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2024 Sustainability Report

2024Sustainability Report

Shandong Iron and Steel Co., Ltd.

2024 Sustainability Report

CONTENTS

Safeguarding Development and Strengtheningthe Foundation for Modern Governance

Transition to Green Development, Paintinga Scroll of Blue Waters and Clear Skies

Uniting and Building a Harmonious SocietyTogether

Upholding Our Original Aspiration and Consolidating the Party-Building Foundation 22Standardizing Operations and Optimizing the Governance System 24Integrated Planning and Deepening ESG Management 27Taking Precautions and Strengthening Risk Control Management 31Advocating Virtue, Fulfilling Promises, and Adhering to Business Ethics 35Operating with Integrity and Optimizing Tax Management 37

Guided by the Dual-Carbon Strategy, Optimizing Climate Management 42Strengthening the Foundation and Deepening Environmental Governance 46Maximizing Energy Efficiency and Enhancing Resource Utilization 52Saving Water and Protecting Our Source of Life 57Recycling and Enhancing Solid Waste Disposal 59Harmonious Coexistence, Safeguarding Biodiversity 61

Innovation-Driven, Unleashing Development Momentum 66High-Quality Products to Establish the Market and Build a Series of Brands 70Win-Win Cooperation, Deepening Supply Management 74Excellent Quality, Forging Customer Value 78Information Security: Building a Solid Data Barrier 84People-Oriented, Building a Better Home Together 85Safety First, Protecting Occupational Health 95Caring for Society, Fulfilling Responsibilities 101Appendix:

ESG Performance Indicators Form 103GRI Index 109Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of ListedCompanies—Sustainability Report (Trial) Index 116Feedback Form 117

Focus 3Intelligent Manufacturing, Cultivating aNew Engine for Steel Development 18

About This Report 4Message from theChairman 6Exploring Shandong Steel 10Recognition and Honors 13

Focus 1Change for Survival, Opening up NewPaths for Growth and Strength 14

Focus 2

Green Leadership, Buildinga New Ecosystem of ModernSteel Industry 16

About This Report2024 Sustainability Report

About This Report

Reporting Scope

This Report covers Shandong Iron and Steel Co., Ltd. and its subsidiaries, branches, directly affiliatedorganizations, and directly affiliated plant divisions.

Release CycleThis Report is compiled annually and is generally published before the end of April in the following year.Data SourcesAll data contained in this Report originate from official documents and statistical reports of Shandong Iron and Steel Co.,Ltd. This report is published in both Chinese and English versions. In the event of any discrepancy, the Chinese versionshall prevail.Reporting Standards and References◎GRI Standards by the Global Sustainability Standards Board (GSSB)◎United Nations 2030 Sustainable Development Goals (SDGs)◎China Corporate Sustainability Report Guidelines (CASS-ESG 6.0)◎Guidelines No. 4 of Shanghai Stock Exchange for Self-Discipline Supervision—Compilation of Sustainability Report◎Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial)◎Guidelines on ESG Indicator System for Shandong Provincial State-owned Listed Companies ([2024] Document No.3)◎Guidelines for the Special Report on Environment, Society and Governance (ESG) for Iron and Steel Enterprises by the ChinaIron and Steel Association

Report acquisition method

You may download the electronic version of this Report from: The relevant announcements posted by Shandong Steel (StockCode 600022) on the Shanghai Stock Exchange official website: http://www.sse.com.cn; or The website of SISG http://www.shansteelgroup.com/ > Listed Companies>Shandong Steel (600022.SH) section.

Description of TitlesFor ease of presentation and reading: "Shandong Iron and Steel Co., Ltd." is also referred to as "Shandong Steel,""the Company," or "we." "Shandong Iron and Steel Group Co., Ltd. is also referred to as "SISG" or "the Group."Reporting PeriodFrom January 1, 2024 through December 31, 2024. For consistency and comparability, some content may extendbeyond the aforementioned timeframe.

Esteemed readers:

This 2024 Sustainability Report by Shandong Iron and Steel Co., Ltd. adheres to the principles of objectivity,standardization, transparency, and comprehensiveness. It systematically presents Shandong Iron and Steel Co.,Ltd.'s concepts, actions, practices, and achievements in 2024 regarding environmental, social, and corporategovernance.

Shandong Steel

April 2025

Message from the Chairman2024 Sustainability Report

production and quality, and substantial improvements in asset quality have collectively enhanced efficiency across humanresources, production, finance, and asset management. Through this transformation for survival, we have sparked vitality andaccumulated momentum for continued empowerment.Green and Smart, Accelerating Progress. Upholding the concept of "low-carbon, clean operations, and a green ShandongSteel," we prioritize climate change mitigation, deepen environmental management, strictly control air emissions, reinforcesolid waste disposal, safeguard biodiversity, and firmly maintain environmental baselines. We have further consolidated ourexisting A-level performance in overall environmental protection. Both production bases passed national Green Factory re-evaluations, and the Rizhao Base became the first in the province's steel industry to be officially recognized as a "Double-CarbonBest Practice Energy-Efficiency Benchmarking Demonstration Enterprise." The digital and intelligent steel initiative has gainedfull momentum, advancing integrated intelligent-manufacturing upgrade projects. Both production bases have accelerated thelaunch of the PLMS, PSCS, and iEQMS systems, while the Rizhao Base has fully rolled out the standard finance system and theIMC system. These green, digital, and intelligent transformations have further empowered the Company to achieve higher-qualitydevelopment.Technology-Driven Innovation, Unleashing New Quality. We vigorously implement a "talent-driven, collaborative innovation,and intelligence-based market strategy," adhering to a "high-end drive, technology leadership" approach. Aligned with "high-end, intelligent, green, and efficient" development goals, Shandong Steel continuously enhances scientific and technologicalinnovation as well as value-creation capabilities. Centering on bottlenecks affecting on-site process continuity, cost optimization,quality stability, and performance improvement, the Company intensifies R&D efforts and advances process optimization—boosting efficiency and reducing costs. Focusing on evolving market demands, we concentrate on the R&D of high-quality, high-end products. By steadily increasing both R&D investment and the share of R&D expenses, we remain at the forefront of the steelindustry in patent innovation capability.Talent-Focused, Building Strength for Future Breakthroughs. Upholding the principle of "people-oriented care and employeewell-being," we have vigorously advanced talent-first and talent-strengthening strategies, concentrating on forming a high-level talent hub and constantly improving our talent-development systems and mechanisms. Shandong Steel innovates trainingmodels, establishing collaborative "Industry-University-Research-Application" mechanisms. We have also deeply implementedthe "Youth Advancement Plan" and "300 Young Talents Initiative," refining routine processes for selecting, nurturing, andengaging young professionals. Meanwhile, the Company has optimized employees' career development pathways, ensuring clearprogression routes in management, technical, and skilled roles—fully unleashing talent innovation and creativity. By combininginclusive services with targeted assistance, we have continually enhanced employees' sense of belonging, happiness, andfulfillment.Moving Forward Together, Building a Happy Shandong Steel. We uphold high standards and quality in conducting Party disciplinestudy and education, fostering a robust atmosphere of learning, understanding, and abiding by discipline. Standing side by sidewith employees, the Company leverages the "Happiness, Harmony, and Practical Projects" approach to continually upgrade "threerooms, one hall, and one center" facilities (encompassing staff lounges, study rooms, activity rooms, a canteen, and a healthcenter). We vigorously implement the "Health Escort, Union Support" action plan to enhance employee well-being. Meanwhile,Shandong Steel continues to strengthen investor relations, promptly addresses stakeholders' concerns, actively promotes marketvalue management, and strives to deliver returns to shareholders and all stakeholders. Acting with honesty and sincerity, weadvance strategic cooperation in all directions and make full use of social resources, creating a harmonious and stable businessenvironment along with a safe and fulfilling workplace. By ensuring that the outcomes of reforms and development are morefairly shared by employees and stakeholders, we work as one, hand in hand, to forge a bright future for the Company.2025 is both the closing year of the 14th Five-Year Plan and the year of planning for the 15th Five-Year Plan, as well as a pivotalyear for Shandong Steel to reverse losses and achieve a transformative breakthrough. Succeeding in these year-long effortsis of great significance, carries heavy responsibilities, and holds an honorable mission. We will continue upholding Xi JinpingThought on Socialism with Chinese Characteristics for a New Era as our fundamental guiding ideology, thoroughly implementingthe guiding principles from the 20th CPC National Congress and the 2nd and 3rd Plenary Sessions of the 20th CPC CentralCommittee. Resolutely focused on the fundamental goal of "turning losses into profits," the Company follows the "high-end,intelligent, green, and efficient" development direction and upholds operating principles such as "produce per orders, ensuremarginal efficiency, secure profitable returns, and guarantee cash flow." We take proactive measures, press forward, and striveto be the first to break through, fully deepening our transformation for survival. Through an "extreme" mindset in execution,Shandong Steel is determined to create new performance, decisively win the battle to return to profitability, and firmly establisha culture of returning value to shareholders. By highlighting value creation, continuously enhancing our investment value andshareholder returns, and achieving better operating and market performance, we aim to secure dignity, respect, and a brighterfuture. Together, we seek to open up a new chapter of high-quality development and build a modern steel enterprise distinguishedby robust Party leadership, efficient governance, leading operational efficiency, powerful growth momentum, a renowned brandimage, and substantial well-being for our employees.

In 2024, confronted with internal and external pressures, Shandong Steel remains guided by Xi Jinping Thought on Socialismwith Chinese Characteristics for a New Era, fully, accurately, and comprehensively implements the new development philosophy,and firmly seizes the major opportunity of China Baowu's strategic investment and Baoshan Iron & Steel Co., Ltd.'s equityparticipation in the Company's Rizhao segment. Anchored in the core objective of "turning losses into gains" and focused on"transformation for survival," we have turned crises into opportunities and tackled challenges head-on. As a result, the Companyachieved remarkable progress in corporate governance, green and low-carbon, environmental protection, technology andinnovation, talent development, and social welfare—maintaining stable growth in the face of adversity.Robust Governance Assurance. We adhere to Party leadership as the driver of development, fully implement the "two in-depthintegrations," focus on the Company's development strategy, and engage in scientific planning, management, and operations.Shandong Steel has established and refined its institutional framework, standardized decision-making and managementprocedures, and strengthened Board development to achieve diversity, independence, and professionalism among Boardmembers. We are committed to deepening ESG governance practices, strengthening ecological and environmental protection,actively fulfilling our social responsibilities, and continuously advancing the modernization of our corporate governance systemand governance capabilities. Meanwhile, the Company has improved its risk prevention and control system, intensified thebuilding of a law-based enterprise, and promoted the Company's long-term, stable, and sustainable development. In 2024, wereceived the "Excellent Practical Case of Board of Directors of Listed Companies" award, ranked among the top 20 in governanceat the 2nd Guoxin Cup "ESG Golden Bull Awards," and was rated as an ESG AAA-level enterprise among China's steel companies.Change to Survive, Gain Momentum and Empower. Reform of corporate systems and mechanisms has advanced in depth, withthe "1+6+N" transformation initiatives now in effect. Shandong Steel has gradually established organizational and institutionalframeworks featuring "centralized consistency, streamlined structures, efficient processes, and clear responsibilities." Byintegrating the Company's headquarters with the Jinan Steel City Base, the number of departments has been reduced by 52%.Further streamlining of personnel, deep-level reforms in procurement and marketing, centralized and consistent control over

Message from the Chairman

Chairman of Shandong Iron and Steel Co., Ltd.

Xie Qi

Shandong Iron and Steel Co., Ltd., headquartered in the GangchengDistrict of Jinan, Shandong Province, is a state-controlled large-scaleintegrated steel enterprise. In December 2011, SISG's two listed steelcompanies-Jinan Iron and Steel Company Limited (Jigang) and LaiwuSteel Company Limited (Laigang)-were consolidated into Jinan Ironand Steel Company Limited through a share swap. In February 2012,the company was renamed Shandong Iron and Steel Co., Ltd., and inMarch, the stock abbreviation was changed to Shandong Steel (stockcode: 600022). In December 2023, China Baowu strategically investedin SISG, acquiring a 49% equity stake. Meanwhile, Baoshan Iron &Steel Co., Ltd. (Baosteel) acquired a 48.6139% stake in ShandongIron & Steel Rizhao Co., Ltd., initiating a dual-participation (“DoubleParticipation”) operating model.Shandong Steel has a complete production process system coveringcoking, raw materials processing, sintering, pelletizing, ironmaking,steelmaking, and rolling, with an overall high level of equipment.Key facilities include two 5,100 m? blast furnaces, one 3,800 m? blastfurnace, four 210-ton converters, two 4,300 mm plate production lines,one 3,500 mm steckel mill, one 2,050 mm hot rolling line, one 2,030mm cold rolling line, and production lines for medium and large-sizedspecial steel bars and H-beams—all of which are at the forefront ofthe domestic industry. Currently, Shandong Steel operates two majorproduction bases: the Steel City Base in Jinan and the Rizhao High-end Steel Production Base on the coast (collectively referred to as theRizhao Base), with a total crude steel production capacity of about 15.8million tonnes.

Company Overview

Driven by scientific and technological innovation, Shandong Steel is committed to delivering efficient, integrated solutionsfor iron and steel materials. We continuously strengthen the upgrading and innovation of these materials, building a productportfolio encompassing five main categories-beams, plates, hot and cold rolled products, special steel products, and rebar-thusrealizing diversified development. As an important steel production base in China, the Company's products are characterizedby high strength, high-tech, and environmental friendliness, and have won numerous national and industry awards. We havesuccessfully developed high-performance products such as anti-large deformation pipeline steel and hot-rolled dual-phase steelfor automobiles, filling significant gaps in the steel industry. Our products are widely used in automobiles, petroleum, railroads,highways, bridges, construction, electric power, machinery, shipbuilding, household appliances, and other fields, and areexported to dozens of overseas countries and regions.

Multiple ProductsShandong Steel actively promotes informationization, intelligent technologies, and greener production, upgrading and revampingtraditional steel operations. We make full use of 5G, the industrial Internet, artificial intelligence, and other advanced technologiesto accelerate the transition to intelligent manufacturing. This includes realizing automatic control over the entire convertersteelmaking process via smart systems, remote operation and maintenance, industrial robots, and other IT applications—facilitating deeper integration of industrial development with corporate governance. The Company adheres to the concept ofdeveloping a circular economy alongside technological energy conservation and emissions reduction. Through continuousinnovation, we further enhance structural, technological, and managerial energy saving, deepen hierarchical and circularresource utilization, and have achieved remarkable results in energy conservation, emissions reduction, and circular economyinitiatives. Our key operating units have successively received multiple honors from relevant ministries and industry associations,including "National Environment-friendly Enterprise," "National Greening Model Unit," "National Pilot Demonstration Enterpriseof Promoting Energy Conservation and Emission Reduction through the Integration of Informatization and Industrialization,""National Top Ten Enterprises for Comprehensive Utilization of Resources," "China Iron and Steel Industry Clean Productionand Environment-friendly Enterprise," and "Green Factory." We are also among the first batch of national pilot enterprises forthe circular economy, a national water-saving benchmarking enterprise, one of the first "double-carbon" best practice energy-efficiency benchmarking demonstration plant cultivation enterprises recognized by the China Iron and Steel Association, and aGrade-A Environmental Performance Enterprise (FullScope) in Shandong Province.

2024 Sustainability ReportExploring Shandong Steel

Section SteelSpecial SteelCold-Rolled Coil

RebarPlateHot-Rolled Coil

Integrate into the steelecosystem and establisha new benchmark forgreen and intelligenttransformation in thesteel industry

Implement thetransition fromold to new growthdrivers, optimizingenergy, process,and technologicalstructuresDevelop China'spremier coastalproduction base forhigh-quality sheetand coil products,leading in scale andefficiency

Optimize inland basesand adjust productstructures, building atop-tier special steelproduction base

Implement the new development concept, setting a model for

green urban steel mill development

Coastal

Inland

DevelopmentStrategy

Exploring Shandong Steel

Company Milestones

To become the most competitive steel enterprise innorthern China

Drive new momentum for thesteel ecosystem and providestrong support for the high-quality development of themanufacturing industry

Co-creation, Co-advancement,Co-win

High-quality productsdrive market success,and integrity shapesthe futureSteadfast as amountain, everinnovating

Development Strategy

Shandong Steel upholds its founding mission of serving and strengthening the nation through steelmaking. Rooted in Shandong,we extend our reach across China and beyond, standing at the forefront of industry transformation. In a dynamic marketenvironment, the Company has turned crises into opportunities, steadily advancing while embracing reform and innovation. Byactively pioneering a new path of green, intelligent, and low-carbon development, we have forged a high-quality developmentpathway that aligns with the trends of the times, reflects our operational realities, and embodies innovation and vitality.

CorporateCulture

2000

2004

2006

2011

2012

On February 27, 2012:

Officially renamed as"Shandong Iron andSteel Co., Ltd."On December30, 2011: Mergerwith Jigang GroupcompletedOn April 24, 2006:

Shareholdingstructure reformcompletedOn June 29, 2004:

Listed on theShanghai StockExchangeOn December29, 2000: Officialregistration of theCompany

2013

2017

2019

2021

2023

In March 2013: RizhaoHigh-end Steel BaseProject approvedby the NationalDevelopment andReform Commission

In July 2017:

Comprehensiveshutdown of JigangGroup's primarysteel production

In 2019: Full operationcommenced at RizhaoHigh-end Steel BaseIn 2019: Laiwu Branchlaunched intelligentupgrading and renovation

In November 2021:

32.26% equity of

Jigang Group wastransferred toShandong GuohuiGroup at no cost

In December 2023, ChinaBaowu strategicallyinvested in SISG, acquiringa 49% equity stake.Meanwhile, BaoshanIron & Steel Co., Ltd.(Baosteel) acquireda 48.6139% stake inShandong Iron & SteelRizhao Co., Ltd., initiatinga dual-participation(“Double Participation”)operating model.

2024 Sustainability ReportExploring Shandong Steel

1011

2024 Sustainability ReportRecognition and Honors

1213

Shareholders'MeetingBoard ofSupervisors

Direct-AffiliatedEntities

Directly Managed

Plants

Majority-ownedSubsidiaries

Strategy Planning and ESG

CommitteeNomination CommitteeBudget, Compensation andAppraisal CommitteeRisk Management and

Audit Committee

Board Secretary

PartyCommittee

ExecutiveManagement

Operations ImprovementDepartmentOrganization and HRDepartmentPlanning and TechnologyDepartmentFinancial ManagementDepartmentInvestment ManagementDepartmentRisk and ComplianceDepartmentEnergy and EnvironmentalManagement DepartmentTrade Union / CommunistYouth League Committee /Publicity Department /Corporate CultureDepartment

Tianyuan Gas / Huanyou Chemical /Regional sales subsidiaries, etc.Shanxin Software Company Ltd.Shandong Iron and Steel Group Rizhao Co., Ltd.

Discipline Inspection andInspection Leading GroupOffice

Board of Directors

Organizational Structure

Energy and Power PlantPlate and Strip PlantBar MillBeams PlantSpecial Steel PlantSteelmaking PlantIronmaking PlantCoking PlantLogistics and Transportation DepartmentSafety and Security DepartmentEquipment Management DepartmentManufacturing Management DepartmentHuman Resources Reserve CenterFinancial Services CenterSISG Research Institute / Technology CenterMarketing HeadquartersProcurement Center

Party Committee Office /General Office /Board Office /Supervisory Board Office

Recognition and Honors

Wind ESG Rating: A Sino-Securities Index ESG Rating: AA

ESG Rating

Awards and Honors

2024 Excellent Practice Case of the Board of Directors of Listed Companies Top 20 in Governance at the 2nd Guoxin Cup ESG Golden Bull Awards AAA-Level Enterprise for Enterprise's Development Index of Steel(EDIS) 2024 ESG AAA-Level Enterprise among Chinese Steel EnterprisesAmong the First Batch of "Double-Carbon" Best-Practice Energy-EfficiencyBenchmarking Demonstration Plants Recognized by the China Iron and SteelAssociation (CISA)National Pilot Demonstration Enterprise for Promoting Energy Conservation andEmission Reduction through the Integration of Informatization and Industrialization National Top Ten Enterprises for Comprehensive Utilization of Resources Clean Production and Environment-Friendly Enterprise in China's Iron and Steel Industry

In 2024, facing a complex and volatile market environment, Shandong Steel embraced a spirit of self-reform andimplemented the “1+6+N” transformation framework to pursue survival through change. The Company coordinatedmanagement upgrades at both the Steel City and Rizhao bases, with a strong focus on driving the fundamentaltransformation of the Steel City base. Through systematic reforms, Shandong Steel achieved a comprehensive shifttoward modernization, intelligence, and green development, embarking on a new journey toward survival, strength,and sustainable growth.

Proposition and Construction of the Change-for-Survival SystemConfronted with the severe challenges of a long cycle, production reduction, and industrial restructuring in the steelsector, we introduced a managerial theme of "change for survival" in the first half of 2024. By holding managementseminars, the Company achieved consensus throughout the organization and established the "1+6+9+N" change-for-survival system, centered on "1 overall goal, 6 competitive capabilities, 9 change paths, and N supporting projects."

Shandong Steel regards turning losses into profits as the primary goal in its effort to survive throughtransformation, striving to attain profitability and boost its industry position via managerial reform and costoptimization. This goal not only reflects the Company's keen insights into the current market environment butalso demonstrates our unwavering confidence in future development.

To fulfill the overall goal of turning losses into profits, the Company focuses on enhancing six competitivecapabilities—service, product, cost, efficiency, innovation, and culture. By centering on the key elementswithin these capabilities and taking multiple measures, we continually strengthen our comprehensive corecompetitiveness.

To deepen the change-for-survival system, the Company has defined nine transformation paths- operations, humanresources, marketing, procurement, manufacturing, equipment, investment, energy, and logistics. By breaking these pathsdown into detailed tasks and refining relevant measures, we convert the capabilities of the change-for-survival system intogenuine value creation.

One General Goal Turning Losses into Profits and Enhancing Industry Position

Six Competitive Capabilities Bolstering Core Competitiveness in All Aspects

N Supporting Projects Practical Levers for Concrete Outcomes

To implement the nine transformation paths in detail, Shandong Steel has launched N supporting projects. Adhering torigorous task objectives, project-based targets, and comprehensive project listings—alongside rolling advancement anddynamic management—these initiatives ensure effective on-the-ground execution. By 2024, 117 such projects had beeninitiated, spanning management reform, cost reduction, and efficiency enhancement, thus becoming pivotal drivers forapplying the change-for-survival system.Looking ahead, we will persist in reinforcing and propelling the change-for-survival system, firmly tracking and deliveringconcrete results through supporting projects. By leveraging synergies with Baoshan Iron & Steel Co., Ltd. (Baosteel), the Companywill conduct a comprehensive review of its current weaknesses in efficiency enhancement, quality stability, product operations,procurement resources, and cost reduction. Key collaborative projects will be identified to drive High-quality Development andembark on a new journey for Shandong Steel's future success.

Establish a new servicesystem featuring stablequality, timely delivery, in-depth coordination, andhigh user satisfaction.

Concentrate on core productslike structural steel, specialsteel, and plate, aiming tobuild China's leading brandand secure a top position inthe industry.

Achieve lower productioncosts and improvedprofitability throughprocurement synergyand manufacturingenhancement.

Service UpgradingProduct OptimizationCost Control

Implement centralized, consistentmanagement and focus onproducing items with the highestmarket share and technicalstandards, thereby maximizingproduction efficiency and laborproductivity.

Strengthen managementinnovation, technologicalinnovation, and company-wideinnovation to expand influenceand bolster value creationacross the organization.

Carry forward ShandongSteel's heritage of hard workand fortitude, deepening theconstruction of an enterpriseculture characterized by strongexecution, continuous learning,and lean management.

Efficiency EnhancementInnovation-DrivenCultural Development

Strengthen supply assurance, cost reduction, and efficiency improvements within the logisticssystem, thus bolstering the Company's service, efficiency, and cost-management capabilities.

Restructure the organizational framework, align supporting systems, promote business-financeintegration, and enhance decision-making and value creation.Optimize staffing, expand external employment, perfect employee development channels, and reformthe compensation system.Adopt a user-centric approach, innovate marketing service mechanisms, refine processing anddistribution models, and boost user satisfaction.Integrate regional resource channels, build efficient procurement mechanisms, and ensure a high-quality supply of bulk raw materials and spare parts.Reinforce optimal production organization and best-process management, enhancing quality stabilityand contract fulfillment.Integrate Baosteel's new equipment management model, establishing an all-staff, all-system, high-efficiency equipment management framework.Focus on upgrading structural steel and special steel products, reconfigure responsibilities andworkflows, and develop a centralized, efficient investment management model.Promote efficient energy generation, transmission, transformation, and utilization to reduce costsand elevate energy efficiency.

Focus 1

Change for Survival, Opening up New Paths for Growth and Strength

Nine Paths to Transformation Concrete Measures for Tangible Results

Human ResourcesReformOperational Reform

Marketing ReformProcurement ReformManufacturing ReformEquipment ReformInvestment ReformEnergy ReformLogistics Reform

N

1 General Goal:

Turning Losses into Profits and Enhancing Industry Position6 Competitive Capabilities:

Service, Product, Cost, Efficiency, Innovation-Driven, and Culture

9 Paths to Transformation:

Operational, Human Resources, Marketing, Procurement,Manufacturing, Equipment, Investment, Energy and Logistics

+Supporting Projects:

Currently implemented projects with long-termsignificance.

GoalCompetitiveCapabilitiesTransformationPaths

ojects

1415

Greener future at the Rizhao Base. As Shandong Province's first National AAA Tourist Attraction in the steel sector, the RizhaoBase creatively established a "steel + ecology" educational tourism route, turning industrial tourism into a fashionable newcity attraction. Centered around Songhuwan Park, the scenic area uniquely integrates steel production with coastal ecologicallandscapes, creating China's first seaside park affiliated with a steel enterprise, attracting over100,000 visitors annually.The Rizhao Base has fully embedded green, low-carbon practices into its core business philosophy. Since 2024, it has achievedhistorically best levels in comprehensive energy consumption per tonne of steel, carbon dioxide emissions per tonne of steel,residual energy recovery per tonne of steel, and gas recycling utilization- solidifying its leading position within the industry. Theseachievements further reinforce the Base's confidence, determination, and capability to pursue high-quality green and low-carbondevelopment. Meanwhile, the Rizhao Base has successfully passed the authoritative verification and public disclosure as one ofthe China Iron and Steel Association’s "Best Practice Benchmark Demonstration Enterprises in Energy Efficiency for Dual CarbonGoals," marking a milestone breakthrough in its green and low-carbon transformation efforts.

Green transformation at the Steel City Base. The Steel City Base, located in the Gangcheng District of Jinan, is a placehistorically dedicated to steelmaking, carrying both the legacy of industrial history and the hope for a sustainablefuture. Since the initiation of projects aimed at replacing old growth drivers with new ones, the Steel City Base hassuccessfully established a highly efficient production system characterized by large-scale equipment, optimizedresource utilization, and reduced energy consumption. Notably, the intelligent material yard, which is ShandongProvince's largest membrane-structured raw materials shed, covers an area of280,000square meters. Equippedwith advanced intelligent equipment operating around the clock, it achieves automated, intelligent batching.Additionally, by utilizing the Eagle Eye monitoring system and ultra-fine mist dust suppression technology, the Baseeffectively reduces dust emissions by 4,760tonnes annually. These initiatives not only ensure cleaner productionprocesses and significantly reduced energy consumption but have also notably improved the company’s environmentalperformance.

Shandong steel has always prioritized environmental protection and is committed to forging a new paradigm ofharmonious coexistence between industrial tourism destinations and urban environments. By successfully creatingthe National AAA Tourist Attraction as a model, and using iron and steel sightseeing factories as a blueprint, theCompany vividly demonstrates the process of transforming iron ore into steel, showcases the charm of industrialcivilization, and serves as a bridge connecting modern and traditional steel mills. It has thus become a standardtextbook of "how steel is made" in the new era.

NationalAAA TouristAttraction

To enhance greening and landscaping in the production area, the Steel City Base adopted a multi-layered plantingstructure combining trees with diverse shrubs and ground covers, greatly enriching the landscape's diversity. Throughupgrading approximately100,000square meters of existing green space and newly adding87,000square metersof greenery, the plant environment has substantially improved. Consequently, the Steel City Base has receivedrecognitions such as the "National Green Development Benchmark Enterprise in the Steel Industry" and "AdvancedMetallurgical Greening Unit."

Focus 2

Green Leadership, Building a New Ecosystem of Modern Steel Industry

1617

We actively promote intelligent manufacturing, focusing on both unmanned and low-manpower initiatives, acceleratingcentralized control center construction, and elevating working procedure intelligence and labor productivity all-round. Theannual growth rate of robot applications has exceeded 170%, while the Company's intelligent-manufacturing performancescore in the steel industry has risen by 36.35%.Shandong Steel regards digitalization, intelligent manufacturing, and green development as key engines tocontinuously drive corporate transformation and high-quality growth. Since releasing the outline for "Digital andIntelligent Shandong Iron and Steel" in 2020, the Company has benchmarked against industry leaders and activelydeveloped a comprehensive framework for IT and intelligent manufacturing. At the same time, we have vigorouslypromoted the intelligentization of production lines, significantly boosting automation levels through "machinereplacement" and other innovative projects. In 2024, backed by the synergistic support of Baosteel, the Company willlaunch a series of IT upgrade and renovation initiatives, further accelerating our digital and intelligent transformation.

Shandong Steel is actively expanding into new frontiers of the information industry, creating new avenues for valuecreation. Shanxin Software Company Ltd. ("Shanxin Software"), a subsidiary of Shandong Steel, specializes in intelligentmanufacturing and big data applications, developing advanced intelligent solutions to facilitate the integration of next-generation information technologies into industrial operations, thereby driving digital transformation in the steel andother industries.Shanxin Software maintains robust technological capabilities, holding 37 provincial- and ministerial-level awards, 106patents, and 105 software copyrights. The company has achieved international certifications such as CMMI Level 3 andpossesses multiple professional qualifications, including information system integration, consultation services for IT andindustrial integration, security engineering, and electronics and intelligent engineering contracting. To date, ShanxinSoftware has implemented over 750 automation production lines and information systems across various sectors,including steel, nonferrous metals, chemical engineering, machinery, and energy conservation and environmentalprotection, serving clients in more than 20 provinces, municipalities, and autonomous regions across China. Additionally,the company has successfully expanded into international markets such as India and Poland, demonstrating strong globalcompetitiveness.Guided by its mission to "Become a leader in industrial software," Shanxin Software is accelerating its digital industrylayout, providing essential support for the intelligent upgrading of the manufacturing sector.

In December 2024, the first phase of the energyand power system at the Company's Jinan SteelCity Base Intelligent Control Center officially wentonline, marking a major leap from the previous"one-post, one-stop" management model towardan era of intensive and intelligent administration.Supported by features such as data-driven analyticsand automated reporting, Steel City Base is poisedto reach new heights in energy utilization efficiency,providing robust support for our green and low-carbon development goals.

Steel City Base Intelligent Control Center Goes Online—A New Chapter in Energy Management

Shanxin Software Powers the Information Industry and Explores New Avenues of Value Creation

Case

Case

Construction of Key Application Scenarios at Steel City Base (2024)

Following the "1+N" strategy—one core control center plusmultiple specialized controlcenters—Steel City Base hascompleted projects such asthe Intelligent Control Centerand the Coking CentralizedControl Center. By centrallymanaging multiple processes,labor productivity andoperational synergy havemarkedly improved, effectivelyrealizing the goals of "factoryintelligence, managementinformatization, andmanufacturing refinement."

The coke plant's basementnow features a newly installedrobot inspection system. Flue-inspection robots run alonga U-shaped track in the cokeoven's waste-gas channel, whileadditional robots traverse railsalong the gas-exchange valvesin the basement, achievingan unmanned, intelligentinspection process.

The raw material yard at theironmaking plant has undergonean environmental enclosureupgrade and intelligenttransformation, set up a 5Gnetwork, built an intelligentcontrol center and collaborationplatform, and developedmultiple smart applications(e.g., intelligent O&M, smartvideo, intelligent scheduling,inventory management, logisticsnavigation, automated reporting,and a management cockpit).Nine large vehicles have alsobeen upgraded for unmannedoperation and multi-viewremote control.

Centralized ControlCenter Construction

Production Line Robots5G Application

Focusing on nine major projects- regional centralized control, digital workshop upgrades, and robotapplications-covering the intelligent transformation of medium and heavy plate heat treatment, onlineintelligent analysis in coking, centralized refining-process control, deployment of automatic samplingrobots in the 4300mm Wide and Heavy Plate Production Line, and implementation of centralizedcontrol systems. These efforts aim to enhance coordination across the production chain, improvemanufacturing efficiency and management effectiveness, and build an efficient, intelligent factory.

Rizhao Base has formulated an intelligent manufacturing development plan for 2025-2030, spanningseven major processes, five specialized areas, and relevant infrastructure. This plan includes 230projects, setting clear 6-year development goals and directions.

Intelligent Factory Construction

Intelligent Manufacturing Planning

By benchmarking against advanced steel enterprises, Rizhao Base has established an L2 modelresearch team, completed 17 AI-related supporting projects, and simultaneously cultivated a robust AItalent pipeline.AI Exploration

Focus 3

Intelligent Manufacturing, Cultivating a New Engine for Steel Development

Construction of Key Application Scenarios at Rizhao Base (2024)

1819

2024 Sustainability ReportUpholding Our Original Aspiration and Consolidating the Party-Building Foundation

2021

Good governance is like sunshine: it fills every corner ofan organization with warmth and vitality, allowing everyparticipant to feel fairness and hope.

—Peter Drucker, The Practice of Management

Safeguarding Development andStrengthening the Foundation

for Modern Governance

Upholding Our Original Aspiration and Consolidating the Party-Building Foundation Standardize Operations and Optimize the Governance System Holistic Planning to Deepen ESG Management Staying Proactive to Reinforce Risk Control Advocating Virtue, Fulfilling Commitments, and Upholding Business Ethics Operating with Integrity and Optimizing Tax Management

Governance

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Case: Implementing a Five-Year Party Member Education and Training Initiative

Good corporate governance is the cornerstone for sustainable development.Shandong Steel continuously refines its governance system, strengthensopen and transparent disclosures, enhances investor communication,firmly practices ESG concepts, improves risk and compliance managementeffectiveness, and adheres strictly to business ethics—thereby laying a solidbasis for stable operations and long-term growth.

Upholding Our Original Aspiration and Consolidating the Party-Building FoundationShandong Steel regards Party leadership as the "root" and "soul" of enterprise development. We follow Xi Jinping Thoughton Socialism with Chinese Characteristics for a New Era, uphold the "two consistent approaches," and emphasize the "twodeep integrations," ensuring our Party Committee provides direction, manages the big picture, and guarantees effectiveimplementation. We integrate Party-building into our core operations, transforming its political advantages into governance anddevelopmental strengths to promote high-quality growth through robust Party building.

Consolidating the SystemShandong Steel has established and refined a set of Party-building systems, clearly defining the scope of "Three Critical and OneSignificant" matters. We require prior Party Committee deliberation for key decisions, manage important matters via checklists,and strictly implement major-matter reporting. Moreover, we fully apply "Party-building inclusion in the Articles of Incorporation"across the Company and its subsidiaries—clarifying the Party organization's responsibilities, institutional setup, operationalmechanisms, and fundamental guarantees—thus solidifying the Party's lawful position in the corporate governance structure.

Strengthening the OrganizationWe attach great importance to grassroots Party organization building, refining anintegrated, well-structured system with strong execution. By expanding the "FiveHearts and Four Transformations

" Party-building brand, the Company deeplyaligns Party-building with production and operations, forming a "one PartyCommittee, one distinctive feature; one branch, one brand" pattern. By year-end 2024, we had nurtured 87 outstanding Party-building brands, with 80.8% ofParty branches rated four-star or above. The Company earned an "OutstandingParty-Building Award" in the listed companies' "Golden Quality" selection,and the "Five-Heart Benefiting Everyone" brand at Rizhao Base was honoredby Shandong SASAC as an exemplary Party-building brand among provincialenterprises.

Safeguarding Development and Strengtheningthe Foundation for Modern Governance

The Company launched a "Five-Year Action Plan" for educating and training Party members, annually holding Partybranch secretary classes and Party-member demonstration classes, organizing "Let Me Deliver the Party Lecture,"and establishing a "Four Lectures" system (secretary-led, role-model-based, hero-demonstrated, member-initiated).In 2024, we ran 98 centralized training sessions (7,700+ participants), arranged 87 Party Committee theory-groupstudies, 81 special training classes, 1,170 "Three Meetings and One Class," 556 themed Party Days, and 3,300+counseling and discussion activities—significantly boosting overall Party-member quality.

Strong Ideological Foundation

We strictly enforce the Party Committee's theoretical study group system, unwaveringlyapplying Xi Jinping Thought on Socialism with Chinese Characteristics for a New Erato consolidate our political convictions. We also built a provincial theory education baseand a team of skilled lecturers to align situational and task-based education with thecorporate mission—galvanizing employees toward transformation and responsibility.Additionally, the Company undertakes a broad range of cultural events with tangibleresults. In recognition, we were named an "Excellent Ideological and Political Work Unitin the National Metallurgical Industry (2023–2024)."

Excellent Ideological andPolitical Work Unit in theNational MetallurgicalIndustry (2023–2024)

Political Leadership

We prioritize political development first, strictly implementing the "First Agenda" learning mechanism to improve politicalorientation and capacity through the Party's innovative theories. We thoroughly carry out study and practice of Xi Jinping Thoughton Socialism with Chinese Characteristics for a New Era and Party discipline education, thereby strengthening Party members'ideals and faith, solidifying the "Four Consciousness," and resolutely upholding the "Two Upholds," making a clear political stancean essential hallmark of the Company.

1 Five Hearts and Four Transformations: The concept of Five Hearts and Four Transformations refers to five "heart-centered" projects—the CoreProject, Original Aspiration Project, Unity Project, People's Support Project, and Integrity Project—and four "transformations" in Party buildingfocused on scientific, systematic, intelligent, and continuously innovative practices.

outstanding Party-buildingbrands

80.8%

of Party branches ratedfour-star or above"Outstanding Party-building Award"Honored by Shandong SASAC asan exemplary Party-Building brandamong provincial enterprises

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Case: Advancing "1+X" Party-Building Co-Construction

Fostering Work StyleThe Company's Party Committee prioritizes strengthening work style, accelerating quality, speed, and efficiency acrossoperations—thus providing powerful impetus and security for high-quality development. We implemented the "Forging Steel-LikeWork Style, Carrying Out the New Development Strategy" Education and Practice Program, promoting a "High, Strict, Detailed, Real,Fast" ethos for all employees, and we continue "Four Rectifications, Four Improvements" and "Ten Discards, Ten Establishments."In June 2024, the Company's Party Committee released an Execution Culture Construction Implementation Plan, shaping anexecution culture of "execute resolutely without hesitation, rapidly without procrastination, and firmly without wavering."

Party GovernanceShandong Steel thoroughly enforces the comprehensive strictgovernance of the Party, establishing responsibility lists at eachlevel, building a "four-responsibility" collaborative mechanism,and consistently reinforcing accountability for Party oversight.We continue to deepen a "grand supervision" framework—covering joint oversight, information sharing, accountabilityinitiation, and performance appraisal—enabling precise,effective political oversight, comprehensive inspection, specialtargeted oversight, and progressive on-site supervision. We alsofocus on rectifying problems in key areas, firmly implementsigned integrity agreements, and advance a three-year planfor building a new-era integrity culture. Consequently, theCompany's political environment steadily improves.

Standardizing Operations and Optimizing the Governance System

Shandong Steel upholds the principles of compliance first, proactive action, honesty, and trustworthiness to effectively safeguardshareholder interests and continuously advance corporate value creation. We strictly abide by the Company Law of the People'sRepublic of China, the Securities Law of the People's Republic of China, the Code of Governance for Listed Companies, the RulesGoverning the Listing of Stocks on the Shanghai Stock Exchange, the Self-Regulatory Guidelines for Listed Companies of the ShanghaiStock Exchange (No. 1)–Standardized Operation, and other relevant regulations, as well as the Articles of Association of ShandongIron and Steel Co., Ltd. We have established a governance structure characterized by effective checks and balances and astandardized internal control system, fully protecting the legitimate rights and interests of the Company and all stakeholders, andpromoting healthy, stable, and sustainable development.

Improving the Governance System

Shandong Steel adheres to the "two consistent approaches," consolidating the fruits of the modern enterprise systemdemonstration project, and continuously refining a governance structure with clear rights/responsibilities, coordinated operations,and effective checks and balances. We have built a comprehensive, scientifically standardized, and efficient institutionalframework ensuring that the Shareholders' Meeting, Board of Directors, Supervisory Committee, and managerial layer each havedistinct powers and responsibilities while coordinating and fulfilling their duties.

Board DiversityShandong Steel actively advances Board diversity, aligned with the Company's development model and business needs. Wecomprehensively consider gender, age, education, experience, professional expertise, etc., to ensure diversity, independence,and compliance. By the end of 2024, the Company's Board comprised nine directors—1 female director, 1 employee director, 5executive directors (specialized in metallurgy, business administration, economics, law, statistics), and four independent directors(expertise in metallurgy, automation, accounting, applied economics, etc.).

We extensively organize Party member responsibility zones,pioneer posts, commando teams, research-topic sign-ups, andproblem-solving actions—pushing forward "1+X" co-constructionof Party-building. This fosters synergy between Party-buildingand core tasks, fully leveraging grassroots Party organizations'battlefortress role and Party members' exemplary status. Byend-2024, the Company had established 512 Party-memberpioneer posts, 442 responsibility zones, 264 commando teams,278 specialized research topics, and 325 pledged index items,solving 306 production and technical challenges.

? Shareholders' Meeting: This is the Company's highest authority, exercising its powers per thelaw. We treat all shareholders equally and fully safeguard their legitimate interests. In 2024,the Company convened

Shareholders' Meetings and reviewed

proposals. Each meetingcomplied fully with the Rules for Shareholders' Meetings of Listed Companies and the Company'sArticles of Association, combining on-site and online voting while inviting minority investorsto attend in person. Proposals relating to minority shareholders' rights were voted upon andtallied separately.? Board of Directors: As the Company's decision-making body, the Board consists of the StrategicPlanning and ESG Committee, Nomination Committee, Risk Management and Audit Committee,and Budget, Compensation, and Evaluation Committee. Except for the Strategic Planning andESG Committee, the other three committees are chaired by independent directors, who form amajority of these committees; notably, the Budget, Compensation, and Evaluation Committeeis entirely composed of independent directors. In 2024, we held

Board meetings considering

proposals, and organized

Strategic Planning and ESG Committee meetings,

NominationCommittee meetings,

Risk Management and Audit Committee meetings, and

Budget,Compensation, and Evaluation Committee meetings.? Board of Supervisers: This committee serves as the Company's supervisory body, overseeingfinances and supervising the legality of directors' and senior managers' duties, independentlyexercising its authority and promoting standardized operations. As of end-2024, the SupervisoryCommittee had three members (including one employee supervisor). In 2024, the Companyconvened

Supervisory Committee meetings, reviewing

proposals.

? Management: The management team handles daily operations and administration. It clarifies

Board decisions, assigns responsibilities, refines measures, ensures implementation, andstrengthens tracking of Board proposals, enabling effective execution. In 2024, we revised andrefined Rules of the General Manager's Office Meeting and List of Business Management DecisionMatters, deepened the General Manager's reporting mechanism to the Board, held

GeneralManager Office meetings, and tackled

topics—fully executing all

Board resolutions.

Shareholders'Meeting

Board ofDirectors

Board ofSupervisers

Management

2024 Sustainability ReportUpholding Our Original Aspiration and Consolidating the Party-Building Foundation

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Strengthening Market Value Management

? Disclosing Information in Compliance with the LawShandong Steel strictly adheres to laws, regulations, and listing provisions for listed companies, continuously perfecting itsinformation-disclosure regime. We revised policies such as the Management System for Information Disclosure Affairs, ManagementSystem for Reporting Significant Information, Working Rules for the Board Secretary, and Information Disclosure Management Systemfor Subsidiaries and Entrusted Companies, building a robust, sound, and well-structured system to ensure truthful, accurate,complete, fair, and timely, In 2024, the Company disclosed 131 announcements in a standardized manner on various resolutionsby the Board, Supervisory Committee, Shareholders' Meeting, as well as performance forecasts.

Repurchased96,170,452shares

0.8989%

of total capitalSISG had purchased additional389,627,601shares

3.64%

of total capital

Integrated Planning and Deepening ESG Management ESG Governance Framework

Shandong Steel regards ESG governance as an integral part of our overall corporate governance, establishing a three-tierESG governance structure comprising the Board of Directors, the Board's Strategic Planning and ESG Committee, and an ESGpromotion organization. By refining ESG's top-level design, we integrate governance, social, and environmental considerationsinto the Company's strategic planning and major decisions, thereby strongly supporting sustainable development. Among thesebodies, the Board of Directors serves as the highest responsible authority for ESG management and information disclosure.The Board's Strategic Planning and ESG Committee researches and guides ESG work; the ESG Promotion Leading Group offersdaily supervision and guidance; the ESG Coordination and Promotion Office organizes day-to-day ESG operations; and functionaldepartments and business units act as the executors of ESG tasks. For detailed responsibilities, please refer to the Company'sAnnouncement on the Proposal of ESG Governance Structure Construction (Announcement No. 2022-047).

ESG Governance Framework

In 2024, the Company further optimized the composition of its Boardof Directors and Supervisory Committee, completing re-elections andappointing new senior executives, including an employee director and afemale director, thereby reinforcing governance for deeper reforms andhigh-quality growth. We continuously track the latest regulatory rules,updating our system in a timely manner to keep governance lawful,compliant, and effective. During the reporting period, the Companyamended the Articles of Association twice, and formulated new systemsincluding the ESG Work Management System and the IndependentDirectors’ Special Meeting System. Additionally, the Company revised aseries of existing systems, such as Independent Directors’ Work System,Working Rules of the Board's Risk Management and Audit Committee,Management System for Reporting Significant Information, Working Rulesfor the Board’s Risk Management & Audit Committee, Major InformationReporting Management System, Board of Directors’ Budget ManagementPolicy, and Working Rules for the Board Secretary. Furthermore, theCompany compiled and finalized the List of Business ManagementDecision Matters to provide a comprehensive regulatory framework,ensuring standardized and efficient corporate operations.

? Strengthening Investor Relations Management

Shandong Steel consistently reinforces investor relations, expands valuecommunication, and fosters market recognition. Directors and senior managementactively engage investors and other stakeholders, listening to feedback and respondingpromptly. Meanwhile, we broaden communication via Shareholders' Meetings,performance briefings, site visits, hotlines, SSE e-Interaction, and official WeChat,enhancing both breadth and depth. In 2024, the Company hosted 20 performanceor investor exchange meetings (both online and offline) with 74 institutions (118participants), covering topics like corporate strategy, market outlook, operationalmeasures, double participation

synergy progress, procurement, marketing, pigiron costs, product benchmarking, etc. We replied to 104 investor queries on SSEe-Interaction and handled over 170 investor calls.

Since February 5, 2024, the Company hasimplemented share repurchase for 12months with an amount of RMB 200-400million yuan (inclusive). As of December31, 2024, we repurchased 96,170,452shares (0.8989% of total share capital)for RMB 120,385,235.92 (excluding stampduty, commissions, etc.).

Share RepurchaseIncreasing Shareholding

The Company actively coordinated with itscontrolling shareholder, SISG ("the Group"),which initiated a 12-month share increase ofRMB 500 million–1 billion on June 13, 2024.By December 31, 2024, SISG had accumulated389,627,601 shares of the Company, representing

3.64% of total capital, at a total cost of RMB

485,977,790.98 (excluding taxes, fees, etc.).

Performance or investorexchange meetingsReplied to

investorqueriesHandled over

investorcalls

Board of DirectorsStrategy Planning and ESG CommitteeESG Implementation Organization

ESG Implementation Leading GroupESG Coordination and Implementation OfficeFunctional Departments and Business Units

? Promoting Share Repurchases and Additional Holding

2 Double participation:China Baowu made a strategic investment in SISG, while Baosteel acquired a stake in SISG Rizhao Company.

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Stakeholder CommunicationShandong Steel views engagement with stakeholders as a vital part of ESG management, dedicated to creating enduring value.Guided by honesty, interaction, equality, and transparency, we continuously refine our stakeholder engagement mechanisms andcommunication channels, establishing both regular and occasional platforms to gather demands and feedback. The Companythen takes active measures to respond, ensuring all stakeholder expectations are understood and addressed.

Shandong Steel has issued the Working Rules for the Strategic Planning and ESG Committee of the Board of Directors, the ESG WorkManagement System, and related systems to optimize internal management mechanisms, clarifying the ESG governance concept,responsibilities, and working principles. The company has closely linked executive compensation to ESG factors such as safety,technological innovation, and risk management, further strengthening executives' sense of responsibility in the ESG field.To deepen understanding and practice of cutting-edge ESG theories, we hold ESG-related training sessions, participate in ESGstandard-setting and peer exchanges. In 2024, the Company participated in developing two industry group standards: Guidelinesfor Environmental, Social, and Governance(ESG) Special Reports of Iron and Steel Enterprises and Guidelines for Environmental, Social,and Governance(ESG) Assessment of Iron and Steel Enterprises, organized by the China Steel Development Research Institute,underscoring the Company’s leadership in driving the steel industry’s green transformation and sustainable development.Additionally, we conducted an ESG governance training session attended by management and mid-level or above leaders at theSteel City Base and Rizhao Base. The program deepened participants’ understanding of ESG principles, further strengthening theCompany’s sustainability capabilities.Looking ahead, Shandong Steel will further enhance ESG management by benchmarking the practice of sustainable developmentmanagement of first-class enterprises at home and abroad, improving relevant systems and metrics, and establishing an ESGreport review and enhancement mechanism that better leverages reporting to promote management improvements. We will alsoproactively meet stakeholder concerns, continually demonstrating our "non-financial statement" credentials.

StakeholderKey ConcernsCommunication Channels and Responses

Shareholders & Investors

? Corporate governance? ESG governance? Stakeholder communication? Economic and financial performance? Anti-bribery and anti-corruption

? Shareholders' Meetings? Information disclosure? Investor communication sessions? Performance briefings? On-site research? Other investor channels

Employees

? Compensation & benefits? Democratic management? Employee care & support? Career development & training? Occupational health & safety

? Meetings & training? Optimizing compensation & benefits? Enhancing promotion mechanisms? Trade unions & employee congresses? Employee assistance? Rich cultural & sports activities? Intranet, bulletin boards, WeChat, etc.? Reporting channels

Customers

? Product quality and Customer service? Innovation? ESG governance? Green product R&D? Environmental actions & measures? Climate change response? Anti-bribery & corruption

? Quality management? Exchange visits? Official media platforms? Customer satisfaction surveys & improvement

programs

? "Three Ones" new service model? QCDVS customized services? Co-building tech innovation centers? Customer complaint channels

Suppliers

? Materials & packaging? Supplier management? Supply chain security? ESG governance? Fair treatment for SMEs? Anti-bribery & corruption

? Supplier audits/assessments? Supplier management? Exchange visits? Supplier training

Government Departments& Regulators

? Occupational health & safety? Climate change response? Environmental management? Emissions trading? Green actions & measures? Anti-bribery & corruption? Anti-monopoly & fair competition

? Compliance with laws & policies? Participation in major projects & policy

proposals

? Government & regulatory meetings? Information disclosure? On-site surveys/inspections? Energy conservation & pollution control

Community & Public

? Social welfare? Climate change response? Wastewater discharge? Clean production? Air emissions? Waste disposal? Green actions & measures? Stakeholder communication

? Public welfare & volunteer activities? Community dialogue? Interaction via official media, WeChat, etc.

News Media

? Stakeholder engagement? Climate change response? Green actions & measures? Social welfare? Economic & financial performance? Anti-bribery & corruption

? Official media, WeChat, etc.? Public welfare & volunteer activities? Energy conservation & pollution control? Information disclosure

? Wind ESG Rating: A? Sino-Securities Index ESG Rating: AA

? In 2024 Named among the "Top 20 in Governance" at the second Guoxin Cup ESG Golden Bull Awards? Rated a AAA-level ESG enterprise in China's iron and steel industry

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Double Materiality Analysis

Shandong Steel adopts a "double materiality" assessment principle-considering both the impact materiality and the financialmateriality of ESG issues-conducting annual materiality assessments and highlighting dual-materiality topics in this Report toaddress stakeholder expectations.

We reference the Shanghai Stock Exchange guidelines, GRI standards, the United Nations SustainableDevelopment Goals (SDGs), and rating agency requirements, combined with industry policies and peerbenchmarking, to compile an issue list. In the current year, the Company preliminarily identified 35 ESG-related issues.We distribute surveys and questionnaires among shareholders/investors, employees, customers, suppliers,government and regulatory bodies, communities and the public, and news media, to understand whichtopics they consider most important.Taking into account stakeholder concerns and questionnaire feedback-plus both impact and financialsignificance-we evaluate each topic's influence, risks, and opportunities, and create a materiality analysismatrix.Based on the assessment results, the Company confirms highly material issues that require in-depthdisclosure in this Report, ensuring all critical ESG concerns are fully covered, and using these as prioritiesfor our ESG efforts.

Taking Precautions and Strengthening Risk Control Management

Risk Management

Shandong Steel following the COSO-ERM framework and ISO 31000 standards, closely aligns risk management with our strategicplanning and operational needs. We have developed an innovative, inclusive, integrative, synergistic, and continuously improving"1+N" risk management system, enabling proactive prevention, real-time control, and post-event handling of risks. This systemensures lawful, stable operations and high-quality, sustainable growth. Meanwhile, ESG-related risks-covering environmentalprotection, intellectual property, employee development, information security, and business-partner oversight- are embeddedin our existing risk framework. The Board's Strategic Planning and ESG Committee identifies and supervises ESG risks andopportunities with a significant business impact on the Company, guiding management in implementing appropriate responses.

Risk Management Structure: Shandong Steelhas established a standardized corporategovernance framework, clarifying the roles andresponsibilities of the risk management function,relevant departments, and each unit. From topto bottom-Party Committee, Board of Directors,Risk Management and Audit Committee, GeneralManager/managerial level, Risk ComplianceDepartment, and each risk business unit-wemaintain an integrated system with distinctresponsibilities, regulated processes, hierarchicalmanagement, and coordinated synergy.

Energy UtilizationClimate Change

Anti-bribery and Anti-corruptionFair Treatment of SMEs

Emission Reduction Management

Importance to Economic, Social, and Environmental ImpactLow

w

High

Importance to the Company's Financial Performance

EnvironmentalManagement

Water Resource

Utilization

WasteDisposal

WastewaterDischargeWaste GasEmissionsGHG EmissionControlClean Production

BiodiversityGreen Environmental Protection Actions and Measures

Green Product Research

and DevelopmentMaterial andPackaging Management

Employee Compensation and Benefits

Employee Career Development and TrainingData Security andCustomer Privacy Protection

Anti-monopoly andFair Competition

Democratic Management

Innovation-Driven Development

Intelligent Manufacturing

CorporateGovernanceESG GovernanceStrategic Communication

Emissions Trading

Due DiligenceInformationDisclosureSocial welfare

Employee Care & Support

Product Quality and Customer service

Occupational Health & Safety

Supply Chain Security

Supplier Management

StakeholderCommunicationIssuesAssessmentValidation andConfirmation

Issues Screening

Based on the results of the 2024 Double Materiality Analysis, the Company has identified climate change, employees, andoccupational health & safety as topics with both financial materiality and impact materiality. To address these material issues,the Company will comply with the Shanghai Stock Exchange disclosure requirements, covering the following four key dimensions:

Governance, Strategy, Impact, Risk and Opportunity Management, and Metrics and Targets. This structured disclosure willdemonstrate the Company’s management effectiveness in handling these dual-materiality priorities.

"1+N" New Risk Management SystemThis system adopts risk management as its guiding principle, is underpinned by internal control, sets complianceas the baseline, and takes the law as a safeguard, with value creation and protection at its core.

Strategy-driven, integrative,comprehensive, cost-effectiveness

Company-led, tiered oversight,clear responsibilities, all-employee participation

PrinciplesApproachOperational Mechanism

Full coverage, zero restrictedareas, strict enforcement,tangible results

Party Committee | Political ResponsibilityBoard of Directors

Highest Leadership andDecision-Making BodySpecialized Working BodyPerson(s) in Charge/Daily OperationsResponsible DepartmentImplementation andPromotion Units

Risk Managementand Audit CommitteeGeneral Manager/Management TeamRisk and ComplianceDepartment

Risk Management

Business Units

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We have established a comprehensiveframework characterized by scientificdesign, clear delineations, standardizedprocesses, broad coverage, explicitaccountabilities, and mutual support. In2024, the Company revised the Measuresfor Comprehensive Risk Management,Internal Control Management System, andInternal Audit Management Provisions,embedding risk elements into relevantprocedures and day-to-day activities.

We integrate regular and ad hoc reporting,with responsible departments issuingperiodic Annual Risk Assessment Reportsand Annual Risk Management Reports, aswell as special event-specific reports,to ensure timely information flow perregulations.

Risk Risk Cause AnalysisResponse MeasuresEnvironmentalProtection Risks

Intensified enforcement andpenalties; rising environmentalmanagement costs; elevatedregulatory demands on solid/hazardous waste

Advance ultra-low emission retrofitting; boost environmentalperformance investment; systematically formulatecontinuous environmental improvements; strictly follow"three-simultaneous" eco requirements; strengthenemergency management, supervision, and evaluation;conduct comprehensive environmental trainingProduct QualityManagementRisks

Increased market differentiationand customization; difficultymeeting clients' unique qualitydemands, raising complexity incontrolling product performance

Fully implement consistent quality and life-cycle management;invest in upgrading technology and equipment; enforce "oneagreement, one product, one list" controls; deepen lean qualitymanagement; strictly follow the quality incident managementsystemProductionSafety Risks

Complex operational environmentwith numerous high-risk factors;insufficient safety oversight forrelevant parties or outsourced labor

Reinforce accountability for production safety; emphasizerisk management in high-hazard operations; urge relevantparties to build robust safety systems and improve supervisionof outsourced labor; intensify emergency safety drills

Risk Management Process

The Risk Compliance Department is deeply involved in bidding processes, investment management, related-party transactions,asset disposals, and overall operations. By participating in professional evaluations, we identify potential risks early and proposelawful, compliant, and rational recommendations, fully capitalizing on internal control's preventative role. In 2024, the Companykept all major risks under effective control.

Compliance Management

Shandong Steel has pioneered an integrated approach, aligning compliance with production and operations to achieve fullcoverage and normalized compliance oversight. We conduct rigorous compliance reviews for major operational decisions,reinforce compliance management and internal controls, and continually advance standardized, law-based corporate governance.

We have adopted a General Counsel-led system, building a top-down compliance network spanningthe Party Committee, Board of Directors, managerial level, compliance management departments,business divisions, and management units, alongside three lines of defense (business, functional,auditing). Each subsidiary appoints a compliance manager- tasked with identifying, evaluating,and resolving compliance risks while ensuring staff adhere to all relevant rules- to integratecompliance into daily operations.We constantly refine our framework, promulgating the Measures for Compliance Management anddetailed policies on tax, public disclosure for listed companies, labor and employment, intellectualproperty, and more. The Company also enacts specialized compliance rules on anti-monopoly,anti-bribery, and data protection, embedding compliance performance into our evaluation system.We periodically evaluate compliance risks via a professional risk assessment team, systematicallyanalyzing the probability, potential impact, and likely consequences of compliance lapses.We promptly alert any typical, pervasive, or severe risks, preparing contingency plans; we alsoissue guidance on early signs or high-risk items identified at subsidiaries, ensuring timely andthorough remedial actions.

Management

Structure

Management

System

Risk Identification

and Assessment

Risk Warnings

and Alerts

Three Lines of Defense in Risk Management

Shandong Steel ensures system effectivenessthrough three lines of defense:

First Line–Business Departments: Responsible

for enterprise-wide risk management in theirdomains-identifying risks, crafting mitigationplans, dynamic monitoring, and embedding riskcontrols into daily work.

Second Line–Risk Compliance Department:

Guides and supervises risk managementpractices in all business units, promptly detectinggaps, recommending remedial measures, andoverseeing improvements.

Third Line–Internal Audit & Risk Managementand Audit Committee: Reviews risk controleffectiveness, and supervises or audits riskmanagement performance throughout operations.

Third Line

Business Departments

Risk Compliance Department

Internal Audit & RiskManagement and Audit

Committee

Risk Management System

Risk Management Reporting Mechanism

Collect initial

risk data

Assess risks

Develop riskmanagementstrategies

Implementrisk mitigationactions

Monitor and

improve

Second Line

First Line

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Case: Special Training on Contract Management to Strengthen Risk Prevention and Control

In the future, Shandong Steel will continue to enhance comprehensive risk management, including dynamic major-riskassessments, specialized evaluations for key matters, and full risk coverage to avert any significant threats. We will further buildand refine our compliance framework and risk-control mechanisms, ensuring all business activities operate lawfully and incompliance. Meanwhile, the Company will keep strengthening its risk-and-compliance culture, deepening employee awarenessand forming a lasting risk management improvement system. We will also step up our audit management efforts, fully utilizingaudits' supervisory and service functions.

Advocating Virtue, Fulfilling Promises, and Adhering to BusinessEthicsShandong Steel maintains a professional, honest, and upright stance in all commercial transactions and relationships, operatingunder applicable laws and the highest standards of ethics. We aim to foster a fair, transparent, and honest work and businessenvironment, placing strong emphasis on nurturing a corporate culture of integrity. The Company firmly opposes and vigorouslypunishes any acts of commercial bribery or corruption that may compromise its integrity and reputation.

Audit ManagementShandong Steel abides by the Audit Law of the People's Republic of China, the Regulations for the Implementation of the Audit Law ofthe People's Republic of China, the Provisions of the Audit Office on Internal Audit Work, and other relevant laws and regulations. Wehave promulgated the Internal Audit Management Provisions, enabling us to fully leverage internal audit's role and continuouslyimprove the corporate governance system.We have established a robust organizational framework for audit tasks. The Board of Directors serves as the leading body for theCompany's auditing affairs. Under the Board, the Risk Management and Audit Committee guides and supervises internal auditwork, while the Risk Compliance Department acts as the internal audit management body, receiving guidance and oversight fromthe Committee.In 2024, Shandong Steel conducted 11 audits focused on key aspects of operational performance, engineering projectdevelopment, and major risk management, thus helping to plug loopholes, guard against risks, improve performance, andstandardize governance. We place great emphasis on rectification; through a monthly scheduling mechanism, all responsibleunits rigorously analyze root causes and devise practical corrective actions to ensure thorough solutions. The Company maintainsa comprehensive audit-issue register, implementing "registration-and-closure" management with monthly follow-ups. Fostering a Risk and Compliance Culture

We actively foster a risk-and-compliance culture, encouraging all employees to learn about and adopt it throughout businessoperations. Regular internal trainings, external expert lectures, risk-control case studies, knowledge contests, and otheractivities ensure employees fully grasp compliance requirements and Company policies, boosting risk prevention and compliancecapabilities. Through multiple communication channels-official WeChat accounts, work groups, and more-the Companydisseminates news on risk-and-compliance events and relevant cases. Compliance management is a compulsory course formanagers, key roles, and new recruits. In 2024, we hosted four compliance management and risk prevention training sessions,covering over 600 participants.

Integrity Risk Management

Building a Culture of Integrity

Shandong Steel has released Several Measures on Strengthening the Construction of an Integrity Culture and the Three-YearPlan for Deepening Integrity Culture in the New Era (2024–2026), forming a "1+4" educational matrix centered on political and Party-focused education, with "embedded" disciplinary education, "layered" warning education, "interactive" family education, and"ladder" on-site education. By utilizing this matrix, we innovatively conduct integrity training, integrate compliance requirementsinto daily operations, and enhance employees' risk-control awareness. In 2024, business ethics training covered our entireworkforce, with more than 200 integrity-related sessions held across the Company- total attendance exceeding 15,000 people.

In November 2024, Shandong Steel held a special trainingsession on contract management, inviting judges from theJinan Steel City District People's Court and attorneys froma law firm to present. Nearly 100 staff from across theCompany attended.Focusing on the Civil Code of the People's Republic of China(Contract section), the program analyzed legal risks andpreventative measures for corporate contracting. From acompliance perspective, it also provided concrete, practicalstrategies to address common contract issues andexplored ways to improve contract management systemsand efficiency.

Shandong Steel strictly complies withthe Criminal Law of the People's Republicof China, Anti-Money Laundering Law ofthe PRC, Anti-Unfair Competition Law,Provisional Provisions on ProhibitingCommercial Bribery, and other lawsand regulations. We have enacted andimplemented documents such as theGuidelines for Special Prevention andControl of Commercial Bribery Risk tocontinuously improve our integritymanagement framework. This providesa robust institutional basis for anti-bribery and anti-corruption efforts.The Company resolutely safeguards afair, open market environment; rejectsany form of bribery, extortion, fraud,money laundering, or monopoly; andadheres to zero tolerance for unethicalconduct. In 2024, we incurred no fines orsettlements due to unfair competition,conflicts of interest, money laundering,or insider trading.

We continually reinforceintegrity oversight foremployees in crucialpositions. We introducedthe Provisions on CleanInteraction for KeyPersonnel and ServiceRecipients, plus an eight-item "negative list" tostandardize interactionsbetween key personneland managementclients, ensuring a clean,transparent businessrelationship. Meanwhile,the Company harnessesdigital tools to boostgovernance efficacy,monitoring critical rolesand sensitive proceduresin real time, steadilyeliminating any potentialrisks.

The Company viewsintegrity risk managementas an important part ofstrategic risk management,embedding preventivemeasures throughoutoperations to achieve full-process oversight. Weregularly evaluate integrityrisk controls, pinpointvulnerabilities, strengthenrelevant measures, andestablish a comprehensiverisk-prevention system.Upon identifying recurringor serious issues, weswiftly launch targetedgovernance actions-focusingon both systematic andfundamental improvements,from enhancing awarenessand refining processes toinstituting post rotations-thereby effectively preventingintegrity risks.

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Jointly Building a Clean Ecosystem

Shandong Steel is devoted to shaping an integrity-based, mutually beneficial ecosystem with its partners. We have formulated theSunshine Procurement Management Measures, consistently refining transparent procurement methods and bolstering integrity riskcontrols. Following "all bids must be tendered," the Company maintains a 100% online purchasing rate across categories. Signingan Integrity Agreement is required for every contract-prohibiting all forms of commercial bribery-thus ensuring fair, transparentcompetition and preempting unfair conduct.Each year before New Year's Day, the Company circulates a Letter to Business Partners, emphatically championing "integrity,honesty, and mutual benefit," and resolutely combating demands for bribes, borrowed capital, or shifting of costs, all of whichundermine competitive fairness. We operate official WeChat accounts like "Integrity Bridge" to post relevant policies, highlightwrongdoing cases, provide holiday integrity reminders, and offer a one-click reporting channel-enhancing partner engagement andfostering a clean business environment.The Company upholds legality, fairness, impartiality, and openness while reviewing supplier contracts. Each contract clarifiesmutual rights and obligations-covering product or service quality, pricing, and promotional methods-to ensure compliance withrelevant laws, prevent misleading publicity, and guard fair competition. Confidentiality and intellectual property clauses furtherprotect trade secrets and IP, respecting all parties' rights and maintaining orderly markets.

"Steel Integrity Culture Garden," of Rizhao Base ",Mirror Garden" Integrity Education Centerof Steel City Base

Tailors sessions for senior leaders,middle management, and frontlineemployees-e.g., specialized lecturesby external experts, case reviews,and compliance trainings. For newhires and younger cadres, "Young &Clean Classroom" modules delivercustomized integrity instruction.For three consecutive years, we have run aseries of family-oriented integrity activities-suchas home visits and parent-child sessions-thatintegrate anticorruption awareness into daily life,strengthening "off-duty" supervision and forginga family-company joint defense. In 2024, wecarried out "Uphold Integrity, Starting at Home"campaigns, including "zero-distance" visits,"one-on-one" integrity classes, and signingCommitments to Clean Practice and FamilyAdvocacy for Integrity.

Shandong Steel has developedpurpose-built integrity educationbases represented by the "SteelIntegrity Culture Garden" at our RizhaoBase, as well as the "Mirror Garden"at our Steel City Base, alongside 20demonstration sites and culturalcorridors for integrity education. Thesecollectively supply abundant resourcesand a supportive environment forongoing integrity training.

"Embedded" Discipline Education

"Interactive" Family-value Education"Ladder" Learning Platform Education

"Layered" Warning Education"1+4" educational matrix centered on political and Party-focused education

Operating with Integrity and Optimizing Tax ManagementShandong Steel has always regarded tax management as a critical component of enterprise management, earnestlyimplementing national tax policies and fulfilling its tax obligations in accordance with the law. We strictly abide by national taxlaws and regulations, paying all taxes and fees fully and on time. Meanwhile, the Company continually strengthens its internalmanagement and standardizes accounting procedures to ensure the authenticity and accuracy of tax data. When handlinginternational tax-related matters, we comply with international tax laws and regulations, observing principles such as taxjurisdiction, avoidance of double taxation, exchange of tax information, international tax adjustments, anti-avoidance and anti-evasion measures, single-taxation, the beneficiary principle, and international tax neutrality, thus guaranteeing that all businessactivities are authentic.Shandong Steel strictly complies with local tax-authority requirements, filing and paying taxes in accordance with the law. Ourannual tax credit rating remains Grade A.

Reporting and Investigation MechanismShandong Steel has solidified its whistleblowing framework, expanding complaint andreporting options via letters, visits, online platforms, calls, and a mobile supervisionchannel. We encourage stakeholders to submit real-name or anonymous reportsconcerning unethical conduct, and periodically assess the effectiveness of thesepathways. Should a report concern a specialized area, the pertinent management unitinvestigates and responds, ensuring accessibility and prompt feedback. Suspicions oflegal or disciplinary violations are referred to relevant agencies, such as the disciplineinspection department. The Company implements strict confidentiality, e.g. designatingdedicated staff, specialized storage, and a unique hotline, and rewards verified real-namewhistleblowers. In 2024, our timely resolution rate for reports remained at 100%.Reporting Hotline: 0531-77920968Online Reporting E mail: gf77920968@shan-steel.comAddress: No. 99, Fuqian Street, Gangcheng District, Jinan City, Shandong Province,271104, P.R. China.

Incorporates integrity lessons into projectmanagement and production workflows viabulletin boards, Party lectures, theme activities,educational videos, and staff pledge-signing,creating a strong culture of integrity.

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Controlling risk at the source through front-end oversight. We shift the risk-management process forward, covering all phasesbefore, during, and after operations. Procurement, sales, maintenance, engineering, and finance all fall under tax-risk scrutiny-from contract signing and invoicing to accounting and fund transfers-thereby strengthening tax-related assessments of majorissues and detailed controls over business processes while providing early warnings for probable risk points. Meanwhile, theCompany dynamically updates its database of tax laws, regulations, and preferential policies, and performs regular internalaudits and tax-related self-inspections to detect and eliminate potential risks in a timely manner.Enhancing tax information exchange and training. We actively engage in tax-related courses-such as large-enterprise risk-management training-organized by tax authorities and professional institutions, occasionally inviting external experts to providein-house instruction. This approach strengthens both risk awareness and the professional skills of our tax-management team.The Company also maintains close communication with tax advisory firms and other external experts, ensuring timely discussionof new regulations and policy updates, so that our tax practices remain law-abiding.During the reporting period, we faced no major tax violations. Tax Administration

We have established a modern, institutionalized, and standardized tax-management system by continuously refining andinnovating our tax practices, integrating production, finance, and tax functions to ensure transparent, standardized, and equitabletaxation. The Company's headquarters conducts unified tax management for different lines of business and across variousregional units. The financial departments at headquarters and at each management unit include specialized tax-managementsections or positions, fully responsible for tax-risk controls, implementing tax and accounting policies, and handling tax-relatedmatters.To ensure standardized, specialized tax management, we have formulated various measures such as Management Measures forEnterprise Income Tax, Tax Management Measures for Overseas Non-Trade Businesses, and Management Standards for Taxation,Management Standards for Tax Returns, Management Standards for Enterprise Income Tax, and Management Standards for Accountingof Taxes on Properties and Behaviors. These documents further refine the operational processes and requirements for taxmanagement, solidifying standardization. Tax Risk Management

Shandong Steel continuously enhances tax-compliance risk management and has established a robust tax-risk preventionmechanism. We have introduced instruments such as the Tax Risk Management Measures and the Tax Risk Management Standardsto enable early warning, in-process control, and post-event evaluation of tax risks, comprehensively monitoring the Company'stax exposures across prevention, avoidance, control, and response.

We operate in full compliancewith all relevant tax and legalrequirements in the countrieswhere we do business, limitingourselves to transactionsfounded on genuine commercialactivities.

The Company employs atransparent approach to taxpolicy disclosure. Our financialstatements and audit reportsdetail deferred tax assetsand liabilities, alongside theapplicable corporate taxes andtax rates.

We avoid tax structures lackingcommercial substance, proactivelyfollow tax-policy guidance, remainfocused on business areas promotedby the state, and fully leveragetax incentives.

The Company adheres totax laws and regulations,carefully fulfillingour tax-declarationresponsibilities, andupholds the principle oftransparency in dealingswith relevant governmentdepartments.

We set transfer prices in linewith fair-trade principles,never exploiting tax-lawdisparities, internationalloopholes, or tax havens forevasion, nor do we shift thevalue created into low-taxjurisdictions.

Tax Risk Management Process

Analyzingtax data

Researching

relevantregulations

Identifyingpotentialtax risks

Devisingresponsivestrategies

Controlling

risks andimplementing

solutions

Our Main InitiativesWe identify and assess tax risks, then formulate preventive measuresWe monitor the tax-risk environment, reporting and mitigating potential exposures promptlyWe audit all tax-related operations to guarantee legal complianceWe conduct tax-risk training to enhance employees' tax awareness

OurCommitment

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We still have time to choose another path- a wiser onethat leads us to live in harmony with nature. This pathis full of hope, demanding that we explore nature'smysteries with both wisdom and humility.

—Rachel Carson, Silent Spring

Transition to Green Development,Painting a Scroll of Blue Waters

and Clear Skies

Guided by the Dual-Carbon Strategy, Optimizing Climate Management Strengthening the Foundation and Deepening Environmental Governance Maximizing Energy Efficiency and Enhancing Resource Utilization Saving Water and Protecting Our Source of Life Recycling and Enhancing Solid Waste Disposal Harmonious Coexistence, Safeguarding Biodiversity

Environment

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Guided by the Dual-Carbon Strategy, Optimizing Climate Management

GovernanceClimate governance is a crucial global concern. In October 2023, SISG joined the Global Low-Carbon Metallurgy InnovationAlliance, with Shandong Steel playing a key role. The Company's management team acts as the decision-maker for climategovernance, overseeing our carbon peaking and neutrality targets and development plans, deliberating major carbon issues, anddrafting carbon management systems per national policies.The Energy and Environmental Protection Department acts as the governance layer for climate strategies, featuring a dedicatedlow-carbon position responsible for low-carbon policy research, R&D/application of green and low-carbon technologies, carbonemission reduction, carbon asset management, and external exchange/cooperation. It also supervises and evaluates the executivelevel's implementation of climate measures.All relevant departments and subsidiaries of the Company form the executive layer of climate governance, charged withimplementing specific energy conservation and emission reduction measures, and accepting oversight from the Energy andEnvironmental Protection Department. Strategic Initiatives

Dual-Carbon Strategy

Shandong Steel actively responds toChina's dual-carbon strategy and,in line with the Carbon Peak WorkProgram, has set its own carbonpeaking and neutrality objectives:

Carbon Reduction InitiativesThe Company has clarified a multi-pronged carbon reduction path: "scientificplanning, extreme energy efficiency, process innovation, technological innovation,and green development." During the reporting period, we implemented the processcarbon reduction projects, actively developed new carbon-reduction technologies, andbolstered energy-conservation and low-carbon awareness among employees, steadilyexploring a path toward long-term deep decarbonization.

? Technological Carbon ReductionWe proactively adopt advanced low-carbon measures, such as CO

top-bottom blowingin converters and BF injection of coke-oven gas. At the Rizhao Base, the No.1 and No.2converters smoothly run a top-bottom CO

blowing smelting project that replaces argonfor bottom stirring, thus reducing argon use, boosting stirring and dephosphorization,and minimizing iron loss for a new low-carbon breakthrough. Designed annual CO

usage is 30,000 tonnes, saving roughly 4,760 tonnes of standard coal. The No.3 andNo.4 converters will also apply this technology in the future.Looking ahead, Shandong Steel will continue focusing on production-process carbonreduction, energy mix adjustments, adopting energy-conservation/carbon-reducingtechnologies, and tracking cutting-edge low-carbon smelting. The Rizhao Base plansto implement 12 energy-conservation/carbon reduction projects by 2025, saving about46,000 tonnes of standard coal yearly, while the Steel City Base aims to cut about51,000 tonnes of standard coal via multiple energy-efficiency projects.

Transition to Green Development, Paintinga Scroll of Blue Waters and Clear Skies

? Production Process Carbon Reduction

The Company consistently optimizes blast furnace burden structure, lowers the iron-steel ratio, raises the scrap ratio, and has executed thick-bed sintering, sintering hotgas ignition, hot gas sintering, pellet waste heat recovery, and other process-orientedprojects to curb CO

emissions. At the Rizhao Base, converter scrap ratio reached

23.6%-7.9 percentage points higher year-on-year, while at the Steel City Base, it rose

from 12.45% in 2023 to 14%.

Shandong Steel firmly embraces a path of green development, achieving harmonious coexistence of steel productionwith clear skies and clean waters. The Company took the lead in completing an ultra-low-emissions transformationfor the entire steelmaking process in Shandong Province and was among the earliest in the industry to achieve region-wide A-level environmental performance, fully showcasing the advantages of green development. In recent years, wehave successively earned honors such as "National Environmentally Friendly Enterprise," "National Greening ModelUnit," "National Pilot Demonstration Enterprise for Promoting Energy Conservation and Emission Reduction viaInformatization-Industrialization Integration," "National Top Ten Enterprise for Comprehensive Resource Utilization,""Cleaner Production and Environment-friendly Enterprise in China's Steel Industry," "National Water Efficiency Leader,"and "National Green Factory."

Scrap Ratio in Convertersof Rizhao Base reached

23.6%

Steel City Base rose to14%

Cut carbon emissionintensity by 5% in 2025(compared to 2020)

Strive for carbonneutrality by 2050Ensure carbon peakingby 2030 and possessthe resources/technicalcapability to reduce CO

intensity by 30% from 2020levels, with an actual 20%reduction achieved

Short-Term Goal

Long-Term GoalMedium-Term Goal

Scientific planningExtreme energy efficiencyProcess innovationTechnological innovationGreen development

Carbon reductionpath

Rizhao Base will save about

46,000tonnes of standardcoal yearly by 2025Steel City Base aims tocut about51,000tonnesof standard coal by 2025

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? Enhancing Energy-Conservation and Low-Carbon Awareness

Shandong Steel actively observes an Energy Conservation & Environmental Protection Promotion Month, contributing to"Beautiful Shandong Steel, Beautiful China." Through environmental outreach, knowledge lectures, low-carbon knowledgecontests, neighborhood campaigns, and essay activities, the Company raises awareness among employees, families, and localresidents about resource conservation and environmental protection as fundamental national policies. We disseminate green andlow-carbon development concepts, promote environmental stewardship and carbon-reducing mindsets, encourage thrift and eco-friendly social practices, and advance green, low-carbon production and lifestyles.

Risk and Opportunity Management

Climate change risks can directly or indirectly impact a company's operations and finances. Shandong Steel analyzes these risksand opportunities based on policies, regulations, and markets, identifying five climate-related risks that could materially affectthe Company's business.

Type of RiskPotential ImpactPhysical RiskTyphoon

The Rizhao Base lies on the Yellow Sea coast, making it prone to typhoons. Withfrequent extreme weather events in recent years, this may lead to potential assetimpairment or loss, as well as additional economic losses.

Transition Risk

Policy & Laws/Regulations

As the steel sector joins the national carbon market, and the Carbon BorderAdjustment Mechanism (CBAM) is fully enforced in 2026, the Company couldface higher carbon prices, growing carbon compliance costs, policy constraintson energy transition, and "green trade barriers" (e.g., overseas "carbon tariffs"),leading to increased investments, operating, and export costs while loweringrevenue.Technology & Costs

In the low-carbon transformation, we must invest more in energy-saving andenvironmental technologies and low-carbon smelting R&D. This raises R&D costsand risk of value loss of fixed assets.Market

Domestic steel demand has plateaued. Driven by the green and low-carbon shiftacross the entire chain, demand for low-carbon steel will rise. Competition amongsteelmakers may intensify, and a slower green transition could shrink theCompany's market share.Reputation

Stakeholders' and the public's concerns about our climate initiatives may result inreputational risks that affect operations.

Climate change is also reshaping social and economic development, bringing opportunities for sustainable corporate growth. Byanalyzing industry and market conditions, along with the Company's resources and strategies, we identified:

We can capitalize on surging steeldemand in new energy sectors,vigorously developing wind-powersteels, marine equipment steels,etc. Through R&D of ultra-highyield strength plates, pipelinesteels, and other green low-carbonproducts, the Company meetsmarket and customer needs forlower-carbon options.

By optimizing productionprocesses, maximizing energyusage, and recycling resources,we improve energy efficiency,foster energy conservation andemissions cuts, and help reduceoperating costs.

The Company replaces traditionalhigh-carbon fuels with clean energy,steadily increasing the use of solar,wind, hydropower, and more, buildinga circular green economy thatreduces our energy expenses andcompliance costs while contributingto low-carbon development.

Productsand Services

ResourceEfficiency

EnergySources

Note: Carbon emissions in 2024 are preliminary data.

IndicatorUnit202220232024

GHG emissions (Scope 1)tCO

e23,712,62424,512,877 24,821,339GHG emissions (Scope 2)tCO

e4,150,0322,670,937 2,331,860GHG emissions (Scope 1 + Scope 2)tCO

e27,862,65627,183,813 26,988,399

20232024GHG Emission Intensity per Tonne of Steel (Scope 1 and Scope 2)

1.83

1.806

Indicators and PerformanceTo ensure our dual-carbon goals are met, the Company continuously monitors and manages direct and indirect GHG emissions.In this reporting period, we measured greenhouse gases in accordance with national standards, further lowering total emissions.GHG emission intensity per tonne of steel decreased to 1.806 tCO

e, as shown below:

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Case: Rizhao Base Strengthens Standardized Radiation Managementto Ensure Radiation Safety

Strengthening the Foundation and Deepening EnvironmentalGovernance

Environmental Compliance ManagementIn 2024, Shandong Steel optimized the organizational structure of environmental management systems and formulated or revisedmore than 10 environmental management systems, including Management Provisions on Environmental Protection ResponsibilitySystem and Accountability, Management Measures for Environmental Protection Supervision, Management Provisions on Waste GasEmission Control, Management Provisions on Wastewater Emission Control, Management Provisions on Environmental Protection ofConstruction Projects, and Management Provisions on Environmental Monitoring, ensuring standardized environmental managementpractices. We conducted the annual supervision and audit of the environmental management system according to ISO 14001 andGB/T 24001-2016 standards, achieving 100% certification coverage.

Environmental Inputs and Performances

Shandong Steel continues to increase investment in environmental protection.Through source emission reduction, process control, and end-of-pipetreatment, we implemented comprehensive, company-wide environmentalgovernance. The Company consolidated and maintained an "A" levelenvironmental performance rating, continuously enhancing its governancecapability and management efficiency.During the reporting period, the Company invested RMB 1172 million inkey environmental projects, such as coke oven flue gas desulfurizationand denitrification system upgrading, ultra-low emission renovations ofsintering machine flue gas, and deep treatment of sulfur dioxide from gas-fired power generation, maintaining A-level environmental performance. Theenvironmental protection "Three Simultaneities" system for constructionprojects achieved a 100% implementation rate, and pollutant dischargecompliance, hazardous waste disposal compliance, and synchronousoperation rate of environmental protection facilities all reached 100%, withzero significant environmental pollution incidents or regulatory penalties,maintaining the environmental credit "green label."

Environmental Risk Management

Shandong Steel strengthens environmental risk managementand control, safeguarding the bottom line of safety andenvironmental protection. We have listed environmental risks,such as excessive emissions and environmental penalties, asmajor risks requiring comprehensive control. The Companyhas hired a law firm as its eco-environmental legal complianceconsultant to provide periodic consulting services, andregularly invites environmental authorities and professionalorganizations to conduct on-site assistance and guidance.We proactively identify and address environmental risks, andformulate control plans to reduce compliance risks.The Company has formulated the Emergency Response Planfor Environmental Emergencies in accordance with applicablelaws and regulations, establishing and continuously improvingan emergency response mechanism, enhancing our capabilityto respond to and prevent sudden environmental pollutionincidents. We regularly conduct emergency drills coveringscenarios such as material leakage, fire, environmental facilityfailures, and radiation accidents. In 2024, the Company and itssubordinate units conducted 67 emergency drills, with a totalduration of approximately 78 hours.

All 60 employees involved in radiation-related operations at Rizhao Base hold radiation safety qualification certificatesand received full occupational health examinations. The Company organized 8 specialized radiation safety trainingsessions and emergency drills, involving over 100 person-times, greatly improving the coordinated response capabilityfor radiation incidents.

Conducted

emergency drillswith a total duration of approximately

hours

100%

Implementation rate of "ThreeSimultaneities" system for constructionprojects

InvestedRMB 1172million in keyenvironmental projectsMaintainingA-level environmentalperformance

100%Synchronous operation rate ofenvironmental protection facilities100%Pollutant discharge compliancerate100%Hazardous waste disposalcompliance rate

Case: Steel City Base Jointly Conducts Emergency Drillsand Training with Government Departments

Steel City Base signed the Emergency Material Storageand Emergency Rescue Agreement with the Steel CityBranch of Jinan Eco-Environmental Bureau. Expertsfrom the Steel City Branch and Jinan Institute ofEnvironmental Research were invited, using a combinedapproach of on-site lectures, exchanges, and field drillsto conduct emergency response exercises, standardizedmanagement training for hazardous waste, and pollutiondischarge permit ledger management training. Over160 management, technical, and operational personnelparticipated, with total training hours reaching 10,significantly enhancing the professional capabilities ofenvironmental protection staff.

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Environmental Protection TrainingOn World Environment Day (June 5), the Company conducted ecologicalcivilization training for all employees and launched the EnergyConservation and Environmental Protection Awareness Month in 2024,encouraging company-wide participation in related awareness campaigns,enhancing ecological awareness and capabilities, and supporting thebuilding of a beautiful Shandong Steel and a beautiful China.In 2024, the Company invited legal advisors and environmental regulatorsto conduct specialized training on standardized hazardous wastemanagement, pollution discharge permit ledger management, and keypoints for environmental protection inspections. We conducted a total of16 large-scale training sessions, involving over 4,000 person-times andtotaling approximately 108 hours. Clean ProductionShandong Steel actively promotes the establishment of clean production andenvironmentally friendly enterprises. Both the Steel City Base and Rizhao Base havebeen recognized as clean production environmentally friendly enterprises in China'siron and steel industry. The Company has formulated continuous clean productionplans, actively carried out research and development of new clean productiontechnologies, optimized production processes and operation procedures, andadopted clean raw materials and fuels, including low-sulfur coal and low-sulfur ironore. By applying advanced clean production and process control technologies, wehave consolidated our achievements in clean production. The emission indicatorsof key air pollutants all surpassed the level-one standard of the Clean ProductionEvaluation Indicator System.Continuously Improving the Proportion of Clean Transportation. Rizhao Base hasinvested RMB 365 million in constructing an internal dedicated railway line andcooperated with the outside to build a port-dredging railway. Additionally, morethan 180 electric heavy-haul trucks have been put into operation, maintaining theproportion of clean transportation above 85%, surpassing the 80% target requiredby A-class enterprises with environmental protection performance. Steel City Basemainly uses railway, road, and conveyor belt transportation. Railway transportationprimarily leverages the Company's dedicated railway lines (Yanzhuang Stationand Laigang Station), conveniently connected to the Jinan Railway Bureau ofChina Railway, ensuring efficient transportation in supply and sales operations.The internal railway and dedicated automobile lines primarily handle hot metaltransportation within the plant. Conveyor belt transportation is mainly used forcross-regional coke delivery. Road transportation is conducted in cooperation withthird-party logistics providers to satisfy the logistics needs of surrounding regions.The proportion of clean transportation remains above 80%.

More than

electric heavy-haultrucks have been put into operationin Rizhao BaseThe proportion of clean transportationremains above85%

Surpassing the80%target requiredby A-class enterprises

Green Product Design and R&D? Green Products

Shandong Steel continuously develops green low-carbon steels featuring high strength, corrosion resistance, and energyefficiency, while collaborating with downstream steel users to advance carbon-reduction efforts.

X60MS Dual-Resistant Pipeline SteelIncorporating hydrogen-induced cracking (HIC) and sulfide stress corrosioncracking (SSCC) resistance with a 415 MPa yield strength, X60MS wasdelivered to a sour-service oil and gas pipeline project in Qatar, broadeningthe Company's dual-resistant pipeline steel offerings and reaching a newproduction milestone.

X60MO Hot-Rolled Plate for High-Grade Submarine Pipelines

At our Rizhao Base, we successfully developed X60MO hot-rolled platefor high-end submarine pipelines, used in a major domestic project. Withthicknesses above 14 mm, these coils demand rigorous strength, low-temperature toughness, and newly added CTOD performance requirements(CTOD measures low-temperature toughness at a higher standard thanconventional tests), making production extremely challenging.

EH690 Series Offshore SteelThis ultra-high-strength offshore engineering steel applies to main hulls,drilling decks, pile shoes, cantilever beams, pile legs, racks, and half-circularplates for offshore drilling and oil production. It offers a 50% longer servicelife than vessel-grade steels, requiring low internal segregation, minimalbanding, fewer inclusions, and uniform microstructure, plus excellentshaping, hot/cold formability, and weldability. Our latest product reaches 800MPa tensile strength,>100 J impact toughness,≥35% Z-direction lamellartear resistance, and superior weld properties. Thickness can exceed 85 mm.

Fingerprint-Resistant Hot-Dip Galvanized Steel Sheets

Named "fingerprint-resistant" because its surface remains smudge-free whentouched with a clean finger, this steel is widely used in home appliances andelectronics for its superb fingerprint resistance, electrical conductivity, andcorrosion resistance.

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Thick-Walled, High Crack-Arrest Pipeline Steel for Supercritical CO

Based on CCUS/CCS (carbon capture & storage) technology, these pipesserve specialized CO

sequestration needs. Developed at the Rizhao Base,they provide CO

corrosion resistance, solid low-temperature impactproperties, drop-weight shear capacity, and acid resistance- successfullyapplied in China's largest-diameter, thickest LSAW pipes for supercriticalCO

transport.

9Ni Steel for China's Largest LNG Storage TanksWith exceptional low-temperature toughness (–196°C) and high strength,9Ni steel can withstand substantial loads without brittle fracture. Wesupplied over 6,000 tonnes for the nation's largest-volume LNG tankunder construction, which will process up to 6 million tonnes of LNGannually. This achievement is vital for national energy security, optimizingthe energy mix, and advancing "dual-carbon" goals.

Large Deformation-Resistant Pipeline Steel via Hot RollingExhibiting high strength, toughness, a low yield ratio, and a large uniformelongation, this steel fully meets seismic-fault pipeline demands. Produced insmall batches and approved by user UOE pipe evaluations, the Company pioneeredhot rolling line production of large deformation-resistant pipeline steel, fillingan industry gap and supporting national energy pipeline expansion with notableeconomic and social advantages.

Steel for Building StructuresShandong Steel led domestic development of≥600 MPa seismic-reinforcedbars, cutting steel use by 20%–30% with substantial environmental andeconomic benefits. We also created an 80 mm thick Q460GJD acicularferrite-based plate for building structures, addressing uniformity issues atextra-thick specs and achieving a complete product range from Q345GJ toQ460GJ. In sections, we research multi-phase-structure functional buildingsections, enabling a full lineup of high-strength, tough hot-rolled H-beams.

? Green Design

The Company follows Life Cycle Assessment (LCA) and green design concepts, actively promoting green steel product design andcertification. In 2024, we completed LCA designs for four section-steel production lines, and pipeline steel was included in theMinistry of Industry and Information Technology (MIIT)'s 2022 Green Design Product List. During 2024, Shandong Steel releasedfour Environmental Product Declarations (EPDs), totaling eight EPD reports so far.

Air Pollution ControlShandong Steel strictly abides by national laws and regulations, formulating the Waste Gas Emission Management Regulations andthe Three-Year Action Program for Environmental Performance A (2024–2026), among other documents, to comprehensively reducepollutant emissions, improve environmental quality, and reinforce A-level environmental performance across all operations viasource emission reduction, process control, and end-of-pipe treatment.In 2024, the Company carried out 28 major environmental remediation projects. Sulfur dioxide (SO

), nitrogen oxides (NOx), andparticulate matter (PM) all reached ultra-low emission levels. Emissions per tonne of steel stood at 0.09 kg for SO

, 0.27 kg forNOx, and 0.18 kg for particulates.

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End-of-Pipe TreatmentWe further mitigate emitted fluegases using high-efficiency dustcollection plus desulfurization/denitrification devices. Rizhao Baseruns significant flue gas governanceefforts-like deep desulfurizationand denitrification for coke oven gasand ultra-low emission retrofits forsintering lines-adopting cutting-edge pre-charged direct-flow bagfiltration, thereby keeping particleoutputs below ultra-low emissionthresholds. At Steel City Base, all sixcoke ovens' charging and pushinglines are equipped with standby dustremoval systems, preventing over-limit or disorganized emissionswhen environmental facilities requirerepairs or maintenance.

Process ControlThe Company implements rigorousquality control during productionto fulfill environmental standards.Through real-time monitoring anddata analytics, we promptly identifyand address potential emissionissues. Both Steel City Base andRizhao Base adopt an environmentaloversight model combining onlinepollution-source monitoring, ongoingself-monitoring, and ecologicalinspections, supported by full-plant monitors for exhaust gas andambient air. Within Rizhao Base'scoking plant gas purification area,online detection technology achievesa new milestone for controllingH

S in coke oven gas, raisingdesulfurization efficiency to 98%.

Source Emission ReductionShandong Steel decreasespollutant generation by optimizingproduction processes, adoptinglow-sulfur coal/ore, and integratingadvanced technologies. We utilizewet electrostatic precipitators,membrane bag filters, cartridgedust collectors, etc. At Steel CityBase's coking operations, we employstate-of-the-art microcrystallineadsorbent technology for coke ovengas, drastically lowering total sulfurcontent. At Rizhao Base, we recoverblast furnace top gas via pressureequalization, reducing flue gas fromits source.

? Managing Energy ConservationShandong Steel uses value creation as a guiding principle to deeply tap intoenergy-conservation and consumption-reduction potential, systematicallyboosting energy utilization efficiency and energy value utilization level. Atthe Rizhao Base, in line with the "three flows and one status" concept (energyflow, manufacturing flow, value flow, and equipment status), we integrateenergy and other operational management to build a lean synergy model.By coordinating energy–production, benefits, and maintenance and following"forecast, budget, foreknowledge, prediction, pre-control, prevention," theCompany has maximized gas utilization. In 2024, blast furnace gas diffusingreached zero, surpassing the industry's 0.2% average.We also intensify electricity-saving measures by tailoring specific power-saving plans to each production line. For continuous processes like coking,ironmaking, and steelmaking, the Company focuses on auxiliary-equipmentenergy management. For rolling lines, we schedule shutdowns, rollchanges, and maintenance during peak-price periods to optimize overallenergy use.

? Collaborative Energy Conservation

The Company fully utilizes Baosteel's integrated collaborative support platform to achieve energy conservation and synergy.Through technical exchanges and on-site diagnoses, we excel in converter gas recovery, converter waste-heat steam recovery,boosting high-efficiency power generation loads, reducing back-feeding, and balancing peak-valley power usage. Rizhao Base hasconducted 32 collaborative exchanges with Baosteel, implementing 3 annual synergy projects, such as improving converter gasrecovery, cutting steelmaking power consumption, and lowering gas consumption in thick-plate lines. Steel City Base carried out7 synergy projects- ranging from extreme converter gas recovery and coking-based enhancement of CDQ steam output to curbingrolling-line gas use and slashing O

/N

consumption in steelmaking and ironmaking-yielding significant energy conservation.

Energyflow

ManufacturingflowValue flowEquipment

status

"Three flows and one status"

Concept

Case: Multiple Blast Furnaces and Converters Recognized as"Pioneer Furnace" and "Excellence Furnace"In July 2024, the annual results of the National Key Large Energy-Consuming Steel Production Equipment Energy-Conservation Benchmark Competition were announced, awarding nine "Champion Furnaces," 31 "ExcellenceFurnaces," and 33 "Pioneer Furnaces." Among them, the No.1 5,100m? blast furnace and No.1 210t converterat Rizhao Base received "Pioneer Furnace" honors, the 3,800m? blast furnace at Steel City Base was named an"Excellence Furnace," and the No.1 480m? sintering machine was also designated a "Pioneer Furnace."

Maximizing Energy Efficiency andEnhancing Resource Utilization

Energy UseShandong Steel embraces the principles of a "systemicapproach, scientific approach, and value creation,"adhering to an energy-saving strategy of "systematicenergy conservation, collaborative energy conservation,and technical energy conservation." By focusing on"energy management, process energy conservation,and technological energy conservation," we pushconsumption limits and regard enhanced energyefficiency as the most economical and direct path to agreen, low-carbon transition.? System ConstructionThe Energy and Environmental Protection Department ofthe Company oversees all energy management, revisingand improving Energy Management Systems. Bothproduction bases have achieved ISO 50001 certification,reaching 100% certification coverage.

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? Technical Energy ConservationShandong Steel drives technical energy-conservation retrofits across all processes and sites, further advancing energyconservation. During the reporting period, the Company continued to promote energy-conservation technology improvements-achieving 100% recovery of coke oven gas and blast furnace gas and stable limit recovery of converter gas-leading to 245,000 tcein total energy savings by 2024. Rizhao Base carried out 16 energy-saving projects with an annual saving of 43,700 tce; Steel CityBase completed a coke oven riser heat-exchanger project and accelerated multiple initiatives, such as external gas pipelines forLubi New Material Technology, yielding notable results.

Improving the Energy Management System

Grid-Based Energy Efficiency Diagnosis

Challenging Extreme Energy Efficiency

Under the principle of "horizontal to the edge, vertical to the end," the Rizhao Base follows a "management first,business-driven, system-support, organizational assurance" promotion route. We established two major controlplatforms-an energy management system and an energy control center (one "static" and one "dynamic")-toensure efficient energy system operations.

The Rizhao Base employs a systematic energy conservation philosophy of "forward-looking thinking, holisticplanning, integrated promotion," performing grid-based energy efficiency diagnostics. With reference to CISA's50 benchmark energy conservation technologies and Baowu's 138 standards for extreme energy efficiency, theCompany utilizes a "rolling propulsion strategy"-implementing, reserving, and developing a set of technologies-identifying 68 measures to enhance extreme energy efficiency. We formulated a 2023–2025 plan targeting coking,blast furnace, and converter processes across management, technology, and process dimensions, defining 22key measures with RMB 176 million total investment and an annual energy conservation of 144,000 tce.

Rizhao Base reinforced energy-conservation technologies and launched specialized energy-reduction campaignsin priority processes. In coking, by using new technologies such as high temperature and high pressure CDQand waste heat recovery of riser, the energy utilization efficiency is maximized, lowering coking process energyconsumption (July 2023–June 2024) by 3.50 kgce/t compared to 2022. In ironmaking, waste heat recovery fromslag flushing water and closed-loop cooling, plus total recovery of pressure-equalized gas, trimmed energyconsumption by 1.40 kgce/t. In steelmaking, new methods such as AI image recognition for converter gasextreme recovery and dedusting-fan energy controls steadily reduce per-ton steel energy use. By building aconverter gas extreme recovery control model-optimizing holder speeds, refusal temperatures, gas turbine co-firing rates, and an AI-based patented image recognition system for furnace-mouth micro-positive pressure-wereached an industry-leading converter gas recovery volume, cutting converter energy consumption (July 2023–June 2024) by 4.80 kgce/t compared to 2022.

? Extreme Energy EfficiencyShandong Steel follows the 50 benchmark energy-conservation technologies issued by the China Iron & Steel IndustryAssociation (CISA) to execute special actions for energy reduction in key processes. In 2023, both the Steel City Base and theRizhao Base were designated as cultivation units for "Energy Efficiency Benchmarking Demonstration Plants with Dual-CarbonBest Practices," and the Company earned the title of "Advanced Collective in Organizing and Promoting the Three-Year Action ofEnergy Efficiency Benchmarking for the Extreme Energy Efficiency Project in 2023."During the reporting period, key processes (coking, blast furnace, converter) at the Rizhao Base reached a 100% benchmarkcompliance rate, successfully passing CISA's acceptance for the "Dual-Carbon Best Practice Energy Efficiency BenchmarkDemonstration Plant." Rizhao Base thus became the first steel enterprise in Shandong Province to pass acceptance and beofficially announced, and in 2024, we were recognized as an "Advanced Enterprise of the Three-Year Action for Energy EfficiencyBenchmarking in the Extreme Energy Efficiency Project."

Case: Rizhao Base Lowers Power Consumption in Steelmaking

Reducing power consumption is pivotal for the Rizhao BaseSteelmaking Plant. By continuously reinforcing energy andenvironmental management, refining smelting processes,integrating intelligent models, and adopting precise, efficientconverter scheduling ("3×12+N" and "3 converters for 4 casters"),along with a production timetable to optimize process flow, we cutsteelmaking electricity consumption per tonne by 4.8 kWh in 2024(compared to 2023), enabling green, low-cost, high-efficiency,stable production.

Actively Advancing Extreme Converter Gas RecoveryTechnology. Through process optimization, technical

improvements, and robust management, RizhaoBase raised converter gas recovery per tonne ofsteel to 0.92 GJ-10% above the previous year-reaching a leading national level. The steelmakingplant boosted converter gas metrics by over 8% viaextreme recovery and CO

top-bottom blowing. AtSteel City Base, model-based operations minimizedflaring during recovery, achieving 100% convertergas capture and 0.78 GJ recovered per tonne of steel-significantly higher than in 2023.

Maximizing Self-Generated Electricity. Shandong

Steel adheres to the principle of "lean supply, totalrecycling, efficient power generation, and tieredutilization," continually enhancing waste heatand residual energy usage. In 2024, the Companyachieved 3.062 billion kWh of power from wasteheat/residual energy. Rizhao Base contributed 1.27billion kWh at a 35% self-generation ratio, saving156,000 tce annually; Steel City Base generatedapproximately 1.792 billion kWh of self-suppliedelectricity, achieving an 87.8% self-generationrate and annual energy-conservation equivalent to220,200 tonnes of standard coal.

On the public gas pipeline outside the existing steelmaking workshop, we set up a gas-mixing platform drawing coke ovengas and converter gas from the public network. These are blended per a designated ratio and routed to the continuouscaster's tundish for baking. Ensuring a calorific value≥10,000 kJ/Nm?, from January to April 2024 the coke oven gasusage was 2.5 m?/t, then May to September it was 0.89 m?/t, with converter gas at 0.15 m?/t, yielding~6,792 tce/year intechnological energy conservation.

Case: Rizhao Base Tundish Mixed-Gas Preheating Project

Steel City Base achieved100% converter gas captureSelf-generated power accounted for

87.8%

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Circular Economy

Shandong Steel emphasizes "green, low-carbon, and recycling," leveragingan industrial cluster advantage in the circular economy. We have developed astandard system encompassing five key recycling chains-solid waste treatment,cascade water utilization, gas resource utilization, cascade waste heat usage, anddeep coal-chemical processing. This system achieves efficient resource utilizationand yields significant economic and social benefits.At the Rizhao Base, we fully utilize coke oven gas and surplus industrial nitrogento produce LNG, synthetic ammonia, and related products-converting 100% ofcoke oven gas into clean energy.During the reporting period, the LNG output totaled 196,900 tonnes, bringingcumulative production since startup to over 1 million tonnes.

Rizhao Base also harnesses low-grade heat sources for district heating in adjacentmunicipalities and aquaculture operations, establishing "steel–municipal" and"steel–fishery" ecological industrial chains. By 2024–2025, it can supply 123,000 GJof surplus heat per year, and once the project is operational, annual external heatsupply will reach 2.07 million GJ.Steel City Base Achieves 100% Waste-Heat Heating. At the Steel City Base, low-temperature waste heat covers heating for 5.5 million m?, benefiting around100,000 residents and saving 77,500 tce annually.

? Renewable EnergyShandong Steel actively explores renewable energy. At the Steel City Base, an on-site survey found roughly 1.5 million m? of rooftop space, with>600,000 m? feasiblefor PV installation. The feasibility study and bidding for the rooftop photovoltaicproject are complete, with~80 MW total capacity and~90 million kWh projectedannual generation, saving~11,100 tce yearly.

Water Withdrawal and Water ConsumptionShandong Steel practices water conservation, scientific use, and rationalconsumption. We have formulated Water System Management Measures andWater Supply and Water Resource Management Measures to ensure compliantwater intake and usage. During the reporting period, the Company held a validintake permit, implemented water-saving measures and projects, enhancedwater-use efficiency, and maintained sustainable resource utilization, with fresh-water consumption of 2.125 m? per tonne of steel Year-on-year decrease of 9.32%,and a water reuse rate over 97%.

Fresh-water consumption

31.75

million m?Fresh-water consumption per tonneof steel

2.125

m?

Materials and Packaging Materials

Shandong Steel rigorously enforces steel packaging standards, with each plant developing its own material management/userules based on packaging quality and business needs. In line with "reduce" and "recycle" principles, the Company cuts packagingconsumption by adopting minimal packaging, improving equipment precision, and increasing recyclable material usage. In 2024,total packaging usage stands at about 50,000 tonnes. Key reduction measures include:

Promoting Reduced PackagingUsing high-strength materialsto ensure product safety whilelowering packaging volume.Subdividing strap lengths cutsoverlap and waste.

Increasing Recyclable

Materials

Through a material substitutionstrategy, the Company tracksindustry trends and expandsrecyclable packaging usage,elevating reusability rates.

Enhancing Equipment

Control Accuracy

By refining the length/widthcutting precision, we reduceoverlap and save materials.

Total installed capacity:

MW

Low-temperature waste heat coversheating for

5.5

million m?Benefiting around100,000

residentsSaving77,500 tce

Expected annual power generation:

approximately

million kWhSaving approximately11,100tceyearly

Steel City Base optimized its water intake model and consistently refined its consumption structure-using about 10,000 tonnes/day of reclaimed municipal water and achieving a 98% industrial recycled-water reuse rate. In 2024, total water intake reachedapproximately 41 million m?, of which~11 million m? came from self-supplied wells and~10.8 million m? from reclaimed sources,fulfilling the plan set by local water authorities.Rizhao Base conducted water-balance testing, set scientific water-saving goals, and pursued R&D on water-saving. We apply"three dry" water-saving techniques: coke dry quenching, gas dry dedsuting of BF, gas dry dedusting of converter-plus BF soft-water closed loops and high concentration cycles, reducing new water intake. Main processes keep a 4–5 concentration multiplierin circulating water. By employing supercritical generator sets with direct seawater cooling and desalination, the Companyreplaces large amounts of fresh water. Post-desalination water is nearly potable, curtailing surface water usage. Per-tonne steelfresh water usage stands at 1.99 m?, maintaining a national leading position in water efficiency.

Solid wastetreatment

Gas resourceutilizationCascade wasteheat usage

Deepcoal-chemicalprocessing

Cascadewaterutilization

Water reuse rate

97.04%

20232024

2.125

Saving Water and Protecting Our Source of Life

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Water Source ProtectionShandong Steel's facilities do not lie within legally designated nature reserves, scenic sites, drinking-water protectionareas, or other specially protected zones. Steel City Base is located in the Yellow River Basin, emphasizing surface waterand unconventional water to reduce groundwater extraction and safeguard water sources. Going forward, the Company willfully implement the CPC Central Committee's Opinions on Comprehensively Promoting Ecological Protection and High-QualityDevelopment in the Yellow River Basin, continuing to tap water-saving potential and contribute to ecological protection in the YellowRiver Basin. Wastewater ManagementShandong Steel has formulated Management Regulations on Wastewater Discharge Control and Supervision and ManagementMeasures for the Operation of Comprehensive Sewage Treatment Stations in accordance with national laws, adopting sourcereduction, process control, and cascade wastewater reuse to boost water reuse rates and reduce external discharge. In 2024,we discharged 6.741 million tonnes of wastewater, with COD at 124.43 tonnes, down 6.46% year on year. Our COD and ammonianitrogen emission intensities were 0.0083 kg/tonne and 0.0002 kg/tonne, respectively, surpassing Level 1 clean-productionstandards.Steel City Base Aiming for Zero Wastewater Discharge. To reach zero discharge, Steel City Base applies biochemical treatment,CDRO membrane treatment, and other processes, reinforcing water-saving and cascade reuse for balanced wastewatergeneration and consumption. The coking plant, special steel plant, and section steel plant have completed rain-sewageseparation, achieving zero discharge control. A coking wastewater deep-treatment reuse project (BOO mode), completed inSeptember 2024, uses a "dual-mode + salt extraction" process. First-stage RO product water goes to the circulating system, whileconcentrated brine is further processed for industrial sodium chloride. Some salt brine undergoes additional treatment to meetslag flushing or coke quenching demand, maximizing wastewater reuse.

Rizhao Base follows a "fresh-water source reduction, cascade reuse in processes, wastewater treatment and recycling" pathway,combining decentralized and centralized treatment for deeper wastewater processing. This ensures zero discharge:

Case: Rizhao Base Seawater Desalination ProjectRizhao Base employs reverse osmosis desalinationwith a 20,000-tonne/d design, diversifying water supplyand improving its security, while lowering wastewatergeneration and contributing significantly to zerowastewater discharge.

Coking phenol-cyanidewastewater deep treatment:

Integrating "biochemical +ozone catalytic oxidation +reverse osmosis," meetingdirect-discharge standards,reusing substantial freshwater in coking, and fullyutilizing concentrated brine.

Acid/oil wastewater deeptreatment in cold rolling:

With distinct streams ofoil emulsion, leveling fluid,diluted oil, acid waste,coatings, etc., the Companyuses a scientifically chosencombination of biochemical,MBR, ultrafiltration, and RO.Reclaimed product waterreplenishes circulation, andall brine is utilized.

Comprehensive wastewater treatmentplant: Plant-wide industrial and domesticsewage is collected, desalinated via RO,and the high-quality product water goesto main production. Concentrated brineis used for slag flushing, realizing zerodischarge. By classifying users, couplingwater quality/quantity, and building bufferfacilities, we fully use the standard-compliant effluent for BF slag flushing orconverter slag quenching, minimizing freshwater usage.

Recycling and Enhancing Solid Waste Disposal

Waste Management

Shandong Steel strictly complies with national laws, including the Law on Prevention and Control of Environmental Pollution by SolidWastes and the Standard for Pollution Control on the Storage and Disposal Site for General Industrial Solid Wastes (GB18599-2020).Considering its specific operational context, the Company has formulated the Measures for Solid Waste Management, Measuresfor Hazardous Waste Management, Standards for Hazardous Waste Management, and Management Measures for the Disposal ofHazardous Waste and General Industrial Solid Waste Class 1 Materials, thereby strengthening and refining its solid waste recyclingindustrial chain and management system. Through source-based waste reduction controls and professional recycling andutilization management, the Company has achieved 100% lawful and compliant disposal or utilization of solid and hazardouswastes, continuously improving resource utilization levels.

Case: Steel City Base Achieves Zero Wastewater Discharge in the Section Steel Area

We transformed the water output pipeline of the section steel sewagetreatment station to fully utilize its treated water. Hourly fresh waterconsumption fell by 100 t/h, wastewater discharge fell by 85 t/h, saving876,000 tonnes of industrial fresh water and reducing wastewater by744,600 tonnes annually, along with 900 tonnes less industrial salt usage,effectively advancing zero discharge in the section steel area.

2024 Sustainability ReportTransition to Green Development, Painting a Scroll of Blue Waters and Clear Skies

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IndicatorUnit20232024Scrap steel recycling rate%100100

Waste generation1,000 tonnes9,3068,340Gerneral waste generation1,000 tonnes8,9357,953Gerneral waste recycled1,000 tonnes8,9217,945Hazardous waste generation1,000 tonnes371386Hazardous waste of harmless disposal1,000 tonnes371386Waste Recycling Rate%95.8695.27

Established a non-metallic solid waste resourceindustry chain centered around building materialsproduction lines, utilizing patented technologydeveloped by Academician Xu Delong to constructa slag powder production line. This line utilizesapproximately 3.2 million tonnes of blast furnace slagannually, achieving 100% resource utilization.Independently developed technology for extractinggraphite carbon from desulfurization slag achievedbreakthroughs, becoming the first in China withan annual processing capacity of 100,000 tonnes.This project annually extracts over 3,000 tonnes ofindustrial-grade graphite carbon with purity meetingor exceeding 90%, enabling high-value utilization ofdesulfurization slag.

Realizing 100% eco-friendly recycling of steel slag,the iron-containing steel slag recovered per tonne ofsteel remained consistently above 0.7 kg, providingstrong support for circular economy and reducingsteel consumption.

Established processes such as briquetting and reuseof steelmaking dust removal ash, direct reuse of zinc-containing dust through rotary kilns, and recyclingdust with fewer harmful elements directly back intosintering. Annually, approximately 750,000 tonnes ofvarious dust and sludge are recycled, achieving 100%recycling of iron-containing waste.

Harmonious Coexistence, Safeguarding Biodiversity

Biodiversity underpins human survival and development, closely affecting food security, quality of life, economic progress, anddisease prevention. Shandong Steel strictly complies with international, national, and local regulations on biodiversity protection,ensuring all business activities meet regulatory standards and proactively avoiding operations in areas of high biodiversity value.At the same time, we uphold the ecological red-line policy and prohibit construction projects near national ecological protectionzones, working concretely to maintain ecological balance.While pursuing production and operations, the Company aims to build a "garden-style" plant-taking into account the suitabilityand diversity of plant species, actively organizing tree-planting, accelerating environmental restoration, and greening factorygrounds. By 2024, we increased green coverage to 26%.

In 2024, the Company generated 8.3395 million tonnes of waste, down by

10.5% year-on-year. The utilization rate reached 95.27%. Non-hazardous waste

generation was 7.9534 million tonnes, all of which achieved resource recoveryor authorized disposal. Hazardous waste generation was 386,100 tonnes, all ofwhich were managed through compliant external disposal.

Total waste generationdecreased by

10.5%

year-on-yearThe utilization rate reached

95.27%

Rizhao Base has formulated an action plan forachieving "zero discharge of solid waste," specifying20 management improvement measures and threekey environmental renovation projects. Progress hasbeen made through optimizing steelmaking ladleturnover rates, increasing from 1.6 to 1.8; reducingfurnace lining material consumption, decreasingsteel slag generation per tonne of steel from 0.142tonnes to 0.129 tonnes. In August 2024, sludgefrom rolling water treatment began to be reused;in September, waste emulsion liquid underwentrecycling.

Steel City Base has implemented multiplemeasures, including steel slag generationreduction, briquetting and recycling of steelmakingsludge and dust, and the high-value utilization ofcarbon-and iron-containing resources such ascoke dust and iron oxide scale. Through optimizingthese processes and reusing resources effectively,including recycling fine powder in rotary kilns andcoking dust and iron oxide scale, the Companycontinuously improves the efficiency and level ofsolid waste recycling and resource utilization.

Rizhao Base

Steel City Base

Case: Cross-Industry Solid Waste Resource UtilizationShandong Steel actively explores and practices innovative models for cross-industry solid waste recycling, particularlytargeting red mud generated in the electrolytic aluminum industry. In 2024, through technological innovation andprocess optimization, the red mud utilization project was successfully implemented, achieving the utilization of over100,000 tonnes of red mud. This significantly enhanced the cross-industry recycling of solid waste resources, openingup new avenues for green development. Solid Waste Recycling and ReuseShandong Steel actively promotes a "zero discharge" approach by recycling waste resources internally. The Company utilizes ironoxide scale and scrap steel as main raw materials to foster a powder metallurgy industrial chain, and leverages blast furnace slagand other solid waste resources to build a non-metallic solid waste utilization base centered on building materials productionlines. We emphasize the recycling of iron-and carbon-containing resources, greatly improving resource efficiency.

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Case: Rizhao Base Invites Citizens to Experience Green Shandong Steel

At the Steel City Base, Dawen River National Wetland Park (AA) represents a prime example of integrated factory-city governance,reflecting a harmonious relationship between the steel industry and the natural environment. The Dawen River Basin is a havenfor wildlife-particularly bird species such as white storks, egrets, and mallards that are frequently spotted in the wetland park,vividly illustrating the allure of biodiversity.

Case: Welcoming Spring and Planting New Green-Active Tree-Plantingfor a Greener Home

In March 2024, the Company organized 100 cadres and employees fora volunteer tree-planting event, cultivating fresh green hopes for abeautiful Steel City. Nearly 3,000 seedlings of 10 varieties (includingginkgo, cherry blossom, and white pine) were planted across 3,500 m? ofnewly greening space.

To further demonstrate environmental results and build a positive social image, in June 2024, the Rizhao Base andKui'an Community together held an environmental-awareness event in Jinyu Jiayuan Community. We distributed theCitizens' Code of Conduct for the Ecological Environment (Trial) and Green Shandong Steel brochures, explaining eco-friendly behaviors and garbage classification. Community representatives, employees' families, and others visitedthe exhibition hall, Ironmaking Square, Ore Town, and a coastline restoration demonstration site, where the beautifulenvironment, intelligent production lines, and advanced processes drew wide acclaim for Rizhao Base's environmentalaccomplishments.

The Rizhao Base leverages its coastal advantage to developa National AAA Tourist Attraction. Over 120 plant specieshave been cultivated, attracting more than 20 bird species(e.g., magpies, turtledoves) to settle here, composing agreen tableau of "a plant amid forests, and people amidscenery."

2024 Sustainability ReportUniting and Building a Harmonious Society Together

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Uniting and Building aHarmonious Society Together

True social wealth is not only reflected in the abundance of goods, butalso in the fact that everyone can earn a decent living through his orher own labor. This equitable system of distribution is the foundation ofsustained social prosperity.

?Adam Smith, The Wealth of Nations

Innovation-Driven, Unleashing Development MomentumHigh-Quality Products to Establish the Market and Builda Series of Brands Win-Win Cooperation, Deepening Supply Management Excellent Quality, Forging Customer Value

Information Security, Strengthening Data Defense People-Oriented, Building a Better Home Together Putting Safety First, Protecting Occupational Health Caring for Society, Ful?lling Responsibilities

Society

2024

2024 Sustainability ReportUniting and Building a Harmonious Society Together

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Provincial/ministerial

-level platforms

School–enterpriseinnovation platforms

Municipal science andtechnology innovationplatforms

Innovation-Driven, Unleashing Development MomentumShandong Steel embraces an innovation-driven development strategy, furthering the approach of "talent-driven, collaborativeinnovation, and leveraging intelligence for market success." By continually refining its scientific and technological innovationsystem, enhancing its R&D capabilities, and accelerating digital transformation, the Company strives to cultivate corecompetencies with independent intellectual property rights, advance key industries, and stimulate its intrinsic vitality.

●Innovative Talent CultivationShandong Steel revised its scientific and technological innovation management policies- such as the Measures for theManagement of Scientific Research Projects and the Evaluation and Incentive Criteria for Scientific Research Projects- improvingcareer development channel for R&D personnel and establishing a multidimensional evaluation system with a performance-based appraisal model. By optimizing its reward framework, the Company spurs innovation and promotes the conversion ofscientific achievements. Rigorously observing academic and ethical norms, Shandong Steel consistently undertakes high-qualityresearch and technological innovation, shaping a "tech for good" culture with appropriate safeguards.Focusing on core, cutting-edge technologies, Shandong Steel fosters top-tier talent development through major R&D initiativesand competitive programs. At present, the Company hosts several specialized teams.

Uniting and Buildinga Harmonious Society Together

Shandong Steel actively fulfills its social responsibilities and remains committed to a "user-centered" philosophy.Through continuous R&D innovation and technological advancement, the Company ensures excellent productperformance and steadily propels its transformation toward green and intelligent operations. By offering diverse,customized services closely aligned with customer needs and relying on a robust supply chain, Shandong Steelguarantees product quality. The Company also places great importance on employee growth, providing broadcareer development channel and a comprehensive training system that maximizes employees' potential. Inaddition, Shandong Steel enthusiastically participates in social welfare activities, contributing to social harmonyand progress.

National-level scienceand technology innovation

platforms

R&D Innovation System

Shandong Steel has established an integrated R&D and innovation framework, formulating the Measuresfor theManagementof Science and Technology Innovation Projects and the Implementation Plan for Deepening Reforms in the Science and TechnologyInnovation System to facilitate resource aggregation and efficient R&D. The Company optimizes its organizational structure,fosters cross-base collaboration, and develops specialized industry experts who actively engage at the frontline to expeditethe practical application of scientific achievements. By creating a good atmosphere for innovation and stimulating employees'innovative potential , Shandong Steel infuses sustainable development with new momentum.● Collaborative Innovation PlatformFollowing the principle of "high-end drive and technology leadership," Shandong Steel concentrates on both on-site operationsand market demands, with an emphasis on four key directions: high-end, intelligent, green, and efficient. The Company increasesthe proportion of R&D investment, driving high-quality development. It also deepens industry–academia–research–applicationcooperation, building national, provincial, and municipal multi-level innovation platforms- such as a national enterprisetechnology center and a Shandong Province academician workstation- and forming joint laboratories and collaborative innovationcenters with major universities, institutes, and downstream users. Leveraging these internal and external R&D resources,Shandong Steel realizes collaborative innovation and provides strong support for ongoing sustainability.

High-end Driveand Technology

LeadershipHigh-end

IntelligentGreen

E? cient

During the reporting period, the "Key Laboratory of Advanced Iron and Steel Materials and Processes in Shandong Province," ledby Shandong Steel, was approved as a provincial key laboratory. Its mission is to form a holistic innovation pipeline- from basicsteel research through technological breakthroughs and on to commercialization- driving the steel industry's green, low-carbon,high-quality development. Additionally, the "Jinan Key Laboratory of Digital Intelligence Steel Technology" was recognized as the2024 Jinan Key Laboratory, laying a strong foundation for further enhancing the core competencies required to convert scientificachievements into real-world applications.

In 2024,the Company invested RMB

2.708

billion in R&D,with

3.3%

of operating income.

The Rizhao Base Plate Research

Institute received the

User technology application team

was honored as a

National May 1 Women's Model PostRizhao Most Beautiful Science and Technology Worker (Team).

In 2024, the Laiwu Automation Branch of Shanxin Software was recognized as a "Specialized, Sophisticated, Distinctiveand Innovative" SME in Shandong Province.

2024

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First Prize in Metallurgical Science and Technology

"Development and Application of Key Continuous CastingTechnology for Green Manufacturing of High-Performance

Wide and Thick Plate"

First Prize in Metallurgical Science and Technology"Next-Generation Wear-Resistant Steel Based on TiC

Control and Its Engineering Application"

Second Prize of the National Science and

Technology Progress Award

"Development and Application of Key Common Technologyfor Electromagnetic Regulation of Large Metal Billet

Preparation"

First Prize of the Shandong ProvincialTechnical Invention Award"Multi-Level Structure Design and Coupling DamageProtection Technology for Materials in Extreme

Environments"

Second Prize for Metallurgical Science and Technology"Multi-Information Fusion of High-Temperature ContinuousCasting Slab Surface On-line Inspection Equipment and Key

Technologies in Quality Optimization"

First Prize in Metallurgical Science and Technology"R&D and Application of Electromagnetic Cyclone and ItsMulti-Stage Coupled Electromagnetic Driving Technology"

● Industry Standard SettingIn 2024, Shandong Steel led or participated in formulating 22 standards (including 2 industry standards submitted for approvalbut not yet officially released). Among these, the Company hosted 3 national standards, 4 industry standards, and 8 groupstandards, while participating in the development of 3 national standards, 2 industry standards, and 2 group standards. Amongthem, the following two are representative:

● Scientific and Technological Achievement AwardsIn 2024, Shandong Steel earned: 1 Second Prize of the National Science and Technology Progress Award, 44 MetallurgicalScience and Technology Awards ,including 14 First Prizes; 25 Shandong Province Metallurgical Science and Technology ProgressAwards, including 6 First Prizes. 5 awards in the Shandong Province Employee Innovation and Efficiency Creation Competition.During the reporting period, the Rizhao Base received 1 Third Prize in the 11th Huaihai Science and Technology Award and 2 FirstPrizes in the Rizhao Science and Technology Achievement Awards.

Continuing to break through coretechnologies, Shandong Steel hasformed new collaborative models linkingupstream and downstream segments ofthe industrial chain, thereby advancing thestandardization and commercialization ofinnovative outcomes. In the prefabricatedsteel structure field, the Companyco-drafted and finalized the nationalstandard Hot Rolled Steel for PrefabricatedSteel Structure Buildings (GB/T 43893-2024), aligning material and engineeringstandards, enabling the adoption ofhot-rolled steel in low-carbon, high-efficiency prefabricated constructions, andaccelerating rapid industry growth.

The Company also promotesthe standardization of advancedprocesses and inspection methods,furnishing technical support forgreen, efficient steel industryproduction. Under Shandong Steel'sleadership, the national standardDetermination Method of AssimilationProperties of Iron Ore (GB/T 43877-2024) provides steel enterprises withunified, scientifically rigorous testingmethods for iron ore assimilation.This method significantly optimizessintering ore blending, enhancessinter strength, cuts costs, and guidesthe procurement of iron ore.

Scientific, Technological, and Innovative AchievementsTo integrate technological and industrial innovation, Shandong Steel harnesses R&D as the key driver of industrial advancement,expanding the practical application of scientific achievements. In 2024, the Company organized 112 science and technologyprojects, applied for one National Key R&D Project, and obtained one project approval from Shandong Province for scientificresearch.● Intellectual Property ProtectionStrictly complying with the Patent Law of the People's Republic of China, Shandong Steel has implemented internal regulationssuch as the Patent Management Measures and the Patent and Technical Secrets Management Measures. Aligning with RSS18005Patent Management Standards for patent filing, examination, and evaluation, the Company prioritizes value creation to guidepatent and R&D achievement management. By establishing a system that measures contributions to scientific innovation,Shandong Steel safeguards intellectual property and ensures effective oversight of patents and technological accomplishments.In 2024, the Company applied for 544 patents, including 381 invention patents, and 163 utility models.

with

Invention patentsShandong Steel held1,662valid patents in total

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In June 2024, the Shandong Province Metallurgical MachineryIndustry Chain Innovation Studio Alliance commenced itsconstruction and exchange activities at Shandong Steel, animportant initiative to foster industrial innovation collaboration.This alliance aims to dismantle technical barriers amongenterprises, create a shared training resource system, andenable "face-to-face" exchanges between supply and demand.By forging a new collaborative innovation platform, memberscan jointly resolve the technical challenges restricting industrygrowth.

Case: Shandong Province Metallurgical Machinery Industry Chain Innovation Studio Alliance Established at Shandong Steel

In August 2024, Shandong Steel secured 8 awards at the Shandong Province "Elite Talent for a Strong Shandong" InitiativeExchange Exhibition and the 20th Shandong Youth Vocational Skills Competition (Innovation and Efficiency Special Category)Finals. The awards include 1 gold award in the technical innovation category, 3 silver awards in the R&D innovation category, and4 bronze awards in the technical innovation category.

?Hot Stamping Steel: Used in hot-stamping processes, which- compared with cold stamping- can produce ultra-

high-strength automotive body components. Featuring excellent formability, high dimensionalaccuracy, and high strength, hot-stamping steel is one of the top choices for lightweightautomobiles.?DH Steel: An enhanced-formability dual-phase steel that excels in meeting automotive lightweighting and safety

standards. Compared with traditional dual-phase steel, DH steel more readily fulfills the requirements forproducing complex, high-ductility parts; compared with TRIP steel, it features lower alloy costs. It can bebroadly utilized in hood inner and outer panels, door outer panels, A-pillars, front longitudinal beams, andmany other components.?High-Strength Wheel Steel: Attaining the highest domestic level in cold-forming processes, this steel exhibits

outstanding welding and fatigue performance and is widely used in manufacturing 29.5kg lightweight commercial vehicle wheels.?High-Strength Corrosion-Resistant Steel Strip: Q550NQR1 is primarily applied in railway carriage plates and stands

as the highest grade in the Railway Carriages with AtmosphericCorrosion-Resistant Steel standard, offering high strength,excellent low-temperature impact toughness, and atmosphericcorrosion resistance. Suited to extreme climates, it reduces vehicleweight and extends service life, reflecting the industry's "green,low-carbon, lightweight" development trend.

?Pipeline Steel: Combining high strength, good toughness, weldability, and stable formability, pipeline steel uses

a low-carbon micro-alloy design and controlled rolling/cooling processes- "using water instead ofadding costly alloy elements"- to minimize alloy consumption and comply with green manufacturing.It is extensively used for transporting crude oil, refined oil, natural gas, synthetic gas, coal waterslurry, and other media on land and at sea.

Typical Products

Section Steel. These products find extensive applications in building structures, high-end equipment, engineering machinery,and bridge or tunnel support, positioning the Company as a leading domestic producer of corrosion-resistant and low-temperature-resistant section steel. Shandong Steel has supplied large quantities of specialized H-beams for numerouselectrified railway projects in China and participated in formulating relevant national standards. Additionally, we can provide a fullrange of specialized low-temperature-resistant steel sections for extremely cold regions, with our products successfully appliedin significant international engineering projects in the Arctic.Plates Segment. In this segment, we offer customers a broad range of plate products- covering high-strength structural steel,wear-resistant steel, bridge steel, and shipbuilding steel- to meet the requirements of construction, machinery manufacturing,transportation, and other sectors.Hot-Rolled Steel. Our hot-rolled steel products are widely used in automotive manufacturing, oil and gas pipelines, and otherfields due to their high strength, excellent toughness, and robust formability. Shandong Steel has successfully developedhigh-performance offerings such as large-deformation-resistant pipeline steel hot-rolled coils and hot-rolled duplex steel forautomotive use, filling industry gaps and meeting market demand for high-quality hot-rolled steel.Specialty steel segment. our products are mainly applied in equipment manufacturing industries such as automotive, construction

machinery, railway, and mining equipment manufacturing. We provide specialty steel products compliant with national standards,American standards, industry-specific standards, as well as customized specifications according to customer requirements. Ourproduct portfolio has gradually developed into six major series: gear steel, automotive structural steel, construction machinerysteel, steel for wind power and energy applications, bearing steel, and tool and die steel.Cold-rolled segment. our products are characterized by cutting-edge technology and exceptional quality, covering high-precisionmaterials such as pickled coils, cold-rolled coils, and galvanized coils (GI coils), widely used in automotive and home applianceindustries. Our products offer outstanding surface finish, dimensional accuracy, and mechanical properties, with consistentquality ensured through rigorous quality control systems. Leveraging advanced production equipment and mature processtechnologies, we provide customized lightweight and high-strength solutions, driving industrial upgrading. Innovative Technology Exchange

Shandong Steel is dedicated to forming an open, collaborative chain encompassing innovation, industry, and supply, withthe goal of consolidating diverse resources, stimulating innovative energy, and advancing overall industry development. TheCompany actively participates in and hosts various technical exchange events, conferring with both internal and externalpartners to discuss steel industry trends, deepen industry–academia–research cooperation, and jointly propel the steel sector'stransformation, upgrading, and high-quality development.

High-Quality Products to Establish the Market and Build a Series of Brands

Shandong Steel supports national strategies, key projects, and major engineering initiatives by continually focusing on productinnovation. This not only broadens our product portfolio but also raises technological content and added value, contributingsignificantly to the country's economic development and infrastructure construction. Our products span multiple premiumsteel categories- such as section steel, special steel, hot-rolled wheel steel, pipeline steel for special service environments,automotive beam steel, and steel for photovoltaic supports. Meanwhile, in the plate segment, high-strength wear-resistant steel,container steel, and ultra-high-strength offshore steel are also crucial directions of innovation.

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Shandong Steel leads in developing Q345qE/qD H-beams and channelsteel for bridges, demonstrating robust technological innovation. Backedby strong technical guarantees, we have effectively solved performancehomogeneity challenges- achieving Z-direction performance50% and ayield ratio0.80 for high-rise building steel- ensuring stability and safetyunder complex stress. These products are widely applied in numerous majorconstruction projects at home and abroad, including landmark bridges suchas Padma, Changtai Yangtze River Bridge, and Tongzi River Bridge underthe "Belt and Road" Initiative, as well as the National Stadium (Bird's Nest),Beijing Winter Olympic Stadium, Daxing International Airport, Hong Kong-Zhuhai-Macao Bridge, the Urumqi Ring Road Bridge, and the ChangshenExpressway Bridge. With their excellent quality and performance, ShandongSteel has earned two Third Prizes of the Shandong Provincial Science andTechnology Progress Award, garnering high recognition within the industry.

Shandong Steel independently developed Fore-Rolling digital simulationtechnology, reaching an internationally advanced level. We offerseven series of triple-tooth, double-tooth, and single-tooth crawlerplates (L3W135/154/171/175, L3S190/216, L2W228) featuring excellentperformance, including a hardenability bandwidth controlled withinJ1.58HRC, hardness255HB, and a decarburization layer0.5 mm. Ourproducts serve leading enterprises such as Sany, XCMG, and Shantui.Focusing on breakthroughs, the Company introduced China's largest-spec317 single-tooth track plate, ending foreign monopolies in the field. We alsowon the Second Prize of the Metallurgical Science and Technology Awardand led the development of industry standard YB/T 5034 Hot Rolled Profilesfor Crawler, showcasing our leadership and technical strength in crawlerprofiles.

Case: Section Steel for Bridges and Building Structures

Case: Crawler Pro? les

Shandong Steel successfully developed Q500qE high-gradebridge steel, bridging the gap in mass application of top-levelbridge materials in China. This product was deployed at theQingyun–Zhangqiu Expressway Yellow River Bridge project.With outstanding performance meeting various specializedrequirements, it not only raises China's bridge constructionstandards but also strengthens national infrastructure efforts.

The company has successfully developed martensitic steelwith tensile strength levels above 1000 MPa, specifically theCR700/980MS and CR950/1180MS grades. This achievementfills the gap at the Rizhao Base for ultra-high-strengthsteels suitable for cold forming. These steel grades arecharacterized by high strength and low production cost, mainlyapplied in lightweight commercial vehicles. With the growthof the new energy vehicle market, these steels have graduallyfound applications in battery packs, significantly supportingthe lightweight development of commercial vehicles and newenergy vehicles.Case: Successful Development of Q500qE High-Grade Bridge Steel for World-Class Construction

Case: Martensitic Steel with Tensile Strength Above 1000 MPa

Shandong Steel has achieved remarkable results in steel forautomotive structural parts. Our quenched and temperedsteels have been certified by SAF-Holland, Daimler-Benz, DanaIncorporated, and Shaanxi Automobile Group, meeting globalhigh-end standards. Meanwhile, non-quenched steels, certifiedby ThyssenKrupp, have entered the EU market and are used byVolvo, Volkswagen, and BMW, earning worldwide recognition.Non-quenched steel also received the "Golden Cup Award" formetallurgical product quality.On the innovation front, we hold 11 authorized invention patents and actively participate in setting national andindustry standards to facilitate industry progress. Addressing challenges with sulfur-containing steels, the Companydeveloped Ca-Mg composite treatment technology to overcome technical bottlenecks and enhance steel quality.By regulating sulfide morphology, the lateral impact toughness and machinability of non-quenched steel aresubstantially improved, further suiting high-end automotive manufacturing needs.

Case: Steel for Automotive Structural PartsThe Company leads domestic R&D and production of 600–635 MPa high-strength seismic rebar (specificationsΦ12–Φ32 mm), employing V/N ratiocontrol to raise strength and seismic performance. Using 600 MPa hot-rolled seismic rebar in large public buildings and civil defense undergroundprojects can save 20%30% in steel and cut costs by over 15%. For instance,the Wuhan Dongxihu Sports Center fully leveraged the advantages of thishigh-strength rebar to achieve notable green and economic benefits.Additionally, these products are widely used in the Daya Bay Nuclear PowerStation, Pudong International Airport, the Three Gorges Project, and theNational Stadium (Bird's Nest), the Qingdao-Lianyungang Railway, JiaozhouAirport, the Pingtan Bridge in Fujian Province, Haier Real Estate, and otherlarge structures.

The Company successfully developed a large-deformation-resistant pipeline steel hot-rolled plate, addressing the industryshortfall in producing such materials on hot rolling lines andproviding a solid foundation for national oil and gas pipelineconstruction. These products were applied in the seismicrupture zone of the second phase of the Shaanxi Natural GasTongbaitong Project, demonstrating excellent performance andstability, and yielding significant economic and social benefits.This achievement represents an important step forward inChina's high-end pipeline steel materials sector.

Case: Assisting Major National Projects with High-Quality, High-Strength Rebar

Case: Breakthrough in Large-Deformation-Resistant Pipeline Steel Hot-Rolled Plate,

Boosting National Energy Construction

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Priority-level (A) suppliers

1637Regular-level (B) suppliers

Class C suppliers

Win-Win Cooperation, Deepening Supply ManagementShandong Steel attaches great importance to stakeholder rights and interests, devotes itself to building a stable, sustainablesupply chain system, and leverages digital platforms to foster an efficient cooperative environment. By jointly assuming greendevelopment responsibilities with suppliers, the Company achieves win-win growth with its partners. Supplier Management System

The Company strengthens the management effectiveness of its supply chain system and advances the construction of itsprocurement framework. It strictly complies with the Bidding and Tendering Law of the People's Republic of China and otherrelevant laws and regulations, comprehensively optimizing the Sunshine Purchasing and Sales Management InformationPlatform to ensure all operations remain legal and compliant. Relying on the core resources of SISG, the Company is committedto building an integrated supply chain collaboration, innovation, and development service platform that ensures solidity, trust,and sustainable, healthy growth across the supply chain.

●Supplier Management MechanismsThe Company implements responsible supply chain management, having successively revised Management Measures for MaterialProcurement (Trial), Management Measures for Material Quality Objections, and other relevant systems. Adhering to the principlesof "transparency, standardization, and efficiency," we have built a healthy, sustainable supply chain ecosystem encompassingmultiple dimensions: diversified supplier sourcing, systematic assessment, rigorous credit evaluation, precise grading, and afair penalty mechanism. From supplier admission- undergoing strict evaluation and review- through to exit management, theCompany enforces full-process oversight and closed-loop administration to ensure supply chain vitality.

Supply Chain Risk Management

The Company incorporates supply chain risk management into its corporate development strategy, aiming for stability, efficiency,and reduced risks. We have formulated and issued the Notice on Adjusting the Approval Process of Sunshine Purchasing and SalesPlatform, the Notice on Standardizing the Management of Bidding and Public Procurement Evaluation Process, and the Notice on theManagement and Operation of Raw Material Suppliers on PLMS, continuously standardizing business processes. Through marketresearch, supplier assessments, logistics monitoring, and digital platforms, we identify, evaluate, supervise, and respond tosupply chain risks, ensuring timely and effective risk management to comprehensively prevent supply chain vulnerabilities.

The Company prioritizes adopting energy-conservingand environmentally friendly new technologies andprocesses, as well as selecting suppliers with strongsocial responsibility awareness, in its procurementdecisions. Requirements related to "ESG and socialresponsibility awareness" are included in supplieradmission assessments and annual evaluations.Going forward, we will gradually establish a greenprocurement system, incorporating carbon footprintrequirements into procurement as needed, reinforcingenvironmental standards for suppliers, and encouragingthe entire supply chain to fulfill environmental and socialresponsibilities.

In 2024, the Company conducted supplier due diligenceto analyze environmental and social risks, includingenvironmental management and occupational safetyissues, as well as potential violations or administrativepenalties involving taxation, environmental protection,and work safety. Based on the risk analysis results,we apply tiered controls and perform on-site audits toevaluate supplier performance. During the reportingperiod, over 500 suppliers underwent annual duediligence audits.

The Company comprehensively evaluates and categorizes suppliers into fivegrades- A, B, C, D, and E- based on assessment results. Among these, 167suppliers are priority-level (A), 1,637 are regular-level (B), and 175 are in ClassC. Class D indicates unqualified status (restricted or probationary), and Class E isprohibited. If the evaluation result is D or E, the Company revokes the supplier'squalified status. In 2024, we conducted evaluations on 14,142 contracts/orders(covering 1,979 suppliers) with an excellence rate of approximately 8.5%.● Supplier ESG Management

Green ProcurementSupplier Due Diligence

Responsible Minerals

Management

The Company has a strictsupply chain managementsystem to ensure all rawmaterials and componentscome from legal, reliablesources. We commit not tousing any conflict minerals andrequire suppliers to pledge thattheir products do not containconflict minerals from high-riskareas.

Supplier Integrity

The Company and its partners collaboratively build a"transparent and open" industrial supply chain, organizingthe signing of Integrity and Honesty Agreements toemphasize commercial ethics and uphold the bottom lineof honest, trustworthy operations. In 2024, we held fivejoint integrity-building sessions with suppliers, achieving a100% signing rate of integrity agreements and promotingsocial responsibility concepts in environmental protection,safety, health, and anti-corruption. This fosters mutualimprovement in quality and shared integrity.Procurement Digitalization PlatformThe Company advances procurement digital transformation, leveraging the centralized procurement scale of both SISG andChina Baowu Steel Group. By relying on digital procurement platforms- such as the Sunshine Purchasing and Sales ManagementInformation Platform, Raw Material Procurement and Logistics Management System (PLMS), Procurement Supply Chain System(PSCS), OBE E-shopping, and OBE Mall- we efficiently coordinate the centralized procurement of bulk raw materials, fuels, spareparts, and engineering equipment, achieving resource sharing, transparent purchasing, cost reduction, and enhanced efficiency.This strengthens risk management and improves overall supply chain service quality.

In 2024, 60% of the Company's suppliers obtained certifications in quality management, environmental

management, and occupational health and safety management systems.

Rizhao Base Intelligent Control Center

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Protecting the Rights and Interests of SMEsThe Company employs a unified e-procurement platform with open operations and controlled processes. We continuouslystandardize platform procurement practices to ensure compliance with established standards and procedures. In procurement,the Company treats suppliers in good faith and provides equitable opportunities for SMEs to participate. Simultaneously, werespond actively to the Regulation on the Protection of Payments to SMEs, making prompt payments to SMEs and safeguardingtheir legitimate rights and interests.

Industry Exchange and Development

●Internal CoordinationThe Company fully leverages internal resources, enhancing business synergy and cooperation. We continuously deepen closecollaboration with the China Baowu Steel Group procurement system and internal enterprises of SISG, improving resourcesynergy and structural optimization. In 2024, the Company's production bases and SISG's internal enterprises collectivelypromoted 35 synergy projects. Additionally, the Rizhao Base Raw Material Procurement Center and Baosteel Raw MaterialProcurement Center achieved effective resource sharing, joint market analysis, and simultaneous bidding and procurement,increasing overall operational efficiency.

In December 2024, Shandong Steel held an integration management promotion meeting for industrial product

procurement and signed an entrustment management agreement. This collaboration leverages OEI's professional

advantages in procurement management, enabling shared resources, channels, and talent between both parties. The

Company attaches great importance to this agreement and looks forward to further optimizing steel procurement costs,

improving procurement efficiency, enhancing supply chain service quality, and strengthening risk management via this

partnership.

Case: Industrial Products Procurement Integration Management Promotion Meeting and EntrustmentManagement Agreement Signing Ceremony

In November 2024, Shandong Steel andOuyeel co-hosted the 2024 Annual SteelStructure Industry Supply-DemandMatchmaking Conference, aiming to build anindustry chain exchange platform, facilitatein-depth dialogue and collaboration betweenthe supply and demand sides, explore newmodels of industry cooperation, and seekfuture development opportunities. It was alsoa key initiative to establish a collaborativeinnovation ecosystem and promote high-quality development of the industry.

In December 2024, Shandong Province organizedthe 2024 "Ten Chains, One Hundred Groups,Ten Thousand Enterprises" advanced iron andsteel and supporting industries chain-fusingexchange in Rizhao. The Rizhao Base releasedits latest scenario cooperation lists, productmatching demands, and technical improvementprocurement requirements. The "Ten Chains,One Hundred Groups, Ten Thousand Enterprises"special action aims to enhance the driving forceof "chain-master" enterprises, pulling upstreamand downstream partners to accurately build,supplement, extend, and strengthen the supplychain. This significantly bolsters the stabilityand competitiveness of the industrial andsupply chains, fueling high-quality economicdevelopment.

Case: Shandong Steel Jointly Hosted a Steel Structure Industry Supply-Demand Matchmaking Meeting

Case: Rizhao Base Participated in Shandong Province's 2024 "Ten Chains, One Hundred Groups,Ten Thousand Enterprises" Advanced Iron and Steel & Supporting Industries Chain-Fusing Exchange

●External Collaboration

Shandong Steel strives to strengthen synergy and cooperation with suppliers, customers, and partners, enhancing supply chainresponsiveness through information sharing, resource integration, and process optimization. We also explore supply chainfinancial services, providing financing support for suppliers to reinforce collaboration and linkages throughout the industry chain,jointly building a supply chain ecosystem that fosters win-win development.●Industry ExchangesThe Company actively organizes and participates in various industry activities, focusing on sector development hotspots andour own business needs. This approach promotes an environment of mutual learning and collective progress, injecting freshmomentum into the steel industry's high-quality development.

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?"Tempered High-strength Oil Storage Tank Steel Plate for Large Heat Input Welding" waslisted among the "Made in Shandong · Qilu Excellence Products."?"Innovation and Practice of Digital Quality Control in the Whole Process of Iron and SteelEnterprises" won the Second Prize of the Quality Technology Award from the China QualityAssociation.?Low-alloy high-strength structural hot-rolled H-beam steel products were selected as partof the first batch of "Spring City Good Products" in Jinan, further enhancing Shandong Steel'sbrand image.?"High-Temperature Continuous Casting Slab Surface Online Inspection and QualityOptimization System" was included in the Jinan New Quality Productivity Digital ScenarioRecommendation List.

●Fine Control of Product QualityIn line with our principle of integrated quality management, the Company continuously advances quality management innovation.We have formulated control measures across the entire chain of user demand identification, order review, product design,process control, interface management, logistics, warehousing, and transportation, always prioritizing user satisfaction. Throughthese optimized quality management practices, we maintain highly stable product quality. In 2024, our scrap, defect, and spot-sales rates all outperformed the annual targets.

Process QualitySupervision and Audit

Promoting Ultra-Stable

Product Quality

Carrying Out SupplierQuality ManagementQ

Product Quality Assessment

and Research

Improving the Product Recall andImprovement System

The Company has built a comprehensive "quality gate" management systemcovering crucial steps from incoming raw materials to production, logistics, andwarehousing, with 5,014 "quality gates" and 137 processes in total, shifting frommere result evaluation to real-time process monitoring. We've also establisheda process quality inspection system that strengthens oversight throughout rawmaterial intake, manufacturing processes, and product production.The Company introduced an Action Plan for Ultra-Stable Quality Control of Products,emphasizing precise process control, extremely stable quality indicators, andan excellent user experience, supported by daily monitoring, weekly reviews,and monthly evaluations. Adhering to user satisfaction as the core standard,we continue to implement a "one customer, one product, one table" method tomaintain ultra-stable product quality.The Company revised Management Measures for Material Procurement, clarifyingsupplier management requirements and issuing Management Rules for Suppliersof Bulk Raw Materials. This ensures product quality is controlled from the sourceand that hazardous substances are monitored and regulated, guaranteeing fullcompliance with prohibited and restricted substance standards.The Company carries out product quality evaluations and diagnostics, formulatingand implementing the 2024 Quality Improvement Planning Program and organizingdedicated quality-improvement initiatives to enhance cross-process qualitycontrol. We also launched the "Fighting Crisis, Seeking Survival" Quality ProblemElimination Special Action, effectively lowering the incidence of quality issues.The Company standardized its customer complaint mechanism by issuingManagement Measures for Defective Goods, Management Measures for Rectificationof Product Quality Objections, and Management Measures for Objections to theQuality (Measurement) of Iron and Steel Products. We also established a customerdemand database to promptly relay feedback to relevant departments, formulateimprovement plans, and elevate product and service quality. In 2024, we visitedcustomers over 310 times, compiled 186 issues, enhanced service awareness,boosted user loyalty, and achieved a 100% complaint resolution rate.

Excellent Quality, Forging Customer Value

Shandong Steel upholds a quality philosophy that "Quality Creates Premium Products, Premium Products Support Brands, andBrands Create Value." We formulate quality standards consistent with sustainable development goals, implement full-staff,full-process quality control, and continuously enhance product quality. By cultivating and expanding a brand matrix founded onreliable quality, the Company delivers high-quality products to its customers. Quality Management

● Management System ConstructionThe Company has issued quality management regulations such as Product Quality Management Measures and Product QualityObjection Rectification Management Measures, formulating or revising a total of 38 technology-oriented quality managementregulations. These include new management measures for major production technology breakthroughs, revised standards forquality accident grading, and improved change grading management, thereby further refining the overall quality managementsystem. Meanwhile, grounded in IATF 16949, GB/T 19001, and other standards, we defined the general requirements, guidelines,objectives, and management responsibilities in our Quality Management Manual. By implementing a four-tier quality managementsystem tree and performing risk identification and controls on key processes and activities, the Company meticulously plans itsquality management system, achieving full-staff and full-process quality oversight, improving product quality, and strengtheningour brand matrix.● Product Quality CertificationIn 2024, the Company completed renewal audits for the ISO 9001 Quality Management System and the IATF 16949 AutomotiveIndustry Quality Management System, and obtained the Hazardous Chemicals Production License, along with renewal audits forthe China Classification Society and EU quality management systems. We also passed two supervision audits under the BritishStandard CARES for rebar, a JIS section steel renewal audit, CMT MC rebar product supervision and standard conversion audits,Russian GOST renewal and expansion audits, Japan Classification Society anchor chain steel renewal audits, American Bureau ofShipping anchor chain steel and section steel renewal audits, EU CE certification, an Italian Classification Society H-beam steelcertification, and 16 other product certifications in total.The Steel City Base received laboratory accreditation from the China National Accreditation Service for Conformity Assessment(CNAS), indicating that its product reliability laboratory meets ISO 17025 management system standards. This provides strongtechnical support for the quality assurance of Shandong Steel's products and R&D innovation.

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The Company follows the principle of "quality first, customer first, and high-quality products," implementing a "big data-driven intelligent quality management" approach. Throughout the entire data and production process, we set multiplekey quality checkpoints, applying intelligent means at each control point to monitor factors that affect quality- persons,machines, materials, methods, environment, and measurement- so that product quality remains stable and meets userdemands. This case of "Implementing Big Data-driven Intelligent Quality Management" was recognized as a typicalexample of quality improvement and brand building in the 2024 industry and information technology sector.

Case: Rizhao Base Intelligent Quality Control Scenario Selected as a 2024 Industry and InformationTechnology Quality Improvement & Brand Building Example

● Building a Quality CultureThe Company aligns with quality management system standards to provide multi-level quality management training, conductingSix Sigma management, green product certification, centralized integrated quality management, and "Quality Month" activities.These efforts drive quality culture establishment and reinforce our quality management foundation. In 2024, we organized ninequality-related training programs, with 9,993 participants joining the Total Quality Management Knowledge Contest.?Six Sigma Advanced Training: A comprehensive analysis of Six Sigma fundamentals, core principles, practical tools, andimplementation steps empowers employees to effectively apply Six Sigma methods in daily tasks, accurately identifying andresolving quality issues to significantly elevate product and service quality.?Quality Control Centralized and Consistent : We implement unified management of quality, production, contracts, planning,and materials, ensuring every stage- from raw material entry to finished goods shipment- is effectively monitored.?Training Green Product Certification: The Company conducts training on green product certification processes, coveringkey evaluations such as environmental performance, resource consumption, and pollutant emissions. By achieving greencertifications, we showcase an eco-friendly brand image and strengthen market competitiveness.

During the 47th "Quality Month," we carried out a variety of promotional activities to expand quality management systemimplementation and continually heighten employees' quality awareness and competence. At the Steel City Base, thisencompassed strengthening on-site standardization, supplier support, key equipment controls, strict final inspections,and a "quality fault-finding" campaign that rewarded effective suggestions, motivating employees to participate in qualityimprovement. Meanwhile, the Rizhao Base introduced "One Agreement, One List, One Center" initiatives, pursuing "threezeros" (zero production deviations, zero product defects, zero user complaints) and offering multi-dimensional qualitytraining. By conducting special audits, reinforcing 4M (man, machine, material, method) controls, and assigning 13specific quality-improvement projects with clear responsibilities, we fortified our respect for quality and ensured customersatisfaction.

Case: "Quality Month" Activities Enhance the Quality Management System

The Company deepens its three-level service system by continuallyimproving process technology, product quality, and delivery capabilityto meet the personalized needs of users, such as processing anddistribution. Shandong Steel's section steel plant, in collaboration withLaigang Group, has established a deep-processing and distributionbase that integrates sorting, processing, and distribution, therebybridging the "last mile" of user service. This initiative providesprofessional deep-processing services for home appliance andautomotive users, further enhancing the overall customer serviceexperience.

Case: Optimizing Customer Service Experience—Deep-Processing and Distribution Bases for "Last Mile" Service

● Optimizing the Customer Experience

Visiting customers is key to enhancing the user experience. The Company adopts an account manager responsibility system,strengthens user visits, formulates annual and monthly visit plans, emphasizes high-level marketing, and efficiently resolvescustomer needs. By 2024, we had conducted 925 visits to strategic key users.Shandong Steel practices experiential marketing, offering free product trials for key end users so they can directly experienceour products' superior quality and unique value. We maintain close communication with customers, address feedback in a timelymanner, and continually explore personalized needs to ensure tailor-made product and service experiences. During the reportingperiod, there were no major safety or quality incidents related to our products and services.

One AgreementStrategic Cooperation Agreement

One ListQCDVS Checklist

One CenterCollaborative TechnologyInnovation R&D Center?Focus

●

Provide full lifecycle customer services

●

Establish a customer value managementsystem

●

Implement tiered customer managementservices

●

Sign strategic cooperation agreementswith key customers to implement the"Four Preferences, One Strategy" servicestrategy, ensuring long-term stablepartnerships.

?Implementation●

Promote customized QCDVS services

●

Identify and address customers' keyconcerns and pain points through clearchecklists and effective implementation

●

Enhance customer service capability

?Future-oriented

●

Expand SISG's exclusive and advancedproduct portfolio●

Facilitate technological upgrading anditeration of user-applied products●

Achieve collaborative sharing of userapplication technologies

The "One Agreement, One List, One Center" New Service Model

Customer Service

Shandong Steel continuously refines customer service, deepens user needs identification, improves the service experience, andcreates a win-win customer service system.Customer Service System Construction

Upholding a "user-centered" philosophy, Shandong Steel has formulated customer service regulations, such as CustomerService Management System, Management Measures for Customer Classification and Maintenance Strategies, and ManagementMeasures for Customer Visits, to build a highly efficient and outstanding customer service framework. To reinforce synergy andimprove service quality, we optimized our marketing organization, restructured departmental roles, and established a collaborativeframework for customer service. Focusing on customer needs, the Company leverages advantages in marketing, production, andR&D, continuously implementing a "One Agreement, One List, One Center" cooperation model to earn user trust with high-qualityservices and deepen partnerships that foster a safe, efficient, and sustainably developing steel industry ecosystem.

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We respond to customer objections within 8 hours, arrive on-site within 3 working days for in-province clients(5 working days for out-of-province), conduct investigations and evaluations, and negotiate a resolution planwith the customer.Centered on customer needs- "the customer's demand is our pursuit, the customer's standard is ourstandard"- the Company prioritizes customers' legitimate interests and ensures robust protection of theirrights.After resolving quality objections, we conduct return visits to rate satisfaction regarding complaint channels,response speed, outcomes, timeliness of resolution, and after-sales personnel quality. We also listen tofurther feedback and continuously enhance problem-solving efficiency and service quality.

RapidResponseComplaintHandlingFollow-upVisits

Official websites and product warranties carry after-sales service hotlines. Account managers also providefeedback and tracking via the customer management system and IMC integrated marketing platform,enabling convenient, real-time updates on complaints and timely user feedback.

ComplaintChannels

● Responding to Customer FeedbackThe Company enacted an After-sales Service Management System and other feedback-handling mechanisms, standardizingcomplaint processes, response times, and related measures. For product quality objections and similar issues, we devisedappropriate handling procedures and a rapid channel for quality objections, assigning specialized departments to address theseconcerns and ensuring a 100% resolution rate.Upholding the concept that "customer demand is our pursuit," Shandong Steel introduced a Customer Satisfaction EnhancementProgram and launched a "Customer Satisfaction Project," building a three-tier service system and applying the "Four Excellencesand One Policy" classification service. In 2024, the Company scored 90 points in customer satisfaction assessment, adoptingstratified quota sampling across five dimensions- brand image, marketing effectiveness, product quality, service experience, andcustomer needs- to accurately capture user perspectives.

● Customer Rights Protection

Shandong Steel highly values customer privacy protection and has established a comprehensive customer property managementprogram. This program clarifies sensitive information types (technical agreements, order contracts, customization agreements,intellectual property) and defines detailed protective measures to prevent information leaks and maintain data security. Duringthe reporting period, the Company recorded no customer data leaks or network information security incidents.

On November 15, 2024, Shandong Steel received the"2023 Gold Medal Supplier" title at the Modern SupplyChain Construction (Supplier) Conference of ChinaShipbuilding Group Corporation (CSGC), marking thesecond consecutive year of this honor. This reflectsCSGC's acknowledgment of both parties' deepcollaborative relationship and affirms the Company'songoing efforts in technology, quality, and service. Since2022, they have actively explored partnership modelsaligned with lightweight, eco-friendly shipbuildingtrends, advancing ship plate upgrades and newproduct development. Going forward, Shandong Steelwill continue providing high-quality products andprofessional services, remain committed to innovation,and collaborate with partners to push the industryforward.

Case: Recognized as a "Gold Medal Supplier" by China Shipbuilding Group Co.

In November 2024, Shandong Steel was named "2019–2024 Excellent Supplier" by Anhui HELICo., Ltd. at its 2024 Supplier Conference. The two parties have cooperated for over twenty years,forming a "strong alliance" through high-level visits and diverse interactions. The Companyhas successively completed the R&D and mass production of dozens of product specifications-such as C- and H-type steel- for Anhui HELI, helping its products expand globally, and expandedtheir cooperation scope to forklift beam series. This honor underscores Anhui HELI's trust inShandong Steel's consistent quality, ongoing innovation, and efficient services, laying a solidfoundation for deeper collaboration, market exploration, and industry development.

Case: Honored as "2019–2024 Excellent Supplier" by Anhui HELI Co., Ltd.

In April 2024, Shandong Steel hosted a seminar for key overseas sectionsteel customers, inviting them to discuss cooperation, seek collectivegrowth, and shape a shared future. Internationalization is a dominanttrend in China's steel industry and a strategic imperative for the Companyto become a world-class enterprise. Going forward, Shandong Steelwill uphold an open posture, actively introduce world-class equipmentand technologies, continuously refine value creation capabilities, andstrive to become a globally renowned steel materials manufacturer andcomprehensive service provider. Working with all partners, we will tacklechallenges, chart a development blueprint, and create a better future withhigher-quality products and services.

Case: 2024 Overseas Section Steel Seminar

We consistently practice responsible marketing, formulating and enforcing relevant systems in a lawful, compliant manner.The Company strictly follows honest operations and fair competition principles to provide customers with high-quality productsand services, cultivating a healthy, sustainable market environment. In 2024, we strengthened our marketing team trainingby organizing multiple thematic lectures and compliance sessions, reinforcing compliance management and supervision toguarantee the legality and standardization of marketing activities. During the reporting period, no incidents infringing customerrights or interests occurred.Looking ahead, Shandong Steel will focus on upgrading its services, continuously building a mutually beneficial user servicesystem; emphasize system optimization to raise marketing management standards; and concentrate on team capacity-buildingto enhance the overall competencies of all employees.

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Training on data securityTraining on network control capabilities

Information Security: Building a Solid Data Barrier

Network information security is a key factor in ensuring stable operations and sustainable development for enterprises.Shandong Steel continues to refine its information security governance and management system, strengthen relevantinstitutional frameworks, and enhance data protection and control measures to comprehensively prevent information securityrisks. Meanwhile, we emphasize safeguarding trade secrets, establishing a solid defensive line for information security.

The Company has established an Informatization and Intelligent ManufacturingManagement Committee, fully responsible for implementing and executing policies oninformatization and intelligent manufacturing. To further reinforce information securitycontrol and ensure data integrity, availability, and confidentiality, we are optimizing ourinformation security governance and management system. Looking ahead, the Companyplans to develop a data governance system to strengthen information security measureseven further.Shandong Steel complies with the Data Security Law of the People's Republic of China, thePersonal Information Protection Law of the People's Republic of China, and other relevantlegislation, implementing a strict data security management system that covers dataclassification, full lifecycle management, monitoring and early warnings, emergencyhandling, and accountability. Currently, the Company is revising its network security anddata security management regulations to build a comprehensive information securitymanagement framework. In 2024, we completed our first data classification and gradingprogram and filed our data directory. Meanwhile, the Rizhao Base achieved Level 3certification under the DCMM (Data Management Capability Maturity Model).The Company continuously enhances data security risk prevention by organizing dataclassification, grading, and network security training sessions, which enhance employees'awareness of data security and customer privacy protection while effectively boostingtheir ability to avert information leakage risks.In 2024, we adopted both online and offline approaches to conduct information securitytraining and related programs, upgrading employees' professional competencies andpractical skills in data security and network management.

Building theOrganizational

System

ImprovingSystem

Construction

Preventing

InformationSecurity Risks

Employee Rights & Benefits and

Career Development

Policy and Institutional Safeguards

Recruitment and Assessment

Measures for Managing the Introduction of TalentsManagement of Employee Performance AppraisalRemuneration and Benefits

Employee Post and Benefit Salary SystemScheme Measures for the Administration of Employees' Working Meal Subsidies (Trial)Management of Kindergarten Fee Reimbursement for Children of EmployeesPromotion and Development

Management of Staff Career Development (Trial)Ten Measures to Vigorously Discover, Cultivate, and Select Outstanding Young Cadres

Talent Cultivation

Implementation Program for the Enhancement of the Quality and Competence of AllStaff in 2024Opinions on the Implementation of the "Youth Promotion Program" for CultivatingYoung TalentsMeasures for the Administration of Occupational Skill Level EvaluationMeasures for the Management of External Experts

People-Oriented, Building a Better Home Together

Shandong Steel upholds the principle that "talent is the foremost resource, and talent superiority is the core corporateadvantage." We strengthen our talent team construction, continually optimizing recruitment, training, promotion, and employeecare. In doing so, the Company creates a workplace environment conducive to comprehensive talent development.

Governance

The Human Resources Department functions as the primary division for human resource planning, recruitment and allocation,compensation and benefits, employee training, and so on. Each enterprise under the Company assigns personnel specialists tohandle relevant tasks, safeguarding employee rights and interests. Strategic Initiatives

Embracing a "talent-first" principle, the Company implements a human resource strategy focused on creating a high-leveltalent team for the steel industry, ensuring a sufficient workforce with an optimized structure and solid professional qualities.We build a market-oriented employment and labor organization model, enhance talent introduction, training, and performanceassessments, and promote labor-sharing mechanisms. By applying scientific job design, talent mapping, and flexible talentrecruitment, Shandong Steel energizes human resources and elevates operational efficiency. Simultaneously, we refine talentmanagement and quality-improvement systems, regularly evaluating risks and opportunities and crafting responsive solutions toestablish a strong foundation for high-quality growth.

Risk and Opportunity Identification

We develop scientific risk control strategies by regularly evaluating risk sources in talent recruitment, employee turnover, andperformance management. By optimizing our recruitment process, offering career advancement opportunities, and reinforcingperformance appraisal systems, the Company enhances employee satisfaction and loyalty, ensuring a stable talent strategy thateffectively mitigates talent risks and provides a robust human resource guarantee for ongoing development.

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Risk andOpportunityIdenti? cation

RisksOpportunitiesMeasures

Attrition Risks

The steel industry faceschallenges retainingskilled workers and seniormanagement. Heightenedmarket competition demandshigher remuneration, whileunique industry characteristicsmean key positions may behard to fill, risking the lossof innovative talent and R&Dcapabilities. This can erodecompetitiveness and innovationcapacity.

In recent years, large steelenterprises have expandedscale and synergies throughM&As. The Company seizesthis chance to attract moretop talent and boost overallcompetitiveness.

Create comprehensivemechanisms for talentcultivation and introduction,strengthen collaborationwith universities/researchinstitutes, and foster ahealthy corporate cultureand atmosphere-boostingemployees' sense of belongingand loyalty.

Talent Structure

Mismatch

The steel industry's greenand intelligent transformationrequires a diverse talent mix(technology, management,sales, etc.), but the currentstructure is relativelyhomogeneous, struggling tomeet these diverse needs.

As the industry acceleratestoward green, low-carbon,and eco-friendly development,Shandong Steel can intensifyrecruitment and training ofenvironmental technologyspecialists, promotingsustainable growth.Meanwhile, intelligentizationand digitization define theindustry's future. By activelyattracting and nurturing talentsin these fields, the Companydrives intelligent upgrades,digital transformation, greaterefficiency, and improvedproduct quality.

As the industry acceleratestoward green, low-carbon,and eco-friendly development,Shandong Steel can intensifyrecruitment and training ofenvironmental technologyspecialists, promotingsustainable growth.Meanwhile, intelligentizationand digitization define theindustry's future. By activelyattracting and nurturing talentsin these fields, the Companydrives intelligent upgrades,digital transformation, greaterefficiency, and improvedproduct quality.

The Company abides by the Labor Law of the People's Republic of China, the Labor Contract Law of thePeople's Republic of China, and other relevant statutes, continually refining its employee managementsystem. We emphasize both morality and skill, promote diversity and equal opportunity, forbiddiscrimination of any kind, oppose forced labor or harassment, prohibit child labor, and ensure fairtreatment for employees of all nationalities, races, genders, religions, and cultural backgrounds.In 2024, the Company effectively safeguarded employee rights, recording zero human rightscomplaints, no major labor disputes, and no child labor.

The Company has instituted a standardized talent recruitment management process, ensuring strictconfidentiality of personal data (e.g., resumes) throughout recruitment, evaluation, and remunerationprocedures. In accordance with the law, we sign labor contracts and provide the agreed-upon workconditions and wages. By continuously refining and optimizing the "introduce, nurture, select, store,and retain" talent mechanism, we build a high-caliber workforce aligned with our high-qualitydevelopment. The Company also intensifies scrutiny during talent intake to ensure top graduates,creates multiple platforms for diverse talent roles (especially high-tech and skilled personnel), andimplements an annual performance appraisal for outsourced staff. This flexible approach to bringingin talent seeks to maximize resource allocation and usage.Aligned with our talent development strategy, the Company applies a scientific compensationstructure that closely links an employee's remuneration to their position and grade, adhering to"post changes mean salary changes." We run comprehensive performance assessments withobjective, fair standards, establishing performance-based pay according to our performanceappraisal system and outcomes, thus ensuring equity, incentivizing value creation and sharing, andenergizing the organization.The Company offers robust employee welfare policies, paying social insurance and housing funds asmandated by law, along with enterprise annuities and supplementary medical insurance- ensuringemployees have "six insurances and two funds": pension insurance, medical insurance, unemploymentinsurance, supplementary medical insurance, work injury insurance, maternity insurance, plus hous-ing provident funds and enterprise annuities. We strictly follow legal provisions for female employees'pregnancy and maternity leaves, protect their rights, provide statutory allowances (e.g., work mealsubsidies, heatstroke prevention fees), arrange routine health checkups, and reimburse kindergartenfees for employees' children. We also ensure employees have adequate rest, paying overtime wages forstatutory holidays as required by law. In 2024, the Company achieved 100% coverage in social insur-ance, and employees averaged 9.5 days of paid leave.By broadening diverse channels for democratic communication and refining the democraticmanagement system, the Company covers grassroots staff representative conferences fully, offeringemployees additional opportunities to engage in corporate governance and express opinions. Weestablished two-way communication mechanisms (e.g., employee forums, satisfaction surveys)to gather wide-ranging input and continuously improve processes. In 2024, we implemented 66proposals from employee representatives, achieving 100% response and 100% employee satisfaction.

CompliantEmployment

Attracting

Talent

Remunerationand Benefits

DemocraticCommunication

●Employee Rights and Benefits

As of 2024, we employ16,031staff, with

88.5%

male and

11.5%

female;

minority employees(

0.57%

of the total). Our turnover rate is

0.57%

, and labor contract coverage is100%.

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Career Development

The Company enhances its rank management system and standardizes qualification requirements and procedures for employeepromotion by clarifying job sequences, establishing a career development mechanism, and implementing cadre assessmentmeasures.●

Promotion and Development

Based on the nature and scope of each role, the Company divides positions into three sequences: management, technical/business, and operation/maintenance. We offer a vertical and horizontal career channel that grants equal advancementopportunities for all employees in different roles. The Company strictly enforces a cadre assessment and evaluation process,actively identifying, cultivating, and selecting outstanding young cadres through annual recommendations and secondments,providing a fair competition platform for them to excel.To form a high-caliber workforce for the steel industry, Shandong Steel implements a talent echelon initiative, focusing onfour groups: senior operational managers, high-level technical/business experts, highly skilled operators/maintainers, anda robust pool of young successors. By refining talent development mechanisms, optimizing the growth environment, andenhancing the overall quality of our talent teams, we provide essential intellectual support for the steel industry's high-quality development. Simultaneously, the Company remains committed to creating an environment that nurtures bothpersonal and professional growth, using a "talent chain" to reinforce the "innovation chain" and elevate the competitivenessof the "industry chain."●Staff TrainingAdhering to the principle of "strengthening the enterprise by nurturing talents," the Company deepens its talent-focusedstrategy and reinforces employee education and training. The Human Resources Department aligns training plans withemployees' skill advancement and job requirements, defining training content and methods by category and level, developingan effective training curriculum, upgrading the Boutique Lecture Hall 2.0 and training bases, and bolstering trainingoutcomes. Concurrently, we conduct vocational skill-level evaluations, intensify "multi-skilled" management, and improveindependent appraisals, providing a strong human resource foundation for high-quality development.

In 2024:

? 2 employees received State Council allowances? 3 became Taishan Industry Leading Talents? 1 was named Shandong Province Technical Skill Master? 1 received the "Qilu Master Craftsman" honor? 1 became a "Qilu Craftsman"

From August 20–21, 2024, the inaugural national "RedFlag Cup" Team Leader Competition Finals took place inChangchun, Jilin Province. In the fiercely contested "SteelTrack," Shandong Steel performed exceptionally well, placingfive team leaders in the nation's top ten. Among them, YangChengwei, leader of the section steel electrician group at ourEnergy and Power Plant's Electric Repair Workshop, claimedsecond place in the "Steel Track."Shandong Steel consistently emphasizes talent cultivation andinnovation-driven development, actively creating an innovationevaluation system aligned with employees' personal growthneeds. We treat workplace innovation and improvement as keycriteria for career path creation, occupational grade assessments, performance evaluations, and compensation design,encouraging employees to explore, innovate, and surpass themselves. So far in 2024, Shandong Steel's 45 innovationstudios for model workers (craftsmen/high-skilled personnel) have launched 87 innovation projects and devised 44training and exchange programs, injecting strong momentum into both company innovation and talent development.

Case: Shandong Steel Excels in the First National "Red Flag Cup" Team Leader Competition

From December 11–13, 2024, the National Iron and Steel Industry Workers' Vocational Skills Competition convenedat the Rizhao Base. Local employees Li Chenglong, Zang Junjie, Zhou Yingnan, Chen Hongchuan, and Zhuang Qiangaearned first prizes in Converter Steelmaking and Thick Plate Rolling, while Chen Guangjiao, Li Shaoshuai, Li Zhao, andZuo Jinjun at the Steel City Base clinched second prizes. Rizhao Base also received a Special Contribution Award. TheCompany leveraged this event to deepen a culture of "respecting knowledge, skills, and talent," inspiring employees togrow on the job, improve their technical capabilities through practice, and infuse the steel industry with renewed vitality.

Case: 2024 National Steel Industry Vocational Skills Competition Held at Rizhao BaseWe continually enhance our digital learning platform, launching an upgradedBoutique Lecture Hall 2.0, with each employee logging an annual averageof 88 hours of online self-directed learning. Shandong Steel also valuesconstructing and optimizing practice bases- upgrading electrical andmechanical training facilities and developing a blast furnace simulationsystem- to achieve "precise empowerment" and quickly raise employees' skilllevels through practical learning. Meanwhile, we encourage talent exchangeand learning by arranging job rotation training for 105 core professionals atbenchmark enterprises in 2024.Placing great emphasis on craftsmanship, the Company devised theManagement Measures for the Selection of Craftsmen, focusing on frontlineemployees and adhering to the principle of "public recognition, selectingthe best of the best." Through a bottom-up, step-by-step process, weidentify and cultivate outstanding craftsmen, fostering a "knowledge-based,skill-based, and innovative" pool of highly skilled talents and opening a fasttrack for their development.

In 2024

ApproximatelyRMB

95.04

million yuaninvested in employee trainingYielding

4.1

million total training hours

100%coverage in employee training

100%

coverage in professional skill

training

100% coverage in leadership training

? 4 were appointed Qilu Chief Technicians? 2 joined the 2024 MIIT Manufacturing Talent Support Program? 2 were recognized as National Iron and Steel Industry Skilled Workers? 2 became "Hai You Plan" industry-leading talents in Jinan? 2 obtained Rizhao City Chief Technician titles? 2 gained recognition as Rizhao City Innovative Talents

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In May 2024, Rizhao Base held an inauguration ceremony for its Employee Empowerment Center, furtheringindustrial workforce reform, advancing the new-era talent development strategy, and building a high-qualityemployee team. Occupying 1,000 square meters, the Center comprises a Craftsman Lecture Hall, a Qilu CraftsmanInnovation Workshop, an Intelligent Manufacturing Innovation Research Room, a Safety Experience Center, amultimedia training room, and a multi-functional classroom. Blending skill training, competition, innovationresearch, and simulation, the Center precisely elevates employees' skills while gathering a knowledge-based,skill-based, and innovative industrial workforce. This initiative empowers the Company's high-quality growth.

Case: Rizhao Base Establishes Employee Empowerment Center

In September 2024, Shandong Steel organized a team for the "Shagang Cup" 11th National Iron and Steel IndustryVocational Skills Competition. Wang Xubo from our Ironmaking Plant placed 15th in the Blast Furnace IronmakingWorker category, earning the title "National Iron and Steel Industry Skilled Worker," while Shandong Steel receivedan "Excellent Organization Award." This competition covered four occupations- blast furnace operator, metal rollingoperator, electrician, and crane operator- and combined theoretical tests, practical operations, simulations, andVR troubleshooting. After three days of intense contests, all four of Shandong Steel's entrants ranked within thenation's top 30.

Case: The Company Participates in the "Shagang Cup" 11th National Steel Industry Vocational Skills Competition

Women's Care: By signing and enforcing the Special Collective Contract for Special Rights and Interests of Female Workers, theCompany carried out diverse protective activities for women workers' unique rights, boosting their legal awareness. We organized21 lectures and law-to-enterprise publicity events for 1,638 female employees. Following President Xi Jinping's instructions onfamily education, women's union organizations at each level hosted 16 "Cultivating Good Family Traditions- Women in Action"events, covering 1,642 participants. We also encouraged female workers to participate in labor contests, technical competitions,and universal job innovation, with 524 total involvements; 155 female employees advanced technical skill levels, 27 receivedprofessional titles through assessments, and 14 upgraded their academic credentials. The Company launched a "Mom's Hut"upgrading campaign- improving spaces and facilities, broadening functionality, and establishing 10 "Mom's Huts" by the end ofthis reporting period. We perform biannual screenings for "two cancers" in female workers, investing 3.1495 million CNY andbenefiting 3,394 women employees.

The Steel City Base has one National May 1 Women's Model Post (the WaterTreatment Team in the Steelmaking Plant) and three female employees honored asNational May 1 Women's Model Workers.Rizhao Base won two model posts recognized as National "May 1" Women's ModelPosts and Shandong Province "May 1" Women's Model Posts, respectively.

Providing148,000CNY infinancial assistance.Annual universal benefits for unionmembers reached1,100CNY perperson.

● Employee CareEmployees are the most valuable asset of any enterprise. Shandong Steel maintains close alignment with its employees throughthe "Happy Heart · Work-Benefit" service initiative, continuously improving the employee service and support system, upholdinglegitimate employee rights, and fostering a happy, harmonious workplace. By forming union alliances, delivering assistance andrelief, expanding inclusive cultural and sports events, and offering psychological support, the Company ensures mutual growthfor employees and the enterprise.Employee Assistance and Relief: Through the "Ecosphere Labor Union Chairman's Alliance," the Company collaborates toexpand employment channels for employees' families. Centering on the "Happiness and Harmony Practical Project," we continueupgrading the "three rooms, one hall, and one institute" facilities and promoting supplementary medical insurance plus honoraryretirement for employees. We also implement a "special targeted assistance line, daily relief and warmth line, mutual aidsecurity line, supplementary medical care line, serious illness green channel line, and quality-of-life benefit line," conductingprograms like "Spring Job Delivery, Summer Cooling, Golden Autumn Student Aid, Winter Warmth, and Single EmployeesSupport."

In 2024, trade unions at all levels of the Company visitedand provided comfort to

distressed employees andtheir families, distributing613,000CNY in relief funds and

544,700CNY of summer cooling supplies. Completed the2024 Golden Autumn Student Aid program.

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"Locomotive Cup" Staff Basketball Tournament

Humanistic Care: Shandong Steel formulated and released the "Huixin · Empowerment" Mental Health Services Implementation

Opinions, striving to create a "Party and government-led, union responsible, targeted services, employee-benefitting" patternfor workplace mental health. Each unit fully utilizes facilities like the "Mind Harbor" Mental Health Service Center, EmployeeEmpowerment Center, Employee Health Station, Women's Home, and the Baolan Tea Bar, organizing team counseling, individualpsychological support, themed lectures, and group-building events. In 2024, the Company conducted 21 employee healthlectures, physical fitness checks, and mental health trainings, while arranging rest and recuperation activities for 193 front-lineemployees, model workers, and craftsmen. We also upgraded our Zhao Shilong and Yang Lei model worker innovation studios,further enhancing employees' happiness index.Cultural and Sports Activities: The Company carefully plans and organizes a variety of cultural and sports events, includingLantern Festival fairs, walking and mini-marathons, and online/offline "cloud walks." We formed a tug-of-war team thatparticipated in the 2024 National Tug-of-War Championships, winning the men's 600-kg category and finishing third in both themen's 640-kg and the mixed 580-kg categories. Meanwhile, 16 cultural and sports associations (e.g., basketball, badminton) heldan array of activities, significantly enriching employees' cultural lives.

"Ironmaking Cup" Staff Badminton Competition

Company Walks-Cross-Country Running and the 12th Employee Culture & Sports Festival Launched

"Plate and Strip Cup" Women's Air Volleyball Competition

IndicatorUnit2024Total number of employeesPerson16,031Number of male employeesPerson14,181 Number of female employeesPerson1,850Number of employees aged 30 or youngerPerson2,018 Number of employees aged 30-50Person9,556Number of employees aged 50 or older abovePerson4,457Number of ethnic minority employeesPerson91Number of employees with disabilitiesPerson41Percentage of employees with disabilities%0.26

Employee turnover rate%0.57Turnover rate of male employees%0.48Turnover rate of female employees%0.09Amount invested in employee worksafety liability insurance

RMB 1,000 555Amount invested in employeework injury insurance

RMB 1,000 22,212Employee work injury insurance coverage%100Signing rate of labor contracts%100Proportion of employees covered by collective agreements%100

Number of labor dispute casesItem0

Indicators and Performance

In 2024, Shandong Steel focused on comprehensively boosting talent competitiveness and innovation capacity, deepening humanresource reforms, implementing balanced training that emphasizes professional skills and holistic quality, building an appraisaland distribution mechanism driven by results, and reinforcing innovation studios. These efforts provide a solid talent foundationfor the Company's sustainable development, ensuring that talent-building achievements effectively translate into performancegains and stronger market competitiveness.

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IndicatorUnit2024Number of discrimination and harassment incidentsItem0

Training ratio of employees foranti discrimination and oppositionto human rights violations

%100Social insurance coverage%100Total number of female employees on parental leavePerson158Return rate and retention rate of female employees on

parental leave

%100Number of assisted employees in difficultyPerson352Number of paid annual leave days per capitaDay9.5

Employee satisfaction%100Annual investment in vocational trainingRMB 1,000 95,040Employee training coverage%100Total training hoursHour4,102,890Training hours per capitaHour99Percentage of employees receiving regular performance

and career development reviews

%100Looking Ahead, Shandong Steel will continue strengthening our cadre and talent teams by building a scientific cadre echelon,delivering sustained energy for high-quality development. We will promote personnel efficiency improvements in a coordinatedmanner and implement an assessment/incentive mechanism that fully spurs employee enthusiasm and innovation. The Companywill deepen salary and insurance management, enhance employee welfare and rights protection, and continually consolidatesynergy for high-quality growth. We will further refine talent cultivation and growth systems, deepen talent team building, andsolidify the enterprise development foundation.

Steel City BaseRizhao BaseGeneral AdministrationOfficeSafety Management OfficeSafety Technology OfficeSecurity Team ISecurity Team IISecurity Team IIIFirefighting and RescueTeamSafety Management OfficeSafety Technology OfficeSafety Inspection OfficeArmed Security OfficeFire Safety ManagementOfficePublic Security OfficeSpecial EquipmentInspection Station

Safety First, Protecting Occupational HealthShandong Steel continuously refines its health and safety management system, strictly implements safety responsibilityprotocols, and bolsters production safety defenses, effectively safeguarding the occupational health and safety of employees andstakeholders. GovernanceThe Company has formed a Work Safety Committee, serving as the highest authority for occupational health and productionsafety decisions and deliberations. Under it, six specialized safety committees operate, while the Safety and Security Departmentoversees day-to-day safety management. Production units assume local safety responsibilities, enforcing a traceabilitymechanism and adopting "one position, one responsibility list; one position, one evaluation." We formulated the Work SafetySupervision and Management Measures, linking evaluation outcomes to annual safety award assessments and further enhancingmanagers' safe performance capabilities.

Strategic Initiatives

Occupational health and safety objectives are integrated into the Company's strategic planning, examined and approved by theWork Safety Committee, then translated into implementation plans and allocated resources. The Safety and Security Departmentregularly monitors and evaluates progress, adjusting plans based on feedback to address future challenges and promotesustainable growth.

● Health and Safety Management System

The Company upholds "life first, safe development," rigorously abiding by safety regulations, advancing a three-year plan toaddress fundamental safety risks, and applying an all-staff safety responsibility system. We strengthen the principles of "onepost, two responsibilities" and "three management, three musts," continuously executing safety risk classification, hazardinvestigation, and risk prevention mechanisms, fully protecting employees' occupational health and establishing a robust safetydefense for stable operations.To provide institutional assurance for safety, we have built a comprehensive work safety management framework. In 2024, werevised 67 measures- including the Measures for Supervision and Management of Work Safety of Relevant Parties, the Measures forManagement of Work Safety Training and Education, the Measures for Safety Management of Major Hazard Sources of Hazardous Chem-icals, and the Measures for Safety Management of Hazardous Operations- and introduced 59 new systems, such as the Measures forManaging Commitments to Work Safety, the Measures for Managing Work Safety Reporting, Rewards, and Issue Resolution, the Regula-tions on "Morning Meetings" for Work Safety, and the Management Standard for Work Team Safety Activities.

Safety and SecurityDepartmentWork Safety Committee

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The Company held5,040emergency drillsOver94,966 participants

The Rizhao Base carried out special inspections for flood and typhoon control,updated its flood and typhoon emergency plan, identified 27 key flood-prone locations, and promptly activated relevant procedures. Monthly flood-prevention meetings were convened to address critical issues, achieving thetarget of safe operations during flood season.

In June 2024, a gas leakage emergency drill for Jinan's steel enterprises was conducted in the new area of the SteelCity Base's Steelmaking Plant. Following real-world practice standards, the drill simulated a pipeline rupture of gaspurification and recovery, aiming to advance "Safety Production Month" efforts, improve emergency responsiveness atcity steel enterprises, and validate the Comprehensive Emergency Plan for Production Safety Accidents and the SpecialEmergency Drill Plan for Gas Leakage Accidents in Steelmaking Plants. It also tested emergency teams' coordination andemployees' risk prevention and self-rescue capabilities.

Case: Rizhao Base Implements Flood and Typhoon Emergency Plan

Case: Jinan Steel Enterprises' Gas Leakage Emergency Drill Held at Steel City Base

We closely integrate our safe production management system with the Company's development strategy and manage it strictlyper occupational health requirements. In 2024, Shandong Steel obtained ISO 45001 and OSHMS occupational safety and healthmanagement system certifications.

During the reporting period, the Steel City Base maintained itsGrade 2 safety standardization status, while the Rizhao Basesuccessfully attained a Grade 3 safety standardization rating.

● Firefighting and Emergency ManagementBy establishing emergency management organizations, standardizing emergency processes,formulating emergency response management systems, and conducting drills, the Companyhas effectively enhanced its emergency response capabilities and safety management. In2024, we revised our comprehensive emergency plan, 47 specialized emergency plans, and410 on-site disposal plans, providing solid institutional support for emergency management.Simultaneously, we optimized the hierarchical management of key firefighting areas andbolstered the periodic assessment and updating of emergency plans, ensuring their currencyand applicability.

Risk and OpportunityResponseIncreased industry competition: The iron and steelsector is fiercely competitive, and some organizationalreforms / personnel efficiency measures maysometimes overlook safety, pressuring the Company'ssafety management.

Deepen root-cause risk management, fostering an intrinsicsafety framework. Perform comprehensive risk re-identification and assessment across all processes. Fornew organizational or personnel changes, compile riskidentification lists and corresponding controls.Stricter safety & environmental requirements:

Heightened regulatory mandates require greaterinvestment in safety/ environmental facilities,possibly diverting attention from safety oversight.Facility operation/maintenance may also introducenew safety risks.

Strengthen safety integration in design/planning. Adhereto "three management, three musts" so that from projectinception through equipment and process stages, safetystandards are respected.Weak staff safety awareness: Some employees displayinsufficient safety consciousness, take chances, or failto follow safe operating procedures, leading to hiddenaccident risks.

Refine safety standardization. We enhance training/education for all staff, increasing engagement, relevance, andeffectiveness. Through extensive awareness and educationalprograms, employees fully understand and comply with safetynorms.Inadequate supervision: Gaps in safety checks andinsufficient oversight may fail to detect/remove allhazards promptly.

Accurately target major hazards, enhance process oversight,implement "one hazard, one policy," and build a durablehazard detection and rectification framework integrated intoregular, specialized, and seasonal safety inspections, ensuringdynamic elimination of hidden dangers.

●Related Party Management

Shandong Steel reinforces regional synergy, strictly observing the "Four Uniform" guidelines for managing relevant parties.We issued the Safety Performance Evaluation Program for Collaborating Units, rigorously implementing performance evaluations,performance-based scoring, and thorough inspections, promoting standardized safety teams among partners. Meanwhile, wesupervise processes diligently by formulating the Provisions on Handling Safety Accidents and Violations by Cooperative Suppliers,improving "no-entry" management for partner units/personnel, concentrating on site management and operational behaviors,employing differentiated oversight, and emphasizing high-risk operations. In this way, Shandong Steel ensures partner personnelsafety at all times. Risk and Opportunity Management

Shandong Steel is dedicated to establishing a robust safety risk management system to strengthen its risk resilience. Adheringto a scientific risk management philosophy, we confront, identify, and evaluate risks, enhancing our capacity to extract value fromrisk identification. The Company defines its primary safety risk management objectives: ensuring production safety, reducingpotential accidents, and improving employees' safety awareness.

●Strengthening Safety Risk Control

The Company constructs an efficient risk control system by bolstering source-level prevention, optimizing risk identification, andcontinually upgrading our control capabilities. We strictly enforce hidden danger inspections, intensify prevention against "threeviolations," and eliminate numerous concealed hazards, establishing a sturdy foundation for safe production and sustainableprogress.

We rigorously apply the "three simultaneities" (safety design, safety facilities, safetyacceptance) in construction projects, completing safety and occupational health reviews/final acceptance for key initiatives (e.g., the Steel City Base's converter–continuous castingproject under the new/old kinetic energy transformation). In response to sulfur-laden wastegas pipelines at the coking plant, we introduced desulfurization processes to remove accidentrisks. The Rizhao Base finalized "three simultaneities" for its top-and-bottom combined COblowing converter project.

DeepeningProjectControl

2024

2024 Sustainability ReportUniting and Building a Harmonious Society Together

9899

In 2024, we identified and resolved6,787hidden hazards,achieving100%coverage and100%rectification.

?Risk Monitoring and Early Warning System: We have set up a safety risk monitoring and early warningsystem, achieving real-time detection and alerts for

areas and1,303data points of major equipment(e.g., blast furnaces, converters, refining/electric furnaces, gas systems), thereby enhancing risk prevention.?Remediation of Dangerous Operations: Through video surveillance, drones, and other methods, the Companyintensifies oversight of risky tasks (heights, hot work, etc.), identifying and correcting over6,000issues orhidden hazards, effectively reducing accident risks.?Enhancing Intrinsic Safety: In the reporting period, we bolstered intelligent safety in high-risk areas,implementing20+intrinsic safety projects (e.g., a safety monitoring system on metallurgical cranes, an SISfor a300,000m? gas holder, an online safety monitoring system for rail vehicles), significantly improvingequipment safety. We also took the lead in completing a safety production monitoring and early warning system,plus an intelligent supervision platform for welding, ensuring our safety management remains current.

We enacted a three-year action plan to tackle underlying safety issues, maintaining a stablemechanism of "eliminate existing hazards by end-2024, reduce incremental hazards by end-2025, and achieve dynamic zero major accidents by end-2026." Meanwhile, we effectivelyimplement "human, technological, engineering, and management" defenses for major risks,raising our intrinsic safety standards.

Following a problem-oriented approach, the Company addresses process, equipment/facilities,personnel operations, and work environments. We backtrack operational, procedural, systemic,and managerial vulnerabilities to uncover how hidden issues evolve into accidents, transitioningfrom outcome-based to source-based control.

Emphasizing intrinsic safety, we systematically replace outdated equipment to removefatigue hazards. We also promote R&D and usage of "mechanization replacing labor,automation reducing labor, and intelligent unmanned" solutions. Via "AI+Internet," theCompany built a cloud-based intelligent safety production control platform, implementingfundamental safety measures like remote operations and human-machine isolation toeliminate hazards at their root.

The Company practices "energy flow, manufacturing flow, value flow, and equipment status"refined management to prevent volatility in energy systems, averting equipment/productionaccident risks at their source.

Deepening

HazardRectification

DeepeningFundamental

SafetyImprovement

DeepeningLean Risk

Control

DeepeningIntelligent

SafetyManagement

● Coverage in occupational health checkups● Licensing of special operations personnel●Compliance with the "three simultaneities"requirement for safety and occupational health

● Health checkups for toxic/hazardous positions● Detection of occupational hazards

●Safety training coverage for employees andrelevant partners● Completion of special equipment safety checks● Workplace occupational hazard testing

Organized health checkups

for transferringor departing staff

Completed occupational

health checks for

employees

Performed hazard

measurements

Invested

3.11

million CNYin safety training

188,912 Participants

Totaling2,265,481

hours of safety training

100% Safety training coverage

100%

In 2024

In 2024

● Occupational Health ManagementThe Company highly prioritizes employees' occupational health and adopts the 2024 Occupational Disease Prevention and ControlPlan, ensuring employee health and safety via various measures. In 2024, we organized 542 health checkups for transferringor departing staff, completed occupational health checks for 13,885 employees, performed 4,000+ hazard measurements(e.g., heat, noise), and attained annual occupational disease prevention goals. Additionally, we vigorously promote healthyworkplace initiatives, improving environments, enhancing employee welfare, and safeguarding occupational health for sustaineddevelopment.

● Safety Culture BuildingThe Company embeds a "people-oriented" safety ethos into every facet of our culture, building a comprehensive, multi-layeredsafety culture and a dual-level prevention framework by focusing on quality enhancements, talent development, and echelonbuilding in safety education. In 2024, we hosted numerous training activities- such as leadership workshops for workshop heads-under the theme "Everyone Talks Safety, Everyone Practices Emergency-Unobstructed Life Paths." Our focus included quality-improvement training, hazard exposure, rectification bulletins, case-based warnings, emergency drills/inspections, safetyconsultation days, and performance checks. By delivering "precision training" and "targeted training," aligned with differentoperational procedures and risk points, we constantly elevate employees' safety awareness and emergency capacity, joiningforces to create a safe, healthy, and harmonious working environment.

We established a one-time reward mechanism for personnel taking the Registered Safety Engineer exam, motivating employeesto gain certification and improve their safety competencies. In 2024, 350 employees took this exam.

54213,8854,000

2024

2024 Sustainability ReportUniting and Building a Harmonious Society Together

100101

Safety Indicators and Performances

The Company refines its safety production management strategy, clarifies targets, and optimizes evaluations. Through regularinspections, we ensure compliance with safety metrics. In 2024, no production safety accidents of major or above severityoccurred, achieving the annual "6 for Zero" safety production responsibility targets.

No general or above-levelproduction safety accidentsNo major or above ?re accidentsNo major or above equipment accidents

No major or above production accidentsNo major or above traf?c accidents withprincipal responsibilityNo partner-side accidents with principalresponsibility

"6 for Zero"

Safety Production

Targets

Looking Ahead, the Company will continue to uphold "people first, life first," executing a three-year fundamental safety initiative,reinforcing its main safety responsibilities, and ensuring implementation of all-staff safety responsibilities. We will alsostrengthen our dual-prevention mechanism, controlling major safety risks, enhance safety standards, and bolster grassrootswork in production safety. By improving supervisory effectiveness, precisely governing high-risk operations, systematicallyrooting out hidden hazards, and fortifying baseline safety capacities, Shandong Steel ensures safe production remains alignedwith contemporary standards.

In 2024, the Steel City Base and Rizhao Base each won an "Excellent OrganizationAward" at Shandong Province's Safety Law Popularization Knowledge Contest.Rizhao Base's "Safety Culture System Construction and Application (Comprehensive)"earned a "Best Enterprise Safety Culture Practice" from the Ministry of EmergencyManagement's Publicity and Education Center. Meanwhile, the "Xianghai TuqiangTeam" from Shandong Iron and Steel Group Rizhao Co., Ltd. claimed third place inthe final of Shandong's "Skill Prosper Shandong" Vocational Skills Competition andthe 20th Shandong Youth Vocational Skills Competition.

?Enhancing Somatosensory Safety Training: Utilizing our Safety Body-Sense

Center as a new training hub, we organized simulations (work at height, CPR,virtual fire extinguishing, VR accident scenarios) for key posts and cooperatingpersonnel.

?Strengthening the Safety Management Team: We cultivated high-caliber

internal trainers and deployed key personnel for cross-base supervision/inspections to exchange know-how and enhance capacity.?Grassroots Key Safety Skills Training: We conducted specialized training

for operation-area directors, team leaders, and safety managers, improvingfrontline managers' (including partner teams) safety consciousness andcapabilities.?Promoting the "Five-in-One" Safety Pocket Handbook: The Rizhao Base

compiled pocket handbooks for each operator post, so employees "knowresponsibilities, recognize risks, master operations, conduct investigations,and handle emergencies."?In-Depth "Safety Production Month" Publicity: Through safety pledges, VR experiences, etc., we broadly

disseminated safety knowledge and culture.?The Company organized safety training for all employees, covering topics such as work safety responsibilities,

hazard identification, and emergency response procedures. In 2024, a total of 260 security personnel at the Rizhao

Base underwent this safety training.

2024 Safety Culture Initiatives

The Rizhao Base developed a 3A industrial tourism zone uniting"Industry + Culture + Tourism," offering leisure, production,cultural experiences, and study tours in one integrated scenicarea. This approach exemplifies the synergy between steelenterprises and urban development, while also creating jobsfor neighboring villagers- 49 people currently work there,including 19 from nearby communities- thus forming a newmodel for growth that tightly connects the scenic spot withsteel operations.

Case: Rizhao Base 3A Industrial Tourism Zone Achieves Industry-City Integration andCommunity Co-Governance

At the Bar Mill #2 Rolling Shop Party Branch in Jinan's SteelCity Base, the Company formed a pairing with the TietonggouCommunity Party Branch of Rixin Street for collaborativeinitiatives that refine service approaches and boost governanceeffectiveness. By consistently addressing community issues ofgreatest concern, we enhance residents' sense of happinessand satisfaction.

Case: Steel City Base Partners with Local Community to Enhance Governance

Caring for Society, Fulfilling Responsibilities

Shandong Steel actively engages in public welfare initiatives such as rural revitalization, volunteer services, charitable donations,and targeted assistance for those in need. By taking on social responsibilities, the Company contributes to harmonious societalprogress. Contributing to Rural RevitalizationBy providing financial aid, dispatching First Secretaries, and implementing "Warm-Heart Benefiting Agriculture" livelihoodprojects, we facilitate rural revitalization. At the same time, the Company leverages its resources and expertise to engage inpublic welfare programs and broad-based social activities, helping drive poverty alleviation.In 2024, we fully utilized consumption-based poverty alleviation to shore up poverty reduction gains by purchasing 1,000 sets ofagricultural and sideline products from Tibet and Xinjiang, totaling 98,000 CNY. Supporting Community DevelopmentWorking hand in hand with local communities, Shandong Steel combines its new-old kinetic energy transformation withcommunity governance, collectively forging a fresh chapter in enterprise-local development. Through taxation, job creation, andinfrastructure improvements, the Company raises living standards for residents. With a strong sense of duty, we participate incommunity governance, sharing development benefits and promoting sustainable community progress. Since 2023, the Companyhas actively engaged in ten major urban development projects, investing in the "Green Steel-Intelligent Energy Transformation"to supply clean, efficient energy. We have also enhanced the environs of older factory sites by creating the "Shandong SteelEnjoyable Community," further enriching our co-construction efforts and injecting renewed vitality into local neighborhoods.

2024

2024 Sustainability ReportAppendix

102103

Participation in Public Service ActivitiesThe Company actively fulfills its social responsibilities through volunteerservices, charitable donations, and other forms of assistance.Public Welfare Donations:Our "Love Union" volunteer service team set up a

donation channel with the Handicraft College in Xinlong County, Ganzi TibetanAutonomous Prefecture in Sichuan, mobilizing young employees to donateclothing. Through this donation platform, we shared love and aid with childrenin need, supporting their healthy growth.

In the North District of Jinyu Jiayuan, Donggang District of Rizhao City, the Rizhao Base hosted a community volunteerservice event themed "Lei Feng Spirit Lasts Forever, Volunteer Service Never Ends." Activities ranged from homeappliance repairs, TCM consultations, knife sharpening, blood pressure and glucose checks, phone lamination,ultrasonic cleaning, and haircuts to fire safety demonstrations and distribution of women workers' rights manuals.Over 80 volunteers participated in 13 different services, benefiting more than 2,000 community residents who gaveunanimous praise.

In March 2024, we- through the Company's Youth League Committee- organized a "Carry Forward the Lei Feng Spirit,Strive to Be the Vanguard of Our Times" centralized volunteer initiative at eight service points across Jinan's SteelDistrict (Jinding South, Xinxing Square, Lakeside Park, etc.). We provided over 30 services, including haircuts, bloodpressure measurements, knife/scissor sharpening, and appliance repairs, attracting 180+ volunteers and earning wideappreciation from the public.Later in June 2024, the Company's Youth League Committee set up exam-service stations at Laigang High School andLaiwu No.4 Middle School, installing awnings and seating for parents' comfort, and offering bottled water and exammaterials to both students and parents, thus ensuring a smoother testing experience.

Case: Rizhao Base Organizes "Lei Feng Spirit Lasts Forever, Volunteer Service Never Ends" Community Event

Case: Steel City Base Launches Community Convenience Volunteer Service

Volunteer Activities:Our volunteer efforts cover various domains, including elder care, educational assistance, and exam

support, at an annual budget of about 50,000 CNY. Notably, the Special Steel Plant's "Little Raindrop" Charity Association offersongoing volunteer services for isolated seniors, special-needs children, and struggling families in the Steel District of Jinan andsurrounding areas. The Association also hosts community convenience programs and environmental initiatives. In 2024 alone,volunteer services occurred over 50 times, benefiting 2,000+ people and raising 170,000+ CNY in relief funds.

IndicatorUnit202220232024

Operating revenueRMB 1,000 102,289,420 90,475,062 82,094,093Profit/ (loss) before taxRMB 1,000 1,506,232 -98,216 -2,507,187Total taxRMB 1,0001,619,424867,215918,098Total cash dividends (including tax)

RMB 1,000 641,931 320,966 120,385Cash dividend per 10 sharesRMB0.60.30.11Social contribution value per shareRMB/share0.750.450.25

IndicatorUnit202220232024Environmental managementEnvironmental investmentRMB million 2,808 420 1,172Environmental pollution incidentsItem000Environmental fines during thereporting

RMB 1,000000Environment training coverage%100100100Environmental protection performanceevaluation(The highest grade: A)

AAAThe proportion of operations certified bythe environmental management system

%100100100The proportion of operations certifiedby the energy management system

%100100100

Energy

Energy consumption

Tonne standard

coal

8,139,329.00 8,058,786.11 7,052,242.49Comprehensive energy consumptionper tonne of steel

Kg/tonne531.25 502.94 471.97Self-generated electricitymillion kWh2,8553,162 3,061

Economic Indicators

Environmental Indicators

ESG Performance Indicators Form

Appendix

The total dividends for2024equal the actual cash amount used by Shandong Steel to repurchase shares during the year. According to Article

of the Shanghai Stock Exchange’s Self-Regulatory Guidelines No.

for Listed Companies-Share Repurchase, when a listed company repurchasesshares via centralized bidding or tender offer with cash consideration, the amount spent on share repurchases during the year shall be regarded ascash dividends and included in the calculation of the annual cash dividend ratio.

In 2024Volunteer service hours totaled54,354Per capita volunteer service hours totaled

2024

2024 Sustainability ReportAppendix

104105

IndicatorUnit202220232024Water resourcesFresh water consumptionTonne3,574.45 3,481.06 3174.79Water recycled rate%98.32 98.30 97.04Fresh water intensitym

/t-crude2.30 2.34 2.125

Wastewater dischargeTotal wastewater discharge1,000 tonnes 5,607 6,464 6,741Chemical oxygen demand inwastewater discharge

Tonne95.92 133.03 124.43Ammonia nitrogen(NH

-N) inwastewater

Tonne1.098 1.640 3.343Pollutant emissionsParticulate matter（PM）Tonne3,554.52 3,677.96 2,658.81Sulfur dioxides（SO

）emissionsTonne1,583.97 1,520.72 1,404.19Nitrogen oxides（NOx）emissionsTonne3,438.99 3,545.07 4,083.57Waste materialsWaste generation1,000 tonnes 9,909 9,306 8,340General waste generation1,000 tonnes 9,514 8,935 7,953General waste recycled1,000 tonnes 9,496 8,921 7,945General waste disposal1,000 tonnes 18 14 9Hazardous waste generation1,000 tonnes 395 371 386Hazardous waste of harmlessdisposal

1,000 tonnes 395 371 386Waste Recycling Rate%95.8395.86 95.27Clean productionUtilization rate of solid waste%100100100Comprehensive utilization rate ofsteel slag

%100100 100GHG emissionsDirect emissions (Scope 1)tCO

e23,712,62424,512,87724,821,339Indirect emissions (Scope 2)tCO

e4,150,0322,670,9372,331,860Direct/indirect GHG emissions(Scope 1 & 2)

tCO

e27,862,65627,183,81326,988,399

Social IndicatorsSocial IndicatorsUnit202220232024EmployeesTotal number of employeesPerson16,96716,53516,031Number of male employeesPerson14,74714,57314,181Number of female employeesPerson2,2201,9621,850Number of employees aged 30 or youngerPerson2,0412,0292,018Number of employees aged 30-50Person11,45411,2229,556Number of employees aged 50 or olderPerson3,4723,2844,457Number of ethnic minority employeesPerson13513091Number of empioyees with disabilitiesPerson495141Proportion of employees with disabilities%0.290.310.26Number of veterans recruited Person 135Employee turnover rate%0.260.350.57Turnover rate of male employees%0.230.220.48Turnover rate of female employees%0.120.040.09Amount invested in employee work safety liabilityinsurance

RMB 1,000 678 594 555Amount invested in employee work injury insuranceRMB 1,000 27,441 20,003 22,212Employee work injury insurance coverage%100100100Signing rate of labor contracts%100100100Proportion of employees covered by collectiveagreements

%100100100Number of labor dispute casesItem000Number of discrimination and harassment incidentsItem000Training ratio of employees for Anti discriminationand opposition to human rights violations

%100100100Social insurance coverage%100100100

2024

2024 Sustainability ReportAppendix

106107

Social IndicatorsUnit202220232024Total number of female employees on parentalleave

Person176169158Return rate and retention rates of femaleemployees on parental leave

%100100100Number of assisted employees in difficultyPerson193193352Number of paid annual leave days per capitaDay999.5Employee satisfaction%100100100Annual investment in vocational trainingRMB 1,000 68,620 94,840 95,040Employee training coverage%100100100Total training hoursHour2,442,6374,071,0624,102,890Training hours per capitaHour898599Percentage of employees receiving regularperformance and career development reviews

%100100100Physical examinationPhysical examination coverage%100100100Occupational disease incidence ratePerson000Number of newly added RMB million118128120Total investment in work safetyRMB million243Number of work safety accidentsNOS100Number of work-related deaths(Number of workinjuries for in-house employees and labor dispatchworkers)

Person000Work injury rate%000Working days lostDay000Number of safety trainingPerson-times149,838156,450188,912Safety training hoursHour1,279,6761,356,2012,265,481Safety risk prevention training %100100100

Social IndicatorsUnit202220232024Product and customer serviceAmount incurred for major safety and qualityliability incidents related to products and servicesduring the reporting period

RMB 1,000000Specific amount involved in customer privacybreach incidents

RMB 1,000000Total number of non-compliance incidents relatedto health, safety, and labeling of products andservices provided

NOS000Complaint resolution rate%100100100Customer satisfactionPoints87.308990Total number of non-compliance incidents relatedto customer

NOS000Supplier managementTotal number of suppliersNOS2,3362,5641,980Proportion of suppliers in mainland China%100100100Total number of procurement orders on biddingprocurement platform

Item7,3647,55314,142The proportion of green procurement of equipmentand materials

%100100100The proportion of equipment and materialspurchased from the local

%80.572.5461InnovationR&D investmentsRMB 1,000 3,146,945 2,855,193 2,707,792Proportion of R&D investment to operating revenue%3.083.163.30Number of R&D staffPerson1,9311,7761,747Proportion of R&D staff%11.3810.4710.9Number of invention patents applied to corebusiness operations

PCS890686979Number of invention patents appliedPCS564548544Number of innovation patents grantedPCS400426381Rural revitalization and social contributionVolunteer service hoursHour80,77664,63854,354Per capita volunteer service hoursHour232116

2024

2024 Sustainability ReportAppendix

108109

Governance IndicatorsIndicatorUnit202220232024Proportion of independent directors%564344Proportion of female directors%11011Number of board meetingsTime101116Number of Strategic Planning and ESG Committeemeetings

Time213Number of Risk Management and Audit Committeemeetings

Time447Number of Budget, Compensation, and AssessmentCommittee meetings

Time222Number of Nominating Committee meetingsTime128Frequency of performance releaseTime333Investment Bank Strategy ConferenceCount212Conference callCount204Hosting investor visitsPerson31646Responding to investor questionsNOS422356375Investor relations questionnaireNOS111Number of regular announcementsNOS444Number of temporary announcementsNOS494980Proportion of independent directors serving on Boardsof more than 3 listed companies

%000Proportion of independent directors serving on Boardsof more than 6 listed companies

%000Percentage of directors who have received anti-commercial bribery and anti-corruption training

%100100100Percentage of management personnel who havereceived anti - commercial bribery and anti -corruption training

%100100100Percentage of employees who have received anti-commercial bribery and anti-corruption training

%100100100The proportion of operations that have conductedinternal audits/risk assessments on businessethics issues

%100100100

Statement of use

Shandong Steel has reported in accordance with the GRI Standards for the periodJanuary 1 to December 31, 2024.

GRI 1 usedGRI 1: Foundation 2021

Applicable GRI Sector Standard(s)None

DisclosureLocation

GRI 2: GeneralDisclosures 2021

2-1 Organizational detailsExploring Shandong Steel2-2 Entities included in the organization'ssustainability reporting

About This Report2-3 Reporting period, frequency andAbout This Report2-4 Restatements of informationAbout This Report2-5 External assuranceNot applicable2-6 Activities, value chain and other businessrelationships

Exploring Shandong SteelWin-Win Cooperation, Deepening Supply ManagementExcellent Quality, Forging Customer Value2-7 Employees

People-Oriented, Building a Better Home TogetherESG Performance Indicators Form2-8 Workers who are not employees

Safety First, Protecting Occupational HealthWin-Win Cooperation, Deepening Supply Management2-9 Governance structure and composition

Standardizing Operations and Optimizing the Governance System

Integrated Planning and Deepening ESG Management2-10 Nomination and selection of the highestgovernance body

For details, please refer to the Company's 2024 Annual Report2-12 Role of the highest governance body inoverseeing the management of impacts

For details, please refer to the Company's 2024 Annual Report2-13 Delegation of responsibility for managingimpacts

For details, please refer to the Company's 2024 Annual Report2-14 Role of the highest governance body insustainability reporting

Integrated Planning and Deepening ESG Management2-15 Conflicts of interest

Advocating Virtue, Fulfilling Promises, and Adhering to Business

Ethics2-16 Communication of critical concernsStandardizing Operations and Optimizing the Governance System2-17 Collective knowledge of the highestgovernance

Integrated Planning and Deepening ESG Management2-19 Remuneration policiesPeople-Oriented, Building a Better Home Together2-20 Process to determine remunerationPeople-Oriented, Building a Better Home Together

GRI Index

2024

2024 Sustainability ReportAppendix

110111

DisclosureLocation

GRI 2: GeneralDisclosures 2021

2-22 Statement on sustainable developmentstrategy

Message from the Chairman2-23 Policy commitmentsPeople-Oriented, Building a Better Home Together2-24 Embedding policy commitments

Taking Precautions and Strengthening Risk Control ManagementWin-Win Cooperation, Deepening Supply Management2-25 Processes to remediate negative impacts

Advocating Virtue, Fulfilling Promises,and Adhering to Business EthicsExcellent Quality, Forging Customer Value2-26 Mechanisms for seeking advice and raisingconcerns

Integrated Planning and Deepening ESG Management

People-Oriented, Building a Better Home Together2-27 Compliance with laws and regulationsFor details, refer to the respective sections2-28 Membership associations

Exploring Shandong SteelInnovation-Driven, Unleashing Development Momentum2-29 Approach to stakeholder engagementIntegrated Planning and Deepening ESG Management2-30 Collective bargaining agreementsPeople-Oriented, Building a Better Home TogetherMaterial topics

GRI 3: Material Topics2021

3-1 Process to determine Integrated Planning and Deepening ESG Management3-2 List of material topicsIntegrated Planning and Deepening ESG Management3-3 Management of material Integrated Planning and Deepening ESG ManagementEconomic performance

GRI 201: EconomicPerformance 2016

201-1 Direct economic value generated anddistributed

ESG Performance Indicators Form201-2 Financial implications and other risks and

Guided by the Dual-Carbon Strategy, Optimizing Climate

Management201-3 Defined benefit plan obligations and otherretirement plans

People-Oriented, Building a Better Home TogetherIndirect economic impactsGRI 203: IndirectEconomic Impacts2016

203-1 Infrastructure investments and servicessupported

Caring for Society, Fulfilling Responsibilities203-2 Significant indirect economic impactsCaring for Society, Fulfilling ResponsibilitiesProcurement practicesGRI 204: ProcurementPractices 2016

204-1 Proportion of spending on local suppliersWin-Win Cooperation, Deepening Supply Management

DisclosureLocationAnti-corruption

GRI 205: Anti-corruption 2016

205-1 Operations assessed for risks related tocorruption

Advocating Virtue, Fulfilling Promises, and Adhering to Business Ethics205-2 Communication and training about anti-corruption policies and procedures

Advocating Virtue, Fulfilling Promises, and Adhering to Business Ethics205-3 Confirmed incidents of corruption andactions taken

Advocating Virtue, Fulfilling Promises,and Adhering to Business EthicsESG Performance Indicators FormAnti-competitive behaviorGRI 206: Anti-competitive Behavior2016

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

The company has not been involved in any relevant legal

proceedings.

GRI 207: Tax 2019

207-1 Approach to taxOperating with Integrity and Optimizing Tax Management207-2 Tax governance, control, and riskmanagement

Operating with Integrity and Optimizing Tax Management207-3 Stakeholder engagement and managementof concerns related to tax

Operating with Integrity and Optimizing Tax ManagementMaterialsGRI 301: Materials2016

301-1 Materials used by weight or volumeMaximizing Energy Efficiency and Enhancing Resource Utilization301-2 Recycled input materials usedMaximizing Energy Efficiency and Enhancing Resource Utilization301-3 Reclaimed products and their packagingmaterials

Maximizing Energy Efficiency and Enhancing Resource UtilizationEnergy

GRI 302: Energy 2016

302-1 Energy consumption within the organizationESG Performance Indicators Form302-3 Energy intensityESG Performance Indicators Form302-4 Reduction of energy consumptionMaximizing Energy Efficiency and Enhancing Resource Utilization302-5 Reductions in energy requirements ofproducts and services

Maximizing Energy Efficiency and Enhancing Resource Utilization

GRI 303: Water andEffluents 2018

303-1 Interactions with water as a sharedresource

Saving Water and Protecting Our Source of Life303-2 Management of water discharge-relatedimpacts

Saving Water and Protecting Our Source of Life303-3 Water withdrawalESG Performance Indicators Form303-4 Water dischargeESG Performance Indicators Form303-5 Water consumptionESG Performance Indicators Form

2024

2024 Sustainability ReportAppendix

112113

DisclosureLocationBiodiversity

GRI 304: Biodiversity2016

304-1 Operational sites owned, leased, managedin, or adjacent to, protected areas and areas ofhigh biodiversity value outside protected areas

Harmonious Coexistence, Safeguarding Biodiversity304-2 Significant impacts of activities, productsand services on biodiversity

Harmonious Coexistence, Safeguarding Biodiversity304-3 Habitats protected or restoredHarmonious Coexistence, Safeguarding BiodiversityEmissions

GRI 305: Emissions2016

305-1 Direct (Scope 1) GHG emissionsESG Performance Indicators Form305-2 Energy indirect (Scope 2) GHG emissionsESG Performance Indicators Form305-4 GHG emissions intensity

Guided by the Dual-Carbon Strategy,Optimizing Climate Management305-5 Reduction of GHG emissions

Guided by the Dual-Carbon Strategy,

Optimizing Climate Management305-6 Emissions of ozone-depleting substances(ODS)

The Company's productionand operations do not generate ODS; thus, it is not disclosed305-7 Nitrogen oxides (NOx), sulfur oxides (SOx),and other significant air emissions

Strengthening the Foundationand Deepening Environmental Governance

ESG Performance Indicators Form

Waste

GRI 306: Waste 2020

306-1 Waste generation and significant waste-related impacts

Recycling and Enhancing Solid Waste Disposal306-2 Management of significant waste-relatedimpacts

Recycling and Enhancing Solid Waste Disposal306-3 Waste generatedESG Performance Indicators Form306-4 Waste diverted from disposalESG Performance Indicators Form306-5 Waste directed to disposalESG Performance Indicators FormSupplier environmental assessmentGRI 308: SupplierEnvironmentalAssessment 2016

308-1 New suppliers that were screened usingenvironmental criteria

Integrated Planning and Deepening ESG Management308-2 Negative environmental impacts in thesupply chain and actions taken

Integrated Planning and Deepening ESG Management

ESG Performance Indicators Form

DisclosureLocationEmployment

GRI 401: Employment2016

401-1 New employee hires and employee turnoverESG Performance Indicators Form401-2 Benefits provided to full-time employeesthat are not provided to temporary or part-timeemployees

People-Oriented, Building a Better Home Together401-3 Parental leaveESG Performance Indicators FormLabor/management relationsGRI 402: Labor/ManagementRelations 2016

402-1 Minimum notice periods regardingoperational changes

The Company currently has no material operational changes to

reportOccupational health and safety

GRI 403: OccupationalHealth and Safety2018

403-1 Occupational health and safety managementsystem

Safety First, Protecting Occupational Health403-2 Hazard identification, risk assessment, andincident investigation

Safety First, Protecting Occupational Health403-3 Occupational health servicesSafety First, Protecting Occupational Health403-4 Worker participation, consultation, andcommunication on occupational health and safety

Safety First, Protecting Occupational Health

ESG Performance Indicators Form403-5 Worker training on occupational health andsafety

Safety First, Protecting Occupational Health403-6 Promotion of worker healthSafety First, Protecting Occupational Health403-7 Prevention and mitigation of occupationalhealth and safety impacts directly linked bybusiness relationships

Safety First, Protecting Occupational Health403-8 Workers covered by an occupational healthand safety management system

Safety First, Protecting Occupational Health403-9 Work-related injuriesESG Performance Indicators Form403-10 Work-related ill healthESG Performance Indicators FormTraining and education

GRI 404: Training andEducation 2016

404-1 Average hours of training per year peremployee

ESG Performance Indicators Form404-2 Programs for upgrading employee skillsand transition assistance programs

People-Oriented, Building a Better Home Together404-3 Percentage of employees receiving regularperformance and career development reviews

ESG Performance Indicators Form

2024

2024 Sustainability ReportAppendix

114115

GRI TopicReasons for Omission304-4，305-3，411-1，415-1

The core business of the company has little relevance or importance to this indexinformation, therefore they will not be disclosed.2-11，201-4，207-4For further details, please refer to the company's 2024 Annual Report.2-18，2-21，202-1，202-2，302-2，405-2

Due to information confidentiality requirements, they will not be disclosed to the publictemporarily.

Topics in the applicable GRI Sector Standards determined as not material

DisclosureLocation

Diversity and equal opportunityGRI 405: Diversity andEqual Opportunity2016

405-1 Diversity of governance bodies andemployees

Standardizing Operations and Optimizing the Governance SystemPeople-Oriented, Building a Better Home TogetherESG Performance Indicators Form

Non-discriminationGRI 406: Non-discrimination 2016

406-1 Incidents of discrimination and correctiveactions taken

People-Oriented, Building a Better Home TogetherFreedom of association and collective bargainingGRI 407: Freedomof Association andCollective Bargaining2016

407-1 Operations and suppliers in which the rightto freedom of association and collective bargainingmay be at risk

People-Oriented, Building a Better Home TogetherWin-Win Cooperation, Deepening Supply ManagementChild laborGRI 408: Child Labor2016

408-1 Operations and suppliers at significant riskfor incidents of child labor

People-Oriented, Building a Better Home TogetherWin-Win Cooperation, Deepening Supply ManagementForced or compulsory laborGRI 409: Forced orCompulsory Labor2016

409-1 Operations and suppliers at significant riskfor incidents of forced or compulsory labor

People-Oriented, Building a Better Home TogetherWin-Win Cooperation, Deepening Supply ManagementSecurity practicesGRI 410: SecurityPractices 2016

410-1 Security personnel trained in human rightspolicies or procedures

Safety First, Protecting Occupational HealthLocal communitiesGRI 413: LocalCommunities 2016

413-1 Operations with local communityengagement, impact assessments, anddevelopment programs

Caring for Society, Fulfilling Responsibilities413-2 Operations with significant actual andpotential negative impacts on local communities

The Company has not identified any operations with actual or

potential material adverse impacts on local communities

Supplier social assessmentGRI 414: SupplierSocial Assessment2016

414-1 New suppliers that were screened usingsocial criteria

Win-Win Cooperation, Deepening Supply Management414-2 Negative social impacts in the supply chainand actions taken

Win-Win Cooperation, Deepening Supply Management

ESG Performance Indicators Form

DisclosureLocation

Customer health and safetyGRI 416: CustomerHealth and Safety2016

416-1 Assessment of the health and safetyimpacts of product and service categories

Excellent Quality, Forging Customer Value416-2 Incidents of non-compliance concerning thehealth and safety impacts of products and services

ESG Performance Indicators FormMarketing and labeling

GRI 417: Marketingand Labeling 2016

417-1 Requirements for product and serviceinformation and labeling

Excellent Quality, Forging Customer417-2 Incidents of non-compliance concerningproduct and service information and labeling

ESG Performance Indicators Form417-3 Incidents of non-compliance concerningmarketing communications

ESG Performance Indicators Form

Customer privacyGRI 418: CustomerPrivacy 2016

418-1 Substantiated complaints concerningbreaches of customer privacy and losses ofcustomer data

ESG Performance Indicators FormSocioeconomic ComplianceGRI 419:

SocioeconomicCompliance 2016

419-1 Non-compliance with laws and regulationsin the social and economic area

The Company did not identify any instances of non-compliancewith laws or regulations related to social and economic areas

during the reporting period.

2024

2024 Sustainability ReportAppendix

116117

Greetings!Thank you for reading this report. In order to improve the Company's ESG work and enhance our ESG ability and level, weespecially want to listen to your opinions and suggestions, and we kindly evaluate our report amidst your busy schedule, so as tohelp us continuous improve the report. Please help to complete the relevant questions in the feedback form and provide us withfeedback in the following ways. Your valuable comments are very welcome and sincerely appreciated!Shandong Iron and Steel Co., Ltd. ESG Work Of?ceAddress：No.99, Fuqian Street, Gangcheng District, Jinan, China.Tel: 0531-77920789 Email: sdgt600022@126.comPostal code: 271104 Fax: 0531-77920798

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Open Questions:

1. What suggestions do you have for Shandong Steel's work related to sustainable development and ESG work?

2. What deficiencies do you think exist in this report?

3. What else sustainable development and ESG information do you think needs to be disclosed in this report?

Feedback Form

Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation ofListed Companies — Sustainability Report (Trial)DimensionNumberTopicClauseLocation

Environment

1Climate change tacklingArticles 21-28

Guided by the Dual-Carbon Strategy, OptimizingClimate Management2Pollutant dischargeArticle 30Recycling and Enhancing Solid Waste Disposal3Waste disposalArticle 31Recycling and Enhancing Solid Waste Disposal

Ecosystem and biodiversityprotection

Article 32

Harmonious Coexistence, SafeguardingBiodiversity

Environmental compliancemanagement

Article 33

Strengthening the Foundation and DeepeningEnvironmental Governance6Energy usageArticle 35

Maximizing Energy Efficiency and EnhancingResource Utilization7Usage of water resourcesArticle 36Saving Water and Protecting Our Source of Life8Circular economyArticle 37

Maximizing Energy Efficiency and EnhancingResource Utilization

Society

9Rural revitalizationArticle 39Caring for Society, Fulfilling Responsibilities10Contributions to the societyArticle 40Caring for Society, Fulfilling Responsibilities11Innovation-drivenArticle 42

Innovation-Driven, Unleashing DevelopmentMomentum

Ethics of science andtechnology

Article 43This matter is not relevant to our business13Supply chain securityArticle 45

Win-Win Cooperation, Deepening SupplyManagement

Equal treatment to small andmedium-sized enterprises

Article 46

Win-Win Cooperation, Deepening SupplyManagement

Safety and quality of productsand services

Article 47Excellent Quality, Forging Customer Value

Data security and customerprivacy protection

Article 48Information Security: Building a Solid Data Barrie17EmployeesArticle 50

People-Oriented, Building a Better HomeTogether;Safety First, Protecting OccupationalHealth

ustainability-

relatedgovernance

18Due diligenceArticle 52

Integrated Planning and Deepening ESGManagement; Win-Win Cooperation, DeepeningSupply Management

Communications withstakeholders

Article 53

Integrated Planning and Deepening ESGManagement

Anti-commercial bribery andanti-corruption

Article 55

Advocating Virtue, Fulfilling Promises, andAdhering to Business Ethics21Anti- unfair competitionArticle 56

Advocating Virtue, Fulfilling Promises, andAdhering to Business Ethics

2024 Sustainability Report

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Sustainability Report2024

Shandong Iron and Steel Co., Ltd.

2024 Sustainability Report

2024 Sustainability Report