Corporate Social Responsibility Report 2024

This report, in accordance with the principles of truthfulness, objectivity, comprehensiveness, and transparency, elaborates on 2024the work done and achievements made by the company in fulfilling its social responsibilities during its production and operation process. The data disclosed in the report relating to the company's operations is up to 2024Year December31Day. Due to the long-term and sustainable nature of corporate social responsibility, the relevant content descriptions include a certain degree of retrospection in time. This company andManager's Office Meetingall members guarantee that the data disclosed in this report is true and accurate, and that the facts stated are objective and fair.

• Company Profile

Shandong Daon Svit Technology Co., Ltd., located in Daon Economic Park Industrial Park, North of Zhenxing Road, Longgang Street, Longkou City, Yantai City, Shandong Province, was established onAugust 2016, is a technology-innovation-oriented enterprise focusing on equipment research and development and production, two-component non-woven fabric production, and raw material supply in the fields of hygiene, medical care, filtration, and industrial non-woven fabrics. The company's predecessor was Shandong Svit New Materials Technology Co., Ltd., which was acquired by Longkou Daon Group in July 2020, and the company was renamed Shandong Daon Svit Technology Co., Ltd. in September.

The company specializes in the research and development and production of modified materials for non-wovens, high-end non-woven equipment, and differentiated non-woven products.At the end of 2016, it began producing soft masterbatches for hygiene and medical non-woven fabrics. Through continuous research and development upgrades, it has formed four major series: fluffy cotton soft, silky smooth, low-smoke environmentally friendly, and SMS soft-use. The products are supplied to non-woven well-known enterprises worldwide and domestically.

With the spirit of unity, struggle, and pursuit of excellence, and the development concept of product-rooted, people-oriented, technology-leading, and customer-first, the company actively responds to the national sustainable development strategy, integrates the unique material modification advantages of the Daon platform, focuses on the circular economy, explores the research and development in the field of biodegradable non-woven fabrics, comprehensively upgrades and enriches the product chain, and creates a“one-stop purchasing” new experience for customers, providing the global market with products and services that are “healthier, greener, and more convenient,” and leading new trends in industry development.

• Ensuring Product Quality and Fulfilling Social Responsibilities

The company has always adhered tothe business management philosophy of "guaranteeing product quality, occupying the market as the fundamental, and taking strict management and increasing economic benefits as the center", and based on quality, environmental, and occupational health management systems, implements the "Excellent Performance Evaluation Criteria", and according to the requirements of the "Excellent Performance Evaluation Criteria Implementation Guidelines", further standardizes the company's business management to make it more systematic, standardized, and scientific. The company has established venues, instruments, and equipment that are suitable for the company's raw material procurement, production, inspection, and warehousing requirements. The production environment in the company's factory area is clean, and the layout of the production, administrative, and other areas is reasonable.

Problems encountered during operation are addressed by using quality tools such as Pareto charts and fishbone diagrams to identify the root causes of the problems, and developing practical countermeasures and implementing solutions; the effectiveness of the solutions is evaluated, systems are established, and recurrence of problems is prevented. For outstanding issues,PDCA cycle mode and 8D methods are used to solve problems, improve the company's quality, pursue excellence, and continuously improve the company's management level.

The company strengthens management in multiple aspects, from the examination of suppliers’ quality systems and raw material procurement, raw material inspection upon entry to the inspection of semi-finished products, product design, production manufacturing process design, key process control, product storage, sales, after-sales service, consumer return visits, and customer satisfaction surveys, to form a relatively perfect quality assurance system, ensuring that customers are provided with reliable products.

The company uses comprehensive quality management methods in its production process, usingPDCA cycles to continuously improve and achieve customer satisfaction.Continuously strengthen the optimization of the entire process to ensure the orderly operation of product quality, environmental, and occupational health and safety systems.

• Strengthening Enterprise Internal Control and Preventing Business Risks

The company's governance is standardized, with a complete organizational chart. The shareholders' meeting, board of directors, supervisory board, and senior management team are each responsible for their respective duties, implementing a general manager responsibility system. Functional departments such as the production department, R&D department, supply department, and finance department are established according to the company's management needs.

The company strictly abides by all relevant laws, regulations, social ethics, business ethics, and industry rules, and actively promotes a culture of integrity,upholdingbusiness credit and building a creditworthy enterprise. Continuously improve the company's corporate governance structure, improve operational management level, strengthen information disclosure responsibility awareness, establish and improve internal control systems, and continuously improve the company's governance capabilities. The company adheres to collective decision-making, cautious decision-making, and scientific decision-making based on sufficient research and demonstration, effectively reducing investment costs and risks, and improving the scientific and effective nature of business activities.

Strengthening financial management, improving capital utilization efficiency, and reducing financial costs, the long-term credit rating of the enterpriseAAlevel. The internal control systems such as contract management methods have been continuously improved, the financial system information platform has been improved, procurement management has been standardized, and quality, progress, and bank credit rating have been used as evaluation criteria to strengthen the construction of the supplier system and build a creditworthy supply chain.。The company adheres to the principle of honest tax payment and consciously fulfills its obligation to pay taxes in accordance with the law, strengthens communication and coordination with the tax authorities, truthfully issues invoices and pays various taxes in accordance with the law, and there are no cases of underreporting or underpayment of taxes or delaying tax payment.，Focusing on improving the level of product After-sale Service.

• Using technological management innovation cycleseconomicdevelopment

The company attaches importance to technological innovation and increases investment in and protection of intellectual property rights, with a total of national patents23, including 16 utility models and 7 invention patents.

Actively responding to provincial, municipal, and county-level innovation policies, adhering to the concept of safety first and green development, scientifically formulating plans, and meticulously organizing implementation to achieve efficient allocation and utilization of production resources such as gas, electricity, and water.

The company has a first-class management and technical team, has established and improved an internal quality management system and sales network, and has advanced production and testing equipment at home and abroad. It has highly qualified professional scientific research personnel20people, accounting for18% of the company's total number of employees。

Continuously improve the management level of safety, quality, and environmental protection to ensure the continuous provision of satisfactory products to customers, ensure that the company's environmental emissions comply with national and local laws and regulations, and ensure the physical and mental health and safety of employees.

• Strengthen coordination and communication mechanisms，Enhance internal competitiveness.

The company's leadership attaches great importance to two-way communication with employees, customers, suppliers, and partners. On the one hand, through daily meetings, internal and external websites, pre-shift meetings, supplier seminars, visits and condolences, etc., customers, suppliers, strategic partners and all employees understand the company's core values, its position in market competition, the challenges and development direction it faces, and the responsibilities they should bear. On the other hand, it insists on collecting opinions and suggestions on the difficulties and hot issues related to the company's development through factory affairs disclosure and employee suggestion boxes. Through this, information is transmitted with employees, customers and partners, exchanges are promoted, and the recognition of the company's values by customers and partners is improved, transforming the company's value pursuit into the conscious actions of employees and ensuring the achievement of organizational goals.

VI. Energy conservation and emission reduction, reducing carbon emissions.

Taking energy efficiency improvement as the top priority for meeting the growth of energy consumption, significantly improving the energy utilization efficiency of key industries and the energy efficiency level of key products, and promoting the low-carbonization, intelligence, and systematization of energy use. Establish an energy conservation and emission reduction assessment mechanism, which mainly includes two indicators: energy conservation and emission reduction targets and energy conservation and emission reduction measures.

VII. Green Supplier Management

Establish a green procurement concept, integrate the green procurement concept into the business strategy, cover the entire process of raw material, product and service procurement, continuously improve and improve procurement standards and systems, and promote suppliers to continuously improve their environmental management levels, jointly building a green supply chain.

Formulate and implement specific and feasible green procurement plans, and adjust and improve them in a timely manner.

Require suppliers to adopt more eco-design technologies in the product design process to reduce environmental pollution and energy resource consumption, so that products and components can be recycled and reused.

Put forward environmental protection requirements in the standards for purchasing raw materials, products and services, reflect the concept of green environmental protection, and strictly carry out procurement according to procurement standards.

Establish a product traceability system and establish full-process tracking management of purchased products from raw materials to delivery. Improve the procurement process, actively participate in the product research and development and manufacturing process of suppliers, and guide suppliers to reduce the amount of various raw materials and packaging materials through value analysis, replace them with more environmentally friendly materials, avoid or reduce environmental pollution, etc.

2024The number of suppliers that the company includes for cooperationis24companiesEstablish asupplier management and control procedure. Based on the supplier management system framework, the company establishes a supplier classification management system, and dynamically adjusts the classification every year based on multiple factors such as supplier business qualifications, product quality, supply quantity, technical capabilities, management system, and sustainable management system.