SUSTAINABILITY REPORTShenzhen INOVANCE Technology Co., Ltd.

CONTENTS

Introduction toINOVANCECompany ProleBusiness LayoutCore BusinessAnnual Key Peormance

About This Report Chairman's Statement

002004

EmpoweringDecarbonizationAddressing Climate ChangeStrengthening Energy ManagementInnovation Green ProductsJointly Building a Net-zero FutureEcosystem Protection

Sustainability andCorporate GovernanceSustainability ManagementStrengthening Corporate GovernanceCompliant and Robust Operation

Focus on CustomerSatisfactionStrict Product Quality ControlImproving Customer Seices

Innovation DrivenDevelopmentR&D Innovation FocusData Privacy Protection

Inclusive and ResponsibleEcosystem Building

Building a Sustainable Supply ChainPromoting Industrial Cooperationand DevelopmentContributing to Social Development

Employee DevelopmentGuaranteeEmployee Rights and WelfareProtectionTalent Attraction and RetentionEmployee Training and DevelopmentOccupational Health and Safety

Report AppendixAppendix 1:

ESG Key PeormanceTableAppendix 2:

Index TableAppendix 3:

Description of OperatingSitesAppendix 4:

GlossaAppendix 5:

Description of 2024Material TopicsAppendix 6:

Biodiversity ImpactAssessmentAppendix 7:

Compliance Management ofKey Environmental Supeision EntitiesAppendix 8:

Independent Third-payAssurance

001001

Repoing StandardsThis repo is complied in accordance with the following guidelines and standards:

?Shenzhen Stock Exchange (SZSE)’sGuidelines of Shenzhen Stock Exchange for Self-discipline Regulation of ListedCompanies No.17 - Sustainability Repo (Trial) (hereinafter referred to as the “Guidelines No.17”)?Self-regulatory Guidelines No.3 for Companies Listed on Shenzhen Stock Exchange - Preparation of SustainabilityRepos (hereinafter referred to as the “Guidelines No.3”)?Global Sustainability Standards Board (GSSB)’s GRI Sustainability Repoing Standards (hereinafter referred to as the“GRI Standards”)?International Sustainability Standards Board (ISSB)’s Sustainability Disclosure Standard: General Requirements forDisclosure of Sustainability-related Financial Information (IFRS S1) and Sustainability Disclosure Standard: Climate-related Disclosure (IFRS S2)?Evaluation criteria of international ESG rating agencies, including MSCI, S&P, ISS, and EcoVadis?United Nations Sustainable Development Goals (UN SDGs)

About This Report

This repo is the 1st sustainability repo of Shenzhen INOVANCE Technology Co., Ltd. (hereinafter referred toas“INOVANCE,”

“the Company”or“we”). Previously, INOVANCE had published Environmental, Socialand Governance (ESG) repos for four consecutive years. The repo systematically presents INOVANCE’ssustainable development philosophy, management mechanisms and specific actions, and providesinformation on the Company’s ESG performance, target progress and achievements in 2024. The reportaims to respond to the concerns of stakeholders and strengthen communication and interaction withthem to continuously promote sustainable development.

Time PeriodThe report releases annually with information anddata spanning the period from January 1, 2024 toDecember 31, 2024. For any information and datago beyond this time frame, explanations will beplaced in where it is involved.

Scope of RepoThe information disclosed in this report coversShenzhen INOVANCE Technology Co., Ltd. andits subsidiaries. Unless otherwise specified, it isconsistent with the scope of the consolidatedfinancial statements in the annual report ofINOVANCE (Stock Code: 300124.SZ).

Contact UsINOVANCE Sustainability OceE-mail: sustainability@inovance.com Website：

http://www.inovance.com/globalAddress: INOVANCE Headquarter, 6 Lanqing 2nd Road, Luhu Community, Guanhu Subdistrict, LonghuaDistrict, Shenzhen

Data DescriptionThe text information and data used in this report are derived from the Company’s actual operating raw data,internal documents, financial reports, self-media external disclosure information and public information ofauthoritative third party. In case of any inconsistency between the relevant financial data and the Company’sannual financial report, the data in the financial report shall prevail. The report uses RMB as the currency unitof measurement.

Reliability AssuranceThe report adheres to the principles of accuracy, balance, comparability, materiality, verifiability andunderstandability. The report discloses information objectively, truthfully and completely, and does notcontain any false records, misleading statements or major omissions. The report has been reviewed andapproved by the Board of Directors, and the Board of Directors is responsible for the authenticity, accuracyand completeness of the content. To ensure consistency and comparability of information, if revisions orcorrections to previous years’information or data are involved, the reasons for restatement and the revisedcontent will be specied in the relevant sections.

Access to RepoThe repo is published in Simplied Chinese and English versions. In case of any discrepancy between the Englishand the Simplied Chinese version, the content of the Simplied Chinese version shall prevail. The digital version ofthe repo can be viewed and downloaded on INOVANCE’s ocial website www.inovance.com/global.

External AssuranceTo fully address the demands of various stakeholders and ensure the accuracy, truthfulness, and materiality ofthe disclosed information, INOVANCE engaged T?V S?D Ceication and Testing (China) Co., Ltd. to conductan independent and objective assurance in accordance with theAA1000 Assurance Standard v3(AA1000AS v3).The assurance repo can be found in the appendix to this repo.

Chairman's Statement

Carbon Reduction Goals

Over the past year, the global political and economic landscape has presenteda complex scenario, with rising policy unceainties due to geopolitical conictsand government elections worldwide. Economic growth momentum hasweakened amid political turbulence and structural challenges, characterizedby sluggish demand in global manufacturing, overcapacity, and intensifiedindust competition. Meanwhile, China has called for vigorous development ofnew quality productive forces, encouraging enterprises to pursue technologicalinnovation and build sustainable competitiveness. Against this backdrop,INOVANCE has defied the trend by leveraging technological innovation asits engine, driving transformation and upgrading towards intelligentization,digitalization, and greening. This strategy has propelled its revenue to newheights while achieving remarkable sustainable development outcomes.Guided by its proposed "2850" and "3030" decarbonization targets, INOVANCEhas refined implementation pathways focusing on energy conservation, low-carbon operations, and green supply chain development. In 2024, thecompany strengthened measures such as digital energy management,production process optimization, intelligent equipment upgrades, andenergy structure improvements, achieving significant emission reductionsin its operations. Notably, its Suzhou facility earned the provincial-level"Green Factory" award. The Company actively addresses the industry’sgrowing demand for green and low-carbon transformation by embracingthe concept of "Two Improvements and Four Reductions." It delivers moreefficient, energy-saving, material-conserving, and environmentally friendlyproducts, continuously generating both economic and ecological value.The company has also conducted green supply chain assessments for keysuppliers, fostering collaborative efforts across the value chain to build azero-carbon future.INOVANCE actively practices circular economy principles to enhanceresource utilization. Integrating environmental sustainability across productlifecycles, it emphasizes green design to reduce resource consumptionand ecological dependence during manufacturing. The company adheresto strict environmental compliance, ensuring pollutant emissions meet

standards while strengthening waste management and biodiversity risk mitigation.As a listed company, INOVANCE prioritizes "Efficient Operations, Governance First," maintaininglegal compliance while enhancing corporate governance and risk management. In 2024, itestablished a new Compensation and Evaluation Committee to optimize executive oversight.Focusing on customer satisfaction, INOVANCE intensified R&D innovation and service upgrades,releasing an enhanced quality culture framework. Through expanded service teams, optimizednetworks, and diversified channels, customer satisfaction scores rose by 1.11 points year-on-year. Collaborating with industrial partners, the company strengthens ecosystem synergiesto build sustainable supply chains. As a responsible employer, INOVANCE fosters an inclusive,safe workplace that empowers employee growth, aligning corporate development with talentadvancement. Additionally, it actively contributes to community development and charitableinitiatives.Looking ahead, INOVANCE will "Seize Inevitable Opportunities" by accelerating R&D in green,energy-ecient solutions. It aims to achieve "Extreme Speed and Quality" in meeting customerneeds while advancing intelligent-digital-green product ecosystems through energy andinformation flow integration. With aspirations to "Lead the Tide," the company strives tobecome a global sustainability benchmark in industrial innovation.

Company ProleBusiness Layout

INOVANCE has over 89 branches in Suzhou,Shanghai, Changzhou, Nanjing, Yueyang, Xi’anand Hong Kong, China, and a number of R&Dcenters in Shenzhen, Suzhou, Xi’an, Nanjing,Milan in Italy and Stuttga in Germany.INOVANCE is a high-tech company engaged in the R&D, manufacturing andsales of industrial automation control products and new energy products.The Company focuses on developing core technologies for information layer,control layer, drive layer, execution layer, and sensor layer and automation,digitalization and intelligence in the industrial sector. It is committed topromoting intelligent manufacturing, industrial upgrading, improving the qualityof life and fostering the development of industrial civilization by providing moreintelligent, precise and advanced integrated products and solutions on the basisof its independently developed industrial automation control technologies.

Türkiye

INOVANCE Türkiye

Spain

INOVANCE Spain

ItalyINOVA AUTOMATION Italy

IndiaINOVANCE India

France

INOVANCE France / IRAI

GermanyINOVANCE Europe

Core Business

The Company primarily provides core industrial automation products andsolutions for equipment automation, production line automation, and factoautomation, including AC drives, seo systems, PLCs/HMIs/CNCs, industrialrobots, high-peormance motors, precision mechanical products, pneumaticcomponents, sensors, and industrial vision systems. For the new energy vehicleindust, we provide electric drive and vehicle-mounted charging systems. Forthe elevator indust, we provide elevator control systems (including AC drives),human-machine inteaces, door systems, cables and harnesses, elevator IoTproducts, and integrated electrical solutions. For the rail transit indust, weoer traction and control systems.

Vision & MissionAdvancing industrial technology for a better world

Core Values

Customer rst, contributor oriented, uphold to openness andcooperation, strive for excellenceYear of incorporationStock code2003300124.SZListed stock exchangeSZSE

Headquaer locationShenzhen, GuangdongProvince, P.R. ChinaSeing marketsApproximately 40 countries and regions including China, India,Vietnam, South Korea, Germany, Italy, and Türkiye.

Introduction to INOVANCE

Introduction to INOVANCE / 2024 SUSTAINABILITY REPORT

Türkiye

INOVANCE Türkiye

ItalyINOVA AUTOMATION Italy

India

INOVANCE India

Notes:

The names shown in the picture are abbreviations of pa of ouroperating locations. Please refer to Appendix 3 for their full names.Locations marked with “*” are under construction.

ShenzhenShenzhen INOVANCE

TianjinTianjin BST Electrical

DongguanINOVANCE Dongguan

ChangchunChangchun WETON

SuzhouSuzhou INOVANCESuzhou INOVANCE ControlINOVANCE AutomotiveJiangsu KINGWAY

NingboEST

ChangzhouINOVANCE New Energy Changzhou

BeijingEKSYS Beijing

YueyangYueyang INOVANCE

JinanJinan INOVANCE*

ShanghaiBST/BNK CABLE

Hong Kong, ChinaINOVA AUTOMATION

JiaxingBST Machine & Electronics (Jiaxing)

ThailandINOVANCE Automotive Thailand

NanjingNanjing INOVANCE

HungaINOVANCE Technology HungaINOVANCE Automotive Hunga*

South Korea

SBC / INOVANCE KoreaDalianDalian Zhiding

FoshanMJB

Branches

United States

INOVANCE USA

Xi’an

Xi’an INOVANCE

R&D centerManufacturing centerMarketing & Seice center

Note: The rating results are based on queries as of December 31, 2024.

Indicators2024Unit

EconomicPeormance

Revenue37.04Billion RMBNet prot attributable to shareholders of the listed company4.29Billion RMBBasic earnings per share (EPS)1.60RMB per shareTotal assets57.18Billion RMBWeighted average ROE16.52%EnvironmentalPeormance

GHG intensity4.13tCO

e/RMB 1 million RevenueNewly avoided GHG emissions14,447,904tCO

e/yearTotal renewable energy consumption19,624.75 MWhEnergy saved from new energy saving projects1,458,755kWh/yearAmount of recycled/reused waste4,869.90Tons

SocialPeormance

R&D investment3.15Billion RMBPropoion of R&D investment8.50%Number of new patent applications685/Amount of Employee Training Hours719,255.90HoursCoverage rate of social insurance100%Number of paicipants in safety training sessions46,307/GovernancePeormance

Number of independent directors on the Board of Directors3/Number of investor investigation receptionOver 4,000/Amount of anti-corruption training hours1,220.17HoursNumber of major incidents violated laws and regulations0Time

Award NameAwarding Unit

National May 1st Labor AwardAll-China Federation of Trade UnionsIncluded in 2024 China ESG Top 50 EnterprisesForbes ChinaBest ESG PracticeNew Foune MagazineBest ESG DisclosureNew Foune MagazineIncluded in S&P Global’s

Sustainability Yearbook 2024 (China Edition)S&P Global

Annual Key Peormance

MSCI ESG RatingMorningstar ESG Sustainalytics ESG Risk Rating

S&P Global Corporate Sustainability Assessment ScoringCDP Climate Change RatingA23.3

45 Top 9% of the industryB Management level

Introduction to INOVANCE / 2024 SUSTAINABILITY REPORT

It is the highest decision-making and supervisory body, and is responsible forcomprehensive oversight of the Company’s ESG affairs, providing strategic guidancefor sustainability development, and exercising ultimate decision-making authority overrelevant strategies, goals, and major issues.Comprising board members and senior executives, it is responsible for reviewing anddeciding on major management matters, including the implementation and peormance ofsustainability strategies.It is responsible for formulating the Company’s sustainability strategy, reviewing ESGrisk identification results and developing risk response strategies, guiding all first-leveldepartments and subsidiaries in ESG management and tracking their progress, andreviewing the Company’s sustainability disclosure. The Sustainability Committee keepsimproving the Company’s sustainability system, facilitates cross-functional and cross-process ESG coordination, and holds regular meetings to report the progress andpeormance of the Company’s ESG management to the EMT, and to listen to their opinionsand suggestions.As the executive body under the Sustainability Committee, it is responsible for implementingESG management measures, including those related to climate change.

Sustainability Governance FrameworkINOVANCE values the construction of its sustainability governance system and has established a top-downESG governance structure.

Board ofDirectors

SustainabilityCommittee

SustainabilityO?ce

ExecutiveManagementTeam (EMT)

Sustainability Management

INOVANCE consistently practices sustainable development, fully integrating ESG management into day-to-day business operations. Through improving its ESG governance structure, formulating core ESGstrategies, strengthening stakeholder engagement, and optimizing the management of material topics,the Company continuously enhances its ESG management capabilities and promotes alignment betweenthe concept of sustainable development, corporate strategy, and stakeholder expectations.

Sustainability and CorporateGovernance

DepamentsBusiness divisionsSubsidiaries

Sustainability Management FrameworkThe Company also incorporates ESGperformance indicators into themanagement’s remuneration systemand applies appropriate rewardsand clawbacks based on the annualappraisal results, to strengthen theESG governance capabilities andsupport the orderly advancement ofESG eos.

Board of DirectorsExecutive Management Team (EMT)

Sustainability O?ceSustainability Committee

?Continuously improve the corporate governancesystem ?Create an internal compliance culture ?Maintain high R&D investment?Improve product quality and enhance qualitymanagement eciency ?Enhance customer seice quality

?Build a secure, stable and resilient supply chain?Realize a sustainable supply chain with a focus onsuey and assessment of supply chain sustainability

?Seize oppounities presented by the national carbonpeaking and carbon neutrality goals, continue todevelop products and solutions featuring“avoidedemissions”, and facilitate the green and low-carbontransition of society?Improve full life cycle management of products andcontinuously reduce product carbon footprints

Goal 16:

Peace, Justice andStrong Institutions

Goal 9:

Indust, Innovation andInfrastructureGoal 12:

ResponsibleConsumption and Production

Goal 12:

ResponsibleConsumption and ProductionGoal 17:

Panerships for theGoals

Goal 7:

Aordable and CleanEnergyGoal 9:

Indust, Innovationand InfrastructureGoal 12:

ResponsibleConsumption and ProductionGoal 13:

Climate Action

ESG StrategyTo fully support the Company’s sustainable development and enhance ESG management capabilities, theCompany, based on its own strategy, industry dynamics, and the UN SDGs, has identified six dimensions of itsESG strategy, namely,“Corporate Governance”,“Lean Innovation”,“Low-Carbon Pioneer”,“ResponsibleEcosystem”,“Talent Development”, and“Green Operations”. It develops an ESG strategy around these sixcore areas, clarifies the long-term goals of ESG efforts, and promotes the full integration of ESG managementwith business decision-making and daily operations.

Corporate governance

Lean innovation

Responsibility ecology

Low carbon pioneer

The Six Dimensions of ESG StrategySupported UN SDGs

Sustainability and Corporate Governance / 2024 SUSTAINABILITY REPORT

Decision-making

levelManagementlevelOperationallevel

Goal 3:

Good Health and Well-beingGoal 4:

Quality EducationGoal 5:

Gender EqualityGoal 8:

Decent Work andEconomic GrowthGoal 10:

Reduced Inequality

Goal 7:

Aordable and CleanEnergyGoal 9:

Indust, Innovation andInfrastructureGoal 11:

Sustainable Cities andCommunitiesGoal 12:

ResponsibleConsumption and ProductionGoal 13:

Climate Action

Innovation-DrivenDevelopmentProduct and Service Safety andQualityGreen Products and InnovationEmployeesOppounities in CleanTechnologyAddressing Climate Change

Shareholdersand investors

General Meeting of ShareholdersEarnings presentationsSpecial announcements“Investor Relations” page on the Company’s ocial websiteINOVANCE’s Investor Relations ocial WeChat accountInvestor Relations emailInvestor engagement activities (daily communication,roadshows, SZSE’s interactive platform, investment strategysessions, online communication)Stakeholder sueys

Key Topics of ConcernStakeholdersEngagement Methods

Management of Material Topics

Stakeholder EngagementStakeholders’expectations and demands are the source and motivation for us to improve our sustainabilityperformance. We respect and safeguard the legitimate rights and interests of all stakeholders, striving to establishlong-term and stable communication mechanisms through various online and offline channels. In 2024, theCompany actively engaged with shareholders and investors, customers, employees, government and regulatoryauthorities, suppliers and paners, and community representatives on sustainable development matters to gathertheir in-depth feedback and understand their expectations and suggestions on ESG management.

?Protect employees’ rights and benets ?Provide a healthy and safe workplace?Foster all-round and sustainable developmentof employees

?Improve environmental management system toensure environmental compliance?Address climate risks and continuously enhancethe capacity to mitigate and adapt to climatechange?Practice green and low-carbon production andoperations?Promote circular economy and enhance resourceeciency

Talent development

Green operations

Addressing Climate ChangeOppounities in Clean TechnologyRisk ManagementSustainable Supply Chain ManagementProduct and Seice Safety and Quality

EmployeesAnti-commercial Bribe and Anti-corruptionProduct and Seice Safety and QualityData Security and Privacy Protection

Innovation-Driven DevelopmentProduct and Seice Safety and QualityData Security and Privacy ProtectionEmployeesWaste TreatmentCircular EconomySustainable Supply Chain ManagementProduct and Seice Safety and QualityInnovation-Driven DevelopmentFair CompetitionAddressing Climate ChangeAnti-commercial Bribe and Anti-corruption

Social ContributionsRural Revitalization

Stakeholder sueysGreen supply chain sueySupplier auditSupplier conferencesIndust exhibitions

Community public welfare projectsEmployee volunteering seices

Information disclosureInstitutional visitsOcial correspondenceMeetings and forums

Workers’ representative congressPresident’s MailboxComplaint hotlineWhistleblower mechanismEmployee satisfaction suey

“INOVANCE Circle” internal forumHR mailboxStakeholder sueys

Indust exhibitionsOn-site visitsStakeholder sueys

Materiality AnalysisINOVANCE places great importance on the impact of material topic management on its sustainable development.The Company conducts materiality analysis annually. In 2024, based on domestic and international sustainabilitypolicies and regulations, the latest regulatory guidelines, peer practices, and external expert advice, the Companyformulated a list of material topics. Following the principle of dual materiality, topics were evaluated along

Key Topics of ConcernStakeholdersEngagement Methods

Clients

Employees

Government and

regulato bodies

Suppliers andpaners

Communityrepresentatives

Sustainability and Corporate Governance / 2024 SUSTAINABILITY REPORT

Materiality Analysis ProcessBusiness overview:

Identify the Company’s business, valuechain, and geographic distributionExternal environment analysis:

Identify relevant laws, policies, andindust standards

Stakeholder impact identi?cation:

Analyze the impact of the Company’soperations on stakeholders

Financial impact expert analysis:

Engage internal experts to assessthe nancial materiality of each topicbased on degree and likelihood ofnancial impactStakeholder survey:

Distribute questionnaires throughvarious channels, assess materialityof topics, and adjust according torating standards and client auditrequirements

Background Identi?cation

Materiality Evaluation

Topic Reporting

two dimensions of“financial materiality”(impact on the Company’s business and financial performance)and“impact materiality”(impact on the economy, society, and environment). Evaluation methods includedstakeholder surveys and expert reviews. The Company compiled the materiality matrix for the year based onthe evaluation results.? Financial Materiality Analysis:

An internal expe model was adopted, using average net prot over the pastthree scal years as the nancial reference indicator. Evaluation dimensions included the percentage impact onnet profit and the likelihood of occurrence, both divided into five levels. Internal experts assessed each topicon both dimensions and combined the results to determine nancial materiality.?Impact Materiality Analysis:

Stakeholder surveys were conducted through multiple channels, targetingshareholders and investors, customers, employees, government and regulatory bodies, suppliers andpartners, and community representatives. Stakeholders evaluated ESG topics based on range, likelihood, andirreversibility of impact. Each topic was rated as highly immaterial, immaterial, neutral, material, or highlymaterial. The Company collected 157 valid questionnaire responses. Suey results were adjusted in referenceto rating standards and client audit requirements to avoid distortions caused by a small sample size in thesuey feedback.

Preparation of Topic ListPolicy analysis:

Analyze the impact of identied laws andpolicies on the Company’s operationsRules and standards benchmarking:

Refer to domestic and internationalsustainability-related standardsPeer analysis:

Refer to peer companies’ESG topicsettings

Process reporting:

Disclose the dual materiality analysisprocess, methodology, and conclusionsTopic reporting:

Disclose the materiality matrix

Energy Use

Green Products andInnovation

Sustainable Supply Chain

Management

Product and Seice Safetyand Quality

Addressing Climate Change

Risk ManagementData Security and Privacy ProtectionAnti-commercial Bribe and

Anti-corruption

Corporate GovernanceCircular Economy

Fair Competition

Environmental Compliance

ManagementPollutant DischargeWaste TreatmentDue Diligence

Stakeholder Engagement

Cross-indust Collaboration and

DevelopmentEqual Treatment of SMEsEthics of Science and TechnologyRural Revitalization

Social ContributionsEcosystem and Biodiversity ProtectionWater Resources Utilization

Employees

Oppounities in Clean

TechnologyInnovation-DrivenDevelopment

2024 Materiality Matrix

Topics of DualMateriality

Topics of FinancialMateriality

Topics of ImpactMateriality

Immaterial Topics

Addressing ClimateChangeInnovation-DrivenDevelopmentOppounities in CleanTechnologyProduct and SeiceSafety and QualitySustainable Supply ChainManagementGreen Products andInnovationCorporate Governance

Energy Use

Risk ManagementEmployeesCircular EconomyData Security and Privacy

ProtectionAnti-commercial Bribe

and Anti-corruption

Environmental ComplianceManagementPollutant DischargeCross-indust Collaboration and

DevelopmentWaste TreatmentStakeholder EngagementDue DiligenceSocial ContributionsFair CompetitionWater Resources UtilizationRural RevitalizationEqual Treatment of SMEsEcosystem and Biodiversity

ProtectionEthics of Science and Technology

Environmental

SocialGovernance

Highly material

Immaterial

Materiality ofeconomic, social,andenvironmentalimpact

Highly materialThe Financial Materiality for INOVANCE

Sustainability and Corporate Governance / 2024 SUSTAINABILITY REPORT

Changes in Material TopicsAs this is INOVANCE’s first year identifying topics in accordance with the SZSE’sGuidelines No.17using dualmateriality analysis, topic names and structure dier signicantly from last year. Key adjustments include:

Previous TopicsUpdated Topics

Change in Name

Topic Merge

Climate Change Mitigationand Adaptation

Talent Attraction andRetention

Intellectual PropeyProtection

It is included in the topic

“Innovation-DrivenDevelopment”, and is nolonger separately listed.It is included in the topic

“Social Contributions”.Community Engagementand Development

EmployeesEmployee Rights andWelfareEmployee Training andDevelopmentOccupational healthand safetyProduct Safety and QualityManagement

Rural RevitalizationEthics of Science andTechnology

Ecosystem and BiodiversityProtection

Equal Treatment of SMEsDue Diligence

Product and Seice Safety

and QualityCustomer Seice Quality

Emissions and WasteManagement

Charity Events andVolunteer SeiceCompliance management

Addressing Climate

Change

Pollutant DischargeWaste Treatment

Social ContributionsEnvironmental ComplianceManagement

Anti-commercial Bribeand Anti-corruptionRural Revitalization

Fair Competition

R&D and Innovation

Innovation-Driven

Development

Energy ManagementEnergy UseWater Use

Water Resources

Utilization

Topic Breakdown

Newly Included Material Topics

Previous TopicsUpdated Topics

Previous TopicsMerged Topics

Topic Removal

Previous TopicsReason for Removal

Circular Economy

Due to the close alignmentbetween the Company’soperations and the conceptand model of circulareconomy, this topic wasassessed to have impactmateriality.

It is included based on thetopic list provided inGuidelines No.17and theCompany’s actual operations.

Material TopicsReason for Inclusion

The General Meeting of Shareholders is the highest authority of the Company. The Company convenesand holds the General Meeting of Shareholders in strict accordance with theArticles of Association,thereby ensuring the shareholders’ right to know and paicipate.

The Board of Supervisors is the Company’s permanent supervisory body. It oversees the directors and seniormanagers in the conduct of their duties, doing so in accordance with the law. Moreover, it reviews the securitiesissuance documents and periodic reports produced by the Board of Directors and issues written reviewcomments. The Board of Supeisors comprises three supeisors, one of whom is an employee representative.

As the Company’s decision-making organization for operation and management, the Board of Directors isresponsible for the General Meeting of Shareholders. In order to ensure the scientific and rational decision-making of the Board of Directors, we consider the diverse backgrounds of the members of the Board, includinggender, age, industry experience, professional acumen and other relevant factors. The Company’s Board ofDirectors comprises nine directors, including three independent directors (accounting for 33%) and one femaledirector (accounting for 11%). The Board members engage in various fields such as electrical engineeringand automation, machinery, finance, accounting, etc., and have the industry experience, knowledge andrisk management capability necessary to perform their duties, thus supporting the Board of Directors makeappropriate decisions while ensuring the Company’s long-term sustainable development.In the reporting period, the Board of Directors newly established the Nomination Committee and theRemuneration and Appraisal Committee, which, together with the Audit Committee, provide professionalsuppo in their respective areas. Board members seing on committees have expeise in accounting, nancialmanagement, and indust knowledge, ensuring proper function of the committees.

General Meetingof Shareholders

Board ofDirectors

Board ofSupervisors

Strengthening Corporate Governance

INOVANCE faithfully obsees the principle of“ecient operation, governance rst”, and complies withall regulato requirements in order to continuously improve its governance structure and mechanism fora robust, ecient corporate governance system.

Corporate Governance System

The Company complies with the requirements of laws, regulations and regulatory documents such as the

Company Law of the People’s Republic of China, theSecurities Law of the People’s Republic of China, theCode ofGovernance for Listed Companies in Chinaand theRules Governing the Listing of Shares on the Shenzhen StockExchange GEM, doing so to establish a structure for corporate governance comprised of the General Meeting ofShareholders, the Board of Directors, the Board of Supeisors and EMT. While we value democracy and humanrights, we insist on the centralization of authority and pursuit of harmony in diversity for decision-making, thusforming a governance mechanism with clearly defined rights and liabilities, mutual coordination and checksand balances while ensuring management that is ecient, scientic and transparent.The Company has developed systems and normative documents such as theArticles of Association, theRules

of Procedures of theBoard of Directors, and theWorking System of Independent Directorsin accordance withrelevant laws and regulations. Thus, it has firmly established the operative norms of the General Meeting ofShareholders, the Board of Directors and the Board of Supervisors, clarifying the relevant responsibilities ofrelevant organizations to ensure ecient operation of the governance system.

Sustainability and Corporate Governance / 2024 SUSTAINABILITY REPORT

Innovativedisclosure

Voluntainformationdisclosure

Statutoinformation

disclosure

Note: More details on the Board of Directors and the corporate governance can be found in “Corporate Governance” of theINOVANCE 2024 Annual Repo.

General Meetings ofShareholders

Meetings of the Board ofDirectors

Meetings of the Board ofSupeisors

times

times

times

Protection of Investors’ Rights and Interests

The Company strictly follows theSecurities Law of the People’s Republic of China, theRules Governing the Listing ofShares on the Shenzhen Stock Exchange GEM, and theGuidelines for the Management of Investor Relations of ListedCompanies. We have formulated the Information Disclosure Management System, and established an efficient,transparent mechanism for the protection of fair and just exercise of rights by investors and their rights andinterests, especially those of small and medium-size investors.

Convening the General Meeting of Shareholders, the Board of Directors andthe Board of Supervisors in 2024

Information DisclosureThe Company fulfills its information-disclosure obligations in accordance with the law, implements theprinciple of“truthfulness, accuracy, completeness, timeliness and fairness”continues the eo to standardizeand refine the information-disclosure process while enhancing the quality, broadening and ensuring thetransparency of information disclosure so as to protect the legitimate rights and interests of investors. SinceIPO, the Company has obtained A ratings in the information-disclosure assessment of SZSE for 14 yearsconsecutively as the only one among all listed companies on the ChiNext market of SZSE.

Three Basis:

Information-disclosure promotion method process-based, process-documentationtemplate-based, and key-link billboard-based.Five Examinations & Three Determinations:

Carefully examine the rules, guidelines, cases, historyand essence in the process of announcement drafting; determine the logic, core and description.Project-based Operation:

Establish a mechanism for information sharing and coupling with businessdepaments in order to promote disclosure management by means of project operation.

Information Collection:

Strengthen communication with lead departments and related personnel;collect materials related to the Company’s operation, finance and other aspects, and accumulatematerials in advance for the preparation of the annual repo and interim disclosure.Information Review:

Ensure that the information disclosed is true, accurate and complete;continuously improve the disclosure quality, and fully disclose all information that is beneficial toinvestors’ value judgment and related decisions.Disclosure Method:

Release corporate ESG/sustainability repos annually and respond to investors’

concerns on the management of material sustainability topics.Disclosure Management:

Organize the relevant departments to participate in sustainabilityknowledge and work skill training to enhance employees’understanding of sustainability and fuherimprove the quality of information collection and disclosure.

?????

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INOVANCE’s 2023 Annual General Meeting (The meeting was held on May 17, 2024)

Sustainability and Corporate Governance / 2024 SUSTAINABILITY REPORT

Shareholder EngagementIn order to meet the varied needs of investors, the Company has established comprehensive, efficient, diverseengagement channels to listen to investors’voices and promote engagement and recognition between thetwo sides. Through the Company’s official website, new media platform, SZSE’s interactive platform, investorhotline, investor relations email, web conferencing and other channels, the Company engages with investorsby means of earnings presentations, road shows, analyst meetings, press conferences, eld research and othermeans, doing so to help them fully and quickly understand the Company’s dynamics and information and fosterstrong investor relations.During the reporting period, the Company answered 201 questions from investors through the SZSE’sinteractive platform (irm.cninfo.com.cn/szse), representing a reply rate of 100%; received a total of 517 visitsfrom domestic and international brokerage firms, investment funds and individual investors, involving morethan 4,000 investors.

Return to InvestorsThe Company takes theArticles of Associationand other institutional documents as the basis for the protectionof shareholders’rights and returns. While maintaining timely, fair, and healthy communication with investors,the Company has been rewarding them through a sound dividend distribution plan to ensure the long-termvalue of their investment. As of the end of the repoing period, the Company has paid cash dividends of RMB6,841 million cumulatively.

Name of SeniorExecutive andChief FinancialO?cer on the

Board

Position

Total Pre-taxCompensationReceived fromthe CompanyDuring theReportingPeriod (Million RMB)

Grant Date ofRestricted Shares– the 5th EquityIncentive Plan

Number ofRestricted

SharesGranted (Ex-Dividend andEx-RightsAdjusted) –the 5th EquityIncentive Plan

(Shares)

Grant Date ofRestricted Shares– the 6th EquityIncentive Plan

Number ofRestricted

SharesGranted – the6th EquityIncentive Plan

(Shares)

Value ofVested/UnlockedEquityIncentivesDuring theReportingPeriod(Million RMB)

Numberof SharesUnlockedUnder Long-term Incentive

PlanXingming Zhu

Chairman andPresident

3.90 /0/0045,034Bin Zhou

Director and Vice

President

2.53

October 28,2020

352,500

August 23,2022

150,0000.7426,259Junen Song

Director, VicePresident, andBoard Secreta

2.23

October 28,2020

307,500

August 23,2022

130,0001.27 22,496Chunlu Yang

Director and Vice

President

2.37

October 28,

2020

307,500

August 23,2022

130,0001.2722,496Yingxin Liu

Chief FinancialOcer

2.05

October 28,

2020

307,500

August 23,2022

130,0000.6422,496

Note：

1. The valuation of equity incentives covers the equity incentive plans vested or unlocked during the reporting period. For details,

please refer to INOVANCE Annual Repo 2024.

2. The value of equity incentives is calculated based on the fair value on the grant date (closing price on the grant date). The

calculation formula for the value of vested/unlocked equity incentives during the reporting period is: Value of vested/unlockedequity incentives = Number of vested/unlocked equity incentives during the reporting period × Fair value on the grant date. Fordetails on the calculation base data, please refer to INOVANCE Annual Report 2024, Announcement on Adjustments to the 5thEquity Incentive Plan, Announcement on the First Grant of Restricted Shares to Incentive Participants, 5th Equity Incentive Plan(2020 Equity Distribution Update), and Announcement on the First Grant of Class I Restricted Shares to Paicipants in the 6th EquityIncentive Plan. During the reporting period, Bin Zhou and Yingxin Liu did not exercise the 5th Equity Incentive Plan, resulting in arelatively low value of vested/unlocked equity incentives for them.

3. For details on the Company

’s long-term incentive unlocking rules, please refer to the INOVANCE Long-Term Incentive Fund ManagementMeasures. For the long-term incentive unlocking status during the repoing period, please refer to INOVANCE Annual Repo 2024.

Executive Compensation

The compensation for the Company’s senior executives (including executive members of the Board of Directors)consists of three components: base annual sala, sho-term incentives, and long-term incentives. The base salais primarily determined by the executive’s role, responsibilities, capabilities, and prevailing market compensationlevels. In addition to fixed monthly payments, it also includes employee benefits provided by the Company. Short-term incentives mainly refer to performance-based bonuses and other one-time cash awards. Performance-basedbonuses are determined based on the Company’s annual business objectives and are awarded in the followingyear, depending on the extent to which individual and departmental goals are achieved. Long-term incentivesprimarily include the equity incentive plan and the long-term incentive shareholding plan. The equity incentiveplan is designed to grant stock options and restricted shares to various levels of management, high-performingkey personnel, and critical talent. The long-term incentive shareholding plan focuses on granting stock options tostrategic talents who have made signicant contributions to the Company’s long-term development.Note:The disclosure of “compensation” in this section includes employee incentive programs, which di?ers in composition from thecompensation structure presented in the Annual Report of the Company.

Compliant and robust operation is the fundamental requirement and baseline principle for the Company’ssustainable business development. The Company adheres to the philosophy of integrity and compliancein operation, continuously enhances risk management, improves due diligence mechanisms, optimizesinternal controls, and strengthens business ethics management.

Compliant and Robust Operation

First Layer of DefenseOwner Business Executives andProcess Owners

Third Layer of DefenseInternal Audit

Second Layer of DefenseRisk Management, InternalControls and Risk MonitoringIndust Sectors

Three Layers of Defense for Risk Management at INOVANCE

The primary responsible entity for risk management, proactivelyidentifying and managing risks, building internal controlawareness and capabilities in the process, and enhancingsubstantive compliance with the process

Exert independent supervisory and evaluative functions,establish a cold deterrence effect, and report audit results tothe Audit Committee and company’s senior management

Suppo the rst-line core business depaments in risk control

Sustainability and Corporate Governance / 2024 SUSTAINABILITY REPORT

Risk ManagementThe Company establishes a stable risk management and internal control system, claries the risk managementstructure and responsibility mechanisms, regularly conducts risk identification and assessment, formulatesresponse plans, and dynamically monitors risk changes to ensure strong suppo for sustainable development.In 2024, the Company strengthened risk management and solidly advanced related work. The Companyembedded KCP, SOD, and CT planning into newly released processes to enhance the effectiveness of internalcontrol, conducted CT testing across the Company to examine the execution of key control points, launched RTelectronic workows to reinforce self-improvement and responsibility closure in operations, and strengthenedthematic risk management in key areas, including updating the compliance risk map, assessing financialreporting quality risks, enhancing internal control over financial reporting, and developing and executingcontrol measures.

Risk Management FrameworkThe Company has formulated the“Three Layers of Defense”risk control mechanism, and the Board ofDirectors which ultimately responsible for risk management authorizes EMT to identify and manage company-level risks. Additionally, it guides each area in the conduct of risk management and control and claries the riskmanagement responsibilities in each layer and depament so as to prevent systematic risks.

The risk control Center of Expeise (COE) constructs and optimizes the top-level risk control systemand framework, guides the element owners to establish the components of effective risk control,outputs the methodology and tools of risk management and internal control, and guides theimplementation of risk control projects in each business area.

The person responsible for risk management and control tracks and checks the progress andeffectiveness of risk management and control measures, and adopts relevant means to monitorthe level of risk and to provide early warning and corrective action. Additionally, the internal auditformulates annual plans based on a risk-oriented approach to focus on high risk areas, to reviewand evaluate the appropriateness and effectiveness of business activities, internal control and riskmanagement and to promote the continuous improvement of the risk management system.

The Company regularly conducts risk identification, evaluation and prioritization, collects internaland external risk information, identifies risks and scenarios, evaluates risk levels in terms ofprobability of occurrence and impact, and outputs a risk matrix. Moreover, the Company implementsthe concept of group prevention and control as it encourages whistleblowing via the“president’smailbox”and“whistleblower”channels so as to encourage employees to identify potential risksand dangers in production and operations and to repo them promptly.For the top risks identied that need to be focused on control, the Company designates the personresponsible for risk management and control, formulates risk management and control objectives,response programs/measures, forms risk maps, develops detailed response plans as needed anddecomposes specific tasks to ensure effective implementation of risk management measures. Forrisks that can be controlled within processes, relevant tools and methods of process internal controlare utilized for management. During the repoing period, the Company updated its compliance riskmap as a priority.

Optimization of theRisk Control Systemand FrameworkRisk Identicationand Evaluation

Risk Response andManagement

Risk Monitoring andRepoing

Risk Management Mechanism

The Company has built a sound risk-management framework in line with its business reality and operationmode in accordance with the COSO-ERM framework. We have developed rules–notably theInternal Risk ControlManagement System and other guidelines for risk management, in addition to which we’ve established a riskmanagement mechanism that encompasses the process of“risk identification and evaluation - risk responseand management - risk monitoring and reporting”, We have also incorporated elements of risk managementinto strategic plan and business plan development as the means to comprehensively enhance our risk controland management capability.

Risk Culture DevelopmentThe Company organizes special training and examinations on risk control and built a risk control knowledgeplatform libra to provide comprehensive, one-stop access to risk control knowledge for the business end andenhance the risk management awareness of all sta.During the repoing period, the Company conducted risk control training sessions targeting PO/PC personnel,process domain managers, internal control BPs, CT testers, process document drafters, and business managers.The Company also held multiple risk control examinations to assess the mastery of CT, the suite of processtools, and basic concepts of risk control in business areas.As of the end of the reporting period, the risk control knowledge base platform released a total of 26 riskcontrol knowledge documents, covering content such as terminology explanations, enablement materials, formtemplates, and operational guidelines. Among them, ve key risk management tools, i.e., the risk panorama andrisk map, the suite of process internal control tools, CT testing, internal control issue tracking and improvementand proactive review, are included.

Sustainability and Corporate Governance / 2024 SUSTAINABILITY REPORT

Internal ControlThe Company has built an internal control system in compliance with the requirements of theBasic Standardsfor Enterprise Internal Controland the relevant guidelines of SZSE and has established a series of internal-controlmanagement systems, such as the Internal Control System, the Internal Control Evaluation System, theInternal ControlDeficiency Identification Procedures, etc., built internal control systems with focus on five dimensions: business goalachievement, asset and capital security, operational efficiency, compliance and reporting, integrated methods andtools such as KCP, SOD and CT plan into business processes, and conducted effect evaluation through internalcontrol tools to continuously provide impoant information on the eectiveness of the relevant elements of internalcontrol, and promote the increase of the Company’s internal control management.?CT Test:

The Company conducts CT test for all newly launched processes with defined KCPs, and applies CTprinciples to unlaunched processes for identication and review.?SOD Certification:

The Company identifies incompatible job roles and breaks operational linkages to preventfraud and other risks. SOD has been embedded in newly launched and operational processes. For businessprocesses not yet launched, controls are implemented based on the SOD principle.During the reporting period, the Company focused on conducting special audits related to finance, compliance,internal control, major procurement, and engineering project management.ESG Due Diligence

The Company accelerates the development and improvement of its ESG due diligence mechanism to identifymaterial sustainability-related risks and formulate response plans, aiming to enhance its overall risk managementcapability. In 2024, INOVANCE implemented several ESG-related due diligence programs targeting green and low-carbon practices, environmental management, production safety, human rights protection, and conict minerals.

Green Supply Chain SurveyThe Company establishes a green supply chainsurvey mechanism to better manage supply chainrisks. In July 2024, the Company conducted itsannual green supply chain survey for key suppliers,covering environmental management, energy use,GHG emissions, production processes, and relatedmanagement system ceications.

Occupational Health and Safety RiskAssessment

The Company applies the LEC evaluation methodto assess occupational health and safety risks,identify hazards, and categorize risks to producerisk identification reports. Every year, the Companyconducts inspections of occupational diseasehazards, covering high risk job positions, to provide abasis for employee health management.

Con?ict Minerals Investigation

During the reporting period, the Company updateditsConict Minerals Control Management Regulationandcommitted to conflict-free mineral use. Every year,the Company conducts investigations into the useof conflict minerals and suppliers’conflict minerals.No use of conflict minerals was found internally oramong suppliers during the year.

Sustainability Internal AuditThe Company gradually carries out sustainabilityinternal audits covering business ethics, humanrights, environment, occupational health and safety,and plans to cover all key operation sites. In April2024, the Company initiated its first sustainabilityinternal audit at Yueyang INOVANCE. The auditresults were used to support Yueyang INOVANCE inimproving sustainability peormance and optimizinginternal management systems.

Tradecompliance

Anti-moneylaunderingConictof interest

Connectedtransactions

Responsiblemarketing

Compliance Management System

The Company establishes standard contract templates covering seven major systems to ensurecompliance for all types of commercial and trade practices, monitors trade policies and regulations in realtime, and updates compliance requirements annually, and promotes their application across all businessprocesses.The Company conducts anti-money laundering-related compliance risk assessments, integrates anti-money laundering-related requirements in procurement activities covering production materials, assets,frameworks and services, and checks the authenticity and legality of transactions through supplierceication, contract conrmation, invoice audit, and verication of sporadic receipts to strengthen thesupeision of economic behaviors.

The Company has formulated theDecision-Making System for Connected Transactionswith detailedprovisions on the reporting of connected transactions, withdrawal system, decision-making authorityand information disclosure to ensure the fairness of the Company’s decision-making regardingconnected transactions. The Company had no major connected transactions during the reportingperiod. Meanwhile, the decision-making procedures of minor connected transactions were incompliance with the relevant laws and regulations and ourArticles of Association. The pricing of theseconnected transactions is fair and reasonable, without prejudice to the interests of the Company and itsshareholders, paicularly the interests of small and medium-sized shareholders.The Company carries out responsible marketing management in accordance with theAdvertisingLaw of the People’s Republic of China, theTrademark Law of the People’s Republic of China, and relevantindustry regulations, and requires the provision of truthful, accurate, effective, and easy-to-understandinformation about product features to customers. During the repoing period, there were no incidents ofpenalties from regulato authorities for violations related to product and seice marketing, informationand labeling laws, regulations, or other volunta regulations.

The Company establishes a conflict of interest system, sets up different management requirementsaccording to dierent job positions and levels, and requires an internal conict of interest declarations.

Compliance ManagementStrictly adhering to regulatory compliance, we have formulated a compliance management system andmanagement mechanism centered on trade compliance, anti-money laundering, data compliance, intellectualproperty protection, anti-corruption, anti-unfair competition, conflict of interest, connected transaction,responsible marketing, etc. Moreover, We have integrated compliance requirements into all aspects of productionand operations, forming a comprehensive compliance system for company behavior and management. We havebuilt a clean business environment with a focus on anti-corruption management and integrity in workplace.

Compliance Management System

The Company strictly complies with all applicable laws and regulations in its operating regions and hasformulated theBusiness Conduct Guideline, theConflict of Interest Management Measures, theEmployee DisciplinePolicy, and the Workplace Accountability Management Systemto regulate both Company and employee behavior.Employee violations are categorized into economic, business, and behavioral violations. Complaints and reposfor these violations are handled respectively by the audit manager, business manager, and HR manager, whoissue investigation repos and initiate accountability procedures.

For details of data compliance and intellectual propey protection, please refer to“Data Privacy Protection”and“R&D Innovation Focus”chapters. For details of anti-corruption, please refer to“Anti-corruption and IntegrityBuilding”in this chapter. For details of fair competition, please refer to“Fair Competition” in this chapter.

? Anti-corruption and Integrity BuildingThe Company established the Integrity and Honesty Working Committee in 2018. The Chairman is the directorof the Committee and the directors of each depament are the integrity ambassadors, who are responsible forcoordinating and promoting the implementation of integrity-related work and repoing the work progress tothe Board of Directors on a regular basis.The Company has formulated the INOVANCE Anti-fraud Whistleblower Systemto standardize the managementof anti-corruption reporting, set up an anti-corruption whistleblower hotline and email, and promoted themthrough the Company’s official website,“Integrity INOVANCE”official WeChat account, posters and otherways to establish accessible anti-corruption whistleblowing channels, and to ensure fair, effective, andtimely handling of any potential corruption incidents. Additionally, through itsIncentive Plan for Anti-fraudWhistleblowers, the Company encourages employees, suppliers, and other partners to participate in anti-corruption supervision. The Audit Department, as the unit responsible for receiving anti-corruption leadsand whistleblower reports, conducts anti-corruption audits based on the provided information to ensure theaccuracy, independence, and fairness of the investigation results. Employees found violating anti-corruptionand integrity rules are subject to disciplinary actions under theWorkplace Accountability Management Systemand Employee Discipline Policy, including D-rating in performance evaluations, termination of labor relationship,restitution of improper gains, or compensation for losses. For acts suspected of violating laws or constitutingcrimes, the Company will legally transfer the case to judicial authorities for handling. During the reportingperiod, the Company received 18 reports of anti-corruption clues, with a 100% resolution rate for complaintsand repos.The Company adopts a“zero tolerance”approach towards corruption and commercial bribery, promotingresponsible governance through the construction of an anti-corruption system and the cultivation of a cultureof integrity. Anti-corruption regulations for employees are included in the internal business ethics guidelines.For suppliers, these requirements are included as standard clauses in theSupplier Management Contract. Duringthe reporting period, the Company was not penalized by the competent authorities for violations of anti-corruption, anti-bribe, anti-extoion, or anti-fraud laws and regulations.The Company continuously strengthened anti-corruption and integrity education for its employees throughinternal promotions, integrity training, and the promotion of Integrity Commitment Letter and other activitiesand methods, and promoted the construction of integrity culture. During the reporting period, the Companyconducted integrity-related publicity and training for directors, senior management and employees, with atotal of 1,220.17 hours of training.

Sustainability and Corporate Governance / 2024 SUSTAINABILITY REPORT

Business Ethics

The Company has formulated theBusiness Conduct Guidelineand theManagement Procedures of CSR and BusinessEthicsto regulate daily behavior. All employees are required to adhere to business ethics. The Company hasalso issued specic regulations such as theWorkplace Accountability Management System, theEmployee DisciplinePolicy and the Gift Acceptance Policyto further restrict actions that violate laws, regulations, and internal rulesrelated to business ethics.During the reporting period, the Company revised and updated its Business Conduct Guidelineto reflect thelatest laws and internal management requirements. Enhancements included explicit opposition to all forms ofmodern slavery and human trafficking, strengthened data privacy protections, conflict minerals prohibition,detailed fair competition and anti-corruption clauses, and reinforced insider trading prohibition policies.

? Fair CompetitionThe Company strictly complies with the Law of the People’s Republic of China Against Unfair Competitionandother relevant regulations in its operating regions, advocates fair competition, prohibits malicious defamation,misleading statements, or insinuations against competitors, explicitly bans monopolistic practices, andrigorously reviews mergers and acquisitions to ensure fair and just market order. During the reporting period,the Company did not receive any administrative penalties for acts of unfair competition.

The Company strictly protects the personal information of whistleblowers, prohibits the disclosure ofwhistleblower identities, and forbids any form of retaliation. Individuals found to be disclosing whistleblowerinformation or retaliating against whistleblowers will be seriously dealt with.

Whistleblower Handling Procedures

Initiate investigationsupon receivingwhistleblower repos

Hold relevant personneland depamentsaccountable

Responsible depamentscar out rectication ofinternal control issues

Compliance Training

The Company regularly organizes all employees to study relevant systems such as theBusiness ConductGuideline. Specialized training is provided for key personnel in the process to require all employees to complywith the code of business ethics. Additionally, we conduct regular and specialized compliance training for allemployees, and continuously improve the compliance awareness of the management and employees throughpublicity, training, examination and other methods.

Whistleblowing Procedures and Whistleblower Protection

???????

Review and make decisions on the Company’s climate change strategy,goals, and major matters.Monitor and management of the overall work related to climate change.Supeise the Company’s climate-related information disclosure.

Implement the specic work plans to address climate change.

Review the progress of climate action, quantified performance, and goalsachievement status.Review related policies of climate and energy and provide guidance onrelevant budgeting plans.Provide necessary resources and guidance for climate actions to relevantexecutive depaments.Assess the Company’s climate risks and opportunities and formulatecorresponding management measures.Report routine work matters to EMT periodically and present an annualclimate work summary to the Board of Directors every April, along withsubmission of the annual sustainability repo for Board review.The Sustainability Oce is established to identify and analyze climate risksand opportunities, provide guidance on climate actions, promote andpublicize work on climate change response, and track the implementationof specic matters by relevant executive depaments.

Board ofDirectors

SustainabilityCommittee

Departments,businessdivisions andsubsidiaries

EMT

Addressing Climate Change

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

Empowering Decarbonization

Climate GovernanceBased on the sustainability governance framework, the Company has established a system to address climatechange, clearly dened roles and responsibilities at each organizational level to enhance the proactiveness andcontinuity of climate action and ensure the ecient implementation of related initiatives.

Organizations at Each Governance Level

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?

RiskCategory

Sub-category

PotentialImpact Analysis

ImpactTimeframe

Value ChainStageA?ected

FinancialImpact

Addressing Strategy

Physical risk

Acute risk

Extreme weatherevents such astyphoons andoods may damagebuildings at operatingsites, aectingnormal productionoperations andpossibly triggeringsafety incidents.

Sho-term,medium-term, long-term

Ownoperations

Revenue↓Asset value↓

We develop emergencyresponse plans for majordisasters and emergenciessuch as typhoons, oodsand snowstorms, establishextreme weather warningsystems, and raise factofoundation levels in newplant construction toaddress risks from heavyrainfall and ooding.Extreme weather maycause supply chaindisruptions, aectingnormal productionand delive.

Sho-term,medium-term, long-term

Supply ChainProductdelive

Revenue↓

We establish exibleoce, production,and transpoationmechanisms, and promotediversied supplierinitiatives.

Chronic risk

Rising sea levels mayaect the normaloperation andproduction of theCompany’s coastalfacilities.

Long-term

Ownoperations

Operatingcost↑Asset value↓

We implement themulti-site productionstrategy, and optimize siteselection for new facilitiesto reduce environmentaldependency.Global temperaturerise may increasethe Company’scooling and energyconsumption costs.

Sho-term,medium-term, long-term

Ownoperations

Operatingcost↑

We optimize energymanagement systems,promote energy-savingprojects, and develop andimplement the“CentralCooling Station AI SmaControl”system toimprove air conditioningsystem eciency.

Climate Strategy

As a high-tech enterprise in industrial automation and new energy, INOVANCE recognizes that its R&D,procurement, production, and sales activities, as well as the application of its products and solutions atcustomer sites, are closely related to climate change. The Company understands that climate change posesboth risks and oppounities for its development.Every year, the Company conducts an assessment of climate risks and opportunities, updates the list of risksand oppounities and renes it through internal discussions and external research. Detailed strategies are thendeveloped to address these risks and oppounities.

Climate Risk Matrix

Note:De?nition of the impact timeframe: Short-term means 0 to 3 years; medium-term means 3 to 5 years; long-term means 5 to 30 years.

RiskCategory

Sub-category

PotentialImpact Analysis

ImpactTimeframe

ValueChainStageA?ected

FinancialImpact

Addressing Strategy

Physical riskChronic risk

Public healthincidents causedby climate changemay aect thecompany’s normalproduction.

Long-term

OwnoperationsSupplyChain

Nosubstantialsho-termimpact

We develop internalresponse plan for publichealth incidents suchas major infectiousdiseases, and makepreparation formedicines and supplies.

Transitionrisk

Policy andlegal risk

Strict requirementsfor climate-related informationdisclosure

Sho-term,medium-term

Ownoperations

Nosubstantialimpact

We establish andimprove informationdisclosure systemsin accordance withregulato requirementsat operation locations.Domestic andinternational GHGregulations, suchas carbon footprintcontrol on expoedproducts, imposehigher requirementson corporateemission reductionand management.

Medium-term, long-term

OwnoperationsProductsales

Operatingcost ↑

We promote emissionreduction initiatives,increase the share ofrenewable energy,and improve emissionmanagement at theorganizational andproduct levels.

Market risk

Customers prefergreen and low-carbon products,thus raising thebar for suppliercooperation.

Long-term

OwnoperationsProductsales

Revenue↓

We enhance productR&D to continuouslyimprove green andlow-carbon featuresand reduce the carbonfootprint throughout theproduct life cycle.

Technologyrisk

Energy-saving andcarbon reductiontechnology fallsbehind marketdemands.

Medium-term, long-term

Ownoperations

Revenue↓Operatingcost↑Financingdiculty↑

We improve R&Dmanagement systemsfor energy-savingand carbon reductiontechnologies, and keeppace with technologicaladvancements.

Reputationalrisk

Negative climate-related publicitymay damagethe Company’sreputation andaect product sales.

Long-term

Productsales

Revenue ↓Financingdiculty↑

We place impoanceon the Company’scompliance withclimate-relatedregulations andimprove monitoringand managementmechanisms fornegative publicopinions.

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

Type ofOpportunities

Potential ImpactAnalysis

ImpactTimeframe

Value ChainStage A?ected

FinancialImpact

Addressing Strategy

Changes inmarket demand

Energy conseation andcarbon reduction havebecome key developmenttrends across industries,leading to increaseddemand for green andlow-carbon products andsolutions.

Sho-term,medium-term,long-term

Product salesRevenue↑

We enhance productgreen and low-carbonfeatures through R&Dto expand customerbase and seize marketoppounities.

Raised customermarket entthreshold

Major domestic andinternational customersare raising green andlow-carbon requirementsfor suppliers, givingcompetitive advantagesto leading enterprises insupplier selection.

Medium-term,long-term

Product salesRevenue↑

We continuously improveproduct green and low-carbon attributes, reduceemissions from productionoperations, and ensureemissions information isveried and disclosed.

StructureAdjustmentof EnergyConsumption

As reducing fossil fuelconsumption andincreasing renewableenergy use have becomesocial and industrialconsensus, the Company’score products andsolutions will help addresskey challenges in thedevelopment of newenergy sectors.

Sho-termProduct salesRevenue↑

We provide more ecientproducts and solutionstailored to customer painpoints in the new energysector, suppoing theclean energy transition.

Building climateresilience

We enhance climateresilience to avoid orreduce potential nanciallosses.

Long-termOwn operations

Operatingcost ↓

Our new productionbases are constructed100% in accordance withgreen facto standardsto enhance climate riskresilience.

Improved ESGratings

Climate-relatedmanagement systemscontribute to improvedESG ratings.

Medium-termOwn operations

Financingcost↓

The Company activelypaicipates in majorESG rating programs toimprove peormance andresponsiveness, aiming forhigher ratings.

Climate Opportunity Matrix

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

Progress of and Future Plans for Climate-related TransitionIn operations, the Company continuously diagnoses energy use to identify energy-saving opportunities andadvances production and operational optimization and energy-saving retrofit projects. The Company plans topilot the purchase of carbon credit products such as green electricity, green certificates, and CCERs, and toscale up procurement around its projected carbon peaking year.In supply chain management, the Company has analyzed the low-carbon management status of key suppliers,developed initial emission reduction targets and action plans, and incorporated“carbon peaking and carbonneutrality” criteria into supplier peormance evaluations as bonus items.In terms of oppounities in clean technology, the Company continued to invest in the research and development ofcontrollers, motors, powertrains, and power supplyproducts for new energy vehicles, integrateddigital energy management solutions including the“Central Cooling Station AI Smart Control System”

and the“Digital Air Compression System”, and ultra-high-efficiency motor products and energy storageproducts during the reporting period, supportingthe green and low-carbon transformation acrossthe entire indust chain.

Climate-related Transition StrategyThrough annual assessments of climate risks and oppounities, the Sustainability Committee and SustainabilityOce formulate and update addressing strategies and submit them to EMT and the Board of Directors, whichmakes nal decisions on strategic direction and resource allocation.Based on the 2024 results of climate risk and opportunity identification and analysis, the Company hasdeveloped its climate transition strategy in two dimensions to respond to climate risks and seize greenoppounities.

Climate Risk Response:

Strengthen greenoperational practices, fulfill GHG emissionreduction commitments, promote green supplychain development, and continuously improvethe green supply chain management platform.

Opportunities in Clean Technology:

Activelydevelop products that deliver energy-savingand efficiency-enhancing effects and meet theneeds of a green and low-carbon society, andcreate green, low-carbon solutions that areautomated, digital, and intelligent for differentapplication scenarios.

Medium-termLong-termSho-term

Physical climate impacts: Frequencyand intensity of extreme weatherevents, temperature changes, sea levelrise, and public health incidents.

Market and technological changes:

Customer behavior changes, R&Dinvestment and outcome uncertainties,renewable energy adoption, etc.Stakeholder expectations and behavior:

Shifts in customer and investor expectationsregarding climate response due to marketconditions, and uncertainty in suppliercooperation and capability in executingclimate-related requirements.

Financial impacts: Accuracy of climate-related financial impact quantification,and uncertainty in the outcomes of greenand low-carbon technology investments.

Policy and regulato changes: Nationalcommitments under the Paris Agreementand their changes, and updates to ESGcompliance requirements.Supply chain resilience: Uncertaintyaround whether key suppliers can achieveGHG emission reduction targets.

Climate Resilience

INOVANCE conducts annual climate resilience assessments using both qualitative and quantitative methods.Qualitative analysis identies types and potential impacts of risks and oppounities, while quantitative analysisestimates their expected impact on nancial position, peormance, and cash ow.

Based on assessment results, the Company has strong climate resilience in the sho, medium, and long term:

Key unceainties considered include:

Physical risk response:

The Company has formulatedemergency response plans for various types of disasters toensure the continuity of its production and operations.

Green and low-carbon products:

The Company continuouslydevelops products that promote efficiency, conservation,and align with the needs of society’s green and low-carbontransition, eectively meeting customer demand for sustainableproducts and solutions.

Operational carbon neutrality:

The Company is committedto achieving operational carbon neutrality by 2050. Overthe next 30 years, it plans to continuously invest in low-carbon technology research and development as well as theacquisition of clean facilities, while also introducing carboncapture and carbon sink projects as appropriate to offsetremaining emissions.Zero-carbon supply chain:

The Company continues toengage in technical collaboration with key suppliers to jointlypromote the development of a zero-carbon supply chain.

Low-carbon operations:

The Company is committed to peaking operational carbon emissions by 2028, and will continue to advanceinitiatives such as improving energy eciency, increasing the share of renewable energy use, managing product carbon footprints, anddeveloping a green supplier management platform to achieve this goal.Low-carbon supply chain building:

The Company aims to reduce GHG emission intensity of key suppliers by 30% from 2021 levels by2030 through supplier assessments, technical suppo, and training to help suppliers achieve their emission reduction targets.Seizing opportunities in clean technology:

The company ensures and continuously strengthens its R&D investment in areas suchas new energy vehicles, high-efficiency motors, energy storage products, and digital energy sectors to seize opportunities in greentransformation.

“2850”Goals“3030”GoalsTo achieve operational carbon peaking by 2028.

and operational carbon neutrality by 2050.

To reduce major suppliers’GHG emissionintensity by 30% compared to 2021 by 2030.

Emission ScopeUnit202420232022Scope 1 Direct emissionstCO

e4,091.56 1,807.901,601.90Scope 2 Indirect emissionstCO

e148,705.14125,602.7182,155.14Scope 3 Other indirect emissionstCO

e7,848,603.14//Total GHG emissions from operationtCO

e152,796.70127,410.6183,757.04

GHG emission intensity in operation

tCO

e per RMB million ofrevenue

4.134.193.64

Empowering Decarbonization / 2024 SUSTAINABILITY REPORTRisk ManagementEach year, INOVANCE reassesses its climate impacts, risks and opportunities based on changes in externalenvironments, company strategy, and business models, updating its climate risk and opportunity matrixaccordingly. The Company continues to optimize its response strategies and improve the climate transitionplan The Company also conducts annual climate scenario analyses to assess its adaptability, ensuring it hassucient resources and capabilities to respond to sho-term, medium-term, and long-term climate risks whilecapturing climate-related oppounities.Climate risk management has been integrated into the Company’s overall risk management process, withcomprehensive climate risk assessments and management conducted across all business operations, coveringraw material and equipment procurement, production, sales, and project investment activities.

Since 2021, the Company has conducted annual GHG inventory to monitor the progress of carbon reduction.This year, the Company conducted a GHG inventory of the organizations included in its consolidated financialreport using ISO 14064?2018 and the GHG Protocol. A third-party agency was engaged to verify the GHGemission data and issue a verication statement.

Metrics and GoalsThe Company actively supports China’s“3060”goals and promotes green development within itself andacross the indust. It has set“2850”and“3030” carbon reduction goals.

Note：

1.For the calculation of Scope 2 Indirect emissions, GHG emissions from purchased electricity in 2024 are calculated based on the carbon

dioxide emission factors for each regional power grid, as outlined in the Minist of Ecology and Environment’s Announcement on the Release

of CO

Emission Factors for Electric Power in 2022. Data for 2022 and 2023 have been corrected accordingly.

2.Due to signicant changes in the methodology for calculating Scope 3 emissions in 2024, the Scope 3 data for 2024 are not comparable to

previous years. To avoid misleading repo readers, the previous year’s data is marked with a “/”.

OperationalCarbon NeutralityGoal

To achieve operational carbon peaking by 2028 and operational carbon neutrality by 2050

(“2850”)

Interim GoalsIndicators

BaseYear

202820302050

Energy eciencyimprovement

Energy eciency improvement rate:

Increase in energy use eciency relativeto the baseline year

2021

≥25%improvementin energyeciency

≥30%improvementin energyeciency

——Energy management system coveragerate: Propoion of total energyconsumption by ceied units underISO 50001 relative to the Group’s totalenergy consumption

——

≥80% coverage rate of energy managementsystems from 2028Comprehensive energy managementplatform coverage rate: Propoion ofenergy consumption by units using thecomprehensive energy managementplatform relative to the Group’s totalenergy consumption

——

≥80% coverage rate of the comprehensive ener-gy management platform from 2028

Energy structureoptimization

Propoion of renewable energy use:

Propoion of renewable energyconsumption to the Group’s totalenergy consumption

——

≥10%propoionof renewableenergy use

≥20%propoionof renewableenergy use

——Supply ChainEmissionReduction Goal

To reduce major suppliers’ GHG Emission Intensity by 30% compared to 2021 by 2030 (“3030”)Interim GoalsIndicators

BaselineYear

202620282030

GHG emissionintensity reduction

Average GHG emission intensity ofmajor suppliers

2021

Include GHGemissionintensityof majorsuppliers inpeormanceassessments

Continuouslyassessmentpeormanceevaluationand increaseweight ofrelatedmetrics

Set supplier

GHG emission

intensity

reduction as

an exclusiona

criterionEmpowerment forsupplier emissionreduction

Frequency of empowerment forsupplier emission reduction

——

Conduct annual GHG emission sueys of majorsuppliers, and provide emission reductionguidance, training, and technical suppo

Total GHG Emissions Reduction PracticeINOVANCE has implemented a series of GHG reduction actions aligned with the“2850”and“3030”

goals. Core initiatives include building and certifying energy management systems at major energy-consuming sites, establishing an energy and carbon emission management platform, continuously advancingoperational optimization and energy-saving retrofit projects, raising standards for plant construction, andpromoting energy conservation and emissions reduction among upstream suppliers, to ultimately acceleratethe achievement of emission reduction goals across the entire value chain. (For details, please refer to“Strengthening Energy Management”.)

Strengthening Energy Management

Annual Key Performance

Energy saved from new energy saving projectsPropoion of Renewable Energy Use

Total GHG Emissions Reduced

Total Energy Consumption Intensity

1,458,755kWh/year

12,170.82

6.91%

0.94

tCO

e

tons of standard coal perRMB million of revenue

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

Energy Management StrategyImproving the energy management system, optimizing the energy mix, and continuously implementing energy-saving and emission reduction projects are critical for INOVANCE to realize low-carbon production and climatetargets. The Company has formulated management policies including theISC Energy-Saving ManagementSpecication, the Green Facto Construction Specication, and theISC Organizational Energy Consumption AccountingSpecication, and set specic energy-saving targets measured by energy consumption per unit output value.The Company continues to increase renewable energy usage. In the reporting year, total renewable energyconsumption

reached 19,624.75 MWh, accounting for 6.91% of the Company’s total energy consumption.The associated reduction in GHG emissions was 11,325.95 tCO?e. By the end of the repoing period, the totalinstalled capacity of renewable energy power generation equipment within the Company’s operational scopereached 18.83 MW, of which 10.20 MW was newly installed distributed photovoltaic (PV) generation capacity inthe repoing year

.The Company continues to promote the establishment and ceication of energy management systems acrossits business entities. During the reporting period, Suzhou INOVANCE was awarded the title of“2024 GreenFacto in Jiangsu Province” by the Indust and Information Technology Depament of Jiangsu.

Note：

1. Total renewable energy consumption includes green electricity purchased via green certificates, self-generated and consumed

electricity from Company-owned renewable energy facilities, and PV electricity purchased at preferential rates from leased rooftopspace.

2. Total installed capacity of renewable energy and newly installed distributed PV generation capacity include both Company-owned

and EMC-model rooftop installations.

Note：

1. Total GHG emissions reduced = emissions reduced from renewable energy use + emissions reduced from new energy

conseation projects.

Technical Energy-saving Projects implemented during the repoing period include:

CategoryIntroduction

InvestmentAmount(RMB 1,000 )

EstimatedAmount ofEnergy Saved

(kWh/year)

EstimatedProjectBene?t(RMB 1,000 /year)

GHG EmissionsReduced(tCO?e/year)

Energy-savinglighting retrot

The company carried out an energy-saving lightingretrot at the Suzhou INOVANCE’s warehouse by replacinghalogen lamps with LED sensor lights to improve lightingeciency and provide illumination as needed, eectivelyreducing energy consumption in the warehouse lighting.

230.9309,461247.6185.00

Expansion of aircuain use in logistics

The Company expanded the application of thermalinsulation air cuains at the logistics dock area of SuzhouINOVANCE, reducing heat/cooling loss and lowering theenergy consumption of the air conditioning system.

22.89,8277.95.87

Insulation of exhaustpipelines

Suzhou INOVANCE added insulation to exhaust pipelinescaring residual heat in workshops, signicantly reducinguncontrolled heat dissipation and lowering the energyconsumption of the air conditioning system.

11.217,28013.810.33UV curing furnaceupgrade

Suzhou INOVANCE introduced LED UV curing technologyto replace high-energy mercu lamp systems, reducingenergy use of curing furnaces.

208.0190,080152.1113.63Air compressorlinkage upgrade

The air compressor system in Area B of SuzhouINOVANCE was upgraded from independent operationto interconnected hardware setup, with intelligentmanagement enabled via INOVANCE’s proprieta“DigitalAir Compression System”, resulting in signicant energysavings.

198.0680,000544.0406.50

Paint sprayingprocess optimization

Yueyang INOVANCE optimized its spraying process toreduce the number of coating applications, therebylowering energy consumption.

/35,10028.017.20Oven eciencyimprovement

Yueyang INOVANCE improved the ding process,signicantly reducing preheating and curing time, thusdecreasing energy use in ding and curing stages.

/7,0075.63.43Use of energy-ecient equipment

Yueyang INOVANCE purchased inveer air compressorunits equipped with the Company’s in-house AC drives,eectively improving gas-to-electricity ratios andsignicantly increasing energy eciency.

/210,000168.0102.90Total670.91,458,7551,167.0844.87

Advancing Energy Conservation and Emission Reduction

INOVANCE upholds the energy management philosophy that“the greenest electricity is the electricity saved”.In addition to continuously increasing renewable energy use, we have implemented diverse technical energy-saving and management optimization projects to fuher improve energy eciency.

Note：

1. Estimated project benet refers to reduced energy costs due to energy savings, calculated based on RMB 0.80 per kWh.

2. Reductions in GHG emissions are calculated based on the carbon dioxide emission factors for each regional power grid, as outlined in the

Minist of Ecology and Environment’s Announcement on the Release of CO

Emission Factors for Electric Power in 2022.

Management Optimization Projects Implemented during the Repoing PeriodCategoryMeasuresProgress and ResultsEnergy managementsystem building

We advanced energy management in a systematicmanner to ensure legal compliance, conductedenergy audits, identied oppounities for energyeciency improvement, continuously enhancedenergy management eciency, and raisedemployee awareness of energy conseation.

Suzhou INOVANCE passed ISO 50001:2018 Energy Management Systemceication during the repoing period.

Renement ofstandards for newinfrastructureconstruction

We revised the Green Facto ConstructionSpecication based on the Evaluation Table ofGreen Facto Indicators issued by the Ministof Indust and Information Technology, andproposed specic construction requirementsfor new factories from intensive land use, non-toxic raw materials, clean production, resourcerecycling, and low-carbon energy.

The construction specication has been applied during the newinfrastructure construction projects of Nanjing INOVANCE, JinanINOVANCE, and Xi’an INOVANCE.

Application andoptimization of thecomprehensiveenergy managementplatform

Nanjing INOVANCE and Changzhou New Energyapplied the Company’s self-developed energymanagement system.

As of the end of the repoing period, the number of manufacturingcenters applying the system reached four, indicating continuousenhancement in comprehensive energy management.

New energy consumption monitoring and analysisfunctions for single products.

By enabling data integration with the MES system, the platform hasfacilitated energy consumption monitoring and analysis at the single-product level, providing data suppo for manufacturing cost and productcarbon footprint accounting, while also helping to identify oppounitiesand potential for reducing manufacturing energy consumption andimproving eciency.New automated energy data repoing function.

Yueyang INOVANCE has implemented automated daily repoing of keyenergy consumption data, streamlining energy management processesand ensuring that management personnel can promptly access andanalyze data, providing strong data suppo and systematic assurance forenergy management.The Perception-Based Behavior Control Systemfor Air Conditioning and Lighting was piloted.

This system uses sensing technologies to detect the real-time needsfor air conditioning and lighting in oce spaces, applying managementstrategies tailored to dierent space types to minimize waste withoutcompromising user comfo. As of the end of the repoing period, thesystem has been piloted in selected areas at Suzhou INOVANCE.Energy-saving tourinspections

The Company routinely conducts tourinspections targeting improvements in energyconsumption related to daily oce operations andmanufacturing activities.

In 2024, the Company conducted 28 energy-saving tour inspections.For identied instances of energy waste, the Company issues internalnotications and takes corrective actions to ensure proper implementationof the improvements.

Energy-savingtraining

The Company conducted various energy-savingtraining sessions.

We conducted a total of 12 training sessions on topics related to carbonpeaking and carbon neutrality were conducted, with 511 trainees intotal, who were mainly team leaders from various manufacturing centersand other personnel involved in energy-saving management.One energy-saving training session was delivered to newly recruitedgraduates.These targeted energy-saving training programs enhanced employees’awareness and skills related to energy conseation.

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

Innovative Green Products

Optimizing product design to reduce product weight or volume, with afocus on selecting green and renewable raw materials, thereby reducingmaterial consumption.MaterialConservation

The MD630, INOVANCE’s new generation of globalgeneral-purpose AC drives, features innovative coolingtechnologies and an advanced minimum currentalgorithm. Compared to the previous generation, itachieves a 10% reduction in current under equal load,20% less copper loss in motors, and an average volumereduction of 30%, effectively saving cabinet spaceand reducing product weight and natural resourceconsumption. All models in the MD630 series meet the IE2energy eciency level.

Case: MD630 Series General-purpose AC Drives

In the context of the global green and low-carbon transition, INOVANCE integrates ecological andenvironmental protection values into product innovation, exploring potential for resource intensiveutilization in design and manufacturing, enhancing energy-saving performance, reducing resourceconsumption, and actively practicing the circular economy model.

Product Green DesignINOVANCE adheres to the principle of green design with the INOVANCE Product Identity Design Guidebook

published as a fundamental guideline for product design. The guidebook explicitly states that product designshould follow the principles of“material conservation, process simplification, packaging minimization, andfunctional modularization”to comprehensively reduce GHG emissions and resource consumption throughoutthe product lifecycle, fuher enhance the environmental protection and sustainability of products.

Product Design Principles

The HD3X series adopts a three-level topologyand common DC bus design. Compared tocascaded AC drives of the same specification,the HD3X significantly reduces productvolume and weight, easing space and loadrequirements while boosting energy efficiencyby 2% to 2.5%, lowering the product usagecost throughout the entire life cycle for users.This product has been successfully applied inseveral major projects.

The Company is phasing in paper materials to replace wood and plastic in product packaging,reducing negative impact on the environment. By the end of the reporting year, about 20% ofproducts on sale used paper-based packaging, and nearly 50% of newly developed products adoptedsuch solutions.

Case: HD3X Series Three-level Medium-voltage AC Drives

Case: Paper Instead of Wood and Plastic

Streamline packaging size, save packaging materials, gradually replacedisposable packaging materials with recyclable or reusable materials, andminimize packaging waste.

Adopt compact layouts and modular thinking to streamline componentsand reduce resource consumption during production.

PackagingMinimization

FunctionalModularization

The Company reduced material use by reusingand simplifying internal structures, optimizing PCBlayout and component installation. For instance,in the IO product, enhanced modular designlevel and material reuse rate led to breakthroughthin-wall designs that reduced product weightand plastic consumption. This measure alone isexpected to save 27 tons of plastic annually.

Case: IO Product Modular Design

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

The Company has continuously strengthened the standardization of mold design. By enhancingthe standardization degree of mold bases, the reuse rate of molds has been increased andthe demand for newly opened molds has been reduced. Through the modularization andplatformization of mold development, the proportion of reusing existing structural designsand matching molds in the process of new product development has been increased, therebyreducing the number of newly opened molds. This approach saved an estimated 12.2 tons ofstainless steel in 2024 mold development.

Case: Mold Standardization

In 2024, the Company replaced the sheet metal material in the elevator ARD emergency powersupply product with high-strength engineering plastic. While ensuring structural strength andproduct quality, this initiative reduced product weight by 30%, thereby lowering the consumptionof natural resources. At the same time, as plastic can be formed through injection molding, itnot only reduces the number of components and assembly procedures but also eliminates theenvironmental impact of the painting process required for sheet metal.

In the reporting year, the Company carried out lean management focusing on QCD (Quality, Cost,and Delivery), aiming to eliminate waste and enhance production efficiency and process quality.The Company established a capacity planning mechanism to review the production resources ofeach manufacturing center monthly. Based on client demand, we allocated personnel, equipment,and site resources reasonably and invested in value-added projects to ensure effective resourceutilization and avoid waste. At the same time, we actively promoted digital transformation byintroducing tools such as Andon systems and SFM digital systems to achieve real-time monitoringand analysis of production data, thereby improving management efficiency and decision-makingaccuracy, and suppoing ecient on-site operations. In 2024, through increasing automation rates,lean improvement, process optimization, and energy-saving technological upgrades, the Companyenhanced both production eciency and resource utilization.

In 2024, INOVANCE Automotive set a target of over 40% utilization rate for recycled aluminum.By the end of the reporting period, the utilization rate of recycled aluminum at INOVANCEAutomotive had increased to 55%.

Material Substitution

Material Recycling and Reuse

Case: Plastic is Used to Replace Sheet Metal in the Elevator ARD Emergency Power Supply

Case: INOVANCE Automotive Increases Aluminum Recycling Rate

Practicing Circular Economy

The Company consistently upholds the concept of circular economy, comprehensively enhances resource useefficiency, and achieves resource recycling and sustainable economic growth. Through material substitution,reduction, recycling and reuse, and improved management efficiency, the Company gradually explores andpromotes optimal solutions that balance economic and environmental benets.

Management E?ciency EnhancementCase: Lean Management to Improve Automation and Digitalization

In 2024, the Company’s products and solutions continued to be successfully applied across multiple sectors includingindust, transpoation, and power, suppoing the green and low-carbon transformation of various industries.Enhance production eciency and product qualityConsee energy, materials, labor, and space

“Two Enhancements”“Four Conservations”

Jointly Building a Net-zero Future

Case: Upgrading Vertical Mills in the Steel Industry

Annual Key Performance

Newly avoided GHG emissionsProportion of revenue derived from clean

tech-related products and seices

59.63%

tCO?e/year14,447,904

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

Achieving the dual-carbon goals and promoting a net-zero future depends on cooperation andcollaboration across the entire society. INOVANCE insists on innovation in products and solutions. Onthe one hand, we implement the requirements of“Four Conservations and Two Enhancements”tocontinuously enhance the overall competitiveness of our products and solutions. On the other hand,we remain agile in sensing and capturing the demand for green and low-carbon transformation acrossindustries, creating green and low-carbon value for customers and users.

The Company continuously iterates its products and solutions to provide efficient,energy-saving, and environmentally friendly oerings to clients across industrial sectors.Industrial Sector

In 2024, subsidiary Dalian Zhiding partnered with Angang GreenSource to apply its newly developed 3 MW high-voltage semi-direct-drive vertical mill drive system to actual production scenariosat Angang Green Source. This filled a gap in the application ofpermanent magnet motors in slag micropowder production,signicantly improving equipment production eciency and productquality, enhancing energy savings, and reducing system failure rates.The system adopts INOVANCE’s frequency conversion intelligentspeed regulation technology, which precisely controls motor speed according to production needs, eectively avoidingquality instability issues caused by speed fluctuations in traditional motors. In addition, the system’s coaxial drivelow-speed gear design significantly improves operational efficiency, achieving an annual energy saving rate of over10%, with notable energy-saving and emission-reduction effects. The semi-direct-drive permanent magnet designintegrates the motor, reducer, and gear bearing into a“three-in-one”drive system, simplifying the transmissionstructure by 50%, reducing failure rates by 80%, and shoening fault detection and maintenance cycles by 95%.

Onboard vehicle-mounted charging system are evolving toward reduced space occupancy, higher chargingefficiency, greater reliability, and lower incidence of safety issues. The subsidiary INOVANCE Automotivecontinuously launches high-power-density, high-eciency, highly reliable, and highly safe power supply productsto meet market demand. INOVANCE Automotive’s 6.6 kW (OBC) + 3 kW (DC/DC) integrated product reaches apower density of 3.6 kW/L (including in-vehicle discharge), significantly enhancing power density. It supportsmultiple charging/discharging and DC/DC eciency congurations, achieving a charging eciency of 94% to 96%.The product uses components that meet full automotive-grade standards, passing reliability tests equivalent to 15years or 300,000 kilometers (reliability > 99.7%). Its functional safety level reaches ASIL D, with fully veried safetypeormance. INOVANCE Automotive’s innovative onboard power solutions for new energy vehicles not only oerhigher quality, reliability, and safety but also contribute to improved energy efficiency and extended lifespan ofnew energy vehicles, suppoing the green development of the transpoation sector.

Case: Innovative Onboard Power Supply Solutions for New Energy Vehicles

The Company continues to make efforts in the transportation sector, with innovativegreen products and solutions widely applied in transport vehicles and infrastructure,helping the transpoation indust move toward green and intelligent development.TransportationSector

INOVANCE’s MV33 series is a new generation of flat-wire permanent magnetsynchronous motor featuring ultra-high energy efficiency, compact design, highreliability, and modular structure. This series adopts Vplus-hairpin at wire technology.Compared to commonly used round wire, this design improves slot fill rate by 20%,significantly enhancing power density, reducing line energy loss, and achievingcompact size and high energy efficiency. The product can reach a maximum energyefficiency level of“IE6”

[Note], and achieves“Double 90”high-efficiency zoneperformance, i.e., efficiency above 90% in 90% of the operating range. Under thesame conditions, its power loss is over 20% lower than that of motors meeting thehighest IE5 standard. Furthermore, the product significantly reduces its physicalvolume and the consumption of raw materials. For the same power output, the MV33series motor is 20% to 40% smaller than IE3 eciency asynchronous motors, reducingthe installation space required and promoting equipment miniaturization, therebyfuher decreasing consumption of natural resources.

Case: MV33 Series Low-voltage Permanent Magnet Synchronous Industrial Motors

Note:

The“IE6”eciency level is an internalestimate and not an ocial standard,intended to indicate peormancesignicantly exceeding the IE5eciency level.

Case: Industrial and Commercial Energy Storage Net-zero Solution for aClient in Zhumadian, Henan Province

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

The Company actively participates in the construction of new power systems,focusing on generation, grid, load, and storage, and innovates integrated multi-scenario solutions to suppo the green and low-carbon transformation of the powersector. Taking the energy storage business as an example, by the end of the repoingperiod, the Company had cumulatively delivered over 15 GW of energy storageproducts to the market, covering multiple application scenarios including large-scalepower station storage, commercial and industrial storage, and residential storage.Leveraging our deep expertise in power electronics, control technology, and digitalenergy management, we have developed energy solutions that cover all aspects ofgeneration, transmission, distribution, and utilization. In 2024, the Company innovateda commercial model for zero-carbon park solutions and collaborated with ecosystempartners across the industry chain to provide customers with integrated servicesincluding consulting, design, procurement, construction, and operation.

Power Sector

The industrial and commercial energy storage project for a client in Zhumadian, Henan Province is INOVANCE’sfirst self-invested, self-built, and self-operated energy storage station. It also marks the Company’s first pilotEPC-mode industrial and commercial energy storage project. The project centers on three sets of 100 kW/232kWh integrated industrial and commercial energy storage cabinets, which use liquid cooling for heat dissipationand are connected to the grid, distributed photovoltaics, and charging pile systems. After commissioning,the project will reduce electricity costs for the owner, improve power supply stability and renewable energyconsumption capacity, and support the owner in continuously optimizing energy structure and progressingwith green and low-carbon transition.

LoadCharging PileEnergy StorageCabinet

Cloud EMS

CombinerCabinetDieselGeneratorPVModule

PV Inveer

TransformerGrid

Comparison of Directly and Collaboratively Avoided GHG Emissions

Accounting Bounda

Scope 4 CategoryDirectly Avoided GHG EmissionsCollaboratively Avoided GHG Emissions

Denition

A facility or equipment, after using INOVANCE’sproducts or solutions, does not signicantlychange its core feature or form, but ratherproduces notably less GHG emissions beyondthe value chain while fullling the samefunctions.

INOVANCE, in synergy with its industrial paners,has jointly contributed to a fundamental changeor substitution of a facility or equipment, and suchchange or substitution has produced notably lessGHG emissions beyond the value chain.

Calculation method

Directly avoided emissions = GHG emissionsof the original facility or equipment underthe baseline scenario - GHG emissions of thefacility or equipment after using productsand solutions of INOVANCE under the samescenario

Collaboratively avoided emissions = GHGemissions of the original facility or equipmentunder the baseline scenario – GHG emissionsof the new facility or equipment applyingINOVANCE’s products and solutions under thesame scenarioWhether there isany change in thecore feature of theequipment/facilities

NoYesAttribution ofavoided GHGemissions

All allocated to INOVANCEPaially allocated to INOVANCE

Scope 4 CategoryDirectly Avoided GHG EmissionsCollaboratively Avoided GHG EmissionsSystem bounda

GHG emissions generated by the equipment or facilities applying INOVANCE’s products during theiruseFunctional unit

Each facility or equipment equipped withINOVANCE’s products

Each substitute facility or equipment withequivalent functionsTime periodFrom Janua 1, 2024, to December 31, 2024

INOVANCE disclosed“Scope 4: Avoided GHG Emissions”for the rst time in the 2023ESG Report (for the definition of Scope 4, please refer to the Environmental, Social,and Governance Report 2023), as a means of quantifying the energy-saving andcarbon-reduction benets of the Company’s products. In 2024, INOVANCE continuedto calculate both directly and collaboratively avoided GHG emissions resulting fromthe different categories of products launched during the year based on actualbusiness conditions and fuher optimized the calculation methodology.

Scope 4:

Avoided GHG

Emissions

For the methodology and allocation rules for calculating avoided GHG emissions, please refer to the relevantsection of the Company’s Environmental, Social, and Governance Repo 2023.

Directly avoided GHGemissions

Collaboratively avoidedGHG emissions

20232024

CategoryApplication Classi?cation

Avoided GHG Emissions

(tCO?e/year)

Directlyavoided GHGemissions

Application of AC drive products across various industries, includingair conditioners, air compressors, textile machine, lifting equipment,and fans and pumps

4,700,983Application of hydraulic seo systems across various sectors, includinghydraulic stations, bending equipment, and forging equipment

485,595Application of high-eciency permanent magnet synchronous motorsin industries such as fans and pumps, injection molding machines,textiles, and rail transit

70,698Application of regenerative AC drives across various industries,including test benches, large transmission equipment, elevators, etc

64,064Power-related applications, currently referring specically to shorepower systems

20,337

Collaborativelyavoided GHGemissions

Application of wind power pitch control systems and yaw systems inwind power generation equipment

7,413,067Application of traction conveers and asynchronous traction motors insubways, light rail, and trams

7,251Application of electric drive systems, motors, powerains, and vehicle-mounted charging systems in electric passenger vehicles

460,331Application of electric drive systems in electric commercial vehicles1,225,578Total14,447,904

tCO?e

tCO?e

tCO?e

tCO?e

4,375,424

4,904,111

5,341,677

9,106,227

Empowering Decarbonization / 2024 SUSTAINABILITY REPORTAccording to incomplete statistical calculations, the“Scope 4: Avoided GHG Emission”eects of the productsand solutions launched by INOVANCE in the market in 2024 are as follows:

Since 2023, through innovation in products and solutions, INOVANCE has cumulatively avoided 35,944,958tCO?e of GHG emissions for society.

Ecosystem ProtectionINOVANCE pays close attention to the environmental impact of its production and operational activities.We have established and improved an environmental management system, identified and mitigatedenvironmental risks, and strictly controlled pollutant emissions in accordance with laws and regulations.We are committed to protecting the ecological environment and biodiversity at our places of operationand promoting the development of sustainable cities and communities.

Environmental Compliance ManagementThe Company and its subsidiaries have strengthened the construction of environmental management systems,regularly identify environmental risks, and formulate emergency response plans for major risks. The Companyconducts internal audits and accepts third-party audits in accordance with ISO 14001?2015 requirements,continuously improving weak points in the management system. In 2024, one additional key operationsite (Yueyang INOVANCE) obtained ISO 14001 certification, and several other key sites passed systemrecertification. As of the end of the reporting period, 66.67% of key operation sites had obtained ISO 14001ceication. During the repoing period, the subsidia Suzhou INOVANCE was awarded the honora title of

“2024 Gold Medal Enterprise of the Suzhou Enterprise Self-Inspection and Self-Correction Service Platform”

by the Suzhou Municipal Bureau of Ecology and Environment.

Pollutant Emissions ManagementThe Company strictly carries out business activities in accordance with the relevant laws and regulations of thecountries and regions where it operates. Internal policy documents such as theHazardous Waste ManagementSystem, the Waste Management Procedure, and theOccupational Health,Safety and Environmental Monitoring andMeasurement Procedurehave been issued. We collect and monitor waste emission data and collaborate withprofessional third paies to properly dispose of various types of pollutants. We are steadily promoting emissionreduction and improving recycling and reuse rates.

Emission Type

Collection and Monitoring

Process

Disposal Method

Examples of Reduction, Recycling

and ReuseDomestic sewage

Sampling and monitoringof wastewater quality iscommissioned annually to athird-pay agency.

Sewage is collected throughmunicipal pipelines andtranspoed to municipalsewage treatment plants fordisposal.

Sensor-activated water dispensers areused for domestic water, and posterspromoting water conseation aredisplayed nearby to advocate water-saving behaviors and reduce domesticwastewater discharge.Waste gas fromproduction

Waste gas is collected throughsealed piping, and its dischargeis monitored annually by athird-pay agency to ensurecompliance.

Waste gas is disposed ofthrough waste gas treatmentfacilities, such as high-ecient ltration of dust andadsorption of VOCs waste gasusing activated carbon.

We use water-based cleaning agentsinstead of solvent-based cleaningagents, and solvent-free impregnatingvarnishes instead of solvent-basedimpregnating varnishes to reduce VOCemissions.General industrialsolid waste

Industrial solid waste is properlysoed, centrally collected inworkshops, and then transpoedto general industrial solid wastewarehouses for compliantdisposal.

Solid waste is entrusted toinstitutions with qualication toconduct general industrial solidwaste disposal.

Packaging waste from product transfersand shipping is reduced by usingrecyclable or reusable containers.

Hazardous waste

Hazardous waste is centrallycollected in workshops andstored in a hazardous wastewarehouse in categorized zones,then legally transferred to third-pay disposal organizations.

Hazardous waste is entrusted toinstitutions with qualication toconduct compliant hazardouswaste disposal.

We purify and recycle cleaningwastewater through processimprovements.

Annual Key Performance

Water recycling rate

75.03%

Empowering Decarbonization / 2024 SUSTAINABILITY REPORT

Water Resource UtilizationIn 2024, INOVANCE used the Aqueduct Water Risk Atlas developed by the World Resources Institute (WRI) toassess water-related impacts at 23 operation sites. Based on water-related dependencies, impacts, risks, andopportunities, the Company identified sites located in water-stressed areas and strengthened water-savingmanagement at those sites.The Company has always attached great importance to water conservation. The Company has developedmultiple water resource management initiatives and regularly monitors relevant indicators of water use. Watermeters have been installed at each subsidiary as a statistical unit, and water usage data is collected regularly.For office areas, only certified water-saving fixtures and equipment are permitted. Posters and awarenessmessages are used to guide employees toward water-saving habits in their daily routines. For water usedin factories, the Company requires newly built factories to plan and construct rainwater harvesting andreuse facilities during the design stage. For existing factories, the focus is on strengthening water recyclinginfrastructure and water balance testing.

Biodiversity ProtectionIn 2024, INOVANCE conducted its rst biodiversity impact assessment. The Company selected 12 key operationsites in mainland China and assessed species distribution and proximity to protected areas within a 5 km radiusof each site using a biodiversity impact assessment tool developed by the Shan Shui Conseation Center andthe Peking University Center for Nature and Society.

Species Impact AssessmentWithin the 5 km radius of the 12 evaluated operation sites, no critically endangered or endangered speciesas defined by the International Union for Conservation of Nature (IUCN), nor any critically endangered,endangered, or vulnerable species as listed in theRedlist of China’s Biodiversity, nor any Class-I protected animalsunder the Law of the People’s Republic of China on the Protection of Wildlifewere found. Some key operationsites evaluated are within 5 km of habitats of Class-II protected animals and animals on the List of TerrestrialWildlife Species with Signicant Ecological, Scientic and Societal Value. One vulnerable species was identiedwithin a 5 km radius of the subsidia INOVANCE Automotive.

Protected Areas Impact AssessmentWithin a 5 km radius of eight evaluated key operation sites, there are no national parks, nature resees, WorldNatural Heritage Sites, or Ramsar Wetlands. Four sites are near nature parks, with INOVANCE Automotive andMJB each adjacent to two such parks. We will strengthen ecological monitoring and protection around thesesites in the future.Overall, no significant biodiversity risks were identified within a 5 km radius of the evaluated key operationsites. For species and protected area impact assessment tables, please refer to Appendix 6.

Overall Quality Management

Goals

Based on the current quality levels of dierent products, set dierentiated improvement goals,

with no less than10% improvement.Specic Target IndicatorsTarget for the Repoing PeriodProgress

TargetAchievementStatusCustomer satisfaction

Continue third-pay satisfaction sueys;overall satisfaction increased year-on-year.

Third-pay customer satisfaction scoreincreased by 1.11 points year-on-year

AchievedCustomer issue resolution rate

Customer and internal issue resolution rate >92%

Customer and internal issue resolution rate >

94.60%

AchievedProduct failure rateProduct improvement ≥ 10%Product improvement > 20%AchievedCustomer audit pass rateCustomer audit pass rate: 100%Annual customer audit pass rate: 100%Achieved

Annual Key Performance

Customer audit pass rateCustomer issue resolution rate100%94.60%

Quality training coverage rate for front-line employees

100%

Strict Product Quality Control

INOVANCE strictly complies with theProduct Quality Law of the People’s Republic of Chinaand theRegulations onthe Supeision and Management of Quality and Safety Responsibilities of Industrial Product Production Units, amongother laws, regulations, and product-related standards. With the vision and mission of“Promoting IndustrialCivilization with Excellent Quality,”and the guiding principle of“dual full cycle, dual safety,”we benchmarkagainst indust best practices, focus on customer satisfaction, implement zero-defect management acrossthe entire value chain, and build a platform-based organizational capability centered on prevention tocomprehensively enhance the quality of our products, solutions, and seices.

INOVANCE adheres to the value of“Customer first,”maintains a customer-centric service philosophy,focuses on customer satisfaction, improves product quality, enhances customer experience, and helpscustomers succeed.

Focus on Customer Satisfaction

Focus on Customer Satisfaction / 2024 SUSTAINABILITY REPORT

Product Safety Management?“Dual Full Cycle, Dual Safety” in ProductsINOVANCE places great importance on product safety management and promotes the concept of“dual fullcycle, dual safety”—ensuring personal and propey safety for customers and users across all circulation cycleand the entire product lifecycle. During product design and development, the Company identifies potentialsafety risks based on different application scenarios and implements countermeasures to enhance intrinsicsafety from the source. Product safety and quality performance are incorporated into relevant departmentaland senior management peormance evaluations.

? Enhancing Product Safety Certi?cation RequirementsThis year, the Company added new requirements for document control related to product safety certification,including specications for technical documentation contents, control methods, consistency requirements, keycomponent inspection for explosion-proof products, supplier management (including key components andseice suppliers), and regulations on CCC ceication and mark management.

? Industrial Cybersecurity DevelopmentINOVANCE’s products and systems strictly adhere to cybersecurity standards and specifications throughoutthe design, development, integration, and deployment stages to ensure secure and reliable products andservices for customers. During the reporting period, the Company successfully obtained the IEC 62443-4-1cybersecurity system ceication, highlighting its outstanding capabilities in industrial cybersecurity.

? Product Environmental Substance ManagementIn 2024, the Company developed and implemented standards for managing environmental substances. Thesestandards apply to INOVANCE’s products and all constituent raw materials, parts, components, auxiliarymaterials, consumables, and packaging materials. Combining the requirements of the EU RoHS and REACHdirectives, the Company has strengthened product environmental substance management across the entireprocess. As of the end of the repoing period, there were no product recalls due to safety or health issues.

Product Quality Management

Improving the Quality ManagementSystemIn 2024, the Company continued to build and enhanceits quality management system by optimizing itsstructure, clarifying key quality management initiatives,and updating reward and punishment mechanisms toimprove overall management standards. The propoionof key operation sites certified to ISO 9001?2015 reached100% during the year.

The Company identifies business requirements (including but not limited to customerrequirements, Company strategy, general indust quality management standards, and systemrequirements), establishes quality management master plans for each business module(including quality requirements and elements), and sub-processes for quality domains. Itextracts business-adapted quality elements and fully embeds them into business activities.Quality is ensured through process chain activities, thereby creating value. During the year,the Company collected quality management requirements across all stages of the productcirculation process and full lifecycle and conducted analysis and sorting of the requirementsfor each stage.

The Company focuses on the quality of system construction and requires the system tofully support and enhance physical quality. This jointly drives the implementation of thethree major closed loops: from customer needs to customer satisfaction, from strategy tovalue creation, and continuous improvement of the management system, thus laying a solidfoundation for high-quality development.

Physical QualityManagement

System QualityManagement

? Optimizing Quality Management StructureINOVANCE continuously optimized the business structure for quality management and adopted the "721"principle for hierarchical quality management—resolving 70% of issues at the first level, 20% at the secondlevel, and 10% at the third level— to improve eciency. Under this system, EMT sees as the highest decision-making body for quality management, the management team is responsible for cross-depament coordinationand resource support, departments address internal quality issues, and frontline teams respond quickly tocustomer feedback and resolve on-site quality problems.The Company adopts a model of centralized group planning and localized management, requiring subsidiariesto follow the principle of“the same INOVANCE, the same quality.”Throughout the product lifecycle, theCompany denes quality roles at each stage to ensure quality control at eve link. Quaerly quality meetingsare held to rank the achievement of quality goals and enhance management’s focus on quality peormance. In2024, the Company established a new product quality management team composed of professional R&D stato support quality assurance during the product development stage. The Company further clarified CustomerQuality Management (CQM) responsibilities and strengthened solution-oriented quality management forcustomer-facing activities.? Clarifying the Direction of Quality ManagementBased on actual business needs, the Company has categorized quality management into physical qualitymanagement and system quality management, clarifying the overall direction of quality-related eos.

? Updating Quality Reward and Penalty MechanismsThis year, the Company expanded the scope and lowered the thresholds of quality-related rewards to guideand encourage all employees to practice a culture of quality. Regarding penalties for quality issues, theCompany emphasized accountability in the reporting year to ensure effective implementation of the conceptthat“business leaders are the first person responsible for quality.”By strengthening the leading role ofbusiness leaders, the Company promoted full employee participation in jointly improving product quality andeectively implementing various quality management requirements.

Focus on Customer Satisfaction / 2024 SUSTAINABILITY REPORT

Product Safety and Quality Management at Di?erent Life StagesStageQuality Control InitiativesContinuous Improvement Initiatives

Productdevelopment

· Integrates APQP and IPD, applying automotive quality managementphilosophies, tools, and methods to industrial product development toenhance the quality of new industrial products.· Ensures that the product development stage meets regulatory andother product safety standards, sets dual safety red lines, and enhancesproduct-related safety requirements.· Conducts quality reviews at various stages of research and developmentto ensure the success rate and eciency of product design and development.

· The Root Cause Analysis team is responsible for targetedimprovements to design issues from the previous year.· The NPI Quality organization strengthens quality managementduring the new product introduction process.· Promotes product quality improvements from the sourcethrough design enhancements.

Materialprocurement

· Categorically and hierarchically carries out supplier introduction andquality management work, extending quality requirements to multi-tiersuppliers.· Conducts incoming inspection activities for dierent suppliers, includingregular inspection, external inspection, exemption, and stringentinspection.

· The SQE organization conducts supplier quality assessments,evaluating incoming materials, quality services, 8D reports, andunauthorized changes.· Organizes special improvement competitions and reportingmeetings for suppliers.

Manufacturing

· Promotes intelligent and digital transformation at multiple sites,advances MES development, and ensures precise traceability fromraw materials to finished products and from suppliers to customers,maintaining production quality consistency and gradual improvement.· Tests all products 100% during the manufacturing process.· Implements comprehensive control over all factors in the manufacturingprocess, including personnel, machinery, materials, methods, andenvironment.

· The QCC improvement team continuously addresses and tracksquality issues during production.· A Lean Improvement Organization was established to promoterefined management of the manufacturing environment andachieve zero defects through lean production practices.· Provides training and empowerment to quality personnel,regularly organizes quality conferences and award-reportingevents to enhance motivation for improvements.Market seice

· Focuses on customer satisfaction, upgrades joint warranty spare passeices, and establishes an international technical seice center.· Sets up professional after-sales customer seice and quality complaintinterfaces, providing professional and timely technical support tocustomers.· The after-sales quality depament analyzes quality issues and followsup on them until they are resolved.

· Integrates ITR operations and transformations to strengthen thetiered management of after-sales quality issues, enhancing theeciency and thoroughness of solutions.· Strengthens CQM at the customer end to target and enhancemanagement eectiveness.

? Identi?cation and Prevention of Quality RisksThe Company identifies and assesses product quality risks based on dynamic changes in the internal andexternal environment and business development needs. This year, risk control efforts focused on domesticsubstitution of materials, software development quality, and product safety.Product Safety Risk Control: Based on the“dual full cycle, dual safety”concept and the goal of“zero safetyissues,”the Company identifies and eliminates safety risks throughout the stages of product design,manufacturing, application, and commissioning, ensuring personal and propey safety in all scenarios.Material Domestic Substitution Risk Control: Starting from product design and considering applicationconditions, design requirements, and material characteristics, the Company conducts full-scale optimization—from complete machines to components—covering material certification, supplier management, incominginspection, and production testing to reduce risks associated with material issues.

Software Development Quality Risk Control: The Company carries out software improvement projectsto achieve digital and intelligent improvements in software modularity and self-testing of test software,signicantly enhancing software development quality.During the reporting period, the Company had no product recalls due to legal or regulatory requirements orinstructions from competent government depaments, nor were there any major disputes related to product quality.

Product Lifecycle Quality Management

Internal Audits

External Audits

Focused primarily on the Company’s internal quality management systems andprocesses. In 2024, the Company conducted three internal audits, includingtwo QPA audits of manufacturing processes and one assessment of the qualitymanagement system.

Including third-party audits (system and product compliance audits) andcustomer audits. In 2024, third-party organizations spent more than 12cumulative days conducting audits based on project and order requirements.During the reporting year, the Company underwent 68 customer audits,achieving a 100% pass rate.

Supplier Quality Management

INOVANCE has established an all-process quality control system for suppliers, integrating the ISO 9001 qualitymanagement system standards. Through regular internal assessments, the Company strictly controls thequality of its suppliers. The Company categorizes and ranks suppliers, provides improvement plans for non-compliant ones, and establishes a phase-out mechanism to enhance overall supplier quality.? New Supplier Admission Audit

The company follows theNew Supplier Audit Process and Management Standardsand theSupplier FactoryAudit Reportfor guiding new supplier admissions, requiring all new suppliers to pass the ISO 9001 qualitymanagement system. New suppliers are assessed in several dimensions including quality system maturity,environmental and safety standards, quality organization and personnel capabilities, process qualitymanagement, customer seice, reliability assurance capabilities, and sustainable development. In the repoingyear, additional evaluation criteria such as operational risk and key person insights were introduced for newsuppliers.? Supplier Material Quality ManagementThe Company has established material quality management procedures and processes, including theInspectionGuidelines for Risk Procurement Materials, the Material Reliability Management Guidelines, and theEnvironmentalCompliance Specications for Materials.The company applies differentiated quality management strategies based on the category and gradeof materials. For critical materials, quality risk prevention management is conducted in advance, withstrengthened controls for special material characteristics and enhanced quality grading. For general materials,an elimination policy is implemented to intercept and prevent defective materials from entering the process.Additionally, the company has implemented theComponent PPAP Process, requiring suppliers to pass thecomponent PPAP ceication to better meet customer quality requirements.

Focus on Customer Satisfaction / 2024 SUSTAINABILITY REPORT? Internal and External Quality AuditsEvery year, INOVANCE conducts internal audits and third-party supervisory audits for quality managementin accordance with ISO 9001 standards, customer requirements, and industry standards to identify areas forquality improvement and ensure products meet customer quality management requirements.

Training on the ImplementationStandards for Product EnvironmentalSubstances and Supplier EnvironmentalCompliance Management

Supplier Quality Communication onEight Major Quality Areas

Supplier Change and Variation Risk

Communication

Material Quality RiskIdenti?cation

Control Measures

Classication and grading ofmaterial quality risks

The Company implemented the Material Quality Grading Rules and used templates such as the Supplier QualityInformation Suey. In 2024, quality grading was applied to new substitute materials and existing high-risk materials.Supplier material change risks

The number of supplier change scenarios was expanded from 7 to 25, including scenarios such as cleaning auxiliamaterial changes and multi-tier supplier changes. The supplier change management process was reviewed and optimized.The PCN Agreement and the PCN Guidelines were updated, and 47 QPA audit checklists were archived and applied.Supplier material variation risks

Through monthly quality data monitoring of the “Three Key Elements” (key personnel, key activities, and keycharacteristics), along with unscheduled and unannounced audits, the Company strengthened quality oversight andmanagement of supplier production processes.Supplier material reliability risks

A Key Reliability Verication Checklist was developed to unify critical material reliability management requirements.The Material Reliability Management Guidelines were optimized. A reliability repo monitoring mechanism wasestablished for suppliers, along with Reliability Test Standards for 55 material categories. Quick product reliability test(ORT) schemes were implemented for high-risk materials such as power devices.

? Supplier Quality Performance Management

Based on documents such as the Industrial Supplier Quality Peormance Management Specications, theFull SupplyChain Supplier Quality Management System, and theTier 2 Supplier Quality Management Standards, the Companymanages quality for suppliers of different types and levels. INOVANCE conducts monthly performanceassessments for key suppliers, covering environmental performance, safety compliance testing, major qualityissues, unauthorized changes, and market quality issues. Suppliers are graded as Excellent (Grade A), Good(Grade B), Poor (Grade C), or Eliminated (Grade D).Beyond tier-1 suppliers, the Company clearly communicates customer requirements, quality standards, andquality goals to multi-tier suppliers and collaborates with tier-1 suppliers to implement quality managementfor multi-tier suppliers, requiring direct suppliers and key material sub-suppliers to signQuality AgreementsandChange Management Agreements. During the reporting period, the Company completed quality performanceassessments for 225 key suppliers.? Supplier Performance Improvement and CoachingFor suppliers that fail assessments, the Company provides coaching and monitors the implementation ofcorrective actions to ensure closed-loop management of quality issues. If improvement is unsatisfactory, theCompany may adjust procurement quotas, eliminate material codes, or disqualify suppliers to prevent recurringquality problems. Additionally, the Company emphasizes supplier quality requirements communication, organizesad hoc quality training and coaching, and holds supplier quality conferences to align suppliers with INOVANCE’squality strategies, control points, and goals. No suppliers violated the Company’s red-line principles during theyear (including authenticity of documentation, integrity, audit safety, and cooperation principles).

INOVANCE Quality

Policy

Aiming to meet the requirements of

global customers

Building a high-quality industrial

chain

Focusing on key issues, key characteristics, and key peopleFull participation, prevention oriented, do it right the ?rst time, e?cient response

Based on the principle of matchingcustomer business processes

Achieving customer value through

excellent quality

The Company held nine basic training sessions on safety standards and product certifications, reaching over 400 participants. Safetystandards training materials were developed for R&D sta, and product ceication training materials were tailored for marketing sta.Product Safety Standards and Certi?cation Training

The Company compiled training materials based on the Implementation Standards for Environmental Management Substances and publishedthem on the knowledge platform. Additionally, six internal training sessions and one empowerment session involving over 300 suppliers wereconducted.

Training on Product Environmental Management Substances

The Company organized one hands-on training session on quality assurance systems for product certifications. The training explained therequirements of common certification types (e.g., CCC, UL, CQC, ATEX), matched certification requirements to end-to-end processes fromincoming materials to shipping, standardized operations, provided examples of ceication control points, and oered practical managementtools.

Training on Product Certi?cation Management Rules

In May and September 2024, the Company organized two company-wide quality quizzes, with over 15,000 participants, promoting thedissemination of quality knowledge and raising quality awareness among all employees.Quality Knowledge Quiz

Focus on Customer Satisfaction / 2024 SUSTAINABILITY REPORT

Quality Culture and Training

.? Quality Culture DevelopmentIn response to current and future business needs, INOVANCE has strengthened its quality culture by formulatingand publishing a quality vision, mission, and values, and upgrading its quality policy to define the direction andguiding principles for future quality work, thereby guiding and constraining employees to work toward sharedquality goals. In 2024, the Company held its third Quality Conference, during which the Chairman ocially signedand issued the updated quality culture content, clarifying the development direction for quality work.

.? Deepening Quality Training

The Company continuously conducts quality training for all employees. In 2024, the Company delivered 175quality training sessions for core sta in R&D, production, sales, and seice positions, and conducted monthlytraining sessions for frontline production staff. A mandatory semi-annual job rotation policy was implementedfor special positions to improve employee skill breadth and job safety. The Company updated the skillceication system and training content, continuously iterating courses in response to the growing automationlevel in production and evolving business needs to support Company development and employee upskilling.The training content is diverse and aligned with the Company’s annual work priorities, with designated themesfor quality management training and activities.

Improving Customer Seices

2141

6629

repair centerssubsidiaries and ocesrepair centers

elevator authorized stores

regional spare pascenters

seice providersseice stationjoint warranty centersspare pas centers

A total of 693 seice sites, including 271 newlyadded in 2024. Seice sites are categorized asfollows:

A total of 68 seice sites covering over 20countries and regions, including:

Customer Service Management System.? More Professional Service Team

The Company has established a customer service team consisting of direct employees, service providers,and certified partner engineers. In 2023, an overseas service department was also established. INOVANCE’sTechnical Service Center set up a“Service Partner Management”module, responsible for selecting, utilizing,developing, and retaining service providers. It also formulated theService Partner Service Specification (GeneralAutomation/Elevator)as a management standard.As of the reporting period, the customer service team comprised 329 in-house employees (with 13 newly addedin 2024), 119 ceied paner engineers (with 116 newly registered in 2024), and the overseas seice depamenthad 25 engineers, including seven local engineers and 18 engineers available for overseas assignments.The Company attaches great importance to the capabilities and professionalism of its customer service teamand actively conducts knowledge and skills training for relevant personnel. During the repoing period:

The Company also emphasized knowledge documentation to improve the learning and working eciency of seicepersonnel. By the end of the repoing period, a total of 123 related knowledge documents had been archived..? More Comprehensive Service NetworkINOVANCE is committed to providing more comprehensive and timely service and technical support to globalcustomers. We continue to expand our customer seice network at home and abroad, strengthen the planningand development of the“three-level spare parts warehouse”system, significantly reduce the time forcustomers to receive spare parts, and achieved a timely (within 24 hours) delivery rate of over 70% during therepoing period, up 20% to 30% year-on-year.

Domestic Service NetworkOverseas Service Network

(as of the end of the repoing period)(as of the end of the repoing period)

838 training sessions were conducted for customer service personnel (including service provider staff), withtotal participants 11,101 person-times.A special training camp was held for 42 core customer service sta?.The“Golden Seed”capability development program was launched for some frontline service sta?, combiningonline self-learning, in-person mentorship, and evaluation, with 65 participants.

“My INOVANCE” One-Stop Information and Seice App2024 Key Performance Indicators

400 Customer ServiceHotline

“My INOVANCE” App

(as of the end of the reporting period)

139,000

3,000+

167,67230,000+

91.23%267

Registered users

Daily active users

Calls handledMonthly active users

Issue resolution rateSeice marketplace orders

342,378

226,627

Total incoming calls

Eective intelligentcustomer seice sessions

Focus on Customer Satisfaction / 2024 SUSTAINABILITY REPORT? More Diverse Service ChannelsThe Company actively explores and maintains diversified customer service channels combining online andoffline modes. Online channels include the 400 customer service hotline, intelligent customer service, and the“My INOVANCE” app, while oine seices rely on physical seice sites.

“My INOVANC” is the Company’s dedicated app providing one-stop information and services for customers,offering modules such as service marketplace, product information, and video tutorials. In 2024,“MyINOVANCE”added a quick order placement feature to enhance service efficiency. Additionally, the overseasversion of the app,“My INOVANCE,”was officially launched to support customers in product and documentinquiries, helping the Company better see overseas customers.Regarding intelligent customer seice, the Company focused on building an AI-based customer seice systemduring the repoing period, resulting in approximately 80% increase in seice issue throughput.

Customer Satisfaction Management.? Customer Satisfaction SurveyTo better implement the business philosophy of“greater customer satisfaction and more ecient operations,”

the Company introduced third-party customer satisfaction surveys starting in 2023 to identify andcontinuously improve high-priority issues. In 2024, the customer satisfaction score from the third-pay sueyreached 70.86, an increase of 1.11 points from the previous year. Survey results showed that the Company’scustomer satisfaction ranked among the top in the domestic industrial automation control industry. TheCompany annually analyzes customer satisfaction reports to identify core concerns and determine key driversof satisfaction. Special plans are developed to address various issues, and internal processes and systems areoptimized to continuously improve customer satisfaction..? Customer Complaints and ResolutionThe Company has established an efficient“Issue-to-Resolution”(ITR) process, utilizing a three-tieredresponse mechanism involving frontline service staff, extended support personnel, and R&D engineers topromptly respond to customer demands, drive swift issue resolution, minimize negative impacts, and improveproduct quality. In 2024, the customer issue resolution rate reached 94.60%..? Customer Privacy ProtectionINOVANCE places a high priority on customer privacy protection, with strict information access controls inplace, and is committed to collecting, accessing, using, or disclosing customer data only with explicit consentand for legal and appropriate business purposes. Throughout our collaborations, we strictly adhere tocustomers’rules and regulations, cautiously safeguarding customer assets including trade secrets, intellectualproperty, proprietary technologies, and information assets. Throughout the reporting period, there were noincidents of customer privacy or information leakage.

R&D Innovation Focus

Digital and Intelligent SolutionArchitecture Innovation:

Developing IoT-integratedsolution frameworks based onindustrial networks integratedwith wired and wirelesstechnologies, unied datastandards, and industrial software.

Technology LeadershipInnovation:

Rooted in coretechnologies, deeplyexploring the underlyingprinciples across varioustechnical domains.

AI+ Innovation:

Utilizing AI for product healthmanagement, assisting customersin programming and design,intelligent product debugging, andsma Q&A of product knowledge—enabling intelligence of productand solution.

As a company that values technology, products, and solutions, INOVANCE places great emphasis onR&D innovation and considers technological innovation as the primary driving force for the company’sdevelopment. It is committed to continuously creating value for customers by providing innovativesolutions and services, helping them achieve business success. The company strictly adheres to scientificethical standards and follows prudent and robust principles in its R&D activities, strictly prohibiting anyresearch and business practices that infringe on individual rights or harm public interests.

Innovation is the driving force and booster for enterprise development. INOVANCE consistently upholdsindependent innovation, leveraging advanced technologies and industry experience to deliver moreintelligent, precise, and cutting-edge comprehensive products and solutions for customers. Meanwhile,as collaboration with customers and partners deepens, the Company places greater emphasis oninformation security and privacy protection to safeguard stakeholder data and privacy eectively.

Innovation Driven Development

Innovation Driven Development / 2024 SUSTAINABILITY REPORT

Stimulate Innovation Vitality

.? R&D Innovation StrategyR&D and innovation are key to maintaining competitive advantage and achieving sustainable development.The Company continues to maintain a high R&D investment ratio, ensuring strategic and annual planningthrough the DSTE process to guarantee strong investment and strategic direction for innovation. In 2024,the Company defined three major R&D innovation strategies and directions:Digital and intelligent solutionarchitecture innovation, technology leadership innovation, and AI+ innovation.

GB/T 18488Drive Motor System for Electric Vehicles

2024 Key Performance Indicators

R&D investment

Number of R&D personnel

%

% persons

R&D Investment as a percentage oftotal revenue

R&D personnel as a percentage of totalnumber of employees

5,538

8.50

22.65

National Standards Formulated by INOVANCE in 2024

.? Innovation Incentive MechanismsTo stimulate employee innovation and deepen the corporate culture of innovation, the Company hasestablished multiple internal innovation awards and recognizes outstanding individuals and experts. Forinnovative achievements that are not immediately recognized, the Company also has a retrospective innovationreward mechanism to ensure fair and accurate implementation of innovation incentives. In 2024, the Companyselected 21 company-level technical award recipients, including 8 for breakthroughs in key technologies, 1 foroutstanding technology/product platform, 2 for engineering capability platforms, 5 for outstanding patents,and 5 for outstanding product and solution projects.To better incentivize technological innovation and research, the Company separates technology developmentfrom product development, with independent investment, processes, and decision-making for technologydevelopment..? Open Innovation CooperationINOVANCE continuously tracks cutting-edge technologies and innovation research and actively collaborateswith customers, suppliers, partners, research institutes, and universities on innovation. In terms of innovationexchange, the Company holds innovation seminars and roundtables on an irregular basis, inviting academicand industry experts to explore emerging technology directions and trends. Senior R&D experts activelyparticipate in academic societies, industry associations, and university exchanges to gain insights into thelatest technologies and feed them into R&D planning to drive the application of innovations in products andservices. In terms of technology cooperation, the Company co-creates with core customers, and establishesjoint laboratories with suppliers, partners, and universities to carry out research on various topics. During therepoing period, the Company paicipated in the formulation of 1 national standard.

The Company actively integrates global resources and diverse innovative capabilities, leveraging regionaltechnical advantages. R&D centers are located in Shenzhen, Suzhou, Xi’an, Nanjing, Milan in Italy, and Stuttgain Germany, forming a globally complementa innovation network.

3,147millionRMB

New Products / Major Product Upgrades Released in 2024

The AI servo system integrates intelligent commissioning and diagnostic functionswith One Cable technology and maintenance-free design without batteries, solvingthe“black hole of time” in automation and ushering in a new era of intelligent high-end manufacturing. The intelligent commissioning function dramatically shortenssetup time by leveraging preset mechanical models, automatic learning of mechanicalcharacteristics, and one-click parameter tuning. The diagnostic function provides real-time health monitoring of key transmission components through intelligent shaft-end diagnostics and edge-layer analysis, oering early warnings before deterioration,reducing unplanned downtime, and supporting precision maintenance and holistichealth management.

AI Servo System with Intelligent Commissioning and Diagnosis Functions

InoCube FEMS Net-zero Intelligent Energy Management System

U8 Industrial Collaborative Robot

EC Series Integrated Motors

InoCube FEMS (Factory Energy Management System) is an intelligent energymanagement solution based on a“plug-and-play”design concept. Built on anintegrated cloud-edge-terminal architecture and deeply integrating automation withdigital technologies, the system provides real-time energy monitoring, efficiencyanalysis, load optimization, and carbon footprint management seices for industrialcustomers across generation, grid, load, storage, and carbon scenarios, supportingintelligent green manufacturing. Based on model-driven design, the system supposflexible deployment and modular expansion, which can help enterprises reduceenergy costs and improve production eciency. Fuhermore, InoCube FEMS can alsopredict energy demand, optimize equipment operation strategies, and suppo carbonmanagement and traceability, helping enterprises achieve the“dual carbon” goals.

The U8 series of industrial collaborative robots redenes productivity with cutting-edgemanufacturing DNA, opening a new dimension in human-machine collaboration.[Industrial-grade Reliability] Equipped with precision joints and long-lifespan corecomponents for continuous 24/7 high-intensity operation under micron-level accuracy,with adaptive collision detection ensuring zero downtime.[Exceptional Flexibility] Modular design enables exible deployment; combinations ofmulti-product operation islands quickly reshape production ecosystems.[Safe and Friendly] Certified with 25 functional safety standards, building a dual-protection system.

The EC Series integrated motors feature high eciency, energy-saving peormance,safety, reliability, adaptability, multifunctionality, low noise, and high protection levels.They are part of INOVANCE’s solutions to reduce energy consumption and enhancecentralized control efficiency in the livestock industry. Integrated with INOVANCE’sdigital platform and PLC products, the EC Series forms a leading environmental controlsystem solution for livestock farming, supporting the industry’s digital and scientifictransformation.

Innovation Driven Development / 2024 SUSTAINABILITY REPORT

Technologyresearch

Advance technology research and pre-research to track leading global technologies andaddress core technology gaps.Conduct forward-looking research on key components to maintain core competitiveness.Develop lightweight, miniaturized, and low-environmental-impact low-carbon greeninnovation technologies.Platformproductdevelopment

Develop high-peormance, highly reliable, and low-cost standardized platform products toprovide comprehensive product solutions to customers.Integrate digital and intelligent technologies to develop model-driven platform products.

Customizedproductdevelopment

Focus on customized product development to provide tailored innovation solutions forcustomers.Establish customer solution development and equipment competitiveness developmentprocesses, seamlessly integrating technology research, platform development, and solutiondevelopment throughout the entire cycle.

INOVANCE’s R&D achievements gained widespread recognition. Several products received prestigiousinternational design awards in 2024, such as the Red Dot Design Award and iF Design Award. Awardedproducts include:

High-performance IO

PLC educationand trainingplatform

IPT bus valveisland

IPV pilotvalve

All-electricinjectionmoldingmachine

Inoboxindustrialpersonalcomputer

Speed ReaderOCR intelligentcamera

High protection, durable androbust

An integrated industrial controleducation and training platform

Integrated pneumatic-electriccontroller

Detachable controller

High eciency, high quality, andlow energy consumptionControl injection moldingproduction line

Serial compact and exibleindustrial PC

AI-powered sma camera withplug-and-play functionality,purpose-designed for specicscenarios

Optimize R&D System

INOVANCE views its mission and vision for the R&D system as“empowering industrial scenarios with leadingAI/IoT technology”It builds a comprehensive innovation framework focusing on technology research, platformproduct development, and customized product development, adopting an IPD R&D model and guided by the

R&D Code of Conduct. This framework aligns with external environments, corporate strategy, customer needs,technology trends, and market competition..? R&D System

2024 Key Performance Indicators

New patent applicationsAs of December 31, 2024Valid patents6852,375

New copyrights registered

New patents granted

New trademarks approved

Number of invention patents applied to

core businesses

Protect Intellectual PropertyINOVANCE strictly complies with thePatent Law of the People’s Republic of China, theTrademark Law of the People’sRepublic of China, the Copyright Law of the People’s Republic of China, and other relevant laws and regulations.The Company has established an intellectual property management system comprising theIntellectual PropertyManagement Manual, theManagement Procedures for Risks of Intellectual Property, theManagement Procedures forResolution of Disputes on Intellectual Property, and the Incentive Procedures for Intellectual Property. The Companyestablished a Patent Committee and collaborates with IP and legal departments to systematically manageintellectual propey creation, protection, application, and management.During the reporting period, the Company formulated new systems including thePatent Management System,thePatent Rights Protection System, the Patent Risk Search System, and thePatent Application Systemto furtherstandardize internal patent management. These require patent layout for R&D projects and joint discussionsbetween patent engineers and R&D personnel to identify innovations, evaluate risks, and review proposals.The Company also prepares industry and peer patent analysis reports to raise IP awareness, encourages timelyreporting of research outcomes, and, through the Incentive Procedures for Intellectual Property, rewards patentapplications, authorizations, and implementations, boosting employee engagement in innovation and IPapplications. Subsidiaries Suzhou INOVANCE and INOVANCE Automotive have obtained third-pay ceicationfor theEnterprise Intellectual Property Management(GB/T 29490-2013) and received intellectual propertymanagement system ceication.The Company respects and protects the intellectual property rights of others and has established internalIP management systems to ensure legal compliance. The Company respects industry norms and conductsintellectual property searches and due diligence prior to product development, procurement, financing, andoverseas market expansion to mitigate infringement risks. In addition, the Company actively engages in patentand trademark enforcement to combat counterfeiting and infringement in the market. During the reportingperiod, the Company did not face any penalties from regulato authorities for violating intellectual propey lawsand regulations.The Company promotes intellectual propey awareness in daily operations through regular IP-related training tocontinuously enhance employees’ awareness of IP protection.

Innovation Driven Development / 2024 SUSTAINABILITY REPORT

“Three Boundaries”:

Refer tothe network boundary, physicalboundary, and terminal boundary.All outbound information within thenetwork boundary must undergocompliance review, and core internalsecrets are strictly protected. Within thephysical boundary, the entry and exitof storage media are strictly controlledto prevent major information leakageincidents. The endpoint boundaryis divided into internal and externalendpoints; external endpoints, afterlegal and regulatory review, need tobe uniformly managed within thedomain when connected to the

The Company follows the“Three Boundaries, Two Channels” framework to secure control of INOVANCE’sinformation assets, balancing security eciency and seice eectiveness.

Information Security ObjectivesProgressStatusNo major information security incidentsNo major information security incidents occurredAchieved

company’s network, and information assets within internal endpoints must notleave the company’s endpoints without permission.

“Two Channels”:

Refer to the Company’s application and compliancechannels for information transmission, which manage internal confidentialdata and ensure secure document transmission.

INOVANCE Information Security Control Framework

Endpoint boundaPhysical boundaNetwork bounda

Three Boundaries

Two ChannelsCompliant and controlledinformation

Compliant and controlledinformationApplication channele-transmission channel

INOVANCEInformationAssets

“Enhancing awareness, strengthening measures, preventing risks, and securing business”is thecompany’s information security management policy. Information security training and dissemination areimportant means to enhance company-wide awareness of information security. The Company strictlycomplies with the Data Security Law of the People’s Republic of China, theNetwork Security Law of the People’sRepublic of China, thePersonal Information Protection Law of the People’s Republic of China, theEuropean Union’sGeneral Data Protection Regulation(GDPR), and other applicable laws and regulations in its operatinglocations and those of its partners. We prudently fulfill our responsibilities and obligations for datasecurity and privacy protection, collecting and using stakeholder information based on the principles oflegality, legitimacy, and necessity.

Data Privacy Protection

Information Security Management.? Information Security Strategy Objectives

INOVANCE and its subsidiaries adhere to the principle of“one network, one security strategy, protectingcustomer trade secrets.”Based on the information security management principles such as clientinteroperability, server-side access, and differing regional client and server access, the Company sets thebaseline goal of avoiding significant information security incidents. It continuously builds and enhances theinformation security management system based on ISO/IEC 27001?2013.

.? Information Security Management Structure

INOVANCE has established a four-tier information security organizational structure internally. Business heads arethe primary responsible persons for business information security. They are accountable for managing informationsecurity assets during operations. Information security indicators are included in executive peormance assessments.The Information Security Department is responsible for planning the information security control system andconducting audits. The IT Security Department is tasked with implementing and maintaining the Company’sinformation security system. Peormance indicators such as timely resolution rate of security risks and timely closurerate of major security incidents are incorporated into depamental KPIs. All depaments jointly build the informationsecurity system and ensure daily operations comply with legal and regulato requirements..? Information Security Management SystemThe Company has established a strict data privacy protection system and data collection statements/consent policies.Relevant regulations include the Information Security Incident Management Regulations, thePrivacy Policy, theInformationAsset Transmission Regulation, theInformation Security Reward and Punishment Regulations, and theInformation SecurityViolation Cases and Penalties. These are reviewed annually and revised as needed based on applicable laws andregulations, indust insights, and incident response experience.During the reporting period, the Company reviewed and revised four policies: theInformation Security AwarenessCultivation Policy, the Information Security Resignation Audit Policy, theInformation Security Reward and PunishmentRegulations, and the Trade Secret Protection Policy. Domestically, thePersonal Information Protection Management Policycovers all employees and suppliers within China. Internationally, the Company implements GDPR-aligned practices atits overseas operations.

.? Information Security Risk ManagementThe Company annually updates the inventory of confidential business information assets. The Information SecurityDepartment reviews the protection plans for various scenarios, checking for vulnerabilities and whether the plansaddress emerging threats. Information assets are classified into four levels—“Confidential,”

“Secret,”

“InternalUse,”and“Public”—based on file sensitivity, retention period, and transmission requirements. Departments owninginformation assets must regularly review the classification levels, and reevaluate the classification when thecondentiality period expires.

.? Information Security Emergency Response Management

The Company manages information security incidents based on theInformation Security Incident ManagementRegulations, conducting source tracing, evidence preseation, and fact clarication. We respond promptly and legallyto incidents until proper resolution is achieved. In 2023, the Company set a target of identifying and resolving securityincidents within 21 days of occurrence. During the repoing period, the average incident identication time was 13.1days, a 30% improvement over the target..? Information Security AuditThe Company conducts routine information security audits monthly and issues corresponding audit reports.Information security audits during the reporting period covered all key operating sites except EST and INOVANCEAutomotive. The Company has strengthened its information security resignation audit this year, covering all resignedemployees except for production line employees and employees in some subsidia companies.

.? Information Security TrainingAnnual company-wide information security training is conducted. INOVANCE’s information security training systemconsists of new employee orientation training, regular information security exams, and routine specialized training forinformation security ocers in various business depaments. During the repoing period, one information security andlegal exam was administered to all employees, achieving a 100% pass rate. Additionally, 21 information security trainingsessions were held.

Innovation Driven Development / 2024 SUSTAINABILITY REPORT

IT Security ObjectivesProgressStatusNo major IT security incidentsNo major IT security incidents AchievedTotal system unplanned downtime ≤ 23.11 hoursTotal system unplanned downtime ≤ 18.33 hoursAchieved

IT Safety.? Security Strategy ObjectivesThe Company aims to prevent major IT security incidents and ensure system availability and business continuity. Wecontinue to strengthen a“zero trust”IT security framework, enabling trusted control over endpoints, network access,applications, and data.

.? IT Security Management StructureInternally, the company has established a clearly defined IT security management structure. The ExecutiveManagement Team (EMT) approves the Company’s IT security policies, management strategies, and performanceindicators. The Process Data and IT Department is responsible for corporate IT development, maintenance, andsecurity. The IT security department is responsible for the construction and maintenance of IT security, includingenforcing IT security policies, access control, network security, and security audits.

.? IT Security Management SystemThe Company established its information security management system in accordance with ISO/IEC 27001?2013and has issued policies such as theIT Service Continuity Management Regulationsand the IT Service Continuity Plantocomprehensively protect IT security. The IT security depament conducts monthly vulnerability scans of all Companyseers to detect potential security risks and ensure reliable system operation. The Company transforms the latest ITsecurity insights into internal security baselines, improves the vulnerability management mechanism, monitors dailysecurity issues, and organizes regular attack-defense drills..? Emergency Response and O?ensive and Defensive DrillsIT incidents (including IT security incidents) are classified based on the number of affected individuals and the typeof business involved. Incidents are categorized into four levels based on urgency, scope, severity, and potentialconsequences: Level I (Highest), Level II (High), Level III (Medium), and Level IV (Low). In 2024, the Company added twoemergency response plans: TheCloud System DDoS Attack Emergency Planand theDomain Hijacking Attack Emergency Plan.To enhance the Company’s practical offensive and defensive capabilities, improve the capacity to identify securitythreats, trace their sources, and respond to emergencies, five offensive and defensive drills were conducted in 2024,uncovering 326 vulnerabilities with a timely x rate of 90.5%.In 2024, the Company conducted one IT business continuity test covering key systems to ensure that the relevantarchitecture eectively meets the requirements of RTO and RPO.

.? IT Security AuditsThe IT Security Depament conducts annual internal audits to ensure group-wide compliance with security baselines. In2024, the Company passed the AEO Advanced Ceication audit by the Customs Authority, which included assessmentsof business continuity, cybersecurity, data centers, business systems, and IT security. Third-party information securityrating agency BitSight evaluated the security of the Company’s external systems and internal endpoints. The averagedaily score in 2024 was 774 out of 850, placing the Company at a leading level within the indust. During the repoingperiod, two subsidiaries obtained ISO 27001 ceication, an increase of one compared to the previous year.

Key Performance in 2024 (as of December 31, 2024)Total number ofemployees

Propoion of femaleemployees

Propoion of femalemanagement26,518 25.41%15.75%

persons

.? Employee Diversity

INOVANCE adheres to the cultural values of equality and diversity. With the advancement of our internationalizationstrategy, we have gradually established employee teams and hired local talent in dierent operational regions.As of the end of the reporting period, the Company employed 26,518 people from over 10 countries andregions, including 444 foreign employees.The Company places great emphasis on protecting the legal rights of female employees and is committed tosupporting their career development. As of the end of the reporting period, female employees accounted for

25.41% of the workforce, and women held 15.75% of management positions.

INOVANCE recognizes that employees are the company’s most valuable asset. The Company upholdsthe core value of“contributor oriented,”striving to foster a people-centered cultural systemthat protects employee rights, enhances well-being, and promotes a diverse, equal, inclusive, andtrustwohy workplace. We strengthenoccupational healthand safety management, ensure a safe workingenvironment, focus on talent development, open up advancement pathways to grow with our employees,and cultivate top talent for the indust.

Employee Development Guarantee

Employee Rights and Welfare ProtectionEqual and Inclusive WorkplaceINOVANCE advocates for diversity, equity, and inclusion, and is committed to treating all employees equally—regardless of gender, ethnicity, nationality, culture, religious belief, political affiliation, skin color, sexualorientation, age, social status, disability, or any other personal characteristic—across all stages of employment,including recruitment, compensation, training, promotion, and termination. We believe that a diverse culturalbackground can stimulate team creativity. We will continue to improve our employee diversity platform tofoster equal communication and collaborative innovation among all employees.

Employee Development Guarantee / 2024 SUSTAINABILITY REPORT

Note：

The propoion of female employees and female management only involves domestic employees and does not cover overseasemployees.

Since the second half of 2024, INOVANCE has created positions suitable for peoplewith disabilities at Yueyang INOVANCE, including administrative roles and simplemanual production roles, supporting the employment and placement of workerswith disabilities in the local area. The Company plans to expand this employmentsupport initiative for persons with disabilities to other production bases acrossChina, including Xi’an, Nanjing, and Jinan.Proactively Ful?lling SocialResponsibility for Employment

of People with Disabilities

.? Equal and Inclusive Work Environment

INOVANCE has issued theBusiness Conduct Guideline, theAnti-Discrimination and Harassment Procedure, andtheGuidelines for Prevention and Control of Sexual Harassment in Workplaceto regulate employee behavior andcontinuously promote the development of an inclusive and equitable work environment. We encourageemployees from diverse backgrounds to engage in active communication. On the basis of mutual respect andunderstanding of dierent cultures, we promote team integration and enhance cohesion.

Employee Interests ProtectionINOVANCE strictly adheres to the Labor Law of the People’s Republic of China, theLabor Contract Law of the People’sRepublic of Chinaand other legal regulations, as well as the laws and regulations of the countries and regionswhere it operates, establishing a comprehensive system to protect employee rights and genuinely safeguardingemployee interests. Based on the Company’s standardized system, some subsidiaries have formulated specicemployee rights protection policies in accordance with local conditions.In 2024, the Company conducted internal audits covering employee rights at selected operational sites andfound no high-risk issues related to human rights..? Equal Employment and Freedom of OccupationDuring recruitment, the Company adheres to the principles of fairness, impaiality, and openness. Recruitmentis carried out in an orderly manner in accordance with the Employee Recruitment Management Systemand the

Labor Contract Management Measures. Candidates are evaluated based on competence, skills, and adaptability toensure the most suitable talents are hired, and employment discrimination is eliminated. The Company respectsemployees’freedom to choose employment, is committed to publishing objective and truthful job postings,does not restrict employees from engaging in specific jobs or work against their will, and supports employeesin pursuing their career development. No illegal or non-compliant employment incidents occurred during therepoing period..? Prohibition of Child Labor and Forced LaborIn accordance with theBusiness Conduct Guideline, we are firmly committed to prohibiting the employment orsupport of child labor under any circumstances. During recruitment, we verify the authenticity of candidateinformation through background checks and official identification documents. Additionally, the Companyhas developed aChild Labor Remediation Flowchart. If an incident of inadvertent child labor employment isdiscovered, we will promptly take remedial measures such as providing appropriate medical treatment andcompensation, encouraging the child to continue compulso education, or arranging their return to their placeof origin, depending on their physical condition and education level.We respect human rights and employee freedoms, including freedom of career choice, freedom of employmentand resignation, voluntary overtime, and freedom of movement. We prohibit all forms of modern slavery or humantracking, including forced labor, bonded labor, indentured seitude, and involunta prison labor. We also prohibit anyactions that restrict labor freedom, such as withholding wages, benets, propey, or personal identication documents.During the repoing period, there were no incidents related to employing child labor or forced labor.

Self-actualization

Esteem

needsBelonging

needs

Safety

needs

Basic

needs

Social welfareactivitiesOoarding care

Cultural integration eventsHealth and safety facilitiesStatuto benetsOverseas allowancesAdditional allowancesEmployee Assistance Program (EAP)Supplemental commercial insurance

Democratic communicationRecreational activities

Festive CareRecognition ofemployee value

Career development

activities

Long-term incentives

Employee Development Guarantee / 2024 SUSTAINABILITY REPORT

Employee Welfare and Care

We firmly believe that caring for employees is caringfor the future of the Company. The Company providescomprehensive and diverse employee benets and careprograms. Various initiatives are in place to supportemployees’physical and mental well-being, promotework-life balance, enhance their sense of security,fulfillment, and happiness, and strengthen teamcohesion and a sense of belonging.The Company has developed a five-level employeewelfare and care system addressing basic, safety,belonging, respect, and self-actualization needs.Benefits exceeding statutory standards includeadditional coverage for critical illness, accident, and lifeinsurance, a compassion fund assistance mechanism,and targeted benefits for special groups such asemployees with illnesses, female employees, those inhardship, and overseas employees.

.? Compensation, Working Hours, and HolidaysThe Company strictly complies with wage and compensation laws applicable in its operating locations andadheres to the principle of equal pay. In accordance with theManagement Procedures for Social Responsibility andOccupational Ethics, the Company provides compensation that meets legal or indust minimum wage standardsand has implemented a series of compensation policies, including theSala Management System, to standardizecompensation management.In terms of working hours and leave management, the Company strictly follows applicable legal and industryrequirements and has formulated theAttendance Management Measuresand theManagement Procedures for SocialResponsibility and Occupational Ethics. Working hours are recorded, overtime pay is issued in accordance with legalrequirements, and reasonable rest and leave entitlements are ensured. We offer paid annual leave that exceedsnational policy requirements, as well as legally compliant maternity checkup leave, maternity leave, breastfeedingleave, and additional local leave types such as marriage leave, bereavement leave, and paternity leave..? Anti-Discrimination and Anti-Harassment

The Company prohibits all forms of discrimination and harassment and is committed to providing equalopportunities and fair treatment to employees of all races, cultural backgrounds, religions, genders, ages,and physical conditions. The Company has established thePrevention and Management Standards for WorkplaceSexual Harassment and the Anti-Discrimination and Harassment Procedure, suppoed by relevant mechanisms, andmaintains a zero-tolerance policy for workplace harassment..? Collective Bargaining and Freedom of AssociationThe Company respects employees’ legal rights and is committed to safeguarding employees’legal rights to freedomof association, unionization, and participation in collective bargaining. We continue to strengthen the workers’

representative congress system and labor union structures, enhance democratic corporate governance, and fosterharmonious labor relations. All full-time employees under labor contracts may paicipate in collective bargaining tojointly review policies concerning compensation, working hours and leave,occupational healthand safety, employeebenefits, and training. As of the end of the reporting period, theCollective ContractandWage Collective NegotiationAgreement covered 84.74% of employees.

“Floral Charm, Skillful Hands” Women’s Day oral workshop

EmployeeGroup

Bene?ts and Care MeasuresProgress in 2024Femaleemployees

Established“Mom Stations” (mother and baby rooms)One-hour daily breastfeeding leave for female employees during nursingperiodSet up holidays for female employeesLaunched special activities for Women’s Day

Six new“Mom Stations”were established atCompany locationsHeld International Women’s Day oral workshopevents such as“Floral Charm, Skillful Hands”Prepared customized gifts for female employeeson Women’s DayEmployeesin diculty

Established a charity fund for employees in dicultyCreated a family hardship assistance mechanism oering interest-freeloans for emergencies

Provided compassion fund suppo to sevenemployees totaling RMB 423,862.82Employeesworkingoverseas

Produced a global cross-border ent and exit handbook for overseascultural guidanceImproved employee overseas assignment processes and developed aglobal mobility systemEstablished a comprehensive overseas employee insurance mechanismfor safety and health protection

Purchased overseas travel insurance for 398employees

EAP Implementation in 2024

“A Hundred EAP Ambassadors” Program

Individual Psychological Counseling:

374 total hours provided to 84 employees.Employee Care and Support:

Continued follow-up for 73 employees dealing with long-term illness or severe conditions, with 53 casesconcluded and 20 ongoing as of the end of the repoing period.Group Counseling Sessions:

8 sessions were conducted, reaching over 900 employees; 36 mental health aicles published with over 44,000views.

In 2024, the Company launched the“100 EAP Ambassadors”program, selecting and training 100 outstanding employees to see asEAP ambassadors responsible for care actions. During the repoing period, EAP ambassadors handled 271 cases involving employeerelations suppo and prevention, including ten crisis inteentions. The program achieved a 93% case handling rate. At the end of 2024, veambassadors were recognized as“Outstanding Ambassadors”.The program received positive feedback internally and externally, with Suzhou INOVANCE recognized as a“Professional Third-PayMediation Organization of Suzhou”

.? Employee Assistance Program (EAP)

The Company places strong emphasis on mental health. Since 2023, the Employee Assistance Program (EAP)has been in place. Various activities were conducted to raise awareness and promote healthy mindsets. AnEAP counseling room was established at Suzhou INOVANCE. A column called“HUI XIN QING”was createdon the internal platform to share stress-relief tips. On-site counseling seices are oered regularly to providecomprehensive mental health suppo and help employees alleviate stress eectively.

.? Customized Employee Bene?ts and Care Programs

INOVANCE Family Day 2024

Employee Development Guarantee / 2024 SUSTAINABILITY REPORT

Employee Communication and FeedbackThe Company values employee satisfaction, happiness, and engagement. To foster a diverse, equitable, andinclusive workplace, we maintain multiple communication channels and mechanisms, including workers’

representative congresses, a whistleblower mechanism, employee satisfaction sueys, the internal“INOVANCECircle”forum, the“HR Help Me” mailbox, and the President’s Mailbox. We actively listen to employeeconcerns and provide timely feedback and solutions to ensure issues are eectively resolved.

.? Balancing Work and LifeThe Company promotes people-oriented management,encourages work-life balance, and supports employeesin participating in activities based on their interests. TheCompany has established 29 interest-based clubs coveringbasketball, swimming, dancing, etc., and regularly organizesoutdoor activities, spos meets, and family days to enhanceemployees’physical fitness, enrich their spare time, andimprove their well-being and sense of belonging. Libraries,lounges, and a variety of fitness facilities have been set upat key sites to support employee relaxation and recreation.A one-stop employee service platform provides integratedadministrative, HR, fixed asset, and IT services. In 2024, 5sites launched new one-stop seice desks.More than 1,000 employees paicipated in the Company’s2024 Sports Meeting, and over 500 participated in bothmarathon and family day events.

.? Workers’ Congress and Trade Union

The Company has established a Workers’Representative Congress system and has set up trade unionorganizations in accordance with legal provisions. These bodies fully play their role in democratic decision-making, management, and supervision to ensure all employees’rights to be informed, to participate, toexpress themselves, and to supervise. They also promote the institutionalization, standardization, andproceduralization of the Company’s democratic management. As of the end of the reporting period, all majorCompany entities had established labor unions, with 88.72% of employee paicipation rate..? Whistleblower MechanismA year-round whistleblower mechanism is in place. Employees can submit suggestions or feedback regardingthe work environment and business management through the platform. The business department will submitthe reviewed proposals to the higher-level department. Validated proposals are implemented internally, andthe proposers are rewarded accordingly..? President’s MailboxThe President’s Mailbox provides an upward communication channel for all employees. It enables monitoringof managers at all levels and helps resolve real issues faced by employees. The mailbox also accepts repos ofmisconduct that violate the value of“Customer First.” In 2024, the President’s Mailbox received 91 letters.

The Company promotes the“Three-Year Fresh Graduate”plan to cultivate key business talent through targeted, customizedwork arrangements. In 2024, the program focused on goal setting and high-standard process management, encouraginggraduates to stay motivated through resource suppo, competitions, and knowledge sharing.The Company implements a“One Axis, Four Lines” expe care framework—time as the main axis, suppoed by integrationand value creation lines, along with motivation and development lines—to maximize expe contributions.A targeted care mechanism is in place for employees in critical roles, coordinated by HR, depament heads, and secretaries,to identify needs and follow through on actions.

A mentoring program is in place to help new hires integrate quickly and master their roles.

Talent Attraction and Retention

CampusRecruitment

SocialRecruitment

Production Line

Recruitment

The Company partners with universities to co-establish“INOVANCE Classes,”joint laboratories, and provideapplication-based teaching scenarios in the industrial automation control field, sharing best practices to helpstudents better understand the application of industrial automation products. During recruitment seasons, we engagein close collaboration with schools through the approach of“sending teaching to the door”on career developmentand indust insights to enhance our attractiveness to graduates.For high-level talent, the Company follows a“careers attract people”strategy. We believe in the value and potentialof talent and are committed to providing an environment full of opportunities and challenges, allowing outstandingtalents to fully utilize the Company’s platform to exe their abilities and achieve their career aspirations.This includes both campus and social recruitment. In campus recruitment, we work with vocational schools on order-based training programs that integrate job-relevant courses and oer career guidance. For social recruitment, we usemultiple channels, including traditional online recruitment as well as emerging media platforms. The use of diverserecruitment channels enables us to reach a broader talent pool and attract suitable candidates.

Graduates

ExpesKey Role Talent

New Hires (Social Recruitment)

Talent Attraction and RecruitmentThe Company has established a diversified talent recruitment system to attract and select outstanding talentthrough a wide range of channels. During the repoing period, theEmployee Recruitment Management Policywasfuher optimized to expand recruitment channels, simplify and rene processes, and enhance talent selectioncriteria, in response to evolving business needs and market conditions.Recruitment is categorized into three types: campus recruitment, social recruitment, and production line recruitment.

Talent Retention and MotivationThe company places a high priority on talent reserves and building talent echelons, offering targeted retentionmeasures for dierent categories of talent, continuously optimizing the cadre care mechanism, and has constructeda“contributor oriented”compensation system and incentive mechanism. Additionally, it conducts human resourcedigital transformation in a“digitized” manner to enhance the management eciency of the talent system..? Talent Retention System

The company has established a retention system covering fresh graduates, socially recruited personnel,expes, and key position talents.

Equity IncentivesThe Company continues to launch equity incentive plans,creating a mechanism for employees to share interestswith the Company and motivate management teams,outstanding staff, and key talents. In 2024, the Companylaunched its seventh equity incentive plan, granting 283,000Class II restricted shares to 14 employees and 30,892,200stock options to 1,146 employees. New incentive recipientswere primarily middle management and core technicalor business personnel. They accounted for 4.37% of totalemployees. As of the end of the reporting period, 3 equityincentive plans and 2 long-term incentive mechanisms werein effect, covering a total of 1,398 employees, or 5.27% ofthe workforce. Among all recipients, 99.07% were generalemployees.

Benchmarking and RecognitionAnnually, the Company conducts recognition eventsto provide bonuses and honors to outstandingemployees. In 2024, 26 teams received theCompany-level“Outstanding Team Award,”

and 100 employees received the“OutstandingEmployee Award.”In addition, various depamentsand subsidiaries have also launched their ownrecognition and incentive programs.

Standard Allowance ItemsThese include living subsidies,special post allowances, skillallowances, expatriate allowances,and contribution-based rewardssuch as mentor fees, talent referralbonuses, and lecturer fees.

Performance BonusThe Company’s compensation structuredistinguishes between base salary andperformance bonuses. While ensuringemployees’basic income, performancebonuses serve to incentivize improvedwork peormance.

INOVANCE Talent Pipeline

Propoion of expe-level talentPropoion of senior talent

0.5%14.5%Propoion of mid-level talentPropoion of junior talent

50%35%

Employee Development Guarantee / 2024 SUSTAINABILITY REPORT

.? Employee Compensation and Incentives

INOVANCE upholds the core value of“contributor oriented”and the principles of fairness and equity. Ourcompensation system includes base salary, allowances, bonuses, long-term incentives, and statutory benefits.Relevant policies include theSalary Management Policy, theYear-End Bonus Management Policy, and theProjectBonus Management Measures. In addition, the Company issued theOverseas Subsidia Compensation ManagementPolicyduring the reporting period to standardize overseas employee compensation and support globalbusiness expansion.The Company applies job grading and performance evaluation mechanisms to review employee grades andcompensation based on job grading, role matching, and external competitiveness. We favor high performers,oppose mediocrity, and are committed to offering competitive compensation and benefits to continuallyenergize and inspire our workforce..? Talent Incentive Programs

Employee Training and Development

Curriculum PolicyOptimization

Lecturer PolicyOptimizationLearning PlatformGovernanceOptimization

Updated provisions and refined standards to steer training objectives and ensurequality control. Measures include classifying courses and defining certificationstandards based on three to five year future needs, using scientific course coding,and improving course invento, management and retrieval.Detailed lecturer sourcing, training, and certification processes, establishedusage logic, structure and rules, defined exit criteria, and standardized lecturercompensation.Clarified departmental responsibilities in platform construction and upgradedadministrator duties across all platform levels based on actual use cases.

Amount of Employee Training HoursAverage Training Hours per Employee719,255.9027.12hourshours/personEmployee training coverage rate100%

Employee Training SystemINOVANCE places great emphasis on talent development and has established a training system tailored toemployees of different levels and categories. Through a mix of online courses, themed workshops, and offlinetraining camps, the Company provides abundant learning resources aimed at enhancing leadership amongmanagers, professionalism and technical capabilities among employees, and business collaboration skills acrossthe ecosystem, ensuring employees are well-equipped with the knowledge and skills required for their roles.The Company has formulated the Employee Training Management Procedure, theNew Employee Training OperationRegulations, theOutsourced Training Management System, and the Course Management Systemto ensure thestandardized and eective operation of the employee training system.The Company has built a learning and development platform centered around“INOVANCE Academy,”

oering high-quality training programs and courses, nuuring excellent internal instructors, and consolidatingorganizational knowledge to provide employees with professional and high-value learning resources that meettheir development needs.In 2024, the Company optimized the training system in three main areas:

TrainingCategories

Training ProgramTarget ParticipantsMain Content

New employeetraining

NPT Program (New Power Training Camp)Campus-recruited fresh graduates

Focuses on cultural integrationthrough various learning formatsto help new hires understandCompany values and norms,improving their sense of belonging.Mentor training is also emphasizedto suppo new hires in integratingmore eectively.NET Program (New Energy Training Camp)New hires from social recruitmentNTT Program (New Talent Tutor Camp)New employee mentors

Managementtraining

RMT Program (Rising Manager TrainingCamp)

Succession managers of various systemsBased on the four capabilities and“three do’s and three builds”

prole for INOVANCE leaders,a training system from reseemanagers to senior managerswas established to strengthenleadership skills across allmanagement levels.

NMT Program(New Manager Training Camp)

Newly promoted managersMMT Program (Middle Manager Training Camp)

Directors and senior managersTMT Program(Top Management Training Camp)

Assistant director-level and above

managers and level ve expes

Professionaltalent training

ART Program (Account Responsibility Training Camp)

Employees involved in sales

Job qualication maps weredeveloped for key positions,focusing on business pain pointsand sharing INOVANCE’s bestpractices. Specialized trainingprograms target functionslike marketing, R&D, digitaltransformation, solution delive,and project management.

GPMT Program (General AutomationProject Management)

Employees in project managementRPT Program (R&D Project Manager Camp)

R&D project management personnelBVT Program(Business Vanguard Training Camp)

Core operational talents from Heavyweight

TeamsCPT Program (Chief Product OcerSpecial Training Camp)

Employees in product managementSRT Program (Solution Representative Training Camp)

Employees in solution deliveITT Program(International Talent Training Camp)

Business and management sta from

global operational sitesPCMT Program (Procurement CategoManager Training Camp)

Employees in procurementCST Program (Customer Seice Training Camp)

Technical seice engineersCRT Program(Channel Responsibility Training Camp)

Employees in channel management

Technical talenttraining

NFT Program (New Force Special Training Camp)

Some campus recruits

Technical knowledge and skillstraining was provided to familiarizeemployees with INOVANCE’smain products and technologies,improving their practicalapplication capabilities.

Market Intermediate Technical TrainingProgram

Marketing employeesCreation Camp ProjectInterns at Marketing PositionsProduct Technical Enablement ProgramEmployees working on solutionsDigital-OT Integration Camp

Employees in digital and solution-related

roles

Ecosystem talenttraining

OMT Program(Outstanding Manager Training Camp)

Mid- and senior-level managers from

INOVANCE’s customers

In alignment with strategic andbusiness development goals, theCompany consolidated and sharedadvanced managerial insights andmethodologies with ecosystempaners to jointly build talent andachieve win-win development.

ECPT Program (Excellent Chief ProductOcer Special Training Camp)

Product managers from INOVANCE’s

ecosystem companiesIET Program (Ecosystem TechnicalCapability Empowerment Camp)

Technical sta from ecosystem panersCustomer-customized Training Programs

Technical personnel of INOVANCE’s

customersIAT Program (INOVANCE AutomotiveAfter-sales Training)

Technical sta from authorized seice

stations

Employee Development Guarantee / 2024 SUSTAINABILITY REPORT.? INOVANCE’s Technology Training System

NFT Program (New Force Special Training Camp)

BVT Program (Business Vanguard Training Camp)Targeted at key roles in business operations, such as marketing, development, and account representatives, thisprogram focused on business outcomes and operational awareness. Through empowerment seminars and practicalworkshops, trainees were guided to clarify roles, understand IPD processes, and strengthen end-to-end businessawareness. In 2024, the program trained 81 core business representatives with a total of 21 training hours.

The NFT Program, focused on technical application, trained 372 campus recruits in 11 classes during 2024,delivering 1,026 hours of technical and hands-on training. The program helped new graduates quickly understandINOVANCE’s core products and technologies, strengthening their practical skills and integration into businessoperations.

RMT Program (Rising Manager Training Camp)The Company launched the RMT Program (Rising Manager Training Camp) to train future leaders across businesslines, integrating management theories with real-world business scenarios. The program adopts a credit systemfor quantitative assessment, quantitatively evaluating the classroom performance of trainees and the timelinessand quality of their completion of learning tasks. In 2024, four special classes were launched, with 199 traineescompleting 112.25 total hours of offline training. All four classes successfully concluded by the end of therepoing period.

.? Specialized Training Program Case

Post-training Evaluation

It was divided into course satisfaction and operational satisfaction, assessed by participants. Course satisfactioncovered content, presentation, and knowledge application; operational satisfaction covered preparation, classmanagement, and suppo seices. Program teams reviewed feedback for continuous improvement.

Post-completion EvaluationIt was conducted by program sponsors and business stakeholders via interviews and surveys. The feedback wasincorporated into peormance evaluations.

.? Training Satisfaction EvaluationINOVANCE Academy conducted evaluations and satisfaction surveys after each training camp and programcompletion.

.? Online Learning Platform ConstructionTo support flexible, self-directed learning, the Company launched an online learning platform for knowledgeaccumulation and sharing. As of the end of the repoing period: 25,987 active user accounts, 439,089.57 totallearning hours, 10,344 cumulative courses, and 9,446 new learning programs published in 2024.

“Ocean Flow Plan”To encourage internal mobility and nurture well-rounded, high-caliber talent in support of evolving business needs,the Company launched the“Ocean Flow Plan” in 2024.The Company irregularly posts internal transfer opportunities and offers an“I Want to Apply”platform. Employeesmeeting basic criteria such as tenure and performance can apply, submit resumes, and inquire about openings. Theinternal transfer process mirrors external recruitment, and employee privacy is strictly protected throughout. Once anemployee passes the inteiew, the original depament is not allowed to block the transfer.In 2024, over 100 employees successfully completed internal transfers through the“Ocean Flow Plan.”

Employee Development Guarantee / 2024 SUSTAINABILITY REPORT

Employee Promotion and DevelopmentAs part of the employee promotion and development system, the Company has established a comprehensivecareer development pathway based on job categories, covering four main career tracks: management,professional, project management, and skilled talent. Policies such as theQualification Management SystemandtheManagement Regulations for Work License Implementationsee as promotion frameworks and ensure fairnessin career progression.Each year, capability certifications are conducted based on qualification standards to identify talent potential,ensuring optimal role t, and enabling internal mobility that maximizes organizational agility.

.? Internal Instructor DevelopmentExcellent instructors and high-quality courses are the soul of INOVANCE Academy and key to the successof the training system. The Company continuously improves itsLecturer Management Systemto supporttalent development aligned with current and future scenarios. 2024, efforts focused on achieving balance ininstructor selection and developing a professional internal lecturer training system.Instructor selection emphasized matching teaching content with practical needs, adhering to the principle of“assign to validate, validate to assign,” enhancing training eectiveness.In terms of the construction of a professional lecturer training system, the Company carefully plans internaltrainer programs based on the training needs of each system’s lecturers and the annual demand for lecturersat INOVANCE Academy, combined with lecturer poraits and ability models, including 12 classes with traineesat the beginner, intermediate and advanced levels, and has trained 335 lecturers at different levels. Fourinstructors were awarded the“Gold Lecturer” title and proled to foster a strong learning culture.

.? Employee Performance Evaluation

The Company continues to optimize theIndividualPerformance Evaluation Procedureand related systems,conducting periodic peormance reviews in accordancewith the full process of“goal setting – performancecoaching – peormance appraisal – peormance reviewdiscussion – appeal process – application and filingof performance results.”Performance results serveas an important basis for employee promotion andcompensation adjustment. During the reporting period,100% of the company’s employees underwent regularpeormance and career development evaluations.

.? Supporting Employee DevelopmentThe Company provides academic advancementsuppo for skilled workers who have seed for morethan three months. For employees who successfullycomplete the academic advancement program andobtain a diploma, the Company reimburses 100% ofthe tuition fees. This program covers both associateand bachelor’s degrees. In 2024, Suzhou INOVANCEpanered with local vocational colleges to launch anacademic advancement program, supporting a totalof 89 employees during the year.

Annual Key Performance

Occupational DiseaseIncident

Occupational Healthcheck-ups Coverage

Employee signing rate of theSafety Responsibility Agreement100%100%

TargetProgressStatusZero major safety accidentNo major safety incidentsAchievedZero environmental incidentNo environmental accidentsAchievedZero penaltyNo regulato penaltiesAchievedZero occupational diseaseNo occupational disease incidentsAchieved

INOVANCE has established“zero major safety incidents, zero occupational disease cases, zeroenvironmental accidents, and zero regulatory penalties”as long-term objectives. We are committedto building a robustoccupational healthand safety management system that covers all employees andpartners, strengthens safety risk management and safety culture, and promotes the prevention andawareness of occupational diseases to safeguard employee health and safety.

Occupational Health and Safety

Safety Production

Strengthening the Safety Management SystemINOVANCE strictly complies with theWork Safety Law of the People’s Republic of China, theLaw of the People’sRepublic of China on Prevention and Control of Occupational Diseases, theRegulations on Work Safety AccidentReporting and Investigation, and theWork Safety Standardization Evaluation Methods for Enterprises, as well asrelevant laws and regulations in its operating locations. The Company has established systems such as theEHS“Three simultaneous” Management System of Construction Projects, theManagement Measures for Safety PerformanceAssessment, and theEHS Rewards and Penalties Management Procedures, and continues to improve its occupationalhealth and safety management system. The system covers all business units, subsidiaries, employment types,and paners..? Occupational Safety Management StructureDuring the reporting year, the Company strengthened its organizational support for occupational safety, withthe management team responsible for the overall management and supervision of occupational safety. Safetymatters are decided at EMT meetings. The Safety Production Committee suppos the implementation of safetytechnical measures, occupational disease prevention and monitoring plans, as well as safety inspections andsupervision. In the reporting year, the Company held two EMT safety meetings to review and improve threeoccupational safety management system documents. The Environment, Health and Safety (EHS) Departmentis responsible for advancing specific EHS management tasks, with EHS officers stationed at key plants andsubsidiaries to communicate and implement corporate EHS requirements.

Incident

Key EHS Management SystemsEHS “Three Simultaneous” Management System of Construction ProjectsOccupational Health Management RegulationsWork Inju & Accident Handling RegulationsHazardous Waste Management RegulationsManagement Measures for Safety Peormance AssessmentR&D Laborato Safety Management SystemEHS Rewards and Penalties Management ProceduresLimited Space Safety Management Regulations

New Policies Introduced in 2024Guidelines on Overseas EHS System Framework ConstructionManagement Measures for Safety Peormance AssessmentEHS Peormance Appraisal Measures of R&D Management DepamentEHS Rewards and Penalties Management ProceduresSafety Inspection Notication Form of Dalian Zhiding TechnologySafety Ocer Management System for the Marketing System

During Work Safety Month in 2024, the Companycarried out specialized safety inspections, hostedsafety knowledge competitions, and conductedemergency drills based on business continuityplans. Safety training was also provided to bothsenior employees and all employees.

Case: Work Safety Month

Employee Development Guarantee / 2024 SUSTAINABILITY REPORT

The Company implements an all-employee safety responsibility system, linking executive compensation tooccupational health and safety performance indicators. All employees have signed theSafety ResponsibilityAgreement. Employees may provide suggestions regarding occupational health and safety through labor unionat the workers’congresses or regular communication activities, or submit related feedback via whistleblowermechanisms or the President’s mailbox.

.? Safety Management SystemDuring the reporting period, one new subsidiary obtained ISO 45001 certification. By the end of the reportingperiod, 57.89% of the Company’s key operating sites were certified under ISO 45001?2018 OccupationalHealth and Safety Management Systems. The occupational health and safety management system covered

91.19% of employees. Subsidia Suzhou INOVANCE passed the evaluation of

“Second level Safety ProductionStandardization Enterprise” in Jiangsu Province this year..? Safety Culture DevelopmentThe Company regularly conducts safety education and training for all employees through a combination ofonline, oine, and practical drills. Training methods include online le sharing, safety examinations, onboardingtraining, special lectures, and on-site guidance to improve employees’safety skills, literacy, and awareness.During the reporting period, the Company organized 67 special safety training sessions covering topicssuch as safe operation procedures, electrical safety, chemical safety, special equipment safety, and hazardidentification. The training covered all employees as well as suppliers and partners who are required to workon-site.

In 2024, during Fire Safety Month, the Companyorganized group-wide fire safety competitionsand volunteer fire brigades to raise fire safetyawareness among all employees and enhancepractical safety capabilities.

The Company conducted specialized training on product debugging and operational safety to enhance safetyawareness and practical skills of marketing and technical service personnel. In 2024, the Company organizedfour general on-site product debugging safety training sessions for new market employees, six training sessionson high-risk scenarios (e.g., working at heights, hot work, hoisting), and monthly training on safety precautionsduring product debugging for frontline seice sta.The Company held two safety training sessions for internal employees and partners, covering safety operationprocedures for product installation and debugging, achieving 100% coverage of the targeted employees andpaners.

Case: Fire Safety Month

Product Safety Training

Managing Operational Safety Risks

To effectively identify and control occupational health and safety risks, the Company follows managementdocuments such as the Hazard and Environmental Factors Identification and Assessment System, establishingprocedures for hazard identication, assessment, and control. Annually, the Company identies and categorizesoccupational health and safety risks associated with company activities, products, services, and operatingconditions.In identifying and assessing safety risks, the Company uses relevant standards and guidelines to identifyhazards, applying intuitive experience and hazardous conditions assessment methods for risk evaluation.The hazardous condition assessment method is a semi-quantitative evaluation of hazards when operatingin potentially hazardous environments, using the probability of an accident (L), the frequency of exposure tohazardous environments (E), and the potential consequences of an accident (C) to determine the hazard score(D) and thus the hazard level.In terms of risk control, the company develops corresponding risk control plans and measures for differenthazard levels, using a“PDCA”work mechanism to continuously monitor and improve safety risks. During therepoing period, 57.89% of operational sites conducted occupational health and safety risk assessments.

Implementation of Safety InspectionsResponsible OrganizationInspection ContentFrequencyEHS Depament

Conducts routine on-site inspections across all areas andsupeises hazard rectication

MonthlyIntegrated Supply Chain EHSDepament

Inspects safety-related aspects of equipmentMonthlyWorkshop team leaders and groupleaders

Veries closure status of issues listed by the EHS DepamentWeekly

Employee Development Guarantee / 2024 SUSTAINABILITY REPORT

Emergency Management and Hazardous Chemicals Management

.? Emergency ManagementTo rapidly respond to and effectively control various occupational health and safety incidents, minimizingpersonnel casualties and property damage from accidents, the Company has formulated and released the

Production Safety Accident Emergency Rescue Plan, which includes 1 comprehensive emergency plan, 6 specificemergency plans, and 6 on-site handling schemes.The Company regularly organizes emergency drills for all employees to enhance their capability to handleaccident risks. In the reporting year, the Company conducted eight emergency drills, covering categoriessuch as fire evacuation, elevator entrapment, chemical leaks, hazardous waste leakage, electric shock, forkliftinjuries, radiation incidents, and mechanical injuries. Looking ahead, the Company will continue to expand thescope of emergency plans and drills to fuher enhance risk response and emergency management capabilities..? Hazardous Chemical ManagementTo prevent health risks to employees from the use of hazardous chemicals, the Company formulated theHazardous Chemical Safety Management System, theISC Hazardous Chemicals Management Standards, and theChemical Leak Emergency Response Procedureto manage hazardous chemicals across their entire life cycle fromprocurement, transpoation and handling, storage, usage, to disposal.

.? Safety Production ReviewThe company has established a multi-category, multi-level occupational health and safety internal reviewmechanism, conducting regular inspections weekly, monthly, and annually to identify safety risks at all sites andpropose corrective measures for potential hazards, monitoring and following up on remediation. Safety reviewsfocus on high-risk areas and key points (e.g., workshop safety, chemical management), including compliancewith safety regulations, equipment and facility safety, and employee operating procedures.The EHS Department compiles a list of issues for situations that do not comply with safety standards,formulates corresponding measures and deadlines, and provides targeted rectification guidance. Uponcompletion of rectification, the EHS Department reviews and verifies the results, forming a closed-loop PDCAmechanism for resolving safety issues.

During the reporting period, the EHS Department completed monthly safety inspections for all productionareas, achieving a 100% rectication rate for safety hazards.

Lifecycle Management of Hazardous ChemicalsProcurement

Review the supplier’s hazardous chemical production qualications, safety data sheets, and safety labels;require that only trained and qualied procurement personnel are allowed to peorm relevant tasks.Transpoationand handling

Review qualications of transpoation vehicles, escos, and handling personnel, and establish strictoperational standards.Storage

Use dedicated warehouses equipped with relevant safety equipment, with standardized labeling andclassied storage; conduct regular storage condition checks.Usage

Strictly control operational procedures; require ceied operators to wear specied personal protectiveequipment (PPE) during operations.Disposal

Prohibit direct discharge or disposal; hazardous chemicals must be collected and handed over to qualiedthird-pay agencies for professional disposal.In the repoing year, the Company sought water-based alternativesto volatile organic compounds (VOCs) and conducted internalvalidation to reduce emissions of harmful gases. Meanwhile, theCompany improved process design accuracy to switch from overallapplication of flux to point-to-point application in PCB soldering,thereby reducing ux usage and residual waste liquid.In April 2024, Suzhou INOVANCE was named an“Advanced Unit forHazardous Chemical Safety Management”for 2023 by Suzhou MunicipalGovernment.

Occupational Disease PreventionINOVANCE attaches great importance to employees’occupational health and safety. The Company strictlycomplies with the Law of the People’s Republic of China on the Prevention and Control of Occupational Diseasesandapplicable laws and regulations in all operating regions. It has established theOccupational Health ManagementRegulationsand set a long-term goal of“zero occupational diseases,”building and continuously improvingthe occupational health and safety management system from the perspectives of system assurance, riskmanagement, and routine protection.In terms of occupational disease protection, the Company deepens employee prevention and treatment, strictlyimplements the“Three Simultaneous”measures for occupational health, compiles occupational disease hazardassessment repos, implements occupational disease prevention engineering measures, and conducts regularon-site occupational disease hazard detection and occupational health-related hidden danger inspectionsannually, monitoring and rectifying occupational disease risks. Identied occupational disease hazards this yearinclude noise, aclic acid, tin dioxide, and butyl acetate.Furthermore, the Company strengthens the management of employees’occupational health, providingoccupational health seices to employees. The Company conducts regular health checkups for all employees.For those exposed to occupational disease hazards, it establishes individual occupational health files,provides pre-job, on-the-job, and exit medical checkups, and purchases supplementary health insurance.Employees exposed to physical hazards or occupational disease risks are provided with PPE, and their use ofsuch equipment is supervised to ensure workplace health and safety. In addition, we have enhanced human-machine safety design and added safety acceptance processes for equipment to further strengthen thedefense line for employees’ occupational health and safety.During the reporting period, the Company achieved a 100% occupational health examination coverage rate,with no occupational disease incidents or deaths caused by occupational diseases repoed.

Suppliers are vital industrial paners of INOVANCE. The company values the critical suppo suppliers providefor our products and seices, strengthen supply chain security management, and actively promotes greensupply chains to enhance value chain synergy and advance sustainable supply chain development.

Key Peormance in 2024

Pass rate of suppliers included in ESG audits

Percentage of suppliers with signedcontracts including ESG requirements

Coverage rate of ESG audits for new suppliers

Pass rate of key suppliers’hazardous chemicalmanagement and RoHS compliance review

100%

100%

100%

100%

Supply Chain SecurityAs the global political and economic situation becomes increasingly turbulent and the acceleratedreconstruction of the global industrial chain, enterprises are enhancing supply chain exibility and adaptabilityto mitigate the potential risk of supply chain disruptions. The company built an autonomous, controllable,safe, and efficient supply chain by classifying and categorizing suppliers, establishing business continuitymanagement (BCM) mechanisms, and planning localized procurement, mergers and acquisitions.

Inclusive and ResponsibleEcosystem Building

INOVANCE is committed to building an equal, friendly, collaborative, inclusive, and responsible businessecosystem that generates economic, environmental, and social value, driving high-quality developmentacross the indust.

Building a Sustainable Supply Chain

Inclusive and Responsible Ecosystem Building / 2024 SUSTAINABILITY REPORT

Supplier ClassicationBy cooperation level

Strategic supplierSupplier to be concernedKey supplierGeneral supplierBy peormance level

Excellent supplierSupplier to be improvedQualied supplierNon-qualied supplier

Supplier Categorization

By tier of raw material supplyTier 1 supplierMulti-tier supplierBy product operation methods

ManufacturerSeice providerAgent/trader

Supplier Classi?cation and Categorization

INOVANCE classies its 2,240 existing suppliers by cooperation and peormance levels, and categorizes themby tier of raw material supply and product operation method. The company formulated and issued theMulti-TierSupplier Management Standards, which involved managing upstream raw materials for key materials, dening thescope of multi-tier supplier management, and setting management requirements based on technology, quality,supply, responsiveness, and cost.

Supplier Lifecycle ManagementINOVANCE has established a comprehensive supplier lifecycle management system that tracks and managessuppliers through registration, admission review, peormance assessment, empowerment training, and phase-out, with all stages documented in the management system.

Business Continuity Management

As part of our risk management, the company established contingency plans for emergency response andbusiness continuity to reduce losses and impact on business operations due to major risks or emergencies,ensure employee and asset safety, maintain continuity in product and service delivery, and support theachievement of our strategic goals.In 2024, the company leveraged ISO 22301 certification to comprehensively advance the building of ourbusiness continuity management system. Using an“assessment-driven building”approach, the companybuilt an end-to-end business continuity management system spanning suppliers, the company, and customersand covering key products and customers. Based on a top-down whole-process framework, the companyconducted business impact analyses to identify eight key business areas. The company assessed the businessrisk according to 28 risk scenarios across five emergency types. For medium and high business risks, thecompany developed a list of critical risk resources covering personnel, equipment, products and materials,applications and data, and infrastructure, and formulated targeted mitigation strategies.During the reporting period, the company conducted 13 risk event drills, including simulated disruptions inkey supplier deliveries and logistics, and practical drills for key business system outages. These drills helpedoptimize contingency plans and improve emergency response capabilities. In December 2024, our subsidiarySuzhou INOVANCE obtained ISO 22301?2019 Business Continuity Management System ceication.

Supplier Assessment Results for the Year

Total number of excellent suppliers

Total number of suppliers to be improved

Total number of qualied suppliers

Total number of non-qualied suppliers

Supplier TQRDC Assessments

The company conducts TQRDC assessments on suppliers annually, with monthly assessments on suppliers’

quality and delivery, and semi-annual overall assessments on supplier TQRDC performance. TQRDCassessments are led by the Procurement Strategy Team, with support from SQE, technical, and executionprocurement teams. The Procurement Strategy Team formulates an annual assessment plan and confirmsthe assessment list according to supplier categories and transactions, coordinating with SQE to executethe assessment, and ultimately rates suppliers as excellent, qualified, to be improved and non-qualified. Forsuppliers who do not pass the performance assessment, the company carries out empowerment training tofacilitate continuous improvement in supplier peormance. During the repoing period, the company assessed255 suppliers in the TQRDC assessment, with a pass rate of 90.20%.

Supplier ESG Management

Our supplier ESG management spans ve phases—admission, maintenance, review, peormance improvement,and phase-out—enabling dynamic monitoring and management of suppliers’sustainable practices. Themanagement scope covers all key suppliers..? Supplier Admission

In 2024, the company upgraded the“EHS & CSR”supplier assessment to“Sustainability”assessment,adding new criteria covering human rights, environment, and safety aspects. During the reporting period,137 new suppliers completed ESG data collection and admission reviews. All new suppliers signed theSupplierManagement Contract..? Supplier MaintenanceThe company regularly conducts green supply chain surveys, inviting key suppliers to update ESG data,including 14 categories such as“carbon peaking and carbon neutrality”goals and plans, GHG emissions,direct and indirect energy consumption, green electricity usage, water usage, and the propoion of renewablematerials used. During the reporting period, the company invited over 200 key suppliers to participate in theESG information suey, with a response rate of 93.47%..? Supplier AuditThe company conducts annual audits of suppliers, which include online and on-site audits of environmental,health and safety, and business ethics compliance.

Inclusive and Responsible Ecosystem Building / 2024 SUSTAINABILITY REPORT

.? Supplier Performance ImprovementThe company conducts management assessments for key suppliers and all suppliers of its subsidiary,INOVANCE Automotive, covering sustainability dimensions. Assessment reports are issued by the companyto support suppliers in continuously improving their performance. The company regularly organizes ESGempowerment training activities for suppliers to suppo their ESG capabilities.

.? Supplier Phase OutThe company eliminates suppliers involved in serious legal violations or acts that severely impact the operationand management of INOVANCE. Acts that severely impact the operation and management of INOVANCEinclude but are not limited to major supply accidents, major quality issues, leakage of condential information,major security accidents, and violations of business ethics, which cause business interruptions, asset losses,threats to personal safety, and damage to reputation.

.? Con?ict Minerals ManagementThe company explicitly commits to not using conflict minerals—such as gold, tantalum, tungsten, tin, and theirderivatives—sourced from the Democratic Republic of Congo and its neighboring countries and regions. Inthe reporting year, the company revised the Measures for Control and Management of INOVANCE Conflict Minerals,extending its applicability to all suppliers.The company has stated in its Supplier Management Contractthat its products comply with the Conflict-FreeSourcing Initiative (CFSI), prohibiting suppliers from providing conflict minerals or their derivatives sourcedfrom conict-aected regions mentioned above. Suppliers providing components that contain relevant mineralcontent are required to sign theConict-Free Minerals Commitment. During new supplier admission, the companyincludes conict minerals in its admission review requirements.The company’s production processes involve the use of gold (Au) and tin (Sn). It conducts regular conflictminerals audits of suppliers, including random inspections for higher-risk suppliers, with audits performedby the SQE team. During the reporting period, the company conducted conflict minerals audits for relevantsuppliers, achieving a 100% audit pass rate.

Responsible Procurement

INOVANCE actively practices the concept of responsible procurement by continuously strengthening oversightof suppliers in areas such as workplace safety, environmental compliance, labor rights protection, conflictminerals control, hazardous substances and chemical management, and business ethics. The companypromotes the development of localized supply chains, prioritizes collaboration with local suppliers, andconsistently ensures equal treatment of all suppliers, including SMEs.

On July 23, 2024, the company held the “2024 Green Supply Chain Communication and Awareness Session”via online livestreaming. During the session, the company presented its 3030 Green Supply Chain Vision,reviewed the progress of green supply chain development in recent years, claried near-term plans andactions, and specically explained the three-phase approach for future implementation of green supplychain assessment and collaborative improvement. Over 200 paicipants from more than 100 key suppliersattended and interacted with the livestream session.

Case: 2024 Green Supply Chain Communication and Awareness Session

.? Hazardous Substances and Chemicals ManagementFor hazardous substances management, the company follows theEU RoHS Directive. It evaluates and examineshazardous substances in Supplier Survey Reports (SSR), Supplier Quality Process Audit (QPA), and IncomingQuality Control (IQC) at certain frequencies. The company is equipped with RoHS rapid testing instrumentscapable of directly detecting hazardous substances in incoming materials. During the reporting period, theRoHS compliance audit pass rate for suppliers was 99.96%..? Regulating Supplier Business ConductThe company promotes transparent procurement and clean transactions, requiring suppliers to upholdbusiness ethics and avoid any unlawful or non-compliant acts. INOVANCE regularly conducts supplier trainingand dissemination of business ethics every year. During the reporting period, there were no instances ofsuppliers being disqualied due to serious ethical violations..? Local ProcurementTo fuher enhance supply chain resilience and promote local economic development, INOVANCE has adoptedstrategies of“Local Development”,“Supplier Relocation”and“Globalized Supply”. The company plans tointensify eos to develop local suppliers and continually increase the propoion of local procurement. In linewith the construction progress of production bases, the company encourages suppliers to relocate accordinglyto ensure the continuity of local supply. With its increasing globalization efforts, INOVANCE will continueadvancing its“Local for Local”strategy to increase the proportion of local procurement and further enhancesupply chain resilience..? Equal Treatment of SMEsThe company values the establishment of strong partnership relations with suppliers, and upholds respectand equal treatment for all suppliers. During the repoing period, based on disclosures on the“Credit China”

website, the company was not involved in any serious dishonesty incidents related to overdue payments toSMEs. As at the end of the repoing period, the company had no instances where accounts payable (includingnotes payable) exceeded RMB30 billion or accounted for more than 50% of total assets.

Inclusive and Responsible Ecosystem Building / 2024 SUSTAINABILITY REPORT

086086

Event OrganizationActively organizing innovationcompetitions for students at universitiesand vocational colleges based onindust development trends.

Joint Development of a Talent EcosystemPanering with ecosystem enterprises fordedicated talent recruitment events;establishing employment and internshipbases with universities to nuure industtalent.

Training EmpowermentEstablishing an online livestream learningplatform to provide technical andbusiness management empowermenttraining for ecosystem paners.

Indust-Education Integration

Integrating indust cases andexperience into the teaching curricula ofpaner universities to build a pipeline ofprofessional talent for the indust.

Indust-Research Integration

Co-creating solutions with multiple core customers; establishing joint laboratories with suppliers andindust paners; engaging in research cooperation with several universities and establishing jointlaboratories to tackle cutting-edge technologies.

.? Industrial Ecosystem Collaboration Strategy

The company’s industrial ecosystem collaboration is coordinated by the Department of Ecosystem StrategicDevelopment in collaboration with business departments. The company’s core strategies are“industry-educationintegration, industry-research integration, event organization, joint development of a talent ecosystem, and trainingfor empowerment”. Through a combination of online and offline approaches, the company promotes knowledgesharing and talent exchange across the industrial chain, strengthens ecosystem collaboration, and realizes mutualbenet within the ecosystem.

“Advancing industrial technology for a better world” is INOVANCE’s vision. Achieving this vision requires deepcollaboration across the upstream and downstream segments of the industrial chain. Through technologicalinnovation, talent exchange, and knowledge sharing, the company aims to build an open and mutuallybeneficial industrial ecosystem. In 2024, the company continued to deepen ecosystem cooperation, enhancefront-end and back-end coordination along the industrial chain, and work with partners to jointly promotesustainable development of the indust.

Promoting Industrial Cooperation and Development

.? Industrial Cooperation and Exchange Cases

The company and Harbin Institute of Technology have launched a joint program to train engineering master’sand doctoral students. Master’s students study on campus for one year and train at the company for two years;doctoral students study on campus for two years and train at the company for three years. As at the end of therepoing period, two jointly trained master’s students had successfully graduated.

INOVANCE and Harbin Institute of Technology Joint Talent Development Program

087087

The first INOVANCE Cup National Innovation Competition for Intelligent Automation was launched inNovember 2023 and concluded in August 2024. The competition attracted 1,068 teams from 255 universities.Following intense competition, four teams from Harbin Institute of Technology, Shenzhen Institute ofInformation Technology, and other institutions won first prize at the national level; 12 teams won secondprize, and 82 teams won third prize. In addition to generous cash prizes, rst prize winners received job oersfrom INOVANCE, while second prize winners were granted direct access to campus recruitment interviewsat the company. Special awards were also presented, including Best Teamwork Award, Best EngineeringImplementation Award, Most Popular Project Award, and Best Business Value Award.The second “INOVANCE Cup” Competition was launched in September 2024 and is expected to conclude inAugust 2025.

The company launched sho video accounts “INOVANCE Speaks on Industrial Automation” and “INOVANCEPlanet” to educate the public about the industrial automation industry. In 2024, the company released85 videos, attracting over 25 million views. As at the end of the reporting period, “INOVANCE Planet” hadlaunched approximately 1,900 courses, with cumulative views reaching 300,000.

The First INOVANCE Cup National Innovation Competition for Intelligent Automation

Class Platfrom of INOVANCE Planet

INOVANCE Cup National Innovation Competition for Intelligent Automation

Industrial Automation Knowledge Popularization

Inclusive and Responsible Ecosystem Building / 2024 SUSTAINABILITY REPORT

INOVANCE Employees Actively Paicipate inCommunity Public Welfare Activities

Donation Ceicate Issued by CharityFederation of Huarong County, Yueyang

Contributing to Social Development.? Community Public Welfare and Charitable DonationsINOVANCE actively participates in community construction and fulfills its corporate social responsibilityby creating a community-enterprise interaction platform. The company encourages employees to engagein community volunteer services, taking volunteer service as a bridge of community communication andcontributing to the construction of a harmonious and livable community.In 2024, the Employee Volunteer Association organized three river patrols, one free clinic, and oneenvironmental trash cleanup activity. Registered volunteers contributed a total of 960 hours of service, with130 instances of volunteer paicipation.INOVANCE is deeply committed to philanthropy. During the reporting period, the company made charitabledonations totaling RMB2,789,000, primarily for disaster relief, education assistance and support for thedisabled and disadvantaged.

.? Supporting Rural RevitalizationThe company actively responds to the Party Central Committee’s call to prioritize agricultural and ruraldevelopment and supports rural revitalization projects. In 2024, Suzhou INOVANCE partnered with thelocal government to launch a“Party Building for Agricultural Support”initiative, encouraging employeesto purchase“Taihu Hengjing” rice from Suzhou’s Hengjing Subdistrict at a co-construction price, therebysuppoing local agricultural development.

CategoIndicatorsUnit202420232022

AddressingClimateChange

Total GHG emissions

tCO

e 8,001,399.84 /

/

Scope 1 Direct GHG emissions

tCO

e 4,091.56 1,807.90 1,601.90Scope 2 Indirect GHG emissions

tCO

e 148,705.14 125,602.71

82,155.14

Scope 3 Other indirect GHG emissions

tCO

e 7,848,603.14 /

/Catego 1 Purchased goods and seicestCO

e 7,737,892.62 //Catego 2 Capital goodstCO

e 22,107.62 //Catego 3 Fuel- and energy-related activitiestCO

e 2,870.64 //Catego 4 Upstream transpoation and distributiontCO

e 15,889.96 //

Appendix 1: ESG Key Peormance Table

Economic Peormance

Notes:

1. Economic peormance data can be found corresponding gures in the annual nancial repos of 2024, 2023 and 2022. If any data dierence occurs, the

data in the annual nancial repos shall prevail.

2. Human Capital Return on Investment = [revenue - (operating costs - total expenses for employee salaries and benets)] / total expenses for employee

salaries and benets.

CategoIndicatorsUnit202420232022

EconomicPeormance

RevenueMillion RMB37,040.9530,419.9323,008.31Categorized by market segmentation of revenueDomesticrevenue

Domestic revenue amountMillion RMB35,001.6228,680.1122,123.02Propoion of domestic revenue%

94.49

94.2896.15

Overseasrevenue

Overseas revenueMillion RMB2,039.331,739.82885.29Propoion of overseas revenue%

5.51

5.723.85

Growth rate of revenue%

21.77

32.2128.23

Operating costsMillion RMB32,806.0426,278.7819,783.51Basic EPSRMB per share

1.60

1.781.64

Net prot attributable to shareholders of the listedcompany

Million RMB4,285.494,741.864,319.76Growth rate of net prot attributable to shareholdersof the listed company

%-9.62

9.7720.89

Net cash ow from operating activitiesMillion RMB7,200.443,369.923,200.83Total assetsMillion RMB57,178.8248,957.5639,211.61Weighted average ROE%

16.52

21.6624.31

Retained earningsMillion RMB19,438.8516,358.1112,573.87Total expenses for employee salaries and benetsMillion RMB6,017.424,856.493,962.80Human capital return on investment

%

1.70

1.851.81

Financial assistance received from governmentMillion RMB

115.62

147.14153.84

Environmental Peormance

Repo Appendix

Report Appendix / 2024 SUSTAINABILITY REPORT

CategoIndicatorsUnit202420232022

AddressingClimateChange

Catego 5 Waste generated in operationstCO

e 6.43 //Catego 6 Business traveltCO

e 25,491.98 //Catego 9 Downstream transpoation and distributiontCO

e 40,821.27 //Catego 13 Downstream leased assetstCO

e 3,522.63 //GHG Emission intensity in operation

tCO

e / RMB 1million revenue

4.134.19

3.79

Reduction of GHG emissions

tCO?e/year12,170.82 //Carbon credittCO

e 0//Oppounitiesin CleanTechnology

Propoion of revenue from clean technology-relatedproducts and seices

%

59.63

49.67 /

Scope 4 Avoided GHG emissionstCO?e/year14,447,904 10,748,527 /

Energy Use

Total energy consumption

Ton of standardcoal

34,795.37 28,425.21 18,679.57Total energy consumption intensity

Ton of standardcoal/RMB 1million revenue

0.94

0.93 0.81

Total direct energy consumption

Ton of standardcoal

1,129.39 970.61 844.38Gasoline consumptionL186,108.89 216,568.12 220,972.87Diesel consumptionL74,708.78 65,568.00 103,625.40Natural gas consumptionm

677,008.00 467,096.00 317,129.00Liqueed petroleum gas consumptionL12,320.28 86,416.17 91,442.00Total indirect energy consumption

Ton of standardcoal

33,665.98 27,454.59 17,835.20Electricity consumption

MWh271,522.07 222,514.15 145,119.59Steam consumptionTon3,113.00 1,132.00 0Renewable energy consumption

MWh19,624.75 8,742.33 5,178.55Propoion of renewable energy in total energyconsumption

%6.91 3.77 3.40Total installed capacity of renewable energygeneration devices

MW18.83 //Energy saved from new energy saving projectskWh/year1,458,755.001,964,500.00 /Total investment in energy eciency projectsk RMB670.90//Annual operating cost reduction through energyeciency projects

k RMB/year1,167 //

WaterResourcesUtilization

Total water withdrawalm

1,085,190.561,021,444.28605,987.00Water withdrawal intensity

m

/RMB 1million revenue

29.30

33.60 26.34

Water withdrawal at operational sites in water-stressed areas

m

867,408.66//Resource recyclingm

3,260,000.00//Water recycling rate

%75.03//

PollutantDischarge

Waste gas emissionsTotal waste gas emissionsm

1,989,403,3141,097,885,202 /Waste gas emission intensity

m

/RMB 1million revenue

53,708.2136,090.99 /Paiculate matter (PM) emissionskg1,238.00 199.67 329.50Nitrogen oxides (NOx) emissionskg1,158.46 1,160.09 /Volatile organic compounds (VOCs) emissionskg12,323.76 6,969.50 824.50Tin and its compounds emissionsTon0.79 0.03 0.02Sulfur oxides (SOx) emissionsTon0.76 //Hazardous air pollutants (HAPs) emissionsTon0//Wastewater dischargeTotal wastewater dischargem

313,389.00 273,310.09 /

Notes:

1. Total GHG emissions comprise Scope 1 direct GHG emissions, Scope 2 indirect GHG emissions, and some Scope 3 other indirect GHG emissions. Scope 1

includes xed combustion emissions from cooking equipment, mobile combustion emissions from company-owned vehicles, forklifts, and leased vehicles foroperations, as well as fugitive emissions from air conditioning chillers and re-ghting equipment. Scope 2 includes indirect emissions from purchasedelectricity and steam. The calculations for Scope 3 are based on the calculation categories in the GHG Protocol, covering categories 1, 2, 3, 4, 5, 6, 9, and 13.

2. Due to signicant changes in the methodology for calculating Scope 3 emissions in 2024, the Scope 3 data for 2024 are not comparable to previous years.

To avoid misleading readers, the previous year’s data is marked with a “/”.

3. The calculation is based on ISO 14064-1:2018 and the IPCC 2006 Guidelines for National GHG Inventories, and the Guidelines for Accounting and Repoing

GHG Emissions from Enterprises of Other Industries (Trial). Emission sources include xed combustion from cooking equipment, mobile combustion fromcompany-owned vehicles, forklifts, and leased vehicles for operations, as well as fugitive emissions from air conditioning chillers and re-ghting equipment.The company is not involved in industrial process emissions. Only CO? is included in the GHG calculations. Caloric values follow the lower heating valuestandards in the General Rules for Calculation of the Comprehensive Energy Consumption (GB/T 2589). Carbon oxidation rates and other parameters arereferenced from the corresponding default values in the Guidelines for Accounting and Repoing GHG Emissions from Enterprises of Other Industries (Trial)(2015), and the unit carbon content per energy unit is referenced from the IPCC 2006 Guidelines for National GHG Inventories.

4. Indirect GHG emissions from purchased electricity and steam are calculated in accordance with ISO 14064-1:2018 and the General Guideline of the GHG

Emissions Accounting and Repoing for Industrial Enterprises (GB/T 32150-2015). Only CO? is included in the GHG calculations. For emissions from purchased

CategoIndicatorsUnit202420232022

PollutantDischarge

Wastewater discharge intensity

m

/RMB 1million revenue

8.46

8.98 /

Domestic wastewater discharge volumem

295,080.00 228,155.05 64,959.00Chemical oxygen demand (COD)Ton93.32 114.17 37.66Ammoniacal Nitrogen (NH3-N)Ton10.09 7.81 2.65Total phosphorus dischargeTon0.83 0.62 0.32Total nitrogen dischargeTon10.60 9.86 5.73Animal and vegetable oils dischargeTon4.23 4.63 3.13Suspended solids (SS) emissionsTon40.70 50.00 36.25

WasteTreatment

Waste emissionsTotal waste emissions

Ton6,570.72/

/

Waste emission intensity

Ton/RMB 1million revenue

0.18

/

/

Total waste recycled/reused

Ton4,869.90/

/Total hazardous waste

Ton1,234.99694.62 412Hazardous waste treated

Ton1,234.99694.62 /Hazardous waste emission intensity

Ton/RMB 1

million revenue

0.03

0.02 /

Hazardous waste recycled/reused

Ton232.63

94.53 /

Total hazardous waste disposed by landllTon00.50 /Total hazardous waste incinerated with energy recoveTon339.453.3/Total hazardous waste incinerated without energyrecove

Ton662.98 522.38 /Total hazardous waste used other methodsTon023.91 /Toxic emission and leakage incidentsTime0//Total non-hazardous waste

Ton5,335.73/

/

Non-hazardous waste emission intensity

Ton/RMB 1

million revenue

0.14

/

/

Non-hazardous waste recycled/reusedTon4,637.27/

/

EnvironmentalComplianceManagement

Amount of environmental protection training durationHour7,504.00 7,439.00 /Total environmental investment during the repoingperiod

Million RMB10.866.02/Propoion of key operational sites ceied under ISO14001

%66.67 66.67 /Propoion of key operational sites that conductedenvironmental risk assessments

%66.6766.67/Number of incidents ned for violating environmentalprotection laws and regulations

/00/Total nes incurred for violations of environmentalprotection laws and regulations

RMB00/

Report Appendix / 2024 SUSTAINABILITY REPORT

electricity in 2024, emission factors for operational sites located in China refer to the provincial average carbon dioxide emission factors for electricity in 2022in the Announcement on the Release of the 2022 National Power Carbon Dioxide Emission Factor issued by the Minist of Ecology and Environment. Thesesame factors are also used to recalculate and update 2023 and 2022 data. In calculating emissions from purchased electricity of overseas operational sites,emission factors from the national electricity sectors in ecoinvent version 3.10 are used. For emissions from purchased steam, emission factors are based onthe thermal energy emission factors in the Guidelines for Accounting and Repoing GHG Emissions from Enterprises of Other Industries issued by the NationalDevelopment and Reform Commission.

5. The calculation is based on the GHG Protocol and the General Guideline of the GHG Emissions Accounting and Repoing for Industrial Enterprises (GB/T

32150-2015). The calculation for Scope 3 covers categories 1, 2, 3, 4, 5, 6, 9, and 13. Categories 7, 8, 10, 11, 12, 14, and 15 are deemed non-material indirectemission sources and are not included in the calculation. Emission factors for Scope 3 are based on ecoinvent version 3.10 and the UK Government GHGConversion Factors for Company Repoing 2023.

6. GHG emissions in operation = scope 1 direct GHG emissions + scope 2 indirect GHG emissions.

7. Reduction of GHG emissions = GHG emissions reduced from renewable energy used (in operation) + GHG emissions conveed from the aenergy saved from

new energy saving projects.

8. Clean technology-related products and seices are consistent with those included in the calculation of Scope 4. In the company’s 2023 ESG Repo, this

indicator was referred to as “Propoion of Energy-Saving, Material-Conseed and Carbon-Reduced Product Oering”.

9. It is the sum of the total direct energy consumption and the total indirect energy consumption.

10. It is the sum of all types of direct energy used, which are conveed into standard coal using conversion factors from the General Rules for Calculation of the

Comprehensive Energy Consumption (GB/T 2589-2020): Natural gas = 1.2143 kgce/kg; gasoline = 1.4714 kgce/kg; diesel = 1.4571 kgce/kg; LPG = 1.7143 kgce/kg.

11. It is the sum of all types of indirect energy used, which are conveed into standard coal using conversion factors from the General Rules for Calculation of

the Comprehensive Energy Consumption (GB/T 2589-2020): Electricity (equivalent value) = 0.1229 kgce/kWh; steam (equivalent value) = 0.0341 kgce/MJ.

12. Electricity consumption includes electricity purchased from the grid and from third-pay distributed renewable energy facilities, as well as electricity

generated and consumed from the company’s own distributed renewable energy facilities.

13. Renewable energy includes solar, wind, hydro, biomass, and other sustainable, non-depletable sources. Total renewable energy consumption includes

green electricity rights purchased via green ceicates, electricity generated and consumed by company-owned renewable energy facilities, and photovoltaicelectricity purchased via rooftop leasing agreements at preferential rates.

14. It includes the capacity of company-owned photovoltaic installations and those constructed under the EMC model.

15. In 2024, the company identied a total of 14 operational sites located in water-stressed areas.

16. Water recycling rate = recycled water volume / (total water withdrawal + recycled water volume).

17. Total waste emissions = hazardous waste emissions + non-hazardous waste emissions.

18. Total waste recycled/reused = hazardous waste recycled/reused + non-hazardous waste recycled/reused.

19. Hazardous waste includes waste organic solvents, packaging containers, rags and gloves, spent suace treatment liquids, grinding sludge, emulsied

waste, and other hazardous waste listed in the National Catalogue of Hazardous Wastes.

20. Due to an expansion in the statistical scope, 2023 data on hazardous waste treated has been restated and corrected.

21. Due to an expansion in the statistical scope, 2023 data on hazardous waste recycling/reuse has been restated and corrected.

22. Non-hazardous waste includes waste cardboard, wooden pallets, scrap copper, iron, aluminum, and plastic bags.

23. Due to an expansion in the statistical scope, 2024 non-hazardous waste data is not comparable to data from previous years. To avoid misleading readers,

the previous year’s data is marked with a “/”.

Social PeormanceCategoIndicatorsUnit202420232022

ProductandSeiceSafetyandQuality

Total number of product and seice incidents in violation of laws and regulations/000Sales volume of products recalled due to safety and health reasons in already sold ordelivered products

RMB000Propoion of products sold or shipped that have been recalled for safety and health issues%000Number of safety and health incidents of products and seices in violation of laws andregulations

/000Number of complaints received about products and seices

/250Complaint handling rate%100100100Propoion of online sales

%

Belowone in amillion

Below onein a million

/Total number of illegal and non-compliant incidents concerning customer privacy

/000Customer satisfaction scorePoint70.8669.75/Number of labeling incidents of products and seices in violation of laws and regulations/000Number of violations of marketing and communications laws and Regulations

/000Propoion of product revenue from conict-aected and high-risk areas

%000Number of major product safety and quality incidents

/000Amount of losses from major product safety and quality incidentsRMB000

CategoIndicatorsUnit202420232022

Data Securityand PrivacyProtection

Moneta value of data security incidents

Million RMB1.000/Total number of information security vulnerabilities/1,1811,955/Total number of illegal and non-compliant incidents concerning customer privacy

/00/Moneta value of customer privacy breach incidentsRMB00/Number of employee personal information security training sessionsTime211715Number of employees covered by personal information security training/21,85825,48713,342Personal information security training coverage rate

%84.81100/

Notes:

1. Safety and health reasons refer to product issues that aect functionality, cause harm to users, or expose the company to legal liability, prompting

customers to return, exchange, or replace the product. Propoion of products recalled due to safety and health reasons in already sold or delivered products= sales volume of products recalled due to safety and health reasons in already sold or delivered products (RMB) ÷ total sales (RMB) × 100%.

2. It includes formal complaints submitted by customers in writing and complaints led with government authorities.

3. Propoion of online sales = online-generated revenue (excluding revenue via the order management system) ÷ total revenue (RMB) × 100%.

4. The total number of illegal and non-compliant incidents concerning customer privacy refers to the number of illegal and non-compliant incidents resulting

from major customer privacy leakage as conrmed by cou rulings or administrative penalties from government authorities.

5. Marketing and communications laws and regulations include the Adveising Law of the People’s Republic of China, the Law of the People’s Republic of China

on the Protection of Consumer Rights and Interests, the Anti-Unfair Competition Law of the People’s Republic of China, and other laws and regulations withmarketing rules for products and seices. Such violations are determined based on formal complaints or administrative penalties from the governmentauthorities.

6. According to the OECD, conict-aected and high-risk areas are regions experiencing armed conict, widespread violence, or other threats to personal

safety, often associated with human rights abuses and violations of international and domestic laws. Propoion of product revenue from conict-aectedand high-risk areas = sales of products from conict-aected and high-risk areas (RMB) ÷ total sales (RMB) × 100%.

7. Major product safety and quality incidents are determined based on responsibility assessments issued by relevant government authorities.

CategoIndicatorsUnit202420232022

Innovation-DrivenDevelopment

R&D investmentMillion RMB3,147.082,624.152,229.27R&D investment as a percentage of revenue

%

8.50

8.639.69

Number of R&D personnel/5,5385,4824,793Propoion of R&D personnel

%

22.65

23.1523.66

Number of new patent applications/685982875Number of new patents granted/572506718Number of new trademarks approved/593381Number of new copyrights approved /7961/Total number of valid patents/2,375//Number of invention patents applied to major business

/450//Notes:

1. R&D investment as a percentage of revenue = R&D investment (RMB) ÷ revenue (RMB) × 100%; revenue coverage is consistent with the scope of the

consolidated nancial statements.

2. Propoion of R&D personnel = number of R&D personnel ÷ number of full-time labor contract employees × 100%.

3. Major business refers to business excluding investment income, non-operating income, gains/losses from changes in fair value, etc. Invention patents refer

to patents classied as invention patents in the total number of valid patents, excluding design and utility model patents.

Notes:

1. The moneta value of data security incidents is determined based on cou rulings. The 2024 data reects one case where an employee leaked company

trade secrets, resulting in a loss of RMB 1 million as determined through civil mediation by a People’s Cou.

2. Illegal and non-compliant incidents concerning customer privacy are determined based on cou rulings or administrative penalties.

3. The company regularly organizes personal information security training. The training coverage rate does not include employees who were planning to

resign or on leave during the training period.

Report Appendix / 2024 SUSTAINABILITY REPORT

CategoIndicatorsUnit202420232022

Employment

Total number of employees/26,51825,48720,256Number of foreign employees/444456/Prot per employeeMillion RMB

0.16

0.19/

Labor contract signing rate%100100100Propoion of employees from ethnic minorities and/or disadvantaged groups

%5.987.91/Propoion of employees by employment typeFull-time labor contract employees/24,44523,68520,256Full-time dispatched employees/1,7921,420/Part-time employees (internship, apprentices, working students and retiredemployees rehired in total)

/281382/Propoion of pa-time and dispatched employees%7.827.07/Propoion of full-time labor contract employees%92.1892.93/Propoion of employees by gender

Propoion of female employees%25.41 26.19/Propoion of male employees%74.59 73.81/Propoion of employees by age

Number of employees aged over 50/303317/Number of employees aged 30–50/14,40313,422/Number of employees under 30/11,71311,748/Propoion of employees aged over 50%1.151.24/Propoion of employees aged 30–50%54.5252.66/Propoion of employees under 30%44.3446.09/Propoion of employees by education level

Number of employees with doctoral degrees/685852Number of employees with master’s degrees/3,8623,3952,505Number of employees with bachelor’s degrees/7,5807,8806,297Number of employees with junior college degree or below/14,90914,15411,402Propoion of employees with doctoral degrees%0.260.230.26Propoion of employees with master’s degrees%14.6213.3212.37Propoion of employees with bachelor’s degrees%28.6930.9231.09Propoion of employees with junior college degree or below%56.4355.5356.29Total number of newly-recruited employees

/14,0058,995/Newly-recruited employees by gender

Number of newly-recruited male employees/10,8886,723/Number of newly-recruited female employees/3,1172,272/Newly-recruited employees by age

Number of newly-recruited employees aged over 50/1217/Number of newly-recruited employees aged 30–50/4,4423,149/Number of newly-recruited employees under 30/9,5515,829/Propoion of newly-recruited employees by gender

Propoion of newly-recruited male employees%77.7474.74/Propoion of newly-recruited female employees%22.2625.26/Propoion of newly-recruited employees by age

3,4Propoion of newly-recruited employees aged over 50%0.090.19/Propoion of newly-recruited employees aged 30–50%31.7235.01 /Propoion of newly-recruited employees under 30%68.20 64.80 /Employee turnover rate

%27.2624.4227.90Volunta turnover rate%24.5323.79/

CategoIndicatorsUnit202420232022

Employment

Employee turnover rate by gender

Male employee turnover rate%27.3123.73/Female employee turnover rate%27.1226.36/Employee turnover rate by age

Turnover rate for employees aged over 50%21.40 12.30 /Turnover rate for employees aged 30–50%22.7220.41/Turnover rate for employees under 30%32.9829.32/Average length of seice (in the company) for male employeesYear3.17//Average length of seice (in the company) for female employeesYear3.19//Propoion of female employees in junior management

%18.4115.60 /Propoion of female employees in mid-level management

%14.2914.50 /Propoion of female employees in senior management

%10.716.60/Propoion of female employees in management levels

%15.7514.70/Propoion of female employees in revenue-generating roles

%16.0115.00/Propoion of female employees in STEM-related positions

%13.699.90/Propoion of internal employment

%2.9312.66/Proportion of employees undertaking regular performance and careerdevelopment review

%100100100Percentage of employees below senior management level that stock optionincentive and long-term incentive program applies

%97.9498.48/Number of penalties received for violating employment and labor laws andregulations

/000Notes:

1. Minority and/or vulnerable groups include: ethnic minorities of Chinese nationality, foreign employees, and employees with disabilities.

2. In accordance with the General Data Protection Regulation (GDPR, Regulation (EU) 2016/679), companies may not process personal data such as gender,

age, and education level without explicit consent or other legal basis. In compliance with the above, the following disclosed employee demographic statisticsexclude data from the company’s entities and branches located in EU member states.

3. Statistics on newly recruited employees and employee turnover include only employees of entities and branches within the Chinese mainland. Due to the

limited size and data collection challenges of overseas entities and branches as well as the small impact of the absence of such data on indicators, the dataon overseas employees is not included.

4. Propoion of newly recruited employees by catego = total number of newly recruited employees in the catego ÷ total number of newly recruited

employees × 100%. This diers from the statistical method used in the company’s 2023 ESG repo. To improve comparability, historical data have beenadjusted in accordance with the current year’s methodology.

5. Employee turnover rate = number of employees who left ÷ (number of employees who left + number of employees at the end of the period) × 100%.

Dispatched and pa-time employees are excluded in the aforementioned number of employees.

6. Propoion of female employees in junior management = number of female employees in junior management ÷ total number of junior management

employees × 100%. Junior management is dened as heads of third-level depaments and lower.

7. Propoion of female employees in mid-level management = number of female employees in mid-level management ÷ total number of mid-level

management employees × 100%. Mid-level is dened as second-level depament heads (including deputies).

8. Propoion of female employees in senior management = number of female employees in senior management ÷ total number of senior management

employees × 100%. Senior management refers to heads (including deputies) of rst-level depaments, business divisions, branches and subsidiaries,excluding statuto “senior executives” in corporate governance.

9. Propoion of female employees in management levels = number of female employees in management levels ÷ total number of employees in management levels × 100%.

10. Propoion of female employees in revenue-generating roles = Number of female employees in revenue-generating positions ÷ Total number of

employees in such positions × 100%. Revenue-generating roles are dened as the direct management roles in sales and other depaments, or the roles thatdirectly contribute to the output of products or seices.

11. Propoion of female employees in STEM-related positions = number of female employees in STEM-related positions ÷ total number of employees in

STEM-related positions × 100%. STEM stands for science, technology, engineering, and mathematics. STEM professionals apply their knowledge of science,technology, engineering, or mathematics in their daily work.

12. Propoion of internal employment = number of internal employment ÷ (number of internal employment + number of newly recruited employees) × 100%.

13. Probationa employees are not subject to regular peormance and career assessments. This indicator excludes them accordingly.

Report Appendix / 2024 SUSTAINABILITY REPORT

CategoIndicatorsUnit202420232022

OccupationalHealth andSafety

Number of work-related injuries

Time263136Number of lost workdays due to work-related injuriesDay2,340.002,614.501,315.00Lost workday rate due to work-related inju

/6.448.84

/Lost-time inju frequency rate

/0.360.52

/Lost-time inju severity rate

/0.030.04

/Number of Employees of Occupational Disease Risk Posts/1,008685349Number of occupational disease cases/000Number of fatalities due to occupational disease/000Propoion of key operational sites ceied under ISO 45001%57.89//Propoion of key operational sites with health and safety risk assessmentsconducted

%57.89 //Propoion of employees represented by formal management-worker healthand safety committees

%100100100Employee physical examination coverage rate

%100100100Total investment in work inju insuranceMillion RMB7.05//Work inju insurance coverage rate%100//Total investment in workplace safety liability insurance

RMB0//Workplace safety liability insurance coverage rate

%0//Number of paicipants in safety training sessions/46,30738,40740,437Number of safety training sessions conductedTime15018564Number of penalties received for violating occupational health and safetylaws and regulations

/000

CategoIndicatorsUnit202420232022

EmployeeRights

Number of key operational sites reviewed and assessed human right protection peormance/844Total number of discrimination and harassment incidents/000Number of labor dispute cases

/171511Number of violations related to employment and dismissal, compensation and benets, workhours and leave, equal oppounity, anti-discrimination, etc.

/000Percentage of employees who received training on diversity, discrimination, and/or harassment%100100100Propoion of Employees Covered by Collective Negotiation Agreement

%84.74//Propoion of employees who have formally elected as employee representatives

%88.7289.10 /Social Insurance Coverage Rate%100100100

Notes:

1. All work-related inju indicators cover the entire workforce, including full-time, dispatched, and pa-time employees. The company expanded its safety

data governance in the current year to include all employees. Data for 2023 regarding the lost workday rate due to work-related inju, lost-time injufrequency rate, and lost-time inju severity rate were revised accordingly for comparability.

2. Lost workday rate due to work-related inju = number of lost workdays due to work-related injuries × 200,000 ÷ total working hours.

3. Lost-time inju frequency rate = total number of lost-time inju incidents × 1,000,000 ÷ total working hours; the total number of lost-time inju incidents

is the total number of work-related injuries.

4. Lost-time inju severity rate = number of lost workdays due to work-related injuries × 1,000 ÷ total working hours.

5. In practice, formal management-worker health and safety committees refer to the work safety committees established by the company’s branches and

subsidiaries.

6. Based on the company’s management practices, probationa employees are not eligible for the company’s annual physical examination program; thus,

they are excluded from this calculation.

7. In accordance with the Work Safety Law of the People’s Republic of China and related regulations, the company does not engage in production activities in

high-risk sectors such as coal mining, non-coal mining, or hazardous chemicals, and is therefore not subject to the mandato requirement to purchaseworkplace safety liability insurance.

Notes:

1. Such cases include disputes related to non-compete agreements.

2. Propoion of employees covered by collective negotiation agreement = number of labor contract employees covered by collective negotiation agreement ÷

total number of labor contract employees. Probationa employees are excluded from this indicator. Due to changes in the data scope and the high cost ofretroactive revision, data for 2022 and 2023 are not disclosed here.

3. The number of employees paicipating in labor unions equals the number of employees represented by formally elected representatives; therefore, the

percentage of employees covered by elected representatives equals the union coverage rate.

CategoIndicatorsUnit202420232022

EmployeeTraining

Employee training coverage rate%100100100Annual training expenditure

Million RMB2.91//Average training expenditure per employee

RMB109.62 232.89/Employee training coverage rate by genderPercentage of female employees covered by training%100100100Percentage of male employees covered by training%100100100Total employee training hours

Hour719,255.90686,347.40158,996.00Average training hours per employee

Hour27.1226.9323.56Average training hours by genderAverage training hours for female employees

Hour27.1226.9323.56Average training hours for male employees

Hour27.1226.9323.56

CategoIndicatorsUnit202420232022

SustainableSupplierManagement

Total number of existing suppliers/2,2402,592/Number of active suppliers

/1,4631,528/Number of suppliers from the Chinese mainland/2,1792,552/Number of suppliers from Hong Kong, Macao, Taiwan, and overseas regions/6140/Supplier auditPercentage of key suppliers assessed for sustainability

%93.4743/Number of new suppliers assessed for ESG/137231Pass rate of ESG assessments of new suppliers%100100/Pass rate of on-site ESG assessments of new suppliers%100100/Percentage of total revenues from products containing minerals from conict-aectedand high-risk areas coming from suppliers that have been veried conict-free

%000Percentage of supplier accessibility to conict-minerals information%100100/Percentage of suppliers with signed contracts including ESG requirements

%100100100Supplier peormance improvementNumber of suppliers found non-compliant with ESG standards during assessment/0//Number of suppliers identied with signicant/potential negative ESG impacts

/00/Number of suppliers with signicant/potential ESG impacts that were terminated/00/Total number of suppliers that implemented corrective measures for negative ESGimpacts

/00/Green supply chain sueyNumber of key suppliers that responded to the green supply chain suey

/229131/Response rate of key suppliers to the green supply chain suey

%93.4764/

Notes:

1. Statistics only include training activities conducted via the “INOVANCE Academy” platform. Training conducted through other channels is not covered. The

peormance indicators include all employees—full-time labor contract employees, dispatched employees, and pa-time employees.

Report Appendix / 2024 SUSTAINABILITY REPORT

CategoIndicatorsUnit202420232022RuralRevitalization

Total investment in rural revitalization and povey alleviationRMB12,200.00//Number of people beneted from rural revitalization and poveyalleviation initiatives

////

SocialContributions

Total amount invested into community public welfareRMB2,789,000.00696,599.271,460,111.51Amount invested in community public welfare (educationassistance)

RMB769,000.00292,000.00687,231.91Amount invested in community public welfare (environmentalprotection)

RMB000Amount invested in community public welfare (labor needs)RMB000Amount invested in community public welfare (medical health)RMB00587,378.61Amount invested in community public welfare (culture and spos)RMB20,000.0000Amount invested in community public welfare (other areas)RMB2,000,000.00404,599.27185,500.99Use of charity fundsRMB423,862.82145,585.70/Amount donated to charity projects

RMB100,000.00492,000.00667,231.91Total hours of employee volunteer seiceHour9605,60036,460Total instances of employee volunteer paicipation

Person-time130//

CategoIndicatorsUnit202420232022SustainableSupplierManagement

Supplier training empowermentNumber of key supplier empowerment training sessions/52/Coverage rate of integrity training and education for key suppliers%100100/EqualTreatment ofSMEs

Amount of overdue accounts payable (including notes payable) at the end of therepoing period

RMB0//Amount of overdue payments to SMEs at the end of the repoing period

RMB0//Propoion of distributors in the distributor network who paicipated in regular internalproduct and seice training

%100100100Notes:

1. Active suppliers refer to the suppliers that conducted transactions with the company during the repoing year.

2. Key suppliers refer to the group of suppliers that, ranked by procurement amount, account for the top 80% of annual procurement value within each

material catego.

3. Propoion of product revenue involving minerals from conict-aected and high-risk areas provided by suppliers that have passed conict-free mineral

audits = sales revenue (RMB) of such products provided by ceied conict-free suppliers ÷ total sales (RMB) × 100%.

4. The ESG clauses referenced here include the Supplier Code of Conduct and contract clauses addressing environmental, labor, human rights, and business

ethics (e.g., anti-corruption).

5. Signicant/potential negative impacts refer to incidents such as major supply disruptions, severe quality issues, breaches of condential information, major

safety accidents, or violations of business ethics that lead to operational interruptions, asset losses, threats to personal safety, or reputational damage.

6. Due to optimized suey methodology, the original indicator “Number of key suppliers undergone GHG invento during the repoing period” has been

revised to “Number of key suppliers that responded to the green supply chain suey”.

7. Due to optimized suey methodology, the original indicator “Coverage of key suppliers undergone GHG invento during the repoing period” has been

revised to “Response rate of key suppliers to the green supply chain suey”.

8. The calculation is based on serious dishonest conduct statistics disclosed on the “Credit China” website.

Notes:

1. Due to the inability to accurately count specic beneciaries, this data is not disclosed.

2. It refers to donation projects for which ocial donation receipts (printed and supeised by nancial authorities) have been issued.

3. Since the indicator “Number of employee volunteer paicipants” was changed to “Total instances of employee volunteer paicipation”, the historical data

are not restated due to traceability limitations.

CategoIndicatorsUnit202420232022

CorporateGovernance

Number of Board of Directors members/999Number of independent directors/333Number of male Board of Directors members/888Number of female Board of Directors members/111Propoion of female Board of Directors members%111111Number of board meetings heldTime8711Average number of directors attending the meetings of the Board of Directors/999Meetings of the Board of Directors attendance rate%100100100Minimum attendance rate of board members at meetings of the Board ofDirectors

%100100100Number of non-executive/independent directors with four or fewer othermandates

/333Average tenure of Board of Directors membersYear8.657.986.98Number of independent directors with indust experience/333Number of independent directors on the Board of Directors%33.3333.3333.33Propoion of independent directors on the Audit Committee%10066.6766.67Propoion of independent directors on the Compensation and AssessmentCommittee

%66.6766.6766.67Propoion of independent directors on the Compensation and AssessmentCommittee

%66.6766.6766.67Propoion of Board of Directors members who are immediate family members ofmajor shareholders, executives, or former executives

%000Standard deviation of director ages/4.036.086.08Standard deviation of director tenures/6.11

5.735.73

Number of nancial expes on the Audit Committee/111Multiple of base sala of CEO (President)

/

669.54

965.69 1,060.94

Average multiple of base sala of other executives with shareholding repoed

/

554.63

713.75903.67

Ratio of total compensation of CEO (President) to average employee sala/

16.86

16.4417.09

Propoion of government ownership%000Number of Audit Committee meetings heldTime658

Number of Compensation and Assessment Committee meetings heldTime4//Number of Nomination Committee meetings heldTime1//Number of General Meetings of Shareholders heldTime212Number of Meetings of the Board of Supeisors heldTime768Meetings of the Board of Supeisors attendance rate%100100100

Governance PeormanceReport Appendix / 2024 SUSTAINABILITY REPORT

CategoIndicatorsUnit202420232022

Anti-commercialBribe andAnti-corruption

Number of employees who received anti-corruption training

/10,585//Coverage rate of anti-corruption training among employees

%71.91 //Total number of hours of anti-corruption training received by employeesHour1,220.17//Number of corruption leads generated through whistleblowing channels/187/Total number of violations of anti-corruption laws and regulations/020Number of operating sites where anti-corruption audits have been conducted/534747Number of employees dismissed or disciplined due to corruption/02/Number of resolved corruption lawsuits involving the company or its employees/000

Compliancemanagement

Number of major incidents violated laws and regulationsTime

Number of nes imposed for violationsTime0

Total amount of nes imposed due to violationsRMB000Major tax violation incidents/000Violations related to conict of interest /000Money laundering or insider trading incidents/000FairCompetition

Number of lawsuits or major administrative penalties due to companymisconduct

/000Moneta value involved in lawsuits or major administrative penalties due tocompany misconduct

RMB000Number of legal proceedings related to anti-competitive behavior, antitrust, andanti-monopoly laws

/000Notes:

1. Due to changes in the statistical scope for “anti-corruption training paicipation”, to avoid misleading readers, the previous year’s data is marked with a “/”.

2. Frontline production employees are excluded from the calculation as they are not exposed to corruption risks.

Notes:

1. Multiple of base sala of CEO (President) = repoing year-end stock price (unadjusted)× number of shares held by CEO (President) as of the repoing year

÷ sala before tax of CEO (President) received during the repoing year.

2. Multiple of base sala of other executives = [(repoing year-end stock price × number of shares held by Executive 1 ÷ the executive’s sala before tax

received during the repoing year) + (repoing year-end stock price × number of shares held by Executive 2 ÷ the executive’s sala before tax receivedduring the repoing year) + (…)] ÷ number of executives with shareholding repoed.

3. After verication, the data in the company’s 2022 ESG repo showing zero was an ent error in the system; the actual value was eight. The company

hereby corrects it and apologizes to all stakeholders.

Index of Guidelines of Shenzhen Stock Exchange for Self-discipline Regulation of ListedCompanies No.17 - Sustainability Repo (Trial)A. Chapter Index Table

ChaptersDisclosure ContentDisclosure Chapter

Chapter IGeneral ProvisionsAbout This RepoChapter IIDisclosure Framework for Sustainability InformationChapters Related to Each Material Topic

Chapter III Environmental Information DisclosureChapter III Section 1Addressing Climate Change3.1 Addressing Climate ChangeChapter III Section 2Pollution Control and Ecosystem Protection3.5 Ecosystem ProtectionChapter III Section 3Resource Utilization and Circular Economy

3.2 Strengthening Energy Management

3.3 Innovative Green Products

3.5 Ecosystem Protection

Chapter IV Social Information DisclosureChapter IV Section 1Rural Revitalization and Social Contributions7.3 Contributing to Social DevelopmentChapter IV Section 2

Innovation-Driven Development and Ethics of Scienceand Technology

5.1 R&D Innovation Focus

Chapter IV Section 3Suppliers and Customers

4.1 Strict Product Quality Control

4.2 Improving Customer Seices

5.2 Data Privacy Protection

7.1 Building a Sustainable Supply Chain

Chapter IV Section 4Employees

6.1 Employee Rights and Welfare Protection

6.2 Talent Attraction and Retention

6.3 Employee Training and Development

6.4 Occupational Health and Safety

Chapter V Disclosure of Sustainability-Related Governance InformationChapter V Section 1Sustainability-Related Governance Mechanisms2.2 Strengthening Corporate GovernanceChapter V Section 2Business Practices2.3 Compliant and Robust OperationChapter VISupplementa Provisions and Interpretation/

Appendix 2: Index Table

Report Appendix / 2024 SUSTAINABILITY REPORT

B. Index of Guidelines TopicsDimensionNo.Guidance TopicsClauseDisclosure Location

Environment

1Addressing Climate ChangeAicles 21-283.1 Addressing Climate Change2Pollutant DischargeAicle 303.5 Ecosystem Protection3Waste TreatmentAicle 313.5 Ecosystem Protection4Ecosystem and Biodiversity ProtectionAicle 323.5 Ecosystem Protection5Environmental Compliance ManagementAicle 333.5 Ecosystem Protection6Energy UseAicle 353.2 Strengthening Energy Management7Water Resources UtilizationAicle 363.5 Ecosystem Protection8Circular EconomyAicle 373.3 Innovative Green Products

Society

Rural RevitalizationAicle 39

7.3 Contributing to Social Development

10Social ContributionsAicle 407.3 Contributing to Social Development11Innovation-Driven DevelopmentAicle 425.1 R&D Innovation Focus12Ethics of Science and TechnologyAicle 43Not applicable13Supply Chain SecurityAicle 457.1 Building a Sustainable Supply Chain14Equal treatment of SMEsAicle 467.1 Building a Sustainable Supply Chain15Product and Seice Safety and QualityAicle 47

4.1 Strict Product Quality Control

4.2 Improving Customer Seices

16Data Security and Customer PrivacyAicle 485.2 Data Privacy Protection17EmployeesAicle 50

6.1 Employee Rights and Welfare Protection

6.2 Talent Attraction and Retention

6.3 Employee Training and Development

6.4 Occupational Health and Safety

Sustainability-relatedGovernance

18Due DiligenceAicle 522.3 Compliant and Robust Operation19Stakeholder EngagementAicle 532.1 Sustainability Management

Anti-commercial Bribe andAnti-corruption

Aicle 552.3 Compliant and Robust Operation21Fair CompetitionAicle 562.3 Compliant and Robust Operation

CompanySelf-Disclosures

22Oppounities in Clean Technology/

3.1 Addressing Climate Change

3.3 Innovative Green Products

23Green Products and Innovation/3.3 Innovative Green Products24Corporate Governance/2.2 Strengthening Corporate Governance25Risk Management/2.3 Compliant and Robust Operation

Cross-indust Collaboration andDevelopment

/

7.2 Promoting Industrial Cooperation and

Development

GRI StandardDisclosureLocationPa 1: General Disclosures

GRI 2:

GeneralDisclosures 2021

2-1 Organizational details1.1 Company Prole2-2 Entities included in the organization’s sustainability repoingAbout This Repo2-3 Repoing period, frequency and contact pointAbout This Repo2-4 Restatements of informationAbout This Repo2-5 External assuranceAppendix 82-6 Activities, value chain and other business relationships1.3 Core Business2-7 Employees6.1 Employee Rights and Welfare Protection2-8 Workers who are not employees

Appendix 1: Key Peormance Table SocialPeormance2-9 Governance structure and composition2.2 Strengthening Corporate Governance2-10 Nomination and selection of the highest governance body2.2 Strengthening Corporate Governance2-11 Chair of the highest governance body

2.2 Strengthening Corporate Governance

2-12 Role of the highest governance body in overseeing the management of impacts2.2 Strengthening Corporate Governance2-13 Delegation of responsibility for managing impacts2.2 Strengthening Corporate Governance2-14 Role of the highest governance body in sustainability repoing2.1 Sustainability Management2-15 Conicts of interest

2.3 Compliant and Robust Operation

2-16 Communication of critical concerns2.1 Sustainability Management2-17 Collective knowledge of the highest governance body2.1 Sustainability Management2-19 Remuneration policies2.1 Sustainability Management2-22 Statement on sustainable development strategy2.1 Sustainability Management2-23 Policy commitments6.1 Employee Rights and Welfare Protection2-24 Embedding policy commitments2.3 Compliant and Robust Operation2-25 Processes to remediate negative impacts2.3 Compliant and Robust Operation2-26 Mechanisms for seeking advice and raising concerns2.1 Sustainability Management2-27 Compliance with laws and regulationsDisclosure has been made in all chapters.2-29 Approach to stakeholder engagement2.1 Sustainability Management

Pa 2: Material Topics

GRI 3:

Material Topics2021

3-1 Process to determine material topics2.1 Sustainability Management3-2 List of material topics2.1 Sustainability Management3-3 Management of material topics2.1 Sustainability ManagementEconomic Peormance

GRI 201:

EconomicPeormance2016

201-1 Direct economic value generated and distributed

Appendix 1: Key Peormance TableEconomic Peormance201-2 Financial implications and other risks and oppounities due to climate change3.1 Addressing Climate Change201-3 Dened benet plan obligations and other retirement plans6.1 Employee Rights and Welfare Protection201-4 Financial assistance received from government

Appendix 1: Key Peormance TableEconomic Peormance

Anti-corruption

GRI 205:

Anticorruption2016

205-1 Operations assessed for risks related to corruption

Appendix 1: Key Peormance TableGovernance Peormance205-2 Communication and training about anti-corruption policies and procedures

2.3 Compliant and Robust Operation

7.1 Building a Sustainable Supply Chain

Anti-competitive behavior

GRI 206:

Anti-competitiveBehavior 2016

206-1 Legal actions for anti-competitive behavior, anti-trust, and monopolypractices

2.3 Compliant and Robust Operation

Statement of use

Shenzhen INOVANCE Technology Co., Ltd. discloses the referenced information in this index table in accordancewith the GRI Standards for the period from Janua 1, 2024 to December 31, 2024.

GRI 1 usedGRI 1: Foundation 2021

GRI Index TableReport Appendix / 2024 SUSTAINABILITY REPORT

GRI StandardDisclosureLocationMaterialsGRI 301:

Materials 2016

301-2 Recycled input materials used3.3 Green Innovative Products301-3 Reclaimed products and their packaging materials3.3 Green Innovative Products

Energy

GRI 302:

Energy 2016

302-1 Energy consumption within the organization

3.2 Strengthening Energy Management

Appendix 1: Key Peormance TableEnvironmental Peormance302-3 Energy intensity

3.2 Strengthening Energy Management

Appendix 1: Key Peormance TableEnvironmental Peormance302-4 Reduction of energy consumption3.2 Strengthening Energy Management302-5 Reductions in energy requirements of products and seices3.3 Innovative Green ProductsWater and EuentsGRI 303:

Water andEuents 2018

303-2 Management of water discharge-related impacts3.5 Ecosystem Protection303-3 Water withdrawal

Appendix 1: Key Peormance TableEnvironmental Peormance303-4 Water discharge

Appendix 1: Key Peormance TableEnvironmental Peormance303-5 Water consumption

Appendix 1: Key Peormance TableEnvironmental Peormance

Biodiversity

GRI 304:

Biodiversity 2016

304-2 Signicant impacts of activities, products and seices on biodiversity3.5 Ecosystem ProtectionEmissions

GRI 305:

Emissions 2016

305-1 Direct (Scope 1) GHG emissions

3.1 Addressing Climate Change

Appendix 1: Key Peormance TableEnvironmental Peormance

305-2 Energy indirect (Scope 2) GHG emissions

3.1 Addressing Climate Change

Appendix 1: Key Peormance TableEnvironmental Peormance

305-3 Other indirect (Scope 3) GHG emissions

3.1 Addressing Climate Change

Appendix 1: Key Peormance TableEnvironmental Peormance

305-4 GHG emission intensity

3.1 Addressing Climate Change

Appendix 1: Key Peormance TableEnvironmental Peormance

305-5 Reduction of GHG emissions

3.1 Addressing Climate Change

Appendix 1: Key Peormance TableEnvironmental Peormance

305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other signicant air emissions3.5 Ecosystem Protection

Waste

GRI 306:

Waste 2020

306-1 Waste generation and signicant waste-related impacts3.5 Ecosystem Protection

306-2 Management of signicant waste-related impacts3.5 Ecosystem Protection

306-3 Waste generated

3.5 Ecosystem Protection

Appendix 1: Key Peormance TableEnvironmental Peormance

306-5 Waste directed to disposal

3.5 Ecosystem Protection

Appendix 1: Key Peormance TableEnvironmental Peormance

Supplier Environmental Assessment

GRI 308: SupplierEnvironmentalAssessment 2016

308-1 New suppliers that were screened using environmental criteria7.1 Building a Sustainable Supply Chain

EmploymentGRI 401:

Employment2016

401-2 Benets provided to full-time employees that are not provided to

tempora or pa-time employees

6.1 Employee Rights and Welfare Protection

401-3 Parental leave6.1 Employee Rights and Welfare

GRI StandardDisclosureLocation

Occupational Health and Safety

GRI 403:

OccupationalHealth and Safety2018

403-1 Occupational health and safety management system6.4 Occupational Health and Safety403-2 Hazard identication, risk assessment, and incident investigation6.4 Occupational Health and Safety403-3 Occupational health seices6.4 Occupational Health and Safety403-5 Worker training on occupational health and safety6.4 Occupational Health and Safety403-6 Promotion of worker health6.4 Occupational Health and Safety403-7 Prevention and mitigation of occupational health and safety impacts di-rectly linked by business relationships

6.4 Occupational Health and Safety

403-8 Workers covered by an occupational health and safety management system6.4 Occupational Health and Safety403-9 Work-related injuries6.4 Occupational Health and Safety403-10 Work-related ill health6.4 Occupational Health and Safety

Training and Education

GRI 404:

Training andEducation 2016

404-1 Average hours of training per year per employee6.3 Employee Training and Development404-2 Programs for upgrading employee skills and transition assistance programs6.3 Employee Training and Development404-3 Percentage of employees receiving regular peormance and careerdevelopment reviews

6.2 Talent Attraction and Retention

Diversity and Equal OppounityGRI 405:

Diversity andEqual Oppouni-ty 2016

405-1 Diversity of governance bodies and employees

6.1 Employee Rights and Welfare Protection

Appendix 1: Key Peormance TableSocial Peormance

Non-discriminationGRI 406:

Non-discrimina-tion 2016

406-1 Incidents of discrimination and corrective actions taken

6.1 Employee Rights and Welfare Protection

7.1 Building a Sustainable Supply Chain

Child Labor

GRI 408: ChildLabor 2016

408-1 Operations and suppliers at signicant risk for incidents of child labor

6.1 Employee Rights and Welfare Protection

7.1 Building a Sustainable Supply Chain

Freedom of Association and Collective Bargaining

GRI 407: Freedomof Associationand CollectiveBargaining 2016

407-1 Operations and suppliers in which the right to freedom of association andcollective bargaining may be at risk

6.1 Employee Rights and Welfare Protection

7.1 Building a Sustainable Supply Chain

Forced or Compulso Labor

GRI 409: Forcedor CompulsoLabor 2016

409-1 Operations and suppliers at signicant risk for incidents of forced or com-pulso labor

6.1 Employee Rights and Welfare Protection

7.1 Building a Sustainable Supply Chain

Local CommunitiesGRI 413: LocalCommunities2016

413-1 Operations with local community engagement, impact assessments, anddevelopment programs

7.3 Contributing to Social Development

Supplier Social Assessment

GRI 414: SupplierSocial Assess-ment 2016

414-1 New suppliers that were screened using social criteria7.1 Building a Sustainable Supply Chain414-2 Negative social impacts in the supply chain and actions taken7.1 Building a Sustainable Supply ChainCustomer Health and Safety

GRI 416:

Customer Healthand Safety 2016

416-2 Incidents of non-compliance concerning the health and safety impacts ofproducts and seices

4.1 Strict Product Quality Control

Marketing and LabelingGRI 417: Market-ing and Labeling2016

417-1 Requirements for product and seice information and labeling2.3 Compliant and Robust Operation417-2 Incidents of non-compliance concerning product and seice informationand labeling

2.3 Compliant and Robust Operation

417-3 Incidents of non-compliance concerning marketing communications2.3 Compliant and Robust Operation

Customer PrivacyGRI 418:

Customer Privacy2016

418-1 Substantiated complaints concerning breaches of customer privacy andlosses of customer data

5.2 Data Privacy Protection

Report Appendix / 2024 SUSTAINABILITY REPORT

ChaptersSectionsUN SDGs MappingChapter 2 Sustainable Development andCorporate Governance

2.1 Sustainability Management

2.2 Strengthening Corporate Governance

2.3 Compliant and Robust Operation

Goal 16 Peace, Justice and Strong InstitutionsGoal 17 Panerships for the GoalsChapter 3 Empowering Decarbonization3.1 Addressing Climate Change

3.2 Strengthening Energy Management

3.3 Innovative Green Products

3.4 Jointly Building a Net-zero Future

3.5 Ecosystem Protection

Goal 6 Clean Water and SanitationGoal 7 Aordable and Clean EnergyGoal 9 Indust, Innovation and InfrastructureGoal 11 Sustainable Cities and CommunitiesGoal 12 Responsible Consumption and ProductionGoal 13 Climate ActionGoal 15 Life on Land

Chapter 4 Focus on Customer Satisfaction4.1 Strict Product Quality Control

4.2 Improving Customer Seices

Goal 12 Responsible Consumption and Production

5 Innovation-Drives Development5.1 R&D Innovation Focus

5.2 Data Privacy Protection

Goal 9 Indust, Innovation and Infrastructure6 Employee Development Guarantee6.1 Employee Rights and Welfare Protection

6.2 Talent Attraction and Retention

6.3 Employee Training and Development

6.4 Occupational Health and Safety

Goal 3 Good Health and Well-being

Goal 4 Quality Education

Goal 5 Gender Equality

Goal 8 Decent Work and Economic Growth

Goal 10 Reduced Inequalities

Chapter 7 Inclusive And ResponsibleEcosystem Building

7.1 Building a Sustainable Supply Chain

7.2 Promoting Industrial Cooperation and

Development

7.3 Contributing to Social Development

Goal 4 Quality Education

Goal 10 Reduced Inequalities

Goal 12 Responsible Consumption and Production

Goal 17 Panerships for the Goals

Mapping Table of United Nations Sustainable Development Goals (UN SDGs)

No.Full Name of Operating SiteAbbreviation of Operating SiteKey Operational Site1Shenzhen INOVANCE Technology Co., Ltd.Shenzhen INOVANCE2Dongguan INOVANCE Technology Co., Ltd.Dongguan INOVANCE3Suzhou INOVANCE Technology Co., Ltd.Suzhou INOVANCE4Suzhou INOVANCE Control Technology Co., Ltd.Suzhou INOVANCE Control5Suzhou INOVANCE Automotive Co., Ltd.INOVANCE Automotive6Jiangsu Kingway Transpoation Co., Ltd.Jiangsu Kingway7INOVANCE New Energy Vehicle Technology (Changzhou) Co., Ltd.Changzhou INOVANCE New Energy8Yueyang INOVANCE Technology Co., Ltd.Yueyang INOVANCE9SHANGHAI BST ELECTRONIC CO., LTD.BST10SHANGHAI BNK CABLE CO., LTD.BNK CABLE11BST Machine & Electronics (Jiaxing) Co., Ltd.BST Machine & Electronics (Jiaxing)12Nanjing INOVANCE Technology Co., Ltd.Nanjing INOVANCE13Xi’an INOVANCE Technology Co., Ltd.Xi’an INOVANCE14Dalian Zhiding Technology Co., Ltd.Dalian Zhiding15Guangdong MJB Electric Co., Ltd.MJB16Tianjin BST Electric Co., Ltd.Tianjin BST Electric17hangchun Weton Optoelectronic Technology Co., Ltd.Changchun Weton18Ningbo EST Technology Co., Ltd.EST19EKSYS (Beijing) Technology Co., Ltd.EKSYS (Beijing)20Jinan INOVANCE Technology Co., Ltd.Jinan INOVANCE21Inova Automation Co., Ltd.INOVA AUTOMATION22INOVANCE AUTOMOTIVE (THAILAND) CO., LTD.INOVANCE AUTOMOTIVE THAILAND23INOVANCE TECHNOLOGY HUNGARY KORL?TOLT FELEL?SS?G? T?RSAS?GINOVANCE TECHNOLOGY HUNGARY24INOVANCE AUTOMOTIVE HUNGARY KORL?TOLT FELEL?SS?G? T?RSAS?GINOVANCE AUTOMOTIVE HUNGARY25SBC LINEAR CO., LTD.SBC26INOVANCE TECHNOLOGY KOREA CO., LTD.INOVANCE TECHNOLOGY KOREA27INOVA AUTOMATION ITALY S.R.L.INOVA AUTOMATION ITALY28INOVANCE TECHNOLOGY PRIVATE LIMITEDINOVANCE TECHNOLOGY INDIA29INOVANCE TECHNOLOGY EUROPE GMBHINOVANCE TECHNOLOGY EUROPE30INOVANCE TECHNOLOGY FRANCEINOVANCE TECHNOLOGY FRANCE31INNOVATION RECHERCHE AUTOMATISME INFORMATIQUEIRAI32INOVANCE TECHNOLOGY END?STR?YEL OTOMASYON L?M?TED ??RKET?INOVANCE TECHNOLOGY T?RKIYE33INOVANCE TECHNOLOGY ESPA?A, SLINOVANCE TECHNOLOGY SPAIN34INOVANCE TECHNOLOGY USA INC.INOVANCE TECHNOLOGY USA

To facilitate stakeholder review, The Company has complied the correlation between the abbreviated designations and the full names of the Company’soperational sites* as follows.

Appendix 3: Description of Operating Sites

Note: Key operating sites refer to those that have a material and substantive impact on the Company’s business operations, including all manufacturing centers andthe non-manufacturing centers with the largest number of employees. The combined number of full-time labor contract employees at the designated key operatingsites must account for at least 90% of the total number of such employees at the end of the repoing period. For subsidiaries operating at the same address andsharing the same management system, they are consolidated as a single operating site. The total number of key operating sites in 2024 was 19.

Report Appendix / 2024 SUSTAINABILITY REPORT

AbbreviationFull Name8DEight DisciplinesAIAicial IntelligenceAPQPAdvanced Product Quality PlanningARDAutomatic Rescue DeviceASILAutomotive Safety Integrity LevelATEXAtmosphères ExplosiblesBCMBusiness Continuity ManagementCCCChina Compulso CeicationCCERChina Ceied Emission ReductionCFSIConict-Free Sourcing InitiativeCNCComputerized Numerical ControlCOECenter of ExpeiseCQCChina Quality Ceication CentreCQMCustomer Quality ManagementCSACorporate Sustainability AssessmentCTCompliance TestDC/DCDirect Current to Direct Current ConveerDDoSDistributed Denial of SeiceDSTEDesign Strategy to ExecutionEAPEmployee Assistance ProgramsEHSEnvironment, Health and SafetyEMCEnergy Management ContractEMTExecutive Management TeamEPCEngineering Procurement ConstructionESGEnvironmental, Social and GovernanceGDPRGeneral Data Protection Regulation (REGULATION (EU) 2016/679)GHGGreenhouse GasGRIGlobal Repoing InitiativeIECInternational Electro Technical CommissionIFRS S1International Financial Repoing Standards Sustainability Disclosure Standard 1IoTInternet of ThingsIPDIntegrated Product Development

Appendix 4: Glossa

AbbreviationFull NameIQCIncoming Quality ControlISCIntegrated Supply ChainISOInternational Organization for StandardizationISSInstitutional Shareholder SeicesISSBInternational Sustainability Standards BoardITRIssue to ResolveKCPKey Control PointMESManufacturing Execution SystemMSCIMorgan Stanley Capital InternationalNPINew Product IntroductionOBCOn-board ChargerORTOngoing Reliability TestPCProcess ControlPCNProduct Change NoticationPDCAPlan, Do, Check and ActPLCProgrammable Logic ControllerPOProcess OwnerPPAPProduction Pa Approval ProcessPPEPersonal Protective EquipmentQCCQuality Control CircleQPAQuality Process AuditREACHRegistration,Evaluation,Authorisation and Restriction of ChemicalsRoHSRestriction of Hazardous SubstancesRPORecove Point ObjectiveRTRecommendation TrackingRTORecove Time ObjectiveSFMShop Floor ManagementSODSegregation of DutiesSQESupplier Quality EngineeringSSRSupplier Suey RepoS&PStandard & Poor’sTQRDCTechnology, Quality, Responsiveness, Delive & CostULUnderwriters Laboratories Inc.UN SDGsUnited Nations Sustainable Development GoalsUVUltravioletVOCsVolatile Organic Compounds

Report Appendix / 2024 SUSTAINABILITY REPORT

No.DimensionTopic Name

Topic Bounda

Topic Denition

ChapterLocationSupplyChainProductionandOperations

ProductsandSeices1E

AddressingClimateChange

The Company takes measures to mitigate the negative impacts ofclimate change and adapt to its potential challenges. These includereducing direct and indirect GHG emissions from production andoperations, reducing emissions across the value chain, assessingand managing risks posed by climate change (such as extremeweather events and supply chain disruptions), and enhancing climateresilience.

3.1

AddressingClimateChange

2E

Green Productsand Innovation

Through full lifecycle management of products, the Company adoptsthe philosophy of “material conseation, simplied processes, minimalpackaging, and modular functions” to reduce resource consumptionduring raw material procurement and production, improve productenergy eciency, and lower energy use during product usage, therebyreducing GHG emissions throughout the product lifecycle.

3.3

InnovativeGreenProducts

3E

Oppounitiesin CleanTechnology

The Company gains comprehensive insights into market oppounitiesarising from the green and low-carbon transition in key sectorssuch as energy, industry, construction, and transportation. Throughinnovation and R&D of new products and product portfolios, theCompany provides clean technology-related products and solutionsto respond to these oppounities.

3.4

JointlyBuilding aNet-zeroFuture

4EEnergy Use

Based on industry characteristics and operational realities, theCompany builds an energy management system. By conductingenergy usage assessments, setting energy-saving and renewableenergy utilization targets, and implementing energy-savingupgrades and renewable energy adoption plans, the Company aimsto use energy resources efficiently and continuously reduce theenvironmental impact of our business activities.

3.2

StrengtheningEnergyManagement

5E

CircularEconomy

In accordance with laws, regulations, and our business nature, theCompany engages in activities such as reduction, reuse, and recyclingduring production and distribution. These include establishing acircular economy management system, formulating circular economypolicies and plans, implementing circular economy measures, andevaluating progress and outcomes.

3.5

EcosystemProtection

6SEmployees

Talent Attraction and Retention: The Company strives to attract andretain talent by offering a comfortable work environment, fair andtransparent recruitment processes, competitive compensation andbenets, clear development pathways and promotion oppounities,and specialized incentive policies.Employee Rights and Well-being: The Company strictly complies withlaws, regulations, and international conventions to respect and protectemployees’ lawful rights and interests, fosters a diverse, inclusive, andequitable work environment, and establishes various welfare measuresto improve employees’ and their families’ quality of life.Employee Training and Development: The Company providesplatforms for vocational training and capacity building, developstraining systems for skills enhancement and career development,suppos employees’ all-round growth from the perspectives of jobroles, market needs, and future trends, and regularly oers careerdevelopment guidance and training peormance assessments.Occupational Health and Safety: The Company establishes anoccupational health and safety management system to ensure safeproduction and employee health. This includes the identication andcontrol of hazards or risks, safety production assessments, safetytraining, and occupational health management.

6.1

EmployeeRights andWelfareProtection

6.2

TalentAttraction andRetention

6.3

EmployeeTraining andDevelopment

6.4

OccupationalHealth andSafety

Appendix 5 Description of 2024 Material Topics

The table below presents the material topics for 2024 identied through topic assessment and analysis, along with their denitions, boundaries, and locations ofrelevant disclosures in the repo. Here, "bounda of material topics" refers to the segments within the value chain that may be signicantly impacted by thetopic after prelimina identication. These are initially categorized as "supply chain", "production and operations", and "products and seices".

No.DimensionTopic Name

Topic Bounda

Topic Denition

ChapterLocationSupplyChainProduction

andOperations

ProductsandSeices7S

Innovation-DrivenDevelopment

This section covers the Company’s management systemdevelopment and milestone achievements in R&D, includinginnovation management systems, R&D investment, key technologyR&D plans, R&D platform development, intellectual propertyprotection, innovation incentives, and innovation culture.

5.1

R&DInnovationFocus

8S

SustainableSupply ChainManagement

The Company manages supply chain risks to ensure supplychain security and stability. This includes building supply chainmanagement systems such as supplier entry standards coveringsustainability issues, supplier classification and grading, supplierrisk assessment and performance assessment, supplier GHGemission reduction plans and actions, responsible procurementpractices, and cooperation with suppliers to advance sustainablesupply chains.

7.1

Building aSustainableSupply Chain

9S

Product andSeice Safetyand Quality

The Company ensures that its products and seices comply withapplicable laws and regulations, indust standards, and customerrequirements in terms of product safety and quality, and meet thestandards and requirements for personal and propey safety. Thisincludes relevant goals, management systems, capacity building,and cultural development related to product safety and qualitymanagement.

4.1

Strict ProductQualityControl

4.2 Improving

CustomerSeices

10S

Data Securityand PrivacyProtection

Based on industry attributes and the nature of its operations,the Company identifies key operational processes involvingdata security and privacy protection, establishes a data securityand privacy protection management framework, formulatesrelevant management systems, improves infrastructure, developsemergency response plans for data breaches or security incidents,implements data system security protection, regularly reviews andevaluates the data and privacy-related management systems,and conducts specialized training on data security and privacyprotection.

5.2

Data PrivacyProtection

11G

CorporateGovernance

The Company promotes standardized operations and scientific,standardized, and transparent corporate governance byestablishing an effective governance structure comprising theGeneral Meeting of Shareholders, the Board of Directors, the Boardof Supeisors, and the management.

2.2

StrengtheningCorporateGovernance12G

RiskManagement

The Company executes risk management processes acrossall aspects of its business operations, establishes a sound riskmanagement system, and manages risks and ensures compliancerelated to economic, environmental, and social matters.

2.3

Compliantand RobustOperation

13G

Anti-commercialBribeand Anti-corruption

During operations and management, the Company adopts a seriesof measures and procedures to prevent, identify, and addresscommercial bribery and corruption in accordance with relevantlaws, regulations, and international standards. These includeformulating and implementing anti-bribery and anti-corruptionsystems, assessing and managing risks related to bribery andcorruption, setting control objectives, carrying out internal controland compliance reviews, conducting employee training andawareness programs, and establishing effective supervision andwhistleblowing mechanisms.

2.3

Compliantand RobustOperation

Report Appendix / 2024 SUSTAINABILITY REPORT

Appendix 6 Biodiversity Impact Assessment

Note: The species impact assessment refers to data from the Nature Watch Biodiversity Database, the International Union for Conseation of Nature (IUCN)Species Distribution Database, the Key Biodiversity Areas (KBA) Database, and the World Database on Protected Areas (WDPA).

Note: The impact assessment of protected areas refers to the protection data from the Nature Watch Database, Key Biodiversity Areas (KBA) Database, andWorld Database on Protected Areas (WDPA).

A. Species Impact Assessment Table

B. Impact Assessment Table of Protected AreasB. Impact Assessment Table of Protected Areas

Basic InformationProtected Areas Impact AssessmentNo.Operational SitesNational ParksNature ReseesNatural Parks

World NaturalHeritage Sites

InternationallyImpoant Wetlands1Shenzhen INOVANCE000002Suzhou INOVANCE001003INOVANCE Automotive00200

Changzhou INOVANCENew Energy

000005BST000006BNK CABLE00000

BST Machine &Electronics (Jiaxing)

000008Dalian Zhiding001009MJB0020010Jiangsu Kingway Rail0000011Tianjin BST0000012EST00000

Total00600

Basic Information

Species Impact AssessmentIUCN Threat CategoRCB Threat Catego

Protected species under theWildlife Protection Law of thePeople’s Republic of ChinaNo.Operational Sites

CriticallyEndangered

EndangeredVulnerable

CriticallyEndangered

EndangeredVulnerableClass IClass II

Three Types ofProtected Wildlife1Shenzhen INOVANCE00000003272Suzhou INOVANCE00000003563INOVANCE Automotive00100001694

Changzhou INOVANCENew Energy

0000000005BST00000002196BNK CABLE00000002197BST Electrical(Jiaxing)0000000008Dalian Zhiding0000000009MJB00000000510Jiangsu Kingway Rail00000000011Tianjin BST00000000012EST000000000Total001000026220

During the repoing year, Suzhou INOVANCE had no instances of excessive pollutant discharge, complied with relevant national regulations, and wasnot subject to environmental penalties by local authorities or complaints from community residents. No signicant negative impacts were caused tothe surrounding environment.

According to relevant regulations of the Minist of Ecology and Environment, the subsidia Suzhou INOVANCE was listed as a key environmentalsupeision entity (formerly known as a “key pollutant discharging entity”) in Suzhou in 2024. Suzhou INOVANCE manages pollutant emissions incompliance with laws and regulations, monitors the total volume and intensity of emissions regularly, and meets pollutant emission standards. During therepoing period, there were no cases of emissions exceeding the prescribed limits at Suzhou INOVANCE.

Appendix 7 Compliance Management ofKey Environmental Supeision Entities

Pollutant Emissions of Suzhou INOVANCE in 2024Types of MajorPollutants andCharacteristicPollutants

Names of MajorPollutants andCharacteristicPollutants

DischargeMethod

Number ofDischargeOutlets

DistributionofDischargeOutlets

DischargeConcentration/Intensity

ApplicableEmissionStandards

TotalEmissions

ApprovedTotalEmissions

Exceedanceof EmissionLimitsExhaust gas

Total non-methanehydrocarbons

Treatedto meetdischargestandards

Inside theplant

2.53mg/m

60 mg/m

1.01

tons

1.25

tons

NoneExhaust gas

Tin and itscompounds

Treatedto meetdischargestandards

Inside theplant

6.12×10

-4

mg/m3

5mg/m

0.0019

tons

0.0022

tons

NoneDomesticsewage

Chemicaloxygendemand (COD)

Discharge topipeline

Inside theplant

253 mg/L350 mg/L

21.37

tons

25.94

tons

NoneDomesticsewage

Suspended Solid(SS)

Discharge topipeline

Inside theplant

152 mg/L220 mg/L

20.2

tons

24.06

tons

NoneDomesticsewage

AmmoniacalNitrogen(NH3-N)

Discharge topipeline

Inside theplant

21 mg/L30 mg/L

1.56

tons

1.91

tons

NoneDomesticsewage

Totalphosphorus

Discharge topipeline

Inside theplant

3.8 mg/L5 mg/L

0.23

tons

0.287

tons

NoneDomesticsewage

Total nitrogen

Discharge topipeline

Inside theplant

36 mg/L50 mg/L

3.85

tons

4.432

tons

NoneDomesticsewage

Animal andvegetable oils

Discharge topipeline

Inside theplant

69 mg/L100 mg/L

1.75

tons

2.039

tons

None

Hazardouswaste

Waste organicsolvents, wastepackagingcontainers, wasterags and gloves,suace treatmentwaste liquids,waste grindingsludge, wasteemulsion, wasteactivated carbon,etc.

Disposed ofby qualiedthird-paycompanies

Notapplicable

Notapplicable

Notapplicable

Notapplicable

tons

Notapplicable

None

Report Appendix / 2024 SUSTAINABILITY REPORT

Appendix 8 Independent Third-pay Assurance

Report Appendix / 2024 SUSTAINABILITY REPORT

Qinglin CaiJianping CaoChen ChenCheng ChenDong ChenLixian ChenXingyuan ChenYing ChenLongshan DingShuhan DongYan DongZhongju FanYucheng FeiChang GaoZhijun GuAnna GuoHongjian GuoJianhua GuoYue GuoYan HanLi HangXinyi HeJiami HuangPeng HuangWenyu HuangMing JiaLingyu JiangRenjie JiangWilai KinthanonFangbiao LangYandong LengDejun LiEnze LiFujun LiHui Li

Jianping LiLanlan LiMan LiShiyan LiWenhong LiXiaolong LiHuan Lin

Pei LinYuan LinFeng LiuGaoxiang LiuHuan LiuLongguo LiuNa LiuWeitong LiuWentai LiuXiaoming LiuXuran LiuYang LiuYu LiuPan LongZhenwei LuHao LuoLingxiao LuoShuman LuoYue LüXiaozhe MoYimin NanChengpeng NiYanxia OuyangLei PanShanli PanYangju PengDongbo PiaoKeyi QiPan QinZhihong QiuYishi ShiWeilan SunZecheng SunWenqiang TangXiangqi TangChenhu WangChenyu WangPing WangYunlin WangHuafang WuWeihong WuZe WuWenyan XieZhijie XieJiali XuPeng XuLiming XuQiqi XuZhiyuan XuHuiying YanYi YanYunfeng YanLi YangTingting YangYi YangYing YaoJiaqi YeQi YeGaoxiang YiXiaoqiong YuZhijie YuZhongjun YuanZengmei YueHua ZengYan ZengGuangwei ZhaiHongdeng ZhangHua Zhang

Hua Zhang(11850)

Jianming ZhangJianming ZhangJun ZhangNingning ZhangPing ZhangYan ZhangYanpeng ZhangYang ZhangYinghui ZhangYun ZhangZhaoyu ZhangZhenhai Zhang

ZhengchangZhang

Chengjun ZhaoMin ZhaoWang ZhaoMing ZhengLong ZhiBin ZhouXijian ZhouYun ZhouAimin ZhuBaojun ZhuJinfeng ZhuRuijie ZhugeLinhong ZhuangWenhao ZongDeming ZouTong Zou

Acknowledgements

Chief Editor:

Ali HanEditorial Team:

Chunmiao Zheng, Jianfeng Hong

Colleagues listed below also contributed to the Repo:

INOVANCE Headquaer, 6 Lanqing 2nd Road, LuhuCommunity, Guanhu Subdistrict, Longhua District, Shenzhen

www.inovance.comsustainability@inovance.comFollow us on Linkedin