Satellite Chemical Co., Ltd.

Stock code：002648

2024

Environmental, Social and

Governance Report

Chemicals Make a Better Life

CONTENTSSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Focusing on Low-Carbon StrategiesAddressing Climate ChangeStrengthening Environmental ManagementEcological Co-building

Safeguarding Employee Rights and Bene?tsGrowing Together with EmployeesRobust Safety PracticesFul?lling Corporate Social Responsibility

Strengthening ESG ManagementCompliant and Stable OperationsStrengthening Risk Prevention and Control

Empowering Development throughTechnology InnovationHigh-Quality Products and ServicesAdvancing Responsible ProcurementPromoting Industry Development

CONTENTS

Appendices

About This Report

Message from our Chairman

About STL

Company Pro?leAwards and Honors

OutlookHonors in 2024Index of Reporting GuidelinesESG Performance Indicators

01020304

E?cient Governance forSteady and Long-Term Growth

Innovation to Foster anExcellent Brand

Dual Carbon Goalsfor Green Development

Building a Harmonious Societywith People at the Heart

0302

About This ReportSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

About This Report

Description of the Report

This report is the ?fth annual Environmental, Social, and Governance (ESG) report of Satellite ChemicalCo., Ltd. (hereinafter referred to as "this report"). It provides a factual and objective overview of theCompany's sustainability activities in 2024, with a focus on its social, environmental, and governanceperformance.

InformationSources

The information and data disclosed in the Report are from the Company's statistical informationor o?cial documents. The currency amounts involved are measured by the Renminbi (hereinafterreferred to as the "RMB").Report Scope

Reporting Period: January 1, 2024, to December 31, 2024 (hereinafter referred to as the "reportingperiod"). Some information may extend beyond this period. This report is an annual report.Organizational Scope: This report covers Satellite Chemical Co., Ltd, unless otherwise speci?ed.

Con?rmationand Approval

The Report was prepared by STL's ESG report drafting team and approved for release by theBoard of Directors on March 24, 2025, upon con?rmation by the management.Basis ofPreparation

This report is prepared with reference to the Shenzhen Stock Exchange Guide No.1 on Self-Regulation of Listed Companies: Standardized Operation of Companies Listed on the Main Board(Revised in December 2023), theShenzhen Stock Exchange Guideline No.1 on Self-Regulationof Listed Companies: Business Matters (Revised in 2023),Shenzhen Stock Exchange GuideNo.17 on Self-Regulation of Listed Companies: Sustainability Reporting (Trial), andGuide No.3on Self-Regulation of Listed Companies No.3: Sustainability Reporting Preparation,EnterpriseSustainability Disclosure Standards: Basic Guidelines (Draft for Comments)issued by theMinistry of Finance, theGRI Standardsissued by the Global Reporting Initiative (GRI), theIFRSSustainability Standards Standard 1: General Requirements for Disclosure of Sustainability-related Financial InformationandIFRS Sustainability Standards 2: Climate-related Disclosurespublished by the International Sustainability Standards Board (ISSB), the United NationsSustainable Development Goals (UN SDGs),Climate-related Financial Disclosure Guidelinesissued by the Task Force on Climate-related Financial Disclosures (TCFD) , the MSCI ESG RatingMethodology for Commodity & Diversified Chemicals Industry, and theChina EnterpriseSustainability Reporting Guidelines (CASS-ESG 6.0).

Disclaimer

The forward-looking statements in this report, other than statements of historical facts,are those concerning the Company's anticipated or expected business activities, events ordevelopments that may occur or are expected to occur in the future. Actual results or trends inthe future may di?er materially from these forward-looking statements as a result of a rangeof variables. The Company made the forward-looking statements contained in this reportprior to March 24, 2025 and undertakes no obligation or duty to update them, unless otherwiserequired by regulatory authorities.

Description ofDesignations

For ease of presentation and reading, the terms "the Company", "Satellite", "STL" and "we/us"in this report refer to "Satellite Chemical Co., Ltd." and its subsidiaries. Other de?nitions are asfollows:

Access andFeedback

The Report is available in both simplified Chinese and English. In case of discrepanciesbetween the two versions, the simpli?ed Chinese version shall prevail.We value the opinions of all parties and welcome readers to contact us in the following ways.Your comments are valuable to us and will help us improve our ESG performance.

Postal Code314050

Address

No. 196 Fuqiang Road, Nanhu District, Jiaxing, ZhejiangProvince, China

Telephone(86)573-8222 9096

O?cial website

E-mailesg@weixing.com.cn

https://www.stl-chem.com

STL Technology Zhejiang Satellite New Material Technology Co.,Ltd.refers toYoulian ChemistryZhejiang Youlian Chemistry Industry Co.,Ltd.refers toPinghu Petro Chemical Pinghu Petro Chemical Co., Ltd.refers to

Satellite EnergyZhejiang Satellite Energy Co., Ltd.refers toLianyungang Petrochemical Lianyungang Petrochemical Co., Ltd.refers to

Jiahong New MaterialJiangsu Jiahong New Material Co., Ltd.refers to

Satellite GlobalSatellite Global Chemical (Shanghai) Co., Ltd.refers toSatellite Industrial Zhejiang Satellite Chemical Industrial Co., Ltd.refers toJiaxing Base the Company's production facilities in Jiaxing Science and Technology Cityrefers toPinghu Base the Company's production facilities in Dushan Port, Pinghurefers toLianyungang Base the Company's production facilities in Xuwei New District, Lianyungangrefers to

Message from our Chairman

This year, we refined our management practices andensured compliant operations to safeguard the Company'ssteady and long-term growth.

We continuously optimized corporate governance, activelyresponded to the new "Nine National Guidelines," upheldcompliance principles, strengthened our governanceframework, and established a robust internal controlmanagement system. These efforts enhanced our corecompetitiveness and comprehensive risk managementcapabilities, providing strong protection for shareholders'legitimate rights and interests. We remained committedto business ethics, reinforced anti-corruption measures,and maintained open communication channels with allstakeholders, fully integrating ESG principles into corporategovernance to maximize economic, environmental, and socialbenefits, while injecting fresh momentum into high-qualitydevelopment with new productive forces. In 2024, we wererecognized among the Top 100 Most Valuable Main BoardListed Companies, the Fortune China 500, Zhejiang's Top 100Enterprises, Zhejiang's Top 100 Manufacturing Enterprises,Zhejiang's Fastest-Growing Top 100 Enterprises, and Jiaxing'sTop 100 Private Enterprises. Additionally, we were includedin the Shenzhen 100 Index, continuously striving for higherachievements and embracing innovation on our path forward.

The year 2024 is a crucial year for fullyimplementing the guiding principles of the20th National Congress of the Communist Partyof China and a pivotal year for advancing the"14th Five-Year Plan" development strategy.Against the backdrop of transformation andreconstruction, with both opportunities andchallenges coexisting, STL remains committedto its mission of "Chemicals Make a BetterLife." The Company continues to deepen itsstrategies of "Management Leadership" and"Technology Leadership", fully integrating theprinciples of new development concepts and therequirements of a new development paradigminto its innovation, research, and productionpractices in light hydrocarbon utilization andgreen chemical materials. STL steadfastlypursues a green, low-carbon, and sustainabledevelopment path, focusing on the continuousinnovation in functional chemicals, advancedpolymer materials, new energy materials,hydrogen energy, and carbon dioxide utilization.By driving the industrial chain toward intelligent,sustainable, and high-end development, theCompany is forging a new chapter in high-qualitygrowth.

Fulfilling Responsibility: Talent Development to DriveSocial InclusionWe are committed to providing a fair, inclusive, and diversework environment with opportunities for growth. Prioritizingemployee well-being and rights protection, we fosterinnovation and creativity through incentive mechanismsthat drive continuous talent development and progress. Wealign business growth with social responsibility, activelyaddressing societal needs and ful?lling our corporate duties.Through our corporate-sponsored charitable foundation, weorganize philanthropy projects and volunteer services. Oure?orts were recognized with the ESG Action Award for "RuralRevitalization and Social Development", contributing toadvancing rural revitalization and shared prosperity.We have seen great accomplishments in the past year, anda new chapter now awaits. STL will continue to focus onits core responsibilities and businesses, seizing strategicopportunities by focusing on the development directionof "establishing new productive forces". The Companywill leverage "Green and Low-carbon" and "TechnologicalInnovation" as dual engines to build an integrated greenindustry chain starting from the clean raw materialsstage. We will continuously meet the needs of strategicallyemerging industries and people's growing demand for agreener and higher quality life, leading towards a moresustainable future.

Advancing Green Development: Low-Carbon IndustrialModels for a Sustainable FutureWe actively respond to China's "carbon peaking and carbonneutrality" strategy by deepening the implementationof the "4R" green development model and increasinginvestment in projects related to "dual carbon" goalsand clean technologies, driving the lightweighting ofpetrochemical raw materials and promoting green andlow-carbon development. As one of the country's first"Green Champion Enterprises," we are committed to asustainable development path that is green, low-carbon, andcircular. By leveraging technological innovation to enhanceenvironmental value, we continuously explore energy-saving, consumption-reducing, quality-improving, ande?ciency-boosting initiatives. We implement technologicalimprovements, strengthen emissions management,participate in biodiversity and ecological protection e?orts,and minimize the environmental impact of our productionand operations in order to achieve a win-win balancebetween economic growth and environmental benefits. In2024, we were selected for both the Excellent Practice Casesof Sustainable Development for Chinese Listed Companiesand the Top 100 list of ESG Performance for Zhejiang ListedCompanies.

Pioneering Innovation: Technology-Driven Growth with NewDevelopment Momentum

We remain committed to an innovation-driven developmentstrategy, continuously increasing R&D investment andadvancing the construction of our future research center.By aligning with national strategic directions and industrydevelopment needs, we are building innovation platformsto tackle key challenges in high-performance catalysts, newenergy materials, advanced polymer materials, and functionalchemicals. Through continuous e?orts to extend, strengthen,and optimize our industrial chains, we are acceleratingprojects such as high-end polyolefin materials, high-endpackaging materials, and comprehensive hydrogen energyutilization. These initiatives add additional industrial valueand market competitiveness.We deeply understand customer needs, providing customizedsolutions while actively expanding domestic and internationalmarkets. Through strengthening cooperation and exchangeswith upstream and downstream enterprises, we fosterstrategic partnerships and industry collaboration to drive high-quality development in the petrochemical sector, buildingnew growth pillars in the modernization process. In 2024, wewere recognized among the Top 100 New Materials Enterprisesin China, the Forbes China 50 Most Innovative Companies, theAnnual Provincial 5G Fully Connected Factory List， and 2024Zhejiang Province Arti?cial Intelligence Application Scenarios.

Chairman of STL ?Yang Weidong

Message from our ChairmanSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

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About STLSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

About STL

Company Pro?le

Satellite Chemical Co., Ltd. was established in 1992 and listed on theShenzhen Stock Exchange in December 2011 (Stock Code: 002648).The Company possesses a domestically leading light hydrocarbonintegrated industrial chain and has established an independentlycontrollable global light hydrocarbon supply chain. It utilizes greentechnologies to produce functional chemicals, advanced polymermaterials, and new energy materials, while comprehensivelyharnessing carbon dioxide and hydrogen energy. The Company'sproducts are applied across vital national and civilian industriesincluding aerospace, automotive, electronic semiconductors,healthcare, nutrition and personal care, sports and fitness,construction engineering, and ecological environment. Thisaligns with the national petrochemical industry's direction towardlightweight feedstock and contributes to achieving the country's"dual carbon" goals. The Company continuously promotes the "4R"green development concept and has been winning honors includingNational Manufacturing Champion Example Enterprise, NationalGreen Supply Chain Management Enterprise, National GreenFactory, Key National Industry Energy E?ciency "Pacesetter", andKey National Water-Using Enterprises Water E?ciency "Pacesetter".

About the Company

Satellite Chemical has established two integrated industry chainscentered around green, low-carbon raw materials - C2 and C3. TheCompany focuses on developing products including polyethylene,polypropylene, polyole?n elastomers (POE), superabsorbent polymers(SAP), acrylic acid and esters, and hydrogen peroxide, forming threemajor sectors: functional chemicals, new energy materials, and high-performance polymer materials. STL is the first domestic Companyto establish ethane export facilities overseas, successfully openingChina's first global ethane supply chain, while introducing clean rawmaterials to build domestic ethane cracking process facilities, formingan integrated C2 industry chain. Additionally, STL is the ?rst domesticenterprise to build and introduce Propane Dehydrogenation (PDH)facilities using American UOP technology, establishing an integratedC3 industry chain. In recent years, STL has deepened its efforts inadvancing "Management Leadership" and "Technology Leadership",relying on technological innovation and modern enterprise systemconstruction to continuously maintain the market competitiveness ofits industry chains and products.

Business Layout

STL has cultivated a corporate culture with "synergy"as the core value. The Company maintains Custom-er-Centric, Perseverance and Hard Work, ContinuousImprovement, uniting like-minded individuals tocollectively pursue the corporate vision. Under therequirements of "Management Leadership" and"Technology Leadership" , the Company strives todeliver product excellence and brand distinction,aiming to become an enterprise respected by societyand a source of pride for employees. STL is dedicatedto becoming a world-leading technology enterprisein advanced chemical materials, positioning itselfamong the global chemical industry leaders.The Company continuously advances people'spursuit of a happy and beautiful life. We consistentlygenerate tax revenue for the regional economy, cre-ate pro?ts for investors, and provide income for em-ployees, promoting high-quality social and economicdevelopment and advancing common prosperity.The Company has developed a "seven-quality"cadre team characterized by having: cultural belief,strategic vision, responsible commitment, resilientdetermination, learning and innovation capabilities,outstanding performance, and professional stand-ards.

Corporate Culture

The Jiaxing Basehas been developed into a high-value-added advanced polymer materials

industrial cluster

The Pinghu Base

has been built into a C3 integrated industrychain using propane as a raw material The Lianyungang Basehas been developed as a new materialsindustry chain utilizing diversi?ed raw

materials

The Company has now establisheda strategic layout consisting of oneheadquarters and three major bases.

Through the coordination of upstream

and downstream industry chains,the Company has constructed a sustainable

development ecosystem.

Vision

Dedicated to becoming a world-leadingtechnology enterprise in advanced chemical

materials

MissionChemicals makea better life

Core Value

Customer-Centric,Perseverance and Hard Work,Continuous Improvement

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About STLSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Awardsand Honors

Industry LeadershipInnovation LeadershipInclusion in the Shenzhen 100 IndexShenzhen Stock Exchange, ShenzhenSecurities Information Co., Ltd.

Value Companies Listedon the Main BoardSecurities Times

Forbes China's 50 Most Innovative

CompaniesForbes China

National 2023 Industrial Internet Pilot

Demonstration 5G Factory

Ministry of Industry and InformationTechnology of the People's Republic of China

China's Top 100 New Materials Companies

Hurun Research Institute

Selected for Zhejiang's Second

Batch of "Eagle Enterprises"Zhejiang Provincial Departmentof Economy and Information

Technology

Included in the "2024 Zhejiang Arti?cialIntelligence Application Scenarios List"Zhejiang Provincial Departmentof Economy and Information

Technology

ESG Leadership

First Batch of "Green Leading Enterprises"(Subsidiary Lianyungang Petrochemical

received this award)China Quality Certi?cation Center

Outstanding SustainableDevelopment Practice Case forListed CompaniesChina Association for Public Companies

China Securities Journal, ChinaReform Holdings, NantongMunicipal GovernmentGuoxin Cup ? ESG Golden Bull Award

Social Responsibility ConferenceOrganizing Committee

Aona Award for Enterpriseswith Sustainable Development

Contribution

KPMGKPMG China's Second ESG·50 List

– Outstanding Social PioneerCailian PressCailian Press Zhiyuan Award -Environmental (E) PioneerEnterprise AwardResponsibility 100,CSR China Education Award"Rural Revitalization and SocialDevelopment" ESG Action Award

Sina FinanceChina Enterprise ESG "GoldenResponsibility Award"– Best Responsibility Progress Award

EY Greater ChinaOutstanding SustainableDevelopment Enterprise of the YearResponsibility 100,CSR China Education AwardCSR China Top 100Zhejiang's Top 100 ESGPerformance Listed CompaniesZhejiang Corporate Social ResponsibilityPromotion Association, CCXGF

UN SDGs

E?cient Governance forSteady and Long-Term GrowthSTL regards efficient governance as the cornerstone of its high-quality development. The Company continuously enhances itscorporate governance levels and risk prevention capabilities, upholding business ethics to ensure stable operations. Additionally,the Company places great emphasis on the quality of information disclosure, further advancing its modern governance system.By sharing development achievements with stakeholders and integrating ESG principles into all aspects of its operations, STLempowers its sustainable growth.Governance

STL has established a "Three-Tier Governance Structure (Board, Committees, Executive Management)"governance framework, ensuring a clear division of ownership, decision-making, supervision, andoperational responsibilities. In ESG governance, the Company has implemented a three-level ESGgovernance hierarchy comprising the Board of Directors - Strategy and ESG Committee - ESG Working Group,systematically driving the standardization and institutionalization of ESG initiatives.Strategy

The Company deepens the "Management Leadership" strategy. By strengthening institutional frameworksand optimizing processes, STL addresses the "Five Key Management Questions" and implements "FourTransformations", enhancing the depth, breadth, effectiveness, precision, and strength of corporatemanagement. By fostering institutional and systemic innovations, the Company also ensures sustainableand stable growth.Goals

Impacts,risks, andopportunities

STL integrates risk prevention, compliance management, and internal controls into its governance framework,focusing on the core business and key areas of operation and management. The Company systematicallyidentifies risks in areas such as integrity, information security, procurement, sales, external investments,and guarantees, reinforcing risk response mechanisms. Additionally, it enhances interpretation and investorcommunication on information disclosure, ensuring timely and effective responses to concerns from theinvestors. Systematic training for key management personnel was conducted to strengthen their complianceawareness, ensuring governance remains scienti?c, stable, and e?ective.

critical system downtime incidents

customer data breaches

Internal policies publication rate reaches80%

and above

100%

integrity training coverage for all employees, including interns, outsourced sta?,and part-time employeesNumber of integrity training: Company-level ≥

sessionsAudit and Supervision Department ≥

sessionsCenters, bases, subsidiaries, and business units ≥

sessions each

Optimizing investor relations, market valuemanagement, and shareholder returns

Enhancing informationdisclosure qualityImproving ESG performance

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Strengthening ESG Management

ESG Governance Structure

ESG Strategy

ESG Risk and Opportunity Management

STL has established a top-down ESG management structure consisting of the Board of Directors, the Strategy and ESG Committee,and the ESG Working Group to ensure the comprehensive execution and e?ective supervision of ESG responsibilities. The Board ofDirectors, as the highest decision-making body, is responsible for reviewing and overseeing the Company's ESG strategy, policies,and progress towards goals. The Board of Directors authorizes the Strategy and ESG Committee to guide and supervise ESGgovernance work; identify and assess major ESG risks and opportunities; approve major ESG investments and budget expenses;provide strategic advice; and supervise the advancement of ESG-related matters. The ESG Working Group, composed of liaisonofficers from various centers, bases, subsidiaries, and business units, is responsible for comprehensively following up on andimplementing all ESG-related work.

STL integrates sustainability responsibilities into its corporate development strategy, actively implementing international andnational standards. The Company has established a key sustainable development indicator system tailored to its characteristicsand has built a closed-loop management system. By strengthening coordination between ESG responsibilities and departmentaloperations, and ensuring integration across all levels, the Company continuously enhances its governance, competitiveness,innovation, and risk resilience, promoting both corporate and broader economic and social sustainability.

STL promotes the identification and assessment of ESG risks in daily operations, incorporating ESG responsibilities into thebusiness management decision-making system. At the same time, the Company is committed to integrating ESG factors intoinvestment decision-making, comprehensively evaluating and adjusting relevant variables to optimize investment decisionmodels, thereby achieving long-term and sustainable investment value.The Company incorporates ESG indicators into the performance evaluation system for senior management, which include, but arenot limited to, key areas such as workplace safety (e.g., number of safety incidents, safety-related penalties), energy conservationand environmental protection (e.g., greenhouse gas emissions, pollutant emissions, energy e?ciency management, environmentalpenalties), and labor rights protection. Each indicator is assigned a speci?c weight, and performance evaluation scores determinethe ?nal rating. Performance-related pay is then calculated based on these scores and ratings. The ESG performance assessmentis directly linked to the salary of senior management responsible for ESG matters. If ESG targets are not met, the correspondingassessment score is deducted, with up to 35% of the total performance score deducted. Additionally, in the event of a zero-tolerance incident, a "veto" policy is enforced to ensure the strict implementation of ESG governance. Regarding executivecompensation clawback mechanisms, the Company has established a penalty system for violations. The performance of boardmembers and senior executives is assessed, and di?erentiated penalties are set to align responsibility with risk. This ensures thatexecutive decisions and actions remain consistent with the Company's long-term interests and compliance requirements. Theremuneration plan for all directors, including executive ones, must be reviewed by the Board of Directors and approved by the General Meeting of Shareholders through voting before implementation.

ESG Management System

STL ESG Governance Structure

Overall planning, oversight,

and decision-making

Coordinationand executionBoard of Directors

Management, guidance,and advancementStrategy and ESG CommitteeESG Working Group

AuthorizesReports to

GuidesReports to

Ensuring ?nancialstability and transparentinformation disclosureby improving governancestructures and treatingshareholders andcreditors fairly

Strictly complying withlabor laws, safeguardingemployee health andsafety, and establishingcomprehensivecompensation, bene?ts,and career developmentsystems

Adhering to ethicalbusiness practices,enhancing productquality and services,and building a green,low-carbon, andcompliant supplychain ecosystem

Implementing the "dualcarbon" strategy, promotinggreen production andresource conservation,and strengtheningenvironmentalmanagement (includingstrategies and performanceon energy usage, waterresource management, andwaste management)

Actively participatingin social welfareinitiatives, ful?llingcorporate citizenshipresponsibilities,and contributing tosocietal prosperityand sustainabledevelopment

Protection ofShareholder andCreditor Rights

Protection ofEmployee Rights

Protection ofCustomer, Supplier,and Partner Rights

Environmental Protectionand SustainableDevelopment

PublicRelations andSocial Welfare

The three-tier ESG governance framework covers the following areas

Coordinate and drive theimplementation of ESGe?orts across the CompanyManage ESG risks in dailyoperationsPrepare the ESG reportHandle other ESG-relatedmatters

Provide input on the Company'sESG strategyIdentify and assess key ESG risksand opportunitiesReview and approve major ESG-related investments and budgetallocationsEstablish the ESG goalsevaluation systemReviews the Company's ESG reportand provide recommendations

Review and decide on theCompany's sustainabilitystrategy and goalsOversee and review ESG-relatedpolicies and monitor progresstoward goalsApprove the Company's ESGreport and related disclosuresReview and con?rm theCompany's ESG-related risksand materiality issues

E?cient Governance for Steady and Long-Term GrowthSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

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Compliant and Stable Operations

Material Topic AnalysisStakeholder Communication

STL conducts at least one material

topic identi?cation and analysis

annually, reviewing changes and trends

in industry policies and internal and

external environments. The Company

evaluates topics from both "?nancial

signi?cance" and "impact signi?cance"

dimensions. Through online

questionnaires, internal and external

stakeholders are invited to assess

these topics, helping to de?ne the

Company's sustainable development

priorities. This process enables the

Company to e?ectively respond to

stakeholder expectations and demands

while continuously improving ESG

management level.

STL 2024 Material Topics Identi?cation Process

STL highly values communication with stakeholders and has established multi-channel engagement mechanisms to activelyaddress and respond to their opinions and concerns. To ensure smooth and transparent communication, the Company conveysits value externally through earnings presentations, call conferences on earnings interpretation, investor research sessions,responses to inquiries on the interactive platform, participation in strategy sessions, and institutional reverse roadshows.Internally, the Company listens to voices and suggestions through employee forums, employee representative meetings, thechairman's mailbox, and an employee supervision and suggestion hotline. The Company also focuses on key topics of interest tostakeholders, strengthening relevant management practices and striving to create value for all parties.

Basic InformationAnalysisSTL conducts a comprehensive reviewof the Company's business activitiesand commercial relationships whileconsidering external objective factorssuch as policies, regulations, andindustry trends to de?ne the researchobjectives and scope.

StakeholderEngagement

STL establishes a framework linkingimpact signi?cance and ?nancialsigni?cance, compiles an onlineESG material topics assessmentquestionnaire, and collects stakeholderrecommendations for the Company'sESG management.

Development of the MaterialTopics LibraryBased on the Company's business developmentstrategy and unique characteristics, STLidenti?es 23 ESG material topics closely relatedto the Company through industry benchmarkinganalysis, external policy research, and industrytrend investigations to establish a materialtopics library.

Disclosure and Review of theMateriality MatrixSTL conducts statistical analysis on the scoresof each topic, evaluates them from the twodimensions of "?nancial signi?cance" and"impact signi?cance" to form a materialitymatrix, which is reviewed and approved by theBoard of Directors to determine key disclosurecontent in the report.

Innovation and R&DProduct Safetyand QualityChemical SafetyManagementPollutant Emissions andWaste Management

Highly Material Topics

Business EthicsCircularEconomyClimate ChangeResponseSustainableOperations

STL 2024 Double Materiality Topic Matrix

Impact Importance to the Economy, Society, and Environment

Financial Importance to the Company

SocialEnvironmentalGovernance

StakeholdersKey ConcernsCommunication MethodsKey TopicsSTL ResponseShareholdersand Investors

? Corporate Governance? Risk Management? Sustainable Operations? Business Ethics

? General Meetings? Investor Research? Hotline? Company? Announcements? Earnings Brie?ngs? Emails

? Continuous Performance Growth? Stable Future Development Outlook? Shareholder Rights Protection? Standardized Corporate Governance? Enhanced Information Disclosure? Smooth Investor Communication? Improved ESG Performance

? Transparent and Accurate? Information Disclosure? Performance Improvement and Pro?t Growth? Diversi?ed Investor? Communication Channels? Optimized ESG Performance

GovernmentandRegulators

? Climate Change Response? Energy Management? Pollution Emission and Waste Management

? Water Resource? Management? Chemical Safety Management? Ecological Protection? Sustainable Operations? Risk Management? Business Ethics?Employee Health and Safety

? Information Disclosure? News Reports? Company Website? Regular Communication

? Compliance with National Laws and Regulations? Integrity and Lawful Operations? Economic Development Promotion? Environmental Management Focus? Regulatory Supervision and Assessment

? Legal Compliance? Tax Payment?Information Disclosure as Required

?Local Economic Growth Promotion? Job Creation? Regulatory Investigations

Customers

? Product Safety and Quality? Innovation and Research and Development? Customer Relationship Management? Digital Transformation? Privacy and Information Security? Customer Relation? Management? Business Ethics

? Hotline? WeChat O?cial Account? Customer Visits? Customer Complaints? Emails? Company Website? Satisfaction Surveys

? Product and Service Quality

Assurance? Customer Demand Response? Customer Rights Protection

? Ensuring Product Quality? Improving Service Standards? Enhancing After-Sales Services? Innovating Service Initiatives

Employees

? Employee Rights? Occupational Health and Safety

? Employee Training and Development

? Privacy and Information Security

?Employee Representative Meetings?Employee Activities

?Engagement Surveys

?Employee Suggestion Box CEO Mailbox

?Employee Discussion Panels

?Employee Conversations?Employee Supervision and Suggestion Hotline

?Bulletin Boards

? Good Working Environment? Employee Growth and Development? Robust Communication Mechanisms? Salary and Bene?ts Protection

? Enhancing Compensation

and Bene?ts

? Strengthening Employee

Representation

? Providing Career Development Paths? O?ering Diverse Training Programs? Organizing Employee Activities? Creating a Healthy and Safe Work Environment

Partnersand IndustryAssociations

? Supply Chain Management? Industry Development? Business Ethics? Sustainable Operations

? Supplier Conferences? Hotline? Regular Visits? Company Website? WeChat O?cial Account? Reporting Channel

? Long-Term Cooperation Maintenance? Business Ethics Compliance? TransparentJust, and Fair

Procurement? Win-Win Development? Industry Advancement? Sustainable Supply Chain Development

? Strict Contract and AgreementCompliance? Transparent Bidding Processes? Adherence to Business Integrity? Promoting Environmental Partnerships? Expanding Cooperation Models? Industry Association Participation? Industry Knowledge SharingPublic andMedia

? Social Welfare Promotion? Industry Development? Business Ethics? Corporate Governance? Sustainable Operations? Risk Management

? Public Welfare Activities? Media Reports? Open Days? WeChat O?cial Account? Hotline? Company Website

? Responsible Operations? Community Culture Building? Public Welfare Support? Environmental Protection? Information Transparency? E?ective Communication? Strong Media Relations

? Active Participation in Public Welfare? Implementing Assistance Programs? Supporting Community

Development? Advocating Green Initiatives? Maintaining Strong Media Relations

The company assesses the impact, risk, and opportunity of each topic based on itsimpact signi?cance and ?nancial importance. We identi?ed 8 high material topics,12 moderate material topics, and 3 less material topics.

CorporateGovernanceModerately Material TopicsPrivacy andInformation SecurityCleanTechnologyDevelopment

CustomerRelationshipManagementRisk ManagementEmployee Training

and DevelopmentSupply ChainManagement

Energy

ManagementEmployee RightsOccupational Healthand Safety

Water Resource

Management

Ecological

Protection

Less Material TopicsIndustry DevelopmentPromotion

Digital

TransformationCommunity Welfare

E?cient Governance for Steady and Long-Term GrowthSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

1716

NameGenderPositionAge

Academic Background &Industry Experience

AuditCommittee

Remuneration& AppraisalCommittee

NominationCommittee

Strategy & ESGCommitteeYangWeidong

Male

Chairman,President

56Business Manage//MemberConvenerMaGuolin

MaleVice Chairman60

Business Management andChemical Industry

///MemberYangYuying

FemaleVice Chairman63

Business Management andChemical Industry

/Member//ZhuXiaodong

Male

Director, VicePresident

Business Management andChemical Industry

///MemberGao JunMale

Director, VicePresident

Business Management andChemical Industry

/Member//Wu YiFemale

IndependentDirector

Risk Management, FinancialManagement, and ESG

ConvenerMember/MemberGuoBaitao

Male

Independent

Director

Chemical Industry andIntellectual Property

Member/Member/FengLianfang

Male

Independent

Director

61Chemical Industry/Convener/Member

TongJianhua

Male

Independent

Director

Legal Industry and RiskManagement

MemberMemberConvener/ShenXiaowei

Male

Vice President,Board Secretary

Business Management andChemical Industry

////Li JuFemaleVice President, CFO52

Business Management,Financial Management, andRisk Management

////MaTujun

MaleVice President40

Business Management and

Chemical Industry

////

Governance System

STL emphasizes the effectiveness and transparency of corporate governance. The Company strictly complies with theCompany Lawof the People's Republic of China, the Securities Law of the People's Republic of China, the Code of Corporate Governance for ListedCompanies,and other relevant laws and regulations. In accordance with the selection procedures stipulated in theArticles of Associationof Satellite Chemical Co., Ltd.,the Company nominates and elects directors. The Company places great importance on informationdisclosure, responding to the new "Nine National Guidelines," with the premise of safeguarding shareholder interests and deliveringsustainable returns. It strictly follows the requirements of theAdministrative Measures for Information Disclosure of Listed Companiesandother applicable laws and regulations to ensure that Company information is disclosed truthfully, accurately, and completely. To furtherregulate related party transactions, the Company has formulated theRelated Party Transaction Decision-MakingPolicy which clari?esthe approval procedures and disclosure requirements for related transactions. The Company ensures timely and accurate disclosure ofrelevant information, including the nature, amount, conditions, and impact of transactions. It also conducts regular independent audits toensure compliance, fairness, and authenticity of transaction pricing, preventing any transfer of bene?ts.The Company has established and continuously optimized a governance structure composed of the General Meeting of Shareholders,the Board of Directors and its specialized committees, the Supervisory Board, and senior management to ensure stable operations andfully protect shareholder rights. The Board of Directors has an Audit Committee, a Remuneration and Appraisal Committee, a NominationCommittee, and a Strategy and ESG Committee. Each committee has clear responsibilities and work processes to ensure the e?ectiveoperation of the Board, enhance decision-making expertise, reduce risks, and maximize shareholder value.The Audit Committee is composed entirely of independent directors and is responsible for overseeing the Company's ?nancial reportingand internal controls to ensure the fairness and compliance of related transactions. The Remuneration and Appraisal Committee isresponsible for formulating and assessing the Company's Remuneration policies and evaluation standards for directors and seniormanagement. The Nomination Committee provides recommendations on the selection criteria and procedures for directors and seniormanagement and reviews their quali?cations. The Strategy and ESG Committee, established as a specialized department by the Board ofDirectors in accordance with relevant resolutions, is primarily responsible for studying and making recommendations on the Company'slong-term development strategy, major investment decisions, and ESG-related matters.

Corporate Governance

The Company fully considers factors such as gender, age, professional expertise, and industry experience when selecting board members,ensuring a diverse board composition while meeting various business needs. As of the end of the reporting period, the board consists ofnine members, including three executive directors. The age distribution includes six members born in the 1960s, two in the 1970s, andone in the 1980s. This diverse age structure combines extensive experience with fresh perspectives, bringing vitality to the team. Eachindependent director has substantial industry experience, with professional backgrounds spanning ?nance, law, chemical engineering,and ESG, providing the Company with a broader and more diverse perspective. Additionally, the board values female leadership andcontinuously promotes independence and diversity in the governance of the board. The presence of two female directors further enrichesthe board's decision-making approach.

AuditCommittee

NominatingCommitteeCompensation andEvaluation Committee

Strategy andESG Committee

Board of Supervisors

General Meeting of Shareholders

The Company actively advances its "Management Leadership" and "Technology Leadership" initiatives by establishing a dedicatedleadership team for these two priorities. This team is responsible for comprehensively reviewing, revising, and refining Companyregulations, driving the development of new productive forces while optimizing and innovating the corporate governance system. Thesee?orts enhance internal controls and oversight, further strengthening the modern corporate governance framework. By improving workprocesses, decision-making mechanisms, and ?nancial management regulations, the Company has established a governance structurewith clear responsibilities, checks and balances, which ensures decision-making, execution, and supervision, ultimately promoting themodernization of corporate governance capabilities and standards.

Board of Directors

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Governance Strategy

Based on the overall "Management Leadership" plan, STL organizes its various centers, bases, subsidiaries, and business units tofocus on addressing the "Five Key Management Questions", implementing the "Four Management Transformations", and advancingthe development of "Management Leadership" No.1 Initiative. This initiative aims to further enhance the construction of amanagement system characterized by an advanced corporate culture, streamlined organizational structure, clear processes, well-developed regulations, re?ned management, and e?cient operations.

Five KeyManagementQuestions

How can we establish a framework of"benchmarking against excellence andoptimizing improvements" to addressthe height of management?

How can we achieve "goalalignment and executionimplementation" toaddress the strength ofmanagement?

How can we create an ecosystemof "sincere communicationand e?cient collaboration" toaddress the e?ectiveness ofmanagement?

How can we balance "e?ciency ?rstwhile considering risks" to addressthe precision of management?

How can we achieve a system where"processes govern a?airs and regulationsgovern people" to address the breadth ofmanagement?

Transformation inIdeology and ConceptAchieve leadership in ideologyand establish systematicthinking.

Transformation inOrganizational StructureAdhere to the ?at managementreform approach of "smallheadquarters, large industries."Transformation inManagement ApproachAccelerate the institutionalization,standardization, and process-oriented development to ensure"inspection with clear criteria andassessment with data."

Transformation inAssessment OrientationStrengthen incentives, competition, andelimination mechanisms to enhancedepartments' enthusiasm for "problem-solving and value creation."

Four KeyManagementTransformations

Impact and Risk Management

STL has identi?ed the following key risks in its business operations and has implemented measures for e?ective risk control:

Implementing role separation, regular inventory checks, scientific authorization approvals,and leveraging digitalization to enhance ?nancial and asset security while reducing risks.

Credit Risk

Optimizing the credit control system and customer evaluation model, implementing processmanagement, and using credit insurance to transfer part of the risk, thereby enhancing?nancial security.

Tax Risk

Establishing a tax risk management system covering compliance, transfer pricing, tax planning,and internal control. This is managed through policy interpretation, internal audits, externalinspections, and the support of a tax management committee and third-party institutions.Operational RiskFinancial Asset Security Risk

Mitigating risks related to transactions, assets, decision-making, and investments through contractreviews, asset inventory checks, price monitoring, and investment project evaluations.

Improving foreign exchange hedging operations, applying commodity hedging strategies,and establishing a dynamic monitoring mechanism with dedicated personnel analyzingforeign exchange trends.Exchange Rate Risk

With the goal of achieving "Management Leadership", by improving work processes, decision-making mechanisms, and?nancial management regulations, the Company has established a governance structure with clear responsibilities, checks andbalances, which ensures decision-making, execution, and supervision, ultimately promoting the modernization of corporategovernance capabilities and standards.

Optimizing Management E?ciency

To establish a structured approach where "processes govern a?airs and regulations governpeople", the Company follows a "draft, review, learn, implement, assess" methodology.During the reporting period, it focused on building a "0-1" system, developing the 12418system (1 framework, 2 levels, 4 major systems, and 18 policy categories). Adhering tofive standardization principles—unified management, unified standards, unified norms,unified templates, and unified processes—the Company issued governance regulationsand built a closed-loop policy management mechanism.

By benchmarking against industryleaders, the Human ResourcesCenter takes the lead in organizingvisits to top-performing enterprises,learning from best practices andaiming to become a benchmarkitself.

To foster a culture of "sincere communication ande?cient collaboration", the Company applied the"Three-Degree Working Method" and designed atop-down cultural implementation framework.TheCompany established communication mechanisms,represented by joint meetings and coordinationconferences, while conducting cultural promotionand experience-sharing activities to enhancemanagement e?ectiveness.

To balance "efficiency first while considering risks" and ensure "goalalignment and execution implementation," the Company optimized approvalprocesses for the CEO and department heads and conducted inspections onthe implementation of system promotion and execution. On the premise ofensuring e?ective risk control, it enhanced approval e?ciency and improvedthe execution of institutional policies. At the same time, each center, base,subsidiary, and business unit continued management enhancements tailoredto their operational needs.

Enhancing Management LevelExpanding Management Scope

Improving Management E?ectivenessRe?ning Management Precision and Strength

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Metrics and Targets

STL conducts annual training for directors, supervisors, and senior management to continuously strengthen their awarenessof information disclosure responsibilities, ensuring that all investors have equal access to Company information. The Companyhas established open, fair, transparent, and multi-dimensional investor communication channels. Through emails, phone calls,Shenzhen Stock Exchange Hudongyi platform, WeChat official account, earnings briefings, on-site research, and the "InvestorRelations" section on its website, the Company actively engages with investors. These e?orts help deepen investors' understandingof the Company's operations and enable timely and effective responses to investor concerns, comprehensively conveying theCompany's investment value to the market. Additionally, STL proactively complies with regulatory requirements from the ChinaSecurities Regulatory Commission (CSRC) and stock exchanges by formulating the Three-Year Shareholder Return Plan on multipleoccasions. The Company has established a stable, sustainable, and scientifically structured dividend distribution mechanism,ensuring shareholders bene?t from its rapid growth.

Investor Rights Protection

TargetsInternal policy release rate reaching

80%or more

Achieved

2024 Achievement

During the reporting period

Strengthening Party Building

STL established the "Xinghe Party Building" brand, integrating Party leadership with corporate development while aligning withCompany culture. The Company adheres to the principle of "Unity in Heart" to consolidate corporate strength, the principles of "Unityin Strength" to drive business growth, and "Unity in Harmony" guide green development. STL has developed a Party-Union-Youth-Women joint construction system, adhering to the principle of "all work reaches the grassroots". As the Company expands capital,projects, and industry chains, it simultaneously optimizes Party organization structures to ensure a leadership role in corporategrowth. In 2024, based on Company situation, the Party Committee aligned Party-building e?orts with business operations, fosteringan integrated "Party Building + Business" framework. The Company implemented synchronized planning, deployment, execution,and evaluation of Party building and business initiatives, actively exploring approaches such as "Party Building + Market Expansion,""Party Building + Cost Control," "Party Building + Frontline Engagement," and "Party Building + Workplace Safety."The Company has one secondary Party committee, one general Party branch, and 14 Party branches. As of December 31, 2024, theCompany had 594 Party members, representing a 20.5% year-on-year increase, including 26 probationary members.

Business Ethics

STL adheres to the principles of integrity, transparency, and just conduct, strictly complying with theSupervision Law of the People'sRepublic of China, the Anti-Unfair Competition Law, the Anti-Money Laundering Law,and other relevant regulations. The Companyhas formulated policies such as theIntegrity Management System, Whistleblower Management Regulations, Gift-taking ManagementMeasures, and Anti-Corruption and Anti-Bribery Management System.Through these measures, STL fosters a culture of honestbusiness conduct, maintaining a zero-tolerance stance on corruption.The Audit Committee serves as the highest governing body for business ethics matters, overseeing and regularly reviewing policies,issues, and risks related to business ethics and anti-corruption. The committee ensures that the Company conducts at least onebusiness ethics audit annually, covering all operating locations and business activities. STL's Integrity Management Task Force leadsanti-corruption awareness initiatives, establishes relevant strategic objectives, evaluates management performance, and receives andprocesses corruption-related reports. To strengthen anti-corruption and integrity supervision, the Audit and Supervision Departmentconducts at least one annual risk assessment of key business activities, while all centers, bases, subsidiaries, and business unitsconduct quarterly reviews to identify high-risk areas and propose preventative measures. Upon receiving whistleblower reports, theAudit and Supervision Department investigates allegations, recommends actions, and tracks implementation of corrective measures.The HR Department integrates ethical work into performance evaluations and provides integrity training for new employees. Theheads of each center, base, subsidiary, and business unit implement the "dual responsibility" principle by promoting integrity withintheir respective units, ensuring the implementation of anti-corruption measures, promptly reporting any corruption issues to theIntegrity Management Task Force to assist in investigations and enforce accountability measures.

Governance

To reinforce ideological and politicalfoundations, the Company Party Committeeregularly holds ideological briefings. In2024, it convened 10 key meetings, includingexpanded Party Committee meetings andrecognition ceremonies for outstandingParty, labor, youth, and women's groups.Throughout the year, it conducted 61 learningsessions on topics such as the 20th NationalCongress of the CPC, integrity education, theThird Plenary Session of the 20th CPC CentralCommittee, and important work methods.

The Company has established 30 "Party-Labor Groups" with over 200 members,regularly organizing activities such as Partyhistory education, team-building activities,and professional training. The Party Committeelaunched thematic Party Day events suchas "retracing the first National Congressroute" and "Common Prosperity 101", closelyintegrating these activities themes like nationalrejuvenation and rural revitalization, enhancingthe Party's cohesion and influence.

As one of Jiaxing's ?rst publicly listed companieswith a distinctive Party-building brand, theCompany actively participates in regional Party-building collaborations. It serves as the leader ofthe "Red Sail" Party-building linkage initiativeand has partnered with East China University ofScience and Technology, Securities Times, andother institutions for joint construction activities.

The Party, labor, youth, and women'sgroups integrate advanced Party theorieswith production practices, inspiring frontlineParty members to drive innovation. Partybranches fully leverage their role as a?ghting fortress, establishing Party membervanguard posts and demonstration posts,ensuring that the Party flag flies high overevery project.

Ideological Education andOrganizational Development

Enhancing information disclosure qualityAchieved

Optimizing investor relations management, market valuemanagement, and shareholder returns

Achieved

Party-Labor Groups Buildingand Diverse Activities

Joint Party-Building andBrand Development

Party-Led Innovationin Production

STL held

shareholders' meetings

board meetingsThe Company also held

supervisory board meetings

with a100% attendance rate among supervisors

and reviewed

proposals

with a 100%attendance rate among directors,and reviewed

proposals.

Additionally,STL convened

Strategy andESG Committee meetings

NominationCommittee meetings

AuditCommittee meetings

Remuneration and Appraisal Committee meetings

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Whistleblowing Hotline

0573-82058220

STL enforces zero tolerance for violations of business ethics. The Company has established and strictly adheres to theWhistleblowing and Complaint Management Policy, standardizing reporting channels and procedures. It follows the principles ofevidence-based investigations, factual accuracy, and thorough investigation to ensure that all complaints and reports are handledpromptly and effectively. STL encourages employees, suppliers, customers, and other stakeholders to report any observedmisconduct related to business ethics. The Company provides multiple transparent reporting channels, including letters, hotlinecalls, emails, in-person reports, or third-party submissions. Once a credible report is received, STL immediately develops aninvestigation plan, conducts a thorough inquiry, and imposes strict disciplinary actions upon con?rming violations, making sure thematters are seriously handled. To protect the rights of the whistleblowers, STL has explicitly stated in its policies that, within legaland regulatory limits, it will maintain strict con?dentiality of the whistleblower's identity and report details. Any form of retaliationagainst whistleblowers is strictly prohibited. During the reporting period, STL experienced zero corruption-related lawsuits.

Impact and Risk Management

Additionally, the Company has established an accountability system for supervision and inspection and further re?ned its accountabilitymechanism for supervision and inspection. Any failure to ful?ll responsibilities or actions that cause ?nancial losses to the Company willbe strictly addressed according to the system, with a tiered accountability approach based on the severity of the violation. The CEO'sO?ce is responsible for overseeing the entire process. At the same time, the Company upholds the principles of fairness, impartiality,equality, and transparency, ensuring that every employee has the right to report concerns to senior leadership, Company management,the Disciplinary Committee, or the Audit and Supervision Department.In addressing unfair competition risks unfair competition risks, the Company has adopted a series of proactive strategies. Throughmarket research, competitor analysis, and other methods, STL closely monitors market trends and the marketing strategies of industrypeers, enabling the Company to anticipate and detect potential unfair competition. If another Company engages in unfair competitionagainst STL, the Company can promptly develop and implement targeted countermeasures, including taking legal action to demandthe immediate cessation of infringement and actively safeguarding its legitimate rights and interests.The Company also prioritizes anti-money laundering compliance. STL has formulated and regularly reviews anti-money launderingpolicies, collaborates with regulators for specialized training, and enhances employees' ability to prevent money laundering throughcase analysis and risk identi?cation teaching.

The Audit and Supervision Departmentorganizes personnel to conduct a lawfulinvestigation based on the report, whichmust be completed within 30 workingdays, with a written investigation report.

Relevant departments must fullycooperate during the investigation.The investigated individuals mustprovide truthful evidence whilemaintaining strict confidentialityregarding the investigation.

If the report is veri?ed as true, appropriatedisciplinary actions will be taken accordingto the severity of the violation. Severecases will be handed over to judicialauthorities.

If the whistleblower or the reportedindividual disagrees with the handlingdecision, they may file an appealwith the Integrity Management TaskForce within 10 days of receiving theinvestigation results and providesupporting materials.

The Integrity Management Task Forceprioritizes handling non-anonymousreports and anonymous reports withsu?cient factual evidence.

Acceptanceof Reports

CooperationRequirements

HandlingResults

AppealProcessInvestigation

WhistleblowingHandling Process

Integrity Management Task Force, STL,No. 196 Fuqiang Road, Nanhu District,Jiaxing City, Zhejiang Province, China

Whistleblowing EmailWhistleblowing Address

The whistleblowing websiteand hotline do not requirewhistleblowers to providepersonal identity information

During the investigation of whistleblowingcases, all communications with whistleblowersare conducted privately. The whistleblower'spersonal information and all submittedmaterials are kept strictly confidential. Unlessnecessary for the investigation, investigatorsare prohibited from disclosing this informationto any unrelated personnel

After the investigation isconcluded, the Company willdetermine whether the whis-tleblower has faced any formof retaliation. If retaliation isconfirmed, the Company willtake legal action against theresponsible individuals

Compliance@weixing.com.cn

To e?ectively identify and mitigate integrity risks, STL conducts annual anti-corruption risk audits covering key business areassuch as procurement, sales, logistics, warehousing, quality inspection, and engineering construction. During the reportingperiod, the Company carried out 30 integrity-related audit projects, covering procurement, sales, production costs, inventory,engineering, and logistics. These audits identi?ed over 100 issues, with a recti?cation rate of 89% and 15 individuals receivinginternal penalties. STL was not involved in any anti-corruption-related lawsuits.

Integrity Audits

To enhance anti-corruption awareness, the Company incorporates integrity education into its annual training plan. Variousbusiness ethics training and awareness activities are conducted for board members and all employees, including outsourcedstaff, part-time employees, and interns. These initiatives include displaying anti-corruption posters, organizing case studysessions on corruption, and arranging visits to external integrity education centers. Through these efforts, the Companyensures alignment with its business ethics standards and fosters a culture of integrity.

Integrity Culture Development

In October 2024, the Company collaboratedwith local public security organizations toconduct specialized anti-fraud and anti-money laundering training. Employeeswere organized to systematically studythe characteristics of electronic fraud, riskprevention strategies, and emergencyresponse mechanisms. The Dongzha PoliceStation sent an anti-fraud expert to conductcompliance and anti-fraud training,strengthening everyone's awareness of?nancial security.

Anti-Fraud and Anti-Money Laundering TrainingCase

Prevention and Correction Measures for Retaliation

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Integrity and Confidentiality Training for the Supply ChainManagement Department

Integrity Awareness Campaign for the STL New Materials Project

Integrity Awareness Display Boards

Anti-corruptionaudit projects

Total hours ofbusiness ethicstraining

hours

Total number ofbusiness ethicstraining sessions

times

Number of boardmembers trained inbusiness ethics

Percentage of boardmembers trained100%Number of managementpersonnel trained inbusiness ethicsaround1,200

Percentage ofmanagement personneltrained in business ethics

%

Total number of employeestrained in business ethics

5,057

Percentage of employeestrained

100%

In 2024

Metrics and Targets

Targets2024 Achievement

100%

of suppliers signed the Integrity and Compliance Commitment LetterNo involvement in any anti-corruption lawsuits

100%

coverage of integrity training for all employees (including interns,outsourced personnel, and part-time sta?)

Company-level integrity training sessions ≥

,Audit and Supervision Department integrity training sessions ≥

,Integrity training sessions for each center, base, subsidiary,and business unit ≥

On September 21, 2024, STL's Audit and SupervisionDepartment organized a training session for salespersonnel on "Compliance Management in the MarketingSystem." The session used previous cases and focusedon topics such as con?icts of interest, improper bene?tstransfer, commercial bribery, unfair competition,information confidentiality, and professional ethics toreinforce employees' awareness of compliance.

Marketing Compliance PromotionCase

On July 12, 2024, during STL'smid-year summary conference,a compliance seminar themed"Corporate Anti-Fraud and CriminalCompliance" was conducted. Allmanagers and above from variouscenters, bases, subsidiaries,and business units participatedin the training, reinforcing theCompany's internal awarenessofanti-fraud and complianceprinciples.

Anti-Fraud and Compliance TrainingCase

Achieved

Achieved ( Company-level:

Audit and Supervision Department:

Centers/Bases/Subsidiaries/BusinessUnits:

)

AchievedAchieved

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Compliance Development

Risk Management

STL has established a comprehensive internal control system covering ?ve key elements: control environment, risk assessment,control activities, information and communication, and supervision. This system ensures asset security, operational e?ciency,and regulatory compliance. The Audit and Supervision Department formulates an annual internal control audit plan based on theCompany's development strategy and external regulatory requirements, evaluating and auditing the implementation of internalcontrols across various business activities. Issues identi?ed during audits are promptly communicated with relevant departmentsand recti?cation progress is closely monitored. Additionally, the Company prepares a quarterly internal control audit report, whichis submitted to the Board O?ce for review and regularly reported to the Audit Committee. When evaluating the e?ectiveness ofinternal controls, the Board incorporates sustainability responsibilities into the assessment, identifying and addressing relevantrisks while proposing improvements.In 2024, STL conducted 22 special audits, 14 internal control compliance checks, 3 exit audits, and 5 complaint investigations,identifying a total of 120 audit issues with a recti?cation rate of approximately 89%. These e?orts directly recovered losses of about

1.8 million yuan. When signi?cant issues are identi?ed, the Audit and Supervision Department has the authority to adjust audit

objectives, expand the audit scope, and submit recommendations to the Board of Directors for further action.

To ensure stable operations in legal compliance, STL hasformulated and re?ned a series of management systems,including the LegalManagement Regulations, Legal ReviewManagement Measures, Dispute Resolution ManagementMeasures, Legal Consultation Management Measures,

and External Lawyer Management Measures.Theseinternal policies regulate legal management processes andstrengthen legal risk control. During the reporting period,the Company revised the integrity clauses in contracts,further enhancing the prevention and control of integrityrisks in contract management. The Company regularlyorganizes legal training, covering topics such as exportcredit insurance contract laws, practical application of theCISG, and integrity education to improve employees' legalawareness and compliance capabilities.

Legal Compliance Assurance

Internal Control System

Strengthening Risk Prevention and Control

STL has established a well-defined and fully functional risk management and internal control system. The Board of Directorsserves as the leadership and decision-making body for the Company's risk management, overseeing the development of the riskmanagement and internal control framework, setting the Company's vision, and determining strategic plans. The CEO's O?ce isresponsible for inspecting the implementation of these systems, supervising key resolutions, and ensuring the e?ective executionof Company decisions. At the operational level, business units, risk management departments, and the Audit and SupervisionDepartment are responsible for formulating speci?c countermeasures against major risks. To ensure the e?ectiveness of the riskmanagement and internal control system, the Company has implemented a "three lines of defense" model, e?ectively mitigatingoperational risks and enhancing overall risk management capabilities.

The Company continuously optimizes its risk management processes, strengthens risk identi?cation and response capabilitiesto ensures the stable operation of its risk management system.

Collect initialinformation on riskmanagement

Propose andimplement riskmanagementsolutions

Develop riskmanagementstrategies

Supervise andimprove riskmanagement

Conduct riskassessment

BusinessDepartments

Assess and identify key challenges in operations.Optimize operational standards and process guidelines, drafting management guidelines orinstitutional requirements.Submit drafts to the Corporate Management Department for review and approval.Corporate Management Department: Defines approval authority at different managementlevels, manages institutional procedure development, formulate and reviews submissionsfrom business department, enforces system implementation, requires business unites toformulate relevant documents, and tracks the implementation of various regulations.Finance Center: Reviews and controls ?nancial risks associated with business activities.Legal Compliance Department: Enhances legal risk management systems, identifies andreviews compliance risks related to ?nance and regulations.Production Safety and Environment Center: Reviews risk control measures related to safetyand environment in business units.

RiskManagementDepartments(IncludingCorporateManagement,Finance Center,Legal Compliance,Production Safetyand EnvironmentCenter)

Audit andSupervisionDepartment

Annually evaluates and updates the risk control matrix and integrity risk assessment.Engages with relevant business departments to address weak controls or non-complianceissues during reviews.Conducts audits on business activities that fail to meet expected outcomes.Assesses the implementation and de?ciencies of existing regulations.Evaluates the performance of operational sta? and provides recommendations for policy andprocess improvements.

Tax ComplianceSTL incorporates "actively generating taxes for local governments" into itscorporate culture, actively ful?lls tax information disclosure obligations,ensuring the transparency and accuracy of tax declarations. The companyis always committed to contributing to the local economic developmentthrough stable and standardized business operations.The Company strictly follows all national tax laws and regulations, files taxreturns on time, and pays all applicable taxes, including value-added tax,corporate income tax, and consumption tax. We have built a completetax management system, in combination with internal self-assessmentsand external consultations, to ensure the accurate implementation of taxpolicies and reduce risks. The Company conducts business in overseascountries and regions such as Hong Kong, Singapore, and the UnitedStates, committing to full compliance with the laws and regulations of itsoperational locations. STL adheres to transfer pricing rules, ensures thatprofit distribution aligns with value creation, does not shift profits to low-taxregions, and follows the spirit of the law and the principle of tax fairness.

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The Company has established risk prevention and response strategies covering its business scope to comprehensively enhance riskprevention capabilities. It has developed a risk identi?cation and recti?cation checklist for areas such as integrity, information security, rawmaterial procurement, external investments, and product sales. This approach continuously improves risk management initiatives andstrengthens overall risk management e?ectiveness.

Information Security

STL strictly complies with theCybersecurity Law of the People's Republic of Chinaand other relevant laws and regulations. TheCompany has formulated multiple policies and regulations, including theInformation Management Regulations, Information ProjectConstruction Management Measures, Information System Emergency Management Measures, Information Equipment Con?gurationand Usage Management Measures, and Computer Network Management Measures.These policies ensure management in areassuch as endpoint security, system security, data security, operational security, network security, and data center security, e?ectivelypreventing information security incidents. The Company has established a comprehensive business secret protection compliancesystem, issuing key policy documents including theTrade Secret Management Policy, Trade Secret Compliance Manual, InformationConfidentiality Management Regulation, and Employee Exit Management Procedure.These measures clearly delineate the scopeof confidential information, specify protection protocols, and require employees in sensitive positions to complete a mandatorydeclassi?cation process upon resignation, safeguarding the Company's intellectual property and innovation achievements.To ensure the security and continuity of business operations, STL follows a proactive prevention and integrated governance approach.The Company has established a comprehensive information security management system that integrates personnel and technicalprotective measures. Information security management follows a leadership responsibility system, with the Information Centeroverseeing the planning, implementation, and supervision of Company-wide security management, while department heads overseeinformation security practices within their respective departments.STL upholds principles of compliance and security in data management. During data collection, the Company transparently informsdata subjects of the purpose, scope, method, and duration of data collection, obtaining explicit consent before proceeding. Onlydata directly relevant to business needs is collected, avoiding excessive data gathering. For data usage, STL has established strictaccess control mechanisms, restricting data access based on employees' roles and business needs. This ensures that only authorizedpersonnel can access and utilize specific data, safeguarding security and privacy. The Company conducts regular audits of dataaccess and usage, maintaining detailed records. In the event of a data breach, STL traces the source and responsible parties toensure traceability and accountability. During the reporting period, the Company entered into con?dentiality agreements with allemployees outlining their responsibilities and obligations in data protection, as well as the consequences of violations.STL places great importance on information security risk management, implementing a series of measures to identify, assess,and mitigate risks, ensuring the security of information assets and business continuity.

Governance

Impact and Risk Management

Risk Identi?cation and Recti?cation Checklist

Risk Type Policies & RegulationsResponse Measures

Integrity Risk

Integrity Management System,Whistleblowing ManagementRegulations,Gift-taking Management, Measures,Anti-Corruption and Anti-BriberyManagement System

1.Conduct comprehensive integrity promotion and training, covering all employees in all centers,

bases, subsidiaries, and business units.

2.Identify and assess integrity risks.

3.Announce integrity red-line behavior standards, optimize system and process frameworks, and

continuously improve integrity risk control measures.

4.Conduct annual inspections on major integrity risks within the group and close the management

loop on identi?ed issues.

5.Encourage employees and partners to report corruption.

6.Strictly punish corruption—employees involved in corruption will be penalized based on the severity

of the o?ense.

InformationSecurity Risk

Information Security ManagementMeasures,Information System EmergencyManagement Measures

1.Use encryption technology for both static data and data in transit.

2.Implement strict access control policies following the principle of least access.

3.Establish a comprehensive data backup strategy.

4.Deploy ?rewalls, intrusion detection, and other network security devices and software to prevent

external attacks or intrusions.

5.Regularly train employees on data security awareness.

6.Provide emergency response training for relevant personnel and conduct regular drills.

7.Deploy data monitoring tools to track data access, transmission, and usage in real-time.

8.Establish a robust audit and logging system.

ProcurementRisk

Procurement DemandManagement Measures,Supplier Management Measures,Business Procurement CenterContract Management Measures

1.Fully regulate all procurement processes to establish a strong institutional foundation for risk

prevention.

2.Standardize the preparation, submission, approval, and modi?cation of procurement plans to

ensure material supply while preventing overstocking.

3.Establish a comprehensive supplier access, selection, performance evaluation, and exit mechanism.

4.Strengthen procurement contract management, standardizing drafting, review, signing, execution,

and dispute resolution.

ExternalInvestmentandGuaranteeRisk

Major Operation and InvestmentDecision System,External Guarantee ManagementSystem

1.Implement the Company's major business and investment project decision-making policies.

2. Ensure capital allocation and project advancement from decision-making to detailed

implementation planning.

3. Enhance investment project execution oversight through internal audits and project settlement

reviews.

4.Continuously monitor the ?nancial and operational status of guaranteed entities to detect and

respond to potential risks promptly.

5.Ensure guaranteed entities ful?ll their obligations on time and take measures when necessary to

minimize Company losses.

Sales Risk

Sales Credit ManagementMeasures,Pricing Processing Measures

1.Establish an organizational structure with business delegation to create mutual supervision.

2.Manage behaviors through customer credit assessment, pricing, contract strategy, planning, and

supervision policies to mitigate risks.

3.Use standardized contract templates to prevent contract-related risks.

4.Implement a multi-tiered approval process to enhance risk control.

5.Conduct daily and weekly business reviews and functional anomaly reviews to identify and control

risks in a timely manner.

we conducted

external risk management audit and

internal audits and organized

complianceand risk control training sessions, with1,120employees participating, totaling 840 training hoursKeyPerformance

Indicators

Risk Identi?cation

?Utilize professional vulner-ability scanning tools to con-duct comprehensive networksystem scans, promptly identi-fying potential security vulner-abilities in operating systems,databases, and applications.

?Regularly conduct informa-tion security risk assessmentsto identify security risks incritical business systems andimportant information assets.

Monitoring & Early Warning?Perform real-time trafficanalysis across the entirenetwork; monitor cyberse-curity trends; ensure secu-rity incidents are detectedand addressed at the earli-est opportunity.

?Deploy an intrusion prevention system (NIPS) to identifyand block attack tra?c in real-time, e?ectively preventingmalicious attacks.? Implement firewalls to enforce static security policies,

strictly controlling external access, reducing externalexposure, and ensuring internal network security.? Deploy behavior management tools to monitor and audit

employee internet access, including but not limited to:

installation of antivirus and desktop management softwareon all endpoints;prohibition of USB storage devices;watermark controls; and encryption of all ?les upon storageto prevent internal information leaks and policy violations.? Automatically update protection software virus databases

daily to address evolving security threats and enhancesystem protection.

Risk Prevention Measures

During the reporting period

E?cient Governance for Steady and Long-Term GrowthSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

3130

Security Attack Monitoring and Early Warning Platform

To continuously enhance employees'information security awareness, the Companyconducts an annual cybersecurity attackand defense drill, simulating real attackscenarios to test the effectiveness of its securityprotection system and improve employees'security awareness and emergency responsecapabilities. Additionally, the Companyorganizes multiple information securitytraining sessions for all employees, coveringtopics such as internet behavior management,cloud desktops, data encryption, documentwatermarking, and personal informationsecurity precautions. These training sessionsalso include contractors and part-timeemployees to raise everyone's awareness andfoster a culture where information security iseveryone's responsibility.

To address potential emergencies, the Company has issuedInformation System Emergency Management Measuresandestablished a dedicated emergency response team to ensure a swift activation of contingency plans in the event of aninformation leak or other urgent situations. Upon detecting an information security incident, the Company will immediatelyemploy all available technical means to prevent escalation, conduct a technical diagnosis to identify the cause of the breach,and develop corresponding solutions and recovery plans. For affected information systems, the Company will carry outrestoration work to ensure a prompt return to normal operations.

Information Security Training

Metrics and Targets

Additionally, STL has developed and integrated a series of digital production, operation, and management systems to enhance dataconvergence, continuously improving management e?ciency and operational e?ectiveness and exploring new data governancemodels. During the reporting period, with its outstanding digital transformation efforts and advanced integration of IT andindustrialization, STL received several prestigious honors, including the Provincial 5G Fully Connected Factory Award, a rankingamong China's Top 100 Strategic Emerging Industry Leaders, and the Forbes China 50 Most Innovative Companies. These accoladesre?ect the recognition of STL's data governance e?orts by authoritative institutions.

Targets

Achieved

Major information system failure incidents

Customer information leakage incidents

2024 Achievement

Number ofinformation securitysystem audits

Losses caused by violationsof customer rights protectionlaws and regulations

Training participants oftrade secret protectioncompliance5,508

Percentage of employeeswho signed con?dentialityagreements100%

In 2024

Achieved

E?cient Governance for Steady and Long-Term GrowthSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

UN SDGs

Innovation to Foster anExcellent Brand

STL is steadfast in its commitment to technology as the driving force of the future. By establishing a multi-tiered R&D platform,strengthening its talent pool, and increasing investment in research and development, the Company continuously advancesbreakthroughs in key core technologies, enhances digital manufacturing capabilities, and strives to achieve technological self-su?ciency and leadership in the ?eld of advanced chemical materials.Governance

The Company has established multiple provincial and municipal R&D platforms as well as product qualitytesting laboratories, refining its R&D talent structure and comprehensive quality and safety managementsystem. It strengthens full-process supplier management, expands industry collaboration, and enhancescorporate competitiveness and industry recognition.

Strategy

STL continuously advances its "Technology Leadership" strategy by driving both technological and managerialinnovation. Through a modern corporate governance model of "co-creation, shared benefits, and mutualprosperity," the Company fosters deeper integration of innovation and industrial chains, injecting new momentuminto cultivating advanced productive forces.Goals

Impacts,risks, andopportunities

STL integrates technology innovation resources, fostering deep collaboration between industry, academia, andresearch institutions. The Company proactively addresses risks such as intense market competition, rapidlychanging market demands, supply chain disruptions, and co-opetition pressures. By strengthening its qualitymanagement system, it has built the "Cloud-Based Chemical Plant" and a "Five-in-One" safety productiondigital management platform, enabling full-process traceability and risk control in production operations.Through industrial chain integration, it optimizes resource allocation, enhances supply chain e?ciency, andserves as the "driving force" for new productive forces.

Ensure100%

product pass rate atfactory dispatchAchieve a

100%

signing rate of integrityagreements with suppliersEnsure a customer satisfaction rate greater than or equal to

95.5%

Ensure a

100%

response rateand timely resolution for customer complaints

Maintain

major or above-levelquality incidents

Achieve an R&D investment of RMB

billion and R&D incentives of RMB

billion within ?ve years,with an R&D team of

2,000

people.

?Advancing research in high-performance catalysts, new energy materials, and polymermaterials, such as developing corrosion-resistant coatings for offshore wind power,contributing to the sustainable growth of the sector?Independently developing acrylic acid catalysts to lower production costs and improvemarket competitiveness

New energy& advancedmaterials

Empowering Development throughTechnology Innovation

StrategyGuided by national strategies, STL ?rmly upholds an innovation-driven approach. The Company has established a "TechnologyLeadership" management framework, de?ning and implementing the principles of technological leadership, breakthroughs,and advancements. It has enhanced organizational safeguards, clari?ed incentive mechanisms, and fostered an innovation-friendly environment. To align with its "Management Leadership" initiative, the Company has updated its design anddevelopment control procedures, R&D project management processes, and R&D project transformation work?ows, releasinga series of internal regulations such as theDesign and Development Control Procedure, R&D Project Management Process,and R&D Project Transformation Process.These measures strengthen the Company's scienti?c and e?cient R&D work?ow,ensuring orderly and e?ective innovation management.

For future R&D Directions, STL continues to drive its products toward high-end, green, and intelligent advancements:

Risk & Opportunity ManagementSTL actively implements a series of measures to address potential risks in research and innovation, including technology leaks,talent competition, innovation bottlenecks, market competition, and intellectual property disputes. At the same time, theCompany is seizing opportunities arising from policy support, growing market demand, and technological innovation drivingindustrial upgrades.

GovernanceSTL adheres to an innovation-driven growth strategy, establishing a governance framework covering the entire cycle fromtechnological innovation to industrial application. The Company has set up multiple provincial and municipal R&D platforms,including the Enterprise Technology Center of Zhejiang Province, and the Center Laboratory for Vinyl High-End New Materialsof Jiaxing, alongside product quality testing laboratories. It has also collaborated with downstream customers to establishmultiple application technology research centers. In 2024, the Company was o?cially awarded a national-level postdoctoralresearch workstation, and its future R&D center project, has entered the construction phase, providing a high-level platform tofoster new productive forces.

National-level Postdoctoral Research Workstation O?cially Certi?edTo build a robust talent pipeline, the Company and its various business units have developed a clear R&D talent organizationalstructure, actively recruiting high-caliber technical professionals and engaging external experts for guidance. STL hasimplemented theRules for the Professional Grading of R&D Personnel, ensuring standardized quali?cations and continuousenhancement of professional capabilities. By conducting professional grading evaluations, the Company incentivizes R&Dpersonnel to overcome technological barriers, maintaining its position as a leader in the industry.

Innovation and R&D

R&D Con?dentiality ManagementTo safeguard its legitimate rights and interests, STL has formulated theManagement Measures of R&D Information Con?dentiality

to ensure the appropriate use, e?ective management, and protection of R&D information. This policy standardizes the behaviorof personnel handling con?dential information and mitigates the risks of illegal acquisition, misuse, and leakage of R&D data. Byestablishing a comprehensive R&D information con?dentiality management system, the Company ensures intellectual propertyprotection for research outcomes and reduces commercial risks associated with information disclosure.

?Deepening expertise in the C3 industry chain, independently developing polyol productionprocesses, enhancing research on acrylic acid and ester production technologies, advancingnew downstream materials, and exploring bio-based acrylic acid synthesis?Entering the hydrogen energy sector, developing hydrogen fuel cell materials, andmaximizing the e?cient use of by-product hydrogen?Promoting high-quality growth of the C2 industry chain, including the development ofmetallocene polyole?n and elastomer production processes, advancing di?erentiation andleapfrog progress in the domestic high-end polyole?n sector, and collaborating with domesticuniversities on waste plastic recycling technologies

Expansion ofthe industrychain &hydrogenenergydevelopment

?Developing functional products (e.g., antibacterial, deodorizing, and fragrance-releasingvariants) to meet consumer demand?Developing functional SAP products (e.g., high-retention and high-pressure products) toenhance hygiene product quality?Developing eco-friendly biodegradable SAP for applications in agriculture, cosmetics, andfood preservation

High-performanceSAP &functionalproductdevelopment

?Innovating green and low-carbon technologies such as carbon capture & utilization (CCU)and hydrogen energy integration, accelerating the industry's green transformationGreen &low-carbondevelopment

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Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

In February 2024, STL signed a cooperation agreement with Jiaxing Nanhu High-Tech Zone and the Departmentof Chemistry of Fudan University to jointly develop new cycloole?n copolymer (COC/COP) synthesis technologies.By leveraging the "dumbbell-shaped" model of university–industry collaboration, the initiative aims to establisha provincial-level joint laboratory and a graduate training base.

In January 2024, STL, in collaboration with Zhejiang University and other academic and corporate partners, launched the"Low Expansion/High Adhesion Lithium-ion Battery Electrode Adhesive Research and Development" project, which wasselected as a key initiative under Zhejiang Province's "Leading Goose" R&D special program. This project focuses on thedemand for new energy development under the dual-carbon strategy, driving innovation in water-based polyacrylic acid(PAA) lithium battery adhesives. With its low expansion and high adhesion properties, this adhesive is expected to becomethe next-generation anode material binder, further propelling the new energy industry forward.Exploring a New Model for Campus-enterprise Cooperation

"Leading Goose" Initiative Supporting New Energy and Advanced Materials R&D

Case

Case

Industry-Academia-Research-Application CollaborationGreen Product R&D

STL continues to deepen integration of industry, academia, research, and application. The Company has established jointlaboratories, innovation alliances, and academician and postdoctoral workstations in partnership with Zhejiang University,Tongji University, Fudan University, East China University of Science and Technology, and Shanghai University. This collaborativeframework fosters an integrated innovation ecosystem that spans basic research, technological innovation, achievementtransformation, and industrial development.Through joint e?orts with universities and research institutes, STL has undertaken a series of critical technological advancements.Notable achievements include the development of ultra-low-density ethylene copolymer structure characterization andapplication technology, as well as the resource utilization of acetic acid purified from acrylic acid wastewater. These researchoutcomes have been successfully commercialized. Additionally, the Company collaborates with universities in training master's anddoctoral-level talents, establishing exemplary talent development bases, and cultivating high-caliber R&D professionals to supportsustainable corporate growth. STL also actively participates in the formulation of national and industry standards, having led orcontributed to multiple national, industry, and group standards, further enhancing its industry position and in?uence.

STL is committed to expanding the application of green products and processes, enhancing product value, and driving thegreen transformation of the chemical industry.

GreenMaterials

&

Use ofResources

Green Processes

&TechnologicalInnovation

Development

of GreenProducts

Utilize CO

efficiently in green processes such as coupling ethyleneoxide with CO

to produce ethylene carbonate.

Using carbon dioxideas resource

High-purity H

produced during light hydrocarbon cracking is directly usedin production processes, addressing the challenges of "green hydrogen"storage and transportation while laying the foundation for the hydrogeneconomy in the future.E?cient use of hydrogen-rich resources

Using light hydrocarbons (e.g., ethane, propane) as feedstocks o?erssigni?cant green and low-carbon advantages over coal and oil.E?cient use of lighthydrocarbon materials

Breakthroughs in energye?ciency optimizationDevelopment of high-performance catalystsHarmless disposal ofhazardous waste

High-end polyole?nproduct pipelineEco-Friendly functionalchemicalsInnovations in newenergy materials

Optimize POE production technologies to reduce raw materialconsumption and energy consumption while enhancing productperformance, advancing the green development of China's photovoltaicindustry.Develop high-performance catalysts with independent intellectualproperty rights, achieving multiple technological breakthroughs thatdrive the localization of high-end raw materials and advance greenprocess upgrades.Successfully develop a deactivation technology for the harmless disposalof waste ethylene polymerization catalysts, which transforms hazardoussubstances into land?ll-safe solids, achieving zero pollution emissions.

Develop photovoltaic-grade POE materials to support the developmentof the new energy sector. Develop a variety of high-end polyolefingrades to improve the localization rate of high-end polyole?n products.Develop a new formaldehyde-free, zero-pollution reducing agent,filling a gap in the domestic market. The anti-yellowing agent forsuperabsorbent resins enhances resistance to high humidity and heat,reducing reliance on imports.In-house developed lithium battery binder technology (low expansionrate, high adhesion), improves the cycle life and energy density of silicon-based batteries. Ethylene carbonate homogeneous catalyst technologydrives the development of green chemical processes.

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Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

IndicatorUnit202420232022

R&D team & investmentNumber of R&D personnelperson1,2751,271992Bachelor's degree person1,0201,151882Doctorate or master's degreeperson255120110R&D investmentRMB'00 million

17.5116.2612.41Ratio of R&D expenses to operatingincome

%

3.843.923.35PatentsInvention patents ?leditem148 40 39Invention patents granteditem36 29 27Valid invention patentsitem134 100 69Utility model patents ?leditem117 35 68Utility model patents granteditem85 67 66Valid utility model patentsitem304 220 165Total valid patentsitem438320234Software copyrights ?leditem8 8 0Software copyrights granteditem142 0Valid software copyrightsitem3723 21IP protection training

Training sessions conductedsession

Employees trainedperson804933Total hours of training providedhour

365.53

Intellectual Property ProtectionSTL continuously enhances its intellectual property (IP) management framework to safeguard its innovations. The Companyhas established policies such as theManagement System for Corporate PatentsandManagement System for ConfidentialInformation. Since 2018, it has implemented an IP management system that integrates the entire lifecycle of IP acquisition,maintenance, evaluation, licensing and transfer, risk control, con?dentiality, R&D, procurement, and production into its controlprocedures. To strengthen patent mining capabilities among R&D personnel and technical engineers, and to raise overallawareness of IP protection, the Company conducts comprehensive training sessions covering fundamental patent knowledge,patent mining and application, management system manuals, and procedural documents.In May 2024, the Company successfully passed the second supervisory audit conducted by a third-party IP managementcerti?cation body. Throughout the year, there were no signi?cant IP infringement or litigation incidents.Metrics and TargetsIn 2024, STL established R&D innovation goals aligned with its overall development strategy, considering resource advantagesand business characteristics across its various bases and divisions. These goals were further broken down into speci?c targets,with corresponding measures implemented to achieve remarkable progress in patent applications and R&D investment.

R&D personnel reached

1,275persons

2024 AchievementsIn 2024

YoY growth131%

for invention patents,

27%

for utility modelsThe high-quality patent ?ling initiative maintains steady progressContinue increasing R&Dspending, aiming for RMB

billion over ?veyears to overcome criticaltechnological barriers in newmaterialsContinuously attract anddevelop high-level innovativetalents, targeting a researchteam of2,000

members within ?ve years

TargetCategory

Patentapplications

R&Dinvestment

R&Dpersonnel

In 2024,STL planned to ?le

patents,including

inventionpatents and

utility model patents

total R&D investment reached RMB

1.751

billion, increased by

7.69%

YoYIn 2024

STL ?led

invention patents (110%completion rate)

utility model patents (177% completion rate)

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Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Digital Transformation Strategy

Guided by its "He" culture, STL committed to the vision of leading digital transformation in the chemical industry. TheCompany steadfastly advances its "Dual-Five-Year Plan," focusing on "Management Leadership" and "TechnologyLeadership" while building a comprehensive digital platform covering the entire upstream and downstream industrialchain. This initiative strengthens data, operational, organizational, security, and innovation capabilities, resulting in arobust digital ecosystem spanning ten key areas, including integrated business-finance operations, collaborative officeplatforms, process optimization, digital factories, data centers, and industrial internet applications.

Digital Development RoadmapSTL has established a phased digital transformation plan to enhance operational efficiency and market competitivenesswhile supporting sustainable development and safe production. The Company closely monitors advancements in artificialintelligence (AI) and actively integrates AI-driven innovations into its operations.Planningphase

2024Informatization - Comprehensivebusiness coverage

2025-2026Digitization - Digitalized operations

2027-2028Intelligentization - Intelligent decision

makingStrategicdecision-making

Marketing data analysis

Production & procurement dataanalysis

Intelligent business analysis &performance evaluation

Corporategovernance

Enhancing HR management,optimizing CRM andSRM systems, pilotinge-procurement

Implementing comprehensivebudget management, upgrading?nancial controls and analytics

Building cost-bene?t models forintelligent approvals

Operationalexecution

Expanding informationcoverage to the SatelliteEnergy Scope III project,integrating safety platforms,upgrading LIMS systems

Deploying proprietary MES systems,upgrading safety and regulatoryplatforms

Establishing digital twin factories,deploying RBI and RCM models,applying AI in multiple scenarios

Support &assurance

Centralized alarmmanagement platform

Contract managementoptimization, uni?ed documentand portal management

Data center infrastructureupgrades

Digital Intelligent Manufacturing

IT Infrastructure PlatformThe Company's Business Platform

Operations Management SystemManufacturing Management System

Group MarketingPlatform

Group ProcurementPlatform

Group IntelligentManufacturing Platform

Group FinancialPlatform

Group HRPlatform

Group OAPlatform

Group R&D

Platform

Group SafetyPlatform

Group Operations & Big Data Control Platform

Customer Relations Management System / Supplier

Relations Management SystemProcurement Management System / Financial

Management SystemHuman Resources Management System /Collaborative O?ce SystemDecision-Making Support System

Safety Management System /Production Intelligent SystemSales, Logistics, and Warehousing

Management SystemQuality Management System / R&D Management System

Management Leadership andTechnology Leadership

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Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

5G Smart Factory DevelopmentSTL is actively advancing the construction of 5G smart factories. By integrating chemical industry demands with 5G technology,the Company has incorporated 5G modules, terminals, gateways, and cutting-edge technologies such as edge computing,big data, arti?cial intelligence, and VR/AR. This initiative has established a fully connected 5G+ industrial internet ecosystemfor chemical production. Covering 20 application scenarios—including 5G+ precision operations, predictive equipmentmaintenance, intelligent scheduling, and production e?ciency management—the project ensures comprehensive integrationof safety, environmental protection, emergency response, energy e?ciency analysis, logistics tracking, and public services.

AI-Powered InnovationsIn response to national initiatives promoting AI-driven industrialization, STL has pioneered the "AI + Chemical" modelto enhance new productivity standards. In 2024, the Company successfully developed an "AI-based Flexible IntelligentManufacturing Model for High-End New Materials," which was selected for Zhejiang Province's 2024 Arti?cial IntelligenceApplication Scenarios List. This model integrates large-scale AI optimization algorithms, data-driven deep learning models,and real-time intelligent scheduling technology. It supports enterprises in optimizing production planning, enhancingresponsiveness, and improving decision-making quality. The model has successfully reduced inventory accumulation andmarket risks while increasing resource utilization e?ciency and production e?ectiveness. It promotes ?exible manufacturingin multi-variety production environments and optimizes standardized intelligent manufacturing processes.

STL has actively developed its data management capabilities as part of its digital transformation strategy. The Company has builta professional team specializing in data management and application, fostering a data-driven mindset and strategic approach. Bystandardizing work?ows, the Company has ensured the e?ective utilization of data in corporate operations. As a result, its wholly-owned subsidiaries, Satellite Energy and Pinghu Petro Chemical, have obtained National Data Management Capability Maturity(DCMM) Level 3 and Level 2 certi?cations. Notably, Satellite Energy is the second manufacturing enterprise in Jiaxing City to achievethis recognition. The certi?cation serves as a testament to the Company's robust data management capabilities and provides strongsupport for its digital transformation initiatives. STL will continue adhering to DCMM standards, actively responding to nationaldigital economy strategies, and driving the ongoing development of intelligent and digital transformation to empower high-qualitycorporate growth and industry-wide digital upgrades.

DCMM Certi?cation – Advancing Digital and Intelligent ManagementCase

Driving smart chemicalproduction

Leading intelligent anddigital transformation

Empowering the industrysupply chain

With 5G peak speeds reaching 1Gbps,production and management efficiencyhave signi?cantly improved, fostering theintelligent transformation of productionenvironments to accommodate variousmanufacturing demands.

AI-powered inspection technology enablesreal-time detection and mitigation ofproduction safety hazards, ensuringcontinuity and workforce reliability.

Leveraging geographical advantages,the Company has developed a supplychain management platform for thechemical industry, integrating procure-ment, production, and sales to providetransformation insights for other chem-ical enterprises and improve supplychain coordination.

E?ectiveness of Digital Transformation

By re?ning equipment performance management andproduction processes, the Company has optimizedequipment investment and capacity allocation,strengthened centralized factory control, and e?ectivelyreduced product, operational, and quality costs.

The Company has reduced inventory redundancy,shortened delivery times, and minimized designiteration cycles.

Increased Supply Chain Agility

Digitalized management has reduced emissions of"three wastes," improved energy e?ciency, loweredindustrial water consumption, and minimizedresource waste.

Real-time safety response speed at plants has reached themillisecond level, with an identi?cation accuracy rate of upto 85%. Strengthened real-time hazard detection has led toa 50%-80% reduction in safety incidents.

Reduced Safety Risks in Production

Enhanced Production E?ciencyStrengthened Green and Low-Carbon Production

Predictive maintenance through dataanalysis accelerates fault diagnosticsand enhances production stability,steering chemical manufacturing towardsautomation, digitization, intelligence, andcollaborative e?ciency.

The Company has deployed 5G networkinfrastructure to explore remote control,safety alerts, intelligent inspections,environmental monitoring, and datacollection applications, providing robustsupport for smart manufacturing.

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Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Quality Management System Certi?cationThrough strict quality control processes and continuous improvement initiatives,STL ensures compliance with international standards and customer expectations.The Company has actively promoted quality management system certification,achieving 100% coverage of operational sites under the ISO 9001 certificationduring the reporting period.

ISO 9001 Quality Management System Certi?cation

The Company did notexperience any violationsor penalties related toproduct quality.

In 2024

Quality Management ProcessesSTL has developed a comprehensive quality management process that covers the entire product lifecycle—from raw materialacquisition to after-sales service—ensuring the highest product and service standards.

High-Quality Products and Services

Strategy

STL strictly complies with theProduct Quality Law of the People's Republic of Chinaand theStandardization Law of thePeople's Republic of China, among other laws and regulations. The Company has formulated and updated a series ofinternal management documents, including theQuality Management System, the Incident Management System, theQualityManagement Regulations, theCritical Activities and Key Quality Control Points, the Analysis Frequency ManagementGuidelines, and Raw and Auxiliary Materials Management Guidelines. These documents refine assessment standards andenhance employees' awareness and capabilities in improving product quality.The Company has also established systematic inspection checklists and quality risk control frameworks, continuouslyupdating assessment criteria, testing plans, and product standards. By setting and enforcing quality objectives and supervisionplans, STL ensures a systematic and effective approach to quality management, continuously enhancing its overall qualitymanagement level.Impact and Risk ManagementTo mitigate potential risks related to product quality and safety—such as missing critical quality tests, improper handlingof non-conforming products, reliability of testing results, and ineffective execution of quality control measures—STL hasimplemented a series of proactive management strategies.

Quality Management

Governance

STL has established a comprehensive and effective quality and safety management framework, ensuring high standards for productquality and safety across all its facilities and business units. Following the principles of "uni?ed leadership, tiered management, and divisionof responsibilities," each facility and business unit develops a holistic management system tailored to its specific conditions, ensuringclear responsibilities from top management to frontline employees. At the top management level, the General Manager and managementrepresentatives formulate quality and safety strategies and annual objectives, allocate resources, and oversee policy implementation. Themid-management level, including the Quality and Safety Director and the Production Technology and Quality Department, is responsiblefor monitoring daily operations, document management, and ensuring the effective execution of quality measures. At the grassrootslevel, quality and safety personnel, along with employees, are responsible for implementing speci?c measures to ensure compliance withstandards in production activities. Additionally, the Company has established a "daily control, weekly inspection, and monthly review"supervision and assessment mechanism. Through continuous monitoring and evaluation, STL drives improvements in product quality,laying a solid foundation for long-term development and market competitiveness.

Quality and Safety Management Framework of STL

Decision-MakingGeneral Manager and management representativesManagementDirector of Quality and Safety and Production Technology & Quality DepartmentExecutionQuality and safety o?cers and employees

Conduct supplier assessments and strictly enforcethe incoming goods inspection system to ensure rawand auxiliary material quality from the source.Develop trial plans for newly introduced or modi?edraw materials to assess their quality.Store incoming materials in respective areas withproper labeling, maintain inventory records, andconduct regular inspections to prevent deterioration.Segregate and label substandard or deterioratedmaterials separately from qualified ones to ensuretraceability.

Implement quality inspection andmanagement for packaging materialsused in packaging operations and otherprocesses. Once any issues are found,suspend the use of the materials atissue and notify relevant departments.Monitor and inspect packaging mate-rial quality to ensure compliance withrequirements.

Break down quality goals at the beginningof each year, define key control points,and monitor and inspect the interveningprocesses.Organize production in strict accordancewith procedures, maintain quality re-cords, and conduct evaluations.Inspect products in line standards, pre-vent non-conforming products fromgoing into the next process, and handlethem according to review procedures.

Qualityassurancefor raw andmaterials

0103

After-salesquality management

Productpackagingmaterialsmanagement

Productionprocessmanagement

OutgoinggoodsmanagementRetest for issues indicated by abnormal feedback, compare theindicators, and generate reports.Communicate promptly with special customers and establishtechnical agreements to reduce further issues.

Conduct inspections in line with product standards, strictly enforce the"Five Prohibitions on Factory Release", and oversee packaging and storage.Collect market feedback, implement quality improvements, and enhancecustomer satisfaction.

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Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

On August 28, 2024, at theJiaxing Quality Enterprise On-site Exchange Meeting and theLaunching Ceremony of 2024"Quality Month", STL's ChiefQuality O?cer was honored asan exemplary representative.This recognition underscoresthe Company's leadership inquality management.

Chief Quality O?cer Receives Municipal HonorsCaseJiahong New Materials' epoxy propane product received the "Jiangsu Premium Brand"certification, marking the third time the Company has earned this distinction after itspolycarboxylate superplasticizer series. The Company employs the advanced HPPOprocess for epoxy propane production, which o?ers advantages such as minimal pollution,low energy consumption, high atom utilization efficiency, and fewer by-products. Thissigni?cantly reduces environmental impact and aligns with sustainability goals.

Epoxy Propane Awarded "Jiangsu Premium Brand" Certi?cationCase

STL did not experience anyproduct recalls due to safetyrisks or quality issues.During the reporting period

Non-Conforming Product ControlSTL enforces stringent control measures on non-conforming products to uphold productquality. If raw or auxiliary materials fail to meet standards, the Company conductsassessments and takes corrective actions such as conditional acceptance, return, orreplacement—prioritizing returns whenever possible. During production, any identifiednon-conforming intermediate products are immediately investigated, with corrective andpreventive measures implemented to prevent recurrence. For final products that fail tomeet quality standards, the Company adopts rework, downgrading, or disposal measures.As a rule, non-conforming products are not permitted to leave production facilities,ensuring that defective products do not enter the market and protecting the Company'sreputation and product integrity.Detection Capability ImprovementTo ensure the reliability of laboratory testing, STL continuously verifies and improves testing capabilities through externalpro?ciency testing, measurement audits, inter-laboratory comparisons, and internal quality supervision and control. Duringthe reporting period, three subsidiaries established laboratories that meet China National Accreditation Service for ConformityAssessment (CNAS) standards.The Lianyungang Base Laboratory has built a comprehensive quality management and assurance system under CNASaccreditation guidelines. It is equipped with over 150 large-scale testing instruments and devices, with all inspectors receivingprofessional training and certification. In 2024, the lab expanded its CNAS-accredited testing capacity by adding eight newtesting subjects and 104 additional testing parameters. It now possesses CNAS accreditation for 20 testing subjects and a totalof 180 testing parameters.

Quality Culture DevelopmentSTL continuously promotes a culture of quality through ongoing improvements and innovation in quality managementpractices. In 2024, various quality management initiatives were implemented across different facilities and business unitsto strengthen quality awareness and risk control. The Lianyungang Base conducted quality supervision inspections andproduct sampling, with monthly quality assessments and meetings to analyze and drive continuous improvement, e?ectivelyaddressing identified quality issues. The Pinghu Base held its first "Quality Month" event, featuring awareness campaigns,skills competitions, process inspection workshops, comparative analysis of standard production lines, and activity reviews—enhancing employees' quality management awareness.

Metrics and TargetsEach facility and business unit at STL has established quality management targets for 2024, covering aspects such as productquality, raw materials, customer satisfaction, analysis processes, certificates of analysis (COA), production scheduling, andmeasurement accuracy. Monthly statistical analysis is conducted to track progress through quality reports, ensuring steadyadvancement of quality management initiatives.

Target

Intermediate product ?rst-pass quality rate ≥

98%

Achieved

Final product factory pass rate

100%

AchievedCustomer complaint resolution rate

100%

Achieved

major or higher-level quality incidents

No such accidents occurredthroughout the year

2024 Achievements

Product Quality and Safety Training Performance

IndicatorUnit202420232022Training sessions providedsession43236Total number ofemployees trained

person-time1,076825148Total hours of training providedhour

70.543.516

4746

Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Excellence in Customer ServiceSTL strictly adheres to relevant laws and regulations, such as theLaw of the People's Republic of China on the Protection ofConsumers' Rights and Interests, Civil Code of the People's Republic of China and Advertising Law of the People's Republic ofChina.Based on theManagement Regulations on the Applied Technology Service of the Marketing Center,the Company hasestablished internal documents such as theSales Contract Management System,theCustomer Reception Etiquette Guide,the

Customer Relationship Maintenance Implementation Rules,theCustomer Care Manual, andtheLogistic Management System,which provide comprehensive standards and guidance for the construction of the Company's service system. The Companycontinuously standardizes customer service management, optimizes the existing service system, and standardizes operationsin areas such as customer service, contract signing, logistics services, and payment settlement. In terms of product qualitystandards, the Company follows international and industry standards and gradually progresses towards establishing its ownenterprise standards, consistently pursuing product quality improvement to meet customer needs with high-quality products.In service standards, the Company has developed service script manuals and organized sta? training, e?ectively improving theservice capabilities of business personnel and providing customers with a better and more professional service experience.

Smooth Communication with CustomersTo ensure that STL can promptly listen to and effectively respond to customer demands and feedback, departments maintain closecontact with customers through email, phone, video conferences, and on-site visits. Communication is scheduled according to customeravailability and needs, and for important matters, video conferences are conducted for more e?cient exchange. Additionally, the Companyhas set visitation frequencies according to customer levels to ensure regular interaction with customers of varying tiers and strengthensface-to-face communication through participation in industry conferences. The Company also emphasizes gathering customer feedbackand suggestions, using them as important references for improving products and services by the R&D and production departments.Annually, the Company conducts a specialized survey in the form of a Customer Satisfaction Survey, covering dimensions such asthe STL brand, sales services, ethical standards, technical support, after-sales service, logistics services, and expectations for futurecooperation. Statistical analysis of the survey shows that STL's customer satisfaction rate is 100%, achieving 95.5% of the annual goal.The Company formulates a satisfaction survey report based on the results, provides suggestions for recurring issues or areas withwidespread improvement feedback, and incorporates them into the improvement departments' monthly work plans to ensure continuousoptimization of products and services.For customer complaint management, the Company has developed theManagement System for Customer Complaint Handlingand standard processes, setting detailed standards and timelines for receiving, transmitting, responding to, reporting, and resolvingcomplaints. This ensures that, upon receiving a customer complaint, an initial response is immediately provided to acknowledge receiptand ensure prompt handling of the issue.In 2024, the Company received 15 customer complaints, with a complaint response rate of 100% and a resolution rate of approximately80%. Issues related to logistics and labeling were addressed, and corresponding improvement and enhancement plans have beenformulated from the perspectives of processes, systems, and regulations. In the future, STL will continue to focus on customer concernsand continuously improve service quality.

Digital Marketing System

STL focuses on the core concept of "customer-centered" and builds standardized process systems through digitaltransformation to continuously enhance business operational capabilities and competitiveness. In 2024, the Companyintroduced a CRM system

to carry out a marketing digital transformation, achieving full digital management of businessprocesses, covering the entire process from potential customer leads to final payment collection, ensuring seamlessconnection and smooth processes. The application of the CRM system optimizes business processes, customer management,and decision-making support, signi?cantly improving operational e?ciency and customer experience:

Utilize digital means to classify andmanage customers and credit, im-proving the precision of customermanagement.

Support optimization of logisticsprocesses, enhancing logistics e?-ciency and service quality.

Obtain price information throughthe system and applies it to prod-uct pricing and contract order ex-ecution, ensuring the effective im-plementation of pricing strategies.

1 CRM（Customer Relationship Management）

Achieve full digital managementfrom order generation to shipment,enhancing management e?ciencythrough visual monitoring.

OrderManagement

LogisticsOptimization

CustomerManagement

Price andContractControl

Response rate tocustomer complaints

100%

Completion rate ofapproximately

80%

In 2024

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Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Supplier EmpowermentSTL upholds a strategic philosophy of growing alongside key suppliers, aiming to enhance the overall quality and e?ciency ofthe supply chain through training and exchanges. The Company regularly dispatches technical and quality control personnel tosupplier sites, providing professional guidance and training to help suppliers improve production management, quality control,and supply assurance capabilities. By establishing long-term cooperative relationships, the Company and its suppliers jointlylearn from best practices, optimize process flows, and ensure the stability of raw material and supply quality. Additionally,the Company periodically organizes seminars and technical exchange meetings to share industry's best practices and drivecoordinated development across the supply chain.

Ethical Procurement

STL places great importance on ensuring transparency, fairness, and integrity insupply chain procurement. The Company has developed theSupplier PerformanceEvaluation System,theNotice on Integrity Responsibility,and theManagementMeasures for Procurement Risk Prevention,signing the Notice on IntegrityResponsibility with suppliers and holding training sessions on the suppliercode of conduct to emphasize the Company's policies on integrity and anti-corruption, promoting the basic principles of "sunshine procurement" across allsuppliers. Additionally, the Business Procurement Center regularly assesses andreviews procurement employees' professional competence, job performance,and professional ethics to continuously enhance their expertise and integrity indischarging duties.

Digital PlatformTo improve supply chain management and procurement e?ciency, STL has developed the smart procurement platform, SRMsystem

, to manage suppliers throughout their lifecycle.Since its launch in 2021, the SRM system has streamlined the entire procurement process, facilitating smooth data exchangeacross business functions and reducing errors caused by information ?ow issues. In 2024, the Company o?cially launched aperformance management module, implemented cross-departmental performance evaluations, optimized SRM, and visualizedprocurement project reports, increasing transparency and enhancing the "sunshine" procurement process through traceablework?ows. The Company has further leveraged this system to enhance its reuse management e?orts, promoting the utilizationof the idle materials platform. Additionally, dedicated task forces have been established to improve delivery execution rates,optimize e-commerce procurement processes, and eliminate ine?ective approval nodes in the OA work?ow, thereby enhancingprocurement e?ciency. At present, 100% of quali?ed suppliers have successfully completed online registration.The Company plans to expand its information technology infrastructure further in 2025, increasing e-commerce coverage,re?ning supplier classi?cations, and visualizing procurement quality analysis reports to enhance supply chain informatizationand management accuracy.

Advancing Responsible Procurement

Sustainable Supply Chain

STL has developed theSupplier Management Measures,theProcurement Management Regulations,theSupplier PerformanceEvaluation System,and theManagement Measures for Supplier On-Site Inspection, to implement full-process standardizedmanagement from supplier admission, selection, to performance evaluation and exit, integrating sustainable development intoevery stage of the supply chain.Supplier Admission

At the supplier admission stage, the Companyimplements refined control over the supplieradmission process, requiring suppliers to meetall provisions of theSupplier/Contractor Code ofConduct.During the supplier selection process, the Companycomprehensively evaluates suppliers based onkey product and production capabilities, technicallevel, and quality assurance capacity. Supplierswith certi?cations for environmental managementsystems and occupational health and safetymanagement systems are prioritized. Suppliersthat have had issues in safety or environmentalprotection are subject to a veto policy. After initialqualification review, a supplier certification team,consisting of the procurement, quality, and demanddepartments, jointly decides whether samplecerti?cation and on-site inspection are needed.

Supplier Due Diligence and Tiered Management

STL implements a scienti?c supplier performance evaluation system andtiered management. With the Business Procurement Center at its core, theCompany collaborates with key functions such as quality management anddemand departments to form a cross-departmental supplier certi?cationteam that conducts comprehensive annual reviews and on-site audits ofsuppliers. Suppliers are required to respond to any non-compliance issuesand implement corrective actions to drive continuous improvement.STL's supplier evaluation covers performance and market share, ?nancialstatus, management systems, quality assurance capabilities, R&Dand equipment capacity, ESG management levels, and environmentalcerti?cations. Based on assessment results, suppliers are tiered to ensurethe stability and sustainability of the supply chain.In 2024, the Company made signi?cant progress in supplier management,completing on-site audits for 36 suppliers and identifying 93 issues, all ofwhich were recti?ed. Additionally, through a rigorous annual performanceevaluation mechanism, the Company eliminated 84 suppliers, includingthose failing on-site audits or not meeting standards after the annualperformance evaluation.Supply Chain Carbon Dioxide ManagementSTL places great emphasis on managing carbon emissions in the supply chain, actively launching the Supplier Carbon DioxideManagement program to enhance control over suppliers' sustainable production practices, improve transparency in raw materialprocurement and carbon emissions, and proactively identify and manage sustainability risks in the supply chain.The procurement department prioritizes low-carbon and environmentally friendly suppliers and products, integrating carbon emissionconsiderations into procurement decisions to reduce emissions at the source. By setting clear procurement standards and collaboratingwith other departments, the Company encourages suppliers to implement carbon emission measurement and reduction measures,promoting a low-carbon supply chain.At the same time, the Company works closely with customers, sharing the group's "4R" green and low-carbon industry model, andengaging in in-depth discussions on carbon reduction calculations, plans, and other topics to support customers in advancing greensupply chain initiatives and achieving ambitious carbon reduction goals, contributing to sustainable development. Additionally, theCompany organizes carbon reduction training for suppliers and partners, widely disseminating knowledge and technology related tocarbon reduction to improve the environmental awareness and capability of the entire supply chain.

The completion rate forsigning theNotice onIntegrity Responsibility

with suppliers was100%

In 2024

SRM（Supplier Relationship Management）

Supplier Risk Assessment ManagementTo effectively manage supply chain ESG risks, STL continuously refines its Procurement Risk Prevention List. The internal controldepartment of the Business Procurement Center provides ongoing oversight of the entire procurement process, ensuring risk controlmeasures remain effective. Meanwhile, the Audit and Supervision Department conducts unannounced audits, establishes complaintchannels for supply chain partners, and ensures compliance. In 2024, the Business Procurement Center utilized its procurement platformand SRM system to track contract implementation, covering delivery notifications, receipt monitoring, invoice follow-up, paymentarrangements, and dispute resolution, thereby ensuring suppliers deliver quality goods on time.

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Promoting Industry DevelopmentIndustry Standards DevelopmentSTL and its subsidiaries actively participate in drafting and formulating various product standards, including national standards forindustrial acrylic acid and esters, superabsorbent resins used in diapers and sanitary napkins, as well as group standards for refinedindustrial acrylic acid and by-product hydrogen from propane dehydrogenation. The Company also plays a key role in developing industrystandards for composite absorbent cores used in disposable paper hygiene products. Additionally, STL has been actively involved indrafting theESG Disclosure Guidelines for Petrochemical Enterprises and the ESG Disclosure Evaluation Speci?cations for PetrochemicalEnterprises,contributing to the standardization of ESG disclosures in the industry. As a member of the National Technical Committee141 on Paper Industry of Standardization Administration of China, its subsidiary, Satellite New Materials, has participated in the review ofthree standards, including theAbsorbent sanitary paper products and raw materials— Evaluation method of deodorant property,anddiscussions on theGreen product assessment—Paper and paper products.Furthermore, it has contributed to the formulation of nationalstandards for superabsorbent resins. The Company has also reviewed and provided conclusions for 133 national standards and fourindustry standards, including the Sanitary product - air-laid, thereby supporting the improvement and updating of standards in the paperindustry. Through its extensive involvement in standard-setting initiatives, STL sets high benchmarks to drive industry upgrades and fostercontinuous industry development.

Industry Collaboration and ProgressAs a leading player in the domestic light hydrocarbon industry, STL actively engages in industry dialogues through seminars,industry associations, and forums. The Company fosters deep industry collaboration by partnering with value chain enterprisesto share technological innovations, green development practices, and explore sustainable pathways for the chemical industry.

On January 12, 2024, STL and PetroChinaInternational Co., Ltd. signed a Memorandum ofUnderstanding in Beijing, marking the beginningof a comprehensive collaboration in the fields ofchemicals, natural gas, new energy, and advancedmaterials. This partnership represents a signi?cantstep in STL's commitment to the national strategyof innovation-driven development and industrialstructure optimization. By working together, bothparties will drive technological innovation, expandmarkets, and upgrade industries, exploring newbusiness models and collaboration opportunitiesto inject fresh momentum into the high-qualitydevelopment of the energy and chemical sector.

Memorandum of Understanding Signed with PetroChina International Co., Ltd.Case

STL was selected for the first batch of the 2024 "Zhejiang Made" Standards Cultivation Program, undertaking the formulationof standards for industrial methyl acrylate. With its leading production technology and innovation capabilities, the Companycontinues to strengthen its advantages and in?uence in the C3 industry chain. This standard-setting initiative aligns the Companywith Zhejiang Province's high-quality manufacturing development goals, enhancing the advancement and applicability ofstandards, reinforcing collaboration in key industrial chain segments, and guiding the industry towards e?cient, standardized, andsafe development. Additionally, it contributes to improving the quality of downstream products in sectors such as architecturalcoatings, pharmaceuticals, and daily chemicals. STL will adhere to the "Zhejiang Made" standard system framework, promotehigh-quality standard development, deepen brand building, enhance the quality of standard supply and implementation, andsupport the sustainable development of the industry.

Inclusion in the First Batch of the "Zhejiang Made" Standards Cultivation ProgramCase

On September 19, 2024, STL participated in theInternational Chemical Industry Fair (ICIF CHINA2024) under the theme "Sharing the Beautyof Chemistry with the World." The Companyshowcased its achievements in green and low-carbon development, technological innovation,and digital transformation. During the exhibition,STL shared its breakthroughs in key technologiesand outlined its future research and developmentplans. The Company also presented its greendevelopment model within the integrated lighthydrocarbon industrial platform and introducedthe "Nebula" industrial internet platform, whichenables smart production through "businessonline, operational process management, riskvisualization, and intelligent decision-making."Through this event, the Company engaged withdomestic and international partners to explorenew collaboration opportunities and provideinnovative chemical material solutions for a betterlife. This initiative highlights STL's proactive role inindustry exchanges and its leadership in drivingindustry advancements.

Strengthening Cooperation through Industry Exhibitions to Promote Petrochemical Industry UpgradesCase

Number of National StandardsParticipated in Formulating

Number of Industry StandardsParticipated in Formulating

Number of Group StandardsParticipated in Formulating

2024

2023

2022

In August 2024, STL successfully held the "2024 STL ESG Promotion Conference," which attracted active participationfrom 2,249 suppliers, accounting for approximately two-thirds of the Company's qualified suppliers. The trainingcovered four core areas: green and low-carbon development, safety and environmental protection, integrity andcompliance, and shared growth. This initiative conveyed the Company's high standards and strict requirements in ESGpractices, helping suppliers better understand and implement sustainable development principles.

Supplier ESG Promotion ConferenceCase

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Innovation to Foster an Excellent Brand Satellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Dual Carbon Goals forGreen Development

STL remains steadfast in its commitment to low-carbon development as a core strategy, actively aligning with China's "dual carbon"goals by expanding its deployment of clean technology research and application. The Company integrates the concept of greendevelopment into its production and operations, continuously enhancing energy e?ciency and synergizing pollution reduction andcarbon mitigation, thereby solidifying its green foundation for sustainable growth.

UN SDGs

GovernanceSTL has established the Strategy and ESG Committee to oversee environmental strategy planning, targetsetting, policy formulation and execution, climate risk assessment, performance evaluation, and informationdisclosure. The committee regularly reports to the Board of Directors. At the operational level, each base andbusiness unit implements a comprehensive responsibility management model, where the General Managerholds overall accountability, and the HSE Management Department manages environmental a?airs to ensureclear responsibilities and e?ective execution.Strategy

STL has developed a comprehensive "4R" green and low-carbon industrial model—encompassing CarbonReduction, Carbon Recycle, Carbon Reuse, and Carbon Replacement—starting from raw materials and extendingacross the entire industrial chain. With "green and low carbon" and "technological innovation" as dual engines, theCompany is building a green manufacturing system, formulating a green hydrogen utilization plan, continuouslyoptimizing its energy structure, and establishing a low-carbon value chain to enhance its climate resilience.Goals

Increase investments in clean technology developmentPromote energy e?ciency

and reduce energy intensity annually

Impacts,risks, andopportunities

Through its integrated light hydrocarbon industrial chain, STL actively deploys clean technologies and low-carbon solutions, replacing traditional high-carbon raw materials with cleaner alternatives such as ethane,signi?cantly reducing carbon emissions. Additionally, the Company promotes green transformation across theentire industrial chain through carbon recycling, resource circular utilization, and hydrogen energy deployment.STL proactively identifies risks—including technological bottlenecks, cost pressures, regulatory tightening,market volatility, and environmental compliance challenges—while also recognizing opportunities such astechnological innovation, enhanced market competitiveness, policy support, and shifting market preferences,taking necessary measures accordingly.

Based on 2020 as the baseline year, STL commits to reducingcarbon dioxide emissions by over

million tonnes by 2030Based on 2024 as the baseline year, STL commits to reducingwastewater pollutants (including COD, ammonia nitrogen)discharge intensity by over

15%

by 2027Solid waste generation intensity decreased byover

8%

Freshwater usage intensity decreasedby over

4%

Emission intensity of waste gaspollutants (including VOCs, NOX, SO

)decreased by

13%

and achieving value chain carbonneutrality by 2050

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Dual Carbon Goals for Green DevelopmentSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Focusing on Low-Carbon StrategiesOpportunities in Clean TechnologySTL is prioritizing the development of new material solutions for emerging sectors such as new energy vehicles, lithium batteries,and solar cells to provide green and low-carbon chemical solutions in response to global challenges like climate change andenvironmental pollution. The Company regards the research and application of clean technologies as a core development strategy,continuously advancing its "4R" green industry model—from selecting low-carbon raw materials to end-of-pipe carbon recovery—to pioneer the establishment of a full-scale low-carbon industrial chain.

STL's "4R" Green and Low-carbon Industry Model

Strengthening Clean Technology R&DSTL is continuously increasing its R&D investments in clean technology, striving to drive green and low-carbon transformationthrough technological innovation. The Company aims to invest RMB 10 billion over the next ?ve years, with over 40% allocatedto research areas including battery raw material substitution, low-carbon technology, green new material development, carboncapture and utilization, and waste treatment and recycling.

Hydrogen Energy Production and UtilizationAs a key domain in clean energy development, hydrogen energy is widely regarded as the optimal pathway for deepdecarbonization in sectors such as transportation, industry, and construction. As a leading enterprise in the domestic lighthydrocarbon industry, STL has formulated a green hydrogen utilization plan, actively advancing the full-chain developmentof hydrogen production, storage, transportation, and utilization. The Company is planning to construct hydrogen energyintegrated utilization demonstration projects, transitioning from "light hydrocarbons" to "hydrogen excellence."

STL's Green Hydrogen Utilization PlanSTL leverages its light hydrocarbon integrated industrial platform, utilizing the abundant high-purity by-product hydrogen(99.999%) generated from ethane cracking and propane dehydrogenation processes. This directly enables the utilization ofhydrogen energy while e?ectively achieving low-carbon hydrogen production.

CarbonEmissionReduction

CarbonCapture

CarbonRecovery

CarbonSubstitution

Adoption of light hydrocarbonproduction processes.Implement energy-savingrenovation programs to reduceproduct unit consumption.Optimize the structure of energyuse and increase the proportionof clean energy use.

Compared to the coal-basedchemical process, SatelliteChemical's light hydrocarbonprocess can reduce CO

emis-sions by 91,200 tonnes for every10,000 tonnes of ethylene pro-duced and by 85,500 tonnes forevery 10,000 tonnes of propyl-ene produced.

The light hydrocarbon crackingfacility will produce 400,000tonnes of high-purity hydrogenannually when fully operational.Compared to "grey hydrogen,"this process can reduce CO

emissions by 10 million tonnesduring production and by an ad-ditional 4.6 million tonnes whenthe hydrogen replaces tradition-al energy sources.

Enable effective carbon capture through carbonateutilization: for every 1,000 tonnes of carbonate, 600tonnes of CO

can be consumed. Once fully operation-al, Satellite Chemical's carbonate facilities can recycleapproximately 400,000 tonnes of CO

annually.

"4R" Green Industry Model

Strengths and Achievements

Strategy

Increasedeployment andcommissioningof carbon dioxidecapture andpuri?cation units.

Research on carbondioxide chemicaltechnology andconstruction of aperfect industrialchain of "carboncapture, carbonrecovery and newenergy materials".

Layout of hydrogenenergy production andutilization.Optimize the structure ofenergy use and increasethe proportion ofrenewable energy use.Selection of clean andlow-carbon raw materials.

In alignment with national policies, STL has conducted in-depthresearch on the14th Five-Year Plan of Action for the Control of PlasticPollution, focusing on the industrial study of polyethylene recycling andutilization. The Company benchmarks leading petrochemical enterprises,systematically analyzing their research trajectories in plastic recyclabilitywhile dynamically tracking technological advancements. STL has alsoestablished collaborative agreements with leading academic institutionsto facilitate the commercialization of research findings. Following acomprehensive evaluation of various technological pathways, STL hasselected a cost-e?ective, carbon-reducing, and scalable preparation routeand has initiated relevant projects.

Research on Polyethylene Recycling and UtilizationCase

STL has obtained

patents relatedto green and low-carbonresearch and development,which will provide solidsupport for the dual growthof both operating revenueand net pro?t in 2024.

As of the reporting period

Plan a hydrogen utilization demon-stration project within the park,including hydrogen-powered shuttlebuses for employee commuting andhydrogen energy storage projects.

Committed to promoting circulareconomy and renewable energyutilization within the park, providinggreen hydrogen to businesses withinthe park, and reducing carbondioxide emissions from hydrogenproduction.

Plan the development of hydrogen-based chemicals, foster industrialchain synergy, and establish agreen and low-carbon productiondemonstration base.

Industrial integrationPilot exploration

Project deepening

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Dual Carbon Goals for Green DevelopmentSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

STL has invested in the construction of a hydrogenloading and unloading platform with a dailycapacity of 900,000 Nm

at its Lianyungang Base,supplying photovoltaic and hydrogen energyenterprises within a 300-kilometer radius.

Driving Hydrogen Technology Innovationto Support Clean Technology DevelopmentCase

During the reporting period, STL's variousbases and business units jointly conductedan internal cross-audit of the energymanagement system. External auditexperts were invited for on-site guidance,enabling cross-base collaboration, mutuallearning, and gap identification, whichfurther optimized the operation of theenergy management system.

Internal Energy System AuditAcross Bases

In 2024, STL's Scope Ⅲ PSA unit was successfullycommissioned at its Pinghu base, significantlyenhancing hydrogen production capacity.By optimizing the hydrogen energy systembalance, the base plans to supply high-pressure,high-purity hydrogen externally, with pipelineconstruction now in full progress.STL led the development of the groupstandardByproduct Hydrogen from PropaneDehydrogenation(T/CPCIF 0337—2024), whichwas officially released and implemented inJune 2024, further standardizing the productionand application of byproduct hydrogen frompropane dehydrogenation and promoting itshigh-value utilization.

Comprehensive Hydrogen Utilization for Cleaner andLower-Carbon Electronic-Grade Hydrogen Peroxide

E?cient Energy Utilization

GovernanceSTL strictly complies with national energy regulations, including theLaw of the People's Republic of China on EnergyConservation, the Electric Power Law of the People's Republic of China, and theManagement Measures for EnergyStandardization, continuously improving its energy management system to enhance energy efficiency. The Company hasformulated a corporate-levelEnergy Management System, with each base and business unit tailoring and updating energymanagement procedures including measurement & statistics, conservation retro?ts, consumption quotas, and improvementinitiatives based on their speci?c energy usage conditions.Energy management is fully integrated into STL's ESG framework, with General Managers of each base and business unitresponsible for energy strategy formulation, target setting, and usage supervision, while production technology teams overseeenergy-saving projects, energy measurement, and equipment e?ciency monitoring. The Company conducts energy auditsat least every five years, comprehensively reviewing energy usage and management processes across metrics includingenergy measurement, statistics, and quota assessment management, identifying potential energy-saving opportunities, andimplementing targeted improvement measures to e?ectively enhance energy utilization e?ciency.

Management CapabilityImprovementTo ensure the Company e?ectively respondsto energy-related risks and opportunities,STL continues to strengthen foundationalenergy management measures and enhancethe management capabilities of relevantpersonnel.

STL's Energy Management Measures

Regularly comb throughkey energy-usingequipment, measuringinstruments, and powerconsumption accountsto explore energy-savingpotential and rectifyproblematic points.

Improve productionmanagement, technicalmanagement, energy-saving training, andestablish a soundsystem of rewards andpenalties assessment.Establish an onlineenergy managementsystem to monitorreal-time energyconsumption at each

base and rationallyschedule production andmaintenance plans.

Impact and Risk ManagementSTL's bases and business units actively identify energy-related risks and opportunities and develop corresponding responsemeasures.

Risk/Opportunity TypeMeasures

Risks

Opportunities

Regulatorycompliance risk

? Regularly identify and benchmark against laws and regulations,monitor industry economic trends, and ensure compliant operationsEnergy supply

constraints

? Monitor government policies, adjust production accordingly, anddevelop emergency response plans to mitigate risks of energy supplydisruptions

Energy cost

?uctuations

? Maintain communication with energy suppliers, explore alternativeenergy sources such as renewable energy, and enhance risk resistanceEnergy savings to reduceproduction costsReduced unit energyconsumption to improveproduct competitiveness

? Conduct evaluations and analyses based on energy types, developcorresponding strategies and plans, and identify energy-savingpotential

? Enhance energy management and technological efficiency to

optimize energy usage

Utilizing high-purity hydrogen and oxygen byproducts fromlight hydrocarbon cracking, STL produces hydrogen peroxidewith lower energy consumption and reduced carbon emissionscompared to traditional processes,offering clear energy-saving and emissions-reduction advantages.

Clean Raw Materials

The Company employs an all-acidic fixed-bed process forhydrogen peroxide production, eliminating the need for alkaliand thereby preventing the generation of salt-based impuritiesand wastewater from neutralization reactions, reducingpollutant discharge.

Clean Processes

Electronic-grade hydrogen peroxide decomposes into oxygenand water during circuit board cleaning, making it non-toxic,harmless, and free from residual contaminants that couldpollute water sources,offering superior environmentalbenefitscompared to previous-generation ozone-basedcleaning solutions.

Clean Applications

During the reporting period,STL achieved100%coverage of its operational sites with ISO 50001 energymanagement system certi?cation, GB/T 23331 and RB/T 114 energy management system certi?cation.KeyPerformanceIndicators

CNAS C015-MMANAGEMENT SYSTEM

CNAS C015-MMANAGEMENT SYSTEMGB/T23331

CNAS C015-MMANAGEMENT SYSTEM

CNAS C015-MMANAGEMENT SYSTEM

GB/T23331

Case

Case

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Dual Carbon Goals for Green DevelopmentSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

During the reporting period

Driving Energy Conservation and Emission Reduction

Strategies

Each year, STL's bases and business units develop energy e?ciency improvement plans based on their energy consumptionconditions. They establish annual energy management targets, including total energy consumption, unit energy consumptionper product, and energy-saving goals. The Company regularly tracks and assesses progress to ensure orderly achievement oftargets.

STL focuses on the e?cient use of energy across all stages of production and operations, implementing energy-saving andcarbon reduction strategies from the design and construction phases to production, recycling, and reuse. The Companycontinuously increases the proportion of renewable energy usage and innovates in carbon capture and utilization technologiesto drive its low-carbon development.

Design Phase

STL's 2024 energy conservation measures

Construction PhaseProduction PhaseUtilize low-carbon lighthydrocarbons as raw materialsfor chemical production.

Procure low-energy consumption

and low-carbon equipment and

building materials to achieve

carbon reduction goals.

Enhance energy-saving andcarbon-reduction levelsthrough process innovationand equipment upgrades.

Conducted five key energy-savingand emission reduction projects. Byoptimizing the acrylic acid productionprocess, increased surplus steamoutput by 50,000 tonnes, equivalentto saving 4,761 tonnes of standard coaland reducing CO

emissions by 15,350tonnes

Implemented measures such asoptimizing production schedules,upgrading the circulating watersystem, minimizing energy lossesdue to equipment failures, optimizingpower distribution, and modifyingthe heat-tracing water system. Thesee?orts led to a 3.38% reduction in unitproduct energy consumptionPinghu Base

STLTechnology

Implemented eight energy efficiencyimprovement projects, including wasteheat recovery at the air compressionstation, nitrogen system processoptimization, and boiler feed pumpoptimization. Introduction of newenergy-saving equipment, resulting ina 10% year-on-year reduction in energyconsumption

Implemented a heat pump waste heatrecovery project for steam generation.Estimated annual operation of 8,000hours could recover 21,360 MW ofwaste heat, equivalent to saving 2,624tonnes of standard coal and reducingCO

emissions by approximately 6,927tonnes per yearJiaxing Base

Lianyungang

Base

Clean Energy Utilization

STL is committed to optimizing its energy consumptionstructure and continuously exploring opportunitiesto expand renewable energy use. Through distributedphotovoltaic (PV) installations and green electricityprocurement, the Company steadily increases itsrenewable energy ratio.The Company has also implemented a biogas recoveryproject at the anaerobic section of wastewatertreatment plants, delivering 4.92 million cubic metersof captured biogas to boiler systems as clean energy.This initiative e?ectively enhances resource utilizationefficiency while reducing reliance on external energysources.

Through a three-year collaboration with process design institutes and patent holders, STL successfully developed thelargest "Ethylene Cold Box" in China. This technology recovers and stores energy generated during the conversion oflow-temperature ethane to ambient-temperature ethane, forming a globally advanced "low-temperature cold energy"recovery system. Thanks to this innovation, STL's Lianyungang Base saves over 300,000 tonnes of standard coalannually, signi?cantly reducing energy consumption and carbon emissions.

Development of "Ethylene Cold Box" for Energy Recovery and UtilizationCase

Carbon Capture and UtilizationSTL is actively advancing the development of a resource recycling industry, pioneering the construction of a "zero-carbon" newenergy and new materials industry chain. Through carbon capture, utilization, and storage (CCUS) technology, the Companysimulates photosynthesis to capture and recover CO

emitted from its facilities. This CO

is then used to produce carbonates,a crucial raw material for lithium battery electrolytes, effectively transforming carbon into value. With a CO

recovery andconversion rate nearing 100%, STL is innovating a green industrial pathway to achieve carbon neutrality.

In 2024, the Ministry of Industry and InformationTechnology (MIIT) announced the list of 2023 EnergyE?ciency Leaders. STL's wholly-owned subsidiary,Lianyungang Petrochemical, topped the EnergyE?ciency Leaders list in ethylene and ethylene glycol,with unit energy consumption approximately60% of the national benchmark.

STL invested over RMB

million in energye?ciency improvements,achieving electricity savingsof750,000kWh.KeyPerformance

IndicatorsHonorsandAwards

KeyPerformance

Indicators

Purchased a total of765,024MWhof new energy electricity, accounting for13%

of total purchased electricityGenerated 1,772,906kWh from rooftopphotovoltaic power stations

Currently, STL has commissioned a CO

purification unit atits Lianyungang Base, with an annual CO

capture capacity of300,000 tonnes. Additionally, STL has integrated a food-gradeCO

production unit at its Lianyungang Base, further recyclingby-product CO

while reducing greenhouse gas emissions.STL had captured and utilized a total of4,200tonnes of CO

.

KeyPerformanceIndicators

As of the end of the reporting period

During the reporting period

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Dual Carbon Goals for Green DevelopmentSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Metrics and Targets

STL's energy consumption overview

Low-Carbon O?ce and Operations

Promoting Green OperationsSTL integrates green and low-carbon concepts into daily o?ce operations by continuously implementing various greeno?ce measures, encouraging employees to adopt resource-e?cient and low-carbon working practices.

Energy conservation and e?ciencyResource conservationStrictly enforcing air conditioning temperaturestandards: no lower than 26°C in summer and no higherthan 18°C in winter

Promoting double-sided printing and recyclingreusable paperReduce total energy consumption by

3%in 2024Actual reduction:

3.38%

Reduce energy consumption per unit of product by

1.2%

in 2024Actual reduction:

2.5%

IndicatorsUnit202420232022

Direct Energy ConsumptionGasolineliter598,995.39 546,684.92 454,166.89Dieselliter297,574.26 283,915.29 315,887.76Natural gascubic meter277,614,769.39 279,519,427.80 143,216,462.10Ethanetonne63,151.18 38,684.77 94,656.25

Indirect Energy Consumption

Purchased electricityMWh5,276,353.195,046,442.254,136,774.79Purchased steamGJ13,559,044.6613,299,954.164,637,155.50

Clean Energy ConsumptionPurchased renewable electricityMWh765,023.99 517,585.28469,828.48Installed solar capacityMW

1.61.61.6Solar power generationMWh1,772.911,887.40104.64Other clean energy utilizationMWh40,00000

To enhance employees' awareness and capability in environmental protection and energy conservation, STL organizes relevanttraining programs annually, promoting environmental and energy management policies and concepts. In 2024, the Companyconducted training sessions on international standards such as ISO 14064, ISO 14067, and ISO 14068 to systematically improveemployees' expertise in greenhouse gas accounting, veri?cation, and emission reduction. Additionally, STL's Lianyungang Baseprovided specialized training onFundamentals of Energy Managementfor engineers and hosted low-carbon awareness training forall employees, signi?cantly enhancing energy conservation knowledge and skills through a combination of theory and practice.

STL's green o?ce initiatives

Fully adopting energy-saving lighting to reduce energyconsumptionUpgrading non-explosion-proof area streetlights incertain production bases to solar-powered streetlightsEnhancing electricity management policies, includingregulating lighting, air conditioning, and equipmentoperation times

Encouraging paperless operations through OA approvalsystems and Outlook emailsIncreasing the reuse of office supplies such as paperclips, binder clips, staplers, scissors, and glue sticks toeliminate wasteAdvocating department-wide sharing of resources suchas drinking water and printers to minimize redundancy

Building a Green Value Chain

STL actively explores the use of clean raw materials for chemical production, innovating through its "light hydrocarbonintegration" platform to drive green and low-carbon transformation from the source.StrategyMeasuresAdvantagesAchievementsLow-carbonraw materialutilization

Using clean rawmaterials such asethane and pro-pane to replacetraditional feed-stocks like naph-tha and coal

Ethane crackingemits only 1/10 ofthe carbon emis-sions compared tocoal-based olefinroutes per tonne ofethylene produced

STL's two ethane cracking units (1.25 million tonnes/yeareach) reduce approximately 22.8 million tonnes of CO

emissions annually, while its two propane dehydrogenation(PDH) units (450,000 tonnes/year each) cut CO

emissions by

7.7 million tonnes annually, totaling over 30 million tonnes

of CO

reductions per year

Low-carbonraw materialmanufacturing

Utilizing high-pu-rity hydrogenproduced as abyproduct fromlight hydrocarboncracking

Hydrogen produc-tion via this methodemits only 5% ofthe carbon emis-sions of natural gas-based hydrogenproduction and

2.6% of coal-based

hydrogen produc-tion

The Company currently has an annual hydrogen productioncapacity of approximately 163,600 tonnes. In the future, itshydrogen capacity will reach 400,000 tonnes/year, making itthe largest "green hydrogen" supplier in chemical industryclusters

Logistics and transportation are also key elements of STL's green value chain. The Company actively collaborates with partnersto explore green management practices in logistics and warehousing, reducing resource consumption and carbon emissions.In 2024, STL continued implementing its shared pallet program, achieving a cumulative total of 87,892 pallet cycles.

Energy Management Targets2024 ProgressSTL's 2024 energy use KPIs and targets were accomplished as follows:

In 2025, the company plans to promote a number of energy-saving renovation projects, covering production process optimization,energy recycling, equipment energy e?ciency improvement and other aspects, and is expected to save about 100,000 tonnes ofsteam and about 5 million kilowatt-hours of electricity, reducing energy costs.

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Addressing Climate ChangeGovernance

Strategy

Climate Risks and Opportunities

STL places great emphasis on climate-related risks and opportunities. The Company integrates climate change matters intoits ESG management system, with the Board overseeing and making decisions on the development of climate change-relatedstrategies and targets. The Strategy and ESG Committee is responsible for identifying, evaluating, and managing climate-related risks and guiding the formulation of strategies and management policies to address climate change, while overseeingthe identification of climate-related risks and opportunities. Each base and business unit is responsible for executing andimplementing speci?c action plans.The Company regularly organizes climate and carbon-related training to enhance the professional capabilities of employees inrelevant positions, ensuring they are equipped to participate in the formulation and implementation of the Company's climate-related strategies. In 2024, the Company provided specialized training to relevant departments, covering carbon inventory,carbon systems, carbon footprints, and more.

STL fully identifies the potential impacts of climate change on its production operations, as well as the new opportunitiesfor technological innovation and green transformation that it presents. The Company references various climate changescenarios and, considering its operational characteristics, has identi?ed potential physical risks, transition risks, and transitionopportunities, and formulated targeted response strategies to enhance the Company's climate resilience. At the same time,STL has incorporated climate risks into its overall risk management system, integrating climate change risks deeply withthe Company's overall risk management process. The Company actively evaluates, manages, and tracks climate-relatedperformance indicators to quantify risks and e?ectively drive risk control.To promote the Company's green transformation and achieve scienti?c, systematic carbon management, STL actively conductsproduct carbon footprint assessments and has established a carbon emission management platform. During the reportingperiod, the Company completed carbon footprint certi?cation for ?ve products: acrylic acid, re?ned acrylic acid, butyl acrylate,isooctyl acrylate, and ethyl acrylate, and launched the carbon emission management platform.

STL conducts scenario analysis based on the Intergovernmental Panel on Climate Change (IPCC) Representative ConcentrationPathways (RCPs) SSP5-8.5 (high carbon scenario). The Company comprehensively identifies potential physical risks in theshort-term (by 2030), medium-term (by 2050), and long-term (by 2080) as shown in the table below:

In response to the national carbon peak and carbon neutrality strategy, STL successfully built a carbon emissionmanagement platform in November 2024. The platform was developed in strict accordance with the ISO 14064-1 standard and includes four core functional modules: activity data entry, parameter settings, data analysis, andreport generation. It e?ciently supports the accurate accounting and trend analysis of Scope 1, 2, and 3 emissions.The platform also visualizes key data such as carbon emissions, intensity, and structural proportions, providinginformational support for the Company's "dual carbon" management decisions.

Establishing a Carbon Emission Management Platform to Support the Achievement of "Dual Carbon" GoalsCase

Training Topic

ISO 14064-1:2018 system implementation and carbon inventory training

ISO 14067 product carbon footprint training

Carbon Management System Requirements and GuidelinesTCIECCPA002-2021 training

Participants

CategoryRiskDescriptionResponseSeverityImpact Period

Acute risks

Extremeprecipitation

Intense rainfall may leadto flooding, equipmentfailure, plant water accu-mulation, transportationdisruption, productioninterruption, and safetyincidents, resulting inreduced capacity andincreased operationalcosts.

? Develop emergency plans for pro-duction safety accidents, ?res, andenvironmental incidents caused byextreme weather; conduct regulardrills? Pre-prepare emergency supplies,

optimize basic infrastructure suchas water systems at productionbases? Regularly inspect and maintainequipment and facilities? Implement emergency logisticsmeasures to improve logisticstimeliness under extreme weather

? Guide employees to respond toextreme weather and minimizeimpacts on assets and personnelsafety? Conduct climate forecasting andreporting, adjust o?ine operationsand employee commuting policies,and implement emergency logis-tics measures based on weatherchanges

Medium

Short-term, medium-term, long-term

Extreme heat

High temperatures mayincrease energy costs, ?rerisks, and reduce workefficiency, resulting inhigher operational costs

Medium

Short-term, medium-term, long-term

Tropical

cyclones

Strong winds and heavyrain from cyclones maycause equipment failure,infrastructure damage,transportation disruption,and safety incidents, lead-ing to reduced capacityand increased operationalcosts

HighMedium-term

Chronic risks

Water shortage

Water scarcity may affectproduction stability, lead-ing to reduced capacityand higher operationalcosts

? Continuously optimize production

processes, actively use water recy-cling technology, and improve watere?ciency

MediumMedium-term, long-term

Sea level rise

Affects the safety andstability of coastal pro-duction bases, potential-ly leading to productionstoppage, relocation,and property loss

? Continuously monitor climateinformation, optimize the layout ofproduction bases and warehousesbased on sea level rise trends? Strengthen ?ood prevention anddisaster resistance capabilities ofinfrastructure

Low tomedium

Long-term

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CategoryRiskDescriptionResponse

Transition

risks

Policy andlegal risks

Carbon tax/ pricing

China's national carbon emissions tradingmarket has been launched, with the carbon quo-ta system being strictly enforced. Key carbon-in-tensive industries, such as petrochemicals, maybe mandatorily included, which means that thecarbon emissions compliance pressure on theCompany will rise sharply. To meet the new emis-sion standards, the Company may need to makelarge-scale investments in emission reductiontechnologies, purchase huge amounts of carbonallowances, and may even face di?culties suchas production restrictions. This shift will greatlyincrease the cost of our carbon emissions com-pliance and may also have far-reaching impactson our strategic planning, operation mode andmarket competitiveness.

We launch energy saving and emis-sion reduction initiatives across theboard, and are committed to signif-icantly reducing our Scope 1, Scope2, and Scope 3 emissions.

Requirements andregulation imposed onexisting products andservices

Against the backdrop of the "dual carbon" goals,the government is considering the introductionof more rigorous laws and regulations to limit oreven reduce companies' carbon emissions. Thisinitiative poses compliance risks for carbon-in-tensive and energy-intensive industries, leadingto investment in energy-saving and emissionreduction technological transformations. Thiswill signi?cantly increase our operational com-pliance costs.

Relying on our integrated light hy-drocarbon industry platform, wehave established a "4R" green andlow-carbon industrial model thatspans the entire industrial chain,and are committed to promoting thegreen and low-carbon developmentof the ole?n industry.

Market risks

Changes in customerbehavior

As society focuses more on climate changeand sustainable development, a growingnumber of consumers show a preference forgreen and low-carbon products and servic-es, making it imperative for the Company toincrease its investment in the research, devel-opment and application of green and low-car-bon technologies.

Leveraging the low-carbon industri-al model, we insist on promoting theR&D and production of low-carbonproducts and transferring low-car-bon attributes to customers andend-use scenarios in the value chain.

Growing raw materialcost

Climate change may restrict production fromraw material suppliers, leading to shortages.Additionally, the global energy transition maydrive up the prices of energy and water, rais-ing raw material costs and production costs.

Monitor raw material market pricefluctuations, establish early stock-piles, innovate technologies, seek al-ternative materials and energy, andbuild a diversi?ed supply network toensure supply chain stability.

Technologyrisks

Costs resulting fromtransition towards low-carbon technologies

To adapt to the transition towards low-carboneconomy, the Company need to continuouslyramp up its research and development e?ortsand investment in key areas such as renew-able energy, energy-saving and emissionreduction technologies, which means highertechnological research and developmentcosts.

We have established a sound mech-anism for the application of low-car-bon technologies and assessed suchtechnologies through feasibilitystudies and cost analysis to reducethe transition costs.

Reputationrisks

Growing stakeholder concerns andnegative feedback

Stakeholders increasingly focus on the Com-pany's actions to address climate change,making it imperative for us to take relevantinitiatives, otherwise our reputation will bea?ected.

We regularly summarize the requestsand inquiries from various stake-holders and actively address theirconcerns through channels such asour o?cial website, announcements,visits and research.

At the same time, the Company identi?es potential transition risks and opportunities from policy, market, technology, andreputation perspectives, and formulates corresponding strategies.

Metrics and TargetsSTL has established ambitious carbon reduction targets based on its production and operational situation and conducts annualgreenhouse gas inventory assessments to monitor and quantify progress toward these targets.

STL greenhouse gas emission

IndicatorUnit2024

2023

2022Direct emissions (Scope 1)Tonnes of CO

equivalent1,664,4271,432,4102,211,164Indirect emissions (Scope 2)Tonnes of CO

equivalent4,521,1544,420,7671,606,223Total greenhouse gas emissionsTonnes of CO

equivalent6,185,5815,853,1773,817,387Greenhouse gas emissionintensity

Tonnes of CO

equivalent/tonne of product

0.5020.6270.624

Carbon Reduction TargetReduce cumulative CO

emissionsby over 2 million tonnes by 2030(with 2020 as the baseline year)Achieve carbon neutrality in thevalue chain by 2050

2024 Progress

Reduced CO

emissions by

1,014,581

tonnes (with 2020 as thebaseline year)Continuously implement

key strategic plans, including clean energyusage, low-carbon technology innovation, production equipmentand process optimization, and decarbonizing supply chains, asdetailed in the "Focusing on Low-Carbon Strategies" section.

The scope of the 2024 STL greenhouse gas emissions data reporting includes both Scope 1 and Scope 2 emissions. The Company conducts itsaccounting in accordance with the requirements outlined in theGreenhouse Gas Emission Accounting Methods and Reporting Guidelines forChinese Chemical Production Enterprises (Trial), with emission factors referenced from the data provided in the aforementioned Guide.

2023 emission data was updated with veri?cation.

CategoryRiskDescriptionResponse

Transition

opportunities

Policyopportunities

Policy incentives

To promote green and low-carbon develop-ment, the government has introduced policiesproviding ?nancial subsidies, tax reductions,low-interest loans, and other incentives toencourage corporate green transformation.

We closely monitor the government'srelevant policies and actively re-spond to and participate in incentiveor subsidy programs. For example,the2025 Tariff Adjustment Plan

issued by the State Council in 2024has reduced production costs for theCompany by supporting the contin-ued implementation of the low-car-bon ethylene production process viaethane cracking.Technologyopportunities

Low-carbontechnologicalinnovation

Implementing low-carbon production willdrive the development of industrial ener-gy-saving technologies and energy-efficientequipment manufacturing, creating oppor-tunities for the Company to improve energye?ciency and reduce energy usage costs.

We proactively identify energy-sav-ing potential and continuously re-duce product energy consumptionand usage costs through technologi-cal innovation, process optimization,the application of energy-savingequipment and technologies, andcarbon capture.Marketopportunities

Market preferences

The development of green finance and sus-tainable investment provides new financingchannels for the Company's green projects. Atthe same time, the growing market demandfor green and low-carbon products will con-tribute to increased revenue from the Compa-ny's green materials segment.

We continue to innovate in thefields of new energy materials andcomprehensive utilization of carbondioxide, while also resourcefullyutilizing hydrogen as a byproduct,building a green and low-carbon "in-dustrial chain."

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Strengthening EnvironmentalManagement

Impact and Risk Management

Governance

STL strictly adheres to theEnvironmental Protection Law of the People's Republic of China, theLaw of the People's Republicof China on Environmental Impact Assessment, theLaw of the People's Republic of China on the Prevention and Control ofAtmospheric Pollution, theLaw of the People's Republic of China on the Prevention and

Control of Water Pollution, theLawof the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Wastes, theLaw of thePeople's Republic of China on Prevention and Control of Soil Pollution, and other related laws and regulations. The Companyalso complies with industry standards, such as theEmission Standard of Pollutants for Petroleum Chemistry IndustryandtheEmission Standard

of Pollutants for Synthetic Resin Industry. Additionally, the Company implements the policies and standardsset by the local authorities, including theUltra-low Emission Transformation (In-depth Treatment) Work Plan for Key Industriesand Facilities in Lianyungang City, theNotice on Leakage Detection and Repair (LDAR),theEmission Standards for Major WaterPollutants in the Chemical Industry,theEmission Standards for Volatile Organic Compounds in the Chemical Industry inJiangsu Province, and other control requirements that are much more demanding than national standards.

STL strictly implements the three-step process for environmental protection, which requires environmental impact assessmentsand environmental acceptance inspections for new, modified, or expanded projects. This ensures that environmental risks areeffectively controlled from the design and construction stages. Additionally, the Company reduces environmental risks duringproduction operations through measures such as environmental risk identi?cation, pollutant control, environmental monitoringaudits, and environmental emergency management.

STL continually improves its environmental management system by establishing various institutional documents such as theEnvironmental Protection Responsibility System, theSafety and

Environmental Protection Facilities Management System, theManagement Requirements for Environmental Factor Identi?cation, Evaluation and Control Procedure, and theManagementRequirements for Environmental Hazards. The Company also enforces detailed implementation rules for the prevention andcontrol of air, water, solid waste, soil, and noise pollution.The Company closely monitors the release and updates of environmental laws and standards. During the reporting period, theCompany identi?ed new environmental policies, such as the modi?cation of theEmission Standard of Pollutants for PetroleumChemistry Industry(GB31571-2015), theEmission Standard of Pollutants for Synthetic Resin Industry(GB31572-2015), and theRegulation on the Administration of Permitting of Pollutant Discharges. The Company promptly organized analysis and studysessions on these new regulations at its bases and business units to ensure compliance with environmental management andpollutant discharge standards.To ensure the proper functioning of the Company's environmental management system, an environmental managementstructure was established, led by the Company's Strategy and ESG Committee. The Safety and Environmental Committeeoversees all environmental management tasks and conducts inspections and evaluations of each base and business unit inaccordance with theManagement Measures for Safety and Environmental Performance Assessment. The primary managersof each base and business unit are designated as the primary responsible persons for environmental protection and arefully accountable for the environmental protection work in their respective units. Additionally, dedicated environmentalmanagement departments are established to supervise, inspect, evaluate, and serve in relation to environmental protection inthe production areas.The Company continues to strengthen the environmental management responsibilities at all levels of the Company,incorporating 21 performance indicators into annual evaluations, including total water usage, pollutant discharge volumes,and waste disposal compliance rates. Responsibilities cascade from executive directors to frontline team employees throughsigning environmental protection responsibility letters and KPIs. This approach helps solidify environmental protectionaccountability and improves the management of production, pollutant discharge, environmental hazard identification andrecti?cation, and emergency management.

Environmental Management System

During the reporting period, Jiahong New Material conducted a cleanproduction audit and actively implemented clean production plans. Outof 14 proposed measures, 13 have been implemented. By strengtheningmanagement and technological advancements, the Company achievede?ective resource conservation, pollutant reduction, and cost reduction, allwhile mitigating environmental risks.

Clean Production Audit to Promote ComprehensiveImprovements in Production and Environmental Management

Management

Measures

FrequencySpeci?c ContentCoverageEnvironmentalriskidenti?cation

Annually

? Conducting annual environmental factor identification and recording in the

information management system

Allbusinessareas

Pollutantcontrol

Daily

? Tracing pollution sources: in-depth inspection and recti?cation of VOCs and odor

sources, conducting LDAR tests? Standardizing pollution discharge and monitoring: implementing requirementsin the pollution discharge permit and monthly third-party monitoring of pollutiondata? Pollutant online monitoring: using environmental monitoring platforms and MESsystems to monitor the operation of environmental protection facilities and ensurenormal, stable operation and compliance with discharge standards

Environmentalsupervision andaudits

Annually

? Conducting internal audits and external reviews for all business units andcomprehensive external audits for certi?cation changes every three years

Weekly

? Conducting weekly environmental risk checks and rectifying identi?ed environmentalhazards in a timely mannerEnvironmentalemergencymanagement

As needed

? Developing emergency response plans for environmental incidents, categorizingpotential events, and updating plans as necessary based on operational and externalfactors

? Responding to regional heavy pollution weather policies and developing site-speci?c strategies

? Regularly conducting emergency drills as per the emergency response plan

Environmental Capacity BuildingSTL regularly conducts environmental protection training, inviting professional instructors to provide in-depth explanationsof environmental laws and regulations and promoting Company environmental protection policies. This training enhancesemployees' understanding and capabilities in pollutant discharge management, emergency management, and self-monitoring.The Company also actively organizes environmental protection training and publicity activities for all employees, fostering acorporate culture where environmental protection is embraced by everyone.

Case

the Company carried outseveral environmental auditscovering100%of itsoperational areas, with allidenti?ed environmentalhazards being recti?ed.

During the reporting period

KeyPerformance Indicators

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Dual Carbon Goals for Green DevelopmentSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Metrics and TargetsThe Company achieved the following key environmental performance indicators for 2024:

Key Performance Indicators：

On June 5, 2024, World Environment Day, the Jiaxing basehosted the "I Participate in Zero Waste" event. Over 400employees received promotional materials and learned aboutthe significance of building a zero-waste city, solid wasteregulations, and more. The event encouraged employees toengage in waste reduction activities. Furthermore, Jiaxingbase distributed 100 eco-friendly bags to staff, guidingthem to reduce single-use plastic and actively participatein the "Zero Waste City" initiative, promoting a waste-freephilosophy.

Organizing the "6?5 World Environment Day" Event toEncourage Employees' Participation in "Zero WasteCity" Initiatives

IndicatorsUnit202420232022ISO 14001 Certi?cation%100100100Total investment in environmentaltreatment

RMB million130,957170,465142,857Time invested in environmentaltreatment

hour61,32074,40062,130Environmental protection traininghours

hour2,5446,5044,821Number of environmental protectiontraining sessions

section3564991,826Number of environmental protectiontraining participants

person-time17,79245,54831,255Environmental punishmentaccidents

time

Environmental punishmentpayments

RMB

Environmental Management Targets0 Environmental incidentsTotal pollutant discharge within approved limits0 non-normal operation of environmental facilities100% environmental monitoring compliance100% hazardous waste disposal compliance rate

AchievementAchievedAchievedAchievedAchievedAchieved

Enhanced handling

Compliance emissionsCategorized collection

Adhering to the "zero and direct discharge of sewage" goal, STL continues to enhance its risk prevention and control measuresagainst water pollution, and strictly manage the entire wastewater production process, including generation, collection, reuse,and discharge, thus optimizing processes to reduce pollutant concentrations. Wastewater pollutants are closely monitoredto ensure compliance with discharge standards and to e?ectively control water body risks. Each of the Company's bases andbusiness units implements a rainwater and wastewater diversion system, equipped with wastewater treatment facilities andreclaimed water systems, to treat various wastewater types, including oil-containing wastewater, process wastewater, salinewastewater, clean wastewater, initial rainwater, washing water, and domestic wastewater. This reduces wastewater generationand discharge volumes.

Wastewater Discharge Management

STL's Comprehensive Wastewater Management Measures

Real-time monitoring ofwater pollutant dischargesthrough environmental on-line monitoring facilities toensure real-time monitor-ing of water quality data.Optimize the productionprocess, strengthen pro-cess control, reduce theamount of wastewatergenerated.

Adoption of "Combined+ Blending + Anaerobic +Aerobic" biological treat-ment process for target-ed treatment of acrylicacid wastewater.Wastewater is treatedthrough the device andreused after treatmentto reduce the amount ofwastewater.

Developed an acrylic acid refining process that does not use an azeotrope agent throughout the entireprocess compared to traditional methods. This reduces the average wastewater generated per tonne ofacrylic acid produced by 60%.2024 Wastewater Management MeasuresCase

Enhanced monitoring of the rainwater discharge system, quickly identifying and alerting high COD datafrom laboratory analyses. Root cause investigations were promptly initiated to accurately pinpoint leakageand problem sources, ensuring compliant rainwater discharge.

Pinghu

BaseJiaxing

Base

Developed a self-made homogeneous catalyst for vinyl carbonate, surpassing commercial catalysts inperformance. The catalyst achieves 99.6% conversion rate and selectivity under a low water ratio of 1.2:1.Based on this, the SEGMA process was developed to reduce wastewater generation.

STL Technology

Built a recycled water facility and implemented internal treatment and reuse of production wastewater,with a wastewater reuse rate exceeding 90%. In 2024, the wastewater discharge volume was reduced byapproximately 40,000 m?.Lianyungang

Base

Source control

In accordance with theprinciple of "rainwater andsewage diversion", collectwastewater in a catego-rized manner, includingenterprise productionwastewater, clean waste-water, rainwater, etc.Effectively collected andincorporated into a sew-age station for centralizedtreatment.

Enhance the sewagetreatment capacity andclosely monitor the waterquality indicators suchas chemical oxygen de-mand, ammonia nitrogenand total nitrogen of thetreated wastewater toensure that the dischargestandards are met

Case

Honors

andAwards

STL, Lianyungang Petrochemical, andPinghu Petro Chemical received thetitle of National Green Factory, whileYoulian Chemistry earned the title ofMunicipal Green Factory.Lianyungang Petrochemicaland Jiahong New Material wereawarded the title of "DemonstrativeEnterprises on EnvironmentalProtection in Lianyungang City."

During the reporting period

?

? ?

?

?

??

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Metrics and TargetsSTL is committed to continuously reducing the total volume of wastewater and the intensity of wastewater pollutant emissions.The following goals have been set and are continuously monitored:

STL's wastewater discharge

IndicatorsTargetAchievement

IndicatorsUnit202420232022Total industrial wastewater dischargetonne13,116,771.1814,627,048.1210,713,674.84Chemical oxygen demand (COD)tonne2,765.372,355.961,523.13Ammoniacal Nitrogen (NH

-N)tonne

31.5226.856.70Total oOrganic carbon (TOC)tonne

198.29103.4092.59COD emission intensity

tonne/10,000tonne products

2.2452.0772.016NH

-N emission intensity

tonne/10,000tonne products

0.0260.0240.009TOC emission intensity

tonne/10,000tonne products

0.1610.0960.123

Wastewater pollutantemission intensity(including COD andammonia nitrogen)

Reduced by over 15%by 2027, with 2024 asthe baseline year

In progress

3-5The Company is actively promoting the construction and optimization of relevant supporting wastewater treatment facilities in order to reduce theimpact on the environment and to achieve coordination between business development and environmental protection.

Exhaust Gas Emission ManagementSTL is dedicated to reducing air emissions during production and operations. The Company continuously optimizes airtreatment processes and installs high-e?ciency air treatment equipment to e?ectively treat pollutants such as Volatile OrganicCompounds (VOCs), Sulfur Dioxide (SO

), Nitrogen Oxides (NO

x), and particulate matter. Additionally, STL ensures the stableoperation of air treatment facilities and compliance with emission standards through online monitoring and monthly third-party testing.

STL's Main Exhaust Gas Treatment Initiatives

Water-based product?lling exhaust

? Adopt "water spraying + honeycomb carbon adsorption" forcollection and treatment

Workspace exhaust from fatwashing and baling jobs

? Collection and treatment by honeycomb carbon adsorption device

Cracker ?ue gas? Treatment with SCR denitri?cation and trap dust removal

Workspace exhaust from thedrum washing room

? Water spraying is used to meet the emission standards

Exhaust gas fromwaste liquid incineration

? Adopt "SNCR denitri?cation + waste heat recovery + cyclone dustremoval + compound acute cooling absorption + electrostatic dustremoval" treatment process for treatment

Organic storage tank exhaustand process exhaust

? Adoption of RTO furnace, CO furnace incineration treatment,condensation recovery + activated carbon adsorption

Wastewater treatment stationodor exhaust

? Adopt "bio?lter + acid spray + alkali spray + activated carbon

adsorption (emergency)" for treatment

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Metrics and Targets

STL is focused on continually reducing the intensity of air pollutant emissions. The following air pollutants are monitored andtargeted for reduction:

STL 2024 Air Emission Management MeasuresCase

IndicatorsTargetAchievement

100% compliance rateParticulate matterconcentration

Achieved, monthly testsmeet standards

100% compliance rateVOCs

concentration

Achieved, monthly testsmeet standards

Launched a green energy-saving retrofit project, conducting optimization, upgrade, and modificationof acrylic acid production lines. New green chemical agents replaced traditional azeotropic solvents,e?ectively reducing process-related air emissions.PinghuBaseSource Reduction

Installed low-nitrogen combustion + SCR de-NOxtechnology in the cracking furnace and startup boilerunits, using imported catalysts. This reduced NOxemissions in ?ue gas to <40 mg/Nm? (national standard:

100 mg/Nm?), meeting petrochemical pollutant emission standards and ultra-low emission concentrationrequirements.PinghuBase

Upgraded the process gas treatment system in the multi-alcohol plant, replacing the catalytic incinerationsystem with a superheated furnace incineration system. This boosted VOCs removal e?ciency from 97% toover 99.99%.

Process Optimization

Conducted an in-depth investigation and remediation of VOCs and odor sources. Regular inspections werecarried out on VOCs emissions from exhaust outlets and "leakage, seepage or dropping," and catalyticcombustion units and aerobic tank covers were upgraded to ensure high VOC treatment e?ciency and odorreduction.JiaxingBaseLianyungang

Base

Equipped all hazardous waste warehouses with secondary activated carbon adsorption units for collectingand treating non-point source emissions from hazardous waste and installed online monitoring systems atexit points.

Monitoring Improvements

LianyungangBase

Reduce by 13% by

2027, with 2024 as

the baseline yearAir pollutant emissionintensity (including VOCs,NOX, and SO

)

In progess

STL's exhaust gas emission performance overview

IndicatorsUnit202420232022Total exhaust gas emissionsm?34,746,113,76415,006,541,886 /Emissions of volatile organic compounds (VOCs)tonne

310.38 278.85 190.47Emissions of nitrogen oxides (NO

x

)tonne

758.17 312.71 576.86Emissions of sulfur dioxide (SO

)tonne

81.92 42.07 72.55Emissions of particulate matter (PM)tonne

53.06

38.21 49.13

VOCs emission intensity

tonne/10,000tonne products

0.2520.2570.256NOX emission intensity

tonne/10,000tonne products

0.6160.5540.776SO

emission intensity

tonne/10,000tonne products

0.0670.1060.098PM emission intensity

tonne/10,000tonne products

0.0430.0540.066

Solid Waste Discharge ManagementSTL adheres to the principles of "reduction, resource utilization, and harmlessness" and has established a comprehensive solidwaste classi?cation management system. The Company strictly controls the entire process of waste generation, collection,storage, transportation, and disposal to ensure that all types of waste are properly handled. STL has set up a solid wastesupervision platform, using information technology for real-time monitoring of hazardous waste. In addition, regular on-siteaudits are conducted for hazardous waste disposal units to ensure they are quali?ed and comply with regulations.

STL's full-process solid waste management measuresMeasureGeneral solid wasteHazardous wasteMain sources

Domestic waste, general packaging materials, industrial solidwaste

Discarded hazardous chemicals and packagingStorage

Set up special warehouses to collect solid waste, and conductanti-corrosion and anti-permeation treatment on thewarehouse ?oor to prevent waste leaks from contaminating soiland groundwater

Set up temporary storage warehouses for hazardous

waste to ensure that the hazardous waste is collected

by type and source according to the requirements of

hazardous waste managementTransportation

Uniformly arrange special vehicles to transport waste to land?llsor hand it over to quali?ed entities for disposal on a regular basis

Contact quali?ed professional waste disposal entities

for waste transfer in accordance with relevant national

solid waste transfer regulationsDisposal

Recyclable waste is collected and sold for comprehensiveuse; non-recyclable waste is disposed of by sanitationdepartments or quali?ed units

Entrusted to quali?ed disposal units for safe disposal

and centralized recycling

During the reporting period, a new plant was introduced to produce raw materials that the Company previously had to procure externally, as a keyinitiative for industry chain integration, to improve production e?ciency and product quality and enhance market competitiveness.

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Waste and Recycling

Metrics and Targets

STL continues to promote the reduction and resource utilization of solid waste. The Company has developed annualmanagement plans for hazardous waste, setting clear reduction targets for each year.

STL has continuously monitored harmful and non-harmful waste generated in the production process and set emissionreduction targets:

STL's Solid Waste Reduction and Comprehensive Utilization Measures

Comprehensive UtilizationSource reductionStrict production process control, improve theproduction quali?cation rate, reduce the amount ofwaste generated by substandard products.Filter sludge is dried before leaving the warehouse, andthe waste gas is collected and disposed of in a catalyticcombustion furnace to reduce the weight of the waste.

Waste liquids such as heavy alcohol and styrene tarare incinerated, and the steam generated is used forproduction and operation.

Waste alumina, sludge and other general solid wasteto quali?ed disposal units made of ceramic rawmaterials and construction raw materials.

? The acrylic acid butyl ester unit at the Pinghu base optimized the reorganization and cracking unit to recycle 0.15tonnes per hour of by-products, reducing 1,200 tonnes of waste liquid annually.? The Jiaxing base improved the acrylic acid reorganization cracking process, raising the recovery rate from 32.5% in2023 to 47.54% in 2024, reducing the amount of waste liquid by 11,549 tonnes.

Optimizing Production Units to Reduce Hazardous Waste GenerationCase

Target2024 Achievement

100%

compliance rate for solid waste disposalAchievedContinued reduction of hazardous waste generation

Reduce solid waste generation intensity by over

8%

by 2027 (with2024 as the baseline year)

Reduced by over

12,000

tonnesBy 2030, the Company aims to reduce the external discharge of solidwaste by over

50,000

tonnes through self-recycling capabilities

In 2024, hazardous waste disposalat each production base reached47,800

tonnesIn progress

STL's solid waste emission overview

Soil and Noise Management

Every year, STL prepares an annual environmental monitoring program in accordance with the requirements of the PollutantDischarge Permit and project environmental assessment, and pertinent technical speci?cations such asthe Guidelines on theIdenti?cation of Potential Soil Pollution Hazards in Key Supervision Entities (for Trial Implementation)andthe Technical Guidelinesof Soil and Groundwater Self-monitoring for Industrial Enterprises. We have also hired qualified third-party environmentaltesting companies to keep an eye on the soil and groundwater. During the reporting period, the Jiaxing base organized soil andgroundwater risk investigation work and completed theSoil and Groundwater Risk Investigation and Remediation Reportfor STLand Youlian Chemistry.The main soil and groundwater pollution risks at STL arise from potential chemical and heavy metal leakage during productproduction, transportation, and storage. The Company implements stringent controls to prevent the leakage of pollutants intothe soil and groundwater, ensuring that contamination does not occur. During the reporting period, all STL operational sitesachieved a 100% compliance rate for characteristic pollutants in soil and groundwater.

IndicatorsUnit202420232022Hazardous waste generationtonne125,125.82139,198.8385,672.92Hazardous waste utilizationtonne108,998.82139,198.83/Hazardous waste utilization rate%87100/Non-hazardous waste generationtonne61,105.387,650.108,486.05Non-hazardous waste utilizationtonne61,105.387,650.10/Non-hazardous waste utilization rate%100100/Total solid waste generationtonne186,231.20146,848.9394,158.97Solid waste per unit of product

tonne/10,000 tonneproducts

0.0150.0150.015

Source control

PollutionmonitoringEnd controlEmergencyresponses

?Timely collection of spilled pollutants and compliant disposal.

?Formulate contingency plans for leakage accidents and conduct regular drills to ensure e?ective controland treatment of soil and groundwater contamination in case of emergency.STL's Soil and Groundwater Pollution Prevention and Control Measures

? Improve the regular inspection and overhaul system ofpipelines, pools, tanks, sewage stations, etc., and carry outregular checks on the e?ectiveness of seepage control, so asto avoid soil and groundwater pollution caused by suddenenvironmental accidents.

? Regularly commission quali?edthird parties to carry out soil andgroundwater monitoring.

? Hardening and anti-seepage treatment of the ground in themain production area, as well as in key areas such as storagetanks and hazardous chemical warehouses.

? Strengthening the management of

the storage, use and transportation ofhazardous chemicals to prevent spills.

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?Reasonable layout of high-noiseequipment, away from noise-sensi-tive areas outside the plant.?Optimize equipment selection,avoid the use of high-noise equip-ment, and reduce the noise level ofequipment operation.

?Adoption of measures such as indooracoustic treatment, sound insulation ofdoors and windows, and installation ofacoustic barriers.?Use of green belts to absorb and reflectpart of the noise and reduce noise intensity.?Adopt measures such as vibration reduc-tion of the machine base and installationof sound-absorbing devices for noisyequipments.

?Equip line employees with thenecessary personal protectiveequipment.?Regular health checkups for occu-pational diseases for employees.

STL also monitors noise impact on both internal and external environments. The Company regularly identifies noise sourcesand implements targeted noise control measures. Major noise sources include compressors, blowers, pumps, and constructionactivities.During the reporting period, the Company conducted regular noise monitoring at the plant boundary, and its basesand business units meet the standard limit value of a third-class zone in theEmission Standard for Industrial Enterprises Noiseat Boundary(GB 12348-2008), and the sound environment quality can also meet the requirements of the daytime and night timestandards of a third class zone of theEnvironment Quality Standard for Noise(GB 3096-2008), with no impact on the surroundingenvironment.The Company continues to implement noise control measures across noise sources, transmission paths, and receptors.

SourceControl

RecipientProtection

TransmissionBlockingSTL's Noise Pollution Control Measures

Ecological Co-building

Water Resources ManagementIn water resource management, STL is committed to reducing the impact on local water resources and works closely with communitiesto ensure a stable water supply. The Company enhances water usage e?ciency and management by improving its management system,optimizing structures, implementing water-saving measures, and promoting water resource recycling and reuse.Management System and StructureSTL strictly adheres to theWater Law of the People's Republic of Chinaand other relevant laws and regulations. Based on theselegal requirements and standards, the Company has formulated internal policies such as theWater Quality Management System,the Management Regulations for Water Cooler, theManagement Regulations for Circulating Water, and theWater ConservationImplementation Guidelinesto ensure standardized and regulated water resource management. In terms of management structure,the Company's headquarters, under the leadership of the Chairman, is responsible for water resource management strategiesand performance and the Strategy and ESG Committee oversees water-related metrics, identi?es water risks and opportunities,and drives the formulation of water management strategies and target-setting. Each operational site and business division hasestablished a Water Conservation Management Leadership Team based on actual circumstances, with the General Manager directlyoverseeing water resource decision-making, approval processes, overall water conservation planning, and goal setting to ensurethe e?cient advancement of water-saving initiatives.

Alternative Water SourcesSTL actively promotes the utilization of reclaimed water and rainwater to signi?cantly reduce reliance on fresh water sources. In2024, the Pinghu base purchased over 2 million tonnes of reclaimed water from municipal sources to replace part of its industrialwater consumption, e?ectively reducing overall water usage. The Lianyungang Base achieved a 70% wastewater reuse rate, utilizing

5.145 million tonnes of reclaimed water and 936,000 tonnes of additional recycled water for circulating water replenishment,

thereby realizing the full-cycle utilization of water resources. The Jiaxing base has implemented a rainwater collection systemcapable of harvesting 29,600 tonnes of rainwater annually and has carried out modi?cations to enable reclaimed water reuse incirculating water discharge, recovering 49,700 tonnes of water annually.

Water Risk Assessment and ResponseEach STL base and business division adopts diversified water sourcing methods, including third-party water supply, reclaimedwater reuse, and process condensate utilization. The Company has installed water measurement instruments that meet standardsexceeding national requirements and regularly conducts water risk assessments and water balance tests at all operationallocations. These measures help analyze water usage conditions, detect and repair leaks, and improve water efficiency throughequipment upgrades and technological improvements, ensuring the e?cient conservation and utilization of water resources.STL ensures stable water supply across all bases and business divisions, with no water extraction difficulties encountered.The Pinghu base relies on municipal water supply with norestrictions on total water withdrawal. The LianyungangBase has an annual water usage limit of 23 million tonnesand mitigates unstable water quality issues during high-flowperiods by optimizing circulating water management andstrengthening communication with suppliers. The Jiaxing baseutilizes multiple water sources, including river water, tap water,and steam condensate, ensuring that all water withdrawalsremain within permitted limits.

Post Water Conservation SignsSTL actively fosters a water conservation culture by installingwater-saving signage in o?ce areas and organizing employeetraining/awareness programs, enhancing sta? consciousnessand promoting rational water resource utilization.

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Water Balance Testing and Conservation TargetsSTL conducts regular water balance testing to ensure the e?cient use of water resources. In 2024, the Pinghu base successfullycompleted water balance testing, achieving a 100% functionality rate for water measurement instruments and maintaining aleakage rate below 1.68%. The base also signi?cantly optimized unit water intake and successfully passed Zhejiang Province'swater conservation enterprise review, demonstrating its excellence in water management. The Jiaxing base completedtesting and compiled a report in June 2024, providing critical data for future water conservation strategies. LianyungangPetrochemicals completed testing in 2023, while Jiahong New Material plans to conduct water balance testing in 2025,progressively expanding coverage to all STL bases.

The source water at STL's Pinghu base has consistently high chloride ion content and conductivity, severely limitingindustrial water reuse efficiency. In response, the base rapidly assembled a professional technical team to exploreinnovative water treatment and circulation processes. It pioneered a fully market-driven and commercialized contract-based water-saving partnership model between high-water-consumption enterprises and professional water treatmentcompanies. A specialized water treatment Company was commissioned to construct and operate two circulatingcooling water recovery systems. The treated reclaimed water saw signi?cant quality improvements, with chloride ionconcentration reduced to 15 mg/L and conductivity lowered to 70-90 μs/m—only one-tenth of the source water values.The cooling water concentration ratio increased from 2.2 to 4.5. Through close collaboration with water-saving serviceproviders, STL successfully achieved water conservation, cost reduction, revenue generation, and emissions reduction.

The Lianyungang Base has significantly improved water efficiency indicators through technological innovations,including condensate recovery, high-concentration circulating water operation, and a hierarchical temperatureutilization system for cooling water networks. With a unit water intake of just 2.30 m?/t (47% lower than the industry'ssecond-ranked enterprise) and outstanding water reuse rates, STL was awarded the "Water E?ciency Leader" title inthe ethylene industry, earning recognition from the Ministry of Industry and Information Technology as a benchmarkenterprise for both energy and water e?ciency.

Market-Driven Approach to Reclaimed Water Reuse

Awarded "Water E?ciency Leader" Title in the Ethylene Industry

Case

Case

Water Resource Recycling and UtilizationSTL continuously advances water recycling initiatives and actively promotes projects aimed at reducing core business waterconsumption across all operational bases. In 2024, the Pinghu base recycled 1.1 million tonnes of reclaimed water. TheLianyungang Base installed a new reclaimed water reuse system, expected to achieve a reuse volume of 4.1 million tonnes peryear by 2025. STL Technology transports steam condensate to the main Jiaxing facility, saving 60,000 tonnes of puri?ed waterannually. The Jiaxing base, through its reclaimed water reuse project, achieves an annual recovery of 49,700 tonnes of water.

? Enhance the recovery ofsteam condensate and con-ductive heat ?ow to achieverecycling? Collect rainwater aroundthe firefighting pool, pumpit to the water treatmentstation, and then use it forreplenishing the fire reser-voir

? Strengthen the pelletiza-tion process control andreduce the frequency of pel-letizing water replacement? Use of surface evaporative

air cooler and circulatingcooling water air for coolingdevice in the circulatingcooling technology

? Replace outdated bypassfilters with energy-savingones

?Use backwash water for pharma-ceutical dilution to improve thewater recycling rate?Use phosphorus-free/low phos-phorus water treatment chemi-cals for circulating cooling watertreatment technology, which canmake the circulating water systemreach a 7-time concentration andachieve a water-saving rate of

12.5%

Improve water

e?ciencyWaterrecycling

Processupgrade

Equipmentoptimization

? Strengthen the inspectionof various water supply pipe-lines in plants, and conductprompt maintenance toavoid leakage

Metrics and TargetsSTL has set a target to reduce freshwater use intensity by over 4% by 2027 with 2024 as baseline and implemented a monthly assessmentmechanism for unit water consumption across all business divisions. In 2024, overall water e?ciency targets across STL's bases were met,demonstrating e?ective progress in achieving water conservation goals through scienti?c management and continuous monitoring.Lianyungang Base's 2024 total industrial water consumption target was set at 23 million tonnes, with actual consumption reaching

20.16 million tonnes. Through increasing the concentration ratio of circulating water, reducing wastewater discharge, and

optimizing facility water use, signi?cant water conservation results were achieved. The Pinghu base successfully controlled waterintensity through product-speci?c water consumption management.The Company conducts weekly and monthly tracking of water consumption, air emissions, and wastewater discharges, performingsequential comparative analysis to monitor fluctuations. If significant deviations are detected, the relevant department heads areimmediately engaged to identify root causes and implement targeted corrective measures, ensuring minimized environmental impact.We also maintain continuous disclosure of water-related data, compiling and publishing three-year historical records of water usageand withdrawals, demonstrating steadily improving water stewardship capabilities.

Biodiversity ConservationAs a leading Company in the petroleum and chemical industry, STL pays attention to the impact of its operations on natural resourcesand biodiversity, keeps the relevant impact as minimal as possible, and actively carries out public welfare activities for biodiversityconservation to ful?ll its corporate social responsibility. We strictly adhere to national ecological protection related requirements,consider ecological protection during the initial project construction assessment, production, and operations, resolutely rejectprojects in ecologically vulnerable areas. Additionally, the Company continuously improves the monitoring mechanism of ecologicalprotection and restoration protection, implements e?ective measures to mitigate the impact on biodiversity throughout the entireprocess of production to conserve biodiversity. As of the end of the reporting period, the projects of our production bases andbusiness units had adhered to the ecological environment control programs, the main functional area plan and the general land useplan and had not crossed the ecological protection red line.At the Jiaxing base, STL integrates biodiversity protectionthroughout the entire project lifecycle and activelyimplements dust control measures. Continuouswalls or fences are installed around the constructionsite, with sealed bases to prevent mud leakage. Dust-generating materials such as cement and sand arestored in enclosed areas or covered appropriately.Exposed surfaces are covered with dust nets or arti?cialturf. Additionally, a sprinkler system is installed alongkey areas such as main roads and site enclosures, withscheduled mist spraying to minimize dust and maximizethe preservation of the original land ecosystem balance.

Dust Control at Construction SitesCase

In 2024, the Lianyungang Base completed its soil and waterconservation project for the STL Staff Quarters. Throughscientific planning, the base implemented vegetationrestoration and engineering measures, optimizing vegetationdistribution, increasing green coverage, and effectivelyreducing the risk of soil erosion to maintain local ecologicalstability. Additionally, the Lianyungang Base finalized theacceptance of its marine ecological monitoring system,which enables real-time tracking of seawater quality andbiodiversity indicators. This system provides a scienti?c basisand technical support for marine ecological protection, with atotal investment of approximately RMB 1.45 million.

Advancing Biodiversity ConservationCase

IndicatorsUnit202420232022

Water consumptionTotal water consumptionmillion tonnes

741.60566.74489.20Municipal water consumptionmillion tonnes

30.9633.6428.52Othermillion tonnes

7.856.182.16Water use intensity

million tonnes/10,000 tonne products

0.60 0.50 0.66Total recycled and reused watermillion tonnes

702.79526.92458.52Recycled and reused water percentage%

94.7692.9793.72

During the reporting period, a new plant was introduced to produce raw materials that the Company previously had to procure externally, as a keyinitiative for industry chain integration, to improve production e?ciency and product quality and enhance market competitiveness.

UN SDGs

Building a Harmonious Societywith People at the HeartSTL adopts standardized employment practices, values employee rights and interests, and provides a platform for self-actualization and professional growth. Actively engaged in public welfare initiatives, we foster mutual growth between employeesand the Company, contributing to society and working together to realize the "STL Dream".

Governance

The Company has established a Work Safety Committee, chaired by the Chairman of the Board, to overseeall aspects of work safety management, underscoring its strong commitment to employee health and safety.Moreover, through democratic management systems such as the Employee Representatives' Conference andlabor union, the Company ensures employees' rights to information, participation, expression, and supervision,fostering shared progress in corporate development.StrategyEmbracing a people-centric strategy, the Company acquires and retains talent through inclusive recruitment, a well-established training system, and scienti?cally designed promotion mechanisms, supporting employees' all-rounddevelopment. Upholding the principles of "safety over pro?t" and "treating environmental protection as a product",the Company advances full lifecycle management of chemicals while actively seeking green alternatives to phaseout all high-risk substances of concern. Furthermore, the Company integrates public welfare into its developmentstrategy. This helps enhance our corporate image and brand value, contributing to "mutual growth of individualsand the organization, and harmonious progress of the enterprise and society."

Goals

100%

labor contract signingrate and social insurance coverageEnhanced employee satisfaction100%

occupational healthcheckup rate100%

participation in hazardouschemicals safety training for relevantmanagement and operational personnel

Regular safety inspections of hazardouschemical storage areas

Zero work-related injury incidents

100%

identi?cation ofmajor safety hazards

100%

recti?cationof the hazards identi?ed

Protection of women's rights and increasedrepresentation of female directors and cadres

Impacts,risks, andopportunities

The Company provides employees with robust professional support and a positive work environment throughwell-established employee rights and interests protection mechanisms, a diverse benefits system, andcontinuous investment in training. The Company conducts labor and human rights risk assessments everysix months to identify and address potential risks, thereby strengthening employees' sense of belonging andloyalty and improving productivity and innovation. With a sound safety management system and occupationalhealth policies, the Company employs digital technology to enhance safety management and reduce accidentrisks, ensuring a safer and healthier workplace for its people. Furthermore, the Company proactively engagesin social welfare initiatives, supporting rural revitalization, educational aid, and medical assistance programs tofoster a more harmonious society.

Safeguarding Employee Rights and Bene?ts

Equal EmploymentSTL acts in strict accordance with theLabor Law of the People's Republic of China, the Labor Contract Law of the People's Republicof China, the Social Insurance Law of the People's Republic of China,andthe Provisions on the Prohibition of Using Child Labor,among other applicable laws and regulations. The Company ?rmly opposes forced labor, illegal labor, harassment, and abuse, andstrictly prohibits the use of child labor to fully safeguard employees' legitimate rights and interests.Anti-Discrimination and Equal RightsCommitted to fostering equality in the workplace, STL ensuresthat employees are not subject to discrimination or unfairtreatment based on nationality, ethnicity, religious belief, culturalbackground, gender, age, disability, or other factors throughoutrecruitment, onboarding, promotion, and termination processes.We encourage individuality at work and advocate a diverse andinclusive corporate culture that promotes mutual respect andunderstanding among employees.

Protection of Female Employees'Rights and Interests

In terms of the rights and interests of female employees, STL strictlycomplies with applicable laws and regulations to ensure that femaleemployees are legally entitled to marriage leave, maternity leave, andspecial protections during pregnancy, childbirth, and breastfeeding.On top of this, we accommodate the special needs of female employeesby providing nursing rooms for breastfeeding mothers, organizingspecialized health check-ups for female employees, etc. In addition,we are committed to offering female employees with equal careerdevelopment opportunities. By providing professional guidance oncareer development and skills development, we contribute to a moreequitable and sustainable future.

In addition, the Company regularly conducts diversity training to enhance employees'awareness and understanding of diversity and inclusion through systematical educationand guidance. This helps to further improve employees' sense of inclusivity and respect,driving the continuous development of our corporate culture.To safeguard the rights and interests of employees, we have formulated theAttendance andLeave Management Measures,which clearly sets forth work hours, national statutory holidays,paid leave entitlements, and overtime compensation. During the reporting period, the Companyrevised theAttendance and Leave Management Measuresto further refine attendanceregulations, specify leave categories and durations, and updated approval authorities forattendance management.

Labor contract signing rate100%Social insurance coverage rate

100%

In 2024

STL is actively advancing diversity in nationality and ethnicityin its workforce

Diverse Recruitment Channels

Social Recruitment

STL employs diverse recruitment channels to build a strategic talent pipeline aligned with its business operationsand development strategies. This allows us to provide talent support for business development, establish a long-termcompetitive advantage, and create a solid talent reserve pool. In evaluating talent, we prioritize ability over credentialsand contribution over tenure. While academic background and work experience are important, we do not see them asthe sole standard. We focus on a comprehensive evaluation of both character and competence, committed to building afair, just, equitable, and inclusive recruitment environment.

In March 2024, Shen Xiaowei, STL VicePresident and Board Secretary, andYang Xiaoyun, Deputy Director of theBoard Office were invited to attendthe "Ring the Bell for Gender Equality"event at the Shenzhen Stock Exchange,which reflects the Company's activecommitment to promoting gender diversityand equal opportunities as part of itscorporate social responsibility. This globalinitiative, jointly launched by UN Women,the World Federation of Exchanges,and other international organizations,aims to advance gender equality andcontribute to the UN SDGs.

Ring the Bell for Gender Equality, Supporting the UN Women InitiativeCase

Participate in offline job fairs and onlinelive broadcasts on recruitment platforms.Publish recruitment information on morechannels to increase reach and strengthentalent acquisition. Launch a WeChatofficial account for recruitment and the"STL Recruitment Mini-Program". Offerreferral rewards for internal and externalrecommendations. Mobilize the talent pooland motivate talent acquisition officers torecommend candidates.Target mid-to-high-level talent within the industry andadvanced management professionals from benchmarkcompanies. Build a strategic talent reserve to meet theCompany's human resource needs during its variousdevelopment phases.

Establish channels for attracting overseasexperts to continuously bring in high-level returnees.Expanding talent acquisition channels

Setting up roles for dedicated high-end talentrecruitment o?cers

Strengthening multi-platformcollaborations

During the reporting period, STL employed

foreignemployees

totaling

talents

ethnic minorityemployees

The Board of Directors comprises

members,

of whom are female directors,representing

22.2%

Senior management (Director level and above)comprises

members,

of whom arewomen, representing

24.4%

STL actively advances diversity in the Board ofDirectors and cadres:

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Campus Recruitment

STL Open House for College Students Nationwide

Building STL as a strong IP in campus recruitment is a keyfocus of our talent acquisition e?orts. Through workplaceexperience videos featuring new employees and socialmedia content sharing campus recruitment journeys,we highlight the benefits of joining STL via campusrecruitment and provide an authentic glimpse into ourworkplace. In addition, we invite graduates to participatein summer camps and open house events, o?ering themclose exposure to our production environment andcorporate culture, thereby strengthening their sense ofconnection and belonging.

STL launches the "Star Search Program" at targetuniversities, recruiting campus ambassadors tobreak down communication barriers with students.These ambassadors promote our informationwithin the student community, increasing STL'svisibility on campus. By offering "base salary +incentives", we encourage campus ambassadorsto refer candidates and help break through talentacquisition barriers, thereby attracting more high-potential talents.

Creating a full lifecycle diversi?ed campusrecruitment model

Establishing a campus ambassador referralreward mechanism

Building the STL IP in Campus Recruitment

Empowering diverse talent and expandinggrowth opportunitiesEach year, STL organizes the "Star" training camp forfresh graduates at the undergraduate and master'slevels. Through mentorship programs, STL selectsquali?ed mentors with solid professional knowledgeto guide new employees for one year, helpingthem transition into "STL-ized, professional, andinternational" talents.

STL's campus recruitment program spansthe entire academic year, offering variousrecruitment promotion initiatives such asinternships, campus ambassador programs, andscholarships tailored to di?erent student groupsat various grade levels.

Digital and Intelligent Recruitment Model

Recruitment System Optimizationand Upgrades

Expanding External and InternalReferral Channels

STL has been actively advancing the digital and intelligent transformation of its recruitment processes. By integrating advancedintelligent talent management platforms, we embrace digital technology throughout all stages of recruitment management.Leveraging artificial intelligence and big data, we have significantly improved talent acquisition and screening efficiency,remarkably enhancing operational e?ciency.STL always puts high importance on candidate experience. Through a series of digital initiatives, we o?er a more convenient,e?cient, and high-quality application process for job candidates, supporting our strategic talent reserve goals.

In talent acquisition, we utilize an advanced recruitmentsystem to record data throughout the hiring process andmake timely, flexible adjustments to our recruitmentstrategies accordingly. This facilitates the development of aninternal talent-sharing database, driving improvements inrecruitment e?ciency.

Launching Video-based JobDescriptionsSTL has introduced video-based job descriptions, startingwith campus recruitment. These nicely produced videos gobeyond the limitations of traditional text-based descriptionsby presenting the real workplace, giving candidates animmersive preview of their potential roles.

Externally, STL continues to strengthen collaboration withmultiple hiring platforms and aims to publish recruitmentinformation across a wider range of channels to enhance talentacquisition efforts. Internally, we have established an employeereferral platform, leveraging existing talent networks to achievehigh recruitment e?ciency and retention.

Combination of Traditional and DigitalInterviews

Embracing digital transformation, STL has introduced anadvanced cloud-based recruitment system, enabling one-clicknoti?cations for both candidates and interviewers. This eliminatesthe red tape and high costs associated with traditional phone callsand SMS notifications, significantly enhancing communicationefficiency and accuracy. In addition, we have initiated live-streamed recruitment via WeChat Channels and Tencent Meetingto better attract talents and select candidates.Awards and Honors in 2024

Campus Recruitment ExcellenceAward at the 2024 HR Digital andIntelligent Carnival and ChinaHuman Resources Venus Awards

AIGC-Powered Human ResourcesPioneer Award at the 2024 HR Digital

and Intelligent Carnival and China

Human Resources Venus Awards

Top 10 Advanced TalentManagement Organizations inNanhu District, Jiaxing City

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Protection of Employee Rights and Interests

Employee Satisfaction Survey

STL upholds the fundamental principles of standardization, fairness, and reasonableness, strictly adhering to the salaryguidelines of "position-based pay" and "equal pay for equal work". We have formulated theRemuneration ManagementMeasures,ensuring that our wage standards exceed the local statutory minimum wage, providing overtime remuneration, andpaying the full amount of social insurance contributions for employees. By doing so, we e?ectively safeguard the legitimaterights and interests of employees and enhance their sense of security and belonging in the workplace.

STL conducts biannual satisfaction surveysfor all employees, gathering feedback on keyaspects such as corporate culture, departmentalmanagement, job fit, teamwork, personal growth,logistics support, and safety protection. Based onthe survey results, we develop plans to improveemployee satisfaction. The Human ResourcesCenter is responsible for tracking and evaluatingthe implementation progress and effectiveness ofthe improvement measures and providing regularupdates to the management.

Remuneration and IncentivesSTL recognizes the contributions and creation of each employee and motivates talent through a well-established remunerationsystem and incentive measures. The Company has designed a three-level employee incentive structure: short-term (cost-reduction and efficiency enhancement rewards, optimization and improvement rewards, premium incentives, salesoverachievement rewards), medium-term (restricted stock incentive plans, virtual equity), and long-term (shareholding asbusiness partners). Through targeted value-driven incentive plans, we continuously encourage employees to pursue excellenceand transcend themselves.

A differentiated remuneration systemis in place, with the remuneration rangedetermined by position value and the leveldetermined by personal value.

2024 Employee Satisfaction Survey Results

Job rank is aligned with remuneration levelbased on position value, ability, competency,performance, and results. The principles ofdistribution according to work, efficiencyfirst, and fair and sustainable developmentare upheld, and a sound remunerationmanagement system is in place.

Remuneration surveys on the market, theindustry, the region, and competitors areregularly conducted to ensure that theCompany's remuneration is competitiveand in the leading position in the industry.

Remuneration is given as incentives andguidance. More pay for more work isadvocated. No cap is put on remunerationincentives.

STL'sRemunerationSystem

Corporate Culture

TeamworkPersonal Growth

Job FitLogisticsSupport

DepartmentManagementSafetyProtection

Democratic Communication

Labor and Human Rights Risk Assessment

STL practices a people-centric development philosophy and actively promotes democratic management. The Company implements andimproves a democratic management system, with the Employee Representatives' Conference as its core platform, organizing employeeparticipation in democratic elections, consultations, decision-making, management, and supervision.Each year, the Company convenes an Employee Representatives' Conference to collectively negotiate and vote on matters such as laborcompensation, working hours, holiday and leave, social insurance, employee benefits, and labor safety and health. In addition, theChairman of the Company's Trade Union serves as a member of the Supervisory Board, participating in the decision-making process ofmaterial matters.We have established a supervisory mechanism and a dedicated public bulletin board for factory affairs. All matters closely related toemployee interests, including performance management, compensation system, and bene?ts policies, must be reviewed and approvedby the Employee Representatives' Conference. Decisions approved by the Board of Directors and the implementation of proposals from theEmployee Representatives' Conference are made public to employees, allowing for employee supervision. The Company lawfully protectsemployees' right to know, participate, express, and supervise.

STL places great importance on managing labor and human rights risks. We perform company-wide assessments every six months tocomprehensively identify and address potential labor and human rights risks, ensuring the protection of employee rights and interests.In the risk identi?cation phase, the Company utilizes tools such as safety inspections, stakeholder interviews, and questionnaire surveys toexamine factors that may a?ect labor rights and human rights, covering aspects such as work environment, work intensity, remunerationand bene?ts, career development, and community relations. Through multidimensional analysis, we accurately pinpoint risk areas.In the risk analysis and evaluation phase, we comprehensively assess the impact of the risks identified on our business operations,employee well-being, reputation, and compliance. Prioritization is determined, and targeted management strategies are developed tominimize risk occurrence and prevent human rights violations. The risks identi?ed are addressed through measures such as improving thework environment, optimizing work?ows, and enhancing remuneration and bene?ts, with regular assessments of their e?ectiveness topromote continuous improvement.We document the entire labor and human rights risk assessment process in a detailed manner and actively engage with employees,customers, suppliers, and communities. Through training and communication, we enhance stakeholders' awareness and understandingof risks to jointly advance human rights protection and labor rights protection.Internal CommunicationChannelsSTL provides employees with various communication and grievancechannels to accommodate different feedback scenarios. Furthermore,the Company strengthens policy awareness through internal training andinformational materials, ensuring that every employee understands itsgrievance system, including the available channels, scope of grievances,procedures, and division of responsibilities.

Direct Supervisor or HumanResources Department

When employees encounter general issues at workor misunderstandings, they can ?rst report themto their direct supervisor or the Human ResourcesCenter for timely response and support. Thischannel is designed to quickly resolve simpleissues that arise in day-to-day work, ensuringemployees receive immediate feedback.Internal Grievance MechanismsThe Company has established platforms such as the EmployeeRepresentatives' Conference and the Labor Union, through whichemployees can raise grievances and seek solutions. These organizationshold regular meetings to discuss employee concerns and drive resolutions,providing employees with formal and e?ective channels to be heard.

Complaint BoxThe Company has set up a dedicated complaintbox for employees to submit their concerns andopinions at any time.

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Anonymous Protection

Email Grievance Channel

Grievance Handling Process

During the grievance handling process, the Company willtake necessary confidentiality measures to protect theprivacy of employees and the trade secrets of Company fromleakage.

Regular Evaluation and ImprovementThe Company regularly evaluates the implementation of thegrievance system, promptly addressing any issues identi?edand continuously optimizing the system to ensure thatemployee rights and bene?ts are properly protected.

The Company has established a dedicated email grievance channel for employees to submit grievance materials via email. Themanagement will respond within a speci?ed time frame after receiving the email.Once the management or designated personnel receive a grievance, they will register and review the grievance materials.Depending on the nature and severity of the matters, general matters will be handled by the Company's management,while complex matters will be handled under the leadership of the grievance management team. The resolution will becommunicated to the employee promptly. If the employee is dissatis?ed with the results, they may request further mediationor ?le a complaint with a higher-level department, which will conduct a re-examination.

Grievance Handling Process

Caring for EmployeesEmployee Bene?ts SystemSTL always prioritizes the needs of employees, placing great emphasis on the mental and physical well-being of employees.The Company has established policies such as the BenefitsManagement Measures and the Employee Home Visit SubsidyManagement Measures,aiming to create a comprehensive and thoughtful employee bene?ts system.In 2024, STL revised theBene?ts Management Measures, which now include 64 "happiness policies" across 5 major categoriesand 12 sub-categories. The revised version improves the standards for sick leave pay, increases meal allowances and overtimecompensation, and expands the coverage of the home visit subsidy, bene?ting all employees across the Company.

Reception

GradedProcessing

Feedback:

Notify Result

Review: Higher-Level Review

NotSatis?ed

STL Employee Bene?ts System

For employees whose families are facing di?culties, the Company has always been a strong source of support. We promptly reachout to understand the situation and provide emotional support and financial assistance. As a bridge between employees andsociety, we not only care for our employees but also extend this support to their families, o?ering condolence money to employees'parents and tuition subsidies for their children.In 2024, STL provided medical subsidies to a large number of employees' family members. Meanwhile, STL provided nearly 3,000dormitory units, accommodating 3,581 employees.Employee Activities

STL places great importance on human-centered care and thedevelopment of an employee culture. We have established well-equipped facilities such as a staff service center, library, gym, andtennis courts, offering a wide range of cultural and recreationalopportunities for employees. These include sports competitions likebasketball and badminton, health lectures and seminars, book clubs,cultural festivals, Mid-Autumn song parties, and birthday celebrations.In addition, we regularly organize annual team trips and Family Dayevents, inviting employees' families to participate and fostering strongeremotional connections between employees and their families. STLalso encourages employees to engage in community service and publicwelfare activities, strengthening their sense of social responsibility.STL Family Day Event

Employees enjoy statutory holidays aswell as paid leave bene?ts (annual leave,maternity leave, marriage leave, bereave-ment leave, work-related injury leave,nursing leave, sick leave, breastfeedingleave, Women's Day leave, etc.), holidaysubsidies, various special benefits andcondolence money, and birthday gifts.

The Company provides rental subsidies,interest-free home loans, and employeeapartments to help employees addresshousing issues.

Employees are entitled to paid vacation.Holiday and Care Bene?tsHousing Bene?tsTravel Bene?ts

Employees with at least one year of serviceare eligible for a home visit subsidy.

Employees with at least one year ofservice are eligible for subsidies forpursuing a higher degree or professionaldevelopment training.

The Company cares about the education

of employees' children and provides

scholarships and student grants to create

a more harmonious workplace and com-

munity while witnessing and supporting

the growth of the younger generation.

Home Visit SubsidyTuition SubsidyChildren's Education Support

Occupational health check-ups, physicalexamination, safety allowances, healthsubsidies, and high-temperatureallowances for all employees.

Employees are entitled to the "Five In-surances and Housing Provident Fund"from the ?rst day of employment. Sup-plementary commercial insurance ispurchased based on job categories.

Free shuttle bus, night shift and duty

allowances, meal allowances, and full

attendance rewards.Health Bene?tsMedical Insurance Bene?tsWork-Related Bene?ts

Satis?ed

or Not

9190

Building a Harmonious Society with People at the HeartSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Growing Together with EmployeesEmployee TrainingUpholding the culture of "Harmony", STL has established a comprehensive trainingpolicy framework, which includes existing systems and rules such as theTrainingManagement Measures,theInternal Trainer Management Measures,theTeaching MaterialDevelopment Guidelines,theMentor Management Measures,theSTL Group Star CultivationEmpowerment Manual, the STL Group Star Cultivation Manual,theSTL Group "Star"Training Camp – Political Commissar's Work Manual, andtheSOP for Training ProjectImplementation.Through unified planning, the Company ensures standardized traininge?orts, providing employees with high-quality training services.

Building an OnlineLearning PlatformLeveraging the STL Business Schoolonline learning platform, the Companystrives to create a comprehensive andefficient training system closely alignedwith its strategic goals and employeedevelopment needs. In 2024, we success-fully developed 59 internal video courses,covering a new employee series (18 cours-es), policy series (5 courses), marketingseries (33 courses), and general series (3courses). A total of 19,645 person-times ofonline learning were completed.

Building a TrainingFaculty SystemSTL places great emphasis on developing atraining faculty system, injecting momen-tum into employee growth and corporatedevelopment by building a diverse team oftrainers.STL selects internal trainers from outstand-ing employees, technical experts, and man-agers and provides systematic training inteaching methods, course design, and moreto enhance their teaching skills. In addition,the Company actively collaborates withindustry experts, scholars, and professionaltraining institutions to invite external ex-perts to share cutting-edge knowledge andthe latest technological trends, while alsointroducing customized training courses.

Tuition ReimbursementMechanism for DegreeAdvancementSTL has established a comprehensivetuition reimbursement mechanism fordegree and professional quali?cation ad-vancements. Employees can apply for re-imbursement according to the Company'sregulations after they graduate and obtainrelevant quali?cations or certi?cates, witha reimbursement cap of RMB 400,000. In2024, over 400 employees participated inthe degree advancement program, witha total reimbursement amount reachingRMB 1.047 million.

Diverse Training System for TalentsSTL has formulated the Rules for theImplementationof Training for Fresh Graduates and the Rules for theImplementation of Training for New Employees Hiredthrough External Recruitment.For new hires, especiallyfresh graduates, we have designed a systematiconboarding program. Through initiatives such as the "StarTraining Camp", new hires are organized to participatein onboarding camps, where they engage in intensivelectures, team-building activities, case studies, role-playing, and other methods to systematically learn aboutour corporate culture, job skills, and professional qualities.This training helps new graduates transition fromstudents to working professionals and ultimately become"independent KPI owners" or "skilled performers".

New Employee Onboarding Training

New Employee Onboarding

the Company increased itsinvestment in training, witha total expenditure of RMB

4.22

million

In 2024

Professional Skills Training

STL has formulated theRules for the Implementation of Special Training Programs of STLGroup. During the reporting period, weorganized a series of professional capability enhancement training sessions for engineers and key ?nancial personnel, focusing on the"two leading" strategy. By engaging external professional trainers and combining course material with workshop discussions, we providedcomprehensive training for 300 engineers and 36 ?nance sta?. This helped establish our methodology for corporate management andtalent development and consolidate our internal talent cultivation experience.

Professional Capability Enhancement Training for Engineers

Training for Financial Key Personnel

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Leadership Training for Senior Managers

Benchmarking Visits for Senior Managers

STL has implemented di?erentiated leadership developmentprograms for management at all levels to comprehensivelyenhance their leadership skills and meet the developmentneeds of the Company.Senior managers visit benchmark companies to learnadvanced management practices within the industry. Middlemanagers enhance their leadership skills through a readingclub onThe 21 Irrefutable Laws of Leadership.Frontlinemanagers undergo specialized empowerment training toimprove their job performance.

Leadership Development Program

STL's training system also covers general professionalskills development, such as marketing coursesand communication skills, to enhance employees'competitiveness and adaptability in the workplace.

General Professional Skills Training

STL organized training for a total of

In 2024

Employee DevelopmentEmployee Promotion and Development Channels

STL has established science-based promotion pathways and management mechanisms. Policies such as theManagementMeasures for Talent Development Review, Management Measures for Employee Job Level Evaluation,andCadre ManagementMeasureshave been formulated to ensure open and transparent promotion standards. STL provides employees with a broadcareer development platform and builds an e?cient talent pipeline.STL has established three career advancement tracks: Management, Professional, and Technical. The Company prioritizesability over credentials and contribution over tenure. With a fair and transparent competitive internal selection and transfersystem, we encourage employees to specialize in their strengths and aim to support diverse talent development needs.Diverse career advancement tracks

Employee Assessment and FeedbackSTL conducts annual assessments of employees based on theCadre Management Measures andtheManagement Measures forEmployee Job Level Evaluation.In addition, to build a science-based, e?cient talent development system that allows accurateidenti?cation of candidates for leadership roles, the Company regularly conducts Talent Development Reviews (TDR).The Talent Development Review (TDR) evaluates talents using two dimensions, i.e. competency and potential, and positionsindividuals in a nine-box matrix. The horizontal axis represents competence, based on the performance standards of thecurrent position. It is assessed through quali?cation evaluations and other methods, with three levels: Higher than Expectations(H), Meeting Expectations (M), and Lower than Expectations (L). The vertical axis represents potential and focuses on futuregrowth. It is assessed according to general cadre standards, including interviews and surveys, and categorized into three levels:

Very High Potential (VH), High Potential (H), and Steady (S).

Lower than Expectations (L)Meeting Expectations (M)Higher than Expectations (H)Very High Potential (VH)Developing (10%)Future Star (10%)Star Talent (10%)

High Potential (H)To Be Observed (10%)Core Employee (25%)Expert for the Job (10%)

Steady (S)Low-Performing Employee (5%)Quali?ed Employee (10%)High-Performing Employee (10%)Excellent employee on both fronts,priority for employee developmentwith additional incentives andresources, included in the cadrepipeline

Core talent, priorityfor employeedevelopment, includedin the cadre pipeline

Competency orpotential needs tobe improved

Notcompetent,personneladjustmentrequired

Technical

Track

JuniorWorker

Intermediate

Worker

SeniorWorker

Technician

SeniorTechnician

ManagementTrack

SupervisorManagerDirectorExecutive

Professional

Track

Sta?JuniorIntermediateSenior ExpertChief Expert

Chief Scientist

which amounts to an average of

hours oftraining per employee.5,057person-times

436,544

hours of trainingaccumulating

9594

Building a Harmonious Society with People at the HeartSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Robust Safety Practices

Work Safety Management

STL always places the health and safety of its employees as a top priority and upholds the corporatemission of "Chemicals Make A Better Life". STL strictly complies with national laws and standards,including theWork Safety Law of the People's Republic of China and the Occupational Disease Preventionand Control Law of the People's Republic of China,and has developed and continuously improvedits internal policies and systems for occupational health and safety. The Company ensures the strictimplementation of its primary work safety responsibilities, screens and identi?es various potential safetyhazards, and comprehensively improves its work safety management standards.Safety Management System

Safety Management Structure

To further strengthen its management of work safety and environmentalprotection, and to enhance employees' awareness and actionsregarding safety and environmental protection, STL has establishedtheManagement and Evaluation System for Employee Safety andEnvironmental Protection Rewardsand theHSE Performance Evaluationand Management System. By developing assessment and incentivesystems, the Company comprehensively evaluates employees' safetybehaviors in a systematic and standardized manner. Based on theresults of these evaluations, corresponding rewards and penalties areimplemented to encourage all employees to actively participate in worksafety and environmental protection practices.

To ensure the smooth implementation of the Group's work safety e?orts, STL has established a Work Safety Committeechaired by the Chairman of the Board of Directors. The Committee comprises 4 vice chairpersons, 1 o?ce director, 11members, 15 dedicated safety management personnel and 7 registered safety engineers. Members of the Committeeare drawn from the heads of various departments, covering all key areas related to work safety. The Committee has ageneral o?ce responsible for daily safety management and for carrying out tasks assigned by the Committee. The o?ceis led by an executive member of the Committee who serves as the o?ce director.The Work Safety Committee oversees the Group's overall work safety e?orts and develops both short-term and long-term plans. It actively implements work safety policies, laws, and regulations, assesses key projects, and reviews andapproves management measures. The Committee holds monthly meetings to monitor the implementation of worksafety measures across departments, address major work safety issues, propose improvements, coordinate cross-departmental e?orts, review emergency response plans, and manage critical safety and occupational health mattersto ensure the orderly progress of work safety within the Group. The general office handles the Committee's dailyoperations, including monitoring the status of various units, collecting and analyzing potential hazards and suggestions,implementing a dual-prevention mechanism, organizing safety inspections, overseeing the execution of emergencydrills, preparing meetings and following up on meeting minutes. It ensures the e?cient functioning of the Committee,helping to eliminate potential hazards and maintain a safe working environment for the Group.

The Company did not haveany work safety incidents.In 2024

HSE Management Revolutionized with Digital TechnologyAligned with digital transformation trends, STL has independently developed a"Five-in-One" platform to elevate safety risk identification, early warning, andcontrol to new levels of intelligence, precision, and e?ciency. With this platform,STL has achieved a milestone with second-class safety response time, with arisk identification accuracy rate of up to 85%, and a reduction in safety incidenthazards by up to 80%.The "Five-in-One" platform, supported by over 20,000 bluetooth beacons,creates a positioning system with an accuracy of 3 meters and a frequency of 2seconds, enabling 24/7 online safety risk monitoring and real-time early warning.The platform deeply integrates "People, Machine, Object, Environment, andManagement", creating a one-stop integrated management ecosystem, whichencompasses smart comprehensive management, visualized operation andmaintenance, intelligent business collaboration, instant alarm handling, andcoordinated escalation, and signi?cantly enhances the e?ectiveness of chemicalwork safety management.

"Five-in-One" SystemTo safeguard the health of employees, the Company has introduced a digital occupational health sampling managementplatform for dynamic management of occupational health (filing, examination and medical checkups), occupational healthmanagement records, training for responsible personnel, deployment of personal protective equipment (PPE), and on-siteplacement of warning signs. This systems enables more efficient and timely identification of potential health risks and theimplementation of corresponding preventive measures.

Risk identi?cation accuracy rate up to85%Reduction rate in safety incidenthazards up to

80%

Supported by "Five-in-One" platform

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Building a Harmonious Society with People at the HeartSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Immediate Medical AttentionSafeguarding the health of employees is STL's top priority. In the event of a safety incident,STL arranges medical treatment for the injured employee as soon as possible.

Strict Compliance with National Regulations on Work-Related Injuries

STL ensures timely reporting of work-related injuries and providesremuneration, including work injury wages and one-time disability subsidies,as mandated by law.Medical Treatment Period ManagementSTL effectively manages relevant matters during employees' medicaltreatment period, arranging caregivers as needed to ensure proper careand support.Accident Investigation and AnalysisInvestigations and analyses are conducted to accurately understandthe incidents, identify causes and patterns, and draw lessons. E?ectivepreventive measures are then implemented to prevent recurrence andensure work safety.

Occupational Health Management

Work-Related Injuries Management

Daily Protective Measures

Post-Injury Management

To standardize the handling procedures for work-related injuries and enhance employee awareness of work safety, STL hasestablished a comprehensive work-related injury management system, which clearly defines the processes for preventing,handling, and following up on work-related injuries, thus helping to minimize risks for both the Company and its employees.

Personal Protective EquipmentWorkplace ImprovementsEmployees are provided with appropriate PPE, such asearplugs, safety glasses, and gloves, based on their exposureto workplace hazards. Regular training sessions andinspections are conducted to ensure proper usage.

STL continuously improves workplace conditions to reduceor eliminate occupational health hazards. Through measuressuch as optimizing ventilation systems, reducing noise levels,improving lighting, and installing warning signs and warninglines, STL reminds employees to stay alert about safety.

Occupational Disease Prevention

STL follows its internal occupational health and safety policies to actively implement comprehensive ande?ective management measures, which include but are not limited to:

Training on occupational disease prevention and proper use andmanagement of PPE at Weixing New Materials

ISO 45001 Occupational Healthand Safety Management SystemCerti?cation

Each production base and business division conducts training on occupationaldisease prevention and the proper use and management of PPE for employees.Providing occupational disease prevention training

The Company ensures the proper functioning of occupational disease prevention and emergency response facilities andequipment. STL employs automated, mechanized, and enclosed systems for material transport, installs insulation layers onequipment pipelines in high-temperature areas, deploys exhaust gas absorption systems in dust-prone areas, and implementsnoise control measures such as factory soundproo?ng and soundproof shades. For SAP respirable dust, STL conducts regularsampling and sends the samples to the BV laboratory in the U.S. for analysis, ensuring comprehensive employee health protection.

Giving priority to adopting new technologies that bene?t the preventionof occupational diseases and protection of workers' health.

Each production base and business division has identified their occupationalhazards in production processes, such as noise, high temperatures, dust, weldingfumes, and chemicals. The Company conducts regular occupational hazardmonitoring to ensure a working environment that satisfies safety standards,laying a solid foundation for employee health. Employees in positions exposedto occupational hazards undergo annual occupational health check-ups. In 2024,100% of these employees received occupational health check-ups, with no casesof occupational diseases detected.

Identifying, monitoring, and assessing occupational hazards inproduction operations.

Employee occupation healthcheck-up rate100%No cases of occupationaldiseases detected

In 2024

100%of STL's operationallocations received the ISO45001 Occupational Health andSafety Management Systemcerti?cation.

During the reporting period

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Building a Harmonious Society with People at the HeartSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Safety Hazard Prevention

STL has formulated itsEnvironmental and Occupational Health and Safety Monitoring,Measurement, and Control Procedures.Drawing on "Five-in-One" intelligentmanagement platform that monitors safety risks in real-time, the Company accuratelyidentifies sources of major hazards, enables early warnings, and efficiently detectsand recti?es safety hazards to prevent risks and ensure work safety. In addition, theCompany conducts a comprehensive internal safety audit annually to ensure thee?ective implementation of safety management measures. In 2024, all identi?ed safetyissues were recti?ed on time.Handling and Management of Safety IncidentsSTL has formulated detailed emergency response plans for safety incidents to ensure that, in the event of an incident, on-site personnelcan quickly respond, report the incident according to established procedures, and immediately activate the contingency plan.Senior managers of the Company play a crucial role in handling safety incidents. The general managers of each production baseand business division are responsible for leading the on-site handling of major or more serious safety incidents, as well as signi?cantprocess safety incidents. Vice general managers participate in the on-site command and guidance of general or more serious safetyincidents. Managers of each process unit are responsible for the on-site handling of smaller incidents and general process safetyincidents. After an incident, the management must promptly arrive at the scene to direct rescue efforts, ensuring the incident ise?ectively and promptly controlled.Furthermore, the Company has established close ties with nearby medical institutions to ensure that injured employees receivefast, professional medical treatment.

Emergency Safety Drills

STL conducts multiple emergency drills each year, covering all employees across all production departments. These drillsencompass a wide range of scenarios, including emergency evacuation for explosion incidents, rescue procedures for falls fromheight, on-site containment of material leaks, ?rst aid for burns and poisoning, emergency shutdowns for mechanical injuries,and natural disaster prevention and response. These activities not only assess the feasibility and practicality of emergencyresponse plans but also enhance employees' awareness and ability to handle various emergencies.

Contractor HSE Management

Work Safety TrainingSTL provides workplace safety training covering topics such as occupational disease prevention, proper use of PPE, and safetymeasures for summer, including ?re prevention, heatstroke prevention, lightning protection, and ?ood control. Specializedtraining is o?ered to employees in high-risk positions, while new employees undergo safety orientation to ensure that they fullyunderstand the Company's safety policies, regulations and operational procedures before starting work.

The Company has formulated theDetailed Rules for Contractor HSE Management and the Supplier/Contractor Code of Conduct,whichset standardized requirements and management procedures for contractor entry, selection, utilization, project preparation, on-sitemanagement, and appraisal. Contractors must comply with occupational health and safety regulations, ensure that workplace facilitiesmeet safety, environmental, and health standards, protect employees and surrounding residents from hazards caused by productionand products, and strive to achieve the HSE management goals of "zero injuries, zero incidents, and zero pollution".The Company has developed relevant qualification verification forms and performance appraisal forms to implement a reward and punishment-based management system for contractors. Through dynamic appraisals and comprehensive evaluations, contractors withoutstanding performance are rewarded, while those who violate regulations are penalized or even blacklisted.

All identified safety issueswere recti?ed on time.In 2024

Chemicals Management

Restricted Substances Management

Governance

Strategy

In strict compliance with applicable laws and regulations, including theWork Safety Law of the People's Republic of China, the FireProtection Law of the People's Republic of China, and the Regulations on the Safety Management of Hazardous Chemicals,STLhas established a chemicals safety management system from the headquarters to front-line operations. The Work Safety andEnvironmental Protection Center is responsible for formulating strategies, policies, and standards for chemicals management,ensuring that the Company's chemicals-related activities comply with both domestic and international regulatory requirements.The Center also oversees the implementation of the above strategies, policies, and standards at each production base and businessdivision. Production bases and business divisions are responsible for the usage, storage, transportation, and disposal of chemicals,and for developing emergency response plans for unexpected events.STL follows the principle of "strategic leadership and overall control" by headquarters and requires each production baseto perform "front-line execution for ensuring safety". The Company has established a transparent and e?cient supervisionprocedure, an information reporting mechanism, as well as incentive and assessment systems.STL strictly complies with domestic laws and regulations such as theWork Safety Law of the People's Republic of China,the Hazardous Chemicals Management Regulations, the Regulation on the Administration of Precursor Chemicals, and theMeasures for the Public Security Management of Explosives Precursors,as well as international regulations such as the REACHRegulation, POPs Regulation, CLP Regulation,California Proposition 65,Annex III Chemicals of the Rotterdam Convention, theEPA's list of hazardous substances,the SVHC List,ZDHC MRSL 20_V3.1, among other laws, regulations, industry standards,international conventions, and customer requirements. Based on the applicable regulations and requirements, STL hasidenti?ed and assessed all chemicals involved in its materials and production processes.The Company has established a general survey system for chemicals, conducting regular surveys on the usage, production,storage, and other aspects of all substances identified in theList of Restricted and Banned Substances.This ensures strictfull-lifecycle management of chemicals procurement, transportation, storage, usage, and disposal. In addition, we maintain atransparent mechanism for publicly disclosing the registration and usage of chemicals involved in our operations. We provideinformation on these chemicals, including Safety Data Sheets (SDS) and labels, to stakeholders such as end users, ensuringcompliance with external regulatory requirementsNone of STL's products (including existing products and those in the pipeline) use any banned substances in theList ofRestricted and Banned Substances.

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Building a Harmonious Society with People at the HeartSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Full Lifecycle Chemicals Safety ManagementSTL strictly adheres to the requirements of theHazardous Chemicals Management Regulations,implementing full lifecyclemanagement of chemicals from procurement, transportation, and storage to usage and disposal, and strictly performing?lings, registrations, and review and approval processes.

MeasuresPhase? Ensure that products in the pipeline do not contain bannedsubstances and consider green chemistry principles.Research andDevelopment

? Conduct safety assessments of chemicals,including potential environmental and health risks.

? Identify hazards in pipeline products, specifying theirtoxicity, corrosiveness, ?ammability, and environmentaland health impact.

? Assess potential exposure routes and intensityduring experiments and establish correspondingcontrol measures.

Warehousing? Implement appropriate safety facilities based on the type,properties, and quantity of hazardous chemicals.

? Store chemicals by properties/category to prevent contactbetween incompatible substances.

? Install video surveillance systems, emergencyshut-o? mechanisms, and combustible/toxic gasalarm systems.Production? Achieve a high level of automation in productionprocesses.

? Apply stabilizers or refrigerated water-basedcooling to chemicals prone to polymerization orrequiring temperature control.

Procurement? Evaluate suppliers to ensure the chemicals are safe.

? Complete hazardous chemicalsregistration to ensure traceability.

LoadingandUnloading

?Conduct "Five Mandatory Inspections" on incomingcargo vehicles to ensure compliance with procedures andquali?cations requirements.

? Employ digital technologies to enhance safetymanagement.? De?ne designated routes and speed limits for vehiclesentering factories.

? Enforce strict use of PPE, equip ?re safetyequipment, and prohibit smoking and ?res.

Usage? Strengthen safety training to improve overall safety

awareness and operational pro?ciency.

? Enhance emergency response drills to improve

incident handling capabilities.Sales? Disclose the registration and usage of all chemicalsinvolved in operations through a transparent mechanism.

?Ensure that chemicals used in products comply

with the safety requirements of customers and

the market.

?Engage quali?ed providers to collect, transport,

and treat waste chemicals.

? Provide Safety Data Sheets (SDS) and labels to meet

external regulatory requirements.

? Fill in the triplicate form for waste chemicals transfer onthe government's hazardous waste management platform.Disposal? Store waste chemicals in accordance with thePollutionControl Standards for Hazardous Waste Storage.

? Dispose of waste chemicals in compliance with

regulations to prevent environmental pollution.We have not only implemented strict measures at each stage of the chemical lifecycle but also formulated theGuidelines for SafetyRisk Assessment of Aging Equipment in Enterprises Producing or Using Hazardous Chemicals. Regular safety risk assessmentsare conducted on existing equipment, with corresponding risk control measures established. For precursor chemicals, explosivesprecursors, and highly toxic chemicals, we require relevant personnel to obtain a Precursor Chemicals Administrator Certi?cate toensure professional handling.

Chemicals Phase-out andReplacement

Impact and Risk Management

Metrics and Targets

STL prioritizes control at the source in chemicals management,implementing chemicals phase-out and replacement processesfrom a forward-looking perspective. The Company has developedits chemicals phase-out list in accordance with national and localcompliance requirements such as theCatalog of Backward WorkSafety Production Processes, Technologies, and Equipment ofHazardous Chemicals to Be Phased Out (First Batch) and theCatalog of Toxic Chemicals Prohibited or Strictly Restricted inChina,and by incorporating in-house hazard assessments.In addition, we are actively working on chemicals replacementprocesses, considering or seeking safe chemical alternatives withplans to phase out all chemicals of concern in the future. We areexploring the adoption of biologics or green raw materials and arecompiling aPositive List of Chemicalsfollowing the U.S. EPA's SaferChemical Ingredient Listwhile promoting its integration into ourbusiness processes.

STL develops and implements an annual chemicals safety riskassessment plan each year. This plan covers a comprehensiveidentification and oversight of all chemicals used throughoutthe Company's entire value chain, including raw materials,auxiliaries, reagents, and products. By conducting generalsurveys of chemicals, we establish detailed chemical registrationforms based on the properties and categories of chemicals andengage third-parties to conduct full-factory chemical safety riskassessments.All chemicals are registered in the Hazardous ChemicalsRegistration Comprehensive Service System, the PrecursorChemicals Management Service Platform, the HazardousExplosives Precursors Information System, and the STL ChemicalsRegistration Forms. This ensures full coverage, transparency, andstandardized management, fortifying the Company's ability tocontrol chemical safety risks.STL regularly assesses the chemicals management performance and goal achievement of each production base and businessdivision, linking the assessment results to employee performance appraisals and reward and punishment. We encourage activeemployee participation in chemicals management to collectively enhance our chemicals safety management standards.

The toxicity, ?ammability and explosive properties of toluene increase safety hazards in the production process and this substancehas been included in the SVHCs (Substances of Very High Concern) list and the EPA's (Environmental Protection Agency) list ofhazardous substances. The company continues to promote the toxic chemicals phase-out program, replacing precursor chemicalswith new green chemicals in the acrylic production process, which e?ectively reduces the safety risks in the production processand signi?cantly reduces the negative impact on the environment.

8 major product catego-ries completed the ZDHCcertification, ensuringthe environmental andhealth safety of products.

7 product lines passed haz-ard factor testing and cer-tification, including VOCsand heavy metals, fromexternal organizations suchas SGS, further verifyingproduct safety.

The List of Restrictedand Banned Substanceswas established andupdated in a timely man-ner, with 125 restrictedand banned substancesclearly speci?ed.

Over 12 major hazardsource assessments forhazardous chemicalswere conducted.

In 2024, the Company made signi?cant progress in chemicals safety management

ObjectiveProgress in 2024100%

of management and operational personnel involved with hazardouschemicals to participate in hazardous chemicals safety training

AchievedAchievedRegular safety inspections of hazardous chemical storage areas (daily checks byworkshop managers and weekly checks by the hazardous chemicals managementdepartment)

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Building a Harmonious Society with People at the HeartSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Ful?lling Corporate Social Responsibility

Rural RevitalizationIn 2024, in active response to the national rural revitalization strategy, STL took concrete steps to support rural development. TheCompany signed a donation agreement with the Nanhu District Charity Federation of Jiaxing and the Jiaxing Agricultural TechnologyPromotion Foundation, donating RMB 200,000 in May 2024 to support agricultural technology promotion programs. This initiativehelps to enhance agricultural e?ciency, increase income for low-income rural populations, directly bene?ting 451 farmers, directlybene?ting an area of 1,382 acres, and contribute to the development of "new countryside".STL also organized a visit for party members to Sanxing Village to study cases of the "Common Prosperity 101" initiative. Duringthe visit, the party members purchased goods from local orchards and souvenir shops, opening new market channels for localagricultural products. By leveraging consumption-driven support, STL actively promoted high-quality agricultural and subsidiaryproducts, making a tangible contribution to local economic growth.Furthermore, STL has established "Common Prosperity Workshops" and "Common Prosperity Workspaces" to provide employmentopportunities for rural communities. These initiatives speci?cally recruit 978 surplus laborers from surrounding rural areas, helpingpoverty-stricken individuals from Yunnan, Guizhou, Sichuan, Gansu, and Ningxia rise above hardships.

STL remains committed to social responsibility, actively engagingin diverse public welfare initiatives, with focuses on assistancefor individuals in need, educational support, rural revitalization,medical assistance, environmental protection, civilized societybuilding, and disaster relief. The Company has established anamesake charitable foundation and launched the "MotherYang Charity Initiative" as its philanthropic brand. Through the"Charity+" model, the Company continues to give back to society.

STL proactively responds to the call for common prosperity by establishing "Common Prosperity Workshops" and "CommonProsperity Workspaces" within the Company. These initiatives specifically recruit employees from underdeveloped regions,providing extensive job opportunities to individuals from poverty-stricken households in areas such as Yunnan, Guizhou, Sichuan,Gansu, and Ningxia. This approach not only helps impoverished people increase their income but also comprehensively enhancestheir skills and abilities through training and career development support. By the end of the reporting period, the averagemonthly wage of "Common Prosperity Workshop" participants increased from RMB 7,000 to RMB 9,000, a year-on-year growthof approximately 28.6%. This initiative creates a win-win situation by increasing income for rural residents, improving e?ciencyfor the Company, and fostering common prosperity. It highlights STL's active role in promoting social equity and coordinatedeconomic development.

Building "Common Prosperity Workshops"Case

STL organized

volunteering activities,bene?ting over10,000individuals, with totaldonations, both monetary and in kind,amounting to RMB

42.24

million

In 2024

Volunteering ActivitiesIn 2024, STL took on environmental missions by actively participating in volunteering activities for environmental protection. In speci?c,the Party and Labor Union O?ce played a leading and exemplary role in organizing various volunteering activities.On the National Tree Planting Day, STL partnered with the Nanhu District Agricultural and Rural Water Affairs Bureau, Nanhu District Urban LawEnforcement Bureau CPC Committee and Youth League Committee to jointly host the "Greening Our Communities, Protecting the Environment"event. Participants worked together to plant trees, contributing to a greener landscape and promoting ecological development.In addition, STL held its 2024 Walking Challenge at the Jiaxing Botanical Garden, with over 200 employees participating. This event notonly promoted physical well-being but also embodied the principles of green and low-carbon development.

Paired-up assistance to help students achieve their dreamsSTL has deepened its paired-up assistance and joint development model with Jiaxing University, Jiaxing Xiuzhou High School,among other schools and institutions. From providing ?nancial assistance to students in need to establishing teaching awardsand creating charity libraries, STL fully supports students' growth, o?ering solid support to help them complete their studiesand realize their dreams.In October 2024, the STL Charity Foundation held a scholarship award ceremony at the Mother Yang Charity Library at JiaxingXiuzhou High School, encouraging students to pursue their dreams. A total of 10 students received scholarships, including 4students from Xinjiang.

Educational SupportIn terms of educational support, STL actively fulfills its corporate social responsibility by continuously contributing toeducational development. Through various initiatives, the Company supports di?erent student groups, promoting educationalequity and progress.

In addition, the Company organized sixvolunteer litter-picking activities and visits tonursing homes, supporting environmentalprotection and social welfare with concreteefforts. During the environmental activities,our volunteers visited communities andparks, helping maintain a clean and beautifulenvironment. These efforts not onlyraised public awareness of environmentalprotection but also contributed to improvingthe local community environment. Duringthe nursing home visits, our volunteersplayed games with the elderly, helped cuttheir hair and clean their living spaces, andimproved their overall living conditions.These activities brought joy and warmthto the elderly and contributed to building amore harmonious society.

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Building a Harmonious Society with People at the HeartSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

"The Way to Fish" Education Program

"Give a man a ?sh, and he eats for a day; teach him to ?sh, and he eats for a lifetime", guided by this philosophy, STL has built a "1+4" systemfocused on "assistance for disadvantaged students, donations of school facilities, incentives for outstanding students, and rewards for keyteachers", aimed at bridging educational gaps between Western China and the rest of the country.In June 2024, Yang Yuying, Party Secretary of STL, led a team to visit Maixi Township School in Ruo'ergai, Sichuan, andpersonally delivered charitable supplies, including blankets and down jackets, to the children and encouraged them to pursuetheir dreams. This charitable initiative was praised and reported by platforms such as Xuexi Qiangguo and Zhejiang Workers'Daily. In December, the Company donated direct drinking water machines, computers, and other supplies to the Shaya SocialWelfare Institute in Xinjiang through the Jiaxing Command Center for Assistance to Xinjiang, improving the learning conditionsfor students and the o?ce environment for teachers. In 2024, the Company has established paired partnerships with over 1,500students in Western China.In December 2024, the Companyjoined forces with Shaya SocialWelfare Institute in Xinjiang to holda charitable donation event. Theevent was attended by Yang Yuying,Party Secretary and Vice Chairmanof STL, Chen Bin, Deputy Directorof the Jiaxing Command Center forAssistance to Xinjiang, leaders fromthe Shaya County Civil A?airs Bureau,and Yang Yazhen, Chairman of theSTL Public Welfare Foundation. Theleaders gave away computers, books, and other educational and sports supplies to 70 children at the welfare institute, with atotal value exceeding RMB 55,000.

Caring for Special Needs StudentsSTL places a high emphasis on students with special needs. The Company has established "STL Classes" in collaboration withschools to provide specialized education for children with autism. We also care for the parents of autistic children by invitingprofessional teachers to offer guidance and support. Additionally, we donated psychological counseling equipment andsupplies to the Nanhu District Counseling Center for Minors, helping to create a positive environment for special needs studentsand demonstrating our commitment to humanitarian care.

Medical AssistanceAs a company committed to social responsibility, STL has always been dedicated to healthcare development. In 2024, the Companydonated advanced medical equipment worth RMB 2 million to the First Hospital of Jiaxing through the Jiaxing Charity Federation.This donation aimed to enhance the quality of medical services, allowing more patients to bene?t from high-quality diagnosticsand treatment made possible by advanced equipment, thereby o?ering STL's contribution to the healthcare sector.Assistance for Individuals in NeedSTL extends its care from within the Company to the wider community, maintaining a steadfast focus on vulnerable groups.In addition, STL actively reaches out to individuals with disabilities, elderly people who have lost their only child, families facing ?nancialhardships, and those impoverished by illness, o?ering not only material assistance but, more importantly, emotional support and comfort.The Company regularly expands the scope of its charitable outreach, deepens its engagement at the grassroots level, and extends its reachso that more people in need can experience warmth and support. Civilized Society BuildingSTL actively fulfills its social responsibilities. The Company has established a Party Member Volunteer Service Team and the "MotherYang Charity Initiative" to carry out various volunteering activities that promote a civilized society. From library services and advocatingpedestrian-friendly crossings to environmental initiatives and community convenience services, STL contributes comprehensively tobuilding a civilized society.Under the "Mother Yang Charity Initiative", STL has set up care stations across 19 villages and communities in Nanhu District, working incollaboration with local authorities to ensure full coverage. The stations provide free cold drinks in summer and hot ones in winter forsanitation workers, couriers, delivery riders, and other groups, along with regular material assistance to disadvantaged individuals in need.On June 26, 2024, the "Mother Yang Charity Initiative" joined multiple government departments in Nanhu District for a charitable donationin Ruo'ergai, Sichuan, which marks the ?fth consecutive year of the initiative's paired partnership with local schools. This time, donationsincluded 336 down jackets, over 300 sets of school supplies, and 248 sets of dormitory bedding. Following the donation ceremony at MaixiTownship Central School, Mother Yang encouraged the children to pursue their dreams and spread kindness. She also visited families ofstudents with special needs, o?ering warmth and support.

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Building a Harmonious Society with People at the HeartSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Appendices

OutlookThose who act consistently succeed; those who advance persistently arrive. 2025 marks the ?nal year of the 14thFive-Year Plan and a pivotal year for outlining the 15th Five-Year Plan. In the face of new circumstances and tasks,STL remains at the forefront of the transformation in the chemical industry toward high-end, intelligent, andgreen development. We will work to cultivate "new quality productive forces" through technological innovation,continue investing in the high-end chemical new materials industry, and focus on pioneering sectors that willshape the future. We are ?rmly committed to advancing industrial innovation from "1 to 10" and from "10 to 100",actively addressing the challenges and opportunities presented by China's goals to peak carbon emissions andachieve carbon neutrality. We will stay agile in response to development trends in the global chemical industry,adjusting our strategic planning and product portfolio to sustain steady growth and seize new opportunitiesin this rapidly evolving market. With a more open mindset and stronger actions, we aim to expand our globalpresence and establish ourselves as a company known for its excellent products, recognized for its brandreputation, respected by society and held in pride by employees, thereby joining the ranks of the world's leadingchemical enterprises.

Honors in 2024

Award/HonorLevelGranted By

Industry LeadershipInclusion in the Shenzhen 100 IndexIndex

Shenzhen Stock Exchange (SZSE) and ShenzhenSecurities Information Co., Ltd.Top 100 Value Companies Listed on the Main Board

List/Rankings

Securities TimesChina's Top 100 New Materials Companies

List/Rankings

Hurun Research Institute

Innovation Leadership

Forbes China Top 50 Most Innovative Companies

List/Rankings

Forbes ChinaNational 2023 Industrial InternetPilot Demonstration 5G Factory

List/Rankings

Ministry of Industry and Information Technology

of the People's Republic of ChinaSelected for Zhejiang's Second Batch of "Eagle Enterprises"

List/Rankings

Economy and Information TechnologyDepartment of ZhejiangIncluded in the "2024 Zhejiang Arti?cial Intelligence Application

Scenarios List"

List/Rankings

Economy and Information TechnologyDepartment of Zhejiang

ESG LeadershipFirst Batch of "Green Leading Enterprises"

NationalRecognition

China Quality Certi?cation CenterOutstanding Sustainability Practices of Listed Companies

List/Rankings

China Association for Public CompaniesZhejiang's Top 100 ESG Performance Listed Companies

List/Rankings

Zhejiang Corporate Social ResponsibilityPromotion Association and China Chengxin Green

Finance Technology (Beijing) Co., Ltd.CSR China Top 100

List/Rankings

Responsibility 100 | CSR China Education Award

Organizing Committee"Rural Revitalization and Social Development" ESG Action Award

List/Rankings

Responsibility 100 | CSR China Education Award

Organizing CommitteeCailianshe ESG Profound Awards – Environmental (E) Pioneer

Enterprise Award

List/Rankings

CailiansheCRHC Cup ? ESG Golden Bull Award

List/Rankings

China Securities Journal, China Reform Holdings

Corporation Ltd. (CRHC), Nantong Municipal

People's GovernmentAona Award for Enterprises with Sustainable Development

Contribution

List/Rankings

Social Responsibility Conference Organizing

CommitteeChina Enterprise ESG "Golden Responsibility Award" – Best

Responsibility Progress Award

List/Rankings

Sina FinanceEY Outstanding Sustainable Development Enterprise of the Year

List/Rankings

EY Greater ChinaKPMG China Second ESG·50 List – Outstanding Social Pioneers

List/Rankings

KPMG

109108

AppendicesSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Index of Reporting Guidelines

Index of GRI Indicators

IssueItem of DisclosureChapter Index

GRI 3: Disclosures onMaterial Topics

3-1 Process to determine material topicsMaterial Topics Analysis3-2 List of material topicsMaterial Topics Analysis3-3 Management of material topicsMaterial Topics AnalysisGRI 201: EconomicPerformance

201-1 Direct economic value generated and distributedAbout STL201-2 Financial implications and other risks and opportunities due toclimate change

Addressing Climate Change201-3 De?ned bene?t plan obligations and other retirement plans

Safeguarding Employee Rights and Bene?ts201-4 Financial assistance received from government/GRI 202: Market Presence

202-1 Ratios of standard entry level wage by gender compared tolocal minimum wage

Building a Harmonious Society withPeople at the Heart202-2 Proportion of senior management hired from the localcommunity

Building a Harmonious Society withPeople at the HeartGRI 203: IndirectEconomic Impacts

203-1 Infrastructure investments and services supported

Ful?lling Corporate Social Responsibility203-2 Signi?cant indirect economic impacts

Ful?lling Corporate Social Responsibility

GRI 204: ProcurementPractices

204-1 Proportion of spending on local suppliersAdvancing Responsible ProcurementGRI 205: Anti-corruption

205-1 Operations assessed for risks related to corruptionCompliant and Stable Operations

205-2 Communication and training about anti-corruption policies

and procedures

Compliant and Stable Operations

205-3 Con?rmed incidents of corruption and actions takenCompliant and Stable Operations

GRI 206: Anti-competitiveBehavior

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

monopoly practices

Compliant and Stable OperationsGRI 207: Tax

207-1 Approach to taxStrengthening Risk Prevention and Control207-2 Tax governance,control, and risk managementStrengthening Risk Prevention and Control207-3 Stakeholder engagement and management of concerns relatedto tax

Stakeholder Engagement207-4 Country-by-country reporting/GRI 301: Materials

301-1 Materials used by weight or volume/301-2 Recycled input materials usedStrengthening Environmental Management301-3 Reclaimed products and their packaging materialsStrengthening Environmental Management

GRI 302: Energy

302-1 Energy consumption within the organizationFocusing on Low-Carbon Strategies302-2 Energy consumption outside of the organizationFocusing on Low-Carbon Strategies302-3 Energy intensityFocusing on Low-Carbon Strategies302-4 Reduction of energy consumptionFocusing on Low-Carbon Strategies302-5 Reductions in energy requirements of products and servicesFocusing on Low-Carbon Strategies

GRI 303: Water andE?uents

303-1 Interactions with water as a shared resourceFocusing on Low-Carbon Strategies303-2 Management of water discharge-related impactsWater Resources Management303-3 Water withdrawalWater Resources Management303-4 Water dischargeWater Resources Management303-5 Water consumptionWater Resources Management

IssueItem of DisclosureChapter Index

GRI 2: General Disclosures

2-1 Organizational detailsAbout STL2-2 Entities included in the organization's sustainability reportingAbout This Report2-3 Reporting period, frequency and contact pointAbout This Report2-4 Restatements of information/2-5 External assuranceNot Applicable2-6 Activities, value chain and other business relationshipsStakeholder Communication2-7 Employees

Building a Harmonious Society with People at the Heart2-8 Workers who are not employees

Building a Harmonious Society with People at the Heart2-9 Governance structure and compositionCorporate Governance2-10 Nomination and selection of the highest governance bodyCorporate Governance2-11 Chair of the highest governance bodyCorporate Governance2-12 Role of the highest governance body inoverseeing the management of impacts

Corporate Governance2-13 Delegation of responsibility for managing impactsCorporate Governance2-14 Role of the highest governance body in sustainability reportingESG Management System2-15 Con?icts of interestStakeholder Communication2-16 Communication of critical concernsStakeholder Communication2-17 Collective knowledge of the highest governance bodyESG Management System2-18 Evaluation of the performance of the highest governance bodyCorporate Governance2-19 Remuneration policies

Building a Harmonious Society withPeople at the Heart2-20 Process to determine remuneration

Building a Harmonious Society withPeople at the Heart2-21 Annual total compensation ratio

Building a Harmonious Society with

People at the Heart2-22 Statement on sustainable development strategyESG Management System2-23 Policy commitments/2-24 Embedding policy commitments/2-25 Processes to remediate negative impactsStrengthening Risk Prevention and Control2-26 Mechanisms for seeking advice and raising concernsStakeholder Communication2-27 Compliance with laws and regulationsCompliance Development2-28 Membership associationsPromoting Industry Development2-29 Approach to stakeholder engagementStakeholder Communication2-30 Collective bargaining agreementsAdvancing Responsible Procurement

111110

AppendicesSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

IssueItem of DisclosureChapter Index

GRI 304: Biodiversity

304-1 Operational sites owned, leased, managed in, or adjacent to,protected areas and areas of high biodiversity value outside protectedareas

Biodiversity Protection304-2 Signi?cant impacts of activities, products, and services onbiodiversity

Biodiversity Protection304-3 Habitats protected or restoredBiodiversity Protection304-4 IUCN Red List species and national conservation list specieswith habitats in areas a?ected by operations

Biodiversity Protection

GRI 305: Emissions

305-1 Direct (Scope 1) GHG missionsFocusing on Low-Carbon Strategies305-2 Energy indirect (Scope 2) GHG emissionsFocusing on Low-Carbon Strategies305-3 Other indirect (Scope 3) GHG emissions）/305-4 GHG emissions intensityFocusing on Low-Carbon Strategies305-5 Reduction of GHG emissionsFocusing on Low-Carbon Strategies305-6 Emissions of ozone-depleting substances (ODS)/305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other signi?cantair emissions

Focusing on Low-Carbon Strategies

GRI 306: Waste

306-1 Waste generation and signi?cant waste-related impactsStrengthening Environmental Management306-2 Management of signi?cant waste-related impactsStrengthening Environmental Management306-3 Waste generatedStrengthening Environmental Management306-4 Waste diverted from disposalStrengthening Environmental Management306-5 Waste directed to disposalStrengthening Environmental Management

GRI 308: SupplierEnvironmental Assessment

308-1 New suppliers that were screened using environmental criteriaAdvancing Responsible Procurement308-2 Negative environmental impacts in the supply chain andactions taken

Advancing Responsible ProcurementGRI 401: Employment

GRI 401-1: New employee hires and employee turnoverSafeguarding Employee Rights and Bene?ts401-2 Bene?ts provided to full-time employees that are not providedto temporary or part-time employees

Safeguarding Employee Rights and Bene?ts401-3 Parental leaveSafeguarding Employee Rights and Bene?tsGRI 402: Labor/Management

Relations

402-1 Minimum notice periods regarding operational changesSafeguarding Employee Rights and Bene?ts

GRI 403: Occupational Health

and Safety

403-1 Occupational health and safety management systemRobust Safety Practices403-2 Hazard identi?cation, risk assessment, and incidentinvestigation

Robust Safety Practices403-3 Occupational health servicesRobust Safety Practices403-4 Worker participation, consultation, and communication onoccupational health and safety

Robust Safety Practices403-5 Worker training on occupational health and safetyRobust Safety Practices403-6 Promotion of worker healthRobust Safety Practices403-7 Prevention and mitigation of occupational health and safetyimpacts directly linked by business relationships

Robust Safety Practices403-8 Workers covered by an occupational health and safetymanagement system

Robust Safety Practices403-9 Work-related injuriesRobust Safety Practices403-10 Work-related ill healthRobust Safety Practices

IssueItem of DisclosureChapter IndexGRI 404: Training andEducation

404-1 Average hours of training per year per employeeGrowing Together with Employees404-2 Programs for upgrading employee skills and transitionassistance programs

Growing Together with Employees404-3 Percentage of employees receiving regular performance andcareer development reviews

Growing Together with EmployeesGRI 405: Diversity andEqual Opportunity

405-1 Diversity of governance bodies and employeesSafeguarding Employee Rights and Bene?ts405-2 Ratio of basic salary and remuneration of women to menSafeguarding Employee Rights and Bene?tsGRI 406: Non-discrimination

406-1 Incidents of discrimination and corrective actions takenSafeguarding Employee Rights and Bene?tsGRI 407: Freedom ofAssociation and CollectiveBargaining

407-1 Operations and suppliers in which the right to freedom of

association and collective bargaining may be at risk

/GRI 408: Child Labor

408-1 Operations and suppliers at signi?cant risk for incidents ofchild labor

Safeguarding Employee Rights and Bene?tsGRI 409: Forced orCompulsory Labor

409-1 Operations and suppliers at signi?cant risk for incidents offorced or compulsory labor

Safeguarding Employee Rights and Bene?ts

GRI 410: Security Practices

410-1 Security personnel trained in human rights policies orprocedures

Robust Safety PracticesGRI 411: Rights ofIndigenous Peoples

411-1 Incidents of violations involving rights of indigenous peoples/GRI 413: LocalCommunities

413-1 Operations with local community engagement, impact

assessments, and development programs

Ful?lling Corporate Social Responsibility

413-2 Operations with signi?cant actual and potential negative

impacts on local communities

Ful?lling Corporate Social ResponsibilityGRI 414: Supplier SocialAssessment

414-1 New suppliers that were screened using social criteriaAdvancing Responsible Procurement414-2 Negative social impacts in the supply chain and actions takenAdvancing Responsible ProcurementGRI 415: Public Policy415-1 Political contributions/GRI 416: Customer Healthand Safety

416-1 Assessment of the health and safety impacts of product andservice categories

High-Quality Products and Services416-2 Incidents of non-compliance concerning the health and safetyimpacts of products and services

High-Quality Products and Services

GRI 417: Marketing andLabeling

417-1 Requirements for product and service information and labelingHigh-Quality Products and Services417-2 Incidents of non-compliance concerning product and serviceinformation and labeling

Strengthening Risk Prevention and Control417-3 Incidents of non-compliance concerning marketingcommunications

Strengthening Risk Prevention and ControlGRI 418: Customer Privacy

418-1 Substantiated complaints concerning breaches of customerprivacy and losses of customer data

Strengthening Risk Prevention and Control

113112

AppendicesSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

IFRS S2 Recommended Disclosure IndexESG Performance Indicators*

*In 2024, the Company further re?ned its data collection process, adjusted the scope of certain data collection to improve disclosure, and revised somepreviously disclosed data.

IndicatorUnit202420232022

Governance Performance

Operating incomeRMB'00 million

456.48414.87370.43Year-on-year growth in operating income%

10.0312.0029.71Total pro?tRMB'00 million

70.1853.6834.48Net pro?t attributable to listed company shareholdersRMB'00 million

60.7247.8930.96Total assetsRMB'00 million

683.05645.82597.64Net assets attributable to the parent companyRMB'00 million

302.86254.65221.60General Meeting of Shareholderstime

Meetings of the Board of Directorstime

Meetings of the Board of Supervisorstime

Special audit projectsproject222630Anti-corruption audit projectsproject30//Business ethics trainingTotal hours of traininghour120//Total sessions of trainingsession160//Number of directors trainedperson9//Percentage of directors trained%100//Number of senior managers trainedperson1,200//Percentage of senior managers trained%100//Total number of employees trainedperson5,057//Percentage of employees trained%100//Business ethics auditsAudit projectsproject30//Audit sessionssession12//Audit coverage%67//

Social Performance

Number of R&D personnelperson1,2751,271992Bachelor's degreeperson1,0201,151882Doctorate or master's degreeperson255120110R&D investmentRMB'00 million

17.5116.2612.41Year-on-year growth in R&D expenses%

7.6931.0515.14Ratio of R&D expenses to operating income %

3.843.923.35

Recommended DisclosureRelated Chapter

Governance

Disclose the governance body(s) (which can include a board, committee or equivalent bodycharged with governance) or individual(s) responsible for oversight of climate-related risks andopportunities.

ESG Management SystemDisclose the management's role in the governance processes, controls and procedures used tomonitor, manage and oversee climate-related risks and opportunities.

ESG Management System

Strategy

Disclose the climate-related risks and opportunities that could reasonably be expected toa?ect the entity's prospects.

Addressing Climate ChangeDisclose the current and anticipated e?ects of those climate-related risks and opportunitieson the entity's business model and value chain.

Addressing Climate ChangeDisclose the e?ects of those climate-related risks and opportunities on the entity's strategyand decision-making, including information about its climate-related transition plan.

Addressing Climate ChangeDisclose the effects of those climate-related risks and opportunities on the entity's financialposition, financial performance and cash flows for the reporting period, and their anticipatedeffects on the entity's financial position, financial performance and cash flows over theshort, medium and long term, taking into consideration how those climate-related risks andopportunities have been factored into the entity's ?nancial planning.

Addressing Climate ChangeDisclose the climate resilience of the entity's strategy and its business model to climate-related changes, developments and uncertainties, taking into consideration the entity'sidenti?ed climate-related risks and opportunities.

Addressing Climate Change

RiskManagement

Disclose the processes and related policies the entity uses to identify, assess, prioritize andmonitor climate-related risks.

Strengthening RiskPrevention and ControlDisclose the processes the entity uses to identify, assess, prioritize and monitor climate-related opportunities, including information about whether and how the entity uses climate-related scenario analysis to inform its identi?cation of climate-related opportunities.

Addressing Climate ChangeDisclose the extent to which, and how, the processes for identifying, assessing, prioritising andmonitoring climate-related risks and opportunities are integrated into and inform the entity'soverall risk management process.

Addressing Climate Change

Metrics and

Targets

Disclose information relevant to the cross-industry metric categories./Disclose industry-based metrics that are associated with particular business models, activitiesor other common features that characterize participation in an industry.

/Disclose targets set by the entity, and any targets it is required to meet by law or regulation, tomitigate or adapt to climate-related risks or take advantage of climate-related opportunities,including metrics used by the governance body or management to measure progress towardsthese targets.

Addressing Climate Change

115114

AppendicesSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

IndicatorUnit202420232022

Number of new suppliers company13414396Number of new suppliers screened using social criteria company958965Number of new suppliers screened using environmentalcriteria

company12412173Supplier trainingsession

Number of suppliers that received trainingcompany2,249236178Percentage of suppliers that received training%8897Number of suppliers that were auditedcompany363228Supplier audit coverage%

1.401.301.10Number of suppliers required to make recti?cationcompany333227Number of national standards the Companyparticipated in developing

item

Number of industry standards the Companyparticipated in developing

item

Number of social organization standards the Companyparticipated in developing

item

Number of employeesperson5,0574,6883,964

By gender

Maleperson4,2213,8813,256Femaleperson836807708

By age group

30 or belowperson2,1901,8251,56730-50 person2,5312,4822,035Above 50person336381362Labor contract signing rate%100100100Social insurance coverage rate%100100100Employee training coverage rate%100100/Total number of employees trainedperson5,0574,6883,964

Training attendance by genderMaleperson4,2213,8813,256Femaleperson836807708

Training attendance by job level

General employeesperson4,8354,4913,760Middle managementperson184164164Senior managementperson383340CPC membersperson594493499Total person-times of employees trainedperson-time239,014198,618159,099

IndicatorUnit202420232022

Patent ?led

item27383107Patent granted

item1359893Accumulative number of valid patentsitem438320234

Training on intellectual property protection

Training sessions conductedsession

Employees trainedperson-time804933Total hours of training providedhour

365.53Product recalltime

Value of recalled productsRMB'0,000

Percentage of products recalled%

Number of mock product recallstime

Training on product quality and safety

Training sessions providedsession43236Total number of employees trainedperson-time1,076825148Total hours of training providedhour

70.543.516Coverage of ISO 9001 Quality Management Systemcerti?cation

% operational site100100/Customer satisfaction%100100100Complaint resolution rate%100100100Total number of supplierscompany2,5602,5102,432North Chinacompany157146132East Chinacompany2,0432,0382,005South Chinacompany595147Central Chinacompany807671Southwest Chinacompany272319Northwest Chinacompany272421Northeast Chinacompany827673Hong Kong, Macao, and Taiwan, Chinacompany151210Overseascompany706454Number of suppliers with contracts that includeenvironmental, labor, and human rights clauses

company2,3312,2102,073Percentage of suppliers with contracts that includeenvironmental, labor, and human rights clauses

%918885Number of suppliers that signed the IntegrityAgreement

company2,5602,2432,122Percentage of suppliers that signed the IntegrityAgreement

%1008987

117116

AppendicesSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

IndicatorUnit202420232022

Environmental Performance

Total investment in environmental governanceRMB'0,000130,957170,465142,857Time invested in environmental governancehour61,32074,40062,130Person-times of employees trained inenvironmental protection

person-time17,79245,54831,255Hazardous waste generatedtonne125,125.82139,198.8385,672.92Non-hazardous waste generatedtonne61,105.387,650.108,486.05Total solid wastetonne186,231.20146,848.9394,158.97Solid waste intensitytonne per 10,000 tonne products

0.0150.0150.015Nitrogen oxides (NO

x) emissions

tonne per 10,000 tonne products

0.6160.5540.776Sulfur dioxide (SO

) emissionstonne per 10,000 tonne products

0.0670.1060.098Volatile organic compounds (VOCs) emissionstonne per 10,000 tonne products

0.2520.2570.256Particulate matter (PM) emissionstonne per 10,000 tonne products

0.0430.0540.066Chemical oxygen demand (COD) emissions

tonne per 10,000 tonne products

2.2452.0772.016Ammonia nitrogen emissions

tonne per 10,000 tonne products

0.0260.0240.009Total organic carbon (TOC) emissions

tonne per 10,000 tonne products

0.1610.0960.123Total GHG emissionstCO

e6,185,5815,853,1773,817,387GHG intensitytCO

e per tonne products

0.5020.6270.624Direct energy consumption

Gasolineliter598,995.39546,684.92454,166.89Dieselliter297,574.26283,915.29315,887.76Natural gascubic meter277,614,769.39279,519,427.80143,216,462.10Ethanetonne63,151.1838,684.7794,656.25Indirect energy consumptionPurchased electricityMWh5,276,353.195,046,442.254,136,774.79Purchased steamGJ13,559,044.6613,299,954.164,637,155.50Total energy consumptiontce1,440,464.121,281,585.65838,737.09Energy intensitytce per 10,000 tonne products1,169.601,129.911,127.99Clean energy consumption

Purchased electricity from new energy sourcesMWh765,023.99 517,585.28469,828.48Photovoltaic power generationMWh1,772.911,887.40104.64Other clean energy consumptionMWh40,00000Total water consumption million tonne

741.60566.74489.20Water intensity

million tonne per 10,000 tonne

products

0.600.500.66Recycled and reused water

10,000 tonnes70,278.5852,692.3745,851.81Percentage of recycled and reused water%

94.7692.9793.72Reduction in wastewater discharge10,000 tonnes

281.8741.4911.12Environmental monitoring/84116115Total packaging materials purchasedtonne

54.0059.0434.08

IndicatorUnit202420232022Total hours of traininghour436,544456,659516,154Average hours of training per personhour8697130Total expenditure in employee trainingRMB'0,000

422.10285.30283.90Percentage of employees regularly assessed forperformance and career development

%100100100Investment in supporting employees' educationaladvancement

RMB'0,000

10.7014.003.90Occupational health checkup rate%100100/Work-related fatalitiesperson

Lost days due to work-related injuriesday

Lost hours due to work-related injurieshour

Occupational disease health checkup coverage rate%100100100Total investment in occupational health and safetyRMB'0,000

968.83212.73166.47Investment in work injury insuranceRMB'0,000

343.74270.02283.49Work injury insurance coverage rate%100100100Investment in work safety insuranceRMB'0,000

106.5083.3136.11Work safety insurance coverage rate%100100100Number of emergency drillstime948816426Number of employees who participated in emergencydrills

person17,52713,8118,366Number of occupational health and safety trainingsessions

session628343224Total number of employees trained in occupationalhealth and safety

person-time34,84825,64912,280Total hours of occupational health and safety traininghour58,70055,62227,180Total investment in community welfareRMB'0,0004,223.58//

Community welfare investment by area

HealthcareRMB'0,000

202.91//EducationRMB'0,000

74.10//Disaster reliefRMB'0,000

20.00//Rural revitalizationRMB'0,000

35.67//Other (e.g. assistance for people in need, charitabledonations)

RMB'0,0003,890.90//

Community welfare investment by typeMonetary donationsRMB'0,0003,977.53//In-kind donationsRMB'0,000

246.05//Number of participants in volunteering activitiesperson660//Total hours of volunteering servicehour94,380//Total person-times of blood donation since 2012person-time1,4951,304/Total volume of blood donated since 2012ml477,600412,300/Jobs provided by "Common Prosperity Workshops" and"Common Prosperity Workspaces"

person978920/Average monthly salary at "Common ProsperityWorkshops" and "Common Prosperity Workspaces"

RMB≥9,000≥7,000/

1-2The data for 2022 and 2023 has been adjusted, increasing the number of software copyright patents.3-7During the reporting period, the Company introduced new equipment to produce raw materials that previously had to be sourced externally. As akey step toward industry chain integration, this has enhanced production efficiency and product quality and strengthened the Company's marketcompetitiveness. The Company is actively advancing the construction and optimization of supporting wastewater and exhaust gas treatment facilities tominimize environmental impact, continuously improving water e?ciency in related processes, and ensuring the coordinated development of its businessand environmental protection.

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AppendicesSatellite Chemical Co., Ltd. 2024 Environmental, Social, and Governance Report

Address: No. 196 Fuqiang Road, Nanhu District, Jiaxing,Zhejiang Province, ChinaPostal Code: 314050Telephone: （86）573-82229096E-mail: esg@weixing.com.cnO?cial website:https://www.stl-chem.com

Satellite Chemical Co., Ltd.