珀莱雅：2022年度可持续发展暨环境、社会及公司治理(ESG)报告(英文版)

Sustainability Contribution Report

Co-Founders' Message01About Proya03

Proya Sustainability Governance System09Working Together to Contribute a New Pattern of Sustainable Business13Brand Actions Echo the Call of the Times to Create Beauty17

ESG Management Practice ReportESG Governance System29Environmental Responsibility33Product and Customer Responsibility47Supply Chain Responsibility65Employee Responsibilities69Community Responsibility79Corporate Governance82Compliance Operation89

Report DescriptionAppendix: Subsidiary Reporting Scope

Content IndexESG Key Quantitative Performance

CONTENTS

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Co-Founders' Message0102

Co-Founders' Message

>2022 was still a challenging year. International conflict,climate change, and other events enabled us tounderstand how the times have affected and will continueto affect everyone. Turbulence in the external environmenthardened Proya's resolve to pursue sustainability. Webelieve that a long-term and sustainable strategy canencourage us to better meet the environmental and socialchallenges facing humankind and seize developmentopportunities in uncertain times.We face a fast-changing market environment and anew generation of consumers in the cosmetics industry.From 2006 to 2022, the retail sales of cosmetics ofenterprises above the designated size in China climbedto RMB393.6bn, an increase of 10.17 times in 15 years.In 2022, our operating revenue stood at RMB6.385bn, aYOY increase of 37.82%, hitting a record high. The fast-growing figures mirror the continuous development of thenational economy and changes in consumption habits ofthe public looking for a better life. At the same time, theconsumption philosophy of new cohorts is undergoingwide-ranging and profound changes. When selectingcosmetics, consumers consider their quality and effect,environmental and social impact, and how sustainableproducts and brands are. We are committed to leadingthese changes in consumption habits and we are workingwith consumers and partners to build a better future.In 2022, we released the Sustainable DevelopmentStrategic Plan "Beauty Aspirations for a Shared Future".We would like to present consumers with high-qualityproducts and take the initiatives to share environmentaland social responsibilities. Proya's sustainablecontributions targets products, value chain, and society.Products are the starting point of our sustainablecontribution and the foundation of our continuousenvironmental and social contributions. As the reportshows, we focus on the full lifecycle such as product R&D,the purchase of raw materials, production, transportlogistics, and the usage of products to implementsustainable product management. To provide consumerswith more sustainable consumption choices, we use safe,natural, and organic ingredients; minimize packagingwaste; purchase environmentally friendly raw materials;and promote cleaner production.

Co-Founders' Message

Proya does not stop there. With an eye on the entirevalue chain, we are committed to leading more partnersto conduct sustainable transformation. In 2022, we firstcollected data on carbon emissions from suppliers anddistributors to develop a carbon data-tracking mechanismcovering upstream and downstream industrial chainsand gradually promote the reduction of carbon emissionsacross the value chain. At the same time, we offered coresuppliers ESG training, spurring them to carry out ESGmanagement.We think that an enterprise achieving success andvalue not only can bring huge economic returns toinvestors, employees, and society through sustainableoperations, but we are also dedicated to overcomingmany social challenges to build an inclusive, harmonious,and beautiful society. Proya is committed to sharing itsown development achievements with society, creatinga growth environment with equality and diversity foremployees, listening to their opinions, and protecting theirrights and interests. We also focus on gender equality,love and intimacy, family responsibility, youth and growth,and mental health, as well as activities such as conceptadvocacy and social welfare to make more people feeland create beauty.Proya firmly believes that enterprises can achievelasting greatness if they integrate their own interestswith the interests of current times and humanity, bearenvironmental and social responsibility, and practicesustainability. Although the journey ahead may be longand arduous, we will eventually reach our destinationthrough sustained hard work and embrace a brighterfuture. In the past few years, we have achieved much in thearea of sustainability. More importantly, we will consolidateand strengthen our sustainability achievements, root theconcept into our corporate development strategy, andmake unremitting progress on the sustainability journey.No step, no mile.

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

About Proya0304

About Proya

Company Name:

Proya Cosmetics Co., Ltd.

Headquarters Location：

Hangzhou City, Zhejiang ProvinceEstablished in：

2006

Stock Code:

603605 (Shanghai Stock Exchange)

Proya Cosmetics Co., Ltd.(hereinafter referred toas "Proya", "the Company", and "we") is committed tobuilding a new Chinese cosmetics industry platform.We specialize in the R&D, production, and sales ofcosmetics. Our brands cover a wide range of beautyproduct areas such as popular exquisite skincare,make-up, body&hair, and high-efficacy skincareproducts. We are committed to becoming a world-class cosmetics enterprise through continuoustechnological and marketing innovation and productoptimization.

Development of the Company：

The Company develops, manufactures, and sellscosmetic products primarily on the Chinese mainland.We have two manufacturing factories for skincare andmake-up products in Huzhou, Zhejiang Province.The Company's sales network encompasses multiplechannels such as e-commerce platforms, specialtystores for cosmetics and personal care products,shopping malls, supermarkets, and single-brandstores.The Company had3,177employees as of the end ofthe reporting period.

Company Profile

About Proya

Empowering and incubating "unique" brands that meet the "unique" needs of "unique" consumers

Company honors and social recognitionAwarding bodyA-level Evaluation of Information Disclosureof Companies Listed on the Mainboard of theShanghai Stock Exchange in 2021-2022Best Practice Award for Directors of ListedCompanies in 2022Top 30 Best Internal Control Award for ZhejiangPublic Companies In 2022Honorary Title of Hangzhou "Kunpeng Enterprise"Top 100 Most Valuable Companies Listed on theChinese MainboardGolden Tangerine Awards of Time Finance: PublicCompanies with High-quality Development2022 Invest Awards·Valuable Company AwardChina New Consumption Public Companies in2022TOP10 Listed Companies with the Most InstitutionalAttentionBest ESG Awards

Shanghai Stock ExchangeChina Association for PublicCompaniesThe 6th Symposium on the High-qualityDevelopment of Public CompaniesHangzhou Municipal Committee of theCPCThe Securities TimesThe Times WeeklyZhejiang Daily Press Group, 10JQKA.com.cn, InvestYICAIIRSC 6th China IR AwardsIRSC 6th China IR AwardsEconomy

RMBincrease by

52.56%

YOY

Total tax paid660,096,624.31

RMB

Calculation based on the total equity of283,519,469 on Dec. 31, 2022

Total cashdividends246,661,938.03

Enviroment

kgCO

reduction by 32%YOY

Greenhousegas emissions perRMB10,000 of revenue

12.42

Number of environmentalsafety accidents

Society

increase by21%YOYR&D investment as a percentage of the

parent company’s operating revenue

4.31%

RMB(tax included)Social contribution

per share

7.18

RMB(tax included)

increase by 1% YOY

Cash dividends per

10 shares

8.7

kg

reduction by 14%YOY

Materials used perRMB10,000 of revenue

11.28

Number of product health and

safety violations

workdays lost due to work-

related injuries

Company performance highlights"6*N" development strategyESG rating achievements>

Company honors and socialrecognition>

Sustainability performance>

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

2022

SustainabilityContribution Report

Proya SustainabilityEnvironmental, Social, and Governance (ESG) Report2022

Proya SustainabilityGovernance System

SustainabilityConcept

Beauty aspiration for ashared future

Proya upholds the sustainability concept of "Beauty Aspirations for a Shared Future".With solid sustainability management at the core, we truly care about human andecological sustainability. We create beauty with our first-class products, share itwith our partners and consumers, and empower communities through it. We createcountless beautiful moments to shape a better future.

Sustainability model>

Ever-lasting beautyand sharing blissCorporate Mission

To become a world-classcosmetics enterprise

Corporate Vision

Diligence, pragmatism, passion,aggressiveness, integrity, andgratitude

Corporate Spirit

Responsibility, willingness to learn, highefficiency, collaboration, innovation, andfairness

Core Corporate Values

Sustainable business:

Creating beauty

We are committed to creating beautyin a sustainable way. We continuouslydeveloping products through innovations,offering consumers with safe, effective, andsustainable products.

We work with partners and consumersto promote sustainable developmentand consumption, making value chainsustainability a reality.

Sustainable society ecosystem:

Empowering through beauty

We provide support to address environmentalchallenges and facilitate social developmentso that more people can enjoy a wonderful life.

Sustainability Contribution Report

1009Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Sustainable value chain:

Sharing beauty

Sustainability Contribution Report1112

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

In 2022, Proya developed its first strategic plan for sustainability under the theme "Beauty Aspirations for aShared Future". The Plan sets out Proya's three pillars of sustainability: sustainable business, sustainable valuechain, and sustainable social ecosystem. We facilitate sustainability based on holistic ESG management.Our strategic plan for sustainability also mirrors the UN Sustainable Development Goals (SDGs). We hope to play animportant role in achieving the following SDGs: Goal 1 (no poverty), Goal 3 (good health and well-being), Goal 4 (qualityeducation), Goal 5 (gender equality), Goal 6 (clean water and sanitation), Goal 7 (affordable and clean energy), Goal 8(decent work and economic growth), Goal 12 (responsible consumption and production), Goal 13 (climate action), Goal 14(life below water), Goal 15 (life on land), and Goal 16 (peace, justice, and strong institutions).Taking our first strategic plan for sustainability as a starting point, we will continue to accumulate experience and makeprogress to steadily enhance our sustainability actions and achieve our ultimate goals. (For detailed information on theProya Sustainable Development Strategic Plan, please log in to: proya-group.com)

Three pillarsSustainablebusiness

Overall goals

Corresponding

SDGs

Proya actions in 2022

Sustainable Development Strategic Plan

Three pillars

Sustainablesocialecosystem

Overall goals

CorrespondingSDGs

Comprehensive ESG management

Proya actions in 2022Sustainablevalue chain

By 2025Proya will complete 100%safety, effectiveness, andsustainability assessmentsfor major new productsor improved formulas.Green packaging,carbon footprint, andbiodiversity conservationwill be key factors in ourproduct performanceenhancements50% of the energy Proyauses will be from cleanenergy, and will peakcarbon dioxide emissionsBy 2030Proya will achieve netzero emissions from itsoperations

We have adopted various measuressuch as saving energy and upgradingtechnology, using clean energy, andoptimizing distribution routes to reducethe use of fossil energy in production andoperations and cut carbon emissions.During the reporting period, theequivalent greenhouse gas emissions perRMB10,000 of revenue was 12.42 kgCO2,down 31.69% year on yearWe implemented green packagingmanagement to reduce packaging wasteand further reduced marine pollutioncaused by land activitiesWe took measures to trace the originof palm oil derivatives and prioritizethe purchase of RSPO-certified (TheRoundtable on Sustainable Palm Oil)palm oil to reduce deforestation and itsimpact on biodiversity

We conducted ESG training on packagingmaterials and raw material suppliers todeliver our Sustainable DevelopmentStrategic Plan and ESG managementknowledgeWe collected carbon emissions datafrom suppliers and distributors andencouraged them to implement energyconservation and emissions reductionmeasures

By 2025We will drive sustainabilitytransformation for allpartners in our value chainand share our sustainabilityactions with our industrypeers. We will discloseour product sustainabilityinformation in multiple waysto share our sustainableconsumption concept withconsumersBy 2045We will achieve carbonneutrality across our entirevalue chainBy 2025We will contribute to thegrowth and development of500,000 people, includingyoung adults, teenagers,and women

We practiced concept advocacy andsocial welfare activities focusing ongender equality, love and intimacy, familyresponsibility, youth and growth, andmental healthWe supported education and areas ofpublic interest, donating stationery, books,and RMB1million to the "One County, OneDream" public interest project

Sustainability Contribution Report1314

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Sustainable operation is the starting point of our sustainability, and the cornerstone of continuously making environmentaland social contributions. We believe that to achieve sustainable operation transformation, we should start with our ownproducts and strengthen sustainable product management based on the full lifecycle of product R&D, the purchase ofraw materials, production, transport logistics, and the usage of products.Therefore, we continue to improve our sustainable product model, evaluate the impacts of our products on theenvironment and people, and promote the sustainable performance of our products in each stage.

Proya provides consumers with safe and reliable products. This is a prerequisiteand guarantee of achieving sustainability and producing sustainable products. Westrictly manage the use of raw materials in the process of product R&D. Accordingto laws, regulations, and international standards, we prohibit adding controversialingredients to new products. We also make real-time adjustments to productingredients in terms of clinical research results and market feedback.[Key Action]During the reporting period, Proya completely phased out parabenpreservatives and mineral oil in hero products in the sales and R&D stages,further improving the safety of our product ingredients.

Product R&D

Working Together to Contribute a NewPattern of Sustainable Business

The packaging design of sustainable products should focus on the full lifecycle ofpackaging production, usage, and recycling. Based on meeting basic functions,designs should minimize materials and energy consumed within the packagingcycle to reduce pressure on the environment.Proya follows the 3R (Reduce, Reuse, and Recycle) design philosophy. We arecommitted to reducing the use of packaging materials at the source to furtherachieve lightweight packaging and improve the packaging utilization rate andrecovery rate.[Key Action]

During the reporting period, we changed the outer packaging - aluminum foilbags - of various gift samples into a single material. This measure simplifiesthe manufacturing process of packaging and facilitates disassembly,recycling, sorting, and reuse. We upgraded the packaging material of anti-glycation and antioxidant Proya Elastic Brightening Youth Essence (30ml and50ml) with alternative packaging, encouraging consumers to reuse the outerpackaging and reduce the use of plastic.

SustainablePackagingDesign

Chemical ingredient safetymanagement

Publicity of sustainableconsumption concepts

Reduction design:

simple,lightweightRecyclable design:

single material,easy to recycleAlternative design:

recyclable, highutilization

Optimization of warehouse layout andtransportation routesReplacement with clean energy vehiclesPlastic reduction and recycling of logisticspackaging

Procurement ofenvironmentallyfriendly rawmaterials

Greenhouse gasemissions reductionIndustrial wastewater,airemissions,and residuesmanagement

Sustainable products require the sustainable raw materials. Proya prioritizesenvironmentally certified raw materials, including packaging and ingredientmaterials, for example, FSC-certified paper and RSPO-certified palm oil. Welearn about the source and production mode of raw materials to ensure that theraw materials we purchased are produced in a sustainable manner, reducing theirimpacts on the environment.[Key Action]Among many raw materials, palm oil, and its derivatives are widely used in thecosmetics industry due to their properties of moisturizing, foaming, and adjustingthe texture of products. But the palm oil industry also attracts attentions for its rolein deforestation and biodiversity loss.Rather than directly using and purchasing palm oil, Proya engages in the purchaseof palm oil derivatives in a sustainable manner. We expect that, by 2025, more than70% of the palm oil derivatives we purchase will be RSPO-certified palm oil.During the reporting period, we promoted the establishment of ourtraceability system for palm oil. We also adjusted the supplier mix to prioritizecooperating with large suppliers with good ESG management practices andRSPO-certified palm oil information. These actions promoted the gradualincrease in the use of RSPO-certified palm oil derivatives.

SustainableRawMaterials

Product R&D

SustainableProduction

SustainablePackaging Design

Sustainable WarehousingAnd Logistics

Sustainable RawMaterials

SustainableConsumption

3R

reducereuserecycle

Sustainable product model

>

Sustainability Contribution Report1516

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

The emission of greenhouse gases and discharge of industrial wastewater, airemissions, and residues mainly occur from product production. Moreover, theconsumption of energy, raw materials, and other resources principally occurs whenproducts are made. Therefore, sustainable production can improve the usageefficiency of resources and energy in production processes, reduce pollutants andgreenhouse gas emissions, and build a resource-saving, eco-friendly productionsystem.

[Key Action]

In 2022, the Company carried out a new round of audits on cleaner productionin the Huzhou skincare factory. We investigated the current situation of pollutantemissions, energy management, and environmental protection. We also developedseveral cleaner production implementation programs according to the investigationresults.During the reporting period, the Huzhou skincare factory planned andimplemented 14 cleaner production programs and the factory achieved thefollowing:

In the distribution and transport stages, products consume energy and resourcesand cause waste emissions. This includes energy consumption from warehouseoperations and transportation vehicles as well as the use and disposal of outerpackaging materials. Proya optimizes its warehousing and logistics system throughsustainable warehousing, transport, and logistics packaging to enhance thesustainable attributes of products.

SustainableProduction

SustainableWarehousingand Logistics

SustainableWarehousingSustainableWarehousingand LogisticsSustainableTransport

SustainableLogisticsPackaging

Reducedwastewater

4,400t

Reduced hazardouswaste

t

Savednatural gas

3,000Nm

ReducedCOD

0.17

t

Reducedcarbon emissions

322.73

tCO2

Saved worthraw material

10.8

RMB

Reducedammonia-nitrogen

0.001

t

Savedelectricity

565.9

MWh

Savedwater4,600m

[Key Action]

To achieve sustainable warehousing, we have established five warehousesnationwide according to orders from different provinces and applied online channelsto improve transport efficiency and reduce transport distance.To achieve sustainable transport, we have established reasonable layouts andplanning for transport routes. Through shortening the transportation distanceand increasing the vehicle loading rate, we have conserved energy and reducedemissions.

To achieve sustainable logistics packaging, we have taken multiple measures, suchas recycling packaging, replacing packaging materials, and improving packagingdesign, to reduce plastic usage and improve the packaging utilization rate.

Adjust the transport mode from factory to central warehouse then toCwarehouse to from factory to toC warehouse directly to reduce ineffectiveturnover

Upgrad delivery box stuffing from bubble wrap to raffia or honeycombpaper for 30% of orders at Proya official flagship store to reduce the use ofdisposable plastic

Increase the loading rate to reduce no-load when delivering in the centralwarehouse

Use FSC-certified delivery boxesUpgrad delivery cartons to zipper cartons for 99% of orders at Proya officialflagship store to reduce the use of tapeRecover regularly green recyclable cartons for recycling again afterprocessing

Consumer use and disposal is the final stage in the product lifecycle. Proya iscommitted to delivering its sustainable product concepts to consumers to achievesustainable consumption together with them.

[Key Action]Over the long term, we have integrated our environmental protection philosophy intoour product and packaging design. In many product designs, we design the outermetal packaging boxes as reusable boxes that can store jewelry and other smallitems or print minigames on the inside of customized Tmall gift boxes to encourageconsumers to reuse them.

SustainableConsumption

Sustainability Contribution Report1718

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

We believe that we are of great importance to the distant future and countless people.Looking at common challenges faced by humankind, we focus on social inclusion and development. This is our aspirationfor a better society and our long-standing direction of action. We are committed to affecting more groups directly relatedto us. We would like to help them live a better life through repeated appeals and selfless support. We also continue toexpand our sphere of influence to inspire more resonance and create a better life for more people.Our actions focus on gender equality, love and intimacy, family responsibility, youth and growth, and mentalhealth. We would like to directly benefit 500,000 people and indirectly benefit 500 million people by 2025 throughactivities such as concept advocacy and social welfare.

Y

outh

and

G

row

th

M

en

ta

l

H

e

a

lth

G

en

de

r

Equality

Love

and

Intimacy

Build a Better Society

By 2025, we will contribute to the growthand development of 500,000 people,including young adults, teenagers, andwomen, and directly benefit 500,000people and indirectly benefit 500 million

people.

Family

Responsibility

Brand Actions Echo the Call of theTimes to Create Beauty

Gender equality is an important aspect of the UN Sustainable Development Goals(SDGs). Empowering women and children is regarded as a necessary foundationfor world peace, prosperity, and sustainability.Proya has long viewed breaking down gender bias as its value proposition. Webelieve that achieving gender equality requires breaking down gender stereotypes,encouraging women and men to break through the restrictions hardened by genderconcepts, and pursuing self-fulfillment. In 2022, we have continued our themeof "Gender does not divide us, prejudice does!". We explored different stages ofindividual growth to advocate the concept of gender equality.

Strength, sweat, and lions are alsofor womenTenderness, sensitivity, and rosesare also for men

[Gender Equality]Gender doesnot divide us,prejudice does!

For children in the stage of value formation, we jointly launched a gender educationdocumentary "The Same Sky: How We Conduct Gender Education" with BeijingXingzhi School, Beijing Magnolia Community Service Center, and TeacherLiu Wenli. In the documentary, teachers, schools, parents, and social welfareorganizations respectively described their gender views and the value of the socialdivision of labor. Children gradually weakened gender differences through a varietyof stories and encouragement to make efforts to realize their dreams withoutgender differences.

Sustainability Contribution Report1920

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

For young people full of vitality and chasing their dreams, we released a short filmtitled "Lion-dancing Girls". We invited Wang Shuang, a national female footballplayer, to tell the story of the female lion-dancing team of Hexingtang, RenheTown, Baiyun District, Guangzhou City. We showcased the power of womenthrough the story of lion-dancing girls, encouraging women not to set limits onthemselves or forgo discipline, and thus awaken the lion in everyone's heart.

During the reporting period, the short film "Lion-dancing Girls" has beenwatched 4.5 million times, with 300 million readers viewing the topic page onWeibo and 180,000 discussions raised, evoking widespread social resonance.

For society, we broaden the scope and depth of the topic and obtain insights intogender bias hidden in society. Starting with the most common advertisementsin our social life, we are committed to revealing gender stereotypes in traditionaladvertising and advocating the power of women and the attitude of self-fulfillment.We put outdoor ads in major cities, advocating that besides men, hard-workingand powerful women can engage in delivering take-aways, programming, andscientific research. Flowers are not only for women. Dolls and trucks are loved byall girls and boys. We strive to convey the value concept of "breaking gender bias"to society, highlighting that "strength, sweat, and hard work are not only for men,but are for everyone who pursues self-fulfillment".

At the same time, we cooperated with Cultural Innovation IP (Intellectual Property)"Xi'an Fang Suo Commune" to jointly launch the themed book list for #Gender doesnot divide us, prejudice does!# and donated books to public welfare organizations.In this book list, there are abundant literary works on love, responsibility, growth,world outlook, and so on. Among these, the books themed "diverse female andmale images" provide the public with greater perspectives and thoughts. Whileenriching the brand image, we have expanded the demographic covered by thistopic and extended the topic depth.

Has been watchedmore than

4,500,000

Number of views on Weibotopic pages300,000,000

The number ofdiscussions

180,000

Sustainability Contribution Report2122

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Proya focuses on love and intimacy, encourages the brave to risk in love, andadvocates that loving yourself is the first step in love.On Chinese Valentine's Day in 2022, Proya discussed love with the public onceagain. But this time, we chose the real story as the key to echoing love. We helda group portrait exhibition to touch the love hidden behind our life with the public.Together with Fujifilm China and photographer Luo Yang, Proya invited 11 groupsof guests, including the poet Yu Xiuhua, writer Antone, Qi Pa Shuo debater MaJianyue, video blogger Tim (founder of MediaStorm) & Yu Linwei, etc., to explorethe self-form in love.

Dare to love, dare not to loveknow who you are, so dare to loveKnow to be yourself, so dare notto loveYou only live once, so dare to loveYou only live once, so dare not tolove

[Love andIntimacy]Dare to love,dare not to love

At Xizi Lake, which is the setting for numerous romantic stories, we customizedcreative buses along the photographic exhibition, together with bus stop signs,displaying Proya Qixi love stories.

During the reporting period, the video "Dare to love, dare not to love" waswatched 3 million times, with 25.87 million readers viewing the topic pageon Weibo and 19,000 discussions raised. Bus advertising covers 3.26 millionaudiences and bus stop advertising covers 1.2 million audiences.

According to the 2018 National Time Use Survey Report released by the NationalBureau of Statistics, Chinese women spend 126 minutes a day doing housework,about three times as much as men. In the family, a mother takes on many familyresponsibilities that should not belong to her alone.On the eve of Mother's Day in 2022, Proya observed the hard work and difficultiesof mothers in their daily lives and launched the specially planned video "Visible Onlyto Moms". We advocated that family responsibilities should not be visible only tomothers and called on family members to share housework, so that mothers areno longer confined to the kitchen day and night but can "freely be themselves".Mothers can see the wider sky and world, and make the family relationship moreharmonious.Family responsibilities should notbe visible only to moms, but toevery single member of the family.

[FamilyResponsibility]Familyresponsibilityshould not bevisible only tomoms

To better understand the hard work of mothers, Proya created a "Family's To DoList" fridge sticker sets to record housework. Through methods such as this, wehope all family members share responsibilities and understand the hard work ofmothers.

During the reporting period, the short video "Visible Only to Moms" waswatched 5.25 million times, with 10 million readers viewing the topic page onWeibo and 20,000 discussions occurring raised, attracting wide attention.

Sustainability Contribution Report2324

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

In the process of growing up, we always see the innocence in the sunlight butignore the pain in the dark sometimes. According to the 2019 UNESCO reportBehind the numbers: Ending school violence and bullying, about 32% of studentsglobally have been bullied by their peers at school at least once in the past month,and about 1 in 3 students have been bullied by their classmates. School violenceand bullying are major problems facing the global education industry.In the 2022 school year, Proya and China Education Television jointly launched the"Firefly Project - Anti School-bullying Campaign", and specially launched the anti-school-bullying public welfare short film "Firefly Project". We called on the publicto recognize that with school bullying, the smallest thing is important, the lightestaction is meaningful, and everyone has the power to light up the darkness.

At the same time, Proya started a discussion of #The smallest thing is important#on Weibo, calling on the public to pay attention to every possible instance of schoolbullying and fight against school bullying in every case. As soon as the topic wasreleased, more than 20 campus accounts, including those in Beijing and Chengdu,participated and supported "Anti-bullying in Schools". Nearly 100 KOLs spoke outfor the "Anti-Bullying" campaign, exploring various forms of bullying and sharingtheir own experiences.We also distributed public welfare outdoor advertisements at 54 bus stops in 6cities. Together with xinli001.com, a professional psychology service platform, wejointly produced and issued 9,000 copies of the "School Bullying Prevention Guide",which elaborates on the causes of and countermeasures against school bullyingand provides scientific psychological support for the victims and personnel whodeal with school bullying.

[Youth andGrowth]

FireflyProject - Thesmallest thingis important

Distribution of PublicWelfare OutdoorAdvertisements >

During the reporting period, the anti-bullying public welfare short film "FireflyProject" was watched 23 million times, with 140 million readers viewing thetopic page on Weibo and 14,000 discussions raised.

School BullyingPrevention Guide >

Has beenwatched23,000,000

Number of views on Weibotopic pages140,000,000

The number ofdiscussions

14,000

Sustainability Contribution Report2526

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

[Mental Health]Echo Project- The worldalways echoes

Adolescents are facing increasing stress and competition at school, high parentalexpectations, and rapidly changing socio-economic conditions. The 2021 UNICEFreport Adolescent Mental Health - a UNICEF Priority for 2021-2025 indicates that,according to a recent national study of mental health, almost 25% of adolescentsreported feeling mild or severe depression. It is estimated that at least 30 millionchildren and adolescents under 17 years old in China struggle with emotional orbehavioral problems.As a result, Proya keeps an eye on the emotional dilemmas facing adolescentstoday. In 2022, Proya has continued with the Echo Project, which encouragesadolescents to face their emotions, hear their own voice, and try to release theiremotions.On the eve of World Mental Health Day on October 10, 2022, we launched a publicwelfare film on mental health titled "Outlet". Together with psychological consultantLi Songwei and Du Sujuan, a literature professor at the East China University ofPolitical Science and Law, we released two public welfare short films, "We need tosee each other better" and "Adolescents can cry if they're in pain". We explainedthe meaning of expressing emotions to young people from different perspectives.

Based on the entertainment habits of adolescents, we jointly launched a list ofbooks, videos, and audio tracks with Douban. Together with the XiaoyuzhoufmAPP, we launched five special podcasts on emotions to help young people navigatethrough their emotional dilemmas and find outlets.We are committed to providing professional psychological counseling for youngpeople. Together with xinli001.com, we invited Liu Dan, a clinical psychologistfrom the School of Psychological and Cognitive Sciences, Peking University, tooffer online public welfare courses, and invited psychological consultants to holdoffline public welfare lectures in Qingdao, Xi'an, Chengdu, and Sanya. Togetherwith Beijing New Sunshine Charity Foundation, we built a long-term public welfarehotline to give everyone a kind and warm response.

Together with xinli001.com and Mind, a public welfare organization for mental health,we made the public manual, "Incomplete Attempt to Find an Emotional Outlet".These notes provide everyone with 50 ways to unleash emotion and feature Q&A onexpressing emotion.

The three public welfare short films were watched more than 10.05 milliontimes.More than 1,400 Douban users spontaneously released books and audio-visual works designed to soothe emotions.More than 140,000 users of the Xiaoyuzhoufm APP listened to specialpodcasts on emotional well-beingOnline public welfare courses were watched more than 10,000 times, and

200 people participated in offline public welfare lectures.The public welfare hotline received more than 658 calls, spent 9,033minutes offering public welfare services, and completed three suicide crisis

interventions.A total of 180,000 copies of the public manual "Incomplete Attempt to FindEmotional Outlet" were distributed.

During the reporting period:

2022ESG Management

Practice Report

Proya SustainabilityEnvironmental, Social, and Governance (ESG) Report2022

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

The Company has established a company-wide ESG structure to ensure theefficient ESG tasks. The Corporate Strategy Committee takes the overall leadand formulates relevant strategic planning. Its ESG Management Committee isresponsible for managing major ESG projects and for their performance evaluationsand will report regularly to the Board of Directors. The ESG Implementation Teamis composed of functional units to ensure overall planning and collaboration as wellas smooth communication between the upper and lower levels.

ESG Decision MakersESG Managers

ESG Compliance

Administrative DepartmentFinance DepartmentR&D Innovation Centerproduction base

Procurement DepartmentStrategy & Brand Center

Office of the Board ofDirectorsOffice of the Chairmanof the BoardBrand DivisionsLogistics DepartmentInternational Academyof Sciences

Legal DepartmentInternal Audit DepartmentInformation ManagementDepartmentStrategic ManagementDepartmentHuman ResourcesDepartment

Board of DirectorsStrategy CommitteeESG Management CommitteeESG implementation team

ESG Governance System

Proya ESGManagement

The Board of Directors is solely responsible for supervising ESG issues and developing corporate ESGmanagement policies and strategies, such as participating in the identification and evaluation of ESG issues.The department also provides recommendations and support for necessary actions to achieve ESG goals.The Strategy Committee is responsible for directing and supervising the management of major ESG issues,including technological innovation and product quality as well as safety and green packaging. The StrategyCommittee regularly audits the performance of ESG issues to promote the progress of ESG goals. It alsoprovides recommendations on necessary actions to take to achieve ESG goals and reports regularly to theBoard of Directors on ESG management progress.The ESG Management Committee is an independent department under the Strategy Committee and iscomposed of senior management members from the Office of the General Manager, including the GeneralManager. The department manages environmental, social, and governance (ESG) issues and prevents ESGrisks. It also reports regularly to the Strategy Committee and to the Board of Directors on ESG work progress.The Board Secretary leads the ESG Implementation Team, with the relevant department heads being teammembers. The team coordinates business modules under the direction of the team leader and reports to theESG Management Committee on ESG issues. It also provides information for decision-making and workguidance to business modules to support the execution of ESG strategies and decisions.

Board of Directors

In 2022, the Company developed its first sustainable development strategic plan,Proya Sustainable Development Strategic Plan (2022-2025). It will help achievecarbon-peaking and carbon neutrality goals and contribute to the preservation ofour beautiful planet. Also, the Company organized its departments to develop the2022-2025 sustainable action plan. These departments shared their ideas andtook words into action for Proya's sustainable development goals. Furthermore, theCompany holds training on the Sustainable Development Strategic Plan such asPlan Implementation Project training. The training will further intensify our internalcoordination ability in sustainability and promote the implementation of the Plan.To further accelerate ESG management, the Company added several provisionsto the Performance Management Measures and Supplementary Provisions onPerformance System in 2022. These provisions connect the incentive remunerationof members of the Board of Directors and senior executives with the Company'ssustainability performance and their ESG performance (hereinafter referred to assustainable performance). The Company also developed its short-, medium-, andlong-term incentive payment plans to ensure that this performance connectionwill enhance the initiative and sustainability of directors and senior executives forthe ESG management in all aspects.In the performance evaluation systemfor directors and senior executives, the weight of the added sustainableperformance indicators accounts for 8-10%. The Company carries outperformance evaluations regularly.The Company's ESG management is also recognized by the capital marketand society. In 2022, the Company's MSCI ESG rating was upgraded toBBB. The Company scored above the average of its peers in the issue of"corporate behavior" and "packaging materials and waste".

Strategy Committee

ESG Management Committee

ESG Implementation Team

ESG Rating results >

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

The supports and trusts of our stakeholders are vital to Proya. When carryingout and promoting ESG management tasks, Proya focuses on the demands ofstakeholders and actively communicates with them on multiple channels. Werespond to stakeholder expectations and demands by conducting responsiblepractices. We strive to achieve win-win cooperation among all parties, includingshareholders, employees, and society.

Corporate Governance IssuesSocial IssuesEnvironmental Issues

Proya identifies material issues through regular communication with internal andexternal stakeholders and in accordance with the GRI Standards for SustainabilityReporting (Global Reporting Initiative). When identifying material issues, we complywith Chinese and international standards and industry policies, and considerstakeholder priorities and expectations. We identify highly material ESG issuesand prioritize them for corporate management and reporting disclosure, therebycontinuously improving the value of the report.

Through the above substantive issue identification process, we finalized themateriality matrix below.

Stakeholdercommunication

Material IssueIdentification

StakeholderIssues

Communication and

Response

Corporate governanceRisk and complianceHazardous emissions andwasteCorporate governanceScience and technologyinnovationProduct and service qualityResponsible marketing andconsumer educationChemical safety andingredient transparency

Website announcementsGovernment inspectionsDiscussion and visitsShareholders meetingFinancial report releaseSeminars, interviews, etc.Field visitsAfter-sales service

Employee rights andbenefitsEmployee training anddevelopmentOccupational healthand safetyResponsible sourcingProduct and servicequalityIndustry developmentpromotionPublic welfareScience and technologyinnovationIndustry developmentpromotionClimate change mitigationand adaptationProduct carbon footprint

Employee unioninteractionsEmployee trainingEmployee handbookInterviews, etc.Supplier trainingDistributor conferenceTechnical exchangesConferencesField inspectionsEmployee volunteeractivitiesCommunity activitiesPublic donations

Government and regulatoryagencies (The NationalMedical ProductsAdministration, localgovernments, et al)Investors and shareholders(investors who have equityand debt investments inProya)

Partners (industryassociations, suppliers,distributors, etc.)

Communities and the public(communities around sitesof operation, public welfareorganizations, etc.)

Consumers

Employees

Key Stakeholders AndCommunicationChannels >

Materiality matrix >

We identified andsummarized 20 issuesrelevant to our companybased on industrypolicy analysis and peerbenchmarking. We alsocomplied with Chinese andinternational standards andpolicies in this process.

Preliminary IssueIdentification

Importance to the company

Topics of High ImportanceTopics of Moderate Importance

High

High

Low

Importance to stakeholders

Science and technology innovationCorporate governance

Business ethicsProtecting the rightsand interests ofshareholders

Risk and compliance

Chemical safety and ingredienttransparencyRights and interests of employees

Contributing to industrial development

Responsible marketingand consumer educationGreen packaging

Carbon footprint of productMitigation of and adaptationto climate change

Hazardous emissions and wasteWater management

Product and service

Knowledge product management

Responsible procurement

Employee trainingand developmentThe public interest

Occupational health and safety

StakeholderCommunication

ComprehensiveResult AnalysisWe conducted a two-dimensional evaluationof the importance of thesubstantive issues byconsidering the opinionsof internal and externalexperts.

Based on a two-dimensional evaluation, theBoard of Directors reviewedthe report materialityfor completeness andaccuracy. A materialitymatrix was then finalized.

3334

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Environmental Responsibility

Proya strictly complies with environmental laws and regulations, includingtheEnvironmental Protection Law of the People's Republic of China, the Preventionand Control of Environmental Pollution by Solid Waste of the People's Republicof China, the Regulations on the Management of Hazardous Chemicals, and theLaw of the People's Republic of China on Energy Conservation.The Companyfollows an environmental management policy to save energy, reduce consumptionand emissions, and to increase efficiency. We continuously strengthen ourenvironmental risk management to ensure that our production and operationscomply with relevant laws, regulations, and standards. We have establishedmanagement documentation covering all environmental impact factors. Additionally,we implement various management policies in our production and operations toensure effective control of environment-related risks.During the reporting period, the Company obtained ISO14001:2015 EnvironmentalManagement System certification (valid until February 14, 2025). The Company'sresource use had no significant impact on the environment. During this period, theCompany paid environmental protection taxes and fees in full, and there were noviolations of environmental protection laws or regulations.An analysis of the impact of the Company's production and operation processes onthe environment is shown in the table below.

In 2022, the Huzhou skincare factory established the ESG project managementteam to further improve the division of responsibilities. The factory also identifiedthe annual performance objectives of its emissions. At the same time, theCompany carried out a new round of audits on cleaner production in the Huzhouskincare factory. The Cleaner Production Steering Group was responsible forthe planning and implementation. The Group investigated and analyzed thecurrent situation of pollutant emission, energy management, and environmentalprotection. It also identified the objectives and implementation programs of itscleaner production.During the reporting period, the Huzhou skincare factoryplanned and implemented 14 cleaner production programs. These programscovered resource conservation, pollutant reduction, energy conservation,and emission reduction.(See the following chapters for specific measures andperformance.)

EnvironmentalManagementSystem

StageInputOutput

*Raw materials, energy,and water consumed in theproduction and operations ofvarious suppliers

Resource: Raw materials andpackaging materials

Greenhouse gas (Scope1 and Scope 2)Air emissions: VOCs,NOx, and smokeWastewater: COD andNH3-NNon-hazardous waste:

Discarded productpackaging, expiredproducts, discardedMembranes and filters,sludge from sewagestations, domestic waste,and kitchen waste fromcanteensHazardous waste:

Hazardous reagentsfrom laboratories, wastemachine oil, waste ink,etc.

Energy: Natural gasEnergy: Outsourced electricityWater: Municipal water supply

*Wastewater, airemissions, solid waste,and greenhouse gases(Scope 3) generated in theproduction and operationsof various suppliersPurchase

Productionand R&D

Product ingredients andpackagingSteam generation, pastemaking, and heating

Product ingredient water,process media, andcleaning

Air conditioning andrefrigeration, productionpower, and lighting

Analysis of the EnvironmentalImpact of Each Process

1 >

Analysis of the EnvironmentalImpact of Each Process

>

Environmental impacts marked with * are not covered in this report

Third parties are not covered in this report

StageInputOutput

Resource: Transport packagingmaterialsEnergy: Gasoline and dieselconsumed by freight vehicles;Outsourced electricity usedin warehouse operations(including third parties

)*Energy and resourcesconsumed in the operations ofdistributors

Energy: Outsourced electricityand gasoline consumed bycompany-owned vehiclesWater: Municipal water supply

Greenhouse gases (Scope1, Scope 2, and Scope 3)Non-hazardous waste:

Discarded productpackaging and domesticwaste

*Non-hazardous wastegenerated after consumersuse products*Wastewater, airemissions, solid waste,and greenhouse gases(Scope 3) generated in theproduction and operationsof waste disposal unitsWastewater: DomesticwastewaterNon-hazardous waste:

Domestic wasteGreenhouse gases(Scope 2)

Distribution andWarehousing &Logistics

Product Usage andDisposal

Office Operations

*Water and energy consumedwhen consumers use products(generating hot water)*Energy and water consumed inthe production and operationsof waste disposal units

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

The resources we use during production and operations are mainly raw materialsand water resources. Water resources derive mainly from the municipal watersupply, and the water source has no significant impact on the environment.In terms of raw material use, we implement excellent performance and leanmanagement, and encourage employees to propose improvement suggestionsat any time during production. We seek to reduce the scrap rate and improvethe usage efficiency of raw materials. We collect improvement suggestions fromemployees and regularly recognize those employees.In terms of the use of water resources, we established the Water-savingManagement Steering Group in the Huzhou skincare factory in 2022, solelyresponsible for water-saving management work. The Group builds the evaluation,reward, and punishment mechanism for water-saving, and improves the watermetering system, the standardization of water use behavior, and the continuousimprovement of water utilization efficiency.

Resource Conservation

Conservation ofRaw Materialsand Water

Major Water-SavingMeasures in 2022 >

Main measures

Huzhou skincare factory has built cooling water circulation pools in theworkshop. The cooling water is reused and discharged regularly. The dailysupply for cooling water is 41.6m

, the circulation volume is 2,800m

, and thecirculation rate is about 98.5%

Cooling Water Recycling

ESG实践管理报告

珀莱雅2022年度可持续发展暨环境、社会及公司治理（ESG）报告

Circulation rate = circulation volume/(circulation volume + supplementary volume)

Sewage Filtration forReuse

We have built a sewage treatment system. Through filtration treatment, thesystem can reuse recycled water such as toilet water and landscape poolwater, greatly reducing the amount of fresh water usedPure Water for Preparationand Concentrated Water forReuse

The concentrated water produced by the pure water preparation unit is reusedas toilet water and landscape pool water

Steam Condensate WaterReuse

Steam condensate water is collected and reused in the cleaning process,which utilizes steam waste heat and water resourcesIntroduction Of EfficientCleaning System

The automatic cleaning system of CIP efficient tanks saves 2,000 tons ofwater and RMB158,000 in various costs annually

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

The production, operations, and office of a company directly or indirectly consumeelectricity, natural gas, gasoline, and diesel. Proya has developed energymanagement systems such as the Power Saving Management System and theNatural Gas Leakage Emergency Plan. We constantly improve the usage efficiencyof energy and optimize the use structure of energy. During the reporting period,our energy consumption per RMB10,000 of revenue was 32.65 kWh, down 18.20%compared with 2021.In 2022, we carried out a cleaner production audit, identified energy-savingitems to be improved, and formulated implementation plans. In terms of energyconservation and consumption reduction, we have adopted several energy-savingand technology upgrade projects such as purchasing permanent magnet frequencyconversion oil-free screw air compressors and automating production lines. Wealso take measures, such as replacing clean energy and optimizing distributionroutes, to reduce the use of fossil energy in the production process.

In terms of daily office work, we advocate and practice the concept of greenoffices. In 2022, we developed the Daily Power Saving Plan of Proya Building andOrderly Power Consumption Regulation Plan of Proya Building, advocating thatemployees turn off lights and air conditioners when leaving the Company. Propertymanagement personnel made regular inspections to turn off lights in unused areasto avoid wasting electricity. While ensuring employees' demands for minimumelectricity, we took measures such as turning off certain air conditioners in theoffice area and reducing excess underground lighting to minimize office powerconsumption.During the reporting period, we decreased office power consumptionper capita and water consumption per capita by 4.36% and 13.27% YOY

respectively.

Energymanagement

Main measuresPerformanceCategory

Major Measures andPerformance of Energy-Savingand Emissions Reduction in2022>

Major Measures andPerformance of Energy-Savingand Emissions Reduction in2022>

Using PV Power

The factory used its own PV power to meet its ownelectricity demands and reduced carbon emissionsPurchasing New Energy EquipmentWe used electric forklifts to reduce fossil energyconsumption and carbon emissions. At present, threeoutdoor operation forklifts and four high forklifts in theCompany warehouse all use electric forkliftsPurchasing Green PowerWe purchased green power and increased the useproportion of clean energyUpdating Air CompressorsWe purchased two permanent magnet frequencyconversion oil-free screw air compressors to increasewaste heat recovery from air compressorsUpdating Water ChillersWe phased out inefficient water chillers and adoptedair compressors with first-level energy efficiencyOthersIn daily production and operations, we strengthenedcleaner production publicity, equipment maintenanceand servicing, transformer adjustment, steam pipelinerepair, and local compensation to reduce energyconsumptionWe automated the operation of the HVAC system, aircompressors, and heat recovery systemWe automated production lines to increase workefficiency and energy utilization efficiencyWe phased out or renovated old equipment, usedfrequency conversion motors or auxiliary frequencyconversion devices, and introduced energy-savinghomogeneous emulsifying units with large capacityand high performance to achieve energy-saving andcarbon reductionWe replaced existing lighting fixtures with LED lightsand adopted steam traps

After the update, we saved morethan 565.9MWh of electricity onaverage annually

Clean EnergyReplacement

Energy UsageEfficiencyImprovement

Main measuresPerformanceCategory

Increasing the Loading Rate ofDistributionWe increased the loading rate to reduce no-load fordeliveries in the central warehouse, increasing thedistribution loading rate by more than 30% over theprevious year

Reducing Ineffective Turnover

For some products in e-commerce channels, weimproved the supply chain and adopted the mode ofthe factory to toC warehouses directly to optimizethe factory to central warehouse to toC warehouses

During the reporting period,we reduced the short distanceturnover of more than 50 carloadings and reduced logisticstransport by an average of100 km per time, with a totalreduction of 5,000 km

DistributionRouteOptimization

office power consumption per capita，withan reduction by 4.36% YOY

water consumption per capita，withan reduction by 13.27% YOY

4.36%13.27%

Clean power includes PV power and purchased green power

The calculation of office power/water consumption per capita involves alone the data of power/water consumption and thenumber of employees in the Company's office building and the data of production, logistics, and other operation stages are not

included.

The data came from the evaluation results of the Company's cleaner production audit. Certain data were not included because their correspondingimprovement measures were not included in the scope of the cleaner production audit. Therefore, the actual electricity-saving data should be greaterthan this data.

During the reporting period:

Generated 2,038.994mWh ofPV powerSaved 27,300 liters of fuelsPurchased 1,800 MWh ofgreen powerThe use proportion of cleanpower

reached 24.04%

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

We continuously focus on green packaging issues and actively promote progressin green packaging projects. Our green packaging management and practicescover a variety of product packaging across the whole production process,including finished product packaging, intermediate packaging, and warehousingand logistics packaging. In 2022, the Green Packaging Working Group expandedthe application scope and scale of green packaging in the Company, explored moregreen packaging solutions based on existing practices, and built a comprehensiveand complete green packaging management system.

Green Packaging

Structure of the Green PackagingWorking Group>

Process of green packagingmanagement>

Key Actions for GreenPackaging in 2022 >

Key Actions for GreenPackaging in 2022 >

Performance of packagingmanagement >

Proportion of the Purchase Price ofVarious Packaging Materials in 2022

Usage of Packaging Materials Used per RMB10,000of Revenue in the Past Three Years (kg/RMB10,000)

Proportion of the Purchase Quantity of variousPackaging Materials in 2022

Green Packaging Working GroupProduct DesignDepartment

ProcurementDepartment

Product DevelopmentDepartment

PlanningDepartment

ProductionDepartment

LogisticsDepartment

StageCategoryActionsResult

FactoryProduction

Warehousingand Logistics

StageCategoryActionsResult

PackagingDesignUpgrade

PackagingRecyclingPackagingMaterialsUpgradePackagingDesignUpgradePackagingRecyclingPackagingMaterialsUpgrade

PackagingMaterialsUpgrade

Used a single material in aluminum foilbags to facilitate the recycling of packaging

During the reporting period, thepackaging of many gifts used thissingle material

In the process of transportation fromthe production workshop to the internallogistics warehouse, the packaging ofproduct cartons was recycled for reuse inthe workshop

During the reporting period, atotal of 419,200 cartons wererecycled and reused, reducingthe use of 419,200 cartonsDuring the reporting period, theuse of white plastic bags wasreduced by 12,000During the reporting period, theuse of tape was reduced byabout 285,000 rollsDuring the reporting period, atotal of 261,000 cartons wererecycled and reused, reducingthe use of 261,000 cartonsDuring the reporting period,30,000 fewer rolls of bubble wrapwere used

Continued to use stainless steel storagetanks in lieu of plastic bags and plasticbarrels to store paste and purchased 20new stainless steel storage tanksUpgraded delivery cartons to zippercartons for 99% of orders in 2022 at Proyaofficial flagship store to reduce the use oftapeRegularly recovered green recyclablecartons used in the stage from theinternal logistics warehouse to logisticswarehouses nationwide, for recycling againafter processingUpgraded delivery box stuffing from bubblewrap to raffia or honeycomb paper for 30%of orders at Proya official flagship store

During the reporting period, 9.9million certified delivery boxeswere purchased, accounting formore than 50% of the annualprocurement amountPurchased FSC-certified delivery boxUpgraded the packaging material ofElastic Brightening Youth Essence 3.0to alternative packaging to improve theutilization rate of packaging

During the reporting period,this development has beencompleted and it is expected tobe launched in April 2023PackagingDesign

PackagingProcurement

Others 15%Paper 14%

Plastics 19%

Glass 11%

Others 10%

Plastics 60%

Glass 55%Paper 16%

202020212022

17.40

13.08

11.28

[1]

This year, the Company adjusted the statistical method of all kinds of packaging materials purchased tocalculate by weight, which more directly showcased the use of different types of packaging materials.

In the packaging designstage , we take varlous design measures , such as reducingpackaging,Improving packaging materials , and using alternative packaging and recyclablepackaging , to reduce the use disposable plastic packaging and increase the packaging recoveryratePackaging Design

In the packaging procurement stage , we prioritize the procurementof sustainable packaging

Packaging Procurement

In the warehousing and logistics stage , we apply various methods,such as recycling andimproved packaging design , to reduce the use of cartons and disposal plasticsWarehousing And LogisticsIn the factory production stage , we recycle an replace the packaging and containers used in theinternal logistics to generate less packaging wasteFactory Production

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Proya closely follows the global climate change situation. On September 22,2020, China announced that it would scale up its Intended Nationally DeterminedContributions by adopting more vigorous policies and measures to achieve carbonneutrality before 2060. At the same time, in 2022, Zhejiang Province, where theCompany operates, also issuedthe Implementation Opinions of the ZhejiangProvincial Party Committee and Provincial Government on the Complete, Accurate,and Comprehensive Implementation of the New Development Concept to AchieveCarbon Peak and Carbon Neutrality. It states that the proportion of non-fossilenergy consumption would reach over 80% by 2060 and to smoothly achievecarbon neutrality. The Company actively responded to national strategies andthe policies of the governments where it operates. We continue to establish aclimate change management system. We can identify climate change risks andopportunities through this system and then improve our management based onoutcomes.

Our greenhouse gas emissions are generated throughout the product lifecycle,with a small percentage arising from office operations. Therefore, product carbonfootprint management is our priority for reducing greenhouse gas emissions.We identify greenhouse gas sources throughout the product lifecycle and thenprogressively conduct product carbon footprint management tasks.Respondingto ClimateChange

IdentifyingSources ofGreenhouse GasEmissions

Major EnergyConsumption

MajorGreenhouse Gas

Sources

Greenhouse GasEmission Data in2022 (estimated)

[1][2]ProductLifecycleIdentification of Sources ofgreenhouse gas emissionsthroughout the productlifecycle >

Scope 3: 288.00 tons of CO

[4]

Scope 2 emissionsfrom the consumptionof electricity consumedby company-ownedwarehousesScope 3 emissionsgenerated from thethird-party warehousesand freight vehiclesScope 3 emissionsEnergy consumed bywater utilities duringproduct usageEnergy consumed forwaste recycling anddisposal

ProcurementOf RawMaterials

Product UsageAnd Disposal

Proya has been prioritizing climate change management and has identifiedresponding to climate change as an ESG materiality. The Board of Directorssupervises and manages the Company's ESG issues, including climate changeissues. Relevant functional and business departments integrate climate changemanagement into their daily work priorities. Every year, the Company collectsand discloses greenhouse gas emission data and ensures that climate changemanagement performance is evaluated.In 2022, the Company published Proya Sustainable Development Strategic Plan(2022-2025). This plan contains greenhouse gas emission targets for 2025, 2030,and 2045, covering the Company's emission performance of greenhouse gasesfrom Scope 1 to Scope 3.

Climate ChangeManagementSystem

Specific GoalsDateProya Greenhouse Gas EmissionReduction Goals>

50% of the energy Proya uses will be from clean energy, and willpeak carbon dioxide emissionsGreenhouse gas (Scope 1 and Scope 2) emissions per unit ofproduct will decrease 25%. Our operations will achieve carbonpeak (Scope 1 and Scope 2)Proya will drive all strategic partners to reduce carbon emissionsthrough value chain carbon reduction initiatives and incentivesProya will achieve net zero emissions from its operationsWe will achieve carbon neutrality across our entire value chain

By 2025

By 2030By 2045

[1] The Scope 3 greenhouse gas emissions data above are estimated by the GREENHOUSE GASPROTOCOL system.[2] In addition to the above sources of greenhouse gas emissions, the services purchased, capital products,and business travel during the Company's operations will also produce Scope 3 greenhouse gas emissions.The Company will calculate and disclose this later.[3] Scope 3 greenhouse gas emissions data generated in product distribution includes greenhouse gasemissions generated by self-operated e-commerce delivery but does not include greenhouse gas emissiondata generated from distributors' delivery to consumers.[4] The stage of product usage and disposal does not include carbon emissions generated in the processof consumer usage and mainly includes carbon emissions generated from the disposal of waste packaging.Therefore, this part mainly calculates greenhouse gas emissions generated in the process of outerpackaging waste treatment.

Energy consumed inthe production andtransportation of rawmaterials

Scope 3 emissionsgenerated in theproduction andtransportation of rawmaterials

Scope 3: 268,521.55 tons ofCO

Scope 2 greenhouse gasemissions data, see the "ESGKey Quantified Performance"tableScope 3: 20,237.93 tons ofCO

[3]

For Scope 1 and Scope 2greenhouse gas emissiondata, see the "ESG KeyQuantified Performance" tableScope 2 emissions fromthe consumption ofelectricityScope 1 emissionsfrom the consumptionof natural gas,gasoline, and dieselfuel consumed bycompany-ownedvehicles

ProductionElectricityNatural gasGasoline and dieselconsumed bycompany-ownedvehiclesElectricityGasoline and dieselconsumed by freightvehicles

ProductDistribution

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Based on identifying the sources of greenhouse gas emissions in the entire valuechain, we strive to extend the action of reducing our carbon footprint to the fullproduct lifecycle, including the procurement of raw materials, product production,packaging, and warehousing and logistics. We take effective measures to reducethe carbon footprint of products.

Proya pays close attention to the greenhouse gas emissions intensity of theupstream and downstream industrial chain, and actively promotes the sustainabilitytransformation of the entire value chain. In 2022, we released the Proya ESGCode. This Code stipulates that the Company will carry out carbon data-trackingacross the value chain and gradually establish a carbon data-tracking mechanismcovering the upstream and downstream industrial chain.During the reporting period, we collected carbon emission data fromsuppliers and distributors. Carbon emissions data from 13 suppliers in totalwere collected, accounting for 6% of our total suppliers; the procurementamount of covered suppliers accounts for more than 50% of the totalprocurement amount of the Company. Carbon emissions data from 168

distributors were collected, accounting for 49.27% of our total distributors.We also separately explained policies to core suppliers that provide raw materialsand packaging materials and encouraged them to carry out energy-saving andemissions reduction actions. In the future, we will continue to improve the carbondata-tracking mechanism covering the upstream and downstream industrialchains and provide policy support and incentives to partners with excellent carbonmanagement performance, so as to gradually reduce carbon emissions across thevalue chain.

ReducingGreenhouseGasEmissions

ActionsPerformanceMain stages

Publicize carbon reduction policiesto suppliers, cooperate with them toreduce carbon emissions in the stage ofprocurement, and prioritize suppliers withlow carbon emissions

During the reporting period, weorganized multiple ESG training forsuppliers. More than 50 suppliersparticipated in the training

During the reporting period, wereduced carbon dioxide emissionsby 1,670 tons through packagingrecyclingDuring the reporting period, wereduced carbon dioxide emissionsby about 1.5 tons by optimizingtransport routesDuring the reporting period,we published the sustainabledevelopment strategic plan onthe official website and accountto publicize Proya's sustainableconcepts to the public

During the reporting period, wereduced carbon dioxide emissionsby 2,261.23 tons through cleanenergy replacementWe reduced a total of 322.73tons of carbon dioxide emissionsthrough the implementation ofcleaner production programs

Carry out green packaging projects toreduce carbon emissions after packagingdisposal through packaging usage reduction,packaging recycling, and other methodsOptimize the warehousing and logisticssystem to reduce energy consumption inthe process of warehousing and logisticsby rationally arranging warehouses andplanning transportation routesPublicize the concept of sustainableconsumption to consumers to provide themwith more sustainable choices

Regularly collect carbon emissions data,invite professional third parties to conductdata audits, and make improvements tocorrect deviations inside the CompanyCarry out energy-saving and technologyupgrade projects to improve energyefficiencyCarry out clean energy replacement andincrease the proportion of clean energyuse through PV power and the purchase ofgreen power and new energy equipment

Procurement ofRaw MaterialsProductProduction

ProductPackagingLogisticsTransportProductUsage andDisposal

Actions for ReducingGreenhouse Gas Emissions>

Greenhouse gas emissionperformance >

Greenhouse Gas Emissions in the Past Three Years (tCO

e)

Equivalent Greenhouse Gas Emissions per RMB10,000 ofRevenue in the Past Three Years (kgCO

e/RMB10,000)2020

2020

8216.25

21.9

8426.86

18.19

9115.43

12.42

2021

2021

2022

2022

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

The wastewater we produce comes mainly from domestic sewage and productionwastewater and is discharged to landscape water pools or to the outside througha consolidated water pipe after being treated by our sewage treatment station;the waste gas we produce comes mainly from boilers. We have establishedadministrative documentation such as the Sewage Treatment Management Systemand the Boiler Management System to strictly manage wastewater discharge andair emissions. During the reporting period, the wastewater and waste gas from theCompany both reached the emission standard.

Emissions and Waste ManagementWastewaterDischarge and AirEmissions

We properly dispose of solid waste generated in production and operations. Weapply macro-management of solid waste. Factories are registered in the NationalSolid Waste and Chemicals Management Information System Platform. We pre-declare the generation of hazardous waste each year and hold public bidding onthe production and hazardous waste treatment unit on the platform. The platformalso handles hazardous waste applications to enable data-tracking and riskprevention throughout the process of solid waste treatment.

Solid Waste

WasteMain Treatment

Measure

Implementation StandardCategoryDomestic waste, cartons,tape, film, paper, etc.

Collected and soldHanded over to aqualified agency forregular treatment

Standard for Pollution Controlon Municipal Solid WasteIncineration GB 18485-2014General Standards forIdentification of HazardousWaste GB 5058.7-2019Handed over to aqualified agency forregular treatmentHazardous reagents, wasteoil, waste ink in laboratories

Lined bags, expired products,waste filter membranesand filters, sewage sludge,domestic waste, canteenwasteNon-hazardousWasteHazardousWaste

Compliance withEmission Standards

Main Control Indicators

Management Measures

Category

Category ofPollutants

Integrated Waste WaterDischarge Standard (GB8978-1996)Integrated Emission Standardof Air Pollutants (GB16297-1996)Emission Standard ofAir Pollutants for Boilers(GB13271-2014)

Five-day biochemical oxygen demand (BOD5) 300mg/L,Chemical oxygen demand (CODcr) 500mg/L, Suspendedmatter 400mg/L, Ammonia nitrogen 35MG/l, Animal andvegetable oil 100mg/L, etc.

Installed a Multi Vision COD online automatic monitoring instrument, and monitored

COD in treated water 24 hours a day to ensure class-A sewage discharge

Constructed a sewage treatment system to make sure the treated sewage is highly

evolved and recycled

During the reporting period, we renovated the production park through

environmentally friendly technologies, including:

1) Applied the closed-circuit television system (CCTV inspection) to underground

pipelines: the pipeline CCTV inspection robot is used to clean, maintain, and repair

pipelines to avoid the risk of wastewater leakage caused by outdated pipelines

2) Carried out technology upgrades on the anaerobic tower of sewage treatment

station to improve the anaerobic effect of organisms

3) Expanded the capacity (10 tons) of the floatation tank of the sewage treatment

station for efficiency improvement to increase the aeration treatment capacity of

floatation tanks and clean water volume on the original basis

Huzhou skincare factory

During the reporting period, we invested RMB950,000 to install a paste-making

emission treatment device, mainly for reducing dust and organic waste gas emission.

After its inception, the dust collection rate and organic waste gas removal rate can

reach 99% and 75% respectively

During the reporting period, we used high-precision VOCs gas collection devices,

effectively reducing unorganized waste gas emissions

Huzhou makeup factory

During the reporting period, we invested more than RMB800,000 to install a Swiss

VOCs waste gas and dust treatment device

Nitrogen oxides 50mg/lim

, Particulate matter 20mg/m

,Sulphur dioxide 50mg/m

Wastewater

Wastewater

Waste gas

Air emissions

Wastewater Dischargeand Air EmissionStandards & Main ControlIndicators >

Main managementmeasures for wastewaterdischarge and airemissions >

Main Measuresand ImplementationStandards for SolidWaste Treatment >

Performance of solidwaste discharge >

Discharge of Non-hazardous Waste per RMB10,000 ofRevenue (Tons/RMB10,000)

Discharge of Hazardous Waste per RMB10,000 ofRevenue (Tons/RMB10,000)

2020

2020

0.0035

1.60

0.0037

1.33

0.0036

0.95

2021

2021

2022

2022

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Product and Customer Responsibility

We take innovation in research and development as an area of corecompetitiveness, build a comprehensive R&D innovation framework, and help theCompany maintain industry leadership in basic research, formula development,efficacy and safety evaluation, and other fields.In terms of product research and development, we adhere to a consumer-centricphilosophy and integrate the needs of consumers into the product based on skinscience. We have set up a consumer investigative team and are cooperatingwith well-known external data analysis companies to conduct consumer surveysfor target populations. We hold quantitative or qualitative research analysis andcombine that with analytical data and industry reports to comprehensively identifyconsumer demand and incorporate it deeply into innovations in research anddevelopment of the Company, thus providing consumers with safe, functional, andoutstanding products that truly fit their needs.

The R&D Innovation Center and the International Academy of Sciences are ourengines for innovation. We improve the R&D layout of all key stages from rawmaterial to finished products, including fundamental research, formula development,physical and chemical analysis, raw material and product efficacy evaluation, etc.In 2022, we continued to promote the construction of the International Academyof Sciences, dividing the research direction and building the platform according tobioengineering, plant extraction, and organic synthesis. By the end of the reportingperiod, the International Academy of Science were able to conduct preliminarysmall-scale exploration and sample preparation for fundamental research. TheCompany's research and development centers in Shanghai and Japan are underpreparation.To enhance our research and development capabilities, we continue to increaseinvestment in research and development through personnel training, theintroduction of advanced equipment, and other methods.During the reportingperiod, the Company invested RMB128.01mn in R&D. The parent company'sR&D investment accounted for 4.31% of revenue.

Innovations InResearch andDevelopment

Quantitative/qualitativeresearch analysisand Analysisdata/report inthe industry

Identify consumerneeds

Product research,development, andinnovation

Proya’s R&D investment in the past three years(Unit: RMB100 million)

R&D investment as a percentage of the parentcompany's operating revenue (%)

2020

2020

3.96

0.72

3.55

0.77

4.31

1.28

2021

2021

2022

2022

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

The Company has a professional innovative R&D team comprising high-caliberprofessional researchers in different disciplines such as skin science, biochemistry,life science, material science, medicine, industrial design, psychology, and statistics.The "Zhejiang Postdoctoral Workstation" was established and officially licensed in2018 to deepen the training of high-level personnel. During the reporting period, weinitiated a management trainee project in the R&D team. To enrich interdisciplinarytalent reserves, we carried out company introduction, job rotation planning, batchinterview, research content sharing, and new technology absorption for selectedtalents. We explained new cosmetics laws and regulations for formulators andinternal practitioners. With more than 200 participants, the training covered productdevelopment, procurement, quality management, and production departmentsto enhance compliance awareness of relevant practitioners. According to aseries of new laws and regulations in the cosmetics industry, we also carriedout corresponding implementation activities in the Company, including updatingprocesses, and upgrading R&D system support.To foster the innovation enthusiasm of R&D personnel, we continue to improvetalent incentive measures. We have developed the Patent Management Measuresand set up various awards such as innovation project awards, papers awards,and patents awards. To strengthen the material and spiritual incentives of R&Dpersonnel, we give equity incentives to managers and above and establishoutstanding individual awards according to their contribution to new marketingproducts.We also strengthen the introduction of advanced R&D equipment to improveefficiency. During the reporting period, we purchased the customized fermentersystem, automated preparation and analysis equipment, and software anddatabase applications.

We attach importance to external R&D cooperation and continuously deepencooperation. We actively carry out international strategic cooperation. We haveestablished partnerships with BASF in Germany, Lipo True (a Spanish familypeptide company), Ashland (an American special materials expert), CODIF (aFrench marine biotechnologies expert), CEVA (the French national algae researchinstitute), and other global technological laboratories. In 2020, we investedin Siyomicro to carry out cooperation in ergothioneine, sod, ectoin, and othercosmetics efficacy raw materials. We also actively promote the integration ofindustrial, academic, and research capabilities, and facilitate the conversion fromresearch to development.

Equipment NameMain Functions

Simulate the process model of fermentation engineeringproduction scale-up to expand the fermentation system anddetect multiple data types online.Provide efficient hardware support for new raw materialdevelopment and pilot scale tests to automate processing andcollection, reduce requirements on human resources, andimprove R&D efficiency.Automatedpreparation andanalysis equipment

Customizedfermenter systemIncreased Investment inR&D Equipment in 2022 >

Highlights and Recognitionof Innovations in Researchand Development in 2022 >

Employed a total of

scientific researchers, more than30%of whom had amaster's degree or above and2% had a doctoral degreeWas granted

invention patentsPut

new products

on the marketSuccessfully researched and developed Supramolecular A alcohol, Multi-Ceramide, Wrapped Isoquercitrin, Encorelane, Anti-cernes Liposomes,Microbe Defender,and other exclusive raw materialsParticipated in the formulation of the group standards of TZHCA 017-2022 HairGrowth and Rest Period Quantity Ratio Test Method and T/ZHCA 019-2022Cosmetics Anti-dandruff Efficacy Test Method

Led or participated in the development of

national standards,

industrystandards, and

group standardsAccumulatively obtained 225 valid patents, including 107 patents of invention

During the reporting period, Proya:

As of the end of the reporting period, Proya had:

NationalStandards

Industry

Standards

GroupStandards

Scientificresearchers

Valid Patents

Including Patents of Invention

Master's degree or above

Doctoral degree

30%2%

New products refer to brand-new products, formula-upgraded products, packaging-upgraded products,

micro-innovative products, etc.

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

We strictly abide bythe Regulation on the Supervision and Administration ofCosmetics, the Code for Quality Management of Cosmetics Production, the Safetyand Technical Standards for Cosmetics, and other laws and regulations. To ensurethe quality, safety, and efficacy of products, we perform quality managementthroughout the entire process from product R&D production to post-market.ProductQuality andSafety

In product development, we focus on the safety and efficacy of raw materialsand formulas. We have formulatedthe Product Anti-corrosion Energy EfficiencyTest Process, the Human Patch Test Process, and other systems to standardizethe quality and safety control of product development. In addition, we havecomprehensively evaluated newly-developed formulas, and upgraded originalformulas and functional and active raw materials to ensure product safety andoutstanding efficacy.We comply with national requirements for cosmetics registration and recordationand conduct product inspection and safety testing of physical and chemicalmicrobial indicators. We have established a physical and chemical analysisdepartment and a product evaluation department under the R&D Innovation Centerto evaluate the quality of product development. We have designed a sophisticatedsafety evaluation system that includes stability, sensory evaluation, in-vitro efficacyevaluation, cytotoxicity evaluation, clinical test evaluation, and tests performed bydermatologists. In addition, we actively conduct human patch tests to reduce thepotential of adverse reactions of human skin caused by cosmetics.We have also actively established and developed in-vitro evaluation methodsto replace animal experiments. We have set up a technology evaluation modulewithin the International Academy of Sciences to evaluate the safety and efficacyof key functional raw materials and products. We have established more than 20in-vitro evaluation methods such as in-vitro moisturizing; whitening and freckleremoval; soothing and anti-inflammatory; anti-oxidative, anti-aging and otherefficacy evaluations; toxicological stimulation; and other safety evaluations at thebiochemical, molecular, cellular, and 3D model level. We have the preliminary abilityto conduct in-vitro efficacy and safety evaluations of major cosmetics such as anti-aging, whitening and freckle removal, soothing and stimulation, and research onefficacy mechanisms.

During the production stage, Proya upholds the quality control philosophy ofprocess control, quality and safety, customer satisfaction, and have establisheda well-developed quality management system. We have formulated the ProyaManagement Manual, the Deviation Control System, the Non-conformanceCorrective Action Control Procedure, and other systems to standardize qualitycontrol and deviation management at all stages from raw materials and productionto delivery. Quality objectives are set at all stages and strict quality monitoring isapplied to guarantee product quality across the board.QualityManagement inProduct R&D

QualityManagement inProduction

Certification

KPIs in ProductionQuality

Scope ofcertification

Targets

Valid period ofcertification

Performance in 2022

ISO22716 Cosmetics - GoodManufacturing Practice (GMP)US FDA CFSAN Cosmetics - GoodManufacturing Practice (GMP)

US FDA CFSAN Cosmetics - GoodManufacturing Practice (GMP)ISO22716 Cosmetics - GoodManufacturing Practice (GMP)

First-Pass Yield of TheProduction ProcessAcceptability of Spot ChecksRate of Quality-RelatedComplaintsClose Rate of Defects InManagement System ReviewIQC Pass Rate

ISO9001:2015

Proya Cosmetics Co., Ltd.Proya Cosmetics Co., Ltd.Proya Cosmetics Co., Ltd.Zhejiang Beute CosmeticsCo., Ltd.Zhejiang Beute CosmeticsCo., Ltd.

≤1.2ppm (reject ratio per1 million products)

Raw materials IQC pass rate 99.267%Packaging materials IQC pass rate

99.591%

Zhejiang Beute CosmeticsCo., Ltd.

ISO9001:2015

≥99%100%

≥99%100%

2024.3

99.677%

100%≤1.169ppm

100%

2025.22024.3

2024.3

2024.1

2024.3

Quality ManagementSystem Certification >

Key Performance Objectivesand Performance ofProduction Factories>

5354

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

In 2022, the Company improved its Quality Assurance and Quality Controlstandards, optimized the confirmation process of product production, andestablished an audit mechanism agreed upon by departments, such as research,development, and factory, to check product quality.

We have complete in-house testing capabilities and advanced equipment andinstruments, including the VISION SWIFT DUO integrated video and opticalmeasurement system from the UK, OLYMPUS wall thickness gauge, the SUNTEST light aging tester from America, the Agilent high performance liquidchromatography from America, and the inductively coupled plasma emissionspectrometer (ICP-OES). These allow us to measure the appearance of packagingmaterials, wall thickness, film thickness, hardness of electroplated coating,adhesion of surface printing and electroplated coating, light aging performance,impact resistance, solvent resistance, airtightness, fatigue properties, andcompatibility. We can also determine the content of preservatives, heavy metals,and sunscreen agents in cosmetics, and the content of prohibited and restrictedsubstances stipulated in the Safety and Technical Standards for Cosmetics.Safety and efficacy tests cover the entire product lifecycle, ranging from R&D,raw materials, and packaging materials to semi-finished products and finishedproducts. In this way, we ensure that products delivered to consumers are safeand effective.

In 2022, we carried out an internal quality audit and passed eight external auditsfrom regulatory units and cooperative units. The Company's quality systemwas confirmed by external audit units.During the reporting period, we did notencounter any incident related to quality and safety, nor did any lawsuitarising from the above matters occur.

To protect the rights and interests of consumers, we have formulatedthe ProductRecall Management and Product Recall Control Procedureto immediately stopselling and recall sub-standard products already sold or in transit. We conduct anannual product recall rehearsal to ensure the recall procedure is running effectively.During the reporting period, we carried out a recall rehearsal of Proya YouthActivating Lotion 160 ml.In the recall rehearsals, we coordinated with theCustomer Service Department, the Quality Management Department, the LogisticsDepartment, the Production Department, the R&D Department, and many otherdepartments. It took one week, from the filing of customer complaints to issuing ofrecall letters, to return the products. This recall rehearsal verifies the availability ofrecall procedures and traceable management system processes, and ensures thesuitability and conformity of our management system.

Post-MarketQualityManagement

Quality Control at theProduction Stage >

Formulate a raw material management system, set acceptance standards, andstandardize evaluation methods, and make each department strictly abide by theregulations of various documentsAdopt a raw material shelf-life control system and set quality control indicators forraw materials, including physiochemical, microbiological, and infrared spectrumfingerprint contro, etc.

Raw Material Control

Formulatethe Packaging Material Management Specification and other systemsEvaluate packaging samples and small-lot trial production of packagingSet up an inspection plan and release products only after they pass all inspectionsPackaging Material Control

Formulate process specifications in strict accordance with the production processapproved by the state, and manage the production process in a standardizedmannerDevelop evaluation specifications for semi-finished products and set quality controlindicators such as physiochemical, microbiological, and preservative additionsSample every lot of semi-finished products and regularly re-check inventory

Manufacturing Process

Carry out first-piece control and in-process control, and manage the quality of thepacking processThe MES system launched in 2021 collects quality data during the productionprocess to realize real-time sharing of on-site quality information and informationtraceability

Packing Control

Perform quality control of products against quality standards, including physical andchemical, stability, and heavy metal inspections. Products can only be releasedafter passing these inspectionsFinished Product Control

Establishthe Labeling and Traceability Control Procedurein strict accordance withthe requirements of laws and regulations.Make sure production records on the labels of all delivered products are traceable,including lot number, specification, process, and inspection records, etc.Ex-factory Inspection

5556

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

During product research and development, we keep a constant eye on the chemicalingredients we use in order to make them safer. Proya strictly abides by therequirements of laws and regulations such asthe Safety and Technical Standardsfor Cosmetics and the Catalogue of Already-Used Cosmetic Raw Materials (2021Edition). We do not use prohibited ingredients, including but not limited to more than2,000 ingredients banned bythe Catalogue of Prohibited Cosmetic Raw Materialsand the Catalogue of Prohibited Plant (Animal) Raw Materials for Cosmetics, suchas hydroquinone, phenol, retinoic acid and its salts, glucocorticoids, antibiotics, etc.On this basis, we adopt stricter standards than Chinese laws and regulations toregulate the selection of raw materials for cosmetics. By referring to the ingredientsand dosages in the relevant standards of the European Union, South Korea, andJapan, we prohibit the use of controversial ingredients in the development processof new products.

We strictly prohibit using ingredients clearly prohibited by laws and regulationsand thoroughly remove the prohibited ingredients in the warehouse in real time. In2022, we screened the impure ingredients of the raw materials in the warehousemany times and disassembled the ingredients to ensure the safety of the chemicalingredients. For controversial ingredients in clinical research and market feedback,we put forward ingredient upgrade programs for original formulas and graduallyreduce and phase out controversial ingredients.Our chemical safety management runs through all stages from R&D to post-market. During the stage of product development and filing, we invite professionalthird-party institutions to jointly conduct product safety assessments and adjustingredients according to the clinical research results and market feedback.For formulas already on the market, we follow changes in global regulationsand standards in real time, identify the controversial risk ingredients, conductevaluations and make decisions by relevant departments, and develop plans forupgrading or phasing out these formulas.During the reporting period, we have completely phased out the ingredientsof paraben preservatives and mineral oil in hero products in the salesand R&D stages. Due to the irritation of phenoxyethanol preservatives onAsian skin, we have gradually replaced the active substances containingphenoxyethanol in the product formula and optimized the mildness of thepreservative formula.

Chemical Safety

International safety standards for important chemicalswe refer toEuropean Commission

South Korea

Japan

LIST OF SUBSTANCES PROHIBITED IN COSMETIC PRODUCTSLIST OF SUBSTANCES WHICH COSMETIC PRODUCTS MUST NOT CONTAIN EXCEPTSUBJECT TO THE RESTRICTIONS LAID DOWNLIST OF COLORANTS ALLOWED IN COSMETIC PRODUCTSLIST OF PRESERVATIVES ALLOWED IN COSMETIC PRODUCTSLIST OF UV FILTERS ALLOWED IN COSMETIC PRODUCTS

Types and Restrictions of Cosmetic Colorants

Cosmetics Benchmark - List of Prohibited and Restricted Substances

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

SNName of raw materialsProgress of replacement

Iodopropynyl Butylcarbamate (IPBC)

Kojic acidAvobenzoneTriclosanLyralPropylene glycolImidazolidinyl ureaDiazolidinyl ureaParabenMineral oiMethylisothiazolinoneIsopropyl myristateCocamide DEAZinc pyrithione (ZPT)Talcum powderButylated hydroxytoluene (BHT)Plastic particles (polyethylene wax)PhenoxyethanolEmulgator containing PEGArtificial color

Mixture of CMIT/MIT and magnesiumchloride/magnesium nitrate(CMIT:MIT=3:1)

Has been phased outHas been phased outHas been phased outHas been phased outHas been phased outHas been phased outGradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased out (nolonger used in hero products)Gradually being phased outGradually being phased outGradually being phased outGradually being phased out

List of Ingredients ReplacedOver the Years >

We are also committed to improving the natural and organic properties of productsto reduce the environmental impact caused by the production and use of cosmetics.We provide consumers with more diversified products to meet the growing demandfor sustainable consumption. We start from the lifecycle of products and constantlyimprove their green properties through the selection of raw materials, use of naturaland organic raw materials, and improvements to formulas.

Incorporate green sustainability into raw material screening criteriaIn addition to setting screening criteria from the safety and efficacy of rawmaterials, such as the concentration of active ingredients, stimulation, etc., weincorporate the sustainability of production into the screening criteria and focuson the environmental friendliness of raw materialsUse more natural and organic raw materials in the R&D of new productsAccording to the ISO16128 Technical Definitions and Standards for Natural andOrganic Cosmetics Ingredients and Products, we select more natural ingredientsfor new products to enhance the green properties of products

Selection of Raw Materials

Use certified organic ingredientsWe select raw materials with third-party organic certification, such as rawmaterials in accordance with COSMOS, the internationally recognized standardfor organic and natural cosmetics that is certified by ECOCERT, the FrenchInternational Ecological Certification Center

Use of Natural and Organic Raw Materials

Continuously improve the organic, natural, and eco-friendly properties offormulasWe constantly improve product formulas to provide consumers with more organicand natural products

Improvements and Upgrades

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Protection of Consumer Service Rights and Interests

Adhering to the concept of heartfelt service and sincere hospitality, Proya iscommitted to providing consumers with a premium customer service experience.We have built a smooth online and offline customer service channel to provideconsumers with pre-sale, in-sale, and after-sale inquiry, consultation, andcomplaint services. We regularly organize training for marketing personnel tocontinuously improve their professionalism and service capabilities. We alsoregularly carry out customer satisfaction surveys and collect consumer opinionsand suggestions to optimize the consumer service experience.

In terms of consumer communication, we build consumer feedback channelsto listen to their opinions and suggestions. In 2022, Proya and TIMAGE brandsopened accounts on Weibo, Xiaohongshu, and other platforms to provide Q&Asand after-sales services for consumers. We also conducted after-sales trackingthrough these accounts. During the reporting period, over 20,000+ relatedproblems had been tracked and handled.To collect improvement suggestions, we carry out consumer communication andcollect feedback on products, services, and operations through return visits forevaluation, satisfaction surveys by phone, and other methods.In terms of consumer complaints, we have established a comprehensive complaint-handling channel linking our sales, R&D, and customer service departments totimely handle consumers' feedback and questions on user experience, after-saleservice, and product improvement suggestions.

ConsumerServices

Consumer Services

ConsumerCommunication

Consumer Service AbilityImprovements

Consumer SatisfactionSurveys

Consumer ExperienceOptimization

Method and Procedurefor Handling Complaints >

CustomerServiceChannels

Offline Store

Prova VIP Centeron WeiboE-commerceCustomerService

24-hourService Hotline

WeChat

User Experience

Product ImprovementAfter-salesExperience

Product QualityComplaints

Customer service personnel will take the questions ofusers and quickly provide professional suggestions andsolutionsUser needs are recorded and reported to solve theproblems encountered by users as soon as possible andto maximize their rights and interestsProducts are sorted and monthly reports are generatedand sent to the R&D Department for product upgradesand improvementsFactories, R&D, and quality departments work togetheron troubleshooting and implement targeted measuresaccording to problem severity to reach a consensus withconsumers and maximize their rights and interests

FeedbackCommunicationHandling Method

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

In terms of consumer feedback, we collect consumer comments on the TmallCustomer Voice module every month and hold monthly consumer servicemeetings. To improve internal management mechanisms, we co-ordinate oursales, R&D, factory, and customer service departments to follow up and handleconsumer feedback and questions on user experience, consumer services,product optimization, and logistics service.In 2022, we received feedback on the use of Proya UV Protective SunscreenSerum. We immediately went to the factory to investigate, promptly releasedan explanation, and opened an after-sales channel for consumers to solve theproblem smoothly. Moreover, we will launch our long-planned transparency factoryin 2023. Through online and offline channels, consumers can learn about theentire production process of products more transparently and openly to enhanceconsumer trust and satisfaction.In terms of optimizing consumer experience, we pay attention to consumers'purchases and usage experience, and actively track all stages of the transactionchain. We quickly identify problems that consumers may encounter and followthese up, and continue to optimize the consumption experience at all stages.

During the reporting period, in terms of the Proya brand, the servicesatisfaction rate reached over 95% on Tmall in February and September2022, winning the title of "Jinwangwang" Customer Service Team. Theservice experience score was always above 4.95 in the TikTok store. TheJD Customer Service Team ranked second for the Through Train service.In terms of the TIMAGE brand, the overall satisfaction rate exceeded 95%.The Tmall Customer Service Team won the title of "Jinwangwang" for fiveconsecutive months. Our alimebot comprehensive experience won firstprize on Tmall. In terms of the Hapsode brand, the satisfaction rate reachedmore than 95% on TikTok and Tmall, winning the title of the "JinWangwang"Customer Service Team.In terms of consumer service ability improvements, we are committed to buildinga professional and efficient consumer service team through talent training andbusiness innovation. In 2022, we established the online customer service trainingsystem - Proya Magic College - to provide online courses for all employees. Duringthe reporting period, over 500 trainees

completed the online training, 155 courseswere developed, and 75 examinations were conducted. These measures improvedtraining efficiency and enhanced the customer service staff's business ability andprofessional knowledge, providing consumers with a quality service experience.We also carried out business innovation in the RPA e-commerce automation,automating repetitive customer service processes. During the reporting period, wedeveloped 50+RPA scenarios to help the customer service team quickly cope withcustomers' problems, reducing customer waiting time.In terms of consumer satisfaction surveys, our business departments carry outannual consumer satisfaction surveys and collect consumer opinions on products,logistics, and services to learn about consumer needs.During the reportingperiod, TIMAGE brand conducted a questionnaire survey on the whole lineof products and services. A total of 16 surveys were conducted with 2,000participants. The satisfaction rate of products, services, and logistics reached94%, 96%, and 96%, respectively.

Measures for ConsumerExperience Optimization >

Reduce the use of customer service bots and provide a 24-hour manualonline service to improve the consumer interaction experience

Pursue "quick reply in 30 seconds" to respond to consumer questionsUse unified tickets to record after-sales problems and carry out closed-loop management to ensure that problems are fully handledFollow up the early warning and alerts on consumer services on thee-commerce platform to promptly improve the consumer experience

Online trainees refer to in-service employees (customer service personnel) and customer service personnel for

external cooperation.

Consumption Process Experience Improvements

Product Usage Experience Improvements

Update products according to consumer feedback after product launchto improve the user experience of the products themselves

Proya will conduct consumer blind testings before the launch of heroproducts and makeup products, and modify products according toconsumer opinions.

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Proya values information security and consumer privacy protection. We strictlyabide bythe Personal Information Protection Law of the People's Republic ofChina, and the Data Security Law of the People's Republic of China, and otherlaws and regulations. We have developed the E-commerce Data SecurityManagement System, Network Security Management Measures, InformationSystem Development Management Measures, and other management systems.In terms of data security and research and development, we require all employeesto strictly implement security systems to ensure compliance with data-secureproduction requirements. We follow up on the latest security policies and relatedregulations in real time. We follow up on the latest information security and privacyprotection policies in real time. In 2022, we updated our E-commerce Data SecurityManagement System and improved regulations on data security management,authority approval, data approval, and other aspects to strengthen consumerprivacy protection.During the reporting period, we did not encounter anyincidents related to customer privacy, nor did any lawsuit arising from theabove matters occur.We strictly control the access to and transmission of consumer information,declassify sensitive information, and restrict data duplication and the frequencyof access to consumer information. We also set permissions for the export ofsensitive information so that operators have no right to obtain user information.In 2022, we reviewed the existing data, tightened the access rights of the datadomain, and strengthened access control of the network environment.At the same time, we held internal meetings to promote our awareness ofprotecting consumer privacy. In terms of data use, we required data masking anddecryption for important content related to consumer privacy. In 2022, we held sixinternal meetings for discussion and publicity and communicated twice with externaldepartments often calling the data to explain the rules of data use restraints.

Business marketing is the process of interacting with consumers. In this process,providing consumers with true, accurate, and complete product and marketinginformation is the foundation for companies to carry out customer service. Theinformation consumers obtain from brands and products will affect their purchasingdecisions and further affecting the development of the industry.Valuing interaction and communication with consumers, we carry out marketingcampaigns in a responsible manner. We focus on conveying scientific andenvironmentally friendly concepts in the process of communicating with consumers,thus helping them make rational decisions and realize sustainable consumption.

Valuing truthfulness and accuracy in product marketing, we strictly abide bytheLaw of the People's Republic of China on the Protection of Consumer Rights andInterests, have formulated Product Copywriting Review Procedure, and establishedthe Product Technology Content Department under the R&D Innovation Centerto control the science-related content of products. In addition, we have reinforcedtraining for all customer service personnel to improve their awareness ofresponsible marketing.During the reporting period, we did not encounter anyincident related to market promotion and label use, nor did any lawsuit arisingfrom the above matters occur.

Understanding the safety and functionality of cosmetics is an important line of defensefor consumers to ensure their own safety. Through transparent ingredient disclosureand the education of chemical ingredients in various forms, we help consumers betterunderstand the efficacy of ingredients so they can make purchasing decisions morewisely.

To guide consumers toward sustainable consumption, we integrate ourenvironmental protection philosophy into our product and packaging design andpass it on to consumers.

ConsumerPrivacyProtection

ResponsibleMarketing andConsumerEducation

Proya's Principlesof ConsumerCommunication>

Convey product informationtruthfully, accurately, andcompletely

Help consumers tobetter understand andchoose products

We fully indicate product ingredients on labeling in accordance with the requirements of lawsand regulationsMoreover, we upload a complete ingredient list of products on APPs commonly used byconsumers, such as "Transparent Label" and "Practical Beauty", on which we openly andtransparently disclose product ingredientsWe clearly explain the ingredients used, the mechanism of action, and the source in thepromotion of all products

The packing box includes a reusable box that can store jewelry and other small items,making it more reusablePrint instructions and minigames on the inside of flower boxes and gift boxes to leadconsumers to keep and reuse them

We created the "This is Skin Care" feature, invited several authoritative dermatologists frompublic hospitals to livestream discussion of skincare issues, popularize professional skincareknowledge, and share diagnosis experiences, thus helping users build up a professionalskincare systemPass on the concept ofenvironmental protectionand lead consumers toconsume sustainably

Guaranteed Accuracy ofProduct Promotion

Resonsible Marketing TrainingWe have established the Product TechnologyContent Department in which professional R&Dpersonnel review product introductions to ensurethe correctness and accuracy of science-relatedcontent in the process of product promotionWe have establishedthe Product CopywritingReview Procedure. Marketing copywriting mustbe reviewed by departments such as brandmarketing, product development, research anddevelopment, and legal affairsInternal clinical trials and third-party tests for theprimary efficacy of products are carried out duringthe promotion process, for example: We engageda third party to issue a test certificate in orderto prove the highlighted promotional aspects ofTIMAGE Glaze Rejuvenating Multi-Effect MakeupPrimer, specifically that "the product improves cardpowder, dullness, and instant skin fineness"

Prior to the launch of a new product, we organizetraining of product information accuracy for brandmarketing, operations, and customer servicepersonnel, including Product texture science,product usage suggestions, etc.Customer service personnel receive at least threesessions of training in product knowledge andtake post-training examinations to ensure thatconsumers are provided with consistent productinformation in line with our standard productintroductionDuring the reporting period, the coverage rateof responsible marketing training for productmarketers and customer service personnel was100%

Administrative Measuresfor Socially ResponsibleMarketing>

Administrative Measures forChemical Safety and IngredientTransparency>

Measures for GuidingConsumers toward SustainableConsumption>

Responsible marketing:

Transparency regardingingredients:

Guide them towardsustainable consumption:

IngredientDisclosure

Knowledge ofIngredients

FunctionalDesignUse Guide

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Supply Chain Responsibility

The main types of our suppliers are material suppliers and OEM and ODMsuppliers. The longevity of our relationships with suppliers is based on the qualityof their products and services, and the stability of their business operations. Proyacomplies withthe Civil Code of the People's Republic of China, the Bidding Lawof the People's Republic of Chinaand other laws and regulations. We carry outeffective and thorough management of suppliers to prevent and control supplychain risks.We have established administrative documentation such as the SupplierManagement System and the Development Management System for NewSuppliers of Production Materials for maintaining thorough and normativemanagement of supplier access, evaluation, assessment, and review.

In terms of supply chain stability management, we have opened up our datainformation chain from the production end to the brand demand end bycontinuously upgrading supply chain automation, digitization, and intelligence. Thishas enabled us to create a more accurate and agile market response capability.We have established a supply chain stability guarantee mechanism in terms ofvalue, strategy, technology, and business to ensure resilience and stability of thesupply chain through scientific forecasts, early warnings, and supplier control.In addition, we have prioritized how our suppliers manage their upstream suppliers.To ensure the healthy and stable development of the supply chain, we identifiedsuitable suppliers for projects after assessing their financial stability and operations,management capabilities, technology development capabilities, productioncapacity, quality management capabilities, and supply delivery flexibility.

SupplierManagement

Formulate a complete set of quality control indicators, including chemical ingredients,appearance, consumer experience, and other items, to ensure that suppliers follow thestandards during productionBefore the production of the first batch of products, provide production management personnelwith on-site instruction and interpretation of the standards, with a focus on the application ofquality standards in actual productionCarry out unscheduled spot checks according to quality standards and on-site troubleshootingaccording to market feedback

Quality Control Measuresfor OutsourcedProcessing>

Quality Standard Formulation

On-site Instruction

Unscheduled Spot Checks

In terms of supplier quality management, we arrange regular on-site auditsof suppliers and provide special quality training for key suppliers.In 2022, wecompleted annual audits for 17 suppliers. In addition, we provided peer-to-peer quality training based on results of the annual audits and organizedintensive quality training for 18 suppliers on large single-item supportingpackaging.For OEM/ODM suppliers and other suppliers, we establishedManagement Systemof Outsourced Processingto strengthen quality control on outsourced processingthrough quality standards, on-site instruction, and unscheduled spot checks.

Supplier ManagementProcedures >

We conduct semi-annual supplier performance evaluations .TheProcurement Department , which is the initiating department and theQuality Management Department and the Price Assessment Departmentrate suppliers A , B , C , or D through online and offline SRM . Theevaluation mainly covers productquality , delivery , price , and valueaddedservices

Supplier Evaluation

Measures are taken based on the result of a supplier performanceevaluation . Level-D suppliers are considered unqualified suppliers , inwhich case procurement personnel will submit a supplier delete / changeform . Following multi-level approval of the recommendation . therelationship with the supplier is terminated

Unqualified Suppliers

In response to new demand generated during business operations thatcannot be met with existing resources , the Procurement Department willidentify new suppliersProfiles of new suppliers are previewed to single out potential candidateswhich will then be required to submit to an on-site audit New supplierswill be accepted after they have been rated according to new supplierevaluation standards

Supplier Access

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Proya understands that its procurement practices significantly impact theenvironment and society, and that we need to look at our responsibilities fromthe perspective of the value chain system as a whole. With an emphasis onthe environmental and social impact of the raw materials we use, we insist onthe responsible procurement of raw materials. We actively guide and supportour partners in their ESG management to encourage them to reduce their ownenvironmental and social impact.Therefore, we have set the goals of sustainability transformation across the entirevalue chain for 2025, and are committed to improving the sustainability of the entirevalue chain.

Building aResponsibleSupplyChain

Proya's Goals of SustainabilityTransformation Across theEntire Value Chain>

Our Measures for SustainableProcurement >

Our Measures for SustainableProcurement >

Specific Goals

Environment

Society

Date

We will drive sustainability transformation for all partners in ourvalue chain and share our sustainability actions with our industrypeers. We will disclose our product sustainability information inmultiple ways to share our sustainable consumption concepts withconsumers.All of our key partners will conduct ESG compliance assessmentsand we will provide ESG management support to all of our partners.We will encourage our strategic partners to reduce carbonemissions through initiatives and incentives across the value chain.More than 70% of the palm oil derivatives we purchase will beRSPO-certified palm oil. We will improve our traceability system forpalm oil purchased during the planning period.

The Commitment Letter of Business Guidelinesstates that suppliers must strictly comply withemployment regulations. They must not use child labor or forced labor and they must followthe principle of fairness and non-discrimination in employment. They must also abide by theprinciple of integrity and probity, and to reject any form of commercial bribery

We will achieve carbon neutrality across our entire value chain.

2025

2045

We preferentially select environmentally certified raw materials

We work with production suppliers to reduce environmental impactWe require suppliers to establish an environmental management system

We preferentially purchase environmentally friendly raw materials, including FSC-certifiedpaper, palm oil, environmentally-friendly ink, environmentally-friendly coating, andenvironmentally-friendly glue, etc.For raw materials originating in Africa, the Company gives preference to producers who havesigned fair trade agreementsNatural products are the core ingredients of Proya's products. For ingredients suchas boerhavia diffusa root extracts, tara gum, and cocoa resin, we give preference tomanufacturers that comply with the Nagoya ProtocolWe work with our suppliers to improve production processes and reduce the environmentalimpact of the production processWe require all suppliers to sign the Commitment Letter of Business Guidelines and establisha sound environmental management system to improve resource efficiency and reduceindustrial waste (i.e., wastewater, waste gas, and solid waste) and greenhouse gasemissions

In terms of palm oil procurement, we do not use palm oil in the production of ourproducts. When we purchase raw materials made from palm oil, we prioritize largesuppliers with strong ESG management practices and information on RSPO-certified palm oil. We learn from suppliers about the origin and source of the palmoil, understand its sustainability, and preferentially purchase RSPO-certified palmoil derivatives.We incorporate considerations such as environmental, labor, and ethics in oursupplier access audits. These include a variety of evaluation indicators, includingcompliant employment, employee training, honest operations, and environmentalmanagement.During the reporting period, a total of 222 suppliers received anESG compliance assessment, with a pass rate of 95.05%.We are committed to supporting suppliers in ESG management to drivesustainability transformation across the entire value chain. In 2022, we providedthree ESG training sessions for more than 50 suppliers of packaging materials andraw materials, accounting for more than 70% of our total purchases in these areas.Through the training, we have shared our sustainable development strategic planand ESG management knowledge with suppliers to promote their understandingand support of our sustainable development strategic plan, and to enhance theirawareness of ESG management.

ProvidedESG trainingsessions

Suppliersmorethan

The proportion of supplier'spurchase amount in the totalpurchase amount70%

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Employee Responsibilities

We strictly abide bythe Labor Law of the People's Republic of China, the LaborContract Law of the People's Republic of China, and other legal provisions.To protect employees from any form of discrimination in the recruitment andmanagement process, we have formulated and implemented administrativedocuments such as theStaff Recruitment and Hiring Management System, theSalary Management System, and the Staff Change Management Measures. Inaddition, we have established a labor union and signed a collective contract withthe labor union to protect the rights and benefits of employees. During the reportingperiod, we encountered no incidents related to recruitment and dismissal, workinghours and vacations, promotions, equal opportunities, anti-discrimination anddiversity, or labor standards. We faced no lawsuits in relation to these matters.

An equal dialogue relationship is conducive to the establishment of an efficientworking mechanism. It also allows more employees to be engaged in thedevelopment and operation of the Company, thus enhancing their sense ofbelonging. We continuously improve the communication mechanism withemployees, listen to their opinions and suggestions, improve corporatemanagement, and create an equal and open working environment.

Valuing employee benefits, we have formulated and strictly implemented theBenefit Management Measuresto provide employees with a rich and completebenefit system. Based on statutory benefits, we also provide supplementary andspecial benefits for employees. We also provide factory employees with specialbenefits, including free dormitory or housing subsidies, free working meals, andother rewards such as full attendance and seniority awards.

During the reporting period, we conducted employee questionnaires on greenoffice design, directions signs, and the provision of refreshments facilities,and actively adopted the opinions of employees to create a warm workplaceenvironment.

Employee Rights and BenefitsEmploymentCompliance

EmployeeCommunication

EmployeeBenefits

Policies of Employmentand Fundamental Rights ofEmployees>

Employee CommunicationChannels>

Related PoliciesSafeguarding Rights and benefitsPrinciple: be just, fair and openNo child labor: ensure that job candidates are of thelegal labor ageNo forced labor: encourage flexible work hours,accurate attendance records, regular checks on workintensity, and work-life balance

Social insurance

Lunch allowance

Special health benefitsSpecial benefits for factory employeesAnnuity benefits

Physical examinations commercial insuranceAnnual travel and team-building benefits

Cash gifts for weddings and funerals, holidaycondolence payments, birthday gifts, etc.High temperature subsidy

Housing fundStatutory benefits such as statutory holidays and annual leave

We carry out dismissal procedures in strict accordancewith labor regulations

We establish a fair and competitive salary systembased on performanceWe provide subsidies or allowances for transport,travel, and other allowances based on the variousdemands of a job or positionWe prioritize competency over seniority and rank, andpromote employees that show outstanding talent andan outstanding contributionThe results of employee performance evaluations aretaken as important factors for their promotion. Weestablished a dual-channel promotion mechanismfor expertise-oriented and management-orientedemployees

We implement a standard working hours system toensure that the standard working hours are 40 hoursper week, and overtime hours can be exchanged fordays offWe implement paid annual leave, marriage leave,funeral leave, and other statutory holidays inaccordance with national regulationsWe implement parental leave, nursing leave, and othertypes of leave in accordance with local regulations

Establishmentof an employeerepresentativeassembly

Opened onlinecommunicationchannels onDingTalk and OA

Conductemployeesatisfactionsurveys andtouchpointsurveys

SmoothemployeecomplaintchannelsEstablished aface-to-facecommunicationmechanismbetweenmanagement andemployees

Staff Recruitment and HiringManagement System

Management Measures forStaff DismissalAdministrative Measures forRequesting Leave

Salary Management System

Performance ManagementMeasure

Recruitment

DismissalWorkinghoursandvacations

SalaryandsubsidiesEvaluationandpromotion

Company Benefits >

Statutory Benefits

Special Benefits

Supplementary Benefits

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

As the Company grows and employees’ needs evolve, our benefit systemhas been upgraded to reward employees for their dedication, such as the Carefor Presenters. We have provided humidifiers and flowers for presenters whowork intensely for long periods of time in studios with dry air to make their workenvironment more comfortable.The labor union regularly organizes holiday condolences and other activities toenhance our employees' well-being and sense of belonging.

We advocate a work-life balance and a flexible work system to provide employeeswith more freedom in their working hours. We have built an employee lounge withfacilities such as fitness areas, and helped employees set up clubs, providing anaverage of RMB150,000/year in subsidies for the clubs. We regularly organizevarious cultural and sports activities to bring a colorful working life to employeesand to build a happy workplace where they feel satisfied and can maintain a healthywork-life balance.

Employee Care

Actions for EmployeeCare in 2022>

MeasuresActionsFor working mothers, we have created a private, clean, and cozy "house of mom's love",with sofas, chairs, refrigerators, wet wipes, and breastfeeding guides and posters.During the reporting period, we provided 30 working mothers (including breastfeedingmothers and mothers-to-be) with a "warm home" in the workplaceWe give our female employees a "3?8" pink gift bag and a half-day holiday on everyInternational Women's Day (March 8)We have teamed up with enterprises in the park to establish the secure dating platform"Take Your Sweet Time" to broaden the social networks of young employees andimprove their quality of life

We have actively organized holiday celebrations with our employees to make them feelat home. These included the "2022 Be Dynamic As A Tiger - Embracing the Year of theTiger and Sending Spring Festival Couplets" and making lanterns for the Lantern FestivalOur labor union and the labor union of Xihu District provided employees with interest-based training programs and certifications such as beautician, pastry chef, and teamasterWe held two company-wide multi-brand purchase events for employees in the secondhalf of the year, offering affordable product promotions, which achieved average sales ofover RMB400,000 per eventBy maintaining good communication with the CPC Youth League Xihu DistrictCommittee, we organized the 2022 Xihu District "Wave Riders" Summer Social Practiceand Exchange Activity for students from Zhejiang University and other universitiesWe have carried out one case of aid with charity fund to provide charity fund foremployees suffering from breast cancer

We provided presenters with humidifiers and flowers to make their work environmentmore comfortableWe provided psychological guidance for presenters to relieve work stress

We held the medal award ceremony to honor outstanding teams and individuals at theonline 2022 Annual Conference "Keep Going Further"We held the Veteran Employee Appreciation Ceremony under the slogan "10 years later,we are more confident and capable than ever". Designed to honor Proya's outstandingemployees who have been a part of the Proya family for over a decade, we invited themto share their experiences at the ceremonyTo honor outstanding employees and teams during Double Eleven, we held Proya's 2022Double Eleven Commendation Ceremony themed "All-rounders March into the Future"

Care forwomen

Care for youthOutstandingEmployee Award

Care forpresentersHolidaycondolences

Proya's charityfund

Exclusivebenefits foremployeesCommunication

Interest-basedtraining andcertification

Cultural and Sports Activities forEmployees In 2022 (excerpted) >

DescriptionActivityWe organized a singing contest for our employees, including Solo andGroup Singing, providing them with a stage to showcase their talentWe have established a Tennis Club, which is responsible for fundingtraining camps and organizing daily training for members to improve theirskills

We have invited collaborative teams to friendly basketball matches topromote teamworkTo encourage employees to pursue a better life, we established cross-border cooperation with COSTA to learn about the history of coffee andtasting techniques. We set up photography courses to provide trainingon photography equipment and light & shade effects. We also organizedExcel function learning exchange meetings to teach professional skills,offered the "Beauty of Technology" mini-classes to share knowledgeon cosmetic medicine, and worked with Qingteng Art Center to providecourses in tea art

Proya's "Star" SingingContestProya's Tennis Camp2022

Learning Club Activities

Badminton Challenge“Youth on Fire, The BestBadminton Player”Proya's BasketballShowdown “OutstandingPerformance Comes fromFearlessness”

We organized badminton singles tournaments to promote the hard-working culture of "execution"

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Adhering to the safe production principle of safe production, creating a safeenvironment, and ensuring physical and mental health, we abide by theLabor Lawof the People's Republic of China, the Law of the People's Republic of China on SafeProduction, and other legal provisions. We have also set a safe production goal.During the reporting period, we had zero accidents that resulted in casualtiesand had zero fires.

To establish a sound safety production management system, we formulatedinstitutional documentation such as theSafe Production Inspection and HiddenHazard Investigation and Management System, Safe Production Education andTraining System, Regular Meeting System for Safety, and Fire Safety ManagementSystem. We also regularly conduct security training and fire drills to safeguardemployee safety.

During the reporting period, we carried out the technological upgrade projectsin workshops to provide a physical guarantee for fire safety and handling. Weimplemented the "Massive Safety Training for A Million Employees" programto strengthen employees' awareness of safe production and familiarity withthe use of protective equipment, and provided knowledge support for safeproduction.

Occupational health and safety

Safe production

Goal >

“Zero major accidents resulting in casualties, zero fires,explosions, or other fire-related incidents, and fewer than

minoraccidents that caused slight injuries per year”

We improve safety awareness and adhere to a policy of “prevention first”. We regularly study the dynamicsof safe production and solve related problems occurring in production in a timely manner. We make full useof the safety protection fund to improve working conditions and operating environmentsWe have established and improved the safety organization network, perfected the accountability systemfor safe production positions, created the Safe Production Responsibility Letter signed at all levels, and fullyacted as a safety administrator to prevent illegal commands or operations

We strictly implement approval procedures for dangerous operations. All hazardous operations must receiveprior approval. Hazardous operations must be accompanied by a detailed operation plan, written disclosure,and safety protection measures. These must be available to be checked at any time to identify and correctany hidden dangersTo supervise the quality of safe production management, we centrally manage safe production records, andperform regular supervision and inspections to identify hidden dangers and eliminate them at the beginningWe established theEmergency Response Planfor Production Safety Accidents and a complete safetyaccident emergency response system covering organization, response, post-processing, special emergencyresponse, and on-site disposal plans

We strengthen safety education, improve the safety competence of employees, and perfect their safetyeducation records. Newly hires must undergo three levels of safety education and training, pass anexamination, and sign the Safe Production Responsibility Letter before they take up their positionsWe carry out annual "National Safe Production Month" activities. By conducting safety activities, we enhanceemployee safety awareness, improve safety competence, and promote safe production

AdministrativeMeasures for SafeProduction>

Improving the management system

Enhancing safety education

Strictly managing processes

We installed and renovated the monitoring system in our Huzhou Production Base (skincare factory),covering elevators in production workshops and batching workshops. These ensure fire preventioncapabilities and responsiveness if a production accident occursWe added fire-fighting equipment on the first floor of the workshop and upgraded the smoke detectionsystem to provide a physical guarantee of fire safetyWe assigned 20 employees to Zhejiang Safe Production Network Academy to attend training and passcertification for key positions in small and micro enterprises engaged in production and processing. Thetraining covered laws and regulations on safe production, accident prevention, and emergency responsemeasuresWe organized fire drills, which showed that employees from some departments are unfamiliar with theemergency plan and use of protective equipment. We provided follow-up training to enhance employeesafety awareness and emergency response capabilities, covering self-help and rescue skills in the case ofvarious disasters and accidents

Occupational Safety Workin 2022>

Technological upgrade projects in workshops

Massive Safety Training for A Million Employees

Fire Drills

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Attaching great importance to the occupational health of employees, we abideby the LaborLaw of the People's Republic of China and the Law of the People'sRepublic of China on the Prevention and Treatment of Occupational Diseases. Weproposed the occupational health management goal and formulated and strictlyimplemented the Occupational Health Management System to identify occupationaldisease risks in the production environment and take targeted measures to protectthe health of employees. During the reporting period, the skincare factory receivedISO45001:2018 OHSAS certification, and no occupational disease case occurred inthe Company.

Our occupational disease risks mainly include dust and VOC gas. Therefore,we provide employees with comprehensive occupational disease protection intwo areas: environmental and equipment safety protection and personal safetyprotection.

Our labor union provides medical mutual insurance and actively organizes healthtraining activities to protect the health of employees.

We are not only concerned about the physical health of our employees, but alsoabout their mental health. We create a relaxed and pleasant working atmospherefor our employees and actively provide them with psychological support.Duringthe reporting period, we partnered with One Foundation to open a hotline forpsychological guidance, through which our employees receive support formental health.

OccupationalHealth

OHSAS Certification >

Protective Measures againstOccupational Disease Risks >

The Achievements of Proya'sLabor Union In 2022 >

DescriptionValid PeriodSubject

ISO45001:2018 OHSAS

Medical MutualInsuranceOccupationalHealth Training

During the reporting period, we gave a total of four health lectures, which wereattended by a total of 200 employees and covered daily health care, CPRrescue, and the prevention of gastrointestinal diseasesDuring the reporting period, we provided a total of 1,345 in-service employeeswith medical mutual insurance benefits

From February 2022to February 2025Skincare factory

Environmental and Equipment

Safety Protection

We preferentially adopt new technologies,processes, and materials beneficial to preventingoccupational diseases and protecting workersWe introduced a dust and VOC collection systemto remove dust and VOC gas in workshopsWe have posted on-site warning signs andbulletin boards and distributed protective gear toemployeesWe regularly maintain and overhaul occupationaldisease protection equipment, emergencyrescue facilities, and occupational diseaseprotection articles for personal use

Goals of healthmanagement >

“No occupational disease, regular detection ofoccupational hazards, and health examinations”

Proya's high-quality development can never be achieved without the growth oftalent. We see improvement of employee competency as an important driver of ourdevelopment and continuously empower them to grow.In terms of employee training, we integrate internal and external training resources,provide personalized vocational training sessions for employees at differentstages of development, satisfy the demands of different employees for capabilityimprovements, and offer them a well-designed training and improvement system.In addition, we strictly abide by theManagement Regulations on OccupationalSkillsand have formulated theManagement Procedures of Occupational Skill LevelCertificationto standardize the certification of employees' occupational skill levels.We continuously optimize our training system.

TalentsDevelopment

EmployeeTraining

Training System >

Trainees: new recruitsTraining content: our history and culture, rules and regulations, and other content thatemployees need to knowTrainees: key employees from the business department, management traineesTraining content: brand marketing planning, R&D processesTrainees: middle managersTraining content: business thinking, management ability, leadership improvement

Trainees: all employeesTraining content: service capabilities, management capability improvement

Trainees: company executivesTraining content: vision expansion and strategic thinking improvement

Trainees: trainees are selected through the examination among all employeesTraining content: we purchased Alibaba business training courses to provide employeeswith a full range of general business education

Internal trainingOrientation

Professional training

Promotion training

Daily training

Executive study tour

External training

Personal Safety Protection

ResultItem

We provide workers with occupational diseaseprotection articles for personal use, andregularly organize training on the use of personalprotection articles to ensure the correct use ofprotection articles by employeesWe carry out occupational health examinationsfor workers who are exposed to occupationaldisease hazards before, during, and after theiremploymentWe provide all employees with annual freephysical examinations and give targeted healthlectures on observable health problems

7778

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

To encourage our employees to improve their educational level, we organizedfor 17 employees to participate in the education subsidy program hosted by theHangzhou Federation of Trade Unions in 2022.During the reporting period, we carried out a total of 55,286 hours of training,with an employee coverage rate of 46.27 and a per capita training time of upto17.40 hours.

During the reporting period, we held the third session of our "leadershiptraining camp", in which employees were organized to receive intensive on-the-job training and learning. Lasting for 16.5 hours, the training coveredmanagement, finance, and marketing. It provided leadership and servicecapability training for 40 employees. The pass rate was 100%, and 27.5%of trainees received a "Good" or higher result in the graduation exam.Toencourage employees to improve their skills in cosmetic manufacturing, and withthe support of the Human Resources and Social Security Bureau of Wuxing District,we carried out the occupational skill certification for cosmetic manufacturers levels3 to 5, with a total of 68 participants.To ensure the application of our "6*N" development strategy, we established theProya Brand Academy to cultivate more brand marketing professionals. Basedon business use cases, current talent development, and the findings of demandinvestigation, the Proya Brand Academy integrates theoretical learning, casestudies, on-the-job practice, evaluation, and sharing. Courses cover leadership,professionalism, and capacity.During the reporting period, we set up sixservice courses, covering nearly 400 employees.Proya Brand AcademyCourses in 2022 >

DescriptionCoursesTraining

We enhance the management knowledgeand skills of new managers, expand theirhorizons, and introduce new workingconcepts and practical experience

Role Perception for ManagersMTP Middle LeadershipMBP Project ManagementStrategy and Goal BreakdownBudgeting, Financial Managementand AnalysisPractice sharing sessions formanagersWhat is Product MarketingAITPL PrinciplesThe Practical Guide to ProductMarketingProduct marketing workshopsProfessional Thinking andAwarenessProfessional CommunicationExcel Skills ImprovementPPT Skills Improvement

We extract the best methodologies fromour work practices to enhance the skills ofproduct marketing professionalsWe regularly provide professionaldevelopment courses to enhance theprofessional awareness and skills of newrecruits

Managertraining camp

Productmarketingtraining campComprehensivecapacity

In terms of employee promotions, we have formulated thePerformanceManagement Measures, the Personnel Management Measures, the InternalCompetition System, and other management systems. We employ a consistentperformance management system and evaluation approach to ensure that theperformance evaluation standards are open to employees at all levels, that theprocedures are fair, and that the appointment and promotion of managers atall levels is open and transparent. We provide smooth promotion channels formanagement-oriented and expertise-oriented employees according to thecharacteristics of the position.We prioritize competency and performance over seniority and rank and promoteemployees with outstanding talent that deliver an outstanding contribution.Promotions are based on the results of the talent pool selection test andrequirements of our organizational structure and business opportunities.We have established an employee rotation mechanism to expand their knowledgeand help them on the career development plan. We conducted manager evaluationfeedback program based on the key leadership of business departments, with theaim of improving the leadership and cohesiveness of key cadres.

During the reporting period, we conducted a questionnaire on the keyleadership of business departments, with the focus on evaluating synergy,teamwork, and effective communication among the key departmentalmanagers.The questionnaire had a response rate of 93.6% and indicated thatthe key cadres perform well in leadership and teamwork, but they could do betterin talent selection and development. Based on the questionnaire, we will adjustpromotion training content to help key departmental managers improve theirmanagerial skills.

EmployeePerformanceEvaluation andPromotion

Employee RotationProcess >

We conduct the talent counting every July and December to determine rotationrequirementsTalent Counting

Plan DevelopmentWe communicate with employees to learn about their understanding of their newposition and performance requirementsEmployee Communication

After the rotation plan is approved, we prepare a handover list for the previouspositionsImmediate superiors act as mentors for the new positionHandover And Counselling

After the rotation, we set a three-month probation period during which time theperformance-level salary remains unchangedAfter the probation period, we carry out performance evaluation and determine jobgrade and salaryEvaluation

We have developed a rotation plan based on the needs of employees andresponsible departmentsWe submit the rotation plan to the Office of the General Manager for approval

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Community Responsibility

Proya upholds the corporate mission of Ever-lasting Beauty and Sharing Bliss.We advocate the social value of "aesthetics" and focus on key issues in society.Relying on our brand influence and expertise, we have issued initiatives and actedto deliver a beautiful life to everyone. In 2022, we directly benefited about430,000people

and indirectly benefited 119 million people

through social advocacyactivities.

SocialAdvocacy

Social Advocacy Campaigns in 2022

>

The number of people directly influenced is the number of people directly benefiting from the projects in which they are involved.

The number of people indirectly influenced is the number of people influenced by Proya's projects, such as the number of people influenced byonline campaigns and related offline activities.

ProjectProject DescriptionProject DataAreas ofInterest

"Gender doesnot divideus, prejudicedoes!"Campaign onWomen's Day

"EchoProject"Youth MentalHealthCampaign

"EchoProject"Youth MentalHealthCampaign

FireflyProject -"Anti School-bullying"Campaign

Start time: March 2022Project description: We worked with the femalefootball player Wang Shuang and the NanxingHexingtang Lion-dancing Team to launch the TVC"Lion-dancing Girls". We also partnered with sevenbrands on advertisements, with the aim of breakingthe stereotype of gender and speaking out for genderequality

The Weibo topic #Gender does not divideus, prejudice does!# received a total of300 million views and generated 180,000discussionsThe TVC "Lion-dancing Girls" had 19,000retweets and nearly 50,000 likes. It waswatched almost 300,000 times on BilibiliWe donated books to 10 rural elementaryschoolsThe gender education documentary "TheSame Sky: How We Conduct GenderEducation" was watched almost 180,000timesStart time: March 2022Project description: We worked with the cultural IP"Xi'an Fang Suo Commune" to launch a themed booklist and donate books to 10 rural elementary schools

Start time: October 2022Project description: We upgraded Proya's EchoProject in 2022:

We released "Outlet", a video touching upon mentalhealth and worked with the psychological consultantLi Songwei and Du Sujuan, a literature professor atEast China University of Political Science and Law,to release two charity videos: "We need to see e achother better" and " Adolescents can cry if they're inpain"We presented a list of audio-visual works of soothingbooksWe worked with the Xiaoyuzhoufm APP to launch fivespecial podcasts about emotionsWe teamed up with Dr. Liu Dan, a clinical psychologistfrom the School of Psychological and CognitiveSciences, Peking University, to offer open onlineclasses, and invited psychologists to co-host offlinepublic lectures in Qingdao, Xi'an, Chengdu, and SanyaWe cooperated with Beijing New Sunshine CharityFoundation to open a long-term hotline forpsychological guidanceStart time: October 2022Project description: Proya and China EducationTelevision jointly launched the "Firefly Project - AntiSchool-bullying Campaign". The project included acharity video, public advertisements, and the launch ofthe School Bullying Prevention Guide. The goal was toconvey the message that no aspect of school bullyingis trivial, and that even the smallest beam of light canbreak through the deepest darkness

Start time: May 2022Project description: We teamed up with Teacher LiuWenli, Beijing Xingzhi School and Beijing MagnoliaCommunity Services Center to launch the gendereducation documentary "The Same Sky: How WeConduct Gender Education"

Genderequality

Mentalhealth

Mentalhealth

Youth andgrowthStart time: May 2022Project description:

Proya partnered with China Youth DevelopmentFoundation to launch the campaign. As of May 2022,we had set up 10 "spiritual resting places" in 10 middleschools in Chongqing and created a fixed place andprofessional environment for teachers to conductmental health education by providing psychologicalsandboxes, therapeutic equipment, and mental healthbooksWe organized "Teacher-Student CommunicationWorkshop" training sessions in the 10 resting placesto help teachers understand common problemsabout teacher-student communication, mastercommunication skills, and improve professionalliteracy through case sharing, example simulation,and practical exercisesIn the 10 middle schools mentioned above,we recruited 40 students through teacherrecommendations or self-enrollment by parents andstudents at the "spiritual growth" summer camp forProya's Echo Project

During the reporting period:

We built spiritual resting places in 10middle schools in ChongqingWe worked with a team of psychologyteachers from 10 middle schools inChongqing to organize three parenttraining sessions and two teacher trainingsessionsWe recruited 40 students from 10 middleschools in Chongqing to attend the EchoProject's "spiritual growth" summer camp

The charity video was watched more than23 million times and played 95 million timesby China Education TelevisionAs of October 16, 2022, the Weibo topic#Anti school-bullying# had received morethan 140 million views and generated over14,000 discussionsThe outdoor public advertisement wasplaced on 54 bus stops in six citiesA total of 9,000 copies of the SchoolBullying Prevention Guide were issued"Visible Onlyto Moms"Mother'sDay SpecialCampaign

Start time: May 2022Project description: Proya launched the Mother's DaySpecial Campaign "Visible Only to Moms", calling oneveryone to break the stereotype of mothers andmake more family members aware that "tasks shouldnot be assigned based on family roles". The campaigncalled on every family member to shoulder familialresponsibilities equally

Familyresponsibility

As of December 2022, the Weibo topic#Family responsibilities should not bevisible only to moms# was viewed over11,755,000 times and had generated morethan 21,000 discussions

Areas ofInterest

ProjectProject DescriptionProject Data

During the reporting period:

Our public short films were played over

10.05 million times

More than 1,400 Douban usersspontaneously released books and audio-visual works designed to soothe emotionsOver 140,000 Xiaoyuzhou podcast APPusers listened to special podcasts aboutemotional well-beingOnline public welfare courses werewatched more than 10,000 times, and 200people participated in offline public welfarelecturesWithin 9,033 minutes of the total servicetime, the hotline for psychologicalguidance had received over 658 calls andthree cases of suicide crisis interventionoccurredA total of 180,000 copies of the publicmanual on emotional healing weredistributed

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Youth education is critical to the future of the country and the hope of the nation.It is a core area of interest for Proya's public charity work. We actively implementpolicies such as theOpinions of the Central Committee of the Communist Party ofChina and the State Council on Comprehensively Promoting Rural Revitalizationand Accelerating the Modernization of Agriculture and Rural Areas, the Medium-and Long-term Youth Development Plan (2016-2025), and the China NationalProgram for Child Development (2021-2030)issued by the State Council. Wesupport youth development through paired assistance, charitable donations, andother methods.

In addition, we actively organize employees to participate in volunteer services.During the reporting period, we established a volunteer team and arrangedfor more than 60 employees to help the park perform 20 volunteer servicesto aid in community work. We supported the Adream Foundation's "DreamClassroom" project to raise funds and launched a fundraising initiative duringthe 95 Philanthropy Week to mobilize social support.

Public Charity

Public Charity Projects >

Partner

Progress and Results Duringthe Reporting PeriodProject"Every CountyHas One Dream"Charity ProjectPaired assistance

Shanghai Adream FoundationLiwu Village, Jiulong County,Garzê Tibetan AutonomousPrefecture, Sichuan Province

We donated RMB1mn to the "Every CountyHas One Dream" Charity Project, which will beimplemented in 2023During the reporting period, we donatedstationery and books to the village to strengthenits educational infrastructure

Corporate Governance

We have improved our corporate governance structure and continue to enhanceour standard operating capability in accordance with relevant laws and regulationssuch as theCompany Law of the People's Republic of China, Securities Law ofthe People's Republic of China, Rules of the Shanghai Stock Exchange for StockListing, Code of Governance for Listed Companies, and management regulationsincluding the Articles of Association.We convened and held general meetings of shareholders in strict accordancewith the Articles of Association, treating all shareholders equally. We made it asconvenient as possible for shareholders to participate in general meetings so thatthey can fully exercise their rights as shareholders. In 2022 and, based on our ownbusiness development, we implementedthe Plan for Proya's Profit Distributionand Capitalization of Capital Reserves for 2021 and Proposal on the Grantingof Restricted Shares to Incentive Recipients, and amended some articles of theArticles of Association, including the registered capital and the total number ofshares of the Company.In 2022, we amendedthe Rules of Procedure of the General Meetings ofShareholders of Proya Cosmetics Co., Ltd., Rules of Procedure of the Board ofDirectors of Proya Cosmetics Co., Ltd. and Rules of Procedure of the Board ofSupervisors of Proya Cosmetics Co., Ltd. in accordance with the Company Law ofthe People's Republic of China, Securities Law of the People's Republic of China,Rules for the General Meetings of Shareholders of Listed Companies and Articlesof Association. All shareholders, directors, supervisors, and senior managementpersonnel are diligent and responsible, and effectively exercise their rights andperform their obligations in accordance with the relevant rules and regulations ofprocedure. The actual situation of our corporate governance complies with therequirements of the normative documents on the governance of listed companiesissued by the China Securities Regulatory Commission and the Shanghai StockExchange. We received no document that required a competent authority toenforce an administrative supervision measure.

CorporateGovernance

Composition of OurBoard of Directorsand The ConveningOf Three Meetings in2022 >Directors

Independent Non-

executive Directors

Shareholders Meetings

Board Meetings

Executive Directors

Supervisors, including one

employee representative

Meetings of the board ofsupervisors

proposals and reports have been deliberated, read, reviewed, or heard

Composition of the Board of Directors and the Board of Supervisors

Convening of three meetings

Meetings of special committees of

the board of directors

Chart of corporate governance structure

>

Composition of corporate directors and senior executives remuneration in 2022 (Unit: RMB)

>

For directors and senior executives, we have established a well-developedremuneration and incentive system. The remuneration of our directors and seniorexecutives consists of two components: fixed salary and variable compensation.The amount of variable compensation is determined by their annual performance.Sustainable performance is also included in the variable compensation. Wecorrelate our sustainability performance with the remuneration of directors andsenior executives to encourage the achievement of our sustainable developmentgoals.

Position

Regular pay

Fixed salaryVariable compensationPost wageAnnual

bonusesAllowances andothercompensation

Sustainableperformanc

Totalremunerationfor the year

EquitypaymentsNameHOUJuncheng

HOUYamengJINYanhuaWANG Li

FANGYuyou

Chairman of theBoardDirector, GeneralManagerDirector, DeputyGeneral ManagerDeputy GeneralManagerDeputy GeneralManager, BoardSecretary andCFO

240,000.00240,000.0086,000.00120,000.00120,000.00

240,000.00240,000.0086,000.00120,000.00120,000.00

480,000.00480,000.00128,000.00180,000.00360,000.00

160,000.00160,000.0050,000.0070,000.00100,000.00

509,445.00509,445.00

130,586.00

217,916.20

501,723.77

1,629,445.001,629,445.00480,586.00707,916.203,157,141.421,201,723.774,059,181.82

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Board ofDirectorsESG ManagementCommittee

Strategy CommitteeBoard of Supervisors

Office of the Board ofDirectors

Office of theChairman of the Board

Corporate CultureDepartment

Securities InvestorRelationsRemuneration andAppraisal CommitteeNomination CommitteeInternal AuditDepartment

Audit Committee

Brand marketing platforms: Brand Marketing Department, Product Launch Department, Visual Department

Administrative service platforms: Information Management Department, Administration Department, Engineering DepartmentSupply chain platforms: Procurement Department I, Procurement Department II, skincare factories, make-up product factories,Logistics Department

Office of the GeneralManagerDeputy GeneralManager

Executive DeputyGeneral ManagerInternational Academyof SciencesR&D and InnovationCenterProduct DesignDepartment

Investment and M&ADepartmentHuman ResourceDepartmentData PlatformDevelopmentFinance Department

Proya Business UnitTIMAGE BusinessUnitUzero Business UnitAnya Business UnitNew Brand BusinessUnitE-commerceBusiness Unit IE-commerceBusiness Unit IIE-commerceBusiness Unit III

Strategic Management andLegal Affairs

Chairman of theBoard

GeneralManager

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

We strictly abide by theCompany Law of the People's Republic of China, SecuritiesLaw of the People's Republic of China, and other relevant laws and regulations tofulfill our information disclosure obligations to ensure the truthfulness, accuracy,completeness and timeliness of information disclosure, and to guarantee that allinvestors have fair access to company information. During the reporting period, wehad no violations of information disclosure and investors' rights or penalties.We accurately fulfill our information disclosure obligations in strict accordance withregulatory requirements. We disclose ESG information through environmental,social, and governance (ESG) reports. We hire professional external agencies toprovide ESG training to relevant departments of the Company and enhance internalunderstanding of ESG.We adhere to the principle of equal opportunity for investors. In order to protectthe rights and interests of small and medium investors, we take active measuresto communicate with them so they better understand and trust the Company. Wecontact them through telephone calls, emails, the "E Interaction" platform of theShanghai Stock Exchange, performance presentations, visits and surveys, onlineexchange, and other methods.

Investor Relations

InformationDisclosureand InvestorCommunication

Investor communicationchannels >

Social Recognitionof Our InformationDisclosure and InvestorCommunication in 2022 >

Awarding bodyAwardA-level Evaluation of Information Disclosure of CompaniesListed on the Mainboard of the Shanghai Stock Exchange Best Practice Award for Directors of Listed Companies in 2022Best Information Disclosure AwardOutstanding IR Enterprise AwardPerformance Presentation Innovation AwardOutstanding IR Team Award

Shanghai Stock ExchangeChina Association for Public CompaniesIRSC 6th China IR AwardsQuanjingQuanjingQuanjingQuanjingSmall and Medium Investor Relations Interaction Award

Telephone callsEmailsPerformance

presentations

Investorsurveys andreceptions"E Interaction"platform of theShanghai StockExchange

While striving to achieve rapid growth in scale and steady growth in economicbenefits, we pay attention to giving reasonable returns to investors based on ourprofitability and the need for production and operations. We employ a prudentdividend distribution policy, pay a stable dividend, and actively reward shareholders.In 2022, the Board of Directors, the Board of Supervisors, and the General Meetingof Shareholders deliberated and approved thePlan for Proya's Profit Distributionand Capitalization of Capital Reserves for 2021. We completed the distribution andcapitalization on May 30, 2022.

The social contribution per share reflects the value created by the Company forsociety and stakeholders. The social contribution value per share of the Companyin the past three years is:

Investors' Rightsand Interests

Cash dividend distribution inthe past three years >Dividends per 10 shares (RMB) (tax included)Year

Year

202020212022

2020

Social contribution per share

(RMB)(tax included)

6.227.247.18

20212022

7.2

8.6

8.7

Performance of InvestorCommunication in 2022 >Issued a total of

periodicannouncementsCarried out

investor surveysand communication activitiesonline and on site

Issued a total of

temporaryannouncementsHost investor onsite visite for over1,000

institutional investors

Social contribution value per share = (net profit of the Company + tax revenue created for the country in the year+ wages paid to employees + loan interest paid to creditors such as banks + external donations and other valuecreated for other stakeholders - other social costs caused by environmental pollution or other reasons)/total

number of shares of the Company.

To build a risk management mechanism that supports strategy implementation,builds integrity, and ensures the effective operation of our risk managementsystem, we have formulated theInternal Audit Management System, ApplicationGuidelines, and other institutional documents. We have established institutionaldocumentation for each subsidiary and business unit, optimized internal controlsystems, realized the management of and response to internal and external risks,and ensured the low-risk operation and high-quality rapid development of theCompany.Under the guidance of theInternal Control Application Guidelines and ProcessSystem Management, we have established independent processes and supportingregulations for each business unit, each functional department, and each specificproject to rapidly respond to market needs. Specifically, we can promptly identifyand classify five major risk categories, including business decision-making risks,legal violation risks, distorted property reports, endangered asset safety, andmalpractice. We require the description of specific risk control objectives andmeasures to improve the efficiency of internal risk management.

Internal Control

specialaudits

departureaudits

Best Internal Control Award for ZhejiangPublic Companies

4TOP30

Our Internal Audit Department regularly conducts special audits and departureaudits to ensure that our business activities are legitimate, compliant, andauthentic. We have strictly audited contract performance, related transactions, andother key areas; promptly handled violations or missed appointments; and boostedthe continuous improvement of our business process and operations system.In 2022, our Internal Audit Department carried outfive special auditsandfourdeparture audits, regularly followed up on the audited projects that had problems,and communicated with auditees in real time to ensure the implementation of audit-based corrections. We made the list of the"Top 30 Best Internal Control Awardfor Zhejiang Public Companies"at the 6th Symposium on the High-qualityDevelopment of Public Companies.

ESG Management Practice Report

8887

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Compliance Operation

We regard the compliance of our business operations as the cornerstone ofsteady development. As such, we have established a comprehensive compliancemanagement system that we continue to improve. We actively identify compliancerisks in the production and operation process with a focus on the risks involved inanti-corruption, anti-bribery, environment, and labor rights.We have established a multi-level monitoring and auditing mechanism and set up avariety of compliance reporting channels including the internal document EmployeeMonitoring and Reporting Management System, an external reporting hotline, anda reporting mailbox. We take every report seriously and responsibly. Our InternalAudit Department will investigate and handle all related issues.

ComplianceManagementSystem

Employee ReportingProcess >

The Internal Audit Department registers the whistleblower and records all reportedmatters.Register

The Internal Audit Department holds internal discussions to determine whether theinvestigation conditions are met and whether the matter is significant.The Internal Audit Department reports significant reported matters to the DeputyGeneral Manager, the General Manager, the Board Chairman or the AuditCommittee in a timely manner.

Accept

The Internal Audit Department forms an investigation team, designates the teamleader, and begins the investigation.If the investigation requires the support or participation of other functionaldepartments, business units, or subsidiaries, those organizations shall providesupport.

Form an Investigation Team

The investigation team leader begins the investigation.The investigation will be completed within 30 days after the report is accepted.If it is difficult to advance the audit schedule or a major challenge occurs, theinvestigation may be extended to up to 90 days.Investigate

The investigation team issues an investigation report, submits it to the Office of theGeneral Manager, and handles it according to relevant regulations of the Company.Significant matters are submitted to the Audit Committee and to the Board ofDirectors.Reported matters that violate national laws are referred to judicial organs.

Report

In 2022, our Legal Department reconstructed its organizational structure inaccordance with our business development requirements. It implementedprofessional and refined management with a clear division of labor and set upvarious modules, including "civil and commercial integration", "e-commercecompliance", "intellectual property compliance", and "investment and financing".These actions significantly improved our compliance governance capabilities.During the reporting period, we carried out a series of rule of law promotion andeducation activities. Our Legal Department has prepared and released the Proya'sLegal Advocacy, an internal publication on legal publicity, which covers threemajor sections: New Regulation Express, Hotspot Analysis, and Case-basedLaw Interpretation. These are designed to enhance employees' awareness ofrisk prevention. The Company and our Legal Department organized regulatorycompliance training activities for employees. A total of

people attended a totalof

555.5

hours of training during

external expert training sessions and

internallegal training sessions. These training activities further integrate the concept ofrule of law into corporate management and promote the corporate compliancemanagement concept of encouraging management by law and fostering efficiencythrough management.

The report-handling personnel keep the personal information of the whistleblower and thespecific content of the reported matter strictly confidential. Investigations are carried outwithout revealing the whistleblower's identity. Unless it is agreed by the whistleblower, thewhistleblower's name, department, contact information and other information will not bedisclosed under any circumstancesReport-handling personnel who violate confidentiality regulations or improperly performtheir duties will be punished severely based on the circumstance and consequence.Perpetrators of crime will be handed over to judicial organsNo unit or individual is permitted to intercept or delay the whistleblower's report underany pretext, nor retaliate against the whistleblower. Those who retaliate against thewhistleblower or their family members, once verified, will be punished severely inaccordance with the relevant regulations of the Company. Where it constitutes a crime,they will be handed over to judicial organs in accordance with the lawWhere a reported matter is verified to be true, and those who violated the laws anddisciplines are punished properly thereby recovering or reducing losses for the company,the Internal Audit Department may suggest commending or rewarding the whistleblower inaccordance with relevant regulations of the company. In order to protect the whistleblower,the reward, after being approved by the Office of the General Manager, shall be distributedin a nonpublic manner unless it is agreed on by the whistleblower

Whistleblower ProtectionMeasures >

External experttraining sessions

Internal legal trainingsessions

Total traininghours

555.5

Peopleattended

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

To prioritize codes of ethics in our business operations, we strictly abide bythe Anti-unfair Competition Law of the People's Republic of China, Anti-unfairCompetition Ordinance of Zhejiang Province, Bidding Law of the People's Republicof China, Criminal Law of the People's Republic of China, and other laws andregulations, as well as the Anti-bribery and Anti-corruption Management System.Our goal is to eradicate corruption within the Company.During the reportingperiod, we did not encounter any incident related to corruption, bribery,extortion, fraud, or money laundering, nor did any lawsuit arising from theabove matters occur.For employees, we implement the Thirty-Two Rules of Proya and sign theCommitment to Integrity and Self-discipline with them to strengthen theirawareness of being honest, upright, creditworthy, and trustworthy. All directors andsenior executives of the Company have signed the Convention on Integrity andSelf-discipline and abide by Proya's code of business ethics.For procurement from suppliers and brand cooperation, we require all raw materialand packaging material suppliers to sign the Commitment to Business Principles.We require brand promotion partners to sign the Cooperation Agreement inIntegrity. We strictly abide by anti-corruption and anti-bribery principles, andclearly specify the definition of commercial bribery and penalties in our procurementcontracts. We blacklist suppliers that violate our anti-corruption principles. If asupplier's behavior constitutes a crime, we refer the case to state agencies toinvestigate criminal responsibility. We require personnel within the PurchasingDepartment to sign the Commitment to the Code of Ethics and Code of Conduct forPurchasing Personnel, and strictly control the risk of occupational bribery duringprocurement management.The Company carried out anti-corruption audits as planned. During the auditprocess, our Internal Audit Department focused on key management links prone tocorruption such as price and expense settlement ways. The audit plan covers theCompany's crucial operation process every two years.In 2022, we organized two training sessions on anti-corruption and businessethics: "Compliance with Business Ethics and Reinforcement of Integrity and Self-discipline" for directors and key management, and "Business Ethics Standards andIntegrity and Anti-Corruption" for all employees (including employees under servicedispatch and part-time employees). These sessions aimed to bolster anti-briberyand anti-corruption education and foster a culture of integrity among employees.

Anti-Corruptionand BusinessEthics

We strictly abide by the Patent Law of the People's Republic of China, CopyrightLaw of the People's Republic of China, Trademark Law of the People's Republicof China, and other laws and regulations. We have developed intellectual propertymanagement rules, including the Intellectual Property Management System, theTrademark Management Measures, and the Patent Management Measures.These ensure that we do not infringe on the intellectual property of others andprotect our own.In 2022, we established an Intellectual Property (IP) management system tostrengthen IP protection in terms of IP layout and management, risk warning andcontrol, process and system development, professional talent training, and toolinformatization. We added management rules such as the Compliance Guidelinesfor the Use of Proya's Software, Compliance Guidelines for the Use of Proya'sFonts and Compliance Guidelines for the Use of Proya's Pictures to strictlycontrol the use of software, fonts and pictures by business units and eliminate thepossibility of intellectual property infringement.

Our Intellectual Property Department has launched special crackdowns and filedlawsuits against violating and infringing acts. During the reporting period, ourIntellectual Property Department launched special crackdowns and filed lawsuitsagainst violating and infringing acts. For example, on WeChat, the departmentcracked down on fake hydrating masks that infringed on Proya's registeredtrademark. On Pinduoduo, the department sued the store and manufacturer ofthe INSBAHA Scepter Mascara that infringed on the appearance patent. We wereawarded more than RMB250,000 in the first instance. Hapsode had more than 320infringing links removed from various e-commerce platforms and filed 19 trademarkinfringement lawsuits. TIMAGE had more than 360 infringing links removed frome-commerce platforms, shut down five infringing websites, and filed 60-plustrademark infringement lawsuits. These crackdowns and lawsuits effectively slowdown the growth of counterfeit sales on various e-commerce platforms and defendthe legitimate rights and interests of the Company and consumers.During the reporting period, we faced two cases of intellectual propertyinfringement lawsuits arising from appearance design by suppliers. Bothwere withdrawn after the suppliers and the plaintiffs reached a settlement.

To prevent the recurrence of similar incidents, we formulated and implementedappropriate management rules and organized training sessions on the legitimateuse of software, fonts, and pictures by relevant business units.

Protection ofIntellectualProperty

In the course of an R&D project , we promptly protect the intellectual property generatedduring the R&D process .We actively carry out intellectual property registration , filing ,application , registration andother rights confirmation work

We have set up an intellectual property training and publicity fundand carry out annualtraining and publicity campaigns for intellectual property protection

Before we initiate a new R&D project , proceed with new product development , or introduceor exportnew technologes and products , we conduct intellectual property searches to ensurethat we do not infringe onthe intellectual property of othersWe strictly control the use of software , fonts and pictures by business units and eliminate thepossibility of intellectual property infringement

Intellectual PropertyManagement Measures >Protecting Our Intellectual Property

Intellectual Property Advocacy

No Infringement on the intellectual Property of Others

ESG Key Quantitative Performance9394

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

ESG Key Quantitative Performance

Environmental Data

Unit202020212022IndicatorsNumber of punishments for violating environmentalprotection laws and regulations

Discharge of hazardous waste per RMB10,000 ofrevenueScope 1 greenhouse gas emissionsScope 2 greenhouse gas emissionsGreenhouse gas emissions per RMB10,000 ofrevenue

Total greenhouse gas emissions

Power consumption per RMB10,000 of revenueNatural gas consumption per RMB10,000 of revenueGasoline consumption4Diesel consumptionTotal water consumptionWater consumption per RMB10,000 of revenueTotal consumption of recycled waterProportion of water recycled and reused in totalwater consumptionTotal use of packaging materials used on finishedproductsMaterials used per RMB10,000 of revenueTotal waste gas emissionsTotal waste gas emissions per RMB10,000 ofrevenue

Chemical oxygen demand (COD) emissions inwastewaterBiochemical oxygen demand (BOD) emissions inwastewaterAmmonia nitrogen (NH3-N) emissions inwastewaterTotal amount of Non-hazardous waste generatedTotal amount of hazardous waste generated

Discharge of Non-hazardous waste per RMB10,000of revenue

Discharge of industrial wastewater per RMB10,000of revenueIndustrial wastewater discharge

Total natural gas consumption

Power consumption2

Total clean power consumption3

Case(s)

MWh

MWh

L

t

tt

kgkgkg

kg/RMB10,000

kg/RMB10,000

kg/RMB10,000

tCO2e/ RMB10,000

tCO2etCO2etCO2e

L

m

m

m

m

m

m

/RMB10,000

m

/RMB10,000

m

/RMB10,000m

/RMB10,000

kWh/RMB10,000

%

Unit202020212022Indicators

Note:

[1] The environmental data in the Proya Sustainability Report 2020 were from the Huzhou Production Base (skincare factory). The 2021and 2022 reports cover the offices and the R&D centers at Proya Headquarters, the Huzhou Production Base (skincare factory), andthe makeup factory.[2] The power consumption covers the consumption of the Company's purchased power and the clean power consumption. In 2022,power consumption increased as the Company grew.[3] The total clean power consumption covers PV power consumption and purchased green power consumption.[4] In 2022, due to the impact of the external environment, the Company conducted daily work partially online, reduced its outboundtrips, and therefore consumed less gasoline for self-owned vehicles.[5] In 2022, the following saw increases due to the business growth of the Company: industrial wastewater discharge, chemical oxygendemand (COD) emissions in wastewater, biochemical oxygen demand (BOD) emissions in wastewater, and ammonia nitrogen (NH3-N)emissions in wastewater.[6] In 2022, the discharge of hazardous waste generated increased due to the business growth of the Company.[7] Total greenhouse gas emissions cover Scope 1 and Scope 2 carbon emissions. Scope 1 refers to carbon emissions of gasoline,diesel, and natural gas. Scope 2 refers to carbon emissions from the use of grid power. Carbon emissions from the use of PV powerand green power purchased are not included. Greenhouse gas emissions are calculated based on the Guidelines on EnterpriseGreenhouse Gas Emissions Accounting and Reporting - Power Generation Facilities (Revised in 2022) issued by the Ministry ofEcological Environment for the calculation method of greenhouse gas emissions. In the Guidelines, Scope 2 greenhouse gas emissionsare calculated according to the following formula: national grid power supply*national grid average emission factor. This was 0.6101tCO2/MWh in 2020 and 0.5810tCO2/MWh in 2021. In 2022, the national grid average emissions factor of 0.5703tCO2/MWh from the Noticeon the Reporting and Management of Greenhouse Gas Emissions by Enterprises in the Power Generation Industry for 2023-2025 wasused for calculations.

11,230.16

29.93

306,164.00

0.82

269,292.04

52,932.00183,856.00

0.49

13,800.00

7.51

6,528.00

17.4

10,238,400.00

27.29

12,800.00

0.03

640.00

128.00

64.00

587.68

1.57

1.30

12,161.96

26.25

295,436.00

0.64

291,954.0042,614.00208,614.90

0.45

15,000.00

7.19

6,060.00

13.08

16,368,000.00

35.33

13,500.00

0.03

675.00

135.00

67.50

602.65

1.30

1.70

15,970.07

25.01

368,936.00

0.58

52,620.0039,903.00253,488.70

0.40

13,000.00

5.13

7,200.00

11.28

16,080,000.26

25.18

3,838.99

20,219.00

0.03

1,016.00

172.00

104.40

603.68

0.95

2.32

0.0035

8,216.251,364.736,851.52

21.9

0.0037

8,426.861,360.777,066.10

18.19

0.0036

7,933.901,015.546,918.35

12.42

ESG Key Quantitative Performance

9596

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Product and Customer Responsibility

Unit202020212022IndicatorsNumber of complaints received concerning products andservices

Complaint handling rateNumber of incidents of products and services in violationof laws and regulations related to health and securityNumber of violations of laws and regulations in marketing(including advertising, promotion, and sponsorship)Number of incidents of violations of regulations andvoluntary guidelines regarding product and serviceinformation and labelingNumber of incidents of violations of regulations regardingcustomer privacy protection

Case(s)

Case(s)

Case(s)

Case(s)

Case(s)

%

Note:

[1] In 2022, the Company received more complaints from consumers due to problems with the user experience of "Proya UV Protective SunscreenSerum", and delivery delays caused by the external environment during the Double 11 shopping festival.

Supply Chain Management

Unit202020212022IndicatorsTotal number of suppliers

Number of suppliers in the Chinese MainlandNumber of suppliers in Hong Kong, Macau, Taiwan, andoversea regionsPercentage of suppliers evaluated for environmental,labor, ethics, etc.

Percentage of suppliers having passed environmental,labor, and ethics assessments

Supplier(s)Supplier(s)Supplier(s)%%

Note:

[1] The statistics of supplier data cover production materials, service suppliers and offline sales, and exclude suppliers of brandmarketing.[2] Proportion of suppliers that have been evaluated for environment, labor, and ethics = number of suppliers that have been evaluatedfor environment, labor, and ethics/total number of suppliers (end of period).[3] Proportion of suppliers that have passed environmental, labor, and ethical assessments = number of suppliers that have passedenvironmental, labor, and ethical assessments/number of suppliers that have been assessed for environmental, labor, and ethics.

Employee Data

Unit202020212022Indicators

Employment

Occupational Health and Safety

Employee Training and Development

Number of employees

Number of male employeesNumber of female employeesNumber of employees aged 30 to 50

Number of primary employees

Number of R&D employees

Number of middle-management employeesNumber of senior management employeesProportion of female employees in middle management

Proportion of female employees in senior management

Number of employees working in the Chinese mainland

Number of employees aged below 30 (including 30 yearsold)Number of employees aged above 50 (including 50 yearsold)Number of employees working in Hong Kong, Macau,Taiwan, and oversea regions

Number of penalties for violations of employment andlabor laws and regulationsWorking days lost due to work-related injuries

Employee training coverage

Proportion of male employees covered by trainingProportion of female employees covered by trainingProportion of primary employees covered by training

Number of employees who died due to work-relatedinjuriesProportion of employees who died due to work-relatedinjuries

People

People

People

People

People

People

People

People

People

People

People

People

People

Day(s)

Case(s)

%%%%

%

%%

2,120100%

100%

100%

30.41

95.05

17.88

96.30

20.82

99.11

2,8442,2021,192

49.75

28.50

55.95

52.23

1,612

2,8442,598

60.17

20.00

3,1772,4261,408

46.27

27.96

51.94

44.31

1,723

3,1772,875

62.46

17.65

2,8982,2731,070

13.29

29.76

8.75

11.18

1,792

2,898

2,647

57.56

15.38

ESG Key Quantitative Performance9798

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report

Unit202020212022Indicators

Employee Training and Development

%Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)

%

%

%

%

%

%Note:

[1] Employee data includes only full-time contracted employees and excludes employees under service dispatch and part-timeemployees.[2] Proportion of female employees in middle management = number of female employees in middle management/number of employeesin middle management (end of period).[3] Proportion of female employees in senior management = number of female employees in senior management/number of employeesin senior management (end of period).[4] In 2022, the Company increased the recruitment of R&D personnel, including the recruitment of fresh graduates, and the number ofR&D personnel increased.[5] Employee training coverage = number of employees in this category trained during the reporting period/total number of employees inthis category (end of period).[6] The average hours of training for employees = the total hours of training for employees in this category/total number of employees inthis category (end of period). Training time data do not include anti-corruption training time, which is listed separately in anti-corruptionperformance.[7] Employee turnover rate = number of employees in this category departing during the reporting period/total number of employees inthis category (end of period).

%

Anti-Corruption

Note:

[1] Data on anti-corruption training in 2020 and 2021 have not been collected.

Note:

[1] The investment in community philanthropy includes funds and materials donated by Proya to various community philanthropy andcharitable activities. In 2022, due to the impact of the external environment, some offline public charitable activities were suspended. Aswe were redirecting our investment in philanthropy, the actual amount invested was slightly reduced.[2] In 2021, offline volunteer services were suspended due to the external environment. In 2022, we worked with the community toorganize employees to provide volunteer services, so the total hours of volunteer service of employees increased.

Unit202020212022IndicatorsCase(s)

Hour(s)Hour(s)

Hour(s)RMB10,000RMB10,000

%%

Community Philanthropy

Unit202020212022Indicators

Proportion of middle-management employees coveredby trainingProportion of senior management employees covered bytraining

Number of corruption cases proposed and concludedagainst the issuer or its employees during the reportingperiodCoverage rate of anti-corruption training for all directors

Amount invested in community philanthropy

Total hours of volunteer service of employees

Amount of donations

Per capita hours of anti-corruption training for alldirectorsCoverage rate of anti-corruption training for employeesPer capita hours of anti-corruption training foremployeesAverage hours of training for employees

Average hours of training for male employeesAverage hours of training for female employeesAverage hours of training for primary employeesAverage hours of training for middle managementAverage hours of training for senior managementEmployee turnover rate

Turnover rate of male employeesTurnover rate of female employeesTurnover rate of employees aged below 30Turnover rate of employees aged between 30 to 50Turnover rate of employees aged above 50

19.31

4.00

23.77

20.60

6.03

26.79

18.22

29.29

27.35

26.61

17.50

25.11

64.71

17.40

8.53

20.15

18.05

11.51

5.76

28.83

29.16

28.73

34.16

25.01

8.70

64.91

1.86

4.17

1.23

1.23

8.97

26.09

20.32

27.67

11.78

34.15

50.00

37.39

1.50

2.50

1,501.121,500.00

57.00

370.60

370.00

143.46

143.46

285.00

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report99100

Content Index

Content Index

Report sectionsTerms and disclosures

8.6：（2）

8.8：（1）

8.8：（2）

8.8：（3）

8.8：（4）

8.8：（5）

8.8：（6）

8.8：（7）

8.8：（8）

8.9：（1）

8.9：（2）

8.9：（3）

8.6：（3）

8.7 Rights and interests of employees

8.6：（1）

Index Table of the Guidelines for the Self-regulatory Supervision of Listed Companies onthe Shanghai Stock Exchange No.1 - Standardized Operations (2022)

Report sectionsTerms and disclosures

8.9：（4）

8.9：（5）

8.9：（6）

8.9：（7）

8.9：（8）

8.9：（9）

8.10：（1）

8.10：（2）

8.10：（3）

8.10：（4）

8.10：（5）

8.10：（6）

8.11 Environmental inspection

8.12 Key pollutant discharge units

8.13：（1）

8.13：（2）

8.13：（3）

8.13：（4）

8.14：（1）

8.14：（2）

8.14：（3）

8.14：（4）

8.15 Scientific ethics

8.1 Overview

8.2 Operating principles

8.3 Social responsibility planning and working mechanism

8.4 Social contribution per share

Construction of a social responsibilitysystemDeficiencies and problems existing in thefulfillment of social responsibilities

Environmental, social, and governance systemCompliance operation

Emissions and waste managementEnvironmental responsibilityEmissions and waste managementNot involvedNot involvedNot involvedNot involvedNot involvedNot involvedNot involvedNot involvedNot involvedEnvironmental responsibilityWe are not included as a key pollutant discharge unitProduct and customer responsibilityProduct and customer responsibilityProduct and customer responsibilityProduct and customer responsibilityEmployee rights and benefitsEmployee health and safetyEmployee training and developmentEmployee rights and benefitsInnovations in research and development

Proya's sustainability governance systemEnvironmental, social, and governance systemKey quantitative performanceReport description

Employee rights and benefitsEnvironmental management systemEnvironmental responsibilityResource conservationEmissions and waste managementEmissions and waste managementEnvironmental management systemResponsible supply chainEnvironmental responsibilityEnvironmental responsibilityESG Key quantitative performanceResponding to climate change

Protection of intellectual property

Environmental responsibilityProduct and customer responsibilityEmployee responsibilitiesCommunity responsibilityWe have formulated and implemented appropriatemanagement rules and organized training sessionson the legitimate use of software, fonts, and picturesby relevant business units.Improvement measures and specific schedule

Compliance with environmental protection lawsand industrial standardsEnvironmental protection planUse of natural resourcesDisposal of pollutantsPollution prevention and control facilitiesPayment of taxes and fees related toenvironmental protectionSupply chain environmental securityOther environmental protection responsibilitiesPolicies, objectives, and results of environmentalprotectionTotal annual resource consumptionEnvironmental investment and environmentaltechnology development

Type, quantity, concentration, and destination ofpollutants dischargedConstruction and operation of environmentalprotection facilitiesWaste treatment, disposal, recycling, andcomprehensive utilization of discarded productsVoluntary agreements signed with environmentalprotection authoritiesRewards granted by environmental protectionauthoritiesOther voluntarily disclosed informationNew construction, renovation, expansion, or majorinvestmentsViolation of environmental laws and regulations andpenaltiesMajor lawsuits on environmental issues or assetsseized, frozen, detained, pledged, or mortgagedKey pollutant discharge unitsImpact of newly promulgated laws and regulationson the CompanyMajor environmental protection events

Law, regulations, and industrial standards ofproduct safetyProduction environment and processProduct quality safety guarantee mechanism andaccident emergency response planOther responsibilities related to production andproduct safetyEmployee management system and punishmentfor violationsPrevention of occupational hazards and supportingsafety measuresEmployee trainingOther responsibilities for protecting employee rightsand interests

8.5 Disclosure of social responsibility report

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report101102

Content Index

Proya Cosmetics Co., Ltd. reported the information referenced in this GRI Index Table in accordance with GRIstandards from January 1, 2022 to December 31, 2022.GRI 1: Foundation 2021

Statement

GRI 1 used

GRI Index Table of Sustainability Reporting Standards (2021)

LocationGRI standardDisclosure item2-1 Organizational detailsAbout Proya

Co-Founders' MessageCo-Founders' Message

Stakeholder communicationIdentification of substantive issuesIdentification of substantive issuesIdentification of substantive issuesCompany performance highlights

Employee rights and benefitsCommunity responsibilitySocial advocacyAnti-corruption and business ethicsAnti-corruption and business ethicsKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performance

Working together to contribute a newpattern of sustainable businessResponding to climate change

Compliance management systemCompliance management systemEnvironmental responsibilityProduct and customer responsibilitySupply chain responsibilityEmployee responsibilitiesCommunity responsibilityCorporate governanceCompliance operationReport descriptionReport descriptionReport descriptionMain business and sub-brandsWorking together to contribute a newpattern of sustainable businessProduct quality and safetySupply chain responsibilityKey quantitative performanceEmployee responsibilitiesKey quantitative performanceProya's ESG management architectureCorporate governanceProya's ESG management architectureCorporate governanceProya's ESG management architectureCorporate governanceProya's ESG management architectureStakeholder communicationESG concept and management systemESG governance systemCorporate governanceProya's sustainability governancesystemProya's ESG management architecture

2-2 Entities included in the organization's sustainabilityreporting2-3 Reporting period, frequency and contact point2-4 Restatements of information2-6 Activities, value chain and other business relationships

2-7 Employees2-9 Governance structure and composition2-12 Role of the highest governance body in overseeing impactmanagement2-13 Delegation of responsibility for impact management2-14 Role of the highest governance body in sustainabilityreporting2-16 Communication of critical concerns2-17 Collective knowledge of the highest governance body2-19 Remuneration policies2-22 Statement on sustainability strategy

2-23 Policy commitments2-24 Embedding policy commitments2-25 Processes to remediate negative impacts2-26 Mechanisms for seeking advice and raising concerns2-27 Compliance with laws and regulations

2-29 Approach to stakeholder engagement3-1 Process to determine material topics3-2 List of material topics3-3 Management of material topics201-1 Direct economic value generated and distributed

203-1 Infrastructure investments and services supported205-2 Communication and training about anti-corruptionpolicies and procedures205-3 Confirmed incidents of corruption and action taken301-1 Materials used by weight or volume

302-1 Energy consumption within the organization302-2 Energy consumption outside of the organization302-3 Energy intensity

301-2 Recycled input materials used301-3 Reclaimed products and their packaging materials

203-2 Significant indirect economic impacts

201-2 Financial implications and other risks and opportunitiesdue to climate change201-3 Defined benefit plan obligations and other retirementplansGRI 2: GeneralDisclosures (2021)

GRI 2: GeneralDisclosures (2021)

GRI 3: MaterialTopics (2021)

GRI 201: EconomicPerformance (2016)GRI 203: IndirectEconomic Impacts(2016)GRI 205: Anti-corruption (2016)GRI 301: Materials(2016)GRI 302: Energy(2016)

LocationGRI standardDisclosure item

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report103104

Content Index

LocationLocationGRI standardGRI standardDisclosure itemDisclosure item

GRI 302: Energy(2016)

GRI 303: Water andEffluents (2018)

GRI 305: Emissions(2016)

GRI 306: Waste(2020)

GRI 308: SupplierEnvironmentalAssessment (2016)GRI 401:

Employment (2016)

GRI 403:

Occupational Healthand Safety (2018)

GRI 403:

Occupational Healthand Safety (2018)

GRI 404: Trainingand Education(2016)GRI 405: Diversityand EqualOpportunity (2016)GRI 406: Non-discrimination(2016)GRI 408: ChildLabor (2016)GRI 409: Forced orCompulsory Labor(2016)GRI 413: LocalCommunities (2016)GRI 414: SupplierSocial Assessment(2016)GRI 416: CustomerHealth and Safety(2016)GRI 417: Marketingand Labeling (2016)

GRI 418: CustomerPrivacy (2016)

302-4 Reduction of energy consumption302-5 Reductions in energy requirements of products andservices303-1 Interactions with water as a shared resource303-2 Management of water discharge-related impacts303-3 Water withdrawal 1303-4 Water discharge303-5 Water consumption305-1 Direct (Scope 1) GHG emissions305-2 Energy indirect (Scope 2) GHG emissions305-3 Other indirect (Scope 3) GHG emissions305-4 GHG emissions intensity305-5 Reduction of GHG emissions305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and othersignificant air emissions306-1 Waste generation and significant waste-related impacts306-2 Management of significant waste-related impacts306-3 Waste generated306-4 Waste diverted from disposal306-5 Waste directed to disposal308-1 New suppliers that were screened using environmentalcriteria308-2 Negative environmental impacts in the supply chain andaction taken401-1 New employee hires and employee turnover401-2 Benefits provided to full-time employees that are notprovided to temporary or part-time employees401-3 Parental leave403-1 Occupational health and safety management system403-2 Hazard identification, risk assessment, and incidentinvestigation403-3 Occupational health services403-4 Worker participation, consultation, and communicationon occupational health and safety403-5 Worker training on occupational health and safety

403-6 Promotion of worker health403-7 Prevention and mitigation of occupational health andsafety impacts directly linked by business relationships403-8 Workers covered by an occupational health and safetymanagement system403-9 Work-related injuries403-10 Work-related ill health404-1 Average hours of training per year per employee404-2 Programs for upgrading employee skills and transitionassistance programs405-1 Diversity of governance bodies and employees406-1 Incidents of discrimination and corrective action taken408-1 Operations and suppliers at significant risk of incidents ofchild labor409-1 Operations and suppliers at significant risk of incidents offorced or compulsory labor413-1 Operations with local community engagement, impactassessments, and development programs414-1 New suppliers screened using social criteria414-2 Negative social impacts in the supply chain and actiontaken416-1 Assessment of the health and safety impacts of productand service categories416-2 Incidents of non-compliance concerning the health andsafety impacts of products and services417-1 Requirements for product and service information andlabeling417-2 Incidents of non-compliance concerning product andservice information and labeling417-3 Incidents of non-compliance concerning marketingcommunications418-1 Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

Resource conservationResource conservationResource conservationResource conservationKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performanceKey quantitative performance

Key quantitative performanceKey quantitative performanceKey quantitative performanceResponsible supply chainResponsible supply chainKey quantitative performanceKey quantitative performanceKey quantitative performanceOccupational health and safetyOccupational health and safetyOccupational health and safetyEmployee rights and benefitsOccupational health and safety

Occupational health and safetyOccupational health and safetyOccupational health and safetyKey quantitative performanceKey quantitative performanceHuman capital developmentKey quantitative performanceEmployee rights and benefitsEmployee rights and benefitsEmployee rights and benefits

Supply chain managementResponsible supply chainProduct quality and safetyKey quantitative performance

Key quantitative performanceKey quantitative performanceKey quantitative performance

Social advocacyPublic charity

Product quality and safetyProtection of customer service rightsand interests

Occupational health and safety

Emissions and waste managementEmissions and waste management

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report105106

Content Index

Index Table of UN Sustainable Development Goals (SDGs)

Report sectionsSDGsSecondary targets of SDGsTarget 1.4: By 2030, ensure that all men and women, especially low-income and vulnerable groups,have equal rights to economic resources, access to basic services, ownership and control over landand other forms of property, inheritance, natural resources, appropriate new technology, and financialservices, including microfinanceTarget 3.4: By 2030, reduce premature mortality from non-communicable diseases by one-third throughprevention and treatment and promote mental health and well-being

Target 4.1: By 2030, ensure that all girls and boys complete free, equitable, and quality primary andsecondary education, leading to relevant and effective learning outcomesTarget 4.7: By 2030, ensure that all learners acquire the knowledge and skills needed to promotesustainability through, among other things, education for sustainability and sustainable lifestyles, humanrights, gender equality, promotion of a culture of harmony and non-violence, global citizenship, andappreciation of cultural diversity and of the contribution of culture to sustainabilityTarget 5.1: End all forms of discrimination against all women and girls everywhere

Target 7.2: By 2030, significantly increase the proportion of renewable energy in the global energy mixTarget 7.3: By 2030, double the improvement rate of global energy efficiency

Target 6.3: By 2030, improve water quality by reducing pollution, eliminating dumping and minimizingthe release of hazardous chemicals and materials, halving the proportion of untreated wastewater, andsubstantially increasing recycling and safe reuse globallyTarget 6.4: By 2030, substantially increase water-use efficiency across all sectors and ensuresustainable withdrawal and supply of fresh water to address water scarcity and substantially reduce thenumber of people suffering from water scarcity

Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men,including for young people and people with disabilities, as well as equal pay for work of equal valueTarget 8.7: Take immediate and effective measures to eradicate forced labor; end modern slaveryand human trafficking; secure the prohibition and elimination of the worst forms of child labor, includingrecruitment and use of child soldiers; and by 2025, end child labor in all its formsTarget 8.8: Protect labor rights and promote a safe and secure working environment for all workers,including migrant workers, in particular women migrants and those in unstable employment

Target 9.4: By 2030, based on their actual capabilities, all countries should take action to upgradeinfrastructure and industries to improve their sustainability, improve the utilization efficiency of resources,and increase the use of clean and environmentally friendly technologies as well as industrial processesTarget 9.5: Strengthen scientific research and upgrade technological capacity in the industrial sector inall countries, particularly in developing countries, including by 2030, encouraging innovation, substantiallyincreasing the number of R&D personnel per 1 million people, and investing more in public and privateR&D sectorsTarget 10.2: By 2030, empower all people to help them integrate social, economic, and political life,regardless of age, gender, disability, race, ethnicity, origin, religion, economic status, or any otherdistinctionTarget 11.6: By 2030, reduce negative environmental impacts per capita in cities, including paying specialattention to air quality and urban waste management

Target 12.2: By 2030, achieve sustainable management and the efficient use of natural resourcesTarget 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling,and reuseTarget 12.6: Encourage companies, especially large and transnational companies, to adopt sustainablepractices and to integrate sustainability information into their reporting cycleTarget 12.8: By 2030, ensure that people everywhere have relevant information and awareness forsustainability and lifestyles that are in harmony with natureTarget 13.3: Improve education, awareness-raising, and human and institutional capacity on climatechange mitigation, adaptation, impact reduction, and early warning

Target 14.1: By 2025, prevent and significantly reduce marine pollution of all kinds, especially from land-based activities, including marine debris and nutrient pollution

Target 15.2: By 2020, promote the implementation of sustainable management of all types of forests,halt deforestation, restore degraded forests, and substantially increase afforestation and reforestationgloballyTarget 16.5: Substantially reduce corruption and bribery in all their forms

SDGs

Brand actions echo the call ofthe times to create beautySocial advocacy

Brand actions echo the call ofthe times to create beautySocial advocacyBrand actions echo the call ofthe times to create beautySocial advocacy

Emissions and waste

management

Resource conservationInnovations in research anddevelopmentBrand actions echo the call ofthe times to create beautySocial advocacyEmissions and wastemanagement

Green packagingEmissions and wastemanagement

Working together to contributea new pattern of sustainablebusinessResponding to climate change

Green packaging

Building a responsible supplychain

Anti-corruption and businessethics

Report description

Resource conservation

Water resource conservation

Energy managementEmployee rights and benefitsEmployee rights and benefitsBuilding a responsible supplychainEmployee rights and benefitsOccupational health and safety

Public charity

Public charity

Report sectionsSecondary targets of SDGs

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report107108

Report Description

The scope of disclosures in this Report is consistent with that of the Company's consolidated financial statements.

Completeness

Report DescriptionProya Sustainability & Environmental, Social, and Governance (ESG) Report 2022 (hereinafter referred to as "the Report") is the thirdSustainability & Environmental, Social, and Governance (ESG) Report issued by Proya Cosmetics Co., Ltd. This Report expands on theprinciples and performance of sustainability and ESG governance of Proya Cosmetics Co., Ltd. in 2022, and covers the environmental,social, and governance issues of concern for important stakeholders.This Report was prepared in accordance with the Guidelines for the Self-Regulatory Supervision of Companies Listed on the ShanghaiStock Exchange No.1 - Standardized Operation (2022) and with reference to the GRI Sustainability Reporting Standards (2021) andSustainable Development Goals (SDG) issued by the United Nations.

We identify material topics related to our operations that are of concern to stakeholders, including investors, as the focus of this Report.The reporting of material topics in this Report focuses on the characteristics of the industries in which we operate as well as thecharacteristics of the regions in which we are located. The analysis process and results of the material topics are detailed in the "MaterialTopics and Stakeholder Communication" section of this Report. Moreover, this Report focuses on reporting on ESG matters that may havea significant impact on investors and other stakeholders.

Materiality

The reported information is as accurate as possible. The measurements of quantitative information have provided the data caliber,the bases for calculations and the assumptions to ensure that the margin of error will not mislead information users. Quantitative andexplanatory information is provided in the "Sustainability Management Performance" section of this Report. The board of directorsguarantees that this Report contains no false records, misleading statements, or major omissions.Accuracy

This Report reflects objective facts and discloses indicators involving both positive and negative information in an unbiased manner. Anysubject in this Report has been searched in Shanghai Qingyue Credit Database, and no negative event that should be disclosed but hasnot yet been disclosed was found during the reporting period.Balance

This Report is published in Simplified Chinese and English. This Report contains information such as tables, diagrams and a glossary ofprofessional terms to supplement the textual content of this report and to enable stakeholders to better understand such textual content.To facilitate quicker access to information by stakeholders, this Report provides a table of contents and a benchmarking index table of ESGstandards.Clarity

This Report discloses key quantitative performance indicators and, to the maximum extent possible, historical data. This Report maintainsconsistent statistics and disclosures for the same indicator in different reporting periods. Any changes in the statistics and disclosures areclearly explained in this Report's notes to aid stakeholders in making effective analysis and assessing the trend of the Company's ESGperformance levels.Quantification and Consistency

The examples and data in this Report come from original records or financial reports reflecting the actual operations of the Company. Boththe source and the calculation process of the disclosed data are traceable and can be inspected during external attestation.VerifiabilityThis Report is an annual report and covers the period from January 1, 2022 to December 31, 2022. We make every effort to release theReport as soon as possible following the end of the reporting year to provide stakeholders with information for making decisions in areasonable timeframe.Timeliness

This Report refers to the reporting principles of GRI Sustainability Reporting Standards (2021) to ensure the quality of the informationreported and its appropriate presentation:

Basis of preparation

Reporting principles

Reporting period: This Report is an annual report and covers the period from January 1, 2022 to December 31, 2022. Some information isbeyond the scope of the Report and has been explained accordingly.Organizational scope: This Report covers Proya Cosmetics Co., Ltd. and its affiliates and includes only our cosmetic business. Thestatistical scope of some data differs from this and has been explained in the data section.The abbreviations in the Report are explained as follows:

Reporting scope

Proya promises that the content of this report does not contain any false records, misleading statements, or major omissions. Proya'sBoard of Directors bears overall responsibility for ESG management and reporting.Proya Cosmetics Co., Ltd., which is the subject of this Report, has been searched in Shanghai Qingyue Credit Database, and no negativeenvironmental information was found.

If you have any questions relating to this Report or Proya's ESG governance, please contact us at:

Address： No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang ProvinceE-mail: [e-mail].: 0571-8735 2850Website: www.proya-group.com

The data and examples in this Report come from original records or financial reports reflecting the actual operation of the Company.The financial data stated in the Report is in RMB. If financial data is inconsistent with the financial statement in our annual report, the annualreport shall prevail.Data description

Reliability guarantee

Contact us

AbbreviationDefinitionProya, the Company, we (us)Proya Cosmetics Co.,Ltd.Huzhou Branch of Proya Cosmetics Co.,Ltd.Zhejiang Beute Cosmetics Co., Ltd.Skincare factoryMakeup factory, Zhejiang Beute

Proya 2022 Sustainability &Environmental, Social, and Governance (ESG) Report109110

Appendix: Subsidiary Reporting Scope

SNWhether to be included in

this ReportName of subsidiary

Hangzhou Proya Trading Co., Ltd.Hannah Cosmetics Co., Ltd.Anya (Huzhou) Cosmetics Co., Ltd.Proya (Hainan) Cosmetics Co., Ltd.Singuladerm (Hangzhou) Cosmetics Co., Ltd.Proya (Zhejiang) Cosmetics Co., Ltd.Huzhou YNM Cosmetics Co., Ltd.Korea YNM Cosmetics Co., Ltd.Ningbo Timage Cosmetics Co., Ltd.Hangzhou Timage Cosmetics Co., Ltd.Zhejiang Beute Cosmetics Co., Ltd.O&R Co., Ltd.Hangzhou Weiluoke Cosmetics Co., Ltd.Mijing Siyu (Hangzhou) Cosmetics Co., Ltd.Hapsode (Hangzhou) Cosmetics Co., Ltd.Hapsode Co., Ltd.Danyang Hapsode Cosmetics Trading Co., Ltd.Huzhou Hapsode Trading Co., Ltd.Yueqing Laiya Trading Co., Ltd.Huzhou Youzilai Trading Co., Ltd.Ningbo Keshi Trading Co., Ltd.Ningbo Tangyu Trading Co., Ltd.Hangzhou OOMS Trading Co., Ltd.Hangzhou Poxin Trading Co., Ltd.

YesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYesYes

Appendix: Subsidiary Reporting Scope

Hong Kong Sunrise Trading Co., Ltd.Hong Kong Keshi Trading Co., Ltd.Hong Kong Xinghuo Industry Co., Ltd.Hong Kong Zhongwen Electronic Commerce Co., Ltd.Hong Kong Wanyan Electronic Commerce Co., Ltd.

YesYesYesYesYes

Zhejiang Beautiful Valley E-Commerce Co., Ltd.Huzhou Chuangdai Electronic Commerce Co., Ltd.Hangzhou Proya Commercial Management Co., Ltd.Hangzhou Tiedingxian Catering Management Co., Ltd.Hangzhou Tielexinaini Catering Management Co., Ltd.Hangzhou Xiakeba Catering Management Co., Ltd.Hangzhou Luxiaotie Fitness Co., Ltd.Hangzhou Donghaiwangchao Catering Management Co., Ltd.Proya Europe SARLShanghai Zhongwen Electronic Commerce Co., Ltd.Huzhou Niuke Technology Co., Ltd.Hangzhou Wanyan Culture Media Co., Ltd.Ningbo Proya Enterprise Consulting Management Co., Ltd.Zhejiang Qingya Culture and Art Communication Co., Ltd.Boya (Hong Kong) Investment Management Co., Ltd.Hangzhou Yizhuo Culture Media Co., Ltd.Guangzhou Qianxi Network Technology Co., Ltd.Xuzhou Laipo Information Technology Co., Ltd.

YesYesNoNoNoNoNoNoNoNoNoNoNoNoNoNoNoNo

SNWhether to be included in

this ReportName of subsidiary