2025
Environmental Social
and Governance Report
Craft quality with ingenuity
Pioneer extraordinary through innovationContents Environment
Environmental Compliance Management 16
About The Report 01 Energy and Carbon Management 18
Introduction 01 Emissions and Waste Management 24
Management Message 02
Resource Utilisation 25
About SNS 03
Ecological Protection 27
ESG Management 10
Social Product Quality and Safety 29
R&D and Innovation 34
Customer Service 42
Employee Rights and Development 45
Occupational Health and Safety 52
Supply Chain Management 57
Information Security and Privacy 60
治理篇 Community Contribution 62
Governance
Corporate Governance 64
Business Ethics 66
Appendix 70
Compliance and Risk Control 68
ESG Performance Indicators 70
Indicator Index Table 74
Reader Feedback 752025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
About The Report Basis of Compilation
This Report has been prepared with reference to documents including the Self-Regulatory
Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report (For
Report Description Trial Implementation) the Self-Regulatory Guidance No. 3 for Companies Listed on the ChiNext
Market of Shenzhen Stock Exchange—Preparation of Sustainability Report and the Global
This is the second Environmental Social and Governance report (hereinafter ?this Reporting Initiative Sustainability Reporting Standards (GRI Standards) (2021 Edition).Report?) published by Sinoseal Holding Co. Ltd. (Stock Code: 300470.SZ) (herein-
after ?SNS? ?the Company? or ?we?) which aims to objectively present SNS?s Data Sources
management practices and performance in economic environmental social and
corporate governance areas. The data and information used in this Report are derived from sources including SNS?s internal
statistics public reports and public disclosures. In case of any discrepancy between the
financial data cited in this Report and the annual report the annual report shall prevail. Unless
Reporting Period otherwise specified the monetary unit is RMB.This Report is an annual report consistent with the reporting period of the Reliability Statement
financial annual report covering the time period from 1 January to 31 December
2025. For any content exceeding the above scope this Report will provide expla- This Report was reviewed and approved for publication by the Board of Directors. The Company
nations in the relevant sections. affirms that the content disclosed herein is free from any false records misleading statements
or material omissions.Reporting Scope Access to This Report
Unless otherwise specified this Report covers SNS and its holding subsidiaries This Report is published in both Chinese and English. In case of any discrepancy in interpreta-
(including second-tier subsidiaries) consistent with the scope of the Company?s tion the Chinese version shall prevail.annual report. The main entities disclosed are as follows: Electronic versions of this Report in both Chinese and English can be read or downloaded from
the Company?s official website and CNINFO the information disclosure platform for the ChiNext
Company Name Abbreviation market designated by the China Securities Regulatory Commission:
https://www.sns-china.com/
Sinoseal Holding Co. Ltd. SNS the Company We https://www.cninfo.com.cn
Dalian Sun Seals Ltd. Sun Seals
Contact Information
UTEC (Suzhou) Sealing Solutions Co. Ltd. UTEC
If you have any comments or suggestions on this Report please contact the Company via phone or
Sichuan Sunny Seal Co. Ltd. Sunny Seal
in writing through the following information?
Zigong New Dipper Valve Co. Ltd. NDIV Address: No. 8 4th Wuke West Road Wuhou District Chengdu City Sichuan Province
ZM Investment GmbH ZM GmbH Postcode: 610045
Telephone: 028-85542909
Krüger & Sohn GmbH KS GmbH Email: ir@sns-china.com
012025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Management Message
Dear Friends and control our carbon emission intensity through cumulative external donations have reached
measures such as energy-saving technological upgrades RMB450000. We consistently support talent develop-
We are pleased to present the SNS 2025 ESG Report. On green electricity procurement and waste reduction. ment through university-enterprise partnerships
behalf of the Board of Directors and executive manage- scholarships and grants as well as other community
ment I would like to extend our sincere gratitude to our Innovation-Driven Technology-Empowered Safety and welfare initiatives. Additionally KS GmbH has donated
long-term supporters including investors customers Green Development to local social welfare associations to aid the needy and
partners employees and all sectors of society!
As one of the first national-level specialised refined the elderly.In 2025 as the global green and low-carbon transition unique and innovative ?Little Giant? enterprises we are Looking ahead to 2026 we will further respond to the
accelerated we remained committed to our mission of committed to implementing intelligent and green national ?dual carbon? goals and global sustainability
?Ensure safety and protect the environment?. We have initiatives. Our product applications have expanded into initiatives by promoting the use of clean energy
deeply integrated ESG principles into our strategy and green sectors such as compressed air energy storage accelerating our layout in smart manufacturing and
operations practicing responsibility through steady CCUS and natural gas pressure differential power genera- green technology and continuously strengthening
growth and pursuing excellence through innovation and tion as we actively promote the achievement of the ?dual technology?s role in empowering the low-carbon
breakthroughs. carbon? goals through technological innovation. The transition. While working with all stakeholders to build
intelligent seal monitoring and health management a safe green and win-win industrial ecosystem we will
system has been upgraded to version 2.0 assisting clients
Deepening ESG Governance and Enhancing Execution steadily advance toward our corporate vision of ?To be with predictive maintenance and ensuring the safe opera- the world-class fluid control equipment provider?. We
We have established ESG liaisons in each department tion of on-site equipment. value every piece of your feedback and look forward to
based on our four-tier governance structure to ensure the Employee-Centric Building a Safe and Nurturing Home working with you to contribute SNS?s strength to a
efficient implementation of ESG initiatives. During the beautiful and sustainable future.reporting period there were zero incidents of business The Company places a high value on employee rights
ethics violations all employees signed the Integrity including career development occupational health and
Commitment Letter and for the sixth consecutive year we safety. We have been honoured with the ?Sichuan Extraor-
received an ?A? rating for information disclosure from the dinary Employer? award for two consecutive years with Hong Chen
Shenzhen Stock Exchange while our ESG ratings reached an average employee satisfaction score of 85. In 2025
General Manager Sinoseal Holding
new heights with an ?A? from Wind ESG and ?AAA? from employee benefit coverage reached 100% and Sunny Seal
Sino-Securities ESG. added new facilities such as a ?staff home?. We conducted Co. Ltd.
339 training sessions of various types to support employ-
Green Manufacturing Implemented Low-Carbon Transi- April 2026ees in advancing their education and qualifications.tion Yields Tangible Results Throughout the year there were zero major safety
Sunny Seal?s 2 MW rooftop distributed photovoltaic system incidents and zero cases of occupational disease.is fully connected to the grid with annual renewable Giving Back to Society Fulfilling Our Responsibilities
electricity consumption reaching 1274700 kWh. Environ-
mental protection investment totalled RMB2.16 million a The Company has always balanced corporate growth with
significant increase from the previous year. A total of five of giving back to the community. In 2025 we continued our
our subsidiary companies have obtained ISO 14001 certifi- targeted assistance to Ganluo County in Sichuan investing
cation. We systematically identify climate risks implement over RMB400000 in consumption-driven aid programmes
special contingency plans for flood and heat prevention and industrial cooperation. Over the past three years our
022025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
About SNS
Company Profile
Sinoseal Holding Co. Ltd. (Stock Code: 300470.SZ) Meeting o股f S东ha大reh会olders
formerly the Sealing Technology Research Department
of Sichuan Provincial Machinery Research & Design Board of Directors
Institute established in 1978 was one of the first organi-
sations in China to conduct research on sealing SNS
technology and has since become the only A-share listed
company in the domestic mechanical seals industry. The Audit and Supervision Department
Company?s main products include mechanical seals dry
gas seals sealing auxiliary (control) systems rotary jet
pumps rubber and plastic seals special valves and
guide rings. The Company is dedicated to providing
customers with customized total solutions for various
equipment and operating conditions with wide applica-
tions in fields such as petrochemical coal chemical oil
and gas transportation electric power mining machin-
ery and water conveyance. It operates nearly 40 offices
and over 10 domestic and international service centres
with several more under construction creating a product
and service network that covers all of China and extends
to regions including Southeast Asia Central Asia North
Africa and Central Africa. As of the end of 2025 the
Company had six controlled subsidiaries (including
second-tier subsidiaries): UTEC (Suzhou) Sealing
Solutions Co. Ltd. Dalian Sun Seals Ltd. Sichuan Sunny
Seal Co. Ltd. Zigong New Dipper Valve Co. Ltd. ZM
Investment GmbH and Krüger & Sohn GmbH. It has also
invested in two other enterprises and the Sichuan
Zhenxing Zhongmi Equity Investment Centre (Limited
Partnership).SNS Organisational Structure
03
Chengdu CHG Robots & Intelligent
Equipment Institute Co.Ltd.Sichuan Zhenxing Zhongmi Equity Sichuan Hongchuang Electronic
Investment Centre Technology Co. Ltd.(Limited Partnership)
ZM Investment GmbH Krüger & Sohn GmbH
NDIV
Sunny Seal
UTEC
Sun Seals
Administration Department
Finance Department
Information Department
R&D Management Department
Board of Directors? Office Safety and Equipment Management
Department
Nomination Committee
Quality Assurance Department
Remuneration and
Appraisal Committee Assembly and Service Departmentt
Strategic Development and
ESG Committee Manufacturing Department II
Audit Committee Manufacturing Department I
Procurement Department
Production Management Department
Technology Department
Rotary Jet Pump Business Department
International Business Department
Sales Department2025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Start-up Reform and listing Capital investment Globalisation strategy
In 1978 the Company?s predecessor the On 12 June 2015 the Company was listed on In 2016 the Company completed the In July 2024 the Company gained actual
Sealing Technology Research Department the Growth Enterprise Market of the acquisition of UTEC (Suzhou) Sealing control of KS GmbH and in February 2025
of Sichuan Provincial Machinery Research & Shenzhen Stock Exchange becoming the Solutions Co. Ltd. it acquired all of the Company?s equity. In
Design Institute was formally established. only A-share listed company in China?s April 2026 the Board of Directors approved
mechanical seal industry. In 2018 the Company completed the the establishment of an international
acquisition of Dalian Sun Seals Ltd. company to accelerate the Company?s
international development.Keep up with the times Structural reform Strategic renaming Strategic integration
In September 1993 following the national In 2009 the Company acquired the shares In December 2019 the Company was In February 2021 the Company completed
policy of reform and opening up it jointly held by Japanese partner was converted officially renamed ?Sinoseal Holding Co. Ltd.?. the acquisition of Zigong New Dipper Valve
invested with Japan?s Nikki Industries Co. from a limited company into a joint-stock Co. Ltd. officially entering the high-end
Ltd. in Hiroshima Prefecture to form company and was renamed ?Sichuan Sunny In January 2021 the subsidiary ?Sichuan special valves sector.?Sichuan Nikki Seal Co. Ltd.? becoming the Seal Co. Ltd.? Sangni Machinery Co. Ltd.? was officially
first Sino-foreign joint venture science and renamed ?Sichuan Sunny Seal Co. Ltd.?.technology enterprise in Sichuan Province. In 2010 the Company was restructured into
a diversified joint-stock enterprise controlled
by a state-owned company.
042025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Corporate Culture Business Overview
SNS is deeply rooted in the mechanical seal industry integrating R&D design production and manufacturing. It has
established a core product system centred around various mechanical seals and their auxiliary (control) systems
Corporate Mission Corporate Vision rotary jet pumps special valves and rubber and plastic seals. The Company can customize the development of
Ensure safety and protect To be the world-class products with reliable performance and stable quality according to customer needs including various mechanical
the environment fluid control equipment seals dry gas seals sealing auxiliary (control) systems rubber and plastic seals rotary jet pumps special valves and
provider guide rings. It also provides comprehensive support from technical consulting and on-site problem solving to techni-
cal training continuously creating value for customers.SNS Sunny Seal Sun Seals
Corporate Slogan Strategic Goal
Craft quality with ingenuity Establish a Providing integrated solutions for mechanical seals with core products covering mechanical seals dry gas
Pioneer extraordinary comprehensive sealing seals and sealing auxiliary (control) systems the Company serves sectors such as the petrochemical coal
through innovation industry ecosystem chemical oil and gas transportation and nuclear power industries; SNS is also engaged in the develop-
ment and sale of rotary jet pumps.UTEC
Core Values Corporate Spirit
Deeply engaged in the R&D and manufacturing of rubber and plastic seals and specialised mould-free
Create value and pursue Responsibility
excellence Innovation Openness turning equipment for rubber and plastic seals the company holds significant advantages in the perfor-
and Vision mance of rubber and plastic sealing materials and mould-free processing technology for large-scale rubber
and plastic seals serving industries such as mining machinery shield tunnelling and petrochemicals.NDIV
Quality Policy HSE Policy
Integrity High quality Environmental Stewardship Focusing on the R&D and manufacturing of special valves for special operating conditions and applica-
Service excellence Occupational Health
Operational Safety tions its core products include axial flow check valves forced sealing ball valves compressor anti-surge Continuous improvement Regulatory Compliance valves and water strike pressure relief valves primarily serving the oil and gas transportation petro-
chemical and water conveyance sectors.KS GmbH
Business Philosophy
Technology-Driven Market Leadership Manufactures resin-based laminated materials (including pipes profiles rods and plates) and guide
Service-Backed Customer Loyalty
Quality-Defined Brand Excellence rings with products widely used in the engineering machinery and electrical fields.
052025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Highlights of 2025
SNS and Subsidiaries? Honours and Awards in 2025
Award Issuer Award Issuer
Compliance and Governance People-Centric Development
Outstanding Enterprise for Contribution to
Sichuan Extraordinary Employer of 2025 Liepin.com
High-Quality Development of the
Manufacturing Industry in Meishan Tianfu Sichuan Tianfu New Area Meishan
New Area 2024 – Top 10 Tax-paying Management Committee Outstanding Innovation Achievement in Sichuan Provincial Federation of
Manufacturing Enterprise the 2025 Sichuan Provincial Staff ?Five
Smalls? Activity Trade Unions
Five-Star Party Organisation for New Working Committee for Non-Public Economic
Economic and Social Organisations Organisations and Social Organisations of AAAA-Level Labour Security Credit Unit Suzhou Industrial Park Human
Meishan Tianfu New Area of the CPC of Suzhou Industrial Park For 2024 Resources and Social Security Bureau
Best Practice for Investor Relations China Association for Public
Management of Listed Companies 2024 Companies Advanced Collective in Internal Suzhou Industrial Park Branch of the
Public Security Suzhou Public Security Bureau
A-Rating for Information Disclosure Work Shenzhen Stock Exchange Excellent Organisation Unit in the Fourth
on the ChiNext Board For 2024-2025
Labour Competition ?Forging Ahead on a Meishan Federation of Trade Unions
New Journey Achieving Success in a New Sichuan Tianfu New Area
Era? of Meishan Tianfu New Area
Partnering for Mutual Success
?Excellent Supplier? 2024 Sinochem Energy Technology Co. Ltd. First Prize in the ?Five Smalls? Innovation
Category of the 2025 ?Contributing to the Meishan Municipal Federation of Trade
14th Five-Year Plan and Forging Ahead on Unions
?High-Quality Service Provider? 2024 Wengfu Dazhou Chemical Co. Ltd. a New Journey? Labour Competition
?Excellent Supplier? 2024 LG Chem (Huizhou) Chemical Co. Ltd. Second Prize in the ?Four Techniques?
Case Category of the 2025 ?Contributing
?Second Prize? for Excellent Quality to the 14th Five-Year Plan and Forging Meishan Municipal Federation of Trade
Partner 2024 Shaanxi Blower (Group) Co. Ltd. Ahead on a New Journey? Labour Unions
Competition
?Excellent Supplier? 2025 Leo Group Pump Co. Ltd.College of Polymer Science and Engineering Advanced Collective in Park Public Suzhou Industrial Park Administrative
Best Cooperative Enterprise of 2024 Qingdao University of Science and Technology Security Committee
062025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
2025 SNS Product and Service Honours and Recognition
Award Issuer
R&D and Intelligent Manufacturing
Specialised Refined Unique and Innovative Ministry of Industry and
?Little Giant? Enterprise Information Technology
?Tianfu Famous Products? Brand Logo Sichuan Society for Market
Authorisation Certificate Supervision and Administration
Chengdu Municipal Bureau of
?Industrial Excellence? — Intelligent Seal
Economy and Information
Monitoring and Health Management ?Excellent Supplier? for Strategic Supplier ?Best Quality Award? for 2024
Technology Chengdu New
System (SIMS V1.0) 2023–2024
Economic Development Commission Binhua Group Co. Ltd. Sulzer Pumps (Suzhou) Co. Ltd.Beijing Aerospace Petrochemical
2025 Key Enterprise for Customized Sichuan Provincial Department of Technology & Equipment
Production in Sichuan Province Economy and Information Technology Engineering Co. Ltd.Key Technology and Application of Split Dry
Gas Seal Systems for Large-Scale Ethylene
Plant Extrusion Pelletizers — Second Prize China Hydraulics Pneumatics & Seals
of the Sichuan Provincial Machinery Association
Industry Science and Technology Award
Key Technology and Engineering Application
of High-Parameter Mechanical Seals for China Machinery Industry Best Supplier of the National ?Excellent Supplier? for 2024
Petrochemical Equipment — Second Prize of Federation / Chinese Mechanical Gold SupplierNetwork of Pumps and Compressors and 2025 Maintenance and
the China Machinery Industry Science and Engineering Society for Petroleum and Chemical Shengu Group Co. Ltd. Renovation from Yanshan Technology Progress Award Engineering Construction for Petrochemical Company
2024–2025
List of Typical Application Cases of National Chemical Equipment Sinopec Beijing Yanshan
AI-Powered New Industrialisation — Ministry of Industry and Design Technology Centre / Sinopec Company Materials and
?Intelligent Seal Monitoring and Health Information Technology Machinery Technology Centre Equipment Centre
Management System?
First Batch of ?Advanced-Level Smart Sichuan Provincial Department of
Factories? in Sichuan — Flexible Smart Factory Economy and Information
for High-End Mechanical Seal Devices Technology
Jiangsu Provincial Private Science and Jiangsu Provincial Private Science and
Technology Enterprise Technology Enterprise Association ?Quality Service Provider? for 2025 Strategic Supplier Excellent Supplier for 2025
PetroChina Fushun CCCC Tianhe Machinery & Sinopec Qilu Company Materials
Petrochemical Company Equipment Manufacturing Co. Ltd. and Equipment Centre
072025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
2025 SNS ESG Ratings and Honours
Sino-Securities Index Information Service Sino-Securities Index Information
(Shanghai) Co. Ltd. Service (Shanghai) Co. Ltd.Environmental Social and Corporate Top 100 A-Share Listed Companies
Governance (ESG) Comprehensive Rating: AAA for ESG Excellence in 2025
Sino-Securities Index Information Service Sino-Securities Index Information Service (Shanghai) Sino-Securities Index Information Service (Shanghai)
(Shanghai) Co. Ltd. Co. Ltd. Co. Ltd.Top 20 A-Share Listed Companies in the Top 50 A-Share Listed Companies for Best Practices Top 100 Sino-Securities A-Share Listed Companies
Industrial Sector for ESG Performance in 2025 in the Corporate Governance (G) Dimension in 2025 for Outstanding Inaugural ESG Reports in 2025
Securities Times Wind Securities Star Guancha.cn Sichuan News Network West China Net
19th China Listed Companies ESG Wind ESG Rating Result: A Rating ESG New Benchmark ESG Potential Award Pioneering Case in Corporate Social
Top 100 for 2025 Enterprise Award Responsibility
082025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
2025 SNS ESG Performance Highlights
Environment Social Corporate Governance
By the end of 2025 By the end of 2025 In 2025
SNS Sun Seals UTEC NDIV and KS GmbH have SNS Sun Seals UTEC and NDIV have obtained ISO 100% of employees signed the Integrity
obtained ISO 14001 environmental management 45001 occupational health and safety management Commitment Letter.system certification. system certification. 0 incidents of business ethics violations
SNS Sun Seals UTEC NDIV and KS GmbH have
In 2025 obtained ISO 9001 quality management system certifi-
Sunny Seal completed the grid connection and power cation.generation of 2 MW rooftop distributed photovoltaic A cumulative total of 362 national patents have
power project. been granted including 65 invention patents.Total environmental investment for the year was
RMB2.16 million. In 2025
Renewable electricity consumption was A total of 339 training sessions were conducted for
1274746.70 kWh. all employees with a total investment of
RMB445900.
0 major safety incidents
0 cases of occupational diseases
092025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
ESG Management
ESG Governance Structure Board of Directors
(highest decision-making body) Board of Directors Office
SNS continuously optimises its ESG governance system. During Responsible for reviewing the Company?s sustainable development strategy Responsible for the daily coordination and
the year building upon its existing four-tier governance Supervising the implementation of the ESG management of ESG work
structure the Company appointed ESG liaisons in each depart- strategy Organising the integration and reporting of
Leading the coordination of ESG work and ESG information and work progressment and subsidiary to implement and coordinate specific ESG summarising its results
tasks. These ESG liaisons operate under a ?dual-reporting?
mechanism reporting directly to their respective department
heads and also to the ESG coordination personnel in the Board
of Directors Office. This framework allows the Company?s Strategic Development and ESG Committee
headquarters to stay informed of the latest ESG management
developments monitor the progress of various ESG initiatives Formulating ESG strategic recommendations
and further promote the efficient implementation of ESG work and implementation plans
across all departments and subsidiaries. This provides a solid
guarantee for the Company?s sustainable development and
the execution of its ESG strategy.Management
Developing specific sustainable development
implementation plans
Supervising the implementation of ESG work by
departments
Departments and Subsidiaries
Coordinates specific
departmental ESG work
Responsible for implementing ESG work in daily ESG Liaison Officer
business operations Reports to the head of
the department
SNS ESG governance structure
10
Reporting2025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Stakeholder Communication
SNS values communication and engagement with its various Stakeholders identifying key Stakeholders and their areas of focus considering their feedback and opinions in the Company's
decision-making and management processes and responding to their concerns.Stakeholders
Government and Industry Shareholders and Investors Customers Employees Partners (Suppliers etc.) Media
Regulatory Authorities Associations/Chambers of
Commerce
Responding to Compliant Operations Product Quality and Occupational Health Supplier Technological Innovation Community Welfare
Climate Change
Market Value Safety and Safety Management Circular Economy Compliant Operations
Environmental Management and Capital Technological Employee Business Ethics
Compliance Operations Community Welfare Information DisclosureInnovation Employment and
Topics of Management Customer Service Rights
Concern Energy Management and Communication Employee Training and
Information Development
Disclosure
Compliant
Operations
News Reports Shareholders' Meetings Customer Visits Employee Supplier Industry Exhibitions Company Website
Company Website Results Briefings Conference Calls Representative Conferences Technology Sharing Press Conferences
Supervision and Information Disclosure CongressEmail Company Website Sessions
Inspection Conference Calls Employee Satisfaction Customer Routine VisitsSurveys
Email Satisfaction Surveys
Communica- Employee ForumsOnline Communication
tion Methods Platforms Executive Reception
Days
Investor Surveys
112025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Double Materiality Step 1: Issue Identification
Assessment The Company comprehensively considered disclosure standards macroeconomic policies industry development trends and its own operational
In 2025 SNS conducted a double materi- characteristics to systematically review and screen potential sustainable development issues ultimately identifying 20 ESG materiality issues
closely related to its operations. The main standards and frameworks referenced include:
ality analysis to systematically identify
and assess its key sustainable develop- Global Reporting Initiative (GRI) Standards
ment issues by considering industry Sustainable Development Goals of the United Nations (UN SDGs)
policy trends market changes and its
own development stage; soliciting exten- Shenzhen Stock Exchange Self-Regulatory Guidance No. 17 For Listed Companies—Sustainable Development Reports (Trial)
sive feedback from internal and external
stakeholders on ?impact materiality? and
?financial materiality? through online
questionnaires; conducting a compre-
hensive analysis and prioritisation of Step 2: Stakeholder Engagement
these issues to clarify its ESG manage-
ment priorities; and thus responding
more effectively to stakeholder concerns Through online questionnaires numerous stakeholders—including government and regulatory agencies customers employees partners
industry associations/chambers of commerce and the media—were invited to participate in the assessment:
and expectations.Impact materiality: Based on the potential positive or negative impacts of relevant issues on the economic social and environmental
aspects of SNS a comprehensive evaluation of issue importance was conducted using a quantitative scoring method.Financial materiality: The Company's management team provided decision-making support for subsequent issue screening and
prioritisation by scoring issues from the two dimensions of their degree of financial impact on the Company and their likelihood of
occurrence based on actual operating conditions and professional judgment.Step 3: Double Materiality Assessment
The Company conducted a statistical and comprehensive analysis of the assessment results for impact and financial materiality calculating
the scores for each issue in both dimensions to construct the double materiality matrix.
122025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Based on an analysis of the survey results the materiality of each sustain-
able development issue has been identified as follows:
Technological Financially Material Impact Materiality Double Materiality
Network and data security Occupational Innovation Issues Issues Issues
Health and Safety Product and Quality Safety Product Quality and Product Quality and Product Quality and
Employee Employment Safety Safety Safety
Pollutant Emissions and and Rights Supplier Supplier ManagementSupplier Management Supplier
Waste Management Management ManagementCorporate Governance Technological
Environmental Compliance and Technological Innovation Technological
Water Resource Compliance Management Employee Training Risk Management Innovation Innovation
Utilisation Compliance and Risk and Development Customer Service Management Compliance and Risk
Energy Management Business Ethics and Communication Management
Pollutant and Waste
Compliance and Risk Management
Management
Stakeholder Communication Customer Service and Environmental
Communication Compliance
Community Welfare
Circular Economy Management
Energy Management
Water Resource
Addressing Climate Change Utilisation
Cybersecurity and Data
Security
Biodiversity Protection
Employee Recruitment
and Rights
Occupational Health
and Safety
Employee Training and
Development
Corporate Governance
Importance of Financial Impact on the Company Highly Material Business Ethics
Environmental Issues Social Issues Governance Issues
Double materiality issue matrix
13
Highly Material Importance of Impact on the Economy Society and Environment2025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
For financially material issues the Company conducts a detailed analysis of the related impacts risks and opportunities. Please see the table below for details:
Financially Impact Affected Value
Main Impacts Risks and Opportunities
Material Issues Period Chain Segment
The Company's Risk: Inadequate controls in product design testing or production may lead to safety incidents product recalls and legal
Product Quality Brand Reputation litigation thereby increasing operating costs and damaging customer trust. Short
and Safety Customer Trust Medium Own Operations
Opportunity: Enhancing product reliability and consistency by improving the quality management system helps to retain
Market and Long
core customers and increase pricing power.Competitiveness Term
Production Risk: Unstable Supplier Quality or Compliance Risks Could Lead to Production Disruptions or Delivery Delays Driving Up
Continuity Operating Costs. Short
Supplier
Cost Control Medium Upstream
Management Opportunity: Establishing stable partnerships with high-quality suppliers helps to improve Supply Chain collaboration
Delivery and Long
reduce procurement risks and enhance overall operational efficiency.Capability Term
Risk: Inefficient commercialisation of R&D results or inadequate protection of intellectual property (IP) may make it difficult
Product to convert technological advantages into commercial returns.Competitiveness Medium and Own Operations
Technological The Company's Opportunity: Continuously increasing R&D investment promotes the upgrading of products and processes toward Long Term Downstream
Innovation Long-Term high-end intelligent and green solutions expands new markets and application areas and may lead to policy or financial
Development support by responding to national and industry innovation policies.Risk: A poor customer service experience or untimely complaint handling may lead to customer attrition affecting sales
Customer Service Customer volume and long-term partnerships.Short
and Communication Satisfaction
Medium Downstream
Order Stability Opportunity: Systematically using customer feedback to optimise products and services helps to uncover potential needs and Long
enhance customer loyalty and expand market share. Term
The Company's
Operational Risk: Failure to promptly identify potential risks in policy and regulation the industry environment and business
Stability management could lead to compliance violations or unforeseen incidents causing financial losses and reputational Short Upstream Own Compliance and Risk damage. Medium Operations
Management External Trust and Long Downstream
The Company's Opportunity: A robust internal control and risk management system helps to improve operational efficiency reduce Term
Brand Reputation non-financial risks and enhance investor confidence.
14Environment
SNS integrates the concept of green sustainability into develop-
ment strategy continuously advancing energy conservation carbon
reduction and the intensive use of resources while strengthening
the emissions and waste management. As the Company pursues
steady growth it also fulfils environmental responsibilities promot-
ing the synergistic advancement of high-quality development and
ecological environmental protection.SDGs Addressed in This Chapter
Material issues covered in this chapter
*Environmental Compliance Management
*Pollutant Emissions and Waste Management
*Energy Management
*Water Resource Utilisation
*Circular Economy
*Addressing Climate Change
*Biodiversity Protection
152025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Environmental Compliance Management
Environmental Management System
SNS has established a standardised environmental management system based on the ISO 14001 standard and Each holding subsidiary has established an environmental
operational realities. The Company has formulated internal regulations such as the Environmental Management management organisational structure led by general manager.System Environmental Pollution Emergency Response Plan and Environmental and Occupational Health and Safety This structure operates under a management model where a
Operational Control Procedures establishing a three-tiered institutional framework for EHS assurance. This frame- dedicated department leads implementation and supervision
work ensures strict implementation of environmental compliance requirements throughout the entire process from with all departments collaborating to fulfil their respective
production to operation. During the reporting period the Company introduced the ‘Four New’ HSE Management responsibilities thereby ensuring system implementation. The
System to further strengthen standardised control measures for various environmental risks across the full life cycle effectiveness of the system is verified through internal and
of new equipment processes materials and technologies. Additionally SNS updated multiple work instructions for external audits. During the reporting period SNS and each of
waste gas treatment facilities—including those for casting particulate matter and rubber—thereby enhancing its holding subsidiaries conducted at least one environmental
environmental management system. management system audit formulating and implementing
corrective actions for any non-conformities found resulting in
a 100% rectification rate.Establishes the overall environmental management policy and respon-
Level 1 sibilities
Management Key Performance
manual
By the end of 2025
Level 2 Specifies the operational procedures for the Company?s environmental
Procedural documents and management work ensuring that the entire operational process strictly
SNS Sun Seals UTEC NDIV and KS
management system complies with relevant environmental protection laws and regulations GmbH have obtained ISO 14001
environmental management system
certification.Details operating procedures and work instructions clarifies the
Level 3
operational standards and requirements for each department and
Job files
effectively prevents environmental accident risks at the source
Environmental Management Document System of SNS
162025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Environmental Risk Management
In accordance with the Environmental Factor Identification Hazard Assessment and Risk Control Procedures
the Company assesses the environmental risks in all business processes of production and operations. It
formulates and implements special environmental control measures standardises environmental testing and
monitoring and continuously improves emergency plans and drill mechanisms to ensure that environmental
risks are effectively prevented and controlled.Environmental Factor Identification and Environmental Testing and Monitoring Sunny Seal conducts emergency drills and training for chemical
Management and hazardous waste spills
Based on an analytical framework of ?3 timelines 3 The Company organises and conducts environ-
operational states 12 sources and 5 impact mental monitoring implementing standardised
categories? environmental impact factors are testing of major pollution sources and relevant
identified and evaluated annually to form an environmental elements. This covers key areas
?Environmental Factors List? which specifies such as waste gas wastewater and noise provid-
significant environmental factors pollution targets ing data support for environmental management
relevant operational activities and locations. and risk prevention and control.For the identified risk points control measures and Monitoring frequency methods and results are
management plans are developed including strictly aligned with environmental impact assess-
emergency preparedness plans and drills and ment approvals and pollutant discharge permit
control responsibilities are assigned by depart- requirements to ensure compliance with relevant
ment. national regulations.NDIV conducts an emergency drill for a chemical spill
Environmental Emergency Response Environmental Emergency Drills
Plan
Key Performance
The Company formulates and updates the Environ- Focusing on key environmental risk scenarios such
mental Pollution Incident Emergency Plan. For as chemical and hazardous waste spills the
potential environmental risks such as chemical spills Company organises emergency drills and training In 2025 SNS
and hazardous waste accidents the plan specifies in conjunction with filed environmental emergency
emergency response procedures division of plan. This continuously improves employees? Invested RMB2.16 million in environmental protection
responsibilities and material supply requirements. emergency response capabilities and their ability
Regular environmental risk assessments and to handle sudden environmental incidents. No major sudden environmental incidents violations of
emergency supply inventories are conducted to
ensure that sudden environmental incidents are environmental protection regulations or administrative
handled promptly and effectively. penalties occurred.
172025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Energy and Carbon Management
Energy Management System
The Company strictly adheres to laws and regulations such as the Energy Conservation Law of the People’s Republic of China
and improves energy management system with reference to standards like ISO 50001. During the reporting period the Key Performance
Company successfully completed annual external audit for the ISO 50001 energy management system and has integrated the
standard into comprehensive management system. This integration forms the Company?s overall framework and mechanism
By the end of 2025 SNS has
for energy management. Leveraging the comprehensive system the Company provides overarching guidance for managing
environmental energy quality occupational health and safety and other issues throughout the manufacturing process. The obtained ISO 50001 energy
Company revised and updated the Energy Conservation and Emission Reduction Management System clarifying each management system certification.department?s responsibilities in energy management and establishing supervision management and incentive/penalty
mechanisms for water electricity and gas consumption in production daily life and office activities.The Company conducts supervision and inspections for energy conservation and emission reduction. Each department carries
out monthly supervision and self-inspections of energy-saving efforts. Led by the Safety and Equipment Management Depart-
ment periodic and ad-hoc joint inspections are organised with various departments and records are maintained. For any
issues identified the responsible department is required to promptly formulate a rectification plan defining the responsible
person and a completion deadline. Beyond assessments the Company actively encourages innovative technologies and
initiatives. Departments and individuals making significant contributions to energy conservation and emission reduction are
recognised or rewarded accordingly to enhance the engagement of all employees in energy-saving activities.
182025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Addressing Climate Change
The Company continuously advances work on climate change mitigation and adaptation. It systematically identifies and assesses climate-related risks and formulates and implements response
measures to reduce the potential impact of climate risks on production and business activities.SNS Climate Risk and Opportunity Analysis - Physical Risks
Risk Type Time
Horizon Risk Description and Impact Response Measures
May affect the physical and mental health and working conditions of Formulate the Heat Emergency Response Plan clarify operating procedures for extreme
employees leading to reduced production efficiency weather conditions and distribute heatstroke prevention and cold protection supplies.Extreme Heat Short-term
Extreme Low Medium-term
Increased maintenance costs for temperature-sensitive equipment Strengthen routine maintenance and overhaul of equipment before weather conditions such
Temperatures Long-term cooling and heating systems and other facilities leading to higher as ice snow frost and high temperatures.energy costs. Equip with generators or add photovoltaic power generation facilities to ensure electricity supply.Formulate a Flood Prevention Emergency Plan conduct flood control inspections before the flood
Short-term
Extreme May cause flooding in the plant area and damage to factory facilities season and organise emergency drills to enhance the emergency response speed of all personnel.Medium-term
Precipitation leading to asset damage and production interruptions. Equip with emergency supplies and equipment such as sandbags flood control barriers
Long-term
flood control pumps and water pumps.Install dehumidification equipment or use moisture-absorbing materials to control the
Medium-term A sustained increase in air humidity may accelerate the corrosion of temperature and humidity in production workshops and storage spaces.Wet Trends metal parts of equipment affecting production efficiency product
Long-term precision and quality. Perform regular maintenance and overhauls of production equipment and apply anti-rust
treatments to ensure they continuously meet process requirements.UTEC equipped with flood control sandbags NDIV equipped with a flood control water pump SNS conducted an electrical inspection
192025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
SNS Climate Risk and Opportunity Analysis - Transition Risks
Risk Type Time Horizon Risk Description and Impact Response Measures
Short-term Monitor changes in climate-related laws regulations and policies and make advance preparations
Policies and As national policies related to carbon emissions and energy use become for tasks such as carbon inventories and carbon accounting.Medium-term stricter the Company may face higher compliance costs for energy
Regulations
Long-term conservation and emissions reduction. Promote measures such as equipment replacement and technological upgrades to reduce emissions
from high-energy-consumption equipment like sintering furnaces.The Company may need to increase R&D investment in energy-saving
Medium-term and low-carbon technologies to maintain a strong competitive position
Technologies Strengthen the development of innovative R&D talent teams and project management to promote in the industry. Lagging or failed R&D could lead to consequences such
Long-term the application and transformation of R&D achievements.as increased R&D expenses higher production costs and reduced
product sales.Medium-term Climate change may increase the costs of upstream raw materials Incorporate considerations for climate change factors into supplier management develop scientific
Market Long-term warehousing and logistics impacting sales revenue or profits.supplier backup and material inventory plans and enhance supply chain resilience.Short-term Stakeholders such as regulatory bodies investors and potential custom-
ers have increasing expectations for the Company?s engagement in Publicly disclose information on energy consumption and carbon emissions through formats such as
Reputation Medium-term
climate issues and information disclosure; failure to respond promptly ESG Reports and Annual Reports to ensure the transparency of information disclosure.Long-term and proactively could adversely affect the Company?s reputation.
202025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
SNS Climate Risk and Opportunity Analysis - Transition Opportunities
Opportunity Type Time Horizon Opportunity Description and Impact Response Measures
Short-term
Resource Improving energy efficiency in the Company?s production and operation-
Medium-term The Company is actively advancing the development of green factory and utilizes digital systems
Efficiency al processes helps reduce costs while expanding production capacity. to enhance production and transportation efficiency.Long-term
Short-term Key downstream customers are undergoing a green transformation
Products and Intensify R&D and innovation for green products and services conduct product carbon footprint
Medium-term leading to growing demand for products with low-carbon attributes and certifications and enhance the competitive advantages of the Company?s products in areas such
Services
Long-term an increase in revenue from green products and services. as energy efficiency and recycling to win more customer orders.Short-term Increasing the proportion of renewable energy usage reduces reliance on
Energy Source Rationally plan the layout of renewable energy and increase proportion in the Company?s energy
Medium-term fossil fuels and lowers related energy costs. mix by installing rooftop photovoltaics procuring green electricity and other methods.Short-term Low-carbon products align with the global trend of green transformation Carry out product carbon footprint certification reduce the carbon footprint per unit of product
Market Medium-term in the chemical industry which facilitates market access in overseas and expand the Company?s presence in overseas markets.Long-term regions and increases sales revenue.
212025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Energy Conservation and Consumption
Reduction Initiatives
The Company?s energy consumption in production and operations is primarily electricity
Green Energy Use
supplemented by natural gas and liquefied gas. We are also actively promoting self-gener-
ated photovoltaic power and green electricity procurement to increase the proportion of Installing photovoltaic panels on factory rooftops and replacing traditional streetlights
green energy usage. By focusing on both technology and management we implement with solar-powered ones to enhance solar energy utilisation.energy-saving technical modifications control energy use in production and offices
Procuring renewable energy (e.g. UTEC purchases photovoltaic green electricity and
improve energy efficiency and reduce greenhouse gas emissions.KS GmbH purchases 100% carbon-neutral natural gas).Equipment Operation Management
Formulated and implemented air conditioning temperature control standards (set no
lower than 26°C in summer and no higher than 20°C in winter; not turned on if the room
temperature is below 26°C in summer or above 16°C in winter). In office areas air
conditioners must be turned off if no one is present for more than 30 minutes.In office areas ensure that all electrical equipment including computers water dispens-
ers air conditioners and printers is turned off before leaving work. We also enforce a
?lights-off when leaving? policy to eliminate the phenomenon of lights being left on.On the production site if equipment and lighting are to be inactive for an extended
period due to breaks or other reasons their power switches should be turned off
promptly.UTEC?s newly purchased oven Energy-Saving Technological Upgrades
Sunny Seal: Retrofitted compressed air pipelines and replaced valves to reduce the
frequency of gas leaks.UTEC: Customised a new 4-meter vertical lathe to replace old equipment improving
work efficiency and reducing safety hazards; purchased a new 4.5-meter oven
enabling multiple large-sized products to be baked in the same furnace and boosting
production efficiency.SNS?s Energy Conservation and Emission Reduction Measures
222025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Sunny Seal—Rooftop Distributed Photovoltaic Project Case
Key Performance
In 2025 Sunny Seal constructed a new 2-megawatt rooftop distributed photovoltaic In 2025
project. As of 31 December 2025 the project had generated a cumulative total of 1158531 SNS and all holding subsidiaries set a target for ?electricity
kWh of electricity equivalent to 142.38 tonnes of standard coal. consumption per RMB10000 of output value not to exceed
the 2024 level?. With the exception of UTEC which slightly
exceeded the target all other companies achieved this goal.SNS invested RMB 3713761.84 in energy
conservation and emission reduction measures1.Energy Consumption
In 2025
Direct energy consumption totaled 84.52 tonnes of
standard coal.Purchased electricity amounted to 8785700.70 kWh
while self-generated and self-consumed photovoltaic electricity
was 787931 kWh.Panoramic view of Sunny Seal?s rooftop distributed photovoltaic installation
Carbon Emissions
In 2025
Scope 1 carbon emissions were 157.26 tonnes of CO2
equivalent.Scope 2 carbon emissions were 4403.22 tonnes of CO2
equivalent.
1The amount for energy conservation and emission reduction primarily covers investments in
photovoltaic projects and does not include all related inputs representing incomplete statistics.
232025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Emissions and Waste Management
Pollutant Emissions
Waste Gas
SNS strictly complies with laws regulations and emission standards such as the Law of the People’s
Republic of China on the Prevention and Control of Atmospheric Pollution the Law of the People’s Repub-
lic of China on the Prevention and Control of Water Pollution the Law of the People’s Republic of China Sunny Seal: Replaced the secondary activated carbon in the waste gas
on the Prevention and Control of Environmental Pollution by Solid Waste and the Law of the People’s treatment system to ensure adsorption efficiency and compliant emissions.Republic of China on Prevention and Control of Environmental Noise Pollution. Through process innova- UTEC: Connected the new oven in the casting workshop to the waste gas
tion and technological upgrades we reduce the impact of our production and operations on the natural disposal facility to ensure compliant emissions.environment. During the reporting period UTEC revised and updated the operating procedures for
Sun Seals NDIV: Added and updated dust collection equipment to centrally
treatment facilities for four types of waste gas—casting exhaust particulate matter exhaust rubber collect and treat welding fumes and grinding dust generated during produc-
exhaust and CNC machining exhaust—based on actual on-site production conditions. These updates tion.provide detailed operational step-by-step guidance and diagrams and clarify inspection and mainte-
SNS: Collects and disposes of dust and particulate matter emitted during
nance requirements to ensure the effective operation of the disposal facilities.production using equipment such as bag filters pulse dust collectors and
We commission professional third-party organisations annually to conduct environmental monitoring cartridge dust collectors.testing emissions such as waste gas (VOCs particulate matter cooking fumes) and wastewater to
ensure all indicators meet standard requirements. We are also subject to unscheduled supervisory
inspections by regulatory authorities to strictly control our environmental emission levels. In 2025 all
environmental monitoring results for SNS and holding subsidiaries complied with regulatory require- Wastewater
ments and all had achieved the HSE goal of ?compliant wastewater waste gas and noise emissions?.Strictly implements the Integrated Wastewater Discharge Standard (GB
8978-1996) and the stipulations of pollutant discharge permit to ensure full
compliance in wastewater treatment and discharge.Noise
Sun Seals: Added sound-absorbing cotton to the test bench in the produc-
tion department to reduce workshop noise.UTEC: Built a soundproof wall in the grinding workshop to improve the
working environment.SNS?s Pollutant Treatment Measures
Sound-absorbing cotton on the test bench Oven in UTEC?s casting workshop connected to the waste gas disposal facility
in Sun Seals? production department
242025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Waste Management Resource Utilisation
The Company categorises collects stores and disposes of all types of solid SNS adheres to the concept of sustainable development emphasising resource conservation and
waste in accordance with relevant national laws and regulations. It complies recycling. The Company focuses on material reduction and circulation by promoting the conserva-
with the Standard for Pollution Control on Hazardous Waste Storage and has tion and recycling of raw materials packaging materials and office and process consumables
formulated and continues to update the Hazardous Waste Management System. across procurement production packaging and after-sales processes. It implements measures
This system regulates the entire process of hazardous waste management from such as process optimisation material substitution and reuse of consumables to continuously
generation and collection to storage and transfer clarifying the responsibilities enhance resource utilisation efficiency.of departments that generate hazardous waste and refining the management
requirements for hazardous waste entering and leaving storage. At the same
time we reduce waste generation at the source and entrust qualified third
parties for collection and transport to ensure the compliant disposal of hazard-
Recycling of Transport
ous waste. During the reporting period SNS and holding subsidiaries all Paperless Production Material Substitution Consumables Recycling Equipment and Packaging
achieved the management goal of ?lawful disposal of hazardous waste as Materials
required?. Strengthen employees? Improve process routes Recycle and reuse Implement centralized
awareness of resource for high-cost raw protective consumables packaging of goods
Processing casting start-up discharge materials into buffer conservation promote materials and optimise such as workshop safety according to customer
UTEC pads reducing the amount of hazardous waste outsourced paperless office and the structure and nets rubber mats and requirements to reduce
for disposal. digital management formula design of foam pads. the amount of
measures reduce paper low-cost materials to packaging material
Recycle the outer
usage and streamline reduce raw material used per unit of
packaging boxes of
Improving the utilisation efficiency of activated carbon in work processes. consumption. product.purchased parts for
NDIV the exhaust gas disposal process to reduce the generation Use flushing and secondary use in the Adopt customized
of waste activated carbon. cotton cloths instead transport of outsourced reusable transport
of disposable paper and special products. pallets in place of
towels to wipe disposable packaging
Equipping CNC machines with oil-water separators to polished products materials to reduce
Sun Seals recycle cutting fluid by separating floating oil thereby reducing paper packaging material
reducing the generation of liquid hazardous waste. consumption. consumption.Implementing the recovery and reuse of various compo-
KS GmbH nents based on the principle of minimising the environ-
mental footprint.SNS?s Waste Reduction Measures SNS Material Conservation Measures
252025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Sun Seals—Auxiliary Material Conservation and
Reuse Measures Case
Additionally we actively promote water resource management at our headquarters and subsid-
iaries encouraging water conservation. Given that we are not in a high-water-consumption
industry the Company primarily focuses on water control in processes such as testing and clean-
Sun Seals actively explores the potential for resource conservation and ing identifying and implementing recycling measures. At the same time we conduct routine
utilisation. By equipping CNC machines with oil-water separators it inspections of our entire production and operational environment to prevent leakage and waste
separates oil from the surface of cutting fluid enabling the fluid to be and we promote a culture of water conservation.reused and doubling the service life of the coolant.NDIV—Oil Separation Treatment and Recycling of Pressure Testing Water Case
During the valve pressure testing process
oil enters the test water reservoir along
with the pressure testing water which can
easily lead to the accumulation and emulsi-
fication of floating oil affecting the contin-
uous use of the test water. By configuring a
float ball device a water pump and a
three-stage oil separation and filtration
tank NDIV implements periodic pumping
and oil separation treatment of the test
water. This effectively reduces the amount
of floating oil in the reservoir and improves
the reuse level of pressure testing water.CNC equipment fitted with an oil-water separator
Key Performance
In 2025 SNS
Consumed 106096.58 square meters of wooden packaging Oil separation treatment unit
materials and 15 metric tonnes of plastic packaging materials.
262025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Sun Seals—Recycling of Maintenance and
Cleaning Wastewater Case Ecological Protection
Sun Seals has built a wastewater treatment system in mainte-
nance area to perform harmless treatment of the cleaning waste-
water generated during maintenance processes. The entire We place a high value on operational compliance and biodiversity protection. In accordance with regula-
operation is standardised to ensure the wastewater meets tions such as the Environmental Impact Assessment Law of the People’s Republic of China we conduct
standards for recycling and reuse achieving both environmental ecological impact assessments to avoid or mitigate impacts on the ecological environment and biodiver-
and energy-saving benefits. sity control the ecological footprint from production and construction activities to the greatest extent
possible and maintain the ecological balance of project sites. The Company?s production and operation-
al sites are mostly located in industrial parks and do not involve statutory ecological protection areas
important habitats or other ecologically sensitive areas.During the planning development and construction of the new SNS office building the Company
followed basic principles of adapting to local conditions prioritising ecology and ensuring landscape
harmony in accordance with requirements such as the Evaluation Standard for Green Building and the
Technical Guide for Sponge City Construction—Low-Impact Development of Stormwater Systems (for Trial
Implementation).During the design phase of the new SNS office building we aimed to reduce purify and utilise rainwater
at source. We integrated sponge city concepts and ecological protection requirements into the construc-
tion plan prioritising the use of green rainwater facilities and reducing the use of gray infrastructure. The
Company selected technical measures and materials that were reasonable in construction cost conve-
nient for operation and maintenance and conducive to water conservation. We also optimised the
Wastewater treatment facility in the maintenance area structure function and layout of facilities based on local climate and hydrogeological conditions to
reduce construction and subsequent operational difficulties thereby earnestly fulfilling our ecological
protection responsibilities.
27Social
SNS integrates the concept of social responsibility into its
corporate operations and business development and is
committed to creating a fair mutually trusting and healthy
development environment for its employees partners and all
social stakeholders. Through systematic management and
measures the Company continuously deepens its social
responsibility practices contributing long-term value to
high-quality corporate development and social progress.SDGs Addressed in This Chapter:
Material topics covered in this chapter:
*Product Quality and Safety
*Technological Innovation
*Employee Employment and Rights
*Employee Training and Development
*Occupational Health and Safety
*Customer Service and Communication
*Supplier Management
*Network and Data Security
*Community Welfare
282025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Product Quality and Safety
SNS has established a product quality management system based on high standards integrating quality risk control throughout the entire product lifecycle. This ensures consistency from
product R&D and manufacturing to after-sales service fully embeds quality control requirements into operational practices and continuously promotes dual improvements in product quality
and customer service.Governance Strategy
SNS has built a scientific and standardised quality management system in accordance with authoritative domes- The Company?s quality policy is ?Integrity high quality service and
tic and international quality management standards clarifying uniform basic requirements for quality manage- improvement? emphasising both proactive prevention and
ment. It has established a quantifiable quality objective system centred on core indicators such as product post-event management of quality risks. The Company compiles and
qualification rate test qualification rate on-time order delivery rate failure rate and quality cost loss rate. Each analyses core quality indicators monthly to identify actual or poten-
subsidiary based on its specific business and production processes has formulated and continuously revised tial quality issues. It prepares a risk assessment table annually
procedural documents such as the Integrated Management Manual the Management System for Product Certifi- quantitatively scoring the frequency and severity of risks and
cates of Conformity and the Control Procedure for Product Identification and Traceability. This creates a system- dynamically updates and optimises it quarterly to achieve systematic
atic and implementable system of management documents ensuring that quality requirements are integrated screening. Through internal self-inspection mechanisms as well as
into all stages including R&D procurement production inspection and service. quality-themed meetings at subsidiaries customer feedback
analysis and pre-process discussions we research and determine
At the holding subsidiary level the Company has clearly defined the division of responsibilities for quality targeted measures for quality risk control to ensure product quality.management. The general manager of each holding subsidiary is responsible for quality management and
appoints a deputy general manager as the management representative to ensure the effective operation of the
management system. A dedicated quality assurance department has been established to promote and imple-
ment the Company?s quality objectives and to supervise relevant departments or personnel in technical
procurement inspection and assembly to carry out their daily work in accordance with quality standards.As of the end of 2025 SNS has obtained ISO 9001 Quality Management System Certification API Spec Q1 Certifi-
cation and ASME (American Society of Mechanical Engineers) Certification. It also holds the National Special
Equipment Production License. The Company ensures the effective operation and continuous improvement of
its quality management system through internal audits management reviews and third-party certifications.
292025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Type of Quality Risk Specific Risk Description Main Response Measures Quality Management Process
Organise special meetings to formulate and unify clear cosmetic The Company has formulated detailed internal
Products supplied by vendors have quality standards and inspection requirements; operating specifications and procedural documents
appearance quality issues such as burrs Strengthen appearance quality audits training and on-site for each stage including design and development
Supply Quality Risk and scratches which affect overall product guidance for suppliers; production and manufacturing testing and inspec-
quality and customer perception. tion and assembly and delivery clarifying the key
Conduct monthly special inspections of product appearance and
labelling. points of quality control at each step. For example
to ensure accuracy in the product inspection stage
the Company strictly implements the Inspection and
Develop specialised operating procedures for special processes
Improper operation during special process-
and conduct special skills training for employees in relevant Test Control Procedure equipping itself with
Special Process es such as the hoisting of stainless steel positions (e.g. welders assemblers); numerous precision instruments measuring tools
Risks may cause internal damage or hidden and testing equipment to monitor and control key
defects affecting product reliability. Strengthen quality supervision to enhance employee awareness
of special process quality. parameters in real-time. The Company has estab-
lished a daily management and periodic calibration
mechanism for inspection which is handled by
Formulate new and more stringent inspection procedures and company-level and department-level metrologists Customers for international and high-end
Standards and projects have extremely stringent require-
processes for new and international projects; supplemented by outsourced testing unified
ments; any inconsistency in standards or
Compliance Risks Assign dedicated personnel to be responsible for products in key
quarterly inspections and regular monthly physical
deviation in understanding can easily lead projects and standardise the operating requirements for specialised and chemical tests to ensure all instruments and
to non-conforming products. equipment. equipment are in good working condition.During the design stage the Company organises
special meetings to unify key quality standards and
Product quality risks and countermeasures
establishes special management groups to track
the entire process ensuring the precise implemen-
tation of customer requirements. The respective
Impact Risk and Opportunity Management responsible departments control quality in the
subsequent stages of manufacturing testing and
inspection and assembly and delivery which
SNS focuses on quality risk control throughout the entire product lifecycle by revising institutional documents unifying includes optimising supplier management product
product standards and embedding quality requirements into information systems like ERP and OA to prevent quality issues identification order tracking and the handling of
through standardised management; simultaneously departments such as quality technology and manufacturing collaborate non-conforming products thereby providing
to develop improvement measures enhancing the efficiency of quality risk response. The Company continuously improves its end-to-end product quality assurance through
quality management level through internal special training introducing external experts and learning from advanced manu- quality training and the application of information
facturers and it strictly implements closed-loop management for any quality issue—from analysis and correction to preven- technology.tion—to promote the continuous improvement of its quality management system.
302025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Quality management process
Design Planning: The technical department is responsible for
design and development planning determining design stages Production Planning: Plan the production process including
and control measures including design review verification and resource requirements process documents and inspection and
validation activities. testing requirements.Design Input: Clearly define design requirements including Production Control: Strictly follow process documents and work
customer needs legal and regulatory requirements and instructions during production to ensure the process is under
applicable standards. control.Design Output: Ensure design outputs meet input require- Identification and Traceability: Establish a product identifica-
ments including product specifications drawings and process tion and traceability system to ensure product uniqueness and
documents. Production traceability throughout the production process.and
Design Review and Verification: Ensure the design meets Design Stage Manufacturing Preventive Maintenance: Perform preventive maintenance on
specified requirements through internal reviews and verifica- Stage production equipment to ensure its normal operation.tion.In-Process Inspection: Conduct inspections and tests during Testing and Assembly and
Inspection Stage Delivery Stage Assembly Control: Control the assembly process to ensure the production process to ensure products conform to design assembly quality meets requirements.and process requirements.Product Protection: Protect products before delivery including
Final Inspection: After production is complete conduct final packaging handling and storage to ensure they are not
inspections and tests to confirm that the product meets accep- damaged.tance criteria.Post-Delivery Activities: Provide necessary after-sales services
Non-Conforming Product Control: Identify segregate and including product installation commissioning and repairs.review non-conforming products and take corrective actions.
312025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Building a Quality Culture
SNS ?Quality Month? campaign drives an upgrade in the
The Company builds an all-employee quality culture through regular quality training and awareness-raising Caseall-employee quality culture
activities. In 2025 we continued to organise special training sessions to enhance quality management
capabilities covering topics such as zero-defect quality management changes to the API Q1 10th To deepen the concept of product quality SNS successfully held a 45-day
edition standard and key audit points and quality leadership. Concurrently the Company conducted ?Quality Month? campaign from September to October 2025. This campaign
professional training activities including annual inspector training a company-wide quality knowledge themed ?Promoting Improvement Through Full Participation Focusing on Pain
competition quality inspection skills competition and CMM inspection skills training to strengthen Points for Radical Cures and Co-creating an Ecosystem of Excellence? was
employees? understanding of specific quality processes and skill levels transforming product quality guided by the core principles of ?setting goals setting plans and assigning
requirements into vivid scenario-based experiences and effectively raising employee quality aware- personnel? and followed an implementation path of ?training competing
ness. inspecting and summarising? featuring a variety of activities such as an online
quality knowledge quiz special training sessions improvement seminars
The Company also extends its quality training to supply chain partners. By organising special supplier ?Lateral Thinking? case simulations quality-themed micro-video creation and
training events it provides guidance on suppliers? product dimensional control appearance standards keynote speeches to foster a strong quality culture atmosphere.and on-site management to ensure quality requirements are unified. Through regular quality-themed
meetings and sharing sessions on international project experiences the Company not only continuous-
ly enhances the reliability of its products but also effectively promotes the deepening of its all-employ-
ee quality culture.SNS ?Quality Month? campaign awards ceremony
Quality knowledge Quality inspection skills competition
competition
322025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
SNS organised a quality communication meeting to Case
jointly build a supply chain of excellence Product Recall Management
To solidify the quality foundation of the supply chain SNS and Sunny Seal The Company has formulated management systems such as the Non-Conforming Product
held a quality communication meeting for machined parts in September Control Procedure and the Defective Product Traceability and Recall System to build a
2025 attended by representatives from over ten core suppliers. This closed-loop management system that covers defect identification recall initiation defective
meeting centred on being data-driven and unifying standards aimed to product handling and recall prevention thereby maximising the protection of customer
deeply integrate the Company?s quality requirements into the upstream safety and rights controlling product quality risks and continuously improving its recall
supply chain. contingency plans to strengthen response capabilities.The communication meeting analysed the specific quality data and typical Identification
defect cases of each supplier over the past two years shifting the focus of
quality from post-inspection to pre-prevention. It also facilitated The Sales/After-Sales Department is responsible for receiving and promptly
reporting customer feedback on defective products.face-to-face discussions on details such as product drawings technical
standards process flows and quality control points thereby clarifying the The Quality Assurance Department organises relevant departments to analyse
direction and goals for quality improvement. the cause of the feedback assess the issue implement improvement measures
and determine whether a recall is necessary.Initiation and Implementation
For products confirmed to have defects and requiring a recall the Quality Assur-
ance Department is responsible for formulating a defective product recall plan
which is then implemented by the relevant departments upon approval.Handling of Defective Products
The responsible department formulates a handling plan for the recalled products
which is implemented after approval. The Quality Assurance Department supervis-
es the handling process of the defective products.Recording and Prevention
Records of the recall and handling process will be fully retained including the
reason for the recall the measures taken and the results.Preventive measures are taken to avoid the recurrence of similar issues ensuring
On-site discussion at the machined parts quality communication meeting customer satisfaction and product safety.Product recall process
332025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Indicators and Targets R&D and Innovation
The Company sets multi-level quantifiable annual quality and safety targets to SNS systematically plans its R&D and innovation path—from basic materials research to cutting-edge
drive continuous improvement in product quality and safety. Among these SNS application scenarios and from single products to smart services—based on four dimensions: vertical
has established 11 company-level targets related to product quality and service technological deepening horizontal system integration intelligent digital empowerment and a green
which the Company then breaks down and assigns to various departments ecosystem layout. The Company has established an R&D and innovation management system covering
forming the quality targets for which each department is responsible. Each the entire project lifecycle. Through systematic technological breakthroughs and an intellectual proper-
holding subsidiary formulates its own relevant quality targets based on its ty strategy it continuously promotes industrial technological progress and enhances its innovation
functions and business characteristics referencing the requirements of SNS. capabilities.These quality targets include key performance indicators such as customer
satisfaction first-pass yield and on-time order completion rate. The setting of
product quality targets follows the principle of annual signing and monthly Governance
tracking to ensure continuity in target management. In 2025 SNS and Sun Seals
achieved their company-level quality targets for the year while other holding SNS has established an enterprise technology centre within the Company with a Technology Centre
subsidiaries substantially met their respective annual company-level quality Committee composed of technical experts from its headquarters and various holding subsidiaries.targets. This committee implements full lifecycle management for R&D projects from feasibility assessments
for project initiation to key technological breakthroughs and final acceptance reviews. Leveraging
Relying on its outstanding product quality reliable services and leading manu- multiple specialised R&D teams the Company?s scientific research activities broadly cover basic
facturing capabilities the Company has earned high recognition from customers theoretical research and cutting-edge product applications constantly seeking industry break-
the industry and the government. In 2025 it was honoured with the Sichuan throughs.Province ?Tianfu Famous Brand? certification showcasing the Company?s
strength in digital and intelligent manufacturing. The Company has established an R&D assessment and incentive system to enhance R&D efficiency
protect innovative achievements and stimulate the long-term potential of technical talent. We
conduct performance evaluations for internal R&D projects providing rewards to project teams with
outstanding results and have set up special achievement awards for projects and teams that obtain
nationally authorised patents. In 2025 the Company formulated the Administrative Measures for
Talent Project and Scientific and Technological Progress Award Incentive Funds to further clarify the
incentive conditions and standards for scientific research achievements. This move aims to motivate
employees to participate in talent project applications and science and technology innovation activi-
ties thereby promoting talent development and technological innovation.The Company places great importance on protecting innovative achievements and managing
intellectual property. It employs full-time IP management personnel to monitor the latest develop-
ments in policies regulations industry trends and peer enterprises to prevent internal and external
infringement risks. During the reporting period we optimised policy documents such as the Intellec-
SNS obtains Sichuan Province?s ?Tianfu Famous Brand? certification tual Property Management Policy and the Administrative Measures for Patents and Software
Copyrights to enhance the refinement of approval and management processes.
342025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Strategy
SNS adheres to a core product value of ?Reliable + Advanced?. Through lean research on common technical details interdisciplinary integration and AI-powered intelligent empowerment the
Company drives product upgrades with technological innovation and collaboratively leads industry technology.Lean Research on Common Focusing on in-depth research into common technologies such as basic materials mechanical seal mechanisms
Technical Details and controllable deformation design and diamond coating preparation we are dedicated to further improving lifespan and
Breakthroughs in Extreme reliability of seals reducing energy consumption minimising leakage and overcoming technical challenges under
Vertical Operating Conditions extreme conditions like ultra-high temperature (>500°C) ultra-high pressure (>40MPa) and high speed (>180m/s).Deepening
Interdisciplinary Integration Promoting the integration of mechanical seal technology with multiple disciplines such as materials science fluid
and Construction of dynamics smart sensing and electronics we are transitioning from supplying single seal products to providing system Horizontal
Expansion All-Scenario Solutions solutions that include intelligent seals with embedded sensors as well as seal condition monitoring and maintenance.Product and
service
innovation
By implementing the ?Smart SNS 123? digital transformation strategy we deeply embed artificial intelligence and big
strategy Upgrading Products and data technologies into product R&D and lifecycle management. At the R&D end AI technology is introduced to assist in
Intelligent Services Driven by AI and design and interpret complex project documents; on the product side the SIMS intelligent monitoring system is iterated
Empower- Digital Technologies to achieve real-time monitoring of seal status and early fault warnings; and at the service end a predictive maintenance
ment platform is built to forecast health status through data analysis.Coordinated Development With the goal of becoming a ?world-class fluid control equipment provider? we are strengthening international business
Ecological of Internationalisation and collaboration and closely following the ?dual carbon? strategy with a key focus on developing sealing technologies for Layout
Green Initiatives green industries such as CCUS energy storage nuclear power and supercritical carbon dioxide power generation.
352025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Impact Risk and Opportunity Management
R&D Management Process Green Technology R&D
SNS has formulated the Scientific Research Project Management System to manage the quality of the entire R&D The Company actively responds to the national ?dual carbon?
process through project initiation reviews project execution progress tracking and project completion accep- strategy and integrates sustainable development concepts into its
tance reviews. During the initiation and acceptance phases all members of the Technology Committee partici- core technology and product innovation practices. It focuses on
pate in the review to ensure that feasibility is fully demonstrated at the project?s outset and that research two aspects: developing products and service solutions and
outcomes are substantively verified upon completion thereby controlling the quality standards and compliance expanding applications in green low-carbon industries to support
boundaries of R&D activities. In 2025 the Company successfully implemented the online management of its R&D the green transformation of the chemical and energy sectors.process incorporating key stages—from project initiation mid-term inspections and record evaluation to final
acceptance—into a digital management platform. This enables real-time monitoring and traceability manage- Green Products and Service Solutions
ment of R&D progress resource allocation and key decision-making points.Design Optimisation: Independently researching and preparing diamond
Project The ?Project Initiation Application Form? and report are submitted through the OA System and seal coatings to enhance product anti-friction performance through
Initiation and undergo a final review and decision by the Technology Committee to ensure that R&D aligns with material innovation; applying precision design technology to sealing faces
Approval market and technological development needs. to finely control the performance of friction pairs and reduce frictional
heat; applying advanced groove design technology to mechanical seal
faces to significantly reduce operational energy consumption.R&D Materials Applications via the OA system and requisitioning via ERP enable online approval and full traceability
Management Technological Breakthroughs: Successfully developed high-parameter of R&D materials. dry gas seals capable of withstanding pressures of up to 40MPa speeds
of up to 40000rpm and diameters of up to 400mm; upgraded mechanical
R&D Fund Implementing meticulous budgeting expenses are consolidated by R&D order to ensure that fund seal solutions for 12MPa pipeline oil pumps and high-temperature
Management usage is clear and compliant. high-pressure boiler feed water pumps in ultra-supercritical power plants;
and continued research on high-pressure low-power consumption
sealing technology to reduce equipment energy consumption and media
Regular project inspections and expert guidance are organised to ensure project progress and
Project Tracking leakage.quality.Intelligent Technology: Completed the upgraded development of the
SIMS intelligent monitoring system and launched the SIMS 2.0 product
Project Experts from the Technology Committee conduct project acceptance to ensure that the project solution to enable predictive maintenance ensuring safety and environ-
Completion achieves its research objectives. mental protection requirements are met during the product use phase.Low-Carbon Industry Application Scenarios
Intellectual R&D achievements undergo standardised approval for patent applications and paper publications
Property and through an online process ensuring the effective commercialisation and protection of intellectual
Commercialisation Applying sealing technology to emerging green and low-carbon fields
of Achievement property. such as nuclear power energy storage and natural gas pressure
differential power generation.R&D management process
362025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
SIMS 2.0 intelligent monitoring system: Empowering industrial energy conservation Case Natural gas pressure differential power generation technology supports Caseand emission reduction with digital and AI technologies cascaded energy utilisation and low-carbon transformation
The seal intelligent monitoring system (SIMS) 2.0 independently developed by SNS is a prime In active response to the national ?dual carbon? strategy and to promote
example of the Company?s green innovation driven by digital and artificial intelligence technol- comprehensive energy utilisation SNS has successfully developed and
ogies to promote industrial energy conservation and source emission reduction. This system applied a high-speed high-parameter dry gas seal solution for expan-
aims to address the industry pain point in process industries where the status of rotating sion turbines since 2023 targeting the energy-saving technology of
equipment seals is unknown and sudden failures lead to media leakage and energy waste. It pressure differential power generation in natural gas transmission and
achieves full lifecycle health management and smart operation and maintenance for seals. The distribution.system?s core technical indicators have reached a leading level in the industry and it is current-
ly supplied to enterprises such as PetroChina Sinopec CNOOC and PipeChina. Leveraging its technological expertise in the field of dry gas seals SNS
has developed sealing products that meet extreme operating conditions.The successful application of SIMS 2.0 marks a key transformation for SNS from a parts supplier To date the Company has provided core sealing solutions for several key
to an intelligent and green integrated service provider offering a practical technological path national pressure differential power generation projects including the
for the industrial sector to achieve the ?dual carbon? goals. Naxi Station of PetroChina Southwest Oil & Gasfield Company Jiangsu
Rudong Haimen Station Chongqing Tongluoxia Station and the CNOOC
Fujian LNG project. The successful application of this solution directly
supports the safe commissioning and stable power generation of these
projects converting previously wasted pressure energy into clean
electricity. This effectively enhances comprehensive energy utilisation
efficiency and provides solid technical support for achieving significant
?low-carbon benefits? serving as a model of the Company?s commitment
to the national green energy strategy.SIMS 2.0 intelligent monitoring system
372025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Intellectual Property Protection SNS conducts training on invention patent applications to strengthen its Case
global IP layout
The Company values intellectual property protection and patent lifecycle manage-
ment. During the early stages of R&D project initiation or new product develop- In September 2025 SNS conducted the ?Specialised Training on Domestic and Internation-
ment it conducts thorough market research and patent searches to avoid infringing al Invention Patent Applications?. This training focused on core topics such as domestic and
on the intellectual property of others. In the patent application and maintenance international invention patent application procedures PCT international layout and claims
phases professional external agencies are engaged to provide guidance and drafting. It combined these with the technical characteristics of the mechanical seals indus-
protect the Company?s intangible assets. During the reporting period the Company try to effectively enhance the capabilities of R&D personnel in patent mining and layout
conducted multiple specialised training sessions on domestic and international supporting the global protection of the Company's core technologies.invention patent applications to improve the quality of filings protect core techno-
logical achievements and enhance awareness and capabilities in intellectual
property protection.Industry Technical Exchange
Exploratory Research on Forward-Looking Technologies
SNS is deeply involved in and actively leads the development of the industry ecosystem engaging
Signing non-disclosure agreements with R&D personnel to strictly protect technical in exchanges and sharing with partners such as academic institutions upstream and downstream
information and prevent the premature leakage or misuse of technological achieve- enterprises and industry organisations to jointly promote industry innovation and development.ments. The Company has established industry-university-research partnerships with universities includ-
ing Tsinghua University Xi?an Jiaotong University and Xihua University. Leveraging research
platforms like the national postdoctoral research workstation and the Chengdu Academician
Undisclosed Reserve Technological Achievements (Expert) Innovation Workstation it achieves high-level resource sharing and co-creation of
technology. The Company is also active in authoritative domestic and international industry
We adopt a dual protection method of ?patents + technical isolation? to ensure the exhibitions and academic conferences conducting extensive dialogues with industry experts
uniqueness and competitiveness of our technologies in future applications. peers and upstream/downstream partners to grasp the frontiers of R&D and application trends
and share its innovative practices with an open attitude.Applied Innovative Achievements
We actively apply for patents using legal means to ensure the exclusivity and market
advantage of our innovative technologies and to prevent imitation or infringement
by others.Intellectual property protection strategy
382025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
SNS?s Exhibition Attendance in 2025
Attending Unit Date Exhibition Name
NDIV April 2025 The 8th China International Pipeline Conference (CIPC)
UTEC September 2025 Indonesia International Construction Machinery Exhibition
UTEC September 2025 Australia International Mining Exhibition
UTEC October 2025 China Coal & Mining Expo 2025
UTEC October 2025 2025 Asia International Power Transmission and Control Technology Exhibition
SNS June 2025 2025 Blue Bee Exhibition
SNS September 2025 The 4th EPEC Exhibition
SNS?s Attendance at Academic Conferences/Technical Exchange Meetings in 2025 (Selected)
Attending Unit Date Conference Name
SNS April 2025 Group Standard Review and Project Establishment Seminar of the China Petroleum and Chemical Industry Survey and Design Association
SNS May 2025 The 16th Petro-chemical Equipment Maintenance Technology Symposium (Jinniu District Chengdu)
SNS July 2025 The 4th Annual Conference on Refining and Chemical Equipment Management Technology and 2025 Rotating Equipment Management
Technology Exchange Conference
SNS August 2025 Seminar on the Revision of 2 Industry Standards including Agitator Transmission Devices—Mechanical Seals
SNS September 2025 Annual Meeting and Academic Symposium of the Fluid Engineering Division of the Chinese Mechanical Engineering Society
The 3rd Session of the 1st Council of Mechanical Seals Branch of China Hydraulics Pneumatics and Seals Association & The 6th Working Meeting of
SNS October 2025
the 3rd National Technical Committee on Mechanical Seals
SNS October 2025 The 5th Session of the 8th Council (Expanded) of China Hydraulics Pneumatics and Seals Association & HPS Expert Presentation Conference
SNS November 2025 The 15th National Academic Conference on Gas Lubrication and Dry Gas Seals
392025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
UTEC?s technical exchange with Qingdao University of Science and Case SNS and Yangnong Group sign a strategic cooperation agreement to set Case
Technology a new benchmark for safety and technological innovation
To overcome technical bottlenecks in high-end rubber and plastic sealing materi- In April 2025 SNS and Yangnong Group formally signed a Strategic Cooperation Agree-
als UTEC formally established a industry-academia-research partnership with the ment marking the upgrade of their relationship from a traditional supply-demand dynamic
College of Polymer Science and Engineering at Qingdao University of Science and to a deep strategic alliance centred on tackling key technologies and co-creating an
Technology in 2024 to jointly conduct project R&D and promote the cultivation of ecosystem. Based on the principles of ?equality and mutual trust mutual benefit and
outstanding engineering talent. common development? this cooperation involves in-depth collaboration in core areas
such as supply chain synergy localisation initiatives and integrity building aiming to
On September 5 and November 22 an expert team from the university conducted
create a new model for the integrated development of high-end equipment manufac-
specialised training for UTEC?s technical personnel on rubber bonding and mixing
turing and the chemical industry and provide innovative solutions for the long-term
processes closely integrating theoretical principles with practical solutions to
stable operation of facilities.directly help resolve production pain points. Through this deep integration of
industry academia and research UTEC achieved a win-win outcome of key Both parties are committed to the intelligent and green low-carbon transformation of
technological breakthroughs and innovative talent cultivation effectively enhanc- the industrial chain contributing innovative strength to sustainable development in
ing the enterprise?s core competitiveness in the high-end sealing materials sector. the industrial sector. This collaboration not only provides a new paradigm for building
healthy transparent and sustainable supply chain relationships in the industry but
also through deep integration of the industrial chain injects innovative impetus for
China?s high-end equipment to break through international barriers and for global
industrial sustainable development.Technical exchange meeting between UTEC and Qingdao University of Signing ceremony for the strategic cooperation agreement
Science and Technology between SNS and Yangnong Group
402025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Key Performance Key Performance
In 2025 participated in drafting 1 national standard and 3 industry standards In 2025 SNS
R&D investment: R&D investment ratio:
RMB 89791800 5.08%
Indicators and Targets
As one of the first batch of specialised refined unique and innovative ?Little Giant? enterprises recognised by the Ministry
of Industry and Information Technology the Company continuously invests in independent technological innovation leverag- Number of R&D R&D personnel ratio:
ing platforms such as the national enterprise technology centre and the national postdoctoral research workstation to tackle personnel:
challenges in major national equipment and constantly consolidate its technological advantages. During the Reporting Period 15.01%
two major technical achievements in which the Company participated—the Split Dry Gas Seal System for Large-Scale Ethylene 262
Plant Extruder-Pelletizers and the High-Parameter Mechanical Seals for Petrochemical Equipment—received the ?Second
Prize for Science and Technology Progress of the Sichuan Provincial Machinery Industry? and the ?Second Prize for Science
and Technology Progress of the China Machinery Industry? respectively. Patent applications: Patents granted:
3138
Valid patents: Invention patent
201 applications:
14
Invention patents Valid invention
granted: patents:
1764
Second Prize for Science and Technology Progress Second Prize for Science and Technology
of the Sichuan Provincial Machinery Industry Progress of the China Machinery Industry
412025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Customer Service
SNS adheres to the philosophy of ?technology-driven market leadership service-backed customer loyalty quality-defined brand excellence?. The Company has established standardised service
criteria and processes and is dedicated to providing customers with satisfactory product delivery and experiences thereby continuously strengthening its competitiveness.Governance Strategy
SNS has built a customer service management system that spans the entire chain of pre-sales in-sales and after-sales Adhering to the customer service philosophy of
services. The Company has established clear cross-departmental collaboration mechanisms led by the quality department ?technology-driven market leadership service-backed
with the joint participation of sales technical manufacturing and other departments to ensure customer feedback is customer loyalty quality-defined brand excellence?
efficiently identified and resolved in a closed loop. The Company has formulated customer service management policies SNS deeply integrates its service strategy into the entire
such as the Quality Feedback Handling System and Service Activity Control Procedures to comprehensively standardise and process from product R&D to after-sales support. The
proceduralize customer service requirements clarify the feedback and handling processes for quality issues and regulate Company has established a comprehensive customer
the work procedures for service personnel. service system proactively identifies and responds to
customer needs provides technical support ranging
from individual products to system solutions and
Form Completion Categorisation and Assignment Analysis and Improvement leverages standardised service processes and digital
platforms to continuously optimise the customer service
The Sales Department creates a Quality The Quality Assurance Department The responsible department analyses the experience ensuring customer value creation through
Issue Feedback Form in the OA System categorizes the feedback forms based cause of the quality issue and formulates meticulous management and quality improvement.describing the issue in detail on the nature of the issue and implements corrective actions
Process Archiving Verification and Closure Verification and Approval
The Quality Assurance Department The Quality Assurance Department periodi-
All records are archived and the
verifies and closes out the rectification cally assigns responsibility for quality issues
register is updated to ensure the
results for the issue on the scheduled and reviews the analysis and corrective
process is searchable and traceable
date actions
Customer feedback handling process
422025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Impact Risk and Opportunity Management
Customer Follow-Up Feedback Classification
For on-site services such as product installation commissioning and maintenance the The Company uses the quality feedback card as a core tool to classify and manage
Company collects customer feedback through two methods: the service activity work order issues based on two dimensions: the nature of the issue (suggestions for improvement
and follow-up calls from sales personnel covering different stages of service delivery and or product quality problems) and the source of the feedback (customer or internal). This
experience tracking to ensure a transparent and controllable service process and provide an allows for cause analysis and tracking of subsequent improvement measures enhancing
institutional guarantee for the continuous optimisation of its service levels. the efficiency of problem response and resolution.Service personnel operate in strict accordance with work
On-site Class A Customer Feedback Record Card Class A Internal Feedback Record Card
documents and customer requirements and comply with the
Service
customer?s safety and environmental management standards. For quality issues caused by the Compa- For quality issues or improvement sugges-
ny?s own reasons a detailed description tions that arise internally within the
of the fault along with photos physical Company including processing design or
Service personnel immediately record the details in the Service products etc. is required to facilitate management issues a detailed descrip-
Activity Work Order which is then given to the customer to fill analysis and improvement. tion of the problem is required to Service
facilitate analysis and improvement.Completion out the ?Customer Feedback? section and the work order is filed
upon return to the Company.Class B Customer Feedback Class B Internal Feedback
Record Card Record Card
Sales personnel conduct further follow-up calls to gather
customer feedback on aspects such as whether the service For quality issues not caused by the For minor non-human errors that occur
Follow- request has been resolved the product?s operational status Company?s own reasons or for special
during the product realisation process
post-service the skills of the service personnel and the attitude requests and improvement suggestions within the Company the internal respon-Up Calls
of the service personnel and regularly summarize and analyse from customers no further cause analysis
sible department must be identified for
is needed and the responsible depart- regular statistical analysis and improve-
customer suggestions.ment makes direct corrections. ment.Customer service and follow-up process Quality feedback card classification management
432025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Service Capability Training Indicators and Targets
For customer service personnel the Company has established a systematic training and
qualification certification system and continuously conducts specialised technical training The Company systematically evaluates service quality through the annual Customer
such as on mechanical seals knowledge to ensure service personnel master product charac- Satisfaction Survey Form collecting customer feedback across seven core dimensions:
teristics and professional problem-solving skills. product quality packaging label content timeliness and effectiveness of service service
personnel attitude delivery timeliness and completeness of documentation. The Company
combines this with daily follow-up records to conduct in-depth analysis of survey data
SNS held an after-sales experience sharing session to deepen forming a specialised Customer Satisfaction Analysis Report to inform the development Case
service capability building of improvement strategies. In 2025 the Company and its subsidiaries continued to win
high recognition from customers and industry partners for their professional reliable and
In August 2025 SNS held a dedicated experience sharing session on after-sales timely technical services.on-site issues. The Company's service personnel actively shared their on-site service
experiences based on their work practices. At the same time for the technical
difficulties encountered by some service personnel the session organised analyses Customer Satisfaction Score
and centralized discussions to jointly explore solutions effectively enhancing the
professional capabilities and problem-solving skills of the after-sales service team. SNS Sunny Seal Sun Seals 98.71%
NDIV 97.47%
UTEC 97.58%
2025 customer satisfaction score results
Key Performance
In 2025
the customer complaint handling
rate was 100%.SNS held a dedicated experience sharing session on after-sales on-site issues
442025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Employee Rights and Development
SNS considers respecting and protecting employee rights as the foundation of its sustainable development. The Company continuously improves its employment management employee
benefits and career development systems to effectively safeguard the legitimate rights and interests of its employees stimulate their professional capabilities and innovative vitality and create
a caring respectful fair and enterprising work environment.Employee Employment and Rights
Protecting Employee Rights
SNS abides by national labour laws and regulations such as the Labour Law of the
People’s Republic of China and the Labour Contract Law of the People’s Republic of International Women?s Day themed activities convey respect and care for women Case
China standardising institutional documents related to recruitment and dismissal
working hours and leave and adhering to legal employment practices. The Compa- During International Women?s Day on March 8 SNS and its holding subsidiaries organised
ny strictly implements all human rights management systems prohibiting child diverse and enriching themed activities including themed movie screenings floral art experi-
labour and any form of forced labour discrimination harassment or abuse to ences and makeup classes to convey care and respect to female employees. The Company?s
protect the basic rights and dignity of every employee. At the same time it conducts management delivered on-site speeches acknowledging the positive contributions of female
annual compliance assessments of laws and regulations on equal pay for equal work employees in R&D production management and other positions. These activities provided a
and special protections for female employees and reviews and updates its list of space for female employees to relax and interact and also enabled the concepts of respecting
labour and human rights risks to effectively control such risks. women?s value and supporting their growth to be more directly communicated and imple-
mented within the Company.In 2025 the Company revised the Employee Recruitment Management System
improving the approval processes for employee hiring pre-employment physical
examinations and probation-to-permanent conversion. It also actively promoted
digitalisation by moving the recruitment process online and continuously refining it
to enhance the efficiency and transparency of probation-to-permanent conversion
approvals. Furthermore the Company amended the Leave and Attendance
Management System in accordance with national and Sichuan provincial regulations
adding elder care leave and pure breastfeeding leave extending the duration of
maternity marriage and paternity leave and optimising the calculation period for
parental leave to protect the legitimate rights and interests of employees. We
maintain a zero-tolerance attitude toward workplace harassment and any form of
SNS and its holding subsidiaries? experience activities for International Women?s Day
discrimination and all departments strictly implement preventive mechanisms to
build and maintain a work environment that is respectful of rights diverse and
inclusive and equal and friendly.
452025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Employee Composition Employee Welfare and Care
SNS is committed to building a comprehensive multi-level employee care system. In 2025 on the
12.15% 23.55% foundation of fully implementing statutory benefits such as the six social insurances and one housing
29.23% fund and paid leave the Company expanded the dimensions of its care initiatives and continued to
provide special support in areas including maternal and infant care health protection and labour
Employee Age Employee protection comprehensively covering employees? work health and family needs to help them
Structure Gender Structure achieve a better work-life balance.
58.62%76.45%
Under 30 Male Employees
30-50 Female Employees
Over 50 Statutory Benefits Supplementary Benefits
The Company has established diverse communication channels for
employees using their opinions as a key reference for improving rights Six social
insurances and Paid leave Comprehensive protection. Through regular employee representative congresses Health protectionbenefits
executive reception days and departmental forums the Company one housing fund
encourages employees to offer suggestions on the work environment medical insurance statutory holiday benefits general health
management systems and welfare benefits thereby participating in supplementary holidays birthday benefits check-ups
corporate governance and operational optimisation. This year one medical insurance annual leave home visit leave commercial insurance2
employee representative director was added to the Board of Directors endowment marriage leave parent-teacher mutual aid medical
insurance
creating a clear channel between the Company?s decision-makers and maternity leave conference leave insurance from the
unemployment trade union
its employees and improving the efficiency of information communica- breastfeeding cooling and insurance leave
tion and feedback. heating subsidies work-related injury parental leave funeral subsidies
insurance Free work meals in the cafeteria
During the reporting period to systematically assess employees? overall nursing leave etc. nursing rooms maternity insurance
feelings about rights protection and the workplace environment the fitness centres etc.housing provident Employee
Company organised the 2025 annual employee satisfaction survey for fund dormitories
all employees of the Company and its domestic controlled subsidiaries
achieving an average satisfaction score of 85. In addition UTEC concur-
rently conducted a special survey on canteen satisfaction and promptly SNS employee benefits system
optimised its services based on the feedback to further enhance the
employee experience. 2The Company and its holding subsidiaries provide different categories of commercial insurance based on their specific circumstances
such as group accident insurance employer liability insurance and traffic accident insurance.
462025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
The Company regularly organises various themed activities such as Women?s Day Youth Day
Sunny Seal?s ?Employee Home? officially opens establishing a new
Children?s Day New Year?s garden party and the annual sports day to enhance employees? sense Casefoundation for a happy workplace
of belonging cohesion and happiness fostering a warm and vibrant corporate atmosphere.On 25 December 2025 the ?Employee Home? at Sunny Seal which took three
months to build successfully passed provincial inspection and was awarded an
Key Performance honorary plaque for the ?Sichuan Province Grassroots Trade Union Employee
Home Construction Project?. The space with a total area of approximately 764
In 2025 square meters integrates nine major functions including Party-building activi-
Employee benefit coverage rate: Investment in employee benefits4: ties a staff library fitness and sports skills training maternal and infant care
100 62.53 million. and areas for rest and relaxation. It is equipped with various fitness reading %3 RMB
and training facilities to comprehensively meet the learning leisure and health
needs of employees providing a warm and secure space for their growth and
relaxation.SNS?s trade union event themed ?Decade of Glory Journey Renewed? Case
In July 2025 SNS held a series of trade union activities to celebrate its tenth anniversa-
ry of listing under the theme ?A Decade of Glory Charting the Future?. Through diverse
formats including sports competitions fun challenges and employee story sharing the
events allowed employees to reflect on their journey of hard work and share stories of
personal and corporate growth. More than 1000 employees actively participated
which further strengthened team identity and cohesion inspiring confidence and
motivation to face new stages of development together. Interior environment of The inauguration of
the ?Employee Home? the ?Employee Home?
2025 Sichuan extraordinary
employer award
In recognition of its continuous efforts
in building a diverse and inclusive
workplace culture and employee care
On-site at the SNS trade union event system the Company has been
honoured as a ?Sichuan Extraordinary
3During the reporting period SNS and its holding subsidiaries all provided employee benefits including statutory and
supplementary benefits. Specific benefit items vary among different subsidiaries. Employer? for two consecutive years.
4The statistical scope includes statutory benefits commercial insurance and supplementary benefits such as cooling and heating
allowances.
472025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Employee Training and Development
Talent Attraction and Cultivation
In line with industrial development needs SNS Teachers and students from the College of Chemical Engineering of Sichuan University visit the Case
broadens its channels for talent acquisition and Company for an industry-academia-research exchange event
promotes the two-way flow and precise match-
ing of university-enterprise resources continu- In December 2025 a delegation of teachers and students from the College of Chemical Engineering of Sichuan University visited
ously deepening its interaction with universities SNS for an industry-academia-research exchange event. The Company?s management accompanied the visitors on a tour of the
and local communities. In 2025 the Company Sunny Seal production base providing a detailed introduction to the Company?s achievements in domestic substitution
hosted visits from teachers and students from high-end product R&D and intelligent manufacturing. During the subsequent symposium both parties discussed topics such as
several universities including the College of talent cultivation research collaboration and internship employment. They agreed to leverage their respective regional and
Chemical Engineering of Sichuan University the resource advantages to deepen industry-education integration by co-building internship platforms and advancing cooperation
School of Mechanical Engineering of Chengdu on research projects thereby promoting the effective alignment of university research resources with industrial needs and
University of Technology and the School of continuously supplying high-quality engineering and technical talent to the industry.Mechanical and Electrical Engineering of
Lanzhou University of Technology engaging in
in-depth discussions on professional practice
technological applications and career develop-
ment. UTEC also advanced its joint programme
for training outstanding engineers with Qingdao
University of Science and Technology holding
detailed discussions on customized training
plans that align with industry trends and corpo-
rate needs.Furthermore the Company actively responds to
local employment and talent attraction policies
by participating in various recruitment events
and setting up career guidance zones to provide
job seekers with resume optimisation and
interview advice. These efforts help improve the On-site at the university-enterprise exchange event
quality of employment and demonstrate the
Company?s sense of responsibility in fostering
talent and stabilising employment.
482025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Talent Development and Promotion
SNS continuously improves its career development Training System
paths to enhance the competitiveness of its talent
teams. The Company has formulated policies such as General Knowledge Operational Skills Professional Mid- and Senior-Level Grassroots Cadre New Employee
the Employee Training Management System to Training Training Knowledge Training Cadre Training Training Training
establish a multi-level training system that includes
new employee training cadre training professional Competency Assessment & Performance Appraisal
skills enhancement and general knowledge training
ensuring that employees receive comprehensive
competency development. In 2025 the Company Managerial Career Path Technical Career Path Front-Line Workshop Career Path Business Career Path
optimised the professional knowledge courses for
new employee training offering more detailed Principal Senior Sales
Chief Engineer
instruction on core products and business areas. For Senior Executive Section Chief Engineer
technical positions it conducted specialised training
in operational skills management capabilities and Deputy Chief Engineer Senior Technician Senior Sales Engineer
Deputy Director/Director
safe production and verified the effectiveness of the
training through exams practical exercises and Specialty Deputy Technician Sales Engineer
interactive assessments providing a guarantee for Department Deputy Chief Engineer
employees? job competency and professional Manager/ Manager
growth. Chief Technical Officer Senior Worker Sales Representative
Assistant Department
In terms of career development the Company imple- Manager Assistant Sales Lead Engineer Intermediate Worker Representative
ments the Compensation Management System and
Position and Level Evaluation Guidelines. It assesses Department Deputy
Review Engineer Junior Worker
employee performance through regular evaluations Director/Director
and makes salary adjustments and promotions based
on the results offering clear growth pathways and Checking Engineer Ordinary WorkerDepartment Supervisor
comprehensive development support for employees
in different positions. Design Engineer Apprentice Worker
Designer
The Company?s training and assessment system
492025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
?Embark on growth achieve excellence through crafts- Case SNS ?Enhancing management empowering leadership and promoting Case
manship? special training for new employees development? mid-to-senior level leadership training
In July 2025 UTEC conducted a special training programme for 20 new To enhance the team empowerment and inspirational leadership capabilities of its
employees. Through systematic courses and hands-on workshop practice mid-to-senior level management SNS held a special training session in December 2025 on
the training covered sealing product processing technologies production coaching and inspirational leadership for mid- and senior-level managers. Through case
procedures and quality control. This approach promoted the integration study analysis group discussions and scenario-based exercises the training focused on
of theory and practice helping new employees rapidly acquire profession- core topics such as transitioning to a coaching-style of management team empowerment
al skills develop professional qualities and enhance their teamwork and communication skills helping the Company?s mid-to-senior level managers master key
abilities laying a solid foundation for their career advancement. methods for empowering teams and cultivating talent thereby facilitating their transforma-
tion from ?controllers? to ?enablers? and providing leadership support for the Company?s
high-quality development.SNS mid-to-senior level leadership training
Key Performance
In 2025 offered 339 with a total investment of training
sessions for all employees RMB 445465.29
New employee induction training
502025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Employee Support and Incentives
The Company values the improvement of employee capabilities and career growth encouraging employees to participate in various skill competitions by providing support such as paid leave
for competitions and subsidies for transportation food and accommodation while also rewarding employees who achieve outstanding results with honours and salary adjustments. At the same
time the Company has established a diversified incentive mechanism that supports employees in achieving professional development through further education and enhancing professional
skills assists employees in applying for subsidies for master?s degree studies and provides support for examination fees for those obtaining professional qualification certificates aiming to
stimulate employees? motivation for self-improvement and promote their professional growth and work enthusiasm.Eight SNS employees honoured as ?Wuhou District outstanding professional and Case
technical talents?
Key Performance
In February 2025 eight employees of SNS were awarded the title of ?2024 Outstanding Professional and
Technical Talent? of Wuhou District Chengdu in recognition of their exceptional professional capabilities
In 2025 and solid work performance. This selection aims to implement the talent-first development strategy and
foster a talent development environment that respects professionalism and encourages innovation. The
support for educational and qualification award-winning employees have long been dedicated to front-line work and have demonstrated
enhancement was provided to 97 employees with a outstanding performance in technical research and development and practical application fully reflecting
the Company?s achievements in cultivating professional and technical talent and building their capabili-
total investment of RMB 220903.50. ties. The Company will further deepen its ?strengthening the enterprise with talent? philosophy enhance
the cultivation of and support for professional and technical personnel and continue to expand growth
opportunities and development platforms for its employees.
512025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Occupational Health and Safety
SNS values the health and safety of its employees and relevant stakeholders complies with national laws and regulations such as the Law of the People's Republic of China on Work Safety and
the Law of the People's Republic of China on the Prevention and Control of Occupational Diseases consolidates and enhances its occupational health and safety management system and is
committed to preventing risks at their source to solidify long-term safety mechanisms.Occupational Health and Safety Company level (Work Safety Management Committee)
Management System
Coordinates the establishment of safety systems oversees system operation and promotes continuous
improvement
SNS continuously improves its occupational health and
safety management system which covers the Company
and its controlled subsidiaries. It has established a Subsidiary Level (Work Safety Management Committees of Holding Subsidiaries)
multi-level work safety management structure to
promote the effective top-down implementation of safety Implements the Company?s safety policies in line with business-specific characteristics
responsibilities within the organisation and continually Optimises management processes focusing on high-risk operations and occupational health protection
enhances the occupational health and safety manage-
ment standards for key operational processes and Refines requirements for incident management fire safety management safety training and labour protection
front-line positions.As of the end of the reporting period the Company has Department Level (Departmental Safety Officers)
obtained ISO 45001 Occupational Health and Safety
Organises and implements specific safety management measures
Management System Certification and ensures its contin-
ued compliance with standard requirements and effective Conducts daily supervision inspections and hazard identification
operation through a regular audit mechanism. Each Defines and supervises the fulfilment of safety responsibilities by personnel at all levels
subsidiary conducts annual internal audits and regularly
commissions external professional institutions for
third-party audits to promptly identify and rectify Front-Line Employee Level
non-conformities thereby promoting the continuous
optimisation of safety management. Participates in safety management and supervision
Proposes safety improvement suggestions based on on-the-job experience
Implements on-the-job safety operation requirements
Work safety management structure
522025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Safety Risk Management and Hazard Identification Safety upgrades to the vertical lathe operating platform Case
In 2025 the Company continued to advance its dual prevention mechanism of hierarchical safety In 2025 to address the safety risks of working at heights during vertical
risk control and hazard identification and governance. In response to business needs arising from lathe operations NDIV implemented systematic safety upgrades to the
the increased application of new equipment new processes new materials and new technologies lathe platform?s access facilities adding protective railings guards and
(the ?Four News?) the Company formulated the HSE Management System for the Four News. This other safety installations and posting prominent safety warning signs in the
system focuses on identifying the potential impacts of the ?Four News? on employee health work area which effectively reduced the risk of falls from height and opera-
safety and the work environment and establishes corresponding protective measures and safe tional errors while enhancing on-site operational safety.operating requirements to prevent potential new risks and hazards.In daily management the Company combines regular production with ?Four News? application
scenarios to conduct various forms of safety supervision including comprehensive inspections
special inspections daily patrols and employee self-checks. It also organises all employees to
participate in hazard source identification and hazard investigation activities covering key
aspects such as production activities products and equipment to establish a dynamic risk inven-
tory and implement specific control measures. Simultaneously through regular inspections and a
?look back? mechanism the Company continuously reviews the status of identified occupational
hazards and risks and promptly supplements or reinforces safety training personal protective
equipment and engineering control measures to systematically manage risks at every stage.Control Dimension Key Measures
Uses the LEC method to evaluate and classify risks of identified hazards
Updates the hazard identification and evaluation form; develops and implements
targeted control measures for major hazards
Hazard Source
Identification/Risk Regularly organises hazard identification tests to strengthen employees? risk
Classification awareness
Conducts multi-tiered hazard inspections at company department and team
levels
The Company has implemented an incentive system for employee self-inspec-
Hazard Identification tion encouraging and rewarding frontline staff for proactively identifying and
reporting hazards The upgraded vertical lathe operating platform
532025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Occupational Health Assurance
Building a Safety Culture
In 2025 SNS focused on improving the working environment and preventing occupational hazards strengthen-
ing employee occupational health and safety through multiple measures. The Company implements the Labour SNS actively builds its safety culture by enhancing employee
Protection Equipment Safety Management System allocates and updates labour protection equipment based safety awareness and emergency response capabilities
on the risk characteristics of different positions and regularly inspects and replaces equipment such as safety through safety training and emergency drills. The Company
helmets protective footwear and face shields to ensure their protective performance is reliable and matches strengthens its team-level safety management mechanisms
job requirements. Concurrently the Company strictly enforces pre-employment in-service and pre-departure organising department managers and safety officers to
occupational health examinations for employees in hazardous positions to monitor and manage health risks in regularly participate in pre-shift and post-shift meetings
a timely manner. During the reporting period the Company had a zero incidence rate of occupational diseases. where they conduct safety briefings tailored to specific
operational scenarios to guide employees in preventing
For key scenarios such as manufacturing workshops high-temperature work and operations at heights the
safety risks during actual operations. At the same time the
Company has added or optimised safety protections cooling devices and protective facilities in certain
Company continuously diversifies its methods of safety
production areas effectively improving working conditions and reducing occupational health risks. The Compa-
culture communication conveying safety concepts to
ny is also actively exploring the application of digital tools in safety management. Its subsidiary NDIV has
employees in more intuitive and engaging ways by filming
achieved online monitoring and real-time viewing of confined space operations and oxygen concentrations
short safety awareness films conducting specialised safety
providing data support for on-site management and further improving the timeliness and visualisation of safety
training and organising study sessions on work safety laws
controls.and regulations.In addition to occupational disease hazards the Company responds to public health and safety concerns by
In emergency management the Company organises multiple
installing Automatic External Defibrillators (AEDs) and implementing tobacco control measures to safeguard
practical emergency drills centred on typical scenarios such
employee health and well-being continuously improving the safety and comfort of the work environment.as fires heatstroke and personal injuries. These drills
translate training outcomes into on-site response capabili-
ties strengthening employees? abilities for coordinated
Strengthening tobacco control to safeguard workplace health Case response and self-protection during unforeseen events.In November 2025 upholding the philosophy of ?people-oriented safety first? Sunny Seal installed
smoke detectors in workshop restrooms and other areas where tobacco control was weak. This move
strengthened governance over smoking in public areas reduced the risk of respiratory and cardiovascu-
lar diseases for non-smoking employees and effectively controlled fire hazards. Following implementa-
tion violations of smoking regulations decreased by over 90% the air quality significantly improved and
employees were encouraged to adopt healthy workplace habits fostering a positive atmosphere where
?everyone abides by smoking rules and jointly safeguards health and safety?.
542025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Key Performance
In 2025
A total of 5605 participants
attended occupational health and
safety training
accumulating11607.50
training hours
Emergency drill for a lifting injury incident Fire emergency drill
Sun Seals management personnel safety capability enhancement training Case A total of 28 emergency safety
drills were conducted
In 2025 Sun Seals conducted a four-phase systematic safety training programme for management personnel at all levels
from team leaders to department managers focusing on risk prevention and control laws and regulations and technical
safety standards. The training used real accident cases as a starting point to analyse key technical safety points and with a cumulative participation of
management measures. Each phase included in-class quizzes and a closed-book examination with a randomized question 938 person-times.bank was administered at the end of the training. This series of training sessions encouraged managers to proactively identi-
fy risks implement safety responsibilities and strengthen on-site control capabilities fostering a learning atmosphere where
?leaders take the lead in learning key staff learn in depth and learning is connected to practice?. This effectively improved
the Company?s overall safety management level and its capacity to ensure occupational health and safety.Management personnel safety capability enhancement training
552025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Relevant Party Safety Management
The Company continuously improves its occupational health and safety management mechanism for
related parties. Building on the Relevant Party HSE Management System it has refined management
processes and tools implementing strict site-entry safety training for external and outsourced personnel.Through measures such as safety technical briefings distribution of protective equipment and operation-
al process inspections the Company ensures the effective implementation of safety management
requirements for related parties optimising the standardisation and controllability of collaborative work.Site-entry safety training for outsourced personnel
Health and Safety Targets
SNS and its subsidiaries set annual health and safety management targets based on their actual production and operational conditions. They systematically advance related work to ensure the
stable operation of the health and safety management system. All established targets for the year were achieved.
2025 Targets SNS Sunny Seal UTEC Sun Seals NDIV Achievement Status
Incidence Rates of Serious Injury and Above Accidents Fire
Accidents and Occupational Diseases 0 0 0 0 0 Achieved
Rate of Minor and Slight Injury Accidents per 1000 People ≤2.5 ≤6.5 ≤5.2 ≤5.5 ≤5.8 Achieved
Rate of Slight Injury Accidents per 1000 People ≤1.2 ≤3.2 / / ≤5.2 Achieved
Near-Miss Accidents ≤2 ≤2 ≤1 ≤1 ≤2 Achieved
Major Near-Miss Accidents 0 0 0 0 0 Achieved
562025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Supply Chain Management
Supply chain management is a key pillar supporting SNS?s steady operations and long-term value creation. We establish sound management systems and collaborative mechanisms continu-
ously optimise the full lifecycle management of our suppliers persistently enhance the overall resilience of our supply chain and promote a collective transition toward green and sustainable
development across the upstream and downstream industry chain.Governance
SNS places great importance on the stability and reliability of its supply chain continuously building and improving its supplier management system and optimising full lifecycle management.The Company has established a Procurement Department which determines the overall requirements for supplier management for the Company and its holding subsidiaries. It also formulated
a series of documents including the Procurement Control Procedure and the Supplier Management System. Each holding subsidiary revises and adjusts these documents based on their actual
business conditions and in accordance with the Company?s system requirements.Strategy
The Company closely monitors domestic and international market changes promptly assesses potential supply chain risks and updates its procurement strategies accordingly. By promoting
domestic substitution developing local suppliers and implementing a ?dual-supplier? strategy for key materials we ensure the controllability and resilience of our supply chain. We conduct
systematic reviews and in-depth analyses of risk nodes throughout the entire chain from procurement to delivery and have built a ?risk-impact-response? risk management framework cover-
ing dimensions such as laws and regulations market fluctuations quality defects and environment health and safety.Risk Factors Risk or Opportunity Impact/Consequences Response Measures
To meet compliance requirements procurement costs
Updates or Changes in Monitor the latest legal and regulatory requirements establish channels for cost
may increase or decrease and procurement channels Changes in order delivery times
Laws and Regulations inquiries conduct timely monitoring and adopt corresponding countermeasures.may contract or expand.The Company may face difficulties in procuring im-
Global Market Changes ported products while domestic suppliers encounter Impacts on order delivery Stay updated with the latest market information to reduce decision-making risks.obstacles in obtaining certifications.Non- conforming quality of raw materials or supplies Strengthen communication with suppliers; involve technical and quality departments
Substandard Supplier Impacts on the Company?s
leads to processed products failing to meet quality in the review management and on-site operational guidance of suppliers; and
Quality product quality and reputation
standards and affects product delivery times. supervise supplier compliance.Occupational Health Relevant parties fail to comply with standard operating Occurrence of traffic accidents Sign HSE Management Agreements with contractors and other relevant parties;
and Safety procedures for vehicle entry/exit and on-site work. and personal injuries provide on-site operational guidance through procurement personnel.
572025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Impact Risk and Opportunity Management
Supplier Lifecycle Management Supplier Capacity Building
The Company implements strict controls over all stages of the supplier lifecycle from admission and evaluation to exit to standardise The Company is committed to building an open
supplier conduct and effectively prevent potential supply chain risks. In 2025 we revised management systems such as the Supplier collaborative and trust-based supplier coopera-
Management System and the Procurement Control Procedure refining the supplier management processes and procedures based on tion mechanism upgrading the unidirectional
actual conditions and clarifying aspects like supplier review stages and scoring criteria. procurement relationship to a mutually empower-
ing value partnership to enhance the supply chain?s
comprehensive capabilities in technological
innovation quality standards and risk prevention
and control. Through specialised exchange and
We collect supplier qualification information through various channels (including quality management system occupational training sessions covering key areas like
health and safety management system energy management system and product certifications) complete the Supplier
cutting-edge product technology quality improve-
Admission Process in the OA system and upload the relevant supplier qualification documents.ment initiatives and production processes the
A specialised supplier evaluation team composed of cross-departmental members from quality safety and procurement Company provides analyses of quality issues and
conducts an internal review and scoring of the supplier?s qualification information. Suppliers deemed qualified are included interpretations of documents and policies signifi-
in the List of Qualified Suppliers. cantly strengthening suppliers? overall capacity for
technological innovation response quality
assurance and compliance collaboration. During
the Reporting Period the Company conducted
We establish scoring criteria based on dimensions such as production processes technical capabilities and product testing. approximately 20 supplier exchange and training
We conduct regular supplier assessments periodically update the Supplier Assessment Record Form and classify suppliers activities working closely with suppliers to advance
into four tiers—A B C and D—based on their scores. improvements in production and management.Suppliers rated as tier D are deemed unqualified. Their qualification is revoked and supply is suspended and they are re-
quired to make timely rectifications.We conduct annual supplier evaluations and terminate cooperation with unqualified suppliers who fail to complete recti-
fications in a timely manner or meet other exit criteria.Supplier full lifecycle management process
58
Admission Tiered Management Exit2025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Indicators and Targets
Responsible Sourcing
The Company incorporates ESG factors into its Supply Chain Management Targets Target Setting 2025 Progress
supplier management. During the screening evalua-
tion and cooperation processes we focus on basic
compliance in areas such as quality business ethics To conduct special interviews with Supplier Integrity Management
environment health and safety. We give priority to 40 key suppliers in 2025 to deepen
suppliers that have obtained third-party certifica- joint efforts in building a responsi- Achieved
tions in environmental management occupational ble supply chain.health and safety management or green products
and explicitly require suppliers to use environmental-
ly friendly packaging materials.We stipulate suppliers? environmental and social
responsibilities through contracts agreements
clauses and letters of commitment. In 2025 the Key Performance
Company refined the breach of contract clauses in
the Supplier Integrity Agreement to reinforce the
baseline for business ethics and compliance. We also In 2025 SNS reported 20
conducted special anti-bribery interviews with 40 key 1111 domestic suppliers overseas suppliers
suppliers to deepen our joint efforts in building a
clean supply chain.In 2025 SNS and its subsidiaries signed environmen- 240 555
tal and safety responsibility documents such as the
suppliers underwent on-site assessments suppliers underwent off-site assessmentsHSE Management Agreement with all on-site
contractors. Concurrently we provide safety and
environmental training for suppliers working on the
Company?s premises and maintain records of the HSE
Training for On-site Relevant Parties.
592025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Information Security and Privacy
Information Security Management System
SNS adheres to the information security and privacy protection management philosophy of Disaster Recovery Mechanism
?safe controllable compliant and efficient? strictly complies with relevant laws and regula-
A ?Two Locations Three Centres? disaster recovery architecture has been
tions such as the Cybersecurity Law of the People’s Republic of China and continuously established to effectively respond to emergencies such as natural disasters
improves its data protection and information security system across all business areas to hardware failures and cyberattacks providing support for data integrity
ensure the security of information and data privacy for employees customers suppliers and and business continuity.other stakeholders. The Information Department is uniformly responsible for the permission
management of application systems and network infrastructure throughout the Company Internal and External Monitoring
regularly reviews and confirms authorised personnel and strictly controls access to critical
data and information. Internal inspections and quarterly reviews are conducted on system
performance security vulnerabilities and data backup integrity to ensure
that equipment and systems are in good operating condition and to assess
The Company has formulated and implemented documents such as the Information System the effectiveness of management processes and regulations.Security Management Policy the Network Infrastructure Security Standards and the
Software Management System building a defence line against information security risks at The Company continuously commissions third-party professional security agencies to conduct external threat monitoring and penetration testing
the institutional level. During the reporting period the Company added the Emergency establishes standardised response procedures for identified risks and
Response Plan for Network Equipment Failures and the Emergency Response Plan for Server ensures that all identified vulnerabilities are promptly remediated within
Failures to enhance the stability of its business operations. the stipulated time frame.Emergency Drills
Information Security Management Measures Quarterly specialised and annual comprehensive emergency drill plans are formulated based on the criticality of each system.Attack and defence drills are organised annually to identify potential
The SNS Network Security Technical Document specifies basic security policy requirements security vulnerabilities and propose targeted improvement recommenda-
including prohibiting cross-departmental computer access forbidding the installation of tions.non-work-related software separating office and personal network environments and
establishing a critical data backup mechanism; it standardises the execution of business Cybersecurity Training
processes in all departments provides robust and reliable information security infrastruc-
ture and audits and supervises the effectiveness of security measures through daily inspec- Cybersecurity training is organised annually to enhance the cybersecurity
tions cybersecurity training and emergency drills. awareness of all employees.
602025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Information Security Culture
In 2025 the Company conducted several training activities focused on information security
SNS data backup and recovery drill Case
and privacy protection to enhance employees? cognitive abilities and awareness of network
and data security covering aspects from cutting-edge technical knowledge to daily opera-
tional applications. The ?Huawei Cloud Certification? training covered technical content includ- To continuously strengthen its data security protection system and business
ing servers storage networking operating systems and visualisation improving employees? continuity capabilities the Company organised two comprehensive data
technical and security operation and maintenance capabilities. The ?Email Security? themed backup and recovery drills covering all business systems in June and Decem-
cybersecurity training reinforced employee security awareness through case studies. ber 2025. The drills simulated various risk scenarios including external
malicious attacks and sudden system failures to thoroughly test the integri-
ty and availability of backup data and the effectiveness of recovery proce-
dures.Key Performance Through these practical drills the Company not only verified the feasibility of
its existing backup strategies and emergency plans but also simultaneously
optimised recovery processes and enhanced the emergency response and
In 2025 SNS had no incidents of collaborative handling capabilities of its technical team thereby systemati-
data security incidents or customer cally strengthening its data recovery resilience and business continuity in
privacy breaches. real-world emergencies.Digital Transformation
SNS actively responds to the digital transformation trend proposing the ?Smart
SNS 123? and ?155 Plan? as core strategies for its digital transformation and devel-
opment focusing on intelligent manufacturing system integration data gover-
nance and AI empowerment to promote digital upgrades in all aspects of produc-
tion management and services. The Company has introduced multiple electronic
information systems in key areas such as collaborative management R&D innova-
tion and intelligent manufacturing and through the implementation of key
projects like the SNS iSeal knowledge base and after-sales service system and the
Sunny Seal FMS flexible manufacturing system it continues to enhance production
automation knowledge management and service intelligence steadily advancing
the construction of a data middle platform and key system integration to compre-
hensively boost operational efficiency and market competitiveness.
612025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Community Contribution
While pursuing corporate development SNS has always been committed to fulfilling its social SNS establishes university scholarships Case
responsibilities and giving back to the community. The Company engages with the community
through various means including supporting rural revitalisation participating in charitable The Company strengthens its industry-academia integration by jointly training
activities and promoting educational development contributing to coordinated regional postgraduate students with universities opening up corporate internship
development and social harmony. opportunities to partner universities and establishing scholarships.SNS supports rural industrial development Case The Company and UTEC have separately donated scholarships to the College
of New Energy at China University of Petroleum (East China) and the College
of Polymer Science and Engineering at Qingdao University of Science and
In 2025 the Company provided targeted assistance to Ganluo County Sichuan
Technology with a cumulative donation of RMB 450000 over the past three
Province with a total investment of over RMB 400000 which included:
years.Consumption-driven aid programmes
Invested RMB 178100 in purchasing agricultural products such as rice and
oil from the Ganluo area to support farmers? income and agricultural develop-
ment;
Promoting local industry
Collaborated with a garment manufacturing enterprise in Liangshan Prefecture to
custom-purchase 1200 sets of protective workwear investing RMB
222000 to boost the local manufacturing industry and support local
employment.
62Governance
SNS has built a corporate governance system with clear responsi-
bilities and effective checks and balances adhering to the bottom
line of compliant operations and practicing ethical business
conduct. The Company has established robust reporting and
protection mechanisms diligently fulfils its information disclosure
obligations communicates with all stakeholders with integrity
fairness and transparency protects investor rights and shares
the value of its sustainable development.SDGs Addressed in This Chapter
Material topics covered in this chapter
*Corporate Governance
*Business Ethics
*Compliance and Risk Management
*Stakeholder Communication
632025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Corporate Governance
Governance Structure
SNS has established a governance structure comprising the Meeting of Shareholders the SNS values the diverse backgrounds and independence of its Board of Directors members.Board of Directors and its specialised committees and management ensuring that In the director selection process the Company comprehensively considers candidates?
responsibilities are clearly defined and functions are distinct among the organs of power educational backgrounds professional fields capabilities and practical experience to
decision-making supervision and management. In 2025 in accordance with the require- ensure the Nomination Committee provides fair review opinions and that the governance
ments of laws and regulations such as the Company Law and the Guidelines for the Articles level makes comprehensive scientific and effective decisions. In 2025 the Company?s
of Association of Listed Companies the Company transitioned away from the Board of Board of Directors converted a non-independent director seat into a seat for an employee
Supervisors with the Audit Committee assuming its statutory duties and correspondingly representative director who will be elected by the employee representative congress
updated corporate governance documents to improve internal management mechanisms. thereby optimising the composition of the Board of Directors.The Company?s Board of Directors has four specialised committees: the Audit Committee
the Remuneration and Appraisal Committee the Nomination Committee and the Strategic
Development and ESG Committee which provide professional support for scientific Key Performance
decision-making. Each committee strictly adheres to the Articles of Association and its own
working rules effectively fulfilling its duties and ensuring the soundness of corporate
governance and the stability of operations.As of the end of this reporting period the Board of Directors of SNS
comprised a total of 9 members
Audit Committee
Meeting of Shareholders including 1 female director 3 independent directors and 1 employ-
ee representative director.Nomination Committee
Board of Directors During the reporting period the Company held 4 meetings of the
Strategic Development Board of Directors 4 meetings of the Board of Supervisors and 11
and ESG Committee special committee meetings.Management
Remuneration and
Appraisal Committee
The Company?s organisational structure
642025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Director Remuneration
The Board of Directors? Remuneration and Appraisal Committee is responsible for drafting
remuneration plans and incentive programmes for the Company?s directors and senior
management and for supervising the implementation of these plans. During the reporting Diverse communication platforms
period the Company formulated the Director and Senior Management Compensation The Company communicates with various types of investors through multiple channels
Management System which sets out the remuneration for directors and senior manage- including Meetings of Shareholders institutional research the ?Easy Interaction? platform
ment and establishes a scientific and effective incentive and restraint mechanism. and an investor hotline. Dedicated personnel are responsible for the investor hotline and
email to ensure that questions from investors including small and medium-sized
The Company has established a performance-oriented remuneration and incentive system shareholders receive professional and timely responses.formulating senior management?s remuneration plans based on their primary responsibili-
ties job competency past annual compensation and the Company?s operating perfor-
mance to incentivise management to create long-term stable value for shareholders.Standardised information disclosure
Shareholder Rights Protection All publicly disclosed information is strictly governed by internal policies to ensure it is
detailed truthful complete and accurate.SNS places great importance on the protection of shareholder rights. The Company has
formulated and continuously improves policies such as the Investor Relations Management
Policy and the Information Disclosure Policy to provide fundamental institutional support for Investor rights protection
safeguarding investors? rights to know and participate in decision-making while consistently
conducting transparent and efficient investor communication and information disclosure.During the reporting period the Company formulated the Public Opinion Management Policy
to specify response measures for various potential instances of false or negative public
opinion preventing inaccurate information from interfering with investor judgment and Key Performance
decision-making and ensuring timely professional and accurate communication with
investors.In 2025
The Company maintains smooth and timely information exchange with small and
medium-sized shareholders and institutional investors; in 2025 we held 3 Meetings of Share- SNS received an A rating in the information
holders convened 2 performance briefings organised multiple research activities and disclosure evaluation among ChiNext-listed
responded to 235 questions on the ?Easy Interaction? investor relations platform achieving a Companies of the Shenzhen Stock Exchange
100% response rate. Concurrently the Company participated in 15 training sessions organised for the sixth consecutive year.
by entities such as the Sichuan Securities Regulatory Bureau the Shenzhen Stock Exchange
the China Association for Public Companies and the Sichuan Association for Public Companies
to enhance its investor relations management capabilities.
652025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Business Ethics
Business Ethics Management System
SNS adheres to operating with integrity and fair competition. Through a combination of institutional regulations process controls cultural promotion and company-wide oversight it ensures
that ethical principles are integrated into all business activities and employee conduct prohibiting any form of corruption bribery monopolistic behaviour or improper transfer of benefits.The Company has formulated the Employee Integrity System which clarifies the basic requirements and code of conduct for employees to work with integrity and requires all employees to sign
an Integrity Commitment Letter pledging to conduct fair and transparent business activities based on four principles: ?complying with laws and regulations fulfilling duties responsibly maintain-
ing integrity and self-discipline and cultivating personal virtue? and to prohibit and resolutely oppose any form of corruption such as bribery and fraud. In key business areas such as procure-
ment sales and partnerships the Company deeply embeds the requirements of honesty and integrity throughout the entire business chain by signing policy documents like the Procurement
Integrity Agreement and the Procurement Integrity Commitment Letter continuously strengthening the Company?s ethical and compliance defences.Integrity Risk Prevention and Control
The Company conducts an annual company-wide special assessment of integrity risks. By examining multiple dimensions — including job responsibilities business processes institutional
mechanisms the external environment and historical cases — through methods such as departmental self-inspections interviews and data analysis it systematically identifies potential risk
points and corresponding control responsibilities for each position and business segment resulting in a dynamic Integrity Risk Prevention and Control List. The Company requires personnel in
important critical and sensitive positions to sign and acknowledge the Integrity Risk Prevention and Control List understand potential risks and key control measures and thereby enhance
their risk awareness and self-discipline.In 2025 focusing on key areas such as procurement sales and project cooperation the Company identified two Level-1 integrity risk positions seven Level-2 integrity risk positions and
twenty-six Level-3 integrity risk positions and implemented control measures including refining institutional constraints strengthening process reviews signing special commitments and
conducting targeted interviews and training placing personnel in these positions under key supervision and education.To prevent integrity risks in the procurement process the Company has established a dual-constraint mechanism with internal and external coordination. On one hand the Company signs a
Procurement Integrity Agreement with key suppliers which explicitly prohibits improper practices such as commercial bribery. The Supervision and Audit Department also organises annual
integrity-themed meetings for new major suppliers to emphasize the Company?s procurement code of conduct. On the other hand the Company requires all procurement personnel to sign a
Procurement Integrity Commitment Letter to regulate and supervise procurement activities and promote fair and honest business transactions. In 2025 the Company conducted separate
integrity interviews with procurement staff and suppliers to strengthen its integrity promotion efforts.
662025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Business Ethics Training
Through a combination of regular publicity and education case studies and institutional constraints the Company works to Whistleblowing Email
internalize the ethical principle of integrity and self-discipline from an external regulation into a conscious value shared by all
employees ensuring it is genuinely followed in daily decision-making and business operations. Supervision and Audit Department:
ics@sns-China.com
SNS deepens warning education to fortify its integrity culture Case
Disciplinary inspection:
In October 2025 in accordance with its annual learning plan SNS organ- liuxiaoqiang@sns-China.com
ised a special educational session for its managers and employees to
watch warning education films integrating integrity education into
routine learning management to advance the construction of a corpo-
rate integrity culture. This session used typical cases as warnings
analysing typical problems of disciplinary and regulatory violations to
help managers and employees deeply understand the importance and
necessity of strictly observing discipline and rules and to guide them in
establishing a fine work style of being pragmatic realistic and working Key Performance
with integrity thereby solidifying the ideological foundation of integrity Warning educational video session
for the Company?s high-quality development. In 2025 SNS
Organised 12 integrity warning
education activities special
Whistleblower Protection Mechanism anti-commercial bribery training sessions
and compliance culture presentations
The Company has established accessible reporting channels and a supervisory mechanism with internal and external coordina-
tion encouraging employees suppliers and other partners to report improper business conduct either by name or anony-
mously through various channels such as the OA system a dedicated reporting email and executive reception days. All reports Achieved a 100% signing rate for the
are handled centrally by the Supervision and Audit Department which completes its investigation verification and feedback employee Integrity Commitment Letter
within 5 working days of receiving a report. The Company adheres to the principles of objectivity fairness and sufficient
evidence and handles verified reports in accordance with laws and regulations.The Company places high importance on protecting the rights of whistleblowers and strictly enforces a confidentiality policy
regarding their identities and the content of their reports. For reports verified to be true the Company will provide correspond-
ing rewards based on the circumstances and impact effectively protecting the legal rights of whistleblowers and encouraging
all personnel to participate in integrity oversight. As of the end of the reporting period the Company had not received any
reports or complaints regarding business ethics nor had any negative incidents related to business ethics occurred.
672025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Compliance and Risk Control
SNS is committed to lawful and compliant operations. It continuously builds and improves a comprehensive risk management system to systematically identify assess and respond to various
potential risks. By strengthening internal controls the Company solidifies its foundation for development safeguarding its sustainable and high-quality development.Governance
The Company adheres to the core principles of ?business-led supervised and balanced and full participation? to build a compliance management mechanism with clear responsibilities and
efficient operation deeply embedding compliance requirements and risk control into all operational segments including research and development procurement production and sales and
implementing effective oversight and checks and balances on key processes and decisions through independent audit supervision and risk management functions thereby effectively enhanc-
ing its level of compliant operation and risk resilience.Division of Responsibilities Control Model Supervision and Audit
Each business department is responsible for implementing Focusing on key business orders and critical process links The Supervision and Audit Department regularly
business standards and conducting preliminary identification the Company has established a dynamic risk prevention conducts company-wide internal audits to systemati-
and control of potential risks in daily business processes. and control mechanism primarily based on ?pre-event cally check the implementation of compliance and
prevention and in-process control? supplemented by internal controls.The Supervision and Audit Department tracks oversees and ?post-event response?.inspects the implementation by business departments to Each subsidiary undergoes an internal audit biannu-
ensure all control measures are in place and conducts special ally where independent supervision and inspection
audits and risk assessments on key links and critical processes. promptly identify issues and urge rectification.Company leadership and department heads fulfil overall
management and supervision responsibilities conducting
oversight and inspections of key orders and critical processes.Compliance and risk management mechanism
682025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Strategy SNS internal audit empowers and enhances UTEC?s compliance management Case
The Company is committed to continuously improving its compliance
and risk management system promoting the concept of compliant In November 2025 the SNS internal audit team
operations and building a culture of compliance across the entire organi- visited UTEC to conduct a special supervisory
sation. Compliance requirements are treated as a necessary agenda item audit and compliance exchange. This audit
for regular work meetings and employee compliance awareness is closely followed the main theme of ?identifying
strengthened through consistent emphasis and communication. The problems clarifying direction and promoting
Company?s Supervision and Audit Department regularly conducts rectification? proceeding systematically through
internal audits to review the Company?s overall compliance status three key stages: report issuance rectification
driving the integration of a compliance culture into daily management recommendations and management discus-
and providing a solid guarantee for sustainable operations. sions. It also innovatively adopted an integrated
?supervision & audit + training? model to strate- UTEC special supervisory audit and
gically guide UTEC?s operational management. compliance exchange
Impact Risk and Opportunity
Through this supervisory audit and exchange UTEC strictly implemented all rectification recommendations
Management upgrading its internal management to be more refined and standardised. This initiative not only helped
UTEC take a solid step forward in standardised management and compliant operations but also provided
In accordance with departmental systems and procedural documents strong support for the development of SNS?s overall risk prevention and control system.such as the Integrated Management Manual the Company?s various
functional departments regularly conduct risk identification measure
assessment and execution monitoring in key areas including environ-
ment quality health and safety ensuring that risks are controlled and
processes are optimised at every stage.The Company has established a dedicated internal audit team with team Indicators and Targets
members and department heads jointly participating in audits. They use
methods such as face-to-face interviews record sampling and
document reviews to monitor the implementation of risk response
measures evaluate their effectiveness and enhance the efficacy and Key Performance
responsiveness of the internal control system. In 2025 the Company
conducted special internal audits for functional departments such as
safety R&D procurement and information management as well as for In 2025 SNS held
each subsidiary. The audits covered aspects including system implemen-
tation process compliance and risk management aiming to promptly 12 internal audit communication meetings and compliance culture training sessions.identify risk points and propose suggestions for improvement. During
the reporting period the Company did not identify any material risks or
compliance violations.
692025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
ESG Performance Indicators5
Economic Performance Environmental Performance8
Indicator Unit 2025 2024 2023 Indicator Unit 2025 2024 2023
Environmental RMB10000
Total revenue RMB 176883.94 156652.37 136935.98 investment 216.00 130.68 97.6610000
Operating Environmental Number of environmen-
Performance Net profit attributable to Management tal penalties
Times 0 0 0
shareholders of the RMB
10000 38539.87 39245.44 34667.55listed company Total amount of
environmental penalties RMB 10000 0 0 0
Total water withdrawal Tonnes 85391 76673 72489
Governance Performance6
Total water
consumption Tonnes 85391 76673 72489
Water
Indicator Unit 2025 2024 2023 Withdrawal Water consumption Tonnes/RMB
and intensity million in revenue 48.28 48.95 52.94
Consumption9
Recycled water
Number of business consumption
Tonnes 1308.69 1305.59 584.35
ethics and anti-corrup- Times 12 6 5 Percentage of recycled
tion training water consumption % 1.53 1.70 0.81
Employee signing rate Air Pollutant Emissions
Business Ethics of the Integrity % 100 100 100
Commitment Letter
Nitrogen oxide (NOx) Tonnes 0 0 0
Exhaust Gas
Management Non-methaneCoverage rate of hydrocarbon (NMHC)） Tonnes 0.636 0.157 0.083
business ethics % 100 100 100
training (suppliers)7
Particulate matter (PM) Tonnes 0.008 0 0.014
Wastewater Discharge
Wastewater Industrial wastewater
Management discharge10 Cubic meters 26551.48 17774.24 18914.76
Domestic sewage
discharge Cubic meters 39977.71 35143.99 34845.55
5For data not otherwise specified the statistical scope is the Company’s consolidated financial statement scope.
6The statistical scope covers SNS and its domestic controlled subsidiaries excluding KS GmbH.
7The statistical scope includes the number of suppliers with whom the Company conducted awareness campaigns through
supplier integrity agreements.
8The statistical scope for 2023 and 2024 data covers SNS and its domestic controlled subsidiaries excluding KS GmbH.
9Due to a change in the statistical scope of Sunny Seal the data for recycled water consumption and the recycled water
consumption ratio for 2023 and 2024 have been adjusted accordingly.
10Due to a change in the statistical scope of Sunny Seal the industrial wastewater discharge data for 2023 and 2024 have
been adjusted accordingly.
702025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Indicator Unit 2025 2024 2023 Indicator Unit 2025 2024 2023
Wastewater Pollutant Emissions Natural gas Cubic meters 27449 24743 30328
Ammonia nitrogenTonnes 1.006 0.984 0.149 Liquefied petroleum gas Kilograms 6468.00 7069.30 4916.00(NH3-N)）
Direct energy Tonnes of standard
Wastewater Chemical oxygen consumption intensity coal equivalent / RMB 0.05 0.06 0.07
Manage- demand (COD) Tonnes 3.637 4.689 0.551 million in revenue
ment
Indirect Energy Consumption
Total phosphorus Tonnes 0.080 0.006 0.002
Energy and Total indirect energy Tonnes of standard
consumption coal equivalent 1079.76 925.13 833.26Emissions
Suspended solids Tonnes 0.401 0.030 0.040
Purchased Electricity kWh 8785700.70 7527471.74 6779950.39
Waste Generation and Disposal Of which: Purchased
renewable electricity kWh 486815.70 499900 548700
Total hazardous waste Self-generated and
emissions Tonnes 91.22 82.94 76.07 self-consumed renewable kWh 787931.00 0 0
electricity
Hazardous waste Tonnes/RMB
emission intensity million in revenue 0.05 0.05 0.06
Percentage of renewable
energy in total electricity % 13.32 6.64 8.09
consumption
Total non-hazardous Indirect energy Tonnes of standard coal
waste emissions Tonnes 813.85 539.75 459.73 consumption intensity equivalent/RMB million 0.61 0.59 0.61in revenue
Waste Non-hazardous waste Tonnes/RMB Tonnes of CO2
Management emission intensity million in revenue 0.46 0.35 0.34 Total Scope 1 emissions equivalent 157.26 161.22 166.86
and Circular
Economy
Total waste emissions Tonnes 905.07 622.69 535.80 Tonnes of CO Total Scope 2 emissions 2equivalent 4403.22 4038.97 3637.83
Greenhouse
Total waste emission Tonnes/RMB Gas
intensity 0.51 0.40 0.39 Emissions13 Total Scope 1 + 2 Tonnes of CO million in revenue 2
emissions equivalent 4560.48 4200.19 3804.69
Volume of non-hazardous Tonnes 496.43 108 60 Scope 1 + 2 emission Tonnes of CO2 waste recycled/reused11
intensity equivalent/RMB million 2.58 2.68 2.78in revenue
Direct Energy Consumption
11The statistical subjects are primarily recycled iron filings.
Total direct energy Tonnes of standard 12The standard coal conversion factor used refers to the General Principles for Calculation of Comprehensive Energy Consump-
consumption coal equivalent 84.52 88.33 92.15 tion (GB/T 2589-2020).
13Direct emissions (Scope 1) refer to greenhouse gas emissions generated from the consumption of natural gas diesel and
Energy and Gasoline Liters 35381.15 38546.80 39967.18 gasoline while indirect emissions (Scope 2) refer to greenhouse gas emissions generated from the consumption of purchased
Emissions12 electricity. The selection of greenhouse gas emission factors is based on the relevant requirements of technical documents
such as the 2006 IPCC Guidelines for National Greenhouse Gas Inventories (2019 Refinement) the national average grid
Diesel Liters 2940 3172 2057 emission factor of 0.5306 kgCO?/kWh for 2023 as stated in the Announcement on the Release of the 2023 Power Sector Carbon
Dioxide Emission Factors issued by the Ministry of Ecology and Environment and the National Bureau of Statistics and the
direct carbon dioxide emission coefficient for electricity consumption in 2024 published by the German Federal Environment
Agency (UBA).
712025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Social Performance14
Indicator Unit 2025 2024 2023 Indicator Unit 2025 2024 2023
Number of Employees Persons 1821 1771 1571 Employee Turnover
Diversity and
Employee Type Structure Equal Number of employee departures Persons 75 62 80Employment
Employee turnover rate % 4.30 3.68 5.44
Number of full-time employees Persons 1745 1686 1470
Employee Welfare
Number of part-time employees Persons 3 0 0
Social insurance coverage rate % 100 100 100
Number of flexible-term employees Persons 73 85 101
Employee Employee benefits coverage rate % 100 100 100
Percentage of full-time employees % 95.83 95.20 93.57 Rights and
Welfare Investment in work-related injury insurance and work safety RMB 888940.04 729904.53 590257.02
Percentage of part-time employees % 0.16 0 0 liability insurance
Coverage rate for work-related
Employee Gender Structure injury insurance and work safety % 100 100 100
liability insurance
Number of male employees Persons 1334 1298 1129 Employee Training System
Number of female employees Persons 411 388 341 Total investment in employee RMB 445465.29 434911.12 875887.21
Diversity and training
Equal Number of employee training
Employment Percentage of male employees % 76.45 76.99 76.80 sessions Times 339 271 260
Employee Number of employees supported for
Percentage of female employees % 23.55 23.01 23.20 Training and
academic or professional Persons 97 139 129
Development qualifications
Investment in support for employee
academic or professional qualifications RMB 220903.50 334915.78 567066.15Employee Age Structure
Number of employees trained15 Persons 1660 1602 1470
Number of employees under 30 Persons 510 488 390
Employee training coverage rate % 100 100 100
Number of employees aged 30-50 Persons 1023 994 932
Work Safety Incidents
Number of employees over 50 Persons 212 204 148 Number of work-related employee
fatalities Persons 0 0 0
Percentage of employees under 30 % 29.23 28.94 26.53 Occupational
Health and Work-related employee fatality rate % 0.00 0.00 0.00
Safety
Percentage of employees aged 30-50 % 58.62 58.96 63.40 Number of workdays lost due to
work-related injuries Days 689 133.68 221
Percentage of employees over 50 % 12.15 12.10 10.07 Lost time injury frequency rate (LTIFR)16 / 2.23 2.54 2.55
14The statistical scope for the 2023 and 2024 data is consistent with the Company’s 2024 Environmental Social and Governance
Report.
15The statistical scope for 2025 data covers SNS and its domestic controlled subsidiaries excluding KS GmbH.
16Lost Time Injury Frequency Rate (LTIFR) = (Number of lost time injuries / Total hours worked) x 1000000
722025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Indicator Unit 2025 2024 2023 Indicator Unit 2025 2024 2023
Number of work-related injuries Times 8 9 8 R&D investment Ratio % 5.08 4.84 5.46
Total employee working hours Hours 3593376 3542000 3142000 Number of R&D personnel Persons 262 250 223
Fatality rate（FAR）17 % 0 0 0 Percentage of R&D personnel % 15.01 14.83 15.17
Occupational Disease Prevention and Control Patent-Related Performance21
Number of occupational disease Persons 0 0 0 Number of patent applications Cases 31 33 16
cases
Compliance rate of hazardous work Technological Number of patents granted Cases 38 19 25
environments inspected by external % 100 100 100 InnovationOccupational
Health and third parties Number of valid patents Cases 201 183 171
Safety Pass rate of occupational health
check-ups for employees exposed % 100 100 100
to hazardous operations Invention Patent-Related Performance22
Number of invention patent
Occupational Health and Safety Training applications Cases 14 12 7
Total number of employees receiving Peson- Number of invention patents granted Cases 17 7 4
safety training18 times 5605 4127 /
Total hours of safety training for
Times 11607.50 9454.30 / Number of valid invention patents Cases 64 47 39employees
Number of safety drills Times 28 25 25 Cybersecurity IncidentsNetwork and
Data Security23
Peson-
Number of participants in safety drills 938 1614 1620 Number of data security incidents Times 0 0 0times
Supplier Type20 Community Welfare
Domestic suppliers Numbers 1111 1175 1155 Social Total external donations RMB 10000 2.50 17.50 25.00
Contribution24
Overseas suppliers Numbers 20 17 18 Investments in rural revitalisation RMB 10000 40.01 40.33 0
Supplier
Management19 Supplier Assessment
17Fatality Rate (FAR) = (Number of employee fatalities / Total hours worked) x 1000000
Number of suppliers subject to 18The statistical methodology for the 2023 data was inconsistent; therefore it has not been disclosed.on-site assessment Numbers 240 126 124 19The statistical scope for 2025 data covers SNS and its domestic controlled subsidiaries excluding KS GmbH.
20In 2025 the Company optimised statistical methodology for suppliers (by eliminating duplicate supplier counts);
Number of suppliers subject to
off-site assessment Numbers 555 511 466 therefore supplier data for 2023 and 2024 has been adjusted accordingly.
21Same as footnote 19.
Innovation and R&D Management 22Same as footnote 19.Technological
Innovation 23Same as footnote 19.R&D investment RMB 10000 8979.18 7577.20 7474.09 24Same as footnote 19.
732025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Indicator Index Table
Index to the Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report (For Trial Implementation)
Article Corresponding Topic Disclosure Chapter Article Corresponding Topic Disclosure Chapter
Chapter I: General Provisions Article 26
Section 1: Energy and Carbon Management
Article 11 Responding to Article 27 Responding to Climate Change
Climate Change
Article 12 ESG Management Article 28 R&D and Innovation
Article 13 Emissions and Waste Management
Article 14 Ecological ProtectionESG Management Article 29 /
Environmental Compliance
Article 15 Energy and Carbon Management Management
Chapter II: Article 16 / Section 2: Pollution Article 30 Pollutant Emissions
Sustainability Prevention and Emissions and Waste Management
Information Article 17 ESG Management Ecosystem Protection Article 31 Waste Treatment
/
Disclosure Article 18 Energy and Carbon Management Ecosystem and Biodiversity Article 32 Protection Ecological ProtectionFramework
Product Quality and Safety Article 33 Environmental Compliance Environmental Compliance Management Management
R&D and Innovation
Customer Service Energy and Carbon ManagementArticle 34 /
Article 19
Occupational Health and Safety Resource Utilisation
Supply Chain Management
Section 3: Resource Article 35 Energy Utilisation Energy and Carbon Management
Compliance and Risk Control
Utilisation and the
Article 36 Water Resource Utilisation
Chapter III: Environmental Information Disclosure
Resource Utilisation
Energy and Carbon Management Article 37 Circular Economy
Article 20 /
R&D and Innovation
Chapter Ⅳ: Social Information Disclosure
Article 21
Section 1: Responding Article 22 Article 38 / Community Contribution
to Climate Change
Article 23 Responding to Climate Change Energy and Carbon Management Section 1: Rural
Revitalisation and Article 39 Rural Revitalisation Community Contribution
Article 24 Social Contribution
Article 40 Social Contribution Community Contribution
Article 25
742025 SNS Environmental Social and Governance Report Introduction Environment Social Governance Appendix
Article Corresponding Topic Disclosure Chapter Reader Feedback
Article 41 /
Section 2: Innovation R&D and Innovation Thank you for reading the 2025 SNS Environmental Social and Governance (ESG) Report. To
Drive and Article 42 Innovation Drive provide you and other stakeholders with more valuable information and to help SNS enhance ESG
Technological Ethics management capabilities and standards the Company sincerely welcomes your comments and
Article 43 Technological Ethics / suggestions on the report. Please provide your feedback through the following channels:
Supply Chain Management
Product Quality and Safety
Article 44 /
Customer Service Address: No. 8 Wuke West 4th Road Wuhou Telephone: 028-85542909
Information Security and Privacy District Chengdu Sichuan Province Email: ir@sns-china.com
Section 3: Postcode: 610045
Article 45 Supply Chain Security Supply Chain Management
Suppliers and
Customers Equal Treatment of Small and Article 46 Medium-Sized Enterprises /
1. What is your overall assessment of the entire Report
Safety and Quality of Products Product Quality and Safety
Article 47 and Services
Customer Service 〇 Good 〇 Fairly Good 〇 Average 〇 Poor
Data Security and Customer
Article 48 2. How would you rate the clarity accuracy and completeness of the information data and Privacy Protection Information Security and Privacy
indicators disclosed in this Report
Article 49 / Employee Rights and Development
Section 4: Employees 〇 Good 〇 Fairly Good 〇 Average 〇 Poor
Article 50 Employees Occupational Health and Safety
3. Do you think this Report fully reflects the performance of SNS in environmental social and
Chapter V: Disclosure of Information on Sustainability-Related Governance governance aspects
Article 51 / ESG Management 〇 Good 〇 Fairly Good 〇 Average 〇 Poor
Section 1: Sustainabili- 4. Do you find the text in this Report to be well-organised clear and easy to understandESG Management
ty-Related Governance Article 52 Due Diligence
Supply Chain Management 〇 Good 〇 Fairly Good 〇 Average 〇 Poor
Mechanisms
Article 53 Stakeholder Communication ESG Management 5. Do you think the layout and design of this Report aided your understanding of the
information
Article 54 /
〇 Good 〇 Fairly Good 〇 Average 〇 Poor
Section 2: Business Anti-Commercial Bribery and
Article 55
Conduct Anti-Corruption
Business Ethics
6. In your opinion which content in this Report needs the most improvement
Article 56 Anti-Unfair Competition
Chapter VI: Article 57 / Indicator Index Table 7. Do you have any comments or suggestions regarding the Company’s ESG report and ESG
Appendices and work
Definitions Article 58 / /
75
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