In response to the concept of cost reduction and efficiency improvement, Chia Tai Tianqing, a member company of Sino Biopharm, has taken various measures to effectively conserve the use of packaging materials, including: 1. Consolidating various packaging material changes for design and sampling to reduce the frequency of version switching; 2. During the transition between old and new suppliers, continuing to use packaging materials from both suppliers on the same formulation batch to avoid scrapping materials from the old supplier; 3. Assessing the launch time for upgraded packaging materials based on inventory levels and the specific design appearance of brand-upgraded materials, and upgrading primary packaging and package inserts separately to further reduce the scrapping of inventoried materials; 4. Shortening procurement cycles and controlling the volume of packaging material purchases in advance; 5. Strengthening equipment commissioning and maintenance to reduce the scrapping of packaging materials due to equipment abnormalities.

On June 5, 2023, Chia Tai Tianqing, a member company of Sino Biopharm, held an Environment Day event with the theme "Building a Modernization of Harmony Between Humanity and Nature". The event was promoted with banners hung on the company's main roads. Leveraging the Safety Month training platform, training materials on "Environmental Protection Knowledge" were distributed, with the environmental training covering 1,695 employees.

Sino Biopharm actively promotes the application of renewable energy, vigorously expands the use of photovoltaic power generation to replace traditional energy and reduces greenhouse gas emissions. Among them, the photovoltaic power generation project of the production plant of Chia Tai Tianqing in Haizhou completed the construction of Phases I and II of photovoltaic construction and started grid-connected power generation in 2021, with a total installed capacity of 2.1 MW and a power generation capacity of 2.965 million KWh in 2022; the photovoltaic power generation project of the production plant of Chia Tai Tianqing in Shunxin officially started operation in October 2022, with a total installed capacity of 0.8 MW; the production plant of Chia Tai Tianqing Runzhong in Lingang used its 7,500-square meter carpark to build its photovoltaic carport, which was completed at the end of 2022 and can realize an annual power generation capacity of about 1.5 million KWh. *This case was implemented by Chia Tai Tianqing, a member company of Sino Biopharm.

As one of the key member companies of the Group, Chia Tai Qingjiang continued to promote green transformation and has built a scientific, environmentally-friendly, energy-saving, clean and civilized enterprise in recent years by continuously optimizing its industrial structure in accordance with the national industrial policy. In October 2022, Chia Tai Qingjiang was awarded as the one of the first batch of green benchmark enterprises in Huai'an City and "the most beautiful factory" in Qingjiangpu District of Huai'an City.

In 2022, the Group conducted an environmental compliance audit covering all of its key member companies. The audit covered aspects such as the collection and disposal of the three wastes (solid, liquid, and gaseous) and the storage management of hazardous chemicals. Based on the audit results, the relevant enterprises have completed corresponding rectifications of system management processes and updates of equipment and facilities. The renovation projects of the organized emission of waste gas from manufacturers of Active Pharmaceutical Ingredient (API) production enterprises are either in progress or have been completed.

As required by Group policy, a key member company of Sino Biopharm regularly carries out ISO 5001 energy management system certification. They are subject to a re-certification audit by the China Quality Certification Centre (CQC) every 3 years, and receives CQC supervision and audit every year during the validity period, to ensure the continuous compliance and effectiveness of the energy management system.

As required by Group policy, a member company of Sino Biopharm regularly carries out ISO14001 environmental management system certification. They are subject to a re-certification audit by the CQC every 3 years, and receives CQC supervision and audit every year during the validity period, to ensure the continuous compliance and effectiveness of the environmental management system.

The Group is committed to reducing hazardous waste generated during production and operations. In 2021, all member companies continued to improve their hazardous-waste management systems and adopted a variety of measures to minimize such waste, including: - Reducing cleaning effluents by raising equipment utilization and cutting batch numbers - Decreasing sludge volumes by introducing advanced sludge-drying equipment - Achieving source-level reduction of hazardous waste through process optimization and fine-grained management of raw and auxiliary materials For example, during the production of rivaroxaban, member company Nanjing Chia Tai Tianqing: - Replaced highly toxic and volatile reagents with low-toxicity alternatives - Optimised reaction-temperature parameters to cut solvent evaporation - Substituted organic bases with inorganic bases to reduce organic effluent generation - Refined the quantities of chemical reagents and catalysts to guarantee quality while lowering reagent consumption

Three products from Chia Tai Tianqing, a member company of Sino Biopharm, are intended to be selected in the ninth batch of national centralized drug procurement: Fulvestrant Injection (Qingkeyi®), Caspofungin Acetate for Injection (Tianming®), and Lenalidomide Capsules (Anxian®). Since the implementation of the national centralized procurement policy, Chia Tai Tianqing has won bids for a total of 29 products, playing a positive role in reducing the financial burden on patients and improving the medical accessibility. The products that won bids in this batch cover the fields of tumor and infection. Chia Tai Tianqing continues to implement full-cycle quality management for its drugs to ensure that price reductions do not compromise quality. At the same time, it is improving production efficiency to guarantee the market supply of the bid-winning drugs, meet patient needs, and reduce their burden.

Liver disease is a key therapeutic area for Sino Biopharm. Leveraging its advantages in talents and technologies in treatment of this disease, the Group has been organizing and coordinating experts from several hospitals in China well-known for treatment of liver disease to provide academic exchange platforms and training opportunities for scholars and doctors from medical schools and medical institutions in Uzbekistan since 2018. Technical expertise and experience in a series of clinical liver disease diagnosis and treatment—including advances in the diagnosis and treatment of chronic hepatitis B in China, non-viral liver diseases, drug-induced liver injury, and difficult cases in clinical practice—were introduced and shared through offline seminars and online training. Relevant medical schools and institutions in Uzbekistan have expressed high recognition and appreciation for the Group's support in enhancing their level of liver disease diagnosis and treatment.

Chia Tai Tianqing: The business scope has covered Southeast Asia, Latin America, the Middle East, Russia and other markets. Qingkeyi® (Fulvestrant Injection) has been approved in Indonesia, Pakistan, and Saudi Arabia, achieving its first market launch. Market launch preparations are underway in markets such as Mexico, Malaysia, and Israel, while registration is proceeding in an orderly manner in Russia and other markets in Southeast Asia and the Middle East. Chia Tai Fenghai: Compound Amino Acid Injection (18AA) is exported to the Uzbekistan market. Chia Tai Tongyong: Seven products, including Miconazole and Clobetasol Cream, have entered the Ethiopian and Myanmar markets.

Sino Biopharm collaborates with charitable foundations to donate drugs to patients in need, thereby reducing their burden and contributing to social welfare. In 2021, the Group's member company Nanjing Chia Tai Tianqing collaborated with the Shanghai Lianxiang Public Welfare Foundation, the Beijing Kangmeng Charity Foundation, and the Hainan International Medical Innovation Joint Foundation. Through charitable aid programs such as "Gan Xin Yu Gong", "Xing Fu Yi Sheng" medical fundraising, and "An You Xin Sheng" patient assistance, they donated to 5,848 patients, with the value of the donated drugs totaling approximately RMB 32.3 million. In the first half of 2022, the number of patients receiving donations reached 11,801, with the value of the donated drugs totaling approximately RMB 43 million.

From January to June 2022, a total of 12 products from 4 member companies of Sino Biopharm participated in the seventh batch of centralized drug procurement, and 9 products were ultimately selected. In 2022, 12 products of the Group were included in the National Reimbursement Drug List (NRDL).

The Edaravone and Sodium Chloride Injection, developed by Jiangsu Chia Tai Fenghai, can effectively slow the progression of ALS and is expected to benefit 200,000 ALS patients in China. In 2021, Edaravone and Sodium Chloride Injection was included in the NRDL. Compared to 2020, the price of the drug was reduced by over 40%, further alleviating the financial burden on patients and benefiting more people.

Up to now, Sino Biopharm has entered the market of developing countries with six drug varieties, providing local patients with competitive medication options. Among them, Chia Tai Tianqing's Matrine Capsules/Injection and Diammonium Glycyrrhizinate Enteric-coated Capsules were included in Uzbekistan's medical insurance catalog in 2021, further helping to reduce the medication burden for local patients. ino Biopharm has expanded its industrial layout in the vaccine field through shareholding and joint venture to support the fight against the COVID-19. The Group holds shares in Sinovac Life Sciences Co., Ltd., which produces the inactivated novel coronavirus vaccine, CoronaVac®. In 2021, over 2.8 billion doses were supplied globally. The product has received emergency use authorization or conditional marketing approval in more than 60 countries, regions, and international organizations, including the UAE, Bahrain, Morocco, Pakistan, Argentina, and Egypt, and has been included in the World Health Organization's Emergency Use Listing. Meanwhile, Sinovac Life Sciences Co., Ltd. has established vaccine production collaborations with numerous partners in Southeast Asia, Latin America, and Africa, continuously making positive contributions to improving the accessibility and affordability of COVID-19 vaccines and aiding the global prevention and control of COVID-19.

The drug-device assembly for Tiotropium Bromide Soft Mist Inhaler, a key product of the Belgium-based member company SOFTHALE NV (Softhale), is carried out by Univac in Malaysia. To enhance the company's production capacity, Sino Biopharm invested RMB 5 million to build a new drug-device assembly line and helped it obtain certification under the US 21 CFR Part 820 and EU BS EN 13485:2016 standards, enabling the final product to be sold in European and American markets.

In response to the global COVID-19 crisis, Sinovac Life Sciences Co., Ltd., a company with which Sino Biopharm collaborates through an equity-associated model, is deploying vaccine R&D, production, and sales in developing countries and markets worldwide. It also helps train local medical personnel, enhance vaccination capabilities, and support local pandemic responses. In Asia, it has reached joint production agreements with pharmaceutical companies in Malaysia and Indonesia to ensure local vaccine production. In Africa, it exports vaccine raw materials to Egypt to support local COVID-19 vaccine production, making Egypt the first country in Africa with vaccine manufacturing capabilities. In Latin America, it collaborates with the Butantan Institute in Brazil on joint vaccine R&D. In Chile, it is investing in the construction of a vaccine R&D center and a vaccine production plant to help developing countries in Latin America build a robust vaccine supply chain.

The production sites of the Group exercised mock recalls in November 2022 in response to the requirements of the newly revised "Drug Recall Management Measures" to evaluate the effectiveness of the recall system, which was used to verify the appropriateness of the recall procedures and ensured that the product recall management continued to meet the relevant regulatory requirements. The mock recall work focused on recall batches, recall quantities and recall time limits, and modified the original drug recall process by adding recall information release to the public and reporting to the drug regulatory authorities to meet the regulatory requirements. The scope of the evaluation of the effectiveness of this mock recall included the competency of the personnel involved in the mock recall, the applicability and usability of the drug recall process and other aspects. This mock recall was evaluated to be successful and the recall process met the management requirements.

In order to continuously improve the group's product testing capacity and ensure product quality, all the sites involved in production and research and development have set up product testing laboratories to test the quality of all the products within the sites. In 2022, Sino Biopharm carried out testing capacity building project, further upgraded the product testing laboratories of all production and research sites and strengthen the internal product testing capabilities of all member companies of the Group.

From February to June 2022, the Audit Department of Sino Biopharmaceutical carried out the 2021 annual audit of member companies, and conducted key compliance audits on product quality, responsible marketing, and safety risk control. The audit content includes product technical specifications, production process control, equipment and facilities maintenance, safe production system and nonconforming product treatment, product publicity and promotion compliance, etc. According to the audit results, relevant enterprises have completed the corresponding rectification work.

Sino Biopharm requires member companies to actively carry out product quality certification, key member company Chia Tai Tianqing has obtained the ISO9001 quality management system certification, receives China Quality Certification Center (CQC) re-certification audit every 3 years, and receives CQC supervision and audit every year during the validity period, to ensure the continuous compliance and effectiveness of the quality management system.

In view of the large number of marketing personnel and limited training resources, Chia Tai Tianqing selects middle-level managers with excellent compliance awareness as compliance ambassadors of the region or department to organize small compliance learning sessions within their business scope. The communication channels between compliance and business are broadened, the compliance culture is spread, the compliance concept is deepened by the compliance ambassador training. As a result, the value of correct behavior is formed among employees.

A packaging material company supplies product cartons to Chia Tai Tianqing, a member company of Sino Biopharm, which is the Tier 1 supplier, we conduct on-site audit on the company every 5 years. In April 2022, the on-site audit team composed of the Quality Assurance Department and the Procurement Execution Department of Chia Tai Tianqing conducted an on-site review of the supplier and reviewed the relevant documents and records of the supplier. The audit team communicates with the supplier about the problems found during the on-site audit, and asks the supplier to formulate corrective actions and time limit. After audit, the company's production and quality management meets the production requirements of Chia Tai Tianqing, the company is allowed to continue as a qualified carton supplier of Chia Tai Tianqing.

In October 2021, Sino biopharm member company Chia Tai Tianqing carried out the eighth Quality Month activities. With the theme of "Quality strengthens company -- be error-free and march toward zero defects", this quality month activity covers a number of activities such as training, essay contest and competition. Through the digital learning platform of Tianqing University, all staff carried out quality related video course training. In this quality month activity, 207 articles were submitted for quality contest, 118 articles were submitted for lecturer selection course, and 1514 people participated in the online competition. The quality month activity is an important channel to improve the quality awareness and level of all staff. The results of quality month activity can also be applied to daily work to further improve quality and efficiency.

Sino Biopharm continuously expands its cooperation with suppliers on sustainable development. Group member company Chia Tai Tianqing collaborates with suppliers to reduce energy and resource consumption, consolidating group-wide centralized bidding and price negotiations to lower costs. For A4 printing paper, the Group consolidated an e-bidding project, successfully achieving a 30% cost reduction through integrated procurement. By changing product packaging sizes, procurement costs were reduced by 55-71%. Group member company Nanjing CTTQ cooperates with suppliers on recycling and reuse. For frequently purchased reagents and consumables, deliveries were centralized and consolidated, reducing transportation and packaging costs by approximately 55%.

Sino Biopharm continues to increase investment, sets up a professional biological sample analysis team, and builds industry-leading quality testing hardware level. With four-year construction, Chia Tai Tianqing Research Institute, successfully obtained the laboratory accreditation of China National Accreditation for Conformity Assessment (CNAS) in July, 2021, which was in accordance with ISO/IEC 17025:2017 Testing and Calibration Laboratory Capacity of General Requirements CNAS national certification standards.

Sino Biopharm continuously carries out occupational health and safety management. In 2023, Group member company Chia Tai Tianqing organized a promotional week for the "Law on Prevention and Control of Occupational Diseases", conducting specialized training on occupational hazard prevention and creating health communication materials, with the training covering 1,234 people. It also organized a "Safety Production Month", conducting 4 safety warning education sessions for 1,590 participants, training on "520" risk control for outstanding teams for 116 participants, and inviting Lianyungang Second People's Hospital to provide first aid training for 97 participants. Additionally, activities such as the "Ankang Cup" safety knowledge competition and a "Everyone Talks About Safety" speech contest were held.

With the consent of the candidates, we conduct strict audits of candidate information by means of third-party background checks and other forms to avoid potential risks of children recruitment in advance. For the possibility of mistakenly recruiting children, we have developed a sound emergency response mechanism, including but not limited to contacting their families and regulatory agencies in their domiciles as soon as practicable to assist in proper placement and other measures. In 2022, the labour contract signing rate of the Group and its member companies was 100%. During the reporting period, there were no incidents of child labour and any form of forced labour, discrimination or harassment.

Based on the actual needs of positions, we actively create jobs for people with disabilities and strive to provide equal employment opportunities for more people with disabilities. In 2022, the Group and its member companies employed 42 people with disabilities.

Sino Biopharm attaches great importance to the recognition and evaluation of its employees. In 2022, the Group launched the employee satisfaction survey, aiming to comprehensively assess the employment situation of the company and the impact of various measures on employees by understanding the evaluation of employees, so as to improve the improvement measures and enhance employees' sense of identity and belonging to the company. According to the survey, employees' satisfaction with the company was 90.3%.

From June 14 to 17, 2022, the Group launched a special survey of "corporate culture" for all employees to deeply understand all employees' cognition of the group culture and their expectations for future development. Based on the analysis, employees are highly agreed with the cultural identity, cultural coverage of business scenes, and the matching degree between culture and strategy. Meanwhile, they also hope to have a further understanding of the Group's culture through internal regulations, publicity, training, various cultural activities and other ways. The survey points out the direction for the subsequent cultural construction. The Group will focus on the accurate coverage of cultural promotion, the refinement and release of cultural concepts and codes of conduct, and the cultural assessment of the management and key teams, so as to continuously improve employees' awareness and satisfaction of company culture.

Sino Biopharm continues to expand in depth, stimulating vitality and innovation in human development. Group member company Chia Tai Fenghai launched the construction of a "Four Major Engineering Capabilities" curriculum system project. Through establishing a grand lecture hall, a series of internal training programs to enhance organizational effectiveness, implementing individual IDP projects, the "Sunshine Engineer" mentorship program, and an integration plan, it has calibrated the alignment between the four cycles of talent growth and job qualification standards. In addition, Chia Tai Fenghai continues to promote the annual personal growth plan for grassroots supervisors. In 2022, it launched the "Rain and Fog Project" personal growth plan activity for this group, which serves as a basis for promotion opportunities and a development platform, fostering a good learning atmosphere internally.

Chia Tai Tianqing, a member company of Sino Biopharm, has launched the Q-Shine High-Potential Talent Program. The program targets a large group of individuals who have made significant contributions to the organization's performance. Through this program, talent is identified and discovered, positioned and graded, and high-potential individuals receive accelerated development. In the first half of 2023, the Q-Shine program generated a high-potential talent pool of 120 people, of whom 66 were included in the first phase of the Sino Biopharm Plan and had high-potential talent profiles created. Subsequently, the Sino Biopharm Plan will adopt a club-style operational model, closely tracking and observing the performance of participants in various development sub-projects.

The Career Coaching Program of Tsinghua University (hereinafter referred to as the "COACH Program") is a career guidance model for university students pioneered by the Career Development Center of Tsinghua University in 2006, aiming to extensively absorb social resources, promote the transformation of the advantages of various entities and the convergence of supply and demand, and build a brand new ecological system for the career development education of university students. Over the past 16 years, the COACH Program has put up a bridge for communication between schools and employers, professional and cutting-edge industries as well as students and workers, enabling students to deeply experience the industry frontiers, scientifically plan their career development and significantly enhance their workplace competency. In May 2022, Sino Biopharm was invited to participate in the year's program, with Mr. Lou Wei, a vice president of the Human Resources Department of the Group, serving as the chief coach of the pharmaceutical category. Through course sharing, company visits, internships and one-on-one exchanges, the students got familiar with the operation characteristics of pharmaceutical companies in advance so that they can plan their career development ahead.

Sino Biopharm has been cooperating with key universities and colleges in China on industry-academia-research for many years, signing agreements on professional master cultivation and co-establishment of internship base for students of medical undergraduate programs and tertiary institutions, providing internship placements, providing customized internship platforms for students before graduation, and creating model internship bases for university students. Beijing Tide, a key member company of the Group, has signed internship agreements with four institutions including Beijing Health Vocational College, Tianshi College, Henan Technician College of Medicine and Health and Hebei Chemical & Pharmaceutical College, and has launched internship programs. Since the launch of the program, a total of 36 interns have been enrolled. Company offered jobs to the excellent interns upon completion of the internship. In 2022, 13 interns from the above colleges were hired, with a retention rate of 76%, and a number of students have become the key personnel of their respective departments. In order to improve the retention rate, Beijing Tide provided interns with good remuneration and benefits, meal allowance, accommodation, etc., and invested a total of more than RMB 1.2 million throughout the year.

Sino Biopharm cooperated with China Pharmaceutical University to conduct the "core competency training camps for university students". The 150 participants of the camps were selected from students with financial difficulties, ethnic minorities and employment difficulties, and the instructors were members of the career planning expert pool of the institutions and senior recruiters from the Company's Human Resources Center. The modules of the camps cover self-management, job search, productivity tools, communication, career exploration and innovation, etc. The offline training covers industry dynamics, workplace communication, CV preparation, workplace etiquette, workplace adaptation, etc. Alumni sharing, company visits and attribute development sessions are also arranged, which are extensive and diversified, close to the needs of the workplace and provide a boost to the employment of university students in the post-pandemic era. We cooperate with Peking University School of Pharmaceutical Sciences, China Pharmaceutical University, Hebei Medical University, Shenyang Pharmaceutical University and other tertiary institutions to provide joint cultivation programs for master students. In the course of implementation, we built the structure of knowledge, ability and attribute for graduate students according to the law of growth of top talents and the needs of the society, and cultivated the academic and comprehensive practical ability of students. The students achieved simultaneous improvement of scientific research and practical ability by training in two different systems of school and enterprise.

The post-doctoral research work station of member company Beijing Tide Pharmaceutical was approved and established in November 2012. Relying on the R&D center, the station is committed to the research of small molecule new drugs, nerve pain, innovative cancer drugs, etc. 10 postdoctoral students have been trained up to now.

The Group has formulated the Management System of Employee Promotion applicable to the Group and its member companies. The system stipulates the post and grade qualification requirements for promotion and the corresponding declaration process for all employees in sales and non-sales positions. In this way, the talent structure of the Group is well constructed by perfecting the promotion system, ensuring the fair career development, and encouraging outstanding employees to develop quickly. Taking the promotion of management talent of Chia Tai Tianqing as an example, a total of 126 sales management members and 142 non-sales management members had been promoted by the end of 2021, achieved the construction of reasonable echelon configuration of managers at all levels.

Member company Nanjing Chia Tai Tianqing organized KA (key account) communication skills training for drugstores. Centering on the core marketing scenario and core products of drugstores, the training is aimed at the store managers and clerks, making a closed-loop systematic learning manual and teaching video with professional promotion as the core of "pre-visit preparation, pharmacy visit and post-visit follow-up", so as to form the standardization of the basic business behavior of visiting drugstores for frontline KA staff. Centered on the company's core products, lecturer manuscripts and learning manuals centering on the three stages of pre-visit preparation, pharmacy visit and post-visit follow-up are formed for front-line use.

Member company Chia Tai Tianqing has launched the "Star of Leadership · Star Youth" project covering all employees of appropriate age. Based on the five core leadership competencies of strategy, culture, innovation, collaboration, and coaching, the program refines behavioral standards and conducts targeted capability enhancement training and learning. Through various forms of online and offline intensive training activities, the staff can not only enhance the business ability, but also improve the leadership of planning, coordination and so on, so as to lay a solid foundation for their comprehensive and integrated development.

The member company Beijing Tide Pharmaceutical actively collaborates with universities on industry-academia-research training programs for graduates. It has launched special training programs with four institutions, including Peking University Health Science Center, Shenyang Pharmaceutical University, the Institute of Materia Medica at Peking Union Medical College, and the College of Chemical Engineering at Beijing Institute of Petrochemical Technology. Several students participating in these collaborative programs have become technical backbones after they joined the company.

Employee training at Chia Tai Tianqing is mainly divided into three forms: internal departmental exchanges and learning, internal training, and external training. Among these, external training is divided into long-term training focused on academic education and short-term training for obtaining certificates, qualifications, skills training, and attending forums and conferences. Upon approval, related expenses can be reimbursed according to the regulations. In 2020, in order to support the Technical Department manager to improve his work ability, Chia Tai Tianqing supported him to study for the PhD in China Pharmaceutical University. In 2018, in order to help the deputy director of Production and Supply Management Department to improve his work ability, Chia Tai Tianqing supported him to study for the MBA of Nanjing University of Aeronautics and Astronautics, and he obtained the graduation certificate and degree certificate in April 2021. For the above personnel, the company reimbursed the relevant expenses according to the regulations.

Sino Biopharm strictly implements the employee diversity policy. The Group and its member companies have listed the diversity policy as a fixed part of the employee orientation, so as to ensure that every employee clearly knows the firm position of the Group on the diversity policy from the beginning of entry. In the process of formulating the recruitment plan and carrying out the recruitment work, the Human Resources Department makes it clear that the balance of gender ratio shall be taken into account in the recruitment of employees, and no restrictions shall be set on the country, ethnicity, place of origin, age, physical characteristics, interests, hobbies and religious beliefs, so as to eliminate the phenomenon of employee discrimination.

In order to further strengthen the construction of the Group's integrity culture, enhance employees' awareness of ""red lines"" and ""bottom lines"", reinforce professional ethics, and create an atmosphere of integrity in business, in June 2024, the Group updated and released the ""Furnace Rules (2024 Revision)"", and organized training for all employees of the Group and member companies. In addition, Sino Biopharm created a ""Mr. Lian"" subscription channel in the office system to regularly publicize the Group's integrity system, norms, policies and requirements to all employees, covering: interpretation of national laws and regulations and internal integrity related systems and norms; Internal fraud notification and external typical case sharing and interpretation; Complaint reporting channels, etc.

To cooperate with the international development strategy, deepen the strategic cooperation relationship of the supply chain, and play the role of core enterprises in promoting ESG management, Sino Biopharm (""the Group"") has launched the Responsible Supply Chain Project (""the Project"") since 2022, carried out and continued to deepen the construction of responsible supply chain system. In 2022, Sino Biopharm has completed the main work of phase I of the Project, formulated and published the Sino Biopharmaceutical Limited Supplier Code of Conduct and other documents, completed the ESG risk classification of suppliers, and conducted the ESG concept and requirements dissemination among all Tier 1 suppliers and key Tier 2 suppliers. In 2023, Sino Biopharm further deepened the implementation of the Project in member companies. During the year, the Group's member companies completed the construction of the supply chain ESG management system, established the Supplier ESG Management Working Group (""the Working Group""), further improved and optimized the supplier ESG management system documents, and organized key suppliers to sign the Code of Conduct. As of the end of 2023, the transmission rate of the Code of Conduct of key suppliers reached 100%, and the acceptance rate of the overall key suppliers was more than 90%. In parallel with system construction, Sino Biopharm focused on the capacity building of the Working Group in 2023 and organized a special training on responsible supply chain on December 27. This training was for the Working Group of key member companies of the Group. The training content was mainly divided into two modules: The first module was basic information on responsible supply chain, focusing on concept analysis, value analysis, and industry practice, to help the Working Group understand new trends in international and industry supply chain ESG management and deepen their understanding of the Group's sustainable supply chain development concept. The second module was on supply chain ESG audit, which mainly focuses on the specific requirements of the Code of Conduct and the key points of ESG audit, aiming to help the Working Group initially establish the audit capacity and lay the foundation for the substantive implementation of the subsequent supplier ESG management work. After the training, the working group members actively discussed their takeaways, past experiences, and further expectations for the construction of the Group's responsible supply chain system. In the future, Sino Biopharm will combine the development strategy, give full play to the potential energy of the enterprise, and advocate and promote the sustainable development of the industrial chain.

Sino Biopharm continuously conducts anti-corruption training and carries out various integrity promotions through the "Lianjie Tianqing" WeChat official account. This includes integrity reminders during major holidays, inviting a wide range of suppliers to follow the account, publishing "Exposure of Classic Integrity Cases" to promote integrity and honest cooperation, releasing interpretations of the "Furnace Rules" series of regulations, and updating complaint and reporting channels. In the first half of 2023, there was 100% coverage of the "Furnace Rules" video promotion for new employees, and 1 offline integrity promotion session was held, covering all personnel in the centralized procurement line.

On August 16, 2022, the Risk and Compliance Committee and the Legal Department of the Group jointly invited a third-party experienced lawyer to host an anti-monopoly training for all employees.

By comprehensively strengthening anti-corruption efforts, Sino Biopharm has developed a corporate culture of "being honest and healthy development" and achieved considerable results in anti-corruption and anti-fraud. In order to properly deal with the employees' initiative to hand in and confiscate the illegal funds, the Group began to set up an "anti-corruption account" in 2021, crediting a total of more than RMB 4 million, including RMB 1.785 million in 2022. In respect of funds in the account, 30% is used for whistleblower rewards and 70% is used for serious illness assistance for employees and their families.

Under the leadership of the Risk Audit Department of Sino Biopharm, the audit plan of the Group is formulated annually, and the Audit and Inspection Department of member companies coordinate with the Group in carrying out multiple rounds of audit work. The 2021 audit covered all key member companies. For issues identified during the audit process, the Group conducted in-depth investigations and took action in accordance with regulations.

Since 2021, Sino Biopharm has carried out 11 offline integrity training sessions, covering several business lines with about 1,720 participants. In September 2021, the integrity system compilation "Furnace Rules" was released, and the video course was released through the online learning system, forcing all employees to learn and pass the exam; all new employees are required to complete and pass a course of the "Furnace Rules". In terms of the construction of integrity culture, the company produced an animated promotional video on integrity titled "Choice" in January 2022. In March of the same year, it launched the "Lianjie Tianqing" WeChat official account, which is used monthly to promote integrity culture through interpretations of relevant regulations, laws, and case studies.

Chia Tai Tianqing, a member company of Sino Biopharm, actively practices laboratory animal welfare protection. In terms of management mechanisms, it has established a Laboratory Animal Ethics Committee to supervise, inspect, and provide technical guidance on animal ethics work, ensuring that the use of laboratory animals complies with ethical requirements and that all animal experiments undergo ethical review. An Institutional Animal Care and Use Committee has been established to supervise, inspect, and provide technical guidance on laboratory animal management, promoting the standardization and normalization of laboratory animals and improving the level of laboratory animal management and animal experiment techniques. In terms of system documents, Chia Tai Tianqing has formulated a series of management systems and operational guidelines, such as the "Plan for the Care and Behavior of Laboratory Animals", "Management of Animal Drinking Water", "Management of Animal Feed", and "Principles and Use of Analgesic and Pain Relief Methods", based on domestic and international management standards, including the "Terrestrial Animal Health Code" from the World Organisation for Animal Health, the "Regulations on the Administration of Laboratory Animals" by the State Council, the "Measures for the Quality Management of Laboratory Animals" by the State Science and Technology Commission, and the "Guiding Opinions on the Humane Treatment of Laboratory Animals" by the Ministry of Science and Technology, to provide standardized guidance for animal ethics work. In terms of ethics education, Chia Tai Tianqing actively participates in professional training organized by laboratory animal associations, standardizes regulations for animal experiments, ensures that animal experiment designs are reviewed by the animal ethics committee, protects the basic rights and welfare of laboratory animals, fosters a work atmosphere that values animal ethics, and raises employees' awareness of protecting animal rights and welfare.