2025 Environmental Social and 2025

Governance（ESG) Report ENVIRONMENTAL SOCIALANDGOVERNANCE (ESG) REPORT

Leader of Healthy and Comfortable EnvironmentAbout This Report 01

Governance Framework

Management Statement 03

About DunAn 05 Corporate Governance 11

Ethics & Compliance 14

ESG Management 20

Environmental Sustainability

Climate Action 29

Circular Shield 41

Environmental Shield 45

Ecological Shield 53

Responsible Operations

Product Responsibility 57

Key Performance Table 100

Employee Well-being 74

Index Table 109

Supply Security 89

Feedback Form 110

Social Contribution 952025 Environmental Social and Governance Report About This Report

About This Report

Report Overview Basis for Report Preparation

This report is the 2025 Environmental Social and Governance (ESG) Report released by Zhejiang DunAn Artificial Environment Co. Ltd. Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report (For Trial Implementation)

(hereinafter referred to as "DunAn Environment" "DunAn" "the Company" or "we"). The disclosure period of this report is from January Guide No. 3 of Shenzhen Stock Exchange for the Self-Regulation of Listed Companies ? Preparation of Sustainability Report (2026 Revised

1 2025 to December 31 2025. To enhance data comparability and content continuity some information has been appropriately Version)

extended. In the future DunAn Environment will publish an ESG report annually regularly disclosing annual operational achievements Global Reporting Initiative Sustainability Reporting Standards (GRI Standards)

beyond financial performance to the public and taking action to practice sustainable development. United Nations Sustainable Development Goals (SDGs)

Report Boundary and Reliability Report Access and Feedback（ Communication ）

Unless otherwise stated the scope of disclosure in this report is consistent with the "DunAn Environment 2025 Annual Report." The This report is published in simplified Chinese and concise English electronic versions available on the company's official website. If you

specific organizational entities corresponding to the company abbreviations used in this report are detailed in the figure below. All have any suggestions or questions regarding this report please feel free to contact us via email (dunanhj@ dunan.cn).monetary amounts mentioned in this report are in CNY unless otherwise indicated. The data used in this report are sourced from the

company's annual reports official documents and statistical reports. The Company's Board of Directors guarantees that the content

of this announcement is true accurate and complete with no false records misleading statements or significant omissions and

assumes individual and joint liability for the truthfulness accuracy and completeness of its content.Full Name Abbreviation

Zhejiang DunAn Hetian Metal Co. Ltd. DunAn Hetian

Zhejiang DunAn Machinery Co. Ltd. DunAn Machinery

Zhejiang DunAn Thermal Technology Co. Ltd. DunAn Thermal Technology

DunAn Vehicle Thermal Management Technology Co. Ltd. DunAn Vehicle Thermal Management

DunAn Electro-Mechanical Technology Co. Ltd. DunAn Electro-Mechanical

Zhuhai Huayu Metal Co. Ltd. Zhuhai Huayu

DunAn (Wuhu) Zhongyuan Automatic Control Co. Ltd. Wuhu Zhongyuan

Nanchang Zhonghao Machinery Co. Ltd. Nanchang Zhonghao

Hangzhou Saifute Equipment Co. Ltd. Hangzhou Saifute

Jiangsu Tongsheng Heat Exchanger Co. Ltd. Jiangsu Tongsheng

Zhejiang DunAn International Trade Co. Ltd. DunAn International Trade

DunAn Metals (Thailand) Co. Ltd. DunAn Metals (Thailand)

01 022025 Environmental Social and Governance Report Management Statement

Management Statement

As the seasons turn and a new chapter of sustainable development unfolds ESG has evolved from a voluntary initiative into Responsible Operations: Creating Diverse Value through Social Prosperity

a core strategic imperative for enterprises driven by the global wave of sustainable development and China’s high-quality The core value of an enterprise lies in symbiosis and common prosperity with all its stakeholders. In 2025 we continued to

development strategy. Guided by our vision of The Leader in Healthy Comfortable Environments DunAn Environment has drive product innovation and service optimization with 666 new patents granted throughout the year bringing our total

embedded ESG principles into the very foundation of our operations honoring our commitment to responsible development valid patents to 3770. Through technological innovation we have continuously enhanced customer value and our market

while delivering steady and robust business growth. In 2025 we made a comprehensive strategic layout in the CO?natural competitiveness. Meanwhile we continued to improve our employee development and incentive mechanisms launched

refrigeration components sector advancing the R&D of a full portfolio of CO? component products. We also delivered solid results multi-level training and career development programs fostered an equal and inclusive workplace and strengthened work

in social responsibility and sustainable development with our Wind ESG rating upgraded to Grade A earning authoritative recognition safety and occupational health management. No major work safety liability incidents occurred throughout the year providing a

for our sustainable development capabilities. solid foundation for employee growth and the steady development of the company.Strengthening the Core of Governance: Laying a Solid Foundation for Long-Term Development through In terms of supply chain management and social responsibility we accelerated the construction of a digital procurement

Integrity in Operations and management system launched our Supplier Relationship Management (SRM) system to improve the efficiency and

The cornerstone of sustainable development lies in sound and standardized corporate governance. In 2025 we continued transparency of supply chain collaboration. We also strengthened supplier management and communication mechanisms

to refine our governance system and advance board diversity with female directors accounting for over 20% of the board driving the development of a sustainable supply chain ecosystem and supporting the joint development of our small and

and independent directors making up 60% of all specialized board committees resulting in continuous optimization of our medium-sized partners. In addition we actively participated in public welfare and community development initiatives

governance structure. Meanwhile we established a three lines of defense risk management framework conducted audits continuously creating social value deepening collaboration with all stakeholders and fostering a mutually beneficial

and risk screenings in key focus areas and delivered anti-bribery and anti-corruption (ABAC) training to 12581 participants long-term and stable development pattern.continuously reinforcing the bottom line of integrity in business conduct. We have steadily improved our information While the journey ahead is long and fraught with challenges steady progress will take us to our destination. Every step of

disclosure and investor communication mechanisms with a 100% approval rate for all proposals reviewed by the board of DunAn Environment's steady growth is inseparable from the long-term trust and strong support of all our stakeholders.directors throughout the year effectively ensuring information transparency and the protection of investor rights. Through Looking ahead we will remain anchored to our 2030 Sustainable Development Goals firmly advance our green and

compliance promotion and targeted initiatives we have fostered a fair operating environment supporting high-quality low-carbon transition path deepen technological innovation and industrial collaboration and continuously improve the

development with systematic governance capabilities. quality of our development and our capacity to create social value. DunAn Environment will respond to the call of the times

with a strong sense of responsibility empower a green future through technological strength and work hand in hand with

Environmental Sustainability: Leading the Creation of a Healthy Environment through Nature-Friendly Principles

customers employees partners and all sectors of society to build a more resilient greener and more sustainable development

Faced with the global challenge of climate change green transition is both a corporate responsibility and a strategic growth

ecosystem.opportunity. In 2025 we continued to optimize our energy mix advancing the construction of distributed photovoltaic (PV)

and energy storage projects with the coordinated application of 3MW/6MWh battery energy storage and PV systems

deployed across multiple bases driving a steady increase in the share of clean energy in our total energy consumption. We

also implemented energy-saving technological transformation projects including air compressor system optimization and

energy management platform upgrades with key projects achieving an energy saving rate of over 20%. Our total annual CO?

emission reductions reached thousands of tons. On the product side we accelerated green technology innovation and

continuously improved our full suite of CO? product solutions. Through the coordinated advancement of green manufacturing

and digital management we have driven simultaneous improvements in production efficiency and resource utilization

leading the industry toward high-quality and sustainable development through green innovation.

03 042025 Environmental Social and Governance Report About DunAn

About DunAn

Organizational Profile Global OperationsDunAn (DunAn Environment) has been deeply engaged in the HVAC&R industry for many years. DunAn takes the“ Leader of healthy The company operates 20 production bases globally located in HangzhouZhuji Wuhu Hefei Thailand Nanchang Zhongshan Zhuhaiand comfortable environment” as the vision. Its mission is to“ promote energy efficiency and optimize environment” DunAn’s main Shijiazhuang Tianjin and other regions. It has established 9 overseas subsidiaries and marketing institutions covering North America

business covers components manufacturing valves pipe assembly heat exchangers and pressure vessels for household air con- Europe Japan South Korea Thailand India Malaysia Vietnam and other countries and regions.ditioning commercial air conditioning heat pump refrigeration and other fields) and equipment manufacturing (commercial air The company has established a significant overseas manufacturing hub in Thailand. In addition to the DunAn Metals (Thailand) Base the

conditioning and special air conditioning in nuclear power plant cleanrooms data center rail transit etc. besides cold chain solutions) in company newly established the DunAn Thailand Automotive Thermal Management Base and the DunAn Thailand Thermal Heat Exchanger

addition core components for new energy vehicle thermal management system.In 2004 DunAn Environment (002011) listed on the Base in 2025 bringing the total number of production bases in Thailand to three. This has enabled the company to build an efficient and

ShenZhen Stock Exchange. synergistic overseas manufacturing and marketing system.Economic Performance

Indicators Unit 2025 2024 2023

Total Assets CNY 100M 122.90 121.53 107.83 DunAn Europe(Germany)

(since 2015)

Operating Revenue CNY 100M 130.35 126.78 113.82

DunAn Japan DunAn PrecisionNPAT-P CNY 100M 10.78 10.45 7.38 DunAn Korea (since 2006)(since 2016) (since 2014)

Hangzhou

India Office Diankou

Cash Flow CNY 100M 14.40 11.60 8.12 (since 2008)

DunAn Thailand

(since 2008) Vietnam Office

(since 2017)

Malaysia Office

(since 2011)

Indonesia Office

(since 2023)

Corporate Culture

Leader in Healthy and

Comfortable Environments Cor Integrity Respect Professionalismn e V

Enhancing Energy Efficiency ion d P

h Continuous Innovation as the Shield

Optimizing the Environment Bran Customer Value as the Anchor

0506

Visio

ilosophy

s

alu

e

issM2025 Environmental Social and Governance Report About DunAn

Innovation & Technology Award-Winning Enterprises Honor Name Awarding

As a global leader in the HVAC&R components industry the company's production and sales volumes of its main products rank among Ministry of Industry and Information

DunAn Electro-Mechanical National Green Factory

the top in the world. It has established long-term strategic partnerships with globally renowned air conditioning enterprises such as Technology of thePeople's Republic of China

GREE Midea Haier DAIKIN MITSUBISHI LG Carrier and Bosch; new energy vehicle companies including BYD GEELY SAIC and CATL; as DunAn Thermal Technology Zhejiang Province Single Champion

well as large central state-owned enterprises such as China National Nuclear Corporation CRRC and BOE. Innovation is regarded as the

soul of the company's development continuously enhancing its core competitiveness in technology and quality leadership. The company Zhejiang Province Modernized Zhejiang Province Economy andManagement Enterprise Information Technology

possesses a nationally recognized enterprise technology center a national-level postdoctoral workstation a CNAS-accredited laboratory

Zhejiang Province Third Batch of Eagle

and a national-level full-performance testing center for central air conditioning. It has established a core technology support system with Enterprises

independent intellectual property rights. The company has participated in the drafting and revision of 104 national and industry Top 200 Private Enterprises in Zhejiang

standards and has been honored with awards such as the "National Quality Award" "National Innovation Pilot Enterprise" " The Second Province

Prize of National Science and Technology Progress Award" and "China Patent Excellence Award" etc. Top 200 Manufacturing Private

The company has participated in the drafting and revision of 104 national and industry standards including "Direct-driven electronic Enterprises in Zhejiang ProvinceDunAn Environment

expansion valves for air-conditioning equipment" "Solenoid valve for refrigeration and air conditioning equipment" "Copper service Top 200 Private Enterprises in Zhejiang Zhejiang Federation of Industry

Province by R&D Investment and Commerce

valve for refrigeration systems" "Solenoid valve for CO? refrigeration systems" "Electronic expansion valves for CO? refrigeration

systems" "Rooftop air conditioning unit" and "Water chilling (heat pump) packages using the vapor compression cycle—Part 1: Water Top 200 Private Enterprises in Zhejiang Province by Invention Patents

chilling (heat pump) packages for industrial & commercial and similar applications" Among these the company served as the primary

Top 100 Private Enterprises in

drafting unit for 20 standards. It is the first enterprise in China to produce nuclear-grade water chillers for nuclear power plants with Shaoxing City

independent intellectual property rights. Additionally it achieved the independent research and development of the first domestic key 2025 Annual Standardization Outstanding National Refrigeration and Air Conditioning

component for passive nuclear power plant reactors—the AP1000 reactor top fan. Contribution Unit Equipment Standardization Committee

DunAn Vehicle Thermal Management

Market Position Hangzhou Saifute

The company is a member of the American Air-Conditioning Heating and Refrigeration Institute (AHRI) a member of the European Seventh Batch of Specialized Refined Ministry of Industry and Information

Jiangsu Tongsheng

Heat Pump Association (EHPA) a standing director unit of the China Refrigeration and Air-Conditioning Industry Association a director Distinctive and Innovative "Little Giants" Technology of thePeople's Republic of China

unit of the Chinese Association of Refrigeration a committee member unit of the National Technical Committee for Standardization of DunAn Machinery

Refrigeration and Air-Conditioning Equipment a member unit of the China Association for Quality and a vice president unit of the

Zhejiang Refrigeration and Air-Conditioning Industry Association. Wuhu Zhongyuan

Honors

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)

GRI 2 General Disclosures 2021

This chapter responds to the United Nations Sustainable Development Goals (SDGs)

GRI 3 Substantive Issue 2016

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 102025 Environmental Social and Governance Report Strengthening the Core of Governance

Corporate Governance

Governance Structure Board Diversity & Composition

DunAn Environment has established a clear governance structure: Shareholders' Meeting serves as the supreme governing body The company has comprehensively strengthened the construction of the Board of Directors implemented the authority of the Board

while the Board of Directors as the operational decision-making body is accountable to the Shareholders' Meeting. The Board of and ensured that the Board is accountable to the Shareholders' Meeting. In strict accordance with national laws and regulations and the

Directors has established four special committees: Strategy Compensation and Appraisal Nomination and Audit. The management provisions of the Company's“ Articles of Association” the Board effectively supervises the strategic development direction of the

team is responsible for implementing the resolutions of the Board of Directors executing strategies and ensuring the efficient and company controls key risks provides guidance to management and considers and approves major decisions oversees operations and

compliant daily operations of the company. This structure achieves effective separation and coordination of decision-making evaluates company performance.oversight and execution ensuring the effectiveness and quality of corporate governance. The company conducts the selection process and authority management of directors in accordance with laws and regulations

emphasizing the diversity of the Board of Directors. It strives to enrich the representation of Board members in terms of gender

experience qualifications and professional backgrounds providing more comprehensive and professional decision-making for the

Shareholders' Association

company's development. As of the end of the reporting period the company's Board of Directors consists of 9 members including 3

Elections Report independent directors with women accounting for over 20% of the Board members.In addition the Board of Directors has established four special committees: the Strategy Committee the Compensation and Evaluation

Board of Directors Committee the Nomination Committee and the Audit Committee. These committees fulfill their responsibilities of providing

recommendations and oversight. During the reporting period independent reaches or exceeds 60% four committees ensuring the

Establish Report independence and standardization of the Board's operations.Board Committees Indicator Unit 2025 2024 2023

Strategic Committee Total number of board members People 9 9 9

Standard deviation of age of directors supervisors

Audit Committee and senior management Years 6.58 8.44 8.66

Average tenure of board members 2.01

Compensation committee Years 2.12 2.70

Proportion of independent directors % 33.33 33.33 33.33

Nomination Committee

Proportion of independent directors serving as

independent directors in more than 3 listed companies % 0 0 0

Proportion of independent directors on the Strategy Committee % 60 60 60

Guide Report

Proportion of independent directors on the Audit Committee % 67 67 67

Executive Management Proportion of independent directors on the Compensation

and Assessment Committee % 60 60 60

Proportion of Independent Directors on the Nomination Committee % 60 60 60

Following the implementation of the new“ Company Law of the People's Republic of China” regulatory bodies such as the“ China Board Members by GenderSecurities Regulatory Commission (CSRC)” and the“ Shenzhen Stock Exchange (SZSE)” have successively revised multiple regulations

Male People 7 9 9

including the“ Guidelines for Articles of Association of Listed Companies” and the“ Listing Rules of Shenzhen Stock Exchange”

introducing new requirements for listed companies. In 2025 the company proactively aligned with the new regulations to advance Female People 2 0 0

governance optimization. It organized relevant personnel to thoroughly study the provisions of the new regulations reviewed existing Board Members by Professional/Educational Background

systems in light of its own circumstances and governance needs and completed the revision or formulation of multiple systems such as 1(Independent 1(Independent 1(Independent

the Company's“ Articles of Association” and the“ Rules of Procedure for Shareholders' Meetings” ensuring full compliance of governance Industry Expert People Director ) Director ) Director )

documents with regulatory requirements. The company simultaneously promoted the reform of the Supervisory Board integrating the Legal Expert People 1(Independent 1(Independent 1(Independent

Director ) Director ) Director )

functions of the original Supervisory Board into the Audit Committee and adding employee director positions making the governance

Financial Expert 1(Independent People 1(Independent 1(Independent

structure more aligned with the spirit of the new regulations. Director ) Director ) Director )

11 122025 Environmental Social and Governance Report Strengthening the Core of Governance

Board Effectiveness Investor Relations Management

During the reporting period the company held 6 shareholders' meetings and 12 board meetings with all major decisions made in The company places great emphasis on and enhances its investor relations management mechanism. Through various channels such

accordance with the law through these meetings. The attendance rate of all directors at board meetings reached 100% for the reporting as the Interactive Easy platform hotline email fax and joint research the company consistently strengthens regular communication

year. The specialized committees of the board provided professional and objective opinions and suggestions to the company in their and exchanges with investors particularly small and medium-sized investors. It actively listens to their opinions and suggestions

respective fields offering strong support for the company's informed decision-making. regarding the company's production operations and future development fostering a two-way transparent and mutually trusting

positive interaction.Indicators Unit 2025 2024 2023 The company strictly adheres to the principles of fairness impartiality and transparency effectively safeguarding the legitimate rights

and interests of minority investors. It ensures that all shareholders equally enjoy the rights stipulated by laws regulations and the

Board of Directors Performance company's articles of association. All important information related to the company's operations finances and development is based

Board Meetings Held Times 12 7 4 on the officially disclosed content in the company's annual reports and other announcements.Board Member Attendance Rate % 100 100 100

Strategic Committee Meetings and % 100 100 100

Resolution Approval Rate

Audit Committee Meetings and Resolution % 100 100 100 Ethics & Compliance

Approval Rate

Meetings and Proposal Approval Rate of the % 100 100 100

Remuneration and Appraisal Committee

Compliance Management

Meetings and Proposal Approval Rate of the

Nomination Committee % 100 100 100

Governance

DunAn Environment regards compliance as the lifeline of business development strictly adhering to laws and regulations such as the

Compensation and Performance Management

Company Law of the People's Republic of China and the Basic Standards for Enterprise Internal Control as well as regulatory requirements.To ensure the efficient performance of duties by the company's directors and senior management and enhance governance effectiveness The company has established a comprehensive risk management and compliance governance system that is guided by strategic

the company has established a performance-oriented compensation management system for directors and senior management aimed

objectives covers all business areas features clear responsibilities and authorities and operates effectively.at driving the achievement of strategic objectives through incentive alignment.The company formulates annual compensation plans for directors and senior management. Independent directors receive a fixed allowance To enhance the systematic and professional nature of risk management the company has established a "Risk Management Center"

system (CNY 120000 per year per person) aligned with their supervisory responsibilities; non-independent directors serving in the composed of three major departments: the Securities Investment Department the Internal Control Department and the Legal Affairs

company do not receive additional allowances and their compensation is linked to the performance of their management positions; Department. Through cross-departmental collaboration the center forms a synergistic force to strengthen internal defenses for the

senior management adopts a compensation structure strongly tied to performance with target annual salaries designed at a company's stable operations and build a risk prevention and control network covering the entire business process.fixed-to-variable ratio of 3:7 where 70% of the variable portion is directly linked to performance results and may receive excess profit

rewards in accordance with the "Excess Target Incentive Management Regulations." Composition of the Risk Management Center

Information Disclosure Securities Investment Department: Oversees investment activities and monitors risks related to information disclosure.The company has established the "Information Disclosure Management System" in accordance with relevant laws and regulations and

the Shenzhen Stock Exchange's requirements for information disclosure by listed companies thereby building a standardized information Internal Control Department: Responsible for the establishment and supervision of the internal control system.disclosure framework. It earnestly fulfills its information disclosure obligations to ensure that the disclosed information is truthful

accurate and complete safeguarding the right of shareholders and creditors to be informed about the company's production Legal Department: Responsible for the prevention and handling of legal compliance risks.operations and significant matters.During the reporting period in compliance with the requirements of laws and regulations such as the "Company Law of the People's

Republic of China" the "Securities Law of the People's Republic of China" and the "Administrative Measures for Information Disclosure of

Listed Companies" as well as the company's "Articles of Association" and the "Information Disclosure Management System" the company

strictly fulfilled its information disclosure obligations. A total of 153 announcement documents were disclosed through the "Securities

Times" "Securities Daily" and the CNINFO website.

13 142025 Environmental Social and Governance Report Strengthening the Core of Governance

Strategy Regularly Conduct Integrity Warning Education

The company focuses on compliance and sound operations s preventing major risks and enhancing governance effectiveness as its core The company continuously promotes the construction of a compliance culture fostering an environment where "everyone emphasizes

strategic direction. It deeply embeds compliance management into the entire business process ensuring the company's sustained and compliance and every matter follows the rules." The company provides multi-level and multi-form compliance training for new employees site

healthy operations through systematic development professional risk prevention and regular cultural advocacy. This safeguards the staff and management. Through corporate WeChat case studies compliance-related cases are shared to comprehensively enhance

legitimate rights and interests of investors customers and stakeholders providing a solid foundation for high- quality and sustainable employees' compliance awareness and risk prevention capabilities. Additionally the company has established an efficient legal

development. consultation response mechanism. During the reporting period it provided employees with over 100 legal consultations promptly

addressing practical issues.Impact Risk and Opportunity Management

Through a systematic risk management framework the company effectively identifies and mitigates various risks related to operations Cases Conduct regular integrity warning education to strengthen the compliance defense line

legal compliance and integrity while actively transforming its compliance capabilities into competitive advantages and industry

influence. The company has established and continuously operates a Risk Management responsibility system centered on the "Three In April July and October 2025 the company disseminated integrity case studies via the

Lines of Defense" ensuring that risk management is implemented at every level and forms a end-to-end risk management. corporate WeChat platform covering typical scenarios such as theft of company property

fraudulent expense reporting and embezzlement. By reconstructing the process of

misconduct analyzing root causes and detailing disciplinary consequences these cases

vividly highlighted integrity risks in daily operations. They emphasized to all employees the

Lines of Defense Entities Responsibilities necessity of adhering to financial regulations and integrity guidelines encouraging staff to

learn from these cases consciously resist corrupt practices and continuously reinforce the

ideological foundation for corporate governance and compliant operations.Business departments serving as the first line of defense in the company's

First Line Business risk management are responsible for identifying assessing and

of Defense Departments addressing risks in daily operations. They implement corresponding

measures to manage and control identified risks ensuring the compliance Strengthen Trade Compliance

of business processes. The company actively practices trade compliance. In 2025 through deep participation in AEO Advanced Certification practices it shared

AEO certification management experience with the industry driving regional corporate compliance standards upward with benchmark

practices.As the second line of defense functional departments are responsible

for assessing and monitoring various risks promptly identifying new

Second Line Functional Cases Deepening AEO Compliance Practices Empowering Trade Compliance Through Industry Sharingrisks; establishing and improving risk management systems and

of Defense Departments processes to promote the standardization and normalization of risk

management work; and providing professional support to business The company strictly implements the "Customs Advanced Certification Enterprise Standards"

departments and organizing relevant training. and is an enterprise in the Shaoxing region with two AEO Advanced Certifications (DunAn

Hetian DunAn International Trade). During the certification period the company established an

"AEO Standards Interpretation" team deeply integrating certification requirements into

As the third line of defense the Internal Control Department inde- business processes to achieve a unified management system. This effectively addressed

pendently and objectively reviews and evaluates the company's issues such as the disconnect between certification standards and the management

overall risk management and compliance status. It is responsible for system as well as difficulties in integrating and implementing documents. The team developed

Third Line Internal Control monitoring auditing and inspecting whether all business activities a special lecture titled "The Role of AEO Standards Interpretation in AEO Certification

of Defense comply with laws regulations and internal systems; identifying Departments Management" which received high recognition and praise from Hangzhou Customs. As of

potential risks and proposing improvement suggestions to ensure December 2025 the company conducted sharing sessions in Hangzhou Shaoxing Taizhou

timely resolution; continuously improving the anti-corruption and Wenzhou and other locations covering over 100 enterprises. By sharing experience it

anti-bribery management system to ensure the ongoing effectiveness helped enhance industry compliance and received a letter of appreciation from Hangzhou

of risk management and compliance development. Customs demonstrating the company's exemplary commitment to trade compliance and

social contribution.

15 162025 Environmental Social and Governance Report Strengthening the Core of Governance

Metrics and Targets

The company conducts audit and supervision work continuously strengthening internal control and risk management. In 2025 the company Cases Anti-Corruption and Integrity-Building Specialized Training

organized and carried out 4 comprehensive operational audits Conducted 1 mid-term economic responsibility audit and 1 departure

economic responsibility audit for senior management. and completed 16 special audits focusing on key areas such as entertainment

In September 2025 the company organized a special anti-corruption and integrity training session with the theme "Follow

expenses procurement and quality management. Additionally 5 investigation reports were issued and the annual internal control evaluation

Rules Strictly Discipline Oneself; Know Reverence Uphold the Bottom Line." The training combined typical cases of

report was released on schedule. The compliance culture and risk prevention and control measures have been effectively implemented

power- related corruption within the company in recent years deeply analyzed the root causes and harms of corrupt

with no major compliance or integrity risk incidents occurring leading to continuous improvement in compliance governance levels.behavior and facilitated interactive discussions on topics such as power supervision mechanisms and integrity risk

prevention in positions. It guided employees to build a strong integrity defense line from the depths of their minds. Company

Integrity Building leaders personally attended the training to provide guidance further enhancing the authority and effectiveness of the session.Governance

DunAn Environment adheres to integrity in its operations and is committed to building a clean and transparent business environment. Guided

by the "DunAn Corporate Charter" the company has established a five-in-one integrity prevention and control mechanismencompassing

integrity commitments self-inspection and self-correction rotation of key positions thematic training and reporting supervision. It clearly

defines the integrity responsibilities of senior management middle-level cadres and employees in key positions (such as procurement

infrastructure finance and capital management) implements integrity commitments for all employees and encourages family members to

assist in supervision. The company ensures multi-dimensional reporting channels establishes standardized processes for acceptance verification

feedback confidentiality and rewards forming a closed-loop management system.Strategy Reporting Channels and Whistleblower Protection

The company regards integrity compliance and transparent operations as core strategies for sustainable development. With the goals of To fully leverage the supervisory role of employees and relevant stakeholders protect the legitimate rights and interests of whistleblowers

strengthening integrity risk prevention and fostering a clean and upright atmosphere the company continuously enhances anti-corruption and encourage all employees especially management personnel to fulfill their duties diligently and foster an atmosphere of "fairness

anti-bribery management. Through institutional constraints cultural influence and supervision safeguards it integrates integrity principles into all justice and integrity " within the company the company actively facilitates various reporting channels. In addition to traditional reporting

operational processes safeguards the legitimate rights and interests of the company shareholderscustomers and stakeholders and ensures the channels such as telephone email and physical complaint boxes the company has also established a digital integrity complaint platform

long-term stable development of the enterprise. accessible via corporate WeChat or by scanning a QR code for reporting.Impact Risk and Opportunity Management DunAn

The company has effectively prevented and controlled major risks such as commercial bribery corruption and improper benefit transfers Whistleblowing Reporting Hotline：13858409929 Report Email: nkb@dunan.cn Report QR Code:

through systematic integrity-building efforts thereby enhancing its compliance image and market trust. Channels

The company organized all employees to sign the "Integrity Commitment Letter"conducted integrity self-inspections and self-corrections and

implemented job rotations for key positions. It provided specialized training on anti-bribery and anti-monopoly for new employees and key

personnel with over 10000 participants covering all senior management and empowering compliance professionals. The company

established accessible online and offline reporting channels strengthened whistleblower protection and reward mechanisms and

comprehensively reinforced integrity risk prevention and control.

17 182025 Environmental Social and Governance Report Strengthening the Core of Governance

Indicators and Targets

Indicator Unit 2025 2024 2023

Indicator Unit 2025 2024 2023 Amount Involved in Litigation or Significant Administrative Yuan 0 0 0

Penalties Due to Unfair Competition Practices

Total number of senior management personnel covered by anti-com-

mercial bribery and anti-corruption training People 50 50 43

Percentage of senior management personnel covered by

anti-commercial bribery and anti-corruption training % 100 100 100

Total number of employees covered by anti-commercial

bribery and anti-corruption training People 12581 13735 11872

Percentage of employees covered by anti-commercial

% 98.90 98.66 100.00 ESG Managementbribery and anti-corruption training

Total number of commercial bribery Number

and corruption incidents 2 2 1of cases Governance

Disciplinary actions for commercial bribery

and corruption incidents People 3 3 1

DunAn Environment places high importance on sustainable development and actively manages the environmental and social impacts of

its manufacturing and operational activities. We are committed to becoming "experts in providing healthy and comfortable environmental

system solutions in the refrigeration and air conditioning field" and integrate the concept of sustainable development into the company's

Anti-Unfair Competition strategy daily management and operations to achieve long-term value. The company has established a three-tier sustainable development

DunAn Environment consistently adheres to the core principles of integrity transparency and fair competition strictly complies with management and governance structure: "Board of Directors ? Sustainability Committee ? Functional Departments" clarifying ESG

laws and regulations such as the Anti-Unfair Competition Law of the People's Republic of China and is committed to maintaining a responsibilities at each level. This approach promotes ESG governance in a more scientific professional and systematic manner

healthy and orderly market environment. In practice the company ensures that all marketing and sales activities are truthful and accurate supporting the company's high-quality and stable development.prohibits any false or exaggerated advertising and establishes a rigorous review mechanism for promotional materials to ensure full

compliance.The company actively advocates for healthy competition respects industry peers and competitors and resolutely opposes any behavior The Board of Directors is responsible for supervising

the company's sustainable development efforts

that disrupts market order. At the same time the company places great emphasis on intellectual property protection respecting the Decision-making Board of Directors Guiding strategy overseeing review. including formulating relevant policies and procedures

legitimate rights of others while strictly safeguarding its own intellectual property and prohibiting any unauthorized use. Level and conducting annual performance evaluations for

To ensure the effective implementation of these requirements the company regularly conducts systematic internal compliance assessments of sustainable development.marketing and market activities ensuring that all processes adhere to anti-unfair competition management standards and holds any

violations strictly accountable.The Sustainability Committee is responsible for

Cases Anti-Unfair Competition Awareness Campaign Strategy formulation formulating the company's sustainability strategy and

Management Sustainability and organizational

Committee objectives implementing strategic decisions from the coordination. decision-making level promoting the execution of

In February 2025 the company organized a promotional activity on anti-unfair competition.ESG-related matters and regularly reviewing the progress

The event provided employees with a thematic presentation covering six key aspects: of ESG-related goals.an overview of unfair competition its types its importance relevant laws and regulations

the supervision and enforcement of anti-unfair competition measures and corporate

strategies for addressing unfair competition. This initiative aims to promote market Functional Collaborative Each functional department is responsible for Executi on

Level Departments Promotion and undertaking ESG-related resolutions participating in entities' awareness and compliance with the law encourage lawful business operations Implementation. ESG practices and promoting the implementation of

and effectively safeguard the order of market competition. relevant initiatives.

19 202025 Environmental Social and Governance Report Strengthening the Core of Governance

Sustainable Development Strategy Strategic Strategic 2030 Goals and Targets Progress inPositionin g Initiatives 2025

DunAn Environment has established a sustainability strategy centered on fostering safe healthy and comfortable living environments.

2030: Achieve peak greenhouse gas emissions (Scope 1 Scope 2)

Anchored by a strong governance framework the Company advances its sustainability agenda through two key pillars: sustainable In Progress

Climate Action: with a 10% reduction compared to the 2021 baseline year

development and responsible operations.By developing a comprehensive approach encompassing climate action circular economy Supporting China’s

practices environmental protection and ecosystem stewardship DunAn is building a resilient and sustainable business model. This “Dual Carbon”

Goals 2030: Develop green products to contribute to emission reductions enables the Company to deliver responsible value across products employees supply chain and society.At the same time DunAn across the value chain with green products accounting for 40% of In Progress

actively aligns with the United Nations Sustainable Development Goals (SDGs) contributing to China’s carbon peaking and carbon Environmental total revenue

neutrality ambitions and supporting global efforts toward sustainable development. Sustainability:

Leading the Creation Circular Economy: 2030: Annual Water Resource Recycling Rate Not Less Than 90% Achieved

of a Healthy Pioneering a Circular

Environment Model 2030: Innovating End-of-Life Product Recycling Models In Progress

Environmental Dun ? Environmental

Circular Dun ? Circular Economy Initiatives Protection Practices through

Nature-Friendly Environmental 2030: Continuously Maintain Zero Incidents of Environmental In Progress

Protection: Setting a Pollution and Chemical LeaksPractices

Model for Environmental

Safety 2030: Continuously advance the creation of green factories 1 achieved

y as

Climate Dun-Climate Protection abilit On ui r Sh Ecological Dun ? Biodiversity

sta ie Protection

Biodiversity and

Ecology: Embracing a 2030: Integrate ecological concepts into product development to In Progress

Nature-Friendly Future create nature- friendly products

2030: Reduce the rate of non- conforming products in use by 50%

Strengthening the Core Product Responsibility:

In Progress

compared to the 2021 baseline

of Governance Becoming the Trusted

Choice for Customers 2030: Annual Customer Satisfaction ≥92 Points Achieved

2030: Maintain zero major work safety accidents with annual

Employee Well being: In Progresswork-related injuries ≤ 45 cases

Responsible A Secure and Fulfilling

Operations: Achieving Career for Our People 2030: Employee satisfaction ≥ 90% In Progress

Diverse Value

Creation through 2030: Sign contracts containing environmental labor and In Progress

Shared Social Responsible Supply human rights requirements reaching 80%

Prosperity Chain: Building a 2030: Suppliers undergoing environmental and social

Quality Sustainable Value contribution on-site audits ≥90%

In Progress

o c Communitynsi An Chain 2030: Empower Supplier ESG Performance Conduct at Least 5 bil ur In Progressity as O Relevant Training Sessions Annually

Social Contribution:

Employee Safety Sustainable Supply Chain Engaging with Communi- 2030: Local employee hiring ratio reaches 90% In Progress

ties for Shared Growth

Strengthe ning the Corporate 2030: Continue to advance the diversification of the board Governance: of directors increasing the proportion of female directors Achieved

Core of Governanc e Unleashing Momentum

Laying a Solid Through Sustainable 2030: Continue to promote the integration of sustainable In Progress

Foundatio n for Integration development and corporate governance

Building on this foundation the Company has set its 2030 sustainability goals. In 2025 we deepened implementation by assigning clear Sustainabl e and Business Ethics 2030: Zero tolerance for corruption and bribery incidents In Progress

Steady Developm ent maintaining zero occurrences of related events

responsibilities and conducting regular progress reviews ensuring steady execution of our roadmap. Through these efforts the Company Responsible

Through Integrity in Operations

contributes to the UN SDGs supports China’s“ Dual Carbon” goals and advances global sustainable governance. 2030: Eliminate business ethics violations (including unfair Trustworthy In ProgressOperations competition conflicts of interest money laundering fraud)

2122

Su

hor

ld

Res

p2025 Environmental Social and Governance Report Strengthening the Core of Governance

Stakeholder Engagement Material Assessment

DunAn Environment actively expands communication channels with stakeholders across all aspects of its daily operations and services. DunAn Environment identifies Materiality Assessments based on standard benchmarking trend analysis and policy requirements and

By establishing regular communication mechanisms and conducting multi-channel multi-form communication activities the company combines key points from offline departmental interviews to form the 2025 ESG Materiality Assessments list. This ensures that the selection of

fully understands the expectations and demands of stakeholders actively responds to their concerns and builds harmonious and stable issues not only complies with standards but also reflects industry representation and policy foresight while taking into account the

stakeholder relationships. company's unique characteristics. In 2025 we identified 33 potential Materiality Assessments and conducted a dual materiality assessment

using a questionnaire evaluation method. Questionnaires on impact materiality and financial materiality were distributed and quantitative

Stakeholders Communication and EngagementMethods Focus Issues analysis and qualitative judgment were employed to ensure the scientific rigor of the assessment.Corporate Governance

ESG and Sustainable Risk Management

Government-Enterprise Communication and

Government and Compliance and Risk Management、Anti-Corruption

Based on standard benchmarking trend analysis and

Reporting Anti-Unfair Competition、Tax Integrity policy requirements Materiality Assessments were Regulatory Agencies

Compliance Information Disclosure Environmental Compliance Management Step1 Identification of Materiality Assessments identified. Combined with key responses from offline

Ecosystem and Biodiversity Conservation interviews 33 potential Materiality Assessments were

Public Welfare and Charity、Rural Revitalization identified forming a Materiality Assessments database.Supporting Industrial Development

Corporate Governance

Regular Announcements ESG and Sustainable Risk Management Conducted offline interview research and structured

Earnings Report Meetings Innovation-Driven、Intellectual Property Protection questionnaire surveys divided into impact importance

Shareholders and Other Daily Communication、Questionnaire Intelligent and Digital Transformation assessment and financial importance assessment

Investors Step2 Questionnaire SurveyTimely telephone communication Green Product Design and Development receiving 197 valid impact importance questionnaires

Investor meetings、Earnings conference calls Product Quality and Safety and 14 valid financial importance questionnaires

Shareholders' Meeting、Questionnaire Driving Industry Development respectively.Sustainable Supply Chain

Green Product Design and Development

Energy Efficiency and Renewable Energy Based on interview research data analysis group

Social Media Innovation-Driven、Product Quality and Safety discussions and expert evaluations highly important

Customer Satisfaction Survey Customer Satisfaction Step3 Evaluation and Analysis

Customers issues moderately important issues and generally

Customer Complaints Data Security and Customer Privacy Protection important issues were identified.Questionnaire Supporting Industry Development

Sustainable Supply Chain

Sustainable Supply Chain

Regular Communication and Exchange

Suppliers and Equal Treatment for Small and Medium-sized EnterprisesSuppliers and Partners Official Website

Partners Supporting Industrial Development Dual Materiality Issues MatrixQuestionnaire

Innovation-Driven、Product Quality and Safety In 2025 DunAn Environment conducted a materiality assessment based on the dual dimensions of impact significance and financial

Workers' Congress、Employee Training Compliant Employment and Rights Protection significance. Through questionnaire surveys data analysis and comprehensive evaluation the company systematically identified and

Employees and Employee Activities、Social Media Compensation Benefits and Care prioritized various issues. The assessment results show that the company identified a total of 14 highly important issues 15 moderately

Other Workers Company Intranet、Employee Satisfaction Occupational Health and Safety important issues and 4 generally important issues. Overall materiality issues exhibit a distribution pattern of gradually clustering from

Survey、Survey Questionnaire Training and Development

generally important to highly important reflecting the company’s increasing significance in key areas such as governance compliance

Company Website product responsibility and operational management.Industry Supporting Industrial Development

Industry Communication and Exchange

Associations Intellectual Property Protection

Survey Questionnaire

23 242025 Environmental Social and Governance Report Strengthening the Core of Governance

Double Materiality Matrix Materiality Matrix Characteristic Analysis

There are 15 issues located in the moderately important range primarily in the

4.10 environmental and social dimensions. Among these environmental issues such as

chemicals and hazardous substances and environmental compliance management

generally have higher impact importance requiring strengthened risk management.Moderately The issue of green product design and R&D holds higher financial importance

4.00

Tax Compliance and Integrity Important Issues indicating that the company's potential for transforming sustainable business can be

(15) further explored. Social issues focus on employee growth and industrial collaboration

Customer Satisfaction Product Quality & Safety

Anti-corruption such as training and development global operations and localization and supporting

Chemicals and Hazardous ESmubissstiaonncse &s Discharges

Data Security and Customer Privacy industrial development.Their relatively high dual importance suggests that investment in

3.90 Waste Management

Compliance and… these areas can directly enhance organizational capabilities and the resilience of the

Occupational Health & Safety (OHS) Corporate GovernanIncneovation & Technology

Intellectual… industrial chain.Employment Compliance & Labor

ESG & Sustainability Risk Management Rights

Environmental Compliance

3.80

management Fair Competition Compensation & Benefits

Water Management Sustainable Product Design & Stakeholder Engagement

Development Digital…

Equal Treatment of SMEs Global Operations & Localization

3.70 Energy Efficiency & Renewable Energy Sustainable Supply Chain There are 4 issues located in the Generally important range with relatively low overall

Circular economy Industry Development Training & Education importance. This indicates that at the current stage these issues have a weaker direct

Generally

Ecosystem and biodiversity protection impact on the company's operations and short-term financial relevance reflecting more

Community Investment Important Issues

the company's social contribution and long-term sustainable development philosophy.Climate Action (4)3.60

Rural Revitalization The company should maintain appropriate attention to them ensuring the fulfillment of

related responsibilities while steadily developing its core business.

3.50

3.003.203.403.603.804.004.204.404.60

Financial Materiality

Materiality Matrix Characteristic Analysis

There are 14 issues located in the highly material quadrant exhibiting characteristics

oriented towards governance and product responsibility. Among these tax integrity

product quality and safety and data security and customer privacy protection have

Highly Materiality high negative impact materiality necessitating continuous enhancement of risk

Assessments management. Innovation- driven positive impact materiality is also high allowing for

(14) further alignment with the company's positioning to explore innovative practical

measures centered on green products and clean technologies. Additionally issues

such as employee occupational health and safety compliant employment and rights

protection are also ranked within this quadrant reflecting the company's commitment to

safeguarding fundamental rights and interests through stable operations.

2526

Impact MaterialityThe GRI STANDARDS

Environmental Sustainability ?GRI 301 Materials 2016

Leading the Creation of a Healthy Environment ?GRI 302 Energy 2016

through Nature-Friendly Principles

?GRI 303 Water and Effluents 2018

This chapter responds to the United Nations Sustainable Development Goals (SDGs) ?GRI 304 Biodiversity 2024

?GRI 305 Emissions 2016

?GRI 306 Waste 2020

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

27 282025 Environmental Social and Governance Report Environmental Sustainability

Climate Action

The company comprehensively considers industry attributes value chain distribution and national macro policies selecting the

SSP5-8.5 scenario provided by the Intergovernmental Panel on Climate Change (IPCC) for physical risk analysis and the Stated Policies Risk Category Negative Impact Response Measures

Scenario (STEPS) provided by the International Energy Agency (IEA) for transition risk and opportunity analysis to provide decision

Acute Physical Risks (Short-term)

support for addressing climate change and enhancing development resilience.The company conducted a comprehensive analysis of potential physical risks transition risks and opportunities. Among these physical

nsive assessment and monitoring of

risks are categorized into acute and chronic risks which may negatively impact the company's production operations logistics Scarcity of freshwater resources leads to shortages Comprehe

transportation and inventory management. Simultaneously we analyzed transition risks from four perspectives: policy and regulation in key process water disruptin

g production water usage risks improving emergency response

continuity mechanisms

technology market and reputation delving into the impact of various transition risks on the company and proposing targeted Drought

response measures based on the nature of the risks and the company's specific circumstances. Regarding transition opportunities we Increased financial costs for purchasing raw water Each base actively promotes water-saving and

exacerbating financial pressure reuse projects enhancing water resource recycling

analyzed them from three dimensions: energy layout technological innovation and green investment exploring the positive impacts

efficiency

of different opportunities on the company.The following are the physical and transition risks identified by the company that require focused attention:

Flooding causes damage to raw materials Improve flood emergency plans stockpile flood

equipment and production lines due to water

Physical Risks pre vention and emergenc y suppl ies and immersion significantly increasing repair and strengthen waterproof protection for critical

Flood replacement costs.Risk Category Negative Impact Response Measures equipment

Floods damage transportation infrastructure

Building a diversified supply chain system to

Acute Physical Risks (Short-term) severely hindering the supply of raw materials ensure stable supply of raw materials

and the transportation of finished products.Insufficient power supply stability leads to

interruptions in production and operations Conduct temperature prediction assessments

exacerbating fluctuations in enterprise capacity and establ ish production and emergenc y

utilization. response mechanisms

by extreme Implement reasonable shift

scheduling and Establish a comprehensive typhoon warning and

Occupational health risks caused

High te supply of heatstroke prevention

high-temperature weather have significantly

ensure adequa Damage to infrastructure such as factory build- emergency response mechanism regularly

Temperat ure organize safety evacuation drills for employees

increased resulting in decreased labor productivity

materials ings equipment and warehouses affecting pro-

and enhance the overall emergency response

and a rise in workplace accident rates. Enhance fire safety measures and strengthen duction operationsTyphoon capability of all personnel.fire inspections during high- temperature periods

Inadequate firefighting infrastructure leads to Increased investment in disaster prevention

insufficient emergency response capabilities for Improve emergency response plans conduct relief and resumption of production resources

For factory buildings and key production equipment

sudden incidents such as fires increasing the risk emergency drills and enhance risk management driving up operational costs

the company has implemented reinforcement

effectiveness and protective measures to ensure they can of property damage withstand strong wind impacts.Extreme low temperatures lead to decreased Develop emergency plans for extreme cold to

stability in material storage affecting production enhance risk response effectiveness

continuity.Extreme Cold Based on weather forecasts stockpile materials in Cold waves cause transportation disruptions

advance to prevent supply disruptions

resulting in supply chain and logistics blockages.Low temperatures cause infrastructure damage Prepare backup production facilities to ensure

such as frozen and burst water pipes steam supply during extreme cold conditions

29 302025 Environmental Social and Governance Report Environmental Sustainability

Physical Risks Transition Risk

Risk Category Negative Impact Response Measures Risk Category Risk Description Impact Cycle Response Measures

Chronic Physical Risks (Medium-term Long-term) With the continuous tightening of refrigerant

controls both domestically and internationally

During design and selection prioritize materials and the accelerated phase-out of high GWP Closely follow refrigerant replacement policies

with excellent high-temperature resistance and working fluids the company's exist ing and accelerate the research development

anti-aging properties to extend equipment lifespan

Continuous temperature rise accelerates the compatible products face the risk of market

and iteration of components compatible with

aging of mechanical equipment and electronic Use sensors to monitor equipment temperature restrictions.low GWP and natural working fluids.and operating status in real time promptly identify Policies and Medium- termcomponents shortening the lifespan of temperature

Temperature Energy efficiency standards in the air conditioning

Comprehensively advance product energy

control devices. and address abnormalities to prevent fault Regulations long-termheat pump and automotive thermal management efficiency upgrades proactively complete Rising escalation green energy-saving and low-carbon certifi-

Increased operational load on air conditioning and sectors are continuously being upgraded

cations and meet compliance requirements

cooling equipment drives up energy consumption Introduce intelligent control technology to with green and low-carbon certifications

for domestic and international customers as

and operating costs. automatically adjust temperature and operating becoming entry thresholds. Failure to meet

modes based on actual needs avoiding energy these standards will directly impact orders well as government procurement.waste and market share.Strengthen technological research development

Install industrial dehumidification equipment Core technologies such as magnetic levitation and innovation with a focus on breakthroughs

optimize ventilation systems to ensure good and transcritical CO? heat pumps face the risk in areas such as thermal management and

airflow in production areas maintain relative of lagging behind in technological iterations. In Short-term low-carbon refrigerant components

humidity within an appropriate range and prevent Technology the field of new energy thermal management medium- term Implement the "Technology Patent Pool +

Excessive moisture absorption in raw materials raw materials and products from becoming emerging technologies (such as solid-state long-term Scenario-based Application" strategy building

affects product quality and yield during processing. damp. battery thermal control) may replace existing

Humidity technological barriers through licensed

Increased humidity accelerates oxidation and ones leading to a decline in market competi-Increase Apply surface protection treatments such as patents to achieve rapid technology deployment

corrosion of metal components raising mainte- tiveness.coating metal components with anti-rust oil for in scenarios such as data centers and rail transit.nance costs and frequency. rust prevention

Regular maintenance inspections establishing a

schedule for periodic checks and upkeep Increase the proportion of green electricity

promptly identifying and addressing signs of procurement appropriately based on market

corrosion to extend equipment service life.Customers tend to choose companies that can conditions install renewable power facilities

provide low- carbon products. Failure to effectively such as photovoltaic systems and enhance

Increased particulate matter may introduce address customer concerns may lead to a loss investment in renewable energy.impurities into critical processes leading to a of market share. Medium- term C o n t i n u o u s l y m o n i to r c h a n ge s i n t h e

rise in product defect rates and affecting quality Real-time air quality monitoring and the introduction Market Risk of Raw Material Price Fluctuations: The upstream raw materials market establish a

and performance. of high-efficiency air purification technologies

long-term

company's products rely heavily on key minerals regular resource scarcity assessment mechanism Particulate ensure that workshop air quality meets or even

Matter To maintain workshop purification standards such as copper and silver. Fluctuations in their

strengthen the research and development of

exceeds industry standards.Increase the operation of air purification systems has supply and prices will directly impact the

new materials and technologies and build

Rational planning of workshop layout and company's production costs. technical reserves to enhance supply chain been intensified resulting in increased energy resilience and hedge against price volatility

consumption and higher equipment mainte- production processes risks.nance frequency.

31 322025 Environmental Social and Governance Report Environmental Sustainability

Risk Category Risk Description Impact Cycle Response Measures Indicators Unit 2025 2024 2023

Stakeholders including the public and inves- Monitor regulatory requirements disclose

Scope 1 tCO?e 16164.76 17449.77 16152.22

tors are placing increasing expectations on relevant information in a timely manner and

the Company to reduce its carbon footprint maintain effective communication with

Scope 2 tCO?e 52684.37 51263.15 41090.18

and advance sustainable practices. Failure to Medium- term stakeholders.Reputation

respond effectively to these expectations long-term Regularly publish ESG reports to showcase Total Emissions tCO?e 68849.13 68712.93 57242.40

could erode stakeholder trust and adversely the company's specific practices and progress

affect the Company’s financial performance in environmental protection and social

and long-term value. contribution

Energy Transition

To implement national energy conservation and emission reduction policies and enhance the company's energy management an

energy management working group led by members of the president's team has been established. Each year energy- saving plans are

Transformation Opportunities formulated and the operational status is supervised inspected and assessed. The group also participates in internal system audits

and reviews and ensures the implementation of corrective and preventive measures. Currently subsidiaries including DunAn Hetian

Wuhu Zhongyuan Zhuhai Huayu and DunAn Electro-Mechanical have obtained national standard GB/T23331 energy management

Energy Layout system certification.Leveraging distributed photovoltaic and energy storage as entry points and integrating technolo-

gies such as industrial waste heat recovery and biomass energy utilization we are building a

multi-energy complementary distributed energy network. Relying on our equipment advantages

in specialized environmental fields such as nuclear power rail transit and data centers we are

deploying zero-carbon energy bases to promote the local consumption of green electricity in

high-energy-consuming scenarios.Technological Innovatio

n

Upgrade refrigeration technology deepen expertise in microchannel heat exchange and

intelligent control algorithms research and develop high-efficiency low-carbon refrigerants and

transcritical heat pump systems leading the iteration of industry energy efficiency standards.Simultaneously collaborate with universities and research institutions to tackle low-carbon

technology challenges promote the transformation of scientific and technological achievements

into industrial applications and strengthen patent layout and influence in standard-setting.Advancing Energy-Saving Technological Upgrades

In 2025 the company focused on energy conservation safety and environmental protection goals actively promoting energy-saving

Green Investment technological upgrades. Key efforts included optimizing the entire compressed air system process—reducing energy consumption by

Leveraging the foundation in the refrigeration industry and advantages in new energy technology optimizing the configuration and operation of equipment such as air compressors; upgrading pipeline systems to minimize resistance

with the synergistic logic of "technology-scenario-capital" as the core deepen the layout of green and leakage; implementing precise pressure control and advancing intelligent upgrades to enhance efficiency. Additionally noise

investments forming a development pattern of "radiating nationwide from the core Yangtze River reduction ventilation and fire protection measures were carried out to improve the environment and safety laying the foundation for

Delta region and building a moat through technological barriers."

green safe and efficient development.

33 342025 Environmental Social and Governance Report Environmental Sustainability

Energy-Saving Technological Key Initiatives and Performance Indicator Unit 2025 2024 2023

Upgrade Projects

Basic Information on Energy Usage

Introduced four 8m3/min high-efficiency screw-piston

integrated machines to replace thirty-six 1m3/min Total Energy Consumption tce 27987.45 27932.08 23269.27

low-efficiency piston air compressors optimizing the

operational efficiency of the compressed air system. By Among which: By energy type

reducing the number of units and enhancing the energy

DunAn Hetian · High-Pressure Air efficiency of individual machines the project significantly Coal Tonnes 0 0 0

Compressor Improvement Project lowered system energy consumption and operational

maintenance costs thereby improving overall energy Gasoline Liters 0 0 0

utilization efficiency.Performance: Energy consumption decreased by 20% Diesel Liters 286904 43940 237331

achieving annual electricity savings of 91200 kWh and

reducing CO? emissions by 11.2 tonnes per year. Natural Gas m3 4139705 4735157 4218085

liquefied petroleum gas m3 177251 184149 165170

Establish a comprehensive energy management system Non-renewable electricity procurement volume

to achieve refined energy consumption control and kWh 17425.88 16955.80 13590.99

abnormal condition prediction through automatic

Renewable electricity procurement volume

adjustment of compressed air pressure. Simultaneously kWh 0 0 0

systematically optimize the air compressor room and

Wuhu Zhongyuan · Pipeline System pipeline network by adjusting pipeline layouts switching Renewable electricity proportion % 0 0 0

Improvement Project to large-radius pipe fittings expanding the diameter of

main pipelines and using leak detectors to conduct leakage Direct Energy Consumption tce 6571.04 7093.40 6565.94

inspections. Establish a ledger for closed-loop rectification to

comprehensively enhance energy utilization efficiency. Total Indirect Energy Consumption tce 21416.41 20838.68 16703.32

Performance: Achieved annual electricity savings of

258700 kWh reducing CO? emissions by 31.79 tonnes Energy Use Intensity tce/unit 0.033 0.032 0.030

per year.Optimizing Energy Structure

By conducting research and replacing the original

refrigerated dryer and adsorption dryer with an ener- The company focuses on optimizing the energy structure through energy storage systems and photovoltaic expansion. By leveraging

gy-efficient refrigerated dryer the energy consumption energy storage to achieve peak shaving and valley filling it enhances energy efficiency. Simultaneously it expands distributed photovoltaic

of post- processing equipment was reduced; the layout installations to increase the proportion of self-generated and self-consumed green electricity reducing reliance on high-carbon power.of the air supply pipeline was optimized lowering the These actions concretely support the "dual carbon" goals and sustainable development strategy. In 2025 the company deployed a

Zhuhai Huayu · Air Compressor station pressure drop from 0.09 MPa to within 0.05 MPa; 3MW/6MWh battery energy storage project at DunAn Hetian and building on the existing distributed photovoltaic installations across its

Station Improvement Project simultaneously the ventilation conditions of the station

were improved and the operating parameters of the air manufacturing bases continued to explore application potential by adding 1.062MW of distributed photovoltaics.compressor were optimized further enhancing equip-

ment operational efficiency.Performance: Annual electricity savings of approximately

400000 kWh reducing CO? emissions by 121 tonnes per

year.

35 362025 Environmental Social and Governance Report Environmental Sustainability

Cases DunAn Hetian · Battery Energy Storage Project

Indicators Unit 2025 2024 2023

In July 2025 the DunAn Hetian Battery Energy Storage Project was officially launched

and put into operation with an installed capacity of 3MW/6MWh. The annual peak load Clean Energy Usage

shifting capacity of the energy storage system is 14.5MWh reducing peak electricity Total Clean Energy Consumption MWh 12953.92 11995.00 11797.55

demand by 2600kW. By deploying the energy storage system peak shaving and valley

Proportion of Total Installed Clean

filling are achieved smoothing the peak-valley difference in energy consumption at the Energy Capacity % 100 100 100

plant site enhancing grid stability and energy utilization efficiency and reducing

Among which: By energy type

reliance on high-carbon electricity during peak loads.Photovoltaic power generation 10000 kWh 1295.39 1199.50 1179.76

Proportion of photovoltaic power generation

Cases DunAn Metals (Thailand) · DunAn Vehicle Thermal Management · Wuhu Zhongyuan · Increased Photovoltaic Installation Capacity % 6.92 6.61 7.99

Natural Gas m3 4139705 4735157 4218085

In January 2025 DunAn Metals (Thailand)'s new photovoltaic power generation project

was officially put into operation with an installed capacity of 0.851 MW reducing Natural Gas Ratio % 19.67 22.55 24.11

annual carbon dioxide emissions by 320 tonnes.In July 2025 DunAn Vehicle Thermal Management established a new photovoltaic Wind Energy MWh 0 0 0

power generation project with an installed capacity of 0.762 MW reducing annual Wind energy proportion % 0 0 0

carbon dioxide emissions by 248 tonnes.In December 2025 Wuhu Zhongyuan completed roof surveying and capacity expansion

based on existing photovoltaic systems adding an installed capacity of 0.22 MW bringing

the total installed capacity to 2.72 MW and reducing annual carbon dioxide emissions

Green Products

by 847 tonnes.The company is committed to becoming an expert in healthy and comfortable environmental system solutions integrating the concept

of sustainable development into the entire lifecycle of green products. Aligning with national "dual carbon" goals and industry green

National Green Factory policies the company focuses on customers' low-carbon needs and enhances product support systems. From R&D design and production

In January 2025 DunAn Electro-Mechanical was recognized as a National Green Factory by the Ministry of Industry and to application it considers the green value of products strives to improve energy efficiency reduce environmental impact and systematically

Information Technology for its achievements in green production and sustainable operations. builds a green product system to fulfill low- carbon responsibilities and support the green transformation of the industry.Green Product R&D

The company integrates the concept of green and low-carbon into the entire process of product R&D and design controlling the environmental

attributes of products from the source. During the R&D phase key considerations include the selection of low- environmental-impact materials

adaptation of low-GWP refrigerants and efficient energy- saving structural design. Concurrently product energy efficiency parameters

are optimized to reduce resource consumption and pollutant emissions during production and use ensuring green and low-carbon design

and achieving synergistic improvement of environmental benefits and product performance.

37 382025 Environmental Social and Governance Report Environmental Sustainability

Cases CO? Natural Refrigerant Series Products Cases DunAn Electro-Mechanical · Anyue i-Star Large Scroll Type Air-Cooled Chiller (Heat Pump) Unit

Adhering to the concept of environmental protection the company has upgraded and launched the Anyue i-Star Large Scroll

To further implement the concept of sustainability and promote the low- carbon transformation of the refrigeration industry Type Air-Cooled Chiller (Heat Pump) Unit based on the original modular unit. The product adopts a scroll-type EVI compressor

the company initiated a comprehensive layout of CO? series products in January 2025. This layout covers all core product and comes standard with an economizer achieving quasi-two-stage compression. Both the cooling COP and part-load energy

categories required forCO? systems including CO? valvesCO? containers and CO? heat exchangers forming a completeCO? efficiency (CSPF) meet the national first- level energy efficiency standards. Through compressor parallel connection and

green refrigeration product matrix. With full-category supporting capabilities the company meets customers' integrated variable capacity ratio (VCR) technology the unit significantly improves part-load operational efficiency and reduces energy

needs for low-carbon refrigeration systems demonstrating its commitment to green product development and technological consumption. With a maximum combined cooling capacity of 4960 kW the unit features a large single-unit capacity which

strength. reduces the number of required devices saves materials and lowers construction carbon emissions. Additionally it can

operate stably in low-temperature environments as low as -26 ° C. Thanks to its excellent energy-saving and carbon-reduction

performance this product was awarded the "2025 HVAC & Heat Pump Industry—Energy Saving and Carbon Reduction

Technology Product Excellence Award."

Cases Insert Parallel Microchannel Heat Exchanger

In June 2025 the company successfully developed a clip-on microchannel heat

exchanger. Leveraging the core advantages of microchannel technology it specifically

addressed industry pain points such as rapid frosting difficult drainage and uneven

refrigerant distribution when ordinary microchannels are used in evaporators. This

Cases DunAn Electro-Mechanical · Wuhan Tianhe Airport Phase III Expansion Project

effectively improves heat exchange efficiency reduces energy loss and embodies the

concept of green energy conservation. Simultaneously the product utilizes upgraded

new materials significantly enhancing corrosion resistance. The salt spray test duration The Wuhan Tianhe Airport Phase III Expansion Project is a crucial transportation hub in

has exceeded 2500 hours effectively extending the product's service life reducing central China with its air traffic control center demanding exceptionally high standards

replacement frequency further lowering the environmental burden throughout the for the stability energy efficiency and environmental precision of its HVAC system.entire lifecycle and achieving a dual enhancement of green performance and product DunAn Electro-Mechanical tailored a customized solution based on the architectural

reliability. characteristics and requirements of the project's air traffic control center. By employing

an optimized combination of high-efficiency modular units and split- type rooftop

units the solution ensured stable and reliable system operation while significantly

improving energy efficiency and reducing energy consumption. This approach

Value of Green Products delivered substantial economic and environmental benefits supporting the development

The company consistently empowers sustainable development with green innovation focusing on energy conservation carbon of a green airport. Not only did it greatly enhance overall operational efficiency but its

reduction and scenario-specific needs. It creates diversified green products and customized solutions that combine energy efficiency outstanding stability and energy-saving performance also provided users with notable

advantages with environmental value. economic and environmental advantages perfectly aligning with the development

direction of modern green buildings.

39 402025 Environmental Social and Governance Report Environmental Sustainability

Cases DunAn Electro-Mechanical · TBEA Zhundong Project Cases Water Conservation Advocacy and Water-Saving Emission Reduction Practices

The TBEA Zhundong 2 billion cubic meters per year coal-to-gas project with a total DunAn Environment has integrated water resource management into its core

investment of 17.039 billion yuan is a significant industrial initiative aimed at promoting operational agenda systematically promoting water conservation and energy

the clean and efficient utilization of coal and ensuring national energy security. In efficiency improvement among all employees through a combination of cultural

response to the project's diverse requirements—such as high-temperature and dusty advocacy institutional optimization and technological upgrades. The company

conditions in production workshops comfortable temperature control in office areas issued the "Energy Conservation and Emission Reduction Starts with Me"

and precise temperature and humidity control in special process zones— DunAn initiative to all employees regularly conducting water conservation awareness

Electro-Mechanical tailored a comprehensive air conditioning system solution covering campaigns and behavioral supervision. It explicitly requires production

the entire plant area. This not only demonstrates the company's systematic service processes to close water inlet valves during non-operational periods and has

capabilities in large-scale energy and chemical projects but also contributes green and

established a "inspection—repair— feedback" rapid response mechanism to promptly address issues such as leaks and spills

efficient equipment support to the development of the national energy sector.thereby strengthening employees' water-saving habits through attention to detail.In 2025 major subsidiaries such as DunAn Hetian DunAn Machinery Zhuhai Huayu Wuhu Zhongyuan and Nanchang Zhonghao

established specialized water-saving and emission reduction teams. These teams systematically advanced water conservation

efforts through process optimization water recycling and equipment upgrades. Using the fourth quarter of 2024 as a benchmark the

average total water consumption in the fourth quarter of 2025 across these facilities decreased by approximately 10701 tonnes

Circular Shield year-on-year representing a reduction of 27.8% significantly improving water resource utilization efficiency.Water Resource Recycling

DunAn Environment recognizes the significant importance of efficient utilization and sustainable management of water resources for Cases DunAn Hetian · Industrial Water Recycling Practices

ecological balance and long-term corporate development. The company is committed to establishing a comprehensive water resource

management system that covers the entire process. Through source planning process control and awareness enhancement it systematically The company continuously advances the refinement of water resource management and innovations in recycling compre-

improves water resource usage efficiency and fulfills its responsibility to the ecological environment with concrete actions. hensively enhancing water resource utilization efficiency through systematic technological upgrades and scenario-based

applications. In 2025 DunAn Hetian actively implemented industrial water recycling practices carrying out refined graded

treatment and targeted reuse of reclaimed water within the park. The treated reclaimed water meeting quality standards was

Source Planning

systematically used in processes such as flame welding and landscape irrigationestablishing a park-wide water recycling

During the site selection phase for new facilities a systematic assessment of regional water resource availability and carrying management model characterized by "categorized treatment ? cascading utilization ? multi-scenario coverage."

capacity is conducted to ensure that operations are compatible with the local water environment. In the production process using the four-way valve product line as a pilot the company optimized process flows and upgraded

pipeline networks to circulate cooling water from high-frequency welding processes to the cooling systems of flame welding and

Process Control end cap riveting processes. This achieved cascaded reuse of 自来水

9763t

6206t 788t 1192t

cooling water within the same production line significantly 922t

Comprehensively implement water-saving process upgrades enforce meticulous water usage monitoring and continuously

reducing the intake of fresh water. Furthermore the company 酸 火锅炉房 防锈 焊接 焰国贸焊接钎焊炉水检精益线新喷涂线

655t 129t 37t 44t 682t 693t 75t 936t

optimize water recycling systems. 旧喷涂线 自清洗机253t

continues to promote technological upgrade projects such 手工清洗 清洗机洗污水处理 新污水处理5868t 29t 47t 262t 焊氨分解 制30t净化循环回用冷却塔车

as cooling water circulation systems and wastewater 车 车 间 车周转池定时开关

Awareness Enhancement 间 间recovery and reuse gradually building a water resource 循环 间 水检废水 回用净化补充循环到冷却塔周转池漂洗槽回用药剂增

Deepen water conservation awareness among all employees in daily operations and regularly conduct water-saving publicity intensive utilization system that progresses from single- point

and behavioral guidance. water conservation to systematic recycling.污水处理站

4142

CO22025 Environmental Social and Governance Report Environmental Sustainability

Cases Copper Scrap Recycling

Indicator Unit 2025 2024 2023

10000 tonnes 86.307 96.771 84.194 In the production process the company prioritizes the recycling of copper resources and has established a comprehensive Water Intake

process for the recovery and reuse of copper scrap. Through specialized procedures such as collection drying and screening

Drainage volume 10000 tonnes 27.611 35.146 30.840 copper waste generated during production—such as copper filings and copper ends—is returned to copper processing

enterprises for use in manufacturing new products or as raw materials supplied to other production stages. In 2025 the company

Water consumption 10000 tonnes 58.696 61.625 53.354 cumulatively recycled and reused 12397 tons of copper filings and copper ends reducing the demand for primary copper ore

Water Recycling Volume 10000 tonnes 1423.196 1263.121 955.930 extraction mitigating damage to the ecological environment of mining areas and effectively contributing to efficient resource

utilization and green low-carbon development.Water Recycling Ratio % 94.28 92.88 91.91

Cases Recycling and Reuse of Plastic Encapsulation Scrap

Material Recycling

In 2025 the company's electronic expansion valve product line actively established an internal

DunAn Environment integrates the circular economy concept into its operations and supply chain management systematically establishing material recycling system incorporating plastic encapsulation scrap at a 20% ratio during the

a comprehensive green managementsystem that spans from raw material selection and production optimization to resource recycling. production process. Through strict control of the scrap crushing sorting and mixing processes the

company effectively reduced the consumption of new materials and the generation of plastic

Raw Material Selection encapsulation waste while ensuring stable product quality and performance compliance. This

initiative also lowered the volume of solid waste disposal and carbon emissions. Throughout the

In the production process priority is given to the use of renewable and recyclable materials continuously reducing reliance on

year over 50 tons of scrap material were reused significantly improving the comprehensive

non-renewable resources.utilization of resources and earnestly implementing the principles of green manufacturing and

clean production.Source Waste Reduction Control

Through lean production and process innovation we strictly control material loss reduce product defect rates and minimize

Special Enhancement Initiatives

waste generation at the source.In 2025 the company continued to advance specialized initiatives for optimizing the repair of lower machine components and extending

the service life of tooling and molds leveraging lean operations to support efficient resource utilization and green production. For lower

Internal Recycling machine component repairs the primary approaches involved modular assembly and component-based replacement enhancing repair

We have established a comprehensive classification recycling and reuse system within the factory to achieve efficient recycling efficiency and reuse rates while reducing overall scrap and resource waste. In terms of extending the service life of tooling and molds

of recyclable resources such as metal scraps and packaging materials thereby reducing the amount of waste sent to landfills technical improvements such as process optimization material upgrades and surface treatments were implemented effectively prolonging

and incineration. their lifespan and reducing consumption and waste generation.Cases Lower Machine Component Repair Project

Packaging and Logistics Optimization

In 2025 the company initiated repair projects for 34 categories of off-machine parts

Implement packaging reduction and reusable solutions while continuously optimizing transportation plans to reduce including synchronous clamps heaters cylinders solenoid valves and touch screens.resource consumption and environmental impact across the entire value chain. Through methods such as component replacement and assembly a total of 3486 spare

parts were repaired and reused throughout the year effectively reducing the overall

scrap rate of spare parts and contributing to improved resource utilization efficiency.

43 442025 Environmental Social and Governance Report Environmental Sustainability

Cases Tooling and Mold Lifespan Enhancement Project

In May 2025 the company focused on refining production processes and carried out Legal Representative

(Primary Person Responsible for Corporate EM)

specialized optimization and upgrades for core production molds. Among these the

service life of the shut-off valve extrusion mold was significantly increased from the original

Vice President

270000 units to over 400000 units through process improvements effectively reducing the （Leads the Company's EM）

frequency of mold replacement and wear. Additionally by replacing materials and optimizing

processes for the four-way valve punching core rods the annual usage decreased from

Responsible Person：Minister of EHS

2264 pieces to 900 pieces significantly reducing material consumption and production Technical Responsible Person：Manager of EHS

(Organizes and Implements All Corporate EM Initiatives)

costs. This initiative embodies the principle of efficient resource utilization and supports

cost reduction waste minimization and quality and efficiency improvements in production

processes.EHS Service valve Reversing valve Expansion valve NSP Equipment Finance

Forging Workshop Sub-assembly

Supervisor Workshop Supervisor Sub-assembly SUS Assembly

Indicator Unit 2025 2024 2023 Wastewater Machining Workshop Final-assembly Workshop Supervisor Supervisor Equipment Support WarehouseTreatment Station Supervisor Workshop Supervisor Final-assembly Copper Assembly Supervisor Supervisor

Bending & Welding Parts Workshop Workshop Supervisor Supervisor

Workshop Supervisor Supervisor

Total Waste Recycled Tonnes 19752.36 17910.89 17748.94

Waste Recycling Rate % 96.52 95.36 95.89

Shift Leader

Operator

Environmental Shield

System Certification

Environmental Compliance Management Currently all 17 subsidiaries of the company have obtained ISO 14001 Environmental Management System certification. The company's

environmental management practices have achieved standardized and systematic operations with overall performance meeting interna-

The company regards environmental compliance as the bottom line of its operations strictly implements the "three simultaneous" system

tionally recognized standards.for environmental protection in construction projects and ensures that all pollution control facilities are designed constructed and put

into operation simultaneously with the main project. In 2025 all pollutant emission monitoring data of the company complied with national

and local standards achieving 100% stable and compliant emissions.Governance Structure

The company's EHS Management Department directly led by the executive team systematically oversees the company's environmental

affairs. Environmental protection positions are also established in each subsidiary to ensure that the management system is implemented

throughout the entire process and executed to the fullest extent.Furthermore the company has embedded environmental accountability into its operations by designating business unit heads as the

primary responsible parties and incorporating environmental performance into their annual assessments. Regular training and awareness

programs further strengthen environmental responsibility across the workforce.ISO 14001 Environmental Management System Certification

45 462025 Environmental Social and Governance Report Environmental Sustainability

Pollution Discharge Management

Indicators Unit 2025 2024 2023

DunAn Environment fully implements the pollution prevention and control requirements specified in the environmental impact assessment

reports and their approvals and legally applies for pollution discharge permits to ensure that all discharges are permitted and managed in Total Industrial Wastewater m3 158961.16 197262.63 155794.03

accordance with the permits.Total Domestic Wastewater m3 60431 52400 55370

Company or Subsidiary Pollution Discharge Permit Date of Issuance/Renewal of Pollution Discharge

Name Number Pollution Discharge Permit Permit Valid Chemical Oxygen Demand (COD) Tonnes 3.9239 6.1542 5.5207

Ammonia Nitrogen (NH3-N) Tonnes 0.048 0.125 0.063

DunAn Hetian 913306007652348458001U December 22 2025 By December 31 2030

Total Nitrogen (TN) Tonnes 1.5087 1.427 1.4362

DunAn Machinery 9133068114632514X5001U November 15 2025 By December 31 2030

Total Phosphorus (TP) Tonnes 0.0153 0.0443 0.0321

Zhuhai Huayu 91440400769345075Q April 11 2024 To April 10 2029

Wuhu Zhongyuan 91340221588859982Q001C December 19 2023 To December 18 2028 Exhaust Gas Management

DunAn Environment has integrated air pollution prevention and control into the core of its environmental management systematically

establishing a comprehensive waste gas treatment system covering the entire process. The company has developed efficient collection

Indicator Unit 2025 2024 2023 and purification systems for pollutants such as volatile organic compounds (VOCs) and dust generated during production utilizing

advanced technologies like activated carbon adsorption and catalytic combustion to enhance the effective removal of pollutants. We

Environmental Protection Investment CNY 10000 665.25 687.39 676.84 continuously strengthen the airtight management of production processes and optimize production techniques to reduce pollutant

Environmental Pollution Incidents Cases 0 0 0 generation at the source. Additionally we conduct regular maintenance and upgrades of treatment facilities to ensure their stable and

efficient operation.Environmental Pollution Penalty Amount CNY 10000 0 0 0

Waste Gas Monitoring

The company has established a strict emission monitoring mechanism ensuring that all waste gas emissions consistently comply with

national and local environmental standards through real-time monitoring and third-party verification thereby fulfilling its corporate

Wastewater Management environmental responsibilities.DunAn Environment places wastewater management at the core of operational sustainable development adhering to a closed-loop

management strategy that combines "source reduction process control end-of-pipe treatment and resource utilization" to advance Indicators Unit 2025 2024 2023

water efficiency improvement and discharge control. For wastewater of different natures we have established a refined management

system featuring classified collection and quality-based treatment comprehensively applying advanced technologies such as physical Particulate Matter (PM) kg 5913.9 4504.4 /

sedimentation chemical coagulation biochemical degradation and membrane separation to ensure efficient and stable purification of all

types of wastewater. Sulfur Oxides (SOx) kg 747.5 796.7 753.0

Nitrogen Oxides (NOx) kg 4391.5 4621.5 4319.9

Wastewater Monitoring

Volatile Organic Compounds (VOCs) kg 5053.6 5635.2 4173.7

All wastewater discharge outlets of the company are equipped with a dual-track system of online monitoring and manual testing ensuring

that key indicators such as pH COD and ammonia nitrogen consistently comply with national and local discharge limits. Additionally

qualified third-party institutions are regularly commissioned to conduct supervisory monitoring ensuring data transparency and full-process

control of discharges.

47 482025 Environmental Social and Governance Report Environmental Sustainability

Waste Management Key Dimensions Relevant Measures

DunAn Environment strictly complies with national laws and regulations related to solid waste management and has established a

comprehensive management system covering classification storage transfer and disposal. The company implements detailed Employees in noise-exposed positions are provided with protective earplugs and earmuffs that meet

classification of waste generated during production processes. Hazardous waste is entrusted to qualified professional units for Receptor Protection and national standards and their use is strictly enforced. Non- compliance is addressed through education

standardized disposal; general industrial solid waste is centrally collected and prioritized for resource-based comprehensive utilization; Occupational Health reminders and performance evaluations. Regular noise monitoring in workplaces is conducted along

Management

and domestic waste is handed over to the municipal sanitation system for unified removal and treatment. By continuously improving with pre-employment in-service and post-employment hearing examinations for noise-exposed

the waste classification recycling and resource utilization mechanisms the company consistently enhances the comprehensive employees and health surveillance records are established.utilization rate of solid waste.Institutionalized Strictly implement the " Emission standard for industrial enterprises noise at boundary" and entrust

Indicators Unit 2025 2024 2023 Monitoring and qualified third parties to regularly conduct boundary noise monitoring.Compliance Management

Total Waste Generated Tonnes 19752.36 19123.24 17748.94

Total Non-Hazardous Solid Waste Tonnes 19064.54 18252.68 17020.80 Noise Monitoring

Non-hazardous solid waste intensity Tonnes / CNY 10000 0.0276 0.0235 0.0238 The company strictly implements third-party monitoring of boundary noise and has incorporated noise into the pollutant discharge

permit management starting from October 2025 achieving institutionalized and compliant closed-loop control of noise.Total hazardous waste Tonnes 687.82 870.55 728.14

Tonnes / CNY 10000 0.00096 0.00112 0.00102 Enhance Cleaner ProductionHazardous Waste Intensity

To systematically advance sustainable development DunAn Environment has adopted clean production audits as a key management tool

Total hazardous waste

generated per 100 million revenue Tonnes 9.12 / / ensuring compliant operations while continuously improving resource utilization efficiency enhancing environmental performance and

fostering long-term value creation for the enterprise.In accordance with relevant regulations such as the "Cleaner Production Promotion Law of the People's Republic of China" and the "Cleaner

Noise Management

Production Audit Measures" mandatory clean production audits must be conducted at least once every five years. Adhering to the

The company places high importance onnoise management implementing systematic control measures that cover the entire process management philosophy of "promoting improvement through voluntary action" the company proactively implements voluntary clean

from design and operation to improvement thereby minimizing the impact on surrounding communities and employee health. production audits before the expiration of the mandatory audit cycle and submits the audit results to provincial-level ecological and

environmental departments for acceptance and public disclosure. During the reporting period DunAn Environment’s subsidiaries steadily

Key Dimensions Relevant Measures

advanced clean production audit work based on their operational characteristics and regulatory requirements with some subsidiaries

During the equipment and process selection phase priority is given to purchasing low-noise equipment achieving phased results:

Source Control and that meets national noise limit requirements. Technical agreements explicitly stipulate that the sound DunAn Hetian and DunAn Thermal Technology: Successfully passed the voluntary cleanproduction audit acceptance in Zhejiang Province

Equipment Procurement level of high-noise source equipment such as air compressors fans and pump units must not exceed 80 demonstrating the company’s initiative and foresight in environmental management. Through systematic optimization theyachieved

Management decibels; otherwise the equipment will not be purchased or accepted. This ensures noise control at the efficient resource utilization and minimized ecological impact.source. DunAn Machinery: Completed the mandatory clean production audit acceptance in Zhejiang Province ensuring strict compliance with

regulatory requirements in key supervised areas and laying a solid compliance foundation for the continuous deepening of environmental

By optimizing the plant layout newly added high-noise equipment is positioned away from sensitive management.Blocking Transmission areas. For operational equipment noise enclosures and silencers are installed flexible connections are

Paths and Engineering

implemented and engineering measures such as soundproof doors and windows in workshops and Comprehensive Environmental Protection Training

Noise Reduction

acoustic linings are combined to effectively block noise transmission paths. The company places high importance on environmental protection training institutionalizing it as a mandatory component of new

employee onboarding. This ensures that employees fully understand the basic requirements of national environmental laws and regulations

deeply identify with the company's environmental philosophy and management system and strengthen the sense of environmental

responsibility across all staff. This provides crucial support for the effective implementation of various specific environmental protection

measures.

49 502025 Environmental Social and Governance Report Environmental Sustainability

Cases Raise environmental awareness Environmental Risk Emergency Response Flowchart

In August 2025 the company conducted comprehensive environmental protection

training focusing on three major dimensions: policies and regulations risk prevention

and control and emergency response. The training content covered core knowledge Sudden Environmental Pollution Incident

areas including national and local environmental protection laws and regulations the

company's environmental management systems standardized disposal of the "three

wastes" (wastewater waste gas and solid waste) and hazardous waste storage and

transportation. Furthermore targeted intensive training was provided for key positions Emergency Command Center

such as production wastewater treatment and hazardous waste management with a focus on explaining job-specific environmental

protection operating procedures and emergency response processes to enhance compliance levels in critical roles.On-site Command Leaders

Emergency Activation

Environmental Risk Management

Environmental Emergency Management Self-Rescue

In accordance with regulatory requirements the company has formulated the "Environmental Pollution Incident Emergency Plan" and

completed its filing. At least one environmental emergency drill is organized annually to continuously strengthen employees' awareness of

environmental protection responsibilities and their emergency response capabilities for sudden environmental incidents thereby Firefighting

building a comprehensive environmental risk prevention and control system characterized by proactive prevention and rapid response.Emergency Expansion Rescue Operation Disaster Relief

Company or Emergency Plan

Subsidiary Name Preparation Date Filing Department

Emergency Plan Emergency Plan

Filing Date Filing Number Logistics Support

Zhuji Branch of Shaoxing

DunAn Hetian December 2024 Ecological December 12 2024 330681-2024-106-M Internal Resources

Environment Bureau

Zhuji Branch of

DunAn Machinery June 2024 Shaoxing Ecological June 24 2024 330681-2024-049-L Request for Rescue Incident Control

Environment Bureau

Jinwan Branch of Zhuhai

Zhuhai Huayu January 2026 Municipal Ecology and March 3 2026 440404-2026-0057-M

Environment Bureau On-site Cleanup

Emergency Recovery

Wuhu Wuhu City Wanzi District Incident

Zhongyuan January 2024 Ecological Environment February 20 2024 340221-2024-009-L

Branch

Summary Reporting

Emergency

Termination Emergency Improvement

51 522025 Environmental Social and Governance Report Environmental Sustainability

Enhance Emergency Drills Cases DunAn Environment Intelligent Manufacturing Headquarters Base Project

In 2025 DunAn Environment continued to advance the construction of its environmental risk prevention and control system. It organized

The DunAn Environment Intelligent Manufacturing Headquarters Base is located in a

its subsidiaries to conduct targeted emergency drills for sudden environmental incidents based on their respective production characteristics

key control unit of the industrial agglomeration area in Zhuji Economic Development

and major risk sources aiming to enhance practical response and coordinated disposal capabilities. The drills at each subsidiary were

Zone. The project strictly implements the spatial control requirements of the "Ecological

focused and goal- oriented:

Protection Red Line Environmental Quality Baseline Resource Utilization Upper

DunAn Hetian: Organized two specialized emergency drills for liquid ammonia leakage and hydrogen peroxide leakage covering the

Limit and Ecological Environment Access List" and complies with Zhuji City's overall

disposal procedures for hazardous chemicals of different natures.land use plan urban-rural master plan and relevant control regulations. Through

DunAn Machinery Wuhu Zhongyuan: Conducted emergency drills for liquid ammonia leaks focusing on testing the emergency response

pre-assessment of environmental impacts and systematic evaluation the project fully

and personnel evacuation capabilities of key risk positions.adheres to the "Zhuji City 'Three Lines and One List' Ecological and Environmental

Cases DunAn Hetian · Liquid Ammonia Leak Emergency Drill Zoning Control Plan." Throughout the construction and operational phases the company will strictly control the construction

scope minimize disturbances to vegetation and soil standardize the management of lighting noise and waste and reduce human

In June 2025 DunAn Hetian organized a specialized emergency evacuation drill for a impacts on the surrounding ecosystem. Guided by the principles of ecological priority and sustainability the company will

liquid ammonia leak simulating the activation of a leak alarm. Following the established strengthen biodiversity conservation laying a solid foundation for environmental compliance and sustainable project operations.plan each emergency team carried out their assigned tasks in an orderly manner

completing the entire process of hazard reporting personnel evacuation on- site

cordoning leak repair and environmental monitoring. The drill effectively enhanced the

emergency coordination and response capabilities of the participants improved the Indicator Unit 2025 2024 2023

emergency management mechanism strengthened the defense line for employee

ECRL-related Incidents in Operations Items 0 0 0

safety and plant environmental security and achieved the expected objectives.Ecological Governance Investment Funds CNY 10000 20.45 20.45 25.50

Greening Area Hectare 4.18 4.18 4.99

Ecological Shield Green Space Ratio % 11.47 11.47 13.69

Biodiversity Protection Hazardous Substance Control

DunAn Environment extends biodiversity protection throughout the entire product lifecycle by establishing a stringent chemical and

DunAn Environment deeply integrates the concept of biodiversity protection into the entire process of operations and decision-making. hazardous substance control system to prevent potential ecotoxicity at the source. We strictly adhere to international regulations such as

During the site selection and construction phases of new projects strict ecological environment assessments are conducted to ensure RoHS and REACH implementing a comprehensive control mechanism that spans from supply chain access and material verification to

compliance with spatial control requirements such as the "ecological protection red line" minimizing disturbance to local ecosystems. product output. This systematically blocks the release and migration of hazardous substances into the environment.Additionally by establishing a comprehensive chemical and hazardous substance control system covering the entire chain and strictly In practice the company not only conducts ongoing compliance testing on materials and products while maintaining complete documentation

adhering to international standards the company prevents pollutants from entering the environment at the source systematically but also proactively addresses regulatory upgrades for substances such as decabromodiphenyl ethane. Through comprehensive screening and

strengthening its corporate defense line for biodiversity protection. research into alternative solutions we drive the green transformation of the supply chain. This approach reduces the potential threat of

persistent pollutants to ecosystems at the micro level thereby strengthening the industrial defense line for biodiversity protection.New Project Site Selection Assessment

During the site selection and planning stages of new projects the company incorporates biodiversity conservation and environmental

compliance into the preliminary assessment process. It strictly adheres to the "Three Lines and One List" ecological and environmental

zoning control requirements. Through pre-assessment of environmental impacts and systematic evaluation the company minimizes

disturbances to the surrounding ecosystem caused by project construction ensuring green and compliant operations throughout the

project's lifecycle.

53 54Global Reporting Initiative

Standards (GRI STANDARDS)

Responsible Operations ?GRI 401 Employment 2016

Creating Diverse Value through Social Prosperity ?GRI 403 Occupational Health & Safety 2018

?GRI 404 Training & Education 2016

?GRI 405 Diversity & Equal Opportunity 2016

This chapter responds to the United Nations Sustainable Development Goals (SDGs)

?GRI 406 Non-discrimination 2016

?GRI 407 Freedom of Association & Collective Bargaining 2016

?GRI 408 Child Labor 2016

?GRI 409 Forced or Compulsory Labor 2016

?GRI 413 Local Communities 2016

?GRI 414 Supplier Social Assessment 2016

?GRI 308 Supplier Environmental Assessment 2016

Shenzhen Stock Exchange Self-Regulatory

Guidelines for Listed Companies

No. 17?Sustainability Reporting (Trial))

?Employees

?Data Security & Customer Privacy Protection

?Supply Chain Security

?Rural Revitalization

?Social Contributions

?Fair Treatment of SMEs

55 562025 Environmental Social and Governance Report Responsible Operations

Product Responsibility

Product Quality

Governance The company has established and enhanced a closed-loop management system centered on "planning—prevention—control—

The company has established a quality governance structure centered around the President and the Chief Quality Officer. The Process IT improvement." In 2025 28 core institutional documents were developed and a systematic institutional renewal plan was initiated

and Quality Center oversees the quality strategy with base quality leaders collaborating with specialized modules such as planning with 9 key quality management systems already updated.improvement systems and measurement and testing. This ensures that comprehensive quality management is deeply integrated into the

entire value chain from new product development and supply chain to manufacturing and after-sales service.AQ

OQC Full Lifecycle Quality Management

QAS

NPI

SQE

PQE

IPQC Strengthen APQP (Advanced Product Quality System Documents:

SQS

IQC Planning Planning) to ensure early identification of design Regulations on Design Quality Planning

input risks Management

Data statistics

AQ

OQC

QAS

NPI

SQE

Establish QCDS (Quality/Cost/Delivery/Serv ice) System Documents:

PQEE

Prevention supplier qualification criteria and develop a Regulations on Supplier Development

IPQC

SQS supplier quality screening mechanism Quality Control Management

IQC

Data statistics

Meterology

Division

Test

Meterology

Wuhu base Dual assurance through process quality stability System Documents:

Test Control monitoring and management + dynamic sampling Process Product Quality Control Regulations

Meterology inspection of finished products AQL Dynamic Sampling Inspection Procedures

Zhuhai base

Test

Meterology

Diankou base

Test

Specialized improvement initiatives for quality pain

QMS System Documents:points + closed-loop management of after- sales

Product Quality Improvement Management

Improvement quality issues forming a continuous optimization

PCM Regulations" "Customer Feedback mechanism of problem analysis → improvement

Management Regulations

QIM implementation → effectiveness verification

AQM

SQM

NPI

QDA

QPM

5758

QD QD

Leader Leader

Division CCBU MIC QMS Module QI Module QP Module

SQR（Wuhu & Zhuhai base） PIQC Director

CQO

CEO2025 Environmental Social and Governance Report Responsible Operations

Strategy

Deep Integration The five core quality management tools—APQP FMEA PPAP SPC and MSA—are deeply embedded

The company regards product quality as a core initiative to fulfill social contribution win stakeholder trust and drive long-term value of Tools throughout the entire product lifecycle management process.creation incorporating it into the corporate development strategy. Focusing on the safety compliance and sustainability needs of the HVAC

and refrigeration industry a quality culture centered on "zero defects" is established planning a three-stage transition path of "zero errors IATF16949 Adopt the IATF16949 process-oriented audit model utilizing process audits VDA6.3 and product audits

in work → zero defects in products → zero waste in operations." This is promoted through the three-pronged linkage of "publicity System Operation VDA6.5 for implementation.products and management" to transform quality concepts. At the same time in response to international regulatory standards and

Three-Tier

environmental trends the company advances Product Responsibility upgrades and innovations in green materials balancing Product From point (solenoid valves) to line (commercial component product lines) to surface (comprehensive Progressive

Responsibility compliant exports and low-carbon development. This creates a product system that combines quality advantages safety Promotion implementation across DunAn Environment).assurance and environmental benefits contributing to industry quality improvement and sustainable development.Cases Build a process-oriented quality system compliant with IATF 16949 standards.Product Responsibility Management

DunAn focuses on the safety compliance development needs of the HVAC and refrigeration industry deploying various safety protection

Impact Risk and Opportunity Management

valves that are compatible with environmentally friendly refrigerant systems such as R32 and R290. These valves are applied in scenarios

Quality Improvement and Refinement like air conditioning and refrigeration equipment with their core function being to prevent safety hazards in refrigerant systems and ensure

DunAn Environment builds its quality improvement efforts on a process-based quality system that complies with the IATF 16949 standard. the safe operation of equipment. The development of such safety protection valves not only responds to international regulatory standards

This system systematically drives quality enhancements by deeply embedding core tools such as APQP FMEA and SPC and innovatively such as the EU's lead-free and flammable refrigerant safety requirements preventing safety risks through compliant design and ensuring the safe

applying VDA6.3 process audits and VDA6.5 product audits. This approach forms a three-tier progressive promotion model from "point" and compliant export of products but also represents a concrete practice by the company to strengthen Product Responsibility management.(individual products) to "line" (product lines) and then to "surface" (company-wide) providing a solid systemic foundation for continuous By supplying specialized safety protection components the company helps the industry enhance Product Responsibility levels and solidify the

quality improvement. baseline of Product Responsibility management.Driven by this system the company focused on quality enhancement for the 6A series solenoid valve—a core product in its commercial

components division—using the "comprehensive test first-time defect rate" as a key performance indicator. In 2025 the actual external

leakage defect rate for the TCC series brazed ammonia inspection reached 502 ppm which not only surpassed the challenging target of 750

ppm but was also significantly lower than the project initiation target of 1500 ppm demonstrating substantial progress in quality refinement.

59 602025 Environmental Social and Governance Report Responsible Operations

Cases QSV Bidirectional Instant Shut-off Valve Cases R290 Series Products

As an A3-grade natural low-carbon refrigerant with a GWP (Global Warming Potential) approaching

With the air conditioning industry accelerating the adoption of low-GWP flammable refrigerants

zero R290 is a critical pathway for the global HVAC industry to achieve low-carbon transition and

such as R32 the company has focused on the safety requirements of refrigerant system operation.support "Dual Carbon" goals. However its flammability and explosiveness demand stringent

In February 2025 it launched the QSV bidirectional quick shut-off valve. The product is optimized for

safety standards across the entire system lifecycle.system safety and green application scenarios featuring core advantages such as high flow capacity low

Guided by our ESG safety development philosophy the Company focuses on the core safety pain

internal leakage and rapid response. It enables efficient and reliable shut-off control in flammable

points of R290 systems launching a dedicated series of valves and components that fortify safety

refrigerant systems significantly enhancing the operational safety and stability of air conditioning

while driving industry decarbonization. Through core technical innovations such as metal-to-metal

systems and providing critical safety assurance for the large-scale application of low-GWP environmentally

hard seals low-leakage structural optimization and low-charge volume adaptation we mitigate

friendly refrigerants. While ensuring equipment safety this product facilitates the efficient popularization

refrigerant leakage risks at the source. These advancements significantly enhance the safety and

of environmentally friendly refrigerants balancing safety responsibilities with low-carbon development.reliability of R290 systems safeguarding the lives and property of end-users and fulfilling our ESG

social responsibility toward consumer protection and safety.Cases Stainless Steel and Aluminum Full Series Products

Quality Culture Development

In response to the EU's lead-free requirements for the HVAC industry the Company actively aligns with EU RoHS regulations and global

DunAn Environment deeply integrates the "Zero Defect" principle into its quality culture fostering an ecosystem centered on "doing things

circular economy goals. We have integrated environmental compliance and public health into our core product design criteria. By

right the first time." The company has outlined a "three-stage leap" implementation path: first ensuring zero errors in work; then achieving

advancing green material innovation we launched a full range of stainless steel and aluminum valves piping components and zero defects in products; and ultimately realizing zero waste in operations. This systematic approach drives the transformation of quality

microchannel products establishing a full-chain safety control system from the source. concepts into tangible business outcomes.Our lead-free innovation eliminates the precipitation and release of hazardous substances like lead throughout the product At the implementation level the company adopts a three-pronged approach of "communication product and management": shifting

lifecycle. This not only safeguards human health during product use but also prevents secondary hazards to ecosystems and from passive indoctrination to active dissemination in communication; quantifying quality behaviors through a "point system" in products

public health after disposal. Furthermore the application of stainless steel significantly enhances corrosion resistance and product to incentivize demonstration and improvement; and strengthening error prevention and standardization in management. Simultaneously

longevity fortifying environmental safety at the design stage and aligning with the green development requirements of the ESG leveraging the "Bi-monthly TQM Conference + Monthly QC Meeting" mechanism issues are reported experiences are shared and

Environmental dimension. reflections and planning are conducted. Under leadership guidance a "problem-improvement-empowerment" closed-loop is formed

ultimately elevating quality from institutional constraints to cultural consciousness achieving a fundamental shift from "quality as a

requirement" to "quality as a pursuit."

Cases Hosting the QCC Presentation Competition to Deepen Quality Culture Development

In December 2025 DunAn Environment hosted the QCC Presentation Competition providing a platform

for showcasing and exchanging quality improvement achievements across various product lines. The

competition invited representatives from eight suppliers fostering collaboration between internal and

external quality management. Through evaluation first second and third prizes along with excellence

awards were selected from 18 shortlisted reports. Participating teams engaged in discussions centered

on core issues such as customer experience enhancement and product performance improvement

promoting technical reuse and cross-domain quality improvement collaboration. This event extended

internal quality management to supply chain collaboration driving the "zero-defect" culture outward

and further enhancing the supply chain quality ecosystem.

61 622025 Environmental Social and Governance Report Responsible Operations

Quality Incident Handling and Response Product Recall Procedure

The company has established a systematic quality risk and performance management mechanism creating a three-in-one assessment

system of "process control - specialized breakthroughs - tackling pain points" and clarifying a quality responsibility system with clear

authority and responsibility shared by all employees. Through the "Four-Dimensional Timeliness Management System" the company

standardizes the response to quality incidents establishes a systematic product recall procedure and strengthens the foundation of

quality governance.Incident Timeliness of Quality

Severity Levels Incident Reporting Quality Incident Reporting Recipient

Extraordinary quality incidents should be reported to the environmental quality

Major Accident Within 24 hours(The management department the responsible president and the president's office.above time requirement Major quality incidents should be reported to the environmental quality

Major incidents is the standard management department and the responsible president.requirement. Incase of

General incidents special circumstances General quality incidents should be reported to the business unit head

apply for reporting in Indicators and Targets

Minor incidents advance.) Minor quality incidents should be reported to thesubsidiary/base head and the business unit quality head The company's quality control has achieved significant results with zero product recall incidents at the client end for three consecutive

years; the number of feedback cases exceeding ten million yuan has decreased year by year. In 2025 the external leakage defect rate of the

TCC series brazed ammonia inspection reached 502 ppm surpassing the challenging target of 750 ppm and the project initiation target of

Quality incident reporting Emergency containment Accident investigation Correction time Corrective and preventive 1500 ppm. The company has received numerous honors including the Second Prize for Outstanding Quality Management Group Activities

time requirement time requirement time requirement requirement action time requirement in the National Machinery Industry and quality-related awards from Midea Group earning high recognition from the industry.within 24 hours reporting Complete within Within 72 hours One week One week

method: OA email 24 hours

Indicators Unit 2025 2024 2023

Client Product Recall Incidents Cases 0 0 0

Product Recall Procedure

The company has established a systematic product recall procedure at the level of quality risk management aimed at proactively identifying Honor

assessing and handling products that have been delivered but contain defects or potential hazards.The recall mechanism follows a strict process including the evaluation of problem information collected internally and reported externally

multi-department joint recall review hierarchical approval based on the "Product Recall Review Form" return arrangements and on-site

isolation led by the sales department and finally product disposal review organized by the quality department of the manufacturing base.Recalled products are evaluated and handled in accordance with the "Quality Incident Reporting and Handling Management Regulations"

and all handling records are incorporated into the defective product disposal ledger for unified management thereby forming a complete

control chain from risk identification to closed-loop management.

63 642025 Environmental Social and Governance Report Responsible Operations

Customer Service

GovernanceThe company has established a customer-centric service governance system. Guided by the brand philosophy of“ continuous innovationand customer value” it has formed a professional sales and service team and established a cross-departmental collaboration mechanism

that features demand-driven R&D and market feedback-driven process optimization.The company has established a regular customer satisfaction management system formulated comprehensive customer service

standards for the entire process and standardized the procedures for collecting using and safeguarding customer information. It strictly Strategic Partner Award from Hisense Supplier of the Year from Munters Silver Execution Award from JC

adheres to laws and regulations such as the Personal Information Protection Law of the People's Republic of China establishing a full

lifecycle protection mechanism for customer privacy and commercial information. The company implements simultaneous signing of

contracts and confidentiality agreements ensuring the security and controllability of customer information through access control

process supervision and technical safeguards thereby effectively protecting the legitimate rights and interests of customers.Strategy

The company incorporates the enhancement of customer value and service experience into its core development strategy adhering to a

customer demand-oriented approach. Through efficient response precise services and closed-loop improvements it continuously Supplier Recognition from BOSCH Excellent Quality Partner from LG

enhances the competitiveness of its products and services.With customer satisfaction as the core focus the company transforms market insights and customer feedback into research and development

directions service optimization and product upgrades. This drives the transformation of services from passive response to proactive

empowerment building a long-term stable mutually trusting and win-win customer cooperation ecosystem thereby continuously Metrics and Targets

enhancing the company's market competitiveness and brand value.The company has established a closed-loop management system for customer service and satisfaction continuously improving service

Impact Risk and Opportunity Management quality and customer experience. Over the past three years customer satisfaction survey scores have remained above 92 points. During the

Through systematic customer service and closed-loop demand management the company promptly captures market opportunities and reporting period there were no customer complaints no regulatory violations and no information security incidents.enhances customer loyalty while effectively mitigating risks related to service quality and customer information security. By conducting

comprehensive customer satisfaction surveys the company accurately identifies areas for improvement and continuously optimizes its Indicators Unit 2025 2024 2023

products and services. A full-process customer privacy protection mechanism has been established to strictly prevent risks such as

Incidents of violations of product and

information leakage and misuse. During the reporting period no customer privacy breach incidents occurred. service information and labeling regulations Number 0 0 0

Customer Recognition Customer Satisfaction Score 94.11 93.27 92.27

Overview of Honors Awarded to DunAn Environment by Customers in 2025 (Partial)

Customer Complaints Times 0 0 0

Serial Numbe Award-Winning Project Issuing Authority

1 Annual Outstanding Supplier Munters USA Customer complaints per billion revenue Times 0 0 0

2 Annual Outstanding Partner Sichuan Changhong

3 Cost Transformation Award Shanghai Daikin

4 Outstanding Quality Partner Award LG Korea

5 Strategic Partner Award Hisense Group

6 Outstanding Strategic Supplier TCL Industries Holdings

7 Execution Silver Award Johnson Controls

8 Outstanding Partner Award Bosch

9 LG Group Strategic Partner Award Nanjing LG

10 Best Performance Import Award LG India

65 662025 Environmental Social and Governance Report Responsible Operations

R&D Driven Innovative Technologies and Products

DunAn Environment consistently places technological innovation at the core of its development actively responds to national policy directions

Governance and drives industrial upgrading and corporate sustainable development through technology and product innovation. Leveraging platforms such

as the National Technology Center and the Postdoctoral Workstation the company deepens industry-academia-research collaboration to ensure

The company designates the Technology Management Department as the unified centralized department responsible for technology

the efficient achievement of technology R&D goals. In 2025 several core products developed by the company including the "High-Efficiency

research and development project management standardization management and technical knowledge management. It oversees the

High-Airtightness Low-Noise Metro Vehicle Air Conditioning System" the "Electronic Cleanroom Fresh Air Handling Unit (MAU)" and the

implementation of various technical management tasks establishes and refines R&D management systems provides professional technical

"Ultra-Low-Temperature Intelligent Regulation Cascade Integrated Unit" passed expert industry reviews and were recognized as achieving

services supervises and guides technical management activities across business units and coordinates external technical collaborations.internationally advanced or higher technical levels.The company implements an IPD (Integrated Product Development) R&D management system centered on market demand. It establishes

a multi-department integrated portfolio management decision-making center responsible for reviewing R&D project investments forms

Cases High-Efficiency High-Airtight ness Low-Noise Metro Vehicle Air Conditioning System

product development execution teams accountable for the entire commercial success of products and divides the R&D process into four

stages—concept planning development verification and release—with strict review points set at each stage.In May 2025 the "High-Efficiency High-Airtightness Low-Noise Metro Vehicle Air Conditioning System"jointly submitted by DunAn

In terms of institutional management the company has formulated 27 technical management systems including the "Product/Platform

Environment CRRC Nanjing Puzhen Co. Ltd. and Hangzhou Metro Group Co. Ltd. was evaluated by the expert committee of the

Development Management Process" and built a standardized management platform covering the entire R&D process. It has refined the

Chinese Association of Refrigeration and the technology was recognized as internationally leading. The project focused on the

"Technical Project Incentive Management Regulations" to establish a differentiated R&D incentive mechanism stimulating the innovation energy-efficient operation and healthy comfortable design concept of metro vehicle air conditioning systems conducting

vitality of technical talent. Simultaneously the Intellectual Property Department takes the lead in improving the full-chain management of research on the energy efficiency airtightness noise CO2 concentration and humidity control of the air conditioning units and

intellectual property issuing the "Intellectual Property Management Standards" to align intellectual property management with national systems: it developed a multi- tooth soft-seal technology for slanted interface end supply and return solving the sealing challenge

and international standards. The company has obtained relevant certifications and conducts specialized training on patent mining between the unit and the vehicle body improving the overall vehicle airtightness and cabin pressure stability reducing cabin

thereby constructing a comprehensive patent protection system. noise and enhancing passenger comfort; it proposed an active cold/heat recovery technology for air conditioning units comprehensively

utilizing DC inverter compressors high-efficiency refrigerants and multi-parameter coordinated control to reduce system operating

Strategy power consumption and improve system energy efficiency; it established and implemented multi-objective coordinated control

The company places technological innovation at the core of its development incorporates research and development (R&D) as a driver of cabin temperature humidity and CO2 concentration effectively improving cabin air quality.into its corporate development strategy responds to national policy directions and promotes industrial upgrading and sustainable corporate

development through technological and product innovation. It adheres to continuously increasing R&D investment optimizing the investment

structure improving the construction of technical talent echelons introducing high-end technical experts and solidifying the foundation

for innovation. Leveraging platforms such as the National Technology Center and Postdoctoral Workstation the company deepens

industry- academia-research collaboration focuses on core areas such as HVAC and refrigeration advances cutting-edge technology

research and core product iteration while strengthening intellectual property protection. By standardizing innovation management with

international standards the company helps maintain its competitive advantage in core sectors and achieve efficient implementation of

innovation outcomes.Impact Risk and Opportunity Management

Through comprehensive R&D process control and systematic innovation the company effectively manages risks related to R&D cycles

costs and technology implementation seizes opportunities in the industry's green low-carbon and efficiency upgrade trends accelerates

the transformation of cutting-edge technological achievements and ensures that multiple core products reach internationally

advanced/leading levels forming significant technological and market advantage.

67 682025 Environmental Social and Governance Report Responsible Operations

Cases Electronic Clean Fresh Air Handling Unit (MAU) Cases Ultra-Quiet Electronic Expansion Valve

In May 2025 the company's independently developed "Electronic Clean Fresh Air Handling Unit (MAU)" was evaluated by the In September 2025 the company's independently developed ultra-quiet electronic expansion valve

expert committee of the Chinese Association of Refrigeration and the product technology was recognized as internationally underwent a rigorous evaluation at the provincial-level industrial new product review and appraisal

advanced. The project focused on the energy efficiency and stable operation of fresh air clean air conditioning systems for meeting where its technology was recognized as reaching internationally advanced levels. This

high-end electronic equipment conducting research on technologies such as air leakage rate mechanical strength thermal product features a porous material noise reduction block installed before the valve which adjusts the

bridge factor and heat exchanger air resistance: it developed large- diameter low-air-resistance elliptical tube heat exchange unsteady two-phase flow ahead of the valve refines internal refrigerant bubbles and prevents

technology significantly improving heat exchange capacity and reducing flow resistance with an overall air resistance reduction clogging by impurities. A fixed noise reduction block structure was developed to prevent welding

of 40%?60% compared to traditional round tubes. Additionally the project developed an integrated design and manufacturing blockages simplifying design and manufacturing processes while enhancing product reliability.technology for external frame enclosures effectively solving the challenges of low air leakage and low heat leakage in Based on these achievements the company has obtained four utility model patents and filed three

high-strength enclosures achieving European standard Level 1 for enclosure thermal conductivity and thermal bridge factor; it invention patents and one PCT patent application.also developed a top convex bypass structure making full use of natural cooling sources to reduce the unit's annual operating

energy consumption.Increase Innovation Investment

The company places great emphasis on technological research and development continuously increasing R&D investment as a key

support for enhancing core competitiveness. The scale of investment has steadily grown and its structure has been continuously

optimized. In 2025 the company's R&D investment reached 5.35 billion yuan a year-on-year increase of 6.42% accounting for 4.10% of

operating revenue. Moreover all R&D investment was expensed demonstrating the company's unwavering commitment to continuous

innovation.In terms of R&D team development in 2025 the company continued to refine its technical talent structure and attract high-end talent. Five

technical experts with doctoral degrees or higher were recruited effectively addressing the shortage of high-end technical R&D personnel

Cases Ultra-low Temperature Intelligent Regulation Cascade Integrated Unit and capabilities. This provides a solid foundation for technological iteration and product innovation helping the company maintain a

competitive edge in core sectors and facilitating the efficient implementation of innovative achievements.In May 2025 the company's independently developed ultra-low-temperature intelligent cascade integrated unit underwent a

rigorous evaluation at the provincial- level industrial new product review and appraisal meeting where its technology was

recognized as reaching internationally advanced levels. This product adopts a cascade design with low-temperature and high-temperature R&D Innovation Incentives

stages achieving a minimum temperature of -65°C. It innovatively applies low-temperature hot gas bypass oil return technology to

To stimulate the innovation vitality of technical talents and support the implementation of the innovation-driven development strategy

effectively prevent compressor liquid slugging. A liquid injection device is designed to coordinate liquid injection cooling with hot

the company enhances the "Technical Project Incentive Management Regulations" to establish a scientific and reasonable incentive

gas bypass control significantly reducing compressor start-stop wear and energy consumption. Additionally the development of

mechanism for technical talents. During the implementation of incentives a differentiated model is adopted: product development

low-load energy stepless regulation and coordinated control technology has notably improved energy efficiency.projects receive incentives through "development incentives + sales commissions" while technology R&D and process development

projects are incentivized based on the direct economic benefits generated. Additionally the final incentive amount for each project is

comprehensively determined by combining the project management quality coefficient which is calculated based on project progress

cost targets and performance goals. Incentives are distributed in a standardized manner after public announcement and approval

effectively motivating the technical talents' enthusiasm and creativity thereby providing strong institutional support for the company's

technological innovation and development.

69 702025 Environmental Social and Governance Report Responsible Operations

Intellectual Property Protection Metrics and Targets

DunAn Environment regards intellectual property protection as a crucial dimension for safeguarding corporate innovation capabilities and The company establishes a closed-loop management system for R&D targets based on the "Technical Project Management Regulations."

fulfilling sustainable development and social responsibilities. The company has successively obtained certifications as a National Intellectual R&D plans and targets are formulated annually integrating the company's strategic planning technological upgrade requirements and

Property Demonstration Enterprise and for its National Intellectual Property Management System continuously enhancing its capabilities across market orientation. At the end of each year the R&D project metrics and completion timelines for the following year are defined reviewed

the entire chain of intellectual property creation utilization and maintenance. Building on this foundation the company issued the "Intellectual approved and then implemented. To ensure the execution of R&D plans and targets the company follows the process of "annual

Property Management Standards" which specify reward amounts for patent applications encouraging R&D personnel to innovate independently planning—project initiation review—project execution—project summary." Project teams advance R&D according to the plans and targets

stimulating innovation potential and making patents a "badge of honor" for developers. while the Technology Management Department tracks progress target achievement rates and other metrics. Upon project completion a

In terms of standardization the company simultaneously promotes the alignment of intellectual property management with national and review is conducted for closure forming a closed-loop management system.international standards: it has obtained certification for GB/T 29490 "Intellectual Property Compliance Management Standards" and issued the In 2025 the company achieved significant R&D results carrying out a total of 465 product technology and process R&D projects throughout the

accompanying "Intellectual Property Management Manual" to facilitate the implementation of these standards. In December 2025 the company year with a target achievement rate of 93.4% successfully meeting the annual R&D goals.also obtained Level 3 evaluation certification for ISO 56005 "Innovation and Intellectual Property Management Capability " and certification for

ISO 56001 "Innovation Management Systems " This demonstrates the company's core orientation of standardizing innovation management with Indicator Unit 2025 2024 2023

international standards and continuously deepening innovation-driven development.R&D Investment Amount CNY 10000 53487.55 50259.26 43370.74

R&D Investment as a Percentage of Main Business Revenue % 4.10 3.96 3.81

R&D Personnel and Proportion People/ % 1428/11.31 1498/10.76 1242/10.46

Metrics Unit 2025 2024 2023

Invention patents applied to core business Items 460 392 354

Patent applications during the reporting period Items 705 887 692

Patents Granted During the Reporting Period Items 666 463 456

The company consistently upholds the core philosophy of "respecting others' intellectual property rights and protecting our own intellectual

Valid Patents at the End of the Reporting Period Items 3770 3049 2617

property rights." While strengthening the protection of our own inventions and creations we have established a comprehensive patent

early warning system to promptly monitor and analyze patent application trends within the industry thereby mitigating patent risks during Software copyrights at the end of Number 90 81 58

product development. Simultaneously we focus on enhancing the originality of product design and building a robust product patent the reporting period

layout system to further strengthen the core competitiveness of our products after they enter the market.Cases Specialized Training in Patent Mining

Data Security

In 2025 the company's Intellectual Property Department continued to organize specialized training in patent mining focusing on

integrating industry and competitor patent dynamics into the research and development process. This training guides technical Governance

personnel in analyzing technology trends identifying product patent risks and proactively uncovering patentable innovations. To

DunAn Environment has established a data security governance structure with clearly defined responsibilities and authorities. The

date 8 product lines have completed patent mining for 23 designs/products resulting in the layout of 156 patents. This effort has

preliminarily established a product-centric patent protection system. This achievement marks the company's transition from Information Management Module of the Process IT and Quality Center serves as the dedicated management department overseeing the

passive patent protection to proactive patent layout solidifying an intellectual property barrier for the protection of technological company's data and information security work and clarifying the territorial management responsibilities of each business department.innovation outcomes and the enhancement of market competitiveness.

71 722025 Environmental Social and Governance Report Responsible Operations

The company strictly complies with relevant laws and regulations such as the "Cybersecurity Law of the People's Republic of China" and Enhancing Data Security

the "Regulations on the Security Protection of Computer Information Systems of the People's Republic of China." It has established internal

In addition the company continuously strengthens data security management by implementing tiered and classified controls for top-secret

management systems including the "Network System Operation Management Regulations" "Network Information Security Management

confidential secret internal and public data building a multi-layered data security protection system to ensure data security and controllability.Regulations" "Management Measures for Instant Messaging Tools such as WeChat" and "Computer Room Management Measures." By

During the reporting period no data security-related incidents occurred. To benchmark against the Classified Protection 2.0 standards and

strengthening technical protection and management innovation the company comprehensively enhances its information security

enhance data security protection capabilities the company has developed specialized measures in three key areas —network boundary

assurance capabilities.protection encryption and permission management and internet usage regulation—continuously improving the security protection

Strategy system.Data security serves as the cornerstone of the company's digital transformation and smart manufacturing strategy. To support the goal of Key Areas Important Measures

"building an industry benchmark-level leading 'future factory'" the company plans to invest over a hundred million yuan in special funds Network Upgrade firewalls IDS/IPS and other equipment refine access control policies establish monitoring platforms to

over the next three years at its smart manufacturing headquarters base. The core of this strategy is to deeply integrate security capabilities BoundaryProtection prevent external intrusions and illegal data transmission

into the AI intelligent scheduling system digital twin platform and "5G+ Industrial Internet" scenarios. The aim is to transform security

Encryption and

from a cost center into a core competitive advantage and trust asset that drives business innovation and safeguards smart manufacturing Permission Implement full-process encryption for core sensitive data establish a hierarchical and classified permission system conduct

Management regular audits and clean up redundant permissions and set up an audit system to ensure traceability of operations

through leading-edge digital and security integration.Internet

Usage Establish online behavior guidelines deploy control devices to block violations and conduct security training to

Standards enhance employee compliance awareness

Impact Risk and Opportunity Management

The company has strengthened data security and cyber risk prevention and control actively cooperating with provincial municipal and

county-level network protection initiatives and continuously enhancing data security risk management. During the reporting period the Metrics and Targets

company proactively participated in cybersecurity attack and defense drills at various levels deepened collaboration with public security

cyber police departments and enhanced capabilities in risk identification emergency response and proactive defense. This has fortified Indicator Unit 2025 2024 2023

the security foundation for the stable operation of digital operations.Amount involved in data security incidents CNY 10000 0 0 0

Cases Deepening Cyber security Practical Drills

Amount involved in customer privacy breach incidents CNY 10000 0 0 0

In 2025 the company deepened its collaboration with the Cyber Police Brigades of

Shaoxing City and Zhuji City enhancing data security protection capabilities through the

"exchange + drill" model. Throughout the year the company successively joined the

Shaoxing City Cybersecurity Self-Governance Alliance and participated in the Shaoxing

City Cybersecurity Attack and Defense Drill as well as the Zhejiang Provincial "Zhijiang Employee Well-being

Cast Net" Provincial Attack and Defense Drill. During these drills the company conducted

practical exercises focusing on four key dimensions: technical hardening 7×24-hour

personnel monitoring emergency response drills and review and rectification Equality and Diversity

end-to-end risk management s. This comprehensive approach helped identify system

vulnerabilities and optimize security strategies. The series of drills effectively tested and The company adheres to the principles of people-oriented and equal respect strictly complies with relevant laws and regulations

improved the company's proactive cybersecurity defense capabilities providing a solid resolutely opposes any form of illegal employment and forced labor including the use of child labor and human trafficking and strictly

foundation for data security and digital operations. prohibits discriminatory behavior based on factors such as race ethnicity color ancestry religion political views social background

learning style gender household registration health status age height or language. It ensures that all employment practices are legal and

compliant respects and protects human rights and provides guarantees for the equality and safety of employees in the workplace.

73 742025 Environmental Social and Governance Report Responsible Operations

Overseas Operations Compliance

Indicator Unit 2025 2024 2023

DunAn Metals (Thailand) consistently prioritizes achieving efficient and inclusive cross- cultural communication in its overseas operations. It is

committed to safeguarding the rights and interests of overseas employees enhancing operational efficiency and promoting cultural Total number of employees People 12631 13921 11870

integration through systematic language support. By Gender

Male People 8319 8962 7861

Core information systems such as SAP have been localized and optimized. In addition to the original Female People 4312 4959 4009

At the system and Chinese and English interfaces Thai and Burmese language options have been added allowing employees

tool level to switch as needed to ensure smooth business processes. By Age

Under 30 People 3227 3965 3555

30 to 50 years old People 8140 8651 7322

In terms of All internal documents notices and management standards are officially released in both Chinese and Over 50 years old People 1264 1305 993

documentation and Thai. Various signs and guidance boards within the factory area uniformly use Thai English and Chinese to

visual communication ensure clear comprehensive and unambiguous information delivery. By Education Level

Proportion of College Degree and Above % 28.9 27.5 25.6

Master's Degree and Above People 183 163 127

At the Regular language training programs are organized to specifically enhance the foreign language application

capacity-building skills of overseas employees fundamentally supporting their development and breaking down communication Other

level barriers.Recruited Veterans People 169 126 91

Proportion of Recruited Veterans % 1.3 0.9 0.8

Cases DunAn Metals (Thailand) Hosts New Year Blessing Event to Promote Sino-Thai Cultural Integration

In January 2026 coinciding with the eve of the Chinese Lunar New Year

and the beginning of the Thai New Year DunAn Metals (Thailand) grandly

held a New Year blessing event themed "China and Thailand One Family Democratic Communication

Welcoming the Auspicious Dragon Year Together" to enhance the friendship

between Chinese and Thai employees and promote the cultures of both DunAn Environment regards employee democratic communication as a crucial cornerstone of corporate culture development establishing

countries. The event skillfully integrated traditional Chinese Spring diversified employee communication and feedback mechanisms to ensure that employees can conveniently and transparently express

Festival customs with local Thai blessing culture creating a strong festive their demands and safeguard their legitimate rights and interests. The company has built a systematic employee participation system:

atmosphere in a foreign land and showcasing the positive image of organizing specialized training sessions monthly holding employee forums quarterly and conducting team-building travel activities every

Chinese enterprises taking root sprouting and integrating overseas. six months. This creates a direct dialogue platform between management and employees ensuring that their opinions and demands are

fully heard and respected.Simultaneously the company conducts specialized surveys on employee engagement and satisfaction every six months to comprehensively

understand employee needs and experiences. In 2025 the engagement survey result was 8.5 points (out of 10) and the satisfaction survey

result was 7.28 points (out of 10). Based on the survey findings the company continuously optimizes management practices around

employee needs and development steadily enhancing employee satisfaction and well-being.

75 762025 Environmental Social and Governance Report Responsible Operations

Smooth Employee Grievance Mechanism Compensation and Incentives

The company has established standardized procedures for reporting investigation verification and feedback. Each reported case is DunAn Environment adheres to the implementation of the "Four High Principles" (high quality high responsibility high contribution high

assigned to a dedicated person for follow- up ensuring that every issue receives a response and is properly addressed. This enables every treatment) while establishing a competitive compensation system through methods such as job value assessment employee capability

employee and stakeholder to exercise their supervisory rights with peace of mind collectively fostering a clean and upright corporate inventory performance evaluation small-unit accounting innovation and development awards equity incentives and market salary

environment. benchmarking. This ensures that employees' compensation levels maintain a leading position and competitive advantage within the

The company has established a reward mechanism to provide appropriate incentives to whistleblowers who provide important leads region and industry. Simultaneously the company deeply advances the construction of an incentive system centered on "strivers producing

encouraging employees and stakeholders to report violations of business ethics. At the same time the company places emphasis on more and sharing more" fostering a community of shared interests between the company and all employees based on "shared understanding

whistleblower protection. The reporting channel platform is equipped with strict information encryption and anonymous processing shared responsibility shared creation and shared benefits" thereby stimulating employee vitality and cohesion.mechanisms to ensure that the personal information and content of whistleblowers receive the highest level of security protection

throughout the entire process. Whistleblowing materials are managed as confidential documents and retaliation against whistleblowers Cases Launch of Long-Term Equity Incentive Plan

is strictly prohibited. Once verified serious actions will be taken and in severe cases the matter will be referred to judicial authorities for To further establish and improve DunAn Environment's long-term incentive and restraint mechanism the company has formulated

handling and corresponding legal liability will be pursued. and implemented a long-term incentive plan. This aims to attract and retain outstanding talent within the company (including

subsidiaries) fully mobilize the enthusiasm of directors senior management middle management and core technical (business)

personnel effectively integrate the interests of shareholders the company and employees and encourage all parties to jointly

Compensation and Benefits focus on the company's long-term development.In 2025 the company launched the second phase of its long-term incentive plan namely the 2025 Restricted Stock and Stock

The company always prioritizes employee well-being and is committed to ensuring a happy life for employees by continuously improving Option Incentive Plan. A total of 10075000 restricted shares were granted to 365 eligible incentive recipients at a grant price of CNY

compensation and benefits enhancing the quality of life care and striving to create a warm and harmonious working environment. In 7.05 per share. Additionally a total of 4770000 stock options were granted to 44 eligible incentive recipients at an exercise price of

future development the company will continue to uphold the people-oriented philosophy continuously optimize and improve the CNY 14.10 per share.employee care and benefits system create a better working and living environment for employees and achieve mutual growth and

development for both the company and its employees.Benefits System Career Growth

DunAn Environment offers all full-time employees a comprehensive benefits package designed to foster a safe healthy secure and

supportive workplace. To build a talent pipeline that aligns closely with the company's development strategy and achieve dynamic optimization and efficiency

enhancement of the talent structure the company has progressively improved its employee training system and career advancement

Welfare System Specific Content pathways. To better achieve dynamic alignment between talent and business needs and fully activate the value of internal talent in 2025

the company conducted specialized talent inventory assessments for key positions. These assessments precisely evaluated the status of

Life Benefits Provide employees with free meals and accommodation. In particular couples are assigned single rooms core talent reserves and identified gaps in competency dimensions providing scientific support for talent selection development and

fully considering their living needs and ensuring they live comfortably and at ease.allocation decisions.During the scorching summer high-temperature subsidies are distributed to help employees cope with the Implementation of Talent InventorySeasonal Care

heat and ensure their work and living quality in high- temperature environments.DunAn Environment utilizes talent inventory as a core management tool to achieve dynamic alignment between talent and business

operations and to build a dynamic talent team. The company conducts comprehensive talent assessments by systematically evaluating

At significant career milestones such as 5 10 and 15 years of service commemorative gold coins of varying

Long-Term

grades are awarded to employees in recognition of their long-term dedication and contributions. In 2025 a employees' educational backgrounds performance competency qualities (based on an internal model comprising 7 primary competencies and

Service Incentives

total of 7.3023 million yuan worth of gold coins was distributed benefiting 1125 employees. 19 secondary competencies) and development potential employing methods such as 360-degree evaluations and the nine- box grid to

accurately identify and develop internal talent.An Employee Mutual Aid Fund has been established to provide timely financial assistance to employees and

their families in the event of emergencies or economic hardships helping them overcome difficulties together. In Based on the comprehensive talent map generated from the inventory the company has formulated targeted talent development plans. Family Support

2025 the fund supported 295 employees with a total expenditure of 2.2902 million yuan. In December 2025 the company completed an inventory of over 900 core personnel systematically assessed the health of talent pipelines

and future gaps across various business units and accordingly provided specialized development plans career advancement opportunities and

incentives for core backbone employees and high-potential talent ensuring that talent strategies effectively support business development.

77 782025 Environmental Social and Governance Report Responsible Operations

Empowerment for Growth and Development Target Groups Courses

To solidify the talent foundation the company has systematically established a training system tailored for professional backbone employees Stainless Steel and Corrosion in Engineering Error-Proofing and Fool- Proofing FMEA Application Prevention of

and potential talent. This system is divided into a reserve talent cultivation plan and a professional talent enhancement and advancement plan Technical Line Intellectual Property-Related Risk Points IPD etc.aiming to accelerate the professional growth and organizational integration of talent thereby providing solid and reliable talent support

for the company's sustained leadership in future development. Sales Line New Product and Product Knowledge Promotion etc.Talent Reserve Development Plan Manufacturing Cost management equipment efficiency improvement lean management 5S management and elimination of

Line eight major wastes on site internal operations sharing etc.From the Blue New Force program for grassroots technicians to the Three Eagles Development Plan and Business School Enhancement

Program for management personnel we systematically and hierarchically cultivate core managers and experts capable of meeting future Quality Line Basic statistical concepts measurement system analysis statistical process control hypothesis testing process capability analysis etc.challenges ensuring a continuous and high-quality supply of talent for key positions.Quality Process

Engineer Project Management Raw Material Studies SOP Fundamentals Six Sigma Series Courses etc.Development

Plan Target Audience Target Audience

Operations Line Operations Management Planning Management etc.Business School Senior Executives Systematic management courses such as EMBA Supply Chain Enhancement of Business Procurement Personnel CapabilitiesProcurement Game Management Strategies

Line Sharing of Supply Chain Management Practices etc.Finance Line Business Operations and Cost Management in Manufacturing Enterprises Understanding Enterprise Operation Logic from a Financial PerspectiveFinancial Management in Business Departments.Middle Management Reserve (In-service)

Senior Eagles Middle-level or Reserve Middle-level Human Human resource management for business departments job value assessment training as interviewers course

Development Program Resources Line design and development etc.EHS Line First aid certification training safety administrator certification training etc.Key Professional Business Personnel/Section Chief Level

Elite Eagles Section Chief or Key Personnel

Personnel Development Plan

Cases Manufacturing System Training Strengthens Production Management Capabilities

In December 2025 DunAn Environment organized a specialized training course for the

Junior Eagles Fresh University Graduates New Graduate Rapid Onboarding Program manufacturing system. The training invited outstanding internal management personnel

to deliver lectures. The quality head of the Zhuhai base integrating Gree's Perfect Quality

Model and Zero-Defect Culture guided participants to internalize quality awareness and

Employees (including interns and new graduates) primarily with associate achieve continuous improvement. The Vice President was also invited to share practical

or technical secondary school diplomas are selected from the frontline

workforce. They undergo a training model combining workshop practice experiences in decentralized management illustrating effective pathways to drive lean Blue Collar Frontline First-Line Managers course learning job rotation and mentorship and are developed towards

Fresh Forc improvement starting from cost control.(Vice President Lou Jiayang through sharing roles such as machine adjusters equipment maintenance production

management after-sales service basic quality control basic technology practical experiences in decentralized management analyzed effective pathways for

and basic process engineering.driving lean improvement starting from cost control.) This training systematically

enhanced the professional capabilities of the manufacturing system participants helping

Professional Talent Enhancement and Development Program to translate the training outcomes into the entire production process. It provided talent

support for the company's implementation of the "Craftsmanship and Intelligent Manufacturing"

Guided by the core principle of "Professional Excellence Empowering Business" the program focuses on systematically enhancing the

strategy and the improvement of production management efficiency.core professional capabilities and business collaboration efficiency of employees across all lines. Based on the unique responsibilities

competency models and future development needs of different functions —such as technology R&D marketing manufacturing opera-

tions quality management human resources financial management and supply chain management—different curriculum systems and

teaching methods are designed.

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Cases Senior Eagles Cultivation Program Strengthens Middle Management Capabilities Vocational Skills Development

The company is committed to establishing a vocational skills development system that covers all employees providing them with diverse

In August 2025 the third phase of DunAn Environment's Senior Eagles Cultivation Project

and tiered growth pathways.commenced at the Diankou Base. The project focuses on enhancing the comprehensive

management capabilities and professional competence of middle-level cadres helping For management personnel we clarify the promotion path for professional positions through technical level assessments and combine it

them tackle complex work challenges and support the organization's steady development. with knowledge competitions and professional skills competitions to promote learning through competition. This approach drives the

The curriculum is designed around a middle-level competency model covering modules deep integration of management practices and professional technical capabilities continuously enhancing their comprehensive

such as risk identification and control logical thinking and more. The first phase includes problem-solving abilities. For frontline employees we have established detailed skill level assessment guidelines (including the Welding

courses on "Internal Control Risk Identification and Management" "Problem Analysis and Technician Level Assessment Management Measures) categorizing by job type and level determining different skill-based salaries and

Resolution" and "EHS Management." This initiative is a key measure in the company's clearly outlining the career development ladder for skilled talent.talent pipeline development providing a platform for growth and exchange for The company adopts a "training practice and competition" development model organically integrating daily training on-the-job

middle-level managers. All courses will be completed in six phases over the next two years. practice and competitive showcases to foster a positive atmosphere of "competing learning striving and surpassing." This approach

stimulates the intrinsic motivation of all employees to learn techniques and delve into skills.Cases Quality and Process Engineer Training Program Conducts Supplier Visit Practices

Cases Human Resources Knowledge Competition Enhances Professional Competence

In November 2025 DunAn Environment organized technical personnel

and trainees from the Quality Process Engineer Training Program to visit its In November 2025 DunAn Environment organized a practical knowledge

core supplier Jintian Group for a tour. This activity was a key component competition on human resources. The competition conducted a

of the Quality Process Engineer Training Program focusing on the integration comprehensive assessment covering commonly used HR regulations

of theory and production practice. Participants visited the exhibition hall business knowledge and departmental rules and regulations

and the copper tube and copper bar production workshops gaining a incorporating professional question-answering and case defense

direct understanding of the entire copper material manufacturing process sessions. A total of 53 HR practitioners participated in the event with 6

and transforming abstract theories into concrete knowledge. This visit outstanding contestants advancing to the finals for defense. The

broadened the trainees' industry perspectives helping them accurately competition effectively enhanced the professional competence and

grasp technical parameters and enhance their ability to handle quality comprehensive performance capabilities of the HR team. The company

issues. will continue to carry out professional capacity-building activities to

solidify talent support for sustainable development.Indicators Unit 2025 2024 2023

Promotion and Performance Management

Training Person-Times People 29253 39980 33385

The company has established a three-track career development pathway—professional track management track and business track. This mechanism

Average Training Hours per Person Hours 3.9 6.2 5.9 breaks through the limitations of administrative promotion providing a favorable career development path for professionals and technical personnel.Training Coverage % 100 100 100 Senior professionals and technical personnel can enjoy compensation packages equivalent to those of senior management. For example the

evaluation levels in the technical track can range from "trainee technician" to "scientist" with the highest compensation for technical personnel

Training Investment CNY 10000 237.7 269.2 225.2 potentially surpassing that of the president level completely breaking away from the traditional single administrative development channel.Additionally different job levels are set within the same job grade. Even without a change in job grade an increase in job level is considered

Training Investment per Billion Yuan in Revenue CNY 10000 1.82 2.12 1.98

a promotion and comes with correspondingly better compensation.

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Professional Pathways Management Pathways Business Development Pathways Occupational Health Management Structure Diagram

DunAn Environment

EHS Management General Managers of

Department Each Business Unit

CEO

Scientist Vice - President Vice - President

Senior Expert Director Assistant to the President Occup盾at安ion环al境 Health Implementation Implementation of Specific Requirements

General Manager & Safety Planning Inspection & Assessment in Management SpecificationsExperienced Expert Deputy Director

Deputy General Manager

Expert Department Head

Department Head

Product Manage Deputy Department

Deputy Department Head Strategy

Intermediate Engineer Section Chief / Manager

The company prioritizes employee occupational health and safety adhering to the principle of "safety first prevention first and comprehensive

Key - level

management." It upholds a people-oriented approach utilizing systematic regular and all-staff management as key measures to

Professional Position

Three Career Pathways comprehensively safeguard the physical and mental health of employees and ensure workplace safety. This approach aims to prevent Assistant

safety and occupational health risks providing a solid foundation for the sustainable operation of the enterprise and the peace of mind of

employees at work.At the performance management level the company adopts a Balanced Scorecard framework for organizational performance management Impact Risk and Opportunity Management

which is cascaded down to departmental and individual performance to ensure the effective implementation of the company's strategic Occupational health and safety are the lifeline of an enterprise and the fundamental rights of employees. DunAn Environment consistently

goals. In terms of incentive schemes the company adheres to the transformation of smaller business units operating accounting and places the occupational health and safety of employees at the forefront striving to ensure their physical and mental well-being during

assessing independently by customer region and product. It enhances incentive schemes for various production lines marketing work and to prevent and protect them from harm caused by the occupational environment.technology and functional departments to further embed the concept of full-staff engagement in operations. Additionally the company

has launched an(its first) equity incentive plan aimed at motivating all employees and fostering creativity thereby injecting momentum Continuously conduct occupational health risk assessments to identify and control

into the company's long-term development. potential hazards in the working environment ensuring workplace safety.Risk Investigation

Health Protection Provide employees with standard-compliant labor protection equipment to ensure

safety in various working environments.Labor Protection

Governance

Regular comprehensive health check-ups are provided to employees with the

DunAn Environment enhances occupational health management. The company's EHS management department is responsible for the addition of cardiac health screening items. Increased investment has been

planning implementation inspection and assessment of occupational health and safety work. The general managers of each business made to promptly identify and prevent potential health risks.unit are responsible for implementing the specific requirements of management standards. At the institutional level the company has Health Check-ups

established core systems such as the "Labor Protection Equipment Management Measures" "Occupational Health and Safety Management Employees are organized to participate in first aid training and obtain relevant

Regulations" and "Environmental Occupational Health and Safety Monitoring and Measurement Management Regulations" providing certifications enhancing their emergency response capabilities. First aid equipment

standardized guidelines for various tasks. such as automated external defibrillators (AEDs) is deployed in the workplace to

First Aid Training ensure timely response in emergency situations.

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Cases Optimize factory lighting to reduce visual fatigue among employees Indicators and Targets

In May 2025 adhering to the principle of humanistic care and focusing on employee Indicator Unit 2025 2024 2023

occupational health and work experience the company systematically optimized the

lighting environment in the factory. Through professional measurement and data Work Safety Investment CNY 10000 673.79 677.80 824.40

analysis of illumination levels in various work areas scientifically designed

Work Safety Investment as % of Operating Revenue % 0.0517 0.05346 0.0724

high-efficiency and energy-saving LED industrial and mining lights were deployed

accordingly. Additionally 1500W high-brightness searchlights were used to Total Duration of Safety Training Hours 9958 17490.5 23423

enhance lighting in key areas. This renovation significantly improved lighting

uniformity and visual comfort effectively reducing visual fatigue among employees Average Duration of Safety Training per Person Hours 1.45 1.66 2.17

and alleviating eye discomfort caused by prolonged work.Work-related Injury Insurance Investment Amount CNY 10000 496.44 561.15 289.28

Work-related Injury Insurance Coverage Rate % 100 100 100

Occupational Health Management System Certification

Investment amount in work safety liability insurance CNY 10000 6.26 4.15 6.89

Sixteen companies under DunAn Environment including DunAn Hetian DunAn Machinery DunAn Electro-Mechanical DunAn Thermal

Technology and DunAn Vehicle Thermal Management have obtained occupational health management system certification systematically Coverage rate of work safety liability insurance % 27.28 30.00 29.41

implementing a people-oriented management philosophy.Occupational disease cases People- times 0 0 0

Work-related fatalities People- times 0 0 0

Work-related lost workdays Days 3343.00 3751.50 4344.50

Days Lost Due to Work-Related

Injuries per Billion in Revenue Days 26.65 29.59 38.17

Injury Rate per Million Work Hours % 1.51 1.96 2.17

Care and Support

Emergency Management

To systematically advance employee care and support initiatives DunAn Environment has established the labor union as the core driving

The company consistently prioritizes occupational health safety and production safety as key focuses of ESG management regularly entity building an institutionalized and standardized long-term working mechanism. The labor union strictly adheres to the organizational

conducting emergency drills that cover all factory areas and positions. In 2025 the company focused on conducting a series of practical structure and responsibility processes defined in the "Labor Union Management Standards" transforming specific tasks such as assistance

drills for high-risk scenarios such as heatstroke emergency response hazardous chemical leakage prevention and control fire safety work

and relief humanistic care and cultural and sports activities into sustainable and assessable standardized service projects. This ensures

at heights confined space operations and vehicle-related injuries. These drills comprehensively tested the feasibility of emergency plans

that care resources are precisely focused on employees' urgent needs and difficulties continuously improving service quality and

the availability of emergency supplies and the collaborative response capabilities of personnel.effectiveness. Consequently at the organizational level the labor union is solidly established as a trusted "Home for Employees."

Support for Employees in Difficulty

The company places great importance on supporting employees in difficulty by establishing a mutual aid fund. This fund focuses on urgent

situations such as sudden family hardships major illnesses and unexpected changes providing timely and precise assistance along with

financial relief. It effectively helps employees and their families facing difficulties to overcome challenges and navigate tough times together fully

leveraging the role of mutual aid and warm-hearted support. In 2025 the company's mutual aid fund disbursed a total of 2.2902 million

Heatstroke First Aid Drill Vehicle Injury Emergency Drill Fall-from-Height Emergency Drill Fire Evacuation Drill yuan benefiting 295 employees cumulatively.

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Indicator Unit 2025 2024 2023 Cases Industry-Enterprise Collaboration Harmonious Village Health Run

Employees Assisted People 295 285 207

In April 2025 the first "Industry-Enterprise Collaboration · Harmonious Rural Village"

Employee Assistance Investment Amount CNY 10000 229.02 224.91 191.29 health run in Diankou Town was held in Shibei Village with over 300 employees from

enterprises and institutions in the town participating. DunAn Environment organized a

Employees in Difficulty Assisted

per Billion Yuan of Revenue People 2.26 2.25 1.82 running team of more than 40 employees to enthusiastically take part. The team

members collaborated and competed fiercely along the 8- kilometer course with all

members successfully completing the race and achieving excellent results showcasing the

company's employees' positive resilient and determined spirit. Participating in local

Care for Female Employees cultural and sports activities not only reflects the company's commitment to employee care

The company consistently places high importance on safeguarding the rights and interests of female employees and providing humanistic enriching their leisure lives and safeguarding their physical and mental health but also

care. It enhances the care service system for female employees offering a series of warm-hearted services focused on physical and mental enhances enterprise-local integration and contributes to the construction of harmonious

health rights protection family support and career development effectively enhancing their sense of belonging and well-being. On March rural villages.

8 2025 the company meticulously organized a themed commemorative event for International Women's Day paying tribute to the

strength of women and conveying organizational care through fun activities and warm-hearted gestures. Additionally on August 1 2025

the company organized free HPV screening services for female employees safeguarding their health. These practical measures demonstrate the

company's respect care and sense of responsibility toward female employees. Cases "Building Dreams on a New Basketball Journey" Basketball Tournament

Cases "Spring Breeze for Miles Graceful as You" Women's Day Event In September 2025 the "Building Dreams on a New Basketball Journey " DunAn Environment

Cup Basketball Tournament concluded successfully at the DunAn Garden Court. As a key

initiative for employee care and corporate culture development the event provided a

On March 8 2025 DunAn Environment organized a series of activities including platform for staff to communicate and showcase their talents. It highlighted the united

"Going to the Grassroots Saluting Women in Their Prime" and "Entering the Farm striving and positive spirit of the employees conveyed the collaborative and progressive

Enjoying Spring Outings and Flower Appreciation." The company thoughtfully ethos of sports strengthened team cohesion and enriched the spiritual and cultural lives of

prepared flowers for all female employees personally delivering greetings and the staff.gratitude allowing female colleagues to feel respect and warmth in their work. At the

same time leisure outdoor activities were organized enabling employees to enjoy

spring outings appreciate flowers relax and relieve stress. These activities not only

Cases "Carbon Trailblazer" Green Field Hiking Activity

enhanced team cohesion but also strengthened employees' sense of belonging.In September 2025 DunAn Environment organized the "Carbon Trailblazer" Green Field Hiking Activity held simultaneously at

Yuhuang Mountain and Jiuxi as part of the company’s 8th-anniversary celebration series. The activity integrated litter cleanup

environmental protection promotion and the distribution of initiative cards to advocate low-carbon concepts. Over 140 employees

from the Diankou and Zhuji factory areas participated with more than 20 support team members ensuring safety throughout the

Diverse Employee Activities event. By incorporating ecological and environmental protection into the corporate culture the activity enriched employees’ leisure

In 2025 the company organized diverse employee activities centered around cultural and sports entertainment team cohesion interest lives enhanced team cohesion and actively fulfilled the company’s social contribution for sustainable development.expansion and holiday care including holiday celebrations cultural and sports competitions and outdoor team-building events. These

activities enriched employees' cultural and recreational lives fostered a positive united and harmonious work atmosphere effectively

enhanced team cohesion and employees' sense of belonging and further strengthened the company's centripetal force and cultural

vitality.

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Cases "Chasing Light Celebrating Achievements" Garden Party Event Dimensions Management Requirements for Suppliers

From September 22 to 25 2025 the company held a series of garden parties as part of its

anniversary celebrations simultaneously taking place at the three major factory sites: Comply with all applicable environmental regulations to ensure compliant operations

DunAn Hetian DunAn Vehicle Thermal Management and DunAn Electro-Mechanical. The

Environment (E) Implement specific measures to manage pollutant emissions reduce energy consumption and minimize

activities combined professionalism fun and commemorative elements providing a resource waste

platform for all employees to relax interact and share. This event enriched the Promote circular economy practices such as waste recycling and resource utilization

employees' cultural and recreational life alleviated work pressure further enhanced

team cohesion and employees' sense of belonging and in an innovative way paid

Safeguarding the legitimate rights and interests of employees providing a safe and healthy working

tribute to the company's 38-year development journey conveying corporate warmth and environment prohibiting the use of child labor and forced labor

uniting all employees in their collective efforts.Social (S) Establishing fair employment compensation and promotion systems prohibiting discrimination

Respecting and protecting intellectual property rights engaging in fair competition

Proactively managing the social and environmental risks within the supply chain

Cases "Gathering in Light Uniting as One Team" Open-Air Movie Screening Event

In December 2025 DunAn Environment organized an open-air movie screening event Establish business ethics and codes of conduct and publicly disclose social contribution commitments

titled "Gathering Hearts Through Light and Shadow Building Teams Together." Set up clear management bodies or responsibilities to promote ESG initiativesGovernance (G)

Employees and their families were invited to watch an outstanding domestic animated Develop and implement anti-corruption and anti-bribery policies along with internal whistle blowing mechanisms

film experiencing the collision of traditional culture with heartfelt warmth. During the Incorporate ESG-related performance into internal management and assessment indicators

event special snacks were provided creating a relaxed and harmonious cinematic

atmosphere. This activity enriched the spiritual and cultural lives of employees and

their families enhanced family warmth and team cohesion and contributed to the

inheritance of China's excellent traditional culture. Indicators Unit 2025 2024 2023

Total number of suppliers assessed Number 285 287 230

Suppliers undergoing social impact assessment Number 85 73 60

Suppliers Conducting Environmental Impact Assessments Number 85 73 60

Supply Security

Supplier Management Strategy

Sustainable Supply Chain DunAn Environment has established a systematic full-lifecycle supplier management system. This strategy is based on precise development

linked by strategic win-win cooperation driven by dynamic assessment and safeguarded by risk prevention and control. It runs throughout the

We firmly oppose inappropriate practices such as child labor excessive working hours and forced labor and are committed to building a entire supplier collaboration process aiming to build a safe stable and sustainable supply chain providing solid support for the company's

responsible supply chain. DunAn Environment extends the concepts of sustainability and responsible governance comprehensively to the sustainable growth.supply chain striving to establish a sustainable partner ecosystem. We not only regularly assess suppliers' environmental performance

urging them to comply with regulations and reduce pollution and resource waste but also actively promote green innovation collaborations.Together we develop solutions such as renewable resource utilization energy-saving equipment and recyclable packaging. At a broader

ESG management level we sign the "Supplier Code of Conduct" with our suppliers clarifying their responsibilities in areas such as

business ethics labor rights safety and health and environmental protection. Additionally we conduct systematic ESG evaluations

through the "Supplier Social Contribution Questionnaire" continuously driving improvements in supply chain accountability and jointly

strengthening the foundation for a sustainable value chain.

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Cases Enhancing Quality Management Philosophy Co-creating Green Suppliers

To ensure the quality of supplier collaboration and meet sustainable development

requirements the following access qualification review standards have been established: In June 2025 DunAn Environment held a supplier guidance meeting at its Diankou base focusing on three major themes: quality

Possess independent legal entity status with advanced and reasonable product process management upgrades green supply chain co-construction and market trend analysis. Through concept promotion pathway

technology and complete production testing and experimental equipment. discussions and case studies the meeting aimed to drive suppliers to optimize management processes implement environmental

Pass ISO9001 and ISO14001 system certifications from third-party certification bodies and protection measures and proactively plan for market changes. The goal was to enhance collaborative efficiency improve overall

comply with RoHS and REACH management standard requirements.competitiveness and achieve mutual benefits and win-win outcomes for both the company and its supplier s in sustainable development.Provide environmental compliance-related materials which are necessary conditions for access.Access Review

The production operation and financial status are good with significant price advantages and

potential for healthy development.Enterprise managers and employees possess a strong quality mindset and awareness of quality

improvement.The company implements a full-cycle closed-loop management mechanism for external

procurement and outsourcing suppliers based on the "Supplier Performance Management

Measures" and "Supplier Performance Evaluation Rules."

1. Standardized Evaluation and Multi-Dimensional Control

Basis: Strictly adhere to the company's management measures and evaluation rules.Dimensions: Conduct comprehensive quantitative evaluations regularly across five core dimensions: Indicator Unit 2025 2024 2023

cost delivery quality technology and service.

2. Goal-Oriented Disqualified Suppliers Eliminated Number 17 21 15

Encourage suppliers to enhance ensuring high-quality products reasonable prices and high Significant risk and impact

Assessment and cost-effectiveness thereby achieving overall optimization of the supply chain. events in the supply chain

Number 0 0 0

evaluation 3. Result Application and Tiered Disposition (Closed-Loop Mechanism)

Outstanding Performers (Incentives): Provide more cooperation opportunities and preferential

policies. Conflict minerals management

Questioner (Coaching): Communicate promptly assist in developing rectification plans set During the supplier qualification review stage DunAn Environment has comprehensively strengthened its conflict minerals control

deadlines and continuously track progress. mechanism by formulating a procurement statement that prohibits the use of conflict minerals. All potential suppliers are required to

Non-compliant (Elimination): For those who fail to rectify effectively or consistently fall short of

formally sign and submit the "Declaration on Non-Use of Conflict Minerals" to commit to their supply chain compliance. Simultaneously

standards implement measures such as order reduction suspension of cooperation or elimination.in-depth due diligence is conducted by having suppliers complete a detailed "Conflict Minerals Questionnaire" to trace the origin of minerals and

their smelting pathways ensuring the identification and blocking of minerals from conflict regions at the source. This approach institutionalizes

compliance checks and moves them to the forefront.

1. Performance-Based Elimination Mechanism (Quantitative Standards).

Trigger Condition: Two consecutive quarters with a comprehensive performance score below 60

points (i.e. rated as D-level).Disposal Measures: Immediately cancel the supply quota for the next quarter and terminate the

cooperation qualification.

2. Permanent Blacklist Ban Mechanism (Code of Conduct)

Basis: "Supplier Blacklist Management Measures."

Exit Mechanism Triggering Behavior: Existence of illegal non-compliant contractual breach dishonesty or severe

failure to perform obligations.Identification Process: Initiated upon supplier application for investigation or upon company

verification and confirmation.Disciplinary Measures: Inclusion in the blacklist and permanent revocation of supply qualification.

91 922025 Environmental Social and Governance Report Responsible Operations

Supplier Empowerment Training At the operational level the company strictly evaluates the financial health of suppliers during the supplier qualification process ensuring

DunAn Environment is committed to building a "symbiotic and win-win" supply chain ecosystem comprehensively supporting supplier they have sufficient cash flow reasonable debt-to-asset ratios and stable profitability. This effectively prevents supply disruptions or

growth through three core pillars: digital empowerment technical collaboration and capacity building. On one hand leveraging product quality issues caused by poor supplier operations safeguarding the continuity and stability of the company's production and

intelligent platforms to break down information barriers enables shared demand forecasting and automated business processes reducing operations.operational costs for partners. On the other hand in-depth specialized training and on-site guidance are provided covering areas such as Digital Management

zero-defect management green manufacturing and compliance operations. This disseminates industry standards and management best

In 2025 the company comprehensively deepened its digital supply chain management system by successfully launching the SRM online

practices while offering supply chain financial support and joint innovation mechanisms. These efforts help suppliers enhance their core

bidding platform. Through open fair and transparent bidding rules and full-process data traceability human intervention factors were

competitiveness and risk resilience transforming them from mere delivery partners into trusted strategic collaborators.completely eliminated ensuring fairness and transparency in procurement competition. Additionally the company issued a supplier data

In 2025 we comprehensively upgraded our supplier empowerment system deeply integrating the "zero-defect" quality philosophy into

protection statement strictly defining the boundaries of data collection and committing to never misuse or disclose suppliers' core

partner growth plans. Throughout the year we focused on organizing and conducting comprehensive zero-defect management training

business data to third parties thereby safeguarding the legitimate rights and interests of partners with a robust digital security barrier.for suppliers. Through systematic methodology introduction Cases reviews and practical exercises we assisted supplier s in identifying

quality risks at the source optimizing process controls and building preventive quality management systems.Cases Driving Supply Chain Digital Collaboration and Efficiency Enhancement with the SRM System

Cases Supplier Zero Defect Project Empowerment

In July 2025 DunAn Environment held a project summary meeting for its SRM system.In June 2025 DunAn Environment conducted a training session on the zero-defect This project focused on sustainable supply chain management and the implementation

concept for supplier s in the first half of the year. A total of 138 representatives from 116 of ESG governance principles utilizing digital means to optimize procurement and

core suppliers participated on-site while over 80 suppliers joined the training online. quality control. Specifically procurement management achieved online sourcing and

The session was led by the executive team leader of DunAn Environment's Zero Defect supplier bidding reducing the inquiry cycle by 40% lowering procurement costs and

Group who focused on explaining the core principles implementation methods and enabling seamless integration with internal BPM and SAP systems. Quality management

application cases of the zero-defect concept. The training emphasized the four core established a foundational model for supplier quality lifecycle management digitizing

principles of zero-defect management and provided practical guidance for suppliers

related business processes promoting the transition from paper-based data to information

based on the company's experience. This initiative established a platform for communication

systems strengthening supplier compliance control and ensuring supply chain quality

and learning between the company and its suppliers strengthened quality awareness and

collaboration and laid the foundation for deepening the practice of the zero-defect safety and sustainability.concept and jointly improving supply chain quality.Indicator Unit 2025 2024 2023

Equal Treatment of Small and Medium-sized Enterprises

Annual supplier training sessions conducted Sessions 4 1 2

DunAn Environment actively fulfills its corporate social contribution and is committed to building an equal and mutually beneficial supply

Participants organized for supplier training People-times 238 68 70 chain ecosystem. The company establishes fair and transparent procurement mechanisms strictly implements the "Quota Management

Measures" and "Supply Chain Performance Management Measures" and provides equal market participation opportunities for small and

medium-sized enterprises (SMEs). Specific measures include lowering procurement thresholds simplifying approval processes and

Supplier Risk Management reducing barriers for SME participation; establishing long-term and stable strategic partnerships offering technical support and professional

DunAn Environment has established a supply chain risk management system centered on legal compliance and operational stability. training to help SMEs enhance their core competitiveness. Furthermore we consistently adhere to the "Three Guarantees" principle:

Through a dual control mechanism of legal and operational oversight the company achieves proactive prevention and dynamic supervision ensuring lawful and compliant operations ensuring timely delivery of quality products in specified quantities and ensuring payments are

significantly enhancing the supply chain's risk resilience. made as agreed thereby fostering a healthy and sustainable development environment for SMEs.At the legal level the company signs a "Basic Supply Agreement" with all qualified suppliers focusing on the legal compliance of suppliers

to prevent illegal activities such as contract fraud intellectual property infringement and commercial bribery. Suppliers that may cause

legal disputes economic compensation or reputational damage are placed on a non-cooperation list.

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Participation in Standard Setting

Indicator Unit 2025 2024 2023

DunAn Environment actively participates in the formulation and revision of national and industry standards. In 2025 the company led the

Balance of accounts payable (including notes payable)

at the end of the reporting period CNY 1000 352856.89 389118.38 334616.72 development of the industry standard "Stainless Steel Refrigerant Piping Components for Refrigeration Systems and Heat Pumps" and

undertook the revision of the industry standard "Four-Way Electromagnetic Reversing Valves for Heat Pumps."

The proportion of accounts payable (including notes payable)

balance to total assets at the end of the reporting period % 28.71 32.02 31.03 As of 2025 the company has cumulatively led or participated in the drafting and revision of 104 national and industry standards serving as

Amount of overdue unpaid payments the primary drafting unit for 20 of them. Due to its outstanding performance in standard innovation and technological research and

at the end of the reporting period CNY 1000 0 0 0 development the company has received two "China Innovation Contribution Awards" and has also been honored with multiple accolades

Amount of overdue unpaid payments to small and CNY 1000 0 0 0 including the "National Quality Award" "National Innovation Pilot Enterprise" "Second Prize of the National Science and Technology medium-sized enterprises at the end of the reporting period

Progress Award" and "China Patent Excellence Award."

Cases Leading the formulation and revision of two refrigeration and air conditioning industry standards

On May 23 2025 DunAn Environment hosted the working meetings for the formulation

of two industry standards: JB/T "Four-Way Electromagnetic Reversing Valves for Heat

Pumps" and JB/T "Stainless Steel Refrigerant Piping Components for and Refrigeration

Social Contribution Systems and Heat Pumps." The focus was on the technological upgrading of core

heat pump components and the innovation of copper-alternative materials. The

revision and formulation of these two standards can promote domestic components

Industrial Development to benchmark against international standards achieving full-chain autonomy and

control from materials to components. At the same time by replacing copper pipes

As a leading chain enterprise in the industry DunAn Environment takes on its responsibility to drive industrial development through capacity with stainless steel the pressure on copper resources can be alleviated energy efficiency can be improved and the safety and

layout and technological innovation. controllability of the industrial chain as well as the sustainable use of resources can be supported.Beyond building its own manufacturing network the Company leverages its role as a leading company in the industry to promote the

coordinated upgrading and green transformation of the regional industrial chain.Promoting Industry Communication

Collaborative Construction of Overseas Industrial Chains In 2025 the company deeply participated in industry-wide exchange activities in the fields of refrigeration air conditioning heat pumps

and thermal management. It actively collaborated with upstream and downstream enterprises research institutes and industry associations

The company uses its new base in Thailand as a pivot to proactively plan the regional supply chain ecosystem. In 2025 upon the opening engaging in multi-dimensional dialogues around core topics such as technological innovation green and low-carbon development and

of the thermal heat exchanger and automotive thermal management base the company immediately convened core suppliers to discuss talent cultivation. This continuously expanded the boundaries of industrial cooperation and strengthened the foundation for synergistic

localized support. The aim is to guide upstream partners to establish nearby operations shorten logistics distances reduce carbon development within the industry ecosystem.emissions across the entire chain and thereby create a more efficient and resilient localized supply network driving the joint development

of the upstream and downstream industrial chain in Southeast Asia. Cases HVAC Industry Exchanges at Home and Abroad

In 2025 the company actively participated in global industrial exchanges in the

Green Technology Empowers the Industrial Chain HVAC&R and new energy thermal management sectors showcasing at exhibitions

including the ACREX India CR Expo FrioCal Brazil ATC New Energy Vehicle

The company leverages its core products to support the low-carbon transformation of downstream industries. DunAn Electro-Mechanical Thermal Management Technology Exhibition CBEE China Commodities International

as a key thermal management partner for NIO's battery swap stations has applied its liquid cooling technology to thousands of swap Trade Fair and IAA Mobility Germany. These engagements targeted markets in

stations nationwide. Both parties plan to deepen cooperation in next-generation battery swap stations ultra-fast charging and integrated South Asia China Latin America and Europe where the company presented its

energy storage scenarios using innovative thermal management solutions to empower NIO in building a more reliable green energy green refrigeration technologies and low-carbon solutions while sharing sustainable

replenishment network thereby promoting sustainable development in the transportation sector at the end-use application stage. development practices. By deepening technical collaboration aligning standards

and promoting low-carbon concepts the company continues to expand global

industrial cooperation supporting high-quality synergistic development within the industry and enhancing its international brand

influence and competitiveness in sustainability.

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Cases Supporting Industry Talent Development Promoting Overseas Exchange

In November 2025 at the National Annual Conference of the Refrigeration and Air The company regularly organizes multicultural exchange activities by planning theme celebrations and special holiday care events that

Conditioning Industry the company in collaboration with the China Refrigeration and involve all employees. This allows Chinese and foreign staff to enhance emotional bonds through mutual blessings and experiencing folk

Air Conditioning Industry Association officially launched the "Mastering the Core: customs.Experts on Heating and Cooling" project. This initiative brings together authoritative

industry experts to create popular science short videos on refrigeration technology Cases DunAn Metals (Thailand): Celebrating Thai Lunar New Year Together

through intuitive animations and systematic knowledge content. At the event the

company donated the first batch of teaching aids to multiple universities and research In April 2025 coinciding with the traditional Thai New Year Songkran

institutions including Tsinghua University and Zhejiang University fostering collaborative DunAn Metals (Thailand) held solemn ceremonies of "Bathing the

innovation between industry academia and research. The project effectively supports Buddha" and "Sprinkling Water to Bless Elders" to respect local cultural

the cultivation of technical talent in the industry deepens university-enterprise cooperation customs and enhance emotional integration between Chinese and Thai

and technology dissemination provides talent support and innovation momentum for employees. Management from both Chinese and Thai sides dressed in

the sustainable growth of the industry and fulfills corporate social contribution. floral shirts received water-sprinkling blessings from younger employees

in turn. Chinese and Thai staff gathered together welcoming the arrival of

the Buddhist year 2568 amidst splashing water and joyful laughter

composing a harmonious and integrated symphony of friendship.Globalization and Local Operations

DunAn Environment adheres to the coordinated development of global expansion and localized operations deeply integrating into local

development. The company attracts outstanding local talent through diverse channels providing abundant and well-matched employment

opportunities for the region. This effectively promotes regional employment enhances residents' income and quality of life and actively Tax Contributions

fulfills social responsibilities while maintaining stable operations contributing to the development of local society and people's

livelihoods. Honest tax payment is a crucial guarantee for the healthy and long-term development of an enterprise. The company enhances relevant

rules and regulations clarifies key tax-related points such as invoice compliance tax obligations and liability and monitors and compares

Indicator Unit 2025 2024 2023 data information in critical areas including supplier qualification contract execution and invoice approval achieving full-process Risk

Local employees (referring to the local city) Management. For higher-risk areas such as export tax rebates and related-party transaction pricing the company implements closed-loop

[based on registered residence location] People 3945 4508 3518 management of tax-related matters from business initiation to account closure.Proportion of local employees (referring to the local city) % 30.9 32.4 29.6 The company has consistently received an A-grade rating in tax credit evaluations. Over the past three years it has been recognized as an [based on registered residence location] "Outstanding Contribution Enterprise for Sustainable Growth " in Zhuji City and ranked among the "Top 30 Tax-Contributing Private Enterprises

Employing foreign employees People 1237 1600 817 in Shaoxing in 2024" by the Shaoxing Municipal Taxation Bureau of the State Taxation Administration and the Shaoxing Federation of Industry and

Commerce in recognition of its outstanding contributions to honest tax payment and local economic development. In 2025 the total taxes and

Percentage of Foreign Employees % 9.8 11.5 6.9 fees declared and paid in Shaoxing amounted to 510.1353 million yuan representing a year-on-year increase of 3.93%.Smooth Overseas Promotion Indicator Unit 2025 2024 2023

DunAn Environment focuses on localized development overseas improving the career advancement system for foreign employees. The

Tax Payment Amount CNY10000 51013.53 49084.54 44816.85

promotion mechanism for（ foreign）employees to management positions adopts a "recommendation + competitive selection" approach.For example at DunAn Metals (Thailand) the management structure explicitly requires that Thai managers at the section chief level and

above account for no less than 35% of the total number of personnel at that level. As the localization process accelerates this proportion

continues to be optimized and increased. Frontline grassroots management has been fully localized including the training of skilled

employees and the development of grassroots teams.

97 982025 Environmental Social and Governance Report Key Performance Table

Key Performance Table

Public Welfare and Charity Greenhouse Gas Emissions

Indicator Unit 2025 2024 2023

DunAn Environment actively engages in public welfare and charity work focusing on assistance and support as its core direction. It places

particular emphasis on aiding the elderly alleviating poverty and supporting education addressing the most practical urgent and fundamental Scope 1 tCO2e 16164.76 17449.77 16152.22

needs of disadvantaged groups. Through precise identification timely assistance and compassionate relief the company provides essential

support such as basic living security medical aid and temporary help to those in need. This continuous effort helps secure the baseline of Scope 2 tCO2e 52684.37 51263.15 41090.18

people's livelihoods conveys social warmth and enhances the sense of fulfillment security and happiness among disadvantaged individuals. Total emissions tCO2e 68849.13 68712.93 57242.4

In 2025 DunAn Environment extended New Year greetings and blessings to 1009 individuals aged 70 and above 29 households facing

difficulties and 2 households in extreme poverty. Additionally the company has cumulatively provided financial support to 30 high school

Energy

students and 230 university students.Indicator Unit 2025 2024 2023

Cases Fostering Talent with Love Realizing University Dreams Together Basic Information on Energy Usage1

Total Energy Consumption tce 27987.45 27932.08 23269.27

In August 2025 the "Love Helps Talent Together Realizing the University Dream"

Including: By Energy Type

student aid ceremony was successfully held at the Zhuji Municipal Committee of

Coal Tonnes 0 0 0

Retired Cadres. DunAn Environment has been carrying out student aid actions for

Gasoline Liters 0 0 0

families in difficulty for 21 consecutive years. With the assistance of the Zhuji

Diesel Liters 286904 43940 237331

Municipal Committee for Caring for the Next Generation a total of 30 high school

Natural Gas m3 4139705 4735157 4218085

students and 230 university students have been supported to complete their

studies. Through practical actions the company fulfills its social contribution Liquefied Petroleum Gas m3 177251 184149 165170

promoting educational equity and local talent cultivation. Non-Renewable Electricity Purchased 10000 kWh 17425.882 16955.802 13590.987

Renewable Electricity Procurement 10000 kWh 0 0 0

Renewable Electricity Proportion % 0 0 0

Direct Energy Consumption tce 6571.04 7093.40 6565.94

Cases Warming the Year's End Extending Holiday Greetings Total indirect energy consumption tce 21416.41 20838.68 16703.32

Energy use intensity Tce/unit 0.033 0.032 0.030

On the Laba Festival and the eve of the Chinese New Year in 2025 DunAn (e.g. per unit of output)

Clean energy usage 2

Environment carried out a care and poverty alleviation visit activity delivering

Total Clean Energy Consumption

holiday greetings and blessings to 1009 elderly individuals aged 70 and above MWh 12953.92 11995.00 11797.55

Proportion of Total Installed

29 households facing difficulties and 2 households in extreme poverty. The Clean Energy Capacity % 100 100 100

company has consistently conducted such public welfare activities for 28 Breakdown by Energy Type:

consecutive years actively fulfilling its social responsibilities promoting the Photovoltaic Power Generation 10000 kWh 1295.392 1199.500 1179.755

Proportion of Photovoltaic

fine tradition of respecting the elderly and aiding the needy and genuinely Power Generation % 6.92 6.61 7.99

caring for the livelihood security of vulnerable groups. Natural Gas m3 4139705 4735157 4218085

Natural gas proportion % 19.67 22.55 24.11

Wind energy MWh 0 0 0

Wind Energy Proportion % 0 0 0

Indicator Unit 2025 2024 2023

Amount of Public Welfare and Charitable Donations CNY 10000 41.83 44.79 40.36 Note 1：The statistical scope of the above energy data includes DunAn Hetian DunAn Machinery DunAn Thermal Technology DunAn Electro-Mechanical

DunAn Vehicle Thermal Management Zhuhai Huayu and Wuhu Zhongyuan.Community public welfare investment

CNY 10000 0.32 0.35 0.36 Note 2：The statistical scope of the above clean energy data includes DunAn Hetian DunAn Machinery DunAn Thermal Engineering DunAn Electro-Mechanical per 100 millions revenue DunAn Vehicle Thermal Management Zhuhai Huayu and Wuhu Zhongyuan.

99 1002025 Environmental Social and Governance Report Key Performance Table

Water Resources Waste water

Indicator 3 Unit 2025 2024 2023 Indicator 6 Unit 2025 2024 2023

Water Withdrawal 10000 tonnes 86.307 96.771 84.194 Total Industrial Wastewater m3 158961.16 197262.63 155794.03

Drainage volume 10000 tonnes 27.611 35.146 30.840 Total Domestic Wastewater m3 60431 52400 55370

Water consumption 10000 tonnes 58.696 61.625 53.354 Chemical Oxygen Demand (COD) Tonnes 3.9239 6.1542 5.5207

Recycled water usage Tonnes 14231959 12631213 9559298 Ammonia Nitrogen (NH3-N) Tonnes 0.048 0.125 0.063

Recycled water ratio % 94.28 92.88 91.91 Total Nitrogen (TN) Tonnes 1.5087 1.427 1.4362

Note 3：The statistical scope of water resource-related data includes DunAn Hetian DunAn Machinery DunAn Thermal Technology DunAn Total Phosphorus (TP) Tonnes 0.0153 0.0443 0.0321

Electro-Mechanical DunAn Vehicle Thermal Management Zhuhai Huayu and Wuhu Zhongyuan.Note 6：The statistical scope of the above wastewater-related data includes DunAn Hetian DunAn Machinery and DunAn Electro-Mechanical.Recycling

Exhaust Gas

Indicator 4 Unit 2025 2024 2023

Indicator 7 Unit 2025 2024 2023

Total Waste Recycled Tonnes 19752.36 17910.89 17748.94

Particulate Matter (PM) Kg 5913.9 4504.4 /

Waste Recycling Rate % 96.52 95.36 95.89

Sulfur Oxides (SOx) Kg 747.5 796.7 753.0

Note 4：The statistical scope of the above waste recycling-related data includes DunAn Hetian DunAn Machinery DunAn Thermal Technology

DunAn Electro-Mechanical and DunAn Vehicle Thermal Management. Nitrogen Oxides (NOx) Kg 4391.5 4621.5 4319.9

Volatile Organic Compounds (VOCs) Kg 5053.6 5635.2 4173.7

Environmental Compliance

Note 7：The statistical scope of the above exhaust gas-related data includes DunAn Hetian DunAn Machinery DunAn Thermal Technology

Indicator 5 Unit 2025 2024 2023 DunAn Electro-Mechanical and DunAn Vehicle Thermal Management.Environmental Protection Investment CNY 10000 665.25 687.39 676.84 Waste

8

Environmental Pollution Incidents Cases 0 0 0 Indicator Unit 2025 2024 2023

Environmental Pollution Penalty Amount CNY 10000 0 0 0 Total Waste Generation Tonnes 19752.36 19123.24 17748.94

Total amount of non- hazardous solid waste Tonnes 19064.54 18252.68 17020.8

Note 5：The statistical scope of the above environmental compliance-related data includes DunAn Hetian DunAn Machinery DunAn Thermal

Technology DunAn Electro-Mechanical and DunAn Vehicle Thermal Management. Non-hazardous solid waste intensity Tonnes/CNY10000 0.0276 0.0235 0.0238

Total hazardous waste Tonnes 687.82 870.55 728.14

Hazardous waste intensity Tonnes/CNY10000 0.00096 0.00112 0.00102

Total amount of hazardous waste

generatedper billion yuan of revenue Tonnes 9.12 / /

Note 8: The statistical scope of the above waste-related data includes DunAn Hetian DunAn Machinery DunAn Thermal Technology

DunAn Electro-Mechanical and DunAn Vehicle Thermal Management.

101 1022025 Environmental Social and Governance Report Key Performance Table

Biodiversity Employee Training and Development

Indicator 9 Unit 2025 2024 2023 Indicators Unit 2025 2024 2023

ECRL-related Incidents in Operations Cases 0 0 0 Training Person-Times People 29253 39980 33385

Ecological Governance Investment

Funds CNY 10000 20.45 20.45 25.50 Average Training Hours per Person Hours 3.9 6.2 5.9

Greening Area Hectare 4.18 4.18 4.99 Training Coverage % 100 100 100

Green Space Ratio % 11.47 11.47 13.69 Training Investment CNY 10000 237.7 269.2 225.2

Training Investment per Billion

Note9:The above biodiversity-related data statistics include DunAn Hetian DunAn Thermal Technology and DunAn Electro-Me- Yuan in Revenue CNY 10000 1.82 2.12 1.98

chanical.Product Quality and Customer Service

Employee Structure

Indicator Unit 2025 2024 2023 Indicators Unit 2025 2024 2023

Violations of product and service

information and labeling regulations Cases 0 0 0 Total number of employees People 12631 13921 11870

Customer satisfaction Points 94.11 93.27 92.27 By gender

Customer Complaints Male People 8319 8962 7861Times 0 0 0

Customer Complaints per Female People 4312 4959 4009

Billion in Revenue Times 0 0 0

By Age

R&D Innovation Under 30 People 3227 3965 3555

Indicator Unit 2025 2024 2023 30 to 50 People 8140 8651 7322

Over 50 years old People 1264 1305 993

R&D Investment Amount CNY 10000 53487.55 50259.26 43370.74

By educational background

R&D Investment as a Percentage of

Main Business Revenue % 4.10 3.96 3.81 Proportion of college degree or above % 28.9 27.5 25.6

R&D Personnel and Proportion People/ % 1428/11.31 1498/10.76 1242/10.46 Master's degree or above People 183 163 127

Invention Patents

Applied to Core Business Items 460 392 354 Others

Patent applications Recruited Veterans and

during the reporting period Items 705 887 692 Demobilized Soldiers People 169 126 91

Patents granted Proportion of Recruited Veterans % 1.3 0.9 0.8

during the reporting period Items 666 463 456 and Demobilized Soldiers

Valid Patents at the

End of the Reporting Period Items 3770 3049 2617

Software copyrights at

the end of the reporting period Pieces 90 81 58

103 1042025 Environmental Social and Governance Report Key Performance Table

Occupational Health and Safety Production Supply Chain Management

Indicators Unit 2025 2024 2023 Indicators Unit 2025 2024 2023

Safety Production Investment CNY 10000 673.79 677.80 824.40 Annual supplier training sessions held Sessions 4 1 2

Proportion of safety production % 0.0517 0.05346 0.0724 Supplier personnel organizedinvestment to operating revenue to participate in training People-times 238 68 70

Total duration of safety training Hours 9958 17490.5 23423 Total number of suppliers assessed Number 285 287 230

Average safety training

hours per person Hours 1.45 1.66 2.17 Suppliers undergoing social impact assessment Number 85 73 60

Work-related injury insurance

investment amount CNY 10000 496.44 561.15 289.28 Suppliers conducting environmentalimpact assessments Number 85 73 60

Work-related Injury Insurance Coverage % 100 100 100 Unqualified suppliers eliminated Number 17 21 15

Investment Amount in Work

Safety Liability Insurance 10 CNY 10000 6.26 4.15 6.89 Events with significantrisks and impacts in the supply chain Cases 0 0 0

Work Safety Liability Insurance Coverage % 27.28 30 29.41

Equal treatment of small and medium-sized enterprises

Occupational disease cases People- times 0 0 0

Indicators Unit 2025 2024 2023

Work-related fatalities People- times 0 0 0

Balance of accounts payable (including notes payable)

Workdays lost due at the end of the reporting period CNY 10000 352856.89 389118.38 334616.72

to occupational injuries Days 3343.0 3751.5 4344.5

Workdays lost due to Proportion of accounts payable (including notes payable) % 28.71 32.02 31.03

occupational injuries per billion in revenue Days 25.65 29.59 38.17 balance to total assets at the end of the reporting period

Amount of overdue unpaid payments

Injury rate per million man-hours % 1.51 1.96 2.17 at the end of the reporting period

CNY 10000 0 0 0

Amount of overdue payments to small and medium

Note 10：During this reporting period the data for the 2024 work safety liability insurance was updated and corrected. -sizedenterprises at the end of the reporting period

CNY 10000 0 0 0

Globalization and Local Operations

Care and Support

Indicators Unit 2025 2024 2023

Indicators Unit 2025 2024 2023

Local employees (referring to the local city)

Employees Assisted People 295 285 207 [based on registered residence]

People 3945 4508 3518

Proportion of local employees (referring to the local city)

Employee Assistance Investment Amount CNY 10000 229.02 224.91 191.29 [based on registered residence]

%30.932.429.6

Employees in Need Employing Foreign Employees People 1237 1600 817

Assisted per Billion in Revenue People 2.26 2.25 1.82

Proportion of Foreign Employees % 9.8 11.5 6.9

Public Welfare and Charity

Indicators Unit 2025 2024 2023

Amount of charitable donations CNY 10000 41.83 44.79 40.36

Community Public Welfare Investment

per Billion in Revenue CNY 10000 0.32 0.35 0.36

105 1062025 Environmental Social and Governance Report Key Performance Table

Corporate Governance Anti-Commercial Bribery and Anti-Corruption

Indicators Unit 2025 2024 2023 Indicators Unit 2025 2024 2023

Total number of board members People 9 9 9 Total number of senior management personnel covered

Standard deviation of age of directors by anti-commercial bribery and anti-corruption training People 50 50 43

supervisors and senior managemen11 Years 6.58 8.44 8.66

Percentage of senior management personnel covered

Average tenure of board members12 Years 2.12 2.70 2.01 by anti-commercial bribery and anti-corruption training % 100 100 100

Proportion of independent directors % 33.33 33.33 33.33 Total number of employees covered by anti-commercialbribery and anti-corruption training People 12581 13735 11872

Proportion of independent directors serving as

independent directors in more than 3 listed companies % 0 0 0 Percentage of employees covered by anti-commercial

Proportion of independent directors bribery and anti-corruption training

%98.9098.66100.00

on the Strategy Committee % 60 60 60 Total number of commercial bribery

Proportion of independent directors and corruption incidents Cases 2 2 1

on the Audit Committee % 67 67 67

Proportion of independent directors Disciplinary Actions for Commercial13 People 3 3 1

on the Remuneration and Appraisal Committee % 60 60 60 Bribery and Corruption Incidents

Proportion of Independent Directors

on the Nomination Committee % 60 60 60 Note 13：The disclosed incidents of commercial bribery and corruption as well as the number of individuals subject to disciplinary actions in this

Board Members by Gender report are based on statistics compiled in accordance with the company's "Employee Conduct Management Standards." These statistics cover

violations and responsible parties confirmed through internal investigations and handled according to regulations. During the reporting period

Male People 7 9 9 none of the related incidents met the threshold for criminal prosecution.Female People 2 0 0

Board Members by Professional/Educational Background Anti-Unfair Competition

Industry Experts People 1(Independ ent Director) 1(Independ ent Director) 1(Independ ent Director)

Indicators Unit 2025 2024 2023

Legal Expert People 1(Independ ent Director) 1(Independ ent Director) 1(Independ ent Director)

Financial Expert People 1(Independ ent Director) 1(Independ ent Director) 1(Independ ent Director) Amount Involved in Litigation or Significant

Administrative Penalties Due to Unfair CNY10000 0 0 0

Board of Directors Performance Competition Practices

Board Meetings Held Times 12 7 4

Board Member Attendance Rate % 100 100 100 Tax Data

Strategy Committee Meetings

and Motion Approval Rate % 100 100 100

Audit Committee Meetings % 100 100 100 Indicators Unit 2025 2024 2023and Resolution Approval Rate

Remuneration and Appraisal Committee

Meetings and Resolution Approval Rate % 100 100 100 Tax Payment Amount CNY10000 51013.53 49084.54 44816.85

Nomination Committee Meetings

and Resolution Approval Rate % 100 100 100

Note 11：Standard deviation of the ages of directors supervisors and senior management: This is calculated based on the actual ages of all Security and Privacy Protection

directors supervisors and senior management in office at the end of the reporting period as of the reporting date.Note 12：Average Tenure of Directors Supervisors and Senior Management: The arithmetic mean of the actual tenure of all directors supervisors Indicators Unit 2025 2024 2023

and senior management still in office at the end of the reporting period calculated from the date of their appointment to the end of the reporting

period.Amount involved in data security incidents CNY10000 0 0 0

Amount involved in customer privacy breach incidents CNY10000 0 0 0

107 1082025 Environmental Social and Governance Report Index Table

Index Table Feedback Form

Self-Regulatory Guidelines No. 17 for Thank you for reading DunAn Environment's Environmental Social and Governance (ESG) Report. If you have any comments or suggestions

Chapter Companies Listed on Shenzhen Stock Sustainability Reporting StandardsExchange—Sustainability Report (GRI Standards) while reading the report please do not hesitate to share them as they will help us further improve the company's sustainability management

(For Trial Implementation) efforts in the future.

About This Report / GRI 2: General Disclosures 2021

Management Statement Company Basic Information GRI 2: General Disclosures 2021 You are from:

About Us Company Basic Information GRI 2: General Disclosures 2021 Government and Regulatory Agencies

Corporate Self-Disclosed Topics GRI 2: General Disclosures 2021 Shareholders and Other InvestorsGovernance GRI 207: Tax 2019

Customers

Governance Integrity and Anti-Commercial Bribery and Anti- Corruption GRI 205: Anti-Corruption 2016

Framework Compliance Anti-Unfair Competition

Suppliers and Partners

GRI 206: Anti-competitive Behavior 2016

Employees and other personnel

ESG Stakeholder Engagement GRI 2: General Disclosures 2021

Management Due Diligence GRI 3: Material Topics 2021 Industry associations

Addressing Climate Change GRI 305: Emissions 2016

Climate Action Energy Utilization GRI 302: Energy 2016 Your contact information:

Circular Economy Circular Economy GRI 301: Materials 2016Water Resource Utilization GRI 303: Water and Effluents 2018

Environmental

Sustainability Your feedback:

Environmental Environmental Compliance Management

Pollutant Emissions GRI 305: Emissions 2016Management

Waste Management GRI 306: Waste 2020 Issue Excel lent Good Fair Poor Very Poor

Biodiversity &

Ecosystems Ecosystem and Biodiversity Conservation GRI 101: Biodiversity 2024 Your overall evaluation of this report

This report can reflect DunAn Environment's significant impact

Product Product and Service Safety and Quality GRI 416: Customer Health and Safety 2016 on the environment society and corporate governance

Responsibility Innovation-Driven GRI 417: Marketing and Labeling 2016

Data Security and Customer Privacy Protection GRI 418: Customer Privacy 2016 Your overall evaluation of the level of information disclosure in this report

Your overall evaluation of the textual content and layout

design of this report

GRI 401: Employment 2016

GRI 403: Occupational Health and Safety 2018

GRI 404: Training and Education 2016

GRI 405: Diversity and Equal Opportunity 2016 What additional information would you like to learn about from DunAn Environment's Environmental Social and Governance (ESG) Responsible Employee Employees GRI 406: Non-discrimination 2016 reportOperations Well-being GRI 407: Freedom of Association and

Collective Bargaining 2016

GRI 408: Child Labor 2016

GRI 409: Forced or Compulsory Labor 2016

Responsible Supply Chain SecurityEqual Treatment of Small and GRI 308: Supplier Environmental Assessment 2016Supply Chain Medium-sized Enterprises GRI 414: Supplier Social Assessment 2016

Social Rural Revitalization GRI 203: Indirect Economic Impacts 2016

Contribution Social Contribution GRI 204: Procurement Practices 2016GRI 413: Local Communities 2016

Key Performance Table / /

Index of Indicators / /

Feedback Form / /

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