The Board of Directors and all directors of this company hereby certify that the contents of this announcement contain no false records, misleading statements, or material omissions, and they individually and jointly assume responsibility for the truthfulness, accuracy, and completeness of such contents.

Important Notice:

　　1. This report marks the first time that Tianjin Xinlihua Pigment Co., Ltd. (hereinafter referred to as the “Company”) has publicly released a corporate social responsibility report.

　　2. The time period covered by this report is January 1, 2020, to December 31, 2020, and the organizational scope of the report is the company.

　　3. This report endeavors to provide a comprehensive disclosure of the Company’s social responsibility performance for the year 2020, thereby further strengthening communication and engagement with all stakeholders and fostering the Company’s enhanced fulfillment of its social responsibilities and sustainable, harmonious development.

　　4. This report has been reviewed and approved at the Company’s Management Meeting held in January 2021.

　　5. For matters not covered in this report, we welcome valuable comments and suggestions from all sectors of society.

I. Company Overview

　　Tianjin Xinlihua Pigment Co., Ltd. was established in 1984 and is a leading global supplier of specialty industrial coatings, including mirror‑back coatings, electrophoretic coatings, and coil coatings. The company currently operates two manufacturing facilities: the Xiqing Plant and the Binhai Plant. The Xiqing Plant is located in the Xiqing District Economic Development Zone of Tianjin, covering an area of 40,000 m² with a total floor space of 24,000 m². It features automated batching lines for monomers and additives, as well as automated production lines for electrophoretic coatings, coil coatings, synthetic resins, and mirror‑back coatings, and is proficient in advanced production management systems such as SAP, ERP, and DCS. The Binhai Plant is situated in the Nangang Industrial Park of the Binhai New Area, a national‑level chemical industrial park. Phase I spans 70,000 m² with a built‑up area of 42,000 m², boasting a designed capacity of 100,000 tons. Designed with cutting‑edge concepts, it incorporates several highly intelligent production lines, supported by MES, SIS, DCS, and SAP management systems, and is managed by a team with extensive experience from multinational corporations, aiming to deliver products that offer enhanced quality stability and superior cost‑effectiveness.

　　Xinlihua places great emphasis on research and development. In addition to maintaining a highly qualified R&D team comprising 30% of its workforce, the company collaborates with numerous universities—including Beijing University of Chemical Technology, Tianjin University, Tianjin University of Science and Technology, Zhejiang Sci‑Tech University, Shanghai Jiao Tong University, and the University of Nottingham—in industry–university–research partnerships. Xinlihua holds 117 authorized patents, including 19 invention patents and 98 utility‑model patents. The company has made substantial investments in cutting‑edge R&D and testing equipment, such as gas chromatographs, laser particle size analyzers, UV spectrophotometers, salt‑spray chambers, QUV weathering testers, condensation test chambers, surface roughness meters, and wear‑resistance testers—totaling over ten million yuan in R&D assets. Furthermore, it equips its field service teams with a range of specialized instruments, including colorimeters, furnace temperature monitors, pH meters, and conductivity meters, to ensure the reliability of its services.

　　It is precisely due to its substantial R&D investment, the continuous development of innovative, customer‑specific product applications, and the delivery of groundbreaking new technologies and processes that Xinlihua has earned widespread recognition and acclaim across the electrophoresis, coil coating, and mirror‑backing sectors. Meanwhile, its extensive customer base provides invaluable technical data and on‑site expertise, further enhancing the efficiency and outcomes of its R&D efforts.

　　The company upholds a commitment to sustainable safety and environmental protection, focusing not only on green, environmentally friendly, and safe production processes but also on developing eco‑friendly coating products. At its Xiqing plant, the company has invested over RMB 10 million in environmental initiatives, installing four RCO (Regenerative Catalytic Oxidation) VOCs treatment systems and transitioning entirely to natural gas for heating. With a strong emphasis on safety management, the facility has achieved Level 3 compliance with Tianjin’s safety standardization framework and implements a comprehensive, enterprise‑wide safety management training program.

　　In addition, we are accelerating the development and commercialization of new green‑friendly products to strengthen the sustainability of our corporate growth. In recent years, we have launched waterborne back‑coatings for mirrors, waterborne coil coatings, UV‑curable back‑coatings for mirrors, ultra‑low‑temperature, lead‑free, environmentally friendly electrophoretic coatings (energy‑saving and eco‑friendly), non‑settling electrophoretic coatings (which help customers reduce energy consumption in their recirculation systems), high‑edge electrophoretic coatings (which minimize material waste), waterborne coil coatings, waterborne aluminum coil coatings, fluorocarbon coil coatings, and specialty coil coatings (such as those for livestock panels, antibacterial panels, and self‑cleaning panels), all of which have earned widespread acclaim from both customers and the broader community. From scratch to excellence, and from good to great—thanks to substantial R&D investment and relentless management improvements—our research achievements are continuously translated into a wealth of patents and cutting‑edge technologies, while maintaining our sustained competitive edge. This has kept Xinlihua and our customers at the forefront of the industry—not only by reducing production costs, but also by delivering high‑quality products. Since 2015, according to evaluations by the China Mirror Industry Association, Xinlihua’s mirror back‑coatings have consistently held over 80% of the Chinese market share. In 2015, the company decided to expand into overseas markets; through persistent efforts, by 2019, Xinlihua was already supplying products and services to more than 40 countries and regions worldwide, and had established strategic partnerships with top‑ten global clients in the glass industry, earning its well‑deserved reputation as an “invisible champion.”

　　Since 2017, the company has established a strategic partnership with a Huawei‑affiliated consulting firm based in Shenzhen, comprehensively adopting Huawei’s corporate philosophy and human resources management practices. By increasing investment in R&D and management, the company is firmly committed to realizing its corporate vision of becoming a global leader in mirror‑back coatings and its long-term aspiration of emerging as a leading brand in specialty industrial coatings. While strengthening its human resources management system, the company has also implemented the IATF 16949:2016 quality management system and engaged a renowned industry‑leading consultancy to provide ongoing professional management advisory services, ensuring efficient and reliable products and services for its customers. Concurrently, the company has introduced systems for intellectual property management and EHS management, creating a safe, healthy, and environmentally responsible specialized chemical manufacturing facility that prioritizes the well‑being of employees and the broader community.

　　Xinlihua maintains sound operations and a strong financial position, with an asset-to-liability ratio consistently below 15%. Its robust cash flow not only sustains vigorous operating performance but also underpins its ability to absorb risks.

II. Xinlihua’s Corporate Social Responsibility Framework

　　(1) Status of Protection of Management Personnel’s Rights and Interests

　　1. Regarding Management Meetings: In 2020, a total of 12 management and operational meetings were held. The company’s management team, including managers, attended both production‑operation meetings and safety‑management meetings with a conscientious and responsible attitude, faithfully and diligently exercising their rights and fulfilling their duties as managers. They rigorously performed the responsibilities prescribed by applicable laws, regulations, and the company’s articles of association, treated all managers fairly, and paid due attention to the interests of other stakeholders. As a result, when making major corporate decisions, the company consistently adhered to its articles of association and relevant laws and regulations, acted in the best interests of the company, and ensured that all resolutions were effectively implemented.

　　2. Regarding Stakeholders: The company fully respects and safeguards the legitimate rights and interests of its creditor banks and other creditors, employees, customers, and other stakeholders, and collaborates with them in a spirit of mutual benefit to achieve shared development. The company also pays close attention to public welfare initiatives and environmental protection in the regions where it operates, actively responds to national calls, continuously increases its investment in environmental governance, and fulfills its corporate social responsibilities.

　　(II) Protection of Employees’ Rights and Interests

　　1. Safeguard the legitimate rights and interests of employees.

　　The company serves its employees with sincerity and fairness, while upholding laws and internal regulations. It strictly complies with the Labor Law, the Labor Contract Law, and other relevant statutes, entering into labor contracts with employees on the basis of equality, voluntariness, and mutual agreement, thereby safeguarding their legitimate rights and interests. In accordance with the law, the company implements the Regulations on Paid Leave for Employees, promptly arranges social insurance coverage—including medical, pension, unemployment, work‑injury, and maternity benefits—and enrolls employees in the housing provident fund, thus providing a healthy and safe working and living environment. In 2020, the company proactively revised its policies to establish new standards for sick and personal leave benefits, increased the basic living allowance for employees on extended sick leave, and introduced a mid‑shift meal allowance, raising the subsidy for employee meals to reflect the company’s people‑oriented approach. At the same time, the company ensured timely contributions to the “five insurances and one fund,” processed maternity insurance payouts, and disbursed holiday bonuses, summer‑heat allowances, and other welfare benefits. Total disbursements for holiday bonuses, summer‑heat allowances, and other perks exceeded RMB 300,000. These comprehensive welfare provisions were effectively delivered, protecting employees’ legitimate rights and alleviating their concerns.

　　2. Ensure the occupational safety of employees.

　　In 2020, the company continued to refine its safety production management system, using the occupational health and safety management system as a key leverage point. It established annual objectives and performance indicators, developed comprehensive safety management plans, organized the signing of annual safety production responsibility agreements, and achieved full coverage of the safety production accountability system. The company also revised its safety production management regulations and emergency response plans, as well as workshop- and section-level safe operating procedures and safety protocols for hazardous operations. Regular statutory safety inspections were conducted promptly, with timely completion of inspections for special equipment and safety accessories, lightning protection systems, and personal protective equipment. Periodic safety assessments were carried out for special equipment, radioactive sources, and major hazard sources. The company maintained routine safety inspections, monthly and holiday‑specific comprehensive safety checks, and on-site safety supervision and hazard identification during major equipment overhauls and technological upgrade projects, while rigorously approving and overseeing high‑risk operations. Furthermore, it actively promoted safety awareness through education, training, and outreach, encouraging broad employee participation in identifying and addressing potential safety hazards, thereby continuously strengthening employees’ safety consciousness, enhancing their safety competence, and effectively preventing and mitigating the occurrence of accidents.

　　3. Show concern for and provide assistance to employees in need.

　　The company, leveraging its trade union as a platform, consistently engages at the grassroots level and proactively assumes the roles of “first point of contact” and “first source of assistance.” It has established comprehensive information files for employees facing hardship, regularly organizes “warmth‑sending” initiatives, provides financial aid to those in extreme poverty, and promptly extends condolences and support to employees who fall ill, experience the death of a family member, or suffer work‑related injuries. In 2020 alone, the company conducted over one hundred visits and offered condolences to employees affected by work‑related injuries, hospitalization due to illness, extended sick leave, model workers, employees in severe financial need, and cases involving the passing of family members, disbursing nearly RMB 400,000 in birthday gifts and condolence payments. The union also promptly administers employee medical mutual‑aid programs and specialized insurance for female employees, assisting those who are ill with claim processing and reimbursement procedures; a total of 390 employees participated in the medical mutual‑aid scheme. Additionally, the company organized comprehensive health checkups for all staff, ensuring their physical well‑being and further enhancing employee welfare benefits.

　　4. Enhancement of employees’ competence and skill levels.

　　The company places great emphasis on enhancing employees’ professional skills and business acumen. In 2020, the company organized more than 80 training programs at the corporate level, effectively strengthening operational‑skill training for frontline production roles and bolstering the self‑directed training capabilities of functional departments, thereby elevating the overall quality and effectiveness of the company’s training initiatives. At the same time, the company actively conducts various labor competitions and job‑specific skill contests, using these events to drive training and foster team building, thus laying a solid foundation for sustained energy conservation, consumption reduction, and improved production‑line efficiency. Additionally, the company has compiled and distributed a “Safety Manual,” launched an award‑winning knowledge‑quiz campaign based on the manual, and initiated a company‑wide “Promoting the Xinlihua Spirit” discussion series. Through analyzing the current situation, identifying potential hazards, communicating the company’s guiding principles, and articulating its vision, the company has built a shared understanding, reinforced employees’ sense of responsibility and mission, and motivated them to take greater initiative and enthusiasm in their work.

　　(3) Protection of the Rights and Interests of Suppliers, Customers, and Consumers

　　The company places great emphasis on safeguarding the rights and interests of its suppliers, customers, and consumers. While ensuring sound business operations and production, it carefully considers the diverse needs of all stakeholders, regards the protection of their rights and interests as its own responsibility, and strives to translate this commitment into concrete actions.

　　1. Pay close attention to customer needs and feedback, and provide high-quality service.

　　The company remains committed to meeting customer needs and delivering safe, high‑quality products, continuously enhancing the quality of its pre‑sale, in‑sale, and after‑sale services to elevate customer experience and satisfaction. It fosters effective communication with customers and nurtures strong customer relationships. While striving to improve product quality and create value for customers, the company strengthens its dealer and sales teams, expands market reach, establishes new distribution outlets, purifies distribution channels, stabilizes pricing, and ensures robust in‑store merchandising and operational control, thereby providing customers with convenient purchasing options and a superior shopping experience. At the same time, the company has integrated after‑sales service functions into its quality management department, actively gathering customer feedback, maintaining detailed records, and leveraging expert knowledge to swiftly identify and address complaints. It conducts thorough explanations and negotiations, systematically categorizes and organizes quality complaints and service suggestions, and holds daily “Rapid Response Meetings” to ensure timely resolution and implementation by relevant departments, further bolstering customer trust and satisfaction. By alleviating customers’ concerns, the company demonstrates its commitment to integrity and corporate responsibility. In addition, the company continually refines its customer satisfaction evaluation system, conducting surveys that cover all aspects—including products, quality, pricing, sales, and customer relationship management. Through comprehensive assessments, it identifies both strengths and areas for improvement across product quality, new‑product development, pricing, sales processes, and customer‑relationship management, thereby steadily elevating its overall customer service standards.

　　3. Strengthen qualification review and oversight, and establish mutually beneficial, win-win partnerships with suppliers.

　　In 2020, the company strengthened its review of the qualifications of key suppliers involved in production licensing and conducted rigorous scrutiny of label markings for major raw and auxiliary materials. It also required suppliers to undergo third-party conformity assessments against the newly issued national safety standards for hazardous chemicals, ensuring compliance with applicable laws, regulations, and the latest standards. At the same time, the company moved quality control of incoming materials and related coordination processes upstream, urging suppliers to continuously enhance their quality assurance capabilities while leveraging their resources to reduce procurement and management costs. For instance, quality control for bulk external packaging such as cardboard boxes was shifted to the supplier level; in accordance with the general review guidelines for hazardous chemical production licenses, on-site evaluations were conducted for key suppliers, corrective action items were identified, and follow-up verification was performed to help suppliers refine their production management processes and effectively strengthen their quality assurance systems. Furthermore, the company continued to optimize its ERP procurement system, achieving end-to-end digital management of all purchased materials—from requisition approval and procurement receipt to material issuance—while collaborating closely with suppliers to accelerate barcode‑based inventory recording, thereby enhancing material oversight and reducing capital tied up in inventory. Upholding its commitments, the company rigorously fulfilled contractual obligations, safeguarded the legitimate rights and interests of its suppliers, and established long-term, stable, mutually beneficial strategic partnerships based on integrity. Throughout the year, all procured materials were accompanied by third-party test reports issued by nationally recognized authorities, meeting relevant national quality standards; no batch‑level quality issues occurred, nor were there any adverse impacts on the environment or occupational health.

　　4. Strengthen internal control and integrity training to mitigate corporate operational risks.

　　In 2019, the company revised its Articles of Association and other internal regulations, further enhancing its corporate governance framework and internal control system. It conducted internal control assessments, leveraging self‑inspections and corrective actions to verify the compliance, relevance, and effectiveness of its policies and processes, thereby achieving continuous optimization and improvement. The company rigorously enforced its Anti‑Fraud Management System and Risk Management System, adhering to the principles of strictness, meticulousness, and stringency to strengthen oversight and review of key areas such as financial processes, procurement activities, engineering projects, and investment management, thus ensuring robust risk management. Additionally, the company intensified legal and regulatory awareness‑raising and training for all employees, and during National Constitution Day on December 4, it organized a series of activities to study the spirit of the 19th National Congress and promote legal education, fostering a corporate culture that upholds the law, respects legal norms, and embodies integrity and self‑discipline.

III. Social Responsibility and Public Relations

　　(1) Environmental Protection and Sustainable Development

　　The company has consistently regarded building a resource‑efficient, environmentally friendly enterprise and achieving harmonious development between energy use and the environment as key corporate social responsibilities. It steadfastly prioritizes environmental protection and the promotion of energy conservation and emissions reduction, and remains committed to pursuing a path of sustainable development.

　　1. Energy conservation and consumption reduction management.

　　The company has a well‑structured energy management framework, with an Energy‑Saving Leadership Group chaired by the General Manager that conducts dedicated research and deploys energy‑saving initiatives. An Energy‑Saving Office serves as the day‑to‑day administrative body, responsible for routine energy‑management tasks, clearly defining responsibilities, and establishing comprehensive rules and regulations. These policies are rigorously implemented at the workshop, section, team, and individual levels. In 2020, the company introduced a comprehensive management strategy—“reduce inventory, streamline product lines, and lower costs”—and continued to enforce performance‑based economic accountability, production‑management assessments, and consumption‑quota management. Particular emphasis was placed on tackling underperforming indicators through targeted efforts, using evaluation to drive better management and leveraging management to cut consumption. At the same time, the company strengthened coordination across all production stages, enhanced performance metrics for production line efficiency, reinforced the circular‑economy mindset, and promoted the recovery and reuse of energy resources, thereby continuously improving energy‑use efficiency. Through a multi‑pronged approach—including process optimization, project‑driven problem‑solving, equipment upgrades, technological innovation, and the standardization and refinement of operational procedures—employee enthusiasm for innovation has been greatly stimulated. Many energy‑saving measures, methods, and technical upgrade proposals have been independently proposed by staff and successfully put into practice, ensuring steady progress in energy conservation and consumption reduction with tangible results.

　　2. Environmental Protection Management.

　　The company boasts comprehensive environmental management infrastructure and systems. Under the direct oversight of the Deputy General Manager in charge of production, it has formulated its environmental protection policy, objectives, performance indicators, and management plans in accordance with ISO 14001 standards, ensuring effective control of all environmental factors. The company employs dedicated environmental personnel, has developed a series of operation manuals covering all environmental‑related roles, and established emergency response plans for sudden environmental incidents, including biogas recovery and utilization from wastewater equalization tanks, burner failure contingencies, and severe air pollution emergencies. Additionally, the company is equipped with backup units, equalization tanks, and homogenization tanks, enabling it to effectively prevent and address unexpected pollution events.

　　3. Emergency Protection Management.

　　In 2017, the company continued to fully implement the principle of “safety first, prevention foremost, and comprehensive management,” further enhancing its emergency preparedness and response systems. The company re‑identified unacceptable hazards, significant environmental factors, and key applicable laws and regulations, and revised a series of internal rules and procedures, including the Production Safety Management System, the Emergency Response Plan for Production Safety Accidents, the Emergency Preparedness and Response Procedure, and the Emergency Response Plan for Sudden Environmental Incidents. Thorough safety and environmental inspections were conducted, and company‑wide hazard identification and remediation activities were maintained on an ongoing basis, ensuring the timely elimination of potential accident and incident risks. For a wide range of possible emergencies, the company developed corresponding contingency plans and response measures, and organized regular drills to prevent and mitigate adverse consequences, thereby strengthening its capacity to handle abnormal situations. The company also carried out fire‑fighting and typhoon‑response emergency drills. Prior to each drill, employees received comprehensive training, and following the exercise, a summary and evaluation were conducted to assess the operational effectiveness of the company’s emergency plans. These efforts comprehensively reinforced employees’ capabilities in responding to production safety incidents and unexpected emergencies, heightened their awareness of safety and environmental protection, helped prevent accidents, and further improved the company’s overall level of emergency preparedness and response management.

　　4. Greening of the factory premises.

　　In 2019, the company invested substantial human and material resources to green, beautify, and purify the factory premises. It undertook a comprehensive redesign of the landscaping, planting tree species that are highly resistant to pollution, vigorous in growth, and visually striking, including locust trees, apple trees, and peach trees. The company also renovated rockeries, flower beds, lawns, and other landscape features, enhancing the dust‑blocking, sound‑absorbing, and temperature‑regulating benefits of the greenery. Additionally, it reconfigured the internal road network to improve traffic flow and ensure greater safety throughout the facility. Furthermore, the company launched Party‑branch–led initiatives to create an artistic and garden‑like environment, among other efforts.

　　(II) Public Relations and Social Welfare Initiatives

　　1. Supporting Social Welfare Activities

　　The company has consistently adhered to the business philosophy of “giving back to the company and to society,” and for many years has enthusiastically participated in and vigorously supported local cultural and sports initiatives as well as environmental conservation efforts. By leveraging new media channels such as WeChat and Moments, it has effectively broadened its outreach, achieving positive public response and strong communication results.

　　2. “Industry–University–Research Collaboration” and the Cultivation of Successor Talent for the Textile Industry

　　As a pillar enterprise of the local economy and an industrial leader, the company firmly assumes its social responsibilities. While ensuring orderly production and product quality and safety, it provides care and support to the next generation of talent in the chemical and polymer industries. Each year, undergraduate and graduate students from various institutions undertake internships at Changyuan, gaining hands-on experience with the framework of modern industrial systems and deepening their understanding of the process flows in the hazardous chemicals sector.

IV. Outlook for 2020

　　In 2020, the company will continue to enhance its corporate social responsibility management system, fully fulfilling its social responsibilities in areas such as protecting the rights and interests of stakeholders—including management, employees, and consumers—safeguarding the environment, and advancing social welfare. The company will uphold social norms and business ethics, accept public oversight, actively engage in social公益 initiatives, and contribute to building a harmonious society.

　　Tianjin Xinlihua Pigment Co., Ltd.

　　January 24, 2021