2024Sustainability Repo Lanpec Techonologics Limited

0931-7639988 / 021-51219888 No. 8, Lanke Road, Anning District， Lanzhou City, Gansu Province No. 505, Rongchang Road, Lüxiang Town， Jinshan District, Shanghai

Repo Opening

About the Repo3

The Letter from the Chairman4About LANPEC5

Sustainability (ESG)ManagementESG Governance System9

Stakeholder Communication10Materiality Assessment Process11

Corporate Governanceand Sound Operations

Corporate Governance Framework13

Business Ethics and Anti-CorruptionCompliance Framework

Compliance Operations and Risk Control19Information Security and EmergencyProtection

Climate Action andEnvironmental Protection

Climate Risk Response21

Environmental Management System24Waste Treatment26Resource Eciency & Energy Conseation27Biodiversity Protection29

Technological Innovationand Product Seices

Technological Innovation31

Product Quality35Customer Seice39

Employee Developmentand Workplace SafetyEmployee Development47

Health & Safety55

Appendix

Quantitative Peormance Dashboard59

Repo Index62

Panerships andSocial Responsibility

Responsible Supply Chain40

Indust Collaboration43Social Welfare & Rural Revitalization44

Sustainability Repo 01|02

About the Repo

Repo Opening

This repo is the second Sustainability Repo released by Lanpec Technologies Limited (hereinafter referred to as"LANPEC", "the Company" or "we"). It elaborates on the Company's sustainability philosophy and policies, as well as itseos in environmental protection, social responsibility, and corporate governance in 2024, addressing the expecta-tions and concerns of stakeholders.

Repo Information Disclosure

The repo covers the period from Janua 1, 2024, to December 31, 2024. To maintain information continuity, ceaincontent has been retrospectively reviewed and extended. All information is sourced from internal company data andpublic records.

Repoing Period

This repo encompasses all operational activities of Lanpec Technologies Limited and its member enterprises, aligningwith the scope disclosed in the Company’s annual repo.Scope of the Organization

The GRI Universal Standards (2021 version) issued by the Global Sustainability Standards Board (GSSB), the ShanghaiStock Exchange Listed Company Self-Regulato Guidelines No. 14 – Sustainability Repoing (Trial) and the ShanghaiStock Exchange Listed Company Self-Regulato Guide No. 4 – Sustainability Repoing Preparation issued by theShanghai Stock Exchange, the Recommendations Repo of the Task Force on Climate-related Financial Disclosures(TCFD) issued by the Task Force on Climate-related Financial Disclosures (TCFD), and the 17 Sustainable DevelopmentGoals (SDGs) of the United Nations.

Reference Standards

This repo is available in digital format for your reference. You may access it through the Company's ocial website(www.lanpec.com) or the Shanghai Stock Exchange website (www.sse.com.cn).Access Methods

The Letter from the Chairman

Greetings! It is my great honor to share with you LANPEC's explorations and practices on our sustainable developmentjourney.In the eld of green innovation, the Company actively addresses the challenges posed by climate change. In 2024, wecontinued to increase investment in clean energy equipment R&D, driving the green and low-carbon transformation ofour core business. For example, in major projects such as the Molten Salt Thermal Storage Coupled with Million-kW UnitDemonstration Project and the Akesai Molten Salt Storage Tank EPC Project, our advanced technologies provided strongsuppo for improving energy storage and utilization eciency. Throughout our production operations, we continuouslyoptimize processes, actively promote water and electricity conseation technologies, achieve energy savings andconsumption reduction, and lower the company's carbon emissions. Simultaneously, we vigorously develop circulareconomy practices by establishing relevant management systems to increase waste recycling and reuse volumes, therebyreducing the environmental impact of industrial waste.Product quality is our lifeline, while product culture gives our products soul. LANPEC consistently adheres to the philoso-phy of "technology innovation as the guide, market demand as the orientation, and precision manufacturing as thefoundation," integrating quality improvement throughout the entire process of product R&D, production, and seice. Westrictly comply with domestic and international product quality and safety standards, establishing a comprehensivequality management system and quality assessment mechanism. In 2024, our products demonstrated excellent qualitypeormance, achieving a 100% pass rate for nished goods. We place high impoance on technological innovation,continuously increasing R&D investment. With multiple specialized research depaments and platforms, we maintain ahigh propoion of R&D personnel. In 2024, we led 25 patent applications and were granted 40 patents, including 20invention patents. These innovations have not only enhanced our products' technological value and competitiveness butalso laid a solid foundation for sustainable development.Sound corporate governance ensures stable enterprise development. We have established a comprehensive governancestructure where the Board of Directors and Supeiso Board peorm their respective duties, with independentdirectors fullling their roles eectively. In 2024, we optimized our organizational structure to improve operationaleciency. Regarding business ethics and anti-corruption, we maintain a "zero-tolerance" stance through enhancedintegrity education, anti-corruption training, and strengthened supply chain anti-corruption management, creating anupright and positive work environment. We emphasize compliance operations and risk control, establishing a compre-hensive compliance management system to regularly identify and assess risks, ensuring all operations comply with legaland regulato requirements.As a responsible enterprise, we actively fulll social responsibilities. In supply chain management, we are committed tobuilding a sustainable supply chain, implementing full-cycle supplier management, and prioritizing suppliers with EHSmanagement systems to promote sustainability throughout the supply chain. In social welfare and rural revitalization, weactively give back to society through donations to Lüxiang Town in Shanghai's Jinshan District and Sinomach's designatedpovey alleviation areas, suppoing povey relief and infrastructure construction. We also organize employee volunteeractivities, suppo education in remote areas, and donate electric sanitation vehicles to improve rural environmentalconditions.Moving forward, we will continue to uphold green development principles, intensify innovation eos, enhance productquality and seice standards, strengthen corporate governance, and actively fulll social responsibilities. We arecommitted to achieving harmonious coexistence between enterprise, society and environment, contributing to buildinga beautiful China with "lucid waters and lush mountains”!Thank you!

“

Sustainability Repo 03|04

About LANPEC

Lanpec Technologies Limited (hereinafter referred to as "LANPEC") is a listed company with central enterprise controllingshares, restructured from Lanzhou Petroleum Machine Research Institute (LPMRI) - a national rst-class researchinstitution established in 1960.As a core member enterprise of Sinomach, LANPEC stands as a pioneer in China's petroleum and petrochemical equip-ment indust, paicularly in oshore and dese oileld development. In 2011, LANPEC (Stock Code: 601798) entered thecapital market and achieved full listing on the Shanghai Stock Exchange. By the end of 2024, the Company had obtained28 critical ceications from relevant national authorities, including design and manufacturing licenses for special equip-ment (pressure vessels and piping systems) of A1, A2, and A3 classes, ASME manufacturing ceication, as well as U andU2 stamp ceications. With 1,013 employees, the Company sees as a Tier-1 network supplier for CNPC, Sinopec, andCNOOC. Our products have been expoed to dozens of countries and regions across Asia, Africa, and South America.

Committed to independent R&D of core technologies in petroleum, petrochemical andnew energy equipment, driving national energy equipment security and technologicaladvancement.

Company Prole

The Company's production facilities are located in two key regions - Lanzhou and Shanghai, with a total site area of approximately

41.3 hectares and production oor space covering 200,000 square meters. The facilities feature a maximum lifting capacity of 500

tons.

The facility occupies approximately 7.3 hectares of land, with nearly 40,000 square meters of produc-tion area. It holds the A1-grade pressure vessel manufacturing ceication and primarily producesvarious high-end petrochemical products including high-eciency energy-saving heat exchangers,advanced tower vessels, and LNG spherical tanks, with a maximum lifting capacity of 200 metric tons.

Business Pofolio

Lanzhou Base

The facility spans approximately 510 mu (34 hectares) of land, with about 110,000 square meters ofworkshop area. Holding the A1-grade pressure vessel manufacturing ceication, it primarily under-takes production of high-pressure hydrogenation equipment, feilizer production devices andplate-type series products, featuring a maximum lifting capacity of 500 metric tons.

Shanghai Base

TotalEmployees

1,013

R&DPersonnel

AuthorizedPatents

Paicipation in NationalStandard Development/Revision

Paicipation in NationalStandard Development/Revision

CoreFunctions

StrategicPositioning

Guided by technological innovation, market demand, and precision manufacturing, wefocus on two core sectors—petroleum & petrochemical equipment and new energyequipment—delivering high-quality system solutions across products, projects, andseices to become a specialized, sophisticated, and innovative R&D-driven enterprise.

Sustainability Repo 05|06

Product ModelMajor Honors —— Credit Ratings

QuantData

AA

Lanpec Technologies LimitedNational Technology Innovation Demonstration Enterprise

Lanpec Technologies LimitedNational Intellectual Propey Demonstration

Enterprises and Advantageous Enterprise

Lanpec Technologies LimitedSpecialized, Fined, Peculiar and Innovation “Little Giants” Enterprise

Lanpec Technologies Limited

National Green Facto

Lanpec Technologies LimitedLanpec Technologies Limited (Shanghai)Lanzhou Petrochemical Equipment Inspection Institute of Mechanical Indust Co., Ltd.

High-Tech Enterprise

Wind

BBB

IIGFA+

CCXIBBB

Oil and Gas Resources (931248.CSI)

Wind Strategic EmergingIndustries Index (866400.WI)Specialized, Fined, Peculiar and InnovativeLittle Giants Theme Index（8841451.WI）

CRHC Central SOEsComposite Index (932004.CSI)

Passive Index

Heat Exchange Technology

Other Specialized Technologies forPetroleum & Petrochemical Applications

Sustainability Repo 07|08

Heat ExchangersAir Coolers

Separation Technology EquipmentSpherical Tanks & Pressure Vessel Technologies

Petroleum Drilling & Production Technology Equipment

Sustainability (ESG) Management

LANPEC takes concrete actions to suppo the UN 2030 Agenda for Sustainable Development, integrating Environmental, Social,and Governance (ESG) principles into all aspects of corporate operations to ensure the eective implementation of the company'ssustainable development philosophy.During the repoing period, to establish and improve the ESG management system of LANPEC and comprehensively enhance theCompany's ESG peormance capabilities, the Company newly established a Strategy and Sustainable Development Committee.This committee is responsible for researching and providing recommendations on environmental, social, and governance matters,while collaborating with the company's environmental functions, supply chain management, and human resources teams tostrengthen sustainability capacity-building. Additionally, the company regularly engages external expe advisors to improve itsESG data indicator system, deepen practical ESG implementation, and enhance ESG repo preparation.In 2024, the Company actively studied the latest sustainable development policies and, guided by the nancial materiality princi-ple, aligned them with its business operations to upgrade its sustainability repoing framework. Adopting a dual materialityperspective, the company conducted in-depth analyses of key ESG issues in relation to its business development, fully integratingESG principles into management processes.

ESG Governance System

Board ofDirectors

AuditCommittee

Remuneration andEvaluation Committee

NominationCommittee

Strategy and SustainableDevelopment Committee

ESG Working Group

LANPEC's social responsibility stakeholders include shareholders/investors, customers, suppliers, employees, government/regu-lators, communities, and media, among others.Stakeholder Communication

LANPEC’s ResponseCompliance OperationsEnhanced CommunicationProduct Safety ImprovementZero-Tolerance PolicyEnergy Structure OptimizationProduct Safety EnhancementR&D in Green TechnologiesGreen Procurement

ImplementationEnergy Structure

OptimizationEmission ReductionGreen Oce PracticesStrengthened SCMCircular Economy PracticesSafeguarded Employee

BenetsEnhanced Training Programs

Innovation Motivation

MechanismsIncreased Dedicated Funding

Emission ReductionCompliance ManagementStrict Anti-Bribe Measures

Privacy Protection

Energy Conseation

High-Eciency/Low-Emission OperationsCarbon-Neutral StrategyWaste Recycling

ManagementEcological Restoration

Projects

Key Topics

Corporate GovernanceInformation DisclosureProduct/Seice Safety & QualityAnti-Commercial Bribe & Anti-Corruption

Energy EciencyProduct/Seice Safety & Quality

Green Technology Innovation

Green OperationsEnergy ConsumptionPollutant Emissions

Green OperationsSupply Chain Security

Waste ManagementEmployee Rights Protection

Training Investment

Innovation IncentivesSpecial Project Investment

Pollutant EmissionsEnvironmental ComplianceAnti-Commercial Bribe & Anti-Corruption

Information Security

Energy EciencyEnergy EciencyGreen OperationsClimate Change Response

Waste Treatment

Stakeholder

Categories

Shareholders/Investors

Customers

Suppliers

Employees

Government/Regulators

Community & Media

Communication

Channels

General Meetingof Shareholders

CompanyAnnouncementsInvestor HotlineInvestor Roadshows

Customer HotlineEmailCustomer MeetingsCustomer Sueys

EmailConference Calls

On-site VisitsVideo ConferencesSupplier Conferences

Sta MeetingsDepamental MeetingsE-Newsletters/Internal Media

Annual Employee Sueys

Government Project

ApplicationsRegulato ReposPolicy Consultations

Tax RepoingEnvironmental Safety

InspectionsSocial Media Updates

Press ConferencesCommunity EventsEnvironmental Repos

Biodiversity InitiativesEcosystem and Biodiversity ProtectionOnline Q&A Sessions

Sustainability Repo 09|10

ESG

Double Materiality Analysis sees as the core methodology for the Company in compiling its annual sustainability repo,formulating long-term ESG strategic objectives, and engaging with stakeholders. LANPEC conducts this analysis from twodimensions—nancial materiality and impact materiality—referencing frameworks including the Shanghai Stock ExchangeListed Company Self-Regulato Guidelines No. 14 – Sustainability Repoing (Trial), Shanghai Stock Exchange Listed CompanySelf-Regulato Guide No. 4 – Sustainability Repo Preparation, the United Nations Sustainable Development Goals (SDGs),GRI Universal Standards 2021, ISO 26000, and SASB topics, alongside other sustainability-related standards. The Companyalso incorporates ESG rating systems from seice providers such as MSCI, CSI, and Wind to establish its ESG topic invento.Fuhermore, LANPEC identies and consolidates both universal and indust-specic topics applicable to its operations byconsidering macro-level policies in its operational regions, sector-specic policies, as well as the materiality topic selectionmethods and prioritization outcomes of peer companies.

Materiality Assessment Process

LANPEC’s Materiality Assessment Results

Signicance in Economic, Social, and Environmental

Not ImpoantVe Impoant

Ve Impoant

Signicance in Corporate Financial PeormanceEnvironmentalSocial Governance

Topic Categorization

EnvironmentalEnvironmentalEnvironmental

SocialSocialSocialEnvironmentalEnvironmental

SocialGovernance

SocialEnvironmentalEnvironmentalEnvironmentalEnvironmentalEnvironmentalEnvironmentalEnvironmental

GovernanceGovernance

Social

Social

Social

Social

Social

Social

Material Topics

Energy UtilizationPollutant EmissionsGreen Technology Innovation

Supply Chain SecurityProduct & Seice Safety & Quality

EmployeesGreen OperationsEnvironmental Compliance Management

Customer SeiceAnti-Bribe & Anti-Corruption

Data Security & Customer Privacy Protection

Green Products & SeicesClimate Change Response

Circular EconomyWaste ManagementHazardous SubstanceEmissions & ManagementWater Resource UtilizationEcosystem & Biodiversity Protection

Stakeholder CommunicationAnti-Unfair CompetitionEqual Treatment of SMEsEmployee Development & Training

Innovation-Driven Development

Technology Ethics

Talent AttractionSocial Contribution

Quadrant

1 Core Issues1 Core Issues1 Core Issues1 Core Issues1 Core Issues1 Core Issues2 Financially Material Issues2 Financially Material Issues2 Financially Material Issues2 Financially Material Issues2 Financially Material Issues2 Financially Material Issues3 Impact Material Issues3 Impact Material Issues3 Impact Material Issues3 Impact Material Issues3 Impact Material Issues3 Impact Material Issues3 Impact Material Issues4 General Issues4 General Issues4 General Issues4 General Issues4 General Issues4 General Issues4 General Issues

Composite Ranking

GovernanceDue Diligence4 General Issues27

SocialRural Revitalization4 General Issues28

Sustainability Repo 11|12

LANPEC has established a comprehensive governance framework, with the Board of Directors and Supeiso Committeepeorming their respective duties eectively. Independent directors fully exercise their oversight functions to ensure soundstrategic decision-making. Operationally, the Company has strengthened its internal control systems, standardizing nancialapprovals and project management processes to guarantee optimal resource allocation. We place strong emphasis on the timeli-ness and accuracy of information disclosure, maintaining proactive communication with stakeholders. This governance approachenables sustainable development in full compliance with regulations, achieving synergistic progress across economic, environ-mental, and social dimensions.The Board of Directors of Lanke High-Tech consistently dedicates itself to safeguarding the legitimate rights and interests of thecompany and all shareholders. It proactively fullls its management responsibilities, continuously enhances corporate governancecapabilities, and strengthens the independence and diversity of the board composition. The Board actively engages in investordialogues and paicipates in investor relations management, while standardizing information disclosure practices.

Alignment with Sustainable Development Goals (SDGs)

Aicles of AssociationRules of Procedure for Shareholders' MeetingsRules of Procedure for Board Meetings

Rules of Procedure forSupeiso Board MeetingsWorking Rules for the Audit Committee

Working Rules for the Remuneration

and Evaluation CommitteeNomination Committee Working RulesStrategy Committee Working RulesIndependent Directors Work Regulations

Independent Directors Special Meeting

Work RegulationsLANPEC ESG Management SystemBoard Secreta Work RegulationsLANPEC Connected Transactions

Management Regulations

Insider Information Insider Registration SystemLANPEC External Directors and Supeisors

Dispatch Management Regulations

LANPEC Subsidia (Equity-holding)

Company Management Regulations

Corporate Governance Framework

The Company strictly complies with the requirements of the Company Law, Securities Law, Corporate Governance Guidelines forListed Companies, Shanghai Stock Exchange Listing Rules and other laws, regulations and normative documents to improve thegovernance mechanism and establish a reasonable and ecient corporate governance structure, so as to ensure standardizedoperation of the Company, maintain the status of the general meeting of shareholders as the supreme authority of the Company,give full play to the functions and roles of the board of directors, the supeiso board and various special committees under theboard of directors, clarify the rights and obligations of shareholders, directors, supeisors and senior management personnel,and ensure that shareholders fully exercise their legitimate rights.In order to promote the high-quality development of the Company, better advance the realization of the Company's strategicplanning objectives, clarify the division of responsibilities, improve the eciency of the Company's operation and management,and in light of the Company's strategic development plan and actual operation and development situation, we has adjusted itsorganizational structure in 2024 in accordance with the relevant laws, regulations, normative documents and the provisions of theAicles of Association of the Company.

Governance Structure

The Company has established detailed provisions in the LANPEC Board Meeting Procedures governing the convening ofmeetings, voting procedures, and proposal deliberations to ensure all board meetings are conducted in compliance and with higheciency. In 2024, all directors fullled their duties with diligence, achieving a 100% attendance rate at board meetings.

Governance Capacity Optimization Framework

Key Peormance Indicators (KPIs)

Corporate Governanceand Sound Operations

3 General Meetings of Shareholders

7Board Meetings6 Supeiso Board

Meetings

2024

Supeiso Board

General Meetingof Shareholders

Strategy & SustainableDevelopment Committee

NominationCommittee

Remuneration & Evaluation

Committee

Audit Committee

Board of Directors

ExecutiveManagement

Sustainability Repo 13|14

Advancing Diversity and Independence inCorporate Governance

The Company's directors are elected through shareholder resolutions at general meetings, with each board seing a three-yearterm. LANPEC has institutionalized director nomination protocols and procedures in its governing documents including theAicles of Association. As of December 2024, the board comprises nine directors, three of whom (33%) meet independencecriteria. The current board includes one female director. The independent directors possess complementa expeise: oneceied accounting professional, one legal aairs specialist, and one indust veteran, ensuring comprehensive oversight ofcorporate matters. To uphold governance transparency, the Company systematically discloses directors' external aliations, withcomplete details documented in the 2024 Annual Repo.

Information Disclosure and Market Value Management

The Company strictly adheres to the relevant regulations of the China Securities Regulato Commission (CSRC) and the ShanghaiStock Exchange (SSE), upholding the principles of "transparency, fairness, and impaiality" in information disclosure. We fulll ourdisclosure obligations with authenticity, accuracy, completeness, and timeliness. In 2024, the Company successfully completed thepreparation of high-quality periodic repos, including the 2023 Annual Repo, the 2024 First Quaer Repo, the Interim Repo,and the Third Quaer Repo. A total of 143 announcement documents were disclosed without any errors, and no regulatoinquiries were received.The Company places great emphasis on strengthening communication with shareholders and investors, diligently safeguardingthe legitimate rights and interests of investors, paicularly public investors, and fostering long-term, stable, and constructiverelationships between the Company and its investors. The Company has designated dedicated personnel to manage and maintainits ocial website, providing investors with a platform to access the latest corporate developments, periodic repos, and tempo-ra announcements on signicant matters. Additionally, the Company has assigned specialized sta to handle investor inquiriesvia telephone, fax, email, and the SSE E-Interaction platform. Within the bounds of the Company's information disclosure policies,we conscientiously address investor questions, consider their feedback, and diligently facilitate investor research visits to thelisted company.

Throughout 2024, the Company organized nine on-site investor research sessions, during which paicipants gainedinsights into the Company's shareholder structure, development strategies, and reform initiatives. These engage-ments provided investors with comprehensive updates on the Company's operational peormance and future growthplans, while facilitating in-depth discussions and clarications on market-focused topics. Such interactions signi-cantly strengthened investor condence and suppo, while eectively enhancing the Company's market reputationand brand equity. Concurrently, the Company proactively leveraged social media platforms and nancial poals todisseminate timely updates and material information, maintaining close communication with investors. These eosfuher elevated the Company's transparency and credibility within the capital markets.

Standardized Remuneration Management System

The Remuneration and Evaluation Committee of the Company is mandated to formulate and review compensation policies andproposals for directors and senior management, taking into comprehensive consideration the corporate guidelines and objectivesestablished by the Board of Directors, prevailing compensation benchmarks among peer companies, as well as the specicresponsibilities and individual peormance of the Company's directors and senior executives. The Committee provides formalrecommendations regarding peormance evaluation protocols while exercising stringent oversight over compensation systemimplementation, with explicit provisions prohibiting any director or their aliated paies from paicipating in decisions peain-ing to their own remuneration.Regarding independent director compensation, the Company provides an annual independent director allowance standardizedat RMB 120,000 (pre-tax). External directors and supeisors who do not hold concurrent positions within the Company areexpressly excluded from receiving additional director or supeisor remuneration.Investor Rights Protection and Conict AvoidanceThe Company places strong emphasis on the reasonable opinions and demands of investors, paicularly minority shareholders.In accordance with the Company Law, Securities Law, and the Shanghai Stock Exchange Self-Regulato Guideline No. 1—Standardized Operations regarding prot distribution and cash dividend policies, the Company has clearly dened the conditionsand ratios for prot distribution under dierent allocation forms in its Aicles of Association. This standardizes the decision-mak-ing procedures and mechanisms for prot distribution, which helps better protect the interests of investors, especially minorityshareholders.The Company attaches great impoance to the interests of minority shareholders and has established a comprehensive policysystem to avoid and prevent conicts of interest. During the repoing period, adhering to the principles of fairness, transparency,and impaiality, the Company formulated detailed rules for signing related-pay transaction agreements based on market fairpricing and disclosed the necessity and impact of related-pay transactions conducted within the year. Fuhermore, the Compa-ny strictly complied with the Aicles of Association and other relevant laws and regulations, conducting thorough process reviewsfor major matters such as related-pay transactions, external guarantees, and external investments.

LANPEC Investor Engagement Activities 2024

Key Peormance Indicators (KPIs)

33%Independent Director Ratio

100%Audit Committee Independence Ratio

2024

Key Peormance Indicators (KPIs)

3 Online Earnings Brieng Sessions

6 Analyst Meetings9 InstitutionalInvestor Meetings

2024

Sustainability Repo 15|16

Special Topics I: Improper Acceptance/Gifting of

Valuable Specialty Products and Moneta Gifts

Special Topics II:

Improper Dining and EnteainmentSpecial Topics III:

Improper Reception Practices

Special Topics IV:

Improper Handling of Wedding/Funeral Celebrations

Special Topics VII:

Improper Allocation/Use of Ocial Vehicles

Special Topics VIII:

Improper Allocation/Use of Oce Space

Special Topics IX:

Improper Prot-Making Activities

Special Topics X:

Improper Overseas TravelSpecial Topics XI:

Dereliction of Duty and Inaction

Special Topics XII:

Bureaucratic Formalism Burdening Grassroots UnitsSpecial Topics XIII:

Failure in Implementing Prima Responsibility for Conduct Building

Business Ethics and Anti-CorruptionCompliance Framework

LANPEC maintains a "zero-tolerance" stance against corruption, continuously enhancing its anti-corruption compliance frame-work and supeiso procedures. By enhancing oversight and accountability in operational processes, the Company has estab-lished an eective monitoring mechanism that cultivates a robust and trustwohy operational environment.

Anti-Corruption Employee Training Program

LANPEC prioritizes integrity culture training for all depaments and employees, achieving 100% coverage of senior management,middle-level depament heads and deputies, as well as frontline personnel in critical functions such as nancing, logisticsprocurement, administrative procurement, and supplier collaboration. The Company paicularly focuses on new hires to establisha comprehensive integrity training and awareness management cycle. In 2024, LANPEC conducted two onboarding trainingsessions for all new employees covering corporate legal compliance and integrity building systems, achieving 100% paicipationrate among new sta.

Governance of Business Ethics

In 2024, the Pay Committee and Discipline Inspection Commission of LANPEC strengthened integrity education and fostered aclean business environment through executing Pay Conduct and Integrity Responsibility Agreements, updating cadres' integrityrecords with signed Integrity Pledge Letters, establishing Integrity Cooperation Agreement with qualied suppliers, and distribut-ing SINOMACH's Positive/Negative Checklist for Implementing the Central Eight-Point Directive to all employees, therebysafeguarding the Company's high-quality development. Under the Board's leadership, the Company advanced anti-corruptioneos in compliance with superior discipline inspection requirements, with the Discipline Inspection Oce disseminating theSINOMACH's Positive/Negative Checklist to eve employee across all depaments and mandating organized training sessions forstrict implementation.

Supply Chain Anti-Corruption Compliance System

LANPEC enhances anti-corruption management in supplier relationships. The Company has established a joint anti-corruptionmechanism with suppliers and contractors. In accordance with the requirements of the Corporate Discipline Inspection Commis-sion, all depaments and subsidiaries must sign a Integrity Cooperation Agreement alongside procurement contracts with suppli-ers and contractors. This initiative aims to foster a fair and transparent transaction environment, prevent and resist commercialbribe, and guard against disciplina violations and illegal activities.

Key Peormance Indicators (KPIs)

100%

Anti-Corruption TrainingCoverage Rate for Directors

100%Anti-Corruption TrainingCoverage Rate by Depament

100% Employee Anti-Corruption Training Coverage Rate

2024

Key Peormance Indicators (KPIs)

100%The Signing Rate of the Clean Cooperation Agreement

2024

On May 7, 2024, LANPEC held a warning education conference, during whichCao Jianhong, Secreta of the Discipline Inspection Commission of SUMECGroup Corporation (SUMEC), delivered a keynote speech. He thoroughlyanalyzed the severe damage caused by relevant cases to enterprises andemphasized the critical impoance of strengthening supeision over leadingPay-member ocials, paicularly those in top leadership positions("rst-in-command"). His presentation seed as an impactful warningeducation lesson for all company cadres. Approximately 90 attendees paici-pated in the conference, including members of LANPEC leadership team anddeputy managers or above, joining via the main venue and the Lanzhoubranch venue.

LANPEC 2024 Anti-Corruption Internal Training Series

The Company's Discipline Inspection Commission conducted timely integrityinteiews for all newly appointed and transferred cadres throughout 2024,strictly implementing the "mandato inteiew upon promotion" principle.Key activities included: the rst collective integrity talk session held on March27 for 14 newly promoted executives, followed by the second session on July25 involving 25 promoted cadres. These systematic integrity educationinitiatives signicantly enhanced Pay members' and cadres' understandingof clean governance impoance, strengthened professional ethicsawareness, and improved anti-corruption capabilities.

Sustainability Repo 17|18

Special Topics V:

Improper Issuance of Allowances or Benets

Special Topics VI:

Improper Business Travel

Compliance Operations and Risk ControlLANPEC is committed to integrating compliance management throughout all aspects of business operations and management,aiming to empower business development through compliance governance. Simultaneously, the Company continuously optimizesand improves its compliance systems based on actual business conditions, ensuring that both corporate and employee conductadhere to all applicable laws, regulations, indust standards, and internal corporate policies.

Compliance Governance SystemTo fuher standardize internal audit practices, enhance audit quality, and protect investors' legitimate rights and interests, theCompany has established a comprehensive compliance management system covering corporate governance, market transac-tions, labor laws, and other areas in accordance with the Supeision Law of the People's Republic of China, the Audit Law of thePeople's Republic of China, and the Provisions of the National Audit Oce on Internal Audit Work.In daily operations, the Company maintains a three-line defense mechanism to ensure business compliance, including thebusiness depament, the compliance depament and the senior management team.The Company designates the Legal Depament as the lead compliance unit, which regularly evaluates and updates compliancedocuments to ensure alignment with the latest laws, regulations and indust developments. All levels of management andemployees actively paicipate in and implement these measures to ensure eective compliance management. The Companycontinues to improve its business compliance review mechanisms and has successively issued the LANPEC Compliance Manage-ment Measures, LANPEC Legal Dispute Case Management Measures, LANPEC Major Legal Dispute Case Management Measures,LANPEC Contract Management Measures, LANPEC Rules and Regulations Management Measures, LANPEC Fund ManagementMeasures, LANPEC Procurement Management Measures, LANPEC Supplier Management Measures, LANPEC Project ReviewManagement Measures, and LANPEC Financial Derivatives Business Management Measures, which comprehensively cover allbusiness areas and levels of the Company.

Pay Taxes in Accordance with the LawThe Company strictly complies with the Enterprise Income Tax Law of the People's Republic of China and the Tax Collection andAdministration Law of the People's Republic of China, having established a comprehensive scal and taxation management systemthat includes the LANPEC Financial Management Measures. Under this system, the Board of Directors sees as the highestgoverning authority responsible for reviewing and approving the Company's tax strategies, while the Financial ManagementCenter and Chief Financial Ocer are charged with their execution. To ensure full compliance with tax obligations and eectiverisk management, the Company conducts internal audits and nancial/tax audits at least annually. These measures are imple-mented to rigorously fulll tax compliance requirements and maintain robust controls against tax-related risks.Information Security and Emergency ProtectionLanke High-Tech places paramount impoance on data and privacy security, having established a comprehensive internalinformation security management system and organizational structure. The Company continuously enhances its technicalcapabilities in the eld of information security to maintain an all-round defense of security baselines.The Company strictly complies with legal statutes including the Cybersecurity Law of the People's Republic of China, the ElectronicSignature Law of the People's Republic of China, and the Regulations on Security Protection of Computer Information Systems ofthe People's Republic of China.Internally, the Company has implemented an information security management system centered on policy documents such as theComputer and Information System Management Measures, Information Systems, Information Equipment and Storage EquipmentManagement Regulations, Security and Condentiality Strategies for Classied Computers, and the Comprehensive Risk Manage-ment Measures. This system ensures organized and leadership-guided execution of information security management activitiesacross all operations.

Risk Identication and Control System

The Company has established a governance structure for ESG risk management led by the Board of Directors and primarilyexecuted by the Strategy and Sustainable Development Committee, based on its operational realities and business developmentneeds. Fuhermore, the Company periodically collaborates with external expes to promptly identify risk factors in accordancewith actual business operations and issues corresponding notication documents. This ensures the full implementation of theCompany's risk management philosophy and safeguards its healthy development.

Whistleblower ProtectionLANPEC suppos all stakeholders in providing any form of suggestions and feedback regarding business ethics to the Company,and maintains condential handling of relevant repos. The Company has clearly established multiple policy provisions andcommits to ensuring fair treatment for whistleblowers in areas including repoing channels, handling procedures, andwhistleblower protection. It explicitly requires that personnel handling repos must not disclose whistleblower information in anyform; must not independently investigate whistleblowers; and must redact whistleblowers' personal information when necessaduring repo acceptance and result procedures, thereby eectively protecting whistleblowers' legitimate rights and interests.Meanwhile, the Company has included repoing channels as essential clauses in relevant policy documents such as the EmployeeHandbook, bidding and procurement policies, and ensures all repoing channels remain unimpeded and eective.

Mitigation StrategiesRisk Categories Risk Descriptions

HotlineEmailMailing Address

021-51953538lanpec-jb@lanpec.com; This dedicated mailbox sees exclusively for receiving all corrup-tion-related repos. The Company's Compliance Depament has assigned specialized person-nel to conduct regular monitoring of this mailbox to ensure timely processing of all repoedinformation.Discipline Inspection Oce, Lanpec Techonologies Limited, No. 505, Rongchang Road, LüxiangTown, Jinshan District, Shanghai, P.R.China

Risks arising from non-compliant operations orprofessional conduct that may lead to legalliabilities, regulato penalties, nancial losses,or reputational damage

Establish comprehensive compliance managementsystems covering organization, policies, processes andoperational requirements; Enhance capabilities incompliance risk prevention, response and resolution;Ensure timely and proper risk mitigationDevelop specialized management systems and depa-ments to ensure ethical business conductFormulate clear corporate policies and legal compliancerequirements; Maintain close compliance communica-tion with business teams and clientsRisks of employees or related paies acceptingbribes, misappropriating company assets, orobtaining personal benets through fraudulentmeans, causing detriment to the Company

Compliance Risks

Risks of medical materials and productionprocesses polluting and aecting nearbycommunities

Properly store the raw materials required for businessoperations in accordance with standards, and appropri-ately handle production noise as well as dischargedwastewater and waste gas.EnvironmentalPollution Risks

Legal &Compliance Risks

Integrity & Ethical

Risks

Risks arising from inadequate productiontechnology, insucient product design consid-erations, or lax production process controlsleading to quality unceainties

Develop clear safety management plans and conductregular hazard inspectionsEquip re prevention and ghting facilities; Establishinternal safety training poals and strengthen person-nel training

Implement systematic quality risk managementprocesses and guidelines covering full project lifecyclesUtilize three digital platforms for risk management,production issue repoing, and delive problemnotication to establish closed-loop risk controlRisks of re, explosion or other accidents duringusage and storage of production materials

Quality Risks

Operational

Risks

Work Safety Risks

Establish a multi-tier responsibility system that clearlydenes occupational disease prevention duties for bothcorporate functional depaments and on-sitemanagement personnelStrengthen occupational disease hazard education forconstruction personnel, conduct regular trainingsessions, elevate awareness of occupational healthrisks, and ensure maste of prevention and controlmethodologies.Health hazards to frontline personnel duringbusiness operationsOccupationalHealth Risks

Sustainability Repo 19|20

LANPEC Public Repoing Channels

LANPEC Operational Risk Identication

The climate and environment see as the cornerstone for LANPEC's suival and development. A stable climate ensures thesmooth and continuous progress of its business, and actively safeguarding the ecological environment is an unshirkable socialresponsibility of the enterprise. In practical actions, we has adopted a multi-pronged approach. On the production line, it hasbeen continuously optimizing processes to make eve eo to reduce energy consumption and greenhouse gas emissions, andearnestly implement energy conseation and emission reduction. In the eld of R&D, it has increased investment in clean energyequipment to contribute to the green transformation of the indust. The Company has also been committed to the greening ofthe plant area to enhance the ecological self-purication function. Moreover, it has comprehensively implemented paperlessoce in daily operations to help employees develop environmental protection habits. With a series of poweul measures, theCompany is bravely advancing at the forefront of addressing climate change and steadily embarking on a new journey ofhigh-quality development in the process of protecting the environment.

Commitment to Sustainable Development Goals (SDGs)

Climate Action andEnvironmental Protection

LANPEC consistently emphasizes the impacts of climate change on corporate operations. This year, the Company has conductedinformation disclosures in accordance with the recommendations of the Task Force on Climate-Related Financial Disclosures(TCFD).Climate Risk Response

We actively respond to the 1.5°C global warming target set by the Paris Agreement and the Action Plan for Carbon Peaking Before2030 issued by the State Council. Based on our own business, referencing relevant indust cases, and integrating with thecompany's ESG governance foundation, we are gradually incorporating a climate risk governance framework system into ouroperations.

Climate Risk Governance System

The "Dual Carbon" policyrequires enterprises to undergolow-carbon transformation,necessitating investment inR&D and deployment ofenergy-saving and environ-mental protection technologies.The "Dual Carbon" policy drivesrapid development in thecompany’s indust, requiringproactive investment in newtechnology R&D to maintainmarket position.

The company actively optimiz-es and deploys water andelectricity saving technologiesto achieve energy conseationand consumption reduction.The company has a completeR&D system and rich R&Dexperience, suppoed byindust-leading technologicalexpeise and nancialstrength.

Increased costs

Increased costsTran-sitionRisks

Physi-

calRisks

Tran-sitionRisks

Low-carbonTechnologyTransition

NewTechnologyInvestment

Risks

Mitigation Measures Time HorizonFinancial ImpactRisk Catego Risk Description

In accordance with the TCFD framework recommendations, we have systematically identied climate-related risks and oppouni-ties that may impact the Company, and implemented corresponding mitigation strategies.

The increasingly improvedsystem of sustainable informa-tion disclosure standards forChinese enterprises has sethigher requirements for ESGinformation disclosure.The Company's main businessinvolves a ceain level ofcarbon emissions. Under the"dual carbon" goals, thecompany may face strictercarbon emission reductionrequirements and supeision.China may advance theconstruction of a carbonemissions trading market, andthe petrochemical indust inwhich the Company operatesmay be included in the future,potentially requiring additionalquota purchases and generat-ing extra costs.

The Company continuouslymonitors policies related to the"dual carbon" initiative toimprove energy eciency andoptimize energy structure.The ompany continuouslyexplores carbon reductionpotential to minimize carbonemissions generated duringproduction and operations,preparing for the expansion ofthe carbon market.

The Company regularlydiscloses environmentalinformation in accordance withlaws and regulations andformulates and publishesindependent ESG repos.Increased expenses,Increased non-operat-ing expendituresIncreased costs,Increased non-operat-ing expenditures

Increased costs

ESGRepoing

Obliga-

tionsPolicy &Regulato

Risks

CarbonEmissionReductionRequire-ments and

Supei-

sionCarbonMarketExpansion

Climate Change Risks and Oppounities Management

Medium-term

Medium-term

Medium-term

Long-term

Long-termMajor raw material suppliers ofthe company may face stricterenergy conseation andemission reduction require-ments under sustainabledevelopment initiatives.With the gradual adoption ofESG concepts, customers mayprefer environmentally friendlyproducts.

The company actively builds asustainable supply chain,incorporating sustainabilityinto supplier evaluation criteriato ensure supply chain stability.The company integrates greenand low-carbon concepts intoits products and seices toachieve green businesstransformation and supposustainable development.

Increased costs,Declined revenue

Declined revenue

RawMaterialSupplyDiculties

or CostIncreaseCustomerPreferencefor GreenProducts

Long-term

Long-termStakeholders such as customersand investors attach greaterimpoance to environmentalinformation disclosure. Whenthe disclosed information fallssho of stakeholders' expecta-tions, it may have an adverseimpact on the company.

The company establishes asound ESG managementsystem, integrating ESGmanagement into risk controlto prevent negative ESGincidents.Declined revenueESGNegative

Events

Sho-term

Future climate change mayincrease the frequency oftyphoons and extreme precipi-tation, raising the company’sdisaster risk and potentiallosses.

Develop and implementemergency managementsystems for typhoon and oodprevention. Equip emergencyequipment and supplies,conduct typhoon disasteranalyses, and establishemergency drill mechanisms.Increased costs,Declined revenueTyphoons

andFloods

Sho-term

Technical

Risks

Market

Risks

Repu-tational

Risks

Sho-term

Risks

Long-term

Risks

The company’s Shanghai oceis located in a subtropicalregion, vulnerable to high-tem-perature impacts fromlong-term climate change.

Introduce employee high-tem-perature allowances, upgradecooling systems in factoriesand oces, develop heatstrokeemergency plans, and achieveenergy eciency in coolingsystems.Increased costs,Declined revenueRisingAverageTempera-

tures

The company’s Shanghai oce,located at low altitude and closeto the sea, is vulnerable tosea-level rise.

Develop special emergencyplans for ood prevention.Sea-Level

Rise

Long-term

Medium-term

According to WRI data, thecompany’s production base inGansu is located in an area withhigh drought risk and waterstress. Water shoages maydisrupt production and employ-ee activities, leading tooperational downtime andrevenue loss.

Actively promote water-savingtechnologies and advocatewater conseation. Theproduction base is in an urbanarea with complete infrastruc-ture, making water shoagerisks largely manageable.Declined revenueDroughts

Medium-term

Sustainability Repo 21|22

Mitigation Measures Time HorizonFinancial ImpactRisk Catego Risk Description

Increased costs,Declined revenue

In 2024, the Company invested 4.75 million yuan in environmental protection, and all production bases have met the ceicationrequirements of ISO 14001:2015 and obtained corresponding ceicates.

Ceication of LANPEC's Environmental Protection Management System

LANPEC adheres to the development philosophy of conseation and environmental protection, and actively embraces thecircular economy. In product development, design, and/or formulation of production processes, it advocates the use of newproducts, new processes, new materials, and new technologies that are non-toxic, low-toxic, and generate less waste, and prefersclean and safe production technologies and processes. It also promotes the use of new products that are easy to recycle, disposeof, or degrade in the environment to reduce the generation and emission of industrial waste. The Company has established anumber of systems, including the Safety/Environmental Management Procedures (LANPEC 501 - 2024), the Environmental Protec-tion Management System (LANPEC [2023] No. 100), and the Environmental Protection and Hazardous Waste Pollution Preventionand Control Management Responsibility System (LANPEC [2023] No. 101). The Company's environmental protection system hasobtained the ISO9001:2015 ceication.

Environmental Management System

Metrics and TargetsAt the climate change indicator level, due to the Company's business model not involving actual production activities or owner-ship of manufacturing/processing equipment (such as boilers, furnaces, turbines, or chemical and raw material production equip-ment) and large-scale greenhouse gas emission facilities, the Company's prima Scope 1 emissions originate from fuel combus-tion in transpoation vehicles required for business operations. Therefore, the consumption scale of gasoline, diesel, and otherfuels is directly correlated with the Company's Scope 1 carbon emissions. Accordingly, we monitor and repo the usage scale ofthese fuels, including gasoline and diesel.Regarding indirect carbon emissions, the Company primarily relies on externally purchased electricity and heat (gas) to suppodaily operations, oce activities, and power requirements for some new energy vehicles. As a result, we monitor and trackpurchased electricity and heat to assess and manage the scale of Scope 2 greenhouse gas emissions.

Key Peormance Indicators (KPIs)

The Company's Scope 1 greenhouse gas emissions amounted to 2,705.60 tCO?e.The Company's Scope 2 greenhouse gas emissions amounted to 2,989.52 tCO?e.

2024

Management StructureThe Board of Directors of LANPEC sees as the highest authority responsible for decision-making on ESG matters. It is taskedwith implementing Xi Jinping's thought on ecological civilization and General Secreta Xi's impoant discourses on carbonpeaking, carbon neutrality, energy conseation, and ecological environmental protection, and ensuring the implementation ofmajor decision-making arrangements of the Central Committee. The Board is also responsible for implementing national and localgovernment policies and guidelines on energy conseation and ecological environmental protection, and fullling the energyconseation and ecological environmental protection work requirements and objectives set by the competent authorities.The Company has established a Safety and Environmental Protection Depament, which, together with the ESG working group,is responsible for implementing national laws, regulations, policies, and standards on energy conseation and ecological environ-mental protection, and caring out various decisions of the Company in the eld of energy conseation and ecological environ-mental protection. It formulates work procedures and management systems for the Company's energy conseation and ecologi-cal environmental protection, and establishes a scientic and standardized organizational management, statistical monitoring,and assessment and reward-punishment system for energy conseation and ecological environmental protection. At the sametime, the Safety and Environmental Protection Depament is responsible for cooperating with the local environmental manage-ment depaments in inspections of the company's environmental management work, including continuous training and environ-mental protection publicity.

Through optimizing manage-ment models, implementinglow-carbon technologies, andreplacing energy-ecientequipment, the company caneectively enhance the usageeciency of equipment,energy, and water resources.

The Company attachesimpoance to energy conser-vation and emission reduction,promotes green and low-car-bon transformation of its mainbusiness, implements greenoce practices and waterconseation, and reducesresource consumption inproduction and oce process-es.Declined

costsImprovement ofResourceUtilizationEciencyResourceEciency

Sho-termBy optimizing the energystructure, the enterpriseincreases the propoion ofrenewable energy in totalenergy consumption to reducedependence on fossil fuels.

Replace grid electricity withphotovoltaic green power toincrease the propoion ofrenewable energy used inproduction and operationprocesses.Declined

costsUse of Renew-able EnergyEnergySource

Sho-termThe "Dual Carbon" strategydrives the low-carbontransformation of the compa-ny's indust, and the companycan launch products more inline with the Dual Carbonpolicy through technologicalinnovation.

The Company actively developsand deploys energy-saving andconsumption-reducingtechnologies, and its mainproducts have been wellapplied in emerging industriessuch as concentrating solarpower, clean energy, andenvironmental protection andemission reduction.IncreasedrevenueGreen Productsand SeicesProducts

andSeicesMedium-termThe company's activeimplementation of sustainabledevelopment strategies canfuher enhance its internationalreputation, meet the sustain-ability requirements of interna-tional customers, and helpexpand overseas markets.

The Company proactivelyimproves its product technolo-gy and management standards,has obtained multiple interna-tional ceications in theindust, and its leadingproducts have reached theleading level in domestic andinternational industries.IncreasedrevenueInternational

MarketMarket

Resilience

Sho-termThe "Dual Carbon" transforma-tion has driven the expansionof the new energy market,boosting the rapid develop-ment of the company's mainbusiness.

The company actively lays outthe new energy indust,aiming to optimize andstrengthen the new energyequipment indust.IncreasedrevenueNew Energy

Market

Sho-termThe company's adaptability toclimate change to bettermanage related risks and seizeoppounities.

The company has established asound climate risk andoppounity managementsystem.Increasedrevenue,

Declined costCorporateResilienceSho-term

Sustainability Repo 23|24

Mitigation Measures Time HorizonFinancial ImpactRisk Catego Risk Description

The Company attaches great impoance to environmental management and protection, strictly complying with laws and regula-tions such as the Environmental Protection Law of the People's Republic of China and the Environmental Impact Assessment Lawof the People's Republic of China. It has established a comprehensive environmental management system that has obtainedrelevant ceications. To strengthen environmental governance, the Company has developed a series of regulato documentsincluding the Environmental Protection Management System (LANPEC [2023] No. 100), the Environmental Protection and Hazard-ous Waste Pollution Prevention Management Responsibility System (LANPEC [2023] No. 101), the Management Measures forEnvironmental Protection Equipment and Facilities (LANPEC [2023] No. 102), and the Hazardous Waste Management System(LANPEC [2023] No. 103). These documents systematically identify and assess potential environmental impact factors arisingfrom production and seice activities, ensuring eective control of environmental risks and continuously reducing the Company'senvironmental impact.

Treatment of Three Wastes

Key Peormance Indicators (KPIs)

A total of 108,044 cubic meters of domestic wastewater was discharged.

2024

Key Peormance Indicators (KPIs)

In 2024, the Company's nitrogen oxide (NOx) emissions totaled 852.32 kilograms,while sulfur oxide (SOx) emissions amounted to

92.98 kilograms.

2024

Environmental Risk Management and Training Response

The Company has established regulations such as the Management Measures for Environmental Protection Equipment andFacilities (LANPEC [2023] No. 102) and the Hazardous Waste Management System (LANPEC [2023] No. 103). In 2024, based onthe Safety/Environmental Management Procedures, the company regularly identies environmental risks, applies a multi-factorscoring method for numerical calculations to determine specic risk values, and implements hierarchical control. By adopting anenvironmental management system, the Company ensures compliance with environmental regulations and standards, strength-ens the maintenance and management of equipment and processes, reduces environmental risk sources, controls the use andstorage of hazardous chemicals, and conducts regular environmental inspections and monitoring to promptly identify andaddress environmental issues, thereby minimizing the likelihood and impact of environmental incidents. The Emergency ResponsePlan for Sudden Environmental Incidents is periodically revised and led with the local government's Ecological and EnvironmentalBureau.

To encourage employees to consciously address environmental risks and production safety risks, the company regularly conductsenvironmental protection training programs, fostering a deep-rooted awareness of environmental safety and safeguarding thecompany's sustainable development.

Wastewater Treatment

For wastewater discharge management, LANPEC strictly complies with relevant laws and regulations and has established theEnvironmental Protection Management System (LANPEC [2023] No. 100) at the corporate level to standardize the management ofcompliant wastewater discharge. The Company’s Shanghai and Lanzhou bases manage wastewater discharge under uniformstandards. At the Shanghai base, rainwater is discharged into natural water bodies through three outlets, while domestic sewageis treated and then released into the municipal pipeline network via four discharge points. At the Lanzhou base, both rainwaterand domestic sewage are directed to municipal facilities through their respective outlets. Both bases commission third-payagencies to conduct regular testing. In 2024, pollutants such as chemical oxygen demand (COD) and ammonia nitrogen were alldischarged within compliance limits.

Waste Gas TreatmentFor the management of atmospheric pollutant emissions, LANPEC strictly complies with relevant laws and regulations and hasestablished the Environmental Protection Management System (LANPEC Document No. [2023] 100) at the corporate level tostandardize the management of compliant waste gas emissions. The Company's Shanghai and Lanzhou bases have implementedmultiple waste gas treatment and emission control measures. At the Shanghai base, emissions from gas-red boilers and heattreatment furnaces are collected and released through elevated exhaust stacks, while sandblasting dust and paint spray fumesare treated before being discharged via high-altitude emissions. The Lanzhou base has completed the upgrade of its heating gasboilers, with all types of waste gases being collected, treated, and discharged through elevated stacks. Regular monitoringconrmed that pollutant emissions from both bases met compliance standards in 2024.

The Company conducts regular environmentalhazard inspections to identify potential environ-mental risks in areas such as environmentalprotection equipment and facilities, exhaust gastreatment, wastewater treatment, and hazardouswaste disposal. Timely corrective measures aretaken to prevent environmental pollutionincidents. In accordance with the requirements ofthe pollutant discharge permit, the Companyorganizes regular monitoring of environmentalimpact factors to ensure that pollutant emissionscomply with national and local standards.

LANPEC Environmental Risk Management Identication and Training Routine Work

On September 27, 2024, the Company conducteda desktop drill for its emergency response plan forsudden environmental incidents. The drill scenarioinvolved two employees from the radiographyteam accidentally spilling waste developer (xer)solution while transpoing it to the hazardouswaste storage facility, causing the liquid to owonto the road. Another employee promptly noticedthe spill and uprighted the oveurned container(failure to act in time could have allowed largeamounts of waste developer (xer) solution toenter storm drains, potentially contaminatingnearby waterways). Upon receiving the repo, theCompany's Work Safety Oce immediatelyactivated the emergency response plan, and theemergency team quickly mobilized to organizeon-site containment measures. Through thisexercise, the Company enhanced its emergencyresponse capabilities in handling unexpectedenvironmental incidents.

LANPEC Environmental Management Risk Identication and Emergency Response Drill

Sustainability Repo 25|26

Hazardous Waste Management System (LANPEC [2023] No. 103) and other policyregulationsRegulatoDocuments

Non-Hazardous Waste: Scrap metal, waste wood, packaging materials, dust,welding slag, etc.MainCategories

Non-Hazardous Waste: The Company implements categorized collection andstorage in designated general solid waste storage facilities, with periodic disposalconducted by licensed treatment providers.

DisposalMethods

LANPEC strictly complies with the Energy Conseation Law of the People's Republic of China and other relevant laws and regula-tions, as well as indust standards such as ISO 50001, continuously optimizing the company's energy and material management.At the corporate level, LANPEC has established regulations including the Energy-Saving and Consumption Reduction Manage-ment Measures. The Company primarily uses electricity, natural gas, and water—all of which are clean energy sources—and itsmain products consist of high-tech petrochemical equipment, aligning with green development requirements in terms of bothenergy structure and industrial structure. In 2022, LANPEC was recognized as a National-Level "Green Facto."

Resource Utilization & Energy Conseation

Key Peormance Indicators (KPIs)

Hazardous Waste: 70.34 metric tonsNon-Hazardous Waste:

1,084.62 metric tons

2024Key Peormance Indicators (KPIs)

Total Water Consumption: 127,786 tonnes

2024

Waste Management

Regarding the solid waste generated during the Company's production and operations, LANPEC strictly complies with relevantlaws and regulations by establishing policies such as the Environmental Protection Management System (LANPEC [2023] No. 100)and the Hazardous Waste Management System (LANPEC [2023] No. 103). During the repoing period, the Company entrustedqualied third-pay units to properly dispose of all general industrial solid waste and hazardous waste. After evaluation, theirinputs, activities, and outputs neither caused nor potentially led to any signicant environmental or social impacts.

Water Resource ManagementThe Company's water supply is entirely sourced from municipal systems, and domestic sewage is discharged into municipalpipelines. The Company has established the Energy Conseation and Emission Reduction Management System, under whichfacilities such as water supply systems, re water pipelines, tap water pipes, faucets, and heating pipelines are subject to regularinspection and maintenance to prevent any leakage (e.g., dripping, seepage, or ovelow). In case of damage or leakage inpipelines, faucets, or other facilities, prompt repairs shall be carried out to eliminate "permanent running water" waste. Meanwhile,the water levels of re reseoirs and pressure test reseoirs are prioritized for inspection to prevent waste caused by directovelow due to excessively high water levels or malfunctioning water level control valves. Delayed-action valves in washbasinsare also regularly checked, and those with excessively long delay times or inadequate resetting are replaced or repaired in a timelymanner.

LANPEC Solid Waste Management Practices

LANPEC Awarded National "Green Facto"

Sustainability Repo 27|28

LANPEC continuously monitors the impact of its activities on biodiversity and recognizes the signicance of water area cleaningand greening maintenance in inuencing the ecological environment. Therefore, in compliance with relevant laws, regulations,and policies such as the Opinions of the General Oce of the State Council on Fuher Strengthening Biodiversity Conseation, SoilPollution Prevention and Control Law of the People's Republic of China, and Groundwater Management Regulations issued by theState Council, the Company carries out tasks including oppounity factor identication and business quality risk screening.Specically, the Company's production and operations align with national and local industrial policies. Its sites are located inreseed industrial zones designated by the local government, and the projects generally meet the requirements of clean produc-tion. Through the implementation of targeted environmental protection measures, the Company ensures that pollutants aredischarged up to standards, with minimal environmental impact from production-related emissions that do not alter the environ-mental quality grade. By adopting strict environmental risk prevention measures, environmental risks are kept under control, andtheir impact levels are deemed acceptable. The public generally suppos the projects, and the environmental management andmonitoring plans are practical and feasible in line with the actual conditions of the projects.

Biodiversity Conseation

Key Peormance Indicators (KPIs)

Total Waste Recycled and Reused: 899.22 Tons

2024

Lanpec Technologies strictly complies with the Energy Conseation Law of the People's Republic of China and other relevant lawsand regulations, as well as indust standards such as ISO 50001. We continuously optimize the company's energy and materialmanagement by establishing corporate-level regulations including the Energy Conseation and Emissions Reduction Manage-ment System and the Energy Conseation and Emissions Reduction Responsibility System.

Energy Management & Green Operations

The Company has formulated the Energy Conseation Management Measures for Production System, Management Measures forRaw Materials and Low-Value Consumables in Production Depament, and Management Measures for Recycling and Utilization ofScrap Materials. We continue to deepen our commitment to the circular economy. In product development, design, and/or formu-lation of production processes, we advocate the use of new products, processes, materials, and technologies that are easy torecycle, dispose of, or degrade in the environment, and prioritize energy-ecient/economical production technologies andprocesses to reduce the generation and emission of industrial waste.

Circular Economy

Oce Supplies Conseation & Low-Carbon Initiatives·Promote paperless oce initiatives to reduce paper consumption.·Use printers/copiers rationally by following the "on-demand, reasonable, and economical" principle. Always print/copyone page or one copy for verication before proceeding with full document printing/copying.·For maintenance materials, relevant depaments shall prepare detailed budgets and material plans by catego tocontrol and reduce material consumption.·Implement an old-for-new replacement system for pas used in maintenance activities. Reusable components shouldbe recycled whenever possible.·Relevant depaments shall enhance production equipment upgrades and process optimization to reduce raw materialconsumption.

Energy Eciency & Renewable Energy Adoption·Corporate photovoltaic projects are being gradually put into operation, replacing pa of industrial electricity consump-tion with solar power.·Intelligent lighting systems have been installed in oces, production sites, and residential areas.·Priority is given to purchasing nationally ceied energy-saving equipment or products, with preference for environ-mentally friendly and energy-ecient electrical appliances and devices.·All depaments have congured computers, printers, copiers, and other oce equipment to automatically enterlow-power sleep mode when not in use.·Employees are encouraged to reduce daily air conditioning usage by 1 hour, with minimum temperature limits set.

Sustainability Repo 29|30

Key Peormance Indicators (KPIs)

Total Technical Personnel

Professor-LevelSenior Engineers

Senior Engineers

3 State Council Special Allowance Recipients2 Gansu Provincial Leading Talents3 Gansu Longyuan Youth Elites

PhD Holders

Master's DegreeHolders

2024

LANPEC insists on taking technology as the core driving force leading the Company's development, continuously investingresources in the research and development of new technologies and products, and is committed to maintaining a leading techno-logical position in elds such as petroleum and petrochemicals, and new energy to meet the continuous upgrading needs of theindust.The Company has established multiple professional research depaments, which form the main body of technological innovation.It possesses 2 national-level quality inspection centers and 10 R&D platforms at or above the provincial and ministerial levels,including a post-doctoral research workstation and a Shanghai expe workstation platform. We have formulated a series ofcomplete scientic research management systems, such as the Measures for the Management of Scientic and Technological Work(Trial), Measures for the Management of Scientic and Technological Development Fund Projects, Measures for the Evaluation ofScientic and Technological Achievements (Trial), and Measures for the Work of the Technical Committee (Trial). These systemscover multiple aspects including scientic research project management, fund management, achievement management, andintellectual propey protection, standardizing scientic research management, improving the eciency of scientic and techno-logical management and work eciency, and ensuring the orderly development of R&D work.

Technological InnovationInnovation Ecosystem

LANPEC attaches great impoance to talent recruitment and motivation, expanding its pool of capable professionals through arened recruitment system and stimulating employee vitality by establishing a diversied incentive mechanism, thus providing asolid talent foundation for the Company's development. The Company has introduced the Measures for Awarding Scientic andTechnological Innovation Work (Trial), which grants commendations and nancial rewards to employees who achieve national orprovincial-level scientic and technological achievements, obtain national patents, publish papers or works, and those who makeoutstanding contributions to the company's scientic research, new product development, and promotion. These material incen-tives encourage employees to actively innovate.Adhering to a peormance-oriented approach, the Company has established an evaluation and incentive mechanism. For key andcritical positions, competitive recruitment is adopted to fully ignite employees' enthusiasm for entrepreneurship. This allowsemployees to gain promotion oppounities based on their capabilities and peormance, achieving the integration of personalvalue and corporate development.

Talent Recruitment & Incentive

The Company has successively established long-term cooperative relationships with multiple domestic scientic research institu-tions, universities, and large enterprises in the areas of scientic research, talent development, and application of new technolo-gies and products. In recent years, through paicipating in international academic conferences, technical exchanges withoverseas companies, and technology introduction/output, the Company has learned and mastered the latest relevant foreigntechnologies and technological development trends. It has strengthened communication with business-related depaments andindust technical associations to keep abreast of indust technological developments and trends, and enhanced technicalexchanges with international standardization organizations to paicipate in the formulation and revision of relevant internationalprofessional technical standards.

Indust-Academia-Research Collaboration

In the development of LANPEC, product responsibility and innovation are of paramount impoance. The Company strictlycontrols quality, having obtained multiple professional ceications to ensure product safety and reliability, safeguarding custom-er interests, and upholding corporate reputation. Regarding innovation, LANPEC continuously invests in R&D and possessesnumerous patented technologies. The Company actively paicipates in indust standard-setting and consistently introducesnew products that meet market demands. Driven by this dual focus on product responsibility and innovation, we has enhancedits competitiveness, achieving steady growth in the petroleum, petrochemical, and new energy sectors. This approach alsoprovides strong suppo for reaching sustainable development goals.

Commitment to Sustainable Development Goals (SDGs)

Technological Innovationand Product Seices

Focusing on accelerating the research on new qualityproductivity in marine energy, on December 1, Mr. WangYu, General Manager of the Production Depament atCNOOC Tianjin Branch, led a delegation from the CNOOC2024 Mid-Career Leadership Training Program to ourcompany for a research exchange. Mr. Zhang Shangwen,Member of the Company’s Pay Committee and DeputyGeneral Manager, received the delegation and hosteddiscussions.

CNOOC Young and Middle-Aged Cadres Training Delegation Visits Lanpec Tech for Research ExchangeNational-Level Quality Inspection Center

National Oil & Gas Drilling, Production, Rening andPetrochemical Equipment Quality Inspection and Testing Center

National Heat Exchanger Product QualityInspection and Testing Center

National-Level Scientic Research PlatformPostdoctoral Research Workstation

Provincial/Ministrial-Level Scientic

Research Platform

Shanghai Expe Workstation

Provincial/Ministrial-Level Engineering

Technology Research Center

Shanghai Petrochemical Heat ExchangeEquipment Engineering Technology Research CenterLanzhou Heat Transfer & Energy Conseation

Engineering Technology Research CenterMechanical Indust Heat Transfer & EnergyConseation Engineering Technology Research Center

Provincial/Ministrial-LevelTechnology Innovation Center

Gansu Provincial Enterprise Technology CenterShanghai Municipal Enterprise Technology CenterGansu Provincial Indust Technology Center

Provincial/Ministrial-LevelDesign Innovation CenterGansu Provincial Industrial Design CenterShanghai Design Innovation Center

Sustainability Repo 31|32

Corporate R&D Achievements & Market Recognition

LANPEC strictly complies with intellectual propey-related laws and regulations such as the Civil Code, Trademark Law, PatentLaw, and Copyright Law, safeguarding its competitive advantages and brand reputation through a sound intellectual propeymanagement system, while avoiding infringement of others' intellectual propey rights. The Company has formulated documentsincluding the Intellectual Propey Protection Management Measures, Intellectual Propey Protection Measures, and Letter ofGuarantee for Intellectual Propey Protection, implementing full-process standardized management for the creation, manage-ment, utilization, and protection of the company's intellectual propey rights, and fuher improving the intellectual propeymanagement of company projects and the life cycle management of patent applications.

To enhance employees' awareness of intellectual propey protection, a team ofinstructors composed of internal senior professionals and external expes hasdesigned training courses on patent drafting, patent protection, intellectualpropey management, etc., tailored to dierent groups.We attach great impoance to intellectual propey management, strictly complywith relevant laws and regulations, and continuously improve the intellectualpropey management system. Employees are required to sign the IntegrityBehavior and Intellectual Propey Agreement.LANPEC has carried out online and oine training and learning on intellectualpropey (IP) - related knowledge for key personnel and relevant sta of thecompany. This aims to enhance the IP protection awareness of management andrelevant employees, and strengthen the awareness of patent application andinfringement prevention among relevant personnel in the R&D and productionprocesses.

Intellectual Propey Protection

With its profound technical accumulation and rich indust experience, the Company has deeply paicipated in major domesticprojects, continuously increased investment in technological innovation, and achieved fruitful results.

Advance National Key Projects and Technological Innovation

Key Peormance Indicators (KPIs)

The Company holdsa total of 334patentsincluding79invention patents.

2024

In 2024, the rst national demonstration project of molten-salt heat-storage-coupled million-kilowatt unit and four-machine-coordinated steam-water-electric-controlled frequency-modulation and peak-shaving, which wasundeaken by LANPEC (Shanghai), was successfully put into operation. Thisproject is of great signicance. In this project, the energy-storage scale of thecold and hot molten-salt storage tanks constructed by LANPEC (Shanghai)reaches 120 MWh. The successful commissioning of this project has set a modelfor the exibility transformation of domestic thermal power plants, and it hasimpoant demonstration value for promoting the technical development andapplication of domestic thermal power plants in energy-storage peak-shaving,high-eciency heat supply, and other aspects. It also helps to improve thestability of the domestic power system and the energy-utilization eciency.

China's First Demonstration Project of Molten Salt Heat Storage Coupled with a Million-Kilowatt Unit

2024 Annual Conference of the Heat Exchangers SubCommittee of China Standardization Committee onBoilers and Pressure Vessels (SAC/TC262/SCS) Held inShanghai on December 2024. LANPEC seed as theocial host of this prestigious indust event, whichbrought together numerous distinguished expes toadvance the development of the heat exchange technolo-gy sector.

Leading Indust Standards · Driving Collaborative Growth

Sustainability Repo 33|34

Organizational Exchanges

and TrainingImprove Institutional ProcessesPay Attention toInformation Condentiality

In the Binzhou Natural Gas Terminal Project undeaken by LANPEC, thedesigned natural gas treatment capacity in the rst stage is 3.8 million cubicmeters per day. In this project, the activated MDEA amine-based absorption-re-generation method is adopted to remove acid from natural gas. The CO?removed by the acid-removal unit enters the recycling unit. This unit uses theproduction process of desulfurization, dehydrocarbonization, dehydration, andpurication to treat the regenerated acid gas. It is expected that qualied food-grade liquid CO? and solid d ice can be produced by recycling CO? eve year,with a production capacity of up to 260,000 tons. LANPEC is responsible forsupplying various equipment such as towers, vessels, and heat exchangers, aswell as the adsorption agents in the towers for the CO? recycling unit of thisproject.

Bozhong 19 - 6 Binzhou Condensate Gas Field CO? Recycling Project

In August 2024, the cold and hot molten salt tanks in the EPC project ofmolten salt storage tanks for the Huidong New Energy 640MW photovoltaic +110MW solar thermal hybrid power station (referred to as the Akesai Project)undeaken by LANPEC (Shanghai), a subsidia of LANPEC, completedpreheating and successfully received salt.The Akesai Project is of great signicance. As one of the rst batch of "solarthermal + photovoltaic" pilot projects on dese, Gobi, and wasteland founda-tions in China, it is also a major provincial project in Gansu Province. In thisproject, the high-temperature molten salt storage tanks undeaken by LanpecTechnologies see as the core equipment of the energy storage system for thesolar thermal power station. As large-scale high-temperature fatigueequipment with extremely harsh operating conditions, these tanks are extreme-ly dicult to design and construct, and their safety and reliability play a decisiverole in the safe and stable operation of the entire heat storage system.The advancement of this project not only helps explore the "solar thermal+ photovoltaic" development model in dese, Gobi, and wasteland areas,providing valuable experience for the application of new energy under complexgeological conditions, but also promotes the development of the new energyindust in Gansu Province, assists in optimizing and upgrading the local energystructure, and is of great signicance for achieving the national energy transfor-mation and sustainable development strategy.

EPC Project of Molten Salt Storage Tank for Huidong New EnergyPhotovoltaic + Solar Thermal Hybrid Power Station in Akesai County

LANPEC Intellectual Propey Protection Initiatives

The Company upholds the quality policy of "Technological Leadership, Excellent Quality, People-Oriented Approach, SocialContribution, Compliance with Laws and Regulations, and Continuous Improvement", integrating quality enhancement through-out the entire process of product research and development, production, and seice. Guided by the needs of industries such aspetroleum and petrochemicals and new energy, it is committed to providing customers with high-quality specialized equipmentand seices, striving to establish an excellent quality reputation within the indust.The Company strictly adheres to domestic and international product quality and safety policies and standards, such as theProduct Quality Law of the People's Republic of China and the Standardization Law of the People's Republic of China. It formulatesand implements systems such as the Quality Assurance Manual, implements the main responsibility for quality and safety, andimproves the quality assessment mechanism.

The Manufacturing Depament and Quality Management Depament of the Company are responsible for product quality,working collaboratively to conduct strict inspections. During the production process, multiple depaments work in coordinationto strictly control quality, implementing rigorous management of in-plant product quality and actively responding to externallyfeedbacked quality issues. In 2024, the Company's quality objectives were organized and formulated by the Quality AssuranceEngineer and quantied as follows: the compliance rate with laws, regulations, standards, and user technical agreements shall be100%; customer satisfaction shall reach over 95%; the ceication rate for welders and non-destructive testing personnel shall be100%; the qualication rate for materials and spare pas used in products shall be 100%; the rst-time qualication rate for eachmanufacturing process shall be over 90%; and the qualication rate for ex-facto products shall reach 100%.

In accordance with the provisions of the Special EquipmentSafety Law of the People's Republic of China, the Regula-tions on Safety Supeision of Special Equipment, the Rulesfor Licensing of Special Equipment Production and FillingUnits (including Amendment No. 1 and No. 2) (TSG07-2019), and corresponding laws, regulations, andstandards, a quality assurance system for pressure vesselproduct manufacturing has been established in combina-tion with the Company's characteristics.

Focus on Seing Product Quality

Quality Management System

Facing the overseas market, the Company adheres to high-quality development driven by new technologies. Relying on the brandadvantages and technical resees of its overseas business, it continues to achieve breakthroughs in new business implementa-tion globally.

Comprehensive Breakthroughs in Overseas Seices

Sustainability Repo 35|36

The quality objectives are decomposed by the Quality Assurance Engineer andimplemented into each quality control system, relevant depaments, and respon-sible personnel in accordance with the following requirements, with regularassessments conducted.Be responsible for arranging human and material resources to provide timelyseice to users.The manufacturing and acceptance of products shall be completely controlled inaccordance with the corresponding laws, regulations and standards.

Quality Assurance Engineer

Process Room and QualityManagement Depament

Be responsible for arranging ceied personnel to take up their posts for opera-tion; strictly control the material procurement process to ensure the physicalquality of products; and strictly control the product manufacturing process.

Manufacturing Depament

Conduct strict inspections to ensure that the rst-time qualication rate of eachmanufacturing process for products exceeds 90%, and the qualication rate ofex-facto products reaches 100%.

National Demonstration Power Station of Advanced Compressed Air Energy Storage in Feicheng, Shandong

South Africa Redstone CSP Project

In 2024, the large plate-shell heat exchanger designed and manufactured byLANPEC (Shanghai) for a Kazakhstan rene was successfully shipped. Thismarks another overseas expansion of the Company's high-eciency heatexchanger equipment manufacturing technology and opens a new chapter forhigh-eciency heat exchanger equipment manufacturing.

Large Plate - Shell Heat Exchanger for Kazakhstan Rene

In 2024, during the South Africa Redstone CSP Project, LANPEC (Shanghai)successfully completed the hydrostatic test for the hot molten salt tank, with theliquid level inside the tank reaching the maximum hydrostatic level of 13.25meters. The tank is primarily constructed from A240Gr347H material, with themaximum wall thickness reaching 58 mm. During project implementation,leaders at all levels from LANPEC (Shanghai) and Shandong Electric PowerConstruction Third Engineering Company actively collaborated, proactivelyadopted advanced quality management methods from Europe and America,and combined past construction experience with advanced quality controltechniques to overcome multiple challenges and ensure the smooth progress ofmolten salt tank construction. This eo earned high recognition from allpaicipating units, including the owner, ACWA (investor), SEPCOⅢ (generalcontractor), and EMYPRO (design institute), in terms of construction quality,safety, and schedule.The success of this project holds signicant meaning: on one hand, it demonstrates the strong construction capabilities and technicalexpeise of Shanghai Lanbin and its paners; on the other hand, it provides valuable experience for the construction of subsequentsimilar CSP projects, promotes technological development and project practices in the global CSP indust, and sees as a positivedemonstration for advancing the diversied development of the energy sector.

In April 2024, the National Demonstration Power Station of AdvancedCompressed Air Energy Storage (300MW/1,800MWh) in Feicheng, Shandong,for which LANPEC paicipated in the design, successfully achieved its rst gridconnection. As the world's largest new-type compressed air energy storagepower station, all 8 spherical storage tanks with a volume of 8,000 m? in itsthermal storage system were developed and designed by the Company.Compared with conventional spherical storage tanks, the spherical tanks in thisproject feature large volume, high design temperature, frequent load changes,and complex operating conditions, making them the largest fatigue containersfor thermal storage in China.In the energy sector, as the world's largest new-type compressed air energy storage power station, it provides a demonstration modelfor the development of large-scale energy storage technologies, helps improve energy storage and utilization eciency, and promotesthe optimization of the energy structure and the development of sustainable energy. Its successful grid connection marks a majorbreakthrough in the application of new-type compressed air energy storage technologies in China, and is of great signicance foralleviating energy supply-demand contradictions and ensuring stable energy supply.

LANPEC Seice Quality Control Measures

Quality ManagementDepament

Manufacturing Depament

For product quality risk management of the Company, we mainly focus on material quality risks, manufacturing process risks, andpersonnel operation risks.In 2024, the Company primarily centered on system construction. For raw material procurement management, a list of qualiedsuppliers was established, with priority given to suppliers with good indust reputation and stable quality. Material qualitystandards and acceptance requirements are clearly specied in procurement contracts. Upon delive, the quality inspectiondepament conducts inspections in accordance with the standards. Unqualied materials are strictly returned, and suppliers arewarned or removed from the list.For process management, detailed process operation procedures have been formulated, covering operation steps, processparameters, quality control key points, etc., for each production process. Before production, technical personnel conduct processdisclosure to operators. During production, process personnel conduct regular inspections to ensure that processes are imple-mented in place. For new processes and technologies, small-batch trial production is carried out rst, and formal application ismade only after verication of feasibility.For personnel training and management, the Company has formulated an annual training plan, including training content such astheoretical knowledge, operational skills, and safety regulations. When new employees join, they undergo job skill training andassessment, and can only take up their posts after passing the assessment. Existing employees receive regular refresher trainingto improve their skill levels. A quality reward and punishment system has been established to reward employees with excellentquality peormance and punish those who operate in violation of regulations and cause quality problems.

Quality Risk Management

The Company adheres to standardized management, continu-ous improvement, people-oriented principles, and greendevelopment, striving to become a world-class clean energyseice provider. For products that do not meet standards, weprioritize identication and record-keeping. From raw materialinput to nished product delive, each link is assigned aunique identier, with detailed records of various data duringthe production process, including raw material batches,processing equipment, operators, and inspection data.On the other hand, we strengthen the traceability process.Upon discovering non-conforming products, the traceabilityprocedure is immediately activated. Production records arequeried based on product identiers to determine informationsuch as raw material sources, processing procedures, andoperators, and analyze the causes of non-conformity. Ifmultiple batches of products are involved, the traceabilityscope is expanded, and relevant depaments are notied totake measures such as recall, isolation, and re-inspection.

Handling of Products andNonconforming Items

Sustainability Repo 37|38

Company Quality Risk Management MeetingThe Company implements a strict "quality regular meeting" system eve month, conducting quality analysis across multiple linksincluding material procurement, design, production, inspection, and after-sales seice, proposing preventive measures to reduce theoccurrence of non-conforming products. Paicipants cover quality assurance engineers, quality management system personnel, R&Ddesigners, production management personnel, and all section chiefs.

Sustainability Repo 39|40

Guided by the customer seice philosophy of "Technological Innovation for National Brands, Quality to Earn Chinese Credibility",the Company conducts targeted internal training programs annually for its full-chain management processes. By strengtheninginternal capabilities and promoting collective improvement, it aims to build a high-standard team and continuously enhancecustomer seice levels. In 2024, more than 10 training sessions were held, with 120 paicipants and a total training duration of40 hours. These initiatives improved employees' sensitivity to customer needs, enhanced their rapid response capabilities inproblem-solving, and reinforced compliance awareness to avoid non-compliant behaviors during seice delive.

The Company has established a dedicated emergency response team to ensure rapid and ecient reactions to various suddenincidents in product sales. The team leader is appointed by senior company leadership, with members comprising professionalsfrom key depaments such as quality, business, technology, and legal aairs. When abnormal events occur in product sales, suchas customer complaints about product quality defects or sudden product failures during normal use, frontline sales personnelmust truthfully repo the information to the emergency response team at the fastest speed upon acquisition. Upon receiving therepo, the emergency team immediately convenes an urgent meeting, quickly activates the corresponding emergency responselevel based on pre-set scientic classication criteria, ensures resource allocation matches the severity of the issue, and lays afoundation for subsequent proper handling.For customer complaints, the Company promptly dispatches technical and quality personnel to the site to understand theproblem and conduct cause analysis. If the issue is indeed a product quality problem, the company will negotiate solutions withcustomers in accordance with contract terms and relevant laws and regulations, such as repair, replacement, or compensation. Atthe same time, recall procedures will be initiated for the problematic products to prevent the issue from escalating. If the incidentattracts media attention or public questioning, the Company will timely release authoritative information, address societalconcerns, and avoid causing negative impacts.

Product Sales Emergency Feedback Plan

Company Customer Seice TrainingLANPEC’s customer seice system covers all key aspects of customerseice. Through high-quality products, ecient seices, professionaltechnical suppo, and a sound communication mechanism, it compre-hensively meets customer needs, enhances customer satisfaction andloyalty, and has established a good corporate image.

Customer Seice

LANPEC deeply recognizes that listening to customer feedback is crucial for continuously improving the customer seice experi-ence. Especially considering the Company's international business layout, it actively adopts and values eve piece of feedbackfrom customers, regarding it as a valuable resource for seice optimization and innovative development.The Company has established a sound after-sales seice management procedure and an after-sales seice procedure within itsquality assurance system. The technical personnel dispatched for after-sales seice are all relevant personnel of the qualityassurance system, and the seice personnel dispatched all hold relevant qualication ceicates for special equipment opera-tion. The Company's after-sales seice-related procedural documents are established in strict accordance with the requirementsof TSG21-2016 Safety Technical Supeision Regulations for Stationa Pressure Vessels and TSG21-2019 Rules for Licensing ofSpecial Equipment Production and Filling Units in terms of seice processes and resource conguration.

Customer Seice System

After product delive,business personnelcontinuously communicatewith users to ensure timelyand eective after-salesseice or technical suppocan be provided at the rsttime.

Upon receiving seiceinformation feedback fromusers, business personnelshall notify the after-salesseice oce, which isresponsible for organizingrelevant technical personnelto respond. Routine issuesshall be feedback within 8hours, and issues aectinguser safety or productionshall be respondedimmediately.

If a solution is required forequipment quality issues,the after-sales seiceoce shall organizerelevant depaments,expes, and technicalpersonnel to analyze thecauses and proposesolutions. The solutionsshall be prepared by therelevant responsibledepaments and imple-mented or sent externallyonly after being reviewedby the technical directorand approved by thequality assurance engineerin accordance with thecompany's design ormanufacturing qualityassurance system require-ments.

After handling equipmentquality issues, the depa-ment/unit responsible forafter-sales seice shalldispatch personnel to ll inafter-sales seice recordsas required, and providerelevant seice materialsto the after-sales seiceoce after customerevaluation. The after-salesseice oce shall beresponsible for ling andpreseing technicaldocuments, handlingmethods, solutions, andprocessing results.

1234

LANPEC’s Customer

Seice Process

The Company continuously focuses on suppliers' sustainable development and ESG governance. It gradually introduces manage-ment requirements such as environmental protection, social responsibility, and business ethics throughout the full lifecycle ofsupplier management, and conducts regular evaluations to ensure suppliers' continuous compliance and risk prevention andcontrol.

The Company gives priority to collaborating with suppliers rated at Level A. For Level B suppliers (good suppliers), the Companywill maintain normal procurement relationships and encourage them to continue improving their peormance. For Level C suppli-ers (qualied suppliers), the Company will adopt stricter measures such as reducing procurement volume or suspending procure-ment to urge them to make necessa improvements. For Level D suppliers (unqualied suppliers), the Company will considereliminating them or requiring them to rectify and undergo re-evaluation, so as to ensure that the overall peormance of thesupplier group meets the company's requirements in terms of product quality, sustainable development, and other aspects.

The Company prioritizes selecting suppliers from the existing supplier list based onrequirements and technical specications. If unsuitable, suppliers are sourced from themarket, subject to prelimina screening. In-depth evaluations are conducted afterqualied document reviews.

Supplier Full Lifecycle Management

LANPEC attaches great impoance to communication and management with its supply chain and community. A stable andsustainable supply chain is crucial for ensuring product quality and stable delive, directly impacting the Company's competitive-ness. The community provides the foundation for the Company's development, and long-term growth can only be achievedthrough harmonious coexistence. We actively practice responsible supply chain management, strictly screens suppliers to ensureraw materials are environmentally friendly and compliant, and works together with them to promote industrial upgrading. In thecommunity, we car out science popularization activities to share cutting-edge knowledge of energy utilization and organizevolunteer suppo to bring warmth to disadvantaged groups. Through these eos, the Company consolidates its developmentfoundation and achieves win-win cooperation with all paies.

Commitment to Sustainable Development Goals (SDGs)

Panerships andSocial Responsibility

Sustainability Repo 41|42

The Company is committed to building a sustainable supply chain. While ensuring procurement needs are met and agreementsare fullled in a timely manner, it actively promotes suppliers to enhance their sustainable development capabilities. We imple-ment full-process management covering supplier admission, procurement, evaluation, and empowerment, and purposefullyincorporate considerations of suppliers' ESG risks.

The Company has developed a Quality Assurance Manual and periodically revises and improves it. Strict procedures for materialrequisition, procurement, inspection, and warehousing have been established, along with cross-depamental procurementcoordination mechanisms to clarify the responsibilities and collaborative relationships of demand depaments, procurementdepaments, quality inspection depaments, warehousing depaments, nancial depaments, etc., in the procurement process.The Company conducts full-process supeision of procurement activities to ensure compliance and fairness; it regularly peormsinternal audits of procurement activities to examine the implementation of procurement processes, control of procurement costs,supplier management, etc., and promptly recties any issues identied. The procurement depament has established a monthlyquotation mechanism for major material suppliers, where suppliers submit quotations in writing each month, and the companyseeks optimal procurement channels through inqui and price comparison.

Responsible Supply Chain

Supply Chain Governance Framework

The signicance of the Company monitoring and managing supply chain risks lies in ensuring business continuity, compliance, andreputation, while promoting sustainable development. The Company's philosophy is to identify and assess potential risks throughcomprehensive supply chain risk management, adopt eective preventive and responsive measures, so as to enhance theresilience and responsiveness of the supply chain, ensure the quality of products and seices, protect the environment andhuman rights, and maintain the Company's business ethics and governance standards.

Supply Chain Risk Identication and Assessment

Supplier Selection

Suppliers must inspect the products they provide and furnish qualied repos or ceica-tions. Prior notice is required for any changes; detailed information must be submitted forname changes. Suppliers with long-term non-delive or quality anomalies will undergore-evaluation or may have their qualications revoked.

Supplier ProductQuality Management

Dynamic management is implemented, with evaluations conducted at the end of each yearor when new qualied suppliers are added. Sub-subsidiaries organize the evaluations andrevise the list of qualied suppliers based on comprehensive assessment results, such assupplier audit repos.Supplier Assessmentand Re-evaluation

Suppliers are periodically graded according to peormance evaluation results, anddynamic management is applied accordingly to reward excellence, eliminate inferiority,and drive suppliers to continuously improve product and seice quality.

Supplier DynamicGrading and Management

Measures

Priority in procurement, increase monthlyprocurement volume allocationGood suppliers, normal procurement allowedQualied suppliers requiring improvement;reduce procurement volume or suspend procurementUnqualied suppliers; subject to eliminationor re-evaluation after rectication

Supplier Level

D

ABC

Score Range

90-10080-8960-7959 and below

Anti-Corruptionand Anti-Bribe

Information Condentiality

Fair Competition

Child Laborand Forced LaborHealth and SafetyFreedom of Associationand Collective BargainingEqual Employmentand Anti-Discrimination

Supplier Environmental

Management

Supplier SocialResponsibility Management

Supplier Business Ethics

Key Peormance Indicators (KPIs)

Donated 150,000 yuan to Lvxiang Town, Jinshan District, Shanghai.This initiative leverages the role of charitable organizations in povey alleviation,improving people's livelihoods, promoting traditional Chinese viues, and socialist core values,fuher ensuring the basic living needs of vulnerable workers and residents during the Spring Festival.Paid 200,000 yuan in povey alleviation funds to Huaiyin County, Henan Province,a designated povey alleviation site of Sinomach Group, for local infrastructure construction.

2024

Sustainability Repo 43|44

Employee Sponsorship of Single-Parent Left-Behind Children at Lantian Prima School in Wangchangsi Village

Upholding the philosophy of indust-wide progress, the Company is committed to building win-win panerships with collabora-tors, suppliers, and customers. By sharing resources, technologies, and market insights, it aims to drive innovation and advance-ment across the entire indust, achieving mutual growth and sustainable development.Indust Collaboration

The Company's philosophy in social welfare and volunteer seice is to actively give back to society and contribute love, dedicatingitself to social welfare undeakings and charity, and interpreting the corporate social responsibility with practical actions.Social Welfare & Rural Revitalization

We align with international labor standards such as the UN Guiding Principles on Business and Human Rights, the OECD Guidelinesfor Multinational Enterprises, and the ILO Tripaite Declaration of Principles Concerning Multinational Enterprises and Social Policy(MNE Declaration), as well as standards like SA8000, China’s Environmental Protection Law, and the national “Dual Carbon” Strate-gy. In our business practices, we adhere to green procurement principles, prioritizing suppliers with robust EHS (Environmental,Health, and Safety) management systems. Additionally, suppliers demonstrating exceptional ESG (Environmental, Social, andGovernance) peormance will receive preferential treatment in our supplier/paner evaluation system, enjoying priority collabo-ration under equivalent conditions.

The Company currently does not use 3TG mineral resources in its production processes. Meanwhile, the Company adheres toresponsible procurement, committing not to use mineral resources from conict-aected areas, and explicitly requiring suppliersto refrain from using mineral resources from conict-aected areas or in violation of the company's policies.The Company commits to complying with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals fromConict-Aected and High-Risk Areas published by the Organization for Economic Co-operation and Development (OECD), as wellas the regulations on the management of tungsten, tin, tantalum, and gold minerals in conict-aected areas under theDodd-Frank Wall Street Reform and Consumer Protection Act.

The Company periodically organizes supplier exchange activities to promote friendly and equal development between bothpaies through face-to-face communication.Supplier Communication

Through active fulllment of corporate social responsibility and paicipation in social seices and charitable activities, theCompany gives back to society with practical actions, promotes sustainable community development, and achieves harmoniousprogress between the enterprise and society.Public Welfare and Charity

In 2024, the Company strictly abided by the contractual terms with small and medium-sized enterprises (SMEs), ensuring that allpayable amounts in line with the contract were paid on time, with no overdue payment incidents occurring. We will continue tomaintain good cooperative relationships with SMEs in the future, uphold nancial responsibilities, and implement robust assetmanagement to ensure equal treatment of all paners.

Equal Treatment of SMEs

EnvironmentalProtection

Supply ChainManagement

Labor RightsBusiness EthicsEnvironmentalRegulato Compliance

Waste Managementand Circular EconomyEnergy Consumptionand Climate ChangeHazardous Chemicals

Management

Wangchangsi Village, located in a remote mountainous area with underdeveloped economic conditions, is LANPEC's designatedpovey-alleviation paner. Many local families face signicant livelihood challenges. As the village's sole educational institution,Lantian Prima School bears the critical mission of nuuring the next generation. However, children from single-parent or left-be-hind families, due to nancial hardships, face heightened dropout risks.Upon learning this situation, our two employees proactively contacted the Company's labor union to understand the sponsorshipprocedures and requirements, then took immediate action. Eve year, they timely remit 2,400 yuan in student grants to the school'sdesignated account, ensuring the funds are promptly and accurately allocated to the children in need.For the sponsored children, these grants not only alleviate their nancial burdens but also make them feel the care and warmth fromsociety. With this suppo, the children can focus more on their studies, continuously enhancing their knowledge and skills to lay asolid foundation for their future growth and development.As a central state-owned enterprise, LANPEC demonstrates corporate responsibility by proactively fullling its social duties and suppo-ing education in remote areas. The company will strengthen cooperation and exchanges with governments, schools, and other socialsectors to jointly explore more innovative and eective funding models, injecting greater vitality and momentum into educationalundeakings in remote regions.

Supply Chain ESG Responsibilities

Conict Minerals

Sustainability Repo 45|46

The Company promotes the volunteer seice philosophy of "Seing Society and Delivering Love," encouraging employees toactively paicipate in various public welfare activities and demonstrate the enterprise's social responsibility through practicalactions. Through volunteer seices, the Company aims to cultivate employees' social awareness and dedication spirit, whilebringing positive impacts to the community and promoting harmonious social development.

Volunteer Seice

Love in the Sunshine, Planting Youth — LANPEC Young Volunteers in Action

March 12, 2024 – The Company's Youth League Committee, in collaboration with Lüxiang Town Youth League Committee and LüxiangTown Disabled Persons' Federation, organized a volunteer activity titled "Love in the Sunshine, Planting Youth." Seventeen youngvolunteers from the Company sowed love in the sunlight and planted hope with their youth.During the event, the young volunteers panered with members of the "Sunshine Home" to complete succulent potted plant arrange-ments. They also teamed up to paicipate in fun interactive games such as bean bag toss, traditional Chinese arrow pitching, and"Hands in a Frenzy". Through these youthful actions, they embodied the spirit of volunteerism, bringing the warmth and brightness ofspring to the "Sunshine Home" members. Their eos encouraged these individuals to embrace self-reliance, build condence, andcherish life.

The Company has been actively engaged in rural revitalization, contributing to the development of rural economies and theupgrading of agricultural industries through innovative consumption-based assistance measures. These initiatives have eectivelybridged corporate resources with rural needs, achieving an organic integration of corporate social responsibility and the nationalrural revitalization strategy.

Rural Revitalization



In Wangchangsi Village, which is under LANPEC's targeted assistance, located in a remote mountainous area, the village sanitationworkers could only rely on traditional hand cas for daily cleaning. This was not only inecient but also failed to meet the cleaningstandards in the vast and complex rural environment. Sanitation workers often had to work hard under the scorching sun or in wind andrain, not only consuming a lot of physical strength but also struggling to ensure the timeliness and comprehensiveness of their work.Upon learning about the situation, LANPEC immediately purchased ve electric sanitation vehicles and donated them to each village inneed, including Wangchangsi Village. This initiative is not only a direct suppo for rural environmental hygiene but also a deep concernfor the hard work of sanitation workers. At present, the electric sanitation vehicles are playing an impoant role in improving theeciency of sanitation work, reducing operating costs, promoting environmental protection and energy conseation, and enhancingthe image of rural areas.In the future, LANPEC will continue to help improve rural environmental hygiene conditions, so that eve sanitation worker can ndhappiness and a sense of achievement in their work, and jointly contribute to building a beautiful and livable rural environment.

LANPEC responded to the call of Sinomach Group by organizing consumer povey alleviation, with a consumption assistance expendi-ture of 91,300 yuan used to purchase agricultural and sideline products in Pinglu County, Shanxi Province, and Heshui County, GansuProvince. By directly purchasing and consuming agricultural products, the company helped address the problem of unsalable agricultur-al products.

Rural Consumption Assistance

A povey alleviation fund of 100,000 yuan was paid to Gucheng Town, Heshui County, Qingyang City, Gansu Province - the Company'sdesignated povey alleviation site - to suppo the infrastructure renovation project of the local vegetable production base.Rural Cooperative Base/Infrastructure Construction

Key Peormance Indicators (KPIs)

There is no form of employment discrimination or forced labor in the company,and the labor contract signing rate for employees is100%.

2024

LANPEC has always closely integrated employee development with the Company's sustainable growth, establishing and improv-ing a human resource management system covering multiple aspects such as recruitment, training, compensation and benets,career development, and health and safety. The Company's board of directors formulates the overall employee developmentstrategy, which is specically implemented by the management and human resources depament to ensure that employee rightsand interests are fully protected. Through a combination of measures such as compliant employment, diversied development,talent introduction and motivation, the Company continuously optimizes employee growth paths and enhances organizationalstability and competitiveness. In addition, LANPEC attaches impoance to employee well-being and occupational health, imple-ments diversied welfare and care initiatives, strengthens safety production management, and creates a safe, healthy and harmo-nious working environment to jointly promote the Company's high-quality development.

Commitment to Sustainable Development Goals (SDGs)

Employee Developmentand Workplace Safety

Sustainability Repo 47|48

EmployeeDevelopment

Employee Development Management Framework

We employ multiple channels—including employee sueys, one-on-one inteiews, and statistical analysis of quantitative peor-mance metrics—to identify and assess sta training & development needs, benets & work-life balance status, as well as overalljob satisfaction. Concurrently, the Company conducts regular audits of internal communication eciency and employmentcompliance to ensure eective protection of employee rights.Employee development sees as a cornerstone for corporate sustainable growth, with its impacts and potential risks spanninglegal compliance, supply chain management, and workforce stability. To address these challenges, the Company implementsproactive ESG management initiatives to enhance regulato adherence, corporate reputation, and talent competitiveness.

Upholding the principles of openness, fairness, and justice, we are committed to enhancing the eciency and quality of recruit-ment to drive the eective implementation of the Company's talent strategy. To this end, we have formulated the PersonnelManagement System, which species relevant details on employee recruitment, employment contracts and social insurance,compensation and assessment, professional and technical evaluation and appointment, etc.

Employee Development Risk Management

To ensure equal job oppounities and career development space for all, the company hasalways adhered to the principles of fairness, equity, and openness in talent selection andemployment. In the talent evaluation process, we comprehensively consider an individual'seducational background, professional skills, and work experience to ensure the transparen-cy and fairness of the selection process.We commit to eliminating workplace sexual harassment that violates human dignity andoccurs against others' will, as well as abuse of power.Our company does not recruit child labor under the age of 16, nor use prison labor, forcedlabor, bonded labor, or slave labor or engage in human tracking. For minor workers aged16 to 18, we strictly comply with the national regulations on the protection of minorworkers as stipulated in the Minor Worker Protection Law.

Fairness andTransparencyAnti-Harassment

We attach great impoance to protecting employees' personal privacy and will not disclosetheir personal privacy information to the public without their consent.

Personal PrivacyProtection

Anti-Child Laborand Anti-Forced Labor

Employee Development Strategy

Our overall employee development strategy is formulated by the Board of Directors, implemented by the executive managementteam. As the prima depament responsible for corporate human resources, the HR Depament oversees the execution of allemployee development matters including compensation & benets, diversied employment models, labor rights protection, andsta training programs - ensuring full protection of employee rights and interests.

Compliant EmploymentEqual Employment

Requirement

Application

Review

Probation Period

Application and Approval of Manpower Requirements: The annual manpower requirementplan of each depament and the application for job requirements outside the annual planshall be submitted to the competent leader for approval.

Enter the hiring or internship depament to undergo the probation period.

Review of Recruitment Candidates: The Human Resources Depament is responsible for reviewing thequalications and credentials of recruitment candidates (including those recommended by depa-ments), and shall conduct professional knowledge, competence, and quality assessments andinteiews in conjunction with depament heads and other relevant personnel.

1. For proposed hires, conduct pre-employment reviews based on the materials attached to the New

Employee Onboarding Notice, complete the onboarding conrmation form, and obtain a commitmentto the authenticity of the materials;

2. After passing the qualication review, conduct onboarding training and education (company policies,

employee handbook, work safety, occupational health, etc.), and sign labor contracts;

3. Personnel who have previously worked in special positions such as welding, aw detection, and

painting must rst undergo occupational health examinations, and their eligibility for onboarding shallbe determined based on the examination results.

Measures for Managing the Employee Recruitment Process

Employment Principles

Key Peormance Indicators (KPIs)

Recruited 33 talents (including 11 fresh graduates),with23 employees leaving and 21 retiring.

2024

Sustainability Repo 49|50

LANPEC Holds 2024 Mid-Autumn Festival Employee Care Event

In recent years, LANPEC's engineering projects haveexperienced rapid development, leading to an increasingnumber of eld personnel from the Engineering ManagementDepament working on-site. Due to work demands, theseemployees have fewer oppounities to return home and spendtime with their families. Prior to the Mid-Autumn Festival, theCompany's labor union invited family members of these eldemployees to the Shanghai base. Company leaders held asymposium with the families to listen to their thoughts andconcerns. A live video call was arranged with the employees atproject sites, allowing eveone to better understand theworking conditions and challenges faced on the ground. Thecompany distributed festive care packages to the families inappreciation of their long-standing suppo and understand-ing.Wang Jian, representing the Company's Pay Committee andexecutive leadership, extended holiday greetings to all eldpersonnel and their families. He emphasized thatBlueSci-Tech's growth is built upon the hard work of eveemployee and the silent suppo of their families. He assuredthat the labor union would make eve eo to addresschallenges in both work and personal life, fostering collectiveprogress toward a brighter future.

We rmly put an end to any form of employment discrimination and ensure that employees' work rights and development oppor-tunities are not aected by factors such as race, color, age, region, gender, sexual orientation, disability, height, religious belief,political stance, community identity, or marital and pregnancy status.Equality and Diversity

The Human Resources Depament of LANPEC has formulated systems such as the LANPEC Peormance Appraisal ManagementMeasures, LANPEC Compensation Management Measures, and LANPEC Cadre Management Measures. These regulations clarifythe implementation rules for peormance appraisal and bonus distribution in functional depaments, business and R&D depa-ments, and production sector depaments, while standardizing the compensation management system. In 2024, the Companyfuher advanced the "Six Fixed" plan, namely xing organizational structure, positions, stang, job grades, personnel, andcompensation, continuously optimizing human resource management to enhance organizational eciency and employee incen-tive mechanisms. To fuher motivate employees and ensure the compensation management system can eectively drive incen-tives, the company improved the compensation management system by addressing existing issues and aligning with its currentdevelopment stage.

Compensation & Benets Management

The Company provides employees with social insurance, welfare benets, and additional perks such as regular health check-upsand holiday bonuses. Relevant documents, including the Employee Welfare Guidelines, have been established to ensure eectiveimplementation and continuous optimization of these benets. In line with regional characteristics, LANPEC grants high-tem-perature subsidies to employees in Shanghai and heating allowances to those in Lanzhou. Additionally, the company contributesto corporate annuities in both locations and strictly adheres to local regulations for social insurance payments, safeguardingemployees' rights and interests.

Welfare & Care

The Company attaches great impoance to talent recruitment and retention. In 2024, the Company strengthened talent retentioneos by optimizing the compensation incentive mechanism and promoting other relevant measures. To ensure the stability ofkey talents, the Company actively motivates and retains employees who can currently suppo future development work, ensurestheir past contributions are recognized, and enhances their work motivation through continuous incentive measures. At the sametime, when retaining talents, the company follows the principle of cost reduction and eciency improvement, balances thenumber of recruits and costs, mainly motivates talents in core key positions, and adopts dierent talent retention strategies basedon the Company's strategic priorities and the responsibility value of each position.

Talent Recruitment and Retention

Measures for Talent Recruitment and Retention

Employee Benets & Well-being

ProductionpersonnelSalespersonnelTechnicalpersonnelFinancialpersonnelAdministrativepersonnel

Graduate studentand aboveUndergraduateJunior collegeand below

LANPEC Paicipates in Group Company's 2024 Dragon Boat Race

On the eve of the Dragon Boat Festival, LANPEC's "Blue Lightning" team made itsdebut in the parent company's dragon boat competition as a rst-time paicipant.With strong suppo from the Company's Pay Committee and Labor Union, theteam learned from experienced sister companies while overcoming numerouschallenges including limited training facilities, lack of professional coaches, andcrew members' inexperience in water spos.Through intensive one-month training, the team signicantly improved theirphysical conditioning, technical skills, and teamwork coordination. In the ercelycontested race, they achieved a remarkable time of 1 minute 38 seconds, earningthem the Third Prize.

MeasureContent

Talent RecruitmentSchool-Enterprise Cooperation

Talent Retention

Establish in-depth cooperation with universities to train and recruit outstandinggraduates through targeted programs.

Oer internship oppounities, paicipate in campus job fairs, and establish stableuniversity-enterprise talent recruitment channels.Establish an annual Outstanding Employee Award program to enhance sta loyaltyand motivation.

Sustainability Repo 51|52

LANPEC Competes in 2024 Parent Company Spos Games

On May 25, 2024, the grand 8th Employee Spos Games of the parent company was held at Wutaishan Stadium. Nearly 1,000 athletesfrom 10 delegations—including group headquaers, managed enterprises, and subsidiaries—gathered for this spoing extravaganza.After a full day of intense competition, the "New Blue Synergy Team," jointly formed by LANPEC and SUMEC, demonstrated tenaciousperseverance, self-transcendence, and an indomitable spirit, ultimately achieving outstanding results.With less than a month of preparation, team members rigorously followed training regimens—from foundational tness to competitivedrills—pushing their athletic potential to the limit. Each athlete honed their competitive edge, optimized training cadence, and strength-ened mental resilience, striving for peak peormance.LANPEC’s athletes embodied an unyielding competitive ethos and vibrant team spirit, peectly interpreting the corporate motto:

"Pursue excellence until limits break; Heaven rewards diligence—turning ‘impossible’ into ‘possible.’" Their drive has become a poweulforce propelling LANPEC’s high-quality development.

LANPEC Holds 2024 International Women's Day Themed Event

To create a vibrant and uplifting festive atmosphere in celebration of the 114th International Women's Day, LANPEC organizedspecial activities under the theme "Passionate Spring · Brilliant Lives".The Shanghai facility hosted a "Haipai Flower Arrangement" workshop. Under professional guidance, female employees enthusias-tically learned and practiced, immersing themselves in the charm of oral a amidst fragrant blooms. Deputy Pay Committee SecretaGao Wei and Labor Union Chairman Wang Hong extended heafelt gratitude and best wishes to all female colleagues. The Lanzhoubase held a festive gathering featuring traditional hulusi ute solo, solo peormances and chorus, poet recitation, dance routines andmedleys. Through graceful melodies, inspiring songs, and heafelt peormances, the gala showcased the multifaceted talents andaspirational spirit of women in the new era.

Key Peormance Indicators (KPIs)2024

Sustainability Repo 53|54

At LANPEC, employee communication and paicipation are regarded as impoant cornerstones of corporate development. TheCompany is committed to building a comprehensive and multi-level communication and paicipation system to promote deepunderstanding and close collaboration between employees and the enterprise, jointly driving the Company's sustained progress.The Company also continuously improves the organizational structure of labor unions and strengthens grassroots trade unionwork. In 2024, in response to changes in the personnel of trade union committees and adjustments to organizational structures,the Company supplemented and elected new trade union committee members and a trade union chairman in accordance withthe provisions of the Trade Union Law of the People's Republic of China and the Constitution of the Chinese Trade Union. It alsocarried out general elections for grassroots trade union organizations and established thieen grassroots trade unions to betterrepresent and see employees, and promote continuous communication and development between the company and itsemployees.

Employee Grievance & Communication

We have formulated systems such as the New Employee Onboarding Training Manual to enhance employees' professional knowl-edge, business competence, and work capabilities, continuously cultivate and deliver outstanding talent with both moral integrityand professional skills for various positions, suppo the achievement of the Company's strategic goals, and promote the commondevelopment of LANPEC and its employees. We continuously optimize and upgrade the training system, closely integratingbusiness priorities and challenges, and create a series of branded training programs around six dimensions: operational manage-ment, professional technology, professional literacy, talent echelon, new hires, and instructors, fuher strengthening theconstruction of a business-oriented talent team.

Employee TrainingEmployee Benets & Care

LANPEC Conducts Election for the 3rd Workers' Congress RepresentativesIn November 2024, the Company held the election of deputies to the Third Sta Congress. A total of 13 electoral districts were set upfor this election, with elections conducted by pay branches as units. In accordance with the allocated number of deputies and theeligibility criteria for sta representatives, each electoral district strictly followed the electoral procedures and elected sta representa-tives through secret ballot. The Congress successfully elected 80 sta representatives, covering company leaders, middle-level manag-ers, key employees, and ordina sta. The representatives expressed their commitment to earnestly fullling their representativefunctions and democratic rights, and eectively safeguarding the legitimate rights and interests of employees.

LANPEC 2024 New Employee Onboarding Program

On July 24, 2024, the training for newly recruited campus hires of LANPEC in 2024 was ocially launched. Before the training, theCompany carefully prepared a "one-stop" orientation seice covering various links such as station pick-up, accommodation arrange-ments, and onboarding procedures, creating a warm and comfoable atmosphere for new employees. During the training, heads of eachbusiness segment and functional depament respectively introduced the relevant work content of their segments and depaments,strengthening new employees' understanding of the company's operations.

IndicatorTotal Training InvestmentTraining Coverage RateAvg. Training Hours per EmployeeIncluding: Senior Management

Middle ManagementFrontline Sta

10k RMB%hourshourshourshours

57.98

62.5

84.5

61.6

60.5

86.1

73.5

Unit202220232024

Key Peormance Indicators (KPIs)LANPEC promoted 19 cadres to the level of assistant general manager of depaments or above,and30 cadres to the level of manager of seconda depaments or above.

2024

The Company strictly complies with relevant laws, regulations and policy requirements such as the Work Safety Law of the People'sRepublic of China, Law of the People's Republic of China on the Prevention and Control of Occupational Diseases, EnvironmentalProtection Law of the People's Republic of China and Fire Control Law of the People's Republic of China. In combination with theannual new regulato requirements of the supeiso authorities, the company continuously improves the construction of itssafety management system and management system to promote the company's safety operation level to a new stage.

Health & Safety

We always place employee career development in a critical position, committing to building a scientic, transparent, and diversi-ed career promotion system. We continuously improve the construction of talent growth pathways and have formulated institu-tional documents such as the Cadre Management Measures.In 2024, Lanpec High-Tech established career development pathways based on six sequences—management, professional(functional, technical), business (sales, engineering), and skills—considering the company's current development stage, employeecompensation, and the development needs of various talent groups. This includes establishing job grades and correspondingcompensation systems.To fuher strengthen the philosophy of "focus on strivers, high-peormance orientation," we explore the establishment of ascientic and reasonable peormance evaluation mechanism to fully mobilize the enthusiasm and initiative of cadres and employ-ees, improve work eciency and quality, and ensure the eective achievement of the company's annual goals and tasks.

Peormance Evaluation & Career Progression

The Company attaches great impoance to the identication and management of hazard sources and occupational diseases. Ithas formulated the Safety Risk Classication and Control System, continuously optimized the safety risk identication mechanism,deepened the application of risk assessment management tools, and promoted the systematic, standardized, standardized, andinformatized risk identication and assessment to build a dual prevention mechanism for safety risk classication and control andhidden danger investigation and treatment. The Company carries out safety risk identication and assessment eve year, formu-lates control measures, and eliminates safety weaknesses.In May 2024, guided by the established system documents, the Company's Work Safety Oce, as the leading force, coordinatedand assembled various depaments to form a special work team to comprehensively and deeply re-identify, scientically assess,and reasonably classify environmental factors, safety risks, and hazard sources in all internal depaments and operating sites. Onthis basis, the work team fuher revised and updated two core management documents of the company: the Compilation ofSafety Risks, Hazard Source Identication, Assessment and Graded Control and the Compilation of Environmental Factor Identica-tion, Evaluation and Control. These measures aim to ensure that the Company's safety risks are always kept under strict andmanageable control, thereby improving the overall safety management eciency.

The Company regards employee safety knowledge training as a vital component of its occupational health and safety protectioneos. It has formulated regulations such as the Work Safety Education Management Regulations and established a comprehen-sive employee safety education and training system to deliver targeted safety education, enhance employees' safety awareness,and eectively improve the knowledge level of occupational health and safety managers.During the Publicity Week for the Occupational Disease Prevention and Control Law, the Work Safety Oce carried out a seriesof activities themed "Adhering to Prevention as the Priority and Safeguarding Occupational Health." The Company organizedrelevant personnel to paicipate in the themed training on the Occupational Disease Prevention and Control Law conducted bythe group and distributed related promotional materials. Meanwhile, through the Company's internal network, electronic screensbroadcasting promotional videos, hanging banners, and posting posters within the company, multiple channels were used toimprove frontline employees' awareness and prevention capabilities regarding occupational diseases.Additionally, the Company actively urges all depaments to car out special occupational health and safety training and organiz-es employees to paicipate in occupational health knowledge quizzes to enhance the overall occupational health awareness ofthe workforce.

Identication and Assessment of Occupational Health & Safety Risks

Safety Culture DevelopmentHealth & Safety Strategic Framework

LANPEC attaches great impoance to safety and health management. It has formulated systems such as the Implementation Rules for the InterimProvisions on Dual Accountability of Pay and Government for Work Safety and One Post, Two Responsibilities and the Work Safety ResponsibilityTarget Assessment Measures. The Company has established a Work Safety Committee with the Chairman as the rst responsible person, which issubordinate to a Work Safety Oce specically responsible for the implementation of safety work.Health and Safety Management Framework

Health & Safety Risk Management

Sustainability Repo 55|56

Work Safety Management Depament

Work Safety Oce

Pay Committee Work Depament

General Administration OceBoard of Directors Oce

Discipline InspectionCommission OceHuman ResourcesDepament

Operations ManagementDepament

Science and TechnologyDevelopment Depament

Assets and FinanceDepament

Audit Depament

Legal Aairs Depament

Quality ManagementDepament

Safety and EnvironmentalProtection Depament

Manufacturing Branch

LANPEC (Shanghai)

Lanzhou Testing Institute

LS Group Branch

Product Branch

Work Safety CommitteeDeputy Work Safety OcerAssistant to the General Manager

Prima Corporate Responsible PersonPay Committee Secreta & Chairman of the Board

LANPEC Occupational Health andSafety Management System Ceication

In order to eectively prevent and control occupational hazard factors in the workplace and ensure employees' occupationalhealth and safety, LANPEC has issued 12 rules and regulations related to occupational health and safety, including the Occupa-tional Disease Hazard Prevention and Control Responsibility System, Occupational Health Examination Management Regulations,Occupational Disease Prevention Publicity and Education Training System, Occupational Disease Hazard Warning and NoticationSystem, and Occupational Disease Hazard Monitoring and Evaluation Management System. The Company strictly complies withlegal and regulato requirements, implements the main responsibility of the enterprise, actively adopts protective measures toreduce or eliminate occupational hazards, provides employees with adequate occupational health protective equipment, andorganizes annual occupational health examinations for employees in hazard-exposed jobs to ensure a 100% qualication rate inoccupational health examinations.

The Company has formulated the Work Safety Accident Emergency Plan (Version G), which covers a comprehensive emergencyplan for work safety accidents, 11 special emergency plans, and 5 specic on-site disposal plans. An emergency responsecommand center has been established with the General Manager as the Director and depament heads as members; anemergency response team led by the safety supeisor with safety supeisors of each depament and work safety managementpersonnel as members; and an emergency rescue team composed of workshop directors, team leaders, and operators. This hasformed an ecient and responsive emergency rescue system, implementing an operational mechanism featuring uniedcommand, hierarchical response, resource sharing, coordinated operations, a combination of professional and pa-time capabili-ties, and integration of prevention and rescue.In 2024, a total of 10 batches of drills were carried out, accompanied by training, which tested the operability of the company'semergency rescue and response system, improved the emergency response capabilities of employees and relevant depamentsto sudden accidents, enhanced the disaster prevention and avoidance awareness of frontline employees, enabled rapid, orderly,and safe evacuation and rescue in the event of production accidents, minimized losses caused by accidents, and safeguardedemployees' lives.

In 2024, the Company formulated the Hazardous Chemicals Management System to strengthen the management of storage,utilization, and disposal of hazardous chemicals. Specically, the Company purchased and replaced seconda anti-leakagepallets for the paint warehouse and hazardous waste warehouse, posted eye-catching safety warning signs and Material SafetyData Sheets (MSDS) for hazardous chemicals, equipped the paint mixing room with combustible gas alarms and ventilationfacilities, and reapplied epoxy treatment to the oor of the hazardous waste warehouse.On July 25, 2024, the Company organized a special emergency drill for hazardous chemical leakage accidents. This aimed tostandardize the management and emergency response procedures for hazardous chemicals, ensure timely and eective imple-mentation of emergency measures in case of chemical leaks, minimize casualties and propey losses, protect the ecologicalenvironment, and safeguard the lives and propey of employees.

Promoting Employee Health

Emergency Management

Chemical Safety

LANPEC Occupational Disease Prevention & Legal Compliance Training Program

On April 18, 2024, the Company invited a special lecturer from Safety and Health Network to conduct an occupational health trainingsession for all personnel exposed to hazards in Production Depament I, including welders, shot blasting/painting operators, awdetection workers, and thermal cutting operators. The training covered topics such as occupational disease prevention and related lawsand regulations, prevention and improvement of common occupational diseases and chronic illnesses (pneumoconiosis, noise-induceddeafness, radiation sickness, cardiovascular and cerebrovascular diseases, ceical spondylosis), and enhancement of mental healthliteracy and healthy lifestyle for employees.

Sustainability Repo 57|58

LANPEC 2024 Fire Emergency DrillOn November 21, 2024, the Company organized a production safety accident and re-ghting drill, simulating and explaining theprocess of cardiopulmona resuscitation (CPR) for rescue on site. It also explained the usage methods of re-ghting equipment suchas re extinguishers and re hydrants, and organized hands-on practical experience.

Environmental Peormance

Appendix

Social Peormance

Quantitative Peormance Dashboard

Sustainability Repo 59|60

2024UnitIndicator

2024UnitIndicator

Total Employees- Postgraduates and above

- Undergraduates- Junior college and belowLabor contract signing rateFive social insurances andhousing fund coverageTotal investment in employee trainingEmployee training coverage rateAverage training hours per employee

- Senior management- Middle management- Frontline employees

Product recall rateProduct qualication rate

Product return rateNumber of R&D personnelNumber of authorized patent projectsNumber of invention patent applicationsNumber of authorized invention patents

Total investment in public

welfare and charityNumber of data security incidents

Number of customer privacyleakage incidents

PersonsPersonsPersonsPersons%%10,000 yuan

%HoursHoursHoursHours

%

%

%Persons

ItemsItemsItems10,000 yuan

CasesCases

1,013

86.1

73.5

Total environmentalprotection expenditure

Scope 1direct greenhouse gas emissions

Scope 2energy indirect greenhouse gas emissions

Total Water Withdrawal

Total domestic wastewater discharge

Total non-hazardous waste generated

Total hazardous waste generated

Total Waste Recycled/Reused

10,000 yuan

tCO2e

tCO2e

Tons

Cubic meters

Tons

Tons

Tons

475.00

2,705.60

2,989.52

127,786.00

108,04

1,084.62

70.34

899.22

Repo Index

Sustainability Repo 61|62

Governance Peormance

2024UnitIndicator

Propoion of independent directors

Propoion of female directors

Number of public announcements issued

Anti-corruption trainingcoverage rate for directors

Anti-corruption trainingcoverage rate for depaments

Anti-corruption trainingcoverage rate for employees

Signing rate of IntegrityCooperation Agreement with suppliers

%

%

Documents

%

%

%

%

Related ChapterTopicCategorization

Environmental

1. Climate Change Response

Climate Action andEnvironmental Protection

2. Pollutant EmissionsEnvironmental Management System

3. Waste ManagementEnvironmental Management System

4. Ecosystem & Biodiversity ProtectionBiodiversity Conseation

5. Environmental Compliance

Management

Environmental Management System

6. Energy UtilizationResource Eciency & Energy Savings

7. Water Resource UtilizationResource Eciency & Energy Savings

8. Circular EconomyResource Eciency & Energy Savings

Social

9. Rural RevitalizationSocial Welfare & Rural Development

10. Social ContributionSocial Welfare & Rural Development

11. Innovation-Driven DevelopmentTechnological Innovation

12. Technology EthicsNot Covered

13. Supply Chain SecurityResponsible Supply Chain

14. Equal Treatment of SMEsEqual Treatment of SMEs

15. Product Safety & QualityProduct & Seice Quality Focus

16. Data Security & Customer

Privacy Protection

Information Security andEmergency Protection

17. EmployeesEmployee Development & Safety

Sustainability Development18. Due DiligenceStakeholder Communication

Governance

19. Stakeholder CommunicationStakeholder Communication

20. Business Ethics and Anti-Corruption

Compliance Framework

Business Ethics & Anti-Corruption

21. Fair CompetitionBusiness Ethics & Anti-Corruption

Shanghai Stock Exchange Self-Regulato Guidelines No. 14 – Sustainability Repo (Trial)