一、Statement by the Board of Directors on ESG situation

Sustainable development under the dual carbon background is an inevitable product of social productivity development and technological progress, and a golden key to solving current global climate change and other issues. The achievement of the "dual carbon" goal depends on the green transformation of economic and social development, and also requires industry leaders with a sense of social responsibility to bravely break through bottleneck technologies and firmly forge a path of technological innovation and development.

In order to actively respond to the national policy of "carbon peak and carbon neutrality" and follow the development concept of "green mountains and clear waters are invaluable assets", the company will continue to integrate the pursuit of a better life into the green and low-carbon cause, with the goal of meeting the constantly upgrading needs of the economy and society. We will take the lead in industry progress and upgrading, fully utilize our accumulated experience in the field of consumer electronics We actively carry out forward-looking layout in the field of passenger cars and special equipment, accelerate the cultivation of low-carbon and environmentally friendly products, and research on cutting-edge technology and core technologies related to special functional coating materials, leading the green and sustainable development of the industry.

　　Digital upgrade and green operation management.

The new round of technological revolution is driving the deepening development of industrial transformation, and the new materials industry is accelerating the transformation of manufacturing towards intelligence and greenery, especially the accelerated development of digital technology, which is promoting the transformation of traditional models to modern models. Currently, industries such as consumer electronics, new energy, passenger cars, and high-end equipment are growing rapidly, and competition in domestic and international industries is becoming increasingly fierce. Technological innovation, customer demand, and dynamic costs are constantly changing. The company actively incorporates the concept of sustainable development into its specific business through digital means in the form of data and intelligence, empowering the entire production, management, and employment processes of the enterprise, and improving the efficiency of enterprise operation and management.

In order to explore the path of digital transformation and promote high-quality and sustainable development of enterprise economy, since 2016, the company has taken the lead in applying digital technology to various resources and processes of enterprises, becoming the first domestic coating manufacturing enterprise to invest in DCS automation distributed control systems in the UV coating field. It has achieved modern intelligent manufacturing and green factory construction, driven the adjustment of industry structure and led the upgrading of the industry. In 2020, the company fully launched digital upgrading, empowering green and promoting the construction of low-carbon or zero carbon factories throughout the entire process with digital intelligence. While shortening the research and development cycle, production efficiency and one-time success rate of products have significantly improved. It has been successfully recognized as a model enterprise for intelligent manufacturing in Changsha, a green factory in Hunan Province, and a national green factory. With practical actions, it has fulfilled its commitment to sustainable development for society and investors.

　　Green and low-carbon, environmental protection first.

Under the dual carbon background, global efforts have been intensified to reduce carbon emissions in consumer electronics, automobiles, and industrial manufacturing, vigorously promoting low-carbon production transformation. Thanks to years of practice in the field of low VOCs coatings such as UV curable coatings and water-based coatings, the company evaluates the carbon footprint of products within the lifecycle range of raw materials, resin synthesis, solvents, monomers, pigments, transportation, and final product packaging and storage based on life cycle assessment. It also controls key elements such as raw materials, resins, and solvents that are most sensitive to carbon footprint.

In order to further improve the sustainability of raw materials, formulas, and manufacturing processes, the company has made additions in technology and environmental protection. In the past three years, R&D investment has remained above 10% of operating revenue, with a continuous high proportion of R&D investment. We have vigorously introduced high-end professional talents in the industry, promoted carbon reduction and reduction through technological innovation, and provided full process environmental protection and safety facilities. On the other hand, by subtracting energy consumption and working from the source to find ways to reduce environmental impact, we have conquered the core technology of coatings by optimizing resin structure and exploring new processes. We have proactively independently developed a series of environmentally friendly coatings and ink products with superior performance.

On the path of pursuing green and low-carbon development, the company has never stopped exploring, doing both actuarial tasks and technological transformation, such as online document processes and energy-saving equipment upgrades; Advocate employees to work without paper, save electricity, cherish water sources, sort garbage, plant green plants, and accelerate the formation of a green lifestyle; Establish a green raw material supply system and actively guide the procurement and use of green products; Carry out a lean 6S action for all employees, install ventilation and waste gas treatment facilities, classify and recycle waste, promote packaging reuse, and other measures to help achieve carbon peak and carbon neutrality goals.

　　Technological innovation, low-carbon first.

At the beginning of its establishment, the company established a research and development concept of "demand orientation, forward-looking planning, highlighting characteristics, and proactive iteration" and a strategic development path of "technological innovation". It attached great importance to enterprise technology innovation. In 2009, the enterprise technology center was established, and in 2011, it was approved to build the Hunan Province UV Coating Engineering Technology Research Center. In 2015, it was recognized as the Hunan Province Enterprise Technology Center, In 2021, it was rated as one of the "Top 100 Enterprises" in research and development investment in Xiangjiang New Area, Hunan Province. In 2022, it was recognized by the National Development and Reform Commission as a national enterprise technology center... The unremitting pursuit of technology continuously injects strong momentum into the company's growth; The persistence in innovation enables the company's development to be stable and powerful. In order to create a gravitational field for the convergence of technological innovation elements, a main battlefield for cultivating strategic technological forces, and an important engine for enterprise technological innovation, following the establishment of Songjing Research Institute in Hunan in 2020, we continue to increase research and development investment and the construction of innovation achievement transformation bases. In 2021, Songjing Guangdong Research Institute was established in Songshan Lake, Dongguan, China, and in 2022, Shanghai Songjing Research Institute was registered and established in Shanghai, China, The research institute embraces outstanding talents from all over the world with a mindset of "using them to gather talents from all over the world". At the same time, the company continuously deepens its joint research and development with universities such as Central South University and Hunan University, focusing on surface treatment in strategic emerging fields such as consumer electronics, passenger cars, and special equipment, as well as the application of basic theories and key technologies of functional coating materials such as coatings, inks, and adhesives. It is committed to solving surface and functional coating protection problems in complex and harsh service environments such as high heat, high humidity, deep sea, and deep space.

　　For the ultimate innovation, go all out.

The company regards "continuously surpassing and creating exciting scenes" as its noble mission, continuously surpassing customer needs, providing leading system solutions, creating diverse value, and making it more favored and loved by consumers. For example, under the guidance of customer demand, the company has innovated its existing silicone tactile coating products and pioneered the solution of providing silicone tactile coatings for automotive components in China, which has been successfully used in multiple automotive interior and exterior component projects. At the same time, actively seeking ways and solutions from the perspective of technology, truly creating value for customers, thereby promoting the efficiency improvement of the entire industry and value chain, and creating a win-win ecosystem for upstream and downstream enterprises.

　　Our mission is on our shoulders, we are determined to move forward.

The company uses products and technology to support economic development and contribute to the high-quality development of China's manufacturing industry. While not forgetting its original intention and thinking about its origins, it participates in social welfare activities such as caring for students and farmers, helping the poor and disabled, and emergency disaster relief, interpreting its corporate responsibility with a trickle down force. Reduce employee operational risks through safety training, hazard investigation, special inspections, safety assessments, and other means; Develop occupational disease prevention measures, regularly monitor and protect employees, attach importance to their physical and mental health, and actively create a safe, orderly, and harmonious working environment; Establish a mutual aid fund to provide assistance to employees and their families in need. At the same time, we will build a learning oriented enterprise, build a talent pool of different levels, continuously promote the gradual standardization and normalization of employee learning and growth, adopt diversified approaches such as internal teaching, job rotation training, external communication, and school enterprise cooperation, fully mobilize employee learning enthusiasm, and continuously optimize employee knowledge structure. Build a fair and just talent evaluation and incentive mechanism, comprehensively stimulate the passion and vitality of employees at all levels to create value, and continuously surpass their dreams.

In order to establish a modern corporate governance system that is scientifically standardized, effectively balanced, and operates efficiently, the company strictly operates in accordance with the governance structure of the shareholders' meeting, board of directors, supervisory board, and management. The "three meetings and one layer" exercise decision-making, execution, and supervision powers according to their respective responsibilities, ensuring that major decisions and other behaviors are legal, compliant, true, and effective, and safeguarding the long-term development and compliant operation of the company.

We attach great importance to the reasonable investment return for investors, and have established a sustained and stable dividend return mechanism for investors based on the company's profitability and the actual needs of future business development strategies, maintaining the consistency, rationality, and stability of profit distribution policies. Strictly fulfill the responsibility and obligation of information disclosure of listed companies, ensure timely and accurate disclosure of company information to investors, and fully protect the right to know of investors. Adopting a "value dissemination strategy", actively organizing various shareholder meetings and investor receptions, and facilitating communication channels to enhance investor understanding of the company and establish a good relationship between the company and shareholders.

Those who have no rest, although difficult, will always be easy; Those who do not go far will surely achieve excellence. A green and sustainable future is not just a slogan, but a cumulative combination that can achieve power that affects the environment, society, and industry. The company will move forward with a stronger sense of mission and responsibility.

　　二、Environmental information situation

　　(一)Is it a key pollutant discharge unit announced by the environmental protection department

　　The company is not listed as a key pollutant discharge unit by the environmental protection department.

　　1、Construction and operation of pollution prevention and control facilities

The company deeply implements relevant laws, regulations, and rules such as the Environmental Protection Law and the Energy Conservation Law, promotes resource conservation work from multiple perspectives, responds to the call for "green environmental protection, low-carbon life", shoulders the corporate responsibility of protecting the environment, and fully integrates the awareness of open source energy conservation into the environmental management process. We have established internal systems such as the Greenhouse Gas Control Management System and the Energy Resource Management System, actively carried out energy-saving and consumption reduction renovations within the factory area, improved energy efficiency, and reduced environmental damage by reducing pollutants and hazardous waste generated during the operation process. At the same time, the company reasonably disposes of the generated emissions and conducts systematic monitoring to ensure that solid waste meets the discharge standards. The company has been awarded the titles of Intelligent Manufacturing Demonstration Enterprise in Changsha City and Green Factory in Hunan Province.

　　2、Environmental Impact Assessment of Construction Projects and Other Administrative Permits for Environmental Protection

The company has formulated the "EHS Three Simultaneous Management System for Construction Projects" in accordance with the Environmental Impact Assessment Law. According to the requirements of the system, the company entrusts qualified institutions to undertake the environmental impact assessment work of construction projects during the feasibility study stage of the project. The environmental impact assessment report is submitted to the environmental protection administrative department with approval authority for approval, and construction begins after obtaining approval.

　　3、Emergency plan for sudden environmental incidents

The company has established an emergency leadership group and developed an "Emergency Plan for Sudden Environmental Incidents" based on actual risks, which has been filed with the environmental regulatory department (filing number 430124-2021-011-H). To ensure rapid response and operation of emergency work in the event of sudden environmental incidents, the company regularly conducts professional training and emergency drills, continuously strengthening the emergency response capabilities of all employees to prevent safety risks.

In response to environmental risks, the company has established a comprehensive environmental management and occupational health and safety management system and procedures, which not only include macro level guiding policies, but also have micro level practical processes, such as the Hazard Identification, Risk Assessment and Control Procedure and EHS Accident Reporting and Handling System. By regularly identifying and assessing the risk levels of environmental factors, strengthening daily environmental pollution detection, increasing investment in environmental protection to upgrade environmental protection facilities and equipment, and strengthening emergency response capabilities for environmental incidents, we continuously improve our environmental protection level.

In identifying major environmental factors, by analyzing the environmental factors of production and business activities and products, using qualitative and quantitative methods to evaluate their risk level, forming a list of major environmental factors, and developing comprehensive management plans and control measures to prevent environmental risk events from occurring.

　　4、Environmental self monitoring plan

The company has developed an environmental self-monitoring plan based on the Technical Guidelines for Self Monitoring of Pollutant Discharge Units - Manufacturing of Coatings and Inks (GB1807-2020) and the Emission Standards for Air Pollutants in the Coatings, Inks and Adhesives Industry (GB37824-2019), and has entered it into the National Pollutant Discharge Permit Management Information Platform - Enterprise End and the National Pollution Source Monitoring Information Management and Sharing Platform.

The company entrusts a qualified third-party professional organization to conduct monthly inspections on the company's rainwater, exhaust gas, and noise production, and issues inspection reports. Timely upload the test results to the National Pollutant Discharge Permit Management Information Platform - Enterprise End and the National Pollution Source Monitoring Information Management and Sharing Platform.

　　(二)Administrative penalties imposed due to environmental issues during the reporting period

During the reporting period, the company did not receive any administrative penalties due to environmental issues.

　　(三)Resource energy consumption and emission information

The company belongs to a low energy consumption enterprise, and the main energy consumption involved in its operation is water and electricity.

The company's production only involves physical reactions, no chemical reactions, and does not contain heavy pollution processes. The pollutants in production and operation mainly include exhaust gas, wastewater, solid waste, and noise. Among them: (1) Waste gas mainly refers to the volatile organic waste gas (VOC) generated by the natural volatilization of materials and the cooking fumes from canteen life; (2) The wastewater mainly includes machine seal cooling water, equipment cleaning water, ground cleaning water, and a small amount of domestic wastewater; (3) Solid waste mainly consists of discarded raw and auxiliary packaging materials, filter residue from filtration processes, and some household waste; (4) Noise mainly refers to the noise generated by production equipment and other equipment.

In summary, the company's production and operation involve a small amount of hazardous waste and do not involve harmful substances such as heavy metals, resulting in minimal environmental impact.

　　1.Greenhouse gas emissions

The waste gas generated by the company mainly consists of volatile organic compounds (VOCs) generated by the natural volatilization of materials and kitchen fumes. The company has formulated the "Waste Gas Management System" in accordance with the "Air Pollution Prevention and Control Law". Volatile organic gases in production facilities and operating areas are comprehensively collected through exhaust systems. After being collected and treated in waste gas treatment facilities, they are discharged at high altitude and subjected to third-party testing. Continuously carry out the work of reducing the total amount of pollutants, and reduce the emissions of air pollutants such as VOCs, particulate matter, and non-methane total hydrocarbons through measures such as renovating the exhaust ducts in the workshop, upgrading the technology of external steam and VOCs treatment facilities, and adding catalytic combustion treatment facilities.

　　2.Energy and resource consumption situation

For water resources, the company has formulated a "Wastewater Management System" in accordance with the Water Pollution Prevention and Control Law. The company mainly uses municipal pipe network water in office, construction, and operation. Through measures such as using energy-saving and water-saving equipment, renovating green irrigation systems, designing rainwater and sewage diversion systems, and configuring reclaimed water recovery systems, the proportion of sewage recycling and utilization is continuously increased, and the consumption of water resources and the impact on the water environment by various business activities are reduced. At the same time, hire a third party to regularly test the COD (Chemical Oxygen Demand), ammonia nitrogen, pH and other indicators of the discharged wastewater to ensure compliance with discharge standards.

For electricity resources, the company adopts measures such as intelligent lighting, controlling the seasons, time periods, and temperature settings of air conditioning usage, and centralized production arrangements to reduce electricity consumption.

For gasoline and diesel resources, consumption is mainly reduced through overall planning of logistics links.

　　3.Waste and pollutant emissions

The company has established scientific waste management control procedures, chemical management procedures and other related standards to minimize the impact of its business operations on the environment, strictly control pollution, achieve green production, and help fight the battle against pollution.

For hazardous waste, a dedicated hazardous waste warehouse has been established, and the hazardous waste is uniformly handed over to qualified hazardous waste treatment companies for processing. According to relevant regulations on hazardous waste management, the management plan is filed with the local competent department on the Hunan Province Solid Waste Information Management Platform.

For solid waste, a waste list has been developed; Develop "Common Solid Waste Classification Standards" for clear classification; Set up different garbage bins or collection containers according to classification, with clear identification; Set up a dedicated waste warehouse, register and store it in a classified and partitioned manner, and regularly hand it over to qualified units for disposal.

For recyclable waste such as paper and plastic, we advocate for employees to classify their waste and set up sorting bins in areas such as office buildings and canteens on each floor. Employees are required to sort recyclable and non recyclable materials, and print garbage classification flyers to promote garbage classification and environmental protection knowledge, which has played a good promotional role.

In addition, the company has taken measures such as increasing the proportion of environmentally friendly and energy-saving materials used, improving production processes, and enhancing equipment automation levels to control and reduce the generation of pollutants from the source. Simultaneously promoting paperless office and reducing paper usage; Encourage the use of double-sided printing to reduce paper waste. Each department is required to collect and package unusable waste paper and document fragments, and collect them twice a year to reduce the impact of paper consumption on the environment.

　　4.The company's environmental management system and other information

The company strictly complies with the requirements of laws and regulations such as the Environmental Protection Law, the Environmental Impact Assessment Law, and the Solid Waste Pollution Prevention and Control Law, continuously strengthens environmental risk management, and ensures that the company's production and operation comply with relevant laws, regulations, and standards.

At the same time, based on the characteristics of the coating, ink, and adhesive industries and production practices, a sound environmental management system has been continuously established, and internal management systems such as the Environmental Protection, Occupational Health, and Safety Management Responsibility System, Rainwater Management System, Wastewater Management System, and Solid Waste Management System have been formulated to vigorously promote clean production.

In addition, the company has established an EHS management philosophy of "prevention first, full process, and strict governance", continuously strengthening environmental risk identification and control, and establishing an EHS department to coordinate environmental management, with dedicated personnel responsible for environmental management, supervising and guiding environmental protection work; Responsible for the specific implementation of energy conservation and emission reduction, three waste emissions, and environmental protection investment, ensuring the effective operation of the company's environmental management system and continuous improvement of environmental management.

　　(四)Measures and effects taken to reduce its carbon emissions during the reporting period

Specific instructions

The company attaches great importance to energy conservation and environmental protection, as well as its impact on the surrounding environment. It integrates the concept of energy conservation and emission reduction into its daily production and operation, strictly implements national and industry regulations in infrastructure construction, office waste and wastewater treatment, lighting, and park greening, creating a good, green, and healthy office environment.

In terms of air conditioning usage, in accordance with the requirements of the "Notice of the General Office of the State Council on Strictly Implementing the Temperature Control Standards for Air Conditioning in Public Buildings", the indoor air conditioning temperature in office areas such as offices and conference rooms should not be lower than 26 ℃ in summer and not higher than 20 ℃ in winter. The administrative center should uniformly set and centrally control the opening permissions of central air conditioning, reduce air conditioning usage, and effectively control electricity consumption and carbon emissions.

In on-site management, 6S management is implemented to improve the working environment, enhance employee work efficiency, enhance equipment lifespan, and reduce pollutant emissions.

In terms of green office, we advocate the concept of green office and promote the realization of paperless intelligent office by improving the OA system and conference system for online meetings. Develop administrative vehicle management measures, strengthen the management of fuel use and vehicle maintenance, and reduce exhaust emissions. Advocate for energy conservation and optimize lighting circuits. Advocate for paper recycling and double-sided printing. Advocate for water conservation and reduce the use of ink cartridges. Advocate employees to reduce smoking and live a healthy life. Advocate employees to actively take the commuting buses provided by Ningxiang Economic Development Zone for green, low-carbon, and civilized travel.

　　(五)New technologies, products, and services in carbon reduction

The company establishes information systems such as MES system, DCS system, ERP system, etc. through information integration, supporting PDA digital tools, to achieve stable information management of production process, quality data management, large screen management, equipment management, etc., and reduce resource waste. At the same time, a PLC flexible production mode has been established to achieve multi variety co production. The production process is equipped with automated feeding systems, fully automated packaging equipment, etc. to achieve the assembly line operation of product feeding, mixing, and packaging.

　　Social responsibility work

　　一、Types and contributions of public welfare and charitable activities

　　1.Specific situation of engaging in public welfare and charity activities

(1) In August 2022, the company participated in the poverty alleviation campaign of "Ten Thousand Enterprises Revitalizing Ten Thousand Villages" in Ningxiang City, donating 20000 yuan to a certain village for the improvement of its agricultural infrastructure.

(2) In August 2022, the company participated in the "Poverty Alleviation and Agricultural Assistance" campaign in Ningxiang City, purchasing agricultural products worth 16800 yuan and distributing them to employees. This not only helped farmers but also demonstrated employee care.

(3) Throughout 2022, the company's Love Mutual Aid Fund provided assistance to multiple employees and their families in need, with a total expenditure of 85400 yuan, effectively providing protection to address the concerns of employees.

　　二、Protection of shareholder and creditor rights and interests

1. Continuously improving the corporate governance structure to ensure that shareholders fully exercise their rights

The company strictly adheres to the requirements of laws and regulations such as the Company Law, Securities Law, and Guidelines for Corporate Governance of Listed Companies, as well as modern enterprise systems, and continuously improves the working systems of the shareholders' meeting, board of directors, supervisory board, and general manager, forming an effective corporate governance structure that balances the power, decision-making, supervisory, and management levels. The company continuously improves its management system, standardizes its operations, and has formulated various corporate governance systems, including the Rules of Procedure for Shareholders' Meetings, the Rules of Procedure for Board Meetings, and the Rules of Procedure for Supervisory Meetings. It has established mechanisms such as cumulative voting for the election of company directors and separate counting of votes for small and medium-sized investors. It has also stipulated the use of online voting to convene shareholder meetings for deliberation and voting on statutory matters, Fully ensuring the rights of shareholders, continuously improving the procedures and mechanisms for major company decisions, and strengthening internal controls.

2. Actively fulfilling information disclosure and building good investor relationships

The company strictly fulfills its information disclosure obligations in accordance with relevant laws and regulations, voluntarily fulfills its information disclosure obligations, and ensures the authenticity, accuracy, timeliness, completeness, and fairness of information disclosure. At the same time, the company has established an effective channel to communicate with investors. Through email, on-site research, teleconference, SSE e-interaction, Matsui Stock Investor Relations WeChat official account and other channels, the company's brand value and industrial value are comprehensively disseminated, and the company's strategic ideas, business management concepts, phased business development achievements, etc. are accurately delivered to the capital market within the scope of compliance.

3. Financial stability and standardization, excellent asset quality, avoiding operational and financial risks

The company's financial management system is sound, and the basic accounting work is standardized. The main assets have excellent quality, reasonable asset composition, and are in good use and turnover status; The company's finances are sound, and the provision for asset impairment is in line with the actual condition of asset quality, with sufficient and reasonable provisions; At the same time, the company's internal control system is sound, and the use of funds is safe and reasonable. The company operates with integrity and does not harm the legitimate rights and interests of creditors. The company has not had any outstanding bank loans over the years, and strictly fulfills its contractual obligations with suppliers, customers, etc. It has a high reputation.

While safeguarding the interests of shareholders, we also take into account the interests of creditors, strictly fulfill debts in accordance with the contracts signed with creditors, communicate effectively with creditors, maintain good communication and cooperation relationships, and reduce our own operational and financial risks.

4. Actively implementing cash dividend policies and valuing reasonable investment returns for shareholders

While striving to achieve rapid growth in enterprise scale and steady growth in economic benefits, the company implements a prudent profit distribution policy based on profitability and production and business development needs, combined with reasonable returns to investors, etc., so that shareholders not only receive stable and long-term investment returns, but also enjoy the sense of honor and social respect brought by the brand's excellence.

　　三、Protection of employee rights and interests

The company has established a human resource management philosophy of "inspiring people with dreams, uniting people with culture, and achieving people with platforms", always viewing talents as the source of enterprise development and the most precious wealth of the enterprise. To this end, in management, we adhere to taking human nature and human heart as the starting point and destination, respecting and adapting to the positive aspects of human nature, meeting the reasonable needs of employees in material, spiritual, psychological, and other aspects, creating a career platform suitable for talent growth, achieving the full potential and utilization of talents, and realizing the common growth of employees and enterprises, making employees and enterprises a community of shared interests.

The company strictly complies with laws and regulations such as the Labor Law and the Labor Contract Law, and protects the legitimate rights and interests of employees in accordance with the law. The company signs labor contracts with all employees who have established labor relations with the company, timely and fully pays various statutory social insurance and benefits, mainly including basic pension insurance, basic medical insurance, unemployment insurance, work-related injury insurance, maternity insurance, and housing provident fund. Except for statutory rights and interests, the company purchases group accident insurance for all employees and provides medical assistance for in-service employees in Changsha.

The company follows the principle of distribution according to work and equal pay for equal work, and allocates wages based on factors such as employee working conditions, labor achievements, and work responsibilities. Collective bargaining on wages is conducted with employees, and collective agreements on wages, collective contracts, and collective contracts for protecting the rights and interests of female employees are signed. Employee satisfaction surveys and health examinations are conducted annually. To enhance employee safety awareness and self-protection ability, the company regularly organizes occupational health and safety, environmental protection training and education for employees, continuously improves work safety conditions, and continuously enhances the company's safety management level.

In order to enrich the leisure life of employees, indoor badminton courts, cinemas, and gyms have been built. Seven employee activity associations have been established, including badminton, basketball, billiards, table tennis, fishing, fitness, and sprinting, and association activities are regularly held. To enhance the happiness of employees, the trade union committee regularly holds interesting activities such as 30 kilometer hiking activities, badminton competitions, Science and Technology Workers Day, corporate culture events, billiards competitions, fishing competitions, etc., creating a united, friendly, and harmonious team atmosphere.

The company focuses on employee career planning and creates multiple career development channels for employees. It has established ten career systems, including marketing, formula research and development, application technology research and development, color matching, production, warehousing, finance, and administrative management. All employees can choose their favorite and suitable career development channels based on their interests and personality traits. The company conducts an internal professional title review once a year, Provide development space for employees. In 2022, the company will continue to invite "external brain" to carry out the second phase of systematic construction of talent development, and organize training around the development of learning map courses and the training of cadres and key personnel. After multiple rounds of coaching and co creation, dozens of high-quality internal course materials have been successfully extracted, precipitated, and exported. The teaching methods and skills of cadres and core position personnel have been improved, and a practical and feasible internal talent training model has been explored, preparing for a better talent system construction in the next stage.

　　Employee shareholding situation

Note 1: The number/quantity of employee shareholding refers to the number/quantity of directors and executives directly held by the company as of the end of the reporting period, as well as the number/quantity of individuals who were initially and reserved for the restricted stock incentive plan in 2020, excluding the number/quantity of employees who purchased company stocks on their own in the secondary market.

Note 2: The denominator of the calculation formula for the proportion of employee shareholding to the total number of employees in the company is the total number of employees as of December 31, 2022.

4、 Protection of the rights and interests of suppliers, customers, and consumers

The company has always been based on integrity, established cooperative relationships with suppliers and customers based on the principles of equality and mutual benefit, strengthened cooperation, and achieved mutual benefit and win-win.

The company adheres to the business philosophy of "high-end leadership, quick response", always pays attention to and studies customers, and quickly meets various needs of customers by providing high-quality products and excellent services. With customer needs driving the implementation of the company's strategy, we help customers solve various problems, get close to customers, and win their trust. We truly become long-term partners of customers and achieve ourselves in achieving customer success.

The company upholds the concept of openness, transparency, and win-win cooperation with suppliers, and grows together with them. We have established and implemented a comprehensive procurement management system and supplier management system, with clear regulations on supplier selection, procurement process, inventory management, and strict supervision of implementation. In the selection of suppliers, in addition to focusing on the quality of the products and services provided by the suppliers, indicators such as business ethics, environmental impact, labor rights, occupational health and safety of the suppliers are included in the evaluation system. In terms of supplier management, sign a Product Quality Assurance Agreement with qualified suppliers, strictly control product quality and safety, and ensure that supplier products and various measures meet company requirements; Adhere to Sunshine Procurement, sign Integrity and Integrity Agreements with each supplier, establish various complaint and reporting channels such as telephone, public email, and fax, and prevent any illegal and irregular behavior such as bribery. In addition, the company strictly implements price control. For large and medium-sized projects with relatively high amounts, the procurement department opens the bidding system and collaborates with all departments to jointly evaluate prices.

　　五、Product safety assurance situation

Since its establishment, the company has regarded providing high-quality products and services to customers as its responsibility, taking product quality as the basic bottom line for survival, and adhering to the quality management concept of "source control, process monitoring, and continuous improvement" to guide quality management work.

At the source control, in accordance with the requirements of ISO9001/IATF16949/IEQC QC080000 and ISO14001 standards, we have established and passed ISO9001/IATF16949/IEQC QC080000 and ISO14001 certifications. Conduct comprehensive testing and characterization of the company's raw materials and products to ensure the stability of product quality. We have established a comprehensive internal quality management system, strictly controlling from different sources such as customer demand mining, project management, product design and development, supplier management, and production process management to prevent the occurrence of quality defects.

In terms of process monitoring, the company implements comprehensive quality management, requiring all employees to ensure product quality through work quality, and has established a comprehensive testing mechanism that combines self inspection, mutual inspection, and specialized inspection. We monitor the entire process from research and development, procurement, production, warehousing and logistics to customer samples and mass production, without overlooking any quality hazards and defects. Introducing advanced testing equipment from both domestic and international sources, possessing comprehensive testing capabilities, the laboratory operates strictly in accordance with CNAS requirements, and has successfully passed CNAS certification. Set up special inspection points in important and critical processes, use SPC tools to analyze the process inspection results, and ensure that every batch of products shipped to customers is qualified.

In terms of continuous improvement, we continuously identify problems in the construction and implementation of the quality management system through customer research, benchmarking with peers, internal audits, customer audits, third-party audits, and other methods, take timely corrective measures, and continuously improve quality.

In addition, in order to continuously improve the quality awareness of all employees, the company actively carries out quality culture construction activities internally, including the "Continuous Innovation" theme year activity (the activity content revolves around management innovation, "Three Small Innovations", QC improvement, etc.), and sets September as the company's quality month every year. The "Quality Activity Month" is held (the activity content includes record competition, quality knowledge competition, quality document training, etc.). Through the implementation of relevant quality activities, guide all staff to understand quality concepts, practice system documents, and continuously improve quality.

　　六、Other situations related to assuming social responsibility

The company has established the core values of advocating "Songmao Jingrun, Ruizhi Dacheng", requiring every Songjing person to "never forget the digger" and establish a spiritual character of well water nourishing all things. While adhering to legitimate business operations and solving employment problems, we also pay serious attention to people's livelihoods, actively participate in various social welfare activities, and actively promote excellent moral culture.

The company actively strengthens its connections with the government, industry associations, regulatory agencies, media, and other sectors of society, establishes good and smooth communication channels, actively accepts supervision and management, and continuously improves the transparency of the company's social responsibility performance. At the same time, the company actively participates in industry associations and standardization organization activities, making its own contributions to the improvement of industry technology level and common development of the industry.