责任共创美C好R S未ANJ来IU

2024 SUSTAINABILITY AND ESG REPORT

华润三九可持续发展暨ESG报告

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露CONTENTS

02 Message from the Executive 04 Feature Story 1: 08 Feature Story 2: 10 About Us

Synergistic Development of Leading Green and Low-Carbon 14 Focus 2024

the Whole Industry Chain Development and Building the Near-

to Create Advantages in Zero Carbon Park 16 Sustainability Management

the Traditional Chinese

Medicine Industry

22 Innovation-Driven 36 Governance with Wisdom 50 Q u a l i t y E s c o r t N e w 64 Low-Carbon Leadership 92 Unite as One Sharing

Pioneering New Frontiers Strengthen Foundations for Quality Productive Forces Jointly Creating a Green Responsibility for a

with Technological the Company Development Promote Development Home Harmonious Society

Breakthroughs

25 Focus on Innovation and 39 Uphold Integrity Operate in a Sound 53 Control the Source of Medicines 68 Strengthen Control Advocate Green 96 Healthy Companions Happy 116 Outlook for 2025

Stable Development Manner Safeguard Health Development Employees

118 Key Performance Table

30 Deepening Transformation 46 Craftsmanship and Responsible 56 Optimizing Services Protecting 75 Multi - Dimensional Carbon Reduction 106 Optimizing supply to serve society

for Sustainable Development Operation Health Protect the Green 124 Index of Indicators

109 Collaborate for Mutual Benefit and

49 Strengthen Party Construction and 86 Ecological Balance and Green Building Social Contribution 127 Feedback

Compliant Operation

111 Caring for the Community and Giving 128 About this Report

Back to Society

113 Rural Revitalization Rich and Beautiful

Society02 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 03

Message from the Executive Adhere to the party building leadership build the foundation talents" and "promoting cooperation." We collaborate of development. We consistently place Party leadership at extensively with upstream and downstream participants in

the core of the entire corporate development process guiding the industry chain innovate cooperation models and are

the high-quality development of the Company through Party dedicated to establishing a new paradigm of high-quality

building efforts. By leveraging "political leadership" and development characterized by "joint construction sharing and

"organizational empowerment" we have consolidated and mutual benefit" aiming to better advance the preservation

expanded the gains from the thematic education based on Xi development exploration and inheritance of the traditional

Jinping Thought on Socialism with Chinese Characteristics for Chinese medicine industry.a New Era. Furthermore we foster deep integration between

Party building and business operations utilizing advanced Strive for win-win cooperation create and share better

technologies such as 5G and blockchain through the Deep Blue life. We always prioritize product quality and patient safety

Laboratory to achieve end-to-end control and optimization of implementing strict quality control measures to provide

the entire production process. the public with safer higher-quality and more accessible

medications. Meanwhile leveraging our industrial advantages

Practice green and low carbon empower the industry's we promote the seamless integration of traditional Chinese

sustainable development. In response to the national Dual medicine inheritance and innovation with rural revitalization

Carbon strategy we actively explore pathways to achieve carbon and engage in various public welfare activities. We adhere to a

peaking and carbon neutrality within the pharmaceutical people-oriented approach safeguard the rights and interests

industry. We have implemented a pilot project for a near-zero of our employees and provide a broad platform for talent

carbon emission park and enhanced energy utilization efficiency. development.By undergoing digital transformation and integrating intelligent

manufacturing applications we aim to enhance green and low- Continuously deepen reformation and promote high-

carbon development level establish a green and low-carbon quality development. We actively undertake the deepening

industrial chain and provide novel insights for the sustainable and upgrading of state-owned enterprise reformation focusing

development of the traditional Chinese medicine industry on enhancing core competitiveness and core functions. We

empowering the green and high-quality development of the strive to position the Company as a key player in scientific and

industry thereby contributing significantly to the promotion of technological innovation industrial control and security support

its sustainability. within the construction of a modernized industrial system and a

new development paradigm aiming to bolster our capabilities in

Delve deeply into core business build core competitiveness. modern governance and market-oriented operations.We are benchmarking against world-class enterprises to enhance

our business layout and expanding our core business across the Take on heavy burdens and dare to be a pioneer. CR Sanjiu

entire self-diagnosis and treatment spectrum. Our goal is to meet always keeps its original mission in mind striving for excellence

the health needs of every family member throughout the full while adhering to Xi Jinping Thought on Socialism with Chinese

cycle of prevention healthcare treatment and rehabilitation Characteristics for a New Era as its guiding principle. We fully

at multiple levels through products and high-quality services implement the work deployments and requirements of the

that offer a superior experience. Additionally we strengthen the CPC Central Committee the State-owned Assets Supervision

Panax ginseng industry and high-quality Chinese medicines to and Administration Commission (SASAC) and China Resources

reinforce our core business forming a "one body two wings" Group. Guided by the mission of "Caring for Public Health

business model that promotes the inheritance and innovation and Creating a Better Life" we uphold the values and sense

of responsibility of pharmacists and embrace the concepts of

The year 2024 marks the 75th anniversary of the founding of the People's Republic of China a pivotal year for realizing CR of traditional Chinese medicine and fosters high-quality sustainable development and ESG. With this mission leading

Sanjiu's "14th Five-Year Plan" strategic goals and a year of progress for the high-quality development of Chinese medicine. development. us we will adhere to the values and sense of responsibility of

Standing at the starting point of a new era CR Sanjiu shoulders the mission of a central enterprise embraces its role fully Promote the synergistic development of the whole industry pharmaceutical professionals practice sustainable development

implements the new development philosophy and strengthens the "Trinity" value creation capability. The Company promotes chain and create a model of industry standards. As a leading and ESG concepts and strive towards the goal of "becoming a

high-quality development through the dual-wheel drive of "Brand + Innovation" actively responds to the expectations of the enterprise in the traditional Chinese medicine industry chain leader in the public pharmaceutical and health industry."

nation and the people and provides consumers and patients with "Safe High-quality and Efficient" pharmaceutical products we actively promote the high-quality development of the entire

and services effectively fulfilling the social responsibilities contributing to the construction of a healthy China and the industry chain. We facilitate integrated industry development

realization of the Chinese dream with Sanjiu's strength. through "building alliances" "establishing platforms" "gathering04 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 05

Feature Story 1

Synergistic Development of the Whole Industry

Chain to Create Advantages in the Traditional

Chinese Medicine Industry

The development of the traditional Chinese medicine industry has become a powerful engine for revitalizing traditional Chinese

medicine and implementing the Healthy China strategy in the new era. It also serves as an effective pathway to align with the "Belt

and Road" initiative and build a community with a shared future for mankind. CR Sanjiu deeply implements the major decisions of the

CPC Central Committee on the Healthy China strategy and the promotion of traditional Chinese medicine inheritance and innovation.By advancing the high-quality development plan for the industry chain CR Sanjiu fulfills its responsibility and mission of "Caring for

Public Health and Creating a Better Life" through practical measures driving the high-quality development of the entire industry chain.Pay Attention to the Planting Management of Chinese Medicine Herbs and

Guarantee the Quality of the Source CR Sanjiu Wild Chrysanthemum Standardized Planting Base

The germplasm resources of traditional Chinese medicine constitute the strategic resources of the country the core of quality Promote the Intelligent Manufacturing of Traditional Chinese Medicine and

control for traditional Chinese medicine the foundation of its efficacy and the source of development for the traditional Chinese Improve Quality

medicine industry. CR Sanjiu prioritizes high-quality medicinal materials in its upstream operations exercising rigorous control over

the entire process from the cultivation of seeds and seedlings of Chinese medicinal herbs to the establishment of planting bases in

order to guarantee the stability and reliability of the quality of Chinese medicinal materials and thereby lay a solid foundation for the CR Sanjiu focuses on innovation-driven development accelerating the creation of new high-quality productivity. The Company

development of the traditional Chinese medicine industry. prioritizes the construction of Chinese medicinal herb planting bases and intelligent factories aiming to transition from traditional

"manufacturing" to "intelligent manufacturing" in the planting and production of traditional Chinese medicines. This transformation

is intended to improve the quality and safety of Chinese medicine products. CR Sanjiu actively seeks consensus among industry

stakeholders fostering a new ecosystem for the integrated development of Chinese medicine. As a mainstay and integrator the

Company is dedicated to realizing value management across the entire Chinese medicine industry chain promoting the inheritance

and innovation of traditional Chinese medicine and driving its high-quality development.Breed high-quality seedlings. The Company specializes in of more than 300000 mu across China a total of 13 varieties

breeding high-quality seedlings and selecting core raw materials have passed the new version of the GAP extended inspection.for OTC products including wild chrysanthemum gangmei trident The Company has developed a traceability system for the Construction of whole industry chain management. From the 5 aspects of "production academia research medicine and

bitter two-faced needle and nine miles. Through meticulous seed production and management of Chinese herbal medicines application" we aggregate policy guidance planting and production scientific research and transformation and clinical application

selection and breeding processes the Company has cultivated that aligns with the national drug informatization traceability to explore new modes for the traditional Chinese medicine industry. Our aim is to promote new integration and development and to

new varieties such as "999 Huaju" and "999 Huagang." Compared system. This system has been promoted to over a hundred advance the "Chinese Medicine Industry Chain High-Quality Development Plan" in a multidimensional manner. Leveraging the entire

to traditional varieties. Successfully planted in Hubei Anhui planting enterprises enabling full-chain traceability for the industry chain we concentrate on enhancing its strengths and rectifying its weaknesses.Henan and other regions the cultivation of these new varieties production of core herbs used in major products such as Cold

has been promoted effectively for more than 200000 mu resulting and Flu Spirit and fostering a collaborative ecosystem across

in dual improvements in both quality and mu-yield. the upstream midstream and downstream segments of the R&D of innovative Chinese medicine prescriptions. The Company conducts basic research on the Chinese medicine industry chain

traditional Chinese medicine industry chain. and key issues enhances its top-level design capabilities carries out specialized research on the productivity of new high-quality

Standardize the planting of medicinal herbs. Exploring the Chinese medicines and the development of a wide variety of products explores the clinical value of Chinese medicines and engages

standardized planting model for medicinal herbs we have in research on Class I new medicines classical prescriptions and hospital preparations. Notably three classical prescriptions—Ling

led the formulation of several ecological planting technical Gui Jiu Gan Granules Wen Jing Tang Granules and Paeonia Radix Glycyrrhizas Sinensis Granules—have been approved for marketing

standards and established over 30 standardized planting maintaining the Company's leading position in the industry in terms of the number of approved classical prescriptions.bases for Chinese medicinal herbs covering a planting area06 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 07

Deepen research on drug varieties. We partnered with medical institutions and evidence-based medical research entities to Promote the Brand Culture of Traditional Chinese Medicine and Continuously

undertake evidence-based research on listed Chinese medicinal products namely Zhengtian Capsule Ginseng and Forsythia Injection

and Xuesetong Soft Capsule. Our objective was to enrich and enhance the body of evidence-based medical data for these Chinese Enhance the Brand Influence

medicinal products and continually elevate their competitive edge. Notably select findings from our evidence-based research on

Ginseng and Forsythia Injection and Haeseitong Soft Capsule have been featured in prestigious international journals like Critical Care

Medicine and JAMA Network Open earning recognition from our counterparts worldwide. CR Sanjiu responds to consumption upgrading actively spreads the culture of Chinese medicine strengthens brand building and

promotion launches the 777 Brand assists in the high-quality development of the Panax ginseng industry chain improves consumer

awareness and recognition of Chinese medicine and builds a Chinese medicine brand with international influence.Explore the intelligent manufacturing of traditional Chinese medicine. Leveraging a self-constructed comprehensive collaborative

cloud manufacturing platform tailored for traditional Chinese medicine the Company manages production tasks enforces

standardized operating procedures (SOPs) and ensures business operations are mobile and seamless. At its heart digital twin

technology powers factory production simulations intelligent remote operations and maintenance and other functionalities thereby Launch innovative products. We upgrade our products Upgrade brand communication. We continuously innovate

crafting a digital platform that is openly accessible secure and reliable. As an example the automation equipment at CR Sanjiu's around population ingredients packaging and process to fully our brand communication strategies by selecting popular

Guanlan facility has boosted overall production efficiency by 20% trimmed operational costs by 20% cut energy consumption per unit optimize the medication experience and provide consumers dramas for print advertisements and content integration

of output value by 12% and decreased the first-inspection defect rate by 25%. with better quality products. sparking national conversations and debates. We collaborate

with trending variety shows integrating into diverse scenarios

Exploring marketing models. We have established cross- to narrate the product's value. On platforms like Douyin

Strengthen the industrial layout. By emphasizing innovative brands technologies and products we've driven forward multiple border partnerships with JD.com and other major online we implement KOL and short video marketing campaigns

M&A integration projects. We're actively engaging with the nation's key strategies to transform traditional industries with new quality- platforms while concurrently empowering our offline retail partnering with renowned and high-quality celebrities.focused productivity cultivate new sectors plan for the future industries and foster the preservation and advancement of traditional customers. Together we have crafted a new industrial value Leveraging various trending topics we effectively convey

Chinese medicine. Our goal is to support the high-quality development of the traditional Chinese medicine industry chain. chain that fuses "Internet Medicine and Pharmaceuticals." Our product benefits enhancing brand awareness and favorability.products 999 Cold & Flu Spirit and 999 Strong Pei Pa Koa Nu Additionally we introduce the brand's cartoon mascot "Uncle

have witnessed significant growth and now lead the pack in San" the head of the Warm Heart Healing Institute to generate

Promote the industry chain cooperation. CR Sanjiu actively promotes the establishment of specialized committees focused on new retail channels particularly O2O. strong social engagement and positive communication

intelligent manufacturing origins and processing within the sector. Through specialized meetings organized by relevant authorities momentum.industry events and the development of specialized platforms CR Sanjiu creates a platform for industrial cooperation and exchange

tailored to the traditional Chinese medicine industry chain which serves to share insights on industry chain construction and

facilitate the formation of industry consensus. By deepening school-enterprise collaborations and enterprise-land partnerships we

continuously enhance the competitiveness of the traditional Chinese medicine industry and promote practical and in-depth collective

action across the chain.Participation in Hosting the 11th Chinese Herbal Medicine Base Building and Sharing Exchange Conference Hosting the 777 Brand Launching Session08 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 09

Feature Story 2

Leading Green and Low-Carbon Development

and Building the Near-Zero Carbon Park

In the face of frequent extreme weather events and escalating climate change and during the crucial transition from dual control of

energy consumption to dual control of carbon emissions green and low-carbon development stands as the defining theme of our

time. It is an indispensable path for enterprises seeking sustainable growth and a testament to the sense of social responsibility. As

a significant state-controlled pharmaceutical company listed on the stock market CR Sanjiu is deeply committed to implementing

the national Dual Carbon strategy. The Company actively embraces the era of green and low-carbon development persistently

constructing near-zero-carbon industrial parks and green factories. Furthermore CR Sanjiu continues to explore the application of

renewable energy sources accelerating the transformation of its energy structure towards low/zero-carbon emissions.Near-Zero Carbon Park at CR Jiuxin

Green Concept-Driven Planning Zero-Carbon Park Pathways

When formulating the overall strategic plan for the Near-Zero Carbon Park the Board of Directors and the EHS Committee of the Synergize Industries to Build a Green and Low-Carbon System

Company demonstrated forward-thinking and adaptability guided by President Xi Jinping's Thought on Ecological Civilization. We

actively aligned with the national Dual Carbon strategy aiming to establish a near-zero-carbon enterprise that sets benchmarks in the The industrial synergy has become a powerful engine for green and low-carbon development during the construction of the near-zero

industry committed to advancing the "zero-carbon" transformation of the pharmaceutical industry chain thereby contributing to CR carbon park at CR Sanjiu.Sanjiu's efforts to achieve the national goals of carbon peaking and carbon neutrality on schedule. Through these initiatives CR Sanjiu

aims to play a pivotal role in the nation's journey towards carbon neutrality.Sharing of technical achievements. Sharing of green and low-carbon technological achievements within the near-zero carbon park

for example within the Guanlan base park energy operational sites such as photovoltaic power generation water storage and cooling

"Zero Carbon" energy. We have constructed distributed Promote the experience of building near-zero carbon parks. systems and energy storage systems are shared to enhance energy utilization efficiency. Utilizing the energy and carbon asset management

photovoltaic power generation projects with a total installed CR Jiuxin CR Sanjiu (Chenzhou) CR Sanjiu (Zaozhuang) and information platform relevant park business departments can monitor and analyze energy consumption in real-time and allocate energy

capacity of 20.1047 MWp ensuring that solar power is prioritized other subsidiaries are continuously advancing the construction resources rationally to prevent wastage.for internal use with any excess power being connected to the grid. of near-zero carbon parks setting new benchmarks for Technical exchanges and cooperation. We regularly organize internal and external technical exchanges on energy conservation and carbon

By 2024 these projects are expected to generate 10784125 kWh of green and low-carbon development in the pharmaceutical reduction to share technologies and experiences pertaining to low-NOx combustion retrofits for boilers central air-conditioning upgrades

green energy of which 92.90% will be utilized for production and industry. Notably CR Jiuxin's near-zero carbon park project air compressor enhancements and waste heat recovery among others aiming to collectively elevate the standard of green and low-

office operations within the factory area. was successfully included in "the 4th Batch of Pilot Projects for carbon technologies. Additionally we collaborate with universities and scientific research institutions to foster industry-academia-research

Shenzhen's Near-Zero Carbon Emission Zone" in 2024."Zero Carbon" commuting. We encourage employees to partnerships thereby strengthen the research development and deployment of innovative green and low-carbon technologies.prioritize the purchase of new energy vehicles and embrace low-

carbon travel. All commuter shuttles at the Guanlan base and

other business units have been replaced with new energy vehicles.Furthermore the park has been equipped with DC charging piles Green Factory Establishment Significant establishment Achievements

to accommodate the charging needs of employees' new energy Highlight the Effectiveness of

vehicles and shuttles. Green Development As of the end of 2024

Digital "Zero Carbon". An information platform for energy and State-level green factories: Provincial-level green

carbon asset management has been established. Diagnoses The Company integrates the concept of green CR Sanjiu factories: production and operation energy utilization and carbon emissions development deeply into its strategic planning

through real-time data monitoring and analysis generates and operational management continuously CR Sanjiu_(Ya'an) Shenvang Saniiu

the optimal energy-saving and carbon reduction strategies for increasing investment in green technology research CR HiTech CR Sanjiu(Chenzhou)

operation. Simultaneously a carbon emission management and development energy conservation emission CR Jinchan Aonuo Pharmaceutical

system has been put in place to enhance the reward and reduction and resource recycling aiming to achieve

punishment system for energy saving and carbon reduction. green upgrades in production and operations. In CR Benxi Sanyao

The Company has integrated system engineering principles the green factory establishment efforts CR Sanjiu CR Sanjiu (Nanchang) Municipal green factories:

process analysis methods and the concept of cyclic management has achieved significant results demonstrating the CR Saniiu(Zaozhuang)

(planning implementing checking and improving) into its carbon responsibility of an industry leader through practical Zhejiang Zhongyi

emission management. This approach has established a long-term actions.mechanism for promoting energy efficiency and carbon reduction

within the Company. Near-Zero Carbon Park at CR Sanjiu Guanlan10 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 11

About Us

Company Profile

14th Five-Year Plan

China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. is a large state-controlled pharmaceutical listed company mainly engaged

in the research and development of pharmaceutical products production sales and related health services listed on the Shenzhen

Stock Exchange on March 9 2000 (Stock Code: 000999) and formally entered China Resources (Holdings) Co. Ltd. in 2008.With the mission of "Care for Public Health Create a Better Life Together" the company strengthens independent R&D and innovation Care for public health create a better life together

improves the quality control level of its products provides "Safe High-quality High-efficiency and Environmentally Friendly" Mission

pharmaceutical products and services for the public safeguards public health and protects public interests and further builds an

influential and sustainable corporate responsibility and ESG brand.Key Performance

Become a leader in the public pharmaceutical and

healthcare industry

Total assets Total profit of

Strive to be a top enterprise in the industry

RMB 40081.97 million RMB 4593.61 million

Total revenues Total number of employees

Medical End (Rx) fully leverage the value-creating

capabilities of traditional Chinese medicine and the

RMB 27616.61 million 20031 Consumer End (CHC) provide products with excellent experiences and high-quality services to meet the health advantages of integrating traditional Chinese and

needs of every family member across the entire cycle of Western medicine. Focus on core pipelines enhance

prevention healthcare treatment and rehabilitation. hospital brand influence empower self-diagnosis

Vision and Consolidate the position as a leading brand and treatment businesses and promote synergistic

Goals development across both ends to achieve deep-rooted

and flourishing growth.Corporate culture DNA

* Persist in realizing the great rejuvenation of the

Chinese nation

MISSION * Pursue creation of a happy life for the people

* Strive for the economic prosperity for the country Whole-industry-chain

management of

Mission Fields and Innovation and Mergers and R&D traditional Chinese Digitalization acquisitions integration

* Care for public health Initiatives medicine

* Create a better life together

Vision

VISION VALUE * Become a leader in the public healthcare industry

DNA Value Consumer Academic Channel and terminal Organizational

* Integrity Performance-Oriented Capabilities communication promotion control capability

* People-Oriented Win-Win Collaboration

Spirit

* Dedicate oneself to the cause of the country

* Be the pioneer in innovations

* Forge ahead with perseverance

Follow the State- Strengthen ATMOSPHERE SPIRIT * Fight for the better Supervision Foster

Organizations footprint of

owned Safe Organizational enterprise

Atmosphere the Party enterprise development support through

and cultural

reform talent regulation development

* Sincerity Solidarity Open-mindedness Proactivity

Cultural Slogan

* Care · Responsibility · Excellence12 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 13

Business Aress and Products The Company has successively expanded its brands such as "Tianhe" "Shunfeng" "Aonuo" "Kangwuite" "777" "Kunzhongyao

1381" etc. which are well recognized by consumers and are built into professional brands in the fields of orthopedic plasters

CR Sanjiu is mainly engaged in the research and development production sales and related health services of pharmaceutical skin medication children's health gynecological medication chronic disease management and high-quality Chinese medicines

products with its main core business set in the areas of CHC health consumer products and Rx prescription drugs. The Company has respectively laying a solid foundation for long-term business development.wide product coverage and continuous enrichment of product lines and varieties. CHC health consumer products mainly cover cold

and flu skin gastrointestinal cough orthopedics pediatrics dietary supplements and other categories its core products hold a high Preventive Nutritional Supplements Vitamins and minerals Oropharyngeal Personal Care

market share. The Company's prescription drug business covers anti-tumor cardio-cerebral vascular digestive system orthopedics

pediatrics anti-infective and other therapeutic areas and it owns Ginseng injections Mitoxantrone Hydrochloride injections for tracing

purposes toadstool tablets and injections Yixuesheng capsules cefpirome sodium for injection and other prescription drug varieties Brand Treatment Cold & Flu Pediatrics Skin Gynecology Gastrointestinal Hepatology Orthopedics

enjoying a high reputation at the medical end of the spectrum. Blueprint

In the field of industry chain business group CR Sanjiu and its subsidiary Kunming Pharmaceutical Group are mutually empowered Health Chronic Disease Chinese Medicine

and synergistic making continuous efforts in the development of the Panax ginseng industry and the brand building of "777" and

"1381" and promoting Kunming Pharmaceutical Group to become the No. 1 health stock in silver hair economy.Become a leading brand in household medications

Organizational Structure

"1+N" Brand Strategy China Resources Sanjiu Medical & Pharmaceutical Co. Ltd.Build leading professional brands

Industrial Chain CHC Business Group RX Business Group R&D Production and Business Group Functional Platforms

Kunming Pharmaceutical OTC Business Division Traditional Chinese Medicine Public Affairs Center

Group Co. Ltd. (600422.SH) Business DivisionProfessional Brand Business

Division Prescription Drug Business

Human Resources Center

Division

Health & Wellness (Shenghai) Financial Management Center

Business Division Innovative Business Division Production Operations Center

Production Technology Center

Vitamin and mineral Pediatric products Traditional Chinese Orthopedic products Cold and flu Small medical KPC1951 Business Division China Resources Sanjiu (Tangshan) Pharmaceutical Co. Ltd.supplements medicine health products medications devices R&D CenterKunming Traditional Chinese Aonuo (China) Pharmaceutical Co. Ltd.Medicine 1381 Business Division Anhui China Resources Jinchan Pharmaceutical Co. Ltd.Traditional Chinese Medicine Research

777 Business Division (China Hefei China Resources Shenlu Pharmaceutical Co. Ltd. Institute

Resources Shenghuo) China Resources Sanjiu (Ya'an) Pharmaceutical Co. Ltd. Intelligence and Digitalization Center

Gynecological products Gastrointestinal Anti-fatigue products Nutritional Dermatological Liver and gallbladder Beijing China Resources Gaoke Natural Medicines Co. Ltd. Investment Center

products supplements products health products Shenzhen China Resources Jiuxin Pharmaceutical Co. Ltd.Guanlan Production Base Marketing Department

Shenzhen Jiuxing Printing & Packaging Group Co. Ltd.China Resources Sanjiu (Huangshi) Pharmaceutical Co. Ltd. Strategy and Operations Department

China Resources Sanjiu (Chenzhou) Pharmaceutical Co. Ltd. EHS Management Department

China Resources Sanjiu (Nanchang) Pharmaceutical Co. Ltd.China Resources Sanjiu (Zaozhuang) Pharmaceutical Co. Ltd. Legal and Compliance Department

Healt Guangdong China Resources Shunfeng Pharmaceutical Co. Ltd.Go ho Cd onsu Liaoning China Resources Benxi Third Pharmaceutical Co. Ltd.Securities Affairs Department

Digestive health Acute and s (CH mC er

critical care ) B

usiness Guilin China Resources Dahe Pharmaceutical Co. Ltd. Party-Mass Work Department

Hangzhou China Resources Laotongjun Pharmaceutical Co. Ltd.Jilin Sanjiu Jinfukang Pharmaceutical Co. Ltd. Audit Department

Discipline Inspection Commission

Innovative Drug Research Institute Office

Cardiovascular and Anti-infectives Panax notoginseng series products Health Drug Research Institute

cerebrovascular

diseases Process Technology Research Institute

Inspection Office

Advanced Delivery Technology Research Institute

Traditional Chinese Medicine Resources Research Institute

Fuxi Laboratory

Deep Blue Laboratory

Oncology Traditional Chinese Orthopedic Kunzhongyao 1381 series Waterdrop Laboratory

medicine formula products

granules * National Enterprise Technology Center

* National Key Laboratory for Modernization of Classical Prescriptions in Traditional Chinese Medicine

* National-Local Joint Engineering Research Center for Key Technologies of Oral Traditional Chinese Medicine Preparations

Brand Blueprint * National Engineering Research Center for Traditional Chinese Medicine* Key Laboratory for Traditional Chinese Medicine Quality Research and Evaluation

* Guangdong Lingnan Medicinal Resources and Modern Traditional Chinese Medicine Manufacturing Innovation Center

CR Sanjiu has strong brand operation capability and has been listed on WPP's annual list of the top 100 most valuable Chinese brands * Guangdong Small Molecule Drug Innovation Center

for many times. The Company adopts "1+N" brand strategy with "999" as the main brand which enjoys high recognition among * Shenzhen Engineering Laboratory for Modernization of Traditional Chinese Medicine and New Drug Creation* Shenzhen Key Laboratory for Quality Control of Traditional Chinese Medicine

consumers and the pharmaceutical industry and has been honored as "China's Most Recognized Trademark" and "China's Most * Shenzhen Engineering Technology Research and Development Center for Traditional Chinese Medicine Preparation Technology

Valuable Brand" for many times.In

B du us sin tre is as l CG hro au inp

s

ion Dr

ug

Presc

ript

Busin

ess

(Rx)14 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 15

Focus 2024

Capital market recognition Driving Technological Innovation Advancing In-depth Development Advancing In-depth Development Promoting Sustainable

Development Together

* A warded the highest "A" grade in * A warded again as a benchmark in the * Signed a product sales cooperation * A n ISO international standard for * T he classical formula Wenjing Tang

information disclosure assessment by special assessment of outstanding pilot agreement with China Resources traditional Chinese medicine has been Granules has been approved for * B oth CR Sanjiu and its subsidiary

the Shenzhen Stock Exchange for 10 enterprises for "Exemplary Scientific Biopharmaceutical officially released market launch Kunming Pharmaceutical Group were

consecutive years Reform Actions" by the State-owned awarded the "ESG Golden Bull Award

Assets Supervision and Administration * T he first product in the ophthalmology Top 100" and "ESG Golden Bull Award

* Won six honors at the 5th "Panorama Commission * Co-established the "Innovative field "Sodium Hyaluronate Eye Central Enterprises Top 50" at the

Investor Relations Gold Award" * Awarded the title of "National Delivery Technology Joint Research * C efpirome Sulfate for Injection Drops" has been approved for market second Guoxin Cup

Manufacturing Single Champion Institute" with the Yangtze River Delta (Saibipu) has been included in the launch

* W on multiple awards including Enterprise" by the Ministry of Industry Smart Oasis of Zhejiang University National Reimbursement Drug List

"Golden Bull Most Valuable and Information Technology

Investment Award" "Golden * T he internalized medical device * R ecognized as a pioneer in ESG

Information Disclosure Award" and * P articipated in the project "Construction product "Physiological Saline Nasal governance with the "Responsible

"Top 100 Most Valuable Mainboard and Demonstration Application of

* Initiated cooperation with China

Resources Power on new energy * O btained the first clinical approval

Spray" has been approved for market Whale Bull Award"

Listed Companies" etc. the Theory and Technical System for for the indication of "carotid launch

Ecological Planting of Chinese Medicinal projects atherosclerosis" in the traditional

Herbs" which won the second prize of

* Recognized as "Best Practice for 2023 Chinese medicine industry * C efoperazone Sodium and Sulbactam the National Science and Technology

Annual Report Performance Briefing" Sodium for Injection and Ceftazidime * R anked first in the Southern Weekend Progress Award * Collaborated with Tencent Cloud to

"Best Practice Case for 2024 Listed and Avibactam Sodium for Injection "2023 Pharmaceutical Corporate Social

* C ontributed to the research project launch the "Sanjiu Health Manager" Company Board of Directors" and have been approved for market Responsibility Research List"intelligent entity

"Best Practice Case for 2024 Listed "New Treatment Principles and * T he new product "Terbinafine launch

Company Board Secretariat" Efficacy Evaluation Methods for Hydrochloride Spray" has been

Common Functional Gastrointestinal approved for market launch.Disorders Based on 'Brain-Gut * Formed a strategic partnership with

* C R Jiuxin's Cefazolin Sodium Hydrate * A warded the "2024 Best Practice Case

Coordination'" which won the first Dyne Pharmaceutical to jointly

for Injection has been approved for for Sustainable Development of Listed

market launch in Japan

prize of the Beijing Science and promote Vitamin D drops Companies"

Technology Progress Award * T he first classical traditional Chinese

* " Glucosamine Sulfate Capsules" have

Promoting Brand Development * E ngaged in the "National Chinese medicine formula Linggui Zhugan

Medicinal Germplasm Resources" * Signed a strategic cooperation Granules developed by the company

been approved

* R eceived the "A-share ESG Value

project which won the first prize of agreement with China Mobile has been approved for market launch Award" at the China Listed Companies

* The "999" brand has been recognized the Sichuan Science and Technology * " Chlorpheniramine Maleate" has been Yinghua Awards

as one of the first outstanding product Progress Award approved for market launch

brands in the central enterprises' * Entered into a strategic cooperation * I nvolved in the project "Construction

brand leadership initiative agreement with Jiuzhou Tong * T he classical traditional Chinese and Promotion of the Technical * " Oseltamivir Phosphate Dry Pharmaceutical Group medicine compound preparation Suspension" has been approved for * R anked in the "2024 China Corporate System for 'Human Use Experience' in

* The "Sanjiu Weitai" brand has been Shaoyao Gancao Granules has been Traditional Chinese Medicine" which market launch

ESG 100 Index"

certified as one of the first batch of approved for market launchwon the first prize of the Guangdong

"Guangdong Time-honored Brands" Science and Technology Progress

Award * W on the ESG Award of 2024 Shanghai

* Listed again in "2024 Cato BrandZ Top

100 Most Valuable Chinese Brands" * A warded two first prizes in the Science

Securities News Golden Quality Award

and Technology Awards of the China

* L isted in the "2024 Guangdong Hong Association of Chinese Medicine

Kong and Macao Greater Bay Area * Officially launched the important * P articipated in the editing of CASS-ESG

List of Top 100 Most Valuable Chinese informatization system for intelligent 6.0 General Framework for Corporate

Brands" manufacturing (LIMS) Sustainability Reporting Guidelines in

China

* CR Sanjiu's subsidiary Kunming

Pharmaceutical Group has completed

the acquisition and joined hands with

Sheng Huo Pharmaceutical to jointly

build the "777" brand16 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 17

Sustainability Management Management Guidelines

The Board of Directors of CR Sanjiu consistently strengthens the framework. In 2024 we revised the CR Sanjiu External Donation

Sustainability and CR Sanjiu is committed to sustainable development and ESG management guided oversight of sustainable development and ESG matters driving Management System to strengthen the management of external

by the principle of "creating value for shareholders providing opportunities for continuous improvements in the Company's sustainable donation matters. Additionally the Company has created an ESG concepts employees and assuming responsibility for society." We have effectively integrated development governance system ensuring the integration of ESG section on its official web operational site to disclose ESG-

the concept of sustainable development into the overall development strategy of ESG considerations into the Company's major decision-making related policies and practices regularly publish sustainability

the pharmaceutical industry embedding it across all stages of the product lifecycle processes and business operations. and ESG reports.including medicinal herb cultivation pharmaceutical R&D and health consumption. CR Sanjiu established the Management Measures for Social By 2024 CR Sanjiu have prepared and published social

While pursuing economic growth we prioritize safeguarding the legitimate rights and Responsibility Work of CR Sanjiu which officially took effect responsibility reports for 16 consecutive years with steady

interests of shareholders and creditors and maintain fair and honest relationships with and was implemented in January 2023. The policy applies to all improvements in both the "quality" and "quantity". Starting in

customers suppliers and employees. In our production and operations we actively centers departments divisions and business units within the 2022 CR Sanjiu effectively integrated key ESG indicators with

promote green and low-carbon practices aligning with the "Carbon Peak and Carbon Company. In alignment with the policy CR Sanjiu continuously CSR indicators upgrading its original Social Responsibility

Neutrality" policies by implementing energy-saving and emission-reduction initiatives. refines its sustainable development indicator system and Report to a Sustainable Development Report. In 2023 the

Additionally we are dedicated to charitable and public welfare endeavors such as rural enhances performance management practice communication Sustainable Development Report was further upgraded to a

revitalization community development and emergency disaster relief. By coordinating report compilation and dissemination as well as evaluation and Sustainable Development and ESG report.our corporate activities with social and environmental goals we strive to achieve assessment within its sustainable development management

harmonious and sustainable development for both the Company and society.Statement of the Board

Sustainability CR Sanjiu continuously enhances the sustainable development and ESG implementation mechanism. Guided by the CR Group's "14th Five-Year Plan" for social

and ESG Work responsibility the Company carries out its annual sustainable development and ESG The Board of Directors of CR Sanjiu holds the overall responsibility for sustainable development and ESG-related matters while the

Implementation initiatives closely integrating its business activities with sustainable development Company's management is tasked with leading and making decisions on the sustainable development management strategy as well

management to drive high-quality and sustainable growth. as assessing the risks and opportunities associated with the Company's sustainable development. Under the Board of Directors a

Sustainability Working Group has been established to implement and follow up on tasks assigned by senior leadership. The Public

Affairs Center is responsible for the daily management and coordination of sustainable development initiatives. Additionally each

center department and business unit are accountable for promoting and implementing sustainable development practices at the

Governance Framework operational level.This report provides a detailed disclosure of the progress and effectiveness of CR Sanjiu's sustainability and ESG initiatives in 2024.Moving forward the Board will continue to refine and optimize the Company's ESG governance framework.CR Sanjiu consistently enhances the sustainable development management system and optimizes its corporate governance

structure. The Company has established a top-down sustainable development and ESG governance framework with clearly

defined responsibilities involving the Board of Directors the Management and the Sustainability Working Group. This

collaborative structure drives the Company's sustainable development initiatives and elevates the level of ESG governance. Risk and Opportunity Identification

The Board of Directors operating within the framework of the existing internal control and risk management system evaluates the

risks and opportunities associated with the Company's ESG factors. It identifies oversees and manages issues and activities related to

Board of Directors ESG governance to ensure the effective implementation of the sustainable development strategy.Evaluation and Assessment

Management Team

CR Sanjiu encourages all subsidiaries to implement sustainable bonus + equity incentives." We have integrated sustainability

Public Affairs Center development and ESG practices in alignment with their performance indicators such as environmental performance

business development needs and resource capabilities. Each anti-corruption efforts and compliance into our current

Sustainability Working Group subsidiary is urged to undertake or participate in relevant incentive remuneration policy. In the event that we fail responsibility fulfillment projects based on its specific to achieve or underperform against the current year's

circumstances fostering deeper progress and impact in these environmental performance appraisal targets there will be a

initiatives. corresponding deduction in salary. We conduct annual reviews

and evaluations of our senior management's performance

Each Department Each Center Business Divisions Subordinate The Board of Directors has established the Remuneration and disclose information on the remuneration of the Board of Business Units and Evaluation Committee which is tasked with formulating Directors and management in our annual report. For further

and reviewing the remuneration structure and policies for details please refer to the CR Sanjiu 2024 Annual Report.the directors and senior management of the Company.The remuneration structure for CR Sanjiu's management

team consists of "basic salary + annual target performance18 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 19

Stakeholder Communication

Identify each important stakeholder of CR Sanjiu explain the expectations and demands of the stakeholders respectively as well as

the communication channels and responsible communication actions carried out by CR Sanjiu to respond to the expectations of the

stakeholders.Stakeholder Government/ Shareholders/Regulatory Agencies Clients Employees Executives/Investors

Daily communication Customer satisfaction survey Complaints and feedback Business performance

improvement

Communication Working meetings and Customer relationship Training activitiesproject cooperation management Performance feedback Multi-channel communicationRequirements reporting Product quality and safety Governance capability

management improvement

Social Responsibility Gallery

Implement management Strengthen quality and Protect the rights and interests Protect reasonable investment returns

requirements safety supervision of employees Enhance the quality of information

Communication Assist rural revitalization Expand big health business Caring for employees' life disclosure

Capacity Building

Response Build ESG/sustainable Raise customer satisfaction Promote career development Maintain investor relations CR Sanjiu organizes annual professional training sessions for the management and development strategy Actively handle customer Improve democratic Hold performance briefing sessions all members of the Sustainability Working Group. These sessions aim to review

Create career opportunity complaints communication mechanism the achievements of the year's sustainable development and ESG management Sound media communication channels efforts share the latest trends in sustainable development and discuss industry best

practices to enhance the Company's sustainable development and ESG management

performance. Additionally CR Sanjiu actively participates in domestic and international

communication and exchange activities related to sustainable development. The

Company also collaborates with partners and social responsibility/ESG research

Stakeholder Partners Non-Profit Peer Community organizations to conduct relevant training programs.Organizations Companies

Key Performance

Supplier Dual-carbon goal Forum and conference Community communication

management training Implementing During 2024

Communication Working group Social welfare activitiesExchange symposium Green operation

Requirements Networking event CR Sanjiu conducted 12 dedicated training programsRising environmental

awareness on sustainable development

amounting to 722 training hours

Compliance management Respond to climate change Promoting industry development Conduct community service

Anti-corruption Energy saving and Discuss business opportunities activities

Communication Optimize workflow emission reduction Health knowledge promotion

with 186 participants involvedJoint R&D

Response Deepen project cooperation Environmental protection Sharing of experience Implement rural revitalization

Environmental protection

publicity and education Participate in ESG industry exchanges20 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 21

Materiality Issues Management CR Sanjiu Sustainability Issues Analysis

CR Sanjiu rigorously adheres to the process of dual materiality assessment scientifically conducts stakeholder questionnaire surveys

and identifies materiality issues to direct the sustainability management and information disclosure efforts thereby better fulfilling the 2 1

expectations and demands of stakeholders. 6 5

8

107

Impact materiality assessment 21

20134

2722113

Issue identification Issue survey 14 16

179

12

By analyzing standards and policy requirements Conduct questionnaire surveys on material issues 26 15

for sustainable development management both for both internal and external stakeholders including 28 24

domestically and internationally conducting scientific shareholders/ investors employees customers 2325 19

industry benchmarking and integrating the actual government/regulators partners industry peers media 18

situation and development strategy of the Company an non-governmental organizations and the general public

issue database comprising 46 topics was established. in the community.Importance to business development

Issue prioritization Issue review

Importance No. Issue

Based on the survey results of the materiality issues The Company's management along with external 1 Product/Service Quality Management

we prioritized the issues in terms of the "importance experts reviewed the results of the issue assessment 2 Integrity and Compliance

to business development" and "importance to and finalized 28 materiality issues for key disclosure 3 Create Economic Value

stakeholders." within the report. 4 Strengthen Risk Control

Highly Important 5 Product/Service Accessibility and Inclusiveness

6 Occupational Health and Safety

7 Adherence to the Party Leadership

8 Product/Technology R&D Innovation

Finance materiality assessment 9 Protect Rights and Interests of Customers

10 Anti-Corruption and Anti-Bribery

11 Adherence to Drug Ethics

Experts from CR Sanjiu's Finance Department assessed the financial impact of the issues based on the two dimensions of "continuity 12 Assist in Rural Revitalization

of access to resources" and "dependence on relationships". 13 Improve Environmental Management System/Environmental Compliance Management

14 Addressing to Climate Change

15 Waste/Emissions Management

* Identification of the continuity of access to resources. Considering the internal and external environments of the Company More Improtant 16 Saving Energy Consumption

analyze whether the Company can sustainably secure relevant capital resources in the short medium and long term taking into 17 Intellectual Property Protection

account the impact of various ESG material issues. 18 Strengthen Sustainable Development System

19 Optimize Resource Utilization

* Analysis of the dependence on relationships. Analyze whether the Company can sustain positive relationships if it fails to adopt 20 Advocate Scientific and Rational Drug Use

best practices for each material ESG issue. 21 Advocate Responsible Marketing and Consumption

22 Protect Employee Rights and Interests

23 Promote career development

* Finance materiality Analysis. Considering the market price of resources trend forecasts the Company's costs in previous years 24 Protect the Rights and Interests of Small and Medium-sized Investors

and non-concessionary revenue factors we assessed the impact on profits. The Finance Department experts Sustainability General Important 25 Promote Cooperation and Exchange

Working Group management and Board of Directors at CR Sanjiu among others successively reviewed and ultimately confirmed 26 Promote Industry Development

the agreement. We identified a total of 28 materiality issues of which 9 issues have a high level of double materiality. 27 Promote Supply Chain Responsibility

28 Biodiversity Conservation

Importance to stakeholders2024 Sustainability and ESG Report 23

Innovation-Driven

Pioneering New Fron-

tiers with Technological

Breakthroughs

Governance

CR Sanjiu places consumer needs at its core leveraging the

outstanding pilot enterprises for Exemplary Scientific Reform Actions"

as an opportunity and focusing on intelligent manufacturing as a

key driver. The Company has established a "pyramid" innovation

system strengthening innovation R&D and the development of digital

platforms for intelligent manufacturing. It continues to increase

investment in innovation enhances industry-university-research

collaboration and cultivates a team of scientific and technological

talents. By building benchmark intelligent manufacturing factories

and deeply integrating automation with informatization the Company

accelerates the implementation and transformation of scientific and

technological achievements. This drives the digital transformation

of its production operations enhancing production management

capabilities and operational efficiency.Strategy

CR Sanjiu fully recognizes the impact of risks and opportunities related

to talent key technologies and digital and intelligent transformation

on business operations. The Company anticipates potential future

financial implications and proactively develops risk control and

opportunity response strategies. These include improving the

scientific and technological innovation system building digital and

intelligent innovation platforms strengthening breakthroughs in key

core technologies and recruiting talents specialized in emerging

technologies. The Company strives to achieve integration co-creation

joint development and shared benefits.SDGs24 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 25

Risk and Opportunity Management Focus on Innovation and Stable Development

Risk/Opportunity Potential Impact Response Strategy

CR Sanjiu leads high-quality development through innovation accelerates the implementation of innovation-driven strategies building

Seize the opportunity of the science and technology upon its previously established innovation strategy continues to "To Do Docus Build Capacity" capabilities focusing on the Company's core

reform demonstration project to accelerate innovation and strategy and consistently increasing investment in innovation to cultivate and develop new forms of productivity.transformation build an innovative talent management

The biopharmaceutical industry has a robust demand for system introduce artificial intelligence big data and

professional talents particularly highly skilled talents in other emerging technologies to improve the efficiency

areas such as research and development clinical trials and and accuracy of research and development. Through

Talents and Key production management. However the global supply of such cooperation with international and domestic advanced

Technologies talents is limited and the accelerating talent mobility has enterprises and scientific research organizations acquire Improvement of Science Technology and Innovation Management

resulted in intense competition for talents and the loss of core cutting-edge technologies and resources and cultivate and

personnel among enterprises. This affects the continuity of R&D introduce scientific and technological innovation talents. We strictly abide by the Drug Administration Law of the People's type innovation system adhere to the "1+7+N" science and

projects and the long-term development of companies. At the same time we strengthen the internal training Republic of China the Pharmacopoeia of the People's Republic technology innovation management system centered on

system for enterprise talents improve the professional

skills of employees and provide them with good career of China the Statute of the Science and Technology Innovation "Grasping Project Strengthening Management Reviewing

development paths Committee the Measures for the Management of Scientific Motivating and Promoting Transformation" improve the "6E"

and Technological Innovation Projects and other national laws closed-loop management promote the exploration of new modes

and regulations and the relevant systems of the Company and of innovation and development and form the protection of

Digital and intelligent technologies complement each other It is necessary to formulate a long-term digital and other national laws and regulations and the relevant systems innovation by multiple parties.in the development of biopharmaceutical enterprises. The intelligent transformation strategy based on technological of the Company and continue to optimize the "Pyramid"-

application of digital and intelligent technologies in the development and market trends lay out emerging

Digital and production process can realize the automation and fine technology fields optimize the mechanism of scientific

Intelligent management of the production process by improving the research and production management work strengthen

Transformation efficiency of research and development optimizing the the application of new technologies and new scenarios

production process enhancing the supply chain management enhance the digital coverage of key business segments Pyramid Innovation System Positioning

enterprises can better respond to market competition and cultivate cross-disciplinary and compooperational site

regulatory requirements talents and accelerate the construction of digital and informatization systems and platforms.A Highland for Innovative Technologies

Innovation

Center Leveraging the Influence of Sanjiu's Innovation

Targets

Innovation An Open Innovation Organization

Organization Extensively Connecting with External Resources

Type Medium and Long-term goals Progress towards 2024 Targets

The Vanguard of Innovation

Research Institutes + Laboratories

Comprehensively promote the construction of R&D and innovation and rank among the top three in the "China Breaking through Key Focus Areas.Efforts will be made to Traditional Chinese Medicine R&D Strength Ranking" in 2024. The specific achievements are as follows:

c r e a t e a n i n n o v a t i o n

highland strengthen the C onstruction of innovation platforms and organization system: 12 national research platforms have been

successfully built and a perfect innovation organization system has been established which provides strong The Foundation of Innovation construction of innovation Innovation Management System Ensuring Its Sustainability.p l a t f o r m s a n d b u i l d support for technology research and develotpment achievement transformation and efficient allocation of

national research platforms resources.and provincial research O ptimization of system and mechanism: more than 60 innovation systems and mechanisms have been Guidance for the Implementation of

platforms. Strengthening formulated and implemented to further optimize the innovation environment and stimulate innovation vitality. Cross-Strategic Cycle R&D Planning Innovation Strategies.Innovative co o p e rat i o n b e t w e e n industry academia and Construction of R&D talent team: the scale of R&D personnel continues to expand and by 2024 the total number R&D research continuously of R&D personnel reached 876 accounting for 4.37% of the total number of employees.expand the circle of friends Invention patents and transformation of achievements: 201 new patent applications and 148 new patents were

and innovative cooperation authorized in 2024 with the total number of valid patents held amounting to 1423 of which the total number of

models and continue to invention patents applied to the main business amounted to 617 At the pinnacle of the pyramid the focus is on leveraging key traditional Chinese medicine and aging population" and forming

i m p ro v e i n d e p e n d e n t National awards: It has won national awards for 9 times among which the project of the Construction and

innovation capacity through technology platforms to strengthen the construction of scientific and an innovation "Horse Racing" mechanism to advance breakthroughs Demonstration Application of the Theory and Technical System of Ecological Cultivation of Chinese Medicinal

the construction of joint technological innovation platforms drive the output of innovative in scientific and technological innovation projects. The foundation Materials has won the Second Prize of National Scientific and Technological Progress in 2024.laboratories technology achievements and amplify the influence of innovation. The body of the pyramid is supported by an innovation management system

platforms etc. R&D progress: the number of projects under research and development exceeds 100 covering the fields of of the pyramid establishes an open innovation organization and an and innovation planning ensuring the continuous upgrading

cardiovascular system anti-tumor digestive tract and metabolism central nervous system etc. innovation vanguard team based on the "CD + BD + R&D" model of innovation management and the sustained improvement of

seizing policy opportunities such as "Healthy China innovation innovation quality and efficiency.26 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 27

Construction of scientific and technological innovation Accelerate the transformation of innovation results

platforms Continuously increase the investment in R&D resources and continuously explore the optimization of formulas process innovation etc. Build

We cooperate with internal and external organizations to build up a complete R&D system to stimulate the momentum of scientific and technological innovation and promote the breakthrough of key

national key laboratories adheres to the orientation of national core technologies ensuring the output of high-quality innovation results. Participation in the project of the Construction and Demonstration

strategic needs aims at efficient output of modern Chinese Application of Ecological Planting Theory and Technical System for Chinese Medicinal Materials resulted in winning the Second Prize of the

medicine products with remarkable advantages in clinical Project

Initiation Execution National Science and Technology Progress Award". The two projects of the Creation and Application of the System for Regulating the Liver efficacy and safeguarding people's health focuses on important and the Spleen in Treating Functional Gastrointestinal Diseases and the Construction and Application of the System for Identifying and

breakthroughs in the creation of modern Chinese medicines with Treating the Pathogenesis of TCM Tumors and Cancerous Toxins we involved were awarded the first prize of the Science and Technology

classical prescriptions and provides a technological innovation Award of the Chinese Society of Traditional Chinese Medicine. Participation in the project of the Application of Quality Technology for

platform to support high-quality development. Standardization and Digital Production of Ginseng and Pineapple Injection won the Second Prize of Quality Technology of China Quality

Closed-Loop

C R Sanjiu in collaboration with its business units Kunming Association. The patent achievement of the A Kind of Traditional Chinese Medicine for Treating Gas Stagnation and Stomach Pain and its Management

Pharmaceutical Group CR Shenghuo and Kunming Modern Audit Evaluation Preparation Method we declared was awarded the China Patent Excellence Award.System for

Chinese Medicine established Yunnan Panax Notoginseng R&D Projects

Research Institute Co. Ltd. Additionally it formed the Yunnan

Panax Notoginseng Industry Innovation Consortium with 36

units including higher education institutions scientific research

institutes and upstream and downstream enterprises. Taking the

Yunnan Panax Notoginseng Industry Innovation Consortium as a Review Incenti- Won the Second Prize of National Science and and PK vization

platform the Company submitted 6 research projects related to Technology Progress Award

the Panax Notoginseng industry to the Yunnan Provincial Science

and Technology Department for consideration.Won the Second Prize of Quality Technology of

A onuo Pharmaceuticals established a municipal R&D platform S anjiu Modern Chinese Medicine established a provincial-level China Quality Association

Baoding Industrial Design Center and a municipal R&D platform R&D platform Guangdong Provincial Engineering and Technology

Baoding National Hi-Tech Zone Vitamins and Minerals Drug Research Center for Quality Control and Industrialization of the

Preparation Technology Innovation Center. Whole Industry Chain of Chinese Medicine Formula Granules.C R Shunfeng established a provincial-level R&D platform the J ointly registered Shenzhen Biomedical Industry Alliance with

Guangdong Provincial Dermatology Medical Engineering and Shenzhen Xinlitai Pharmaceutical Healthyuan Pharmaceutical

Technology Research Center. and many other organizations. Improve the industrial design work system

Introduced AI tools to solve specific business scenario design needs and the application case was certified by the Ministry of Industry and

Information Technology as an innovative scenario case of "AI-enabled creative design in the field of pharmaceuticals" and shortlisted in the

"2024 AI+ Annual List" under the guidance of Cultural Development Center of MIIT. Finalist of Shenzhen Municipal Bureau of Science and

Cultivate innovative R&D talents Technology's Shenzhen AI Influencing Labor Market Best Practice Case Collection. 2024 design achievements won a total of 15 awards and a

Strengthen the recruitment and cultivation of high-tech innovative talents in R&D and intelligent manufacturing strengthen the construction total of 74 domestic and international top design awards. Applied for 5 utility model patents and published 2 design theses in the core journal

and management of talent pool fully stimulate the endogenous power of scientific and technological innovation through "building a good Packaging Engineering in 2024.platform + building a good mechanism + using talents" promote the construction of scientific and technological talents focus on cutting-

edge medical problems and dedicate to the research and development of groundbreaking therapeutic programs and medicines.In 2024 Five Utility Model Patents Were Applied For

Enrichment of Scientific and Technological Innovations

We continue to implement the capacity building for "Innovation and R&D" gain insights into the trend-driven opportunities of consumption Shanhuang Hongguo Brick Tea Duide Tea Steeped Tea Foldable Medicine

upgrading conduct in-depth research on consumer demands in terms of product functions and usage scenarios enhance independent Ointment Bottle

innovation capabilities accelerate the transformation of innovation results drive the initiation of new product development projects and

achieve breakthroughs in new product approvals advance the industrialization of the enterprise's scientific research results and continue to Two Design Papers Published in Core Journals (Packaging Engineering)

enhance the competitiveness of the enterprise's products.Empathic Thinking in New Retail Service Design for Elderly Recreation Products

AI Empowers Creative

Design Strategies for Ideal Types and Indications of Pharmaceutical Packaging Design in Medicine28 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 29

R&D Innovations Achieved by 2024 2024 Progress of Key Projects in Generic Drug Consistency Evaluation

In the field of self-diagnosis and treatment grasping the In the field of prescription drugs the Company focuses on

Classical Prescriptions Field development opportunity of the reform of China's OTC registration the key strategic pipeline laying out in the therapeutic areas

and management system and oriented by consumers' demand of gastrointestinal orthopedics oncology cardio-cerebral

focusing on the core of the pipeline of therapeutic areas of respiratory and so on. Through product introduction cooperative

3 classical prescriptions have been approved the number of approved prescriptions is the first in the industry; 3 prescriptions are in cold & flu gastrointestinal and skin diseases we strengthened development and self-development we will continue to increase

the filing stage the number of accepted prescriptions is leading in the industry. Among them "Wenjing Tang Granules" was the first our position in the CHC market by focusing on advantageous the introduction and development of innovative varieties

one in China and the first one in Guangdong Province to obtain the registration certificate of Class 3.1 (in MAH form) and passed the categories. We focused on the advantageous categories and gradually converge with the CHC pipeline and realize the

negotiation of the National Medical Insurance Catalog in 2024 becoming the first gynecological classic formula to pass the national enriched the self-diagnosis and treatment product line to synergistic and orderly development of dual terminal.negotiation. consolidate our position in the CHC market.Obtained approvals for generic drugs Submitted registration declaration

Respiratory Field

Terbinafine Hydrochloride Spray Sodium Hyaluronate Eye Loxoprofen Gel Patch Metronidazole Gel Cefpirome Cliborol

Drops Glucosamine Sulfate Capsules Oseltamivir Phosphate Ointment Adapalene Gel Vancomycin Hydrochloride for

Continue to enrich the product line in the respiratory field achieving basic coverage of the Company's products in the cold and Dry Suspension Cefoperazone Sulbactam Sodium for Injection Mupirocin Ointment Desloratadine Oral Solution

flu category. One new product has been approved. The "Oseltamivir Phosphate Dry Suspension" developed by our Company can Injection Ceftazidime Avibactam Sodium for Injection to enhance the efficiency of the generic drug declaration and

meet the clinical medication needs of infants and children who require precise dosing based on their body weight providing a more enriching the products of dermatology ophthalmology the output of innovative products is gradually formed into an

convenient option for those with dysphagia. orthopedics respiratory and anti-infective fields and echelon expanding the core pipeline of products.enhancing the ability of R&D and innovation.Dermatological Field

We have obtained approval for one new product "Terbinafine Hydrochloride Spray" making it the second product in China to pass Protection of Intellectual Property Rights

the consistency evaluation further enriching the Company's product pipeline in the field of skin diseases.We strictly abide by the Trademark Law of the People's Republic Intellectual Property Rights and Counterfeiting Mechanisms and

of China the Measures for the Administration of Intellectual other special work systems and construct intellectual property

Property Certification and other relevant laws and regulations management system focusing on trademark rights and covering

and formulate special work systems such as the Brand and multiple dimensions such as patents trade secrets copyrights

Orthopedics Field Authorization Management System of CR Sanjiu the Basic System etc. committing to respect and protect its own intellectual

of Intellectual Property Management of CR Sanjiu the Measures property rights and those of others. In 2024 the Company did not

Approved a new product "Glucosamine Sulfate Capsules" (0.25g - Glucosamine Sulfate or 0.314g - Glucosamine Sulfate Sodium for the Administration of Patents of CR Sanjiu the Measures for experience any major intellectual property infringement that had a

Chloride) will be approved by the State Drug Administration for listing. the Administration of Published Scientific and Technological significant impact on the Company.Papers of CR Sanjiu the Measures for the Administration of

Ophthalmology Field 1

We actively implement intellectual property protection measures establish both online and offline infringement

Build a monitoring systems and strengthen intellectual property management by introducing processes for patent

Approved a new product the design of "Sodium Hyaluronate Eye Drops" was carried out which solved the problems of liquid closed-loop proposal applications and scientific thesis publication approvals within our Company's OA system. We carry out

residue in the opening and burrs and made it easier for patients to use. management various online and offline rights protection activities to uphold the Company's intellectual property rights and

mechanism. form a closed-loop management mechanism for the entire process of intellectual property rights protection

work.Anti-infectives Field 2 Enhance

intellectual Carry out World Intellectual Property Day promotional activities and provide intellectual property rights training

we have been continuously optimizing and expanding our product pipeline developing generics for multiple anti-infective property modules in the 2024 legal training and new employee training to enhance employees' awareness of intellectual

products. In 2024 2 new products were approved in this field: Cefoperazone Sodium and Sulbactam Sodium for Injection as well as awareness. property rights and ensure effective protection of intellectual property rights.Ceftazidime and Avibactam Sodium for Injection. Both are compound preparations consisting of third-generation cephalosporins

combined with β-lactamase inhibitors designed to address the increasingly prominent challenge of drug resistance.30 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 31

Deepening Transformation for Sustainable

Development Explore Digital Empowerment

Promote the digitization of laboratories. Building intelligent digital laboratories for R&D and production and empower the laboratory's

Comprehensively implement the new development concept accelerate digital transformation strengthen the application scenarios of new daily business processing capability through an information technology system.technologies and new scenarios and enhance the digital coverage of key business processes. With intelligent manufacturing as the focus of

promotion the Company adopts the approach of "Process First → Equipment Automation Upgrade → Information System Integration" to realize

the digital transformation of the Company's production business through the in-depth integration of automation and information to build

intelligent manufacturing benchmark factories and to promote the construction of business ecology and transformation and upgrading. Development and Manufacture of Automated Inspection Instruments

Develop 4 automated equipment and 1 set of centralized control system for automation of pre-processing of manufacturing automation

Accelerated Digital Transformation of pre-processing of pesticide residue automation of weighing and automation of high-temperature inspection. Carrying out technical

seminars completing the hardware design and optimization of the system tackling technical problems and realizing the automated

We adhere to the strategy of "Digital Sanjiu" actively implement the development of digital transformation take the initiative to explore new operation of the test methods for Cold and Flu Granules and related raw and auxiliary materials of medicinal herbs.scenarios and modes of application of new technologies in the pharmaceutical field promote the construction of industrial digital ecology

and implement a series of initiatives to realize the construction of ecology and transformation and upgrading.Construction of Intelligent Sampling Management System

Promote Digitization

Through the intelligent sample management system we carry out the operations of sample warehousing retrieval and inventorying

realize the automatic shelving and retrieval as well as information management of laboratory samples and improve the efficiency of the QC

Cultivate a digital laboratory.technology Set up a digital technology studio based on the functions of conducting digital technology seminars training

team. digital talents testing digital technology applications and incubating small-scale digital projects. In 2024 we will

build the "Digital Technology Studio" to conduct training sessions and technical seminars on digital technology Construction of Intelligent Resource Management System

addressing five key technical challenges including industrial ring network storms and automatic liquid loading.We implement unmanned warehouse management for reagents and test drugs toxic and explosive substances and standard substances

Deepen through the Internet of Things technology RFID electronic sensor alarm and other technologies enhancing the level of laboratory resource

the digital Carry out the construction of treasury platform operational analysis platform budget system and other projects management.transformation to realize the online and automated operation analysis and budgeting of the Company as a whole and 80% of the

of finance. management organizations realize the automatic penetration of the treasury's 2000000+ data improve the standard

processing and real-time sharing of financial data and realize the interconnection of financial system data. Build a quality digitalization system. Establish an information- Build a digital marketing platform. Using emerging technologies

based quality assurance system centered around QMS to realize to promote the construction of online business operation and service

information-based management of change management document system to build an integrated platform system with OMS+ERP+WMS

management measurement management training management as the core to enhance the ability to respond quickly to digital

and supplier management covering all production points where CR business and improve online business efficiency. Opened up online

Sanjiu is the MAH. In terms of quality supervision we have achieved diversified entrances improved the "Big Sanjiu" membership system

the transformation to a digital supervision model in the cream and launched the Tencent Yuanbao APP and 999 Membership Center

production workshop establishing digital supervision standards and mini program in "Uncel San Health Butler" simultaneously to enhance

an atlas of production process parameters to ensure that the entire member services and experience and provide customers with better

production process is stable compliant and controllable. services.Promoting Intelligent Manufacturing

We are committed to becoming the leader of intelligent manufacturing mode standard and technology in the traditional Chinese

medicine industry. Under the overall goal of "the 14th Five-Year Plan" for Intelligent Manufacturing which is "effective operation of the

production and operation brain to achieve synergy of production and operation and optimization of resources" we have clarified the

path of "the 14th Five-Year Plan" for the development of Intelligent Manufacturing. Focusing on key products and production lines the

Company promotes the leap from "manufacturing" to "intelligent manufacturing" in the production of traditional Chinese medicine.32 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 33

Clear Development Path

In the first phase with the theme of "standardization and specification" the main goal is to realize the standardization and digitization of

intelligent manufacturing infrastructure. Based on the new Internet of Things and

Internet technology the Company innovatively

adopts the interconnection architecture of Explore the combination of artificial intelligence

"Cloud+Net+Edge+End" to build an industrial and visual recognition technology applied

Internet of Things platform with pharmaceutical to package size inspection in the laboratory

In the second phase with the theme of "integration and collaboration" the main goal is to realize internal and external collaboration among characteristics realizing the industrial data significantly improving quality inspection

production networks. collection with unified protocol language and efficiency and reducing manual workload.model for grouped multi-factories and has

successfully applied it online in one factory.In the third stage with the theme of "interoperability and promotion" the main goal is to use knowledge or models for business optimization

and by 2025 the smart manufacturing system will initially achieve ecosystem connectivity prediction early warning capabilities etc.Implemented architecture governance facilitated the 'shutdown suspension merging and transformation' of systems upgraded

Digital Intelligence Technology Upgrade and optimized national network services accelerated the IPv6 transformation in line with the '14th Five-Year Plan' achieved cost savings in basic resources while improving service efficiency and quality; and won the first prize in the industry category of the

'Blooming Cup' 5G Application Competition hosted by the ICT Academy.IOT Group Control System Expansion Expansion of Data Acquisition and Monitoring Systems

Using AI+IoT technology the Company has built a "one- Promoted the digital upgrading and transformation of Honor

screen view" public and auxiliary group control system which old equipment realized the full coverage of the number

deepens the intelligent control scenes of the air pressure sets of production workshops and three-dimensional

system and expands the intelligent control scenes of the air warehouses in the ACDE zone and the networking rate of C R JiuXin Passed Level 3 S henyang Sanjiu passed CR Sanjiu was awarded

conditioning system realizes the centralized remote control key equipment in the Guanlan base was increased to 92.2% Assessment of Intelligent the assessment of E-works China

of the air pressure system and the air conditioning system with a total of 7099 data points collected. Gradually form Manufacturing Capability two-chemical fusion Outstanding Green

and realizes the precise supply of energy energy saving and data assets provide real-time data for MES system batch Maturity management system Intelligent Factory

consumption reduction and the energy-saving rate driven by records support the analysis of quality process equipment

AI reaches more than 15%.The project has obtained 2 software operation and other process parameters and provide data

copyrights participated in drafting 1 group standard and won support for workshop lean management process parameter C R Sanjiu (Chenzhou) was assessed as Hunan Province C R Sanjiu (Zaozhuang) was awarded the second batch

the Green Development Enterprise Award 2024 of "Dingge optimization deviation investigation and so on. Intelligent Manufacturing Benchmark Enterprise Hunan of DCMM standardization pilot enterprises in Shandong

Award" by Caijing Magazine. Province Green Factory Hunan Province Manufacturing Province in 2024 and the "Morning Star Factory" of

Digital Transformation Benchmark Project digital economy.Enabling Business Development C R Benxi Third Pharm C R Sanjiu was awarded The "IOT AI Cloud Intelligent Control"

Selected as Liaoning as a model enterprise for project was honored with the Harvard

Focusing on key products key production lines and core units empowers the business through intelligent manufacturing. At Province Intelligent digital transformation in Business Review's Green Development

CR Sanjiu carries out intelligent manufacturing innovation the level of business management we will continue to promote Factory 2024 Huaibei City. Enterprise of the Year Award.projects at the level of technological innovation to create a new the pilot and promotion construction of business digitalization

scenario of "new technology + pharmaceuticals"; at the level of system; at the level of production units we will build intelligent

business management it continues to push forward the pilot and manufacturing benchmark factories and production lines; and C R Sanjiu (Nanchang) successfully passed T he case of "Intelligent Upgrading of CR Sanjiu's Logistics Decision-

promotion of the construction of business digitalization systems; we will improve quality increase efficiency and reduce costs the evaluation and acceptance of 5G+ making System" was honored as one of the Top 10 Pharmaceutical

at the level of production units it creates intelligent manufacturing and continue to empower our business through intelligent Smart Factory by Nanchang Bureau of Supply Chain Technological Innovation Application Cases by China

benchmark factories and production lines; improves quality manufacturing. Industry and Information Technology. Pharmaceutical Business Association.increases efficiency and reduces costs and continuously34 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 35

Focus on Ethics of Science and Technology

Case Self-developed MES System Put into Operation

We continue to evolve and keep pace with domestic and international clinical trials for new drug discovery and development and emphasize

In 2024 CR Sanjiu autonomous MES system completed IO OQ and PQ validation in Guanlan base and CR Shunfeng. Guanlan pills the protection of subjects' rights and interests during clinical trials. We strictly follow animal ethics policies and animal protection related

(Zhengtian Pills: 1 variety and 2 specifications) capsules (Cold & Flu Ling Capsules: 1 variety and 1 specification) and Shunfeng initiatives and strive to consistently provide high standards of ethical practice and scientific behavior in all trials and promote responsible

healthcare workshop cream (6 varieties and 23 specifications) have entered the system online parallel phase realized 100% EBR research practices and scientific progress.and completed the integration with ERP WMS SCADA IOT system. The system has declared four invention patents (accepted) one

software copyright and the system through the full information technology innovation certification. CR Sanjiu's independent MES

system has been put into use the system is positioned as a safe and controllable streamlined functionality easy to operate rapid

deployment easy to expand the localization of the pharmaceutical MES system. The successful research and development as well Drug Clinical Trial Management

as the deployment of the system marks a new stage for CR Sanjiu's production and management modes and serves as a milestone

in the Company's digital and intelligent transformation and upgrading. All clinical trial projects conducted by CR Sanjiu have purchased drug clinical trial liability insurance for the benefit of the subjects to ensure their

safety and rights. Meanwhile during the screening of subjects the investigators need to obtain informed consent from the subjects fully informing

them of the purpose of the trial the known or possible adverse reactions of the test drug and ensuring their voluntary participation. If an emergency

safety event occurs during the trial the researcher will promptly take therapeutic measures to ensure the subjects' safety.Cultivate professional team

We continue to strengthen the cultivation of the professional team knowledge and skills of professionals through D-plan learning Adherence to the Ethics of Animal Experiments

of intelligent manufacturing play the role of Deep Blue Laboratory in activities professional seminars and conferences and professional

coordinating and promoting the work of intelligent manufacturing course training. CR Sanjiu animal experiments are entrusted to suppliers qualified to conduct animal experiments and the commissioned research units strictly

plan the construction of the Company's unified platform for abide by the Code of Practice for the Quality Management of Pharmaceutical Clinical Trials the Declaration of Helsinki ICH and GCP and

production and manufacturing coordinate the project management In 2024 we carried out 32 intelligent manufacturing projects of other principles of medical ethics and relevant clinical regulations and carry out medical research in accordance with the Regulations on the

of intelligent manufacturing in factories across the country build various types 16 innovation projects and continue to improve the Administration of Laboratory Animals and the Relevant Provisions of the Guiding Opinions on the Kindness of Laboratory Animals to ensure that the

intelligent manufacturing benchmark factories and benchmark coverage of key businesses. scientificity legality and standardization of the research.production lines and build intelligent laboratories. Enhance the

In accordance with the Regulations on the Administration of

Laboratory Animals and other relevant regulations Kunming

Pharmaceutical Group has set up a Laboratory Animal Management

Committee and an Ethical Review Committee which are

responsible for the unified deployment and quality supervision

In 2024 and management of the work on laboratory animals. It strengthens

the continuing education and training of practitioners and makes

we carried out higher requirements for the disposal of experimental waste and

experimental animal carcasses involving environmental safety as well

32 as labor protection and safe operation involving practitioners' own safety. The banner "Follow Animal Ethics Abide by Professional Ethics

Respect Life Standardize Operation Safe Production" is prominently

intelligent manufacturing projects of various types posted on the wall of the Company's building steps which practices

the Company's concept of laboratory animal management.Laboratory Animal Use License

16

innovation projects and continued to improve the

coverage of key businesses.2024 Sustainability and ESG Report 37

Governance with Wisdom

Strengthen Foundations

for the Company

Development

Governance

CR Sanjiu has established a governance structure with clear positioning

well-defined powers and responsibilities and standardized processes.This structure ensures standardized corporate operations through

institutional safeguards ensuring clarity in their respective rights and

responsibilities in accordance with the responsibilities outlined in the

Articles of Association. Within the framework the Board of Directors of

CR Sanjiu has overall responsibility for sustainability and ESG related

matters with the Company's management being responsible for the

leadership and decision-making of the sustainability management

strategy as well as assessing the risks and opportunities associated

with the Company's sustainable development. Additionally CR Sanjiu

has developed a compliance management system with a clearer

division of responsibilities smoother operational mechanisms stronger

compliance awareness and more effective compliance risk prevention

and control. The Company has implemented a standardized and

efficiently operated compliance management system that extends

from both the headquarter level and the business unit level.Strategy

CR Sanjiu thoroughly implements the spirit of President Xi Jinping's

important directives and guidelines on the reform and development

of state-owned enterprises and Party construction. The Company

consistently strengthens the corporate governance foundation

optimizes the corporate governance structure and reinforces the

comprehensive risk and internal control systems. We continuously

standardize the "Three Meetings and One Layer" governance

mechanism enhance the Board of Directors' capabilities and

developed a corporate governance framework with statutory rights

and responsibilities transparency coordinated operation and effective

checks and balances laying a solid foundation for the Company's high-

quality development.SDGs38 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 39

Risk and Opportunity Management Uphold Integrity Operate in a Sound Manner

Risk/Opportunity Potential Impact Response Strategy CR Sanjiu strictly adheres to the requirements of the Company Law of the People's Republic of China the Securities Law of the

People's Republic of China and other relevant laws and regulations. The Company continuously strengthens the corporate governance

Establish a correct concept of market competition mechanism improves the internal control system and compliance operation management system and ensures clean and transparent

It may affect the layout of corporate set up and enhance a sound anti-monopoly and operations. By building and refining a modern enterprise system that embodies both Chinese characteristics and the unique features

compliance building brand image social fair competition compliance management system of CR Sanjiu the Company remains committed to integrity-based governance coordinated operations and transparent management

Market Monopolization and trust and market competitiveness; may improve the internal review mechanism of business driving the Company toward high-quality development through sound and sustainable operations.Fair Competition Risk also have an impact on the ecological practices and standardize business activities.balance of the industry and resource Proactively accept oversight from regulator y

allocation authorities and society to ensure fairness and

impartiality in market behavior. Deepening Corporate Governance

Build and improve a comprehensive compliance We comply with relevant national laws and regulations continuously operational efficiency; effectively safeguarding the legitimate rights

It may expose enterprises to various management system and establish a specialized improve the corporate governance system and enhance the level and interests of all stakeholders and building a good corporate image

Multi-discipline Compliance compliance risks leading to drug quality department coordinate compliance management of scientific decision-making. We help the Board of Directors to laying a solid foundation for the Company's sound and long-term

Risk issues legal disputes financial losses efforts across all business areas. Enhance employees' continuously optimize the operational mechanism and improve development.and reputational harm. compliance awareness and r isk pre vention capabilities fostering a culture of compliance

throughout the Company.Improving Governance Framework

We continuously optimize the Company's corporate governance structure improve governance standards revise the Articles of

Association and enhance the quality and efficiency of the Company's operations. We consistently strengthen the decision-making

Targets system and refine authorization management improve the list of powers and responsibilities clarify the boundaries and decision-

making processes for the "Three Committees and One Layer" and establish a governance structure system with clearly defined roles

and responsibilities comprehensively enhancing the Company's operational efficiency.Type Medium and Long-term Targets Progress towards 2024 Targets

Shareholders and General Meetings

Comprehensively improve the level

of corporate governancesafeguard Achieve total revenues of RMB 27.617 billion. The convening proceduresattendee qualificationsand voting Companies the Articles of Association and other relevant laws

the legitimate rights and interests of processes of all previous general meetings of shareholders were and regulations. The Company provided internet voting for all Corporate Governance No major operational risk events occur throughout in full compliance with the Company Law of the People's Republic matters under consideration at the general meetings to facilitate shareholders and creditorsand deepen of China the Rules for the Shareholders'Meetings of Listed shareholders'exercise of their voting rights.the Company's good image in the capital the year

market.Directors and the Board of Directors

The election and replacement of directors were conducted meetings and general meetings of shareholders fulfilling their

in strict accordance with the procedures stipulated in the law duties as prescribed in the Articles of Association. The specialized

and the Articles of Association . The Directors of the Company committees of the Board of Directors and the Independent

conscientiously and responsibly attended Board of Directors Directors fully utilized their roles to ensure the objectivity.Supervisors and the Supervisory Board

Supervisors were elected and replaced in strict compliance with Directors meetings on-operational site overseeing the decision-

the procedures specified in the law and the Articles of Association. making procedures resolutions and the Company's operations

The Supervisors diligently and conscientiously fulfilled their in accordance with the law. Additionally they supervised the

duties attending general meetings of shareholders with a sense Company's finances and ensured the lawful performance of duties

of responsibility to shareholders. They also attended Board of by the Directors and senior management.40 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 41

Key Performance The Board of Directors fully exercises its role in "Setting Strategies Making Decisions and Optimization of Shareholding Structure Key Performance

Preventing Risks" and has established the Audit Committee the Remuneration and Evaluation

Committee the Strategic Investment Committee the Nomination Committee as well as the In accordance with the requirements of the Company Law of the People's Republic In 2024

A total of 4 independent directors Specialized Meeting of Independent Directors to ensure the effectiveness of governance is of Chinathe Securities Law of the People's Republic of Chinaand other relevant laws

fully leveraged. and regulationswe have established a clearbalancedand reasonable shareholding

structure. The Company possesses independent business operations and self- the Company issued issuance of

accounting for 36.36 % management capabilitiesand is independent from the controlling shareholder in terms 2Annual of businessassetsfinancepersonnel and organization from the actual controller and regular reports and interim

General

Meeting its related parties.. Major decisions of the Company are made by the general meeting

131

A total 2 female directors of shareholders in compliance with the lawand the controlling shareholders exercise announcementsSupervisory their shareholder rights in a standardized mannerwithout engaging in any actions

Board detrimental to the interests of the Company or its shareholders.percentage of female directors on the

Board of Directors is 18.18% Party Committee Board of Directors Information Disclosure and Investor Relations Conducted 5 batches of telecon-

Steer the direction Set strategy make CR Sanjiu strictly adheres to the Measures for the Administration of Information ferences on performance of regular

oversee the overall decisions and

7 Disclosure by Listed Companies the Work Guidelines for the Investor Relations

reportsquarterly reports and material

In 2024 there were numbers of situation and ensure prevent risksimplementation Management of Listed Companies and other relevant regulationscontinuously matters

shareholders' meetings held and performing well in information disclosure. To establish a rigorous and transparent information disclosure process and accountability systemwe have formulated

24 the Investor Relations Management System and the Information Disclosure Affairs numbers of board of meet- Management Team Accepted online and offline research Management Systemaiming to continually improve our disclosures quality. In 2024we and participated in roadshow counter

ings held Plan operation ensure revised the Management System for Insider Information and Knowledgeable Persons

implementation to strengthen the management of insider information and enhance confidentiality roadshow totaling more than 90

Among them 6 and strengthen measures. Throughout 2024there were no incidents of the Company being penalized meetings of the management for violations of information disclosure regulations. times

Audit Committee 7 meetings of Based on continuous legal and compliance-driven statutory information disclosure we

actively explore and develop voluntary and proactive information disclosure tailored

the Remuneration Committee 5 We continuously optimize the structure of the Board of Directors. The Board is characterized by a to investor needs. This approach assists investors in making informed value judgments Responded to more than 150

meetings of the Strategyand Invest- balanced age distribution and diverse professional backgrounds integrating multi-dimensional

and investment decisions while enhancing the depth and breadth of our disclosures. items on the SZSE interactive platform

expertise in finance strategic planning human resources management and science and In response to ESG issues that are of growing concern to investors we address the

ment Committee and 6 meetings technology. By focusing on strengthening specialized committees and strictly regulating the concerns and expectations of various stakeholders through the regular release of

deliberation of proposals these committees provide professional recommendations to support the reports and actives such as the "One Chart to Read and Understand" program. We of the Nomination Committee were

held. Board's decision-making. The Board in turn conducts scientific and rigorous analysis and decision-

have developed a multi-tiered investor relations management system. We hold high

making based on these recommendations ensuring the scientific rigor and efficiency of decisions. quality performance briefing sessions during which the chairman and management

team of the Company engage with investors industry analysts and media reporters.fully communicating with investors about the Company's operating results business

development commitment to high-quality and sustainable development as well

Honors and Awards Board Diversity as future. By adopting a multi-channel multi-angle and multi-level communication

strategy the Company has constructed an efficient communication bridge with

Adhering to the principle of “Optimal Allocation and Diversification” the Company

Awarded the"2024 Best investors to actively conveying the Company's value through diversified channels and focuses on aligning Directors’ expertise with its development strategy. Directors are se-

Practice Cases of Boards forms such as performance teleconferences brokerage strategy meetings investor lected comprehensively considering factors such as gender age group and occupational

of Directors of Listed Com- background. consultation hotlines and the Shenzhen Stock Exchange's interactive e-platform.panies" and "2024 Best

Practice Cases of Board Board Independence

Offices of Listed Com- Honors and AwardsThe Company has established special meetings for Independent Directorsand imple-

panies" by China Listed mented the Working System of Independent Directorsand revised the rules of procedure

Companies Association. for specialized committees. O btained the highest grade of "A" from SZSE for 10 consecutive years.The performance of independent directors is regularly disclosed through the Annual Per- A warded the "Best Practice of Annual Results Presentation for Listed Companies" by China Association of Listed Companies for

Extended Reading formance Report of Independent Directors. 3 consecutive years.Board Expertise A warded "2023 Best Practices in Investor Relations Management for Listed Companies" by China Association of Listed For more information on the duties Companies in 2024.and members of the Board of Board members possess relevant industry experience and professional knowledge bal-

Directors and the General Meet- C R Sanjiu Sustainable Development and ESG Report was awarded five-star rating by the Chinese Academy of Social Sciences ancing professional leadership innovation drive and risk control enhancing the scientif-

ing of Shareholdersas well as the ic rigor and effectiveness of corporate governance. for 4 consecutive yearsand was awarded "Five-star Good" rating for the first time.specific payment of compensation

to Directors and senior manage- The Company conducts professional training for DirectorsSupervisorsand Senior Execu-

mentplease see the CR Sanjiu 2024 tives to continuously improve their theoretical knowledge and ability to fulfill duties.Annual Report

Specialized Meeting of

Independent Directors

Nomination Committee

Strategic Investment

Committee

Audit Committee

Remuneration and

Evaluation Committee42 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 43

Ensuring Compliance Operation

We actively implement and advanced the requirements of the State-owned Assets Supervision and Administration Commission

Case CR Sanjiu Special Session on "Understanding My Listed Company - Entering the Greater Bay Area" (SASAC)'s "Year of Deepening Compliance Management"launching special initiatives to optimize the compliance management

system. We steadily promote the development of rule-of-law and compliance managementstrengthened the system of governing the

enterprise in accordance with the lawand actively explored the integrated management system encompassing lawcomplianceriskand

In November 2024the series of activities titled "Understanding My Listed Company - Entering the Greater Bay Area" jointly internal control. Additionallywe conduct 100% legal audits of rules and regulationseconomic contractsand important decisions.organized by the CSI Small and Medium Investor Service Center and the Shenzhen Securities Regulatory Bureautook place in

Shenzhen. Representatives from the management of CR Sanjiu participated in the event and engaged in discussions and exchanges Improve the compliance management system. We revised the CR Sanjiu Compliance Management System establishing a

with the shareholder observation groupwhich comprised investorssecurities analystsand financial journalists. On the day of the compliance governance structure with clearly defined powers and responsibilities and synergistic operations. We optimized compliance

eventthe shareholder observation group toured the CR Sanjiu Exhibition Center and the Guanlan Factory to gain a comprehensive management methods for key partners and enhanced the operability and enforceability of system provisions. Furthermore we revised

understanding of the Company's development historyoperationsand corporate culture. During the discussion and exchange the management methods for compliance ambassadors and compliance officers standardized project operations and strengthened

sessionmembers of the group exchanged views on CR Sanjiu's business developmentstrategic planningshareholder returnsand the driving force of the grassroots compliance management organization. A comprehensive legal affairs system has been formed

other pertinent issues. This activity facilitated investors'understanding of CR Sanjiuaiding the Company in enhancing the level of its encompassing the Contract Management System the Basic Management System of Intellectual Property the Legal Risk Management

investor relations management and fostering a favorable capital market ecosystem. System the Legal Dispute Case Management System the Management Measures of Antimonopoly Compliance and the Management

Measures of Conflicts-of-Interest Prevention among others which has laid a solid foundation for the compliance management system.Optimize the compliance management system. The in-depth promotion of five key tasks is underway: evaluating the

effectiveness of the compliance management system enhancing the compliance management organization optimizing the

compliance management framework preventing compliance risks in key areas and strengthening the support and guarantee

for compliance management. These efforts aim to establish a compliance management system characterized by a clearer

division of responsibilities smoother mechanism operation and a heightened awareness of compliance.Strengthening compliance publicity and training. For all employees and those in key positions in important areas we

conduct system publicity system knowledge contests on-duty examinations for compliance ambassadors and other forms of

compliance system and compliance culture promotional activities annually. These efforts aim to create a positive atmosphere

of compliance culture and enhance employees' awareness of red and bottom lines. Additionally the Company organizes a

compliance publicity month for all employees annually and publishes compliance publicity journals every month which are

distributed to all employees through the Company's work platform.Safeguard an Environment of Integrity

We strictly comply with the Anti-Monopoly Law of the People's We routinely conduct business ethics and anti-corruption audits

Republic of China the Anti-Money Laundering Law of the across all of the Company's subsidiaries to assess compliance

People's Republic of China and other relevant laws and with the Code of Business Ethics and anti-corruption policies.regulations. We adhere to the CR Sanjiu Code of Business Based on the audit findings we recommend corrective

Conduct and continue to implement the CR Sanjiu Integrity actions to address any identified issues ensuring the effective

Provisions the CR Sanjiu Five Commandments for Compliance implementation of business ethics principles including anti-

and other systems with detailed requirements for anti-bribery corruption and anti-bribery measures.anti-corruption and clean practices. We continuously improve

"Understanding My Listed Company - Entering the Greater Bay Area" Activity the CR Sanjiu Provisional Measures for the Management of In 2024 we conducted a series of business ethics and anti-

Conflicts of Interest CR Sanjiu Measures for the Management corruption training sessions and awareness initiatives for our

of Connected Transactions CR Sanjiu Measures for the Board of Directors Supervisory Board all employees (including

Management of Anti-Money Laundering and other systems interns part-time staff and contractors) as well as suppliers.to prevent incidents such as embezzlement fraud money Through activities such as Compliance Awareness Month

laundering monopolistic practices and unfair competition. In promotional magazines posts on our official account and

Optimization of Operations Management 2024 there were no major incidents of corruption involving the specialized offline training programs we fostered a clean and

Company or its employees. sustainable business environment.In 2024 the Company continued to deepen its "four reinventions" total revenues of RMB 27.617billion an increase of 11.63% compared to We require all stakeholders including employees part- We establish and improve the whistle-blower protection

consolidating its foundation and industry strengthening R&D and the same period in the previous year. The net cash flow from operating time staff and contractors suppliers service providers and system opening up reporting and complaint channels while

innovation promoting mergers and acquisitions and reorganization activities reached RMB 4.402 billion up 5.02% year-on-year. The net customer to strictly adhere to the Code of Business Conduct simultaneously ensuring that the rights and interests of whistle-

steadily advancing integration and building competitive advantages profit attributable to shareholders of listed companies amounted to RMB and integrity Systems. To further strengthen our anti-corruption blowers are effectively protected from infringement. We utilize

across the entire industry chain. These efforts led to both qualitative and 3.368 billion reflecting an 18.05% increase over the same period last management efforts for all entities engaging with the Group a combination of "online + offline" and "internal + external"

quantitative growth steadily improving the company's performance and year. Additionally the net profit attributable to shareholders of the listed we comply with and implement the CR Sanjiu Supplier Code reporting channels enabling stakeholders to submit reports

capabilities and enabling the early achievement of the goals set in the company excluding extraordinary gains and losses was RMB 3.118billion of Conduct which mandates that suppliers and other business anonymously through various avenues. The email address

"14th Five-Year Plan." During the reporting period the Company achieved representing a year-on-year increase of 15.01%. partners commit to adhering to clean business practices and CR999-SJB-TS@999.com.cn is publicly accessible and the

regularly evaluate their business ethics performance. reporting platform "99 'Rules' 1" and WeChat official account

"Clean 999" both offer for anonymous reporting. We strictly

enforce the discipline surrounding the reporting process.44 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 45

Enhance Risk Prevention

We explore the in-depth integration of risk and internal control with law and complianceinsisting on risk governance as the focus

Conduct Centralized Rectification and risk prevention as the key. We lay a solid foundation for system management in the areas of strategic riskoperational riskmarket

riskfinancial riskand compliance riskand continuously improve and refine the construction of our risk and compliance system. We

Continuously conduct centralized rectification of corruption in the medical fieldwith a focus on violations of the spirit of the Eight regularly conduct major risk assessment workas well as classificationmonitoringand reporting of operational risksto ensure the

Rules (on improving Party and government conduct)maintaining high-pressure deterrence to create a strong deterrent effect. Company's stable and sound operation. In 2024the Company did not experience any significant operational risk events.Carry out special rectification efforts targeting corruption issues in infrastructure projectsbidding and procurementwhile also

strengthen supervision of commercial sales and correcting unethical practices in medical purchasing and marketing. The Board of Directors of CR Sanjiuas the highest decision-making body for the management of the Company's risk control systemis

responsible for promoting and guiding the establishment and effective implementation of the risk control system.Enhance Anti-corruption Awareness

Convening a conference on Party conduct and integrity buildingas well as two warning education sessionsto fulfill the "two

responsibilities" of comprehensively strengthening Party discipline. We have established the Law and Risk Control The Legal Compliance Department of the Company is

Compliance Committee as the leading body for internal responsible for overall planning coordinating organizing

Conduct thematic integrity talks and launching a special class on "Strictly Abiding by the Bottom Line and Integrity in Prctice" at

the training camp for new recruitsguiding management and employees to firmly embrace the correct concept that "compliance control and risk management with the Chairman of CR and promoting the implementation of various specific

safeguards development and integrity creates value." Sanjiu serving as its director. The Committee's primary tasks. The Audit Department is responsible for the internal

responsibilities include promoting the establishment audit supervision and evaluation of the risk control

Strengthen the development of new media platforms such as the "Clean 999" WeChat official account and RunYue account and has and oversight of CR Sanjiu's internal control system and system of each subsidiary

published 158 articles throughout the year on publicity and education to enhance ideal and belief education and warning education. driving continuous improvements in the system.Manage Conflicts of Interest

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

Propagate and implement the CR Sanjiu Management Regulations for the Management of Conflicts of Interest and establish a controlling major risks and efficiently advance the risk assessment process. We conduct key inspections on

joint team for conflict of interest prevention. the sales operations of each division focusing on regulatory hotspots and addressing employee conflicts

of interest procurement bid-rigging risks and other critical areas. We regularly perform internal control

Conduct centralized reporting on conflict-of-interest prevention for important personnel and special campaigns to identify and

address conflict of interest issues in the marketing field effectively identifying and resolving potential risks. Risk inspections or special audits of major risks with a particular focus on the management of production

assessment units' self-owned business procurement norms and production operations effectively enhancing our risk

Continuously carry out supervision work to ensure fairness and transparency in the selection and appointment of cadres as well response capabilities. We regularly carry out risk identification and assessment to ensure timely detection and screening

as compliance in their daily behavior. of potential issues and prompt implementation of control measures. In 2024 we developed an annual list of

the Company's significant risks in strict accordance with the process of information collection identification

assessment and response and formulated risk response plans based on the assessment results. Additionally

we regularly conduct internal control inspections or special audits of our major risk management processes to

Key Performance ensure the effective operation of our risk management processes.I n accordance with the Basic Standards Internal Control of Enterprises and its supporting regulationswe

continuously update and refine the internal control system to create a scientifically designedconciseand

Strengthening operating effectively internal control framework. We conduct regular annual projects on internal control concluded litigation case of lawsuit involving embezzlementbriberyexto Conducted corporate warning

corruption rtionfraudand laundering of illicit funds education conferences internal control

assessmentsystem reviewand optimization to ensure the effectiveness of the design and implementation

of the internal control systemachieving improvements in system completenessstandardized

construction establishmentprocess optimizationand full implementation. We have established the Internal

1 1 2 Control Compliance Platform (ICCP SYSTEM) to gradually solidify internal control workflows and tool templatesenhancing the quality and efficiency of internal control evaluation.

W e formulated a system for applying audit results and managing internal audit institutions and

52872 Conducted corporate warning Strengthening personnelestablished standardized institutional processesand continued to enhance the application of audit employee persons/times 160500 education conferences with audit results. The audit management system was introduced for the first timeeffectively elevating the level of audit

hours of hours of employee supervision informatization. We implemented quality control throughout all stages of audit execution to mitigate risks

in anti-corruption training anti-corruption training 47000 across all aspects. persons/times

achieving a To prevent and control capital riskswe have established a comprehensive capital management

with an average of systemincluding measures such as regular rotation of capital operation positionsseparation of incompatible

100 Specialized risk capital dutiesconducting irregular special inspections of capital risks and capital inventory checksand capital % 8.01 prevention and affairs inventory to mitigate capital management risks. To prevent anti-monopoly and anti-unfair competition hours/person control riskswe continuously improve the risk prevention mechanisms by continuously monitoring legal risks in

training coverage rate. related fields and carrying out the construction of an anti-monopoly compliance system and conducting

special inspections.46 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 47

Craftsmanship and Responsible Operation Honors and Awards Creating a Brand of Responsibility

CR Sanjiu was recognized We adhere to the principle of putting consumers at the core continuously strengthening

With the goal of "Becoming a Leader in the Mass Medicine and Health Industry" CR Sanjiu continues to deepen the construction of as "Best Practice Case brand and social responsibility construction and enhancing brand value and influence. The

corporate culture and actively promotes the dissemination of responsible branding. Internally through a series of initiatives the of Culture Construction Company thoroughly studies and implements President Xi Jinping's important instructions

Company continuously enhances employees' pride sense of belonging and sense of identity ensuring that every employee genuinely for Listed Companies in on accelerating the construction of world-class enterprises and the "Three Transformations"

feels the care of the enterprise and recognizes their own value. Externally through practical actions and communication strategies CR 2024" by China Listed fully implements the deployment requirements of the SASAC (State-owned Assets Supervision

Sanjiu highlights its brand concept and value proposition demonstrating its commitment to responsibility and brand charisma to all Companies Associa- and Administration Commission of the State Council) and the China Resources Group

sectors of society. tion"Top 100 Employ- on the "Brand Leadership" action and centered on the Company's "1+N" brand strategy.ee Culture Brands" We continuously improve the brand management system establish a brand leadership

by China Enterprise working group increase investment in brand building optimize systems and processes and

Corporate Culture Culture Summit"Top 10 enhance the public opinion management system. Based on in-depth consumer insights we

Demonstration Units" by continuously optimize category planning innovate consumer communication methods and

Guangdong Enterprise expand brand communication channels. By providing high-quality products and services We continuously strengthen the construction of corporate culture implement high-quality cultural programs in a subtle and influential

Culture Constructionand along with the emotional connection of "Warmth and Care" we have earned the trust and manner integrate the cultural slogan of "Care-Responsibility-Excellence" into the Company's production operations and business praise of consumers achieving sustained growth in brand influence.development processes. Showcasing the Company's comprehensive soft power. We have carried out in-depth corporate culture "Best Practice Unit"

initiatives spreading the culture of CR and CR Sanjiu to stakeholders fostering internal unity and cohesion and enhancing the external by Guangdong

image of CR Sanjiu. Enterprise Culture

Construction."'Best Responsible Brand Communication

Practice Unit of Enterprise

Propaganda ideological and cultural work. Through key quotes of training on the 'History and Culture of China Resources Culture Construction Focusing on consumers' concerns the Company integrates its brand with concerns and

from Xi Jinping's cultural thoughtweekly highlightsinheriting and CR Sanjiu'for new employeescovering more than 700 in Guangdong conducts brand communication through comprehensive channels such as advertisements

red gene cultureand propaganda for thematic educationwe employeespromoting the comprehensive implementation of Province'among other program sponsorships short videos and multi-platform interactions. This ensures that the

effectively carry out ideological and cultural promotion CR Sanjiu's corporate culture across headquarters and business honors. brand image of "Warmth and Care" continues to resonate with consumers winning their

workcreating a cultural atmosphere of understanding history units. favor.and loving the Party. T he Company continuously strengthens social responsibility efforts across the upstream

Company's annual recognition ceremony. We held the CR midstream and downstream of the supply chain fostering a positive interaction between

Corporate culture publicity work. We timely deliver internal Sanjiu 2023 Annual Recognition Ceremony showcasing the social responsibility and corporate development and building a responsible brand.newscultural responsibility storiesand support high-quality positive and upward spirit of CR Sanjiu employees through

business development through the official web operational honorary recognition fostering a culture of mutual support and

siteofficial social media accountsOA newsRunYueelevator high efficiency among employees and the Company creating an Public Opinion Management System

displaysand other multimedia platforms. atmosphere of learning from the advanced and excellent and

supporting high-quality business development. The Company has established the CR Sanjiu Public Opinion and Crisis Management Committee

Corporate culture promotion season activities. Centered on to ensure orderly public opinion crisis management comprehensively enhancing the ability to

the theme of "Inheriting the Red Gene and Inspiring the Power Construction of the new exhibition center project. We prevent and resolve ideological risks.to Advance"we conducted the 2024 Corporate Culture Publicity completed the construction and opening of the new exhibition T he Company strengthens full-coverage public opinion monitoring effectively managing public

Season activities. We provided training and empowerment to center in the Kechuang Building fully demonstrating the opinion monitoring prevention control and specialized response and disposal to ensure a

more than 70 corporate culture practitioners from headquarters Company's comprehensive strength and brand image to healthy and controllable overall public opinion environment.and business unitsstrengthening organizational cohesion and stakeholders and supporting the Company's high-quality The Company enhances the management of public opinion positions refines the position

centripetal force. Through new employee training camps and development. management system and information release process strictly implements the "Three Reviews

business team culture integration we conducted 15 sessions and Three Proofreading System" and strengthens content management and the main

responsibility of the Company's accounts.The 10th CR Sanjiu Corporate Culture Publicity Season CR Sanjiu was Honored with Economic Observer's "Most Respected Company Award 2023-2024"48 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 49

Case CR Sanjiu Responds to Consumption Upgrading and Continues to Improve Brand Influence Strengthen Party Construction and Compliant

Operation

With the accelerated shift in consumer/patient demand for drugs from traditional channels to online platforms such as

pharmaceutical e-commerce in recent yearsCR Sanjiu's OTC Department has continuously improved its nationwide channel CR Sanjiu continuously strengthens Party construction adheres to the "Two Consistencies" and integrates Party leadership throughout

business system. It has actively explored new marketing models in this evolving environmentengaging in cross-border the entire process of corporate governance. We fully leverage the central role of the Party organization in guiding direction managing

collaborations with major online platforms like JD.com. Simultaneouslyit empowers offline chain terminal customersbuilding a the overall situation and ensuring implementation. The Company continues to promote the integration and mutual reinforcement

new industrial value chain of "Internet + Medicine + Pharmaceuticals"enabling more precise services for patients and enhances of Party building and business operations ensuring the internal unity of its political and economic attributes and safeguarding the

brand communication efficiency. Company's sound and compliant operations.The Company closely monitors changes in the media environment

and consumer behavioreffectively combining the 999 Brand Organized 14 "first issue" studies and established an implementation record for the "First Topic". The Company formulated

with content that resonates with consumers. We continuously Play a Leading a working system and supervision methods for implementing the important instructions and directives of President Xi

innovate brand communication methods to keep the brand Role in Political Jinping and promoted the construction of the traditional Chinese medicine industry chain and the "deepening of the

Construction implementation of the reform of state-owned enterprises" as well as other key work.youthfulfashionableand healthy. For examplethe Company Launched the theme of "Promoting Growth and Winning Strategies" to further enhance the effectiveness of the deep

collaborates with popular dramas such as The Rampage popular integration of Party building and business operations.mobile games like Game for Peaceand platforms such as Douyin

(TikTok) to create trending topics and expand the brand image. Earnestly studied and implemented the spirit of the Third Plenary Session of the 20th CPC Central Committee conducting

Additionally it has introduced a cartoon brand mascot"Uncle "central group studies" "three meetings and one lesson" and "thematic preaching" sessions to further understand and

San" the director of the Warm Heart Cure Instituteto internalize the session's spirit. We deeply studied and understood the spirit effectively translating it into entrepreneurial

comprehensively convey the warmth of the 999 Brand. This practice.Implement

youthful brand marketing strategy enhances the influence of Strengthened theoretical armament and formulated a long-term mechanism to consolidate and expand the results of the Ideological

and Cultural thematic education on learning and implementing President Xi Jinping Thought on Socialism with Chinese Characteristics the 999 brand among young consumersfurther driving brand

Propaganda for a New Era.development and business growth. Continuously improved the Company's corporate culture system incorporating courses with distinctive red cultural

Warming Supplies for Da Ji Da Ling characteristics into the talent training system and employer brand construction through various measures promoting the

thorough implementation and integration of the red gene.Emphasized the major theme promotion to consistently build a robust ideological defense.Built up and strengthened the party's grassroots organizationsadjusting and optimizing the management structure of

the Party organizations within the Company. The Company also directed 25 Party organizations to renew or add to their

membership.Leveraged the pioneering and exemplary leadership of Party membersconducting activities such as the "July 1st" Party

Key Performance Day themed with "Making Contributions Based on Positions" actively guiding Party members and the masses to strive for

excellence in production and operation.Strengthen the Deepened the mechanism of "double cultivation and transportation" conducting training courses such as the "Central

Public opinion information in 2024 is dominated by positive and neutral informationaccounting for about 99.42%. Party Members' Enterprise Cadre Study Class" and "Central Enterprise Party Member Joint Learning Class" to enhance the political quality Organization and comprehensive abilities of Party members and cadres.Deepened the construction of the Party building systemsorting out and improving 20 Party building systemslaying the

institutional foundation for Party building in the new era.Systematically promoted the cultivation and selection of the Company's Party building brandformulating the CR

Sanjiu Party Building Brand Building Work Program (2024-2026) and the CR Sanjiu Party Building Brand Building Work

Guidance Manualas well as other long-term mechanisms for Party building and brand buildingto create attractive and

Honors and Awards representative characteristic brands."999" brand has been recognized as one of the first batch of outstanding achieve- Did a good job in youth guidancelabor unionand women's workdeepening the project of improving the spiritual quality

ments in the "Product Brand" category under the Central Enterprises Brand Lead- Give Full Play to enhancement program of young peopleand promoting the implementation of democratic management of enterprisesthe

ership Initiative. the Advantages development of female workersand the "I do practical things for the masses" initiative.of United Front Leveraged the advantages of the united front holding the "Rallying Hearts and Strengths for DevelopmentStriving

Sanjiu Gastro-Therapeutic brand was recognized as one of the first batch of Forces Unitedly to Write a New Chapter" theme activityestablishing the "CR Sanjiu Think Tank Advice Studio" and setting up the

"Guangdong Traditional Brands". "CR Sanjiu Think Tank Advice Studio." This played a role in pooling wisdom and strengthening ideological and political leadership.CR Sanjiu was listed on the "2024 Cato BrandZ Top 100 Most Valuable Chinese

Brands".Key Performance

The Company has a total of 2820 Party members accounting for 14.08% of the total number of employees.2024 Sustainability and ESG Report 51

Quality Escort

New Quality Productive

Forces Promote

Development

Governance

With the goal of "Building an Efficient and Controllable Group Quality

Control Model" CR Sanjiu has deepened the construction of its quality

management system for the entire life cycle of medicines and built

a leading quality management system in the traditional Chinese

medicine industry. The Board of Directors as the highest organization

for the quality of medicines and accessibility of medicines and

healthcare oversees and promotes the implementation of related work

through the Sustainable Development Working Group and conducts

discussions deliberations and adopts improvement plans programs

and key issues related to quality and accessibility risks. The Company

has developed and implemented a system of quality management

and service management and continues to implement and report on

the progress of drug quality control measures to ensure the quality and

safety of drugs in all aspects.Strategy

During the "14th Five-Year Plan" strategic period CR Sanjiu has

made solid progress on the road of striving to be the head enterprise

of the industry benchmarking against world-class enterprises

improving business layout expanding the core business to the

whole field of self-diagnosis and treatment carrying out product

quality control. With good experience products and quality services

we will satisfy the health needs of every family member from

prevention-health care-treatment-rehabilitation in the whole cycle

and at multiple levels and drive CR Sanjiu to realize innovative

development and high-quality development.SDGs52 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 53

Control the Source of Medicines Safeguard

Risk and Opportunity Management

Health

Risk/Opportunity Potential Impact Response Strategy

CR Sanjiu adheres to the quality philosophy of "Integrity Sincerity and Craftsmanship in Pharmaceutical Manufacturing" and continuously improves its

quality management system. Guided by the principles of "Strengthening the System Controlling Risks and Digitalization" it exercises strict selection of

If the quality control system fails to

accurately cover the entire process of raw Establishment of a full-process quality raw materials standardized operations in the production process and meticulous inspection of finished products. By deepening the quality control of key

material procurement production and management system to realize the whole links and the entire lifecycle of pharmaceuticals CR Sanjiu ensures the safety and quality of its products in an all-round manner thus consolidating a strong

defense for public health.Risk of Inadequate Quality System processing finished product testing and process of controlling and tracing the other processes it will lead to fluctuations quality of medicines and to produce

in the quality of medicines affecting the medicines that insti l l confidence in

brand image of the enterprise and market customers and meet their satisfaction. Enhancing Quality Management

trust.We fully implement the primary responsibility for product of Pharmaceuticals . We ensure product quality throughout the

quality and strictly abide by the laws and regulations such as the production process and take responsibility for the health of our

Law of the People's Republic of China on the Administration of customers. During the report period no major safety and quality

Fluctuating drug prices affect patients' Pharmaceuticals and the Regulations for the Implementation of liability accidents related to products and services occurred.purchasing power; problems such as Formulate reasonable pricing strategies the Law of the People's Republic of China on the Administration

poor supply channels resulting in delays to stabilize drug prices; expand diversified

Risks to Accessibility of Medicines or shortages in drug supply; insufficient sales channels to improve the efficiency of

coverage in remote areas and primary drug distribution; expand market coverage

healthcare markets limit companies' to improve drug accessibility

ability to expand their markets. Quality management assessment and evaluation:

We have established the Quality Policy and Objectives Management System starting from multiple aspects such as quality system

construction digital quality system construction quality culture construction and risk prevention we set and break down objectives annually

Promoting the inheritance and innovation to ensure the implementation of quality responsibilities. We regularly assess the completion of quality objectives by each production unit and

of traditional Chinese medicine has made Focus on opportunities for policy support conduct evaluations at the end of each year to ensure the achievement of quality objectives. By regularly analyzing and evaluating the quality

the development path clearer supporting and integration of high-quality resources information and data of each subordinate enterprise and combining it with the on-operational site quality audit evaluation we supervise the

Policy Support Opportunities t h e d e v e l o p m e n t o f a m o d e r n i ze d strengthen quality management provide quality management work of each unit and continuously evaluate and assess the completion of quality objectives promoting continuous industrial system for traditional Chinese high-quality services and develop new

medicine and seizing opportunities will forms of productivity in traditional Chinese improvement in each subordinate enterprise.help enterprises elevate their status in the medicine.industry.Quality audit and rectification.We have established the CR Sanjiu Quality Audit Management System to continuously promote the improvement of quality management and

prevent quality risks. Each year professional quality auditors are organized to conduct periodic and special on-operational site quality audits

for each subordinate enterprise and to continuously follow up on the rectification of audit deficiencies incorporating the rectification status

into the annual quality management assessment of the enterprise. In 2024 CR Sanjiu has completed quality audits of 25 of its subordinate

Targets production enterprises with a total of 59 internal audits conducted and a 100% completion rate for defect rectification by each enterprise.Type Medium and Long-term Targets Progress towards 2024 Targets Product quality sampling evaluation:

We organize annual sampling and evaluation of products circulating in the market. We conduct regular precautionary testing to evaluate and

Our primar y goal is to provide safe prevent possible quality and safety problems further reducing quality risks. Based on the risk assessment of the products we organized and

healthy and high-quality products. We completed annual internal products in-house sampling testing and evaluation of 16 key products in 2024. Each subordinate enterprise carried

Quality Management rigorously screen product quality at every Maintaining a 100% pass rate of drug out sampling evaluation for 119 listed products totaling 405 times of internal sampling throughout the year and the results of sampling

crucial stage of the supply chain to ensure sampling tests evaluation were all in line with the requirements of quality standards so as to ensure the risks of product quality are controllable.the safety of consumers' medication.Digital quality control.We will substantially improve the customer We have constructed the capability for digital quality management and advanced the construction of quality information systems such as QMS

Client Service service system to enhance consumer Complaint handling rate 100% product and LIMS. We have also established a traceability system for Chinese herbal medicines in production ensuring the traceability of the sources

satisfaction. and service satisfaction 100% destinations and responsibilities of these medicines. This initiative provides a precedent for the innovative application of full-industry-chain

traceability in traditional Chinese medicine.54 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 55

Refining the Quality System

We have been continuously improving the construction of Internal Control and its supplementary guidelines issued

the full life cycle quality management system benchmarking jointly by the Ministry of Finance and four other ministries and Organized and carried out quality-themed skill competitions such as identification of Chinese herbal medicines and "Internal Trainer"

against international common rules and world-class enterprise commissions considering the actual situation of CR Sanjiu. We skill competition to promote further improvement of quality skills.management practices and implementing initiatives such have established the CR Sanjiu Quality Risk Management Rules to

as standardization of quality management risk control and continuously promote the in-depth and orderly progress of quality Organized various subordinate enterprises to carry out a special product quality action learning program called 'Quality

laboratory construction to build an efficient and controllable risk management at CR Sanjiu and further enhance our ability to Excellence' targeting their weak links and improve the quality and safety awareness and ability.group-based quality management system. identify analyze and respond to risks. In 2024 we continued to

use the annual top ten risk management model for quality risk The Group and all subsidiaries carried out quality-related safety training for suppliers every year in conjunction with the results

We have implemented the relevant requirements of the Guidelines management facilitating 24 subordinate production enterprises of supplier audits analyze defects and explain corrective measures article by article and provide systematic training on weak

for Comprehensive Risk Management of Central Enterprises or business units to implement risk control work and ensuring modules to help suppliers make continuous improvements.issued by the State-owned Assets Supervision and Administration controllable quality risks.Commission (SASAC) and the Basic Standards for Enterprise

Key Performance

During Report Period a total of During the Report Period we successfully passed

247136

quality-related standard system operational sites have passed on-operational site supervision and

certifications were obtained. the ISO 9001 certification. inspection visits by drug regulatory

authorities.Promote Quality Culture

We have thoroughly implemented the spirit of the 20th National Council regarding the accelerated construction of a quality-strong GuanLan Base 2024 "Quality Month"

Congress of the Communist Party of China the second and country. We have firmly established the awareness that quality

third plenary sessions of the 20th Central Committee and the comes first in the minds of all employees and earnestly fulfilled

relevant requirements of the Outline of the Construction of a our corporate responsibility for quality. To further strengthen the Key Performance

Quality-Powerful Country issued by the Central Committee of quality risk awareness of all employees during the Reporting

the Communist Party of China and the State Council. We have Period CR Sanjiu has conducted a series of annual quality control

established a quality culture led by leadership and participated trainings and product safety training to ensure all employees have

by all employees continuously promoted the publicity of quality mastered the core skills of quality control to better fulfill the quality Organized

culture carried out various forms of cultural publicity enhanced requirements in their daily work. Combined with the business 100%

the influence permeability and coverage of quality culture characteristics of CR Sanjiu and the current situation of product

improved the quality awareness of all employees promoted the quality management we organized the "Quality Month" activities

participation of all employees in quality management and created in 2024 for all employees and widely carried out activities such coverage of annual product quality system related training for employees 132168 person-times

a good atmosphere for quality culture. We have further elevated as publicity training and education quality competitions quality

our political consciousness adhering to the important discourses and safety inspection quality improvement internal and external

of President Jinping Xi on new quality productivity high-quality exchanges etc. so as further improve the quality awareness and quality trainings with a total

development and food and drug safety as our guiding principles. skills of the whole staff. This helped further improve the quality 100% training duration of

We have earnestly implemented the decisions and plans of the awareness and skills of all staff and continuously elevate the

Central Committee of the Communist Party of China and the State quality level." coverage of suppliers for annual quality system related training 319589 hours56 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 57

Optimizing Services Protecting Health After-sales complaint handling

We have developed the "Customer Complaint Management improving the quality and efficiency of complaint resolution.CR Sanjiu always places customer needs at the forefront continuously dedicating efforts to improving the customer service system. Operating Procedures" to further standardize complaint A dedicated customer service hotline 400-800-0999 has been

From optimizing consultation and response processes to accelerating after-sales response times every detail is meticulously attended management measures covering complaint classification established to ensure complaints are properly addressed while

to ensure the best possible service leading to a steady increase in customer satisfaction. The Company focuses on enhancing the customer complaint reception procedures complaint investigation also meeting customers' product inquiry needs. This is part of

supply and security capabilities of medicines and health services while actively promoting the development of primary healthcare. and handling and response to complaints. This ensures that our ongoing efforts to improve the customer service system and

This allows more people to conveniently access high-quality medical services contributing to the improvement of public health and complaints are handled in a timely and effective manner enhance consumer satisfaction.well-being.Protecting Customer Rights Complaint Complaint Complaint Complaint Complaint

Reception Classification Investigation Resolution Follow-up

We adhere to the Law on Protection of Consumer Rights and fully implement the respect and protection of customers' legal rights. In our daily

operations we prioritize the security of customer information and privacy protection striving to establish a comprehensive defense system. We actively

expand diversified communication channels including customer service hotlines emails text messages and social media platforms ensuring that

every customer's voice is heard in a timely manner. We have established a robust consumer complaint feedback mechanism to ensure that every CR Sanjiu Customer Complaint Response Process

customer request is handled properly. In terms of service we aim to provide a "Five-Heart" level of care—reliable sincere thoughtful attentive and

enthusiastic. We integrate care into every detail of customer interaction. By continuously optimizing service processes and improving service quality we

steadily increase customer satisfaction and inject strong momentum into the ongoing improvement of product quality and service standards.Promoting medication safety Key Performance

Information privacy protection

In accordance with the Cybersecurity Law of the People's Republic of risks and guarantee the effective promotion of information security We further strengthen the management of drug safety signal detection

China the Data Security Law of the People's Republic of China and work. The company gradually strengthens the management of security adverse reaction monitoring label revisions and GAP (Good Agricultural A total of

other relevant laws and industry standards we have developed and incident reporting builds an information security liaison system and Practice) labeling standards. Taking advantage of "International Consumer

implemented policies such as the CR Sanjiu Information Security clearly notifies the relevant departments at all levels to timely dispose of Rights Day (3·15)" we actively engage with communities to conduct 117complaints

Management Measures CR Sanjiu Data Security Management Measures and correct the information security incidents reported by employees medication safety awareness sessions continuously educating more

and CR Sanjiu Data Backup and Disaster Recovery Management at different levels so as to strongly safeguard information security. stakeholders on the importance of drug safety and promoting safer were received regarding products and services

Measures. These measures focus on network security protection We regularly conduct information security knowledge training for medication practices. throughout the year

data backup and disaster recovery management and establishing employees external partners and customers through various channels.an emergency data security response mechanism continuously We strengthen the protection of personal privacy and commercial Improving public health literacy

strengthening information security and confidentiality management. secrets enhance data leak prevention technologies and safeguard core The complaint resolution/handling rate was

We built and continuously improve our information security governance data from unauthorized disclosure providing customers with higher-

structure and establish the Digital Intelligence Leadership Committee quality secure services. In 2024 the Company did not experience any In response to the national initiative that "everyone is the first responsible

as the highest decision-making level of CR Sanjiu's information security data security incidents or customer privacy leaks. person for their own health" we leverage our industry advantages to 100%

management which consists of the chairman of CR Sanjiu as the innovatively create the brand event "Sanjiu Health Day" (March 9th). In

director the CIO as the deputy director and the person in charge of collaboration with partners such as JD Pharmacy Keep Hongshan Forest

Digital Intelligence at the headquarters as the executive secretary to Zoo and chain pharmacies we organize a series of online and offline public Customer service satisfaction reached

continually strengthen the prevention and control of information security welfare health activities. These include science popularization lectures

community health check-ups the "3.9-kilometer Health Walk" and public

welfare advertisements on escalators among other initiatives. Through 100%

these efforts we aim to raise public health awareness promote healthy and

Case Cybersecurity Education of CR Sanjiu civilized lifestyles and actively contribute to the development of China's

health industry.In 2024 the headquarters of CR Sanjiu had coordinated and collaborated with various units to carry out types of cyber

security propaganda and education with a propaganda reach of more than 10000 people and a reach rate of about 70%

which includes:

Network security activities: 2024 National Security Awareness Month Network Security Awareness Week etc.Network security training: Special test for phishing emails new employee training etc.58 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 59

Implementing Responsible Marketing

We always uphold the core principle of putting consumers first actively practicing responsible marketing and promotion. Our focus

is on fully safeguarding customers' right to know about product information ensuring high transparency. At the same time we are Case Compliance as a Guardian Co-Creating a Better Future—The Successful Conclusion of the 2024

committed to innovation exploring and developing new marketing models and continuously expanding diverse marketing channels. Compliance Promotion Series by CR Sanjiu

In 2024 with the deepening implementation of policies in the pharmaceutical industry and the continuous upgrading of

compliance regulations the Company organized a series of trainings on responsible marketing and advertising practices. These

Responsible marketing and compliance promotion. We adhere to expressing advertising content in a truthful legal and healthy initiatives aimed to enhance the awareness of compliance boundaries and red lines among all employees standardize marketing

manner strictly prohibiting false or misleading promotions. We fully comply with regulations such as the Advertising Law of the practices and drive sustainable business development. Additionally the Company conducted in-depth interpretations of newly

People's Republic of China Medicinal Product Administration Law of the People's Republic of China and Provisions for Drug Insert released marketing compliance regulations policies and case studies monthly. Through its corporate communication platform

Sheets and Labels . Our commitment is to be responsible to consumers and all advertising and promotional materials undergo the Company regularly distributed compliance promotion journals to all employees.a rigorous pre-approval process to comply with regulatory standards. In marketing and promotional activities we strictly follow

compliance and ethical standards. We have gradually established a mature internal review mechanism for advertising placements and

regularly conduct third-party audits of e-commerce platform marketing advertising and sales activities. During the Reporting Period

CR Sanjiu did not receive any complaints or legal proceedings about misleading or deceiving consumers by publicity. In order to ensure

all employees deeply understand and follow responsible marketing principle we conduct annual responsible marketing training we

provide media knowledge and responsible marketing training for all internal marketing staff engaging all relevant employees in these Innovative marketing approaches. By gaining insights into the core needs of consumers we carry out innovative marketing activities

programs to enhance their professionalism and awareness of responsibility in marketing. across multiple platforms and channels. Focusing on holiday themes cross-industry collaborations and popular program IPs we

implement integrated online and offline marketing strategies. This approach enhances media communication efficiency increases

customer attention and continuously injects fresh elements and vitality into the Company's brand.Pharmaceutical Advertising Material Review Process

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

Strategy Procurement Execution Settlement & Review

Dermatophyte takes "Gel for Immediate Itch Relief One Step Ahead" as its core proposition

focusing on the core demand of "Rapid Itch Relief" for dermatitis sufferers and relying on

the differentiated property of its gel formulation which provides "Refreshing and Repairing"

effects to ensure consistency in brand communication content. On the one hand it outputs

highly relevant creative content centered around the product's uniqueness conveying brand

Production and Utilization of Extensive Materials communication points through inducing scenarios such as high-pressure work environments

and humidity sensitivity further enhancing brand memorability. On the other hand it carries

(Billboards Templates Product Placements H5) out innovative content marketing targeting opportunity scenarios and segmented audiences.

Through scenario-based IPs such as "Green Skin for Summer" it introduces innovative resource

formats using healing-themed artwork and empathetic insights to close the emotional

distance with users accurately targeting the minds of segmented audiences. At the same time

it lays out a social media search strategy targeting keywords such as "Dermatitis Itching" and

collaborates with high-quality influencers and doctors for science popularization precipitating

brand assets for Dermatophyte's itch relief among actively searching audiences. It establishes

itself as an industry benchmark for long-term growth in multiple dimensions for pharmaceutical

Does the Use of Materials Comply with Advertising Regulations brands.

999 Dermatophyte "Green

Summer" Campaign60 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 61

Ensuring Drug Safety

We continue to deepen and improve the product lifecycle management system aiming to "create an efficient and controllable quality control

model." From raw material control drug production and warehousing and transportation to product traceability and pharmacovigilance we Produ6ct Recall We have developed the CR Sanjiu Product Recall Management System which outlines the recall process following

integrate risk management throughout every stage of the product lifecycle. By ensuring the delivery of excellent and safe products we uphold the the identification of adverse drug events. Both the Company and its subsidiaries promptly organize investigations

foundation of the Company's survival and development taking responsibility for public health. and evaluations of drug safety risks and after assessment a recall plan is formulated. The recall is then implemented and a summary

report is generated along with corrective and preventive actions. We also track the implementation of these actions and assess their

Flowchart effectiveness. In addition we regularly conduct mock recalls to ensure readiness. We have revised the CR Sanjiu Finished Product Return and Rework Management Guidelines to further strengthen the management of returned finished products and rework

processes standardizing the procedure for returning incorrect drugs to the factory. This ensures the quality of supplied medicines is

Sourc1e Control maintained.We extend the quality management system to the upstream of the supply chain by establishing the "National

Medicinal Herb Seed and Seedling Base" and "Standardized Medicinal Herb Planting Base." We rigorously

conduct quality audits and dynamic risk management for material suppliers. During the medicinal herb entry process strict

inspection procedures are followed with strengthened management audits of suppliers. We regularly assess suppliers' planting

environments production processes and other factors ensuring the quality of medicinal herbs is tightly controlled from the Pharma7covigilance

source. We strictly adhere to regulations such as the Measures for the Reporting and Monitoring of Adverse Drug Reactions and Specifications for Pharmacovigilance Quality Management Standards. A Drug

Safety Committee has been established to oversee major risk assessments respond to significant or urgent drug events

make risk control decisions and manage other critical pharmacovigilance matters. Additionally we have set up a

dedicated Pharmacovigilance Department and appointed specialized pharmacovigilance officers. We have established a

Drug P2roduction We increase investment in research and development and continuously improve product quality standards comprehensive pharmacovigilance system that standardizes activities throughout the entire lifecycle of pharmaceutical

enhancing internal control standards for materials and products. We establish a technical platform for process products ensuring the effective monitoring identification assessment and control of adverse drug reactions and other

engineering to promote product strength and effectively prevent quality and safety risks in contract manufacturing. We ensure that harmful drug-related events. We have also developed a communication mechanism for drug safety issues minimizing drug

all subsidiaries strictly implement the responsibilities of the Marketing Authorization Holder for drug quality and safety in contract safety risks and protecting and promoting public health.manufacturing. This includes strengthening quality supervision and management over contract manufacturers to prevent potential

quality risks.CR Sanjiu Subsidiary Pharmaceutical Safety Management Systems (Partial)

Ware3housing and Logistics We promote the integration of transportation centralizing the management of both production logistics and Key Performance

sales logistics. A standardized transportation management process and set of standards are established to Company Name Policy Name

ensure the safety and quality of product transportation.CR Shunfeng

CR Laotongjun Product Recall Management Regulations The number of products recalls due to

CR Sanjiu(Zaozhuang) health and safety concerns for the year is

Drug T4raceability We have built the CR Sanjiu pharmaceutical information traceability system using ERP WMS TMS OMS and

logistics decision-support systems to ensure end-to-end traceability of logistics operations. Through the Mashang Product Identity Traceability Code

Jicha app we scan traceability codes to track and update product flow ensuring transparency in product information and movement. CR Sanjiu(Yaan) Management Regulations 0 batches

Shenyang Sanjiu with no level 1 or level 2 recall events.Eme5rgency Response The EHS Committee is responsible for handling food and drug safety emergencies. We have established policies and Kunming Pharmaceutical Group Drug Safety Emergency Response Plan Neither the Company nor its subsidiary Management Regulations

procedures such as the CR Sanjiu Food and Drug Safety Emergency Response Guidelines and the CR Sanjiu EHSQ manufacturing enterprises experienced

Incident Management Procedures. These guidelines ensure the establishment of a robust mechanism for responding to food and drug safety any recalls due to quality issues.emergencies and quality incidents. We provide clear guidance and standardized emergency response procedures to handle quality and safety Kunming Pharmaceutical Group (Beike zhejiang)

emergencies efficiently. This system improves the speed and coordination of emergency responses effectively controlling the escalation of

incidents and minimizing personal injuries property damage and social impact. Ultimately we aim to safeguard public drug safety and life

security.Guanlan Base MAH Drug Safety Emergency Response Plan Management Measures62 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 63

Enhancing Drug Accessibility

We remain steadfast in our original mission by optimizing production with grassroots medical institutions we donate medicines and malaria prevention and control in recipient countries leveraging our professional resources to empower health initiatives in Belt

processes and managing costs effectively ensuring that the conduct medical training programs to support the widespread and Road countries and other developing regions. We deliver antimalarial drugs other medicines and medical equipment to

public can access safe and reliable health products and services at coverage of healthcare services across all levels of society. By fulfilling African countries providing aid to economically disadvantaged patients and ensuring the health and safety of local patients. In

affordable prices in a timely manner. Through close collaboration our global health commitments we aim to benefit more people. 2024 CR Sanjiu participated in artemisinin-based antimalarial drug aid projects in Uganda and other countries. By the end of the

reporting period our antimalarial drugs had reached over 20 African countries benefiting millions of patients.Rare disease drug development. We are strengthening independent research and innovation particularly in the development of "ONC201"

a drug targeting H3K27M-mutant diffuse midline glioma (DMG). The drug has already received the Clinical Trial Approval Notice issued by the

National Medical Products Administration (NMPA) marking a significant step forward in improving the prevention and treatment capabilities

for rare diseases.Modern logistics system construction. We are building a robust specialized scalable and integrated logistics system to ensure the

safety stability and accessibility of medicines from the supply end. By developing a decision-support system for warehouse

network planning we use algorithms to provide real-time scientifically sound recommendations for warehouse layouts

improving delivery efficiency. Based on product attributes and production-sales regions we define warehouse characteristics

and adopt a central warehouse + regional warehouse operational model to achieve multi-warehouse collaboration enhancing

logistics capabilities and customer service levels. We are advancing integrated transportation systems offering comprehensive

and professional delivery modes such as full truckload less-than-truckload and express shipping to meet diverse business

needs. Additionally we are building lean and intelligent logistics exploring fixed-capacity transportation models optimizing

routes and promoting automation in self-managed warehouses to improve delivery efficiency. We continuously refine Kunming Pharmaceutical Group's Anti-Malaria Drug Aid Project and Foreign Aid Training Session in Uganda

emergency response mechanisms for logistics operations to ensure timely measures during disruptions maintaining stable

logistics operations.Fair and reasonable pricing. We strictly adhere to laws and regulations such as the Anti-Monopoly Law of the People's Republic

of China and the Guidelines on Strengthening Current Drug Price Management refraining from interfering with terminal drug

prices to protect fair market competition. In accordance with the CR Sanjiu Marketing Department Product Price Adjustment

Management Rules we price products differently to ensure patients can access medicines at reasonable and fair prices.Additionally in different international markets we establish fair and flexible pricing mechanisms based on local economic

conditions and patients' actual needs and payment capacities. We actively respond to national policies continuously promoting

the inclusion of products in the medical insurance catalog and benefit people's livelihood with better drug prices. Some drugs

are included in medical insurance and centralized purchasing with tiered pricing based on national regulations allowing

patients to enjoy varying levels of medical insurance reimbursement for different categories of drugs. Kunming Pharmaceutical Group Sharing Experiences at the "International Health Development Cooperation and Health Financing Seminar"

and the "Medical Products International Public Market Procurement Exchange Seminar"

Combating counterfeit drugs. We support government efforts to strictly regulate counterfeit and substandard drugs protecting

the legal rights of consumers and patients. Through platforms such as "Aichuang Regulatory Code" and "Code for Assurance"

we have established a comprehensive product traceability system to ensure the production and distribution paths of drugs Anchoring the Silver Hair Economy Kunming Pharmaceutical Group Strives to Be a Leader

are traceable. We strengthen inspections and verification during label design and usage to reduce the risk of counterfeit Case in Health Services

substandard or mislabeled drugs entering the distribution system.As a subsidiary of CR Sanjiu Kunming Pharmaceutical Group has set a new strategic goal of becoming "a leader in the silver hair economy

Overseas expansion initiatives. We actively sign cooperation agreements with countries such as the Czech Republic Singapore a pioneer in elderly health and chronic disease management and a frontrunner in premium traditional Chinese medicine." The Company is

Canada Mexico and Saudi Arabia to promote the establishment of international cooperation platforms. In September 2024 committed to building a benchmark for the Panax notoginseng (Tianqi) industrial chain and the "Kunzhongyao 1381" premium TCM platform

we successfully launched cefazolin sodium pentahydrate and ceftazidime formulations in Japan. We continue to expand our focusing on the aging population to contribute to the health accessibility of the elderly.business in emerging markets with a licorice root extraction and processing base in Uzbekistan. CR Sanjiu is establishing a

diversified sales network in Africa including subsidiaries and partnerships with local pharmaceutical companies to broaden In 2024 Kunming Pharmaceutical Group officially launched the "777" brand marking a new phase in its silver hair economy

our sales channels as much as possible. We assist local supply chains in strictly regulating counterfeit and substandard drugs health initiatives and demonstrating its proactive response to the national strategy for addressing population aging. The Company

ensuring efficient and stable drug supply to high-demand regions and providing high-quality affordable antimalarial drugs continues to increase its R&D investments focusing on the secondary development of existing botanical drugs and adhering to

to populations in high-malaria-prevalence areas. In East Africa such as Tanzania we have established sales teams to promote the "small yet comprehensive + differentiated" R&D strategy. It remains dedicated to therapeutic areas such as cardiovascular and

products while strengthening logistics in West Africa and expanding drug sales in other regions. We actively collaborate with orthopedic diseases. Through a combination of independent R&D investment and acquisitions collaborative research and licensed

African health ministries and national drug agencies to include drugs in national public health programs through government introductions the Company has established an innovative R&D pipeline covering oncology cardiovascular metabolic immune and

procurement. We also partner with international organizations such as the World Health Organization (WHO) and The Global orthopedic fields. The pipeline includes a wide range of technologies such as chemical drugs rare Category 1 TCMs and Category 2.4

Fund to help countries and communities more effectively address malaria and other diseases. During the reporting period CR improved new drugs with expanded indications.Sanjiu implemented more than ten national-level foreign assistance projects and foreign aid training programs. Our malaria From a production and manufacturing perspective Kunming Pharmaceutical Group has established a comprehensive quality system with

prevention and control projects were successfully included in the Ministry of Commerce's catalog of exemplary foreign aid seven manufacturing platforms that meet national standards continuously empowering the elderly health industry.training programs. We are committed to improving the professional capabilities of management and technical personnel in2024 Sustainability and ESG Report 65

Low-Carbon Leadership

Jointly Creating a Green

Home

Governance

CR Sanjiu has established a top-down environmental governance

structure to ensure the efficient management and supervision of

environmental issues. A three-level governance structure has been

formed consisting of the Board of Directors the EHS Committee the

EHS Management Department as well as other departments business

divisions and affiliated enterprises. The Board of Directors serves as the

highest governing decision-making body for Company's environmental

management strategy and performance who finalizing and overseeing

the establishment and implementation of environmental management

policy and environmental performance. The EHS Committee serves as

the management level which responsible for the overall deployment

and coordination of eco-environmental protection coordinating

and reviewing the major policies and systems as well as the strategic

planning and reviewing the major risks and opportunities of the eco-

environment. The EHS Management Department other departments

business units and subsidiaries serve as the execution level

responsible for carrying out the specific work of eco-environmental

protection.Strategy

Guided by Xi Jinping 's Thought on Ecological Civilization CR Sanjiu

adheres to the bottom line of ecological and environmental protection

red lines actively implements the strategy of building a Beautiful

China and persists in taking the path of green and low-carbon

development. It deeply integrates the concept of green and low-

carbon development into the entire life cycle of product research and

development design manufacturing packaging transportation use

and waste treatment. It formulates medium and long-term plans for

ecological and environmental protection focusing on environmental

risk control pollution prevention and control green and low-carbon

transformation waste recycling and the efficient utilization of energy

and resources. Through technological upgrading and transformation

and management optimization it continuously promotes the early

realization of the goals of green and low-carbon development. We

guide the partners in the industrial chain to jointly participate in the

construction of a Beautiful China through the supplier performance

assessment mechanism and continuously build a green ecosystem for SDGs

sustainable development.66 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 67

Risk and Opportunity Management Indicators and Target

CR Sanjiu incorporates environmental-related risks into the comprehensive risk management system using questionnaires and on-

operational site interviews to fully identify environmental-issue risks. Risks are classified based on likelihood of occurrence regulatory Type Medium- and Long-term Targets Progress towards 2024 Targets

compliance and consequence severity. Risk control priorities are set according to risk levels and improvement urgency. Control is

strengthened through technological upgrades and management optimization to prevent risks from becoming hazards. Major risks are

reviewed by the EHS Committee and then submitted to the Board of Directors for approval. The Company promptly supervises and The environmental management system has been

follows up the progress of environmental-risk control and reports to the Board. Meanwhile in response to changes in regulations and Build a full-cycle environmental compliance improved and in 2024 no sudden environmental

policies climate-change risks market-demand shifts and technological innovation opportunities the potential impacts are analyzed Environmental Compliance management system to achieve zero incidents occurred. Key pollutant-emitting units

and coping strategies are formulated to ensure the effective allocation of resources and the smooth realization of management goals. Management environmental violations and create a model of

compliance for sustainable development. did not experience any environmental violations or non-compliance.Risk/Opportunity Potential Impact Response Strategy

Implement the national dual - carbon strategy In 2024 the greenhouse gas emission intensity

Closely monitor regulatory and policy changes carry out energy-saving and carbon-reducing decreased by 13.58% compared with the previous

conduct timely compliance evaluations improve Climate Change Response renovations continuously reduce greenhouse gas year 46.71% lower than the target value; the

Changes in Policies and New environmental protection relevant systems update response strategies and emissions and dynamically identify and control greenhouse gas emissions decreased by 19.65%

Regulations regulations may increase compliance strengthen training on policies regulations and system climate change risks compared with the previous yearcosts and operational pressure. dissemination. Stay updated on policy developments

promptly update compliance measures and enhance

employee training.In 2024 the comprehensive energy consumption

Carry out the low/zero-carbon transformation per 10000 RMB of output value (at comparable

of the energy structure strengthen energy prices) decreased by 8.25% compared with the

Strengthen the identification and control of climate informatization management improve energy previous year 25.12% lower than the target value;

Extreme weather may affect production risks enhance monitoring and early warning formulate Energy Management utilization efficiency reduce energy consumption the comprehensive energy consumption per

Climate Change Risks operations and the stability of the supply contingency plans conduct employee emergency per unit of output value and promote energy 10000 RMB of added value (at comparable prices)

chain. response training and drills and improve the risk-resistant conservation and efficiency improvement. decreased by 10.82% compared with the previous

capacity of operational sites. year 17.83% lower than the target value

Changes in Market Consumers prefer green products more Increase the intensity of research and development Continuously reduce the generation and emission

Demand and market competition intensifies. of green products and enhance the environmental Pollutant Reduction of various pollutants such as wastewater waste The pollutant reduction targets from 2020 to 2024 performance of products. gas and solid waste to avoid environmental have all been achieved

pollution

The clean technology revolution brings

Technological Innovation opportunities for energy efficiency Invest in and introduce advanced and mature environmental In 2024 the treatment of industrial solid waste

Opportunities breakthroughs and the appreciation of protection technologies to promote process upgrades. was legal and compliant. The recycling rate of

carbon assets. Adhere to the principles of legalization reduction general industrial solid waste is 96.65% and the

Resource Recycling recycling and harmless treatment maximize the generation of hazardous waste was legal and utilization rate of waste resources and achieve the compliant. The recycling rate of general industrial

zero - waste goal solid waste is 96.65% and the generation of

hazardous waste decreased by 19.93% compared

Integrate environmental responsibility into corporate with the previous year

strategy plan environmental protection work from a

Reputation and Brand Environmental incidents may damage strategic level strenathen environmental risk identification

Impact the enterprise's reputation and affect and control eliminate environmental hazards at their market trust. inception prevent hazards from developing into

environmental incidents and enhance emergency

management and public opinion management.68 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 69

Strengthen Control Advocate Green Development 1 Environmental governance structure: CR Sanjiu attaches great importance to ecological and environmental management

forming a three-tier governance structure of the Board of Directors - EHS Committee - EHS Management Department and

other departments divisions and subsidiaries. The Board of Directors is the decision-making level the EHS Committee is the

management level and the EHS Management Department and other departments business units and subsidiaries are the

CR Sanjiu complies with the Environmental Protection Law of the People's Republic of China Water Pollution Prevention and Control executive level. CRC Sanjiu headquarters and each business unit sign an EHS responsibility letter at the beginning of each

Law of the People's Republic of China and other relevant laws and regulations. The Company actively responds to the strategy of Beautiful year in which specific management objectives for energy saving and environmental protection pollution reduction and

China supporting high-quality development through a high-quality ecological environment. CR Sanjiu is committed to a green low-carbon carbon reduction production safety occupational health etc. are defined relevant data are dynamically monitored and

development path and has developed and implemented the China Resources Sanjiu Ecological Environment Protection Policy and related performance assessment is carried out at the end of the year.environmental management policies. Through a series of measures including improving the environmental management system strengthening

environmental audits and enhancing pollutant control the Company has perfected its environmental management system to ensure that

relevant systems cover all key areas of environmental management. 2 Environmental management policies: The Company carries out the formulation and revision of environment-related

system policies which regulates the management of all aspects of environmental protection involved in the Company.Enterprises at all levels under the subordinate companies have articulated the preparation of the Provisions on the Prevention

and Control of Wastewater Waste Gas and Noise Pollutants Provisions on the Standardized Management of General Industrial

Solid Wast and Provisions on the Standardized Management of Dangerous Waste and other internal policies in accordance

with the system of the Group relevant laws and regulations standards norms and policy documents and in light of their own

Robust Environmental Management System reality. Furthermore CR Sanjiu formulated and conducted the CR Sanjiu Work Plan for Accelerating Green Development and Promoting the Construction of a Beautiful China CR Sanjiu EHS Annual Assessment and Evaluation Management Measures

and the CR Sanjiu EHS Hazard Source Management Measures in 2024.The Company has always adhered to the original aspiration of plans and regularly conducting risk hazard inspectionsemergency

green development integrating environmental protection into training and drills. we enhance the environmental risk prevention 3

all aspects of its business operations. We actively promote the awareness and emergency response capabilities of all employees. Environmental risk control: CR Sanjiu refers to the internationally accepted COSO risk management framework combines

certification of the environmental protection management system At the end of Reporting Period 15 subsidiary companies have with our current condition and built the "Three Lines of Defense" risk management system composed of business units

and establish and improve scientific standardized and efficient passed the ISO 14001 certification with the certification rate functional departments such as EHS internal audit and discipline inspection and supervision departments clarifying

environmental management processes. By formulating aid reaching 43% and 8 subsidiary companies have passed the ISO the organizational structure and division of labor for environmental risk management work. The Company formulated

conducting comprehensive emergency management policy and 50001 certification with the certification rate reaching 23%. and implemented internal policies such as the CR Sanjiu EHS Hazard Source Management Measures and the CR Sanjiu

Environmental Risk Classification and Grading Evaluation Measures and carries out risk management work through the "Five-

step Method" of risk identification risk assessment risk response risk monitoring and risk reporting effevtively reducing the

negative impact of the Company's production and operation ecological environment and natural resources.

4

Enhancing emergency response capabilities: The Group has established CR Sanjiu Comprehensive Emergency Plan for

Sudden Environmental Incidents. Subordinate enterprises at all levels in accordance with relevant policies and regulations

and combined with their current condition prepare emergency plans for sudden environmental incidents file them with the

local ecological and environmental department and regularly conduct emergency plan drills and revision work. During the

The targets for pollutant and greenhouse gas reduction Reporting Period CR Sanjiu conducted number of 617 EHS emergency drills with 16687 EHS emergency drill attendance

from 2020 to 2024 have all been achieved. which effectively improved the ability of emergency personnel to properly handle EHS incidents. This effectively improved the

ability of emergency personnel to appropriately handle EHS accidents and incidents in emergency situations.Number of EHS emergency drills is 5

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

617 implemented the Implementation Plan for the EHS Capability Improvement Action of Kunyao Group and the Implementation in 2024 Plan for the Three-year EHS Improvement Action of the Sinopharm Business Division conducted EHS performance

improvement projects consolidated the EHS management foundation and improved our EHS management level.

6

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

management personnel the Group has organized 135 times environmental protection trainings in 2024. Subordinate

enterprises at all levels participated 8 times relevant trainings organized by the Ministry of Ecology and CR Sanjiu.Furthermore A total of 192 employees have been organized to participate in the Group's eco-environmental protection

professional competence training and certification for the main person in charge of enterprises at all levels EHS leaders in

charge and environmental protection managers.70 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 71

Water Resource Management

Water is the source of life and an important resource for the sustainable development of enterprises. We attach great importance to

Environmental Audit Conduction the protection and rational utilization of water resources and have established a sound water resource management system. Through

measures such as reducing the consumption of fresh water regulating process water use and promoting the recycling of reclaimed

In order to effectively improve the level of environmental protection management comprehensively identify and control various types water and cooling water we improve the reuse rate of water resources. During the Reporting Period CR Sanjiu achieved buring the

of environmental risks we continue to strengthen the internal and external environmental audits find hidden environmental risks Reporting Period CR Sanjiu achieved all the Water resource management targets.environmental management shortcomings and environmental protection facilities constantly analyze and summarize innovate the

work methodology implement classified and hierarchical control of environmental risks identified by environmental audits and use Targets and Achievements of CR Sanjiu's Water Use Efficiency Indicators from 2020 to 2024

the EHS information management system to achieve closed-loop tracking of rectification and correction of the hidden risks.??????Year Change from The Rules for Target-setting

Number Indicator Name 2020 2021 2022 2023 2024 the previous During the "14th Five-Year

Indicator year in 2024 Plan" Period

Actual Value (tons/

Formulate an environmental audit system. To standardize environmental compliance evaluation and potential hazard Fresh Water RMB 10000) 2.4668 2.1663 2.2657 2.6082 2.3854 Based on 2020 as the

investigation CR Sanjiu has formulated an environmental audit system and adheres to CR Sanjiu EHS Supervision and Consumption benchmark it decreasing

per 10000 RMB Target Value (tons/ Management Measures CR Sanjiu EHS Hazard Source Management Measures. It classifies and manages environmental risks in 1 RMB 10000) 2.4668 2.4175 2.3681 2.7547 2.7263

Reduce by 2% annually - (The

accordance with the Measures for Classifying and Grading Environmental Risk Assessment Environmental Risk Classification and of Output Value 8.54% baseline value of Kunming (at Comparable Pharmaceutical Group has

Grading Evaluation Methodology. Additionally subsidiaries and business units have formulated supporting regulations including Whether the Target is Prices) Achieved N/A Yes Yes Yes Yes been incorporated in 2023)the EHS Management Compliance Evaluation System and the EHS Hidden Risk Investigation and Remediation System.Actual Value (%) —— —— 66.06% 83.11% 85.89% Increase Based on 2022 as the 3.33%. benchmark it increases

2 Industrial Water

by 1% year -by-year (The

Reuse Rate Target Value (%) —— —— 66.06% 67.38% 68.70% benchmark value of Kunming Pharmaceutical

Internal environmental audit. CR Sanjiu organizes and carries out EHS audit every year with the production safety month Whether the Target is Group has been

as an opportunity. In 2024 our internal environmental audit has covered 100% of the production-oriented subsidiaries. Achieved —— —— N/A Yes Yes incorporated in 2023)

Regarding emergency management for unexpected environmental events safety operation management of environmental

protection equipment and facilities solid waste energy-saving and environmental protection qualifications and compliance Remarks:

management of pollution source automatic monitoring. During the Reporting Period CR Sanjiu has conducted 5 times When there are changes in the production scale and quantity of enterprises included in the statistics the target values of the indicators can

internal audits on environmental compliance management and other aspect. Additionally CR Sanjiu organized environmental be adjusted accordingly.remediation actions and warning education for enterprises located in the second and third batches of the third round of the In 2023 as Kunming Pharmaceutical Group has been included in the statistical scope after incorporating the benchmark value of Kunming

central environmental protection inspection regions. CR Sanjiu also statistically analyzed the use of environmental protection Pharmaceutical Group the corresponding target values of the indicators have been adjusted accordingly.equipments and automatic monitoring equipments at all levels of enterprises to ensure the safe and stable operation of

equipment. In 2024 subsidiaries organized 339 environmental protection inspections at all levels to proactively prevent and

resolve various environmental risks and hazards..T he Group has formulated management measures such as the CR Sanjiu Energy and Resource Conservation

Formulate Management Measures and the CR Sanjiu Energy Conservation and Ecological Environmental Protection

Environmental Supervision and Management Measures to guide the water resource management work. Multiple measures

External environmental audit. In 2024 CR Improve environmental protection management for Protection are taken to reduce resource consumption. Various measures have been adopted to reduce the consumption

Sanjiu's subsidiaries at all levels conducted external construction projects. CR Sanjiu enhances environmental Policies and of resources encourage consumption and require enterprises at all levels to reduce the amount of fresh

environmental audits including commissioning management for construction projects by improving relevant water and enhance the reuse rate of industrial water through a number of measures such as upgrading water-Strengthen

third parties to carry out environmental hazard management systems. It specifies that new renovation and using equipment regulating the use of water for processes strengthening the maintenance of water-using Resource

investigations compliance evaluations and pollutant expansion projects must undergo environmental analysis equipment and implementing the recycling of water and condensate At the same time employees are Management.testing. These audits also supported inspections of risk assessment and environmental impact evaluation and encouraged to develop good habits of resource conservation fostering a strong corporate culture focused on

automatic monitoring equipment and the operation obtain approval for the environmental impact assessment resource savings.and maintenance of environmental protection facilities (EIA). During the implementation of all projects "three

as well as government-led clean production audits simultaneous" management is enforced ensuring strict Sign EHS A ccording to the CR Sanjiu EHS Target and Responsibility Management Measures at the beginning of each

greenhouse gas emission report verifications organized adherence to pollution prevention and control measures Liability year the Group signs EHS liability agreements with each business unit. The water use efficiency targets

by environmental authorities and both online and outlined in the EIA and its approval documents. Additionally Agreements are decomposed and issued to each business unit. At the end of Reporting Period performance appraisals

offline environmental protection inspections. At the environmental protection testing acceptance and filing and Implement are carried out on each unit in accordance with the EHS liability agreements. According to the CR Sanjiu

end of Reporting Period 18 subsidiary enterprises had are carried out upon project completion and all required Assessment EHS Commendation and Reward Plan units and individuals that have achieved outstanding results in EHS

conducted clean production audits 12 of which were qualifications licenses and documentation are obtained in Mechanism. management including water management are commended.carried out voluntarily. accordance with legal regulations ensuring they remain valid

during the project's lifetime. Track the

Achievement T he water use efficiency indicators are statistically analyzed on a quarterly basis. Business units are then

of Targets and guided to implement technical and management measures to strengthen water usage management minimize

Improve Water fresh water consumption increase the reuse rate and ensure the achievement of the targets.Use Efficiency.72 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 73

Pollutant Prevention Signing Responsibility Agreements Target Breakdown and Performance Evaluation

CR Sanjiu strictly adheres to laws and regulations such as the Environmental Protection Law of the People's Republic of China the In accordance with the EHS Supervision and Management Measures the Group signs annual EHS responsibility agreements with each

Law of the People's Republic of China on Prevention and Control of Air Pollution and the Law of the People's Republic of China business unit breaking down pollutant reduction targets. Regular statistical analysis of indicator data is conducted and at the end of the year

on Prevention and Control of Water Pollution and has formulated and issued the China Resources Sanjiu Pollutant Prevention performance evaluations are implemented in line with the EHS Annual Evaluation and Assessment Management Measures. Business Units with

and Control Management Measures the CR Sanjiu Energy Conservation and Ecological Environmental Protection Supervision and outstanding performance would be recognized and rewarded.Management Measures other systems to guide and standardize the pollutant prevention and control work of enterprises at all levels

aiming to control and reduce wastewater waste gas industrial solid waste noise and new pollutants emission. We strictly monitor

the emissions of various pollutants continuously optimizing production processes to achieve source control. We adopt advanced Environmental Performance as a factor in executive and employees' compensation

and mature pollution prevention and control technologies and implement detailed management of environmental protection We have incorporated environmental management performance into the current incentive compensation policy for executive and all

facilities to ensure that emission concentrations are better than national local and industry standards maintaining strict compliance employees. Job-specific environmental management responsibilities are defined and performance levels are assessed through annual

with environmental regulations. At the end of Reporting Period all the pollutant emission reduction targets of CR Sanjiu have been reporting and evaluation which are linked to bonus distribution strengthening responsibility implementation.achieved as detailed in the table below.CR Sanjiu's Pollutant Reduction Target Setting and Achievement from 2020 to 2024 Source Control

??????Year Change from The Rules for Target- All subsidiaries are required to prioritize the procurement of low-energy low-pollution and low-noise models when purchasing new

Number Pollutant 2020 2021 2022 2023 2024 the previous setting During the "14th

Indicator equipment. The use of outdated processes and equipment that have been officially phased out is prohibited. On the basis of meeting year in 2024 Five-Year Plan" Period process requirements the substitution of high-pollution raw materials is promoted and priority is given to the use of low-toxicity and

Emission (t) 9.50 3.50 2.66 4.70 3.47 harmless materials to reduce pollutant generation and toxicity.Target Value (t) Permissible 9.31 9.12 10.1689 9.9525 Reduced Based on 2020 as the 1 SO2 Emission 26.71%. benchmark decreases

Whether the Target is by 2% year - by - year Monitoring Pollutants

Achieved Yes Yes Yes Yes Yes

Emission (t) 35.01 35.65 38.44 66.34 47.87 Each of CR Sanjiu's subsidiaries develops a self-monitoring plan at the beginning of each year. Some environmental protection facilities are

equipped with automatic monitoring devices connected directly to the ecological environment supervision platform. For facilities without

Target Value (t) Permissible Permissible Permissible Permissible 65.01 Reduced 2020 as the benchmark 2 NO Emission Emission Emission Emission decreases by 2% year - automatic monitoring equipment self-monitoring is carried out according to the self-monitoring plan. During the Reporting Period the automatic X 27.84% by – year from 2024 monitoring data and inspection reports show that after treatment by environmental protection facilities the concentration of CR Sanjiu's pollutants Whether the Target is

Achieved Yes Yes Yes Yes Yes as well as the total emissions of wastewater and waste gas comply with national local and industry standards and the total emissions have not

exceeded the allowed limits.Particulate Matter

Emission (t) 6.8796 1.4783 1.44 10.00 8.19

3 Particulate Permissible Reduced

Based on 2020 as the

Waste Gas and Wastewater Treatment

Matter (PM) Target Value (t) Emission 6.7420 6.6044 11.5742 11.3279 18.10% benchmark decreases by 2% year - by - year

Whether the Target is Yes Yes Yes Yes Yes Efficient environmental protection equipment is prioritized and facilities with strong load-bearing capacity are installed. Achieved Emergency plans are established and high-risk environmental protection facilities and automatic monitoring equipment are

Emission (t) 377.8655 12.1292 11.23 8.87 5.87 managed with precision by dedicated personnel or third-party professional teams. Standardized operations and training are

Volatile Permissible Permissible Permissible Permissible implemented. In 2024 the environmental protection facilities and online monitoring equipment have been running smoothly.

4 Organic Target Value (t) 8.69 Reduced Shall not exceed the Compounds Emission Emission Emission Emission 33.82% permissible emission

(VOCs) Whether the Target is

Achieved Yes Yes Yes Yes Yes Noise Control

Emission (t) 62.20 55.47 58.77 67.14 60.02 When procuring new equipment emphasis is placed on low-noise models. Noise control standards are followed during operations

Target Value (t) Permissible 60.956 59.712 67.4077 65.97 Reduced and noise sources are identified through comprehensive monitoring at every stage of the process. Various measures including 5 COD Emission 10.60% sound source muffling vibration isolation sound barriers and green landscaping for sound absorption are used in conjunction

Whether the Target is Yes Yes Yes Yes Yes with real-time monitoring and protective management to ensure noise levels meet national and local standards.Achieved Based on 2020 as the

benchmark decreases

Emission (t) 3.04 1.91 1.68 2.39 2.01 by 2% year - by - year

6 Ammonia Target Value (t)

Permissible 2.9792 2.9184 4.4390 4.3445 Reduced Waste Disposal

Nitrogen Emission 15.90%

Whether the Target is CR Sanjiu adheres to the principles of compliance minimization scale recycling between units and active participation in the

Achieved Yes Yes Yes Yes Yes recycling and harmlessness for the classification and treatment development model of social large-scale recycling. The focus

Remarks: of waste. For hazardous waste temporary storage areas are is on expanding and evaluating methods for waste recycling

A llowable emissions: The total allowable emissions of pollutants or the total control amount specified in the pollutant discharge permit as set by the ecological set up in strict accordance with regulations and the waste is and disposal. During the Reporting Period all waste generated

environment authority of the enterprise's location. classified packaged and temporarily stored in designated from CR Sanjiu's production and operational activities has been

zones. Qualified professional agencies with the necessary handled in compliance with legal and regulatory requirements.W hen there are changes in the production scale number of enterprises etc. the target values of the indicators can be adjusted accordingly. capabilities are entrusted to handle the waste in a lawful CR Sanjiu's subsidiaries CR Benxi Sanjiu Pharmaceutical and

I n 2023 due to the inclusion of Kun Pharmaceutical Group in the statistical scope the baseline values of Kun Pharmaceutical Group were incorporated and the and compliant manner. For non-hazardous waste priority is CR Shunfeng were recognized as "Waste-Free Factories" in

corresponding indicator target values were adjusted accordingly. given to small-scale internal recycling within units medium- Benxi City and Shunde District Foshan respectively.74 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 75

General Industrial Solid Waste Management. Multi - Dimensional Carbon Reduction Protect

Establish and implement standardized management systems for general industrial solid waste set up temporary storage areas

with clear labeling and signage; assign dedicated personnel for management keep accurate records in ledgers and ensure their the Green

preservation and carry out regular inspections and maintenance. For general industrial solid waste strengthen the whole-process

reduction management adhere to the principle of priority recycling and reuse as much as possible. For general industrial solid waste With the continuous rise in global temperatures climate change has brought severe negative impacts and risks to humanity transmitting through a

that cannot be recycled it should be delivered to a third party with recycling capabilities or used as raw materials/auxiliary materials "risk cascade" from natural ecosystems to economic and social systems. This poses a serious threat to the human living environment and the safety

for production. of life and property. In the face of the increasingly severe climate crisis actively addressing climate change and implementing green low-carbon

transformation has become a key driver of green high-quality development. We are committed to multi-dimensional carbon reduction and are

Hazardous Waste Disposal integrating the concept of green low-carbon development into every aspect of our production and operations. Through technological innovation

CR Sanjiu has developed and implemented management systems and emergency plans for hazardous waste including the creation of energy optimization and process improvement we aim to reduce energy consumption and our carbon footprint.management plans specialized temporary storage areas and clear signage labels and tags. Classified and zoned temporary storage

is enforced. Hazardous waste reduction is carried out through technical and management measures to minimize generation at the Response to Climate Change

source in compliance with relevant laws regulations and standards. Hazardous waste is entrusted to professional agencies with the

appropriate qualifications and technical capabilities for disposal following the transfer and tracking system to ensure standardized CR Sanjiu actively responds to the climate change initiatives of the Paris Agreement and supports the UAE Consensus through action. The

disposal and traceability. The Company has fully completed the standardization of hazardous waste management achieving unified Company thoroughly implements the national dual-carbon strategy and steadily carries out energy-saving and carbon-reduction efforts. In

standards and regulated management. accordance with the Carbon Emission Management System Requirements and Guid CR Sanjiu has improved its carbon emission management

system. The Company has developed systems such as the CR Sanjiu's Medium- and Long-Term Plan for Peaking Carbon Emissions and set

Disposal of Expired Medicines greenhouse gas reduction targets into 14th Five-Year Plan based on the Science-Based Targets initiative (SBTi) methodology. At the same time

CR Sanjiu dynamically identifies and manages climate-related risks and opportunities fully referencing TCFD recommendations to effectively

All expired medicines and waste pharmaceutical products are treated as hazardous waste and disposed of by an external party in manage climate change risks and ensure proper information disclosure.accordance with relevant regulations. Third-party disposal agencies with the necessary qualifications and technical capabilities are

selected and hazardous waste disposal agreements are signed to ensure the legal and compliant disposal of expired medicines.Governance

Use of Packaging Materials A solid governance structure and clear management responsibilities are key to a Company's effective response to climate change. CR Sanjiu places

CR Sanjiu encourages subsidiaries to use green biodegradable low-carbon and recyclable packaging materials reduce single- high importance on managing climate-related risks and opportunities establishing a three-tier governance structure consisting of the Board of

use packaging designs and minimize the use of plastic packaging materials to achieve sustainability and reduce packaging waste. Directors the EHS Committee the EHS Management Department and other departments business units and subsidiaries. The Board of Directors

Packaging waste is subject to hazard identification and classified treatment. Packaging waste without hazardous characteristics serves as the decision-making body responsible for approving the climate change strategy and relevant targets. The EHS Committee acts as the

is treated as general industrial solid waste and is recycled and reused as much as possible. Packaging waste with hazardous management body overseeing the overall deployment and coordination of climate change-related work developing and reviewing major policies

characteristics is legally and compliantly disposed of as hazardous waste. and strategic plans and assessing climate-related risks and opportunities. The EHS Management Department along with other departments

business units and subsidiaries forms the execution layer responsible for implementing specific actions to address climate change.Strategy

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

Mitigation and adaptation are the two key strategies for addressing climate change. Mitigation focuses on reducing greenhouse gas emissions and enhancing

The rules for target- carbon sinks while adaptation focuses on preventing and reducing the adverse impacts and risks of climate change. Both are complementary and indispensable. In

??????Year

Number Indicator 2020 2021 2022 2023 2024 setting during the responding to climate change risks we emphasize both mitigation and adaptation continuously enhancing the Company's ability to address climate change in the Name Indicator "14th Five-Year Plan" short medium and long term. We require subsidiaries at all levels to develop "Carbon Peak and Carbon Neutrality" action plans.period

Total Generation (t) 488.96 627.63 835.93 1252.35 1002.75 Mitigation: We aim to optimize the industrial structure and layout focus on resource conservation and efficient utilization optimize energy

All Legally and All Legally and All Legally and All Legally and All Legally and All Hazardous management and usage structure and continuously develop and apply renewable energy. We clearly define energy-saving and carbon-

Hazardous Target Value (t) Compliantly Compliantly Compliantly Compliantly Compliantly Waste Must be reduction goals implement six key actions for carbon peak and integrate energy-saving and carbon-reduction targets into the performance 1 Waste Disposed Disposed Disposed Disposed Disposed Disposed of Legally evaluations of subsidiaries and relevant personnel to strengthen responsibility and accountability. We will further explore effective measures to and in Compliance

Whether the Target is reduce energy consumption and lower greenhouse gas emissions.Achieved Yes Yes Yes Yes Yes

with Regulations.Adaptation: We closely monitor the meteorological department's extreme weather forecasts and warnings anticipate potential natural disasters

Total Generation (t) 32214.45 36250.50 26094.72 134557.22 144261.22 All general caused by extreme weather and respond with preventive measures and risk avoidance strategies. We have developed emergency rescue plans set

General All Legally and All Legally and All Legally and All Legally and All Legally and Industrial Solid up a tiered emergency response system for extreme weather strengthened disaster prevention measures and established emergency rescue teams

2 Industrial Target Value (t) Compliantly Compliantly Compliantly Compliantly Compliantly Waste Must be with regular drills. When extreme weather occurs we will promptly and orderly initiate emergency response plans. Additionally we enhance outdoor

Solid Waste Disposed Disposed Disposed Disposed Disposed Treated Legally and equipment facilities valve pipelines and electrical instrumentation inspections. We also research and cultivate medicinal plant varieties with high

Whether the Target is in Compliance with Yes Yes Yes Yes Yes environmental tolerance and rich medicinal properties promoting their cultivation. We are developing complementary projects using pharmaceutical Achieved Regulations. plants under photovoltaic panels reducing the impact of high temperatures on medicinal herb planting bases.Remarks:

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

W hen there are changes in the production scale and quantity of enterprises included in the statistics the target values of the indicators can be The Company refers to the Shared Socioeconomic Pathways (SSPs) from the Intergovernmental Panel on Climate Change (IPCC) and climate

adjusted accordingly. change scenarios published by the International Energy Agency (IEA) in combination with the Company's dual-carbon strategy. Based on previous

years' scenario analyses we have selected applicable low-emission and high-emission scenarios to assess the impact of key physical and transition

I n 2023 as Kunming Pharmaceutical Group has been included in the statistical scope the corresponding target values of the indicators have been climate risks on the Company's operations. We use the IPCC SSP1-2.6 and SSP5-8.5 scenario models to assess potential physical risks and the IEA

adjusted accordingly.

2050 net-zero emissions scenario and established policies scenario models to evaluate potential transition risks. We use the IPCC SSP1-2.6 and

SSP5-8.5 scenario models to assess potential physical risks and the IEA 2050 net-zero emissions scenario and established policies scenario models

to evaluate potential transition risks.76 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 77

Physical Risks Transition Risks Scenario-Driven Factors The Potential Impact

SSP1-2.6 Low- SSP5-8.5 NZE STEPS

Emission Scenario High-Emission Scenario 2050 Net-Zero Emission Scenario Stated Policies Scenario Stricter Low-Carbon Transition Regulations and Policies: As various carbon reduction regulations and policy requirements are

Driven by the national "dual-carbon" goals carbon promoted and implemented the Company may face increased operational

This scenario simulates This scenario assumes the possibility

reduction policies for the pharmaceutical manufacturing costs to meet compliance requirements such as increased costs for

and impacts of achieving net - zero industry are gradually becoming stricter.This scenario sets an the situation where future purchasing trading quotas due to being included in the carbon trading

ideal situation where economic development greenhouse gas emissions globally by This scenario assumes the development system.global CO emissions mainly relies on energy 2050. In this scenario countries will trends of energy demand and supply 2

reach the net - zero - intensive industries introduce strict policies to promote without considering the introduction of

target around 2050. with almost no policy the application of energy - saving any new policies or measures.constraints. technologies and reduce dependence Low-carbon Technology Development and Application: on fossil fuels. During the Company's transition to low/zero carbon there

is an increased demand for equipment upgrades energy- Cost increases due to the transformation of energy-intensive equipment and

saving and carbon-reducing technology development and the development of energy-saving and emission-reduction technologies.application.Climate Resilience Assessment

Physical Risks: The frequent occurrence of extreme weather events and the rise in average temperatures may impact the

Company's operations.Scenario-Driven Factors The Potential Impact To address transition risks the Company strengthens its carbon emission management system with a focus on promoting innovation and application of energy-saving and carbon-reduction technologies. This includes improving energy efficiency through process

Increasing frequency and intensity of extreme rainfall events. As extreme optimization and intelligent production technologies advancing intelligent upgrades and energy-saving transformations of equipment Frequent Extreme Weather: Frequent extreme rainfall

may lead to surface water accumulation flooding rainfall events become more frequent and intense the likelihood of flooding

to reduce energy losses deepening the recovery and utilization of waste heat (such as condensate air compressor and boiler waste

landslides and other disasters which could negatively and water accumulation continues to rise. Factories located at lower heat) establishing a multi-stage waste energy recovery system and relying on energy information systems for detailed management.impact the Company's normal production operations and elevations are more susceptible to flooding. The risk of instability in production

transportation logistics. operations and supply chain transportation at the Company's production bases increases leading to higher asset loss risks and rising costs.Rise in Average Temperatures: With the rise in average

temperatures the Company will need to invest more The rise in average temperatures may lead to higher operational costs for the factories such as increased electricity consumption and higher infrastructure Climate Change Risk Listresources to ensure and maintain a normal production

operating environment. maintenance expenses.Based on climate change risk scenario analysis and previous years' risk identification we have refined the climate change risk list

relevant to the Company using intuitive experience analysis considering industry characteristics market changes technological

upgrades local policies geographic features extreme weather and other factors. This list has been integrated into CR Sanjiu's overall

risk management system to ensure the implementation of climate change risk management across the entire value chain. The climate

The Company anticipates extreme rainfall and flooding disasters and has developed a series of emergency response plans including change risks we face include both physical risks and transition risks. The major climate change risks and corresponding response

specific plans for flood prevention and lightning protection. Measures such as optimizing drainage systems for flood control installing strategies are shown in the table below.rooftop photovoltaics to reduce indoor temperatures providing heat subsidies and heatstroke emergency rescue for employees and

setting up backup power sources ensure the stability of production. Currently extreme weather events have not caused significant

operational disruptions but the Company continues to strengthen disaster early warning systems and sustainable procurement

strategies with a focus on improving the climate resilience of the value chain. At the raw material cultivation end the Company

promotes climate-adaptive cultivation strictly follows the principle of authentic medicinal herbs selects and breeds high-tolerance

high-quality varieties establishes a germplasm resource protection system and implements a harvesting system that ensures

sufficient medicinal content. These measures systematically reduce the impact of climate factors on the quality of raw materials and

the supply chain.Transition Risks: Under the influence of risks related to low-carbon transformation the Company primarily faces transition risks

arising from different regions intensifying their low-carbon actions. These risks include stricter low-carbon transition policies and the

development and application of low-carbon technologies.78 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 79

CR Sanjiu's 2024 Climate Change Risks and Response Strategies

Risk Type Risk Description Response Strategy Impact Time

Risk Type Risk Description Response Strategy Impact The risk of non-compliance brought about Time by stricter environmental protection Strengthen the study and research of laws regulations Legal Risk Long carbon emission laws regulations standards and specifications and actively communicate

standards and specifications. and contact with government authorities.Term

F ormulate emergency rescue plans for extreme weather

Due to global warming there is an set up graded emergency response measures for extreme The "dual carbon" policy will directly Strengthen the study and research of relevant policies

increase in the instability of the climate weather strengthen disaster prevention and response affect the Company's environmental and regulations maintain good communication with

system. Extreme weather occurs more measures release natural disaster warnings in a timely protection investment and indirectly government authorities be familiar with the carbon

frequently and with greater intensity. manner and make advance predictions and reasonable affect the Company's product layout market trading mechanisms at the national level and

Extreme weather can impact human management and risk avoidance for extreme precipitation production capacity and production scale. in the locations of business units and carry out carbon

health lead to casualties and disrupt and flood disasters. To achieve the temperature control target trading in a timely manner.production and transportation. Factories N ew production bases must be set up in high-lying areas of the Paris Agreement governments at

located in low-lying areas face an Promote the construction experience of the CR Sanjiu that are not easily flooded. home and abroad are gradually improving

Acute Risk increased risk of flooding and the Long Guanlan near-zero-carbon park project in each business the carbon emission trading management

likelihood of logistics disruptions or R equire relevant units to attach great importance to Term unit and promote the construction of near-zero/zero-

the prevention and response work of natural disasters system and the control of the total carbon delays rises. These factors may disrupt the carbon factory areas by business units.Policy Risk emission. The number of enterprises Long

Company's normal operations and lead strengthen the management of key areas and important Promote eligible business units to jointly develop Term

to changes in the value chain including links such as buildings new reconstructed and expanded

included in the list of key carbon emission

projects warehousing and logistics and do a good job in units is increasing the expected cost of

demonstration projects of carbon sequestration in

the supply chain and market demand greenhouse gas emissions is increasing medicinal herb cultivation with relevant professional

which may directly or indirectly result in disaster prevention and avoidance. and the carbon allowances allocated by institutions and study the methodology and standards of

financial losses for the Company. (This is O ptimize the technology of the constant temperature the government are also decreasing year carbon sequestration.the biggest physical risk.) and refrigeration systems in the production workshops to by year. The subordinate key emission Focus on supervising subordinate key carbon emission

improve the refrigeration efficiency. units will increase the purchase of units to strengthen energy-saving and carbon-reduction

carbon allowances or CCER to fulfill their technical transformations and management and reduce

obligations resulting in an increase in the number of key carbon emission units as much as

R esearch the artificial planting techniques of medicinal operating costs. possible.Transition

Physical herbs summarize and formulate technical guidelines promote the authentic cultivation of medicinal herbs and Risk Strengthen carbon emission management training Risk the protection of germplasm sources and select suitable allocate full-time personnel and do a good job in

Human There is a shortage of professional human formulating carbon emission control plans carbon asset

Persistent high-temperature weather environments for cultivation. Resources resources and the Company needs management and carbon trading. Long

may lead to problems such as reduced B uild medicine-photovoltaic complementary projects Risk to invest more human and financial Term

production of cultivation of traditional plant medicinal plants in the shady areas under the resources in carbon reduction. Establish an expert database and cooperate with

Chinese medicinal herbs and difficulties photovoltaic panels to reduce the impact of high Long scientific research institutes associations and third-party

in preservation which may bring about temperatures on the plants. Term institutions to carry out carbon reduction research.an increase in procurement costs and Encourage participation in the formulation of green S elect and promote the cultivation of high-quality

labor costs. manufacturing-related standards application for green traditional Chinese medicine varieties with high manufacturing-related patents and evaluation of green

environmental tolerance and rich medicinal ingredients

Chronic Risk products. Cooperate with professional units to explore adhere to the cultivation and protection of the

There may be additional investment costs and research energy-saving and emission-reduction authenticity of medicinal organisms and their germplasm

for replacing and upgrading backward equipment and promote the upgrading of energy-saving sources.technologies that have a greater negative and emission-reduction equipment.impact on climate change. In addition Vigorously promote intelligent manufacturing. Through

E ncourage energy-saving retrofits of air conditioning Technical there is uncertainty about whether the the integration of informatization and industrialization Long

systems such as the use of more energy-efficient Risk Company can adapt to iterate and use equipment upgrading and scientific scheduling achieve Term

Since the production and storage of drugs permanent magnet synchronous variable frequency low-carbon technologies which requires continuous manufacturing of large varieties and further

require a low-temperature environment centrifugal water storage dual-mode units. Medium a process and the operating costs may improve production capacity and energy use efficiency.in the scenario of climate warming Term increase in the early stage. (This is the more energy will be consumed and the E ncourage the construction of photovoltaic power Continuously implement energy-saving technical biggest transition risk)

operating costs will increase. generation projects on the rooftops of workshops install transformations actively pilot emerging and mature

photovoltaic panels on the rooftops which can reduce the technologies shorten the adaptation period and promote

indoor temperature of the workshops to a certain extent. their application. Improve relevant incentive systems

promote green technologies and products and support

the development of green and low-carbon industries.80 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 81

Risk Type Risk Description Response Strategy Impact Climate Change Risk ManagementTime

C onduct research on consumer survey trends understand The Company follows the internationally recognized COSO risk management framework adapting it to the Company's actual needs

the market's inclination towards low-carbon products and has established a top-down "three lines of defense" risk management system. This system clearly defines the organizational

and assist in product development decisions. structure and division of responsibilities for climate change risk management. The Board of Directors is responsible for overseeing

E ncourage each business unit to actively carry out factory the overall risk management process while the EHS Committee serves as the highest decision-making body for climate change risk

greening build "garden factories" invite communities management matters. The EHS Committee oversees the EHS Management Department which acts as the daily management body

schools and consumer groups to visit the factory and reports to the Board of Directors on the effectiveness of the risk management system and the control of significant risks. The

environment and create a green corporate image. Company uses a "five-step method" to manage climate change risks consisting of risk identification risk assessment risk response

U se green packaging for drugs and require product risk monitoring and risk reporting. The Company implements a closed-loop management model with "risk identification first business

Consumers' preference for low-carbon packaging to meet the requirements of reusability self-management and audit supervision follow-up."

Market Risk products may lead to a shift in consumer Long recyclability and recoverability; promote the business

preferences. Termunit - Jiuxing Printing to research and develop green

packaging materials.P romote green and low-carbon transportation jointly Climate Change Opportunity Management

discuss scientific scheduling with logistics companies

optimize the transportation structure reduce intermediate

links and ineffective transportation; promote alternative We identify climate change opportunities from aspects such as energy resources corporate resilience markets products and services

clean energy sources try to replace fuel vehicles with and analyze their impacts. The details are shown in the table below.new energy vehicles reduce fuel consumption improve

logistics efficiency and help achieve carbon reduction.T he senior management of the Company attaches

Opportunity Type Opportunity Description Opportunity Impact Implementation importance to the management and supervision related Duration

to climate change response and pays attention to the

trends of climate-related policies. By carrying out energy-saving and emission-

reduction technologies and launching an Adopting more efficient production Transition Strengthen communication with investors and consumers methods can effectively reduce

Risk understand their closely concerned dynamics and market intelligent operation system the utilization operating costs increase production Long Term

trends. Under the guidance of the mission of "Caring for efficiency of energy and resources can be capacity and boost revenue.Public Health and Creating a Better Life Together" in effectively improved.addition to providing high-quality and healthy products

the Company is also committed to improving the health Optimizing the transportation structure and

literacy of the whole people and assuming more social Energy and routes to enhance transportation efficiency Using efficient transportation methods Long Term

responsibilities and practicing the "Healthy China" Resource can effectively reduce transportation fuel can lower operating costs.strategy from multiple dimensions. Utilization consumption.Investors have increased their concern Efficiency

for the climate risk response measures D ynamically identify and control climate change and Carrying out waste recycling and reuse to

Reputation of the invested enterprises. Inadequate biodiversity risks improve response measures actively Long a greater extent to achieve reduction and Reducing operating costs. Long Term

Risk response measures may affect the respond to the climate change initiative of the Paris Term resource utilization.Company's reputation in the investment Agreement and actively participate in the global

market. governance of climate change. Thoroughly implement the Implementing reclaimed water reuse

national dual-carbon strategy and jointly fulfill the main increasing the number of water recycling Reducing operating costs. Long Term

responsibility of ecological environment protection with times and reducing water consumption.upstream and downstream enterprises.By investing in renewable energy

C arry out publicity activities on World Environment Day gradually increasing the proportion of

Energy Conservation Publicity Week National Low Carbon Developing and applying renewable energy: renewable energy utilization reducing

Day etc. actively participate in relevant publicity and Increasing the development and utilization the use of fossil fuels it is possible

training activities organized by government departments of renewable energy such as green power to optimize the energy structure

and professional associations. Timely disclose the trading photovoltaic development and significantly reduce greenhouse gas Long Term

Company's climate change response information on

Energy biomass energy utilization can reduce emissions lower the risk of rising the Company's official website or with the help of Sina

Substitution production costs or bring in profits. fossil fuel prices in the future reduce Finance and social media etc. and show the good image dependence on fossil fuels and cut

of CR Sanjiu's green and low-carbon development to the operating costs.society.Promoting the construction experience of Reducing the risk of greenhouse

near-zero/zero-carbon parks and attempting gas emissions thereby reducing

to develop CCER projects. the sensitivity to changes in carbon

Long Term

trading prices.82 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 83

Opportunity Type Opportunity Description Opportunity Impact Implementation Adherence to Energy Conservation and Carbon ReductionDuration

Improving the ability to manage climate Energy-Saving and Carbon Reduction as the Path to Sustainable Development. Energy-saving and carbon reduction are essential to

change risks seeking green technologies achieving sustainable development. We always prioritize improving energy efficiency as a strategic focus continuously advancing the

increasing production efficiency optimizing

production processes and developing new Enhancing the enterprise's resilience

research development and application of energy-saving technologies. CR Sanjiu has formulated systems such as the Management

products are all within the scope of future attracting more investors and Measures for Energy and Resource Conservation and the CR Sanjiu's Management Measures for Carbon Emissions to regulate and

development considerations thus diversifying customers and providing funds for

Long Term

guide energy-saving and carbon-reduction efforts. The Company has established an energy and resource management team to

the Company's products and marketing business growth. monitor and analyze energy consumption data and the implementation of energy-saving work across subsidiaries in real-time.Resilience activities and enhancing the enterprise's Through measures such as upgrading key energy-consuming equipment optimizing production processes and continuously

resilience. developing and applying renewable energy CR Sanjiu conducted multiple approaches to achieve energy-saving and carbon reduction

Strengthening the adaptability of goals. In 2024 the energy usage efficiency indicators and greenhouse gas emission targets have been achieved with greenhouse gas Developing a sustainable traditional Chinese

medicine industry and improving the medicinal biological cultivation bases

emissions reduced by 19.65% compared to 2023. The details are shown in the table below.adaptability of medicinal biological cultivation helps reduce losses caused by climate Long Term

bases are conducive to the Company's ability risks thus minimizing the impact on

to resist climate change risks. procurement costs and the stability of the supply chain.Policy subsidies: The Company actively CR Sanjiu Greenhouse Gas Emission Reduction from 2020 to 2024

responds to climate change incentive policies Utilizing channels such as renewable

Market including financial subsidies tax incentives energy and climate change incentive The rules for Target-loan preferences and quota systems. The policies may bring additional benefits Long Term ????????Year Change from

Company may obtain additional subsidies or or subsidies to the Company. Number Pollutant 2020 2021 2022 2023 2024 the previous

setting During the

Indicator "14th Five-Year Plan"

economic support from these policies. year in 2024 Period

Developing low-carbon products: Promoting Developing low-carbon products Emission Intensity the development of green product businesses (tCO e/ RMB 10000) 0.1649 0.1603 0.1627 0.1451 0.1265

Taking the adjusted

2 emission intensity in

continuously innovating and developing is beneficial for enhancing the 2020 (0.2558 tCO2e/

new low-carbon products can effectively Company's reputation attracting more Long Term CO2(Including Target Value (tCO2e/ 1 0.2558 0.2507 0.2456 0.2405 0.2353 Decrease RMB 10000) as the

improve the industry competitive position of consumers increasing market share Scope 1 and 2) RMB 10000) 13.58%and enhancing competitiveness. benchmark it is

Products and enterprises or organizations. Whether the Target is reduced by 2% year

Services Shift in consumer preferences: As consumers Achieved

Yes Yes Yes Yes Yes

by year

pay increasing attention to environmental Providing low-carbon products or Actual Value (tons of protection and sustainable development it services to cater to the growing market Long Term Comprehensive standard coal/ RMB —— 0.0425 0.0428 0.0497 0.0456 Taking the adjusted is necessary to launch green and low-carbon Energy 10000) value in 2020 (0.0662

products to adapt to changes in consumer demand may increase sales revenue. Consumption Target Value (tons of Decrease tons of standard preferences. 2 per RMB 10000

of Output Value standard coal/ RMB —— 0.0649 0.0636 0.0622 0.0609 8.25%

coal/ RMB 10000) as

10000) the benchmark it is (Comparable reduced by 2% year

Prices) Whether the Target is —— Yes Yes Yes Yes by year.Case Launch of the "Mushroom IoT AI Cloud Smart Control" System Achieved

Actual Value (tons of

Comprehensive standard coal/RMB —— 0.0879 0.0876 0.1100 0.0981 Taking the adjusted

CR Sanjiu has applied the "Mushroom IoT AI Cloud Smart Control" system in the field of industrial AI. This system deeply Energy 10000) value in 2020 (0.1276

integrates technologies such as the Internet of Things (IoT) edge computing and AI. By collecting operational parameters Consumption Target Value (tons of Decrease tons of standard

from energy-consuming equipment and facilities like air conditioners refrigeration units vacuum pumps and air 3 per RMB 10000 standard coal/ RMB —— 0.1256 0.1235 0.1215 0.1194 10.82% coal/ RMB 10000) as

compressors it provides on-demand precise energy supply and online adjustments. This results in efficient operations and of Added Value

(Comparable 10000)

the benchmark it is

energy consumption savings. The project achieves a comprehensive energy-saving rate of over 15% with annual energy reduced by 1.6% year Whether the Target is

savings of approximately 544000 RMB. It significantly enhances labor efficiency and was awarded the "Dingge Award" for Prices) by year.Achieved —— Yes Yes Yes Yes

Digital Transformation Pioneers - 2024 Green Development Enterprise Award. Remarks:

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

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

been adjusted accordingly.84 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 85

Implementing the "Six Major Actions for Carbon Peak" Green Energy Development and Conducting Publicity and Education

Substitution

Through the active promotion and construction of distributed In order to widely spread Xi Jinping's ecological civilization thoughts firmly establish and practice the concept that "lucid waters

photovoltaic power generation projects the use of biomass energy to and lush mountains are invaluable assets" promote ecological culture and popularize ecological civilization CR Sanjiu mobilizes its

replace fossil fuels and participation in green electricity trading such employees to actively participate in the great practice of building a beautiful China and achieving modernization with harmonious

as photovoltaic hydropower and wind power CR Sanjiu is increasing coexistence between humans and nature. The Company encourages its employees to become active communicators and exemplary

the share of renewable energy and reducing dependence on traditional practitioners of ecological civilization showcasing CR Sanjiu's image of green high-quality development. In 2024 CR Sanjiu's

energy sources. In 2024 CR Sanjiu's total installed photovoltaic headquarters and subsidiaries at all levels focusing on themes such as "Comprehensively Promoting the Construction of Beautiful

capacity reached 20.1047 MWp an increase of 97.80% compared to China" "Green Transformation Energy-Saving Initiatives" and "Green Low-Carbon Beautiful China" actively carried out diversified

2023. The photovoltaic system generated a total of 10.784125 million publicity and educational activities.

kWh of green electricity with 92.90% of the green electricity generated

being self-consumed for production and office use. CR Sanjiu also

purchased 16.68 million kWh of renewable energy through green CR Jinchan Green Power Kunzhongyao Green Power Purchase Certificates Purchase Certificatese

certificates and 2 million kWh of green electricity.Efficient Energy-Saving Carbon-Reducing Technology and Equipment Application:

In 2024 CR Sanjiu organized subsidiaries at all levels to fully assess the types quantities and energy efficiency distribution of key

energy-consuming equipment. The Company compiled the "CR Sanjiu Key Energy-Consuming Product Equipment Upgrade and

Renovation Summary Report" and focused on upgrading low-efficiency boilers and electrical equipment. Short medium and long-

term plans were also developed to guide the upgrade and renovation of key energy-consuming equipment across subsidiaries.Building a Green Low-Carbon Industry Chain:

CR Sanjiu has formulated systems such as the "Supplier Quality Management Procedures" and the "Material Procurement

and Supply Management Procedures" continuously strengthening supply chain management and supervision. The Company 2024 World Environment Day Themed Activity Photos

optimized supplier selection standards and conducted environmental and energy management compliance assessments for

suppliers. It increased the weight of environmental and energy management criteria in supplier evaluations guiding suppliers to

jointly pursue a carbon-neutral future.Promoting the Innovation and Application of Low-Carbon Zero-Carbon and Carbon-Negative Technologies:

Through increased energy-saving and carbon-reduction efforts the Company has carried out waste heat recovery constructed

water/ice storage cooling systems upgraded lighting and intelligent control systems introduced MVR evaporation concentration

systems eliminated outdated production capacity optimized process technologies and improved energy management

measures. These actions effectively improve energy utilization efficiency.Building Carbon Neutral Demonstration Projects and Parks:

The Company continues to promote the construction of near-zero carbon parks in business units such as CR Jiuxin CR Sanjiu

(Chenzhou) and CR Sanjiu (Zaozhuang) creating new models for green and low-carbon development in the pharmaceutical

industry. In 2024 the near-zero carbon park project built by CR Jiuxin was successfully included in the "Fourth Batch of Pilot

Projects for Near-Zero Carbon Emission Zones in Shenzhen." By building distributed photovoltaic power generation and adopting 2024 National Low Carbon Day Sharing World Environment Day Promotional Activity Image

energy-saving measures the CR Jiuxin park has become a demonstration benchmark with pharmaceutical industry characteristics

for near-zero carbon emissions.Accelerating the Improvement of the Carbon Asset Management System:

CR Sanjiu is actively establishing and improving its carbon asset management system has formulated systematic regulations for

carbon emission management and is comprehensively advancing its carbon emission management efforts. Each business unit

has formulated its own regulations for carbon emission management to standardize such management. The Company regularly

collects monitors and calculates carbon emission data engages professional institutions either directly or through mandates

from government authorities to conduct carbon emission audits ensuring accurate and transparent carbon emission information.86 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 87

Ecological Balance and Green Building CR Sanjiu's 2024 Climate Change Risks and Response Strategies

Natural ecological balance is the cornerstone of maintaining the Earth's life system and a prerequisite for human sustainable development. We

are aware of the importance of protecting the ecological environment and actively implement an environmentally friendly business model. Biodiversity Risks Corresponding strategies

By enhancing biodiversity conservation promoting ecological restoration and advocating green public welfare we strive to achieve harmony

between humans and nature.S trictly abide by relevant national laws and regulations on endangered protected

medicinal organisms and prohibit the use of wild endangered protected medicinal

Biodiversity Conservation organisms as ingredients in medicine.The insuf f ic ient resources of Research the cultivation techniques of medicinal herb seedlings and artificial planting

CR Sanjiu attaches great importance to biodiversity protection and We dynamically identify and manage biodiversity risks assess the endangered medicinal herbs the summarize them into technical guidelines vigorously promote the construction of

actively responds to the Kunming-Montreal Global Biodiversity impact of our business activities on natural ecosystems and avoid annual decrease of wild medicinal artificial planting bases for Chinese medicinal materials adhere to the cultivation and

biological resources the raw material protection of the authenticity of medicinal organisms and their germplasm resources Framework. The Company strictly complies with national laws negative impacts on biodiversity. The Company is committed and promote the sustainable development of raw materials.and regulations such as the Wild Plant Protection Regulations of to preserving biodiversity by adhering to the authenticity of shortage crisis faced by traditional

the People's Republic of China and the Wild Animal Protection medicinal plants and germplasm cultivation striving to maintain Chinese medicine varieties and the Build a demonstration project of forestry carbon sinks for medicinal materials increasing the

Law of the People's Republic of China as well as international ecosystem diversity promote biodiversity restoration and support damage to biodiversity. Company's carbon assets while promoting the sustainable development of medicinal materials.conventions like the Convention on Biological Diversity and the the healthy and orderly development of the traditional Chinese Build a zero-carbon demonstration project combining medicine cultivation and

Convention on International Trade in Endangered Species of medicine industry. Our goal is to collectively move toward a vision photovoltaic power generation.Wild Fauna and Flora." CR Sanjiu has formulated the CR Sanjiu of harmonious coexistence with nature. P ay attention to and participate in ecological protection and restoration actions and meetings.Environmental Protection Policy which clearly commits to

protecting biodiversity and ensuring zero deforestation.Dynamically identify and manage biodiversity risks Strengthen the protection of medicinal biodiversity actively participate in global governance to address climate change and the deterioration of biodiversity and

Global warming the frequent dynamically identify and manage the risks of climate change and biodiversity.The Company dynamically identifies risks related to biodiversity formulates and vigorously implements measures for biodiversity occurrence of extreme weather such

conservation. The main identified risks and corresponding strategies are shown in the table below. as heat drought and heavy rain. Both

S elect and breed high-quality medicinal herb varieties with high environmental tolerance

wild and artificially planted medicinal and rich medicinal iingredients and promote their cultivation. Adhere to the cultivation

organisms face the risk of difficult and protection of the authenticity of medicinal organisms and their germplasm resources.survival due to environmental changes Medicinal organisms in the planting base must reach a sufficient growth period before they

and the biodiversity of medicinal can be dug up to ensure they have sufficient medicinal ingredients.organisms may degrade or even be Strictly comply with national biodiversity protection policies. Prohibit setting up operation

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

biodiversity hotspots ecologically sensitive areas ecological protection red line areas and

important biological protection habitats announced internationally and nationally.In a few factory areas there is

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

densely in the internal corners and the "garden factories". Invite nearby communities schools and consumer groups to visit the

management is lax so the ecological factory area environment and supervise the ecological environment of the factory area.environment needs to be improved.88 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 89

Ensuring the Authenticity and Quality of Raw Materials

Impact of Production Operation and Products on Biodiversity and Action Strategies

Through order-based procurement in authentic production areas strict implementation of raw material quality audits and the establishment or

Impact of the Company's Production joint construction of medicinal plant cultivation bases the Company has implemented a rigorous procurement quality management system. From Impact Type Services and Products on Biodiversity Action Strategies the source we ensure that all medicinal raw materials are legally sourced and of high quality preventing the entry of unidentified medicinal herbs

into the production process. We prohibit the use of medicinal wild endangered species and require suppliers to rationally develop medicinal plant

resources while protecting biodiversity avoiding the overharvesting of wild medicinal herbs that could lead to the loss of biodiversity.F or Chinese medicinal herbs purchased from the market only purchase

those with clear legal and compliant sources. Require suppliers to develop

resources reasonably based on the protection of medicinal biological

resources to avoid biodiversity loss caused by over - excavation of wild Building Medicinal Plant Cultivation Bases and Protecting Germplasm Resources

Chinese medicinal herbs. Medicinal plant cultivation bases are carefully selected based on suitable planting environments historical planting experience and

F ormulate technical specifications for the cultivation of medicinal herb

Most of the Company's products are avoidance of protected areas. Through industry-university-research cooperation we have established seedling experimental zones strictly seedlings and artificial planting. Promote the standardized cultivation of

Chinese patent medicines with raw controlling the quality of medicinal plant seedlings preventing issues such as the weakening of species or the invasion of foreign species. We Chinese medicinal herbs through self - built or cooperative planting bases.materials being medicinal organisms actively promote the construction of medicinal herb cultivation demonstration bases in regions such as Guangdong Jiangxi and Yunnan. Strengthen the protection of germplasm resources of authentic medicinal

sourced from market procurement and herbs and increase the proportion of raw material supply from planting Organic fertilizers are used during the growth of medicinal plants to protect soil and vegetation. Medicinal plants in the cultivation base must

medicinal herb planting bases. When the bases. Harvest medicinal herbs strictly in accordance with their natural reach sufficient growth years before they can be harvested ensuring that they contain adequate medicinal components.Negative sources of medicinal herbs purchased growth cycles to ensure that the effective components meet the standards.Impact from the market are unclear some raw

materials may be derived from wild T he Company focuses on the dynamic management of sustainability risks

medicinal organisms. The extent of in business partners and the supply chain protects natural resources Promoting the Sustainable Development of Raw Materials

wild medicinal organism excavation is maintains ecosystem diversity strictly complies with national biodiversity

unknown which may have a negative protection policies and prohibits setting up operation sites carrying out Leveraging platforms such as the Company's Research and Development Center for Chinese Medicine Resources we actively conduct

impact on biodiversity. supply chain activities and conducting business activities with partners in research on medicinal plant germplasm resources cultivation techniques production processing methods and standards full-process

biodiversity hotspots ecologically sensitive areas ecological protection information traceability and comprehensive utilization of medicinal resources. This ensures the quality of medicinal herbs and

red line areas and important biological protection habitats announced maximizes the utilization of raw materials maintaining the balance of medicinal resources and preventing their loss degradation and

internationally and nationally. overexploitation. These efforts guarantee the sustainable use of medicinal resources and protect medicinal biodiversity.Strictly abide by relevant national laws and regulations on endangered

protected medicinal organisms and prohibit the use of wild endangered

protected medicinal organisms as ingredients in medicine.Building the Medicinal Plant-Photovoltaic Complement Zero-Carbon Demonstration Projects

We utilize the different light wavelengths required for photosynthesis by medicinal plants and photovoltaic power generation achieving both power

Supported by platforms such as the Institute generation and planting simultaneously. Different medicinal plants are grown based on their light requirements and different photovoltaic panel

of Traditional Chinese Medicine Resources configurations are designed and installed to meet the light requirements for photosynthesis. This not only avoids occupying additional land but also

at the headquarters R & D center actively enhances the overall efficiency of land use. By the end of 2024 six medicinal plant-photovoltaic complementary projects including those in Yimen

research the cultivation techniques of Luotai Old and Yimen Xiaoyu Shisha in Yunnan have been built with a total installed capacity of 610 MWp. These projects provide approximately 222.65

medicinal herb seedlings and artificial million kWh of green electricity annually helping reduce carbon emissions by approximately 1237934 tCO2e per year.planting summarize them into technical

guidelines and vigorously promote the In the face of global warming with the frequent occurrence of extreme

construction of artificial planting bases for weather events such as heatwaves droughts and heavy rainfall medicinal

Chinese medicinal materials. plants are at risk of not surviving due to environmental changes. The Company Building Chinese Medicine Forestry Carbon Sink Demonstration Projects

Using medicinal herb raw materials with will strengthen the research and development of high-quality medicinal

Positive clear sources increasing the proportion plant varieties with good environmental tolerance and sufficient medicinal Artificially cultivating medicinal plants to create Chinese medicine forestry helps reduce the harvesting of wild medicinal plants protect

Impact of Chinese medicinal herb supply from content and promote their cultivation. At the same time we will reinforce the endangered species restore natural biodiversity and create a new ecological model of artificial Chinese medicine forestry. This approach not

planting bases adhering to the cultivation protection of authentic germplasm sources. Medicinal plants in the cultivation only promotes the sustainable development of medicinal plants but also increases potential carbon assets.and protection of the authenticity of base must reach sufficient growth years before being harvested to ensure they

medicinal organisms and their germplasm contain adequate medicinal components and prevent resource wastage at the

resources promoting the sustainable source.development of raw materials reducing Actively Promoting Forest Protection

the excavation of wild medicinal organisms

and prohibiting the use of wild endangered In compliance with the Forest Law of the People's Republic of China the Implementation Regulations of the Forest Law of the People's

protected medicinal organisms as Republic of China and the Regulations on Returning Farmland to Forests to protect forest resources. We are committed to sustainably and

ingredients in medicine which helps to dynamically managing natural resources and raw materials in the supply chain and tracing the sources of raw materials to ensure they are

restore biodiversity. legal compliant and free from deforestation risks. Medicinal plants that have not reached the appropriate growth age in cultivation bases

are not harvested. While harvesting artificially cultivated medicinal plants we also cultivate and plant more medicinal plant seedlings avoid

using office supplies and equipment made from wood materials. We promote paperless offices and recycle waste paper and encourage

employees to actively participate in afforestation activities. We actively carry out greening projects within factory areas and create "garden

factories." We also focus on and participate in global ecological protection and restoration initiatives and meetings.90 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 91

Resource Recycling Promoting Green Living

CR Sanjiu is committed to creating a production model with efficient resource utilization and actively promotes resource recycling. The Company actively advocates the concept of green office practices promoting paperless office green procurement energy-saving

We strengthen the reduction at the source and classification recycling of general solid waste exploring new pathways for recycling measures and other initiatives to create a simple moderate and green low-carbon office environment. We encourage employees to

and achieving efficient circular utilization of resources. In 2024 the proportion of renewable energy in the Company's total energy start with themselves practicing eco-friendly behaviors such as green commuting waste sorting water and electricity conservation.consumption increased to 6.33%. Through activities such as green and low-carbon themed events and ecological and environmental knowledge promotion we guide

employees to integrate the concept of green and low-carbon living into their daily lives.Comprehensive Utilization of Traditional Chinese Medicine Residue: Key Performance

The traditional Chinese medicine residue generated during production is used as raw material. After dehydration and

drying it undergoes pyrolysis and gasification to be converted into biomass gas. This biomass gas is then burned in a Number of people trained in Number of people covered by Number of participations Environmental protection

gas boiler to generate steam for production. Alternatively microbial fermentation technology is used to ferment the environmental protection : environmental protection training : in environmental public training hours :

medicinal herb residues producing organic fertilizer for soil cultivation. Another method involves using the residue welfare activities:

as raw material drying it and then burning it in a biomass boiler to produce steam for external heating.

17380 person-times 10942 96 times 273214 hours

Number of Rmeet video conferences: Cumulative meeting duration: Number of partici- Number of cloud

More than More than pants: More than documents created:

Industrial Wastewater Reuse: 30400 sessions 18.1615 million minutes 291858 person-times 81882

The Company reuses a portion of treated industrial wastewater for the exhaust gas treatment spray tower

replenishment collects rainwater for plant irrigation within the factory area and reuses boiler condensate water

for boiler feedwater. Wastewater generated by purification equipment is used for replenishing the cooling tower. By

maximizing the utilization of water resources and reducing wastewater discharge the Company achieves an eco-

friendly approach to its production and operational activities.Promote The Company has been vigorously promoting informatization construction implementing the OA system

Paperless Office Rmeet video conferences and online training. Most office processes can be completed through the

Work. informatization system which improves work efficiency. It advocates paperless office work reducing the use of paper and the generation of wastepaper. Office documents are revised and transmitted via email.Strengthen the Standardize the procurement requisition and usage standards of office supplies to extend their service

Case CR Sanjiu (Chenzhou) Conducts Resource Utilization of Medicinal Herb Residue Management of life. Try to avoid using office supplies and Improve the Office Environment. and equipment made of wood

Office Supplies. materials. Actively carry out greening in the factory area and build a "garden factory" to provide employees with a good green office environment.CR Sanjiu (Chenzhou) has established a comprehensive energy station within its park to treat and recycle medicinal herb

residue generated during production. By converting the herb residue waste into energy the Company reduces energy costs

achieving cost reduction and efficiency improvement. This project can reduce carbon emissions by approximately 9100 tons Energy Turn off office electronics such as computers printers and fax machines promptly after work to reduce

annually and will continue to optimize its energy structure in subsequent operations further reducing carbon emissions. Conservation electricity waste. In areas such as corridors and passages where lighting needs are low replace traditional

in Office and lighting with energy-efficient lamps. Property management personnel will turn off lights after working hours or

Daily Life. set the switches to sound-controlled switches to automatically manage them minimizing unnecessary waste as much as possible.2024 Sustainability and ESG Report 93

Unite as One

Sharing Responsibility

for a Harmonious Socie-

ty

Governance

CR Sanjiu has established a governance structure centered on the Board

of Directors reinforced by a Sustainability Task Force. This framework

has built a closed-loop mechanism of "Decision-Making-Execution-

Monitoring". It comprehensively covers social issues such as employee

rights and interests protection supply chain responsible governance

and social value co-creation: internally it builds an employee growth

mechanism externally it strengthens the ESG compliance management

in the whole life cycle of suppliers and links rural revitalization and

public welfare to form an ecosystem of social responsibility. Through

the hierarchy of authority and responsibility dynamic assessment

and stakeholder collaboration we have achieved the comprehensive

implementation of employee care and health training management

supplier management social charity rural revitalization etc. from top to

bottom.Strategy

CR Sanjiu fully adhering to the concept of "People-oriented Win-win

Responsibility" the Company continues to deepen the construction

of employee health care system and career development channels

and improve the multi-level training mechanism to enhance the

comprehensive ability of employees. Meanwhile the Company actively

promotes the sustainable development of the supply chain and ensures

the synergy and efficiency of the industry chain by strengthening the

compliance management of suppliers and building social responsibility. In

the field of social welfare we focus on rural revitalization and philanthropy

explore innovative modes of assistance build public welfare brands with

social influence and help realize the co-creation and sharing of corporate

and social values.SDGs94 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 95

Risk and Opportunity Management

CR Sanjiu incorporates risks related to social issues into its approval. The Company follows up on the management and

comprehensive risk management system and comprehensively control of risks related to social issues in a timely manner and

identifies risks related to social issues through questionnaires reports the progress of risks to the Board of Directors. At the same

and on-operational site interviews. Based on the likelihood of risk time the Company formulates special development plans for Targets

occurrence and the degree of impact the risk priority is defined social charities rural revitalization and other opportunities to

according to the risk level and the urgency of management ensure the effective allocation of resources and the successful

improvement and submitted to the Board of Directors for achievement of goals.Type Medium and Long-term Targets Progress towards 2024 Targets

Risk/Opportunity Potential Impact Response Strategy Improve the talent selection and appointment mechanism build a multi- Continuously promoting the diversification of

path career development platform create an innovative talent training talent the proportion of employees with different

Employee Growth base to lead the development of the industry continue to improve the backgrounds has steadily increased and employee

temperature strength and depth of employee care work and promote care satisfaction survey reaches over 84%.Employee skill iteration lags technological changes in Strengthen occupational health and safety management provide the common growth of employees and the organization.Health and safety risks the industry which may lead to insufficient product necessary protective measures and training and create a safe and innovation and quality control loopholes weakening healthy working environment for employees in an all-round and

market competitiveness. multi-level manner.To create a future-oriented lifelong learning system cultivate leading

Training Management talents in the pharmaceutical and healthcare industry and build an Annual per capita training hours reached 30.32.innovative talent training base to lead the development of the industry.If the Company fails to provide effective training and Establish a systematic training and development system provide

development opportunities it may result in employees' differentiated and hierarchical training planning to meet the Build a sustainable supply chain network lead the development of 100 per cent compliance with supplier sustainability

Training and professional competence not being able to meet the job growth needs of different classes and types of employees; and Supplier Management standards for the Chinese medicine industry chain and achieve full assessments.development risks requirements which may affect the competitiveness of set up a management channel and professional/technical dual- coverage of social responsibility in the end-to-end value chain.the Company. channel promotion mechanism to help choose the appropriate

development path.By carrying out various social welfare and charitable activities such as Annual social charitable donations amounted to

Social Charity disaster relief and assistance donating money to schools and public 4.4361 million RMB.welfare we help social development build a better home and show the

responsibility of the central enterprise.Supply chain Non-compliance of suppliers leading to production Strengthen supplier access assessment conduct training on

compliance risk disruption or reputational damage sustainable development and establish incentives for long-term cooperative suppliers.Comprehensively promote the revitalization of the countryside adhere to Around industrial revitalization talent revitalization

the protection and development of Chinese herbal medicines optimize cultural revitalization and other aspects of CR Hope

the industrial layout and use model innovation technological innovation Town work selected two rotating mayor of Jinzhai

Rural Revitalization and other means to develop the Chinese herbal medicines industry into an and Tonghua town to carry out planting assistance

industry that helps farmers to increase their income increases the efficiency and consumption assistance to help revitalize the

of agriculture and enhances the color of the countryside. construction of the countryside in Guangchang County

Public Communication Recognition of enterprise product promotion process may Improve the public communication mechanism enrich the Haiyuan County Qingliu County.Risk be affected restricting market expansion and business communication mode and improve the public recognition and development reputation of the enterprise's products and services

Creating an open industrial innovation platform to promote the P articipation in the formation of 1 international

modernization and transformation of traditional medicine. standard

Driving the Industry P articipated in the preparation of 5 national

Social Charity Contribute to the enhancement of the social image of Actively participate in social charitable activities innovate rural standards

Rural Revitalization enterprises and promote the harmonious development of revitalization models increase resource investment and create a

Opportunity enterprises and society distinctive brand of assistance P articipated in the preparation of 8 industry

standards.96 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 97

Healthy Companions Happy Employees

CR Sanjiu always believe that employees are the core driving force of enterprise development and takes "people-oriented" as the value of 46.4% 28.2% 40.2% 23.4%

the enterprise and actively implements a series of measures to create a fair harmonious and caring working environment for employees.The Company carries out employee satisfaction surveys every year. Our satisfaction questionnaire covers the dimensions of job satisfaction Employee Employee Employee

significance happiness and pressure and comprehensively understands the voices from employees. In 2024 the satisfaction survey of CR Gender education age

Sanjiu's employee care satisfaction survey reaches over 84%. Structure structure structure

53.6%25.2%6.4%68.8%8%

Protecting Employee Rights and Interests 10733 male employees Master's degree and above 1289 13735 persons aged 30-50

9298 female employees Bachelor's degree 8054 4684 aged 29 years old and below

We strictly comply with relevant national laws and regulations to ensure that our business activities are consistent with the Ten Principles College 5641 1612 persons aged 51 and over

of the United Nations Global Compact (UNGC) and the United Nations Guiding Principles on Business and Human Rights and that we High school and below 5047

effectively safeguard the basic rights and interests of our employees to ensure that each employee works in an equal and fair environment.Key Performance

We strictly abide by the Labor Law of the People's Republic of China the Regulations on the Prohibition of Child Labor and other

relevant national laws and regulations and protect the rights of employees in accordance with the law. We sign formal labor

Protection contracts with our employees set reasonable working hours and leave systems and fully protect the legitimate rights and interests

of basic

100 86 Total number of employees of our employees from being infringed upon. We have formulated comprehensive salary and employment policies to ensure the rights and fairness and transparency of the recruitment and promotion process. We have defined our anti-discrimination and anti-harassment % % 20031 interests requirements in our Code of Business Conduct and we have adopted a "zero tolerance" attitude toward discrimination or harassment due to differences in race ethnicity religious beliefs gender social identity status physical health sexual orientation labor contract signing rate coverage of unionized employees and other factors.

The Company has always adhered to the principle of equal employment the values of fairness justice and non-discrimination

Adherence throughout the entire process of employee recruitment and talent management. In the recruitment process the Company strictly

to equal adheres to the anti-discrimination guidelines and resolutely eliminates any employment discrimination based on factors such as

2322 Percentage of female managers 38.48 employment gender age ethnicity geography religious beliefs to ensure that every job seeker can participate in the competition in an equal environment and enjoy fair employment opportunities. %

of number of new employees 36.7 % of women at junior management level

Strengthening The Company actively promotes the democratic management of enterprises constantly improves the construction of trade

democratic union organizations guides business units to set up trade union organizations and supervises the renewal and addition of

management trade unions. It organizes and convenes staff congresses to consider and resolve issues of common concern to employees.

16.67 31.05 44.2 Revised and released the CR Sanjiu Recruitment and Allocation System and CR Sanjiu Internal Recommendation Management % % % Fair and Measures to clarify that both external recruitment and internal competition follow the principles of openness fairness and

compliant meritocracy so as to systematically guarantee the introduction of high-quality talents provide equal competition opportunities of women at senior management level women at managerial level in revenue- women in STEM-related positions for talents and promote the reasonable mobility of talents. At the same time we have established a regular compliance review

generating functional positions recruitment mechanism for recruitment activities and arranged a professional team to monitor the recruitment policies and procedures to

ensure that follow laws regulations and industry norms and to avoid legal risks.98 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 99

Keeping Employees Safe

Case "Safe Date Knowledge" campaign for safety month

CR Sanjiu has always regarded the occupational health and safety of its employees as an important cornerstone of corporate development.The Company continues to improve the occupational health and safety management system and promotes the construction of "healthy In 2024 CR Sanjiu (Zaozhuang) responded to the Company's instructions closely focusing on the theme of "everyone talks about

enterprise" and "standardized production safety enterprise" steadily with higher standards and stricter requirements. safety everyone knows how to respond to emergencies - smooth life channels" and carried out a series of "Safe Date Knowledge"

activities during the safety production month to improve the Company's safety management level and employee safety awareness

and prevent safety accidents.Safe production management

We strictly abide by the Work Safety Law of the People's Republic of China and other laws and regulations and have formulated systems

such as the CR Sanjiu EHSQ Responsibility Management Approach continuously improving the work safety management system realizing

comprehensive coverage from the system level to the implementation level and safeguarding the rights and interests of employees in work

safety in all aspects so as to ensure that the production and operation activities of the Company are carried out in an orderly manner in a Occupational health management

safe and compliant environment.We continue to standardize the process of occupational health management focusing on the theme of "Happy Work Healthy Life" and actively

organize various health activities to protect the physical and mental health of employees and create a healthy and orderly working environment.Key Performance

Key Performance

Total investment in production safety Number of full-time safety managers

Occupational health examination rate Employee-specific occupational disease checkups

RMB 58310000 299 16

business units certified to ISO 45001 100 % 4523 person-times

Emergency drills Care and protection for special groups

CR Sanjiu has formulated the Comprehensive Emergency Response Plan for Production Safety CR Sanjiu focuses on the occupational health of special employee groups equips women with

Accidents and other systems and actively organized various units to carry out emergency drills special protective clothing provides disabled employees with auxiliary equipment transfers front-

to improve the ability of personnel to deal with unexpected accidents and incidents. In 2024 CR line pregnant women and nursing mothers away from dangerous positions sets up rest rooms

Sanjiu units carried out number of 617 EHS emergency drills with 16687 EHS emergency drill mother and baby rooms distributes health books on pregnancy and equips living electrical

attendance. appliances and other operational sites to ensure that their working environment is safe and

comfortable.Hidden dangers inspection

Occupational health education and training CR Golden Toad Occupational Health and

Key Performance Safety Management System Certificate

We organized and carried out various special inspections such as special inspection and remedial

actions for hidden dangers identified occupational health and safety risks continuously supervise Regular occupational health and safety education and training is carried out to ensure that

the rectification of EHS dangers identified in inspections with the rectification rate of dangers Organization of employees master the use of protective equipment familiarize themselves with job risks and

reaching 99.9% in 2024; with 650100 hours of employee safety training and 34711 hours of related emergency measures enhance their self-protection abilities and reduce occupational health risks.parties safety training. 2395

Safety production training safety education training sessions Physical examination monitoring and management

For all employees we carry out safety education activities with rich forms and comprehensive The Company carries out physical examinations for employees in positions involving occupational

contents. The activities cover systematic safety skills training accident warning education disease hazards requires compliance with the wearing of protective equipment and strengthens

combined with actual cases etc. and strive to make safety awareness deeply rooted in people's 100 % inspections; it regularly monitors harmful factors controls pollution from the source transmission

hearts through diversified learning experiences. pathways and receptor protection and purchases low-noise and low-pollution equipment to

coverage of safety training protect the occupational health of employees in all aspects. CR Sanjiu (Ya'an) Occupational Health and

Safety Management System Certificate100 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 101

Robust Benefits System Performance appraisal system

We have established a compensation management system centered on "performance competence fairness and competition" and The Company combines safeguard and incentive takes into account internal fairness and market competitiveness relies on management

determined the compensation level by combining the value of the position personal competence and performance results to ensure internal methods to improve human efficiency in stock business provides incentives for incremental business explores medium- and long-term incentive

fairness and external competitiveness. On the basis of guaranteeing the timely payment of basic benefits we provide a wide range of non- mechanisms for key positions especially R&D and technology innovation business and realizes the "consistency of responsibility and interest

compensation benefits for all employees of the Company and build an incentive mechanism that combines short medium- and long-term capability and value performance and benefit" in staff salary distribution and to promote the implementation of the Company's strategic initiatives

incentives to support business development and talent retention through a differentiated and phased incentive design that strengthens the enhancement of organizational capacity and corporate culture.value-oriented approach of responsibility competence and contribution.The Company has established a perfect performance feedback and complaint mechanism to provide guidance and suggestions for employees.Every year we set up multiple performance evaluation methods for different positions such as "goal-oriented" goal management method

Statutory benefits 360-degree performance evaluation etc. to motivate employees to accomplish their personal goals and team goals. We provide effective feedback

and communication of the assessment results to the employees If the employees have any doubts about the performance appraisal process or

results they can appeal to their supervisors human resources department and other relevant departments. Upon receipt of a complaint the

Basic benefits Vacation benefits relevant person in charge shall communicate with the complainant explain the principles and basis of the performance assessment and carry out auditing investigation and processing to ensure the fairness and impartiality of the performance appraisal.Pension insurance medical insurance unemployment National holidays annual leave maternity leave marriage and

insurance work injury insurance maternity insurance housing funeral leave breastfeeding leave family visit leave Parental

provident fund high temperature allowance one-child fee etc. leave care leaveetc.Talent training system

Key Performance Combined with the advantages and characteristics of its own pharmaceutical industry and the "14th Five-Year Plan" talent strategy the Company

Supplementary benefits adopts a hierarchical and categorized cultivation model and develops a suitable cultivation plan for each employee.Deeply implement the "Green Lotus Plan" which is a training program for "three types" of talents (management science and technology and

Regular benefits 100 professional and technical talents) to empower the training of core talents. Continuously organize and carry out labor and skill competitions % strengthen technical exchanges and improve the technical business and innovation ability of employees.Holiday benefits birthday benefits wedding ceremony shuttle

bus free parking meal benefits staff dormitory and so on. social insurance coverage rate

CR Sanjiu's "Three Types of Talents" Cultivation Program

Protection benefits

Average number of paid leave days per year

Enterprise annuity maternity allowance annual physical Management Talent Training Cultivating Technology Talent Professional Skill

examination commercial insurance etc. Program Development8 days * CR Xuechuang: Deputy Class of * Intelligent Manufacturing Plan D * R&D Professionals

Directly Managed Cadres of CR

Supporting Employee Development Group * Metamorphosis Camp for R&D * Functional Professionals

* CR Xuechuang: The Way of CR Innovation Project Managers

To fully release the innovative potential of our employees and stimulate the vitality of the organization we have constructed a smooth career Manager Training Excellent

development channel and an all-round skills enhancement system. We support employees to improve their professional skills and overall Young Cadre Class * Digital Talent Development * Production Professionals

quality and promote the synchronous development and win-win progress of individuals and the Company. * CR Sanjiu: Leader Program

(general manager class) * Marketing Professionals

Key Performance * CR Sanjiu: Industrial Chain

Senior Talent Development Class * Grassroots Employee Job

98.68 30.32 Total annual training attendance

Training

% * Elite Talent Development Program * Grassroots Employee Skill

Competition

employee training coverage hours of annual per capita training hours 306687person-times * CR Sanjiu: Sword Sharpening

Program

* CR Sanjiu Eagle Program New

Investment in various types of training amounting to Employee Training Camp

RMB 10432000102 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 103

Continuously forging management talent team: Degree enhancement program

for senior middle and grassroots leaders the Company has successively carried out and completed various training programs: Based on the Company's strategic innovation requirements focusing on the "introduction" and "cultivation" of scientific and technological

Leader Program (general manager class) industrial chain senior talent development class (director or above) Lighthouse talents the Company has established cooperation with Fudan University China Pharmaceutical University and other colleges and

Program (middle and senior management) and Sword Sharpening Program (first-line managers in the production system) etc. universities in the field of biomedicine and other fields and carried out the joint cultivation project of school-enterprise doctoral degree

to accelerate the selection and cultivation of young and outstanding reserve leaders. etc. The project is open for application by all qualified employees and provides reimbursements. The purpose of this program is to further

deepen the collaborative education between schools and enterprises and to cultivate high-quality talents with both solid theoretical

foundation and rich practical experience.Accelerating the construction of scientific and technological talents:

mainly oriented to high-tech innovation talents such as R&D and intelligent manufacturing CR Sanjiu has carried out the R&D

professional talents training program and the intelligent manufacturing talents development D program etc. which provide Enhance promotion system

more learning and development opportunities for the Company's scientific and technological talents.We construct a dual-channel promotion mechanism for management and professional/technical helping employees' career

development. We dynamically adjust individual grades to empower employees' growth in an all-round way. We revise and improve

Strengthening professional skills training efforts the Management Measures for Employee Promotion in CR Sanjiu Headquarters and Guanlan Base further simplify the conditions for

employee promotion increase the process of employee competency certification and stimulate the potential and value of employees.Committed to cultivating professionals with dedication excellent skills a sense of innovation and the pursuit of excellence.To achieve this goal actively organize activities including but not limited to CR Sanjiu Eagle Plan Skill Cup quality awareness

month and focused subjects.Caring for Employees' Life

CR Sanjiu actively practices the corporate culture of "Care - Responsibility - Excellence" continuously carries out the employee care and warming

Case project pays attention to the physical and mental health of employees and creates a "happy work healthy life" working environment and CR Sanjiu management trainee program - Eagle Program enhances the cohesion and sense of belonging of employees.The Company attaches importance to the introduction and

cultivation of talents especially for newcomers to the workplace

set up a trainee program. The Eagle Program as a brand project of

CR Sanjiu's training of trainees aims to help trainees achieve the Employee Grievance Channel

four major goals of "cultural integration role transformation goal

setting and career development". The program includes workplace The Company has formulated formal employee grievance procedures established open communication channels to ensure that the

general knowledge training and on-the-job practical training and reasonable demands of the complainant are effectively resolved and at the same time ensured that the grievance information and its

involves a number of professional courses such as corporate and contents are kept strictly confidential.party education. CR Sanjiu 2024 Eagle Program

Employees can communicate exchange and complain internally through [Sanjiu Forum] [Discipline Inspection Complaints]

modules on Company's office system and [Employee Voice Platform] on "Run Work" which on one hand provides employees

with a convenient communication channel and on the other hand creates a positive and sunny corporate culture atmosphere for

the Company. The Company has set up the Labor Dispute Mediation Committee and formulated the workflow of labor dispute

At the same time the Company carries out talent succession mediation. The applicant can apply for labor dispute mediation and the mediator will carry out the mediation work within the scope

planning to ensure that there is always a reserve of candidates of mediation acceptance and in line with the other party's willingness to mediate.for key positions covering middle and senior managers in key

departments cultivating and empowering core talents and The complaint handler shall correct the non-compliance based on the findings of the investigation and implement penalties such

retaining reserves for key positions. as warnings demerits and termination of the labor contract; violations of the law shall be referred to the judicial authorities; the

complainant shall be informed of the outcome of the complaint in a timely manner and if the complainant has any comments on the

outcome of the complaint he or she may file another complaint.Organized industry chain senior talent development classes104 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 105

Solve the difficulties of employees Care for female employees

The labor union of CR Sanjiu attaches great importance to the care of employees in difficulty and establishes a perfect file management The Company takes care of female employees who have given birth and pays the full amount of government subsidies to reduce

system for employees in difficulty. Strictly adhering to the principles of one person one file and dynamic management it grasps the real the pressure on the payment of maternity leave wages to female employees who have given birth. In 2024 the Company assisted 46

situation of the families of employees in difficulty in a comprehensive for employees in difficulty difficult employees' children enrollment employees in successfully applying for maternity allowances amounting to a total of 1780000 RMB. The Company actively implements

sick employees actively work. In 2024 the labor union of CR Sanjiu carried out visits condolences and relief work covering a total of 141 the childcare leave system granting ten days of childcare leave per year to employees' children up to the age of three. In addition the

employees in difficulty and distributed a total of RMB 789150 of condolences. Company has also thoughtfully set up breastfeeding rooms to create a warm private and exclusive space for working mothers.Creating a warm workplace Care for employee mental health

CR Sanjiu builds an employee care system in all aspects. On cultural life traditional festival activities sports events and cultural and Continuously upgrading the service mode of EAP projects such as "Run Xin Fang" unveiling the establishment of "Run Xin Fang - Sanjiu

sports associations are organized throughout the year to enrich the cultural life of employees and enhance organizational cohesion. The Branch" psychological counselors enter one-on-one consultation to provide employees with psychological counseling services. In 2024

Company provides on-time issuance of holiday benefits birthday gift packages for new employees onboarding gift packages etc. to carry a total of 5 Run Xin Fang one-on-one counseling serving more than 30 employees has carried out 3 psychological lectures on emotional

out staff dormitory upgrading and renovation projects to assist in applying for public housing equipped with commercial insurance management stress management energy management etc. to enhance employees' ability to regulate their emotions and self-mental

regular organization of physical examination set up a Chinese medicine clinic in the park with senior authoritative experts sitting in the adjustment and to protect their physical and mental health. In 2024 a total of 5 one-on-one counseling sessions were conducted

clinic. The Company actively help the development of employees organizations apply for young talent gathering project high-level talent serving more than 30 employees and 3 psychological lectures on emotion management stress management and energy management

subsidies enhance the sense of belonging to the talent create a good organizational atmosphere and promote the common growth of were held to enhance employees' ability to regulate their emotions and self-adjustment and to safeguard their physical and mental

enterprises and employees. health.

2024 Goddess Day Event 2024 Goddess Day Event

2024 Corporate Basketball League in Shenzhen 2024 CR Sanjiu Employee Games CR Sanjiu establish "Run Xin Fang - Sanjiu Branch"106 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 107

Optimizing Supply to Serve Society Preventing Supplier Risk

In an increasingly complex supply chain environment supplier risk can impact business operations at any time. We see the prevention

Adhering to the concept of social responsibility and the pursuit of excellence we focus on optimizing the supply system from strengthening of supplier risk as a key part of supply chain management. By building a sound risk response mechanism and implementing precise

supplier management preventing risks ensuring the quality of supply to working with suppliers to win-win and other dimensions and and effective measures we can ensure the stability and security of the supply chain and safeguard the sustainable development of the

is committed to building a sustainable safe and efficient supply ecosystem to provide the community with better quality products and enterprise.services.Strengthening Supply Management Supply chain risk monitoring

Suppliers are pivotal strategic partners in the Company's development journey. We steadfastly uphold the core principle of collaborative win- We have established a risk monitoring indicator of "core material supply risk degree" the core material supply risk degree is a measure

win partnerships employing rigorous and scientific selection criteria to meticulously identify every partner. In compliance with the CR Sanjiu of the number of core materials that may have the risk of tight supply or abnormal price fluctuations in the next 3-6 month cycle

Supplier Code of Conduct we have established management protocols such as the Supplier Quality Management Protocol to vigorously and the risk degree of individual material supply is indicated by red yellow and green lights yellow lights indicate that there may be

drive suppliers' deep integration of sustainable development practices thereby building a robust supply chain foundation from the source. general supply risks and red lights indicate that there may be major supply risks.Key Performance

Supply chain risk prevention

Number of supplier audits Suppliers terminated due to Potential suppliers rejected Supplier signing rate of the

conducted non-compliance due to non-compliance Sunshine Declaration By continuously carrying out risk assessment and early warning of core material supply we actively understand the Company's core

742 7 15 100 material supply market situation formulate short- medium- and long-term response measures based on the supply risks faced % coordinate the forces of all parties that can help solve supply risks and establish channels to ensure supply security.

Ensure the Quality of Supply

Supplier management We actively promote the construction of a professional large-scale and integrated modern logistics system and are committed to meeting

the medical needs of consumers and patients with high quality and efficiency so as to ensure that drugs can benefit the general population

CR Sanjiu strictly adheres to the Supplier Quality Management Protocol. Dedicated teams continuously collect and review suppliers' in a timelier manner.EHS management status and certifications closely monitor regulatory updates and conduct annual social responsibility assessments

to ensure suppliers operate legally and compliantly. For centralized procurement suppliers cross-functional collaboration among

the procurement production warehouse and quality departments ensures quarterly collection and analysis of multi-dimensional Warehouse network layout planning

performance data including quality compliance delivery reliability service responsiveness continuous improvement cost

competitiveness external complaints. Based on evaluation results suppliers are classified into tiers with corresponding rewards or

penalties applied. Build a warehouse network layout planning auxiliary decision-making system and a scientific data model and use algorithms

to calculate reasonable warehouse network layout suggestions in real time according to the Company's business scale delivery

timeliness logistics costs and other factors.Supplier performance appraisal

The Company and its subsidiaries carry out comprehensive quality assessment of direct suppliers and raw material suppliers in Warehouse attribute division

accordance with the regulations every year. We take the on-site quality audit score and supply quality pass rate as the key dimensions

and dynamically evaluate suppliers in stages at the beginning of the year in combination with the audit cycle score and the supply

quality pass rate of the previous year formulate differentiated audit and risk control strategies according to the rating results Divide warehouse attributes according to product attributes and production and marketing areas and adopt the operation mode of

and eliminate suppliers with poor performance ensure the quality and stability of the supply chain and promote sustainable central warehouse + regional warehouse to achieve multi-warehouse collaboration and improve logistics operation capabilities and

development. customer service levels.108 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 109

Integrated transportation construction Case CR Sanjiu (Chenzhou) Strengthens Supplier Management and Builds Safety Defense Line

Carry out unified and centralized management of production and sales logistics establish a standardized transportation management CR Sanjiu (Chenzhou) examined key aspects such as potential safety hazards of suppliers' operations as well as the environmental

process and have a variety of distribution modes such as vehicle LTL express delivery etc. to meet the needs of different business impact of suppliers' operations implements scientific grading and classification of suppliers and adopts differentiated control

scenarios and ensure the quality and safety of product transportation. measures. In 2024 the Company organized safety education and training activities for 23 related parties. All participants passed the

assessments effectively enhancing the safety awareness and skills of related parties and further strengthening suppliers' sense of

responsibility.Lean logistics construction

Gradually transform the third-party logistics and warehousing business into a flexible billing model and explore a tiered billing model

to reduce warehousing costs; Create a fixed capacity pool transportation mode and set up fixed round-trip transportation routes

through warehouse network planning to realize full-load operation of vehicles improve transportation timeliness and reduce costs.Collaborate for Mutual Benefit and Social

Smart logistics construction Contribution

Using ERP WMS and other systems to achieve full-process traceability in logistics to provide data support for logistics operation and We uphold the concept of open and win-win cooperation actively build a diversified strategic cooperation system continuously deepen the

optimization; The self-managed warehouse continues to promote automated operations has realized fully automatic and unmanned collaborative interaction with partners and make every effort to promote the overall leap of the industrial chain. We work with many partners

receiving and will promote automatic loading projects in the future. to continue to expand the breadth and depth of cooperation so as to achieve a beautiful vision of common development and mutual

benefit.Logistics emergency management Collaborative Development

Formulate the CR Sanjiu Logistics Supplier Procurement Management Rules and other systems establish a logistics emergency support We attach great importance to in-depth exchanges with multiple stakeholders such as governments enterprises hospitals and international

mechanism for unexpected events and respond to emergencies such as epidemics and disasters in a timely manner in accordance with the partners uphold an open and cooperative attitude actively build communication bridges and continuously deepen cooperative relations

Logistics Emergency Management Operation Rules to ensure the stable operation of logistics business. with all parties. Integrate the superior resources of all parties realize information sharing resource complementarity and jointly promote

industry progress and innovation.Work Together with Suppliers for a Win-win Situation School-enterprise cooperation

We attach great importance to win-win cooperation with suppliers and continuously strengthen the capacity building of supplier partners Based on the Company's strategic innovation requirements focusing on the "introduction" and "training" of scientific and technological

through a series of effective systems and measures. We provide professional technical guidance for suppliers improve their ability to fulfill talents it has established cooperation with Fudan University Sichuan University Chongqing University and other universities in the

their responsibilities and continuously enhance the sustainable development of the supply chain through on-site technical guidance and field of biomedicine carried out joint projects of doctoral and master's degrees in engineering and further deepened school-enterprise

information sharing with key raw and auxiliary material suppliers. collaborative education for all qualified Company employees and cultivated high-quality talents with a solid theoretical foundation and

rich practical experience.

100 The Company's headquarters and subsidiaries The total number of training hours was % organized audit trainings for suppliers with a total of Industry alliance cooperation

completion rate of supplier audit 2550person-times 21759.5 man-hoursrectification in 2024 We have led the establishment of many industrial platforms such as the Traditional Chinese Medicine Industry Innovation Alliance and

have joined forces with many traditional Chinese medicine enterprises universities scientific research institutions and upstream and

downstream suppliers to jointly promote the standardization modernization and international development of the traditional Chinese

medicine industry. By integrating industrial chain resources we optimize the industrial layout and achieve efficient resource allocation and

coordinated industry development.110 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 111

Caring for the Community and Giving Back to

Society

CR Sanjiu actively participates in social welfare undertakings responds to the national strategy with practical actions and contributes to the

construction of rural revitalization. We give full play to its business advantages in the field of medicine and health actively participate in social

services empower community construction and promote local economic development and social progress.Building a Caring Community

CR Sanjiu understands its own development is closely linked to the interests of the surrounding communities and to build a harmonious

relationship between the enterprise and the community we are committed to maintaining a smooth communication mechanism with the

surrounding communities.Case Leveraging the Platform of NPC Deputies to Promote Community Co-construction and Industrial Development

The deputies of the 39th People's Congress of China Resources

Joint Laboratory of Medicine and Food Homology Industry - Conference on the High-quality Development of Artemisia Annua Industry actively performed their duties and put forward four targeted

Unveiling Ceremony and constructive suggestions including the Suggestions on

Strengthening the Rectification of Safety Hazards on Qingji Road

and Preventing Traffic Accidents in key areas such as industrial

Driving for Industry Development development talent housing and traffic improvement. In the process of communication with the public security and law

departments it has promoted the solution of the surrounding road

We firmly promote in-depth strategic synergy with our partners and regularly hold business negotiations industry forums and industry traffic problems and contributed to the social development of the

summits to discuss market and technological innovation realize resource sharing and explore new paths for industrial development. At the surrounding people. Feedback from National People's Congress deputies

same time we build an academic exchange platform actively participate in industry activities implement national policies and enhance the attending the meeting

influence of the industry. Actively participate in and lead the formulation of industry standards make efforts in terms of product quality and

production process improve the overall quality and operational efficiency of the industry and promote the innovation and development of

the traditional Chinese medicine industry.Key Performance Case Strive to be a caring person for the masses and serve the society with "Warmth"

Participated in the formation of Participated in the preparation of Participated in the compilation of In 2024 the Party Committee of CR Sanjiu will stick to its original aspiration fulfill its mission deepen the practice of "I Do Practical

Things for the Masses" and complete 147 practical projects. Among them the Party Branch of the Southern District of China

1 5 8 Resources Sanjiu OTC Business Division and Jiangxi Yifeng Pharmacy went to the nursing home in Xihu District Nanchang City to carry out loving condolences talk cordially with the elderly learn more about the physical condition and living conditions of the elderly and send 200 health gift packages to the elderly.

international standard national standards industry standards112 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 113

Practice Charity and Public Welfare Rural Revitalization Rich and Beautiful Society

Under the guidance of the mission of "caring for public health and creating a better life together" CR Sanjiu actively fulfills its social

responsibilities as a central enterprise and carries out diversified public welfare activities such as education assistance donations free clinics

and visits to CR Hope Town. Through these practices CR Sanjiu has continuously strengthened its brand image of social responsibility and CR Sanjiu actively responds to the national strategic deployment and unswervingly implements the rural revitalization policy. The Company

contributed to the high-quality development of its business. In 2024 the Company's total public welfare donations will reach 4.4361 million focuses on the all-round development of local industries talents culture and ecology and takes industrial assistance and education

RMB. There were 243 participants in volunteer activities with 507 hours of volunteer service. assistance projects as the key investment direction and strives to achieve the comprehensive revitalization of rural areas through precise policies. We have actively built a resource sharing platform with various stakeholders fully integrated the superior resources of all parties

and contributed to the industrial upgrading talent training cultural inheritance and ecological protection of rural areas.Case Conveying the Power of Love Through Hand-in-Hand Assistance

Education and Talent Revitalization

CR Sanjiu (Tangshan) attaches great importance to fulfilling its social responsibilities and continuously responds to the local Education is an important cornerstone of national rejuvenation and social progress and it is a moral and political project that will benefit the

government's 'Hand-in-Hand' assistance work plan. To effectively implement the assistance work on June 12 2024 the Party present and future generations. Over the years CR Sanjiu has always adhered to a strong sense of social responsibility actively participated

Branch of CR Sanjiu (Tangshan) set up a Runtong Volunteer Service Team composed of Party members carefully prepared the "999 in the cause of rural education and helped the revitalization of local education and talents with practical actions.Pediatric Paracetamol Chlorpheniramine and Pseudoephedrine Granules Gift Pack" and visited Anjiazhuang Village in the High-

tech Zone to send warmth and care to poor children.Case "The Original Intention does not Change the Rain Drops Cultivates the Heart" China Resources Sanjiu Helps Rural Education

Since 1997 China Resources Sanjiu (Ya'an) has donated to build

Case "Feeling the Pain and Cultivating Dreams into Light" a total of 8 Sanjiu Primary Schools across six counties in two

districts of Ya'an. Over the past 27 years it has continuously funded

education with a cumulative investment exceeding 5 million

From 2007 to 2024 Kunming Pharmaceutical Group and its employees spontaneously organized "One-to-one" student assistance RMB benefiting more than 30000 teachers and students. With the

activities for students in impoverished areas for 17 consecutive years. In June 2024 the "One-to-one" student assistance public support of the local government and caring individuals the Sanjiu

welfare project was launched again in Sandan Township Kuanzhuang Township Fumin County Kunming City and Yunlong Primary Schools have improved their teaching facilities optimized

Township Luquan County. This year a total of 195 students were supported including 149 primarily in Fumin County and others educational resources and significantly narrowed the gap between

in Luquan County with each aided student receiving a scholarship of 1000 RMB annually. As of 2024 a total of 2534 poor students urban and rural schools as well as among different schools greatly

have been supported with scholarships totaling 2.534 million RMB donated. enhancing their attractiveness. In the past five years the number of

students has increased from over 2000 to nearly 4000 effectively

ensuring high enrollment and progression rates among school-age Ya'an Sanjiu Primary School theme activities

children. Currently some students who have received the Sanjiu

Scholarship have chosen to join our company after graduating from

university in order to give back to society.Case Hubei's First "Xiaoping Science and Technology Innovation Laboratory" was Unveiled

On October 24 2024 the "999 Aonuo Xiaoping Science and

Technology Innovation Laboratory" jointly built by the China Youth

Development Foundation and 999 Aonuo was unveiled in Lenin

Primary School in Hong'an County Hubei Province. "999 Aonuo

Xiaoping Science and Technology Innovation Laboratory" is used

for primary and secondary school science courses and science

classroom special teaching promoting the revitalization of rural

education and stimulating young people's enthusiasm for scientific

exploration. Since 2020 three "Xiaoping Science and Technology

Innovation Laboratories" have been donated and built in Xinjiang

Shaoshan Hunan and Hong'an Hubei.Kunming Pharmaceutical Group's "One-to-one" student assistance activity The activity site of the Xiaoping Science and Technology

Innovation Laboratory of the Aonuo Hope Projectt114 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 115

Industrial Revitalization

Case A Small Chrysanthemum Sowing Big Hope

Based on the development strategy of the whole industry chain CR Sanjiu deeply integrates the development of the Chinese herbal medicine

industry with the rural revitalization strategy from the whole chain of Chinese herbal medicine seed and seedling breeding and breeding In 2024 CR Sanjiu will combine the promotion model of "courtyard

standardized planting of Chinese herbal medicines and fresh processing of Chinese herbal medicines through various cooperation modes economy" in Jinzhai County to solve the problem of abandoned

such as "Order Agriculture" and "Company + Cooperative + Farmer" and in the way of "Demonstration Base + Radiation Base" it vigorously land and rural idle labor employment promote the planting of

develops the standardized planting of Chinese herbal medicines solves the employment of rural labor improves the structure of agricultural wild chrysanthemum in Wujiadian Town of about 8500 mu build

industry and helps rural revitalization. the Dabie Mountain Medicinal Botanical Garden collect more than

300 species of wild medicinal plants and 139 wild chrysanthemum

In 2024 CR Sanjiu built 40 varieties of Chinese herbal medicine planting bases in 21 provinces nearly 100 counties and more than 400 villages germplasm resources.across the country promote more than 33 million mu of medicinal material planting bases and build or jointly build 10 production and

processing bases to process nearly 10000 tons of Chinese herbal medicines; More than 140 cooperatives and village committees have been

driven and tens of thousands of rural households have been promoted.Farmers Grow Their Own Wild Chrysanthemum Gardens

Case Government-Enterprise Collaboration for Poverty Alleviation and Wealth Creation

The Kun Traditional Chinese Medicine and Shuangbai County give full play to the advantages of government-enterprise linkage combine

product strategy and industrial poverty alleviation and upgrading needs and tap the characteristic resources of Chinese herbal medicine

production areas. After carrying out the investigation we cooperated with the local government to build a demonstration base for the Health Support

standardized planting of authentic medicinal materials. Through the model of "Company + farmer + base" Kun Traditional Chinese

Medicine not only ensures the quality and supply of medicinal materials but also drives the income of growers. Kun Traditional Chinese CR Sanjiu actively carries out rural health assistance continuously gathers the strength of various parties gathers broad consensus

Medicine actively purchases local authentic medicinal materials and cooperates with Taihua Fenggong Shuangbai Yunling and other continuously improves the fairness and accessibility of health services improves the level of primary medical services and consolidates

enterprises with an amount of 50.498 million RMB. Help more than 20000 Chinese herbal medicine planting farmers in 8 townships and the health cornerstone of rural revitalization by promoting the sinking of high-quality medical resources. The Company continued to carry

towns in the county to help farmers increase income. out the "Healthy Village" public welfare project and donated 1.5 million RMB in cash and materials with a total value of about 800000 RMB

through the China Women's Development Foundation.Case Promote the modern management of grassroots hospitals

CR Sanjiu together with China Resources Shuanghe China Resources

Pharmaceutical Commercial China Resources Boya Biotech Dong'e

Ejiao and other units has cooperated with the Capacity Building and

Continuing Education Center of the National Health Commission and

has completed 6 training sessions and trained 951 hospital presidents.The students were organized to walk into Dong'e Ejiao Industrial Park

Sanjiu Guanlan Base and Jiangzhong Medicine Valley to deepen the

The Llisting Ceremony of the Standardized Planting dean's understanding of the development history brand products and

Ddemonstration Base red culture of the China Resources Pharmaceutical Department which

was widely praised by the students.Training Event

Ecological revitalization

Deeply combining the regional characteristics of the origin of medicinal materials and guided by the "Two Mountains Theory" CR Sanjiu

unswervingly contributes to the coordinated development of rural revitalization and ecological environmental protection and realizes the Consumption Assistance

transformation of lucid waters and lush mountains into gold and silver mountains.In 2024 the State-owned Assets Supervision and Administration Commission of the State Council will actively encourage central enterprises

The Company actively explores and vigorously promotes the barren mountains and understory ecological planting models of Chinese to carry out the "cohesion action" of consumption assistance and help and support counties through procurement and marketing strong

medicinal materials such as Gangmei and Trifurans improves the ecological environment of barren mountains and successfully transforms foundation empowerment exchanges and mutual learning etc. and CR Sanjiu will actively participate in it and organize the purchase of

the originally barren mountains into resources with economic value with a total area of 88000 acres of Chinese medicinal materials planted agricultural products of 1.0792 million RMB during the event.under the forest.116 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 117

Outlook for 2025

In 2025 as the key period for the "14th Five-Year Plan" draws to a close it will also be a year of deeper reforms. CR Sanjiu shoulders the important Strengthening responsibility and engaging in diverse social causes. We are deeply committed to the well-being of society. By leveraging the

responsibility of advancing the development of traditional Chinese medicine and safeguarding public well-being. We will continue to give our all advantages of the TCM industry we will support rural revitalization through industrial assistance technical training and other methods promote

in this mission. Guided by the mission of "Caring for Public Health and Creating a Better Life Together" we will remain steadfast in our values and the development of TCM herb planting and related industries and help increase farmers' income. We will continue our charitable and public

sense of responsibility as pharmaceutical professionals. We will fully integrate ESG principles (Environmental Social and Governance) into our welfare work including donating medical products offering free clinics promoting health education and organizing volunteer activities bringing

management processes and practice our social responsibility and mission in areas such as economic social environmental development and the real benefits to people's lives.innovation of TCM progressing boldly in the tide of the times.Deepening ESG practices and shaping a responsible corporate image. We will deeply integrate the ESG principles into our corporate

Deepening quality innovation to drive the new productive force of TCM. We have always prioritized improving product quality and safety. management improve our ESG management system and drive continuous optimization of governance capabilities and operational efficiency. We

We will continue to enhance our quality management system strengthen key quality control processes and ensure comprehensive all-around will strengthen communication and collaboration with stakeholders listen to the voices of employees consumers investors and communities and

and high-quality protection for public health. We will adhere to the "Innovation + Brand" dual-driven approach continuously enhancing our continuously improve our ESG practices shaping an excellent corporate brand.independent R&D capabilities accelerating the integration of intelligent manufacturing and TCM R&D and providing society with more "safe high-

quality efficient and environmentally friendly" pharmaceutical products and services.The journey ahead is long but the wind is strong and despite the heavy responsibilities we are determined to press on. Looking ahead CR Sanjiu

will resolutely fulfill its mission using the development of new productive forces as the engine for building a world-class enterprise. We will continue

Practicing green development and building an eco-friendly pharmaceutical ecosystem. We firmly believe that "Lucid waters and lush to innovate optimize quality systems practice green development engage in social causes and make strides on the path of TCM inheritance and

mountains are invaluable assets" and will incorporate the concept of green low-carbon development into every aspect of our operations. We will innovation. We aim to contribute more to the construction of a "Healthy China" and write a glorious new chapter in our ESG journey.continue to optimize production processes improve resource utilization efficiency reduce energy consumption and aim to be a leader in building

green enterprises. We will actively respond to the "Dual Carbon" strategy implement the carbon peak and carbon neutrality action plan to high

standards accelerate the transformation to green and low-carbon operations and contribute more to the development of a beautiful China.118 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 119

Key Performance Table Social Performance

Indicators Unit 2024 2023 2022

Economic performance

Labor contract signing rate % 100 100 100

Economic PerformanceIndicators Unit 2024 2023 2022 Social insurance coverage rate % 100 100 100

Total revenues RMB 10000 2761661.18 2473896.33 1807946.15 Number of paid vacation days per capita per year Day 8 7.9 8.53

Total assets RMB 10000 4008197.23 4014845.59 2712278.17 Number of new employees Person 2322 2286 1860

Total number of employees Person 20031 20318 15599

Total profit RMB 10000 459361.07 375445.32 296343.65

--By gender

Net profit attributable to shareholders of

listed companies RMB 10000 336788.90 285293.17 244880.21 Male employees Person 10733 10894 8414

Total Taxes RMB 10000 289861.48 292896.93 215518.57 Female employees Person 9298 9424 7185

Total Investment in R&D RMB 10000 95297.63 88895.12 73638.47 --By employment type

Full-time employees Person 20031 20318 15599

Part-time employees Person 0 0 0

Market Performance

--By age

Indicators Unit 2024 2023 2022 29 years old and below Person 4684 5004 3737

Pass rate of drug sampling tests % 100 100 99.9 30-50 years old Person 13735 13679 10488

Number of complaints received about Piece 117 198 31 51 years old and above Person 1612 1635 1374products and services

--By education

Complaint handling rate % 100 100 100

Graduate and above Person 1289 1048 786

Product and service satisfaction % 100 100 100

Undergraduate Person 8054 7404 5508

Responsible purchasing ratio % 100 100 100

Junior college Person 5641 6067 4494

Rate of suppliers passing quality

environment and occupational health % 100 100 100 High school and below Person 5047 5799 4811

and safety system certification

Comprehensive employee turnover rate % 10.54 13.5 12

Number of ethnic minorities Person 1846 810 812

Percentage of female managers % 36.7 35 34.00

Number of employees with disabilities Person 121 5 5120 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 121

Indicators Unit 2024 2023 2022 Environmental Performance

Employee satisfaction % 84.2 98.04 85 Indicators Unit 2024 2023 2022

Total annual training attendance Person-time 308876 306922 308105 Total Investment in Environmental Protection RMB 10000 4234 4368 3649

Employee training coverage % 98.68 95.77 100 Investment in Energy Saving RMB 10000 663 562 352

Annual per capita training hours Hour 30.32 14.11 14.26 Number of people trained in environmental

protection Person-time 17380 14006 13315

Annual investment in employee training RMB 10000 1043.2 776 515 Number of people covered by environmental

protection training Person 10942 8567 6275

Health checkup rate of all employees % 100 100 99.67

Environmental protection training hours Class hours 273214 111723 122120

Occupational health examination rate % 100 100 100

Number of participation in environmental public

Number of work-related deaths Person 0 0 0 welfare activities

Time 96 98 86

Total wastewater emission 10000 tons 268.02 299.86 257.74

Number of deaths due to occupational diseases Person 0 0 0

Total emission of waste gas 10000 cubic meters 863248.98 765540.25 575522.40

Investment in helping employees in difficulty RMB 10000 78.915 21.12 21.85

Total COD emission Ton 60.02 67.14 58.77

Investment in production safety RMB 10000 5831 4947 4064

COD emission intensity Tons/RMB 10000 0.000034 0.000035 0.000034

Number of full-time safety management personnel Person 229 339 257 Total ammonia nitrogen emission Ton 2.01 2.39 1.68

Employee safety training hours Hour 650100 566273 174445 Ammonia nitrogen emission intensity Ton/RMB 10000 0.000001 0.000001 0.000001

Safety training hours of related parties Hour 34711 15819 11347 Total NOX emission Ton 47.87 66.34 38.44

EHS emergency drill attendance Person-time 16687 16720 9420 NOX emission intensity Ton/RMB 10000 0.000027 0.000035 0.000022

Total SO2 emission Ton 3.47 4.70 2.66Number of EHS emergency drills Person-time 617 465 312

SO2 emission intensity Ton/RMB 10000 0.000002 0.000002 0.000002

Extraordinarily major accidents Item 0 0 0

Total emissions of particulate matter (PM) Ton 8.19 10.00 1.44

Major accidents Item 0 0 0

Emission intensity of particulate matter (PM) Ton/RMB 10000 0.000005 0.000005 0.000001

Serious accidents Item 0 0 0

Total emissions of volatile organic compounds

(VOCs) Ton 5.87 8.87 11.23

General accidents Item 2 0 0

Emission Intensity of Volatile Organic

Number of fatal accidents Time 0 0 0 Compounds (VOCs) Ton/RMB 10000 0.000003 0.000005 0.000006

Number of fatalities in safety accidents Person 0 0 0 Total amount of medical waste (HW02) generated Ton 125.75 128.27 49.92

Total amount of waste pharmaceuticals (HW03)

Lost time rate of employees in million man-hours Person/million 0.52 0.12 1.04 generated

Ton 201.69 340.86 219.09

hours

Total amount of other hazardous wastes

Lost work days due to work-related injuries Day 533 21 - generated Ton 675.31 783.22 566.92

Total hazardous waste generation Ton 1002.75 1252.35 835.93122 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 123

Indicators Unit 2024 2023 2022 Indicators Unit 2024 2023 2022

Intensity of hazardous waste generation Ton/RMB 10000 0.000566 0.000657 0.000480 GHG emission per RMB 10000of total revenues Ton of CO2e/RMB 10000 0.0804 0.1117 0.1567

Amount of hazardous waste disposal Ton 1116.85 1171.47 862.25

Total industrial water usage Ton 29929123.40 29444432.50 11682172

Total amount of general industrial solid waste

generated Ton 144261.22 134557.22 26094.72 Industrial water intensity Ton/RMB 10000 16.9010 15.4461 6.6746

General industrial solid waste generation Freshwater usage in industry Ton 4224132 4971951 3965510

intensity Ton/RMB 10000 0.0815 0.0706 0.0150

Freshwater usage per RMB 10000 of industrial

output value (at comparable prices) Ton/RMB 10000 2.3854 2.6082 2.2657Comprehensive utilization of general industrial

solid waste Ton 139452.47 133831.03 25825.43

Industrial circulating water consumption Ton 25704991 24472481.50 7716662

Recycling rate of general industrial solid waste % 96.65 99.44 98.94

Industrial water reuse rate % 85.89 83.11 66.06

Total industrial solid waste generation Ton 145263.97 135809.57 26930.65

Total industrial water savings Ton 25704991 24472481.50 7716662

Gasoline consumption Ton 50.08 59.61 34.37

Office and domestic electricity consumption kWh 23125158.11 20791860.35 17315718.05

Diesel consumption Ton 167.40 171.72 107.83

Office and domestic water consumption Ton 372936.57 2629996.67 1926286.53

Purchased electricity consumption 10000 kWh 21660.55 23331.43 17714.37

Office and domestic wastewater generation Ton 326540.57 2488536.13 1808202.37

Purchased steam consumption Million kilojoules 536173.38 791759.19 685744.70

Office paper usage Piece 19882033.93 29917207 25913355

Natural gas consumption 10000 standard m3 2525.49 2647.83 2114.31

Office waste disposal volume Ton 2034.52 621.81 —

Thermal energy consumption Million kilojoules 536173.38 791759.19 685744.70

Total packaging material usage by weight Ton 71123 98047 35826

Clean energy consumption Ton of standard coal 5136.68 5788.57 1331.35

Total comprehensive energy consumption 10000 tons of standard coal 8.0838 9.4754 7.4569 Governance Performance

Comprehensive energy consumption per RMB Ton of standard coal/

10000 of added value (comparable price) RMB 10000 0.0981 0.1100 0.0876 Indicators Unit 2024 2023 2022

Comprehensive energy consumption per RMB Ton of standard coal/

10000 of production value (comparable price) RMB 10000 0.0456 0.0497 0.0428 Percentage of female directors on the Board of Directors % 18.18 18.18 18.18

Comprehensive energy consumption per RMB Ton of standard coal/ Number of shareholders' meetings held Time 7 6 7

10000 of total revenues RMB 10000 0.0293 0.0383 0.0412

Number of board of meetings held Time 24 13 18

Consumption of toxic and hazardous materials Ton 1412.90 5421.11 —

Consumption intensity of toxic and harmful Issuance of regular reports Item 2 2 2

materials Ton/RMB 10000 0.0008 0.0028 —

Issuance of temporary announcements Item 131 67 91

Total GHG emissions Ton of CO2e 222120.65 276450.88 283297.26

Scope I - direct GHG emissions Ton of CO e 55312.19 58235.73 49673.61 Coverage of anti-corruption training % 100 100 100 2

Hours of employee anti-corruption training Hour 160500 53435 37500

Scope II - indirect GHG emissions Ton of CO2e 166808.46 218215.15 233623.65

Convening of company warning and education conference Time 2 3 2

GHG emission per RMB 10000 of production Ton of CO2e/RMB

value (comparable price) 10000 0.1254 0.1451 0.1627

Percentage of employees receiving ethics training % 100 100 100124 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 125

Index of Indicators Corresponding Indicators Reference Indicator System

Report Catalog of China Corporate Social for ESG Special Reporting of Responsibility Reporting Listed Companies Controlled

Guidelines (CASS-ESG 6.0) by Central Enterprises

Corresponding Indicators Reference Indicator System

Report Catalog of China Corporate Social for ESG Special Reporting of Uphold Integrity Operate Responsibility Reporting Listed Companies Controlled in a Sound Manner S3.2.1-S3.2.2 G2.1-G2.2 G4.1-G4.2 G5.1-G5.2

Guidelines (CASS-ESG 6.0) by Central Enterprises

Governance with

Message from the Executive P2.1 Wisdom Strengthen

Craftsmanship and G2.1.1-G2.1.8 G2.2.1-G2.2.3 S4.1

Foundations for the Responsible Operation

Company Development

Feature Story 1: Synergistic Development of the Whole Strengthen Party

Industry Chain to Create Advantages in the Traditional S2.1.15 Construction and -

Chinese Medicine Industry Compliant Operation

Feature Story 2: Leading Green and Low-Carbon E1.1.11 E1.1.15-E1.1.16 E3.1.2 E3.2.1 E3.3.1 Control the Source of Development and Building the Near-Zero Carbon Park Quality Escort New Medicines Safeguard S3.3.1-S3.3.14 S2.1

Quality Productive Health

Company Profile P3.1 Forces Promote

Development Optimizing Services S1.2.7 S2.1.14 S3.3.15-S3.3.17

14th Five-Year Plan P3.2 Protecting Health S3.4.1-S3.4.4

S2.1-S2.2

About Us Corporate Culture P3.2 Strengthen Control E2.1.1-E2.1.9 E2.2.1 E2.2.3

Advocate Green E2.2.5-E2.2.7 E2.4.1-2.4.4 E5.1-E5.6

Development E3.1.2-E3.1.5 E3.2.3-E3.2.4

Brands and Products P33 G1.2

Low-Carbon Leadership Multi-dimensional Carbon

Organizational Structure P3.4 Jointly Creating a Green Reduction Protecting E1.1.1-E1.1.6 E1.1.12-E1.1.15

Home Green E1.1.19

E3.1-E3.4E5.1

Focus 2024 -

Ecological balance E1.1-E1.4E2.1-E2.3

Sustainability and ESG G1.1.7 G1.1 G1.3 building green

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

Concepts E4.1E5.2E5.3

Sustainability and ESG Healthy Companions S4.1.1-S4.1.12 S4.2.1-S4.2.6

Work Implementation G1.1.1-G1.1.8 G1.1.10-G1.1.12 Happy Employees S4.3.1-S4.3.6

S1.1-S1.2S1.4S1.5

Sustainability

Management

Stakeholder Optimize Supply Serve

Communication G1.3.1-G1.3.2 G3.1G3.2.G3.3 Society

S3.1.1-S3.1.4

Unite as One Sharing

Materiality Issues Responsibility for a Synergy and Win-Win G1.1.9 Help Society S2.1.3 S3.1-S3.2Management Harmonious Society

Focus on Innovation and Caring for the Community S1.2.1-S1.2.7 S4.2-S4.4

Innovation-Driven Stable Development S2.1.1-S2.1.13 S2.3 Returning to Society

Pioneering New

Frontiers with

Deepening Revitalize the countryside Technological S1.1.1-S1.1.5

Breakthroughs Transformation for S2.2.1-S2.2.7 S4.4

enrich the society

Sustainable Development

Outlook for 2025 A1126 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 127

Corresponding Indicators Reference Indicator System Feedback

Report Catalog of China Corporate Social for ESG Special Reporting of Responsibility Reporting Listed Companies Controlled

Guidelines (CASS-ESG 6.0) by Central Enterprises Dear reader

Thank you very much for taking the time to read this report. In order to gain a deeper understanding of your expectations and needs

A2 E1.1.7-E1.1.8 E2.1.2. E1.1.1E1.1.2E1.2.2E1.3E1.4.1E2.1 regarding the sustainable development and ESG efforts of CR Sanjiu and to continuously improve the quality of our work we are conducting

Key Performance Table E2.2.1-E2.2.4 E2.2.8-E2.2.9.3E2.1.5E2.2.1E2.2.2E2.3E3.1.3E

E3.1.1 E3.2.1-E3.2.2 S4.1.3-S4.1.7 3.1.4E3.1.6S1.1.2S1.2.2S1.2.4S1.3

this survey. We sincerely invite you to participate. Your opinions and insights are vital to us. We deeply appreciate your valuable feedback and

S4.3.3-S4.3.6 G2.1.5-G2.1.7 .3S1.3.4S1.5.3S1.5.1S2.1.2S3.1.1

suggestions!

G3.2.1

1. Your identity in relation to CR Sanjiu:

Index of Indicators A3 ?□ Employee???□ Consumer/Patient??□ Partner??□ Investor??□ Regulator

Feedback A6 ?□ Other Government Department????? □ Media???□ Other

2. Are you satisfied with the overall content of this year's report

About this Report P1.1-1.2

?□ Yes??????□ No?????????□ Average

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

?□ Yes??????□ No?????????□ Average

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

?□ Innovative report themes????? ?? □ Innovative structure and approach ????? □ Clear logical flow

?□ Broader application of sustainability standards ??? ?□ More user-friendly interface ??□ More approachable language

?□ Other (Please specify)

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

?□ Develop a long-term sustainability plan???□ Strengthen the management of sustainability initiatives

?□ Broaden external communication efforts??□ Plan new impactful public welfare projects

?□ Include sustainability-related performance in management assessments??□ Other (Please specify)

You can communicate your feedback through the following channels:

China Resources Sanjiu Medical & Pharmaceutical Co. Ltd.Address: No. 1 Guanqing Road Guanhu Street Guanlan High-tech Zone Longhua District Shenzhen

Postcode: 518110

Fax: (86) 755-83350888

Phone: (86) 755-83360999

Email: 000999@999.com.cn

Weboperational site: https://www.999.com.cn128 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 129

About this Report

This report is the 16th annual sustainability and ESG report published by China Resources Sanjiu Medical & Pharmaceutical Co. Ltd.since 2009. The report themed "Responsibility for a Better Future Together" reflects the Company's efforts and achievements in

economic social environmental and governance aspects in 2024 responding to the expectations and concerns of stakeholders.Time Period Report Commitment

The report covers the period from January 1 2024 to December CR Sanjiu guarantees that the contents of this report are free from

31 2024 consistent with the annual report. Some content has any false records misleading statements or material omissions

been extended for better comparability and forward-looking and takes full responsibility for the authenticity accuracy and

insights. completeness of the content.Scope of the Report Reference Standards

This report covers China Resources Sanjiu Pharmaceutical Co. This report was prepared in accordance with the Guidelines for

Ltd. and its subsidiaries and affiliates. The subject disclosed in this Social Responsibility of Central Enterprises issued by the State-

report is consistent with the annual report. owned Assets Supervision and Administration Commission

(SASAC) the Global Reporting Initiative (GRI) Standards and the

CASS-ESG 6.0 Pharmaceutical Manufacturing Guidelines by the

Terminology Chinese Academy of Social Sciences. It also references the ESG Reporting Indicator System for Central State-Owned Enterprises'

For ease of expression and readability "China Resources Sanjiu Listed Companies by SASAC.Pharmaceutical Co. Ltd." is referred to as "CR Sanjiu" "the Company"

or "we" in this report.Preparation Process

Data Explanation The preparation process for this report follows the requirements of

the above standards including industry benchmarking surveys

All data in this report comes from internal documents and information information collection review report writing management review

systems of China Resources Sanjiu Pharmaceutical Co. Ltd. report rating and report assurance to ensure completeness

materiality authenticity and balance.How to Access

This report is available in both electronic and paper formats. You

can download and view it from the Social Responsibility section of

the CR Sanjiu web operational site at https://www.999.com.cn.130 China Resources Sanjiu Medical & Pharmaceutical Co. Ltd. 2024 Sustainability and ESG Report 131

ESG Assurance Statement Recommendations

Based on the assurance findings it is recommended that：

To: stakeholders of China Resources Sanjiu Pharmaceutical Co. Ltd. CR Sanjiu strengthen ESG performance monitoring dynamically evaluate and adjust ESG performance and ensure the achievement and

China Quality Certification Centre Co. Ltd.(CQC) commissioned by China Resources Sanjiu Pharmaceutical Co. Ltd. (hereinafter referred continuous improvement of ESG goals.to as CR Sanjiu) conducted independent verification on CHINA REAOURCES SANJIU 2024 SUSTAINABILITY AND ESG REPORT (hereinafter

referred to as the ESG Report) between March 3 and 7 2025.CR Sanjiu was responsible for collecting summarizing analyzing and disclosing the information and data mentioned in the ESG Report.CQC implemented report verification within the scope specified in the agreement with CR Sanjiu. CR Sanjiu is the designated user of this Limitations

statement.* T his assurance was conducted using sampling methods based on quantitative and qualitative risk analysis and the sampling scope was

This statement was based on the assurance activities conducted on the ESG Report prepared by CR Sanjiu with reference to SASAC Guiding limited to the data and information selected in the ESG Report not fully tracing or independently recalculating all raw data of CR Sanjiu。

Opinions on Central SOEs Fulfilling Social Responsibility GRI 2021 Standards UCASS Guidelines for Corporate Social Responsibility Reporting

in China (CASS-ESG 6.0) for Pharmaceutical Manufacturing Industry and SASAC Reference Indicator System for Special ESG Reports of Central * T his assurance only covered interviews and document review with CR Sanjiu and did not directly interview external stakeholders (such as

SOE-controlled Listed Companies and CR Sanjiu was responsible for the completeness and authenticity of the information and data in the suppliers customers etc.) nor did it contain independent verification of the information provided by external stakeholders of CR Sanjiu.ESG Report.* T he data and information audited/verified by a third party in the ESG Report were not subject to repeated verification during this assurance

process.Scope of Assurance Assurance Methods * S ome of the data and information in the ESG report cannot be compared and verified through independent sources. This assurance only

evaluated their reasonableness.The following data and information disclosed in the ESG The methods used in this assurance include but are not limited

report of CR Sanjiu： to:： * A ctivities outside the scope of information disclosure were not included in this assurance;

* Financial performance a) Report review; * T he statement regarding the position viewpoints beliefs goals future development directions and commitments of CR Sanjiu were not

* Market performance b) Interviews； included in this assurance.* Social performance c) Verification of documents records certificates bills and other

* Environmental performance materials;

* Governance performance d) Field verification;

e) Trusted information source verification; Statement on Independence and Verification Capability

Basis for Assurance f) Verification against disclosure basis;

g) Recalculation/estimation; Affiliated with China Certification & Inspection Group (CCIC) CQC is a third-party professional certification body approved by the Chinese

AA1000 V3，Type 2 Moderate Assurance h) Confirmation of statistical calculation/estimation processes. government and recognized by multiple foreign governments and international authoritative organizations. CQC can provide various

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

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

independent verification services for social responsibility reports sustainable development reports and ESG reports。

Assurance Conclusions As an independent certification body CQC ensured that there were no conflicts of interest with CR Sanjiu and its stakeholders during the

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

The ESG report reflects the performance of CR Sanjiu in environmental social and corporate governance in 2024. The information disclosed assurance of the ESG Report were not involved in the preparation process of the ESG Report.is true and reliable and with availability timeliness and relevance well maintained which basically meets the requirements of AA1000 V3 as

follows:

1. Inclusivity: CR Sanjiu has identified both internal and external stakeholders including government and regulatory agencies customers

employees shareholders/executives/investors partners non-profit organizations peer enterprises community members. In the report

preparation process the expectations and needs of stakeholders have been considered.President of CQC：

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

issues integrating the management of various issues into the company's daily operations. The overall content of the ESG Report meets the March 10 2025

requirements of the materiality principle. Beijing China

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

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

4. Impact: Through quantitative qualitative or a combination of both CR Sanjiu has disclosed the main impacts on stakeholders in terms of Note: In case of any inconsistency or discrepancy the Chinese version of this assurance statement shall prevail while the English translation is used for

environment society and governance. reference only.China Resources Sanjiu Medical & Pharmaceutical Co. Ltd.