圣达初心笃行致远

1圣达初心笃行致远

22025 Environmental Social and Corporate Governance Report

About this Report

This report is the first copy of "Report of Environmental Social and Corporate Governance"

issued by Zhejiang Shengda Bio-Pharm Co. Ltd. ("Shengda Bio-Pharm" "Shengda" Compilation Principles

"Company" or "the Company"). Subsequent reports will be published regularly on annual This report is developed mainly based upon the No. 14 Self-Regulatory Guidelines

basis. The Report of Environmental Social and Corporate Governance in 2025 ("this for Listed Companies in Shanghai Stock Exchange- Sustainability Reports (Trial) and

Report") will elaborate in all respects the corporate policy and concept on sustainability as No. 4 Self-Regulatory Guidelines for Listed Companies in Shanghai Stock Exchange-

well as its performance in environmental social and corporate governance ("ESG") for the Sustainability Report Development with appropriate reference to international

year 2025. standards such as the IFRS Sustainability Disclosure Standards of the International

Sustainability Board's (ISSB) and the GRI-Standards of the Global Sustainability

Standards Board's (GSSB). It contains the company's commitment and actions to the

Organizational Boundary United Nations Sustainability Goals (UN SDGs) and shows its efforts made under the

ten principles of the United Nations Global Compact.This report covers Shengda and its subsidiaries with certain sections involving the

controlling shareholders of the company specifically including: Data Source

Zhejiang Shengda Group Co. Ltd ("Shengda Group" the controlling shareholder of the The key financial data in this report is sourced from the audited Annual Report of

company) Zhejiang Shengda Bio-Pharm in 2025 while other data is sourced from the corporate

internal documents and audit statements etc. Unless as noted otherwise the

Anhui Shengda Bio-Pharm Co. Ltd. ("Anhui Shengda" a subsidiary of the company) currencies contained herein are in CNY. Appropriate authority and license have been

Tongliao Shengda Biological Engineering Co. Ltd. ("Tongliao Shengda" a subsidiary of duly granted for use of the pictures in this report.the company)

Zhejiang Silver-Elephant Bio-engineering Co. Ltd. ("Silver-Elephant" a subsidiary of the Language

company)

This report is developed and publicized in simplified Chinese with an English version

Zhejiang Shengda Bio Research Institute Co. Ltd. ("Research Institute" a subsidiary of thereof made available. In the event of any discrepancy between the different versions

the company) the version in Chinese shall take precedence.Zhejiang Yitao Food Technology Co. Ltd. ("Yitao Food" a sub-subsidiary of the company)

Release Form and Accessibility

Time Framework The report is publicized in electronic format which is accessible via the company

website (http://www.sd-pharm.com/).Please feel free to contact us via the way

The reporting period primarily covers year 2025 (a period from January 1 2025 to below if you have any advice on the report:

December 31 2025). To ensure the continuity of information and data reference is

made to historical data in some sections. E-mail：zqb@sd-pharm.com

01圣达初心笃行致远

Chairman's Speech Be People-oriented: Create Platforms for Sharing Achievements

In 2025 Shengda Bio-Pharm took talent as the most powerful engine of development. With the

improvement of a dual-channel promotion system and the performance of the employee shareholding

plan the company has enabled every dedicated individual to become a beneficiary of the company's

Dear stakeholders: growth. It showed deep concern and cared its employees by organizing various recreational and sports

activities and stressing on their physical and mental health management. The company focused not only

China is now in an important transitional period for its economic and social development. With on the output of its employees but also on the quality and dignity of their life.the furthering of the outlined "Healthy China 2030" plan and "Dual Carbon" strategic goals the

biopharmaceutical industry comes to a historical intersection for green development and industrial Social Responsibility: Pass on Goodwill to Promote Social Progress

upgrading. This is not only a historical mission bestowed upon us by the era but also the strategic

In 2025 Shengda Bio-Pharm continued as usual its efforts to integrate corporate development into social

opportunity we must seize for our development. As a pioneer in the fields of vitamins and bio-preservatives

progress. With operation of the Group's "An Yang Yuan" we explored a practical way for high-quality elderly

Shengda Bio-Pharm is committed to the vision of being a "Guardian of Health" aiming to provide safe

care services. Through execution of agreement for joint construction it injected capital and industrial

and high-quality health products for its global consumers as driven via technical innovation and green

resources into the rural areas to improve the growth of collective economy. It also set an education incentive

development. To this end we are setting up systematically an ESG governance framework and "HEALTH"

fund to plant the "Shengda Hope" and drive further development of education institutions. The company

strategic framework which are normalized effective and complying with the cut-edging industry standard.is writing a great Shengda chapter in advancing common prosperity through its moral practice and

We have publicized officially the company's first ESG report. It is not only a milestone towards sustainability

contribution to the society.but also our serious commitment we made with respect to the thorough review and continuous

improvement of the company's non-financial performance.Compliance Governance: Law-abiding Operation to Secure Steady

Green operation: Technical innovation for High-level Safety Development

In 2025 Shengda Bio-Pharm tackled the pressing challenges in energy consumption by using new quality In 2025 Shengda Bio-Pharm continued to shift its compliance awareness to a core management instinct. By

productive forces in such fields as water resource recycling in the folic acid (Vitamin B9) workshop steam applying a comprehensive due diligence mechanism it fully identified and assessed compliance exposed

energy efficiency improvement in the nisin production line and synergy of photovoltaic and waste heat risks so as to safeguard the risks at the source. It maintained a "zero-tolerance" policy towards commercial

recovery systems. The company is becoming gradually a green and innovative producer. In the meantime bribery and corruption to foster a clean and transparent business environment through well-established

it has formed a rigorous safety protection network through a dual prevention mechanism for risk control supervision mechanisms and strict accountability systems. The company is positive in promoting the

and potential hazard governance to achieve zero major environmental and safety accidents throughout the creation of a fair and transparent market competition framework respecting intellectual property rights

year. It maintained a lifeline of green development to build a safety barrier for its employees communities and opposing unfair competition. It encouraged its partners to jointly enhance the compliance standards

and the society. working together to build a healthy and orderly industrial ecosystem.Quality Innovation: Strive for Excellence to Ensure Enduring Success Looking back on our journey we have taken solid and firm steps; looking ahead we are full of confidence.In 2025 Shengda Bio-Pharm continued to consolidate its technical strength in the industry. Powered by Standing at a new historical starting point Shengda Bio-Pharm will deepen its ESG practices with a higher

a highly skilled R&D team led by doctoral and master's degree holders alongside a high-throughput R&D stance broader vision and more concrete measures to propel the company's high-quality development.platform it made sustained breakthroughs in key technological areas such as bio-fermentation chemical It will integrate deeply the ESG concept into the "15th Five-Year Plan" making sustainability a core pillar of

synthesis and process development driving Bio-pharm toward greater efficiency and sustainability. its corporate strategy. The company will systematically advance the comprehensive implementation of the

In response to the market's growing demand for healthy products the company has been working HEALTH (Health Environment Innovation Humanity Supply Chain Business Ethics) strategy to ensure ESG

continuously to tackle the industry-wide challenge of reconciling "natural health" with "long-term takes root and flourish in all of its business operations. Let's join our hands and support one another more

preservation." With a deep sense of responsibility it refined the product quality and through a full life-cycle resolutely pragmatically and innovatively to collectively write a new chapter in Shengda Bio-Pharm's high-

quality management system established"Shengda Manufacturing" as a hallmark for QA. quality development and create jointly a greener healthier and brighter future!

022025 Environmental Social and Corporate Governance Report

About Shengda Bio-Pharm

Company Profile

Shengda Bio-Pharm (Stock Code: 603079) is primarily engaged in the R&D production and sales of vitamins and food additives. Its product slate covers vitamin products such as D-Biotin (Vitamin B7) and folic acid (Vitamin

B9) as well as biological preservative and functional ingredient products including nisin natamycin and ε-polylysine hydrochloride. Based on a world-class quality management system the company has established a

standardized and regulated operation system and continuously provides high-quality products and services to customers around the world.As one of the earliest companies in China to engage in the production of D-Biotin the company is a major global supplier for D-Biotin and folic acid also one of the earliest domestic producers of bio-preservatives which is

recognized as a leading enterprise in the food additive industry in Zhejiang Province a provincial "Potential Champion" in its industry a key agricultural research institute in Zhejiang Province and a national-level "Little Giant"

enterprise. It enjoys a high fame and reputation in the global food additive industry. Based upon its years of operational experience continuous technical innovation process optimization and application development the

company has established itself as a leader in the product segment sector. It is leading globally in terms of mass production capacity technical expertise product market share and brand recognition. The Company has also

been honored with titles such as "China Quality Integrity Enterprise" " Mid-sized Enterprise with High Growth Potential in Zhejiang Province" and "Model Enterprise for Industrial Circular Economy in Zhejiang Province" etc.The company deeply implements its forward and backward integration development strategy to fully integrate the resources of its subsidiaries enhance synergies and coordination and steadily to advance the construction

of the entire industrial chain. In terms of forward integration the company has continued to optimize innovative processes enhance product quality and actively pursue various authoritative accreditation. It has undergone

the AEO Advanced Certification from the customs and obtained the CEP certificate for D-Biotin issued by the European Directorate for the Quality of Medicines & HealthCare (EDQM) becoming the first certified domestic

manufacturer of pharmaceutical-grade D-Biotin. Additionally it has completed the registrations for D-Biotin and folic acid in India steadily expanding into the API pharmaceutical sector. In terms of backward integration the

company has established production bases in Anhui and Tongliao creating the synthesis base and the Tongliao fermentation base in Anhui Province. These facilities provide upstream raw material security and production

capacity support for products such as vitamin series environmentally friendly water-based polyurethane series bio-preservatives and functional ingredients. Among the above Tongliao Shengda has via leveraging

economies of scale process optimization lean management and a circular industrial chain layout established its systematic and structural cost advantages to continuously enhance its core competitiveness and profitability.The company adheres to its core values of "customer first people orientation professionalism and integrity for mutual benefit" . It is mainly engaged in the vitamin and natural preservative business aiming to become an

outstanding enterprise in the world by providing safe sustainable and innovative solutions on foods feed additives and natural preservatives for its customers in the global food and animal nutrition sector.Main Business

Maintain Global Health and Nutritional Balance Provide Biological Preservation Lead the Healthy and Sustainable Solutions for Multiple Scenarios Development of the Food Industry

D-Biotin Folic Acid Riboflavin

(Vitamin B7) (Vitamin (Vitamin Nisin Natamycin ε-polylysine Dry Vinger Fermented

B9) B2) Sugar

03About Shengda Bio-Pharm

Main Applications

Vitamins Bio-preservatives and Functional Gradients

Animal Nutrition Sauce and Milk and Dairy Cheese Pastry Cooked Rice Meat Products

Sauce Products Products

Animal Nutrition Canned Food Braised Pork Fruit and Sauce Pasta Barbecued Snack

Vegetable Braised Food Foods

Juice Pork

Vitamin Vitamin Vinegar Compound Bacon Western- Sushi Seasoning

Supplement Drink Coffee and Seasoning style Ham

Tea Beverages

Corporate Culture and Values

Customer First Benefit yourself and Others Embrace Change Professional Expertise & Specialization Work Happily Learn and Grow

Respect customers Act with love and Face change with a positive Focus and excel. Promote Be joyful in the work that Continuously engage in

understand them and assist responsibility respect and mindset respond to change both the corporate and creates value Work as much open communication

them from their perspective; understand others put with effective actions and individual expertise as you enjoy life and Live absorb advanced ideas and

Manage expectations yourself in other's shoes and foster personal and creative simultaneously. Improve your life as seriously as you constantly renew your skills

balance customer needs and keep the big-picture in mind development through continuously the corporate treat your work. and knowledge ensuring

strive for maximal mutual to benefit others via your changes. professional standards in your learning outpaces the

benefit. acts. practice. speed of changes.

042025 Environmental Social and Corporate Governance Report

Historical Evolution

2018

2017 Expand into

Tongliao

2011-2014 Listed on the A-share

main board market The company acquired

2009 Business expansion Tongliao Huanghelong

The company expanded its Bio-Engineering Co. Ltd.

1998-1999 Leading market Through strategic global business and was and established Tongliao

share expansion the company listed on the main board Shengda Bio-Engineering

Company acquired Zhejiang Silver- of the Shanghai Stock Co. Ltd. to strategically

incorporation Elephant a renowned Exchange in the same year lay out a fermentation

Shengda Bio-Pharm has bio-preservatives (stock code: 603079) industry base and expand

become the world's largest

Acquire Tiantai manufacturer and the layout of a big health

supplier for D-Biotin so far.Pharmaceutical Works Anhui Changming industry.via competitive bidding Pharmaceutical. It

and establish Shengda subsequently established

Pharmaceutical to Anhui Shengda to lay out a

start operations in the synthetic industry base.vitamin industry. In 1999

Shengda Bio-Pharm was

incorporated.

05About Shengda Bio-Pharm

2025

2024 Strengthen

production and

Jointly build a improve quality2023

cornerstone of

development The company successfully

2022 Focus on completed its first private

differentiated The company rolled out an placement fundraising.

2019 employee stock ownership Deepen competition Powered by capital plan to provide incentives

business structure empowerment it has

The company is for key talent. By increasing steadily expanded its Issue convertible

deeply engaged in market-driven R&D product portfolio bringing bonds For the first time the high-specification investment and leveraging its industrial scale and

revenue from the food pharmaceutical-grade innovations in synthetic operational quality to a

The company issued QA and ingredient vitamin sector steadily biology processes to new level.convertible corporate sector surpassed that expanded its food achieve breakthroughs

bonds totaling 299 of the vitamin industry preservation business in critical technologies

million yuan to support becoming the company's and achieved remarkable it is advancing its

the development of pillar business. results in the innovation sustainability.Tongliao Shengda and and implementation

promote the sustained of circular production

growth of the company's processes.biological preservation

and functional ingredient

product segments.

062025 Environmental Social and Corporate Governance Report

Honor and Recognition

In recent years Shengda Bio-Pharm has continuously integrated ESG concept into the entire process of its operations and management to steadily improve its sustainability system.Thanks to its solid practices and outstanding performance in relevant fields the company is widely recognized and won more than one honorary title:

Second Prize for Science Third Prize of Science Postdoctoral Program

and Technology Progress in and Technology Progress Workstation in Zhejiang Zhejiang Provincial

Zhejiang Province in Zhejiang Province Province Engineering Research Center

Zhejiang Provincial Zhejiang Provincial Famous Export Brand in

Enterprise Research Enterprise Technology Quality Integrity Enterprise of Zhejiang Province (Under Re-

Institute Center China examination)

"Specialized Sophisticated

Distinctive and Innovative"

small and medium-sized Innovative small and "Specialized Sophisticated

Enterprise in Zhejiang Province medium-sized enterprises Provincial high-tech enterprise Distinctive and Innovative" Little

(Under Re-examination) in Zhejiang Province Giant Enterprise in Taizhou

AAA-level "Contract-Honor

Trustworthy" Enterprise in Certificate of AAA

Good Standardization Quality Award of Taizhou

Demonstration Enterprise of

Zhejiang Province (Under Re- Municipal Government Industrial Circular Economy in

examination) Practices Zhejiang Province

One of the 3rd Batch of

Water-saving Benchmark Four-star Enterprise in Enterprise for Cultivation of Enterprise for private economy

Enterprise in Zhejiang Enterprise Management "Pacesetters" for Integrated home office cultivation in

Province Rating of Zhejiang Province Domestic and Foreign Trading Zhejiang Province

in Zhejiang Province

07About Shengda Bio-Pharm

The company subsidiaries also carried out actively the ESG concept and have achieved remarkable results in their sustainability practices as recognized by the authoritative institutions.Anhui Shengda

"Specialized Sophisticated

Provincial-level Water- Distinctive and Innovative" Enterprise R&D Center of Anhui

Saving Enterprise small and medium-sized National high-tech enterprise Province

Enterprise in Anhui Province

Silver-Elephant

"Specialized

Sophisticated Distinctive

and Innovative Little Giant" Water-saving Benchmark Innovative small and medium-

Enterprise in the Ministry of Enterprise in Zhejiang sized enterprises in Zhejiang High-tech enterprise

Industry and IT Province Province

Yitao Food

Specialized Sophisticated

Distinctive and Innovative"

small and medium-sized Small and medium-sized Innovative small and Demonstrative Base for Enterprise Meeting Grade

Enterprise in Zhejiang Technical Enterprise in medium-sized enterprises Trade Secret Protection III Standard for Work Safety

Province Zhejiang Province in Zhejiang Province in Taizhou City Standardization

Tongliao Shengda

Specialized Sophisticated Development and

Innovative small and Distinctive and Innovative Industrialization Demonstration

High-tech enterprise medium-sized enterprise in small and medium-sized for Green Intelligent

in Inner Mongolia Inner Mongolia Autonomous enterprise in Inner Mongolia Manufacturing Technologies in

Autonomous Region Region Autonomous Region Key Biomedical Industries

082025 Environmental Social and Corporate Governance Report

09Sustainability Management

Corporate Governance

Shengda Bio-Pharm strictly complies with the Company Law of the People's Republic of China the Securities Law of the As of December 31 2025

People's Republic of China the Governance Guidelines for Listed Companies relevant regulations of the China Securities

Regulatory Commission and the Listing Rules of Shanghai Stock Exchange Stock to continuously improve its corporate the company's BOD comprised a total of

governance mechanism. The company's BOD is responsible for supervising and managing all significant matters of the

company including formulating and approving all policies overall strategies risk management and internal control directors

systems as well as monitoring the performance of the management team. 9

including and

Corporate Governance Structure of Shengda Bio-Pharm 3 independent directors 2 female directors

Shareholder

Meeting

The current directors and senior executives of the

Strategy Commission BOD company are all experienced professionals in the fields

BOD Secretary of food and medicine risk management accounting

Nomination Commission law and other related areas.Payroll and Assessment General BOD Office(Security Dept)

Commission Manage

During the reporting period

Audit Audit Commission

Supervision Dept the company held a total of deliberating on

5 shareholders' meetings 28 proposals

and

9board meetings for deliberating on44 proposals.

To further comply with relevant laws regulations

and supervisory provisions and in consideration of

the company's actual situation Shengda Bio-Pharm

has decided to establish no board of supervisors as of

November 2025.

10

HR Dept.Procurement Dept.HSE Management Dept.Production Project Management Dept.Quality Management Dept.Administration Office

Finance Dept.Market and Commerce Dept.Domestic Trade Dept.International Trade Dept.2025 Environmental Social and Corporate Governance Report

ESG Governance Structure

Shengda Bio-Pharm stresses highly on sustainability and endeavors to gradually improve its ESG governance structure it has established 1) researching and formulating the company's ESG vision goals

a robust ESG management system refining ESG key performance indicators and specific action plans based on the material topics and strategies; 2) identifying and assessing ESG-related risks and

identified aiming to explore the establishment of ESG objectives promote systematic ESG practices in corporate management opportunities and developing response strategies; 3) formulating

and operations and comprehensively enhance the company's ESG management capabilities. In 2025 the company explored the and reviewing ESG systems processes and assessment plans

establishment of a three-tier ESG governance structure consisting of "decision-making level - management level - execution level" and to ensure the implementation of ESG policies; 4) reviewing the

built an ESG work network to comprehensively coordinate all ESG-related activities. annual ESG report and submitting it to the BOD for approval.The Sustainability Leadership Team serves as a permanent body

ESG Governance Structure of Shengda Bio-Pharm of the Strategy Commission and is also responsible for the overall

coordination and daily management of ESG activities. Led by the

Decision-making Level Board Office (Securities Dept.) it is tasked with implementing

BOD the decisions and deployments of the BOD and the Strategy

Commission. It organizes and coordinates various departments

and subsidiaries of Shengda Bio-Pharm to carry out ESG-related

Strategy Commission activities to ensure the effective implementation of ESG strategic

objectives. Based on the professional fields of ESG work and

the actual corporate conditions seven professional teams have

Management Level established including the Climate Change Response Team

Sustainability Leading Group Environmental Compliance Team Product Quality and Safety

Team Employee Equity Team Sustainable Supply Chain Team

R&D Innovation Team and Business Ethics Team. The heads

Execution Level of the leading departments serve as the leaders of each team

responsible for achieving various ESG objectives and tasks in their

respective fields regularly collecting compiling and submitting

ESG data and information in their fields communicating with

stakeholders on ESG issues and participating in the preparation

of the company's annual ESG report.Based on the above the company will fully leverage the

effectiveness of its ESG governance structure integrate ESG-

related topics into the regularly convened meetings of the

Strategy Commission review and discuss materiality matrix

In the above structure BOD and its subordinate Strategy Commission serve as the "decision-making level" for ESG. The BOD as the sustainability goals actual progress of ESG activities future

highest decision-making body for ESG at Shengda Bio-Pharm bears the ultimate responsibility for ESG governance. It is responsible for planning directions and other key ESG issues and effectively

reviewing and approving the company's ESG development strategy medium- and long-term plans and annual work plans as well as supervise and thoroughly examine the implementation of the

the identification and management of ESG risks and opportunities the company's annual ESG report and the achievement of annual ESG management strategy.key performance indicators and targets. The Strategy Commission as a professional decision-making body is primarily responsible for:

11

Business Ethics Team

R&D Innovation Team

Sustainable Supply

Chain Team

Employee Equity Team

Product Quality and

Safety Team

Environmental

Compliance Team

Climate Change

Response TeamSustainability Management

Stakeholder Communication

In the process of business development and daily operations the company fully emphasizes and encourages transparent and open communication between responsible departments

individuals and stakeholders. While effectively conveying the company's strategic development financial performance and sustainability achievements the company also actively listens

to opinions and suggestions to identify the feedback and expectations from stakeholders and promote the long-term healthy development of the company.The main stakeholders of the company include but are not limited to governments and regulatory agencies shareholders and investors domestic and foreign customers suppliers and

partners employees community members and industry associations. The company regularly maintains communication and exchanges with stakeholders through various channels

listening to and actively responding to the expectations and requirements of various stakeholder groups. Apart from compliance operations financial performance product quality

and safety special focus is also on stakeholders' concerns regarding environmental protection labor rights and the construction of sustainable supply chains to ensure that various

management practices fully respond to stakeholders' expectations and requirements.Communications with Shengda's Stakeholders

Stakeholders Communication channels and frequency Expectations and requirements Response

*Talks and exchanges (irregular) Compliance operation *Observe laws and regulationsGovernments *

Supervision and inspection (irregular) Respond to the national strategy *Rely on industrial advantages to support the construction of a

and regulatory * *

*Organize visits (irregularly) *Drive economic development

healthy China

authorities *Create wide employment opportunities and pay taxes under law

*Daily report and communication (irregular) *Maintain market order *Strictly abide by business ethics and safeguard fair competition

Improve governance capacity and optimize the risk management

*Shareholders' Meeting (annual)

*

*Efficient corporate governance system

Shareholders *Regular Reports and Announcements *Sound economic performance *Maintain good profitability

and investors (quarterly/annual reports irregular announcements) *Timely information disclosure *Regularly release annual reports announcements and other public

*Investor relations activities (irregular) *Smooth channels for communication information

*Performance statement at regular intervals

Due Diligence (irregular) High-quality safe and innovative products *Promote innovation of products and servicesDomestic * *

*Industry exhibition (annual)and foreign *Facilitating and effective service

*Continuously improve product quality and ensure product safety

*Customer visits (irregular) *Strengthen customer relationship maintenance and listen to customers *Sustainable procurement

Customer satisfaction survey (annual) customer feedback and opinions* *Comprehensively improve sustainable performance and results

*Supplier conference (annual) *Improve the supplier evaluation and management mechanism

Suppliers and *Supplier review and evaluation (annually) *Cooperation in good faith *Integrate ESG into the entire process of supplier management

Partners *Daily work communication (irregular) *Communication empowerment *Carry out supplier communication and training

*Industry seminar and cooperation (irregular) *Actively empower the development of the industry

122025 Environmental Social and Corporate Governance Report

Stakeholders Communication channels and frequency Expectations and requirements Response

*Respect and protect the legitimate rights and interests of workers

*Staff Representative Congress (annually) *Protection of the legitimate rights and interests of workers *Create a diverse and equal working environment

*Staff education and training (irregular) *Equal diverse and inclusive working environment *Establish a fair impartial and transparent salary management

Employees *communication (irregular) *Sophisticated salary and welfare system system

*Internal communication platform (real-time) *Clear training plans and career development paths *Provide employees with comprehensive and multi-dimensional training resources

*Employee complaint channel (real-time) *Occupational Health and Safety *Ensure safety in production and the prevention and control of

occupational hazards

Community volunteer activities (irregular) Community development *Practice green production

community * *

*Charitable Donations (irregular) *Rural revitalization *Carry out public welfare and charitable activitiespublic

*Organize visits (irregular) Public welfare and charity activities *Devote to rural revitalization and assist in achieving common * prosperity

Industry *Participate in the formulation of industry standards

*Member activities *Active industry participationassociation *Participate in industry exchanges

Double Materiality Assessment

Assessment of materiality is the cornerstone of corporate ESG management and information disclosure. In 2025 based on the "No. 1 Overall Requirements and Disclosure Framework" outlined in the series of

documents including No 14 Self-Regulatory Guidelines for Listed Companies in Shanghai Stock Exchange- Sustainability Report (Trial)" and No 4 Self-Regulatory Guidelines for Listed Companies in Shanghai

Stock Exchange- Preparation of Sustainability Report as well as disclosure standards such as the European Sustainability Reporting Standards (ESRS) of the European Union and taking into account its own

strategic planning and realistic situations the company comprehensively analyzed the impact the 21 ESG topics outlined in the above No 14 file on the company's finances economy environment and society

through on-site interviews survey questionnaires seminars and other forms. After review and approval by the BOD and the strategy commission the company disclosed the double materiality assessment

process and results and responded in detail to the topics identified as with "financial" materiality by using the four-pillar disclosure structure of "governance - strategy - impact risk and opportunity

management - indicators and targets".Step 1: Understand the Enterprise Background Information and the Affected Stakeholders

The company fully analyzed the relationship between internal activities and business including the actual and potential sustainability-related impacts of upstream and downstream value chains. By combining

the analysis of the external objective environment including domestic and foreign policies industry hotspots market trends company strategies and development needs the company has identified

potential impacts that may arise on the company. In the meantime based on the relevance of stakeholders to ESG topics the company identified two major internal stakeholders: "board members" and "the

management" as well as six major external stakeholders: "employees" "government and regulatory agencies" "shareholders and investors" "customers" "suppliers" and "community". Among them internal

stakeholders participate in the financial materiality assessment while both internal and external stakeholders jointly participate in the impact materiality assessment of topics.Step 2: Identify the Current or Potential Impacts Risks and Opportunities Related to ESG Topics

Regarding the 21 ESG topics outlined in the "No 14 Self-Regulatory Guidelines for Listed Companies in Shanghai Stock Exchange – Sustainability Report (Trial)" the company conducted an assessment of

13Sustainability Management

applicability and relevance based on its industry characteristics and business operations. The results showed that the "Technology Ethics" and "Equal Treatment of Small and Medium Enterprises" are not

applicable to the company or its subsidiaries. Hence these two topics are not assessed or addressed in this report .Based on on-site interviews and desktop benchmarking the company conducted a thorough analysis on the remaining 19 topics to identify relevant impacts risks and opportunities thereunder. Taking topics

such as "Addressing Climate Change" "Product and Service Safety & Quality" and "Innovation-Driven Growth" as examples:

Response to climatic change

Positive The company promoted the green transformation and upgrading of existing products by phasing out high-energy-consuming equipment optimizing production

Impact processes and utilizing clean power while implementing green manufacturing in new projects to reduce greenhouse gas emissions.Negative The company still relies primarily on fossil fuel consumption and as its business continues to expand the failure to exercise effective controls may further

impact exacerbate the adverse effects of climate change on the environment and human health.Risks Climate change is posing both physical and transition risks. More frequent extreme weather events in the future along with increasingly stringent policy standards

may lead to rising costs and operational disruptions.Opportunity Advancing climate transition can further enhance climate resilience reduce operational costs and be more attractive in the sustainable consumption market.Innovation Driven

Positive Through continuous technological innovation process optimization and the development in the application fields the company owns multiple core patented

Impact technologies and has been leading in the product segment market.Negative Absence of innovation or effective protection of intellectual property right may hinder business development or the rights of stakeholders and could even impede

impact the overall technological progress of the industry.Risks The process of technological innovation may lag behind that of its peers resulting in resource wastage and potentially diminishing the company's competitive

advantage.Opportunity Continuously enhancing the company's competitiveness and leadership in the industry along with technology innovation driven by market demand helps the

company respond more flexibly to consumption market trends and improve market performance.Product and Service Safety and Quality

Positive Through strict quality control the company has continuously provided safe and reliable products and services winning wide recognition from major customers

Impact both at home and abroad.Negative If product quality management is neglected and major quality and safety problems occur it will do harm to downstream customers and consumers.impact

Risks An increase in the product non-conformity rate may on the one hand lead to a waste of resources; on the other hand it may reduce customers' experience of using

the product and affect the health and safety of consumers.Opportunity The company will further improve product quality and safety expand high value-added products enhance its own profitability and provide high-quality products

and services for the industry.

142025 Environmental Social and Corporate Governance Report

Step 3: Assess and Establish

the Materiality of ESG Topics

High Double Materiality Matrix for Shengda Bio-Pharm in 2025

To a s s e s s m ate r i a l i t y o f t h e i m pa c t a n o n l i n e

questionnaire was developed for 19 topics along with

their (actual/potential) positive and negative impacts.Internal and external stakeholders were invited to rate Social contribution

on each topic based on two dimensions: "severity of Product and Service Safety and Quality

impact" (scope scale irreversibility) and "likelihood of

occurrence." Questionnaires covered five stakeholder Innovation Driven

groups: board members management employees

customers and suppliers. Based on the feedback and

calculation formulas the impact materiality assessment

results for each topic were derived.Employee

For financial materiality assessment a workshop Cyclic Economy

with internal stakeholders was convened to evaluate Pollutant Discharge

the (actual/potential) risks and (actual/potential) Water Resource Harness

opportunities across 19 topics based on two dimensions: Waste Disposal

"degree of f inancial impact" and " l ikel ihood of Energy Leveraging

occurrence". The assessment involved board members

and key department heads and the financial materiality Anti-unfair Competition Supply Chain Safet

assessment results for each topic were consolidated Due Diligence Environment Compliance

finally. Management

Rural Revitalization Stakeholder

Communication Data Security and Customer Privacy Protection

Response to Climate Change

Step 4: Deliberation and Confirmation

of Materiality Assessment Results

Based on the assessment results the final materiality Ecosystem and Biodiversity

matrix is shown in the figure below in which "Innovation- Conservation

Driven" and "Product and Service Safety and Quality"

have double materiality— both financial materiality and Anti-commercial Bribery

impact materiality. and Anti-corruption

Low Financial Materiality

High

15

Impact MaterialitySustainability Management

The company will conduct annual regular reviews for

Topic Pillar Impact Materiality Financial Materiality materiality assessments and update and improve

Response to Climate Change the double materiality assessment methodology and

process mechanisms based on the latest regulations and

Pollutant Discharge standards so as to respond more precisely to stakeholder

demands and continuously enhance ESG management

Waste Disposal effectiveness.Ecosystem and Biodiversity Conservation

Environmental

Environment Compliance Management

Sustainability

Energy Utilization

Water Resource Harness Strategy

Cyclic Economy With the successive introduction of sustainability-related

laws regulations and guidelines both at home and abroad

Rural Revitalization enterprises have been presented with opportunities while

Social Contribution also facing more stringent requirements in terms of ESG

and sustainability. In recent years Shengda Bio-Pharm

Innovation Driven and its subsidiaries have successively received ESG-related

investigations and reviews from overseas customers. It

Scientific and Technical Ethics NA NA responded proactively through improvement and refining

in the areas of its deficiency and focused on enhancing its

Supply Chain Safety Social performance in sustainability. Against this backdrop and

based on its own business characteristics ESG governance

Equal Treatment for Small-Medium Sized Enterprise NA NA structure the company established a core value

featuring customer in the first place people-orientation

Product and Service Safety and Quality professionalism and mutual benefits. It has based upon

Data Security and Customer Privacy Protection the concerns of its stakeholders including regulators

domestic and foreign customers as well as partners

Employee formulated a preliminary "HEALTH" sustainability strategy

with production of high-quality health products as a

Due Diligence health guardian to benefit the world in a sustainable

manner as its mission. The strategy covers six strategic

Stakeholder Communication Sustainability Related pillars namely health and safety environmental

Governance protection enterprise and Innovation people-orientation Anti-commercial Bribery and Anti-corruption responsible supply chain and business ethics as well as

Anti-unfair Competition 19 topics to comprehensively guide the company's ESG

efforts and practices.

162025 Environmental Social and Corporate Governance Report

The "HEALTH" Sustainability Strategy of Shengda Bio-Pharm

Health guardian: Let high-quality health products benefit the world in a sustainable manner

H E A L T H

Health Emission & Advancement& Labor rights & Traceability & Honesty &

&Safety Environment Innovation Well-being Transparency Ethics

Practice green and low- Promote enterprise Provide safe and reliable progress with Uphold the people-oriented Build a fully traceable Abide by the bottom line

health products to carbon development to

promote harmonious professionalism and original aspiration respect and responsible supply of integrity and morality customers worldwide

coexistence between enterprise to enable and safeguard the value of chain and create a n d w i n t h e t r u st o f by following the most

operations and the innovative achievements every employee and jointly sustainable value stakeholders through stringent standards.natural environment. to benefit the public in create a better life. together with partners. solid governance.an equitable manner.Product and Service Safety

and Quality Response to Climate Change Innovative Driven Employee Supply Chain Safety Due Diligence

Stakeholder Communication Pollutant Discharge Circular Economy Social Contribution Due Diligence Anti-commercial Bribery and Anti-corruption

Waste Disposal Social Contribution Rural Revitalization Stakeholder Communication Anti-unfair Competition

Environment Compliance

Management Stakeholder Communication Stakeholder Communication Stakeholder Communication

Energy Leveraging

Water Resource Harness

Stakeholder Communication

Currently the company's ESG activities have completed their stage-wise transformation from "0" to "1" and are now at the critical stage of shift from "1" to "N". Based on the six strategic

pillars the company is systematically configuring specific action plans and a scientific quantitative metrics system to ensure that strategic goals are decomposable and executable. By

following the policy of "benchmarking against top-tier standards and pursuing continuous improvement" the company will persistently and deeply integrate the ESG requirements

into the entire process of R&D production and management. Through dynamic monitoring and targeted measures it will continuously enhance the ESG governance efficiency and risk

management capabilities to pave a good way for its sustainable high-quality development and enduring business success.

17

Mission Strategic Pillar Strategic Goal Topic ResponseGreen Development

182025 Environmental Social and Corporate Governance Report

Response to Climatic Change Governance

Climate change is not only having a profound impact on the human living environment The company has recognized profoundly the significant impact of climate change on its

and the development of the global economy and society but also reshaping the business strategic planning and business operations. It has integrated climate change governance

environment and operational models of enterprises. Based on compliance disclosure functions into its ESG governance structure clearly defining the responsibilities of the BOD

recommendations Shengda Bio-Pharm is exploring a way to address climate change and management to establish a top-down management system. Within this framework the

across four key areas: governance strategy risk management and metrics targets. By BOD and the strategy commission are responsible for decision-making oversight and top-

analyzing and identifying climate change-related risks and opportunities the company level design to steer the overall strategic direction. In the meantime relevant departments

is developing response measures tailored to its own business model thereby enhancing such as those for production management and HSE management are collaboratively

climate resilience across its operations and value chain. working on energy conservation consumption reduction and carbon emission control so

as to shift progressively greenhouse gas emission reduction from a "compliance cost" to a

"green competitiveness".Level Organizational Structure Main Responsibility

Decision-making level Exercise top-level oversight over the identification assessment and management of risks and opportunities related to climate change

Deliberate on and approve the climate strategy pathways metrics targets as well as their special budgets and resource allocation

Integrate ESG factors including climate change into major corporate decisions such as overall strategic planning business models

capital expenditure and acquisition and divestiture plans

BOD Gradually incorporate climate performance into the performance assessment of management level

Assess and manage the impacts risks and opportunities associated with climate change

Strategy Formulate medium and long-term strategic plans for the company to address climate change

Commission Track and supervise the implementation progress of carbon reduction pathways and key indicator targets

Provide advice on climate strategy and decision-making support to the BOD

Management level Formulate specific emission reduction pathways and annual action plans

Sustainability Coordinate cross-departmental resources and promote the implementation of climate goals

Leadership Team Supervise the completion of climate-related KPIs

Review the external climate information disclosure

Execution level Implement specific climate action and emission reduction measures

Collect compile and analyze carbon emission data

Climate Change

Identify and assess climate risks at the operational level

Response Team

Prepare climate-related reports/report chapters

Organize climate-related training and capacity buildings

19Green Development

Strategy

In 2025 the company conducted a preliminary identification and assessment of climate-related risks and opportunities by taking into account internal and external factors such as

regulatory policies market conditions its own industry characteristics and operational models. It also analyzed their specific impacts to formulate corresponding response measures.The company subsequently established high and low climate emission scenarios as per the disclosure recommendations of Shanghai Stock Exchange as well as data models and industry

research from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC). By thoroughly analyzing the risks and opportunities brought about by

climate factors under each scenario the company comprehensively evaluated its climate resilience and has progressively improved its climate response mechanisms.Analysis and Response to Major Climate-Related Risks

Risk Type Detailed Indications Impact Analysis Impact Scope Impact Cycle Counter-measures

Physical Risks

Upstream of * Establish a diversified raw material procurement Frequent occurrences * Supply outage due to disasters in the raw

of extreme weather material production areas value chain

network

events such as Corporate * Formulate contingency plan for typhoon and flood Acute Risk * Production facilities damage and outage.typhoons floods operation Short-term prevention and strengthen drills.droughts and high * Logistics and transportation delay

temperatures Downstream of

* Strengthen and upgrade the adaptability of

* Damage to inventory products value chain buildings equipment and facilities to extreme weather.* Increased energy consumption of refrigeration Upstream of * Optimize the energy efficiency of each

equipment in the production workshop value chain manufacturing base and systematically plan and

Average temperature replace energy-saving equipment.Chronic risk rise and precipitation * Affected stability of power supply in some Corporate Medium-and

pattern change regions operation long term * Continue to track climate change risks at operation

sites and optimize the layout of manufacturing

* Risk of increased water pressure in some areas. Downstream of value chain bases and warehouses.Transformation Risks

Climate-related * Investment in energy conservation talent * Establish a carbon management system and

regulations development carbon sink prices and other promote the process of carbon neutrality.Policy and and disclosure factors lead to increased operational and Corporate Short-and regulatory * Improve energy efficiency and the proportion of requirements are compliance costs.risks operation

medium

term renewable energy usedbecoming increasingly * Improper information disclosure leads to

stringent. * Strengthen the construction of internal capabilities reputational risks. and introduce external expert resources.

202025 Environmental Social and Corporate Governance Report

Risk Type Detailed Indications Impact Analysis Impact Scope Impact Cycle Counter-measures

* Increased costs for product research and Upstream of * Invest in the research and development of energy-

Green Product development as well as certification value chain Short-and saving and low-carbon technologies and improve Certification Carbon * The competitiveness of high-carbon products Corporate medium the management of product carbon footprints.Footprint Labeling has declined. operation

Requirements term * Increase investment in research and development

* Higher market access thresholds Downstream of and enhance incentives for innovation.value chain

Market risks

* Need to respond to customers' carbon Upstream of * Establish a carbon management system for the

Downstream management requirements value chain supply chain

customers require Corporate Short-and

suppliers to reduce * Failure to meet the standards may result in losing orders. operation

medium * Promote suppliers to reduce emissions

emissions. termDownstream of * Participate in the industry's green supply chain * Increased costs in supply chain synergy value chain initiative.Replacement * The existing production line is facing * Continue to research and develop green process

of low-carbon retirement. technologies

Technical technologies such Medium- as clean production * Considerable demand for investment in Corporate

* Gradually revamp the production equipment

risks technological transformation. operation and long technologies and term * Cooperate with scientific institutions for

green manufacturing * Reduced production capacity during the innovation

processes. technological transition period * Apply for a green technology patent

Negative feedback Upstream of

from stakeholders value chain * Communicate progress in climate change

regarding the * Failure to promptly communicate the response through information disclosure and ESG Reputational company's failure to enterprise's progress in addressing climate Corporate ratings.risk respond to climate change to stakeholders has resulted in negative operation

Long-term

* Keep the communication channels with

change issues in a feedback and damaged goodwill. Downstream of stakeholders open and conduct regular dialogues.timely manner value chain

21Green Development

Analysis and Responses to Major Climate-Related Opportunities

Opportunity Type Detailed Indications Impact Analysis Impact Scope Impact Cycle Counter-measures

Corporate

Green products have * Explore new markets and enhance brand * Develop green products such as safe operation efficient and naturally fermented foods.Green products a premium space and

competitiveness. Medium and

enjoy high market the downstream * Satisfy customers' green demands and increase long-term * Explore the use of biodegradable packaging

recognition. of the value sales revenue

chain * Obtain green product certification

Promote the

application of rooftop * Reduce long-term electricity costs * Invest in and construct rooftop photovoltaic Application * power stations and energy storage facilitiesof renewable photovoltaic systems Enhance energy autonomy Corporate

Short and

energy distributed wind operation

medium * Procure green power certificate

power and other * Reduce carbon emissions and promote the term

related applications. process of carbon neutrality. * Sign a Power Purchase Agreement (PPA)

Upstream of * Establish a supply chain carbon

* value chain management platformBuild a climate- Reduce the risk of supply chain outage

Diversified supply resilient and Medium- * Corporate * Empower and promote suppliers to reduce Improve business continuitychain diversified supply operation and long emissions

chain * term Enhance competitive advantages Downstream of * Implement responsible procurement

value chain standards

Impact Risk and Opportunity Management Indicators and Targets

The company has gradually integrated low-carbon development into its business The company is systematically sorting out various emission sources continuously

management and operational development. At the current stage various industrial sectors improving data collection and management mechanisms and planning to carry out

have achieved effective arrangements for energy conservation and carbon reduction in systematic and comprehensive greenhouse gas inventory work to improve the accuracy

strategic businesses and key projects and have actively carried out a series of pilot and and traceability of data. On the premise of continuously improving the data foundation

promotion initiatives achieving significant results in the green and low-carbon transition. the company will scientifically carry out carbon target setting and carbon reduction path

For details refer to the "Energy Utilization" section. planning clarify phased implementation plans and key measures steadily promote energy

conservation emission reduction and low-carbon transformation and gradually move

In the meantime the company has conducted full lifecycle carbon footprint accounting towards carbon neutrality goals.and certification for its main products (including D-Biotin folic acid 2% D-Biotin etc.). In

the future the company will further clarify and refine various carbon reduction initiatives

adopt more active and effective measures to practice the concept of green development

and contribute to the realization of the nation's dual carbon goals.

222025 Environmental Social and Corporate Governance Report

sewage pipe network and further processed by a centralized wastewater treatment shop.Pollutant Discharge As for domestic sewage it is preliminarily treated by sewage treatment system to meet the

standard for centralized management before being discharged into the municipal sewage

As a key pollutant discharger designated by the ecological and environmental authorities pipe network and sent to the centralized wastewater treatment shop for unified treatment.Shengda Bio-Pharm and its subsidiaries strictly comply with the Environmental Protection

Law of the People's Republic of China the Water Pollution Prevention and Control Law With the exception of certain drain provided with online monitoring devices that transmit

of the People's Republic of China the Air Pollution Prevention and Control Law of the emission data in real time to the ecological and environmental authorities and the

People's Republic of China the Soil Pollution Prevention and Control Law of the People's company's management platform the company and its subsidiaries regularly engage

Republic of China the Environmental Noise Pollution Prevention and Control Law of the qualified third parties each year to perform test at process wastewater and rainwater

People's Republic of China and other relevant regulations. The company takes compliance drains. The wastewater discharge proves consistently up to standard with effluent quality

pollutant discharge as a fundamental requirement for its production operations and conforming to the limits stipulated in the Integrated Wastewater Discharge Standard

ensures that all permits related to pollutant discharge are promptly updated and remain (GB8978-1996) the Indirect Discharge Standards for Nitrogen and Phosphorus Pollutants

valid and compliant. Internally the company has established regulations such as the in Industrial Wastewater (DB33/2013) the Discharge Standard of Process Water Pollutants

Regulation for Wastewater Management the Regulation for Exhaust Management the for Pharmaceutical Industry of Chemical Synthesis Products Category(GB21904-2008)

Regulation for Noise Management the Regulation for Environmental Protection Facilities and other relevant regulations. In the meantime the company has completed an anti-

Management and the Regulation for Leak Prevention Management etc. Each subsidiary seepage renovation project in key areas (tank farm and loading/unloading areas) of the

has also developed relevant procedural documents to continuously strengthen their Shengda Bio-Pharm and has installed monitoring wells to conduct annual self-monitoring

emission monitoring and control. While ensuring the proper treatment and compliance of soil and groundwater to effectively safeguard the environmental safety of soil and

discharge of various pollutants the company is committed to pollution source reduction groundwater.and process control.Based on its stable and compliance wastewater drainage the company has continuously

Wastewater Management improved its wastewater treatment efficiency and reduced the concentrations of drainage

by optimizing treatment processes and enhancing treatment facilities. Based on the above

The wastewater generated by the company and its subsidiaries primarily consists of the company has put in place the following measures: First it systematically optimized the

process wastewater cleaning wastewater maintenance wastewater lab wastewater wastewater treatment management and control system to improve the efficiency of solid-

cooling wastewater initial rainwater and domestic sewage. The company strictly follows liquid separation and sedimentation as well as their treatment. Secondly the company

a policy of split flow for rainwater and sewage as well as clean water and sewage. Each kept on upgrading its wastewater treatment processes to effectively reduce the levels of

production area is provided with the necessary collection pipe networks for production pollutant and related indicators in the wastewater.wastewater domestic sewage or rainwater with measures fully in place to prevent

potential negative impacts on soil and groundwater from production wastewater leakage.For process wastewater the wastewater generated during the production processes of the Wastewater Drainage in 2025

company and its subsidiaries mainly includes folic acid wastewater D-Biotin wastewater Shengda Bio-Pharm

miconazole nitrate wastewater and nisin wastewater. The main characteristic pollutants Anhui Shengda

include COD (Chemical Oxygen Demand) ammonia nitrogen total phosphorus and total

nitrogen. For treatment the company and its subsidiaries collect various types of high- 215546 ton 31043 ton

concentration wastewater at the workshop where it undergoes pre-treatment before

being combined with other low-concentration wastewater in a collection tank. The Tongliao Shengda Silver-Elephant (Including Yitao Food)

combined wastewater is then sent via boost pumps and exposed pipelines to the on-site

wastewater treatment shop where it undergoes advanced and effective treatment using

physicochemical and/or biochemical treatment processes. After meeting the standards for 896171 ton 435595 ton

discharge into the municipal pipe network the treated wastewater is sent to the municipal

23Green Development

Where the compliance drainage of major characteristic pollutants in process wastewater is shown in the following table:

Company Description Main Characteristic Pollutants Total Drainage (t) Certified Total Drainage (t/y) Drainage beyond limits

COD COD：54.22 COD：114

Shengda Bio-Pharm Ammonia nitrogen Ammonia nitrogen: 1.268 Ammonia nitrogen: 7.98 None

Total phosphorus Total phosphorus: 0.179 Total phosphorus:/

COD COD：6.308

Anhui Shengda Ammonia nitrogen Ammonia nitrogen: 0.111 COD：131.09

Total phosphorus Total phosphorus: 0.004 Ammonia nitrogen: 6.93

None

Tongliao Shengda COD COD：68.664 COD：753.97Ammonia nitrogen Ammonia nitrogen: 0.828 Ammonia nitrogen: 50.26 None

Silver-Elephant COD COD：88.46 COD：239.6

(Including Yitao Food) Ammonia nitrogen Ammonia nitrogen: 1.107 Ammonia nitrogen: 22.35 None

Exhaust Management

At the project EIA stage the company comprehensively identified regular and fugitive limits stipulated in the Comprehensive Emission Standard of Air Pollutants (GB16297-1996)

emission points for exhausts and selected efficient and feasible technologies and plants the Emission Standard of Air Pollutants for Pharmaceutical Industry (GB37823-2019) the

for exhaust collection and treatment. The exhaust generated during the production Fugitive Emission Control Standard for Volatile Organic Compounds (GB37822-2019) and

processes of the company and its subsidiaries primarily comes from the volatilization of other relevant regulations.organic solvents during production and that generated from chemical reactions including

production exhaust from various workshops breathing tail gas from storage tank areas On realization of stable and compliance exhaust emissions the company aimed to reduce

and exhaust from wastewater treatment. The main characteristic pollutants are VOCs fugitive emissions and achieve centralized exhaust collection and treatment by taking a

(Volatile Organic Compounds) NOx (Nitrogen Oxides) SO2(Sulfur Dioxide) etc. For multiple measures to further reduce exhaust pollutant emission.treatment the company and its subsidiaries have adopted a targeted approach involving

quality-based pretreatment and centralized terminal treatment for exhaust management.The exhaust from each emission source is collected in a sealed manner and sent via

pipelines to the exhaust treatment system where it undergoes effective treatment through First it appointed third- Secondly it has Thirdly it replaced the

combined processes such as filtration condensation spray scrubbing adsorption and party organizations to established an internal exhaust scrubber with

catalytic combustion to varying degrees. Among these the dust-laden exhaust is effectively conduct gas leakage test LDAR (Leak Detection and a new one to retire the

disposal using a water-membrane deluge approach. and regularly scan the Repair) system to improve outdated equipment

pipeline components the maintenance and and improve exhaust

With the exception of certain emission outlets equipped with online monitoring devices to identify and remedy replacement of the exhaust treatment efficiency.that transmit emission data in real time to the ecological and environmental authorities promptly the leak-offs lines as well as the exhaust

and the company's management platform the company and its subsidiaries regularly identified to minimize collection and transfer

engage qualified third parties to conduct testing of organized and fugitive exhaust leakage and fugitive system to further reduce

emissions annually. The emission concentrations of various pollutants comply with the emissions. their fugitive emissions.

242025 Environmental Social and Corporate Governance Report

Exhaust Emission in 2025

Shengda Bio-Pharm Anhui Shengda Tongliao Shengda Silver-Elephant (Including Yitao Food)

17732 10k m3 4817 10k m3 51210 10k m3 83016 10k m3

Where the compliance emission of major characteristic pollutants in exhaust is shown in the following table:

Company Description Main Characteristic Pollutants Total Emissions(t) Certified Total Drainage (t/y) Emission beyond limits

SO2 SO2: 0.532 SO2: 0.61

Shengda Bio-Pharm NOx NOx: 0.66 NOx: 4.2 None

VOCs VOCs：1.0875 VOCs：11.785

Particulates Particulates: 0 Particulates: 0.855

SO2 SO2: 0.0862 SO2: 0.35

NOx

Anhui Shengda NOx: 0.7462 NOx: 3.78 None

VOCs VOCs：0.7146 VOCs：13.392

Particulates Particulates: 0.0260 Particulates: 0.4

SO2 SO2: 54.3442 SO2: 240.08

Tongliao Shengda NOx NOx: 75.133 NOx: 324.83 None

Particulates Particulates: 4.8313 Particulates: 59.11

Silver-Elephant (Including Yitao Food) Particulates Particulates: 0.543 Particulates: 5.926 None

Noise Management

While prioritizing the selection of noise-reducing equipment and strengthening equipment the boundaries of each production facility proved to be within the limits specified in the

maintenance the company has taken room isolation measures for highly acoustic Emission Standard for Industrial Enterprises Noise at Boundary (GB 12348-2008).equipment. It has installed soundproof materials inside the isolated structures and

placed noise barriers at appropriate points within the plant area. These measures are In 2025 Shengda Bio-Pharm and its subsidiaries received no complaints from the local

effective in isolation and control of noise sources and have minimized the impact from residents on its irregular pollutant discharges and were not subject to any administrative

noise to the greatest extent allowed. During the reporting period the company and its penalties and/or damages for criminal liability on issues relating to up-to-standard

subsidiaries appointed qualified third parties to conduct noise test and the noise levels at emission of pollutant.

25Green Development

Waste Disposal Hazardous Wastes

Shengda Bio-Pharm strictly complies with the Law of the People's Republic of China on the For hazardous waste (such as waste solvents waste mineral oil waste packaging

Prevention and Control of Environmental Pollution from Solid Wastes and other relevant material wastewater sludge etc.) the company and its subsidiaries have established

laws regulations and industry standards. The company has established an internal temporary storage warehouses for hazardous waste as per the Pollution Control Standard

Regulation for Solid Waste Management and all its subsidiaries also established relevant for Hazardous Waste Storage" (GB 18597-2023). The waste is stored by category form

procedures of like nature. These regulations were developed for reduction recycling and and physic-chemical properties and subject to up-to-standard disposal by qualified

non-hazardous disposition of pollutants aiming to normalize the classified collection and third parties appointed for the purpose. Additionally the company has also formulated

storage outsourced transit utilization or disposal of wastes and minimize their negative documented regulations for recording and transfers its hazardous wastes to be consistent

impact on the environment. with the Technical Guidelines for the Preparation of Hazardous Waste Management Plans

and Records (HJ 1259-2022).Non-hazardous Waste While ensuring the compliance disposal of hazardous waste the company also endeavored

to advance its emission reductions. By addition of new plate and frame filter presses and

For general industrial solid waste (such as fly ash gypsum used diatomite etc.) the adopting a dewatering process the company reduced effectively the moisture content

company and its subsidiaries usually appoint qualified third parties to enable their in sludge to minimize its sludge generation. The company also intensified its efforts

comprehensive utilization and harmless disposition. Solid wastes with recycling value for routine maintenance management of equipment to reduce their rate of failure and

(e.g. spent packaging materials) is collected and periodically sold to waste recycling replacement frequency minimize the consumption of solvents and lube oil and promote

entities. Domestic waste is uniformly cleared and treated by the local municipal sanitation control and safety and environmental protection at the source.department. The company will continue to reduce the generation of non-hazardous waste

by tightening requirements for fuel consumption optimizing production processes and

other measures to minimize the generation of non-hazardous wastes.Waste Discharge in 2025

Total Yield of Hazardous Waste

Shengda Bio-Pharm Anhui Shengda Tongliao Shengda Silver-Elephant (Including Yitao Food)

699 ton 149 ton 1 ton 2 ton

Total Yield of Non-hazardous Waste

Shengda Bio-Pharm Anhui Shengda Tongliao Shengda Silver-Elephant (Including Yitao Food)

40 ton 30 ton 14228 ton 3881 ton

262025 Environmental Social and Corporate Governance Report

Environment Compliance Management

Shengda Bio-Pharm has consistently integrated the fulfillment of environmental compliance responsibilities into the

core principles of its corporate operations and established a comprehensive multi-tiered environmental compliance

management system. The company strictly complies with the Environmental Protection Law of the People's Republic of

China the Law of the People's Republic of China on Environmental Impact Assessment the Management Procedure of

Contingency Plan for Unexpected Incidents the Management Procedure of Contingency Plan for Unexpected Incidents in

Enterprises and Institutions (Trial) and other relevant laws and regulations. In alignment with its actual production and

operations the company has internally developed and implemented management procedures such as the Responsibility

System for Environmental Protection the Procedure of Potential Hazards Management for Environmental Protection

and the Contingency Plan for Environmental Emergency etc. Each subsidiary has also formulated relevant procedures of

management to conduct "full-process and refined" environmental management. During the reporting period Shengda

Bio-Pharm and its subsidiaries were certified to comply with the ISO 14001:2015 environmental management system thus

building a systematic and standardized environmental management and emergency response mechanism which provides

solid guarantee for the company's stable operations and sustainability.Allocation of Responsibility for Environmental Protection

The company fulfilled in a down-to-earth manner its primary responsibility for environmental governance to ensure that

environmental responsibilities are delegated level by level and assigned to specific positions and individuals. The chairman

is the first person responsible for the company's environmental protection taking overall responsibility for the company's

environmental affairs. The HSE Dept. acts as the body for daily management of the company's environmental activities

and is responsible for the formulation and implementation of environmental management regulations environmental

risk assessments supervision inspections and related work coordination. Additionally the company has also established

an environmental protection leading team headed by the general manager with members comprising heads of various

departments. The team is responsible for coordinating and advancing environmental protection initiatives addressing

key and challenging issues in environmental management and ensuring the effective implementation of environmental

management measures and the satisfactory execution of environmental protection activities.Environmental Factor Assessment

The company has developed and implemented the Procedure for Environmental Factor Identification and Assessment

and organizes systematic identification and evaluation of environmental factors in all departments of the company

on an annual basis. It has identified the potential environmental impacts arising from production and operations and

confirmed the same the heads of relevant departments to pinpoint key environmental factors. For the identified high-

risk environmental factors the company has provided tiered control and targeted management and established a closed-

loop management system of "identification-evaluation-control" to mitigate the environmental risks at the source and

continuously improve its environmental performance.

27Green Development

Remedy of Potential Environmental Hazards

Based upon the Procedure for Environmental Protection Related Hazard Control and The Emergent Response Organizational Structure in Shengda Bio-Pharm

Management the company conducted environmental hazard inspections in key areas and

facilities including production equipment areas raw material tank farm hazardous solid

waste warehouses environmental protection treatment facilities rainwater pipe networks General Director

and emergency response systems various pipelines within the plant and groundwater

and soil monitoring. The company has applied a dual mechanism consisting of "quarterly

company-level inspections and monthly departmental-level inspections." Specifically

company leaders and designated responsible leaders organize environmental hazard Vice General Director

inspections at least once per quarter while workshops and departments organize such

inspections at least once per month.For the identified hazards the company strictly implements a process of "registration and

filing responsibility assignment and rectification within the specified timeframe" for the

same. It requires that hazards be documented as per relevant regulations establish a

hazard investigation and rectification log and based on the division of responsibilities

assign responsible personnel formulate measures for remedy and set deadlines for

their rectification. The company requires the department where the hazard originated

to organize relevant technical personnel to conduct a root cause analysis identify the

underlying reasons and implement targeted remedy to ensure the proposed remedy is

in place. Additionally on completion of any hazard remedy relevant departments are

required to apply in activities the lessons learned conduct further inspections for similar

hazards coordinate the efforts for remedy and finalize relevant documents for closed-loop

management to ensure the remedy is complete and the compliance risks are at control.Consolidate the Emergent Response Line To enhance its capability in responding to unexpected environmental incidents the company conducts on annual basis a comprehensive emergency drill and two drills

The company has continued its efforts to improve its environmental emergent specific for environmental protection roles. These drills simulate scenarios such as

management system aiming to strengthen its emergent preparation and drills and hazardous waste spill soil pollution. By following the environmental contingency plan the

effectively build a solid environmental safety and emergent response line. To be consistent participants strictly implements relevant procedures governing incident reporting on-site

with relevant laws regulations and policies the company devises reasonably its warning and isolation wearing protective equipment confined space rescue and emergent

procedures for incident reporting response and disposition to define the composition disposition and medical treatment of the injured. These drills enable the emergency

of the emergency response team and the allocation of material. It has established a responders to become more familiar with the response procedure and identify promptly

systematic contingency plan (including comprehensive and specific contingency plans). any deficiency. For the identified areas of concern the company will organize targeted

A systematic review and updating of the environmental contingency plan are conducted training improve relevant actions to be taken on emergency and revise the contingency

every three years and it is submitted to the local environmental protection authorities for plan as necessary before its re-filing.filing as required. To ensure any environmental emergency is prevented responded and

disposed of orderly the company has established an environmental emergent response

organization. Each of the team thereunder functions properly and collaboratively based

upon their work split

28

Expertise Technology

Team

Communication and

Contact Team

Material Support Team

Environmental Command

Team

On-site Security Team

Medical Aid Team

Emergent Rescue Team

Emergent Fire Prevention

Team2025 Environmental Social and Corporate Governance Report

Promote Prevention of Accidents through Drills: Emergency Drill for Hazardous Chemicals Leakage and Fire Accidents

To effectively respond to emergency due to hazardous chemical leakage and fire

accidents and ensure the safety of employees' lives on October 23 2025 the

company organized a unified emergency drill for hazardous chemical leakage and

fire accidents. All employees for Grignard in the D-Biotin workshop EHS office

equipment maintenance workshop and other relevant departments participated

in the drill. The drill plan was issued to all positions concerned one week later

following its study devising and endorsement. The participants studied and

were trained carefully and strictly implemented the plan. During the drill each

participating organization organized their activities carefully responded quickly

and coped with the situation in a standardized manner. The on-site simulation was

close to reality and focused on testing the evacuation of personnel self-protection

use of emergency materials and equipment and collaborative capabilities. This

has improved further the risk identification and emergency response of employees

enhanced the overall coordination ability and emergency response of the company

on emergency.In 2025

There were

NOmajor environmental violations or incidents NOany environmental compliance issues which subjected them

occurred in Shengda Bio-Pharm and its subsidiaries to any administrative penalties or criminal liabilities

The total investment in environmental environmental protection related with a total of

protection was trainings were organized

5756.46 10k CNY 25 1001 participants

Energy Utilization

Efficient energy utilization is crucial for enterprises to reduce resource consumption and promote sustainability. Shengda Bio-Pharm strictly complies with the Energy Conservation

Law of the People's Republic of China and other relevant laws and regulations continuously strengthens its normalized consumption of energy as per Energy Conservation and Carbon

Reduction Management Policy and has developed and carried out such internal management regulations as Regulations for Energy Management and the Regulations for Energy Metering

Management. During the reporting period Shengda Bio-Pharm was certified to comply with ISO 50001:2018 energy management system. Its subsidiaries have also simultaneously

established and implemented relevant energy management procedures to continuously enhance the standardization and systematization of their energy management.

29Green Development

Energy Audit and Measurement

Schedule of Energy Conservation Measures

The company continues to improve its basis for energy Dimension Measures in 2025

management to achieve full coverage of measuring instruments

for key energy-consuming equipment across its subsidiaries Shengda Bio-Pharm completed its energy efficiency upgrade for its power supply

and various workshops. Through an energy online monitoring and distribution system by replacing all S9 series transformers with S15 series Class

platform it conducts real-time data collection and monitoring I energy-efficient products. This achieved a "three-level leap" in energy efficiency

of water electricity and steam and supports accurate monthly ratings significantly reducing transformer energy consumption.energy cost accounting and anomaly analysis hence has

improved continuously its refined energy management. Equipment Tongliao Shengda carried out a special rectification campaign for key energy-

renewal consuming equipment by retiring and replacing six high-energy-consumption electro-

Besides the company conducts internal audits of the mechanic devices to progressively eliminate equipment energy efficiency bottlenecks.construction and operation of the energy management system

annually requiring relevant responsible departments to rectify

non-conformities within a specified timeframe to ensure the The Silver-Elephant took energy-saving measures across its key product lines to

adequacy and effectiveness of energy management. In the continuously enhance energy utilization efficiency:

meantime its subsidiary Silver-Elephant as a key energy- In the nisin product line the nisin acidification process was optimized and the steam

consumer in Zhejiang Province in 2025 strictly obeyed the consumption was further reduced compared to the original process saving about 4.2

governmental requirements for energy statistics and review. tons of steam per batch per tank.It submits energy data such as the Enterprise Energy Revenue Process

and Expenditure Balance Sheet Enterprise Energy Purchase optimization For the polylysine product line the polylysine production process was improved by

Cost Sheet and Energy Consumption Sheet for Outputs omitting the use of steam to further reduce steam consumption.monthly through the Zhejiang Provincial Comprehensive Energy

Utilization Status Management System. The company submits its

Unit Energy Consumption of Major Energy-Consuming Products The Silver-Elephant achieved the thermal energy recycling from condensed water

and Comprehensive Energy Consumption and Enterprise Water generated during the process. This has realized the waste heat recycling and further

Consumption Status Sheet annually. enhanced the overall energy utilization.Yitao Food has also taken a number of energy-saving measures by targeting key areas

for energy-consumption:

Energy Efficiency Enhancement

In the drying production line all atomizers were provided with waste heat recovery

Recycling units for exhaust and steam condensate enabling cascaded utilization of waste The company and its subsidiaries have continued to promote heat.their energy efficiency systematically carry out energy-saving

renovations in such aspects as equipment renewal process For the air conditioning system rotary dehumidifier waste heat recovery devices

optimization recycling etc. to solidify its foundation for green were installed to recover and reuse the waste heat generated during the AC system

manufacturing. operation to reduce reheating energy consumption.

302025 Environmental Social and Corporate Governance Report

Clean Energy Utilization

The company actively promotes the utilization of clean energy explores the use of photovoltaic power generation facilities to increase the proportion of clean energy application and has

continuously optimized its energy structure. The company has installed solar streetlights and plans to provide the part of existing rooftop space at its plant to qualified third parties for the

installation of photovoltaic power stations. This project is currently under negotiation. In the meantime the rooftop of the warehouse at its subsidiary Silver-Elephant was provided with

215 kW of photovoltaic panels which has generated 222100 kWh of electricity in 2025. In terms of green certificate purchase Silver-Elephant and its subsidiary Yitao Food purchased a

total of 30000 green certificates in 2025.Empower through Green Initiatives：Promote Energy Conservation and Emission Reduction and Guide Behavior Changes

The company organizes annual training and promotional activities on the theme of energy conservation and emission reduction aiming to provide systematic explanations

and case studies on energy-saving techniques in daily office and living scenarios and continuously enhance employees' awareness of energy conservation and environmental

protection. The training covers specific measures such as rational operation of office equipment minimizing standby power consumption and optimizing the use of air

conditioning and lighting to encourage the employees to start with minor things and embrace a green and low-carbon approach to work and life. In the meantime the

company also through means including internal publicity energy-saving initiatives and behavior guidance etc. fostered a positive atmosphere of full participation to integrate

the concept of energy conservation and emission reduction into daily management and employee behaviour and establish in a stepwise manner a long-term normalized

mechanism for green development.Water Resource Harness

Shengda Bio-Pharm strictly adheres to relevant laws and regulations such as the Water Law of the People's Republic of China the Regulations on Water Conservation and the Regulations

on Urban Water Conservation Management to promote sustainably carry-out of its water-saving measures.The company reuses the process water in its production process to achieve recycling of the same which can save about 30000 tons of water annually; In the meantime the surplus purified

water generated by the purified water station is collected in the intermediate water tank for recycling in the CCW system which has improved the efficiency of water resource harness and is

expected to further save water every year.In the production line the corporate subsidiary i.e. Silver-Elephant recycled and reused the cooling water as equipment cleaning water; In the meantime the cleaning management was

optimized and to reduce reasonably the frequency of equipment cleaning which may save about 3600 tons of water per year; Besides Silver-Elephant has endeavoured to recycle the

process water and recycle the water used in other sections to further reduce the amount of fresh water required.

31Green Development

Circular Economy

Shengda Bio-Pharm actively practices the circular economy concept and its subsidiary Tongliao Shengda continuously

promotes the enhancement of the value of fermented by-products. By utilizing fermented by-products in the development

of products such as protein feed and microbial agents the transformation of by-products from "waste" to "resource

utilization" is achieved and the comprehensive utilization level of resources and added value of products are continuously

improved——efforts are made to build a green low-carbon efficient and circular industrial development model to provide

solid support for sustainability of enterprises and industrial transformation and upgrading.Ecological System and Eco-diversity

Protection

The company follows the principle of source avoidance and intensified process management to effectively protect

the ecosystem integrity and biodiversity. It commits to minimize its interference and damage to ecosystems during its

production and operational activities. For its project site selection Shengda Bio-Pharm strictly complies with national

and local laws and regulations such as the Environmental Impact Assessment Law of the People's Republic of China and

the Regulations on the Environmental Protection Management of Projects to fully meet the requirements for delineated

boundaries of ecological conservation red lines and environmental control in the proposed location. The company

prioritizes its project location in industrial agglomeration areas to preclude any of its constructing or operation in

important areas such as nature reserves scenic spots potable water source protection zone and wildlife protection areas.It endeavored to refrain from locating its projects near important ecological function zones or ecologically sensitive and

fragile areas to avoid any ecological damage at the source. During the project construction and operation the company's

pollution prevention facilities for exhaust wastewater and other pollutants are built and put into operation in-phase

with the main works. These facilities are operated stably and pollutants are treated according to legal requirements and

pollutants are discharged strictly by using the means stated in the permit for pollutant discharge to ensure that ecological

impacts are mitigated throughout the process.In the reporting period

Shengda Bio-Pharm its subsidiaries and their production facilities

haveNO operations within the scope of ecological conservation red lines.

322025 Environmental Social and Corporate Governance Report

33Social Responsibility

Employee

Shengda Bio-Pharm strictly complies with the Labor Law of the People's Republic of China the Labor Contract Law of the People's Republic of China the Social Insurance Law of the

People's Republic of China and other relevant laws and regulations. The company consistently adheres to a people-oriented development philosophy regarding employees as the

core driver of sustainability. It continuously improves the employee rights protection and labor rights management system ensures compliance employment at the law and safeguards

earnestly employees' legitimate rights and interests as well as their professional dignity. To this end the company has established the Labor and Human Rights Management Objectives and

Regulations which includes seven categories of quantitative indicators covering employee health and safety working conditions and social dialogue etc. to ensure ongoing monitoring

evaluation and improvement. While providing strong guarantee for employee rights and interests the company stresses highly on attracting cultivating and retaining talents. Through

a robust talent acquisition mechanism a systematic training system and diversified career development the company provides employees with extensive growth opportunities and

platforms to realize their value. In the meantime the company actively fosters a fair equitable diverse and inclusive workplace environment respects individual differences encourages

the collaborative development of talents from diverse backgrounds so as to continuously enhance organizational vitality and cohesion and promote the joint growth and progress of both

the company and its employees.Labor Right and Interests

Shengda Bio-Pharm strictly prohibits forced labor child labor and other violations of labor rights. The company continuously improves its employment management and overtime control

mechanisms safeguards employees' rights to rest and leave under the law and protects employees' legitimate rights and interests through democratic management channels such as

trade unions.The company has established a Management Procedure for Prohibiting Forced Labor Mental and Physical Abuse and Ensuring Freedom. It explicitly states

Prohibition that the company shall not collect any form of deposit or collateral. It prohibits forcing employees to stay on-site after work and forbids any form of corporal

of forced punishment physical contact mental coercion or verbal abuse. All employees have the freedom to elect whether to work overtime and are provided with two

labor forms of compensation for overtime work—compensatory leave or overtime pay—as stipulated to ensure effective protection of employees' basic legitimate rights

and interests.The company strictly adheres to the State Council's Prohibition of Child Labor Regulations and the Law of the People's Republic of China on the Protection of

Prohibition Minors. It has formulated the Management Procedure for Child Labor and Young Workers to establish comprehensive prohibitive clauses complaint channels

of child and processing mechanisms for management in the area. Through a systematic seven-step process—including identification and reporting acceptance and

labor evaluation investigation and intervention emergent rescue case assessment and planning remedy and long-term follow-up and support—the company has put

in place a structured remedy and support process to effectively safeguard the physical and mental well-being of minors and children.The company has continuously improved its employee leave management mechanism. While providing legal guarantee for rights to annual leave marriage leave

Leave sick leave bereavement leave maternity leave etc. the company focuses on its efforts to optimize arrangements for parental leave paternity leave nursing leave

application family reunion leave and family care leave. For example employees with their kids under three years of age are entitled to a 10-day parental leave per year;

mechanism employees who are the only child of a parent aged 60 or above are entitled to an additional five days of family care leave per year. These measures prove effective

in assisting employees balance childcare responsibilities family obligations and career development.

342025 Environmental Social and Corporate Governance Report

The company continuously improves its democratic management mechanisms and actively promotes the development of trade union organizations. As

stipulated in the Trade Union Law of the People's Republic of China the Constitution of the Chinese Trade Unions the Regulations on the Election of Grassroots

Level Trade Union Organizations and other relevant regulations the company formally established a trade union and elected its employee representatives

Democratic

management in 2020. It holds regular employee representative conferences annually to gradually refine the communication and consultation mechanisms. Currently the

development organizational structure of the Fourth Employee Representative Conference Commission is well-configured and the election of the Trade Union Commission

the Fund Audit Commission and the Female Workers' Commission has concluded successfully. Through the signing of collective agreements the company has

made equal consultations on issues governing compensation and benefits working hours labor protection and employee concerns to effectively safeguard

employees' rights to information participation and supervision and promote development of harmonious and stable labor relations.Talents Attraction and Retention

In terms of talent attraction and retention Shengda Bio-Pharm taking compliance

employment as a precedent condition has improved continuously the organizational Walking by the Lakeside to Build Vitality with Every

attractiveness and employee stability through a robust talent retention mechanism Step — Active Joining in the 2025 Group Walking Event

and a competitive compensation and benefit system. The company has established

a comprehensive Labor and HR Management System and put in place a standardized On November 29 2025 the company organized the first session of 2025 Group

assessment and screening mechanism. During the recruitment process a unified workflow Walking Event launched by Shengda Group at Shifeng Lake Park to attract

for job application approval information publication resume screening interview active participation of its employees. The event is launched to keep employees

evaluation and employment approval has been established to ensure that the entire physically fit and promote their solidarity. It not only enhanced effectively

recruitment process is standardized compliant and traceable. Candidates are promptly employees' physical conditions but also promoted cross-departmental

informed of the recruitment progress to safeguard their right to know. communication and the team cohesion through outdoor collective activities. The

event showed the employees are mentally upward. By deeply integration of a

Based on national laws and regulations as well as industry characteristics the company healthy life style with unity and progress the event fostered a positive corporate

has established a comprehensive Regulation for Salary Assessment Management. It adopts culture ecosystem reinforced organizational cohesion and empowered the high-

a classified salary management model in establishing a salary structure adaptive to job quality development of the company with spiritual drive and cultural vitality.value personal ability and performance. The payroll consists of basic salary performance

bonuses and various allowances and subsidies. The salary establishment adjustment

and payment are carried out in accordance with institutional norms to ensure fairness and

incentive-based compensation.Apart from a robust social security mechanism (five social insurances and housing fund)

the company also provides various welfare and care program for all employees including

employee dormitories meal allowances for work team building tours union benefits

holiday gifts birthday party activities etc. Furthermore for migrant employees the

company has specially formulated a Procedure for Migrant Talent Welfare Management

which creates a good working atmosphere for migrant employees by providing free

accommodation non-local family reunion leave and subsidies to enhance their sense of

belonging and the company's talent attraction and retention stability.

1Zhejiang Shengda Group Co. Ltd. the controlling shareholder of the company.

35Social Responsibility

Talent Cultivation and Development

Joint Celebration in the Name of Love — Birthday Gatherings Shengda Bio-Pharm pursues full-chain synergy for its talent recruitment cultivation

Convey Warmth and Cohesion employment and retention. It focuses on improving the talent reserve and succession

mechanisms to consolidate its talent base for key jobs. It has established a comprehensive

To ensure that every employee truly feels the warmth brought by the "family framework that covers full-cycle training and development multi-channel career

culture" enhance their sense of belonging and identity and encourage them to advancement and competitive incentive safeguards. It continues to improve employees'

learn how to give back with gratitude (gratitude to family and parents colleagues professional competence and provide additional room for their growth so as to build a

friends the company and the society) and foster a harmonious working and high-quality high-performance team of specialized talents.living environment the company organizes monthly birthday gatherings for the

birthday employees. During these events the company presents handwritten

greeting cards and cozy birthday gifts to the birthday employees and their family

members. Employees are encouraged to do something small but meaningful for

their parents on their birthday take a photo with a caption and submit it in the

contest organized for the purpose. In the meantime the company also organizes

employees to participate in public welfare volunteer services and extend their

wishes through dedicated columns videos and rolling displays in public areas so

as to create a harmonious and warm working atmosphere.Splendor of Shengda Bio-Pharm

Basketball Team Shengda Hehe Book Bar

Shengda Greetings on the Spring Festival Shengda GYM

362025 Environmental Social and Corporate Governance Report

Training empowerment

The company has formulated Regulations for Employee Training Management and established a comprehensive training system covering pre-employment training on-the-job training

job transfer training and qualification training. Through the integration of internal training and external off-the-job training the company selects instructors with proven professional

experience and outstanding teaching capabilities to provide employees with a systematic multi-level learning and development platform. The effectiveness of training is evaluated

through written examinations on-site operational assessments oral questioning and other methods as appropriate. Through the above closed-loop training and evaluation system the

company has improved effectively employees' job competence and standardized operational skills providing a solid talent base for the company's high-quality development. Based on

the company-wide training system the company further refines its tiered and categorized talent development framework. Through three distinctive programs—the "Shengrui" Program

(young leader program) the "Shengtu" Program (reserve cadre program) and the "Shengjing" program (newly promoted managers)—the company offers differentiated training and career

development pathways tailored to various groups to continuously strengthening the construction of its talent pipelines.

01

Principal departmental leader 02

Deputy departmental leader 03

"Shengrui" Program (Young Leader Program) Successor

1st-tier leader pipeline Potential talents"Shengtu" Program (Leader Pool Program)

2nd-tier leader pipeline "Shengjing" Program (Newly Promoted

Managers)

Promotion and Development 3rd-tier leader pipeline

The company has established a dual-channel career

development system comprising the P-sequence (including

technical production marketing and functional roles)

and the M-sequence (management roles). Differentiated

New Assistant Intermediate Senior Professorate

promotion paths and evaluation methods are set up based on employees Technicians engineer engineer engineer engineer

the characteristics of the two job categories and transparent

promotion mechanisms and assessment criteria are developed

to provide clear pathways for employee growth and career

development. For example the company has formulated

the Management Regulations for Technical Personnel Grade New employees Deputy Senior

manager executives

Assessment which specifies the standards and qualification

re q u i re m e n ts fo r te c h n i ca l p e r s o n n e l p ro m ot i o n s .Comprehensive assessments are conducted based on

Deputy Assistant

dimensions such as technical experience professional supervisor manager

competence and work performance to provide a systematic Principal Strategic senior

Supervisor manager executives

framework for the promotion of technical personnel.

37

Taking Technology as an Management

example (P-sequence) (M-sequence)Social Responsibility

Incentive Guarantee

To further enhance employee cohesion and the company's competitiveness and promote the company's long-term sustainable and healthy development Shengda Bio-Pharm

developed the 2024 Employee Stock Ownership Plan for Shengda Bio-Pharm. Under the plan directors supervisors senior management and other key employees are granted share

incentives totaling no more than 10% of the company's total share capital. A management commission elected by all shareholders is responsible for overseeing and managing the

entire stock ownership plan. In 2025 the company advanced the implementation of the employee stock ownership plan completed non-trade transfers of shares and concurrently

revised the management rules of the plan to further refine the incentive mechanism and implementation rules thereby strengthening the stability of the core team and providing long-

term development momentum thereof. Additionally to encourage the improvement of employees' professional competence and skills the company has established the Incentives for

Enhancing Employee Professional (Vocational) Qualification Education and Skills. This program provides learning incentives whereby cash rewards will be offered to employees who

were certified to be qualified for their operations business or other jobs during their employment.Diversity Equality and Inclusion

Shengda Bio-Pharm is committed to building a fair respectful and inclusive workplace ecosystem. Through diversified cultural platforms and innovative activities it fosters a healthy and

uplifting organizational atmosphere to make the company a community with shared value and a spiritual home for employees. The company has established a Fair Management Procedure

for Recruitment Training Development and Promotion which systematically ensures fairness throughout the entire process. Through measures such as open recruitment accessible

training fair promotion and reasonable facilitations the company guarantees equal and fair development opportunities for all employees.In the meantime the company has developed an Anti-Discrimination and Anti-Harassment Management Procedure explicitly encouraging and supporting all employees to preclude any

discrimination based on race religion region gender age language physical ability or other factors. Any violations once discovered will result in remedial measures such as personal

safety protection job adjustments professional psychological counseling and legal support. The company has established multi-channel complaint and reporting mechanisms including

a public hotline physical box for complaints and a cyber-based "CEO Direct Line" encouraging employees to report various violations openly or anonymously verbally or in writing. All

concerns and requests will be promptly investigated properly addressed with the results thereof fed back in a timely manner to form a closed-loop process of "acceptance-investigation-

accountability-feedback" and ensure the effective operation of the oversight mechanism and a zero-tolerance for various violations.Furthermore the company keeps on improving its employee care system focusing on thoughtful measures to support female employees assist employees in difficulty and promote

employee physical and mental well-beings so as to enhance their sense of fulfilment and organizational cohesion.The company stresses on protecting the rights and interests of female employees and follows the principle of equal pay for equal work and equal

development opportunities. It has enhanced its special protections for the pregnancy childbirth and nursing periods and regularly organizes care

activities for female employees such as spring outings free physical check-ups and holiday visits. In May 2025 for the physical and mental health of

its female employees the company's trade union in collaboration with the local street-level trade union and the county maternal and child health

Care for Female and family planning service center organized on-site free physical checkups for all female employees. Besides it also invited a physician from

Employees Tiantai People's Hospital to deliver a lecture on breast cancer prevention.

382025 Environmental Social and Corporate Governance Report

The company keeps on caring for the actual needs of employees facing hardship and has

established a support and care mechanism for the purpose. Through measures such as

visits and financial assistance it provides timely support to help employees ease their living

tension and enhance their confidence in work. In January 2025 the company organized a

care tour before the Spring Festival. The company's senior executives visited employees

Support for in financial difficulty as well as their relatives friends and neighbors presenting to them

Employees compassionate payments and daily life necessities to show the company's care. A total of

in Difficulty more than 30 households in need were visited.While stressing specially on protecting the rights and interests of specific groups the company is simultaneously advancing the development of a physical

and mental health support system for all employees. Mental health and emotional management are included as key priorities in daily care. Through health

promotion communication and counseling and resource support the company helps employees maintain a positive and stable working state. In 2025

by focusing on employees' physical and mental health management needs the company organized a series of activities including health consultations

Physical and and health knowledge lectures to further promote employees' health awareness and self-management capabilities and foster a warm and supportive

Mental Health workplace atmosphere.Support

Feel "Warmth of Shengda's Love on the Double Ninth Festival": A Heart-warming Event for Retired Employees to Visit the Company

On October 28 2025 Shengda Bio-Pharm sincerely invited its retired employees

to "return home" to participate in the heartwarming event for retired employees

themed "Warmth of Shengda's Love on the Double Ninth Festival — Joyful Gathering

in This Season." The event celebrated the golden autumn season by bringing

the former retired employees back together. The company invited the veteran

retirees to experience on the spot the corporate industrial upgrades and innovative

achievements allowing them to directly witness the new development of the

company. Through informal discussions and a park tour they renewed the profound

friendship within the "Great Shengda Family" and reinforced the continuity of the

corporate culture. This event not only honored the traditional virtue of respecting and

caring for the elderly but also served as a bridge for the spiritual heritage between

new and veteran employees. The valuable experience of the retired employees has

transformed into a source of inspiration for the company's development to further

strengthen the sense of organizational belonging and corporate cohesion.

39Social Responsibility

Shengda Bio-Pharm Organized a Care Tour and Outing

Maintain Sound Physical and Mental Health — Shengda

Event for Female Employees on International Women's

Bio-Pharm's Ongoing Health Care Initiatives

Day

On March 8 2025 International Women's Day to convey the company's care and In 2025 the company continued to improve its employee care system focusing

concern the company offered shopping benefits for its female employees and on safeguarding employees' physical and mental health by organizing a series

organized a one-day tour to Xikou Ancient Town and Fenghua Xuedou Mountain of activities such as health consultations and health knowledge lectures. The

(for voluntary sign-up) at the expense of the company. The event effectively health consultation services covered routine physical checkup consultations

conveyed the company's care and respect for its female employees enhanced on common diseases physiotherapy experiences mental health support and

their sense of fulfilment and happiness and fostered further a warm and health knowledge education etc. A team of professional physicians was specially

harmonious corporate culture. invited to provide one-on-one services on-site. The activities were conducted on a

rotational basis at different work locations as scheduled to ensure broad coverage

and easy access for employees. While safeguarding employee health these

initiatives effectively conveyed the company's care and were highly appreciated

and positively responded by employees.To further strengthen the closed-ring management based upon what has been achieved the company established the Procedure for Employee Satisfaction Management to extensively

gather employee opinions and suggestions. In June 2025 it conducted a satisfaction survey among all employees with a response rate of 97%. The results showed that employees had

generally high satisfaction with the work environment the company's prospects and the company's training system while there was a still room for continuous improvement in the

compensation incentive mechanism and attendance management system based on actual corporate conditions. In response to the feedback the company will continue to improve the

relevant areas by strengthening daily management reasonably arranging promotions and providing support for employees facing difficulties. It will promptly optimize measures to

continuously enhance the organizational cohesion.

402025 Environmental Social and Corporate Governance Report

Employee Information in 2025

Total number of active employees at the end of the period

1083 Person

Male Female ≤ 30 years old 30-50 years old

710 Person 373 Person 202Person 617Person

Structure of active Structure of active

employees at the end of employees at the end of

the period the period

(By gender) ≥ 50 years old (By age)

264Person

Financial

Technical Doctorate's degree Master's degree

24 Person 163 3Person 41 PersonPerson

Administration

Structure of active Bachelor's degreeStructure of active

89 Person employees at the end employees at the end of the period of the period 254Person

(By discipline (By education

composition) Senior high background)Sales

Production

42 school and below College degreePerson 765Person 580 Person 205Person

Employee social insurance and housing Incidents resulting in labor lawsuits labor

Rate of labor contract conclusion fund coverage arbitration and other employee dispute

100% 100% 0 Occurrence

Total number of employee training sessions Total hours of employee training Employee training coverage Total investment in employee training

440 Number 830 Hour 100% 12650 CNY

41Social Responsibility

Occupational Health and Safety Guard Work Safety

Occupational health and production safety are the cornerstones for safeguarding employees' life and health reducing The company has established and keeps on optimizing

accident risks and promoting the stable and sustainability of enterprises. Shengda Bio-Pharm strictly complies with a dual prevention mechanism for cascaded safety risk

relevant laws and regulations such as the Work Safety Law of the People's Republic of China Law of the People's Republic control and hazard investigation and management

of China on the Prevention and Control of Occupational Diseases and the Administrative Procedure of Contingency Plans centered on proactive risk control and early Intervention.for Work Safety Accidents. Internally it has formulated and implemented a series of management regulations including

the Responsibility System for Work Safety Responsibility System for the Prevention and Control of Occupational Hazards For cascaded safety control the company uses HAZOP

Management System for Safety Inspection and Hazard Rectification Management System for Work-Related Accidents (Hazard and Operability Analysis) approach to conduct

Management System for Labor Protection Supplies Safety Management System for Hazardous Chemicals and Safety systematic safety risk identification for production

Management System for Stakeholders. Its subsidiaries have also prepared relevant procedural documents to ensure processes equipment and facilities and operational

there workplaces meet the standards for safe production and protect employees from occupational hazards. During activities focusing on analyzing typical hazardous

the reporting period Shengda Bio-Pharm and its subsidiaries were certified to comply with ISO 45001:2018 for OHSE chemical risks such as fire explosion poisoning and

management systems kept improving its OHSEE management to effectively safeguard employees' life safety and their suffocation leakage and corrosion. Furthermore the

physical and mental health. company has quantified the risk levels dividing them

into four grades: major (red) significant (orange)

ordinary (yellow) and low (blue). Targeted management

measures are implemented for each grade—developing

Intensify Safety Accountability and exercising control across five levels: "engineering

technology maintenance operational control emergent

response and personal protective equipment"—to

The corporate chairman acts as the primary person responsible for work safety and is generally responsible for the ensure that major risks are controlled general risks are

company's work safety. The general manager assists the chairman in practicing the work safety and occupational health preventable and low risks are manageable.management system leads the coordination of cross-departmental work safety affairs and regularly supervises the

implementation of work safety responsibilities across various business segments. The company has established an HSE For hazard investigation and management the company

department (Safety Section) as a dedicated functional unit for occupational health and work safety. It employs full-time has established a comprehensive hazard inspection

safety management personnel who are responsible for performing daily safety management and guiding on work safety- network that covers daily team-level walk-around

related activities in various workshops. In the meantime production workshops and teams are required to perform inspection monthly company-wide comprehensive

their respective duties and collaborate efficiently to ensure the health and safety of all relevant personnel inside of the inspections seasonal and holiday-specific special

operational premises. inspections and in-depth detection conducted by third-

party professional institutions. The Identified hazards are

The company promotes the implementation of work safety responsibilities at all levels in accordance with the Work Safety rectified promptly with results thereof to be followed up

Responsibility System. It requires the signing of work safety responsibility agreements annually at all levels and for all as required.employees breaking down the safety objectives and responsibilities to every position—from the chairman and general

manager to frontline operators—and directly linking them to performance assessments.

422025 Environmental Social and Corporate Governance Report

Occupational Health Guarantee

Special Equipment The company is subject to an annual inspection of occupational hazard factors in

Apart from regular internal and external inspections the company maintains a the workplace by an external third party. It conducts evaluation of the current status

full lifecycle record for each piece of special equipment integrating the entire of occupational hazards every three years. It has taken corresponding occupational

process from design manufacturing installation inspection maintenance disease prevention measures to improve positively the working environment conditions

and modification to retirement to ensure the whole process traceability of for employees in the workplace and ensure the workplace meets the requirements in

equipment status. occupational health standards.The company organizes regular occupational physical check-ups for all employees

annually in accordance with the laws. The physical check-up covers major occupational

hazard factors such as dust noise and chemical toxins and at three key points i.e. before

during and after employment. The results of physical check-up are signed and confirmed

Key areas by the employees themselves for future reference.The company integrates DCS (Distributed Control Systems) GDS (Gas Detection The company establishes and continuously updates personal occupational health records

Systems) and video surveillance systems to establish an online monitoring for all employees who participate in occupational physical check-ups. The records

and early warning network covering key parameters and operational status to include occupational hazard exposure history results of occupational physical check-

enable real-time risk perception and advance warning. up occupational disease diagnosis and treatment treatment and recuperation status as

In the plant area the company implements a "standardized walk-around well as records on emergent response for occupational hazard accidents etc. to achieve

inspection" system defining inspection frequency routes and key checkpoints. dynamic management of employees' health status.The Inspection personnel use information terminals to upload inspection data

in real time to the dual prevention system to enable immediate warning and

closed-loop processing of abnormal conditions.Hazardous Chemicals In the meantime the company also provides personal protective

equipment fit for their positional risk exposure as required for their

As guided in the Work Safety Law of the People's Republic of China for operations such as noise-proof earplugs gas/dust masks acid and

Hazardous Chemicals to be effective in near future the company has alkali-resistant gloves and protective shoes air breathing apparatus

established a record on hazardous chemical consumption covering the entire etc. and has established records of distribution to supervise employees'

process from warehousing issuance and consumption to ensure traceability standard wearing.and precedent warning of risks thereof. Hazardous chemical warehouses are

run strictly to ensure the materials are segregated separated and isolated

effectively. Safety information such as MSDS (Material Safety Data Sheets) is

readily available at hazardous chemical storage sites to ensure workplaces

and safety facilities comply with national standards and conspicuous and

standardized safety signs for warning are installed and emergency rescue

equipment are in place.

43Social Responsibility

Safety Culture Building

The company adheres to the principle of "safety first prevention foremost" and is deeply In 2025

committed to fostering a safety culture. Through a comprehensive education and publicity

system that involves all employees and covers all areas it promotes a profound shift in

safety concept from "passive compliance" to "active prevention aiming to build a strong

safety defense line for production and providing guarantee for high-quality development.In 2025 Shengda Bio-Pharm and its subsidiaries conducted a total of 93 occupational Shengda Bio-Pharm and its subsidiaries attended by

health and safety-related trainings attended by 5230 trainees altogether. The training conducted a total of

covered production knowledge emergent response first aid knowledge etc. to effectively 5230 trainees

promote employees' understanding of and adherence to safety red line and behavior occupational health and

standards. 93 safety-related trainings

Empower Capabilities through Drills: Emergency Drill for Confined Spaces in the Fermentation Workshop

On May 29 2025 Tongliao Shengda organized an emergency rescue drill for confined

spaces in its fermentation workshop. The drill simulated a situation where an employee

in the fermentation workshop fell in faint due to an unexpected situation while

working inside a tank. After the accident occurred the on-site emergency response

process for confined spaces was quickly initiated. Each emergency response team

carried out rescue operations such as ventilation monitoring rescue and personnel

transfer in an orderly manner according to the established plan to fully demonstrate

the emergency response and rescue process for accidents in confined space.

442025 Environmental Social and Corporate Governance Report

Record of emergency plan drill for sudden spill fire and explosion accident in 2025 -

centralized training for each emergency team before drill

Occupational Health and Safety Status in 2025

In 2025

Employee fatalities from work- Work-related fatalities from

Total investment in work safety related accidents contractors Major work safety accidents

589.25 10k CNY 0 Person 0 Person 0 Occurrence

Total investment for work- Work-related injury insurance Total investment for work

related injury insurance coverage safety liability insurance Work safety liability insurance coverage

24.92 10k CNY 100% 15.8110k CNY 100%

45Social Responsibility

Supply Chain

Screening Admission

Management

In the supplier introduction phase the company applies For qualified suppliers the company divides them into

Shengda Bio-Pharm stresses highly on collaboration a rigorous a "360 ° Panoramic Assessment" mechanism. Class A B and C based on the significance of the raw

with industry partners and keeps on improving its supply Along with reviewing supplier qualifications and product and auxiliary materials they are to supply. It thoroughly

chain risk management. It actively practice responsible quality it uses public channels—such as environmental communicates its requirements and standards in areas

procurement to advance the carry-out of sustainable penalty records and credit survey systems—to evaluate such as ethical conduct confidentiality environmental

supply chain requirements. The company is committed supplier's performance in environmental compliance and protection hazardous substance control OHSE and labor

to establishing long-term stable and sustainable creditworthiness. Additionally the company assesses ESG rights. Suppliers are required to sign the POs Supplier Code

partnerships with suppliers and other value chain performance through questionnaires covering occupational of Conduct and Supplier's Anti-Bribery Commitment all

stakeholders. As guided in the Management Procedure health and safety environmental protection labor rights of which shall contain provisions related to environments

for Procurement Operations Management Procedure and business ethics. Suppliers that fail the assessment are labor and human rights. All suppliers are expected to

for Bid Solicitation and Regulations and Objectives for advised to make improvement and remedy. Those whose strictly adhere to and comply with these standards.Sustainable Procurement Management the company's remedy was accepted will be included in the name list of

Procurement Dept. and Quality Dept. etc. have organized qualified supplier; Otherwise they are disqualified from

various management departments to work collaboratively becoming approved suppliers. Under equal conditions

to ensure the effective implementation of sustainable the company will cooperate among others with suppliers

supplier management across all levels. that have established ESG management systems and are

actively engaged in ESG management practices.Sustainable Procurement

The company has incorporated the sustainable and Evaluation Classification

responsible concept in the entire supplier management

process to establish a full-lifecycle green supply chain Annually relevant departments conduct an online Based on the results of assessment the company requires

management system covering admission collaboration rating for cooperative suppliers dividing them into four and assists suppliers in rectifying and improving non-

evaluation and exit: levels based on their rating:"Very Good" "Good" "OK" compliant items supporting their capability enhancement.and"Poor" . Additionally the company performs on-site Suppliers that were rated as "Poor" in the annual online

audits every two years for Class A suppliers of key raw and assessment or failed the on-site audit will be removed from

auxiliary materials covering aspects such as quality and the supplier pool and the cooperation with them will cease.environmental performance etc.Based upon development and continuous improvement of a sustainable supply chain the company actively encourages and supports

suppliers in establishing and enhancing their own ESG management systems. In 2025 100% of the company's raw and auxiliary material

suppliers signed procurement contracts containing provisions relating to requirements for environment labor and human rights. 70% of

the suppliers participated in corporate social responsibility and on-site environmental audits. Besides 20% of suppliers were certified to

comply with ISO 45001 standard and 35% of the supplier were certified to comply with ISO 14001 standard.

462025 Environmental Social and Corporate Governance Report

Risk Management for Supply Chain

Supply chain risk management is essential in stable raw material supply product delivery and quality compliance. Shengda Bio-Pharm has established a systematic supply chain risk

management system. Through ongoing monitoring of national policies and industry trends improved communication with suppliers review of supply chain data over the past three years

and collection of market reports the company analysed and evaluated relevant risk points to estimate their potential impact and likelihood of occurrence. It also put efficient and viable

countermeasures in place to significantly enhance its supply chain stability.Empower Supplier

The company has identified risks associated with suppliers concentration for portions of

Minimize Cooperation

raw and auxiliary materials. To address this the company expands its pool of alternative

single source

suppliers through multi-channel sourcing and comparison actively supports small and

supplier

medium-sized enterprises and local suppliers to diversify its supplier identification and Active collaboration and mutual empowerment with

dependency

gradually reduce supply-side concentration. suppliers are critical to ensure stable operations and long-

term sustainability of the supply chain. At the beginning

of the year Shengda Bio-Pharm identified raw materials

and related suppliers with deep cooperation ties and

conducted annual strategic cooperation negotiations in

The company has improved its core supplier management through long-term strategic advance to establish the cooperation goals and resource

Ensuring

cooperation agreements to establish deeper relationships. It strategically plans its own allocation orientation. For suppliers with financial or

Stable

safety inventory alongside supplier reserve inventory to create a flexible supply system technical difficulties during the cooperation the company

Supply

and ensure the continuous supply of key raw and auxiliary materials even under provides key support through financial assistance and

extreme conditions. technical coordination to enhance supplier capabilities

and further secure the stable supply of key raw and

auxiliary materials.The company closely monitors market trends for key raw materials. Through

Stabilize

analysing and forecasting the price movements it flexibly employs strategies such as

cost

bulk purchasing with fixed price and strategic stockpiling to effectively hedge against

fluctuations

the risks from market price fluctuation to achieve refined cost control across the

entire procurement chain.

47Social Responsibility

Financial Through supply chain finance mechanisms such as prepayments and shortened payment Efficient Empowerment:

Support cycles the company supports suppliers in stocking up on raw materials required for production

to ensure the smooth execution of production plans. Collaborate with Relevant

Stakeholders to Advance Supply

Chain Capacity Building

Experts from Shengda Bio Hangzhou Technology Research Institute and production

Technical departments were assigned to supplier sites to provide professional guidance and technical The company continuously enhances the professional

Guidance empowerment help suppliers improve their capacity and processes and enable mutual capabilities of its internal teams and supply chain

technical advancement. partners through organized training and experience

sharing. In 2025 the company invited industry experts

The company is actively exploring collaboration with raw material suppliers service providers to conduct specialized training for production and

Green construction contractors and waste disposal entities to implement greenhouse gas emission technical personnel on the properties of special raw

Collaboration reduction initiatives. These include reducing packaging consumption and promoting waste materials and their associated reaction mechanisms.recycling to lower the overall environmental impact from the supply chain. Additionally it engaged in joint discussions and

continuous problem-solving efforts with suppliers

to improve the efficiency of raw material utilization

The company continues its efforts to promote an open and inclusive supply chain cooperation increase the number of reuse cycles for special raw

Openness and model encouraging participation from suppliers with diverse backgrounds and expertise. While materials and enable the recovery and reuse of

Diversity ensuring compliance with legal and regulatory requirements it provides appropriate support valuable by-products. This approach achieves a

to businesses owned by women and ethnic minorities to build in a stepwise manner a mutually synergistic effect of "resource conservation" alongside

beneficial and win-win supply chain ecosystem based on inclusiveness and cooperation. "cost reduction and efficiency improvement."

Product and Service Safety and Quality

The company regards the safety and quality of its products and services as the foundation of its operations and management. It keeps on improving its quality management system

and enhancing whole-process control to ensure the stability and reliability of its product and service. To protect against the quality risks the company has improved its mechanism for

product recall and problem resolution established open channels for customer complaints and feedback to continuously optimize its product and service performance through customer

satisfaction management. Through systematic governance and continuous improvement the company has achieved effective management of the risks related to its products and services

and improved customer experience while solidifying the foundation for sustainable business development.

482025 Environmental Social and Corporate Governance Report

Governance

T h e co m p a n y ke e p s o n p r o m o t i n g t h e

development of its quality governance system Tier Organizational Structure Main Roles

and has established a multi-level governance 1. Implement the highest-level supervision and accountability for product quality and safety

framework comprising "strategic decision- and review the effectiveness of the quality and safety management system.m a k i n g - c o m p r e h e n s i v e m a n a g e m e n t - 2. Deliberate on and approve the product quality and safety strategies policies indicators and

coordinated implementation-operational targets as well as their special budgets and resource allocation.execution." Under the framework the BOD and

BOD 3. Review reports and response plans for major quality and safety incidents.the Strategy Commission fulfill the functions

of strategic decision-making and oversight 4. Approve major investment decisions related to quality and safety (such as equipment

steering the direction of quality. The Quality upgrading system certification etc.)

Management Dept. acts as a hub and is 1. Assess and manage the impacts risks and opportunities related to quality and safety

responsible for whole-process coordination including those on the company's brand value and market competitiveness.and the formulation of standards. The Sales 2. Formulate a medium and long-term strategic plan for product quality and safety of the

Dept . engages in deep col laborat ion to company.precisely align market demands with quality

benchmarks. The frontline operators rigorously 3. Oversee the development of the product quality and safety management system;

implement operational procedures to solidify Strategy Commission 4. Review the disposal plans for product recalls and major quality accidents.the foundation of quality and safety. Through 5. Provide strategic advice and decision-making support on product quality and safety to the

clearly defined responsibilities at each level BOD.and efficient coordination mechanisms the

company not only ensures the product quality 1. Formulate annual quality and safety objectives and action plans and coordinate the quality and

consistency and safety but also transforms safety work of various departments as a whole.its quality strengths into the cornerstone for 2. Supervise the operation and continuous improvement of the quality management system;

customer trust which lays a solid foundation for Sustainability

the sustained enhancement of brand value. Leadership Team 3. Review the management polices and standard operating procedures related to quality and

(Including head of the safety.Quality Management

Dept.) 4. Internal and external quality audits and management reviews within the organization;

1. Carry out the identification assessment and monitoring of quality risks;

2. Implement the full life cycle quality management of products and carry out daily quality

control inspection and test.

3. Carry out supplier quality audits and management;

Product Quality and

Safety Team 4. Handle customer complaints and conduct customer satisfaction management.(Quality Management 5. Organize the investigation of quality accidents and implement corrective and preventive

Dep) measures.

6. Organize and carry out quality training for front-line employees.

49

Decision-making tier Management tier Execution tierSocial Responsibility

Strategy

Based on the current competitive landscape of the industry and the dynamics of supply and demand within the industrial chain the company has conducted a comprehensive strategic review and assessment

of the safety and quality of its products and services. Following an in-depth analysis of the macro environment industry trends and its own operational status the company has systematically evaluated the

potential risks core opportunities and their key impacts. On this basis it has defined forward-looking and feasible countermeasures to provide a clear guidance in product quality guarantee.Analysis of Risks Opportunities and Countermeasures Related to Main Products and Services

Impact

Type Detained Indications Impact Analysis Impact Extent Countermeasures

Cycle

Risks

Administrative penalties and fines damage to

Policy and Failure to promptly follow up on Medium- mechanism for monitoring and updating regulationscorporate reputation

regulatory regulatory updates expiration of Corporate operation and long- Conduct regular internal compliance audits.risks relevant permits/licenses etc. Restricted market access products unable to be term

launched or sold Strengthen communication with regulatory authorities

Resulting in unstable product quality and failure to Medium- Establish a strict supplier quality audit mechanism and implement batch-by-

Supply chain Unqualified raw material deliver on schedule;suppliers and occurrence of Upstream of value and

batch inspection of raw materials.risks quality problems; Damage to customer relationships and harm to chainCorporate operation short- Implement the supply chain transparency and traceability system.brand reputation; term Sign quality assurance agreements with suppliers etc.Establish a quality management system covering the entire product lifecycle.Improper control over production The product quality problems occurred triggering a Production and product recall. Corporate operation

Medium-

process and non-standard and long- Improve the product recall procedure and conduct regular drills.operation risks inspection and test; Loss of customer trust and market shares; Downstream of value chain term Strengthen the qualification training and operational standards for

employees.Opportunity

Enhance Increased product added value leading to higher

market shares Increased demand for high- profit margins Corporate operation Medium-

Establish a quality culture and brand story

through quality profile products and quality and long- Invest in advanced production and quality test devices;premium Enhanced market pricing power and expanded Downstream of value chainupgrading termbrand influence Develop high-end product lines

Opportunities Expand market space and increase revenue from Procure internationally recognized certifications with authoritative approval

for access to Procure international quality overseas markets. Corporate operation Medium- as well as relevant certifications required by export countries.international certification and complete export and long-qualifications. Enhanced risk resistance capacity and Downstream of value chainmarkets term

Establish an overseas quality service network.internationalization of the brand Participate in international exhibitions and industry exchanges.

502025 Environmental Social and Corporate Governance Report

Impact Risk and Opportunity Management

Products and services serve as the foundation for an enterprise's survival and development as well as the core guarantee of product competitiveness. To this end the company keeps on improving its quality

improvement and compliance assurance centered on products and services promoting the development and maintenance of the quality management system and steadily enhancing the customer trust.During the reporting period products of Shengda Bio-Pharm and its subsidiaries have all been certified to be consistent with ISO 9001:2015 Quality Management System. Based on its product characteristics

and business needs the company has procured certifications including the ISO 22000 Food Safety Management System BRC International Food Safety Standard FAMI-QS European Feed Safety Management

System Written Confirmation for APIs export to the European Union (WC certificate) Good Manufacturing Practice (GMP/GMP+) and the U.S. Food and Drug Administration (FDA) certification to ensure its

product quality control by applying high standards and strict requirements.Quality Management and Control

To defend further the product safety and quality line the company has established a dynamic regulatory monitoring and compliance response mechanism. By maintaining a real-time updated list of regulations and

standards the company accurately identifies and promptly carries out the new regulatory requirements. It has formulated a series of control procedures including the Quality Risk Management System Product

Quality Archives Management System as well as internal audit analysis and evaluation product release deviation remedy and product recall to ensure the whole-process coverage for compliance awareness and

operational standards.In the meantime the company and its subsidiaries conduct monthly quality analysis involving the company's management and heads of relevant functional departments. A systematic analysis is carried out on

the quality of raw auxiliary materials and finished products including product quality performance and non-conforming products. Besides statistics and summaries are compiled regarding the inspection of utility

systems stability studies implementation of CAPA (Corrective and Preventive Actions) completion of annual and monthly plans acquisition of licenses and certificates etc. to form a monthly quality report and

ensure the orderly operation of the quality system.To further strengthen its quality risk management the company and its subsidiaries have regularly organized quality seminars (quarterly/annually) for special discussions on various topics (including but not limited

to workshop process control capabilities production deviations and abnormal events complaints product returns etc.). These moves helped various departments draw lessons from past issues to effectively

address quality incidents. During the process in-depth analysis was conducted on product quality anomaly trends with comprehensive assessments carried out from the perspectives of personnel machinery

materials methods and environment. This enabled timely adjustments in personnel training equipment maintenance supplier management and other areas while facilitating the sharing and exchange on root

cause analysis and corrective/preventive measures and has effectively improved the quality risk identification and closed-loop management capabilities. Specific quality improvement measures include:

In 2025

Initiate proactive change Review and clarify supplier Establish customer files Exercise cascaded risk Shengda Bio-Pharm and its subsidiaries experienced

management to extend quality agreement to identify differentiated control for test items

product re-test periods/ requirements and technical requirements through in-depth regulatory

expiry dates and maximize acceptance standards to of different customers benchmarking and risk NOmajor safety or quality liability accidents

product commercial value extend quality control providing a decision-making assessment to reduce or related to products and services.while strictly maintaining upstream to the source; basis for product upgrades eliminate unnecessary tests

compliance; and production planning; and significantly improve

operational efficiency while

ensuring product safety.

51Social Responsibility

Multidimensional Efforts Made for Whole-staff Governance: Successful Conclusion of the 2025 Quality Month Activity Campaign

During the period of September to October 2025 by taking the "Quality Month" as an opportunity various subsidiaries devised and implemented a series of themed activities featuring novel formats and

rich connotations. A strong quality-focused atmosphere was created through measures such as hanging banners screening videos and holding fun garden parties while the substantive connotation

was deepened through quality analysis meetings advanced team evaluations specialized training across various systems and the collection of "Golden Quality ideas." During the campaign companies

gathered numerous rational suggestions from the front line. After professional evaluation and screening some outstanding "Golden Ideas" have been implemented not only addressing difficult quality

issues but also effectively solidifying the foundation for quality management with whole-staff participation.Product Recall

According to relevant documents such as the Procedure for Early Warning and Product Recall Control and the Regulation for Drug Recall Management the company's product recalls typically commence with

problem identification and risk assessment. A systematic analysis of product quality or potential safety hazards is conducted to determine whether a recall procedure needs to be initiated and the severity of the

product safety hazards is graded for differentiated processing. After confirming the necessity of the recall the recall decision-making mechanism will be implemented promptly defining clearly the scope of recall and

the plan for execution and relevant departments are to be organized to collaborate on the execution and communication of the recall. Upon completion of the recall the effectiveness of the recall will be evaluated to

identify the root cause behind the problems define the remedy to be taken ensure sustainable improvement of the quality management system and prevent re-occurrence of similar problems.After a product was recalled the quality departments of each company are required to submit an investigation and evaluation report recall plan and notice for recall to the local food and drug supervisory

administration for filing. During the implementation of the recall the progress of the same must also be reported to the local food and drug supervisory administration in a timely manner. To effectively ensure the

compliance and effectiveness of the product recall system the company and its subsidiaries have established an annual simulated recall drill mechanism. By setting different triggering scenarios the emergency

response speed information transmission accuracy and decision-making process efficiency of the product recall system are comprehensively tested. After the drill the deviation remedy and CAPA (Corrective and

Preventive Action) procedures are immediately initiated to facilitate identification and deficiency remedy by the system ensure practical capability of the recall system is verified and consolidated continuously and

risks are controlled quickly orderly and efficiently for true recall incidents.In 2025

From Identification to Recall: Simulated Recall Exercise for Products in Silver-Elephant

Shengda Bio-Pharm and its subsidiaries had

NOcases where sold or shipped products had On December 29 2025 the Silver-Elephant a subsidiary of the company conducted a simulated recall test for its product to

to be recalled due to safety and health verify the feasibility and effectiveness of product recall management. The simulated recall was successfully completed with all

issues. departments actively cooperating throughout the process and successfully completing the recall within a relatively short period

of time. The entire recall drill proceeded according to the predetermined plan to verify the operability and effectiveness of the

"Withdrawal and Recall Control Procedure" in the quality management system. This demonstrates Silver-Elephant's high ability to

recall its faulty products and its orderly management of product traceability.

522025 Environmental Social and Corporate Governance Report

Processing Customer Complaints

In 2025

To improve the quality of customer service and optimize the allocation of service resources the company has formulated the Regulation for

Product After-Sales Service and relevant procedural documents. It conducts classified evaluation of customers to achieve precise response to

customer needs and daily refined management so as to ensure customer experience and build an efficient service system.The company strictly follows a 24-hour response mechanism for customer inquiries across all channels to ensure all calls letters and visits Shengda Bio-Pharm and its subsidiaries received a total of

receive a response within the specified timeframe. In case of any special cases that prevent timely responses the company will proactively

explain the reasons to customers and seek their understanding. To address customer complaints the company takes customer feedback

as the starting point. The marketing department receives and forwards the feedback to the quality department which determines whether 52customer complaints

the complaint is valid and assigns a classification level. It then collaborates with relevant departments to conduct a complaint investigation

and impact assessment identify the processing measures and establish corrective and preventive actions to drive implementation of all of which were responded to handled and closed on time

improvements. Once completed a product quality information feedback report is generated and communicated to the customer through achieving a

the marketing department followed by follow-up responses until the customer is satisfied and the complaint process is closed. If the

customer is dissatisfied with the outcome the process re-enters the analysis and improvement phase to ensure the issue is fully resolved 100% customer complaint resolution rate

thereby achieving closed-loop management and continuous improvement for customer complaints.Illustration of Customer Complaint Processing

Relevant Departments Efficient Collaboration for

Reason Analysis and

Remedy Quality Assurance: Establishment

of a Business Communication

Mechanism for Key Customers

To ensure effective quality management at the customer

side for a key customer's business the company

established a dedicated business communication

team to facilitate interaction between the customer

and the company and interface with major functional

departments such as production quality and sales.During collaboration and communication with the

customer issues are identified and resolved promptly.In the meantime reasonable suggestions from the

customer are adopted to leverage strengths and address

weaknesses and resolve issues arising from the process

from product production to transportation to the

Customer customer's destination.dissatisfaction

53

Closeout of Customer

Satisfaction Process

Marketing Dept.Feedback

Quality Dept. prepares

an information feedback

slip on product quality

Executive Departments

Quality Dept.Reason analysis and

reme

Marketing Dept.Feedback

Customer

complaintSocial Responsibility

Customer Satisfaction

The company regards customer satisfaction as an

important indicator for measuring product quality and

service level and has formulated a "Customer Visitation

and Satisfaction Survey Procedure" stipulating the

customer satisfaction surveys are conducted annually and Price Delivery Special Freight quality Time-bar for

targeted remedy and improvements are made based on Competitiveness promptness demand and labeling information

customer feedback. response code updatings

The company's 2025 annual customer satisfaction

survey was under way orderly. For the annual customer

satisfaction survey in 2024 the company distributed a

total of 80 questionnaires and received 64 valid responses To this end the company has formulated and implemented a series of remedy as follows:

with a response rate of 80%. The data shows that overall

customer satisfaction is high: 56 questionnaires received a

high score of "very satisfactory" ( ≥ 90 points) accounting

for 87.5% of the total; 8 questionnaires received a score Continuously promote process innovation and procurement model upgrades to fully tap

of "satisfactory" ( ≥ 80 points) accounting for 12.5% of Pricing into cost reduction potential; establish a market price monitoring mechanism to flexibly strategy

the total with an excellence rate of 100%. Based upon its optimization adjust sales strategies; implement differentiated price support policies for core customers

in-house check and sorting-out and external feedback to enhance overall competitiveness.the company will consolidate what it has achieved and

promote in the following aspects:

Strengthen capacity assessment and balance supply and demand. The sales side needs

For the annual customer satisfaction survey in 2024 Improvement to scientifically accept orders based on actual production capacity; the production side

in delivery

capability needs to establish a safety stock warning mechanism to ensure timely delivery of key

orders.the company distributed a total of

Logistics Implement supplier lifecycle management strengthen audits and high-standard 80 and assessments of upstream packaging material suppliers; establish a preferred logistics questionnaires packaging supplier screening mechanism select optimal partners through multi-dimensional

quality comparison and develop protective plans for key transportation difficulties to ensure

control

received with a response rate of "zero defect" delivery of goods.

64valid responses 80%

Besides each subsidiary also conducted their annual customer satisfaction survey in 2025 and the results showed that the

overall customer satisfaction rate of each subsidiary reached more than 95%.

542025 Environmental Social and Corporate Governance Report

Responsible Marketing

The company's business model is customer oriented and in the process of cooperation it consistently upholds the principle of "health first" to integrate the concept of responsible

marketing into its core management. The company is strictly within the bounds of regulatory compliance and has formulated and implemented internally relevant documents such as the

Regulation for Product Marketing Management and the Management Procedures for Export and Domestic Product Labeling to ensure its product labeling is science-based and compliant

and marketing promotions are authentic and professional. By building a "compliant scientific and transparent" marketing ecosystem the company is committed to achieving business

growth setting a responsibility benchmark within the industry while safeguarding the public security.Indicators and Targets

The company follows thoroughly the principle of "quality first" and takes product quality and customer satisfaction as its In 2025

ultimate target. It has established a series of quality objectives and linked them to the performance-based compensation

of relevant departments and the management tier. In 2025 Shengda Bio-Pharm and its subsidiaries achieved the following

quality objectives and will continue to improve its quality management performance.

0 major quality complaints

The right-at-the first-time acceptance

rate of the product is

100%

The product factory qualification rate shall be

100%

Customer satisfaction is over

90%

55Social Responsibility

Data Security and Customer Privacy Protection

Effective information security management constitutes the foundation for mutual trust and long-term cooperation between Shengda Bio-Pharm and its partners customers and

employees. The company's business model targets corporate customers involving no collection storage or processing of any personal consumer privacy data. Therefore it stresses on

managing the security and stability of the IT systems. The company strictly complies with relevant laws and regulations such as the Cyber-security Law of the People's Republic of China

and the Data Security Law of the People's Republic of China. It has formulated the Regulations for Enterprise Information Security Management and Procedure for Information Security

Risk Assessment to benchmark the requirements for Class III network security protection certification. It has established security mechanisms covering data encryption and access control

improved the protection of key systems and data assets and provided a solid guarantee for the safe and stable operation of IT systems and business. In 2025 the company completed the

upgrade of its security capabilities updating and configuration of security devices such as firewalls behavior management systems and bastion hosts and has simultaneously optimized

its server security policies to further uplift the boundary protection and access control capabilities.Data governance Technical protection Hierarchical walk-around Drill dissemination and inspection roll-out

For the data governance system The company's servers adopt an The company conducts regular In 2025 the company deeply

the company has continuously architecture where application inspections of infrastructure participated in two practical

promoted the construction of a data servers and data servers are such as computer rooms and offensive-defensive drills. Relying

hub and established an integrated deployed separately ensuring that cabinets at least twice a year and on its robust defense system it

capability for data cleaning terminal computers cannot directly carries out random inspections successfully withstood external

transformation integration and access the data servers through for key security devices such as attacks and achieved "zero

modeling. It rendered support network isolation and permission firewalls and internet behavior breach." The company organized

to master data management to control. In the meantime all management systems to promptly special information security

ensure internal and external data administrator operations are identify and rectify potential risks. training session for all employees

consistency while reserving data uniformly authenticated and In 2025 the company established established a regular security alert

desensitization function to meet audited through a bastion host an information security team to mechanism and continuously

the requirements for privacy to strengthen the control over conduct a comprehensive risk delivered cyber-security warnings

protection compliance. operation and maintenance assessment of the corporate and protective knowledge through

behaviors. Besides the company information assets. The team multiple channels to solidify the

has closed high-risk ports related to identified and mitigated the ideological defense line among

ransom-ware attacks to reduce the risks exposed to two assets and employees.risk of intrusion and propagation. generated a Report on Information

Security Risk Assessment.In the meantime the company strengthened information security control by signing confidentiality agreements with customers and operating local dedicated terminals to further mitigate

the risk of data leakage. In 2025 Shengda Bio-Pharm and its subsidiaries experienced no data security incidents.

562025 Environmental Social and Corporate Governance Report

Innovation Driven

The company remains committed to innovation as the Organizational

core driver of high-quality development continuously Tier Structure Main Roles

increasing its R&D investment systematically advancing

R&D capability building and refining its technological 1. Deliberate on and approve the company's innovation strategy and medium and long-term R&D plan and supervise the implementation of the innovation strategy.innovation system. By focusing on overcoming 2. Deliberate on and approve the commercialization paths and market strategies for innovative

key technological difficulties and facilitating the businesses.transformation of achievements the company steadily 3. Deliberate on and approve the intellectual property strategy and the core technology protection plan.has improved its independent R&D capabilities and 4. Supervise the development of the R&D team and the retention of core talents and review the incentive

promoted the application of innovative results in business BOD plans for R&D personnel.operations. At the same time the company enhanced 5. Examine and approve major R&D investment projects and merger and acquisition decisions6.its innovation incentive mechanisms and intellectual Approve the R&D investment budget and the target ratio of R&D investment to revenue.7. Integrate innovation indicators into the company's overall strategic objectives.property management framework unlocking employee

creativity and safeguarding innovation outcomes so as to 1. Assess and manage the impacts risks and opportunities associated with R&D and innovation

drive continuous improvement in its core competitiveness including those on the company's brand value and market competitiveness.and long-term sustainability. 2. Formulate an innovation development strategy and technology roadmap for 3 to 5 years and plan the

layout of innovative businesses and product pipelines.

3. Review the approval of major R&D project initiation and resource investment including talent

Strategy introduction plans.Governance Commission 4. Assess intellectual property risks and technological developments of competitors

5. Deliberate on the risks and returns of major technical cooperation and authorization.

The company regards innovation as the core engine 6. Provide recommendations on innovation strategies and support for major decision-making to the BOD.of its development and has continuously optimized

its R&D innovation governance framework to build 1. Formulate annual innovation goals and key performance indicators and coordinate innovation

a highly coordinated management matrix to ensure collaboration among various departments.highly efficient synergy for "strategic decision-making 2. Establish and improve the innovation management system and processes as well as the specifications Sustainability for R&D project management.strategy execution and operation monitoring". Within Leadership Team 3. Establish an innovative performance evaluation and incentive mechanism;

this framework the BOD and the Strategy Commission (Including 4. Supervise the annual R&D plans and project progress as well as the implementation of R&D budgets

focuses on top-level design exercising strategic decision- directors of and project progress.making and supervisory functions. In the meantime the the research 5. Supervise the application and protection of intellectual property rights.Research Institute serves as the hub for R&D strategy and institute) 6. Organize external technical cooperation and joint research and development projects.implementation and tackles key technical challenges. By 1. Carry out experiments and development for specific research and development projects.relying on the framework the company has established 2. Carry out the identification assessment and response to technical risks.a tiered and standardized R&D review mechanism 3. Identify patentable technologies and innovative areas conduct patent searches and infringement risk

that integrates technology decision-making resource R&D and analysis.allocation and management oversight. This ensures Innovation Team 4. Cooperate in research and development with third parties such as external scientific research

closed-loop management across the entire R&D lifecycle— (Research institutions universities and suppliers.from initiation to delivery—thereby achieving dual Institute) 5. Carry out learning and training on new technologies and new methods;

enhancement of both innovation efficiency and quality. 6. Actively explore plans for process improvement and technical optimization.

57

Decision-making tier Management tier Execution tierSocial Responsibility

Strategy

The company has established a comprehensive lifecycle risk and opportunity identification and assessment system for R&D innovation. During the project initiation phase multi-

dimensional evaluations are conducted from four perspectives: technical feasibility regulatory compliance commercial market viability and resource availability and timeline. Throughout

the R&D process leveraging key milestone reviews and a major change review mechanism the company dynamically monitors and updates progress data and external environmental

changes—enabling precise identification of core risks such as R&D delays technological uncertainties and cost overruns. Simultaneously the company keenly captures differentiated

competitive opportunities arising from policy trends (such as green and low-carbon initiatives) shifts in customer needs and technological breakthroughs. By establishing a risk list

tracking and closed-loop management mechanism the company achieves dynamic resource allocation adjustments and scientifically prioritizes projects to ensure that R&D initiatives

consistently maintain both compliance and commercial viability.Analysis and Responses to Major Risks and Opportunities Related to R&D and Innovation

Impact Impact

Type Detailed Indications Impact Analysis Countermeasures

Extent Cycle

Risks

* The ongoing projects and technologies under

research cannot meet the dynamic compliance Medium- * Establish a mechanism for the monitoring and updating of laws and Dynamic changes in industry requirements. Corporate regulations.Policy and regulations and standards operation and short

regulatory risks * Adjustment of the research and development term * Strengthen communication with regulatory authorities

direction results in waste of resources.Low efficiency and prolonged * Establish a full life cycle management system for research and

research and development * Delayed product launch and missed market development projects and define key milestones.cycles due to decision- window opportunities

making process registration Corporate Ditto * Establish cross-functional R&D teams to mobilize resources Risk of R&D and approval procedures * R&D costs overrun and return on investment operation efficiently.cycle delay resource allocation and decreases * Introduce professional talents and tools and establish a rapid

other factors. decision-making mechanism for projects.* Establish a technical intelligence monitoring system to strengthen

Replacement by emerging * The existing products are backward in technology

the tracking and pre-research of cutting-edge technologies.Risk of technologies and the shift and the R&D investment has depreciated. Corporate Medium- * Implement multi-path technical reserves and conduct regular

technological of industrial technological and long-* The market share has declined and the industry operation term technical portfolio evaluations.route paradigms position has been shaken.competition * Establish an open innovation network and maintain technical flexibility and adaptability.* Establish a linkage mechanism between market insight and

Insufficient market demand * -Serious waste of resources and high costs of research & development

research changes in market strategic adjustment. Corporate Medium-

Risk of Deviation demand or errors in the and long- * Implement a phased review mechanism for research and * The product has low market acceptance resulting operation

in R&D Direction selection of technical routes. term development projects.in the loss of genuine market opportunities.* Carry out multi-scheme demonstration and technical pre-research

582025 Environmental Social and Corporate Governance Report

Impact Impact

Type Detailed Indications Impact Analysis Countermeasures

Extent Cycle

* Market promotion is hindered and

The research and competitiveness declines. * Consider industrial feasibility during the research and development Risks in the

transformation development achievements Corporate

Medium- phase and implement process verification and optimization.cannot be effectively * Consider industrial feasibility during the research of research and operation

and short-

and development phase and implement process term * Strengthen collaboration between the R&D and production

development commercialized. verification and optimization. departments

achievements

* Establish an equity/option incentive plan or a key talent retention

Insufficient mechanisms * Disruption or delay of ongoing projects and plan.for talent attraction and discontinuity in technological inheritance Corporate Medium-

The risk of brain incentives along with a operation and long- * Establish a mentoring system and talent pipeline training and * Weakened innovation capacity and loss of

drain in R&D shortage of high-end talents. term provide continuous learning and growth opportunities.technological advantages

* Foster a sound scientific research culture and environment;

* Failure to effectively protect research and * Establish a comprehensive intellectual property management

development achievements results in the loss of Corporate system

Imperfect patent layout competitiveness. operation Medium-

Intellectual or suspected patent and long- * Implement patent early warning and build a patent defense infringement * Faced with infringement lawsuits and Downstream property risks term portfolio.compensation claims the company's reputation of value chain

has suffered damage. * Regularly carry out intellectual property training and audits.Opportunity

* Reduce production costs and resource wastage. * Explore emerging technology sectors invest in advanced equipment

and nurture interdisciplinary talents.The application and * Create a brand-new product category and Medium-

Opportunities breakthrough of new enhance the advantages of sustainability. Corporate operation and long- * Carry out in-depth industry-university-research cooperation with for technical technologies term external third parties.innovation * Build technological barriers and lead industry transformation. * Apply for a core technology patent

* Comply with future regulatory requirements and

Increased demand for Enterprise * Research and invest in green technologies and processesreduce environmental impact

green and low-carbon operation Medium- * Establish a product life cycle assessment system

Green and development and policies * Open up green markets and gain long-term Downstream and long-

sustainable laws and issue of regulations competitive advantages. of the value term * Develop sustainable raw material substitution solutions.opportunities for sustainability; * Attract ESG investment chain * -Build a circular economy business model

59Social Responsibility

Impact Risk and Opportunity Management

Shengda Bio-Pharm places innovation-driven growth at the core of its strategy to achieve high-quality development and strengthen its competitive edge. Focused on its core businesses—

vitamins and food additives—and building on decades of technical expertise it is continuously refining product formulations manufacturing processes and quality control systems while

accelerating the shift toward automation and digitalization in production. These efforts are steadily enhancing the company's long-term sustainability.Sustainable Innovation Achievements

The company's R&D and innovation strategy is guided by three core principles: lean production resource efficiency and health and safety. It has put in place internal governance

frameworks including the Regulations for R&D Project Organization and Management and Regulations for R&D Input Accounting to improve operational efficiency and the health profile

of its products while staying firmly committed to green low-carbon and sustainability. By integrating environmental compliance and energy conservation in every stage of technology

R&D the company has not only strengthened its defenses around product safety but has also accelerated its shift toward an eco-friendly growth model creating shared value for both the

business and the environment.In the field of microbial manufacturing the company In the field of chemical synthesis and process In the food compounding and solution business

has continuously improved the product output level development the company continuously conducts the company focuses on developing natural and

per unit of raw material and energy consumption process optimization research by focusing on efficient biological preservative and fresh-keeping

through high-throughput strain selection synthesis routes of key products and intermediates. technologies reducing the use of traditional

fermentation process optimization and medium By improving reaction yields shortening process chemical preservatives helping downstream

improvement. While meeting product quality flow and reducing by-product generation the customers enhance the health attributes of their

requirements it has reduced resource consumption company aims to minimize raw material loss products and responding to consumers' concerns

lowered energy consumption per unit of production and energy consumption. Simultaneously the about food safety and sustainable consumption.decreased discharge of wastewater and exhaust and company actively promotes research on continuous

alleviated environmental tension. transformation of conditional processes. While

ensuring product quality and safety it aims to

enhance the stability of the production process and

resource utilization efficiency thereby reducing the

overall energy consumption per unit of product.

602025 Environmental Social and Corporate Governance Report

R&D Capability Development

Schedule of Sustainable Innovation Achievements

The company regards talent as the primary resource for

ESG Features Innovation Achievements in 2025 innovation with a well-established R&D team supporting

technical upgrading and innovative development. It has

R&D on antiseptic texture and antioxidant solutions for leisure meat products formulated internal management documents such as the

Assist to decrease Regulations for Outstanding Talent Introduction Regulations Biological preservation and freshness-keeping solutions are developed for

energy consumption for Technical Personnel Training and Further Education and reducing the thermal sterilization intensity for prepared meat products helping

and food loss by Regulations for Employee Skills Training. Focusing on its core customers lower energy consumption while better retaining nutrition and

reducing the intensity of R&D areas the company continues to recruit and develop high-flavor all while ensuring food safety.thermal processing and level talents. By combining campus recruitment with internal

extending shelf life Antioxidant solutions are developed and applied in combination with development it has steadily strengthened its pool of young

preservation solutions to reduce oil oxidation during the shelf life thereby highly educated professionals gradually refining a tiered talent

minimizing the adverse effects of oil oxidation on consumer health. structure comprising experts core professionals and emerging

young talent. This has enabled the company to continuously

enhance its overall R&D capabilities technological innovation

Reducing the use of Development of natural and highly effective biological preservative solutions capacity and specialized technical expertise.chemical additives is in

line with the trends of Solutions of natural and highly effective biological preservation are developed By the end of 2025 the company's R&D team consisted of 160

healthy consumption to reduce the use of traditional chemical preservatives and provide customers members with over 18% holding either a master's or doctoral

and compliance. with healthier and friendly fresh-keeping feels. degree (including 3 doctors and 27 masters). The team was also

staffed with multiple senior principal researcher and senior

principal engineer as core experts and technical leaders as

High-throughput test platform well as multiple intermediate engineers serving as technical

backbones. By establishing a high-quality tiered talent team a

Provide rapid accurate and bulk test and analysis services for all links of R&D solid intellectual barrier was built for the company's continuous

conduct high-throughput determination of indicators such as composition technological breakthroughs and product innovations.Shorten the research concentration and purity of fermentation products feed back timely key data

and development cycle support R&D personnel to quickly optimize experimental schemes and ensure

and significantly reduce controllable quality of R&D achievements. By the end of 2025

the consumption of

energy and materials the company's R&D team consisted of

in the research and High-throughput fermentation platform

development process. members

Through the miniaturization and parallelization design of the fermentation 160

system multiple different strains formulations or process parameter systems

can be fermented and cultured simultaneously which shortens the cycle of with over

strain screening and process exploration and improves R&D efficiency.

18% holding either a master's or doctoral degree (including 3 doctors and 27 masters)

61Social Responsibility

R&D Innovation Incentives Intellectual Property Right Protection

The company's steady stream of R&D breakthroughs is driven by an innovation culture As a cornerstone of technological innovation the company attaches great significance

rooted in shared value creation and mutual benefit. To further empower its R&D teams to intellectual property protection and has achieved a fully controlled process from R&D

the company has rolled out internal policies including the Procedure for R&D Performance project initiation to achievement transformation:

Evaluation and Incentives and the Procedure for Technology Commercialization Rewards

which establish clear reward criteria at every stage of the innovation lifecycle. Based upon

the above the company conducts annual project reviews and achievement assessments Establish a patent search and evaluation Risk

allocates bonuses based on a combination of project impact and performance outcomes mechanism regularly organize joint technical mitigation at

and continuously evolves its incentive mechanisms through practical application. and legal reviews accurately identify patentable the project

technical features and effectively avoid potential

initiation

intellectual property infringement risks through

stage

Special Incentive Regular Incentives analysis.The Category for

The Category forJob

R&D Achievement

Contribution and Process Strengthen process management implement

Transformation and

Performance Confidentiality confidentiality management for core information

Implementation control at the such as technical documents and experimental

R&D stage data implement confidentiality responsibilities

and prevent the leakage of technical secrets.* Evaluation objects: Project * Evaluation objects: All personnel

teams and individuals who in functional positions technical

have successfully promoted the support positions and other

transformation application and similar roles who are not directly Develop patent application strategies and adopt

industrial implementation of R&D involved in the implementation and Strategic a combination layout model of "core technology+

achievements. transformation of achievements. layout at the peripheral processes" which not only protects

* Core evaluation criteria: Based * Core evaluation criteria: focus on achievement core innovation but also suppresses competitors

on the application of R&D employees' actual contribution stage through peripheral patent networks to form

achievements in actual production work engagement and task technological barriers.and the market with a focus on completion quality while taking

capacity realization cost control into account indicators such as

performance as well as market and collaboration and cooperation. Establish a mechanism for monitoring and

customer feedback. * Incentive method: Bonus Dynamic evaluating patent annual fees dynamically screen

* Incentive method: Special bonuses distribution is linked to personal maintenance and maintain existing patents based on market

will be established for key incentives value creation and graded and at the changes and technological iterations and optimize

to highlight the crucial value of the verified based on evaluation results authorization sustainably the patent layout to boost efficiency

technology transformation process. to ensure fair incentives. stage and core competitiveness in intellectual property

right application.

622025 Environmental Social and Corporate Governance Report

During the reporting period

Silver-Elephant i.e. a subsidiary of the company

procuredits accreditation for GB/ T 29490-2023

the intellectual property management system to fully safeguard the core competitiveness of the company.Indicators and Targets

In 2025

Shengda Bio-Pharm invested The company and its subsidiaries have a total of and

5367.42 10k CNY in its research and development 51 research projects 11 newly applied invention patents

and have obtained including

19 national authorized patents 12 invention patents 7 utility model patents

While ensuring research and development security and compliance the company will continuously improve its research and development efficiency optimize resource allocation and

support green and low-carbon technology so as to provide support for the overall ESG performance and sustainability of the company.

63Social Responsibility

Social Contribution

Shengda Bio-Pharm actively aligns with national policy directions and social development trends and diligently fulfills its corporate social responsibilities. The company carries out

support initiatives in areas such as disability assistance education promotion elderly care and poverty alleviation to convey corporate warmth and social value. Committed to advancing

the development of social welfare Shengda Group established a SACRED LOVE Charity Foundation in December 2009. Over the years Shengda Bio-Pharm together with its subsidiaries

and the Foundation has been actively engaged in charitable and public welfare initiatives contributing to the Chinese tradition of compassion and support for those in need. In 2025 the

company's public welfare efforts included:

The company made a targeted donation of RMB 50000 to the The company has always been committed to aligning

Support for the Charity Federation of Tiantai Country in Zhejiang Province Care for the its corporate development with social progress actively

Vulnerable and which serves a fund for assisting the disabled promoting Elderly and participating in public welfare initiatives such as elderly care

Disabled common prosperity and the care and support of disabled Orphans and support and fulfilling its corporate social responsibility

individuals. and mission through concrete actions.The company in collaboration with the SACRED LOVE Charity

The company established a Teacher Development Incentive

Foundation launched a Spring Festival warmth initiative

Fund of RMB 600000 at Enmei Kindergarten. In 2025 the

Education for impoverished families in 2025. A total of 15 families in senior executives of the company made personal donations

and Talent Aid for those in Need need received assistance with donations amounting to RMB Cultivation totaling RMB 200000 to continuously invest in early 108000 embodying the principle of "helping one family

childhood education resources and support the development

warming a community" and ensuring that care was delivered

of the pre-school education sector.directly to the people.

642025 Environmental Social and Corporate Governance Report

In 2025

Shengda Bio-Pharm's actively participated in with a total of and a volunteer service of

Disability Assistance Fund 116 participants 278 hours in public welfare and charitable initiatives

One-day Donations

and other activities

Through a series of solid public welfare initiatives the company has continuously expanded the depth and breadth of its social responsibility efforts to ensure the corporate

development aligns with advancement of its social value.Rural Revitalization

To further advance rural revitalization and strive to deliver a satisfactory outcome for the conclusion of the 14th Five-Year Plan Shengda Bio-Pharm has fulfilled positively its corporate

social responsibility. By relying upon its own strengths the company provided support and launched public welfare initiatives to contribute to rural development and the improvement

of people's livelihoods. In 2025 the company entered into a cooperation agreement with Feifengqiang Village Collective Economic Development Co. Ltd. in Tiantai Country to participate

in and support local agricultural development projects. The company participated in and rendered its support to the local agricultural development program by contributed its shares in

driving the village collective economy through the synergy of capital and resources. It helped deliver tangible results in agricultural efficiency enhancement farmers' income increase and

rural revitalization.Shengda Bio-Pharm cooperates with Feifengqiang Village Company to launch agricultural support projects

On October 31 2025 the company signed a cooperation agreement with Feifengqiang

Village Collective Economic Development Co. Ltd. in Tiantai County in the presence

of the director of the village and a representative of Shengda Bio-Pharm. In the

agreement provisions concerning the subscription target subscription value equity

arrangements and subsequent performance procedures were defined clearly. Through

the above subscription-based cooperation Shengda Bio-Pharm provides supports to

the construction of village collective economic projects and business development

and more channels to increase the income of village collectives. The company helps

deliver tangible results in the practice of "Revitalize Villages and Enriching Farmers" and

common prosperity.

65Social Responsibility

662025 Environmental Social and Corporate Governance Report

Due Diligence

By focusing on an integrated compliance framework Shengda Bio is establishing and refining a systematic and standardized due During the reporting period

diligence mechanism to effectively identify and manage various risks in its operations and development. This mechanism helps

to enhance its long-term resilience and create stable value for its stakeholders. In 2025 the company conducted by focusing on the company achieved

contract review demand survey and major project support systematic risk assessments which covers Shengda Bio-Pharm and its

subsidiaries. During the reporting period the company achieved 100% of compliance review of contracts and worked simultaneously 100%

to investigate and refine the contract standard templates in alignment with new economic business scenarios. It has promoted the of compliance review of contracts

proactive risk identification and effective mitigation process across the company. The details are described as follows:

Risk

Review Object

Identification Risk Archiving

and Coverage

and Mitigation and Review

The Legal Affairs Department For potential risks identified through reviews On completion of risk identification

conducts regular reviews to identify compliance determinations are carried out and business assessment and carry-out of

compliance risks in business contracts departments are guided to implement timely remedy response measures the company

and performance risks of partners to enable proactive prevention of compliance risks manages information relating to the

focusing on potential issues related and reduction of operational losses. On one hand potential contract risks identified

to legal compliance and commercial standard contract templates are revised and improved and key compliance review points to

execution. For major key co-operations and fully incorporated in the business processes to further consolidate what has been

and engineering projects it stresses on achieve systematic control at the source. Concurrently achieved. Risk categories relevant

pre-signing risk control assessments targeted compliance training is conducted to clarify subjects response measures and

and establishes a special consultation implementation requirements for each business line implementation status will be recorded

mechanism for anomalies at the ensuring that control measures are effectively in place. systematically and retained as per the

performance stage to enable immediate On the other hand special compliance reviews are corporate archive management system

analysis of issues and closed-loop strengthened for key issues and a management system to ensure the entire risk management

implementation of remedy. for risk identification and remedy promotion is enhanced. process is traceable and reviewable.By systematically advancing the compliance execution risk identification and response and digital management the company has gradually established a due diligence management

system covering pre-process identification in-process control and post-process traceability to effectively enhance the foresight of risk prevention and standardization of corporate

governance.

67Corporate Governance

Anti-Commercial Bribery and Anti-Corruption

Shengda Bio-Pharm has taken anti-commercial bribery and anti-corruption management as a crucial part of its program for improving its governance mechanism maintaining fair

competition order and preventing compliance risks. Based upon relevant laws and regulations such as the Disciplinary Regulations of the Communist Party of China the Administrative

Sanctions Law for Public Officials of the People's Republic of China and the Supervision Law of the People's Republic of China the company kept on refining its internal compliance

management policies in 2025 to make it be applicable to all employees partners and major business matters (including bidding equity transfers etc.). It has translated systematically

the external regulatory requirements into its internal governance rules and established and put into place a series of closed-loop management measures covering system development

execution supervision and risk prevention.Risk Assessment Risk Mitigation

The company focused on conducting compliance risk screenings for key positions The company has intensified its pre-process prevention by requiring new recruits

with relatively concentrated authority and significant discretionary power (such as and transferred employees to sign a statement on clean conduct and incorporating

contract approval fund settlement and project bidding etc.). No risks or potential clauses on clean conducts in the cooperation contracts and bidding documents

hazards related to corruption were identified in 2025. so as to minimize clean conduct-related risks at the source through front-end

constraints.Training and Dissemination Reporting and Supervision

The company has incorporated anti-commercial bribery and anti-corruption The company keeps on improving the reporting and feedback mechanisms

in its compliance training system to enable tiered and categorized training and to secure smooth channels for reporting via the online OA system and offline

dissemination. Specifically for middle-level managers the training focused on dedicated lines. It promptly investigates and addresses issues raised by employees

strengthening risk identification capabilities and awareness of management responds to compliance inquiries and concerns in a timely manner to promote the

responsibilities; for frontline employees the emphasis was on explaining key points effective operation of the supervision mechanism and closed-loop management.of compliance operations in their respective positions. During the reporting period

a total of over 200 middle-level managers and frontline employees were covered.To evaluate the effectiveness of anti-bribery and anti-corruption policies and measures the company actively conducted internal compliance inspections in 2025. Issues identified during

the inspections were promptly investigated and documented in reports. The results showed that in 2025 Shengda Bio-Pharm and its subsidiaries had no incidents related to business

bribery or corruption. Additionally based on the feedback on the inspections the company has optimized the compliance process in its daily risk management to further reduce its

compliance risk exposure.

682025 Environmental Social and Corporate Governance Report

Anti-Unfair Competition

Shengda Bio-Pharm strictly prevents and prohibits unfair competition practices such as

market monopoly and false advertising. It upholds the principle of lawful compliance and

fair competition in market participation and establishes it customer and market trust via Compliance Safeguards Steady Development: Launch

legitimate and compliance operations. The company strictly adheres to the requirements a Special Training Session on Legal and Compliance

of laws and regulations including the Anti-Unfair Competition Law of the People's Management

Republic of China. Being centered on the compliance management policies the company

explicitly prohibits unfair competition such as false advertising and infringement of trade To further enhance the legal risk awareness and compliance management

secrets etc. capabilities of the company's mid-to-high level manager and to solidify the

high-quality corporate development the company launched the 2025 Special

Apart from investigation for patent infringement issues and review of compliance clauses Training Session for Legal Affairs and Compliance Management on the afternoon

in bidding projects the company developed and issued in 2025 the Interpretation for of November 20. Senior executives including Chairman Hong Ai and Zhou Bin

Competition Compliance Policies in response to the new regulatory developments. The director of Shengda Bio-Pharm attended the training. Under the theme "Legal

document was promptly distributed it to all key departments such as those for marketing Compliance · Steady Progress" the training brought together the mid-to-senior

sales and project bidding to ensure compliance requirements are understood accurately level managers and employees in key positions. The training session improved

and implemented by all business lines with no vacancy in the system. Furthermore the effectively the understanding of legal risks and compliance management by

company organized in Nov 2025 a company-wide training on the Anti-Unfair Competition the mid-to-senior level managers and employees in critical roles and promoted

Law of The People's Republic of China and the Patent Law of the People's Republic further the company's overall awareness of lawful and compliance operation and

of China to further improve employees' awareness of anti-unfair competition and risk prevention capabilities.intellectual property protection and ensure business operations are strictly consistent

with the requirements in relevant laws and regulations.In 2025

Shengda Bio-Pharm and its subsidiaries had

NO

litigation or major administrative penalties imposed due to unfair competition

practices and maintained stable compliance operations across the company.

69Appendices

Appendices

Key ESG Performance

Wastewater Drainage Waste Discharge

Company 2025 Unit Non-hazardous Company Hazardous Waste Unit

Waste

Shengda Bio-pharm 215546 ton Shengda Bio-pharm 699 40 ton

Anhui Shengda 31043 ton Anhui Shengda 149 30 ton

Tongliao Shengda 896171 ton Tongliao Shengda 1 14228 ton

Silver Elephant

435595 ton Silver Elephant

(Including Yitao Food) 2 3881 ton(Including Yitao Food)

Exhaust Emission Environment Compliance Management

Company 2025 Unit Indicators 2025 Unit

Shengda Bio-pharm 17732 10km3 Major environmental violation incidents 0 Occurrence

Administrative penalties or criminal liability

Anhui Shengda 4817 10km3 0 Occurrence

imposed due to environmental compliance issues

Tongliao Shengda 51210 10km3 Total investment in environmental protection 5756.46 10k CNY

Silver Elephant

83016 10km3 Number of environmental protection-related

(Including Yitao Food) 25 Numbertraining sessions

Number of trainees attending environmental

1001 Person-time

protection-related training sessions

702025 Environmental Social and Corporate Governance Report

Employee

Indicator Secondary Indicators 2025 Unit

Total number of active employees at the end of the period / 1083 Person

Male 710 Person

Structure of active employees at the end of the period (By gender)

Female 373 Person

≤ 30 years old 202 Person

Structure of active employees at the end of the period (By age) 30-50 years old 617 Person

≥ 50 years old 264 Person

Production 765 Person

Sales 42 Person

Structure of active employees at the end of the period (By discipline composition) Technical 163 Person

Financial 24 Person

Administration 89 Person

Doctorate's degree 3 Person

Master's degree 41 Person

Structure of active employees at the end of the period (By education background) Bachelor's degree 254 Person

College degree 205 Person

Senior high school and below 580 Person

Rate of labor contract conclusion / 100 %

Employee social insurance and housing fund coverage / 100 %

Incidents resulting in labor lawsuits labor arbitration and other employee dispute / 0 Occurrence

Total number of employee training sessions / 440 Number

Total hours of employee training / 830 Hour

Employee training coverage / 100 %

Total investment in employee training / 12650 CNY

71Appendices

Occupational Health and Safety Product and Service Safety and Quality

Indicators 2025 Unit Indicators 2025 Unit

Number of occupational health and safety-related Major safety and quality liability accidents related

93 Number 0 Occurrence

training sessions to products and services

Number of trainees attending occupational health Number of incidents where products sold or

5230 Person-time

and safety-related training delivered must be recalled due to safety and 0 Occurrence

health issues

Total investment in work safety 589.25 10k CNY

Number of customer complaints received relating

52 Occurrence

Employee fatalities from work-related accidents 0 Person to products or services

Work-related fatalities from contractors 0 Person Rate of customer complaint addressing 100 %

Major work safety accidents 0 Occurrence

Total investment for work-related injury insurance 24.92 10k CNY

Data Security and Customer Privacy Protection

Work-related injury insurance coverage 100 %

Total investment for work safety liability insurance 15.81 10k CNY Indicators 2025 Unit

Work safety liability insurance coverage 100 % Number of major data security incidents 0 Occurrence

Innovation Driven

Supply Chain Management

Indicator 2025 Unit

Indicators 2025 Unit Total investment in R&D 5367.42 10k CNY

The proportion of raw and auxiliary material Number of R&D teams 160 Person

suppliers that have placed orders containing

100%

provisions on environment labor and human -Doctorate's degree 3 Person

rights requirements

Proportion of suppliers participating in corporate -Master's degree 27 Person

social responsibility and on-site environmental 70 %

audits -Bachelor's degree and below 130 Person

722025 Environmental Social and Corporate Governance Report

Innovation Driven Anti-unfair Competitions

Indicator 2025 Unit Indicator 2025 Unit

Proportion of R&D team in total number of Incidents involving lawsuits or major

14.77%

employees administrative penalties arising from the 0 Occurrence

company's unfair competition

Number of authorized patents 19 Number

- Invention patents 12 Number

- Utility model patents 7 Number

Number of newly applied invention patents 11 Number

Social Contribution

Indicator 2025 Unit

Number of participants involved in public

116 Person-time

welfare charity and volunteer activities

Hours of participation in public welfare charity

278 Hour

and volunteer activities1

Anti-commercial Bribery and Anti-corruption

Indicator 2025 Unit

Number of Commercial bribery and corruption

0 Occurrence

incidents

73Appendices

Index List of No 14 Self-Regulatory Guidelines for Listed Companies in Shanghai Stock Exchange- Sustainability Reports

(Trial)

Pillar No. Topic Chapter Index

1 Response to Climate Change Response to Climate Change

2 Pollutant Discharge Pollutant Discharge

3 Waste Disposal Waste Disposal

4 Ecosystem and Eco Diversity Protection Ecosystem and Eco Diversity Protection

Environmental

5 Environment Compliance Management Environment Compliance Management

6 Energy Utilization Energy Utilization

7 Water Resource Harness Water Resource Harness

8 Cyclic Economy Cyclic Economy

9 Rural Revitalization Rural Revitalization

10 Social Contribution Social Contribution

11 Innovation Driven Innovation Driven

12 Scientific Ethics NA

Social 13 Supply Chain Safety Supply Chain Management

14 Equal Treatment for Medium- and Small Sized Enterprise NA

15 Product and Service Safety and Quality Product and Service Safety and Quality

16 Data Security and Customer Privacy Protection Data Security and Customer Privacy Protection

17 Employee Employee Occupational Health and Safety

18 Due Diligence Due Diligence

Sustainability Related 19 Stakeholder Communication Stakeholder Communication

Governance 20 Anti-commercial Bribery and Anti-Corruption Anti-commercial Bribery and Anti-Corruption

21 Anti-unfair Competition Anti-unfair Competition

74