Environmental, Socialand Governance ReportCraft quality with ingenuity, Pioneer extraordinary through innovation
2024
Contents
About the ReportIntroduction
Building a RobustOperation Foundation
ESG ManagementManagement MessageAbout SNS
Reader FeedbackESG Performance IndicatorsIndicator Index Table
Corporate GovernanceBusiness EthicsCompliance and Risk ManagementIntellectual Property Protection
Cybersecurity and Information Security
Ecological Protection
Appendix
Practising Greenand Low-carbon ActionsEnvironmental Management SystemEnergy and Carbon ManagementResource Utilization
Emissions and Waste Management
Ensuring EmployeeRights and Development
Basic Rights and InterestsCareer DevelopmentHealth and Safety
Sustainable Supply ChainsCommunity Contribution
Creating HarmoniousSociety with Shared Success
Product Responsibility
About the Report
2024 Environmental, Social,and Governance Report
IntroductionAppendixBuild a RobustOperation Foundation
Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
This report is the ?rst environmental, social and governance report (hereinafterreferred to as “this report”) issued by Sinoseal Holding Co., Ltd. (Stock code: 300470)(hereinafter referred to as “SNS”, “the Company” or “we”). It aims to objectively demon-strate the management, practice and performance of SNS in the ?elds of economic,environmental, social and corporate governance.
Report DescriptionBasis of Compilation
The data and information sources used in this report include SNS’s internal statistics, publicreports, and disclosures. In case of discrepancies between this report and the Company’sannual consolidated ?nancial statements, the latter shall prevail. Unless otherwise speci?ed,the ?nancial data is presented in RMB.
This report is prepared with reference to the Self-regulatory Guidelines for Listed Companies No.17-Sustainable Development Report (Trial Implementation) by Shenzhen Stock Exchange, theGlobal Reporting Initiative Sustainability Reporting Standards (GRI Standards) (2021 Edition), andthe Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Data Sources
This report has been reviewed and approved by the Board of Directors for publication. TheCompany undertakes that the disclosed content of this report does not contain any falserecords, misleading statements or material omissions.Reliability Statement
This report is available in both Chinese and English. In the event of discrepancies between thetwo versions, the Chinese version shall be authoritative.Electronic copies of this report in both Chinese and English are readily accessible through theCompany's o?cial website and the CSRC-designated information disclosure platform for theChiNext Market “CNINFO”:
https://www.sns-china.com/ https:// www.cninfo.com.cn
Access to This Report
If you have any comments or suggestions on this report, please contact the Company viaphone or in writing through the following informationAddress: No. 8, 4th Wuke West Road, Wuhou District, Chengdu City, Sichuan ProvincePostcode: 610045 Telephone: 028-85542909 E-mail: ir@sns-china.com
Contact Information
This report is an annual report, consistent with the reporting period of the ?nancialannual report, covering the time period from January 1, 2024 to December 31, 2024. Forany content exceeding the above scope, this report will provide explanations in therelevant sections.Reporting Period
Unless otherwise stated, the content of this report covers SNS and its holding subsidiar-ies (including secondary subsidiaries), which is consistent with the scope covered by theCompany's annual report. The main scope of disclosure is as follows:
Reporting Scope
Sinoseal Holding Co., Ltd.Dalian Sun Seals Ltd.
SNS, the Company, weSun SealsUTEC (Suzhou) Sealing Solutions Co., Ltd.Sichuan Sunny Seal Co., Ltd.
UTECSunny SealZigong New Dipper Valve Co., Ltd.Krüger & Sohn GmbH
NDIVKS GmbH
AbbreviationCompany name
Management Message
Sinoseal Holding Co., Ltd.
Dear friends,We are pleased to present this report. On behalf of the Board of Directors and execu-tive management, I would like to extend my sincere gratitude to our investors, custom-ers, business partners, employees, and members of the broader community for yourcontinuous support and trust in SNS.Over the past year, against the backdrop of a slowing global economy, increasinglycomplex external environment, and the acceleration of the green and low-carbontransition, we have remained steadfast in our corporate slogan, “Craft quality withingenuity, Pioneer extraordinary through innovation”. Guided by our corporatemission to “Ensure safety and protect the environment”, we have integrated the princi-ples of sustainable development into our decision-making, driving high-quality growthand exercising our corporate social responsibility in tandem.Robust Governance: Laying a Solid Foundation for Sustainability
Green Innovation: Leading Industry Decarbonisation
2024 marks the ?rst year that we publish Environmental, Social, andGovernance (ESG) Report. Looking ahead to 2025, we remainresolutely focused on our vision to “To be the a world-class ?uidcontrol equipment provider”, further integrating ESG into ourbusiness, elevating ESG management practices, and forging avirtuous cycle of sustainable operations, social responsibility, andenvironmental stewardship.Sustainable development is both a de?ning imperative of the timesand the pathway to enduring corporate prosperity. We value yourinsights and suggestions as we strive for sustainable, high-qualitygrowth. Let us join hands, guided by innovation and responsibility,to jointly shape a greener industrial future!
Our employees are our most valuable asset. In 2024:
Protecting rights and interests: We invested RMB58.1 million in
employee welfare, achieving 100% coverage. We conducted special-ized programs including mental health training, AED emergencyresponse training, and safety drills. No major safety incidents oroccupational illness cases occurred.
Unlocking potential: Our equity incentive plan was extended to 227key employees. We organized 271 training programs and supported139 sta? members in upgrading their skills, and have been honoredas “Sichuan Extraordinary Employer of the Year”.
People-centric Approach: Creating and Sharing DevelopmentAchievements
We deliver high-quality products and services to our customers,attaining customer satisfaction rates above 95% and receiving“outstanding Supplier” recognitions from leading enterprises suchas Sinopec, Exxon Mobil, and Shenghong Petrochemical. In supplychain management, 100% of our suppliers have signed HSE agree-ments, strengthening supply chain quality oversight. Our e?orts topractise corporate responsibility were further evidenced by povertyalleviation and rural revitalization initiatives, investing overRMB400,000 to support agricultural development in Ganluo County.
Shared Responsibility: Empowering the Industry and Society
Hong Chen, General Manager
April 24, 2025
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IntroductionAppendixBuild a RobustOperation Foundation
Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
We have continuously improved our ESG governance framework, restructuring theformer Board of Directors’ Strategic Development Committee into the “Strategic Devel-opment and ESG Committee” and establishing a four-tier management structure toensure ESG objectives are fully integrated into our business strategy. In 2024, werecorded zero incidents of business ethics violations, maintained 100% employeessigning the Integrity Commitment Letter, and safeguarded corporate transparency ande?ciency through rigorous compliance audits and risk management systems. As theonly A-share listed company in China’s mechanical seal industry, we have maintainedan “A” rating – the highest level – among ChiNext-listed companies in Shenzhen StockExchange for ?ve consecutive years and have cumulatively distributed dividendsexceeding RMB700 million since our listing, genuinely rewarding shareholder trust.In response to climate change, we actively implement the China’s “dual carbon” goals:
Green manufacturing: Recognized as a National Green Factory , we completed our ?rstphotovoltaic installation, generating 499,900 kWh of solar power during the year. Ourdry gas seal product completed the “cradle-to-gate” carbon footprint assessment andcerti?cation, setting a benchmark for low-carbon development in the industry.Technological empowerment: R&D investment represented approximately 5% ofoperating revenue, and obtained 19 new authorized patents. Our diamond-coatedseals entered pilot production and mass manufacturing, delivering enhanced sealdurability and reliability. We launched the next-generation intelligent seal monitoringand health management system to improve predictive maintenance for critical equip-ment components. Additionally, our supply to CCUS (carbon capture, utilization, andstorage) projects supports our customers in achieving energy savings and emissionreductions.
About SNS
The predecessor of Sinoseal Holding Co., Ltd., theSealing Technology Research Department ofSichuan Provincial Machinery Research & DesignInstitute founded in 1978 is one of the earliestinstitutes in China to carry out sealing technologyresearch. The Company is the only A-share listedcompany in the domestic mechanical sealingindustry (stock code: 300470). The main productsof SNS include mechanical seals, dry gas seals,sealing auxiliary (control) systems, rotary jetpumps, rubber and plastic seals, special valves,guide rings and other products, and tailor-madesolutions under di?erent equipment and operat-ing conditions, which can be widely used inpetrochemical, coal chemical, oil and gastransportation, electric power, constructionmachinery, mining machinery and other ?elds.The Company's products and services are sold toSoutheast Asia, Central Asia, Central Africa andother regions. As of the end of 2024, the Compa-ny owns six holding subsidiaries (secondarysubsidiaries included), including UTEC (Suzhou)Sealing Solutions Co., Ltd., Dalian Sun Seals Ltd.,Sichuan Sunny Seal Co., Ltd., Zigong New DipperValve Co.,Ltd., ZM Investment GmbH, and Krüger& Sohn GmbH. The Company also has equities intwo enterprises and Sichuan Zhenxing ZhongmiEquity Investment Centre (Limited Partnership).
Company Overview
Organizational structure of SNS
General Meeting of Shareholders
Audit and SupervisionDepartment
Board of SupervisorsAudit CommitteeStrategic Developmentand ESG CommitteeRemuneration andAppraisal CommitteeNomination CommitteeBoard of Directors’ O?ce
ZM Investment GmbHSichuan Zhenxing Zhongmi Equity InvestmentCentre (Limited Partnership)Chengdu CHG Robots & Intelligent EquipmentInstitute Co.,Ltd.
Board of DirectorsSNS
Kr?ger & Sohn GmbH
Sales DepartmentInternational Business Department Rotary Jet Pump Business DepartmentTechnology DepartmentProduction Management DepartmentProcurement Department Manufacturing Department IManufacturing Department IIAssembly and Service DepartmentQuality Assurance Department Safety and Equipment Management DepartmentR&D Management DepartmentInformation DepartmentAdministration DepartmentFinance DepartmentSun SealsUTECSunny Seal NDIV
2024 Environmental, Social,and Governance Report
IntroductionAppendixBuild a RobustOperation Foundation
Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
In July 2024, the Company became theactual controller of Krüger SohnGmbH and took the ?rst step in itsinternational development.
Globalization strategyIn 1978, the predecessor of the Compa-ny, the Sealing Technology ResearchDepartment of Sichuan ProvincialMachinery Research & Design Institute,was established.
Start-up
In September 1993, following thenational policy of reform and openingup, it jointly invested with Japan's NikkiIndustries Co., Ltd. in HiroshimaPrefecture to form “Sichuan Nikki SealCo., Ltd.”, becoming the ?rst Sino-for-eign joint venture science and technol-ogy enterprise in Sichuan Province.
Keep up with the times
In 2016, the Company completed theacquisition of UTEC (Suzhou) SealingSolutions Co., Ltd.In 2018, the Company completed theacquisition of Dalian Sun Seals Ltd.
Capital investment
In December 2019, the Company waso?cially renamed to “Sinoseal HoldingCo., Ltd.”In January 2021, its subsidiary SichuanSangni Machinery Co., Ltd. o?ciallychanged its name to Sichuan Sunny SealCo.,Ltd.
Strategic renamingIn 2009, the Company acquiredJapanese shares becoming a companylimited by shares with its name changedto “Sichuan Sunny Seal Co., Ltd.”In 2010, the Company was restruc-tured into a diversi?ed joint-stockenterprise controlled by a state-ownedcompany.
Structural reform
On June 12, 2015, the Company waslisted on the Growth EnterpriseMarket of the Shenzhen StockExchange, becoming the only A-sharelisted company in China's mechanicalseal industry.
Reform and listing
In February 2021, the Companycompleted the acquisition of ZigongNew Dipper Valve Co.,Ltd. and enteredthe ?eld of high-end special valves.
Strategic integration
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IntroductionAppendixBuild a RobustOperation Foundation
Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
With focuses on the research, design, production and manufacture of mechanical seals, SNS has formed a productportfolio with various mechanical seals and their auxiliary (control) systems, special valves, and rubber-plastic sealsas the core. The Company can design, develop and manufacture various types of mechanical seals, dry gas seals,seal auxiliary (control) systems, rubber-plastic seals, rotary jet pumps, special valves and guide rings with stablequality and reliable performance according to customers’ needs. Meanwhile, we provide a full range of servicessuch as technical consultation, solving on-site problems, and technical training.
The main products include mechanical seals, dry gas seals, and sealingauxiliary (control) systemsand we specialise in delivering custom-engi-neered mechanical seal solutions for varied equipment and operationalparameters across petrochemical, coal chemical, oil & gas transporta-tion, and nuclear power industries.SNS is also engaged in the design,research and development, manufacturing and sales of rotary jet pumps.
Business OverviewEnsure safety and protect theenvironmentCorporate Mission
SNS, Sunny Seal, Sun Seals
UTEC focuses on the design, research and development, production andsales of rubber and plastic seals and mold-free special turning equip-ment. It has outstanding leading advantages in sealing material proper-ties and mold-free processing technology for large seals, which is widelyused in construction machinery, mining machinery and other industries.
UTEC
NDIV focuses on the R&D and manufacture of special valves for specialworking conditions, special functions and special ?elds, with axial ?owcheck valves, forced sealing ball valves, compressor anti-surge valves, pipeclearance valves, water strike pressure relief valves and other products asthe core. These products are mainly used in oil and gas transportation,petrochemical industry, water transportation and diversion industries.
NDIV
It mainly produces resin laminates such as pipes, pro?les, bars and plates,as well as guide rings and other products, which are widely used inconstruction machinery and electrical ?elds.KS GmbH
Corporate culture
To be the world-class ?uid controlequipment providerCorporate Vision
Craft quality with ingenuity, Pioneerextraordinary through innovation
Corporate Slogan
Establish a comprehensive sealingindustry ecosystem
Strategic Goal
Create value and pursue excellenceCore Values
Responsibility, Innovation, Openness,
and Vision
Corporate Spirit
Technology-Driven Market Leadership,
Service-Backed Customer Loyalty,
Quality-De?ned Brand Excellence
Business Philosophy
Integrity, High quality, Service
excellence, Continuous improvement
Quality Policy
Environmental Stewardship, Occupa-
tional Health, Operational Safety,
Regulatory ComplianceHSE Policy
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Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
Highlights of 2024
List of Awards of SNS Holding in 2024
Green DevelopmentIssuerAwardAwardedEntity
NationalGreenFactoryDesignationSichuanProvincialGreenFactoryDesignationIncluded inthe“Zero-WasteCity Cells” listat theChengdumunicipallevel and wonthe title of“Zero-WasteFactory”OutstandingAchievementAward forEnergySaving andEmissionsReductionSunnySeal
Ministry ofIndustry andInformationTechnologyof thePeople’sRepublic ofChinaDepartmentof EconomyandInformationTechnologyof SichuanProvinceO?ce ofChengduEcologicalandEnvironmen-tal Protec-tionCommissionSichuanTianfu NewDistrictMeishanGeneralLaborUnion
IssuerAwardAwardedEntityCollaborative Value Co-creationSinopec YangziPetrochemical Co., LtdShenghongPetrochemicalGulei PetrochemicalLuxi ChemicalFuhai GroupXi'an Pump & ValvePlant Co., LtdXi'an Pump & ValvePlant Co., LtdDeep Blue PumpSulzerLiaoning HengxingPumpsExxon MobilTo Betterliepin.comHRSSB of WuhouDistrict, ChengduThe o?ce of the LeadingGroup for supportingFamous and ExcellentProducts in Chengdu,Chengdu MunicipalBureau of Economic andInformation Technology,The Chengdu NewEconomic DevelopmentCommissionChina Coal MachineryIndustry Association
2021-2022 Outstanding Supplier2024 Outstanding Supplier2023 Outstanding SupplierStrategic partners2024 Excellent Quality Award2023 Best Service Award2024 Service CommitmentExcellence AwardStrategic partners (2023-2024)2023 Best Quality Award2023 Outstanding SupplierExcellent Supplier Recognition-AwardOutstanding Supplier2024 Sichuan ExtraordinaryEmployer AwardIndustry Anchor EnterpriseEmployment Hub in WuhouDistrictChengdu Exemplary IndustrialProduct -Dry Gas Sealing and ItsControl System (S Type)Chengdu Exemplary IndustrialProduct -Hydrostatic MechanicalSeal for Nuclear Main PumpLeading Enterprise in China's CoalMachinery Industry (2022-2023)High-quality Brand Products ofChina Coal Machinery IndustryDesignated production unit ofspecial equipment and accesso-ries for coal mines in China
NDIVUTEC
UTEC
2024 Exemplary Case for PublicCompany Board of Directors2024 Best Practice Case forPublic Company Boards2023 Best Practice Case forPublic Company InvestorRelations ManagementThe Golden Bull Award forPublic Companies-2023 GoldenInformation Disclosure Award2023-2024 Information Disclo-sure Rating "A" amongChiNext-listed Companies
Sichuan ProvincialCorporate HeadquartersDesignation
Chengdu Intelligent Manufactur-ing Hub (SNS Smart Factory)2023 Outstanding TaxContributor in Wuhou District2023 Innovation ExcellencePlatform in Wuhou District2023 Top 100 InnovativeEnterprise in Wuhou District2023 Top 100 High-growthCompanie in Wuhou District2023 Advanced MaterialsIndustry Leader in WuhouDistrict2023 Top 100 ContributingEnterprise in Wuhou District
2024 Demonstration SmartWorkshop in SuzhouIndustrial Park
IssuerAwardAwardedEntity
Company Operations
Sichuan ProvincialDevelopment and ReformCommission,Department of Economicand Information Technolo-gy of Sichuan Province,Science& TechnologyDepartment of SichuanProvince,Administration for MarketRegulation of SichuanProvince,Sichuan Provincial Bureauof Economic CooperationSuzhou IndustrialPark EconomicDevelopmentCommission
China Association forPublic CompaniesChina Association forPublic CompaniesChina SecuritiesJournalShenzhen StockExchangeChengdu MunicipalBureau of Economic andInformation Technology
People’s Governmentof Wuhou District
UTEC
SNS
SNSSNSSNS
SNS
SNS
SNS
SNSSNSSNSSNSSNSSNS
SNSSNS
SNS
SNS
SNSSNSSNSSNS
SNS
SNS
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Product & Service Accreditation and Recognition of SNS
Sinopec Yangzi Petrochemical2021-2022 Outstanding Supplier
Shenghong Petrochemical2024 Outstanding Supplier
Gulei Petrochemical2023 Outstanding Supplier
Luxi ChemicalStrategic Partner
Fuhai Group2024 Excellent Quality Award
Deep Blue PumpStrategic Partner (2023-2024)
Sulzer2023 Best Quality Award
Xi'an Pump & Valve Plant2023 Best Service Award
Xi'an Pump & Valve Plant2024 Service Commitment Excellence
Exxon MobilExcellent Supplier Recognition Award
China Coal Machinery Industry
Association“High-quality Brand Product”
Accreditation
China Coal Machinery Industry
AssociationLeading Enterprise in China's Coal
Machinery Industry (2022-2023)
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2024 ESG Performance Highlights of SNS
EnvironmentalSocialGovernance
As of the end of 2024:
SNS, Sun Seals, UTEC, and NDIV have obtained ISO14001 environmental management system certi?ca-tionIn 2024:
SNS was awarded the titles of “National Green Factory"and "Sichuan Provincial Green Factory"A dry gas seal product completed the "Cradle-to-Gate"carbon footprint assessment and certi?cationInvested RMB1.3068 million in environmental protec-tion throughout the yearUtilised 499,900 kWh of photovoltaic power genera-tion throughout the yearSelected into the "Zero-Waste City Cells" list at themunicipal level in Chengdu, and awarded the title of"Zero-Waste Factory"
As of the end of 2024:
SNS, Sun Seals, UTEC, and NDIV have obtained ISO45001 occupational health and safety managementsystem certi?cationSNS, Sun Seals, UTEC, and NDIV have obtained ISO9001 quality management system certi?cationA total of 324 national patents have been authorised,including 48 invention patents
In 2024:
O?ered 271 training projects for all employees, with atotal investment of RMB434,900Provided academic and quali?cation improvementsupport for 139 employees, with a total investment ofRMB334,9000 signi?cant safety accident0 occupational disease incidentR&D investment totaled RMB75.772 million
In 2024:
Established a four-level ESG governance structureAll employees signed the Integrity Commitment LetterAll important, critical and sensitive personnel signedthe Integrity Risk Prevention and Control List0 incidents of business ethics violations
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Ensuring Employee Rightsand Development
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ESG Governance Structure
Assessment of Material Topics
Type of StakeholderTopic of ConcernCommunication Method
Governmentaland regulatoryagencies
Communication meetingsSupervision and inspectionInformation disclosure
Shareholdersand investors
General Meeting of ShareholdersEarnings Conference CallInformation disclosureConference call, email and onlinecommunication platform
Customers
Service ticketCustomer return visitsSocial media platformsConduct customer satisfactionsurvey
ESG Governance Structure of SNS
Board ofDirectors
As the supreme decision-making body on ESG matters, Board ofDirectors reviews the documents submitted by the Company, receivesmanagement brie?ngs, oversees executive operations, and formulatesstrategic principles for sustainable development.
DepartmentExecute and institutionalize ESG initiatives across operations
StrategicDevelopmentand ESGCommittee
Responsible for researching and advising on the Company's medium-and long-term development strategy and major investment decisions,formulating ESG management implementation plans, identifying ESGrisks, and reporting work progress to the Board of Directors
ExecutiveManagement
Shall determine the speci?c implementation plan of the Company'ssustainable development based on the basic principles of sustainabledevelopment formulated by the Board of Directors, and superviseand evaluate the implementation of various departments.
ESG Management
Information disclosureCompany compliantoperationPromotion ofeconomic developmentEnvironmental protection
Product and servicequalityIntegrity in operation
Company compliantoperationPerformance anddevelopment planning
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In 2024, SNS released the Working System of the Strategic Development and ESG Committee ofthe Board. The Company further upgraded the Strategic Development Committee of theBoard of Directors to the “Strategic Development and ESG Committee” to lay the foundationfor the Company's ESG strategic planning and deployment, and gradually build a four-levelESG governance structure:
SNS listens to and collects the opinions of various stakeholders, formulates relevant systemdocuments such as the Investor Relations Management System, and receives consultationsand suggestions from stakeholders through telephone calls, emails, o?cial websites,performance brie?ngs, etc.
In order to determine the key issues for the Company's sustainable development, this year, weconducted research on important issues for internal and external stakeholders.
The Process of Identifying and Con?rming Material Topics
Mutual bene?ts and win-winsituationIntegrity in operation
Supplier integrity agreementSupplier evaluationSupplier training
Social contributionEnvironmental protectionIndustry developmentBusiness performanceand development planningInformation disclosureCompany compliant operationEnvironmental protectionEmployee rights and interestsBusiness performanceand development planning
News conferencesSocial media platforms
Industry exhibitionsTechnology exchangemeetingsIndustry standard drafting
Equality and DiversityHuman capital developmentOccupational health & safetyEmployee rights and interestsRemuneration and bene?ts
Labour unionPerformance evaluationsEmployee satisfaction surveyEmployee representatives'meeting
Stakeholders such asgovernments andregulatory agencies,customers, employees,partners, industryassociations/chamberof commerce organiza-tions, and the mediawere invited toparticipate in theassessment of theimpact materiality ofESG issues through anonline questionnaire. Atotal of 887 responseswere collectedShareholders, investorsand internal manage-ment were invited toconduct a qualitativeassessment of themateriality of each ESGissue from the dimen-sion of the Company'sfuture sustainablebusiness development.External experts werealso invited to discussESG issues of ?nancialmateriality
Analysed the onlinequestionnaire data,and identi?ed themateriality of eachESG issue and makea ranking,combined with theinternal evaluationresults
Identi?cation of topics
Research ofMaterial Topics
Con?rmation ofMateriality IssuesType of StakeholderTopic of ConcernCommunication Method
Employees
Partners(suppliers, etc.)
Industry Associations/Chamber of Commerce
Organizations
Media
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International disclo-sure standards,national macropolicies, industry statusquo and the Compa-ny's development arecomprehensivelyconsidered to fullyidentify the sustainabledevelopment issuesthat are most closelyrelated to the Compa-ny's operations. Thereferenced internation-al and domesticstandard frameworksincludeGRI StandardsSustainable Develop-ment Goals of theUnited Nations (UNSDGs)Self-regulatory Guide-lines for Listed Compa-nies No. 17-SustainableDevelopment Report(Trial Implementation)by Shenzhen StockExchange
Based on the research results, we have identi?ed the materiality ofvarious sustainable development issues as follows1:
Matrix of material topics of SNS
Financial Materiality
Impact Materiality
Community welfare
Biodiversity protection
Water resource utilization
Energy utilizationEqual opportunity and diverse employmentSuppliermanagementEnvironmentalcompliancemanagement
Cybersecurityand data security
Occupational health & safety
Technological innovationEmployee rights,interests anddevelopment
Product qualityand safety
Greenhouse gas emissionsand climate changeStakeholdercommunicationWaste management
Pollutant emissionsBusiness ethics
Corporategovernance
Compliance and risk management
Customerservice andcommunicationCirculareconomy
SocialEnvironmentalGovernance
1Topics with high materiality are marked in bold.
EnvironmentalSocialGovernanceGreenhouse gasemissions andclimate changePollutantemissionsEnergyutilizationWastemanagementCirculareconomyWater resourceutilizationEnvironmentalcompliancemanagementBiodiversityprotection
Product qualityand safetyEmployee rights,interests anddevelopmentOccupationalhealth & safetyTechnologicalinnovationEqual opportuni-ty and diverseemploymentCommunitywelfareSuppliermanagementCybersecurityand datasecurityCustomerservice andcommunication
CorporategovernanceCompliance andrisk managementBusiness ethicsStakeholdercommunication
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In today's complex and changeable business environ-ment, corporate governance and compliance manage-ment are the key cornerstones for enterprises toachieve sustainable development. SNS has built arobust, multi-dimensional management system ground-ed in a scienti?c governance structure and guided bystrict business ethics. Further strengthened by a soundcompliance and risk management framework, theCompany also prioritises comprehensive intellectualproperty protection and advanced network informationsecurity as key pillars of its operations.Material Topics Covered in this Chapter:
Business ethicsCompliance and risk management
Stakeholder communicationCybersecurity and data security
Corporate governance
Building a RobustOperationFoundation
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Adhering rigorously to the laws and regulations such as the Company Law of thePeople's Republic of China, the Securities Law of the People's Republic of China, and theCode of Corporate Governance for Listed Companies in China, SNS has established agovernance structure composed of Shareholders' General Meetings, the Board ofDirectors and special committees, the Board of Supervisors and senior manage-ment to ensure that the authority, decision-making bodies, supervisory bodies andmanagement have clear delineation of authority and responsibilities.The Board of Directors of the Company consists of four special committees: theAudit Committee, the Remuneration and Appraisal Committee, the NominationCommittee, and the Strategic Development and ESG Committee. They provideprofessional support for scienti?c decision-making. Each special committeee?ectively performs its duties and plays its role in accordance with the Articles ofAssociation and the committee's work system to ensure the stable and sound opera-tion of the Company.
SNS highly values the diversity and independence of the backgrounds of board members, andcomprehensively considers multiple factors such as their educational background, professional?eld, ability and experience when selecting directors. The current members of the Board ofDirectors include experienced management personnel, technical experts, academic scholars andother di?erent backgrounds, covering professional ?elds such as machinery and equipment,?nancial accounting, and asset evaluation. They are capable of providing multi-faceted perspectivesand suggestions for the Company's decision-making. The Company has formulated and implement-ed management documents such as the Independent Directors Work System, the IndependentDirectors Special Meeting System, and the Independent Directors Annual Report Work System to ensurethat independent directors make decisions from an objective standpoint while serving andperforming their duties.By the end of this reporting period, the sixth Board of Directors of SNS consisted of 9 members,including 1 female director and 3 independent directors.During the reporting period, the Company held 3 general meetings of shareholders, 6 meetings ofthe Board of Directors, 6 meetings of the Board of Supervisors, and 13 meetings of specialisedcommittees.
SNS places great importance on the protection of shareholders’ rights and interests. The Companyhas formulated and implemented a series of compliance policies for the securities market, includingthe Investor Relations Management Policy, the Information Disclosure Policy, and the Related PartyTransactions Policy. Adhering to the principle of “returning value to and safeguarding investors,” theCompany ensures that all information disclosures are truthful, accurate, and complete. We activelymaintain investor relations, attach importance to shareholder returns, and adhere to a consistentcash dividend distribution.
Company organisational chart
Board of Supervisors
Shareholders'General Meetings
Board ofDirectors
Management
Audit Committee
Strategic Development
and ESG CommitteeRemuneration andAppraisal Committee
Nomination Committee
Governance Structure
Protection of Shareholders’ Rights and Interests
Corporate Governance
Key PerformanceThe Company has received an A rating for information disclosure among ChiNext-listedCompanies of the Shenzhen Stock Exchange for ?ve consecutive years.Since its listing, the Company has consistently paid annual cash dividends, with cumulativedistributions reachingRMB 711 million. During FY2024, a pro?t distribution of RMB 203million was executed.
Operating in strict compliance with the Anti-Unfair Competition Law of the People's Republicof China, Anti-monopoly Law of the People's Republic of China and other laws and regula-tions, SNS follows the principle of honest management, and resolutely resists corruptionand bribery and other business ethics violations. SNS has established the EmployeeIntegrity Policy, which outlines the fundamental requirements and code of conduct forethical business practices. All employees are required to sign the Integrity CommitmentLetter, pledging to uphold compliance with laws, ful?ll duties with diligence, maintainpersonal integrity, and adhere to moral principles, ensuring honest and fair businessconduct while abstaining from any form of corrupt activities.To reinforce anti-corruption and anti-bribery e?orts, the Company conducts annualcomprehensive and systematic integrity risk assessments, covering both SNS and allsubsidiaries. The ?ndings are compiled into the Integrity Risk Prevention and Control List.Employees in critical, high-risk, or sensitive positions are required to review and acknowl-edge the Integrity Risk Control List, ensuring they fully understand potential risks and keymitigation measures. This strengthens risk awareness and self-discipline among keypersonnel. In 2024, the Company conducted a comprehensive assessment integratingfactors such as ethical awareness, job responsibilities, business processes, institutionalmechanisms, and external environment, identifying a total of two Level 1 integritypositions, seven Level 2 integrity positions, and 26 Level 3 integrity positions, with target-ed communication and integrity education programs successfully completed for allpersonnel in these identi?ed roles.The Company places special emphasis on preventing corruption in procurementprocesses by implementing stringent control measures. On the one hand, the Companyrequires key suppliers to sign a Procurement Integrity Agreement that explicitly prohibitsimproper conduct such as commercial bribery. Furthermore, the Audit and SupervisionDepartment conducts annual integrity-themed meetings speci?cally for newly addedmajor suppliers to reinforce the Company's procurement code of conduct and ethicalstandards. On the other hand, the Company signed a Procurement Integrity CommitmentLetter with employees of the procurement department to standardise and superviseprocurement behaviour and promote fair and honest commercial transactions.
Business Ethics
Besides, the Company encourages both internal and external stakeholders to jointly super-vise the implementation of integrity policies by reporting any improper business conductsuch as bribery or corruption. Multiple reporting channels are available, including the OAsystem, executive reception days. The Audit and Supervision Department is responsible forinvestigating the authenticity of reported cases and will complete the veri?cation process andprovide responses within ?ve working days. The Company places high importance onwhistleblower protection, strictly maintaining the con?dentiality of whistleblowers' identitiesand provided information. Veri?ed reports may qualify for rewards based on the circum-stances and signi?cance of the case.
In July 2024, SNS organised Party members and cadres to participate in the Integri-ty Culture Experience Day with the theme “Building Integrity and Clean Wuhou”.They visited the Chengdu Wuhou Memorial Temple Museum, a provincial-levelbase for integrity culture, to study and promote the spirit of clean governance.Wuhou Memorial Temple is one of the ?rst provincial-level bases for integrityculture in Sichuan Province. It not only embodies rich historical and culturalheritage but also serves as a signi?cant venue for integrity education.During theevent, Party members followed the “Integrity Culture and Education Line” throughthe temple grounds. While immersing themselves in the history of the Shu and HanDynasties, they deeply re?ected on the spirit of “loyalty, integrity, responsibility,and due diligence” exempli?ed by historical ?gures, thereby enhancing theirawareness and commitment to practising integrity in their professional roles.
SNS Organised the “Building Integrity and Clean Wuhou” IntegrityCulture Experience Day
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100% of employees signed the Integrity Commitment Letter100% of personnel in critical, key, and sensitive positions signed the Integrity
Risk Prevention and Control List0 incidents of business ethics violations
Key Performance
Compliance and Risk Management
SNS proactively monitors and rigorously complies with applicable laws, regulations, andregulatory guidelines. The Company conducts comprehensive operational alignment withthe latest supervisory mandates, systematically identifying and remediating latent compli-ance exposures. In terms of information disclosure and investor relations management, theCompany conducts communication through telephone, e-mail, interactive platforms, etc. inaccordance with the requirements of the Rules for the Listing of Stocks on the GrowthEnterprise Market of the Shenzhen Stock Exchange, Measures for the Management of Informa-tion Disclosure of Listed Companies, Investor Relations Management System, etc., to e?ectivelyful?ll its information disclosure obligations and protect shareholders' rights and interests.In production and operations, the Company engages professional third-party legal advisorsto continuously monitor regulatory developments and provide expert guidance for compli-ance implementation. During the reporting period, particular emphasis was placed onensuring the compliance of overseas operations, e?ectively mitigating risks associated withrapidly expanding international business segments.We prioritise the promotion of compliance awareness and cultural development across theentire organisation and incorporate compliance requirements as mandatory in all opera-tional meetings. Through consistent emphasis and regular communication, we continuous-ly strengthen employees' compliance awareness. In 2024, the Company conducted special-ised training on ?nancial and tax compliance, the production management system, andsupervision of listed companies to help di?erent departments keep abreast of the latestcompliance changes closely related to their work functions, and strengthen their under-standing and practical ability to meet compliance requirements.
Compliant Operation
SNS is committed to establishing a robust risk management system that clearly designatesresponsible functional departments for risk prevention and control across key areas includ-ing ?nance, R&D, quality, safety, and environmental protection. The Company regularlyconducts both internal and external audits to evaluate the e?ectiveness of its risk controlmeasures.Within the Company, functional departments carry out the identi?cation of risk factors inrelevant ?elds including environment, quality, health and safety, and formulate responsemeasures in accordance with departmental systems and procedural documents such as theComprehensive Management Manual. During the annual internal audit process, the Companyestablishes dedicated audit teams comprising both internal auditors and department heads.These teams employ multiple veri?cation methods including face-to-face interviews, recordsampling, and document reviews to monitor the implementation of risk mitigationmeasures, evaluate the e?ectiveness of risk responses, and identify process optimisationopportunities for any ?ndings detected.Meanwhile, in compliance with the Basic Standards for Enterprise Internal Control and otherregulatory requirements, the Company conducts annual internal audit inspections of itssubsidiary companies on a regular basis. No material risks or compliance violations wereidenti?ed during these audits. During the reporting period, the Company engaged anindependent third-party ?rm to perform an internal control audit, which focused on identify-ing risk points and control de?ciencies. According to the Internal Control Audit Report issuedby ShineWing Certi?ed Public Accountants (Special General Partnership), the Companymaintained e?ective internal control over ?nancial reporting in all material respects as of 31December 2024, in accordance with the Basic Standards for Enterprise Internal Control andrelated regulations.
Risk Management
SNS is well aware that compliance governance and risk prevention and control are founda-tions to achieve stability and prosperity. Adhering to the bottom line of compliance inaccordance with the law, the Company improves comprehensive risk management,e?ectively identi?es, evaluates and responds to potential risks in all aspects of productionand operation, and continuously strengthens the internal control system to ensure theCompany's business development.
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Intellectual Property Protection
Sign non-disclosure agreements with R&D personnel, strictly protecttechnical information, and prevent the leakage or abuse of technicalachievements at an early stage
Categorised protection strategies for innovative achievements
Key PerformanceAs of the end of 2024,A total of324 national patents have been authorised, including 48 invention patents;
A total of7 computer software copyright registration certi?cates have been authorised;
A total of18 trademark registration certi?cates have been authorised.
Exploratory research on frontier technologies
Adopt the dual protection method of "patent + technology isolation" toensure that the technology stays exclusive and competitive in futureapplicationsReserved technical achievements that have not been made public yet
Actively apply for patents, ensure the exclusivity and market advantag-es of innovative technologies through legal means, and prevent thetechnology from being imitated or infringed upon by othersApplied innovative achievements
SNS prioritises the protection of innovation achievements and intellectual property(IP) management. The Company has implemented a categorised protection strategyfor innovation outcomes, while actively monitoring policy updates, industry trends,and latest competitor activities to mitigate both internal and external infringementrisks. The Company has designated dedicated IP management personnel. Their workis governed by comprehensive regulatory frameworks including the Intellectual Proper-ty Management Policy, the Trademark Management Regulations, and the AdministrativeMeasures for Patents and Software Copyrights, which standardise all aspects of IPregistration, maintenance, administration, and protection.The Company attachesgreat importance to intellectual property protection and patent life cycle manage-ment: in the early stage of R&D projects or new product development, the Companyconducts in-depth market research and patent searches, without infringing upon theintellectual property rights of others; in the patent application and maintenance stage,the Company engages professional external institutions to provide guidance andmaintain the Company's intangible assets.At the same time, the Company organises specialised intellectual property trainingevery year for employees in key positions such as R&D personnel, enabling them tostay updated on the latest developments in laws and regulations such as the PatentLaw of the People's Republic of China and the Copyright Law of the People's Republic ofChina, to enhance their awareness and ability to protect intellectual property.
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Cybersecurity and Information Security
Automated stereoscopic warehouse of SNS
SNS has proactively responded to the digital transformation era by implementing its "SmartSNS 123" strategy since 2019. Guided by the framework of "One Objective, Two Creations,and Three Platforms," the Company has actively adopted digital, networked, and intelligentproduction tools. To date, we have implemented multiple electronic information systemsacross collaborative management, R&D, and smart manufacturing sectors.The Company uses a Product Lifecycle Management (PLM) system as its core platform. Itintegrates 3D modelling, CNC programming, process planning, and simulation tools toenhance manufacturing modularity, standardization, and serialization. This improves bothdesign quality and e?ciency. Smart logistics solutions have also been adopted, includingautomated containers, automated stereoscopic warehouse, and AGVs (Automated GuidedVehicles). These ensure e?cient material storage and precise transportation. Additionally,the Company has built China’s ?rst ?exible production line for mechanical seals. Thisinnovation enables automated production, further strengthening its market competitive-ness.After years of development, the Company's digital transformation has delivered outstand-ing results, signi?cantly enhancing market competitiveness. By the end of this reportingperiod, SNS has been recognised as a "Chengdu Smart Factory" while its subsidiary UTEChas been certi?ed as a "Demonstration Smart Workshop in Suzhou Industrial Park."
Digital construction
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Daily management measures for information security protection
Disaster recoverymechanism
A "Two Locations, Three Centres" disaster recoveryframework has been established to e?ectively respondto emergencies such as natural disasters, hardwarefailures, and cyberattacks, ensuring data integrity andbusiness continuity
Emergency drills
Based on the importance of the system, quarterlyspecial and annual comprehensive emergency drillplans are madeA company-wide cybersecurity emergency drill is organ-ised annually to simulate real-world scenarios such ashacking and data leakage. It aims to enhance theCompany's emergency response capabilities
Internalinspection
Regular checks are performed on system performance,security vulnerabilities, and data backup integrity. Thisensures all equipment and systems maintain optimaloperation
Monitoring& early warning
The external professional institution is introduced toprovide 24-hour monitoring and security protection, soas to detect anomalies timely and issue early warningRegular simulated attack and defense drills are conduct-ed, in a bid to identify potential security vulnerabilities,and put forward targeted improvement suggestions
SNS strictly complies with the Cybersecurity Law of the People's Republic of China and relatedregulations. The Company has established internal policies including the Information SystemSecurity Management Policy and the Network Infrastructure Security Standards to continuouslystrengthen data protection and information security across all operations, safeguarding theprivacy and sensitive data of employees, clients, and stakeholders. The Company's informa-tion management department is responsible for uni?ed governance of access controls acrossapplication systems and network infrastructure. It regularly reviews and con?rms userpermissions, strictly controlling access to critical data and information.The Company has de?ned the basic security policy requirements, including prohibitingcross-departmental computer access, restricting the installation of non-work-relatedsoftware, separating the o?ce network from residential or personal network environments,and backup mechanisms for critical data. All administrative passwords for applicationsystems and network equipment must be changed at least annually. Password strength mustcomply with the Company’s security standards. The information management departmentconducts regular inspections and emergency drills to ensure and oversee the implementationof security measures.Apart from that, cybersecurity training is organised and carried out company-wide every year,covering the latest regulatory mandates, common network attack vectors and preventivemeasures, data protection methods, etc. These activities aim to strengthen the Company'sinternal information security awareness and capabilities.
Information Security Management
In December 2024, the Company launched annual cybersecurity training, coveringall employees of SNS and its holding subsidiaries. This training focused on comput-er anti-virus knowledge, especially for the increasingly rampant mining viruses. Itprovided an in-depth introduction by combining theory with practice, andexplained the characteristics, hazards, daily monitoring and prevention of viruses,and responding measures after computers attacked by viruses. Through profes-sional knowledge popularisation and operation guidance, this training hasstrengthened employees' awareness of cybersecurity and built a strong line ofdefense for the Company's information security.
2024 Cybersecurity Training of SNS
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SNS practises the concept of green development, andextensively implements energy-saving, emission reduc-tion and resource recycling measures in the productionand operation process. By continuously empoweringand improving the level of green manufacturing, theCompany contributes to the realization of a win-winsituation of economic and environmental bene?ts forthe whole society.
Material Topics Covered in this Chapter:
Energy utilizationPollutant emissions
Circular economyWaste managementWater resource utilizationEnvironmental compliance managementBiodiversity protection
Greenhouse gas emissions and climate change
Practising Greenand Low-carbonActions
Environmental Management System
Based on the ISO 14001 environmental management system standard, SNS regulates the construction of the environ-mental management system in accordance with the actual situation of the Company. All holding subsidiaries have setup an environmental management structure. The general manager serves as the top leader and appoints dedicateddepartments to lead the implementation of the environmental management system, monitor and inspect its e?ective-ness. Each department’s environmental responsibilities are clearly de?ned for daily operations. We have established aseries of internal environmental management regulations, including Environmental Management System, Environmentaland Occupational Health & Safety Operation Control Procedures, and Environmental Pollution Emergency Response Plan.These form a three-level environmental and health & safety governance framework, ensuring full compliance through-out production and operations.
Environmental Management System Certi?cate of SNSEnvironmental Management Document System of SNS
An overall stipulation of environmentalmanagement responsibilities and policies
Specify the operation process of the Compa-ny's management work to ensure that theCompany's operations comply with therequirements of national laws and regulationsInclude operating procedures and operatinginstructions, and provide guidance andrequirements for the speci?c operations ofvarious departments to prevent environmen-tal accidents
Level 1:
Management
manualLevel 2: Procedural
documents andmanagement system
Level 3: Job ?les
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During the reporting period, the Company:
Invested RMB1.3068 million in environmental protection, including the purchaseof energy-saving and water-saving environmental protection equipment, the opera-tion and maintenance of environmental protection facilities, and the organization ofenvironmental protection training.No major environmental emergencies have occurred, and no environmental protec-tion-related violations or administrative penalties have occurred.
Furthermore, SNS actively enhances employees' environmental awareness through targetedtraining and practical exercises. By integrating these initiatives with routine environmentalinspections, we guide our workforce in embedding sustainable development principles intodaily production and operational practices.Based on a sound environmental management system and e?cient management measures,SNS takes the path of “green + intelligent” development and continues to promote theconstruction of green factories. SNS has established a dedicated Green Factory Task Force toimplement comprehensive green manufacturing, guided by ?ve core principles: intensive landuse, clean production, non-toxic materials, waste recycling, and energy decarbonisation. Oure?orts have been recognised through multiple prestigious accolades, including being certi?edas both a Sichuan Provincial Green Factory and a National Green Factory during 2024. Theseachievements demonstrate the steady advancement of SNS's integrated green developmentcapabilities.
We have established the Environmental Factor Identi?cation, Hazard Assessment,and Risk Control Procedures. Annually, we conduct evaluations of environmentalimpact factors and implement targeted control measures and emergency plans.This ensures precise and e?ective environmental management while minimiz-ing risks. We employ a structured environmental analysis framework covering 3timelines, 3 operational states, 12 sources, and 5 impact categories to systemat-ically identify and assess environmental factors across all operations. Eachfactor is assigned to relevant departments to strengthen accountability andenhance corporate environmental risk management.
Environmental risk management of SNS
Environmental factors identi?cation
We conduct both internal and third-party environmental monitoring in fullcompliance with approved Environmental Impact Assessment (EIA) require-ments and discharge permits, and ensure that all monitoring activities, includ-ing frequency, methodologies, and results, meet national regulatorystandards.
Environmental monitoring
We have established the Environmental Pollution Incident Emergency Plan andconduct regular environmental risk assessments, internal emergency resourceaudits, and emergency response drills. These measures ensure all employeesare thoroughly familiar with emergency management protocols for variousenvironmental incidents and possess practical emergency response skills.
Emergency response plan
Key Performance
By the end of this reporting period, SNS, Sun Seals, UTEC, and NDIV haveobtained ISO 14001 environmental management system certi?cationKey Performance
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Energy and Carbon Management
As global climate change intensi?es and resource and environmentalconstraints tighten, e?ective energy and carbon management hasemerged as a critical driver for enabling green, low-carbon transformationacross economic and social systems. SNS is committed to strengtheningmanagement and practice in energy e?ciency improvement, carbonemission control, renewable energy application, and green technologyinnovation. The Company is also actively contributing to society to tackleclimate change and achieve low-carbon transformation.
SNS proactively engages in climate change mitigation and adaptationinitiatives. We conduct comprehensive climate risk assessments, developstrategic response plans, and implement targeted measures to minimisepotential climate-related impacts.
Climate Change Responses
Risk typesDegree of riskRisk description and impactResponse measures
HighExtremeheat
Physical Risks
Extreme heat reduces theoperational e?ciency oftemperature-sensitive equip-ment while simultaneouslyimpairing employee productiv-ity. Additionally, maintainingoptimal temperaturesrequires increased mainte-nance and energy costs forcooling systems.
We implement a Heat EmergencyResponse Plan to enhance equip-ment maintenance and ensureadequate cooling systems. Theplan includes backup powersolutions (generators/solar PV) tomaintain operations duringsummer power restrictions, alongwith heat-prevention suppliesdistribution to protect employeehealth.
Medium-highExtremeprecipitation
Extreme precipitation maycause stagnant water orprecipitation to overwhelmfactories and facilities, causedamage to equipment andfacilities, delay normal produc-tion and incur additionalcapital expenditures.
We establish a Flood PreventionEmergency Plan, complete withessential ?ood control equipmentincluding sandbags and ?oodbarriers. Regular ?ood preventiondrills are conducted to ensurepreparedness.
HighWet trends
The increase in moisturecontent may cause the metalparts of the equipment to rusteasily, a?ect product produc-tion e?ciency and quality, andreduce customer reliability.
We implement enhancedmoisture control measures,including additional dehumidi?ersand absorbent materials, tomaintain dry conditions in produc-tion workshops, equipment, andstorage areas to prevent rustformation. Regular equipmentmaintenance and inspectionsensure timely repair of anycorrosion.
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Market
Future market preferences may increasingly favour low-carbon products, poten-tially rendering non-compliant o?erings obsolete. Meanwhile, climate changecould disrupt supply chains through raw material price volatility, increasedstorage expenses, and transportation cost ?uctuations, exposing businesses tosigni?cant ?nancial pressures.
We improve product production e?ciency and reduce productcarbon footprint; explore market areas in low-carbon industries.
Reputation
Stakeholders such as regulators, investors, potential customers, etc. may havehigher expectations for a company's engagement in climate issues and informa-tion disclosure. If the company fails to participate in a timely and active manner,it may compromise the Company's reputation.
Disclose information such as energy consumption and carbonemissions through ESG reports, annual reports, etc. to ensurethe timeliness, accuracy and transparency of information disclo-sure.
Transition Risks
Risk typesRisk description and impactResponse measuresPolicies andregulations
To mitigate climate change, national carbon emission and energy use policieshave become increasingly stringent. Companies now face rising costs for energye?ciency, emission reduction compliance, and potential litigation risks. Mean-while, summer high-temperature electricity rationing policies may prevent theoperation of energy-intensive equipment such as sintering furnaces, disruptingproduction processes.
We closely monitor evolving climate-related regulations andpolicies while proactively implementing carbon accounting andenergy e?ciency initiatives to strengthen emission manage-ment capabilities. To ensure uninterrupted operations duringsummer power restrictions, we have deployed backup genera-tors and expanded photovoltaic power generation capacity.
Technologies
Outdated, energy-intensive technologies risk being displaced by more e?cientand eco-friendly alternatives, potentially eroding a company's technological edge.Unsuccessful R&D e?orts in new technologies may impose signi?cant ?nancialburdens on enterprises.
We phase out high-energy-consuming technology and equip-ment; strengthen industry cooperation and carry out researchand development of low-carbon environmental protectiontechnologies.
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UTEC has installed the rooftop photovoltaic system
Energy Management Measures
Sunny Seal won the “Outstanding Achievement Award
for Energy Conservation and EmissionReduction” issued by the Meishan Federationof Trade Unions of Tianfu New District, Sichuan Province
Air conditioning is prohibited when outdoor temperatures are below 26°C in summer orabove 16°C in winter;Summer settings must not be lower than 26°C, and winter settings must not exceed 20°C;AC must be turned o? in the o?ce when unoccupied for over 30 minutes.
All o?ce electronics (computers, monitors, water dispensers, lights, printers, AC, etc.) mustbe powered o? after work hours;Production equipment and workshop lighting must be switched o? during extendednon-use periods.
We installed solar streetlights to replace conventional lighting;We deployed rooftop photovoltaic panels to enhance the self-generating capacity ofphotovoltaic, increase the proportion of green energy used, and reduce thermal powerprocurement;KS GmbH purchases 100% carbon-neutral natural gas to reduce carbon emissions causedby energy use.
We optimised the bellows product air-testing processes, signi?cantly reducing electricityand water consumption.
Regulation ofair conditioning
(AC) use
Green energy use
Regulation ofotherenergy-consuming
equipment use
Energy-saving
technologicalupgrades
In strict compliance with The Energy Conservation Law of the People's Republic of China and local energy rules, SNS has formulated an Energy Conservation and Emission Reduction Management Systemto put forward management control, supervision, reward and punishment details for water, electricity, and gas conservation. The system also de?nes the responsibilities of various departmentsin energy management, so as to strengthen supervision and ensure the implementation of energy-saving and carbon-reducing measures, and enhance the Company's energy managementcapabilities. SNS continuously strengthens energy management audits. Each month, the Safety Management Department conducts electricity consumption statistics, compares monthly usagechanges, and analyses reasons for signi?cant variances. Regular inspections are performed on workshop and o?ce building electricity usage to reduce air conditioning use and strictly prohibitequipment idle operation.The Company actively adopts energy-saving technological upgrades and optimises o?ce environments to enhance energy management and reduce overall carbon emissions. In 2024, SNS carriedout the following energy conservation and emission reduction measures:
Energy Saving and Carbon Reduction Actions
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Key Performance
In 2024, SNS and all its subsidiaries set a target to maintain"electricity consumption per RMB10,000 of output value notexceeding the 2023 levels“. While Sunny Seal's energy useincreased signi?cantly due to production expansion, all othersubsidiaries have achieved this goal.
Dry Gas Seal’s Carbon Footprint Certi?cation
In addition, SNS integrates low-carbon considerations throughout the entire product lifecycle by conducting product carbonfootprint veri?cation. The Company has engaged a third-party organization to perform carbon footprint assessments inaccordance with ISO 14067-2018 Greenhouse Gases - Carbon Footprint of Products - Requirements and Guidelines for Quanti?cation.Using a "cradle-to-gate" approach, the veri?cation covers four key stages: raw material production, raw material transportation,product manufacturing, and product transportation. In 2024, the Company completed the product carbon footprint veri?cation ofthe dry gas seal S748L-128, and the result was 562.6 kgCO2 per set. The carbon emissions from the raw material production andproduct manufacturing stages account for more than 80% of the total. In the future, the Company will further expand the productcoverage of carbon footprint management throughout the life cycle, identify high-emission stages and carbon reduction potential,and explore e?ective ways to reduce the environmental impact of the product throughout the life cycle.
Energy ConsumptionDirect energy consumption totaled 88.33 tonnes of standard coal;Indirect energy (purchased electricity) consumption totaled 7,527,471.74kilowatt-hours, of which 499,900 kilowatt-hours was renewable electricity.
Carbon Emissions
Scope 1 carbon emissions: 161.22 tonnes of CO2 equivalent;Scope 2 carbon emissions: 4,038.97 tonnes of CO2 equivalent.
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Recycling silicon carbide transfer box
Resource Conservation and Recycling Measures of SNS
SNS regards e?cient resource utilization as a cornerstone of sustainabledevelopment. Through optimised production processes, innovative technolo-gy applications, and green o?ce initiatives, the Company is committed topromoting resource conservation and circular utilization across its valuechain, achieving a balance between economic value and environmentalbene?ts.In terms of water use, the Company is not engaged in the water-intensiveindustry, thus prioritizing water footprint reduction in auxiliary operations.For instance, we have implemented a water recycling system in our laborato-ries to minimise freshwater consumption, posted water conservation remind-ers at all faucets to reinforce a culture of water-saving, and conducted regularfacility inspections to promptly address leaks or other water waste incidents.In 2024, the Company enhanced compliant water recycling practices in boththe bellows production section and the silicon carbide processing section.The Company has adopted a resource conservation-oriented approach,focusing on water stewardship and proactively advocating water conserva-tion. All subsidiaries are also advancing and implementing water-savinginitiatives.Regarding material consumption, the Company identi?es opportunities forreduction and recycling throughout operations, which spans multiple stagesincluding procurement, manufacturing, packaging, and after-sales services,covering various materials such as packaging supplies, raw materials, processconsumables, and o?ce supplies. These e?orts reduce material consumptionacross the entire production process while improving resource e?ciency.
Resource Utilization
MaterialreplacementUse ?ushing andcotton towel forwiping andgrinding productsinstead of tissueto wipe directly toreduce theamount of paperImprove theprocess ofexpensivematerials,optimise thestructure andformula oflow-cost materialsto control theconsumption ofraw materials
ConsumablerecyclingCollect thepackaging boxes ofthe purchaseditems, and use thepackaging forsecondary use todeliver products ortransship specialproductsRecycling workshopprotective nets,rubber pads, foampadsFor productsdamaged bycustomers and usedproducts, theCompany repairsmore than athousand sets ofseals for usersevery year forsecondary utilization
PaperlessmanufacturingDuring daily o?cework, theCompany providestraining foremployees to raisetheir awareness ofresourceconservation, andadopts paperlesso?ce measuresand digital meansto reduce paperuse whilesimplifying thework?ow
Recycling oftransshipment
equipmentand packages
Centralise thepackaging of goodsaccording tocustomer needs toreduce the use ofpackagingmaterialsUse customisedrecyclable transferpallets instead ofdisposablepackagingmaterials, whichcan greatly reducethe amount ofpackagingmaterials
In 2024, the Company consumed 98,121.31 square meters ofwooden box packaging materials and 14.47 tonnes of plastic packag-
ing materials.
Key Performance
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Emissions and Waste Management
Shot blasting dust collection system and Acid wash wastewater treatment equipment
SNS complies with the Law of the People's Republic of China on the Prevention and Controlof Atmospheric Pollution, the Law of the People's Republic of China on the Prevention andControl of Water Pollution, the Law of the People's Republic of China on the Prevention andControl of Environmental Pollution by Solid Waste, Standard for Pollution Control on Hazard-ous Waste Storage and other laws and regulations and applicable emission standards. Itstrictly adopts compliance emission control measures, continuously optimises processesand technologies, and improves the level of "Three Wastes" governance.SNS and its holding subsidiaries engage quali?ed third-party to conduct environmentalmonitoring every year, tracking our environmental emission levels. The Company is alsosubject to the supervision and testing by environmental regulatory authorities on anirregular basis. During the reporting period, all of the environmental monitoring resultsof SNS and its holding subsidiaries met regulatory requirements.
Treatment methodsType ofemissionsand waste
Waste gas
Solid waste
Emissions and waste treatment methods
Wastewater
SNS and Sunny Seal installed dust and particulate treatmentsystems including bag ?lters, pulse dust collectors, cartridgedust collectors, and welding fume extractors to centrallycollect and process airborne particlesNDIV treated production exhaust gases by subjecting organicemissions to preliminary treatment, triple-stage ?ltration,and activated carbon adsorption, followed by catalyticcombustion for harmless disposal
For hazardous waste, the Company has established andstrictly enforced the Hazardous Waste Management System, tostandardise the complete process from generation andcollection to storage and transportationHazardous waste generation is reduced through enhancedmaterial reuse, with licensed third-party contractors handlingcollection and disposal to ensure compliance
All wastewater treatment and discharge strictly adhere to theIntegrated Wastewater Discharge Standard (GB 8978-1996) andthe discharge permits
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Emissions and Waste Treatment Optimisations in 2024
Silicon carbide dust control equipment and Exhaust gas treatment systems
Honour: SNS was awarded the title of "Zero-Waste Factory" in ChengduIn 2024, Chengdu accelerated its "Zero-Waste City" initiative, expanding"Zero-Waste City Cells" across factories and residential communities. SNSearned a spot on the 2024 "Zero-Waste City Cells" list in Chengdu and receivedthe "Zero-Waste Factory" certi?cation for its green and zero-waste practices.
Optimised treatment measuresType of emissionsand waste
Waste gas
Solid waste
Wastewater
SNS and Sunny Seal modi?ed silicon carbide formulationprocesses, signi?cantly reducing waste gas emissions fromspray drying towers and sintering process. Annual compliancerate for exhaust emissions kept at 100%The Company enforced strict vehicle emission standards,prohibiting vehicles below China V (GB 17691-2005 Phase V)standards from entering facilities. Sun Seals replaced dieselforklifts with electric models to reduce mobile source waste gasemissionsUTEC implemented industrial vacuum systems to separatemetal chips from cutting ?uid for recycling. Sunny Seal and NDIVinstalled oil-water separators to recover cutting ?uid for reuseNDIV and Sun Seals equipped some machining equipment withoil mist collectors to capture oil aerosols during operation. Theseparated cutting ?uid or machine oil can be recycled forproduction, reducing the company's burden of hazardouswaste transportation and disposalSunny Seal upgraded acid wash facilities, improving wastewaterrecovery and puri?cation while minimizing hazardous liquidwaste generationSNS and Sun Seal optimised cutting process to reduce wastesteel scraps and installed dedicated recycling bins for foampadding and waste steel scraps. By doing so, the discard ofconsumables waste was reduced and material circularity wasimprovedSun Seals commissioned new wastewater treatment facilities toincrease water reuse and reduce discharge volumes
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Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
In strict compliance with the Environmental Impact Assessment Law of the People's Republic ofChina, the Regulations on Environmental Protection Management of Construction Projects and otherlaws and regulations, SNS comprehensively conducts environmental impact assessments fornew, modi?ed, and expanded projects involved in production and operation. The Company alsoimplements environmental, health, and safety management measures during the design,construction, and production stages to minimise interference and damage to the local ecosys-tem. In 2024, the Company integrated the concept of green design into the construction plan ofthe new o?ce building of SNS, making full use of natural light and landscape vegetation tocreate a good ecological space. Meanwhile, it improved the building's thermal insulation perfor-mance and resource consumption e?ciency through exterior design and material selection.
In 2024,Produced
539.75 tonnes of non-hazardous waste
Produced 82.94 tonnes of hazardous waste
In 2024,Emitted 0.002 tonnes of nitrogen oxide (NOx)Emitted
0.157 tonnes of non-methane hydrocarbon (NMHC)
In 2024,Discharged24,608.00 cubic meters of industrial wastewaterDischarged35,143.99 cubic meters of domestic wastewaterDischarged 0.984 tonnes of ammonia-nitrogen (NH3-N)Discharged 4.689 tonnes of chemical oxygen demand (COD)Discharged
0.006 tonnes of total phosphorus
Discharged
0.030 tonnes of suspended solids
Key Performance (solid waste)
Key Performance (wastewater)
Key Performance (waste gas)
Ecological Protection
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Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
Regarding employees as the cornerstone of organisa-tional success, SNS is committed to creating an equaland growth-oriented workplace culture. The Companyprotects the legitimate rights and interests of itsemployees, and helps employees achieve professionalgrowth through a diversi?ed training system. Thesee?orts lay a solid talent foundation for the sustainabledevelopment of the Company. The Company also highlyvalues the physical and mental health of its employeesby creating a safe and comfortable working environ-ment, thereby enhancing a profound sense of belongingand holistic well-being across the workforce.Material Topics Covered in this Chapter:
Equal opportunity and diverse employmentOccupational health & safetyEmployee rights, interests and development
Ensuring EmployeeRights andDevelopment
To celebrate International Women'sDay, the Company organised a"Floral Artistry · Brilliant WomenShine" event, inviting all femaleemployees to participate in ?owerarrangement experience to enrichtheir cultural lives. The Company'slabour union representativesdelivered letters of appreciation and?ower baskets, expressing gratitudeand recognition for female employ-ees' hard work and outstandingcontributions across sales, manu-facturing, R&D, and managementroles. The event further fostered acorporate atmosphere of respectand care for women.
Gender compositionAge distribution
76.99%
Male
28.94%
Below 30
58.96%
30-50
23.01%
Female
12.10%
Above 50
SNS strictly practises compliant employment, and advocates a diverse and equalworking environment. The Company protects the well-being of employees in dailymanagement, ensures smooth communication channels, and builds an inclusive andharmonious workplace atmosphere.The Company strictly complies with relevant laws and regulations including the LabourLaw of the People's Republic of China, the Labour Contract Law of the People's Republic ofChina, and the Provisions on the Prohibition of Using Child Labour. Internal documentssuch as the Recruitment, Employment and Termination Management System standardiseemployment requirements and procedures to ensure all labour practices are lawful andcompliant. Additionally, the Company has established a policy on protection of minorsthat strictly prohibits any form of child labour. It forbids forced labour through violence,threats, or illegal restriction of personal freedom, and bans physical punishment, intimi-dation, harassment, abuse, or any discriminatory behavior against employees, therebysafeguarding each employee's fundamental rights and dignity.
Floral artistry experience eventon International Women's Day
SNS extends holiday greetings to
all female employees
Employees structure
Compliant Employment
SNS respects every employee and ensures equal opportunities in employment, training,and career development. The Company values the strengths of employees fromdi?erent genders and backgrounds to foster collaboration and innovation, creating aninclusive, equal, harmonious, and caring workplace environment. The Company hasestablished the Female Employees and Minor Protection Policy to fully protect women'slegal rights during recruitment, workload arrangements, pregnancy, and maternityperiods. It strictly adheres to relevant laws by providing statutory maternity and breast-feeding leave, reasonably adjusting work arrangements for pregnant employees, andensuring their working conditions and well-being. Through various support measures,the Company strengthens assistance for female employees, helping them balancepersonal and professional development. Furthermore, all departments are required toimplement preventive mechanisms to eliminate workplace sexual harassment andgender discrimination, actively building a corporate culture that respects diversity andmutual support, thereby safeguarding female employees' legitimate rights and careerdevelopment opportunities.
Diversity and equality
Basic Rights and Interests
SNS "Floral Artistry · Brilliant Women Shine" InternationalWomen's Day Event
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Creating Harmonious Societywith Shared Success
In 2024,100% of employee bene?ts coverageRMB
58.1 million was invested in employees' welfare expenses.2
In 2024, SNS and Sunny Seal achieved a 93% participation rate in their employ-ee satisfaction survey. The survey covered job understanding, career growth,interdepartmental collaboration, work environment, corporate cultureactivities, and future development directions to comprehensively assess howemployees feel about the Company. Results showed over 90% of employeesfelt a sense of achievement in their work, expressed satisfaction with their workenvironment and occupational health and safety conditions, and activelysupported the Company's energy conservation and emissions reductioninitiatives. Employees also provided numerous suggestions for further enhanc-ing motivation and creativity.
Employee Satisfaction Survey Conducted by SNS and Sunny Seal
SNS values employee feedback and considers democratic communication a key aspect ofcorporate management. The Company has established the Information FeedbackHandling System. We have also provided multiple channels such as OA system submis-sions, monthly executive receptions, and departmental discussion forums to encourageemployees to share opinions and suggestions for operational improvements. The admin-istration department regularly collects and organises feedback, forwarding it to relevantdepartments for resolution. Responsible departments must respond within speci?edtimelines, with reviewed outcomes communicated to the submitter. Employees whosesuggestions are adopted and contribute to management will receive rewards, e?ectivelydriving operational optimization. The Company also holds regular employee representa-tive meetings to protect employees' rights to information and participation and strength-en communication.In 2024, SNS and Sunny Seal conducted employee satisfaction surveys covering careerdevelopment, corporate culture, and work environment. Based on collected feedback,improvement plans were developed to enhance democratic management and enhanceemployees’ sense of belonging.
It also o?ers corporate-speci?c care programs such as commercial insurance, holidaygifts, birthday bene?ts, and bereavement subsidies. The Company prioritises work-lifebalance by organizing diverse recreational activities to strengthen team cohesion andemployee happiness. In 2024, the Company's labour union hosted garden touring, hikingtrips, bon?re evenings, and various sports competitions, helping employees unwind andbuild camaraderie in a relaxed atmosphere, collectively fostering a warm and caringcorporate family.
Employee Communication
SNS continuously develops and optimises a multi-tiered bene?ts system, strictlyimplementing statutory bene?ts including six social insurances and one housingfund, marriage leave, maternity leave, nursing leave, and bereavement leave.Employee Care
Employee bene?ts system of SNS
2The statistical scope includes supplementary benefits such as commercial insurance premiums,cooling and heating subsidies.
Six insurances and one housing fund (medical insurance,supplementary medical insurance, endowmentinsurance, unemployment insurance, work-related injuryinsurance, maternity insurance, housing provident fund)Paid leave (statutory holidays, annual leave, marriageleave, maternity leave, breastfeeding leave, parentalleave, nursing leave, etc.)Comprehensive bene?ts (holiday bene?ts, birthdaybene?ts, home visit leave bene?ts, parents’ meetingleave, cooling and heating subsidies, funeral subsidies,nursing room, ?tness facilities, etc.)Health protection (general health check-ups, employer'sliability insurance, tra?c accident insurance, trade unionmedical mutual assistance insurance)Poverty relief visitsFree workday mealsEmployee dormitories
Statutorybene?ts
Supplementary
bene?ts
Key Performance
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On March 20, 2024, the Labour Union Committee of SNS organised a mental health trainingsession, inviting professional psychotherapists from Sichuan Provincial People's Hospital toconduct training for over 100 voluntarily registered employees. The training focused onemotional management and stress relief in the workplace. Through case studies and interac-tive explanations, employees learned techniques to address common issues and adjust theirmindset. This not only helped employees regulate their mental health but also improvedtheir e?ciency in work and daily life, promoting mutual growth for both the Company and itsemployees.
SNS Mental Health Training Session Themed on "Alleviating WorkplacePressure, Tapping into Inner Strength, and Becoming a Better Self"
SNS has always regarded its employees as its most important partners. In recognition of its outstanding performance in talentmanagement and employee care, SNS was awarded the title of "2024 Sichuan Extraordinary Employer of the Year".
Spring Festival garden touring at SNSTug-of-war Fun parent-child sports events on Children's Day
2024 Sichuan Extraordinary Employer Award
The Company’s labour union is committed to the well-being ofemployees’ children, presenting gifts to all employees’ underagechildren every year on Children’s Day. On June 1, 2024, the LabourUnion Committee of SNS organised a fun-?lled parent-child sportsday, inviting over 30 employee families to participate in games,sports competitions, and various activities. The event also includeda tour of the Company’s exhibition hall for employees’ children,helping them to better understand their parents’ workplace andenhancing employees’ sense of belonging.
“Best Moments, Grow Together” Children’s DayParent-Child Sports Event at SNS
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Career Development
Adhering to a people-oriented approach, SNS iscommitted to building a comprehensive talent develop-ment system. Through well-designed compensationincentives and systematic training programs, theCompany fully supports employee growth, and fostersa highly e?cient, professional, and dynamic team,thereby providing a solid foundation for mutualprogress between the Company and its employees.
SNS upholds the recruitment principles of "openness,fairness, and impartiality", adopting a diversi?ed hiringmodel that combines campus recruitment, publicrecruitment, and internal competitions. The Companyposts job openings through o?cial recruitmentplatforms and other formal channels, precisely attract-ing high-quality talent based on strategic developmentneeds to ensure the Company's sustainable growth.Furthermore, the Company embraces the concept ofcollaborative education by promoting in-depth cooper-ation with leading universities in the industry. By doingso, it aims to establish talent development and techni-cal exchange platforms. We have established a deeppartnership with China University of Petroleum (EastChina) through lectures and joint training bases tointegrate industry and education, inspiring students'enthusiasm for learning, innovation, and practicalskills. We also signed the Agreement on Joint Training ofOutstanding Engineers with Qingdao University ofScience and Technology to further advance indus-try-education integration and expand talent develop-ment channels, cultivating high-quality professionalsfor the industry and driving high-quality industrialdevelopment.
Talent Attraction
On December 4, 2024, UTEC, a subsidiary of SNS, signed a framework agreement with Qingdao University ofScience and Technology to jointly establish the Collaborative Innovation Centre for Rubber and Plastic SealingMaterials Applications. This collaboration aims to deepen the integration of industry, academia, and research,and advance technological innovation and industrial application of rubber and plastic sealing materials. Bothparties engaged in in-depth discussions on technology R&D, talent development, and commercialization ofresearch outcomes, pledging to leverage their respective strengths to explore advancements in polymer materi-als. The Centre will provide advanced and reliable sealing technology solutions for industries such as high-endequipment manufacturing and energy, contributing to high-quality industrial development.
Signing ceremony of the Collaborative Innovation Centre for Rubber and Plastic Sealing Materials Applications
UTEC and Qingdao University of Science and Technology Establish the CollaborativeInnovation Centre for Rubber and Plastic Sealing Materials Applications
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SNS has established standardised performance management and clear career progression paths, o?ering routes for management, technical, workshop, and business roles to ensure employeesfrom di?erent positions and with diverse expertise can ?nd suitable growth opportunities. The Company has implemented the Compensation Management System and the Position and Level Evalua-tion Guidelines to provide a basis for salary distribution, internal job applications, and promotions, encouraging employees to unleash their potential. We evaluated employees' work performancethrough regular performance evaluations, and outstanding performers received salary adjustments and promotions. We have also implemented an across-the-board salary adjustment mecha-nism to maintain competitive compensation. Furthermore, we encourage employees to continuously enhance their skills by o?ering education and professional certi?cation subsidies. Thesubsidy amounts vary based on academic quali?cations and certi?cation levels. In this way, we support employees in obtaining relevant professional quali?cations or further education.SNS has established an equity incentive scheme to share the fruits of corporate development with key employees from both the Company and its subsidiaries, linking corporate value with employ-ee value and driving company growth.
Talent Incentives
The Company successfully completed thevesting of its 2018 Restricted Stock IncentivePlan in 2023 and launched the 2024 RestrictedStock Incentive Plan by the end of 2024. The2024 Plan covers 227 incentive participants,including selected senior management, middleand junior-level managers, and key employeesfrom core teams, with a total of 4.603 millionshares granted.
SNS’s 2024 Restricted Stock Incentive Plan
Senior executiveDeputy director/directorDepartment deputymanager/managerAssistant department
managerDepartmentdeputydirector/directorDepartmentsupervisor
Chief engineerDeputy chief engineerSpecialty deputy chief
engineerChief technical o?cer
Lead engineerReview engineerVeri?cation engineer
Design engineer
Designer
Principal senior sales
engineerSenior sales engineer
Sales engineerSales representativeAssistant salesrepresentative
Section chiefSenior technician
TechnicianSenior workerIntermediate worker
Junior workerOrdinary workerApprentice worker
The career development path of SNS
Managerial careerpath
Technical careerpath
Frontline workshopcareer path
Business careerpath
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On January 26, 2024, SNS held its 2023 Annual Commendation Conference. Over 120 participants attended, includingmanagement personnel and exemplary employees from various divisions. Company executives presented honors tooutstanding individuals, teams, and recipients of the Scienti?c & Technological Progress Award, recognizing their excep-tional performance throughout the past year. The ceremony aimed to inspire all sta? to maintain collaborative dedica-tion and enterprising spirit in the new year, and foster a positive work environment.
2023 SNS Excellence Awards Ceremony
SNS has established a comprehensiveemployee training system governed bypolicy documents such as the EmployeeTraining Management System and thePersonnel Competency & Training ControlProcedures. The Company has takenmultifaceted development approaches,including internal mentoring, externalcoursework, and skills competitions toprovide structured learning and develop-ment opportunities. The Company formu-lates a training plan every year, andcomprehensively determines the trainingstrategy based on the Company's develop-ment, employee needs and other factors.The training includes multiple areas suchas management system requirements, jobexpertise, work practice norms, andproduction safety, covering a completechain of roles from rank and ?le to seniormanagement. These e?orts aim to fosterthe mutual development of both employ-ees and the Company.In addition, the Company conductse?ectiveness evaluation work on wheth-er the training has achieved the expectedgoals. It provides a reference for theoptimization of follow-up training, anduses various methods such as exams,practical exercises, interactive discus-sions, observations, and questionnairesto evaluate and prepare reports. In2024, SNS and Sunny Seal optimised thenew employee orientation by imple-menting biannual training sessions(?rst/second half-year) to improve therelevance and e?ectiveness of newemployee orientation.
Talent Training
Commendation conference for exemplary employees
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In 2024O?ered 271 training projects for all employees, with a total investment of RMB434,900.Provided academic and quali?cation improvement support for139 employees,with a total investment of RMB 334,900.
In October 2024, the China Machinery Industry Federation successfullyheld the ?rst "Standard-Driven Development, Powering NationalProgress" standardization knowledge competition. The purpose of thisevent is to enhance the level of standardization in the machinery indus-try and raise the awareness of standardization in the whole society. Itfocuses on the core knowledge areas such as the National Standardiza-tion Development Outline, the revision of the National standard system,international standardization, machinery industry standardization andenterprise standardization. SNS highly values this industry knowledgecompetition and organises employees to participate. After ?erce compe-tition, two employees of the standardization group of the Company'sTechnical Department stood out and won the second and sixteenthplaces respectively.
Employees of SNS Won the Top 20 in the KnowledgeCompetition of the China Machinery Industry Federation
In April 2024, the Company’s Manufacturing Division 1 successfully complet-ed a four-month intensive training for new employees. A total of 43 employ-ees participated in this training. For the ?rst time, new hires training hasbeen innovated on the basis of the traditional teacher-apprentice model,and launched a systematic and professional curriculum system, covering 24course modules such as HSE, system, quality, technology, and machining.Uni?ed training was conducted for general knowledge and operationalskills. It has laid a solid foundation for new employees to adapt to theworking environment, while providing strong support for building thedepartment's talent team.
New hires training at SNS
The training system of SNS
Onboarding training
Comprehensive abilitytraining
Professional trainingLeadership training
Corporate culture, company historyRules and regulationsBasic product knowledgeImprovement of management knowledgeSkills enhancementJob quali?cation trainingOperational skills trainingFurther educationGeneral skills trainingQES system trainingLegal training
SNS "A Promising Start, Boundless Future" New EmployeeOrientation Activity
Key Performance
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2024 Annual Goals
in OccupationalHealth and Safety
NDIV
Goal AchievementStatus
≤6.8≤2
Within Target
Limits
Within TargetLimitsWithin TargetLimitsWithin TargetLimits
Sun Seals
≤1
UTEC
≤1
Sunny Seal
≤5≤2
SNS
≤1.3
≤6.2≤6≤6≤7≤2.5
≤2
In strict compliance with the Law of the People's Republic of China on Work Safety,the Law of the People's Republic of China on the Prevention and Control of Occupa-tional Diseases, the Production Safety Accident Emergency Plan ManagementMeasures and other relevant laws and regulations, SNS continuously improvesthe level of occupational health and safety management, and creates a safe andreliable working environment for employees and contractors.
Health and Safety
SNS has made continued e?orts to establish and improve the production safetymanagement system. It has promoted the construction of a long-term produc-tion safety mechanism, and laid a solid foundation for setting a safety defenseline. SNS has systematically developed occupational health and safety manage-ment procedures in strict compliance with the ISO 45001 Occupational Healthand Safety Management System Standard. The Company implements internalregulations including the Company-Wide Safety Production Responsibility Systemand the Safety Production Inspection System. It establishes a comprehensive safetymanagement framework that clearly de?nes safety responsibilities at all levelsand conducts regular hazard identi?cation. Detailed protocols have been estab-lished for key areas including safety responsibility evaluation, hazard investiga-tion and remediation, occupational disease prevention, and emergencyresponse to ensure the achievement of all health and safety goals.
Safety Management System
The Company's safety production management system operates across multiple levels to ensurecomprehensive and e?cient implementation of management work. The Safety Production Manage-ment Committee is responsible for enforcing national regulations, establishing supervision systems,formulating safety rules, conducting periodic safety reviews, and investigating major incidents. TheCommittee's O?ce handles daily safety operations, including reviewing and updating safety regula-tions, promoting safety culture, conducting regular inspections and analysis to identify improvements,and administering rewards/penalties based on safety performance. Each department appoints safetyo?cers responsible for implementing safety protocols, organising departmental sta? safety training,and regularly reporting potential hazards and remedy measures, so as to ensure e?ective departmen-tal safety management. Meanwhile, the Company organises employees in safety management andoversight by including safety production in employee representative meetings. It also encouragesemployees to supervise and report safety hazards, and put forward suggestions for improvement, soas to protect the safety rights and interests of employees, and realise comprehensive coverage ofsafety management.The Company has obtained the ISO 45001 Occupational Health and Safety Management System Certi?-cation. Regular internal and external audits of the occupational health and safety management systemare conducted to promptly identify and rectify non-compliances, ensuring the system's e?ective opera-tion. In 2024, all subsidiaries successfully achieved their annual health and safety targets, demonstrat-ing signi?cant safety management results.
Incidence rates ofserious injury andabove accidents, ?reaccidents, andoccupational diseases
Near-miss accidentsMajor near-missaccidents
Rate of minor andslight injury accidentsper thousand peopleRate of slight injuryaccidents perthousand people
Organisational structure for production safety
Occupational Health and Safety Production
Management Committee
Each DepartmentAll Positions
O?ce of the Occupational Health and Safety
Production Management Committee
Within TargetLimits
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Safety training organised by NDIV
In addition, we attached equal importance to the operational safety of contractors andother suppliers. We formulated and implemented the Relevant Party HSE ManagementSystem, and signed HSE management agreements with long-term partners to clarify thesafety responsibilities and obligations of both parties. The Company requires externalconstruction personnel to receive safety training and watch safety noti?cation materialsbefore entering the site. In this way, we ensured that they understand the potentialsources of hazards and safety precautions on the site. For contractors involved inhigh-risk operations, the Company strictly reviews the quali?cations of operators,ensures that they are licensed, and supervises on-site operations throughout theprocess to prevent factors that may pose safety hazards.
SNS has established a dual prevention mechanism combining graded safety risk controlwith hazard investigation and management. On one hand, the Company conductsannual comprehensive identi?cation and assessment of hazards in all departments'production activities, products, and equipment. On the other hand, it implementsregular safety inspections including special inspections, departmental self-checks,team-level inspections, as well as daily and holiday checks to ensure continuous imple-mentation of safety management measures. In 2024, the Company organised all depart-ments to carry out hazard identi?cation and evaluation work. This involved comprehen-sively mapping out hazards present in various operational processes across depart-ments, followed by scienti?c classi?cation using the LEC semi-quantitative assessmentmethod. A dynamic risk inventory was created, and 14 unacceptable risks and 16 signi?-cant environmental factors were identi?ed. Based on these identi?cation and ratingresults, corresponding control measures were developed to construct a comprehensiverisk protection network.
Safety Risk Management
The Company prioritises enhancing employees' safety awareness and emergencyresponse capabilities, and continuously advances occupational health and safety cultureas well as emergency preparedness. Comprehensive safety education is provided to allnew hires, supplemented by regular internal safety training to ensure every employeeunderstands and complies with corporate safety protocols. Meanwhile, the Companyregularly invites safety experts to conduct specialised lectures that disseminate occupa-tional health knowledge and raise employees' safety consciousness. Through strength-ened safety culture development, the Company consistently elevates sta? vigilanceagainst potential hazards, thereby maintaining stable and reliably secure productionenvironments.
Safety Culture Development
In 2024, a total of 4,127 participants attended occupational health and safetytraining, accumulating 9,454.30 training hours.Key Performance
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Embodying its "Life First" philosophy andimplementing the work arrangements ofWuhou District Health Bureau, SNSinstalled two AED units in November 2024in the Company. The move aims toenhance its ability to respond to healthand safety emergencies and strengthenemployees’ safety and security.The Company organised 10 employees toparticipate in AED ?rst aid knowledge andskills training in November 2024 andMarch 2025 respectively. All 20 trainedemployees successfully passed boththeoretical and practical assessments,demonstrating full competency in operat-ing AED equipment during emergenciesto provide timely and proper cardiacarrest intervention.
SNS Conducts Training on First Aid Knowledge and Skills of AutomaticExternal De?brillator (AED)
Emergency Response DrillsTo enhance emergency response capabilities for unexpected incidents, SNS hasdeveloped and re?ned relevant policies including the Comprehensive EmergencyResponse Plan and the Specialised Emergency Plan to improve response e?ciencyfor various accident scenarios. The Company has established specialisedresponse plans and emergency drills for production accidents such as ?res,mechanical injuries, and falling object strikes. These measures strengthenemployees' emergency response capabilities and self-/mutual-rescue skills,ensuring swift and e?ective reactions during emergencies and protecting person-nel safety.
Occupational Health ManagementThe Company has established and strictly enforced the Labour Protection Equipment Safety Manage-ment System, which de?nes distribution standards for protective gear based on job-speci?c riskpro?les. These standards strictly apply to the procurement and issuance of protective equipment. TheCompany regularly checks the proper use of personal protective equipment by frontline employeeson the site, and makes timely adjustments and replenishments to ensure the gear is of reliable qualityand adequately provided.To safeguard employee health, the Company continuously monitors and optimises hazardous workenvironments. In 2024, the Company and its holding subsidiaries engaged external third-party profes-sional institutions to inspect the hazardous operating environment, achieving a 100% compliancerate. In addition, the Company and its holding subsidiaries regularly organise occupational healthexaminations to prevent the occurrence of occupational diseases. In 2024, 100% of workers in hazard-ous positions passed their health screenings, with zero reported cases of occupational diseases.In 2024, the Company conducted a total of 25 safety drills, with a cumu-lative participation of1,614 person-times.
Safety drill
Key Performance
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SNS is committed to delivering high-quality productsand services to customers through scienti?c manage-ment systems and cutting-edge technological R&D. Weactively promote the application of green and low-car-bon technologies while incorporating ESG factors intosupplier management practices, collaborating withindustry partners to advance sustainable development.Furthermore, the Company diligently ful?ls its socialresponsibilities by contributing to the prosperity of localcommunities and supporting the development of aharmonious society.Material Topics Covered in this Chapter:
Supplier managementTechnological innovation
Community welfareCustomer service and communication
Product quality and safety
Creating Harmoni-ous Society withShared Success
Product Responsibility
SNS has established a scienti?c and standardisedquality management system in accordance withauthoritative domestic and international qualitymanagement standards. By integrating the businesscharacteristics and production processes of SNS andits subsidiary companies, the Company has formu-lated and implemented a series of managementprocedural documents. The Company has estab-lished a quality objective system structured aroundcore indicators such as product quali?cation rate,test failure rate, on-time order delivery rate, failurerate, quality cost attrition rate, and audit compliancerate.The Company has established a clearly-de?nedquality management responsibility system, with thegeneral managers of each subsidiary responsible forquality management. The deputy general manager isappointed as the management representative toensure the e?ective operation of the managementsystem. A dedicated quality assurance departmenthas been set up to promote and implement theCompany's quality objectives, overseeing relevantdepartments or personnel, such as technical,procurement, inspection, and assembly, to carry outdaily work in compliance with quality standards.As of the end of 2024, SNS has obtained ISO 9001Quality Management System Certi?cation, API SpecQ1 Certi?cation, ASME (American Society of Mechan-ical Engineers) Certi?cation, and holds the NationalSpecial Equipment Production License.
Quality Management System
Product Quality and SafetySNS
Subsidiaries
ISO 9001 QualityManagement System
Certi?cation
API Spec Q1 Certi?cationAmerican Society of
Mechanical Engineers
(ASME) Certi?cate
National SpecialEquipment ProductionLicense
ISO 9001 Quality ManagementSystem Certi?cation(Sun Seals)
ISO 9001 Quality Management
System Certi?cation(UTEC)
National Special EquipmentProduction Licence(NDIV)
API Certi?cation(NDIV)
Overview of SNS’s Product and Quality Certi?cation
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In order to achieve critical quality objectives, the Company strictly implements the Inspection and Test Control Procedures, and conducts real-time monitoring and control of critical parameters. Asubstantial number of instruments, measuring tools, and testing equipment are deployed, with company-level and department-level metrology personnel assigned to perform daily managementand periodic calibration. The Company also outsources testing services, conducting uniform inspections of monitoring and measuring equipment each quarter based on calibration due dates. Italso performs four to ?ve physical and chemical tests monthly to ensure instruments and equipment operate in optimal condition.With a focus on quality management throughout the entire product lifecycle, the Company establishes internal operating standards and procedural documents for design and development,production, testing, assembly, and delivery phases. Control points are clearly de?ned to mitigate quality risks at every stage. In 2024, SNS and Sunny Seal enhanced the re?nement of qualitymanagement processes, optimizing quality control measures in raw materials, metrology tools, documentation, and other areas to improve management e?ciency.
Quality Management Process
Key points of full-process quality control ?ow
Design planning: The technicaldepartment is responsible fordesign and developmentplanning, de?ning designstages and control measures,including design reviews,veri?cation, and validationactivities.Design input: Clear designrequirements are established,covering customer needs, legaland regulatory standards, andapplicable standards.Design output: Ensures designoutputs meet input require-ments, including productspeci?cations, drawings, andprocess documentation.Design review and veri?cation:
Internal reviews and veri?ca-tion ensure designs complywith stipulated requirements.
Design stage
Production planning: Produc-tion process planning includesresource requirement, processdocumentation, and inspec-tion/testing requirements.Production control: Strictadherence to processdocuments and work instruc-tions to maintain controlledoperations.Labelling and traceability:
Establish a product identi?ca-tion and traceability system toensure the uniqueness andtraceability of productsthroughout production.Preventive maintenance: Carryout preventive maintenance ofproduction equipment toensure the normal operation ofthe equipment.
Production andmanufacturing stage
Process inspection: Conductinspections and tests duringthe production process toensure that the products meetthe design and processrequirements.Final inspection: After theproduction of the product iscompleted, the ?nal inspectionand testing will be carried outto con?rm that the productmeets the receiving criteria.Control of nonconformingproducts: Labelling, isolate andreview substandard products,and take corrective measures.
Assembly anddelivery phase
Assembly control: Controlthe assembly process toensure that the assemblyquality meets the require-ments.Product protection: Protectthe product before delivery,including packaging,handling, storage, etc., toensure that the product isnot damaged.Post-delivery activities:
Provide necessaryafter-sales service, includingproduct installation,commissioning, mainte-nance, etc.
Testing andinspection phase
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Control stageRaw materials controlDetailed descriptionFormulate a quality plan and conduct strict chemical and mechanical perfor-mance tests on the raw materials of important products and parts.For key supplied materials such as cemented carbide, raw materials, andgraphite, on-site sampling inspections are conducted. Suppliers failing theseinspections will have their supply suspended and be required to implementcorrective actions. Supply will only resume after the corrective measures passre-inspection and are veri?ed as compliant.
Control stageControl of Measuring EquipmentDetailed descriptionThrough hierarchical management, spare parts ledger management, etc., theinspection cycle of equipment is rationally arranged to avoid repeated inspec-tions.A new inspection module has been added to the OA system to record detailedinspection information and electronic management of inspection certi?cates,which helps to accurately identify internal and external inspection require-ments.Key control measures of SNS and Sunny Seal
In terms of product recalls, the Company has established comprehensive management documents including the Non-Conforming Product Control Procedure and the Defective Product Traceabilityand Recall System, forming a complete product recall mechanism and process to safeguard customer rights and minimise potential risks to the greatest extent possible.
Recall process
The sales/after-sales department isresponsible for receiving and report-ing customer feedback on defectiveproducts in a timely mannerThe Quality Assurance Departmentorganises relevant departments toanalyse and evaluate the causes ofthe feedback problems, implementimprovement measures, anddetermine whether a recall isrequired
For products determined to bedefective and must be recalled, theQuality Assurance Department isresponsible for formulating a defec-tive product recall plan, which will beimplemented by the relevantdepartments after approval
The responsible department shallformulate a handling plan forrecalled products, which will beimplemented after approval. TheQuality Assurance Department isresponsible for supervising thehandling process of defectiveproducts
Records of the recall and handlingprocess will be completely kept,including the cause of the recall,handling measures and resultsTake preventive measures to preventsimilar problems from recurring toensure customer satisfaction andproduct safety
Identi?cation
Recording
andpreventionStart andimplemen-tation
Defective
producthandling
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With the core goal of improving the level of quality management and the professionalism of employees, SNS organises various activities every year to engage all employees in the construction ofquality and safety culture, raise employees’ quality awareness, and e?ectively improve the Company's quality management e?ectiveness. In 2024, SNS and its holding subsidiaries carried outnumerous specialised trainings on quality management system standards such as API SPEC Q1, internal auditors of the quality management system, quality management methods, standardisedoperating speci?cations, etc., and organised a series of “Quality Month” activities. With the help of knowledge competitions, debating competitions, sharing sessions and other forms, mobilise theenthusiasm of all sta? to pay attention to quality, and strengthen the standardised knowledge reserves and operational skills of employees.
Quality Culture Development
During the "Quality Month" in September 2024, SNS and its subsidiaries organised various quality-related activities tailored to their respective operational characteristics.Outstanding performers were recognised with awards to motivate employees' enthusiasm for learning quality knowledge and foster a positive quality culture.SNS and Sunny Seal invited the Company's deputy general manager and quality director to serve as judges for the quality knowledge contest, in which various departments activelyparticipated, forming 12 teams with 36 representatives to compete. For the ?rst time, a debate format was introduced, featuring intense discussions on topics such as "Shouldquality management focus more on rewards or punishments?" and "Should enterprise production and operations prioritise quality improvement or cost control?”UTEC meticulously designed the competition format, including mandatory questions, quick-response questions, interactive questions, and risk-based questions, comprehensivelyassessing employees' understanding of quality management system standards and the company's quality management regulations.Sun Seals launched a "Quality Strengthening the Supply Chain" initiative, randomly selecting six suppliers for on-site audits. Simultaneously, it organised a series of themedactivities "High-Quality Development Stories: Spreading the Voice of the New Era," and selected the best department for the annual Quality Month activities.NDIV conducted activities such as quality suggestion campaigns and external training sessions, encouraging employees to share their opinions and contribute to further qualityimprovement.
SNS Launched the "Quality Month" Knowledge Competition
SNS Quality debate competition
Sun Seals qualityimprovement activity selection
NDIV API SpecQ1 Standard training
UTEC product qualityinspection speci?cation trainingSNS’s knowledge competition
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As one of the ?rst batch of national-level specialized, re?ned, unique, and innovative"Little Giant" enterprises selected by the Ministry of Industry and Information Technolo-gy, SNS has consistently invested in independent technological innovation. The Companypossesses multiple innovation platforms including a national-level enterprise technologycentre, a national postdoctoral research workstation, a provincial-level mechanical sealengineering technology research centre, a provincial high-performance mechanical sealtechnology engineering research center, and a municipal-level academician (expert)innovation workstation. With annual R&D investment accounting for approximately 5%of operating revenue, the Company continuously drives technological innovation andproduct upgrading.The Company has established an Enterprise Technology Centre, comprising professionaltechnical personnel from all subsidiaries as members of the Technical Committee. Thecommittee is responsible for evaluating the feasibility of proposed projects, assisting insolving key technical problems during execution, and participating in ?nal acceptanceevaluations. Under the committee's coordination, multiple specialised R&D teams havebeen formed, covering research areas such as high-parameter dry gas seals, high-endmechanical seals, seal auxiliary systems, rotary jet pumps, intelligent seal monitoring andhealth management systems, and the friction, wear and lubrication mechanisms ofsealing faces. These teams focus on both fundamental theories and product applications,continuously expanding the boundaries of the Company's innovation domains.The Company has implemented a comprehensive project R&D management system thatensures quality control throughout the entire R&D process, including project initiationreviews, progress tracking during execution, and ?nal acceptance evaluations. For bothproject initiation and acceptance phases, all members of the Technical Committee partic-ipate in the review process. This ensures thorough feasibility analysis during projectestablishment and substantive validation of research outcomes upon project comple-tion.
In 2024, the Company had a total of 250 R&D personnel. The R&D invest-ment reached RMB
75.772 million, representing 4.84% of the operating
revenue.
The Company has established a scienti?c and reasonable evaluation system. In accordancewith management documents such as the Scienti?c Research Project Management System, itassesses the performance of all R&D teams to ensure the quality and e?ciency of R&D work.Completed scienti?c research projects undergo internal evaluations and rewards, with specialincentives granted for nationally authorised patents. Technical key personnel are also provid-ed with equity incentives. The Company has also applied for national and industry-levelscienti?c and technological progress awards for outstanding innovative achievements andnominates individuals who have led projects and demonstrated exceptional performance forprovincial, municipal, and district-level honors such as "Artisan", "Model Worker", and"Talent". These e?orts enhance the Company's in?uence and industry standing.
R&D Innovation MechanismProduct Innovation and R&D
Chening Zhang was awarded the honorary title of "Sichuan Artisan"
In January 2024, Chening Zhang, Deputy Chief Engineer of the Company, wasawarded the honorary title of "Sichuan Artisan." This title, jointly selected by theSichuan Provincial Federation of Trade Unions, the Department of Economy andInformation Technology, and the Department of Human Resources and SocialSecurity, aims to recognise outstanding skilled talents with exceptional crafts-manship, signi?cant contributions, and industry leadership. Chening Zhangstood out among candidates from 21 cities and prefectures and 43 industriesacross the province, becoming one of the representative ?gures of the 2024"Sichuan Artisan" award, thanks to his outstanding achievements in the ?eld ofdry gas seals.
Zhang Chening Awarded the Honorary Title of "Sichuan Artisan"
Key Performance
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Green Technology Achievements
Aligned with the "green, low-carbon, energy-saving, and smart" development goals of the petrochemi-cal industry, SNS has led the transformation with digital and intelligent technologies, carried out thewhole life cycle health management of seals, and developed and launched the seal intelligent monitor-ing system (SIMS). SIMS is an online monitoring system designed for compressor dry gas seals as wellas pump and reactor mechanical seals. Integrating arti?cial intelligence with expert knowledge, itenables real-time assessment of seal health status, early detection of potential operational issues, andprediction of performance degradation and remaining service life, thereby achieving full lifecycle healthmanagement for sealing systems. The intelligent operation and maintenance capabilities enabled bySIMS empower users to implement predictive management for critical equipment components,e?ectively preventing unexpected failures and mitigating operational risks to production safety.In 2024, two SIMS-based research projects—"Intelligent Fault Diagnosis and Big Data Analysis forCompressors and Dry Gas Seals" and "Online Condition Monitoring and Early Warning System forHigh-Pressure Dry Gas Seals"—successfully passed expert acceptance reviews by authoritative organi-sations including PipeChina and Sinopec. SIMS has been applied to many enterprises such as SinopecShanghai Petrochemical, Sinopec Jiujiang Company, Sinopec Yangzi Petrochemical, YanshanPetrochemical, etc. to provide a guarantee for the safe and stable operation of equipment.
SNS strategically positions itself in future energy industries suchas CCUS, actively participate in the green and low-carbontransformation and upgrading of traditional industries, and helpcustomers move towards a clean transformation process.Sinopec Qilu Petrochemical's million-tonne CCUS project: In2022, the Company participated in the million-tonne CCUSproject of Qilu Petrochemical and undertook the dry gas seal andcontrol system for the key unit of the project. This projectrepresents China's ?rst million-tonne-scale carbon dioxiderecycling initiative. Upon completion, it has become one of thenation's large-scale CCUS full-industry-chain demonstrationbases, providing practical application cases for promoting thescaled development of CCUS in China. The project holds signi?-cant importance for e?ectively enhancing China's carbonemission reduction capabilities and establishing an "arti?cialcarbon cycle" model.
CHN Energy Taizhou Company’s Carbon Capture Project: In 2023,the 500,000-tonne-per-year carbon capture and integratedutilization project at Taizhou Power Generation of CHN Energy,which was equipped with the Company's key unit dry gas sealsand dry gas seal systems, successfully started up and waso?cially put into production on the ?rst attempt. The project willachieve an annual CO? capture capacity of 500,000 metrictonnes, serving as an exemplary model for the energy industry inrealizing China's goals to peak carbon emission and achievecarbon neutrality.
SNS has fully leveraged its leadership in technological innovation to provide robust support for low-carbon transformation in key industries such as industrial manufacturing and energy& chemicals through its independently developed green and low-carbon technology solutions. On the one hand, the Company is committed to product innovation, reducing energyconsumption and greenhouse gas emissions during mechanical seal operation through material improvements, system enhancements, and performance optimization. On the otherhand, the Company actively expands product applications in clean energy sectors like CCUS (carbon capture, utilization, and storage) and nuclear power, supporting the green transitionof the energy industry.
SNS Provides Key Sealing Systems for CCUSProjectsSNS developed a new generation of sealing face materials, creating diamond-coated seal products.These products are primarily designed for harsh conditions involving particulate impurities, dry friction,high temperatures, and gas-liquid phase alternation, signi?cantly reducing friction coe?cients andshaft power consumption. The diamond coating enhances the sealing face's pressure resistance, wearreduction, and corrosion resistance while markedly improving seal reliability and lifespan.Through paired materials selection and coating process improvements, the diamond coating technolo-gy signi?cantly improves the pressure resistance and wear performance of sealing faces, extending theoperational life of seal products by over 100%. In 2024, SNS established a Coating Process ResearchLaboratory dedicated to the prototyping and performance testing of diamond coatings, and developeddiamond-coated products that meet stringent performance requirements.
Diamond-coated seals Signi?cantly Improve Wear Resistance and Service Life
Seal Intelligent Monitoring System (SIMS) Boosts E?ciency with Digital Intelligence
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MarchMayAugust
OctoberSeptemberSeptember
NovemberNovemberDecember
SNS attaches great importance to industry-universi-ty-research collaboration with domestic universities.The company has established cooperative R&Drelationships with institutions including TsinghuaUniversity, Sichuan University, and SouthwestJiaotong University, and has jointly applied forresearch platforms such as the Sichuan ProvincialMechanical Seal Engineering Technology ResearchCentre and the Chengdu Academician (Expert) Innova-tion Workstation. Leveraging its national-levelpostdoctoral research workstation, the companycollaborates with universities to jointly cultivatepostdoctoral talent, providing technological and talentsupport for its development in the ?eld of ?uid equip-ment. By establishing university-enterprise collabora-tion mechanisms, the Company shares complementa-ry advantages with academic institutions to acceleratethe transformation of scienti?c and technologicalachievements, promote precise alignment of indus-try-education resources and support R&D in "nation-al-critical equipment" and key components.Meanwhile, the Company emphasizes knowl-edge-sharing with domestic and global peers,upstream and downstream partners, and industryorganisations to jointly advance innovation. Throughhosting/participating in industry events, the Companyhas conducted extensive technical exchanges onstandards, application expertise, and cutting-edgetrends. By the end of 2024, the Company has partici-pated in the drafting and review of more than 40national and industry standards. It is the lead draftingentity of the industry standard JB/T 11289 TechnicalSpeci?cation for Dry Gas Seal and JB/T 13407-2018 DryGas Seal Control Systems for Turbo-machinery. Based onthe industry goals of reducing sealing energyconsumption and leaked emissions, high standardsand strict requirements are put forward for theleakage rate of seals. In 2024, the Company participat-ed in the drafting of the national standard GB/T6556-2024 Type, Main dimension, Material and Markingof Mechanical Seals, thereby promoting the standard-ization of industry practices.
Industry Exchanges and Mutual Advancement
List of Industry Exchange Activities Participated by SNS in 2024
Participated in the "15thPetrochemical EquipmentMaintenance and RepairTechnology ExchangeConference", where it delivered akeynote presentation titled"Self-Adaptive DeformationMechanical Seal Solutions forHigh-Temperature andHigh-Pressure Forced CirculationHot Water Pumps".
Participated in theWuhan InternationalPapermaking TechnologyExpo and demonstratedinnovative achievementsin the ?eld of sealingtechnology.
Participated in the EPEC IndustrialProducts Exhibition themed"Innovation·Green· DigitalIntelligence·Empowerment" toshowcase the Company's latestachievements in scienti?c andtechnological innovation andindustrial integration.
Participated in ADIPEC2024, where itsexhibition garneredhigh recognition fromglobal industry leadersincluding ADNOC, SaudiAramco, and ElliotGroup.
Participated in the 12thChina (Shanghai) Internation-al Fluid Machinery Exhibition,and introduced the Company'sdeep technical research anddevelopment strength,advanced and reliablemanufacturing capabilitiesand rich project experiencecomprehensively.
Assisted in the organisation of the 7thNational Fluid Sealing Academic Conferenceand the Second General Meeting of theMechanical Sealing Professional Branch ofChina Hydraulic and Pneumatic SealsIndustry Association, and made anacademic report on the Research on thePerformance of Modi?ed HerringboneMechanical Seals with Reverse Pumping E?ectunder Di?erent Lubrication States.
Participated in the "ThirdAnnual Meeting of Re?ningand Chemical EquipmentManagement Technology"to share experience in theapplication of dry gas sealtechnology for xylenetower bottom pumps.
Supported the organisation ofthe 2024 National Petroleumand Chemical Mixing Confer-ence, and exchanged mixingand sealing technologies withuniversities, engineeringcompanies, petrochemicalcompanies, etc.
Supported the organisation of the"Petrochemical Centrifugal Pump ShaftDiameter Series Standards Seminar andGeneral Technical Speci?cation ReviewMeeting for Centrifugal Pump Procure-ment" hosted by Sinopec MachineryTechnology Centre Station, facilitatingin-depth discussions on the optimizationand enhancement of standards forcentrifugal pump shaft diameter series andrelated speci?cations.
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SNS adheres to the philosophy of "Technology-Driven Market Leadership, Service-BackedCustomer Loyalty, Quality-De?ned Brand Excellence," providing customers withhigh-quality products and e?cient problem-solving solutions. The Company has estab-lished a series of documents including the Quality Feedback Handling System and theService Activity Control Procedures, which clearly de?ne the feedback and handlingprocesses for quality issues and standardise the work procedures of service personnel.For product-related feedback received, the Company has implemented categorisedmanagement based on multiple dimensions including nature of issues (improvementsuggestions or product quality defects) and feedback source (customer feedback orinternal feedback). A quality feedback handling mechanism has been established thatprioritises resolving product quality issues and customer suggestions while utilizingquality feedback cards as tools for root cause analysis, subsequent improvementmonitoring, and documentation, thereby ensuring the ful?llment of quality commit-ments to customers.
For on-site services such as product installation, commissioning, and maintenance, theCompany collects customer opinions through two methods: service sta? work orders andsales sta? after-sales return visits to ensure that the quality of service activities reaches thelevel of customer satisfaction. During the execution of on-site services, service personnelshall strictly adhere to operational documents and customer requirements while complyingwith the customer's safety and environmental management regulations. Upon servicecompletion, the service personnel must promptly document and generate the Service ActivityWork Order, have the customer complete the "Customer Feedback" section, and submit thework order to the Company for archiving upon return. The sales sta? will further conducttelephone return visits to understand and collect customer feedback on whether the serviceneeds have been resolved, the operating status of the product after the service, the skills ofthe service personnel, and the attitude of the service personnel. They will regularlysummarise and analyse customer suggestions to continuously improve the service level.In addition, the Company distributes a Customer Satisfaction Survey Form to customersannually, and evaluates the quality of customer service from ?ve aspects: product perfor-mance, product appearance, delivery time, after-sales service, and product cost-e?ective-ness. By combining the feedback records, the Company analyses the satisfaction data toform a Customer Satisfaction Analysis Report and develops strategies to improve customersatisfaction. In 2024, the Company continued to receive high recognition from customersand industry partners for its professional, reliable, and timely technical services. Thecustomer satisfaction ratings for SNS and its various subsidiaries all exceeded 95%.
Customer Service Quality
Classi?cation management of quality feedback card of SNS
SNS 2024 customer satisfaction score
Class A Customer Feedback RecordCardFor quality issues caused by theCompany or customer improvementproposals, a detailed description offailure details or proposalsmust be provided tofacilitate root causeanalysis and correctiveactions.
Class B Customer Feedback Record
CardFor quality issues not attributableto the Company, brie?y documentthe customer's feedback and the
root cause of the problemfor statistical recording
purposes.
Class A Internal FeedbackRecord CardFor quality issues orimprovement suggestionsraised internally (including productdefects, design enhancements, andmanagement concerns), detaileddocumentation of non-conformancedetails is required to facilitate correc-tive and preventive actions.
Class B Internal Feedback
Record CardFor non-major orhuman-induced deviationsduring product realization, theresponsible internal departmentmust be clearly identi?ed, withregular statistical tracking imple-
mented.
98.66%96.90%97.20%
SNS, Sunny SealSun SealsNDIVUTEC
98.67%
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Sustainable Supply Chains
Responsible ProcurementIn supplier management, the Company also incorporates ESG factors. We not onlyfocus on basic compliance in quality, business ethics, environment, health, and safetyduring the supplier selection and evaluation processes, but also sets clear environmen-tal and social responsibility requirements during cooperation. These are speci?ed inthe form of contract agreements, terms, and commitment letters, de?ning the suppli-ers' safety and integrity responsibilities.In 2024, SNS and its subsidiaries signed environmental and safety responsibilitydocuments with all on-site operation contractors, such as the HSE Safety ProductionAgreement and the Safety, Health, and Environmental Commitment Letter. They alsoprovided specialised safety training with a coverage rate of 100%.
SNS places great emphasis on the stability and reliability of its supply chain. It has establisheda comprehensive supplier management system and continuously optimises the full life cyclemanagement of suppliers. The Company has established and implemented internal regula-tions such as the Procurement Control Procedure and the Supplier Management System. It exercis-es strict control over every stage in the process, from entry to evaluation and exit, to regulatesupplier behavior and e?ectively mitigate supply chain risks.
Meanwhile, the Company focuses on mutual promotion and joint growth with suppli-ers. SNS and Sunny Seal organise on-site technical exchanges and training sessions forsuppliers irregularly every year, and engage them with in-depth communicationregarding the working principles, performance features, and fault diagnosis ofproducts to promote technological improvement. In 2024, they held 26 technicalexchange sessions with suppliers such as Chongqing Yokogawa Electric Instrument Co.,Ltd. and SGL Carbon Special Graphite (Shanghai) Co., Ltd. on topics related to techno-logical and quality enhancement. UTEC provides technical training for suppliers withrelatively lower technical levels, covering production processes, quality controlmethods, and new product development technologies. By dispatching technicalexperts and designing specialised training courses, it helps suppliers comprehensivelyenhance their production and management levels.
Supplier Management
Life cycle supplier management process
The Company collects quali?cation information of suppliers throughvarious channels (including quality management systems, occupationalhealth and safety management systems, product certi?cations, etc.). Adedicated supplier evaluation team conducts internal reviews andassessment scoring. Suppliers who pass the evaluation are included inthe List of Quali?ed Suppliers.The Company establishes scoring criteria from multiple dimensionssuch as production processes, technical capabilities, and producttesting. It regularly conducts supplier evaluations and updates theSupplier Evaluation Record Form on a routine basis. Based on the scoringresults, suppliers are categorised into four levels: A, B, C, and D.Suppliers rated as Level D are deemed unquali?ed and have theirquali?ed supplier status revoked. Their supply of goods is suspended,and they are required to promptly implement corrective actions.Annual evaluations of suppliers are conducted. For unquali?ed suppli-ers who fail to complete corrective actions in a timely manner and thosemeeting other disquali?cation criteria, cooperation is terminated.
AccessExitTiered Management
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Community Contribution
While ensuring its own business development and creating economic value, SNS alsogives back to society. It collaborates closely with local communities, participates invarious volunteer and charity activities, supports rural revitalisation and social publicwelfare projects, and contributes to the building of a beautiful and harmonious society.In 2024, the Company implemented the "Thousand Enterprises Helping ThousandVillages" targeted poverty alleviation initiative in Sichuan Province, and provided tailoredassistance to Ganluo County via consumption-driven aid programs to bolster localagriculture.
Aerial photo of Ganluo County
In 2024, the Company dutifully executed the "Thousand Enterprises HelpingThousand Villages" targeted poverty alleviation program in Sichuan Province,delivering needs-based interventions for Ganluo County. With the form ofconsumption-driven aid programs, the Company purchased over RMB400,000worth of poverty alleviation agro-products, which promoted the growth of localagricultural sales revenue.
SNS Implements Targeted Assistance Initiatives in Ganluo County
SNS provided support and assistance to the Dacao Township Central School
In November 2023, the Party General Branch of SNS visited Dacao TownshipCentral School in Puge County to carry out a support and donation activity. Theteam donated educational supplies to the school, including picture books,percussion practice instruments, cartoon toys, and watercolour pens. They alsoorganised a fun class themed “The Development of Transport – High-Speed Railand Aeroplanes” for pupils in Grade 1 and Grade 2. Additionally, they joined theschool’s Niuniu Choir in performing the song Daylily Flower together.
The CPC General Branch of SNS Carries Out a Donation andSupport Visit to Dacao Township Central School in Puge County
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ESG Performance Indicators
Number of Business ethicsand anti-corruptiontraining
Net pro?t attributable toshareholders of the listedcompany
Percentage of employeessigning the IntegrityCommitment Letter
Operation performanceIndicator
Indicator
Unit202420232022IndicatorUnit202420232022
Unit202420232022
Economicperformance
Total revenue
RMB10,000
RMB10,000RMB10,000
RMB10,000
156,652.37136,935.98121,468.3539,245.4434,667.5530,928.78
Businessethics
times
times
%100100100Coverage rate of businessethics training (suppliers)3
%100100100
Environmentalprotection inputOccurrence ofenvironmental penaltiesEnvironmentmanagement
Waterwithdrawalandconsumption
Waste gasmanagement
130.6897.6673.45
Amount of environmen-tal penalties
Total water withdrawalTotal water consumption
ton76,67372,48950,507ton76,67372,48950,507Water consumptionintensity
ton/RMB
million
48.9552.9441.58
Recycled waterconsumptionPercentage of recycledwater use
ton15,153.5914,432.3514,409.45
%19.7619.9128.53
Emissions of waste gas pollutants
NOxNon-methane hydrocar-bon (NMHC)
ton0.0020.0020.002ton0.1570.0830.170Particulate matter (PM)ton00.0140
Environmental Performance
Governance Performance
3The statistical scope includes the number of suppliers for whom the Company has carried outpublicity and implementation activities through the Procurement Integrit Agreement.
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IndicatorUnit202420232022IndicatorUnit202420232022
Industrial wastewaterdischarge
24,608.0024,789.4718,705.89Domestic wastewaterdischarge
35,143.9934,845.5523,605.74Ammonia nitrogen(NH3-N)Wastewatermanagement
Wastemanagementand circulareconomy
ton0.9840.1490.067Chemical oxygendemand (COD)
ton4.6890.5510.391Total phosphorus (TP)Suspend solids
ton0.0060.0020.004
ton0.0300.0400.020
Waste generation and disposal
Emissions of wastewater pollutants
Wastewater discharge
Total emissions ofhazardous wastesHazardous wasteintensity
ton
ton
82.9476.0769.38
ton/RMBmillion
ton/RMBmillion
0.050.060.06
Total emissions ofnon-hazardous wastes
539.75459.73422.65
Non-hazardouswaste intensity
0.350.340.35
cubicmetrescubicmetres
ton/RMBmillionton
tonTotal waste discharged
622.69535.80492.03
Total waste dischargeintensity
0.400.390.41
Non-hazardous wasterecycled/recycled4
EnergyConsumption5
1086051
Total direct energyconsumption
tons ofstandard
coal
88.3392.1581.34
GasolineDiesel fuellitrelitre38,546.8039,967.1833,458.00
3,1722,0571,845
Direct energy consumption
Indirect energy consumption
Natural gasLique?ed petroleumgas
cubic
metres
24,74330,32828,831kg7,069.304,916.003,839.00Direct energyconsumption intensity
kWh/RMB
million
458.95547.73545.08
Total indirect energyconsumptionPurchased electricity
kWhkWhkWh
7,527,471.746,779,950.396,319,701.037,527,471.746,779,950.396,319,701.03Incl: renewableelectricity
499,900548,700191,020
4The main statistical object is the recycled iron ?lings.5The coe?cient for converting into standard coal used refers to the General Rules for Calculation ofComprehensive Energy Consumption (GB/T2589-2020).
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Type and structure of employees
Indicator
Indicator
Unit202420232022IndicatorUnit202420232022
Unit202420232022
Social Performance
Proportion ofrenewable energy usein total electricity useIndirect energyconsumption intensity
Scope 2 totalemissionsScope 1 totalemissions
Diversity &equalemployment7
Scope 1+2 totalemissionsScope 1+2 emissionintensity
Number of employeesperson
personpersonNumber of part-timeemployeesNumber of full-timeemployees
Number of ?exibleemployeesProportion of full-timeemployeesProportion of part-timeemployeesNumber of maleemployeesNumber of femaleemployeesProportion ofmale employees
Employee gender structure
Number of employeesbetween 30 and 50years old
Proportion of femaleemployeesEmployee age structureNumber of employeesunder 30 years old
Number of employeesover 50 years oldProportion of employeesaged below 30Proportion ofemployees aged 30-50Proportion ofemployees agedabove 50
GHGEmissions6
1,6861,4701,381
1,7711,5711,424
%6.648.093.02
4,8054,9515,203
161.22166.86146.55
4,038.973,637.833,391.054,200.193,804.693,537.60
2.682.782.91
tons of carbon
dioxideequivalenttons of carbon
dioxideequivalenttons of carbon
dioxideequivalenttons of CO2equivalent /RMB million
kWh/RMB
million
6Direct emissions (Scope 1) refer to greenhouse gas emissions generated from the consumption ofnatural gas, diesel, gasoline, and similar fuels. Indirect emissions (Scope 2) refer to greenhouse gasemissions resulting from the consumption of externally purchased electricity and other energy sources.The selection of greenhouse gas emission factors is based on technical documents, including the 2006IPCC Guidelines for National Greenhouse Gas Inventories (2019 revised edition) and the Announcement onthe Release of China’s 2021 CO? Emission Factors for Electricity issued by the Ministry of Ecology andEnvironment and the National Bureau of Statistics, which speci?es the 2021 national grid averageemission factor of 0.5568 kgCO?/kWh.7The data statistical scope in 2024 covers Sinoseal Holding Co., Ltd. and all its holding subsidiaries,including KS GmbH.
8510143%person
person
personpersonperson
person
95.2093.5796.98
%000
1,2981,1291,067
388341314%76.9976.8077.26%23.0123.2022.74
488390325
994932908
204148148%28.9426.5323.53%58.9663.4065.75%12.1010.0710.72
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Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
IndicatorUnit202420232022IndicatorUnit202420232022
Employee turnoverheadcountEmployee turnover rateSocial insurancecoverage rateEmployeerights andbene?ts
Employeetraining anddevelopment
Employee bene?tscoverage rateThe invested amount inwork-related injuryinsurance and worksafety liability insuranceThe coverage rate ofwork-related injuryinsurance and worksafety liability insuranceEmployee training system
Employee bene?ts
Employee turnover
Total investment inemployee trainingNumber of employeetrainingNumber of employeesprovided with academicor professionalquali?cation supportInvested amount inproviding employee withacademic or professionalquali?cation support
Number of employeestrainedEmployee trainingcoverage rate
Occupationalhealth & safety8
Work-related fatalityrateNumber of work-relatedfatalities
Lost workdays due towork injuryLost Time InjuryFrequency Rate (LTIFR)of employees9
Safety production accidents
Prevention and treatment of occupational disease
Number of work-relatedinjuriesEmployees totalworking hoursFatality rateFAR10Number of occupa-tional diseasesThe compliance rate ofthe harmful workingenvironment inspectedby external third partiesThe quali?cation rate ofoccupational healthcheck-ups for employeesin hazardous positions8The statistical scope of data in 2024 covers SNS and all its holding subsidiaries, including KS GmbH.9The Lost Time Injury Frequency Rate (LTIFR) of employees = (The number of lost time injuries / Totalworking hours) × 1,000,00010The Fatality Accident Rate (FAR) = (The number of fatalities / Total working hours) × 1,000,000
person
person
person
personperson
RMB
RMB
RMB
628079%3.685.445.72%100100100%100100100
729,904.53590,257.02398,486.54%100100100
434,911.12875,887.211,506,257.28times271260242
13912987334,915.78567,066.15521,522.81
1,6021,4701,381%100100100
%0.000.000.07day133.6822134
/2.542.552.11times986hour3,542,0003,142,0002,848,000
%000.35
%100100100%100100100
2024 Environmental, Social,and Governance Report
IntroductionAppendix
Build a RobustOperation Foundation
Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
Cybersecurity incidents
Community welfare
IndicatorUnit202420232022IndicatorUnit202420232022
The total number ofsafety trainingparticipants11Total training hours foremployeesNumber of safety drillsNumber of participantsin safety emergencydrills
Suppliermanagement
Technologicalinnovation
Domestic suppliersOverseas suppliers
Supplier evaluation
Supplier type
Occupational health and safety training
Number of suppliers forwhich on-site assess-ments were conductedNumber of suppliers forwhich o?-siteassessment wereconductedInnovation and R&D managementR&D InvestmentProportion ofR&D investment
Number of R&DpersonnelNumber of patentapplications
Cybersecurityand datasecuritySocialcontribution
Valid patentsNumber of patentsgranted
Number ofinvention patentapplications
Patent-related performance
Performance related to invention patents
Number ofinventionpatents grantedValid inventionpatentsOccurrence of datasecurity incidentsInvestments in ruralrevitalisation
11The statistical scope of the data in 2023 and 2022 differs from that in 2024 , so the data has not beendisclosed.Note: Unless specified, the statistical scope of data above covers SNS and its holding subsidiaries(KS GmbH excluded).
numbernumber
numbernumber
1,3121,3921,295232333
person-times
person
CaseCaseCase
CaseCaseCase
4,127//hour9,454.3//times
times
252512person-times1,6141,620984
12612463
466514
RMB 10,0007,577.207,474.096,144.23
%4.845.465.06
250223208
331642192517183171151
12719
473935
40.3300RMB 10,000
2024 Environmental, Social,and Governance Report
IntroductionAppendix
Build a RobustOperation Foundation
Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
Indicator Index Table
Report section
Self-Regulatory Supervision Guidelines for Listed CompaniesNo. 17 - Sustainable Development Reporting (Trial) by ShenzhenStock ExchangeAbout the Report
IssueArticle
/ManagementMessage
/About SNS/ESG ManagementStakeholder communicationArticle 53Building a Robust Operation Foundation
Introduction
CorporateGovernance
/Business EthicsAnti-commercial bribery and anti-corruptionArticle 55Compliance and RiskManagement
/Intellectual PropertyProtection
Innovation-driven developmentArticle 42Cybersecurity andInformation Security
Data security and customer privacy protectionArticle 48Practising Green and Low-carbon ActionsEnvironmentalManagement System
Environmental compliance managementArticle 33
Energy utilizationArticle 35Energy and CarbonManagement
Tackling climate change
Article 21, Article 22,Article 23, Article 24,Article 27, Article 28,Article 34
Resource Utilization
Water resource utilizationCircular economyEmissions and WasteManagementEcological Protectiont
Pollutant emissionsWaste managementArticle 31Ensuring Employee Rights and DevelopmentBasic Rights andInterests
EmployeesCareer DevelopmentEmployeesArticle 50Health and SafetyEmployees
Article 50Article 50Creating Harmonious Society with Shared SuccessProduct Responsibility
Innovation-driven developmentArticle 42
Appendix
Sustainable SupplyChains
Supply chain securityArticle 45
Product and service safety and qualityArticle 47
Social contributionArticle 40CommunityContributionESG PerformanceIndicatorsIndicator Index TableReader Feedback
Rural revitalizationArticle 39
/
/
/
Ecosystem and biodiversity protectionArticle 32
Article 36Article 37Article 30
2024 Environmental, Social,and Governance Report
IntroductionAppendix
Build a RobustOperation Foundation
Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success
Reader Feedback
Thank you for reading the 2024 SNS Environmental, Social and Corporate Governance (ESG)Report. To provide you and other stakeholders with more valuable information and toenhance the ESG management capabilities and standards of SNS, we sincerely invite youto leave your comments and suggestions on the report. Please provide your feedback tous through the following channels:
Address: No. 8, Wuke West Fourth Road, Chengdu City, Sichuan ProvincePostcode: 610045Telephone: 028-85542909E-mail: ir@sns-china.com
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2024 Environmental, Social,and Governance Report
IntroductionAppendixBuild a RobustOperation Foundation
Practising Greenand Low-carbon Actions
Ensuring Employee Rightsand Development
Creating Harmonious Societywith Shared Success