202244

Sustainability Report

ZHENDE MEDICAL CO. LTD.2 3About This Report 5

01 Sustainable Development 14 Caring for Employee Growth 41 About Zhende Medical 8 Management 05

Message from the Chairman: After We Care 14 Protection of Employees' Rights and Interests 41

thirty years of efforts embark on the path Management Structure and Responsibilities of Employee Training and Development 47

Sustainable Development 14 Occupational Health and Safety 51

of high-quality development through Progress in Sustainable Development Manage-

ESG ment 15 11

Stakeholder Engagement 17

Performance for Sustainable Devel-

o pment in 2024 13

02 Zhende Cares 23 06 Promoting Green Development 54

Topic Butterfly Baby Care Project — Helping to Enhance Environmental Management System 54

1 the Quality of Life of EB Patients 23 Resource Conservation and Utilization 58

Afya Kesho Project — Innovative Health Education Climate Change Mitigation and Adaptation 61

Solutions for Kenyan Teenagers 24

03 Zhende Ecology 27 07 Being A Reliable Partner 66

Topic Green Supply Chain Construction 27Production Process Optimization 29 Innovative solutions 66

2 Use of Clean Energy 30 Safety and Quality of Product and Service 71

Publicity and Implementation of Carbon Reduc- Data Security and Privacy Protection 76 ESG Performance Tables 84

tion Awareness 31 Sustainable Supply Chain 77

Community Communication and Development 80 Report Benchmarking Index Table 95

Industry Exchange and Cooperation 82 Assurance Statement 111

04 Improving Governance System 35

Corporate Governance System 35

Compliance Operation Management 37

CONTENTS

4 52024 Sustainability Report 关于本报告

About This Report

This report is the third Sustainability Report of Zhende Medical Co. Ltd. which discloses to investors clients -Balance

employees suppliers and other stakeholders the Company’s philosophy established management methods

This report reflects objective and true facts and makes objective disclosure of positive and negative information

implemented work and achieved results in terms of sustainable development topics in its operations.regarding the Company. No negative events were found during the reporting period that should have been disclosed

Report Scope but were not disclosed.The scope of this report covers Zhende Medical Co. Ltd. and its subsidiaries (referred to as “Zhende Medical” “Zhende” -Clarity

“the Company” or “we”). Unless otherwise specified the scope of this report is consistent with that of consolidated This report is released in Simplified Chinese. Information such as tables and models in this report is to help

financial statements for the same period of Zhende Medical (stock code: 603301.SH). stakeholders better understand the text of this report.Report Period -Quantification

This report covers the period from January 1 2024 to December 31 2024. Unless otherwise specified the data in this This report covers key quantitative disclosures and discloses historical data to the maximum extent.report come from this period.-Comparability

Preparation Basis The statistics and disclosure methods of the same quantitative disclosure items in various reporting periods shall

This report is based on the Self-Regulatory Guidelines No. 14 for Companies Listed on Shanghai Stock Exchange— be consistent in this report. In the event of any change in the data collection measurement and calculation methods

Sustainability Report (For Trial Implementation) (2024) and has been prepared with reference to the United Nations the Company shall make retrospective adjustments to relevant data and present the situations and reasons for

Sustainable Development Goals (SDGs). The preparation process conforms to the GRI Standards (2021). such adjustments in the notes to the report so that stakeholders can perform meaningful analysis and evaluate the

development trend of the Company's ESG data.Report Preparation Principles

-Completeness

This report is prepared in accordance with the principles of materiality accuracy balance clarity quantification The scope of disclosure in this report is consistent with that of the Company's consolidated financial statements.comparability completeness timeliness and verifiability. It is approved for release by Zhende’s Board of Directors on

April 24 2025. The Board of Directors guarantees that the content of the report is free from false records misleading -Timeliness

statements or significant omissions. This report is published in Simplified Chinese and English. Any inconsistency This report is an annual report and shall be released by the Company as soon as possible after the end of the reporting

between the Chinese and English expressions shall be subject to the Chinese version. year aiming to provide timely information for stakeholders to make decisions.-Materiality -Verifiability

The Company has identified operation-related material topics that are of concern to various stakeholders as the The cases and data in this report come from the original records or financial reports of the Company in its actual

focus of this report. In this report the Company's industry and business operation characteristics are also taken into operation process. The data source and calculation process disclosed by the Company can be traced to support

consideration while material topics are reported. The materiality analysis process of topics and results are detailed in external assurance and inspection.the "Material Topic Analysis" section of this report.Data Description

-Accuracy

Efforts have been made to ensure the information in this report is accurate to a maximum extent. Among them the The financial data in the report are all in RMB. If the financial data is inconsistent with the Zhende’s annual financial

measurement of quantitative information has accounted for the data scope calculation basis and assumed conditions report the annual financial report shall prevail.so as to ensure that the calculation error range will not trigger misleading effects on information users. Quantitative

information and annotated information are detailed in the ESG Performance Table section of this report.

01 022024 Sustainability Report About Zhende Medical

About Zhende Medical

Report Acquisition Company Profile

This report is released in electronic form on information disclosure platforms designated by the stock exchange and

Zhende Medical established in 1994 is an A-share listed company in China (stock code: 603301. SH). It is

can be viewed on or downloaded from the Company’s official website (http://www.zhende.com).headquartered in Shaoxing City Zhejiang Province. The Company has become one of China’s leading manufacturers

Contact Us of medical dressings and infection site control and protection products and one of top 100 medical technology

enterprises whose scope of businesses and services covers 34 provinces of China and over 70 countries and regions.If you have any suggestions for the report you can reach us through the following ways:

Zhende’s products have been certif ied by the Food and Drug Administration (FDA) the Communate

Address: No. 55 Xiangji Road Gaobu Town Yuecheng District Shaoxing City Zhejiang Province Europpene (CE) Medical Device Single Audit Program (MDSAP) ISO 13485 Quality Management for

Email: dsh@zhende.com Medical Devices and the National Medical Products Administration (NMPA) of China. Our product line

covers different usage scenarios such as compression treatment & fixation traditional wound care

operating room infection control basic care isolation protection pressure therapy and venous thromboembolism (VTE)

prevention stoma care advanced wound care personal healthcare rehabilitation care and intravenous therapy.Honors in 2024

Honors and Recognitions

The 2024 10th China's Top 100

2024 CPEO Gold Award 2024 Global MedTech Most Influential Pharmaceutical TOP100

Enterprises Ranking

2024 Top 500 Chinese China Healthcare Growth Ranking China Times -Wind ESG

Manufacturing Enterprise in (HGR)-Top 100 Listed Medical Dandelion 50 Index

Charity and Public Welfare Device Manufacturers

List of 5G Factories in 2024 by 2024 Top 3 A-share Listed 2024 Global Zhejiang Business

the Ministry of Industry and Companies in the Healthcare ESG Classic 100 Ranking

Information Technology Industry for ESG Performance

Best Employer Brand Practice 2024 Zhejiang Provincial-level "Green Factory" in Henan Province

Award Industrial Internet Platform “Provincial Smart Factory”in Henan

Province

03 042024 Sustainability Report About Zhende Medical

Company Events in 2024

Participation in EcoVadis Ratings Release of the 2030 Carbon Path Plan Full development of renewable Energy conservation and emission Caring teenagers in Kenya

electricity reduction

EcoVadis ratings have established Zhende Medical has actively Jointly funded by Zhende Medical

our prominent position in sustainable responded to the challenge of global In 2024 Anhui Base and Kenya Base We invited a third-party agency to and Yi-nergy Minority Assistance

development goals and performance warming and formulated a climate Phase I were put into operation make an overall energy diagnosis of Foundation and jointly launched by

in the industry. The Company earned transformation strategy in line with and Xuchang Base was expanded. each factory aiming to achieve the Tsinghua University and IHEA a local

a silver medal in its first participation the climate control goals of the Paris The Company also planned for the Company’s goal of a 15% reduction in NGO. The project aims to enhance the

in the EcoVadis rating. The Company Agreement. The Company has joined construction of Shaoxing Phase II and energy consumption through energy the Science Based Targets initiative health level of Kenyan adolescents

scored 74 points ranking in the top 6% Jiangsu Huaian base photovoltaic efficiency inspection the launch of 33 (SBTi) and proactively completed the and mitigate health risks through

of all participants. projects. Our objective is to use emission reduction projects energy scope III-carbon verification according innovative educational means.renewable electricity by more than transformation and energy efficiency

to the SBTi standards after joining 30% by 2028. enhancement.and released a carbon path plan for

2030.

30%15%

Full coverage of ISO 14001 and ISO Low-carbon action Green factory Provincial Smart Factory Caring EB babies

45001 in the factory

The Company organized various Following Xuchang Zhengde Xuchang With digital and intelligent Jointly launched by Zhende Medical

All the production factories of forms of low-carbon actions including Zhende upheld the concept of green construction Xuchang Zhende and Shanghai Debra Butterfly Baby

the Company have passed ISO the procurement of low-carbon office and environmental protection actively achieved the human-machine Care Center Butterfly Baby Care

14001/45001 system certification supplies low-carbon meals restricted practiced the goal of "carbon peaking coordination and cooperation realized public welfare project of "Touch

helping the Company to enhance the and reduced use of plastics garbage and carbon neutrality" and established the new mode of data-driven industrial life stay caring" provides economic

overall management and corporate sorting and low-carbon travel a comprehensive green development transformation and upgrading with supports and medical care products

image. path in various aspects such as green new capacity building as the main for EB patients and is also committed contributing to a positive low-carbon design green manufacturing green content and won the honorary title of to raising public awareness and

atmosphere in the Company. management and green standards. In "Provincial Smart Factory" in Henan understanding of EB disease.

2024 it won the honorary title of "Green Province in 2024.

Factory" in Henan Province again.

05 062024 Sustainability Report Commitment to Sustainable Development

Commitment to Sustainable Development

07 082024 Sustainability Report Message from the Chairman

Message from the Chairman "carbon peaking and carbon neutrality" developed green Carrying out public welfare activities to fulfill development plans set carbon reduction targets and corporate social responsibility

committed to the Science-Based Targets initiative (SBTi) We have actively participated in public welfare initiatives

demonstrating our strong determination to reduce and fulfilled our corporate social responsibility. In 2024

emissions. Through energy conservation and emission we launched the Butterfly Baby and AFYA KESHO

reduction efforts the adoption of photovoltaic energy projects which received widespread praise from users

and the development of low-carbon green materials both domestically and internationally. We believe that

and products we contributed to the green and low- public welfare activities not only serve as a bridge to

After thirty years of efforts carbon transformation of the industry. Additionally we convey love and care but also act as a channel to plant empowered upstream and downstream enterprises seeds of hope allowing more people to experience

embark on the path of driving energy conservation and emission reduction warmth and strength.throughout the entire supply chain and playing our part

in the global fight against climate change. Grateful for your partnership and work together

high-quality development to create a brighter future

Establish an outstanding team through As we reflect on this year we sincerely thank our

organizational optimization and cultural

through ESG partners healthcare professionals and consumers for empowerment their unwavering support. Zhende Medical will always

We continued to focus on organizational optimization remain your most reliable partner.and cultural empowerment reshaping our organizational

structures through digital processes and establishing a Looking ahead Zhende Medical will join hands with

learning-driven innovative team. With development plans our customers with unwavering confidence and

such as "Xinying Qihang Ruihang and Linghang" we determination to create even greater milestones on our

nurtured a diverse range of talent including compound new journey. We are committed to energy conservation

business and specialized experts. Additionally we and emission reduction increasing the use of green

launched the "5×1" corporate culture project for senior energy enhancing circular economy efficiency and

In 2024 Zhende Medical reached an important practising sustainable development managers creating a vibrant talent hub through multiple driving technological innovation. We will focus on

milestone celebrating its 30th anniversary. This year we Over the past year Zhende Medical has deeply initiatives and at various levels. Upholding the core reducing carbon emissions deepening our presence

have embraced change and made significant strides integrated the ESG concept into its corporate strategy values of "Customer firstTransformation&Innovation in the healthcare sector strengthening international

firmly embarking on a path of compliance management and operations continuing to create a positive impact Success-sharing." we fostered leadership business cooperation and enhancing our core competitiveness. In

and high-quality sustainable development. In the on both the environment and society. As a member of acumen product strength marketing capabilities and doing so we aim to provide more advanced high-quality

face of multiple challenges including the deepening the United Nations Global Compact (UNGC) we have manufacturing excellence all of which contributed to medical and healthcare products and services to global

of centralized procurement pressure from overseas actively fulfilled our responsibilities fully participated advancing management excellence. customers.expansion and the technological revolution within in the UNGC Global Act ion Plan and engaged

the medical industry Zhende Medical has focused on in discussions and practices on key sustainable Quality first intelligent manufacturing paving the

internal growth. We have adhered to innovative business way for the future.development topics. Guided by our core mission of

models accelerated the global supply chain layout "Ensure medical safety and reduce healthcare cost." we As the most trusted partner in healthcare we have

fostered technological innovation and committed to have strictly adhered to the ten principles of the UNGC established a robust product quality inspection system

energy conservation and emission reduction—all with promoted green and low-carbon production models adhering to global certifications and Cpk standards to

the goal of making healthy living more accessible. By strengthened supply chain management and advanced ensure that every product withstands the test of time

staying true to our core values and putting in the hard the integration of environmental protection and social and meets our clients' needs. Leveraging intelligent

work we have driven the comprehensive upgrade of responsibility. manufacturing and automated production we have

our ESG management shifting from risk management achieved smart operations efficient maintenance and

to compliance management and from non-financial Enhancing climate action and implementing sustainable production in our factories. This enables us

performance to long-term financial performance. the strategy of "carbon peaking and carbon to respond swiftly to customer demands while delivering

neutrality" safe and effective products for patients and healthcare

Integrating ESG concept into the strategy and We actively responded to the national strategy of professionals. ——Lu Jianguo Chairman of Zhende Medical

09 102024 Sustainability Report Message from the Chairman

Performance for Sustainable Development in 2024

Reform and Innovation Improvement of process Caring for Employee Growth

management proposals

Proposals were Standard formulas A total of proposals Female employees New employee Employee net promoter

improved were developed were collected accounted for satisfaction rate reached score (ENPS) was

512156507466.12%94%75.55

The work-related injury

TPI projects were RMB of costs were saved Intangible gains evaluated RMB The coverage of employees The average training time rate per one thousand Working days lost due to

completed receiving training was per employee was employees was work-related injuries

113 16.475 million 4.71 million 100% 64.9 hours 0.38 117 days

People participated in A total of employees were Scholarships were granted to a

improving the proposals sponsored With a subsidy amount of total of employees' children

6800 44 196000 RMB 36

Promoting Green Development Being a Reliable Partner

The annual expenditure on

Annual R&D investment environmental protection The use proportion of Domestic market customer Foreign market customer net Zhende participated in the formulation

was RMB investment reached RMB renewable electricity was net promoter score was promoter score was (revision) of 12 group standards

135.49 million 11.778 million 20% 84.27 53 12

The proportion of environmentally

The percentage of friendly packaging materials used in The total amount of waste Environmental and social risk survey Employees participated in The total duration of employee

recycled water is finished products reached recycled was was conducted on suppliers voluntary activities volunteer service was

52.05% 68% 4237.38 tons 762 334 2004 hours

Zhende was granted 9 Class II medical Total greenhouse gas emissions (Scope 1 + Scope 2)

device product registration certificates was Total amount donated RMB

and 28 patents for invention 90458.26 tons of CO2 equivalent 2.30 million

11 12Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

01

Wee Caarree

Care Employee Growth Promote Green Development

关注员工成长、促an进d T绿o B色e a发 Re展lia、ble做 Pa值rtn得er信赖的合作伙伴

Sustainable Development Integrate ESG concepts into the Company’s strategic operations from risk compliance to value creation;

Care

Management Implement the dual-carbon strategy commit to SBTi and release a carbon path plan for 2030;

13 14Sustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Sustainable Development Management Strategy - We Care Management Structure and Responsibilities of

Sustainable Development

The philosophy of sustainable development of Zhende Medical originates from its mission and vision. We believe that

integrating the philosophy of sustainable development into Zhende’s operations will help us grow steadily and constantly In order to further boost the integration of ESG policy into the corporate strategy the Company has set up a top-down

into the future. Based on its own business the SDGs and the global governance philosophy proposed by the Chinese ESG management organizational structure to further optimize relevant management processes. The constructiongovernment Zhende Medical developed an ESG policy that included three major strategies: “Caring for employee growth of the Company's ESG management system is overseen by the Board of Directors as the top governing body and isPromoting green development Being a reliable partner”. carried out by the ESG Management Committee. The Company's ESG Office as a standing office coordinates related

management communication and disclosure and establishes a long-term management mechanism. The ESG Office

regularly reports to the ESG Management Committee on progress and receives guidance from it.We Care

CaCrianrge fEomr epmlopyleoey eGero gwrothw tPhr Pomroomteo tGinrge egnr eDeenv deelovpemloepnmte nt

andB eTion gB ea are Rliealbialeb lpea Prtanretrner The Board of Directors is a top ESG governing body of the Company; the Strategic

The top governing body Committee of the Board on behalf of the Board is responsible for making ESG management

The Board of Directors decisions reviewing sustainable development strategic plans determining ESG risks and

reviewing the information to be disclosed to the public.moting gre

Pro en

Decision-making

body The ESG Management Committee is chaired by the CEO participates in the deliberation and evelopmed n t ESG Management decision-making of major ESG topics and provides decision-making support for ESG related

Committee matters.We Care

Care Employee Growth Promote Green Development Executive office The ESG Office includes relevant leaders of the Group with the Vice President of the Group acting as the Executive Director and is responsible for planning executing and monitoring

and To Be a Reliable Partner ESG Office ESG work.Executing agency

Implement relevant ESG management measures in accordance with the requirements of the

Each department and ESG Office.production base

The long-term sustainable development of the Company is closely linked with its social responsibilities. Zhende

Medical profoundly realizes that only by deeply integrating the ESG concept into its corporate strategies and daily

I’m well aware that sustainableC devaeloprment is not only the responsibility of the Company but is also the operations can it achieve both economic and social benefits. During the reporting period the Company conformed to

future competitiveness. We are actively boosting the transformation from risk operations to compliance

operations deeply integrating ESG into the corporate strategy and routine operations. Through the the trend of the times and took initiative in making reforms. Specifically we developed and issued the Management

establishment of a sound compliance system we can proactively identify and respond to potential risks Manual for Social Responsibilities for all bases around the world as a profound practice and specific action guideline for

and enhance the anti-risk capability of enterprises. We are no longer limited to short-term non-financial the Company’s commitment to sustainable development demonstrating our forward-looking vision and management

metrics but attach significance to long-term financial value creation. We believe that only through

combination of social responsibility and economic benefits we can achieve true sustainable development initiative as an industry leader and responding to social expectations with our practical actions.and provide lasting value for our shareholders employees and society.—— Lu Jianguo Chairman of Zhende Medical

1516

Caring for

loyee grop wthm

e

Being

a reliab

partne

l

r eSustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

Progress in Sustainable Development Management

— Progress in achieving ESG management goals in 2024 —

ESG Strategy and ESG Strategy and

2030 Goals Performance in Progress in Business 2030 Goals Performance in Progress in Business

Responses to Key dimensions Key Actions in 2024 Responses to Key dimensions Key Actions in 2024

Committed 2023 2024 Trends Committed 2023 2024 Trends

SDGs SDGs

Three new

100% of the Established ISO45001 occupational health and subsidiaries

factories safety management system passed the

Total

Implemented safety production responsibility ISO 45001 ↑ Promoting The Company greenhouse maintained ISO 100%

45001 system system and signed target responsibility statements occupational Green

plans to join Carried out carbon verification for factories based gas emissions

the SBTi and (Scope 1 +

certification at every level health Development on ISO 14064 standards

Made comprehensive identification assessment and safety will set target Fully promoted low-carbon concepts and activities Scope 2) Committed ↑

Health and safety control and updating of hazard sources certification. values based decreased on the goals Reduced greenhouse gas emissions by by 8.3%

The work- Provided EHS theme training for all employees established by implementing the measures such as policy compared to

related injury Conducted EHS quarterly audit and improvement Climate change the SBTi formulation and investment in energy-saving the previous

rate per one Made EHS regular meetings and management mitigation and equipment year.thousand improvement 0.45 0.38 ↓ adaptation Further reduced emissions through the construction

employees was Carried out QIT and KYT activities extensively and expansion of photovoltaic biomass power

less than 0.5 generation and geothermal renewable energy

utilization projects

The proportion Made ‘Five Must Visits’ Renewable Made climate risk and opportunity analysis and

Caring for of female senior Established employee communication channels

electricity actively carried out response measures and

Employee executives such as trade union workers’ congress and general

accounts for committed to advancing the SBTi at the board level 11.1% 20% ↑

Growth (above the level

23.8%26.3%↑

manager mailbox over 30% of

of director) total electricity

reaches 20% Cared for employees in need and established a consumptionmutual assistance fund

Employee rights Made surveys on employee satisfaction and

and benefits employee engagement 100%

Established a comprehensive remuneration and maintained

Employee NPS reward system ISO13485

is greater than Formulated diversified inclusion policies and 69.33 75.55 ↑ system

70 Products passed ISO 13485 CE FDA and other promoted the SA system across the Group certification 100% 100% ↑domestic and overseas system certification

Developed employee rights protection policy and Customer Passed CE/FDA

and product Established a code of business conductimplemented EcoVadis rating activities certification as

responsibility required Continued to improve the "I CARE" process

Continued to promote organizational and talent Enhanced customer satisfaction through end-to-end

development process improvement International International

Made talent review and established a job Customer net market: 52.8 market: 53 ↑

qualification system promoter score Domestic Domestic

Established specific transparent and smooth dual Being a Reliable market: 83.9 market: 84.27

channels for career development Partner

Established a panorama of talent training and

The average development

training time of

Growing together employees is Established a process-based curriculum systemEstablished a tutorial system and a job rotation 64.77hours 64.9hours ↑ Established a supplier code of conduct and made greater than 60 responsible procurement

hours system

Encouraged employees to rotate across functions Environmental Developed various academic exchange activities

and fields Assisting Industry and social risk Carried out various kinds of school-enterprise 80% 88% ↑

Supported employees to enhance their academic development research covers cooperation

background and skills certification all key suppliers Participated in the formulation of national industry

Continued to improve E-learning platform and group standards

Continued to promote lean ratings processes and Carried out various association activities

Six Sigma Green Belt and black belt certification

Established an ISO 14001 environmental

management system

Environmental All factories Promoting Performed up-to-standard wastewater discharge

Green responsibility

pass the

management ISO 14001

and gas emission 66.67% 100% ↑

Development certification Performed compliant disposal of waste Provided support for employment of people in

Organized emergency exercises for environmental the places of operation and contributed to local

emergencies economic development; Formulated public welfare

and charity-related management systems and

Continued to promote product innovation and Social External organized various types of public welfare charity

sustainable materials development through IPD contribution donations are

RMB 3.25 RMB 2.30

and community volunteer service activities; million million ↓

The The efficiency of using resources was enhanced by

made annually Established factories overseas thus promoting

proportion of recycling waste heat and energy replacing energy- employment in less-developed regions

environmentally saving equipment optimizing production process Actively organized public welfare donations to other

Innovation and friendly and recycling waste water. regions or countries

green product packaging ISCC PLUS certification 65% 68% ↑

development materials used ISO 14067 carbon footprint certification

in finished Made lightweight and green upgrading of packaging

products and continued to purchase sustainable packaging

exceeds 80% (with FSC certification etc.)

Established an EUDR team and guarded against

deforestation risks in operation

17 18Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

— ESG Implementation Strategy Diagram — Stakeholder Engagement

The UN: SDGs UNGC... Stakeholder Communication

ESG ESG strategy Zhende Medical expects to establish a long-term mutual-trust relationships with its stakeholders. With a regular

commission Dual-carbon goals communication mechanism with stakeholders it aims to gain a deeper understanding of their opinions needs and

opportunity

expectations on the Company. We maintain two-way communication with relevant parties and respond to their focuses

GRI/ISSB... Supply chain in the field of sustainable development.ISO37301/37001/27001 collaboration EcoVadis/CDP/SBTi...ISO14064/14067 opportunity

Responsible sourcing: Regional trade agreements such as

RBA/Sedex/WRAP/Amfori... Trade risk EU/ASEAN/RCEP/AU Main Stakeholders Topics of Concern Communication Methods/Channels

Relevant acts of the US/UK/

Germany and the EU Legal operation

Anti-corruption and business Compliant tax payment

Responsible Production: ethics Anti-corruption mechanism

ISO45001/14001/SA8000 EHSS risk Review of human rights: Emissions and waste

BSCI/SMETA... Government and regulatory Environmental management

Inspection by leaders and supervision authorities

system Responding to government policies

agencies Participation in government projects

System and standard Regulations and customer requirements Exchanges’ information disclosure platform

Protection of investors’ rights and

interests Disclosure of periodical reports and official website information

Corporate governance Investors exchange conference

R&D and innovation Investors hotline

Institutional investors and

individual shareholders Intellectual property protection

Company visit

General Meeting of Shareholders

Product quality and safety

Customer service

Data security and privacy

protection Customer satisfaction survey

Anti-unfair competition Professional customer service team

Climate change mitigation and Email and service hotline

Customers and consumers adaptation Customer complaint channels

Water resource utilization Customer visit

Energy utilization

Green packaging

Anti-commercial bribery and anti-

corruption Industry events (exhibitions seminars etc.)

Sustainable supply chain Industry-university-research

Industry exchange and cooperationPartners

cooperation Supplier conference

Internal mail

Employee training and Internal communication platform

development Employee complaint channels

Employee rights and benefits Employee training

Employees Occupational health and safety General meeting of worker representativesEmployee care mechanism (Mutual Aid Foundation

Talent Scholarship etc.)

Community communication and

development

Medical accessibility Volunteer service activities

Emissions and waste Public welfare projects

Green packaging Company website and self-media

Community and the public Ecosystem and biodiversity Inclusive products

protection

19 20Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

Analysis of Material Topics The Company's corporate sustainability management committee reviewed and confirmed the identification results of

material topics. In 2024 the identification results of material topics are given in the matrix below. A total of 24 related

The identification of material topics serves as an important link of the Company's ESG management which helps topics were identified which was composed of 7 topics with both financial and impact materiality 1 topic with only

the Company to identify the key focus areas and determine the ESG strategic planning and work priorities. In financial materiality and 16 topics with only impact materiality.

2024 the Company made a "double materiality identification and analysis" on sustainable development topics by

referring to domestic and overseas sustainable development standards1. While focusing on the significant impact

of the performance of the corporate topics on the economy society and environment the Company also took into — Double Materiality Analysis Results of Zhende Medical’s Topics in 2024 —

consideration the expected impact of the topics on the Company’s finance in the short medium and long term.Double materiality sustainable supply chain technological research and innovation customer service occupational

health and safety employee training and development climate change mitigation and adaptation

— Double Materiality Assessment Process —

Only financial Environmental compliance management

materiality

Understand the By interpreting the Company's value chain domestic and overseas sustainable development standards

background of (including but not limited to stock exchange information disclosure requirements international GRI

corporate activities standards and international sustainable Financial Standards SASB standards) understand the Employee rights and benefits data security and privacy protection industry exchanges and

and business relations Company's sustainable development background and identify and understand the affected stakeholders. cooperation community communication and development anti-commercial bribery and anti-Only impact corruption medical accessibility sustainable management green packaging corporate governance

materiality intellectual property protection ecosystem and biodiversity conservation water resource utilization

energy utilization emissions and waste anti-unfair competition and protection of investors’ rights

Establish a list of Make preliminary identification and screening of relevant sustainable development topics in

and interests.topics conjunction with standard benchmarking policy analysis and peers benchmarking and analyze the

actual and potential impacts risks and opportunities in respect of sustainable development topics.— Double Material Topic Matrix of Zhende Medical in 2024 —

Assessment of impact materiality

High Environment

By inviting external experts and communicating with stakeholders it’s evaluated from the two Impact materiality 1 Climate change mitigation and

dimensions of "impact severity" (impact scale scope and irremediability) and "impact possibility" adaptation2 Energy use

contributing to an impact materiality matrix.

1 3 Green packaging2

Assessment of financial materiality 4 Ecosystem and biodiversity

Assess the 23 conservation24

materiality of 5 Emissions and wasteCommunications with members of the Board of Directors senior executives and representatives of 3 22

13

6 Water resource utilization

topics shareholders or institutional investors of the Company are organized by means of on-site interviews 16 8 7 Environmental complianc

and questionnaire survey; the assessment is made with reference to internal and external expert 15 12 management

opinions from the two dimensions of "possibility of impact occurrence" and "degree of financial 20 10 Social

impact" contributing to the formation of financial materiality matrix. 2119 8 Product quality and safety

9 Sustainable supply chain

Summary of double materiality results 4 18 145 10 R&D and innovation

6 9 11 Intellectual Property Protection

The unified calculation is made of the impact and financial materiality of topics forming the double 11 17 12 Customer service

materiality matrix. In addition the boundary of the material topics is defined. 13 Occupational Health and Safety

14 Employee training and development

7 15 Employees' Rights and Interests

16 Data Security and Privacy Protection

17 Industry exchange and Cooperation

18 Community Communication and

Deliberation and Subject to the deliberation and confirmation by the Company's Board of Directors the reports gave Development

confirmation of topics the key disclosure of topics of higher materiality in 2024. 19 Medical accessibility

Governance

20 Sustainable management

21 Corporate Governance

22 Anti-unfair competition

23 Investor Rights Protection

Financial materiality 24 Anti-Commercial bribery and

Notes: Low High

anti-corruption

1. Including but not limited to the Self-Regulatory Guidelines for Listed Companies - Sustainability Reporting (Trial) (the "Guidelines") released by Shenzhen

Stock Exchange European Sustainability Reporting Standards (ESRS) and the European Financial Reporting Advisory Group (EFRAG) FRAG IG 1: Both financial and Financial materiality with Impact materiality with No financial materiality

Materiality Assessment Implementation Guide and International Financial Report Standards on Sustainable Disclosure No. 1 - General Requirements for impact materiality no impact materiality no financial materiality and no impact materiality

Sustainability-related Financial Information Disclosure (IFRS S1).

21 22Sustainable Improving Caring for

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— Table for Impacts Risks and Opportunities of Zhende Medical’s Financial Materiality Topics in 2024 —

Impact Analysis Financial Analysis重要性议题

Nature of Impact Impact Scope Impact Description Type of Risks and Opportunities Time Range Impact Description

If product quality fails to reach the standards upstream

Upstream/ suppliers shall bear more inspection and rework costs

Quality issues may trigger additional production costs claims and

Product quality and safety Potential negative impact Downstream value chain downstream distributors shall face returns and complaints Liability risk Medium-term

product recall expenses (such as transportation and storage fees) while

and consumers may be exposed to health risks affecting potentially leading to a delay in delivery and a fall in sales further harming

their trust and loyalty to the product brand. the brand reputation.If supply chains fail to meet sustainable development

requirements upstream suppliers may suffer

environmental regulatory and social responsibility The failure of suppliers to satisfy regulatory compliance requirements can

Sustainable supply chain Potential negative impact Upstream value chain pressures resulting in increased costs and production

lead their products to be prohibited from the market especially in highly

delays. In addition the supplier's non-compliance behavior Market risk Medium-term regulated regions such as the European Union. In addition negative events

may affect the Company's compliance and brand of suppliers can trigger consumer boycotts which in turn can result in

reputation ultimately bringing about the disruption or lower sales and damaged brand image.instability of the supply chain.Through continuous R&D and innovation the Company Through R&D and innovation the Company can optimize production

can enhance product competitiveness and market Product/Service opportunities/ efficiency reduce production costs and enhance flexibility and R&D and innovation Potential positive impact Company’s own operation adaptability optimize production processes reduce costs Market opportunities Long-term adaptability quickly adjust products and businesses and seize market

and respond to changes in market demand. share. In addition innovation can boost cooperation and strategic alliances between enterprises and bring new business opportunities.Through strict environmental compliance management

the Company can mitigate the risks arising from The positive implementation of environmental compliance management

Environmental compliance Potential positive impact Company’s own operation environmental regulations ensure the efficiency of Resource consideration

can help the Company to raise the corporate image and brand value while

management resource utilization and the minimization of environmental opportunities Medium-term production process optimization and energy conservation & emission

impacts in the production process enhance operational reduction can help to elevate resource utilization efficiency reduce costs

efficiency and mitigate the risk of fines and lawsuits. and boost sustainable development.Quality customer service can enhance the customer

satisfaction and loyalty of downstream distributors and Quality customer service can elevate customer loyalty and repurchase

Customer service Potential positive impact Downstream value chain retailers elevate product market penetration decrease the Market opportunities Short-term rate and increase customer value and revenue; The product optimization

return rate and raise the market competitiveness of the through market feedback helps to expand market share and attract more

brand. consumers.Good occupational health and safety management

Occupational health and can reduce work-related injury accidents enhance

Good occupational health and safety management can elevate employee

safety Potential positive impact Company’s own operation employee productivity and satisfaction reduce production Resource efficiency opportunities Medium-term

satisfaction and loyalty which in turn enhances productivity and product

disruptions caused by sick leave and accidents and quality while helping to attract and retain outstanding talents and raise

optimize the Company’s operational efficiency. the competitiveness of the Company.Through continuous employee training and development

the Company can enhance the skills and work efficiency of The provision of quality training and development opportunities can Employee training and

development Actual positive impact Company’s own operation employees raise their loyalty and job satisfaction reduce Resource efficiency opportunities Short-term

enhance the attractiveness of the Company help to explore new business

the brain drain and boost the improvement of its operating areas enhance employees’ capability and work efficiency and elevate the

efficiency and innovation capability. Company’s brand image and market competitiveness.By taking climate change mitigation and adaptation

measures the Company can pass on environmental The exploration of green raw materials market can help to expand market

Climate change mitigation responsibility to downstream suppliers and consumers share and the further cooperation in technological innovation can help

and adaptation Potential positive impact Downstream value chain enhance the environmental attributes of products Energy source opportunities Long-term to elevate product competitiveness. In addition by actively responding strengthen the trust of downstream partners and to climate change policies the Company can also acquire relevant policy

consumers boost the growth of green market demand support and subsidies to further promote business growth.and elevate market competitiveness.

23 24Sustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Governance Employee Promoting Green Being A Reliable

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02

Building a Harmonious and Healthy Future

【Topic 1】Zhende Cares Butterfly Baby Care Project – Helping to Enhance the Quality of Life of EB Patients

Afya Kesho Project – Innovative Health Education Solutions for Kenyan Teenagers

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Butterfly Baby Care Project — Helping to Enhance the Launching ceremony of "Touch life stay caring"-themed Public Welfare Project on Caring for Butterfly

Quality of Life of EB Patients Babies

In April 2024 the launching ceremony of "Touch life stay caring"-themed public Welfare Project on Caring for Butterfly

Zhende Medical has always adhered to the principle of deeply understanding and sincerely fulfilling its social responsibility. Babies jointly developed by Zhende Medical and the Shanghai Debra Butterfly Baby Care Center was successfully held.The Company actively engages in social initiatives that align with the characteristics of its products striving to ensure that During the event the Company shared a documentary which showcased the daily life and nursing of butterfly babies and

their optimistic and idealistic attitudes towards life. The Company also invited several EB patients to share their personal

more patients benefit from Zhende products through public welfare actions. By spreading love and warmth through practical experiences and nursing conditions helping attendees better understand the challenges and needs of EB patients while

efforts Zhende Medical is committed to contributing to the creation of a happier and more compassionate society. raising social awareness. Additionally Zhende Medical made a special fund donation to the Butterfly Baby Care Center

and the patients’ relatives also expressed their deep gratitude at the launching ceremony and presented Zhende Medical

As a supplier of medical dressings Zhende Medical has placed significant emphasis on the health needs of patients with with an embroidery work of "ZD" logo in Yi ethnic style.Epidermolysis Bullosa (EB) a rare disease often referred to as "butterfly disease" due to the fragility of the skin mouth Numerous paintings by EB patients were exhibited at the launch event. These artworks were full of spirit and reflected

esophagus and other mucosal tissues prone to trauma and ulceration. The use of high-quality wound care products can the patients' beautiful pursuit and longing for life. Zhende Medical specially adopted the artworks of EB patients and also

greatly enhance the quality of life for these patients helping to alleviate physical pain and meet life’s challenges. To support called on more attendees to adopt the artworks onsite. All the funds raised would be used for EB patients helping butterfly

babies realize their artistic dreams.this cause Zhende Medical collaborated with the Shanghai Debra Butterfly Baby Care Center to launch the "Touch life

stay caring" public welfare project. Through professional medical support and compassionate care the initiative provided

practical help to "butterfly babies" improving their quality of life and raising public awareness about the challenges faced by

EB patients.We believe that the value of an enterprise lies not only in its economic contribution but also in its

responsibility to society." From the heart we express boundless love through practical action. We

reached out to the butterfly babies warming their hearts and helping the seeds of dreams take root

in each patient's soul. Through the AFYA KESHO project in Kenya we integrated into local primary

and secondary schools lighting the beacon of knowledge and empowering the health concept to

transform the lives of children.——Shen Zhenfang Vice Chairman of Zhende Medical

— Zhende Medical ‘Touching Life and Warming Peers’ Public Benefit Initiatives —

Caring donation Nursing training Social popularization

Donated money to Butterfly Actively participated in EB Worked with Butterfly Baby Afya Kesho Project —— Innovative Health Education

Baby Care Center to support Nursing training courses and Care Center to plan the patient Solutions for Kenyan Teenagers

the Center’s operation and provided necessary nursing story audio collection activity of

development supplies for patients on site "Sweet Words to Send Blessings

for Butterfly Baby" calling on all

Donated 200 nursing kits With the increasing global focus on public health gender equality and other important issues adolescent health sectors of society to pay attention

to provide intimate care for to the butterfly baby group education has become a key area in advancing sustainable social development. Zhende Medical has consistently

butterfly babies embraced a strong sense of responsibility and in partnership with the Innovation for Health Equity in Africa (IHEA) and

the Yi-nergy Minority Assistance Foundation launched Afya Kesho a community health education project in Kenya.Upholding the sustainable strategy of "caring for employee growth promoting green development and being a reliable

partner" Zhende Medical has been dedicated to deeply integrating the corporate social responsibility philosophy of

"We Care" into the Afya Kesho project. The Company has made significant strides in four key areas: social contribution

industry development employee growth and cultural integration. These efforts support balanced economic and social

development contributing to global health and well-being.

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Social Contribution Highlights of Afya Kesho Project

Afya Kesho highlights the five key dimensions of health education equal education technology empowerment

community empowerment and policy proposition to promote social contribution and enhance the accessibility of Covered Group Online Influence

health care. 503 adolescents aged 9 to 15 with a total of 10000+ online users

638 cumulative participations recorded

Health Education Equal Education Technology Community Policy Empowerment Empowerment Proposition

Covered Area Academic Research

Offered lively and Focused on Provided Strengthened Cooperated

age-appropriate the material communities the skills training closely with

sex education shortages and with the for community China-Africa 3 primary schools at Kiambu and Nairobi A baseline survey of 124 teenagers and a

courses for educational plight necessary digital health workers government counties

primary and faced by girls and infrastructure and grass- organizations pilot study of 20 teenagers were completed

secondary school empowered girls' and basic health roots medical the United

students in Kenya health by donating services and personnel Nations and other

established health products promoted the and continued international

knowledge- and boosting accessibility to empower organizations as Health education activities at Ngewe Primary School in Kenya

based community gender equality of digital and grassroots health well as local non-

networks while medical services forces governmental

improving the organizations

overall health to boost The Afya Kesho project launched its first survey and trial teaching activities at Ngewe Primary School in Kiambu County

of teenagers international Kenya. Using innovative methods such as animated videos interactive games anonymous Q&A public sharing and

and enhanced experience practical demonstrations the project provided local students with engaging and informative health education simulation

community well- exchanges classes. These activities not only captured the attention of teenagers parents and teachers but also laid a strong

being foundation for improving the health awareness and well-being of Kenyan youth.Industry Development

The Afya Kesho project effectively addresses the grassroots health needs in Kenya by providing health education

courses medical support and sanitation facilities to local communities. This initiative ensures improved local

healthcare and enhances social well-being. With its sustainable replicable and localized approach the project has

set an exemplary model for corporate social responsibility that other Chinese enterprises can learn from. It has also Health Education Simulation Class

continued to strengthen China-Africa cooperation in health education public health and sustainable development

making significant contributions to the advancement of the industry.Employee Growth Caring donation to Ngewe Primary School in Kenya

We have always adhered to a "people-oriented" development philosophy actively supporting employee growth while The Afya Kesho project held a donation ceremony at

promoting health education and social contribution. We have engaged with the Kenyan community by organizing Ngewe Primary School in Kiambu County Kenya providing

health education programs for the children of employees enhancing the health and well-being of both employees the school with essential items such as rice flour and

cooking oil as well as learning tools like computers. This

and their families. Additionally we encourage employees to participate as volunteers in community health education initiative offered material support and demonstrated deep

activities helping to foster their cross-cultural communication and teamwork skills. care and love for Kenyan students. Judy Satya Head of

Ngewe Primary School expressed her gratitude to the

Cultural Integration project team stating that the donation would significantly

improve the living and learning conditions of the students.She also expressed hope for long-term cooperation in the

With the support of the Afya Kesho project we have actively promoted cross-cultural exchanges and enhanced future to create a better growth environment for the pupils.cultural understanding and cooperation through special activities such as the Spring Festival. These initiatives aim to Donation Ceremony at Ngewe Primary School

strengthen China-Africa relations and further deepen our commitment to social responsibility.

29 30Sustainable Improving Caring for

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Governance Employee

System Growth Development Partner

03

Creating Value with Sustainability Thinking

【Topic 2】Zhende Ecology 2024 2026 2030SBTi-Commit SBTi-Target set Compliance with dual-carbon targets

Grasping the existing Fulfilling responsibility Improving energy Making energy Achieving the

situation efficiency transformation goals

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Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Zhende Medical is deeply embedded in the medical consumables industry. With a global presence advanced

manufacturing capabilities and a comprehensive product system the Company consistently maintains its leadership Green Supply Chain Construction

position domestically while expanding its influence in international markets. As demand for global healthcare products

and services rises and as regulations such as the EU Carbon Border Adjustment Mechanism (CBAM) the EU Deforestation Based on the 2023 carbon data the Company has effectively identified key areas for carbon reduction. In 2023 the Company’s

Regulation (EUDR) and others are progressively implemented the industry is rapidly shifting towards compliance green total carbon emissions amounted to 522786.87 tons of carbon dioxide equivalent with Scope 3 emissions accounting for

development and high-quality growth. In this context carbon emission management green supply chain development and 81.7% primarily from purchased goods and services (85.27%). As a result carbon reduction in the upstream supply chain

full-life cycle low-carbon design have become key benchmarks for measuring core competitiveness. is a top priority for Zhende Medical's green development. In addition to driving innovation Zhende Medical has collaborated

with suppliers to enhance environmental management and encouraged more partners to engage in sustainable development

In this context Zhende Medical is progressively shifting from "product competition" to "green value competition." This practices thereby laying the foundation for a low-carbon circular and responsible supply chain. During the reporting period the

transition supports global business expansion through strong compliance management effective carbon management Company made significant contributions to the industry's green transformation by implementing multi-dimensional measures

capabilities and robust financial performance thereby laying a solid foundation for securing international market including promoting the use of environmentally friendly materials strengthening suppliers' social responsibility commitments

share meeting the green procurement needs of overseas customers and enhancing long-term resilience. Adhering to and optimizing packaging solutions.the sustainable development philosophy of "integrating ESG into business operations" the Company is committed to

embedding sustainability into its day-to-day management and business practices. — Green Supply Chain Construction Results of Zhende Medical in 2024 —

Increasing the proportion of green packaging materials

The Company is committed to achieving sustainable development through strategic carbon path planning.The Company plans to reduce carbon emissions through several approaches: firstly by optimizing production The proportion of recyclable packaging materials climbed to 68%

processes adopting energy-efficient equipment and technologies and reducing energy consumption; secondly

by promoting the use of renewable energy sources such as solar and geothermal energy to reduce reliance The procurement volume of FSC-certified packaging accounts for 60%

on fossil fuels; and thirdly by strengthening supply chain management selecting environmentally-friendly

materials and reducing carbon emissions in the packaging process. The Company will regularly assess and Optimizing the sustainability of plastic packaging

report on the progress of its carbon emission reduction efforts to ensure the achievement of its goals while

actively engaging in industry collaboration to promote the green transformation of the healthcare sector.The Company completed the development of degradable PE stretch film and continued to boost the optimization of other

degradable and recyclable plastic packaging.——Dasen Xu CEO

ISCC PLUS certification 1 promoted the The Company used FSC-certified

2 packaging

Building on this foundation Zhende Medical actively responded to the "3060" dual-carbon goals and joined the Science-Based construction of circular value chain and labels to contribute to carbon reduction

Targets initiative (SBTi). The Company established carbon emission reduction targets for 2030 and outlined a clear path for throughout the product life cycle

achieving these goals. Zhende Medical has continued to strengthen the development of a green value chain contributing to the

low-carbon transformation of the industry and promoting the high-quality development of the medical and healthcare sector. Zhende Medical is dedicated to advancing the The company currently selects FSC-certified suppliers

circular economy and actively promoting sustainable for its carton label and inner box packaging. In 2024

development by continuously exploring new approaches the Company used a total of 14.69 million FSC-certified

SBTi-Commit in 2024 SBTi-Target set in 2026 Compliance with dual-carbon targets in 2030 to energy conservation consumption reduction packaging and labels contributing to carbon reduction

efficiency improvement and environmental protection. throughout the product's entire lifecycle.Grasping the existing Improving energy Making energy Achieve the In 2023 the Xuchang production site of Zhende Medical

situation Fulfilling responsibility efficiency transformation goals successfully obtained ISCC PLUS certification marking

a significant milestone in sustainable production. The

Organize carbon verification Scope 2 decarbonization Energy saving management Clean energy use

Product carbon footprint through green electricity Energy efficiency system (photovoltaic and geothermal site manufactures surgical garments using certified

Supply chain Scope 3 emissions Waste heat recovery energy) renewable raw materials and embraces the concept of a

Investigation: Set key Steam accounts for 52% of Equipment upgrading Purchase renewable power circular value chain ensuring that the entire production

emission factors Scope 2 …… Optimize steam system Scope 3 emissions account process complies with environmental standards and Emission targets: Establish Increase alternative fuels (coal

SBTi scientific carbon for 81% of total emissions to gas and petrochemical fuel minimizes its environmental impact. This initiative

targets to biological fuel)

With 2023 as not only demonstrates Zhende Medical's strong

the base year commitment to environmental and social responsibility

Scope 1 2974.48t Supply chain: Scope 2 Energy Scope 2: Energy conservation Photovoltaic development and GHG emissions but also sets a benchmark for the industry. Photo of Inner Packaging Box FSC Certificate

Scope 2 93053.09t conservation and emission and emission reduction use (renewable energy ratio > reduction in Scope 1 and

Scope 3 426694.25t (absolute energy falling 15%- 30%)Process digitization: Energy BI 20% power + lean) Scope 2 will fall

Percentage of Scope 3 by System Renewable power (100% of Notes:

category Scope 2: Energy BI System power in Scope 2 shifting to Construction and Maintenance by 42% in 2030.Department: Scope 2 Renewable (leak point optimization - renewable power) 1. ISCC PLUS (International Sustainability & Carbon Certification PLUS) is an extended version of the ISCC certification system designed for sectors such as bio-based materials 1 Materials purchase 82% energy development Power + process digitization) Steam optimization the circular economy and recyclable materials. As one of the world's leading sustainable supply chain certifications it supports the circular economy model full-chain traceability

2 Assets purchase 5.1% Scope 3 environmentally friendly (petrochemical to biological and the efficient use of resources. ISCC PLUS covers a wide range of industries including bioplastics chemicals food and feed packaging and textiles contributing to the

3 Product waste disposal 4.8% and low-carbon materials energy and gas to electricity) With 2023 as the achievement of sustainable development goals by global companies.

4 Upstream transportation 2.7% development base year GHG 2. The Forest Stewardship Council (FSC) is a global leader in sustainable forest management renowned for its rigorous authoritative and credible certification system. FSC is

Procurement: Scope 3 Supplier

5 Energy activities 2.4% emissions per dedicated to promoting responsible forest management and the harmonious coexistence of forest ecosystems and human society with the vision of securing global recognition emission reduction for the true value of forests.

6 Employees commuting 2.2% Operations Management Center: unit of revenue in

Transportation Scope 3 will drop

All employees: Low Carbon

Action by 51.6% in 2030.In 2024 the ESG Office cooperated with the procurement department and shared ESG information and communicated on

climate change and other related topics with core suppliers on a quarterly basis with the training coverage rate of up to 88%.

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Production Process Optimization As one of Zhende Medical's core values transformative innovation is the spiritual element that guides the entire company in aligning with common goals and behaviors. The spirit of transformative innovation motivates and

guides every employee to drive progress through innovation advancing production technology and improving on-site

management. This approach enhances production efficiency ensures product quality and better equips the Company

to compete in the modern business landscape laying a solid foundation for sustainable development.Lean Production Performance of Zhende Medical in 2024

— Lean Production Results of Zhende Medical in 2024 —

TPI 1 Key Results in 2024

113 2340 The Shaoxing Base Pouch Manufacturing Manual Line Efficiency Improvement Project introduced U-shaped CELL lines to Completed TPI projects A total of employees participated in the lean optimize logistics routes reduce work-in-process (WIP) inventory and achieve continuous flow operations. This initiative

Made cost reduction of RMB 5.8 million knowledge training among whom resulted in a manpower savings of 8 employees across two shifts.The Xuchang Base Composite Machine Edge Cutting Specification Optimization Project improved the stability of the

Completed 5650 formulations of 39 employees passed the basic level exam composite machine slitting operation. By identifying the stability level of the equipment’s processing the project monitored

standard working hours 13 fluctuations in the actual slitting dimensions during production controlled the slitting width of waste materials and employees passed the Level 1 training exam reduced the use of wider raw material specifications. This resulted in an estimated annual net benefit of approximately

Improved 5121 proposals 7 RMB 240000. employees passed the Level 2 training exam

Achieved 6800 person-time participation The Anhui Base Non-Woven Self-Adhesive Bandage Glue Savings Improvement Project reduced glue waste during

44 employees passed the equipment training exam production by modifying the end baffles of the double-layer coating machine. This change led to a reduction in glue in proposal improvement consumption resulting in an estimated annual net benefit of approximately RMB 480000.

The Xuchang Base implemented automation equipment to enable continuous operations for the soft-folded fabric

products including automatic cutting automatic inkjet printing and automatic counting and stacking. This automation

eliminated the need for manual stamping and removed production gaps between processes resulting in an estimated

annual net benefit of approximately RMB 180000.The Xuchang Base Automatic Roll Change Improvement Project introduced automation equipment to enable the automatic

roll change operation for the three-antibody equipment. This innovation also reduced material losses caused by manual roll

Six Sigma Projects Key Results in 2024 changes resulting in an estimated annual net benefit of approximately RMB 1.04 million.The Anhui Base Automatic Heat Shrink Packaging Machine Introduction Project implemented automated equipment

to enable automatic application and heat sealing of shrink film for elastic bandage and ripple bandage products. This

Initiated and completed Trained a total of Accumulated a total of automation resulted in an estimated annual net benefit of approximately RMB 180000.

13 Black Belt projects and 12 Black Belts and 18 Black Belts and

10 Green Belt projects. 18 Green Belts. 43 Green Belts. Gauze folder machine

In 2024 the Company and developed and designed a new generation of gauze folding machines replacing traditional

American-style folding machines with modern technology and equipment. The new machine accommodates various

folding requirements such as center-folding compatibility with different cutting sizes both sparse and dense gauze and

adjustable layers of 8 12 or 16 while ensuring the folded edge width remains within 1.5 cm. By optimizing the production

process raw material usage per gauze piece was reduced by 4.4% and single-channel production efficiency increased by

185.7%. This technological upgrade not only significantly improved production efficiency but also lowered manufacturing

BPIT2 Key Results in 2024 costs and optimized workshop energy consumption and space utilization. Upon full implementation the transformation is

expected to save approximately 3800 square meters of production space.Completed 74 BPIT projects 14 employees passed the Green Belt certification

Realized cost reduction of RMB 5.12 million 8 employees passed the Black Belt certification

Saved 45000 working hours Zhende Medical continued to deepen its commitment to lean production by encouraging each facility to strengthen

cultural development through improvement proposals continuously optimize production processes and enhance

equipment efficiency and operational quality. This year the Company intensified its focus on workshop-level

improvement initiatives with a strong emphasis on operational models process flows product quality equipment

management and material utilization. It established formal management regulations for proposal improvements and

encouraged frontline employees to identify issues and suggest solutions based on their day-to-day responsibilities.Notes:

1. Total Productive Improvement (TPI) is a continuous improvement method in lean production which focuses on enhancing production This approach not only improved employees’ problem-solving capabilities but also fostered a culture of continuous

efficiency reducing waste and optimizing processes through company-wide participation ultimately achieving the goals of lean production. improvement. During the reporting period process optimization efforts helped the Company reduce annual costs by

2. Best Practice Implementation & Transfer (BPIT) is a concept in lean production which emphasizes the implementation and replication of

successful experiences within or across organizations thereby elevating overall operational efficiency and quality levels. RMB 39.86 million significantly supporting the improvement of operational efficiency.

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Use of Clean Energy — Green Office Results of Zhende Medical in 2024 —

Zhende Medical actively promoted the transition to clean energy by steadily advancing photovoltaic power generation Electricity consumption per Usage of disposable Usage of plastic

projects around key production bases increasing the purchase of green electricity and utilizing renewable energy capita in office buildings paper cups was reduced pens was reduced decreased year-on-year

sources such as biomass steam and geothermal energy based on local conditions. These efforts have gradually

increased the proportion of clean energy in its operations and contributed to reducing carbon emission intensity in 9.2% 10000units 6000units

production and business activities thereby laying a solid foundation for achieving the dual-carbon goals.— Zhende Medical’s Green Office Initiatives —

— Clean Energy Use Results of Zhende Medical in 2024 — Action Planning Expected annual effect

Reduce use of paper Reduce the use of disposable Reduce 194 kg of carbon

cups 1 20% dioxide equivalentpaper cups by per year

20-year-old

and will eliminate the mature tree

In 2024 the Company The steam energy of The Kenyan factory Shaoxing Base purchased A total of 50000 office use of disposable paper

expanded the Xuchang Xuchang Base adopted geothermal 500 paper cups were used in adopted MWh of green cups by 2029 Ｘ 1

Base and established new 100% 2024biomass steam energy and electricity ≈

solar photovoltaic power which is mainly used for photovoltaic

facilities at the Anhui steam sterilization gauze energy. Reduce use of office Reduce 2625 kg of carbon

and Kenya bases with bleaching and other

paper 2 Reduce the use of office dioxide equivalent

a cumulative installed production links. paper by 5% per year and 20-year-old

capacity of 35 MWp. mature tree

A total of 250 million will decrease it to 65% of the

pieces of office paper was 2023 level by 2030

used in 2024 ≈ Ｘ 13

In the future the Company will continue to advance the development of clean energy projects at key bases. The Phase

Encourage Reduce 897 kg of carbon

II Photovoltaic Project at the Huaian Base in Jiangsu is scheduled to be typo: out into service in 2025. Photovoltaic carpooling 3 30 carpools are added to dioxide equivalent

projects are also being actively promoted at the new Shaoxing Base and the Shanghai Base. In Xuchang the Company each commuter hub saving 20-year-old

mature tree

plans to expand its photovoltaic capacity while maintaining a stable supply of biomass steam. Internationally the In 2024 the total mileage of domestic the driving mileage of 5190

Phase II Photovoltaic Project at the Kenya facility is also expected to be operational in 2025 further enhancing the use major commuter routes 4 was kilometers per year Ｘ 5

of geothermal and other clean energy sources. Through these initiatives the Company aims to increase the proportion 69800 kilometers ≈

of clean energy in its operations and accelerate the green transformation of its key bases.Eliminate the use of Reduce 2160 kg of carbon

bottled water 5 dioxide equivalent

Publicity and Implementation of Carbon Reduction By 2030 the use of bottled 20-year-old water will nearly reach zero mature tree

Awareness 12000 bottles of bottled 11

water 6 were used in 2024 ≈ Ｘ

Zhende Medical places great importance on integrating low-carbon principles into its daily operations actively

Notes:

promoting green office practices and encouraging all employees to participate in low-carbon initiatives. The Company 1. According to the Full Value Chain Carbon Footprint Analysis Report of Disposable Paper Cup every 1000 water-based coated paper cups can generate carbon emissions of

19.47kg CO2e only after recycling.

has implemented energy-saving and consumption-reduction measures through centralized management of energy- 2. According to the Full Life Cycle Greenhouse Gas Emission System of Chinese Products (2022) the carbon footprint of a piece of A4 paper is 16gCO2e and the carbon emission

consuming equipment 5S management practices and the monitoring of water and electricity usage in office buildings. of A4 paper after printed by laser printer is 5gCO2e. The carbon emission of a piece of A4 paper totals 21gCO2e from production to use.

3. Carpooling activities are mainly concentrated on the following routes: 24 km from Shaoxing Headquarters to Shaoxing North Railway Station 50 km from Shaoxing

It also strives to reduce the use of disposable products by adopting low-carbon procurement promoting paperless headquarters to Hangzhou Xiaoshan International Airport 11 km from Xuchang base to Yanling Railway Station and 88 km from Xuchang base to Zhengzhou Xinzheng

International Airport.office practices and enforcing plastic reduction measures. Additionally Zhende Medical has enhanced waste sorting 4. According to the Coping with China's Climate Challenge: Insight Report on Financing the Transformation and Achieving a Net-Zero Future carpooling commuting reduces

and the centralized treatment of recyclable materials encouraging employees to properly classify and dispose of waste 173gCO2e per kilometer in average.

5. According to the "Hangshui" carbon label the greenhouse gas emission of each bottle of water during the "full life cycle" is 0.18kgCO2e.

to support resource recycling. 6. The water consumption is 6000 bottles (50% of 380ml bottles and 50% of 500ml bottles) in Shaoxing and 6000 bottles (mainly 500ml bottles) in Xuchang and other regions.

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Promoting Green Being A Reliable

Management System Growth Development Partner

The Company has identified the improvement space for low-carbon office through 5S inspection. During the reporting Waste classification has become a new fashion of the Company: Zhende Medical’s waste classification records

period the Company took the Low-carbon Office Evaluation group standards released by Chinese Society of Technology

Economics in 2022 as the benchmark set an annual target of 90 points and implemented improvement actions in the

Since the implementation of garbage sorting Zhende Medical has completed the allocation and updating of garbage

three fields: low-carbon office operation green working style and low-carbon awareness promotion contributing to the bins and other hardware facilities pursuant to the requirements of Regulations on the Domestic Waste Management

realization of green office through the use of energy and resources the procurement and operation & maintenance of in Zhejiang Province and arranged more than 100 garbage bins in the Company's office area and production park. The

Company has also adopted a series of effective measures to upgrade the garbage sorting hardware facilities thus

office supplies and the management and recycling of wastes. contributing to the development of garbage sorting habits of employees.Well-equipped facilities

The Company has upgraded the garbage station providing four-color trash cans in line with the national standards and

Nowadays environmental awareness is increasing day by day. Green office and low-carbon achieving centralized sorting. The garbage room is provided with a classified information bulletin board to indicate the

operation have become important directions for the sustainable development of enterprises which garbage collection company and the destination of garbage. The public area of the office building has been equipped

not only helps to reduce the negative impact on the environment but also enhances the corporate with recyclable garbage bins and other garbage bins and harmful garbage such as batteries and ink cartridges are

image and lowers operating costs. uniformly dealt with by relevant departments. In addition the Company has also provided four kinds of garbage bins for

"other garbage" "recyclables" "harmful garbage" and "kitchen waste" at the centralized garbage point and entered into

service contracts with specialized garbage collection and transportation companies.Extensive training and publicity

——Betty Ye Low Carbon Project Leader of Zhende Medical

The Company released learning materials on garbage sorting on the internal E-learning platform provided the most

common cases in response to the common classification questions and helped employees to have an overall

understanding and grasp of garbage sorting through online interpretation

— Green Office Management Measures of Zhende Medical —

In the future Zhende Medical will further strive for the

promotion and education of garbage sorting organize

Establishing a unified control mechanism for energy consumption equipment and regularly more targeted training activities and elevate the

switching the cooling and heating modes of air conditioners; classification accuracy and enthusiasm of employees.Energy and Optimizing lighting and water management and adjusting the operating time of road lamps

The Company will improve the mechanism to ensure

resource use LOGO lamps and hot water faucets according to seasons;

the strict implementation of garbage sorting. It will

Intensifying routine supervision and inspection conducting energy use checks and reporting also introduce advanced waste sorting technology and

abnormal situations; equipment to enhance sorting efficiency and quality.Making hydropower data monitoring regularly analyzing abnormal energy consumption and In addition the Company will further cooperate with

following up rectifications. specialized recycling enterprises to achieve the resource utilization of wastes thereby contributing more to green

and environmental protection and fostering a better

future of sustainable development.Achieving plastics restriction and low-carbon procurement by increasing degradable

packaging bags in the canteen purchasing degradable garbage bags disposable

Procurement of toothbrushes and combs made of straw and kraft paper file boxes and file bags and

office supplies specifying more environmental-friendly reception tea break standards;

Realizing efficient operation and maintenance of office supplies by optimizing administrative The Company confirmed and followed on the implementation effect of the improvement plan and the low-carbon

inventory material requisition equipment recycling and office area space integration. office assessment reached 94 points in 2024. In the future the Company will continue to deepen its practices in terms

of low-carbon mobility low-carbon activities and low-carbon catering thereby contributing to the steady improvement

of the low-carbon office performance and to the green and low-carbon development of the Company.Achieving effective waste management by reducing more than 50% of garbage bins and

garbage points harmlessly treating of wet wastes and intensively disposing of recyclable

wastes;

Proposition of green Developing Vehicle Management Rules and encouraging employees to carpool for green mobility;

work style Putting up low-carbon signs in multiple areas showing low-carbon publicity posters on

elevator LED screens organizing garbage pickup activities and raising employees' low-carbon

awareness.Regularly conducting electricity use inspection

39 40Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

04

ESG

commission

opportunity

Improving Governance System Supply chain collaboration opportunityTrade risk

EHSS risk

33.33% of female directors 10 internal audits

Corporate Governance System Compliance Operation Management 3 investor exchange meetings 23 sessions of anti-corruption theme training

41 42Sustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Corporate Governance System Protection of Investor Rights

Corporate Governance Structure The Company performs its information disclosure obligations in a truthful accurate complete and timely manner in strict accordance with laws and regulations and the Articles of Association the Information Disclosure Management

System the Internal Reporting System for Material Information and Information Disclosure Deferral and Exemption

Zhende Medical has formulated the Articles of Association to continuously improve the corporate governance structure Business Management System etc. and does a good job in maintaining confidentiality prior to the information

and standardize its operations. The Company has established a corporate governance structure consisting of the General disclosure to ensure that the information disclosure is open fair and equitable and that it effectively safeguards the

Meeting of Shareholders Board of Directors and Board of Supervisors. We have formulated systems such as the Rules of interests of the investors in particular the small and medium-sized investors.Procedure for Shareholders’ General Meeting Rules of Procedure for Board of Directors and Rules of Procedure for Board

In terms of equal treatment of small and medium-sized shareholders the Company follows the principle of equality

of Supervisors ensuring that the General Meeting of Shareholders the Board of Directors and the Board of Supervisors when carrying out investor relations management activities to treat all investors equally. Particularly it creates

exercise decision-making and supervisory power with an increasing level of independent operation. opportunities and provides convenience for small and medium-sized investors to participate in the activities and

arranges on-site visits discussions and communication

The Board of Directors consists of four specialized committees: Strategy Committee Audit Committee Nomination

Committee and Compensation and Assessment Committee. All members of the specialized committees are directors. In terms of related-party transactions the Company has established an effective mechanism for the operation and

Independent directors hold the majority and serve as the chairman of the Audit Committee Nomination Committee and supervision of such transactions. The annual estimated related-party transactions are confirmed and implemented

Compensation and Assessment Committee. Each committee strictly fulfills its responsibilities in accordance with relevant after being voted on by the board of directors and deliberated by the independent directors and the shareholders'

meeting which ensures that the daily related-party transactions involved are necessary for the Company’s daily

regulations and fully utilizes its professional advantages to improve the scientific decision-making of the Board of Directors. production and operation. The transaction pricing is fair and reasonable and will not adversely affect the Company's

— Corporate Governance Structure of Zhende Medical — financial position and operating results nor affect the Company's independence nor jeopardize the interests of the

Company and its other shareholders especially the small and medium-sized shareholders.General Meeting of Shareholders The Company has formulated the Investor Relationship Management System and established diversified investor

communication channels. Through the Company's shareholders' meeting

Board of Supervisors performance briefings investor hotline mailboxes reception of investor research During the reporting

visits and other means the Company communicated with investors to safeguard period the Company

the legitimate rights and interests of investors especially the interests of small

Board of Directors and medium-sized investors enhance the investors' understanding and trust of the held 3 investor exchange

Company and listen to the investors' opinions and suggestions in a bid to improve meetings.the Company's governance.— Investor Communication Channels —

Strategy Committee Audit Committee Nomination Committee Remuneration and Assessment Committee

During the reporting period the Company held the General Meeting of Shareholders and meetings of the Board of

Directors and Board of Supervisors in accordance with legal procedures. Each specialized committee of the Board

of Directors performed their responsibilities and improved the level of enterprise management and risk prevention

capabilities. The maximum interests of the Company and all its shareholders were safeguarded.

0575-88751963 dsh@zhende.com

— Composition of the Board of Directors and Board of Supervisors and Operation of Shareholders’

General Meeting and Meetings of the Board of Directors and Board of Supervisors in 2024 —

1 General Meeting of Shareholders with a total

Composition 9 3 3 Convening of of 11 proposals deliberatedof the Board directors including female directors and

independent directors the General of Directors Meeting of 7 Board of Directors meetings with a total of

Shareholders

and Meetings 30 proposals deliberated including 9 meetings

of the Board of specialized committees of the Board of

Composition of Directors Directors

of the 3 1 and Board of Official website of the Company website of General Meeting of Shareholders investor Board of supervisors including employee supervisor Supervisors 6 Board of Supervisors meetings with a total of Shanghai Stock Exchange e-interaction platform exchange conferences roadshows etc.Supervisors 20 proposals deliberated. of the Shanghai Stock Exchange etc.

43 44Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

The Company designates Shanghai Securities News Securities Times Securities Compliance Operation Management

Daily China Securities Journal and the website of the Shanghai Stock Exchange During the reporting period the

as the newspapers and website for information disclosure. During the reporting Company released a total of 61 Anti-commercial Bribery and Anti-corruption

period it did not keep any information that should have been disclosed and announcements and documents.there was no selective information disclosure behavior. It has properly fulfilled Zhende Medical has established a comprehensive anti-corruption management system and shaped a clean and honest

the information disclosure obligations of a listed company and effectively protected the legitimate rights and interests corporate culture. The Board of Directors of the Company has an Audit Committee responsible for managing and

of investors. making decisions on anti-corruption and business ethics. The Company’s Internal Audit and Risk Control Department is

designated as a permanent body for audit and supervision and responsible for organizing and implementing daily anti-

Zhende Medical has established and improved its sustainable and stable dividend policy and supervision mechanism

fraud work throughout the Company.effectively safeguarded the legitimate rights and interests of investors and distributed dividends to all shareholders

according to the dividend return plan. The Company has continued to improve anti-corruption and business ethics management systems and consolidated

anti-corruption management achievements through various measures such as system construction audit supervision

due diligence and training.— Cash Dividend Distribution of Zhende Medical over the Past Three Years —

Year Dividend distributed per 10 shares (RMB) (tax inclusive)

— Anti-corruption management measures and progress of Zhende Medical —

20226

2023 15 Measures Achievements in 2024

2024 6.5 The company has signed the Commitment Letter for Professional Ethics

and the Commitment Letter for Honest and Clean Practice with employees.Employees are required to prevent corrupt behaviors such as accepting

bribes organizing or participating in entertainment and consumption The signing rate of the Commitment Letter for

activities and soliciting bribes strictly keep business secrets observe

professional ethics enhance the awareness of integrity and self-discipline Professional Ethics with employees was 100%

System and safeguard the legitimate rights and interests of the Company. and the signing rate of the Commitment Letter for

Zhende Medical practiced the "investor- Honest and Clean Practice with employees was construction The Company has formulated the Management System for Bidding and .oriented" concept boosted the high- other systems for external parties. It has issued the “Anti-Commercial

100%Bribery Adherence to Integrity” proposal for suppliers and distributors and The signing rate of the Integrity Agreement with

quality development of the Company signed the Integrity Agreement with them to prevent money exchanges with suppliers and distributors was 100%.and the enhancement of investment employees payment of kickbacks pursuit of private interests and other

corrupt behaviors and establish honest trustworthy reciprocal and win-win

value protected the legitimate rights cooperation.and interests of investors especially Internal review

small and medium-sized investors and The Company has published supervision and reporting channels and

formulated an action plan of "improving telephone numbers and required all factories and marketing centers to

carry out internal supervision and audit. Compliance audit was conducted annually in each

qua l i ty increas ing ef f ic iency and Supervision factory and the audit report was delivered at the External audit annual management meeting of the Company

highlighting returns" in combination with and review Every year the Company has accepted audits from independent third and was incorporated into the rectification of each

its development strategy and realistic parties at the request of customers demonstrating its transparency and factory.compliance. In addition to financial audits the Company has also accepted

business conditions. Specific measures ethic reviews from independent third parties every year with business

included focusing on the main business ethics as one of the main topics.emphasizing investor returns stressing The Company provided anti-fraud case training

the quality of information disclosure The Company has continued to provide customized business ethics and analyzed fraud cases including duty-related training courses covering employees in all key positions. The training has misappropriation embezzlement of funds and

standardizing operation and improving recorded and tracked the training effect through the E-learning platform briberies of non-government workers to enhance

corporate governance and strengthening improving employees’ awareness of business ethics. the vigilance of employees. Awareness For all employees the Company organized the Enterprise Business Ethics During the reporting period the Company organized

the responsibility of the "key minority". training Training - Enterprise Anti-corruption and Anti-bribery to strengthen their various anti-corruption theme training for 23

sense of self-discipline and continuously enhance their business ethics; times involving sales procurement infrastructure

The Company released the Code of Business Conduct and also organized and other departments. The proportion of directors

training on Anti-commercial bribery and Complaint Reporting Management receiving anti-corruption related training was

Regulations for partners. 100% with the training time of 2 hours per

person.

45 46Sustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Measures Achievements in 2024 During the reporting period the Company conducted 8 routine

audits and 2 special audits covering the procurement cost assets During the reporting period the Company

The Company has adopted a zero-tolerance attitude towards corruption engineering remuneration and safety production units. Through conducted

fraud and money laundering formulated the Regulations on the

Management of Anti-commercial Bribery Complaints and Reporting and the mode of "audit + rectification" the Company has constantly

established a reporting hotline and email to ensure the transparency and 8 2optimized its business process and operating mechanism. routine audits special audits

smoothness of reporting channels. At the same time the Company takes

protective measures for complainants and whistleblowers. Those who

Supervision violate the regulations by disclosing information about whistleblowers

or retaliating against whistleblowers will be dismissed with their labor During the reporting period the number of

and contracts terminated. In case of violations against the law related corruption reports received by the Company was 0. — Routine Audit and Special Audit Results of Zhende Medical in 2024 —

reporting personnel will be transferred to the judicial authorities.Reporting channels Type Audit Module Audit Scope Audit Results

Hotline: 18658516729

Email: tousu@zhende.com Audits were made for key systems

Mailing address: Zhende Medical Headquarters (Internal Audit and Risk Seven items for the process construction and implementation

Control Department) Yuecheng District Shaoxing City Zhejiang Province subsidiaries involving cost procurement assets labor

Routine audit engineering safety production and others.Completed a total of 10

One item for sales Freight management sales management items in routine and special cost verification and others

audits identified improvement

Anti-Unfair Competition points and made

One item for compliance Conducted internal audit according to AEO standards improvement as planned

The Company has strictly observed the Anti-Monopoly Law of the People’s Republic of China the Anti-Unfair Competition Special audit Cost information cost management cost

Law of the People’s Republic of China the Price Law of the People’s Republic of China and the Advertising Law of the One item for cost input and output system process and

People’s Republic of China and other relevant laws and regulations standardized the employee confidentiality system in others

the Employee Handbook and refused to seek competitive advantages through unethical and illegal business practices.Zhende Medical has established and improved internal management system and self-discipline mechanism The Company has laid stress on the enhancement of the employees’ legal

standardized employee behavior and prevented unfair competition from inside the Company. In addition the Company awareness and designed hierarchical law-abiding and compliance training During the reporting period

has also formulated a reporting mechanism to encourage employees to report any unfair competition act. Once verified courses according to the characteristics of different posts. The trainings were 543 people attended the

through investigation any unfair act shall be dealt with according to relevant laws and regulations and the Company's carried out through the E-Learning platform. training courses

internal rules and the information of whistleblowers shall be strictly protected to avoid retaliation. In addition this year

the Company also performed publicity and training to boost the construction of anti-unfair competition management

system and corporate culture. Intellectual Property Protection

Zhende Medical has firmly implemented the responsible marketing concept complied with national laws Zhende Medical has attached significant importance to the protection of independent intellectual property rights and respected

and regulations actively advocated an active and healthy lifestyle laid stress on the accuracy of marketing & the intellectual property rights of others. We established a sound intellectual property management system and passed the

communication terms and the scientific and rigorous description of product performance and strictly implemented the intellectual property management system certification of the China National Intellectual Property Administration for the first

advertising review system. During the reporting period the Company developed and released the Brand Management time in 2016.Standards systematically regulated the information release and review process and established a strict review process

for external information release. Through multi-level checks by multi-level personnel at various posts the probability The Company has established a top-down intellectual property management structure and intellectual property compliance

of misleading information to the public was effectively reduced thereby avoiding the potential risk of misleading management system and designated management representatives to ensure the effective operation of the system. The

consumers. In addition Zhende Medical performed responsible marketing training for all marketing personnel Company has also formulated the Intellectual Property Compliance Management Manual Intellectual Property Management

including marketing brand and after-sales personnel stressing that any one shall not infringe on others' intellectual Regulations Patent Value Evaluation Rules Patent Application Management Rules for New Products and other systems and

property rights and shall not publicize mistaken or exaggerated product information. carried out the planning implementation inspection and improvement of intellectual property management thereby providing

a significant guarantee for the technological innovation and sustainable development of the Company. During the reporting

Internal Control and Audit period the Company developed relevant procedures for intellectual property risk assessment and management established

response strategy for identified risks and released documents such as Intellectual Property Protection Compliance Control

Zhende Medical has formulated the Internal Audit Provisions and Implementation Rules on Contract Approval Management Procedures and Intellectual Property Emergency Plan.and other systems. Under the guidance of the Audit Committee of the Board the Internal Audit Risk Control Department

of the Company headquarters is in charge of internal audit risk management and other related work. The Internal Audit This year Zhende Medical established a long-term goal for intellectual property i.e improve the intellectual property

Risk Control Department regularly conducts routine audits and special audits and regularly identifies and evaluates compliance management system raise the independent innovation capability bolster product transformation and upgrading

various risks in routine work collects risk management opinions and reports risk control to the Board of Directors. and contribute to the sustainable development of Zhende. In addition the intellectual property goals are planned as follows:

47 48Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

In addition the Company has actively performed

intellectual property publicity and training activities

for employees. In 2024 the Company launched the

intellectual property competition on the "Intellectual

The coverage rate of intellectual property protection reaches 100%;

a 100% of intellectual property control during product life cycle (involving project initiation survey market Property Day". By linking market side and the R&D

launch production sales after-sales withdrawal and others.); side the Company also held two exchange meetings

b Full-process management and control of intellectual property (including patents trademarks copyrights onpatent mining. The Company organized the

technology development contracts and others) Marketing Department of each marketing center to

carry out basic intellectual property training three

Establish and improve the enterprise intellectual property compliance management system and intensify the

times and effectively arranged intellectual property

full chain protection of enterprise intellectual property;

internal auditor training with 4 individuals passing

the internal auditor examination.Moreover the Company has endeavored to protect our core competitiveness strictly inspected counterfeits of our brands

regularly monitored trademark infringement and closely monitored the Company’s trademark registration information in

the market search engines professional trademark databases official trademark announcements and other channels

to determine whether there is unauthorized use of our trademarks. In 2024 we found many companies registered

similar products with the trademark “Zhende”. Eventually the Company filed complaints about the trademarks regarding

trademarks related to its main products thereby maintaining the reputation of the trademark “Zhende”. During the reporting

period the Company had no violations relating to intellectual property rights.In 2024 the Company was granted

New Class II medical device Invention patents

registration certificates 28

9

As of the end of the reporting period

the Company has had patents Class II medical device

for invention registration certificates

105136

Class III medical device Awarded the title ofregistration certificates “National Intellectual Property

11 Demonstration Enterprise”.

49 50Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

05 Actual performance Actual performance

KPI and target values by 2030 Goals by 2025 Progress

in 2023 in 2024

The work-related injury rate per one

thousand employees is lower than 0.5 <0.5 0.45 0.38 ↓

Caring for employee growth Female senior executives (above director level) account for up to 20% >20% 23.80% 26.3% ↑

Employee Net Promoter Score (E-NPS) is

over 70 >64 69.33 75.55 ↑

Protection of Employees’ Employee Training and Occupational Health The average training time of employees is

greater than 60 hours >56 64.77 hours ↑Rights and Interests Development and Safety 64.9 hours

51 52Sustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Protection of Employees’ Rights and Interests The Company has adopted a series of employment measures aiming to create more employment opportunities for

the society:

Employee Recruitment and Employment Expand the size of recruitment and offer diversified posts: The Company provided a variety of posts from production

line to management R&D and sales in different regions of the country to meet the employment demand of talents at

The Company has adhered to legal employment and been committed to building an equal diverse and inclusive

various levels. In addition we strove to attract talents through social recruitment online recruitment platform and other

workplace culture. The Company has observed the Labor Law of the People’s Republic of China the Labor Contract

channels. Zhende Medical attaches great importance to campus recruitment recruiting nearly 100 outstanding college

Law of the People’s Republic of China and other laws and regulations formulated regulations such as the Management

graduates every year.Rules for Signing Labor Contracts and the Recruitment Management Rules for General Workers defined relevant

provisions in the Corporate Social Responsibility Management Handbook clearly prohibited child labor and forced labor Intensify school-enterprise cooperation and cultivate specialized talents: We jointly launched modern apprenticeship

and prevented workplace discrimination and harassment. classes with Henan Vocational College of Water Conservancy and Environment attempted targeted training programs

and provided internship and employment opportunities for students. We also cooperated with Zhejiang Sci-Tech

The types of employment include full-time employment labor dispatch and re-employment after retirement. Posts

University to establish a school-enterprise employment practice base further helping college students to enter the

involve human administration research and development marketing sales finance production and manufacturing and

enterprises for employment.others. The production and manufacturing posts may involve labor dispatch workers in terms of employment relations.In recent years the Company has actively carried out the strategy of talent introduction and intensified the talent Increase industrial investment and expand employment: Xuchang Zhengde invested in the spunlace non-woven fabric

reserve through targeted recruitment from colleges and universities school-enterprise cooperation and so on. production project in 2024 which can provide 300 jobs and promote the employment of 1000 people in the relevant

industrial chain after the project’s operation. Currently Zhende Medical has more than 100 supporting enterprises at

Yanling County and the whole industrial chain can provide nearly 10000 jobs.— Employee Recruitment and Employment of Zhende Medical —

The Company has always respected and cherished talents and laid stress on compliance fairness and transparency

Prohibition of child labor in recruitment and employment work. In order to effectively create a fair orderly and trustworthy talent selection

environment the Company has implemented the following actions and measures.Strictly implement the ID card-based assessment system before employment;

If child labor is found to be recruited by mistake the Company will notify their parents to take them back bear their travel

expenses for returning home and all fees for their compulsory education.Establish clear Ensure that all recruitment decisions made are in line with the Company’s policies and laws and

recruitment policies and regulations specify the process and responsible person at each stage and prevent personal bias of

Prohibition of forced labor procedures supervisors from affecting recruitment results.If forced labor is found employee representatives should investigate into the matter and ask for opinions from the forced Make public job Extensively publish recruitment information inside and outside the Company disclose contact

workers. Within a week a meeting with the management will be set to seek solutions together or report to the public safety information information to the public ensure that all qualified candidates have the opportunity to apply for relevant

organs. posts and prohibit any discriminatory conditions in the published recruitment information.Formulate fair Make clear job requirements establish evaluation standards and interview guidelines and ensure that

Prevention of workplace discrimination and harassment recruitment standards each candidate are subject to consistent objective and fair evaluation standards.Make it clear that the Company shall not engage in any discriminatory behavior against employees due to their race social Take diverse recruitment In addition to traditional recruitment channels also use social media internal recommendation campus

class nationality religion disability gender or gender orientation etc.; channels recruitment and other diversified channels to acquire more talents with different backgrounds.Establish a multi-channel grievance mechanism through the grievance box internal email address telephone (0575-88082530)

union representatives and others. This mechanism provides anonymous complaints and takes adequate protection According to the Management and Training for Recruiters organize training for HR personnel and

measures to ensure the confidentiality of complainants and protects complaint-making employees from being retaliated/ Train recruitment-related personnel interviewers participating in recruitment to prevent discriminatory behavior of recruiters and enhance

penalized; recruitment fairness.After receiving the complaint the Company will respond by investigating into and verifying it as soon as possible and

promptly disclose the progress to the complainant. If the case is true it will handle it in accordance with the system and Establish a feedback Provide a feedback mechanism for rejected candidates enabling them to understand the reasons for

publicize the treatment; in serious cases the Company will assist employees who have been discriminated against or mechanism the rejection and collect feedback to optimize the recruitment process.harassed to report to the public security organs. If the case is not true or if it is a misunderstanding it will intervene for

mediation.Make regular inspection Make a regular inspection of the implementation of the recruitment process evaluate whether the

Provide employees with trainings on the prevention of harassment and abuse. and evaluation recruitment results are in line with expectations and rectify unfair behaviors in a timely manner.

53 54Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

Employee Care and Welfare During the reporting period the Company conducted a comprehensive comparative analysis on remuneration in the market

to assess the competitiveness of the Company’s remuneration system and put forward suggestions for optimization

The Company has adhered to the management principle of “caring for employee”. A comprehensive remuneration to attract and retain key talents more effectively. Meanwhile it gave an active response to market changes significantly

system the Employee Handbook the Welfare Management Rules and the Articles of Association of Medical Assistance reducing unnecessary brain drains and building a solid talent base for the Company’s long-term development.Foundation have been developed to safeguard the legitimate rights and interests of every employee. In addition the

Company has also set up internal honors and awards to recognize employees with outstanding performance and In the management principle of “caring for employees” Zhende Medical has established a comprehensive employee

contributions. welfare system including mandated benefits living allowances health plans and other benefits. The Company paid work-

related injury insurance for all its regular employees with the total amount of work-related injury insurance paid reaching.— Comprehensive Remuneration System of Zhende Medical —

— Employee Welfare System of Zhende Medical —

Basic Inclusive Short-term

Guarantees Policies Care Plan Incentives Mandated benefits Living subsidies Health plan Other benefits

Medium-term Long-term Spiritual

Incentives Incentives Motivation

Staff dormitory Subsidies for festivals

Social insurance Staff health examination

Group tour

Staff canteen

Annual vacation

Food subsidies

Visits for employees with

Housing provident fund Commercial insurance marriage funeral injury and

Regular buses illness childbirth or major — Comprehensive Reward System of Zhende Medical — family accidents

The Company attaches great importance

to the humanistic care for every employee.The Company has established a mutual

A Training System Challenging Work Tasks Core Competency assistance foundation and all employees

Based on Learning Based on Employee Building Based on

Paths Development the Strategy are members of the foundation which offers

certain support to employees and their

families in need. In addition the Company

has also provided support for employees'

work and life through various forms of

activities such as "five must-visits". For

example when an employee encounters

Safety and Health Performance Internal Improvement Authorization difficulties the Company promptly offers

Environment System Based Management Based on Plan Based on Employee System Based on support and extends its condolences.on Work Environment Strategic Collaboration Dedication and Cultural Trust and Respect

Improvement Identity

55 56Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Relying on sound hardware facilities the Company has carries out cultural and sports activities and holiday

celebrations which enrich employee lives promote organizational unity and demonstrate the power of Zhende. We

Zhende Medical Provided Child Care Services for Employees to Create a Family-Friendly Workplace organized a total of 10 recreational and sports activities festival celebrations and newcomer greeting activities

enriching employees’ cultural life and providing opportunities in do exercises in various activities. At the same time

To solve the difficulty of taking care of employees’ children during holidays enrich children’s lives and promote their

development we have offered winter (summer) vacation care services eight times. We provided homework counseling we encouraged employees to participate in clubs and established yoga badminton table tennis and reading clubs. In

and a series of interest courses such as painting poetry appreciation clay making cupcake making and enhance their 2024 we organized 45 club activities about 800 participants.understanding and friendship between each other through games.In 2024 a total of 80 children received such services. In the future we will continue to work hard in caring for the families of

our employees building a “harmonious and beautiful” home of Zhende.Mid-Autumn Festival Women's Day Flower International AWC Frontline Employees

Mooncake Making Activities Arrangement Activities at Product Line Ningde One-day Tour Activities

at Shaoxing Headquarters Shaoxing Headquarters Xiapu Team Building at Hengdian

Zhende Medical set up a “Love Mother-Baby Room” to solve special demands of female employees

Zhende Medical’s Labor Union has established the “Love Mother-Baby Room” which In addition the Company has also taken measures in various aspects such as enriching food choices creating leisure

greatly alleviated the “difficulty” in breastfeeding for new mothers in the workplace. space holding planting activities and organizing sports events so as to create a diverse and rich life after work for

The room is designed with humanistic details and equipped with baby beds

crawling mats baby wipes back cushions dolls and storage boxes. The warm employees in an all-round way covering all employees of the Company.comfortable neat and clean private space not only guarantees the privacy of the

mothers in breastfeeding but also prevents them from “carrying breast milk” so that

they can work with peace of mind. The Company has provided books on parenting Enrich food Create leisure

experience for the mothers and toys for children. Parking for pregnant women is choices space

available in the basement for easy travel. In addition the Company also organized

activities of sending roses + Zhende gift package on Women’s Day to show care In July a self-operated dessert and bakery stall In August a movie theater project with movie and

and respect to female employees significantly enhancing their happiness. was added offering 45 products including birthday KTV functions was added. Up to now 138 movies

cakes bread and beverages. In August we took and 32 KTV shows have been played attracting a

over the "Yican Haofan" rice stall launching over 70 total of more than 1100 participants in the movie

Zhende Medical Established the Talent Scholarship to Assist in the Study and Development of Employees’ Children dishes and group meal sets serving more than 6500 theater project.customers.To care for employees and their families we brought the Talent Scholarship Foundation into being in 2019 to help employees’

children to further their studies and develop. Our core value of “success-sharing” was therefore put into practice. In 2024

we distributed the Talent Scholarship to 36 students for the sixth time with a total amount of RMB108000. As of the end of

2024 we have accumulatively awarded scholarships to 205 employees’ children with a total amount of RMB 615000. Hold planting Organize sports

activities events

A new employee vegetable garden project was Five major types of employee activit ies and

added with a total of 48 land plots developed in competit ions namely rampage table tennis

two phases and employees took an active part in badminton swimming and basketball with a

planting. competition prize of more than RMB 30000 and

a total participants of 920 in the activities and

competitions.The Company listens to the voices of employees accepts their supervision and takes their suggestions into

The Trade Union organized reading and sharing activities to express attitudes and convey energy

consideration. We further safeguard their rights and interests through coordinating organization mechanisms

Zhende Medical’s Trade Union organized reading and sharing activities every quarter where employees shared their and measures. We will continue to implement improvement measures to enhance employee satisfaction and work

experience of reading numerous classic books covering management logical thinking literature and other fields. The books

shared by the employees not only enriched their knowledge but also boosted cross-departmental exchanges and cooperation. efficiency.

57 58Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

During the

Organizational guarantee Employee Training and Developmentreporting period

The Company headquarters and each subsidiary set up trade unions covering all employees in

China. the administrative Sound Talent Development System

service satisfaction

Institutional guarantee 90.5% In 2024 the Company's internal training for employees highlighted the four directions: skill improvement leadership

Formulate the Regulations on Workers’Congress and hold workers’ congress regularly. development new employee integration and industry information covering the topics such as course development

Sign a collective contract with all employees in China each year and negotiate the minimum the canteen sales skills leadership improvement corporate culture and institutional regulations AI tool use and foreign market

wage standards and payment dates. satisfaction

71.7% access. More than 2000 sessions of trainings were performed online and offline throughout the year covering all

the employees focusing on the enhancement of sales team and management capabilities. The systematic training

Measure-based guarantee

the Trade Union contributed to the improvement of employee efficiency management capability and new employee adaptability.Adhere to the publicity of factory affairs and make public the Company’s relevant systems and work satisfaction

regulations employee benefits and other hot issues of common concern on the OA Intranet.Extensively solicit employees’ opinions and needs throught channels such as democracy 78.8%

discusssion meetings president’s suggestion box and satisfaction survey and measures can During the reporting period the Company carried out training on different subjects and levels for all

be implemented are put into action. For those that cannot be implemented or are difficult to do the new employee employees

so are prompltly explained to employees with efforts made to gain their understanding. satisfaction

Formulate the Information Transfer and Communication Control Procedures which defines the 94%

channels and methods of internal communication among employees (communication channels Training coverage rate Total training duration Average training duration per person

include the Company’s publicity window general manager’s mailbox internal contact letter 100% 506410 64.9

company documents monthly company newspaper and internal network) the employee Net hours hours

Set up an employee suggestion box in the restaurant open it regularly and ensure a closed-loop Promoter Score

management and handling of employee suggestions. (NPS)75.55 Total expenditure on training for Total training sessions

the Company conducted

Diversification and Rights Protection 2.64 million yuan 2282

The Company has upheld the principle of equality and diversity complied with local policies and formulated and

managed a diversity system. In 2024 the Company received various second and third party social responsibility audits

for 12 times of which all were passed.Zhende Medical adheres to the "We Care" philosophy. Based on the self-developed E-learning platform supported by

— Employee Equality and Diversity Measures — the internal trainer system and curriculum structure we have established a talent development system that covers

all employees. This can comprehensively improve their know-how and skills and boost every employee to achieve

success.The Company has treated all ethnic groups equally in the recruitment process.Diversity of Currently the Company’s employees are from the United States Kenya Brazil

employees Malaysia the United Kingdom and other countries and non-Chinese employees

account for 16.9%.Zhende Medical has always deemed employees as the most valuable assets of the Company. The

continuous improvement of employees' professional skills and the continuous enhancement of their

Protection The Company attaches great importance to the proportion of female employees social responsibility awareness and environmental protection concept can inject a steady stream of

of women's in various posts including board members senior management members R&D creativity and innovation into the Company which has become the core driver to fuel the sustainable

rights and personnel new female employees and others to ensure that female employees are development of the Company. Therefore we are always committed to the in-depth integration of

interests treated equally in the recruitment and work process. employee training & development with the sustainable development goals of the Company. With the

help of a systematic training mechanism we endeavor to help employees grow while creating long-

term value for the Company and society.The Company also offers meticulous care to female employees. In view of most female employees' need to balance

family and work the Company has provided special care in combination with their routine family life. For example on ——Jason Hu Vice President of Zhende Medical

Women's Day the Company sent to female employees wonderful holiday gifts showing blessings and care for them;

The Company also set up childcare classes for employees' children to address the problem that parents have no

time to look after children during school holidays. The Company allowed female employees to bring their children to

workplace on the premise of not interfering with their work. Special care is given in combination with childbirth holiday The Company has continuously improved the Training Management Regulations set up a series of supporting systems

child care and others to remove worries of female employees so that they can focus more on work and personal which cover the management of lecturers management courses expenses external training new employee and job

development. For pregnant and lactating female employees if they feel uncomfortable at their original posts they have transfer training learning credits and training administrators. These systems ensure the effective implementation of

the right to negotiate with the Company to adjust their posts or improve their working conditions during the period. training and the realization of the Company’s talent development strategy.

59 60Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

participate in external training and education degree enhancement programs for the sake of further improving

Internal Trainer System Curriculum Structure employee literacy. In 2024 the Company subsidized 20 employees to upgrade their academic degrees with the fund

of up to RMB 23000. Through the introduction of external resources 68 employees participated in the external special

Develop the Management Rules for Part-time Internal Develop the Detailed Rules for Curriculum trainings and received relevant certificates and qualifications.Trainers; Development and Curriculum Structure Management;

An annual meeting of internal trainers is held every Fabricate the annual course development plan In 2024 the Company actively implemented the talent introduction strategy. We have cooperated with a number of

September to review the achievements of the training through annual training research develop the universities through targeted recruitment programs and school-enterprise cooperation programs to carry out campus

system in the past year as well as the contributions curriculum according to the plan and invite high-

of lecturers in teaching and course development and level lecturers and executives to participate in course recruitment and intern recruitment. The Company continuously expanded and optimized the talent pool and enhanced

to commend outstanding internal trainers on site; reviews every quarter; core competitiveness in technological innovation to ensure the Company's leading position in the market competition.So far the internal trainer team has developed to Based on the empowerment needs of business

over 240 members including junior intermediate departments establish secondary colleges for each The Company has paid attention to cultivating inter-disciplinary talents and encouraged cross-functional

and senior lecturers. structure through the E-Learning platform and use interdisciplinary job rotation of employees. During the reporting period we established a job rotation system revised

it as the foundation to build a complete curriculum the Job Rotation Management Rules and proposed key positions for the job rotation plan and tracked the process. The

framework.Company focused on job rotation of three types of people namely university graduates employees in key positions

and senior executives and organized job rotation sharing meetings according to actual situations.In 2024 the Company completed the process-based capacity building by sorting out the overall process and

established and improved the three-level training system for new employees. — Flow Chart for Rotation System Construction —

Process-based capacity building In 2024 the Company officially launched and completed the construction of the rotation system revised System and released the Rotation Management Rules. The mechanism worked efficiently by implementing the

Construction implementation processes such as matching the rotation mentors releasing plans following up OA process

In 2024 we focused on enhancing capabilities across four main processes based on R&D and marketing (domestic TOB of the rotation work plan monitoring monthly reports rotation reports and rotation sharing meeting.process international TOB process large retail commodity department process and new product development process).The initiative covers a total of 25 secondary sub-processes and 121 capabilities. In collaboration with business departments

we have broken down each competency into standard actions and thus built a process-based curriculum system. We

planned to develop 52 courses throughout the year with 46 of them completed the development review and operation. Atmosphere Through the public rotation sharing meeting and reports of Zhende Journal and Zhende Official

Creation Account the Company has fostered a good rotation atmosphere.Three-level training system for new employees

In 2024 the Company planned to rotate 101 employees (excluding 2 who have resigned and 5 with

We improved the system according to the three-level training and Goal Attainment objective exceptions). As of the end of December the overall rotation rate was 99.01% successfully

established the standardized process of training new employees attaining the goal.in the Company. New employees need to receive trainings at

company-level department-level and post-level courses after

entering the Company. In 2024 the new employee onboarding

training process (SOP+ online guidance) was established and

the company-level online training courses and offline intensive

training courses were iteratively improved.In 2024 the Company continued to spontaneously mentor and train new employees reserve cadres and college

students in various areas and departments. The Human Resources Department determined mentor selection

dimensions and requirements based on the situations of systems and mentors and organized the annual appraisal

for excellent mentors. Furthermore the Company planned to collect key behaviors of the selected excellent mentors

based on the mentor appraisal extracting their behaviors and traits with Zhende’s genes forming a portrait of Zhende’s

mentors and improving the mentor management mechanism.In addition to internal training and learning activities the Company has also vigorously supported employees to

61 62Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

Smooth Career Development Channel In order to attract and retain core talents foster the common growth of both the Company and employees and offer

talents a stage to tap their capabilities; Zhende Medical has implemented various incentive measures including equity

Embracing the concept of "We Care" relying on the self-developed E-learning platform and the internal trainer system incentive and option incentive. Furthermore the Company has combined with the talent policy of the local government

and curriculum system the Company has restructured and designed the direction and path of job qualification dividing to positively pursue the corresponding talent incentives for employees.development into two tracks: the M-series (management post) and the P-series (professional post). A new job map In 2024 the Company made a talent review of all employees performed multidimensional evaluations of all employees

has been established creating a transparent and smooth career development channel. In the future professional titles such as capability evaluation performance evaluation and values evaluation and finally produced the review results

will replace job levels and codes will be assigned upon certification. The Company is also restarting the development through the nine-squre grid tool and calibration meetings. The final annual review results of all employees provide a

of qualification standards for all departments with the formulation and certification process expected to begin in reference for the candidate for 2025 Linghang program- backup talents for senior management Huhang program –

2025. Additionally the Company has established a comprehensive reward system to support encourage and guide backup talents for middle management and Qihang program – backup talents for basic management involving a total

employees in their continuous upward development. of more than 1600 employees.In 2024 the Company launched the "Hang" training camp which is a leadership development program designed by

the Company for backup and on-the-job management personnel. It is designed to enhance management personnel'

strategic mindset and leadership skills through intensive training online courses and outreach exercises. It had a total

of 234 participants in 2024 with the employee coverage rate of 13.2%. The Hang programs implemented during the

reporting period included the Linghang program Huhang program Qihang program and Ruihang program.Occupational Health and Safety

The "L inghang Program -

Governance

This training program designed Senior Leadership Training

for grassroots cadres of large Camp" designed for future The Company has attached great importance to the occupational health and safety of its employees and strictly

retail has a training duration of 3.5 executives covers a total of complied with the Production Safety Law of the People's Republic of China the Law of the People's Republic of China on

months. 26 grassroots cadres 34 participants. Internal and the Prevention and Control of Occupational Diseases and other laws and regulations and related requirements in the

are trained and empowered external training resources are course of production and operation.through online course learning integrated through the four modules of digital transformation

o f f l i n e e m p o w e r m e n t a n d transformational leadership& culture organization building and The Company has continued to optimize the occupational health and safety management structure of the

reading sharing. market and customer with a training duration of 1 year. headquarters and subsidiaries and set up a comprehensive and efficient management system. At the headquarters

level the Company has established an ESG Management Committee and the ESG Office under the President Office is

Linghang

program responsible for the construction and operation of the EHS management system. In addition EHS contact personnel are

designated in each department of the headquarters and EHS departments are established in subsidiaries which are

in charge of boosting the implementation of EHS related systems and policies

of the Company. The Company has formulated the EHS Change Management

Rules EHS Supervision and Inspection and Hidden Danger Rectification During the reporting period Zhende

"Hang" Management System EHS Training and Education Management Rules Hazard Medical and its 11 subsidiary

Ruihang training Huhang Source Identification and Evaluation Control Management Rules Occupational companies passed the ISO 45001 program program Health Physical Examination Management System Labor Protective Equipment

camp The "Huhang Program" designed Occupational Health and Safety Management System and other internal systems and updated the EHS

for talents entering Library C and Management System Certification.Accident Management Rules during the reporting period thus contributing to

D in annual talent review. A total the constant improvement of occupational health and safety management

of more than 120 participants requirements.are divided into two training

Qihang camps. Strategies

program

Zhende Medical has embraced the work policy of occupational health and safety highlighting prevention and promptly

identified and removed occupational health and safety risk points by implementing hierarchical control of safety risks

The "Qihang Program" designed for regularly identifying danger sources investigating hidden dangers and taking other management measures thereby

the grass-roots production cadres in contributing to the formation of a complete closed-loop management mechanism. On this basis the Company

the supply chain covers a total of 54 has continued to boost the cultivation of occupational health and safety culture and held regular theme activities

participants 33 courses and 51 class to raise employees’ safety awareness and create a favorable occupational health and safety culture atmosphere

hours. It is developed and taught by 34 demonstrating its commitment to fostering a safe healthy and sustainable working environment.mentors of the Company with a training

duration of 4 months.

63 64Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Regular inspections and hazard rectifications

The health and safety of employees is always our core work. By optimizing the production layout and Conduct quarterly monthly and daily inspections;

introducing environmental protection equipment we can effectively mitigate potential hazards in the

workplace; we regularly held comprehensive safety training support employees with professional Relevant personnel carry out routine inspections regular inspections special inspections comprehensive inspections and

protective equipment. In addition we continue to improve the safety management system intensify require to make rectifications for the hazards within a fixed period of time;

the supervision and assessment mechanism and ensure that all measures are put in place. This Make EHS supervision on relevant parties examine and approve hazardous work behaviors and implement safety measures.series of measures have deeply integrated health and safety into ESG practice thus fostering a safe

and healthy working environment for employees and achieving the win-win situation of the Company

and society.Production equipment safety protection

——Anthony Dong Director of ESG Management Committee Office of Zhende Medical Carry out the "three simultaneous" measures for the changed project to ensure the essential safety level of equipment and

facilities;

Standardize the safety management of special equipment to ensure the safe and compliance operation of special equipment.Management of Impact Risk and Opportunity In order to strengthen the safety awareness of employees and enhance the relevant skills of employees the Company

The Company has relied on hazard identification to systematically review the occupational health risks and potential planned the theme activities of "production Safety Month" every year and continued to organize occupational health

opportunities involved in the production and operations process. The Company has specified management methods and safety theme training covering all employees or employees in specific posts. During the reporting period the

and requirements for key processes such as risk point identification hazard identification and risk assessment. Company organized multiple sessions of occupational health and safety trainings on key contents such as special

They proactively identified risks and developed targeted control measures based on the risk levels thereby effectively equipment safety electrical safety mechanical safety and forklift safety management with a total of 56826 employees

reducing the likelihood of risk occurrence and ensuring the occupational health and safety of employees. During the participating in the trainings. In addition the Company organized the executives above team leader level to receive

reporting period the Company did not experience any major safety responsibility accidents. offline examinations four times a year and front-line employees to receive online safety tests to determine the training

effect thereby further consolidating employees’ occupational health and safety knowledge level and their practical

operating capability.— Major Measures for Occupational Health and Safety Protection of Zhende Medical — — Occupational Health and Safety Themed Training of Zhende Medical —

Hierarchical security control Trainees Training Theme

Develop 1-5 classes of accident control indicators and cascade the objectives at all levels in the form of signing EHS New employee Safety education and training at three levels (factory level workshop level team

responsibility letters. level)

Employees in specific positions Certification training for special operation personnel safety management personnel

Hazard identification assessment and control and responsible persons occupational health training

Festival safety site safety hazardous chemicals cabinet safety related party

Regularly identify evaluate control and update the hazards arising from the production activities and routine management of

All employees construction disclosure safety limited space safety special equipment safety the Company; electrical safety mechanical safety forklift safety management environmental

The managers taking on important positions regularly observe safety behaviors and relevant team leaders regularly organize protection knowledge industrial injury prevention and so on

risk prediction activities.Detection and prevention of occupational hazards Occupational Health and Safety Training Test Performance Highlights of Zhende Medical in 2024

Make regular tests of occupational hazards to determine the posts and employees related to hazards. The occupational

hazards regarding the Company mainly include noises heat strokes electric ophthalmia chemical skin burns and others; 442 executives attended the offline examination with the pass rate of up to 98.3%

Regular occupational health inspections;

Distribute labor protection equipment to employees in specific posts;

Establish the files of employees taking on occupational hazard positions to achieve "one file for one employee". 6044 front-line employees received online safety tests with the pass rate of up to 96.7%

65 66Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

In addition the Company has regularly carried out special emergency drill activities which helped to enhance the

Carried out a series of "Safety Month" activities to raise employees’ safety awareness emergency response capability of employees through the simulation of real scenarios thus ensuring that employees

can take actions quickly accurately and efficiently in case of emergencies and decreasing the possibility of

Publicized related policies and guidelines laws and regulations and elementary knowledge on safety production fire occupational health and safety accidents.control occupational health and others by hanging the "Production Safety Month" banner placing the "Production Safety

Month" thematic display board and using the LED display to roll the activity slogan

Carried out emergency drill activities to enhance emergency response capability

Organized occupational health and safety training to strengthen employees' awareness of occupational hazards

Held KYT activities with the theme of "ethylene oxide dosing operation" identified 11 hazards from the chemical dosing

process labeled 4 important hazards and proposed 8 countermeasures In May 2024 the Company organized an emergency drill coping with chemicals leakage and carried out theoretical

and practical training on the use of fire extinguishers gas masks and alarms at the same time with a total of 35

Held two safety behavior observations on skin care powder making and glue making activities identified 6 unsafe participants.behaviors discovered 17 hazards and formulated 19 risk control measures

In July 2024 the manufacturing workshop of the Company organized fire emergency evacuation drills and held the

Organized the "30-second emergency fire extinguishing capability" assessment activity and randomly inspected the theoretical and practical training on the use of fire extinguishers hydrants and alarms with a total of 128 participants.emergency fire extinguishing capability of workshop employees

Carried out fire competition activities covering fire clothing wearing fire extinguisher extinguishing double people hose-

carrying shuttle run and double people hose coupling with a total of 6 teams participating in the competition.Emergency Drills

Indicators and Targets

Injury rate per 1000 people

Progress towards the target

Phase I "Safety Month" Campaign in Kenya Target <0.5 during the reporting period 0.38

67 68Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

06 Actual performance Actual performance KPI and target values by 2030 Goals by 2025 Progressin 2023 in 20241. All factories that have passed the ISO 14001 All factories pass the ISO 14001 certification maintain the certification. certification. 66.67% 100% ↑2. New factories (e.g. Kenya

phase 2 factory) pass the

certification.Promoting Green Environment-friendly packaging materials for finished products account 68% 65% 68% ↑

for over 80%.Development The Company plans to join the SBTi

and will set target values based on the Reduce by 6% Reduce by 8.3% Reduce by 5.8% ↓

goals established by the SBTi.Environmental Management Resource Conservation and Climate Change Mitigation and Renewable electricity accounts for over >24% 11.1%

System Utilization Adaptation 30% of total electricity consumption. 20% ↑

69 70Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Environmental Management System

According to the Company's sustainable development plan we will upgrade production equipment and optimize

Environmental Compliance Management the technological process to reduce greenhouse gas emissions during the production process and gradually

phase out high-energy-consuming equipment; actively purchase green electricity increase the proportion

Governance of renewable energy use and reduce carbon emissions caused by electricity consumption. Meanwhile the Company implements the lean manufacturing concept. By reducing waste improving resource utilization

The Company adheres to the concept of green development establishes and improves an environmental management efficiency optimizing inventory management and production scheduling we will further reduce energy and

raw material consumption. Through these measures Zhende Medical actively fulfills its environmental

system. The Company identifies the environmental laws and regulations it uses and conducts compliance evaluations responsibilities while achieving economic benefits and promotes the sustainable development of the industry.mainly including the Environmental Protection Law the Law on Environmental Impact Assessment the Water Pollution

Prevention and Control Law the Law on Air Pollution Prevention and Control the Law on the Prevention and Control of

——Bric Long Vice President of Zhende Medical

Environmental Pollution by Solid Wastes the Law on the Prevention and Control of Environmental Noise Pollution as well

as the Regulations on the Administration of Environmental Protection for Construction Projects etc. We have formulated

pollution prevention and compliance discharge systems such as the Environmental Protection Facility Management

System covering management regulations in terms of exhaust gas emissions wastewater discharges and waste

management. An environmental management organizational structure covering the headquarters and all subsidiaries

is established and environmental supervision and management for the headquarters and all subsidiaries is carried out Management of Impact Risk and Opportunity

through statements and other forms.The Company has formulated the Procedure for Identification of Environmental Factors and Risk Assessment and Control

In 2024 the Company invested RMB 11.78 million in environmental protection. During the reporting period all which stipulates the processes and methods for the identification and evaluation of environmental factors. It identifies

environmental protection facilities operated normally. New investment projects adhered to local laws regulations and evaluates controls and updates the environmental factors that can be controlled and those on which an impact can

policy standards regarding environmental management at their operational sites. There were no incidents of violating be exerted in the Company's activities products and services so as to determine the significant environmental factors

environmental protection laws or regulations. Xuchang Zhende was awarded honorary titles such as the provincial- provide a basis for formulating environmental objectives and indicators and effectively control environmental risks.level “Green Factory” and municipal-level “Waste-Free Factory”.— Environmental Governance Framework of Zhende Medical —

— Environmental Governance Framework of Zhende Medical —

Identification of Evaluation of Planning of Control

ESG The executive president serves as the director and the vice president in

Environmental Factors Environmental Factors Measures

Committee charge serves as the executive director. Comprehensively consider Evaluate environmental Develop operational control

the environmental impacts factors using material balance procedures in the order of

throughout the entire life cycle method product life cycle elimination substitution

of the Company's production analysis (LCA) process analysis technical measures signage

and operation as well as the method questionnaire survey and warnings management and

"three states three time tenses method and comprehensive control measures and personal

ESG Office

Established in the President's Office. and eight aspects" and identify scoring method alone or in protective equipment.all environmental factors which combination and identify major

the Company can control or environmental factors after Establish targets for important

exert influence on during the comprehensively considering environmental factors for

production activities product the frequency and severity of management and control

and service processes. occurrence. clarify the planning schemes

for achieving the targets

emergency preparedness

EHS Management Department Set up an EHS management department in each factory and response management

of the manufacturing center which reports to both the and ensure that the required

factory general manager and the ESG Office. resources are provided in place.Strategies

To implement the environmental management system the Company has established a comprehensive and multi-

This year the Company has formulated the Environmental Management Statement which clarifies the environmental dimensional environmental protection approach. It covers various aspects including environmental protection

compliance management policy. It is committed to reducing the discharge of wastewater and emission of waste gas training 5S inspections to standardize electricity usage across all modules and the development of environmental

the generation of wastes and noises during the production process. It promises to reduce environmental hazards by emergency response mechanisms. Through meticulous management practices we aim to continuously enhance our

using alternative materials that are less hazardous or less toxic. environmental awareness and environmental management capabilities.

71 72Sustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Indicators and targets

Environmental Training

We actively organize environmental training covering topics such as relevant laws and regulations emission standards ISO 14001 system

analysis of key provisions standardized environmental management and case studies. During the reporting period certification coverage

Shaoxing Factory organized training on laws and regulations related to environmental protection and offered online and

offline training with 44 participants. In May 2024 we held a sharing session on the theme of "Sharing Environmental

Protection Related Laws and Regulations" for various departments workshop managers and EHS staffs with a total of 100% of factories have passed

Progress in achieving the target

24 participants. Through case analysis and other forms we taught relevant personnel the basic knowledge and practical Target ISO 14001 system certification during the reporting period 100%

application of environmental protection laws and regulations improved their awareness of the rule of law and responsibility

and promoted the continuous conduct of environmental protection work.

5S Inspections Emissions and Waste

We conduct 5S (Sort Set in Order Shine Standardize Sustain) inspections of energy consumption to enhance all Zhende Medical has developed systems such as the Water Pollution Prevention and Control Management System

employees’ water and electricity conservation awareness and analyze current environmental pain points based on

proposals for improvements. the Air Pollution Prevention and Control Management System and the Solid Waste Pollution Prevention and Control

Management System and implemented comprehensive management of pollutant discharge and waste treatment

accordingly. During the reporting period the headquarters and all subsidiaries adhered to discharge standards for

wastewater and waste gas and policy standards for waste disposal. Moreover a third-party testing agency was

Emergency Response Plan and Drill commissioned to test pollution sources including wastewater waste gas and boundary noise. The testing results

We have developed the Environmental Emergency Response Plan and the Comprehensive Emergency Rescue Plan for showed that all indicators met relevant discharge standards and there was no significant impact on the surrounding

Safety Production Accidents along with specialized emergency plans. These plans detail management measures and environment.handling procedures for environmental emergencies based on environmental risk assessments and internal emergency

supply investigations. Additionally we conduct annual emergency training and drills for various environmental incidents

which effectively enhance our emergency response capabilities. During the reporting period the Company carried out 11 — Management Requirements and Treatment Methods for Emissions and Wastes —

environmental emergency drills.Applicable standards: Integrated Wastewater Discharge Standard (GB 8978-1996) Indirect

Discharge Limits of Nitrogen and Phosphorus Pollutants from Industrial Enterprises (DB33/ 887-

2013)

Key control indicators: pH ammonia nitrogen suspended solids chemical oxygen demand

Technical Transformation Project for Coating VOCs (Volatile Organic Compounds) (COD) five-day biochemical oxygen demand (BOD5)

This year the Company has carried out the VOCs Wastewater Discharge types: production wastewater and domestic sewage. Among them production

technical transformation project for coating and wastewater mainly comes from the de-bleaching process and domestic wastewater mainly

achieved substantial progress. Through the in- comes from office canteen cooking etc.depth analysis of regulations and policies and the Method of disposal: All wastewater is treated by the physical and chemical and biochemical

evaluation of the current environmental management treatment process of the factory sewage treatment station and discharged into the municipal

level the Company has scientifically set project sewage network after reaching the discharge standard.enhancement targets systematically carried out

root cause studies and innovatively formulated a

series of high-efficiency solutions. These initiatives

have enabled the Company to achieve significant Applicable standards: Comprehensive Emission Standard for Air Pollutants (GB 16297-1996)

breakthroughs in the field of VOCs treatment: Emission Standard for Boiler Air Pollutants (GB 13271-2014)

treatment efficiency has been significantly improved

a perfect monitoring system for coating VOCs Key control indicators: Non-methane hydrocarbons nitrogen oxides particulate matter sulfur

emissions has been established and significant dioxide ethylene oxide and odor.progress has been made in RTO (Regenerative Emission types: Processes such as printing and coating sterilization and boiler combustion

Thermal Oxidizer) exhaust gas treatment technology. etc.Waste gas

The project has been continuously optimized since implementation maintaining compliance with emission standards for Methods of disposal: Different types of waste gases are treated by washing purification and

coating VOCs while maintaining excellent control of operating costs which are only 3%-5% of other similar RTO technologies. activated carbon adsorption purification facilities multi-stage (sulfuric acid) washing tower

The project has been so effective that it has not only significantly reduced the number of exhaust gas-related complaints but purification facilities etc.; for some waste gases containing cotton dust a dust collecting unit

also won the recognition of the regulatory authorities. In the future the Company will continue to improve the construction of is used to remove the cotton dust.standardized system for VOCs treatment expand the scope of technology application and provide solid support for Zhende

Medical to build a green compliant and sustainable operation mode.

73 74Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Discharge types: General solid waste mainly comes from production office and other Resource Conservation and Utilization

processes and includes recyclable materials leftovers and unqualified products.Disposal method: The leftovers from the injection molding are crushed by a line-edge powder Zhende Medical attaches great importance to the conservation and efficient utilization of resources. Upholding the

General solid shaking machine and then recycled; recyclable materials such as waste cardboard leftovers of concept of green and low-carbon development the Company continuously promotes the refined management of

wastes other products and unqualified products are handed over to third parties for recycling or solid

waste environmental protection units for disposal. energy improves the utilization efficiency of resources such as water electricity and steam and reduces resource

consumption. By establishing and improving the energy management system and strengthening the control of the

whole process and various links the Company constantly improves the management mechanism and optimizes the

energy consumption structure to support sustainable operations.Applicable standards: National Catalogue of Hazardous Wastes Management Regulation on

Hazardous Wastes Manifests. The Company adopts a matrix management model. The President's Office coordinates and promotes energy

Discharge types: mainly including waste acrylic glue generated during the coating process management and the Power Department is responsible for the operation and management of energy facilities such as

Hazardous waste activated carbon generated during the waste gas purification process chemical

packaging barrels for the use of chemicals etc. water electricity steam AGVs air conditioners and air compressors. The manager of the Power Department serves as

wastes

Disposal method: a qualified third-party hazardous waste disposal agency is entrusted for the head in charge of energy management and reports directly to the Assistant General Manager of the Manufacturing

disposal of hazardous wastes. Center. In addition the manager also provides feedback on the energy management of each factory to the general

managers of each factory ensuring the efficient implementation of energy management measures and guaranteeing

the green and orderly production and operation.Energy ManagementZhende Medical adheres to the energy management policy of “energy conservation and emission reduction fullProtection of Ecosystems and Biological Diversity participation continuous improvement and the pursuit of excellence". The Company aims to achieve the goal of

energy conservation and consumption reduction through cultural guidance professional supervision process control

The Company is committed to respecting and protecting local biological diversity and endeavors to minimize the and full participation. It also commits to improving the energy utilization efficiency in the processes of procurement

negative impacts of its operations on wildlife populations and habitats. In the Company's operational activities the production operation and sales as well as increasing the utilization rate of renewable energy sources such as solar

design construction acceptance and operation of new or expanded factory buildings or product operation projects energy wind energy and tidal energy so as to mitigate the negative impacts of climate change.the generation treatment and discharge of waste during factory operations the design of environmental emergency The types of energy used in Zhende's operation include natural gas gasoline and diesel consumed by its own vehicles

response plans as well as the handling and follow-up processes in the events of environmental emergencies all involve electricity and steam. Among them electricity includes electricity from municipal facilities and self-built solar panels

the protection of ecosystems and biological diversity. and purchased renewable electricity. We adhere to relevant regulations for energy management and have established

The Company complies with all relevant national and local laws regulations and provisions in the locations where procedural documents such as the Energy Management System the Energy Review Management Rules the Main

its factories are situated as well as the binding clauses of generally recognized international organizations industry Energy-Consuming Equipment Management Rules and the Energy Management Assessment System to standardize the

regulations and the supplier codes of conduct of its core customers. During the reporting period the Company construction of our energy management system.formulated the Management Procedure for Ecosystem and Biological Diversity Protection and defined the corresponding The Company regularly conducts risk diagnoses on the energy management of each base. Based on the energy

risk assessment management process. Every year the LEC (Likelihood-Exposure-Consequence) method is used for management diagnosis results of Xuchang Zhende and Xuchang Zhengde during the reporting period we have

risk classification and corresponding preventive and disposal measures are formulated for different risk levels to formulated an energy conservation and consumption reduction plan. It is expected that a 15% reduction in energy

ensure that operational activities meet the requirements of biological diversity protection continuously improve the consumption can be achieved after rectification and the plan is considered to be promoted and implemented in other

level of ecological environment management and contribute to the protection of the stability and diversity of regional factories according to the actual energy consumption reduction effect. Meanwhile we continuously improve the

ecosystems. construction of the energy management system by referring to standards such as ISO 50001 to further standardize

The EU Deforestation Regulation (EUDR) came into effect at the end of 2024 requiring forestry and agricultural the Company’s energy use. As of the end of the reporting period the Company's subsidiaries Shaoxing Zhende and

products sold to the EU to provide evidence of no deforestation. The period of prosecution extends back to the end Xuchang Zhengde have obtained the ISO 50001 energy management system certification.of 2020 and violations will result in huge fines and market exclusion. To proactively address the potential impacts of

the EU Deforestation Regulation the Company established a special response team in September 2024 to coordinate

During the reporting period

and promote related work. The response team organized internal training to enhance the understanding of regulatory

requirements and compliance awareness of relevant personnel. Based on the product list specified in the regulation

and the customs codes of the Company's export products the list of potentially affected products is sorted out and

Electricity from renewable energy sources accounted for of the Company’s total energy use.identified. Meanwhile the Company actively communicated and collaborated with customers collected and organized 20%

compliance evidence for the identified products and provided relevant materials for customers to review and file for

record so as to meet the EU's review requirements and ensure the stable and compliant operation of its business. Note 1: The data involves all operational sites.

75 76Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

In 2024 Zhende has comprehensively reviewed its energy structure and implemented measures such as using clean Raw Material and Packaging Management

energy adopting energy-saving equipment and carrying out intelligent control transformation to optimize the energy

structure and enhance overall energy efficiency. The Company is committed to minimizing the waste of resources and environmental damage during the operation

process and promoting the transformation of the enterprise towards a circular economy. The product packaging of

— Achievements of Energy-saving Equipment Replacement in 2024 — the Company adheres to the basic principles of “lightweight recyclability and biodegradability”. It adopts a lightweight

strategy to optimize the design reduce the use of materials improve recyclability and decrease resource consumption

and environmental pollution so as to provide more environmentally friendly and sustainable products and services. The

In the casting workshop of Xuchang Zhengde the casting machine requires cold water for equipment cooling during main raw materials used in the Company's production include non-woven fabrics cotton fabrics and melt-blown fabrics

operation. The previous cooling method used a lithium bromide air conditioner to produce cold water for equipment

cooling. After technological transformation and intelligent control transformation the cooling tower is utilized to take etc. and the packaging materials mainly include plastics and cardboard. The Company standardizes the transportation

advantage of the external environment in winter for equipment cooling which can save 1334 tons of steam per year. and use of raw materials and packaging materials and through measures such as lean management and upgrading the

In 2024 the air compressors of Xuchang Zhengde and Xuchang Zhende underwent intelligent transformation achieving warehouse management system it continuously reduces the loss and waste of raw materials and packaging materials

linkage of the air compressors. This reduces the number of unloading times of the air compressors and decreases the and improves the utilization rate of resources. In addition driven by the concept of green development the Company

load of the air compressors during meal and rest times thereby reducing energy consumption. This can save 100000 actively promotes the development of low-carbon products selects green and environmentally friendly production raw

kW*h of electricity per year. materials and packaging materials reducing the environmental impact of material use.The previously used aeration fan motor in the sewage station of Xuchang Zhende was a common motor which had high

power consumption. After equipment upgrading the aeration fan was replaced with a high-tech green energy-saving

and environmentally friendly magnetic levitation motor. This fan is highly efficient and more energy-saving which can — Pathway to Green Packaging —

save 120000 kW*h of electricity per year.In response to customer demands for

environmental sustainability we continuously

In the future we plan to build an Energy Management Business Intelligence (BI) system. Through digital management tools innovate eco-friendly packaging materials We optimize the design of paper boxes and

focusing on aspects such as high temperature cartons with the goal of reducing packaging

the centralized monitoring analysis and early warning of energy data can be achieved the potential for energy conservation Development resistance and biodegradability. weight by 5% achieving both energy savings and cost optimization. Packaging of Eco-Friendly

is explored to assist in achieving refined energy consumption and continuously optimizing the energy structure. Packaging By conducting in-depth analyses of material Lightweightingperformance we ensure a balance between The project will involve multiple types of

environmental benefits and practicality. We also testing to ensure quality and promote new

rigorously monitor testing progress to ensure the standards for green packaging.project advances efficiently.Utilization of Water Resources

We are committed to implementing actions to reduce water resource consumption improve resource utilization

efficiency minimize resource waste and promote sustainable development. The Company responsibly handles water

and other natural resources. The water resources used in the operation of Zhende Medical come from municipal water In the exploration and practice of recyclable and eco-friendly packaging the Company is committed to driving a

supply surface water and recycled water. For the extraction of surface water the Company applies for a water intake sustainable revolution in an innovative way. While meeting the increasingly stringent global environmental protection

permit in accordance with regulations pays water resource fees on time and has no significant environmental impact and packaging regulations it helps customers achieve their environmental goals and lead the green transformation of

in terms of water source acquisition. the industry. Through continuous breakthroughs and innovations the Company has made positive progress in reducing

carbon emissions throughout the product life cycle contributing to a sustainable future.Poor water resource management may lead to an increase in water intake fees and a rise in operating costs. In 2024

a comprehensive review of water usage situation in Xuchang Prefecture was conducted and it was planned to launch

three projects in 2025 namely the recovery of steam condensate water the recovery of concentrated water and the Development of Eco-friendly Cubic Bags to Promote Green Transformation of Packaging

recycling and utilization of reclaimed water from the sewage treatment plant. It is expected that upon the completion

of the construction the overall recycled water volume will reach 91.6% of the total water consumption. In addition The Company actively implements the concept of environmental protection. For cubic bag packaging with relatively low

to encouraging employees to carry out technological transformations for water conservation during the production performance requirements we promote the development and application of degradable materials replace traditional plastics with degradable and eco-friendly materials to reduce the environmental impact during the usage process and further reduce

process the Company also advocates water conservation among employees in daily life requiring them to turn off the burden caused by packaging waste and promote the green upgrade of packaging.faucets promptly and achieve the reuse of water resources.During the reporting period During the reporting period

the proportion of recycled water used by the Company1 reached 52.05%. 68% of the Company’s1 finished products used recyclable packaging materials.Note 1: The data involves all operational sites. Note 1: The data involves all operational sites.

77 78Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

In packaging lightweighting the Company has promoted a green upgrade of product packaging through detailed design Besides the Company integrates greenhouse gas emissions performance into the long-term incentive plans for senior

and material optimization. This effort has enabled a reduction in packaging weight and contributed significantly to the executives to encourage sustained economic and shareholder value creation.development of a green supply chain in the medical field in addition to reduction in the Company's operating costs.Strategies

To address the increasingly severe challenges posed by climate change to human society and corporate operations

the Company is committed to mitigating climate change by improving energy efficiency and the utilization rate of

Optimization of Paper Tube Bag Packaging renewable energy in the procurement production and operation processes.The Company has launched optimization for the packaging materials of paper tube bags. After performance and practicality

tests the previously used 80g RST paper has been changed to 70g ST paper. This achieved a cost optimization of 30% while

ensuring no influence on the packaging performance and usage strength.— Climate Risk and Opportunity Matrix of Zhende Medical —

Optimization of Alcohol Swab Packaging High

Regarding the packaging of alcohol swabs the Company has optimized and adjusted the thickness of the aluminum

film while ensuring product performance and safety. Due to the volatility and flammability of alcohol in alcohol swabs an

aluminum film is used as a barrier material to prevent the diffusion of alcohol molecules. Through scientific verification the

Company has successfully reduced the thickness of the aluminum film used in the packaging of alcohol swabs from 101g to

73g achieving a cost optimization of 25%. In 2024 a total of 3500 kilograms of aluminum film were saved. Risk: Acute risk Opportunity: Energy transition

Risk: Reputational risk Opportunity: Market opportunity

Climate Change Mitigation and Adaptation

Risk: Chronic risk

Zhende Medical has made constant and proactive efforts to improve its climate change response mechanisms Risk: Policies and laws Opportunity: Resource efficiency

in alignment with relevant policies and guidelines. In 2023 the Company enhanced its climate change response

Opportunity: Climate resilience

mechanisms in the dimensions of governance strategies risk management and indicators and targets by referencing

the requirements of the International Financial Reporting Standard for Sustainability Disclosure No. 2—Climate-related

Disclosures (IFRS S2).Governance Low Probability of risks and opportunities High

The Company has issued the Climate Change Response Policy this year committing to following the Science Based

Targets Initiative (SBTi) conducting comprehensive three-carbon emission verification and formulating a carbon

emission reduction pathway plan. In addition the Company plans to disclose its organizational carbon emissions

and climate response strategies and plans to stakeholders through the CDP to enhance the transparency of climate

governance. Climate change is incorporated into the Company’s ESG management system. The Board of Directors

as the highest authority for climate governance formulates and coordinates climate change response strategies

reviews climate-related management targets such as greenhouse gas emissions and assesses progress. The ESG

Management Committee as the decision-making and supervisory body in ESG management identifies prioritizes

analyzes and manages climate risks and opportunities sets climate-related goals and oversees and supports specific

initiatives. The Committee regularly reports on climate change response activities to the Board. The ESG Office as the

executive body of ESG management implements and advances climate-related management tasks. It collaborates

with relevant functional and business departments to integrate climate management into daily operations. Through

energy-saving technological upgrades transition to clean energy and awareness training the office aims to enhance

climate management performance and achieve climate change management goals.

7980

Impact level of risks and opportunitiesSustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

— Major Climate Risks and Opportunities for Zhende Medical — Climate-related risks are integrated into the Company’s overall risk management framework. We have established

a cross-departmental climate risk management and coordination mechanism led by the ESG Office aiming to

Climate Potential Impact enhance climate risk managements through annual performance data tracking and target evaluation. Moreover

Risks and Description the management of climate risks and opportunities is integrated into the Company's strategy and decision-making

Opportunities Duration Financial Impact process. The Company is committed to achieving carbon neutrality in its own operations and value chain by means of

Extreme weather events triggered by climate change such as frequent measures such as the R&D of low-carbon products the application of clean energy the optimization of equipment and

hurricanes and floods may lead to severe consequences for the Company

Risk: Acute including asset damage casualties and disruptions to business operations Operating revenue ▼ processes and green office practices so as to seize new market opportunities.physical risk forcing the Company to take immediate response measures and invest Short-mid term Operating costs ▲

substantial resources to restore normal R&D and production as quickly as Indicators and Targets

possible.With the release of China's 'dual carbon' goals and growing focus on low- In order to address the challenges posed by global warming Zhende Medical has actively responded to the Paris Agreement

Risk: carbon transformation both domestically and internationally the Company and the Chinese government's “3060” dual-carbon target and officially joined the SBTi (Science Based Targets Initiative) in 2024

Reputational risks damaging its reputation if it does not take proactive and effective Short-mid term Operating revenue ▼

risk climate actions and timely disclose relevant information to meet external promising the public to formulate carbon emission reduction targets and implementation paths in line with SBTi standards.stakeholder demands.Long-term climate changes including persistent high temperatures may

impact the Company’s daily operations and lead to rising sea levels or — Target Setting Timeline —

Risk: Chronic ongoing heatwaves. For facilities near coastal areas these changes could

physical risk result in asset damage and may force the Company to consider relocating Long term Operating costs ▲

or adjusting work hours to adapt to changes in the coastline and sustained

high temperatures. September 2024 April 2025 2026 (planned)

Domestic and international climate policies and regulations are increasingly Committed to joining the SBTi Submit target setting application Pass the target review

focused on encouraging companies to take proactive measures to address

Risk: Policies climate change and imposing restrictions on activities that may worsen it. Operating costs ▲

and laws To adapt the Company must promptly adjust its strategies related to energy Short-mid termconsumption emissions and climate information disclosure; otherwise Operating revenue ▼

it may face legal action and liability for failing to meet environmental — Science Based Target Commitment —

management standards.With advancements in green energy technologies and the introduction

Opportunity: of supportive policies renewable energy sources are becoming more

Absolute emission reduction target Intensity reduction target

Energy accessible and their prices are expected to steadily decrease. Proactively

transition adjusting the energy consumption structure will not only help the Company

Mid-long term Operating costs ▼

reduce energy costs but also effectively address the low-carbon challenges By 2030 greenhouse gas emissions in Scopes 1 and 2 By 2030 greenhouse gas emissions intensity per unit

posed by regulatory requirements and end-market demands. will be reduced by 42% compared to 2023 of revenue in Scope 3 will be reduced by 51.6%

With growing global attention to climate issues and the release of the compared to 2023

Opportunity: "dual carbon" goals green and sustainable products and services will be

Market increasingly expected by the market and the public. Therefore focusing

opportunity on developing and providing climate and environment-friendly products

Mid-long term Operating revenue ▲

will inject new momentum into the Company's business development and Focusing on the implementation of the target the Company carried out the emission accounting of base year greenhouse

revenue growth. gas scopes 1 2 and 3 compiled a greenhouse gas inventory and set a carbon emission reduction target for 2030.By improving the efficiency of energy water and raw material usage Meanwhile the Company invited third parties to carry out energy diagnostics on major manufacturing bases identify energy

Opportunity: vigorously implementing green production practices and establishing a

Resource comprehensive resource management system the Company can effectively Mid-long term Operating costs ▼ saving potential and propose transformation plans to continuously improve energy efficiency and reduce carbon emissions.efficiency reduce resource waste lower operational costs and achieve steady low-

carbon development. In addition during the reporting period Xuchang Zhengde has passed ISO 14064 certification and Xuchang Base Power

By selecting environmentally friendly suppliers and strengthening carbon Department has launched energy conservation and emission reduction projects. The company also conducts regular

Opportunity: emissions measurement and control capabilities the Company can adapt

Climate more quickly to climate change. This will lay a solid foundation for us

business accounting and discloses carbon-related management results through the annual Greenhouse Gas Accounting

resilience to seize climate-related business opportunities and further enhance the

Long term Operating costs ▼

stability of our assets and daily operations thereby positioning the Company Report of Zhende Medical and steadily promotes the achievement of SBTi targets contributing to global climate action. In

advantageously in future industry competition. 2024 the Company's greenhouse gas emissions intensity per unit revenue (Scope 1 and 2) was 0.21 tons of carbon dioxide

equivalent/RMB 10000 up slightly from the previous year.Management of Impact Risk and Opportunity — Zhende Medical GHG Emissions Overview in 2024 —

Zhende Medical regularly identifies and assesses potential climate-related risks and opportunities in operations based Emission Type Sources GHG Emissions1(Unit: tCO2e)

on regional characteristics industry attributes and other factors creating a climate risk and opportunity assessment

matrix. By evaluating the likelihood and impact of these risks and opportunities the Company prioritizes them as the Scope 1 natural gas gasoline diesel 3913.52

basis for decision-making in climate change response strategies and action plans which supports its progress in Scope 2 (location-based) purchased electricity steam 86544.74

a complex and changing climate environment. Additionally we communicate regularly with stakeholders including

customers suppliers and investors to gather their opinions and suggestions on climate-related risks and opportunities. Note 1: The data involves all operational sites.

81 82Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

07 KPI and target values Actual Actual by 2030 Goals by 2025 performance performance Progressin 2023 in 2024

100% maintain the ISO 1. All factories that have passed the ISO 13485

13485 certification certification maintain the certification.

Pass CE/FDA 2. New factories (e.g. Kenya phase 2 factory) pass the 100% 100% ↑

certification as required certification.Being A Reliable Partner International International

Customer net promoter market: 52.8 market: 53

Score >60/>80 >55/>80 ↑Domestic Domestic

market: 83.9 market: 84.27

Innovative Solutions Safety and Quality of Product Data Security and 1. All qualified suppliers sign the Code of Conduct and

and Service Privacy Protection Environmental and commit to meet social responsibility standards.social risk research 2. All key suppliers that fail to provide the third-party 80% 88% ↑

Sustainable Supply Community Communication Industry Exchange covers all key suppliers social responsibility report receive ESG or social

Chain and Development and Cooperation responsibility training or communication.

83 84Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

Innovative solutions project. Meanwhile the Company introduces a Failure Mode and Effects Analysis (FMEA) management mechanism to evaluate the risks of projects and products during development and implementation. By defining and scoring the risk

R&D and Innovation sources frequency of occurrence and degree of harm the latent risks are identified accurately and response measures are taken in a timely manner to further enhance the stability of R&D project management.Governance

The Company regards R&D and innovation as the core driving force for sustainable development and has established

the second technical committee. The Company formulates the Project Management Guidance Decision Review Construction of R&D system

Guidance Technical Review Guidance Operation Guidance and other normative document templates and updates

The Company adheres to the bottom line of compliance in the R&D process and builds a management system that

the Regulations on Management of New Product Task Development and Regulations on Management of New Product

fully covers the Product Research & Development process across various stages from demand analysis to product

Design and Development conducts feasibility pre-study of new products in regulations markets raw materials

marketing. This system aims to accelerate product innovation shorten the marketing cycle and improve product

technology supply chain etc. and identifies and solves the core problems of project materials and technology in a

quality by clarifying the goals and standards of each stage thereby satisfying customer needs and enhancing the

timely manner.Company's competitiveness.In addition the Company issued the Regulations on Management of New Product Project Rewards which defines

The Company introduces the Integrated Product Development (IPD) management model establishes a product line

the incentive allocation principles for personnel at all levels of new product development. Through a scientific and

management mechanism and matrix management and forms a market-oriented data decision-making system.reasonable incentive mechanism the Company fully mobilized the enthusiasm of all personnel to participate in R&D

Through market research requirement management and scientific project approval we promote the product design

and innovation and stimulated the team's innovation vitality.and testing in parallel focusing on strategic projects and improving R&D efficiency. On this basis we added a task

Strategies development stage which focuses on the core technology breakthroughs and conducts exploratory studies with

small investment to comprehensively evaluate technical feasibility regulatory feasibility market feasibility and supply

Zhende upholds an innovation-driven development strategy follows the industry development trend as the innovation feasibility in order to promote decision-making evaluation accelerate the R&D process and create more market-

direction and takes market demand as the leading factor. We closely focus on key products such as stoma and competitive products.modern wound care surgical sensing and control and health protection and actively build a diversified R&D layout

covering the medical and health areas. We have established and improved the R&D management system and

continuously improve the R&D efficiency by integrating multi-disciplinary resources through independent R&D and — Product Development Process —

industry-university-research cooperation. In addition Zhende continues to enrich product categories accelerate

iterative upgrades promote technological innovation and continue to expand the business territory through

international layout and medical consumer goods upgrades further enhancing the Company's core competitiveness. Feasibility Project Project Project Achievement Product Summarization Study Approval Review Acceptance Transformation Launch and Evaluation

In addition to the ongoing optimization of the product development process we also emphasize the construction of

We have been actively promoting the development of sustainable products and materials and are R&D platforms and the development of R&D talents. We have established four enterprise R&D centers at home and

committed to reducing the impact of medical products on the environment. The company integrates abroad which have received a number of national and provincial honors.the concept of sustainable development in the product design stage and prefers to use degradable

recyclable or bio-based materials to reduce resource consumption and carbon emissions. This initial

intention affects everything we are doing and will do. Through continuous technological innovation

and product optimization we are committed to reducing the comprehensive cost of medical care — R&D Platform Construction —

adapting to clinical needs and providing higher quality services to users around the world through

continuous technological innovation.——Eric Zhang Director of Zhende Medical Enterprise R&D centers in The First Provincial-level Key

Shaoxing Xuchang Shanghai National Hi-tech Enterprise Enterprise Research Institute

and the UK in the Industry

Collaboration with Well-known Co-establishment of Zhejiang

Management of Impact Risk and Opportunity Domestic Universities such as

Zhejiang University and Hubei Provincial Key Laboratory of Postdoctoral Workstation

In the new product development process the Company clarifies the responsibilities of personnel at all levels in the University as well as Medical

Diagnosis & Treatment and

Institutions such as Beijing Hospital and Emergency Rescue of

project ensures that all links from planning to execution implement a hierarchical approval process avoids unplanned of Traditional Chinese Medicine Severe Burn Trauma

undocumented unaudited and unsupervised work and ensures the orderly compliance and legitimate progress of the

85 86Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

The Company actively engages in "industry-university-research cooperation" and continuously promotes industrial

partnerships. Leveraging the provincial-level key enterprise research institute we collaborate with academic institutions Innovative development of non-cytotoxic antibacterial and anti-adhesion gauze

to establish postdoctoral research workstations attract high-level talents and enhance our technological innovation

capabilities. The main reasons why gauze may harbor bacteria on the wound include using ordinary gauze instead of sterile

gauze not changing gauze in time and improper wound management. Failure to change gauze in time after use

may lead to bacterial infection at the wound site resulting in symptoms such as redness swelling pain and in

severe cases pus.— Industry-University-Research Cooperation Projects — Bacteria-adherent medical gauze is a medical technology product based on biomaterials innovation. The

gauze adopts a natural cellulose substrate combined with oriented modification of polysaccharide molecular

chains and makes use of physical-biological dual-action mechanism: on the one hand it adsorbs bacteria

physically through the microporous structure of the surface and on the other hand with the help of the biophilic

We have established the “Joint Innovation Center for Wound and Mucosal Medical Antimicrobial Application Technology” material imitating the characteristics of the cell membrane of the host it can recognize and adhere to the

with the Technical Institute of Physics and Chemistry of the Chinese Academy of Sciences and began to put into practice the disease-causing bacteria accurately and thus block their contact with the wound surface. The technology is aindustrialization transformation of "antimicrobial peptide gel products with selective antifungal effect”. combination of nanomimicry and biomimetic technology. This technology combines nanobionics and clinical medicine which not only solves the

drug resistance problem caused by the abuse of antibiotics but also avoids the secondary damage of chemical bacteriostatic agents on fragile

wounds providing a safer solution for chronic wound care burns infection prevention and control etc. and is expected to reshape the industry

standard of functional dressings.We have collaborated with the experts from the Adhesive Research Institute of East China University of Science and

Technology to enhance our overall R&D capabilities. We have established microscopic characterization methods for the

physical properties of adhesives including infrared spectroscopy rheology molecular weight and its distribution and solvent

content testing. These methods have helped us solve the technical problems of double-sided adhesives. Innovative development of non-contact antibacterial foam dressings

Antibacterial foam dressings innovatively adopt the “gaseous microenvironmental regulation” technology

realizing non-contact pathogenic bacteria inactivation. The product is based on medical polyurethane

foam and loaded with volatile antimicrobial factors through a nanoscale porous structure forming a

— R&D investment and achievements in 2024 — gaseous antimicrobial barrier of 0.5-2mm on the wound surface. This technology is expected to break through the limitations of traditional antibacterial dressings of “contact killing” through the construction

of physical isolation of the antibacterial micro-environment especially for large burns diabetic ulcers

and other fragile wound care providing a revolutionary solution for precise antibacterial treatment.R&D investment:

R&D investment reached RMB 135.49 million

Innovative research and development of low gram weight surgery coat

R&D achievements: Committed to providing superior comfort and protection to doctors and patients Zhende Medical has

adopted advanced SMS fabric technology to comprehensively upgrade the traditional surgical gown.

2 strategic projects 13 company-level projects and 12 department-level projects This new fabric not only meets the strict health and safety standards of the surgical gown; but also features enhanced air permeability lighter weight higher hydrostatic pressure head and improved

9 moisture absorption and perspiration performancedelivering an exceptionally soft wearing experience Acquired Class II medical device product registration certificates and a stronger safety barrier for medical and nursing staff.

28 inventions granted

Three papers with three indications in the fields of stoma care cell regeneration and chronic wound

treatment were included in the national ministerial core journal-China Medical Device Information. Active development of new eco-friendly materials that can replace PFAS

In the face of the environmental challenge of perfluorinated and polyfluoroalkyl substances (PFAS) and

the increasingly stringent regulatory trend of PFAS worldwide Zhende Medical has responded swiftly to

actively develop new eco-friendly PFAS-free products. The Company's persistent pursuit of PFAS-free

drives the continuous exploration of sustainable solutions. These solutions not only meet customers'

performance needs but also work to minimize the impact on the environment. Alternatives to PFAS-free

additive products is our goal of years of joint efforts with partners.R&D of Sustainable Products

The Company integrates the We Care sustainability strategy into every stage of product development aiming to reduce

the environmental impact throughout the life-cycle of products while ensuring product health and safety. The Company continuously promotes the development of R&D talent capabilities and the cultivation of an innovation culture by

offering diverse training courses. During the reporting period the Company provided training courses to more than 150 employees

from different positions including R&D engineering quality control and sales. A total of 14 types of training courses amounting to

122 class hours in total were conducted. The course content covered multiple areas such as the R&D intellectual property system

medical device registration and regulations patent search writing and application and the new product development process.

87 88Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Indicators and targets Providing Safe and Efficient Medical Products

In the future the Company will take green design as its core direction accelerate the replacement of new materials and Upholding patient-centered values the Company is dedicated to creating a more humane and convenient medical

the low-carbon improvement of products continuously increase R&D investment and promote the in-depth integration experience through innovative technologies. We continuously develop medical devices and consumables to precisely

of sustainable concepts into the full life cycle management of products. address patient needs offer more convenient services and greater comfort during treatment and enhance patient

recovery efficiency from multiple perspectives.At the same time we focus on the convenience and ease of operation of the product in the process of new product

Medical Accessibility research & development to ensure that the product can be widely used in primary medical institutions and areas with

limited medical resources so that more patients can benefit from high-quality medical care.Expanding the Breadth and Depth of Medical Services

Zhende Medical actively promotes its healthcare business by creating professional and comprehensive product

solutions tailored for home use aiming to bring the expertise and quality honed over 30 years of serving hospitals to Safety and Quality of Product and Service

individual consumers.We fully promote the operation of the big health category by optimizing product structure and competitiveness. Product Quality and Safety

Through multi-dimensional consumer research and resource integration based on Zhende's product advantages we

have comprehensively examined our retail business and strengthened the construction of customer and consumer Governance

centered product efficiency integration. Tools such as SCRM CRM and E sales system are utilized to enhance digital The Company has established a Quality and Regulations Center at the primary level led by the Chief Quality Officer. The

marketing capabilities and to continuously improve customer and consumer satisfaction. Meanwhile we continue to center includes the Quality Management Department the CQS Department and the Regulatory Affairs Department.expand our product coverage making it easier for consumers to purchase the home health care products they need. It oversees the establishment and maintenance of the Company’s quality management system. Meanwhile the

Company has formulated the Adverse Event Control Procedure for Medical Devices Non-Conformity Product Control

Procedure Measures for the Management of Medical Device Recall and Regulations on Management of US Medical

— Measures and Achievements for Retail Business Enhancement — Apparatus Recalls etc. and strives to achieve strict control of product quality and safety.During the reporting period the Company passed the certification such as ISO 9001 ISO 13485 ISO 13485 sterilization

certificates European Union MDR (Regulation on Medical Devices) European Union MDD (Medical Devices Directive)

Online Retail Channels Offline Retail Channels US FDA QSR (Quality System Regulation) 820 PPE UKCA/CE and obtained product registration in South America

Brazil Middle East Saudi Arabia and other regions.Through various modes such as self-operation and We continue to improve the market development and

cooperation key sales channels such as Taobao cooperation stickiness of national and regional chain — Quality Certifications —

JD Pinduoduo Douyin Kuaishou 1688 and drugstores individual pharmacies and supermarket

Amazone have been covered. convenience stores through a variety of measures. Certification Coverage

These include dealer classification and grading

In 2024 the online fans of Zhende e-commerce

9.5 million management key customer operation system Zhende Medical and its subsidiaries including Xuchang Zhende Xuchang Zhengde and shops exceeded . ISO 13485 Certificateas well as IP cooperation dual brand product Henan Zhende achieving 100% operational coverage

construction and model market creation etc.ISO 13485 Sterilization Certificate Zhende Medical and its subsidiaries including Xuchang Zhende Xuchang Zhengde etc.As of 2024 Zhende’s coverage rate of top 100

chain pharmacies has reached 99% totally over

210000 pharmacies. Strategies

Zhende Medical regards product quality and safety management as the key to the Company's sustainabledevelopment. The company has a clear quality strategy of “getting it right the first time changing under controlseeking truth and being pragmatic and customer complaints first”. We improve production efficiency and product

consistency through strict quality inspection standardizing the control of non-conforming products and optimizing

In order to facilitate the Company's in-depth participation in the global medical device value chain and enhance its technological processes to ensure that products meet high standards of quality requirements. At the same time we

global competitiveness we have also been continuously deepening the strategy of establishing overseas factories and adhere to the quality policy of "providing safe effective and competitive medical products is everyone's responsibility

strengthening the overseas industrial layout. The company is building production bases overseas in countries such as in Zhende". Quality awareness is integrated into every aspect of the Company's production and sales; we strive to build

Mexico and Kenya which can promote the development of local medical supply chains and reduce the difficulty and an all-round and whole-process quality assurance system to provide customers with safe effective and high-quality

cost of obtaining medical supplies in these regions. medical products to help the high-quality development of the medical industry.

89 90Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

Management of Impact Risk and Opportunity Zhende has established a product recall system in line with the Measures for the Administration of Medical Device

Recalls issued by the National Medical Products Administration (NMPA) and relevant recall regulations from the U.S.The Company has established a cross-functional risk management team which consists of professionals in the

FDA. We have developed and constantly improved the product recall system. Additionally regular mock recalls are

fields of product design production process quality management regulatory standards etc. The team will identify

conducted. During the reporting period no product recalls occurred.the product quality and safety-related risks periodically according to the assessment methods of potential risk types

occurrence possibility severity and frequency in the Risk Control Procedure. Meanwhile the Company establishes

risk management plans for various products and continuously improves product quality and safety-related risk — Product Recall Process —

identification and control capabilities through risk analysis risk evaluation and residual risk evaluation.Health Hazard Severity Developing a Issuing a Recall Executing a Implement and

During the reporting period the Company continued to promote a series of product quality management improvement Grading Validate Corrective Assessment Recall Plan Notice Recall Measures

measures to comprehensively ensure the safety and high quality of its products.During the reporting period the Company did not experience any incidents of being punished by relevant departments

for violating quality and safety-related laws and regulations.— Product Quality Management Measures —

Management Measures Actions in 2024

The Company conducted inspections and supervision of incoming materials production and

all other stages in strict compliance with internal quality management requirements thereby

increasing finished product acceptance rate.Quality Inspection

For outsourced testing we selected institutions with CNAS or CMA accreditation according to

CNAS-CL-01 (ISO/IEC 17025:2017). We regularly evaluated these service providers updated their

qualifications and maintained a directory of outsourced testing service suppliers.During the reporting period the Company conducted one comprehensive internal audit in

accordance with the Regulations for the Quality Management in the Production of Medical Devices

ISO 13485 EU MDR and U.S. FDA regulations to further guarantee the effectiveness of the quality

system.Quality Audit

Additionally the Company underwent several external audits including unannounced inspection

by Zhejiang Medical Products Administration GPM audit by the Inspector Management Center of

Zhejiang Medical Products Administration third-party audits by TUV and multiple client audits all

of which were successfully passed.The Company strictly controls non-conforming products according to its Non-Conforming Product

Non-conforming Product Control Procedures. Any product that fails to meet the specified inspection requirements will be

Control classified as non-conforming. All nonconformities must be separated marked reviewed handled

and recorded in strict accordance with the requirements.Each factory carried out proposal improvement activities and improved the working mode

process quality equipment materials based on the actual conditions to consistently improve the

product quality. During the reporting period a total of 42 proposal activities were completed and

Process Optimization 1226 valid proposals were produced.We strengthened the design and implementation of on-site standard work and formulated

operating standards in combination with new product quotations and the data in the IE action

database.The Company has highly valued employee training in quality awareness. Based on legal

regulations quality management system requirements and market and customer concerns we

have carried out multiple quality training through lectures by internal lecturers and participation in

Quality Awareness external training.Training During the reporting period the Company conducted 13 training sessions on regulatory systems

for all employees in the production quality management system covering Chinese and foreign

regulations MDSAP ISO 13485 ISO 14971 basic microbiological knowledge CAPA and adverse

events etc. The cumulative number of trainees exceeded 1000.

91 92Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Indicators and targets — Customer Feedback Channel —

One-time pass rate of first article

Progress in achieving targets

Target 98% during the reporting period 99.15% Customer service hotline Corporate email Message on the Company’s website

0575-88086666 zhende@zhende.com www.zhende.com

Pass rate of finished products

Progress in achieving targets

Target 98% during the reporting period 98.40%

Customer Service

Governance

Zhende's customers mainly include domestic and foreign corporate customers and individual consumers. The

Company’s Quality and Regulations Center has established the Customer Quality Service (CQS) and After-Sales

Quality Service departments. A series of management procedures have been developed including the Process Control

Procedure Related to Customers the Design and Development Control Procedure the Alert System Management

Procedure the After-Sales Supervision Control Procedure the Medical Device Adverse Event Management Procedure the

Regulations on Management of Domestic Medical Device Adverse Events the Customer Complaint Control Procedure

the Customer Satisfaction Survey Control Procedure and the Risk Management Procedure.Strategies

The company is aware that high-level client service management is the key to winning the trust of customers and

maintaining market competitiveness. For this purpose the Company continuously improves the client service system

and achieves rapid response and efficient solution to customer requirements by building diverse communication

channels and optimizing feedback handling processes so as to continuously improve client service satisfaction and

build long-term and stable customer relationships.Management of Impact Risk and Opportunity

The Company is committed to building an efficient pre-sales and after-sales customer service framework. By relying

on the customer feedback customer satisfaction surveys and other channels we actively identify and evaluate the

risks and opportunities related to customer services formulate and implement targeted response strategies according

to their materiality degree.The company has built convenient and diversified customer feedback channels and continuously optimized the

customer complaint process. By establishing a linkage mechanism between customer service personnel and

manufacturing plants we have improved the timeliness of customer complaint handling process and quickly

responded to and handled customer feedback and complaints. During the reporting period the Company's customer

complaints mainly focused on the problem of foreign bodies in the product appearance. The relevant factories have

started rectification for special projects. The customer complaint handling completion rate has reached 100%.

93 94Sustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

— Customer Feedback Handling Process — Data Security and Privacy Protection

01 Feedback information from customers To protect the Company’s data security and customer privacy Zhende has implemented data security protection

measures in strict compliance with relevant laws and regulations such as Computer Information System Security

Protection Regulations of the People’s Republic of China Personal Information Protection Law of the People's Republic

02 Sales representatives collect and summarize complaint information and related information on real object and fill of China and established Management Regulations on Information Security Information Security Management

out the Customer Feedback Handling Process through OA. System Manual Information Security Management Strategy Management Regulations on Data Reliability

Management Procedures for Computerized System Emergency. During the reporting period the Company conducted

03 a comprehensive assessment of the information security and improved the construction of the information The factory’s Quality Management Department outputs the opinions on investigation and handling; CQS will

confirm and collect them. security system in accordance with the ISO 27001 standard to ensure the effectiveness of the information security

management system.

04 Logistics Department handles the issues about compensation goods return and replenishment. — Information Security Certification —

Cyber security level protection 2.0 certification ISO 27001 information security management system certification

In order to improve the quality and efficiency of customer feedback processing we conducted a satisfaction survey

on the customer complaint process and the results showed that the satisfaction rate reached 99.2%. Meanwhile the

Company conducted customer satisfaction surveys distributing questionnaires to clients distributor clients and retail

— Information Security Management Measures —

customers. The satisfaction rate of e-commerce client services reached 95.3%.To further enhance the Company’s customer service capabilities we conducted training sessions for all customer Management Measures Progress in 2024

service personnel on topics such as Marketing Awareness Cultivation Specialized Training for Comforting E-commerce Zhende introduced Sangfor's MSS (Managed Security Service) and conducted a pre-operation security

Customer Service Empathy E-commerce Customer Service Understanding and Expression Ability Improvement Effective Risk identification and assessment. This assessment involved identifying security flaws in areas such as strategy management

assessment security protection asset management vulnerabilities attack threats and security incidents and developing Communication Skills E-commerce Customer Service Problem Solving Ability Improvement. These efforts strengthened improvement plans accordingly. These measures have significantly enhanced the overall security protection

employees' awareness of customer service improved their professional skills and increased overall customer level of the Company.satisfaction. Information security audit Zhende underwent third-party vulnerability assessments and performed targeted remediation based on the vulnerability scan reports provided by the third party.Zhende implemented remote application-level disaster recovery at data centers in Shaoxing and Xuchang.We have established a data backup system that performs backups once every two hours.Indicators and targets Information security Viruses are automatically detected and removed weekly through Endpoint Detection & Response (EDR).technology The Green-Shield Endpoint Security Management System is used to encrypt electronic files of the Company.Customer Net Promoter score Additionally the Company conducts system permission management ensuring that employees can only access system information corresponding to their specific roles.The Company has established an audit team to assess the risks of proposed or adopted computer systems

Domestic Customer Net Progress in achieving targets

and to audit potential suppliers.

84.27 Supplier information Target Promoter score >80 during the reporting period security management The Company strengthens supplier information security management by signing non-disclosure agreements and conducts regular evaluation on suppliers through the Supplier Evaluation Record Form and Supplier

Performance Periodic Assessment and Evaluation Form.International Customer Progress in achieving targets

The Company has established an emergency handling procedure for emergencies such as crashes and

53 Emergency response delays blue (black) screens communication interruptions and system crashes to ensure that emergencies Target Net Promoter score >60 during the reporting period such as system failures security attacks and data loss can be responded correctly and quickly and handled

in a timely and effective manner.Information security To foster an information security culture the Company offered employee training on information security

awareness training awareness. Topics included common information security awareness and the information security management regulations etc. A total of 3000 employees participated in such training sessions.During the reporting period there were no incidents where the Company was punished by relevant authorities for

violating laws and regulations related to information security and privacy protection.

95 96Sustainable Topic 1: Topic 2: Improving Caring for 2024 Sustainability Report Development Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

Sustainable Supply Chain

Governance

Zhende Medical attaches great importance to the construction of sustainable procurement as an

The Company has established a sound sustainable supply chain management system. The Procurement Department important measure to achieve corporate social responsibility and green development. The Company

ensure the sustainability of the supply chain by establishing a strict supplier evaluation system and

works with the Quality Management Department of the Quality and Regulatory Center to conduct periodic on-site giving priority to partners who meet environmental protection standards social responsibility and

audits of suppliers and all departments work together to promote the efficient management of sustainable supply ethics.chains.The Company has formulated the Administrative Rules of Qualified Supplier Access Administrative Rules of Qualified

—Steven Shen Director of Zhende Medical

Supplier Assessment Administrative Rules of Supplier Quota and Administrative Rules of Supplier Rectification and

Elimination and other rules to achieve the full life cycle management of suppliers and issued the SOP for MOQ Setting

of Purchased Materials Management Regulations on Procurement Cost Control Administrative Rules of Procurement

Methods Administrative Rules of Import Materials Procurement to further refine procurement management and

improve management efficiency. Management of Impact Risk and Opportunity

In order to identify and control supply chain risks in a timely manner the Company conducts regular assessment

In order to ensure the security and stability of the supply chain the Company has formulated detailed rules such

on suppliers from four key dimensions- quality cost delivery and services and carries out monthly inspections for

as Administrative Rules of Supply Market Research and Supplier Shortlist Administrative Rules of Potential Supplier

delivery risks. In addition the Company has set up automatic reminders of certificate expiration with the SRM system

Admission and Administrative Rules of Risk Suppliers to provide support for building a high-quality supplier resource

to accurately prevent and control the risk of certificate expiration and assigns a special person to check the supplier's

pool and regularly identifying supplier risks. In addition the Company has established the Sustainable Supply Chain

business license and qualification certificate and continuously tracks the update to ensure the integrity and validity of

Management Policy to continuously improve the environmental and social responsibility performance of suppliers and

the supplier's qualification.strengthen the construction of responsible supply chains.StrategiesThe Company always upholds the concept of “shared concept value collaboration process compliance and platform Supply Chain Quality Managementcollaboration” establishes a whole life cycle management process system from supplier sourcing to elimination to

achieve high-standard control of supply chain quality. Meanwhile the Company resolutely implements the concept of Zhende Medical categorizes suppliers from multiple perspectives to achieve the fine management. Based on category

“prevention in advance” and the policy of “Do It Right the First Time”. By improving supplier quality and ESG awareness positioning and the relationship with suppliers and in view of our actual business situation suppliers are divided

we continuously optimize the supply chain performance realize all-round and multi-angle management of the supply into three levels: core important and general. According to the annual performance evaluation of suppliers and

chain and promote the sustainable development of the supply chains. other factors suppliers are divided into grades of A B C and D. Over and above Zhende formulates differentiated

procurement management strategies for suppliers of different levels and updates the material importance periodically

to enable the proportion of each module in the supplier cycle assessment to be more compliant with the actual

situation and maximize the effectiveness of supplier management resources.In terms of performance rectification projects the Company has included Grade D suppliers in the scope of mandatory

Shared Value Process Platform rectification. After implementing differentiated management in 2024 55 Grade D items were improved and upgraded

concept collaboration compliance collaboration

to Grade C indicating that the Company has achieved certain results in supplier empowerment.Automation Information sharing Supplier life cycle Link Zhende with

Informatization Technical cooperation management suppliers through

Management ability the SRM platform The Company has established a supplier’s life-cycle quality management system to clarify the requirements for

Cost collaboration Behavior compliance

Professional ability supplier access qualified supplier assessment supplier quota management rectification and elimination and achieve

strict control of supplier quality.

97 98Invited suppliers to the factory site for more than 130 times online meeting for more than 180 times

Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Governance Employee Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology System Growth Development Partner

— Supplier’s Life-Cycle Quality Management — — Supplier’s Health Management Measures and Performance Highlights For 2024 —

After a procurement or change request is initiated by the requesting unit review the shortlist Quality interview

of suppliers; procurement engineers are responsible for collecting and maintaining supplier

qualifications and information. Invited suppliers to the factory site for quality interviews more than 130 times

The Procurement Department then initiates the introduction of shortlisted suppliers and conducts

Qualified Supplier written and on-site supplier audits. and organized online meetings for more than 180 times

Admission For suppliers that pass the audit conduct material/service certification according to the Material

Confirmation Management Regulations. Sign cooperation agreement with qualified suppliers and

rate them. Supplier audit

A process for evaluating suppliers of purchased finished products is established to better match the

management requirements of purchased finished products. On-site audit of supplier countermeasures for more than 50 times special audit of foreign bodies for more than 30 times

Conduct supplier performance assessment according to the supplier relationship management plan. Annual audit

Calculate supplier performance by the information system calibrate the results and generate the

Qualified Supplier Periodic Assessment Form and the Summary of Periodic Assessment of Qualified On-site evaluation and defect rectification of 44 suppliers video evaluation and defect rectification of 25 suppliers

Qualified Supplier Suppliers.Assessment

Organize performance interview with suppliers. Technical exchange

Work out supplier management measures based on the assessment and interview results and

conduct annual audits. 4 times

Formulate and adjust monthly and annual quota plans based on supplier assessment results latest

material prices and supplier quality/delivery performance.Supplier Quota

Management Execute orders according to the approved quota plans monitor performance monthly make timely Supply Chain Securityadjustments and generate cause analysis and improvement plans.Allocate more order quotas to suppliers with improved quality. The company attaches great importance to supply chain security to ensure the stability and reliability of the supply

chain in case of market fluctuations and uncertainties and avoid the risk of supply interruption.Require rectification for suppliers with supply abnormalities and poor performance and track their

Supplier Rectification rectification progress. The company has a sufficient reserve of supplier resources to address the R&D demands of new products and the

and Elimination Propose supplier elimination and risk control plan for suppliers that fail to pass the review and production and supply needs of existing products. Additionally we continue to optimize the supplier structure and

eliminate suppliers according to the plan. conduct the SRM digital platform construction to achieve the efficient interaction with suppliers and the safety and

stability of the supply chains.The Company regularly identifies and assesses supplier risks and promptly and effectively monitors and addresses any

In order to ensure that suppliers meet the quality control requirements the Company conducts periodic on-site audits issues that arise during cooperation. This helps safeguard project progress and ongoing supply needs while protecting

of suppliers and fills in the Supplier Audit Report. Meanwhile the Company sets up the “Quality Progress Award” at the Company's interests. Furthermore the Company has developed the Supplier Survey Form to systematically collect

the annual supplier conference to commend suppliers who have performed well in quality so as to motivate suppliers and review information on suppliers’ capabilities and system development. This keeps us informed about supplier

to continuously improve their quality performance. During the reporting period the SQE team of the Company's trends and ensures the stability and efficiency of our collaborative relationships.Quality Law Center established a key material quality planning PQP project. While continuously improving the quality Responsible Supply Chain

awareness of suppliers it promotes the learning of quality knowledge and tools for team members and enhances the

team’s overall ability. While strengthening our own ESG management we also pay close attention to the ESG performance of our suppliers

and comprehensively prevent potential environmental and social risks in the supply chain.We continue to improve the SRM system. In the supplier registration stage suppliers are required to fill in ISO 14001

ISO 45001 FSC certificate human rights audit and other relevant information. In addition the ESG questionnaire is

set as a required item to understand the ESG performance of suppliers in a timely manner. In the supplier admission

99 100Sustainable

2024 Sustainability Report Development Topic 1: Topic 2:

Improving Caring for

Zhende Cares Zhende Ecology Governance Employee

Promoting Green Being A Reliable

Management System Growth Development Partner

stage suppliers are required to upload a Social Responsibility Commitment Letter and sign the commitment letter as a As of the end of the reporting period neither the balance of the Company's accounts payable (including notes payable)

necessary condition for entry. Meanwhile the Company stipulates the relevant requirements of social responsibility in nor its ratio to total assets exceeded the thresholds set by the Guidelines; neither the Company nor its holding

the Purchase Agreement to further clarify the Company's specific expectations for suppliers in terms of environmental subsidiaries had to disclose to the public through the national enterprise credit information publicity system due to

and social responsibility. overdue payments to SMEs.We attach great importance to the improvement of suppliers’ ESG awareness and capabilities as a key link in supply

chain management. During the reporting period we conducted 4 ESG training sessions for key cooperative suppliers Indicators and Targets

covering ESG standards Zhende sustainable development philosophy social responsibility introduction human rights

review process etc. In addition we share ESG-related information with suppliers through the WeChat official account

“Zhende Procurement Collaboration Platform” share the industry best practices and policy trends and help suppliers Signing rate of the Social Responsibility

Commitment of key suppliers

to continuously improve the ESG management level.Progress in achieving the target

Furthermore the Company has incorporated supplier environmental and social responsibility targets into the Target 100% during the reporting period 88%

performance evaluations of procurement personnel to support the effective development of a sustainable supply

chain.ESG training coverage rate

— Performance of Supplier Social Responsibility Management Highlights — Progress in achieving the target

Target 100% during the reporting period 89%

The Company signed a Social Responsibility Commitment with 123 key suppliers with a signing rate of 88%

125 key suppliers participated in ESG training with a participation rate of 89%

22 suppliers passed third-party human right audits

Community Communication and Development

The Company abides by the Law of the People's Republic of China on the Promotion of Small and Medium-sized

Enterprises the Regulations on the Protection of Payment of Small and Medium-sized Enterprises and other related Zhende Medical engages in various charitable activities to give back to society to the best of its ability. The Company

laws and regulations strictly protects the legitimate rights and interests of the small and medium-sized suppliers has established the External Donation Management Regulations to oversee its donation activities in a unified manner.actively supports their growth and development so as to promote the coordinated progress of the industrial chain. During the reporting period Zhende made donations of cooling vests and flood relief materials.Upholding the idea of giving back to society the Company actively participates in community volunteer activities.The Company has formulated the Volunteer Team Management Regulations and other regulations that cover both

Access Cooperation Daily operation the headquarters and its subsidiaries to standardize and improve the organization of volunteer teams and enhance

the quality and efficiency of volunteer services. During the reporting period the volunteer team actively organized the

Uphold the principle of fairness Actively provide technical support Encourage SMEs to participate in condolence activities of the nursing home and sent supplies equivalent to RMB 23000 to the nursing home.provide equal opportunities for for SMEs help them improve their product research & development

SMEs to ensure them to enjoy fair capacity and quality management and innovation fully stimulate their

treatment in competition level innovation potential and jointly

Mitigate the operating pressure and promote the technological progress

stabilize the cooperative relationship of the medical industry through joint

through long-term and stable orders R & D technical cooperation etc.Carry out SRM system construction Build a learning platform for SMEs

promote the enhancement of digital and promote the sustainable

management capabilities in SMEs development of SMEs in the

and help improve their operational medical field

efficiency

101 102Sustainable Improving Caring for

2024 Sustainability Report Development Topic 1: Topic 2: Promoting Green Being A Reliable

Management Zhende Cares Zhende Ecology

Governance Employee

System Growth Development Partner

— Volunteer Activities in 2024 — Industry Exchange and Cooperation

“Cooling vests” bring coolness Caring for special children Partners are one of the important stakeholders of Zhende Medical. Adhering to the corporate value of "sharingOn August 1 2024 Zhende Medical donated 13000 “cooling On the eve of Children's Day in 2024 Zhende Medical success" we continue to advance mutual benefit and win-win results in the industry by participating in industryvests” to front-line outdoor workers through the Red Cross of carried out a public welfare donation event in Peizhi School platform construction joint training of industry talents standard formulation industry exchange activities.Shaoxing City and the Red Cross of Yuecheng District which Panlong District Kunming to donate medicine kits first aid

has a total value of RMB 1.17 million; on August 5 Zhende kits Band-Aids and other medical supplies to the school;

in collaboration with The Red Cross of Yuecheng District organized the trauma dressing training to help teachers Zhende actively engages in industry platform construction taking the lead in establishing industry technology alliances

Shaoxing City donated 1584 “cooling vests” to the Red Cross and students master first aid skills. This event conveyed and the Consumables Branch of the Zhejiang Medical Device Industry Association to promote healthy and orderly

of Kaihua County with a total value of RMB 169488. These society's care for special-needs children demonstrated

activities brought coolness and care to construction workers the enterprise's original intention and called on more industry growth. Furthermore we have participated in the formulation (revision) of industry and group standards

and sanitation workers. people to care about special groups and help safeguard multiple times facilitating overall advancement of the industry and product quality enhancement.children’s healthy growth.— Formulation or revision of standards in 2024 —

GB-19082-2023 Disposable Protective Clothing for Medical Use

Zhende led and participated in the formulation

GB19083-2023 Protective Face Mask for Medical Use

(revision) of 3 national standards

GB/T 42770-2023 colostomy plug

“Cooling Vest” Donation Ceremony Training for Trauma Dressing

Medical Elastic Bandage - Characteristics and Test Methods for Basic

Performance

Nursing home visit “Better Home * Caring Mom” Children Care Theme Activity

Zhende completed the formulation (revision) of Medical Thrombosis Prophylaxis HosieryDuring the Spring Festival Zhende Medical Volunteer Zhende Medical actively participated in the “Better Home -Team visited Zhej iang Huikang Lihai Nursing Home Caring Mom” Theme Activity for Caring Children hosted by 20 industry standards including 5 standards as Medical Compression Hosiery for Varices

and del ivered eight-treasure congee milk and other the Women's Federation of Shaoxing Zhejiang Province main drafter

mater ia ls to 51 e lder ly people in specia l need and and advocated for public engagement in the care initiative. Sterile Surgical Films for Single Use

30 d isab led ch i ldren . The condolence team in the Participants delivered school bags stationery sports supplies

elderly care rooms engaged in conversations with the contacting Wound Dressing - Part 1: Paraffin Gauze

residents and exchanged ideas warmly with the nursing and other heartfelt gifts to children and wrote “love cards” as

home staff. This visit reflected Zhende’s cultural value part of the care activities to support children’s growth in an Zhende completed the formulation (revision) of

of ongoing support for disadvantaged groups and its all-round way. Transparent Dressings

commitment to spreading positive energy throughout society. 12 group standards and continued to promote

the formulation (revision) of 2 group standards Mask Evaluation and classification of breathability

Zhende is currently applying for participating in the drafting of 3 national standards and 2 industry standards

Visit to Xiaogaobu Nursing Home “Better Home * Caring Mom” Children Care Theme Activity

In response to the rural revitalization strategy we purchased 1000 boxes of agricultural grapes during daylight saving

time for employee welfare distribution and helped farmers in increasing their incomes with our actions. In addition we

worked closely with the local Federation of Trade Unions in Xuchang to promote employment through various means

especially for rural people and poor family members to achieve targeted poverty alleviation and help rural revitalization.During the reporting period we donated a total of RMB 2.3 million.

103 1042024 Sustainability Report ESG Performance Tables

We actively take part in or organize industry exchange activities to gain genuine feedback from clinical practice through

in-depth interactions with medical professionals. ESG Performance Tables

— Industry exchange activities in 2024 —

Employee-related Performance

The 89th China International Medical Equipment Fair (CMEF)

Disclosures Unit 2022 2023 2024

MEDICA 2024(Dusseldorf) Employee Recruitment and Hiring

National Intravenous Therapy Nursing Academic Conference 2024 Number of incidents punished for violating

employment and labor laws and regulations Case 0 0 0

2024 China VTE Prevention and Treatment Conference

Total number of employees 1 Person 8485 6717 7807

The Third Global Digital Trade Expo

Full-time employees under a

2024 Beijing Operating Room Nursing Academic Annual Conference By labor contract Person 8485 6717 7807

employment

2024 Health Industry Ecosystem Conference form Full-time employees under

labor dispatch Person 676 621 616

Male Person 2916 2085 2645

By gender

Female Person 5569 4632 5162

The Company continues to strengthen industry-university-research cooperation partnering with vocational institutions

in Shaoxing Henan and other regions to jointly develop industry professionals through “order class” framework Chinese Mainland Person 8182 6185 6301

agreement and other means. By work area Hong Kong Macao Taiwan

and overseas2 Person 303 532 1526

>50 Person 201 373 308

— Industry-University-Research Cooperation Projects in 2024 —

By age 30-50 Person 6807 5133 5094

Worked with Shaoxing Vocational & Technical College to build Cooperated with the Second Affiliated Hospital Zhejiang University <30 Person 1477 1211 2405

the Silk Road College (Health Care) school-enterprise alliance school of medcial to build the provincial key laboratory for diagnosis

to jointly cultivate international talents in health care and treatment of severe burns and trauma and emergency rescue Front-line employees Person 8148 6422 7467

By

management Mid-level management Person 268 232 283

Worked with Jiaxing University College of Design and Signed a technical cooperation project agreement level

Yiwu Jiachuang Platform to carry out school-enterprise with the Technical Institute of Physics and Chemistry Senior management Person 69 63 57

cooperation training and jointly cultivate industry talents of the Chinese Academy of Sciences

Percentage of female employees % 65.63 68.96 66.12

Percentage of female senior executives (above

director level) % 20.29 23.81 26.3

Percentage of ethnic minorities and vulnerable

groups in all employees % 0.15 0.19 0.37

Percentage of ethnic minorities and vulnerable

groups in senior management team % 1.67 1.85 1.80

Coverage of diversity-related training % 100 100 100

Total number of new hires Person 1410 1886 2517

105 1062024 Sustainability Report ESG Performance Tables

Disclosures Unit 2022 2023 2024 Disclosures Unit 2022 2023 2024

Full-time employees under a Employee Rights and Benefits

By labor contract Person 1410 1886 2517

employment Labor contract signing rate % 100 100 100

form Full-t ime employees under

labor dispatch Person 412 248 325 Employee compensation and benefits expenses5 RMB 10000 100401 100365 92240

Male Person 589 485 948 New hire satisfaction 6 % 92.00 93.30 94.00

By gender

Female Person 978 1401 1596 Employee Net Promoter Score (E-NPS) 7 / 62.85 69.33 75.55

Chinese Mainland Person 1410 1886 1237 Unadjusted average gender pay gap 8 % 6.19 5.03 0.00

By work area Hong Kong Macao Taiwan Person 0 0 1280 Ratio of highest annual salary to median annual and overseas2 salary % 13.76 13.40 14.00

>50 Person 25 19 12 Percentage of employees covered by collective

bargaining agreements % 100 100 100

By age 30-50 Person 784 1094 1260

Percentage of operational sites assessed for

<30 Person 601 773 1245 human rights impacts or risks % 54.55 100 100

Percentage of new hires3 % 14.94 18.19 24.4 Percentage of operational sites with labor and

human rights certification % 50.00 63.64 75.00

Male % 17.59 14.26 28.70

By gender Number of employees eligible for parental leave Person 71 59 108

Female % 16.06 20.10 26.91

Male Person 20 19 35

>50 % 10.87 3.42 3.42 By gender

Female Person 51 40 73

By age 30-50 % 10.63 14.57 19.99

Number of employees taking parental leave Person 71 59 35

<30%32.7933.4948.26

Male Person 20 19 12

Employee turnover rate Person 952 3654 1950 By gender

Female Person 51 40 23

Male Person 432 1316 781

By gender Number of employees returning to work after

Female Person 520 2338 1169 parental leave Person 71 59 35

>50 Person 29 182 66 Male Person 20 19 12

By gender

By age 30-50 Person 567 2375 1209 Female Person 51 40 23

<30 Person 356 1097 675 Parental leave return rate % 100 100 100

Employee turnover rate 4 % 10.09 35.23 19.99 Male % 100 100 100

By gender

Male % 12.90 38.69 25.75 Female % 100 100 100

By gender

Female % 8.33 33.54 18.77 Number of employees still employed 12 months

after returning from parental leave Person 74 69 52

>50%13.5582.7317.56

Male Person 28 33 19

By age 30-50 % 7.85 30.06 18.46 By gender

Female Person 46 36 33

<30%17.8248.7621.92

Parental leave retention rate 9 % 92.50 97.18 88.14

107 1082024 Sustainability Report ESG Performance Tables

Disclosures Unit 2022 2023 2024 Disclosures Unit 2022 2023 2024

Male % 95.00 100.00 100.00 Percentage of senior

By gender management receiving regular

Female % 82.14 70.59 82.50 performance and career % 100 100 100

development appraisals

Number of employee discrimination incidents Case 0 0 0

Percentage of mid-level

Employee Training and Development By management management receiving regular performance and career % 100 100 100level

Number of employees receiving training Person 8485 6717 7807 development appraisals

Male Person 2916 2085 2645 Percentage of front-line

By gender employees receiving regular % 100 100 100

Female Person 5569 4632 5162 performance and career

development appraisals

Employee training coverage 10 % 100 100 100

Occupational Health and Safety

Total hours of employee training Hour 560858.50 435075.60 506409.90

Number of incidents punished for violating

Average duration of employee training 11 Hours/Person 66.10 64.77 64.87 occupational health and safety laws and Case 0 0 0

regulations

Male Hours/Person 58.65 63.60 65.68

By gender Number of employees with occupational Person 0 0 0

Female Hours/Person 70.00 65.30 64.45 diseases

12

Total training hours for front-line employees Hour 537130.50 404586.00 481778.56 Injury rate per thousand employees % 0.59 0.45 0.38

Number of front-line employees receiving Number of workplace injuries Person 5 3 3

training Person 8148 6422 7467

Number of safety incidents Case 5 3 3

Average training hours per front-line employee Hours/Person 65.92 63.00 64.52

Number of injury incidents Case 5 3 3

Total training hours for mid-level management Hour 18760.00 25953.61 20907.52

Number of lost-time incidents Case 5 3 3

Number of mid-level management receiving

training Person 268 232 283 Number of severe injury incidents Case 0 0 0

Average training hours per mid-level Number of deaths due to work-related health

management Hours/Person 70.00 111.87 73.88 issues

Person 0 0 0

Total training hours for senior management Hour 4968.00 4536.00 3723.81 Number of recordable work-related health issues Case 0 0 1

Number of senior management receiving Total working hours Hour 16494840 13057848 16271766

training Person 69 63 57

Recordable injury rate per million working hours

13 Case/Hour 0.30 0.23 0.21

Average training hours per senior management Hours/Person 72.00 72.00 65.33

Percentage of employees receiving regular Total work hours lost due to injuries Hour 1272 624 936

performance and career development appraisals % 100 100 100

Number of deaths due to work-related injuries Person 0 0 0

Male % 100 100 100

By gender Percentage of deaths due to work-related % 0 0 0

Female % 100 100 100 injuries

Number of workdays lost due to injuries Day 159 78 117

Percentage of operational sites with health and

safety risk assessments % 100 100 100

109 1102024 Sustainability Report ESG Performance Tables

Disclosures Unit 2022 2023 2024 Disclosures Unit 2022 2023 2024

Percentage of employees receiving occupational % 68.23 75.21 100 Number of trademark applications during the health and safety training 14 reporting period # 9 159 170

Notes: Number of trademark granted during the # 47 17 106

1. The total number of employees and the total number of new hires are consistent with data disclosed in the Company’s annual report and include full- reporting period

time labor contract employees from both the parent company and major subsidiaries. Part-time and other types of employees are not included.

2. In 2024 the number of employees working in Hong Kong Macao Taiwan and overseas as well as the number of new employees working in Hong Number of invention patent applied to main

Kong Macao Taiwan and overseas is increased due to the commencement of works in the Kenya base. business # 63 79 107

3 Ratio of new employees by category = number of new employees by category in the reporting period / (total number of employees by category at

the end of the reporting period + number of employees lost by category in the reporting period) * 100%. Adjustments to the employee turnover rate by

category for 2022 and 2023 are made according to the calculation formula. Total number of patent granted # 1120 1152 1216

4. Employee turnover rate by category = number of employees lost by category during the reporting period / (total number of employees by category

at the end of the previous reporting period + number of new employees by category during the reporting period)*100%. Adjustments to the employee Total number of patent applications # 635 871 904

turnover rate by category for 2022 and 2023 are made according to the calculation formula.

5. Based on salaries bonuses allowances subsidies and other benefits paid to employees.

6. Based on the results of new hire satisfaction survey.

7. Employee Net Promoter Score (E-NPS) = Percentage of employees willing to recommend the Company to friends and family - Percentage of

employees unwilling to recommend - Employee voluntary resignation rate.

8. Unadjusted average gender pay gap= (Average salary of men - average salary of women) / average salary of men * 100%. The unadjusted average

gender pay gap in 2022 and 2023 is adjusted according to the calculation formula.

9. Retention rate of employees on parental leave = number of employees who returned to work after the end of parental leave and are still employed after Products and Customer Services Performance

12 months/number of employees who returned to work during the reporting period after the end of parental leave in the previous year *100%.

10. Coverage of employee training = (Number of employees who received training / Total number of employees) * 100%

11. Average training hours per employee = Total training hours / Total number of employees Disclosures Unit 2022 2023 2024

12. Injury rate per thousand employees = Number of workplace injuries / (Total number of employees / 1000) Quality Management of Products and Services

13. Recordable injury rate per million working hours = Number of workplace injuries / Total number of working hours * 100%

14. Percentage of employees receiving occupational health and safety training = (Number of employees receiving occupational health and safety training

/ Total number of employees) * 100% Number of incidents punished for violating product and service related laws and regulations Case 1 1 0

Number of products recalled due to safety and

health issues Case 0 0 0

Number of legal and regulatory violations related

to health and safety in products and services Case 0 0 0

provided

R&D and Innovation Performance

Amount of damages caused by major accidents

related to safety and quality of products and RMB 10000 0 0 0

Disclosures Unit 2022 2023 2024 services during the reporting period

R&D and Innovation Customer Relationship Management

R&D investment RMB 10000 22700.00 13894.65 13549.00 Customer Net Domestic market / 88.11 83.89 84.27

Promoter Score

Proportion of R&D investment in main business (C-NPS)1% 3.70 3.37 3.18 International market / 30.51 52.80 53.00income

Total number of complaints received about

Number of R&D personnel Person 656 546 447 products and services Case 1569 976 1023

Ratio of R&D personnel % 7.73 8.13 5.73 Handling rate of complaints received about

products and services2 % 100 100 100

Number of R&D projects # 578 512 498

Data Security and Customer Privacy Protection

Intellectual Property Protection

Number of people covered by personal

Number of patent applications during the # 133 32 33 information security training for employees

Person 8485 6717 7807

reporting period

Number of incidents punished for violating

Number of patent granted during the reporting # 121 79 64 information security laws and regulations

Case 0 0 0

period

111 1122024 Sustainability Report ESG Performance Tables

Disclosures Unit 2022 2023 2024 Disclosures Unit 2022 2023 2024

Number of confirmed incidents of leakage theft

or loss of client information Case 0 0 0

Number of incidents punished for violating

environmental protection laws and # 0 0 0

regulations1

Amount involved in data security incidents RMB 10000 0 0 0

Total fines imposed for violations of

Amount involved in customer privacy breaches RMB 10000 0 0 0 environmental protection laws and RMB 10000 0 0 0

regulations

Notes:

1. Based on the results of customer satisfaction survey including data from both domestic and international markets. Starting from 2022 we adopted Annual investment in environmental RMB 10000 1504.00 1048.14 1177.79

the Customer Net Promoter Score (C-NPS) method replacing the customer satisfaction survey method used in 2020 and 2021. Calculation Formula: protection

Customer Net Promoter Score (C-NPS) = Percentage of promoters - Percentage of detractors.

2. Based on the results of customer satisfaction survey including data from both domestic and international markets. Starting from 2022 the Company Energy Management 1

adopted the Customer Net Promoter Score (C-NPS) method replacing the customer satisfaction survey method used in 2020 and 2021. Calculation

Formula: Customer Net Promoter Score (C-NPS) = Percentage of promoters - Percentage of detractors.Direct energy consumption Ton standard coal 1786.61 3037.58 4928.48

Natural gas consumption Cubic meters 1156316.00 1252191.00 1621451.60

Community Public Welfare Performance

Liquefied petroleum gas consumption Ton 7.09 5.26 6.33

Disclosures Unit 2022 2023 2024 Fixed source diesel consumption 2 Ton 4.00 4.15 11.15

Charity and volunteer services Diesel consumption for official vehicles 3 Liter 26462.64 22191.01 55963.00

Total investment in public welfare and charity RMB 10000 527.40 324.57 230.00 Gasoline consumption of official vehicles Liter 72575.35 72940.00 82378.45

Number of employees participating in voluntary Ton standard

activities Person 184 320 334 Indirect energy consumption coal 27095.17 24822.49 23164.57

Total time of employee volunteer service Hour 926 1953 2004 Total purchased electricity MWh 91169.39 81270.89 84685.12

Rural revitalization Purchased electricity from non-renewable

sources MWh 90928.44 81270.89 83539.37

Amount of investment in rural revitalization RMB 10000 107.24 80.40 83.80

Purchased electricity from renewable

Number of people benefited from rural sources MWh 240.95 0.00 1145.76

revitalization Person 6850 5050 5128

Purchased steam consumption GJ 465487.50 434558.75 373660.98

Self-produced renewable energy Ton standard

consumption 4 coal 118.91 1250.18 2585.79

Environmental Performance

Comprehensive energy consumption Ton standard

intensity (per unit operating income) coal /RMB 0.05 0.07 0.07

Disclosures Unit 2022 2023 2024 10000

Environmental Management System Renewable energy consumption5 MWh 1207.80 10165.05 22170.52

Number of employees participating in Percentage of renewable energy in total % 0.51 5.78 9.70

environmental protection training Person 3154 3102 3267 energy consumption

Percentage of employees who have received Total energy consumption Ton standard 28881.79 27860.07 28093.05

training on specific environmental issues % 5.70 5.60 5.70 coal

Percentage of workplaces that have Clean energy consumption MWh 13471.25 23706.24 39204.89

undergone environmental risk assessment % 90.00 90.00 100.00

Percentage of operational sites with

environmental certification % 50.00 66.67 100.00

113 1142024 Sustainability Report ESG Performance Tables

Disclosures Unit 2022 2023 2024 Disclosures Unit 2022 2023 2024

Clean energy Natural gas Cubic meters 1156316.00 1252191.00 1621451.60 Wastewater Management

consumption

by energy Solar energy MWh 966.85 10165.05 21024.76 Industrial wastewater discharge

7 Ton 384321.74 483204.46 357821.02

type Other 6 MWh 0.00 0.00 645.76 Chemical oxygen demand (COD)

discharge Ton 50.59 46.68 44.28

Proportion of Natural gas % 92.82 57.12 44.72

clean energy NH3-N discharge Ton 1.83 1.75 2.97

by energy Solar energy % 7.18 42.88 53.63

type Waste Gas ManagementOther 6 % 0.00 0.00 1.65

Total emissions of waste gases Cubic meters 209965214.29 303726592.86 278069230.65

The Circular economy

Nitrogen oxides (NOx) emissions 8 Kg 243 311 446.36

Total usage of finished product packaging

materials Ton 47800 25600 36971 Emissions of Volatile Kg 2082.85 3624.84 3645.80

Packaging Paper Ton 37300 25000 26584 Waste Management 9

material

usage by type Plastic Ton 10500 600 10387 Total amount of non-hazardous waste Ton 5206.17 4735.77 4148.27

Usage of environment-friendly packaging

materials for finished products Ton 26290 16640 25140

Incinerated with energy

recovery Ton 495.59 394.44 474.53Non-

Percentage of environment-friendly hazardous Landfill Ton 0.00 0.00 71.59

packaging materials for finished products % 55 65 68 waste density (per unit of Recycling/reuse Ton 4690.78 4314.03 3574.05

Total usage of non-renewable materials Ton 10500 600 10387 revenue)

Other 10 Ton 19.80 27.30 28.10

Total usage of renewable materials Ton 37300 25000 26584

Non-hazardous waste intensity (per unit of Ton/RMB

Water Resources Management revenue) 10000 0.0080 0.0110 0.0095

Total water withdrawal Cubic meters 1131305.00 1321508.00 1014871.24 Total amount of hazardous waste11 Ton 39.83 65.58 89.11

Water Surface water Cubic meters 715042.00 884940.00 622036.00 Incinerated with energy

consumption Amount of recovery Ton 7.51 29.74 32.49

by source Municipal water supply Cubic meters 416263.00 436568.00 392835.24 hazardous

waste by Incinerated without energy

Total water discharge Cubic meters 911168.54 1104704.68 816720.34 disposal recovery Ton 0.00 0.00 0.06

method

Water Surface water Cubic meters 0.00 0.00 1200.00 Other 10 Ton 32.32 35.84 56.56

discharge by

destination Sewage pipes Cubic meters 911168.54 1104704.68 815520.34 Hazardous waste density (per unit of Ton /RMB

revenue) 10000 0.0001 0.0002 0.0002

Total water consumption Cubic meters 220136.46 216803.32 198150.90

Total waste generated Ton 5246.00 4806.15 4237.38

Water consumption rate Cubic meters/RMB 10000 0.36 0.53 0.45 Total waste recycled Ton 1094.48 880.84 995.21

Total recycled water usage Cubic meters 659592.70 745372.90 528270.80 Percentage of total operational waste

transferred from landfills % 20.86 18.33 23.49

Percentage of recycled water % 58.30 56.40 52.05

Climate Change Mitigation and Adaption 12

Scope 1 GHG emissions tCO2e 2781.55 2974.48 3913.52

Scope 2 GHG emission (location-based) tCO2e 101966.74 93053.09 86544.74

115 1162024 Sustainability Report ESG Performance Tables

Disclosures Unit 2022 2023 2024 Disclosures Unit 2022 2023 2024

Scope 2 GHG emission (market-based) tCO2e / 96092.62 90023.36 Number of shareholders' meetings # 3 3 1

Total GHG emission (Scope 1 + Scope 2) Number of board of directors' meetings # 12 6 7

(location-based) tCO2e 104748.30 96027.57 90458.26

Number of supervisory board meetings # 9 6 6

GHG emission density (Scope 1 + Scope 2) tCO2e/RMB

(per unit of revenue) (location-based)) 10000 0.17 0.23 021 Anti-corruption and Anti-bribery

Notes: Number of directors participating in anti- Person 9 9 9

1. The energy management-related data covers all operational sites in China. In 2024 the Company verified energy data according to unified standards corruption training

retrospectively adjusted part of energy consumption data while retrospectively adjusting the scope 1 and 2 greenhouse gas emissions and total

greenhouse gas emissions in 2023. Percentage of directors covered by anti-

2. In 2024 the increase in diesel use from stationary sources is mainly due to the construction of the Kenyan base. corruption training % 100 100 100

3. In 2024 the increase in diesel consumption of official vehicles is mainly due to the official operation of the Kenyan base which uses diesel vehicles.

4. The amount of self-generated renewable energy is solar photovoltaic self-generated electricity. Total hours of anti-corruption training received Hour 36 36 36

5. Renewable energy includes solar photovoltaic self-generated electricity purchased green electricity and green electricity certificates. by directors

6. Other clean energy is geothermal energy used in Kenya.

7. In 2024 due to the improvement and upgrading of equipment the discharge of industrial wastewater decreased significantly. Hours of anti-corruption training per director Hours/Person 4 4 4

8. In 2024 the increase in particulate matter nitrogen oxide and sulfur oxide emissions will be mainly driven by emissions from the Kenyan base.

Number of management staff participating in

9. The statistical data related to waste management covers all operational sites. anti-corruption training Person 337 295 340

10. It was transported uniformly by a third-party solid waste disposal unit and the treatment method was unknown.

11. In 2024 the Shaoxing Factory uniformly handled the experimental glue thus causing fluctuations in the total amount of hazardous waste. Percentage of management staff covered by

12. Data description: anti-corruption training % 100 100 100

(1) The GHG emission data covers all operational sites in China.

(2) Reference standard: The calculation of Scope 1 and Scope 2 greenhouse gases refers to the GHG Protocol Corporate Accounting and Reporting Number of employees participating in anti-

Standard (Revised Edition) the ISO14064-1:2018 Greenhouse Gases - Part 1: Specification with Guidance at the Organization Level for Quantification Person 3154 3102 3219

and Reporting of Greenhouse Gas Emissions and Removals and the General Guideline of the Greenhouse Gas Emissions Accounting and Reporting for corruption training

Industrial Enterprises (GB/T32150-2015) the Guidelines for Accounting Methods and Reporting of Greenhouse Gas Emissions of Enterprises – Power

Generation Facilities and other accounting standards. Percentage of employees participating in anti-

(3) Emission factors: The greenhouse gas types calculated in this report include CO2 CH4 and N2O in Scope 1and CO2 in Scope 2. The selected GWP corruption training % 37.17 46.18 44.19

value comes from IPCCAR6 where CH4 corresponds to a GWP value of 27.9 tCO2e/tCH4 and N2O corresponds to a GWP value of 273 tCO2e/tN2O.The default values of emission factors used in Scope 1 are derived from the Guidelines for Accounting and Reporting Greenhouse Gas Emissions

from Land Transport Enterprises (Trial) (2015) China Energy Statistical Yearbook (2021) and Guidelines for Accounting and Reporting Greenhouse Total hours of anti-corruption training received by employees Hour 12616 12408 12786Gas Emissions from Enterprises of Other Industries (Trial) (2015). The emission factors used in Scope 2 are calculated based on relevant documents

issued by Ministry of Ecology and Environment of China. Among them the emission factor of the power grid is 0.5366 tCO2e/MWh as published in the

Announcement on the Release of the 2022 Power Sector CO2 Emission Factor by the Ministry of Ecology and Environment of People’s Republic of China

and National Bureau of Statistics. Hours of anti-corruption training per employee Hours/Person 1.49 1.85 1.76

Number of suppliers participating in anti-

corruption training # 696 684 762

Percentage of operational sites that have

undergone corruption risk assessments % 100 100 100

Governance Performance

Percentage of sites audited for specific business

ethics issues % 100 100 100

Disclosures Unit 2022 2023 2024

Percentage of at-risk trading partners covered

Corporate Governance by the corruption and information security due % 100 100 100

diligence process

Number of board members Person 9 9 9

Number of reported incidents of corruption and

Number of female directors Person 3 3 3 bribery received # 0 0 0

Number of independent directors Person 3 3 3 Number of corruption lawsuits filed and

concluded against the issuer or its employees # 0 0 0

Percentage of female directors on the board of % 33.33 33.33 33.33 during the reporting perioddirectors

Total number of confirmed incidents (in which

Number of employee supervisors Person 1 1 1 employees were dismissed or disciplined due to # 0 0 0

corruption)

117 1182024 Sustainability Report ESG Performance Tables

Disclosures Unit 2022 2023 2024 Supply Chain Performance

Total number of confirmed incidents (where

contracts with business partners were Disclosures Unit 2022 2023 2024

terminated or not renewed owing to corruption- # 0 0 0

related irregularities) Supply Chain Management

Anti-unfair Competition Number of suppliers in the Mainland China # 667 653 730

Number of cases in which the Company was Number of suppliers in Hong Kong Macao Taiwan and overseas # 29 31 32sanctioned by the relevant authorities for

unfair competition practices in its operations # 0 0 0

or violations of the antitrust and anti-monopoly Total number of suppliers # 696 684 762

laws Percentage of target suppliers that have signed

the Supplier Code of Conduct % / 100 100Amount of litigation or major administrative

penalties caused by the Company's unfair RMB 10000 / / 0

competition during the reporting period Percentage of suppliers signing contracts with environmental labor and human rights % / 10 88

provisions

Percentage of target suppliers that have

undergone on-site CSR audits1 % 53.33 80.00 88.00

Economic Performance Number of suppliers assessed for

environmental labor and ethical aspects and # 0 0 0

Disclosures Unit 2022 2023 2024 failed

Economic Performance Percentage of suppliers assessed for

environmental labor and ethical aspects and % 100 100 100

Social contribution per share1 RMB 7.55 5.84 5.69 passed

Basic earnings per share RMB/Share 2.87 0.74 1.45 Number of suppliers identified as having actual and potential significant negative social and

Operating income RMB 10000 613763 412704 426389 environmental impacts and receiving support in

#000

implementing corrective action plans

Net profit attributable to ordinary shareholders

after extraordinary gains and losses RMB 10000 70197 18958 31640 Percentage of suppliers agreeing to improvements after environmental and social % 76 66 50

Total tax payments RMB 10000 26630 33172 24620 impact assessments

Total employee salaries and benefits paid by the Percentage of procurement staff who have % 100 100 100

Company RMB 10000 100401 100365 92240 completed sustainable procurement training

Interest on borrowings from banks and other Percentage of procurement spending on local

creditors RMB 10000 3354 2893 2873 suppliers

2%98.9696.3993.31

Value created for other stakeholders such as Notes:

donations to external parties RMB 10000 527 324 230 1. During the reporting period the Company strengthened ESG management of key suppliers. Suppliers with higher procurement amounts were included

in the target scope of on-site assessments in areas such as environmental impact labor practices and ethics and were evaluated through on-site

inspections and comprehensive scoring. The total procurement amount from these key suppliers included in the ESG on-site audits accounted for over

Other social costs due to environmental 80% of the Company’s total procurement.pollution etc. RMB 10000 0 0 0 2. The procurement spending on local suppliers is specifically for those located in the same area as the Company's key operational sites.Total shares issued by the Company Share 266451202 266451202 266451202

Notes:

1.Social contribution per share = Basic earnings per share + (Total tax payments + Salaries paid to employees + Interest on borrowings from banks and

other creditors + Value created for other stakeholders such as donations to external parties - Other social costs due to environmental pollution etc.)/

Total shares issued by the Company.

119 1202024 Sustainability Report Report Benchmarking Index Table

Report Benchmarking Index Table Terms and Disclosure Content Report ChapterChapter IV Social Disclosure

Section 1 Rural Revitalization and Social Contributions

Index Table of the Guidelines No.14 for Self-Regulation of Listed Rural revitalization Be a trustworthy partner - community communication and development

Companies on the Shanghai Stock Exchange: Sustainability Report (Trial) Contributions to the society ESG quantitative performance table

Section 2 Innovation-Driven Development and Ethics of Science and Technology

Terms and Disclosure Content Report Chapter

Be a trustworthy partner - innovation

Chapter 1 General Provisions Sustainability management Innovation-driven ESG quantitative performance table

Chapter II Disclosure Framework for Sustainability management Not applicable. The Company does not engage in scientific research

Sustainability Information Chapters and sections in this report Ethics of science and technology or technology development activities in the field of ethics of science and technology such as life sciences and artificial intelligence

during its production and operation.Chapter III Environmental Disclosure

Section 3 Suppliers and Clients

Section 1 Climate Response

Supply chain security Be a trustworthy partner - sustainable supply chain

Zhende Ecology - Creating value with sustainable thinking

Climate change tackling Promoting green development - Climate change mitigation and Equal treatment of small and medium-sized adaptation enterprises Be a trustworthy partner - sustainable supply chain

ESG quantitative performance table

Safety and quality of products and services Be a trustworthy partner - product and service safety and quality

Section 2 Pollution Control and Ecosystem Protection

Data security and customer privacy

protection Be a trustworthy partner - information security and privacy protectionPromoting green development-environmental management system

Pollutant discharge

ESG quantitative performance table

Section 4 Employees

Promoting green development-environmental management system

Waste disposal Caring for employee growth-Protection of Employees’ Rights and

ESG quantitative performance table Interests

Ecosystem and biodiversity protection Promoting green development-environmental management system Employees Caring for employee growth-employee training and development

Caring for employee growth-occupational health and safety

Environmental compliance management Promoting green development-environmental management system ESG quantitative performance table

Section 3 Resource Utilization and Circular Economy Chapter V Corporate Governance Information Related to Sustainable Development Disclosure

Promoting green development- resources conservation and Section 1 Sustainability-Related Governance Mechanisms

Energy usage utilization

ESG quantitative performance table Due diligence Sustainability management

Promoting green development- resources conservation and Communications with stakeholders Sustainability management- Stakeholder engagement

Usage of water resources utilization

ESG quantitative performance table Section 2 Commercial Behaviors

Promoting green development- resources conservation and Anti-commercial bribery and anti-corruption Improving the governance system-compl iance operat ion

Circular economy utilization management

ESG quantitative performance table

Anti- unfair competition Improving the governance system-compl iance operat ion management

Chapter VI Supplementary Provisions and Interpretation

121 1222024 Sustainability Report Report Benchmarking Index Table

GRI Standards (2021) Notes to Omission

GRI

Standards Disclosure Location Required

Note From January 1 2024 to December 31 2024 Zhende Medical prepared the Omissions

Reason Explanation

report in compliance with the GRI Standards.

2-11 Chair of the highest See 2024 Annual Report of

GRI 1 used GRI 1: Foundation 2021 governance body Zhende Medical for details

Improving the Governance

Applicable GRI industry standards No applicable industry standards 2-12 Role of the highest System- Corporate

governance body in Governance System

overseeing the management Sustainable Development

of impacts Management- Structure and

Responsibilities

Improving the Governance

Zhende Medical has developed the Benchmarking Index Table based on the GRI principles combined with the material System- Corporate 2-13 Delegation of Governance System

topics identified and the information disclosed in the 2024 Sustainability Report. The Company has determined that responsibility for managing impacts Sustainable Development

the following topics are non-material and thus will not be included in the Benchmarking Index Table: GRI 202 (Market Management- Structure and Responsibilities

Presence) GRI 207 (Tax) GRI 101 (Biodiversity) GRI 410 (Security Practices) GRI 411 (Rights of Indigenous

2-14 Role of the highest Sustainable Development

Peoples) GRI 415 (Public Policy). governance body in Management- Structure and

sustainability reporting Responsibilities

Improving the Governance

System- Corporate

Governance System

2-15 Conflicts of interest

Improving the Governance

Notes to Omission System-Compliance

GRI Operation Management

Standards Disclosure Location Required

Omissions Reason Explanation 2-16 Communication of Sustainability Management-

GRI 2: critical concerns Stakeholder Engagement

General Disclosures General

Disclosures 2-17 Collective knowledge of

Sustainable Development

2-1 Organizational details About Zhende Medical (2021) the highest governance body

Management- Structure and

Responsibilities

2-2 Entities included in the

organization’s sustainability About This Report This

reporting information

2-18 Evaluation of the 2-18-a will not be

2-3 Reporting period Not applicable for “omission” performance of the highest Omitted 2-18-b Confidentiality disclosed

frequency and contact point About This Report governance body restrictions for the time 2-18-c being due to

2-4 Restatements of confidentiality

information ESG Performance Tables requirements.

2-5 External assurance Assurance Statement This

information

GRI 2: 2-6 Activities value chain and About Zhende Medical will not be

General other business relationships 2-19-a2-19 Remuneration policies Omitted Confidentiality disclosed

Disclosures 2-19-b restrictions for the time

(2021) Caring for employee growth being due to - Protection of Employees’

2-7 Employees confidentiality Rights and Interests requirements.

ESG Performance Tables

This

2-8 Workers who are not information

employees ESG Performance Tables will not be

2-20 Process to determine 2-20-aOmitted Confidentiality disclosed

2-9 Governance structure and Improving the Governance remuneration 2-20-b restrictions for the time

composition System- Corporate being due to Governance System confidentiality

requirements.

2-10 Nomination and Improving the Governance

selection of the highest System- Corporate 2-21 Annual total

governance body Governance System compensation ratio ESG Performance Tables

123 1242024 Sustainability Report Report Benchmarking Index Table

Notes to Omission Notes to Omission

GRI Disclosure Location GRI Standards Required Disclosure Location

Omissions Reason Explanation

Standards Required

Omissions Reason Explanation

2-22 Statement on Sustainable Development 201-1 Direct economic value

Management- Strategy generated and distributed ESG Performance Tablessustainable development

strategy Message from the Chairman 201-2 Financial implications Promoting Green

Improving the Governance and other risks and

2-23 Policy commitments System-Compliance opportunities due to climate

Development-Climate Change

Mitigation and Adaptation

Operation Management change

Improving the Governance 201-3-a This 2-24 Embedding policy System-Compliance GRI 201: information commitments Operation Management Economic 201-3 Defined benefit

201-3-b Information has not been

plan obligations and other Omitted 201-3-c missing/ collected so

Caring for employee growth Performance retirement plans 201-3-d incomplete it cannot be 2-25 Processes to remediate (2016) disclosed for

negative impacts - Protection of Employees’ Rights and Interests 201-3-e the time being.

2-26 Mechanisms for seeking Improving the Governance

This

information

GRI 2: advice and raising concerns

System-Compliance

Operation Management 201-4-a

General 201-4 Financial assistance

Information has not been

received from government Omitted 201-4-b missing/ collected so

Disclosures Improving Governance 201-4-c incomplete it cannot be

(2021) System disclosed for

2-27 Compliance with laws Caring for employee growth the time being.

and regulations Promoting Green Indirect Economic Impacts

Development

Being a Reliable Partner Sustainability Management-

Stakeholder Engagement

About Zhende Medical- GRI3: Zhende Charity Building a

Company Events in 2024

2-28 Membership Material 3-3 Management of material Harmonious and Healthy

associations Being a Reliable Partner- Topics topics Future

Industry Exchange and (2021) Being a Reliable Partner-

Cooperation Community Communication

2-29 Approach to stakeholder Sustainability Management- and Development

engagement Stakeholder Engagement Zhende Charity Building a

2-30 Collective bargaining Caring for employee growth

Harmonious and Healthy

203-1 Infrastructure Future

agreements - Protection of Employees’ investments and services Rights and Interests Being a Reliable Partner-GRI 203: supported Community Communication

Material Topics Indirect and Development

Economic

GRI 3: 3-1 Process to determine Sustainability Management- Impacts Zhende Charity Building a

Material material topics Stakeholder Engagement (2016) Harmonious and Healthy

Topics 203-2 Significant indirect Future

(2021) 3-2 List of material topics

Sustainability Management- economic impacts Being a Reliable Partner-

Stakeholder Engagement Community Communication

Economic Performance and Development

GRI3: Procurement Practices

Material Sustainability Management- 3-3 Management of material Stakeholder Engagement GRI3:

Topics topics ESG Performance Tables Material 3-3 Management of material Being a Reliable Partner-(2021) Topics topics Sustainable Supply Chain

(2021)

GRI 204:

Procurement 204-1 Proportion of spending

Practices on local suppliers ESG Performance Tables

(2016)

125 1262024 Sustainability Report Report Benchmarking Index Table

Notes to Omission Notes to Omission

GRI

Standards Disclosure Location

GRI

Required Standards Disclosure Location Required

Omissions Reason Explanation Omissions Reason Explanation

Anti-corruption Promoting Green

302-1 Energy consumption Development-Resource

GRI3: Sustainability Management- within the organization Conservation and Utilization

Material Stakeholder Engagement3-3 Management of material ESG Performance Tables

Topics topics Improving the Governance

(2021) System-Compliance This Operation Management information 302-2-a

302-2 Energy consumption Information has not been 205-1 Operations assessed

for risks related to corruption ESG Performance Tables outside of the organization

Omitted 302-2-b missing/ collected so

302-2-c incomplete it cannot be

GRI 205: disclosed for

Anti- 205-2 Communication and Improving the Governance GRI 302: the time being.corruption training about anti-corruption System-Compliance Energy policies and procedures Operation Management

(2016) (2016) Promoting Green Development-Resource

205-3 Confirmed incidents of 302-3 Energy intensityESG Performance Tables Conservation and Utilizationcorruption and actions taken ESG Performance Tables

Anti-competitive Behavior

302-4 Reduction of energy Promoting Green

Sustainability Management- consumption Development-Resource GRI3:

Material Stakeholder Engagement

Conservation and Utilization

3-3 Management of material

Topics topics Improving the Governance 302-5 Reduction in energy Promoting Green

(2021) System-Compliance requirements of products and Development-Resource Operation Management services Conservation and Utilization

GRI 206: Water and Effluents

Anti- 206-1 Legal actions for anti-

competitive competitive behavior anti- ESG Performance Tables Sustainability Management-

Behavior trust and monopoly practices

Stakeholder Engagement

(2016) GRI3: Promoting Green Material 3-3 Management of material Development-Resource

Materials Topics topics Conservation and Utilization

(2021) Promoting Green

Sustainability Management- Development-Environmental

GRI3: Stakeholder Engagement Management System

Material 3-3 Management of material Promoting Green

Topics topics Development-Resource Promoting Green

(2021) Conservation and Utilization Development-Resource 303-1 Interactions with water Conservation and Utilization

ESG Performance Tables as a shared resource Promoting Green

301-1 Weight or volume of Development-Environmental

materials used ESG Performance Tables Management SystemGRI 303:

GRI 301: 301-2 Recycled input Water and 303-2 Management of water Promoting Green Materials

(2016) materials used

ESG Performance Tables Effluents discharge-related impacts Development-Environmental

(2018) Management System

301-3 Recycled products and

their packaging materials ESG Performance Tables 303-3 Water withdrawal ESG Performance Tables

Energy 303-4 Water discharge ESG Performance Tables

GRI3: Sustainability Management- 303-5 Water consumption ESG Performance Tables

Material Stakeholder Engagement3-3 Management of material

Topics topics Promoting Green

(2021) Development-Resource Conservation and Utilization

127 1282024 Sustainability Report Report Benchmarking Index Table

Notes to Omission Notes to Omission

GRI

Standards Disclosure Location

GRI

Required Disclosure Location

Omissions Reason Explanation

Standards Required

Omissions Reason Explanation

Emissions 306-4 Waste diverted from

GRI 306: disposal ESG Performance Tables

Sustainability Management- Waste

Stakeholder Engagement (2020) 306-5 Waste directed to ESG Performance Tables

GRI3: Promoting Green disposal

Material 3-3 Management of material Development-Environmental

Topics topics Management System Supplier Environmental Assessment

(2021) Promoting Green GRI3: Sustainability Management-

Development-Climate Change Material 3-3 Management of material Stakeholder Engagement

Mitigation and Adaptation Topics topics Being a Reliable Partner-

Promoting Green (2021) Sustainable Supply Chain

305-1 Direct (Scope 1) GHG Development-Climate Change This

emissions Mitigation and Adaptation information

ESG Performance Tables 308-1 New suppliers that were Information has not been

GRI 308: screened using environmental Omitted 308-1-a missing/ collected so

Promoting Green Supplier criteria incomplete it cannot be

305-2 Energy indirect (Scope Development-Climate Change Environmental disclosed for

2) GHG emissions Mitigation and Adaptation Assessment the time being.

ESG Performance Tables (2016)

308-2 Negative environmental

Promoting Green impacts in the supply chain ESG Performance Tables

305-3 Other indirect (Scope 3) Development-Climate Change and actions taken

GHG emissions Mitigation and Adaptation

ESG Performance Tables Employment

GRI 305:

Emissions 305-4 GHG emissions ESG Performance Tables GRI3:

Sustainability Management-

intensity

(2016) Material

Stakeholder Engagement

3-3 Management of material

Topics topics Caring for employee growth

305-5 Reduction of GHG Zhende Ecology Creating Value with Sustainable (2021)

- Protection of Employees’

emissions Rights and InterestsThinking

401-1 New employee hires

This and employee turnover ESG Performance Tables

305-6-a information

305-6 Emissions of ozone- 305-6-b Information has not been GRI 401: 401-2 Benefits provided to Caring for employee growth

depleting substances (ODS) Omitted missing/ collected so 305-6-c Employment

full-time employees that are - Protection of Employees’

incomplete it cannot be (2016) not provided to temporary or

305-6-d disclosed for part-time employees Rights and Interests

the time being.

401-3 Parental leave ESG Performance Tables

305-7 Nitrogen oxides (NOX)

sulfur oxides (SOX) and other ESG Performance Tables Labor/Management Relations

significant air emissions

Wastes GRI3:

Sustainability Management-

Material Stakeholder Engagement3-3 Management of material

Sustainability Management- Topics topics Caring for employee growth GRI3: Stakeholder Engagement (2021) - Protection of Employees’ Material 3-3 Management of material Rights and Interests

Topics topics Promoting Green

(2021) Development-Environmental GRI 402: This Management System Labor/ 402-1 Minimum notice Information information 402-1-a

306-1 Waste generation and Promoting Green Management periods regarding operational Omitted missing/

is temporarily

402-1-b unavailable so

significant waste-related Development-Environmental Relations changes incomplete it cannot be

impacts Management System (2016) fully disclosed.GRI 306:

Waste 306-2 Management of Promoting Green Occupational Health and Safety

(2020) significant waste-related Development-Environmental

impact Management System GRI3: Sustainability Management-

Material Stakeholder Engagement306-3 Waste generated ESG Performance Tables 3-3 Management of material

Topics topics Caring for employee growth-

(2021) Occupational Health and Safety

129 1302024 Sustainability Report Report Benchmarking Index Table

Notes to Omission Notes to Omission

GRI

Standards Disclosure Location

GRI

Required Disclosure Location

Omissions Reason Explanation

Standards Required

Omissions Reason Explanation

403-1 Occupational health Caring for employee growth- GRI3: Sustainability Management- and safety management Occupational Health and Material Stakeholder Engagementsystem Safety 3-3 Management of material

Topics topics Caring for employee growth

403-2 Hazard identification Caring for employee growth- (2021) - Protection of Employees’

risk assessment and incident Occupational Health and Rights and Interests

investigation Safety GRI 405: 405-1 Diversity of governance ESG Performance Tables

403-3 Occupational health Caring for employee growth-

Diversity bodies and employees

services Occupational Health and and Equal 405-2 Ratio of basic salary Safety Opportunity and remuneration of women ESG Performance Tables

(2016)

403-4 Worker participation to men

consultation and Caring for employee growth- Anti-discrimination

communication on Occupational Health and

occupational health and Safety

GRI3: Sustainability Management- safety

Material Stakeholder Engagement3-3 Management of material

GRI 403: 403-5 Worker training on Caring for employee growth- Topics topics Caring for employee growth

Occupational occupational health and Occupational Health and (2021) - Protection of Employees’

Health and safety Safety Rights and Interests

Safety(2018) Caring for employee growth- GRI 406: Non- 406-1 Incidents of Caring for employee growth 403-6 Promotion of worker Occupational Health and discrimination discrimination and corrective - Protection of Employees’ health Safety (2016) actions taken Rights and Interests

403-7 Prevention and Freedom of Association and Collective Bargaining

mitigation of occupational Caring for employee growth-

health and safety impacts Occupational Health and Sustainability Management-

directly linked by business Safety GRI3: Material Stakeholder Engagementrelationships 3-3 Management of material

Topics topics Caring for employee growth

Caring for employee growth- (2021) - Protection of Employees’

403-8 Workers covered by Occupational Health and Rights and Interests

an occupational health and Safety

safety management system GRI 407:

ESG Performance Tables Freedom of 407-1 Operations and This

403-9 Work-related injuries ESG Performance Tables Association suppliers in which the right to Information

information

407-1-a

and freedom of association and Omitted missing/ is temporarily

collective bargaining may be 407-1-b unavailable so 403-10 Work-related ill health ESG Performance Tables Collective incomplete it cannot be

Bargaining at risk fully disclosed.Training and Education (2016)

GRI3: Sustainability Management-

Material Stakeholder Engagement

Child Labor

3-3 Management of material

Topics topics Caring for employee growth- GRI3: Sustainability Management-

(2021) Employee Training and Material Stakeholder EngagementDevelopment 3-3 Management of material

Topics topics Caring for employee growth

404-1 Average hours of (2021) - Protection of Employees’

training per year per employee ESG Performance Tables Rights and Interests

GRI 404: 404-2 Programs for upgrading Caring for employee growth- GRI 408: ESG Performance Tables408-1 Operations and

Training employee skills and transition Employee Training and Child

Labor suppliers at significant risk for

Caring for employee growth

and assistance programs Development incidents of child labor - Protection of Employees’

Education (2016) Rights and Interests

(2016) 404-3 Percentage of employees receiving regular ESG Performance Tables Forced or Compulsory Laborperformance and career

development reviews GRI3: Sustainability Management- Stakeholder Engagement

Diversity and Equal Opportunity Material 3-3 Management of material

Topics topics Caring for employee growth

(2021) - Protection of Employees’ Rights and Interests

131 1322024 Sustainability Report Report Benchmarking Index Table

Notes to Omission Notes to Omission

GRI Disclosure Location GRI Standards Required Disclosure Location

Omissions Reason Explanation

Standards Required

Omissions Reason Explanation

GRI 409: This

Forced or 409-1 Operations and ESG Performance Tables 416-1 Assessment of the information

Compulsory suppliers at significant risk Caring for employee growth health and safety impacts

Information

for incidents of forced or - Protection of Employees’ GRI 416: of product and service Omitted 416-1-a missing/

is temporarily

Labor unavailable so compulsory labor

(2016) Rights and Interests Customer categories

incomplete it cannot be

Health fully disclosed.Local Communities and Safety

(2016) 416-2 Incidents of non- Being a Reliable Partner-

compliance concerning the Product and Service Safety

GRI3: Sustainability Management-

Material Stakeholder Engagement

health and safety impacts of and Quality

3-3 Management of material products and services

Promoting Green ESG Performance TablesTopics topics

(2021) Development-Environmental Management System Marketing and Labeling

This GRI3: Sustainability Management-

413-1 Operations with local Information information Material

Stakeholder Engagement

3-3 Management of material

community engagement Omitted 413-1-a missing/ is temporarily Topics topics

Being a Reliable Partner-

impact assessments and incomplete unavailable so (2021)

Product and Service Safety

GRI 413: development programs it cannot be and Quality

Local fully disclosed. This

Communities This 417-1 Requirements Information information (2016) 413-2 Operations with 417-1-aInformation information for Product and Service Omitted missing/

is temporarily

significant actual and unavailable so

potential negative impacts on Omitted 413-2-a missing/

is temporarily Information and Labeling 417-1-b incomplete

incomplete unavailable so

it cannot be

local communities it cannot be fully disclosed.fully disclosed. GRI 417: The Company did not

Supplier Social Assessment Marketing 417-2 Violations Involving have any violations related

and Product and Service to product and service

GRI3: Sustainability Management- Labeling Information and Labeling information and labeling

Material 3-3 Management of material Stakeholder Engagement (2016) during the reporting year

Topics topics Being a Reliable Partner- This

(2021) Sustainable Supply Chain information

417-3 Violations Involving 417-3-a Information is temporarily

This Marketing Communications Omitted missing/417-3-b incomplete unavailable so

414-1 New suppliers that Information information it cannot be

were screened using social Omitted 414-1-a missing/ is temporarily fully disclosed.unavailable so

GRI 414: criteria incomplete it cannot be

Supplier Customer Privacyfully disclosed.Social

Assessment This GRI3:

Sustainability Management-

Stakeholder Engagement

(2016) 414-2 Negative social impacts 414-2-c Information

information Material 3-3 Management of material

in the supply chain and ESG Performance Tables missing/ is temporarily Topics topics

Being a Reliable Partner-

Data Security and Privacy

actions taken 414-2-e incomplete unavailable so (2021)it cannot be Protection

fully disclosed. GRI 418: 418-1 Substantiated Being a Reliable Partner-

Customer Health and Safety Customer complaints concerning Data Security and Privacy

Privacy breaches of customer privacy Protection

GRI3: Sustainability Management- (2016) and losses of customer data ESG Performance Tables

Material Stakeholder Engagement3-3 Management of material

Topics topics Being a Reliable Partner-

(2021) Product and Service Safety and Quality

133 1342024 Sustainability Report Report Benchmarking Index Table

Benchmarking Index Table of SDGs

SDGs SDGs Sub-targets Reporting Chapters SDGs SDGs Sub-targets Reporting Chapters

1.1 By 2030 eradicate extreme poverty for all people Being a Reliable Partner-Innovative Solutions Being a Reliable Partner-Innovative Solutions

everywhere currently measured as people living on less 12.5 By 2030 substantially reduce waste generation Promoting Green Development-Environmental

than $1.90 a day. Being a Reliable Partner-Community through prevention reduction recycling and reuse.Communication and Development Management System

1.2 By 2030 reduce at least by half the proportion of men 12.6 Encourage companies especially large and

women and children of all ages living in poverty in all its Zhende Charity Building a Harmonious and

Promoting Green Development-Resource

transnational companies to adopt sustainable practices

dimensions according to national definitions. Healthy Future

Conservation and Utilization

and to integrate sustainability information into their

reporting cycle. Zhende Ecology Creating Value with

Being a Reliable Partner-Innovative Solutions Sustainable Thinking

Being a Reliable Partner-Community

3.8 Access to safe effective quality and affordable

Communication and Development Zhende Ecology Creating Value with

essential medicines and vaccines for all. 13.3 Improve education awareness-raising and human

Zhende Charity Building a Harmonious and Sustainable Thinkingand institutional capacity on climate change mitigation

Healthy Future adaptation impact reduction and early warning. Promoting Green Development-Climate Change

Mitigation and Adaptation

4.4 Substantially increase the number of youth and adults

Caring for employee growth-Employee Training

who have relevant skills including technical and vocational

and Development

skills for employment decent jobs and entrepreneurship.

5.5 Ensure women’s full and effective participation and

Caring for employee growth - Protection of

equal opportunities for leadership at all levels of decision-

Employees’ Rights and Interests

making in political economic and public life.

6.3 By 2030 improve water quality by reducing pollution

eliminating dumping and minimizing release of hazardous

chemicals and materials halving the proportion of untreated Promoting Green Development-Environmental

wastewater and substantially increasing recycling and safe Management System

reuse globally.

6.4 By 2030 substantially increase water-use efficiency across Promoting Green Development-Resource

all sectors and ensure sustainable withdrawals and supply of Conservation and Utilization

freshwater to address water scarcity and substantially reduce

the number of people suffering from water scarcity.

7.2 By 2030 increase substantially the share of renewable Promoting Green Development-Resource

energy in the global energy mix. Conservation and Utilization

7.3 By 2030 double the global rate of improvement in Zhende Ecology Creating Value with

energy efficiency. Sustainable Thinking

8.5 By 2030 achieve full and productive employment and decent

work for all women and men including for young people and

persons with disabilities and equal pay for work of equal value.

8.7 Take immediate and effective measures to eradicate forced Caring for employee growth - Protection of

labour end modern slavery and human trafficking and secure Employees’ Rights and Interests

the prohibition and elimination of the worst forms of child labour

including recruitment and use of child soldiers and by 2025 end Caring for employee growth-Employee Training

child labour in all its forms. and Development

8.8 Protect labour rights and promote safe and secure working

environments for all workers including migrant workers in

particular women migrants and those in precarious employment.

135 1362024 Sustainability Report Assurance Statement

Assurance Statement

137 1382024 Sustainability Report Assurance Statement

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