STO股CK票 C代OD码E：：668888262868

2024

ENVIRONMENTAL SOCIAL AND

GOVERNANCE (ESG) REPORT

Guangdong Huate Gas Co. Ltd.广东华特气体股份有限公司

T热e线l: 0电7话57:- 8410000-88183-1188

M地a址ili：ng广 A东dd省re佛ss山: E市a南st 海Si区de里 o水f W和e顺n金tou逢lin路gjiao Jinfeng Road Fengxi Village Heshun

Lishui Town Nanhai District Foshan City Guangdong Province China

网址：http://www.huategas.com/index.aspx

Website: www.huategas.comENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Governance 13

About this Report 03

Sustaianble Governance 14

Message from the 05

Chairman Corporate Governance 21

Internal Control

About Huate Gas 2507 Management

Investor Relations 27

Management

Business Ethics 30

Environment 31 Product 53

Response to Climate 32 Innovation-Driven 54

Change

CON Supply Management 60Environmental 37 Quality AssuranceCompliance Management 65Customer Service Rational Distribution of 7449 Management目 录 Resources Shoring up the 76Information Defense Line

TENTS Employee 79 Appendix 103Compliant Employment 80 Key Indicator Table 103Employee Democracy 87 Indicators Index

Employee Growing 10789 Feedback form

Occupational Health and 10993

Safety

Public Welfare 101Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

About this Report Sources and Authenticity

All the information and data cited in this report are sourced from the official documents statistical reports and financial reports of Huate Gas.They cover both the internal data from departments and business entities of the Company as well as public information which have been

statistically processed aggregated and audited by the Company. To ensure the completeness and continuity of the explanations the

Company has reviewed and extended some content under given topics. Unless otherwise specified all monetary terms in this report are

denominated in CNY and if there is any inconsistency with the financial report the financial report shall prevail.Introduction Appellation Description

In this report for the convenience of expression and reading Guangdong Huate Gas Co. Ltd. and its subsidiaries are referred to as

This Report is the 3rd Environmental Social and Governance Report of Guangdong Huate Gas Co. Ltd. Based on objective comprehen- "Huate Gas" "the Company" or "We" according to the specific context. For specific expressions please refer to the 2024 Annual Report

sive regulative and transparent principles this Report expounds management ideas key practices and annual achievements for environ- of Guangdong Huate Gas Co. Ltd.mental social and governance work of Huate Gas in 2023.Time Range Abbreviation of Company Full Name of Company

Huate Gas the Company or We Guangdong Huate Gas Co. Ltd.The period of this annual report ranges from January 12024 to December 312024. To make the report more comparable and

forward-looking some content has been extended. Southern China Special Gas Institute Guangdong Southern China Special Gas Institute Co. Ltd.Xinhui Special Gas Insititute JiangMen City Xinhui Special Gas Insititute Co. Ltd.Zhongshan Huaxin Zhongshan Huaxin Gas Co. Ltd.Report Scope Suining Country United Chemical Suining Country United Chemical Co. Ltd.This report focuses on "Guangdong Huate Gas Co. Ltd.". Unless otherwise specified this report covers an organizational scope including Jiangxi Huate Jiangxi Huate Electronic Chemical Co. Ltd.Guangdong Huate Gas Co. Ltd. and its subsidiaries (see the 2024 Annual Report of Guangdong Huate Gas Co. Ltd. for details). Asia Pacific Gas Asia Pacific Gas Industry Co. Ltd.Preparation Criteria Report Access

● Guidelines on Self-regulation of Listed Companies on the Science and Technology Innovation Board of Shanghai Stock Exchange No. To implement the Sustainable Development concept You may browse or download the Report(the electronic version) at the official

14 - Sustainable Development Report (For Trial Implementation) website of Huate Gas（www.huategas.com）or at the website of Shanghai Stock Exchange(www.sse.com.cn).

● The Chinese Corporate Social Responsibility (CSR) Report Preparation Guide (CASS-CSR6.0)

●Sustainable Development Goals of the United Nations For any feedback and suggestions please contact us through the following methods:

Mailing Address: East Side of Wentoulingjiao Jinfeng Road Fengxi Village Heshun Lishui Town Nanhai District Foshan City

● Global Reporting Initiative Sustainability Reporting Guidelines ((2021 edition)) Guangdong Province China

● The Guidelines on Corporate Social Responsibility of State-owned Companies Tel: 0757-81008813

Website: http://www.huategas.com

03 04Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Message from the Chairman

Dear Colleagues Partners and Friends， Taking Advantage of Opportunities in Changes to Create Value for the Gas Industry.Amidst industrial upgrading economictransformation and the tides of globalization Huate Gas proactively seizes development opportunities dedicating itself to the R&D

Amid the rapid evolution of the global economy sustainable development hasand application of gas-related products. Guided by the strategic principle of “prioritizing specialty gases as our core focus whilebecome the mainstream of the times and a universal consensus. Huate Gas has setsupporting growth with industrial gases and gas equipment.”We uphold a science-driven development philosophy to maximize

its sights on long-term development goals contributing its wisdom and strength

value for our clients.to the vigorous development of the gas industry and also to the construction of a

resource-conserving and environment-friendly society. We will work hand in hand Gathering the Strength of Talents to Build an Innovation Engine.Huate Gas always upholds the "People-oriented" corporate

to create a beautiful future of sustainable development. mission. With technological innovation as the core strength and talents as the foundation for development we advocate the

common growth of employees and the enterprise. We have rolled out a complete employee training mechanism providing a broad

Building the Foundation for Standardization for Development. Huate Gas

development platform and space for employees' growth creating a vibrant working environment and enhancing employees' sense

always looks upon standardized governance as the foundation for corporate devel-

of belonging and cohesive force.opment. By upholding the principle of "Orderly Governance Stable Operation" we

keep optimizing the governance system and improving the internal control mecha- Being Grateful Fulfilling Responsibilities Contributing to Society. While pursuing high-quality development Huate Gas has

nism. By perfecting the information disclosure system we ensure the openness always cherished a strong sense of patriotism and great love for the country. We are enthusiastically involved in charity events

and transparency of corporate business information. Besides that we actively sincerely giving back to society. We actively fulfill our social responsibilities in such respects as charitable donations and rural

accept social supervision and continuously enhance the Company's market revitalization and vigorously spread the Chinese nation’s traditional virtues such as being ready to help others and helping each

credibility and social reputation through standardized operation management and other in difficulties with a view to promoting social harmony.a responsible communication mechanism thus laying a solid foundation for the

On the road of sustainable development Huate Gas has never halted its step of exploration. We are fully aware that the road ahead is

Company's sustainable development.not even but every challenge brings an opportunity for growth. In the future Huate Gas will stay true to its original dream to forge ahead

Practicing Green Development for Ecological Conservation. Huate Gas persists on the path of green development while being driven by innovation and underlain by the sense of responsibility. With staunch faith

in the path of "Green First Sustainable Development". We strictly comply with fearless courage and unremitting efforts we will pull together to cope with industry changes keep injecting impetus into the sustainable

national environmental protection laws and regulations improve the environmental development of the gas industry and jointly create a cleaner more efficient and more prosperous future!

management architecture fulfill environmental management responsibilities and

Heartfelt gratitude for your unwavering support and trust!

continuously increase investment in environmental protection facilities. By

introducing advanced environmental protection technologies and equipment

implementing a number of environmental protection measures such as energy Shi Pingxiang

conservation emission reduction and water conservation the Company has

achieved the green transformation of the production process and the precise Chairman of Huate Gas

control over pollution emissions. In addition the Company actively advocates the

concept of “Green Office Environmental Protection” and encourages employees to

participate in environmental protection activities jointly contributing to environ-

mental protection.

05 06Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Business Overview

Huate Gas is an enterprise with corporate business covering the R&D production and sales of gas products. The Company focuses on

providing high-quality gas products for multiple domains such as semiconductors medical care and environmental protection. It has

established a complete product system that involves a variety of specialty gases and bulk gases. Through continuous technological

About innovation and rigorous quality control Huate Gas has ensured the excellent performance and extensive application of its products. Relying on its stable product quality and high-quality customer service the Company has won the trust and praise from customers and has cultivated a good brand image in the industry.Huate Gas

Sulfur Hexafluoride

Xenon (Xe) Carbon Monoxide (SF6) (CO)Krypton (Kr) Boron trichloride（BCl3﹚Disinfectant Gas Helium (He) Neon (Ne)

(C2H4O).

High-purity

Phosphorane Difluoromethane（PH3） (CH2F2)

Huate Gas Profile

Fluorine argon neon

Carbon Tetrafluoride Hexafluoroethane mixture

(CF4) (C2F6) （F2-Ar-Ne）

Founded in 1999 Guangdong Huate Gas Co. Ltd. was listed on the Sci-tech Innovation Board(STAR Market) of the Shanghai Stock

Exchange in December 2019 with stock name abbreviated as "Huate Gas" (688268.SH). It is the first Foshan-based enterprise to be

listed on the China’s Sci-Tech Innovation Board and the nation’s first gas-sector company to go public on the A-share market.. Octafluorocyclobutane Krypton and neon

(C4F8)

The Company is committed to localizing the production of speciality gases and overcoming the gas material bottlenecks in high-end mixture（Kr-Ne）

fields such as extremely large-scale integrated circuits and new display panels. The Company specializes in R&D production and sales

of speciality gases and concurrently develops ordinary industrial gases as well as related gas equipment & engineering businesses in

addition to providing one-stop comprehensive application solutions on gases.Disilane (Si2H6) Germanium alkane Octafluoropropane（GeH4 ） （C3F8）

Main Products

07 08Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Our Development

20222024

19962006

2011Awarded the title of “op 20Participated in Our products have Greater Bay Area ListedSuccessfully the research 2013 2018 passed the certification of Companies – Green The research and and Our products famous semiconductor developed Governance Award” “ Topdevelopment of special gas the excimer development

factory in Korea.Undertook the “High Purity into China's 20 Greater Bay Area Listedblends was started and laser gas projects 2008 Electronic Gas Research and well-known Awarded the title of “Top 20 Companies – Corporate we launched Ar+CO2 independently combining Development and Industrializa- 2015 semiconductor 2020 Listed Companies in Respect Governance Award” and blends which became the and realized production tion”in the major national R&D factor. of Corporate Governance in “2024 Nanhai Districtfirst domestic special gas the import Our products education and Inaugurated a joint Our products entered project “Extremely Large Scale the Greater Bay Area in Foshan City Governmentcontainer gas. substitution entered the research of laboratory with Integrated Circuit Manufacturing the well-known 2022”. Quality Award”.of clinical well-known Guangdong Guangdong Industrial Equipment and Complete Sets of semiconductor factorymedical memory Provincial Technology Research Technology” (02 special project) in in South Korea.gases. manufacturers Department Institute .charge of the topic “Research and

1999 in South Korea. of Education Development and Pilot Plant Test Obtained Guangdong Our products mainly in of High Purity Trifluoromethane”. Provincial Enterprise

Foshan Huate enter the respect of Technology Center 20th anniversary.Gas Co. Ltd. well-known special gases recognition.was established. semiconductor applied in the Foshan Electronic Gas Research

factory in semiconduc- and Development Center was

Singapore. tor field. established. 2023Our fluorocarbon products entered the Awarded the title of “Top 20 Listedwell-known semiconductor factory 2019 Companies in Respect of Corporate in Taiwan. Governance in the Greater Bay AreaOur products into China's well-known Listed on the Science and Technology in 2022”.semiconductor factory. Innovation Board.Awarded "Guangdong SpecialisedAwarded the title of“ChineseSpecialised and New Small and

Enterprise with the Advantage ofIntellectual Property”. Medium-sized Enterprises"

"Guangdong Innovative Small and

Identified as a high-technology Medium-sized Enterprises"

enterprise for the fourth time."Guangdong Patent Award of

Awarded the title of the Third Excellence" "Guangdong Manufac-

(2019) “Top 10 Professional turing Industry Individual Champion".Electronic Chemical MaterialsManufacturers in China” in China’s

2014 electronics materials industry.2007

Our products 2012 Undertook the research 2017 2021

1998 successfully and development of Obtained Excellence Award of National Our products enter the well-known entered the Taiwan The Hong Kong the “Special Gases for Patent Award “A purification method for semiconductor factory in Germany.Flat Panel Displays” inThe rare gas semiconductor subsidiary was hexafluoroethane”. 4 kinds of gas products for photoli-

1993 products were market. established. the project of Pilot Our products for photolithography Cluster Development thography obtained the certification of developed and independently developed by us obtained of Strategic Emerging Gigaphoton Inc. of Japan.

Southern China successfully 2005 2010 the certification of ASML.Industries in Guang-

Special Gas applied to Formally entered the research and Awarded the title of the Fourth (2021) Identified as dong Province Awarded the title of the Second

Institute (the downstream. development and application ofa High-tech (next-generation display (2017)“Top 10 Professional Electronic“Top 10 Professional Electronic Chemicalpredecessor of electronic special gases and the

enterprise. technology) . Chemical Materials Manufacturers inMaterials Manufacturers in China” inHuate Gas) was products entered 4 inch semicon- China”in China’s electronics materials China’s electronics materials industry.established. ductor factories for the first time. industry.

09 10Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Our Culture Key Performance

Committed to gas R&D and application and Economic KPI

Vision

becoming a leader in the gas industry.Operating Revenue Net Profit Attributable to

Total Tax Payment

Shareholders(billions)

Enterprise

Harmonious enterprising pragmatic adaptable.Spirit 13.95 ten million 1.85 0.70 ten million

Basic Earnings per Share Total Assets Social Contribution Value per Share

Business Achievement of customers

Philosophy and get self-improvement. 1.54 33.01 ten million 3.63

Core cultures

Environmental KPIIdentity responsibility equality safety and Simultaneous Operation Rate of Implementation Rate of the “Three Valuesenvironmental protection. Percent of Pass of Pollutant Monitoring Environmental Protection Facilities Simultaneous” for Environmental Protection in Construction Projects

Provide the best platform for employee development 100% 100% 100%

Mission enhance the competitiveness of Chinese gas industry Total Amount of Investment in Environmental Total Direct Energy Consumption (in

Total Water Consumption (in tons)

and create maximum value for customers and society. Protection (in ten thousand yuan) tons of standard coal)

140.665427.74156696

Our Honor Social KPI

Total Number of Employees Signing Rate of Labor Contracts Coverage Rate of Social Insurancet

1200100%100%

Training Coverage of New Employees Total Duration of Employee Training Investment in Work Safety

100 % 185555 16.8169 million

Percent of Settlement of

Investment in R&D Percent of Pass of Products Customer Complain

48.9215 million 99.97% 100%

Governance KPI

Number of Board of Supervisors

Number of Shareholders’ Meetings Held Number of BOD Meetings Held Meetings Held

4168

Proportion of Female Directors on the Proportion of Independent

Board of Directors Directors on the Board of Directors

28.57%42.86%

11 12By persisting in the corporate spirit "Harmonious enterprising pragmatic

adaptable." Huate Gas promotes the implementation of the sustainable

development strategy in an all-around manner and strikes a balance among

economy society environment and corporate governance in order to jointly

Our Concept

create a better future.● Sustaianble Governance ● Investor Relations Management

Governance ● Corporate Governance ● Business EthicsOur Actions ● Internal Control Management

Sustaianble Governance｜ Corporate Governance ｜ Internal Control Management SDGs

Investor Relations Management ｜ Business Ethics

Sustaianble Governance

Sustainable Development Goal and Vision

As a leading enterprise in the specialty gases industry Huate Gas has always insisted on the business philosophy of attaching equal

importance to economic benefits and social responsibilities. It has deeply integrated sustainable development into the Company's

development strategy. During the process of promoting the green and low-carbon transformation the Company through practical

measures such as building a circular economy system has not only achieved a symbiotic and win-win result between environmental

benefits and commercial value but also led the coordinated development of the industrial chain as an industry benchmark injecting

a continuous stream of innovation impetus into the construction of an environment-friendly society.Optimising the governance mechanism of the three councils and

strengthening risk management awareness.Governance Issues

Adherence to honest business principles and transparent and reasonable

disclosure of information.Improve the environmental management system and enhance the efficiency

of resource use.Environmental Issues

Strict emission pollution management focusing on ecological environ-

mental protection.Promote the development of innovation ability and refine the supply chain

Industrial Issues management.Commitment to product quality improvement improve customer service system.Maintaining a diverse and equal workplace and promoting the develop-

Employee Issues ment of employees' abilities.Protecting employees' occupational health and creating shared value together.Commonwealth Issues Focus on creating social value and actively assume social responsibility.

13 14Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Contribution to SDGs

SDGs Responses to SDGs Sustaianble Management

Huate Gas has established an incentive-based salary system and provided supplementary

welfare. It cares about the lives of employees helps those in difficulties actively participates in Huate Gas attaches great importance to sustainable development work. It observes relevant laws regulations such as the Guidelines on Self-regu-

public welfare and charity activities responds to rural revitalization does its bit for promoting

the new-type development of rural collective economy as well as rural poverty alleviation and lation of Listed Companies on the Science and Technology Innovation Board of Shanghai Stock Exchange No. 14 - Sustainable Development Report (For Trial Implemen-

fulfills its social responsibilities. tation) to keep improving the ESG governance structure and operation mechanism while stressing the BOD’s supervision and management

over the Company's ESG -related work.Huate Gas organizes physical checkup activities for employees and keeps abreast of their physical

health. The Company provides labor protection supplies to ensure the health of employees at work. The Company is actively planning to build an ESG governance structure. So far it has already established a three-in-one ESG gover-

nance structure covering the decision-making layer the management layer and the execution layer helping the Company forge ahead

Huate Gas has built a full-fledged training system and dedicated itself to providing employees steadily on the path of sustainable development. As the supreme governance organ for the Company's ESG -related work and informa-

with all-around training opportunities. It keeps improving the team of training lecturers and

helps employees improve their own literacy and professionalism. tion disclosure the BOD is responsible for formulating the Company's overall ESG strategy and medium- and long-term plans clarifying

the development direction and comprehensively assessing ESG -related risks and potential opportunities.Huate Gas adheres to a governance philosophy of diversity equity and inclusion strictly

complying with laws and regulations. We uphold the principle of equal pay for equal work reject

discrimination in all forms and actively safeguard the rights and interests of female employees.Huate Gas advocates the recycling and utilization of water resources. By adopting measures such

as water resource recycling it actively practices “Clean Water Use” and has also set up compliant

sanitation facilities.Decision-making Execution Contact

Huate Gas continuously optimizes the energy structure injects new impetus into the corporate

development actively carries out energy conservation and consumption reduction work and

promotes green and sustainable development. Board of Directors Functional Securities Department

(BOD) Departments

Huate Gas has established a perfect career development path provided competitive salary and

welfare set up a salary adjustment system continuously optimized the salary management

system and safeguarded the labor rights and interests of employees.Huate Gas focuses on the R&D of specialty gases strengthens industry-university-research

cooperation fully stimulates the employees’ enthusiasm in innovation and advocates the path

of replacement by localization.To strengthen the ESG capabilities of employees at all levels

Huate Gas persists in the governance values “Diversity Equality Inclusiveness” respects the of the Company Huate Gas organizes ESG training further

differences among individuals and dedicates itself to providing an inclusive and impartial working

environment. It firmly resists all forms of prejudice and harassment behaviors insists on the principle analyzes the development trends of ESG shares excellent

of equal pay for equal work and safeguards the legitimate rights and interests of employees. practice cases in the industry cultivates a corporate culture

The Company actively participates in social public welfare activities helps with rural of sustainable development and focuses more on

revitalization and organizes community co-construction activities. comprehensively improving its own ESG management level

in order to promote the coordinated progress of the

Huate Gas sets great store by supply chain management maintains long-term and stable enterprise in economy environment and society.cooperative relationship with its suppliers and creates a supply chain featuring fair competition

clean-fingered governance and transparency.Huate Gas actively responds to the challenges of climate change actively carries out energy

conservation and emission reduction work develops green and low-carbon products and

promotes the green transformation of the enterprise.Huate Gas strictly complies with laws and regulations and ensures that its production and operation

activities have no impact on the surrounding ecology promoting the harmonious coexistence

between humans and nature. Stakeholder Engagement

Huate Gas continuously optimizes the governance structure for sustainable development By upholding the value "Recognition Responsibility Equality Safety Environmental Protection" Huate Gas is committed to improving

strengthens compliance management and ensures that the rights of shareholders are legally

protected. It further promotes the construction of incorruptible culture and adheres to the the efficiency of resource utilization promoting the harmonious coexistence between the enterprise and the environment and achieving

principles of business ethics. sustainable development. Focusing on the needs and concerns of stakeholders the Company has identified six key groups in addition

to actively responding to the demands and expectations of stakeholders. When preparing relevant reports the Company takes the

Huate Gas upholds strict business ethics and norms firmly resists all forms of illicit competition

behaviors and creates a positive and sustainable business environment. initiative to bring in relevant issues in an effort to balance and maximize the interests on the basis of safeguarding the rights and

interests of all parties and to lay a foundation for the prosperity and development of the Company.

15 16Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Stakeholder Topics of Interest Communication Channels Identification of Material Topics

Environmental Protection In strict accordance with the requirements of the Self-Regulatory Guidelines for Listed Companies on the Guidelines on Self-regulation of Listed

Energy Saving and Carbon Reduction Companies on the Science and Technology Innovation Board of Shanghai Stock Exchange No. 14 - Sustainable Development Report (For Trial Implementation)

Water Resource Management the Company based on the industry’s characteristics and its own business features has conducted a comprehensive and in-depth

Government Government Communication Meeting

Circular Economy dual-value dimension assessment of sustainable development issues. From an external perspective the Company has evaluated the

Regular reports & Announcements

& Production Safety substantial impact of the issues on the economic social and environmental systems (i.e. the importance of impact). On the other hand

Daily Communication and Reporting

Employee Rights from an internal perspective the Company has examined the potential effects of the issues on its strategic planning business pattern

Regulatory Agencies Listed Company Training Activities

Business Ethics innovation financial stability cash flow management financing structure and value chain resilience (i.e. the importance of finance). On

Data Protection and Privacy this basis the Company referred to internationally recognized ESG standard systems such as the Global Reporting Initiative (GRI) to

Social Welfare implement a systematic hierarchical evaluation of the sustainable development issue database. By building an "Impact -Finance"

two-dimensional matrix model the Company is capable of accurately identifying the core issues that not only have significant external

social value but inflict a substantial impact on the enterprise's sustainable development ability.Environmental Protection

Energy Saving and Carbon Reduction

Investors Water Resource Management General Meeting of Shareholders

Circular Economy Regular reports & Announcements

&

Production Safety Announcement of Important Project Progress Process for Identification of Material topics

Shareholders Employee Rights Investor Communication

Business Ethics

Data Protection and Privacy

Identification of Impacts

Policy and Regulation Analysis of Corporate

Benchmarking Study Business Model Industry Best Practice

Risks and Opportunities

Staff Congress of Stakeholders and the

Company

Employee Symposium

Corporate Governance Suggestion Box

Production Safety Employee Satisfaction Survey

Employees

Employee Rights Corporate Culture Activities

Data Protection and Privacy Proposal Management Refer to the Global Reporting Initiative (GRI) the United Nations Sustainable Development Goals (SDGs) the Sustainability

Regular Training Accounting Standards Board (SASB) MSCI as well as relevant issues of domestic and foreign counterparts in the same

Internal Magazine and WeChat industry to establish a database of issues related to sustainable development.Corporate Governance Supplier Exchange Meeting

Suppliers Business Ethics Technology Exchange and R&D Co-operation

Chain of supply management Mail & Telephone

Corporate Governance Research on External Stakeholders Research on Internal Stakeholders

Sustainability Factory Visit

Clients Data Protection and Privacy Customer Satisfaction Survey

Business Ethics Customer Feedback

Product Quality Mail & Telephone

Chain of supply management

Environmental Protection

Material Issues

Community Production Safety Public Welfare Activities

Employee Rights Community Monitoring

Social Welfare

17 18Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Huate Gas’s Issue Identification List Hute Gas's Evaluation Results of ESG Material Issues

Dimension Issue Importance Explanation

Environmental compliance management Dual Importance

Energy utilization Impact importance

21

Climate change response Dual Importance 13

249

Water resource utilization Impact importance 20

E 116 5

12

Pollutant discharge Dual Importance 14 2210

24

Ecosystem and biodiversity protection Impact importance 23 25 8

15

3

Circular economy Impact importance 7

16

Waste disposal Dual Importancez

Protection of employees' legitimate 17

rights and interests Impact importance

2627

Employee training and development Impact importance 28

18

Occupational health and safety Dual Importance

Research and development and innovation Dual Importance

Product quality and safety Dual Importance 19

S Protection of customers' rights and interests Impact importance

Information security and privacy protection Impact importance

Responsible supply chain management Dual Importance

Equal treatment of small and

medium-sized enterprises Relevant

Importance to the Company's finance

Social contribution Relevant

Rural revitalization Relevant

● 01、Environmental compliance ● 09、Protection of employees' ● 15、Information security and ● 21、Standardized corporate

Protection of shareholders' rights and interests Impact importance management legitimate rights and interests privacy protection governance

● 02、Energy utilization ● 10、Employee training and ● 16、Responsible supply chain ● 22、Anti-bribery and

Standardized corporate governance Impact importance ● 03、Climate change response development management anti-corruption in business

● 04、Water resource utilization ● 11、Occupational health and ● 17、Equal treatment of small ● 23、Anti-unfair competition

Anti-bribery and anti-corruption in business Impact importance

● 05、Pollutant discharge safety and medium-sized enterprises ● 24、Tax compliance

Anti-unfair competition Impact importance ● 06、Ecosystem and biodiversity ● 12、Research and development ● 18、Social contribution ● 25、Risk management

protection and innovation ● 19、Rural revitalization ● 26、Due diligence

G Tax compliance Impact importance ● 07、Circular economy ● 13、Product quality and safety ● 20、Protection of shareholders' ● 27、Stakeholder communication

● 08、Waste disposal ● 14、Protection of customers' rights and interestsRisk management Impact importance rights and interests ● 28、ESG governance

Due diligence Relevant

Having both financial importance and Having financial importance but lacking

Stakeholder communication Relevant impact importance impact importance

ESG governance Relevant Having impact importance but lacking Having neither financial importance nor

financial importance impact importance

1920

Importance to the Company's impactGuangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Corporate Governance

Governance Structure

Governance System Shareholders' Meeting

Huate Gas has formulated the Articles of Association the Rules of Procedure for Shareholders' Meetings the Rules of Procedure for Board of Directors The shareholders' meeting as the supreme authority of the Company makes decisions on the Company's business strategies and

Meetings the Rules of Procedure for Board of Supervisors Meetings and other rules and regulations in strict accordance with the requirements of investment plans in accordance with the laws and reviews the reports of the BOD. The Company strictly observes the Articles of

the Company Law of the People's Republic of China the Securities Law of the People's Republic of China the Corporate Governance Standards for Listed Association and the Rules of Procedure for Shareholders' Meetings to ensure that the procedures for convening holding and voting at the

Companies as well as the relevant laws and regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange. shareholders' meeting are in compliance with standards and norms. The Company upholds the principle of equality in treating all

It has established a corporate governance structure involving the shareholders' meeting the board of directors and the board of shareholders and provides an online voting platform to facilitate shareholders' participation in meetings and exercise of their rights

supervisors and kept improving the corporate governance system in order to enhance the Company's operating efficiency. especially to ensure that the legitimate rights and interests of minority shareholders are fully realized.KPI

During the reporting period the Company held a total of 4 shareholders' meetings including 1 annual shareholders'

meetings and 3 extraordinary shareholders' meetings. A total of 19 proposals were reviewed and approved at these

Guangdong Huate Gas Co. Ltd. meetings.Board of Directors

Shareholders'

Meeting The board of directors (BOD) as the leading body for implementing the resolutions of the shareholders' meeting and making business

decisions shall be fully responsible to the shareholders' meeting. For its operations in notification convening deliberation voting and

Strategic Committee Board of Supervisors the content of resolutions etc. the BOD shall strictly observe laws regulations and the Articles of Association. In addition the BOD shall

make announcements in accordance with the information disclosure regulations for listed companies in order to ensure the compliance

Board of

Remuneration and Directors of the decision-making procedures and the legality of the decision-making content and to safeguard the transparency and fairness of

Appraisal Committee corporate governance.BOD Secretary

Nomination Committee KPI

General Manager

Audit Committee

During the reporting period the Company held a total of 16 BOD meetings and deliberated 62 proposals.● BOD Diversity

Audit Dept. All Functional Departments Securities Dept.The board of directors of the Company is composed of management members with diverse backgrounds whose professional

backgrounds cover multiple fields such as corporate operation and management financial management and chemical

industry. This is highly consistent with the Company's development needs. These management members can give full play to

their respective professional expertise and provide strong professional support for the Company's all-round development. By

Governance Framework the end of the reporting period the Company's board of directors was made up of 7 directors in total among which there

were 2 female directors.

21 22Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Chairman ● Special Committees

1

41-50 years old Female Under the BOD there are four major committees namely the Strategic Committee the Nomination Committee the Remuneration and

2 2 Appraisal Committee and the Audit Committee. The BOD has formulated detailed rules of procedure to delimit the structure respon-

sibilities and meeting arrangements of each committee. The special committees are all composed of the Company’s directors and

Direc- independent directors. Members of each committee operate in accordance with the Company’s realities and their respective rules to

tor provide professional and efficient decision-making references for the BOD ensuring that the decision-making process is both profes-

3

Independent sional and effective.director Above 51 years old Male Proportion of Independent Directors

3 5 5 Special Committees

Independent Non-independent

Directors (number) Directors (number) Independent Direc- Serve as the Member tors (%) (Yer/No)

Position Age Gender Strategic Committee 2 3 40% No

Chemical Audit Committee 2 1 66.67% Yes

engineering Junior college or below Doctor’s degree

3 1 1 Nomination Committee 2 1 66.67% Yes

Accounting

Remuneration and

2 Appraisal Committee 2 1 66.67% Yes

Bachelor’s degree

Others 2Master’s degree

2 3 Board of Supervisors

Major Educational Background The Company's board of supervisors has a total of 3 supervisors among which 1 supervisors are selected from employee representa-

tives. The number and structure of the BOS comply with the requirements of laws and regulations. In accordance with the Articles of

Association and the Rules of Procedure for Board of Supervisors Meetings and other rules the Board of Supervisors actively perform its supervision

BOD members duties treat the Company and shareholders with a high sense of responsibility and effectively supervise the Company's major affairs

financial status as well as the compliance of directors and senior executives in performing their duties. The supervisors shall make every

effort to safeguard the rights and interests of the Company and shareholders to ensure that the Company's operations are standardized

KPI and transparent.During the reporting period the average attendance rate of the company's board directors was 100%. KPI

During the reporting period the Company held 8 meetings of the Board of Supervisors and deliberated 25 proposals.● BOD Diversity

The Company attaches great importance to giving play to the positive role of independent directors in decision-making and

keeps improving the scientific decision-making level of the BOD. The number and structure of the BOD comply with the require-

ments of laws and regulations. By the end of the reporting period the Company had set up 3 independent directors accounting

for 75% of the total persons of the Company's BOD.

23 24Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Internal Control Management

Compliance Management

Key Indicators UOM 2024年Huate Gas has always looked upon compliant operation as the bottom line of corporate operation. In strict accordance with national

laws and regulations the Company has established a governance system integrating risk control compliance management and internal Internal Control Training Sessions Times

control construction. Through the normalized internal audit and dynamic rectification mechanism the Company ensures the standard- 26

ized operation of the entire business process. It keeps improving the standardized construction of institutional processes establishes a Number of Employees Participating in

risk assessment and response training system covering all employees and stresses the organizational resilience. PersonInternal Control Training 550

With the internal control system as the foothold the Company has established a closed-loop management mechanism for risk warning

process monitoring and effectiveness evaluation which helps effectively identify and resolve business risks. According to the needs of

business expansion and strategic planning the Company continuously optimizes the adaptable internal control structure to strike a

balance between risk prevention&control and operational efficiency injecting institutional impetus into its sustainable growth.Internal Risk Control

Related Transaction Management

Huate Gas has always persisted in operating in accordance with laws and regulations. Based on its operation realities the Compa-

ny has formulated such management rules as the and the providing The Company has always persisted in the principles of fairness in pricing legality and compliance of the decision-making process Internal Audit Rules Internal Reporting Rules for Major Information

all-round and systematic instructions and norms for the Company's operation to ensure the efficient operation of the internal and standardization of information disclosure. In accordance with relevant laws and regulations such as the Company Law of the People's

control mechanism. Republic of China the Securities Law of the People's Republic of China the Accounting Standards for Business Enterprises No. 36 - Related Parties Disclosure

and the Articles of Association the Company based on its operation realities has formulated the Related Party Transaction Decision-making

The Audit Committee of the Company as the primary responsible department for internal control has set up an Audit Department Rules which is aimed at ensuring the related party transactions will not jeopardize the interests of the Company and all shareholders

which is responsible for in-depth inspection and supervision of the establishment and implementation of the Company's internal control but improve the standardization and efficiency of the operation and achieve rapid identification daily supervision and effective

system providing a strong guarantee for the Company's legal and compliant operation asset safety the accuracy of financial reports management of related party transactions thereby safeguarding the legitimate rights and interests of the Company and sharehold-

operational efficiency and the information authenticity & integrity. The Company keeps abreast of the operating status of internal ers.It also assures the healthy and stable development of the Company.control and invites third-party institutions at regular intervals to evaluate and authenticate the internal control system. This helps

effectively identify and prevent potential risks and shore up the defense line for the Company's steady progress.During the reporting period the Company evaluated the effectiveness and feasibility of the internal control system hired a third-party Tax Payments Management

accounting firm to conduct an independent and objective evaluation and issued the Internal Control Evaluation Report. The Company resolutely follows national tax laws and regulations upholds the principle of tax payment in good faith and strictly

complies with tax management requirements to complete tax declarations and payments in a timely and accurate manner. It ensures

the full payment of taxes and firmly resists illegal acts such as tax evasion. The Company's management team attaches great impor-

tance to tax management and strengthens the internal control and supervision mechanisms to ensure the compliance and accuracy

KPI of tax treatment and effectively prevent and control tax risks.The Company steadfastly upholds an integrity-driven business philosophy consistently prioritizing tax compliance as a fundamen-

In 2024 the audit report showed that the Company's internal control system continued to operate effectively and there tal operational principle. We maintain a highly cautious and rigorous approach to tax-related matters adhering to high standards

were no major or important internal control deficiencies in financial reports and non-financial reports. and stringent requirements in tax governance. Through these efforts we strive to foster an ethical and compliant business

environment. During the reporting period our tax management practices achieved significant results providing robust assurance

for the sustainable growth.KPI

During the reporting period the Company paid a total of RMB 69778.9 thousand in taxes (excluding individual income tax).

25 26Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Investor Relations Management

Information Disclosure Investor Communication

In strict accordance with relevant laws and regulations such as the Company Law of the People's Republic of China the Securities Law of the People's Huate Gas attaches great importance to investor relations management and regards it as a key part of the routine work. In strict accor-

Republic of China and the Administrative Measures for Information Disclosure of Listed Companies the Company earnestly performs its information dance with the requirements of relevant laws and regulations and the Articles of Association the Company has formulated a series of rules

disclosure duties formulates and implements the Information Disclosure Management Rules and the Management Rules for Voluntary Information and regulations such as the Investor Relations Management Rules in order to firmly safeguard the rights and interests of investors and

Disclosure and standardizes the information disclosure process. It conducts active and effective communication and exchanges with strengthen communication with them.investors and prospective investors through information disclosure platforms such as the cninfo.com.cn the "Shanghai Securities News"

and the "Securities Times". While fully safeguarding the legitimate rights and interests of investors the Company keeps enhancing the By upholding the principles of compliance equality initiative honesty and trustworthiness the Company actively carries out investor

trust and recognition of the capital market for the Company's governance level. relations management work. Through diverse channels such as the official website E-Interaction investor hotline performance briefing

and email the Company maintains tight connection with investors on multiple platforms and in multiple ways which effectively

safeguards investors' right to know and right to participate. By virtue of high-quality interactive exchanges the Company effectively

案 例 enhances the market's recognition of its corporate value forming an healthy interactive investor relations ecosystem.Huate Gas Awarded "New Quality Enterprise Golden Bull Award" and

"Golden Information Disclosure Award"

The Company won the "New Quality Enterprise Golden Bull Award" and the

"Golden Information Disclosure Award" at the 2024 High-Quality Development Key Indicators UOM 2024

Forum for Listed Companies and the 26th Golden Bull Award Ceremony for

Listed Companies exemplifying its extraordinary performance in sci-tech

Regular Earnings Briefings

innovation corporate governance and information disclosure. As an Times 3

outstanding listed enterprise in Foshan City Huate Gas will continue to uphold

the spirit of professional innovation and inject new impetus into the Company's Investor Open Day Times

sustainable development. 1

SSE E-Interactive Responses Times 40

Investor Inquiry Response Rate % 100

KPI

Investor Exchange Times 185

During the reporting period the Company made public 4 regular reports and 104 interim reports.avvv

Number of Investor Exchanges Persons 1100

27 28Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Business Ethics

Clean-fingered Governance

Huate Gas has established a comprehensive clean-fingered governance mechanism aiming to specify employees' business behaviors and

ethical codes. This mechanism clearly stipulates that funds and assets must be used in a legal and proper manner immoral or illegal business

competitions are banned and employees are strictly prohibited from accepting illegal remuneration or bribes. Huate Gas encourages employ-

ees to report unethical behaviors and promises to provide identity protection or rewards. Such clean-fingered governance mechanism

provides a strong guarantee for creating a fair impartial and clean internal corporate environment.Protection of Shareholders' Rights

Huate Gas is committed to creating extraordinary values for shareholders. In compliance with the concept of giving back to shareholders

and society and in strict accordance with the profit distribution policy stipulated in the Articles of Association the Company has formulated Anti-unfair Competition

the Shareholder Return Plan for the Next Three Years (2022 - 2024). Based on its realities the Company keeps improving the profit distribution

system and makes the “Dividend decision-making and supervision mechanism” more scientific and stable ensuring a giveback for the Huate Gas insists on the principles of fairness and honesty and is fully aware of their importance to the Company's reputation

trust and support of the vast number of investors in a continuous and stable manner. long-term development and market order. The Company clearly rejects immoral or illegal business behaviors such as false advertising

price fraud and commercial bribery and resolutely safeguards consumers’ rights and the market order.During the reporting period the company conducted 25 business ethics-themed training sessions totaling 50 hours of training. No

The Company's Cash Dividend in Three Years (UOM: Yuan) major breaches of integrity or unethical conduct occurred and the company faced no legal proceedings related to improper practices

domestically or internationally throughout the year.Key Indicators 2022 2023 2024

Dividend per 10 Shares

(Tax Included) 3.99 5 6

Cash Dividend Amount 47893302.82 59941393.50 71813865.60

(Tax Included)

Proportion of Cash

DividendAmount in Total 23.22% 35.03% 38.86%

Profit Distribution

29 30Huate Gas dedicates itself to resource conservation and environmental protection

actively implements green and low-carbon development strategies and bravely copes

with the challenges from climate change. The Company has always observed

environmental protection regulations and continuously optimized its environmental

Our Concept management framework thereby becoming an exemplary enterprise in the industry

that makes efficient use of resources and stays in harmony with the environment.● Response to Climate Change ● Rational Allocation of Resources

Environment ●Environmental Compliance Management ● Persisting in the Green OperationOur Actions

Response to Climate Change ｜ Environmental Compliance Management SDGs

Rational Allocation of Resources｜ Persisting in the Green Operation

Response to Climate Change

Governance

Amid the accelerated evolution of global climate governance and the restructuring of the industrial pattern by the low-carbon

economy Huate Gas has incorporated it into its core governance agenda and formulated the Management Measures for Responding to

Climate Change. Driven by top-level design the Company promotes green transformation and systematically responds to climate

challenges through a three-in-one governance pattern "Strategy - Implementation - Supervision" injecting resilience into its

sustainable competitiveness.

31 32Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Links

Energy Conservation Leading Group Financial Impact Proba- Impact

Risk Type Description of the Magni- Range Value CountermeasuresImpact bility tude Chain

Position Person in Charge Responsibilities

● Responsible for researching and making decisions on major energy conservation issues 1.Inflict damage on premises and facilities

1.Implement chemical zoning manage-

of production bases in Guangdong and ment to prevent secondary disasters

and regularly listening to the work reports from deputy group leaders and members; Jiangsu disrupt employees' commuting caused by reactions after leakage and

and normal work and restrict logistics make use of high-quality chemical

Group Leader General Manager ● Formulate work requirements for promoting energy conservation and energy conditions leading to production interrup- storage containers.management and put forward specific energy conservation goals of the Company to the tion and thus affecting revenue. 2.Formulate the Comprehensive

energy conservation group. 2.Some chemical raw materials stored in Emergency Plan for Production Safety

the Company's factory area pose safety Cost Up- Accidents and build a systematic

Extreme and environmental risks under extreme

Increase stream standardized and institutionalized response

● Regularly inspect the implementation of energy conservation measures in departments weather conditions. Some of them may Short-High High Opera- mechanism for typhoons and rainstorms.and preside over a monthly routine meeting on energy management work; Weather lead to fires and explosions which will not

Revenue term

Decrease tion 3.Store up sufficient emergency supplies just directly cause financial losses but

Deputy Group Operation Directort and establish tight cooperation with local ● Formulate a performance assessment method with clear rewards and punishments; may result in fines and compensations. emergency rescue agencies to ensure that

Leadert 3.Hazardous chemicals in storage and external support is timely given in case of

● Ensure the utilization of those renovation funds for the energy conservation plan. transportation may leak due to broken accidents.package or improper handling during extreme 4.Set up cofferdams emergency pools and

● Responsible for specific energy management promoting the implementation of the weather events which will in turn cause air other facilities in the factory area to prevent

water and soil pollution and affect the normal

Company's energy efficiency improvement energy conservation planning energy leaked chemicals from spreading outside life of surrounding residents. the factory area.conservation training and energy conservation publicity;

Members Department Managers The chemical manufacturing industry has 1.Keep abreast of national and local

● Deal with the relationship between daily production and energy conservation renovation to deal with the predicament in which disclosure policies & regulations on

ensure the schedule-based maintenance and renovation of energy conservation projects greenhouse gas emission and disclosure greenhouse gas emissions and timely

policies are continuously tightened. The interpret policy changes and prepare for

and guarantee the successful completion of renovation projects; Policy requirement for carbon information Cost Medi- Down-High High um-te compliant disclosure.disclosure leads to increase of the account- Increase stream

● Do a good job in the Company's energy conservation training and energy conservation publicity.。 Risk ing cost and failure to meet the require- rm 2.Disclose in detail information onment will affect the Company's reputation. greenhouse gas emissions in the Company's

In overseas markets carbon tariffs will annual sustainable development report as per

affect profits. the requirements of relevant regulations.Upgraded Semiconductor customers require the Medi-

● Low-Carbon Publicity Customer supply chain to provide carbon footprint Cost Opera- Optimize the gas production process to

Require- certification pushing the low-carbon Increase Medium M e dium

um-te

rm tion bring down carbon emissions.transformation of the production process.Focusing on the corporate development strategy Huate Gas actively conducts energy conservation and carbon reduction ments

training & publicity work makes every effort to urge employees to develop good habits of spontaneously taking actions for

carbon reduction and ensures the fulfillment of the Company's development goals.In addition the Company attaches great importance to low-carbon operation. It always takes "Conserving Resources Eliminat- Impact Linksing Waste" as the guiding ideology in routine work keeps advocating the green office motto “Low-carbon Economy Energy Opportunity Financial Proba- Impact Description of the CountermeasuresConservation Consumption Reduction” among employees and strictly controls the power consumption of lighting and electri- Type Impact bility Magni- Range Value tude Chain

cal equipment in the office area. Besides that the Company encourages employees to put energy conservation into practice

With the advancement of green develop-

and enhances employees' awareness of energy conservation and emission reduction. The Company also organizes activities ment the demands for specialty gases from

related to energy conservation and carbon reduction at regular intervals in order to deepen employees' understanding of the downstream industries such as PV and new Revenue

energy are increasing on a gradual basis.significance of energy conservation and emission reduction and to urge the enterprise to achieve the carbon neutrality goal Amid this backdrop enterprises will explore Inecrease

in a more efficient manner. new market opportunities via development

Keep increasing investment in R&D to

Corporate

Market of relevant products. In addition the upgrad-

Opera- promote the technological upgrading

Long-

Opportunity ing of carbon reduction technologies boosts

Reputation

Enhance Medium M e dium tionDow

of gas products as a way to meet the

the optimization of the production process term rapidly-changing market demands

leading to energy conservation and consump- nstream especially in terms of green gases and

tion reduction which not only brings down Market low-carbon technologies.Strategy costs but also meets environmental protection Share

requirements and attracts more customers Expansion

The production process of electronic specialty gases usually involves high carbon emission and the emission sources are complex. With with strong environmental awareness to tap the new market.the ever-increasing market demands for electronic specialty gases failure in effective control of carbon emissions will lead to further

Since the state is vigorously promoting

hike of the total carbon emissions in the industry. This not only goes against the national "Dual Carbon" strategy but likely triggers policy green development support policies and

constraints such as carbon tariff thereby raising the Company's operating costs. Huate Gas analyzed both risks and opportunities incentive mechanisms for renewable

Energy energy have been successively put in Carry out technological transformation on

referred to studies of climate macro environment industrial policies etc. and took into account its business realities to assess the place providing opportunities for the Cost Long- Opera- energy conservation and keep exploring Structure High Medium appropriate opportunities for application

impact of climate change on the corporate business. Then the Company incorporated the assessment results into the strategic Company to successfully adopt renewable Decrease term tionOpportunity energy. By adjusting the energy consump- of renewable energy in production and

resilience planning and accordingly adjusted its business development strategy and resource allocation which helped significantly tion structure and improving energy operation of the Company.enhance its adaptability and resilience in responding to climate change. efficiency the Company effectively brings down greenhouse gas emissions.

3334

TransformationRisk Physical RiskGuangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Management of Impacts

Risks and Opportunities Highlight

To address the potential risks and opportunities brought about by climate change Huate Gas has incorporated climate risks into the Amidst the global carbon neutrality strategy Huate Gas has focused on the semiconductor and new energy sectors successfully

Group's risk management system. It has established the corporate climate risk assessment & management process mechanism and developing two innovative products—hexafluoro-13-butadiene (C4F6) and disilane (Si2H6)—which are poised for mass production.exercised a closed-loop management for climate risk identification assessment response and improvement. These breakthroughs provide critical material support for the low-carbon transition of industrial supply chains.Internal and external

factors requirements and Identification and Measures for determination of risks and responding to risks Updating of risks and expectations of opportunities and opportunities opportunities Products Drive the Green Transformation of the Semiconductor Industry.interested parties

When identifying and deter- Based on macro policies regulatory According to the risk The Company will take into As a groundbreaking alternative to traditional PFCs C4F6 replaces

mining the Company's climate requirements and the status quo of analysis results and account internal goals and CF4 in the dry process of KrF laser sharp etching for semiconductor

risks and opportunities inter- the industry methods including ques- based on the risk external factors supervise the capacitor patterning demonstrating exceptional environmental

nal and external factors with tionnaire group discussion expert cause and tolerance implementation of climate advantages in advanced semiconductor manufacturing:

an impact on the Company's counseling scenario analysis policy weigh risks and ben- change risk & opportunity ●Outstanding Climate Benefits:

daily operation business analysis comparison with industry efits and choose risk response measures and eval- Features the lowest global warming potential (GWP < 10) and

model financial status and benchmarks and interview etc. are response plans. uate the effectiveness of the shortest atmospheric lifetime (<1 day) among perfluorinated gases

the external environment and adopted to screen out the climate risk measures. achieving over 90% reduction in greenhouse gas emissions

society as well as the require- points and opportunity points that the compared to conventional CF4. The product has

ments of interested parties Company may face for now. Next-Generation To date C4F6 may be the only viable substitute that meets both already been supplied

should be taken into account. Environmentally

C4F6 precise etching requirements and emission reduction targets. to and implemented

Friendly Etching by domestic

Gases ●High Selectivity Precision Anisotropy and Etching Rate: Superior to semiconductor clients.Indicators and Goals traditional PFCs in etching narrow-linewidth circuits enabling finer

microstructures.KPI UOM 2024 2023 2022 ●Application in High Aspect Ratio Processes: Primarily used in 3D

NAND etching with surging demand as layer counts increase in

Total 16027.13 14794. 35 12668. 88 memory architectures.Greenhouse Gas ●Enhanced Selectivity Ratio for Photoresist and Silicon

Scope 1 tCO2e 7728. 23 9017 69 /

Emissions Nitride:Reduces photoresist consumption and silicon nitride damage

Scope 2 8298. 90 5776. 66 / improving chip yield and supporting the miniaturization of

high-aspect-ratio structures.Total 11.49 9.86 8.45

Energy-Efficient Materials Empower the Clean Energy Revolution

Greenhouse Gas tCO2e/1 million

Scope 1 5.54 6.01 /

Emission Intensity yuan of Revenue ● Solar Cell Production:In amorphous silicon wafer deposition Si2H6

Scope 2 5.94 3.85 / achieves significantly faster deposition rates compared to silane

Key Materials for (SiH4) while reducing process temperatures by 200–300°C. Small-scale production

Total 5427.74 / / Low-Carbon ● Ion Implantation:As an ion source disilane enables sustained plasma has commenced with

Total Energy Semiconductor Si2H6 ignition and delivers higher ion beam intensity outperforming alternative

the product already in

Direct Energy tce 3159.37 / / Manufacturing pilot adoption by select

Consumption gases in precision and efficiency.and Photovoltaic

2268.37 / / ● Advanced Semiconductor Fabrication:With unique applications

clients and undergoing

Indirect Energy Upgrades disilane has emerged as a superior silicon source gas for sub-28nm certification by others.Total 3.89 / / processes particularly in cutting-edge node manufacturing.Energy

Consumption Direct Energy tce/1 million yuan 2.27 / /

of Revenue Through continuous innovation breakthroughs Huate Gas has established a low-carbon materials matrix spanning semiconductor

Intensity 1.63 / / manufacturing and clean energy sectors delivering practical solutions to accelerate energy conservation and emission reduction across Indirect Energy

the global electronics supply chain.

35 36Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Environmental Compliance Management ISO 14001:2015 Environmental Management System Authentication Certificate

Governance

By persisting in the principles of conservation protection and restoration and focusing on environmental protection and ecological

civilization construction Huate Gas makes every effort to grow into a resource-conserving and environment-friendly enterprise ensuring

that the development process is in harmony with ecological protection.KPI

During the reporting period the total investment in environmental protection was CNY 1.4066 million;

The synchronous operation rate of environmental protection facilities hit 100%;

The implementation rate of the "Three Simultaneous" for construction projects in terms of environmental protection was 100%.To thoroughly implement the environmental protection concept properly handle the balance between production & operation and the

ecological environment and resolve existing and potential ecological & environment problems the Company has actively studied and

strictly implemented environmental protection regulations continuously improved environmental protection strategies and rules and Guangdong Huate Chenzhou Xiangneng

kept incorporating green and low-carbon concepts and technologies into its production and operation. As a result we have developed Gas Co. Ltd. Semiconductor Gas Co. Ltd.a comprehensive set of environmental management rules and regulations that have been compiled into reference materials in order to

promote the green development of the enterprise.Besides the Company has established an environmental management architecture with the general manager as the top leader and Guangdong South China

decision maker for safety and environmental protection and the HSE Department as the hub for connecting the heads of departments. Specialty Gas Research Dongguan High Energy

Institute Co. Ltd. Industrial Gas Co. Ltd.Principal person in charge

(General Manager) To further strengthen environmental protection supervision and management specify the environmental protection behaviors of the

Company's employees and enhance their awareness of environmental protection the Company has specially formulated the Environ-

mental Protection Reward and Punishment Management System. Employees who violate environmental protection regulations will be

penalized according to the severity of the violations while those who have made outstanding contributions in environmental manage-

Deputy person in charge. ment will be rewarded.Environmental Information Disclosure

HSE Dept.In strict accordance with relevant regulations the Company reports in detail to the environmental protection authority of the local

people's government on the operation of facilities at regular intervals. The report covers key information such as the operation status

of facilities pollutant discharges sampling operation monitoring details and continuous operation records. Aside from that based on

the principle of openness and transparency the Company makes public the operation status of facilities daily monitoring data and

relevant management rules and takes the initiative to accept public supervision.For environmental protection supervision work the Company actively assists in the supervision and inspection by the environmental

protection authority of the local people's government faithfully reports relevant situations and provides the required documents in a

complete manner. It resolutely prohibits any excuse to hinder the on-site inspections by the environmental protection department and

strictly refrains from concealing the real situation or submitting false materials.Environmental Management Architecture

3738

Audit Dept.Securities Dept.QC Dept.Fiance Dept.Sales Dept.International

Business Dept.Production Dept

Procurement

Dept.H. R Dept.R&D Center

Logistics Dept.Investment

Planning Dept.IT Dept.On-site Gas

Production Dept.Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Strategy

The pressure from pollutant emissions in the electronic specialty gas industry should not be underestimated. Huate Gas analyzed both

risks and opportunities referred to relevant laws & regulations and local pollutant discharge standards and took into account its produc-

tion and business realities to systematically and accurately identify and assess environmental compliance issues which provided a

strong reference for subsequent improvements. The Company holds fast to the bottom line of environmental protection in economic

development and vigorously promotes its long-term sustainable development.Impact Links of

Risk Financial Proba- Impact

Description Magni- the Value Countermeasures

Type Impact bility Range

tude Chain

1.Regularly conduct monitoring and management over

Leakage risks are mainly caused by environmental risk receptors substances of environmental risk

chemical spills fire accidents and sources environmental risk units and major risk sources;

improper treatment of wastewater regularly analyze and review historical sudden environmental

and waste gas. Chemical spills may accidents and carry out prevention and control over sudden

lead to pollutants’ entry into surface environmental incidents.water through the rainwater 2.Formulate rules for inspection of hazard sources arrange

pipeline. Hazardous waste such as personnel for regular inspections and install 24-hour monitoring

firefighting sand which has not Cost devices in the storage tank area; recruit full-time personnel to

been properly handled may affect Increase manage hazardous waste clarify job responsibilities and give

Leakage the environment. After being

Risk volatilized spilled chemicals may Corporate Low High Short-t

priority to safety precautions.Operation

also pollute the atmosphere. In the Reputation erm 3.Set up fire hydrants at corresponding positions in the

event of a fire accident firefighting Damage warehouse and storage tank area; build an accident emergency

wastewater with chemicals may be pool equipped with valves and water pumps; in case of leaks of

Disclose environmental information as required. discharged into surface water methyl ethyl ketone acetone etc. the leaked substances can be

through the rainwater pipeline and stored in the accident emergency pool to prevent them from

a large amount of toxic and harmful leaking outside the factory area.smoke will be generated to pollute 4.Formulate exhaustive emergency response plan and

the air. emergency response system; timely stop filling and other

production processes after an accident occurs to ensure that

the impact will not be further expanded.Enhancement of Environmental 1.The Company has procured the national pollutant discharge

Protection Awareness permit and environmental impact assessment approval and put Due to the government's stricter its environmental emergency response plan on record. Also the

pollutant emission standards or Company has established a dynamic policy tracking mechanism

Environ- newly-issued environmental to keep abreast of environmental protection regulations.To make the Company's employees clearly understand the mental protection regulations the Cost

Policy Risk Company needs to upgrade Medium High Medi- Operation 2.Set aside special environmental protection funds for

relevance and importance of their activities or jobs to the environ- equipment or improve process to Increase um-term equipment upgrading and technological transformation.meet the new requirements which

mental management system and contribute to the achievement 3.Push ahead with the R&D of green technologies develop new increases the compliance costs. processes upgrade the equipment through technological

of management goals the Company has formulated the Environ- transformation and seek raw and auxiliary materials for replacement of existing hazardous substances as a way to bring

mental Protection Education Rules and established the Employee down long-term compliance costs.Environmental Protection Education Management Archive. In

addition the Company organizes theme-based training on Cost 1.Improve the information disclosure system strengthen internal

Increase audit and compliance inspection avoid information

environmental management at regular intervals and further discrepancies and ensure the accuracy and timeliness of data.Environ- Failure to disclose environmental Corporate

deepens understanding and recognition of environmental mental data in a timely accurate and Reputation 2.Take the initiative to disclose the progress of environmental

Information complete manner may trigger Damage High High Short- Operation protection governance to enhance transparency and public trust.management goals among employees of various departments Disclosure regulatory penalties or a crisis of term

Risk investor confidence. 3.Require and urge environmental protection management and

through various means such as regular meeting topic study and Financing statistics personnel to study relevant laws and regulations Ability enhance their awareness about the rule of law and

cultural newsletters in daily work in addition to strengthening the DecreaseTraining on the Standardized environmental protection and strive to improve their professional abilities and business level.communication. Management of Hazardous Waste

Oppor- Impact Links of

KPI tunity

Financial Proba- Impact

Description Magni- the Value Countermeasures

Type Impact bility Range

tude Chain

With the tightening of laws Through sustained R&D advancements the company has

regulations and policies related to introduced innovative products such as germane (GeH?) and

During the reporting period the Company organized 6 environmental protection training sessions. Market pollution prevention and control the Operation disilane (Si2H?) now gradually scaling production while steadily

Opportuni- demands of the downstream market Revenue Long- Down- advancing projects like hexafluoro-13-butadiene (C4F6) and

ty for pollutant emission reduction has Increase

Medium Medium term stream semiconductor precursors. These solutions not only meet the increased creating new opportuni- precision manufacturing demands of downstream clients but

ties for the Company to develop also deliver enhanced environmental performance aligning with

environment-friendly products. global sustainability goals.

39 40Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Management of Impacts Risks

and Opportunities

Environmental Emergency Risk Management System

Emergency Links Specific Operations

Command H.Q.Analyze the evolution law of possible environmental accidents as well as the impact of natural

The Company has been continuously improving its environmen- Risk Identification disasters and identify environmental hazard factors.tal risk prevention & control system and constantly refining its Emergency Office

emergency measure system. It has formulated the Emergency Analyze the relationship with the surrounding residents organizations and regional environments

Response Plan of Huate Gas established an emergency organiza- Risk Analysis that may be affected build scenarios of sudden environmental events and their consequences

tion and built an environmental emergency response system and determine the environmental risk level.that enables three-level coordination among the Company/sur- Regularly inspect emergency resources that are available at the first time such as environmental

rounding enterprises the district and the city. In this way the emergency team equipment materials monitoring equipment pollutant emergency treatment

Company will minimize the impact of incidents and control the Risk Response capabilities and pollutant emergency storage site as well as those emergency resources that

pollution level at the fastest response speed and with the least may be provided as assistance or contractual assistance so as to ensure the ability to respond

resource input which will reduce the Company's losses to the to environmental risks.greatest extent and effectively assure environmental safety and

the enterprise’s stable development. The Company conducts management reviews at regular intervals strictly examines and reviews Prevention and the environmental risk management system and timely re-evaluates and revises the control

Emergency Rescue Organizational Rectification procedures to ensure their adequacy and applicability.Structure of Huate Gas

Emergency Plan of Foshan

Emergency Drills

City for Sudden

Environmental Incidents To respond effectively to environmental protection risk accidents

the Company has established an emergency rescue team with the

engineering and production operators as the backbone. After the

Emergency Response Plan of founding of the team the Company organizes professional knowl-

Nanhai District for Sudden edge training on safety and rescue once a month and arranges

Environmental Incidents environmental protection technicians to give lectures. In addition

the Company carries out drills and assessments at regular

intervals to continuously improve the team's actual combat ability

Emergency Plan of of Guangdong Emergency Plan of of Guangdong Emergency Rescue Plan for

and professional literary ensuring that the rescue work can be

Huate Gas Co. Ltd. for Production Huate Gas Co. Ltd. for Sudden Other Sudden Situations of

performed quickly and efficiently in the case of accidents.Safety Accidents Environmental Incidents Surrounding Enterprises Emergency Response Drill for Ammonia Cylinder

Leakage and Fire Incident

Emergency Plan System of the Company

Troubleshooting of Potential Environmental Impact Hazards

In compliance with the principle of "Prevention First" and in accordance with the requirements of the ISO 14001 environmental management

system the Company precisely conducts environmental risk inspections and assessments. It has formulated a series of environmental risk The Company has established a responsibility system for the troubleshooting of environmental hidden hazards. In this system the

management rules such as the Procedure for the Control of Responses to Risks and Opportunities the Procedure for the Control of Identification of Environmental Environmental Protection Health and Safety Department is the responsible organ and the department manager leads the technicians

Factors and Their Importance Degrees and the Procedure for Identification of Hazard Sources Risk Evaluation and Determination of Control Measures. Within the scope to work with relevant departments to carry out the investigation and elimination of environmental hidden hazards and establish and

of its environmental management system the Company fully examines all relevant activities covering the environmental impacts generated at implement the post responsibility system level by level.those links under the Company’s control influence and consideration and throughout the life cycle from product procurement production

delivery to after-sales service.

4142

On-site Disposal Team

Comprehensive

Coordination Group

Emergency

Monitoring Team

Logistics

Support TeamGuangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Indicators and Goals Pollution Prevention and Ecosystem Protection

Huate Gas earnestly performs its environmental responsibilities and actively fulfills its promise of being environment-friendly. The In strict accordance with the requirements of relevant laws and regulations the Company continuously strengthens the management

Company keeps improving its environmental management system increases investment in environmental protection and focuses on over environmental emissions to ensure that its production and operation conform to relevant laws regulations and standards.key indicators such as emission management and accident management to formulate environmental compliance management goals in

line with its own development in order to forge ahead towards green and sustainable development.Environmental Pollution Management Measures

The Environmental Compliance Management Goals of

Huate Gas in 2024 and Their Achievement

010203

Goal Planning Goal Control Achieved (Yes/No)

Put in place environmental monitoring Strictly manage the operation record Transfer hazardous waste to qualified

work focus on monitoring various ledgers on environmental protection entities for disposal.

0 gas/pressure vessel explosion and no major pollution sources and keep records facilities including the raw/auxiliary

No leakage accidents without any falsification. Appoint a third materials purchase application and

leakage accidents. party to test exhaust gas wastewater storage management ledgers the

etc. on a quarterly basis. hazardous waste collection & handover

records the transfer and handover

records and the records on sudden

0 annual fire accidents No fire accidents environmental events.

Legal transfer of hazardous waste to qualified

No leakage accidents

entities for disposal All Achieved 04 05

The noise emissions at the factory boundary Each production department and each Implement the pollution accident reporting No excessive emissions work team shall maintain equipment system. When a pollution accident occurs

meet the standards. and facilities to guard against leakage submit a preliminary report on the occurrence

dripping spillage and seepage. of the accident to the district-level

environmental authority.To ensure the steady progress of environmental protection work and the scheduled completion of environmental protection goals

strengthen the leadership and management in environmental protection work safeguard the health of employees in production and

labor keep the environment from being polluted and effectively guard against the occurrence of environmental pollution

accidents/incidents the Company has formulated the Environmental Responsibility System and the Environmental Protection Target Responsibility

System living up to clear delimitation of responsibilities from top to bottom and across all departments.Indicators UOM 2024 2023

Wastewater Discharge t 59﹐885 46﹐333

Wastewater Pollutants t 10060 9159

Exhaust Gas Discharge t 1502.3 1702.1

Compliance Disposal Rate of Reneral Industrial

Solid Waste % 100 100

Compliance Disposal Rate of Hazardous Waster % 100 100

Training on Three Wastes (Wastewater Emissions Times 6 6

Solid Waste) Discharge and Disposal

Environmental Data Disclosure Non-Compliance Times 0 0 Third-party inspection report

Incident

43 44Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Wastewater Management Exhaust Gas Management

The Company strictly implements the requirements of relevant policies and regulations puts in place measures for prevention and Huate Gas has continuously strengthened the treatment of air pollution. It adopted a combination of classified collection high-efficiency

control of wastewater pollution scientifically improves the sewage treatment technologies and strictly prevents the occurrence of treatment equipment and refined management to bring down the emissions of exhaust gas. Also the Company made use of spray purifica-

environmental pollution accidents such as “Leakage Spillage Dripping and Seepage”. It requires all relevant departments and tion tower to recycle and treat exhaust gas strictly controlling the air pollutants generated during its production and operation processes.workshops to strictly follow the operating procedures rigorously manage and maintain the treatment facilities and record the operation

ledgers ensuring that the wastewater treatment meets the standards for discharge.● For raw material procurement and storage strict measures are taken for volatile raw materials:

The Company's main production wastewater sources comprise production wastewater initial rainwater domestic sewage (including ● Closed facilities must be used for storage for example storage tank with breathing valve and

employees' domestic sewage and kitchen wastewater) and wastewater from the cleaning of 12 mL air bomb bottles. The Company has Source Control pressure regulating device or internal floating roof storage tanks adopted.built domestic sewage treatment and utilization facilities as well as industrial wastewater treatment and utilization facilities to conduct ● During the loading and unloading process recycling and treatment measures shall be taken to

separate treatment for clean and dirty water and for rainwater and sewage. The HSE Department is responsible for conducting bring down the generation of exhaust gas and reduce the possibility of exhaust gas emissions from the source.self-monitoring over the enterprise's wastewater discharge outlets at regular or irregular intervals and full-time HSE administrators take

● During the transportation and storage of volatile raw materials and products gases discharged

samples of the workshop flushing wastewater on a regular basis. Excessive discharge is strictly prohibited. Transportation from safety valves pipelines and containers must be recycled or other reasonable and effective

Storage and treatment measures shall be adopted.Treatment ● When sampling and analyzing online closed-circuit sampling should be adopted and the leakage KPI rate of static sealing points should be strictly controlled within 0.5‰ to guard against gas leakage.Process Production Exhaust ● Exhaust gases discharged from all the exhaust ports of the production equipment shall be

Management completely collected and handled via recycling absorption combustion and other measures

During the reporting period wastewater discharged by the Company totaled 59885 tons with recycled wastewater totaling Gas Treatment

and Control and then discharged iin line with the standards.

10060 tons. ● For the facilities that emit chemical odors such as malodorous pollutants sealed treatment shall

Odor Treatment be adopted and the malodorous pollutants shall be purified and recycled to ensure that there

is no chemical odor outside the enterprise's factory boundary.● The Company conducts self-monitoring of smoke and dust on its own at regular or irregular

废水排放指标 Self-monitoring intervals in order to keep track of the pollutant discharge concentration and total discharges and accurately fills in the environmental protection statistical forms on a timely basis.● Appoint a third-party environmental protection monitoring agency to monitor exhaust gas

Type Treatment Process across the Company at least once a year. The monitoring data will serve as an important basis Entrusted Monitoring

Monitoring for sum-up of pollutant discharges at the end of the year and will be registered and published

of Sewage Pre-treatment Process Treatment Process Discharge on the monitoring board. Ledgers will be established.and

Supervision ● Accept the supervision and on-site inspection by the environmental protection authority of the

Pretreated by local people's government faithfully report the situation and provide information make public

Domestic Sewage Public Supervision

three-stage septic tank the facility operation status daily monitoring data and various management rules and accept

After meeting the local public supervision.Treated by the process of standards of Guangdong

Pretreated by oil and

Kitchen Wastewater "Hydrolysis acidification + Province the wastewater is

slag separation tank contact oxidation + discharged into the Hegui To minimize the impact on the local environment where the company operates the Company monitors its exhaust gas emissions based

sedimentation + disinfection" Sewage Treatment Plant through on its production process and realities. The monitoring is performed at least four times a year and each monitoring is conducted when

the Lishui municipal pipeline. the production is relatively stable.Production Sewage

Treated by the self-built sewage The treated water is recycled

KPi

treatment facilities (with the and reused for the cleaning

Cleaning Wastewater treatment process of line/equipment cooling make-up

coagulating sedimentation + water and water spray make-up

During the reporting period the exhaust gas discharged by the Company totaled 1502.3 tons.A/O biochemical treatment+ water without being discharged

membrane bioreactor). externally.During the reporting period the Company continuously carried out wastewater recycling and utilization vigorously developed advanced

industrial wastewater treatment technologies such as the recycling of RO concentrated water optimized the enterprise's wastewater

management level and promoted the work for reduction of wastewater and sewage emissions.

45 46Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Waste Management Solid Waste Discharge Indicators

Based on relevant laws regulations and industry standards Huate Gas has formulated the Procedure for the Control of Waste Management to

implement the life-cycle management of the waste generated during the production and operation process and clarify the responsibili- Generation Volume Generation Volume in 2024 (t) in 2023 (t) Treatment Process

ties of each department and each position in each link. In order to achieve precise control over waste the Company has established a ●Domestic and office solid waste: it will be

standardized waste management ledger to record in detail information such as the waste type quantity flow direction storage utiliza- Generation 107.49 82.26 uniformly collected and then handed over to

tion and disposal. In addition the Company has adopted information technology means to realize the traceability and availability of Volume the sanitation department for disposal.General

waste information. ●Industrial solid waste: it will be uniformly Waste Disposal stored up in the general solid waste

107.4982.26

Volume warehouse and recycled by general waste

recycling companies.Generation ●After being classified collected and stored in

42.2142.21

Volume the hazardous waste warehouse hazardous

The temporary storage yards for solid waste within the factory shall be built in Hazardous waste will be handed over to professional

Facility accordance with the Standard for Pollution Control on the Storage and Disposal Site for Waste Disposal ●Environment-friendly recycling and disposal

Construction General Industrial Solid Wastes (GB18599) and the 42.21 42.21Standard for Pollution Control on Volume agencies for disposal at regular intervals.Hazardous Waste Storage (GB18597).Strictly classify the generated solid hazardous wastes according to the National Noise Management

Catalogue of Hazardous Wastes (2015).Classified When solid waste is temporarily stored on site airtight facilities shall be set up for During the corporate operation Huate Gas’s noise mainly comes from the operation of vehicles and mechanical equipment. To

Storage guarding against leakage for preventing chemical odor gases from volatilizing and for

recycling and treating sewage & exhaust gas. effectively alleviate the adverse impact of noise on the surrounding acoustic environment the Company in accordance with relevant

No other articles shall be placed at the hazardous waste storage points and relevant regulations conducts precise monitoring over the ambient noise at the factory boundary on a regular basis. In addition the Company

hazardous waste signs shall be erected. prefers low-noise and environment-friendly equipment. For the existing equipment the Company installs professional noise reduction

facilities such as high-efficiency sound insulation enclosure and vibration-damping pad to effectively suppress the noise generation

and transmission aiming to ensure that the noise at the factory boundary complies with the Class 2 standards of the Emission Standard

Timely Solid waste shall be timely transferred to qualified third parties for removal and for Industrial Enterprises Noise at Boundary (GB12348-2008).Removal and disposal in order to ensure the safe disposal of industrial solid waste and hazard-

Transportation ous waste and avoid the environmental pollution risks resulting from the

long-term accumulation of solid waste within the factory area.Protection of Ecosystems and Biodiversity

The Company with a high sense of responsibility makes every effort to avoid any form of damage to the marine and terrestrial

Make public reports on waste disposal at regular intervals with contents covering key

Monitoring and ecological environments. It ensures that all projects are implemented under an eco-friendly framework and in an orderly manner.information such as total solid wastes generated disposal methods and disposalSupervision effects and take the initiative to accept the supervision from all walks of life. During the planning and implementation of investment projects Huate Gas always takes “mitigation of the negative environmentalimpact” as a core consideration factor. The Company resolutely implements the "Three Simultaneous" principle (namely the environ-

mental protection facilities are designed constructed and put into use simultaneously with the main project) so as to control the

impact of project construction on the environment from the source. To keep abreast of the impact of the Company's operation on

the surrounding ecology and environment the Company performs all-around inspections on the ecology and environment at the

Comprehensive For the solid waste generated in the production process comprehensive utiliza- boundary of the corporate factory and within a 5-kilometer radius at regular intervals with inspections covering multiple domains

Utilization tion shall be first taken into account. such as surface water groundwater the atmosphere and the acoustic environment. By doing so the Company strictly ensures that

the environmental quality meets the relevant national and local standards.During the reporting period neither the production bases nor the operation sites of the Company were located in or around nature

reserves. Results from comprehensive monitoring and evaluation show that no significant impact of the Company's operation

activities on biodiversity has been found implying that the Company has taken effective measures to maintain the balance and stabil-

ity of the ecosystem.

47 48Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Rational Distribution of Resources

Energy Utilization

The Company is committed to reducing the consumption of energy resources and improving the energy use efficiency in operations.In strict accordance with relevant laws and regulations such as the Energy Conservation Law of the People's Republic of China the Company

centering on the energy management policy "Compliance with regulations clean production hike of energy efficiency and continuous

improvement" actively adopts new energy-saving technologies processes and materials puts in place energy efficiency improvement

plans and ensures the effective and efficient operation of its energy management.The Utilization of Various Types of Energy in 2024

Circulating water equipment

in the factory area Circulating water cooler

20242023

KPI

2407.83 2762.41 During the reporting period the total water consumption was 156696 tons.Diesel oil（t）

Direct Energy

Liquefied Petroleum

Gas（t） 87.99 111.58 Circular Economy

The Company complies with the relevant requirements of the Circular Economy Promotion Law of the People's Republic of China and makes every

effort to improve the utilization efficiency of various resources such as water resources electric power resources and office supplies

through practical measures. On the one hand it ensures the stability of resource supply and on the other hand it reduces resource

Indirect Energy Purchased 18441995.72 10129154.65 waste ensures the reasonable distribution of resources and actively practices the concept of circular economy. Through the efficient Electricity（kWh）

utilization of resources the Company promotes the sustainable development of the enterprise.After each use the The remaining gas Note: The above energy consumption is on a consolidated basis. cylinders returned by Domestic sewage is The inspection water protective sleeves of customers are sent to the Hegui used in the gas gas cylinders are recycled and reused Industrial Park Sewage cylinder inspection reused after passing after passing Treatment Plant of the station is recycled standards in standards in municipality for after being treated by inspection and treatment and the sewage treatment

Utilization of Water Resources maintenance.inspection and

treatment. recycling. facilities.The Company attaches great importance to water resource management. By upholding the concept of "Cherishing every drop of water"

the Company stresses the everyday maintenance and management of water supply equipment & pipelines and puts an end to the

"Continuous Water Flow" in production and work ensuring the reasonable use of water resources. Recycled water is

In summer the

used for the cooling circulating water The adsorbents used

The office paper that is

coolers are used to in the adsorbing printed on only one side system of the

production equipment. cool down the device are recycled.is reused after being

production area. reviewed.

49 50Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Green Operation ● Advocate the use of green office supplies promote the use of recycled products such as environ-

ment-friendly recycled paper restrict the use of disposable office supplies such as paper cup and

The Company actively practices the concept of green office aiming to reduce resource consumption and promote environmental plastic bag prohibit the use of non-degradable disposable plastic products and advocate the use

sustainable development. Through a series of practical and effective measures such as implementing energy conservation and emission of porcelain cup or glass cup for guests and meetings.reduction fully promoting paperless office and strictly putting in place garbage classification and recycling the Company continuously

brings down carbon emissions and makes every effort to create an environment-friendly and energy-efficient office environment. All ● Make full use of and recycle office supplies.members of the Company work together to relieve the burden on the earth's ecology and jointly march towards a beautiful green and ● Promote electronic office in an all-around manner advocate paperless office and make full use

Office Supplies

low-carbon future. of platforms like Yukuaizheng App for the circulation of official documents. If paper version is

required print and copy the document on both sides of the paper and strictly control the number

of printed and distributed documents to effectively reduce paper consumption.● Strictly implement the mandatory procurement system for energy-saving and environment-friendly

products give priority to green products in procurement and refrain from purchasing energy-con-

suming products and equipment that are explicitly eliminated by the state or the city.● Quicken the pace to eliminate high-energy-consuming office equipment and actively promote ● Strictly manage the Company's vehicle usage implement the vehicle dispatch approval system

the application of high-efficiency and energy-saving new products and technologies. actively practice green travel and reduce the number of unnecessary office vehicle trips.● Strictly implement the air-conditioning temperature setting standards reasonably control the ● For renewal of office vehicles except for special work requirements only new-energy vehicles can

indoor temperature and ensure that the indoor air-conditioning temperature in summer shall be purchased; actively promote the construction of charging infrastructure.not stay below 26 degrees Celsius. ● Actively practice green travel methods and call on employees to ride bicycles or take public

Green Travel

● Energy-saving lamps are adopted for the lighting system. During office hours make full use of transportation tools as much as possible when commuting to work and traveling on business

natural light. When the light is insufficient adopt methods such as turning on the lights at living up to low-carbon travel whenever possible.intervals to reduce the power consumption of lighting equipment.Energy Consump

●

tion Management Reduce the working time of electrical appliances whenever possible; turn off the air conditioner ● Earnestly implement the Anti-food Waste Law of the People's Republic of China conduct

half an hour in advance before leaving the office or getting off work; turn off the lights when anti-food waste publicity and education on a regular basis guide cadres and employees to have

leaving the office or being away from the office for a long time; resolutely put an end to the a reasonable diet dine in a civilized manner save food object to waste actively practice the

use of lights during the daytime and lights that are always on. "Clean Plate" campaign and prevent waste on the tip of the tongue.● Strengthen the management over night lighting; timely adjust the switch time of night lighting ● The Company’s cafeteria shall implement anti-food waste measures for example establishing a

in the office area according to the season change and turn off unnecessary night lighting. mechanism for predicting the number of diners; making full use of food ingredients promoting

Except for important holidays and major celebration activities turn off the landscape lighting. the preparation of multiple dishes from one ingredient and multiple flavors from one dish to make

● Prohibit the use of mobile heating equipment electric stove and other high-power electrical the best use of every ingredient; provide scientific and refined meals and supply smaller and

appliances in the office to ensure safe electricity use and save energy. Avoiding Waste half-portioned dishes.● Strengthen the conservation of energy & resources stress the supervision and management over

the use of food ingredients water and electricity. Disposable chopsticks and tableware are not

provided for working meals.● Phase out old-fashioned water-using appliances and comprehensively promote the use of

●

water-saving appliances. Actively practice domestic garbage classification strictly implement the classification collection

transportation and disposal of domestic garbage.● Strengthen the daily maintenance and management to water-using equipment analyze the water

consumption at regular intervals and timely detect and resolve malfunctions and problems. ● Extensively organize volunteer service activities for domestic garbage classification actively

participate in setting an example for domestic garbage classification and resource recycling do a

● Instruct and guide cadres and employees to develop water-saving habits turn off the faucet in Garbage Classification good job in plastic pollution control and give full play to the exemplary and leading role.time after water use and resolutely put an end to “Continuous Water Flow”.Water Conservation ● For plant watering in the office area water-saving irrigation methods such as sprinkler irrigation

Management and drip irrigation are recommended and plants shall be watered in a scientific and timely ● Strengthen the publicity of energy resource conservation and ecological civilization construction

manner but irrigation by overmuch water is prohibited. actively carry out themed publicity activities such as the National Energy Conservation Publicity

● Advocate the use of recycled water and encourage the use of rainwater and reclaimed water for Week Low Carbon Day and Green Travel Publicity Month advocate a simple moderate green

plant watering. Cultivation of Trends and low-carbon production and lifestyle and cultivate a green ecological culture.

51 52Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

By insisting on the R&D motto "Continuous Innovation Pursuit of Excellence"

and taking the R&D of specialty gases as the core driving force the

Company implements the quality policy "Quality the foundation of an

enterprise's survival" keeps optimizing supplier resources and injects strong

Our Concept

impetus into the Company's sustainable development.● Innovation-Driven ● Supply Management

Product ● Quality Assurance ● Customer Service ManagementOur Actions ● Shoring up Information Defense Line

Innovation-Driven｜ Supply Management｜ Quality Assurance SDGs

Customer Service Management｜ Shoring up Information Defense Line

Innovation-Driven

Specializing in the R&D of specialty gases the Company insists on the R&D motto "Continuous Innovation Pursuit of Excellence" and

takes the R&D of specialty gases as the core driving force. It makes every effort to optimize the product line of electronic specialty

gases and helps expedite the localization process. Besides that the Company strengthens its cooperation with industries universities

and research institutes vowing to continuously improve the technical level and market competitiveness of products. In the meantime

it persists in the product development strategy centering on the R&D of specialty gases and holds fast to the path of replacement by

localized products.Governance

Huate Gas attaches great importance to R&D and innovation work. To standardize the design and development process of new

products strengthen the management and supervision over the project R&D process and ensure the orderly implementation of project

R&D the Company has formulated a series of rules such as the New Product Development Rules and the Project R&D Management Rules. That

helps standardize the product development process ensures the compliance of the new products’ technical indicators with the Compa-

ny and customers’ needs effectively improve the quality of new product development shorten the development duration and minimize

the Company's business risks.

53 54Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Strategy

In the rapidly-changing business environment R&D innovation is the key driving force for an enterprise to build core competitiveness.Amid the continuous upgrading of individualized and diversified market demands the Company keeps strengthening its R&D system

by gaining insights into technological trend keeping abreast of the market and responding to policy orientations. In the meantime the

Project Proposal Project Design Review Project Implementation Project Acceptance

Company is committed to building a high-quality R&D team and optimizing the innovation management mechanism in order to provide

a strong driving force for its sustainable development.Project R&D Process Impact Links of Risk Financial Proba- Impact

Description Magni- the Value Countermeasures

Type Impact bility Range

tude Chain

The changes in technology

the upgrading of products

Incentive Scheme or the aggravation of com-petition may lead to risks

for example a decline in 1.Continuously bring in new technologies and new

To cater for the market’s economic environment and its innovation & development needs the Company has formulated a series of rules Core the Company's market Revenue products that adapt to the changes in market

such as the R&D Personnel Performance Appraisal Methods and the Core Technical Personnel Project Payroll Management System. By optimizing Competi- share and user s ize Decrease Medi- demands enabling the Company to safeguard its

tiveness more- than-expected

High High um-term Upstream existing market position and competitiveness.resource allocation and incentive mechanisms the Company has significantly improved R&D efficiency stimulated the innovation vitality Cost Risk R & D i n ve s tmen t o r

of the R&D team and accelerated the commercialization of major sci-tech breakthrough and R&D achievements. less-than-expected R&D

Incerase 2.Continuously increase investment in R&D to ensure

process R&D failure the competitiveness of products.failure in commercialization

In addition to encourage employees to participate in technological innovation the Company has formulated innovation reward rules of technologieselimination

such as the Provisions on Project (Patent) Declaration Reward. It gives prize incentives to those who provide clues or suggestions on R&D of key equipment and

cut-throat competition.projects and implements once-for-all high rewards for innovation achievements with significant benefits or great significance fostering

a positive atmosphere that encourages and supports innovation.With the development of

the specialty gas indus-

try the competition for

talents within the indus-

Social Recognition Talent try is intensifying day by

Shortage day. Once core technical Revenue Decrease High High

Medi-

um-term Upstream

Provide R&D personnel with competitive salaries and

Risk personnel are lost it will incentives to enhance their sense of belonging.The Company as the only gas enterprise was conferred upon the "China Top Ten Electronic Chemical Materials Companies" for four inflict an adverse impact

consecutive sessions in 2017 2019 2021 and 2023. The Company ever won the Achievement Industrialization Prize (R&D and industrial- on the Company's prod-

uct R&D as well as its

ization of rare mixed lithography gases for integrated circuits) of the 6th "IC Innovation Award" sponsored by China Integrated Circuit stable development.Innovation Alliance(CICIA). It was also listed among China’s 5th batch of Specialized Refined Special and Novel "Little Giant" Enterpris-

es. Other honors and prizes won by the Company include "Guangdong Province Specialized Refined Special and Novel Small and

Medium-sized Enterprises" "Guangdong Province Innovative Small and Medium-sized Enterprises" "Guangdong Province Patent Award

- Excellence Prize" "Guangdong Province Manufacturing Single-item Champion" and "Foshan City's Leading Sci-tech Enterprise (Innova- Oppor- Impact Links of Financial Proba- Impact

tion Efficiency) in 2023". During the reporting period the Company won such honorary titles as "Advanced Unit for National Gas tunity Description Magni- the Value CountermeasuresImpact bility Range

Standardization in 2023". Type tude Chain

Amid the rise of new

technolgies it provides a 1.Cooperate with universities and scientific research

Talent Introduction brand-new market for Revenue Market Incerase institutions to intensify the efforts in R&D of new enterprises. By improving Medi-

Opportu- Medium High Upstream technologies.efficiency and expanding um-term

To cater for the martttttket’s economic environment and its innovation & development needs the Company has formulated scientific nity market share the Com- Cost

Decrease 2.Bring in and cultivate technical talents and build

talent introduction management rules. It comprehensively evaluates talents from multiple dimensions such as educational background pany promotes the rapid professional teams to support innovation.growth of business and

professional expertise and practical work experience in order to keep optimizing the talent structure and improve the efficiency in fosters competitive edge.human resource allocation.For introduction of R&D talents the Company recruits talents through multiple channels such as talent market college job fair and

internal referral. For outstanding talents the Company provides a more competitive salary system and flexible welfare policies to further

enhance its attraction to high-quality professional and technical talents and skilled talents injecting strong impetus into its innovation

and development.

55 56Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Impacts Risks and Opportunities Indicators and Goals

To effectively manage and control the risks in R&D and innovation the Company based on its operation realities conducts identification

and assessment of risks and opportunities at regular intervals. By comprehensively examining the potential risk factors in the R&D

process and implementing dynamic tracking and real-time monitoring of major risk events the Company has not just significantly

improved its ability in risk prevention and control but also provided a strong guarantee for technological innovation thus achieving the Innovation Achievements

dual goals of minimizing risks and maximizing innovation.Key Indicators UOM 2022 2023 2024

Links Specific Operations R&D investment Ten Thousand Yuan 6011.84 5042.88 489 2.15

Intellectual Property Rights

Take advantage of internal discussions expert counseling and comparison with industry

Risk Identification benchmarks to identify the risk factors related to technology market fund and talent during

Cumulative number of granted patents Items 172 213 243

the process of R&D and innovation. By patent type

Cumulative number of granted invention patents Items / 32 3 7

Cumulative number of granted utility model patents Items / 178 2 0 3

Risk Assessment Evaluate the impact of risks on R&D objective progress cost and quality. Other intellectual property right s

Cumulative number of trademarks Items 45 51 51

Leverage regular inspection data analysis and follow-up with key indicators to monitor the

Risk Monitoring risks related to R&D in real time and adjust countermeasures according to the real situation

to ensure the successful implementation of projects.KPI

● Formulate R&D norms and processes clarify the nodes for risk control and bring down As of the end of the reporting period the Company's R&D team comprised 172 members including 4 core technical personnel.the probability of risk occurrence.Risk Management

● Establish a risk management system enhance the risk awareness of managers at all levels

and implement risk management.Between 50 and 60

years old (including 50

years old excluding 60

Master's degree Ph.D years old) Over 60 years old

82121

Under 30 years

Between 40 and 50 old (excluding 30

years old (including 40 years old)

years old excluding

50 years old) 42

Below Bachelor's

bachelor's By Educational degree 37 By Age

degree Background

82

80

Between 30 and 40 years

old (including 30 years old

excluding 40 years old)

80

57 58Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Innovation Achievements Industry-University-Research Cooperation

Developing in-depth cooperation with universities is one of the key measures for the Company to build its R&D platform. To this end

R&D Achievements the Company has formulated a management rules for industry-university-research cooperation. So far the Company has cooperated

The Company focuses on the R&D of specialty gases keeps making innovations improves the product planning of electronic specialty closely with South China University of Technology in R&D and both sides have jointly established a postdoctoral research mobile station.gases expands the product varieties and promotes the localization of more restricted electronic specialty gases. So far the Company By continuously increasing investment in R&D the Company ensures that its product technologies always lead the industry providing

has replaced 55 varieties of imported products with domestic ones which should be attributed to its unremitting efforts in enhancing a strong technical support for the innovative development of the enterprise.the investment and commercialization of independent intellectual property rights and fulfilling its mission as a national high-tech

enterprise. By the end of the reporting period the Company had 64 ongoing R&D projects among which 15 projects were intended

for replacing imported products with domestic ones and most of them focused on the chip fabrication process for development of Intellectual Property Protection

high-performance products. To improve the Company’s IPR management level encourage sci-tech innovation invention and creativity and strengthen the manage-

The Company has mastered the key technologies involved in the whole process of lithography gas production storage detection and ment over intellectual property rights (IPR) the Company has formulated the Intellectual Property Management Rules in accordance with

application services especially in the key links of gas purification gas mixing gas cylinder treatment analysis and detection and other relevant national laws and regulations in order to protect the legitimate rights and interests of the Company and interested parties

products to form independent core technologies. and push ahead with the commercialization and industrialization of scientific research technological development and high-tech

achievements.● Be able to purify the corresponding purity according to the demand;

Gas Purification ● Be able to effectively identify impurity components accurately remove impurities such as CO2 water and particulate The Company has set up the Intellectual Property Office which assists the administrative department and departments subordinate to the

matter and purify the gas to 5N (99.999%) or even 7N (99.99999%). R&D center in carrying out intellectual property management work. In addition the Company organizes themed training on intellectual

● Be able to control the concentration of target components at 0.1ppm according to different requirements and has the property protection at regular intervals as a way to enhance the awareness of intellectual property protection among all employees.ability to accurately prepare more than 30 component mixtures；

Gas Mixing Process ● Combined with the influence of ambient temperature humidity wind speed etc. the distribution error can reach within

±2% higher than the industry general error level of ±5%.● Master deionized water cleaning inner wall grinding passivation and other processes to solve the problems of second-

ary pollution of impurities adsorbed on the inner wall of the cylinder and reaction with the carrier gas；

● It is one of the few enterprises in the world that has mastered the technology related to the high chemical activity of

Gas Cylinder fluorine element；

Treatment ● Grinding: can make the finish up to 0.1~0.5μm higher than the industry general 0.5μm;

● Passivation: it can make the quantity change of corrosive gas within 1 year not exceed 1% higher than the general 5%

of the industry;

● Vacuum: can make the vacuum environment up to 0.01pa higher than the industry general 0.3pa. Supply Management

● The industry's first key technology for the detection of trace fluorine in excisor-laser gas solves the detection problems

Gas Analysis & of recombination fraction and percentage concentration fluorine content in the industry. Compared with the general

Detection detection level in the industry (detection accuracy is 1-0ppb) the detection accuracy of a variety of gases can reach

0.1ppb (0.1*10-9). Governance

The Company has independently developed multiple lithography gas mixtures including Ar/F/Ne Kr/Ne Ar/Ne Kr/F/Ne and Ar/Ne/Xe. In strict accordance with relevant laws and regulations and based on its realities Huate Gas has formulated a series of rules such as

As the only Chinese gas supplier dually certified by ASML and Gigaphoton its lithography gases have achieved extensive adoption in the Procurement Control Procedures established a multi-dimensional and trans-department collaborative assessment system and kept

semiconductor fabs. Building on the breakthrough in overcoming overseas supply barriers in 2023 the Company’s lithography gas optimizing supplier resources in order to ensure the sustainable development of the supply chain. In the meantime the Company is

products during the reporting period have successfully penetrated semiconductor manufacturing facilities in Singapore and China’s committed to creating a supply chain environment featuring fair competition clean-fingered and transparent governance and strong

Taiwan region. traceability with a view to providing a strong guarantee for efficient operation.The Company has undertaken key scientific research projects such as "R&D and Pilot Experiment of High-purity Trifluoromethane" in

the National Science and Technology Major Project (Project 02) in addition to assuming the research and development of "Specialty

Gases for Flat Panel Displays" in the Guangdong Province Strategic Emerging Industry Regional Agglomeration Development Pilot

Project (New-generation Display Technology). Strategy

The sustainable development of the supply chain has become the core strategic fulcrum for the stable operation of an enterprises.KPI Based on its planning in line with industry trends the Company in strict accordance with the requirements of policies and regulations

has systematically examined the business needs and potential risks in each link of the supply chain. By building the whole-process

As of the end of the reporting period the Company had presided over or participated in the formulation of 62 standards management system the Company has optimized resource allocation. Through a series of precise measures the Company has

including multiple national standards for gases used in the electronic industry 6 industry standards 1 international effectively improved the supply chain's collaboration efficiency and anti-risk ability providing a strong guarantee for the stability of

standards and 11 group standards. production and operation and simultaneously creating a differentiated advantage in sustainable development.

59 60Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Impacts Risks and Opportunities

Impact Links of To effectively reduce various risks in the supply chain the Company has established a systematic risk management mechanism. By

Risk Financial Proba- Impact Description Magni- the Value Countermeasures accurately identifying potential risks scientifically assessing their impact magnitudes dynamically monitoring the changing trends of

Type Impact bility Rangetude Chain risks and implementing targeted management measures the Company has effectively ensured the security and stability of the supply

chain and provided strong support for the continuous and stable operation of the business.With the continuous improvement of the

localization level of specialty gases the

Company's full-fledged products are likely to

face more fierce market competition. In 1.Optimize production process and

Risk from addition the Company has to deal with supply chain management to reduce Links Specific Operations

Price direct competition from large-scale foreign production costs and enhance price

Fluctua- gas companies in more domains. Some Short- competitiveness.Cost Increase Medium Medium Upstream Identify the possible risks existing in the supply chain links (e.g. procurement production logistics sales etc.)

tion of factors including changes in the competi- term 2.Keep a close eye on policy orientations Risk Identification

Main tive environment technological progress including raw material supply price fluctuation logistics disruption and change in market demand etc.win the policy support and seize the

Products and changes in the development trend of opportunities for industry development.downstream industries might affect the The Company conducts annual performance assessment on suppliers with assessment contents covering

supply-demand relationship thus leading to Risk Assessment

price fluctuation of products. five aspects such as supplier product quality delivery time service price and HSE performance.Track the risk changes of the supply chain links in real time review the operating conditions of the supply

Risk Monitoring chain’s key nodes (such as suppliers and logistics providers) at regular intervals and detect potential risks in

a timely manner.The Company's raw materials are mainly 1.Through technological improvement Sum up the experience in risk management at regular intervals optimize the supply chain risk management

purchased from air separation gas enterpris- and process optimization reduce the Risk Management rules and processes adjust strategies in a timely manner and improve the risk-resistance ability.es metal smelting enterprises chemical consumption of raw materials and relieve Risk from

Price enterprises gas companies engaged in

the pressure from price fluctuation.Fluctua- producing crude products etc. Affected by factors such as the market environment the Cost Increase Medium Short- Upstream 2.Establish cooperative relationships tion of Medium

Main Raw prices of raw materials might fluctuate. If

term with suppliers to jointly cope with market

Materials the Company's upstream industries are

changes and stabilize the supplies. Indicators and Goals

affected by factors such as the market 3. Keep abreast of changes in industry

environment the prices of raw materials will policies adjust procurement strategies in

fluctuate accordingly. a timely manner and avoid policy risks.Key Indicators UOM 2024

Materials and material-related suppliers / 1348

The Company's overseas sales revenue Maintain vigilant oversight of interna-

predominantly settled in US dollars faces tional markets minimize cross-curren-

Currency margin compression risks from substantial cy settlement exposures utilize accredit-

Fluctua- RMB appreciation. Implementing price Revenue Short- Number of domestic suppliers /

tion Risks adjustments may erode competitive position- Decrease

Medium Medium term Upstream ed financial advisories' intelligence and 1334implement structured derivative

ing and depress sales volume consequently instruments for FX risk mitigation

impairing financial performance metrics. contingent on materiality thresholds. Number of overseas suppliers / 14

Supplier Evaluation Completion Rate % 100

Proportion of Suppliers with quality management

Oppor- Impact Links of %

Financial Proba- Impact system certification

100

tunity Description Magni- the Value CountermeasuresImpact bility Range

Type tude Chain Proportion of Suppliers with environmental management

system certification % 100

The digital supply chain has comprehen-

Digital sively optimized the collaboration efficien- Promote real-time information sharing

Proportion of Suppliers with occupational health and

Transfor- cy and information transparency of all and transparent management through safety management system certification

%100

mation of links in the supply chain. It has significant- Long- digital platform to ensure seamless

the ly improved the operational efficiency of Cost Medium Medium term Operation connection among enterprises in the

Supply the supply chain and also endowed the Decrease upstream and downstream of the supply

Chain Company with a more agile market chain and achieve high-efficiency

response ability. collaborative operation.

61 62Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Supply Chain Life Cycle Management Supplier Classification

Huate Gas divides its suppliers into four categories according to the goods and services they supply and adopts different selection

Supplier Selection criteria for different types of suppliers as detailed below:

Before starting the procurement process the Company will conduct a basic review of suppliers in terms of legal eligibility perfor- Supplier Type Material Type Selection Methods

mance capability reputation etc. according to the Procurement Control Procedures. Besides the basic qualifications the Company ● Send the New Supplier Investigation and Evaluation Form and the Questionnaire on the Suppliers’

focuses on the suppliers' performance in quality management system HSE management system social responsibility and environ- Environmental Conditions to new suppliers requiring them to fill in the forms in strict accordance

mental protection etc. with requirements and provide the qualification certification documents required in the forms.● The purchaser shall verify the returned New Supplier Investigation and Evaluation Form fill in the

Raw materials for production New Supplier Preliminary Review and Assessment Form and submit it to relevant departments

Type A packaging materials valves for approval.and products for distribution

● After approval the quality control department shall conduct a written or on - site review of the supplier.New supplier selection

● The purchasing department shall acquire samples from the supplier and hand them over to relevant

departments for testing and trial production. The results shall be reported back to the quality control

department the quality inspection room the procurement department and the R & D center.● The purchaser shall conduct a business qualification review of the supplier.Type B Equipment spare Supplier background survey parts reagents ● The user department shall confirm the specifications of the required materials to ensure they meet

the usage requirements.● For logistics suppliers: conduct a business qualification review with review contents including but not

Services such as logistics limited to business licenses and permit for road transportation of hazardous chemicals etc.Type C outsourcing testing ● For metrology and testing service provider: conduct a business qualification review with review

Sampling certification and

metrological calibration contents including but not limited to business license recognition of metrology and testing

capabilities system certifications etc.Auxiliary materials office/labor

Type D ● For suppliers of this type the purchaser needs not conduct a qualification review and can make protection supplies hardware

NG purchases online or directly from real stores.accessories

★ Sample confirmation NG Delivery time

Distribution ok Price

Production Supplier Evaluation

At the beginning of each year Huate Gas conducts an annual performance assessment on existing qualified suppliers. For Type A suppli-

Small batch usage Quality

ers with supply volume greater than 3 batches in the previous year a comprehensive evaluation of their supply performance in the past

year will be performed together with relevant departments in the form of the Annual Supplier Evaluation Form.OK

The Company comprehensively integrates annual performance evaluations and annual system audit ratings of suppliers to dynamically

Login for Qualified Suppliers. adjust the Qualified Supplier List. During the reporting period the company achieved a 100% supplier evaluation completion rate.Evaluation points

Dimensions of Supplier Annual Performance Appraisal

NG Supplier assessment Evaluation steps NG

OK Evaluation principles HSE

Improvement in Quality Price Performance

given period Continue the purchase

The selection process for supply chain procurement

Delivery Service

63 64Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Clean-fingered Procurement

To promote the construction of a clean-fingered supply chain the Company signs the "Honesty and Integrity Agreement" with suppliers

Quality Director

requiring them to strictly abide by relevant national laws and regulations rules on clean-fingered practice and provisions of Huata Gas

on clean-fingered management.KPI Deputy Manager for Deputy Quality Director Quality Inspection

Deputy Director for

During the reporting period the signing rate of the Honest and Integrity Agreement among all suppliers of the Company reached 100%. Quality Inspection

ISO

Quality Engineer Specialist/Clerk

Industrial

Gas/Specialty Medical/Food Inspector for Electrical Gas

Raw Customer

Gas Inspector Gas Inspector Class A Gases Inspector

Material/Process Complaint/File

Quality Assurance Control Inspec Administrator

Organizational Architecture of Quality Management

Huate Gas insists on the product quality policy "Customer First High Quality High Efficiency". The Company has formulated strict

quality control standards and processes in all respects ranging from raw material procurement production and processing to

finished product inspection. Besides that the Company attaches importance to the cultivation of employees'quality awareness

and keeps improving their operation skills and standardization so as to ensure the stable and reliable quality of products. During the reporting period the Company passed the ISO 9001 Quality Management System authentication and the ISO 22000 Food

Safety Management System authentication.Governance

In strict accordance with the requirements of relevant laws and regulations such as the Product Quality Law of the People's Republic of China

Huate Gas has formulated a series of management rules such as the Management Manual the Procedure for the Control of Finished Product

Inspection and the Procedure for the Control of Product Conformity Management in order to ensure the product quality through a dual-track

parallel mechanism featuring source control and whole-process supervision.For the quality management system the Company has the general manager lead the construction of the quality system and take charge

of quality management work. The top manager coordinates the strategic planning of quality and allocates resources. The Quality Control

Department is specifically responsible for the quality supervision in the whole process ranging from raw material procurement to

production process and finished product inspection. The Quality Control Department also works with other functional departments to

establish a life-cycle quality traceability system ranging from product design & development to market delivery which not only ensures

the stability and consistency of product performance but effectively improves the product pass rate and customer satisfaction through

continuous optimization of production processes and testing standards.Quality Management System Food Safety Management System CNAS Laboratory

Authentication Certificate Authentication Certificate Accreditation Certificate

65 66Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Quality Improvement Training Strategy

During the reporting period the company proactively organized a series of quality enhancement training initiatives including SPC Huate Gas is fully aware of the importance of product quality and safety to the Company's development. In light of relevant regulations

(Statistical Process Control) training and product shipment requirement training. Through systematic and comprehensive training and industry standards and based on its realities the Company identifies and evaluates the impacts risks and opportunities of product

content combined with diverse training formats these programs successfully stimulated employees' in-depth reflection on quality quality and safety. This helps the Company clarify its rectification direction for strengthening quality inspection and providing high-quality

control effectively strengthened their quality awareness and laid a solid foundation for the steady improvement of product quality. products and promotes the fulfillment of its sustainable development goals.Impact Links of

Key Indicators 2024 Risk Financial Proba- Impact Description Magni- the Value Range CountermeasuresType Impact bility tude Chain

Participants in Quality 412 1.Build a life-cycle instrument manage-Culture Training If the Company fails to effectively identify ment system establish a dynamic list

substandard raw materials substandard covering all testing equipment formulate

intermediate products or substandard an annual calibration plan and post

finished products due to improper qualification cards in eye-catching

inspection or the Company’s failure in positions to ensure the visual traceabil-

timely controlling and handling defective ity of the instrument status.Risk from products directly leads to product Revenue 2.Establish a closed-loop inspection

Unqualified performance defects it may bring about Decrease Low High Short- Operation process control implement a sampling Total Duration of 12 Product large-scale rework or recall loss of faith Corporate term Downstream inspection plan and set up physical-Quality Culture Training Quality among customers and high-amount Reputation ly-isolated areas for products awaiting

compensation. In addition if defective Damage inspection qualified products and

gases flow into the semiconductor or unqualified products.medical fields it may cause a sharp drop

in chip yield or medical equipment 3.Refine the time-sensitive manage-

failures jeopardizing the stability of the ment and control mechanism for

industrial chain and the public safety.a non-conforming items and establish

a reverse mechanism for dealing with

quality problems.Quality Culture

Training Sessions 5

Oppor- Impact Impact Links of

tunity Financial Proba-Description Magni- Range the Value Countermeasures

Type Impact bility tude Chain

Government subsidies and tax incentives Build a policy intelligence response Policy support quality improvement leading to a Revenue system keep a close watch on relevant Opportu- Short-

nity sustainable circular mechanism featuring Inecrease

Low Medium Operation policies and give attention to relevant

term

"Quality Improvement Policy Incentives". information within the industry to ensure the timely transmission of information.

67 68Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Management of Impacts Risks and Opportunities

Goals Goal Achievement in 2024 Goals for 2025

To reduce the risks likely arising from product quality the Company has formulated the Procedure for the Control of Risk and Opportunity Identifi-

cation and Response which clearly stipulates the relevant management procedures and the job responsibilities of relevant departments Customer comprehensive satisfaction ≧97% Customer comprehensive satisfaction≧97%

in order to effectively respond to risks and opportunities. Completion rate of customer complaint Completion rate of customer complaint

handling100% 100.00% handling100%

Links Specific Operations Qualified rate of incoming goods ≧99.3% 100.00% Qualified rate of incoming goods ≧99.3%

Qualified rate of general gas Qualified rate of general gas production

Clarify the Needs and 1.External factors: including laws and regulations technological innovation market production≧ 99.99% 99.998% ≧ 99.99%

Expectations of Internal and competition and market demands etc. Qualified rate of speciality gas Qualified rate of speciality gas production

External Factors and 2.Internal factors: including the Company's values management documents professional production≧ 99.7% 99.89% All Achieved ≧ 99.8%

Stakeholders knowledge and business performance etc. Percentage of products exceeding the control 0.00% Percentage of products exceeding the limit OOC%≦ 0.5% control limit OOC%≦ 0.5%

1.The department heads based on the operation of their own departments identify the

risks and opportunities related to their departments. The identification results are record- 100.00% Disposal rate of nonconforming Disposal rate of nonconforming products 100% products 100%

ed in the Risk and Opportunity Evaluation and Analysis Form and reported to to the

Quality Control Department. Equipment maintenance timeliness

rate ≧99%

Identify and Determine Risks 2.The Quality Control Department collects the lists of risks and opportunities submitted

by each department and reports them to the Management Representative. Qualified rate of R & D product in and Opportunitie production≧90%

3.From the Company level the Management Representative comprehensively analyzes

various internal and external factors as well as the requirements of stakeholders and

takes into account the risks and opportunities identified by each department to

determine the risks and opportunities that the Company needs to respond to.Quality Risk Management

Formulate Risk and Opportunity According to the identification results adjust the response strategies in a timely manner

Key Indicators UON 2024

Response Measures to improve the risk-resistance ability.Number of Risk Assessments Conducted Times 6

Update the Identification and In case of change of the management system or the internal/external factors that affect Product Quality Inspection

Response Results of Risks and the Company's management system update the evaluation results and response

Opportunities in a Timely Manner measures for risks and opportunities. Product Pass Rat % 99.97

Number of Internal Quality Audits within the Year Times 4

Number of Sampling Inspections by Third-Party Agencies Times 80

Percentage of Products That Need to Be Withdrawn and

Indicators and Goals Recalled Due to Health and Safety Reasons % 0

Huate Gas has always been committed to fully complying with the laws and regulations of different countries and regions across the Number of Products That Need to Be Withdrawn and Pieces 0

globe. Through continuous optimization and improvement it actively responds to and meets the needs and expectations of stakeholders. Recalled Due to Health and Safety Reasons

Based on its production and operation realities the Company sets and implements specific and effective quality goals to ensure the

Number of Negative Public Opinions on

steady development of the Company and a continuous provision of high-quality products and services to society. Company's Product Quality Times 0

69 70Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Product Safety and Quality Management Nonconforming Products Management and Recall

Huate Gas has formulated the Procedure for the Control of Corrective and Preventive Measures in accordance with relevant laws and

Life-cycle Quality Management regulations with a view to eliminating the existing and potential risk factors in product quality management and social responsibility

operation. This system has effectively guarded against the recurrence of similar problems ensured the continuous and effective opera-

tion of the Company's management system and continuously improved the product quality and social responsibility performance.Management manage production equipment in accordance with the specified procedures.Warehouse writes the inspection form

and attaches the supplier's report. Find nonconformity

Packaging appearance

To be inspected

Substan-

Verify report Return of goods or

Quality inspection Leak detection

dard concession

pressure and weight acceptance (within Determine the impact magnitude

one week). Evaluate nonconformit scope and severity.Eligible

Gas quality inspection

The quality inspection room issues the

report within three days.Warehouse-in The responsible department makes cause analysis.The warehouse keeper classifies and places

the goods in order and make proper labels.Incoming Material Management NOEvaluate the requirements for measures. Correct or stop

YES

Use qualified raw materials for production

and produce according to the order. Determine measures

The production department completes

the finished products. Implement measures Packaging appearance

Substan-

dard The production

Quality inspection Leak detection pressure department

and weight Ineffectivereworks. Follow-up verification Take new measure

Eligible

The quality inspection department sticks Gas quality inspection Effective

labels attaches reports and seals the produ

Recording and safekeeping

Warehouse-in

Submit to management for review

Shipment

Production Process Management Correction and Prevention Flowchart

71 72Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

The Company has formulated the product recall control process aiming to effectively trace and recall products with quality or

safety risks. This process is composed of recall timing confirmation product quality identification recall plan formulation Customer Service Management

information release recall implementation and acceptance and disposal etc. It ensures that those nonconforming products are

safely withdrawn and effectively handled safeguarding the safety of customers and maintaining the effective operation of the

Company's management system. Customer Service System

Huate Gas attaches great importance to the construction of the customer service management system insists on the marketing

concept "Creating Value for Customers Growing Together with Customers" and implements its core value “Customer Orientation” in

all work. The Company has formulated the Procedure for the Control of Customer Service and established channels to facilitate customer

communication in order to ensure that it has a precise understanding of customer needs provides all-round pre-sale in-sale and

Begin after-sale services and keeps improving customer satisfaction.Internal discovery Customer complaint

N

Quality appraisal

Y

Preliminary hazard assessment.N

Recall determination

Y

Formulation of recall plan

Digital Customer Complaint Handling Platform

Release of message

Customer Complaint Handling

Implementation of recall

Huate Gas has set up a dedicated service hotline for customers’ rights

and interests ensuring a timely response to and disposal of customers'

Acceptance and disposal complaints and return requests. The cCmpany should reply to 100% of

customer complaints and file the disposal results living up to zero

Procedure for the customer complaints on a gradual basis.Control of

Nonconforming Products The customer service team and the quality management team

grade the importance of quality feedback. At the end of each

month they classify and sum up all quality feedback by the produc-

Recording and safekeeping tion factory product category and cause of nonconformity and

make the sum-up documents that serve as an important reference

Product Recall Process for the production factory to improve the quality-related work and

keep upgrading product quality.

73 74Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Customer Satisfaction

Customers lodge complaints To fully learn about customer needs the Company conducts customer satisfaction survey at regular intervals each year. In the survey

it learns about the customers'satisfaction with the Company's products services etc. from multiple dimensions. The Company's

customer service staff distribute the Customer Satisfaction Survey Form to customers on a regular basis requesting them to give

feedback within three weeks. Based on the survey results the Company keeps optimizing the quality management system and

Customer complaint record continuously improves customer satisfaction. For items in the survey form that dissatisfy customers or score below 80 points the

(Filled in by the service

assistant) Company issues reports as per relevant procedures and obliges relevant departments to reply in a timely manner and put in place

improvement measures.Based on the principles of KPI

Reasonable complaint handling Unreasonable

complaint complaint During the reporting period the comprehensive customer satisfaction rate was 98.5% the customer complaints disposal

Procedure for the Control of rate was 100%.Explain to customers

Maintenance Process

Y Customer Privacy Protection

Complaint handling ends Accepted by customers

Huate Gas strictly complies with relevant laws and regulations and promises to rigorously protect customer privacy. All customer

information is kept confidential and the legality and compliance of information collection channels are ensured.N

During the reporting period the Company did not have any incidents of infringing on customer privacy or leaking customer information.Report to service manager

Recording by after-sales Give handling opinions)

management

Y

Negotiate as per opinions

Shoring up the Information Defense Line

Service manager reports to

Accepted by customers N Information Security Management System

the chief engineer

To protect the corporate interests enhance competitiveness and strengthen the management of trade secrets Huate Gas has formulat-

ed a series of rules such as the Confidentiality Management Regulations and the IT Information Security Management Regulations and established

an information security policy "Active Prevention Timely Detection Rapid Response and Ensuring Security". By enhancing employees'

Complaint handling report awareness of information security the Company provides a strong guarantee for the stable operation of the information system ensur-

End

(Prepared by the Quality Office) The chief engineer's final plan ing that there are rules for management and evidence for execution.Customer Complaint Handling Process

To improve the efficiency of handling customer complaints Huate Gas has established a digital customer complaint handling system

and it strictly observes the Procedure for the Control of Customer Service to supervise and handle product quality complaint issues.

75 76Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Information

Security Policy Measures

● Keep improving and implement various information security measures to prevent the occurrence

Active Prevention of information security incidents.● Timely detect information security risks through the information network monitoring platform and

Timely Detection the central log management system in combination with administrative monitoring security and

other measures.● Rely on the alarm events provided by the information security auxiliary system and the early

warning information provided by administrative security and functional departments to live up

with follow-up in real time report different events to the relevant business leaders;

Rapid Response

● For those that may have a partial or overall impact report them to the IT manager in a timely

manner for handling and report them to the information security leading group for handling

according to the event level. Information Security Assurance Measures

In addition the Company has established an information security organization to ensure the efficient and stable operation of the Huate Gas attaches great importance to information security management and always puts information security and privacy protec-

information security system. tion first. It has established a complete system covering personnel management training mechanisms technical defense and

emergency response plans. By means of signing confidentiality agreement regular training internal auditing and the application of

technical tools the Company ensures the standardization and effectiveness of its information security management. In response to

potential risks the Company has formulated a detailed emergency response plan to ensure that it can respond quickly and handle

Information Security Organizational Structure and Responsibilities properly in case of emergency.● Coordinate and organize the Company's information security work and report directly to the immediate leader.During the reporting period the Company did not have any information security incident fully mirroring its extraordinary achievements

● Formulate the Company's information security system plan according to the business development in information security management.needs and promote the deployment implementation and evolution of the information security system.Information ● Organize security system auditing to fully explore evaluate and eliminate the Company's information

Security Officer security risks.● Formulate risk emergency plans related to information security.● Organize the handling of information security emergencies. Assurance Measures Contents

● Conduct information security prevention early warning and notification etc. ● Employees are required to sign confidentiality agreements when they join the company.● Organize and manage the technical team of current department coordinate the distribution of resources ● All project team members of high-confidentiality projects shall sign special confidentiality

Information Security and personnel within the department.Information Security agreements and receive information security training and project personnel need to work in a

Leading Group ● Participate in the construction of the information security system and projects and push ahead with

the implementation. Personnel Management

centralized office area of the project.● According to the Rules for Management of Key Positions (Information Security) formulate a list of key

● Implement the tasks assigned by superiors take charge of handling sudden information security events personnel in information security positions and organize information security training.and ensure the safe efficient and stable operation of the Company's IT system.Department Manager ● Assume the responsibility of monitoring and managing the information security of current department ● New employees shall be organized to participate in information security training to ensure that

require the department to comply with the requirements of the National Information Security Bureau in Employee Information employees know well about their information security responsibilities.information security work and work with the IT Department to implement the IT security construction. Security Training

● Organize on-the-job personnel to receive information security training at regular intervals.Key Indicators UOM 2024 2023 2022 ● Set up an internal audit team.● Conduct internal information security audit at lease once a year.InfoSec Training Sessions Times 5 4 2 Strengthening Security ● The audit team urges relevant responsible departments to improve the problems found in the audit.Assurance Capability

60 31 24 ● Capitalize on the Esafenet data encryption tool to prevent the leakage of unauthorized confidential data.Participation in InfoSec Training Person-times

● Leverage monitoring software to monitor the real-time status of servers and network devices in the

Employee Coverage of InfoSec Training % 86 82 80 domain and generate log content.Information Security ● Set up an emergency team for scope control and incident investigation over information leakage incidents.Total Investment in Data Security 10 thousand yuan 50 70 50 Incident Emergency ● Formulate the HT-IT-002 Overall Emergency Response Plan for Major IT Emergencies to deal with

Response Plan unexpected events in the information computer room.

77 78Huate Gas persists in fulfilling its corporate mission of putting people first

insists on legal employment safeguards the legitimate rights and interests of

employees actively fulfills social responsibilities devotes itself to the

construction of public welfare undertakings and steadfastly promotes rural

Our Concept

revitalization doing its bit for building a beautiful society.● Compliant Employment ● Occupational Health and Safety

Employee ● Employee Democracy ● Public WelfareOur Actions ● Employee Growing

Compliant Employment ｜ Employee Democracy ｜ Employee Growing SDGs

Occupational Health and Safety｜ Public Welfare

Compliant Employment

Huate Gas insists on putting people first and dedicates itself to providing the best platform for the development of employees. The

Company strictly follows relevant laws and regulations such as the Labor Law of the People's Republic of China and the Labor Contract Law of the

People's Republic of China to formulates management rules such as the Employee Handbook and the Management Handbook in an effort to

standardize its management in recruitment training compensation welfare vacations etc. specify the employee management process

ensure the enterprise’s compliant operation and promote the fulfillment of the enterprise's strategic goals.Employee Recruitment

Huate Gas looks upon talent as the core asset for corporate development and an advantage for long-term competition. In accor-

dance with relevant laws and regulations the Company has formulated personnel recruitment management rules and its Human

Resources Department is responsible for recruitment management. The Company usually recruits talents by releasing recruitment

information through online recruitment on-site recruitment its official website and other channels.

79 80Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

The company has adopted a multi-channel social recruitment strategy leveraging both online recruitment platforms and offline Diversification and Anti-discrimination

recruitment channels to attract and hire qualified talent. During the reporting period 57 professionals were successfully onboarded

Huate Gas upholds the “Diversified Impartial and Inclusive” governance value respects the differences among individuals and

through public recruitment initiatives.dedicates itself to providing an inclusive and equal working environment. The Company has formulated the Procedure for the Control of

Huate Gas has collaborated with multiple universities actively participating in career fairs and hosting on-campus seminars to engage Anti-discrimination and resolutely resists any form of prejudice and harassment ensuring that employees enjoy equal opportunities in

directly with graduates. These efforts enable targeted talent selection through face-to-face interactions ensuring alignment with the employment compensation and welfare training and promotion and there are no discriminatory behaviors for the sake of age gender

company’s technical and cultural requirements. educational background and race. The Company prohibits any intimidating hostile inappropriate speech behavior or illegal sexual

harassment etc. The Company advocates equal pay for equal work and gender equality refrains from setting limits over gender and

safeguards the legitimate rights and interests of every employee.Where employees believe that they have suffered discrimination they can report this case through the Procedure for the Control of Preventive

Key indicators UOM 2024 2023 2022 Disciplinary Measures and the Procedure for the Management of Employee Suggestions and Complaints. If the discrimination is verified by the Human

Resources Department the reporting employees will be rewarded and the information about the reporting employees will be kept

Employees in Total Persons 1200 1186 1156 confidential when necessary.KPI

New Employees Persons 152 153 116

Number of New Employees by Recruitment Channel

During the reporting period the Company did not have any labor discrimination incidents.Social Recruitment Persons 57 / /

Campus Recruitment Persons 6 / /

Prohibition of Forced Labor and Employment of Child Labor

Other Recruitment Channels Persons 89 / / The Company strictly observes relevant laws and regulations such as the Labor Law of the People's Republic of China to ensure that the employ-

ment relationship is established on a voluntary and equal basis and it strictly prohibits any form of forced labor. To standardize its

attendance management the Company has formulated the Procedure for the Management of Working Hours stipulating that employees should

have at least one day off every seven working days and the total working hours per week should not exceed 60 hours in order to ensure

that employees get a reasonable amount of rest. If there is a need for overtime work overtime compensation after being approved will

be provided to employees in light of the overtime management regulations.In strict accordance with relevant regulations such as the Regulations on Prohibition of the Use of Child Labor and based on its realities the

Employees' Rights and Interests Company has formulated the Procedure for the Control of Prohibition of the Use of Child Labor and Minor Workers stipulating that child labor and minor

workers shall not be recruited in any form and the age information of applicants shall be verified at the time of recruitment to ensure

The Company strictly abides by the Labor Law of the People's Republic of China the Labor Contract Law of the People's Republic of China and the Civil

compliance. The Company has enacted the Procedure for the Control of Preventive Disciplinary Measures stipulating that all employees shall report

Code of the People's Republic of China. It also refers to the UN international charters on human rights such as the Universal Declaration of

child labor and employment of minor workers as a way to put an end to the use of child labor. Once child labor is found in the Company

Human Rights and the International Covenant on Civil and Political Rights to formulate the Employee Handbook as per relevant laws

the child labor work will be immediately stopped. Then the Company will arrange professional medical institutions for health checkup

and regulations. This is aimed at earnestly safeguarding the legitimate rights and interests of employees and providing an equal

ensuring that the child has not suffered any health damage at work and the child will be sent safely back to his or her guardians.inclusive and diversified working environment for employees.KPI

During the reporting period the Company did not have any incidents on misuse of child labor forced labor or insult and harassment.

81 82Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Women's Rights and Benefits

Huate Gas gives attention to the rights and benefits of female employees. In accordance with laws and regulations such as the Law of

Key Indicators UOM 2024 2023 2022 the People's Republic of China on the Protection of Women's Rights and Interests and the Labor Contract Law of the People's Republic of China the Company

strictly puts in place legal holidays(e.g. maternity leave breastfeeding leave miscarriage leave) and maternity allowances. In addition

Labor Discrimination Incidents Cases 0 0 0 the Company provides "four-period" protection for female employees as per relevant national regulations and does not arrange female

employees in pregnancy and lactation to engage in jobs that are harmful to themselves and the fetus.Ethnic Minority Employees Persons 29 29 20 The Company's trade union has specifically set up a female employees' committee to guide female employees to participate in corpo-

rate construction. It organizes training on "Self-esteem Self-confidence Self-reliance and Self-improvement" to improve the literacy of

Disabled Employees Persons 8 8 4 female employees care about the lives of female employees and safeguard their special rights and interests in order to create a

workplace environment that respects and supports women.Below 30 years old

(excluding 30 years old)

201 Persons 50 years old and above

Female 230 Persons

212 Persons

769

Persons

31 - 50 years old (including

Male 30 years old excluding 50

988 Persons years old)

Employee Gender Structure Employee Age Structure Activity for the International Women’s Day (March 8th )

Ph.D Master’s Degree Finance Administration

2 Persons 17 Persons 42 Persons 75 Persons

Technology

Bachelor’s Degree KPI UOM 2024 2023172 Persons Transpor-

270 Persons tation Employees Enjoying Maternity Leave Persons

Sales 316 12 6

119 Persons

Persons Return-to-work Rate after Enjoying Maternity Leave % 100 83.33

137 Persons

Junior college and below Production Others Employees Enjoying Parental Leave Persons 15 2

912 Persons 339 Persons

Return-to-work Rate after Enjoying Parental Leave % 100 100

Employee Educational Background Structure Employee Professional Structure

83 84Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Employee Compensation and Welfare Welfare Guarantee System

Huate Gas takes talent as the foundation for development. To attract and retain talents the Company has built a competitive The Company attaches great importance to the employees’ welfare guarantee strictly complies with national laws and regulations and

compensation and welfare system. It keeps optimizing compensation management stimulates employees' work enthusiasm and pays social insurance for employees according to laws including basic endowment insurance medical insurance work-related injury

provides a strong driving force for the Company's sustainable development. insurance unemployment insurance maternity insurance and housing provident fund in order to fully ensure that employees enjoy a

complete welfare guarantee system. In addition the Company provides supplementary benefits for employees to improve employees' job

satisfaction loyalty and overall happiness enabling them to work in a reassured manner and make progress together with the Company.Compensation and Performance

The Company insists on the “Fair Competitive Inspiring and Legal” compensation management concept. To standardize compensa- Welfare System

tion management work it has formulated the Compensation Management Regulations based on its realities. The Company has set up the

Compensation Management Committee which is responsible for guiding the formulation of compensation adjustment policies and

management measures. The Enterprise Management Department as the implementation and control organ under the Compensa-

tion Management Committee takes charge of the implementation of compensation management measures and policies. Statutory Benefits Various Types of Leave Accommodation

The Company has established an incentive compensation system. Also it has set up a compensation team specifically responsible for

salary adjustment review work. The salary adjustment review process follows rigorous procedures and standards. The compensation Five social insurances and Statutory holidays special Provide apartment-style housing provident fund. Spring Festival holidays sick dormitories.team adjusts salaries based on such factors as employees' work performance the Company's operating conditions and the market leave work-related injury leave

salary level in order to ensure the fair and orderly operation of the compensation system. marriage leave bereavement

leave maternity leave

paternity leave etc.Employee Salary Structure of Huate Gas Meal Subsidy Annual Travel

Release the meal cost standard Organize annual travel and

according to the changes in the Company bears the

prices and give a 50% subsidy expenses incurred therein.based on the real meal expenses

Salary for

Basic Salary Others of employees in the current

Seniority month.“Private Car forAnnual Physical Checkup Telephone Bill Subsidy Business Purpose”

AllowancePerformance Education/Title Organize a free physical Employees can apply for the Provide “Private Car forSalary Subsidy checkup for employees once Company's group network Business Purpose”

a year to keep abreast of mobile phone cards and get allowances to employees

their physical and mental communication expense who use their private cars in

health. subsidies. business.Key Indicators UOM 2024 2023 2022

Labor Contract Coverage % 100 100 97.57

Coverage of Five Insurances &

One Housing Fund % 100 100 98.82

Welfare Expenditure 10 Thousand Yuan 2786.04 2767.63 /

85 86Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Care for Employees Communication with Employees

To enrich employees' spare time life the Company organizes various cultural and sports activities such as basketball games and hiking Huate Gas attaches great importance to the communication between employees. To better safeguard the rights and interests of

making employees enhance their friendship and cohesion in the activities. The Company also sets up a reading room to provide a place employees and facilitate the communication between the Company and employees the Company learns about the voices of employees

for employees to read books and improve themselves. through various means such as setting up suggestion box and feedback form conducting employee satisfaction survey and organizing

employee symposium.With a view to cultivating a participatory corporate management culture the Company encourages employees to put forward any

suggestions and opinions on the corporate operation and business providing directions for the Company's improvement and optimiza-

tion. The Company implements the "Continuous Improvement Plan" in which employees are advised to make proposals and provide

solutions according to the existing problems at the current stage. The solutions from employees cover risk avoidance efficiency

improvement intensified management and cost reduction. The Company will reward those who put forward solutions.In addition the Company has formulated the Rules of Huate Gas for Management of Employees’ Appeals ensuring that employees have a timelyand effective communication with the management under the principle of "Openness Fairness Impartiality and Transparency” when

they have problems at work.Employee Satisfaction

The company conducts a satisfaction survey on all employees every year. By distributing employee satisfaction questionnaires to all

employees the survey content covers aspects such as salary and benefits working environment communication mechanism working

When employees are faced with unexpected misfortunes or family difficulties the Company organizes fundraising for the employees in

hours and vacation policies. The company timely understands the demands of employees and solves potential problems according to

need to help them tide over the difficulties. Besides the Company manages to address the schooling problems for the children of

the survey results comprehensively understands the real thoughts of employees on the company's development and operation and

employees with non-local household registrations actively participates in the points assessment activities organized by the government

management and joins hands with employees to promote the development of the enterprise.and schools and makes efforts to properly resolve the schooling problems for the children of employees.Employee Democracy KPI

Democratic Management During the reporting period the Employee satisfaction increased 5.6% year on year.Huate Gas respects the democratic rights of its employees. In light of the provisions of the Trade Union Law of the People's Republic of China

and the Constitution of the All-China Federation of Trade Unions the Company has established trade union and convened workers' congress.The trade union dedicates itself to safeguarding the legitimate rights and interests of employees actively participates in the enterprise’s

democratic management and implements democratic supervision. It guides employees to participate in corporate development and to

completes production and operation tasks. It also organizes employee training improves employee literacy mobilizes employees' work

enthusiasm and promotes the corporate development.

87 88Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Employee Growing Internal Transfer

To further optimize the allocation of talent resources and improve the utilization efficiency of its human resources the Company fills the

vacant positions within the enterprise in a timely and accurate manner through the talent exchange & allocation mechanism for internal

To cater for the rapid development of the gas industry and the Company Huate Gas takes technological innovation as the core and

transfer and inter-subsidiary transfer. While enriching the talent reserve pool and the talent structure the Company reasonably controls

talents as the foundation to advocate the common growth between employees and the enterprise. It has formulated a complete set of

the talent flow frequency to ensure the stable development and continuous innovation of business segments under the Company.employee training and career development plans including but not limited to reserve talent cultivation management cadre training

further education for MBA etc. Besides the Company cultivates talents in a progressive manner and sifts out talents from competition

providing an extensive development platform and space for employees' growth.KPI

Building Career Channels

During the reporting period 56 employees successfully completed internal transfers.Promotion Management

Huate Gas attaches great importance to the self-development of its employees. The Company has formulated the Employee Career Develop-

ment Management Regulations and implemented a dual-channel design encouraging employees to choose a career development path suitable

for themselves from both horizontal and vertical dimensions and helping employees improve their professionalism and competitiveness.Technical Line Functional Line

Rank Position Grade Rank Position Grade

P12 Chief Engineer D2 Director

Deputy Chief

P11 Engineer D1 Deputy Director

P10 Senior Level 1 M4 Manager

P9 Senior Engineer Level 2 M3 Deputy Manager

P8 Level 1 M2 Assistant Manager

P7 Level 2 M1 Supervisor

Assistant Engineer

P6 Level 3 M0 Deputy Supervisor

P5 Level 1 A5 Level1

Senior Technician Senior Specialist Employee Developing

P4 Level 2 A4 Level2

The Company is fully aware that employees are the core driving force for promoting the sustainable development of an enterprises thus

P3 Level 1 A3 Level1 the Company attaches great importance to employees' career planning and personal growth encourages employees to improve

Technician Specialist

P2 Level 2 A2 Level2 themselves and achieves the common growth between individuals and the enterprise. The Company has formulated relevant training rules

such as the Procedure for the Control of Human Resources and the Training Evaluation Management Rules. The Human Resources Department has

P1 Junior Technician A1 Assistant rolled out the Annual Training Plan according to which employee training is organized as per the needs of various departments.P0 Intern A0 Intern The Company has established a complete training system through induction training job transfer training on-the-job training class

training and the "Green and Blue Project" helping its employees to grow in career.

89 90Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

To ensure the professionalism of the training lecturers the Company has formulated the Trainer Management Rules which covers lecturer

selection cultivation employment output and evaluation & assessment etc. ensuring that the lecturers have adequate capability and

awareness to take up their jobs.Induction training Talent review Green and Blue Achievement

Plan-

ning

Talent assessment (internal Lecturer Training - Coach Training

+ external). TTT Employee roster Lecturer/mentor standard

Imple-

men- HR Third-party agency Green and Blue Project

tation Leadership Group

HR HR Initial screening of the lecturer/-

mentor pool

New comers’ Internal

induction As- BData Backbone plus

sess- base B

ment

Corporate culture Evaluation system Assessment

Intermediate All levels of specialized course

Execu- management development

tion

Safety training

Exter-

nal Data- Qualified mentor poolHuangpu Class

Ssytem(rules) assess- base Ament

training

Mentor training

Condi-

tions Cours- Talents

for Com-

Out Talent es of of entry peten- differ- differ- Platform - solidified coursesdata- Output of course put cy Course development into base ent ent model materials data- levels levels Formulation of a mentoring plan

base

Mentoring implementationm

Training implementation

Talent review Talent duplication Course solidification

Plan- Appraisal and comparison

ning

Mentor - Mentee Program in the Green and Blue Training classes of different

Excellent mentor team

Feed- Excellent Advisor/Lecturer Evaluation ProcessProj- Up-As- back Data- Train- Re- load-

Execu- sess- Key Mentor ect Grad-

tion ment Behav- Train- Imple-

of the base ing cord- ing of

iors ing men- In- incen- exe-

uation

system spec- tive cution output

ing re-

tation cords tion

Key Indicators UOM 2024 2023

Mid-le Re- Employee Training Investment 10 Thousand

Output Com- Mento- Grass- vel Core cord- Yuan 38.87 53

of peten- Course cy system ring roots and cours- ed results model Form talents senior es cours-talents es Total Duration of Employee Training Hours 185555 127923

Average Duration of Training Received by Hours

Each Employee per Year 623 538

Employee Training Coverage Rate % 100 100

Huate Gas Training System

Certified Internal Trainer Persons 19 16

91 92Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Occupational Health and Safety Occupational Health and Safety Training

To enhance employees' awareness of occupational health and safety the Company has formulates an annual occupational health and

safety training plan according to which it organizes occupational health and safety education and training at regular intervals.Huate Gas insists on the work safety concept "Safety First Prevention Upmost Comprehensive Governance" and gives priority to the

protection of people's lives and safety. The Company attaches great importance to employees' occupational health and safety and has

built an all-around occupational health and safety management system from the system establishment & improvement and prevention

& control measure supervision and management with a view to creating a safe and healthy workplace environment for employees and

helping the enterprise develop steadily.Governance

In strict accordance with relevant laws and regulations such as the Work Safety Law of the People's Republic of China and the Law of the People's

Republic of China on the Prevention and Control of Occupational Diseases the Company has formulated relevant management rules such as the

All-employee Work Safety Responsibility System and the Occupational Health Management Rules.The Company has established a work safety committee to build a three-level management architecture led by the general manager.The committee is responsible for implementing relevant national laws regulations and policies studying the Company's work safety

plan and guiding arranging and supervising the implementation of the plan in addition to organizing emergency plan drill activities.The company has established an occupational health management department which is responsible for implementing national laws regula-

tions technical standards on the prevention and control of occupational diseases fulfilling the occupational health management rules and

ensuring employees' occupational health and production safety. As of the end of the reporting period the Company and its subsidiaries had

passed the ISO 45001 Occupational Health and Safety Management System Authentication.Panel meeting of occupational health and safety team

Jiangxi Huate Electronic

Guangdong Huate Gas Co. Ltd. Chemicals Co. Ltd. High Energy Industrial Gas Co. Ltd. Work safety training in workshops

93 94Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Strategy Management of Impacts Risks and Opportunities

The personal safety of employees is the key for the Company's development. By referring to relevant laws regulations and industry To standardize the identification of hazard sources risk assessment and risk control activities and ensure that various safety risks are

standards on occupational health and work safety and taking into account its realities Huate Gas identifies and evaluates the impacts under effective control the Company has formulated the Safety Risk Level Management and Control Rules which covers risk identification risk

risks and opportunities related to occupational health and safety clarifies the direction for strengthening the management over occupa- assessment risk classification and risk control.tional health and work safety and formulating rectification measures and achieves the Company's sustainable development goal.To achieve "All-staff All-Process All-around All-weather" risk control the Company has established a safety risk classification and

control group. The group leader is responsible for arranging and coordinating the work related to construction of the safety risk classifi-

Impact Impact Links of cation system and performing assessment. The deputy group leader takes charge of work related to organization & coordination

Risk Financial Proba-

Description Magni- Range the Value Countermeasures process training technical guidance and preparation of safety risk classification and control documents. The group members are

Type Impact bility tude Chain responsible for implementing the specific work of the safety risk classification system.

1.If the Company fails to provide a working environ-

ment that meets the occupational health and safety

standards which brings about employees' health 1.Provide complete occupational disease and

problems or safety accidents employees may file safety protection facilities such as labor

legal lawsuits against the Company. The Company protection supplies.may bear huge compensation costs. 2.Keep improving the occupational health

2.There are clear requirements for the Company's and safety management system.Legal Establish a safety risk classification and

Risk occupational health and safety management as per

Revenue Medium Medium Medi- Operation 3.Organize occupational disease prevention control group

relevant laws and regulations. In case of violations Decrease um-term and work safety education & training to

of these regulations such as failure in provision of improve employees' awareness of occupational

labor protection supplies as required administrative disease prevention and work safety.penalties such as fines and orders to suspend

production for rectification will be imposed on the 4.Detect occupational disease factors to ensure

Company by the regulatory authorities. This will not the safety of the working environment. Collect data and conduct

only disrupt the Company’s normal operation but on-site inspections

also impact the financial statement.

1.Establish employees' occupational health files

1.If serious occupational health and safety accidents keep abreast of employees' health conditions

occur in the Company it will draw the attention from Accident typeand show solicitude for employees' health.the general public and cause negative public opinion

bringing about damage to the Company's brand image 2.2Keep improving the emergency rescue

and a loss of consumers’faith in the Company's products system organize emergency drills at regular Hazard identification

Reputa- or services thereby affecting the Company's market intervals and improve the Company's

tion competitiveness. Revenue

Long-

Medium Medium Operation emergency response capabilities.Risk Decrease

term Influencing factors accident mechanism

2.If serious occupational health and safety accidents 3.Provide complete emergency supplies and

occur partners may worry about the Company's equipment to ensure quick alleviation of the

occupational health and safety management capabilities impact in case of safety accidents.and will re-evaluate the cooperative relationship with

the Company which will compromise the Company's 4.Organize occupational health and safety

supply chain stability and business expansion. system authentication to ensure manage-

ment compliance. Probability of the accident occurrence

1.Install occupational disease notification

1.An unhealthy working environment and frequent safety signs for positions involving occupational Inspect

accidents will lead to an increase in the absenteeism diseases and distribute occupational disease

rate of employees. Employees’ failure in maintaining normal protection supplies according to different ion

work attendance for health problems will affect the positions and types of work to ensure the

Opera- Company's production efficiency and work progress. Short- safety of employees. Risk evaluation Level of exposure to hazardous environment and

tional Cost Increase Medium Medium term Operation

Risk 2.To deal with occupational health and safety issues the 2.Reasonably arrange the laborer rest time assess

Company needs to invest more resources in safety for employees.management employee training and equipment ment

maintenance etc. which increases the Company's 3.Keep optimizing the occupational health and

management costs. safety management system to ensure the

effective operation of the management system. Severity of accident

The Company invests a lot of resources to maintain the 1.Establish a work safety responsibility system

Market operation of the occupational health and safety manage-

and a complete occupational health and work

Long-

Risk ment system which indirectly raises the product cost and Cost Increase Low Medium Operation

safety management process system.term

inflicts some impact on the Company’ s product competi- 2.Organize occupational health physical checkup

tiveness and price. Formulation of risk control planat regular intervals.Risk control

Oppor- Impact Impact Links of Financial Proba- Measures for risk reduction and prevention tunity Description Magni- Range the Value Countermeasures

Type Impact bility tude Chain

Man- Optimize the financial budget and management process

age- of occupational health and safety which will help not only Long- Leverage a smart safety management platform Safety Risk Management Flowchart

ment improve the overall operation efficiency of the Company Cost Increase Medium Medium term Operation to improve the efficiency in occupational health

Efficien- but also effectively reduce the risk of accidents thereby and safety management.cy avoiding the high financial costs caused by accidents.

95 96Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Indicators and Goals Safety Practices

During the reporting period the Company released the occupational health and safety goals for 2024. Guided by these goals it put in Investigation of Hidden Safety Hazards

place various occupational health and safety tasks and kept optimizing the management over occupational health and safety.In accordance with the principles "Whoever is in charge is responsible" and "All-staff All-process All-around All-weather" Huate

Gas has formulated the Hidden Hazard Investigation and Management Rules. The general manager serves as the first responsible person

for the hidden hazard troubleshooting work takes charge of the capital investment in hazard management and urges relevant

Occupational Health and Safety Goals Achieved (Yes/No) departments to formulate effective preventive measures etc. By establishing and improving the hidden hazard investigation and

management system the Company actively discovers and eliminates various hidden work safety hazards in a timely manner to

0 safety accidents for general accidents and above ensure the Company's work safety.

0 work-related injury accidents for serious injuries and above

0 fire accidents

0 food poisoning accidents

0 incidence of occupational diseases

100% intact rate of safety equipment and facilities100％ All Achieved

No more than 3 major work-related injury accidents per year

0 major safety hazards found during on-site inspections by government departments

100% pass rate of safety education and training

100% rectification rate of hidden safety hazards

100% ratio of special operation and special equipment operation personnel

working with certificates

Troubleshooting of Hidden Hazards

UOM 2024 2023 2022

Proportion of Deaths on Duty % 0 0 0

KPI

Deaths Related to Work Persons 0 0 0

Work-related Injuries Persons 0 0 0

During the reporting period the rectification rate of hidden safety hazard investigations was 100%.UOM 2024 2023 2022

Total Investment in Safety 10 Thousand Yuan 1681.69 1061.24 574.86

Investment Amount in Workers'

Compensation Insurance 10 Thousand Yuan 39.09 / /

Coverage Rate of Workers'

Compensation Insurance % 100 / /

Investment Amount in

Occupational Accident Insurance 10 Thousand Yuan 31.79 / /

Coverage Rate of Occupational

Accident Insurance % 100 / /

New Occupational Disease

Cases Cases 0 0 0

97 98Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Safety Emergency Management

To standardize emergency management and effectively improve the response to safety accidents the Company has formulated the

Production Safety Accident Emergency Plan in accordance with relevant laws and regulations such as the Work Safety Law of the People’s Republic

of China. The Company has set up an emergency rescue leading group under which there are 5 professional rescue teams. The Compa-

ny formulates annual emergency drill plan according to work safety risks and organizes various emergency plan drills to ensure the

employees’health and safety and the general public’s life safety.Intelligent Safety Management

By virtue of an intelligent safety management platform the Company has achieved real-time monitoring and multi-level early warning

Emergency rescue group for 376 flammable and toxic monitoring points 2 major hazard sources and 376 real-time data monitoring interfaces. It has also

completed the holistic design of the synchronous large-screen function on the computer terminal and the mobile terminal function

living up to all-around intelligent data management and control featuring "Rapid Perception + Real-time Monitoring + Alarm in

Advance+ Emergency Response + Systematic Evaluation" realizing integrated supervision over smart operation safety and reducing the

Emergency rescue Emergency probability of safety accidents.and fire extinguish- Communication Alert and evacua- Logistics support liaison team tion team team transportation and ing team medical aid team

Contractor Safety Management

Emergency Organization System

To strengthen the safety management over contractors and effectively prevent the occurrence of safety accidents the Company has

formulated the Contractor Safety Management Rules in accordance with the requirements of relevant laws and regulations. The HSE Depart-

ment as the main execution department is responsible for formulating the contractor safety supervision and management rules and

qualification review standards organizing HSE training for contractors and implementing assessments and inspecting and guiding the

KPI

development of the contractor's safety supervision work etc.By signing a project HSE agreement with contractors the Company clarifies the HSE responsibilities and HSE risk prevention & control

During the reporting period the Company organized 71 work safety emergency drills. requirements of both sides. Also it conducts HSE education and risk disclosure for contractors in advance to maintain the safety of the

working environment and shore up the safety defense line for the Company's stable operation.Employees' Occupational Health

The Company has established a complete occupational health monitoring mechanism to detect occupational disease hazard factors at

regular intervals. It has established monitoring and evaluation ledgers to detect occupational disease hazard factors in the workplace

and conduct occupational health examinations on a regular basis. In addition the Company has installed occupational disease protection

tools as required renovated facilities for reduction of hazards and informed the employees of occupational disease hazards before they

take up jobs. It has set up occupational disease hazard notification boards and warning signs at eye-catching places of production

workshops and work positions as a way to reduce the health risks of occupational diseases.Emergency Drill for Work and Production Resumption The Company conducts occupational health examinations for employees exposed to occupational disease hazards before taking up

posts during their tenure when leaving their posts and in emergencies. For patients suspected of suffering from occupational disease

it reports to the local health department and arranges employees to undergo occupational disease diagnosis or medical observation.

99 100Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Key Indicators UOM 2022 2023 2024

Charitable Donations 10 Thousand Yuan 66.11 44.84 52.76

Public Welfare Project Activities Times / 4 2

Person-times of Employees as Public

Welfare Volunteers Person-times / 480 230

People Receiving Assistance Persons / 3000+ 2000+

Physical Checkup in the Factory Area

Rural Revitalization

With a strong sense of social responsibility and mission Huate Gas responds to the Central Government’s rural revitalization strategy

KPI and actively contributes to rural revitalization interpreting corporate responsibilities with practical actions.During the reporting period the Company actively participated in the “High-Quality Development Promotion Conference for theNew-type Rural Collective Economy in Nanhai District & the Common Prosperity "100 Million + 1" Action Program” helping to promote

During the reporting period the pass rate of the Company's detection of occupational disease hazard factors was 100%.the high-quality development of the new-type rural collective economy and pushing ahead with the improvement and beautification of

rural hardware facilities and living environment in Nanhai.case

The "100 Million + 1" Action for the High-Quality Develop-

ment of the New-type Rural Economy in Nanhai District

On July 2 2024 at the High-Quality Development Promotion

Public Welfare Conference for the New-type Rural Collective Economy in Nanhai District the Company signed a pairing agreement with

the Taiping Community of Dali Township becoming a part of

the Common Prosperity "100 Million + 1" Action Program.Social Public Welfare Program Through this cooperation Huate Gas helped improve the quality and efficiency of the Taiping Community's collective economy

promoted the improvement of rural hardware facilities and the

While pursuing high-quality development the Company has always cherished a strong sense of patriotism and great love to the optimization of the living environment jointly explored a new

country. It actively participates in public welfare and charity activities and fulfills its corporate social responsibilities in assistance path for the high-quality development of the new-type rural

for students in need etc. collective economy in order to achieve win-win cooperation

and common development and do its bit for rural revitalization.Since it actively participated in Meizhou City’s "June 30th" Rural Revitalization Campaign the Company won the "Bronze Prize of the 2023 Meizhou

Poverty Alleviation and Assistance Award" for its outstanding contributions.Huate Gas will insist on the high-quality development path keep fulfilling its social responsibilities and deepen its investment and

practice in rural revitalization. It will continuously explore to innovate in assistance pattern integrate competitive resources and do its

bit for promoting the poverty alleviation cause to a new height and supporting the prosperity and development of the countryside.

101 102Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Appendix

Key Indicator Table

Key Indicato UOM 2024 2023 2022 Key Indicato UOM 2024 2023 2022

Economic Performance Total Energy Consumption Intensity tce/million yuan 3.89 / /

Total Assets 100 million yuan 33.01 31.62 23.95 Revenue

Net Asset Attributable to Shareholders 100 million yuan 19.50 18.25 15.42 Direct Energy Consumption tce 3159.37 / /

Indirect Energy Consumption tce 2268.37 / /

Operating Revenue 100 million yuan 13.95 15 18 Environmental Compliance Management

Net Profit Attributable to Shareholders 100 million yuan 1.85 1.71 1.29 Total Investment in Environmental Protection 10 thousand yuan 140.66 94.47 52

Operating Cash Flow 100 million yuan 2.94 1.70 / Synchronous Operation Rate of Environmental

Total Tax Payment 100 million yuan 0.70 0.93 0.85 Protection Facilities % 100 100 100

Basic Earnings per Share yuan/share 1.54 1.43 / Implementation Rate of the "Three Simultaneous" for

Weighted Average Return on Net Assets % 9.76 9.77 / Construction Projects in terms of Environmental Protection

%100100100

Gas/Pressure Vessel Explosion and Major Leakage Accidents. items 0 0 0

Social Contribution Value 100 million yuan 4.37 4.19 / Annual Fire Accidents items 0 0 0

Social Contribution Value per Share yuan/share 3.63 3.48 / Hazardous Chemical / Waste Leakage Accident items 0 0 0

Party Building Environmental Data Disclosure Non-Compliance Incident items 0 0 0

Number of Party branches / 1 / / Other Major Environmental Violations items 0 0 0

Number of Party members person 17 / / Environmental Risk Emergency Drill times 7 6 7

Governance Environmental Protection Training Sessions. times 6 6 /

Number of Shareholders’Meetings Held times 4 4 3 Environmental Compliance Management-Pollution Prevention and Ecosystem Protection

Annual Shareholders' Meeting times 1 / / Wastewater Discharge t 59885 46333 /

Extraordinary Shareholders' Meeting times 3 / / Wastewater Recovery and Utilization t 10060 9159 /

Exhaust Gas Discharge t 1502.3 1702.1 /

Proposal Deliberations at Shareholders' Meetings items 19 16 / Reneral Industrial Solid Waste Production t 107.49 82.26 /

Board of Director persons 7 7 7 Reneral Industrial Solid Waste Disposal Volume t 107.49 82.26 /

Independent Director persons 3 3 3 Hazardous Waste Production t 42.21 35.56 /

Female Director persons 2 2 2 Hazardous Waste Disposal Volume t 42.21 27.24 /

Number of BOD Meetings Held times 16 14 8 Training on Three Wastes (Wastewater Emissions

Proposal Deliberations at BOD Meetings items 62 47 / Solid Waste) Discharge and Disposal

times 6 6 /

Number of Special Committee Meetings Held times 11 11 7 Rational Distribution of Resources

Diesel Oil t 2407.827 2762.40 747

Proposal Deliberations at Special Committee Meetings items 27 23 /

Liquefied Petroleum Gas t 87.99 111.58 /

Board of Supervisor persons 3 / / Purchased Electricity kWh 18441995.72 10129154.65 10348258.23

Supervisor of Staff persons 1 / / Total Water Consumption t 156696 118376 66576

Number of Board of Supervisors Meetings Held times 8 / / Product

Proposal Deliberations at Board of Supervisors Meetings items 25 / / Innovation & Intellectual Property Protection

Internal Control Training Sessions times 26 20 20 R&D Investment 10 thousand yuan 4892.15 5042.88 6011.84

Employees Participating in Internal Control Training persons 550 15 15 Cumulative Number of Granted Invention Patents items 244 213 172

Regular Report Disclosure pieces 4 4 / Trademarks items 51 51 45

Interim Report Disclosure pieces 104 153 / Innovation-R&D Team

Personnel in the R&D team persons 172 / /

Regular Earnings Briefings times 3 4 3 By Educational Background

Investor Open Day times 1 1 1 Below bachelor’s degree persons 80 / /

SSE E-Interactive Responses times 40 49 28 Bachelor’s degree persons 82 / /

Investor Inquiry Response Rate % 100 100 100 Master's degree persons 8 / /

Dividend per 10 Shares (Tax Included) yuan 6 5 3.99 Ph.D persons 2 / /

Cash Dividend Amount (Tax Included) yuan 71813865.60 59941393.50 47893302.82 By Age

Proportion of Cash Dividend Amount in Total Profit Under 30 years old (excluding 30 years old) persons 42 / /

Distribution to Shareholders % 38.86 35.03 23.22 30 ~ 40 years old (including 30 years old excluding persons 80 / /

Business Ethics-themed Training Sessions times 25 25 2 40 years old)

40 ~ 50 years old (including 40 years old excluding

Major Incident of Violating Integrity in Operations times 0 0 0 50 years old) persons 37 / /

InfoSec Training Sessions times 5 4 / 50 ~ 60 years old (including 50 years old excluding

Incident of InfoSec times 0 0 0 60 years old) persons 12 / /

Over 60 years old persons 1 / /

Envrionmental Protection Core Technical Personnel persons 4 / /

Response to Climate Change Changes in R&D Personnel persons 6 / /

Total GHG Emissions （Scope 1 + Scope 2） tCO2e 16027.13 14794.35 12668.88 Supply Management

Materials and material-related suppliers / 1348 / /

Direct GHG Emissions (Scope 1) tCO2e 7728.23 9017.69 /

Number of Domestic Suppliers / 1334 / /

Direct GHG Emission Intensity (Scope 1) tCO2e/million yuan Revenue 5.54 6.01 / Number of Overseas Suppliers / 14 / /

Indirect GHG Emissions (Scope 2) tCO2e 8298.90 5776.66 / Supplier Evaluation Completion Rate %

100100/

Proportion of Suppliers with Quality Management

Indirect GHG Indirect GHG Emissions (Scope 2) tCO2e/million yuan % 100 / /Revenue 5.94 3.85 / System Certification

Total Energy Consumption tce 5427.74 / /

103 104Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Key Indicato UOM 2024 2023 2022 Key Indicato UOM 2024 2023 2022

Proportion of Suppliers with Environmental Labor Contract Coverage % 100 100 97.57

Management System Certification % 100 / / Coverage of Five Insurances & One Housing Fund % 100 100 98.82

Proportion of Suppliers with Occupational Health and

Safety Management System Certification % 100 / / Labor Discrimination Incidents. items 0 0 0

Signing Rate of the Honest and Integrity Agreement among Incidents on Misuse of Child Labor Forced Labor or

all Suppliers % 100 100 / Insult and Harassment.items 0 0 0

Quality Assurance Employee Turnover persons 162 / /

Total Duration of Quality Culture Training hour 12 / / Employees Enjoying Maternity Leave persons 12 6 /

Quality Culture Training Sessions times 5 / / Return-to-work Rate after Enjoying Maternity Leave % 100 83.33 /

Participants in Quality Culture Training Person-times 412 / / Employees Enjoying Parental Leave persons 15 2 /

Quality Risk Assessments times 6 / / Employees Enjoying Parental Leave % 100 100 /

Product Pass Rate % 99.97 / / Compensation and Welfare

Internal Quality Audits within the Year times 4 / /

Grant Restricted Shares to Employees persons / 25 /

Sampling Inspections by Third-Party Agencies times 80 / /

Percentage of Products That Need to Be Withdrawn Grant of Restricted Shares 10 thousand shares / 32.92 /

and Recalled Due to Health and Safety Reasons % 0 / / Welfare Expenditure 10 thousand yuan 2786.04 2767.63 /

Number of Negative Public Opinions on Company's times 0 / / Statutory Welfare Expenditure 10 thousand yuan 1536.00 1530.89 /Product Quality Non-statutory Welfare Expenditure 10 thousand yuan 1250.03 1236.74 /

Customer Service Employee Training & Development

Customer Complaints times 9 10 /

Training Investment 10 Thousand Yuan 38.87 53 33.6

Customer Complaints Disposal Rate % 100 100 /

Comprehensive Customer Satisfaction Rate % 98.5 97.12 / Trained Staff Person-times 9358 8322 4400

Incidents of Infringing on Customer Privacy or Trained Executive Person-times 35 20 /

Leaking Customer Information items 0 0 0 Total Duration of Employee Training Hour 185555 127923 173394

Information Security and Privacy Protection Average Duration of Training Received by Each

Employee per Year Hour 623 538 24InfoSec Training Sessions times 5 4 2

Participation in InfoSec Training Person-times 60 31 24 Employee Training Coverage Rate % 100 100 100

Employee Coverage of InfoSec Training % 86 82 80 Certified Internal Trainer persons 19 16 /

Total Investment in Data Security 10 thousand yuan 50 70 50 Internal Transferees or Internal Job Applicants persons 56 / /

Information Security Incident items 0 0 0 Occupational Health and Safety

Employee Total Investment in Safety 10 thousand yuan 1681.69 1061.24 574.86

Employees' Rights and Interests

Food Poisoning Accidents items 0 0 0

New Employees persons 152 153 116

Social Recruitment persons 57 / / Incidence of Occupational Diseases items 0 0 0

Campus Recruitment persons 6 / / Major Driving Accident items 0 0 0

Other Recruitment Channels persons 89 / / Deaths on Duty items 0 0 0

Employees in Total persons 1200 1186 1156 Safety Inspection items 145 41 12

Gender Structure Identify Safety Hazards items 719 172 71

Female persons 212 416 203 Rectification Rate of Hidden Safety Hazard Investigations % 100 100 100

Male persons 988 770 953 Safety Emergency Drills times 71 40 /

Age Structure Safety Training times 127 107 281

Below 30 years old (excluding 30 years old) persons 201 253 / Employee Physical Examination Coverage % 100 100 100

31 - 50 years old (including 30 years old excluding 50 persons 769 777 / Rate of Special Operation Personnel Holding Certificates % 100 / /years old) Investment Amount in Workers' Compensation Insurance 10 thousand yuan 39.09 / /

50 years old and above persons 230 156 / Coverage Rate of Workers' Compensation Insurance % 100 / /

Educational Background Structure Investment Amount in Occupational Accident Insurance 10 thousand yuan 31.79 / /

Ph.D persons 2 / /

Coverage Rate of Occupational Accident Insurance % 100 / /

Master’s Degree persons 16 / /

New Occupational Disease Cases items 0 / /

Bachelor’s Degree persons 270 / /

Junior college and below persons 912 / / Public Welfare

Professional Structure Charitable Donations 10 thousand yuan 52.76 44.84 66.11

Production persons 339 336 / Public Welfare Project Activities times 2 4 /

Sales persons 119 119 / Person-times of Employees as Public Welfare

Volunteers Person-times 230 480 /

Technology persons 172 166 /

Finance persons 42 45 / People Receiving Assistance persons 2000+ 3000+ /

Administration persons 75 78 /

Transportation persons 316 319 /

Others persons 137 123 /

Ethnic Minority Employees persons 29 29 20

Disabled Employees persons 8 8 4

105

106Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Appendix

Indicators Index Index of Indicators in the Self - regulatory Guidelines for Listed Companies on the Shanghai Stock Exchange No. 14 -Sustainable Development Report (For

Trial Implementation)

Report Chapter GRI Standards CASS-ESG 6.0 Dimension NO. Issue Chapter

About This Report 2-1，2-2，2-3 P1.1-1.2 1 Responding to Climate Change Response to Climate Change

Message from the Chairman 2-22 P2.1 2 Pollutant Discharge Environmental Compliance Management

About Huate Gas 2-6 P3.1-3.3 3 Waste Disposal Environmental Compliance Management

Sustaianble Governance 2-9，2-14，3-1，3-2，3-3 G1.1.1-1.1.7，G1.1.9，G1.2，G1.3

4 Ecological System and Biodiversity Protection Environmental Compliance Management

/ / Environment

Corporate Governance 5 Environmental Compliance Management Environmental Compliance ManagementGovernance 2-9 G1.1，G1.2

Investor Relations

207-1 G1.2.3，G1.2.4 6 Energy Utilization Rational Allocation of ResourcesManagement

Investor Relations

Management / G1.7，G1.8 7 Water Resource Utilization Rational Allocation of Resources

Business Ethics 205-2 G2.1

8 Circular Economy Rational Allocation of Resources

Response to 3-3，305-1，305-2 E1.1.1-E1.1.4，E1.1.6，E1.1.7

Climate Change 305-4，305-5 E1.1.8，E1.1.14，E1.1.16 9 Rural Revitalization Public Welfare

Environmental 2-9，2-27，303-4，306-1，Environment Compliance E2.1.1，E2.1.6，E2.2.1-E2.2.6

10 Social Contribution Public Welfare

306-2，306-3，306-4，

Management E3.3.4，E2.3.5，E2.4.1-2.4.4306-5，304-2 11 Innovation-driven Innovation- Driven

Rational

Allocation of 2-9，2-27，3-3，302-1 E3.1.1，E3.1.3，E3.2.1，E3.2.2

302-3，302-4，303-3 12 Science and Technology Ethics /Resources

Innovation- Driven 203-2 S2.1.1-2.1.11 13 Supply Chain Security Supply Management

Supply Management 308-1，414-1 S3.1.1-3.1.4 Equal Treatment of Small and

Social 14

Product Medium-sized Enterprises

/

Quality Assurance 417-1 S3.3.1-3.3.3

Customer Service Quality Assurance

Management 418-1 S3.3.4，S3.3.6

15 Product and Service Safety and Quality

Customer Service Management

Shoring up Information

Defense Line 3-3 S3.4.1-3.4.2 16 Data Security and Customer Privacy Protection Shoring up the Information Defense Line

2-19，2-27，401-1，401-2

S4.1.1，S4.1.3-S4.1.7

Compliant Employment 401-3，405-1，406-1 Compliant Employment

S4.1.9，S4.1.11

408-1，409-1 Employee Democracy

17 Employees

Employee Growing

Employee Democracy 2-30 S4.1.12 Occupational Health and Safety

Employee

Employee Growing 404-1，404-2，404-3 S4.3.1，S4.3.3-4.3.6

18 Due Diligence Importance Issue Analysis

Occupational Health 403-1，403-2，403-3

and Safety S4.2403-5，403-6，403-7 Sustainable 19 Communication with Stakeholders Communication with Stakeholders

Public Welfare 203-1，413-1，415-1 S1.1.2，S1.1.3，S1.2.1-1.2.4 Development

Governance 20 Anti-commercial Bribery and Anti-corruption

Indicators Index / A3 Business Ethics

Appendix 21 Anti-unfair Competition

Feedback form / A6

107 108Guangdong Huate Gas ENVIRONMENTAL SOCIAL AND GOVERNANCE (ESG) REPORT

Feedback form

Dear Readers:

Thank you very much for reading this report. We attach great importance to and look forward to receiving your feedback on this

report. Your opinions and suggestions are an important reference for us to keep improving the corporate ESG information disclo-

sure and promote corporate ESG management & practice. You are welcome to bring forth your valuable opinions and we sincerely

thank you for your kindness!

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Please contact us via the following ways:

Mailing Address:East Side of WentoulingjiaoJinfeng RoadFengxi VillageHeshunLishui

TownNanhai DistrictFoshan CityGuangdong ProvinceChina

Tel:0757-81008813

Website:http://www.huategas.com

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