华润三九：2024年可持续发展暨ESG报告(英文)

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责任共创美好未来华润三九可持续发展暨ESG报告

20242024

CR SANJIU2024 SUSTAINABILITY AND ESG REPORT

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd.

CONTENTS

Message from the Executive

04Feature Story 1:

Synergistic Development ofthe Whole Industry Chainto Create Advantages inthe Traditional ChineseMedicine Industry

Feature Story 2:

Leading Green and Low-CarbonDevelopment and Building the Near-Zero Carbon Park08About Us

Focus 2024

Sustainability Management16

Outlook for 2025Key Performance TableIndex of IndicatorsFeedbackAbout this Report

Healthy Companions, HappyEmployeesOptimizing supply to serve societyCollaborate for Mutual Bene?t andSocial ContributionCaring for the Community and GivingBack to SocietyRural Revitalization, Rich and BeautifulSociety

Unite as One, SharingResponsibility for aHarmonious Society92Low-Carbon Leadership,Jointly Creating a GreenHome

Strengthen Control, Advocate GreenDevelopmentMulti - Dimensional Carbon Reduction,Protect the GreenEcological Balance and Green Building

68Control the Source of Medicines,Safeguard HealthOptimizing Services, ProtectingHealth

Quality Escort, NewQuality Productive ForcesPromote Development

Uphold Integrity, Operate in a SoundMannerCraftsmanship and ResponsibleOperationStrengthen Party Construction andCompliant Operation

36Governance with Wisdom,Strengthen Foundations forthe Company Development

Focus on Innovation andStable DevelopmentDeepening Transformationfor Sustainable Development

Innovation-Driven,Pioneering New Frontierswith TechnologicalBreakthroughs

Message from the Executive

The year 2024 marks the 75th anniversary of the founding of the People's Republic of China, a pivotal year for realizing CRSanjiu's "14th Five-Year Plan" strategic goals, and a year of progress for the high-quality development of Chinese medicine.Standing at the starting point of a new era, CR Sanjiu shoulders the mission of a central enterprise, embraces its role, fullyimplements the new development philosophy, and strengthens the "Trinity" value creation capability. The Company promoteshigh-quality development through the dual-wheel drive of "Brand + Innovation," actively responds to the expectations of thenation and the people, and provides consumers and patients with "Safe, High-quality, and E?cient" pharmaceutical productsand services, effectively fulfilling the social responsibilities, contributing to the construction of a healthy China and therealization of the Chinese dream with Sanjiu's strength.

Adhere to the party building leadership, build the foundationof development. We consistently place Party leadership at

the core of the entire corporate development process, guidingthe high-quality development of the Company through Partybuilding efforts. By leveraging "political leadership" and"organizational empowerment," we have consolidated andexpanded the gains from the thematic education based on XiJinping Thought on Socialism with Chinese Characteristics fora New Era. Furthermore, we foster deep integration betweenParty building and business operations, utilizing advancedtechnologies such as 5G and blockchain through the Deep BlueLaboratory to achieve end-to-end control and optimization ofthe entire production process.Practice green and low carbon, empower the industry'ssustainable development. In response to the national DualCarbon strategy, we actively explore pathways to achieve carbonpeaking and carbon neutrality within the pharmaceuticalindustry. We have implemented a pilot project for a near-zerocarbon emission park and enhanced energy utilization e?ciency.By undergoing digital transformation and integrating intelligentmanufacturing applications, we aim to enhance green and low-carbon development level establish a green and low-carbonindustrial chain, and provide novel insights for the sustainabledevelopment of the traditional Chinese medicine industry,empowering the green and high-quality development of theindustry, thereby contributing signi?cantly to the promotion ofits sustainability.

Delve deeply into core business, build core competitiveness.We are benchmarking against world-class enterprises to enhanceour business layout and expanding our core business across theentire self-diagnosis and treatment spectrum. Our goal is to meetthe health needs of every family member throughout the fullcycle of prevention, healthcare, treatment, and rehabilitation,at multiple levels, through products and high-quality servicesthat o?er a superior experience. Additionally, we strengthen thePanax ginseng industry and high-quality Chinese medicines toreinforce our core business, forming a "one body, two wings"business model that promotes the inheritance and innovationof traditional Chinese medicine and fosters high-qualitydevelopment.Promote the synergistic development of the whole industrychain and create a model of industry standards. As a leadingenterprise in the traditional Chinese medicine industry chain,we actively promote the high-quality development of the entireindustry chain. We facilitate integrated industry developmentthrough "building alliances," "establishing platforms," "gathering

talents," and "promoting cooperation." We collaborateextensively with upstream and downstream participants inthe industry chain, innovate cooperation models, and arededicated to establishing a new paradigm of high-qualitydevelopment characterized by "joint construction, sharing, andmutual benefit", aiming to better advance the preservation,development, exploration, and inheritance of the traditionalChinese medicine industry.

Strive for win-win cooperation, create and share betterlife. We always prioritize product quality and patient safety,implementing strict quality control measures to providethe public with safer, higher-quality, and more accessiblemedications. Meanwhile, leveraging our industrial advantages,we promote the seamless integration of traditional Chinesemedicine inheritance and innovation with rural revitalization,and engage in various public welfare activities. We adhere to apeople-oriented approach, safeguard the rights and interestsof our employees, and provide a broad platform for talentdevelopment.Continuously deepen reformation and promote high-quality development. We actively undertake the deepeningand upgrading of state-owned enterprise reformation, focusingon enhancing core competitiveness and core functions. Westrive to position the Company as a key player in scienti?c andtechnological innovation, industrial control, and security supportwithin the construction of a modernized industrial system and anew development paradigm, aiming to bolster our capabilities inmodern governance and market-oriented operations.Take on heavy burdens and dare to be a pioneer. CR Sanjiu

always keeps its original mission in mind, striving for excellencewhile adhering to Xi Jinping Thought on Socialism with ChineseCharacteristics for a New Era as its guiding principle. We fullyimplement the work deployments and requirements of theCPC Central Committee, the State-owned Assets Supervisionand Administration Commission (SASAC), and China ResourcesGroup. Guided by the mission of "Caring for Public Healthand Creating a Better Life," we uphold the values and senseof responsibility of pharmacists and embrace the concepts ofsustainable development and ESG. With this mission leadingus, we will adhere to the values and sense of responsibility ofpharmaceutical professionals, practice sustainable developmentand ESG concepts, and strive towards the goal of "becoming aleader in the public pharmaceutical and health industry."

Feature Story 1Synergistic Development of the Whole IndustryChain to Create Advantages in the TraditionalChinese Medicine Industry

The development of the traditional Chinese medicine industry has become a powerful engine for revitalizing traditional Chinesemedicine and implementing the Healthy China strategy in the new era. It also serves as an e?ective pathway to align with the "Beltand Road" initiative and build a community with a shared future for mankind. CR Sanjiu deeply implements the major decisions of theCPC Central Committee on the Healthy China strategy and the promotion of traditional Chinese medicine inheritance and innovation.By advancing the high-quality development plan for the industry chain, CR Sanjiu ful?lls its responsibility and mission of "Caring forPublic Health and Creating a Better Life" through practical measures, driving the high-quality development of the entire industry chain.

Pay Attention to the Planting Management of Chinese Medicine Herbs andGuarantee the Quality of the SourceThe germplasm resources of traditional Chinese medicine constitute the strategic resources of the country, the core of qualitycontrol for traditional Chinese medicine, the foundation of its efficacy, and the source of development for the traditional Chinesemedicine industry. CR Sanjiu prioritizes high-quality medicinal materials in its upstream operations, exercising rigorous control overthe entire process, from the cultivation of seeds and seedlings of Chinese medicinal herbs to the establishment of planting bases, inorder to guarantee the stability and reliability of the quality of Chinese medicinal materials and thereby lay a solid foundation for thedevelopment of the traditional Chinese medicine industry.

Breed high-quality seedlings. The Company specializes in

breeding high-quality seedlings and selecting core raw materialsfor OTC products, including wild chrysanthemum, gangmei, tridentbitter, two-faced needle and nine miles. Through meticulous seedselection and breeding processes, the Company has cultivatednew varieties such as "999 Huaju" and "999 Huagang." Comparedto traditional varieties. Successfully planted in Hubei, Anhui,Henan, and other regions, the cultivation of these new varietieshas been promoted e?ectively for more than 200,000 mu, resultingin dual improvements in both quality and mu-yield.Standardize the planting of medicinal herbs. Exploring thestandardized planting model for medicinal herbs, we haveled the formulation of several ecological planting technicalstandards and established over 30 standardized plantingbases for Chinese medicinal herbs, covering a planting area

of more than 300,000 mu across China, a total of 13 varietieshave passed the new version of the GAP extended inspection.The Company has developed a traceability system for theproduction and management of Chinese herbal medicinesthat aligns with the national drug informatization traceabilitysystem. This system has been promoted to over a hundredplanting enterprises, enabling full-chain traceability for theproduction of core herbs used in major products such as Coldand Flu Spirit, and fostering a collaborative ecosystem acrossthe upstream, midstream, and downstream segments of thetraditional Chinese medicine industry chain.

CR Sanjiu Wild Chrysanthemum Standardized Planting BasePromote the Intelligent Manufacturing of Traditional Chinese Medicine andImprove Quality

CR Sanjiu focuses on innovation-driven development, accelerating the creation of new, high-quality productivity. The Companyprioritizes the construction of Chinese medicinal herb planting bases and intelligent factories, aiming to transition from traditional"manufacturing" to "intelligent manufacturing" in the planting and production of traditional Chinese medicines. This transformationis intended to improve the quality and safety of Chinese medicine products. CR Sanjiu actively seeks consensus among industrystakeholders, fostering a new ecosystem for the integrated development of Chinese medicine. As a mainstay and integrator, theCompany is dedicated to realizing value management across the entire Chinese medicine industry chain, promoting the inheritanceand innovation of traditional Chinese medicine, and driving its high-quality development.Construction of whole industry chain management. From the 5 aspects of "production, academia, research, medicine, andapplication," we aggregate policy guidance, planting and production, scienti?c research and transformation, and clinical applicationto explore new modes for the traditional Chinese medicine industry. Our aim is to promote new integration and development, and toadvance the "Chinese Medicine Industry Chain High-Quality Development Plan" in a multidimensional manner. Leveraging the entireindustry chain, we concentrate on enhancing its strengths and rectifying its weaknesses.

R&D of innovative Chinese medicine prescriptions. The Company conducts basic research on the Chinese medicine industry chainand key issues, enhances its top-level design capabilities, carries out specialized research on the productivity of new, high-qualityChinese medicines and the development of a wide variety of products, explores the clinical value of Chinese medicines, and engagesin research on Class I new medicines, classical prescriptions, and hospital preparations. Notably, three classical prescriptions—LingGui Jiu Gan Granules, Wen Jing Tang Granules, and Paeonia Radix Glycyrrhizas Sinensis Granules—have been approved for marketing,maintaining the Company's leading position in the industry in terms of the number of approved classical prescriptions.

Participation in Hosting the 11th Chinese Herbal Medicine Base Building and Sharing Exchange Conference

Promote the Brand Culture of Traditional Chinese Medicine and ContinuouslyEnhance the Brand In?uenceCR Sanjiu responds to consumption upgrading, actively spreads the culture of Chinese medicine, strengthens brand building andpromotion, launches the 777 Brand, assists in the high-quality development of the Panax ginseng industry chain, improves consumerawareness and recognition of Chinese medicine, and builds a Chinese medicine brand with international in?uence.Launch innovative products. We upgrade our products

around population, ingredients, packaging and process to fullyoptimize the medication experience and provide consumerswith better quality products.

Exploring marketing models. We have established cross-border partnerships with JD.com and other major onlineplatforms, while concurrently empowering our offline retailcustomers. Together, we have crafted a new industrial valuechain that fuses "Internet, Medicine, and Pharmaceuticals." Ourproducts, 999 Cold & Flu Spirit and 999 Strong Pei Pa Koa Nu,have witnessed significant growth and now lead the pack innew retail channels, particularly O2O.

Upgrade brand communication. We continuously innovateour brand communication strategies by selecting populardramas for print advertisements and content integration,sparking national conversations and debates. We collaboratewith trending variety shows, integrating into diverse scenariosto narrate the product's value. On platforms like Douyin,we implement KOL and short video marketing campaigns,partnering with renowned and high-quality celebrities.Leveraging various trending topics, we effectively conveyproduct bene?ts, enhancing brand awareness and favorability.Additionally, we introduce the brand's cartoon mascot, "UncleSan," the head of the Warm Heart Healing Institute, to generatestrong social engagement and positive communicationmomentum.

Hosting the 777 Brand Launching Session

Deepen research on drug varieties. We partnered with medical institutions and evidence-based medical research entities toundertake evidence-based research on listed Chinese medicinal products, namely Zhengtian Capsule, Ginseng and Forsythia Injection,and Xuesetong Soft Capsule. Our objective was to enrich and enhance the body of evidence-based medical data for these Chinesemedicinal products and continually elevate their competitive edge. Notably, select findings from our evidence-based research onGinseng and Forsythia Injection and Haeseitong Soft Capsule have been featured in prestigious international journals like Critical CareMedicine and JAMA Network Open, earning recognition from our counterparts worldwide.Explore the intelligent manufacturing of traditional Chinese medicine. Leveraging a self-constructed, comprehensive collaborativecloud manufacturing platform tailored for traditional Chinese medicine, the Company manages production tasks, enforcesstandardized operating procedures (SOPs), and ensures business operations are mobile and seamless. At its heart, digital twintechnology powers factory production simulations, intelligent remote operations and maintenance, and other functionalities, therebycrafting a digital platform that is openly accessible, secure, and reliable. As an example, the automation equipment at CR Sanjiu'sGuanlan facility has boosted overall production e?ciency by 20%, trimmed operational costs by 20%, cut energy consumption per unitof output value by 12%, and decreased the ?rst-inspection defect rate by 25%.Strengthen the industrial layout. By emphasizing innovative brands, technologies, and products, we've driven forward multipleM&A integration projects. We're actively engaging with the nation's key strategies to transform traditional industries with new, quality-focused productivity, cultivate new sectors, plan for the future industries, and foster the preservation and advancement of traditionalChinese medicine. Our goal is to support the high-quality development of the traditional Chinese medicine industry chain.Promote the industry chain cooperation. CR Sanjiu actively promotes the establishment of specialized committees focused onintelligent manufacturing, origins, and processing within the sector. Through specialized meetings organized by relevant authorities,industry events, and the development of specialized platforms, CR Sanjiu creates a platform for industrial cooperation and exchangetailored to the traditional Chinese medicine industry chain, which serves to share insights on industry chain construction andfacilitate the formation of industry consensus. By deepening school-enterprise collaborations and enterprise-land partnerships, wecontinuously enhance the competitiveness of the traditional Chinese medicine industry and promote practical and in-depth collectiveaction across the chain.

Green Concept-Driven, Planning Zero-Carbon Park Pathways

When formulating the overall strategic plan for the Near-Zero Carbon Park, the Board of Directors and the EHS Committee of theCompany demonstrated forward-thinking and adaptability, guided by President Xi Jinping's Thought on Ecological Civilization. Weactively aligned with the national Dual Carbon strategy, aiming to establish a near-zero-carbon enterprise that sets benchmarks in theindustry, committed to advancing the "zero-carbon" transformation of the pharmaceutical industry chain, thereby contributing to CRSanjiu's e?orts to achieve the national goals of carbon peaking and carbon neutrality on schedule. Through these initiatives, CR Sanjiuaims to play a pivotal role in the nation's journey towards carbon neutrality.

Near-Zero Carbon Park at CR Sanjiu Guanlan

Near-Zero Carbon Park at CR JiuxinSynergize Industries to Build a Green and Low-Carbon SystemThe industrial synergy has become a powerful engine for green and low-carbon development during the construction of the near-zerocarbon park at CR Sanjiu.

Green Factory Establishment,Highlight the E?ectiveness ofGreen Development

The Company integrates the concept of greendevelopment deeply into its strategic planningand operational management, continuouslyincreasing investment in green technology researchand development, energy conservation, emissionreduction, and resource recycling, aiming to achievegreen upgrades in production and operations. Inthe green factory establishment efforts, CR Sanjiuhas achieved signi?cant results, demonstrating theresponsibility of an industry leader through practicalactions.

State-level green factories:

CR SanjiuCR Sanjiu_(Ya'an)CR HiTechCR JinchanCR Benxi SanyaoCR Sanjiu (Nanchang)

Provincial-level greenfactories:

Shenvang SaniiuCR Sanjiu(Chenzhou)Aonuo PharmaceuticalMunicipal green factories:

CR Saniiu(Zaozhuang)Zhejiang Zhongyi

Feature Story 2Leading Green and Low-Carbon Developmentand Building the Near-Zero Carbon ParkIn the face of frequent extreme weather events and escalating climate change, and during the crucial transition from dual control ofenergy consumption to dual control of carbon emissions, green and low-carbon development stands as the de?ning theme of ourtime. It is an indispensable path for enterprises seeking sustainable growth and a testament to the sense of social responsibility. Asa signi?cant state-controlled pharmaceutical company listed on the stock market, CR Sanjiu is deeply committed to implementingthe national Dual Carbon strategy. The Company actively embraces the era of green and low-carbon development, persistentlyconstructing near-zero-carbon industrial parks and green factories. Furthermore, CR Sanjiu continues to explore the application ofrenewable energy sources, accelerating the transformation of its energy structure towards low/zero-carbon emissions.

"Zero Carbon" energy. We have constructed distributedphotovoltaic power generation projects with a total installedcapacity of 20.1047 MWp, ensuring that solar power is prioritizedfor internal use, with any excess power being connected to the grid.By 2024, these projects are expected to generate 10,784,125 kWh ofgreen energy, of which 92.90% will be utilized for production ando?ce operations within the factory area."Zero Carbon" commuting. We encourage employees toprioritize the purchase of new energy vehicles and embrace low-carbon travel. All commuter shuttles at the Guanlan base andother business units have been replaced with new energy vehicles.Furthermore, the park has been equipped with DC charging pilesto accommodate the charging needs of employees' new energyvehicles and shuttles.Digital "Zero Carbon". An information platform for energy and

carbon asset management has been established. Diagnosesproduction and operation energy utilization and carbon emissionsthrough real-time data monitoring and analysis, generatesthe optimal energy-saving and carbon reduction strategies foroperation. Simultaneously, a carbon emission managementsystem has been put in place to enhance the reward andpunishment system for energy saving and carbon reduction.The Company has integrated system engineering principles,process analysis methods and the concept of cyclic management(planning, implementing, checking, and improving) into its carbonemission management. This approach has established a long-termmechanism for promoting energy e?ciency and carbon reductionwithin the Company.

Promote the experience of building near-zero carbon parks.CR Jiuxin, CR Sanjiu (Chenzhou), CR Sanjiu (Zaozhuang), andother subsidiaries are continuously advancing the constructionof near-zero carbon parks, setting new benchmarks forgreen and low-carbon development in the pharmaceuticalindustry. Notably, CR Jiuxin's near-zero carbon park projectwas successfully included in "the 4th Batch of Pilot Projects forShenzhen's Near-Zero Carbon Emission Zone" in 2024.

Sharing of technical achievements. Sharing of green and low-carbon technological achievements within the near-zero carbon park,for example, within the Guanlan base park, energy operational sites such as photovoltaic power generation, water storage and coolingsystems, and energy storage systems are shared to enhance energy utilization e?ciency. Utilizing the energy and carbon asset managementinformation platform, relevant park business departments can monitor and analyze energy consumption in real-time and allocate energyresources rationally to prevent wastage.Technical exchanges and cooperation. We regularly organize internal and external technical exchanges on energy conservation and carbonreduction to share technologies and experiences pertaining to low-NOx combustion retro?ts for boilers, central air-conditioning upgrades,air compressor enhancements, and waste heat recovery, among others, aiming to collectively elevate the standard of green and low-carbon technologies. Additionally, we collaborate with universities and scienti?c research institutions to foster industry-academia-researchpartnerships, thereby strengthen the research, development, and deployment of innovative green and low-carbon technologies.

Signi?cant establishment AchievementsAs of the end of 2024

Key Performance

About Us

Company Pro?le

Corporate culture

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd. is a large state-controlled pharmaceutical listed company, mainly engagedin the research and development of pharmaceutical products, production, sales and related health services, listed on the ShenzhenStock Exchange on March 9, 2000 (Stock Code: 000999), and formally entered China Resources (Holdings) Co., Ltd. in 2008.With the mission of "Care for Public Health, Create a Better Life Together", the company strengthens independent R&D and innovation,improves the quality control level of its products, provides "Safe, High-quality, High-efficiency and Environmentally Friendly"pharmaceutical products and services for the public, safeguards public health and protects public interests, and further builds anin?uential and sustainable corporate responsibility and ESG brand.

14th Five-Year Plan

Total assets

RMB40,081.97

million

Total pro?t ofRMB4,593.61million

Total revenues

RMB27,616.61

million

Total number of employees

20,031

DNA

? Persist in realizing the great rejuvenation of the

Chinese nation? Pursue creation of a happy life for the people? Strive for the economic prosperity for the countryMission

? Care for public health? Create a better life togetherVision

? Become a leader in the public healthcare industryValue? Integrity Performance-Oriented? People-Oriented Win-Win Collaboration

Spirit? Dedicate oneself to the cause of the country? Be the pioneer in innovations? Forge ahead with perseverance? Fight for the betterAtmosphere? Sincerity Solidarity Open-mindedness Proactivity

Cultural Slogan? Care · Responsibility · Excellence

DNA

MISSION

VALUEVISION

ATMOSPHERESPIRIT

Become a leader in the public pharmaceutical and

healthcare industryStrive to be a top enterprise in the industry

Care for public health, create a better life together

Consumer End (CHC) provide products with excellentexperiences and high-quality services to meet the healthneeds of every family member across the entire cycle ofprevention, healthcare, treatment, and rehabilitation.Consolidate the position as a leading brand

Medical End (Rx) fully leverage the value-creatingcapabilities of traditional Chinese medicine and theadvantages of integrating traditional Chinese andWestern medicine. Focus on core pipelines, enhancehospital brand influence, empower self-diagnosisand treatment businesses, and promote synergisticdevelopment across both ends to achieve deep-rootedand ?ourishing growth.

Innovation andR&D

Whole-industry-chainmanagement oftraditional Chinesemedicine

Digitalization

Mergers andacquisitions integration

Consumercommunication

Academicpromotion

Channel and terminalcontrol

Organizationalcapability

State-ownedenterprisereformFollow thefootprint ofthe Party

Safedevelopment

Organizationalsupport

Strengthenenterprisethroughtalent

Supervisionandregulation

FosterculturaldevelopmentOrganizations

Mission

Vision andGoals

Fields andInitiatives

Capabilities

Business Aress and Products

Brand Blueprint

CR Sanjiu is mainly engaged in the research and development, production, sales and related health services of pharmaceuticalproducts, with its main core business set in the areas of CHC health consumer products and Rx prescription drugs. The Company haswide product coverage and continuous enrichment of product lines and varieties. CHC health consumer products mainly cover coldand ?u, skin, gastrointestinal, cough, orthopedics, pediatrics, dietary supplements and other categories, its core products hold a highmarket share. The Company's prescription drug business covers anti-tumor, cardio-cerebral vascular, digestive system, orthopedics,pediatrics, anti-infective and other therapeutic areas, and it owns Ginseng injections, Mitoxantrone Hydrochloride injections for tracingpurposes, toadstool tablets and injections, Yixuesheng capsules, cefpirome sodium for injection and other prescription drug varieties,enjoying a high reputation at the medical end of the spectrum.In the ?eld of industry chain business group, CR Sanjiu and its subsidiary Kunming Pharmaceutical Group are mutually empoweredand synergistic, making continuous e?orts in the development of the Panax ginseng industry and the brand building of "777" and"1381", and promoting Kunming Pharmaceutical Group to become the No. 1 health stock in silver hair economy.

The Company has successively expanded its brands such as "Tianhe", "Shunfeng", "Aonuo", "Kangwuite", "777", "Kunzhongyao1381", etc. which are well recognized by consumers, and are built into professional brands in the fields of orthopedic plasters,skin medication, children's health, gynecological medication, chronic disease management, and high-quality Chinese medicines,respectively, laying a solid foundation for long-term business development.

CR Sanjiu has strong brand operation capability and has been listed on WPP's annual list of the top 100 most valuable Chinese brandsfor many times. The Company adopts "1+N" brand strategy, with "999" as the main brand, which enjoys high recognition amongconsumers and the pharmaceutical industry and has been honored as "China's Most Recognized Trademark" and "China's MostValuable Brand" for many times.

Organizational Structure

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd.

Industrial ChainBusiness Group

RX Business GroupCHC Business Group

R&D, Production, andFunctional Platforms

Public A?airs CenterHuman Resources CenterFinancial Management CenterProduction Operations CenterProduction Technology CenterR&D CenterTraditional Chinese Medicine ResearchInstituteIntelligence and Digitalization CenterInvestment CenterMarketing DepartmentStrategy and Operations DepartmentEHS Management DepartmentLegal and Compliance DepartmentSecurities A?airs DepartmentParty-Mass Work DepartmentAudit DepartmentDiscipline Inspection CommissionO?ceInspection O?ce

Traditional Chinese MedicineBusiness DivisionPrescription Drug BusinessDivisionInnovative Business DivisionOTC Business DivisionProfessional Brand BusinessDivisionHealth & Wellness (Shenghai)Business DivisionChina Resources Sanjiu (Tangshan) Pharmaceutical Co., Ltd.Aonuo (China) Pharmaceutical Co., Ltd.Anhui China Resources Jinchan Pharmaceutical Co., Ltd.Hefei China Resources Shenlu Pharmaceutical Co., Ltd.China Resources Sanjiu (Ya'an) Pharmaceutical Co., Ltd.Beijing China Resources Gaoke Natural Medicines Co., Ltd.Shenzhen China Resources Jiuxin Pharmaceutical Co., Ltd.Guanlan Production BaseShenzhen Jiuxing Printing & Packaging Group Co., Ltd.China Resources Sanjiu (Huangshi) Pharmaceutical Co., Ltd.China Resources Sanjiu (Chenzhou) Pharmaceutical Co., Ltd.China Resources Sanjiu (Nanchang) Pharmaceutical Co., Ltd.China Resources Sanjiu (Zaozhuang) Pharmaceutical Co., Ltd.Guangdong China Resources Shunfeng Pharmaceutical Co., Ltd.Liaoning China Resources Benxi Third Pharmaceutical Co., Ltd.Guilin China Resources Dahe Pharmaceutical Co., Ltd.Hangzhou China Resources Laotongjun Pharmaceutical Co., Ltd.Jilin Sanjiu Jinfukang Pharmaceutical Co., Ltd.Innovative Drug Research InstituteHealth Drug Research InstituteProcess Technology Research InstituteAdvanced Delivery Technology Research InstituteTraditional Chinese Medicine Resources Research InstituteFuxi LaboratoryDeep Blue LaboratoryWaterdrop Laboratory

Kunming PharmaceuticalGroup Co., Ltd. (600422.SH)

KPC1951 Business DivisionKunming Traditional ChineseMedicine 1381 Business Division777 Business Division (ChinaResources Shenghuo)

? National Enterprise Technology Center? National Key Laboratory for Modernization of Classical Prescriptions in Traditional Chinese Medicine? National-Local Joint Engineering Research Center for Key Technologies of Oral Traditional Chinese Medicine Preparations? National Engineering Research Center for Traditional Chinese Medicine? Key Laboratory for Traditional Chinese Medicine Quality Research and Evaluation? Guangdong Lingnan Medicinal Resources and Modern Traditional Chinese Medicine Manufacturing Innovation Center? Guangdong Small Molecule Drug Innovation Center? Shenzhen Engineering Laboratory for Modernization of Traditional Chinese Medicine and New Drug Creation? Shenzhen Key Laboratory for Quality Control of Traditional Chinese Medicine? Shenzhen Engineering Technology Research and Development Center for Traditional Chinese Medicine Preparation Technology

Become a leading brand in household medications

"1+N" Brand Strategy

Vitamin and mineralsupplements

Traditional Chinesemedicine health productsPediatric productsOrthopedic productsCold and ?u

medicationsGynecological products

Small medicaldevicesGastrointestinalproducts

Anti-fatigue productsDermatological

productsNutritionalsupplements

Liver and gallbladderhealth products

Build leading professional brands

Health ConsumerGoods (CHC) BusinessPrescription Drugs(Rx) Business

Industrial Chain

Business GroupTraditional Chinesemedicine formulagranules

Digestive healthCardiovascular andcerebrovasculardiseasesOncologyOrthopedic

products

Acute andcritical care

Panax notoginseng series products

Kunzhongyao 1381 series

Anti-infectives

BrandBlueprint

Nutritional SupplementsVitamins and mineralsPreventiveOropharyngealPersonal Care

Cold & FluGastrointestinalPediatricsHepatologyTreatmentSkinOrthopedicsGynecology

Chronic DiseaseChinese MedicineHealth

Focus 2024

? Awarded the highest "A" grade ininformation disclosure assessment bythe Shenzhen Stock Exchange for 10consecutive years? Won six honors at the 5th "Panorama

Investor Relations Gold Award"

? Won multiple awards, including"Golden Bull Most ValuableInvestment Award," "GoldenInformation Disclosure Award," and"Top 100 Most Valuable MainboardListed Companies", etc.

? Recognized as "Best Practice for 2023

Annual Report Performance Brie?ng,""Best Practice Case for 2024 ListedCompany Board of Directors," and"Best Practice Case for 2024 ListedCompany Board Secretariat"

? Awarded again as a benchmark in thespecial assessment of outstanding pilotenterprises for "Exemplary Scienti?cReform Actions" by the State-ownedAssets Supervision and AdministrationCommission? Awarded the title of "NationalManufacturing Single ChampionEnterprise" by the Ministry of Industryand Information Technology? Participated in the project "Constructionand Demonstration Application ofthe Theory and Technical System forEcological Planting of Chinese MedicinalHerbs," which won the second prize ofthe National Science and TechnologyProgress Award? Contributed to the research project"New Treatment Principles andE?cacy Evaluation Methods forCommon Functional GastrointestinalDisorders Based on 'Brain-GutCoordination'," which won the ?rstprize of the Beijing Science andTechnology Progress Award? Engaged in the "National ChineseMedicinal Germplasm Resources"project, which won the ?rst prize ofthe Sichuan Science and TechnologyProgress Award

? Involved in the project "Construction

and Promotion of the TechnicalSystem for 'Human Use Experience' inTraditional Chinese Medicine," whichwon the ?rst prize of the GuangdongScience and Technology ProgressAward? Awarded two ?rst prizes in the Scienceand Technology Awards of the ChinaAssociation of Chinese Medicine? O?cially launched the importantinformatization system for intelligentmanufacturing (LIMS)

? Signed a product sales cooperationagreement with China ResourcesBiopharmaceutical? Co-established the "InnovativeDelivery Technology Joint ResearchInstitute" with the Yangtze River DeltaSmart Oasis of Zhejiang University? Initiated cooperation with ChinaResources Power on new energyprojects? Collaborated with Tencent Cloud tolaunch the "Sanjiu Health Manager"intelligent entity? Formed a strategic partnership withDyne Pharmaceutical to jointlypromote Vitamin D drops? Signed a strategic cooperationagreement with China Mobile? Entered into a strategic cooperationagreement with Jiuzhou TongPharmaceutical Group

? The classical formula Wenjing TangGranules has been approved formarket launch? The ?rst product in the ophthalmology?eld, "Sodium Hyaluronate EyeDrops," has been approved for marketlaunch? The internalized medical deviceproduct, "Physiological Saline NasalSpray," has been approved for marketlaunch? Cefoperazone Sodium and SulbactamSodium for Injection, and Ceftazidimeand Avibactam Sodium for Injectionhave been approved for marketlaunch? CR Jiuxin's Cefazolin Sodium Hydratefor Injection has been approved formarket launch in Japan? "Glucosamine Sulfate Capsules" havebeen approved? "Chlorpheniramine Maleate" has beenapproved for market launch? "Oseltamivir Phosphate DrySuspension" has been approved formarket launch

? An ISO international standard fortraditional Chinese medicine has beeno?cially released? Cefpirome Sulfate for Injection(Saibipu?) has been included in theNational Reimbursement Drug List? Obtained the ?rst clinical approvalfor the indication of "carotidatherosclerosis" in the traditionalChinese medicine industry? The new product "Terbina?neHydrochloride Spray" has beenapproved for market launch.? The ?rst classical traditional Chinesemedicine formula, Linggui ZhuganGranules, developed by the company,has been approved for market launch? The classical traditional Chinesemedicine compound preparation,Shaoyao Gancao Granules, has beenapproved for market launch

? The "999" brand has been recognizedas one of the ?rst outstanding productbrands in the central enterprises'brand leadership initiative? The "Sanjiu Weitai" brand has beencerti?ed as one of the ?rst batch of"Guangdong Time-honored Brands"? Listed again in "2024 Cato BrandZ Top100 Most Valuable Chinese Brands"? Listed in the "2024 Guangdong, HongKong and Macao Greater Bay AreaList of Top 100 Most Valuable ChineseBrands"? CR Sanjiu's subsidiary, KunmingPharmaceutical Group, has completedthe acquisition and joined hands withSheng Huo Pharmaceutical to jointlybuild the "777" brand

Capital market recognitionDriving Technological InnovationAdvancing In-depth Development

? Both CR Sanjiu and its subsidiaryKunming Pharmaceutical Group wereawarded the "ESG Golden Bull AwardTop 100" and "ESG Golden Bull AwardCentral Enterprises Top 50" at thesecond Guoxin Cup

? Recognized as a pioneer in ESG

governance with the "ResponsibleWhale Bull Award"

? Ranked ?rst in the Southern Weekend

"2023 Pharmaceutical Corporate SocialResponsibility Research List"? Awarded the "2024 Best Practice Casefor Sustainable Development of ListedCompanies"

? Received the "A-share ESG Value

Award" at the China Listed CompaniesYinghua Awards

? Ranked in the "2024 China Corporate

ESG 100 Index"

? Won the ESG Award of 2024 Shanghai

Securities News Golden Quality Award

? Participated in the editing ofCASS-ESG

6.0 General Framework for Corporate

Sustainability Reporting Guidelines inChina

Promoting SustainableDevelopment TogetherAdvancing In-depth Development

Promoting Brand Development

Governance Framework

CR Sanjiu consistently enhances the sustainable development management system and optimizes its corporate governancestructure. The Company has established a top-down sustainable development and ESG governance framework with clearlydefined responsibilities, involving the Board of Directors, the Management, and the Sustainability Working Group. Thiscollaborative structure drives the Company's sustainable development initiatives and elevates the level of ESG governance.

Sustainability Management

Sustainability andESG concepts

CR Sanjiu is committed to sustainable development and ESG management, guidedby the principle of "creating value for shareholders, providing opportunities foremployees, and assuming responsibility for society." We have effectively integratedthe concept of sustainable development into the overall development strategy ofthe pharmaceutical industry, embedding it across all stages of the product lifecycle,including medicinal herb cultivation, pharmaceutical R&D, and health consumption.While pursuing economic growth, we prioritize safeguarding the legitimate rights andinterests of shareholders and creditors, and maintain fair and honest relationships withcustomers, suppliers, and employees. In our production and operations, we activelypromote green and low-carbon practices, aligning with the "Carbon Peak and CarbonNeutrality" policies by implementing energy-saving and emission-reduction initiatives.Additionally, we are dedicated to charitable and public welfare endeavors, such as ruralrevitalization, community development, and emergency disaster relief. By coordinatingour corporate activities with social and environmental goals, we strive to achieveharmonious and sustainable development for both the Company and society.

Management GuidelinesThe Board of Directors of CR Sanjiu consistently strengthens theoversight of sustainable development and ESG matters, drivingcontinuous improvements in the Company's sustainabledevelopment governance system, ensuring the integration ofESG considerations into the Company's major decision-makingprocesses and business operations.CR Sanjiu established the Management Measures for SocialResponsibility Work of CR Sanjiu, which officially took effectand was implemented in January 2023. The policy applies to allcenters, departments, divisions, and business units within theCompany. In alignment with the policy, CR Sanjiu continuouslyrefines its sustainable development indicator system andenhances performance management, practice communication,report compilation and dissemination, as well as evaluation andassessment within its sustainable development management

framework. In 2024, we revised the CR Sanjiu External DonationManagement System to strengthen the management of externaldonation matters. Additionally, the Company has created anESG section on its o?cial web operational site to disclose ESG-related policies and practices, regularly publish sustainabilityand ESG reports.By 2024, CR Sanjiu have prepared and published socialresponsibility reports for 16 consecutive years, with steadyimprovements in both the "quality" and "quantity". Starting in2022, CR Sanjiu effectively integrated key ESG indicators withCSR indicators, upgrading its original Social ResponsibilityReport to a Sustainable Development Report. In 2023, theSustainable Development Report was further upgraded to aSustainable Development and ESG report.

Statement of the Board

Risk and Opportunity Identi?cation

Evaluation and Assessment

The Board of Directors of CR Sanjiu holds the overall responsibility for sustainable development and ESG-related matters, while theCompany's management is tasked with leading and making decisions on the sustainable development management strategy, as wellas assessing the risks and opportunities associated with the Company's sustainable development. Under the Board of Directors, aSustainability Working Group has been established to implement and follow up on tasks assigned by senior leadership. The PublicA?airs Center is responsible for the daily management and coordination of sustainable development initiatives. Additionally, eachcenter, department, and business unit are accountable for promoting and implementing sustainable development practices at theoperational level.This report provides a detailed disclosure of the progress and e?ectiveness of CR Sanjiu's sustainability and ESG initiatives in 2024.Moving forward, the Board will continue to re?ne and optimize the Company's ESG governance framework.

The Board of Directors, operating within the framework of the existing internal control and risk management system, evaluates therisks and opportunities associated with the Company's ESG factors. It identi?es, oversees, and manages issues and activities related toESG governance to ensure the e?ective implementation of the sustainable development strategy.

CR Sanjiu encourages all subsidiaries to implement sustainabledevelopment and ESG practices in alignment with theirbusiness development needs and resource capabilities. Eachsubsidiary is urged to undertake or participate in relevantresponsibility fulfillment projects based on its specificcircumstances, fostering deeper progress and impact in theseinitiatives.The Board of Directors has established the Remunerationand Evaluation Committee, which is tasked with formulatingand reviewing the remuneration structure and policies forthe directors and senior management of the Company.The remuneration structure for CR Sanjiu's managementteam consists of "basic salary + annual target performance

bonus + equity incentives." We have integrated sustainabilityperformance indicators, such as environmental performance,anti-corruption efforts, and compliance, into our currentincentive remuneration policy. In the event that we failto achieve or underperform against the current year'senvironmental performance appraisal targets, there will be acorresponding deduction in salary. We conduct annual reviewsand evaluations of our senior management's performanceand disclose information on the remuneration of the Board ofDirectors and management in our annual report. For furtherdetails, please refer to the CR Sanjiu 2024 Annual Report.

Sustainabilityand ESG WorkImplementation

CR Sanjiu continuously enhances the sustainable development and ESGimplementation mechanism. Guided by the CR Group's "14th Five-Year Plan" for socialresponsibility, the Company carries out its annual sustainable development and ESGinitiatives, closely integrating its business activities with sustainable developmentmanagement to drive high-quality and sustainable growth.

Board of DirectorsManagement Team

Public A?airs Center

Each DepartmentEach CenterBusiness Divisions

SubordinateBusiness Units

Sustainability Working Group

Stakeholder CommunicationIdentify each important stakeholder of CR Sanjiu, explain the expectations and demands of the stakeholders respectively, as well asthe communication channels and responsible communication actions carried out by CR Sanjiu to respond to the expectations of thestakeholders.

Social Responsibility GalleryCapacity Building

CR Sanjiu organizes annual professional training sessions for the management andall members of the Sustainability Working Group. These sessions aim to reviewthe achievements of the year's sustainable development and ESG managemente?orts, share the latest trends in sustainable development, and discuss industry bestpractices to enhance the Company's sustainable development and ESG managementperformance. Additionally, CR Sanjiu actively participates in domestic and internationalcommunication and exchange activities related to sustainable development. TheCompany also collaborates with partners and social responsibility/ESG researchorganizations to conduct relevant training programs.Key PerformanceDuring 2024CR Sanjiu conducted

dedicated training programs

on sustainable developmentamounting to

training hourswith

participants involved

CommunicationResponse

Communication

Response

Stakeholder

Stakeholder

CommunicationRequirements

CommunicationRequirements

Daily communicationWorking meetings andproject cooperationreporting

Suppliermanagement trainingExchange symposium

Dual-carbon goalImplementingGreen operationRising environmentalawareness

Forum and conferenceWorking groupNetworking event

Community communicationSocial welfare activities

Conduct community serviceactivitiesHealth knowledge promotionImplement rural revitalizationPromoting industry developmentDiscuss business opportunitiesJoint R&DSharing of experienceParticipate in ESG industryexchanges

Respond to climate changeEnergy saving andemission reductionEnvironmental protectionEnvironmental protectionpublicity and education

Compliance managementAnti-corruptionOptimize work?owDeepen project cooperation

Customer satisfaction surveyCustomer relationshipmanagementProduct quality and safetymanagement

Complaints and feedbackTraining activitiesPerformance feedback

Business performanceimprovementMulti-channel communicationGovernance capabilityimprovementProtect the rights and interestsof employeesCaring for employees' lifePromote career developmentImprove democraticcommunication mechanism

Protect reasonable investment returnsEnhance the quality of informationdisclosureMaintain investor relationsHold performance brie?ng sessionsSound media communication channels

Strengthen quality andsafety supervisionExpand big health businessRaise customer satisfactionActively handle customercomplaints

Implement managementrequirementsAssist rural revitalizationBuild ESG/sustainabledevelopment strategyCreate career opportunity

Shareholders/Executives/InvestorsEmployees

Partners

Government/Regulatory Agencies

PeerCompaniesNon-Pro?tOrganizations

Community

Clients

Materiality Issues ManagementCR Sanjiu rigorously adheres to the process of dual materiality assessment, scienti?cally conducts stakeholder questionnaire surveys,and identi?es materiality issues to direct the sustainability management and information disclosure e?orts, thereby better ful?lling theexpectations and demands of stakeholders.

Experts from CR Sanjiu's Finance Department assessed the ?nancial impact of the issues based on the two dimensions of "continuityof access to resources" and "dependence on relationships".

Impact materiality assessment

Finance materiality assessment

? Identification of the continuity of access to resources. Considering the internal and external environments of the Company,analyze whether the Company can sustainably secure relevant capital resources in the short, medium, and long term, taking intoaccount the impact of various ESG material issues.? Analysis of the dependence on relationships. Analyze whether the Company can sustain positive relationships if it fails to adopt

best practices for each material ESG issue.? Finance materiality Analysis. Considering the market price of resources, trend forecasts, the Company's costs in previous years,and non-concessionary revenue factors, we assessed the impact on profits. The Finance Department experts, SustainabilityWorking Group, management, and Board of Directors at CR Sanjiu, among others, successively reviewed and ultimately con?rmedthe agreement. We identi?ed a total of 28 materiality issues, of which 9 issues have a high level of double materiality.

ImportanceNo.Issue

Highly Important

1Product/Service Quality Management2Integrity and Compliance3Create Economic Value4Strengthen Risk Control5Product/Service Accessibility and Inclusiveness6Occupational Health and Safety7Adherence to the Party Leadership8Product/Technology R&D Innovation9Protect Rights and Interests of Customers

More Improtant

10Anti-Corruption and Anti-Bribery11Adherence to Drug Ethics12Assist in Rural Revitalization13Improve Environmental Management System/Environmental Compliance Management14Addressing to Climate Change15Waste/Emissions Management16Saving Energy Consumption17Intellectual Property Protection18Strengthen Sustainable Development System19Optimize Resource Utilization20Advocate Scienti?c and Rational Drug Use21Advocate Responsible Marketing and Consumption22Protect Employee Rights and InterestsGeneral Important

23Promote career development24Protect the Rights and Interests of Small and Medium-sized Investors25Promote Cooperation and Exchange26Promote Industry Development27Promote Supply Chain Responsibility28Biodiversity Conservation

Issue identi?cation

By analyzing standards and policy requirements

for sustainable development management both

domestically and internationally, conducting scientific

industry benchmarking, and integrating the actual

situation and development strategy of the Company, an

issue database comprising 46 topics was established.

Issue prioritization

Based on the survey results of the materiality issues,

we prioritized the issues in terms of the "importance

to business development" and "importance to

stakeholders."

Issue surveyConduct questionnaire surveys on material issuesfor both internal and external stakeholders, includingshareholders/investors, employees, customers,government/regulators, partners, industry peers, media,non-governmental organizations, and the general publicin the community.

Issue reviewThe Company's management, along with externalexperts, reviewed the results of the issue assessmentand finalized 28 materiality issues for key disclosurewithin the report.

CR Sanjiu Sustainability Issues Analysis

Importance to business development

Importance to stakeholders

2024 Sustainability and ESG Report23

Innovation-DrivenPioneering New Fron-tiers with TechnologicalBreakthroughsGovernance

Strategy

SDGs

CR Sanjiu fully recognizes the impact of risks and opportunities relatedto talent, key technologies, and digital and intelligent transformationon business operations. The Company anticipates potential futurefinancial implications and proactively develops risk control andopportunity response strategies. These include improving thescientific and technological innovation system, building digital andintelligent innovation platforms, strengthening breakthroughs in keycore technologies, and recruiting talents specialized in emergingtechnologies. The Company strives to achieve integration, co-creation,joint development, and shared bene?ts.

CR Sanjiu places consumer needs at its core, leveraging theoutstanding pilot enterprises for Exemplary Scienti?c Reform Actions"as an opportunity and focusing on intelligent manufacturing as akey driver. The Company has established a "pyramid" innovationsystem, strengthening innovation R&D and the development of digitalplatforms for intelligent manufacturing. It continues to increaseinvestment in innovation, enhances industry-university-researchcollaboration, and cultivates a team of scientific and technologicaltalents. By building benchmark intelligent manufacturing factoriesand deeply integrating automation with informatization, the Companyaccelerates the implementation and transformation of scientific andtechnological achievements. This drives the digital transformationof its production operations, enhancing production managementcapabilities and operational e?ciency.

Risk and Opportunity Management

Targets

Risk/OpportunityPotential ImpactResponse Strategy

Talents and KeyTechnologies

The biopharmaceutical industry has a robust demand forprofessional talents, particularly highly skilled talents inareas such as research and development, clinical trials, andproduction management. However, the global supply of suchtalents is limited, and the accelerating talent mobility hasresulted in intense competition for talents and the loss of corepersonnel among enterprises. This a?ects the continuity of R&Dprojects and the long-term development of companies.

Seize the opportunity of the science and technologyreform demonstration project to accelerate innovation andtransformation, build an innovative talent managementsystem, introduce artificial intelligence, big data andother emerging technologies to improve the efficiencyand accuracy of research and development. Throughcooperation with international and domestic advancedenterprises and scientific research organizations, acquirecutting-edge technologies and resources, and cultivate andintroduce scienti?c and technological innovation talents.At the same time, we strengthen the internal trainingsystem for enterprise talents, improve the professionalskills of employees, and provide them with good careerdevelopment paths

Digital andIntelligentTransformation

Digital and intelligent technologies complement each otherin the development of biopharmaceutical enterprises. Theapplication of digital and intelligent technologies in theproduction process can realize the automation and finemanagement of the production process, by improving theefficiency of research and development, optimizing theproduction process, enhancing the supply chain management,enterprises can better respond to market competition andregulatory requirements

It is necessary to formulate a long-term digital andintelligent transformation strategy based on technologicaldevelopment and market trends, lay out emergingtechnology fields, optimize the mechanism of scientificresearch and production management work, strengthenthe application of new technologies and new scenarios,enhance the digital coverage of key business segments,cultivate cross-disciplinary and compooperational sitetalents, and accelerate the construction of digital andinformatization systems and platforms.

Type

Medium and Long-term goals

Progress towards 2024 Targets

InnovativeR&D

Efforts will be made tocreate an innovationhighland, strengthen theconstruction of innovationplatforms, and buildnational research platformsand provincial researchplatforms. Strengtheningcooperation betweenindustry, academia andresearch, continuouslyexpand the circle of friendsand innovative cooperationmodels, and continue toimprove independentinnovation capacity throughthe construction of jointlaboratories, technologyplatforms, etc.

Comprehensively promote the construction of R&D and innovation, and rank among the top three in the "ChinaTraditional Chinese Medicine R&D Strength Ranking" in 2024. The speci?c achievements are as follows:

Construction of innovation platforms and organization system: 12 national research platforms have beensuccessfully built, and a perfect innovation organization system has been established, which provides strongsupport for technology research and develotpment, achievement transformation and efficient allocation ofresources.

Optimization of system and mechanism: more than 60 innovation systems and mechanisms have beenformulated and implemented to further optimize the innovation environment and stimulate innovation vitality.

Construction of R&D talent team: the scale of R&D personnel continues to expand, and by 2024, the total numberof R&D personnel reached 876, accounting for 4.37% of the total number of employees.

Invention patents and transformation of achievements: 201 new patent applications and 148 new patents wereauthorized in 2024, with the total number of valid patents held amounting to 1,423, of which the total number ofinvention patents applied to the main business amounted to 617

National awards: It has won national awards for 9 times, among which the project of theConstruction andDemonstration Application of the Theory and Technical System of Ecological Cultivation of Chinese MedicinalMaterials has won the Second Prize of National Scienti?c and Technological Progress in 2024.

R&D progress: the number of projects under research and development exceeds 100 covering the fields ofcardiovascular system, anti-tumor, digestive tract and metabolism, central nervous system, etc.

Improvement of Science, Technology and Innovation Management

CR Sanjiu leads high-quality development through innovation, accelerates the implementation of innovation-driven strategies, buildingupon its previously established innovation strategy, continues to "To Do Docus, Build Capacity" capabilities, focusing on the Company's corestrategy, and consistently increasing investment in innovation to cultivate and develop new forms of productivity.

We strictly abide by theDrug Administration Law of the People'sRepublic of China,thePharmacopoeia of the People's Republicof China, theStatute of the Science and Technology InnovationCommittee, theMeasures for the Management of Scientificand Technological Innovation Projects, and other national lawsand regulations and the relevant systems of the Company , andother national laws and regulations and the relevant systemsof the Company, and continue to optimize the "Pyramid"-

type innovation system, adhere to the "1+7+N" science andtechnology innovation management system centered on"Grasping Project, Strengthening Management, Reviewing,Motivating, and Promoting Transformation", improve the "6E"closed-loop management, promote the exploration of new modesof innovation and development, and form the protection ofinnovation by multiple parties.

A Highland for Innovative Technologies,Leveraging the In?uence of Sanjiu's InnovationAn Open Innovation Organization,Extensively Connecting with External ResourcesThe Vanguard of Innovation,Breaking through Key Focus Areas.The Foundation of Innovation,Ensuring Its Sustainability.Guidance for the Implementation ofInnovation Strategies.

At the pinnacle of the pyramid, the focus is on leveraging keytechnology platforms to strengthen the construction of scienti?c andtechnological innovation platforms, drive the output of innovativeachievements, and amplify the influence of innovation. The bodyof the pyramid establishes an open innovation organization, and aninnovation vanguard team based on the "CD + BD + R&D" model,seizing policy opportunities such as "Healthy China, innovation,

traditional Chinese medicine, and aging population," and formingan innovation "Horse Racing" mechanism to advance breakthroughsin scientific and technological innovation projects. The foundationof the pyramid is supported by an innovation management systemand innovation planning, ensuring the continuous upgradingof innovation management and the sustained improvement ofinnovation quality and e?ciency.

Focus on Innovation and Stable Development

Innovation

CenterInnovationOrganizationResearch Institutes + LaboratoriesInnovation Management SystemCross-Strategic Cycle R&D Planning

Pyramid Innovation SystemPositioning

Cultivate innovative R&D talents

Strengthen the recruitment and cultivation of high-tech innovative talents in R&D and intelligent manufacturing, strengthen the constructionand management of talent pool, fully stimulate the endogenous power of scienti?c and technological innovation through "building a goodplatform + building a good mechanism + using talents", promote the construction of scienti?c and technological talents, focus on cutting-edge medical problems, and dedicate to the research and development of groundbreaking therapeutic programs and medicines.

Construction of scientific and technological innovationplatformsWe cooperate with internal and external organizations to buildnational key laboratories, adheres to the orientation of nationalstrategic needs, aims at efficient output of modern Chinesemedicine products with remarkable advantages in clinicalefficacy and safeguarding people's health, focuses on importantbreakthroughs in the creation of modern Chinese medicines withclassical prescriptions, and provides a technological innovationplatform to support high-quality development.

CR Sanjiu, in collaboration with its business units KunmingPharmaceutical Group, CR Shenghuo, and Kunming ModernChinese Medicine, established Yunnan Panax NotoginsengResearch Institute Co., Ltd. Additionally, it formed the YunnanPanax Notoginseng Industry Innovation Consortium with 36units, including higher education institutions, scientific researchinstitutes, and upstream and downstream enterprises. Taking theYunnan Panax Notoginseng Industry Innovation Consortium as aplatform, the Company submitted 6 research projects related tothe Panax Notoginseng industry to the Yunnan Provincial Scienceand Technology Department for consideration.

Closed-LoopManagement

System forR&D Projects

ProjectInitiation

Execution

EvaluationAudit

Incenti-vization

Review

and PK

Enrichment of Scienti?c and Technological Innovations

We continue to implement the capacity building for "Innovation and R&D", gain insights into the trend-driven opportunities of consumptionupgrading, conduct in-depth research on consumer demands in terms of product functions and usage scenarios, enhance independentinnovation capabilities, accelerate the transformation of innovation results, drive the initiation of new product development projects andachieve breakthroughs in new product approvals, advance the industrialization of the enterprise's scienti?c research results, and continue toenhance the competitiveness of the enterprise's products.

Improve the industrial design work system

Introduced AI tools to solve speci?c business scenario design needs, and the application case was certi?ed by the Ministry of Industry andInformation Technology as an innovative scenario case of "AI-enabled creative design in the ?eld of pharmaceuticals" and shortlisted in the"2024 AI+ Annual List" under the guidance of Cultural Development Center of MIIT. Finalist of Shenzhen Municipal Bureau of Science andTechnology's Shenzhen AI In?uencing Labor Market Best Practice Case Collection. 2024 design achievements won a total of 15 awards, and atotal of 74 domestic and international top design awards. Applied for 5 utility model patents and published 2 design theses in the core journalPackaging Engineering in 2024.

Won the Second Prize of National Science andTechnology Progress AwardWon the Second Prize of Quality Technology ofChina Quality Association

In 2024, Five Utility Model Patents Were Applied For

Two Design Papers Published in Core Journals (Packaging Engineering)

AI Empowers CreativeDesign in Medicine

Shanhuang Hongguo

Ointment

Brick TeaDuide TeaSteeped TeaFoldable Medicine

Bottle

Empathic Thinking in New Retail Service Design for Elderly Recreation ProductsDesign Strategies for Ideal Types and Indications of Pharmaceutical Packaging

Accelerate the transformation of innovation resultsContinuously increase the investment in R&D resources, and continuously explore the optimization of formulas, process innovation, etc. Buildup a complete R&D system to stimulate the momentum of scienti?c and technological innovation and promote the breakthrough of keycore technologies, ensuring the output of high-quality innovation results. Participation in the project of theConstruction and DemonstrationApplication of Ecological Planting Theory and Technical System for Chinese Medicinal Materialsresulted in winning the Second Prize of theNational Science and Technology Progress Award". The two projects of theCreation and Application of the System for Regulating the Liverand the Spleen in Treating Functional Gastrointestinal Diseasesand theConstruction and Application of the System for Identifying andTreating the Pathogenesis of TCM Tumors and Cancerous Toxinswe involved were awarded the ?rst prize of the Science and TechnologyAward of the Chinese Society of Traditional Chinese Medicine. Participation in the project of theApplication of Quality Technology forStandardization and Digital Production of Ginseng and Pineapple Injectionwon the Second Prize of Quality Technology of China QualityAssociation. The patent achievement of theA Kind of Traditional Chinese Medicine for Treating Gas Stagnation and Stomach Pain and itsPreparation Method we declared was awarded the China Patent Excellence Award.

Aonuo Pharmaceuticals established a municipal R&D platformBaoding Industrial Design Center and a municipal R&D platformBaoding National Hi-Tech Zone Vitamins and Minerals DrugPreparation Technology Innovation Center.

CR Shunfeng established a provincial-level R&D platform, theGuangdong Provincial Dermatology Medical Engineering andTechnology Research Center.

Sanjiu Modern Chinese Medicine established a provincial-levelR&D platform Guangdong Provincial Engineering and TechnologyResearch Center for Quality Control and Industrialization of theWhole Industry Chain of Chinese Medicine Formula Granules.

Jointly registered Shenzhen Biomedical Industry Alliance withShenzhen Xinlitai Pharmaceutical, Healthyuan Pharmaceuticaland many other organizations.

R&D Innovations Achieved by 2024

Classical Prescriptions Field3 classical prescriptions have been approved, the number of approved prescriptions is the ?rst in the industry; 3 prescriptions are inthe ?ling stage, the number of accepted prescriptions is leading in the industry. Among them, "Wenjing Tang Granules" was the ?rstone in China and the ?rst one in Guangdong Province to obtain the registration certi?cate of Class 3.1 (in MAH form) and passed thenegotiation of the National Medical Insurance Catalog in 2024, becoming the ?rst gynecological classic formula to pass the nationalnegotiation.Respiratory FieldContinue to enrich the product line in the respiratory ?eld, achieving basic coverage of the Company's products in the cold and?u category. One new product has been approved. The "Oseltamivir Phosphate Dry Suspension" developed by our Company canmeet the clinical medication needs of infants and children who require precise dosing based on their body weight, providing a moreconvenient option for those with dysphagia.Dermatological Field

We have obtained approval for one new product, "Terbina?ne Hydrochloride Spray", making it the second product in China to passthe consistency evaluation, further enriching the Company's product pipeline in the ?eld of skin diseases.

Orthopedics Field

Approved a new product, "Glucosamine Sulfate Capsules" (0.25g - Glucosamine Sulfate or 0.314g - Glucosamine Sulfate SodiumChloride) will be approved by the State Drug Administration for listing.

Ophthalmology Field

Approved a new product, the design of "Sodium Hyaluronate Eye Drops" was carried out, which solved the problems of liquidresidue in the opening and burrs, and made it easier for patients to use.

Anti-infectives Field

we have been continuously optimizing and expanding our product pipeline, developing generics for multiple anti-infectiveproducts. In 2024, 2 new products were approved in this ?eld: Cefoperazone Sodium and Sulbactam Sodium for Injection, as well asCeftazidime and Avibactam Sodium for Injection. Both are compound preparations consisting of third-generation cephalosporinscombined with β-lactamase inhibitors, designed to address the increasingly prominent challenge of drug resistance.

2024 Progress of Key Projects in Generic Drug Consistency Evaluation

Protection of Intellectual Property Rights

In the field of self-diagnosis and treatment, grasping thedevelopment opportunity of the reform of China's OTC registrationand management system, and oriented by consumers' demand,focusing on the core of the pipeline of therapeutic areas ofcold & flu, gastrointestinal, and skin diseases, we strengthenedour position in the CHC market by focusing on advantageouscategories. We focused on the advantageous categories andenriched the self-diagnosis and treatment product line toconsolidate our position in the CHC market.

In the field of prescription drugs, the Company focuses onthe key strategic pipeline, laying out in the therapeutic areasof gastrointestinal, orthopedics, oncology, cardio-cerebral,respiratory and so on. Through product introduction, cooperativedevelopment and self-development, we will continue to increasethe introduction and development of innovative varieties,gradually converge with the CHC pipeline, and realize thesynergistic and orderly development of dual terminal.

We strictly abide by theTrademark Law of the People's Republicof China, theMeasures for the Administration of IntellectualProperty Certificationand other relevant laws and regulations,and formulate special work systems such as theBrand andAuthorization Management System of CR Sanjiu, theBasic Systemof Intellectual Property Management of CR Sanjiu, theMeasuresfor the Administration of Patents of CR Sanjiu, theMeasures forthe Administration of Published Scientific and TechnologicalPapers of CR Sanjiu, theMeasures for the Administration of

Intellectual Property Rights and Counterfeiting Mechanismsandother special work systems, and construct intellectual propertymanagement system focusing on trademark rights and coveringmultiple dimensions such as patents, trade secrets, copyrights,etc., committing to respect and protect its own intellectualproperty rights and those of others. In 2024, the Company did notexperience any major intellectual property infringement that had asigni?cant impact on the Company.

Obtained approvals for generic drugsSubmitted registration declaration

Terbinafine Hydrochloride Spray, Sodium Hyaluronate EyeDrops, Glucosamine Sulfate Capsules, Oseltamivir PhosphateDry Suspension, Cefoperazone Sulbactam Sodium forInjection, Ceftazidime Avibactam Sodium for Injection,enriching the products of dermatology, ophthalmology,orthopedics, respiratory, and anti-infective fields, andenhancing the ability of R&D and innovation.

Loxoprofen Gel Patch, Metronidazole Gel, Cefpirome, CliborolOintment, Adapalene Gel, Vancomycin Hydrochloride forInjection, Mupirocin Ointment, Desloratadine Oral Solution,to enhance the e?ciency of the generic drug declaration, andthe output of innovative products is gradually formed into anechelon, expanding the core pipeline of products.

We actively implement intellectual property protection measures, establish both online and o?ine infringementmonitoring systems, and strengthen intellectual property management by introducing processes for patentproposal applications and scienti?c thesis publication approvals within our Company's OA system. We carry outvarious online and o?ine rights protection activities to uphold the Company's intellectual property rights andform a closed-loop management mechanism for the entire process of intellectual property rights protectionwork.Build aclosed-loopmanagementmechanism.Enhanceintellectualpropertyawareness.

Carry out World Intellectual Property Day promotional activities and provide intellectual property rights trainingmodules in the 2024 legal training and new employee training to enhance employees' awareness of intellectualproperty rights and ensure e?ective protection of intellectual property rights.

Promote Digitization

Accelerated Digital Transformation

Comprehensively implement the new development concept, accelerate digital transformation, strengthen the application scenarios of newtechnologies and new scenarios, and enhance the digital coverage of key business processes. With intelligent manufacturing as the focus ofpromotion, the Company adopts the approach of "Process First → Equipment Automation Upgrade → Information System Integration" to realizethe digital transformation of the Company's production business through the in-depth integration of automation and information, to buildintelligent manufacturing benchmark factories, and to promote the construction of business ecology and transformation and upgrading.

We adhere to the strategy of "Digital Sanjiu", actively implement the development of digital transformation, take the initiative to explore newscenarios and modes of application of new technologies in the pharmaceutical ?eld, promote the construction of industrial digital ecology,and implement a series of initiatives to realize the construction of ecology and transformation and upgrading.

Deepening Transformation for SustainableDevelopment

Cultivate a digitaltechnologyteam.Deepenthe digitaltransformationof ?nance.

Set up a digital technology studio, based on the functions of conducting digital technology seminars, trainingdigital talents, testing digital technology applications, and incubating small-scale digital projects. In 2024, we willbuild the "Digital Technology Studio" to conduct training sessions and technical seminars on digital technology,addressing ?ve key technical challenges, including industrial ring network storms and automatic liquid loading.Carry out the construction of treasury platform, operational analysis platform, budget system and other projectsto realize the online and automated operation analysis and budgeting of the Company as a whole and 80% of themanagement organizations, realize the automatic penetration of the treasury's 2,000,000+ data, improve the standardprocessing and real-time sharing of ?nancial data, and realize the interconnection of ?nancial system data.

Explore Digital EmpowermentPromote the digitization of laboratories. Building intelligent digital laboratories for R&D and production and empower the laboratory'sdaily business processing capability through an information technology system.

We are committed to becoming the leader of intelligent manufacturing mode, standard and technology in the traditional Chinesemedicine industry. Under the overall goal of "the 14th Five-Year Plan" for Intelligent Manufacturing, which is "e?ective operation of theproduction and operation brain to achieve synergy of production and operation and optimization of resources", we have clari?ed thepath of "the 14th Five-Year Plan" for the development of Intelligent Manufacturing. Focusing on key products and production lines, theCompany promotes the leap from "manufacturing" to "intelligent manufacturing" in the production of traditional Chinese medicine.

Promoting Intelligent Manufacturing

Build a quality digitalization system. Establish an information-based quality assurance system centered around QMS to realizeinformation-based management of change management, documentmanagement, measurement management, training management,and supplier management, covering all production points where CRSanjiu is the MAH. In terms of quality supervision, we have achievedthe transformation to a digital supervision model in the creamproduction workshop, establishing digital supervision standards andan atlas of production process parameters to ensure that the entireproduction process is stable, compliant, and controllable.

Build a digital marketing platform. Using emerging technologiesto promote the construction of online business operation and servicesystem, to build an integrated platform system with OMS+ERP+WMSas the core, to enhance the ability to respond quickly to digitalbusiness and improve online business e?ciency. Opened up onlinediversi?ed entrances, improved the "Big Sanjiu" membership system,and launched the Tencent Yuanbao APP and 999 Membership Centermini program in "Uncel San Health Butler" simultaneously to enhancemember services and experience and provide customers with betterservices.

Develop 4 automated equipment and 1 set of centralized control system for automation of pre-processing of manufacturing, automationof pre-processing of pesticide residue, automation of weighing and automation of high-temperature inspection. Carrying out technicalseminars, completing the hardware design and optimization of the system, tackling technical problems, and realizing the automatedoperation of the test methods for Cold and Flu Granules and related raw and auxiliary materials of medicinal herbs.

Development and Manufacture of Automated Inspection Instruments

Through the intelligent sample management system, we carry out the operations of sample warehousing, retrieval, and inventorying,realize the automatic shelving and retrieval as well as information management of laboratory samples, and improve the e?ciency of the QClaboratory.

Construction of Intelligent Sampling Management System

We implement unmanned warehouse management for reagents and test drugs, toxic and explosive substances, and standard substancesthrough the Internet of Things technology, RFID, electronic sensor alarm, and other technologies, enhancing the level of laboratory resourcemanagement.

Construction of Intelligent Resource Management System

Digital Intelligence Technology Upgrade

Enabling Business DevelopmentFocusing on key products, key production lines and core units,CR Sanjiu carries out intelligent manufacturing innovationprojects at the level of technological innovation to create a newscenario of "new technology + pharmaceuticals"; at the level ofbusiness management, it continues to push forward the pilot andpromotion of the construction of business digitalization systems;at the level of production units, it creates intelligent manufacturingbenchmark factories and production lines; improves quality,increases efficiency and reduces costs, and continuously

empowers the business through intelligent manufacturing. Atthe level of business management, we will continue to promotethe pilot and promotion construction of business digitalizationsystem; at the level of production units, we will build intelligentmanufacturing benchmark factories and production lines; andwe will improve quality, increase efficiency and reduce costs,and continue to empower our business through intelligentmanufacturing.

Expansion of Data Acquisition andMonitoring SystemsPromoted the digital upgrading and transformation ofold equipment, realized the full coverage of the numbersets of production workshops and three-dimensionalwarehouses in the ACDE zone, and the networking rate ofkey equipment in the Guanlan base was increased to 92.2%,with a total of 7,099 data points collected. Gradually formdata assets, provide real-time data for MES system batchrecords, support the analysis of quality, process, equipmentoperation and other process parameters, and provide datasupport for workshop lean management, process parameteroptimization, deviation investigation and so on.

IOT Group Control System Expansion

Using AI+IoT technology, the Company has built a "one-screen view" public and auxiliary group control system, whichdeepens the intelligent control scenes of the air pressuresystem and expands the intelligent control scenes of the airconditioning system, realizes the centralized remote controlof the air pressure system and the air conditioning system,and realizes the precise supply of energy, energy saving andconsumption reduction, and the energy-saving rate driven byAI reaches more than 15%.The project has obtained 2 softwarecopyrights, participated in drafting 1 group standard, and wonthe Green Development Enterprise Award 2024 of "DinggeAward" byCaijing Magazine.

CR JiuXin Passed Level 3Assessment of IntelligentManufacturing CapabilityMaturity

CR Benxi Third PharmSelected as LiaoningProvince IntelligentFactory 2024

Shenyang Sanjiu passedthe assessment oftwo-chemical fusionmanagement system

CR Sanjiu was awardedE-works ChinaOutstanding GreenIntelligent Factory

The "IOT AI Cloud Intelligent Control"project was honored with the HarvardBusiness Review's Green DevelopmentEnterprise of the Year Award.

Honor

CR Sanjiu was awardedas a model enterprise fordigital transformation inHuaibei City.

CR Sanjiu (Chenzhou) was assessed as Hunan ProvinceIntelligent Manufacturing Benchmark Enterprise, HunanProvince Green Factory, Hunan Province ManufacturingDigital Transformation Benchmark Project

CR Sanjiu (Zaozhuang) was awarded the second batchof DCMM standardization pilot enterprises in ShandongProvince in 2024, and the "Morning Star Factory" ofdigital economy.

CR Sanjiu (Nanchang) successfully passedthe evaluation and acceptance of 5G+Smart Factory by Nanchang Bureau ofIndustry and Information Technology.

The case of "Intelligent Upgrading of CR Sanjiu's Logistics Decision-making System" was honored as one of the Top 10 PharmaceuticalSupply Chain Technological Innovation Application Cases by ChinaPharmaceutical Business Association.

2024 Sustainability and ESG Report33

Based on the new Internet of Things andInternet technology, the Company innovativelyadopts the interconnection architecture of"Cloud+Net+Edge+End" to build an industrialInternet of Things platform with pharmaceuticalcharacteristics, realizing the industrial datacollection with unified protocol, language andmodel for grouped multi-factories, and hassuccessfully applied it online in one factory.

Implemented architecture governance, facilitated the 'shutdown, suspension, merging, and transformation' of systems, upgradedand optimized national network services, accelerated the IPv6 transformation in line with the '14th Five-Year Plan', achieved costsavings in basic resources while improving service efficiency and quality; and won the first prize in the industry category of the'Blooming Cup' 5G Application Competition hosted by the ICT Academy.

Explore the combination of arti?cial intelligenceand visual recognition technology, appliedto package size inspection in the laboratory,significantly improving quality inspectione?ciency and reducing manual workload.

In the first phase, with the theme of "standardization and specification", the main goal is to realize the standardization and digitization ofintelligent manufacturing infrastructure.In the second phase, with the theme of "integration and collaboration", the main goal is to realize internal and external collaboration amongproduction networks.In the third stage, with the theme of "interoperability and promotion", the main goal is to use knowledge or models for business optimization,and by 2025, the smart manufacturing system will initially achieve ecosystem connectivity, prediction, early warning capabilities, etc.

Clear Development Path

Focus on Ethics of Science and TechnologyWe continue to evolve and keep pace with domestic and international clinical trials for new drug discovery and development and emphasizethe protection of subjects' rights and interests during clinical trials. We strictly follow animal ethics policies and animal protection relatedinitiatives and strive to consistently provide high standards of ethical practice and scienti?c behavior in all trials, and promote responsibleresearch practices and scienti?c progress.

Drug Clinical Trial Management

Adherence to the Ethics of Animal Experiments

All clinical trial projects conducted by CR Sanjiu have purchased drug clinical trial liability insurance for the bene?t of the subjects to ensure theirsafety and rights. Meanwhile, during the screening of subjects, the investigators need to obtain informed consent from the subjects, fully informingthem of the purpose of the trial, the known or possible adverse reactions of the test drug, and ensuring their voluntary participation. If an emergencysafety event occurs during the trial, the researcher will promptly take therapeutic measures to ensure the subjects' safety.

CR Sanjiu animal experiments are entrusted to suppliers quali?ed to conduct animal experiments, and the commissioned research units strictlyabide by theCode of Practice for the Quality Management of Pharmaceutical Clinical Trials, theDeclaration of Helsinki, ICH, and GCP andother principles of medical ethics and relevant clinical regulations, and carry out medical research in accordance with theRegulations on theAdministration of Laboratory Animalsand theRelevant Provisions of the Guiding Opinions on the Kindness of Laboratory Animalsto ensure that thescienti?city, legality and standardization of the research.In accordance with theRegulations on the Administration ofLaboratory Animalsand other relevant regulations, KunmingPharmaceutical Group has set up a Laboratory Animal ManagementCommittee and an Ethical Review Committee, which areresponsible for the unified deployment and quality supervisionand management of the work on laboratory animals. It strengthensthe continuing education and training of practitioners and makeshigher requirements for the disposal of experimental waste andexperimental animal carcasses involving environmental safety, as wellas labor protection and safe operation involving practitioners' ownsafety. The banner "Follow Animal Ethics, Abide by Professional Ethics,Respect Life, Standardize Operation, Safe Production" is prominentlyposted on the wall of the Company's building steps, which practicesthe Company's concept of laboratory animal management.

Laboratory Animal Use License

Self-developed MES System Put into OperationCase

In 2024, CR Sanjiu autonomous MES system completed IO, OQ and PQ validation in Guanlan base and CR Shunfeng. Guanlan pills(Zhengtian Pills: 1 variety and 2 speci?cations), capsules (Cold & Flu Ling Capsules: 1 variety and 1 speci?cation), and Shunfenghealthcare workshop cream (6 varieties and 23 speci?cations) have entered the system online parallel phase, realized 100% EBR,and completed the integration with ERP, WMS, SCADA, IOT system. The system has declared four invention patents (accepted), onesoftware copyright, and the system through the full information technology innovation certi?cation. CR Sanjiu's independent MESsystem has been put into use, the system is positioned as a safe and controllable, streamlined functionality, easy to operate, rapiddeployment, easy to expand the localization of the pharmaceutical MES system. The successful research and development, as wellas the deployment of the system, marks a new stage for CR Sanjiu's production and management modes and serves as a milestonein the Company's digital and intelligent transformation and upgrading.

Cultivate professional team

We continue to strengthen the cultivation of the professional teamof intelligent manufacturing, play the role of Deep Blue Laboratory incoordinating and promoting the work of intelligent manufacturing,plan the construction of the Company's unified platform forproduction and manufacturing, coordinate the project managementof intelligent manufacturing in factories across the country, buildintelligent manufacturing benchmark factories and benchmarkproduction lines, and build intelligent laboratories. Enhance the

knowledge and skills of professionals through D-plan learningactivities, professional seminars and conferences, and professionalcourse training.In 2024, we carried out 32 intelligent manufacturing projects ofvarious types, 16 innovation projects, and continue to improve thecoverage of key businesses.

In 2024we carried out

intelligent manufacturing projects of various types

innovation projects, and continued to improve thecoverage of key businesses.

2024 Sustainability and ESG Report37

Governance with WisdomStrengthen Foundationsfor the CompanyDevelopmentGovernance

Strategy

SDGs

CR Sanjiu thoroughly implements the spirit of President Xi Jinping'simportant directives and guidelines on the reform and developmentof state-owned enterprises and Party construction. The Companyconsistently strengthens the corporate governance foundation,optimizes the corporate governance structure, and reinforces thecomprehensive risk and internal control systems. We continuouslystandardize the "Three Meetings and One Layer" governancemechanism, enhance the Board of Directors' capabilities, anddeveloped a corporate governance framework with statutory rightsand responsibilities, transparency, coordinated operation, and e?ectivechecks and balances, laying a solid foundation for the Company's high-quality development.

CR Sanjiu has established a governance structure with clear positioning,well-de?ned powers and responsibilities, and standardized processes.This structure ensures standardized corporate operations throughinstitutional safeguards, ensuring clarity in their respective rights andresponsibilities in accordance with the responsibilities outlined in the

Articles of Association. Within the framework, the Board of Directors ofCR Sanjiu has overall responsibility for sustainability and ESG relatedmatters, with the Company's management being responsible for theleadership and decision-making of the sustainability managementstrategy, as well as assessing the risks and opportunities associatedwith the Company's sustainable development. Additionally, CR Sanjiuhas developed a compliance management system with a clearerdivision of responsibilities, smoother operational mechanisms, strongercompliance awareness, and more e?ective compliance risk preventionand control. The Company has implemented a standardized andefficiently operated compliance management system that extendsfrom both the headquarter level and the business unit level.

Risk and Opportunity Management

Targets

Risk/OpportunityPotential ImpactResponse Strategy

Market Monopolization andFair Competition Risk

It may affect the layout of corporatecompliance building, brand image, socialtrust and market competitiveness; mayalso have an impact on the ecologicalbalance of the industry and resourceallocation

Establish a correct concept of market competition,set up and enhance a sound anti-monopoly andfair competition compliance management system,improve the internal review mechanism of businesspractices, and standardize business activities.Proactively accept oversight from regulatoryauthorities and society to ensure fairness andimpartiality in market behavior.

Multi-discipline ComplianceRisk

It may expose enterprises to variouscompliance risks, leading to drug qualityissues, legal disputes, financial losses,and reputational harm.

Build and improve a comprehensive compliancemanagement system and establish a specializeddepartment coordinate compliance managemente?orts across all business areas. Enhance employees'compliance awareness and risk preventioncapabilities, fostering a culture of compliancethroughout the Company.

TypeMedium and Long-term TargetsProgress towards 2024 Targets

Corporate Governance

Comprehensively improve the levelof corporate governance,safeguardthe legitimate rights and interests ofshareholders and creditors,and deepenthe Company's good image in the capitalmarket.

Achieve total revenues of RMB 27.617 billion.No major operational risk events occur throughoutthe year

Uphold Integrity, Operate in a Sound MannerCR Sanjiu strictly adheres to the requirements of theCompany Law of the People's Republic of China, the Securities Law of thePeople's Republic of Chinaand other relevant laws and regulations. The Company continuously strengthens the corporate governancemechanism, improves the internal control system and compliance operation management system, and ensures clean and transparentoperations. By building and re?ning a modern enterprise system that embodies both Chinese characteristics and the unique featuresof CR Sanjiu, the Company remains committed to integrity-based governance, coordinated operations, and transparent management,driving the Company toward high-quality development through sound and sustainable operations.Deepening Corporate GovernanceWe comply with relevant national laws and regulations, continuouslyimprove the corporate governance system, and enhance the levelof scientific decision-making. We help the Board of Directors tocontinuously optimize the operational mechanism and improve

operational efficiency; effectively safeguarding the legitimate rightsand interests of all stakeholders and building a good corporate image,laying a solid foundation for the Company's sound and long-termdevelopment.

We continuously optimize the Company's corporate governance structure, improve governance standards, revise theArticles ofAssociation, and enhance the quality and e?ciency of the Company's operations. We consistently strengthen the decision-makingsystem and re?ne authorization management, improve the list of powers and responsibilities, clarify the boundaries and decision-making processes for the "Three Committees and One Layer," and establish a governance structure system with clearly de?ned rolesand responsibilities, comprehensively enhancing the Company's operational e?ciency.

Improving Governance Framework

Shareholders and General MeetingsThe convening procedures,attendee qualifications,and votingprocesses of all previous general meetings of shareholders werein full compliance with theCompany Law of the People's Republicof China,theRules for the Shareholders'Meetings of Listed

Companies,theArticles of Association,and other relevant lawsand regulations. The Company provided internet voting for allmatters under consideration at the general meetings to facilitateshareholders'exercise of their voting rights.Directors and the Board of DirectorsThe election and replacement of directors were conductedin strict accordance with the procedures stipulated in the lawand theArticles of Association. The Directors of the Companyconscientiously and responsibly attended Board of Directors

meetings and general meetings of shareholders, fulfilling theirduties as prescribed in theArticles of Association. The specializedcommittees of the Board of Directors and the IndependentDirectors fully utilized their roles to ensure the objectivity.

Supervisors and the Supervisory BoardSupervisors were elected and replaced in strict compliance withthe procedures speci?ed in the law and the Articles of Association.The Supervisors diligently and conscientiously fulfilled theirduties, attending general meetings of shareholders with a senseof responsibility to shareholders. They also attended Board of

Directors meetings on-operational site, overseeing the decision-making procedures, resolutions, and the Company's operationsin accordance with the law. Additionally, they supervised theCompany's ?nances and ensured the lawful performance of dutiesby the Directors and senior management.

The Board of Directors fully exercises its role in "Setting Strategies, Making Decisions, andPreventing Risks," and has established the Audit Committee, the Remuneration and EvaluationCommittee, the Strategic Investment Committee, the Nomination Committee, as well as theSpecialized Meeting of Independent Directors, to ensure the effectiveness of governance isfully leveraged.

We continuously optimize the structure of the Board of Directors. The Board is characterized by abalanced age distribution and diverse professional backgrounds, integrating multi-dimensionalexpertise in finance, strategic planning, human resources management, and science andtechnology. By focusing on strengthening specialized committees and strictly regulating thedeliberation of proposals, these committees provide professional recommendations to support theBoard's decision-making. The Board, in turn, conducts scienti?c and rigorous analysis and decision-making based on these recommendations, ensuring the scienti?c rigor and e?ciency of decisions.

Key Performance

Extended ReadingFor more information on the dutiesand members of the Board ofDirectors and the General Meet-ing of Shareholders,as well as thespeci?c payment of compensationto Directors and senior manage-ment,please see the CR Sanjiu 2024Annual Report

A total of

independent directorsaccounting for

36.36

%A total

female directorspercentage of female directors on theBoard of Directors is

18.18

%In 2024, there were

numbers ofshareholders' meetings held and

numbers of board of meet-ings heldAmong them,

meetings of theAudit Committee,

meetings ofthe Remuneration Committee,

meetings of the Strategyand Invest-ment Committee and

meetingsof the Nomination Committee wereheld.

Awarded the"2024 Best

Practice Cases of Boardsof Directors of Listed Com-panies" and "2024 BestPractice Cases of BoardO?ces of Listed Com-panies" by China ListedCompanies Association.

Honors and Awards

Board Independence

The Company has established special meetings for Independent Directors,and imple-mented theWorking System of Independent Directors,and revised the rules of procedurefor specialized committees.The performance of independent directors is regularly disclosed through theAnnual Per-formance Report of Independent Directors.Board Expertise

Board members possess relevant industry experience and professional knowledge, bal-ancing professional leadership, innovation drive, and risk control, enhancing the scientif-ic rigor and e?ectiveness of corporate governance.The Company conducts professional training for Directors,Supervisors,and Senior Execu-tives to continuously improve their theoretical knowledge and ability to ful?ll duties.

Board DiversityAdhering to the principle of “Optimal Allocation and Diversification,” the Companyfocuses on aligning Directors’ expertise with its development strategy. Directors are se-lected comprehensively, considering factors such as gender, age group, and occupationalbackground.

Optimization of Shareholding Structure

In accordance with the requirements of theCompany Law of the People's Republicof China,theSecurities Law of the People's Republic of China,and other relevant lawsand regulations,we have established a clear,balanced,and reasonable shareholdingstructure. The Company possesses independent business operations and self-management capabilities,and is independent from the controlling shareholder in termsof business,assets,?nance,personnel and organization from the actual controller andits related parties.. Major decisions of the Company are made by the general meetingof shareholders in compliance with the law,and the controlling shareholders exercisetheir shareholder rights in a standardized manner,without engaging in any actionsdetrimental to the interests of the Company or its shareholders.CR Sanjiu strictly adheres to the Measures for theAdministration of InformationDisclosure by Listed Companies,theWork Guidelines for the Investor RelationsManagement of Listed Companies,and other relevant regulations,continuouslyperforming well in information disclosure. To establish a rigorous and transparentinformation disclosure process and accountability system,we have formulatedtheInvestor Relations Management System and the Information Disclosure AffairsManagement System,aiming to continually improve our disclosures quality. In 2024,werevised theManagement System for Insider Information and Knowledgeable Persons

to strengthen the management of insider information and enhance confidentialitymeasures. Throughout 2024,there were no incidents of the Company being penalizedfor violations of information disclosure regulations.Based on continuous legal and compliance-driven statutory information disclosure, weactively explore and develop voluntary and proactive information disclosure tailoredto investor needs. This approach assists investors in making informed value judgmentsand investment decisions while enhancing the depth and breadth of our disclosures.In response to ESG issues that are of growing concern to investors, we address theconcerns and expectations of various stakeholders through the regular release ofreports and actives such as the "One Chart to Read and Understand" program. Wehave developed a multi-tiered investor relations management system. We hold highquality performance briefing sessions, during which the chairman and managementteam of the Company engage with investors, industry analysts, and media reporters.fully communicating with investors about the Company's operating results, businessdevelopment, commitment to high-quality and sustainable development, as wellas future. By adopting a multi-channel, multi-angle, and multi-level communicationstrategy, the Company has constructed an efficient communication bridge withinvestors to actively conveying the Company's value through diversi?ed channels andforms, such as performance teleconferences, brokerage strategy meetings, investorconsultation hotlines, and the Shenzhen Stock Exchange's interactive e-platform.

Information Disclosure and Investor Relations

Key PerformanceIn 2024

the Company issued

issuance ofregular reports and

interimannouncementsConducted

batches of telecon-ferences on performance of regularreports,quarterly reports and materialmattersAccepted online and o?ine researchand participated in roadshow counterroadshow totaling more than

timesResponded to more than

items on the SZSE interactive platform

Honors and Awards

Obtained the highest grade of "A" from SZSE for 10 consecutive years.

Awarded the "Best Practice of Annual Results Presentation for Listed Companies" by China Association of Listed Companies for3 consecutive years.

Awarded "2023 Best Practices in Investor Relations Management for Listed Companies" by China Association of ListedCompanies in 2024.

CR Sanjiu Sustainable Development and ESG Reportwas awarded ?ve-star rating by the Chinese Academy of Social Sciencesfor 4 consecutive years,and was awarded "Five-star Good" rating for the ?rst time.

AnnualGeneralMeeting

Supervisory

Board

Party CommitteeSteer the direction,oversee the overallsituation, and ensure

implementation

Board of DirectorsSet strategy, make

decisions, andprevent risksManagement TeamPlan operation, ensure

implementation,and strengthenmanagement

Audit CommitteeRemuneration andEvaluation CommitteeStrategic InvestmentCommitteeNomination CommitteeSpecialized Meeting ofIndependent Directors

Optimization of Operations ManagementIn 2024, the Company continued to deepen its "four reinventions,"consolidating its foundation and industry, strengthening R&D andinnovation, promoting mergers and acquisitions and reorganization,steadily advancing integration, and building competitive advantagesacross the entire industry chain. These e?orts led to both qualitative andquantitative growth, steadily improving the company's performance andcapabilities, and enabling the early achievement of the goals set in the"14th Five-Year Plan." During the reporting period, the Company achieved

total revenues of RMB 27.617billion, an increase of 11.63% compared tothe same period in the previous year. The net cash ?ow from operatingactivities reached RMB 4.402 billion, up 5.02% year-on-year. The netpro?t attributable to shareholders of listed companies amounted to RMB

3.368 billion, reflecting an 18.05% increase over the same period last

year. Additionally, the net pro?t attributable to shareholders of the listedcompany, excluding extraordinary gains and losses, was RMB 3.118billion,representing a year-on-year increase of 15.01%.

CR Sanjiu Special Session on "Understanding My Listed Company - Entering the Greater Bay Area"Case

In November 2024,the series of activities titled "Understanding My Listed Company - Entering the Greater Bay Area", jointlyorganized by the CSI Small and Medium Investor Service Center and the Shenzhen Securities Regulatory Bureau,took place inShenzhen. Representatives from the management of CR Sanjiu participated in the event and engaged in discussions and exchangeswith the shareholder observation group,which comprised investors,securities analysts,and ?nancial journalists. On the day of theevent,the shareholder observation group toured the CR Sanjiu Exhibition Center and the Guanlan Factory to gain a comprehensiveunderstanding of the Company's development history,operations,and corporate culture. During the discussion and exchangesession,members of the group exchanged views on CR Sanjiu's business development,strategic planning,shareholder returns,andother pertinent issues. This activity facilitated investors'understanding of CR Sanjiu,aiding the Company in enhancing the level of itsinvestor relations management and fostering a favorable capital market ecosystem.

"Understanding My Listed Company - Entering the Greater Bay Area" Activity

Ensuring Compliance Operation

We actively implement and advanced the requirements of the State-owned Assets Supervision and Administration Commission(SASAC)'s "Year of Deepening Compliance Management",launching special initiatives to optimize the compliance managementsystem. We steadily promote the development of rule-of-law and compliance management,strengthened the system of governing theenterprise in accordance with the law,and actively explored the integrated management system encompassing law,compliance,risk,andinternal control. Additionally,we conduct 100% legal audits of rules and regulations,economic contracts,and important decisions.

Safeguard an Environment of Integrity

We strictly comply with theAnti-Monopoly Law of the People'sRepublic of China, theAnti-Money Laundering Law of thePeople's Republic of China, and other relevant laws andregulations. We adhere to the CR SanjiuCode of BusinessConductand continue to implement theCR Sanjiu IntegrityProvisions, theCR Sanjiu Five Commandments for Compliance

and other systems, with detailed requirements for anti-bribery,anti-corruption, and clean practices. We continuously improvetheCR Sanjiu Provisional Measures for the Management ofConflicts of Interest,CR Sanjiu Measures for the Managementof Connected Transactions,CR Sanjiu Measures for theManagement of Anti-Money Laundering, and other systemsto prevent incidents such as embezzlement, fraud, moneylaundering, monopolistic practices, and unfair competition. In2024, there were no major incidents of corruption involving theCompany or its employees.We require all stakeholders including employees, part-time staff and contractors, suppliers, service providers, andcustomer to strictly adhere to theCode of Business Conductand integrity Systems. To further strengthen our anti-corruptionmanagement efforts for all entities engaging with the Group,we comply with and implement the CR Sanjiu SupplierCodeof Conductwhich mandates that suppliers and other businesspartners commit to adhering to clean business practices andregularly evaluate their business ethics performance.

We routinely conduct business ethics and anti-corruption auditsacross all of the Company's subsidiaries to assess compliancewith theCode of Business Ethicsand anti-corruption policies.Based on the audit findings, we recommend correctiveactions to address any identi?ed issues, ensuring the e?ectiveimplementation of business ethics principles, including anti-corruption and anti-bribery measures.In 2024, we conducted a series of business ethics and anti-corruption training sessions and awareness initiatives for ourBoard of Directors, Supervisory Board, all employees (includinginterns, part-time staff, and contractors), as well as suppliers.Through activities such as Compliance Awareness Month,promotional magazines, posts on our official account, andspecialized o?ine training programs, we fostered a clean andsustainable business environment.We establish and improve the whistle-blower protectionsystem, opening up reporting and complaint channels, whilesimultaneously ensuring that the rights and interests of whistle-blowers are e?ectively protected from infringement. We utilizea combination of "online + offline" and "internal + external"reporting channels, enabling stakeholders to submit reportsanonymously through various avenues. The email address

[e-mail] is publicly accessible, and the

reporting platform "99 'Rules' 1" and WeChat official account"Clean 999" both offer for anonymous reporting. We strictlyenforce the discipline surrounding the reporting process.

Improve the compliance management system. We revised the CR Sanjiu Compliance Management System, establishing acompliance governance structure with clearly de?ned powers and responsibilities and synergistic operations. We optimized compliancemanagement methods for key partners and enhanced the operability and enforceability of system provisions. Furthermore, we revisedthe management methods for compliance ambassadors and compliance o?cers, standardized project operations, and strengthenedthe driving force of the grassroots compliance management organization. A comprehensive legal affairs system has been formed,encompassing theContract Management System, theBasic Management System of Intellectual Property, theLegal Risk ManagementSystem, theLegal Dispute Case Management System, theManagement Measures of Antimonopoly Compliance, and theManagementMeasures of Con?icts-of-Interest Prevention, among others, which has laid a solid foundation for the compliance management system.

Optimize the compliance management system. The in-depth promotion of five key tasks is underway: evaluating thee?ectiveness of the compliance management system, enhancing the compliance management organization, optimizing thecompliance management framework, preventing compliance risks in key areas, and strengthening the support and guaranteefor compliance management. These efforts aim to establish a compliance management system characterized by a clearerdivision of responsibilities, smoother mechanism operation, and a heightened awareness of compliance.

Strengthening compliance publicity and training. For all employees and those in key positions in important areas, weconduct system publicity, system knowledge contests, on-duty examinations for compliance ambassadors, and other forms ofcompliance system and compliance culture promotional activities annually. These e?orts aim to create a positive atmosphereof compliance culture and enhance employees' awareness of red and bottom lines. Additionally, the Company organizes acompliance publicity month for all employees annually and publishes compliance publicity journals every month, which aredistributed to all employees through the Company's work platform.

Conduct Centralized Recti?cationContinuously conduct centralized recti?cation of corruption in the medical ?eld,with a focus on violations of the spirit of the EightRules (on improving Party and government conduct),maintaining high-pressure deterrence to create a strong deterrent e?ect.Carry out special recti?cation e?orts targeting corruption issues in infrastructure projects,bidding and procurement,while alsostrengthen supervision of commercial sales and correcting unethical practices in medical purchasing and marketing.

Key Performanceconcluded litigation case ofcorruption

Conducted corporate warningeducation conferences with47,000

persons/times

52,872 employee persons/timesin anti-corruption training,

160,500

hours of hours of employeeanti-corruption training,achieving a

%training coverage rate.

with an average of

8.01

hours/person

lawsuit involving embezzlement,bribery,extortion,fraud,and laundering of illicit funds

Conducted corporate warningeducation conferences

Manage Con?icts of Interest

Propagate and implement the CR Sanjiu Management Regulations for the Management of Con?icts of Interest, and establish ajoint team for con?ict of interest prevention.Conduct centralized reporting on con?ict-of-interest prevention for important personnel and special campaigns to identify andaddress con?ict of interest issues in the marketing ?eld, e?ectively identifying and resolving potential risks.Continuously carry out supervision work to ensure fairness and transparency in the selection and appointment of cadres, as wellas compliance in their daily behavior.

Enhance Anti-corruption AwarenessConvening a conference on Party conduct and integrity building,as well as two warning education sessions,to fulfill the "tworesponsibilities" of comprehensively strengthening Party discipline.Conduct thematic integrity talks and launching a special class on "Strictly Abiding by the Bottom Line and Integrity in Prctice" atthe training camp for new recruits,guiding management and employees to ?rmly embrace the correct concept that "compliancesafeguards development and integrity creates value."Strengthen the development of new media platforms such as the "Clean 999" WeChat o?cial account and RunYue account and haspublished 158 articles throughout the year on publicity and education to enhance ideal and belief education and warning education.

We explore the in-depth integration of risk and internal control with law and compliance,insisting on risk governance as the focusand risk prevention as the key. We lay a solid foundation for system management in the areas of strategic risk,operational risk,marketrisk,?nancial risk,and compliance risk,and continuously improve and re?ne the construction of our risk and compliance system. Weregularly conduct major risk assessment work,as well as classification,monitoring,and reporting of operational risks,to ensure theCompany's stable and sound operation. In 2024,the Company did not experience any signi?cant operational risk events.The Board of Directors of CR Sanjiu,as the highest decision-making body for the management of the Company's risk control system,isresponsible for promoting and guiding the establishment and e?ective implementation of the risk control system.

Enhance Risk Prevention

We have established the Law and Risk ControlCompliance Committee as the leading body for internalcontrol and risk management, with the Chairman of CRSanjiu serving as its director. The Committee's primaryresponsibilities include promoting the establishmentand oversight of CR Sanjiu's internal control system anddriving continuous improvements in the system.

The Legal Compliance Department of the Company isresponsible for overall planning, coordinating, organizing,and promoting the implementation of various speci?ctasks. The Audit Department is responsible for the internalaudit, supervision, and evaluation of the risk controlsystem of each subsidiary

Riskassessmentand screening

We optimize and improve the risk assessment process, establish and refine the long-term mechanism for

controlling major risks, and e?ciently advance the risk assessment process. We conduct key inspections onthe sales operations of each division, focusing on regulatory hotspots and addressing employee conflictsof interest, procurement bid-rigging risks, and other critical areas. We regularly perform internal controlinspections or special audits of major risks, with a particular focus on the management of productionunits' self-owned business, procurement norms, and production operations, effectively enhancing our riskresponse capabilities. We regularly carry out risk identification and assessment to ensure timely detectionof potential issues and prompt implementation of control measures. In 2024, we developed an annual list ofthe Company's signi?cant risks in strict accordance with the process of information collection, identi?cation,assessment, and response, and formulated risk response plans based on the assessment results. Additionally,we regularly conduct internal control inspections or special audits of our major risk management processes toensure the e?ective operation of our risk management processes.Strengtheninginternal controlconstruction

In accordance with theBasic Standards Internal Control of Enterprisesand its supporting regulations,wecontinuously update and refine the internal control system to create a scientifically designed,concise,andoperating effectively internal control framework. We conduct regular annual projects on internal controlassessment,system review,and optimization to ensure the effectiveness of the design and implementationof the internal control system,achieving improvements in system completeness,standardizedestablishment,process optimization,and full implementation. We have established the InternalControl Compliance Platform (ICCP SYSTEM) to gradually solidify internal control workflows and tooltemplates,enhancing the quality and e?ciency of internal control evaluation.Strengthening

auditsupervision

We formulated a system for applying audit results and managing internal audit institutions and

personnel,established standardized institutional processes,and continued to enhance the application of auditresults. The audit management system was introduced for the ?rst time,e?ectively elevating the level of auditinformatization. We implemented quality control throughout all stages of audit execution to mitigate risksacross all aspects.

Specialized riskprevention and

control

To prevent and control capital risks,we have established a comprehensive capital management

system,including measures such as regular rotation of capital operation positions,separation of incompatiblecapital duties,conducting irregular special inspections of capital risks and capital inventory checks,and capitala?airs inventory to mitigate capital management risks. To prevent anti-monopoly and anti-unfair competitionrisks,we continuously improve the risk prevention mechanisms by continuously monitoring legal risks inrelated fields and carrying out the construction of an anti-monopoly compliance system and conductingspecial inspections.

Craftsmanship and Responsible OperationWith the goal of "Becoming a Leader in the Mass Medicine and Health Industry," CR Sanjiu continues to deepen the construction ofcorporate culture and actively promotes the dissemination of responsible branding. Internally, through a series of initiatives, theCompany continuously enhances employees' pride, sense of belonging, and sense of identity, ensuring that every employee genuinelyfeels the care of the enterprise and recognizes their own value. Externally, through practical actions and communication strategies, CRSanjiu highlights its brand concept and value proposition, demonstrating its commitment to responsibility and brand charisma to allsectors of society.Corporate CultureWe continuously strengthen the construction of corporate culture, implement high-quality cultural programs, in a subtle and in?uentialmanner, integrate the cultural slogan of "Care-Responsibility-Excellence" into the Company's production, operations, and businessdevelopment processes. Showcasing the Company's comprehensive soft power. We have carried out in-depth corporate cultureinitiatives, spreading the culture of CR and CR Sanjiu to stakeholders, fostering internal unity and cohesion, and enhancing the externalimage of CR Sanjiu.

Propaganda ideological and cultural work. Through key quotes

from Xi Jinping's cultural thought,weekly highlights,inheritingred gene culture,and propaganda for thematic education,weeffectively carry out ideological and cultural promotionwork,creating a cultural atmosphere of understanding historyand loving the Party.Corporate culture publicity work. We timely deliver internalnews,cultural responsibility stories,and support high-qualitybusiness development through the official web operationalsite,official social media accounts,OA news,RunYue,elevatordisplays,and other multimedia platforms.

Corporate culture promotion season activities. Centered onthe theme of "Inheriting the Red Gene and Inspiring the Powerto Advance",we conducted the 2024 Corporate Culture PublicitySeason activities. We provided training and empowerment tomore than 70 corporate culture practitioners from headquartersand business units,strengthening organizational cohesion andcentripetal force. Through new employee training camps andbusiness team culture integration, we conducted 15 sessions

of training on the 'History and Culture of China Resourcesand CR Sanjiu'for new employees,covering more than 700employees,promoting the comprehensive implementation ofCR Sanjiu's corporate culture across headquarters and businessunits.Company's annual recognition ceremony. We held the CRSanjiu 2023 Annual Recognition Ceremony, showcasing thepositive and upward spirit of CR Sanjiu employees throughhonorary recognition, fostering a culture of mutual support andhigh e?ciency among employees and the Company, creating anatmosphere of learning from the advanced and excellent, andsupporting high-quality business development.Construction of the new exhibition center project. Wecompleted the construction and opening of the new exhibitioncenter in the Kechuang Building, fully demonstrating theCompany's comprehensive strength and brand image tostakeholders and supporting the Company's high-qualitydevelopment.

The 10

th

CR Sanjiu Corporate Culture Publicity SeasonCR Sanjiu was Honored with Economic Observer's "Most Respected Company Award 2023-2024"

Creating a Brand of ResponsibilityWe adhere to the principle of putting consumers at the core, continuously strengtheningbrand and social responsibility construction, and enhancing brand value and in?uence. TheCompany thoroughly studies and implements President Xi Jinping's important instructionson accelerating the construction of world-class enterprises and the "Three Transformations",fully implements the deployment requirements of the SASAC (State-owned Assets Supervisionand Administration Commission of the State Council) and the China Resources Groupon the "Brand Leadership" action and centered on the Company's "1+N" brand strategy.We continuously improve the brand management system, establish a brand leadershipworking group, increase investment in brand building, optimize systems and processes, andenhance the public opinion management system. Based on in-depth consumer insights, wecontinuously optimize category planning, innovate consumer communication methods, andexpand brand communication channels. By providing high-quality products and services,along with the emotional connection of "Warmth and Care," we have earned the trust andpraise of consumers, achieving sustained growth in brand in?uence.Responsible Brand Communication

Public Opinion Management System

Focusing on consumers' concerns, the Company integrates its brand with concerns andconducts brand communication through comprehensive channels such as advertisements,program sponsorships, short videos, and multi-platform interactions. This ensures that thebrand image of "Warmth and Care" continues to resonate with consumers, winning theirfavor.

The Company continuously strengthens social responsibility efforts across the upstream,midstream, and downstream of the supply chain, fostering a positive interaction betweensocial responsibility and corporate development, and building a responsible brand.

The Company has established the CR Sanjiu Public Opinion and Crisis Management Committeeto ensure orderly public opinion crisis management, comprehensively enhancing the ability toprevent and resolve ideological risks.

The Company strengthens full-coverage public opinion monitoring, e?ectively managing publicopinion monitoring, prevention, control, and specialized response and disposal to ensure ahealthy and controllable overall public opinion environment.

The Company enhances the management of public opinion positions, refines the positionmanagement system and information release process, strictly implements the "Three Reviewsand Three Proofreading System," and strengthens content management and the mainresponsibility of the Company's accounts.

CR Sanjiu was recognizedas "Best Practice Caseof Culture Constructionfor Listed Companies in2024" by China ListedCompanies Associa-

tion,"Top 100 Employ-ee Culture Brands"by China EnterpriseCulture Summit,"Top 10Demonstration Units" byGuangdong EnterpriseCulture Construction,and"Best Practice Unit"by GuangdongEnterprise CultureConstruction.",'BestPractice Unit of EnterpriseCulture Constructionin GuangdongProvince'among otherhonors.

Honors and Awards

Key Performance

Public opinion information in 2024 is dominated by positive and neutral information,accounting for about

99.42

%.

Honors and Awards "999" brand has been recognized as one of the ?rst batch of outstanding achieve-ments in the "Product Brand" category under the Central Enterprises Brand Lead-ership Initiative.Sanjiu Gastro-Therapeutic brand was recognized as one of the first batch of"Guangdong Traditional Brands".CR Sanjiu was listed on the "2024 Cato BrandZ Top 100 Most Valuable ChineseBrands".

CR Sanjiu Responds to Consumption Upgrading and Continues to Improve Brand In?uenceCaseWith the accelerated shift in consumer/patient demand for drugs from traditional channels to online platforms such aspharmaceutical e-commerce in recent years,CR Sanjiu's OTC Department has continuously improved its nationwide channelbusiness system. It has actively explored new marketing models in this evolving environment,engaging in cross-bordercollaborations with major online platforms like JD.com. Simultaneously,it empowers o?ine chain terminal customers,building anew industrial value chain of "Internet + Medicine + Pharmaceuticals",enabling more precise services for patients and enhancesbrand communication e?ciency.

Warming Supplies for Da Ji Da Ling

The Company closely monitors changes in the media environmentand consumer behavior,effectively combining the 999 Brandwith content that resonates with consumers. We continuouslyinnovate brand communication methods to keep the brandyouthful,fashionable,and healthy. For example,the Companycollaborates with popular dramas such as The Rampage, popularmobile games like Game for Peace,and platforms such as Douyin(TikTok) to create trending topics and expand the brand image.Additionally, it has introduced a cartoon brand mascot,"UncleSan", the director of the Warm Heart Cure Institute,tocomprehensively convey the warmth of the 999 Brand. Thisyouthful brand marketing strategy enhances the influence ofthe 999 brand among young consumers,further driving branddevelopment and business growth.

Play a LeadingRole in Political

Construction

Organized 14 "?rst issue" studies and established an implementation record for the "First Topic". The Company formulateda working system and supervision methods for implementing the important instructions and directives of President XiJinping and promoted the construction of the traditional Chinese medicine industry chain and the "deepening of theimplementation of the reform of state-owned enterprises," as well as other key work.

Launched the theme of "Promoting Growth and Winning Strategies" to further enhance the effectiveness of the deepintegration of Party building and business operations.

ImplementIdeologicaland CulturalPropaganda

Earnestly studied and implemented the spirit of the Third Plenary Session of the 20th CPC Central Committee, conducting"central group studies," "three meetings and one lesson," and "thematic preaching" sessions to further understand andinternalize the session's spirit. We deeply studied and understood the spirit, e?ectively translating it into entrepreneurialpractice.

Strengthened theoretical armament and formulated a long-term mechanism to consolidate and expand the results of thethematic education on learning and implementing President Xi Jinping Thought on Socialism with Chinese Characteristicsfor a New Era.

Continuously improved the Company's corporate culture system, incorporating courses with distinctive red culturalcharacteristics into the talent training system and employer brand construction through various measures, promoting thethorough implementation and integration of the red gene.

Emphasized the major theme promotion to consistently build a robust ideological defense.

Strengthen theParty Members'Organization

Built up and strengthened the party's grassroots organizations,adjusting and optimizing the management structure ofthe Party organizations within the Company. The Company also directed 25 Party organizations to renew or add to theirmembership.

Leveraged the pioneering and exemplary leadership of Party members,conducting activities such as the "July 1st" PartyDay themed with "Making Contributions Based on Positions" actively guiding Party members and the masses to strive forexcellence in production and operation.

Deepened the mechanism of "double cultivation and transportation," conducting training courses such as the "CentralEnterprise Cadre Study Class" and "Central Enterprise Party Member Joint Learning Class" to enhance the political qualityand comprehensive abilities of Party members and cadres.

Deepened the construction of the Party building system,sorting out and improving 20 Party building systems,laying theinstitutional foundation for Party building in the new era.

Systematically promoted the cultivation and selection of the Company's Party building brand,formulating the CRSanjiu Party Building Brand Building Work Program (2024-2026) and the CR Sanjiu Party Building Brand Building WorkGuidance Manual,as well as other long-term mechanisms for Party building and brand building,to create attractive andrepresentative characteristic brands.Give Full Play tothe Advantagesof United FrontForces

Did a good job in youth guidance,labor union,and women's work,deepening the project of improving the spiritual qualityenhancement program of young people,and promoting the implementation of democratic management of enterprises,thedevelopment of female workers,and the "I do practical things for the masses" initiative.

Leveraged the advantages of the united front holding the "Rallying Hearts and Strengths for Development,StrivingUnitedly to Write a New Chapter" theme activity,establishing the "CR Sanjiu Think Tank Advice Studio," and setting up the"CR Sanjiu Think Tank Advice Studio." This played a role in pooling wisdom and strengthening ideological and politicalleadership.

Strengthen Party Construction and CompliantOperationCR Sanjiu continuously strengthens Party construction, adheres to the "Two Consistencies," and integrates Party leadership throughoutthe entire process of corporate governance. We fully leverage the central role of the Party organization in guiding direction, managingthe overall situation, and ensuring implementation. The Company continues to promote the integration and mutual reinforcementof Party building and business operations, ensuring the internal unity of its political and economic attributes, and safeguarding theCompany's sound and compliant operations.

Key Performance

The Company has a total of

2,820

Party members, accounting for

14.08

% of the total number of employees.

2024 Sustainability and ESG Report51

Quality EscortNew Quality ProductiveForces PromoteDevelopment

Governance

Strategy

SDGs

During the "14th Five-Year Plan" strategic period, CR Sanjiu hasmade solid progress on the road of striving to be the head enterpriseof the industry, benchmarking against world-class enterprises,improving business layout, expanding the core business to thewhole field of self-diagnosis and treatment, carrying out productquality control. With good experience products and quality services,we will satisfy the health needs of every family member fromprevention-health care-treatment-rehabilitation in the whole cycleand at multiple levels, and drive CR Sanjiu to realize innovativedevelopment and high-quality development.

With the goal of "Building an E?cient and Controllable Group QualityControl Model", CR Sanjiu has deepened the construction of its qualitymanagement system for the entire life cycle of medicines and builta leading quality management system in the traditional Chinesemedicine industry. The Board of Directors, as the highest organizationfor the quality of medicines and accessibility of medicines andhealthcare, oversees and promotes the implementation of related workthrough the Sustainable Development Working Group, and conductsdiscussions, deliberations and adopts improvement plans, programsand key issues related to quality and accessibility risks. The Companyhas developed and implemented a system of quality managementand service management and continues to implement and report onthe progress of drug quality control measures to ensure the quality andsafety of drugs in all aspects.

Risk/OpportunityPotential ImpactResponse Strategy

Risk of Inadequate Quality System

If the quality control system fails toaccurately cover the entire process of rawmaterial procurement, production andprocessing, finished product testing andother processes, it will lead to ?uctuationsin the quality of medicines, affecting thebrand image of the enterprise and markettrust.

Establishment of a full-process qualitymanagement system to realize the wholeprocess of controlling and tracing thequality of medicines, and to producemedicines that instill confidence incustomers and meet their satisfaction.

Risks to Accessibility of Medicines

Fluctuating drug prices affect patients'purchasing power; problems such aspoor supply channels resulting in delaysor shortages in drug supply; insufficientcoverage in remote areas and primaryhealthcare markets limit companies'ability to expand their markets.

Formulate reasonable pricing strategiesto stabilize drug prices; expand diversi?edsales channels to improve the e?ciency ofdrug distribution; expand market coverageto improve drug accessibility

Policy Support Opportunities

Promoting the inheritance and innovationof traditional Chinese medicine has madethe development path clearer, supportingthe development of a modernizedindustrial system for traditional Chinesemedicine, and seizing opportunities willhelp enterprises elevate their status in theindustry.

Focus on opportunities for policy supportand integration of high-quality resources,strengthen quality management, providehigh-quality services, and develop newforms of productivity in traditional Chinesemedicine.

TypeMedium and Long-term TargetsProgress towards 2024 Targets

Quality Management

Our primary goal is to provide safe,healthy, and high-quality products. Werigorously screen product quality at everycrucial stage of the supply chain to ensurethe safety of consumers' medication.

Maintaining a 100% pass rate of drugsampling tests

Client Service

We will substantially improve the customerservice system to enhance consumersatisfaction.

Complaint handling rate 100%, productand service satisfaction 100%

Risk and Opportunity Management

Targets

Control the Source of Medicines, SafeguardHealth

Enhancing Quality Management

CR Sanjiu adheres to the quality philosophy of "Integrity, Sincerity, and Craftsmanship in Pharmaceutical Manufacturing" and continuously improves itsquality management system. Guided by the principles of "Strengthening the System, Controlling Risks, and Digitalization," it exercises strict selection ofraw materials, standardized operations in the production process, and meticulous inspection of finished products. By deepening the quality control of keylinks and the entire lifecycle of pharmaceuticals, CR Sanjiu ensures the safety and quality of its products in an all-round manner, thus consolidating a strongdefense for public health.

We fully implement the primary responsibility for productquality and strictly abide by the laws and regulations such as theLaw of the People's Republic of China on the Administration ofPharmaceuticalsand theRegulations for the Implementation ofthe Law of the People's Republic of China on the Administration

of Pharmaceuticals. We ensure product quality throughout theproduction process and take responsibility for the health of ourcustomers. During the report period, no major safety and qualityliability accidents related to products and services occurred.

We have established the Quality Policy and Objectives Management System, starting from multiple aspects such as quality systemconstruction, digital quality system construction, quality culture construction, and risk prevention, we set and break down objectives annuallyto ensure the implementation of quality responsibilities. We regularly assess the completion of quality objectives by each production unit andconduct evaluations at the end of each year to ensure the achievement of quality objectives. By regularly analyzing and evaluating the qualityinformation and data of each subordinate enterprise and combining it with the on-operational site quality audit evaluation, we supervise thequality management work of each unit and continuously evaluate and assess the completion of quality objectives, promoting continuousimprovement in each subordinate enterprise.We have established the CR Sanjiu Quality Audit Management System to continuously promote the improvement of quality management andprevent quality risks. Each year, professional quality auditors are organized to conduct periodic and special on-operational site quality auditsfor each subordinate enterprise and to continuously follow up on the recti?cation of audit de?ciencies, incorporating the recti?cation statusinto the annual quality management assessment of the enterprise. In 2024, CR Sanjiu has completed quality audits of 25 of its subordinateproduction enterprises, with a total of 59 internal audits conducted and a 100% completion rate for defect recti?cation by each enterprise.

We organize annual sampling and evaluation of products circulating in the market. We conduct regular precautionary testing to evaluate andprevent possible quality and safety problems, further reducing quality risks. Based on the risk assessment of the products, we organized andcompleted annual internal products in-house sampling testing and evaluation of 16 key products in 2024. Each subordinate enterprise carriedout sampling evaluation for 119 listed products, totaling 405 times of internal sampling throughout the year, and the results of samplingevaluation were all in line with the requirements of quality standards, so as to ensure the risks of product quality are controllable.We have constructed the capability for digital quality management and advanced the construction of quality information systems such as QMSand LIMS. We have also established a traceability system for Chinese herbal medicines in production, ensuring the traceability of the sources,destinations, and responsibilities of these medicines. This initiative provides a precedent for the innovative application of full-industry-chaintraceability in traditional Chinese medicine.

Quality management assessment and evaluation:

Quality audit and recti?cation.

Product quality sampling evaluation:

Digital quality control.

Re?ning the Quality System

Promote Quality Culture

We have been continuously improving the construction ofthe full life cycle quality management system, benchmarkingagainst international common rules and world-class enterprisemanagement practices, and implementing initiatives suchas standardization of quality management, risk control, andlaboratory construction, to build an efficient and controllablegroup-based quality management system.We have implemented the relevant requirements of theGuidelinesfor Comprehensive Risk Management of Central Enterprises

issued by the State-owned Assets Supervision and AdministrationCommission (SASAC) and the Basic Standards for Enterprise

Internal Control and its supplementary guidelines issuedjointly by the Ministry of Finance and four other ministries andcommissions, considering the actual situation of CR Sanjiu. Wehave established theCR Sanjiu Quality Risk Management Rulestocontinuously promote the in-depth and orderly progress of qualityrisk management at CR Sanjiu and further enhance our ability toidentify, analyze, and respond to risks. In 2024, we continued touse the annual top ten risk management model for quality riskmanagement, facilitating 24 subordinate production enterprisesor business units to implement risk control work and ensuringcontrollable quality risks.

We have thoroughly implemented the spirit of the 20th NationalCongress of the Communist Party of China, the second andthird plenary sessions of the 20th Central Committee, and therelevant requirements of theOutline of the Construction of aQuality-Powerful Countryissued by the Central Committee ofthe Communist Party of China and the State Council. We haveestablished a quality culture led by leadership and participatedby all employees, continuously promoted the publicity of qualityculture, carried out various forms of cultural publicity, enhancedthe influence, permeability, and coverage of quality culture,improved the quality awareness of all employees, promoted theparticipation of all employees in quality management, and createda good atmosphere for quality culture. We have further elevatedour political consciousness, adhering to the important discoursesof President Jinping Xi on new quality productivity, high-qualitydevelopment, and food and drug safety as our guiding principles.We have earnestly implemented the decisions and plans of theCentral Committee of the Communist Party of China and the State

Council regarding the accelerated construction of a quality-strongcountry. We have firmly established the awareness that qualitycomes first in the minds of all employees and earnestly fulfilledour corporate responsibility for quality. To further strengthen thequality risk awareness of all employees, during the ReportingPeriod, CR Sanjiu has conducted a series of annual quality controltrainings and product safety training to ensure all employees havemastered the core skills of quality control to better ful?ll the qualityrequirements in their daily work. Combined with the businesscharacteristics of CR Sanjiu and the current situation of productquality management, we organized the "Quality Month" activitiesin 2024 for all employees, and widely carried out activities suchas publicity, training and education, quality competitions, qualityand safety inspection, quality improvement, internal and externalexchanges, etc., so as further improve the quality awareness andskills of the whole staff. This helped further improve the qualityawareness and skills of all staff, and continuously elevate thequality level."

Key Performance

During the Report Period, we successfully passed

on-operational site supervision andinspection visits by drug regulatoryauthorities.

724136operational sites have passedthe ISO 9001 certi?cation.

During Report Period, a total of

quality-related standard systemcerti?cations were obtained.

GuanLan Base 2024 "Quality Month"

Organized and carried out quality-themed skill competitions such as identi?cation of Chinese herbal medicines and "Internal Trainer"skill competition to promote further improvement of quality skills.Organized various subordinate enterprises to carry out a special product quality action learning program called 'QualityExcellence' targeting their weak links and improve the quality and safety awareness and ability.The Group and all subsidiaries carried out quality-related safety training for suppliers every year in conjunction with the resultsof supplier audits, analyze defects and explain corrective measures article by article, and provide systematic training on weakmodules to help suppliers make continuous improvements.

Key Performance

132,168

person-times

319,589

hours

coverage of suppliers for annual quality system related training

%

Organized

quality trainings, with a totaltraining duration of

%coverage of annual product quality system related training for employees

Optimizing Services, Protecting HealthCR Sanjiu always places customer needs at the forefront, continuously dedicating e?orts to improving the customer service system.From optimizing consultation and response processes to accelerating after-sales response times, every detail is meticulously attendedto ensure the best possible service, leading to a steady increase in customer satisfaction. The Company focuses on enhancing thesupply and security capabilities of medicines and health services, while actively promoting the development of primary healthcare.This allows more people to conveniently access high-quality medical services, contributing to the improvement of public health andwell-being.Protecting Customer Rights

Information privacy protection

We adhere to theLaw on Protection of Consumer Rightsand fully implement the respect and protection of customers' legal rights. In our dailyoperations, we prioritize the security of customer information and privacy protection, striving to establish a comprehensive defense system. We activelyexpand diversi?ed communication channels, including customer service hotlines, emails, text messages, and social media platforms, ensuring thatevery customer's voice is heard in a timely manner. We have established a robust consumer complaint feedback mechanism to ensure that everycustomer request is handled properly. In terms of service, we aim to provide a "Five-Heart" level of care—reliable, sincere, thoughtful, attentive, andenthusiastic. We integrate care into every detail of customer interaction. By continuously optimizing service processes and improving service quality, westeadily increase customer satisfaction and inject strong momentum into the ongoing improvement of product quality and service standards.

In accordance with theCybersecurity Law of the People's Republic ofChina, the Data Security Law of the People's Republic of China, andother relevant laws and industry standards, we have developed andimplemented policies such as theCR Sanjiu Information SecurityManagement Measures,CR Sanjiu Data Security Management Measures,andCR Sanjiu Data Backup and Disaster Recovery ManagementMeasures. These measures focus on network security protection,data backup and disaster recovery management, and establishingan emergency data security response mechanism, continuouslystrengthening information security and confidentiality management.We built and continuously improve our information security governancestructure and establish the Digital Intelligence Leadership Committeeas the highest decision-making level of CR Sanjiu's information securitymanagement, which consists of the chairman of CR Sanjiu as thedirector, the CIO as the deputy director, and the person in charge ofDigital Intelligence at the headquarters as the executive secretary, tocontinually strengthen the prevention and control of information security

risks and guarantee the effective promotion of information securitywork. The company gradually strengthens the management of securityincident reporting, builds an information security liaison system, andclearly notifies the relevant departments at all levels to timely dispose ofand correct the information security incidents reported by employeesat different levels, so as to strongly safeguard information security.We regularly conduct information security knowledge training foremployees, external partners, and customers through various channels.We strengthen the protection of personal privacy and commercialsecrets, enhance data leak prevention technologies, and safeguard coredata from unauthorized disclosure, providing customers with higher-quality, secure services. In 2024, the Company did not experience anydata security incidents or customer privacy leaks.

Cybersecurity Education of CR SanjiuCaseIn 2024, the headquarters of CR Sanjiu had coordinated and collaborated with various units to carry out types of cybersecurity propaganda and education, with a propaganda reach of more than 10,000 people and a reach rate of about 70%,which includes:

Network security activities:

2024 National Security Awareness Month, Network Security Awareness Week, etc.Network security training:

Special test for phishing emails, new employee training, etc.

After-sales complaint handling

Promoting medication safety

Improving public health literacy

We further strengthen the management of drug safety signal detection,adverse reaction monitoring, label revisions, and GAP (Good AgriculturalPractice) labeling standards. Taking advantage of "International ConsumerRights Day (3·15)," we actively engage with communities to conductmedication safety awareness sessions, continuously educating morestakeholders on the importance of drug safety and promoting safermedication practices.

In response to the national initiative that "everyone is the ?rst responsibleperson for their own health," we leverage our industry advantages toinnovatively create the brand event "Sanjiu Health Day" (March 9th). Incollaboration with partners such as JD Pharmacy, Keep, Hongshan ForestZoo, and chain pharmacies, we organize a series of online and o?ine publicwelfare health activities. These include science popularization lectures,community health check-ups, the "3.9-kilometer Health Walk," and publicwelfare advertisements on escalators, among other initiatives. Throughthese e?orts, we aim to raise public health awareness, promote healthy andcivilized lifestyles, and actively contribute to the development of China'shealth industry.

We have developed the "Customer Complaint ManagementOperating Procedures" to further standardize complaintmanagement measures, covering complaint classification,customer complaint reception procedures, complaint investigationand handling, and response to complaints. This ensures thatcomplaints are handled in a timely and effective manner,

improving the quality and efficiency of complaint resolution.A dedicated customer service hotline, 400-800-0999, has beenestablished to ensure complaints are properly addressed whilealso meeting customers' product inquiry needs. This is part ofour ongoing e?orts to improve the customer service system andenhance consumer satisfaction.

ComplaintReception

ComplaintClassi?cation

ComplaintInvestigation

ComplaintResolution

ComplaintFollow-up

Key Performance

complaints

A total of

were received regarding products and servicesthroughout the year

%The complaint resolution/handling rate was

%Customer service satisfaction reached

CR Sanjiu Customer Complaint Response Process

Implementing Responsible Marketing

We always uphold the core principle of putting consumers ?rst, actively practicing responsible marketing and promotion. Our focusis on fully safeguarding customers' right to know about product information, ensuring high transparency. At the same time, we arecommitted to innovation, exploring and developing new marketing models, and continuously expanding diverse marketing channels.Responsible marketing and compliance promotion. We adhere to expressing advertising content in a truthful, legal, and healthy

manner, strictly prohibiting false or misleading promotions. We fully comply with regulations such as theAdvertising Law of thePeople's Republic of China, Medicinal Product Administration Law of the People's Republic of ChinaandProvisions for Drug InsertSheets and Labels. Our commitment is to be responsible to consumers and all advertising and promotional materials undergoa rigorous pre-approval process to comply with regulatory standards. In marketing and promotional activities, we strictly followcompliance and ethical standards. We have gradually established a mature internal review mechanism for advertising placements andregularly conduct third-party audits of e-commerce platform marketing, advertising, and sales activities. During the Reporting Period,CR Sanjiu did not receive any complaints or legal proceedings about misleading or deceiving consumers by publicity. In order to ensureall employees deeply understand and follow responsible marketing principle, we conduct annual responsible marketing training, weprovide media knowledge and responsible marketing training for all internal marketing sta?, engaging all relevant employees in theseprograms to enhance their professionalism and awareness of responsibility in marketing.

Pharmaceutical Advertising Material Review Process

StrategyProcurementExecution

Production and Utilization of Extensive Materials

Does the Use of Materials Comply with Advertising Regulations?

(Billboards, Templates, Product Placements, H5)

Settlement

& Review

Innovative marketing approaches. By gaining insights into the core needs of consumers, we carry out innovative marketing activitiesacross multiple platforms and channels. Focusing on holiday themes, cross-industry collaborations, and popular program IPs, weimplement integrated online and o?ine marketing strategies. This approach enhances media communication e?ciency, increasescustomer attention, and continuously injects fresh elements and vitality into the Company's brand.

Compliance as a Guardian, Co-Creating a Better Future—The Successful Conclusion of the 2024Compliance Promotion Series by CR Sanjiu

"One Step Faster", a New Paradigm for Innovative Pharmaceutical Brand Marketing

Case

Case

In 2024, with the deepening implementation of policies in the pharmaceutical industry and the continuous upgrading ofcompliance regulations, the Company organized a series of trainings on responsible marketing and advertising practices. Theseinitiatives aimed to enhance the awareness of compliance boundaries and red lines among all employees, standardize marketingpractices, and drive sustainable business development. Additionally, the Company conducted in-depth interpretations of newlyreleased marketing compliance regulations, policies, and case studies monthly. Through its corporate communication platform,the Company regularly distributed compliance promotion journals to all employees.

Dermatophyte takes "Gel for Immediate Itch Relief, One Step Ahead" as its core proposition,focusing on the core demand of "Rapid Itch Relief" for dermatitis sufferers, and relying onthe di?erentiated property of its gel formulation, which provides "Refreshing and Repairing"e?ects, to ensure consistency in brand communication content. On the one hand, it outputshighly relevant creative content centered around the product's uniqueness, conveying brandcommunication points through inducing scenarios such as high-pressure work environmentsand humidity sensitivity, further enhancing brand memorability. On the other hand, it carriesout innovative content marketing targeting opportunity scenarios and segmented audiences.Through scenario-based IPs such as "Green Skin for Summer", it introduces innovative resourceformats, using healing-themed artwork and empathetic insights to close the emotionaldistance with users, accurately targeting the minds of segmented audiences. At the same time,it lays out a social media search strategy, targeting keywords such as "Dermatitis Itching", andcollaborates with high-quality in?uencers and doctors for science popularization, precipitatingbrand assets for Dermatophyte's itch relief among actively searching audiences. It establishesitself as an industry benchmark for long-term growth in multiple dimensions for pharmaceuticalbrands.999 Dermatophyte "Green

Summer" Campaign

Ensuring Drug Safety

We continue to deepen and improve the product lifecycle management system, aiming to "create an e?cient and controllable quality controlmodel." From raw material control, drug production, and warehousing and transportation to product traceability and pharmacovigilance, weintegrate risk management throughout every stage of the product lifecycle. By ensuring the delivery of excellent and safe products, we uphold thefoundation of the Company's survival and development, taking responsibility for public health.

Warehousingand LogisticsWe promote the integration of transportation, centralizing the management of both production logistics andsales logistics. A standardized transportation management process and set of standards are established to

ensure the safety and quality of product transportation.

Drug Traceability

We have built the CR Sanjiu pharmaceutical information traceability system, using ERP, WMS, TMS, OMS, andlogistics decision-support systems to ensure end-to-end traceability of logistics operations. Through the Mashang

Jicha app, we scan traceability codes to track and update product ?ow, ensuring transparency in product information and movement.

EmergencyResponse

The EHS Committee is responsible for handling food and drug safety emergencies. We have established policies andprocedures such as the CR Sanjiu Food and Drug Safety Emergency Response Guidelines and the CR Sanjiu EHSQ

Incident Management Procedures. These guidelines ensure the establishment of a robust mechanism for responding to food and drug safetyemergencies and quality incidents. We provide clear guidance and standardized emergency response procedures to handle quality and safetyemergencies efficiently. This system improves the speed and coordination of emergency responses, effectively controlling the escalation ofincidents, and minimizing personal injuries, property damage, and social impact. Ultimately, we aim to safeguard public drug safety and lifesecurity.

Source Control

We extend the quality management system to the upstream of the supply chain by establishing the "NationalMedicinal Herb Seed and Seedling Base" and "Standardized Medicinal Herb Planting Base." We rigorously

conduct quality audits and dynamic risk management for material suppliers. During the medicinal herb entry process, strictinspection procedures are followed, with strengthened management audits of suppliers. We regularly assess suppliers' plantingenvironments, production processes, and other factors, ensuring the quality of medicinal herbs is tightly controlled from thesource.Drug Production

We increase investment in research and development and continuously improve product quality standards,enhancing internal control standards for materials and products. We establish a technical platform for process

engineering to promote product strength and e?ectively prevent quality and safety risks in contract manufacturing. We ensure thatall subsidiaries strictly implement the responsibilities of the Marketing Authorization Holder for drug quality and safety in contractmanufacturing. This includes strengthening quality supervision and management over contract manufacturers to prevent potentialquality risks.

We have developed theCR Sanjiu Product Recall Management System, which outlines the recall process followingthe identi?cation of adverse drug events. Both the Company and its subsidiaries promptly organize investigations

and evaluations of drug safety risks, and after assessment, a recall plan is formulated. The recall is then implemented, and a summaryreport is generated, along with corrective and preventive actions. We also track the implementation of these actions and assess theire?ectiveness. In addition, we regularly conduct mock recalls to ensure readiness. We have revised theCR Sanjiu Finished ProductReturn and Rework Management Guidelinesto further strengthen the management of returned finished products and reworkprocesses, standardizing the procedure for returning incorrect drugs to the factory. This ensures the quality of supplied medicines ismaintained.

Product Recall

We strictly adhere to regulations such as theMeasures for the Reporting and Monitoring of AdverseDrug ReactionsandSpeci?cations for Pharmacovigilance Quality Management Standards. A Drug

Safety Committee has been established to oversee major risk assessments, respond to signi?cant or urgent drug events,make risk control decisions, and manage other critical pharmacovigilance matters. Additionally, we have set up adedicated Pharmacovigilance Department and appointed specialized pharmacovigilance o?cers. We have established acomprehensive pharmacovigilance system that standardizes activities throughout the entire lifecycle of pharmaceuticalproducts, ensuring the e?ective monitoring, identi?cation, assessment, and control of adverse drug reactions and otherharmful drug-related events. We have also developed a communication mechanism for drug safety issues, minimizing drugsafety risks and protecting and promoting public health.

Pharmacovigilance

Company NameCompany NamePolicy NamePolicy NameCR ShunfengCR ShunfengCR LaotongjunCR LaotongjunCR Sanjiu(Zaozhuang)

Product Recall Management Product Recall ManagementRegulationsRegulationsCR Sanjiu(Yaan)CR Sanjiu(Yaan)

Product Identity Traceability Code Product Identity Traceability CodeManagement RegulationsManagement RegulationsShenyang SanjiuShenyang Sanjiu

Drug Safety Emergency Response Plan Drug Safety Emergency Response PlanManagement RegulationsManagement RegulationsKunming Pharmaceutical GroupKunming Pharmaceutical GroupKunming Pharmaceutical Group (Beike Kunming Pharmaceutical Group (Beikezhejiang)zhejiang)Guanlan BaseGuanlan Base

MAH Drug Safety Emergency Response MAH Drug Safety Emergency ResponsePlan Management MeasuresPlan Management Measures

Key Performance

batches

The number of products recalls due to

health and safety concerns for the year is

with no level 1 or level 2 recall events.Neither the Company nor its subsidiary

manufacturing enterprises experienced

any recalls due to quality issues.

Flowchart

CR Sanjiu Subsidiary Pharmaceutical Safety Management Systems (Partial)

Enhancing Drug AccessibilityWe remain steadfast in our original mission by optimizing productionprocesses and managing costs effectively, ensuring that thepublic can access safe and reliable health products and services ataffordable prices in a timely manner. Through close collaboration

with grassroots medical institutions, we donate medicines andconduct medical training programs to support the widespreadcoverage of healthcare services across all levels of society. By ful?llingour global health commitments, we aim to bene?t more people.Rare disease drug development. We are strengthening independent research and innovation, particularly in the development of "ONC201,"a drug targeting H3K27M-mutant di?use midline glioma (DMG). The drug has already received the Clinical Trial Approval Notice issued by theNational Medical Products Administration (NMPA), marking a signi?cant step forward in improving the prevention and treatment capabilitiesfor rare diseases.

Modern logistics system construction. We are building a robust, specialized, scalable, and integrated logistics system to ensure thesafety, stability, and accessibility of medicines from the supply end. By developing a decision-support system for warehousenetwork planning, we use algorithms to provide real-time, scientifically sound recommendations for warehouse layouts,improving delivery e?ciency. Based on product attributes and production-sales regions, we de?ne warehouse characteristicsand adopt a central warehouse + regional warehouse operational model to achieve multi-warehouse collaboration, enhancinglogistics capabilities and customer service levels. We are advancing integrated transportation systems, o?ering comprehensiveand professional delivery modes such as full truckload, less-than-truckload, and express shipping to meet diverse businessneeds. Additionally, we are building lean and intelligent logistics, exploring ?xed-capacity transportation models, optimizingroutes, and promoting automation in self-managed warehouses to improve delivery efficiency. We continuously refineemergency response mechanisms for logistics operations to ensure timely measures during disruptions, maintaining stablelogistics operations.Fair and reasonable pricing. We strictly adhere to laws and regulations such as theAnti-Monopoly Law of the People's Republicof China and the Guidelines on Strengthening Current Drug Price Management, refraining from interfering with terminal drugprices to protect fair market competition. In accordance with the CR Sanjiu Marketing Department Product Price AdjustmentManagement Rules, we price products differently to ensure patients can access medicines at reasonable and fair prices.Additionally, in different international markets, we establish fair and flexible pricing mechanisms based on local economicconditions and patients' actual needs and payment capacities. We actively respond to national policies, continuously promotingthe inclusion of products in the medical insurance catalog and bene?t people's livelihood with better drug prices. Some drugsare included in medical insurance and centralized purchasing, with tiered pricing based on national regulations, allowingpatients to enjoy varying levels of medical insurance reimbursement for di?erent categories of drugs.Combating counterfeit drugs. We support government e?orts to strictly regulate counterfeit and substandard drugs, protectingthe legal rights of consumers and patients. Through platforms such as "Aichuang Regulatory Code" and "Code for Assurance,"we have established a comprehensive product traceability system to ensure the production and distribution paths of drugsare traceable. We strengthen inspections and verification during label design and usage to reduce the risk of counterfeit,substandard, or mislabeled drugs entering the distribution system.

Overseas expansion initiatives. We actively sign cooperation agreements with countries such as the Czech Republic, Singapore,Canada, Mexico, and Saudi Arabia to promote the establishment of international cooperation platforms. In September 2024,we successfully launched cefazolin sodium pentahydrate and ceftazidime formulations in Japan. We continue to expand ourbusiness in emerging markets, with a licorice root extraction and processing base in Uzbekistan. CR Sanjiu is establishing adiversi?ed sales network in Africa, including subsidiaries and partnerships with local pharmaceutical companies, to broadenour sales channels as much as possible. We assist local supply chains in strictly regulating counterfeit and substandard drugs,ensuring e?cient and stable drug supply to high-demand regions, and providing high-quality, a?ordable antimalarial drugsto populations in high-malaria-prevalence areas. In East Africa, such as Tanzania, we have established sales teams to promoteproducts, while strengthening logistics in West Africa and expanding drug sales in other regions. We actively collaborate withAfrican health ministries and national drug agencies to include drugs in national public health programs through governmentprocurement. We also partner with international organizations such as the World Health Organization (WHO) and The GlobalFund to help countries and communities more e?ectively address malaria and other diseases. During the reporting period, CRSanjiu implemented more than ten national-level foreign assistance projects and foreign aid training programs. Our malariaprevention and control projects were successfully included in the Ministry of Commerce's catalog of exemplary foreign aidtraining programs. We are committed to improving the professional capabilities of management and technical personnel in

Kunming Pharmaceutical Group's Anti-Malaria Drug Aid Project and Foreign Aid Training Session in Uganda

Kunming Pharmaceutical Group Sharing Experiences at the "International Health Development Cooperation and Health Financing Seminar"

and the "Medical Products International Public Market Procurement Exchange Seminar"Anchoring the Silver Hair Economy, Kunming Pharmaceutical Group Strives to Be a Leaderin Health Services

CaseAs a subsidiary of CR Sanjiu, Kunming Pharmaceutical Group has set a new strategic goal of becoming "a leader in the silver hair economy,a pioneer in elderly health and chronic disease management, and a frontrunner in premium traditional Chinese medicine." The Company iscommitted to building a benchmark for the Panax notoginseng (Tianqi) industrial chain and the "Kunzhongyao 1381" premium TCM platform,focusing on the aging population to contribute to the health accessibility of the elderly.In 2024, Kunming Pharmaceutical Group officially launched the "777" brand, marking a new phase in its silver hair economyhealth initiatives and demonstrating its proactive response to the national strategy for addressing population aging. The Companycontinues to increase its R&D investments, focusing on the secondary development of existing botanical drugs and adhering tothe "small yet comprehensive + di?erentiated" R&D strategy. It remains dedicated to therapeutic areas such as cardiovascular andorthopedic diseases. Through a combination of independent R&D, investment and acquisitions, collaborative research, and licensedintroductions, the Company has established an innovative R&D pipeline covering oncology, cardiovascular, metabolic, immune, andorthopedic ?elds. The pipeline includes a wide range of technologies, such as chemical drugs, rare Category 1 TCMs, and Category 2.4improved new drugs with expanded indications.From a production and manufacturing perspective, Kunming Pharmaceutical Group has established a comprehensive quality system, withseven manufacturing platforms that meet national standards, continuously empowering the elderly health industry.

malaria prevention and control in recipient countries, leveraging our professional resources to empower health initiatives in Beltand Road countries and other developing regions. We deliver antimalarial drugs, other medicines, and medical equipment toAfrican countries, providing aid to economically disadvantaged patients and ensuring the health and safety of local patients. In2024, CR Sanjiu participated in artemisinin-based antimalarial drug aid projects in Uganda and other countries. By the end of thereporting period, our antimalarial drugs had reached over 20 African countries, bene?ting millions of patients.

2024 Sustainability and ESG Report65

Low-Carbon LeadershipJointly Creating a GreenHome

Governance

Strategy

SDGs

Guided by Xi Jinping 's Thought on Ecological Civilization, CR Sanjiuadheres to the bottom line of ecological and environmental protectionred lines, actively implements the strategy of building a BeautifulChina, and persists in taking the path of green and low-carbondevelopment. It deeply integrates the concept of green and low-carbon development into the entire life cycle of product research anddevelopment, design, manufacturing, packaging, transportation, use,and waste treatment. It formulates medium and long-term plans forecological and environmental protection, focusing on environmentalrisk control, pollution prevention and control, green and low-carbontransformation, waste recycling, and the e?cient utilization of energyand resources. Through technological upgrading and transformationand management optimization, it continuously promotes the earlyrealization of the goals of green and low-carbon development. Weguide the partners in the industrial chain to jointly participate in theconstruction of a Beautiful China through the supplier performanceassessment mechanism, and continuously build a green ecosystem forsustainable development.

CR Sanjiu has established a top-down environmental governancestructure to ensure the efficient management and supervision ofenvironmental issues. A three-level governance structure has beenformed, consisting of the Board of Directors, the EHS Committee, theEHS Management Department, as well as other departments, businessdivisions, and a?liated enterprises. The Board of Directors serves as thehighest governing decision-making body for Company's environmentalmanagement strategy and performance, who ?nalizing and overseeingthe establishment and implementation of environmental managementpolicy and environmental performance. The EHS Committee serves asthe management level, which responsible for the overall deploymentand coordination of eco-environmental protection, coordinatingand reviewing the major policies and systems as well as the strategicplanning, and reviewing the major risks and opportunities of the eco-environment. The EHS Management Department, other departments,business units, and subsidiaries serve as the execution level,responsible for carrying out the specific work of eco-environmentalprotection.

CR Sanjiu incorporates environmental-related risks into the comprehensive risk management system, using questionnaires and on-operational site interviews to fully identify environmental-issue risks. Risks are classi?ed based on likelihood of occurrence, regulatorycompliance, and consequence severity. Risk control priorities are set according to risk levels and improvement urgency. Control isstrengthened through technological upgrades and management optimization to prevent risks from becoming hazards. Major risks arereviewed by the EHS Committee and then submitted to the Board of Directors for approval. The Company promptly supervises andfollows up the progress of environmental-risk control and reports to the Board. Meanwhile, in response to changes in regulations andpolicies, climate-change risks, market-demand shifts and technological innovation opportunities, the potential impacts are analyzed,and coping strategies are formulated to ensure the e?ective allocation of resources and the smooth realization of management goals.

Risk and Opportunity Management

Risk/OpportunityPotential ImpactResponse Strategy

Changes in Policies andRegulations

New environmental protectionregulations may increase compliancecosts and operational pressure.

Closely monitor regulatory and policy changes,conduct timely compliance evaluations, improverelevant systems, update response strategies, andstrengthen training on policies, regulations, and systemdissemination. Stay updated on policy developments,promptly update compliance measures, and enhanceemployee training.

Climate Change Risks

Extreme weather may a?ect productionoperations and the stability of the supplychain.

Strengthen the identi?cation and control of climaterisks, enhance monitoring and early warning, formulatecontingency plans, conduct employee emergencyresponse training and drills and improve the risk-resistantcapacity of operational sites.

Changes in MarketDemand

Consumers prefer green products more,and market competition intensi?es.

Increase the intensity of research and developmentof green products and enhance the environmentalperformance of products.

Technological InnovationOpportunities

The clean technology revolution bringsopportunities for energy e?ciencybreakthroughs and the appreciation ofcarbon assets.

Invest in and introduce advanced and mature environmentalprotection technologies to promote process upgrades.

Reputation and BrandImpact

Environmental incidents may damagethe enterprise's reputation and a?ectmarket trust.

Integrate environmental responsibility into corporatestrategy, plan environmental protection work from astrategic level, strenathen environmental risk identi?cationand control, eliminate environmental hazards at theirinception, prevent hazards from developing intoenvironmental incidents, and enhance emergencymanagement and public opinion management.

Indicators and TargetTypeMedium- and Long-term TargetsProgress towards 2024 Targets

Environmental ComplianceManagement

Build a full-cycle environmental compliancemanagement system to achieve zeroenvironmental violations and create a model ofcompliance for sustainable development.

The environmental management system has beenimproved, and in 2024, no sudden environmentalincidents occurred. Key pollutant-emitting unitsdid not experience any environmental violationsor non-compliance.

Climate Change Response

Implement the national dual - carbon strategy,carry out energy-saving and carbon-reducingrenovations, continuously reduce greenhouse gasemissions, and dynamically identify and controlclimate change risks

In 2024, the greenhouse gas emission intensitydecreased by 13.58% compared with the previousyear, 46.71% lower than the target value; thegreenhouse gas emissions decreased by 19.65%compared with the previous year

Energy Management

Carry out the low/zero-carbon transformationof the energy structure, strengthen energyinformatization management, improve energyutilization e?ciency, reduce energy consumptionper unit of output value, and promote energyconservation and e?ciency improvement.

In 2024, the comprehensive energy consumptionper 10,000 RMB of output value (at comparableprices) decreased by 8.25% compared with theprevious year, 25.12% lower than the target value;the comprehensive energy consumption per10,000 RMB of added value (at comparable prices)decreased by 10.82% compared with the previousyear, 17.83% lower than the target value

Pollutant Reduction

Continuously reduce the generation and emissionof various pollutants such as wastewater, wastegas, and solid waste to avoid environmentalpollution

The pollutant reduction targets from 2020 to 2024have all been achieved

Resource Recycling

Adhere to the principles of legalization, reduction,recycling, and harmless treatment, maximize theutilization rate of waste resources, and achieve thezero - waste goal

In 2024, the treatment of industrial solid wastewas legal and compliant. The recycling rate ofgeneral industrial solid waste is 96.65%, and thegeneration of hazardous waste was legal andcompliant. The recycling rate of general industrialsolid waste is 96.65%, and the generation ofhazardous waste decreased by 19.93% comparedwith the previous year

Strengthen Control, Advocate Green Development

Robust Environmental Management System

CR Sanjiu complies with theEnvironmental Protection Law of the People's Republic of China,Water Pollution Prevention and ControlLaw of the People's Republic of Chinaand other relevant laws and regulations. The Company actively responds to the strategy of BeautifulChina, supporting high-quality development through a high-quality ecological environment. CR Sanjiu is committed to a green, low-carbondevelopment path and has developed and implemented theChina Resources Sanjiu Ecological Environment Protection Policyand relatedenvironmental management policies. Through a series of measures including improving the environmental management system, strengtheningenvironmental audits, and enhancing pollutant control, the Company has perfected its environmental management system to ensure thatrelevant systems cover all key areas of environmental management.

The Company has always adhered to the original aspiration ofgreen development, integrating environmental protection intoall aspects of its business operations. We actively promote thecerti?cation of the environmental protection management systemand establish and improve scientific, standardized, and efficientenvironmental management processes. By formulating aidconducting comprehensive emergency management policy and

plans, and regularly conducting risk hazard inspections,emergencytraining, and drills. we enhance the environmental risk preventionawareness and emergency response capabilities of all employees.At the end of Reporting Period, 15 subsidiary companies havepassed the ISO 14001 certification, with the certification ratereaching 43%, and 8 subsidiary companies have passed the ISO50001 certi?cation, with the certi?cation rate reaching 23%.

The targets for pollutant and greenhouse gas reductionfrom 2020 to 2024 have all been achieved.

in 2024Number of EHS emergency drills is

Environmental management policies: The Company carries out the formulation and revision of environment-relatedsystem policies which regulates the management of all aspects of environmental protection involved in the Company.Enterprises at all levels under the subordinate companies have articulated the preparation of theProvisions on the Preventionand Control of Wastewater,Waste Gas and Noise Pollutants,Provisions on the Standardized Management of General IndustrialSolid WastandProvisions on the Standardized Management of Dangerous Wasteand other internal policies in accordancewith the system of the Group, relevant laws and regulations, standards, norms and policy documents and in light of their ownreality. Furthermore, CR Sanjiu formulated and conducted theCR Sanjiu Work Plan for Accelerating Green Development andPromoting the Construction of a Beautiful China, CR Sanjiu EHS Annual Assessment and Evaluation Management Measures,and theCR Sanjiu EHS Hazard Source Management Measures in 2024.

Environmental risk control: CR Sanjiu refers to the internationally accepted COSO risk management framework, combineswith our current condition, and built the "Three Lines of Defense" risk management system composed of business units,functional departments such as EHS, internal audit, and discipline inspection and supervision departments, clarifyingthe organizational structure and division of labor for environmental risk management work. The Company formulatedand implemented internal policies such as theCR Sanjiu EHS Hazard Source Management Measures and the CR SanjiuEnvironmental Risk Classi?cation and Grading Evaluation Measuresand carries out risk management work through the "Five-step Method" of risk identi?cation, risk assessment, risk response, risk monitoring, and risk reporting, e?evtively reducing thenegative impact of the Company's production and operation ecological environment and natural resources.

Initiating EHS improvement: CR Sanjiu actively provided assistances to business units with weak EHS performance. We

implemented theImplementation Plan for the EHS Capability Improvement Action of Kunyao Groupand theImplementationPlan for the Three-year EHS Improvement Action of the Sinopharm Business Division, conducted EHS performanceimprovement projects, consolidated the EHS management foundation and improved our EHS management level.

Enhancing emergency response capabilities: The Group has establishedCR Sanjiu Comprehensive Emergency Plan forSudden Environmental Incidents. Subordinate enterprises at all levels, in accordance with relevant policies and regulationsand combined with their current condition, prepare emergency plans for sudden environmental incidents, ?le them with thelocal ecological and environmental department, and regularly conduct emergency plan drills and revision work. During theReporting Period, CR Sanjiu conducted number of 617 EHS emergency drills, with 16,687 EHS emergency drill attendance,which e?ectively improved the ability of emergency personnel to properly handle EHS incidents. This e?ectively improved theability of emergency personnel to appropriately handle EHS accidents and incidents in emergency situations.

Environmental governance structure: CR Sanjiu attaches great importance to ecological and environmental management,

forming a three-tier governance structure of the Board of Directors - EHS Committee - EHS Management Department andother departments, divisions and subsidiaries. The Board of Directors is the decision-making level, the EHS Committee is themanagement level, and the EHS Management Department and other departments, business units and subsidiaries are theexecutive level. CRC Sanjiu headquarters and each business unit sign an EHS responsibility letter at the beginning of eachyear, in which specific management objectives for energy saving and environmental protection, pollution reduction andcarbon reduction, production safety, occupational health, etc. are defined, relevant data are dynamically monitored, andperformance assessment is carried out at the end of the year.

Conducting environmental protection training: To improve the professional skills of environmental protection

management personnel, the Group has organized 135 times environmental protection trainings in 2024. Subordinateenterprises at all levels participated 8 times relevant trainings organized by the Ministry of Ecology and CR Sanjiu.Furthermore, A total of 192 employees have been organized to participate in the Group's eco-environmental protectionprofessional competence training and certi?cation for the main person in charge of enterprises at all levels, EHS leaders incharge and environmental protection managers.

Environmental Audit Conduction

In order to e?ectively improve the level of environmental protection management, comprehensively identify and control various typesof environmental risks, we continue to strengthen the internal and external environmental audits, ?nd hidden environmental risks,environmental management shortcomings and environmental protection facilities, constantly analyze and summarize, innovate thework methodology, implement classi?ed and hierarchical control of environmental risks identi?ed by environmental audits, and usethe EHS information management system to achieve closed-loop tracking of recti?cation and correction of the hidden risks.

Formulate an environmental audit system. To standardize environmental compliance evaluation and potential hazard

investigation, CR Sanjiu has formulated an environmental audit system and adheres toCR Sanjiu EHS Supervision andManagement Measures, CR Sanjiu EHS Hazard Source Management Measures. It classi?es and manages environmental risks inaccordance with theMeasures for Classifying and Grading Environmental Risk Assessment Environmental Risk Classi?cation andGrading Evaluation Methodology. Additionally, subsidiaries and business units have formulated supporting regulations, includingtheEHS Management Compliance Evaluation System and the EHS Hidden Risk Investigation and Remediation System.

Internal environmental audit. CR Sanjiu organizes and carries out EHS audit every year with the production safety monthas an opportunity. In 2024, our internal environmental audit has covered 100% of the production-oriented subsidiaries.Regarding emergency management for unexpected environmental events, safety operation management of environmentalprotection equipment and facilities, solid waste, energy-saving and environmental protection quali?cations, and compliancemanagement of pollution source automatic monitoring. During the Reporting Period, CR Sanjiu has conducted 5 timesinternal audits on environmental compliance management and other aspect. Additionally, CR Sanjiu organized environmentalremediation actions and warning education for enterprises located in the second and third batches of the third round of thecentral environmental protection inspection regions. CR Sanjiu also statistically analyzed the use of environmental protectionequipments and automatic monitoring equipments at all levels of enterprises to ensure the safe and stable operation ofequipment. In 2024, subsidiaries organized 339 environmental protection inspections at all levels to proactively prevent andresolve various environmental risks and hazards..

External environmental audit. In 2024, CRSanjiu's subsidiaries at all levels conducted externalenvironmental audits, including commissioningthird parties to carry out environmental hazardinvestigations, compliance evaluations, and pollutanttesting. These audits also supported inspections ofautomatic monitoring equipment and the operationand maintenance of environmental protection facilities,as well as government-led clean production audits,greenhouse gas emission report veri?cations organizedby environmental authorities, and both online andoffline environmental protection inspections. At theend of Reporting Period, 18 subsidiary enterprises hadconducted clean production audits, 12 of which werecarried out voluntarily.

Improve environmental protection management forconstruction projects. CR Sanjiu enhances environmentalmanagement for construction projects by improving relevantmanagement systems. It speci?es that new, renovation, andexpansion projects must undergo environmental analysis,risk assessment, and environmental impact evaluation, andobtain approval for the environmental impact assessment(EIA). During the implementation of all projects, "threesimultaneous" management is enforced, ensuring strictadherence to pollution prevention and control measuresoutlined in the EIA and its approval documents. Additionally,environmental protection testing, acceptance, and filingare carried out upon project completion, and all requiredquali?cations, licenses, and documentation are obtained inaccordance with legal regulations, ensuring they remain validduring the project's lifetime.

Water Resource ManagementWater is the source of life and an important resource for the sustainable development of enterprises. We attach great importance tothe protection and rational utilization of water resources and have established a sound water resource management system. Throughmeasures such as reducing the consumption of fresh water, regulating process water use, and promoting the recycling of reclaimedwater and cooling water, we improve the reuse rate of water resources. During the Reporting Period, CR Sanjiu achieved buring theReporting Period, CR Sanjiu achieved all the Water resource management targets.Targets and Achievements of CR Sanjiu's Water Use E?ciency Indicators from 2020 to 2024NumberIndicator Name

??????YearIndicator

20202021202220232024

Change fromthe previousyear in 2024

The Rules for Target-settingDuring the "14th Five-Year

Plan" Period

Fresh WaterConsumptionper 10,000 RMBof Output Value(at ComparablePrices)

Actual Value (tons/RMB 10,000)

2.46682.16632.26572.60822.3854

Reduce

8.54%

Based on 2020 as thebenchmark, it decreasingby 2% annually - (Thebaseline value of KunmingPharmaceutical Group hasbeen incorporated in 2023)Target Value (tons/RMB 10,000)

2.46682.41752.36812.75472.7263

Whether the Target isAchieved

N/AYesYesYesYes

Industrial WaterReuse Rate

Actual Value (%)??66.06%83.11%85.89%

Increase

3.33%.

Based on 2022 as thebenchmark, it increasesby 1% year -by-year (Thebenchmark value ofKunming PharmaceuticalGroup has beenincorporated in 2023)Target Value (%)??66.06%67.38%68.70%Whether the Target isAchieved

??N/AYesYesRemarks:

When there are changes in the production scale and quantity of enterprises included in the statistics, the target values of the indicators canbe adjusted accordingly.In 2023, as Kunming Pharmaceutical Group has been included in the statistical scope, after incorporating the benchmark value of Kunming

Pharmaceutical Group, the corresponding target values of the indicators have been adjusted accordingly.

FormulateEnvironmentalProtectionPolicies andStrengthenResourceManagement.

The Group has formulated management measures such as the CR Sanjiu Energy and Resource ConservationManagement Measures and the CR Sanjiu Energy Conservation and Ecological Environmental ProtectionSupervision and Management Measuresto guide the water resource management work. Multiple measuresare taken to reduce resource consumption. Various measures have been adopted to reduce the consumptionof resources, encourage consumption, and require enterprises at all levels to reduce the amount of freshwater and enhance the reuse rate of industrial water through a number of measures such as upgrading water-using equipment, regulating the use of water for processes, strengthening the maintenance of water-usingequipment, and implementing the recycling of water and condensate, At the same time, employees areencouraged to develop good habits of resource conservation, fostering a strong corporate culture focused onresource savings.Sign EHSLiabilityAgreementsand ImplementAssessmentMechanism.

According to the CR Sanjiu EHS Target and Responsibility Management Measures, at the beginning of each

year, the Group signs EHS liability agreements with each business unit. The water use efficiency targetsare decomposed and issued to each business unit. At the end of Reporting Period, performance appraisalsare carried out on each unit in accordance with the EHS liability agreements. According to theCR SanjiuEHS Commendation and Reward Plan, units and individuals that have achieved outstanding results in EHSmanagement, including water management, are commended.Track theAchievementof Targets andImprove WaterUse E?ciency.

The water use efficiency indicators are statistically analyzed on a quarterly basis. Business units are then

guided to implement technical and management measures to strengthen water usage management, minimizefresh water consumption, increase the reuse rate, and ensure the achievement of the targets.

Pollutant Prevention

CR Sanjiu strictly adheres to laws and regulations such as the Environmental

Protection Law of the People's Republic of China, theLaw of the People's Republic of China on PreventionandControl of Air Pollutionandthe Law of the People's Republic of Chinaon PreventionandControl of Water Pollution,and has formulated and issued theChina Resources Sanjiu Pollutant Preventionand Control Management Measures, theCR Sanjiu Energy Conservation and Ecological Environmental Protection Supervision andManagement Measuresother systems to guide and standardize the pollutant prevention and control work of enterprises at all levels,aiming to control and reduce wastewater, waste gas, industrial solid waste, noise, and new pollutants emission. We strictly monitorthe emissions of various pollutants, continuously optimizing production processes to achieve source control. We adopt advancedand mature pollution prevention and control technologies and implement detailed management of environmental protectionfacilities to ensure that emission concentrations are better than national, local, and industry standards, maintaining strict compliancewith environmental regulations. At the end of Reporting Period, all the pollutant emission reduction targets of CR Sanjiu have beenachieved, as detailed in the table below.

NumberPollutant

??????YearIndicator

20202021202220232024

Change fromthe previousyear in 2024

The Rules for Target-setting During the "14thFive-Year Plan" Period1SO

Emission (t)9.503.502.664.703.47

Reduced

26.71%.

Based on 2020 as thebenchmark, decreases

by 2% year - by - yearTarget Value (t)

PermissibleEmission

9.319.1210.16899.9525

Whether the Target isAchieved

YesYesYesYesYes2NOX

Emission (t)35.0135.6538.4466.3447.87

Reduced

27.84%

2020 as the benchmark,decreases by 2% year -by – year from 2024Target Value (t)

PermissibleEmission

PermissibleEmission

PermissibleEmission

PermissibleEmission

65.01

Whether the Target isAchieved

YesYesYesYesYes

ParticulateMatter (PM)

Particulate MatterEmission (t)

6.87961.47831.4410.008.19

Reduced

18.10%

Based on 2020 as thebenchmark, decreasesby 2% year - by - yearTarget Value (t)

PermissibleEmission

6.74206.604411.574211.3279

Whether the Target isAchieved

YesYesYesYesYes

VolatileOrganicCompounds(VOCs)

Emission (t)377.865512.129211.238.875.87

Reduced

33.82%

Shall not exceed thepermissible emissionTarget Value (t)

PermissibleEmission

PermissibleEmission

PermissibleEmission

PermissibleEmission

8.69

Whether the Target isAchieved

YesYesYesYesYes5COD

Emission (t)62.2055.4758.7767.1460.02

Reduced

10.60%

Based on 2020 as thebenchmark, decreasesby 2% year - by - yearTarget Value (t)

PermissibleEmission

60.95659.71267.407765.97

Whether the Target isAchieved

YesYesYesYesYes

AmmoniaNitrogen

Emission (t)3.041.911.682.392.01

Reduced

15.90%

Target Value (t)

PermissibleEmission

2.97922.91844.43904.3445

Whether the Target isAchieved

YesYesYesYesYesRemarks:

Allowable emissions: The total allowable emissions of pollutants or the total control amount speci?ed in the pollutant discharge permit as set by the ecologicalenvironment authority of the enterprise's location.

When there are changes in the production scale, number of enterprises, etc., the target values of the indicators can be adjusted accordingly.

In 2023, due to the inclusion of Kun Pharmaceutical Group in the statistical scope, the baseline values of Kun Pharmaceutical Group were incorporated, and thecorresponding indicator target values were adjusted accordingly.

CR Sanjiu's Pollutant Reduction Target Setting and Achievement from 2020 to 2024

Waste Disposal

Signing Responsibility Agreements, Target Breakdown, and Performance EvaluationIn accordance with theEHS Supervision and Management Measures, the Group signs annual EHS responsibility agreements with eachbusiness unit, breaking down pollutant reduction targets. Regular statistical analysis of indicator data is conducted, and at the end of the year,performance evaluations are implemented in line with theEHS Annual Evaluation and Assessment Management Measures. Business Units withoutstanding performance would be recognized and rewarded.

Environmental Performance as a factor in executive and employees' compensation

We have incorporated environmental management performance into the current incentive compensation policy for executive and allemployees. Job-speci?c environmental management responsibilities are de?ned, and performance levels are assessed through annualreporting and evaluation, which are linked to bonus distribution, strengthening responsibility implementation.Source ControlAll subsidiaries are required to prioritize the procurement of low-energy, low-pollution, and low-noise models when purchasing newequipment. The use of outdated processes and equipment that have been o?cially phased out is prohibited. On the basis of meetingprocess requirements, the substitution of high-pollution raw materials is promoted, and priority is given to the use of low-toxicity andharmless materials to reduce pollutant generation and toxicity.Monitoring PollutantsEach of CR Sanjiu's subsidiaries develops a self-monitoring plan at the beginning of each year. Some environmental protection facilities areequipped with automatic monitoring devices connected directly to the ecological environment supervision platform. For facilities withoutautomatic monitoring equipment, self-monitoring is carried out according to the self-monitoring plan. During the Reporting Period, the automaticmonitoring data and inspection reports show that after treatment by environmental protection facilities, the concentration of CR Sanjiu's pollutants,as well as the total emissions of wastewater and waste gas, comply with national, local, and industry standards, and the total emissions have notexceeded the allowed limits.Waste Gas and Wastewater TreatmentEfficient environmental protection equipment is prioritized, and facilities with strong load-bearing capacity are installed.Emergency plans are established, and high-risk environmental protection facilities and automatic monitoring equipment aremanaged with precision by dedicated personnel or third-party professional teams. Standardized operations and training areimplemented. In 2024, the environmental protection facilities and online monitoring equipment have been running smoothly.Noise ControlWhen procuring new equipment, emphasis is placed on low-noise models. Noise control standards are followed during operations,and noise sources are identi?ed through comprehensive monitoring at every stage of the process. Various measures, includingsound source mu?ing, vibration isolation, sound barriers, and green landscaping for sound absorption, are used in conjunctionwith real-time monitoring and protective management to ensure noise levels meet national and local standards.

CR Sanjiu adheres to the principles of compliance, minimization,recycling, and harmlessness for the classi?cation and treatmentof waste. For hazardous waste, temporary storage areas areset up in strict accordance with regulations, and the waste isclassified, packaged, and temporarily stored in designatedzones. Qualified professional agencies with the necessarycapabilities are entrusted to handle the waste in a lawfuland compliant manner. For non-hazardous waste, priority isgiven to small-scale internal recycling within units, medium-

scale recycling between units, and active participation in thedevelopment model of social large-scale recycling. The focusis on expanding and evaluating methods for waste recyclingand disposal. During the Reporting Period, all waste generatedfrom CR Sanjiu's production and operational activities has beenhandled in compliance with legal and regulatory requirements.CR Sanjiu's subsidiaries, CR Benxi Sanjiu Pharmaceutical andCR Shunfeng, were recognized as "Waste-Free Factories" inBenxi City and Shunde District, Foshan, respectively.

General Industrial Solid Waste Management.

Establish and implement standardized management systems for general industrial solid waste, set up temporary storage areaswith clear labeling and signage; assign dedicated personnel for management, keep accurate records in ledgers and ensure theirpreservation, and carry out regular inspections and maintenance. For general industrial solid waste, strengthen the whole-processreduction management, adhere to the principle of priority recycling, and reuse as much as possible. For general industrial solid wastethat cannot be recycled, it should be delivered to a third party with recycling capabilities or used as raw materials/auxiliary materialsfor production. Hazardous Waste DisposalCR Sanjiu has developed and implemented management systems and emergency plans for hazardous waste, including the creation ofmanagement plans, specialized temporary storage areas, and clear signage, labels, and tags. Classi?ed and zoned temporary storageis enforced. Hazardous waste reduction is carried out through technical and management measures to minimize generation at thesource, in compliance with relevant laws, regulations, and standards. Hazardous waste is entrusted to professional agencies with theappropriate quali?cations and technical capabilities for disposal, following the transfer and tracking system to ensure standardizeddisposal and traceability. The Company has fully completed the standardization of hazardous waste management, achieving uni?edstandards and regulated management. Disposal of Expired MedicinesAll expired medicines and waste pharmaceutical products are treated as hazardous waste and disposed of by an external party inaccordance with relevant regulations. Third-party disposal agencies with the necessary quali?cations and technical capabilities areselected, and hazardous waste disposal agreements are signed to ensure the legal and compliant disposal of expired medicines. Use of Packaging MaterialsCR Sanjiu encourages subsidiaries to use green, biodegradable, low-carbon, and recyclable packaging materials, reduce single-use packaging designs, and minimize the use of plastic packaging materials to achieve sustainability and reduce packaging waste.Packaging waste is subject to hazard identification and classified treatment. Packaging waste without hazardous characteristicsis treated as general industrial solid waste and is recycled and reused as much as possible. Packaging waste with hazardouscharacteristics is legally and compliantly disposed of as hazardous waste.

Number

Indicator

Name

??????YearIndicator

20202021202220232024

The rules for target-setting during the"14th Five-Year Plan"period

HazardousWaste

Total Generation (t)488.96627.63835.931252.351,002.75

All HazardousWaste Must beDisposed of Legallyand in Compliancewith Regulations.Target Value (t)

All Legally andCompliantlyDisposed

All Legally andCompliantlyDisposed

All Legally andCompliantlyDisposed

All Legally andCompliantlyDisposed

All Legally andCompliantlyDisposedWhether the Target isAchieved

YesYesYesYesYes

GeneralIndustrialSolid Waste

Total Generation (t)32,214.4536,250.5026,094.72134,557.22144,261.22

All generalIndustrial SolidWaste Must beTreated Legally andin Compliance withRegulations.Target Value (t)

All Legally andCompliantlyDisposed

All Legally andCompliantlyDisposed

All Legally andCompliantlyDisposed

All Legally andCompliantlyDisposed

All Legally andCompliantlyDisposedWhether the Target isAchieved

YesYesYesYesYesRemarks:

Permissible Emission: The annual allowable total pollutant emission given by the ecological environment department where the enterprise is located.

When there are changes in the production scale and quantity of enterprises included in the statistics, the target values of the indicators can beadjusted accordingly.

In 2023, as Kunming Pharmaceutical Group has been included in the statistical scope, the corresponding target values of the indicators have beenadjusted accordingly.

Setting and Achievement of Solid Waste Emission Targets of CR Sanjiu from 2020 to2024

Multi - Dimensional Carbon Reduction, Protectthe GreenWith the continuous rise in global temperatures, climate change has brought severe negative impacts and risks to humanity, transmitting through a"risk cascade" from natural ecosystems to economic and social systems. This poses a serious threat to the human living environment and the safetyof life and property. In the face of the increasingly severe climate crisis, actively addressing climate change and implementing green, low-carbontransformation has become a key driver of green, high-quality development. We are committed to multi-dimensional carbon reduction and areintegrating the concept of green, low-carbon development into every aspect of our production and operations. Through technological innovation,energy optimization, and process improvement, we aim to reduce energy consumption and our carbon footprint.Response to Climate Change

Governance

Strategy

CR Sanjiu actively responds to the climate change initiatives of theParis Agreementand supports theUAE Consensusthrough action. TheCompany thoroughly implements the national dual-carbon strategy and steadily carries out energy-saving and carbon-reduction e?orts. Inaccordance with theCarbon Emission Management System Requirements and Guid, CR Sanjiu has improved its carbon emission managementsystem. The Company has developed systems such as theCR Sanjiu's Medium- and Long-Term Plan for Peaking Carbon Emissionsand setgreenhouse gas reduction targets into 14th Five-Year Plan, based on theScience-Based Targets initiative (SBTi)methodology. At the same time,CR Sanjiu dynamically identi?es and manages climate-related risks and opportunities, fully referencing TCFD recommendations to e?ectivelymanage climate change risks and ensure proper information disclosure.A solid governance structure and clear management responsibilities are key to a Company's e?ective response to climate change. CR Sanjiu placeshigh importance on managing climate-related risks and opportunities, establishing a three-tier governance structure consisting of the Board ofDirectors, the EHS Committee, the EHS Management Department, and other departments, business units, and subsidiaries. The Board of Directorsserves as the decision-making body, responsible for approving the climate change strategy and relevant targets. The EHS Committee acts as themanagement body, overseeing the overall deployment and coordination of climate change-related work, developing and reviewing major policiesand strategic plans, and assessing climate-related risks and opportunities. The EHS Management Department, along with other departments,business units, and subsidiaries, forms the execution layer, responsible for implementing speci?c actions to address climate change.Mitigation and adaptation are the two key strategies for addressing climate change. Mitigation focuses on reducing greenhouse gas emissions and enhancingcarbon sinks, while adaptation focuses on preventing and reducing the adverse impacts and risks of climate change. Both are complementary and indispensable. Inresponding to climate change risks, we emphasize both mitigation and adaptation, continuously enhancing the Company's ability to address climate change in theshort, medium, and long term. We require subsidiaries at all levels to develop "Carbon Peak and Carbon Neutrality" action plans.Mitigation: We aim to optimize the industrial structure and layout, focus on resource conservation and e?cient utilization, optimize energymanagement and usage structure, and continuously develop and apply renewable energy. We clearly define energy-saving and carbon-reduction goals, implement six key actions for carbon peak, and integrate energy-saving and carbon-reduction targets into the performanceevaluations of subsidiaries and relevant personnel to strengthen responsibility and accountability. We will further explore e?ective measures toreduce energy consumption and lower greenhouse gas emissions.Adaptation: We closely monitor the meteorological department's extreme weather forecasts and warnings, anticipate potential natural disasterscaused by extreme weather, and respond with preventive measures and risk avoidance strategies. We have developed emergency rescue plans, setup a tiered emergency response system for extreme weather, strengthened disaster prevention measures, and established emergency rescue teamswith regular drills. When extreme weather occurs, we will promptly and orderly initiate emergency response plans. Additionally, we enhance outdoorequipment, facilities, valve pipelines, and electrical instrumentation inspections. We also research and cultivate medicinal plant varieties with highenvironmental tolerance and rich medicinal properties, promoting their cultivation. We are developing complementary projects using pharmaceuticalplants under photovoltaic panels, reducing the impact of high temperatures on medicinal herb planting bases.Climate Risk Scenario AnalysisThe Company refers to theShared Socioeconomic Pathways (SSPs)from the Intergovernmental Panel on Climate Change (IPCC)and climatechange scenarios published by theInternational Energy Agency (IEA), in combination with the Company's dual-carbon strategy. Based on previousyears' scenario analyses, we have selected applicable low-emission and high-emission scenarios to assess the impact of key physical and transitionclimate risks on the Company's operations. We use the IPCC SSP1-2.6 and SSP5-8.5 scenario models to assess potential physical risks, and the IEA2050 net-zero emissions scenario and established policies scenario models to evaluate potential transition risks. We use the IPCC SSP1-2.6 andSSP5-8.5 scenario models to assess potential physical risks, and the IEA 2050 net-zero emissions scenario and established policies scenario modelsto evaluate potential transition risks.

Physical RisksTransition RisksSSP1-2.6 Low-Emission Scenario

SSP5-8.5High-Emission Scenario

NZE2050 Net-Zero Emission Scenario

STEPSStated Policies ScenarioThis scenario sets anideal situation whereglobal CO

emissionsreach the net - zerotarget around 2050.

This scenario simulatesthe situation where futureeconomic developmentmainly relies on energy- intensive industrieswith almost no policyconstraints.

This scenario assumes the possibilityand impacts of achieving net - zerogreenhouse gas emissions globally by2050. In this scenario, countries willintroduce strict policies to promotethe application of energy - savingtechnologies and reduce dependenceon fossil fuels.

This scenario assumes the developmenttrends of energy demand and supplywithout considering the introduction ofany new policies or measures.

Climate Resilience AssessmentPhysical Risks: The frequent occurrence of extreme weather events and the rise in average temperatures may impact theCompany's operations.Scenario-Driven FactorsThe Potential ImpactFrequent Extreme Weather: Frequent extreme rainfallmay lead to surface water accumulation, ?ooding,landslides, and other disasters, which could negativelyimpact the Company's normal production operations andtransportation logistics.

Increasing frequency and intensity of extreme rainfall events. As extremerainfall events become more frequent and intense, the likelihood of ?oodingand water accumulation continues to rise. Factories located at lowerelevations are more susceptible to ?ooding. The risk of instability in productionoperations and supply chain transportation at the Company's productionbases increases, leading to higher asset loss risks and rising costs.Rise in Average Temperatures: With the rise in averagetemperatures, the Company will need to invest moreresources to ensure and maintain a normal productionoperating environment.

The rise in average temperatures may lead to higher operational costs for thefactories, such as increased electricity consumption and higher infrastructuremaintenance expenses.

The Company anticipates extreme rainfall and ?ooding disasters and has developed a series of emergency response plans, includingspeci?c plans for ?ood prevention and lightning protection. Measures such as optimizing drainage systems for ?ood control, installingrooftop photovoltaics to reduce indoor temperatures, providing heat subsidies and heatstroke emergency rescue for employees, andsetting up backup power sources ensure the stability of production. Currently, extreme weather events have not caused signi?cantoperational disruptions, but the Company continues to strengthen disaster early warning systems and sustainable procurementstrategies, with a focus on improving the climate resilience of the value chain. At the raw material cultivation end, the Companypromotes climate-adaptive cultivation, strictly follows the principle of authentic medicinal herbs, selects and breeds high-tolerance,high-quality varieties, establishes a germplasm resource protection system, and implements a harvesting system that ensuressu?cient medicinal content. These measures systematically reduce the impact of climate factors on the quality of raw materials andthe supply chain.Transition Risks: Under the influence of risks related to low-carbon transformation, the Company primarily faces transition risksarising from di?erent regions intensifying their low-carbon actions. These risks include stricter low-carbon transition policies and thedevelopment and application of low-carbon technologies.

Scenario-Driven FactorsThe Potential Impact

Stricter Low-Carbon Transition Regulations and Policies:

Driven by the national "dual-carbon" goals, carbonreduction policies for the pharmaceutical manufacturingindustry are gradually becoming stricter.

As various carbon reduction regulations and policy requirements arepromoted and implemented, the Company may face increased operationalcosts to meet compliance requirements, such as increased costs forpurchasing trading quotas due to being included in the carbon tradingsystem.Low-carbon Technology Development and Application:

During the Company's transition to low/zero carbon, thereis an increased demand for equipment upgrades, energy-saving and carbon-reducing technology development andapplication.

Cost increases due to the transformation of energy-intensive equipment andthe development of energy-saving and emission-reduction technologies.

To address transition risks, the Company strengthens its carbon emission management system, with a focus on promoting innovationand application of energy-saving and carbon-reduction technologies. This includes improving energy efficiency through processoptimization and intelligent production technologies, advancing intelligent upgrades and energy-saving transformations of equipmentto reduce energy losses, deepening the recovery and utilization of waste heat (such as condensate, air compressor, and boiler wasteheat), establishing a multi-stage waste energy recovery system, and relying on energy information systems for detailed management.

Based on climate change risk scenario analysis and previous years' risk identi?cation, we have re?ned the climate change risk listrelevant to the Company using intuitive experience analysis, considering industry characteristics, market changes, technologicalupgrades, local policies, geographic features, extreme weather, and other factors. This list has been integrated into CR Sanjiu's overallrisk management system to ensure the implementation of climate change risk management across the entire value chain. The climatechange risks we face include both physical risks and transition risks. The major climate change risks and corresponding responsestrategies are shown in the table below.

Climate Change Risk List

Risk TypeRisk DescriptionResponse Strategy

ImpactTime

Physical

Risk

Acute Risk

Due to global warming, there is anincrease in the instability of the climatesystem. Extreme weather occurs morefrequently and with greater intensity.Extreme weather can impact humanhealth, lead to casualties, and disruptproduction and transportation. Factorieslocated in low-lying areas face anincreased risk of ?ooding, and thelikelihood of logistics disruptions ordelays rises. These factors may disrupt theCompany's normal operations and leadto changes in the value chain, includingthe supply chain and market demand,which may directly or indirectly result in?nancial losses for the Company. (This isthe biggest physical risk.)

Formulate emergency rescue plans for extreme weather,

set up graded emergency response measures for extremeweather, strengthen disaster prevention and responsemeasures, release natural disaster warnings in a timelymanner, and make advance predictions and reasonablemanagement and risk avoidance for extreme precipitationand ?ood disasters.New production bases must be set up in high-lying areas

that are not easily ?ooded.Require relevant units to attach great importance to

the prevention and response work of natural disasters,

strengthen the management of key areas and important

links such as buildings, new, reconstructed and expanded

projects, warehousing and logistics, and do a good job in

disaster prevention and avoidance.Optimize the technology of the constant temperature

and refrigeration systems in the production workshops to

improve the refrigeration e?ciency.

LongTerm

Chronic Risk

Persistent high-temperature weathermay lead to problems such as reducedproduction of cultivation of traditionalChinese medicinal herbs and di?cultiesin preservation, which may bring aboutan increase in procurement costs andlabor costs.

Research the arti?cial planting techniques of medicinal

herbs, summarize and formulate technical guidelines,

promote the authentic cultivation of medicinal herbs and

the protection of germplasm sources, and select suitable

environments for cultivation.Build medicine-photovoltaic complementary projects,

plant medicinal plants in the shady areas under the

photovoltaic panels to reduce the impact of high

temperatures on the plants.Select and promote the cultivation of high-quality

traditional Chinese medicine varieties with high

environmental tolerance and rich medicinal ingredients,

adhere to the cultivation and protection of the

authenticity of medicinal organisms and their germplasm

sources.

LongTerm

Since the production and storage of drugsrequire a low-temperature environment,in the scenario of climate warming,more energy will be consumed, and theoperating costs will increase.

Encourage energy-saving retro?ts of air conditioning

systems, such as the use of more energy-e?cient

permanent magnet synchronous variable frequency

centrifugal water storage dual-mode units.Encourage the construction of photovoltaic power

generation projects on the rooftops of workshops, install

photovoltaic panels on the rooftops, which can reduce the

indoor temperature of the workshops to a certain extent.

MediumTerm

CR Sanjiu's 2024 Climate Change Risks and Response Strategies

Risk TypeRisk DescriptionResponse Strategy

ImpactTime

TransitionRisk

Legal Risk

The risk of non-compliance brought aboutby stricter environmental protection,carbon emission laws, regulations,standards and speci?cations.

Strengthen the study and research of laws, regulations,

standards and speci?cations, and actively communicateand contact with government authorities.

LongTerm

Policy Risk

The "dual carbon" policy will directlya?ect the Company's environmentalprotection investment and indirectlya?ect the Company's product layout,production capacity and production scale.To achieve the temperature control targetof the Paris Agreement, governments athome and abroad are gradually improvingthe carbon emission trading managementsystem and the control of the total carbonemission. The number of enterprisesincluded in the list of key carbon emissionunits is increasing, the expected cost ofgreenhouse gas emissions is increasing,and the carbon allowances allocated bythe government are also decreasing yearby year. The subordinate key emissionunits will increase the purchase ofcarbon allowances or CCER to ful?ll theirobligations, resulting in an increase inoperating costs.

Strengthen the study and research of relevant policies

and regulations, maintain good communication withgovernment authorities, be familiar with the carbonmarket trading mechanisms at the national level andin the locations of business units, and carry out carbontrading in a timely manner.Promote the construction experience of the CR Sanjiu

Guanlan near-zero-carbon park project in each businessunit, and promote the construction of near-zero/zero-carbon factory areas by business units.Promote eligible business units to jointly develop

demonstration projects of carbon sequestration inmedicinal herb cultivation with relevant professionalinstitutions, and study the methodology and standards ofcarbon sequestration.Focus on supervising subordinate key carbon emission

units to strengthen energy-saving and carbon-reductiontechnical transformations and management and reducethe number of key carbon emission units as much aspossible.

LongTerm

HumanResourcesRisk

There is a shortage of professional humanresources, and the Company needsto invest more human and ?nancialresources in carbon reduction.

Strengthen carbon emission management training,

allocate full-time personnel, and do a good job informulating carbon emission control plans, carbon assetmanagement and carbon trading.Establish an expert database and cooperate with

scienti?c research institutes, associations and third-partyinstitutions to carry out carbon reduction research.

LongTerm

TechnicalRisk

There may be additional investment costsfor replacing and upgrading backwardtechnologies that have a greater negativeimpact on climate change. In addition,there is uncertainty about whether theCompany can adapt to, iterate and uselow-carbon technologies, which requiresa process, and the operating costs mayincrease in the early stage. (This is thebiggest transition risk)

Encourage participation in the formulation of green

manufacturing-related standards, application for greenmanufacturing-related patents, and evaluation of greenproducts. Cooperate with professional units to exploreand research energy-saving and emission-reductionequipment, and promote the upgrading of energy-savingand emission-reduction equipment.Vigorously promote intelligent manufacturing. Through

the integration of informatization and industrialization,equipment upgrading and scienti?c scheduling, achievecontinuous manufacturing of large varieties, and furtherimprove production capacity and energy use e?ciency.Continuously implement energy-saving technical

transformations, actively pilot emerging and maturetechnologies, shorten the adaptation period, and promotetheir application. Improve relevant incentive systems,promote green technologies and products, and supportthe development of green and low-carbon industries.

LongTerm

Risk TypeRisk DescriptionResponse Strategy

ImpactTime

TransitionRisk

Market Risk

Consumers' preference for low-carbonproducts may lead to a shift in consumerpreferences.

Conduct research on consumer survey trends, understand

the market's inclination towards low-carbon products,and assist in product development decisions.Encourage each business unit to actively carry out factory

greening, build "garden factories", invite communities,schools and consumer groups to visit the factoryenvironment, and create a green corporate image.Use green packaging for drugs, and require product

packaging to meet the requirements of reusability,recyclability and recoverability; promote the businessunit - Jiuxing Printing to research and develop greenpackaging materials.Promote green and low-carbon transportation, jointly

discuss scienti?c scheduling with logistics companies,optimize the transportation structure, reduce intermediatelinks and ine?ective transportation; promote alternativeclean energy sources, try to replace fuel vehicles withnew energy vehicles, reduce fuel consumption, improvelogistics e?ciency, and help achieve carbon reduction.

LongTerm

ReputationRisk

Investors have increased their concernfor the climate risk response measuresof the invested enterprises. Inadequateresponse measures may a?ect theCompany's reputation in the investmentmarket.

The senior management of the Company attaches

importance to the management and supervision relatedto climate change response, and pays attention to thetrends of climate-related policies.Strengthen communication with investors and consumers,

understand their closely concerned dynamics and markettrends. Under the guidance of the mission of "Caring forPublic Health and Creating a Better Life Together", inaddition to providing high-quality and healthy products,the Company is also committed to improving the healthliteracy of the whole people and assuming more socialresponsibilities and practicing the "Healthy China"strategy from multiple dimensions.Dynamically identify and control climate change and

biodiversity risks, improve response measures, activelyrespond to the climate change initiative of the ParisAgreement, and actively participate in the globalgovernance of climate change. Thoroughly implement thenational dual-carbon strategy, and jointly ful?ll the mainresponsibility of ecological environment protection withupstream and downstream enterprises.Carry out publicity activities on World Environment Day,

Energy Conservation Publicity Week, National Low CarbonDay, etc., actively participate in relevant publicity andtraining activities organized by government departmentsand professional associations. Timely disclose theCompany's climate change response information onthe Company's o?cial website or with the help of SinaFinance and social media, etc., and show the good imageof CR Sanjiu's green and low-carbon development to thesociety.

LongTerm

Climate Change Risk Management

Climate Change Opportunity Management

The Company follows the internationally recognized COSO risk management framework, adapting it to the Company's actual needs,and has established a top-down "three lines of defense" risk management system. This system clearly defines the organizationalstructure and division of responsibilities for climate change risk management. The Board of Directors is responsible for overseeingthe overall risk management process, while the EHS Committee serves as the highest decision-making body for climate change riskmanagement matters. The EHS Committee oversees the EHS Management Department, which acts as the daily management bodyand reports to the Board of Directors on the effectiveness of the risk management system and the control of significant risks. TheCompany uses a "?ve-step method" to manage climate change risks, consisting of risk identi?cation, risk assessment, risk response,risk monitoring, and risk reporting. The Company implements a closed-loop management model with "risk identi?cation ?rst, businessself-management, and audit supervision follow-up."

We identify climate change opportunities from aspects such as energy resources, corporate resilience, markets, products, and services,and analyze their impacts. The details are shown in the table below.

Opportunity TypeOpportunity DescriptionOpportunity Impact

ImplementationDuration

Energy andResourceUtilizationE?ciency

By carrying out energy-saving and emission-reduction technologies and launching anintelligent operation system, the utilizatione?ciency of energy and resources can bee?ectively improved.

Adopting more e?cient productionmethods can e?ectively reduceoperating costs, increase productioncapacity, and boost revenue.

Long TermOptimizing the transportation structure androutes to enhance transportation e?ciencycan e?ectively reduce transportation fuelconsumption.

Using e?cient transportation methodscan lower operating costs.

Long TermCarrying out waste recycling and reuse toa greater extent to achieve reduction andresource utilization.

Reducing operating costs.Long TermImplementing reclaimed water reuse,increasing the number of water recyclingtimes, and reducing water consumption.

Reducing operating costs.Long Term

EnergySubstitution

Developing and applying renewable energy:

Increasing the development and utilizationof renewable energy, such as green powertrading, photovoltaic development, andbiomass energy utilization, can reduceproduction costs or bring in pro?ts.

By investing in renewable energy,

gradually increasing the proportion of

renewable energy utilization, reducing

the use of fossil fuels, it is possible

to optimize the energy structure,

signi?cantly reduce greenhouse gas

emissions, lower the risk of rising

fossil fuel prices in the future, reduce

dependence on fossil fuels, and cut

operating costs.

Long Term

Promoting the construction experience ofnear-zero/zero-carbon parks and attemptingto develop CCER projects.

Reducing the risk of greenhouse

gas emissions, thereby reducing

the sensitivity to changes in carbon

trading prices.

Long Term

Opportunity TypeOpportunity DescriptionOpportunity Impact

ImplementationDuration

Resilience

Improving the ability to manage climatechange risks, seeking green technologies,increasing production e?ciency, optimizingproduction processes, and developing newproducts are all within the scope of futuredevelopment considerations, thus diversifyingthe Company's products and marketingactivities and enhancing the enterprise'sresilience.

Enhancing the enterprise's resilience,attracting more investors andcustomers, and providing funds forbusiness growth.

Long Term

Developing a sustainable traditional Chinesemedicine industry and improving theadaptability of medicinal biological cultivationbases are conducive to the Company's abilityto resist climate change risks.

Strengthening the adaptability ofmedicinal biological cultivation baseshelps reduce losses caused by climaterisks, thus minimizing the impact onprocurement costs and the stability ofthe supply chain.

Long Term

Market

Policy subsidies: The Company activelyresponds to climate change incentive policies,including ?nancial subsidies, tax incentives,loan preferences, and quota systems. TheCompany may obtain additional subsidies oreconomic support from these policies.

Utilizing channels such as renewableenergy and climate change incentivepolicies may bring additional bene?tsor subsidies to the Company.

Long Term

Products andServices

Developing low-carbon products: Promotingthe development of green product businesses,continuously innovating, and developingnew low-carbon products can e?ectivelyimprove the industry competitive position ofenterprises or organizations.

Developing low-carbon productsis bene?cial for enhancing theCompany's reputation, attracting moreconsumers, increasing market share,and enhancing competitiveness.

Long TermShift in consumer preferences: As consumerspay increasing attention to environmentalprotection and sustainable development, itis necessary to launch green and low-carbonproducts to adapt to changes in consumerpreferences.

Providing low-carbon products orservices to cater to the growing marketdemand may increase sales revenue.

Long Term

Adherence to Energy Conservation and Carbon ReductionEnergy-Saving and Carbon Reduction as the Path to Sustainable Development. Energy-saving and carbon reduction are essential toachieving sustainable development. We always prioritize improving energy e?ciency as a strategic focus, continuously advancing theresearch, development, and application of energy-saving technologies. CR Sanjiu has formulated systems such as theManagementMeasures for Energy and Resource Conservationand theCR Sanjiu's Management Measures for Carbon Emissionsto regulate andguide energy-saving and carbon-reduction efforts. The Company has established an energy and resource management team tomonitor and analyze energy consumption data and the implementation of energy-saving work across subsidiaries in real-time.Through measures such as upgrading key energy-consuming equipment, optimizing production processes, and continuouslydeveloping and applying renewable energy, CR Sanjiu conducted multiple approaches to achieve energy-saving and carbon reductiongoals. In 2024, the energy usage e?ciency indicators and greenhouse gas emission targets have been achieved, with greenhouse gasemissions reduced by 19.65% compared to 2023. The details are shown in the table below.

NumberPollutant

????????Year

Indicator

20202021202220232024

Change fromthe previousyear in 2024

The rules for Target-setting During the"14th Five-Year Plan"Period

CO

(IncludingScope 1 and 2)

Emission Intensity(tCO

e/ RMB 10,000)

0.16490.16030.16270.14510.1265

Decrease

13.58%

Taking the adjustedemission intensity in2020 (0.2558 tCO

e/RMB 10,000) as thebenchmark, it isreduced by 2% yearby yearTarget Value (tCO

e/RMB 10,000)

0.25580.25070.24560.24050.2353

Whether the Target isAchieved

YesYesYesYesYes

ComprehensiveEnergyConsumptionper RMB 10,000of Output Value(ComparablePrices)

Actual Value (tons ofstandard coal/ RMB10,000)

?0.04250.04280.04970.0456

Decrease

8.25%

Taking the adjustedvalue in 2020 (0.0662tons of standardcoal/ RMB 10,000) asthe benchmark, it isreduced by 2% yearby year.Target Value (tons ofstandard coal/ RMB10,000)

?0.06490.06360.06220.0609Whether the Target isAchieved

?YesYesYesYes

ComprehensiveEnergyConsumptionper RMB 10,000of Added Value(ComparablePrices)

Actual Value (tons ofstandard coal/RMB10,000)

?0.08790.08760.11000.0981

Decrease

10.82%

Taking the adjustedvalue in 2020 (0.1276tons of standardcoal/ RMB 10,000) asthe benchmark, it isreduced by 1.6% yearby year.Target Value (tons ofstandard coal/ RMB10,000)

?0.12560.12350.12150.1194Whether the Target isAchieved

?YesYesYesYesRemarks:

When there are changes in the production scale and quantity of enterprises included in the statistics, the target values of the indicators can

be adjusted accordingly.In 2023, as Kunming Pharmaceutical Group has been included in the statistical scope, the corresponding target values of the indicators have

been adjusted accordingly.

CR Sanjiu Greenhouse Gas Emission Reduction from 2020 to 2024

Launch of the "Mushroom IoT AI Cloud Smart Control" SystemCaseCR Sanjiu has applied the "Mushroom IoT AI Cloud Smart Control" system in the field of industrial AI. This system deeplyintegrates technologies such as the Internet of Things (IoT), edge computing, and AI. By collecting operational parametersfrom energy-consuming equipment and facilities like air conditioners, refrigeration units, vacuum pumps, and aircompressors, it provides on-demand, precise energy supply and online adjustments. This results in e?cient operations andenergy consumption savings. The project achieves a comprehensive energy-saving rate of over 15%, with annual energysavings of approximately 544,000 RMB. It signi?cantly enhances labor e?ciency and was awarded the "Dingge Award" forDigital Transformation Pioneers - 2024 Green Development Enterprise Award.

Implementing the "Six Major Actions for Carbon Peak" Green Energy Development andSubstitutionThrough the active promotion and construction of distributedphotovoltaic power generation projects, the use of biomass energy toreplace fossil fuels, and participation in green electricity trading suchas photovoltaic, hydropower, and wind power, CR Sanjiu is increasingthe share of renewable energy and reducing dependence on traditionalenergy sources. In 2024, CR Sanjiu's total installed photovoltaiccapacity reached 20.1047 MWp, an increase of 97.80% compared to2023. The photovoltaic system generated a total of 10.784125 millionkWh of green electricity, with 92.90% of the green electricity generatedbeing self-consumed for production and office use. CR Sanjiu alsopurchased 16.68 million kWh of renewable energy through greencerti?cates and 2 million kWh of green electricity.In 2024, CR Sanjiu organized subsidiaries at all levels to fully assess the types, quantities, and energy e?ciency distribution of keyenergy-consuming equipment. The Company compiled the "CR Sanjiu Key Energy-Consuming Product Equipment Upgrade andRenovation Summary Report" and focused on upgrading low-e?ciency boilers and electrical equipment. Short, medium, and long-term plans were also developed to guide the upgrade and renovation of key energy-consuming equipment across subsidiaries.CR Sanjiu has formulated systems such as the "Supplier Quality Management Procedures" and the "Material Procurementand Supply Management Procedures," continuously strengthening supply chain management and supervision. The Companyoptimized supplier selection standards and conducted environmental and energy management compliance assessments forsuppliers. It increased the weight of environmental and energy management criteria in supplier evaluations, guiding suppliers tojointly pursue a carbon-neutral future.Through increased energy-saving and carbon-reduction e?orts, the Company has carried out waste heat recovery, constructedwater/ice storage cooling systems, upgraded lighting and intelligent control systems, introduced MVR evaporation concentrationsystems, eliminated outdated production capacity, optimized process technologies, and improved energy managementmeasures. These actions e?ectively improve energy utilization e?ciency.The Company continues to promote the construction of near-zero carbon parks in business units such as CR Jiuxin, CR Sanjiu(Chenzhou), and CR Sanjiu (Zaozhuang), creating new models for green and low-carbon development in the pharmaceuticalindustry. In 2024, the near-zero carbon park project built by CR Jiuxin was successfully included in the "Fourth Batch of PilotProjects for Near-Zero Carbon Emission Zones in Shenzhen." By building distributed photovoltaic power generation and adoptingenergy-saving measures, the CR Jiuxin park has become a demonstration benchmark with pharmaceutical industry characteristicsfor near-zero carbon emissions.CR Sanjiu is actively establishing and improving its carbon asset management system, has formulated systematic regulations forcarbon emission management, and is comprehensively advancing its carbon emission management e?orts. Each business unithas formulated its own regulations for carbon emission management to standardize such management. The Company regularlycollects, monitors, and calculates carbon emission data, engages professional institutions either directly or through mandatesfrom government authorities to conduct carbon emission audits, ensuring accurate and transparent carbon emission information.

CR Jinchan Green PowerPurchase Certi?cates

Kunzhongyao Green PowerPurchase Certi?cateseE?cient Energy-Saving, Carbon-Reducing Technology and Equipment Application:

Building a Green, Low-Carbon Industry Chain:

Promoting the Innovation and Application of Low-Carbon, Zero-Carbon, and Carbon-Negative Technologies:

Building Carbon Neutral Demonstration Projects and Parks:

Accelerating the Improvement of the Carbon Asset Management System:

Conducting Publicity and Education

In order to widely spread Xi Jinping's ecological civilization thoughts, firmly establish and practice the concept that "lucid watersand lush mountains are invaluable assets," promote ecological culture, and popularize ecological civilization, CR Sanjiu mobilizes itsemployees to actively participate in the great practice of building a beautiful China and achieving modernization with harmoniouscoexistence between humans and nature. The Company encourages its employees to become active communicators and exemplarypractitioners of ecological civilization, showcasing CR Sanjiu's image of green, high-quality development. In 2024, CR Sanjiu'sheadquarters and subsidiaries at all levels, focusing on themes such as "Comprehensively Promoting the Construction of BeautifulChina," "Green Transformation, Energy-Saving Initiatives," and "Green, Low-Carbon, Beautiful China," actively carried out diversi?edpublicity and educational activities.

World Environment Day Promotional Activity Image2024 National Low Carbon Day Sharing

2024 World Environment Day Themed Activity Photos

Ecological Balance and Green Building

Natural ecological balance is the cornerstone of maintaining the Earth's life system and a prerequisite for human sustainable development. Weare aware of the importance of protecting the ecological environment and actively implement an environmentally friendly business model.By enhancing biodiversity conservation, promoting ecological restoration, and advocating green public welfare, we strive to achieve harmonybetween humans and nature.Biodiversity Conservation

Dynamically identify and manage biodiversity risks

CR Sanjiu attaches great importance to biodiversity protection andactively responds to the Kunming-Montreal Global BiodiversityFramework. The Company strictly complies with national lawsand regulations, such as theWild Plant Protection Regulations ofthe People's Republic of China andtheWild Animal ProtectionLaw of the People's Republic of China, as well as internationalconventions like theConvention on Biological Diversityand the

Convention on International Trade in Endangered Species ofWild Fauna and Flora." CR Sanjiu has formulated the CRSanjiuEnvironmental Protection Policywhich clearly commits toprotecting biodiversity and ensuring zero deforestation.

We dynamically identify and manage biodiversity risks, assess theimpact of our business activities on natural ecosystems, and avoidnegative impacts on biodiversity. The Company is committedto preserving biodiversity by adhering to the authenticity ofmedicinal plants and germplasm cultivation, striving to maintainecosystem diversity, promote biodiversity restoration, and supportthe healthy and orderly development of the traditional Chinesemedicine industry. Our goal is to collectively move toward a visionof harmonious coexistence with nature.

The Company dynamically identifies risks related to biodiversity, formulates and vigorously implements measures for biodiversityconservation. The main identi?ed risks and corresponding strategies are shown in the table below.

Biodiversity RisksCorresponding strategies

The insufficient resources ofendangered medicinal herbs, theannual decrease of wild medicinalbiological resources, the raw materialshortage crisis faced by traditionalChinese medicine varieties, and thedamage to biodiversity.

Strictly abide by relevant national laws and regulations on endangered protected

medicinal organisms and prohibit the use of wild endangered protected medicinalorganisms as ingredients in medicine.Research the cultivation techniques of medicinal herb seedlings and arti?cial planting,

summarize them into technical guidelines, vigorously promote the construction ofarti?cial planting bases for Chinese medicinal materials, adhere to the cultivation andprotection of the authenticity of medicinal organisms and their germplasm resources,and promote the sustainable development of raw materials.Build a demonstration project of forestry carbon sinks for medicinal materials, increasing the

Company's carbon assets while promoting the sustainable development of medicinal materials.Build a zero-carbon demonstration project combining medicine cultivation and

photovoltaic power generation. Pay attention to and participate in ecological protection and restoration actions and meetings.

Global warming, the frequentoccurrence of extreme weather suchas heat, drought, and heavy rain. Bothwild and artificially planted medicinalorganisms face the risk of difficultsurvival due to environmental changes,and the biodiversity of medicinalorganisms may degrade or even belost.

Strengthen the protection of medicinal biodiversity, actively participate in global

governance to address climate change and the deterioration of biodiversity, and

dynamically identify and manage the risks of climate change and biodiversity.Select and breed high-quality medicinal herb varieties with high environmental tolerance

and rich medicinal iingredients and promote their cultivation. Adhere to the cultivation

and protection of the authenticity of medicinal organisms and their germplasm resources.

Medicinal organisms in the planting base must reach a su?cient growth period before they

can be dug up to ensure they have su?cient medicinal ingredients.Strictly comply with national biodiversity protection policies. Prohibit setting up operation

sites, carrying out supply chain activities, and conducting business activities with partners in

biodiversity hotspots, ecologically sensitive areas, ecological protection red line areas, and

important biological protection habitats announced internationally and nationally.

In a few factory areas, there isinsufficient greening, weeds growdensely in the internal corners, and themanagement is lax, so the ecologicalenvironment needs to be improved.

Encourage enterprises at all levels to actively carry out greening in factory areas and build

"garden factories". Invite nearby communities, schools, and consumer groups to visit the

factory area environment and supervise the ecological environment of the factory area.

CR Sanjiu's 2024 Climate Change Risks and Response Strategies

Ensuring the Authenticity and Quality of Raw Materials

Through order-based procurement in authentic production areas, strict implementation of raw material quality audits, and the establishment orjoint construction of medicinal plant cultivation bases, the Company has implemented a rigorous procurement quality management system. Fromthe source, we ensure that all medicinal raw materials are legally sourced and of high quality, preventing the entry of unidenti?ed medicinal herbsinto the production process. We prohibit the use of medicinal wild endangered species and require suppliers to rationally develop medicinal plantresources while protecting biodiversity, avoiding the overharvesting of wild medicinal herbs that could lead to the loss of biodiversity.Building Medicinal Plant Cultivation Bases and Protecting Germplasm ResourcesMedicinal plant cultivation bases are carefully selected based on suitable planting environments, historical planting experience, andavoidance of protected areas. Through industry-university-research cooperation, we have established seedling experimental zones, strictlycontrolling the quality of medicinal plant seedlings, preventing issues such as the weakening of species or the invasion of foreign species. Weactively promote the construction of medicinal herb cultivation demonstration bases in regions such as Guangdong, Jiangxi, and Yunnan.Organic fertilizers are used during the growth of medicinal plants to protect soil and vegetation. Medicinal plants in the cultivation base mustreach su?cient growth years before they can be harvested, ensuring that they contain adequate medicinal components.Promoting the Sustainable Development of Raw MaterialsLeveraging platforms such as the Company's Research and Development Center for Chinese Medicine Resources, we actively conductresearch on medicinal plant germplasm resources, cultivation techniques, production processing methods and standards, full-processinformation traceability, and comprehensive utilization of medicinal resources. This ensures the quality of medicinal herbs andmaximizes the utilization of raw materials, maintaining the balance of medicinal resources and preventing their loss, degradation, andoverexploitation. These e?orts guarantee the sustainable use of medicinal resources and protect medicinal biodiversity.

Building the Medicinal Plant-Photovoltaic Complement Zero-Carbon Demonstration Projects

We utilize the di?erent light wavelengths required for photosynthesis by medicinal plants and photovoltaic power generation, achieving both powergeneration and planting simultaneously. Di?erent medicinal plants are grown based on their light requirements, and di?erent photovoltaic panelcon?gurations are designed and installed to meet the light requirements for photosynthesis. This not only avoids occupying additional land but alsoenhances the overall e?ciency of land use. By the end of 2024, six medicinal plant-photovoltaic complementary projects, including those in YimenLuotai Old and Yimen Xiaoyu Shisha in Yunnan, have been built with a total installed capacity of 610 MWp. These projects provide approximately 222.65million kWh of green electricity annually, helping reduce carbon emissions by approximately 1,237,934 tCO2e per year.Building Chinese Medicine Forestry Carbon Sink Demonstration ProjectsArtificially cultivating medicinal plants to create Chinese medicine forestry helps reduce the harvesting of wild medicinal plants, protectendangered species, restore natural biodiversity, and create a new ecological model of arti?cial Chinese medicine forestry. This approach notonly promotes the sustainable development of medicinal plants but also increases potential carbon assets.Actively Promoting Forest ProtectionIn compliance with theForest Law of the People's Republic of China,theImplementation Regulations of the Forest Law of the People'sRepublic of China,and theRegulations on Returning Farmland to Forests,to protect forest resources. We are committed to sustainably anddynamically managing natural resources and raw materials in the supply chain, and tracing the sources of raw materials to ensure they arelegal, compliant, and free from deforestation risks. Medicinal plants that have not reached the appropriate growth age in cultivation basesare not harvested. While harvesting arti?cially cultivated medicinal plants, we also cultivate and plant more medicinal plant seedlings, avoidusing o?ce supplies and equipment made from wood materials. We promote paperless o?ces and recycle waste paper, and encourageemployees to actively participate in a?orestation activities. We actively carry out greening projects within factory areas and create "gardenfactories." We also focus on and participate in global ecological protection and restoration initiatives and meetings.

Impact Type

Impact of the Company's Production,Services and Products on Biodiversity

Action Strategies

NegativeImpact

Most of the Company's products areChinese patent medicines, with rawmaterials being medicinal organismssourced from market procurement andmedicinal herb planting bases. When thesources of medicinal herbs purchasedfrom the market are unclear, some rawmaterials may be derived from wildmedicinal organisms. The extent ofwild medicinal organism excavation isunknown, which may have a negativeimpact on biodiversity.

For Chinese medicinal herbs purchased from the market, only purchase

those with clear, legal and compliant sources. Require suppliers to developresources reasonably based on the protection of medicinal biologicalresources to avoid biodiversity loss caused by over - excavation of wildChinese medicinal herbs.Formulate technical speci?cations for the cultivation of medicinal herb

seedlings and arti?cial planting. Promote the standardized cultivation ofChinese medicinal herbs through self - built or cooperative planting bases.Strengthen the protection of germplasm resources of authentic medicinalherbs and increase the proportion of raw material supply from plantingbases. Harvest medicinal herbs strictly in accordance with their naturalgrowth cycles to ensure that the e?ective components meet the standards.The Company focuses on the dynamic management of sustainability risksin business partners and the supply chain, protects natural resources,maintains ecosystem diversity, strictly complies with national biodiversityprotection policies, and prohibits setting up operation sites, carrying outsupply chain activities and conducting business activities with partners inbiodiversity hotspots, ecologically sensitive areas, ecological protectionred line areas, and important biological protection habitats announcedinternationally and nationally.Strictly abide by relevant national laws and regulations on endangered

protected medicinal organisms and prohibit the use of wild endangeredprotected medicinal organisms as ingredients in medicine.

PositiveImpact

Supported by platforms such as the Instituteof Traditional Chinese Medicine Resourcesat the headquarters R & D center, activelyresearch the cultivation techniques ofmedicinal herb seedlings and artificialplanting, summarize them into technicalguidelines, and vigorously promote theconstruction of artificial planting bases forChinese medicinal materials.Using medicinal herb raw materials withclear sources, increasing the proportionof Chinese medicinal herb supply fromplanting bases, adhering to the cultivationand protection of the authenticity ofmedicinal organisms and their germplasmresources, promoting the sustainabledevelopment of raw materials, reducingthe excavation of wild medicinal organisms,and prohibiting the use of wild endangeredprotected medicinal organisms asingredients in medicine, which helps torestore biodiversity.

In the face of global warming, with the frequent occurrence of extremeweather events such as heatwaves, droughts, and heavy rainfall, medicinalplants are at risk of not surviving due to environmental changes. The Companywill strengthen the research and development of high-quality medicinalplant varieties with good environmental tolerance and su?cient medicinalcontent and promote their cultivation. At the same time, we will reinforce theprotection of authentic germplasm sources. Medicinal plants in the cultivationbase must reach su?cient growth years before being harvested to ensure theycontain adequate medicinal components and prevent resource wastage at thesource.

Impact of Production, Operation and Products on Biodiversity and Action Strategies

PromotePaperless O?ce

Work.

The Company has been vigorously promoting informatization construction, implementing the OA system,

Rmeet video conferences, and online training. Most office processes can be completed through theinformatization system, which improves work e?ciency. It advocates paperless o?ce work, reducing the useof paper and the generation of wastepaper. O?ce documents are revised and transmitted via email.

Strengthen theManagement ofO?ce Supplies.

Standardize the procurement, requisition, and usage standards of office supplies to extend their service

life. Try to avoid using office supplies and Improve the Office Environment. and equipment made of woodmaterials. Actively carry out greening in the factory area and build a "garden factory" to provide employeeswith a good green o?ce environment.EnergyConservationin O?ce and

Daily Life.

Turn off office electronics such as computers, printers, and fax machines promptly after work to reduce

electricity waste. In areas such as corridors and passages, where lighting needs are low, replace traditionallighting with energy-e?cient lamps. Property management personnel will turn o? lights after working hours orset the switches to sound-controlled switches to automatically manage them, minimizing unnecessary wasteas much as possible.

Promoting Green LivingThe Company actively advocates the concept of green o?ce practices, promoting paperless o?ce, green procurement, energy-savingmeasures, and other initiatives to create a simple, moderate, and green low-carbon o?ce environment. We encourage employees tostart with themselves, practicing eco-friendly behaviors such as green commuting, waste sorting, water and electricity conservation.Through activities such as green and low-carbon themed events and ecological and environmental knowledge promotion, we guideemployees to integrate the concept of green and low-carbon living into their daily lives.Key Performance

17,380

person-times

273,214

hours

10,942

81,882291,858person-times30,400

sessions

18.1615

million minutes

times

Number of people trained inenvironmental protection :

Environmental protectiontraining hours :

Number of people covered byenvironmental protection training :

Cumulative meeting duration:

More than

Number of cloud

documents created:

Number of partici-pants: More than

Number of participationsin environmental publicwelfare activities:

Number of Rmeet video conferences:

More than

The traditional Chinese medicine residue generated during production is used as raw material. After dehydration anddrying, it undergoes pyrolysis and gasi?cation to be converted into biomass gas. This biomass gas is then burned in agas boiler to generate steam for production. Alternatively, microbial fermentation technology is used to ferment themedicinal herb residues, producing organic fertilizer for soil cultivation. Another method involves using the residueas raw material, drying it, and then burning it in a biomass boiler to produce steam for external heating.

The Company reuses a portion of treated industrial wastewater for the exhaust gas treatment spray towerreplenishment, collects rainwater for plant irrigation within the factory area, and reuses boiler condensate waterfor boiler feedwater. Wastewater generated by puri?cation equipment is used for replenishing the cooling tower. Bymaximizing the utilization of water resources and reducing wastewater discharge, the Company achieves an eco-friendly approach to its production and operational activities.

CR Sanjiu (Chenzhou) Conducts Resource Utilization of Medicinal Herb ResidueCaseCR Sanjiu (Chenzhou) has established a comprehensive energy station within its park to treat and recycle medicinal herbresidue generated during production. By converting the herb residue waste into energy, the Company reduces energy costs,achieving cost reduction and e?ciency improvement. This project can reduce carbon emissions by approximately 9,100 tonsannually and will continue to optimize its energy structure in subsequent operations, further reducing carbon emissions.

Resource Recycling

CR Sanjiu is committed to creating a production model with e?cient resource utilization and actively promotes resource recycling.We strengthen the reduction at the source and classi?cation recycling of general solid waste, exploring new pathways for recyclingand achieving e?cient circular utilization of resources. In 2024, the proportion of renewable energy in the Company's total energyconsumption increased to 6.33%.

Comprehensive Utilization of Traditional Chinese Medicine Residue:

Industrial Wastewater Reuse:

2024 Sustainability and ESG Report93

Unite as OneSharing Responsibilityfor a Harmonious Socie-tyGovernance

Strategy

SDGs

CR Sanjiu fully adhering to the concept of "People-oriented, Win-winResponsibility", the Company continues to deepen the constructionof employee health care system and career development channels,and improve the multi-level training mechanism to enhance thecomprehensive ability of employees. Meanwhile, the Company activelypromotes the sustainable development of the supply chain, and ensuresthe synergy and efficiency of the industry chain by strengthening thecompliance management of suppliers and building social responsibility. Inthe ?eld of social welfare, we focus on rural revitalization and philanthropy,explore innovative modes of assistance, build public welfare brands withsocial in?uence, and help realize the co-creation and sharing of corporateand social values.

CR Sanjiu has established a governance structure centered on the Boardof Directors, reinforced by a Sustainability Task Force. This frameworkhas built a closed-loop mechanism of "Decision-Making-Execution-Monitoring". It comprehensively covers social issues such as employeerights and interests protection, supply chain responsible governance,and social value co-creation: internally, it builds an employee growthmechanism, externally, it strengthens the ESG compliance managementin the whole life cycle of suppliers, and links rural revitalization andpublic welfare to form an ecosystem of social responsibility. Throughthe hierarchy of authority and responsibility, dynamic assessmentand stakeholder collaboration, we have achieved the comprehensiveimplementation of employee care and health, training management,supplier management, social charity, rural revitalization, etc. from top tobottom.

Risk and Opportunity Management

CR Sanjiu incorporates risks related to social issues into itscomprehensive risk management system and comprehensivelyidentifies risks related to social issues through questionnairesand on-operational site interviews. Based on the likelihood of riskoccurrence and the degree of impact, the risk priority is definedaccording to the risk level and the urgency of managementimprovement, and submitted to the Board of Directors for

approval. The Company follows up on the management andcontrol of risks related to social issues in a timely manner andreports the progress of risks to the Board of Directors. At the sametime, the Company formulates special development plans forsocial charities, rural revitalization and other opportunities toensure the effective allocation of resources and the successfulachievement of goals.Risk/OpportunityPotential ImpactResponse Strategy

Health and safety risks

Employee skill iteration lags technological changes inthe industry, which may lead to insufficient productinnovation and quality control loopholes, weakeningmarket competitiveness.

Strengthen occupational health and safety management, providenecessary protective measures and training, and create a safe andhealthy working environment for employees in an all-round andmulti-level manner.

Training anddevelopment risks

If the Company fails to provide effective training anddevelopment opportunities, it may result in employees'professional competence not being able to meet the jobrequirements, which may affect the competitiveness ofthe Company.

Establish a systematic training and development system, providedifferentiated and hierarchical training planning to meet thegrowth needs of different classes and types of employees; andset up a management channel and professional/technical dual-channel promotion mechanism to help choose the appropriatedevelopment path.

Supply chaincompliance risk

Non-compliance of suppliers leading to productiondisruption or reputational damage

Strengthen supplier access assessment, conduct training onsustainable development and establish incentives for long-termcooperative suppliers.

Public CommunicationRisk

Recognition of enterprise product promotion process maybe affected, restricting market expansion and businessdevelopment

Improve the public communication mechanism, enrich thecommunication mode, and improve the public recognition andreputation of the enterprise's products and services

Social Charity,Rural RevitalizationOpportunity

Contribute to the enhancement of the social image ofenterprises and promote the harmonious development ofenterprises and society

Actively participate in social charitable activities, innovate ruralrevitalization models, increase resource investment, and create adistinctive brand of assistance

TargetsTypeMedium and Long-term TargetsProgress towards 2024 Targets

Employee Growth

Improve the talent selection and appointment mechanism, build a multi-path career development platform, create an innovative talent trainingbase to lead the development of the industry, continue to improve thetemperature, strength and depth of employee care work, and promotethe common growth of employees and the organization.

Continuously promoting the diversification oftalent, the proportion of employees with differentbackgrounds has steadily increased, and employeecare satisfaction survey reaches over 84%.

Training Management

To create a future-oriented lifelong learning system, cultivate leadingtalents in the pharmaceutical and healthcare industry, and build aninnovative talent training base to lead the development of the industry.

Annual per capita training hours reached 30.32.

Supplier Management

Build a sustainable supply chain network, lead the development ofstandards for the Chinese medicine industry chain, and achieve fullcoverage of social responsibility in the end-to-end value chain.

100 per cent compliance with supplier sustainabilityassessments.

Social Charity

By carrying out various social welfare and charitable activities, such asdisaster relief and assistance, donating money to schools and publicwelfare, we help social development, build a better home, and show theresponsibility of the central enterprise.

Annual social charitable donations amounted to

4.4361 million RMB.

Rural Revitalization

Comprehensively promote the revitalization of the countryside, adhere tothe protection and development of Chinese herbal medicines, optimizethe industrial layout, and use model innovation, technological innovationand other means to develop the Chinese herbal medicines industry into anindustry that helps farmers to increase their income, increases the e?ciencyof agriculture, and enhances the color of the countryside.

Around industrial revitalization, talent revitalization,cultural revitalization and other aspects of CR HopeTown work, selected two rotating mayor of Jinzhaiand Tonghua town to carry out planting assistanceand consumption assistance to help revitalize theconstruction of the countryside in Guangchang County,Haiyuan County, Qingliu County.

Driving the Industry

Creating an open industrial innovation platform to promote themodernization and transformation of traditional medicine.

Participation in the formation of 1 internationalstandard

Participated in the preparation of 5 nationalstandards

Participated in the preparation of 8 industrystandards.

Protecting Employee Rights and Interests

CR Sanjiu always believe that employees are the core driving force of enterprise development and takes "people-oriented" as the value ofthe enterprise, and actively implements a series of measures to create a fair, harmonious and caring working environment for employees.The Company carries out employee satisfaction surveys every year. Our satisfaction questionnaire covers the dimensions of job satisfaction,signi?cance, happiness and pressure, and comprehensively understands the voices from employees. In 2024, the satisfaction survey of CRSanjiu's employee care satisfaction survey reaches over 84%.

We strictly comply with relevant national laws and regulations to ensure that our business activities are consistent with theTen Principlesof the United Nations Global Compact (UNGC)and theUnited Nations Guiding Principles on Business and Human Rights, and that wee?ectively safeguard the basic rights and interests of our employees to ensure that each employee works in an equal and fair environment.

Healthy Companions, Happy Employees

%labor contract signing rate

%coverage of unionized employees

Total number of employees20,031

2,322of number of new employees

Percentage of female managers

36.7

%

38.48

%of women at junior management level

44.2

%women in STEM-related positions

16.67

%

of women at senior management level

31.05

%

women at managerial level in revenue-generating functional positions

Employee

GenderStructure

53.6%

46.4%

Employee

agestructure

68.8%

23.4%

8%

4,684 aged 29 years old and below10,733 male employees9,298 female employees

1,612 persons aged 51 and over

13,735 persons aged 30-50

Employeeeducationstructure

28.2%

25.2%

40.2%

6.4%

Master's degree and above 1,289College 5,641Bachelor's degree 8,054High school and below 5,047

Key Performance

We strictly abide by theLabor Law of the People's Republic of China, the Regulations on the Prohibition of Child Laborand otherrelevant national laws and regulations and protect the rights of employees in accordance with the law. We sign formal laborcontracts with our employees, set reasonable working hours and leave systems, and fully protect the legitimate rights and interestsof our employees from being infringed upon. We have formulated comprehensive salary and employment policies to ensure thefairness and transparency of the recruitment and promotion process. We have de?ned our anti-discrimination and anti-harassmentrequirements in ourCode of Business Conduct, and we have adopted a "zero tolerance" attitude toward discrimination orharassment due to di?erences in race, ethnicity, religious beliefs, gender, social identity, status, physical health, sexual orientation,and other factors.

Protectionof basicrights andinterests

The Company has always adhered to the principle of equal employment, the values of fairness, justice and non-discriminationthroughout the entire process of employee recruitment and talent management. In the recruitment process, the Company strictlyadheres to the anti-discrimination guidelines and resolutely eliminates any employment discrimination based on factors such asgender, age, ethnicity, geography, religious beliefs to ensure that every job seeker can participate in the competition in an equalenvironment and enjoy fair employment opportunities.Adherenceto equalemployment

Revised and released the CR Sanjiu Recruitment and Allocation System and CR Sanjiu Internal Recommendation ManagementMeasures to clarify that both external recruitment and internal competition follow the principles of openness, fairness andmeritocracy, so as to systematically guarantee the introduction of high-quality talents, provide equal competition opportunitiesfor talents, and promote the reasonable mobility of talents. At the same time, we have established a regular compliance reviewmechanism for recruitment activities and arranged a professional team to monitor the recruitment policies and procedures toensure that follow laws, regulations and industry norms, and to avoid legal risks.Fair andcompliantrecruitment

The Company actively promotes the democratic management of enterprises, constantly improves the construction of tradeunion organizations, guides business units to set up trade union organizations, and supervises the renewal and addition oftrade unions. It organizes and convenes sta? congresses to consider and resolve issues of common concern to employees.Strengtheningdemocraticmanagement

Emergency drills

Hidden dangers inspection

Safety production training

CR Sanjiu has formulated theComprehensive Emergency Response Plan for Production SafetyAccidentsand other systems, and actively organized various units to carry out emergency drillsto improve the ability of personnel to deal with unexpected accidents and incidents. In 2024, CRSanjiu units carried out number of 617 EHS emergency drills, with 16,687 EHS emergency drillattendance.

We organized and carried out various special inspections, such as special inspection and remedialactions for hidden dangers, identi?ed occupational health and safety risks, continuously supervisethe rectification of EHS dangers identified in inspections, with the rectification rate of dangersreaching 99.9% in 2024; with 650,100 hours of employee safety training , and 34,711 hours of relatedparties safety training.

For all employees, we carry out safety education activities with rich forms and comprehensivecontents. The activities cover systematic safety skills training, accident warning educationcombined with actual cases, etc., and strive to make safety awareness deeply rooted in people'shearts through diversi?ed learning experiences.

Keeping Employees Safe

Safe production management

CR Sanjiu has always regarded the occupational health and safety of its employees as an important cornerstone of corporate development.The Company continues to improve the occupational health and safety management system and promotes the construction of "healthyenterprise" and "standardized production safety enterprise" steadily with higher standards and stricter requirements.

We strictly abide by the Work Safety Law of the People's Republic of China and other laws and regulations, and have formulated systemssuch as the CR Sanjiu EHSQ Responsibility Management Approach, continuously improving the work safety management system, realizingcomprehensive coverage from the system level to the implementation level, and safeguarding the rights and interests of employees in worksafety in all aspects, so as to ensure that the production and operation activities of the Company are carried out in an orderly manner in asafe and compliant environment.Key Performance

Key Performance

Total investment in production safetyRMB58,310,000

Organization of2,395safety education training sessions

%coverage of safety training

Number of full-time safety managers

Key Performance

Physical examination, monitoring and management

Care and protection for special groups

CR Sanjiu focuses on the occupational health of special employee groups, equips women withspecial protective clothing, provides disabled employees with auxiliary equipment, transfers front-line pregnant women and nursing mothers away from dangerous positions, sets up rest rooms,mother and baby rooms, distributes health books on pregnancy, and equips living electricalappliances and other operational sites to ensure that their working environment is safe andcomfortable.Occupational health education and trainingRegular occupational health and safety education and training is carried out to ensure thatemployees master the use of protective equipment, familiarize themselves with job risks andemergency measures, enhance their self-protection abilities and reduce occupational health risks.

The Company carries out physical examinations for employees in positions involving occupationaldisease hazards, requires compliance with the wearing of protective equipment and strengthensinspections; it regularly monitors harmful factors, controls pollution from the source, transmissionpathways and receptor protection, and purchases low-noise and low-pollution equipment toprotect the occupational health of employees in all aspects.

Occupational health managementWe continue to standardize the process of occupational health management, focusing on the theme of "Happy Work, Healthy Life", and activelyorganize various health activities to protect the physical and mental health of employees and create a healthy and orderly working environment.

Employee-speci?c occupational disease checkups4,523person-times

business units certi?ed to ISO 45001

Occupational health examination rate

%

"Safe Date Knowledge" campaign for safety monthCase

In 2024, CR Sanjiu (Zaozhuang) responded to the Company's instructions, closely focusing on the theme of "everyone talks aboutsafety, everyone knows how to respond to emergencies - smooth life channels", and carried out a series of "Safe Date Knowledge"activities during the safety production month to improve the Company's safety management level and employee safety awarenessand prevent safety accidents.

CR Golden Toad Occupational Health and

Safety Management System Certi?cate

CR Sanjiu (Ya'an) Occupational Health andSafety Management System Certi?cate

Robust Bene?ts System

Supporting Employee Development

We have established a compensation management system centered on "performance, competence, fairness and competition", anddetermined the compensation level by combining the value of the position, personal competence and performance results to ensure internalfairness and external competitiveness. On the basis of guaranteeing the timely payment of basic bene?ts, we provide a wide range of non-compensation bene?ts for all employees of the Company, and build an incentive mechanism that combines short, medium-, and long-termincentives to support business development and talent retention through a di?erentiated and phased incentive design that strengthens thevalue-oriented approach of responsibility, competence, and contribution.

To fully release the innovative potential of our employees and stimulate the vitality of the organization, we have constructed a smooth careerdevelopment channel and an all-round skills enhancement system. We support employees to improve their professional skills and overallquality and promote the synchronous development and win-win progress of individuals and the Company.

Statutory bene?ts

Supplementary bene?ts

Basic bene?ts

Pension insurance, medical insurance, unemploymentinsurance, work injury insurance, maternity insurance, housingprovident fund, high temperature allowance, one-child fee, etc.

Regular bene?tsHoliday bene?ts, birthday bene?ts, wedding ceremony, shuttlebus, free parking, meal bene?ts, sta? dormitory and so on.

Vacation bene?ts

National holidays, annual leave, maternity leave, marriage andfuneral leave, breastfeeding leave, family visit leave, Parentalleave, care leave,etc.

Protection bene?tsEnterprise annuity, maternity allowance, annual physicalexamination, commercial insurance, etc.

Average number of paid leave days per year

days

%

social insurance coverage rate

Total annual training attendance

306,687person-times

98.68

% employee training coverage

30.32

hours of annual per capita training hoursInvestment in various types of training amounting to

RMB10,432,000

Key Performance

Key Performance

Performance appraisal system

Talent training system

The Company combines safeguard and incentive, takes into account internal fairness and market competitiveness, relies on managementmethods to improve human e?ciency in stock business, provides incentives for incremental business, explores medium- and long-term incentivemechanisms for key positions, especially R&D and technology innovation business, and realizes the "consistency of responsibility and interest,capability and value, performance and bene?t" in sta? salary distribution, and to promote the implementation of the Company's strategic initiatives,enhancement of organizational capacity and corporate culture.The Company has established a perfect performance feedback and complaint mechanism to provide guidance and suggestions for employees.Every year, we set up multiple performance evaluation methods for different positions, such as "goal-oriented" goal management method,360-degree performance evaluation, etc., to motivate employees to accomplish their personal goals and team goals. We provide e?ective feedbackand communication of the assessment results to the employees If the employees have any doubts about the performance appraisal process orresults, they can appeal to their supervisors, human resources department and other relevant departments. Upon receipt of a complaint, therelevant person in charge shall communicate with the complainant, explain the principles and basis of the performance assessment, and carry outauditing, investigation and processing to ensure the fairness and impartiality of the performance appraisal.

Combined with the advantages and characteristics of its own pharmaceutical industry and the "14th Five-Year Plan" talent strategy, the Companyadopts a hierarchical and categorized cultivation model, and develops a suitable cultivation plan for each employee.Deeply implement the "Green Lotus Plan", which is a training program for "three types" of talents (management, science and technology, andprofessional and technical talents), to empower the training of core talents. Continuously organize and carry out labor and skill competitions,strengthen technical exchanges, and improve the technical business and innovation ability of employees.CR Sanjiu's "Three Types of Talents" Cultivation Program

Management Talent Training

Program

Cultivating Technology TalentProfessional Skill

Development? Intelligent Manufacturing Plan D? Metamorphosis Camp for R&D

Innovation Project Managers? Digital Talent Development

? R&D Professionals? Functional Professionals? Production Professionals? Marketing Professionals? Grassroots Employee Job

Training? Grassroots Employee SkillCompetition

? CR Xuechuang: Deputy Class ofDirectly Managed Cadres of CRGroup? CR Xuechuang: The Way of CRManager Training, ExcellentYoung Cadre Class? CR Sanjiu: Leader Program(general manager class)? CR Sanjiu: Industrial ChainSenior Talent Development Class? Elite Talent DevelopmentProgram? CR Sanjiu: Sword SharpeningProgram? CR Sanjiu Eagle Program NewEmployee Training Camp

for senior, middle and grassroots leaders, the Company has successively carried out and completed various training programs:

Leader Program (general manager class), industrial chain senior talent development class (director or above), LighthouseProgram (middle and senior management), and Sword Sharpening Program (?rst-line managers in the production system), etc.,to accelerate the selection and cultivation of young and outstanding reserve leaders.

mainly oriented to high-tech innovation talents such as R&D and intelligent manufacturing, CR Sanjiu has carried out the R&Dprofessional talents training program and the intelligent manufacturing talents development D program, etc., which providemore learning and development opportunities for the Company's scienti?c and technological talents.

Committed to cultivating professionals with dedication, excellent skills, a sense of innovation and the pursuit of excellence.To achieve this goal, actively organize activities including but not limited to CR Sanjiu Eagle Plan, Skill Cup, quality awarenessmonth and focused subjects.

At the same time, the Company carries out talent successionplanning to ensure that there is always a reserve of candidatesfor key positions, covering middle and senior managers in keydepartments, cultivating and empowering core talents, andretaining reserves for key positions.

Continuously forging management talent team:

Accelerating the construction of scienti?c and technological talents:

Strengthening professional skills training e?orts

CR Sanjiu management trainee program - Eagle ProgramCaseThe Company attaches importance to the introduction andcultivation of talents, especially for newcomers to the workplaceset up a trainee program. The Eagle Program, as a brand project ofCR Sanjiu's training of trainees, aims to help trainees achieve thefour major goals of "cultural integration, role transformation, goalsetting and career development". The program includes workplacegeneral knowledge training and on-the-job practical training, andinvolves a number of professional courses such as corporate andparty education.CR Sanjiu 2024 Eagle Program

Organized industry chain senior talent development classes

The Company has formulated formal employee grievance procedures, established open communication channels to ensure that thereasonable demands of the complainant are e?ectively resolved, and at the same time ensured that the grievance information and itscontents are kept strictly con?dential.Employees can communicate, exchange and complain internally through [Sanjiu Forum] [Discipline Inspection Complaints]modules on Company's office system, and [Employee Voice Platform] on "Run Work", which on one hand provides employeeswith a convenient communication channel, and on the other hand creates a positive and sunny corporate culture atmosphere forthe Company. The Company has set up the Labor Dispute Mediation Committee and formulated the workflow of labor disputemediation. The applicant can apply for labor dispute mediation, and the mediator will carry out the mediation work within the scopeof mediation acceptance and in line with the other party's willingness to mediate.The complaint handler shall correct the non-compliance based on the ?ndings of the investigation and implement penalties suchas warnings, demerits and termination of the labor contract; violations of the law shall be referred to the judicial authorities; thecomplainant shall be informed of the outcome of the complaint in a timely manner, and if the complainant has any comments on theoutcome of the complaint, he or she may ?le another complaint.

Employee Grievance Channel

Degree enhancement program

Based on the Company's strategic innovation requirements, focusing on the "introduction" and "cultivation" of scienti?c and technologicaltalents, the Company has established cooperation with Fudan University, China Pharmaceutical University and other colleges anduniversities in the ?eld of biomedicine and other ?elds, and carried out the joint cultivation project of school-enterprise doctoral degree,etc. The project is open for application by all quali?ed employees, and provides reimbursements. The purpose of this program is to furtherdeepen the collaborative education between schools and enterprises, and to cultivate high-quality talents with both solid theoreticalfoundation and rich practical experience.

Enhance promotion system

We construct a dual-channel promotion mechanism for management and professional/technical, helping employees' careerdevelopment. We dynamically adjust individual grades to empower employees' growth in an all-round way. We revise and improvethe Management Measures for Employee Promotion in CR Sanjiu Headquarters and Guanlan Base, further simplify the conditions foremployee promotion, increase the process of employee competency certi?cation, and stimulate the potential and value of employees.

Caring for Employees' Life

CR Sanjiu actively practices the corporate culture of "Care -, Responsibility -, Excellence", continuously carries out the employee care and warmingproject, pays attention to the physical and mental health of employees, and creates a "happy work, healthy life" working environment, andenhances the cohesion and sense of belonging of employees.

Solve the di?culties of employees

The labor union of CR Sanjiu attaches great importance to the care of employees in di?culty and establishes a perfect ?le managementsystem for employees in di?culty. Strictly adhering to the principles of one person, one ?le and dynamic management, it grasps the realsituation of the families of employees in di?culty in a comprehensive, for employees in di?culty, di?cult employees' children enrollment,sick employees actively work. In 2024, the labor union of CR Sanjiu carried out visits, condolences and relief work, covering a total of 141employees in di?culty, and distributed a total of RMB 789,150 of condolences.

Care for female employeesThe Company takes care of female employees who have given birth and pays the full amount of government subsidies to reducethe pressure on the payment of maternity leave wages to female employees who have given birth. In 2024, the Company assisted 46employees in successfully applying for maternity allowances, amounting to a total of 1,780,000 RMB. The Company actively implementsthe childcare leave system, granting ten days of childcare leave per year to employees' children up to the age of three. In addition, theCompany has also thoughtfully set up breastfeeding rooms to create a warm, private and exclusive space for working mothers.

Creating a warm workplaceCR Sanjiu builds an employee care system in all aspects. On cultural life, traditional festival activities, sports events and cultural andsports associations are organized throughout the year to enrich the cultural life of employees and enhance organizational cohesion. TheCompany provides on-time issuance of holiday bene?ts, birthday gift packages for new employees onboarding gift packages, etc., to carryout sta? dormitory upgrading and renovation projects, to assist in applying for public housing, equipped with commercial insurance,regular organization of physical examination, set up a Chinese medicine clinic in the park, with senior authoritative experts sitting in theclinic. The Company actively help the development of employees, organizations apply for young talent gathering project, high-level talentsubsidies, enhance the sense of belonging to the talent, create a good organizational atmosphere, and promote the common growth ofenterprises and employees.

2024 Goddess Day Event2024 Goddess Day Event

2024 Corporate Basketball League in Shenzhen2024 CR Sanjiu Employee Games

Care for employee mental healthContinuously upgrading the service mode of EAP projects such as "Run Xin Fang", unveiling the establishment of "Run Xin Fang - SanjiuBranch", psychological counselors enter one-on-one consultation to provide employees with psychological counseling services. In 2024,a total of 5 Run Xin Fang one-on-one counseling, serving more than 30 employees, has carried out 3 psychological lectures on emotionalmanagement, stress management, energy management, etc. to enhance employees' ability to regulate their emotions and self-mentaladjustment, and to protect their physical and mental health. In 2024, a total of 5 one-on-one counseling sessions were conducted,serving more than 30 employees, and 3 psychological lectures on emotion management, stress management and energy managementwere held to enhance employees' ability to regulate their emotions and self-adjustment, and to safeguard their physical and mentalhealth.

CR Sanjiu establish "Run Xin Fang - Sanjiu Branch"

Strengthening Supply Management

Adhering to the concept of social responsibility and the pursuit of excellence, we focus on optimizing the supply system, from strengtheningsupplier management, preventing risks, ensuring the quality of supply to working with suppliers to win-win, and other dimensions, andis committed to building a sustainable, safe and e?cient supply ecosystem, to provide the community with better quality products andservices.

Suppliers are pivotal strategic partners in the Company's development journey. We steadfastly uphold the core principle of collaborative win-win partnerships, employing rigorous and scienti?c selection criteria to meticulously identify every partner. In compliance with the CR SanjiuSupplier Code of Conduct, we have established management protocols such as theSupplier Quality Management Protocolto vigorouslydrive suppliers' deep integration of sustainable development practices, thereby building a robust supply chain foundation from the source.

Optimizing Supply to Serve Society

Number of supplier auditsconducted

Suppliers terminated due tonon-compliance

Potential suppliers rejecteddue to non-compliance

Supplier signing rate of theSunshine Declaration

%

CR Sanjiu strictly adheres to the Supplier Quality Management Protocol. Dedicated teams continuously collect and review suppliers'EHS management status and certi?cations, closely monitor regulatory updates, and conduct annual social responsibility assessmentsto ensure suppliers operate legally and compliantly. For centralized procurement suppliers, cross-functional collaboration amongthe procurement, production, warehouse, and quality departments ensures quarterly collection and analysis of multi-dimensionalperformance data, including quality compliance, delivery reliability, service responsiveness, continuous improvement, costcompetitiveness, external complaints. Based on evaluation results, suppliers are classi?ed into tiers, with corresponding rewards orpenalties applied.

The Company and its subsidiaries carry out comprehensive quality assessment of direct suppliers and raw material suppliers inaccordance with the regulations every year. We take the on-site quality audit score and supply quality pass rate as the key dimensions,and dynamically evaluate suppliers in stages at the beginning of the year in combination with the audit cycle score and the supplyquality pass rate of the previous year, formulate differentiated audit and risk control strategies according to the rating results,and eliminate suppliers with poor performance, ensure the quality and stability of the supply chain, and promote sustainabledevelopment.

Supplier management

Supplier performance appraisal

Key Performance

Ensure the Quality of SupplyWe actively promote the construction of a professional, large-scale and integrated modern logistics system, and are committed to meetingthe medical needs of consumers and patients with high quality and e?ciency, so as to ensure that drugs can bene?t the general populationin a timelier manner.

In an increasingly complex supply chain environment, supplier risk can impact business operations at any time. We see the preventionof supplier risk as a key part of supply chain management. By building a sound risk response mechanism and implementing preciseand e?ective measures, we can ensure the stability and security of the supply chain and safeguard the sustainable development of theenterprise.

We have established a risk monitoring indicator of "core material supply risk degree", the core material supply risk degree is a measureof the number of core materials that may have the risk of tight supply or abnormal price ?uctuations in the next 3-6 month cycle,and the risk degree of individual material supply is indicated by red, yellow and green lights, yellow lights indicate that there may begeneral supply risks, and red lights indicate that there may be major supply risks.

By continuously carrying out risk assessment and early warning of core material supply, we actively understand the Company's corematerial supply market situation, formulate short-, medium- and long-term response measures based on the supply risks faced,coordinate the forces of all parties that can help solve supply risks, and establish channels to ensure supply security.

Build a warehouse network layout planning auxiliary decision-making system and a scientific data model and use algorithmsto calculate reasonable warehouse network layout suggestions in real time according to the Company's business scale, deliverytimeliness, logistics costs and other factors.

Divide warehouse attributes according to product attributes and production and marketing areas and adopt the operation mode ofcentral warehouse + regional warehouse to achieve multi-warehouse collaboration and improve logistics operation capabilities andcustomer service levels.

Preventing Supplier Risk

Supply chain risk monitoring

Supply chain risk prevention

Warehouse network layout planning

Warehouse attribute division

Carry out uni?ed and centralized management of production and sales logistics, establish a standardized transportation managementprocess, and have a variety of distribution modes such as vehicle, LTL, express delivery, etc., to meet the needs of di?erent businessscenarios and ensure the quality and safety of product transportation.

Gradually transform the third-party logistics and warehousing business into a ?exible billing model and explore a tiered billing modelto reduce warehousing costs; Create a ?xed capacity pool transportation mode, and set up ?xed round-trip transportation routesthrough warehouse network planning to realize full-load operation of vehicles, improve transportation timeliness and reduce costs.

Using ERP, WMS and other systems to achieve full-process traceability in logistics, to provide data support for logistics operation andoptimization; The self-managed warehouse continues to promote automated operations, has realized fully automatic and unmannedreceiving, and will promote automatic loading projects in the future.

Formulate theCR Sanjiu Logistics Supplier Procurement Management Rulesand other systems, establish a logistics emergency supportmechanism for unexpected events, and respond to emergencies such as epidemics and disasters in a timely manner in accordance with the

Logistics Emergency Management Operation Rulesto ensure the stable operation of logistics business.

Integrated transportation construction

Lean logistics construction

Smart logistics construction

Logistics emergency management

Work Together with Suppliers for a Win-win Situation

We attach great importance to win-win cooperation with suppliers, and continuously strengthen the capacity building of supplier partnersthrough a series of e?ective systems and measures. We provide professional technical guidance for suppliers, improve their ability to ful?lltheir responsibilities, and continuously enhance the sustainable development of the supply chain through on-site technical guidance andinformation sharing with key raw and auxiliary material suppliers.

%completion rate of supplier auditrecti?cation in 2024

The Company's headquarters and subsidiariesorganized audit trainings for suppliers, with atotal of2,550person-times

The total number of training hours was

21,759.5 man-hours

CR Sanjiu (Chenzhou) Strengthens Supplier Management and Builds Safety Defense LineCase

Collaborative Development

We uphold the concept of open and win-win cooperation, actively build a diversi?ed strategic cooperation system, continuously deepen thecollaborative interaction with partners, and make every e?ort to promote the overall leap of the industrial chain. We work with many partnersto continue to expand the breadth and depth of cooperation, so as to achieve a beautiful vision of common development and mutualbene?t.

We attach great importance to in-depth exchanges with multiple stakeholders such as governments, enterprises, hospitals and internationalpartners, uphold an open and cooperative attitude, actively build communication bridges, and continuously deepen cooperative relationswith all parties. Integrate the superior resources of all parties, realize information sharing, resource complementarity, and jointly promoteindustry progress and innovation.

Collaborate for Mutual Bene?t and SocialContribution

School-enterprise cooperation

Industry alliance cooperation

Based on the Company's strategic innovation requirements, focusing on the "introduction" and "training" of scienti?c and technologicaltalents, it has established cooperation with Fudan University, Sichuan University, Chongqing University and other universities in the?eld of biomedicine, carried out joint projects of doctoral and master's degrees in engineering, and further deepened school-enterprisecollaborative education for all quali?ed Company employees, and cultivated high-quality talents with a solid theoretical foundation andrich practical experience.

We have led the establishment of many industrial platforms such as the Traditional Chinese Medicine Industry Innovation Alliance, andhave joined forces with many traditional Chinese medicine enterprises, universities, scientific research institutions and upstream anddownstream suppliers to jointly promote the standardization, modernization and international development of the traditional Chinesemedicine industry. By integrating industrial chain resources, we optimize the industrial layout and achieve e?cient resource allocation andcoordinated industry development.

CR Sanjiu (Chenzhou) examined key aspects such as potential safety hazards of suppliers' operations as well as the environmentalimpact of suppliers' operations, implements scienti?c grading and classi?cation of suppliers, and adopts di?erentiated controlmeasures. In 2024, the Company organized safety education and training activities for 23 related parties. All participants passed theassessments, e?ectively enhancing the safety awareness and skills of related parties and further strengthening suppliers' sense ofresponsibility.

Joint Laboratory of Medicine and Food Homology Industry -

Unveiling Ceremony

Conference on the High-quality Development of Artemisia Annua Industry

Driving for Industry DevelopmentWe firmly promote in-depth strategic synergy with our partners, and regularly hold business negotiations, industry forums and industrysummits to discuss market and technological innovation, realize resource sharing, and explore new paths for industrial development. At thesame time, we build an academic exchange platform, actively participate in industry activities, implement national policies, and enhance thein?uence of the industry. Actively participate in and lead the formulation of industry standards, make e?orts in terms of product quality andproduction process, improve the overall quality and operational e?ciency of the industry, and promote the innovation and development ofthe traditional Chinese medicine industry.

Participated in the formation of

international standard

Participated in the preparation of

national standards

Participated in the compilation of

industry standards

Key Performance

Building a Caring Community

CR Sanjiu actively participates in social welfare undertakings, responds to the national strategy with practical actions, and contributes to theconstruction of rural revitalization. We give full play to its business advantages in the ?eld of medicine and health, actively participate in socialservices, empower community construction, and promote local economic development and social progress.

CR Sanjiu understands its own development is closely linked to the interests of the surrounding communities, and to build a harmoniousrelationship between the enterprise and the community, we are committed to maintaining a smooth communication mechanism with thesurrounding communities.

Caring for the Community and Giving Back toSociety

Leveraging the Platform of NPC Deputies to Promote Community Co-construction and IndustrialDevelopment

Strive to be a caring person for the masses and serve the society with "Warmth"

Case

Case

The deputies of the 39th People's Congress of China Resourcesactively performed their duties, and put forward four targetedand constructive suggestions, including theSuggestions onStrengthening the Rectification of Safety Hazards on Qingji Roadand Preventing Traffic Accidentsin key areas such as industrialdevelopment, talent housing, and traffic improvement. In theprocess of communication with the public security and lawdepartments, it has promoted the solution of the surrounding roadtra?c problems and contributed to the social development of thesurrounding people.

In 2024, the Party Committee of CR Sanjiu will stick to its original aspiration, ful?ll its mission, deepen the practice of "I Do PracticalThings for the Masses", and complete 147 practical projects. Among them, the Party Branch of the Southern District of ChinaResources Sanjiu OTC Business Division and Jiangxi Yifeng Pharmacy went to the nursing home in Xihu District, Nanchang City tocarry out loving condolences, talk cordially with the elderly, learn more about the physical condition and living conditions of theelderly, and send 200 health gift packages to the elderly.

Feedback from National People's Congress deputies

attending the meeting

Practice Charity and Public Welfare

Under the guidance of the mission of "caring for public health and creating a better life together", CR Sanjiu actively fulfills its socialresponsibilities as a central enterprise and carries out diversi?ed public welfare activities such as education assistance, donations, free clinics,and visits to CR Hope Town. Through these practices, CR Sanjiu has continuously strengthened its brand image of social responsibility andcontributed to the high-quality development of its business. In 2024, the Company's total public welfare donations will reach 4.4361 millionRMB. There were 243 participants in volunteer activities, with 507 hours of volunteer service.

Conveying the Power of Love Through Hand-in-Hand Assistance

"Feeling the Pain and Cultivating Dreams into Light"

Case

CaseFrom 2007 to 2024, Kunming Pharmaceutical Group and its employees spontaneously organized "One-to-one" student assistanceactivities for students in impoverished areas for 17 consecutive years. In June 2024, the "One-to-one" student assistance publicwelfare project was launched again in Sandan Township, Kuanzhuang Township, Fumin County, Kunming City, and YunlongTownship, Luquan County. This year, a total of 195 students were supported, including 149 primarily in Fumin County and othersin Luquan County, with each aided student receiving a scholarship of 1,000 RMB annually. As of 2024, a total of 2,534 poor studentshave been supported, with scholarships totaling 2.534 million RMB donated.

Kunming Pharmaceutical Group's "One-to-one" student assistance activity

CR Sanjiu (Tangshan) attaches great importance to fulfilling its social responsibilities and continuously responds to the localgovernment's 'Hand-in-Hand' assistance work plan. To effectively implement the assistance work, on June 12, 2024, the PartyBranch of CR Sanjiu (Tangshan) set up a Runtong Volunteer Service Team composed of Party members, carefully prepared the "999Pediatric Paracetamol, Chlorpheniramine and Pseudoephedrine Granules Gift Pack", and visited Anjiazhuang Village in the High-tech Zone to send warmth and care to poor children.

"The Original Intention does not Change, the Rain Drops Cultivates the Heart", China Resources SanjiuHelps Rural EducationCase

Ya'an Sanjiu Primary School theme activities

Hubei's First "Xiaoping Science and Technology Innovation Laboratory" was UnveiledCase

On October 24, 2024, the "999 Aonuo Xiaoping Science andTechnology Innovation Laboratory", jointly built by the China YouthDevelopment Foundation and 999 Aonuo, was unveiled in LeninPrimary School in Hong'an County, Hubei Province. "999 AonuoXiaoping Science and Technology Innovation Laboratory" is usedfor primary and secondary school science courses and scienceclassroom special teaching, promoting the revitalization of ruraleducation and stimulating young people's enthusiasm for scienti?cexploration. Since 2020, three "Xiaoping Science and TechnologyInnovation Laboratories" have been donated and built in Xinjiang,Shaoshan, Hunan, and Hong'an, Hubei.

Education and Talent Revitalization

CR Sanjiu actively responds to the national strategic deployment and unswervingly implements the rural revitalization policy. The Companyfocuses on the all-round development of local industries, talents, culture and ecology, and takes industrial assistance and educationassistance projects as the key investment direction and strives to achieve the comprehensive revitalization of rural areas through precisepolicies. We have actively built a resource sharing platform with various stakeholders, fully integrated the superior resources of all parties,and contributed to the industrial upgrading, talent training, cultural inheritance and ecological protection of rural areas.

Education is an important cornerstone of national rejuvenation and social progress, and it is a moral and political project that will bene?t thepresent and future generations. Over the years, CR Sanjiu has always adhered to a strong sense of social responsibility, actively participatedin the cause of rural education, and helped the revitalization of local education and talents with practical actions.

Rural Revitalization, Rich and Beautiful Society

Since 1997, China Resources Sanjiu (Ya'an) has donated to builda total of 8 Sanjiu Primary Schools across six counties in twodistricts of Ya'an. Over the past 27 years, it has continuously fundededucation, with a cumulative investment exceeding 5 millionRMB, bene?ting more than 30,000 teachers and students. With thesupport of the local government and caring individuals, the SanjiuPrimary Schools have improved their teaching facilities, optimizededucational resources, and signi?cantly narrowed the gap betweenurban and rural schools, as well as among di?erent schools, greatlyenhancing their attractiveness. In the past ?ve years, the number ofstudents has increased from over 2,000 to nearly 4,000, e?ectivelyensuring high enrollment and progression rates among school-agechildren. Currently, some students who have received the SanjiuScholarship have chosen to join our company after graduating fromuniversity, in order to give back to society.

The activity site of the Xiaoping Science and TechnologyInnovation Laboratory of the Aonuo Hope Projectt

Industrial Revitalization

Ecological revitalization

Based on the development strategy of the whole industry chain, CR Sanjiu deeply integrates the development of the Chinese herbal medicineindustry with the rural revitalization strategy, from the whole chain of Chinese herbal medicine seed and seedling breeding and breeding,standardized planting of Chinese herbal medicines, and fresh processing of Chinese herbal medicines, through various cooperation modessuch as "Order Agriculture" and "Company + Cooperative + Farmer", and in the way of "Demonstration Base + Radiation Base", it vigorouslydevelops the standardized planting of Chinese herbal medicines, solves the employment of rural labor, improves the structure of agriculturalindustry, and helps rural revitalization.In 2024, CR Sanjiu built 40 varieties of Chinese herbal medicine planting bases in 21 provinces, nearly 100 counties and more than 400 villagesacross the country, promote more than 33 million mu of medicinal material planting bases, and build or jointly build 10 production andprocessing bases to process nearly 10,000 tons of Chinese herbal medicines; More than 140 cooperatives and village committees have beendriven, and tens of thousands of rural households have been promoted.

Deeply combining the regional characteristics of the origin of medicinal materials and guided by the "Two Mountains Theory", CR Sanjiuunswervingly contributes to the coordinated development of rural revitalization and ecological environmental protection, and realizes thetransformation of lucid waters and lush mountains into gold and silver mountains.The Company actively explores and vigorously promotes the barren mountains and understory ecological planting models of Chinesemedicinal materials such as Gangmei and Trifurans, improves the ecological environment of barren mountains, and successfully transformsthe originally barren mountains into resources with economic value, with a total area of 88,000 acres of Chinese medicinal materials plantedunder the forest.

Government-Enterprise Collaboration for Poverty Alleviation and Wealth CreationCase

The Kun Traditional Chinese Medicine and Shuangbai County give full play to the advantages of government-enterprise linkage, combineproduct strategy and industrial poverty alleviation and upgrading needs, and tap the characteristic resources of Chinese herbal medicineproduction areas. After carrying out the investigation, we cooperated with the local government to build a demonstration base for thestandardized planting of authentic medicinal materials. Through the model of "Company + farmer + base", Kun Traditional ChineseMedicine not only ensures the quality and supply of medicinal materials, but also drives the income of growers. Kun Traditional ChineseMedicine actively purchases local authentic medicinal materials, and cooperates with Taihua Fenggong, Shuangbai Yunling and otherenterprises with an amount of 50.498 million RMB. Help more than 20,000 Chinese herbal medicine planting farmers in 8 townships andtowns in the county to help farmers increase income.

The Llisting Ceremony of the Standardized Planting

Ddemonstration Base

Health Support

Consumption Assistance

CR Sanjiu actively carries out rural health assistance, continuously gathers the strength of various parties, gathers broad consensus,continuously improves the fairness and accessibility of health services, improves the level of primary medical services, and consolidatesthe health cornerstone of rural revitalization by promoting the sinking of high-quality medical resources. The Company continued to carryout the "Healthy Village" public welfare project and donated 1.5 million RMB in cash and materials with a total value of about 800,000 RMBthrough the China Women's Development Foundation.

In 2024, the State-owned Assets Supervision and Administration Commission of the State Council will actively encourage central enterprisesto carry out the "cohesion action" of consumption assistance, and help and support counties through procurement and marketing, strongfoundation empowerment, exchanges and mutual learning, etc., and CR Sanjiu will actively participate in it, and organize the purchase ofagricultural products of 1.0792 million RMB during the event.

Promote the modern management of grassroots hospitalsCase

CR Sanjiu, together with China Resources Shuanghe, China ResourcesPharmaceutical Commercial, China Resources Boya Biotech, Dong'eEjiao and other units, has cooperated with the Capacity Building andContinuing Education Center of the National Health Commission, andhas completed 6 training sessions and trained 951 hospital presidents.The students were organized to walk into Dong'e Ejiao Industrial Park,Sanjiu Guanlan Base, and Jiangzhong Medicine Valley to deepen thedean's understanding of the development history, brand products, andred culture of the China Resources Pharmaceutical Department, whichwas widely praised by the students.

Training Event

A Small Chrysanthemum, Sowing Big HopeCase

In 2024, CR Sanjiu will combine the promotion model of "courtyardeconomy" in Jinzhai County to solve the problem of abandonedland and rural idle labor employment, promote the planting ofwild chrysanthemum in Wujiadian Town of about 8,500 mu, buildthe Dabie Mountain Medicinal Botanical Garden, collect more than300 species of wild medicinal plants, and 139 wild chrysanthemumgermplasm resources.

Farmers Grow Their Own Wild Chrysanthemum Gardens

2024 Sustainability and ESG Report117China Resources Sanjiu Medical & Pharmaceutical Co., Ltd.116

Outlook for 2025

In 2025, as the key period for the "14th Five-Year Plan" draws to a close, it will also be a year of deeper reforms. CR Sanjiu shoulders the importantresponsibility of advancing the development of traditional Chinese medicine and safeguarding public well-being. We will continue to give our allin this mission. Guided by the mission of "Caring for Public Health and Creating a Better Life Together," we will remain steadfast in our values andsense of responsibility as pharmaceutical professionals. We will fully integrate ESG principles (Environmental, Social, and Governance) into ourmanagement processes and practice our social responsibility and mission in areas such as economic, social, environmental development, and theinnovation of TCM, progressing boldly in the tide of the times.Deepening quality innovation to drive the new productive force of TCM. We have always prioritized improving product quality and safety.We will continue to enhance our quality management system, strengthen key quality control processes, and ensure comprehensive, all-around,and high-quality protection for public health. We will adhere to the "Innovation + Brand" dual-driven approach, continuously enhancing ourindependent R&D capabilities, accelerating the integration of intelligent manufacturing and TCM R&D, and providing society with more "safe, high-quality, e?cient, and environmentally friendly" pharmaceutical products and services.Practicing green development and building an eco-friendly pharmaceutical ecosystem. We firmly believe that "Lucid waters and lushmountains are invaluable assets" and will incorporate the concept of green low-carbon development into every aspect of our operations. We willcontinue to optimize production processes, improve resource utilization e?ciency, reduce energy consumption, and aim to be a leader in buildinggreen enterprises. We will actively respond to the "Dual Carbon" strategy, implement the carbon peak and carbon neutrality action plan to highstandards, accelerate the transformation to green and low-carbon operations, and contribute more to the development of a beautiful China.

Strengthening responsibility and engaging in diverse social causes. We are deeply committed to the well-being of society. By leveraging theadvantages of the TCM industry, we will support rural revitalization through industrial assistance, technical training, and other methods, promotethe development of TCM herb planting and related industries, and help increase farmers' income. We will continue our charitable and publicwelfare work, including donating medical products, o?ering free clinics, promoting health education, and organizing volunteer activities, bringingreal bene?ts to people's lives.Deepening ESG practices and shaping a responsible corporate image. We will deeply integrate the ESG principles into our corporatemanagement, improve our ESG management system, and drive continuous optimization of governance capabilities and operational e?ciency. Wewill strengthen communication and collaboration with stakeholders, listen to the voices of employees, consumers, investors, and communities, andcontinuously improve our ESG practices, shaping an excellent corporate brand.The journey ahead is long, but the wind is strong, and despite the heavy responsibilities, we are determined to press on. Looking ahead, CR Sanjiuwill resolutely ful?ll its mission, using the development of new productive forces as the engine for building a world-class enterprise. We will continueto innovate, optimize quality systems, practice green development, engage in social causes, and make strides on the path of TCM inheritance andinnovation. We aim to contribute more to the construction of a "Healthy China" and write a glorious new chapter in our ESG journey.

Economic performance

Key Performance Table

Economic PerformanceIndicatorsUnit202420232022Total revenuesRMB 10,0002,761,661.182,473,896.331,807,946.15Total assetsRMB 10,0004,008,197.23 4,014,845.592,712,278.17Total pro?tRMB 10,000 459,361.07 375,445.32296,343.65Net pro?t attributable to shareholders oflisted companies

RMB 10,000336,788.90 285,293.17244,880.21Total TaxesRMB 10,000289,861.48 292,896.93215,518.57Total Investment in R&DRMB 10,00095,297.63 88,895.1273,638.47

IndicatorsUnit202420232022Pass rate of drug sampling tests%10010099.9Number of complaints received aboutproducts and services

Piece11719831Complaint handling rate%100100100Product and service satisfaction%100100100Responsible purchasing ratio%100100100Rate of suppliers passing quality,environment and occupational healthand safety system certi?cation

%100100100

Market Performance

Social Performance

IndicatorsUnit202420232022

Labor contract signing rate%100100100Social insurance coverage rate%100100100Number of paid vacation days per capita per yearDay87.98.53Number of new employeesPerson2,3222,2861,860Total number of employeesPerson20,03120,31815,599--By genderMale employeesPerson10,73310,8948,414Female employeesPerson9,2989,4247,185--By employment typeFull-time employeesPerson20,03120,31815,599Part-time employeesPerson000--By age29 years old and belowPerson4,6845,0043,73730-50 years oldPerson13,73513,67910,48851 years old and abovePerson1,6121,6351,374--By educationGraduate and abovePerson1,2891,048786UndergraduatePerson8,0547,4045,508Junior collegePerson5,6416,0674,494High school and belowPerson5,0475,7994,811Comprehensive employee turnover rate%10.5413.512Number of ethnic minoritiesPerson1,846810812Percentage of female managers%36.73534.00Number of employees with disabilitiesPerson12155

IndicatorsUnit202420232022Employee satisfaction%84.298.0485Total annual training attendancePerson-time308,876306,922308,105Employee training coverage%98.6895.77100Annual per capita training hoursHour30.32 14.1114.26Annual investment in employee trainingRMB 10,0001,043.2776515Health checkup rate of all employees%10010099.67Occupational health examination rate%100100100Number of work-related deathsPerson000Number of deaths due to occupational diseasesPerson000Investment in helping employees in di?cultyRMB 10,00078.91521.1221.85Investment in production safetyRMB 10,0005,8314,9474,064Number of full-time safety management personnelPerson229339257Employee safety training hoursHour650,100566,273174,445Safety training hours of related partiesHour34,71115,81911,347EHS emergency drill attendancePerson-time16,68716,7209,420Number of EHS emergency drillsPerson-time617465312Extraordinarily major accidentsItem000Major accidentsItem000Serious accidentsItem000General accidentsItem200Number of fatal accidents Time000Number of fatalities in safety accidentsPerson000Lost time rate of employees in million man-hours

Person/millionhours

0.520.121.04Lost work days due to work-related injuries Day53321-

IndicatorsUnit202420232022

Total Investment in Environmental Protection RMB 10,0004,2344,3683,649Investment in Energy Saving RMB 10,000663562352Number of people trained in environmentalprotection

Person-time17,38014,00613,315Number of people covered by environmentalprotection training

Person10,9428,5676,275Environmental protection training hoursClass hours273,214111,723122,120Number of participation in environmental publicwelfare activities

Time969886Total wastewater emission10,000 tons268.02299.86257.74Total emission of waste gas10,000 cubic meters863,248.98765,540.25575,522.40Total COD emissionTon60.0267.1458.77COD emission intensityTons/RMB 10,0000.0000340.0000350.000034Total ammonia nitrogen emissionTon2.012.391.68Ammonia nitrogen emission intensityTon/RMB 10,0000.0000010.0000010.000001Total NO

X emissionTon47.8766.3438.44NOX emission intensityTon/RMB 10,0000.0000270.0000350.000022Total SO

emissionTon3.474.702.66SO

emission intensityTon/RMB 10,0000.0000020.0000020.000002Total emissions of particulate matter (PM)Ton8.1910.001.44Emission intensity of particulate matter (PM)Ton/RMB 10,0000.0000050.0000050.000001Total emissions of volatile organic compounds(VOCs)

Ton5.878.8711.23Emission Intensity of Volatile OrganicCompounds (VOCs)

Ton/RMB 10,0000.0000030.0000050.000006Total amount of medical waste (HW02) generatedTon125.75128.2749.92Total amount of waste pharmaceuticals (HW03)generated

Ton201.69340.86219.09Total amount of other hazardous wastesgenerated

Ton675.31783.22566.92Total hazardous waste generationTon1,002.751,252.35835.93

Environmental Performance

IndicatorsUnit202420232022

Intensity of hazardous waste generationTon/RMB 10,0000.0005660.0006570.000480Amount of hazardous waste disposalTon1,116.851,171.47862.25Total amount of general industrial solid wastegenerated

Ton144,261.22134,557.2226,094.72General industrial solid waste generationintensity

Ton/RMB 10,0000.08150.07060.0150Comprehensive utilization of general industrialsolid waste

Ton139,452.47133,831.0325,825.43Recycling rate of general industrial solid waste% 96.6599.4498.94Total industrial solid waste generationTon145,263.97135,809.5726,930.65Gasoline consumptionTon50.0859.6134.37Diesel consumptionTon167.40171.72107.83Purchased electricity consumption10,000 kWh21,660.5523,331.4317,714.37Purchased steam consumptionMillion kilojoules536,173.38791,759.19685,744.70Natural gas consumption10,000 standard m

2,525.492,647.832114.31Thermal energy consumptionMillion kilojoules536,173.38791,759.19685,744.70Clean energy consumptionTon of standard coal5136.685,788.571,331.35Total comprehensive energy consumption

10,000 tons ofstandard coal

8.08389.47547.4569Comprehensive energy consumption per RMB10,000 of added value (comparable price)

Ton of standard coal/RMB 10,000

0.09810.11000.0876Comprehensive energy consumption per RMB10,000 of production value (comparable price)

Ton of standard coal/RMB 10,000

0.04560.04970.0428Comprehensive energy consumption per RMB10,000 of total revenues

Ton of standard coal/RMB 10,000

0.02930.03830.0412Consumption of toxic and hazardous materialsTon1,412.905421.11—Consumption intensity of toxic and harmfulmaterials

Ton/RMB 10,0000.00080.0028—Total GHG emissionsTon of CO

e222,120.65276,450.88283,297.26Scope I - direct GHG emissionsTon of CO

e55,312.1958,235.7349,673.61Scope II - indirect GHG emissionsTon of CO

e166,808.46218,215.15233,623.65GHG emission per RMB 10,000 of productionvalue (comparable price)

Ton of CO

e/RMB10,000

0.12540.1451 0.1627

IndicatorsUnit202420232022GHG emission per RMB 10,000of total revenues

Ton of CO

e/RMB10,000

0.08040.11170.1567Total industrial water usageTon29,929,123.4029,444,432.5011,682,172Industrial water intensityTon/RMB 10,00016.901015.44616.6746Freshwater usage in industryTon4,224,1324,971,9513,965,510Freshwater usage per RMB 10,000 of industrialoutput value (at comparable prices)

Ton/RMB 10,0002.38542.60822.2657Industrial circulating water consumptionTon25,704,99124,472,481.507,716,662Industrial water reuse rate% 85.8983.1166.06Total industrial water savingsTon25,704,99124,472,481.507,716,662O?ce and domestic electricity consumptionkWh23,125,158.1120,791,860.3517,315,718.05O?ce and domestic water consumptionTon372,936.572,629,996.671,926,286.53O?ce and domestic wastewater generationTon326,540.572,488,536.131,808,202.37O?ce paper usagePiece19,882,033.9329,917,20725,913,355O?ce waste disposal volumeTon2034.52621.81—Total packaging material usage by weightTon71,12398,04735,826

IndicatorsUnit202420232022

Percentage of female directors on the Board of Directors%18.1818.1818.18Number of shareholders' meetings heldTime76 7Number of board of meetings heldTime241318Issuance of regular reportsItem22 2Issuance of temporary announcementsItem13167 91Coverage of anti-corruption training%100100 100Hours of employee anti-corruption trainingHour160,50053,435 37,500Convening of company warning and education conferenceTime23 2Percentage of employees receiving ethics training%100100 100

Governance Performance

Report Catalog

Corresponding Indicatorsof China Corporate SocialResponsibility ReportingGuidelines (CASS-ESG 6.0)

Reference Indicator Systemfor ESG Special Reporting ofListed Companies Controlledby Central Enterprises

Message from the ExecutiveP2.1Feature Story 1: Synergistic Development of the WholeIndustry Chain to Create Advantages in the TraditionalChinese Medicine Industry

S2.1.15Feature Story 2: Leading Green and Low-CarbonDevelopment and Building the Near-Zero Carbon Park

E1.1.11, E1.1.15-E1.1.16E3.1.2, E3.2.1, E3.3.1

About Us

Company Pro?leP3.114th Five-Year Plan P3.2Corporate Culture P3.2Brands and ProductsP3,3G1.2Organizational StructureP3.4Focus 2024-

SustainabilityManagement

Sustainability and ESGConcepts

G1.1.7G1.1, G1.3Sustainability and ESGWork Implementation

G1.1.1-G1.1.8, G1.1.10-G1.1.12StakeholderCommunication

G1.3.1-G1.3.2G3.1,G3.2.G3.3Materiality IssuesManagement

G1.1.9Innovation-Driven,Pioneering NewFrontiers withTechnologicalBreakthroughs

Focus on Innovation andStable Development

S2.1.1-S2.1.13S2.3DeepeningTransformation forSustainable Development

S2.2.1-S2.2.7S4.4

Index of Indicators

Report Catalog

Corresponding Indicatorsof China Corporate SocialResponsibility ReportingGuidelines (CASS-ESG 6.0)

Reference Indicator Systemfor ESG Special Reporting ofListed Companies Controlledby Central Enterprises

Governance withWisdom, StrengthenFoundations for theCompany Development

Uphold Integrity, Operatein a Sound Manner

S3.2.1-S3.2.2G2.1-G2.2, G4.1-G4.2, G5.1-G5.2Craftsmanship andResponsible Operation

G2.1.1-G2.1.8, G2.2.1-G2.2.3S4.1Strengthen PartyConstruction andCompliant Operation

-Quality Escort, NewQuality ProductiveForces PromoteDevelopment

Control the Source ofMedicines, SafeguardHealth

S3.3.1-S3.3.14S2.1Optimizing Services,Protecting Health

S1.2.7, S2.1.14, S3.3.15-S3.3.17,

S3.4.1-S3.4.4

S2.1-S2.2

Low-Carbon Leadership,Jointly Creating a GreenHome

Strengthen Control,Advocate GreenDevelopment

E2.1.1-E2.1.9, E2.2.1, E2.2.3,

E2.2.5-E2.2.7, E2.4.1-2.4.4,

E3.1.2-E3.1.5, E3.2.3-E3.2.4

E5.1-E5.6Multi-dimensional CarbonReduction, ProtectingGreen

E1.1.1-E1.1.6, E1.1.12-E1.1.15,E1.1.19

E3.1-E3.4,E5.1Ecological balance,building green

E2.3.1-E2.3.5, E3.3.1-3.3.7

E1.1-E1.4,E2.1-E2.3,

E4.1,E5.2,E5.3

Unite as One, SharingResponsibility for aHarmonious Society

Healthy Companions,Happy Employees

S4.1.1-S4.1.12, S4.2.1-S4.2.6,S4.3.1-S4.3.6

S1.1-S1.2,S1.4,S1.5Optimize Supply, ServeSociety

S3.1.1-S3.1.4Synergy and Win-Win,Help Society

S2.1.3S3.1-S3.2Caring for the Community,Returning to Society

S1.2.1-S1.2.7S4.2-S4.4Revitalize the countryside,enrich the society

S1.1.1-S1.1.5Outlook for 2025A1

Report Catalog

Corresponding Indicatorsof China Corporate SocialResponsibility ReportingGuidelines (CASS-ESG 6.0)

Reference Indicator Systemfor ESG Special Reporting ofListed Companies Controlledby Central Enterprises

Key Performance Table

A2, E1.1.7-E1.1.8, E2.1.2.E2.2.1-E2.2.4, E2.2.8-E2.2.9,E3.1.1, E3.2.1-E3.2.2, S4.1.3-S4.1.7,S4.3.3-S4.3.6, G2.1.5-G2.1.7

E1.1.1,E1.1.2,E1.2.2,E1.3,E1.4.1,E2.1.3,E2.1.5,E2.2.1,E2.2.2,E2.3,E3.1.3,E

3.1.4,E3.1.6,S1.1.2,S1.2.2,S1.2.4,S1.3

.3,S1.3.4,S1.5.3,S1.5.1,S2.1.2,S3.1.1,G3.2.1Index of IndicatorsA3FeedbackA6About this ReportP1.1-1.2

Dear reader,Thank you very much for taking the time to read this report. In order to gain a deeper understanding of your expectations and needsregarding the sustainable development and ESG e?orts of CR Sanjiu, and to continuously improve the quality of our work, we are conductingthis survey. We sincerely invite you to participate. Your opinions and insights are vital to us. We deeply appreciate your valuable feedback andsuggestions!

1. Your identity in relation to CR Sanjiu:

?□ Employee???□ Consumer/Patient??□ Partner??□ Investor??□ Regulator?□ Other Government Department????? □ Media???□ Other

2. Are you satis?ed with the overall content of this year's report?

?□ Yes??????□ No?????????□ Average

3. Has the information you are concerned with been covered in this year's report?

?□ Yes??????□ No?????????□ Average

4. What are your expectations or suggestions for next year's sustainable development report?

?□ Innovative report themes????? ?? □ Innovative structure and approach ????? □ Clear logical ?ow?□ Broader application of sustainability standards ??? ?□ More user-friendly interface ??□ More approachable language?□ Other (Please specify)

5. Do you have any suggestions or expectations for our sustainable development work?

?□ Develop a long-term sustainability plan???□ Strengthen the management of sustainability initiatives?□ Broaden external communication e?orts??□ Plan new impactful public welfare projects?□ Include sustainability-related performance in management assessments??□ Other (Please specify)

Feedback

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd.Address: No. 1, Guanqing Road, Guanhu Street, Guanlan High-tech Zone, Longhua District, Shenzhen,Postcode: 518110Fax: [phone]Phone: [phone]Email: [e-mail] site: https://www.999.com.cn

You can communicate your feedback through the following channels:

This report is the 16th annual sustainability and ESG report published by China Resources Sanjiu Medical & Pharmaceutical Co., Ltd.since 2009. The report, themed "Responsibility for a Better Future Together," reflects the Company's efforts and achievements ineconomic, social, environmental, and governance aspects in 2024, responding to the expectations and concerns of stakeholders.

About this Report

Time PeriodReport Commitment

Scope of the ReportReference Standards

Terminology

Preparation Process

How to Access

Data Explanation

The report covers the period from January 1, 2024, to December31, 2024, consistent with the annual report. Some content hasbeen extended for better comparability and forward-lookinginsights.

CR Sanjiu guarantees that the contents of this report are free fromany false records, misleading statements, or material omissions,and takes full responsibility for the authenticity, accuracy, andcompleteness of the content.

This report covers China Resources Sanjiu Pharmaceutical Co.,Ltd. and its subsidiaries and a?liates. The subject disclosed in thisreport is consistent with the annual report.

This report was prepared in accordance with the Guidelines forSocial Responsibility of Central Enterprises issued by the State-owned Assets Supervision and Administration Commission(SASAC), the Global Reporting Initiative (GRI) Standards, and theCASS-ESG 6.0 Pharmaceutical Manufacturing Guidelines by theChinese Academy of Social Sciences. It also references the ESGReporting Indicator System for Central State-Owned Enterprises'Listed Companies by SASAC.For ease of expression and readability, "China Resources SanjiuPharmaceutical Co., Ltd." is referred to as "CR Sanjiu," "the Company,"or "we" in this report.

The preparation process for this report follows the requirements ofthe above standards, including industry benchmarking, surveys,information collection, review, report writing, management review,report rating, and report assurance to ensure completeness,materiality, authenticity, and balance.

This report is available in both electronic and paper formats. Youcan download and view it from the Social Responsibility section ofthe CR Sanjiu web operational site at https://www.999.com.cn.

All data in this report comes from internal documents and informationsystems of China Resources Sanjiu Pharmaceutical Co., Ltd.

ESG Assurance Statement

Scope of AssuranceAssurance Methods

Assurance Conclusions

Recommendations

Limitations

Statement on Independence and Veri?cation CapabilityBasis for Assurance

To: stakeholders of China Resources Sanjiu Pharmaceutical Co., Ltd.China Quality Certi?cation Centre Co., Ltd.(CQC), commissioned by China Resources Sanjiu Pharmaceutical Co., Ltd. (hereinafter referredto as CR Sanjiu), conducted independent veri?cation on CHINA REAOURCES SANJIU 2024 SUSTAINABILITY AND ESG REPORT (hereinafterreferred to as the ESG Report) between March 3 and 7, 2025.CR Sanjiu was responsible for collecting, summarizing, analyzing, and disclosing the information and data mentioned in the ESG Report.CQC implemented report veri?cation within the scope speci?ed in the agreement with CR Sanjiu. CR Sanjiu is the designated user of thisstatement.This statement was based on the assurance activities conducted on the ESG Report prepared by CR Sanjiu with reference to SASAC GuidingOpinions on Central SOEs Ful?lling Social Responsibility, GRI 2021 Standards, UCASS Guidelines for Corporate Social Responsibility Reportingin China (CASS-ESG 6.0) for Pharmaceutical Manufacturing Industry and SASAC Reference Indicator System for Special ESG Reports of CentralSOE-controlled Listed Companies, and CR Sanjiu was responsible for the completeness and authenticity of the information and data in theESG Report.

The following data and information disclosed in the ESGreport of CR Sanjiu：

? Financial performance? Market performance

? Social performance? Environmental performance? Governance performance

The methods used in this assurance include but are not limitedto:：

a) Report review;b) Interviews；c) Veri?cation of documents, records, certi?cates, bills, and othermaterials;d) Field veri?cation;e) Trusted information source veri?cation;f) Veri?cation against disclosure basis;g) Recalculation/estimation;h) Con?rmation of statistical, calculation/estimation processes.

The ESG report re?ects the performance of CR Sanjiu in environmental, social, and corporate governance in 2024. The information disclosedis true and reliable, and with availability, timeliness and relevance well maintained, which basically meets the requirements of AA1000 V3 asfollows:

Based on the assurance ?ndings, it is recommended that：

CR Sanjiu strengthen ESG performance monitoring, dynamically evaluate and adjust ESG performance, and ensure the achievement and

continuous improvement of ESG goals.

?This assurance was conducted using sampling methods based on quantitative and qualitative risk analysis and the sampling scope waslimited to the data and information selected in the ESG Report, not fully tracing or independently recalculating all raw data of CR Sanjiu。

?This assurance only covered interviews and document review with CR Sanjiu, and did not directly interview external stakeholders (such assuppliers, customers, etc.), nor did it contain independent veri?cation of the information provided by external stakeholders of CR Sanjiu.

?The data and information audited/veri?ed by a third party in the ESG Report were not subject to repeated veri?cation during this assuranceprocess.

?Some of the data and information in the ESG report cannot be compared and veri?ed through independent sources. This assurance onlyevaluated their reasonableness.

?Activities outside the scope of information disclosure were not included in this assurance;

?The statement regarding the position, viewpoints, beliefs, goals, future development directions, and commitments of CR Sanjiu were notincluded in this assurance.

A?liated with China Certi?cation & Inspection Group (CCIC), CQC is a third-party professional certi?cation body approved by the Chinese

government and recognized by multiple foreign governments and international authoritative organizations. CQC can provide various

management systems certification, product safety and performance certification, energy conservation and environmental certification,

green and low-carbon technical services, management improvement, personnel training, and other related technical services, as well as

independent veri?cation services for social responsibility reports, sustainable development reports, and ESG reports。

As an independent certi?cation body, CQC ensured that there were no con?icts of interest with CR Sanjiu and its stakeholders during the

assurance process of the ESG Report. All information in the ESG Report was provided by CR Sanjiu. CQC and the personnel conducting this

assurance of the ESG Report were not involved in the preparation process of the ESG Report.

Note: In case of any inconsistency or discrepancy, the Chinese version of this assurance statement shall prevail, while the English translation is used for

reference only.

1. Inclusivity: CR Sanjiu has identi?ed both internal and external stakeholders, including government and regulatory agencies, customers,

employees, shareholders/executives/investors, partners, non-pro?t organizations, peer enterprises, community members. In the reportpreparation process, the expectations and needs of stakeholders have been considered.

2. Materiality: Based on the principle of impact materiality and financial materiality, HCR Sanjiu has identified and prioritized their ESG

issues, integrating the management of various issues into the company's daily operations. The overall content of the ESG Report meets therequirements of the materiality principle.

3. Responsiveness: CR Sanjiu has established a governance structure, management system and processes, as well as a communication

mechanism with stakeholders, capable of taking action to respond to the demands of various stakeholders.

4. Impact: Through quantitative, qualitative, or a combination of both, CR Sanjiu has disclosed the main impacts on stakeholders in terms of

environment, society, and governance.

AA1000 V3，Type 2, Moderate Assurance

President of CQC：

March 10, 2025Beijing, China

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd.