Lanpec Techonologics Limited 2024

0931-7639988/021-51219888

No. 8 Lanke Road Anning District， Lanzhou City Gansu ProvinceNo. 505 Rongchang Road Lüxiang Town， Jinshan District Shanghai Sustainability ReportSustainability Report 01|02Report Opening Sustainability (ESG) 3 Climate Action and Employee Development Management 9 Environmental Protection 21 and Workplace Safety 47

About the Report 3 ESG Governance System 9 Climate Risk Response 21 Employee Development 47

The Letter from the Chairman 4 Stakeholder Communication 10 Environmental Management System 24 Health & Safety 55

About LANPEC 5 Materiality Assessment Process 11 Waste Treatment 26

Resource Efficiency & Energy Conservation 27

Biodiversity Protection 29

Corporate Governance Technological Innovation

and Sound Operations 13 and Product Services 31 Appendix 59

Corporate Governance Framework 13 Technological Innovation 31 Quantitative Performance Dashboard 59

Business Ethics and Anti-Corruption 17 Product Quality 35 Report Index 62

Compliance Framework

Compliance Operations and Risk Control 19 Customer Service 39

Information Security and Emergency 20

Protection

Partnerships and

Social Responsibility 40

Responsible Supply Chain 40

Industry Collaboration 43

Social Welfare & Rural Revitalization 44Sustainability Report 03|04

Report Opening The Letter from the Chairman

About the ReportG“reetings! It is my great honor to share with you LANPEC's explorations and practices on our sustainable developmentjourney.Report Information Disclosure

In the field of green innovation the Company actively addresses the challenges posed by climate change. In 2024 we

This report is the second Sustainability Report released by Lanpec Technologies Limited (hereinafter referred to as continued to increase investment in clean energy equipment R&D driving the green and low-carbon transformation of

our core business. For example in major projects such as the Molten Salt Thermal Storage Coupled with Million-kW Unit

"LANPEC" "the Company" or "we"). It elaborates on the Company's sustainability philosophy and policies as well as its Demonstration Project and the Akesai Molten Salt Storage Tank EPC Project our advanced technologies provided strong

efforts in environmental protection social responsibility and corporate governance in 2024 addressing the expecta- support for improving energy storage and utilization efficiency. Throughout our production operations we continuously

tions and concerns of stakeholders. optimize processes actively promote water and electricity conservation technologies achieve energy savings and

consumption reduction and lower the company's carbon emissions. Simultaneously we vigorously develop circular

economy practices by establishing relevant management systems to increase waste recycling and reuse volumes thereby

reducing the environmental impact of industrial waste.Reporting Period Product quality is our lifeline while product culture gives our products soul. LANPEC consistently adheres to the philoso-

phy of "technology innovation as the guide market demand as the orientation and precision manufacturing as the

The report covers the period from January 1 2024 to December 31 2024. To maintain information continuity certain foundation" integrating quality improvement throughout the entire process of product R&D production and service. We

content has been retrospectively reviewed and extended. All information is sourced from internal company data and strictly comply with domestic and international product quality and safety standards establishing a comprehensive

quality management system and quality assessment mechanism. In 2024 our products demonstrated excellent quality

public records. performance achieving a 100% pass rate for finished goods. We place high importance on technological innovation

continuously increasing R&D investment. With multiple specialized research departments and platforms we maintain a

high proportion of R&D personnel. In 2024 we filed 25 patent applications and were granted 40 patents including 20

invention patents. These innovations have not only enhanced our products' technological value and competitiveness but

Scope of the Organization also laid a solid foundation for sustainable development.Sound corporate governance ensures stable enterprise development. We have established a comprehensive governance

This report encompasses all operational activities of Lanpec Technologies Limited and its member enterprises aligning

structure where the Board of Directors and Supervisory Board perform their respective duties with independent

with the scope disclosed in the Company’s annual report. directors fulfilling their roles effectively. In 2024 we optimized our organizational structure to improve operational

efficiency. Regarding business ethics and anti-corruption we maintain a "zero-tolerance" stance through enhanced

integrity education anti-corruption training and strengthened supply chain anti-corruption management creating an

upright and positive work environment. We emphasize compliance operations and risk control establishing a compre-

hensive compliance management system to regularly identify and assess risks ensuring all operations comply with legal

Reference Standards and regulatory requirements.As a responsible enterprise we actively fulfill social responsibilities. In supply chain management we are committed to

The GRI Universal Standards (2021 version) issued by the Global Sustainability Standards Board (GSSB) the Shanghai building a sustainable supply chain implementing full-cycle supplier management and prioritizing suppliers with EHS

Stock Exchange Listed Company Self-Regulatory Guidelines No. 14 – Sustainability Reporting (Trial) and the Shanghai management systems to promote sustainability throughout the supply chain. In social welfare and rural revitalization we

Stock Exchange Listed Company Self-Regulatory Guide No. 4 – Sustainability Reporting Preparation issued by the actively give back to society through donations to Lüxiang Town in Shanghai's Jinshan District and Sinomach's designated

Shanghai Stock Exchange the Recommendations Report of the Task Force on Climate-related Financial Disclosures poverty alleviation areas supporting poverty relief and infrastructure construction. We also organize employee volunteer

activities support education in remote areas and donate electric sanitation vehicles to improve rural environmental

(TCFD) issued by the Task Force on Climate-related Financial Disclosures (TCFD) and the 17 Sustainable Development conditions.Goals (SDGs) of the United Nations.Moving forward we will continue to uphold green development principles intensify innovation efforts enhance product

quality and service standards strengthen corporate governance and actively fulfill social responsibilities. We are

committed to achieving harmonious coexistence between enterprise society and environment contributing to buildingAccess Methods a beautiful China with "lucid waters and lush mountains”!

Thank you!

This report is available in digital format for your reference. You may access it through the Company's official website

(www.lanpec.com) or the Shanghai Stock Exchange website (www.sse.com.cn).Sustainability Report 05|06

About LANPEC Business Portfolio

The Company's production facilities are located in two key regions - Lanzhou and Shanghai with a total site area of approximately

Company Profile 41.3 hectares and production floor space covering 200000 square meters. The facilities feature a maximum lifting capacity of 500

tons.Lanpec Technologies Limited (hereinafter referred to as "LANPEC") is a listed company with central enterprise controlling

shares restructured from Lanzhou Petroleum Machinery Research Institute (LPMRI) - a national first-class research

institution established in 1960. Lanzhou Base The facility occupies approximately 7.3 hectares of land with nearly 40000 square meters of produc-

As a core member enterprise of Sinomach LANPEC stands as a pioneer in China's petroleum and petrochemical equip- tion area. It holds the A1-grade pressure vessel manufacturing certification and primarily produces

ment industry particularly in offshore and desert oilfield development. In 2011 LANPEC (Stock Code: 601798) entered the various high-end petrochemical products including high-efficiency energy-saving heat exchangers

capital market and achieved full listing on the Shanghai Stock Exchange. By the end of 2024 the Company had obtained advanced tower vessels and LNG spherical tanks with a maximum lifting capacity of 200 metric tons.

28 critical certifications from relevant national authorities including design and manufacturing licenses for special equip-

ment (pressure vessels and piping systems) of A1 A2 and A3 classes ASME manufacturing certification as well as U and

U2 stamp certifications. With 1013 employees the Company serves as a Tier-1 network supplier for CNPC Sinopec and

CNOOC. Our products have been exported to dozens of countries and regions across Asia Africa and South America. Shanghai Base The facility spans approximately 510 mu (34 hectares) of land with about 110000 square meters of

workshop area. Holding the A1-grade pressure vessel manufacturing certification it primarily under-

takes production of high-pressure hydrogenation equipment fertilizer production devices and

plate-type series products featuring a maximum lifting capacity of 500 metric tons.Total R&D Authorized

Employees Personnel Patents

1013370334

Participation in National Participation in National

Standard Development/Revision Standard Development/Revision

3647

Committed to independent R&D of core technologies in petroleum petrochemical and

Core new energy equipment driving national energy equipment security and technological

Functions

advancement.Guided by technological innovation market demand and precision manufacturing we

Strategic focus on two core sectors—petroleum & petrochemical equipment and new energy

Positioning equipment—delivering high-quality system solutions across products projects and

services to become a specialized sophisticated and innovative R&D-driven enterprise.Sustainability Report 07|08

Product Model Major Honors —— Credit Ratings

Heat Exchange Technology AA BBB

QuantData Wind

A+ BBB

IIGF CCXI

Passive Index

Heat Exchangers Air Coolers

Oil and Gas Resources (931248.CSI) Wind Strategic Emerging Industries Index (866400.WI)

Specialized Fined Peculiar and Innovative CRHC Central SOEs

Little Giants Theme Inde（x 8841451.WI） Composite Index (932004.CSI)

Other Specialized Technologies for

Petroleum & Petrochemical Applications

National Technology Innovation Demonstration Enterprise

Lanpec Technologies Limited

National Intellectual Property Demonstration

Enterprises and Advantageous Enterprise

Lanpec Technologies Limited

Separation Technology Equipment Spherical Tanks & Pressure Vessel Technologies

Specialized Fined Peculiar and Innovation “Little Giants” Enterprise

Lanpec Technologies Limited

National Green Factory

Lanpec Technologies Limited

High-Tech Enterprise

Lanpec Technologies Limited

Petroleum Drilling & Production Technology Equipment Lanpec Technologies Limited (Shanghai)

Lanzhou Petrochemical Equipment Inspection Institute of Mechanical Industry Co. Ltd.Sustainability Report 09|10

Sustainability (ESG) Management Stakeholder Communication

LANPEC's social responsibility stakeholders include shareholders/investors customers suppliers employees government/regu-

lators communities and media among others.ESG Governance System Stakeholder Communication Categories Channels Key Topics LANPEC’s Response

LANPEC takes concrete actions to support the UN 2030 Agenda for Sustainable Development integrating Environmental Social General Meeting

of Shareholders Corporate Governance Compliance Operations

and Governance (ESG) principles into all aspects of corporate operations to ensure the effective implementation of the company's

sustainable development philosophy. Company Announcements Information Disclosure Enhanced Communication

During the reporting period to establish and improve the ESG management system of LANPEC and comprehensively enhance the Shareholders/

Company's ESG performance capabilities the Company newly established a Strategy and Sustainable Development Committee. Investors Investor Hotline Product/Service Safety & Quality Product Safety Improvement

This committee is responsible for researching and providing recommendations on environmental social and governance matters

while collaborating with the company's environmental functions supply chain management and human resources teams to Investor Roadshows Anti-Commercial Bribery & Anti-Corruption Zero-Tolerance Policy

strengthen sustainability capacity-building. Additionally the company regularly engages external expert advisors to improve its

Customer Hotline Energy Efficiency Energy Structure Optimization

ESG data indicator system deepen practical ESG implementation and enhance ESG report preparation.Email Product/Service Safety & Quality Product Safety Enhancement

In 2024 the Company actively studied the latest sustainable development policies and guided by the financial materiality princi- Customers

ple aligned them with its business operations to upgrade its sustainability reporting framework. Adopting a dual materiality Customer Meetings Green Technology Innovation R&D in Green Technologies

perspective the company conducted in-depth analyses of key ESG issues in relation to its business development fully integrating

ESG principles into management processes. Customer Surveys Green Operations Green Procurement Implementation

Email Energy Consumption Energy Structure Optimization

Conference Calls Pollutant Emissions Emission Reduction

Suppliers On-site Visits Green Operations Green Office Practices

Video Conferences Supply Chain Security Strengthened SCM

Board of Supplier Conferences Waste Management Circular Economy Practices

Directors

Staff Meetings Employee Rights Protection Safeguarded Employee Benefits

Departmental Meetings Training Investment Enhanced Training Programs

Employees

E-Newsletters/Internal Media Innovation Incentives Innovation MotivationMechanisms

Annual Employee Surveys Special Project Investment Increased Dedicated Funding

Government Project

Applications Pollutant Emissions Emission Reduction

Regulatory Reports Environmental Compliance Compliance Management

Audit Remuneration and Nomination Strategy and Sustainable Government/ Policy Consultations Anti-Commercial Bribery & Anti-Corruption Strict Anti-Bribery Measures

Committee Evaluation Committee Committee Development Committee Regulators

Tax Reporting Information Security Privacy Protection

Environmental Safety

Inspections Energy Efficiency Energy Conservation

Social Media Updates Energy Efficiency High-Efficiency/Low-Emission Operations

Press Conferences Green Operations Carbon-Neutral Strategy

ESG

Community & Media Community Events Climate Change Response Waste Recycling

ESG Working Group Management

Environmental Reports Waste Treatment Ecological RestorationProjects

Online Q&A Sessions Ecosystem and Biodiversity Protection Biodiversity InitiativesSustainability Report 11|12

Materiality Assessment Process Quadrant Composite Ranking Material Topics Topic Categorization

Double Materiality Analysis serves as the core methodology for the Company in compiling its annual sustainability report 1 Core Issues 1 Energy Utilization Environmental

formulating long-term ESG strategic objectives and engaging with stakeholders. LANPEC conducts this analysis from two 1 Core Issues 2 Pollutant Emissions Environmental

dimensions—financial materiality and impact materiality—referencing frameworks including the Shanghai Stock Exchange

1 Core Issues 3 Green Technology Innovation Environmental

Listed Company Self-Regulatory Guidelines No. 14 – Sustainability Reporting (Trial) Shanghai Stock Exchange Listed Company

Self-Regulatory Guide No. 4 – Sustainability Report Preparation the United Nations Sustainable Development Goals (SDGs) 1 Core Issues 4 Supply Chain Security Social

GRI Universal Standards 2021 ISO 26000 and SASB topics alongside other sustainability-related standards. The Company

1 Core Issues 5 Product & Service Safety & Quality Social

also incorporates ESG rating systems from service providers such as MSCI CSI and Wind to establish its ESG topic inventory.Furthermore LANPEC identifies and consolidates both universal and industry-specific topics applicable to its operations by 1 Core Issues 6 Employees Social

considering macro-level policies in its operational regions sector-specific policies as well as the materiality topic selection 2 Financially Material Issues 7 Green Operations Environmental

methods and prioritization outcomes of peer companies.

2 Financially Material Issues 8 Environmental Compliance Management Environmental

LANPEC’s Materiality Assessment Results 2 Financially Material Issues 9 Customer Service Social

2 Financially Material Issues 10 Anti-Bribery & Anti-Corruption Governance

Very Important 1

10 2 Financially Material Issues 11 Innovation-Driven Development Social

32

4 2 Financially Material Issues 12 Green Products & Services Environmental

91365

3 Impact Material Issues 13 Climate Change Response Environmental

3 Impact Material Issues 14 Circular Economy Environmental

8

16 15 3 Impact Material Issues 15 Waste Management Environmental

17

18 3 Impact Material Issues 16 Hazardous Substance 7 Emissions & Management Environmental

14 3 Impact Material Issues 17 Water Resource Utilization Environmental

19

6 3 Impact Material Issues 18 Ecosystem & Biodiversity Protection Environmental

227

3 Impact Material Issues 19 Stakeholder Communication Governance

5

21 20 4 General Issues 20 Anti-Unfair Competition Governance

24

26 4 General Issues 21 Equal Treatment of SMEs Social4

1098

25 4 General Issues 22 Employee Development & Training Social27

3 4 General Issues 23 Data Security & Customer Privacy Protection Social

23 1112 4 General Issues 24 Talent Attraction Social

2 28 4 General Issues 25 Technology Ethics Social

4 General Issues 26 Social Contribution Social

1 Not Important Very Important

1 2 3 4 5 6 7 8 9 10 4 General Issues 27 Due Diligence Governance

Significance in Corporate Financial Performance

4 General Issues 28 Rural Revitalization Social

Environmental Social Governance

Significance in Economic Social and EnvironmentalSustainability Report 13|14

Corporate Governance

and Sound Operations Articles of Association Rules of Procedure for Shareholders' Meetings

Alignment with Sustainable Development Goals (SDGs)

Rules of Procedure for Board Meetings Rules of Procedure for Supervisory Board Meetings

Working Rules for the Audit Committee Working Rules for the Remuneration and Evaluation Committee

LANPEC has established a comprehensive governance framework with the Board of Directors and Supervisory Committee Nomination Committee Working Rules Strategy Committee Working Rules

performing their respective duties effectively. Independent directors fully exercise their oversight functions to ensure sound

strategic decision-making. Operationally the Company has strengthened its internal control systems standardizing financial

approvals and project management processes to guarantee optimal resource allocation. We place strong emphasis on the timeli-

ness and accuracy of information disclosure maintaining proactive communication with stakeholders. This governance approach Independent Directors Special Meeting

enables sustainable development in full compliance with regulations achieving synergistic progress across economic environ- Independent Directors Work Regulations Work Regulations

mental and social dimensions.Corporate Governance Framework LANPEC ESG Management System Board Secretary Work Regulations

The Board of Directors of Lanke High-Tech consistently dedicates itself to safeguarding the legitimate rights and interests of the

company and all shareholders. It proactively fulfills its management responsibilities continuously enhances corporate governance

capabilities and strengthens the independence and diversity of the board composition. The Board actively engages in investor LANPEC Connected Transactions

dialogues and participates in investor relations management while standardizing information disclosure practices. Management Regulations Insider Information Insider Registration System

Governance Structure LANPEC External Directors and Supervisors LANPEC Subsidiary (Equity-holding) Dispatch Management Regulations Company Management Regulations

The Company strictly complies with the requirements of the Company Law Securities Law Corporate Governance Guidelines for

Listed Companies Shanghai Stock Exchange Listing Rules and other laws regulations and normative documents to improve the

governance mechanism and establish a reasonable and efficient corporate governance structure so as to ensure standardized

operation of the Company maintain the status of the general meeting of shareholders as the supreme authority of the Company

give full play to the functions and roles of the board of directors the supervisory board and various special committees under the Governance Capacity Optimization Framework

board of directors clarify the rights and obligations of shareholders directors supervisors and senior management personnel

and ensure that shareholders fully exercise their legitimate rights. The Company has established detailed provisions in the LANPEC Board Meeting Procedures governing the convening of

In order to promote the high-quality development of the Company better advance the realization of the Company's strategic meetings voting procedures and proposal deliberations to ensure all board meetings are conducted in compliance and with high

planning objectives clarify the division of responsibilities improve the efficiency of the Company's operation and management efficiency. In 2024 all directors fulfilled their duties with diligence achieving a 100% attendance rate at board meetings.and in light of the Company's strategic development plan and actual operation and development situation we has adjusted its

organizational structure in 2024 in accordance with the relevant laws regulations normative documents and the provisions of the

Articles of Association of the Company.

2024 Key Performance Indicators (KPIs)

Supervisory Board

General Meeting Executive

of Shareholders Board of Directors Management

3 General Meetings 7Board Meetings 6 Supervisory Board

of Shareholders Meetings

Strategy & Sustainable Nomination Remuneration & Evaluation

Development Committee Committee Committee Audit CommitteeSustainability Report 15|16

Advancing Diversity and Independence in

Corporate Governance Information Disclosure and Market Value Management

The Company strictly adheres to the relevant regulations of the China Securities Regulatory Commission (CSRC) and the Shanghai

The Company's directors are elected through shareholder resolutions at general meetings with each board serving a three-year Stock Exchange (SSE) upholding the principles of "transparency fairness and impartiality" in information disclosure. We fulfill our

term. LANPEC has institutionalized director nomination protocols and procedures in its governing documents including the disclosure obligations with authenticity accuracy completeness and timeliness. In 2024 the Company successfully completed the

Articles of Association. As of December 2024 the board comprises nine directors three of whom (33%) meet independence preparation of high-quality periodic reports including the 2023 Annual Report the 2024 First Quarter Report the Interim Report

criteria. The current board includes one female director. The independent directors possess complementary expertise: one and the Third Quarter Report. A total of 143 announcement documents were disclosed without any errors and no regulatory

inquiries were received.certified accounting professional one legal affairs specialist and one industry veteran ensuring comprehensive oversight of

corporate matters. To uphold governance transparency the Company systematically discloses directors' external affiliations with The Company places great emphasis on strengthening communication with shareholders and investors diligently safeguarding

complete details documented in the 2024 Annual Report. the legitimate rights and interests of investors particularly public investors and fostering long-term stable and constructive

relationships between the Company and its investors. The Company has designated dedicated personnel to manage and maintain

2024 Key Performance Indicators (KPIs) its official website providing investors with a platform to access the latest corporate developments periodic reports and tempo-

rary announcements on significant matters. Additionally the Company has assigned specialized staff to handle investor inquiries

via telephone fax email and the SSE E-Interaction platform. Within the bounds of the Company's information disclosure policies

we conscientiously address investor questions consider their feedback and diligently facilitate investor research visits to the

listed company.

2024 Key Performance Indicators (KPIs)

33%100%

Independent Director Ratio Audit Committee Independence Ratio

3 Online Earnings 6 Analyst Meetings 9 Institutional

Briefing Sessions Investor Meetings

Standardized Remuneration Management System

The Remuneration and Evaluation Committee of the Company is mandated to formulate and review compensation policies and

proposals for directors and senior management taking into comprehensive consideration the corporate guidelines and objectives

established by the Board of Directors prevailing compensation benchmarks among peer companies as well as the specific LANPEC Investor Engagement Activities 2024

responsibilities and individual performance of the Company's directors and senior executives. The Committee provides formal

recommendations regarding performance evaluation protocols while exercising stringent oversight over compensation system

implementation with explicit provisions prohibiting any director or their affiliated parties from participating in decisions pertain- Throughout 2024 the Company organized nine on-site investor research sessions during which participants gained

ing to their own remuneration. insights into the Company's shareholder structure development strategies and reform initiatives. These engage-

ments provided investors with comprehensive updates on the Company's operational performance and future growth

Regarding independent director compensation the Company provides an annual independent director allowance standardized plans while facilitating in-depth discussions and clarifications on market-focused topics. Such interactions signifi-

at RMB 120000 (pre-tax). External directors and supervisors who do not hold concurrent positions within the Company are cantly strengthened investor confidence and support while effectively enhancing the Company's market reputation

expressly excluded from receiving additional director or supervisor remuneration. and brand equity. Concurrently the Company proactively leveraged social media platforms and financial portals to

disseminate timely updates and material information maintaining close communication with investors. These efforts

Investor Rights Protection and Conflict Avoidance further elevated the Company's transparency and credibility within the capital markets.The Company places strong emphasis on the reasonable opinions and demands of investors particularly minority shareholders.In accordance with the Company Law Securities Law and the Shanghai Stock Exchange Self-Regulatory Guideline No. 1—

Standardized Operations regarding profit distribution and cash dividend policies the Company has clearly defined the conditions

and ratios for profit distribution under different allocation forms in its Articles of Association. This standardizes the decision-mak-

ing procedures and mechanisms for profit distribution which helps better protect the interests of investors especially minority

shareholders.The Company attaches great importance to the interests of minority shareholders and has established a comprehensive policy

system to avoid and prevent conflicts of interest. During the reporting period adhering to the principles of fairness transparency

and impartiality the Company formulated detailed rules for signing related-party transaction agreements based on market fair

pricing and disclosed the necessity and impact of related-party transactions conducted within the year. Furthermore the Compa-

ny strictly complied with the Articles of Association and other relevant laws and regulations conducting thorough process reviews

for major matters such as related-party transactions external guarantees and external investments.Sustainability Report 17|18

Business Ethics and Anti-Corruption 2024 Key Performance Indicators (KPIs)

Compliance Framework

LANPEC maintains a "zero-tolerance" stance against corruption continuously enhancing its anti-corruption compliance frame-

work and supervisory procedures. By enhancing oversight and accountability in operational processes the Company has estab-

lished an effective monitoring mechanism that cultivates a robust and trustworthy operational environment. 100% 100%

Governance of Business Ethics Anti-Corruption Training Anti-Corruption Training Coverage Rate for Directors Coverage Rate by Department

In 2024 the Party Committee and Discipline Inspection Commission of LANPEC strengthened integrity education and fostered a 100% Employee Anti-Corruption Training Coverage Rate

clean business environment through executing Party Conduct and Integrity Responsibility Agreements updating cadres' integrity

records with signed Integrity Pledge Letters establishing Integrity Cooperation Agreement with qualified suppliers and distribut-

ing SINOMACH's Positive/Negative Checklist for Implementing the Central Eight-Point Directive to all employees thereby

safeguarding the Company's high-quality development. Under the Board's leadership the Company advanced anti-corruption

efforts in compliance with superior discipline inspection requirements with the Discipline Inspection Office disseminating the

SINOMACH's Positive/Negative Checklist to every employee across all departments and mandating organized training sessions for LANPEC 2024 Anti-Corruption Internal Training Series

strict implementation.On May 7 2024 LANPEC held a warning education conference during which

Cao Jianhong Secretary of the Discipline Inspection Commission of SUMEC

Special Topics I: Improper Acceptance/Gifting of Special Topics II: Group Corporation (SUMEC) delivered a keynote speech. He thoroughly

Valuable Specialty Products and Monetary Gifts Improper Dining and Entertainment analyzed the severe damage caused by relevant cases to enterprises and

emphasized the critical importance of strengthening supervision over leading

Party-member officials particularly those in top leadership positions

("first-in-command"). His presentation served as an impactful warning

Special Topics III: Special Topics IV: education lesson for all company cadres. Approximately 90 attendees partici-

Improper Reception Practices Improper Handling of Wedding/Funeral Celebrations pated in the conference including members of LANPEC leadership team and

deputy managers or above joining via the main venue and the Lanzhou

branch venue.Special Topics V: Special Topics VI:

Improper Issuance of Allowances or Benefits Improper Business Travel The Company's Discipline Inspection Commission conducted timely integrity

interviews for all newly appointed and transferred cadres throughout 2024

strictly implementing the "mandatory interview upon promotion" principle.Key activities included: the first collective integrity talk session held on March

Special Topics VII: Special Topics VIII: 27 for 14 newly promoted executives followed by the second session on July

Improper Allocation/Use of Official Vehicles Improper Allocation/Use of Office Space 25 involving 25 promoted cadres. These systematic integrity education

initiatives significantly enhanced Party members' and cadres' understanding

of clean governance importance strengthened professional ethics

滚滚长江东逝水 Special Topics IX: awareness and improved anti-corruption capabilities.Special Topics X:

Improper Profit-Making Activities Improper Overseas Travel

Special Topics XI: Special Topics XII:

Dereliction of Duty and Inaction Bureaucratic Formalism Burdening Grassroots Units Supply Chain Anti-Corruption Compliance System

LANPEC enhances anti-corruption management in supplier relationships. The Company has established a joint anti-corruption

mechanism with suppliers and contractors. In accordance with the requirements of the Corporate Discipline Inspection Commis-

Special Topics XIII: sion all departments and subsidiaries must sign a Integrity Cooperation Agreement alongside procurement contracts with suppli-

Failure in Implementing Primary Responsibility for Conduct Building ers and contractors. This initiative aims to foster a fair and transparent transaction environment prevent and resist commercial

bribery and guard against disciplinary violations and illegal activities.Anti-Corruption Employee Training Program 2024 Key Performance Indicators (KPIs)

LANPEC prioritizes integrity culture training for all departments and employees achieving 100% coverage of senior management

middle-level department heads and deputies as well as frontline personnel in critical functions such as financing logistics

procurement administrative procurement and supplier collaboration. The Company particularly focuses on new hires to establish 100%

a comprehensive integrity training and awareness management cycle. In 2024 LANPEC conducted two onboarding training The Signing Rate of the Clean Cooperation Agreement

sessions for all new employees covering corporate legal compliance and integrity building systems achieving 100% participation

rate among new staff.Sustainability Report 19|20

Whistleblower Protection LANPEC Operational Risk Identification

LANPEC supports all stakeholders in providing any form of suggestions and feedback regarding business ethics to the Company Risk Categories Risk Descriptions Mitigation Strategies

and maintains confidential handling of relevant reports. The Company has clearly established multiple policy provisions and

commits to ensuring fair treatment for whistleblowers in areas including reporting channels handling procedures and Risks arising from non-compliant operations or Establish comprehensive compliance management

systems covering organization policies processes and

whistleblower protection. It explicitly requires that personnel handling reports must not disclose whistleblower information in any professional conduct that may lead to legal Compliance Risks operational requirements; Enhance capabilities in

form; must not independently investigate whistleblowers; and must redact whistleblowers' personal information when necessary liabilities regulatory penalties financial losses compliance risk prevention response and resolution;

during report acceptance and result procedures thereby effectively protecting whistleblowers' legitimate rights and interests. or reputational damage Ensure timely and proper risk mitigation

Meanwhile the Company has included reporting channels as essential clauses in relevant policy documents such as the Employee Legal &

Risks of employees or related parties accepting Develop specialized management systems and depart-

Handbook bidding and procurement policies and ensures all reporting channels remain unimpeded and effective. Compliance Risks ments to ensure ethical business conduct

Integrity & Ethical bribes misappropriating company assets or

obtaining personal benefits through fraudulent

Risks means causing detriment to the Company Formulate clear corporate policies and legal compliance

requirements; Maintain close compliance communica-

LANPEC Public Reporting Channels tion with business teams and clients

Implement systematic quality risk management

Hotline 021-51953538 processes and guidelines covering full project lifecyclesRisks arising from inadequate production

lanpec-jb@lanpec.com; This dedicated mailbox serves exclusively for receiving all corrup- technology insufficient product design consid-

Email tion-related reports. The Company's Compliance Department has assigned specialized person-

Quality Risks erations or lax production process controls Utilize three digital platforms for risk management

nel to conduct regular monitoring of this mailbox to ensure timely processing of all reported leading to quality uncertainties

information. production issue reporting and delivery problem

notification to establish closed-loop risk control

Mailing Address Discipline Inspection Office Lanpec Techonologies Limited No. 505 Rongchang Road Lüxiang Town Jinshan District Shanghai P.R.China

Develop clear safety management plans and conduct

Risks of fire explosion or other accidents during regular hazard inspections

Work Safety Risks

Operational usage and storage of production materials

Compliance Operations and Risk Control Equip fire prevention and fighting facilities; Establish Risks internal safety training portals and strengthen person-

nel training

LANPEC is committed to integrating compliance management throughout all aspects of business operations and management Establish a multi-tier responsibility system that clearly

aiming to empower business development through compliance governance. Simultaneously the Company continuously optimizes defines occupational disease prevention duties for both

and improves its compliance systems based on actual business conditions ensuring that both corporate and employee conduct corporate functional departments and on-site

adhere to all applicable laws regulations industry standards and internal corporate policies. Occupational Health hazards to frontline personnel during management personnel

Health Risks business operations Strengthen occupational disease hazard education for

construction personnel conduct regular training

Compliance Governance System sessions elevate awareness of occupational health risks and ensure mastery of prevention and control

methodologies.To further standardize internal audit practices enhance audit quality and protect investors' legitimate rights and interests the Risks of medical materials and production Properly store the raw materials required for business Environmental

Company has established a comprehensive compliance management system covering corporate governance market transac- processes polluting and affecting nearby operations in accordance with standards and appropri-ately handle production noise as well as discharged

tions labor laws and other areas in accordance with the Supervision Law of the People's Republic of China the Audit Law of the Pollution Risks communities wastewater and waste gas.People's Republic of China and the Provisions of the National Audit Office on Internal Audit Work.In daily operations the Company maintains a three-line defense mechanism to ensure business compliance including the Pay Taxes in Accordance with the Law

business department the compliance department and the senior management team.The Company strictly complies with the Enterprise Income Tax Law of the People's Republic of China and the Tax Collection and

The Company designates the Legal Department as the lead compliance unit which regularly evaluates and updates compliance Administration Law of the People's Republic of China having established a comprehensive fiscal and taxation management system

documents to ensure alignment with the latest laws regulations and industry developments. All levels of management and that includes the LANPEC Financial Management Measures. Under this system the Board of Directors serves as the highest

employees actively participate in and implement these measures to ensure effective compliance management. The Company governing authority responsible for reviewing and approving the Company's tax strategies while the Financial Management

continues to improve its business compliance review mechanisms and has successively issued the LANPEC Compliance Manage- Center and Chief Financial Officer are charged with their execution. To ensure full compliance with tax obligations and effective risk management the Company conducts internal audits and financial/tax audits at least annually. These measures are imple-

ment Measures LANPEC Legal Dispute Case Management Measures LANPEC Major Legal Dispute Case Management Measures mented to rigorously fulfill tax compliance requirements and maintain robust controls against tax-related risks.LANPEC Contract Management Measures LANPEC Rules and Regulations Management Measures LANPEC Fund Management

Measures LANPEC Procurement Management Measures LANPEC Supplier Management Measures LANPEC Project Review

Management Measures and LANPEC Financial Derivatives Business Management Measures which comprehensively cover all Information Security and Emergency Protection

business areas and levels of the Company.Lanke High-Tech places paramount importance on data and privacy security having established a comprehensive internal

information security management system and organizational structure. The Company continuously enhances its technical

capabilities in the field of information security to maintain an all-round defense of security baselines.Risk Identification and Control System The Company strictly complies with legal statutes including the Cybersecurity Law of the People's Republic of China the Electronic Signature Law of the People's Republic of China and the Regulations on Security Protection of Computer Information Systems of

the People's Republic of China.The Company has established a governance structure for ESG risk management led by the Board of Directors and primarily

executed by the Strategy and Sustainable Development Committee based on its operational realities and business development Internally the Company has implemented an information security management system centered on policy documents such as the

needs. Furthermore the Company periodically collaborates with external experts to promptly identify risk factors in accordance Computer and Information System Management Measures Information Systems Information Equipment and Storage Equipment

with actual business operations and issues corresponding notification documents. This ensures the full implementation of the Management Regulations Security and Confidentiality Strategies for Classified Computers and the Comprehensive Risk Manage-ment Measures. This system ensures organized and leadership-guided execution of information security management activities

Company's risk management philosophy and safeguards its healthy development. across all operations.Sustainability Report 21|22

Climate Action and

Risk Category Risk Description Financial Impact Mitigation Measures Time Horizon

Environmental Protection The "Dual Carbon" policy Low-carbon requires enterprises to undergo The company actively optimiz-low-carbon transformation es and deploys water and

Technology necessitating investment in Increased costs electricity saving technologies Long-term

Commitment to Sustainable Development Goals (SDGs) R&D and deployment of to achieve energy conservation Transition energy-saving and environ- and consumption reduction.mental protection technologies.Technical New The "Dual Carbon" policy drives The company has a complete

Risks rapid development in the R&D system and rich R&D Technology company’s industry requiring Increased costs experience supported by Long-term

Investment proactive investment in new industry-leading technological

technology R&D to maintain expertise and financial

Risks market position. strength.Raw

Tran- Material Major raw material suppliers of The company actively builds a the company may face stricter Increased costs sustainable supply chain

The climate and environment serve as the cornerstone for LANPEC's survival and development. A stable climate ensures the sition Supply energy conservation and Declined revenue incorporating sustainability Long-term

smooth and continuous progress of its business and actively safeguarding the ecological environment is an unshirkable social Risks Difficulties emission reduction require- into supplier evaluation criteria

responsibility of the enterprise. In practical actions we has adopted a multi-pronged approach. On the production line it has or Cost ments under sustainable to ensure supply chain stability. development initiatives.been continuously optimizing processes to make every effort to reduce energy consumption and greenhouse gas emissions and Market Increase

earnestly implement energy conservation and emission reduction. In the field of R&D it has increased investment in clean energy Risks Customer The company integrates green

equipment to contribute to the green transformation of the industry. The Company has also been committed to the greening of With the gradual adoption of and low-carbon concepts into

the plant area to enhance the ecological self-purification function. Moreover it has comprehensively implemented paperless Preference ESG concepts customers may Declined revenue its products and services to Long-term

office in daily operations to help employees develop environmental protection habits. With a series of powerful measures the for Green prefer environmentally friendly achieve green business products.Company is bravely advancing at the forefront of addressing climate change and steadily embarking on a new journey of transformation and support Products sustainable development.high-quality development in the process of protecting the environment.Stakeholders such as customers

Climate Risk Response and investors attach greater The company establishes a Repu- ESG importance to environmental sound ESG management

tational Negative information disclosure. When Declined revenue system integrating ESG Short-term

LANPEC consistently emphasizes the impacts of climate change on corporate operations. This year the Company has conducted the disclosed information falls management into risk control Risks Events short of stakeholders' expecta- to prevent negative ESG

information disclosures in accordance with the recommendations of the Task Force on Climate-Related Financial Disclosures tions it may have an adverse incidents.(TCFD). impact on the company.Climate Risk Governance System Develop and implement Future climate change may emergency management Typhoons increase the frequency of systems for typhoon and flood

We actively respond to the 1.5°C global warming target set by the Paris Agreement and the Action Plan for Carbon Peaking Before Short-term and typhoons and extreme precipi- Increased costs prevention. Equip emergency Short-term

2030 issued by the State Council. Based on our own business referencing relevant industry cases and integrating with the tation raising the company’s Risks Declined revenue equipment and supplies disaster risk and potential

company's ESG governance foundation we are gradually incorporating a climate risk governance framework system into our Floods conduct typhoon disaster losses. analyses and establish

operations. emergency drill mechanisms.Climate Change Risks and Opportunities Management Introduce employee high-tem-

Rising The company’s Shanghai office perature allowances upgrade

In accordance with the TCFD framework recommendations we have systematically identified climate-related risks and opportuni- is located in a subtropical cooling systems in factories Average region vulnerable to high-tem-

ties that may impact the Company and implemented corresponding mitigation strategies. Increased costs and offices develop heatstroke Medium-term

Tempera- perature impacts from Declined revenue emergency plans and achieve long-term climate change. energy efficiency in cooling

Risk Category Risk Description Financial Impact Mitigation Measures Time Horizon Physi- tures systems.The increasingly improved The Company regularly cal

ESG system of sustainable informa- Increased expenses discloses environmental

Reporting Riskstion disclosure standards for Increased non-operat- information in accordance with

Obliga- Chinese enterprises has set ing expenditures laws and regulations and

Medium-term

Sea-Level The company’s Shanghai office

tions higher requirements for ESG formulates and publishes Long-term located at low altitude and close Increased costs Develop special emergency Long-term

information disclosure. independent ESG reports. Risks Rise to the sea is vulnerable to Declined revenue plans for flood prevention.Carbon sea-level rise. The Company's main business

Emission involves a certain level of The Company continuously Policy & Reduction carbon emissions. Under the Increased costs monitors policies related to the

Regulatory Require- "dual carbon" goals the Increased non-operat- "dual carbon" initiative to Medium-term

Tran- Risks ments and company may face stricter ing expenditures improve energy efficiency and According to WRI data the

sition Supervi- carbon emission reduction optimize energy structure. company’s production base in

sion requirements and supervision. Gansu is located in an area with Actively promote water-saving

Risks

China may advance the high drought risk and water

technologies and advocate

The ompany continuously stress. Water shortages may water conservation. The construction of a carbon Droughts Declined revenue production base is in an urban

Carbon emissions trading market and

explores carbon reduction disrupt production and employ- Medium-term

the petrochemical industry in potential to minimize carbon ee activities leading to area with complete infrastruc-

Market which the Company operates Increased costs Medium-term operational downtime and ture making water shortage emissions generated during

Expansion may be included in the future revenue loss. risks largely manageable.potentially requiring additional production and operations

quota purchases and generat- preparing for the expansion of

ing extra costs. the carbon market.Sustainability Report 23|24

Risk Category Risk Description Financial Impact Mitigation Measures Time Horizon Environmental Management System

Through optimizing manage- The Company attaches

ment models implementing importance to energy conser- LANPEC adheres to the development philosophy of conservation and environmental protection and actively embraces the vation and emission reduction

Improvement of low-carbon technologies and promotes green and low-car- circular economy. In product development design and/or formulation of production processes it advocates the use of new

Resource Resource replacing energy-efficient Declined bon transformation of its main business implements green products new processes new materials and new technologies that are non-toxic low-toxic and generate less waste and prefers

Efficiency Utilization equipment the company can costs office practices and water Short-term clean and safe production technologies and processes. It also promotes the use of new products that are easy to recycle dispose

Efficiency effectively enhance the usage conservation and reduces

efficiency of equipment resource consumption in of or degrade in the environment to reduce the generation and emission of industrial waste. The Company has established a

energy and water resources. production and office process-es. number of systems including the Safety/Environmental Management Procedures (LANPEC 501 - 2024) the Environmental Protec-

Replace grid electricity with tion Management System (LANPEC [2023] No. 100) and the Environmental Protection and Hazardous Waste Pollution Prevention By optimizing the energy

structure the enterprise photovoltaic green power to and Control Management Responsibility System (LANPEC [2023] No. 101). The Company's environmental protection system has Energy Use of Renew- increases the proportion of Declined increase the proportion of obtained the ISO9001:2015 certification.Source able Energy renewable energy in total costs renewable energy used in Short-term

energy consumption to reduce production and operation

dependence on fossil fuels. processes. Certification of LANPEC's Environmental Protection Management System

The "Dual Carbon" strategy The Company actively develops

drives the low-carbon and deploys energy-saving and

Products transformation of the compa- c o n s u m p t i o n - r e d u c i n g Green Products ny's industry and the company technologies and its main and and Services Increased products have been well Services can launch products more in revenue applied in emerging industries Medium-term

line with the Dual Carbon such as concentrating solar

policy through technological power clean energy and environmental protection and

innovation. emission reduction.The company's active The Company proactively

implementation of sustainable improves its product technolo-

development strategies can gy and management standards

International further enhance its international

has obtained multiple interna-

Increased tional certifications in the

Market reputation meet the sustain- revenue industry and its leading Short-term

ability requirements of interna- products have reached the

Market tional customers and help leading level in domestic and

expand overseas markets. international industries.The "Dual Carbon" transforma- The company actively lays out

tion has driven the expansion

New Energy of the new energy market Increased

the new energy industry

Market boosting the rapid develop- revenue

aiming to optimize and Short-term

ment of the company's main strengthen the new energy

business. equipment industry.The company's adaptability to

Corporate Increased The company has established a

Resilience climate change to better Resilience manage related risks and seize revenue sound climate risk and Short-term

opportunities. Declined cost opportunity management system.Metrics and Targets

At the climate change indicator level due to the Company's business model not involving actual production activities or owner-

ship of manufacturing/processing equipment (such as boilers furnaces turbines or chemical and raw material production equip-

ment) and large-scale greenhouse gas emission facilities the Company's primary Scope 1 emissions originate from fuel combus-

tion in transportation vehicles required for business operations. Therefore the consumption scale of gasoline diesel and other

fuels is directly correlated with the Company's Scope 1 carbon emissions. Accordingly we monitor and report the usage scale of

these fuels including gasoline and diesel. In 2024 the Company invested 4.75 million yuan in environmental protection and all production bases have met the certification

requirements of ISO 14001:2015 and obtained corresponding certificates.Regarding indirect carbon emissions the Company primarily relies on externally purchased electricity and heat (gas) to support

daily operations office activities and power requirements for some new energy vehicles. As a result we monitor and track

purchased electricity and heat to assess and manage the scale of Scope 2 greenhouse gas emissions. Management Structure

The Board of Directors of LANPEC serves as the highest authority responsible for decision-making on ESG matters. It is tasked

2024 Key Performance Indicators (KPIs) with implementing Xi Jinping's thought on ecological civilization and General Secretary Xi's important discourses on carbon

peaking carbon neutrality energy conservation and ecological environmental protection and ensuring the implementation of

major decision-making arrangements of the Central Committee. The Board is also responsible for implementing national and local

government policies and guidelines on energy conservation and ecological environmental protection and fulfilling the energy

conservation and ecological environmental protection work requirements and objectives set by the competent authorities.The Company has established a Safety and Environmental Protection Department which together with the ESG working group

The Company's Scope 1 greenhouse gas emissions amounted to 2705.60 tCO?e. is responsible for implementing national laws regulations policies and standards on energy conservation and ecological environ-mental protection and carrying out various decisions of the Company in the field of energy conservation and ecological environ-

mental protection. It formulates work procedures and management systems for the Company's energy conservation and ecologi-

cal environmental protection and establishes a scientific and standardized organizational management statistical monitoring

The Company's Scope 2 greenhouse gas emissions amounted to 2989.52 tCO?e. and assessment and reward-punishment system for energy conservation and ecological environmental protection. At the same time the Safety and Environmental Protection Department is responsible for cooperating with the local environmental manage-

ment departments in inspections of the company's environmental management work including continuous training and environ-

mental protection publicity.Sustainability Report 25|26

Environmental Risk Management and Training Response Treatment of Three Wastes

The Company has established regulations such as the Management Measures for Environmental Protection Equipment and The Company attaches great importance to environmental management and protection strictly complying with laws and regula-

Facilities (LANPEC [2023] No. 102) and the Hazardous Waste Management System (LANPEC [2023] No. 103). In 2024 based on tions such as the Environmental Protection Law of the People's Republic of China and the Environmental Impact Assessment Law

the Safety/Environmental Management Procedures the company regularly identifies environmental risks applies a multi-factor of the People's Republic of China. It has established a comprehensive environmental management system that has obtained

scoring method for numerical calculations to determine specific risk values and implements hierarchical control. By adopting an relevant certifications. To strengthen environmental governance the Company has developed a series of regulatory documents

environmental management system the Company ensures compliance with environmental regulations and standards strength- including the Environmental Protection Management System (LANPEC [2023] No. 100) the Environmental Protection and Hazard-

ens the maintenance and management of equipment and processes reduces environmental risk sources controls the use and ous Waste Pollution Prevention Management Responsibility System (LANPEC [2023] No. 101) the Management Measures for

storage of hazardous chemicals and conducts regular environmental inspections and monitoring to promptly identify and Environmental Protection Equipment and Facilities (LANPEC [2023] No. 102) and the Hazardous Waste Management System

address environmental issues thereby minimizing the likelihood and impact of environmental incidents. The Emergency Response (LANPEC [2023] No. 103). These documents systematically identify and assess potential environmental impact factors arising

Plan for Sudden Environmental Incidents is periodically revised and filed with the local government's Ecological and Environmental from production and service activities ensuring effective control of environmental risks and continuously reducing the Company's

Bureau. environmental impact.LANPEC Environmental Risk Management Identification and Training Routine Work

Wastewater Treatment

For wastewater discharge management LANPEC strictly complies with relevant laws and regulations and has established the

Environmental Protection Management System (LANPEC [2023] No. 100) at the corporate level to standardize the management of

The Company conducts regular environmental compliant wastewater discharge. The Company’s Shanghai and Lanzhou bases manage wastewater discharge under uniform

hazard inspections to identify potential environ- standards. At the Shanghai base rainwater is discharged into natural water bodies through three outlets while domestic sewage

mental risks in areas such as environmental is treated and then released into the municipal pipeline network via four discharge points. At the Lanzhou base both rainwater and domestic sewage are directed to municipal facilities through their respective outlets. Both bases commission third-party

protection equipment and facilities exhaust gas agencies to conduct regular testing. In 2024 pollutants such as chemical oxygen demand (COD) and ammonia nitrogen were all

treatment wastewater treatment and hazardous discharged within compliance limits.waste disposal. Timely corrective measures are

taken to prevent environmental pollution 2024 Key Performance Indicators (KPIs)

incidents. In accordance with the requirements of

the pollutant discharge permit the Company

organizes regular monitoring of environmental

impact factors to ensure that pollutant emissions

comply with national and local standards.A total of 108044 cubic meters of domestic wastewater was discharged.LANPEC Environmental Management Risk Identification and Emergency Response Drill

On September 27 2024 the Company conducted Waste Gas Treatment

a desktop drill for its emergency response plan for

sudden environmental incidents. The drill scenario For the management of atmospheric pollutant emissions LANPEC strictly complies with relevant laws and regulations and has

involved two employees from the radiography established the Environmental Protection Management System (LANPEC Document No. [2023] 100) at the corporate level to

team accidentally spilling waste developer (fixer) standardize the management of compliant waste gas emissions. The Company's Shanghai and Lanzhou bases have implemented

solution while transporting it to the hazardous multiple waste gas treatment and emission control measures. At the Shanghai base emissions from gas-fired boilers and heat

waste storage facility causing the liquid to flow treatment furnaces are collected and released through elevated exhaust stacks while sandblasting dust and paint spray fumes

onto the road. Another employee promptly noticed are treated before being discharged via high-altitude emissions. The Lanzhou base has completed the upgrade of its heating gas

the spill and uprighted the overturned container boilers with all types of waste gases being collected treated and discharged through elevated stacks. Regular monitoring

(failure to act in time could have allowed large confirmed that pollutant emissions from both bases met compliance standards in 2024.amounts of waste developer (fixer) solution to

enter storm drains potentially contaminating

nearby waterways). Upon receiving the report the 2024 Key Performance Indicators (KPIs)

Company's Work Safety Office immediately

activated the emergency response plan and the

emergency team quickly mobilized to organize

on-site containment measures. Through this

exercise the Company enhanced its emergency

response capabilities in handling unexpected

environmental incidents. In 2024 the Company's nitrogen oxide (NOx) emissions totaled 852.32 kilograms

while sulfur oxide (SOx) emissions amounted to 92.98 kilograms.To encourage employees to consciously address environmental risks and production safety risks the company regularly conducts

environmental protection training programs fostering a deep-rooted awareness of environmental safety and safeguarding the

company's sustainable development.Sustainability Report 27|28

Waste Management Resource Utilization & Energy Conservation

Regarding the solid waste generated during the Company's production and operations LANPEC strictly complies with relevant LANPEC strictly complies with the Energy Conservation Law of the People's Republic of China and other relevant laws and regula-

laws and regulations by establishing policies such as the Environmental Protection Management System (LANPEC [2023] No. 100) tions as well as industry standards such as ISO 50001 continuously optimizing the company's energy and material management.and the Hazardous Waste Management System (LANPEC [2023] No. 103). During the reporting period the Company entrusted At the corporate level LANPEC has established regulations including the Energy-Saving and Consumption Reduction Manage-

qualified third-party units to properly dispose of all general industrial solid waste and hazardous waste. After evaluation their ment Measures. The Company primarily uses electricity natural gas and water—all of which are clean energy sources—and its

inputs activities and outputs neither caused nor potentially led to any significant environmental or social impacts. main products consist of high-tech petrochemical equipment aligning with green development requirements in terms of both

energy structure and industrial structure. In 2022 LANPEC was recognized as a National-Level "Green Factory."

LANPEC Solid Waste Management Practices

Regulatory Hazardous Waste Management System (LANPEC [2023] No. 103) and other policy

Documents regulations

Main Non-Hazardous Waste: Scrap metal waste wood packaging materials dust

Categories welding slag etc. LANPEC Awarded National "Green Factory"

Water Resource Management

Non-Hazardous Waste: The Company implements categorized collection and

Disposal storage in designated general solid waste storage facilities with periodic disposal The Company's water supply is entirely sourced from municipal systems and domestic sewage is discharged into municipal

Methods conducted by licensed treatment providers. pipelines. The Company has established the Energy Conservation and Emission Reduction Management System under which

facilities such as water supply systems fire water pipelines tap water pipes faucets and heating pipelines are subject to regular

inspection and maintenance to prevent any leakage (e.g. dripping seepage or overflow). In case of damage or leakage in

pipelines faucets or other facilities prompt repairs shall be carried out to eliminate "permanent running water" waste. Meanwhile

the water levels of fire reservoirs and pressure test reservoirs are prioritized for inspection to prevent waste caused by direct

overflow due to excessively high water levels or malfunctioning water level control valves. Delayed-action valves in washbasins

are also regularly checked and those with excessively long delay times or inadequate resetting are replaced or repaired in a timely

manner.

2024 Key Performance Indicators (KPIs) 2024 Key Performance Indicators (KPIs)

Hazardous Waste: 70.34 metric tons

Non-Hazardous Waste: 1084.62 Total Water Consumption: 127786 tonnes metric tonsSustainability Report 29|30

Energy Management & Green Operations Biodiversity Conservation

Lanpec Technologies strictly complies with the Energy Conservation Law of the People's Republic of China and other relevant laws

and regulations as well as industry standards such as ISO 50001. We continuously optimize the company's energy and material LANPEC continuously monitors the impact of its activities on biodiversity and recognizes the significance of water area cleaning

management by establishing corporate-level regulations including the Energy Conservation and Emissions Reduction Manage- and greening maintenance in influencing the ecological environment. Therefore in compliance with relevant laws regulations

ment System and the Energy Conservation and Emissions Reduction Responsibility System. and policies such as the Opinions of the General Office of the State Council on Further Strengthening Biodiversity Conservation Soil

Pollution Prevention and Control Law of the People's Republic of China and Groundwater Management Regulations issued by the

State Council the Company carries out tasks including opportunity factor identification and business quality risk screening.Energy Efficiency & Renewable Energy Adoption

Specifically the Company's production and operations align with national and local industrial policies. Its sites are located in

·Corporate photovoltaic projects are being gradually put into operation replacing part of industrial electricity consump- reserved industrial zones designated by the local government and the projects generally meet the requirements of clean produc-

tion with solar power. tion. Through the implementation of targeted environmental protection measures the Company ensures that pollutants are

·Intelligent lighting systems have been installed in offices production sites and residential areas. discharged up to standards with minimal environmental impact from production-related emissions that do not alter the environ-

·Priority is given to purchasing nationally certified energy-saving equipment or products with preference for environ- mental quality grade. By adopting strict environmental risk prevention measures environmental risks are kept under control and

mentally friendly and energy-efficient electrical appliances and devices. their impact levels are deemed acceptable. The public generally supports the projects and the environmental management and

·All departments have configured computers printers copiers and other office equipment to automatically enter monitoring plans are practical and feasible in line with the actual conditions of the projects.low-power sleep mode when not in use.·Employees are encouraged to reduce daily air conditioning usage by 1 hour with minimum temperature limits set.Office Supplies Conservation & Low-Carbon Initiatives

·Promote paperless office initiatives to reduce paper consumption.·Use printers/copiers rationally by following the "on-demand reasonable and economical" principle. Always print/copy

one page or one copy for verification before proceeding with full document printing/copying.·For maintenance materials relevant departments shall prepare detailed budgets and material plans by category to

control and reduce material consumption.·Implement an old-for-new replacement system for parts used in maintenance activities. Reusable components should

be recycled whenever possible.·Relevant departments shall enhance production equipment upgrades and process optimization to reduce raw material

consumption.Circular Economy

The Company has formulated the Energy Conservation Management Measures for Production System Management Measures for

Raw Materials and Low-Value Consumables in Production Department and Management Measures for Recycling and Utilization of

Scrap Materials. We continue to deepen our commitment to the circular economy. In product development design and/or formu-

lation of production processes we advocate the use of new products processes materials and technologies that are easy to

recycle dispose of or degrade in the environment and prioritize energy-efficient/economical production technologies and

processes to reduce the generation and emission of industrial waste.

2024 Key Performance Indicators (KPIs)

Total Waste Recycled and Reused: 899.22 TonsSustainability Report 31|32

Technological Innovation

Talent Recruitment & Incentive

and Product Services LANPEC attaches great importance to talent recruitment and motivation expanding its pool of capable professionals through a

refined recruitment system and stimulating employee vitality by establishing a diversified incentive mechanism thus providing a

Commitment to Sustainable Development Goals (SDGs) solid talent foundation for the Company's development. The Company has introduced the Measures for Awarding Scientific and

Technological Innovation Work (Trial) which grants commendations and financial rewards to employees who achieve national or

provincial-level scientific and technological achievements obtain national patents publish papers or works and those who make

outstanding contributions to the company's scientific research new product development and promotion. These material incen-

tives encourage employees to actively innovate.Adhering to a performance-oriented approach the Company has established an evaluation and incentive mechanism. For key and

critical positions competitive recruitment is adopted to fully ignite employees' enthusiasm for entrepreneurship. This allows

employees to gain promotion opportunities based on their capabilities and performance achieving the integration of personal

value and corporate development.In the development of LANPEC product responsibility and innovation are of paramount importance. The Company strictly 2024 Key Performance Indicators (KPIs)

controls quality having obtained multiple professional certifications to ensure product safety and reliability safeguarding custom-

er interests and upholding corporate reputation. Regarding innovation LANPEC continuously invests in R&D and possesses

numerous patented technologies. The Company actively participates in industry standard-setting and consistently introduces

new products that meet market demands. Driven by this dual focus on product responsibility and innovation we has enhanced

its competitiveness achieving steady growth in the petroleum petrochemical and new energy sectors. This approach also 370

provides strong support for reaching sustainable development goals. Total Technical Personnel

Technological Innovation

Innovation Ecosystem 34 160 3 97Professor-Level Senior Engineers PhD Holders Master's Degree

Senior Engineers Holders

LANPEC insists on taking technology as the core driving force leading the Company's development continuously investing

resources in the research and development of new technologies and products and is committed to maintaining a leading techno-

logical position in fields such as petroleum and petrochemicals and new energy to meet the continuous upgrading needs of the 3 State Council Special Allowance Recipients2 Gansu Provincial Leading Talents

industry. 3 Gansu Longyuan Youth Elites

The Company has established multiple professional research departments which form the main body of technological innovation.It possesses 2 national-level quality inspection centers and 10 R&D platforms at or above the provincial and ministerial levels

including a post-doctoral research workstation and a Shanghai expert workstation platform. We have formulated a series of

complete scientific research management systems such as the Measures for the Management of Scientific and Technological Work

(Trial) Measures for the Management of Scientific and Technological Development Fund Projects Measures for the Evaluation of Industry-Academia-Research Collaboration

Scientific and Technological Achievements (Trial) and Measures for the Work of the Technical Committee (Trial). These systems

cover multiple aspects including scientific research project management fund management achievement management and The Company has successively established long-term cooperative relationships with multiple domestic scientific research institu-

intellectual property protection standardizing scientific research management improving the efficiency of scientific and techno- tions universities and large enterprises in the areas of scientific research talent development and application of new technolo-

logical management and work efficiency and ensuring the orderly development of R&D work. gies and products. In recent years through participating in international academic conferences technical exchanges with

Corporate R&D Achievements & Market Recognition overseas companies and technology introduction/output the Company has learned and mastered the latest relevant foreign technologies and technological development trends. It has strengthened communication with business-related departments and

industry technical associations to keep abreast of industry technological developments and trends and enhanced technical

exchanges with international standardization organizations to participate in the formulation and revision of relevant international

National Oil & Gas Drilling Production Refining and

Petrochemical Equipment Quality Inspection and Testing Center professional technical standards.Postdoctoral Research Workstation

National Heat Exchanger Product Quality

Inspection and Testing Center CNOOC Young and Middle-Aged Cadres Training Delegation Visits Lanpec Tech for Research Exchange

National-Level Quality Inspection Center National-Level Scientific Research Platform

Shanghai Petrochemical Heat Exchange Focusing on accelerating the research on new quality

Equipment Engineering Technology Research Center

Shanghai Expert Workstation Lanzhou Heat Transfer & Energy Conservation productivity in marine energy on December 1 Mr. Wang

Engineering Technology Research Center Yu General Manager of the Production Department at

Mechanical Industry Heat Transfer & Energy CNOOC Tianjin Branch led a delegation from the CNOOC

Conservation Engineering Technology Research Center

Provincial/Ministrial-Level Scientific Provincial/Ministrial-Level Engineering 2024 Mid-Career Leadership Training Program to our

Research Platform Technology Research Center company for a research exchange. Mr. Zhang Shangwen

Member of the Company’s Party Committee and Deputy

Gansu Provincial Enterprise Technology Center

General Manager received the delegation and hosted

Gansu Provincial Industrial Design Center

Shanghai Municipal Enterprise Technology Center discussions.Shanghai Design Innovation Center

Gansu Provincial Industry Technology Center

Provincial/Ministrial-Level Provincial/Ministrial-Level

Technology Innovation Center Design Innovation CenterSustainability Report 33|34

Leading Industry Standards · Driving Collaborative Growth Advance National Key Projects and Technological Innovation

With its profound technical accumulation and rich industry experience the Company has deeply participated in major domestic

2024 Annual Conference of the Heat Exchangers Sub projects continuously increased investment in technological innovation and achieved fruitful results.

Committee of China Standardization Committee on China's First Demonstration Project of Molten Salt Heat Storage Coupled with a Million-Kilowatt Unit

Boilers and Pressure Vessels (SAC/TC262/SCS) Held in

In 2024 the first national demonstration project of molten-salt heat-storage-

Shanghai on December 2024. LANPEC served as the

coupled million-kilowatt unit and four-machine-coordinated steam-water-

official host of this prestigious industry event which electric-controlled frequency-modulation and peak-shaving which was

brought together numerous distinguished experts to undertaken by LANPEC (Shanghai) was successfully put into operation. This

advance the development of the heat exchange technolo- project is of great significance. In this project the energy-storage scale of the

gy sector. cold and hot molten-salt storage tanks constructed by LANPEC (Shanghai)

reaches 120 MWh. The successful commissioning of this project has set a model

for the flexibility transformation of domestic thermal power plants and it has

important demonstration value for promoting the technical development and

application of domestic thermal power plants in energy-storage peak-shaving

high-efficiency heat supply and other aspects. It also helps to improve the

Intellectual Property Protection stability of the domestic power system and the energy-utilization efficiency.LANPEC strictly complies with intellectual property-related laws and regulations such as the Civil Code Trademark Law Patent

Law and Copyright Law safeguarding its competitive advantages and brand reputation through a sound intellectual property

management system while avoiding infringement of others' intellectual property rights. The Company has formulated documents Bozhong 19 - 6 Binzhou Condensate Gas Field CO? Recycling Project

including the Intellectual Property Protection Management Measures Intellectual Property Protection Measures and Letter of In the Binzhou Natural Gas Terminal Project undertaken by LANPEC the

Guarantee for Intellectual Property Protection implementing full-process standardized management for the creation manage-

ment utilization and protection of the company's intellectual property rights and further improving the intellectual property designed natural gas treatment capacity in the first stage is 3.8 million cubic

management of company projects and the life cycle management of patent applications. meters per day. In this project the activated MDEA amine-based absorption-re-

generation method is adopted to remove acid from natural gas. The CO?

LANPEC Intellectual Property Protection Initiatives removed by the acid-removal unit enters the recycling unit. This unit uses the

production process of desulfurization dehydrocarbonization dehydration and

To enhance employees' awareness of intellectual property protection a team of purification to treat the regenerated acid gas. It is expected that qualified food

Organizational Exchanges instructors composed of internal senior professionals and external experts has

and Training -grade liquid CO? and solid dry ice can be produced by recycling CO? every year designed training courses on patent drafting patent protection intellectual

property management etc. tailored to different groups. with a production capacity of up to 260000 tons. LANPEC is responsible for

supplying various equipment such as towers vessels and heat exchangers as

We attach great importance to intellectual property management strictly comply well as the adsorption agents in the towers for the CO? recycling unit of this

with relevant laws and regulations and continuously improve the intellectual

Improve Institutional Processes property management system. Employees are required to sign the Integrity project.Behavior and Intellectual Property Agreement.LANPEC has carried out online and offline training and learning on intellectual

property (IP) - related knowledge for key personnel and relevant staff of the EPC Project of Molten Salt Storage Tank for Huidong New Energy

Pay Attention to company. This aims to enhance the IP protection awareness of management and Photovoltaic + Solar Thermal Hybrid Power Station in Akesai County

Information Confidentiality relevant employees and strengthen the awareness of patent application and

infringement prevention among relevant personnel in the R&D and production In August 2024 the cold and hot molten salt tanks in the EPC project of

processes. molten salt storage tanks for the Huidong New Energy 640MW photovoltaic +

110MW solar thermal hybrid power station (referred to as the Akesai Project)

undertaken by LANPEC (Shanghai) a subsidiary of LANPEC completed

2024 Key Performance Indicators (KPIs) preheating and successfully received salt.The Akesai Project is of great significance. As one of the first batch of "solar

thermal + photovoltaic" pilot projects on desert Gobi and wasteland founda-

tions in China it is also a major provincial project in Gansu Province. In this

project the high-temperature molten salt storage tanks undertaken by Lanpec

Technologies serve as the core equipment of the energy storage system for the

solar thermal power station. As large-scale high-temperature fatigue

The Company holds equipment with extremely harsh operating conditions these tanks are extreme-

334 ly difficult to design and construct and their safety and reliability play a decisive a total of patents role in the safe and stable operation of the entire heat storage system.

The advancement of this project not only helps explore the "solar thermal

79 + photovoltaic" development model in desert Gobi and wasteland areas including invention patents. providing valuable experience for the application of new energy under complex

geological conditions but also promotes the development of the new energy

industry in Gansu Province assists in optimizing and upgrading the local energy

structure and is of great significance for achieving the national energy transfor-

mation and sustainable development strategy.Sustainability Report 35|36

National Demonstration Power Station of Advanced Compressed Air Energy Storage in Feicheng Shandong Focus on Serving Product Quality

In April 2024 the National Demonstration Power Station of Advanced

Compressed Air Energy Storage (300MW/1800MWh) in Feicheng Shandong The Company upholds the quality policy of "Technological Leadership Excellent Quality People-Oriented Approach Social

for which LANPEC participated in the design successfully achieved its first grid Contribution Compliance with Laws and Regulations and Continuous Improvement" integrating quality enhancement through-

connection. As the world's largest new-type compressed air energy storage out the entire process of product research and development production and service. Guided by the needs of industries such as

power station all 8 spherical storage tanks with a volume of 8000 m3 in its petroleum and petrochemicals and new energy it is committed to providing customers with high-quality specialized equipment

thermal storage system were developed and designed by the Company. and services striving to establish an excellent quality reputation within the industry.Compared with conventional spherical storage tanks the spherical tanks in this The Company strictly adheres to domestic and international product quality and safety policies and standards such as the

project feature large volume high design temperature frequent load changes Product Quality Law of the People's Republic of China and the Standardization Law of the People's Republic of China. It formulates

and complex operating conditions making them the largest fatigue containers and implements systems such as the Quality Assurance Manual implements the main responsibility for quality and safety and

for thermal storage in China. improves the quality assessment mechanism.In the energy sector as the world's largest new-type compressed air energy storage power station it provides a demonstration model

for the development of large-scale energy storage technologies helps improve energy storage and utilization efficiency and promotes Quality Management System

the optimization of the energy structure and the development of sustainable energy. Its successful grid connection marks a major

breakthrough in the application of new-type compressed air energy storage technologies in China and is of great significance for

alleviating energy supply-demand contradictions and ensuring stable energy supply. In accordance with the provisions of the Special Equipment

Safety Law of the People's Republic of China the Regula-

tions on Safety Supervision of Special Equipment the Rules

Comprehensive Breakthroughs in Overseas Services for Licensing of Special Equipment Production and Filling

Units (including Amendment No. 1 and No. 2) (TSG

Facing the overseas market the Company adheres to high-quality development driven by new technologies. Relying on the brand 07-2019) and corresponding laws regulations and

advantages and technical reserves of its overseas business it continues to achieve breakthroughs in new business implementa- standards a quality assurance system for pressure vessel

tion globally. product manufacturing has been established in combina-

tion with the Company's characteristics.South Africa Redstone CSP Project

In 2024 during the South Africa Redstone CSP Project LANPEC (Shanghai) The Manufacturing Department and Quality Management Department of the Company are responsible for product quality

successfully completed the hydrostatic test for the hot molten salt tank with the working collaboratively to conduct strict inspections. During the production process multiple departments work in coordination

liquid level inside the tank reaching the maximum hydrostatic level of 13.25 to strictly control quality implementing rigorous management of in-plant product quality and actively responding to externally

meters. The tank is primarily constructed from A240Gr347H material with the feedbacked quality issues. In 2024 the Company's quality objectives were organized and formulated by the Quality Assurance

maximum wall thickness reaching 58 mm. During project implementation Engineer and quantified as follows: the compliance rate with laws regulations standards and user technical agreements shall be

leaders at all levels from LANPEC (Shanghai) and Shandong Electric Power 100%; customer satisfaction shall reach over 95%; the certification rate for welders and non-destructive testing personnel shall be

Construction Third Engineering Company actively collaborated proactively 100%; the qualification rate for materials and spare parts used in products shall be 100%; the first-time qualification rate for each

adopted advanced quality management methods from Europe and America manufacturing process shall be over 90%; and the qualification rate for ex-factory products shall reach 100%.and combined past construction experience with advanced quality control

techniques to overcome multiple challenges and ensure the smooth progress of

molten salt tank construction. This effort earned high recognition from all LANPEC Service Quality Control Measures

participating units including the owner ACWA (investor) SEPCOⅢ (general

contractor) and EMYPRO (design institute) in terms of construction quality The quality objectives are decomposed by the Quality Assurance Engineer and

safety and schedule. implemented into each quality control system relevant departments and respon-

Quality Assurance Engineer

The success of this project holds significant meaning: on one hand it demonstrates the strong construction capabilities and technical sible personnel in accordance with the following requirements with regular

expertise of Shanghai Lanbin and its partners; on the other hand it provides valuable experience for the construction of subsequent assessments conducted.similar CSP projects promotes technological development and project practices in the global CSP industry and serves as a positive

demonstration for advancing the diversified development of the energy sector.Manufacturing Department Be responsible for arranging human and material resources to provide timely

service to users.Large Plate - Shell Heat Exchanger for Kazakhstan Refinery

Process Room and Quality The manufacturing and acceptance of products shall be completely controlled in

Management Department accordance with the corresponding laws regulations and standards.In 2024 the large plate-shell heat exchanger designed and manufactured by

LANPEC (Shanghai) for a Kazakhstan refinery was successfully shipped. This Be responsible for arranging certified personnel to take up their posts for opera-

Manufacturing Department tion; strictly control the material procurement process to ensure the physical

marks another overseas expansion of the Company's high-efficiency heat quality of products; and strictly control the product manufacturing process.exchanger equipment manufacturing technology and opens a new chapter for

high-efficiency heat exchanger equipment manufacturing. Conduct strict inspections to ensure that the first-time qualification rate of each

Quality Management manufacturing process for products exceeds 90% and the qualification rate of

Department ex-factory products reaches 100%.Sustainability Report 37|38

Quality Risk Management

For product quality risk management of the Company we mainly focus on material quality risks manufacturing process risks and

personnel operation risks.In 2024 the Company primarily centered on system construction. For raw material procurement management a list of qualified

suppliers was established with priority given to suppliers with good industry reputation and stable quality. Material quality

standards and acceptance requirements are clearly specified in procurement contracts. Upon delivery the quality inspection

department conducts inspections in accordance with the standards. Unqualified materials are strictly returned and suppliers are

warned or removed from the list.For process management detailed process operation procedures have been formulated covering operation steps process

parameters quality control key points etc. for each production process. Before production technical personnel conduct process

disclosure to operators. During production process personnel conduct regular inspections to ensure that processes are imple-

mented in place. For new processes and technologies small-batch trial production is carried out first and formal application is

made only after verification of feasibility.For personnel training and management the Company has formulated an annual training plan including training content such as

theoretical knowledge operational skills and safety regulations. When new employees join they undergo job skill training and

assessment and can only take up their posts after passing the assessment. Existing employees receive regular refresher training

to improve their skill levels. A quality reward and punishment system has been established to reward employees with excellent

quality performance and punish those who operate in violation of regulations and cause quality problems.Company Quality Risk Management Meeting

The Company implements a strict "quality regular meeting" system every month conducting quality analysis across multiple links

including material procurement design production inspection and after-sales service proposing preventive measures to reduce the

occurrence of non-conforming products. Participants cover quality assurance engineers quality management system personnel R&D

designers production management personnel and all section chiefs.Handling of Products and

Nonconforming Items

The Company adheres to standardized management continu-

ous improvement people-oriented principles and green

development striving to become a world-class clean energy

service provider. For products that do not meet standards we

prioritize identification and record-keeping. From raw material

input to finished product delivery each link is assigned a

unique identifier with detailed records of various data during

the production process including raw material batches

processing equipment operators and inspection data.On the other hand we strengthen the traceability process.Upon discovering non-conforming products the traceability

procedure is immediately activated. Production records are

queried based on product identifiers to determine information

such as raw material sources processing procedures and

operators and analyze the causes of non-conformity. If

multiple batches of products are involved the traceability

scope is expanded and relevant departments are notified to

take measures such as recall isolation and re-inspection.Sustainability Report 39|40

Customer Service Guided by the customer service philosophy of "Technological Innovation for National Brands Quality to Earn Chinese Credibility" the Company conducts targeted internal training programs annually for its full-chain management processes. By strengthening

internal capabilities and promoting collective improvement it aims to build a high-standard team and continuously enhance

customer service levels. In 2024 more than 10 training sessions were held with 120 participants and a total training duration of

40 hours. These initiatives improved employees' sensitivity to customer needs enhanced their rapid response capabilities in

problem-solving and reinforced compliance awareness to avoid non-compliant behaviors during service delivery.LANPEC’s customer service system covers all key aspects of customer

service. Through high-quality products efficient services professional Company Customer Service Training

technical support and a sound communication mechanism it compre-

hensively meets customer needs enhances customer satisfaction and

loyalty and has established a good corporate image.Customer Service System

LANPEC deeply recognizes that listening to customer feedback is crucial for continuously improving the customer service experi-

ence. Especially considering the Company's international business layout it actively adopts and values every piece of feedback

from customers regarding it as a valuable resource for service optimization and innovative development.The Company has established a sound after-sales service management procedure and an after-sales service procedure within its

quality assurance system. The technical personnel dispatched for after-sales service are all relevant personnel of the quality

assurance system and the service personnel dispatched all hold relevant qualification certificates for special equipment opera-

tion. The Company's after-sales service-related procedural documents are established in strict accordance with the requirements

of TSG21-2016 Safety Technical Supervision Regulations for Stationary Pressure Vessels and TSG21-2019 Rules for Licensing of

Special Equipment Production and Filling Units in terms of service processes and resource configuration.LANPEC’s Customer

Service Process

1234

After product delivery Upon receiving service If a solution is required for After handling equipment

business personnel information feedback from equipment quality issues quality issues the depart-

continuously communicate users business personnel the after-sales service ment/unit responsible for

with users to ensure timely shall notify the after-sales office shall organize after-sales service shall

and effective after-sales service office which is relevant departments dispatch personnel to fill in

service or technical support responsible for organizing experts and technical personnel to analyze the after-sales service records Product Sales Emergency Feedback Plan

can be provided at the first relevant technical personnel causes and propose as required and provide The Company has established a dedicated emergency response team to ensure rapid and efficient reactions to various sudden

time. to respond. Routine issues solutions. The solutions relevant service materials incidents in product sales. The team leader is appointed by senior company leadership with members comprising professionals

shall be feedback within 8 shall be prepared by the to the after-sales service from key departments such as quality business technology and legal affairs. When abnormal events occur in product sales such

hours and issues affecting relevant responsible office after customer as customer complaints about product quality defects or sudden product failures during normal use frontline sales personnel

user safety or production departments and imple- evaluation. The after-sales must truthfully report the information to the emergency response team at the fastest speed upon acquisition. Upon receiving the

shall be responded mented or sent externally service office shall be report the emergency team immediately convenes an urgent meeting quickly activates the corresponding emergency response

immediately. only after being reviewed responsible for filing and level based on pre-set scientific classification criteria ensures resource allocation matches the severity of the issue and lays a

by the technical director preserving technical foundation for subsequent proper handling.and approved by the documents handling

quality assurance engineer methods solutions and For customer complaints the Company promptly dispatches technical and quality personnel to the site to understand the in accordance with the

processing results. problem and conduct cause analysis. If the issue is indeed a product quality problem the company will negotiate solutions with company's design or customers in accordance with contract terms and relevant laws and regulations such as repair replacement or compensation. At

manufacturing quality the same time recall procedures will be initiated for the problematic products to prevent the issue from escalating. If the incident

assurance system require- attracts media attention or public questioning the Company will timely release authoritative information address societal

ments. concerns and avoid causing negative impacts.Sustainability Report 41|42

Partnerships and

Supplier Full Lifecycle Management

Social Responsibility The Company continuously focuses on suppliers' sustainable development and ESG governance. It gradually introduces manage-

ment requirements such as environmental protection social responsibility and business ethics throughout the full lifecycle of

Commitment to Sustainable Development Goals (SDGs) supplier management and conducts regular evaluations to ensure suppliers' continuous compliance and risk prevention and

control.The Company prioritizes selecting suppliers from the existing supplier list based on

requirements and technical specifications. If unsuitable suppliers are sourced from the

Supplier Selection market subject to preliminary screening. In-depth evaluations are conducted after

qualified document reviews.Suppliers must inspect the products they provide and furnish qualified reports or certifica-

Supplier Product tions. Prior notice is required for any changes; detailed information must be submitted for

Quality Management name changes. Suppliers with long-term non-delivery or quality anomalies will undergo

re-evaluation or may have their qualifications revoked.LANPEC attaches great importance to communication and management with its supply chain and community. A stable and

sustainable supply chain is crucial for ensuring product quality and stable delivery directly impacting the Company's competitive- Dynamic management is implemented with evaluations conducted at the end of each year

ness. The community provides the foundation for the Company's development and long-term growth can only be achieved Supplier Assessment or when new qualified suppliers are added. Sub-subsidiaries organize the evaluations and

through harmonious coexistence. We actively practice responsible supply chain management strictly screens suppliers to ensure and Re-evaluation revise the list of qualified suppliers based on comprehensive assessment results such as

raw materials are environmentally friendly and compliant and works together with them to promote industrial upgrading. In the supplier audit reports.community we carry out science popularization activities to share cutting-edge knowledge of energy utilization and organize

volunteer support to bring warmth to disadvantaged groups. Through these efforts the Company consolidates its development

foundation and achieves win-win cooperation with all parties.Supplier Dynamic Suppliers are periodically graded according to performance evaluation results and

Grading and Management dynamic management is applied accordingly to reward excellence eliminate inferiority

Responsible Supply Chain and drive suppliers to continuously improve product and service quality.The Company is committed to building a sustainable supply chain. While ensuring procurement needs are met and agreements

are fulfilled in a timely manner it actively promotes suppliers to enhance their sustainable development capabilities. We imple-

ment full-process management covering supplier admission procurement evaluation and empowerment and purposefully The Company gives priority to collaborating with suppliers rated at Level A. For Level B suppliers (good suppliers) the Company

incorporate considerations of suppliers' ESG risks. will maintain normal procurement relationships and encourage them to continue improving their performance. For Level C suppli-

ers (qualified suppliers) the Company will adopt stricter measures such as reducing procurement volume or suspending procure-

ment to urge them to make necessary improvements. For Level D suppliers (unqualified suppliers) the Company will consider

Supply Chain Governance Framework eliminating them or requiring them to rectify and undergo re-evaluation so as to ensure that the overall performance of the

supplier group meets the company's requirements in terms of product quality sustainable development and other aspects.The Company has developed a Quality Assurance Manual and periodically revises and improves it. Strict procedures for material

requisition procurement inspection and warehousing have been established along with cross-departmental procurement

coordination mechanisms to clarify the responsibilities and collaborative relationships of demand departments procurement

departments quality inspection departments warehousing departments financial departments etc. in the procurement process. Supplier Level Score Range Measures

The Company conducts full-process supervision of procurement activities to ensure compliance and fairness; it regularly performs

internal audits of procurement activities to examine the implementation of procurement processes control of procurement costs

supplier management etc. and promptly rectifies any issues identified. The procurement department has established a monthly Priority in procurement increase monthly A 90-100

quotation mechanism for major material suppliers where suppliers submit quotations in writing each month and the company procurement volume allocation

seeks optimal procurement channels through inquiry and price comparison.B 80-89 Good suppliers normal procurement allowed

Supply Chain Risk Identification and Assessment

Qualified suppliers requiring improvement;

The significance of the Company monitoring and managing supply chain risks lies in ensuring business continuity compliance and C 60-79 reduce procurement volume or suspend procurement

reputation while promoting sustainable development. The Company's philosophy is to identify and assess potential risks through

comprehensive supply chain risk management adopt effective preventive and responsive measures so as to enhance the Unqualified suppliers; subject to elimination

resilience and responsiveness of the supply chain ensure the quality of products and services protect the environment and D 59 and below

or re-evaluation after rectification

human rights and maintain the Company's business ethics and governance standards.Sustainability Report 43|44

Supply Chain ESG Responsibilities Social Welfare & Rural Revitalization

We align with international labor standards such as the UN Guiding Principles on Business and Human Rights the OECD Guidelines

for Multinational Enterprises and the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy The Company's philosophy in social welfare and volunteer service is to actively give back to society and contribute love dedicating

(MNE Declaration) as well as standards like SA8000 China’s Environmental Protection Law and the national “Dual Carbon” Strate-

gy. In our business practices we adhere to green procurement principles prioritizing suppliers with robust EHS (Environmental itself to social welfare undertakings and charity and interpreting the corporate social responsibility with practical actions.Health and Safety) management systems. Additionally suppliers demonstrating exceptional ESG (Environmental Social and

Governance) performance will receive preferential treatment in our supplier/partner evaluation system enjoying priority collabo-

ration under equivalent conditions.Environmental Supply Chain Public Welfare and Charity

Protection Management Labor Rights Business Ethics

Through active fulfillment of corporate social responsibility and participation in social services and charitable activities the

Environmental Supplier Environmental Child Labor Anti-Corruption Company gives back to society with practical actions promotes sustainable community development and achieves harmonious

Regulatory Compliance Management and Forced Labor and Anti-Bribery progress between the enterprise and society.Waste Management

and Circular Economy Health and Safety 2024 Key Performance Indicators (KPIs)

Supplier Social

Responsibility Management Information Confidentiality

Energy Consumption Freedom of Association

and Climate Change and Collective Bargaining Donated 150000 yuan to Lvxiang Town Jinshan District Shanghai.This initiative leverages the role of charitable organizations in poverty alleviation

improving people's livelihoods promoting traditional Chinese virtues and socialist core values

further ensuring the basic living needs of vulnerable workers and residents during the Spring Festival.Equal Employment Fair CompetitionHazardous Chemicals Supplier Business Ethics

Management and Anti-Discrimination

Paid 200000 yuan in poverty alleviation funds to Huaiyin County Henan Province

a designated poverty alleviation site of Sinomach Group for local infrastructure construction.Conflict Minerals

The Company currently does not use 3TG mineral resources in its production processes. Meanwhile the Company adheres to

responsible procurement committing not to use mineral resources from conflict-affected areas and explicitly requiring suppliers

to refrain from using mineral resources from conflict-affected areas or in violation of the company's policies.The Company commits to complying with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Employee Sponsorship of Single-Parent Left-Behind Children at Lantian Primary School in Wangchangsi Village

Conflict-Affected and High-Risk Areas published by the Organization for Economic Co-operation and Development (OECD) as well

as the regulations on the management of tungsten tin tantalum and gold minerals in conflict-affected areas under the Wangchangsi Village located in a remote mountainous area with underdeveloped economic conditions is LANPEC's designated

Dodd-Frank Wall Street Reform and Consumer Protection Act. poverty-alleviation partner. Many local families face significant livelihood challenges. As the village's sole educational institution

Industry Collaboration Lantian Primary School bears the critical mission of nurturing the next generation. However children from single-parent or left-be-

hind families due to financial hardships face heightened dropout risks.Upholding the philosophy of industry-wide progress the Company is committed to building win-win partnerships with collabora-

tors suppliers and customers. By sharing resources technologies and market insights it aims to drive innovation and advance- Upon learning this situation our two employees proactively contacted the Company's labor union to understand the sponsorship

ment across the entire industry achieving mutual growth and sustainable development. procedures and requirements then took immediate action. Every year they timely remit 2400 yuan in student grants to the school's

designated account ensuring the funds are promptly and accurately allocated to the children in need.Supplier Communication For the sponsored children these grants not only alleviate their financial burdens but also make them feel the care and warmth from

The Company periodically organizes supplier exchange activities to promote friendly and equal development between both society. With this support the children can focus more on their studies continuously enhancing their knowledge and skills to lay a

parties through face-to-face communication. solid foundation for their future growth and development.Equal Treatment of SMEs As a central state-owned enterprise LANPEC demonstrates corporate responsibility by proactively fulfilling its social duties and support-

In 2024 the Company strictly abided by the contractual terms with small and medium-sized enterprises (SMEs) ensuring that all ing education in remote areas. The company will strengthen cooperation and exchanges with governments schools and other social

payable amounts in line with the contract were paid on time with no overdue payment incidents occurring. We will continue to sectors to jointly explore more innovative and effective funding models injecting greater vitality and momentum into educational

maintain good cooperative relationships with SMEs in the future uphold financial responsibilities and implement robust asset undertakings in remote regions.management to ensure equal treatment of all partners.Sustainability Report 45|46

Volunteer Service Rural Revitalization

The Company promotes the volunteer service philosophy of "Serving Society and Delivering Love" encouraging employees to The Company has been actively engaged in rural revitalization contributing to the development of rural economies and the

actively participate in various public welfare activities and demonstrate the enterprise's social responsibility through practical upgrading of agricultural industries through innovative consumption-based assistance measures. These initiatives have effectively

actions. Through volunteer services the Company aims to cultivate employees' social awareness and dedication spirit while bridged corporate resources with rural needs achieving an organic integration of corporate social responsibility and the national

bringing positive impacts to the community and promoting harmonious social development. rural revitalization strategy.Love in the Sunshine Planting Youth — LANPEC Young Volunteers in Action

March 12 2024 – The Company's Youth League Committee in collaboration with Lüxiang Town Youth League Committee and Lüxiang

In Wangchangsi Village which is under LANPEC's targeted assistance located in a remote mountainous area the village sanitation

Town Disabled Persons' Federation organized a volunteer activity titled "Love in the Sunshine Planting Youth." Seventeen young

workers could only rely on traditional hand carts for daily cleaning. This was not only inefficient but also failed to meet the cleaning

volunteers from the Company sowed love in the sunlight and planted hope with their youth.standards in the vast and complex rural environment. Sanitation workers often had to work hard under the scorching sun or in wind and

rain not only consuming a lot of physical strength but also struggling to ensure the timeliness and comprehensiveness of their work.During the event the young volunteers partnered with members of the "Sunshine Home" to complete succulent potted plant arrange-

ments. They also teamed up to participate in fun interactive games such as bean bag toss traditional Chinese arrow pitching and

Upon learning about the situation LANPEC immediately purchased five electric sanitation vehicles and donated them to each village in

"Hands in a Frenzy". Through these youthful actions they embodied the spirit of volunteerism bringing the warmth and brightness of

need including Wangchangsi Village. This initiative is not only a direct support for rural environmental hygiene but also a deep concern

spring to the "Sunshine Home" members. Their efforts encouraged these individuals to embrace self-reliance build confidence and

for the hard work of sanitation workers. At present the electric sanitation vehicles are playing an important role in improving the

cherish life.efficiency of sanitation work reducing operating costs promoting environmental protection and energy conservation and enhancing

the image of rural areas.In the future LANPEC will continue to help improve rural environmental hygiene conditions so that every sanitation worker can find

happiness and a sense of achievement in their work and jointly contribute to building a beautiful and livable rural environment.Rural Consumption Assistance

LANPEC responded to the call of Sinomach Group by organizing consumer poverty alleviation with a consumption assistance expendi-

ture of 91300 yuan used to purchase agricultural and sideline products in Pinglu County Shanxi Province and Heshui County Gansu

Province. By directly purchasing and consuming agricultural products the company helped address the problem of unsalable agricultur-

al products.Rural Cooperative Base/Infrastructure Construction

A poverty alleviation fund of 100000 yuan was paid to Gucheng Town Heshui County Qingyang City Gansu Province - the Company's

designated poverty alleviation site - to support the infrastructure renovation project of the local vegetable production base.Sustainability Report 47|48

Employee Development Employee Development Strategy

and Workplace Safety Equal Employment

Commitment to Sustainable Development Goals (SDGs) Compliant Employment

Upholding the principles of openness fairness and justice we are committed to enhancing the efficiency and quality of recruit-

ment to drive the effective implementation of the Company's talent strategy. To this end we have formulated the Personnel

Management System which specifies relevant details on employee recruitment employment contracts and social insurance

compensation and assessment professional and technical evaluation and appointment etc.Measures for Managing the Employee Recruitment Process

Requirement Application and Approval of Manpower Requirements: The annual manpower requirement

Application plan of each department and the application for job requirements outside the annual plan shall be submitted to the competent leader for approval.LANPEC has always closely integrated employee development with the Company's sustainable growth establishing and improv-

ing a human resource management system covering multiple aspects such as recruitment training compensation and benefits Review of Recruitment Candidates: The Human Resources Department is responsible for reviewing the

career development and health and safety. The Company's board of directors formulates the overall employee development qualifications and credentials of recruitment candidates (including those recommended by depart-

ments) and shall conduct professional knowledge competence and quality assessments and

strategy which is specifically implemented by the management and human resources department to ensure that employee rights interviews in conjunction with department heads and other relevant personnel.and interests are fully protected. Through a combination of measures such as compliant employment diversified development 1. For proposed hires conduct pre-employment reviews based on the materials attached to the New

talent introduction and motivation the Company continuously optimizes employee growth paths and enhances organizational Review Employee Onboarding Notice complete the onboarding confirmation form and obtain a commitment

to the authenticity of the materials;

stability and competitiveness. In addition LANPEC attaches importance to employee well-being and occupational health imple- 2. After passing the qualification review conduct onboarding training and education (company policies

ments diversified welfare and care initiatives strengthens safety production management and creates a safe healthy and harmo- employee handbook work safety occupational health etc.) and sign labor contracts;

nious working environment to jointly promote the Company's high-quality development. 3. Personnel who have previously worked in special positions such as welding flaw detection and

painting must first undergo occupational health examinations and their eligibility for onboarding shall

be determined based on the examination results.Employee Probation Period Enter the hiring or internship department to undergo the probation period.Development Employment Principles

To ensure equal job opportunities and career development space for all the company has

Fairness and always adhered to the principles of fairness equity and openness in talent selection and

Transparency employment. In the talent evaluation process we comprehensively consider an individual's educational background professional skills and work experience to ensure the transparen-

cy and fairness of the selection process.We commit to eliminating workplace sexual harassment that violates human dignity and

Anti-Harassment occurs against others' will as well as abuse of power.Employee Development Management Framework Our company does not recruit child labor under the age of 16 nor use prison labor forced

Anti-Child Labor labor bonded labor or slave labor or engage in human trafficking. For minor workers aged

and Anti-Forced Labor 16 to 18 we strictly comply with the national regulations on the protection of minor Our overall employee development strategy is formulated by the Board of Directors implemented by the executive management workers as stipulated in the Minor Worker Protection Law.team. As the primary department responsible for corporate human resources the HR Department oversees the execution of all

employee development matters including compensation & benefits diversified employment models labor rights protection and

staff training programs - ensuring full protection of employee rights and interests. Personal Privacy We attach great importance to protecting employees' personal privacy and will not disclose

Protection their personal privacy information to the public without their consent.Employee Development Risk Management 2024 Key Performance Indicators (KPIs)

We employ multiple channels—including employee surveys one-on-one interviews and statistical analysis of quantitative perfor-

mance metrics—to identify and assess staff training & development needs benefits & work-life balance status as well as overall

job satisfaction. Concurrently the Company conducts regular audits of internal communication efficiency and employment

compliance to ensure effective protection of employee rights. There is no form of employment discrimination or forced labor in the company

Employee development serves as a cornerstone for corporate sustainable growth with its impacts and potential risks spanning and the labor contract signing rate for employees is 100%.legal compliance supply chain management and workforce stability. To address these challenges the Company implements

proactive ESG management initiatives to enhance regulatory adherence corporate reputation and talent competitiveness.Sustainability Report 49|50

Equality and Diversity Employee Benefits & Well-being

We firmly put an end to any form of employment discrimination and ensure that employees' work rights and development oppor-

tunities are not affected by factors such as race color age region gender sexual orientation disability height religious belief Compensation & Benefits Management

political stance community identity or marital and pregnancy status. The Human Resources Department of LANPEC has formulated systems such as the LANPEC Performance Appraisal Management

Measures LANPEC Compensation Management Measures and LANPEC Cadre Management Measures. These regulations clarify

the implementation rules for performance appraisal and bonus distribution in functional departments business and R&D depart-

ments and production sector departments while standardizing the compensation management system. In 2024 the Company

Production

personnel further advanced the "Six Fixed" plan namely fixing organizational structure positions staffing job grades personnel and 99

13 111 compensation continuously optimizing human resource management to enhance organizational efficiency and employee incen-

Sales Graduate student tive mechanisms. To further motivate employees and ensure the compensation management system can effectively drive incen-

personnel and above tives the company improved the compensation management system by addressing existing issues and aligning with its current

174 Technical 308 Undergraduate development stage.569 personnel 606

Financial Junior college Welfare & Care

146 personnel and below The Company provides employees with social insurance welfare benefits and additional perks such as regular health check-ups

Administrative and holiday bonuses. Relevant documents including the Employee Welfare Guidelines have been established to ensure effective

personnel implementation and continuous optimization of these benefits. In line with regional characteristics LANPEC grants high-tem-

perature subsidies to employees in Shanghai and heating allowances to those in Lanzhou. Additionally the company contributes

to corporate annuities in both locations and strictly adheres to local regulations for social insurance payments safeguarding

employees' rights and interests.LANPEC Holds 2024 Mid-Autumn Festival Employee Care Event

Talent Recruitment and Retention

In recent years LANPEC's engineering projects have

The Company attaches great importance to talent recruitment and retention. In 2024 the Company strengthened talent retention experienced rapid development leading to an increasing

efforts by optimizing the compensation incentive mechanism and promoting other relevant measures. To ensure the stability of

key talents the Company actively motivates and retains employees who can currently support future development work ensures number of field personnel from the Engineering Management

their past contributions are recognized and enhances their work motivation through continuous incentive measures. At the same Department working on-site. Due to work demands these

time when retaining talents the company follows the principle of cost reduction and efficiency improvement balances the employees have fewer opportunities to return home and spend

number of recruits and costs mainly motivates talents in core key positions and adopts different talent retention strategies based time with their families. Prior to the Mid-Autumn Festival the

on the Company's strategic priorities and the responsibility value of each position. Company's labor union invited family members of these field

employees to the Shanghai base. Company leaders held a

symposium with the families to listen to their thoughts and

Measures for Talent Recruitment and Retention concerns. A live video call was arranged with the employees at

project sites allowing everyone to better understand the

Measure Content working conditions and challenges faced on the ground. The

company distributed festive care packages to the families in

Establish in-depth cooperation with universities to train and recruit outstanding appreciation of their long-standing support and understand-

ing.Talent Recruitment graduates through targeted programs.School-Enterprise Cooperation

Offer internship opportunities participate in campus job fairs and establish stable Wang Jian representing the Company's Party Committee and

university-enterprise talent recruitment channels. executive leadership extended holiday greetings to all field

personnel and their families. He emphasized that

BlueSci-Tech's growth is built upon the hard work of every

employee and the silent support of their families. He assured

Establish an annual Outstanding Employee Award program to enhance staff loyalty that the labor union would make every effort to address

Talent Retention

and motivation. challenges in both work and personal life fostering collective

progress toward a brighter future.LANPEC Participates in Group Company's 2024 Dragon Boat Race

2024 Key Performance Indicators (KPIs) On the eve of the Dragon Boat Festival LANPEC's "Blue Lightning" team made its debut in the parent company's dragon boat competition as a first-time participant.

With strong support from the Company's Party Committee and Labor Union the

team learned from experienced sister companies while overcoming numerous

challenges including limited training facilities lack of professional coaches and

crew members' inexperience in water sports.Recruited 33 talents (including 11 fresh graduates) Through intensive one-month training the team significantly improved their

23 21 physical conditioning technical skills and teamwork coordination. In the fiercely with employees leaving and retiring. contested race they achieved a remarkable time of 1 minute 38 seconds earning

them the Third Prize.Sustainability Report 51|52

LANPEC Competes in 2024 Parent Company Sports Games LANPEC Holds 2024 International Women's Day Themed Event

On May 25 2024 the grand 8th Employee Sports Games of the parent company was held at Wutaishan Stadium. Nearly 1000 athletes

To create a vibrant and uplifting festive atmosphere in celebration of the 114th International Women's Day LANPEC organized

from 10 delegations—including group headquarters managed enterprises and subsidiaries—gathered for this sporting extravaganza.After a full day of intense competition the "New Blue Synergy Team" jointly formed by LANPEC and SUMEC demonstrated tenacious special activities under the theme "Passionate Spring · Brilliant Lives".perseverance self-transcendence and an indomitable spirit ultimately achieving outstanding results.The Shanghai facility hosted a "Haipai Flower Arrangement" workshop. Under professional guidance female employees enthusias-

With less than a month of preparation team members rigorously followed training regimens—from foundational fitness to competitive

drills—pushing their athletic potential to the limit. Each athlete honed their competitive edge optimized training cadence and strength- tically learned and practiced immersing themselves in the charm of floral art amidst fragrant blooms. Deputy Party Committee Secretary

ened mental resilience striving for peak performance. Gao Wei and Labor Union Chairman Wang Hong extended heartfelt gratitude and best wishes to all female colleagues. The Lanzhou

base held a festive gathering featuring traditional hulusi flute solo solo performances and chorus poetry recitation dance routines and

LANPEC’s athletes embodied an unyielding competitive ethos and vibrant team spirit perfectly interpreting the corporate motto: medleys. Through graceful melodies inspiring songs and heartfelt performances the gala showcased the multifaceted talents and

"Pursue excellence until limits break; Heaven rewards diligence—turning ‘impossible’ into ‘possible.’" Their drive has become a powerful

force propelling LANPEC’s high-quality development. aspirational spirit of women in the new era.Sustainability Report 53|54

Employee Grievance & Communication

LANPEC 2024 New Employee Onboarding Program

At LANPEC employee communication and participation are regarded as important cornerstones of corporate development. The

Company is committed to building a comprehensive and multi-level communication and participation system to promote deep

understanding and close collaboration between employees and the enterprise jointly driving the Company's sustained progress. On July 24 2024 the training for newly recruited campus hires of LANPEC in 2024 was officially launched. Before the training the

The Company also continuously improves the organizational structure of labor unions and strengthens grassroots trade union Company carefully prepared a "one-stop" orientation service covering various links such as station pick-up accommodation arrange-

work. In 2024 in response to changes in the personnel of trade union committees and adjustments to organizational structures ments and onboarding procedures creating a warm and comfortable atmosphere for new employees. During the training heads of each

the Company supplemented and elected new trade union committee members and a trade union chairman in accordance with business segment and functional department respectively introduced the relevant work content of their segments and departments

the provisions of the Trade Union Law of the People's Republic of China and the Constitution of the Chinese Trade Union. It also strengthening new employees' understanding of the company's operations.carried out general elections for grassroots trade union organizations and established thirteen grassroots trade unions to better

represent and serve employees and promote continuous communication and development between the company and its

employees.LANPEC Conducts Election for the 3rd Workers' Congress Representatives

In November 2024 the Company held the election of deputies to the Third Staff Congress. A total of 13 electoral districts were set up

for this election with elections conducted by party branches as units. In accordance with the allocated number of deputies and the

eligibility criteria for staff representatives each electoral district strictly followed the electoral procedures and elected staff representa-

tives through secret ballot. The Congress successfully elected 80 staff representatives covering company leaders middle-level manag-

ers key employees and ordinary staff. The representatives expressed their commitment to earnestly fulfilling their representative

functions and democratic rights and effectively safeguarding the legitimate rights and interests of employees.

2024 Key Performance Indicators (KPIs)

Indicator Unit 2022 2023 2024

Total Training Investment 10k RMB 57.98 84.5 86.1

Training Coverage Rate % 100 100 100

Avg. Training Hours per Employee hours 50 61.6 73.5

Employee Benefits & Care

Including: Senior Management hours 62.5 72 95

Employee Training

We have formulated systems such as the New Employee Onboarding Training Manual to enhance employees' professional knowl- Middle Management hours 55 66 86

edge business competence and work capabilities continuously cultivate and deliver outstanding talent with both moral integrity

and professional skills for various positions support the achievement of the Company's strategic goals and promote the common Frontline Staff hours 50 60.5 73

development of LANPEC and its employees. We continuously optimize and upgrade the training system closely integrating

business priorities and challenges and create a series of branded training programs around six dimensions: operational manage-

ment professional technology professional literacy talent echelon new hires and instructors further strengthening the

construction of a business-oriented talent team.Sustainability Report 55|56

Performance Evaluation & Career Progression

We always place employee career development in a critical position committing to building a scientific transparent and diversi- LANPEC Occupational Health and

fied career promotion system. We continuously improve the construction of talent growth pathways and have formulated institu-

tional documents such as the Cadre Management Measures. Safety Management System Certification

In 2024 Lanpec High-Tech established career development pathways based on six sequences—management professional

(functional technical) business (sales engineering) and skills—considering the company's current development stage employee

compensation and the development needs of various talent groups. This includes establishing job grades and corresponding

compensation systems.To further strengthen the philosophy of "focus on strivers high-performance orientation" we explore the establishment of a

scientific and reasonable performance evaluation mechanism to fully mobilize the enthusiasm and initiative of cadres and employ-

ees improve work efficiency and quality and ensure the effective achievement of the company's annual goals and tasks.

2024 Key Performance Indicators (KPIs)

LANPEC promoted 19 cadres to the level of assistant general manager of departments or above

and 30 cadres to the level of manager of secondary departments or above.Health & Safety

The Company strictly complies with relevant laws regulations and policy requirements such as the Work Safety Law of the People's

Republic of China Law of the People's Republic of China on the Prevention and Control of Occupational Diseases Environmental

Protection Law of the People's Republic of China and Fire Control Law of the People's Republic of China. In combination with the Health & Safety Risk Management

annual new regulatory requirements of the supervisory authorities the company continuously improves the construction of its

safety management system and management system to promote the company's safety operation level to a new stage.Health and Safety Management Framework Identification and Assessment of Occupational Health & Safety Risks

LANPEC attaches great importance to safety and health management. It has formulated systems such as the Implementation Rules for the Interim The Company attaches great importance to the identification and management of hazard sources and occupational diseases. It

Provisions on Dual Accountability of Party and Government for Work Safety and One Post Two Responsibilities and the Work Safety Responsibility has formulated the Safety Risk Classification and Control System continuously optimized the safety risk identification mechanism

Target Assessment Measures. The Company has established a Work Safety Committee with the Chairman as the first responsible person which is

subordinate to a Work Safety Office specifically responsible for the implementation of safety work. deepened the application of risk assessment management tools and promoted the systematic standardized standardized and

informatized risk identification and assessment to build a dual prevention mechanism for safety risk classification and control and

Primary Corporate Responsible Person

Party Committee Secretary & Chairman of the Board hidden danger investigation and treatment. The Company carries out safety risk identification and assessment every year formu-

lates control measures and eliminates safety weaknesses.In May 2024 guided by the established system documents the Company's Work Safety Office as the leading force coordinated

Work Safety Committee and assembled various departments to form a special work team to comprehensively and deeply re-identify scientifically assess

and reasonably classify environmental factors safety risks and hazard sources in all internal departments and operating sites. On

this basis the work team further revised and updated two core management documents of the company: the Compilation of

Safety Risks Hazard Source Identification Assessment and Graded Control and the Compilation of Environmental Factor Identifica-

Deputy Work Safety Officer tion Evaluation and Control. These measures aim to ensure that the Company's safety risks are always kept under strict and

Assistant to the General Manager manageable control thereby improving the overall safety management efficiency.Health & Safety Strategic Framework

Work Safety Management Department

Work Safety Office Safety Culture Development

The Company regards employee safety knowledge training as a vital component of its occupational health and safety protection

efforts. It has formulated regulations such as the Work Safety Education Management Regulations and established a comprehen-

sive employee safety education and training system to deliver targeted safety education enhance employees' safety awareness

and effectively improve the knowledge level of occupational health and safety managers.During the Publicity Week for the Occupational Disease Prevention and Control Law the Work Safety Office carried out a series

of activities themed "Adhering to Prevention as the Priority and Safeguarding Occupational Health." The Company organized

relevant personnel to participate in the themed training on the Occupational Disease Prevention and Control Law conducted by

the group and distributed related promotional materials. Meanwhile through the Company's internal network electronic screens

broadcasting promotional videos hanging banners and posting posters within the company multiple channels were used to

improve frontline employees' awareness and prevention capabilities regarding occupational diseases.Additionally the Company actively urges all departments to carry out special occupational health and safety training and organiz-

es employees to participate in occupational health knowledge quizzes to enhance the overall occupational health awareness of

the workforce.Product Branch

LS Group Branch

Lanzhou Testing Institute

LANPEC (Shanghai)

Manufacturing Branch

Safety and Environmental

Protection Department

Quality Management

Department

Legal Affairs Department

Audit Department

Assets and Finance

Department

Science and Technology

Development Department

Operations Management

Department

Human Resources

Department

Discipline Inspection

Commission Office

Board of Directors Office

General Administration Office

Party Committee

Work DepartmentSustainability Report 57|58

LANPEC Occupational Disease Prevention & Legal Compliance Training Program Emergency Management

On April 18 2024 the Company invited a special lecturer from Safety and Health Network to conduct an occupational health training The Company has formulated the Work Safety Accident Emergency Plan (Version G) which covers a comprehensive emergency

session for all personnel exposed to hazards in Production Department I including welders shot blasting/painting operators flaw plan for work safety accidents 11 special emergency plans and 5 specific on-site disposal plans. An emergency response

detection workers and thermal cutting operators. The training covered topics such as occupational disease prevention and related laws command center has been established with the General Manager as the Director and department heads as members; an

and regulations prevention and improvement of common occupational diseases and chronic illnesses (pneumoconiosis noise-induced emergency response team led by the safety supervisor with safety supervisors of each department and work safety management

deafness radiation sickness cardiovascular and cerebrovascular diseases cervical spondylosis) and enhancement of mental health personnel as members; and an emergency rescue team composed of workshop directors team leaders and operators. This has

literacy and healthy lifestyle for employees. formed an efficient and responsive emergency rescue system implementing an operational mechanism featuring unified

command hierarchical response resource sharing coordinated operations a combination of professional and part-time capabili-

ties and integration of prevention and rescue.In 2024 a total of 10 batches of drills were carried out accompanied by training which tested the operability of the company's

emergency rescue and response system improved the emergency response capabilities of employees and relevant departments

to sudden accidents enhanced the disaster prevention and avoidance awareness of frontline employees enabled rapid orderly

and safe evacuation and rescue in the event of production accidents minimized losses caused by accidents and safeguarded

employees' lives.LANPEC 2024 Fire Emergency Drill

On November 21 2024 the Company organized a production safety accident and fire-fighting drill simulating and explaining the

process of cardiopulmonary resuscitation (CPR) for rescue on site. It also explained the usage methods of fire-fighting equipment such

as fire extinguishers and fire hydrants and organized hands-on practical experience.Promoting Employee Health

In order to effectively prevent and control occupational hazard factors in the workplace and ensure employees' occupational

health and safety LANPEC has issued 12 rules and regulations related to occupational health and safety including the Occupa-

tional Disease Hazard Prevention and Control Responsibility System Occupational Health Examination Management Regulations

Occupational Disease Prevention Publicity and Education Training System Occupational Disease Hazard Warning and Notification

System and Occupational Disease Hazard Monitoring and Evaluation Management System. The Company strictly complies with

legal and regulatory requirements implements the main responsibility of the enterprise actively adopts protective measures to

reduce or eliminate occupational hazards provides employees with adequate occupational health protective equipment and

organizes annual occupational health examinations for employees in hazard-exposed jobs to ensure a 100% qualification rate in

occupational health examinations.Chemical Safety

In 2024 the Company formulated the Hazardous Chemicals Management System to strengthen the management of storage

utilization and disposal of hazardous chemicals. Specifically the Company purchased and replaced secondary anti-leakage

pallets for the paint warehouse and hazardous waste warehouse posted eye-catching safety warning signs and Material Safety

Data Sheets (MSDS) for hazardous chemicals equipped the paint mixing room with combustible gas alarms and ventilation

facilities and reapplied epoxy treatment to the floor of the hazardous waste warehouse.On July 25 2024 the Company organized a special emergency drill for hazardous chemical leakage accidents. This aimed to

standardize the management and emergency response procedures for hazardous chemicals ensure timely and effective imple-

mentation of emergency measures in case of chemical leaks minimize casualties and property losses protect the ecological

environment and safeguard the lives and property of employees.Sustainability Report 59|60

Appendix Social Performance

Quantitative Performance Dashboard Indicator Unit 2024

Total Employees Persons 1013

Environmental Performance

- Postgraduates and above Persons 99

Indicator Unit 2024 - Undergraduates Persons 308

- Junior college and below Persons 606

Total environmental

10000 yuan 475.00

protection expenditure Labor contract signing rate % 100

Five social insurances and

housing fund coverage % 100

Scope 1 Total investment in employee training 10000 yuan 86.1

tCO2e 2705.60

direct greenhouse gas emissions

Employee training coverage rate % 100

Average training hours per employee Hours 73.5

Scope 2

energy indirect greenhouse gas emissions tCO2e 2989.52 - Senior management Hours 95

- Middle management Hours 86

Total Water Withdrawal Tons 127786.00 - Frontline employees Hours 73

Product recall rate % 0

Product qualification rate % 100

Total domestic wastewater discharge Cubic meters 10804

Product return rate % 0

Number of R&D personnel Persons 370

Total non-hazardous waste generated Tons 1084.62

Number of authorized patent projects Items 317

Number of invention patent applications Items 25

Total hazardous waste generated Tons 70.34 Number of authorized invention patents Items 80

Total investment in public

welfare and charity 10000 yuan 35

Number of data security incidents Cases 0

Total Waste Recycled/Reused Tons 899.22

Number of customer privacy

leakage incidents Cases 0Sustainability Report 61|62

Governance Performance Report Index

Indicator Unit 2024 Categorization Topic Related Chapter

Climate Action and

1. Climate Change Response Environmental Protection

Proportion of independent directors % 33 2. Pollutant Emissions Environmental Management System

3. Waste Management Environmental Management System

4. Ecosystem & Biodiversity Protection Biodiversity Conservation

Environmental

5. Environmental Compliance

Proportion of female directors % 11 Management Environmental Management System

6. Energy Utilization Resource Efficiency & Energy Savings

7. Water Resource Utilization Resource Efficiency & Energy Savings

8. Circular Economy Resource Efficiency & Energy Savings

Number of public announcements issued Documents 143

9. Rural Revitalization Social Welfare & Rural Development

10. Social Contribution Social Welfare & Rural Development

11. Innovation-Driven Development Technological Innovation

Anti-corruption training % 100

coverage rate for directors 12. Technology Ethics Not Covered

Social 13. Supply Chain Security Responsible Supply Chain

14. Equal Treatment of SMEs Equal Treatment of SMEs

Anti-corruption training % 100

coverage rate for departments 15. Product Safety & Quality Product & Service Quality Focus

16. Data Security & Customer Information Security and

Privacy Protection Emergency Protection

17. Employees Employee Development & Safety

Anti-corruption training % 100

coverage rate for employees Sustainability Development 18. Due Diligence Stakeholder Communication

19. Stakeholder Communication Stakeholder Communication

20. Business Ethics and Anti-Corruption

Governance Compliance Framework Business Ethics & Anti-Corruption

Signing rate of Integrity % 100

Cooperation Agreement with suppliers 21. Fair Competition Business Ethics & Anti-Corruption

Shanghai Stock Exchange Self-Regulatory Guidelines No. 14 – Sustainability Report (Trial)