ENVIRONMENTAL SOCIAL AND

GOVERNANCE REPORT

2024 Environmental Social and

Governance Report

The Leader in Healthy Comfortable EnvironmentsAbout the report 01

Message from the Chairman 03 Responsibility as Our Anchor

About Us 05 Product Security 45

Employee Security 55

Supply Chain Security 65

Social Security 68

Strengthening the Core of Governance

Corporate Governance 11

Integrity and Compliance 13

ESG Governance 18 KPI Table

Environmental KPI 71

Social KPI 74

Governance KPI 77

Sustainability as Our Shield

Climate Dun-Climate Protection 27

Circular Dun Circular Economy Initiatives 35 Index of Indicators 79

Environmental Dun Environmental Protection Practices 37 Feedback Form 80

Ecological Dun Biodiversity Protection 422024 Environmental Social and Governance Report About the report

About the report

Overview of the report Dimension Indicator DunAn Automotive Thermal Zhejiang DunAn Electro-Mechan-

Management Technology Co. Ltd. ical Technology Co. Ltd.(“DunAn Automotive ThermalThis report is the 2024 Environmental Social and Governance (ESG) Report released by Zhejiang DunAn Artificial Environment Co. Ltd. (“DunAn Electro-Mechanical”)Management”)

(hereinafter referred to as "DunAn Environment" "DunAn" "the Company" or "we"). The reporting period covers January 1 2024 to Green Product Innovation √ √

December 31 2024. To enhance data comparability and content continuity certain information has been appropriately extended beyond

the reporting period. Going forward DunAn will publish a Sustainability Report annually to regularly disclose its annual operational Energy Consumption √ √

achievements beyond financial performance and to demonstrate its commitment to sustainable development through concrete actions. Green Product Innovation √ √

Environmental Water Resource Consumption √ √

Performance

Report Scope and Reliability Material Recycling and Utilization √ √

Pollutant Emissions √

Automotive Thermal Management Technology Co. Ltd. and Zhejiang DunAn Electromechanical Technology Co. Ltd. The specific

√√

boundaries of the disclosed information are illustrated in the figure below. For social performance indicators except for supply chain Environmental Compliance Management

security all other metrics include DunAn and all its subsidiaries. All monetary amounts in this report are presented in Renminbi (RMB). Ecological Risk Identification √ √

The data used in this report is sourced from the company's annual reports official documents and statistical records. The Board of Product Quality Assurance √ √

Directors of the Company guarantees that the contents of this report are true accurate and complete without any false statements

R&D Innovation and Intellectual Property Protection √ √

misleading representations or material omissions and assumes individual and joint responsibility for the authenticity accuracy and

Social

completeness of the information disclosed. Performance Data Security and Customer Privacy Protection

√√

Employees √ √

Dimension Indicator Zhejiang DunAn Hetian Zhejiang DunAn Zhejiang DunAn Thermal Metal Co. Ltd. Machinery Co. Ltd. Technology Co. Ltd. Supply Chain Security

(“DunAn Hetian”) (“DunAn Machinery”) (“DunAn Thermal”)

Integrity and Anti-Corruption √ √

Green Product Innovation √ √ √ Governance

Anti-Unfair Competition √ √

Energy Consumption √ √ √ Performance

Tax Compliance √ √

Green Product Innovation √

Environmental Water Resource Consumption √ √ √

Performance Material Recycling and Utilization √ √ Basis for Report Preparation

Pollutant Emissions √ √

United Nations Sustainable Development Goals (SDGs)

Environmental Compliance Management √ √ √ Global Reporting Initiative (GRI) Sustainability Reporting Standards

Ecological Risk Identification √ √ √ Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 3 Preparation of Sustainability Reports

Product Quality Assurance √ √ √ Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 17 Sustainability Reporting (Trial)

R&D Innovation and Intellectual Property Protection √ √ √

Social

Data Security and Customer Privacy Protection √ √ √ Report Access and CommunicationPerformance

Employees √ √ √ This report is published in the form of an electronic version in simplified Chinese and English which can be found on the Company's

Supply Chain Security √ √ website. If you have any suggestions or questions about this report you are welcomed to contact us by email (dunanhj@dunan.cn).Integrity and Anti-Corruption √ √ √

Governance

Performance Anti-Unfair Competition √ √ √

Tax Compliance √ √ √

01 022024 Environmental Social and Governance Report Message from the Chairman

Message from the Chairman

Global climate change continues to pose increasingly urgent and stringent demands on the green and low-carbon transformation of the Sustainability as Our Shield: Building a Healthier Environment Through Harmony with Nature

refrigeration industry. As a refrigeration and environmental solutions provider with nearly four decades of technological heritage DunAn We took proactive steps in 2024 to optimize our energy structure by increasing the adoption of renewable energy sources such as solar

Environment launched the“ Super Silent” electronic expansion valve in 2024 integrating 87 patented technologies to successfully power to reduce carbon emissions. By improving production processes and resource recovery systems we enhanced water recyclingovercome the persistent noise challenge in the VRF (Variable Refrigerant Flow) sector. We also advanced our“ energy-efficient green and efficiency and reduced waste from copper materials and pallet packaging ensuring the efficient use of resources. At the same time weeco-friendly” product strategy leading the industry toward a more sustainable future. strengthened our environmental compliance systems and enhanced pollutant monitoring and management mechanisms to ensure all

In 2024 thanks to our continuously enhanced product capabilities and operational excellence DunAn Environment achieved another emissions meet national standards—putting our green development philosophy into tangible practice.record-breaking performance in both revenue and profitability. It was also a landmark year in our sustainability journey. We participated in

the international EcoVadis sustainability rating and were awarded a Bronze Medal—an affirmation of our alignment with global standards Responsibility as Our Anchor: Creating Shared Value Through Inclusive Growth

in sustainable development. DunAn remained committed in 2024 to achieving mutual success with all stakeholders. Through ongoing product innovation and service

excellence we created long-term value for our customers. Globally a total of 887 patent（ 397 overseas）applications were filed. A total of

Strengthening the Core of Governance: Integrity as the Foundation for Sustainable Growth 463 patents（ 108 overseas） were granted. By the end of the year the total number of granted patents reached 3738（ 292 overseas. ThisIn 2024 we continued to refine our ESG governance framework by establishing a dedicated Sustainability Committee and embedding ESG demonstrates our unwavering pursuit of technological innovation. On the people front we cultivated an equal and inclusive workplace

principles into all aspects of corporate governance management and execution. These actions have laid a strong institutional foundation and supported employee growth through flagship training programs such as the“ Three Eagles Talent Development Program” and the

for our sustainable growth. Through enhanced compliance and risk management improved information disclosure and strengthened “Blue Force Initiative.” In our supply chain we built a sustainable ecosystem that ensures security and resilience protects the interests of

investor relations we have further raised the standard of our corporate governance. In key areas such as anti-bribery and anti-monopoly small and medium-sized partners and achieves mutual benefit and shared success.practices we conducted over 10000 specialized training sessions covering all members of our senior management team. We firmly believe To our valued stakeholders every step of DunAn Environment’s progress has been made possible through your trust and support. Looking

that sound governance not only safeguards our growth trajectory but also enables DunAn to establish a core competitive advantage in the ahead we will continue to align with the“ 2030 Sustainable Development Goals” remain driven by innovation and excellence and work

global marketplace. hand in hand with you to tackle new challenges unlock greater opportunities and co-create a greener better and more sustainable future.Fang Xiangjian

Chairman Zhejiang DunAn Artificial Environment Co. Ltd

Apr. 2025

03 042024 Environmental Social and Governance Report About Us

About Us

Industrial Presence

Company Overview

The company has established subsidiaries or sales offices in North America Europe Japan South Korea Thailand India and

Zhejiang DunAn Artificial Environment Co. Ltd. envisions becoming a“ leader in healthy and comfortable environments” and upholds the Malaysia with a manufacturing facility located in Thailand.mission of“ improving energy efficiency and optimizing the environment.” With years of dedicated focus in the refrigeration industry the

company’s core business spans three major areas:

Component Manufacturing: Production of refrigeration valves heat exchangers and pressure vessels for residential and commercial

air conditioners heat pumps cold storage and refrigeration applications.Equipment Manufacturing: Development of commercial central air conditioning systems and specialized HVAC solutions for nuclear

power purification rail transit energy storage and cold chain systems. 5 R&D Layout

New Energy Vehicle Thermal Management: Manufacture of core components for thermal management systems in new energy vehicles.The company was listed on the Shenzhen Stock Exchange in 2004 (stock abbreviation: DunAn; stock code: 002011). R&D Centers in Hangzhou

Tianjin Diankou Wuhu Zhuhai and

Shijiazhuang Thailand

Economic Performance

Hefei Suzhou

Nantong

Wuhu

Total Assets Operating Revenue Net Profit Total Tax Payment 18 Production basesHangzhou

Group Location

Dianko

Chongqing

Nanchang Zhuji2 Thailand2 Hangzhou

RMB 12.153 billion RMB 12.678 1.040 Changshabillion RMB billion RMB 491 million Zhuhai2 Zhongshan Nantong2

Suzhou Hefei Wuhu Nanchang

Zhuhai

Thailand Zhongshan Chongqing Tianjin Shijiazhuang

Changsha

Corporate Culture

To be a leader in healthy and

comfortable environments Cor Integrity Respect and Professionalismn e V

9 overseas companies

DunAn Europe(Germany) or sales offices

DunAn Japan

DunAn Precision There are overseas companies or

DunAn Korea

India Office sales offices in North America

DunAn Thailand

Vietnam Office

Europe Japan South Korea

Malaysia Office

To improve energy efficiency ion Ph With continuous innovation as the Indonesia Office Thailand India Malaysia and other d

and optimize the environment Bran “Dun“ customer value as the“ An” places

0506

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Mis

s2024 Environmental Social and Governance Report About Us

Technological Strength Honors and Awards

As a global leader in the refrigeration components industry the company is a strategic partner to numerous well-known air conditioning

manufacturers worldwide with its core products consistently ranking among the top in global production and sales volumes. Innovation China Standard Innovation

is regarded as the driving force behind the company's development continuously enhancing its core competitiveness in technology and National Quality Award Contribution Award

quality leadership. The company is equipped with a Nationally Accredited Enterprise Technology Center a National Postdoctoral Research

Station an Academician Workstation a CNAS-certified laboratory and a National Full-Performance Testing Center for Central Air Condi- Second Prize of National Science andTechnology Progress Award National innovative pilot enterprises

tioning. It has established a robust core technology support system with independent intellectual property rights. To date the company

has participated in the drafting and revision of 101 national and industry standards and has been honored with prestigious awards such Leading low-carbon development China Standard Innovation

as the National Quality Award National Innovative Enterprise Pilot Second Prize of the National Science and Technology Progress Award enterprise Contribution Award

and the China Patent Excellence Award.The company has actively participated in the drafting and revision of 101 national and industry standards including: CHINA Executive Director Unit of "Double carbon" work

REFRIGERATION China Refrigeration and leading group deputy

Direct-acting Electronic Expansion Valves for Air Conditioners

and AC Air Conditioning leader unit

Solenoid Valves for Air Conditioning and Refrigeration Association

Copper Refrigerant Stop Valves for Air Conditioning

Electronic Expansion Valves for CO2 Refrigeration Systems

Solenoid Valves for CO2 Refrigeration Systems

Rooftop Air Conditioning Units

Vapor Compression Cycle Chillers (Heat Pump Units) Part 1: Chillers (Heat Pumps) for Industrial Commercial and Similar Use

Among these the company served as the lead drafting organization for 18 standards.DunAn is also the first enterprise in China to independently develop and manufacture nuclear-grade chillers for nuclear power plants

with proprietary intellectual property rights. Additionally it successfully completed the independent R&D of the first domestically-pro-

duced AP1000 reactor top-mounted fan a key component for passive nuclear power plants.Industry Position

The Company is a member of the Air-Conditioning Heating and Refrigeration Institute (AHRI) in the United States and the European Heat

Pump Association (EHPA). It also serves as an executive director unit of the China Association of Refrigeration and Air-Conditioning

Industry a council member of the Chinese Association of Refrigeration a member of the China Association for Quality and a vice president

unit of the Zhejiang Refrigeration and Air-Conditioning Industry Association.

07 08Strengthening the Core of Governance

Laying a Solid Foundation for Long-Term Development through Global Reporting Initiative Sustainability

Integrity in Operations Reporting Standards (GRI Standards)

This Section Addresses:the United Nations Sustainable Development Goals (SDGs) GRI 2 General Disclosures 2021

GRI 205 Anti-corruption 2016

GRI 206 Anti-competitive Behavior 2016

GRI 207 Tax 2019

Shenzhen Stock Exchange Guidelines for

Self-Regulation of Listed Companies No. 17

Sustainability Reporting (Trial Version)

Anti-commercial bribery and anti-corruption

Anti-unfair competition

09 102024 Environmental Social and Governance Report Strengthening the Core of Governance

Corporate Governance

组织简介 Board Diversity

In accordance with the Company Law of the People's Republic of China the Securities Law of the People's Republic of China The Board of Directors is accountable to the General Meeting of Shareholders and operates in strict accordance with national laws

the Code of Corporate Governance for Listed Companies and other applicable laws regulations and normative documents the regulations and the Company’s Articles of Association. Drawing on extensive experience the Board effectively oversees the Company’s

Company has established and implemented a series of internal governance systems including the Articles of Association and strategic direction manages key risks provides guidance to the management team deliberates and approves major decisions supervises

Rules of Procedure for Shareholders’ Meetings. A governance framework comprising the General Meeting of Shareholders the business operations and evaluates corporate performance. The Company lawfully and compliantly conducts director nomination

Board of Directors the Board of Supervisors and the Executive Management has been put in place. procedures and exercises governance over their responsibilities. Emphasizing board diversity the Company strives to enhance the

The General Meeting of Shareholders exercises its legal rights as stipulated by laws and the Articles of Association including representativeness of its Board in terms of gender experience qualifications and professional background thereby supporting

making decisions on major issues such as corporate strategy significant financing investments and profit distribution. The more comprehensive and professional decision-making for the Company’s development. As of the end of the reporting period the

Board of Directors which is accountable to the shareholders holds the power of strategic decision-making and has established Board of Directors consisted of nine members including six non-independent directors and three independent directors.several specialized committees under it: the Strategy Committee the Remuneration and Appraisal Committee the Nomination

The Proportion of Independent Directors in Each Specialized Committee under the Board is as follows:

Committee and the Audit Committee. The Executive Management is responsible for the Company’s daily operations executing

the resolutions of the Board of Directors implementing strategic objectives and ensuring efficient and compliant corporate

operations. Meanwhile the Board of Supervisors accountable to the shareholders oversees the lawful performance of duties

by directors and senior management. The Company continuously improves its corporate governance structure to fundamentally

Remuneration

safeguard the legitimate rights and interests of shareholders and creditors. Strategic and Appraisal Nomination AuditCommittee Committee Committee Committee

60%60%60%67%

Governance Structure

Shareholders' Association In 2024 all of the directors supervisors senior management personnel and key employees participated in continuous supervision

training. The training covered regulatory requirements and key focus areas for ongoing supervision reminders regarding information

Elections Report Elections Report

disclosure standardized operations of listed companies penalties and impacts of supervision violations and case studies of enforcement

Board of Directors actions related to continuous supervision.Formulate Supervise

Establish Report

Diligent Fulfillment of Duties

Strategic Committee During the reporting period the Company held a total of 4 General Meetings of Shareholders 7 Board Meetings and 4 Supervisory Board

Meetings. All major decisions were made in accordance with the law through the Shareholders’ Meeting the Board of Directors and the

Committee

Supervisory Board. In this reporting year the attendance rate of all directors at Board meetings reached 100%. Each specialized committeeAudit Committee of the Board provided professional and objective opinions and suggestions within their respective areas of responsibility to the“ ThreeCompensation committee Committees” (Shareholders’ Meeting Board of Directors Supervisory Board) thereby offering strong support for the Company’s sound

decision-making.Nomination Committee

Guide Report

Execute Supervise

Executive Management

11 12Superisory Board

Report

Supervise and guide

Formulateinternal management systemsana

administrative measures2024 Environmental Social and Governance Report Strengthening the Core of Governance

Information Disclosure

Line of Defense Responsible Party ResponsibilitiesAdhering to the mission of“ creating value for customers generating benefits for the enterprise providing opportunities for employeesand contributing wealth to society” the Company has established a standardized information disclosure system in accordance with

As the first line of defense business departments are responsible

relevant laws and regulations as well as the disclosure requirements for listed companies set by the Shenzhen Stock Exchange. By First Line Business for identifying assessing and addressing risks in daily operations.implementing the Information Disclosure Management System the Company fulfills its disclosure obligations ensuring that all disclosed of Defense Departments They implement appropriate control measures to ensure compliance

information is truthful accurate and complete. This guarantees shareholders and creditors the right to be informed about the Company’s in business processes.operations and material matters. During the reporting period the Company published a total of 115 announcements.Functional departments are responsible for risk assessment and

Information Disclosure Channels Securities Daily Securities Times and CNINFO(www.cninfo.com.cn)

Second Line monitoring timely identification of emerging risks establishing and Functional improving risk management systems and processes promoting

of Defense Departments standardization providing professional support and organizing

relevant training for business departments.Investor Relations Management

The Company continuously strengthens and improves its investor relations management. Through multiple channels such as the The internal control department independently and objectively

Interactive Platform hotline email fax and joint research activities the Company maintains effective communication with investors— reviews and evaluates the Company’s overall risk management

and compliance status. It is responsible for supervision and auditing

particularly small and medium-sized investors. By actively listening to their opinions and suggestions regarding business operations and

Third Line to ensure that business activities comply with laws regulations and future development the Company fosters positive interaction and engagement. Efforts are made to ensure that investor relations are Internal Control internal policies. It identifies potential risks provides improvement

of Defense

managed with integrity and professionalism upholding the principles of fairness impartiality and transparency. The Company guarantees Department suggestions and ensures timely resolution. It also continuously

that all shareholders fully enjoy their legal rights and interests as stipulated by applicable laws regulations and rules. enhances the anti-corruption and anti-bribery management system

to ensure the ongoing effectiveness of risk and compliance

management.Integrity and Compliance

Enhancing Internal Control Systems

The Company strictly adheres to the Company Law of the People’s Republic of China The basic norms of internal control and its

Compliance Management supporting guidelines as well as relevant requirements issued by regulatory authorities such as the China Securities Regulatory

DunAn attaches great importance to compliance management and is committed to establishing a comprehensive systematic compliance Commission (CSRC) and the Shenzhen Stock Exchange. Taking into account its own business characteristics and management needs

framework. The Company has formulated and issued a series of regulatory documents including the Contract Management Regulations the Company has comprehensively established and continuously optimized its internal control system to ensure its effective operation

Internal Audit Management Regulations Case Management Measures and Business Confidentiality Protection Regulations. Its compliance and the absence of material deficiencies. The Company also continues to improve its risk management system by strengthening

management efforts focus on areas such as bribery production safety environmental protection and bidding compliance. In 2024 the processes related to risk identification assessment response and mitigation along with training and crisis response measures. These

Company experienced no major compliance-related risk incidents and was not involved in any significant litigation cases. efforts aim to promote the ongoing development of a comprehensive risk management framework.The Company has built a compliance management system centered around the "three lines of defense" fully integrating compliance

requirements into every stage of its business processes. This approach has established a closed-loop risk prevention and control mecha-

nism thereby laying a solid foundation for the Company's sustainable development.

13 142024 Environmental Social and Governance Report Strengthening the Core of Governance

Strengthening Internal Audit Case-Based Training Anti-Corruption and Clean Governance

To further standardize internal audit practices and enhance its supervisory and service role in improving the Company's operations

In December 2024 the Company organized a specialized training session on anti-corruption

optimizing business processes and elevating the levels of internal control and risk management the Company formulated the Internal

and clean governance. The training focused on key areas such as building mechanisms for

Audit System in accordance with the Regulations on Internal Audit Work issued by the National Audit Office the Guidelines for Internal

power supervision enforcing institutional discipline and ensuring transparency in the

Audit Work of SME Board Listed Companies issued by the Shenzhen Stock Exchange and the Articles of Association of Zhejiang DunAn

exercise of authority. It served as a comprehensive introduction to the Company's integrity

Artificial Environment Co. Ltd.governance system.In 2024 the Company conducted:

By analyzing typical corruption cases the training exposed the root causes and dangers of

7 comprehensive operational audits

corruption. Senior internal leaders were invited to provide on-site commentary extracting

2 economic responsibility audits for senior management during their term of office

governance principles and methodologies with broad applicability. The initiative aimed to

9 special audits on topics including receivables management infrastructure project management and automation equipment

foster a culture of integrity self-discipline and clean governance throughout the Company.

11 supervision and investigation reports and

1 internal control evaluation report.

Indicator Unit 2024

Number of management personnel covered by anti-bribery and anti-corruption training Person 50

Fostering a Culture of Compliance Percentage of management personnel covered by anti-bribery and anti-corruption training % 100

The Company actively promotes a culture of compliance through internal initiatives such as onboarding training for new employees and Number of employees covered by anti-bribery and anti-corruption training Person 13735

executive-level discussion sessions. Activities include legal updates case studies compliance reminders and policy interpretation all Percentage of employees covered by anti-bribery and anti-corruption training % 98.66

aimed at enhancing employees' awareness of compliance and their ability to prevent risks. Total number of commercial bribery and corruption incidents Case 2

In addition the Company provides accessible compliance consultation channels for employees. During the reporting period the Company

Number of individuals disciplined for commercial bribery and corruption Person 3

offered legal consultation services to employees on more than 100 occasions.Whistleblowing Channels and Whistleblower Protection

Promoting Integrity and Clean Governance

The DunAn Corporate Charter clearly designates the internal control department as responsible for integrity oversight supervising and

DunAn upholds the principle of integrity in business operations and is committed to building a clean and transparent business environ- inspecting the integrity performance of leadership teams and management personnel at all levels. To strengthen supervision by employees

ment. In 2024 the Company launched a comprehensive clean-practices campaign requiring senior executives middle management and and stakeholders the Company ensures multiple accessible whistleblowing channels. In addition to traditional methods such as company

employees in key positions (including procurement infrastructure finance and treasury) to sign the Integrity Commitment Letter and website telephone email and physical suggestion boxes the Company has also developed a digital integrity reporting platform.submit the Self-Assessment Report on Integrity Practices. A family supervision mechanism was also introduced encouraging employees' Whistleblowers can file complaints via the Company’s WeChat Work platform or by scanning QR codes. These QR codes are also printed

families to support ethical behavior through Messages from Family Members on Integrity in the Workplace. on business contracts tender invitations and business fax documents to partners thereby enhancing supervision by both employees and

In alignment with the DunAn Corporate Charter the Company conducted a thorough inspection of its integrity-building efforts in 2024. All external stakeholders and reinforcing a corporate culture of fairness justice and integrity.business units carried out self-inspections on issues such as familial relationships gift and hospitality disclosures misuse of company The Company has established a reward mechanism to encourage reporting by offering appropriate incentives to individuals who provide

vehicles improper use of personal vehicles for work disciplinary actions and internal notices. Based on the results each unit submitted a critical leads. At the same time strict measures are in place to protect whistleblowers: personal information is kept strictly confidential and

Self-Assessment Report on Integrity Practices. whistleblowing materials are classified as confidential documents. Retaliation in any form is strictly prohibited and any such act will

In 2024 the Company also organized targeted training for new hires and key personnel on topics such as anti-bribery anti-monopoly and be subject to legal liability in accordance with national laws and regulations.international contracts. More than 10000 participants received training covering all members of our senior management team thereby

strengthening the Company’s compliance and integrity capabilities.DunAn Whistleblowing Reporting Email: nkb@dunan.cn Reporting QR Code：

Channels

15 162024 Environmental Social and Governance Report Strengthening the Core of Governance

ESG Governance

Fair Competition

Governance and Strategy

DunAn consistently upholds the principles of integrity transparency and fair competition. The Company strictly complies with the

Anti-Unfair Competition Law of the People's Republic of China and other relevant laws and regulations and is committed to fostering a DunAn attaches great importance to sustainable development and proactively manages the environmental and social impacts of itshealthy and sustainable market environment. All marketing and sales activities are based on the provision of truthful and accurate manufacturing and operational activities. Committed to becoming a“ specialist in healthy and comfortable environment systeminformation avoiding any false or exaggerated claims. Promotional materials undergo rigorous review to ensure compliance with legal and solutions in the HVAC sector” the Company integrates the concept of sustainability into its corporate strategy daily management and

industry standards. The Company promotes fair competition respects competitors and firmly rejects actions that may disrupt market operations to achieve long-term value creation. In 2024 the Company further enhanced its ESG governance by issuing the Notice on the

order. DunAn also respects and protects intellectual property rights—both its own and those of others—and strictly prohibits any unauthorized Establishment of the Sustainability Committee. A three-tier ESG governance structure was established comprising the Board of

use. Regular supervision and evaluation are conducted on internal marketing activities and market behavior to ensure alignment with fair Directors Sustainability Committee Functional Departments with clearly defined ESG responsibilities at each level. This framework

competition requirements. Violations of these principles are subject to strict accountability. These measures are designed to provide enables more scientific professional and systematic advancement of ESG governance supporting the Company’s high-quality and

customers with trustworthy products and services while contributing positively to the sustainable development of the industry. steady development.Indicator Unit 2024 The Board oversees the Company’s sustainability

Strategic guidance efforts including setting related policies and procedures

Amount involved in lawsuits or major administrative penalties due to Decision-making Board of Directors supervision and

unfair competition practices RMB 0 Level review and conducts annual assessments of sustainability

performance.Tax Compliance and Integrity The Sustainability Committee is responsible for

Strategy formulation formulating the Company’s sustainability strategy

Management Sustainability coordination and

DunAn upholds the principle of compliant operations and strictly adheres to the Corporate Income Tax Law of the People's Republic of Level Committee and goals executing directives from the Board oversight advancing ESG initiatives and periodically reviewing

China the Law on the Administration of Tax Collection and other applicable tax laws and regulations. The Company fulfills its tax progress on ESG targets.obligations in accordance with the law ensuring truthful and compliant tax filings and makes timely and full tax payments. Through

responsible taxation DunAn contributes to local economic development and broader sustainable growth.The Company has been awarded an A-level tax credit rating and was recognized as one of the Top 30 Tax-Contributing Private Enterprises

in Shaoxing in 2024. Over the years DunAn has also been repeatedly honored as a“ Key Contributor Enterprise” in Zhuji City recognizing Execution Functional Collaborative

Functional departments are responsible for executing

ESG-related resolutions participating in ESG

its outstanding performance in honest tax compliance and its role in supporting regional economic progress. Level Departments

advancement and

implementation practices and ensuring the effective implementation

of relevant initiatives.Forging Shields for Safety — Leading the Creation of Healthy and Comfortable EnvironmentsIn 2024 DunAn established a sustainable development strategy under the vision of“ Forging Shields for Security—Becoming a Leader inHealthy and Comfortable Environments” Centered around a sound governance core the strategy drives two key sustainability gears:

“Sustainable Shield Forging” and“ Responsible Security.” This approach involves the development of four sustainability shields—

Climate Shield Circular Shield Environmental Shield and Ecological Shield—to build a future-ready business model. At the same time

the company strives to create responsible value through“ Product Security”“ Employee Security”“ Supply Chain Security” and“ SocialSecurity.” DunAn actively supports the United Nations Sustainable Development Goals and contributes its strength to China’s“ dualcarbon” targets and global sustainable governance.

17 182024 Environmental Social and Governance Report Strengthening the Core of Governance

Environmental Dun Environmental

Circular Dun Circular Economy Initiatives Protection Practices Strategic Strategic

Positioning Initiatives 2030 Goals and Targets 2024 Status

Forging the Climate 2030: Achieve a peak in greenhouse gas emissions (Scope 1 and In Progress

Shield Scope 2) with a 10% reduction compared to the 2021 baseline.Supporting

y as China’s Dual

Climate Dun-Climate Protection abilit Our S Ecological Dun Biodiversity Carbon Goals 2030: Develop green products that contribute to emissions

ain hie Protection reduction across the value chain with green product revenue In Progressst Sustainable Shield accounting for 40% of total revenue.Forging

Leading the Forging the Circular 2030: Achieve a water resource recycling rate of no less than 50%. In Progress

construction of a ShieldDeveloping Circular

healthy environment Economy Models 2030: Innovate recycling and reuse models for end-of-life products. Initiated

through

Strengthening the Core nature-friendly Forging the 2030：Maintain zero incidents of environmental pollution and In Progress

of Governance approach Environmental Shield

chemical spills on an ongoing basis.Setting an Example in

Environmental Safety 2030: Continuously advance the development of green factories. Initiated

Forging the Ecological

Shield Embracing a 2030: Integrate ecological principles into product R&D to develop Initiated

Nature-Friendly Future nature-friendly products.

2030: Reduce the nonconformity rate of delivered products by

Product Security In Progress50% compared to the 2021 baseline.Becoming a Trusted

Choice for Customers 2030: Achieve an annual customer satisfaction score of ≥92. In Progress

Employee Security 2030: Maintain zero major safety incidents; annual work-related In Progress

Building a Reliable injuries ≤45 cases.Quality Career Platform for

o Community Responsible Securityc Employees 2030: Achieve an employee satisfaction score of ≥90%. In Progressns An Creating Diversified ibility as Our

Value through Shared 2030: Ensure that 80% of contracts include clauses related to

environmental labor and human rights standards. In ProgressProsperity Supply Chain Security

Promoting a Respon- 2030: Ensure that ≥90% of suppliers undergo on-site audits

Employee Safety Sustainable Supply Chain sible Supply Chain covering environmental and social responsibility.In Progress

2030: Enhance suppliers’ ESG performance by holding at least Initiated

five relevant training sessions annually.Social Security Advancing

Shared Development 2030: Reach a 90% local employment rate. In Progress

within Communities

Corporate 2030: Continuously promote board diversity by increasing the

Sound Governance Governance proportion of female directors. In Progress

Core Laying a Solid Integrating

Foundation for Sustainability to 2030: Continue to integrate sustainable development into In ProgressUnlock Synergies corporate governance practices.At the same time DunAn has set its 2030 Sustainable Development Goals clearly defining the responsible departments for each target. Long-Term Steady

These goals have been integrated into the agenda of the company’s quarterly management meetings. By regularly reviewing the Growth through Business Ethics 2030: Maintain zero tolerance for corruption and bribery In Progress

Integrity-Driven Responsible ensuring zero incidents occur.progress of key indicators DunAn ensures the steady advancement of its 2030 sustainability commitments.Management Operations that 2030: Eliminate violations of business ethics including unfair

Inspire Trust In Progresscompetition conflicts of interest money laundering and fraud.

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p2024 Environmental Social and Governance Report Strengthening the Core of Governance

Stakeholder Engagement Material Topic Assessment

Throughout its daily operations and service processes DunAn actively expands communication channels with stakeholders. By establishing DunAn identifies material ESG topics through benchmarking against relevant standards trend analysis and policy review. These insights

regular engagement mechanisms and conducting multi-channel multi-format communication activities the company strives to fully combined with key findings from offline departmental interviews informed the development of the 2024 ESG Materiality Topic List. The

understand stakeholders’ expectations and needs. DunAn responds proactively to their concerns fostering harmonious and stable selection process ensures that topics are aligned with compliance requirements reflect industry relevance and anticipate regulatory

stakeholder relationships. trends—while remaining tailored to the company’s specific characteristics. In 2024 a total of 34 potential material topics were identified.Communication & Engagement A double materiality assessment was conducted using a questionnaire-based evaluation method. Separate surveys were distributed to Stakeholder Methods Key Concerns assess both impact materiality and financial materiality. By integrating quantitative analysis with qualitative judgment the assessment

process ensures scientific rigor and credibility.Corporate governance

Government-enterprise communication Business integrity and compliance

Government and and reporting Risk management

Regulatory Authorities Compliance disclosures Climate change response

Emissions and waste management Material topics were identified based on benchmarking

Employee rights against ESG standards trend analysis and policy

Step1 Identification of Material Topics requirements. Combined with insights from offline

interviews a total of 34 potential material topics were

Regular announcements Climate change response

Earnings briefings recognized and compiled into a material topic database.Emissions and waste management

Day-to-day communication Corporate governance

Shareholders and Other Surveys Business ethics

Investors Timely phone communication Risk management

Investor meetings Structured surveys and interviews were conducted to Innovation and intellectual property

Results presentations Sustainable procurement assess double materiality. Two types of questionnaires

Shareholder meetings Product life cycle management were distributed—Impact Materiality Assessment and Step2 Questionnaire Survey Financial Materiality Assessment—with 120 valid

responses collected for impact and 16 valid responses

Product life cycle management

Social media for financial materiality.Customer relationship management

Customers Customer satisfaction surveys Consumer health and safety

Complaint handling

Compliance and integrity

Surveys

Cyber and information security Through interviews data analysis and group discus-

Cyber and information security sions topics were evaluated and categorized into highly Regular communication Step3 Evaluation and Analysis

Suppliers and Partners Supplier/partner websites Occupational health and safety

material moderately material and generally material

Surveys Sustainable procurement

levels.Consumer health and safety

Occupational health and safety Occupational health and safety

Employees and Other Talent attraction and retention Talent attraction and retention

Workers Human rights protection Human rights protection

Human capital development Human capital development

Company website

Industry Associations Innovation and intellectual propertyIndustry communication and networking

Fair competition

Surveys

21 222024 Environmental Social and Governance Report Strengthening the Core of Governance

Double Materiality Matrix DunAn has identified 13 highly material topics characterized by a high proportion of issues related to the

governance dimension. Over half of these topics are associated with compliance and safety reflecting the

company’s focus on resilient governance as a central theme in advancing sustainable development. Among

Highly Material them corporate governance tax integrity and product quality and safety carry high levels of negative impact

Topics materiality indicating a continued need to strengthen risk management. Conversely innovation demonstrates

significant positive impact materiality suggesting opportunities to align innovation efforts with the company’s

values of "health and comfort" and "low-carbon and environmental protection" thereby exploring new sustainable

Chemicals and Hazardous ESG Governance Corporate Governance business models.

4.10 Substances

Tax Compliance and Integrity

Waste Management A total of 17 topics fall within the moderately material category primarily concerning environmental and social

dimensions. Employee-related topics generally score higher in double materiality while environmental issues

Pollutant discharge

Product Quality tend to be rated more important by external stakeholders. Green product design and development while Moderately

4.00 High Importance categorized as moderately material leans toward the higher end of the spectrum—potentially due to the lack

Environmental Compliance Material Topics

management Health & Safety Assurance of a clear association with sustainable business strategies. Moving forward DunAn will continue to optimize the

Compliance and Risk

management identification and transformation of material topics to better guide the company in addressing sustainable Employment

challenges seizing opportunities and building long-term competitive advantages.Intellectual…

Anti-corruption

Circular economy

3.90 Compensation & Benefits Data Security and Customer

Privacy There are 4 topics identified as generally material: pollutant emissions climate change response philanthropy Economic Performance

Sustainable Supply Chain and rural revitalization. Among these pollutant emissions are a topic of high concern among stakeholders and

Customer Satisfaction Survey

Water resources utilization Green carry significant negative impact materiality. This highlights the need for the company to strengthen internal

products Innovation Driven Generally

and R&D Anti-competitive Behavior awareness of sustainability and reinforce related risk management practices. Climate change response and

Renewable energy Stakeholder Engagement Material Topics rural revitalization align with broader sustainability agendas and national policy trends and should continue to

3.80 be monitored and better understood. Philanthropy as a social contribution topic warrants continued investment

Climate response Sustainability-Related Risk

Management with attention to external stakeholder feedback to inform strategic adjustments.Support Industry Growth

Equal Treatment of SMEs Training & Education

Medium Importance

Ecosystem and biodiversi…

3.70

Local Operations

Public Welfare

Rural Revitalization

3.60

General Importance

3.50

2.803.003.203.403.603.804.004.204.40

Financial Materiality

2324

Impact MaterialityThe GRI STANDARDS

Sustainability as Our Shield GRI 301 Materials

Leading the Creation of a Healthy Environment GRI 302 Energy

through Nature-Friendly Principles

GRI 303 Water and Effluents

Response：The UN Sustainable Development Goals (SDGs) GRI 304 Biodiversity

GRI 305 Emissions

GRI 306 Waste

Self-Regulatory Guidelines No. 17 for

Companies Listed on Shenzhen Stock

Exchange—Sustainability Report

(For Trial Implementation)

Climate response

Pollutant discharge

Waste disposal

Ecosystem and biodiversity protection

Environmental compliance management

Energy utilization

Water resources utilization

Circular economy

25 262024 Environmental Social and Governance Report Sustainability as Our Shield

Climate Dun-Climate Protection

Amid the severe global challenge of climate change the increasing frequency of extreme weather events has had profound impacts on Type Negative Impact Measures

ecosystems socio-economic systems and human life. DunAn deeply recognizes the urgency and importance of addressing climate

change and has made it a core component of the company’s sustainable development strategy. Acute physical risk (short-term)

A dedicated Sustainability Committee has been established to formulate climate-related strategies targets and implementation plans Extreme cold temperatures reduce the stability of Formulate contingency plans for extreme cold to

ensuring cross-departmental coordination and collaboration. Together we actively advance actions to combat climate change such as material storage affecting production continuity enhance the effectiveness of risk response

energy transition and green product development. Extreme Cold Cold snaps cause transportation disruptions and Stockpile materials in advance according to weather

disruptions in supply chain logistics forecasts to prevent supply disruptions

Low temperatures cause infrastructure damage Prepare spare production facilities to ensure steam

such as water pipes freezing and cracking supply in extreme cold

Climate analysis

Comprehensively assessing and monitoring water

Taking into account the industry attributes value chain distribution and national macro policies we selected the SSP5-8.5 scenario provided Scarcity of fresh water resources leads to shortage

of water for critical processes disrupting production use risks and improving emergency response

by the United Nations Intergovernmental Panel on Climate Change (IPCC) to conduct physical risk analysis and the STEPS provided by the mechanisms.Desertification continuity

International Energy Agency to conduct transformation risk and opportunity analysis to provide decision support for the company to address Increased capital costs for purchasing raw water Various bases are actively promoting water conserva-

climate change and enhance its development resilience. exacerbating financial pressure

tion and reuse projects to improve the recycling

rate of water resources.We have conducted a comprehensive analysis of the physical risks transformation risks and opportunities. Among them physical risks are

categorized into acute risks and chronic risks which may negatively affect the company's production operations logistics and transportation Flooding damages raw materials equipment and Improve the flood emergency plan reserve emergency

and inventory management. At the same time we analyze transformation risks from four perspectives: policy and regulations technology production lines significantly increasing the cost materials for flood prevention and fight against

market and reputation discuss in depth the impact of various types of transformation risks on the company and propose targeted Floods of repair and replacement floods and strengthen the waterproof protect

ion of

countermeasures based on the nature of the risks and the company's specific situation. For transformation opportunities we analyze Flooding damages transportation infrastructure key equipments.severely impeding the supply of raw materials and Build a diversified supply chain system to ensure

them from three dimensions: energy layout technological innovation and green investment and discuss the positive impact of different transportation of finished products. stable supply of raw materials

opportunities on the company.Below are the physical and transformational risks we have identified to focus on: Establishing a comprehensive typhoon warning and Damage to infrastructure such as plants equipment emergency response mechanism and organizing

and warehouses affecting production operations regular safety evacuation drills for employees to

Typhoon Increased investment in resources for disaster enhance their emergency response capabilities

preparedness relief and resumption of production The company has reinforced and protected its

Physical Risks driving up operating costs. plants and key production equipment to ensure

that they can withstand strong winds.Type Negative Impact Measures

Acute physical risk (short-term)

Insufficient stability of power supply leads to Carry out temperature prediction and assessment Type Negative Impact Measures

interruptions in production operations exacerbating and formulate production and emergency response

fluctuations in the capacity utilization rate of systems Chronic physical risks (medium long term)

enterprises Reasonable shift scheduling and adequate provision Prioritize materials with excellent heat resistance and

Occupational health risks caused by extreme hot of heat-prevention materials High Rising temperatures accelerate the aging of mechanical

anti-aging properties during product design and selection

Temperature weather rise significantly resulting in lower labor Improve fire-fighting initiatives and strengthen and electronic components shorten the lifespan of to extend equipment life.productivity and higher rates of workplace accidents fire-fighting inspections during the high-temperature Temperature temperature-sensitive equipment and increase the

Utilize sensors to monitor temperature and operating

eriod status in real-time enabling early detect

ion and

Inadequate provision of firefighting infrastructure p operational load of air conditioning and cooling

response to anomalies to prevent equipment failure.leads to insufficient emergency response capacity Improve emergency response plans and carry out systems—leading to higher energy consumption and Introduce intelligent control technologies to automatically

for fires and other emergencies increasing the risk emergency response drills to enhance the effectiveness operating costs. adjust temperature and operation modes based on

of property damage of risk response actual needs reducing energy waste.

27 282024 Environmental Social and Governance Report Sustainability as Our Shield

Type Negative Impact Measures Categories Description Duration Response Measures

Chronic physical risks (medium long term) Customers increasingly prefer companies Increase procurement of green electricity and

Install industrial dehumidifiers and optimize ventilation

offering low-carbon products. Failure to meet

Medium to invest in photovoltaic and wind power

Increased humidity leads to excessive moisture systems to maintain proper indoor humidity and

Market these expectations may result in loss of

Long Term systems.absorption in raw materials negatively affecting prevent material and product damage. market share. Rising traditional energy costs Actively engage with customers to address

Humidity Apply surface protection measures such as may further increase operational pressure.product quality and yield. It also accelerates corrosion climate concerns with tangible actions.anti-rust oil coating to protect metal components.of metal components raising maintenance costs Implement regular maintenance and inspection

and frequency. plans to detect and address signs of corrosion Stakeholders including the public and investors

promptly extending equipment lifespan. Ensure timely disclosure of ESG-related information

demand more active efforts to reduce carbon Medium to in compliance with regulations.Optimize supply chain layout by integrating Reputation footprints and support sustainability. Inaction Long Term

climate change risks into supplier evaluations to Regularly publish ESG reports to showcase Rising sea levels may damage port infrastructure may reduce trust impacting both revenue

Sea Level Rise environmental and social progress.disrupt surrounding transportation networks and ensure stable logistics and transportation. and company valuation.delay logistics for raw materials and finished goods. Diversify supplier sources to reduce reliance on

specific ports or regions minimizing disruption

risks caused by extreme weather events.Implement real-time air quality monitoring and

Increased airborne particles can introduce impurities into Transition Opportunitiesadopt high-efficiency air purification technologies

key manufacturing processes leading to higher defect

Particulate to ensure cleanroom conditions meet or exceed

Matte rates and reduced product performance. Maintaining industry standards.cleanroom standards also increases energy usage and Optimize workshop layout and production processes

to minimize particle contamination and improve Energy Structure Optimizationequipment maintenance frequency.environmental control efficiency. By leveraging distributed photovoltaics and energy storage as entry points DunAn is building an

integrated distributed energy network through the utilization of industrial waste heat and

biomass energy. Based on our strengths in specialized environments such as nuclear power rail

transit and data centers we are developing zero-carbon energy bases to promote the localized

Transition Risks consumption of green electricity in high-energy-demand scenarios.Categories Description Duration Response Measures Technological Innovation

With the acceleration of China's“ dual carbon” Leverage national-level technical centers to We continue to advance refrigeration technologies with a focus on microchannel heat exchange

and intelligent control algorithms. Our R&D efforts include the development of high-efficiency

policies adjustments in carbon trading green proactively develop carbon capture and low-carbon refrigerants and transcritical heat pump systems leading the industry in energy

Policies and building standards and renewable energy subsidies

zero-carbon technologies.Medium to Establish a“ policytechnologymarket” synergy efficiency standards. Collaboration with universities and research institutions accelerates the

Regulations may increase compliance costs. Meanwhile stricter Long Term mechanism and incorporate carbon footprint transformation of low-carbon technologies from lab to market. In parallel we are enhancing our

international carbon tariffs and ESG disclosure accounting into supply chain management. intellectual property portfolio and leading standard-setting initiatives.requirements may affect expansion into overseas Achieve green supply chain certification to

markets. address trade barriers. Green Investment

Allocate significant annual R&D investment Capitalizing on our extensive experience in the refrigeration industry and our technological

Core technologies such as magnetic suspension into frontier technologies. advantages in renewable energy we are deepening our green investment strategy. By aligning

Focus on thermal management and low-GWP

systems and transcritical COheat pumps face Short to “technologyapplication scenarioscapital” we aim to establish a development model that

Technology refrigerants.risks of obsolescence. Emerging solutions like radiates from the Yangtze River Delta core to the rest of the country using technical barriers as a Long Term Implement a“ patent pool + scenario-based strategic moat.solid-state battery thermal management may application” strategy to strengthen IP barriers

challenge current technologies. and speed up application in sectors like data

centers and rail transit.

29 302024 Environmental Social and Governance Report Sustainability as Our Shield

Performance Carbon Emissions Energy-Saving Technology Upgrades

DunAn actively implements energy-saving retrofits to existing equipment. In 2024 the company launched two major initiatives.Indicator Unit 2024 2023 2022

Scope 1 tCO2e 11287 9838 8323 Case Heat Recovery from Air Compressors

Scope 2 tCO2e 24755 20785 18571 In September 2024 the Zhuhai base installed a heat recovery system on air compressors using recovered

tCO e heat to power cleaning machines. The system saves 350000 kWh of electricity and reduces CO emissions Total Emissions 2 34593 30623 26894

by 184 tons annually.Emission Intensity tCO2e/RMB million revenue 6.1 5.4 5.13

Carbon emission calculation is based on the "Corporate Greenhouse Gas Accounting and Reporting Guidelines Power

Generation Facilities (2022 Revised Edition)" by the Ministry of Ecology and Environment and the NDRC’s "Trial Guidelines on Case Insulation Upgrade for Brazing Furnaces

GHG Accounting and Reporting."

In 2024 insulation upgrades to brazing furnaces at multiple bases (DianKou Wuhu Zhuhai) improved

thermal efficiency reducing energy consumption by 10% and cutting CO emissions by 656 tons

annually.Energy Transition

To implement national energy conservation and emissions reduction policies and to continuously improve energy performance

DunAn has completed certification under national standard GB/T23331 for the Energy Management System. An energy management

working group headed by senior executives is responsible for developing annual energy-saving plans and supervising performance Use of Renewable Energy

including participation in internal audits and reviews and overseeing corrective and preventive actions. To support carbon reduction goals the company actively uses renewable energy. In 2024 building on previously completed

In 2024 the company actively promoted energy transition by building distributed photovoltaic projects at its production bases distributed solar installations the company added 0.849 MW of new capacity.to increase the use of clean energy. It also optimized production processes by adopting advanced technologies and equipment

to enhance energy efficiency and reduce unit energy consumption. Case Thailand Solar Project

Full Lifecycle Energy Management

In August 2024 a new solar PV system with 0.849 MW capacity was installed at the Thailand

DunAn implements full lifecycle energy management across all stages—before during and after energy use—building a scien-

base reducing CO emissions by 600 tons per year.tific and efficient energy management system. This systematic and end-to-end strategy reduces operational costs and advances

the company’s sustainable development goals.Energy Efficiency Performance

Lifecycle Stages

Thanks to these initiatives the energy cost per RMB 10000 of output at the Hetian plant dropped from RMB 279 in 2022 to RMB 211 in

2024—a 24.3% reduction.

Pre-use During Use Post-use

Strict energy efficiency assesments

Real-time energy trackingoptimized Reuse of recoverable energy to of new equipment with apreference Honor

for advanced and low-energy allocation and minimizing process

lower consumption and enhance

waste. resource recycling.technologies. In 2024 Zhejiang DunAn Electromechanical Technology Co. Ltd. was named a National-Level Green Factory.

31 322024 Environmental Social and Governance Report Sustainability as Our Shield

Green Products Case i-Super Integrated Chiller

Guided by the mission to“ improve energy efficiency and optimize the environment” DunAn follows a green and energy-saving technology Driven by eco-friendly principles the Anjie i-Super uses advanced evaporative cooling and integrated design eliminating the need

path. The company adheres to the philosophy of“ green serving green safety built on safety professionalism serving professionals” for external cooling towers and pumps. It achieves 15% energy savings over traditional water-cooled systems and 35% over

committing to environmental protection and sustainable development. Through continuous innovation it aims to deliver environmentally air-cooled systems. Certified by the China Refrigeration Society as an energy-efficient and eco-friendly product it also features

friendly core technologies and premium products globally. zero ozone-depleting potential.Case MPHX

A core product of DunAn’s low-carbon strategy the micro-plate heat exchanger uses

stacked composite plates significantly enhancing heat transfer while reducing resource

consumption. Compared to traditional microchannel exchangers it reduces refrigerant

charge by 48% supporting low-charge flammable refrigerants and improving system

safety and environmental performance. Its corrosion-resistant design surpasses industry

standards with over 4000 hours of acid salt spray resistance (SWAAT A3) extending

lifespan and minimizing replacements. Case Nanjing Grain Emergency Supply Center

This large-scale cold-chain logistics center required high environmental performance. DunAn designed a CO2 cascade system

integrated with heat recovery multi-stage filtration dynamic oil return and thermal field simulation. The result is an efficient safe

and green refrigeration system benchmark project.Case Lead-Free Product Development

In response to the industry's trend and demand for lead-free and environmentally friendly

development the company has elevated the stainless-steel transformation of its

products to a strategic priority aiming to provide customers with greener low-carbon

products that deliver greater customer value.With 15 years of technical accumulation DunAn has developed a highly mature stainless

steel production process. Stainless steel products have been mass-produced across

various product lines including four-way valves ball valves solenoid valves and tubing

assemblies. Currently stainless steel four-way valves account for over 25% of all four-way Case Clean Heating for Relocated Communities

valves and DunAn holds a 60% market share in this category — positioning the company

as an industry leader.In Daming County a clean energy heating project for 29 villages and 31381

residents replaced coal and gas with air-source heat pumps across four heating

communities and 13 pump stations. With a heating load of 39662 kW and

991605 sqm of heating area the system delivers both ecological benefits and

rural development support.

33 342024 Environmental Social and Governance Report Sustainability as Our Shield

Circular Dun Circular Economy Initiatives

Developing a circular economy is a proactive step toward a green societal transition and a key component of China’s dual-carbon strategy. In Performance Water Use (2024)

2024 DunAn focused on water and materials recycling with dedicated implementation led by the EHS Department and the Equipment

Management Department. Looking forward the company will strengthen full lifecycle product management through coordinated efforts Indicator 单位 2024

between R&D and manufacturing departments to build a comprehensive green circular system.Withdrawal 10000m3 38.86

Water Recycling Water Discharge 10000m3 23.89

Water resource management is critical to environmental sustainability. During site selection for manufacturing bases the company conducts Consumption 10000m3 14.97

thorough water risk assessments prioritizing areas with strong water resource endowments and stable supply systems. Company-wide

Consumption Intensity Tonne / 10k RMB 0.737

water-saving awareness is promoted and water conservation practices are integrated across all operational phases. Technological innovation

and precise management are used to maximize water-use efficiency.Materials Recycling

Case Industrial Water Reuse

DunAn actively promotes raw material reuse green packaging and logistics. Recyclable materials are prioritized in production to reduce

In 2024 DunAn Hetian actively advanced the circular utilization of industrial water resources as part of its commitment to sustainable

reliance on non-renewables and lean management lowers scrap rates to minimize waste at the source. A sorting and recycling mechanism

development. Within the park reclaimed water was subject to refined classification management and reused in multiple

ensures recyclable materials are efficiently reused reducing landfill and incineration impacts.non-production scenarios such as restrooms forming an innovative closed-loop water management system.On the production side the four-way valve division optimized its process flow by repurposing high-frequency welding cooling water

Case Copper Scrap Recycling

for use in the cooling systems of flame welding and end-cap riveting steps significantly improving water resource efficiency.Furthermore the company continued to invest in water-saving technological upgrades including the expansion of cooling water DunAn has a well-established copper scrap collection and reuse system.recycling systems driving overall improvements in water use efficiency and supporting long-term environmental sustainability Collected copper fines and cuttings are returned to processing plants or other production stages.goals. In 2024 a total of 11548 tons of copper scrap was recycled reducing mining activity and environmental impact.Case Green Office Water Conservation Case Pallet Reuse

A company-wide campaign titled“ Energy Saving Starts with Me” was launched. Requirements included: A pallet-sharing model was implemented in cooperation with suppliers and customers.Shutting off water valves when not in use. Through reuse and repair the reuse rate reached 90% in 2024.Rapid response to leaks or overflows. This reduced demand for new pallets saving 180 m3 of timber and cutting 72 tons of solid waste.Cultivating employee habits to turn off taps promptly and reduce water waste.Performance Waste Recycling (2024)

Indicator 单位 2024

Total Tonne 17910.89

Waste Recycling

Rate % 95.36

35 362024 Environmental Social and Governance Report Sustainability as Our Shield

Environmental Dun Environmental

Protection Practices

Wastewater Management

DunAn integrates environmental protection into its core sustainability strategy. An EHS Management Department led by senior executives The company places great importance on wastewater management and continuously optimizes water resource utilization efficiency by

coordinates environmental compliance and initiatives across subsidiaries. Each business unit assumes primary responsibility for environ- promoting cleaner production and water-saving technologies to reduce wastewater discharge. In our production processes we implement

mental targets which are incorporated into performance evaluations to ensure accountability at every level. water recycling and wastewater reuse measures—such as cooling water recirculation and reclaimed water reuse—to minimize the

consumption of fresh water and the total volume of wastewater discharged.As of the reporting period all 17 subsidiaries have passed ISO 14001 To address wastewater from different sources the company has established a categorized treatment mechanism and applies a variety of

Environmental Management System certification. physical chemical and biological treatment processes to purify industrial effluents and domestic sewage accordingly. Advanced wastewater

treatment technologies including membrane separation and biochemical treatment have been introduced to enhance treatment capacity and

water quality stability.All wastewater is subject to strict monitoring to ensure that pollutant indicators comply with national and local discharge standards.Regular third-party testing is also conducted to verify compliance. In addition the company actively explores wastewater resource utilization by

increasing the proportion of reclaimed water reuse thereby reducing environmental impact and promoting the sustainable use of water

resources.Air Emissions Management

The company exercises strict control over air pollutant emissions and continuously optimizes its air emissions management system to

enhance overall treatment performance. For pollutants generated during production—such as volatile organic compounds (VOCs) dust

ISO 14001 Certification and other contaminants—the company has established an efficient exhaust gas collection system and applies advanced purification

technologies including activated carbon adsorption catalytic combustion and low-temperature plasma treatment to ensure effective

pollutant removal.At the same time the company strengthens enclosure management to minimize fugitive emissions and optimizes production processes to

Environmental Compliance

reduce the generation of pollutants at the source. To further improve treatment efficiency regular maintenance and technological

upgrades of exhaust gas treatment equipment are carried out to ensure stable and efficient operation.The company strictly adheres to China’s“ Three Simultaneities” policy (design construction and operation of environmental facilities

Additionally the company has implemented a stringent monitoring mechanism to track air emission data in real time ensuring that all

synchronized with main projects) ensuring pollution control systems are implemented in line with Environmental Impact Assessment

(EIA) requirements and operating permits. DunAn continuously improves pollution treatment technologies including wastewater exhaust emission indicators comply with national and local environmental regulations. The company also undergoes supervision and inspection

gas and solid waste management. In 2024 all emissions met applicable discharge standards. by government authorities and third-party agencies. Through continuous improvement of air emissions control measures the company

has effectively reduced atmospheric pollutant emissions.Company No. Certificate Issue Date Certificate Expiry Date

DunAn Hetian 913306007652348458001U 2024-12-17 Val. until Dec. 312025

Solid Waste Management

DunAn Hetian（No.1 xingan Road） 913306007652348458002Z 2023-7-18 Val. until Jul. 072028 The company manages solid waste in strict accordance with applicable laws and regulations concerning collection storage and

outsourced disposal. Hazardous waste is entrusted to qualified third-party service providers for compliant treatment and disposal. General

DunAn Machinery 9133068114632514X5001U 2024-9-27 Val. until Dec. 312025

industrial solid waste is centrally collected and processed for comprehensive recycling while domestic waste is regularly removed by

sanitation services.ZhuHai Huayu 91440400769345075Q 2024-4-11 Val. until Apr. 102029

A well-established system for classified collection treatment and recycling of waste has been implemented to support resource recovery.The company promotes resource utilization of various types of waste generated during production and continuously improves its waste

DunAn (WuHu) ZhongYuan 91340221588859982Q001C 2023-12-19 Val. until Dec. 182028

recycling rate.

37 382024 Environmental Social and Governance Report Sustainability as Our Shield

Air Emissions Environmental Risk Management

Indicator Unit 2024 DunAn and its subsidiaries strictly comply with all applicable national and local environmental laws and regulations. A comprehensive

self-monitoring system has been established to ensure that all pollutants are discharged in accordance with standards. The company has

SOx kg 796.7

developed internal environmental monitoring plans and discloses relevant information via its pollutant discharge permits and public

NOx kg 4621.5 monitoring platforms subject to supervision by regulators and the public.VOCs kg 5635.2 All pollution control facilities are under 24-hour real-time monitoring to ensure stable operation. Monitoring data are recorded and reported in

real time and any anomalies are promptly addressed. Automatic online monitoring systems are installed for key pollutants and real-time

emission data is connected to local environmental departments to ensure full transparency.Water Discharge

Indicator Unit 2024 Third-party environmental monitoring agencies are regularly commissioned to verify data accuracy. All indicators during the reporting

period complied with discharge standards supporting the company’s commitment to green and sustainable development.Industrial Wastewater M3 238922

As required by law DunAn has commissioned certified agencies to prepare emergency response plans for environmental pollution events.Domestic Wastewater M3 52400

These plans have been filed with local environmental authorities and emergency drills are held at least once annually to raise employee

COD Tonne 3.440 awareness and strengthen emergency response capabilities.NH3-N Tonne 0.177

Total Nitrogen Tonne 0.623

Company Date of Preparation Department Filing Date NO.Total Phosphorus Tonne 0.395

Due to inclusion as a key emission unit this period’s COD data has been adjusted based on permit monitoring requirements resulting

in differences from historical data. The discrepancy is due to the company’s on-site wastewater treatment meeting municipal DunAn Hetian 2024-12 Zhuji Branch ZHB 2024-12-12 330681-2024-106-M

standards before discharge into the municipal system which is now accounted as environmental discharge.DunAn Machinery 2024-6 Zhuji Branch ZHB 2024-6-24 330681-2024-049-L

Solid Waste

Indicator Unit 2024 ZhuHai Huayu 2021-11 Jinwan Branch 2022-12-8 440404-2022-0223-M

ZHEE

Total Waste Tonne 18777.08

DunAn (WuHu) Wanzhi District

Include： ZhongYuan 2024-1 Branch WHEEB 2024-2-20 340221-2024-009-L

Total Tonne 17910.89

General Waste

Intensity Tonne / RMB 10k 0.01078

Total Tonne 870.19

Hazardous Waste

Intensity Tonne / RMB 10k 0.00194

39 402024 Environmental Social and Governance Report Sustainability as Our Shield

Ecological Dun Biodiversity Protection

Environmental Risk Emergency Response Flowchart Building an ecological civilization is essential to the well-being of the people and the future of the nation. DunAn seeks to contribute by

developing innovative and eco-friendly product solutions under the“ Nature-Friendly” concept. As sustainable development trends

continue to evolve products that support ecological values are expected to become increasingly important. The company will continue to

monitor demand-side trends increase R&D investment and contribute to biodiversity protection with its technological expertise.Sudden Environmental Pollution Incident

Biodiversity Conservation

DunAn is committed to maintaining the health and stability of ecosystems and protecting biodiversity. We promote the sustainable use of

Emergency Command Center land and soil resources minimize habitat disruption and reduce the environmental impact of operations.We also require our supply chain partners to uphold sustainable development principles and to comply with international biodiversity

standards and applicable regulations to ensure the long-term health of ecosystems.On-site Command Leaders

Emergency Activation

Self-Rescue

Firefighting

Emergency Expansion Rescue Operation Disaster Relief

Logistics Support

Internal Resources

Request for Rescue Incident Control

On-site Cleanup

Emergency Recovery

Incident

Summary Reporting

Emergency

Termination Emergency Improvement

41 42Global Reporting Initiative

Responsibility as Our Anchor Standards (GRI STANDARDS)

Creating Diverse Value through Social Prosperity

GRI 401 Employment GRI 402 Labor Relations

GRI 403 Occupational Health & Safety GRI 404 Training & Education

Chapter Responds to：United Nations Sustainable Development Goals (SDGs) GRI 405 Diversity & Equal Opportunity GRI 406 Non-discrimination

GRI 407 Freedom of Association & Collective Bargaining

GRI 408 Child Labor GRI 409 Forced or Compulsory Labor

GRI 308 Supplier Environmental Assessment

GRI 413 Local Communities GRI 414 Supplier Social Assessment

Shenzhen Stock Exchange Self-Regulatory

Guidelines for Listed Companies

No. 17Sustainability Reporting (Trial))

Employees

Data Security & Customer Privacy Protection

Supply Chain Security

Rural Revitalization

Social Contributions

Fair Treatment of SMEs

43 442024 Environmental Social and Governance Report Responsibility as Our Anchor

Product Security

Product Quality To ensure comprehensive control from product planning to market feedback the company has established a clear quality management

framework.DunAn has deeply integrated the "Zero Defect" management philosophy into its ESG governance system constructing a quality culture

ecosystem centered on "Doing It Right the First Time." Through the establishment of a "Three-Leap" implementation path: QAM

QPE

Conceptual Layer: Deepening the core of Crosby's theory creating a value transmission mechanism of "Zero Error in Work → Zero Defect QDA

in Products → Zero Waste in Operations." NPQM

Operational Layer: Innovating quality control across the entire value chain building a product lifecycle quality firewall based on the IATF

16949 system. SQMQIE

Mechanism Layer: Developing a digital quality foundation achieving penetrative management of quality data through the LIMS DMS LIMS AQM

system and constructing a coupled system of quality performance and sustainability indicators. QIPM

PCM

Quality Management System QSOM

QSE

The company has established a quality management system covering the entire product lifecycle forming a closed-loop mechanism of ESM

"Planning Prevention Control Improvement." It systematically developed 28 core regulatory documents creating a digital penetrative

TE

control network from design input to market feedback ensuring systematic management of all quality elements. ME

DIANKOU

MT

PA

Planning Strengthening APQP advanced quality planning to Regulatory Documents:

TC MT

ZHUHAI

ensure upfront identification of design input risks. 《Design Quality Planning Regulations》 PA

MT

WUHU

PA

ST

Establish QCDS (Quality/Cost/Delivery/Service) Regulatory Documents: CDPrevention supplier qualification standards and develop a 《Supplier Development Quality Control PQEBQSsupplier development quality screening mechanism. Regulations》 PI

ED IQC

TD AQE

Process quality stability monitoring and management Regulatory Documents:

QAS

QAS

SQEControl + finished product dynamic sampling inspection for 《Process Product Quality Control VDdual assurance. Regulations》《 AQL Dynamic Sampling FQCInspection Procedures》

IQC

SQE

Special improvement initiatives for critical quality pain FQC

points + closed-loop management of after-sales Regulatory Documents: THAIL AND QM AQE

Improvement quality issues establishing a continuous optimization 《Product Quality Improvement Regulations》

mechanism of 'problem analysis → improvement 《Customer Feedback Management Regulations》 PQE

implementation → effectiveness verification'. QS

PI

4546

Quality Quality Quality Testing Domestic Quality Overseas Quality

Planning Improvement System Center Management Management

General Supervisor of IT and Quality

CQO2024 Environmental Social and Governance Report Responsibility as Our Anchor

Quality Management Assessment Quality Empowerment Project

DunAn has established a "Process Control Special Breakthroughs Pain Point Resolution" Trinity Quality Pledge System The company implemented a quality empowerment project systematically enhancing process capability across the value chain. The

assessment system. Through process quality indicators (40% weight) it achieves systematic improvement in production yield process capability index (Cpk) achieved breakthrough growth: Phase 1 increased the maturity index by 162% (63.02% completion) and

focusing on core parameters such as overall first-pass defect rate and quality loss rate. Special improvement indicators (30% Phase 2 further improved it by 131% (91.30% completion).weight) enable precise quality cost control targeting key loss areas like scrap rate and leakage rate. TOP3 quality improvement

Quality Incident Response

projects (30% weight) address customer pain points establishing a closed-loop mechanism of "Problem Discovery Root Cause

Analysis Long-Term Resolution" driving continuous reduction in quality loss costs. Through a "Three-Dimensional Timeliness Management System" the company ensures rapid response to quality incidents effectively

reducing quality risks and ensuring product reliability and customer satisfaction

Quality Improvement

DunAn identified quality enhancement of its flagship commercial component product—the Solenoid Valve 6A Series—as a Incident Level Response Time Assessment Mechanism

strategic priority designating the "first-pass defect rate in comprehensive testing" as the key quality breakthrough metric. The

company established clear improvement targets: while the defect rate benchmark for 2023 was set at 5000 ppm actual performance Assessed and reported by business unit quality departments Major Incident filed with DunAn Quality Department.achieved a remarkable reduction to 1246 ppm by 2024 surpassing all objectives. This achievement was supported by a systematic Within 24 hours (The above time

requirement is the general rule; Assessed and reported by business unit quality departments quality management framework fully compliant with IATF 16949 standards ensuring sustainable product quality advancement. Significant Incident filed with DunAn Quality Department.for special circumstances please

General Incident apply and report in advance.) Assessed by business division quality departments.Advanced Tool Embedding five core tools in key stages like product development (APQP) failure prevention (FMEA) Reporting method: OA email

Integration and process control (SPC). Minor incident Assessed by business division quality departments.Quality Incident Reporting Requirements:

IATF 16949: Deployed process-oriented IATF 16949 audits utilizing VDA 6.3 (process) and VDA 6.5 Submission within 24 hours via OA email.IATF 16949

(product) standards. Emergency containment within 24 hours.Investigation within 72 hours.Corrective actions within one week.Phased Executed through three progressive stages—initial pilot (solenoid valves) product line expansion Preventive measures within one week.Implementation

Approach (commercial components) and enterprise-wide deployment.The specified timelines represent standard requirements. Special circumstances requiring deviations must be reported and approved in

advance.Case Commercial Component 50# Stainless Steel Four-Way Valve Quality Talent Development

Implementation Steps First：Preserve similarities adjust for differences DunAn is dedicated to establishing a digital quality talent development system: On one hand it has created a "selection-training-application

*8-10 Months

*Implementation of Core Quality tools and Selected Clauses of IATF 16949 for Solenoid

valve -incentive" closed-loop mechanism implementing a TQM-based talent development model through specialized quality training

Second：System Implementation

* 10-12 Months programs achieving training outcomes including an average theoretical assessment score of 80.02 a knowledge transfer rate of 86% and

* Fully implement IATF 16949 in the CCPL and obtain certification

Third：Fully Implementation a satisfaction rate of 91.8%; on the other hand it has developed a must-know/must-master digital learning platform to build an intelligent

Solenoid Valves Commercial Components Refrigeration Accessories * 10-12 Months

* Promotion of Product Lines such as Four-Way Valve Shut-Off Valve etc learning system integrating study testing evaluation and assessment continuously enhancing the professional capabilities of quality

* SV ＜10000PPM * Quality manual based on IATF

* CPK＞1.67 16949 personnel and providing talent support for the company's business development.* Customer Complaints * IATF 16949 Procedure(≥10M）＜9.46 Documents

* APQP&IPD processes and

Product Standar Standards System for

Improve ds Commercial Division

Foundation Operation Usage Application Enhancement -ment System

Base on IATF Throught Throught FMEA Throught SPC Enhance the

16949establi-sh and MSA，drive system thinking IPD&APQP to build a Knowle Sedimen

a quality the integration and quality establish an preventive- dge awareness within -tation * Product Audi and Process

management R&D process focused quality of statistical Buildingthe commercial * Launch and Development Audi Methods

system based on the management techniques division of the SV Failure Mode * SPC Statistics Analysis and

full lifecycle system Analysis Database Improvement

（DFMEA、PFMEA） * Implementation of Supplier

* Standardization of the IATF PPAP Methods

“Point”SV—“Line” Commercial Division—“Surface” DunAn 16949 Project and System

47 482024 Environmental Social and Governance Report Responsibility as Our Anchor

Quality Achievements & Industry Recognition Performance

QC Group Achievements

Indicator Unit 2024

Honor Customer-end Product Recall Case 0

Customer Complaint Rate per ￥10 Million Sales Per ￥10 Million 1.95

Reducing First-Pass Defects in Stainless Steel Four-Way

Valve Brazing" and "Reducing Market Leakage Rate of

Copper-Steel Mufflers" were awarded first prize at the Customer Service

"National Machinery Industry Quality Management

DunAn consistently implements a "customer-first" development strategy making customer value creation the core driver of sustainable

Achievements Presentation Conference"

development. The company has established a collaborative system where frontline needs drive R&D innovation and downstream processes

optimize upstream workflows ensuring accurate transformation of market insights into product-service solutions. Through continuous

customer satisfaction management the company has implemented regular customer satisfaction surveys while strictly protecting customer

privacy and respecting customer rights. With its needs-oriented innovation mechanism and closed-loop service system the company

Honor achieves efficient full-chain coordination from market sensing to value creation delivering more competitive solutions and continuously

improving customer service standards.Customer Satisfaction Survey

“Reducing DSF-9 Four-Way Valve Main Valve Welding First-Pass Defect Rate”

was recognized as a breakthrough project case under the "National Lean Six DunAn has designed and implemented customer satisfaction questionnaires for all refrigeration component product lines covering all direct

Sigma Management Evaluation Criteria. customers of the marketing centers to ensure 100% coverage of major accounts. The survey content includes product quality technical support

comprehensive services while also collecting customer feedback on future R&D directions improvement needs and other suggestions. Survey

results over the past three years have consistently shown customer satisfaction scores above 90 points. Through in-depth analysis of the

feedback the company identifies gaps with customer expectations determines key factors affecting satisfaction and continuously improves

customer satisfaction levels.Customer Feedback Root Cause Improvement Actions

Qualification Certification

Corrective measures:

Qualification CNAS Laboratory Certification Increase inventory levels 1.Upgrade water quality for high-frequency welding with

and improve product quality continuous monitoring

Defects analysis: 2.Increase cleaning frequency for welding sleeves with

Enhance delivery timeliness Surface defects: Mainly inspector oversight

and provide more high-quality porosity in weld pools 3.Conduct comprehensive cleanliness inspection and

The laboratory is certified under CNAS-CL01:2018 recognized in over 100 products Leakage defects: Primarily at optimization across automated production lines

countries including the U.S. EU members Japan Australia Canada South pipe/capillary joints and end 4.Systematically inspect all wire feeders secure loose

Korea and Singapore. cover welds cylinders and establish maintenance schedules

5.Improve CPK values for pipe and main valve body

Maintain quality consistency dimensions

advance technical capabilities 6.Launch special project targeting first-pass welding defects

and improve product reliability as key improvement initiative

7. Enhance detection reliability of performance testing

equipment

49 502024 Environmental Social and Governance Report Responsibility as Our Anchor

Customer Privacy Protection

DunAn always prioritizes customer privacy protection strictly complying with the "Personal Information Protection Law of the People's

Republic of China" and other relevant laws and regulations to ensure the security and privacy of customer data. When conducting business

cooperation with key partners we insist on simultaneously signing commercial contracts and confidentiality agreements ensuring all

collaborations are bound by legally effective confidentiality terms. Additionally the company has established specialized execution

processes to protect important corporate data clearly defining the usage scope and confidentiality requirements for critical data and

formulating relevant data management policies and standards. During this reporting period no customer privacy breaches occurred at the

company.Regarding user-end information security we implement access control to enforce employee intranet/extranet access management; deploy

R&D-Driven Innovation

antivirus software for malware protection; install encryption systems to protect important data during transmission; and promote cloud

desktops for key positions enabling centralized data management and security control. Since 2021 we have participated annually in the Innovation serves as the soul of corporate development and the primary driving force behind DunAn's growth. We vigorously promote an

"Cyber Shield" exercises organized by the Zhuji Municipal Public Security Bureau's Cyber Police Unit. Through the deployment of these innovation culture progressively establishing and refining an innovation institutional system. Through advancing key innovation projects

core digital transformation infrastructures we have built an enterprise digital work platform characterized by "security agility and sustainability." implementing technology roadmaps developing innovation platforms organizing innovation-related training programs and conducting

innovation award evaluations we ensure sustained momentum in our innovation efforts.Customer Recognition Guided by the "Three Creations" spirit—Entrepreneurship Initiative and Innovation— we actively foster a company-wide innovation

atmosphere that "encourages exploration rejects mediocrity dares to pioneer and embraces openness." We adhere to the principle of

Partial List of Honors Awarded to DunAn by Customers in 2024

substantially rewarding innovation providing timely incentives to encourage continuous workplace innovation that enhances performance. We

No. Award Title 2024 permit trial-and-error in reforms innovation and other endeavors that align with corporate interests.

1 Leadership Award of the Year Johnson Hitachi Increase Innovation Investment

We possess a National Accredited Enterprise Technology Center National Postdoctoral Research Station Academician Workstation

2 Outstanding Contribution Award Carrier HVAC North Asia

CNAS-Certified Laboratory and National-Grade Full-Performance Testing Center for Central Air Conditioning Systems. We have established

3 Quality Excellence Award Songz Automobile a proprietary core technology support system providing robust platform support for innovation. Additionally we emphasize R&D team

4 Excellent Proposal Award Shanghai Fujitsu building by implementing an innovation "First-in-Command" accountability system leveraging the leadership of top talents. We conduct

5 Best Partner Award (Bronze) LG Korea regular training sessions and discussions on innovation knowledge and methodologies cultivating a highly capable echelon of innovation

6 Outstanding Partner Award Walton Bangladesh professionals. Concurrently we continuously increase investment in technological innovation maintaining dedicated and segregated R&D

funding that is prioritized stable and fully-resourced to guarantee innovation inputs.

7 Best Quality Award of the Year Sharp Thailand

8 Excellent Valve Supplier Award Chongqing Gree Overview of R&D Investment

9 Excellent Tube Component Supplier Award Chongqing Gree 600 4.00%

10 Distinguished Strategic Supplier Award TCL Zhongshan 503500 3.95%

11 Collaborative Partnership Award TCL Zhongshan 434

389

12 Synergy Award Anhui Phnix 400 3.90%

13 Supplier of the Year Award Sichuan Changhong 3.96%

3003.81%3.81%3.85%

14 2024 Excellent Supplier Award FAW Jiefang

15 Co-development Award Yinlun Shares 200 3.80%

16 Rising Supplier Award Mateng Energy R&D Spending

1003.75%

17 Certificate of Appreciation Shanghai Mitsubishi Electric

R&D-to-revenue

18 Premium Supplier Award Gongqingcheng Zhonghuida 0 3.7% ratio

202220232024

5152

Unit: Million RMB2024 Environmental Social and Governance Report Responsibility as Our Anchor

Advancing Cutting-Edge Research Intellectual Property Protection

In pursuing an innovation-led future DunAn enhances core competitiveness through technological innovation while boosting efficiency DunAn fully recognizes that protecting intellectual property safeguards its innovation capabilities and represents a critical dimension of

via business model and management innovation driving industrial upgrading and enabling the company's healthy sustainable and fulfilling sustainable development and social responsibilities. The company has successively obtained certifications as a National Intellectual

sound development. Property Demonstration Enterprise and for National Intellectual Property Management Systems continuously enhancing end-to-end

By leveraging platforms such as the National Technology Center and National Postdoctoral Research Station we have established an open capabilities in IP creation utilization and maintenance. Building on this foundation the company has issued the "Intellectual Property

industry-academia-research integrated technology operation platform. This strengthens independent R&D innovation capabilities Management Standards" which stipulate patent application rewards to encourage independent innovation among R&D personnel

facilitates the development of forward-looking high-tech products with significant market potential and accelerates the industrialization stimulate innovation potential and make patents a "badge of honor" for researchers.of new technologies. "Respecting others' intellectual property while protecting our own" remains our fundamental principle. While safeguarding our inventions

we have also established a patent early-warning system to continuously monitor and analyze patent applications within the industry. This

Case Electric Large-Capacity Four-Way Valve helps avoid patent risks during product development further improves the originality of our product designs forms our own product

DunAn's large-capacity four-way valves have been market-validated for nearly 20 years ranking patent portfolio and strengthens post-market competitiveness.first in global market share with widespread recognition. For 37 years since its establishment

DunAn has consistently focused on customer needs continuously gaining insights into customer Case Intellectual Property Protection Training

requirements and driving innovative R&D. The electric large-capacity four-way valve is an innova-

tive product developed based on customer needs featuring built-in sensors that enable DunAn has continuously strengthened its intellectual property protection system. In 2024 the company conducted stratified

directional process monitoring and self-diagnosis of faults. Its innovative structure achieves and categorized training for personnel with different functions. The intellectual property management team received 16

motor-driven operation and zero-pressure-difference switching significantly enhancing product professional training sessions significantly enhancing their professional capabilities in IP protection utilization and risk

reliability. Driving green development through innovation and leading the future with technology management. Simultaneously 5 specialized innovation protection training sessions were organized for R&D personnel

DunAn steadfastly adheres to the principle of "technology leadership cost leadership and service effectively raising IP awareness during the R&D process and improving protection capabilities for innovation outcomes

leadership" actively assuming dual-carbon responsibilities for the green and high-quality

thereby providing solid safeguards for standardized management of technological innovation achievements.development of the industry.Case Ultra-Silent Electronic Expansion Valve Performance

Noise has always been a persistent technical challenge in the VRV systems. Since 2016 DunAn has been DunAn has continuously increased investment in innovation team building and R&D achieving outstanding results. In 2024 there

conducting research on expansion valve noise reduction technology. In recent years breakthroughs in were 887 patent applications globally 463 patents were granted. And there were 3049 valid patents at the end of the reporting period.noise reduction technology have continued leading to the launch of more market-competitive silent

products. In 2024 the company introduced an industry-first noise reduction solution effectively reducing

the noise level of air conditioning products without subcooling before the valve achieving a reduction Indicator Unit 2024

of 5-6 dB(A). The product is now a leader in the industry.R&D investment amount 10k RMB 50259.26

Case Research on Vibration and Noise Reduction Technology for Four-Way Valves R&D investment/revenue ratio % 3. 96

To address vibration and noise issues during directional changes in typical four-way valve models the Number of R&D personnel & ratio Person/% 1498/10.76

company collaborated closely with Professor Wu Dazhuan's team at Zhejiang University. Through simulation

analysis signal processing test verification and other methods the research optimized the design of Patent applications in reporting period Item 887

four-way valve sliders. This successfully resolved shaking and abnormal noise problems in brass four-way

valves during directional changes reducing their vibration acceleration from an original average of 13.36 Patents granted in reporting period Item 463

m/s2 to 5.86 m/s2. Simultaneously stainless steel four-way valves also showed significant improvement with

vibration acceleration decreasing from 18.24 m/s2 to 12.62 m/s2 while reducing reversing time by 30% Valid patents at the end of the reporting period Item 3049

substantially enhancing reversing performance. Based on these achievements three research papers were

published and included in SCI along with five invention patent applications filed.

53 542024 Environmental Social and Governance Report Responsibility as Our Anchor

Data Security Indicator Unit 2024

DunAn places high importance on data and information security. The company clearly defines the responsibilities of each department

Person 13921

regarding data and information security while strictly complying with relevant laws and regulations. It has established and implemented Total Workforce

information security management systems (including the "Network System Operation Management Regulations" "Network Information

Male Person 8962

Security Management Regulations" "Instant Messaging Tools Management Measures" and "Computer Room Management Measures") to Gender Distribution

ensure data reliability security and confidentiality. During this reporting period no data security incidents occurred. Female Person 4959

Five Major Systems and Classified Protectio

Under 30 Person 3965

DunAn has built a management system centered on ERP CRM PLM BPM and DMS formulating comprehensive data security strategies

under the Classified Protection 2.0 framework. Through strict access controls data encryption log auditing and perimeter protection Age Distribution Aged 30-50 Person 8651

measures the company effectively safeguards the integrity confidentiality and availability of information assets. The continuously

improved information security system not only meets compliance requirements but also provides solid support for sustainable corporate Over 50 Person 1305

development.Percentage of Employees with Associate Degree or Higher % 27.45

Infrastructure Development Education

Distribution

The company has constructed a standardized data center compliant with national classified protection requirements equipped with Master's degree or above Person 163

advanced backup UPS emergency power stations and environmental monitoring systems. It has also established an industrial-grade

dedicated network ring implemented local data multi-replica management and deployed professional storage backup solutions. The

company's data center is housed in a China Unicom IDC facility under a leasing agreement. This facility meets national 5A-level certification

standards ensuring stable and reliable power supply to fulfill the data center's continuous power requirements. Democratic Communication

Case Public-Private Partnership for Data Security Emergency Drills The Company has established participatory communication as a cornerstone of corporate culture development institutionalizing

multi-channel employee engagement mechanisms. Through quarterly employee forums we maintain direct dialogue platforms between

In 2024 DunAn deepened its collaboration with the Zhuji Municipal Public Security Bureau's Cyber Police Unit to enhance management and frontline staff ensuring all voices are heard and respected in organizational decision-making.data security capabilities through "knowledge exchange + drills." In May a government-enterprise security exchange was

held to advance a "policy + technology + management" data security framework under the Cyber Police Unit's guidance. In To broaden communication avenues the company has established dedicated suggestion boxes enabling employees to submit feedback

August authorized by the public security department the company conducted practical penetration tests that simulated at any time regarding operational management workplace conditions and benefit policies. Complementing this regular service satisfaction

cyberattacks to comprehensively identify system vulnerabilities. Based on the assessment results security policies were surveys are conducted to comprehensively understand staff needs and experiences. A closed-loop management system (collect →

optimized to tangibly improve proactive defense capabilities. acknowledge → resolve → follow up) ensures every employee concern receives documented responses and actionable resolutions.Employee Security Compensation & Benefits

The Company consistently prioritizes employee well-being by continuously improving compensation and benefits systems enhancing the

Equality & Respect quality of life care for employees and ensuring their happiness. We are dedicated to creating a supportive and harmonious work environment.In future development the Company will uphold its employee-centric philosophy further refine the employee care and benefits framework and

Adhering to employee-centric and equality-respecting principles the Company strictly complies with applicable laws and regulations. We

foster an improved working and living environment for employees ultimately fostering mutual growth and development for both the

resolutely oppose all forms of illegal employment and forced labor practices including child labor and human trafficking. Discrimination

Company and its employees.on race ethnicity skin color ancestry religion political opinion social origin educational background gender household registration

status health condition age height or language is strictly prohibited. These measures ensure full compliance in employment practices

effectively safeguarding human rights while guaranteeing workplace equality and safety for all employees.

55 562024 Environmental Social and Governance Report Responsibility as Our Anchor

Incentive Compensation Well-being & Engagement

DunAn adheres to the "Four High Principles" (High Quality High Responsibility High Contribution High Compensation). The company has The Company prioritizes employees' quality of life by organizing diverse activities such as outdoor team-building cultural competitions

established a competitive compensation system through methods such as position value assessment employee capability review perfor- and festive celebrations. Through these engagements employees unwind and rejuvenate outside of work fostering mutual understanding.mance evaluation small-unit cost accounting Innovation and Development Awards and market salary benchmarking. This ensures that Team cohesion is continuously strengthened through shared joy and collaborative experiences.employee compensation levels are leading within the region and the industry providing a competitive advantage.At the same time the company has further advanced the incentive system centered around the philosophy of "Rewarding Strivers More Case Migrant Children Support Program Heartwarming Initiative

Grain for More Effort." This system fosters a "shared understanding and responsibility" between the company and all employees creating

a community of shared interests that stimulates employee vitality and cohesion.During the 2024 summer break the Company partnered with the Diankou

Labor Union to launch a“ Migrant Children Support Program” addressing

Welfare & Care childcare challenges for migrant workers' children. This initiative created a

The Company has established a comprehensive welfare system for all employees encompassing multidimensional protections to safe learning and recreational environment for the migrant children and

cultivate a work environment that prioritizes safety health security and humanistic care. offered structured programs including academic tutoring interest

development and safety education. Meanwhile this initiative has significantly

Welfare system Details strengthened migrant workers' sense of identity and belonging toward the

Company enabling them to focus more securely on their work. Through

Living Benefits - Provides complimentary meals and company-subsidized housing for all employees these compassionate actions the Company not only demonstrates its social

- Allocates dedicated private suites for dual-career couples ensuring comfortable living arrangements

responsibility but also fosters a more harmonious workplace environment.- Distributes heat allowance during summer months complying with China's GB/T 4200-2022 High-Tem-

Seasonal Care perature Operation Standards

- Implements shift rotation systems to mitigate heat exposure

Case Women's Day Blooms of Care

- Presents customized commemorative gold coins at 5/10/15-year milestones

Long-service Award

- 2024 disbursement: RMB 3.03 million to 1057 employees The Company values care for female employees heartfelt greeting are extended annually on International Women's Day. On

March 8 2024 every female employee received thoughtfully arranged flowers symbolizing respect and care. Activities includ-

- Operates Employee Mutual Aid Fund providing urgent financial assistance

Family Support ing handicraft workshops and themed lectures were organized where employees engaged in open exchanges and talent

- 2024 interventions: 285 employees supported with RMB 2249100 disbursed showcases. Within this warm joyful atmosphere participants profoundly experienced the care of the organization further

strengthening their sense of belonging and team cohesion.Case Long-Service Recognition Case Study

DunAn launched the Employee Commemorative Awards Program in 2022. In 2024 we

implemented the following tiered recognition system:

48g gold coins awarded to 1 employee with 30+ years of service

35g gold coins granted to 35 employees with 25+ years of service

24g gold coins presented to 63 employees with 20+ years of service

Total investment reached RMB 3.03 million recognizing 1057 employees.During the annual conference employees with 25+ years of service were honored

through dedicated ceremonies and public recognition. This initiative strengthens cultural

identity demonstrates respect for employees' dedication and enhances team cohesion and

organizational belonging.

57 582024 Environmental Social and Governance Report Responsibility as Our Anchor

Case Total Dedication Fueled by Our Spirit Career Growth

The Company hosts 1-2 major basketball tournaments every year showcasing the sport’s vitality and promoting valves of The Company is committed to fostering a culture of lifelong learning continuously refining a multi-path talent development system and

teamwork perseverance and progress. In 2024 we partnered with leading DianKou enterprises to organize inter-company promotion mechanisms. These initiatives support employees at all levels in achieving sustained effective self-improvement and professional

friendship leagues to facilitate exchanges between enterprise labor unions enrich employees’ cultural engagement enhance advancement. By empowering individuals to excel with vitality and self-transcendence on the global industry stage we collectively

workforce dynamism and ignite a collective ethos of collaborative striving and competitive excellence. advance the corporate vision of becoming "the expert of healthy and comfortable environment system solutions within HVAC industry".Empowering Growth & Development

To enhance systematic and sustainable training the Company has established a competency-based training roadmap aligned with role

requirements and talent development objectives. This framework guides annual training implementation through:

Digital Role-Specific Curricula: Structured online programs based on job requirements strengthen core competencies through essential

knowledge/skill mastery

Leadership Pipeline Programs: Three Eagles Development Program (managerial capacity building) and Blue Talent Corps Program

(technical specialist cultivation)

These initiatives ensure effective knowledge transfer and continuous improvement maintaining precise alignment between learning

Case Harmony of Dreams Voices Shaping Tomorrow

content and business imperatives.In September 2024 DunAn celebrated its 37th anniversary at its Zhuji (Diankou) headquarters where 16 group and individual

performers from functional departments and business units converged. Through musical performances spanning genres

from pop anthems to timeless classics they embodied artistic passion while narrating stories of camaraderie aspiration and Case Three Eagles Development Program

human connection. Each vocal expression and stage movement radiated individuality transforming melodies into enduring

memories that echoed the company's enduring spirit. The Three Eagles initiative employs a 70-20-10 development model (70% on-the-job practice 20% mentor-ship 10% classroom

training) to cultivate high-potential talents with strong ambition and learning agility building a leadership pipeline for future

business core teams.Eaglet Program：Targeting new graduates this program immerses recruits in DunAn’s history culture and core values and

clarifies behavioral expectations of a DunAn employee. And the program will help new graduates accelerate their school-to-work

transition through training on company organization market layout product know-how and business unit rotations.Elite Eagle Program: Selecting high-potential junior employees the program develops top-performing frontline staff into

business specialists cultivate section-manager candidates through management fundamentals training so to strengthens

mid-level talent successions.Senior Eagle Program: Empowering outstanding section managers the program builds strategic leadership capability. It will

enhance sustainable management competencies via challenging operational assignment and decision simulations workshops

Case Into Wild Peaks Autumn Trails Unfold and create a middle-management talent reservoir to drive business objectives.Embracing winter's charm through seasonal exploration the company's

labor union organized a November 2024 hiking event themed "Mountain

Trails & Autumn Strolls". Participants traversed two renowned trails in

the Kuaiji Mountain Range Xuedou Ridge and Zoumagang Ancient Pass.Beyond scenic vistas the ascent fostered colleague bonds while

epitomizing the DunAn ethos: "Perseverance at life's ascents navigational

resolve at critical junctures" through challenging terrain.

59 602024 Environmental Social and Governance Report Responsibility as Our Anchor

Case Blue Talent Corps Program Career Progression & Performance Management

As DunAn advances in precision manufacturing and high-end equipment production skilled technicians are pivotal to The company has established three career development Pathways: Professional Pathway (technical expertise) Management Pathway

maintaining technological leadership and enabling the automation and intelligent manufacturing transition. The Blue Talent (leadership roles) Operations Pathway (business stewardship). This multi-path system transcends traditional administrative promotion

Corps Program provides frontline employees and vocational graduates with advancement pathways through: constraints providing specialized advancement routes for technical professionals. Senior technical experts attain compensation packages

Selection Criteria:Targeting associate/vocational diploma holders (including interns and graduates) from production lines comparable to executive leadership. For instance the Technical Pathway progression spans from Junior Technician to Chief Scientist with

Development Framework: top-tier technical compensation exceeding presidential-level remuneration fundamentally redefining conventional single-Pathway career

Workshop immersion systems.Technical curriculum mastery

Cross-functional rotations

Apprenticeship mentoring

Professional Pathways Management Pathways Business Development Pathways

Career Specialization Tracks:

Equipment maintenance technicians

Production supervisors

Quality assurance specialists

Technical service engineers

Process optimization analysts

This initiative systematically cultivates operational expertise and managerial competencies while building sustainable talent CEO

reserves for organizational growth. Scientist Vice - President Vice - President

Senior Expert Director Assistant to the President

General Manager

Experienced Expert Deputy Director

Case Function-Specific Competency Development Deputy General ManagerExpert Department Head

Department Head

To align training with job requirements and equip employees with essential skills the Company implemented targeted Product Manage Deputy Department Deputy Department Head

competency programs across key functions in 2024: Intermediate Engineer Section Chief / Manager

Manufacturing System Training: Focused on production teams this program enhanced managerial critical thinking strength- Key - level

ened cross-functional collaboration motivated high-performance team culture so to improve quality control and production Professional Position

site management. Assistant Three Career Pathways

Supply Chain Training: Focused on procurement teams this program focused on systemic risk identification and global

supply chain management strategies.Quality Management Training: Focused on quality management team this program covers foundational quality standards

and data-driven quality analytic methodologies.The company implements a Balanced Scorecard-based organizational performance framework cascading strategic objectives to departmental

and individual levels to ensure effective execution. In the Incentive Architecture the Company insists on business unit reform including

independent operation accounting and evaluation by customer segment region and product line. Incentive schemes are continuously

Indicator Units 2024 refined across production marketing and functional units to deepen enterprise-wide business ownership. And meanwhile the first-phase

employee stock ownership plan has been launched to stimulate employees’ engagement and innovation fueling sustainable corporate

Training Participants Person-time 39980

advancement.Average Training Hours per Employee Hour 6.2

Training Coverage Rate % 100

Training Investment 10k RMB 269.2

61 622024 Environmental Social and Governance Report Responsibility as Our Anchor

Professional Skills Development Occupational Health & Safety Protection

To advance technical competencies and career progression the Company has established Technical Proficiency Evaluation Framework Occupational health and safety constitute the organization's lifeline and employees' fundamental right. The Company prioritizes

including Role-specific criteria for engineers and frontline staff (including Welding Technician Certification Protocol). And Multi-dimensional workforce well-being by adhering to safety-first prevention-focused and holistic management principles committed to safeguarding

assessment is adopted including efficiency metrics product quality outcomes industry certifications and professional honors. employees' physical and mental health while preventing work-related hazards.The Company cultivates a craftsmanship ethos emphasizing mastery through deliberate practice rejection of short-termism and

sustained specialization and incremental refinement. In order to motivate the passion of employees the Company organized Skill Conduct comprehensive annual health screenings for all employees with recent

Enhancement Initiatives including annual Skills Mastery Competitions across all function departments (from production to management) and enhancements in cardiac health screenings through increased investment to proactively

Cross-departmental technical exchange platforms. identify and mitigate potential health risks.Health Check-ups

Case Forging Core Competencies Cultivating Craftsmanship

In October 2024 the Company organized its annual Skills Excellence Initiative leveraging competitions to drive training and Implement ongoing occupational health risk evaluations to systematically identify

knowledge exchange across technical teams. Key outcomes included: assess and control workplace hazards ensuring operational environment safety.Corporate-Level Competitions: 14 events engaging 702 participants with 41 technical experts recognized Risk Assessment

Business Unit Competitions: 50 specialized contests involving 1810 participants awarding 217 divisional honors

Participants spanned front line production staff technical specialists and functional managers collectively demonstrating

organizational technical prowess through hands-on skill demonstrations and process optimization challenges. Provide compliance-certified personal protective equipment (PPE) tailored to diverse

operational conditions guaranteeing safety across all work scenarios.Protective Equipment

Deliver certified first aid training to employees achieving 100% department-level

response coverage. Deploy automated external defibrillators (AEDs) strategically

across facilities enabling immediate emergency response capabilities.Emergency Preparedness

Case Advancing Humanitarian Care through Cardiac Health Initiatives

Health & Safety Assurance In 2024 demonstrating humanitarian commitment the Company:

The EHS Management Department oversees the planning implementation inspection and evaluation of corporate safety operations. Enhanced Health Screenings: Introduced specialized cardiac health evaluations in annual checkups

General managers across business units are accountable for enforcing management protocols within their respective divisions. Employees Emergency Readiness: Aligned with the "Golden 4-Minute" response standards the Company deployed 16 AED units across

are required to strictly adhere to safety regulations and actively participate in safety training and initiatives. The company has established production zones and offices and established 18 first aid stations.Safety Inspection and Performance Management Regulations to monitor and audit safety compliance across all units to conduct routine Certified Training: Conducted CPR/AED certification programs for production supervisors facility managers and security

checks on employee behavior environmental conditions and equipment maintenance to drive continuous improvement in process personnel achieving 100% trainee qualification and promoted the "First Aid for All by All" principle to all employees.safety performance through data-driven analysis.Environmental Management Team

Fire Management Team

EHS Management Occupational Health and Safety Group

Department

5S on-site management

Integrated Management Departmen

63 642024 Environmental Social and Governance Report Responsibility as Our Anchor

Facility Security Assurance Supplier Management Strategy

The Company maintains a professional security team and continuously enhances its comprehensive security system. Conducting DunAn has established a scientific and effective supplier management strategy covering key dimensions from accurately developing

year-round patrols across offices production floors and employee residential zones we safeguard personnel safety while fostering secure high-quality suppliers maintaining good supply-demand cooperation relationships strictly evaluating to ensure supply quality to

working and living environments. comprehensively controlling risks to ensure supply stability providing supply assurance for the company's steady development.Performance Metrics

To ensure the quality of supplier cooperation and meet sustainable development requirements

Indicator Unit 2024 the following access qualification review standards are set:

Independent legal entity with advanced and reasonable product process technology complete

Safety Production Investment 10k RMB 677.80 production testing and experimental equipment.ISO9001 and ISO14001 system certifications from third-party certification bodies in compliance

Total Hours Hour 17490.5 with RoHS and REACH management standards.Safety Training Provision of environmental compliance-related materials which is a necessary condition for access.Persons Hours Hour 1.66 Good production and financial status significant price advantages and potential for healthy

development.Investment 10k RMB 619.90

Work Injury Insurance Enterprise managers and employees have a good quality concept and awareness of quality

Coverage Rate improvement.% 100

Access Review

Investment 10k RMB 13.41

Safety Liability Insurance

Coverage Rate % 50

Occupational Disease Incidence % 0

Work-related Fatalities Person 0

Occupational Health & Injuries

Lost Workdays Due to Injuries Day 3751.5 To further optimize the supply chain and ensure the stable and efficient operation of the company

DunAn strictly follows the“ Supplier Performance Management Measures” to standardize and strengthen

Lost Time Injury Frequency Rate 1.96 the performance evaluation and implementation of external purchase and outsourcing suppliers.Suppliers are comprehensively managed and evaluated regularly from multiple dimensions such as cost

delivery quality technology and service according to the“ Supplier Performance Evaluation Rules.”

Through a systematic and standardized evaluation process suppliers are encouraged to continuously

Supply Chain Security improve ensuring they can continuously provide high-quality products that meet the company's requirements while maintaining reasonable prices and high cost-effectiveness.Evaluation Based on the evaluation results the company will strictly implement subsequent follow-up measures.and Appraisal Suppliers with excellent performance will be given more cooperation opportunities and incentive

policies; suppliers with issues will be promptly communicated with and assisted in developing improvement

Sustainable Supply Chain plans setting reasonable rectification deadlines and continuously following up on rectification

progress; for suppliers with ineffective rectification or long-term non-compliance measures such as

DunAn actively practices the concept of green development by regularly assessing the environmental performance of suppliers urging reducing orders suspending cooperation or even eliminating them will be taken to promote the overall

strict compliance with environmental regulations and striving to reduce pollution and resource waste during production. At the same improvement of supplier levels and achieve continuous optimization of the supply chain.time the company vigorously promotes green innovation in the supply chain working closely with suppliers to jointly develop a series of

sustainable solutions covering areas such as recycling of renewable resources application of energy-saving equipment and research and During cooperation if a supplier's comprehensive performance score is below 60 points (Grade D) for

development of recyclable packaging. two consecutive quarters their supply quota for the next quarter will be canceled and cooperationqualifications will be terminated. At the same time the company has formulated the“ Supplier BlacklistIn terms of social responsibility DunAn has signed the“ Supplier Code of Conduct” with suppliers to ensure they strictly adhere to laborManagement Measures” which clearly stipulate that during the performance period of cooperation if a

laws effectively safeguard the legitimate rights and interests of their employees and create a safe and healthy working environment for supplier engages in illegal irregular breach of contract dishonesty or poor performance behaviors they

employees in the supply chain. Additionally the company closely monitors various social responsibility issues within the supply chain Exit will be included in the blacklist and permanently disqualified from supplying after supplier application

firmly opposes improper practices such as child labor excessive working hours and forced labor and is committed to building a responsible Mechanism investigation or company verification.supply chain.

65 662024 Environmental Social and Governance Report Responsibility as Our Anchor

Case Enhancing Quality Management Concepts and Co-creating Green Suppliers Equal Treatment of SMEs

DunAn actively practices corporate social responsibility and is committed to building an equal and win-win supply chain ecosystem. The

On June 12 2024 DunAn held a supplier coaching meeting at the Diankou base focusing on three major themes: upgrading

company establishes a fair and transparent procurement mechanism strictly implements the“ Quota Management Measures” and“ Supplyquality management co-building a green supply chain and analyzing market trends. Through concept promotion path explora-Chain Performance Management Measures” providing equal market participation opportunities for SMEs. Specific measures include:

tion and case analysis the company encouraged suppliers to optimize management processes implement environmental

lowering procurement thresholds simplifying approval processes reducing participation barriers for SMEs; establishing long-term stable

protection measures and strategically layout the market aiming to strengthen collaborative efficiency enhance comprehensive

strategic cooperation relationships providing technical support and professional training to help SMEs enhance core competitiveness. In

competitiveness and achieve mutual benefits and win-win results in sustainable development between the company and

addition the company adheres to the“ three guarantees” principle: ensuring legal and standardized operations ensuring timely and quality

suppliers.delivery and ensuring payment according to agreements creating a healthy and sustainable development environment for SMEs.Indicator Unit 2024

Accounts payable (including notes payable) 10k RMB 389118.38

Proportion of accounts payable (including notes payable) to total assets % 32.02

Amount of overdue payments 10k RMB 0

Amount of overdue payments to SMEs 10k RMB 0

Indicator Unit 2024

Total number Item 287

supplier evaluations Number of suppliers assessed for social impact Item 73

Number of suppliers assessed

for environmental impact Item 73 Social Security

Number of unqualified suppliers eliminated Item 21

Number of major risk and impact events Item 0 Community Engagement

Number of supplier training sessions held annually Session 1 Local Operations and Employment

DunAn places great emphasis on local employment recognizing it as a key intersection between business development and social contribution.Number of supplier participants in training Person 68 The company actively integrates into local markets and establishes strong ties with diverse talent pools. By recruiting local professionals through

multiple channels DunAn not only creates a wide range of high-quality job opportunities but also effectively boosts local employment income

Supply Chain Risk Management levels and quality of life.DunAn has established a supply chain risk management system focused on legal compliance and sound business operations. At the legal level the At our overseas facilities local operations are equally prioritized. For example at the Thailand plant local employees accounted for 98% of

company signs a "Basic Supply Agreement" with all qualified suppliers emphasizing the legal compliance of suppliers. This helps prevent fraudulent the production workforce by the end of 2024 significantly enhancing team stability and market responsiveness.contracts intellectual property infringements commercial bribery and other illegal activities. Suppliers that may cause legal disputes economic

liabilities or reputational damage are included in the non-cooperation list. Case Embracing Thai Cultural Traditions

At the operational level the company rigorously evaluates the financial health of suppliers during the onboarding process. This ensures that In Thailand DunAn has deeply integrated into the local community by respecting and celebrating traditional Thai festivals. This

suppliers have sufficient cash flow a reasonable debt-to-equity ratio and stable profitability. By doing so the company effectively prevents supply culturally aligned operational approach has strengthened both economic and social outcomes. DunAn Thailand fully observes all

interruptions or product quality issues caused by poor supplier management thus safeguarding the continuity and stability of the company's national holidays including Makha Bucha Day Songkran Festival and the birthday of King Rama X. Employees are granted full

production and operations. leave during these eight key festivals enabling them to participate in temple offerings Loi Krathong ceremonies and other local

This dual-control mechanism through proactive prevention and dynamic monitoring significantly enhances the supply chain's resilience to risks. customs.

67 682024 Environmental Social and Governance Report Responsibility as Our Anchor

Local Procurement Case 20 Years of Academic Sponsorship 257 Students Supported

While advancing localized operations DunAn also emphasizes deep integration with local industrial chains. The company prioritizes local suppliers in

its procurement processes. For example 72% of outsourced processing units in Zhuji are sourced locally. This strategy effectively reduces supply Facilitated by the local Working Committee for the Care of the Next Generation 2024 marked the 20th year of DunAn’s educa-

chain costs and transportation risks while supporting the coordinated development of local industries and enhancing regional economic tional sponsorship for students from underprivileged families in Zhuji. The initiative themed“ Love Helps Realize Dreams” not

competitiveness. only addresses essential livelihood and educational needs but also demonstrates care empathy and unity in action—

underscoring its significance as a meaningful public welfare program.Public Welfare and Philanthropy

Elderly Care Programs

DunAn has remained steadfast on the path of philanthropy. Every year during the Spring Festival the company extends warmth

and care to five administrative villages in Diankou Town providing gifts and support to over 900 elderly residents aged 70 and

above as well as disadvantaged families. These efforts help ensure that vulnerable groups feel valued and cared for during

traditional holidays.Case 27 Consecutive Years of Community Support

Since 1998 DunAn has remained committed to poverty alleviation and community care for 27 consecutive years—a

reflection of the company’s deeply rooted values. What may seem like a small task for a large enterprise has become a

long-standing tradition at DunAn. These sustained efforts are not only an expression of our corporate culture but also a Indicator Unit 2024

sincere and proactive fulfillment of our social responsibility.Total philanthropic donations 10k RMB 44.79

Educational Support Programs

For the past 20 years DunAn has consistently supported higher education for underprivileged students helping 30 high school students

and 227 university students pursue their academic dreams. This enduring commitment reflects the company’s belief that compassion not

only warms hearts but also unites communities and contributes to a better society.

69 702024 Environmental Social and Governance Report KPI Table

KPI Table

Climate Protection

Energy

Indicator Unit 2024

Indicator Unit 2024

Environmental Protection Investment and Environmental Tax 10k RMB 1250.15

Energy Use Profile

Total energy consumption Tce 16936 Environmental Pollution Incidents

Time 0

Energy Consumption (by Type) Penalty Amount 10k RMB 0

Diesel L 13704

Carbon Emissions

Natural Gas M3 3173456

Indicator Unit 2024

LGP M3 0

Total Emissions tCO2e 34593

Non-renewable Electricity Purchased 10000 kWh 10328

Scope 1 tCO2e 11287

Renewable Electricity Purchased 10000 kWh 582

Scope 2 tCO2e 24755

Proportion of Renewable Electricity % 5.3

Direct Energy Consumption Tce 16936 Air Emissions

Indirect Energy Consumption Tce 0 Indicator Unit 2024

Energy Intensity Tce/10k RMB 0.025

SOx kg 796.7

Clean Energy Usage

NOx kg 4621.5

Total Clean Energy Consumption MWh 5820

VOCs kg 5635.2

Energy Consumption (by Type)

PV Power Generation 10000 kWh 582 Water Discharge

Proportion of PV Power % 6.0 Indicator Unit 2024

Natural Gas M3 3173456 Industrial Wastewater M3 238922

Domestic Wastewater M3 52400

Water resource

COD Tonne 3.44

Indicator Unit 2024

NH3-N Tonne 0.177

Withdrawal 10000m3 38.86

Water Discharge 10000m3 23.89 Total Nitrogen Tonne 0.623

Consumption 10000m3 14.97 Total Phosphorus Tonne 0.395

Consumption Intensity Tonne / 10k RMB revenue 0.737

71 722024 Environmental Social and Governance Report KPI Table

Solid Waste Social KPI

Indicator Unit 2024

Employee

Total Waste Tonne Tonne 18777.08

Indicator Unit 2024

Include：

Total Workforce Person 13921

Total Tonne 17910.89

General Waste Male Person 8962

Gender Distribution

Intensity Tons / 10k RMB 0.01078

Female Person 4959

Total Tonne 870.19

Hazardous Waste Under 30 Person 3965

Intensity Tons / 10k RMB 0.00194 Age Distribution Aged 30-50 Person 8651

Over 50 Person 1305

Waste Recycling

Percentage of Employees with Associate Degree or Higher % 27.45

Indicator Unit 2024 Education Distribution

Master’s degree or above Person 163

Total Tonne 17910.89

Waste Recycling

Rate % 95.36

Training

Environmental Compliance Indicator Unit 2024

Indicator Unit 2024 Training Participants Person-time 39980

Average Training Hours per Employee Hour 6.2

Amount of Major Environmental Penalties 10k RMB 0

During the Reporting Period Training Coverage Rate % 100

Note: Training Investment 10k RMB 269.2

The disclosure boundaries for Energy Water resources Carbon emissions and Water Discharge performance : Dunan Hetian Dunan

Machinery Dunan Thermal Technology Dunan Automotive Thermal Management Dunan Electro-Mechanical.The disclosure boundaries for Air emissions performance : Dunan Hetian Dunan Machinery Dunan Electro-Mechanical.The disclosure boundaries for solid waste and Waste Recyling performance : Dunan Hetian Dunan Machinery Dunan Automotive Thermal

Management Dunan Electro-Mechanical.

73 742024 Environmental Social and Governance Report KPI Table

Health & Safety Assurance Data Security and Customer privacy

Indicator Unit 2024 Indicator Unit 2024

Safety Production Investment 10k RMB 677.80 Data Security Incidents 10k RMB 0

Total Hours Hour 17490.5

Safety Training Customer Privacy Breach Incidents 10k RMB 0

Persons Hours Hour 1.66

Investment 10k RMB 619.90 Supply Chain Security

Work Injury Insurance

Coverage Rate % 100 Indicator Unit 2024

Investment 10k RMB 13.41 Total number Item 287

Safety Liability Insurance

supplier evaluations Number of suppliers Coverage Rate % 50 assessed for social impact Item 73

Occupational Disease Incidence % 0 Number of suppliers assessed for environmental impact Item 73

Work-related Fatalities Person 0 Number of unqualified suppliers eliminated Item 21

Occupational Health & Injuries

Lost Workdays Due to Injuries Day 3751.50 Number of major risk and impact events Item 0

Lost Time Injury Frequency Rate 1.96 Number of supplier training sessions held annually Session 1

Number of supplier participants in training Person-time 68

Product and Service

Indicator Unit 2024 Fair Treatment of SMEs

Customer-end Product Recall Case 0 Indicator Unit 2024

Customer Complaint Rate per ￥10 Million Sales Per ￥10 Million 1.95

Accounts payable (including notes payable) 10k RMB 389118.38

Proportion of accounts payable (including notes payable)

R&D-Driven Innovation to total assets % 32.02

Indicator Unit 2024 Amount of overdue payments 10k RMB 0

R&D investment amount 10k RMB 50259.26 Amount of overdue payments to SMEs) 10k RMB 0

R&D investment/revenue ratio % 3. 96

Social Contributions

Number of R&D personnel & ratio Person/% 1498/10.76

Indicator Unit 2024

Patent applications in reporting period Item 887

Total philanthropic donations 10k RMB 44.79

Patents granted in reporting period Item 463

Valid patents at the end of reporting period Item 3049

75 762024 Environmental Social and Governance Report KPI Table

Governance KPI Anti-Corruption and Clean Governance

Indicator Unit 2024

Indicator Unit 2024

Number of management personnel covered by anti-bribery and anti-corruption training Person 50

Total number of board members Person 9

Percentage of management personnel covered by anti-bribery and anti-corruption training % 100

Male Person 9

Board members by gender Number of employees covered by anti-bribery and anti-corruption training Person 13735

Female Person 0

Percentage of employees covered by anti-bribery and anti-corruption training % 98.66

Industry experts Person (Independent Director) 1 Total number of commercial bribery and corruption incidents Case 2

Board members by

professional /educational Legal experts Person (Independent Director) 1 Number of individuals disciplined for commercial bribery and corruption Person 3

background

Financial experts Person (Independent Director) 1 Anti-Unfair Competition

Average tenure of board members Year 2.70 Indicator Unit 2024

Proportion of independent directors on the board % 33.33 Amount involved in lawsuits or major administrative penalties

due to unfair competition practices RMB 0

Proportion of independent directors on the Audit Committee % 66.67

Proportion of independent directors on the Remuneration Committee % 60

Proportion of independent directors on the Nomination Committee % 60

Number of board meetings held Time 7

Attendance rate of board members % 100

Number of Audit Committee meetings held Time 3

Number of Remuneration Committee meetings held Time 2

Number of Nomination Committee meetings held Time 2

Total Number Person 5

Supervisory Board members Shareholder representative supervisors Person 3

Employee representative supervisors Person 2

77 782024 Environmental Social and Governance Report Index of Indicators

Index of Indicators Feedback Form

Thank you for reading DunAn's Environmental Social and Governance (ESG) Report. If you have any comments or suggestions during your

Section SZSE Guidelines No.17 (Trial) GRI Standards reading please feel free to let us know. Your feedback will help us further improve our sustainability management in the future.You are from：

About this Report / GRI 2: General Disclosures

Message from the Chairman Basic Company Information GRI 2: General Disclosures Government and Regulatory Agencies

About Us Basic Company Information GRI 2: General Disclosures Shareholders and Other Investors

Corporate Voluntary Disclosure Topics GRI 2: General Disclosures Customers

Governance Anti-bribery and Anti-corruption GRI 207: Tax Suppliers and Partners

Robust Integrity and Anti-Unfair Competition GRI 205: Anti-corruption

Governance Compliance

Employees and Other Staff

Stakeholder Engagement GRI 206：Anti-competitive Behavior

Due Diligence GRI 2: General Disclosures Industry Associations

ESG Management

Climate Action GRI 3: Material Topics

Your Contact Information：

Energy Use GRI 305: Emissions

Climate Shield

Circular Economy GRI 302：Energy

Water Use GRI 301: Materials

Circular Shield

Environmental Compliance GRI 303: Water and Effluents Your Feedback：

Sustainable Shield

Pollutant Emissions GRI 305: Emissions Questions Very Good Good Average Poor Very Poor

Eco Shield Waste Management Your overall evaluation of this report

Biodiversity & Ecosystem Protection GRI 306: Waste

Does the report reflect DunAn’s significant impacts in ESG aspects

Biodiversity shield Product & Service Security GRI 304: Biodiversity

Your overall evaluation of information disclosure in this report

GRI 416: Customer Health and Safety

Innovation

Product Security GRI 417: Marketing and Labeling Your overall evaluation of the content and layout design of this reportData Security and Privacy

GRI 418: Customer Privacy

GRI 401: Employment What other aspects would you like to learn about through DunAn’s ESG Report

GRI 403: Occupational Health and Safety (Fill in your suggestions or interests)

GRI 404: Training and Education

Responsibility Employee Security Employee GRI 405: Diversity and Equal Opportunity

&Security GRI 406: Non-discrimination

GRI 407: Freedom of Association

GRI 408: Child Labor

GRI 409: Forced or Compulsory Labor

Supply Chain Supply Chain Security GRI 308: Supplier Environmental Assessment

Security Fairness to SMEs GRI 414: Supplier Social Assessment

Community Rural Revitalization GRI 204：Procurement Practices

Security Social Contributions GRI 413: Local Communities

KPI Summary / /

Index of Indicators / /

Feedback Form / /

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