testing and vulnerability scanning;
the Company website have passed the Cybersecurity Formulating simulating and regularly exercising the formalized Information Systems Contingency and Emergency Response Plan to
Multi-Level Protection Scheme (Level 2) certification. ensure systemic resilience.Engaging in strategic dialogues on emerging security trends and technical frameworks and conducting deep-dive
Technology case studies and empirical experience cross-sharing with industry-leading cybersecurity and data protection
Cooperation vendors including IP-guard and Sangfor Technologies; and executing formal binding contracts with IP-guard to joint-ly catalyze the comprehensive fortification and systemic elevation of the corporate information and data security
Case: “Digital Security Casts a Shield”—Ransomware Intrusion posture.Emergency Response and Compliance Handling Drill
On December 16 2025 the Company conducted a phishing email attack drill to test emergency procedures and device monitor- Formulating a comprehensive data security training blueprint and deploying tailor-made role-specific curricula
ing capabilities strengthen employees’ security awareness and standardize handling procedures. After the drill a summary and mapped to distinct cohorts—including executives technical specialists operational personnel and new hires—
rectification were carried out and employees who did not pass received retraining. Training and encompassing data security laws and regulations institutional workflows technological defense matrices and empir-
Culture Building ical case analyses; mandating organization-wide participation across both dedicated e-learning platforms and offline intensive training with completion milestones directly tied to individualized performance appraisal and compensation
evaluation systems. During the Reporting Period the Company successfully cross-verified and logged an aggregated
record exceeding 15000 attendee-times in online cybersecurity educational course completions.Key Performance
Data security/customer privacy protection training reached 16658 person-times with a training coverage rate of 90% and an Customer Privacy Protection
average training duration of 1 hour per person.The Company strictly protects customer privacy and does not proactively collect personal sensitive information; customer data primarily relies
on public information from platforms such as Tianyancha. Internally by integrating the CRM and OA systems and enforcing strict access
approval processes the Company ensures both efficiency and security throughout its digital services. During the Reporting Period the Compa-
ny experienced no data leakage incidents.
757603
Win-Win
Collaboration
Build Better
Communities
Together
SDGs Addressed in This Chapter
Material ESG Issues Covered in This Chapter
Protecting Employees’ Legal Rights and Interests Social Contribution
Employee Training and Development Rural Revitalization
Occupational Health and Safety
77 782025 Environmental Social and Governance Report
Protection of Employee Rights and Interests The Company utilizes highly diversified recruitment channels across both campus talent acquisition and lateral professional hiring encompassing online recruitment platforms social media sourcing offline talent expos industry symposiums and university career fairs to ensure a comprehen-
sive network for attracting and selecting premier talent thereby continuously injecting fresh vitality and momentum into the Company’s sustain-
able development. Concurrently the Company actively aligns with national policies and firmly upholds the core tenets of diversity equity and
inclusion (DE&I) granting preferential employment to qualified military veterans and proactively offering accessible employment opportunities for
Compliant Employment individuals with disabilities.Recruitment Channels
Xingfa Group adheres to the principles of openness fairness and impartiality upholds the concept of equal employment strictly complies with
the Labor Law of the People’s Republic of China and other laws and regulations and has formulated the Human Resources Management System and the Hiring
Procedures Compliance and Fairness Transparency to regulate employee recruitment processes in accordance with the law. The Human Resources Depart-
ment as the competent management department for the Company’s recruitment is primarily responsible for workforce demand analysis job Social Recruitment Campus Recruitment
posting resume screening interview scheduling background checks and onboarding arrangements.During the Reporting Period the Company issued the Notice on Regulating the Company’s Recruitment Processes which specified a template for interview
question lists focusing on assessing candidates’ professional competencies and job fit while avoiding inquiries into private information and implicit University Partnerships: Establishing university–enterprise cooperation
bias arising from interviewer stereotypes. In addition to ensure recruiter professionalism the Human Resources Department organizes unified with multiple well-known domestic universities including comprehensive
training for recruitment personnel; those who have not participated in the training are not allowed to conduct recruitment independently. Online Recruitment: BOSS Zhipin 51 Job universities and science and engineering institutions.yingjiesheng (www.yingjiesheng.com) Campus Dual-selection Fairs: Participating in dual-selection fairs and
On-site Recruitment: Career Fairs Industry Exchange other activities organized by universities to directly introduce corporate
Meetings culture and recruitment needs to students.Online Recruitment: Leveraging multiple online recruitment platforms
Recruitment Process such as 51 Job and yingjiesheng (www.yingjiesheng.com).Resume Written Test and
Submission Comprehensive Assessment Interview Offer Agreement Signing
Xingfa Group New Employees Statistics
By Gender
Key Performance By Age Group By Region
327
152 Female Under 30 years old (Excluding 30)
As of the end of the Reporting Period the Company and its subsidiaries had a total of 14580 employees including 1145 37 Mainland China
7.85 106 Male Ages 30–40 (Including 30 Excluding 40)employees from ethnic minority groups accounting for % and employees with disabilities. Overseas
653 Ages 40–50 (Including 40 Excluding 50)
103 50 years old and Above
644769
Xingfa Group Employee Statistics
To safeguard the lawful rights and interests of campus recruits the Company has formulated the 2026 Xingfa Group Campus Talent Recruitment Brochure the
By Gender By Age Group By Region Notice on Clarifying Job Assignments and Benefits for 2025 Campus-Recruited Graduates and the Notice on Issuing the Recruitment Plan for 2026 Full-time University Graduates specify-
1826 ing position-aligned major requirements and talent benefits. In 2025 the Company recruited a total of 657 undergraduate and above students through campus recruitment from 93 domestic and overseas universities including Tsinghua University and Fudan University covering 28 provinc-
3174 3454 Under 30 years old (Excluding 30) 14359 es and municipalities and 12 ethnic groups.
Mainland China
Ages 30–40 (Including 30 Excluding 40)
Female
Ages 40–50 (Including 40 Excluding 50) Hong Kong Macao
Male and Taiwan in China3722 50 years old and Above Overseas
1140655789
212 Diversity Equity and Inclusion
In accordance with the requirements of the Labor Law of the People’s Republic of China the Company has formulated the Provisions on Prohibiting the Use of Child
Labor and Opposing Employment Discrimination to ensure that candidates meet the national statutory minimum working age avoid the inadvertent hiring of
By Job Level By Education Level By Function child labor provide regular anti-discrimination training for the recruitment team and strictly prohibit any form of employment discrimination.
14 73 During the Reporting Period the Company did not experience any labor discrimination incidents.
903 802 440 The Company attaches great importance to protecting women’s rights and interests and has drafted the Notice on Maternity Leave Duration and Benefits for
Below Bachelor’s Degree 124 Production Female Employees and the Notice on Proper Internal Retirement Work for Female Employees to safeguard women’s rights. At the same time the Company
Senior Management 4188 Bachelor’s Degree Technology implements multiple benefit policies to ensure that every female employee can genuinely feel care and respect.726
Middle Management Master’s Degree Sales
Other Employees Doctorate (PhD.) 2097 Finance
Administration
13663951711193
79 802025 Environmental Social and Governance Report
Employee Benefits
The Company consistently anchors the elevation of employee compensation and welfare on equal footing with the growth of corporate financialperformance. While rigorously executing its statutory obligations by contributing to the national “Five Social Insurances and One Housing ProvidentMeasures for Women’s Welfare Fund” system the Company has strategically formulated and deployed multiple layers of premium corporate benefit policies explicitly enabling
the workforce to share the dividends of corporate reform and strategic growth thereby comprehensively enhancing the overall quality of life and
cultivating a profound sense of workplace well-being among all employees.Through employee representative meetings seminars and exchange sessions the Company listens to female employees’
proposals and discusses and implements the adopted proposals after the meetings;
Purchase special disease and Ankang insurance (health insurance) for all female employees and assist employees who fall ill Policy Items Item Details
with claims;
Conduct gynecological check-ups for female employees once every two years;
Basic pension insurance basic medical insurance work-related injury insurance maternity
Policies related to the second and third child births are introduced and employees giving birth to a second or third child are Social Security Items insurance unemployment insurance housing provident fund annuity
given a one-time reward. Female employees are entitled to 1 year of maternity leave per child.Hygiene allowance underground work allowance on-duty allowance vehicle allowance
(car reform subsidy) cooling allowance only-child allowance review and lecturing fee
phone allowance construction site allowance team leader allowance (safety responsibility
The Company has set up accessible pathways and elevators and other facilities to meet the needs of special groups demonstrating the Compa- Allowances and Subsidies allowance) relocation allowance second-child reward night shift allowance master-ap-
ny’s active practice of the principles of equality and inclusion. prentice mentorship allowance skills allowance meal allowance transportation subsidy
blood donation allowance medical subsidy O&M allowance internal auditor allowance
housing allowance child college enrollment subsidy talent allowance
Accessible Elevator Accessible Ramps
Nursing expenses during hospitalization for work-related injuries one-time disability
Benefits Program employment subsidy employee convalescence holiday supplies supplemental medical insurance assistance for employees in hardship heatstroke prevention and cooling sup-
plies physical examinations and work uniforms (non-labor-protection uniforms)
Key Performance
During the Reporting Period the employee social insurance coverage rate was 100%.Additionally the Company establishes and refines a robust long-term incentive architecture by implementing Stock Option and Restricted Stock
Remuneration and Benefits Incentive Plans tailored for sitting directors senior executives core managerial officers and mid-level management professionals thereby creating
a strategic fortress for stabilizing critical human capital and unlocking prolonged value appreciation.Employee Remuneration
The Company structures an equitable and rational compensation architecture complemented by a scientifically driven performance evaluation Key Performance
mechanism. Within the corporate rewards framework total remuneration primarily comprises a dual-engine model of base salary and perfor-
mance-linked incentive pay; the incentive portion is managed and evaluated by the Human Resources Department leveraging the rigorous “2-7-1”
forced distribution performance grading methodology. This assessment multi-dimensionally measures individual performance across critical During the Reporting Period the Company completed the 2025 employee stock ownership plan with a total of 1355 employees
vectors—including professional behavior deliverable quality and team-building efficacy—thereby fully accelerating employee proactive engage- subscribing for RMB 265.03 million.ment and innovation-driven capabilities fostering individual career development and driving the seamless realization of the Company’s
macro-strategic visions and operational milestones.To ensure compliance in remuneration management the Company issued the Notice on Further Regulating Work Related to Remuneration Management requiring
all production and operation units to strictly assess and allocate wages according to the assessment plans issued by the Company and to
complete the payment of Five Social Insurances and One Housing Fund enterprise annuities and supplemental medical insurance.
81 822025 Environmental Social and Governance Report
Democratic Governance Resolution of Labor Disputes
The Company takes a highly responsible attitude toward employees’ rights and diligently fulfills the responsibilities of the employee representative
assembly. It actively builds a democratic management system centered around the employee representative assembly. Through the continuous The Company has established the Rules of Work of People’s Mediation Committee and set up the People’s Mediation Committee of Xingfa Group to define
and steady establishment of key democratic management platforms such as the representative assembly and trade unions the Company responsibilities work principles the rights and obligations of mediation applicants and the mediation process. In the event of a labor dispute that
promotes democratic management towards standardization institutionalization and rule of law comprehensively safeguarding employees’ legal has not yet been submitted for arbitration the Company prioritizes negotiation with the employee striving to continue fulfilling the employment
rights.. contract or mutually agreeing to terminate the contract. If no agreement can be reached and the Company is required by law to terminate the
employment contract except when the employee has seriously violated rules and regulations or other statutory situations the Company will notify
During the Reporting Period the Company organized and convened the employee representatives in a standardized manner took representatives’ the union in writing and obtain its written consent. The Company will notify the employee in writing 30 days in advance and proceed with the
proposals seriously and processed them achieving a 100% proposal handling and reply rate with representative satisfaction above 95%. employee’s departure procedures within the prescribed time providing a resignation certificate.Key Performance
Case: The Fourth Session of the Fifth Employee Representatives’ Congress
During the Reporting Period the Company and its subsidiaries experienced 9 labor dispute cases in total of which 4 were
closed and most were properly resolved through mediation.The employee representatives’ con-
gress reviewed and approved import-
ant items such as Xingfa Group’ s Ten
Safety and Environmental Protection Labor Dispute Handling Process
Prohibitions enterprise annuity and
supplemental medical insurance
employee handbook individual labor Acceptance Fact Investigation Consultation Follow-up and Registration and Mediation Processing Case Processing and Archivingcontracts and collective labor con-
tracts fully demonstrating the key role
of democratic management in corpo-
rate governance.Resignation Management
The Company has formulated the Measures for Handling Matters Related to the Performance of Labor Contracts clarifying various scenarios and corresponding
strategies during the process of contract fulfillment thereby safeguarding the legitimate rights and interests of both parties and ensuring the strict
performance of contracts. Meanwhile it has also formulated the Procedural Statement on Employee Separation/Dismissal and the Measures for the Administration of
Employee Mobility expounding on the complete process for employees’ voluntary resignation or dismissal due to special circumstances. Clear and
standardized specifications are provided across all links—from application and approval to subsequent handover and formalities—ensuring that
Key Performance relevant operations are legal compliant fair and just maintaining a harmonious relationship between the Company and its employees and fueling
the Company’s steady operations.During the Reporting Period the Company held 3 employee representatives which reviewed and approved 7 items. The labor Key Performance
union also reviewed and approved 7 items with 100% of the employees on duty being labor union members.During the Reporting Period the Number of employee departures for the Company and its subsidiaries was 555 people and
the overall employee turnover rate is 4% for 4 consecutive years declined.Employee Communication Channels
The Company attaches high importance to communication and interaction with employees promptly transmitting information and extensively
collecting employee feedback and appeals through multiple channels including employee symposia Workers’ Congresses the Xingfa Group
Newspaper broadcasts bulletin boards and the OA office system. Meanwhile the management team regularly ventures deep into the frontlines of
production for field research frequently convening specialized meetings on-site to dissect and resolve production and operation bottlenecks as
well as hardships encountered by employees in their work and daily lives. By effectively resolving practical difficulties for employees the Company
fully stimulates their work enthusiasm and fosters a positive and upward corporate atmosphere.
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Care for Employee Employee Assistance
Upholding a people-centered philosophy the Company firmly believes that employees are its most valuable asset. To carry out annual home visits
Employee Activities and condolence activities for employees in need the Group’s labor union developed a detailed “Warmth to Your Home” plan and established a long-term mechanism to focus on and assist employees facing hardship. During the Reporting Period the Company revised its assistance policy
for employees in difficulty clarifying the beneficiaries and standards for assistance to employees in difficulty employees with serious illnesses
The Company values employees’ physical and mental well-being as well as team cohesion and fosters a positive organizational atmosphere employees suffering major disasters and deceased employees. Through official account articles the Company further deepened and solidified
through diverse activities. During the Reporting Period the Company organized team events such as the Spring Festival Gala and parent-child the “Warmth Delivery” initiative to ensure no employee is left behind.team building sports events including the employee sports meet and badminton as well as occasions like International Women’s Day and the
May Fourth themed gala meeting employees’ cultural and social needs and strengthening corporate cohesion.Xingfa Group Employee Assistance Measures
Spring Festival Gala Music Caravan
Serious Illness Medical Assistance: For employees incurring high medical expenses due to major illnesses provide tiered financial
support based on out-of-pocket costs to ease the medical burden;
Work-related Injury Assistance: For employees disabled by work injuries whose daily life and work are affected provide dedicat-
ed financial aid to ensure basic livelihood;
Deep Hardship Assistance: For families of employees facing exceptional difficulties such as heavy family burdens and low per
capita income provide assistance at the highest standard to precisely address core livelihood challenges;
Relative Hardship Assistance: For employees with general living difficulties such as children’s education or elderly care provide
basic assistance funds to ease day-to-day pressure;
Disaster Relief Assistance: For employees whose lives are thrown into hardship by natural disasters or sudden accidents provide
financial relief based on the extent of the loss;
Funeral Assistance Support: For the families of employees who pass away while in service a one-time special funeral allowance
is provided to ease their financial burden and convey the Company’s care.Key Performance
Employee Sports Meeting May Fourth Activities
During the Reporting Period the Company’ s total expenditure on employee assistance reached RMB 1.5086 million
providing targeted relief to a total number of 244 employees in distress.Employee Training and Development
Employee Training Xingfa Group Training SystemClosely centering on the strategic goal of “building a domestically Brand Training Program Systemrenowned chemical vocational training brand” Xingfa Group com-prehensively advances four major tasks—“management upgradingNational Defense Education Parent-Child Activity Badminton Friendship Tournament resource construction project landing and business expansion”— Leadership Management Cadres Quality Middle Managers Grassroots Managers and has formulated the Measures for the Administration of Employee Training Improvement Program Development Program Development P rogram
with the Human Resources Department serving as the centralized
core management department for employee training to fully coordi-
Professional Position
nate training initiatives. Professional Skills Training Training
Engineering
The Company has constructed a comprehensive training curriculum Professional
Marketing
Management & Trade
Competence Safety Chemical Mechanical Intelligentization Electrical &
system covering all employees around six professional categories Special Engineering Special Training Financial Party & Mass Training Skills Training Instrumentation Program Management OrganizationSpecial Training
including safety specials chemical skills intellectualization specials Program Program Program Human R&D Resources Management
business specials management capabilities and mechanical electri-
cal and instrumentation (MEI) skills while establishing multi-level
advanced progression pathways. Relying on the online training acad- Overall University Graduate Internal Quality Course Comprehensive Talent Capacity Induction Program Development Program Development Program
emy and the SAP system to build an information platform the train-
ing adopts a combination of online and offline methods. Employees
complete course selection studying and examinations through the Internal Trainer Development Program
platform and certificates are issued upon passing thereby achieving Resources E-learning Platform Internal Trainer Courseware Creation
end-to-end digitalized management of the entire training process. Training Competition
85 862025 Environmental Social and Governance Report
Key Performance
Case: “Embark on a New Journey Strive in the Prime of Youth” 2025 Campus Recruitment New Graduate Onboarding Training
During the Reporting Period the Company and its subsidiaries invested a total of RMB 28.285 million in employee training con-
ducted 134 offline training sessions with 14259 attendances delivered a total of 1423936 training hours with an average
On July 8 2025 the Company held a kick-off ceremony for the new
employee onboarding training welcoming 661 graduates from 93 of 97.66 hours per employee and achieved a training coverage rate of 97.8%.universities including Tsinghua University and Zhejiang University.The training conveyed the values of “innovation responsibility integ-rity and hard work” and offered courses centered on corporate
culture and career transition to help new employees integrate quick- To standardize the management of the Company’ s trainer fleet and build a high-quality team of instructors the Company adheres to the prin-
ly. This initiative reflects the Company’ s full-chain investment in ciple of “attaching equal importance to internal and external resources” and has formulated the Measures for the Administration of Trainers. The Training
talent attraction development utilization and retention and consoli- Center is responsible for the cultivation and daily management of the trainer fleet including the selection appointment and performance
dates the talent foundation for future growth. appraisal of trainers dedicating itself to forging a high-quality and professional trainer fleet to provide a solid guarantee for the Company’ s training initiatives.Onboarding Training for Campus-Recruited Graduates
Case: Management Cadre Competency Enhancement Program Employee Promotion
The Company attaches great importance to talent development and appointment. On one hand it has established four major career develop-
On June 3 2025 the 28-day systematic training of Xingfa Group’ s fourth cohort of management cadre training concluded. Cen- ment tracks—management technology marketing and skills—providing growth paths and a stage to showcase talents for different types of
tered on the main thread of “strategic thinking - managerial capability - digital-intelligent transformation” the program offered personnel. On the other hand in terms of talent utilization the Company focuses on appointing outstanding individuals from the recruited
sixteen courses including corporate strategy digital transformation new-quality productive forces and financial statements. Break- university graduates selecting excellent middle and primary-level management and technical personnel through methods such as tier-by-tier
ing with tradition it adopted methods such as case discussions and five-dimensional points-based evaluations and organized recommendation and appraisal internal open competitive examinations and external public recruitment thereby stimulating team vitality.on-site visits to drive the conversion of knowledge into practical application.Career Pathway Diagram
Corporate Executives
Top-Tier Research Institute
Three Chief Engineers & Associate Researchers (Project Technical Economic)
Assistant to Head of Deputy Chief Engineer
General Manager Head of Tier-1 Subsidiary Business Department
Training Courses (including Accounting Economics)
Grade 3 Researcher Chief Technician
Department Deputy Head of Senior Engineer Special-Grade
Head Head of Tier-2 Subsidiary Business Department (including Accounting Economics) Grade 4 Researcher Technician
Deputy Department Business Manager Principal Engineer Head Head of Tier-3 Subsidiary (including Accounting Economics) Grade 5 Researcher Senior Technician
Department
Grassroots Assignment Deputy Business Associate Principal Engineer Case: 2025 “Xingfa Craftsman Cup” Employee Skills Competition Assistant Manager (including Accounting Economics) Grade 6 Researcher Technician
Grade 1 Clerk Business Manager Assistant Engineer (including Accounting Economics) Grade 7 Researcher Senior Skilled Worker
On October 24 2025 multiple employees participated in training and competition for the Tourism Comprehensive Service Atten- Assistant Engineer Intermediate
dant event of the 2025 “Xingfa Craftsman Cup” Employee Skills Competition. After multiple rounds of selection 18 semifinalists Grade 2 Clerk Business Supervisor (including Accounting Economics) Skilled Worker
underwent a month of intensive training and ultimately achieved outstanding results setting an example for young employees.Grade 3 Clerk Sales Representative Junior Skilled Worker
Apprentice
Administrative
Management Production Management Marketing Project & Production / Finance / Economics R&D 8-Grade Workers
Management Track Marketing Track Technical Track Skilled Worker Track
Xingfa Group has formulated the Employee Position Change and Work Handover Management Guidelines in accordance with the Company Law of the People’ s
Republic of China the Labor Law of the People’ s Republic of China and other relevant national laws and regulations as well as the Articles of Association and the
Employee Skills Competition Human Resources Management System. These guidelines aim to standardize the work handover process during employee position changes. The Human
Resources Department responsible for managing both position changes and work handover oversees the entire process whenever an employ-
ee changes roles.
87 882025 Environmental Social and Governance Report
Occupational Health and Safety Strategy
Risk Identification and Assessment Table for Occupational Health and Safety Issues
Risk Type Risk Description Period of Impact of Financial Reponse Measures
Governance Impact Value Chain Impact
Enhance the provision and
Xingfa Group strictly follows the requirements of relevant laws and regulations including the Law of the People’ s Republic of China on Safety Production and management of personal
the Law of the People’ s Republic of China on the Prevention and Control of Occupational Diseases to build a sound safety system and organizational structure. Employees who are exposed to chemical protective equipment; regularly
Through measures such as organizing emergency drills and implementing hazard identification and rectification the Company comprehensively materials for extended periods may Increase inHealth Risk develop occupational diseases such as Mid-term Operations Operating organize occupational health
safeguards operational safety and employees’ occupational health constructing a solid safety defense line for talent development and stable respiratory illnesses poisoning and other Costs check-ups for employees; and
corporate operations. During the Reporting Period the Company experienced zero major production safety accidents. health issues. optimize production processes to reduce exposure to harmful
The Safety Production Committee undertakes the heavy responsibility of comprehensive leadership and supervision of safety management substances.work thereby strengthening production safety management effectively preventing and reducing the occurrence of various safety accidents
and has formulated relevant regulations such as the Safety Management System. In addition the Company signs Safety Production Responsibility
Statements with its employees to ensure that the production safety management work comprehensively and meticulously covers every single Refine safety operating proce-The operation of chemical production Increase in dures and strengthen safety link. During the Reporting Period the Company passed the ISO 45001 Occupational Health and Safety Management System certification.Safety Risk equipment is complex and may result in accidents such as mechanical injuries Short term Operations Operating
training for employees; regular-
Costs ly maintain and service equip-electric shocks and other hazards. ment; also install safety
protective devices.Work Safety Committee
Overseeing the “integrated” operation of occu- Establish and improve the
pational health management and the supervi- occupational health and safety
sory management of production safety. The occupational health and safety man- Increase in management system; and
Management Risk agement system is incomplete with Long term Operations Operating strengthen internal supervision
ineffective implementation. Costs and assessment to ensure
effective implementation of the
Production Units Leadership Office of the Work Safety Committee system.Level
Be responsible for managing occupational hazard factors at Formulate the Company’ s occupational
production sites; establish occupational health management health management systems draw up occu-
files in accordance with occupational health record standards; pational disease prevention plans and coordi-
review and accept the “three simultaneous” occupational nate occupational health management work. Opportunity Identification and Assessment Table for Occupational Health and Safety Issues
health requirements for new renovated and expanded
construction projects. Decision-making Level Grassroots Work Safety Committees Opportunity Type Opportunity Description Period of Impact of Financial Reponse Measures
Human Resources Supervise and guide the prevention
Impact Value Chain Impact
and control of occupational hazard
Responsible for employee occupational health examinations factors at production and opera- Increase investment in
and for establishing standards for the distribution of labor Intelligent technologies can be used tion sites. research and development for remote equipment monitoring and
protection supplies; coordinate with labor protection collaborate with research automated operations reducing
authorities to conduct occupational disease assess- Technology institutions introduce and inde-on-site operational risks for employ- Decrease in
ments and implement benefits for employees with Opportunity pendently develop intelligent ees. Green chemistry technologies can Mid-term Operations Operating and green chemistry technolo-
occupational diseases as well as post-medical-period Executive Level minimize the use of harmful chemi- Costs gies; conduct training for
job transfers and redeployment. cals improving the work environment employees on these technolo-
from the source. gies.Governance Framework of Occupational Health and Safety The government is tightening its Respond actively to policies Decrease in and take proactive actions to
Policy Opportunity supervision of occupational health and safety in enterprises urging them to Long term Operations Operating improve the occupational
upgrade their standards. Costs health and safety management
level.To fulfill the primary responsibility for safety environmental protection and internal secu-
rity and strengthen management each subsidiary has prepared the 2025 Safety Environmen- Consistently improve the occu-
tal Protection and Internal Security Target Management Responsibility Statement in line with national laws A favorable occupational health and Increase in pational health and safety
government directives and company policies. Xingfa Group has established a safety Talent Opportunity safety environment helps attract top Long term Operations Operating environment while enhancing
responsibility system for all employees featuring clear accountability assessments talent. Revenue publicity and promotion.well-defined evaluation criteria publicly displayed results and corresponding rewards
and penalties.Social Image Outstanding performance in occupa- Increase in
Strengthen the publicity of
tional health and safety enhances the Long term Upstream Operating occupational health and safety Opportunity Company’ s social image. Downstream Revenue achievements to establish a positive corporate image.Key Performance
During the Reporting Period the total investment in safety production made by
the Company and its subsidiaries amounted to RMB 272.2124 million.ISO 45001 Occupational Health and Safety
Management System Certification
89 902025 Environmental Social and Governance Report
Impact Risk and Opportunity Management Hidden Hazard Inspections
Risk Management Mechanism The Company attaches great importance to work safety and actively carries out hidden hazard inspections. In strict accordance with the
requirements of the competent authorities at all levels and the Company’ s Implementation Plan for the Three-Year Tough Action on Addressing Root Causes
(2024–2026) all subsidiaries proactively conduct safety hazard inspections.
To ensure the implementation of management measures and strengthen risk management the Company follows the Notice on Strengthening the
Company’ s Risk Grading and Control Measures formulated by Yichang Xingfa Group reinforcing primary responsibility and the frequency of tiered Since April 2025 the Company has implemented the “Everyone is a Safety Whistleblower” mechanism utilizing the incentive logic of “smallinspections. rewards for minor hazards and major rewards for significant hazards” to motivate employees to proactively investigate and rectify potential
risks. During the Reporting Period the Company adopted a total of 2270 hazard and potential risk reports and distributed cumulative rewardsamounting to RMB 0.3185 million effectively promoting the formation of a corporate safety culture where “everyone talks about safety andIdentification Assessment Management everyone knows how to handle emergencies.”
During the Reporting Period the principal leaders of each
subsidiary led teams to organize specialized groups to con- Key Performance
Strictly identify risks in accordance with Safety risks are classified into three levels: A B and By tailoring and implementing duct self-inspections and rectifications against the indus-
the Guidelines for the Investigation and Treatment of C. Class A is the highest referring to Level I and II technical and managerial mea- try’ s criteria for identifying major accident hazards; no
Safety Risks and Hidden Dangers in Hazardous major hazard installations key supervised processes sures for different risk levels con- major accident hazards were found. During the Reporting Period the Company and its subsidiaries
Chemical Enterprises the determination crite- such as chlorination and risks that may cause ducting tiered inspections and achieved a 100% on-schedule rectification rate for identified
ria for the “two key and one major” in major accidents; Class B is higher referring to Level professional oversight and rein-
hazardous chemicals and the require- III and IV major hazard installations other key forcing them with a str ict hazards.ments of the dual prevention system for supervised processes and major hidden dangers; accountability system the Com-
hierarchical risk control and hidden Class C is general referring to significant risks iden- pany achieves dynamic tiered
danger investigation and treatment. tified by the Company’ s internal systems. and precise risk control.Indicators and Targets
Xingfa Group has developed a set of comprehensive and forward-thinking occupational health and safety goals aligning with industry charac-
teristics and regulatory requirements to establish a solid foundation for a safe and healthy work environment.Emergency Plans and Drills
To effectively implement the Emergency Response Law of the People’ s Republic of China and the Production Safety Law of the People’ s Republic of China and to Targets
ensure efficient rescue operations in the event of a production safety accident protecting both employee safety and company property each
production unit has developed an Emergency Response Plan for Production Safety Accidents to guide emergency rescue actions and regular training and
drills. The target for incidents of general severity and above is 0
The Company regularly conducts safety emergency drills to enhance its capability to respond to emergencies ensuring the continuity and
stability of the Company’ s core business at critical moments and mitigating risk-induced losses to the minimum.The number of major hazards identified through external inspections is 0
The number of loss incidents involving hazardous chemicals and civil explosives is 0
Case: Conducting a Special Emergency Drill for Major Hazard Sources
Indicators Unit Year 2025
On May 27 2025 the Baishahe Chemical Plant at the headquarters Safety Permit Utilization Rate % 100
of the joint-stock company organized a special emergency drill for
major hazard sources to effectively strengthen on-site emergency Employee Job Certification Rate % 100
response capabilities and build a solid line of defense for work
safety. Protective Equipment Utilization Rate % 100
Comprehensive Utilization and Safe Disposal Rate of Various Solid Wastes
and Hazardous Wastes % 100
“Three-Level” Safety Education Pass Rate % 100
“Three Types Of Personnel” Certification Rate % 100
Each unit has formed a part-time firefighting team com-
prising employees while full-time firefighting teams have Key Performance Work-Related Fatalities Per 100 Million in Revenue Persons 0
been established in the Yichang Yidu and Inner Mongolia
Plants. These teams carry out daily patrols and regularly
conduct joint emergency drills with production units. They During the Reporting Period the Company and its subsidiaries con-
not only ensure internal emergency response but also ducted 1868 safety emergency drills with 30928 participant or
collaborate with neighboring businesses and communities observer attendances.to handle emergencies boosting the Company’ s social
presence.
91 922025 Environmental Social and Governance Report
Work Safety Measures Contractor Safety Management
Safety Incident Management The Company has formulated the Contractor Management System to strengthen oversight of contractor entities provide safety training to contractors enhance their safety awareness and service standards and effectively safeguard employees’ lives and property preventing various types of
incidents at the source.In the Company’s production and operations work safety is always the top priority. In the event of a production safety accident personnel at all
levels respond swiftly and departments and teams collaborate closely to efficiently carry out a series of emergency measures making every effort
to ensure employees’ safety and reduce accident losses.Occupational Health Protection
Safety Training and Culture Building
Occupational Hazard Control Measures
The Company formulated the 2025 Annual Training Plan and actively carried out all-round and multi-level safety training activities. The training
content is rich and diverse covering professional sectors such as various safety laws and regulations safety leadership and instrumentation safety To thoroughly implement the decisions and deployments on occupational disease
training. This fortifies employees’ safety control over critical links in the production process and comprehensively enhances employees’ safety prevention and control the Company has taken proactive actions and adopted a
literacy and business capabilities. multi-pronged approach ensuring employees’ operational safety through measures such
as equipping complete occupational disease protective facilities and posting eye-catching
warning signs in the workplace. Meanwhile the Company establishes occupational health
surveillance files for every single employee—implementing a “one file per person” profile
to track their health status in real time thereby safeguarding employees’ occupational
Case: “Managing Major Hazard Sources Scientifically” Safety Education and Training health in an all-round manner. On April 30 2025 Yichang Central People’s
Hospital conducted a free clinic at the Houping
Occupational Hazard Factor Testing and Occupational Health Examinations Phosphate Mine.On June 27 2025 Xingrui Company conducted a “Managing MajorHazard Sources Scientifically” safety education and training session. The Company consistently places employees’ occupational health in the paramount position. In strict accordance with the requirements of the Law
More than 180 management cadres participated which comprehen- of the People’s Republic of China on the Prevention and Control of Occupational Diseases it has formulated the Measures for the Administration of Occupational Disease Diagnosis
sively enhanced the management team’s understanding of major Identification and Implementation of Benefits safeguarding employees’ rights and interests from the institutional level. The Company regularly organizes
hazard sources. occupational health surveillance striving to detect occupational injuries at the earliest possible stage through comprehensive medical examina-tions. Meanwhile it conducts timely testing of hazard factors in the workplace to fully safeguard employees’ health. During the Reporting Period
the Company engaged a third-party testing agency to detect occupational disease hazard factors and issue testing reports on occupational
disease hazard factors.Key Performance
During the Reporting Period the employee physical examination coverage rate of the Company and its subsidiaries was 100%
Case: “Family Safety Messages” Activity the detection rate for occupational disease hazard factors was 100% the pass rate for monitoring occupational disease hazard
factors was 100% the incidence rate of occupational diseases was 0% and the work injury rate was 0.137%.On June 18 2025 Trisun Chemical held a heartwarming “FamilySafety Messages” activity. Breaking through traditional models the
event adopted an innovative “online + offline” integrated approach HSE Safety Management
with diverse formats. Informatization Platform
Centered on Hubei Province’s “12345” safety
management model as its core the HSE
Information Platform is a specialized system
tailored to the safety production management
characteristics of Xingfa Group. Its functions
comprehensively cover key safety management
elements including organizational structures and
responsibilities hazard and safety risk manage-
Key Performance ment laws regulations and corporate policies hazardous operations management emergencymanagement incident handling “one file perDuring the Reporting Period the Company and its subsidiaries conducted occupational health and safety training for 196848 person” profiles as well as education training
participants with a training coverage rate of 100%. and certification while simultaneously providing
data analytics reports mobile APP accessibility
and other management functionalities. HSE Safety Management Information Platform
93 942025 Environmental Social and Governance Report
Joining Forces for Beneficial Action Social Contribution
The Company actively responds to various public welfare calls pays close attention to the practical needs of women and children and at the same
time establishes close cooperation with numerous philanthropic organizations deeply integrating into social public welfare activities with practical
actions and persistently contributing strength to public welfare undertakings.Rural Revitalization
Xingfa Group upholds a strong sense of social responsibility Key Performance Key Performance
and continues to advance rural revitalization. The Company
focuses on the previously key poverty alleviation areas—
Shukongping Village and Maocaoping Village in Xingshan During the Reporting Period the Company and its subsidiaries
1.6387 During the Reporting Period the Company and its subsidiaries made external donations of RMB 12.3662 million.County—deploying efforts in industrial support infrastructure invested RMB million in rural revitalization.
development and talent cultivation. It provides comprehen- During the 14th Five-Year Plan period the Company and its subsidiaries made cumulative external donations of RMB
sive assistance to drive the two villages’ economic develop- 307.3336 million.ment and livelihood improvement consolidating the gains of
poverty alleviation.Case: Targeted Assistance for Maocaoping Village Case: A Great Act of Love—Passing on Life with Marrow
The Company’s team stationed in Maocaoping Village advanced rural revitalization assistance. It secured RMB 0.15 million from the
Group to build a water-lifting project solving the water-use difficulties of residents in Group 2; promoted the public disclosure of
the village plan and improved infrastructure. Leveraging a 3500-mu walnut industry it strengthened technical support and brand
building and carried out consumption-based assistance. It implemented monitoring to prevent a return to poverty helped two On January 9 2025 an employee of the subsidiary Trisun Chem-
households eliminate risks and provided stable employment through the Group’s system. Through a multi-pronged approach of ical successfully completed a hematopoietic stem cell donation
“Party building + industry + infrastructure” it demonstrated corporate social responsibility and offered replicable experience for rural at Yichang Central People’s Hospital. A 215mL suspension
revitalization. ignited the hope of life for a patient with a malignant hematolog-
ic disease becoming Yichang’s first donor in 2025.The Company Visited the Donor
Case: Xingfa Group’s Overseas Companies Relay to Fulfill Global Social Responsibility
Water-Lifting System Walnut Orchard
In December 2025 AMCO donated essential supplies to the flood-stricken areas of Sumatra and established a housing repair fund;
during Farmers’ Day Bon Agro donated tractors and other agricultural supplies to support agricultural development. These actions
embodied the Company’s philosophy of “global presence local commitment” deepened cooperation with host countries and
strengthened its image of overseas responsibility.Case: Targeted Assistance in Shukongping Village
The Company’s task force stationed in Shukongping Village
advanced assistance efforts around the “Five Revitalizations.”
Under Party-building leadership 3 new Party members were
developed and 12 themed Party Day activities were held;
policies such as the Rain Dew Program were implemented
benefiting 49 person-times; 15 mu of alpine vegetable cultiva-
tion and the second phase of a photovoltaic industry were
promoted; a convenience bridge was built and a village plan
was prepared; throughout the year there were no new house-
holds added under anti-relapse-to-poverty monitoring; 16
events such as environmental hygiene evaluations were
organized to enhance rural civility; over the year 412 households
were visited difficulties were resolved and residents’ sense of
gain and happiness was strengthened. Donate Materials to the Local Community
959604
Prudent
Operation for
Long-term
Stability
Consolidating
the Bedrock of
Development
SDGs Addressed in This Chapter
Material ESG Issues Covered in This Chapter
Anti-Commercial Bribery and Anti-Corruption
Anti-Unfair Competition
Due Diligence
97 982025 Environmental Social and Governance Report
Standardizing Corporate Governance Specialized Committees of the Board of Directors
The Board of Directors has established three specialized committees: the Audit Committee the Nomination Remuneration and Evaluation
Committee and the Development Strategy Committee and has formulated corresponding Detailed Working Rules for each to enhance the
professionalism and scientific nature of decision-making. Each specialized committee has a clear division of labor and collaborates with one
Corporate Governance another providing robust support for the Company’s strategic decisions ensuring the precise execution of the Company’s various decisions and contributing strength to the Company’s sustainable development.The Company is committed to building an efficient and transparent governance system strictly complying with the Company Law of the People’s Republic
of China (hereinafter referred to as the “Company Law”) the Securities Law of the People’s Republic of China (hereinafter referred to as the “Securities Law”) the Code Overview of the Special Committees of the Board of Directors
of Corporate Governance for Listed Companies and other laws and regulations. It continuously optimizes internal management systems such as the Articles of Special Committees of the Number of Proportion of Independent
Association and the Rules of Procedure for the Board of Directors clarifies the specific responsibilities of the General Meeting of Shareholders the Board of Board of Directors Convener Number of Members Independent Directors Directors
Directors the Management and various departments and continuously improves the governance structure laying a solid foundation for the
Company’s long-term development. Audit Committee Independent Director 5 people 5 people 100%
Nomination Remuneration and
Assessment Committee Independent Director 5 people 5 people 100%
General Meeting of Shareholders Development Strategy Committee Chairman of the Board 7 people 5 people 71%
The General Meeting of Shareholders is the highest governing body of the Company. In strict accordance with the provisions of relevant laws and
regulations such as the Rules for the General Meetings of Shareholders of Listed Companies the Company standardizes the requisition and convening of general Key Performance
meetings. The general meetings provide multiple forms of voting including in-person voting and online voting to expand the proportion of
shareholder participation and fully listen to the opinions of attending shareholders. The Company’s controlling shareholder also strictly standardizes
its own behavior and exercises shareholder rights according to law through the general meetings. During the Reporting Period the Company convened meetings of the Development Strategy Committee 4 times in total and
reviewed and approved 5 items; meetings of the Audit Committee 6 times in total and reviewed and approved 14 items; meet-
Meanwhile the Company emphasizes treating all shareholders equally ensuring that all shareholders especially minority shareholders enjoy equal
status and can fully exercise their rights. The Company convenes meetings in the form of on-site gatherings and utilizes a secure economic and ings of the Nomination Remuneration and Assessment Committee 3 times in total and reviewed and approved 7 proposals
convenient online voting method to provide convenience for shareholders to participate in the general meetings. Concurrently for major matters were deliberated and approved by the General Meeting.affecting the interests of small and medium investors a separate counting of votes is implemented for their ballots practically protecting the
legitimate rights and interests of minority shareholders. During the Reporting Period the Company revised the Rules of Procedure for the General Meeting
of Shareholders.Independence of the Board of Directors
Key Performance The Company attaches great importance to the pivotal role of independent directors in corporate governance and has revised the Rules of Procedure
for Independent Directors clarifying selection criteria to ensure candidates’ independence. By granting independent directors special powers and pre-re-
view authority and establishing dedicated meeting mechanisms the Company ensures that independent directors make independent objective
During the Reporting Period the Company held the General Meeting of Shareholders 3 times including the annual general and impartial judgments on all proposals effectively safeguarding the interests of minority shareholders.meetings 1 times and extraordinary general meetings 2 times and a total of 24 proposals were deliberated and approved by All independent directors participated in all board meetings either in person or via telecommunication fully engaging in the work of the three
the General Meeting. specialized committees of the Board of Directors—independent directors account for more than half of the Audit Committee the Nomination
Remuneration and Evaluation Committee and the Development Strategy Committee and the convener of the Audit Committee possesses a
profound professional background in accounting. The Company organizes special meetings of independent directors on a regular or irregular
basis providing professional and objective suggestions for the Company’s operational development and offering robust support to promote the
enhancement of the board’s decision-making level.Board of Directors
As the core decision-making body for the Company’s daily operations the Board of Directors bears critical responsibilities in the Company’s Remuneration Management of Directors and Senior Executives
development. To further enhance operational compliance and decision-making rigor during the Reporting Period the Company revised the Rules
of Procedure for the Board of Directors improving the Board’s agenda procedures decision-making processes and directors’ rights and obligations. This
ensures that the Board of Directors has rules to follow when performing tasks such as strategic planning investment decision-making and In accordance with the Company Law and other applicable laws and
management supervision guaranteeing that every decision undergoes thorough discussion and prudent consideration and effectively ensuring regulations and with reference to the Company’s Articles of Association the Key Performance
that the Company’s operations forge ahead steadily in the right direction. Company has formulated the Remuneration Management System for Directors and
Senior Management. The Nomination Remuneration and Assessment
Committee is responsible for developing remuneration standards and During the Reporting Period the Company paid
appraisal plans for directors and senior management conducting
Key Performance remuneration (including post-departure pay-comprehensive and objective performance evaluations of directors and
senior management and submitting them for separate review and ments) to directors and senior management total-
approval by the shareholders’ meeting and the board of directors to ing RMB 22.7364 million.During the Reporting Period the Company convened meetings of the Board of Directors 6 times in total and reviewed and ensure fairness and effectiveness of the incentive mechanism.approved 37 proposals with an average attendance rate of 100%.
99 1002025 Environmental Social and Governance Report
Diverse Composition of the Board of Directors
The Company adheres to internationally accepted ESG governance standards and regards board diversity as a core lever for improving the modern corporate governance system. It actively promotes board diversity across dimensions such as gender age and educational background. The Board consists of 13 directors
including 1 female director accounting for 7.69%. Board members possess solid professional expertise and extensive practical experience covering multiple fields including corporate management finance accounting chemicals safety and environmental protection legal and compliance and ESG and sustainable develop-
ment.Professional Background
Name Gender Position Age Educational Background Business Finance Accounting Chemical Health and Law and Management Engineering Safety Compliance ESG and Sustainability
Li Guozhang Chairman of the Board 60 Master’s degree
Cheng Yali Director General Manager 44 Bachelor’s degree
Hu Kunyi Vice Chairman 58 Master’s degree
Wang Jie Director Executive Deputy General Manager 53 Bachelor’s degree
Wang Chen Director Deputy General Manager Head of Finance 48 Bachelor’s degree
Yuan Bing Director 58 Bachelor’s degree
Cui Daqiao Independent Director 69 Master’s degree
Jiang Chunqian Independent Director 56 Master’s degree
Yu Shaojun Independent Director 63 Master’s degree
Yang Guangliang Independent Director 61 Master’s degree
Cao Xianjun Independent Director 70 Bachelor’s degree
Xue Dongfeng Independent Director 58 PhD
Hu Guorong Independent Director 63 PhD
Investor Relations Management
The Company attaches great importance to investor relations management. During the Reporting Period it revised the Investor Relations Management
Protection of Investors’ Rights and Interests System strengthened services for and responses to the demands of minority investors and expanded communication topics to include ESG shareholder rights and risks and challenges.The Company designates dedicated personnel to specific posts to be responsible for investor relations management promptly responding to
investor concerns under the premise of compliance and continuously carrying out communication and exchanges through multiple channels.Information Disclosure During the Reporting Period the Company organized earnings conferences participated in the 2025 Online Collective Reception Day for Inves-tors of Listed Companies in the Hubei Jurisdiction actively attended investor strategy conferences and received investor surveys while utilizing
third-party information platforms to promptly release the Company’ s performance and important updates. By virtue of its persistent efforts in
Xingfa Group strictly follows the Shanghai Stock Exchange Administrative Measures for Information Disclosure by Listed Companies and other relevant requirements and investor relations management the Company has garnered multiple honors.has formulated relevant systems to ensure the accuracy and timeliness of the Company’s external disclosures. The Company revised the Information
Disclosure Management System the Accountability System for Major Errors in Annual Report Information Disclosure the External Units Information Submission Management System the
Major Internal Matters Reporting System and the Insider Information Management System to safeguard the right to know of the broad base of investors and
stakeholders and to strengthen internal management of information and external transparency. In addition the Company also formulated theInformation Disclosure Postponement and Exemption Management System which standardizes internal approval procedures and management requirements for Case: “Improving Quality and Efficiency to Boost Confidence Seeking Progress Whilehandling the disclosure of sensitive information ensuring that the Company fulfills its information disclosure obligations on a lawful and compliant Maintaining Stability to Promote Development” — Hubei-Listed Companies’ 2025
Outstanding Practice in 2024 Annual
basis. Investors’ Collective Reception Day and 2024 Annual Results Briefing
Results BriefingDuring the Reporting Period the Company received an A rating in the information disclosure assessment from the Shanghai Stock Exchange. （Granting Organization：On June 12 2025 the Company held an China Association for Public Companies)Investors’ Collective Reception Day and the
2024 Annual Results Briefing providing
Key Performance detailed answers and interactions via an 6th Panorama Network Investor
online platform on investor concerns such Relations Gold Award
as financial performance business planning
During the Reporting Period the Company disclosed 4 periodic reports in number of issues and nearly 140 ad hoc announce- and capacity progress thereby enhancing （Granting Organization：Panorama Network）
ments and online documents with zero penalties imposed for violations related to information disclosure. investors’ understanding of and trust in the
Company.
101 1022025 Environmental Social and Governance Report
Key Performance Compliance Management Measures
During the Reporting Period the Company hosted more than 150 on-site investor research visits participation in broker strategy In accordance with systems such as the Measures for Internal Control Inspection Evaluation and Examination the Company vigorously promotes compliance
meetings and online exchanges and held 4 results briefings; answered over 500 investor phone calls; responded to more than management and regularly and comprehensively reviews operational processes. In 2025 centering on high-risk businesses and key manage-
140 9 ment links the Company focused on carrying out special research and inspections regarding the execution of compliance systems in critical investor questions on SSE E-Interaction; disclosed investor relations activity record forms. fields such as the procurement of production materials operations of mining units and overseas subsidiaries. Through in-depth troubleshoot-
ing the Company identified shortcomings in compliance execution prompted relevant units to rectify issues in a timely manner and promoted
the effective landing of compliance requirements at the business front lines. The Internal Control Evaluation Report during the Reporting Period
indicated that no compliance risks or internal control deficiencies were detected.Shareholder Returns
Xingfa Group attaches great importance to shareholder returns. Under the guidance of the Articles of Association the Company has built a fair and Compliance Culture
transparent profit distribution system thereby implementing a reasonable profit distribution plan to respond to shareholders’ trust and support
with tangible actions creating more stable and sustainable returns for shareholders.To further enhance the quality and effectiveness of compliance management the Company offers targeted legal training courses for employees
Profit Distribution based on high-risk compliance scenarios specific to different positions. In addition to company-organized training departments also conduct ad
hoc legal training and study sessions.Year Cash Dividend Per Share Total Cash Dividends Distributed Proportion of Net Profit Attributable to (Unit: RMB/share) (Pre-tax) (RMB 10000) Shareholders of the Listed Company (%)
2023 1 86200.18(Including Share Repurchase and Cancellation) 62.52 Case: Corporate Compliance Legal Risk Management Training
20241110325.5268.89
2025 (Proposed) 0.5 59809.47 40.09 On April 17 2025 the Company conducted corporate compliance
legal risk management training to help employees understand the
importance of corporate compliance and compliance management
Note 1: Pursuant to the Shanghai Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 7 – Share Repurchases when a listed company repurchases shares using cash recognize legal risks in labor relations and master basic skills for
consideration via centralized bidding or tender offer the share repurchase amount implemented in that year is deemed equivalent to a cash dividend amount and is handling common legal issues in contracts.included in the relevant ratio calculation for that year’s cash dividends.Note 2: The dividend distribution plan for 2025 has been approved by the 15th meeting of the 11th Board of Directors and is pending approval by the General Meeting
of Shareholders.Status of Legal Training
Compliance Operations and Risk Management Indicators Unit Year 2025
Number of Legal Training Sessions Conducted Times 30
Compliance Operations Total Duration of Legal Training Conducted Hours 88
Total Attendances at Legal Training Person-times 3900
Compliance Management System Number of Legal/Compliance Staff Participating in the Training Persons 17With the compliance management policy of “firmly establishing the compliance concept of operatingin accordance with laws and regulations where everyone is responsible for law-abiding and regula-
tion-compliance; actively constructing a compliance culture of universal law-abidance and integrity; and
continuously improving the compliance management system to safeguard the high-quality develop- Import and Export Compliance Managementment of the Company” Xingfa Group has formulated systems including the Compliance Management System
Compliance Evaluation Control Procedure and Contract Management System. The Compliance Committee is responsi-
ble for confirming compliance strategies and targets constructing the compliance management To match the development of the Company’ s overseas business and ensure the compliance of import and export operations the Company
system reviewing and approving major systems and proposals as well as guiding supervising and has formulated the Foreign-Related Business Management System and constructed a full-process tiered and clearly defined risk control system for
evaluating management work. foreign-related business: pre-event tiered review and auditing; in-event refined normalization of contracts documents financial instruments and communication processes; and post-event explicit accountability clauses to ensure the effective execution of the system. Hong Kong Xingfa
During the Reporting Period the Company revised and improved 29 systems including the Rules of Proce- Group serves as the management entity for foreign-related business responsible for the full-process management of operations including orga-
dure for the General Meeting of Shareholders and Rules of Procedure for the Board of Directors among which 3 were newly nizing review meetings supervising pre-event reviews and contract audits inspecting execution status and providing analysis while providing
added and 1 was canceled ensuring their alignment with the latest regulatory requirements and the professional support for business development and taking the lead in handling risks and disputes. During the Reporting Period the Company
Company’ s practical realities. On this basis 41 business and management processes were simultane- had zero non-compliance incidents in foreign-related business.ously optimized strengthening compliance control nodes within the processes. As of the end of the
Reporting Period the Company successfully passed the certification of the GB/T 35770-2022 / ISO Compliance Management
37301:2021 Compliance Management Systems. System Certification
103 1042025 Environmental Social and Governance Report
Risk Management Risk Management Training
Risk Management System The Company places great emphasis on enhancing employees’ risk awareness actively conducts risk training and strengthens employees’
understanding of and ability to respond to risks thereby building a robust and comprehensive risk management system.The Company strictly adheres to relevant laws regulations and internal policies and has established the Risk Management System and the Internal
Control Evaluation Management System building a comprehensive and rigorous risk management framework. The Internal Control Department is
responsible for organizing coordinating guiding and supervising the risk management work of all departments and subsidiaries.Case: Contract Legal Risk Training
Risk Management System Structure
Internal Control Department
Organize and coordinate the risk management of Update and maintain the Company’ s major risk information database; In 2025 the Company conducted corporate contract law
various departments and subsidiaries; training and organized a special session on practical issues in
Assess major risks and suggest improvements and Supervise and inspect the risk management of departments and subsidiaries corporate contract law. The training covered key points
supervise implementation after approval; and provide recommendations on assessment rewards and punishments. across the full life-cycle of contract management used case
Provide guidance and support for risk assessments studies to analyze common legal risks and dispute resolution
in departments and subsidiaries; strategies and strengthened the professional capabilities and
risk awareness of legal and business personnel thus laying a
solid foundation of compliance for business development.Heads of All Departments and Subsidiaries
(The Primary Persons Responsible for Risk Control)
Collect information build a risk information base and update it Conduct risk management assessments and propose
on an ongoing basis; countermeasures and optimization plans;
Formulate criteria for identifying major risks sort out major risks Implement major risk management solutions to ensure
and report them to the Internal Control Department for confirmation; that all measures are properly executed.Tax Management
Risk Control Management The Company attaches great importance to tax management formulating and regularly optimizing the Measures for Tax Risk Management and other
related systems clarifying tax obligations and responsibilities closely monitoring changes in tax policies and making timely adjustments to
address potential risks so as to ensure standardized tax operations.The Company conducts risk assessments through internal audits. The risk management process covers key steps such as information collection
assessment strategy formulation and improvement supervision systematically identifying potential risks and developing response plans to Leveraging the e-invoicing reform for value-added tax the Company built a direct-connection platform to the State Administration’ s system
ensure risks are effectively controlled. completing intelligent data linkage between the ERP system and the tax system to promote digitalization and intelligence in financial manage-
ment. At the same time it optimized tax system functions to support automatic filing and data validation across multiple tax categories estab-
lished a tax shared service center to improve processing efficiency integrated data to support decision-making strengthened risk monitoring
Information Improvement effectively reduced tax risks and propelled the Company’ s overall digital transformation.Collection Risk Assessment Solutions and Monitoring
Each department and Based on the scope of the Company’ s In line with the risk Establish a basic risk man- Direct-Connection Platform Tax Shared Service Platform
subsidiary is responsible business identify strategic risks financial management strate- agement process main-
for continuously collect- risks operational risks market risks legal gy develop or revise tain timely accurate and
ing risk management risks and IT risks. risk management complete information
information establishing Using a combination of qualitative and solutions for the communication with rele-a risk database and quantitative methods analyze and rank the pre-event in-event vant units and conduct formulating criteria for
determining major risks identified risks according to the likelihood of
and post-event regular self-inspections
occurrence and the degree of impact in stages of risk. and supervisory evalua-to be submitted to the
Internal Control Depart- order to determine the key areas of focus
tions to ensure the contin-
uous improvement of risk
ment for review. and the risks to be prioritized for control. management work.During the Reporting Period in accordance with the Company’ s risk Key Performance
management system requirements the Internal Control Department orga-
nized the Finance Department Investment and Development Department
Safety and Environmental Protection Department Quality Management During the Reporting Period the Company com-
Department Legal Department Planning and Assessment Department pleted the financial audit report 44 units and Engi-
Marketing Department Human Resources Department Board Secretary’ s
Office Information Center and other departments to complete the 2025 neering Project Final Account Audit Report 523
annual risk management work. A total of 353 risks were identified and units.assessed flat with the previous year. Among them were 37 Category A
major risks 166 Category B relatively significant risks and 150 Category C
general risks.
105 1062025 Environmental Social and Governance Report
The Company regularly organizes tax and finance sharing sessions and training to enhance tax managers’ compliance awareness and profes-
sional capabilities establishes a tax shared services center with clear delineation of responsibilities. At the same time it sets up communication Key Performance
mechanisms strengthens internal exchanges emphasizes cross-department collaboration ensures alignment between tax work and overall
operations and effectively reduces tax risks.During the Reporting Period 25 warning and awareness sessions were conducted reaching more than 4000 participants.Management completed 43900 hours of anti-corruption training; 878 members of management participated; management
anti-corruption training coverage reached 100%.Case: Training for Finance Personnel
In September 2025 the Company’ s Finance Depart-
ment jointly planned and launched the 2025 annual
finance system training aiming to transform finance
personnel from an accounting role into strategic value
creators raising professional standards to a higher
level and upgrading financial management with a
more global perspective.Integrity Training
Upholding Business Ethics
Xingfa Group strictly complies with the Company Law the Anti-Monopoly Law of the People’ s Republic of China and other relevant regulations steadfastly
upholds the bottom line of business ethics adheres to the principle of fair competition and advances lawful and compliant operations by estab-
lishing and improving internal management systems and strengthening employees’ legal education and professional ethics training. Through
concrete actions it fulfills corporate social responsibility sets an industry benchmark and contributes to building a healthy and orderly market
environment.Anti-Commercial Bribery and Anti-Corruption
Integrity Reminders on the
Integrity Book Bar Official WeChat Account
Management System
The Company in accordance with the requirements of the Compliance Management System has built an anti-commercial bribery management Case: Conference on Party Conduct and Clean Government Building
system. In daily operations it signs integrity agreements comprehensively with business partners to clarify both parties’ integrity standards in
commercial dealings thereby building a solid integrity defense through concrete actions. At the same time it has established multidimensional
reporting channels to keep supervision and feedback unimpeded vigorously promotes the construction of an integrity culture embeds integrity
awareness into every corner of the enterprise and makes every effort to foster a clean and upright business environment to safeguard the On February 6 2025 the Company convened a conference on
Company’ s steady progress. Party conduct and clean government studying the guidelines of the central authorities and the deployments of the Central
During the Reporting Period the Company’ s Commission for Discipline Inspection (CDI) consciously accepted the unified leadership of the Commission for Discipline Inspection plenary session summa-
Group CDI strictly followed the Group CDI’ s work arrangements carried out supervision and inspections on a regular basis and organized rizing the work of 2024 and arranging the tasks for 2025. The
special inspections based on reported clues obtained effectively strengthening routine supervision and discipline enforcement. meeting called for an in-depth understanding of the spirit of
important speeches to strengthen the consciousness of exer-
cising strict Party self-governance; advancing the anti-corrup-
tion fight with rigorous standards and promoting precise and
normalized political oversight; tightening principal responsibili-
Management Measures ties and improving the supervision system to provide strongsafeguards for building “Hundred-Billion Xingfa World-ClassTo foster an atmosphere of integrity the Company and its subsidiaries have set up a large number of integrity slogans in offices factories and Excellence.”
other locations and established an “Integrity Book Bar.” At the same time they regularly carry out training activities using real case analyses
and interpretations of laws and regulations to help employees deeply understand the importance of integrity in their work. In addition the Com-
pany regularly publishes integrity-themed posts on its WeChat Official Account conveying integrity concepts to employees through illustrated
content reinforcing integrity awareness through everyday details and embedding the concept of integrity deep in employees’ minds. During
the Reporting Period the signing rate of integrity agreements was 100%.
107 1082025 Environmental Social and Governance Report
Whistleblowing and Complaints Mechanism
The Company has established multiple
reporting channels to allow employees and all Whistleblowing Channels
sectors of society to conveniently report
potential violations. A series of confidentiality Email: xfjtjiwei@163.com
and protection measures are adopted to
ensure the informant’ s information security Tel: 0717-2588616
and the safeguarding of their lawful rights
and interests. Address: Room 812 No. 58 Gaoyang Avenue Gufu Town Xingshan County Yichang City Hubei Province
Anti-Unfair Competition
The Company strictly complies with the Anti-Unfair Competition Law of the People’ s Republic of China and the Anti-Monopoly Law of the People’ s Republic of
China and is committed to maintaining a fair and impartial market competition environment. It firmly opposes any form of monopolistic
behavior and ensures that its business activities do not involve abusing a dominant market position or restricting or eliminating competi-
tion. At the same time it actively advocates fair competition and through integrity in operations and high-quality services creates great-
er value for consumers and industry partners jointly promoting the prosperous development of the market economy.
109 1102025 Environmental Social and Governance Report
Appendix
ESG Performance Overview
Environmental Performance
Indicators Units Year 2025 Indicators Units Year 2025
Environmental Compliance Management Waste Management
Total Environmental Protection Investment RMB 10000 75731 Solid Waste Emissions
Including: Operating Expenses for Environmental Protection Facilities RMB 10000 41980 Waste Generation Volume 10000 tonnes 531.72
Number of Environmental Protection Training Sessions Times 2 Including: Hazardous Waste 10000 tonnes 7.18
Number of Participants in Environmental Protection Training Person-times 114 Non-hazardous Waste 10000 tonnes 524.54
Duration of Environmental Protection Training Hours 2304.00 Waste Generation Intensity
Pollutant Emissions Tonnes per RMB 10000 of revenue 0.02
Including: Hazardous Waste Tonnes per tonne
Emissions of Air Pollutants by Categories of product 0.0037
Emissions of NitroXgen Oxides (NOx) Tonnes 673.62
Tonnes per RMB
10000 of revenue 1.79
Non-hazardous Waste
Emissions of Sulfur Dioxide (SO2) Tonnes 917.38 Tonnes per tonne of product 0.27
Emissions of Volatile Organic Compounds (VOCs) Tonnes 32.69 Water Resource Utilization
Emissions of Particulate Matter (PM) Tonnes 135.96 Water Consumption Volume 10000 tonnes 2367.25
Tonnes per tonne
Wastewater Discharge of Manufacturing Enterprises of product 1.21
Water Consumption Intensity
Wastewater Discharge Volume 10000 tonnes 2206.48 Tonnes per RMB 10000 of revenue 8.08
Tonnes per tonne 1
of product 1.12 Energy Utilization
Wastewater Discharge Intensity
Tonnes per RMB
10000 of revenue 7.53 Comprehensive Energy Consumption
Wastewater Discharge of Key Pollutant-discharging Units Total Direct Energy Consumption 10000 tonnes of standard coal 124.70
Wastewater Discharge Volume of Key Pollutant-discharging Units 10000 tonnes 1244.27 Including: Coal 10000 tonnes of standard coal 114.76
Tonnes per tonne 0.63 Diesel 10000 tonnes of of product standard coal 0.89
Wastewater Discharge Intensity of Key Pollutant-discharging Units Tonnes per RMB
10000 of revenue 4.25 Natural Gas 10000 cubic meters 6488.47
Discharge Status of Wastewater Pollutant Categories of Key Pollutant-discharging Units Electrode 10000 tonnes of standard coal 0.42
Chemical Oxygen Demand (COD) Tonnes 614.78 Total Indirect Energy Consumption 10000 tonnes of standard coal 76.68
Ammonia Nitrogen (NH -N) Tonnes 41.74 Including: Electricity 10000 tonnes of 3 standard coal 65.58
Ammonia Nitrogen (NH Thermal Energy 10000 tonnes of 3-N) Tonnes 5.99 standard coal 11.11
Total Green Electricity Consumption 100 million kWh 9.80
The standard coal equivalent conversion coefficient is sourced from General Principles for Calculation of Comprehensive Energy Consumption (GB/T 2589—2020).
111 1122025 Environmental Social and Governance Report
Indicators Units Year 2025 Industrial Performance
Total Energy Consumption 10000 tonnes of standard coal 201.38 Indicators Units Year 2025
Energy Consumption Intensity Tonnes of standard coal per RM 10000B of revenue 0.69 Innovation-driven
Total Clean Energy Consumption 10000 tonnes of standard coal 20.74 R&D Investment RMB 100 million 13.19
Response to Climate Change Proportion of R&D Investment to Operating Revenue % 4.5
Total Greenhouse Gas Emissions 10000 tCO2e 636.44 Total Number of R&D Team Members Persons 1749
Including: Direct Greenhouse Gas Emissions (Scope 1) 10000 tCO2e 366.57 Proportion of R&D Personnel in Total Employees % 12
Indirect Greenhouse Gas Emissions (Scope 2) 10000 tCO2e 269.87 By Education Level
Greenhouse Gas Emission Intensity tCO2e per tonne 0.32 Bachelor Persons 849of product
Master Persons 830
Number of Products Certified for Carbon Footprint Units 26
Doctor Persons 70
Scale of Carbon Quota Trading 10000 tonnes 13.29
By Age Group
2 Note 1: The accounting scope for greenhouse gas emissions covers production enterprises included within the scope of the Company’s consoli- Under 30 years old (Excluding 30) Persons 608
dated financial statements;
Note 2: Scope 1 emissions primarily originate from the combustion of fossil fuels such as coal diesel gasoline and natural gas as well as emissions Ages 30–40 (Including 30 Excluding 40) Persons 848
from industrial production processes like electrodes and carbonates. The relevant emission factors refer to the default values provided in the
Guidelines for Accounting and Reporting of Greenhouse Gas Emissions from Chinese Chemical Production Enterprises (Trial). Among these the Ages 40–50 (Including 40 Excluding 50) Persons 236
emission factors for production processes are determined based on the Company’s testing and analysis data;
Note 3: Scope 2 emissions primarily result from the consumption of purchased electricity and steam (thermal energy). The emission factor for 50 years old and Above Persons 57
electricity adopts the 2023 national grid average emission factor of 0.5306 kgCO2e/kWh; the emission factor for heat adopts 0.11 tonnes of
CO2e/GJ as specified in the Guidelines for Accounting and Reporting of Greenhouse Gas Emissions from Chinese Chemical Production Enterpris- Innovation Incentive Bonus RMB 10000 2354
es (Trial).Note 4: The greenhouse gas emission data disclosed in this table are calculated independently by the Company based on relevant methodologies Number of Various Science and Technology Products Applied for and Approved Items 38
and have not yet undergone verification by a third-party organization. Approved Funding for Science and Technology Project Awards
(Excluding Talent Programs) RMB 10000 1093.50
Number of Innovative Projects in the Implementation Plan Items 116
Number of Awards Received by the Company During the Reporting Period Items 4
Number of Standards Led or Participated in by the Company Items 119
Including: International Standards Items 2
National Standards Items 37
Industry Standards Items 43
Group Standards Items 36
Local Standards Items 1
Cumulative Number of Granted Patents Items 1743
Items per RMB
Number of Valid Patents per RMB Million in Revenue million of revenue 0.060
Including: Cumulative Number of Granted Invention Patents Items 627
Cumulative Number of Granted Utility Model Patents Items 1116
Cumulative Number of PCT Items 1
113 1142025 Environmental Social and Governance Report
Indicators Units Year 2025 Indicators Units Year 2025
Number of New Patents Added During the Reporting Period Items 343 Information Security and Privacy Protection
Including: Added Number of Granted Invention Patents Items 136 Average Duration of Training Related to Data Security/Customer Privacy Protection Hours 1
Number of Participants in Training Related to Data Security/
Added Number of Granted Utility Model Patents Items 207 Customer Privacy Protection Person-times 16658
Added Number of PCT Items 1 Coverage Rate of Training Related to Data Security/Customer Privacy Protection % 90
Cumulative Number of Software Copyrights Items 46 Specific Amount Involved in Data Security Incidents RMB 10000 0
Cumulative Number of Trademarks Items 233 Specific Amount Involved in Customer Privacy Breach Incidents RMB 10000 0
Number of Software Copyrights per RMB Million in Revenue Items per RMB million of revenue 0.00795
Cumulative Number of Published Papers Articles 258 Social Performance
Specialized Refined Differential and Innovative (SRDI) Enterprises Units 5 Indicators Units Year 2025
National High-tech Enterprises Units 13 Employee Rights and Interests Protection
Product and Service Safety and Quality Total Number of Employees Persons 14580
Target Completion Rate of Product Pass Rate % 100 Including: Number of Ethnic Minority Employees Persons 1145
Number of Internal Quality Audits per Year Times 8 Number of Employees with Disabilities Persons 106
Number of Spot Checks Conducted by Third-party Institutions Times 210 Proportion of Ethnic Minority Employees % 7.85
Pass rate of Spot Checks % 100 Labor Dispatch Personnel Persons 769
Number of Product Recalls Items 0 Number of Employees by Gender
Product Recall Rate (Percentage of Sold or Shipped Products
that Must Be Recovered) % 0 Female Persons 3174
Amount Involved in Major Liability Incidents Related to Product
or Service Safety and Quality RMB 10000 0 Male Persons 11406
Number of Participants in Quality Training Person-times 380 Number of Employees by Age
Duration of Quality Training per Capita Days 29.89 Under 30 years old (Excluding 30) Persons 3454
Number of Quality Training Sessions Times 8 Ages 30–40 (Including 30 Excluding 40) Persons 5578
Number of Customer Complaints Times 1 Ages 40–50 (Including 40 Excluding 50) Persons 3722
Rate of Customer Complaint Resolution % 100 50 years old and Above Persons 1826
Customer Satisfaction % 91 Number of Employees by Region
Sustainable Supply Chain Mainland China Persons 14359
Total number of suppliers Units 280 Hong Kong Macao and Taiwan in China Persons 9
Number of Suppliers with Quality Management
System Certification Units 67 Overseas Persons 212
Number of Suppliers with Environmental Management
System Certification Units 44 Number of Employees by Job Level
Number of Suppliers with Occupational Health and Safety
Management System Certification Units 45 Senior Management Persons 14
Signing Rate of Supplier Anti-corruption Agreement % 100 Middle Management Persons 903
Other Employees Persons 13663
115 1162025 Environmental Social and Governance Report
Indicators Units Year 2025 Indicators Units Year 2025
Number of Employees by Educational Level Democratic Management
Below Bachelor’s Degree Persons 9517 Number of Employee Representative Congress Meetings Held Times 3
Bachelor’s Degree Persons 4188 Number of Items Approved by the Employee Representative Congress Items 7
Master’s Degree Persons 802 Number of Items Approved by the Trade Union Items 7
Doctorate (PhD.) Persons 73 Proportion of Trade Union Members among Active Employees % 100
Number of Employees by Function Number of Labor Dispute Cases Cases 9
Production Persons 11193 Number of Labor Dispute Cases Closed Cases 4
Technology Persons 2097 Employee Care
Sales Persons 726 Total Expenditure on Employee Assistance RMB 10000 150.86
Finance Persons 124 Total Number of Employees Assisted in Hardship Persons 244
Administration Persons 440 Employee Training and Development
Employee Turnover - Inflows Investment in Employee Training RMB 10000 2828.50
Number of New Hires Persons 796 Number of Offline Employee Training Sessions Sessions 134
New Hires by Gender Total Duration of Employee Training Hours 1423936
Female Persons 152 Total Number of Training Attendances Person-times 14259
Male Persons 644 Employee Training Coverage Rate % 97.80
New Hires by Age Average Annual Training Hours Per Employee Hours/Person 97.66
Under 30 years old (Excluding 30) Persons 653 Occupational Health and Safety
Ages 30–40 (Including 30 Excluding 40) Persons 103 Hidden Hazards Identification and Rectification Rate % 100
Ages 40–50 (Including 40 Excluding 50) Persons 37 Investment in Work Safety RMB 10000 27221.24
50 years old and Above Persons 3 Work Safety Emergency Drills Times 1868
New Hires by Region Observation of Emergency Drills Person-times 30928
China Persons 769 Number of Participants in Safety Training Person-times 196848
Overseas Persons 27 Safety Training Employee Coverage Rate % 100
Employee Turnover - Outflows Work Injury Rate % 0.137
Number of Employee Departures Persons 555 Occupational Hazard Factor Inspection Rate % 100
Overall Employee Attrition Rate % 4 Occupational Hazard Factor Inspection Pass Rate % 100
Remuneration and Benefits Occupational Disease Incidence Rate % 0
Social Insurance Coverage Rate % 100 Employee Physical Examination Coverage Rate % 100
Number of Participants in the Employee Stock Ownership Plan Persons 1355
Total Subscription Amount of the Employee Stock Ownership Plan RMB 10000 26503
117 1182025 Environmental Social and Governance Report
Indicators Units Year 2025 Indicators Units Year 2025
Social contribution Number of Development Strategy Committee Members Persons 7
Company’s External Donation Amount RMB 10000 1257.69 Number of Development Strategy Committee Meetings Convened Times 4
Amount of External Donations Invested During the 14th Five-Year Plan Period RMB 10000 30733.36 Matters Approved by the Development Strategy Committee Items 5
Investment Amount in Rural Revitalization RMB 10000 163.87 Number of Nomination Remuneration and Evaluation Committee Members Persons 5
Number of Nomination Remuneration and Evaluation Committee Meetings Convened Times 3
Governance Performance Matters Approved by the Nomination Remuneration and Evaluation Committee Items 7
Remuneration of Directors and Senior Management (Including Current and Former) RMB 10000 2273.64
Indicators Units Year 2025
Protection of Investors’ Rights and Interests
Operating Performance
Number of Periodic Reports Disclosed Units 4
Operating Revenue RMB Million 29299.52
Number of Ad Hoc Announcements and Online Documents Disclosed Units 140
Party-Building Leadership
Number of Penalties Received for Violations in Information Disclosure Times 0
Number of Party Committees in the Company
(Including the Committee at This Level) Units 7 Number of On-site Investor Research Receptions
Participation in Brokerage Strategy Conferences Units Over 150
Number of Party Branches Units 83 and Online Communication Sessions
Corporate Governance Number of Earnings Briefing Sessions Held Units 4
Total Number of Shareholders’ Meetings Convened Times 3 Number of Investor Phone Calls Answered Times Over 500
Including: Annual General Meeting of Shareholders Times 1 Total Number of Investor Questions Answered on SSE E-Interaction Units Over 140
Extraordinary General Meeting of Shareholders Times 2 Number of Investor Relations Activity Record Forms Disclosed Units 9
Number of Matters Approved by the Shareholders’ Meeting Items 24 Cash Dividend Per Share RMB per share 0.5
Number of Board Members Persons 13 Total Cash Dividends (Tax-inclusive) RMB 10000 59809.47
By Gender Proportion of Total Cash Dividend Distribution to Net Profit Attributable to Owners of the Parent Company % 40.09
Male Persons 12 Compliance Operations and Risk Management
Female Persons 1 Number of Legal Training Sessions Conducted Times 30
By Type Duration of Legal Training Conducted Hours 88
Independent Directors Persons 7 Number of Participants in Legal Training Sessions Person-times 3900
Non-Independent Directors Persons 6 Number of Participants by Legal Personnel In Training Sessions Person-times 17
Operation of the Board of Directors and its Specialized Committees Number of Financial Audit Reports Completed Units 44
Number of Board Meetings Convened Times 6 Number of Settlement Audit Reports for Engineering Projects Completed Units 523
Matters Approved by the Board of Directors Items 37 Upholding Business Ethics
Average Attendance Rate of the Board of Directors % 100 Total Number of Participants in Anti-Commercial Bribery and Anti-Corruption Training Person-times Over 4000
Number of Audit Committee Members Persons 5 Duration of Management’s Participation in Anti-Corruption Training Hours 43900
Number of Audit Committee Meetings Convened Times 6 Number of Management Participants in Anti-Corruption Training Persons 878
Matters Approved by the Audit Committee Items 14 Anti-Corruption Training Coverage Among Management % 100
119 1202025 Environmental Social and Governance ReportIndicator Index SASAC “Research on the Shanghai StockGlobal Sustainability Preparation of ESG Special China Corporate
Exchange
Reports by Centrally Sustainability Self-RegulatoryShanghai Stock Report Section Reporting Standards Administered Reporting Guidelines Guidelines for Listed SASAC “Research on the Exchange (GRI Standards) SOE-Controlled (CASS-ESG 6.0) CompaniesGlobal Sustainability Preparation of ESG Special China Corporate No.14 - Sustainability
Report Section Reporting Standards Reports by Centrally SustainabilitySelf-Regulatory Listed Companies” Report (Trial)
(GRI Standards) Administered Reporting Guidelines
Guidelines for Listed
SOE-Controlled (CASS-ESG 6.0) CompaniesListed Companies” No.14 - Sustainability
Water E1.1.1/E1.1.2/E1.1.3/
Report (Trial) Resources 303-2/303-3/303-5 E3.2
Utilization E1.1.4/E5.2.1
Article 36
About This Report 2-1/2-2/2-3 / P1.1/P1.2 Article 4 / Article 6 Materials
Management 301-2 E1.4.2/E5.2.2 E3.3.4 Article 36
Message from
the Chairman 2-22 / P2.1 / Ecological and
Environmental 101-1/101-2/101-6 E4.1.1 E2.3.1/E2.3.2/E2.3.3 Article 32
2-1/2-6/2-8/2-9/ Protection
About Xingfa Group / P3.1/P3.2/P3.3 /2-28/201-1
S2.1.1/S2.1.2/S2.1.3/
Sustainable / S2.3 S2.1.4/S2.1.5/S2.1.6/Innovation- Article 42Development / / G1.1.11 Article 11 / Article 19 Driven S2.1.7/S2.1.8/S2.1.10/Goals and
Vision S2.1.11/S2.1.12/S2.1.13
Governance
Framework for G1.1.1/G1.1.2/G1.1.5/2-13/2-14/2-22 G1.1.1 Article 11 / Article 12 /
Innovation Product and
Article 18 and Service Safety S2.1.1/S2.1.2/S2.1.3/Sustainable G1.1.6/G1.1.8 and Quality 416-1/416-2 S3.3 Article 47Development Quality S2.2
Improvement
Driving
Sustainability Sustainable Industrial
Governance Development
Capacity 2-17 / / / Upgrades
Sustainable 308-1/308-2/ S3.1.1/S3.2.1/S3.2.2/
Supply Chain S3.1
Building 414-1/414-2 E5.4.5
Article 45
Communication Information
with 2-16、2-29 / G1.3 Article 9 / Article 53 Security and
Stakeholders Privacy / S2.2.3 S3.4 Article 48
Protection
Material Issues
Management 3-1/3-2/3-3 / G1.1.9 Article 5 Protection of 401-1/401-2/401-3/
Employee S1.1/S1.2/S1.3.4/S1.5/ S4.1.1/S4.1.3/S4.1.4/
Rights and 405-1/406-1/408-1/ S4.1.6/S4.1.8/S4.1.9/ Article 49 / Article 50
Opportunities Interests
S4.3.3
409-1 S4.1.11/S4.1.12
in Clean / E5.4.2 E3.3.1/E3.3.2/E3.3.4 Article 37
Technology
Employee
Training and 404-1/404-2/404-3 S1.4 S4.3 Article 50
Building Win-Win Development
Circular / / E3.3.2/E3.3.4/E3.3.5 Article 37 Collaboration
Economy Build Better Communities Occupational 403-1/403-3/403-4/
Together Health
E3.1.1/E3.1.2/E3.1.3/ E1.1.1/E1.1.2/E1.1.3/ 403-5/403-6/403-7/ S1.3.1/S1.3.2/S1.3.3 S4.2 Article 50and Safety
Response to E3.1.4/E3.1.6/E3.2/ E1.1.4/E1.1.5/E1.1.6/ Article 21/Article 22/
403-8/403-9
302-4/305-1/305-2/ Article 23/Article 24/
Ecology Climate E3.3.1/E3.4.1/E5.1.1/ E1.1.7/E1.1.8/E1.1.11/
First Change 305-4/305-5
Article 25/Article 26/
E5.3.1/E5.4.1/E5.5.2/ E1.1.12/E1.1.13/E1.1.14/ Article 27/Article 28 Joining Forces
Drawing a for Beneficial 203-1/203-2/413-1
S4.2.1/S4.2.2/S4.3.2/
S1.1/S1.2.1/S1.2.2 Article 39 / Article 40
Green E5.5.3 E1.1.15/E1.1.16/E1.1.19 Action S4.4.2
Blueprint
E2.1.1/E2.1.2/E2.1.3/
303-1/303-4/305-7/ E2.1/E2.2.1/E2.2.3/ Standardizing 2-9/2-10/2-11/2-12/Environmental E2.1.4/E2.2.1/E2.2.2/ Article 29 / Article 30 / G1.1.1/G1.1.2/G1.2/
Compliance 306-1/306-2/306-3/ E2.2.5/E2.2.6/E2.2.7/ Corporate / /
E2.3/E5.5.1/E5.4.4/ Article 31 / Article 33
Steady 2-13/2-18/2-19/2-20/Governance G1.3/G3.2
Management 306-4/306-5 E2.4 Progress 405-1
E5.6 for the
Long Term
Consolidating
E1.3.1/E1.3.2/E1.3.4/ Protection Energy 302-1/302-3/302-4/ the of Investors’
Utilization E1.3.5/E3.3.3/E5.2.3/ E3.1/E3.2 Article 35 / Article 36 Foundations 302-5/ Rights and
2-16/2-29/201-1 G3.1/G4.1/G4.2 / /
of Development
E5.4.2 Interests
121 1222025 Environmental Social and Governance ReportSASAC “Research on the Shanghai Stock Exchange Feedback FormGlobal Sustainability Preparation of ESG Special China Corporate Self-Regulatory
Report Section Reporting Standards Reports by Centrally Sustainability
(GRI Standards) Administered Reporting Guidelines
Guidelines for Listed Dear Reader
SOE-Controlled (CASS-ESG 6.0) CompaniesListed Companies” No.14 - Sustainability Report (Trial) Thank you very much for reading this report. We greatly value and look forward to hearing your feedback. Your comments and suggestions are an important basis for us to continuously improve our corporate ESG information disclosure and to advance our ESG management and practices.We welcome and sincerely appreciate your valuable opinions!
Compliance
Operations 2-27/207-1/207-2/
and Risk G2.1/G5.1/G5.2 / /207-3
Management
1.What is your overall assessment of our ESG performance
Upholding 2-23/2-27/205-2/ G2.1.1/G2.1.2/G2.1.3/ Article 55 / Article 56
Business G2.2/G2.3206-1 G2.2.1/G2.2.2 Excellent Good Average Below Average PoorEthics
ESG
Performance / / A2 Article 6 2.What is your overall assessment of this report
Overview
Excellent Good Average Below Average Poor
Appendix Indicator Index / / A3 Article 57
3. How do you assess our performance in stakeholder communication
Feedback
Form 2-26 / A6 Article 9 Excellent Good Average Below Average Poor
4.How do you assess our performance in product responsibility
Excellent Good Average Below Average Poor
5.How do you think we are doing in terms of environment safety and occupational health
Excellent Good Average Below Average Poor
6.How do you think we are doing in terms of employee responsibility
Excellent Good Average Below Average Poor
7.How do you think we are doing overall in ESG
Excellent Good Average Below Average Poor
8.Do you have any comments or suggestions on our ESG performance and this report
You can contact us through the following ways
Address: Room 3313 Xingfa Building No. 188-9 Yanjiang Avenue Wujia District Yichang City Hubei Province China
Tel: 0717-6760939 Email: dmb@xingfagroup.com
123124
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