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1、 Hilong Holding Limited*(Incorporated in the Cayman Islands with limited liability)Stock code:1623 *For identification purpose only 2024 Environmental,Social and Governance Report Contents About the Report.1 Reporting Scope.1 Reporting Principles.1 Reference.1 Report Availability.1 Contact Informati
2、on.1 About Hilong:Cultivation Leading to Expansion.2 1.ESG Governance.4 1.1 ESG Management Structure.4 1.2 Statement of the Board.5 1.3 Stakeholders Engagement.5 1.4 ESG Materiality Assessment.6 2.Responsible Operation.7 2.1 Promoting Technological Innovation.7 2.2 Pursuing Excellent Quality.10 2.3
3、Protecting Intellectual Property Rights.14 2.4 Strengthening Supply Chain.16 2.5 Adhering to Business Ethics.20 2.6 Sincerely Giving Back to the Society.22 3.Care for Employees.23 3.1 Diversity,Equality and Inclusiveness.23 3.2 Facilitating Talent Development.24 3.3 Optimizing Compensation and Benef
4、its.29 3.4 Safeguarding Safety and Health.33 4.Green Operation for Better Ecosystem.39 4.1 Green Product Research and Development.40 4.2 Efficient Utilization of Resources.40 4.3 Implementation of Emission Management.43 4.4 Climate Change Response.47 Appendix I:ESG Reporting Guidance Index.50 Append
5、ix II:Readers Feedback Form.53 1 About the Report Hilong Holding Limited(the Company)(Stock Code:1623)hereby presents the Environmental,Social and Governance Report 2024(the Report)of the Company and its subsidiaries(collectively,the Group,Hilong or We).The Report demonstrates the concepts and pract
6、ices of the Group in Environmental,Social and Governance(ESG)areas to its stakeholders.Reporting Scope The Report primarily includes the Company and its subsidiaries.The reporting period is from January 1,2024 to December 31,2024(the Reporting Period).The Key Performance Indicators(KPIs)in environme
7、ntal areas and social areas disclosed in the Report cover all businesses in China directly managed by the Group,including Shanghai Hilong Drill Pipe Co.,Ltd.(Shanghai Drill Pipe)and Hilong Petroleum Drill Pipe(Wuxi)Co.,Ltd.(Wuxi Hilong).Hilong Pipeline Engineering Technology Service Co.,Ltd.,(Hilong
8、 Pipeline)and its subsidiaries were officially disposed on November 28,2023,and therefore are not included within the scope of this report.Reporting Principles The Report is prepared according to the Environmental,Social and Governance Reporting Guide(the ESG Reporting Guide)in Appendix C2 to the Ru
9、les Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.The Report complies with reporting principles below:Materiality:The Group identifies and determines material ESG issues through stakeholder engagement and materiality assessment which have been disclosed in the Report
10、.Quantitative:The standards,methods and sources of emission factors used in reporting emissions and energy consumption have been disclosed.Balance:The Report provides an unbiased picture of the Groups environmental and social performance.Consistency:The methodology and KPIs are consistent with previ
11、ous years.Reference In this report,the Groups subsidiary Shanghai Hilong Drill Pipe Co.,Ltd.is referred to as Shanghai Drill Pipe and Hilong Petroleum Drill Pipe(Wuxi)Co.,Ltd.is referred to as Wuxi Hilong.Report Availability The report is available in electronic version which can be viewed on the we
12、bsite of the Company()and the HKEX news website(www.hkexnews.hk).Contact Information Hilong Holding Limited Headquarters:No.1825,Luodong Road,Baoshan Industrial Zone,Shanghai,PRC Postcode:200949 Tel:+8621-33851886 Fax:+8621-33851886 Principal Place of Business in Hong Kong Address:Room 1910,19/F,Lee
13、 Garden One,33 Hysan Avenue,Causeway Bay,Hong Kong Postcode:999077 Tel:+852-29801383 Fax:+852-22627729 2 About Hilong:Cultivation Leading to Expansion Hilong Group of Companies(Hilong Holding Limited(01623.HK),has been listed on the HKEX since 2011.The Group,as a large listed entity,is a manufacture
14、r of high-end oilfield equipment and a provider of comprehensive oilfield technical service.Established in 2002 and headquartered in Shanghai,the Group has established production bases and business branches in more than 40 countries and regions around the world as at the end of the Reporting Period.
15、Hilong integrates scientific research,production and service,and continues to provide high-quality,high-tech and differentiated products and integrated services.Since our establishment,Hilong has undertaken horizontal development in drilling,exploitation,and transportation of oil and natural gas,as
16、well as vertical development via industrial chains.The Group has established three core businesses:oil equipment,oil service and offshore engineering.With our three major businesses operating in synergy,we continue to innovate and have had a unique industrial chain and industrial advantages,providin
17、g high-end products and comprehensive services for internationally famous energy and oil service enterprises.Oil Equipment Oil Service Offshore Engineering Drilling Tools Integrated Technology Service&Turnkey Services Engineering Technology Center Others Integrated Oilfield Development Service Offsh
18、ore Installation Center Environment Protection of Oilfield Engineering Construction Center Automatic Drilling Intelligent Control Technology Center Investment&Cooperation Information Technology Services After years of cultivation,the Group has established a complete sales and service network around
19、the world.In China,the Group has established a long-term and strong strategic partnership with leading oil companies such as China National Petroleum Corporation(CNPC),China Petrochemical Corporation(SINOPEC),and China National Offshore Oil Corporation(CNOOC),etc.In terms of the international market
20、,we provide high-end products and comprehensive services for internationally famous energy and oil service enterprises,such as Royal Dutch Shell,British Petroleum Corporation,Schlumberger,Weatherford,ConocoPhillips,Petro Ecuador,etc.As at the end of the Reporting Period,the Groups products and servi
21、ces have been sold to China,Southeast Asia,South Asia,Central Asia,the Middle East,Africa,North America,South America,and other countries and regions.Based on the transformation strategy of Becoming a World-leading Integrated Oil Equipment and Services Provider,the Group has developed a medium-to-lo
22、ng-term digital transformation plan orientated towards technological innovation,the new model of Product+Service,efficient business management,lean manufacturing operations and data-driven decision-making.The purpose is to enhance Hilongs core business capability and improve its management efficienc
23、y,thus fueling long-term,high-quality development and forming a sustainable enterprise with full perception,full connectivity,full scene and full intelligence.3 Domestic market map of Hilong Global market map of Hilong Adhering to the corporate culture of Openness,Inclusiveness,Unity,and inheriting
24、the Hilong spirit of Passion,Dedication,Loyalty,Hilong will consider technological innovation and internationalization as the core development strategy,and strives to become an internationally competitive oilfield equipment and services provider,continuing to create maximized value for global custom
25、ers.4 1.ESG Governance A robust ESG governance is the foundation for Hilong to achieve sustainable development.To this end,we have established a comprehensive and effective ESG management structure and are actively implementing ESG management from top to down.Beyond that,we attach great importance t
26、o communication with internal and external stakeholders,including government and regulators,shareholders,customers,employees,and business partners.Through regular communication,ESG materiality assessment,etc.,we have gained an in-depth understanding of their requirements and expectations for Hilongs
27、 ESG governance,which allows us to incorporate ESG considerations into the scope of our assessment when developing pertinent goals,policies,and strategies.1.1 ESG Management Structure The Group has incorporated ESG governance into its governance and has established a three-tier ESG governance struct
28、ure,which consists of the Board of Directors(the Board),the Management,and the ESG Working Group,to assist the Group to fully evaluate ESG risks and opportunities during the work of risk management,policy formulation,and strategic planning,ensuring that the ESG-related risks and opportunities are fu
29、lly integrated into the Groups business strategy.The Board The highest decision-making body of ESG management Develop ESG management approaches and strategies,including evaluating,prioritizing and managing material ESG-related issues and their influence on the Groups business Regularly review the Gr
30、oups performance in relation to ESG objectives,examines and approves disclosures in ESG reports Regularly report ESG-related progress The Management Management level of the ESG governance structure Establish and update ESG-related policies Establish ESG goals,approaches,strategies and annual plans A
31、ssign and monitor the achievement of ESG goals Identify material ESG-related issues,risks and their priorities Approve major ESG projects Regularly report ESG performance ESG Working Group Executive level(directly involving department heads)Carry out daily ESG work Prepare annual ESG report Departme
32、nts Business Divisions PR Department,IR Department,Scientific Development Department,EHS Department,HR Department,Investment Department,Audit Department,Digitalization Department,Legal Department,Procurement Department,Corporate Culture Department Equipment Business Division,Oilfield Service Busines
33、s Division,Line Pipe Technology Institution,Offshore Engineering Division 5 1.2 Statement of the Board The Board of the Group takes overall responsibility for the Groups ESG management matters and reviews ESG-related matters at least once a year,including annual ESG performance,establishment of ESG
34、goals and relevant progress,identification and prioritization of material ESG-related issues and risks,etc.The Board attaches great importance to ESG management and report preparation,requiring the ESG report to reflect the Groups key ESG areas and actively respond to the needs of various stakeholde
35、rs.The Board regularly discusses the latest developments of ESG matters so as to continuously improve the sustainable development of the Group.Looking forward,the Group will continue to adhere to the concept of sustainable development and actively fulfil corporate social responsibility.1.3 Stakehold
36、ers Engagement Highly aware of the importance of communication with stakeholders,Hilong has established effective communication mechanisms to actively respond to their expectations and requirements.Closely working with various stakeholders,we strive to promote the sustainable development of the Grou
37、p.Stakeholders Expectations and Requirements Communication Mechanisms Government and Regulators Compliance with laws and regulations Pay taxes according to law Support local development Daily management Meetings Monitoring and inspection Policy advice Case reporting Shareholders Continued developmen
38、t and return to shareholders Information disclosure and investor relations Corporate governance and risk control General meetings Information disclosure Activities promoting investor relations Clients High-quality products High-quality services before and after sales Signing of contract Business dea
39、lings Employees Remuneration and benefits Good work environment and development platforms Equal opportunities for promotion and development Employee training Employee activities and employee care Performance Management Corporate internal publications Care for staff health Media Performance of corpor
40、ate social responsibility Having a good knowledge of corporate significant events,activities and initiatives Business interview Promotion of corporate culture Theme activities Partners Keep promises Equal,open,and fair procurement Mutual benefit development Negotiation and communication Supplier ass
41、essment and evaluations Open bidding and tendering Communication and visitation 6 Community and Society Promote urban development Raise public awareness Promote development of harmonious community Industry-university-institute linkages Establishment of education base Community activities Environment
42、 Promote environmental protection Protect eco-balance Emission under standard thresholds Energy saving and emission reduction 1.4 ESG Materiality Assessment In order to understand the stakeholders concerns about the Groups fulfilment of social responsibility and sustainable development,the Group reg
43、ularly conducts materiality assessment based on ESG related standards,benchmarking against peers,expert analysis,and questionnaires collected from both internal and external stakeholders.In this way,we identified and evaluated our important material ESG topics.The specific process is as follows:Step
44、 1-Identify ESG topics:Hilong identified ESG topics relevant to the Group in accordance with the requirements of the ESG Reporting Guide,and in line with peer benchmarking and expert analysis.Step 2-Determine the materiality:In the form of an online questionnaire,Hilong invited significant internal
45、and external stakeholders to evaluate the materiality of those identified ESG topics.Based on the collected valid questionnaires,Hilong assessed the materiality of ESG topics from the perspectives of impact on business and impact on stakeholders,and then created a materiality assessment matrix.Step
46、3-Verify the assessment results:The Management and the ESG Working Group reviewed and confirmed the assessment results.During the Reporting Period,the Group carefully reviewed the ESG topics and corresponding materiality assessment results.As there are no significant changes in the Groups business a
47、nd external environment,we decide to keep on using the assessment results from years before.The specific ESG materiality matrix is as follows:ESG Materiality Matrix 7 2.Responsible Operation Hilong remains committed to being a responsible and conscientious industrial enterprise.Regarding high-perfor
48、ming research and development(R&D)team and advanced equipment as one of the important guarantees for an organizations core competitiveness,we have established a number of professional R&D institutions with high-end experimental equipment and good R&D conditions to ensure that we have strong innovati
49、on ability and professional R&D level in various fields of oilfield technical services.In addition to delivering cutting-edge technology and quality services to customers,we also hope to use our influence to drive the sustainable development of the industry and even the society,spread the positive e
50、nergy of Hilong,and make progress with all stakeholders.2.1 Promoting Technological Innovation Focusing on customer needs and leading technology and sticking to the development strategy of Scientific and Technological Innovation,Hilong has formed unique industrial advantages with its innovative tech
51、nologies.With relentless efforts put into technological innovation of major products to support their large-scale application,we have built a scientific management system for R&D projects and a sound incentive mechanism for technology innovation.In addition to making constant breakthroughs in key an
52、d core technologies of the industry,we also work hard to promote the development and implementation of new products and new technologies.During the Reporting Period,Shanghai Drill Pipe,a subsidiary of the Group,has been selected as part of the first batch of Key Little Giants in Shanghai for 2024.Ad
53、ditionally,Tianjin Offshore Engineering,another Group-affiliated company,has been recognized as a High-Tech Enterprise and has received certifications as a Tianjin Innovative Small and Medium-sized Enterprise,a Technology-based Small and Medium-sized Enterprise,a Tianjin Hatchling Enterprise and a T
54、ianjin Gazelle Enterprise.We have always followed the SRDI development roadmap.In 2024,Hilong made significant investments in the R&D of drilling tools featuring high strength,high sulfur resistance and high torsional strength,in a bid to continuously improve the performance of drill pipe products a
55、nd operational efficiency.In the field of high-grade sulfur-resistant product technology,we successfully developed the HL135MS sulfur-resistant drill pipe,which has obtained product certification from KOC and is fully capable of large-scale production.For novel special ties,Hilong completed the deve
56、lopment of the HLFHGS high-pressure-resistant joint with proprietary thread technology.In the domain of high-strength drill pipes,we successfully developed the large-diameter thick-walled HLU165 ultra-high-strength drill pipe.HL135MS Super High-Strength Sulphur-Resistant Drill Pipe HLFHGS High-Press
57、ure-Resistant Joint with Special Thread During the Reporting Period,a number of the Groups products received external awards,honors and qualifications,which are expected to support the integration and quality development of intelligent oilfield technology services and offshore engineering technology
58、 services.Hilongs project,Development and Application of High-Grade Sulfur-Resistant Drill Pipe for High-Sulfur 8 Ultra-Deep Complex Wells,has successfully been recognized in the China Science and Technology Innovation Pioneer Technologies List and has been awarded the Gold Prize for Outstanding Inv
59、entions at the 35th Shanghai Outstanding Invention Selection Competition.Hilongs High-Grade Sulfur-Resistant Drill Pipe Project Selected for the China Science and Technology Innovation Pioneer Technologies List In July 2024,the China Association for Science and Technology announced the selection res
60、ults for the 2023 China Science and Technology Innovation series awards.Hilongs project,Development and Application of High-Grade Sulfur-Resistant Drill Pipe for High-Sulfur Ultra-Deep Complex Wells,successfully made it onto the Pioneer Technologies List.This project addresses key challenges in the
61、exploration and development of high-sulfur ultra-deep complex wells,where conventional sulfur-resistant drill pipes often lack sufficient load-bearing capacity and drilling efficiency.Through breakthroughs in several critical technologies,such as special material design for high-grade sulfur-resista
62、nt drill pipes,HLUDS/HLIST ultra-high torque special threaded joint design and manufacturing,and low-hardness corrosion-resistant heat treatment for welded areas.Hilong has pioneered the development of a new generation of HL120S/HL125S high-grade sulfur-resistant drill pipes with high strength,high
63、torque resistance,and high sulfur resistance.These products have already been deployed at scale in high-sulfur ultra-long horizontal well projects in the Middle East and are expected to see widespread applications in Sichuan,Xinjiang,the South China Sea,as well as North America and other Middle East
64、ern regions.This breakthrough holds significant importance for the efficient and safe exploration and development of high-sulfur ultra-deep oil and gas resources.Certificate for the China Science and Technology Innovation Pioneer Technologies List Hilongs High-Grade Sulfur-Resistant Drill Pipe Proje
65、ct Wins Gold Prize at the Shanghai Outstanding Invention Selection Competition In January 2024,Hilongs project,Development and Application of High-Grade Sulfur-Resistant Drill Pipe for High-Sulfur Ultra-Deep Complex Wells,was awarded the Gold Prize at the 35th Shanghai Outstanding Invention Selectio
66、n Competition.This project addresses critical technical challenges in existing drill pipe technology,including low torque resistance,poor sulfur resistance and insufficient load-bearing capacity.By pioneering advancements in special material design,heat treatment technology,manufacturing processes,t
67、hread structure design,and high-precision machining,Hilong successfully developed a series of high-grade sulfur-resistant drill pipes with exceptional sulfur resistance,high strength,superior toughness,and enhanced torque resistance.These innovative drill pipes have already been successfully deploye
68、d in large-scale oil fields,demonstrating stable performance and technical superiority.Both product capabilities and manufacturing processes have reached national leading and internationally advanced standards.9 Gold Prize for Outstanding Invention While constantly strengthening the Groups R&D capab
69、ilities,we are also actively engaged in exchanges and cooperation with scientific research institutions at home and abroad.Hilong has established postdoctoral research station,striving to build a strong scientific and technological innovation talent echelon.Furthermore,with our experience in product
70、 R&D and project services,we take an active part in industry exchange activities and the formulation and revision of industry standards,in an effort to contribute our strengths to overcome key technical difficulties and drive the steady development of the industry.Shanghai Staff Participated in Vari
71、ous Industry Exchange Activities In 2024,the Group actively participated in industry conferences and technical exchange events.These included the TEC 2024 International Conference on Petroleum Pipes and Equipment Materials organized by Xian Tubular Research Institute,the Focus on Shanghai Intelligen
72、t Manufacturing,Win the Future of the Industry thematic event and the 2024 Global Future Industry Star competition promotion conference hosted by the Shanghai Municipal Commission of Economy and Informatization,the 2nd China Deep and Ultra-Deep Oil&Gas Exploration and Development Key Technologies an
73、d Equipment Exchange Conference organized by the Chinese Petroleum Society in Urumqi,Xinjiang,the seminar on the revision of the industry standard Guidelines for Failure Analysis of Petroleum Pipe and Equipment Materials led by CNPC,and the Baosteel hot rolling production line and control center vis
74、it and technical exchange conference organized by the Shanghai Science and Technology Achievement Transformation Promotion Association.Also,the Group has actively organized teams to participate in technical exchanges and collaborations with Sinopec,PetroChina,Southwest Petroleum University and China
75、 State Construction Harbor Engineering on new petroleum drill pipe technologies and offshore engineering advancements.By continuously engaging in major industry academic discussions and key external technical exchanges,the Group demonstrates its leadership position in the industry and its commitment
76、 to technological innovation.10 2.2 Pursuing Excellent Quality As an internationally competitive oilfield equipment and services provider,Hilong thoroughly implements the national innovation-driven development strategy and the concept of high-quality development and strives to build the core competi
77、tiveness of its brand.We strictly comply with the Law of the Peoples Republic of China on the Protection of Consumer Rights and Interests(中華人民共和國消費者權益保護法),the Product Quality Law of the Peoples Republic of China(中華人民共和國產品質量法)and the Regulations on Quality Responsibility for Industrial Products(工業產品質
78、量責任條例)and other relevant domestic and foreign laws and regulations,continuously refine our quality management system,strengthen quality-related training,focus on quality risk prevention and control,and work hard to improve the quality management ability,hoping to deliver high-quality and sustainable
79、 products and services to customers.2.2.1 Governance System Enhancement To continuously provide customers with more stable and reliable products,we have obtained a number of international certifications in drilling services,drilling tools and production tools,including NS-1(Non-productive-time Solut
80、ion Level 1)accreditation.Moreover,we have been authorized to use the American Petroleum Institute(API)Monogram for various rotary drill stem elements of different size:API Spec7-1(Rotary Drill Stem Elements),API Spec 5CT(Casing and Tubing),API Spec 5DP(Drill Pipe),API Spec Q1(Specification for Qual
81、ity Management System)and API Spec Q2(Quality Management for Service Supply Organizations).In addition,to verify and ensure the effective operation of the quality management system,the Group conducts internal and external audits of the quality management system every year to ensure its suitability,p
82、ertinence,effectiveness,and operability.NS-1 certification of Shanghai Drill Pipe API Spec7-1 certification of Shanghai Drill Pipe Hilong continues to strengthen its quality organization at all levels,incorporating all product quality and service quality into its quality management responsibilities
83、scope and ensuring product quality by means of staff training,equipment selection and management,materials,production processes,operational standards,production environment,incentive mechanisms,and the provision of supervision support.Honouring contracts,perfecting quality control;Relying on technol
84、ogy management,seeking quality improvement;Building Hilongs brand image,exceeding customers expectation.Hilong Quality Principle11 Elements of Control Measures to Ensure Product Quality Equipment and Testing Control Possesses advanced production and inspection equipment and establishes a complete pr
85、eventive maintenance system.Possesses a laboratory accredited by the China National Accreditation Service for Conformity Assessment(CNAS),strictly implements the measurement management policy,and regularly carries out self-calibration and third-party manufacturer calibration and verification to guar
86、antee the sensitivity and accuracy of inspection equipment.Material Control Ensures compliance with material quality requirements by conducting entry inspection,production process inspection,finished product inspection,physical and chemical performance testing,pre-shipment inspection,etc.on material
87、s.Production and Inspection Process Control Makes sure that production personnel processes such as thickening,heating treatment,and non-destructive testing of drill pipe body are completed according to the relevant process control requirements of product production and inspection.Production Environm
88、ent Control Effective management of production factors based on lean 5S principles.Personnel Management and Incentive System Control All operators shall obtain certificates before being employed to ensure personnel capability.Establishes an inspection team and strengthens employees self-supervision
89、through process or discipline inspection and implementation of incentive systems.Through the introduction of automated inspection equipment,Hilong strives to improve the capacity and effectiveness of product quality inspection.During the Reporting Period,Shanghai Drill Pipe introduced the automated
90、phased array ultrasonic flaw detector for the welding area of the drill pipe.With the aid of automated flaw detection technology,defects in welded seams(friction welding)can be detected more precisely,hence increasing the flaw detection rate.Apart from that,an intelligent Cloud visual inspection sys
91、tem was also introduced,which can use the surveillance camera to detect anomalies on the steel pipe surface and perform dimensional inspection,thereby lowering the risk of missing detection,increasing detection efficiency,and effectively saving labour costs.Automated Inspection Equipment Introduced
92、by Shanghai Drill Pipe The Group has established a complete emergency response plan and procedures.Once the quality management and inspection personnel have identified any safety risk in products,all the products with safety risks will be recalled immediately in accordance with the Product Recall Po
93、licy(產品召回程式)and be properly disposed.During the Reporting Period,there was no product subject to recalls for safety and health reason in the Group.12 2.2.2 Intensive Quality Training Being fully aware that employees quality awareness and technical ability are of great significance to assure product
94、quality,Hilong has developed a series of targeted training courses,including professionalism,theoretical knowledge,and operational skills.Such training is designed to ensure relevant staff master the theoretical knowledge,understand the equipment operating procedures,and possess the ability to ident
95、ify quality defects and inspect tooling facilities so that they can fulfill all standard operating requirements.After years of practice,the Group has cultivated a group of skilled workers and technicians with rich experience in drill pipe production and skilled in professional inspection.During the
96、Reporting Period,the Group formulated training plans according to the training needs of each department and carried out corresponding trainings for sales department,equipment department,production department,maintenance team,warehouse management,quality inspectors,etc.We have made sustained efforts
97、to guarantee that quality awareness is deep-rooted in the heart of every employee and reflected in their daily work and behavior.Quality Training Activity of Shanghai Drill Pipe To strengthen the construction of enterprise quality culture and raise employee awareness of quality management,Shanghai D
98、rill Pipe carried out a variety of quality training and education activities in 2023,intending to advocate full participation and ensure the smooth and orderly operation of the companys quality management system.Quality awareness training:During the Reporting Period,Shanghai Drill Pipe organized on-
99、site quality awareness training for its management staff once a week,with topics including fostering sense of responsibility,promoting the zero-defect concept,implementing total quality management(TQM),and exchanging ideas gained from reading quality management books.Special training on API Spec 7-1
100、 and API Spec Q1:As for the updated API Spec 7-1-Specification for Rotary Drill Stem Elements(2nd Edition)and API Spec Q1-Quality Management System Requirements for Organizations Providing Products for the Petroleum and Natural Gas Industry(10th Edition),Shanghai Drill Pipe provided special training
101、 for its management staff in September 2023.They invited external instructors to interpret the latest-version document article by article,so as to help the staff better understand the specifications.Besides,an online exam was also organized after the training to help the participants consolidate the
102、ir understanding of relevant knowledge.Position-based training and knowledge contest:To encourage quality-related knowledge learning and sharing and to emphasize the importance of product quality,Shanghai Drill Pipe organized a position-based training and knowledge contest for shopfloor workers in S
103、eptember 2023.Under the theme of quality control,the activity explained in detail the standard operating procedures(SOP)for each position as well as the production,inspection and control technologies and processes,aiming to promote a quality culture throughout the production lines.13 2.2.3 Optimal C
104、ustomer Service Hilong is committed to providing high-quality services for its customers and keeps improving the content and quality of customer services throughout the pre-sales,sales,and post-sales processes.We have established a customer service information system and kept improving the system by
105、 strengthening the service awareness of our customer service staff and organizing service skills training.Through Customer Service Management System(客戶服務管理制度),the Group has clearly defined the handling methods and service standards for customer complaints.Each subsidiary has also formulated its own
106、handling procedures and management methods of customer complaints,specifying the responsibilities and specific operating procedures of each department.Shanghai Drill Pipe,for example,requires its marketing staff to issue a Customer Complaint Handling Form(客戶投訴處理單)one hour after receiving a customer
107、complaint,for which Technical Quality Department needs to give a reply within 3 working days.In case of major complaint,a temporary remedy must be in place within 8 working hours,and a complete solution should be provided to the customer within 2 working days.Those who fail to handle any complaint w
108、ithin the required time shall be subject to corresponding fines or other penalties.In addition,we have developed the Customer Satisfaction Control Procedures(客戶滿意度控制程序)and conducted regular customer satisfaction surveys and occasional call-back to collect and respond to customer opinions,continuousl
109、y improving quality of customer services.During the Reporting Period,the Group received no complaints regarding its products and services.Procedure of Customer Complaint Management Regarding customer information as the secret of the Group,we strictly abide by relevant laws and regulations in the pla
110、ces where we operate,including but not limited to:the Personal Information Protection Law of the Peoples Republic of China(中華人民共和國個人信息保護法);and the Data Security Law of the Peoples Republic of China(中華人民共和國數據安全法).14 Under the Group s confidentiality system and work procedures,we require that the stor
111、age,sending,and receiving of customer information,as well as the transmission and carrying out of it,to be carried out by designated personnel,and no personnel are allowed to copy or extract it unless otherwise authorized.Meanwhile,we arrange more training sessions to strengthen the confidentiality
112、awareness of employees,so as to enhance Hilongs ability to control information security risks.As for advertising,Hilong is in strict compliance with relevant laws and regulations of the places where the Group operates,such as the Advertisement Law of the Peoples Republic of China(中華人民共和國廣告法).We have
113、 formulated the Trademark Management Regulations(商標管理辦法),regulating the advertising contents and conducts involving external publicity such as various types of promotional materials(brochures,newspapers and magazines,etc.),online advertisements and other forms of advertisements(SMS,WeChat,radio,tele
114、vision,outdoor billboards,lifts,etc.).Meanwhile,to maintain the consistency and stability of our Groups image,we have formulated the Management Regulations on the Use of Corporate Image VI(企業形象VI 使用管理規定)and Corporate Image Visual Identity System(VI)Basic Specification(企業形象視覺識別系統(VI)基礎規范),etc.,and ar
115、e continuously regulating and promoting the corporate Visual Image System(VIS).During the Reporting Period,the Groups Legal Department also sent quarterly legal newsletters to the Group,all business divisions and subsidiaries to further enhance the understanding and awareness of responsible marketin
116、g.2.3 Protecting Intellectual Property Rights Hilong is committed to respecting and protecting intellectual property rights(IPRs)and strictly abides by relevant laws and regulations and regulations,including but not limited to:the Trademark Law of the Peoples Republic of China(中華人民共和國商標法);the Regula
117、tions for the Implementation of the Trademark Law of the Peoples Republic of China(中華人民共和國商標法實施細則);the Patent Law of the Peoples Republic of China(中華人民共和國專利法);the Civil Code of the Peoples Republic of China(中華人民共和國民法典);and the Enterprise Intellectual Property Management(企業知識產權管理規范).For in-house achi
118、evements in scientific research,we take timely measures to protect the patents.Overall,we have formed a comparatively complete IPR protection system.During the Reporting Period,Hilong formulated and implemented the Regulations on Intellectual Property Management of Hilong Group(海隆石油工業集團知識產權管理辦法),whi
119、ch contains detailed provisions on the definition and classification of technical secrets,permissions of personnel with access to secrets,and the standards on the reservation and confidentiality of technical documents and materials.All business units adhere to this policy as a guiding framework for
120、technical secret protection and strictly comply with the requirements for safeguarding confidential information in research and development.During the execution of R&D plans,before initiating any research projects,the Groups affiliated R&D units reinforce awareness among research teams regarding tec
121、hnical secret protection.This includes confidentiality of technical documents,external communication and publicity of technical information and patent application processes.All R&D personnel are required to sign confidentiality agreements and specific regulations for laboratory technical data protec
122、tion have been established.The Groups Pipe Research Institute strictly follows the Groups requirements for technical secret protection.During the Reporting Period,detailed discussions and archival protection were conducted for key R&D projects that were completed and reviewed,covering technical secr
123、et inventories,specific confidential content and confidentiality requirements.This ensured a comprehensive and standardized approach to project team technical secret protection.15 In case of any infringement of Hilongs intellectual property rights,the Legal Department will take timely action to prot
124、ect the Groups IPRs by means such as applying for objections and filing lawsuits.The Regulations on Trademark Management of Hilong Group(Trial)(海隆石油工業集團知識產權管理辦法(試行)),which further clarified the segregation of duties relating to the Groups trademark management,and the processes of trademark registrat
125、ion,use and maintenance,further contributing to the optimization of the Groups IPR protection system.In addition,we actively engage in internal and external IPR training,seeing it as an essential means to enhance the Groups competitiveness.Hilong Employees participated in Intellectual Property Train
126、ing In May 2024,the Group invited Weizheng Intellectual Property Company to provide guidance on patent applications.Both parties engaged in detailed discussions regarding the process,requirements and technical documentation for international patent applications,ultimately successfully completing an
127、international invention patent application for petroleum drill technology.Starting in June 2024,the Group designated Chaofan Intellectual Property Service Company as a key strategic partner for intellectual property management,supporting the Groups drill pipe sector through a series of IP training p
128、rograms covering patent mining,patent strategy development,patent search and drafting and intellectual property law.In October 2024,Hilong Offshore Engineering organized its Intelligent Control Center,Engineering Technology Center,Construction Center,and Project Management Department to conduct mult
129、i-level patent technology exploration training focused on patent application strategies.This initiative enhanced the conversion rate of technological innovations into patents,reinforcing the Groups commitment to advancing intellectual property protection and technical innovation.As of 31 December,20
130、24,the Group has held 161(2023:161)registered trademarks,240(2023:462)national authorized patents and 58(2023:54)copyright registration certificates for software programs.16 2.4 Strengthening Supply Chain A stable and sustainable supply chain is the essential foundation of Hilong to create value for
131、 customers.The Group has formulated the Supplier Management Implementation Rules(供應商管理實施細則),the Measures for Contract Management of Material Procurement of Hilong Group(海隆集團物資采購合同管理辦法),the Measures for Quality Management of Material Procurement of Hilong Group(海隆集團物資采購質量管理辦法),the Measures for Price
132、Management of Material Procurement of Hilong Group(海隆集團物資采購價格管理辦法)and the Measures for Materials Storage Management of Hilong Group(海隆集團物資倉儲管理辦法),and other rules,so as to build a robust and rigorous supply chain management system covering demand planning,bidding and tendering management,procurement
133、process management,supplier management,quality management,warehousing management,etc.We have set up a dedicated department responsible for managing the access and change of suppliers,reviewing and submitting supplier information for approval,conducting daily assessment and supervision,and creating s
134、upplier profiles.According to the management principle of Differentiated Management,Dynamic Evaluation and Survival of the Fittest,we classify suppliers into four different categories,and apply different admission criteria and ways of management:Types of Suppliers Definition Selection and Review Sys
135、tem Strategic suppliers Suppliers that is necessary for Hilongs strategic development,directly affects Hilongs business and is irreplaceable.The selection progress includes four steps of information filling,on-site inspection,review and approval.Suppliers are required to provide business licenses,co
136、pies of production licenses,quality management,environmental management,and occupational health and safety management system certificates and other materials for review.Key suppliers Suppliers providing a relatively large share of procurement Cooperative suppliers Suppliers apart from strategic and
137、key suppliers that cooperate with Hilong or its subsidiaries The Group adopts a record filing system to collect and inquire the credit of such suppliers through public platforms to learn about their operating status and conducts on-site inspections when necessary.Non-cooperative suppliers Suppliers
138、that Hilong decides not to cooperate with-For strategic and key suppliers,who have regular business dealings with the Group,Hilong conducts annual quantitative assessments covering production quality,contract performance,after-sales service,quotation,etc.For cooperative suppliers,Hilong adopts an ex
139、ception-based assessment system.Suppliers with serious violations of laws and regulations,benefits through improper means such as bribery,and serious dishonesty announced on the official websites of state organs and authorities are disqualified by the Group.We also make a sustained effort to manage
140、and monitor the quality of materials.We require visual inspection and internal quality control of materials before they enter the warehouse,and continuously monitor and provide feedback on their quality during the stage of usage.17 Material Procurement Management Training In November 2024,Hilong org
141、anized a procurement management system training,conducted both online and offline simultaneously.A total of 31 participants,including procurement department personnel and department heads from the Groups various business units and subsidiaries,attended the session.The training focused on the newly r
142、evised regulations,including the Procurement Management Procedures(采辦管理辦法),the Supplier Management Implementation Rules(供應商管理實施細則)and the Tender Comparison Implementation Rules(招標比價實施細則).Each requirement in these policies was explained in detail and discussions on practical implementation aspects we
143、re held.This training aims to further strengthen Hilong Groups supply chain management,enhance the professionalism of procurement personnel and improve compliance with procurement system regulations.Procurement Management Training Digital Transformation and ERP System Training In 2024,Hilong Group l
144、aunched its digital transformation initiative and began the development of its ERP system.During the second half of 2024,Hilong conducted five rounds of training focused on the procurement and inventory management modules.More than 60 participants,including employees from the Group and various busin
145、ess units involved in procurement and inventory management,attended the training sessions.The core training topics covered digital transformation mindset,how procurement and inventory management are integrated into the ERP system,operational processes for procurement and inventory modules.Through th
146、ese training programs,the Group aims to develop employees digital thinking and skills,optimize procurement business processes and further enhance the efficiency of procurement and supply chain management.18 During the Reporting Period,Hilong completed the assessment of all suppliers that had busines
147、s dealings with the Group,and no supplier was dismissed due to product quality problems.As of 31 December,2024,Hilong had 1,789(2023:1,904)suppliers and the number of suppliers by geographical region is showed as below:B5.1 Number of Suppliers 2024 2023 Shanghai 377 719 Jiangsu 232 339 Guangdong 88
148、141 Beijing 83 113 Shandong 75 87 Zhejiang 51 97 Other Regions 883 408 Note:The 2024 data does not include suppliers previously associated with Hilong Pipeline and its subsidiaries,which have been sold,and therefore,the number of suppliers in Shanghai and Jiangsu has significantly decreased.Meanwhil
149、e,during the Reporting Period,we actively expanded into foreign markets,increasing the number of overseas suppliers,leading to a substantial growth in supplier numbers in other regions.In order to promote the establishment of a sustainable and responsible supply chain,Hilong actively conveys our ESG
150、 idea to the suppliers.For example,we encourage suppliers to recycle packaging materials,and promote them to produce environmental friendly products by selecting water-based paint,solvent-free epoxy paint and other environmental friendly products.For now,the packaging barrels of solvent materials re
151、cycling have been achieved.For the procurement of raw materials with large transportation volumes,we require suppliers to arrange vehicles that comply with Chinas Stage VI Emission Standards for pickup at steel mills.This measure helps reduce vehicle emissions,minimize environmental pollution and pr
152、otect the ecological environment.We have incorporated environmental and social risk factors into our supplier management process.377 232 88 83 75 51 883 719 339 141 113 87 97 408 ShanghaiJiangsuGuangdongBeijingShandongZhejiangOtherRegions2024202319 20 2.5 Adhering to Business Ethics Integrity is som
153、ething the Group never stops pursuing in our operations.We see integrity as the foundation of our business.In addition,we are committed to promoting the sustainable development of the industry in an ethical and sustainable manner.Hilong strictly complies with relevant local laws and regulations,incl
154、uding but not limited to:the Criminal Law of the Peoples Republic of China(中華人民共和國刑法);the Company Law of the Peoples Republic of China(中華人民共和國公司法);the Tender and Bidding Law of the Peoples Republic of China(中華人民共和國招標投標法);the Anti-unfair Competition Law of the Peoples Republic of China(中華人民共和國反不正當競爭法
155、);the Anti-money Laundering Law of the Peoples Republic of China(中華人民共和國反洗錢法);Interim Provisions on the Prohibition of Commercial Bribery(關于禁止商業賄賂行為的暫行規定);and the Audit Law of the Peoples Republic of China(中華人民共和國審計法).In all business dealings,Hilong is opposed to any form of bribery,corruption,extor
156、tion,and corrupt practices and clearly communicates this to all employees as well as suppliers and partners.Hilong upholds the fundamental principles of Prevention Precedes Punishment and Protect Whistle-blowers in observing business ethics.We have formulated strict management system,such as Managem
157、ent System for Audit Department(審計部管理制度),Regulations for the Implementation of the Audit Work(審計工作實施細則),Management System for Fraud and Irregularities(舞弊及違規行為管理制度),Integrity and Self-Discipline Standard(廉政自律規范)and the Anti-corruption and Reporting System(反舞弊和舉報制度),etc.The Board of the Group is respo
158、nsible for urging the establishment of the internal control system.The Audit and Supervision Department of the Group is a permanent establishment for anti-fraud work and is responsible for internal audit.The management of each subsidiary is responsible for publicizing anti-fraud policies and reporti
159、ng procedures through staff manuals,rules and regulations,or internal network and other channels.We engage all employees in the prevention,management,and control of fraud,corruption,and other illegal activities.We actively communicate our philosophy of integrity in cooperation and business to our cu
160、stomers,suppliers,outsourcers and other stakeholders.Meanwhile,we highlight the declaration and reporting of conflicts of interest and prohibits employees from soliciting any benefits from those who have business dealings with the Group,including business partners,customers,suppliers,contractors,com
161、petitors,or those who have business relations with Hilong.During the cooperation with suppliers,Hilong strictly implements the Tendering Management Policy(招標管理制度)and purchases materials and services through an open and fair bidding process.When signing contract with partners,Hilong also sign the Int
162、egrity Agreement(廉潔協議)with them or present them with the Integrity Notice(廉潔告知書),clarifying that no corruption should be allowed in the cooperation process.The Group has established a sound reporting mechanism to increase the efficiency of its internal supervision on anti-corruption and integrity.Hi
163、long has established various reporting channels,which are disclosed at easily visible spots in offices and factories,as well as sound handling procedures.After receiving complaints,the Audit and Supervision Department conducts an investigation and will report to the Management or the Board in case o
164、f confirmation,while deciding punishments in accordance with relevant regulations of the Group.If the misconduct is against the law,the Audit and Supervision Department will refer the matter to the legal authorities for prosecution.Meanwhile,Hilong has established a whistle-blower protection mechani
165、sm,21 through which the information of both whistle-blowers and the matter itself should be kept confidential.If the whistle-blower encounters any form of discrimination or retaliation,the Audit and Supervision Department will intervene in a timely manner by demoting those who conduct retaliation,te
166、rminating the employment contract,etc.In case of violation of laws or regulations,the case will be referred to a judicial office for further processing.Telephone for reporting:021-66862705 E-mail for reporting: Mail address:Audit and Supervision Department of Hilong,No.1825,Luodong Road,Baoshan Dist
167、rict,Shanghai While conducting prevention and supervision,the Group strengthens daily anti-corruption education and regularly organizes publicity and training on anti-fraud policies and reporting procedures,bringing the risks of corruption and conflicts of interest to the attention of management.We
168、also strive to optimize measures to identify and mitigate related risks.During the Reporting Period,we issued the multilingual Anti-fraud Notice(反舞弊告知書)to all employees,so as to further raise their anti-fraud awareness.We delivered anti-fraud lectures to the Board and employees.Anti-Fraud Training I
169、n February and April 2024,Hilong held anti-fraud awareness sessions.Focusing on the Anti-fraud and Reporting System(反舞弊和舉報制度),the training was designed to help employees gain a deeper understanding of corporate anti-fraud principles.By incorporating common fraud cases,the training sought to further
170、raise employees awareness of abiding by the Code of Conduct and ethical standards,laying the foundation for building a clean,self-disciplined,and law-abiding working environment.During the Reporting Period,the Group and its employees have had no violations involving corruption,bribery,extortion,frau
171、d or anti-money laundering.Also,there were no concluded legal cases regarding corrupt practices during the Reporting Period.22 2.6 Sincerely Giving Back to the Society While pursuing self-development and industry progress,we strive to promote the sustainable development of society.We are active in a
172、ll kinds of charity programs,with a focus on rural revitalization and community service.We also continuously encourage employees to carry forward the spirit of selfless dedication,responsible behavior,repay the society with practical actions and improve peoples wellbeing.We have formulated the Measu
173、res for the Administration of Charity and Public Welfare Activities(慈善與公益活動管理辦法),which stipulates the source and use of funds,the form of activities,the summary and assessment of activities,etc.Theme Activity of Learning from Lei Fengs Good Example,Passing on the Spirit of Dedication in the New Era
174、In March 2024,in order to carry forward the spirit of voluntary service of dedication,fraternity,mutual assistance and progress and the spirit of Lei Feng in the new era,the Group sticked to its good tradition of learning from Lei Feng,and launched the theme party day activity of Learning from Lei F
175、engs good example,passing on the spirit of dedication in the new era,which was based on the starting point of Doing practical things for the public.During the Reporting Period,a total of 15(2023:27)participants took part in this activity.Learning from Lei Feng Volunteer Activities The Group actively
176、 called upon its staff to participate in community volunteer services and to contribute to the society through volunteer activities such as blood donation and paying respect to the elderly.During the Reporting Period,a total of 28(2023:40)people participated in blood donation activities and 10(2023:
177、42)people devoted 200 hours(2023:more than 1,000 hours)to volunteer services,contributing their efforts and spreading positive energy.In addition,Hilong also established a close and friendly relationship with the community.During the Reporting Period,we donated RMB5,200(2023:RMB8,000)to care for and
178、 comfort the elderly in the community,actively fulfilling the Groups corporate social responsibility.Voluntary Blood Donation Event 23 3.Care for Employees Adhering to the management philosophy and employment criterion of fairness,justice and openness,Hilong strives to create a healthy and safe work
179、 environment that is friendly and cooperative,as well as diverse and inclusive.Hilong strictly complies with relevant domestic and foreign laws and regulations,including but not limited to:the Labour Law of the Peoples Republic of China(中華人民共和國勞動法);the Labour Contract Law of the Peoples Republic of
180、China(中華人民共和國勞動合同法);the Law of the Peoples Republic of China on the Protection of Disabled Persons(中華人民共和國殘疾人保障法);the Law of the Peoples Republic of China on the Protection of Womens Rights and Interests(中華人民共和國婦女權益保障法);and the Special Provisions on the Labor Protection of Female Employees(女職工勞動保護特別
181、規定).Meanwhile,the Group has established a rigorous training system and smooth career development paths,in order to achieve mutual growth with employees,and thrive together with them towards shared success.3.1 Diversity,Equality and Inclusiveness We actively maintain our diversified operations and fi
182、rmly believe that diversified operations can keep the enterprise dynamic.We provide equal employment opportunities for talents regardless of their gender,nationality,race,age,family background,ethnic traditions,and religion.Based on all these,we also require all expatriate employees to fully respect
183、 the religious beliefs and living customs of local employees overseas,and arrange specialized training for employees dispatched to overseas subsidiaries and projects,so as to help them understand the laws,regulations,religious beliefs,and living customs of the corresponding countries and regions.We
184、also work to ensure that employees of different countries,races,religious beliefs,and living customs are treated equally with respect and protection at Hilong.Hilong strictly prohibits child labour and all forms of forced labour.In accordance with the appendix of the Employment Management Policy(員工聘
185、用管理制度),the Employment Standards for New Employees(新員工錄用標準),the newly hired shall be above the age of 18,and their identity information is subject to strict scrutiny to prevent the unintended employment of child labour.In case of any unintended employment of child labour identified,we will immediatel
186、y terminate the employment contract and send them back to their parents or other legal guardians in accordance with the Prohibition of Using Child Labour(禁止使用童工規定)and the Law of the Peoples Republic of China on the Protection of Minors(中華人民共和國未成年人保護法).Hilong strictly controls overtime in compliance
187、with the legal working hours to guarantee the rest hour and physical and mental health of employees.In case of unavoidable overtime on holidays,employees are given compensatory time off or paid overtime wages in accordance with the law.Besides,adhering to the principle of equality and non-discrimina
188、tion,we respect the rights and interests of all employees and constantly improve the Groups internal employment management system.The Group formulated the Employment Management Policy and the Labour Contract Management System(勞動合同管理制度)to regulate the recruitment process.Hilong explores and attracts
189、outstanding talents through on-campus recruitment,social recruitment,recruiting websites,head-hunters,talent market,and so on.We continue to optimize the talent echelon,absorb employees with different backgrounds,and strive to improve the Groups capabilities in fields such as R&D and management.As o
190、f 31 December,2024,Hilong had 2,479 employees.More details are shown by gender,employment type,age group,region and education group as below:24 B1.Workforce 2024 2023 Unit Total Workforce 2,479 3,486 People Gender Male 2,233 3,023 People Female 246 463 People Employment Type Full Time 2,479 3,486 Pe
191、ople Part Time 0 0 People Age Group Below 30 373 549 People 30-50 1,919 2,608 People Above 50 187 329 People Region China 1,162 1,673 People Overseas 1,317 1,813 People Education Group Bachelor 443 977 People Master 176 231 People Doctor 5 9 People Others 1,855 2,269 People In addition,the Group ful
192、ly respects the career choices of its employees.As for resignation,Hilong strictly complies with the Employee Termination Management Policy(員工離職管理制度,and protects the legitimate rights and interests of employees.The dismissal process only starts when the employee meets relevant requirements for dismi
193、ssal,plus the dismissal is confirmed by the head of his or her department.Hilong has also formulated the Rules for Retirement Ceremony of Employees(員工退休歡送儀式的規定)and organizes retirement parties and sends blessings to retired employees.During the Reporting Period,the employee turnover rate of the Grou
194、p by gender,age group,and region is shown below:B1.2 Employee Turnover Rate 2024 2023 Unit Total Turnover Rate 10.3 11.9 Percentage Gender Male 10.2 12.1 Percentage Female 11.5 10.3 Percentage Age Group Below 30 23.3 21.9 Percentage 30-50 7.5 8.9 Percentage Above 50 8.3 15.6 Percentage Region China
195、7.2 9.0 Percentage Overseas 13.0 14.4 Percentage 3.2 Facilitating Talent Development 10.2%11.5%23.3%7.5%8.3%7.2%13.0%12.1%10.3%21.9%8.9%15.6%9.0%14.4%MALEFEMALEBELOW 3030-50ABOVE 50CHINAOVERSEASGENDERAGE GROUPREGIONEMPLOYEE TURNOVER RATE2024202325 Hilong supports every employee to develop and grow.R
196、ecognizing the different needs and characteristics of different employees,we offer a range of training programs and transparent promotion channels,to help them achieve personal development and self-improvement.3.2.1 Comprehensive Training Systems Hilong has formulated the Staff Training Management P
197、olicy(員工培訓管理制度)and formed a hierarchical training system to improve the ability and quality of employees,optimize their career paths,and promote the joint progress of employees and the Group.Training is arranged for employees at all levels across the Group from three levels:the Group,business divisi
198、on,and subsidiary company.Hilong organizes various training such as management training,professional technician training,sales training,overseas talent training,and operational and technical training each year so as to continuously improve employees professional skills.During the Reporting Period,we
199、 continued to carry out talent assessments for key positions to develop backup personnel and obtained an in-depth understanding of the talent reserves for management,R&D and technology,market/marketing,and other business lines.Based on that,we formulated the Management Measures for Training Reserve
200、Talents for Key Posts of the Group(集團重點崗位后備人才培養管理辦法)and the Implementation Plan for Training Reserve Talents(and Internal MBA Programs)for Vice General Managers and above of Branches and Subsidiaries(and Overseas Project Departments)of Hilong Group of Companies(海隆石油工業集團分子公司(海外項目部)副總經理及以上崗位后備人才培訓(暨企業
201、內部 MBA 班)實施方案)and the revised 2024 Management Measures for Key Position Talent and Reserve Talent Rotation of the Group(集團重點崗位人才及其后備人才輪崗管理辦法).By driving the training and quality improvement of reserve talents for all the key positions at different levels within the Group,consolidate our talent base,
202、and accelerate our sustainable development in the long run through measures including mentorship program,job rotation,sending leaders to front-line positions,and theoretical learning.By the end of the Reporting Period,a total of 119 employees participated in the mentorship programs,74 employees took
203、 part in job rotations and 87 employees joined the theoretical learning(i.e.internal MBA program)in 2024.In 2024,we used the online learning platform Hilong Cloud Classroom,so as to accelerate our progress in IT-based training.This platform makes it convenient for employees in different regions to r
204、eceive training together,and contributes to the accumulation of knowledge and experience within the Group.It also allows employees to learn anywhere,anytime,making training more flexible and fun.In 2024,a total of 83 online test papers were deployed and 108 online exams were organized with a cumulat
205、ive 1,118 participants taking the online exams.26 The Mentorship Program During the Reporting Period,Hilong continues to implement a mentorship program to help employees develop their careers and improve their skills at a faster pace.We held a mentor worship ceremony to establish the mentor-apprenti
206、ce relationship between new employees and their mentors and strengthen their sense of mission and identity as inheritors of the corporate culture.In addition,the performance of the mentorship program was assessed and linked to the mentors allowance.In this way,mentors were better motivated to teach
207、their apprentices and provide them with a more immersive training experience.As a result,both the mentors and the apprentices became more engaged and had a stronger sense of achievement in the training.Mentorship Training The Internal MBA Program During the Reporting Period,Hilong continues to organ
208、ise the MBA program within the Group.Through a combination of online and offline training,the program consists of thematic learning modules:basic theories and case studies in business management,new products/technologies of all entities within the Group,market opportunities and challenges of the ind
209、ustry in overseas regions,technology and knowledge frontiers and development trends in the industry,and established management experiences of external benchmark enterprises.It helped the reserve talents in key positions of our branches and subsidiaries(and overseas project departments)to improve the
210、ir comprehensive skills and consolidated the talent base for the Groups sustainable development.In 2024,the program was successfully implemented with a total of 87 participants.The curriculum covered a diverse range of subjects,including International Finance,International Trade,Human Resource Manag
211、ement,and Internal Control Management Knowledge.On-site Training for the Internal MBA Program 27 During the Reporting Period,the Groups trained employees were classified by gender and employee category as follows:B3.1 Trained Employees 2024 2023 Unit Employees Trained 100 100 Percentage Total Traini
212、ng 56,604 74,744 Hours Gender Male 90.1 86.7 Percentage Female 9.9 13.3 Percentage Employee Category Senior Management 1.0 0.9 Percentage Middle Management 8.0 12.4 Percentage Employees 91.0 86.7 Percentage During the Reporting Period,the average training hours completed per employee,categorized by
213、gender and employee type,are as follows:B3.2Average Training Hours 2024 2023 Unit Average Training Hours per Employee 22.8 21.4 Hours Gender Male 23.0 21.6 Hours Female 21.5 20.5 Hours Employee Category Senior Management 21.6 20.0 Hours Middle Management 30.2 28.5 Hours Employees 22.2 20.5 Hours Mal
214、e,90.1%Female,9.9%Percentage of Employees Trained by GenderSenior Management,1%Middle Management,8%Employees,91%Percentage of Employees Trained by Employee Category 28 3.2.2 Transparent Promotion Channels In terms of employee promotion,we have set clear career development channels,helping and motiva
215、ting employees to continuously realize their professional and personal values.We divide our employees into two talent categories and four talent sequences and provide appropriate career development and promotion channels for all of them.At the same time,based on the Performance Appraisal and Managem
216、ent Policy(績效考核管理制度),Hilong implements annual employee performance appraisal and reviews employees development potential.The appraisal results are taken as the basis of grade and salary adjustments.For employees of different positions and grades,the Group has formulated policies such as the Implemen
217、tation Measures on Level and Compensation Appraisal and Adjustment for Employees below Departmental Heads of the Group(集團部門長以下員工職級及薪酬核定調整實施辦法),the Management Measures for Accreditation and Appointment of Professional and Technical Personnel(專業技術人員任職資格評審及聘任管理辦法)and the Management Measures for Skill R
218、ating of Frontline Production Operators and Appointment of Technicians(一線生產操作員工技能等級評定及技師聘任管理辦法),continuously standardizing the management of employee grade adjustments and giving employees fair remuneration and clear career development channels.23.021.521.630.222.2MALEFEMALESENIOR MANAGEMENTMIDDLE M
219、ANAGEMENTEMPLOYEESGENDEREMPLOYEE CATEGORYAVERAGE TRAINING HOURS29 3.3 Optimizing Compensation and Benefits 3.3.1 Transparent Compensation System Hilong strictly abides by the laws and policies regarding employment,remuneration,social insurance,etc.of the countries or regions where it operates,includ
220、ing but not limited to:Social Insurance Law of the Peoples Republic of China(中華人民共和國社會保險法);Interim Regulations on the Collection and Payment of Social Insurance Premiums(社會保險費征繳暫行條例);Trial Measures for Maternity Insurance for Enterprise Employees(企業職工生育保險試行辦法);Regulations on Unemployment Insurance(失
221、業保險條例);Regulations on Work-related Injury Insurance(工傷保險條例);Regulations on the Administration of Housing Provident Funds(住房公積金管理條例);and Provisions on Minimum Wage(最低工資規定).Our Group has established competitive compensations system to ensure that the average salary of all employees are at the upper an
222、d middle levels in the market,and the salary of key core positions are at the leading level in the market.The Group has formulated the Management Measures for Management Personnel Compensation of the Group(集團管理序列人員薪酬管理辦法),Implementation Measures on Level and Compensation Appraisal and Adjustment for
223、 Employees below Departmental Heads of the Group(集團部門長以下員工職級及薪酬核定調整實施辦法)and other management policies to improve and perfect the compensation distribution system.In accordance with the Groups principle Equal Pay for Equal Work,Fairness and Reasonableness,Incentive and Ease of Operation,a dual-channe
224、l compensation system for management and professional technical positions is implemented.In order to motivate employees and give rewards and punishment according to the actual situation,Hilong has formulated the Annual Evaluation Fulfilment Measures on Group,Business Division(Specialized Company)and
225、 Subsidiary Management(集團、事業部(專業公司)及分/子公司管理層年度考核兌現辦法),strengthened the link between the managements compensation,profit and completion ratio and established a compensation management system focusing on Position,Ability and Performance.30 3.3.2 Comprehensive Welfare Guarantee The Group regards employ
226、ees as critical assets and keeps working to improve employees welfare support system.We strictly abide by the law,and pay social insurance premiums for employees.Moreover,our employees enjoy various benefits packages,including birthday bonuses,festival bonuses,annual physical checks,free shuttle bus
227、es,communication allowance,free work meals,etc.In order to provide a comfortable and secure living and working environment for the new graduates,Hilong has specially prepared a well-furnished and well-equipped apartment building for them,which in turn is a strong guarantee for Hilong to attract tale
228、nts.Ongoing efforts are made to help employees deal with pressing and difficult issues.Hilong has formulated and continuously implemented the Management Measures for the HaizhouFund of Comprehensive Arrangement for Serious Disease(海洲大病統籌基金管理辦法),which helps employees with serious diseases,as well as
229、their families,to cope with life stress.The Group,with harmonious and stable labour relations and well-protected employees rights and interests,was awarded the honorary plaque of Standard Enterprise with Harmonious Labour Relations in Shanghai by the Shanghai Human Resources and Social Security Bure
230、au and Shanghai Federation of Trade Unions in conjunction with relevant associations,as well as that of Demonstration Enterprise for Exemplary Labour Relations of Baoshan Industrial Park by the Management Committee of Baoshan Industrial Park.Standard Enterprise with Harmonious Labour Relations in Sh
231、anghai and Demonstration Enterprise for Exemplary Labour Relations of Baoshan Industrial Park Honorary Plaque 3.3.3 Wonderful Staff Activities For over twenty years,Hilong embraces a corporate culture of“Openness,Unity,Perseverance and Loyalty”,which has continuously guided its growth and developmen
232、t.These values have been deeply integrated into Hilongs business operations and management.Cultural activities serve as one of the most important ways to embody and showcase Hilongs values and spirit.During the Reporting Period,we successfully organized the March 8th Goddess Festival event,the 2nd H
233、ilong Employee Skills Competition,and the 2024 Hilong Cup First New Employee Basketball Tournament,along with other large-scale corporate cultural events.These activities provided a platform for employees to demonstrate their skills,communicate with each other and engage in learning opportunities.Me
234、anwhile,we encourage our business divisions and subsidiaries to carry out team-building activities,to enrich the spiritual and cultural life of employees and lay the foundation for closer cooperation among team members.31 March 8th Goddess Festival Event On March 8th,Hilong Group celebrated the Godd
235、ess Festival by gifting a rose to every female employee at the Shanghai Headquarters Luodong Road Plant,extending heartfelt holiday wishes and company appreciation.The event received widespread praise from Hilongs female employees,many of whom shared their experiences on personal social media,corpor
236、ate WeChat and community forums through various discussions.March 8th Goddess Festival Event Hilong Groups 2nd Employee Skills Competition In July 2024,a total of 57 frontline skilled employees from six companies in Shanghai and one company outside Shanghai participated in an on-site skills competit
237、ion.The theme of the 2nd Hilong Employee Skills Competition was Embark on a New Journey,Excel with Expertise.This year,the competition retained the forklift operation and electrical maintenance projects but introduced more innovative formats and higher technical difficulty requirements.Additionally,
238、to promote new technologies and skills,and align with Hilongs digital transformation strategy,a CNC lathe competition was added.By integrating new productivity trends and digital transformation,the 2nd Employee Skills Competition introduced new themes and skill categories,significantly enhancing the
239、 competitions depth and engagement.The event saw active participation from frontline employees,further fostering Hilongs culture of competing,learning,surpassing and encouraging skill development for all.Hilong Groups 2nd Employee Skills Competition 32 Hilong Cup First New Employee Basketball Tourna
240、ment Inspired by the Paris Olympics fever,Hilong organized the first Hilong Cup New Employee Basketball Tournament to further enrich employees leisure and cultural life.The event aimed to help newly recruited employees experience Hilongs corporate culture firsthand while showcasing the youthful ener
241、gy,competitive spirit,and determination of Hilong employees.Following the small investment,big event philosophy,the tournament attracted 32 new and senior employees from eight companies.It highlighted Hilongs values of unity,perseverance,openness,and passion,bringing a team-oriented and fighting spi
242、rit back into the workplace,motivating colleagues and contributing to company-wide success.Hilong Cup First New Employee Basketball Tournament As an international company with industries and employees spread across the globe,Hilong relies on Enterprise WeChat as a key platform for connecting and com
243、municating with employees worldwide.Through Enterprise WeChat,Hilongs employees from different locations can stay updated on the latest company developments and actively participate in topic discussions.In 2024,Hilongs employees independently shared over 200 discussion topics in the Enterprise WeCha
244、t Voice Community,ranging from New Year greetings and post-holiday work resumption to the March 8th Goddess Festival and June Safety Month activities.Other popular topics included Who is the most lovable Hilongs employee?and monthly corporate cultural events across different companies.The Voice Comm
245、unity has maintained a high level of online interaction and engagement.Through these discussions,it is evident that Hilongs local branches prioritize employee well-being,fostering a caring and supportive environment by organizing diverse corporate cultural activities and implementing incentives and
246、employee care measures.33 3.4 Safeguarding Safety and Health At Hilong,protecting employees occupational health and life safety is one of our most important responsibilities.We strictly comply with the Law of the Peoples Republic of China on the Prevention and Control of Occupational Diseases(中華人民共和
247、國職業病防治法)and the Fire Protection Law of the Peoples Republic of China(中華人民共和國消防法).A number of the Groups subsidiaries have obtained relevant certification of the ISO 45001 occupational health and safety system.We set up an Occupational Health,Safety and Environmental Protection Committee(HSE Committe
248、e),which has the HSE Management Office as one of its subsidiaries,to manage the Groups health,safety and environmental protection issues.Also,we summarize the safety achievements of each division in the previous month and our HSE work priorities for the following month at our regular meetings on a m
249、onthly basis.The Group regularly conducts holistic and comprehensive safety inspections on its subsidiaries to identify and analyze potential safety risks in their technological processes,production operations,equipment and facilities,working environment,fire safety,use of hazardous chemicals,occupa
250、tional health and safety management,personnel behavior,and management system,etc.,with targeted rectification suggestions proposed to eliminate potential safety hazards in production processes in a timely manner.During the Reporting Period,to further improve the overall HSE management at all levels
251、of the Group,Hilong has revised and updated the Compilation of HSE Management Systems of Hilong Group(海隆集團 HSE 管理制度匯編),primarily adding and modifying the Major Accident Hazard Management System(重大事故隱患管理制度),to further prevent and control occupational diseases and work-related accidents,and implement
252、environmental protection.The Compilation serves as a practical basis for the Group to establish a unified and standardized safety management system and lays a solid foundation for Hilong to implement its HSE policies and realize its HSE goals.HSE Policies:People Oriented,All Staff Participation,Scie
253、ntific Management,and Sustainable Development HSE Goals:Pursuing No Accident,No Injury and No Pollution to Create First class HSE Performance The Group promptly tracked the reasons,strengthened the supervision of safety hazards and implemented improvements.Besides,the Group also improved the relevan
254、t management systems,and further strengthened employee safety awareness training and safety operation assessments.During the Reporting Period,the number of lost working days of the Group was 90(2023:38)days and the injury rate of million working hours was 0.47(2023:0.44).The Company has appropriatel
255、y adjusted the workload of the injured employee to help her recover work capacity more quickly.Immediate safety inspections have been conducted in the workplace to identify and eliminate potential safety hazards.In the past three years,the Group never had any work accident that involved employee fat
256、ality.3.4.1 Prioritizing Production Safety Production safety is the foundation and prerequisite of business operations.Hilong is committed to the production safety policy of Putting Safety and Prevention First,and Governing in a Comprehensive Manner and takes robust measures to protect the lives and
257、 properties of all parties.We strictly adhere to the Work Safety Law of the Peoples Republic of China(中華人民共和國安全生產法)and we have built up a robust safety production management framework comprising a range of safety systems and have enhanced the standardization of production safety for better managemen
258、t of production safety and fewer safety accidents.34 We have established a system for inspecting production safety hazards,striving to make it everyones responsibility,including principal personnel in charge and general staff,to inspect,manage,prevent and control hazards.Based on local laws and regu
259、lations as well as the needs and features of production safety,we adopt such different approaches to inspect hidden hazards as comprehensive,specialized,seasonal,holiday and daily inspections.For the hazards inspected,we carry out special treatments and reassess the treatment results to fully elimin
260、ate risks.During the Reporting Period,business divisions and subsidiaries of the Group organized a total of 57 comprehensive inspections and more than 150 routine inspections throughout the year,identifying 458 general safety hazards.Each company responded proactively,ensuring timely rectifications,
261、achieving a 100%correction completion rate,thereby promptly eliminating a number of safety hazards and accidents.Safety Production Anti-Violation Action Through the comprehensive implementation of the Safety Production Anti-Violation Action,employees have developed a deeper awareness of the dangers
262、of violations,leading to better enforcement of safety regulations and more targeted safety education and training.This initiative has significantly enhanced employees safety awareness and skill levels.In 2024,Hilong Group established a Leadership Team for the Safety Production Anti-Violation Action.
263、As part of this campaign,169 violations were identified,and corrective actions were promptly taken through on-site intervention,reports to responsible departments for rectification and group-wide assessments.By standardizing violation prevention,systematizing accident prevention and regulating safet
264、y protection,Hilong has effectively reinforced workplace safety.On-Site Anti-Violation Action To involve all employees in safety risk prevention and control while strengthening their awareness of responsibility for safety,Hilong introduced the Safety Training Observation Program(STOP Card)in 2022.Du
265、ring the Reporting Period,the STOP Card was promoted across the Group,and the related program was continuously optimized.35 Sustained Promotion of the STOP Card in Hilong The STOP Card,originally proposed by a US-based company,DuPont,can identify unsafe behaviors of employees and unsafe state of obj
266、ects with the participation of all employees,so as to prevent accidents through real-time risk identification.However,in practice,the STOP Card often suffers from a low level of employee engagement,which greatly undermines its actual effectiveness.In response to the above issue,Hilong worked on the
267、four aspects of convenience,effectiveness,motivation and timeliness during the Reporting Period and tried every possible way to mobilize employees to use the tool:Convenience:An exclusive Mini Program for the STOP Card has been set up,so that employees can fill in information at any time and departm
268、ents can check and then rectify the problems in a timely manner.Effectiveness:Problems like irregularity and inaccuracy can easily reduce the effectiveness of the STOP Card.To this end,Hilong has organized training to help employees acquire the right way of filling out information,so as to make the
269、information collection more accurate and efficient.Motivation:After screening the valid STOP Card,Hilong gives material incentives to those who fill out it to encourage employees to identify and report problems.Timeliness:For the STOP Card submitted by employees,Hilong requires managers to provide t
270、imely feedback on the results of the hazard inspection and related rectification,thus ensuring that the employees are aware of the follow-up of their reported problems.Through regular safety training,drills and internal awareness campaigns,Hilong has continually emphasized the importance of the STOP
271、 Card to ensure employees fully understand and effectively use this safety tool.Utilizing a mobile app-based tracking system,sub-accounts were created for frontline departments,allowing employees to record and upload issues in real-time.Department heads can access reports via the backend system,faci
272、litating prompt internal resolutions and ensuring the continuous improvement of production safety management.In 2024,the ongoing promotion of the STOP Card significantly boosted employees safety awareness.Employees have become more attentive to workplace hazards,proactively reporting and correcting
273、unsafe behaviors,effectively reducing the likelihood of accidents.Hilong conducts safety training on an annual basis for management,department managers and operators to enhance their safety awareness.During the Reporting Period,Hilong carried out a company-wide Fire Safety Education and Training Pro
274、gram,which comprehensively improved the safety skills and enriched the safety knowledge of relevant personnel.36 Company-wide Fire Safety Education and Training Program In November 2024,Hilong launched a comprehensive fire safety education and training program to effectively implement the fire preve
275、ntion principles of Safety First,Prevention-Oriented and a Combination of Prevention and Firefighting.The initiative aimed to enhance fire safety awareness among employees working in high-rise buildings,strengthen fire prevention,emergency response,self-rescue and evacuation skills to improve the Co
276、mpanys four key fire safety capabilities.The training was conducted simultaneously online and offline.Employees attended centralized online training sessions in meeting rooms across subsidiary companies,followed by a unified examination upon completion to reinforce critical knowledge and skills.On-S
277、ite Fire Safety Education and Training In addition,the Group continuously strengthens the production safety and occupational health control of contractors,suppliers and other parties.We also incorporate them into internal management and further standardize the system and process of pre-qualification
278、,selection,training of operators,supervision and inspection of operation,provision of products and services,and performance evaluation.We have established a list of qualified contractors and regularly maintain it to take effective control measures on identified safety risks of services.In the event
279、that a safety incident does occur,Hilong will strictly follow the Incident and Accident Control Procedures(事件事故控制程序)to handle the situation appropriately and ensure a quick response through hierarchical reporting,establishing an accident investigation team,releasing an investigation report,making an
280、 imputation based on the investigation results.We will also learn from it timely by preparing an accident analysis report and making announcement to learn lessons,so as to avoid the recurrence of similar incidents.3.4.2 Protecting Occupational Health Hilong attaches huge importance to employees occu
281、pational health and is committed to creating a safe and favorable working environment for them.Hilong has established an occupational health management institution,developed an occupational health management system and formulated an occupational disease prevention plan and implementation strategy.We
282、 have developed and strictly follow the Occupational Health Management Policy(職業健康管理制度)and other management procedures to standardize the management of our employees occupational health.According to the Administrative Regulations on Periodic Testing of Occupational Disease Hazards by Employers(用人單位職
283、業病危害因素定期檢測管理規范),Hilong yearly conducts a comprehensive inspection on work sites where the occupational disease hazards exist.If the concentration or intensity of occupational disease hazard factors exceeds the limit of occupational exposure,we will develop plans and take immediate corrective actions
284、.For employees working in positions with high potential of occupational disease hazards,Hilong informs them of the hazards before they start work,and arranges health examinations before,during,and after their work.All examination results will be promptly recorded in the occupational health file and
285、communicated to the employees to ensure that they fully understand their occupational health status.During the work process,Hilong regularly distributes labour protective 37 equipment and ensures employees wear protective gear as required,effectively reducing the impact of the work environment on em
286、ployee health.During the Reporting Period,we optimized the Standardization of Occupational Health Files by integrating and organizing occupational health management files,occupational hazard monitoring and evaluation files and so on,thereby enhancing the accuracy and completeness of these files.We k
287、ept optimizing our prevention and control measures for occupational hazards in production.In the friction welding automation transformation project,we replaced the traditional polishing rust removal process with a safer and more environmental friendly laser rust removal,which not only completely eli
288、minates the occupational health hazards of the traditional process but also alleviates the problem of environmental pollution in the plant.To address the occupational health hazards of dust,Hilong installed online dust detection devices,spark detectors,explosion-proof valves,automatic fire extinguis
289、hing sprinklers,and other safety devices at the relevant locations of the dry dust removal system following the Safety Regulations on Dust Explosion Prevention for Industrial and Trade Enterprises(工貿企業粉塵防爆安全規定)and the Safety Regulations for Dust Explosion Prevention and Protection(粉塵防爆安全規程)to thorou
290、ghly prevent safety accidents.In addition,Hilong pays attention to health education and training for all employees by regularly conducting occupational health training to popularise knowledge on the prevention and treatment of occupational diseases and labour protection,as well as information about
291、healthy lifestyles,disease prevention,and mental health.3.4.3 Strengthening Emergency Response Hilong has established a sound emergency response mechanism in compliance with the National Emergency Response Plan for Environmental Incidents(國家突發環境事件應急預案).It has formulated enterprise-level specialized
292、emergency response plans based on the HSE Management System of Hilong Group(海隆集團 HSE 管理制度),and other internal regulations for major emergencies such as leakage,fire,and explosion in the production and storage of hazardous chemicals and special hazard mediums.Guided by the mechanism,the Group conduct
293、s emergency response drills annually to constantly enhance the emergency awareness and hands-on capabilities of staff and extract corresponding corrective measures from the drill results to continuously improve emergency management capabilities.To reduce potential accidents in the workplace and prod
294、uction process,such as the short circuit of power cables and equipment,which may easily result in casualties,the Group has compiled the Exercise Plan for On-site Electric Shock Response(觸電事故現場處置演習方案).During the Reporting Period,the Group conducted on-site exercises for such scenarios for a timely an
295、d effective emergency response to electric shock incidents.Moreover,during the Reporting Period,Hilong organized the 2024 Fire Drill to strengthen employees emergency response capabilities in case of fire and other emergencies.38 Fire Drill In November 2024,the Group headquarters building conducted
296、a fire drill to strengthen fire safety awareness and emergency evacuation practice.The event included fire safety knowledge training,practical drills,and hands-on fire extinguisher operation,enabling employees to familiarize themselves with firefighting equipment and master emergency evacuation proc
297、edures in the event of a fire.By simulating real-life fire scenarios,employees were equipped with the skills necessary for self-rescue and mutual aid,ensuring a quick and effective response in an actual emergency.This initiative significantly enhanced employees fire safety awareness and evacuation c
298、apabilities.Fire Drill On-Site Activities 39 4.Green Operation for Better Ecosystem Hilong is committed to environmental protection and energy conservation.We keep pursuing clean production and implementing the philosophy of sustainable development for the goal of zero environmental pollution.In our
299、 daily operations,the consumption of natural resources remains relatively low and we have not caused any significant environmental impact.The Group strictly complies with the laws and regulations of the countries or regions in which it operates,including but not limited to:the Environmental Protecti
300、on Law of the Peoples Republic of China(中華人民共和國環境保護法);the Law of the Peoples Republic of China on the Prevention and Control of Atmospheric Pollution(中華人民共和國大氣污染防治法);the Law of the Peoples Republic of China on Prevention and Control of Water Pollution(中華人民共和國水污染防治法);the Law of the Peoples Republic o
301、f China on Prevention and Control of Environmental Pollution by Solid Waste(中華人民共和國固體廢物污染環境防治法);the Law of the Peoples Republic of China on Prevention and Control of Noise Pollution(中華人民共和國噪聲污染防治法);the Environmental Impact Assessment Law of the Peoples Republic of China(中華人民共和國環境影響評價法);the Regulatio
302、ns on Environmental Protection Management of Construction Projects(建設項目環境保護管理條例);and the Catalogue of Classified Management for Environmental Impact Assessment of Construction Projects(建設項目環境影響評價分類管理名錄).During the Reporting Period,there were no major non-compliance incidents related to environmental
303、 laws and regulations that could significantly impact the Group.Meanwhile,under the guidance of the People-oriented,Health Priority,Safety First,and Leading in Environmental Protection policy,Hilong continuously improves its environmental management system,reduces emissions,waste generation and reso
304、urce consumption,enhances environmental sustainability,minimizes its impact on the environment and natural resources,and insists on the efficient use of energy resources in accordance with the ISO 14001/GB/T 24001 Environmental Management System Requirements and Usage Guidelines(ISO 14001/GB/T 24001
305、 環境管理體系要求及使用指南)and the Hilong Holdings Environmental Protection and Energy Conservation Management System(海隆控股環保節能管理制度).A number of the Groups subsidiaries have already obtained the ISO 14001 environmental management system certification,and its core enterprise,Shanghai Drill Pipe,has even been list
306、ed as a Shanghai Green Manufacturing System Demonstration Unit.Hilong will continue its efforts for the proactive protection of natural resources and environmental governance.For this purpose,Hilong will integrate green solutions into the Groups existing business through the exploration of clean ene
307、rgy projects and the innovation of green,energy-saving materials.By doing so,Hilong will shoulder its corporate responsibilities in realizing the national goal of carbon peaking and carbon neutrality,as well as tackling climate change on a global scale.40 4.1 Green Product Research and Development U
308、pholding the green development concept of Innovation,Green Development,Openness,and Sharing,the Group has developed its own research and development capabilities.During the Reporting Period,some of our products made technical breakthroughs,advancing the implementation of green and low-carbon applica
309、tion solutions.These innovations have received external recognition and are expected to help the industry achieve production that is more environmentally friendly,more efficient and more secure.Shanghai Drill Pipe Wins Green Low-Carbon Practice Pioneer Honor Hilong has implemented green and low-carb
310、on application solutions,effectively utilizing the heat from the exhaust gas of gas-fired heating furnaces to reduce energy consumption and lower carbon emissions.This initiative has enabled Shanghai Drill Pipe to adopt a more environmentally friendly and efficient production model.In recognition of
311、 these achievements,Shanghai Drill Pipe was awarded the“Green Low-Carbon Practice Pioneer”honor by the Baoshan District Peoples Government.“Green Low-Carbon Practice Pioneer”Award 4.2 Efficient Utilization of Resources To deliver on Hilongs transformation strategy of developing into a worlds leading
312、 manufacturer and service provider of oilfield equipment,we work on shifting to a more efficient and leaner model of production and operation.Also,we strictly comply with policies,goals and commitments on health,safety and environment protection during production and operations,and fulfill the requi
313、rements of sustainable development on energy conservation and clean production.4.2.1 Energy Resource Utilization The energy used by Hilong mainly includes natural gas used in the production,petrol and diesel consumed by forklifts,electricity used in production,office and life in the factory,as well
314、as natural gas,diesel,petrol and electricity used in the drilling process of oilfield service and marine engineering services.Hilong strictly abides by the relevant laws and regulations of countries or regions where it operates,for example,the Energy Conservation Law of the Peoples Republic of China
315、(中華人民共和國節約能源法).We have developed our own Environmental Protection and Energy Conservation Management Policy(環保節能管理制度)to standardize the management of energy conservation within the Group.Each division has set up an energy office and formulated its own energy-saving targets and related implementation
316、 plans to improve energy efficiency and reduce total energy consumption by vigorously promoting green office and green production.During the Reporting Period,we carried out an energy-saving renovation of the headquarters office building in Shanghai by upgrading the entire lighting system to LED ener
317、gy-saving lamps.At the same 41 time,we actively advanced the rooftop photovoltaic power generation project at Shanghais industrial park.Construction commenced in July 2024 and was completed in December 2024,including reinforcement of the factory buildings and installation of photovoltaic systems.The
318、 project has a total installed capacity of 9.28 MW and is expected to achieve an annual power generation of approximately 9 to 10 million kWh in 2025.Panoramic View After Photovoltaic Installation During the Reporting Period,the direct/indirect energy consumption in total and intensity are shown bel
319、ow:A2.1 Energy 2024 2023 2022 Unit Natural gas 207 606 480 10,000 m3 Diesel 11 86 92 Tonnes Gasoline 6 20 38 Tonnes Liquefied gas 5 5 6 Tonnes Total direct energy consumption 22,607 66,888 53,579 MWh Electricity 23,003 44,506 36,602 MWh Total indirect energy consumption 23,003 44,506 36,602 MWh Tota
320、l energy consumption 45,610 111,394 90,181 MWh Energy consumption intensity 9.8 26.2 24.1 MWh/million RMB revenue Note 1:Total energy consumption is calculated based on the consumption of natural gas,diesel,gasoline and liquefied gas and the amount of electricity purchased.Conversion factors come fr
321、om Appendix 1:default values of fossil fuel and Appendix 2:default density of fuel oil of the Accounting Methods and Reporting Guide for Greenhouse Gas Emissions from Mechanical Equipment Manufacturing Enterprises(機械設備制造企業溫室氣體排放核算方法與報告指南)issued by the NDRC.Note 2:The 2024 data does not include Hilon
322、g Pipeline and its subsidiaries,which have been sold,resulting in a significant reduction in energy consumption.42 4.2.2 Water Resource Utilization Hilong uses municipal water and applicable local water sources,and did not encounter any difficulty in sourcing water during the Reporting Period.We str
323、ictly abide by relevant laws and regulations of countries or regions where we operate,including but not limited to the Water Law of the Peoples Republic of China(中華人民共和國水法).By formulating and perfecting the Environmental Protection and Energy Conservation Management Policy(環保節能管理制度)and Management Ru
324、les on Water Utilisation(用水管理制度),the Group strives to ensure that its water usage and water conservation work are carried out in an effective and orderly manner.Our water conservation initiatives include,but are not limited to:In 2024,we upgraded the water-saving sanitary ware at the headquarters of
325、fice building in Shanghai by replacing all sanitary wares in washing rooms with water-saving ones,which is expected to save up to 900 tonnes of water per year.During the Reporting Period,the Groups water consumption in total and intensity are shown below:A2.2 Water 2024 2023 2022 Unit Water consumpt
326、ion 68,721 105,096 106,060 Tonnes Water consumption intensity 14.7 24.7 28.4 Tonne/million RMB revenue Note:The 2024 data does not include Hilong Pipeline and its subsidiaries,which have been sold,resulting in a decrease in water consumption.Carry out water-saving publicity and education works Raise
327、 employees awareness Encourage employees to participate in water-saving activities Monitor facilities water consumption Improve rational use of water Anlalyze water consumption status Arrange regular maintenance for pipielnes,valves and other facilities in the water supply system Repair sudden failu
328、res of water system in a timely manner to reduce water loss to the minimum Regularly maintain water supply system to eliminate leaks 43 4.2.3 Packaging Material Utilization The packaging materials used by Hilong primarily include packing frames,iron packing belts,pipe protection ropes,wooden cases,p
329、aper cases,etc.For packaging materials that meet the conditions for recycling and reuse,we proactively carry out recycling operations to reduce unnecessary consumption of resources.During the Reporting Period,the total amount and intensity of packaging materials used in the Groups finished products
330、are shown below:A2.5 Packaging Materials 2024 2023 2022 Unit Packaging materials consumption 102.6 273.8 275.6 Tonnes Packaging materials intensity 22.0 64.4 73.8 kg/million RMB revenue Note:The 2024 data does not include Hilong Pipeline and its subsidiaries,which have been sold,resulting in a decre
331、ase in packaging material usage.4.3 Implementation of Emission Management Hilong is committed to sustainable management throughout its operation and upholds emission management with environmental standards above national and local standards.“No Pollution”has long been set as one of our HSE goals.The
332、 Group regularly invites and cooperates with local environmental supervision department to test its emissions,thus ensuring the compliance.To raise awareness of emission management within the Group,Hilong has set up specific environmental protection indicators and incorporated them into the assessme
333、nt system for each business division and its leading members.Meanwhile,the Production Safety and Environmental Protection Department of the Group conducts a unified yearly inspection of all production units in Shanghai,monthly inspections of the Baoshan Industrial Zone,and unscheduled on-site inspections on emission management.It also requires the Safety and Environment Offices of subsidiaries to