Contents
Description of the Report PreparationTo StakeholdersAbout the CompanyOur Sustainability ManagementTopic: Digital Intelligence EmpowermentAccelerating the Development of NewQuality Productive Forces
GRI IndexBenchmark Index to the Guidelines of theStock ExchangeList of Key Performance IndicatorsMain Participatory Domestic Associationsand OrganizationsOverview of Certi?catesReader's Feedback
EnvironmentalResponsibilitiesClimate Change TacklingEnvironmental ComplianceManagementPollutant Discharge and WasteTreatmentEnergy UsageUsage of Water ResourcesCircular EconomyChemical SafetyManagement of Raw andPackaging Materials
SocialResponsibilitiesInnovation-drive and Intellectual PropertySafety and Quality of Products and ServicesSupply Chain SecuritySupport for Industry DevelopmentEquality, Inclusion and DiversityTalent Attraction and RetentionEmployee Training and DevelopmentOccupational Health and SafetyRural Revitalization and Social ContributionsData Security and Customer PrivacyProtection
| 01 | 02 |
Responsibility forGovernanceOperation by the Boardof Directors, the Board ofSupervisors and the GeneralMeetings of ShareholdersTransparent DisclosureRisk ManagementBusiness Ethics
Annex
Responsibility for GovernanceEnvironmental ResponsibilitiesAnnex
0102
Social ResponsibilitiesIntroductionEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
Description of the Report PreparationThis is the third environmental, social and governance (ESG) report issued by Kingfa Sci. & Tech. Co., Ltd. (hereinafter referred to as"the Company", "we" or "us"), intended to integrate the concept of sustainable development into corporate governance, and com-prehensively present our ESG practice and related performance to our stakeholders.
Unless the context otherwise requires, the following words shall have the following meanings in this Report:
Terms
Company LawmeansCompany Law of the People's Republic of ChinaCSRCmeansChina Securities Regulatory CommissionArticles of AssociationmeansArticles of Association of Kingfa Sci. & Tech. Co., Ltd.The Company/wemeansKingfa Sci. & Tech. Co., Ltd.Shanghai KingfameansShanghai Kingfa Sci.& Tech.Dvpt. Co., Ltd.Jiangsu KingfameansJiangsu Kingfa Sci.&Tech. Advanced Materials Co., Ltd.Tianjin KingfameansTianjin Kingfa Advanced Materials Co., Ltd.Guangdong KingfameansGuangdong Kingfa Sci.& Tech. Co., Ltd.Wuhan KingfameansWuhan Kingfa Sci.& Tech. Co., Ltd.Chengdu KingfameansChengdu Kingfa Sci.& Tech. Advanced Materials Co., Ltd.Kingfa (USA)meansKINGFA SCIENCE & TECHNOLOGY (USA), INC.Kingfa (Europe)meansKINGFA SCI.&TECH. (EUROPE) GMBH.Kingfa (Malaysia)meansKINGFA SCI&TECH (MALAYSIA) SDN. BHD.Kingfa (India)meansKINGFA SCIENCE & TECHNOLOGY (INDIA) LIMITEDKingfa (Vietnam)meansKINGFA SCIENCE & TECHNOLOGY (VIETNAM) CO., LTD.Kingfa BiomaterialsmeansZhuhai Kingfa Biomaterials Co., Ltd.Zhuhai Vanteque Specialty Engineering PlasticsmeansZhuhai Vanteque Specialty Engineering Plastics Co., Ltd.Kingfa Carbon Fiber/Carbon Fiber CompanymeansGuangzhou Kingfa Carbon Fiber Materials Development Co., Ltd.Ningbo KingfameansNingbo Kingfa Advanced Materials Co., Ltd.Liaoning KingfameansLiaoning Kingfa Sci.& Tech. Co., Ltd.National Industrial Innovation CentermeansNational Industrial Innovation Center of Advanced Polymer MaterialsQingyuan MeijinmeansQingyuan Meijin Advanced Material Sci.and Tech. Co., Ltd.Kingfa EnvironmentalmeansKingfa Environmental Sci.&Tech. Co., Ltd.Kingfa (Spain)meansKINGFA ENVIRONMENTAL SCI.&TECH. SPAIN, S.L.Liaoning Kingfa Biomaterials meansLiaoning Kingfa Biomaterials Co., Ltd.Jiangsu Kingfa RecyclingmeansJiangsu Kingfa Recycling Co., Ltd.Guangdong Kingfa CompositesmeansGuangdong Kingfa Composites Co., Ltd.PPmeansPolypropyleneHDPEmeansHigh-density polyethylenePCmeansPolycarbonateABSmeansAcrylonitrile butadiene styrenePLAmeansPolylactic acidLCPmeansLiquid crystal polymerPAmeansPolyamideMBSmeansMethyl methacrylate-butadiene-styrenePPAmeansPolyphthalamide (high temperature nylon)PEEKmeansPolyetheretherketonePCRmeansPost consumer recycledCOCmeansCopolymers of cycloole?nPBSmeansPolybutylene succinatePPEmeansPolypheylene etherPFASmeansPer- and poly?uoroalkyl substancesVR/ARmeansVirtual reality/augmented realityRMBmeansChinese YuanReporting periodmeans2024
This Report covers the period from January 1, 2024 to December 31, 2024, punished on an annual basis. To increase the compara-bility and integrity of this Report, some content may be appropriately extended to previous and subsequent years.
Time Frame of the Report
This Report, which focuses on the Company, covers all branches and subsidiaries of the Company (collectively referred to as"the Group" together with the Company). The key environmental performance indicators are mainly speci?c to the Company, itsbranches and subsidiaries in China. The key social performance indicators are mainly about the Company, all its branches andsubsidiaries at home and abroad.
Coverage of the Report
All data and cases cited herein derive from the o?cial documents and statistical reports of the Company and its a?liates. Unlessotherwise speci?ed, all amounts hereunder shall be denominated in RMB.
Notes on Data of the Report
This Report was prepared with reference to Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies- Sustainability Report (Trial) and GRI Standards. Besides, it was written in combination with the Guidelines for Self-regulation ofListed Companies on Shanghai Stock Exchange No.4 - Sustainability Development Report, 2030 United Nations Sustainable De-velopment Goals (SDGs), A Practical Guide to Sustainability Reporting of Listed Companies issued by China Association for PublicCompanies, other standards and guidelines.
Reference Standards
This Report may be accessed and downloaded in the o?cial website of the Company (https://www.kingfa.com.cn/)and the web-site of Shanghai Stock Exchange (http://www.sse.com.cn/). This Report is provided for the readers in Chinese, English and Japa-nese. In case of any discrepancies among the three versions or con?icts resulting from languages, the Chinese version shall prevail.
Access to This Report
0304
To Stakeholders
For and on behalf of the Company, I would like to extend the sincerest greetings to all of you in this new year. In 2024, global cli-mate change and sustainable development will still be grave issues. As a worldwide leader in the ?eld of new chemical materials,the Company will actively respond to challenges and continuously promote the industry's transformation to green, low-carbon,and circular economy.In 2024, the Company will continue to deepen its strategic layout in recycled plastics, bio-based materials, green petrochemicals,and other ?elds. We will focus on the applications of new chemical materials, especially modi?ed plastics, special engineeringplastics, and composites in new energies, new infrastructure, 5G communications, arti?cial intelligence, and VR/AR. We will maketechnological innovations, optimize production capacity structure, accelerate R&D of new products, and provide cost-e?ective ma-terial solutions to satisfy diversi?ed customer needs. Through in-depth cooperation with global leading customers, we will achievemore breakthroughs in mass production of lightweight materials, biodegradable plastics, and other ?elds to consolidate our mar-ket competitiveness.
The Company continuously deploys its business in the upper, middle and lower reaches of the industry chain, for which we haveset an objective of achieving "one million tonnes in three ?elds". By 2030, the Company will produce 1 million tonnes of green plas-tics, recycle 1 million tonnes of waste plastics, and manufacture 1 million tonnes of recycled plastics. In 2024, the Company pro-duced 274,100 tonnes of green plastics, recycled 268,500 tonnes of waste plastics, and manufactured 348,100 tonnes of recycledplastics. Through this series of measures, we will achieve pollution and carbon reduction in the upper, middle and lower reaches ofthe industry chain, and make contributions to the global green and low-carbon circular economy.
Green Transformation and Promotion of a Low-carbon Future
We have realized a systematic adjustment of our corporate governance structure by transforming our team of founders into a teamof professional managers. Besides, we continuously strengthen our internal ESG training, especially professional publicity andimplementation among our senior executives, to ensure that the ESG concept is deeply rooted in their hearts and lay a solid foun-dation for our long-term development. In addition, we continuously optimize our digital factory, having achieved fruitful resultsin increasing our production e?ciency and management capabilities through intelligent means. The e?orts and achievementsin intelligent manufacturing, transformation, and upgrading in the ?eld of plastics have been fully recognized by the outside. Forexample, Shanghai Kingfa was titled a "Service-oriented Manufacturing Demonstration Enterprise" by the Ministry of Industry andInformation Technology, and with the project named "Integrated Complete Set of Technologies for Upgrading and Recycling ofWaste Plastics and Their Industrialized Applications", the Company won the "First Prize of Guangdong Provincial Science and Tech-nology Award". This is not only helpful for us to maintain our leading position in the path to green transition, but also ensures ourmore e?cient and transparent operation.In the context of global climate change, the Company will continue to be driven by innovation and unswervingly take the path tosustainable development, with green as the background color. We believe that only by closely integrating our growth with socialprogress and environmental protection can we truly achieve long-term development.Finally, I would like to express gratitude to all shareholders, partners, employees, and friends from all walks of life for their trust andsupport for us. We will continue to work hard, live up to your expectations, and strive for a green, low-carbon and sustainable future!
Optimization of Management and Practising of the ESG Concept
In terms of globalization arrangement, the Company will continue to speed up its overseas expansion, and achieve the operatingrevenue of RMB 8.792 billion abroad in 2024. The construction of Kingfa (Vietnam) as a new factory will further deepen our coop-eration with our major overseas customers and strike a balance between localization and internationalization of our supply chain.Active overseas expansion has not only enhanced our global competitiveness but also created more local employment opportuni-ties. We have employed 581 foreign employees and promoted the sustainable development of the regional economy.In business operation, we always regard product quality as the lifeline of an enterprise. Through strict quality control system, weensure provision of high-quality, reliable products for our customers. Besides, we continuously improve our customer service ca-pabilities, quickly respond to customer needs, and provide the customers with all-round technical support and solutions, with ourcustomer satisfaction up to 91.30%.Talent management has always been an area that has been arousing our great concern, as we have deeply realized that employeesare the most valuable assets of an enterprise. Therefore, we are committed to providing our employees with a favorable work en-vironment and career development opportunities. We help our employees grow through a sound training system and promotionmechanism. Besides, we pay attention to the health and safety of our employees and strive to create a harmonious and safe o?ceenvironment. In addition, we actively participate in public welfare activities in support of education, environmental protection,community development, and other ?elds, in an attempt to give back to the society.
Global Expansion and Joint Value Creation
Chief Sustainability O?cer Chairman of the Company
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
0506
About the Company
Company Overview
Principal Business and Important Products
Founded in 1993 and headquartered in Guangzhou Science City, Kingfa Sci. & Tech. Co., Ltd. ("theCompany, "we" or "us") "is a new material enterprise focusing on the R&D, production, sales, andservices of new high-performance materials, and providing brand-new material solutions for creat-ing safer, more comfortable, and more convenient life. After more than 30 years of development, theCompany has set up more than 60 subsidiaries worldwide, R&D and production bases in South Asia,North America, Europe, and other regions. In 2004, the Company (Stock Code: 600143) was listed onthe Main Board of Shanghai Stock Exchange.
As one of the companies with the most complete product categories in the global new chemicalmaterial industry, the Company is also the world's largest manufacturer of modified plastics withthe most complete range of products. Our products are mainly based on independent innovationsand development, including nine major categories, namely modi?ed plastics, environment-friendlyhigh-performance recycled plastics, fully biodegradable plastics, special engineering plastics, carbon?ber and composite materials, light hydrocarbon and hydrogen energies, polypropylene resin, andhealthcare polymers, These products are widely used in many industries such as automobiles, house-hold appliances, electronics, electrical engineering, communication electronics, new infrastructure,new energies, modern agriculture, modern logistics, rail transit, aerospace, high-end equipment, andhealthcare. We have established long-term strategic partnerships with many well-known enterprisesat home and abroad. With excellent product performance and environmental friendliness, our prod-ucts are exported to more than 130 countries and regions worldwide. We provide quality services formore than 1,000 well-known enterprises.
Guarantee supply chain securityEnhance the competitiveness ofmidstream business
Sectors of green petrochemi-
cals and new materials
Ningbo Kingfa: PP industry chainLiaoning Kingfa: ABS industry chainGreen petrochemicals
Synthesis capabilities of special engineeringplastics, fully biodegradable materials andbio-based materialsNew materialsResinsynthesis
Provide overall material solutionsCovering automobiles and householdappliances. Several ?elds such as elec-tronics, new energies and consumerelectronics
Sectors of modi?ed plasticsand new materials
General and engineering plastics solutionsAll-round green comprehensive solutionsfor recycled plasticsModi?ed plastics
Solutions to special engineering plastics,fully biodegradable plastics and bio-basedmaterials
New materialsMaterialsolutions
Diagram of Relationships between the Company's Four Major Sectors and Main Products
Leverage the advantages of polymertechnologies to extend downstreamapplications
Sectors of new materials and
healthcare
Carbon ?ber reinforced plastics
New materials
Super soft nitrile gloves, high-grade chem-
ical protection gloves, protective masks
and protective clothing, etc.
Healthcare
Products
Upstream
Midstream
Downstream
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
0708
Headquarters of the Company
Manufacturing and R&D Base of the Company
Michigan, USA
Wiesbaden, GermanyCuenca, Spain
Gurgaon, IndiaPune, IndiaKuala Lumpur, Malaysia
Guangzhou, China
Chennai
Global Layout
O?ces of the CompanyNote: This map is schematic in nature and used for an overview of a speci?c area only
Note: This map is schematic in nature and used for an overview of a speci?c area onlySan Francisco
San FranciscoLos Angeles
Los AngelesMexico
MexicoTokyo
TokyoPondicherry, India
Pondicherry, IndiaBinh Duong
Binh DuongHo Chi Minh
Ho Chi MinhSingapore
SingaporeJohannesburg
JohannesburgBangkok
Panjin, LiaoningTianjin Airport Economic Area
Wuhan, HubeiMianyang, SichuanChengdu, Sichuan
Xuzhou, Jiangsu
Kunshan, JiangsuQingpu, Shanghai
Ningbo, Zhejiang
Zhuhai, Guangdong
Qingyuan, GuangdongDanzhou, Hainan
BangkokChangchun
ChangchunShenyang
ShenyangQingdao
QingdaoWeifang
WeifangXinxiang
XinxiangChongqing
ChongqingLuoyang
LuoyangWuhu
WuhuHangzhou
HangzhouHefei
HefeiSuzhou
SuzhouNanjing
NanjingChangzhou
ChangzhouWenzhou
| Wenzhou | ||
| Fuzhou | ||
Xiamen
XiamenNanchang
| Changsha | Nanchang |
Nanning
NanningHong Kong
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
Dong Nai, Vietnam
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Corporate Culture
Development History
Development Strategy
1993
1997
2001
2014
In line with China's "Belt and Road" initiative and dual circulation in domestic and overseas markets, the Company adheres to thestrategic thinking of" strengthening the middle, consolidating both ends, being innovation-oriented, and achieving leap-forwarddevelopment", and strives to build a world-class R&D, marketing, manufacturing, and information platform to become a worldwideleader in new materials, providing support for national strategic materials.
The Company was established.
Guangzhou Tianhe Gaotang Pro-duction Base was established.
Shanghai Kingfa was established.
Wuhan Kingfa Sci. & Tech. Co., Ltd. was established.Kingfa Global Innovation Training DevelopmentCenter was established.
Grow together with partners, shareachievements, provide high-qualitynew materials for the society, andcreate a wonderful life.
Mission
Become the world'sbest new material en-terprise highly respect-ed within the industry.
Vision
Be people-oriented,achieve high-quality de-velopment, and performcompliance management.
Manage-
mentconceptBe value creator-oriented.
Values
Core objectives ofbusiness development
Leapfrogdevelopment
With the focus on the ambitious goal of achieving an output of RMB 100billion, facilitate sustainable and high-quality development in four majorbusiness sectors, namely modified plastics, new materials, green petro-chemicals,and healthcare.
Businessdevelopmentstrategy
Strengtheningthe middleConsolidatingboth endsFocus of high-qualitysustainable development
Being innovation-
driven
Guide collaboration in new technologies, upselling and outward operation.
Strategic development policy
2003
The Postdoctoral ResearchWorkstation was built.
2004
The Company was listed on the Main Board ofShanghai Stock Exchange.Mianyang Changxin New Material DevelopmentCo., Ltd. was established.The Academician Workstation was established.
2015
Kingfa Sci. & Tech. (USA), Inc. was established.Chengdu Kingfa Sci. & Tech. Advanced Materials Co., Ltd.was established.KINGFA SCI. & TECH. (MALAYSIA) SDN BHD was established.2019
Ningbo Haiyue New Material Co., Ltd. was acquired andrenamed "Ningbo Kingfa New Material Co., Ltd.".2020
Hainan Kingfa Sci & Tech Co., Ltd. was established.In 2020, Kingfa Medical was established.2021
Liaoning Bora New Materials Co., Ltd.was acquired.Zhuhai Wango Chemical Co., Ltd. wasrenamed "Zhuhai Kingfa Biomaterial Co.,Ltd."
2008
Mianyang Dongfang Special Engineering PlasticCo., Ltd. was acquired.2009
Zhuhai Wango Chemical Co., Ltd. was established.Tianjin Kingfa Advanced Materials Co., Ltd. wasestablished.
2010
Jiangsu Kingfa Sci.&Tech. Advanced MaterialsCo., Ltd. was established.The Company's sales exceeded RMB 10 billion.2013
Kingfa (India) was acquired.Guangdong Kingfa Sci. & Tech. Co., Ltd. wasestablished.
2022
Liaoning Bora New Materials Co.,Ltd. was renamed "Liaoning KingfaSci. & Tech. Co., Ltd."KINGFA SCIENCE AND TECHNOLO-GY (JAPAN) CORPORATION LIMITEDwas formally established.
2023
Kingfa Science & Technology (Viet-nam) Co., Ltd. was established.2024
The Company's Board of Directorswas re-elected. The chairman andmanagement were elected.
Expand and strengthen the polymer business; continuously expand itsbreadth and depth, and enhance its competitiveness.Give full play to the pillar role of the polymer business and anti-risk capabil-ity; guide the benign development in upstream and downstream businesssectors, and facilitate collaboration in the whole industry chain.
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
1112
National Key Specialized,Refined, Differentiated and
Innovative "Little Giant"
Enterprise
Guangdong ProvincialService-oriented ManufacturingDemonstration Platform
Guangdong Provincial Postdoctoral
Innovation Practice Base
Important Honors
The CompanyNational Industrial Innovation CenterNingbo Kingfa
Second Prize of theNational Scientific andTechnologicalAdvancement Award
First Prize of Guangdong
Provincial Science andTechnology Award
Provincial Quality Standard
Laboratory for Safety andEnvironmental Protection ofPlastic Materials and Products
Guangdong Provincial Polymer IndustryChain and Supply Chain Quality Linkage
Improvement Pilot Unit
Guangdong Provincial
Standard Leading
Enterprise
Postdoctoral Research
Workstation
2024 TechnologicallyLeading DemonstrationEnterprise
Five-star GrassrootsParty Organization
Postdoctoral InnovationPractice Base
Kingfa Biomaterials
Postdoctoral ResearchWorkstation
Zhuhai Vanteque Specialty Engineering Plastics
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
1314
Our Sustainability Management
Consistently adhering to the core values of being "value creator-oriented", the Company is committed to empowering a better lifeand natural ecology with high-quality products and services, and insists on creating sustainable value responsibly. The Companyattaches great importance to ESG issues, incorporates ESG governance into strategic decision-making, and ensures the coordinat-ed promotion of ESG goals and business growth by establishing a full-process management system covering strategic planning,execution monitoring, and performance appraisal.ESG Management System
The Company has built an ESG architecture suitable for its own business attributes and management model, created an ESG ar-chitecture at four levels (i.e. the Board of Directors, Strategy and Sustainability Committee, ESG working group, and ESG-relatedfunctional departments), and appointed special ESG functional personnel to manage its ESG matters. In the ESG architecture, thedivision of labor, rights, and responsibilities are clear at all levels. The internal ESG work is managed top-down, to better integratethe ESG concept into the Company's strategic planning, and promote the Company's high-quality development.
In order to implement the sustainability concept, the Company has formulated a set of comprehensive internal policies on the ESGwork and disclosed some key policies on its o?cial website to guide the management of ESG-related matters. The ESG body is re-sponsible for monitoring the Company's compliance with the policies and procedures described below, and updating the policiesto respond to changes in the ESG-related policies and standards.
TopresponsibleteamDecision-
makingLevelManagementExecutionLevel
ESG-related functional departments
Include all functional departments and subsidiaries related to important ESG issuesof the Company.During the daily operation, actively perform speci?c ESG-related work within thescope of responsibilities, and promote the achievement of various key ESG perfor-mance indicators and goals under the guidance of the ESG working group.
ESG working group
It is composed of the Company's senior executives, heads and executives of ESG-re-lated functional departments.Handling daily a?airs on the ESG, the ESG working group supervises and managesthe ESG-related work of key functional departments, implements ESG strategiesand speci?c measures, and reports to the Strategy and Sustainability Committee ona regular basis.
Strategy and Sustainability Committee
Incorporate ESG work into strategic planning; study the Company's medium andlong-term development strategic plans and make suggestions; carry out researchon the Company's sustainable development, ESG, and other related matters; andmake relevant suggestions and decisions.
Board of Directors
As the top team responsible for ESG work, assume full responsibilities for the Com-pany's ESG strategies, management, and external disclosure.
ESG Architecture
ESG mechanism
Governance mechanismSpeci?c actions
Information report-ing mechanism
The management regularly reports the progress ofsustainability-related work to the Strategy and Sustain-ability Committee and the Board.
Supervisionprocedures andmeasures
Important matters related to sustainability are re-viewed and approved step by step through specialsigned reports.
Evaluation details
Take energy conservation, emission reduction, andimprovement of single-unit production capacity asevaluation indicators for relevant responsible persons;incorporate the ESG rating into the evaluation of theESG management.
EnvironmentEnvironmental Policies
of the Company
Labor and Human Rights Policies
of the CompanySustainable Procurement Policies
of the Company
Business Ethics Policies of the
Company
SocietyGovernance
ESG-related policies
| E | S | G |
1516
Communications with the stakeholders
Extensive listening to the stakeholders' opinions is one of the important guarantees for the sustainable and healthy developmentof the Company. The Company actively listens to the stakeholders' suggestions and expectations on the Company's sustainabledevelopment, and ensures e?ective communications with the key stakeholders through various communication channels.
Government and regulatory
authorities
Shareholders and investorsCustomersEmployeesSuppliers and partnersCommunities and industriesMedia
Responses to national strategies
Compliance operation
Risk managementBusiness ethics
Stable return on investmentTransparent information disclosure
Compliance operationRisk managementIntellectual property protectionScienti?c and technological inno-
vation
Product quality and safetyCustomer servicesResponsible business and marketingScienti?c and technological innovation
Privacy protectionEnvironment and carbon management
Talent attraction and retentionProtection of employees' rights
and interestsEmployee development and
trainingOccupational health and safety
Sustainable supply chainSupplier empowermentTransparent procurement
Green products and designsClimate Change TacklingBiodiversity and ecological
protectionFacilitation of the industrydevelopmentPublic welfare donations
Information disclosure anddisseminationResponsible business and mar-
keting
Government surveysCompliance inspectionsRegular meetings and exchangesParticipation in government coop-eration, exchanges and seminars
Regular and temporary announce-
mentsOperation by the Board of Directors,the Board of Supervisors and theGeneral Meetings of ShareholdersPerformance brie?ngInvestor hotlineCompany research
Customer exchange and cooperationCustomer satisfaction surveysTechnical seminarsCustomer auditDaily communication with customersCon?dentiality of customer information
Employee trainingWorking meetingsEmployee symposiums anddemocratic communicationsEmployee engagement investi-
gationEmployee activities
Supplier management and
auditSupplier training and empow-
ermentSupplier communications
Supplier conferences
Environmental protection activi-
tiesIndustry conferences and exhibi-
tionsIndustry-academia collaborationPublic welfare and volunteer
activities
Regular and temporary infor-mation disclosureCommunications and inter-
viewsO?cial accounts platform
Stakeholders
1615
Focuses andexpectations
Communicationchannels
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
1718
Analysis of Material Topics on ESG
Materiality issues are the focuses of the Company's sustainability management, identi?cation and evaluation of ESG risks. To fullyunderstand the key concerns of the stakeholders and better integrate the demands and expectations of the stakeholders into itsown sustainability management practices, the Company identi?es and analyzes the materiality issues, identi?es the database ofESG issues based on the in-depth analysis of the Company's activities and business relationship background, extensively solic-its opinions from various stakeholders through questionnaire surveys, and ranks the issues by materiality. In the evaluation, theCompany prioritizes risks that might seriously a?ect its business, damage its reputation or arouse the greatest concern among thestakeholders. Such prioritization enables the Company to e?ciently allocate resources and formulate mitigation strategies for themost signi?cant risks to better manage ESG-related matters.
During the reporting period, the Company extensively solicited opinions from the stakeholders through questionnaire surveys andcomprehensively created a matrix for the current year's issues from the perspective of "?nancial materiality" and "impact material-ity", identifying a total of 9 issues of double materiality, 4 issues of ?nancial materiality only, and 4 issues of impact materiality only.
Understand theCompany's activities
and businessrelationshipbackground
Understand the Company's activities and business relationships.Understand the external objective environment.Understand the key a?ected stakeholders.
Based on the issues identi?ed in the Guidelines, identify other potential materiality issues withreference to peer companies and rating standards.Identify the impacts, risks, and opportunities related to the issues, and summarize them to forma database of the Company's issues.
Identify the evaluation results that a?ect the materiality and ?nancial materiality through ques-tionnaires, interviews, and other forms.Integrate the evaluation results to form a matrix for issues of double materiality.
Materiality Analysis Procedure
Materiality of economic, social andenvironmental impacts
Very material
Evaluation andprioritizationof the issues bymateriality
Database ofidenti?ed ESGissues
Materialitycon?rmationand reporting
Issues merely of impact materiality
Issues merely of ?nancial materialityImmaterial issuesImpacts of Materiality Issues on the Value ChainGeneral Very material
Equal treatment to small andmedium-sized enterprises
Rural revitalizationContributions to the society
Usage of waterresources
Environmental compliance managementGreen products and designs
GovernanceDue diligenceEnergy usageData security and customerprivacy protection
Safety and quality of products and services
Innovation-driven
ChemicalsafetySupply chainsecurityWaste disposalCirculareconomy
Pollutant dischargeAnti-commercial briberyand anti-corruptionEmployeesClimate change tackling
Communicationswith stakeholders
Anti-unfaircompetitionFacilitation of the In-dustry Development
Issues of double materiality
Impacts of Materiality Issues on the Value Chain
of double materialitymerely of ?nancial materialityonly of impact materiality
Issue typeMateriality issue
Supplychain
Production/operation
CustomersEmployeesSociety
Society
Innovation-drivenChemical safetySupply chain securitySafety and quality of productsand servicesData security and customerprivacy protectionEnvironment
Waste disposalPollutant dischargeCircular economyGovernance
Anti-commercial bribery andanti-corruptionEnvironment
Green products and designsEnvironmental compliancemanagementGovernance
GovernanceDue diligenceSocietyEmployeesEnvironment
Energy usageClimate Change TacklingGovernance
Communications with stake-holders
Con?rm or adjust the results of material issues based on the opinions of the Strategy and ESGCommittee.Disclose the key points in the annual ESG report according to the Guidelines.
SocialEnvironmentalGovernance
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
1920
Response to ESG Goals
UN Sustainable Develop-
ment Goals (SDGs)
Our goalsOur actions
Progresstowards2024 goals
From 2022 to 2030, we will continuously optimize the safety performance of ourproducts, to receive no health or safety complaints from the customers.
The Company adopts advanced production technologies and a strict quality control system to ensurethat all links of products from the procurement of raw materials to the delivery of finished productsconform to safety standards. We select environmentally friendly and non-toxic raw materials to produceplastic products, reduce the use of harmful substances, and protect customer health.
AchievedFrom 2022 to 2030, we will ensure annual zero work-related deaths and a cover-age rate of 100% in the physical examination.From 2022 to 2030, we will ensure that the annual health and safety risk assess-ment covers 100% sites.
The Company constantly improves its health and safety management system, betters its health and safetymanagement, regularly organizes occupational health inspections and safety risk assessment, promptly de-tects and addresses occupational disease risks, and carries out health promotion activities.
Achieved
From 2022 to 2030, we will ensure that the annual coverage rate of the collectivecontract is up to 100%.
The Company respects the employees' freedom of association and collective bargaining rights. Weactively establish communication and cooperation mechanisms with our trade union, encourage andsupport our trade union to negotiate on an equal footing with the Company on matters such as workingconditions, remuneration, bene?ts, working hours, rest, and vacation on behalf of the employees, andseek mutually acceptable solutions.
Achieved
Compared with 2022, the average skills training time per employee will increaseby 2 hours by 2030.
The Company encourages and supports all employees to participate in training activities. Regardless oftheir positions, they have the opportunity to receive training and achieve career development. Besides,the employees are regularly organized to participate in external training activities such as industry con-ferences, seminars, and professional training organizations to broaden their learning channels.
Achieved
From 2022 to 2030, we will ensure that the annual coverage of social insurance is100% among the employees.
The Company provides comprehensive social insurance and housing provident fund for the employees,to ?rmly guarantee the health and future of the employees and their families.
Achieved
Achieve employee satisfaction among more than 98% of the employees in 2030.
The Company conducts an employee satisfaction survey at least once a year, and extensively collectsthe employees' opinions and suggestions on the working conditions, remuneration, bene?ts, career de-velopment, etc. through questionnaires and symposiums.
In steady prog-
ressFrom 2022 to 2030, ensure that no discrimination or harassment occurs everyyear, and the coverage rate of discrimination and harassment training reaches100%.
The Company is always fair, impartial and transparent in all aspects of recruitment, promotion, salary,training, and career development. We continuously carry out publicity and education activities to pre-vent and stop harassment.
Achieved
Compared with 2022, the comprehensive energy consumption per unit of out-put will be reduced by 25% by 2030.
The Company regularly conducts energy efficiency evaluation, increases single-machine capacity byenergy-saving renovation with advanced production technologies and processes, includes energy con-servation objectives in related personnel's KPI and reduces its energy consumption.
In steady prog-
ress
By 2030, the emissions of air pollutants (VOCs, PM, SO2, NOx) per unit of outputin the production process will be reduced by more than 30% compared with2022.
In the early stage of production equipment and process design, the Company gives priority to low-pol-lution production equipment and raw materials to reduce the generation of pollutants. In new projects,priority is given to the use of high-e?ciency pollution control processes, and the pollutant control fa-cilities of existing projects gradually undergo iterative upgrading to improve pollution control e?ciencyand reduce total pollutant emissions. Strengthen the operation and management of pollution controlfacilities to ensure e?cient and stable operation, and emission up to standards.
Achieved
Establish a complete waste classi?cation and recycling system. The recycling rateof industrial waste will increase by 60% by 2030 compared with 2022.
The Company is committed to converting the wastes into resources and improving the resource utiliza-tion of the wastes through recycling and reuse.
In steady prog-
ress
In 2024, the Company joined the United Nations Global Compact (UNGC) and actively implemented the ten principles of the UNGCbased on United Nations conventions, including human rights, labor standards, environment, and anti-corruption, to facilitate theachievement of the SDGs.
Customer health and safety:
Occupational health and safety:
Collective contracts:
Career:
Coverage of social insurance:
Employee satisfaction:
Anti-discrimination and anti-harassment:
Energy consumption:
Air pollution:
Wastes:
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
2122
UN Sustainable Develop-
ment Goals (SDGs)
Our goalsOur actions
Progresstowards2024 goalsCompared with 2022, the greenhouse gas emissions per unit of products will be re-duced by at least 30% on a year-on-year basis.Compared with 2022, achieve a 30% reduction in carbon emissions per unit relatedto procurement activities by 2030.
The Company identi?es, inspects, and monitors greenhouse gas emissions during its operations,establishes a management and control system and continuously optimizes it. We gradually ex-pand the scope of application of green energies, build green parks and factories, procure the inter-ested parties to practice green and low-carbon production, living and o?ce methods, establish agreen procurement mechanism and a carbon emission management system in the supply chain,and promote the realization of net-zero emission goals in the supply chain.
In steady progress
From 2022 to 2030, we will ensure that no corruption occurs every year.
The Company resolutely opposes any forms of corruption and bribery, encourages the employeesto actively participate in the anti-corruption and anti-bribery work, establishes an internal whis-tleblowing mechanism, and provides necessary protection and support for whistleblowers.
AchievedFrom 2022 to 2030, we will achieve full coverage of business ethics training (on cor-ruption and information security) among all our employees, to ensure that our an-nual training coverage will be up to 100%.By 2030, the average business ethics training hours per employee will increase by 2compared with 2022.
The Company continuously strengthens its business ethics education and training for the employ-ees, to improve their understanding of business ethics and enhance their self-discipline skills.
Achieved
From 2022 to 2030, the Company will ensure no fraud, strengthen internal control,increase the employees' awareness of integrity and risks, and reduce fraud risks.
The Company will establish a sound internal control system, strengthen integrity education for theemployees, enhance all the employees' vigilance and ability to identify frauds, and ensure that allbusiness activities will be based on the cornerstones of truthfulness, accuracy, and compliance.
AchievedFrom 2022 to 2030, ensure that the business ethics risks are evaluated and internallyaudited at least once a year to comprehensive assess the risks that the Companymight face in business ethics, and put forward corresponding improvement mea-sures and suggestions.
The Company conducts a comprehensive examination regarding the business ethics at least oncea year. The Audit Department evaluates and controls the business ethics risks. It is responsible foridentifying risks of di?erent departments and positions.
Achieved
From 2022 to 2030, ensure that all employees can timely and accurately disclosetheir external relationships or activities that have potential con?icts of interest withthe Company's business, with a disclosure rate of 100%.
The Company enhances its employees' awareness of and alertness to the conflicts of interestthrough training and education, and ensures that the employees can consciously abide by theCompany's policies on the con?icts of interest.
AchievedFrom 2022 to 2030, ensure that the annual sustainable procurement training cover-age of purchasing specialists reaches 100%.
The Company regularly organizes internal training to communicate sustainable procurement re-quirements to procurement engineers to ensure e?ective implementation of policies.
AchievedFrom 2022 to 2030, ensure that the suppliers comply with labor laws and regulations,and annually, 100% suppliers are quali?ed in protecting the rights and interests oflaborers.From 2022 to 2030, the Company ensures that 100% of key raw materials will be fromthe suppliers with environmental management system certi?cation (ISO 14001).From 2022 to 2030, ensure that the supplier code of conduct will be 100% signed ev-ery year.Compared with 2022, the on-site audit coverage of core suppliers will increase to90% by 2030.
The Company has issued the Sustainable Procurement Policies to regulate the procurement stan-dards and requirements for environmental protection, laborers' human rights, business ethics,etc., which shall be implemented by the Purchasing Department and supervised by the executivedeputy general manager of the General Manager's O?ce. When selecting the suppliers, the Com-pany regards compliance with labor laws and regulations, and protection of labor rights and inter-ests as important access conditions, includes labor rights protection clauses in the agreements,and actively procures the suppliers to pass the system certi?cations related to environmental andlabor rights.
In steady progress
From 2022 to 2030, we will ensure that no major information security incident willoccur every year, guarantee the security of our business data and customer informa-tion, and prevent information leakage and abuse.
The Company regulates and manages the collection, storage and use of personal data, prohibitsthe employees from disclosing customer information and other personal data to unauthorizedthird parties, conducts regular information security risk assessment, discovers and repairs securityvulnerabilities in time, drafts emergency plans for information security incidents, responds to andhandles information security incidents in a timely manner.
Achieved
A major information security incident was an information security incident that caused a loss of more than RMB 100,000
Greenhouse gas:
Anti-corruption and anti-bribery:
Business ethics training:
Anti-fraud:
Evaluation of business ethics risks:
Con?icts of interest:
Sustainable procurement training:
Supplier management:
Information security:
2324
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
Sustainability Honors and Recognition
ESG ExcellenceAwards
The 16
thChina Corporate Social ResponsibilityAnnual Conference: Outstanding Responsible
Enterprise of the Year
2024 GoldenBee CSR · Chinese List:
In?uential · Leading Enterprise Awards
2024 Green and SustainabilityContribution Awards
ESG Pioneer 60: ESG Explorerof the Year Award - Chairman
Chen Pingxu
HK ESG Reporting Awards (HERA)
ShiDai Media
Southern Weekly
Cailian Press
GoldenBee ThinkTank
syobserve.com, gongyidaily.com
jiemian.com
Shanghai Kingfa- Gold Medal
Ecovadis
Climate questionnaire: Level BWater security questionnaire: Level B
CDP
Level AWind
The 2
nd
Guoxin Cup: ESGGolden Bull Award Top 100China Securities Journal
The 1st
ESG Golden AntelopeAward: ESG Leading Enterprise in
Environmental Practice in 2024
2024 Cailian Press Zhiyuan Award:
ESG Pioneer Award
The 2ndSiemens Zero-CarbonPioneer Award: EmpowermentPioneer Excellence Award
Siemens
Top 10 Green Development
Cases in 2024
Beijing News, BK EconomyBest Listed Company atESG Practices in 2024Easy-Board, Value Online
GoldenBee 2024 SustainabilityReport of an Outstanding ListedCompany in the Greater Bay Area
GoldenBee ThinkTank
Sustainable Innovation
& Circularity Award
CCIFC
2526
Digital Intelligence EmpowermentAccelerating the Development ofNew Quality Productive ForcesBased on the concept of "empowering high-quality sustainable development through digital transformation", the Com-pany transforms its development mode and optimizes its business composition through digital intelligence, continu-ously refreshes its growth momentum, deepens the collaboration among di?erent business sectors, and acceleratesthe development of the new quality productive forces.
Platform selection and implementation preparation were completedfor the global collaborative marketing platform project.Zhuhai Base and Kingfa (Europe) launched the integrated produc-tion, supply, marketing and ?nancial projects to re?ne the granulari-ty of management.The IT infrastructure construction of Kingfa (Vietnam) and LiaoningKingfa Biomaterials was completed, realizing interconnection withthe Group.Preparations are being made for launching the human resource in-formatization upgrade project, to get ready for the comprehensiveimprovement of organizational control capabilities, employer attrac-tiveness, and human service capabilities.Our ?ve major bases in China have launched the electronic account-ing ?le system online for operation, realizing online ?ling of all attach-ments and one-stop inquiry, and reducing our internal control risks.
Informatization results
During the reporting period
digital workshopsCompared with traditional factories, thee?ciency per capita has increased by50%
and the defect rate of productshas been reduced by40%
the Company invested RMB
million in building
In the second half of 2024, the Company launched a human resource informatization upgrade project, with a view toimproving the organizational control capabilities, employer attractiveness, human service capabilities, and technicalsupport capabilities. Complete reorganization has made the organizational architecture more ?exible, positions morestandard, preparation control more precise; optimized the employee employment and classi?cation, facilitated pan-oramic management of the employees' electronic ?les, and increased "electronic signing" e?ciency; standardizedsalary accounts, achieved uni?ed hierarchical control and budget control over labor costs; made services available toall employees and application scenarios more diversi?ed, which greatly improved the employees' self-service experi-ence, let them feel the Company's cultural care and made the services more expedient.
Human Resource Informatization Upgrade Project
Five Core Tasks
The coverage of third-party malls for procurementand the categories of materials on shelves were con-tinuously expanded, which further improved the pro-curement e?ciency and transparent procurement.Through digital transformation of R&D, ideologicaluni?cation and approval of the planning report werecompleted, thus laying a solid foundation for the in-troduction of digital technologies to comprehensivelyimprove R&D e?ciency and product competitiveness.In the ?eld of data application, a series of kanban ongroup revenue, PP price, procurement analysis andinventory analysis have been added to help the seniorexecutives understand business information in realtime and speed up team response.
Topic
Special project foroptimization of organization andposition management
Special project for controllinglabor cost budgets and preparation
re?nement
Special project foroptimizing the employeelifecycle management
Special project for launching the wholesalary accounting process online
Special project for datacleaning and preparation
The Company's informatization aims tobuild a full range of operations manage-ment platforms with the focus on ERP,CRM, SRM, PPM, OA etc. by building auni?ed business support platform, andunify the core business processes andaccounting standards of the branchesand subsidiaries, thus promoting effi-cient internal supply chain collabora-tion, and realizing a global collaborativework system that integrates production,supply, and marketing.
Informatization Improvement
Business processes, account-ing standards, and assessmentsystem standards for achievingcompany coordination
Vertical integration into theenterprise management andcontrol system
Coordination of research, produc-tion, supply, and marketing costsQuick response and e?cientdecision-making system
E?cient collaboration withupstream and downstream cus-tomers and suppliers
Lateral collaboration withthe supply chain system
Complete and integrated linkageof logistics, capital ?ow, human re-source ?ow, and information ?owVisual and controllableoperation management system
Our factory in Shanghaiwas evaluated as a
"service-oriented manufacturing"demonstration enterprise by theMinistry of Industry and Information
Technology
Informatization plan
information-based and digitalfactories
and
unmanned warehousehave been completed and put into use
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
2827
The electronic accounting ?le project was quickly promoted on a large-scale basis after its pilot promotion in SouthChina in early 2024, realizing the construction of a lifecycle system from collection and sorting to archiving of 13 typesof documents in the ?ve major production bases of modi?ed plastics. Through end-to-end process reconstruction,100% electronic archiving of documents in seven core business chains, including procure-to-pay and sell-to-collect,was realized, and the relationships between business documents and attachments were established to realize infor-mation linkage. The synchronous embedding of intelligent approval control nodes promoted an increase in the e?-ciency of expense reimbursement by more than 38.9%, and annually cut the costs of paper consumables by RMB 336thousand on average.
According to its strategic orientation for development, the Company promoted the transformation and upgrade ofthe purchasing malls from the sector of modi?ed products to the whole group. The project focused on the upgradeof group control and ecological empowerment of the platform. In this project, the mall platforms, non-raw materialprocurement organization model and business control plan were horizontally promoted to the four major businesssectors. The category strategy was vertically and synchronously expanded. A general standard product database wascreated for new modi?ed materials, and a cross-sector collaborative procurement mechanism was constructed. The"management" was promoted by "use". The use of non-raw material malls as carriers promoted the in-depth align-ment of petrochemical and new materials with the Group's management system. 5 categories of modi?ed materials,15 categories of petrochemical and new materials, and 2 categories of medical materials were launched in the onlinemalls. A Group-level procurement data asset pool was built, providing full business perspective and dynamic analysissupport for strategic procurement decisions.
Promotion of the Electronic Accounting File System
Malls from Modi?cation to Group-wide
Anchoring the intelligent manufacturing strategy under the national "14th Five-Year Plan", the Company set 2023 as the ?rst year ofits digital transformation, established its digital transformation strategies and goals, planned the digital transformation path, andadopted a two-step method at the physical manufacturing side. Firstly, Digitalization 3.0 was designed and implemented for theincremental domestic and foreign new factories, and large-scale technological transformation projects. Secondly, the existing do-mestic bases were transformed and upgraded, with their Automation 2.0 upgraded to Digitalization 3.0.During the reporting period, the Company implemented the demonstration project of a lean digital factory in the modi?cation sec-tor, for the purpose of realizing synchronous and coordinated development of key elements such as men, machines, and materialsthrough the in-depth implementation and active exploration of the project, accumulating experience, verifying the e?ectiveness,promoting the digital transformation model, gradually expanding this successful model to di?erent production bases and facto-ries, and completely increasing the production and operation e?ciency. We plan to realize Digitalization 3.0 for our factories ofmodi?ed products by 2030 to 2035, to lay a solid foundation for intelligence. The complete upgrade of intelligent manufacturingwas accelerated.
Digital Transformation
Goals of the lean digital factories of modi?ed products
Construction Status of Lean Digital Factories in the Modi?cation Sector
In combination with the complete SAPIndustry 4.0, a unified form is createdfor the Company's digital factories toachieve information system consisten-cy, uni?ed management and operation,and collaborative production processes.
Uni?ed form
Establish a multi-level planning collabo-ration and formula control system fromERP to MES/electronic process tables tohighly integrate production resourcesin the entire factory, and achieve effi-cient resource collaboration, real-timeaccurate data, and e?ective control overformula con?dentiality.
Production operations
Standardize and visualize the produc-tion processes; facilitate reliable and ef-?cient anomaly handling; and increasethe overall production efficiency, forthe purpose of e?cient on-site collab-oration, reliable quality traceability,automatic color match recommenda-tions, and strict margin control.
Workshop managementEquipment interconnection
Through equipment interconnection,parameter monitoring and formuladistribution are carried out to improvethe quality predictability and stability,and realize information perception, datapredictability, and quality consistency.
Arrival of rawmaterialsAutomaticunloading
Kingfa raw mate-rial warehouseStereoscopic ware-house/bulk storagetank
Separationsection
Pellets: automaticseparationPowder: automaticseparationAuxiliary materials:
automatic separationPowder: automaticseparation
Feeding section
Unpacking method:
automaticFeeding mode: auto-maticCentralized con?gura-tion: automaticMixing method:
high-speed mixing/pre-mixing
Finished goods
Packaging method:
automaticStacking method:
automaticFilm winding meth-od: automatic
New ?exible material mixing solution: fully automatic o?ine batching system + AGV +
fully automatic unpacking device + robot
Feature: modular designaccording to productrequirementsTarget: applicable to90% of the Group's prod-uct categories
O?ine materialseparation
Transfer by AGVBatch metering
Automatic unpack-ing technology
AGV/pneumaticAGV
Transportation method: AGV/pneumatic
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
The Company has introduced a variety of automation equipment to di?erent links of the production process, whichsigni?cantly improves test e?ciency and quality control capabilities, reduces labor costs, and realizes automationand intelligence of production tests.
Inspection Automation for Improving Inspection E?ciency and Quality
During the reporting period, the Company continuously developed and introduced intelligent manufacturing equipment such asintelligent stereoscopic warehouse system, automatic unpacking and feeding system, automatic detection system for raw materi-als and ?nished products, automatic packaging system, automatic transfer system and automatic spline injection molding system,in order to make factories highly automated and unmanned, improve the intelligence of manufacturing processes, and achieveremarkable results in improving production e?ciency and management ability as follows:
Online auto-matic detection
equipmentMonitoring in-
terface of on-line automatic
detection
equipment
They are used for online automatic sampling andtesting, covering heterochromatic points, density,fluidity, and color differences. The monitoring fre-quency increases by 97% and the detection cycle isshortened by 80%.The detection data can be monitored online bySPC in real time. The anomaly data can be alarmedinstantly and automatically pushed so that the sta-bility of the product processes is guaranteed.
Automatic
heterochro-
matic point
detectionequipment forraw materialsAutomatic par-
ticle densitytesting equip-
ment
The detection rate is high, and the detection effi-ciency increases by 50%, which can meet the detec-tion needs for 1 million tonnes of materials and an-nually reduce the employment of 1.5 labor workers.The self-developed particle density tester does notrequire sample preparation, characterized by lowcost, small sample size for tests, low energy con-sumption, easy operation, and increased detectionefficiency by 50%. It has been promoted by theCompany.
Incoming materialsProcess
Automaticinjectionmolding
equipmentAutomatic
particle colordi?erencetester
The whole process of machine washing, moldchange, injection molding, water shearing andpackaging is automatically integrated, controlled,and traceable.12 samples are loaded at one time, and the equip-ment repeats the tests as set, automatically homog-enizes and realizes unattended testing.
3029
Realize the standardization and visualizationof the production process. Quality inspectioncan be traced with one click, process inspectionpersonnel can be reduced by 50%, and the en-tire quality process can be fully traceable.
Collect product-related data in the entire manu-facturing process; provide data support and di-rection for lean improvement, scale expansion,and long-term decision-making of enterprises,as well as basic data for companies to establishindustry standards.
Adopt the intelligent stereoscopic warehousemanagement system and MES to realize un-manned outbound and inbound delivery manage-ment in the whole process of material productionfrom demand to automatic delivery by AGV.
Increase production e?ciency, single-unit produc-tion capacity of the workshop by 20%, and annualoutput per capita by 50%. Reduce the power con-sumption per unit of exteriors by 3 kWh/t.
Develop a complete range of production busi-ness procedures, standardize the operation ofeach node, and reduce the employees' misop-eration rate by 80%. Realize multi-directional monitoring of produc-tion data, visual refined margin control, and theaverage margin per order can be reduced by 50%.
Highly automated and unmanned
Finished products
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
From April to October 2024, in order tofurther improve the intrinsic safety ofproduction equipment and deepen theCompany's digital transformation con-cept, Zhuhai Vanteque Specialty Engi-neering Plastics invested more than RMB4 million in carrying out an automationimprovement project for high-tempera-ture nylon equipment. Zhuhai VantequeSpecialty Engineering Plastics built aspecial project team to complete theautomation improvement research,scheme design, installation, debugging,and commissioning of high-temperaturenylon equipment, reducing the frequen-cy of production operations from about147 times/batch to 4 times/batch. Thisautomation improvement project effec-tively reduced the safety risks caused byhigh-frequency operations and reducedthe risk of personnel's on-site exposure.
To accelerate the digital transformation of R&D, the Company vigorously promotes the deep integration of theGroup's informatization work with its business and organizational changes, achieves e?cient collaboration andlinkage with the help of project operations, and continuously refines the programs titled Project Managementand Informatization Methodology. In these programs, teaching and training activities are carried out for manybusiness segments of the Group, with a total of 9 training sessions, covering 400 trainees from the Jincai Program,backbones of the Technical Center, backbones of the HR Department, and other groups, laying a solid foundationfor the cultivation of talents for the Group's informatization. In April 2024, the Company held a training session fo-cusing on project management, with a total of 90 online and o?ine participants. As a key link for accelerating thedigital transformation of R&D, project management is of great signi?cance for improving team e?ciency and inno-vation capabilities. This training program covered the core pain points of project management, practical skills, andapplications in digital transformation. It supported the professional growth of the employees through the lectur-ers' lectures, trainees' questions, group discussions, result presentations, interactive PK, and other links, to jointlypromote the Company's innovation and development on the road of digital transformation.
Improved Automation of High-temperature Nylon Equipment for ReducingOperational Safety Risks
Digital Transformation Training for Enhancing Project Management Capabilities
Additional Control Valves of the Project
Digital Project Management Transformation Training
3231
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexEnvironmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
Additionalcontrol valves
EnvironmentalResponsibilities
Invested more than RMB
million in
23.79
million kWh wasThe power of
m
126,708The water of
SDGs benchmarking
Highlighted results
As the world's leading enterprise of new chemical materials, theCompany has always regarded environmental protection as thecornerstone of its survival and development, leading the industryforward with "green, low-carbon, and sustainable" developmentconcept. Through continuous technological innovation and indus-trial upgrading, we are committed to minimizing the impacts onthe environment and protecting the blue planet while ensuringproduct quality and performance in combination with scienti?c re-source management and recycling.
The waste recycling and utilizationrate was up to42%
t348,100and produced
The total greenhouse emissions ofdomestic production bases (Scope 1 +Scope 2 + Scope 3) were up to
13.9763
million tonnes of carbon dioxideequivalents
Produced274,100t green plasticsrecycled268,500t waste
environmental protection
The carbon emission intensity per unitof domestic modified plastics (Scope1 + Scope 2) declined by
27.58%
compared with that
in 2022
plastics
recycled plasticsgenerated by PV
was recycled/re-utilized
3536
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Climate Change TacklingIn response to the national goal of "2030 Carbon Peaking and 2060 Carbon Neutrality", the Company o?cially launched the "green,low-carbon, and circular" actions in 2021. The Company is committed to developing more environmentally friendly and ener-gy-saving production processes and technologies, continuously reducing carbon emissions, improving energy utilization e?cien-cy, promoting clean energies, optimizing energy structure, and increasing the green level of products, in order to achieve the goalof carbon neutrality and contribute to the global response to climate change.
The Company actively establishes a climate change management system, joins hands with the stakeholders to establish a "car-bon" management system, veri?es corporate carbon footprints according to relevant standards, continuously reduces emissions,and regularly discloses the progress of carbon neutrality. In the Environmental Management Policies, the Company speci?es thatthe Strategy and Sustainability Committee of the Board of Directors is a department that reviews the greenhouse gas governanceto coordinate and manage the Company's "carbon peaking and carbon neutrality" work. The General Manager's O?ce, o?ces,branches, and subsidiaries perform their respective duties to ensure the e?ective implementation of relevant practices and objec-tives.
The Company has established a dual-carbon strategy with Kingfa characteristics, planned to reduce plastic pollution caused by itsbusiness operations while reducing carbon emissions, and helped the industry chain reduce its overall emissions by 2060. For thispurpose, we have drafted a detailed dual-carbon action plan and low-carbon product strategy, and accelerated our R&D of morelow-carbon and environment-friendly products.
Based on the in-depth analysis of operating activities and business relationship backgrounds, the Company proactively identi?esand manages possible impacts, risks and opportunities arising from the climate change. In the future, the Company plans to fur-ther carry out more in-depth identi?cation of climate impacts, risks and opportunities to adapt to the potential impacts caused bythe climate change, and formulate corresponding countermeasures for di?erent types of potential risks, in an attempt to achievecomprehensive identi?cation, scienti?c assessment, e?ective prevention and orderly control to ensure its sustainable operations.
Identify, inspect, monitor, andmanage emissions; establish acontrol system and continuouslyoptimize it; and gradually expandthe application scope of green en-ergies.
Build green parks andgreen factories; promoterelevant parties to prac-tice green production, liv-ing and o?ce methods.
Establish a green procure-ment mechanism and acarbon emission manage-ment system for the sup-ply chain to promote therealization of the emissiontargets of the supply chain.
Select key products and checkthe carbon footprint of productsaccording to relevant standards;continuously improve and re-fine emission reduction work;and regularly make them public.
Construct R&D, design, pro-duction, supply, and servicesystems for green low-car-bon reproduction, contin-uously improve efficiency,and achieve the carbonemission reduction targetper unit product.
Construct a green plas-tic recycling system;promote and continu-ously improve it.
Create a full value chain to providelow-carbon solutions, accelerate theoverall emission reduction of the in-dustry, and cooperate with the entireindustry chain to verify the carbonfootprint of the product lifecycle andcontinuously reduce emissions.
Potential Impacts of Climate Change on the Company
Impact, Risk and Opportunity Management
Governance
Strategies
Action Strategies of the Company for "Carbon Peaking and Carbon Neutrality"
Quality controlFuture planning
Accuracy, authority, and recognition of carbonemission data based on life cycle assessment (LCA)Provisioning of data on carbon emissions for thewhole series of plansCarbon emission data computing system with thecapability for constant improvement
Data on carbon emissionsLow-carbon material solutions
Gain insight into the future low-carbon de-velopment trend and make advance arrange-ments for material solutions, certificationrequirements, etc.Cooperate with the customers for joint devel-opment, and truly help the customers achievethe goal of carbon reduction
Complete production strengths and process con-trol of the factoryQuality stability of PCRs, GRS certi?cation, TC cer-ti?cation, etc.A complete range of control procedures and sys-tems for production capacity and process stabilityProperties and quality stability of finished prod-ucts; strict control monitoring system
Bio-based solutions: bio-resins or bio-based?ame retardants, bio-based additivesFactory certi?cationThird-party authoritative material certi?cationEnvironmental substance certification anddeclaration of conformity for the whole batch
Low-carbon Product Strategies
The fulfillment of globalcarbon neutrality goals isaccelerated. The policiessuch as carbon tari?s andcarbon allowances aretightened. The enterpris-es are facing stricter car-bon emission constraintsand increasing compli-ance costs.
Customer demand forlow-carbon products hassurged, and the compet-itiveness of traditionalhigh-carbon productshas declined. As a result,the enterprises have nochoice but to upgradetheir technologies andadjust their product mix.
Extreme weather events(e.g., flooding and hightemperature) might causedamage to productionfacilities and supply chaindisruptions, and increaseoperation and mainte-nance costs.
The public pays moreattention to corporateclimate actions. Envi-ronmental performancedirectly affects brandimage and capital mar-ket evaluation.
Regulatory andpolicy pressure
Market demandtransformation
Fluctuations inoperating costs
Correlation withbrand reputation
3738
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Become a key enabler in thelow-carbon transformation of thesupply chain.
Collaborative carbon reductionin the industrial chain
Identi?cation and Management of Climate Change Risks
Strategic "Carbon" Target of the Company
In February 2024, the Company and the National Industri-al Innovation Center jointly undertook the team buildingfor drafting the national standard titled Calculation ofCarbon Emissions from Physical Recycling of RecycledPlastics and the ?rst work meeting for standard revision.As a core promoter, the Company relied on its techno-logical accumulation and industrial synergy advantagesin the ?eld of recycled plastics to work with participatingexperts to transform enterprise-level carbon manage-ment experience into national standards. This not onlyprovided a uni?ed, scienti?c and feasible carbon account-ing system for the industry, but also procured the entireplastics industry chain to achieve the carbon peak andneutrality goals as soon as possible.
(1) Scope 1: Direct greenhouse gas emissions, including consumption of fixed equipment necessary for production, fuel consumption of
means of transport, production processes of raw and auxiliary materials, refrigeration equipment, dissipation of the factories' septic tanks,and other activities within the business scope.
(2) Scope 2: Indirect greenhouse gas emissions from incoming energies, speci?cally electricity and steam provided outside the organizational
boundaries.
(3) Scope 3: Other indirect greenhouse gas emissions, speci?cally including Type 1 purchased goods and services, Type 3 fuel and energy
related activities (parts not included in Scope 1 and Scope 2), Type 4 upstream transportation and distribution, Type 5 wastes generated inoperations, Type 6 business travel, and Type 7 employee commuting.
(4) The total number of statistical sites for the carbon emission intensity per unit of modi?ed plastics was the same as that in 2023 and 2022. In
the actual layout, the two sites were merged, and one site was added due to business adjustments, including 11 sites of the headquarters andmodi?ed plastics (including recycled plastics). The emission data has been veri?ed by independent third-party agencies.Participation in the Work Meeting for Drafting the National Standard TitledCalculation of Carbon Emissions from Physical Recycling of Recycled Plastics
Joint Photo of the Work Meeting for Drafting
the National Standard
Indicators and Targets
Risk typeDescriptionResponse measure
Transition risk
Policy risks: rising carbon prices,industry access restrictions.
Establish a carbon management system; acceleratethe R&D of low-carbon technologies and deploy ze-ro-carbon processes in advance.Technical risks: The iteration of cleantechnologies has lagged behind.
Establish special R&D programs, and develop low-car-bon materials (e.g. bio-based materials and recycledplastics) in place of existing materials.
Physical risk
Acute risks: The impacts of extremeweather such as typhoon and rain-storm on factory production andlogistics.
Improve the disaster warning system, optimize thelayout of production and supply chain, and improveemergency management.Chronic risks: Long-term rising tem-perature leads to the escalation ofenergy costs.
Promote the application of renewable energies (e.g.photovoltaic and hydrogen energies) to improve ener-gy e?ciency.Market risk
Shift in customer demand: Thegreen procurement preference indownstream industries has increased.
Launch internationally certi?ed carbon-related prod-ucts; provide the customers with low-carbon technicalsolutions.
According to the greenhouse gas emission veri?cation results of an independent third-party organization, our 2024 greenhousegas inventory included 17 sites in the headquarters and the sectors of modi?ed plastics, green petrochemicals, new materials, andhealthcare in China. During the reporting period, the total greenhouse gas emissions of each site (Scope 1 + Scope 2 + Scope 3)were up to 13,976,319.80 tonnes of CO
equivalents. The carbon emission intensity per unit of modi?ed plastics (Scope 1 + Scope 2)was 0.1338 tonnes of CO
equivalents, with a decrease of 27.58% compared with 2022.
IndexUnit2024Scope 1 greenhouse
gas emissions
Tonnes of carbon dioxide equivalent794,353.21Scope 2 greenhousegas emissions
Tonnes of carbon dioxide equivalent2,083,880.23
Scope 3 greenhousegas emissions
Tonnes of carbon dioxide equivalent11,098,086.37Total greenhouse gasemissions
Tonnes of carbon dioxide equivalent13,976,319.80
Identi?cation and Management of Opportunities from the Climate Change
Explosive growth in the demand forlow-carbon materials (including degradableplastics and lightweight composites).
Commercialization potential of resourcerecycling technologies.
Revenue opportunities broughtby the expansion of the carbontrading market.Green product innovationCarbon asset value development
Circular economy
Notes:
Compared with 2022, the greenhouse gas emissions perunit of products will be reduced by at least 30% by 2022on a year-on-year basis.Produce 1 million tonnes of green plastics, recycle 1million tonnes of waste plastics, and produce 1 milliontonnes of recycled plastics by 2030.The Company will realize complete carbon neutrality by2060.
3940
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Compared with metal materials, thermoplastic com-posite materials showed the advantages of low-carbonprocessing. During the reporting period, the carbon?ber company performed a product carbon footprintcalculation of thermoplastic composites. With thelifecycle "from cradle to gate", the veri?cation coveredprepreg extruded unidirectional tapes, compositepressing, raw material transportation, raw materialinput, energy input, waste discharge, and other links.The carbon footprint from each process of the thermo-plastic honeycomb panels was analyzed.
Carbon Footprint Veri?cation of Kingfa Carbon Fiber Thermoplastic Honeycomb Panels
Carbon Footprint Calculation Result
Table 4.2 FP-PPKU-BK/FB Process Contribution Analysis
Table 4.3 FP-PPKU-BK/FB Inventory Data Contribution Analysis
ProcessPrepreg extruded unidirectional tapesComposite pressed laminateExtruded PP honeycomb coreComposite pressed PP honeycomb sandwich panelInventory titleRaw materialsEnergy consumptionTransportation
Contribution percentageof carbon footprints/%Carbon footprint/kgCO2e
Carbon footprint/kg CO2e
In the context of the new era led by the "carbon peaking and carbon neutrality" objectives, clean and low-carbon technologiesand materials have become important driving forces for promoting the green transformation of the economy and society. TheCompany has elevated the R&D of clean technologies and green and low-carbon product manufacturing to a strategic level as im-portant pillars for achieving sustainable development. Through continuous innovations, the Company is committed to providingthe downstream customers with green, environmentally friendly, low-carbon, and e?cient high-performance material solutions,empowering the green upgrading of the industrial chain, actively ful?lling environmental responsibilities while creating economicvalue, and contributing to the goal of carbon neutrality.
During the reporting period, the Company continuously strengthened the R&D of green technologies in di?erent sectors. Relyingon the respective advantages and development characteristics of these sectors, we identi?ed and seized the opportunities in cleantechnologies, adopted advanced production technologies and processes, constantly increased and scienti?cally deployed funds,resourced and manpower investments, promoted the combination of the green technologies with products, used them in massproduction, increased the proportion of operating revenues related to the clean technologies, and empowered the green andlow-carbon transformation of the society.
Clean Technology Opportunity
Product appli-cation scenarios
Productionlines/products
Key cases
All aspects oflife andproduction
Recycledmaterials
100% Recycled HDPE Bottles: Wholly recycled high-density polyethylene(HDPE) bottles are used in the packaging of daily chemical products. Com-pared with the use of brand-new materials, this recycling approach reducescarbon emissions by 60%.Recycled polypropylene from disposable fast food boxes: Used in ?eldswith high environmental requirements such as toys, food, and cosmetics, theyhave passed the challenging tests of the US FDA and obtained the no objec-tion letter of food contact recycled PP (C-G grade).Recycled materials: Processed and recycled from waste washing machines,air conditioners, refrigerators, and other household appliances, as well asproducts with low black speck content, low VOCs, desirable processing per-formance, and stable performance, they can be used in household applianc-es, furnishings, automobiles, and other ?elds to provide the customers withlow-carbon solutions.New energyvehicles
Steel plasticcomposite boards
Compared with the steel bottom guard plates, they are featured by high strength,impact resistance, scratch resistance, and low permeation, which greatly improvethe protection capability and useful life of the bottom guard plates.
Product applica-tion scenarios
Productionlines/products
Key cases
New energyvehicles
Sealed covers
With advantages such as desirable mechanical properties, low water absorp-tion, ?ame-retardant property, air-tightness, high molding e?ciency, insula-tion, withstand voltage, environment-friendliness, and recyclability, they maybe molded into speci?c shapes.
Honeycombpanels
Being light, moisture-proof, mold-proof, and highly rigid with mild odor andlow VOCs, the honeycomb panels are moldable, and preferred alternatives topaper honeycomb panels.
Photovoltaic
Organic boards
Thermoplastic composite laminates: Which are light, recyclable, and ?exiblewith high strength and low thermal conductivity, lay a foundation for light-weight applications in the photovoltaic industry.
Honeycombpanels
Sandwich boards: Show advantages such as lightweight, high rigidity, highimpact resistance, resistance to high-temperature compression, corrosionresistance and recyclability.Product lines of
PPE
Polyphenylene ether (PPE) materials: With high-temperature resistance, de-sirable dimensional stability, and excellent low-temperature toughness, they aremainly used in photovoltaic connectors and junction boxes. With the shipmentof more than 2,500t in 2024, the products can be applied in related componentswith a power of more than 50GW (50t PPE is su?cient for producing 1GW powergeneration modules (power: 650W), and help the customers reduce their carbondioxide emissions by more than 79 million tonnes over a year.
Product lines ofPC
PC: With excellent characteristics such as attractive appearance, high heatresistance, sound toughness, high weather resistance, and halogen-free envi-ronmental protection, it is mainly used in photovoltaic inverters and energystorage battery casings. With the shipment of more than 100t in 2024, they canbe applied in related components with a power of more than 2GW (50t PC issu?cient for producing 1GW power generation modules (power: 650W), andhelp the customers annually reduce their carbon dioxide emissions by morethan 3.16 million tonnes over a year.Energy storage
Product lines ofstyrene
Flame-retardant ABS: With advantages such as excellent low-temperatureresistance, strong corrosion resistance, long-term weather resistance, excellentwelding performance, and electrical breakdown resistance, they are used inlead-carbon energy storage battery casings.
New Energy
Propene andhigh purityhydrogen
Blue hydrogen: It has attracted much attention for its advantages of reducinggreenhouse gas emissions and improving environmental balance. NingboKingfa has realized integrated and stable production capacity of propylene andhigh-purity hydrogen through propane dehydrogenation equipment, providedreliable hydrogen sources for end customers, and promoted the wide appli-cation of blue hydrogen in di?erent ?elds. In 2024, Ningbo Kingfa produced14,063t hydrogen-rich gases and puri?ed 1,799t high-purity hydrogen.
4142
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
R&D Outcomes in the Clean Technologies of Di?erent Sectors
The Company focuses on replacing steel with plastics, develops high-performance, environmentally friendly lightweight products,and promotes the low-carbon transformation of the automobile industry.
The Company is committed to promoting the low-carbon transformation and sustainable development of the industrial chain throughmaterial innovation and systematic solutions. We integrate our internal and external resources based on the customer requirements. Wehave constructed a full lifecycle management system that covers product R&D, application evaluation, carbon footprint measurement,and emission reduction path planning to help customers coordinate their environmental and economic bene?ts.
The Company actively implements the ESG concept, promotes innovations in the bio-based materials, reduces the carbon emis-sions from the source, facilitates the green transformation and upgrading of the petrochemical and material industries, andreconstructs a sustainable industrial system. Through the biological fermentation process of bio-based succinic acid, the Com-pany realizes the e?cient utilization of biomass raw materials, which can reduce the dependence on fossil resources and providelow-carbon solutions for the downstream customers.
Biobased degradable plastics
Carbon ?ber materials
Modi?ed plastics
New material segment
Healthcare
Develop materials with long takttime, shorten their production cycle,improve the processing e?ciency ofparts, reduce the energy consump-tion per unit of products for thedownstream customers, and furtherexpand the ?elds of application forthe products.
Use green environmen-tally friendly spray-freematerials and antibacte-rial materials with longerservice life.
Replace steel with plastics: Use plastic mate-rials in place of traditional metal materials,which are used for designing all-plastic tail-gates, inner tailgate panels, seat brackets, etc.of automobiles, and greatly reduce the carbonemissions in the production process, procur-ing the automobile industry to be lightweightand environmentally friendly.
In the ?eld of healthcare, the Company has developed the green technologies and products with its own characteristics from ma-terial R&D to product development, including degradable melt-blown materials, degradable gloves, and degradable masks.
Degradable melt-blown materi-als: Based on the advantages ofthe Company's full-range biode-gradable materials (e.g. PLA, PBSand PBAT), completely biodegrad-able mask melt-blown nonwovenfabrics, disposable swimmingpool ?lter elements, washing ma-chine wastewater filter bags andair filter elements were success-fully developed in 2024 throughnonwoven technologies.
Degradable gloves: Based on the
previous R&D, the compositionsof biodegradable additives havebeen adjusted and optimized. Theintroduction of new degradationadditives into the products can ef-fectively increase the degradationpercentage and degradation rateof gloves without affecting theprotection ratings of the productsagainst the chemicals and drugs.
Degradable masks: PLA is used as
the main material. The mask body,filter element, ear strap, nose bridgeand other components that can be si-multaneously degraded are preparedthrough di?erent processing methodssuch as melt-blowing, spinning, andinjection molding to form the ?nal de-gradable mask. Compared with ordi-nary masks, the carbon emissions ofbiodegradable masks can be reducedby more than 50%.
The Company has obtained the ISCC PIUS. The critical input raw materials include Diamine (Diaminodecane), Polyamide (PA),Glass (Glass Fiber), etc. , where:
Special engineering plastics
In connector applications, using Vicnyl ? PA10T bio-based materials in place of non-bio-based materialssuch as PA66/6T can reduce carbon dioxide emissions by800t over a year.In low-voltage electrical applications, Vicnyl ? PA10Tbio-based materials are used in place of irradiated cross-linked PA66, which helps the customers save irradiationcross-linking processes and reduce the production cycleby 10%. They can help the customers reduce their car-bon emissions by 2,400t per year.Vicnyl ? PA10T bio-based materials are used to replacesolids with plastics. Since they demonstrate the highestRTI (155 °C) among high-temperature resistant polyam-ides and desirable recyclability, they can annually reducecarbon emissions by 800t on the premise of ensuringlong-term use by the customers over a year.
In the application of electronic components, the for-
eign high-temperature resistant polyamide was success-fully upgraded to Vicnyl ? PA10T bio-based high-tempera-ture resistant polyamide. Besides, the wall thickness wasreduced from 1.0 mm to 0.5 mm, achieving an overall 60%reduction in carbon emissions by 600t over a year.
In the application of key components of robots androbot dogs, the ultra-high temperature-resistant andwear-resistant PPA and PEEK developed by ZhuhaiVanteque Specialty Engineering Plastics have solved theproblems on long-term usability of key components ofkey robots and robot dogs, and have been widely used inthe industry.
Green travel solution: In response to the core require-
ments for automobile lightweight and battery safety, wehave innovatively developed a series of products such assteel-plastic composite bottom guards and continuous?ber reinforced thermoplastic ?ame-retardant compos-ite box covers. This solution reduces the weight by 30%compared with traditional metal parts, and signi?cantlyimproves the energy e?ciency. The supporting carbonemission accounting model can accurately quantifythe carbon reduction bene?ts throughout the productlifecycle and promote the low-carbon transformation ofthe new energy automobile industry.
Innovative applications of low-altitude economy:
Focus on breakthroughs in aircraft lightweight technolo-gies, and develop key components such as high-strengthblades, arms, and fuselages. Through structural optimi-zation, the weight of the entire UAV is reduced by 25%-40%, and the endurance mileage is increased by over30%. The carbon footprint of the whole product lifecycleis reduced by 42% compared with the aluminum alloysolution, promoting the transformation of low-altitudeeconomy to a resource-saving development model.
Clean energy layout: Lightweight photovoltaic back-
sheet innovatively developed with recyclable thermo-plastic composites are used. The products are 50% light-er than traditional backsheets, providing breakthroughsupport for the integrated application of ?exible compo-nents and BIPVs. Extending the service life of modulesby 15% through material innovations is expected toapproximately reduce carbon emissions by 120t perlifecycle of the MW photovoltaic system.
Cold chain logistics circulation system: Cold chain
lining boards continuously maintain their leading posi-tion in the industry. Through structural innovations, theweight of transportation cartons has been reduced by35%, and the overall supporting solution developed hasreduced the energy consumption of cold chain logisticsby 18%. Through 100% recyclable design and low VOCsprocess of the products, a closed-loop system fromproduction to recycling is constructed, thus reducingthe VOCs emissions by more than 200 t per year, andforming a low-carbon transportation system solution.
4344
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company builds an integrated industry chain around bio-based materials, which covers the entire process of bio-based cell factory development, monomer preparation, resin synthesis, and modi?cation application, accelerating thegreen upgrading of traditional petrochemicals. As a core production base, Liaoning Kingfa Biomaterials has realized thelarge-scale production and export of bio-based organic acids, and completed the construction of a bio-based 1,4-butane-diol production line. The bio-based succinic acid is produced by the Company with a bio-fermentation process, to replacepetroleum-based resources with renewable raw materials. It shows the advantages of lower carbon footprint and bio-based carbon content of 100%. It has been certi?ed by the United States Department of Agriculture (USDA) and DIN-Ge-prueft. The Company plans to cooperate with professional institutions to promote product carbon footprint accountingand provide low-carbon solutions for the industry.
Deploying Bio-based Industries and Exploring Low-carbon Products
Liaoning Kingfa Biomaterials Formally Put into ProductionBio-based Succinic Acid
Environmental Compliance ManagementThe Company has deeply realized the importance of the environmental compliance management for the sustainable development ofenterprises. We have formulated the Environmental Policies of the Company as a programmatic document for the Group's environmentalmanagement. Each production base/branch/subsidiary combines local environmental regulations and production practices to constructa di?erentiated environmental management system to ensure that the Company's decisions and actions are steadily implemented on thecorrect path to sustainable development.
The Company actively responds to the environmental policies and ensures its compliance through the closed-loop management of"monthly tracking - annual review - real-time optimization". We monthly publicize and implement the newly promulgated and implementedpolicies on a group basis, regularly conduct a comprehensive review of applicable environmental policies at least once a year, promptly rec-tify and optimize them, continuously and steadily practice environmental management in accordance with the latest environmental lawsand regulations, its own development and objectives. Ensure timely adjustment and update of the environmental policies.To strengthen the organization and management of the environmental protection work to ensure accurate implementation of such work,the Company has created an environmental management network with the general manager of the Group as the top decision-maker andleader, the heads of all centers and the general managers of subsidiaries being responsible step by step, and set up environmental man-agement departments in all its production bases to ensure e?ective implementation of environmental management work at all places ofbusiness. In addition, to comprehensively consolidate its environmental management responsibilities, the Company has established a Sys-tem of Responsibility for Environmental Protection to clarify all its employees' responsibilities for environmental protection and ensure thatresponsibilities are assigned to all employees through an accountability mechanism. The Company and 16 of its subsidiaries have passedISO 14001 Environmental Management System Certi?cation.
Environmental Management Architecture
Governance and Strategies
Generalmanager
Branches,subsidiaries,and depart-
ments
All employees are required to abide by the Company's environmental policies, actively participate inenvironmental protection activities, and increase their environmental awareness.Pay attention to energy conservation and emission reduction in daily work to reduce unnecessary ener-gy consumption and waste.Actively put forward suggestions for improvement of the Company's environmental protection andmake contributions to the Company's environmental protection work.Employees
O?ce
The general manager of the Company is responsible for reviewing and approving the Company's envi-ronmental policies, objectives, and plans.Supervise the operational e?ectiveness of the environmental management system to ensure that theCompany's environmental protection strategies are consistent with its overall strategies.Comprehensively implement the environmental policies, ensure the input of resources, and promotethe continuous improvement of the environmental management system.The o?ce safety and environment module is responsible for the speci?c formulation, interpretation,and revision of the environmental policies to ensure that the policies are scienti?c, appropriate, andoperable.Organize internal environmental protection training to increase the employees' environmental aware-ness and publicize the Company's environmental protection concept and achievements.Supervise and inspect the environmental protection work of all bases/business departments and sub-sidiaries to ensure that all environmental protection measures are e?ectively implemented.Strictly implement the Company's environmental policies to ensure that the production and operationactivities of the bases meet environmental protection requirements.Formulate and implement energy conservation and emission reduction measures to reduce energyconsumption and carbon emissions, and increase resource utilization e?ciency.Promptly communicate the Company's environmental policies to all employees of the subsidiaries toensure the e?ective implementation of the policies in the subsidiaries.Formulate speci?c environmental protection management systems and measures according to the ac-tual situations of the subsidiaries, to ensure the realization of environmental protection goals.
4546
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
During the reporting periodThe Company investedin environmental protectionRMB
107.658
million
The Company's environmental hazardrecti?cation rate was100%
and the implementation rate of theenvironmental monitoring plan was
100%
Without experiencing general ormore serious environmental emer-gencies
The Company did not receive adminis-trative penalties from any governmentagency of environmental protection
Indicators and Targets
Environmental compliance targetsFul?llment of targets0 environmental or social responsibility incidentAchievedNo wastes emitted beyond standardsAchieved100% compliance of construction projects in threeenvironmental simultaneities
Achieved
Environmental concept
Environmental protection is the foun-
dation of sustainable development.Environmentally friendlyproduction policyBeing green and low-carbon,protecting the environment andbene?ting the society
Environmental missionLegal compliance, energy conser-vation, emission reduction and
continual improvement
Environmental values
Save resources and pro-mote green productionEnvironmental visionBuild an essentially environ-mentally friendly enterprise
Environ-mental Cul-ture of theCompany
The Company always maintains high vigilance against the occurrence of environmental pollution incidents. Therefore, we haveformulated the Environmental Risk Investigation and Hazard Governance System and the Environmental Monitoring ManagementSystem, established an environmental risk investigation mechanism in line with the production types of all production bases,comprehensively identi?ed the risks that are likely to cause environmental protection incidents, particularly supervised the pointsthat are likely to cause environmental pollution, environmental protection incidents and accidents according to the identi?cationresults, regularly checked and inspected the operation of environmental protection equipment, environmental protection man-agement system, management, records, and hazards.
Forms for investigating environmental risks
In June 2024, the Company's Qingyuan Base carried out a special majorenvironmental protection inspection and a comprehensive inspectionof pollutant treatment equipment in all workshops and sewage stations
of the factory area.
A comprehensive environmental protection inspection was conductedin Liaoning Kingfa in June 2024, to comprehensively investigate thepollutant treatment equipment in all workshops and sewage stations of
the factory area.
In the face of environmental emergencies, the Company andits subsidiaries set up an emergency rescue headquarters forthe environmental emergencies led by its general manager,prepared and filed an Emergency Plan for EnvironmentalEmergencies, issued an Investigation Report on EnvironmentalEmergency Resources and a Risk Assessment Report on Envi-ronmental Emergencies, continuously strengthened its emer-gency management of environmental emergencies, and strivedto eliminate or minimize the environmental impacts when en-vironmental emergencies occurred. To this end, the Companyregularly organized its employees to receive emergency train-ing and drills to ensure that they could respond to the environ-mental emergencies properly, timely, and e?ciently.
In June 2024, the Company made an on-site emergency response to asigni?cant leakage of propylene in the polypropylene unit I, simulatingan unexpected large-area leakage on the ?rst ?ange of the polypropyl-ene feeding pipeline, and improving the relevant personnel's capabili-ties of making emergency responses to the environmental incidents.
Risk Management
Handover checkPeer inspectionSelf-inspectionDaily investigation and inspection
Joint investigation and inspection
Professional investigation and inspectionSeasonal inspection and inspectionInvestigation on holidays
4748
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company, its branches and subsidiaries have actively carried out the construction of green factories, and created a "green fac-tory" management model. From six modules, namely infrastructure, management system, energy and resource inputs, products,environmental emissions, and environmental performance, they have promoted green manufacturing, and sought solutions withboth environmental and production bene?ts. As of the end of the reporting period, the Company has passed the national greenfactory certi?cation. Ningbo Kingfa, Wuhan Kingfa, Kingfa Biomaterials, and Tianjin Kingfa have all been included in the list of na-tional green factories.The Company attaches great importance to the protection of the surroundings around its places of business. The project selection,factory site selection, and construction of all its production projects are subjected to the impact assessment system for construc-tion projects and the three-simultaneous system for pollution control in accordance with the Regulations on the Administrationof Environmental Protection in Construction Projects. These projects satisfy the national and local ecological protection require-ments, avoid ecological protection areas, and never cross the red line of ecological protection and the bottom line of environmen-tal quality.
The Company has formulated the Environmental Protection Publicity, Education and Training System. We regularly carry out envi-ronmental protection education and training, actively organize and perform various environmental protection learning activities,and practice the national environmental protection guidelines and policies, with a view to increasing the employees' environ-mental awareness, improving the technical quali?cations for environmental protection and preventing environmental accidents.Besides, the Company has formulated the Management Regulations for Management of Energy Consumption in O?ces and Living,advocating actions such as electricity and water conservation in the daily work, implementing green o?ce initiatives, and encour-aging its employees to participate in environmental protection.
Construction of Green Factories
Develop an online approval system andan online procurement platform for of-?ce supplies to encourage paperless of-?ce and avoid unnecessary paper waste.Post water-saving and energy-sav-ing signs to create a good atmo-sphere for energy conservation andconsumption reduction.Use energy-efficient computers,printers, and other equipmentto strengthen the maintenanceand management of lighting andair-conditioning systems.When the air conditioners are inuse, set temperature zoning andremind door closing. Discontinuetheir operations during rest.
Promptly adjust when to turn onand off the street lights and light-ing devices according to seasonalchanges.The elevators are put under groupcontrol and linked. Properly setwhen to start and shut down the el-evators based on the ?ow of people,to reduce unnecessary load-free op-erations of the elevators.Strictly follow the regulations ongarbage classi?cation and dispos-al. Classify and mark garbage bins.Green O?ce Initiatives
To help the employees understand the harm of solid wastes to the environ-ment and health, and foster correct ideas about the environmental protec-tion, in June 2024, the Company organized distribution of the "KnowledgeManual on Preventing and Controlling Solid Waste Pollution" for publicityand training. From the perspective of front-line employees in the workshopproduction, the manual concisely explains the harm of solid wastes to thehuman body and environment during the production in the form of picturesand texts, as well as how to correctly classify and collect the solid wastes. Themanual was issued by the Environmental Management Department to en-sure that environmental protection knowledge was announced in place, andthat our employees' knowledge and capabilities of environmental protectionmanagement were e?ectively improved.
Distribution of Knowledge Manuals on Preventing Solid Waste Pollution forImproving Solid Waste Management
Knowledge Manual for Employee Learning
In June 2024, the Company organized a knowledge training lecture onthe environmental protection for middle-level and above leaders withthe theme of "Compliance Management of Solid Wastes" at LiaoningBase. The lecture mainly explained the eight red lines, typical casesand related law enforcement matters on the solid waste law, de?nitionand classification of hazardous wastes, compliance management ofhazardous wastes, and solid waste management. In combination withthe warning and educational ?lms, as well as typical law enforcementcases released by Liaoning Provincial Department of Ecology and Envi-ronmental Protection, the keys for localized supervision were analyzedin depth, and the upgrading of environmental compliance from passiveresponse to active governance was promoted.
Implemented Environmental Management Requirements and Carried outEnvironmental Protection Training
Training Site
In October 2024, to increase the employees' environmentalawareness and promote the concept of green, low-carbon o?ceand production, the Company organized a special environmen-tal protection award-winning knowledge competition at Qin-gyuan Base with the theme of "Green Factory, EnvironmentalProtection First", and provided a question base for acquiringknowledge about environmental protection. The employeeswho gave excellent answers were given cash rewards to encour-age them to acquire knowledge related to the environmentalprotection independently.
Environmental Protection Knowledge Competition on "Green Factory Area,Environmental Protection First"
Environmental Knowledge Contest Questionnaire
2024年世界环境日6月
5日
| 日 |
是
新
| 新 |
修
订
| 订 |
的
《
| 《 |
中
华
| 华 |
人
民
| 民 |
共
和
| 和 |
国
环
| 环 |
境
保
| 保 |
护
法
| 法 |
》
规
| 规 |
定
的
| 的 |
环
境
| 境 |
日
。
| 。 |
日
前
| 前 |
，
生
| 生 |
态
环
| 环 |
境
部
| 部 |
正
式
| 式 |
发
布
| 布 |
2024年
六
| 六 |
五
环
| 环 |
境
日
| 日 |
主
题
| 题 |
——“全
面
| 面 |
推
进
| 进 |
美
丽
| 丽 |
中
国
| 国 |
建
设
| 设 |
”。
.
| . |
附
图
| 图 |
《
公
| 公 |
民
生
| 生 |
态
环
| 环 |
境
行
| 行 |
为
规
| 规 |
范
十
| 十 |
条
》
| 》 |
宣
传
| 传 |
折
页
| 页 |
.
| . |
珠
海
| 海 |
市
生
| 生 |
态
环
| 环 |
境
局
| 局 |
微
信
| 信 |
和
官
| 官 |
网
行
| 行 |
政
信
| 信 |
息
二
| 二 |
维
码
| 码 |
微
信
| 信 |
公
众
| 众 |
号
行
| 行 |
政
检
| 检 |
查
、
| 、 |
处
罚
| 罚 |
信
息
| 息 |
公
示
| 示 |
.
| . |
广
东
| 东 |
省
生
| 生 |
态
环
| 环 |
境
保
| 保 |
护
有
| 有 |
关
信
| 信 |
息
库
| 库 |
生
态
| 态 |
环
境
| 境 |
保
护
| 护 |
地
方
| 方 |
法
规
| 规 |
企
业
| 业 |
环
保
| 保 |
问
题
| 题 |
答
疑
| 疑 |
编
制
| 制 |
：
安
| 安 |
环
部
| 部2024.6.4 |
Poster of "Ecological Environment Day"
Environmental Protection Promotion and Green O?ce
4950
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Pollutant Discharge and Waste TreatmentThe Company has formulated the Operation Management System for Pollution Prevention and Control Facilities, ResponsibilitySystem for Environmental Pollution Prevention and Control, and Management Procedure for Environmental Safety Monitoring. Weconstantly improve our management mechanism for monitoring and regular inspection of the pollutants and waste discharge, andregularly entrust third-party organizations to inspect pollutant treatment facilities and discharge conditions to ensure that the dis-charge and disposal of various pollutants and wastes strictly comply with the local discharge standards without a?ecting the localecological environment.In addition, the Company is committed to minimized, harmless, and resource-oriented management of pollutants and wastes. Weactively carry out three-waste improvement projects in our major production bases and subsidiaries to explore and tap the poten-tial of waste recycling and comprehensive utilization.
The Company strictly abides by relevant laws, regulations, and local standards on exhaust gas emissions. Following the principleof "recycling the wastes as far as possible and collecting them by quality", we are committed to adopting the most advanced pollu-tion control technologies, scienti?cally designing exhaust gas collection systems, optimizing production equipment and processes,ensuring e?cient and stable operation of air pollutant treatment facilities and reducing unorganized emissions of pollutants.
For the solid wastes, the Company strictly abides by waste-related laws, regulations, and disposal standards to ensure that allwastes are treated harmlessly to avoid harm to the environment and human health. The Company reduces the amount of wastesgenerated by optimizing production processes and improving resource utilization e?ciency. We actively explore how to utilize thewastes as resources, recycle plastic wastes as recycled plastic raw materials, reduce the production demand for new plastics, anddevelop cooperation with professional waste recycling and treatment organizations to jointly promote the utilization of wastes asresources. As of 2024, the Company had established a complete waste classi?cation and recycling system, and the waste recyclingrate was up to 42%.
The Company's exhaust emission-related performance during the reporting period is shown in the following table:
Index UnitData in 2024Wastewater discharge intensitym
22,865,427,592Recovery rate of waste gases%32Particulate matter (PM)Tonne91.96Non-methane hydrocarbonTonne163.54Nitrogen oxidesTonne80.72Sulfur oxideTonne41.24VOCs emissionsTonne548.94
Index UnitData in 2024Total waste disposalTonne21,109.84Disposal of hazardous wastesTonne10,934.45Disposal of non-hazardous wastesTonne9,506.58Disposal of high-level wastesTonne0Waste recycling rate%42Total amount of wastes recycled/
reused
Tonne8,916.94
Waste gas treatment
Waste Disposal
In 2024, to solve the problem that the waste liquid generatedduring the production of the acetonitrile unit could not be ef-fectively utilized, Liaoning Kingfa implemented measures foroptimizing the waste gas process. During the production of theacetonitrile unit, the Company optimized the outbound deliveryprocess for e?ective recovery of the waste liquid. After the tech-nical transformation of the projects, the wastewater incinerationamount was reduced by 19,910t in 2024, saving the fuel gas by3,117,706.9 standard cubic meters. While cutting the costs, thetechnical transformation effectively reduced the exhaust gasemissions, providing strong support for the Company's environ-mental protection and economic bene?ts.
Optimizing the Outbound Pumping Process of the Reactor Liquid in the HydrocyanicAcid Removal Tower of the Acetonitrile Unit to Reduce Waste Gas Emissions
Project Reconstruction Procedure
To satisfy the environment-friendly emission requirementsand e?ectively reduce the VOCs emissions, Guangdong KingfaComposites combined cyclone hybrid spray tower + ?ltration +honeycomb activated carbon adsorption concentration + RCO".Through a comprehensive waste gas collection system, thewaste gas generated at each location is concentrated, prelim-inarily puri?ed by cyclone hybrid spray tower, ?ltered for im-purity removal, and subjected to honeycomb activated carbonadsorption and concentration to further reduce the pollutantcontent. Finally, after deep treatment by RCO, it is dischargedat an altitude of 21m, e?ectively reducing the waste gas emis-sion concentration from 18 mg/m
to 8.6 mg/m
, effectivelymitigating the environmental pollution of organic waste gas,ensuring that the Company's production conforms to the envi-ronmental protection standards, and taking a solid step in thegreen development process of the carbon ?ber industry.
RCO Technology Application Project of Guangdong Kingfa Composites
RCO Equipment
The Company's waste emission during the reporting period is shown in the following table:
TK-1602TK-1601
Recycling to system
Added pipeline
Reactor liquidof acetonitriledehydrocya-nate tower
5152
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Harmless disposal measures are required for the disposal of general industrial solidwastes.The generation and storage conditions must be strictly recorded, regularly reported andentered into the system.Relevant units and third party disposal organizations must be quali?ed, and draft emer-gency plans for environmental incidents.
After their generation, the general industrial solid wastes shall be collected by categories,handed over to relevant departments for uni?ed warehousing and storage. Graphic envi-ronmental protection signs shall be set up.The storage places shall be equipped with the facilities or measures for protection againstrain, leakage, scattering and loss. The hazardous and domestic wastes are prohibited fromdelivery into the these storage locations.Collectionand storage
In 2024, Liaoning Kingfa comprehensively managed hazardous waste minimization, optimized, and improved theCompany's hazardous waste disposal in three dimensions, namely source reduction, process control and end-of-pipe treatment, and achieved desirable results.
Non-hazardous wastes
Hazardous Wastes
The Company's non-hazardous wastes mainly include general industrial solid and domestic wastes. Among them, the domesticwastes are collected, disposed of and handed over to a municipal sanitation department for disposal. For general industrial solidwastes, the Company and its subsidiaries have prepared policy documents such as Solid Waste Management Regulations, GeneralSolid Waste Management System and Solid Waste Packaging Speci?cations to standardize the management of industrial solidwastes which are not hazardous. The Company scienti?cally and e?ciently recycles the non-hazardous wastes with value for recy-cling. For those that really cannot be internally recycled, the Company strictly screens and entrusts a third-party professional or-ganization with corresponding quali?cations for safe and standardized disposal. During the disposal, some general industrial solidwastes are appropriately delivered to thermal power stations, and advanced energy conversion technologies are used for powergeneration, realizing the transformation from wastes to energies.
The Company has prepared the Hazardous Waste Management System to standardize the classi?cation, collection, storage, trans-fer, and production of the hazardous wastes included in the National Catalogue of Hazardous Wastes. For the hazardous wastesgenerated during the production, the Company strictly obeys the regulations and entrusts external third-party organizations withprofessional quali?cations for properly disposing of the wastes. The steam generated after incineration of some hazardous wastesis recycled by a third party for secondary value conversion of resources.
Identi?cationand judgment
Identify and judge that industrial solid wastes are not included in the National Catalogueof Hazardous Wastes or other standards for identifying hazardous wastes, and are not haz-ardous.
Disposal andtransfer
Disposal Procedures for General Industrial Solid Wastes
Hazardous Waste Disposal Procedure
Promoting Hazardous Waste Minimization and Performing Comprehensive Management
Measures for Reducing Hazardous Wastes
Source reduction
Change the waste discharge index of the process card of the upstream production equipment, explore the controlscope more suitable for production, strengthen management, and reduce the generation of source pollutants anddischarge to the downstream."Turn wastes into treasure", for example, the self-built equipment in the condensation unit of ABS production equip-ment recovers more than 60% of particulate matter in the condensation wastewater, realizes resource utilization,and reduces the generation of downstream hazardous wastes.Perform classi?cation and screening. Strictly plan the classi?ed management of solid wastes, train and assess allproduction equipment and units, and prevent mixed storage and discharge of solid wastes.The resource-oriented recycling follows the principle below: Reduce sources before resource-oriented utilization,and ultimately perform harmless disposal. Give priority to recycling valuable solid wastes, including recycling wastetimber, preparing waste acid and alkali solution for wastewater treatment, and recycling raw and auxiliary materials.Abandon backward technologies and consider green emission reduction and resource utilization in new projects.For example, the dry catalytic oxidation adsorption process is used to replace the traditional activated carbon ad-sorption process for the absorption of exhaust gases containing VOCs in a hazardous wastes warehouse to improvethe e?ciency and reduce the generation of hazardous wastes. A reduction and treatment project is also initiated forsludge and scum, to modify the dehydration procedures and reduce the water content from 85% to 30%. The projectis expected to be put into use in the second half of 2025.
End-of-pipe treatment
In early 2024, a large-scale survey and screening was performed for the hazardous waste terminal treatment teams,which were selected from various aspects to ensure that the transfer and disposal of the hazardous wastes were le-gal and compliant.
In November 2024, to satisfy the sludge treatment needs after the output in-creased that year and the 6,000-tonne polyaromatic ether sulfone workshop wasput into operation, and the inherent defects of the original plate and frame ?lterpresses, Zhuhai Vanteque Specialty Engineering Plastics carried out technicaltransformation of the special plastics sewage stations. The original two 25m
small plate and frame ?lters were removed. A 100m
plate and frame ?lter pressequipped with a sludge unloading bucket was added. Supporting sludge pumps,sludge pipelines, valves, etc. were installed. The technological transformation can-not only satisfy the sludge treatment needs after the output increase in the nextthree years the 6,000t polyaromatic ether sulfone workshop is put into operation,but also increases the treatment e?ciency of the sludge ?lter presses, reduces thelabor intensity, and e?ectively settles the enterprises' di?culties in waste disposal.
Replacement of Old Machines for Improving the Transformation Results of SludgeTreatment Technologies
New Plate and Frame Filter Press
Process screening
Collection and storageIdenti?cation and
judgment
Transfer andtransportationIdentify the hazardouswastes based on thecorresponding identi?ca-tion standards, includingthe National Catalogueof Hazardous Wastes,Technical Speci?cationsfor Identi?cation ofHazardous Wastes, andIdenti?cation Standardsfor Hazardous Wastes. De-termine their types andmanage them by type.
When transferred internally,the hazardous wastes shall bepackaged in good containersor packages to prevent leak-age and pollution.Declarations should bemade on the environmentalsupervision platform andhazardous waste labels shallbe printed in accordance withthe regulations.Examine hazardous wastedisposal units to ensure thatthey are quali?ed.
When collecting the hazardous wastes, necessary collectiontools, packaging and temporary storage facilities shall beequipped. The collection sites shall be close to the opera-tion areas and shall not a?ect or hinder the safe passage.In the process of hazardous waste collection, storage, andmanagement, appropriate labor protection articles, occu-pational hazard noti?cation card machines, other signs, andprotective equipment shall be equipped.Centralized storage facilities or places for hazardous wastesshall be equipped with safety facilities or equipmentaccording to the types and hazard characteristics of the haz-ardous wastes stored.The storage plans and facilities shall be safe, reasonable,and feasible.
5354
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Energy UsageCommitted to the continuous optimization of energy consumption, the Company increases its energy utilization e?ciency and re-duces the total energy consumption with advanced energy-saving technologies and equipment. We have prepared more than teninstitutional documents such as the Energy Management Manual, set clear energy consumption reduction targets, evaluated andadjusted them year by year to continuously improve the energy management system.
Having established a complete energy e?ciency evaluation mechanism, the Company regularly carries out professional in-depthassessment work. Through comprehensive monitoring and analysis of the energy use process, we accurately identify what need tobe optimized and adopt pertinent improvement measures to ensure the continuous improvement of energy e?ciency, realize e?-cient energy utilization and maximize the value of resources.During the reporting period, the Company's subsidiaries and production bases actively carried out energy-saving technologicaltransformation practices and achieved a series of favorable results.
Energy-saving Technological Transformation Practice
The Company's energy-related performance during the reporting period is shown in the following table:
IndexUnitData in 2024Direct energy consumptionTonne of standard coal334,812.3
Natural gasm
134,482,393
DieselTonne300.06Coal water slurryTonne 275,920.61Indirect energy consumptionTonne of standard coal616,907
Purchased electricity'0000 kWh287,800Medium-pressure steamTonne1,987,963.87Low-pressure steamTonne380,380.31PV power generation (self gen-eration for self use)
'0000 kWh2,379Total energy consumption (in-cluding PV power generation)
Tonnes of standard coal951,719.2
Energy Conservation Measures for Di?erent Sectors (Partial)
Improvement of the single-unit production capacity of two-stage machines: By optimizing the screw combination
of the main machine and adjusting the screw size of the sub-machine, the single-unit production capacity was approx-imately increased by 2,000 t/unit/year, and the power consumption per unit of output was nearly reduced by 30 kWh/t.Improvement of the HDPE twin-screw process: Two tensile screws were used in place of shear blocks, which re-duced the shear strength, improved the plasticization capacity, and reduced the power consumption per unit of outputby 11.6%.
Process improvement for the drying system: On the premise of ensuring that the product smell was acceptable, thedrying and heating time was shortened. The cooling time was prolonged, and the power consumption was reduced.The energy consumption was approximately cut by 10%.Research and use of meshless ?lter: The machine was transformed into a dual-?lter production mode of continuous?lter + melt pump. The power consumption per unit of output was reduced by 13% (with an average decrease of 40kWh/t), and the production capacity was higher.Transformation of the air compressor system: The ?xed-frequency air compressor was replaced with a permanentmagnet variable frequency air compressor, and the electrical conversion ratio declined. It saved electricity of 376,500kWh and electricity bills of RMB 199,500.
KingfaEnvironmental
Energy-saving motor transformation: Use a 200kW permanent magnet energy-saving 6-level motor to replace a250kW 4-level ordinary motor, reducing electric energy consumption per unit by 45%.Energy substitution: Steam energy was used to replace electric energy, and energy consumption costs were reduced
by 15% per unit.Optimization of the distillation unit: Using the coupling process and advanced trap, the steam energy consumptionper unit was reduced by 18%.
Improvement of the heating method: Electromagnetic heating replaced resistance heating, and electrical energyconsumption per unit was reduced by 12%.
KingfaBiomaterials
Liaoning
Kingfa
Comprehensive production improvement and energy-saving transformation: A number of measures such as
debottlenecking and exhaust gas deethanization were implemented. The whole plant's commodity quantity wasincreased, and the natural gas consumption was decreased. Previous steam purchase was changed into sales, and thecomprehensive energy consumption per unit throughout the year was 323.6 kg oil equivalent/tonne, with a year-on-year decrease of 28.2%.
Steam optimization of the whole ?eld: After the debottlenecking of the integrated acrylonitrile unit, the productioncapacity and the amount of by-product steam increased. The combination with a number of technical transformationsensured the continuous return of steam. In 2024, the purchased steam decreased by 340 thousand tonnes, and the returnsteam increased by 110 thousand tonnes, saving about RMB 104 million in purchases and about RMB 18 million in sales.Improvement of boiler water quality: Optimized the boiler water treatment chemicals, re?ned the control over waterquality indicators and increased the resource utilization e?ciency. The volume of sewage discharge from the wholefactory's steam drums was approximately 7t/h, and the consumption of desalinated water declined by 7t/h. The steamoutput dropped by 7t/h, and the steam output increased by 3t/h. The costs were approximately cut by RMB 5 million.Optimization of the heating and tracing system: Increase monitoring of return water in the main water units, opti-mize hydraulic balance, and reduce water supply temperature. The consumption of low-pressure steam for heat tracingdecreased by 5.5 t/hour on a year-on-year basis. The heating period was calculated as 153 days, saving about RMB 3.03million.
Ningbo
Kingfa
Energy-saving transformation of air compressors: The low-pressure drop check valve was alternatively used forthe regenerative air compressor of the propane dehydrogenation unit. Calculated based on 8,000 hours per year, theelectricity consumption could be cut by about 880,000 kW/year, equivalent to about 260 tonnes of standard coal/year.Heat exchanger replacement: Both the separation tower condenser of the propane dehydrogenation unit and theproduct gas No. 1 chiller were high-e?ciency energy-saving heat exchangers, which could approximately save the stan-dard coal by 9,907 tonnes in total.Guangdong
KingfaComposites
Replacement of the low-power heating rod: The theoretical power was reduced by 18 kW/unit, and the temperature
was kept stable within ± 10 ℃.Addition of heat insulation cotton to the extruder: The average temperature was lowered by about 18 ℃, whichreduced heat loss and energy consumption.
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
5556
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company adheres to the concept of green development, continuously optimizes the energy structure, actively explores andvigorously applies clean energies such as solar energy and wind energy, promotes its substitution of traditional fossil energy, con-stantly increases the proportion of clean energy to total energy consumption, and gradually constructs a green, low-carbon, sus-tainable energy system.
The Company's water resources management exhibits a three-level collaborative governance structure, with the general manageras the main person in charge, who is responsible for coordinating overall strategies, determining water resources managementobjectives and supervising the implementation of the policies. The Strategy and Sustainable Development Committee, at the su-pervisory level, focuses on target decomposition and process control, reviews management plans, promotes cross-departmentalcollaboration and optimization, and drives innovation and development of water resources management. The executive level re-lies on the process equipment department, branch factory directors, and full-time factory engineers to draft and implement waterresources management plans, perform technological transformation for the water conservation, organize daily data monitoringand equipment maintenance, and embed water-saving measures into the entire production process through re?ned operations,forming a closed-loop management system from the strategic planning to the on-site operation, and from the target formulation tothe data traceability.
Committed to the e?cient utilization and protection of water resources, the Company increases the reuse rate of water resourcesby utilizing water conservation technologies, optimizing production processes, and building sewage treatment and reclaimed wa-ter recycling facilities. Besides, we optimize our water circulation system, install water conservation devices, and employ advancedwastewater treatment technologies to ensure the maximization of the water resources. The Company strictly abides by the man-agement and control quality requirements for water use, water reuse and sewage discharge, etc. We reasonably regulate our use ofthe water resources in daily operations, set annual water resources management goals and indicators based on our previous year'swater resource consumption, our operation and development strategies, and draft pertinent water conservation proposals for thefactories in di?erent places of business.The Company has built a proactive prevention and control model for "data-driven warning - hierarchical hazard management -rapid emergency response - dynamic enhancement of capabilities" to e?ectively respond to water resource risks.
Clean Energy Utilization
Governance
Strategies
Risk Management
As of the end of the reporting periodOur rooftop photovoltaic installedcapacity reached
24,300kW
In 2024, photovoltaic powergeneration was up to
23.79
million kWhand the capacity underconstruction was
38,400kW
To further deepen the carbon reduction practices, Liaoning Kingfa Biomaterialsactively promotes green electricity substitution in the bio-based monomer produc-tion. In 2024, the proportion of green electricity used in Liaoning Production Basesreached 60%, and the cumulative purchase of green electricity throughout the yearexceeded 8.49 million kWh. With the release of production capacity, it is expectedthat the monthly consumption of green electricity would increase to 3 million kWhafter full production (33 million kWh per year). Through the large-scale applicationof renewable energies, production carbon emissions were signi?cantly reduced, andcontributions were made to achieving the goal of carbon neutrality.
In Response to the Call for Green Development, Liaoning Kingfa BiomaterialsPurchased Green Electricity
Green Electricity Certi?-cate Transaction Voucher
Usage of Water Resources
The Company strictly abides by the national Water Pollution Prevention and Control Law, Water Resources Management Regula-tions, other laws and regulations. While guaranteeing the ecological safety of water sources in compliance with the regulations, itachieves intensive and e?cient utilization of the water resources, continuously ful?lling its corporate responsibility for green pro-duction and sustainable development.
Perform regular patrol inspections and equipment inspections to identify and resolve the potential risks in time.
Regularly conduct training on the safety of water use to increase our employees' awareness of water risksand their ability to deal with the risks.
Perform risk assessment and analysis for water use; take corresponding management measuresfor di?erent levels of risks.Establish a system for monitoring water consumption and water quality in real time; ?nd theanomalies and potential risks in water use through data analysis.Establish an emergency response mechanism for water safety to ensure rapid and effective re-sponses to water accidents.PV Construction of the Company
5758
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company continuously improves its water resource management system, draws up elaborate water resource utilization plans,clari?es water consumption indicators and targets of all departments, promotes the use of water conservation equipment, andreduces the water consumption. In addition, we have established an incentive mechanism for water conservation to encourage allemployees to participate in water conservation activities and enhance the employees' awareness and skills of water conservation.
Conservation of Water Resources
The Company's data on its utilization of water resources during the reporting period is shown in the following table:
IndexUnitData in 2024Total water consumptionTonne14,947,896.89Total water consumption intensityt/RMB'00002.55Purchased municipal waterTonne12,561,236.89
Desalted waterTonne2,333,191GroundwaterTonne53,469Recycled/reused water volumem
126,708
In 2024, Kingfa Medical transformed its water conservation processin the A611 workshop and established a layered reuse system basedon the water characteristics of the production line: By introducing thewater over?own from the upper tank to replenish the middle processsection and the water discharged from the middle layer into the bot-tom cleaning process, and accurately calibrating the water use stan-dards for all cleaning units and recycling the water discharged fromthe processes, a water conservation mode of "gradient use - closed-loop cycle" was created. After the transformation, the average dailydisplacement of the workshop dropped from 2,560m
in the secondquarter to 1,900m
in the fourth quarter (with a decrease of 25.7%),and the annual single-line water consumption of products droppedby 7.5% on a year-on-year, thus realizing the collaborative optimiza-tion of process water e?ciency and resource recycling.
Carried out Water Conservation Renovation inWorkshops to Promote the Recycling of Process Water
Reclaimed Water Diversion and Use Points
Liaoning Kingfa Biomaterials used the mechanical vapor recompression(MVR) technology for production. The secondary steam generated byevaporation was pressurized and heated through a compressor beforecirculation as a heat source for e?cient reuse of heat energy, thus reduc-ing the energy consumption by 50%-70% compared with the traditionalevaporation process. Under the current production load, the amount ofcondensate from evaporation was 1,100m
per day. All the condensatewas reused in the fermentation and puri?cation processes. It is estimat-ed that the daily recovery capacity of the device would reach 2,750m
af-ter full production (annually saved 907,500t), and technological innova-tion drove production water conservation and e?ciency improvement.
Used MVR Evaporators and Recycled Steam Condensate
MVR Evaporator
Nowadays, when environmental protection is receiving increasing attention, the Company regards wastewater treatment as a keylink in the green development. The Company's wastewater pollutants mainly include suspended solids, ammonia nitrogen, totalnitrogen, total phosphorus, etc. Through a series of e?ective treatment measures, while ensuring that wastewater pollutants aredischarged up to standard, we have explored how to use wastewater as resources and minimize wastewater, where desirable out-comes have been achieved.
Wastewater Treatment
IndexUnitData in 2024Total wastewater dischargeTonne4,760,944.73Where: Total volume of industrial
wastewater
Tonne4,282,130.43Where: Total volume of domestic
wastewater
Tonne478,814.3Recovery rate of wastewater%16.42Chemical oxygen demand (COD)Tonne379.97
Five-day BOD (BOD
)Tonne41.95Suspended matterTonne31.45Ammonia nitrogenTonne31.95Total phosphorusTonne3.88
The Company's performance related to the wastewater discharge during the reporting period is shown in the following table:
Ningbo Kingfa was recognized as a provin-
cial water-saving enterprise
5960
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Liaoning Kingfa Biomaterials actively explored how to recycle high-COD wastewater. High-COD wastewater camefrom the concentrated residues after ?ltration of fermentation broth, which was rich in organic matters such as bac-teria and protein. The content of COD was as high as 150,000-200,000 mg/L. Liaoning Kingfa Biomaterials used high-COD wastewater for producing the biogas through anaerobic fermentation, and the biogas was burned by a biogasboiler to produce steam, which was reused in the production steam system. It was estimated that after the devicewas operated at full capacity, the annual steam output was up to 16,500t. This innovative measure not only success-fully realized the utilization of the wastes as resources and cut production costs, but also alleviated the potentialharm of high-concentration sewage discharge to the environment, built a green bridge between enterprise produc-tion and ecological protection, and provided a valuable reference example for the sustainable development of theindustry.
High-COD Wastewater Recycling Project of Liaoning Kingfa Biomaterials
In January 2024, Ningbo Kingfa constructed anew 200m?/h reclaimed water reuse system,which used high-density + ultrafiltration + re-verse osmosis process for treating and recover-ing industrial wastewater for reuse as makeupwater in the circulating and cooling watersystems. The recovery rate of the ultrafiltrationsystem within the system reached 92% or above.The recovery rate of water from reverse osmosiswas at least 60%, and the average desalinationrate exceeded 98.6%. During the reporting pe-riod, the wastewater discharge was reduced by338,000 tonnes in total, and wastewater treat-ment costs were cut by RMB 1.75 million.
Ningbo Kingfa Reclaimed Water Reuse System
Ningbo Kingfa Reclaimed Water Reuse System
After the 6,000-tonne polyaromatic ether sul-fone workshop of Zhuhai Vanteque SpecialtyEngineering Plastics was put into operation,the wastewater volume daily increased by 300-500m
, and the original sewage treatment sys-tem could not treat the wastewater from thewhole factory's production. For this purpose, theCompany carried out a series of technologicalwastewater transformations, including ?ve newmeasures, namely adding accident tank, polyar-omatic ether sulfone transfer tank, polyaromaticether sulfone pretreatment equipment (air ?ota-tion tank), nylon incoming water pretreatmentsedimentation tank, and technically transformedmixed monitoring tank, to improve the wastewa-ter treatment capacity and ensure wastewaterdischarge in compliance with the regulations.
Capacity Expansion and Technical Transformation of the Wastewater treatment
System by Zhuhai Vanteque Specialty Engineering Plastics
Nylon Incoming Water Pretreatment Sedimentation Tank
To strengthen its sewage treatment capability, since 2023, Kingfa Medical has carried out the upgrading and renova-tion of Sewage Treatment System 151, with a view to increasing the physical, chemical and biochemical treatment ef-?ciency and reducing the total volume of pollutants discharged. After a series of modi?cations, the system was com-pleted and put into regular operation in April 2024. Before the transformation, Treatment System 151 could achievedeep denitri?cation to meet the emission standards only with the support of System 155. Now it can independentlymeet the standards. Among them, the daily removal of total nitrogen - the main pollutant in sewage, increased sig-ni?cantly from 130kg to 275kg, laying a solid foundation for the Company's subsequent sewage treatment after theexpansion of production capacity.
Kingfa Medical Sewage System Renovation Project
The original physicochemical ?occulation ad-justment system was changed from manual toautomatic to improve the system's stability.The anoxic tank was upgraded and trans-formed. The aeration system was changedfrom tubular type to disc type to improve thebiochemical denitri?cation capacity.
For the physical and chemical treatment sys-tem of the original System 151, the air flota-tion process was changed into inclined tubesedimentation to improve the physical andchemical mud removal e?ectiveness.
Contact Oxidation Tank 1 was changed intoan anoxic aeration tank to increase the de-nitri?cation capacity of the system.For Contact Oxidation Tank 2, the aerationsystem was changed from tubular type to disctype to improve the biochemical denitrifica-tion capacity.An ab aeration pipeline was added to themicrobial culture tank to increase biologicalactivity and sludge concentration.
Renovation Measures
6059
6162
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Circular EconomyThe Company is committed to constructing a resource recycling system throughout the product lifecycle and continuously improv-ing the resource utilization e?ciency. Internally, we have actively established a resource recycling mechanism within the scope ofproduction to reuse wastewater, waste gases, wastes, and leftover materials as resources. Externally relying on technological inno-vations in recycling the waste plastics, we will promote the high-quality development of the circular economy and provide strongsupport for the green transformation of the industrial chain.
Note: Green plastics is a collective term for fully biodegradable plastics and bio-based materials.
The Company has put forward an integrated and comprehensive solution for "making the best use of plastics". Through an e?ectiverecycling mechanism, we increase the recycling rate of plastic products produced, reduce resource waste, promote the recycling ofplastic products, transform them into new plastic products or other valuable resources, supply environmentally friendly high-quali-ty recycled plastics for packaging, automobiles, IT electronics, electrical appliances, furnishing, electrical appliances, electric tools,construction, energies, express delivery and other industries, and accelerate the green and low-carbon recycling transformation ofthe whole plastic industry chain. Since 2004, the Company has been engaged in the recycling and high-quality utilization of wasteplastics, and gradually constructed a circular, complete and closed technical recycling system for the whole process of the carbonemission reduction system that covers intelligent identi?cation, automatic sorting, green cleaning, product lifecycle classi?cation,cascade recycling, and high-quality utilization of the waste plastics.The Company domestically built two production bases of recycled plastics, including Qingyuan Base and Pizhou Base, which aresituated in South and North China respectively. We have built factories with a total area of 0.3 million square meters, 6 productionworkshops of high-performance recycled modi?ed plastics, more than 60 highly standard production lines, and 6 production work-shops for pretreatment of waste plastics, with a high-quality treatment capacity of 150 thousand tonnes of various waste plasticsand an annual production capacity of more than 500,000 tonnes of recycled plastics. The Company has created a re?ned recyclingsystem, developed more than 500 suppliers of high-quality recycled plastics, built more than 60 resource recycling outlets, andconstructed a multi-scenario and multi-channel plastic waste recycling network for industries, agriculture, life, oceans, and otherscenarios.
External Circular Cooperation
The Company's Circular Economy Solution for Plastics - an Integrated Comprehensive Solution for "Making the Best Use of Plastics"
Objectives of circular economyProgress of the objectivesBy 2030, the Company willproduce 1 million tonnes of green plasticsrecycle 1 million tonnes of waste plasticsmanufacture 1 million tonnes of recycled plastics
In 2024, the Companyproduced 274,100 tonnes of green plasticsrecycled 268,500 tonnes of waste plasticsmanufactured 348,100 tonnes of recycled plastics
Fossil rawmaterialsBiological raw
materials
Production of fos-sil-based plasticsProduction of bio-based plastics
Manufacturing of?nished products
Consumption
Repeated use
Repeated use
Land?ll
Incineration
Leak in environment
Modi?ed pelletizing
Hazard-freetreatment
Odor and impurityremoval
Cleaning andcrushing
Sorting
Recycling
Sorting
Recycled plastics
Bioplastics
Two major focuses
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
6364
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company innovatively developed a technology for visualizing the high-quality utilization of recycled materials,thus breaking through the bottlenecks in recycling light-colored plastics caused by low-temperature resistanceand uneven particle size of organic spotted materials. This technology introduced inorganic/bio-based spots, ac-curately controlling heterochromatic spots and ?ber defects, and achieving a carbon emission reduction e?ciencyof 21.6%. Besides, this technology separates spots through physical ?ltration during recycling, and produces rela-tively pure PCR. Being in line with the 3R principle of circular economy, it is conducive to creating a virtuous circleof economic bene?ts, promotes the development of the plastic recycling industry, and reduces resource consump-tion. Remarkable results have been achieved in reducing the carbon emissions.
Kingfa Environmental built a waste plastic recycling factory in Spain to implement a localized model of the circulareconomy. The project utilized integrated sorting, cleaning and high-quality recycling technologies to convert thewaste plastics into high value-added environmentally friendly materials and re-inject them into the local produc-tion and living chain. The early annual production capacity of the factory was up to 10,000 tonnes (which could beas high as 30,000 tonnes upon complete construction of the plant). In reliance upon the R&D capabilities of Euro-pean local waste plastic recycling quali?cations and technology centers, the high-performance recycled plasticsproduced by the Company demonstrated leading advantages in e?ciency, quality and supply cycle, achieving lo-calized supply in Europe, facilitating the achievement of the EU's carbon neutrality goal, and promoting the Com-pany's international development process.
Relying on a professional and complete waste plastic full-chain recycling and processing system, Kingfa Envi-ronmental provided a petrochemical company with a closed-loop solution covering waste sorting, transfer, andrecycling. The warehouse pretreatment system realized efficient sorting, crushing, cleaning, modification andhigh-quality processing of the waste plastics, forming recycled particles and environmentally friendly materialssuitable for daily chemicals, cables, household appliances, automobiles, and other fields. This solution deeplyintegrated the customers' new material resources, jointly developed comprehensive application scenarios of PCR/PIR, simultaneously provided carbon emission accounting and zero waste factory construction support, and pro-moted the increase in the resource utilization rate of production wastes and the coordinated development of thelow-carbon industrial chain.
Visualization of High-quality Utilization of Recycled Materials
Construction of a Waste Plastic Recycling Plant in Kingfa (Spain)
Assisting the Partners in Building "Zero Waste Factories"
The Company carried out in-depth cooperation with leading automotive lamp companies within the industry, andsuccessfully constructed a closed-loop recycling system of "scrapped automotive lamps - dismantling and crush-ing - Kingfa modi?cation - automotive lamp manufacturers - PIR (post-industrial recycled)" to realize recycling inthe factory. This system reapplied the recycled materials in manufacturing automotive lamps through efficientdismantling and modi?cation technologies. Its PIR solution not only fully met the performance test requirementsfor automotive lamp parts, but also contributed to a signi?cant reduction in carbon emissions in the productionprocess by about 33%. The results set a benchmark for the circular economy model of the auto parts industry.
PIR Recovery Plan for Promoting Recycling Scrapped Automotive Lamps
In 2024, Kingfa Biomaterials innovatively developed PLA online recycling technology to e?ectively recycle and re-use the nonconforming PLA resin products produced in the production process, reducing the accumulation of PLAwastes from the sources. This not only alleviated the environmental pressure caused by waste treatment, but alsosimultaneously reduced the raw material consumption and manufacturing costs, achieving both economic andenvironmental bene?ts.
R&D of PLA Online Recycling Technology for Promoting Recycling of theNonconforming Products
Kingfa Biomaterials carried out recycling actions for raw and auxiliary material packaging bags, materials falling o?machines, and crushed materials. Through the recycling process and reuse mechanism, the cumulative recyclingquantity reached 752 tonnes in 2024, greatly reducing Kingfa Biomaterials' demand for new raw materials, andsaving RMB 6.7 million in raw material procurement costs. While cutting the production costs, it also reduced thepotential pollution of the wastes to the environment.
Recycling of Leftover Materials and Bags
Full-chain Recycling Solution
During its active response to the call for the development of circular economy and vigorous promotion of sustainable develop-ment, the Company does not only actively strengthen external cooperation, deeply participate in the ?eld of waste plastic recy-cling, and join hands with all partners to construct a waste plastic recycling system, which e?ectively promotes the vigorous de-velopment of the circular economy, but also makes continuous e?orts in the internal production process. By adopting advancedtechnologies and processes, we realize the e?cient reuse of wastewater, waste gas, waste and leftover materials as resources, andconvert various materials that might have caused environmental burden into resources that may be re-put into production or haveother value, thus maximizing the utilization of resources and e?ectively reducing the negative impacts of the production on the en-vironment.
Internal Recycling
Partnership
Kingfa Environmental
Internal temporaryparking area
Qingyuan pretreatmentworkshop
DailychemicalsVehicleaccessories
HouseholdappliancesTurnoverWires andcablesExternal transitwarehouse
May coop-erate withExxonLogisticsvehicles
High-quali-ty recycledplastics
High-valueapplicationsClosed-loop use
Powder andparticle materials
Mobile turnovercartsBulk materialsTon bagsWastepackagesWastesContainers
Transportationprocess
Waste treatmentand recyclingPlastic turnoverbox under the
forklift
Modi?cation workshop(New Exxon materials
may be added)
6566
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
In 2024, Liaoning Kingfa invested RMB 1.48 million in solving the long-term problem that the tail gas from thedeethanizer of the PDH unit could not be recovered, relied on torch incineration treatment, and caused energywaste. Through technical transformation, the tail gas of the deethanizer could be led out and transported to thewastewater and exhaust gas incinerators of the acrylonitrile unit as fuel gas. After the transformation, the projectprovided 12,500 tonnes of fuel gas in total for acrylonitrile production, achieving resource recycling while reducingcarbon emissions, e?ectively decreasing energy waste and environmental pollution, and facilitating the enterpris-es' green and low-carbon transformation.
In 2024, Ningbo comprehensive utilization system of the Propane Dehydro-genation Unit (II) for pollution and carbon reduction was o?cially put intouse. Using an innovative waste heat recycling technology, the unit convert-ed the waste heat from production into medium-pressure steam for use bythe entire plant, signi?cantly reducing dependence on external energy. Be-sides, traditional fuels were replaced with rich hydrogen to form a resourcerecycling model. Through energy cascade recovery and alternative clean fu-els, this project signi?cantly reduced steam outsourcing, fuel consumption,and carbon emissions. It was selected as a pollution and carbon reductionproject in Zhejiang Province. Using a resource recycling model for promot-ing energy conservation, efficiency improvement and output increase, itbecame a green benchmark practice for low-carbon development.
Comprehensive Utilization Project of Tail Gas from Deethanizer of the PDH Unit
Comprehensive Utilization System of the Propane Dehydrogenation Unit (II) forPollution and Carbon Reduction
Propane Dehydrogenation Unit (II)
Chemical Safety
Kingfa Technology strictly abides by the national laws and regulations on the safety management of hazardous chemicals, includ-ing the Regulation on the Safety Management of Hazardous Chemicals, in an attempt to reduce the risks of chemical accidents andprevent accidents of hazardous chemicals.
The Company has formulated the Safety Management System for Hazardous Chemicals, Management Procedure for HazardousChemicals, Chemical Emergency Preparedness and Response Plan, other rules and regulations to ensure the safety managementof hazardous chemicals in the whole lifecycle of procurement, storage, use, and disposal. It regularly conducts safety assessment,safety training, and education on the hazardous chemicals, as well as emergency drills on hazardous chemicals incidents. In addi-tion, the Company actively promotes the intrinsic safety management of the hazardous chemicals, encourages the R&D and appli-cation of green environmentally friendly chemicals, and reduces the possible impacts on the environment during production anduse from the sources.
The Company requires the suppliers of hazardous chemicalsto entrust the carriers quali?ed for road transport of dangerousgoods to carry the hazardous chemicals. We strictly control andinspect the incoming vehicles transporting hazardous chemi-cals, requiring the vehicles and transport personnel to take ?reand explosion prevention measures when entering areas where?ammable and explosive hazardous chemicals are stored andused. The vehicles and personnel shall also be equipped withsufficient and effective emergency treatment equipment andfacilities, as well as personal protection equipment.When handling the hazardous chemicals within the Company,each department shall formulate safe operating procedures forhandling hazardous chemicals based on the characteristics ofthe hazardous chemicals, educate and supervise employees tohandle the hazardous chemicals in a standardized manner.
For the storage of hazardous chemicals, the Company strictlyimplements relevant regulations and standards such as theGeneral Rules for the Hazardous Chemicals Warehouse Storage,and all hazardous chemicals are stored in approved hazardouschemical warehouses that conform to national standards. Thehazardous chemicals are partitioned, classified and stored indi?erent warehouses by their characteristics.The hazardous chemicals warehouses shall be managed by per-sonnel with corresponding professional knowledge and safetyskills, equipped with reliable personal protective equipment.Corresponding safety facilities and equipment are set up in thewarehouses according to the types and characteristics of thehazardous chemicals to ensure the safe storage of the hazard-ous chemicals at all times.
The Company strictly controls the safety of the hazardouschemicals from the source, purchases hazardous chemi-cals from quali?ed suppliers, and requires the suppliers toprovide corresponding material safety data sheets. For thepurchased hypertoxic, precursor, and explosive hazardousprecursor chemicals, we take the initiative to report to thepublic security organs in accordance with regulations, andperform due diligence.
The Company has established a strict management systemfor the use of the hazardous chemicals. Our relevant pro-curement, storage management, safety management, useand operation personnel have undergone relevant trainingand obtained qualification certificates in accordance withnational requirements. We have maintained a completeledger for the receipt and use of the hazardous chemicals,and regular inventories are made.The Company is equipped with personal protective equip-ment up to national standards, strictly requires the employ-ees to wear corresponding personal protective equipmentwhen operating the hazardous chemicals, and regularlyconducts safety inspections, practical training, and emer-gency drills.
Strategies
TransportationProcurement
Storage
We have formulated the Management Procedures for Four Typesof Wastes in accordance with relevant national and local laws,and industry standards. The hazardous chemical wastes andother wastes produced in the production process are collected,classified, and temporarily stored according to company-levelnational waste management documents and standards, hand-ed over to quali?ed third parties for transfer and disposal. TheCompany performs whole-process risk identi?cation and closed-loop risk management for the compliant disposal of wastes, inorder to make industrial solid wastes traceable and searchable,and ensure the compliant disposal of waste hazardous chemicalresidues.
Waste disposal
We have drafted the Emergency Plan for Production SafetyIncidents, a reasonable, complete and effective emergencyresponse plan for hazardous chemicals, and organized no lessthan one practical drill every year in accordance with the na-tional requirements.
Emergency response
Use
Chemical Safety Management
6768
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Risk Management
Statistically analyze the stock,types, and storage locations ofvarious hazardous chemicals.Create a database for the haz-ardous chemicals.
Regularly organize personnelto conduct special inspec-tions on hazardous chemicalswarehouses and laboratories.Track and implement the rec-ti?cation. In combination withthe environment and operat-ing procedures, the potentialrisk factors of all positions inan area are identi?ed. Qualita-tive and quantitative methodsare used for evaluation.
Check the equipment of safetyfacilities in places where thehazardous chemicals are storedand used; regularly inspect theoperation of the facilities, andcheck the implementation ofthe safety management system,including personnel training,compliance with the operatingprocedures, emergency plans,and drills.
Prioritize renewable, degradable,low-toxicity and low-emission rawmaterials and reduce dependenceon traditional petroleum-basedplastics.
Establish stringent procurement standards for envi-ronmentally friendly raw materials, give priority toraw material suppliers who have passed environ-mental protection certification and conformed tointernational environmental protection standards,and ensure that the sources of raw materials are le-gal and environmentally friendly.
Actively promote upstream and down-stream enterprises of the supply chainto use environmentally friendly rawmaterials, jointly build a green supplychain, and improve the environmentalprotection of the whole industry.
Comprehensive datacollection
Risk identi?cationand analysis
Review of safety facilitiesand management measures
Chemical Safety Evaluation
Emergency Material Reserves for Hazard-
ous Wastes
Warning Signs of the Hazardous Wastes
Warehouse
Fire?ghting System of the Hazardous
Wastes Warehouse
Xylene is a hazardous chemical with a "Class A" ?re hazard. For this reason, Zhuhai Vanteque Specialty EngineeringPlastics completely cancelled the use and storage of xylene in the polyarylether resin process in May 2024 to elim-inate the employees' health risks and hidden dangers of ?re explosion. This action simultaneously reduced thestorage scale of the hazardous chemicals in the enterprises, reduced the costs of environmental governance andsafety protection, and optimized both production activities and environmental risks by reducing the emissions ofxylene volatile organic compounds (VOCs).
To Reduce the Use of the Hazardous Chemicals, Zhuhai Vanteque SpecialtyEngineering Plastics Cancelled the Use and Storage of Xylene
Management of Raw and Packaging MaterialsThe Company deeply understands the importance of raw and packaging material management for practicing green development,regards e?cient resource utilization and waste reduction as its core management goals, establishes strict raw material screeningstandards, gives priority to environmentally friendly, renewable materials, and optimizes production processes to reduce resourceconsumption. Besides, the Company actively promotes the lightweight design and recycling of packaging materials, establishesan internal recycling mechanism, and signi?cantly reduces waste generation. The systematic internal management measures con-tinuously improve the resource utilization e?ciency, reduce environmental footprints with practical actions, and provide strongsupport for the realization of sustainable development goals.The Company is committed to improving the performance and quality of environmentally friendly raw materials, giving priority togreen raw materials, and establishing strict procurement standards to ensure that the negative impacts on the environment aremitigated while meeting the functional requirements for products.
In terms of packaging material management, the Company reduces resource consumption and wastes by optimizing packagingmaterial design, reducing unnecessary packaging layers and material use, and implementing recycling measures. Committedto constructing a scienti?c and e?cient management system for saving packaging materials, the Company formulated the BagManagement Standards. By implementing strict systems for procurement, storage, use and recycling of the packaging materials, itreduces the wastes from the sources and increases resource utilization e?ciency while ensuring the timely supply of the packagingmaterials.
Raw Material Management
Packaging Material Management
Management Measures of the Company for Raw Materials
In 2024, Liaoning Kingfa organized a project for reducing the packagingcosts to decrease and recycle the slip sheets consumed during warehousingand delivery. By replacing the existing 0.8 mm (disposable) slip sheets with
1.5 mm slip sheets (which may be reused more than 6 times), the project
signi?cantly reduced the consumption of slip sheets and the use of dispos-able slip sheets while generating economic bene?ts. As of the end of the re-porting period, the project approximately created bene?ts of RMB 1,483,400,and reduced the use of approximately 155,700 disposable slip sheets.
Reducing Disposable Consumption and Promoting Recycling of the Packaging Materials
Recycling of Slip Sheets
As of the end of the reporting periodThe Company hadof products that had passed sus-tainability-related certi?cations
pieces
raw materials produced by theCompany are traceableUp to100%of all productsaccounting for
1.88%
Prioritize green raw materialsEstablish procurement standards
Empowering upstream anddownstream of the industries
Conditions ofemergency materials
Explosion-proof
lampsSprinklers
SocialResponsibilities
SDGs benchmarking
Invested RMB
2.49
billion in R&D
and won
Patent Excellence Awards
The score obtained in theemployee engagement was
82.47%
The incidence rate ofoccupational diseases was0%
583,501.8hoursand the total employee traininghours were as long as
heavy work-relatedand
Highlighted results
While pursuing its own high-quality development, the Companybravely shoulders its social responsibilities and actively gives backto the society. We focus on innovation-driven and intellectual prop-erty strategies, strengthen the technological innovation and indus-trial chain advantages, assure the product safety and quality, andoptimize the supply chain e?ciency. We actively assume our socialresponsibilities, promote our talent development, participate in thesocial welfare and rural revitalization, protect the data security, andsupport the sustainable development of the industry and society.
injuries occurred
7172
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexResponsibility for Governance
Innovation-drive and Intellectual PropertyAs the world's largest producer and consumer of new chemical materials, China is facing strategic opportunities for optimizingthe industrial structure and making continuous breakthroughs in high-end new materials in the new material industry. The rapiddevelopment of strategic emerging industries such as new energy, new infrastructure, 5G communications, arti?cial intelligence,and VR/AR has brought new opportunities for the Company's continuous high-quality development. During the reporting period,the Company e?ectively responded to the complex internal and external environment, strengthened the technological innovationaround the new quality productive forces, enhanced the advantages of the integrated industrial chain, and relied on the world'sleading application innovation capabilities to provide global customers with more competitive and overall new material solutions.
The Company has continuously developed the world's leading technology R&D platform, created a R&D system known as "13551",led innovation, achieved leapfrog development, improved its independent R&D capabilities, developed clean renewable newproducts to lead the industry's technological upgrading, in an attempt to become a global leading enterprise of new chemical ma-terials, achieve high-quality development, and make technological innovations to serve the country through industry.
Independent innovation,technology leadership, glob-al collaboration
Construct a high-level, all-round andmulti-level comprehensive innova-tion system in the industry for thecore purpose of gathering top inno-vative talents, building a high-levelR&D platform, innovating the busi-ness model and implementing anadvanced innovation managementmechanism.
Implement talent strategy,capital strategy, brand strate-gy, and intellectual propertystrategy combining standardsand patents.
Innovation objectiveInnovation strategy
Resource Input and Innovation Capacity Building
"13551" - an R&D System
Innovative visionInnovation missionGrow together with partners,share achievements, providehigh-quality new materials forthe society, and create a won-derful life.
R&D objectives
Leapfrog developmentUnder the background of national strate-gic emerging industry support, construct"13551" as a R&D system based on globalcollaboration. Take the R&D of modifiedplastics as a breakthrough, strive to im-prove technological innovation capabili-ties, make high-quality, green and intelli-gent technological innovations in all links,actively carry out technological upgrading,increase resource utilization efficiency,and enhance the Company's overall com-petitiveness.
Develop across fields, industries and regions. Organize the con-struction of a national industrial innovation center, strengthenindustry - education - research cooperation technology innovationalliance, integrate the existing innovation platform resources, andbuild a combined innovation fleet with the business model thatincreases customer value as the traction, with the construction ofthe R&D platform of Academia Sinica as the center, 3 internationalR&D centers, 5 domestic sub-technology centers and 5 new chem-ical material incubation bases as the pivots, and with world-classinnovative talents and teams as bases, guaranteed by a systemat-ic, professional and e?cient global collaborative work system, tolead the common development of the industry.
Technology leadership
Innovation Platform
Nationally Recognized En-terprise Technology CenterNational Engineering Labo-
ratoryNational Key LaboratoryNational Industrial Innova-tion Center
Nat
ion
a
lly
Recognized
Academician
Testing
Laboratory
Workstation
Provincial
Key
Guangdong
Key
Laboratory
C
o
o
p
e
r
a
t
iv
e
In
d
u
s
try-Cente
r
f
o
r
S
p
ecial
En
g
in
e
e
r
in
g
P
la
s
t
ic
s
E
n
te
r
p
ri
s
e
s
PostdoctoralResearch
University-Research
R&D
Workstation
1 central researchinstitute
5 incubation bases for newchemical materials
| 1 | 5 |
3 international R&D
centers
1 national industrial
innovation center
| 3 | 1 |
5 technicalsub-centers
2021
RMB 1,455million
RMB 1,454million
2022
RMB 1,973million
2023
RMB 2,490million
20242021202320222024
R&D investments
En
g
ineering
Techn
ology
R&D
Center
7374
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Innovation management mechanismSustained high-growthR&D investmentmechanism
The Company has formulated the Management Measures for Scientific Research Work,where clear indicators have been put forward for the investment of scienti?c research fundsand the growth rate of scienti?c research investment, to promote its sustained and high-growth R&D investments.
Operation mecha-nism for market-ori-ented technological
projects
The Company has standardized the process management of technological projects. Guidedby the market demand and for the major purpose of "making breakthroughs in key indus-tries", assure project quality, and build an inter-departmental collaborative product devel-opment team with the participation of product development, marketing, ?nance, pilot test,production personnel and other members, in order to ensure the rapid response to marketdemand and the e?ective transformation of achievements, and promote the orderly devel-opment of scienti?c research projects.
Scienti?c ande?ective talenttraining, manage-ment and incen-tive mechanism
Implement a talent training plan for "external introduction and internal training", and vigor-ously perform innovative leading talent projects; make use of talent policies such as Guang-dong Provincial Leading Innovation Team Plan to attract and introduce the talents. Inter-nally, we create career promotion channels, enhance the R&D capabilities of the technicalteam, and cultivate international competitive technical talents through training programssuch as "Genesis Plan", "Overseas Creation Plan" and "Creation Plan". For innovative proj-ects, incentives are o?ered according to project value and individual contributions.
An enterpriseculture cultiva-tion mechanismfor encouraginginnovation and
tolerating failures
The Company's values are promoted through publications such as "Kingfa Science & Tech-nology News". A corporate innovation culture of "encouraging innovations and toleratingfailures" and a comprehensive innovation atmosphere of "innovation everywhere and inno-vation in everything" have been created.
During the reporting periodthe Company had a total of
foreign academician
experts with special al
and
professional technical
Key Technological Breakthroughs and AchievementTransformationUpholding "making independent innovations, taking the lead in technologies, and creating excellent products", the Company hasbeen accumulating technologies and studying products. Progressively, we have built a R&D platform driven by technology, indus-try and product research. We have made constant e?orts in four major sectors, namely modi?ed plastics, new materiScience and Technology Honors
Key Technologies and Industrialization ofHalogen-free Flame Retardant Polymers in
the New Energy Field
China Patent Excellence AwardThermoplastic resin composition (Shang-
hai Kingfa, the Company)
First Prize of Guangdong Provincial
Science and Technology Award
Integrated Complete technologies forUpgrading and Recycling Waste Plasticsand Their Industrial Applications
China Patent Excellence Award
PBAT resin composition (Zhuhai Wango,the Company, Tianjin Kingfa)
Key Technologies for the Preparation of Degrad-able Copolyesters Based on Precise Regulation ofSoft and Hard Segments of Molecular Chains andTheir Application in Agricultural Films (the Compa-
ny and Kingfa Biomaterials)
Second Prize of National Scienti?c and
Technological Advancement Award
China Patent Excellence AwardMatte PE material, manufacturing methodfor same, and applications thereof (the
Company)
Key Technologies for Preparing Sustain-able Polymer Composites for New EnergyVehicles (Shanghai Kingfa)
Second Prize of the Science and Tech-
nology Progress Award of the Light
Industry Council
Diancheren 2024 Smart Electric Vehicle "Technology
Innovation Award"Ablation-Resistant Injection Molding Material for Power Battery Packs
Key Technologies for Preparing High-per-formance Polyole?n Composites for New
Energy Battery Packs (Shanghai Kingfa)
Second Prize of the Science and Technolo-gy Progress Award of China Petroleum andChemical Industry Federation
lowance from the StateCouncil
personnel above the deputysenior level.
First Prize of the Science and TechnologyProgress Award of the Light Industry Council
7576
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Businesssectors
Innovation achievements
Modi?ed plastics
Independently developed PFAS Free, 5VA highly heat-resistant PPE, which further improvedthe ?ame retardance of the material apart from being PFAS Free as required by the customer.The self-developed ?ame-retardant enhanced PC products contributed to the long-termperformance stability of outdoor security products and broke up the monopoly of foreignmanufacturers in the security industry.Independently developed bio-based PA5T, LCP and other special modi?ed engineeringmaterials resistant to higher temperature during use, which met the industry's requirementsfor high current, voltage and temperature rise. The materials are widely used in connectors,photovoltaics, lithium batteries, and power tools.Independently developed rapid prototyping reinforced PBT, which realized a signi?cant de-cline in the molding cycle, greatly improved the competitiveness of materials, and achievedsuccessful application in the automotive connector industry.The self-developed chemically recyclable PBT, transparent MBS and bio-based PA helped thecustomers reduce the carbon emissions of products.Independently developed high-strength PA6, and realized the application of plastics insteadof steel in automotive structural parts through hybrid structure design.
Environ-ment-friendlyhigh-performancerecycled plastics
Through the self-developed core technologies such as intelligent ?ne sorting, e?cient clean-ing, and low-carbon recycling, an integrated overall industrialization solution was developedfor the waste plastics. Related projects won the First Prize of Guangdong Provincial Scienceand Technology Progress Award.
Greenpetri?cation
Independently developed products such as high-rigidity, high-toughness, heat-resistant, elec-troplated, weather-resistant and chemical-resistant ABS, breaking through the performancebottleneck of traditional ABS and gaining market recognition.Independently developed special high-performance modi?ed materials for the toy industry,which met the stringent requirements of the toy industry for safety, durability and environ-ment-friendliness, and provided core material solutions for upgrading toy performance.Independently developed materials with high ?ow, high rigidity and high impact properties;successfully overcame technical di?culties on material odor control and spray painting thathad long plagued the industry; greatly improved material properties and application perfor-mance; overturned the dominant position of foreign companies in the ?eld of these materi-als.Independently developed special modi?ed polymer composites for the wire drawing indus-try, shortened the product molding cycle and provided key technical support for the processupgrading of the wire drawing industry.Continuous progress was made in the independently developed cyclic ole?n copolymer(COC), its key monomer norbornene (NB) and key production technologies, sold and recog-nized by the customers.
Key technological R&D projects during the reporting period:
Business
sectors
Innovation achievements
Fully biodegrad-able plastics
Breakthrough progress was made in the project of "High-yield Succinic Acid Strain with Inde-pendent Intellectual Property". The conversion rate, potency, and other indicators reached anadvanced level on a worldwide basis. The Company's independently developed high-perfor-mance strains flexibly produced important chemical raw materials and products such as lacticacid and succinic acid, forming a "carbon cycle" of raw materials → finished products → com-plete biodegradation, which contributed to the development of China's circular economy andgreen GDP growth, carbon peaking and carbon neutrality work.For the self-developed halogen-free flame retardant, the opportunity of green chemical up-grading was seized to overcome core technologies such as high heat resistance, precipitationresistance, and long-term compatibility. Developed an environmentally friendly formula systemand achieved industrial mass production. Promoted large-scale application in the global market,and the technical indicators were internationally leading.The Company's project on "Key Technologies for Preparing Degradable Copolyesters and Ag-ricultural Film Applications Based on Precise Control of Soft and Hard Segments of MolecularChains" won the Second Prize of 2023 National Science and Technology Progress Award. As aleading and responsible unit, the Company undertook the National Major Science and Technol-ogy Project. Based on the major needs for the national "carbon peak and carbon neutrality"strategy, we promoted the development in biomanufacturing and the new quality productiveforces, and sped up China's overtake in the new track of bio-based degradable polyesters.The Company undertook the sub-project of the National Key R&D Plan, achieving breakthroughprogress, focusing on global environmental pollution problems (white pollution), giving full playto the advantages of application development and industrial manufacturing platforms, and sup-porting commercial promotion of biodegradable plastics in the packaging industry.By creatively designing the molecular structure of resin, modified PBAT useful for high-speedfilm blowing was developed. The film blowing speed was increased by 40%, and the blown filmprocessing costs were cut significantly. The gaps between biodegradable packaging materialsand traditional packaging materials were further narrowed in terms of their processability. Thespecial materials for biodegradable films were further upgraded. The Company adapted to theneed that high-end flexible packages should be environment-friendly, made breakthroughs inthe blown film-grade bio-based high toughness, high transparency and high gloss technologies,and realized small-scale application of high-end flexible packages, reaching the world's leadinglevel.Independently developed special materials for fully biodegradable straws based on the rapidcrystallization and modification process, which solved the problem of low production effi-ciency caused by low thermal deformation temperature and slow crystallization of traditionaldegradable plastic straws. The straws were highly heat-resistant with their rapid crystallization,and the product innovations were widely recognized by downstream companies. The Companymade phased breakthroughs in high-speed 3D printing applications. Domestically, the productquality was first-class, and the product performance met various standards, recognized by corecustomers.Independently developed bio-based PBT, bio-based PBST, and fully bio-based PBXY for degrad-able film bags, achieving a high compatibility between the bio-based and degradable, satisfyingthe multi-faceted diversified market needs, leading the development orientation of the indus-try, and consolidating the Company's leading position in the industry.
Special Engi-neering Plastics
Made breakthroughs in multiple key industrialization technologies of polyarylethersulfone.The industrialization unit with a capacity of 6,000 t/year was successfully put into operationand achieved full production capacity. The polymerization e?ciency, energy consumption andquality were signi?cantly improved.
7778
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Business
sectors
Innovation achievements
Special Engineering
Plastics
Independently developed a new generation of cold and thermal shock-resistant halo-gen-free ?ame-retardant semi-aromatic polyamides, which demonstrated excellent electri-cal safety at high-temperature and high resistance under harsh environment. The materialshave been widely used in key areas such as high-voltage copper bars for new energy vehi-cles and ultra-high speed fans for servers, providing leading material solutions for high-reli-ability application scenarios.Independently developed ablation-resistant halogen-free ?ame-retardant semi-aromaticpolyamides, which maintained structural integrity and excellent electrical insulation afterhigh-temperature burning and improved the safety and reliability of the 800V high-voltagearchitectures of new energy vehicles. New industry standards were established for protect-ing safety of the high-voltage system of electric vehicles.Independently developed several types of LCPs with electrical performance control, ul-tra-high ?ow, low warpage, and high damping and shock absorption. The LCPs are widelyused in key components such as high-speed connectors, CPU sockets, and high-speed cool-ing fans to promote high-speed and stable operations of AI servers and big data centers.The independently developed anti-cracking LCPs have been widely used in the structuralparts for packaging new energy batteries to improve the packaging e?ciency and safety ofnew energy batteries.Independently developed the second-generation polymerization technology for extru-sion-grade LCP resin. The resin produced was used in high-strength LCP ?bers in largequantities, which greatly improved the ?ber strength and stability.
Carbon ?ber andcomposites
A self-developed gradient energy-absorbing, high-impact steel-plastic composite boardimproved the application capabilities of thermoplastic composites in the ?eld of newenergy vehicles.
Healthcarepolymers
The self-developed nitrocellulose microporous membranes for in vitro diagnostics havebeen put into pilot-scale production, successfully breaking through the technical barriersand bottlenecks in this ?eld, laying a solid foundation for large-scale mass productionand market application, and accelerating import substitution.The self-developed super-soft nitrile gloves and high-grade chemical-resistant gloveshave successfully been put into use in high-end ?elds, including dentistry, foods, andchemicals, highly recognized by customers for their excellent product performance andquality.The self-developed multi-grade and multi-functional air ?lters have achieved mass pro-duction and sales, empowering the development of the industry and being well receivedby customers.
Nowadays, when the low-altitude economy is booming, the Compa-ny focuses on making R&D breakthroughs in the ?eld of unmannedaerial vehicles, develops customized material solutions accordingto the differentiated needs for consumer-grade unmanned aerialvehicles and industry-grade products, provide strong support for thedevelopment of the low-altitude economy, and help the industry ofthe unmanned aerial vehicles reach new heights.
Material R&D for UAVs Facilitated the Development of Low-Altitude Economy
UAV Application
Consumer-grade UAVs
Industry drones
Made of carbon fiber reinforced thermo-plastic materials, they are used in the injec-tion-molded body, arms, shock-absorbingplates, platforms, blade clips, and othercomponents to satisfy the performance re-quirements.Use continuous carbon ?ber composites tomake blades, arms, etc. to improve productquality and performance.
In the face of high-standard supervision over the food-grade recycled materials in Europe and the United States, theCompany obtained a no objection letter (NOL) from the US FDA (Food and Drug Administration) in September 2024,becoming Asia's ?rst Company that passed this certi?cation. In this letter, a reply and a con?rmation were made thatthe Company's recycled HDPE recycling process could produce food contact grade HDPE (covering all scenarios suchas high-temperature sterilization and refrigeration), marking that the Company's recycling technologies had beenrecognized by international authorities. The Company not only broke through the barriers of the high-end food pack-aging market in the United States, but also realized 100% conversion of post-consumption waste plastics into food-grade materials, setting a technical benchmark for the Asian recycled plastics industry and accelerating the upgrad-ing of the global industrial chain to a highly safe high-value recycling model.
Obtained a No Objection Letter from the FDA and Set a Benchmark for RecyclingTechnologies
Kingfa Medical independently initiated an innovative R&D project of the "Complete Production Line Based on theSupercritical Electrostatic Jetting Principles and Technologies" to develop high-strength functional supercriticalelectrostatic jetting nonwovens for medical protection and packaging products. Kingfa Medical deeply explored theformation mechanism and regulation mechanism for supercritical electrostatic jet nonwoven micro-nano structures,clari?ed the structure-activity relationships among the functionality, processes and raw material structures, and re-alized independent, controllable production of high-strength functional nonwoven materials and their preparationtechnologies.During the reporting period, Kingfa Medical made remarkable progress in this project. It not only completed thesystematic optimization of dissolution, blown spinning, screen laying, hot rolling and other processes, but also suc-cessfully developed the pilot production line preparation process and smoothly completed customer samples for themedical packages. As of the end of the reporting period, the overall pilot plan and main equipment had been devel-oped, and the pilot production line had been installed. It is expected that the system debugging and process packagewill be output in 2025 to achieve continuous and stable production of the pilot production line. The successful im-plementation of this project not only demonstrates Kingfa Medical's independent innovation capabilities in the ?eldof supercritical electrostatic jet nonwovens, but also lays a solid foundation for China's technological breakthroughsand industrial upgrading in this ?eld.
The Breakthrough in the Supercritical Electrostatic Injection Technology RealizedIndependent and Controllable Production
7980
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Intellectual Property Protection
The Company has formulated management systems for intellectual property protection, including the Intellectual Property Man-agement Manual and the Procedural Documents for Intellectual Property, and established corporate standards such as the Intel-lectual Property Management Regulations. A clear intellectual property management system has been established, de?ning theresponsibilities of the management representatives, competent intellectual property and other relevant authorities, and standard-izing the management of intellectual property declaration, ownership, use and infringement. The intellectual property manage-ment system is annually audited. The Company has been certi?ed by the intellectual property management system and won thehonor as a National Advantageous Intellectual Property Enterprise.Intellectual property management
A technical committee composed of product line managers, R&D engineers, and patent engi-neers was set up. Various intellectual property platforms such as the "National Technical Com-mittee for Standardization of Plastic Products/Sub-technical Committee for Modi?ed Plastics"and "Guangdong Advanced Manufacturing Standardization Pilot Unit" have been establishedto promote the Company's transformation from product leadership to patent and standardleadership.
Number of valid patentsowned2,977
Annual number of new inventionpatent applications
Number of new invention pat-ents authorized in the year
During the reporting period, the Company won
China Patent Excellence Awards.
Number of copyrights owned
Annual number of new copyrights
Number of trademarks owned
Annual number of new trademarks
The Company and its subsidiaries conducted intellectual proper-
ty and patent protection training respectively
Patentstandardization
Safety and Quality of Products and Services
We adhere to the quality concept of "maintaining survival based on standards, becoming powerful in reliance upon quality, andtaking the customers ?rst". We have established a standardized and lean product, safety and quality system, provided our custom-ers with all-round, full-cycle service support, and ensured that all products demonstrate excellent "Kingfa quality".
The Company has established a product quality management system covering the Quality Manual and Incoming Material Inspec-tion Process to strictly control the quality of the whole product process to ensure stable and safe quality. During the reporting peri-od, the Company and all its subsidiaries passed the quality-related system certi?cation.
In 2024, the Company provided on-site support for a supplier's control over the foreign contaminants of the PPS res-in, set up 6 metal control nodes from raw materials to ?nished products, used iron removal rods, metal detectors andother detection methods, and replaced metal ?lters with PPS ?lters. The process e?ectively eliminated the generationof metal impurities, assured product quality, mitigated product risks resulting from metal foreign objects, and helpedthe supplier improve its product quality and capabilities.
Support for a Supplier's Control over Metal Contaminants
Quality control procedure
Analyze risks, anddraw up preventivemeasures, qualitystandards and plansfor their realization.
The operational en-vironment and themeasurement systemare up to standards.The human resourcesmeet the capabilityrequirements. Thedocument systemsare standardized.
Strictly select and man-age suppliers; developa supplier quality man-agement system andperform second partyaudits.
Keep customer infor-mation confidential;specify product andservice requirements;review design and de-velopment outputs.
Standardize operationsand make labels trace-able; audit productsand provide customerservices; dispose of thenonconforming prod-ucts in the reportedchannels.Planning risks and
opportunities
Quality support
resources
Operations forquality control
External operations
management
Provisioning ofproduction services
Product Safety and Quality
During the reporting period
8182
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Product Recall
Management of Hazardous Substances
The Company prevents and averts recall risks ahead of risk analysis. We standardize the after-sales product disposal process, spec-ify the recall process and the responsible department in the Quality Control Speci?cations for Product Shipment, and incorporateon-site product return and recall data into our performance indicators related to customer satisfaction to truly protect the rightsand interests of the customers. Since its establishment, the Company has not experienced any recall.
The Company always protects product safety, strictly controls the use of hazardous substances in products, and formulates theTechnical Standards for the Control of Hazardous Substances to clarify the prohibited substances in the raw materials to ensureproduct compliance and minimize the adverse impacts on the environment. During the reporting period, the Company and itsthree subsidiaries obtained the QC 08000 Hazardous Substance Process Management System Certi?cation.The Company continuously updated the regulated list of hazardous substances and drafted reduction and control plans, whichshould be strictly implemented by the Company and its suppliers. When reviewing the new and quali?ed suppliers, the Companywill check the prohibited substances separately. If the suppliers fail to meet the standards, the Company will require the suppliersto complete the recti?cation and re-audit them within one month. If the suppliers still fail the re-audit, no new suppliers will be in-troduced, and the quali?ed suppliers will be directly eliminated.
Control
level
List of substancesControl methodLevel I
Isopropylphenyl phosphate, medium-chain Chlorinated paraffin, poly-brominated biphenyls, poly brominated diphenyl ethers, polychlorinatedbiphenyl, dicumyl peroxide, 2-(2-hydroxy-5-tert-octylphenyl) benzotriazole(UV - 329), 2, 4, 6-tri-tert-butylphenol (2, 4, 6 - TTBP), and diphenyl (2, 4,6-trimethylbenzoyl) phosphine oxide
Ban their use in the products immediately, andintentional addition is prohibited for any items.The content of all product compositions mustmeet the control requirements or special cus-tomer requirements, except those that complywith the exemption items and can be exempted.Level II
PFAS, 6-[(C10-C13)-alkyl-(branched, unsaturated)-2, 5-dioxopyrrolidin-1-yl]hexanoic acid, triphenyl phosphorothionate, octamethyltrisiloxane, per-?uamine, reaction mass of triphenylthiophosphate and tertiary butylatedphenyl derivatives, tris (4-nonylphenyl, branched) phosphite
Prohibit their use after the specified date. Touse them in the manufacturing process, thesuppliers shall consider and draft a mitigationand gradual replacement plan.Level III
Triphenyl phosphate, resorcin, per?uorobutanesulfonic acid (PFBS) andits salt, decamethylcyclopentasiloxane (D5), dodecamethylpentasiloxane(D6), octamethylcyclotetrasiloxane (D4)
The suppliers need to pay attention to their use.Currently, the period of use is not speci?ed, andthese materials will be automatically convertedinto Class II controlled substances with the in-troduction of new regulations.
Cultivation of Quality AwarenessThe Company actively carries out the quality-related training, builds a quality talent echelon, and has the quality awareness deeplyrooted into the hearts of all employees. During the reporting period, the Company continuously improved the training of qualitymanagement-related talents to meet the Company's needs for high-quality development and global quality talents:
Trained 12 talents for each echelon, including department heads and supervisors. All supervisorsundertook job rotations till it was conducive to their business improvement or personal growth.Added 3 key quality account managers, to enhance the extension to Japan and Vietnam.Appointed 2 R&D quality managers, to discuss the reliability of formula design, quality managementof sample delivery, trial production assurance, formula change evaluation, etc.Appointed 5 engineers and foremen to change the foreman model that focused on the executioninto an engineer empowerment model to build specialized inspection platform.
The senior management assisted in continuously promoting the training of new employees.The LSSGB program was started for systematic training about the Six Sigma awareness and method.Performed the Golden Shield Plan Phase II.
The Company has formulated customer service systems such as Customer Complaint Management Regulations to provide thecustomers with prompt services before, during and after sales, quickly standardize the process for handling customer complaints,respond to customer demands in a timely manner, and improve customer satisfaction with its products and services.
Control quality in the wholeproduction process and ana-lyze the causes of nonconform-ing products. Supervise theimplementation of correspond-ing measures and follow-upimprovement measures.
According to the product recallorders of the Quality Depart-ment, recall the nonconformingproducts from the market andcarry out subsequent work.
Make transportation arrange-ment for the recalled productsand implement correspondingmeasures according to marketrequirements.
Quality DepartmentOperationsDepartment
Product Recall Procedures
Control over the Company's new hazardous substances during the reporting period
Echelonconstruction
Talent
training
Customer services
Transparent
Focus on customers
Fair
Responsive
Convenient
Responsibilities
Free
Con?dentiality
Continual improvement
Guiding principles for handling customer complaints
Planning and WarehousingDepartment
8384
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Supply Chain SecurityThe Company has constructed and continuously improved the supplier lifecycle management system, built an SRM platform, andrealized targeted transparent supply chain management based on the di?erentiated needs of all the Company's business segmentsand product categories. We have leveraged our own advantages to continuously empower our suppliers' performance in the quali-ty system, ESG, and other aspects to build a sustainable supply chain.
In 2024, the Company continuously promoted the quality management model for key accounts and expanded thecapacity of 32 major customers. Starting from demand identi?cation, source management, resource transformation,innovation leadership, quality trust, and collaborative cooperation, we exactly satis?ed the quality and service needsof the key accounts. The one-way service model was changed into a customer-focused iron triangle service model,which greatly improved the services.
Promotion of key customer service model
客户服务模式转变
Graded responses to complaints
Make an emergency responsewithin 8 hours, and provide theinvestigation results within 2business days. In case of anyanomaly, contact the superior orthe complainant in time to givean explanation.
Make an emergency responsewithin 12 hours, and providethe investigation results within2 business days. In case of anyanomaly, contact the superior orthe complainant in time to givean explanation.
EmergentUrgentGeneral
Handle the complaint normally,and offer an initial reply or sug-gestions within 1 business day.Make the final suggestions onhow to handle the complaintwithin 3 business days. If thecustomer puts forward specialrequirements for time, reply with-in the time limit speci?ed by thecustomer. In case of an abnor-mality in the handling process,report to the complainant assoon as possible.
Tel: +86(020)-66818888Fax: +86(020)-66848888
Address: 33 Kefeng Road, Science CityPostal Code: 510663
O?cial Account:
Kingfa New Materials
Userfeedbackchannels
Quality(internaloperation)Quality(internaloperation)
BusinessTechnical
CustomersChange in the Customer Service Model
Risk control mechanism
Collaboration mechanism
O?boarding management
Quali?cationpre-examinationOn-site Audit
Supplier confer-
encesBusinessexchangesTechnicalexchanges
QualityexchangesPlatforminteractions
Risk warning(credit, ?nance,quality, delivery)Contract guarantee(technologies, qual-ity, supply, socialresponsibilities)
Supplier resource pool
TradingsuppliersQuali?edsuppliers
Customers
BusinessTechnical
Supplier management process
Introductionmanagement
RelationshipmanagementPerformancemanagementClassi?edmanagement
8586
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
In 2024, the Company continuously improved theSRM system portal, launched a non-raw materiale-commerce platform, and increased procure-ment efficiency. The Company published themanagement requirements such as the SupplierManagement Manual and the Notice of HonestCooperation on the portal to guide the suppliersto learn and implement relevant requirements.Through the SRM system, the Company contin-uously strengthened its communications withits suppliers, standardized its cooperation, andincreased the e?ciency and transparency of thesupply chain management.
Continuous improvement of the supply chain digitalization system
SRM System
In 2024, the Company optimized its management system for the suppliers of the recycled materials, improved thefull lifecycle management, and clari?ed the exit mechanism. We built a ?xed audit team for on-site audit, clari?ed thequali?cation level of all suppliers of the recycled materials, initiated recti?cation for 42 underperforming suppliers, andgradually started to eliminate the suppliers with poor on-site management. This improved the purchase managementand supplier performance, ensured the stability of the supply chain, and promoted sustainable development.
Management optimization for the suppliers of recycled materials
The Company works closely with the suppliers to jointly remain committed sustainable development goals and create sustainablevalue. During the reporting period, the Company issued the Sustainable Procurement Policy. In terms of environmental protection,we prioritized environmentally friendly suppliers, focused on the environmental protection of raw materials and equipment, andclari?ed waste management requirements. Regarding the labor workers' human rights, priority was given to the suppliers who hadpassed relevant certi?cation. Human rights were prohibited from infringement to protect the employees' rights and interests. Interms of business ethics, we advocated that both parties should maintain integrity, conclude fair transactions and respect mutualintellectual property.The Company constantly promotes the continuous improvement of the ESG management in the supply chain through the closed-loop management of "training - evaluation - improvement":
Strengthen communication and col-laboration on the annual supplier con-ference, special capacity training andsupply chain support plan. Our SRMsystematically carries out training onthe sustainability concept, includingCSR management, EHS, diversifiedconstruction and requirements, wastemanagement, sustainable water man-agement, and other topics.
Systematically perform sus-tainability risk assessment andaudit environmental and socialresponsibilities.
Establish a hierarchical man-agement system based onsupplier ESG portraits, drafttargeted improvement plansand incorporate them intothe supplier performance ap-praisal.
Normalized trainingSystematic assessmentTargeted improvements
Sustainable Procurement
During the reporting period, the Company revised the Evaluation and Application Proceduresfor Supplier Classi?cation Management. In combination with the principles for evaluating theimportance of material categories and supplier dependency, we classi?ed the suppliers of var-ious materials, and carried out di?erentiated management for four types of suppliers, namelystrategic suppliers, key collaborative suppliers, collaborative suppliers, and general suppliers.Classi?edmanagement
Formulate supplier introduction rules to standardize the selection and management processfor the new suppliers. Establish differentiated supplier introduction standards based on theneeds for category management, to strictly control supply risks, evaluate upstream supply ca-pabilities, and accommodate the needs for resource reserve and optimization.The Purchasing Department conducts pre-quali?cation review for all potential suppliers. Theraw material suppliers shall at least pass ISO 9001 certification, and attention is paid to thesuppliers certi?ed by ISO 14001, ISO 45001 and other relevant systems. Conduct on-site auditswhen necessary. Comprehensively evaluate the suppliers' operation status, production capaci-ty and management, to improve their overall quali?cation.Onboardingmanagement
Formulate the Supplier Audit Management Regulations and conduct routine audits for keysuppliers according to the audit plan. Evaluate whether the suppliers' management systemsremain e?ective and are continuously improved. Audit problematic suppliers to evaluate thee?ectiveness of the suppliers' problem improvements, in order to eliminate the suppliers withsupply risks in a timely manner.Auditmanagement
Closely track the political, military, economic, climatic and other trends in di?erent regions ofthe world. Identify the risk factors and draw up risk plans in advance. Adjust procurement andinventory strategies in a timely manner, including increasing raw material reserves, locking rawmaterial orders in advance, and making early preparations for raw material substitution. Elim-inate potential adverse e?ects of risks. Establish an early warning mechanism for high-risk rawmaterials, and keep informative about the supply chain by continuously tracking the produc-tion status of upstream suppliers and signing four major agreements with the suppliers, includ-ing supply agreements, quality assurance agreements, environmental protection agreements,and technical agreements.RiskManagement
Supplier conferences, technical exchanges, daily business exchanges, quality exchanges, plat-form interactions, etc.
Collaborativemanagement
Formulate the Supplier Performance Management Regulations and continuously pay attentionto the suppliers' performance in delivery, quality and services, Output the overall performanceresults of the raw material suppliers on a quarterly basis and put them into practice. Providethe suppliers with corresponding incentives, rewards and punishments for the suppliers withdi?erent performance levels (A-D). Improve the e?ciency of the supply chain, and realize thedi?erentiated demonstration of supplier value.Performancemanagement
Supplier Management System
8788
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Compared with 2022, achieve a 30% reduction in carbonemissions related to procurement activities by 2030.
In 2024, the Company's carbon emissions relatedto procurement activities were reduced by 5%.From 2022 to 2030, ensure that the coverage of the an-nual sustainable procurement training of purchasingspecialists reaches 100%.
In 2024, the coverage of sustainable procurementtraining by the purchasing specialists was up to100%.From 2022 to 2030, ensure that the suppliers comply withlabor laws and regulations, and annually, 100% suppliersare quali?ed in protecting the rights and interests of la-borers.
In 2024, 100% of the raw material suppliers werequali?ed in protecting the laborers' rights and in-terests.From 2022 to 2030, the Company ensures that 100% ofkey raw materials will be from the suppliers with envi-ronmental management system certi?cation (ISO 14001).
In 2024, 72% of the Company's stable suppliersof brand new raw materials were certified by ISO14001.
From 2022 to 2030, ensure that the supplier code of con-duct will be 100% signed every year.
In 2024, the SRM portal was built. The suppliercode of conduct was published and announced inthe SRM portal. At present, all our suppliers haveSRM system accounts, and they need to log in tothe system for daily purchase quotation, informa-tion receipt and interaction.Compared with 2022, the on-site audit coverage of coresuppliers will increase to 90% by 2030.
In 2024, the on-site audit coverage of the Compa-ny's core suppliers was 80%.The Company has established a contractor safety management mechanism that focuses on "who is in charge and who is responsi-ble". We ensure that the safety risks of contractors' operations are controllable by controlling the whole process of "review - noti?-cation - supervision - accountability".
During the reporting periodthe Company conducted
ESG training sessions forcovering100%of the suppliers, and there wereno suppliers with actual or po-tential significant negative envi-ronmental or social impacts.
2024 Supplier Conference on "Deepening Cooperation, Optimizing the Platform and Pro-
moting Global Development", Conveying the Sustainability ConceptContractor Management
Indicators and Targets
Examine the contractors' safety quali?cations, partic-ularly evaluating their legality, adaptability, reliabil-ity, technical and safety guarantee capabilities. Theexamination results are reported to the O?ce of theWork Safety Leading Group for archiving.Identify responsibilities of and punish the contractorswho violate safety regulations and cause accidentsaccording to the Company's accident investigationprocedures.
Clarify the safety responsibility boundaries throughthe Contractor's Internal Operating Safety Instruc-tions and the Contractor's Safety, EnvironmentalProtection and Occupational Health ManagementAgreement.All personnel of the contractor shall undergo safetyeducation and training before their entry. The Com-pany dispatches safety management personnel tosupervise the daily on-site safety inspections.
Examination
Accountability
Noti?cation
Supervision
Sustainable procurement objectivesProgress of the objectivesDimensions for Auditing the Suppliers' Environmental
and Social ResponsibilitiesChild labor and minorWorking hours and salariesManagement of toxic, ?ammable
and explosive products
Management of occu-pational diseasesAnti-discriminationMorality and integrityFreedom of associationSafetyLodging sanitationForced laborFree choice of employmentEnvironmental
managementInformation securityIntellectual propertyEnergy conservation and emis-
sion reduction
Resource utilization
Notes: Stable suppliers of new raw materials refer to suppliers with a (valid) source list which provide brand new raw materials, and are manufacturers.
the suppliers
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
8990
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
To promote joint construction and win-win in the industry, we actively participate in exchanges, exhibitions and other activities related tomaterials and sustainable development, and realize the coordinated development, mutual bene?t and win-win of the industry through in-tuitive and high-quality exchanges.
Support for Industry Development
As a leading enterprise within the industry, the Company always ?rmly believes in the positive value of cooperation and sharing for sustain-able development of itself, the industry, and the society during innovations. To facilitate the industry win-win, we cooperate with our do-mestic and overseas associates, upstream and downstream enterprises to exchange and learn about new opportunities and achievementsin the development of the industry. We actively undertake the responsibilities of industry associations, promote the formulation of industrystandards, carry out in-depth exchanges and scienti?c research project cooperation with universities, and guide the future developmenttrend of the industry with technological innovations.
In October 2024, the Company participated in the VDA
Round Table.
Shanghai Kingfa won APTIV Outstanding
Contribution Award.
The Company won Dongfeng Nissan's "Best PartnerAward of the Supply Chain of the Year".Kingfa Biomaterials won the "Emerging Star Award"at the Innovative 3D Strategic Supplier Conference.The Company was evaluated by L'Oréal as "StrategicPackaging Partner".
In October 2024, the Company participated in the world's leading engineering polyole?nforum - SPE TPO Global Automotive Conference, focusing on the application of polyole-fins in the fields of automobiles and ground mobility. Our industry manager releaseda thematic report on the "the application of high-performance transparent polyolefinmaterials in luminous automotive bumpers", showcasing the Company's innovativeachievements in the R&D of lightweight materials, and contributing to the application ofpolyole?ns in the ?eld of automobiles.
Attended the SPE TPO Global Automotive Conference to Share Experience in theField of Lightweight Automobiles
Participated in the SPE TPO Global Automo-
tive Conference
The Company was invited by Guangzhou Representative Office of Macao Trade andInvestment Promotion Institute to participate in the opening ceremony of the "2024 Ma-cao International Environmental Cooperation Forum and Exhibition". Representatives ofthe Company's ESG working group and participants from di?erent industries shared anddiscussed environmental concerns such as ESG and sustainability. By participating inthis event, we strengthened the expansion of exchanges and cooperation among Guang-dong, Hong Kong, Macao and the world in government, industry, academia, researchand application, and jointly promoted the diversi?cation of circular economy and greensustainable development.
Representatives of the Company's ESG Working Group Actively Participated in theGlobal Sustainability Forum and Exchange
Participated in the forum and exchange
Since its establishment, the Company has actively participated in establishing industry standards for polymers, modi?ed plastics, recycledplastics, bio-based materials, etc., and discussed with associations. Taking the national deployment for the long-term development of stra-tegic emerging industries as our own mission, we actively participated in and undertook the national key program to contribute to industrydevelopment and industrial upgrading.
In September 2024, Liaoning Kingfa, as a member of the NationalAcrylonitrile Industry Association, attended the annual meeting toexchange and discuss the industry production issues.
In October 2024, the Company held "Project of Guangzhou - a Capital of In-ternational Academic Conferences - Key Technology Innovation Salon of NewComposite Materials for Batteries" to discuss cutting-edge technologies.
Joint industry advancement
Deep Industry Engagement
Industry events
Awards
Kingfa (USA) participated one of the world's most in-?uential SPE Automotive Innovation Awards Program,and entered the Finalist round of the transparent
bumper innovation program.
The Chairman led a team to participate in the technologyexhibition at the head o?ce of Toyota in Japan.
In July 2024, the Company was invited to attend the 3
rdInternational Green Zero CarbonFestival and 2024 ESG Leaders Summit. The general manager of the sustainable devel-opment product line, delivered a keynote speech on "Deepening the Green TechnologyInnovation and Promoting the Development of new quality productive forces". Startingfrom the innovation of the industrial chain, he introduced the Company's practical pathof constructing an entire green low-carbon industrial chain system and innovating themodel of circular economy by "making the best use of the plastics". During the meeting,the Company deeply participated in industry dialogues and shared its experience andachievements in green development in the plastic chemical industry. It not only demon-strated the Company's green development concept, but also built consensus on the greentransformation of the plastics industry and promoted the industry to join hands towardsthe carbon neutrality goals.
Participated in the 3
rdInternational Green Zero Carbon Festival and 2024 ESGLeaders Summit to Promote the Green Transformation of the Plastics Industry
Delivered a keynote speech
9192
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company played important roles in several technology standardization committees, including National Technical Standardiza-tion Committee on Plastics, ISO/TC61/SC9/WG27 and ISO/TC330. As of the end of the reporting period, the Company took the leadin and participated in the drafting and publication of 12 international standards, and presided over/participated in the formulationand revision of more than 200 national, industry, local and group standards.Standard NumberStandard
Standardstatus
ISO 15373:2024Plastics - Polymer dispersions - Determination of free formaldehydeReleasedGB/T 44535-2024Plastics - Determination of linear dimensions of test specimensReleasedGB/T 44303-2024Plastics - Quantitative evaluation of scratch damage and scratch visibilityReleasedGB/T 44559.1-2024
Plastics - Determination of puncture impact behaviour of rigid plastics - Part 1: Non-in-strumented impact testing
ReleasedGB/T 33596
Electrical installations in ships - Insulating and sheathing materials for shipboard ando?shore units, power, control, instrumentation and telecommunication cables
Solicitation of
commentsISO 15373:2024Plastics - Polymer dispersions - Determination of free formaldehydeReleasedGB/T 1632.1-2024
Plastics - Determination of the viscosity of polymers in dilute solution using capillary vis-cometers - Part 1:General principles
ReleasedGB/T 2035-2024Plastics - VocabularyReleasedGB/T 5169.12-2024
Fire hazard testing for electric and electronic products - Part 12: Glowing/hot-wire basedtest methods - Glow-wire ?ammability index (GWFI) test method for materials
ReleasedGB/T 5169.13-2024
Fire hazard testing for electric and electronic products - Part 13:Glowing/hot-wire basedtest methods - Glowing-wire ignition temperature (GWIT) test method for materials
ReleasedGB/T 5169.23-2024
Fire hazard testing for electric and electronic products - Part 23:Test ?ames - 500W verti-cal ?ame test method for tubular polymeric materials
Released
GB/Z 5169.48-2024
Fire hazard testing for electric and electronic products - Part 48: Glowing/hot-wire basedtest methods - Hot wire coil test method - Apparatus, veri?cation, test method and guid-ance
ReleasedGB/T 29284-2024Polylactic acidReleasedGB/T 40006.11-2024Plastics - Recycled plastics - Part 11: Polyvinyl chloride (PVC) materialsReleasedGB/T 44443-2024Green product assessment - ComputersReleasedGB/T 44447-2024Green product assessment - Printers and multifunction devicesReleasedGB/T 45090-2024Plastics - Labelling and marking of recycled plasticsReleasedGB/T 1632.1-2024
Plastics - Determination of the viscosity of polymers in dilute solution using capillary vis-cometers - Part 1:General principles
Released
Diversi?ed CooperationGuided by the needs for industrial development, the Company actively establishes strategic cooperation with enterprises and insti-tutions of higher learning to promote deep integration of industry, academia, and research.
In 2024, the Company established a joint laboratory with 7 leading companies of automobile, home appliances, elec-tronics, electrical, new energy and other industries, developing joint development projects based on industry devel-opment trends, including intelligent driving, lightweight, replacement steel with plastics, and electrical performancetests, which e?ectively promoted material innovation and R&D.
In 2024, the Company leveraged its upstream resource advantages and downstream processing expertise to expandits business areas, accelerated the construction of a plastic recycling industry ecosystem, and strengthened full-chainsynergy capabilities through strategic cooperation.
Joint laboratory for joining forces to promote material innovations
Expanding the Business Layout and Practicing Green Development
Cooperation on the Joint Laboratory
the Company entered into a contract with a representative industry of the renewable resourcesindustry to cooperate on the laboratory construction, material production and sales, and utili-zation of household appliance dismantling materials to achieve resource sharing and comple-mentary advantages.the Company joined hands with China Renewable Resources Group, explored the establish-ment of a joint venture based on the green concept, jointly set up a sorting center, and built a"uni?ed purchase and marketing" cooperation model.
In July
InDecember
9394
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
In 2024, the Company continuously promoted industry-academia-research cooperation, facilitated deep integrationof industry and education, cultivated and reserved professional talents for enterprises, drove scienti?c research inno-vation, accelerated the transformation of results, and supported the sustainable development of the industry.
Multiple institutions of higher learning cooperated to cultivate talents andpromote innovation
Equality, Inclusion and Diversity
We uphold being people-oriented, fair, open, and impartial, giving priority to morality and attaching equal importance to capa-bilities and good virtues. We are committed to creating a diverse, equal and inclusive work environment to promote innovation,enhance teamwork, and ensure that all members give full play to their potential.During the reporting period, the Company continuously improved the management systems related to recruitment, personnel andlabor management, revised and newly compiled 10 management systems including the Recruitment Management Regulations,Personnel Management Regulations and Internal Recommendation Management Regulations, and promulgated the Labor andHuman Rights Policies to clarify its speci?c action guidelines and objectives in all aspects of employee rights and human rightsprotection, and ensure the smooth achievement of the objectives.The Company strictly complies with the Universal Declaration of Human Rights, ILO Core Conventions, Social Accountability (SA8000), other local laws and regulations, international labor conventions and initiatives. We carry out a number of actions to ensureequality, tolerance and diversity in the employee management.
Equality, Inclusion and Diversity
During the reporting periodthe Company had a total of
13,083employees
disabled employees werecumulatively recruitedretired soldiers were cumulativelyemployed
and4%
The labor contractswere concluded withall employees
All employees returned towork after their parentalleave
Shanghai Kingfa carried out industry-academia-research cooperation with several institutions ofhigher learning: It negotiated with Fudan University to jointly build a "Road to a Strong Country"ideological and political course teaching practice base, exchanged views on industry-academia-re-search cooperation and joint laboratory construction, and reached intentions to deepen coopera-tion. It negotiated about joint doctoral training with Donghua University and carried out technicalexchanges on non-woven products. It discussed with the University of Shanghai for Science andTechnology on the cultivation of innovative engineering talents, carried out technical exchangeswith Zhejiang University, and built an o?-campus practice base with Shanghai University.Shanghai
Kingfa
Kingfa Carbon Fiber joined hands with nine organizations, including Sichuan University, to partici-pate in the joint declaration of the national key R&D program.KingfaCarbonFiber
Wuhan Kingfa successively cooperated with Jianghan University to develop key technologies forhigh-performance protective safety polymers for new energy batteries, studied the technology forpreparing high-performance polyole?n composites for new energy battery packs with South-Cen-tral Minzu University, and cooperated with Hubei University and Wuhan University of Technology tobuild an internship base.
WuhanKingfa
Ningbo Kingfa was approved to establish a national postdoctoral research workstation.NingboKingfa
Kingfa Biomaterials and South China University of Technology jointly built Guangdong Provincial
Postdoctoral Innovation Practice Base.KingfaBiomate-rials
Fight against discrimination
and harassment
Forced labor
Child labor andminor workers
Labor protection for female employees
We have formulated the Anti-Discrimination and Anti-Ha-rassment Management Regulations, following the principlesof fairness, justice, and transparency in all aspects to ensureequal employment opportunities.We have been carrying out publicity and education activitiesto prevent and stop harassment, posting the rules and regula-tions in conspicuous places such as bulletin boards.The employees can ?le complaints through suggestion boxes,dedicated mailboxes, etc. When discovering discriminationand harassment, we will collect evidences, and build a teamfor investigation. After con?rmation, punish the relevant per-sonnel, appease the victims, arrange paid sick leave, and worknormally after recovery.
Having formulated the Management Regulations on the Pro-hibition of Forced Labor, we prohibit coercive or deceptivemeans, and protect the employees' rights to rest, vacation andtermination of labor relationships during the term of the con-tract. The Company does not restrict these rights in violationof laws.Promote the protection of human rights and anti-forced laborconcepts to the suppliers, contractors and other partners.The new employee orientation training notices may be giventhrough the suggestion box, email, reporting hotline, and OAsystem.Once forced labor is discovered, the HR Department will com-municate with the trade union in time for appeasement andremedy.
Having formulated the Management Regulations for Child La-bor and Minor Workers, we don't accept suppliers or partnerswhich employ child labor or minor workers.We implement stringent age verification procedures for re-cruitment, require the provision of identity documents, ques-tion about educational backgrounds and age in interviews,and perform background checks if necessary.Once it is found that child labor is recruited by mistake, thechildren will not be dismissed immediately. Instead, we willtake remedial actions, report to a labor bureau, and arrangemedical examination. Provide treatment for the child laborwith illness. After soliciting opinions, the Company shall bearthe expenses, require the guardian to sign for acknowledgingthem, provide ?nancial assistance, and keep records.
Having formulated the Regulations on Labor Protectionand Management of Female Employees, we have created adiverse, inclusive culture, attached importance to the rightsand interests of female employees, and emphasized equalitybetween men and women and equal pay for equal work.We gradually improve our sanitary conditions, regularly orga-nize professional organizations to assist with health care, setup relevant facilities in collective dormitories, and regularlyorganize physical and gynecological examinations.We buy the maternity insurance for our female employeesaccording to regulations; reimburse their security and livingexpenses during their pregnancy; o?er them insurance ben-efits during their childbirth (abortion); provide them withbreastfeeding leave and living expenses after maternity leave,build a committee for safeguarding the female employees'rights and interests.
Women accounted for12%of the Company's middlemanagement
of the senior management
9596
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Talent Attraction and RetentionThe Company is committed to safeguarding the legitimate rights and interests of the employees, building a diverse and inclusivecorporate atmosphere, and e?ectively implementing various welfare and care measures to increase all employees' sense of happi-ness and belonging, and ensure that the employees may feel warmth and respect in the Company.
As of the end of the reporting period a total of
people participated in
and
were evaluated as
Among them,
professional engineers
The Company was awarded thetitle of "2024 Best Employer" by
Intern Monk.
Ho
no
rs
of
the
employer
br
a
nds
Democratic Communication
Remuneration and Performance
The Company has established a systematic communication management system, and created a multi-dimensional communica-tion channel for "daily communication - appeal management - democratic participation" around the concept of "following proce-dures, respecting hierarchy and facilitating sincere interactions". The Company has built an employee appeal management plat-form and constructed a rapid response mechanism to ensure that employees' reasonable suggestions are processed in time, andthe employee participation and satisfaction were e?ectively improved. Through institutionalized platforms such as trade unionmembers' and workers' congresses, the Collective Contract has been concluded with employee representatives, which has im-proved the democratic management mechanism and e?ectively guaranteed the employees' rights to know, participate, express,and supervise. We conduct employee satisfaction surveys at least once a year to extensively collect the employees' opinions andsuggestions on working conditions, salaries, bene?ts, career development, etc.
Adhering to the philosophy of being "value creator-oriented", the Company has established a comprehensive remuneration andperformance management system, adopted a salary structure that combined basic salary with ?oating salary, and made regularadjustments based on market level and employee performance to ensure the internal fairness and external competitiveness ofthe remuneration system. In terms of performance management, we implement the "cake theory" and the job target responsibil-ity system, decomposed our strategic objectives for di?erent positions step by step, and guided the employees to focus on valuecreation through scienti?c assessment and incentive mechanism, in order to promote the e?cient achievement of organizationalobjectives.During the reporting period, the Company continuously improved the management system related to the performance remuner-ation, revised the Performance Management Regulations, Management Regulations on Performance Appraisal of Senior Manage-ment and Internal Operations and other systems, and established a performance management cycle system. If an employee raisesany objections to the performance appraisal results, the employee shall communicate with the performance appraisal superior?rst, and no agreement can be reached, an appeal may be made the HR Department. After receiving the appeal, the relevant de-partments will conduct investigation and evidence collection. If the appeal succeeds, the performance responsibility of the superi-or will be traced and assessed to ensure the fairness of the performance appraisal, the rights and interests of the employees.Diverse communication channels
During the reporting period
the Company conducted an employee en-gagement survey, and collected a total of5,493valid questionnaires
covering multiple business sectors and em-ployee categories, with an engagement of
82.47%
and an increase of
5.4%
The Trade Union and Employee Congresses Was Held, and the DemocraticCommunication Jointly Promoted Enterprise Development
Communica-tion channels
Grassroots shift meetings, weekly, semi-annual and an-nual meetings
Questionnaire
Online forum
In December 2024, the Company held the third memberrepresentative conference of the eighth Trade Union andthe second Employee Congress of the eighth Trade Union.Our leaders and more than 120 member (employee) repre-sentatives gathered together. All employee representativesvoted with a show of hands and unanimously approved the"Kingfa Technology Collective Wage Contract" to fully exer-cise their rights and protect their own interests. Meanwhile,the representatives actively participated in discussions,provided suggestions for the Company's development, andfully communicated in the Trade Union's general elections,work reports and other aspects. This meeting built a bridgeof communication between the Company and the employ-ees' democratic communications, enhanced the employ-ees' sense of belonging and responsibility, and enhancedthe Company's cohesion.
Collective Contract Review
the evaluation of professional andtechnical quali?cations
were rated as intermediate engineers
senior engineers (experts), all ofwhom enjoyed housing bene?ts
compared with last year
9798
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company has implemented the employee stock ownership plan since 2016, drawn up the 2022 Restricted StockIncentive Plan (Draft) in 2022, and continued to promote the incentive plan during the reporting period. In August 2024,the Company repurchased the restricted stocks held by 1,685 incentive objects and completed the cancellation.In November 2024, we reviewed and approved the Proposal on the Implementation of Equity Incentives for Whol-ly-owned Subsidiaries and the Company's Waiver of Preemptive Subscription Rights and Related Transactions madeby Zhuhai Vanteque Specialty Engineering Plastics. Zhuhai Vanteque Specialty Engineering Plastics granted equityincentives to the Group's core employees through capital increase and share expansion, which involved the Compa-ny's senior management, key technologies collaborating with the business of Zhuhai Vanteque Specialty EngineeringPlastics, marketing personnel, core managerial personnel of Zhuhai Vanteque Specialty Engineering Plastics, and coremarketing personnel. 5 limited partnerships were established as the employee shareholding platforms.The establishment and implementation of the personalized incentive mechanism and a series of supporting measureshave attracted numerous outstanding talents, stimulated their passion and aspiration for the Company's development,and injected everlasting vitality into the Company's development.
Equity Incentive Plan
Employee Welfare
Being always professional and meticulousin the construction of an employee welfaresystem, we are committed to providing all-round and multi-level welfare guarantee forour employees. During the reporting period,the Company revised the Welfare ManagementRegulations, Employee Retirement Manage-ment Regulations, and other systems to furtherimprove the employee welfare management.
Kingfa homeland
Consolidate the foun-dation of the "home"
Re?ect the warmthof the "home"
Cohere the strengthof the "home"Party-mass Integrated Service Center
3,000m
Activity Venue
Welfare and Care System
Diverse Intensive Services10 Interest Associations
Construction of "Kingfa Homeland Culture"
As the starting point of the cycle, the appraiser and the appraisee need to fully com-municate and reach an agreement on the goals of a certain cycle in the future. Thegoals of employees at different levels are presented in different forms. They shallbe consistent with the overall goals of the Company and dynamically adjusted withthem. The goal setting shall comply with the SMART principle. After determination,the immediate supervisor will guide the employees to draft a work plan and breakdown the goals into speci?c tasks.Performance interviews are divided intoperformance planning interviews, per-formance counseling interviews and per-formance appraisal summary interviews.The performance planning interviewsguide the employee behaviors. The per-formance counseling interviews are con-ducted regularly according to work nodesor progress to improve the subordinates'enthusiasm. The performance appraisalsummary interviews are conducted duringthe appraisal cycle or after the completionof the work for comprehensive review andevaluation, laying a foundation for thenext period of performance management.The assessment results are linked to employees' performancebonuses, salary adjustments, position adjustments, training,development, bene?ts etc. For the employees who fail to meetthe annual performance standards, the performance improve-ment plan shall be initiated, and those who fail to meet thestandards after the improvement period expires will be trans-ferred or dismissed.
The superiors help the subordinates achieve their performancegoals through daily counseling and mid-term review. The dailycounseling is carried out for the problems in any form duringthe implementation of performance plan. The mid-term reviewis to formally review, diagnose and counsel the subordinatesat a speci?c time. The superiors shall record important perfor-mance facts.
The superiors shall use scienti?c methodsto evaluate the subordinates' work againstgoals and standards, and set the appraisalmethods by positions and levels. The Com-pany's senior management is assessedaccording to the target responsibility cer-tificate. For the non-frontline employeesengaged in the internal operation, monthlysummary and scoring, quarterly + annualassessments are performed. For the front-line employees, the assessment plansshall be drafted by positions, and the per-formance evaluation rules are explainedunder special circumstances.
Performance plan
| 4 | 3 |
Performance interview
Application of performance resultsPerformance communication and counseling
Performance appraisaland feedback
PerformanceManagementCycle
99100
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
During the reporting periodthe Company cumulatively issuedbene?ts of RMB
85.4925
million
During the reporting period, the Company built new gyms, swimmingpools and golf rooms for the employees to do sports.The Company has long been committed to optimizing the employees' spiritual and cultural life. Upholding popular, small-scaleand routine activities, we make innovations of our recreational and sports activities in form and substance according to local con-ditions. During the reporting period, we organized more than 228 activities to enrich our employees' amateur life, increase ouremployees' enthusiasm for work, and cohere the team spirit.
In March 2024, the Company organized a range of "March 8 Women's Day" activities, which re?ected the Company'scare for the female employees and helped the female employees achieve continuous growth and shine in their lifeand work.
In December 2024, in order to celebrate the 31
st
anniversaryof its establishment, the Company carried out a hiking event,where four routes with a distance of 5km, 10km, 20km, and31km were set up, representing different challenges and dif-ficulties, especially symbolizing the Company's major timenodes. A total of more than 200 employees completed thishiking, which fully demonstrated the spirit of the Company'semployees who were full of vitality, perseverance, unity andcohesion, and further gathered the Company's strength.
March 8 Festival Activities for Supporting the Female Employees' Growth andDevelopment
The 31
stAnniversary Hiking Event, Cohering the Blonde Spirit
Employee activities
We carried out the sharing of National Clothing Culture andSocial Tasting to help the female employees enrich their cul-tural knowledge and improve their self-cultivation.We performed the training program named Parent-child Emo-tional and Psychological Nourishment to help the employeeshandle parent-child relationships and improve themselves.We organized our female employees and their family mem-bers to watch the movie known as YOLO together to draw on"her strengths".
Paying attention to the female employees' rights andinterests, the Company has formulated the Regula-tions on Labor Protection and Management of Fe-male Employees. We have set up nursery rooms andgreen channels for the pregnant women to dine, andimplemented other measures to care for the femaleemployees.
Rights and interests of the female employees
The Company provides the employees with freeshopping buses, shuttle buses for commuting, andwelfare vehicles.
Convenient transportation
The Company provides overseas subsidies, overseasforeign language subsidies, family visit holidays, over-seas insurances and other benefits for the overseasemployees.
Dispatch bene?ts
The Company has set up an infirmary to providebasic health diagnosis, treatment and psychologicalconsultation services for the employees, and annu-ally arranges free physical examinations for the em-ployees.
Medical health
The Company provides the employees with can-teen dining services and multi-room dormitories asbene?ts, equipped with comprehensive land-basedfacilities and diversi?ed cultural and entertainmentvenues.
Supporting living and recreation facilities
We attach great importance to the lives and familiesof our employees in need. We have set up a specialfund to support the employees in need, and applyfor support fund for our employees who can hardlyobtain loans or su?er from critical diseases or whosefamilies face di?culties in applying for loans.
Support for di?culties
The Company provides birthday gifts for the em-ployees, annually sends consolation money orcondolences for the Spring Festival, Mid-AutumnFestival and anniversary celebrations, and organiz-es abundant recreational activities during holidays.
Holiday bene?ts
Employee Welfare and Care System
The Company buys the "endowment insurance,medical insurance, maternity insurance, unemploy-ment insurance, work-related injury insurance andhousing provident fund" for all employees.
Five social insurances and one housing fund
The Company provides the employees with variousbene?ts and subsidies, including annual and quarter-ly bene?ts, tra?c subsidies and seniority subsidies.
Bene?ts and subsidies
The Company provides the employees with paidtraining, learning and improvement subsidies.
Improvement of academicquali?cation and training
The Company implements a ?ve-day working week,and the employees are entitled to maternity leave,marriage leave, funeral leave, annual leave and otherholidays according to law.
Holiday care
The Company encourages the employees to bringtheir children and other immediate family membersto live with them, provides services for the custody,schooling, pickup and dropo?, introduces kindergar-tens and sets up free school bus lines.
Family care
Hiking Event
Thematic activity for the Women's Day
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.
101102
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Employee Training and DevelopmentThe Company has continuously optimized its talent development system, created a multi-dimensional career development chan-nel for the employees, built a competency model for the talents, established a systematic training management system, improvedthe construction of teacher pool and curriculum development, constantly enriched internal training resources, effectively im-proved the employees' professional and job competencies, and provided solid talent support for the Company's development.
The Company has established a fair, transparent internal promotion mechanism, clarified the development path, promotionstandards and ability requirements of the channels, provided the employees with clear career development directions and expec-tations, and encouraged the employees to obtain promotion opportunities through hard work and outstanding performance, inorder to achieve personal career growth.Around the "1438" strategic goal for 2030 and based on the needs of the business units, the Company has integrated the talentstrategies from the perspective of marketing, technologies, domestic and overseas operations. We have set the employee devel-opment vision of "attracting global outstanding talents, activating individuals, improving organizational capabilities, becoming aworld-renowned employer brand, and guaranteeing our realization of the "1438" strategic goal by providing a high-quality talentsupply chain". The Company is committed to ful?lling the core tasks for increasing its talent adequacy ratio, organizational e?cien-cy and organizational ?t, to guarantee the talents' career development.
Regarding talent training as an important part of its sustainability strategy, the Company created a stepwise training structurethrough the "TOP Plan - Eagle Series -Creation Series - Sword Series - Shield Series", covering core areas such as leadership devel-opment, technological tackling, and market development. We implemented the "Young Eagle Plan", "Integration Series" specialtraining for the new generation and foreign employees respectively to strengthen the global adaptability of the talent pool. Duringthe reporting period, the Company optimized seven training systems, focusing on improving the compliance management sys-tems such as the Management Regulations for Labor Ethics Training, formulated employee training and assessment indicators,and realized the dual-track linkage between the training evaluation and the performance appraisal. It not only protected theemployee rights and interests in development, but also formed a talent supply chain at the strategic level, supported cultural inte-gration and production technology needs in overseas operations, and provided long-term development momentum for businessdevelopment.
Adhering to the employment principle of "attachingequal importance to integrity and talent and employingone's talent to the fullest extent", the Company has con-structed a "management + professional" dual-channelpromotion system and job rotation mechanism to createa multi-dimensional career growth path for the employ-ees. Based on the quality model and job qualificationrequirements, we have established differentiated andreasonable career promotion standards to drive talentsand corporate strategies for symbiosis and joint growth.
During the reporting period
As of the end of the reporting period
During the reporting period
the Company created
series of job training
a total of
13,083employees
Each employee received training of
44.6
hours on averageand the employees' total training hours were583,501.8hours
compiled learning maps for
development channels
and produced1,180courses
The Company has built "Kingfa e-En-terprise Learning" platform. Throughthe organic collaboration of the digitallearning ecosystem and a series of proj-ects such as "TOP/Eagle/Creation", wehave created a sustainability cultivationsystem covering the entire employeelifecycle, empowering the symbiosis andjoint growth of the talent value and orga-nizational strategy.
Kingfa e-Enterprise Learning
Organization of Employee TrainingEmployees' Career Development
Level of talent competencyPersonal empowermentInternal empowermentWorldwide development
Core competencies
Top leadership
Middle leadership
Bottom leadership
Customers ?rst;striving spirit
Strategic thinkingResolute decision-making
Strategic integrationOperational awareness
Professional in?uence
Collaboration andcooperation; e?-cient operations
Inspire othersShape organizationalcapabilitiesLead transformation
Empower the teamsManage target plansDrive execution
Team managementProblem analysis andsolving
Continuous innova-tions; loyalty to theorganization
Customers' foremoststriving spirit
Strive for excellence
Intrinsic motivationResilient growthEQ
Talent Competency Model
the Company annually provided the employees with mil-lions for the employees to improve their academic educa-tion and ?nancial subsidies for further study in the insti-tutions of higher learning, to encourage the employees toconstantly improve their professional knowledge.
were trained by the Company
103104
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company has established an internal lecturer training system to e?ectively accumulate and inherit organizational wisdomthrough systematic learning and a certi?cation mechanism for lenient entry and strict exit. As of the end of the reporting period,148 employees of the Company passed the junior instructor certi?cation and 49 employees passed the intermediate instructor cer-ti?cation, providing endogenous motivation for the construction of a sustainability talent system.
Employee Training
In 2024, the Company launched a one-year reserved mid-dle management training program. In December, traineesfrom all over the country participated in the ?nal training.A professor of Shanghai Jiao Tong University shared thecourse titled Operations Management to help studentsachieve efficient operations under a changing businessenvironment. The next day, the students participated inthe knowledge and skills assessment. All of them passedthe written examinations, and 19 students achieved excel-lent results. At the end of the training camp, internationalbusiness etiquette courses were opened to pave the wayfor the Company's global development. This trainingcamp effectively improved the trainees' knowledge andabilities and reserved outstanding middle-level talents forthe Company.
In 2024, the Company performed a half-year training program for the fresh graduates to facilitate the newcomers' rapid in-tegration and growth. At the beginning of the project, the newcomers were received by the Company to let fresh graduatesfeel warmth. Subsequently, team building was carried out to hone their will and enhance their teamwork skills. The culturaledi?cation session was arranged to help them understand the Company's values and culture. During the grassroots train-ing, the fresh graduates went deep into the front line to accumulate practical experience. The project research procured thefresh graduates to use what they had learned to analyze and solve problems. In the post-based teaching, the tutors o?eredguidance to improve professional skills. This project e?ectively cultivated the fresh graduates' abilities and injected youngblood into the Company.
Seminar "Combined Training and Combat: Case Study
on Operations Management of Kingfa (Europe)"
To deepen the implementation of the globalization strategy, the Company launched the "Integration Series" cross-culturalempowerment project, initiated the overseas training camps for operation backbones and marketing elites respectively,opened core courses such as Kingfa Globalization Strategy and Overseas Business Layout and Cross-cultural CollaborationMechanism around three dimensions, namely strategic synergy, cultural integration, and management e?ciency improve-ment, and organized ?eld studies and corporate culture competitions in the manufacturing bases to strengthen overseasteams' deep recognition of corporate vision and strategies. The training covered the foreign employees from 10 countries,improved cross-cultural communication skills, localized management awareness, and provided governance efficiencysupport for building a multicultural inclusive sustainable talent supply chain.
Overseas Employee Training for Improving Marketing Elite Culturesand Business Capabilities in 10 Countries in April 2024
Foreign Operation Employees' Visit to Qingyuan Factory
for Study in November 2024
Reserved middle management training program for enhancing leadership
Overseas "Integration Series"
Fresh graduate training program for supporting the newcomers' growth
Newcomer reception
Topic research
Post-based teaching
Grassroots training
Competition for and ?xed posts
Team buildingCultural edi?cation
Training Program for Fresh Graduates
105106
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Occupational Health and Safety
The overall occupational health and safety work of the Company is controlled by the Group, led by the Work Safety Committee ofthe Group in a coordinated manner. The work safety committees of the subsidiaries perform territorial management in accordancewith the national laws and regulations, technical safety standards and our management system standards. We have established asafety management network at four levels, namely "Group-subsidiary-department-team". Improve the safety literacy and skills ofall employees by improving the safety management system, sharing work safety experience, promoting intrinsic safety improve-ment, strengthening emergency response capacity building, and practicing safety management culture.The Company strictly implements the principle of "three managements and three musts" (business/industry/production and op-erations management, with safety management required), the responsibility system for identifying "whoever in charge is responsi-ble", and performance linkage appraisal. The Safety Committee of the Group has formulated the annual Letter of Responsibility forWork Safety, set up a quanti?able safety responsibility assessment system (including result and process indicators), and performedsafety responsibilities step by step through the closed-loop mechanism of "target decomposition - process supervision - result ap-plication" towards the general managers, department heads and grassroots teams of all subsidiaries. Directly link the assessmentresults to the year-end performance and the annual merit-based evaluation, in order to realize the coverage of all employees' re-sponsibilities.
The Company's health and safety data during the reporting period is shown in the following table:
Health and safety objectivesProgress of the objectives
From 2022 to 2030, ensure annual "0" work-related death and the cover-age rate of 100% in the physical examination.
AchievedFrom 2022 to 2030, ensure that the annual health and safety risk assess-ment covers 100% sites.
Achieved
Unit2024
Occupational health and safety investmentsRMB 10,000526.18Work safety investmentsRMB 10,0007,650.92Number of major work safety incidents/0Number of general work safety accidents/0Incidence of occupational diseases%0Serious work-related injuriesPersons0Work safety inspectionsTimes881Recti?cation rate of hidden safety hazards%93.2Safety Production TrainingTimes1,320Person-times of work safety trainingPerson-times37,823Work safety drillsTimes276Employee coverage of safety drills%99
Governance and Strategies
Indicators and Targets
"
T
hree
-sim
ultaneity"
System
for
Occupational
Hea
lth
a
n
d
S
a
f
e
t
y
F
a
c
i
li
t
i
e
s
Pre-assessment of occu-
pational hazards
Design of facilities for
protecting againstoccupational diseases
E?ectiveness evaluation ofcontrol over occupational
hazardsSafety pre-assessment
Design of safety facilities
Safety assessment upon
completion
Our occupational health and safety work has always been carried out based on the management concept that "safety is essential forsurvival", and the work principle that "production and life safety is the top priority". We pay attention to the management policy of "al-ways placing an emphasis on prevention, paying attention to employee health, ensuring personal safety, preventing and controllingenvironmental pollution, and remaining committed to sustainable development". To comply with the national laws and regulations,which is reckoned as a basic requirement, for the purpose of "zero accidents", and in reliance on the Group's management systemstandards, the Company has continuously improved the system construction, strengthened the process control, performed the mainresponsibilities, carried out regular assessment, e?ectively improved the occupational health and safety, and ensured the orderly de-velopment of production and operation activities through the risk control mechanism, safety evaluation system, Group supervision,assessment, etc., as well as the safety evaluation index system. During the reporting period, the Company and its 14 subsidiaries orproduction bases passed the ISO 45001 Occupational Health and Safety Management System Certi?cation.
Note: Major work safety accidents and general accidents are distinguished by casualties and property losses according to the Regulations on SafetyAccident Reporting, Investigation and Handling.
IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnexIntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
107108
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company complies with the Law of the People's Republic of China on the Prevention and Control of Occupational Diseases, otherrelevant laws and regulations. We prepare and strictly implement occupational health protection system documents, including theRegulations on the Management of Occupational Health, Safety and Environmental Protection to protect our employees' safety andhealth in the production process, and e?ectively prevent them from su?ering occupational diseases.When entering into the labor contracts with the employees in positions exposed to occupational hazards, the Company truthfullyinforms the employees of the hazards they might be exposed during work, and their consequences, measures for protecting againstthe occupational diseases and bene?ts. The employees are informed ahead of the job risks, and clearly specify that no concealmentor fraud is allowed. For the on-the-job employees, the Company selects an occupational health examination institution after compre-hensive consideration of its quali?cation, medical standards, experience in occupational health examination, facilities, internal andexternal environment, price and tra?c accessibility. We organize physical examinations according to our production characteristicsand the occupational hazards existing in the positions of employees in with reference to the national occupational health monitoringstandards. Besides, we continuously observe and manage our employees' physical examination results.
The Company regulates the management of infectious diseases, publicizes the basic knowledge about the infectious diseases,increases the employees' awareness of self-health care and disease prevention, prevents, controls and eliminates the occurrenceand prevalence of the infectious diseases in the Company, and protects the employees' health. When suspicious symptoms of theinfectious diseases or related patients are found, the Company will take necessary protective measures, immediately isolate andsend them to hospitals for diagnosis and treatment, discover and manage the sources of infection in time, cut o? the channels oftransmission, and avoid cross-infection. The Company performs chemical disinfection, and prepares standardized operation ta-bles for common disinfection of daily necessities to guide the actual disinfection work and reduce the spread of infectious viruses.
The Company pays attention to the employees' occupational health and safety, carries out pre-job and on-the-job occupationalhealth training for them, popularizes knowledge about occupational health, and urges the employees to abide by laws, regula-tions, rules, national occupational health standards and operating procedures for prevention and control of occupational diseas-es. For the employees in positions exposed to serious occupational hazards, special occupational health training will be carriedout, and the employees will be allowed to perform operations in their posts only after they have passed the training. The Companyhas posted occupational hazard noti?cation cards and bulletin boards in all workplaces to inform the employees of occupationalhazards in the workplaces, preventive and control actions and systems. Each base, branch and subsidiary regularly monitor theoccupational hazards in the workplaces, and announce the test results to the employees. The Company provides su?cient andconforming personal protective equipment for all employees exposed to the occupational hazards.
Categories of Occupational Health Examinations
Free Clinic and Health Lecture for Supporting the "Hundred-Thou-
sand-Ten Thousand Talents Program"
Mental Health Training for the Employees
In August 2024, Zhuhai Vanteque Specialty Engineering Plastics invited lecturers from RED CROSS SOCIETY OFCHINA ZHUHAI BRANCH to conduct two-day o?-the-job emergency rescue training for 30 employees. The lecturerstaught professional rescue knowledge and skills, and the employees actively learned. In the end, all 30 trainees ob-tained the emergency rescue personnel certi?cates. Through training, the employees mastered emergency rescueskills and placed more emphasis on occupational health.
training for the ?rst aid personnel
On-site Learning
Management Measures forPrevention and Control ofOccupational Diseases
Set up an occupational health managementorganization with occupational health manage-ment personnel to be responsible for the pre-vention and control of occupational diseases.
Draw up plans for prevention and control of oc-cupational diseases and implementation plans.
Establish and improve the systems for monitor-ing and evaluating occupational hazards in theworkplaces.
Draft and improve the emergency rescue plansfor occupational hazards and accidents.
Formulate and improve occupational health manage-ment systems and operating rules.
Create and improve files on occupational health andlaborers' health monitoring.
Provide the employees exposed to occupational haz-ards with personal protective equipment up to the na-tional standards.
Set up corresponding warning signs and occupationalhealth bulletin boards in THE workplaces that produceor have occupational disease hazards.
Occupational Health Protection
Arrange occupational healthexaminations for the em-ployees who are about togo on duty (including thosesubject job transfer) withrespect to the potential haz-ards they might be exposedin their posts according tothe post characteristics.
Arrange health examinationsfor the employees before theyare transferred away from orget away from the operationsexposed to occupational haz-ards, or in front of their posts,in order to confirm theirhealth status when they aresuspended from exposure tothe occupational hazards.
Annually arrange occupa-tional health examinationsfor the employees accordingto national regulations on aregular basis.
In case of any emergencythat endangers the employ-ees' health, immediately or-ganize health examinationsfor the employees workingin the same workplace, an-alyze the cause of the acci-dent, draw up solutions anda solidi?cation plan, and re-inforce occupational healthand safety management.
Pre-jobOn-the-jobPost-employmentEmergency
109110
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Protection of Work SafetySafety Training and Drills
In terms of work safety, we have always adhered to the concept that "safety is essential forsurvival" and the policy of "safety ?rst, prevention foremost, full participation, and com-prehensive governance" to ensure the employees' personal safety. We ensure the smoothprogress of production and business activities by improving our system construction,strengthening our process management, performing our main responsibilities, and con-ducting regular assessments.During the reporting period, the Company improved the Safety Inspection, Hidden DangerInvestigation and Governance System, classi?ed hidden dangers into hidden dangers ofgeneral and major accidents by their hazards and recti?cation di?culty, and completedthe closed-loop recti?cation assessment in time.
To strengthen the Company's emergency response capability and speed, the Companyhas formulated emergency response procedures such as the Management Procedures forRisks, Opportunities and Emergency Preparedness and Response Plans to ensure that var-ious emergency plans can be implemented in time and e?ectively in case of emergencies,minimize casualties and property losses, and ensure the safety of the employees' lives.
During the reporting perioda total of
safety emergencydrills were organized by theCompany according to itsannual planincluding
on-site emergency plan drills
special emergency plan drills
comprehensive emergencyplan drills for work safetyaccidents
and
In November 2024, our petrochemical segment teamed up with the Manage-ment Committee of Liaobin Economic Development Zone, the Fire RescueBrigade and multiple professional fire brigades to carry out an emergencyresponse drill for the Acetone Storage Tank Leakage and Fire Accident, mobi-lizing 18 ?re trucks, and 80 commanders and ?ghters to participate. The drillfocused on five professional units such as communication command, fireextinguishing, cooling, and airlift jet. A number of practical programs wereperformed on UAV and robot detection, foam ?re extinguishing tactics, chem-ical decontamination, and emergency avoidance. This drill tested the park'sability to make collaborative responses to sudden hazardous chemical acci-dents, improved the government-enterprise linkage e?ciency and emergencyresponse, and achieved good results.
In December 2024, Zhuhai Vanteque Specialty Engineering Plastics orga-nized 14 participatory teams represented by departments to carry out the?rst 100-day safety and accident-free knowledge competition. The Compa-ny created a specialized examination questions database with more than8 categories and 500 questions, which covered knowledge about multiplefields, including safety and environmental protection. The employeesactively participated in answering questions. This competition e?ectivelypopularized safety knowledge, increased the employees' safety awareness,promoted the construction of corporate safety and environmental protec-tion culture, and helped improve the overall safety management.
Fire emergency Drills for Strengthening Safety Guarantees
Safety knowledge competition for enhancing safety awareness
Drilling Site
The Company implements full coverage of safety education, requires theemployees to study conscientiously and strictly abide by various rules andregulations, and enhances their awareness of safety work, without violatinglabor disciplines, operating in violation of regulations, or giving commandsin violation of regulations, in order to avoid accidents to the greatest extent.The new employees must pass the orientation training and assessmenton safety, and the incumbent employees must receive safety re-educationevery year. The management supervisors, professional and technical engi-neers shall receive safety training before their promotion, and may be pro-moted or appointed only after passing the assessment.
During the reporting periodthe average time for online safetytraining for employees was up to
hours per capita
Safety Knowledge Contest
Work safety laws and regulations,as well as relevant standardsapplicable to the Company
Safety procedures and require-ments of the Company, includ-ing work safety prohibitions
Previous accident cases of the Company and those related to the appointment for this post; procedures
and requirements for handling the emergencies
The evaluation is performed afterthe training, and a closed-bookexamination is arranged. Theexam paper consists of choicequestions and short answerquestions or case analysis. Theminimum passing score is 80
Discuss the hazards existing inthe areas of new posts whereappointment remains to beperformed or that the person-nel to be appointed for theseposts will be exposed, andsome major controls
Content of safety trainingSafety Inspection and Hidden Hazard Investigation MethodsDailyinvestigation
Comprehensiveinvestigation
Professionalinvestigation
SeasonalinvestigationInvestigationbefore keyperiods andholidays
Investigation ofaccident types
Investigationbefore produc-tion and work
resumption
Diagnosticinvestigationby an externalexpert
111112
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Rural Revitalization and Social ContributionsData Security and Customer Privacy Protection
The Company actively performs its corporate social responsibilities, re-sponds to the national rural revitalization strategy, and remains committedto promoting social equity and common prosperity. Through charitabledonations and project assistance, we continuously increase our invest-ments in the rural revitalization to facilitate the economic development,and improve people's livelihood and ecological construction in pover-ty-stricken areas. In the future, we will continue to implement our nationalrural revitalization strategy, further increase our investments in the ?eld ofrural revitalization, explore diversi?ed innovative models such as industrialassistance, ecological protection, and cultural revitalization, facilitate ruraleconomic development, ecological protection, and social progress, andmake contributions to the goal of common prosperity.
The Company deeply realizes the importance of information assets, adopts a series of strict comprehensive measures to ensuredata integrity and con?dentiality, and creates an information security defense line, in order to create a safe and reliable digital en-vironment for the customers and fully protect customer privacy.During the reporting period
During the reporting periodthe Company's social welfare donations(including rural revitalization donations)totaledRMB
the Company conducted
security audits
and the information security risksidenti?ed in the security audit were
2.383
100%million
information
recti?edThe Company systematically improves the informationsecurity management system. During the reporting peri-od, we revised the Information Application ManagementRegulations and added the Requirements for SupplyChain Information Security Management to ensure thesecurity of information systems and data.Data security protection measures
Risk assessment and reclassi?cation of data are carried out annually to ensure the pertinenceand e?ectiveness of data protection measures.Risk assessment
Quarterly arrange information security engineers for vulnerability scanning, penetration test andweak password inspection on the intranet. Output scanning results and rectification require-ments. Follow up on and review the reinforcement measures. Finally, summarize all inspections,reinforcements, and tracking. Prepare a summary report and announce the completion of thework internally. During the reporting period, the Company discovered 611 system vulnerabilitiesand completed all repairs.
Vulnerability scan-
ning and ?xing
Construct an access control and privileged account management system. The information securi-ty engineers conduct behavioral audit on the account permissions of product managers, adminis-trators and external consultants. During the reporting period, the security access control over thesubsidiaries' new servers only allowed the access through a bastion host.Access permis-
sion settings
During the reporting period, we completed performed special security protection for 10 domesticbases, added 6 ?rewalls, 2 network access systems, 2 network threat detection systems, and 3online behavior management systems. The anti-virus software of the terminal computer fully cov-ered those that met the installation conditions.Software and
equipment
Encrypt data for storage and transmission to ensure the data con?dentiality and integrity. Anydecryption requirements must be submitted through the internal OA system, and the decryptionoperation can only be performed with approval.Documentencryption
Perform regular backup and recovery tests on important data to ensure data reliability and availability.Data backup
We have formulated the Equipment Network Access Management Speci?cations to specify the
procedures for application, approval, use and change of equipment network access, require o?ce
computers to be installed according to standards, and private computers to follow speci?c rules
for network access, and punish violations.
Equipmentnetwork accessspeci?cations
According to the Information Security Management Regulations, employees or departments mak-ing valuable suggestions, implementing improvement measures or performing well in handlingincidents in information security work are rewarded, and information security violations are pun-ished.Reward and punish-
ment mechanism
Consolidating the achievements in poverty alleviation
and laying a solid foundation for development
Revitalizing rural economy and building a
beautiful homeland together
Lvmei Qingyuan Project: Donated RMB2, 000
through Guangyi Joint Fundraising Platform tosupport the regional ecological and environmentalconstruction in Qingyuan, and facilitate the greendevelopment of rural areas.Community Charity Fund support: Donated RMB5,000 to support Wuhan Liaojiabao CommunityCharity Fund to promote the harmonious develop-ment of the rural society.Ecological protection of the Yangtze River: DonatedRMB 50,000 to support Hubei Yangtze River Eco-logical Protection Foundation, promote ecologicalenvironment protection in Yangtze River Basin, andassist with rural ecological revitalization.
Assisted with the infrastructure construction: Donat-
ed RMB 50,000 to the solar street lamp constructionproject in Huanggang Village, Shigu Town, GaozhouCity, to improve local infrastructure and the villagers'living standards.
Promoted common prosperity: Donated RMB 250,
000 to support the Beilun District "Common Prosper-ity, Happy Home" charity fund, supported the devel-opment of charity in Beilun District, and promoted therealization of the goal of common prosperity.
Data Security Protection
113114
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
To improve our ability to make emergency responses to information security incidents, strengthen the information security guar-antee work, and form a scienti?c, e?ective and responsive emergency work mechanism, we have drafted the Emergency Plan onInformation Security according to the Management Measures for Internet Information Services, Management Measures for Com-puter Virus Prevention and Control, other relevant laws and regulations, set up an information security emergency organization,standardized emergency response procedures, ensured the physical security, operation security and data security of importantcompany information systems, and minimized the harm of information security emergencies.
The Company has formulated the Management Measures for Information Security Training, to conduct annual information securityawareness training for new employees and the employees in key positions such as ?nance, procurement, sales, and IT to increasetheir awareness of the Company's information security strategies, evaluate the training e?ectiveness and adjust the training planand content. The Company also requires the suppliers to conduct information security awareness training for all employees atleast once a year to ensure that they understand the Company's information security policies and regulations.
Emergency organizationPersonnel compositionEmergencyresponse
leadinggroup of the
Company
Emergencyresponse team
Externalliaisono?cers
Level 1 incidents: CEO, CIO, general managers of basesLevel 2 incidents: head of the Information Department, heads of departments related toapplication systemsLevel 3 incidents: head of the Information Department, heads of departments related toapplication systemsLevel 1 incidents: head of the Information Center, supervisors, relevant module team lead-ers, director of the Con?dentiality O?ce, con?dentiality commissionerLevel 2 and 3 incidents: related supervisors of the Information Center, related moduleteam leaders
Supervisors of the Information Center, security team leader
During the reporting period
and achieved
full coverage of key personnel
the Company organizedto information security
training sessions related
sessions on information securityfor the new employeesorientation training
training sessions for keypersonnel
information security
information security training session
for middle and senior management cadresabove the ministerial level
and
information securitytraining session for overseas employees
Among them, a total ofwere organized for branches and subsidiaries
information security training sessions
Information Security Training for New
Employees
Information Security Training
for Key Groups
Information Security Training forOverseas New Employees
The Company has formulated the Con?dentiality Management Regulations, which stipulate that internal con?dentiality-relatedemployees and external personnel shall enter into con?dentiality agreements to ensure that sensitive information is not disclosedand the information security of the Company is guaranteed. In addition, the Company has also formulated and strictly implement-ed the Management Speci?cations for Major Meetings and the Management Speci?cations for Meeting Safety to ensure smoothprogress of important meetings, con?dentiality and security of meeting information.
The Company complies with the relevant laws and regulations on privacy protection, regulates and manages the collection, stor-age and use of personal data, and ensures the data security and legality of data. In addition, we require our employees not to dis-close customer information or other personal data to unauthorized third parties, in order to ensure the con?dentiality of customerinformation and other personal data. During the reporting period, there was no customer privacy leakage incident. During thereporting period, no customer privacy was disclosed in the Company.
A perfect DLP system has beenestablished. All documents arecirculated in an encrypted state,and outgoing applications need tobe decrypted or passed through theCompany's mailbox.Encrypted storage is performedfor the database.
Strictly manage permissions, and grant authorities to the
positions to the minimum extent.
Implement data desensitization andanonymization to protect customerprivacy.
Establish the roles of the audit man-agers to conduct regular audits ondata usage, query and download.
Customer pri-vacy protec-tion measures
Information security emergency organization
Customer Privacy Protection
Con?dentiality of Material Information
115116
Completed a new-round management re-election
A
The information disclosurework was evaluated as Class
Highlighted results
Responsibilityfor Governance
Committed to building an efficient governance structure for theshareholders' meeting, the Board of Directors and the Board of Su-pervisors, the Company ensures the transparency and complianceof corporate governance through a range of measures. The Compa-ny has optimized the information disclosure process and strength-ened risk management to improve governance efficiency ande?ectiveness. In addition, the Company ?rmly adheres to businessethics, upholds the principle of integrity management, and jointlycreates an equal competitive environment with its stakeholders.
SDGs benchmarking
Convened
general meetings ofshareholders
meetings of theBoard of Directors
and
meetings of the
Board of Supervisors
117118
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
General Meeting of ShareholdersIn accordance with the Company Law, the Rules of Procedure for the Meet-ing of General Shareholders of the Company, and the Articles of Association,the shareholders' meeting of the Company shall perform the procedures forconvening/holding the meetings and voting according to law. As the highestauthority of the Company, the general meeting of shareholders is mainlyresponsible for decision-making over major issues of the Company, super-vising corporate governance, safeguarding the right of all shareholders toattend the meeting, providing su?cient consultation channels for the share-holders, and ensuring the open, fair and just voting.Our Board of Director strictly performs the duties for lawfully deciding onour major business decisions and investment plans of the Company and for-mulating our basic management systems in accordance with the CompanyLaw, the Rules of Procedures for the Board of Directors of the Company andthe Articles of Association. The Board of Directors has set up four specialcommittees to provide professional advice and support for its scienti?c de-cision-making.
Board of Directors
Our Board of Supervisors lawfully performs its supervisory duties in strictcompliance with the Company Law, the Rules of Procedure for the Board ofSupervisors of the Company and the Articles of Association. As a body thatsupervises the corporate governance, the Board of Supervisors carries outsupervision by convening regular meetings, and reviewing reports and on-site inspections. It performs its duties for supervising and inspecting theperformance of duties by our directors and senior management, as well asour ?nancial a?airs, in order to e?ectively safeguard our and our sharehold-ers' legitimate rights and interests.
Board of Supervisors
During the reporting periodthe Company heldmeetings of shareholders
general
at which a total ofwere considered
motions
Board of Directors meetings at whicha total ofmotions were considered
Operation by the Board of Directors, the Board ofSupervisors and the General Meetings of Shareholders
The Company has established a sound system for the operations of the three boards, and continuously regulates the operation and de-cision-making of the general shareholders' meetings, the Board of Directors, and the Board of Supervisors, so as to ensure e?cient co-operation, checks and balances among the authorities, decision-making and supervisory bodies. In order to protect the legitimate rightsand interests of the shareholders and creditors and standardize its organization and operation, in 2024, the Company revised the Rules ofProcedure for the General Meeting of Shareholders, Rules of Procedure for the Board of Directors, Remuneration Management System forDirectors, Supervisors and Senior Managers, Articles of Association and other governance documents, and disclosed them on the websiteof Shanghai Stock Exchange (www.sse.com.cn) and its own o?cial website.
Board of Directors of the Company
Board ofSupervisors
NominatingCommittee
Remuneration andEvaluation Committee
Audit Committee
General Meeting of Shareholders
Independence and Diversity of the Board of Director
The Company attaches great importance to the independence of the Board of Directors. We haveformulated and regularly revised the Independent Director Work System. The Company attachesgreat importance to the plurality of independent directors in the Board of Directors and its spe-cial subordinate committees, and ensures independent operations of the special committees,so as to strengthen the fairness of the Board of Directors' decision-making and protect the legiti-mate rights and interests of the shareholders.While emphasizing the independence of the Board of Directors, the Company also attaches greatimportance to the diversity of the Board of Directors. Sex, age, professional background andother dimensions have been considered in nominating directors for the Nomination Committee.The Company believes that directors with diverse backgrounds may help the Board of Directorsbetter supervise its management and operations, evaluate the risks and opportunities of itsbusiness model from di?erent perspectives, and promote its formation of an equal, inclusive andopen culture.
PolymersEconomicsManagement ScienceFinanceLaw
the Board of Directors consisted of
members
directorsof whom were independent
membersThe Strategy and SustainabilityCommittee had
All members of the AuditCommittee were independentdirectors
members
Either the Audit Committee,the Nomination Committeeor the Remuneration andAppraisal Committee had
of whom were independentdirectors
of whom were independent
directors
During the reporting period
ChenPingxu
42MaleChairman
Strategy and Sustain-ability CommitteeYuanChangchang
41Male
Director, ViceChairman,ExecutiveDeputy Gen-eral Manager
Nominating Committee
Wu Di40Male
Director, Gen-eral Manager
Remuneration andAppraisal Committee,Strategy and Sustain-ability CommitteeNingHongtao
51MaleDirector
ChenNiande
40Male
Director andDeputy Gen-eral Manager
Li Peng43Male
Director andDeputy Gen-eral ManagerLiHuaxiang
43MaleDirectorYangXiong
58Male
Independentdirector
Audit Committee
MengYuezhong
61Male
Independentdirector
Nomination Commit-tee, Remuneration andAppraisal Committee,Strategy and Sustain-ability CommitteeZengXingrong
62Male
Independentdirector
Remuneration andAppraisal Committee,Strategy and Sustain-ability Committee, AuditCommittee
ZhangJicheng
48Male
Independentdirector
Nomination Committee,Audit Committee, Strat-egy and SustainabilityCommittee
Diverse Backgrounds of the Members of the Board of Directors
NameAgeGender
Currentposition
Incumbency of thecommittees
MajorBoard of Directors
Secretary of theBoard of DirectorsStrategy and Sustain-ability Committee
andBoard of Supervisors meetings atwhich a total ofmotions were
considered
119120
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
The Company completed the new-round management re-election in May 2024, turning the founding team to a team of profession-al managers, making the members of the Board of Directors younger, systematically adjusting the corporate governance structureand further optimizing the decision-making mechanism and management e?ciency.
The Company will always uphold the principles of fairness and transparency, avoiding any behaviors that might lead to con?ictsof interest. Ensure that all employees and partners can identify and report the con?icts of interest in business activities by estab-lishing a sound conflict of interest management system. In addition, the Company enhances its employees' awareness of andalertness to the con?icts of interest through training and education, and ensures that the employees can consciously abide by theCompany's policies on the con?icts of interest.We strictly abide by the relevant laws and regulations of related party transactions in the place of listing, and prohibit our directors,supervisors, and other senior managers from harming our and our shareholders' interests through related party transactions. Theinterested directors need to voluntarily declare and abstain from voting. In addition, the Company strengthens the supervision andreview of related party transactions, requires the independent directors to perform their duties, and supervises the potential majorcon?icts of interest among the controlling shareholders, actual controllers, directors, and senior managers of its subsidiaries, inorder to urge the Board of Directors to make decisions in line with the overall interests of the Company and protect the legitimaterights and interests of minority shareholders. For details of the Company's related party transactions during the reporting period,see Section 10 - Financial Report "Related Parties and Related Party Transactions" in the Annual Report 2024.
Governance Optimization
Con?icts of Interest
With the optimization of corporate governance structure and performance improvement, the share-holder value increased, while the shareholder satisfaction and loyalty were improved.
Positive Impacts of the New Management on the Company
Higher shareholder value
The new members of the Board of Directors in-troduced innovative business models and marketstrategies so that the Company became moreadvantageous in the market competitions.The Company turned its founding team into ateam of professional managers and made themembers of the Board of Directors younger. Weintroduced new professional knowledge andmarket experience, thus improving the e?ciencyand quality of decision-making.
Management specializationEnhanced market competitiveness
The team of professional managers was morecapable of risk identification and management,which helped the Company maintain its stabilityin market ?uctuations.The new directors made our culture more openand inclusive, stimulating the employee motiva-tion and creativity.
Enhanced risk management capacityOptimized corporate culture
The optimization of corporate governancestructure and the management specializationattracted more value investors and partners, andimproved our brand image.The younger Board of Directors was more willingto accept new technologies and ideas, which pro-moted the continuous innovation of our productsand services.
Innovation and change promotionImproved brand image
The Company adopts a salary structure of " annual base salary, annual performance pay, and long-term incentives". We have estab-lished a bene?t and risk-sharing mechanism for our shareholders, management and business backbones. Besides, we implementan equity incentive plan for all employees, to encourage our managerial personnel, technical, business and operation backboneswho satisfy the incentive conditions.
For details of the remuneration policy and remuneration of the directors, supervisors and o?cers during the reporting period,please refer to Section IV - Corporate Governance of the 2024 Annual Report.
Remuneration and Equity Policies
EquityPoliciesfor theCompany'sDirectors,Supervisorsand O?cers
Restrictions on shareholder transactionsIf the directors, supervisors, senior managers, and shareholders holding more than5% of the shares sell the Company's stocks or other equity securities within 6 monthsafter their purchase, or purchase them within 6 months after selling, the proceedstherefrom will be owned by the Company.
Execution by the Board of DirectorsThe Board of Directors shall implement the above provisions. Otherwise, the share-holders have the right to request the Board of Directors to implement the provisionswithin 30 days.
Exceptions
Except for the circumstance that a securities company holds more than 5% of theshares due to the purchase of the remaining shares after the package sale, and othercircumstances stipulated by the China Securities Regulatory Commission.
The responsible directors shall be jointly and severally liable according to law.
Directors' responsibilities
If the Board of Directors fails to execute within 30 days, the shareholders have theright to directly ?le a lawsuit with the people's court in their own name for the bene-?t of the Company.Shareholders' right to ?le lawsuits
121122
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Transparent Disclosure
The Company strictly obeys the Measures for the Administration of Information Disclosure by Listed Companies, ensures the trans-parency of information disclosure and protects the rights and interests of its investors and stakeholders by formulating the Infor-mation Disclosure Management System and the Investor Relations Management System. The Company objectively and completelydisplays its performance in ESG and builds a good image around the information demand related to the investors' decisions andby fully considering the correlations between the present and past information.
A transparent and standard information disclosure mechanism is essentialfor the Company's smooth communications with its investors, regulators andother stakeholders. The Company truly, accurately, completely, timely andfairly discloses the matters related to its operation and governance throughregular and interim announcements, strictly performs its information disclo-sure obligation as a listed company, and protects the legitimate rights andinterests of its investors and stakeholders.The Company designates the media announced by China Securities Regula-tory Commission and the website of Shanghai Stock Exchange that meet theconditions for information disclosure in the securities market as the mediafor publishing its announcements and other information that need to be dis-closed. In addition, a special investor relations column has been set up at ourwebsite to update important announcements in real time, to ensure that ourinvestors and stakeholders can have easy access to our key information accu-rately through authoritative and o?cial channels.
Information disclosure
During the reporting period
the Company disclosed
regular announcements
and
interim announcementsShanghai Stock Exchange's evaluationresult of the Company's informationdisclosure work in 2023-2024 was ratedA
The Company annually organizes publicityactivities for the Investor Protection Dayon May 15. The investors are organized tovisit and communicate with the Companyfrom time to time. Meanwhile, the Companyprovides the investors with diversified com-munication methods, so the investors cankeep informative about the Company's latestinformation through communication chan-nels such as strategy meetings with securitiesfirms, corporate performance briefings, in-vestor surveys, hotline, email, E-Interactive,and investor relations portal of the officialwebsite. The relevant persons in charge ofthe Company promptly sort out and respondto the investors' questions, actively commu-nicate with the investors, and e?ectively im-prove the relationship between the Companyand its investors.
Investor communications
In 2024, the Company organized investor communi-cation event, and invited Wanlian Securities, ChinaMerchants Securities, Huaan Securities, other insti-tutions, and individual investors to conduct on-siteresearch, thus further strengthening its communica-tions with the investors, increasing its transparencyand improving its governance. The activities includedpresentations by the Company's management, fac-tory tours, and visits to the R&D Center, enabling theinvestors to understand the Company's operationsand strategic planning more comprehensively. Duringthe event, the management actively responded to theinvestors' concerns and enhanced their con?dence inthe Company. After the event, the Company collectedrelated feedback and provided reference support forthe Company's future investor relations management.By continuously deepening its communications withinvestors, the Company continuously improved itsgovernance mechanism and laid a solid foundationfor its healthy development.
Inviting the Investors to Conduct On-site Research to Boost the Investor Con?dence
Investor Survey
the Company participated inorganized by the securities ?rms
strategy meetingsheld
performance brie?ngsand carried outand exchange activities
investor research
During the reporting period
123124
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Risk Management
To increase its e?ciency of corporate governance and risk management, and promote its long-term development and value cre-ation, the Company has built an Audit Committee under the Board of Directors to coordinate its compliance management workand supervise the e?cient operation of its compliance management system. In addition, the Company has also issued a number ofpolicies, including the Internal Audit System and Corporate Risk Control and Early Warning Plan, to strengthen its internal controland risk management, and ensure its stable operation and sustainable growth.
Internal Control and Management System of the Company
All departments of the Companyare responsible for compliancemanagement of this system, andlead such management.
Determine that the Legal A?airs De-partment is a general compliancemanagement department, whichshall organize, coordinate andsupervise the compliance manage-ment, to provide compliance sup-port for the departments responsi-ble for compliance management.
The Audit Department shallaudit and evaluate the com-pliance of operations manage-ment and the effectiveness ofcompliance management.
First line of defenseSecond line of defenseThird line of defense
| 01 | 02 | 03 |
The Company adheres to the risk management philosophy of "prevention ?rst, supported by control". We emphasize reducing thepossibility of risks through preventive actions, and mitigating the impacts of risks through control measures.In 2024, the Company sorted out the process for rectifying risk issues, informatized the process, improved the recti?cation e?-ciency, and realized real-time monitoring of risk recti?cation. The risk recti?cation is a systematic and multi-step process involvingmultiple roles, including the persons following up on the recti?cation, heads of the responsible departments, persons responsiblefor recti?cation, administrator of the risk database, and audit manager. The process starts from the entry of risk data, ranging frompreliminary review, feedback, review and approval of recti?cation measures, update of risk database, feedback, review and reviewof recti?cation situation, and reexamination to the con?rmation of recti?cation completion and ?nal ?ling. This process ensuresthe standardization, transparency and e?ectiveness of our risk management, timely implementation of recti?cation measures ande?ective risk control through the layer-by-layer review and feedback mechanism.
Recti?cation of risk issues
During the reporting period
with a recti?cation completion rate of78%
the Company produced a total of
summary reports on risk identi?cation
identifying a total ofand included them in the Group's risk database
medium and high risk items
By promoting the rectification of the medium and high riskproblems, the Company avoided economic losses totaling
22.4
millionRMB
In 2024, a total of
problems in the Group's risk database were recti?ed
and added/revised a total of
standards
The Company abides by the local tax laws and regulations of its places of business allover the world, and fulfills its tax declaration and information disclosure obligationsaccording to law. We pay all taxes on time, empowering social value creation with taxcontributions. The management strictly implements the reporting mechanism of theBoard of Directors in major business decisions, cooperates with internal professionalteams to conduct tax compliance reviews, and introduces third-party organizations forevaluation when necessary, in order to ensure that tax risks are controllable throughoutthe decision-making chain.The tax team is actively responsible for managing and supervising the direct and indi-rect tax changes of all entities, assessing the potential impacts of new tax legislation andpolicies on the Company, continuously optimizing tax management measures, improv-ing compliance with tax policies, reducing tax risks, and improving the tax managementinformation system to enhance the informatization of tax management.
Tax Management
During the reporting period
the Company paid taxes ofin totalRMB
1.078
billion
Business Ethics
Adhering to the highest standards of business ethics, the Company always regards integrity management, information disclosure,elimination of illegitimate interests, prevention of con?icts of interest, anti-money laundering, anti-fraud, and customer privacyprotection as its core principles. In all its business activities, the Company, its employees and partners are committed to creating asunny, transparent, standardized and orderly corporate ecosystem.Taking a "zero tolerance" attitude towards any violations of business ethics, we resolutely oppose any form of bribery, corruption,extortion, and other violations of business ethics. For relevant misconducts veri?ed, the Company will immediately terminate co-operation with relevant personnel, and take legal measures when necessary for ensuring the Company's ethical and legal rigor.
The Company has always strictly abided by the relevant laws and regulations on anti-corruption and anti-bribery, and formulateda series of internal systems and norms, including the Regulations on Acceptance of Gifts for Business, Code of Conduct for Employ-ees, Business Ethics Policies, and Management Regulations for Protection against Commercial Bribery, to comprehensively stan-dardize and control the employees' business practices. In addition, the Company has signed the Integrity Commitment Letter withall suppliers it has transacted with to ensure that its partners follow the principle of integrity management. It is expressly stipulatedin the Management Regulations for Protection against Commercial Bribery that the Company shall establish and improve its integ-rity management system that covers all customers, suppliers, service providers, and contractors who have business dealings withthe Company. Adhering to the management policy for "bribery prohibition and fair trade", we resolutely reject commercial bribery,bribe, and any form of improper business practices. We are committed to creating a clean, honest, transparent and fair businessenvironment.
Anti-corruption
Assess and control our integrity risks; identify integ-rity risks of di?erent departments and positions.Perform regular integrity inspection for each depart-ment, report the integrity problems to the generalmanager if any, and formulate control measures.Organize on-the-job integrity training for all depart-ments and employees to increase their awarenessof integrity.
Assist the Audit Department in conducting regularself-examination on their integrity problems, re-port any problems found to the Audit Departmentand the general manager in time, and formulatecorrective and preventive actions.Particularly organize follow-up on their positionswith integrity risks, and formulate correspondingmanagement measures.
InternalIntegrityManagement
Mechanism
Audit DepartmentAll departments of the Company
125126
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
From August to October 2024, the Company organized a total of 259employees in the key positions of the Marketing Center, PurchasingDepartment, Finance Department, Audit Department, TechnicalCenter, and other departments to visit Guangdong Integrity Educa-tion Base for study, and conducted anti-corruption education andtraining through on-site visits, in order to increase the employees'awareness of laws, disciplines, and professional ethics, mitigate itsoperational risks, create a clean and upright corporate atmosphere,and promote its sustainable and healthy development.
Anti-corruption Education and Training for Creating a Clean and Honest Atmosphere
In September 2024, to further increase the awareness of integrity andself-discipline among the leaders and cadres in key departments, theCompany organized key Party members and leaders of key regula-tory departments to go to Qingyuan Prison, visit the anti-corruptionwarning education base and prison command center. They intuitivelyunderstood the prisoners' life, study, and re-education, and wereenlightened. This study and education helped the leaders and cadresdeeply understand the serious consequences of duty crimes, keep inmind the red lines of discipline, strengthen self-discipline, and playvanguard and exemplary roles.Leaders' and Cadres' Visit to the Self-cultivation Hall
Purchasing Department's Anti-corruption Educa-
tion and Training
I will resolutely ful?ll my duties, give priority to the interests of the orga-nization, and be honest and self-disciplined.A leader ofthe FinanceDepartment
This activity touched my soul directly, made me con?dent to create a"sunshine procurement" ecosystem, and strengthened my determina-tion to stay away from corruption, and maintain integrity.A leader of the
PurchasingDepartment
The Company deeply advances its Party integrity and clean gover-nance, and promotes the integrity culture. We have formulated theRegulations on Integrity Management to integrate integrity educationinto the corporate culture, overall publicity and education work. TheCompany has established a compliance and business ethics trainingsystem that covers all employees. We strengthen incorruptible em-ployment and risk control education for key positions. Our marketingand ?nancial personnel are required to receive training related to theanti-corruption, anti-bribery and anti-money laundering. We regular-ly organize the employees of the Securities Department to learn thenew regulations of the CSRC.In addition, the Company actively conducts compliance training foreach place of business, which covers local laws and regulations, itscompliance code of conduct, ethics, etc. By carrying out positive andnegative education for typical Party members, we have increasedthese members' awareness of integrity and self-discipline, and drawnup an annual Party building work plan for corruption prevention.
During the reporting period
sessions with a total duration of
hoursand a total of
participants
the Company conducted
anti-corruption training
Formulate norms on brand use, conduct infringementsearch, and prevent counterfeiting and misleading con-sumers.
Promotional materials shall be reviewed by the LegalA?airs Department to ensure their authenticity and accu-racy. Establish a quick response mechanism for customerfeedback.
The employees in key business positions sign aletter of commitment on integrity and self-disci-pline, receive training on anti-commercial bribery,and establish a registration and con?scation sys-tem for gifts.
Prohibiting commercial bribery
Clarify the scope of trade secrets, implement hi-erarchical and classi?ed management, ensure in-formation security, and perform strict resignationand handover procedures.
Protecting trade secrets
Preventing misleading consumer behaviors
Controlling false propaganda
DetailedAnti-unfairCompetitionRules
The Company undertakes to fully abide by national anti-money laundering laws and regulations, and resolutely opposes any formof money laundering activities. We deeply realize the great harm of money laundering to ?nancial market stability, social publicsafety and our reputation, taking e?ective measures to prevent and curb money laundering.
The Company has formulated the Management Regulations on Anti-monopoly and Anti-unfair Competitions, to ensure that itsoperations comply with national anti-monopoly and anti-unfair competition laws and regulations, maintain a fair orderly marketenvironment, and protect the legitimate rights and interests of itself and the stakeholders.
Anti-money laundering
Anti-monopoly
Detailed Anti-monopoly Rules
Monitoring monopolyagreements
Preventing abuse ofmarket dominance
Managing the operators'centralized declarationsEstablish a regular review mech-anism to screen agreements andexchanges with competitors,suppliers, distributors, etc., andprevent monopolistic behaviorsinvolving sensitive areas such asprice, output, market division,and technology sharing.
Evaluate the Company's marketposition through market surveys,draw up a self-examination plan,follow the principle of cost plusand dynamic balance betweenmarket supply and demand toprice products, and avoid actslike price discrimination.
Track M&A, equity acquisi-tions, and other projects thatmight lead to concentrationof the operators, predictwhether they meet the decla-ration standards, and initiatethe declaration process.
127128
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Reward and Punishment Measures of Business Ethics
Forfeit all bribery proceeds, andperform relevant education andadministrative sanctions depen-dent upon seriousness of thecase; transfer them to judicialorgans for investigation of theircriminal responsibilities if thecircumstances are rather seri-ous.
Notify and supervise our depart-ments corresponding to the relat-ed units and send a written warn-ing letter. If the circumstances areserious, the suppliers and serviceproviders will be resolutely dis-quali?ed. If their acts constitute acrime of commercial bribery (brib-ery), they will be transferred to thejudicial organs for investigation oftheir criminal responsibilities.
Encourage the parties and insid-ers to whistleblow. We will re-ward the whistleblowers whosereports are true as demonstrat-ed after investigation, and main-tain their con?dentiality.
The Company has established a comprehensive whistleblowing system, to encour-age all stakeholders to provide feedback, complaints and suggestions on corruption,money laundering, fraud, con?ict of interest, unfair competition, and other violationsthrough the hotline and e-mail and whistleblowing channels. We promise to serious-ly process all reported information, and protect the rights and privacy of the whis-tleblowers.
Whistleblowing Mechanism
Whistleblowing channel:
Tel: +86(020)-66818888Email: ir@kingfa.com
Employeesviolating rules
Suppliers and service pro-
viders violating rules
Truthfulwhistleblowing
Anonymous whistleblowing
The Company respects privacyand makes anonymous whis-tleblowing optional to encour-age people to provide informa-tion without concerns.
Investigation and handling
Once complaints or suggestions arereceived, the Company will prompt-ly initiate investigation and handlingprocedures.
Including recording and classify-ing complaints, assigning them torelevant departments for handling,conducting necessary investigations,and taking appropriate actions.
Protecting the rights and interests of whistleblowersThe Company takes measures to protect the rights and privacy of the whistleblowers and
ensure that the whistleblowers will not be subject to any form of retaliation.
The Company resolutely protectsthe safety and privacy of the whis-tleblowers and ensures the con-?dentiality of information duringthe whistleblowing.
Protective Mea-sures for Whis-tleblowing
128127
Fast response
Maintaining safety and privacy
129130
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
GRI IndexInstructions
The information cited in this GRI Content Index is reported by the Company with reference to theGRI Standards from January 1, 2024 to December 31, 2024.GRI 1 usedGRI 1: Foundation 2021
GRIStandards
Disclosed itemSections of the Report
GRI 2: GeneralDisclosures 2021
2-1 Organizational detailsAbout the Company2-2 Entities included in the organization's sustain-ability reporting
Description of the Report Preparation2-3 Reporting period, frequency and contact pointDescription of the Report Preparation2-4 Restatements of informationList of Key Performance Indicators2-6 Activities, value chain and other business rela-tionships
About the Company2-7 EmployeesEquality, Inclusion and Diversity2-9 Governance structure and composition
Operation by the Board of Directors,
the Board of Supervisors and the Gen-
eral Meetings of Shareholders2-10 Nomination and selection of the highest gov-ernance body
Operation by the Board of Directors,
the Board of Supervisors and the Gen-
eral Meetings of Shareholders2-11 Chair of the highest governance body
Operation by the Board of Directors,
the Board of Supervisors and the Gen-
eral Meetings of Shareholders2-12 Role of the highest governance body in over-seeing the management of impacts
Our sustainability management; Op-
eration by the Board of Directors, the
Board of Supervisors and the general
meetings of shareholders2-13 Delegation of responsibility for managingimpacts
Our sustainability management; Op-
eration by the Board of Directors, the
Board of Supervisors and the general
meetings of shareholders2-14 Role of the highest governance body in sus-tainability reporting
Our sustainability management; Op-
eration by the Board of Directors, the
Board of Supervisors and the general
meetings of shareholders2-15 Con?ict of interest
Operation by the Board of Directors,
the Board of Supervisors and the Gen-
eral Meetings of Shareholders
GRIStandards
Disclosed itemSections of the Report
GRI 2: GeneralDisclosures 2021
2-16 Communication of critical concernsOur Sustainability Management2-17 Collective knowledge of the highest gover-nance body
Operation by the Board of Directors,the Board of Supervisors and the Gen-eral Meetings of Shareholders2-19 Remuneration policies
Operation by the Board of Directors,the Board of Supervisors and the gen-eral meetings of shareholders; Talentattraction and retention2-20 Process to determine remunerationTalent Attraction and Retention2-22 Statement on sustainable developmentstrategies
To Stakeholders2-23 Policy commitmentsOur Sustainability Management2-23 Integration policy commitmentsOur Sustainability Management2-25 Procedures for remedying negative impacts
Safety and Quality of Products and Ser-
vices2-26 Mechanisms for seeking advice and raisingconcerns
Talent Attraction and Retention2-27 Compliance with laws and regulations
Operation by the Board of Directors,
the Board of Supervisors and the Gen-
eral Meetings of Shareholders2-28 Membership associations
Main Participatory Domestic Associa-
tions and Organizations2-29 Approach to stakeholder engagementOur Sustainability Management2-30 Collective bargaining agreementsTalent Attraction and Retention
GRI 3: MaterialTopics 2021
3-1 Process to determine material topicsOur Sustainability Management3-2 List of material topicsOur Sustainability Management3-3 Management of material topicsOur Sustainability ManagementGRI 201: Econom-ic Performance2016
201-2 Financial implications and other risks andopportunities due to climate change
Climate Change Tackling201-3 De?ned bene?t plan obligations and oth-er retirement plans
Talent Attraction and Retention201-4 Financial subsidies granted by the gov-ernment
Refer to the annual report
131132
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
GRIStandards
Disclosed itemSections of the ReportGRI 203: Indirecteconomic impacts2016
203-1 Infrastructure investments and services supported
Rural Revitalization and SocialContributions
GRI 205: Anti-cor-ruption 2016
205-1 Operations assessed for risks related to corruptionBusiness Ethics
205-2 Communication and training about anti-corrup-
tion policies and procedures
Business Ethics
205-3 Confirmed incidents of corruption and actions
taken
Business EthicsGRI 206: An-ti-competitiveBehavior 2016
206-1 Legal actions for anti-competitive behavior,anti-trust, and monopoly practices
No Related Lawsuit in the
Company
GRI 207: Tax 2019
207-1 Approach to taxRisk Management207-2 Tax governance, control, and risk managementRisk Management207-3 Stakeholder engagement and management ofconcerns related to tax
Risk ManagementGRI 301: Materials2016
301-2 Recycled input materials used
Management of Raw and
Packaging Materials301-3 Recycled products and their packaging materials
Circular Economy; Management
of Raw and Packaging Materials
GRI 302: Energy2016
302-1 Energy consumption within the organizationEnergy Usage302-3 Energy intensity
List of Key Performance
Indicators302-4 Reduction of energy consumptionEnergy Usage302-5 Reduction of energy demand for products andservices
Energy Usage
GRI 303: Waterand E?uents2018
303-1 Interactions with water as a shared resourceUsage of Water Resources303-2 Management of water discharge-related impactsUsage of Water Resources303-3 Water withdrawalUsage of Water Resources303-4 Water dischargeUsage of Water Resources303-5 Water consumptionUsage of Water Resources
GRIStandards
Disclosed itemSections of the ReportGRI 304: Biodiversity2016
304-1 Operational sites owned, leased, managed in or
near protected areas and areas of high biodiversity val-
ue outside protected areas
Environmental Compliance Man-agement
GRI 305: Emissions2016
305-1 Direct (Scope 1) GHG emissionsClimate Change Tackling
305-2 Energy indirect (Scope 2) GHG emissionsClimate Change Tackling
305-3 Other indirect (Scope 3) GHG emissionsClimate Change Tackling
305-4 GHG emissions intensityClimate Change Tackling
305-5 Reduction of GHG emissionsClimate Change Tackling
305-7 Nitrogen oxides (NOx ), sulfur oxides (SOx ), and
other signi?cant air emissions
List of Key Performance Indicators
GRI 306: E?uentsand Waste 2020
306-1 Waste generation and signi?cant impacts related
to waste
Pollutant Discharge and WasteTreatment
306-2 Management of signi?cant waste-related impacts
Pollutant Discharge and WasteTreatment
306-3 Waste generated
Pollutant Discharge and WasteTreatment
306-4 Waste diverted from disposal
Pollutant Discharge and WasteTreatmentGRI 308: Supplier en-vironmental assess-ment 2016
308-1 New suppliers that were screened using environ-
mental criteria
List of Key Performance Indicators
308-2 Negative environmental impacts in the supply
chain and actions taken
Supply Chain Security
GRI 401: Employ-ment 2016
401-1 New employee hires and employee turnoverList of Key Performance Indicators
401-2 Bene?ts provided to full-time employees
(excluding temporary or part-time employees)
Talent Attraction and Retention
401-3 Parental leaveEquality, Inclusion and Diversity
GRI 403: Occupa-tional Health andSafety 2018
403-1 Occupational health and safety management sys-
tem
Occupational Health and Safety;Overview of Certi?cates
403-2 Hazard identification, risk assessment, and inci-
dent investigation
Occupational Health and Safety
403-3 Occupational health servicesOccupational Health and Safety
133134
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Benchmark Index to the Guidelines of theStock Exchange
Topics disclosedSections of the Report
Climate change tacklingClimate Change TacklingPollutant dischargePollutant Discharge and Waste Treatment; Usage of Water ResourcesWaste disposalPollutant Discharge and Waste TreatmentEcosystem and biodiversityprotection
Environmental Compliance Management
Environmental compliancemanagement
Environmental Compliance ManagementEnergy usageEnergy UsageUsage of water resourcesUsage of Water ResourcesCircular economyCircular EconomyRural revitalizationRural Revitalization and Social ContributionsContributions to the societyRural Revitalization and Social ContributionsInnovation-drivenInnovation-drive and Intellectual PropertyEthics of science andtechnology
Not involved. The Company's core business does not involve scienti?c re-
search, technology development and other activities in sensitive ?elds such as
life sciences and arti?cial intelligence ethics.
Supply chain securitySupply Chain SecurityEqual treatment to small andmedium-sized enterprises
Not involved. The Company treats small and medium-sized enterprises equal-
ly, and there is no overdue payment to small or medium-sized enterprises.
Safety and quality of productsand services
Safety and Quality of Products and ServicesData security and customerprivacy protection
Data Security and Customer Privacy ProtectionEmployees
Equality, Inclusion and Diversity; Talent Attraction and Retention; Employee
Training and Development; Occupational Health and SafetyDue diligenceRisk ManagementCommunications withstakeholders
Our Sustainability ManagementAnti-commercial bribery andanti-corruption
Business EthicsAnti-unfair competitionBusiness Ethics
GRIStandards
Disclosed itemSections of the Report
GRI 403: Occupa-tional Health andSafety 2018
403-4 Occupational health and safety issues: workerparticipation, consultation, and communication
Occupational Health and Safety403-5 Training on occupational health and safetyOccupational Health and Safety403-6 Promotion of worker healthOccupational Health and Safety403-7 Prevention and mitigation of occupational healthand safety impacts directly linked by business relation-ships
Occupational Health and Safety403-8 Workers covered by an occupational health andsafety management system
Occupational Health and Safety403-9 Work-related injuriesOccupational Health and Safety403-10 Work-related ill healthOccupational Health and SafetyGRI 404: Trainingand Education2016
404-1 Average hours of training per year per employee
Employee Training and Develop-
ment404-2 Programs for upgrading employee skills and tran-sition assistance programs
Employee Training and Develop-
mentGRI 405: Diversityand Equal Oppor-tunity 2016
405-1 Diversity of governance bodies and employees
Operation by the Board of Directors,
the Board of Supervisors and the
general meetings of shareholders;
List of Key Performance IndicatorsGRI 406: Anti-Dis-crimination 2016
406-1 Incidents of discrimination and corrective actionstaken
Equality, Inclusion and Diversity
GRI 407: Freedomof Associationand CollectiveBargaining 2016
407-1 Operational points and suppliers at risk of violat-ing freedom of association and collective bargainingrights
Equality, Inclusion and DiversityGRI 408: ChildLabor 2016
408-1 Operations and suppliers at significant risk ofchild labor incidents
Equality, Inclusion and DiversityGRI 409: Forcedor CompulsoryLabor 2016
409-1 Operations and suppliers at significant risk forincidents of forced or compulsory labor
Equality, Inclusion and DiversityGRI 413: LocalCommunities2016
413-1 Operations with local community engagement,impact assessments, and development programs
Rural Revitalization and Social
Contributions
GRI 414: SupplierSocial Assess-ment 2016
414-1 New suppliers that were screened using socialcriteria
List of Key Performance Indicators414-2 Negative social impacts in the supply chain andactions taken
Supply Chain Security
GRI 416: Custom-er Health andSafety 2016
416-1 Assessment of the health and safety impacts ofproduct and service categories
Safety and Quality of Products and
Services416-2 Incidents of non-compliance concerning thehealth and safety impacts of products and services
Safety and Quality of Products and
ServicesGRI 418: Custom-er Privacy 2016
418-1 Substantiated complaints concerning breachesof customer privacy and losses of customer data
Data Security and Customer Privacy
Protection
135136
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
List of Key Performance Indicators
IndexUnit2021202220232024Environ-mentalProtection
Input
Total investmentin environmentalprotection
RMB 10,0005,510.875,640.236,689.7010,765.80
EnergyConsump-tion
Direct energy con-sumption
Tonnes of stan-
dard coal
331,099.35222,972.54618,559.85334,812.3Natural Gas
Standard cubic
meters
45,420,273.2117,958,913122,408,572134,482,393DieselTonne393268284 300.06Coal water slurryTonne432,334314,168424,676275,920.61
Indirect energyconsumption
Tonnes of stan-dard coal
373,742.97315,849.68590,678.64616,907Purchased elec-tricity
'0000 kWh77,61073,306199,721287,800Medium-pressuresteam
Tonne2,257,989.161,641,952.222,787,760.5711,987,963.87Low-pressuresteam
Tonne250,039.67427,803.00325,068.7263380,380.31PV power genera-tion (self genera-tion for self use
'0000 kWh/1,1371,3342,379
Total energy con-sumption
Tonnes of stan-
dard coal
704,842.25540,220.241,210,877.98951,719.2
Intensity of energyconsumption
Tonne standardcoal/RMB '0000operating revenue
//0.240.16
Con-sumptionof waterresources
Purchased munici-pal water
Tonne5,359,0273,870,98910,627,435 12,561,236.89Desalted waterTonne002,452,7942,333,191GroundwaterTonne002,35653,469Recycled/reusedwater volume
Tonne///126,708
IndexUnit2021202220232024
Emissionsof gaseouspollutants
Wastewater dis-charge intensity
m
15,167,781,31512,115,581,98221,795,515,00922,865,427,592Recovery rate ofwaste gases
%8.0310.5226.26 32ParticlesTonne32.234336193.155492753.82062591.96Non-methanehydrocarbon
Tonne310.468257.075127.673163.54Nitrogen oxidesTonne124.825745216.483935106.11158380.72Sulfur oxideTonne33.950.83353.43498941.24VOCs emissionsTonne309.76721.231,446.83548.94
Emissionsof waterpollutants
Total amountof wastewaterdischarge
Tonne528,164.01,463,014.45,434,078.14,760,944.73Recovery rate ofwastewater
%11.544.058.5416.42Chemical oxygendemand (COD)
Tonne29.66282.933238.711379.97Five-day bod(BOD5)
Tonne11.03614.79545.81941.95Suspendedmatter
Tonne12.20213.32234.57731.45Ammonianitrogen
Tonne0.5222.0436.05531.95Totalphosphorus
Tonne0.1850.5841.8223.88
Wasteemis-sion
Total wastedisposal
Tonne13,691.320,803.5320,873.3521,109.84Total amount ofwastes recycled/reused
Tonne///8,916.94Recovery rate ofwastes
%22.9725.6833.89 42Disposal of haz-ardous wastes
Tonne2,026.23,360.68,848.17 10,934.45Disposal ofhigh-level wastes
Tonne0000
137138
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
IndexUnit2021202220232024
Cus-tomerservices
Customer satisfaction%//92.4091.30Customer complainthandling rate
%100100100100
Sustain-ablesupplychain
Total number of suppli-ers
/3,2266,6998,3079,780
Suppliers of MainlandChina
/3,1026,4308,0099,103HK, Macao, Taiwan andforeign suppliers
/164269298677
Percentage of Suppli-er Code of Conductsigned
%100100100100Percentage of suppli-ers with clauses thatinclude environmentaland labor require-ments*
%100100100100
Total number of newsuppliers
/4903,4331,6081,473Percentage of newsuppliers that werescreened using envi-ronmental criteria*
%100100100100Percentage of newsuppliers that werescreened using socialcriteria
%100100100100Percentage of ourpurchasing specialistspassing sustainableprocurement training
%0100100100
Em-ployeecompo-sition
MalePersons6,6898,2218,54110,447FemalePersons1,8472,1292,0882,63651 years old and abovePersons5647568921,05041~50Persons1,8192,0552,1242,620
IndexUnit2021202220232024
Em-ployeecompo-sition
31~40Persons3,5654,0364,0344,96530 and belowPersons2,5883,5033,5794,448Employees working inMainland China
Persons8,1669,97310,21712,273Employees working inother countries andregions
Persons370377412810PhDPersons106124168212MasterPersons7078951,1361,364BachelorPersons1,4832,5362,8493,249Below bachelor's de-gree
Persons6,2406,7956,4768,258Em-ploy-ment
Total rate of new em-ployees
%211823 25Total turnover rate%18141924
Em-ployeetraining
Total number of trainedemployees
Persons7,4138,68510,65813,083Classi?cation bygender: trained maleemployees
Persons6,0136,9878,56510,458Classi?cation bygender: trained femaleemployees
Persons1,4001,6982,0932,625Total training hours ofemployees
h206,304257,858440,232583,501.8Average training hoursper employee
h28304144.6Classi?cation by gen-der: total training hoursof male employees
h166,079211,776340,459390,486.1Classi?cation by gen-der: total training hoursof female employees
h40,22546,08299,774130,097.6Socialwelfare
Amount of investmentin social public welfare
RMB10,000
1,4861,167635238.30Notes:In 2021, the Company deployed photovoltaic modules, by which power was generated for self-use, but the PV power generation was not sys-tematically analyzed.The PV power generation was included in the total energy consumption.From August 2022, Liaoning Kingfa started trial production and pollutant discharge, so material changes occurred to propane consumption,purchased electricity, emission, and other indicators.The waste emissions excluded waste empty barrels and paint barrels produced by Kingfa Medical, as well as the wastes that the weight is hardto measure.The number of suppliers, which is indicated in the SRM system launched online, excludes the number of the suppliers in the systems notlaunched, and overseas bases.The indicator marked * only indicates the percentage of suppliers of raw materials made in China.
139140
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
UnitAssociations/organizationsPosition Held
The Company
China National Light Industry CouncilVice chairman unitChina Plastic Processing Industry AssociationVice chairman unitPlastic Carbon Neutrality Working Group of the National TechnicalStandardization Committee on Plastics
Director and mem-ber unitTechnical Subcommittee on Modi?ed Plastics of the National Tech-nical Standardization Committee on Plastics
Director and mem-ber unitChina Synthetic Resin Association
Standing councilmember unitABS Branch of China Synthetic Resin AssociationMember unitChina Association of Automobile ManufacturersVice chairman unitChina Household Electrical Appliances AssociationMember unitChina Packaging FederationVice president unitSociety of Competitive Intelligence of China
Ordinary memberunitChina Electronics Standardization Institute (National TechnicalStandardization Committee on National All-or-nothing Relays)
Director and mem-ber unitWorking Group on Standards for Pollution Prevention and Controlof Electrical and Electronic Products, Ministry of Industry and Infor-mation Technology
Member unit withfull authoritiesChina Association for Public CompaniesCouncil memberICT Industry High Quality and Green Development Alliance
Standing councilmember unitChina Industrial Association of Power SourcesMemberDiancherenCouncil member
Main Participatory Domestic Associationsand Organizations
UnitAssociations/organizationsPosition Held
Liaoning Kingfa
Panjin Petroleum and Chemical Industry Association
Executive vice pres-ident-level execu-tive director unitNational Acrylonitrile Production Technology Association GroupMember unitPanjin Precursor Chemicals Industry Self-discipline AssociationMember unit
Ningbo Kingfa
Ningbo New Material Industry AssociationVice chairmanNingbo Petroleum and Chemical Industry AssociationVice presidentNingbo Beicang District Enterprise Federation (Entrepreneur Associ-ation)
Executive chair-manNingbo Plastics Industry AssociationVice president
GuangdongKingfa
Latex Products of Rubber and Rubber Products
Director and mem-ber unitGuangdong Medical Devices Management AcademySupervisory unitChina Nonwovens & Industrial Textiles AssociationMember unitChina Association for Medical Devices IndustryMember unitQingyuan Pharmaceutical SocietyVice chairman unitGuangdong Association for Medical Devices Industry
Standing councilmember unitGuangdong Food & Drug Technology Association for Evaluation &Certi?cation
Council member
Kingfa Environ-mental
Professional Committee on Recycling of Plastics, China Plastic Pro-cessing Industry Association
Director unitRecycled PCR Self-discipline OrganizationInitiatorSustainability Working Group on Food Contact MaterialsInitiatorGreen Recycle Plastic Supply Chain Group (GRPG)Member unit
141142
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Overview of Certi?cates
System certi?cation
TheCompa-nyShang-haiKingfa
JiangsuKingfa
WuhanKingfa
TianjinKingfa
Cheng-duKingfa
KingfaEnvi-ron-mental
JiangsuKingfaRecy-cling
Qin-gyuanMeijin
ZhuhaiVantequeSpecialtyEngineer-ing Plastics
KingfaBioma-terials
Quality
ISO 9001???????? ??IATF 16949?????? ? GMP ISO 13485 QSR 820
MDSAP
MDR 5GONOGO ? EnvironmentISO 14001???????? ??Occupationalhealth andsafety
ISO 45001???????? ??Hazardous sub-stances
QC080000? ? ? LaboratoryISO/IEC 17025?? Sustainability
ISCC PLUS ? OK RECYCLED ?? GRS ?? ?? Social respon-sibility
CSR(SA80000/RBA/SMETA/IWAY)
?? ?? MeasurementISO 10012? Intellectual
property
GB/T 29490? ??
Brand certi?ca-
tion
GB/T 27925?
EnergyISO 50001 ??
Other
AEO? ?
BRC (packagingmaterials)
?
ISO 28000 (SupplyChain Security)
?
GSP (Quality Man-agement Systemfor Medical DeviceOperation)
GB/T23001 Integra-tion of informatiza-tion and industrial-ization managementsystems
?
System certi?cation
Guang-
dongKingfaCom-posites
Guang-dongKingfa
NingboKingfa
Lia-oningKingfaKingfa(USA)
Kingfa
(Eu-rope)
ChakanFactoryof Kingfa
(India)
PondiFactoryof Kingfa
(India)
ManesarFactoryof Kingfa(India)Kingfa(Viet-nam)Num-ber ofcerti?edcompa-niesNumberof ap-plicablecompa-nies
Quality
ISO 9001???? ?????1921IATF 16949? ????? 1316GMP ? 12ISO 13485 ? ? 23QSR 820 ? 12MDSAP ? 12MDR ? 115GONOGO ?? 34Environ-ment
ISO 14001???? ??? 1721Occupa-tionalhealth andsafety
ISO 45001 ??? ?? 1521Hazardoussubstances
QC080000 321
LaboratoryISO/IEC 17025 ? ? 421
Sustain-
ability
ISCC PLUS 12
OK RECYCLED 22
GRS ? 57
Social re-sponsibility
CSR(SA80000/RBA/SMETA/IWAY)
? ? 621
Measure-
ment
ISO 10012 121
Intellectual
property
GB/T 29490 315
Brand certi-
?cation
GB/T 27925 115
EnergyISO 50001 221
Other
AEO ?? 415
BRC (packagingmaterials)
? 24
ISO 28000 (SupplyChain Security)
?? 321
GSP (Quality Man-agement Systemfor Medical DeviceOperation)
? 12
GB/T23001 Integra-tion of informatiza-tion and industrial-ization managementsystems
143144
Environmental, Social and Governance (ESG) Report 2024Kingfa Sci. & Tech. Co., Ltd.IntroductionResponsibility for GovernanceEnvironmental ResponsibilitiesSocial ResponsibilitiesAnnex
Reader's Feedback
Dear Reader,Thank you for reading the "2024 Environmental, Social and Corporate Governance (ESG) Report of the Company". To pro-vide you and other stakeholders with more professional and valuable corporate ESG information, please answer our relat-ed questions in this feedback form to help us further improve our future ESG work.
1. For the Company, what's your identity?
□ Employee □ Customer □ Supplier □ Regulatory Authority □ Media
□ Others (please indicate)
2. What is your overall evaluation of this Report?
□ Very good □ Relatively good □ Medium □ Relatively poor □ Very poor
3. What do you think of the outline of this Report?
□ Very reasonable □ Relatively reasonable □ Medium □ Relatively poor □ Very poor
4. What do you think of the layout design and presentation form of this Report?
□ Very good □ Relatively good □ Medium □ Relatively poor □ Very poor
5. What do you think of the Company's overall performance in the environmental issues?
□ Very good □ Relatively good □ Medium □ Relatively poor □ Very poor
6. What do you think of the Company's overall performance in the social issues?
□ Very good □ Relatively good □ Medium □ Relatively poor □ Very poor
7. What do you think of the Company's overall performance in the governance issues?
□ Very good □ Relatively good □ Medium □ Relatively poor □ Very poor
Choice Questions (please tick the appropriate box)
Open-ended Question:
What opinions and suggestions do you have regarding the Company's ESG work?
Editor-in-chief: Chen PingxuConsultant: Li JianjunDeputy Editor: Dai YaoshanEditors in Charge: Tang Hailan and Kuang SirongMembers of Editorial Board (in no particular order): Huang Hesheng, Li Peng, Fu Jiangying, Wang Zhonglin, Ye Nan-
biao, Guan Xunning, Rao Xiang, Lei Yuewen, Xu Xianjun, Peng Zhi, Zhang Chao, Peng Zhongquan, Wu Jun, Chen Yan'an,Cheng Qing, Zheng Hefen, Lu Yuanqiu, Liao Mengyuan, Qi Wenliang, Gu Junyong, Zou Junqin, Wu Jiechun, WangZongke, Cai Hongxiang, Sun Yajie, Yao Bing, Jin Lixiao, Hu Qisong, Yang Yong, Zhu Xiao, Liu Jin, Wang Tingting, Lin Shi-song, Hu Jinni, Wang Yanli, Qin Chunyan, Shen Faqiang, Su Limei, Li Xianyu, Zhou Zhuang, Guo Pan, Zhou Shengjia, LinHaibin, Liang Wenzhen, Xie Zhenpeng, Li Baosen, Jin Min, Huang Hui, Jiang Hongmei, Chen Xie, Li Yihang, Nie Kai, WeiZhichi, Ning Jindi, Wang Shuting, Li Peng, Deng Zhendong, Huang Haibin, Huang Shifang, Zheng Wen, Xie Jiang, ZhangYile, Li Guoming, Cao Liying, Lou Zhihe, Zhou Xiaojiao, Ma Xintai, Guo Shijun, Zhou Fengcan, Lin Ziyu
DisclaimerThe information contained herein does not constitute any investment advice, and investors shall not use such information as asubstitute for their independent judgment or make decisions based solely on such information. The Company does not accept anyresponsibility for losses caused or possibly caused by the use of the information contained herein. The information published bythe Company is true and accurate. In case of any inconsistency with the statutory disclosure documents, the statutory disclosuredocuments shall prevail.If this report constitutes forward-looking statements, it shall not restrict the Company's future actions. The Company has no obli-gation and does not undertake to revise the forward-looking statements (if any) contained herein.The copyright and the right of ?nal interpretation shall be owned by the Company.