About the Report
About the Report Appellation Note
The report involves multiple subsidiaries (branches) of KELUN PHARMA. For the sake of convenience the report will
use the following abbreviations for these subsidiaries (branches):
This report is the 13th Environmental Social and Governance (ESG) report publicly released by Sichuan Kelun
Pharmaceutical Co. Ltd. (hereinafter referred to as "KELUN PHARMA" "the Company" or "We"). It provides a
comprehensive disclosure of the Company's practices and performance in economic environmental social and Full Name Abbreviation
governance responsibility domains for the year 2024 systematically addressing the expectations and requirements of Sichuan Kelun Pharmaceutical Co. Ltd. KELUN PHARMA
stakeholders.Sichuan Kelun Pharmaceutical Co. Ltd. Renshou Branch Renshou Branch
Sichuan Kelun Pharmaceutical Co.Ltd. Guang'an Branch Guang'an Branch
Report Scope
Sichuan Kelun Pharmaceutical Co. Ltd. Anyue Branch Anyue Branch
Timeframe: The reporting period covers January 1 2024 to December 31 2024. To enhance comparability and forward- Sichuan Xinkaiyuan Pharmaceutical Co. Ltd. Xinkaiyuan
looking insights certain content extends appropriately to prior and subsequent years. Kunming Nanjiang Pharmaceutical Co.Ltd. Kunming Nanjiang
Reporting Boundary: Economic environmental social and governance responsibility information pertaining to the Hunan Kelun Pharmaceutical Co. Ltd. Hunan Kelun
Company and its subsidiaries/branches.Hunan Kelun Pharmaceutical Co. Ltd. Yueyang Branch Hunan Kelun Yueyang Branch
Hubei Kelun Pharmaceutical Co. Ltd. Hubei Kelun
Information Sources
Jiangxi Kelun Pharmaceutical Co. Ltd. Jiangxi Kelun
Guizhou Kelun Pharmaceutical Co. Ltd. Guizhou Kelun
The information disclosed in this Report is sourced from internal official documents statistical reports and annual reports
of the Company. The data disclosed is based on original operational data of the KELUN PHARMA publicly available Shandong Kelun Pharmaceutical Co. Ltd. Shandong Kelun
government data annual financial data internal relevant statistical reports third-party questionnaire surveys and third-
party evaluation interviews. Financial data in this report is denominated in RMB (or CNY). Henan Kelun Pharmaceutical Co. Ltd. Henan Kelun
Guangxi Kelun Pharmaceutical Co. Ltd. Guangxi Kelun
Preparation Basis Sichuan Kelun Pharmaceutical Research Institute Company Limited Kelun Pharmaceutical Research Institute
Sichuan Kelun-Biotech Biopharmaceutical Company Limited Kelun-Biotech
Shenzhen Stock Exchange Self-regulatory Guidelines for Listed Companies No. 17 – Sustainability Reporting (Trial) Sichuan Kelun Pharmaceutical Co. Ltd. Qionglai Branch Qionglai Branch
Shenzhen Stock Exchange Self-regulatory Guidelines for Listed Companies No. 3 – Sustainability Report Preparation Yili Chuanning Biotechnology Co. Ltd. CHUANNING BIOTECH
Sustainability Reporting Standards by Global Sustainability Standards Board (GRI Standards)
Ili Jiangning Biotechnology Co. Ltd. JIANGNING BIOTECH
United Nations Sustainable Development Goals (UN SDGs)
Khorgos Jinhe Biotechnology Co. Ltd. JINHE BIOTECH
Morgan Stanley International ESG ratings (MSCI ESG rating)
Chengdu Qingshan Likang Pharmaceutical Co. Ltd Qingshan Likang
Chongzhou Junjian Plastic Co. Ltd. Junjian Plastic
Kelun-Kazpharm Co. Ltd. Kelun-Kazpharm
Report Access
This report is available in electronic format for your review. You may access it by visiting our official website (https://www.kelun.com/) or the CNINFO platform (http://www.cninfo.com.cn). For any inquiries or suggestions regarding this report
please feel free to contact us via email at kelun@kelun.com or by phone at +86-28-8286 0609.
01 02Opening
Opening
Discovering Kelun Pharma
Engine No.1 Engine No.2 Engine No.3
Founded in 1996 and headquartered in Chengdu Sichuan Province China KELUN PHARMA has grown into one of KELUN PHARMA maintains its KELUN PHARMA creates a KELUN PHARMA s t r i ves
China's most comprehensive pharmaceutical groups spanning R&D drug manufacturing and commercial distribution. leading position in the area of competitive advantage in for longevity through the
Recognized among China's Top 100 Pharmaceutical Manufacturers and Top 500 Manufacturing Enterprises we have IV Solutions through continuous antibiotics from intermediate elaboration of R&D systems
earned the title of "Model Champion in Manufacturing Excellence" for our global leadership in large-volume injections in indust r ia l upgrad ing and APIs to FPPs by innovative and diversified technology
2018. restructuring product portfolio. exploitation of quality natural innovation.
resources.Since our successful listing on the Shenzhen Stock Exchange in June 2010 we adhere to the development strategy of
"Three Driving Engines and Innovative Growth". We boast both high-end manufacturing and novel material advantages
in the field of IV solution and possess the strategic heights of technical innovations and quality benchmarks. Moreover "Three Driving Engines and Innovative Growth" Strategy
based upon our mature fermentation technology and robust industrialization platform we keep solidifying the
fundamental base for our antibiotics main business constantly optimize and upgrade our industrial structure and fully Main Business
enter into synthetic biology. In terms of our research and development (R&D) innovation we focus on developing drugs
with high technological content including branded generics innovative small molecules novel drug delivery systems and
biotechnology drugs. We have successfully established an internationally renowned Antibody-Coupled Drugs (ADC) R&D We are mainly engaged in the research and development production and sales of 24 types of pharmaceutical products
platform marking a new era in our innovative R&D efforts and global layout. The successful spin-offs and listings of our including large-capacity injection (infusion) small-capacity injection (water injection) sterile powder for injection (including
subsidiaries CHUANNING BIOTECH and KELUN-BIOTECH have enabled us to establish a three-pillar operational structure powder injection and lyophilized powder injection) tablets capsules granules oral liquid and peritoneal dialysis fluid
supported by "pin"-shaped capital platforms further consolidating our industry-leading position. as well as antibiotic intermediates APIs and pharmaceutical packaging materials. The main products cover areas such
as oncology anti-infection parenteral nutrition liquid therapy central nervous system cardiovascular anesthesia and
analgesia respiratory osteoporosis andrology diabetes and rheumatoid arthritis.Corporate Philosophy
Pursuing Truth in Science
and Kindness in Ethics
Corporate Value
Righteous and Non-infusion
Corporate Corporate Vision Infusion Products OTCTrustworthy Products
Excellence-pursuing Culture To become an innovative-
Customer-oriented driven internationally
Team-cooperation competitive pharmaceutical
enterprise with global
influence and a modern
pharmaceutical group with
standardized management
social satisfaction and civilized
and prosperous employees
Innovative Injection APIs and
Packaging Intermediates Medical Devices
Corporate Culture of KELUN PHARMA
Main Products
03 04Opening
Annual Key Performance
2024 ESG Key Performance
Economic performance
Business income with a year-on-year increase of A total of with employees receiving and an annual training
21.81 1.67% 61600 training for expenditure of RMB billion training sessions
conducted throughout the year 1761800 RMB 4878000
Net profit attributable to the parent company with a year-on-year increase of hours in total
RMB 2.94 billion 19.53%
Investments in occupational health and with and
safety management
Social performance 28862400 100% coverage for 100% coverage for RMB employee work-related injury employee production liability
Investment in R&D with a year-on-year increase of accounting for insurance insurance
RMB 2.17 billion 11.20% 9.95% of the total audited
operating revenue for the year 100% coverage 0 case of occupational
of occupational health diseases
Total number of R&D with a year-on-year increase of accounting for checkups
personnel
2855 9.30% 13.06% of the total workforce The donation amount was approximately
2860 RMB 57 million valid 1997 valid patent no product recalls
patent applications grants
Total number of employees with female middle managers 2197 ethnic minority
21864 accounting for Environmental performance48.82% employees Total investment in environmental Total hours of annual Number of violations of
protection environmental protection environmental laws and
Labor contract signing rate coverage rate of employee social trainings regulations
100% security contributions RMB 661.40 million100% 46786 hours 0
overall employee and overall employee
engagement rate satisfaction rate
95%92%
05 06Opening
ESG Rating Honors and Awards
Our 2024 Major Honors
"BB" in MSCI ESG rating
February 2024 March 2024
Chengdu Industrial Boutique (Basic Infusion) Most Caring Donation Enterprise
Chengdu Municipal Bureau of Economy and The People's Government of
Information Technology etc. Sichuan Province
"AA" in CSI ESG rating
March 2024 March 2024
2023 Charity Contribution Award 2024 Caring Enterprise Award
"AA" in WIND ESG rating Sichuan Medical Association Pengzhou Charity Association
(The highest Wind ESG rating among
pharmaceutical companies ranking 1st out
of 291 assessed pharmaceutical companies)
August 2024 September 2024
"A" in SynTao Green Finance ESG rating Exemplary Experience in Quality China's Top 500 Private Manufacturing
Benchmarking in 2024 Enterprises in 2024
China Association for Quality All-China Federation of Industry
and Commerce
07 0808Opening
November 2024
September 2024 September 2024 November 2024 Law-Abiding and Trustworthy Enterprise in
China's Top 100 Pharmaceutical Best Industrial Enterprise in China's Top 100 Pharmaceutical Industrial Enterprises the Pharmaceutical Industry (2023-2024)
Companies in 2023 Pharmaceutical R&D Sector by Revenue (2023-2024)
China Pharmaceutical Industry Information China National Pharmaceutical Industry Taishan Pharmaceutical Forum Taishan Pharmaceutical Forum
Annual Conference Information Center Organizing Committee Organizing Committee
September 2024 December 2024September 2024 December 2024
Outstanding Corporate Social Responsibility Project Excellent Cases of Social Responsibility for Benchmark ESG Integrated Excellent Examples of ESG Practices
in China's Pharmaceutical Industry Chinese Private Enterprises (2024)Governance Enterprise in 2024 Dazong Securities Times
China National Pharmaceutical Industry All-China Federation of Industry China International Fair for Trade in
Information Center and CommerceServices
September 2024 September 2024
Top 100 Manufacturing Enterprises
October 2024 October 2024 Top 100 Enterprises in Sichuan in Sichuan
2024 Chengdu Top 100 2024 Chengdu Top 100 Sichuan Enterprise Federation Sichuan Enterprise Federation
Private Enterprises Manufacturing Enterprises
Chengdu Enterprise Confederation Chengdu Enterprise Confederation
October 2024
Top 100 Private Enterprises in
Sichuan (17th)
November 2024 Sichuan Federation of Industry and
October 2024 Top 50 Self-Innovative Enterprises in the Commerce
2024 Chengdu Top 100 Enterprises Pharmaceutical Industry (2023-2024)
Taishan Pharmaceutical Forum
Chengdu Enterprise Confederation Organizing Committee
09 10Upholding Integrity and Persevering for Long-Term Success
01
Upholding Integrity
and Persevering for
Long-Term Success
KELUN PHARMA upholds integrity and ethics as the
cornerstone of corporate development firmly believing
that a robust governance structure is the foundation for
sustainable growth. In 2024 we further strengthened
the accountability of directors and senior management
enhancing corporate governance transparency and
compliance to ensure all operations strictly adhere
to national laws regulations and business ethics.By continuously refining our internal management
system and reinforcing Party-building initiatives we
are committed to promoting standardized and efficient
governance. Moreover we integrate business practices
with corporate values international standards and
customer expectations actively implementing ESG
principles to create long-term sustainable value for
shareholders employees clients and society at large.This approach supports our pursuit of high-quality
development.
11 12Upholding Integrity and Persevering for Long-Term Success
ESG Governance System ESG Vision
KELUN PHARMA prioritizes corporate social responsibility (CSR) and sustainable development embedding ESG principles Our ESG vision is to practice high-quality ESG management actively respond to the United Nations Sustainable
into our operations through a structured ESG management system that undergoes regular strategy optimization. We Development Goals (SDGs) support the Healthy China initiative and the national goals of peaking carbon emissions and
advocate for transparent communication maintaining close engagement with stakeholders to ensure ESG principles are subsequent carbon neutrality turn our corporate philosophy of "Pursuing Truth in Science and Kindness in Ethics" into
fully reflected in strategy and operation. concrete actions seek health and well-being for more patients and make more diseases to be treated. Moreover we
engage in climate change embrace challenges integrate resources incorporate ESG principles into our development
strategy of "Three Driving Engines and Innovative Growth" effectively fulfill our commitments to all sectors of society
ESG Governance Structure collaborate with our employees and all partners lead industrial sustainable and healthy development promote harmonious development between enterprises employees communities and environment boost advances in medical
technologies and make contributions to all.In compliance with the Company Law of the People's Republic of China the Code of Governance for Listed Companies
and other relevant regulations the Company's Board of Directors has established an Environmental Social and
Governance (ESG) Committee (hereinafter referred to as the "ESG Committee"). The ESG Committee is committed to ESG Management Approach and Strategy
advancing the company's ESG development with the goal of achieving high-quality and sustainable growth. In January
2024 we revised the Working Rules of the Environmental Social and Governance (ESG) Committee further refining We are committed to integrating the concept of sustainable development into our daily operation and management
relevant management rules. practice while maintaining our ESG management strategy consistent with the United Nations Sustainable Development
Our three-tier ESG governance structure is designed as follows: Board of Directors serves as the highest decision-making Goals (SDGs) and taking efforts to achieve excellent performance and continuous progress in key areas so as to promote
body for ESG matters bearing ultimate ESG responsibility. ESG Committee is supervised by the Board of Directors high quality and sustainable development of our Group's business.reporting directly to the Board and taking responsibility for its work to the Board. ESG Working Group operates under the
ESG Committee. R&D innovation
Product responsibility We continuously cultivate deeply into
We strengthen quality management the field of new drug research and
and firmly establish the "Grand development constantly promoting
Quality Concept". We set up a reliable the implementation of innovative
quality control and monitoring system achievements and introducing better
Board of to ensure the safety and effectiveness
treatment solutions for human being
● Review and approve our ESG strategy and objectives and significant matters related of manufactured drugs while to overcome diseases. We explore new
Directors to social responsibility. continuously improving our quality innovative models such as digitization
standards and brand reputation. and artificial intelligence and promote the
upgrading of pharmaceutical innovation
models.● Formulate ESG management policies objectives strategies and structures;
ESG
● Identify ESG trends and assess ESG risks and opportunities facing the Company;
Committee
● Supervise and guide the work of ESG working groups. Environmental protection Social responsibility Employee development
We actively respond to climate We fulfill social responsibilities We advocate simple and friendly
change to achieve synergistic effects and care for patients' health. interpersonal relationships and
in pollution reduction and carbon We actively participate in drug support employee development.emission reduction. We always adhere procurement with quantity Adhering to the people-oriented
to our business philosophy of "giving commitment voluntarily engage principle we aim to create a
priority to environmental protection in national health insurance corporate culture that is diverse
and sustainable development" negotiations and application work equal open inclusive collaborative
pursuing green and sustainable for catalog of drugs of medical and mutually supportive. Our goal is
● Formulate policies and implementation plans in line with our strategy and ESG development. Through continuous insurance and improve our to enable employees to live happily
ESG objectives; investment in environmental production processes. Under the and work joyfully. Meanwhile we protection and substitution of premise of ensuring product quality continuously improve employee
Working ● Manage ESG-related risks and issues in our daily operations; clean energy we advocate energy we reduce drug costs and thereby welfare benefits thereby enhancing
Group conservation and emission reduction lower drug prices so as to relieve their sense of belonging happiness
● Coordinate and promote the implementation of ESG-related problems; to form a circular economy model and patients' burden and increase and honor.Prepare annual ESG reports etc. further to promote green production drug accessibility. We always ● and green ecology. firmly serve as pioneers in national
inclusive healthcare and guardians
of patients' lives and health.
13 14Upholding Integrity and Persevering for Long-Term Success
Stakeholder Communication Analysis of Material Topics
We are fully aware of the vital role of various stakeholders in driving our sustainable development. Based upon a In 2024 based on national macro policy orientation domestic and international social responsibility standards research
thorough review we have identified eight core stakeholder groups including government/regulatory bodies/associations industry benchmarking and combined with our business development strategy operational management status and key
shareholders/investors suppliers customers employees communities potential users and other business partners. We concerns of stakeholders we conducted analysis of material topics through identification evaluation and confirmation
actively advocate and practice a multi-dimensional communication strategy striving to comprehensively and sincerely processes. There were 26 ESG material topics selected to actively respond to stakeholder demands. By assessing
listen to the authentic voices from all parties. This approach enables us to achieve sustainable development goals "importance to KELUN PHARMA's development" and "importance to stakeholders" we prioritized these ESG material
together with all stakeholders share the fruits of our enterprise's growth and jointly create social value. topics to determine the focus and sequence of sustainability management for the year and to establish long-term and
specific ESG goals.Stakeholders TOPICS OF INTEREST COMMUNICATION AND RESPONSE Evaluation Process for Material Topics
Tax Compliance ● Supervision and Inspection by Administrative ●
Authorities
Government/ ● Carbon Emission Management ● Periodic Work Reports and Official
Regulatory Bodies/ ● Water Resource Management Correspondence Emails and Phones
Associations ● Climate Change
● Regular Communication
● Compliant Operation
● Policy Consultation and Implementation Step 1 Step 2 Step 3
●
Compliant Operation Periodic Reports to Shareholders' General ● Meeting
● Business Ethics and Anti-corruption
Shareholders/ ● Official Website Information Disclosure
●
Investors Stable Returns ● Investor Hotline Topic Benchmarking and Stakeholder Communication Topic Importance Assessment
● ESG Management Approach and
●
Strategy Exclusive Appointment and Inquiry Email for
Screening
Investors
B a s e d o n o u r b u s i n e s s W e a c t i v e l y m o n i t o r e d We conducted analysis of
● Sustainable Supply Chain Supplier Exchange and Inspection development and current s o c i a l n e e d s a n d p o l i c y material topics to identify ●
● Business Ethics and Anti-corruption
● Supplier Training ESG management status trends including regulatory top ics most re levant to
Suppliers ● Energy Usage
● Supplier Evaluation with reference to the latest requirements sustainability the company's sustainable
● Industrial Development and
●
Cooperation Procurement Bidding Process n a t i o n a l s u s t a i n a b i l i t y s t a t u s a n d t r e n d s a n d deve lopment . Based on
pol icies and mainstream capita l market dynamics. stakeholder concerns the
● Product Safety and Quality domestic and international Through multiple channels we relevance of topics to the
● Responsible Marketing ● Customer Satisfaction Survey sustainabil ity standards maintained communication company's development and
●
Customers Compliant Operation
● Communication with Customers via Email and and benchmarking against a n d e n g a g e m e n t w i t h their impact on stakeholders
● Carbon Emission Management Phone for Service and Complaint Handling
● Universal Health and Access to ● Customer Visits leading peers' disclosure stakeholders building and were evaluated and the
Healthcare practices and mainstream sustaining necessary positive topics were prioritized by
ESG rating agency focus relationships to understand importance.● Employee Compensation & Benefits ● Internal Emails and Announcements
areas in capital markets we stakeholder perspectives on
● Occupational Health and Safety ● Corporate Culture Platform
Employees ● Compliant Operation ● Employee Suggestion Platform made some upgrades and sustainability matters.● Equality and Diversity ● Internal Publication adjustments base on the ESG
● Training and Education ● Company Labor Union topic list identified in 2023.● Public Welfare and Charity
● Health Knowledge Popularization Activities
● Universal Health and Access to
Communities ● Healthcare Public Enquiries and Complaints
●
Carbon Emission Management Visits and Interviews●
●
● Waste Management External Announcements and Disclosure
● Compliant Operation ● Information Disclosure
Potential Users ● Carbon Emission Management ● Official Websites
● Waste Management ● Social Media
● Employee Compensation & Benefits ● Business Communication and Agreement
●
Other Partners Compliant Operation Signing
● Carbon Emission Management ● Industry Activities e.g. Exhibitions Seminars
● Climate Change ● Satisfaction Surveys
15 16Upholding Integrity and Persevering for Long-Term Success
Shareholders' General Meeting Strategy Committee
Board of Supervisors Remuneration and Evaluation Committee
Board of Directors Nomination Committee
Office of the Board of Directors ESG Committee
(Securities Department)
General Manager
Audit Committee
Deputy General Manager Internal Audit Department
KELUN PHARMA Governance Structure
For information on the current status of corporate governance and the tenure of directors supervisors and senior
management please refer to Section 4 "Corporate Governance" of the KELUN PHARMA 2024 Annual Report.
2024 ESG Material Topics Importance Matrix of KELUN PHARMA
During the reporting During the reporting During the reporting with an average
period we held period we held period we held attendance rate of
Environment Scope Social Scope Governance Scope
3 directors maintained at Shareholders' 6 Board of Supervisors' 9 Board meetings
1 Environmental compliance 8 Occupational health & 14 S upply chain 20 C orporate governance and
management safety management compliant operation General Meetings meetings 100%
2 C arbon emission management 9 Product safety and quality 15 U niversal health and 21 E SG management strategy
access to healthcare
3 T oxic emissions and waste 10 Employee compensation 22 C omprehensive risk
management and benefits 16 I ntellectual property management
protection
4 Energy utilization 11 Employee training and 23 B usiness ethics and anti-
development 17 Responsible marketing corruption Board Re-election
5 Water resource management
12 Product R&D and 18 Rural revitalization and 24 Board diversity
6 E cosystem and biodiversity technological innovation social contribution
conservation 25 Data security and privacy
13 Labor rights protection 19 Industry development protection
7 Climate change response and Members of the Board of Directors are nominated by the Nomination Committee and approved by the Board of Directors and collaboration
mitigation 26 Stakeholder communication and the Shareholders' General Meeting. During the reporting period we conducted a Board re-election as follows:
Re-election of Independent and Non-independent Directors for the Board of Directors
Corporate Governance System
The three-year term of the Company's seventh Board of Directors expired. In accordance with the
Governance Structure 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 as well as the provisions of the Company's Articles of Association the
Nomination Committee after consulting with eligible nominating entities nominated Mr. Liu Gexin Mr. Liu
We comply with the requirements of the Company Law of the People's Republic of China the Securities Law of the Sichuan Mr. Ge Junyou Mr. Zhou Xianxiang Mr. He Guosheng and Mr. Wang Guangji as candidates for
People's Republic of China the Rules for the Listing of Stocks on the Shenzhen Stock Exchange the Guidelines for Articles non-independent directors of the eighth Board of Directors and nominated Mr. Ren Shichi Mr. Gao Jinbo
of Association of Listed Companies the Code of Governance for Listed Companies the Shenzhen Stock Exchange Self- and Mr. Wang Fuqing as candidates for independent directors of the eighth Board of Directors. On May
regulatory Guidelines for Listed Companies No. 1 – Standardized Operation of Main Board Listed Companies and other 15 2024 we held the 2023 Annual Shareholders' General Meeting where cumulative voting was used to
laws regulations and normative documents to standardize corporate operations continuously improve the corporate separately vote on the aforementioned non-independent and independent director candidates and the
governance structure and fully leverage the roles of the Shareholders' General Meeting the Board of Directors and the relevant proposals for the Board re-election were approved.Board of Supervisors in major decision-making operational management and supervision ensuring compliant operations
of the Company.
17 18Upholding Integrity and Persevering for Long-Term Success
The composition of the Company's special committees and the number of meetings held are as follows:
Board diversity
Committee Composition Number of Meetings Held in 2024
9 Chairman: Ren Shichi; Members: Ou Minggang Gao Jinbo 3The Company's Board of Directors consists of directors including 3 independent directors accounting for Audit Committee
33.33% and 1 executive director. The Chairman of the Board is Mr. Liu Gexin who is responsible for overseeing the Chairman: Ren Shichi; Members: Gao Jinbo Wang Fuqing 5
implementation of Board resolutions. ESG Committee Chairman: Liu Sichuan; Members: He Guosheng Ren Shichi 1
Name Independent Director or
Chairman: Gao Jinbo; Members: Liu Sichuan Ren Shichi 1
Not Gender Age Education Professional background Nomination Committee
Chairman: Wang Fuqing; Members: Liu Sichuan Gao Jinbo 1
Liu Gexin Non-independent Director Male 74 Master Pharmaceutical Industry Expert Chairman: Ren Shichi; Members: Liu Sichuan Ou Minggang 1
Remuneration and
Liu Sichuan Non-independent Director Male 41 Master Pharmaceutical Industry Evaluation CommitteeExpert Chairman: Gao Jinbo; Members: Liu Sichuan Ren Shichi 1
Ge Junyou Non-independent Director Male 53 PhD Pharmaceutical Industry Chairman: Liu Gexin; Members: Ou Minggang Gao Jinbo Ren Shichi 3Expert Strategy Committee
Chairman: Liu Gexin; Members: Liu Sichuan Ge Junyou Wang 1
He Guosheng Non-independent Director Male 57 PhD Economic and financial Guangji Wang Fuqingexperts
Wang Guangji Non-independent Director Male 72 PhD Pharmaceutical Industry The Audit Committee of the Company consists of three independent directors. Mr. Ren Shichi the chairman has a senior Expert background in accounting. Mr. Gao Jinbo a member has extensive experience in pharmaceutical industry compliance.Mr. Wang Fuqing another member has profound knowledge and practical experience in the pharmaceutical industry.Zhou Xianxiang Non-independent Director Male 51 Bachelor -
Ren Shichi Independent Director Male 55 PhD Accounting Expert One Share One Vote
We adhere to the principle of "one share one vote". Shareholders enjoy equal voting rights for each ordinary share when
Gao Jinbo Independent Director Male 64 Master Compliance and Risk Expert electing directors or supervisors or voting on major corporate decisions. We have no preferred shares or "golden shares".As of the end of the reporting period the total number of shareholders with restored voting rights for preferred shares
Wang Fuqing Independent Director Male 62 Master Pharmaceutical Industry was zero.Expert
Executive Equity Policy
Special Committees of the Board of Directors In accordance with the Code of Governance for Listed Companies our Articles of Association and the Working Rules
for the Remuneration and Evaluation Committee of the Board of Directors and considering industry conditions actual
operational performance and business assessment requirements we formulated the 2024 annual senior executives
The Company's Board of Directors has established the Audit Committee Remuneration and Evaluation Committee compensation plan. Senior executives include the General Manager Deputy General Managers Board Secretary and
Nomination Committee Strategy Committee and Environmental Social and Governance Committee ("ESG Committee") Chief Financial Officer. Senior executives receive salaries according to the company's relevant compensation regulations
with separate rules of procedure formulated for each special committee. The special committees of the Company are based on their specific management positions within the company. Their compensation consists of two components:
accountable to the Board of Directors and perform their duties in accordance with the Company's articles of association fixed salary and variable salary. The variable salary is assessed and disbursed at the end of the year based on their job
and the authorization of the Board of Directors. Proposals from the special committees shall be submitted to the Board of positions performance and the company's operational performance.Directors for deliberation and decision.In 2024 Mr. Liu Sichuan the Company's Executive Director and General Manager received a total compensation of RMB
4.8883 million. His compensation details are shown below:
Fixed Compensation (RMB 10000) Variable Compensation (RMB 10000)
Executive Director Total*
Member (RMB 10000)
Salary Benefits Annual Bonus
Liu Sichuan 420.00 8.83 60.00 488.83
*Note: The total compensation differs by RMB 88300 compared to the "total pre-tax remuneration received from the Company" item in the
2024 annual report which represents the difference in welfare benefits (Amount of social insurance and housing fund contributions borne by the
company).
19 20Upholding Integrity and Persevering for Long-Term Success
ESG Performance Linked to Executive Compensation Pursuing high-quality sustainable development we integrate risk management requirements into corporate
management and business processes constructing three lines of defense for risk management:
The Company has established the ESG Assessment and Performance Incentive Adjustment Policy and disclosed it on
the official website clarifying the linkage between ESG performance assessment and the performance assessment
and bonus of management at all levels. ESG indicators are included in the performance assessment table for senior
executives and heads of headquarters departments. The maximum score for performance is 100. If the ESG indicator
assessment fails to meet the annual target requirements corresponding deductions will be made in the performance
assessment scores of management personnel ranging from 2 to 20 points. In addition the Company also includes EHS-
related assessments in the ESG indicator assessment in the performance assessment table of general managers and EHS
department heads of subsidiaries (branches). This includes assessments of compliance with pollutant emission standards
the number of environmental administrative penalties and the certification of environmental management systems and First Line of Defense Second line of defense Third Line of Defense
occupational health and safety management systems. The weightage of these assessments ranges from 5% to 10% in
order to implement the Group's environmental safety and health management requirements. Business units identifying The Internal Control and The Internal Audit Department
and controlling risks during Compliance Department and conducting independent
operations; the Department of Legal Affairs supervision and inspections and
Compensation Clawback and Malus Provisions manage the risks of business reporting directly to the Audit
units collectively; Committee
The Remuneration and Evaluation Committee of the Company has broad discretionary power. If any senior management
engages in improper conduct that harms the company's interests through the misuse of their affiliations accepting bribes
or other illegal income misappropriation of Company assets violation of fiduciary duties or violation of laws regulations Systematic Monitoring Mechanism
or Company bylaws during the execution of their duties they shall be held liable for compensation and such behavior
shall be reflected in the annual performance assessment which is linked to bonuses.We systematically organize subsidiaries (branches) and direct departments to conduct internal control self-assessments
annually aiming to comprehensively identify potential internal control deficiencies and take timely corrective measures
Internal Control and Risk Management System to ensure the effective operation of the internal control system. During the reporting period we carried out an annual internal control self-evaluation across the Group covering units whose operating revenue accounted for approximately
93.04% of the Group's consolidated operating revenue.
By the requirements of the Company Law of the People's Republic of China the Securities Law of the People's Republic
of China the Rules for the Listing of Stocks on the Shenzhen Stock Exchange the Basic Standards for Enterprise Internal Simultaneously in accordance with the Internal Audit System the Internal Audit Department independently audits the
Control and other relevant laws and regulations combined with our own operations and management needs we have establishment and implementation effectiveness of the Company's internal control system annually covering subsidiaries
prepared our internal control documents including but not limited to the Internal Control Manual the Implementation (branches) and direct departments across all business segments including production marketing logistics procurement
Plan for Internal Control Management the Compliance System Documents to ensure the effectiveness and adaptability finance and human resources. To enhance the pertinency and effectiveness of audits the Internal Audit Department
of the design and implementation of internal controls. determines differentiated audit priorities each year based on business types operational characteristics and risk profiles
while dynamically adjusting audit plans in line with the Company's annual strategic goals and key work trends.During the reporting period we continuously optimized our internal control evaluation mechanism and refined the
internal control manual specifying standards and procedures in detail to provide clear guidance for business operations. Additionally in compliance with relevant laws regulations and regulatory requirements we engage a qualified
Meanwhile we established internal control teams in all subsidiaries (branches) and direct departments to ensure the accounting firm annually to independently audit and evaluate the effectiveness of internal controls over financial
effective implementation of internal control procedures in business units. reporting during the reporting period.
21 22Upholding Integrity and Persevering for Long-Term Success
Business Ethics Business Ethics Audits
Anti-commercial Bribery and Anti-corruption Under the guidance of the Audit Committee and in accordance with the Working Rules for the Audit Committee and the Internal Audit System the Internal Audit Department conducts regular annual audits on business ethics and the
implementation of related policies. The audit scope covers all direct departments and subsidiaries (branches).We strictly comply with laws and regulations such as the Anti-unfair Competition Law of the People's Republic of China
the Interim Provisions on Prohibiting Commercial Bribery the Criminal Law of the People's Republic of China as well as By examining and overseeing the establishment and implementation of the company's internal control system the
the provisions of the our Articles of Association. We have formulated and rigorously implemented institutional documents authenticity and integrity of financial information and the integrity of personnel in key positions and processes the
including the Code of Business Conduct Anti-Commercial Bribery System and Anti-Fraud System. During the reporting Internal Audit Department ensures the effectiveness of the company's business ethics anti-corruption and anti-
period to enhance the our business ethics and anti-corruption system and strengthen compliance and integrity we newly commercial bribery measures. Additionally we assess commercial bribery and corruption risks across business areas
issued the Anti-Commercial Bribery System and updated the Code of Business Conduct both of which were publicly identify high-risk segments and prioritize them in audits. To ensure management effectiveness compliance and
disclosed on the official website. business ethics indicators have been incorporated into the performance evaluations of subsidiaries (branches) and direct
departments.The Audit Committee of Board of Directors serves as the highest supervisory body responsible for anti-corruption
anti-commercial bribery and anti-fraud management. Relying on the Internal Audit Department Internal Control and
Compliance Department Department of Legal Affairs and Human Resources Department it governs supervises and
audits the business ethics conduct of all employees and partners. Internal control team members and compliance officers As of the end of the reporting period
in subsidiaries (branches) and direct departments are responsible for implementing and managing business ethics within the Internal Audit Department of the Company has completed at least one audit of the
their respective units and reporting regularly. major subsidiaries within the group covering the entire business process. The examination
In addition the Company actively cooperates and exchanges in the work of business ethics anti-commercial bribery and of business ethics and the execution of relevant systems has been a key focus of the
anti-corruption with external parties. comprehensive internal control audit.Anti-Corruption Oversight of Business Partners
Actively participating in industry Cooperation with the Engaging in external
self-discipline government and law exchanges and learning
enforcement agencies We integrate applicable clauses of the Code of Business Conduct into
The Company has joined the The Company conducts
contract management with suppliers and business partners. We prohibit all
Enterprise Anti-Fraud Alliance The Company maintains exchange activities with other
forms of commercial bribery require all employees to adhere to the highest
(formerly known as the China close communication and enterprises within and outside
standards of business ethics and encourage upstream and downstream
Enterprise Anti-Fraud Alliance) cooperation with government the industry learning from
partners and other stakeholders to support accept and implement the
and actively fulfills its social regulatory departments and law advanced experiences and
Anti-Commercial Bribery System and Code of Business Conduct to conduct During the reporting period
responsibilities as a member enforcement agencies keeps up practices in anti-commercial
business ethically.enterprise of the China with changes in relevant laws bribery and anti-corruption
Pharmaceutical Industry Association and regulations and cooperates continuously improving its own 100% of core During the supplier admittance stage we include anti-corruption as
and the Provincial Federation with government departments management systems and a screening criterion requiring all suppliers to complete the Sunshine suppliers conducting business
of Industry and Commerce. The in carrying out special actions enhancing the professional Agreement Training Video on KELUN PHARMA's official procurement with the Company signed the
Company actively participates in against commercial bribery and capabilities of risk control and platform achieving 100% implementation. In business collaborations Sunshine Agreement.the formulation and compliance corruption. anti-fraud personnel. contracts with partners include anti-commercial bribery clauses and the
of industry self-discipline rules Sunshine Agreement clearly defining the obligations and responsibilities of
promoting the construction of distributors and agents in combating commercial bribery.business ethics and anti-commercial
bribery and anti-corruption work in
the industry.
23 24Upholding Integrity and Persevering for Long-Term Success
Whistleblowing Channels and Whistleblower Protection System
We are committed to building a healthy and win-win business environment encouraging suppliers partners and all
employees to participate in the supervision of the integrity management system. The Whistleblower Protection and
Reward System has been formulated and disclosed on the official website to incentivize all parties to proactively expose
illegal activities such as corruption and occupational crimes.In handling whistleblowing matters we strictly comply with national laws regulations and internal regulations
implementing full-process confidentiality management for whistleblowers and the information they provide. From case
acceptance documentation investigation and resolution to archiving and follow-up we have established rigorous
information protection mechanisms to resolutely prevent leaks or loss of whistleblowing information.Internal Audit Department: 028-82860620 WeChat: 13710096516
Integrity Kelun WeChat Official Account
Whistleblowing Department of Legal Affairs 028-82860470 WeChat/E-mail Integrity Kelun Enterprise WeChat Platform
Phone: Human Resources Department: 028-82860386 E-mail: jubao@kelun.com
Internal Audit Department/Department of Legal Affairs/Human Resources Department Sichuan
Mailing Kelun Pharmaceutical Co. Ltd. 36 Baihua West Road Qingyang District Chengdu P.R. China
Address Fair competition
Business Ethics Training We adhere to lawful and ethical operations strictly complying with laws such as the Anti-Money Laundering Law of the People's Republic of China and the Anti-Unfair Competition Law of the People's Republic of China. Internal compliance
management systems including the Code of Business Conduct Anti-Fraud System and Trade Secret Protection and
We continuously strengthen business ethics development. In accordance with the Code of Business Conduct we Non-Competition System have been established. The Code of Business Conduct explicitly requires adherence to fair
conduct at least one annual online/offline training session for all employees (including interns and other contracted competition principles and compliance with anti-monopoly laws and regulations in all jurisdictions of operation ensuring
workers) covering business ethics anti-fraud anti-corruption and anti-commercial bribery with mandatory participation. healthy competition within legal frameworks and avoiding direct or indirect monopolistic practices prohibited by law.Additionally we provide at least one annual online/offline business ethics training session for upstream and downstream During the reporting period the Department of Legal Affairs added anti-monopoly clauses to sales contract templates.partners.For participation in domestic and international markets employees are required to uphold fair market order and comply
Upholding integrity and honesty as core values we enhance compliance awareness of anti-commercial bribery and anti- with anti-unfair competition laws and regulations in China and operational jurisdictions.corruption through systematic training and diversified communication. A "regular + specialized" training mechanism is
adopted including annual anti-fraud training during the compliance season and targeted sessions based on business
needs. During the reporting period the Internal Audit Department organized over 10 anti-fraud training sessions
including company-wide specialized and new employee training. Meanwhile subsidiary internal audit departments
independently conducted over 5 anti-fraud and anti-commercial bribery training sessions. To reinforce compliance Equal treatment of SMEs
awareness and effectively communicate corporate values anti-fraud training has been included as a mandatory course
for new employees. The Company adheres to the principle of "training must be followed by examinations" and requires
all trainees to participate in the exams and obtain a passing score. We uphold the principle of "fair competition and
shared development" actively fulfi l l ing social
responsibi l i t ies by treating SMEs equal ly and
fostering a fair transparent business environment.With practical actions we fulfill our corporate social
responsibility contributing to a harmonious and win-
win industrial ecosystem. We consistently maintain
equal payment terms for SMEs without discrimination
based on enterprise size adhering str ict ly to
contractual payment periods for all SMEs.Department of Legal Affairs Conducts Anti-
commercial Bribery Training Anti-fraud Training
25 26Upholding Integrity and Persevering for Long-Term Success
Strengthening Investor Communication Investor Communication
We strictly comply with the Shenzhen Stock Exchange Self-regulatory Guidelines for Listed Companies No. 1 – We support investors in fully understanding our operations and development trends by establishing multi-channel
Standardized Operation of Main Board Listed Companies the Guidelines for Investor Relations Management of Listed communication platforms for domestic and international investors.Companies the Administrative Measures on Information Disclosure by Listed Companies as well as internally established
systems such as the Information Disclosure Management System and the Annual Report Information Disclosure Material
Errors Accountability System. These measures strengthen the standardization of our information disclosure management
and investor relations work enhance corporate governance standards and safeguard the legitimate rights and interests Interactive Platform Analyst Meeting
of the Company investors and other stakeholders.Disclosure of information General Meeting of On-site Research
Shareholders Investor
We strictly adhere to the principles of information disclosure fulfilling our disclosure obligations truthfully accurately Communication
completely timely and fairly. We continuously deepen the institutionalization and standardization of information Methods
disclosure work strengthen environmental social and corporate governance (ESG) disclosures and consistently improve Earnings Briefing Investor Hotline Call
transparency. From 2020 to 2023 we received an "A" rating in the annual information disclosure assessment by the
Shenzhen Stock Exchange for four consecutive years.Roadshows Investor E-mail
During the reporting period including and
we disclosed a total of
220 144 announcement 76 non-announcement documents documents online documents
2023 Online Earnings Briefing 2023 Annual Shareholders' General Meeting
During the reporting period:
We held conducted
1 earnings briefing 3 online targeted research sessions
responded to answered and addressed
73 inquiries on the Interactive 718 investor 718 hotline
Platform all replied to on time hotline calls inquiries
27 28Upholding Integrity and Persevering for Long-Term Success
Honors and Awards Information Security Assurance
Information Security Management System
We attach great importance to the protection of clients' business
secrets data information and personal privacy strictly complying
with laws and regulations such as the Personal Information Protection
Law and Cybersecurity Law as well as relevant policies and industry
standards. During the reporting period we promoted the improvement
and construction of our institutional framework updating and issuing 19
network and information security-related systems thereby establishing
systematic network and information security management requirements.Our information systems have achieved Level 2 Certification for Classified
Protection of Cybersecurity meeting national standards in physical
2023 Golden Disclosure Award 2024 Best Practices Award for security network security and data security. This not only enhances
Listed Company Board Offices system security and reliability but also strengthens trust among clients SAP System Level 2
and partners reduces security and legal compliance risks and provides Protection Certificate
robust support for business development and market competitiveness.Information Security Protection Initiatives
During the reporting period we implemented a series of information security protection measures:
Engaged third-party cybersecurity service providers to conduct network security risk assessments of our
information systems promptly identifying potential risks and implementing corrective measures;
Hired third-party cybersecurity service providers to perform penetration tests on our information systems
identifying and remedying potential security vulnerabilities to enhance overall system security and reduce
2024 Outstanding Practices 2024 "Exemplary Investor attack risks;
Award for Listed Company Relations Model" in High-Quality
Boards Development Practices of Listed
Companies Commissioned third-party cybersecurity service providers to conduct source code audits identifying and
fixing security flaws in the code to improve system stability and security thereby minimizing security risks
caused by code vulnerabilities;
Internally conducted anti-virus inspections vulnerability scans and deployed database leak prevention
measures with regular scans ensuring 100% server coverage for anti-virus checks effectively preventing
virus and malware intrusions patching vulnerabilities promptly and securing servers. Database protection
devices were deployed to mitigate data leakage risks;
Implemented internet port consolidation internally reducing the attack surface exposed online lowering the
likelihood of cyberattacks and enhancing network security.During the reporting period we experienced zero information security incidents or breaches of
client privacy.
29 30Upholding Integrity and Persevering for Long-Term Success
Information Security Emergency Management
2024 Information Security Awareness Training
We have established an emergency management organizational structure consisting of the emergency decision-making
level (Cybersecurity Leadership Group) emergency command level (Cybersecurity Management Group) and emergency
execution support level (Cybersecurity Implementation Group). To enhance our capability in handling cybersecurity In May 2024 the Informat ion
emergencies minimize the occurrence and impact of such incidents to the greatest extent and ensure safe and Department organized information
sustainable operations we have formulated the Cybersecurity Overall Emergency Plan during the reporting period as the security awareness training for all
overarching guideline for business continuity and recovery efforts. employees. The training included
c a s e s t u d i e s o f i n f o r m a t i o n
security incidents introduction
to common attack methods and
Emergency Drills and Training cultivation of information security
awareness aiming to enhance
We conduct at least one annual cybersecurity emergency drill to simulate responses to general cybersecurity incidents. employees' information security
These drills evaluate the effectiveness of emergency systems operational mechanisms and resource allocation of and confidential ity awareness Information Security Awareness Training
emergency supplies facilitating to identify issues refine emergency plans and improve response capabilities. Additionally and ensure compliance with the
we fully utilize various communication channels and other effective publicity methods to strengthen the dissemination company's information security
of laws regulations and policies related to the prevention and handling of sudden cybersecurity incidents. We organize behavior standards.training sessions on cybersecurity emergency management and incident response to enhance the awareness and skills of
information department information managers and emergency responders in risk prevention.Cybersecurity Emergency Drill
In December 2024 we cooperat- During the reporting period
ed with a third-party cybersecuri- we conducted
ty service provider to conduct an
emergency drill improving com- 3 cybersecurity training sessions 4 security awareness campaigns 1 emergency drill
prehensive response capabilities
for cybersecurity incidents.Emergency Drill Meeting
31 32Excellence in Craftsmanship a Commitment to Life
02
Excellence in
Craftsmanship a
Commitment to Life
KELUN PHARMA is dedicated to enhanc ing the
accessibility and affordability of medical services and
pharmaceuticals thereby driving the development
of inclusive healthcare. We actively fulfill our social
responsibilities by continuously innovating in R&D
and optimizing our product portfolio to ensure high-
quality medicines reach a broader patient population.Additionally KELUN PHARMA is deeply committed to
public welfare and charitable initiatives supporting
medical aid health education programs and collaborating
extensively with various sectors to expand healthcare
coverage. Our goal is to bring premium medical resources
to every household collectively shaping a healthier future
for all.
33 34Excellence in Craftsmanship a Commitment to Life
Product R&D and Innovation
During the reporting period our accounting for with a year-on-year increase of
KELUN PHARMA firmly believes that innovation is the soul of corporate competitiveness. Guided by the core objective R&D investment reached RMB
of "scientific strategic layout to drive sustainable growth and deliver superior treatment options for patients" we align 9.95% of our audited 11.20%
our efforts with market value and national policies. By setting clear R&D innovation strategic goals strengthening 2.17billion annual revenue
independent R&D capabilities and fostering external cooperations we have built a robust product pipeline consistently
providing patients and users with high-quality accessible products.Core Strategies for R&D and Innovation of KELUN PHARMA
R&D Team
Novel Drug Addressing unmet clinical needs with differentiated globally potential competitive
Development innovative drugs We have established a highly qualified scientific research team with a
rational talent structure and international standards. During the reporting
period the R&D team continued to expand reaching 2855 members
accounting for 13.06% of the total workforce with a year-on-year increase of
9.30%.
High-quality Maintaining leadership in China's generic drug R&D and as a top supplier for To motivate R&D personnel to continuously enhance their research and During the reporting periodthe
Generic Drug national centralized procurement through scientific product planning and process innovation capabilities we have established a comprehensive internal R&D team continued to expand
Development management system including the R&D Project Assessment and Reward Scheme and reaching
Performance Management System creating a multi-channel promotion
system to ensure smooth career development for R&D personnel. 2855 members
Additionally a project assessment and reward mechanism has been
Further strengthening the construction and iterative upgrading of ADC platforms implemented for R&D and innovation achievements with outstanding R&D accounting for
Technology while developing new technology platforms to maintain pipeline innovation and personnel incentivized through annual performance evaluations employee Platform
Construction sustainability; enhancing the application of artificial intelligence in innovative drug recognition compensation adjustments and equity grants. 13.06% of the
R&D processes to improve R&D efficiency and success rates
total workforce
R&D Pipeline and Progress with a year-on-year increase of
Clinical
Trials and Ensuring all R&D activities adhere to international and regional clinical trial standards We continue to solidify our R&D strategic positioning and further advance 9.30%
Regulatory and supervision requirements safeguarding patient safety and data reliability
Compliance our strategic layout in the global pharmaceutical market. To date we
have initiated over 460 drug research projects targeting domestic and
international markets including over 400 generic and improved drugs with
cluster complexity distinctive and cost advantages as well as over 30
R&D Innovation System innovative drugs.We have fully leveraged domestic and international pharmaceutical research talent and other competitive resources to
establish a comprehensive multi-technology R&D system with full-functional platforms. This system is structured with
Kelun Pharmaceutical Research Institute as the core entity focusing on high-end generic drugs Kelun-Biotech specializing Innovative Drugs
in innovative drug research and Ruikang Biotech dedicated to synthetic biology products and enzyme engineering. This
framework has created a novel R&D model that combines domestic-led forward development with overseas technological We focus on unmet clinical needs strategically developing innovative drugs with differentiated advantages and
feedback as complementary support achieving full alignment with international standards. We rely on national- international potential. The R&D pipeline includes over 30 innovative drug projects primarily in oncology along with
level innovation platforms such as National Enterprise Technology Centers Postdoctoral Research Workstations and immunology and other therapeutic areas forming disease clusters and product iteration advantages. Additionally we
Engineering Technology Research Centers to conduct high-level cross-disciplinary and cross-regional collaborations with leverage big data and artificial intelligence to empower innovation capabilities thereby improving the efficiency and
knowledge alliance institutions continuously expanding our product lines and R&D pipelines in core advantageous fields. success rate of innovative drug development.We attach great importance to continuously improving our R&D capabilities. By persistently increasing R&D investment During the reporting period Kelun-Biotech received National Medical Products Administration (NMPA) acceptance
we have procured internationally leading scientific instruments and equipment such as high-precision microplate readers for 3 NDAs 5 new molecular INDs and 1 Breakthrough Therapy designation. Jietaila advanced both domestic and
large-scale bioreactors and high-performance liquid chromatography-mass spectrometers providing researchers with international clinical research resulting in progress in 4 new indications into Phase III registration clinical trials in China
accurate and efficient experimental tools to accelerate the R&D process and improve quality. With our own profit and effectively advancing 8 China registration clinical trials. Furthermore innovative clinical trial data were prominently
accumulation and external financing we actively seek government research project funding tax incentives and other featured at top academic conferences such as AACR ASCO and ESMO garnering global attention. Key R&D projects of
policy support to ensure sufficient funding for R&D projects and provide stable financial guarantees for R&D work. Kelun-Biotech can be found in its "Annual Results Announcement for the Year Ended December 31 2024" .
35 36Excellence in Craftsmanship a Commitment to Life
Generic Drugs
Research Progress on Antibiotic Resistance in CHUANNING BIOTECH
Through in-depth analysis of pharmaceutical market trends and national policy directions we continuously develop high-
value generic drugs to meet the demand for more effective and safer clinical treatments. Core advantage products
and iterative product clusters have been established in areas such as parenteral nutrition bacterial infections and fluid In response to the expanding risk of antibiotic resistance and to promote the safe utilization of antibiotic residues
balance with gradual expansion and strengthening in anesthesia and analgesia reproductive health central nervous CHUANNING BIOTECH has undertaken several initiatives in the field of antibiotic resistance research.system and other chronic disease areas. Besides we continue to accelerate the development of complex APIs complex
formulations NDDS and improved innovation projects while implementing the construction of refined whole-process The research on antibiotic resistance focusing on erythromycin penicillin and
management system to ensure project delivery on schedule and form multi-series product clusters. Analyzing the cephalosporin antibiotics systematically examines the underlying causes of
mechanisms of resistance in major resistant strains. This research specifically concentrates on key
During the reporting period we achieved 34 production approvals (including 5 first-to-market) 3 clinical approvals and antibiotic resistance mechanisms such as the horizontal transfer of resistance genes and drug target
submitted 50 production applications further strengthening and enriching our iterative product pipeline in core areas modifications at the genetic level.such as parenteral nutrition infections and anesthesia/analgesia as well as our chronic disease product pipeline.A targeted approach has been taken to develop technical solutions for resistance
Establishment of gene detection and a safety assessment system for antibiotic residues. This
a standardized system covers the entire process of gene screening quantitative analysis and
Synthetic Biology evaluation system ecological risk assessment providing a scientific basis for the safe utilization of
antibiotic residues.Our second-tier subsidiary Ruikang Biotech has built upon its existing 4 chassis strains and compound platforms to
significantly enhance R&D efficiency by fully utilizing its automated high-throughput strain construction and screening Based on fluorescence quantitative PCR technology absolute quantification
platform. Currently Ruikang Biotech has completed strain construction small-scale fermentation and extraction process methods for erythromycin resistance genes ermB ermC and ermQ have
optimization for products such as cosmetic active ingredients feed additives and nutraceutical raw materials with some Development of been successfully established. Currently efforts are underway to accelerate
products undergoing trial production at CHUANNING BIOTECH. precise resistance gene
detection technology the optimization of detection methods for core resistance genes of penicillin
cephalosporins and other major antibiotics forming a multi-plex detection
Antimicrobial Resistance technology system that covers mainstream antibiotics.Through years of R&D breakthroughs and technological accumulation our subsidiary CHUANNING BIOTECH has
established a large-scale industrial production system in the field of antibiotic intermediates. Its products cover key
intermediates for macrolide and broad-spectrum antibiotics with thiocyanate erythromycin cephalosporin intermediates R&D Collaborations
and penicillin intermediates ranking among the top globally.As antimicrobial resistance becomes increasingly severe worldwide the rational use of antibiotics has become a critical We actively respond to the national strategy of Belt and Road and the 14th Five-Year Plan for the Development of the
issue for safeguarding human health. As an R&D and manufacturing enterprise of anti-infective drugs we recognize Pharmaceutical Industry and seek in-depth cooperation with the world's top pharmaceutical R&D institutions and
antibiotic resistance as a major global public health risk. We actively respond to national initiatives by promoting rational enterprises. The overseas layout of the production and R&D includes Kelun Kazakhstan and Kelun Lanka building a
antibiotic use through awareness campaigns standardized skin testing and scientific popularization so as to reduce diversified international research network.antibiotic overuse and contribute to curbing the development and spread of resistance.Progress in Kelun-Biotech's Collaboration with Ellipses Pharma
We actively participate in public welfare activities We have consistently disseminated the latest
and academic conferences to advocate for academic concepts and trends through our
rational antibiotic use. We support the "Pei Ying WeChat public platform ""KELUN E Medicine" In March 2021 Kelun-Biotech entered a collaboration and licensing agreement with Ellipses Pharma
Program" a clinical pharmacist training project publishing over 40 academic articles related granting an exclusive revenue-sharing royalty-bearing sublicensable license for the development
on bacterial and fungal infection diagnosis and to rational use of anti-infective drugs in the manufacturing and commercialization of A400 (designated by Ellipses Pharma as EP0031).treatment under the National Institute of Hospital past three years with a cumulative readership
Administration of NHC by donating over 1100 exceeding 100000 visits. The content covers KELUN PHARMA is committed to addressing the needs of rare disease patients. In November 2023
copies of β-Lactam Antibiotic Allergy and Skin clinical rational application of antibacterial drugs A400/EP0031 received orphan drug designation from the FDA for the treatment of RET fusion-positive
Testing to three batches of trainees. In addition addressing challenges of fungal drug resistance solid tumors. In March 2024 A400/EP0031 obtained FDA Fast Track designation for RET fusion-positive
we supported academic conferences of various and standardization of cephalosporin skin NSCLC. In April 2024 A400/EP0031 received FDA approval for Phase 2 clinical development. As of the
associations by donating over 1300 copies of the testing procedures. By integrating professional reporting period 33 clinical trial centers for A400/EP0031 have been established in the U.S. Europe and
same book contributing to the promotion of the insights from authoritative experts and guideline the UAE.concept of rational antibiotic use. consensus we amplify KELUN's voice in promoting
the concept of rational antibiotic use.
37 38Excellence in Craftsmanship a Commitment to Life
Progress in Kelun-Biotech's Collaboration with Merck
Kelun-Biotech entered into a licensing and collaboration agreement with Merck to develop multiple
ADC assets for cancer treatment granting Merck an exclusive royalty-bearing sublicensable license to
develop use manufacture and commercialize sac-TMT outside Greater China. As of the release date
of Kelun-Biotech's 2024 results announcement Merck has initiated 12 global Phase 3 clinical studies
for sac-TMT as monotherapy or in combination with pembrolizumab or other drugs across multiple
indications including triple-negative breast cancer non-small cell lung cancer endometrial cancer
cervical cancer and gastroesophageal adenocarcinoma.Beyond sac-TMT Kelun-Biotech and Merck are collaborating on several other ADC assets (e.g. SKB410/
MK-3120 SKB571/MK-2750 SKB535/MK-6204) to explore optimal ADC pipeline combinations. Through
its ADC pipeline Kelun-Biotech aims to cover a broader range of tumor indications by targeting different
biomarkers. By employing differentiated payload-linker strategies for ADC assets with various targets it
strives to achieve better efficacy and/or differentiated safety profiles while exploring ADC combination
therapies through diverse approaches. Kelun-Biotech has granted Merck an exclusive global license to IACUC On-Site Inspection
research develop manufacture and commercialize multiple ADC assets along with an exclusive option
to obtain additional exclusive licenses for certain other ADC assets. Kelun-Biotech retains the rights
to research develop manufacture and commercialize certain licensed and optioned ADC assets in
Mainland China Hong Kong and Macao. Additionally Kelun-Biotech has comprehensively ensured the implementation of animal welfare practices by introducing
advanced equipment upgrading facilities replacing outdated devices and conducting training related to animal welfare.In Q3 2024 Kelun-Biotech was notified by Merck of its exercise of the exclusive option for SKB571/MK-
2750. Kelun-Bota retains rights to develop use manufacture and commercialize SKB571/MK-2750 in
mainland China Hong Kong and Macao.Kelun-Biotech Introduced Animal Respiratory Anesthesia Machines
Animal Welfare Ethics In May 2024 Kelun-Biotech's Animal Experiment Department introduced small animal respiratory anesthesia machines and completed training for their use.The deployment of this equipment enables painless blood collection in mice. The
Our subsidiary Kelun-Biotech has established a dedicated Institutional machines are characterized by safe anesthesia high efficacy rapid recovery
Animal Care and Use Committee (IACUC) which is responsible for in-depth and minimal side effects making them suitable for various scenarios such as
deliberation and decision-making on all major issues concerning animal modeling blood collection and surgery. They effectively safeguard animal
welfare. In the pharmaceutical R&D process we attach great importance welfare by reducing pain and distress.to animal welfare ethics principles strictly comply with relevant laws and
regulations such as the Regulations on the Administration of Laboratory
Animals and the 3R principles and formulate the Human Endpoint During the reporting period
Regulations for Experimental Animals Management of Control Substances Kelun-Biotech's IACUC
and Test Substances Accuracy Control of Animal Administration General completed a total of Small Animal Respiratory
Principles of Animal Administration and other internal regulations ensuring Anesthesia Machine
that animal drug use meets the rigor of scientific research and satisfies the 81 reviews of animal use
high standard requirements of animal welfare ethics. plans
Kelun-Biotech has launched a laboratory animal management system that and conducted
integrates two animal welfare ethics-related modules: "Ethics Review" and Participant Protection
"Animal Welfare Ethics Inspection". The ethics review mainly involves the
IACUC's online review of animal use plans in experimental protocols covering 42 animal welfare ethics
key aspects such as experimental information animal information animal inspections. We are committed to creating a scientific and safe trial environment that perfectly integrates the social value of drug
feeding test article information sample collection euthanasia experimental development with ethical responsibilities. The protection of clinical trial participants' rights is our top priority. Through
endpoints and anesthesia. The animal welfare ethics inspection mainly the implementation of strict research protocols and sound management mechanisms we ensure that the rights of each
involves regular offline supervision of whether humane endpoints are individual participating in clinical trials regarding informed consent personal privacy and health are fully respected and
followed during experiments with online records maintained. effectively safeguarded.
39 40Excellence in Craftsmanship a Commitment to Life
Clinical Medical Ethics Intellectual Property Management
In the drug R&D process KELUN PHARMA strictly adheres to laws regulations and ethical standards fully respecting and
implementing the ethical principles established by the Declaration of Helsinki ICH-GCP China's Good Clinical Practice and KELUN PHARMA's intellectual property management strategic goal:
Good Pharmacovigilance Practice. With continuous improvements in pharmaceutical regulations KELUN PHARMA ensures Ensure effective protection of R&D achievements' intellectual property to secure long-
all R&D activities are conducted lawfully compliantly and ethically. term competitive advantages for the enterprise.Clinical Research Management Process of KELUN PHARMA We are deeply aware of the importance of IP protection for our core competitiveness. We have ensured that our
innovative achievements in R&D production and operation activities are strictly protected by law by stressing IP rights
work. Therefore the efforts of IP protection could provide a solid guarantee for our strategic upgrade and development in
Preclinical Research & Trial Design
the long run.Prior to clinical trials preclinical studies must be conducted to demonstrate drug safety and controllability To fully implement the strategy of IP protection we strictly comply with laws and regulations such as the Patent Law
through research data. Clinical trial designs are patient-centered and clinically value-driven. of the People's Republic of China and the Trademark Law of the People's Republic of China formulate the Intellectual
Property Management Measures continue to improve our internal IP management system and strive to promote the
systematic construction of IP work. We establish an intellectual property risk monitoring mechanism and strengthen our
talent pool through recruitment of professionals and internal training. We actively follow the latest international and
Participant Screening domestic IP laws and regulations integrate IP management into the entire life cycle from R&D project establishment to
product launch and eventually reinforce our competitive advantage of IP reserves.Before entering clinical trials: all trials must receive Ethics Committee approval; informed consent must be
obtained and informed consent form must be signed by potential subjects to ensure their right to know and
choose; strict screening for potential subjects must be implemented based on inclusion/exclusion criteria
specified in the clinical trial protocol.As of the end of the reporting period the Company and Among them 1997 applications have been
its subsidiaries (branches) held a total of 2860 authorized including 735 invention patents
Clinical Trial
valid patent applications including 1425 invention 1069 utility model patents and 193
It includes establishing and implementing subject privacy protection systems to fully safeguard subjects' patents 1213 utility model patents and 222 design patents.rights. design patents.Emergency Management
The Company first obtained the GB/T 29490-2013 intellectual property management system certification in 2016 passed
two recertifications and successfully underwent a supervisory audit in December 2024. To date the Company has
It includes establishing robust emergency and contingency response mechanisms to ensure prompt passed the reassessment as a National Intellectual Property Demonstration Enterprise and met the acceptance criteria
protective measures for subjects' rights and safety in the event of adverse incidents. for "Sichuan Province Intellectual Property Strong Enterprise Cultivation" and "Chengdu High-Value Patent Cultivation
Center".Adverse Event Handling
It includes actively collecting processing and submitting individual case safety reports during clinical trials;
preparing and submitting Development Safety Update Reports (DSURs); and conducting pharmacovigilance
signal detection and risk management to continuously and effectively identify assess and control safety
risks associated with investigational drugs.Review & Communication
It includes conducting regular follow-up reviews of trial protocols informed consent forms protocol
deviations and safety events while maintaining effective communication.
41 42Excellence in Craftsmanship a Commitment to Life
Accessibility of Healthcare Services Overseas Market
We are committed to providing high-quality pharmaceutical products and services to improve the health of global patients.The Company's Board of Directors serves as the highest authority responsible for access to healthcare issues with The Company has established factories in Kazakhstan and Sri Lanka and operates them directly through local teams for
executive director Mr. Liu Sichuan acting as the head for these issues. Through the ESG Committee the Board oversees market promotion and sales in those markets. In other emerging markets we work closely with partners who have local market
the management objectives and current status of the our access to healthcare issues. The ESG Committee as the development experience and resources to ensure that our products comply with local regulatory requirements obtain necessary
representative body for these issues regularly reviews our strategies institutional frameworks and performance in this approvals and licenses and jointly drive product sales in the local markets. As of the end of the reporting period our overseas
area. It supervises the implementation of related tasks reports to the Board and ensures our commitment to inclusive business has covered pharmaceutical markets in over 50 countries and regions across Asia Africa South America and other
healthcare is upheld across the organization. parts of the world.Enhancing Product Accessibility KELUN PHARMA establishes clear goals and strategies for expanding into emerging markets beyond its current operations:
The Company's expansion in emerging markets focuses on local medication needs and leverages
To improve the accessibility of healthcare services globally We focus its product strengths to select appropriate sales methods and channels enhancing accessibility to
on strengthening pharmaceutical innovation and R&D optimizing drug Preparations a wider range of medicines. In the next 3-5 years the Company plans to engage in more product
procurement and supply systems and enhancing public health literacy and registrations for different dosage forms and therapeutic areas. Additionally the Company intends
rational medication use. These efforts ensure that high-quality medicines to select multiple key products from its new generic drugs covering more types and therapeutic
and medical services can widely benefit the general public improving public areas as key targets for internationalization laying the groundwork for future export growth.awareness and utilization of pharmaceuticals.The Company focuses on emerging and potential markets in Europe America Japan and BRICS
countries. The Company has developed clear international filing promotion and marketing plans.API Products
Domestic Market It has also established close direct and long-term reciprocal collaborations with well-known
professional agents and large local generic drug manufacturers in various countries and regions.This enables comprehensive coverage of the middle-end market from the high-end market.We set annual management goals for drug accessibility. Newly launched products are swiftly submitted for provincial
Over the next 3-5 years the Company plans to further expand its overseas market presence
listing approvals across China completing the necessary provincial-level access procedures to prepare for sales in medical Antibiotic
partnering with internationally renowned pharmaceutical companies on penicillin cephalosporin
institutions. We actively participate in national centralized and volume procurement projects expanding the coverage of intermediates
and other products.these drugs to improve accessibility and convenience for patients while reducing their financial burden.In alignment with national and local policies we adhere to the principle of "listing all eligible products" by submitting
applications for provincial listings immediately after obtaining approvals. This ensures timely access to major provincial
markets enabling sales in graded medical institutions public hospitals and pharmacies. During the reporting period During the reporting period we successfully obtained market access for over 20 preparations in low- and middle-income
we launched 32 new products with 50 specifications covering therapeutic areas such as oncology endocrinology countries across Asia the Americas and Africa covering therapeutic areas such as parenteral nutrition anti-bacterial infection
anesthesia cardiovascular diseases and transplant anti-rejection. cardiovascular diseases and anti-coagulation. Our antibiotic intermediates are primarily exported to India Iran Pakistan and
Bangladesh with 70% of sales directed to India mainly penicillin and cephalosporin products. Moving forward we will continue
Beyond the graded hospital markets we also strive to improve the coverage and supply stability of drugs in township to focus on market demands and changes constantly expanding our product coverage to meet the medical needs of low- and
health centers village clinics pharmacies and medical institutions in remote areas accelerating the layout of online and middle-income countries.offline all-channel sales. By the end of the reporting period our products had reached all 31 provincial-level administrative
regions in China. Participating in Capacity Advancement Programs for Developing
Additionally we actively respond to the call of national policies participate in and support the development of grass- Countries
roots medical institutions and help improve the level of grass-roots medical services through technical support personnel
training and public donations. We place high importance on advancing healthcare in developing countries. Aligned with our international development strategy
we collaborate closely with local partners to participate in programs aimed at enhancing healthcare service capabilities jointly
driving improvements in medical services.Assisting Local Manufacturers in Meeting International Drug Manufacturing
During the reporting period we launched with Standards
32 50 We have helped Kazakhstan master advanced manufacturing technologies in the infusion industry enabling local capabilities in new product specifications covering therapeutic areas such quality testing drug R&D and industrialization. This breakthrough ended Kazakhstan's history of lacking domestically produced
as oncology endocrinology anesthesia cardiovascular infusion products providing the country with safe and effective medicines. During the reporting period CELOGEN LANKA invested
diseases and transplant anti-rejection by us in Sri Lanka became the first pharmaceutical company in Sri Lanka to receive EU GMP certification significantly elevating
local pharmaceutical production standards to international levels.
43 44Excellence in Craftsmanship a Commitment to Life
Improving Pharmaceutical Supply Chains in Developing Countries Improving Product Affordability
To enhance the efficiency and accessibility of drug supply in developing countries we have established localized
production bases nationwide reducing transportation costs and improving delivery speed and supply chain KELUN PHARMA adheres to the principle of "seeking truth through science and seeking goodness through ethics". We are
responsiveness. This move effectively reduces drug costs. Meanwhile we strictly follow the national "single-ticket" and committed to providing high-quality and affordable products and services for patients and customers while formulating
"two-ticket" policy requirements and has set up distribution centers in several key regions nationwide to enhance delivery fair and reasonable product pricing strategies.timeliness and meet urgent demands.In developing countries such as Kazakhstan and Sri Lanka the Company has established efficient and timely drug
distribution systems. In Kazakhstan Kelun-Kazpharm has adopted an innovative cooperation model establishing strategic Equitable Pricing Policy
partnerships in various regions. With the help of local distribution agent networks they have been able to deliver bid
winning products quickly and accurately to local hospitals successfully addressing the challenges of tendering and
distribution in remote areas with a sparse population. KELUN LIFESCIENCES in Sri Lanka directly distributes drugs to end- To effectively address the diversity of global healthcare needs drug payment mechanisms and the affordability of
user institutions through local agencies significantly reducing intermediate links and ensuring that drugs can be timely financial systems KELUN PHARMA has issued the Equitable Pricing Policy applicable to all its products based on the core
and effectively provided to patients. concept of product affordability. This policy further advances the pharmaceutical industry's innovation to benefit patients
and customers. The Company's ESG Committee oversees the implementation of the Equitable Pricing Policy while the
Training Local Healthcare Talents management is responsible for organizing and leading its daily execution to ensure effectiveness.When implementing the Equitable Pricing Policy we thoroughly consider the economic conditions of target countries or
While localizing operations in Kazakhstan and Sri Lanka the Company prioritizes the development of local medical and regions including but not limited to GDP level social development level reflected by the UN Human Development Index
health levels. Through strategic pharmaceutical production plant layouts we actively engage in communication with local and public healthcare system investments. In the same level of countries/regions and within the parallel level of market
medical talents injecting "Kelun Power" into the training of medical talents and the overall improvement of medical and drug pricing remains relatively consistent. At the same time we also develop more accessible drug pricing strategies
health levels. based on the needs and payment capabilities of patients in different countries/regions serving more patients worldwide.Kelun-Kazpharm Conducted Joint Training Project to Cultivate High-quality Local
Healthcare Talents
Domestic Market
To elevate the professional skills of local healthcare talents and advance medical education Kelun-Kazpharm signed
a long-term cooperation agreement with Kazakhstan National Medical University in 2022. The two parties organize After a product is approved for market launch we adopt a nationwide uniform pricing strategy taking into account the
training courses joint scientific activities and practical workshops to foster interaction between educational economic disparities across regions to meet the medication standards of patients in the least economically developed
institutions and enterprises improve the quality of medical and pharmaceutical education and cultivate high-quality areas. For generic drugs that have passed or are deemed to have passed the quality and efficacy consistency evaluation
healthcare talents while driving innovation and development in the field of pharmacy. the prices are set lower than those of the original reference drugs in the domestic market. This demonstrates our
commitment to social responsibility and efforts to improve the fair accessibility and affordability of patient medications.Business Segment Equitable Pricing Strategy Based on Affordability
● First-to-market generic drugs are priced no higher than 60% of the original reference
Kelun-Kazpharm Training Local Healthcare Talents drug prices in compliance with relevant national policies;
Generic Drugs ● For drugs with existing competitors of same generic name pricing is based on the
median price of similar products already on the market
Product Donations to Developing Countries
Furthermore as the national centralized and volume procurement project becomes routine we closely monitor local policy
We have always paid attention to the social welfare of developing countries and actively updates and actively participate in initiatives to supply retail pharmacies private medical institutions and village clinics
fulfilled our corporate social responsibilities. In 2024 Kelun Lifesciences (Pvt) Ltd. carried with drugs from centralized procurement. We follow requirements to list eligible products at centralized procurement
out a series of CSR donation activities in Sri Lanka focusing on education culture and prices and publicly disclose drug pricing information narrowing price gaps between medical institutions and pharmacies
community development. These initiatives included supporting local school infrastructure to make medications more affordable for patients.construction funding lunch programs for underprivileged students sponsoring cultural and
artistic events and awarding outstanding students. Through these targeted donations we We also place special emphasis on addressing the healthcare needs of vulnerable groups. We have launched multiple
not only provided better educational and developmental opportunities for local children and charitable assistance projects to alleviate the medical burdens of low-income families rare disease patients and other
youth but also contributed to the sustainable development of local culture and society. special populations ensuring they have equal access to medical treatment when facing health challenges.
45 46Excellence in Craftsmanship a Commitment to Life
Overseas Market
Examples of Pricing Adjustments for Certain Products of KELUN PHARMA
To address the high drug cost pressures faced by the public in emerging markets and developing countries we adopt
reasonable pricing strategies tailored to local economic conditions and market situations when promoting products
in underdeveloped regions overseas. Additionally we actively engage in local government drug procurement bidding
activities striving to reduce the financial burden of medications for patients. Product Name Price Reduction Details
An anesthetic agent used for clinical sedation successfully
Product Type Equitable Pricing Strategy Based on Affordability included in the medical insurance catalog through bidding
(negotiation) at the end of 2022. Following the negotiation the
Sugammadex Sodium reimbursement price dropped from RMB 1080/vial to RMB 136/
Injection vial posing a reduction of 87.4%.A total of 150 preparations covering therapeutic areas such as oncology anti-bacterial
infection parenteral nutrition and anesthesia are sold in East Asia Southeast Asia Central
Asia Africa and the Americas with equitable pricing strategies aligned with local income A novel packaging format that separately stores powdered
Preparations levels. medication and solvent for injection in two chambers of the
Large-capacity injection products are priced over 20% lower in developing countries like same bag divided by a sealing strip. Before use pressure
Africa and Southeast Asia compared to prices in developed countries. is applied to mix the powder and liquid allowing immediate
infusion.● Ceftazidime for Injection/5% Glucose Injection is particularly
suitable for infections caused by multidrug-resistant Gram-
Antibiotic Equitable pricing strategies for overseas sales are tailored to local income levels. For negative bacilli in immunocompromised patients nosocomial
intermediates strategic partners we offer additional discounts on market prices through framework infections and central nervous system infections caused by
and APIs agreements to foster deeper collaboration. Gram-negative bacilli or Pseudomonas aeruginosa. It was
successfully included in the medical insurance catalog through
Powder-liquid Double- exclusive negotiation at the end of 2022. The reimbursement
chamber Bag price was set at RMB 29.2/vial down from the pre-negotiation
listed price of RMB 166/vial posing a reduction of 82.4%.● Ceftazidime-Avibactam Sodium for Inject ion/Sodium
Pricing Transparency Chloride Injection is applicable to severe infections caused
by susceptible bacteria such as peritonitis and cholecystitis.It was included in the medical insurance catalog through
We strictly adhere to national drug price regulations ensuring all drug pricing complies with legal and regulatory exclusive negotiation at the end of 2024. The reimbursement
requirements to maintain fairness and transparency. We closely monitor policy trends and market dynamics and actively price was set at RMB 326/vial down from the pre-negotiation
participate in national volume procurement and medical insurance negotiations to minimize product prices effectively listed price of RMB 448/vial posing a reduction of 27.2%.reducing patients' medical expenses and improving medication affordability and accessibility.As of the end of the reporting period we had secured winning bids for 59 varieties and 83 specifications of drugs
been selected for the national drug volume procurement project establishing as a leading supplier in centralized drug A widely used parenteral nutrition solution in clinical settings
procurement. The selected products are fielded in treatment of multiple chronic and major diseases. The major fields specifically designed for patients who cannot consume food
involved are anti-infection oncology diabetes hypertension rheumatoid psychiatry anesthesia analgesia osteoporosis orally after major surgeries and require intravenous nutritional
and nutrition. Also the average price reduction rate of selected products is higher than the average national volume support. Previously such parenteral nutrition injections in
procurement project level. China relied entirely on imports costing over RMB 300 per bag.KELUN PHARMA has 323 products listed in the National Reimbursement Drug List (2024 Edition) including 308 chemical Fat Emulsion Amino Acids (17) With the breakthrough in domestic production technology and
drugs and 15 traditional Chinese medicine preparations; by categories there are 124 in category A and 199 in category and Glucose (11%) Injection following the 5th national volume procurement the price of
B. In the national medical insurance negotiations in recent years a total of 18 innovative varieties were added to the this injection dropped sharply to just over RMB 70 per bag
national medical insurance negotiation (bidding) catalog with 9 of our products in the National Reimbursement Drug List representing a reduction of 75%.
(2024 Edition) holding negotiation (bidding) status. This not only improves public accessibility to medications but also
significantly alleviates the burden on the national healthcare system.
47 48Excellence in Craftsmanship a Commitment to Life
Industry Collaboration and Development
As an active leader and practitioner in the healthcare sector KELUN PHARMA is unwavering in its commitment to social
responsibility. We proactively foster in-depth interaction and cooperation across the industry chain striving to build an
open inclusive and mutually beneficial industrial ecosystem. Through active international collaboration participation in
academic conferences and engagement with industry associations we continuously enhance the accessibility of medical
services and strengthen global public health capabilities contributing our expertise to a healthier and more equitable
society.Annual Conference on Bacterial and Fungal Infections of the Chinese Medical Association The 18th
Academic Conference on Hematology of the Chinese Medical Association The 18th Academic Conference
Industry Activities and Exchanges on Infectious Diseases of the Chinese Medical Association
In medical fields such as parenteral and enteral nutrition anesthesiology anti-infection infusion and emergency medical
rescue we actively participate in academic conferences to exchange cutting-edge ideas and showcase our innovative
achievements and comprehensive product portfolio in the pharmaceutical sector. We also use academic ambassador
"Kebao" as a bridge to enhance interaction with medical experts and attendees boosting the brand's affinity and
recognition. Through these industry exchanges we contribute to advancing medical academia improving drug
accessibility and safeguarding patient health reflecting our corporate social responsibility and value.The 11th China Nursing Management Conference
2024 18th Annual Conference of Parenteral and Enteral Nutrition Chinese Medical Association
The 9th Asia-Pacific International Conference on Emergency Medicine and 7th Tianfu Critical Care Conference
Guided by the operational goal of "patient-centered clinical value-driven" we widely participate in industry exchanges
focused on inclusive health promoting the sharing of medical technologies and experiences. We also support the
improvement of public hospital management and discipline-building capabilities earning widespread acclaim from
Annual Conferences of the Anesthesiology Branch Chinese Medical Doctor Association and Chinese experts and medical institutions. These efforts underscore our steadfast commitment to advancing healthcare and
Medical Association significant contributions to the industry's prosperity.
49 50Excellence in Craftsmanship a Commitment to Life
KELUN PHARMA Continuously Promotes National Standardized Surgical Nutrition Social Feedback and Public Welfare
Demonstration Ward Project to Enhance Medical Service Accessibility
We recognize that sustainable corporate growth is closely tied to social welfare. We integrate the core principles of
To standardize nutritional therapy for surgical patients establish a standard process for surgical nutrition public welfare and charity into our strategic planning and daily operations actively responding to social expectations. Our
standardize surgical nutrition diagnosis and treatment nationwide and improve perioperative patients' quality of public welfare actions span multiple domains including education and culture healthcare scientific innovation poverty
life nationwide we in collaboration with the Cancer Nutrition Committee of the China Anti-Cancer Association alleviation and disaster relief delivering lasting and positive impacts to improve the quality of life for beneficiaries and
launched the "National Standardized Surgical Nutrition Demonstration Ward Project". Under the coordination of the foster social harmony and progress and generating enduring positive momentum for sustainable development goals.association experts and KELUN PHARMA key tasks such as standard development business training technical
guidance quality supervision and outcome review were completed. In 2024 we organized extensive academic
activities for 162 accredited units and 160 newly applying units. Practicing Public Welfare and Charity
In March we hosted the 2024 National Surgical Nutrition Diagnosis and Treatment Demonstration Ward Project
Kickoff Meeting in Chengdu. The event brought together top medical experts scholars and industry leaders to KELUN PHARMA always pays attention to and understands the needs of
discuss the latest advancements challenges and solutions in surgical nutrition. This high-level multi-tiered platform vulnerable groups and provides diversified humanitarian assistance. Based
strengthened collaboration between the Company and external academic institutions to improve medical service on the Public Welfare Donation Law of the People's Republic of China and
accessibility and public health level. other relevant national laws and regulations the Company has formulated During the reporting period the
the External Donation Management System and the Social Responsibility Company's total social welfare
Management System for itself and its wholly-owned and controlling contributions exceeded
subsidiaries. Leveraging its medical resources the Company serves society
and fulfills its corporate social responsibilities. During the reporting period RMB 57 million
the Company's total social welfare contributions exceeded RMB 57 million.Education Support
To fulfill its corporate social responsibility and support higher education the Company donated RMB 2 million to China
Pharmaceutical University. The funds are earmarked for talent development in pharmaceutical management and
educational public welfare. The donation focuses on industry-education collaboration offering specialized training
programs course development practical base construction and scholarships to cultivate interdisciplinary talent aligned
with the requirements for upgrade of the pharmaceutical industry. It also enhances the university's teaching and research
We partnered with the Integrated Supportive Therapy Working Committee of the Chinese Anti-Cancer Association capabilities fostering innovation for industry-university-research collaboration. This partnership deepens the synergy
to organize core experts in surgical nutrition promote the establishment of standardized surgical nutrition diagnosis between the Company and the university building a talent pipeline for sustainable industry development and achieving
and treatment demonstration units and initiate the drafting of the Standardized Surgical Nutrition Diagnosis and shared social and industrial value.Treatment Demonstration Unit group standard. The group standard has been drafted and finalized and is awaiting
review by the Chinese Anti-Cancer Association. Additionally we prioritize supporting students in impoverished regions as a key part of our social welfare efforts. We
dedicate resources to address educational disparities providing equal learning opportunities and development platforms
for students in underprivileged areas.JIANGNING BIOTECH's Donation Lights Up the Dreams of Economically Disadvantaged Students
Upholding the values of "seeking truth
through science and seeking goodness
through ethics" we actively give back to
society and support youth development.In 2024 KELUN PHARMA's sub-subsidiary
JIANGNING BIOTECH donated RMB 1 million
to the Charity Federation of Gongliu County
Ili Kazakh Autonomous Prefecture Xinjiang
Uygur Autonomous Region. The funds are
used to assist economically disadvantaged KELUN PHARMA Participating in Gongliu County
primary middle and high school students Donation Ceremony
in Gongliu County improving their learning
conditions and alleviating family burdens.
51 52Excellence in Craftsmanship a Commitment to Life
Disaster Relief Pooling Strength for Rural Revitalization
We leverage our strengths to efficiently mobilize internal and external resources actively engaging in frontline disaster We actively support China's rural revitalization strategy focusing on consolidating and expanding poverty alleviation
relief efforts. Through cash and drug donations as well as emergency supplies we provide comprehensive support to achievements. We fulfill our social responsibilities by supporting rural education talent development and infrastructure
help affected regions and communities restore normalcy mitigating disaster impacts and promoting social stability. upgrades driving comprehensive socio-economic progress in rural areas. During the reporting period we invested
approximately RMB 1.01 million in rural revitalization initiatives.Floods Bring Disaster Kelun Brings Love
In July 2024 continuous heavy rainfall in Yueyang City Hunan Province triggered severe floods and geological Key initiatives in rural revitalization during the reporting period:
disasters posing significant challenges to flood control efforts. When disaster strikes help comes from all sides.Responding swiftly Hunan Kelun and Hunan Kelun Yueyang Branch representatives visited the flood-stricken
areas in Linxiang City and donated RMB 400000 to support relief efforts. This act of kindness highlighted KELUN
PHARMA's strong sense of social responsibility and brought warmth and care to affected communities bolstering
their determination and confidence to prevent blood and rebuild homes. KELUN PHARMA donated lighting equipment and repaired infrastructures such as roads in
Niuchangzhai Village and Changgou Village Xiban Town Yuechi County Guang'an City Sichuan
The same month Hunan Kelun responded to the call of Yueyang Municipal Health Commission and donated Province advancing the construction of livable villages. To promote equitable education and care for
medicines worth RMB 900000 to Yueyang Municipal Health Commission and Red Cross Society. The donations disadvantaged youth we provided assistance to over 60 registered disadvantaged adolescents in
targeted acute and chronic diseases likely to arise during flood relief addressing medication shortages and Pingtan Town Yuechi County addressing their practical living and learning challenges;
supporting post-disaster epidemic prevention and medical treatment in affected areas.We supported the resident village officials and villager representatives of Renguo Township Ganzi
County Sichuan Province in conducting field research and learning. We introduced edible mushroom
cultivation techniques and advanced management practices assisting Renguo Township in
formulating development plans and goals to sustain local income growth;
In Songtao Miao Autonomous County Guizhou Province we donated solar streetlights to impoverished
marginal villages in Mengxi Town promoting the development of livable rural areas;
Under the organization of the Pharmaceutical Industry Association of Xinjiang Uygur Autonomous
Region we provided aid to the resident work teams of the Xinjiang Medical Product Administration in
Hotan supporting local construction efforts.
53 54Industrial Collaboration to Create the Future
03
Industrial
Collaboration to
Create the Future
KELUN PHARMA ensures product safety and quality
through a stringent product quality management
system and risk management measures. The Company
strengthens its pharmacovigilance system to safeguard
public health. In customer service KELUN PHARMA
continuously improves service standards prioritizes
customer privacy protection and actively addresses
complaints and reports. Additionally we are committed
to building a sustainable supply chain by implementing
supplier access certification risk management and
quality enhancement initiatives thereby promoting
integrity and sustainable development across the
supply chain. These efforts underscore the Company's
leadership in the industry and its dedication to social
responsibility.
55 56Industrial Collaboration to Create the Future
Product Safety and Quality Quality System Certification
The Company adheres to a quality-centric development philosophy upholds the principle of "quality first safety As of the end of the reporting period all production bases under the Company have obtained GMP certification. Among
foremost" and strictly complies with national drug regulatory requirements to ensure the consistent stability and them 13 have also obtained ISO 9001 certification accounting for 40.63% of all production-oriented enterprises. This fully
reliability of product quality. To achieve this KELUN PHARMA has established clear quality objectives: demonstrates the company's commitment to continuous improvement in quality management systems. The production-
oriented subsidiaries of the Company have obtained the certification of ISO 9001 Quality Management System as follows:
Zero instances
Zero instances of failed Zero failures in of revocation or
random inspections inspections conducted suspension of drug
announced by drug by drug regulatory manufacturing licenses
regulatory agencies; by drug regulatory
authorities; authorities; ISO 9001 Quality Management System
Certified Entity Certification (Example)
KELUN PHARMA's Quality Objectives
KELUN PHARMA Guangxi Kelun
Product Quality Management System Renshou Branch CHUANNING BIOTECH
We have firmly established a concept of Grand Quality and have adhered to various national pharmaceutical Guang'an Branch JINHE BIOTECH
quality regulations including but not limited to the Drug Administration Law of the People's Republic of China Good Anyue Branch Qingshan Likang
Manufacturing Practice Good Supply Practice and Good Pharmacovigilance Practice. We have developed a programmatic
document Quality Manual to guide the Company's total quality management practice planning and implementation Junjian Plastic JIANGNING BIOTECH
control and supervision guarantee improvement and continuous improvement. Each level of our production companies
has completed the product quality management system with standard system in accordance with the Quality Manual Hunan Kelun Kunming Nanjiang
ensuring that all products meet the requirements of registration regulations and pharmacopoeia standards. Additionally Hubei Kelun
we actively implement the ISO9001 quality management system and apply the quality balanced scorecard model to
ensure product quality in multi dimensions. KELUN PHARMA Junjian Plastic
Grand Quality Concept
High quality · Expectation of stakeholder
Extraordinary risk Headquarters · Advanced Base · Advanced Quality information High quality Product Quality Risk Management
control quality platform quality system empowerment performance
Layered control Kelun Good Standard Full value chain Laboratory information Quality negative list
Change control (KGS) operation system management system Quality positive list To effectively address quality management risks
Data reliability Good Practice Guide VMS for PP & PQ Quality management
practices (GPG) systems
Quality measurement across the product lifecycle including supply chain
(Process performance &
Technology transfer risk Major special program product quality verification Knowledge management
control and monitoring system) system
disruptions and business interruptions and ensure
management Quality satisfaction the delivery of customer-satisfactory products we
Quality incident Continuous improvement CAPA system ●
management Document (archive)
First time correct rate
of the platform Change management management system Process capability adhere to a proactive and risk-predictive approach
Subject matter expert system ● Training management Audit ready to quality management. We conduct comprehensive
platform Management review system
Review and release risk identification and have established a Quality Risk Intensive management ● Quality reporting system
(Supplier management & Data analysis system Contingency Plan covering critical stages such as ●
pharmacovigilance etc.) Quality risk etc.management system material procurement production & manufacturing
Quality technical support
Knowledge Pharmacovigilance system and post-market surveillance with defined applicability
management system for both commercialized and pipeline products. The
Powertrain (Headquarters): Audi Empowerment & Powertrain (Base): Business Platform Development & Major plan mainly includes supply chain risk information
Regional Supervision & Management Review Project Development etc. collection avoiding single source diversifying suppliers
Learning & Growth: Subject Matter Experts & Continuous Improvement establishment of backup production bases post-
market product traceability and recall.
57 58Industrial Collaboration to Create the Future
Material Procurement
Strategic partnerships Long-term strategic cooperation agreements are
established with key suppliers to ensure stable supply.We maintain proactive communication and regular visits with material suppliers to Stable supply
monitor industry trends and collect supply chain data enabling timely responses to
potential risks. We track fluctuations in market demand and assess upstream risks such
as raw material monopolies or price surges to adjust inventory or implement contingency
Information measures. In emergencies (e.g. natural disasters pandemics environmental shutdowns
collection and regulatory bans or logistics disruptions) we evaluate risks and recalibrate safety stock
risk prediction level procurement volume and production plans based on projected demand to mitigate
impacts. We balance accessibility and cost for the establishment of material standards
for new products or change of material standards for existing products
avoiding overly stringent standards that may lead to supply shortages or
Reasonable
material inflated prices.standards
For commercialized products we continuously qualify alternative suppliers by Suppliers are geographically diversified within China to avoid regional
assessing material risks (quality/accessibility) and product sales (criticality) to disruptions. For international suppliers we avoid over-reliance on a single
prevent shortages caused by single-source dependency. For pipeline products country. Supplier evaluation criteria explicitly include operational scale
production bases collaborate with sales and supply departments to identify key inherent risk resilience and disaster preparedness/mitigation and business
varieties assess material supply risks and qualify backup suppliers prior to product Diversifying Avoiding single recovery planning.approval aligning with launch schedule especially for centralized procurement supplierssource
varieties or other strategic varieties.Production & Manufacturing
We have developed guiding documents such as the Drug Recall Management and Guideline for
We have established and continues to refine a multi-base production layout with commonly used varieties licensed for Handling Sudden Drug Safety Incidents. Our subsidiaries (branches) have also established product
manufacturing across multiple bases. This ensures local market distribution reduces transportation costs and enhances recall management systems in accordance with regulatory and corporate requirements forming
logistics efficiency. In the event of natural disasters public epidemic or unexpected incidents the backup factory system a robust recall framework. This ensures that any batch of products with potential safety hazards
guarantees sustainable supply for all products.Product can be recalled quickly and effectively from the market when necessary. Furthermore we conduct
recall simulated recall exercises to continuously evaluate the effectiveness of the recall system.Post-market Surveillance
We have established a comprehensive traceability system. All pharmaceutical production and
packaging processes strictly adhere to approved technical protocols and standard operating
procedures with complete documentation maintained. Each sales package unit is assigned a drug
electronic supervision code. Additionally we have implemented multiple digital systems including In 2024 we recorded and
laboratory management LIMS quality assurance QMS knowledge management DMS personnel
Product
traceability training ELN and warehouse management WMS. A unified quality information management platform 0 product recall incidents 0 regulatory warnings related to products
tools and methodologies ensure full traceability from raw material procurement to finished product
delivery commercial circulation and clinical use.
59 60Industrial Collaboration to Create the Future
Product Quality and Safety Training
Quality culture is a pillar of soft power in corporate management. We believe in customer-centered quality culture and Additionally the company organizes annual themed quality training for all employees complemented by activities such
continue to promote the development by including all employees in training sessions. For quality and safety training as debates and knowledge competitions. These initiatives foster a culture that prioritizes and respects quality embedding
management we implement a three-tier education and training system: the headquarters Quality Supervision Center quality responsibility into the corporate DNA to support sustainable development.oversees training management from a regulatory compliance perspective while each subsidiary (branch) designates
dedicated personnel to ensure the implementation execution and tracking of quality training.At the beginning of each year training administrators at subsidiaries (branches) develop annual training plans based Quality & Safety Compliance Season - Regulatory Training Series
on business needs and regulatory updates which are then distributed to all departments. Departments tailor their own
training plans by integrating company-wide objectives with specific requirements and they are responsible for execution.The implementation of all training plans is monitored through a tracking mechanism and confirmed by both company and In 2024 KELUN PHARMA launched a "Quality & Safety Compliance Season" organizing a series of regulatory training
department-level training administrators layer by layer with the progress of each training recorded in tracking forms. activities across group subsidiaries to strengthen compliance awareness and enhance production safety and quality
management standards. The Quality Supervision Center provided a recommended list of laws and regulations while
production companies conducted training and assessments focusing on the Drug Administration Law of the People's
KELUN PHARMA Product Quality Training Management Matrix Republic of China and the Measures for the Supervision and Administration of Drug Quality in Operation and
Usage to ensure that drug production operation and entrusted storage and transportation activities comply with
regulatory requirements. Enterprises were encouraged to conduct comprehensive self-inspections based on product-
specific regulations. For pharmaceutical distributors in cost-accountable regions the center delivered training and
Category Training Type Example Training Content Frequency Training Method assessments on core regulations like Good Supply Practice (GSP) supplemented by industry case studies to elevate
compliance management.Clean Area Personnel Behavior On-site lectures +
GMP training for new Standards Microbiology Fundamentals learning
employees Personal Hygiene Requirements
Pharmaceutical Fundamentals etc. E-learning platform
New employee induction Drug Administration Law of the
Drug production and People's Republic of China Measures On-site lectures +
quality laws and for the Supervision and Management of learning
regulations Drug Production Good Manufacturing E-learning platform
Practice and appendices etc.GMP knowledge drug On-site lectures +
learning
Production production regulations SOP for Light Inspection Position SOP
staff the Company's drug for Filling Position SOP for Packaging E-learning platform production management Position etc + practical
systems and position SOPs assessment
GMP knowledge drug On-site lectures +
quality regulations the Deviation Management Procedure learning Regulatory Training in Progress
Quality staff Company's drug quality Change Management Procedure E-learning platform
management systems and Electronic Balance SOP Product Annual + practical
position SOPs Release Management Procedure etc. assessment
Pre-job
training On-site lectures +
Equipment Equipment Maintenance Procedure learning
management Professional knowledge Equipment Lifecycle Management training Procedure Preventive Equipment E-learning platform staff Maintenance Procedure etc. + practical
assessment Number of internal quality training Coverage of internal quality Total number of participants in
sessions training internal quality training
Raw Material Receipt/Dispatch/Storage On-site lectures +
Management Procedure Finished learning
Warehouse Professional knowledge Product Receipt/Dispatch/Storage
staff training Management Procedure Finished E-learning platform 28898 99.32% 587962
Product Shipping Management + practical
Procedure etc. assessment
Drug production and Internal quality training hours
quality laws and Measures for the Administration of Internal trainer Continuing
education All staff regulations revision of
Drug Registration Measures for the PPTs online learning
drug production and Administration of Vaccine Production through recorded 726186
quality documents etc. videos
61 62Industrial Collaboration to Create the Future
Product Quality Testing
Test and inspection
We are committed to building a high-level testing platform to meet the diverse in-house testing needs of internal For new products or processes we design influence factor tests accelerated stability tests
pharmaceutical production. As of the end of the reporting period seven core member enterprises of the Company and forced degradation tests to simulate extreme conditions and evaluate product quality
have had their laboratories pass the authoritative review by the China National Accreditation Service for Conformity and process parameter rationality.Assessment (CNAS) and obtained CNAS certification. These laboratories provide accurate and efficient product testing
services covering a wide range of testing items such as drug stability studies impurity quantification analysis and
microbial limit testing ensuring the delivery of high-quality safe and effective products to the market. Risk assessment
During process development we comprehensively evaluate each step and parameter to
identify key factors and potential risks that may affect product quality.
1 Sichuan Kelun Pharmaceutical Co. Ltd. Xindu Base
2 Sichuan Kelun Pharmaceutical Co. Ltd. Anyue Branch Process validation
3 We conduct validation runs for at least three consecutive batches monitoring critical Kunming Nanjiang Pharmaceutical Co.Ltd. parameters in real-time to ensure process stability and reproducibility thereby reducing
4 quality risks caused by process variability.Hunan Kelun Pharmaceutical Co. Ltd.
5 Hunan Kelun Pharmaceutical Co. Ltd. Yueyang Branch
6 Guizhou Kelun Pharmaceutical Co. Ltd. Precautionary Test: Packaging Material Selection and Evaluation
7 Sichuan Kelun Pharmaceutical Research Institute Company Limited CNAS Certificate
When selecting pharmaceutical packaging materials we conduct comprehensive evaluations focusing on the
compatibility between packaging materials and drugs as well as their protective properties. Through accelerated
Quality Testing Capabilities and long-term stability tests we observe quality changes under different packaging conditions to promptly
identify potential issues such as moisture absorption oxidation or degradation. Additionally we rigorously validate
packaging processes including equipment operating parameters and operational standards to ensure accuracy and
The Company operates over 20 quality control laboratories equipped with
stability thereby guaranteeing the integrity and sealability of drug packaging.more than 2000 high-precision instruments including but not limited
to atomic absorption spectrophotometers Fourier-transform infrared
spectrometers amino acid analyzers fully automated microbial analyzers
ion chromatographs and PCR thermal cyclers. These instruments enable
capabilities in physicochemical analysis microbial testing pharmacological Precautionary Test: Stability Assessment of Drug Storage and Usage
experiments and safety testing of polymeric materials covering over 2000
test items. covering over
The Company's QC laboratories boast a complete talent pipeline with 1073 Drugs are susceptible to environmental factors such as temperature humidity and light during storage and use.professional testing technicians approximately 50% of whom hold bachelor's 2000 To assess potential risks of quality degradation we employ accelerated stability test methods simulating extreme test items
degrees or higher. The team is well-structured experienced and proficient in conditions (e.g. 40° C high temperature 75% relative humidity) to determine the drug's sensitivity to environmental
techniques such as high-performance liquid chromatography (HPLC) related factors and its quality stability. Data from accelerated stability test are used to extrapolate drug expiry date using
substance testing and depressor substance testing totaling 2000 testing appropriate mathematical models. Scientifically setting drug expiry date helps ensure that the quality of medications
capabilities. They serve as the core technical force ensuring the accuracy of used by patients meets standards thereby reducing medication safety risks.test results.Precautionary Quality Risk Test
We place high importance on precautionary test. Annual test plans are developed to thoroughly analyze potential In 2024 we conducted over In 2024 we conducted over In 2024 we conducted over
impurities in product formulations and manufacturing processes. From both quality and safety perspectives we identify
potential issues early and optimize key aspects such as formulations processes packaging and storage to control 600000 product 150000 500000 existing
product risks at the source.quality tests predictive tests product quality/safety tests
Before production we conduct a series of tests and inspections to identify and resolve potential quality or safety
concerns ensuring no medication risks arise during subsequent use.
63 64Industrial Collaboration to Create the Future
Pharmacovigilance
Pharmacovigilance System
We have set up a comprehensive pharmacovigilance system in accordance with the Good Pharmacovigilance Practice We have cultivated broad and accessible channels to collect adverse events from and give professional answers to
(GVP) and relevant guiding principles and formulated the policies and procedures such as Post-marketing Drug patients doctors and pharmacists enabling effective monitoring and control of drug safety. We have configured a
Safety Management Procedures Adverse Drug Reaction Reporting and Monitoring Procedures and Drug Safety Risk pharmacovigilance system connecting with the National Medical Products Administration's Center for Drug Evaluation
Management Procedures. The holders of marketing authorization for all our company drugs have established a complete (CDE) and Center for Adverse Drug Reaction Monitoring (CDR) through gateway systems to achieve the monitoring of
pharmacovigilance organizational structure and system documents in accordance with regulatory requirements and adverse drug reactions through coding analysis and evaluation and timely reporting.continuously improved them in accordance with the latest regulatory requirements during implementation. At the same
time all holders of marketing authorization for our company drugs have established drug safety committees set up Adverse Reaction Collection Channels
dedicated pharmacovigilance departments and appointed qualified personnel as pharmacovigilance responsible persons
to ensure the safety and health of the public in drug use.Channel I Channel II Channel III Channel IV Channel IV
Pre- and Post-market Pharmacovigilance Management Official Website Official Website Customer Hotline Email Address WeChat Official
Account
Contact us Contact us 4006860333 pv.china@kelun. "KELUN E
com Medicine"
Pre-market Post-market
Suggestion and Pharmacovigilance
Consultation
Sichuan Kelun Pharmaceutical Research Institute We mainta in a group-based post-market Product
Co. Ltd. is responsible for the establishment and pharmacovig i lance management system. Services
operation of the pre-market pharmacovigilance Under the guidance of the Drug Safety Risk
system for our company. Through the formulation Department of the headquarters each subsidiary
of policies and procedures such as the Standard manages adverse reaction information collection Feedback
Operating Procedures for Pharmacovigilance monitoring reporting signal detection risk
Risk Control Planning and the Procedures for assessment and post-market researchaiming
Collection Processing and Submission of Reports to ensure consumer drug safety. In addition the
on Serious Adverse Incidents we have effectively Company regularly organizes independent audits Adverse drug reactions obtained will be reported to the Drug Safety Risk Management Department of the headquarters.ensured the efficient and orderly conduct of of the pharmacovigilance system to ensure its The HQ office will follow up on missing information in accordance with the Adverse Drug Reaction Reporting and
pharmacovigilance work during the stage. effective operation. Monitoring Procedures. For serious adverse reaction we will report the investigation results of production logistics and
other links to the drug regulatory authorities in a timely manner.
65 66Industrial Collaboration to Create the Future
Pharmacovigilance Enhancement Activities
Launching We deployed a computer-aided detection system that leverages big data and artificial
Intelligent Quality intelligence to automatically identify and assess drug safety risk signals enhancing
In 2024 we implemented a series of systematic and intelligent measures to improve the quality and efficiency of Risk Signal Detection detection efficiency and accuracy.pharmacovigilance work ensuring comprehensive and timely drug safety monitoring and providing a solid foundation for
patient medication safety.Upgrading We upgraded the pharmacovigilance system to improve data processing capabilities
We continuously updated the pharmacovigilance document system in line with Pharmacovigilance
Enhancing Document System and and user-friendliness. Robotic Process Automation (RPA) technology was introduced to domestic and international regulatory updates to ensure compliance and operability.System Maintenance Intelligent Tools automate repetitive tasks optimizing workflows and resource allocation.and Compliance Through regular reviews and a defect information-sharing mechanism we promoted
self-inspection and correction to optimize the pharmacovigilance system.Establishing Individual We implemented a stringent individual case safety report quality control system In 2024 Henan Kelun and Guangxi Kelun In 2024 five marketing authorization holders
Case Safety Report incorporating data verification and review mechanisms to ensure report accuracy. underwent pharmacovigilance inspections by under KELUN PHARMA were recognized as
Quality Control System Regular data quality assessments were conducted to maintain the integrity and provincial ADR monitoring centers and passed national-level outstanding ADR monitoring
consistency of pharmacovigilance data. successfully. units and one was recognized as
provincial-level outstanding.We updated the ADR submission pages on the official website and WeChat public
Optimizing Multi- account improving user interfaces for easier reporting. An automated telephone
Channel Information Pharmacovigilance Mechanisms in Developing Countries
Collection recording system was introduced to reduce manual errors and expand information
collection channels.We export products to regions such as Southeast Asia South America Africa and Europe and conduct post-market
surveillance in developing countries based on the Pharmacovigilance Monitoring and Reporting Management Procedure.We have established an overseas ADR monitoring and reporting mechanism and sign agreements with foreign
distributors clarifying their responsibilities for collecting and transmitting post-market ADR information follow-up and
investigation. Relevant departments handle and report ADRs in compliance with regulations continuously identify and
control risks to ensure consumer medication safety.Pharmacovigilance Training
To enhance the professional capabilities of the pharmacovigilance team we organize regular internal training sessions
and external expert lectures to ensure employees stay updated on the latest regulatory requirements and industry
trends. Through simulated exercises and case studies we strengthen the team's ability to respond to drug safety
incidents ensuring swift and effective action in emergencies. In 2024 we conducted 273 pharmacovigilance training
sessions covering all employees. The training includes both pre-job and continuing education programs.Coverage of Total Number of Total number of
pharmacovigilance pharmacovigilance training participants in
pharmacovigilance
training pharmacovigilance training training hourssessions
100%27310672825
67 68Industrial Collaboration to Create the Future
Customer Service Customer Privacy Protection
Relying on our comprehensive advantages of stable product quality top-notch packaging image considerate service In accordance with the Personal Information Protection Law we have established
and appropriate prices we strongly broaden our development space. Currently our sales network covers all provinces a strict customer information protection mechanism to safeguard the storage
autonomous regionsand municipalities in China excluding Taiwan Hong Kong and Macao. Meanwhile we actively and transmission of personal information transaction records health data and
promote our internationalization strategy and our leading products have achieved bulk exports with a high reputation in other sensitive information and to prevent unauthorized access use or leakage.over 50 countries and regions. We only collect use and disclose necessary information permitted by law and
explicitly authorized by customers and strengthen employees' awareness of
customer privacy protection through internal trainings.In addition we fully respect customers' rights to make informed choices and
keep personal privacy while we are committed to improving customer service
experience. We maintain transparency in any operations involving customer
privacy and promptly respond to customers' requests for inquiries corrections or
In the international market deletions of personal information. Through a series of rigorous and comprehensive
the Company exports to privacy protection measures we strive to create a trustworthy environment so
more than 50 countries In the domestic market that every customer can use our products and services without worries.a n d r e g i o n s i n c l u d i n g we served over 5000
S o u t h e a s t A s i a S o u t h distr ibutors and more
America Africa and Europe than 4000 tertiary
among others. hospitals; Responsible Marketing
We always practice responsible marketing and closely align our business goals with the corporate social responsibilities.In the marketing process we strictly adhere to the Advertising Law of the People's Republic of China and other relevant
laws and regulations insist on promoting our medicine in an ethical scientific and objective manner and prohibit any
distortion exaggeration overemphasis omission or other practices that may lead to factual misrepresentation.Compliance specialists are deployed across business frontlines and a "guidance-supervision-management" tripartite
management system is established focusing on three key responsibilities: Regular promotion which involves periodic
interpretation of updates on compliance policies and regulations for business teams to strengthen organization-wide
compliance awareness through specialized training sessions and case-based warnings; Full-process supervision which
involves dynamic compliance reviews of marketing activities with full-process oversight of academic conference
Improving Customer Services planning and execution through digital tools to promptly identify and mitigate non-compliance risks; High-risk expense
management which involves pre-reimbursement review mechanism for high-risk expenditures such as business
entertainment and academic promotions. This contains a triple verification process document validation context tracing
We always adhere to the customer-centered service philosophy continuously and benchmarking against standards to promptly intercept non-compliant expense claims.optimizing and improving customer satisfaction. Regular customer
satisfaction surveys are conducted and during the reporting period we received a satisfaction rate of
resolved 100% of customer feedback and received a satisfaction rate of over over
98%. Upholding the principle of "customer first" KELUN PHARMA maintains Responsible Marketing Policy
a good communication channel with customers continuously refines its 98%
products and services and wins public trust.In 2019 we issued the Compliance System of Sichuan Kelun Pharmaceutical Co. Ltd. defining compliant marketing
practices. This compliance system is updated annually. The Promotional and Non-Promotional Materials Management
System defines requirements for externally published materials and information mandating internal cross-functional
Customer Complaints and Reports reviews of all materials (promotional or non-promotional) to ensure objectivity and compliance. The Market Service
Provider Management System enhances end-to-end oversight of third-party service providers.We highly value customer feedbacks and suggestions. We have published guide documents such as Product After-sales In 2024 we revised the Responsible Marketing Policy which is applicable to all company and subsidiary (branch)
Information Management . Each subsidiary (branch) has established a management system for collecting classification employees (full-time part-time outsourced or temporary) and published it on official website. The policy covers
investigation and processing of customer feedback. The process ensures that all feedback can be handled properly information disclosure employee training audit supervision environmental protection and social responsibilities further
in a timely manner protects the interests of consumers promotes the audience's medication safety and continuously standardizing marketing practices to ensure all employee interactions with stakeholders and external business activities
improves our product quality. comply with laws regulations and business ethics.
69 70Industrial Collaboration to Create the Future
Responsible Marketing Training
Quarterly Sampling Inspection for Marketing Compliance
We mandate that all marketing personnel complete training session on responsible marketing practices at least once a
year with passing scores required on associated assessments. Additionally the Company conducts ad-hoc training for
third-party partners collaborating with the marketing team (including but not limited to suppliers and distributors) to The Internal Control and Compliance Department conducts
communicate company policy and ensure alignment with the company's standards in actual business operations. comprehensive quarterly sampling inspections of headquarters
and regional operations. In 2024 four rounds of quarterly sampling
In 2024 we organized compliance training sessions with a total of 8800 participants accumulating 117800 hours of inspections were performed systematically reviewing marketing
learning. The training covered all employees in the marketing system and addressed multiple key areas including but activity records expense vouchers and other documents to assess
not limited to compliance system policies common expense reimbursement procedures and comprehensive compliance the effectiveness of compliance policies and adherence to laws
policies and risk guidelines. Through simulated marketing scenarios involving potential compliance risks such as and regulations. High-risk business segments were prioritized
misleading advertisements and unauthorized data usage we demonstrated how to identify and mitigate these risks to for retrospective analysis and a classification mechanism for Sampling in Progress
employees. addressing violations was established.During the reporting period we conducted 35 responsible marketing audits;
Responsible marketing audits covered 2956 employees encompassing all personnel within the
marketing system.Academic Activity of Compliance Training Compliance Training for Common Expense
Reimbursement Practices
Building a Sustainable Supply Chain
In 2024 all marketing personnel completed an average of 5.7 training hours on the Compliance System. We strictly adhere to the Drug Administration Law of the People's Republic of China the Company Law of the People's
Republic of China the Law of the People's Republic of China on Inviting and Bidding Tenders and other relevant laws
and regulations. In alignment with GMP requirements and internal management standards we have established a
Responsible Marketing Audit series of policies and guidelines including the Material Supplier Management Measures Material Supplier Quality
Audit Management Measures Material Supplier Performance Management Measures and Material Supplier Lifecycle
To ensure compliance in marketing activities we implement a multi-dimensional and systematic approach to responsible Management Strategy to standardize supply chain management. Additionally we actively collaborate with suppliers
marketing supervision and audit. The scope of audit covers the headquarters subsidiaries (branches) and third-party to address product quality and safety issues conduct on-site diagnostics training and improvement projects promote
partners encompassing all marketing operations including infusion products non-infusion products OTC products and compliance and energy-saving initiatives within the supply chain and support suppliers in obtaining certifications for self-
APIs. improvement. These efforts are aimed at building an efficient healthy green and sustainable supply chain.The Internal Control and Compliance Department conducts routine monitoring and inspections of the marketing
team's compliance practices. Annually it organizes a series of compliance initiatives and self-assessments to enforce Supplier Access and Management
corporate compliance requirements while supervising and spot-checking the implementation of compliance efforts. The
Internal Audit Department performs internal audits across various business segments in alignment with the company's
operational developments and audit priorities. Identified audit issues are tracked regularly until resolved relevant policies Supplier Access and Certification
are continuously improved and compliance awareness is strengthened through training. As of the end of the reporting period We implement a rigorous and standardized supplier access
process. Staff from the Supply Department strictly follow the 100% of the company's API suppliers
Implementation of Unannounced Inspection Mechanism Material Supplier Management Measures to screen qualified
suppliers based on material quality assessment (including passed GMP compliance inspections;
suitability of quality standards) process suitability assessment
The Internal Control and Compliance Department established an unannounced inspection mechanism for (including test and process validation) and product quality over 95% of API manufacturers
marketing activities. In 2024 over 130 unannounced inspections were conducted across headquarters departments assessment (including stability) and strictly control basic
and regional operations focusing on the compliance and effectiveness of marketing activities. Through on-site or threshold requirements for supplier access. Beyond mandatory 90% of excipient manufacturers and
online inspections without prior notice the department reviewed original data such as business process records qualifications we place significant emphasis on suppliers'
observed on-site activities and conducted interviews to promptly identify potential risks in marketing activities. performance in quality management system EHS management packaging material manufacturers obtained
This mechanism strengthens real-time oversight ensures timely identification and rectification of issues and forms system social responsibility and environmental protection. ISO 9001 quality management system
a dynamic monitoring network covering the entire business chain significantly enhancing the standardization of Under equal conditions priority is given to suppliers certified certification.marketing activities. under ISO management systems and the procurement share of
high-quality suppliers is continuously increased.
71 72Industrial Collaboration to Create the Future
Material Classification and Supplier Categorization Diversifying Suppliers
We adopt a multi-region multi-country procurement strategy and assess suppliers' risk
We classify the materials into Grade I to IV levels based on a comprehensive analysis of quality risks of the products resilience to ensure supply chain stability.nature of materials the use and dosage of materials the degree of impact of materials on product quality adopting
different supplier management methods for different levels of materials.Additionally we classify suppliers into three categories based on the qualification verification (approval) status: potential Reasonable Material Standards
suppliers approved suppliers and unqualified suppliers. For approved suppliers further classification is conducted based
on material supply risk and material purchase amount and the refined categories include strategic suppliers leveraged
suppliers bottleneck suppliers and general suppliers. Tailored management strategies are implemented for each supplier We set scientific material standards to balance quality and cost avoiding supply shortages or
category. cost fluctuations due to excessively high standards.Strategic Partnerships
H Grade I Material H
We establish long-term strategic partnerships with core suppliers and sign supply
Bottleneck Suppliers Strategic Suppliers agreements to ensure stable provision of key materials. Regular evaluations and in-depth
M M collaboration further enhance supply chain efficiency.Grade II Material
L Grade III Material L
Supplier Quality Improvement
General Suppliers Leveraged Suppliers
Grade IV Material
N N
We place high importance on supply chain quality management and implement risk control measures from the production
L H source. Continuous support and guidance are provided to suppliers through workshops training on-site diagnostics and
Material Consumption Amount of Purchase benchmarking activities to improve production quality management and product quality. These efforts ensure long-term
stable provision of qualified materials and foster mutually beneficial partnerships.Specific measures for supply chain quality improvement include:
Supplier Risk Management
Upholding the risk management philosophy of "quality first prevention foremost" we have established a systematic and
multi-dimensional supplier risk management system. Through proactive planning and dynamic management we aim to
build a secure stable and sustainable supply chain ecosystem providing a solid foundation for the company's steady
operations and long-term growth.Information Collection and Risk Prediction Developing and executing sup- Conducting targeted seminars with Providing guidance on process im-
plier quality audit plans. Through suppliers to collaboratively address provements on-site management
We regularly monitor industry trends assess market risks anticipate supply monopolies and audits we emphasize our specific product quality and safety issues quality inspection and contam-
price fluctuations and develop inventory and procurement plans. Emergency mechanisms are requirements for suppliers across develop improvement plans and ination control strategies when
established for sudden risks with dynamic adjustments to inventory and production plans. all aspects. Audit results serve as reach consensus on corrective ac- material supply or quality issues
a key factor in annual comprehen- tions. arise. Multiple on-site diagnostics
sive performance evaluations and and corrective measures are imple-
Avoiding Single Source directly influence subsequent pro- mented to assist suppliers in timely
curement shares. rectification and improvement.We diversify supplier base to reduce dependence on single supplier and ensure material
supply continuity. For products under development supply risks are evaluated in advance to
build a diversified supply system.
7374
Impact on Product
Supply RiskIndustrial Collaboration to Create the Future
Supplier Quality Training
To effectively manage supply chain quality risks we conduct quality management training for suppliers annually After each audit we compile audit reports and conclusions based on audit records or data summary supplier defect
through online offline and material-sharing methods. The training content is customized based on supplier performance rectification reports or rectification plans.evaluations and issues identified during audits to enhance relevance and effectiveness.In 2024 we systematically organized supplier training programs focusing on key areas such as change management
deviation management lean production tool application CCS (contamination control strategy) quality management
system development and process and quality control improvements. Throughout the year nearly 300 training sessions Audit conclusion of "approved": It indicates the supplier's quality management system meets the
were held totaling approximately 400 hours covering 320 strategic suppliers leveraged suppliers bottleneck suppliers Company's requirements and production quality management is compliant. The supplier may continue
and some high-risk suppliers (those involved in high-risk quality incidents in 2023 and with audit results of "conditional providing materials within the audit scope.approval") and involving more than 2000 participants. These targeted initiatives significantly improved suppliers' quality
management capabilities further strengthening the foundation for supply chain quality and safety. Audit conclusion of "conditionally approved": It indicates gaps between the supplier's quality
management system and the Company's requirements or non-compliant production quality management
requiring improvements. Follow-up audits are required for improvements when necessary.Audit conclusion of "not approved": It indicates the supplier's quality management system or production
quality management fails to meet the Company's requirements posing significant quality risks. The supplier
Number of supplier training must rectify issues and undergo a full re-audit before resuming business.sessions
320
Coverage of supplier training In 2024 KELUN PHARMA's subsidiaries (branches) strictly followed the established audit plan and successfully completed
comprehensive supplier audits. 320 suppliers underwent on-site audits and 100 supplier underwent written audits
100% achieving 151% of the annual target. The audits covered strategic suppliers leveraged suppliers bottleneck suppliers general suppliers and "high-risk suppliers" (those involved in high-risk quality incidents in 2023 and with audit results of
"conditional approval"). The audits significantly improved supply chain quality management and ensured stable operation
Supplier training hours of the supplier system.
400
Number of supplier participating
in supplier training
over 2000
Supplier Quality Training in Progress
On-site Supplier Audit
Supplier Audit
To establish a robust material supplier quality audit management system proactively mitigate risks at the source and
continuously enhance supplier management capabilities across production companies we have implemented the Material Number of supplier Number of on-site Number of written Number of remote
Supplier Quality Audit Management Measures and adhere to them strictly. This system standardizes and institutionalizes audits supplier audits supplier audits supplier audits
material supplier quality audit practices. Audits are conducted based on GMP's six major systems: quality assurance
quality control production management material management facility and equipment management and packaging
and labeling systems ensuring product quality and safety from the source. We conduct annual audits for Grade I II III 420 320 100 2
and IV material suppliers through on-site documentary or remote methods in accordance with material classification
requirements.
75 76Industrial Collaboration to Create the Future
Supply Chain Integrity Construction
We are committed to promoting integrity construction in the supply chain prohibiting all forms of commercial bribery and Internal Standardized Management
requiring all employees to adhere to the highest ethical standards of business. We encourage upstream and downstream
partners and stakeholders to support accept and implement the Anti-Commercial Bribery System and Code of Business
Conduct ensuring compliance with applicable laws regulations and internationally recognized ESG standards. We have established comprehensive procurement management processes and a supplier lifecycle management system
adhering to the "three-three principle" and utilizing the information-based procurement management platform - Kelun
Pharma Electronic Procurement System to track manage and trace procurement activities. These internal management
measures effectively mitigate the risks of malpractice in supplier management ensuring fair and impartial procurement
External Restrictions and Supervision practices while advancing integrity in the Company's supply chain.Additionally we require all new employees to sign the Kelun Group Compliance /Integrity Commitment Letter upon
We integrate applicable clauses of the Code of Business Conduct into contract management with suppliers and business onboarding while existing employees reconfirm their commitment by re-signing the document annually during the
partners. Notably we mandate that all suppliers and business partners must unconditionally undergo our annual Compliance Season. During the reporting period all employees required to sign the Kelun Group Compliance /Integrity
evaluations on anti-corruption policy formulation and implementation assessment. Commitment Letter had completed the signing process.Green Procurement
Supplier Anti-Corruption Compliance Investigation
We highly value green development in the supply chain and actively fulfill social responsibilities to promote its green
In 2024 we continued to conduct comprehensive anti-corruption compliance investigation of its suppliers and and low-carbon development. In alignment with the Green Manufacturing - Green Supply Chain Management in
thus assessing whether suppliers had established robust compliance management systems and examining the Manufacturing Enterprises - Specifications for Assessment we manage suppliers across the entire product lifecycle
development and implementation of their anti-corruption policies. from product design and raw material procurement to production transportation storage packaging usage recycling
and disposal. Furthermore we continuously monitor suppliers' EHS (Environment Health and Safety) performance
87.88% suppliers have internal independent compliance department; integrating annual assessment results into their overall evaluation. When allocating procurement shares for the following
year priority is given to suppliers with stronger EHS performance under equal conditions.
96.46% suppliers have anti-corruption and anti-bribery policy in place;
93.43% suppliers hold anti-corruption and anti-bribery training to main positions;
91.41 % suppliers have employees sign anti-corruption and anti-bribery agreement.
We mandate that all procurement contracts with suppliers must incorporate the Sunshine Agreement which stipulates:
Both parties shall prohibit the solicitation or acceptance of any improper benefits. Either party shall not deliberately create
obstacles for the other. Violations can be reported through designated channels specified in the agreement. Meanwhile
we include anti-corruption as a screening criterion from the supplier access stage requiring all suppliers to study the
Sunshine Agreement Training Video on KELUN PHARMA's official procurement platform achieving 100% implementation.As of the end of the reporting period 100% of core suppliers have signed the Sunshine
Agreement
100% of suppliers have studied the Sunshine Agreement Training Video
77 7878People-oriented and Shared Growth
04
People-oriented
and Shared Growth
KELUN PHARMA firmly believes that talent is the
cornerstone of corporate development. We place
high importance on protecting employee rights and
have established a fair and transparent employment
system emphasizing equality and diversity in the talent
structure. With outstanding capabilities we attract
talent nurture them through independent innovation
and serve them with generous benefits. We regard
talent development as the most critical responsibility.At the same t ime we adhere to occupat ional
health and safety standards creating a safe and
comfortable working environment. We are committed
to safeguarding employees' physical and mental health
fostering mutual growth between us and our employees
and sharing the fruits of corporate development.
79 80People-oriented and Shared Growth
Talent Development Strategy
Employee Composition
Compliance in Employment
We consistently adhere to a people-oriented principle strictly complying with domestic laws and regulations such as Other regions Employees under
the Labor Law of the People's Republic of China the Labor Contract Law of the People's Republic of China the Special labor dispatch
Provisions on Labor Protection for Female Employees the Law of the People's Republic of China on the Protection of 296Female Number and system
Minors and the Provisions on Prohibition of Child Labor. Additionally we actively implement international standards like Number and proportion of
the United Nations Global Compact and the International Labor Organization (ILO) Core Conventions to ensure compliant proportion of
employees 158employees
employees by
recruitment equal employment and comprehensive protection of employee rights. We are dedicated to fostering a fair 9778 by type of gender
just diverse and inclusive workplace environment. employment
Male employees Employees under
Recruitment and Employment Management 12086 labor contract
21410
We have established a Recruitment Management System applicable to all
employees aiming to build a transparent and fair recruitment mechanism that
ensures equal employment opportunities for all candidates. Furthermore we
have implemented the Employee Diversity and Labor Employment System Employees aged 30 and below
which applies to all employees of the headquarters and its subsidiaries During the reporting period we
(branches) including full-time part-time outsourced and temporary 7326achieved Employees aged 51 and above
workers. This system explicitly prohibits child labor opposes forced labor
protects employee diversity and firmly rejects any form of discrimination 1406 Senior
or harassment. It ensures employees' legitimate rights and interests in fair 100% social insurance management
compensation workplace safety career development and democratic coverage for employees Number and Number and employees
participation are fully realized. proportion of proportion of
employees by employees by 12
age rank
Middle
Grassroots employees management
Employees aged 41 to 50 Employees aged 31 to 40 18181 employees
Unit：Persons 4399 8733 3671
25000
20000
Opposing Child Labor and Forced Labor
15000
We strictly abide by national and international labor protection laws and
10000 regulations. We have implemented the Employee Diversity and Labor
Employment System firmly prohibiting child labor and forced labor. During During the reporting period
5000 recruitment we enforce rigorous age verification to ensure all new hires
meet the legal minimum working age (16 years old). This is achieved
through ID verification age inquiries during interviews and pre-employment no incidents of child
0 background checks. We regularly review recruitment employment and labor or forced labor were
compensation processes to ensure all employees participate voluntarily reported. All employees met
equally and fairly with no form of forced labor. Additionally we provide the legal minimum working age
training and education to enhance employees' awareness and ability to requirements.Total number of employees Number of newly hired employees protect their rights maintaining a positive labor environment.
81 82People-oriented and Shared Growth
Talent Attraction
We adhere to the employment policy of "strict screening only selecting true talents; Give rewards and punishments Female Employee StatisticsUnit: Persons
regardless of relation". We use various channels such as social recruitment campus recruitment internal and external
referrals and headhunting recommendations to attract talents with different backgrounds and experiences through a
diversified standardized and transparent recruitment process laying a talent foundation for the long-term development
of the Company and strengthening employer brand building. In order to respond to the needs of internationalization we
recruit talents from the United States Europe India and countries linked to the Belt and Road to help overseas business
development. During the reporting period the Company has created a total of 3598 job opportunities for society.In addition to introducing external talents we also focus on the effective flow of internal talents. The Company regularly
initiates internal selection and recruitment processes for vacant positions and employees can apply through open
channels making talent flow more efficient. To encourage all employees to recommend outstanding talents we have
established the Regulations on the Management of Internally Recommended Talents . Employees can recommend
candidates through online or offline channels such as the Company's official website "KELUN PHARMA Recruitment"
WeChat public account official WeChat account and corporate email.Employer Honors
During the reporting period KELUN PHARMA and its subsidiaries (branches) have demonstrated unremitting efforts and 2022 2023 2024
outstanding results in building harmonious labor relations and have won over 14 enterprise labor relations honors and Number of female Number of female senior Number of female executive Number of new
awards from national provincial municipal and district governments and authoritative institutions. These honors fully employees management employees management employees female employees
confirm the continuous involvements and significant achievements of KELUN PHARMA in employee rights protection
labor relations management and corporate culture construction.Unit: Persons Ethnic Minority Employees
Diversity and Inclusion 2500
The Company is dedicated to fostering a diverse equal and inclusive
2000
corporate culture to attract and retain exceptional talent while encouraging
employees from all backgrounds to excel. We have established and
implemented the Employee Diversity and Labor Employment System
which designates the ESG Committee under the Board of Directors to be 1500We set a goal to "achieve a
responsible for the development revision execution supervision of this female employee ratio of at 2022 2023 2024
policy. This includes diversity training diversity management goal setting least
and progress tracking. Number of ethnic minority employees
Diversity and inclusion are core components of KELUN PHARMA's ESG 46% by 2030" Diversity Training
strategy. To ensure effective implementation we have set a goal to "achieve
a female employee ratio of at least 46% by 2030". This goal is integrated The Company actively cultivates an inclusive corporate culture and places strong emphasis on training related to the
into the management's performance evaluations and directly linked to their Employee Diversity and Labor Employment System. With support from relevant departments we organize at least one
compensation. Additionally recruitment teams are incentivized through annual mandatory training session on this system for all employees.bonuses to promote diversity. The HR Department conducts an annual review of diversity progress at the beginning of
each year analyzes relevant data and report implementation status to the ESG Committee to ensure goal attainment.KELUN PHARMA Conducted Special Training on Employee Diversity and Labor Employment
System
To enhance employees' understanding of diversity and labor policies in 2024 the Company conducted special
training on the Employee Diversity and Labor Employment System for all employees. The training covered the
importance of diversity talent recruitment and development labor management and feedback mechanisms.Through systematic explanations and case studies employees gained a deeper understanding of diversity and
its role in the workplace as well as the principles and procedures of labor employment. We used the ELN learning
platform for online training ensuring flexible participation and review. Post-training online assessments showed an
88% pass rate indicating effective comprehension and mastery of the content.
83 84People-oriented and Shared Growth
Material Benefits to Promote Diversity Talent Retention
The Company actively enhances its performance in diversity and inclusion by offering diversified material benefits
thereby supporting the achievement of diversity goals. It strictly complies with the Special Provisions on Labor Protection
for Female Employees ensuring female employees enjoy special leaves such as paid marriage leave maternity leave Compensation Management
and breastfeeding breaks. Additionally it provides flexible late-arrival leave for pregnant employees and fully equipped
lactation rooms to facilitate a smooth return to work for new mothers. Furthermore we care women's health by
promoting cancer prevention awareness effectively reducing the risks posed by breast and cervical cancers to women's
well-being. In order to fully leverage the incentive effect of salary and benefits and maximize the motivation
of employees we have established a comprehensive compensation system consisting of fixed and
We respect the customs and cultures of foreign and ethnic minority employees granting them cultural holidays beyond variable salaries covering all employees (including non-management staff and non-sales staff).standard leave to demonstrate inclusion for cultural diversity. Moreover for employees at overseas bases the Company The principle of remuneration based on contributions and performance is adopted. The floating
adheres to a global operation philosophy and implements the Regulations on the Overseas Base Visits (Anti Visits) salary is linked to employee performance evaluation results strengthening incentives and forming
Management. It has introduced exclusive welfare plans including commercial insurance coverage complimentary health a healthy competitive mechanism within the Company.check-ups and holiday greetings for overseas employees and their families further fostering the development of a
diverse and inclusive corporate culture.We have established a standardized and reasonable salary distribution mechanism based on
Xindu Base Held Health Lecture for Female Employees the principles of "make use of talents distribution according to work fairness in treatments
and consideration of benefits". This combined with the characteristics of production operation
and management and taking into account the supply and demand situation of the labor
market differences among employees and our paying ability. We ensure that the salary level
To better care for women's health raise awareness of cancer of employees is competitive compared with local peers and major domestic competitors in
prevention and reduce the risks posed by breast and cervical order to effectively attract retain and motivate talents and improve the competitiveness. We
cancers Xindu Base organized a health education lecture on also ensure that male and female employees with the same job functions contributions and
prevention and treatment of two major cancers on May 16 performance receive equal compensation in our Company.
2024. The event invited Dr. Zhou Li Director of Gynecology
and Dr. Ma Bangying Director of Breast Surgery from Xindu
District Maternal and Child Health Hospital to deliver expert
insights. The lecture aimed to enhance female employees' We will regularly monitor employee compensation to ensure effective implementation of
awareness of cancer risks educate them on scientific relevant policies. At the same time a sound compensation appeal mechanism has been Xindu Base's Health Lecture on
prevention and early screening methods and promote overall established and internal communication and appeal channels related to compensation Prevention and Treatment of Two
physical and mental well-being. Major Cancers have been opened to all employees. The scope of appeal includes compensation benefits
attendance performance evaluation and rewards and punishments.Anti-Discrimination and Anti-Harassment Performance Appraisals
We are committed to maintaining a fair just and inclusive workplace strictly enforce the Employee Diversity and Labor
Employment System and oppose all forms of discrimination and harassment. During recruitment candidates of all In order to establish a performance-oriented culture and achieve continuous improvement of organizational and individual
genders races ethnicities pregnancy statuses disabilities or religions are treated equally. The Company fosters team performance through standardized and effective performance management mechanisms and ensure the achievement of
diversity by valuing cultural backgrounds and perspectives. We respect employee diversity and differentiation reject all the Company's strategic and operational goals we have formulated the Employee Performance Management Measures
forms of discrimination bias or unlawful differential treatment and provide inclusive services. and various specialized performance bonus assessment plans covering all employees (including non-management
staff and non-sales staff). We also regularly organize departments and employees to conduct performance evaluations
according to the agreed performance evaluation cycle (monthly/quarterly/semi-annual/annual) resulting in organizational
KELUN PHARMA holds a zero-tolerance policy for harassment intimidation and individual performance.or bullying in the workplace and relevant environment. It upholds gender
equality principles takes strong action against sexual harassment and To meet the needs of different positions and job natures and to fully motivate employees we have established diversified
safeguards employee rights. We have established the Employee Appeal employee performance assessment methods including Key Performance Indicator (KPI) method goal management
System which outlines clear reporting procedures and corrective or method behavioral observation method and others. Taking the Key Performance Indicator (KPI) method as an example During the reporting period
disciplinary measures for human rights violations including discrimination it drives business development through the setting of KPIs. Employees extract and develop key performance evaluation KELUN PHARMA did
and harassment. For such misconduct employees can file a complaint with indicators from the annual key work plan departmental performance indicator decomposition core job responsibilities
appeal handling committees following the channels and procedures specified not and other aspects to form a personal annual performance plan table; The performance is reviewed and adjusted in a in the system. For more details on the reporting procedures please refer experience any quarterly or semi-annual manner with department heads providing performance coaching during the process; At the end
to relevant content under "appeal handling procedures" on page 3 of the incidents of workplace of the year the assessment will be conducted through a combination of performance self-evaluation and department
Employee Appeal System available in the sustainable development section discrimination or harassment head review. The evaluation results serve as important bases for bonus distribution annual salary adjustments annual
of the Company's official website. promotions talent development and awards of honors.
85 86People-oriented and Shared Growth
Performance Feedback Mechanism Material Non-Pay Benefits Programs
After the performance assessment assessors provide timely feedback to the individual being assessed on the assessment The Company has partnered with well-known insurance companies to provide employees with an exclusive
results. This can be done through face-to-face interviews or phone conversations allowing the individual to understand purchasing platform for "Million Medical" coverage. This platform offers comprehensive medical coverage including
the Company's expectations and areas for improvement in their performance. This process helps create a personal high hospitalization expenses special outpatient treatments and chemotherapy for malignant tumors. Employees
performance improvement plan. The individual being assessed can also communicate any difficulties they encountered can enjoy exclusive discounts and a seamless purchasing experience. Employees can purchase personalized health
in achieving their performance goals and request guidance and assistance from their superiors. Once both parties have fully protection plans at discounted prices effectively mitigating the financial risks of illness.communicated and reached an agreement they jointly complete and sign the Performance Feedback Interview Record Form. The Company has a deep collaboration with a renowned insurance Company to launch a "Personal Pension"
program aiming to create a secure and guaranteed retirement plan for employees. Through this policy we
If an employee has any objections to the assessment results they should raise a written performance appeal to the HR encourage employees to actively participate in personal pension savings. They can choose to purchase designated
Department. Upon receiving an employee's appeal the HR Department should provide a response within 3 working days savings deposits financial products commercial pension insurance public funds and other personal pension
indicating whether the appeal will be accepted. Once the appeal is accepted an investigation should be conducted into products in accordance with relevant regulations. Full accumulation is implemented and employees can enjoy tax
the appeal content. Communication and coordination should be carried out with relevant departments or individuals. If incentives as per government regulations.no resolution can be reached through coordination the case should be escalated for a decision by the General Manager
Department. After the decision by the General Manager Department the HR Department is responsible for providing the The Company provides free annual medical examinations for all employees to safeguard their physical health
appeal resolution to the appellant. prevent major diseases and reduce healthcare risks.The Company has established the "Kelun Love Fund" to provide timely assistance for employees and their families
Equity Incentives who are facing major illnesses or accidents.To further optimize the Company's long-term incentive mechanism attract and retain outstanding talents and fully The Company continues to enrich the diversity of non-pay benefits and actively develops innovative welfare programs
motivate the Company's management personnel and key employees we actively integrate the interests of shareholders as well as exploring welfare care plans tailored to specific employee groups. Each year the Company takes into account
the Company and the incentivized individuals. This alignment ensures that all parties are focused on the Company's the actual needs of human resources management and changes in the external environment. Consideration is given
long-term development. In accordance with relevant laws regulations and normative documents the Company has to different customs legal requirements and employee needs across various global operating locations. The Company
launched multiple rounds of equity incentive plans. provides overseas employees of companies not within China with overseas employee insurance allowances medical
examinations and also provides insurance and medical examinations for the families of overseas employees. Regular
visits and support are extended to overseas employees and their families.By the end of the reporting period there were existing equity incentive/employee stock ownership
KELUN PHARMA BENEFITS LIST
plans in KELUN PHARMA covering a total of 966 employees .Statutory benefits Non-statutory benefits Non-statutory benefits for eligible
Kelun Pharmaceutical 2021 Restricted Kelun Pharmaceutical 2021 Employee Kelun Pharmaceutical 2022 Employee for all employees for all employees employees
Stock Incentive Plan covering Stock Ownership Plan covering Stock Ownership Plan covering ● Five social insurance and ● Personal pension ● Employer liability insurance
387 9 one housing fund ● Love fund ● Free dormitory employees employees 117 employees ● Legal holidays and ● Million medical insurance ● Free lunchvacations
● Commercial insurance ● Education subsidy
● Ethnic holiday breaks
Kelun-Biotech Employee Stock CHUANNING BIOTECH 2023 Restricted CHUANNING BIOTECH Employee ● Health examination ● Title subsidy● Paid annual leave
Ownership Platform covering Stock Incentive Plan covering Stock Ownership Platform covering ● Annual medical examination ● Traffic allowance
● Marriage leave maternity
● Paid tourism ●
166 35 264 leave paternity leave
Transportation allowance for Spring Festival
employees employees employees breastfeeding leave
● Travel subsidy travel
●
● Funeral leave ● Expatriation subsidy Communication subsidy
● Equity incentive plan
● High temperature ● Holiday bonuses (gifts)
● Women's Day bonus (gifts)/ holiday
Note: The total number of employees covered is 966 which differs from the total sum in the breakdown below. allowance ● Wedding gifts
This discrepancy is due to 12 recipients being granted duplicate awards. Birthday gifts ● ● Children's Day gifts
● Congratulations on childbirth ● Home leave
Employee Care and Welfare ● Factory anniversary gifts ● Late arrival leave for pregnancy
● Retirement condolences ● Service length subsidy
The Company always regards employees as its most valuable asset and is committed to enhancing employee happiness Comfort for illness ● ● Breastfeeding room
and sense of belonging through a comprehensive welfare system and a wide range of employee activities and through
Comfort for work-related Injuries ● ● Breastfeeding leave
diverse welfare and care measures.Funeral funds ● ● Overseas employee insurance
Employee Benefits ● Exclusive benefits for internal car
● Overseas employee subsidy
purchases ● Insurance for families of overseas employees
The Company is committed to continuously improving employee well-being fostering employee motivation and ● Medical examinations for overseas employees
enhancing a sense of belonging and team cohesion. We provide a wide range of non-pay benefits benefits and support ● Medical examinations for families of overseas
for all employees in addition to statutory benefits such as social insurance and housing provident fund contributions. We employees
also offer special benefits for eligible employees.
87 88People-oriented and Shared Growth
Employee Care Employee Communication
In order to create a more harmonious healthy and positive work atmosphere the Company promotes work-life balance To safeguard employee rights optimize management enhance satisfaction
by establishing employee activity centers gyms libraries and other facilities. We have held various series of sports and foster enterprise cohesion the Company has established systems such as
competitions multiple times such as badminton basketball and table tennis; Organized various team building activities the Employee Appeal System and created various channels for feedback and
including masquerade dance Winter Solstice food themed festival activities fun sport day Chinese Valentines Day suggestions. Employees can choose the appropriate channel to provide feedback
festival fellowship activities etc; Established interest clubs such as choirs fitness groups table tennis clubs badminton and raise concerns and relevant departments will conduct joint investigations and
clubs and dance clubs greatly enriching the lives of employees. During the reporting provide timely feedback. During the reporting period the Company implemented period all employee-
the Chairman's Hotline Reporting System allowing employees to report significant related complaints
issues directly to the chairman. The Company and its subsidiaries (branches) have
Shandong Kelun Women's Day Reading Sharing Event Empowering Women in the Workplace were properly handled also set up a "General Manager's Mailbox" to actively listen to employee voices and and there were no
encourage them to offer suggestions and ideas for the Company's development. disputes raised by the
On Women's Day 2024 the Shandong Kelun Reading Club Additionally the Company conducts employee satisfaction surveys organizes individuals who filed the
organized a reading sharing event with the theme Being a employee forums and discussions engages with university students and provides complaints.Woman in the Workplace. This event not only strengthened platforms for employees to express their wishes. This includes the use of WeChat
communication and connection among employees but also groups democratic meetings staff representatives meetings on-site office sessions
promoted personal growth and development. By reading with the general manager regular inspections team leader meetings and work
more books and reading good books employees continuously
enhance their cultural literacy and cultivate a life philosophy Shandong Kelun "Reading Sharing
meetings. These platforms ensure that employee concerns are promptly and
effectively addressed.of loving life and being confident and resilient. Conference"
Formal Grievance Reporting Procedure
Headquarters & Xindu Base: "Little Kelun Employee" (Children of Employees) Embark on an The Company is committed to providing employees with a smooth and confidential formal grievance reporting procedure.Exploratory Journey into pharmaceuticals The confidentiality of the appellant and their appeal information is strictly maintained and necessary measures are taken
to protect the personal safety and lawful rights and interests of the appellant. During the reporting period the Company
In July 2024 the "Little Kelun Employee - Exploratory Journey into pharmaceuticals" event hosted by the Human revised the Employee Appeal System clarifying the departments responsible for handling appeals the scope of appeals
Resources Department of the Company's headquarters and organized by Xindu Base took place at Chengdu and the channels for submitting appeals while optimizing the appeal handling procedure. The scope of appeals includes
Medical College. A total of 30 children of employees from the headquarters Kelun-Biotech Research Institute and instances of unfair treatment by superiors or colleagues as well as other matters where lawful rights and interests have
Xindu Base participated in the event and had the opportunity to personally experience the allure of the medical been violated (such as any form of human rights violation including discrimination harassment and bullying).and pharmaceutical professions. The children had the opportunity to visit the university library explore the Life The headquarters and subsidiaries (branches) have established "appeal handling committees" to carry out research
Science Museum learn about emergency care at the first aid center experience traditional Chinese medicine tie- feedback and response to employee appeals. Appellants can submit their appeals through the appeal handling
dyeing and engage in in-depth interactions with professors. Through these activities they gained a close-up committees at the headquarters and subsidiaries (branches). They can also choose to report through other appropriate
understanding of the rigor and wonders of the medical and pharmaceutical fields. The event sparked their interest means as deemed suitable by the reporting person. Appeal channels include appeal hotlines appeal emails and written
in the pharmaceuticals industry and deepened the emotional connection between the children and their parents' reports. The Company has separately established the "Appeal Handling Procedure for Employees of Headquarters"
professions. They not only acquired valuable knowledge in pharmaceuticals but also experienced the academic and the "Appeal Handling Procedure for Employees of Subsidiaries (Branches)" for the headquarters and subsidiaries
atmosphere of a university laying a solid foundation for their future academic planning. This event provided (branches) respectively. For more details on the reporting procedures please refer to relevant content under "appeal
more learning and growth opportunities for the children of employees and contributed to the preservation and handling procedures" on page 3 of the Employee Appeal System available in the sustainable development section of the
development of the Company's culture. Company's official website.Support for Employees in Distress Appellant Protection Measures
The Company has always attached great importance to assisting employees in difficult situations. Through initiatives The Company has implemented measures to protect appellants. During the appeal handling process relevant personnel
such as the "Kelun Love Fund" and "Million Medical" insurance the Company has established a comprehensive and are required to keep the information confidential and strictly avoid any retaliation against the appellant. Those who
secure healthcare protection system. This enhances employee happiness and fosters unity within the Company. violate this requirement will face severe punishment.During the reporting period: Labour Union Communication
The Kelun Love Fund Committee has received donations totaling over RMB 1.35 million from the We firmly abide by local laws and regulations and continuously improve the democratic management system within the
headquarters subsidiaries and certain regions. It has provided love and assistance funds totaling enterprise. We have established trade union organizations in accordance with legal norms such as the Constitution of
over RMB 1.39 million for 98 employees and their family members who are suffering from serious the Chinese Trade Unions and the Trade Union Law of the People's Republic of China. The Company regularly convene
illnesses or have experienced accidents. Since its establishment the Group's Love Fund has provided employee representative conferences with representatives including but not limited to frontline workers technical
assistance for 1783 individuals in need with a total assistance amount of over RMB 14 million. managers leading cadres party members Youth League members young employees and female employees. ensuring
broad democratic participation. This democratic mechanism has played a substantive role in resolving labor disputes
A total of 638 individuals have purchased medical insurance through the "Million Medical" exclusive implementing labor protection supervision fulfilling labor legal supervision functions and protecting the legitimate rights
platform. and interests of female employees effectively safeguarding the democratic rights of all employees in participating in the
process of enterprise reform and development.
89 90People-oriented and Shared Growth
Employee Engagement and Satisfaction Survey
Talent Retention
We firmly believe that employees are the core driving force and valuable asset for enterprise development. In order
to continuously optimize human resource management improve organizational efficiency and create a harmonious The Company actively builds a comprehensive and sustainable talent
and efficient work environment we attach great importance to and continue to pay attention to the dynamic changes management system. Through key dimensions such as compensation and
in employee engagement and satisfaction. In order to gain a deeper understanding of employee needs improve the benefits employee development promotion channels and employee care
work environment enhance team cohesion and work efficiency the Company annually conducts a engagement and the Company strives to enhance the value realization and career stability From 2022 to 2024 the
satisfaction survey covering all employees. of employees. This helps to reduce employee turnover rate and improve Company and its subsidiaries
organizational effectiveness. Each year the Company conducts statistical (branches) did
During the reporting period the Company designed dedication-related questions from the dimensions of emotions analysis of employee turnover data and formulates targeted improvement
cognition and behavior. For satisfaction questions were designed based on five dimensions: job content work measures. During the reporting period the employee turnover rate was not experience
environment management compensation and benefits and career development. The survey was conducted online approximately 15.73% (16.08% in 2023) with no significant turnover among significant layoffs or any major
through a questionnaire. senior management personnel. Over the past three years the employee mergers or acquisitions that
turnover rate has shown a decreasing trend indicating the effectiveness of adversely affected employees.During the reporting period the Company conducted a engagement and satisfaction survey covering all employees talent retention strategies.with an effective response rate of 95.4%. The overall engagement score was 95% and the
Employee Turnover Rate
overall satisfaction score was 92%.The Company continues to track the results of the engagement and satisfaction survey and develops improvement plans 20%
for areas with lower scores. The Human Resources Department at the headquarters organizes all subsidiaries (branches)
to analyze employee feedback and conduct targeted interviews based on the survey results and data analysis. The
purpose is to explore the possible reasons behind the levels of engagement and satisfaction. The department also
organizes key employees to discuss improvement measures strengthen employee trust and sense of belonging and 17.00%
further enhance employee engagement and satisfaction.
16.08%
Dimensions Specific Improvement Measures
15.73%
● Implementing flexible working arrangements (flexible working hours remote work) 15%
Work-life
●
Balance Encouraging paid leave and establishing a reasonable leave policy 2022 2023 2024
● Organizing cultural and sports activities (such as badminton competitions yoga classes etc.)
● Establishing clear career development paths and specifying promotion criteria
Career
● Providing diverse training opportunities (professional skills management skills etc.)
Development
●
Opportunities Establishing an internal mentoring system and assigning mentors to employees
● Encouraging internal job transfers and providing more career development opportunities
● Establishing open communication channels (employee forums general manager's mailbox etc.)
●
Valuing Establishing employee recognition and reward mechanisms (such as annual employee excellence awards)
Employees
● Caring for employees' personal lives (birthday greetings wedding wishes etc.)
● Creating a positive and uplifting corporate culture (team building cultural activities etc.)
● Formulating scientific and reasonable performance assessment indexes
●
Performance Strengthening performance communication and feedback assisting employees in developing improvement plans
Management
● Linking performance assessment results to compensation and benefits
● Regularly evaluating and optimizing the performance assessment system
● Reviewing and optimizing existing work processes simplifying procedures
● Integrating information technology systems with AI to continuously improve system efficiency
Work Processes ● Enhancing communication and collaboration between departments breaking down information barriers
● Encouraging employees to provide improvement suggestions and rewarding excellent rationalization
proposals
● Periodically conducting market salary surveys to ensure salary competitiveness
● Establishing a sound salary and compensation system based on job value individual capabilities and
Remuneration performance
and benefits ● Providing a diverse range of welfare programs (supplemental medical insurance commercial insurance
paid annual leave etc.)
● Addressing individualized employee needs and offering flexible benefit plans
91 The Company's Improvement Plan for Low-scoring Areas 92People-oriented and Shared Growth
Employee Training and Development ESG Indicator Unit 2022 2023 2024
Employee Training System
Total training hours 10000 hours 134.32 170.95 176.18
The Company attaches great importance to talent development and continuously builds and improves an employee Average training hours per
training system based on the principles of ''strategic guidance'' ''hierarchical training'' and "consistent learning employee Hours 70.84 86.35 80.58
and application". The Company closely integrates talent development with its strategic objectives and the needs Total training hours for
of employees' positions. A diverse range of training programs are conducted and various assessment methods are female employees 10000 hours / 76.07 76.63
used to evaluate the effectiveness of training. In addition the Company implements a lifelong learning concept that
Per capita training time for
combines online and offline learning. Since 2017 an online learning platform has been utilized to facilitate the integrated female employees Hours / 83.83 78.60
management of online and offline training. Based on three principles and the concept of compound interest the Company
has built special training programs that provide compounding benefits for employees at different levels and positions. Employee Total training hours for male employees 10000 hours / 94.87 99.55
Customized training programs are developed for management cadres sales personnel quality management personnel training hours
and other specific roles aiming to promote talent development and contribute to the Company's sustainable growth. Per capita training time for
male employees Hours / 88.47 82.18
Total training hours for senior
management Hours / 1032.16 977.67
Our Education and Training Model Average training hours per senior management Hours / 73.73 81.47
Total number of training 10000 times 4.44 6.32 6.16
New Employee Development sessions per year
Onboarding Training Base Internship Expansion of Military Training On-job Learning Annual training expenditure RMB'0000 189.02 428.05 487.80
Employee Number of employees
General Training training trained Persons 18422 19798 21864
Security Business Anticorruption Regulations Product Financial assessment Employee training coverage
Education Reception Training Laws and Knowledge Knowledge …… rate % 100 100 100
Etiquette Training Training Training Training
Professional Training Integration of Industry and Education
R&D System Production System Logistics System Marketing System
In recent years KELUN PHARMA has taken the construction of a national
industry education integration enterprise as an opportunity to deeply
Training Approach participate in industry education integration and school enterprise cooperation.Internal Training External Dispatch External Hiring Benchmarking Through innovating the work mode of industry education integration
Training Training Learning promoting deep cooperation between industry academia research and
application jointly building industry education integration internship bases
KELUN PHARMA Corporate Culture Training establishing a skilled talent training system and promoting the construction of
a "dual teacher" teacher team it has played an important role in the reform of
vocational colleges and higher education and has produced a demonstration
E-learning Online Platform Empowering Training System effect in improving the quality of technical and skilled talent training.In implementing the educational philosophy of lifelong learning KELUN PHARMA has adopted a diversified training The integration of industry and education is an upgraded version of traditional
strategy that combines both online and offline and both internal and external resources. By deeply integrating the school enterprise cooperation. The Company has formulated a management
application of the E-learning online learning system a flexible and efficient dual line training model has been constructed. system for the integration clarifying guiding principles planning goals key
Since the full launch of the platform in 2017 we have successfully covered online learning and training activities for tasks and guarantee measures. When carrying out the integration of industry
25000+ accounts and achieved digital and refined management. and education we focus on clinical needs and common technical challenges in
the industry. Projects serve as the link allowing us to closely combine industry
As of the end of the reporting period we have carefully planned and delivered over 5824 online training programs university and research. We collaborate with universities and research
annually accumulating a wealth of educational resources. We have developed 25807 internal online courses that cover institutions to achieve joint development and shared benefits. Through this
various fields including pre-job training management regulations safety and environmental protection corporate collaboration we drive breakthroughs in key core technologies and tackle
culture reference learning professional technical knowledge job skills employee counseling new employee onboarding challenging problems. As of the end of the reporting period the Company
and product knowledge. During the reporting period the activity level of our ELN platform reached a new high with has established strategic cooperative relationships for talent training with 113
1.9645 million logins and a total online duration of 867300 hours. These figures demonstrate the strong desire for self- universities and colleges including 55 undergraduate universities 52 colleges
improvement among our employees and their high recognition of the platform's resources. and 6 vocational schools.
9394
E-learning Online Learning Platform
Window of KELUN PHARMAPeople-oriented and Shared Growth
KELUN PHARMA's headquarters have collaborated with educational institutions on joint training KELUN PHARMA's bases have collaborated with educational institutions on joint training projects
projects
Xindu Base has deepened collaboration with Chengdu Medical College participating in the development
of teaching cases for graduate students. They are also advancing university-enterprise innovation
projects exploring solutions based on the college's professional advantages to promote industry-
university-research integration. All projects are steadily progressing.We have collaborated We have partnered with We collaborate with China The KELUN Postdoctoral Qionglai Branch has partnered with Chengdu University with General Manager Cui Dexiu serving as an
with Sichuan University Chengdu University Pharmaceutical University Research Workstation off-campus mentor. They are jointly training 4 master's students and participating in the compilation of
to establish the for the "Integration of for the "Return from Hundred has established a joint the textbook Pharmaceutics which is used in multiple vocational colleges."West China KELUN Industry and Education Battles for Further Education" training mechanism Some management personnel of Guizhou Kelun have been appointed as off-campus industry mentors in
Class" to train senior in Medicine and Health" training program. This with the Postdoctoral Guizhou Medical University and other universities. They are involved in the compilation of the textbook
pharmaceutical demonstration project. program involves inviting Research Station of Pharmaceutics used in Guizhou Healthcare Vocational University Guangxi Vocational University of
marketing and By sharing resources professors and leaders Sichuan University. Agriculture and other vocational colleges.management and complementing from China Pharmaceutical We have attracted 11 Hubei Kelun has enhanced cooperation with Wuhan University of Science and Technology. They
professionals as well as each other's strengths University to provide regular postdoctoral fellows to exchange technical knowledge establish expert workstations and invite university mentors to provide
engineers. There have we aim to cultivate training for executives the station with 7 of guidance. In June 2024 they made a donation of the "Baopuzhong" scholarship and assistance fund.been 8 sessions with a pharmaceutical talents in the Group on policy them completing their Graduate students participated in the transformation of the production line fostering a virtuous cycle of
total of 192 participants. that meet industry interpretation investment tenure (6 of whom have industry university and research.We also conduct joint needs and promote the analysis and pharmaceutical been retained). During Kunming Nanjiang has successfully completed the evaluation of the new apprentice dual training
training programs for industrial application of market-related management. their tenure they have program in collaboration with Kunming Chemical Vocational and Technical School. They have also
postgraduate students research achievements. The goal is to cultivate highly led over 30 high-tech jointly conducted the certification of pharmaceutical formulation technical skill levels. As a result 96
with the third session specialized talent broaden drug research projects employees have achieved intermediate-level certification and 94 employees have achieved advanced-
currently in progress. the talent cooperation creating a beneficial level certification. This has contributed to an increase in the proportion of skilled frontline personnel. In
interface and deepen the cycle of talent and 2024 the Company underwent a review and confirmation of the new apprentice training program by the
integration of industry and output. government authorities.education. CHUANNING BIOTECH adheres to an innovation-driven philosophy and engages in academic exchanges
and technological collaborations with renowned institutions such as Tsinghua University and Harbin
Institute of Technology. They have applied for 8 invention patents and published 7 academic papers. By
deepening the integration of industry university and research they are driving advancements in the
industry's technology.West China KELUN Class Event Site
Launch Event of "KELUN Class" Joint Innovation Project Between Xindu Base and Chengdu
Medical College
Postdoctoral Defense Site New Apprentice Dual Training Between Kunming Nanjiang and Kunming Chemical Vocational and Technical School
95 96People-oriented and Shared Growth
New Employee Training The Quality Department of Xindu Base Innovates the "Master-Apprentice" Training Model to
Facilitate Rapid Growth and Skills Inheritance of New Employees
In order to ensure that new employees can quickly adapt to the environment and efficiently fulfill their job responsibilities
KELUN PHARMA implements a comprehensive coverage policy in new employee training requiring a 100% participation To comprehensively improve the job competence and professional skills of new
rate in new employee training to help them deeply understand the Company's development history core values and employees the Quality Department of Xindu Base of KELUN PHARMA has innovatively
management policies and behavioral requirements that need to be followed in daily operations. launched a one-on-one apprenticeship program. Through a deep binding mechanism
that involves the mentor's whole process guidance and shared responsibilities this
program achieves rapid development of new employees and efficient transfer of team
experience. The program focuses on core positions in quality analysis technology
selecting senior employees with over 5 years of experience solid technical skills and
excellent communication abilities as mentors. Pairings are based on job compatibility
and complementary personalities. Mentors are required to develop customized training
plans for a period of 1-3 months. They use a three-dimensional coaching method of
"theory explanation + hands-on training + case review" to systematically teach quality
inspection methods application of inspection tools and disposal of typical issues. They
Company New Employee also keep daily teaching logs and provide weekly feedback and growth assessments.History Product Training Module Knowledge To strengthen process management the department establishes a "Dual Assessment
for Mentor-Apprentice" mechanism directly linking the skill attainment rate of new
employees and the completion rate of independent tasks to the performance evaluation
of mentors. Since its implementation the average training period for new employees has
been reduced by 40% and the pass rate for key equipment operation certification has
Work reached 100%. This has truly achieved a virtuous cycle of "experienced mentors guiding
Corporate Knowledge new employees while new employees promoting the improvement of experienced
Culture employees".Daily Management
System Job-specific Development Training
We firmly believe that implementing job specific training can not only improve individual employee skills and work
efficiency but also ensure that the Company maintains a competitive advantage in the rapidly changing market
Additionally the Company has launched the "Program of Excellence" specifically targeting fresh graduates with the environment.aim of building a "Kelun New Army" with ideals and courage to strive and reserving talents for Kelun's third decade of
development. With the talent cultivation model of "five stages + three mentors" the employees from school recrements We have designed rich and targeted training courses based on the specific
to successfully go through the rapid transformation from school to the workplace. This ensures that they quickly integrate requirements and future development needs of each position:
into the Company's culture and unleash their potential.In the field of We have carefully organized business reception etiquette training courses to enhance the professional
professional
development of image and service ability of employees in external communication and demonstrate the value
Onboarding Workshop Line Intensive employees connotation of the Kelun brand. 5 Training Practice Training On-job Learning Debriefing
The KELUN quality training system includes knowledge lectures and the Drug Vigilance Training Center
for quality management personnel. It continuously improves the quality theory and practical skills of
Unified
1.On-site Upon completion In the field of each production base by establishing online and offline quality knowledge databases. Through the accommodations
teaching 1. 3-day military 1. Rotational of the first 4 quality control "Knowledge Lecture Hall" online platform experience-based knowledge is extracted resulting in the and meals in training learning
2. E-Learning the workshop stages a formal launch of 22 professional themes such as statistical application data governance and technology
online learning centralized 2. 2-day 2. Position- job performance transfer. The total number of learners exceeds 200000.and exams learning and outreach based learning evaluation will be
training conducted In the field of We have launched an international high potential talent special training camp project aiming to select
production and cultivate senior talents with a global perspective and professional skills and help Kelun achieve
management modernization and internationalization in production and manufacturing.
3 Sectoral Mentor Post Mentor Mentor Department of Human Resources We have implemented comprehensive leadership and business training programs that cover all levels In the field of of management. These programs aim to enhance strategic thinking abilities decision-making skills and
marketing teamwork and communication skills by focusing on innovative business model thinking and interpretation
6 of industry regulations and policies.6-month incubation period
In the field of
corporate culture We also spare no effort in promoting corporate culture construction and training. Through systematic "Program of Excellence" Training Program (536 Training Principles) construction and educational and training activities we deeply imprint Kelun's corporate values and social responsibility in
training every employee's mind jointly shaping a team that combines professional skills and noble character.
97 98People-oriented and Shared Growth
Management and Leadership Development Training
Based on the principles of ''strategic guidance'' ''hierarchical training'' and "consistent learning and application" the
Company implements a comprehensive leadership development training program following the compounding mindset
model. Our management and leadership development training covers employees at all levels including grassroots
staff junior management middle management and senior management. This ensures that every employee has the
opportunity to receive management and leadership development opportunities that match their career stage.For our management trainees recruited from campus we focus on developing their execution
skills team cohesion and critical thinking capabilities. We conduct regular talent program boot
camps as part of our efforts to nurture and reserve new talents for Kelun's next decade.New employee
orientation training
To enhance the management skills and mentoring abilities of grassroots managers in our
At the same time through a combination of online and offline teaching modes together with various teaching methods industry we have implemented a comprehensive team leader training program for the
such as theoretical teaching practical exercises simulation operations and mentor guidance we ensure that employees Group. This program aims to continuously improve the managerial proficiency and mentoring
can fully grasp and proficiently apply them to practical work continuously broaden their horizons and enhance industry capabilities of the team leaders in the production process.competitiveness. By regularly evaluating the effectiveness of training and making dynamic adjustments we continuously Junior management For grassroots marketing managers we have implemented various training programs focusing
optimize the job specific training system ensuring that it always aligns with the Company's strategic goals and industrial training on product knowledge management skills and team leadership.development trends thereby effectively driving the common growth of the enterprise and employees and laying a solid
talent foundation for achieving sustainable and excellent performance. For middle and senior management personnel in the quality field we have implemented a
quality module leader management system and developed a targeted training program that
Promotion and Job Transfer Mechanism focuses on both quality technical skills and management capabilities.For middle and senior management personnel in marketing we have initiated the "Return
from Hundred Battles for Further Education" program. This program regularly invites
The annual promotion mechanism is a regular channel provided by the Company each year to recognize and incentivize Middle and senior professors and industry leaders from China Pharmaceutical University to provide training on
the career development of outstanding employees. It is carefully planned and arranged by the headquarters' Human management training policy interpretation investment analysis and pharmaceutical market-related topics for our
Resources Department in accordance with annual regulations following strict evaluation procedures to ensure orderly executives.promotions of employees to higher levels. At the same time we also take into account the need for new positions
or vacancies in existing positions ensuring that employees who meet the criteria and are capable of performing the For senior management executives we offer various training programs including International
corresponding duties have a fair and equal opportunity to be promoted through the vacancy promotion process at Pharmaceutical Engineering Management (IPEM) education course and the Finance EMBA
any time during the year. This ensures optimal allocation of human resources constantly improving overall Company at the Tsinghua University Wudaokou School of Finance. These programs cover not only
efficiency. management theory business model innovation and interpretation of industry regulations
and policies but also focus on decision-making in complex business environments social
To clarify employees' career development paths and unleash employees' potential the Company is exploring new models Senior management responsibility practices and the design and execution of environmentally-friendly strategies.for multi-channel career development. In addition to the traditional hierarchical promotion channels we have established training
multiple career development paths such as management professional technical operational and support sequences. For management executives in the Group we implement learning activities that revolve
Employees can make lateral transitions based on the Company's needs and personal abilities. around meetings rather than traditional training with a focus on the study of corporate
management.Succession Planning and Leadership Development In addition we emphasize the long-term effectiveness of leadership training. Through regular evaluation of training
outcomes tracking the growth trajectory of participants and providing opportunities for continuous learning and
development we ensure that the results of training programs can be translated into enhanced leadership skills and
The Company places great emphasis on leadership training aimed at nurturing leaders with vision a sense of social effective execution of the Company's strategies in practical work settings.responsibility and environmental responsibility. We implement a comprehensive leadership training program as part of
our succession planning initiative which encompasses management personnel at all levels. The program aims to enhance
their strategic thinking abilities decision-making skills and team collaboration and communication techniques. During the reporting period the total duration of management and leadership development training provided
by the Company was approximately 136248 hours with the participation of 4866
Succession Planning
employees. Among the employees who participated in the Company's management and leadership development
We adhere to the principle of "internal training as main focus and external introduction as supplement" and has
developed the "Long Bench Succession Program" to prepare excellent successors for department heads within the training 113 employees were promoted (accounting for 2.32% of the total workforce) with a
Company. This program selects trains and reserves department heads and above implementing dynamic management
and evaluation processes. It provides resources for team and project management to help successors grow rapidly. successful succession rate for managerial positions of 19.47%.
99 100People-oriented and Shared Growth
Support for Professional Titles and Qualifications
Junior Management Training
We support all employees (including full-time part-time contractors and temporary workers) to apply for professional
In 2024 the Company conducted a Group's Team Leader Training program for junior management aiming to and technical titles or professional qualifications related to their positions in their spare time. In order to create a learning
cultivate a team of outstanding team leaders with strong professional competence high efficiency and exemplary oriented enterprise improve the professional technical/skill level and structure of the employee team and enhance
leadership qualities. This initiative aimed to support the Company in achieving effective growth. A total of 2026 the professional quality and business level of important positions we have formulated the Regulations on Encouraging
employees from 20 production bases within the Group participated in this training. From developing personalized Employees in Important Professional Positions to Participate in Professional Title Evaluations and Vocational Qualification
training programs and launching the program to implementing the training conducting mid-term reviews and Examinations. During the annual title examination period the Company collects and organizes information about title
summarizing the outcomes each production base successfully completed the training project in strict accordance examinations and professional qualification evaluations conducted by various provincial and municipal governments. This
with the requirements of the Human Resources Department at the headquarters. information is communicated to all employees and active assistance is provided for employees who express interest and
meet the evaluation requirements in their application process.During the reporting period the This includes and
Company supported 224 42
796 241 employees employees 289 employees in applying for applying for employees intermediate- senior-level employees
applying for title certifications applying for applying for
Group's Team Leader Training Program level titles titlesand professional qualifications junior-level titles professional
qualifications
All subsidiaries (branches) within the Group provide The Company has granted a total of
Education and Professional Qualification Support subsidies for employees who obtain corresponding titles
or qualifications after joining the Company and meeting
The Company encourages employees to continuously pursue further education and supports all employees (including full- RMB 1.32 million in subsidies for title the requirements. The highest subsidy reaches
time part-time contract and temporary workers) in upgrading their educational qualifications applying for professional certifications or professional qualifications to
titles and qualifications and applying for government talent awards. The Company provides comprehensive measures to 654 employees
empower employees in their development. RMB 1000/month
Education Upgrade Support In addition the Company responded actively to the title management arrangements made by the Sichuan Provincial
Party Committee and Provincial Government. In 2024 in conjunction with talent development and industry needs the
The Company supports all employees (including full-time part-time contract and temporary workers) in utilizing their Company initiated an independent review project for senior-level title certifications in pharmaceutical engineering
spare time to improve their educational qualifications. This helps enhance the overall quality and professional technical supporting employees in their professional qualification advancements. The project has entered the preparatory stage
level of the workforce ensuring a sustained competitive edge in talent and meeting the rapid development needs of the under the guidance of the competent department contributing to the professional development of the talent pool.Company.Supporting to Apply for Government Talent Awards
In order to provide sustained talent support for the Company under the guidance of provincial and municipal
During the reporting period including 126 and and governments' strategies for prioritizing talent development the headquarters and subsidiaries (branches) actively support we have supported the applications for various government talent awards by outstanding talents who meet the application criteria within
181 52 who have who have been 2 who have 1 who have the Company. This support includes providing material incentives and recognition in order to encourage and recognize employees in promoted to excellent professionals and managerial talents creating favorable conditions for talents to wholeheartedly pursue been promoted to bachelor's been promoted been upgraded to business and technical expertise. It also helps foster an environment that values talent recognition talent retention and
upgrading their academic associate degrees degrees to master's doctoral degree talent utilization.qualifications degree
During the reporting period all subsidiaries the Company has granted a total of RMB During the reporting period the Company and successfully obtained talent award funding amounting to
(branches) under the Group provided subsidies 2.33 applied for talent awards for for eligible employees according to the million in educational subsidies to
established criteria. The highest subsidy reached
942 regular employees 685 RMB 19.8887 million eligible employees
RMB 300/month
101 102People-oriented and Shared Growth
Occupational Health and Safety EHS Management Committee
In oder to effectively prevent the occurrence of occupation related diseases and injuries optimize the working
Occupational health and safety management system environment and conditions and effectively ensure the physical and mental health safety and well-being of employees
we have officially established the EHS Management Committee with senior leaders of the Company as the directors and
We are deeply rooted in the core belief of "all accidents can be prevented relevant department heads as members. In accordance with the authoritative standards of national safety production
through measures" in occupational health and safety management firmly standardization process safety management and environmental health and safety management the Company jointly
adhering to the strict requirements of national laws and regulations such as formulates and supervises the implementation of various policies and measures for occupational health and safety.the Safety production Law and Occupational Disease Prevention and Control
Law. Based on this we also actively adopts the occupational health and During the reporting period
safety management standard - ISO45001 Occupational Health and Safety General Manager DepartmentKELUN PHARMA invested
Management System and constructs a comprehensive EHS (Environmental
Health and Safety) integrated management system including but not
limited to core procedure documents such as the All Staff Safety Production RMB 28.8624 EHS Management Committee
Responsibility System Safety Hazard Investigation and Governance System million in occupational health
Emergency Plan Management System Occupational Health Monitoring and safety management.Management System as well as series of process specifications for risk The number of subsidiaries
assessment accident prevention emergency response education and (branches) that have obtained
training and awareness enhancement such as the Monthly Safety Production ISO 45001 certification for Each subsidiary
Management Report and Accident Internal Investigation and Handling Report. occupational health and safety EHS Supervision Production Engineering
(branch)
management has reached Department HR Department Technology & Equipment
During the reporting period the Company continuously improved its Department Department EHS Department of each subsidiary
occupational health and safety management system. It revised the Employee (branch)
EHS Manual Dust Explosion Safety Management System and Process Safety 15
Information Management System (Template). It also added new procedural EHS Management Structure
documents such as the Internal EHS Audit System (Trial) Guidelines for
Occupational Disease Hazard Notification Management and Environmental Occupational Health and Safety Audit
Facility Safety Management System. These measures were implemented to
ensure the safety of employees and compliance with regulations. To comprehensively identify and evaluate EHS risks throughout the production process ensure the efficient operation
and legal compliance of the Company's EHS management system and promote continuous optimization and upgrading
Annual Occupational Health and Safety Target Achievement of environmental and occupational health and safety management in the enterprise we have established a complete and refined audit mechanism including internal and external assessments. During the reporting period the Company
developed and implemented the Internal EHS Audit System (Trial) to further standardize internal occupational health and
● 0 occupational disease cases reported; ● Completion of annual declaration for safety audit procedures and standards.occupational disease hazards.● 100% signing rate for occupational disease hazard
●
notification forms for new employees; 0 major and catastrophic accidents; IN OUT
100% ● ● handling rate for abnormal results in occupational 100% rectification rate for safety hazards.
health examinations;
● 100% written notification rate for occupational health Internal Audit System External Audit System
examination results.● Focus on comprehensive examination of EHS ● Strictly follow a series of standards and guidelines
regulatory risks and accident risks delving into formulated by the International Organization for
the construction and improvement of the EHS Standardization (ISO) and through independent
management system meticulously inspecting and impartial third-party certification audits
the execution status of various procedural showcase the high level and high standards of our
documents and conducting a detailed evaluation EHS management system to the outside world;
of the current situation of EHS management on ● This mechanism not only enhances the credibility
production sites; of the Company's EHS management but also
● Focus on various key processes and explore provides strong guarantees for promoting
potential hazards from multiple perspectives to c o n t i n u o u s i m p r o v e m e n t a l i g n i n g w i t h
ensure the rigor and effectiveness of internal EHS international advanced management models
management. and achieving outstanding improvement in
environmental and occupational health and safety
management.ISO 45001 Occupational Health and Safety Management System Certification (Partial Display)
103 104People-oriented and Shared Growth
Occupational Health Management
To achieve precision management and risk control the Company has established a special working group to
comprehensively identify occupational disease hazards in the production environment work processes and production
processes. At the same time the Company entrusts qualified third-party companies to conduct testing. Based on the
test results job exposure frequency work intensity and relevant national standards such as the Grading of Occupational
Disease Hazardous Operations in the Workplace a scientific grading assessment is conducted. For different risk levels
multidimensional measures such as engineering controls management methods and personal protective equipment
are implemented to effectively control occupational disease risks and ensure the occupational health and safety of
employees.Occupational Health Examination
"Happy Work Healthy Life" Employee Mental Health Fun Day Successfully Held
To strengthen employee care and psychological support on November 25 2024 the "Happy Work Healthy Life"
Employee Mental Health Fun Day part of the 2024 "New Labor" brand service activities in Xindu District Chengdu
City Sichuan Province was organized by the Xindu District General Union. The event took place at KELUN PHARMA's
Xindu Base with nearly 50 employees participating. Led by a team of psychological counseling experts the event
featured five interactive zones including personality analysis stress exploration effective communication stress
reduction and relaxation and psychological health assessment. This helped employees learn self-regulation
techniques alleviate stress improve communication skills and foster a positive work atmosphere. This event
effectively enhanced employees' mental health and strengthened team cohesion.Regular Testing for Occupational Regular Testing for Occupational Disease Hazards in Xindu
Disease Hazards in Guangxi Kelun Base
Occupational Health Examination
The Company strictly adheres to regulatory requirements and organizes pre-employment on-the-job and post-
employment health examinations and other health monitoring for employees to effectively prevent and reduce the risks
of occupational diseases. Furthermore the Company includes the results of occupational hazard factor testing and
occupational health surveillance in occupational health record management. The relevant information is communicated
to employees through written notifications bulletin board announcements and other means to ensure that employees
are fully aware of potential hazards in the work environment and their own health conditions. This enables them to take
appropriate protective measures effectively safeguarding their occupational health. During the reporting period the
Company introduced an EHS management module that integrates electronic records for occupational health surveillance
enhancing the efficiency of record management. In addition the reporting process for individuals with abnormal
examination results was optimized to ensure timely communication of abnormal information to relevant departments
establishing an efficient management system.During the reporting period achieving a The incidence rate of
a total of 100% occupational diseases was 8497 coverage rate employees 0
participated in occupational
health examinations
Employee Mental Health Activity
105 106People-oriented and Shared Growth
Safety Culture Development Safety Training
The Company always prioritizes
The Company attaches great importance to safety culture development and promotes a safety-conscious environment safety production and enhances
through regular training emergency drills and safety awareness campaigns. These activities aim to enhance employees' employees' safety awareness and
safety awareness and skills and foster an atmosphere of safety engagement where everyone is involved. safety management capabilities
through mult i - leve l and mult i -
Safety Awareness Campaigns dimensional training and promotion.Every year the Company organizes
specialized safety training conducted
In response to the National Health Commission's publicity week for the Law of the People's Republic of China on the by EHS personnel. It also requires
Prevention and Control of Occupational Diseases the Company further strengthens its responsibilities in the prevention EHS personnel at each subsidiary
and control of occupational diseases and promotes knowledge about occupational disease prevention and control. (branch) to provide comprehensive
During the reporting period each subsidiary (branch) focused on the theme of "putting prevention first and safeguarding training for all employees ensuring
occupational health". Through organizing training courses posting promotional materials and playing informational the dissemination of safety concepts
videos various forms were used to widely promote the Law on Prevention and Control of Occupational Diseases to General Manager of Xindu Base Sharing Safety Knowledge at all levels and covering all staff
employees. This effectively enhanced employees' awareness of occupational disease prevention and their ability to (management cadres within the Group sharing special safety work)members thus strengthening the line
protect themselves. of defense for safety production.As of the end of the reporting period During the reporting period there were The investment in employee The investment in employee
KELUN PHARMA has a total of Among them and 851 work-related injury insurance safety production liability safety drills conducted amounted to insurance amounted to 9 subsidiaries (branches) that have been 5 are at the provincial level 4 are at the municipal level including fire drills and toxic gas leakage
recognized as Health Enterprises drills RMB 8.3061 million RMB 309200
The coverage rate of The coverage rate of employee The number of The rate of lost work
employee work-related safety production liability work-related time per one million
injury insurance was insurance was also deaths was work hours was
100%100%00.28
Guizhou Kelun was Invited to Attend the Launch Guizhou Kelun Awarded the Provincial-
Ceremony of the Promotion Week of Law on Prevention level Health Enterprise Title in Guizhou
and Control of Occupational Diseases in Guizhou Province
Province
107 108Persist in Green Development Advocate Low Carbon
05
Persist in Green
Development
Advocate Low
Carbon
KELUN PHARMA adheres to the principle of "giving priority
to environmental protection and sustainable development"
and continuously improves its environmental management
system. Through enhancing energy efficiency utilization
and implementing water and electricity conservation
measures the Company achieves efficient resource
management. It strictly complies with environmental
regulations utilizes advanced pollution control technologies
to reduce waste and enhances disposal efficiency to
ensure compliance with emission standards. In the face
of climate change risks the Company strengthens its
response strategies scientifically measures and manages
carbon emissions and promotes low-carbon operations.We advocate integrating the concept of green ecology into
the entire production process taking practical actions to
promote harmonious coexistence between industry and
nature and writing a new chapter of green development.
109 110Persist in Green Development Advocate Low Carbon
Environmental Management Environmental Management Objectives
To further strengthen the management of toxic emissions and waste and to continuously improve resource efficiency
Environmental Management System the Company collects calculates and analyzes historical emissions data. Based on this scientifically formulated
environmental management objectives are implemented and regularly reviewed to monitor progress and assess the
The Company strictly adheres to the laws and regulations of the People's Republic of China such as the Environmental achievement of environmental management goals. Improvement action recommendations are also proposed as needed.Protection Law of the People's Republic of China the Law of the People's Republic of China on the Prevention and Control
of Atmospheric Pollution the Water Pollution Prevention and Control Law of the People's Republic of China and the KELUN PHARMA's 2024 Environmental Management Objectives and Achievement Status
Law of the People's Republic of China on the Prevention and Control of Environment Pollution Caused by Solid Wastes.During the reporting period a comprehensive Environmental Occupational Health and Safety Management Policy
Category Item Indicator 2030 Final Goal
was released covering all key areas of environmental management within the Group. Internal management systems
including the Environmental Incident Investigation and Accountability Management System (Trial) and the Enterprise-wide Wastewater discharged per A decrease by 5%
Environmental Management Guidelines were updated to further standardize environmental management processes Wastewater Wastewater discharged output of RMB 10000 compared to 2024
and continuously enhance environmental management levels. In order to enhance environmental awareness among
all employees the Company revised the KELUN PHARMA Employee EHS Manual (2024 Version) to emphasize internal Waste gases Nitrogen oxide emissions Nitrogen oxide emissions per A decrease by 3%
environmental management objectives principles policies and code of conduct. output of RMB 10000 compared to 2024
Furthermore based on operational requirements and environmental regulations in the pharmaceutical industry the Hazardous waste resource Hazardous waste Hazardous waste resource utilization per output of RMB An increase by 5%
Company and its subsidiaries (branches) have developed a series of improved management practices in key areas of utilization 10000 compared to 2024
environmental management. They rigorously follow the annual environmental key performance objectives and carry out
various work activities accordingly. Environmental Management Structure
Critical Areas Internal System Checklist (Example) The ESG Committee of the Company serves as the highest executive body for environmental protection carbon emissions
management resource utilization and climate change response. The Board of Directors oversees the progress of related
Measures for Energy Saving Consumption Reduction and Emission Reduction in
Wastewater Wastewater Treatment Systems (Trial) Regulations for Wastewater Treatment System work. To ensure the effective operation of the Group's environmental management system and achieve environmental
management Management Wastewater Management Manual and Management System for Wastewater management objectives the Company has established an environmental management structure from top to bottom.Treatment Plants Environmental management tasks are systematically defined and responsibilities for environmental management are
implemented to provide strong support for the continuous advancement of the Group's environmental management.Exhaust emission Regulations for Air Emission Control Systems Additionally the Company links the compensation of the management team to environmental performance through
Solid waste the EHS Management Committee. By establishing key performance indexes and implementing an incentive mechanism
management Regulations for Solid Waste Management environmental compliance and sustainable management are effectively promoted.Noise management Environmental Noise Management Measures Noise Emission Control System
Board of It is the highest executive body responsible for environmental issue management. It is
Soil Hazard Investigation System Interim Measures for Soil and Groundwater Pollution Directors ESG responsible for formulating environmental strategies reviewing environmental management Soil protection Prevention and Control Committee policies and reporting on relevant matters to the Board of Directors.During the reporting period KELUN PHARMA did not have any violations of environmental laws and regulations nor did It is chaired by senior leaders of the Group serving as director and deputy director with
it receive any administrative penalties from the Ministry of Ecological Environment or other relevant departments due to EHS Management department heads and general managers of the subsidiaries and branches as members. They
environmental incidents. The discharge of exhaust gases and wastewater met the required standards after treatment or Committee jointly develop and supervise the implementation of development plans policies and measures
reuse and the disposal or recycling of waste was carried out in compliance with regulations. related to environmental occupational health and safety.KELUN PHARMA's Environmental Protection Expenses in 2024
The EHS Management Committee establishes an office within the EHS Supervision Department responsible
for organizing meetings of the EHS Management Committee. It executes tasks assigned by the committee
Expense investment category Investment amount (RMB 10000) and handles daily work while also implementing group-wide EHS tasks and coordinating and overseeing
EHS-related work in subsidiaries (branches).Total investment in environmental protection 66139.57
It reports annually to the Company's EHS Management Committee on the environmental
Investment in environmental equipment construction
and operation maintenance 61095.78 management work of each subsidiary (branch). The report includes information on pollution
EHS control achievement of environmental performance indexes and environmental management
Investment in environmental protection project Supervision 5034.78 results such as the current status of internal management categories in need of improvement management Department and future work to be conducted. Additionally the EHS Supervision Department is responsible
for preparing the environmental section of the Company's annual report and ESG report. These
Investment in environmental protection training 9.01 reports are then submitted to the ESG Committee for approval.
111 112Persist in Green Development Advocate Low Carbon
Environmental Impact Audit Supplier EHS audit management and execution requirements
To verify the effectiveness of the Group's environmental management system and ensure that all production and Basic principle EHS audits should be incorporated into the supplier audit plan.operation sites within the Group implement a unified environmental management system to enhance the overall level of
environmental management. The Company conducts regular internal audits and external audits for all production and Consistent with the requirements for supplier audits. Please refer to the relevant content
operation sites within the Group to ensure the implementation of the Group's environmental management policies and Audit scope and in this report under "03 Building a Sustainable Supply Chain - Supplier Audits" for specific
the achievement of management objectives. frequency details.Internal Audit The audit mainly includes implementation of administrative licensing and environmental
management systems compliance with emission standards of pollutants (including
The Company has developed an internal audit system for EHS and established a relatively comprehensive environmental harmful emissions such as exhaust gases wastewater and hazardous waste)
assessment system which includes performance indicators for subsidiary production companies. The Company follows Audit content compliance with the collection and disposal of solid waste safety progress emergency
a hierarchical control principle and conducts regular environmental management compliance audits for all production management and drills education and training and hidden danger inspection.and operation sites within the Group. The audit covers areas such as construction project environmental "three
simultaneities" including pollution discharge permit management compliance with pollutant emission standards full-
Remote or on-site audits are conducted. After the audit a Supplier EHS Audit Report is
process management of hazardous and non-hazardous waste construction and operation of environmental protection Audit method
prepared and submitted to the Group's Supply Department for unified review resulting in
facilities and operation. For issues identified during the audit the Company proposes corresponding corrective measures and process
the final audit report.and deadlines based on their severity and continues to monitor the progress of improvement by each enterprise. The
frequency of internal audits is as follows:
The audit results are divided into four levels based on EHS deficiencies: Danger Vigilance
Attention and safety. For suppliers categorized as Danger it indicates that there are
Audit results extremely serious EHS risks. There is a high probability that the supply of their products
cannot be continued or stably provided due to EHS issues. Heightened vigilance is
required during the cooperation period and consideration should be given to excluding
them from future collaborations until the risk is reduced to "Vigilance" or below.Encourage suppliers to obtain ISO system certification and apply for green factory
For major core production Production companies Production companies hold Green supply chain certification to enhance their EHS performance;Prioritize environmentally friendly
companies at least 1 submit daily environmental at least 1 Company-level EHS program products and services when selecting suppliers; Given equal conditions give preference
comprehensive on-site EHS audit management materials on meeting each month to learn to suppliers with higher EHS audit scores.is conducted each year. For other a monthly basis which are about new EHS laws and
production companies at least 1 then reviewed online; regulations. Training is conducted
comprehensive on-site EHS audit is on key laws and regulations and Environment Management System Certification
conducted every two years; the implementation of relevant
requirements is tracked. While steadily advancing the construction of the environmental management system the Company actively conducts
third-party certification work and fully supports the ISO 14001 management system certification for subsidiaries
External Audit (branches). This systematic approach enhances the Group's environmental management standards As of the end of the
reporting period 16 of the Company's production enterprises had obtained ISO 14001 environmental management system
All subsidiaries (branches) which have been certified under the ISO 14001 environmental management system and within certification and 2 are currently in the process of certification. The proportion of production enterprises that have passed
the validity period hire independent third-party certification bodies to conduct a system supervision audit annually certification and are in the process of certification among all production enterprises of the Company is 56.25%.and undergo a recertification audit every three years. The audits cover various aspects including the design research
and development production and related environmental management activities of the Company's products and the
associated facilities.Subsidiaries (branches) and production bases involved in international business regularly undergo international external
audits from partners. Furthermore we continuously compare against international high standards conduct inspections
and make improvements to ensure that all business operations fully comply with international norms and requirements.Supplier Environmental Impact Audit
To further enhance the assessment of EHS risks associated with suppliers and identify any existing EHS risks in a timely
manner the Company has established a Supplier EHS Risk Assessment System. EHS management is incorporated into
supplier audits and the results of EHS audits are included in the overall audit and evaluation of suppliers thereby
exerting substantive constraints on the EHS performance of suppliers. Furthermore we impose requirements for green
and sustainable development on suppliers who are willing to engage in long-term partnerships. The green and low-carbon
performance of suppliers is effectively included as one of the comprehensive evaluation factors in market procurement. ISO 14001 Environmental Management System Certification Certificate of KELUN PHARMA and its Subsidiaries
(Branches)
113 114Persist in Green Development Advocate Low Carbon
Management of Environmental Risk Factors Emergency Management for Environmental Incidents
To further strengthen environmental risk control the Company has developed the Environmental Hazard Factor
Identification and Control System Environmental Factor Identification Evaluation Form and List of Important The Company strictly adheres to the relevant regulations such as the Emergency Management of Environmental
Environmental Factors. By regularly identifying and reviewing environmental risk factors and assessing their level of Emergencies and the Regulations on the Safety Management of Hazardous Chemicals and has formulated a series of
risk impact a list of important environmental factors is created. Targeted risk control measures are then formulated to environmental safety management systems including the Emergency Plan for Environmental Incidents Management
enhance the Company's capability for emergency response to environmental incidents and continuously strengthen System for Environmental Incident Investigation and Accountability and Dangerous Goods Management System. To
environmental risk management. effectively prevent and handle environmental incidents we regularly conduct environmental risk assessments identify
and rectify potential environmental risks and hazards. Additionally we continuously improve our measures for preventing
and controlling environmental incidents and dynamically adjust our plans based on actual situations.Identification of Assessment of Update and Control of
Environmental Environmental Reassessment of Environmental During the reporting period the various subsidiaries (branches) of the Group actively conducted emergency training
Factors Factors Environmental Factors Factors and drills covering multiple environmental risk scenarios including sewage accidents hazardous waste leakage and
flood prevention at sewage stations. Through these emergency drills the Company effectively enhanced employees'
emergency response capabilities and coordination skills in dealing with environmental incidents thus strengthening the
Water Discharge Air True-false Judgment Principles of Updating Control Methods overall level of environmental risk prevention and control.Emissions Solid Waste Method Scoring and Reassessment for Important
Soil Pollution Noise Method Environmental Factors
Pollution Energy and Control Methods for
Resource Consumption General Environmental
Others Factors
Process for Environmental Risk Factor Management of KELUN PHARMA
Specific Risk Control Measures
Each subsidiary (branch) shall conduct regular environmental monitoring in Emergency Drill for Environmental Pollution Emergency Drill for Flood Prevention at the Sewage Incidents at Xindu Base Station of Hunan Kelun Yueyang Branch
accordance with the relevant requirements of the Environmental Impact Assessment
Report Technical Guidelines for Self-monitoring for Pollutant Discharge Units and
Regularly conduct
environmental monitoring the industry's self-monitoring guidelines taking into account their own actual Honors and Qualifications
conditions. This will effectively monitor the emission of pollutants and disclose the
results of environmental monitoring as required subject to review by regulatory The Company places high importance on green development and encourages its subsidiary production-based enterprises
authorities and public supervision. to boldly innovate and break through in environmental protection technologies. They actively participate in activities
Each subsidiary (branch) shall develop an Emergency Plan for Environmental such as clean production audits and green factory assessments and have received multiple honorary titles. During the
Incidents based on the actual environmental risks of the Company. They shall reporting period among all the production-based enterprises within the Group 13 companies passed the clean production
establish an environmental emergency management system improve the audit 7 companies obtained national-level green factory certification 3 companies obtained provincial-level green
emergency response plan system conduct regular drills and maintain good factory certification 1 Company obtained provincial-level green supply chain certification 1 Company received provincial-Strengthen emergency
management capabilities communication with local governments and relevant stakeholders. This includes level environmental-friendly enterprise recognition 1 Company obtained provincial-level beautiful factory certification 8
establishing a mechanism for early warning receiving alarms rescue and recovery companies received provincial-level environmental integrity enterprise titles 2 companies obtained municipal-level zero-
thereby enhancing the emergency response and rescue capabilities for various waste factory certification and 1 Company was recognized as a climate-friendly enterprise of Tianfu.types of incidents and major accidents.Increase investment in Each subsidiary (branch) shall allocate funds for environmental protection in
environmental protection accordance with relevant regulations and actual needs and fully guarantee them in
and application of new the annual cost budget.technologies
Encourage each subsidiary (branch) to actively engage in extensive environmental
management exchange activities learn from the environmental management
and technical experiences of advanced entities and accelerate the introduction
Promote environmental absorption and independent innovation of advanced environmental protection and
management exchange management technologies. Encourage and guide employees to actively participate
activities in activities where they can provide rational suggestions for environmental
management. Awards and Honors for Environmental Protection in Subsidiaries of KELUN PHARMA (Example)
115 116Persist in Green Development Advocate Low Carbon
Environmental Training and Education Activities Toxic Emissions and Waste
The Company develops an EHS (Environmental Health and Safety) training plan at the beginning of each year to Exhaust gas treatment
provide relevant training for environmental protection directors and EHS personnel in each subsidiary (branch). The The Company strictly complies with the Law of the People's Republic of China on the Prevention and Control of
Company establishes EHS education and training records. Training topics include 2024 Carbon Inventory Training Green Atmospheric Pollution. For the toxic emissions generated during the production process the Company has developed
Transformation Path Training Key Points in Environmental Daily Management Work Comprehensive Training on Basic the Regulations for Air Emission Control Systems and Guidelines for Developing Volatile Organic Compound (VOCs)
Knowledge Construction Acceptance and Operation Management of Wastewater Treatment and more. Management Ledgers. These regulations comprehensively guide the Company's waste gas treatment during the
production process. Technologies such as cryogenic recovery activated carbon adsorption molecular sieve adsorption
In addition each subsidiary (branch) continues to promote a green culture through various means such as actively
concentration and high-temperature oxidation combustion are utilized to achieve standard emissions of process waste
organizing environmental-themed promotional events environmental campaigns in schools playing environmental
gases and reduce the discharge of uncontrolled waste gases.videos creating environmental awareness posters and display boards. This aims to encourage employees to adopt the
concept of green production and green living promote transparency of environmental information and encourage public To reduce pollutant emissions during the production process KELUN PHARMA conducts annual waste gas treatment
participation in ecological environmental protection. projects within the Group. These include upgrading and transforming waste gas treatment processes replacing advanced
treatment equipment conducting comprehensive VOCs governance centralized collection and treatment of uncontrolled
waste gases and improving production processes. These measures aim to continuously reduce the emissions of carbon
dioxide nitrogen oxides particulate matter VOCs and other waste gases. Additionally the Company continuously
monitors the operation and effectiveness of the treatment projects to ensure effective emission reduction and treatment
measures are implemented.Key Waste Gas Treatment Projects of KELUN PHARMA in 2024
Company
Name Project Type Project Implementation Details and Effects
Technical Kunming Nanjiang regularly cleans the gas boilers replaces filters and adjusts the Kunming and process combustion parameters of the gas boilers according to the actual conditions to achieve Nanjiang improvement optimal combustion efficiency. In 2024 it achieved a 15% reduction in particulate matter
emissions per output of RMB 10000.X indu Base underwent techn ica l upgrades and
optimizations for organized waste gas treatment facilities.Temperature and airspeed sensors were installed in all
Equipment facilities to monitor real-time emissions parameters.Xindu Base upgrade and PLC devices were added to all waste gas treatment and
transformation production equipment to view historical operating records.After the transformation the uncontrolled volatile organic Waste Gas Treatment
compound (VOC) emissions from the entire factory were Equipment at Xindu
virtually reduced to 0. Base Workshop
To effectively manage the dichloromethane waste gas
generated in the workshop Yueyang Branch implemented
6.5 Environment Day Campus Event at CHUANNING BIOTECH process improvements in January 2024. Pre-treatment was
Hunan Kelun Technical adopted to cool the waste gas ensuring optimal adsorption
Yueyang and process efficiency. During the collection phase a mixture of
Branch improvement industrial steam and dichloromethane was condensed and
collected significantly improving the treatment efficiency Dichloromethane Waste
and ensuring the effective management of the waste gas Gas Treatment Facility
and the rational utilization of resources. of Yueyang Branch
Henan Kelun conducted technological transformations for the production line and carried
Equipment out upgrades to the waste gas equipment in the project construction workshop and existing
Henan Kelun upgrade and workshops. The equipment was replaced with catalytic combustion equipment that has
transformation higher treatment efficiency. After the upgrade and transformation the organic waste
treatment efficiency will be improved by approximately 60%.Guangxi Kelun has improved its existing VOCs condensation
and recovery system. Throughout the year a total of 242.29
Guangxi Equipment tons of vehicle equivalents were recovered including 231.28
Kelun upgrade and tons that could be directly reused as ethanol acetone transformation and ethyl acetate. The VOCs emission concentration at VOCs Condensation
Environmental Protection Publicity Video for 6.5
Environmental Training Site at Henan Kelun Environment Day of Yueyang Branch the discharge outlet was reduced by 40% and the VOCs
and Recovery System
emissions were reduced by 90%. of Guangxi Kelun
117 118Persist in Green Development Advocate Low Carbon
Wastewater treatment Key Waste Management Projects of KELUN PHARMA in 2024
The Company strictly adheres to the Water Pollution Prevention and Control Law of the People's Republic of China and Company Name Project Type Project Implementation Details and Effects
has formulated management documents such as the Wastewater Treatment System Management Regulations and
Wastewater Treatment Management Manual as the overall guidelines for wastewater management within the Group. Guang'an Branch has implemented a carbonless process and eliminated
The Company also requires its subsidiary production-based enterprises to develop internal management systems Guang'an Technical the addition of activated charcoal in the preparation process of some
in compliance with regulations taking into account their specific production operations. This is done to ensure that Branch and process products resulting in a year-on-year reduction of approximately 15% in the
wastewater is discharged in compliance with standards and to continuously improve the quality of wastewater effluent improvement production of waste activated carbon.and the proportion of wastewater reuse.Key Wastewater Treatment Projects of KELUN PHARMA in 2024 Qionglai Base intensified source control measures by conducting daily
inspections to remind responsible personnel in relevant areas. This helps
Company Name Project Type Project Implementation Details and Effects
prevent the mixing of valuable waste with general solid waste and
Technical hazardous waste as well as the improper disposal of general solid waste
Qionglai Base and process as hazardous waste. Additionally internal communication was conducted
CHUANNING BIOTECH employs multiple technologies such as "MVR improvement within the production process to raise awareness and fine-grained control
Technical evaporation" and "special membrane + advanced treatment" to treat over CHUANNING measures were implemented in the workshops. These efforts aim to reduce
BIOTECH and process 80% of wastewater for reuse in circulating cooling water water for pre- the waste-to-output ratio identify the major waste stream of organic improvement production processes and water for thermal power boilers. This achieves the solvents and strengthen the recycling of waste solvents.circular utilization of wastewater resources.Shandong Kelun actively pursued source control and promoted carbonless
Qionglai Base strengthens control measures such as wastewater segregation Shandong Technical process improvements. They have completed the carbonless process
and diversion and internal drainage permits. By keeping the inlet valves of the Kelun and process improvement verification for some products. In 2024 the production of activated carbon sewage stations closed and opening them only after passing the inspection decreased by approximately 37% compared to 2023.unauthorized discharge by operators is eliminated. Through production control
Technical high-salt wastewater is reduced ensuring that the water inflow remains within
Qionglai Base and process
improvement the processing capacity. In 2024 the emission of wastewater per output of Noise management
RMB 10000 decreased by 35%. At the same time the sewage stations fully
utilize the homogenization function of the regulating tank. The concentration We have formulated the Environmental Noise Management Measures in accordance with the requirements of the Law of
of pollutants in the discharged wastewater has been significantly improved the People 's Republic of China on the Prevention and Control of Environmental Noise Pollution and other regulations to
with chemical oxygen demand per output of RMB 10000 reduced by 70%. guide the base in equipment selection and installation and noise control during the production process. All our production
enterprises of conduct factory boundary noise testing in accordance with national regulations to ensure that daytime/
JINHE BIOTECH has optimized its processes and carried out technological nighttime noise meets the requirements of the Environmental Noise Emission Standard for Industrial Enterprises at
transformations. It has added a wastewater reuse system in the existing Factory Boundaries.Technical workshop achieving a wastewater reuse rate of over 80% through operations.JINHE BIOTECH and process
improvement The remaining wastewater is directed to soapberry fruit processing and the When purchasing equipment the Company ensures that the equipment meets the functional requirements of normal
collected residues are sold externally ensuring no wastewater discharge production while selecting low-noise equipment whenever possible. Noise reduction measures such as vibration reduction
throughout the year. sound absorption and sound insulation are implemented during equipment installation. Moreover comprehensive
measures are taken including proper layout of noise facilities within the plant area to reduce the impact of noise
generated during production processes.Waste Management and Circular Economy
The Company strictly complies with relevant laws and regulations such as the Law of the People's Republic of China on
the Prevention and Control of Environmental Pollution by Solid Waste. It has formulated regulations such as the Solid
Waste Management Regulations to regulate and require subsidiaries (branches) to control solid waste treatment facilities
and implement full life cycle management of solid waste.To continuously promote the reduction resource utilization and harmlessness of waste generated during production and
operations the Company carries out waste management enhancement projects within the Group. Through effective
measures such as improving production processes optimizing product structures and implementing clean production the
Company ensures the efficient execution of waste reduction efforts.
119 120Persist in Green Development Advocate Low Carbon
Efficient Resource Utilization Water Resource Management
KELUN PHARMA is aware of the significance of water resources protection and takes concrete actions to promote the
Energy management scientific utilization of water resources. We strictly abide by the Water Law of the People's Republic of China and other
relevant laws and regulations and comprehensively implement measures such as water conservation and wastewater
The Company strictly complies with relevant laws and regulations such as the Law of the People's Republic of China reuse across our research and development production and supply chain operations to progressively reduce water
on Conserving Energy and the Renewable Energy Law of the People's Republic of China. It has established internal consumption and maximize the efficient utilization of water resources.management regulations such as the Energy Management Measures and the Energy Conservation and Emission
Reduction Management Trial Measures to clarify the work responsibilities and requirements of energy management Each subsidiary (branch) according to its own production characteristics has established water conservation
departments. Dedicated personnel are appointed to oversee energy conservation and consumption reduction management measures and formed an organization responsible for supervision and implementation of water-saving
management activities to ensure the implementation of resource allocation comprehensive planning execution tracking work. Water resource managers and specialists are appointed to track and report water usage continually strengthening
statistical analysis and other tasks in energy management. This ensures the scientific and rational utilization of energy water resource management efforts. Furthermore the Company's production-based enterprises enhance water resource
resources. management and process innovations. They actively undertake projects such as upgrading water-saving equipment and
recycling wastewater and recycled water to improve water utilization efficiency. Here are some highlighted examples:
Additionally the Company actively promotes energy-saving improvement projects and the development of photovoltaic
power generation projects. It aims to improve the energy consumption structure and continuously increase the proportion
of renewable energy use thereby enhancing energy utilization efficiency. New Kaiyuan: The wastewater from the sand filter cleaning at the pure water station is directed to the
01 cooling water collection pool for use by the vacuum pumps in the workshop thereby improving water
Key Energy Conservation and Consumption Reduction Projects of KELUN PHARMA in 2024 resource utilization efficiency.Company Name Project Type Project Implementation Details and Effects
Kunming Nanjiang: It implements measures for reusing steam condensate water recycling treated
02 wastewater and reusing cooling water. In 2024 the total water consumption decreased by 14% compared
Equipment It implemented an energy management system that records real-time data on water to the previous year.Xinkaiyuan optimization and electricity gas and other energy consumption. The system allows for the comparison and analysis of data within set timeframes providing deviation warnings. This
upgrades system provides data support for energy conservation efforts.It added a first-grade energy-efficient variable-frequency centrifugal chiller unit
completing the energy-saving technological transformation project for the air
Transformation conditioning system's chiller unit; 03
Hunan Kelun: It has added a primary reverse osmosis unit
Shandong Kelun of energy-saving to recycle and reuse the concentrated water increasing the
technology It added two first-grade energy-efficient two-stage screw air compressors water utilization rate to up to 90%.completing the energy-saving technological transformation project for the
compressed air system.It replaced 2 sets of high-water consumption pumps with high-energy efficiency
pumps resulting in a reduction of 28 kW in energy consumption per hour and a 30% Reverse Osmosis Concentrated Water
energy-saving rate; Filtration Unit of Hunan Kelun
Equipment
Hunan Kelun optimization and It replaced 3 sets of high-energy consumption transformers with new high-energy efficiency transformers resulting in reduced electricity consumption;
upgrades
It introduced and implemented domestically-produced thermal compression 04 Jiangxi Kelun: During operation the Company extensively utilizes condensate water and sterilization
distillation water machines which achieve 40-50% energy savings compared to circulating water in its boilers resulting in a significant reduction in wastewater discharge and fresh water
traditional multiple-effect water machines. intake. Compared to previous years the wastewater discharge has decreased by approximately 14491.46
m3 and the fresh water intake has decreased by approximately 8%.Following the energy policy of "Energy Conservation Continuous Improvement"
Transformation
CHUANNING CHUANNING BIOTECH implemented a total of 14 energy-saving measures in various
of energy-saving workshops building upon the energy conservation measures implemented last year.BIOTECH
technology In 2024 the comprehensive energy consumption per unit of product decreased by CHUANNING BIOTECH: It optimized water resource reuse processes in the cephalosporin extraction
4.89% compared to the same period last year. 05 workshop and increased the utilization of recycled water. As of the end of 2024 the wastewater discharge
had been reduced by 158789m3.Yueyang Branch carried out improvements on 13 pulsating sterilization cabinets
Equipment
Hunan Kelun across 7 production lines. This included the addition of pressure reducing valves and
optimization and adjustments to the sterilization balance time. Additionally steam-water separators
Yueyang Branch
upgrades were installed at the end of steam mains in some workshops enhancing quality
assurance capabilities while reducing steam consumption.
06 Qingshan Likang: It has conducted energy-saving transformation projects for boiler blowdown cooling systems saving 6000m3 of water per year. By implementing energy-saving projects for the cooling water
Equipment Guangxi Kelun replaced screw-type chiller units with magnetic levitation ice storage network system in the eye drops production workshop 8016m3 of water can be saved annually; Optimizing
Guangxi Kelun optimization and units resulting in significant energy savings and a substantial improvement in energy the flushing frequency process of the water production system can save 5000m3 of water per year.upgrades utilization efficiency.
121 122Persist in Green Development Advocate Low Carbon
Raw Materials and Packaging Fighting Climate Change
Management
On the path of sustainable development the Company KELUN PHARMA deeply recognizes the profound impacts of climate change both in terms of risks and opportunities on
consistently integrates green concepts into every its business and value chain. The Company integrates the concept of green development into its core business strategy.production process. During the product development The Company is committed not only to promoting the transformation of its production and operations towards clean and
stage priority is given to the selection of non-toxic or low-carbon sources of energy but also to systematically analyzing the risks and opportunities brought about by climate
low-toxic solvents and reagents to minimize potential change. It formulates effective and science-based strategies to address climate change thereby enhancing its overall
harm to the environment at the source. Additionally capacity for climate change management.through continuous optimization of production
processes and the use of advanced technologies
and equipment the Company strives to minimize the Climate Governance Strategy
usage of solvents and reagents while ensuring product
quality. This effectively reduces resource consumption During the reporting period our Company and subsidiaries (branches) referenced recommendations and frameworks
and environmental pollution during the production provided by TCFD to comprehensively assess the climate risks and opportunities we face and formulated and deployed
process. specific plans to address climate change and reduce greenhouse gas emissions.When selecting packaging materials such as paper
drums cartons and plastics the Company requires Governance
its subsidiaries (branches) to prioritize the use of
recyclable materials. This facilitates proper recycling
after use reducing landfill and incineration volumes of
waste. The materials can also be transformed through
further processing into new resources promoting
the circular utilization of resources. Here are some
highlighted examples:
The ESG Committee serves as the representative Each subsidiary (branch) has establ ished a
body for addressing climate change issues and the g reenhouse gas invento ry team. The EHS
Guangxi Kelun: All organic solvents
01 Board of Directors oversees the implementation Department appoints a team leader and other used in production are recycled with of related initiatives. The ESG Working Group acts departments assign team members. The Company
an average recycling rate of 95%. The as the executing body of the ESG Committee and designates a representative as the management
Company also uses recyclable packaging is responsible for coordinating the comprehensive representative to promote and supervise the
materials with an average recycling rate implementation of climate change management implementation of climate-related activities in
of 95%. across various departments units and subsidiaries their respective companies. This ensures effective
(branches) of the Company. communication and action at the execution level.
02 Kelun-Biotech: Where possible
the Company prioritizes purchasing
products with larger packaging or
packaging that can be recycled and Strategies
reused such as using recycled drums
to store other waste materials.The Company incorporates climate change and its
associated risks into its governance and decision-
making processes for sustainable development.
03 Yueyang Branch: For large quantities of It analyzes the risks and opportunities presented
penicillin bottles used in the factory the by climate change and based on the direction
Company adopts tray packaging and of Group's business development formulates
the trays are returned to the penicillin targeted strategies to proactively manage climate
bottle manufacturers for reuse after use change reduce greenhouse gas emissions and
reducing the use of cardboard boxes. enhance climate change resilience.
123 124Persist in Green Development Advocate Low Carbon
Climate Risk Identification and Response Status of KELUN PHARMA Greenhouse Gas Emission Management
Risk type Risk Description and Impact Response Strategy The Company attaches great importance to the monitoring and analysis of greenhouse gases. It actively promotes a
series of measures to reduce greenhouse gas emission intensity and strives to achieve carbon peaking between 2028
Typhoons heavy rain and floods:
Plan for various transportation methods allocate and 2030. At present our direct carbon emissions (Scope 1) mainly come from fixed emission sources (such as natural
Extreme weather events cause disruptions in logistics logistics transportation time based on weather gas coal etc.) mobile emission sources (such as Company-owned vehicles etc.) and emissions from other production
and transportation impacting product production and warnings to ensure material inventory reserves;
timely delivery leading to increased operating costs; auxiliary facilities. Indirect carbon emissions (Scope 2) mainly come from purchased electricity steam etc.Continuously improve emergency response
Damage to production equipment and operational
Acute Risks mechanisms for natural disasters stockpile interruptions resulting from the destructive force of 1emergency supplies and strengthen safety Greenhouse Gas Emissions of KELUN PHARMA in 2023-2024
extreme weather events leads to increased equipment inspections;
repair costs;
Implement emergency plans for extreme
Potential risks are posed to employees' personal safety weather events and conduct regular drills to Indicator Unit 2023 2024
and occupational health with work-related accidents prepare for such events;
leading to reduced production efficiency.Physical Avoid locating new facilities in low-lying areas; Total GHG emissions tCO2e 2659459.92 2845549.25
Risks Sea level rise: Develop suppliers in multiple regions within
Operational entities in coastal areas may need to the same category to ensure a continuous
relocate inland resulting in damage or premature and sufficient supply of materials without Direct (Scope 1) GHG emissions tCO2e 2190590.17 2361763.17
scrapping of fixed assets leading to increased production dependence on a single source;
Chronic costs; Install refrigeration facilities to address
risks Temperature rise: temperature increases; Direct (Scope 2) GHG emissions2 tCO2e 468869.75 483786.08
Employees may experience heat exhaustion heat stroke Equip facilities with comprehensive fire safety
or other health issues due to extreme heat resulting in systems;
increased operating costs. Production machinery may
face overheating issues leading to reduced lifespan and Conduct emergency drills and fire safety GHG emissions intensity tCO2e/ RMB 10000 revenue 1.24 1.30
increased capital expenditures. training to enhance employee awareness and
capabilities in fire prevention and response.Tightening carbon emission management policies Closely monitor carbon emission policies and
and regulations: regulatory updates in its operational regions to The Company and its subsidiaries (branches) continue to conduct greenhouse gas emission inspections at the Company
The national deployment of "peak carbon dioxide respond appropriately;
emissions and carbon neutrality" initiatives including the Properly arrange production plans such as level. In accordance with the Guidelines on Accounting Methods and Reporting of Greenhouse Gas Emissions of
introduction of energy-saving and emission-reduction staggering production schedules; Enterprises in Other Sectors of Industry (Trial) for all facilities within the production area the emissions from fossil fuel Policy risks policies and standards may increase compliance costs Optimize process flows to reduce electricity combustion CH4 emissions from anaerobic wastewater treatment and emissions from purchased electricity and heat
for carbon emissions; consumption; were verified. This helps to identify key emission categories and develop effective mitigation measures to jointly promote
Potential production reductions caused by local Regularly share domestic and international
government power restrictions may lead to income the achievement of the Company's sustainable development strategy.policy trends and distribute them to subsidiaries
losses. (branches) for learning and implementation.Select low-energy-consuming production
Transition to low carbon emission technologies: equipment optimize production processes Product carbon footprint assessment
Early retirement of high-energy-consuming equipment explore and implement energy-saving and
Technical leads to increased operating costs; emission reduction projects to reduce energy
risks Research and development and application of clean consumption; During the reporting period Xindu Base Hubei
energy or innovative low-carbon technologies result in Strengthen carbon emission reduction across the Kelun Guang'an Branch and New Kaiyuan
increased R&D expenses. entire process including production operations hired third-party verification organizations to
and logistics transportation.conduct product carbon footprint assessments
Transition Rising raw material costs: The Company will better monitor and analyze for products such as amino acid injections
risks Chemical raw materials auxiliary materials packaging
materials and other raw materials have been affected the market and arrange inventory and metronidazole injections and zinc acetate. The
Market by various factors such as macro economy monetary procurement cycles reasonably to reduce risks; assessments followed relevant standards such as
risks policy environmental protection management and The Company will actively organize product Greenhouse Gases - Carbon Footprint of Products
natural disasters. This may lead to supply constraints technology research to effectively reduce
or significant price fluctuations which will affect the product costs. - Requirements and Guidelines for Quantification
Company's profitability to some extent. (GB/T 24067-2024). and Greenhouse Gases -
Carbon Footprint of Products - Requirements and
Proactively disclose climate-related risks
opportunities and corresponding response Guidelines for Quantification (ISO 14067:2018). The
Company's performance in responding to climate measures; assessments covered resource extraction raw
change based on social concerns: Establish energy-saving and emission reduction material production raw material transportation KELUN PHARMA's Product Carbon Footprint Certificate (Example)
Reputation As global awareness and concern for climate change goals and regularly monitor the progress of goal energy production and the production of the
risks and environmental protection increase stakeholders
attainment;
products from cradle to gate. The Company
expect companies to take on more emission reduction Proactively respond to inquiries from
responsibilities. Failure to initiate early low-carbon stakeholders; obtained relevant carbon labeling certificates.transition plans may result in reputational damage. Enhance overall awareness of energy-saving
management within the Group and provide
climate-related training for employees. 1 The data covers the Company's headquarters and its subsidiaries (branches).
2 T he CO2 emission factor for electricity is based on the average national carbon emission factor of the power grid published by the Ministry of
125 Ecology and Environment for the year 2022 which is 0.5366 tCO2/MWh. 126Persist in Green Development Advocate Low Carbon
Participation in Green Power Trading Projects
The carbon trading market is an effective mechanism to achieve carbon emission reduction targets. It optimizes the
allocation of carbon emission rights through market-based approaches incentivizing companies to reduce their carbon
emissions. Subsidiaries of the Company has taken the lead in participating in green electricity trading. Through market-
based procurement of renewable energy sources such as wind and solar power the Company effectively reduces the
carbon emission intensity in its production processes. This initiative also sets an example for the green transformation of
the entire industry chain.● X indu Base has participated in the "Carbon
Benef i t ing T ianfu" mechanism in Chengdu
implementing a series of energy-saving measures
and accumulating significant experience in carbon Phase I Photovoltaic Project of Yueyang Branch Photovoltaic Project of Shandong Kelun
emission reduction achieving remarkable results.As of now Xindu Base holds a certain amount of
Chengdu "Carbon Benefiting Tianfu" mechanism's
certified emission reduction (CDCER) reflecting the
solid achievements of the Company in pursuing its
"carbon peaking and carbon neutrality" goals.● On January 24 2024 Kunming Nanjiang obtained Biodiversity Protection
the trading voucher of Green Power Certificate
corresponding to the purchase of 1050 MWh of Trading Voucher of Green Trading Voucher of Green The Company attaches great importance to the impact of new upgraded and expanded projects on biodiversity. It
electricity further promoting the Company's green Power Certificate of Power Certificate of Kelun- strictly complies with relevant laws and regulations such as the Soil Pollution Prevention and Control Law of the People's Kunming Nanjiang Biotech
and low-carbon transformation. Republic of China the Forest Law of the People's Republic of China the Wildlife Protection Law of the People's Republic
In 2024 Kelun-Biotech purchased 4900 megawatt- of China and the Opinions on Further Strengthening Biodiversity Conservation. It actively fulfills the obligations of the ●
hours of domestically sourced renewable energy United Nations' Convention on Biological Diversity and takes various measures to protect biodiversity.green electricity.Clean energy utilization
The Company continuously strengthens energy-saving management and explores multiple energy-saving pathways.By exploring nuclear solar wind and biomass energy it optimizes its energy mix significantly increasing the share of
renewable energy to achieve source-level carbon reduction. Currently solar photovoltaic (PV) power is the primary clean
energy source of the Company. Project evaluation Environmental risk Assessment of
identification biodiversity
Strict evaluation is conducted to Project construction is avoided in Encouragement i s g iven to
Photovoltaic Power Generation of Subsidiaries (Branches) of KELUN determine if projects comply with areas with high biodiversity value p r o d u c t i o n c o m p a n i e s t o
PHARMA in 2024: ecological protection redlines if such as near designated ecological actively carry out biodiversity they exceed environmental quality protection zones to ensure that the assessments related to their
limits if they surpass resource implementation of projects does business activities. This enables
Guangxi Kelun: Hunan Kelun Yueyang Jiangxi Kelun: Shandong Kelun: utilization limits and if they meet not have any negative impacts on a deeper understanding of the
Branch: the control requirements outlined in biological habitats. potential impacts on biodiversity
Installed capacity Installed capacity Installed capacity Installed capacity the ecological environment access and the development of targeted
list; protective measures to support
3.84 MW 4.35 MW 3.15 MW 1.123 the conservation of endangered MW species and promote ecosystem
electricity generation electricity generation electricity generation electricity generation balance and stability.
3246.064040.702935.291047.56
MWh in 2024 MWh in 2024 MWh in 2024 MWh in 2024 During the reporting period all new upgraded and expanded projects of KELUN PHARMA's production companies were
not located in ecologically protected areas or areas of high biodiversity value. These projects did not have significant
adverse impacts on biodiversity.
127 121288Appendices
Appendices
Appendix I: Data List of Key Performance Indicators Investor Communication
Indicator Unit 2023 2024
Economic Performance Number of disclosure announcements Copy 142 144
Number of earnings briefings held Times 1 1
Indicator Unit 2023 2024
Number of online targeted research sessions Times / 3
Gross revenue RMB 10000 2145393 2181241
Number of responses to questions on the Interactive Platform Times / 73
Net profit attributable to shareholders of the listed company RMB 10000 245611 293589
Number of investor hotline calls answered Times / 718
Governance Performance Ensuring Information Security
Directors Supervisors and Senior Management
Indicator Unit 2023 2024
Indicator Unit 2023 2024 Number of information security incidents or breaches of client
Times 0 0
privacy
Total members of board directors Persons 8 9
Specific amount involved in data security incidents RMB’0000 0 0
Including: Number of executive directors Persons 1 1
Confirmed customer privacy breach incident Times 0 0
Including: Number of independent directors Persons 3 3
Specific amount involved in breaches of client privacy RMB’0000 0 0
Proportion of independent directors % 38 33
Number of cybersecurity training sessions conducted Times 1 3
Number of board meetings convened Times 11 9
Number of cybersecurity awareness campaigns conducted Times / 4
Attendance rate of board members % 100 100
Number of cybersecurity emergency drills conducted Times 1 1
Number of general meetings of shareholders held Times 4 3
Number of Board of Supervisors meetings convened Times 6 6 Environmental Performance3
Business Ethics Environmental Management
Indicator Unit 2023 2024 Indicator Unit 2023 2024
Number of anti-commercial bribery and anti-corruption Total investment in environmental protection RMB 10000 60535.51 66139.57
training sessions Times 12 11
Percentage of employees covered by anti-commercial bribery % 100 100 Total hours of environmental protection training Hours 39949 46786and anti-corruption training
Percentage of major subsidiaries (branches) covered by Number of violations of environmental laws and regulations Item 0 0
business ethics audits % / 100
Percentage of core suppliers engaging in business with the Number of incidents punished for violating environmental protection Times 0 0
Company that have signed Sunshine Agreement % 100 100 laws and regulations
3 Due to changes in the method of environmental data collection for some subsidiaries (branches) in 2024 we have conducted retrospective
adjustments to the environmental data for the year 2023.
129 130Appendices
Energy Usage Wastewater Discharge
Indicator Unit 2023 2024 Indicator Unit 2023 2024
Total energy consumption Tons of standard coal / 978600.17 Total wastewater discharged Tons 4775858.88 5108191.20
Direct energy consumption Tons of standard coal / 844877.61 Chemical oxygen demand (COD) Tons 304.51 348.57
Including: Coal Tons 1349678.37 1376176.22 Five-day biochemical oxygen demand (BOD5) Tons 81.34 94.35
Gasoline Liter 232401.13 219057.97 Suspended solids Tons 65.91 54.28
Diesel Liter 224719.02 230079.95 Ammonia nitrogen Tons 14.64 20.31
Natural gas Cubic meter 44933325.00 43741984.60
Waste Discharge
LPG Cubic meter 301.00 240.00
Indicator Unit 2023 2024
Indirect energy consumption Tons of standard coal / 133722.56
Hazardous waste (generated) Tons 217767.81 251112.33
Including: Electricity Megawatt-hour 671943.05 728069.32
Hazardous waste (recycled) Tons 197.96 1115.63
Steam Tons 492423.04 609171.11
Hazardous waste (disposed) Tons 217748.41 250601.02
Renewable energy usage (Photovoltaic
power generation) Megawatt-hour 68851.36 69671.14 Non-hazardous waste (generated) Tons 219500.53 236909.06
Greenhouse Gas Emissions Non-hazardous waste (recycled) Tons 7341.10 7298.64
Indicator Unit 2023 2024 Non-hazardous waste (disposed) Tons 212243.11 229599.68
Total GHG emissions tCO2e 2659459.92 2845549.25 Municipal solid waste (generated) Tons 16809.81 17657.54
GHG emissions (Scope 1) tCO2e 2190590.17 2361763.17 Municipal solid waste (recycled) Tons 15.10 39.60
GHG emissions (Scope 2) tCO2e 468869.75 483786.08 Municipal solid waste (disposed) Tons 16791.71 17617.94
GHG emissions intensity tCO2e/ RMB 10000 revenue 1.24 1.30 Utilization of Water Resources
Exhaust Emission Indicator Unit 2023 2024
Indicator Unit 2023 2024 Total water consumption Tons 28559448.92 31388028.53
Total exhaust emission Tons 2637085.72 2947721.69 Including: Fresh water consumption (=A+B+C) Tons 16109743.48 16397458.45
Urban (or other water supply agencies) water
Particulate matter (PM) emission Tons 23.79 57.54 supply consumption (A) Tons 5948036.15 6187481.25
Nitrogen oxides (NOx) emission Tons 368.50 466.01 Surface water consumption (B) Tons 9832299.63 9744798.00
Sulfur oxides (SOx) emission Tons 82.84 126.77 Groundwater consumption (C) Tons 329407.70 465179.20
Volatile organic compounds (VOCs)
emission Tons 183.43 270.36
Reclaimed water reuse Tons 12586330.43 15049294.08
131 132Appendices
Product Performance Supplier Management
Indicator Unit 2023 2024
Product Responsibility and Service
Number of supplier training
sessions Nr 300 320
Indicator Unit 2023 2024 Coverage rate of high-risk supplier
Percentage of production enterprises with training
%100100
%/40.63
ISO9001 certification Supplier training hours Hours 400 400
Number of products recalled Item 0 0 Number of supplier participating
in supplier training Persons 2000 2000
Percentage of products recalled % 0 0
Number of supplier audits Nr 383 420
Number of product regulatory warning
Times 0 0
incidents received Coverage rate of high-risk supplier
audits % 100 100
Number of internal quality training sessions Times 27457 28898
Research and Development (R&D) and Intellectual Property Management
Coverage of internal quality training % 99.28 99.32
Total number of participants in internal quality Indicator Unit 2023 2024
Person-time 498777 587962
training
R&D investment RMB 100 million 19.53 21.71
Internal quality training hours Hours 821934 725186
Cumulative number of authorized Item 2153 1997
Number of product quality tests conducted 10000 times 75 60 patents held
Including: Invention patents Item 707 735
Number of pilot tests conducted for products 10000 times 13 15
Number of existing product quality/safety Utility model patent Item 1237 1069
10000 times 60 50
tests conducted
Design patent Item 209 193
Coverage of pharmacovigilance training % / 100
Number of pharmacovigilance training Number of newly applied patents Item 409 438
Times / 273
sessions Number of newly granted patents Item 184 231
Total number of participants in
Persons / 10672
pharmacovigilance training
Total pharmacovigilance training hours Hours / 825 Employee Performance
Number of employees participating in
Person-time / 8800
responsible marketing training
Employment
Duration of responsible marketing training 10000 hours / 11.78
Average duration of responsible marketing
Hours / 40 Indicator Unit 2023 2024
training per person
Number of responsible marketing audits Total number of employees Persons 19798 21864
Times / 35
conducted
Number of employees covered by responsible Male Persons 10723 12086
Persons / 2956
marketing audits Employees by gender
Female Persons 9075 9778
Amount involved in significant safety and
quality responsibility accidents related to RMB10000 0 0
annual products and services Labor contract system Persons / 21410
Employees by type of
Labor dispatch system Persons
employment / 158
Other regions Persons / 296
133 134Appendices
Employee Turnover Rate
Indicator Unit 2023 2024
Employees aged 30 and
Persons / 7326 Indicator Unit 2023 2024
below
Overall employee turnover rate4 % 16.08 15.73
Employees aged 31 to 40 Persons / 8733
Employees by age Male % 17.36 18.12
Employees aged 41 to 50 Persons / 4399 Employee turnover rate by gender
Employees aged 51 and Female % 14.52 13.20
Persons / 1406
above Employees aged 30
%24.2324.65
Senior Management Persons 14 12 and below
Employees aged 31
Female employees in the % / 12.95
Persons 3 3
senior management Employee turnover rate by age
to 40
group Employees aged 41
Number of employees by rank Middle management Persons 442 3671 % / 7.47to 50
Female employees in the Employees aged 51
Persons 1612 1792 % / 7.38
middle management and above
Grassroots employees Persons / 18181 Employee Training and Development
Mainland China Hong Kong
Persons 19445 21470
Macau and Taiwan Indicator Unit 2023 2024
Number of employees by region
Overseas countries or
Persons 353 394
regions Total training hours 10000 hours 170.95 176.18
Average tenure of female
Year 6.1 6.0 Average training hours per
employees in the Company Hours 86.35 80.58
Employee tenure employee
Average tenure of male
Year 7.1 6.8 Total training hours for female
employees in the Company 10000 hours 76.07 76.63employees
Number of newly hired
Persons 3598 3598 Per capita training time for female
employees Hours 83.83 78.60Employee training employees
Number of newly hired full-
Number of new employees Persons / 3304 hours Total training hours for male
time employees 10000 hours 94.87 99.55employees
Number of newly hired
Persons 1606 1371 Per capita training time for male
female employees Hours 88.47 82.18employees
Number of employees from ethnic minorities Persons 1883 2197 Total training hours for senior Hours 1032.16 977.67
management
Number of part-time outsourced or temporary employees Persons / 158 Average training hours per senior
Hours 73.73 81.47
management
Number of executive management personnel Persons / 3671 Total number of training sessions
10000 times 6.32 6.16
per year
Number of female executive management employees Persons / 1792
Employee training Annual training expenditure RMB 10000 428.05 487.80
Coverage rate of employee social security % 100 100 assessment
Number of employees trained Persons 19798 21864
Employee training coverage rate % 100 100
4 Overall employee turnover rate = Number of employees who left / (Number of employees at the end of the year + Number of employees who left)
135 136Appendices
Occupational Health & Safety Appendix II: Report Standard Index
Indicator Unit 2023 2024
KELUN PHARMA referenced the Shenzhen Stock Exchange’s Sustainability Reporting Guidelines and GRI standards to report the
Health and safety training Times of safety drills conducted (fire toxic
Times 772 851 referenced information in the content index for the period from January 1 to December 31 2024.and drills gas leaks etc.)
Investment in occupational health and
RMB 10000 2977.79 2886.24
safety management Sustainability Reporting Guidelines GRI Content Index Report Locations
Investment in employee work injury and Descriptions
RMB 10000 644.30 830.61
insurance Environmental information disclosure
Investment in employee safety production
Investment in work safety RMB 10000 24.73 30.92
liability insurance Section I Response to Climate Change
Employee work injury insurance coverage
%100100
rate Response to climate
GRI 201: Economic Performance change
Coverage rate of employee production Response to Articles 20 21 22 23 24 25 26 27
%100100
liability insurance climate change and 28
2016; GRI 302: Energy 2016; GRI 305: Appendix I: Key
Emissions 2016 Performance
Coverage rate of occupational health checkups % 100 100 Indicators (KPIs)
Section II Pollution Prevention and Ecological Conservation
Lost days due to work injury Day 904.5 1582.5
Work-related injury Toxic Emissions and
Incidence of occupational disease % 0 0 Pollutant emission Articles 29 and 30 GRI 2: General Disclosures 2021; GRI Waste; Appendix 303: Water and Effluents 2018 I: Key Performance
Indicators (KPIs)
Toxic Emissions and
Waste disposal Articles 29 and 31 GRI 306: Waste 2020 Waste; Appendix I: Key Performance
Indicators (KPIs)
Ecosystem and
biodiversity Article 32 GRI 304: Biodiversity 2016 Biodiversity
conservation Protection
Environmental GRI 302: Energy 2016; GRI 303: Water
compliance Articles 29 and 33 and Effluents 2018; GRI 306: Waste Environmental
management 2020 management
Section III Resource Utilization and Circular Economy
Energy
Management;
Energy utilization Articles 34 and 35 GRI 302: Energy 2016 Appendix I: Key
Performance
Indicators (KPIs)
Water Resource
Management;
Utilization of Articles 34 and 36 GRI 303: Water and Effluents 2018 Wastewater water resources Treatment; Appendix
I: Key Performance
Indicators (KPIs)
Waste Management
and Circular
Circular economy Articles 34 and 37 GRI 306: Waste 2020 Economy; Appendix
I: Key Performance
Indicators (KPIs)
Social Information Disclosure
Section I Rural Revitalization and Social Contributions
Rural revitalization Articles 38 and 39 GRI 203: Indirect Economic Impacts 2016 Pooling Strength for Rural Revitalization
137 138Appendices
Appendix III: Reader’s Feedback
Sustainability Reporting Guidelines GRI Content Index Report Locations and Descriptions
Social contribution Articles 38 and 40 GRI 203: Indirect Economic Impacts 2016 Practicing Public Welfare and Charity
Dear Readers
Section II Innovation-driven Development and Technology Ethics
Innovation-driven Hello!
Innovation-driven Transformation;
development Articles 41 and 42 / Appendix I: Key Performance We sincerely appreciate your time in reading our 2024 Environmental Social and Governance (ESG) Report. To provide
Indicators (KPIs) you and other stakeholders with more comprehensive professional and valuable ESG information and to continuously
Technology ethics Not involved. The core business of the Company does not involve scientific research and technology
improve our ESG efforts and enhance our ESG management capabilities we sincerely invite you to assist in completing
development in sensitive fields such as life science and artificial intelligence ethics. the relevant questions in the feedback form. Please do not hesitate to give us your comments.Section III Suppliers and Customers 1. Are you satisfied with this report in general
Supply chain GRI 308: Supplier Environmental Building a
security Articles 44 and 45 Assessment 2016; GRI 414: Supplier Sustainable Supply Yes □ Fair □ No □Social Assessment 2016 Chain
Equal treatment of Equal treatment of
SMEs Article 46 / SMEs 2. Do you think this report reflects the significant impact of KELUN PHARMA on ESG
Product Safety and
Product and GRI 416: Customer Health and Safety Quality; Customer Yes □ Fair □ No □
service safety and Articles 44 and 47 2016; GRI 417: Marketing and Labeling Service; Appendix
quality 2016 I: Key Performance 3. Do you think the analysis of the stakeholders identified in this report and their relationship with KELUN PHARMA is
Indicators (KPIs)
accurate and comprehensive
Data security and
customer privacy Articles 44 and 48 GRI 418: Customer Privacy 2016 Ensuring Information
protection Security Yes □ Fair □ No □
Section IV Employee
4. Do you think the information provided in this report is comprehensive
Talent Development
GRI 401: Employment 2016; GRI 403: Strategy; Talent Yes □ Fair □ No □
Occupational Health and Safety 2018; Retention; Employee
GRI 404: Training and Education 2016; Training and
Employee Articles 49 and 50 GRI 405: Diversity and Equal Opportunity Development; 5. Do you think the information provided in this report is readable
2016; GRI 406: Non-discrimination 2016; Occupational
GRI 409: Forced or Compulsory Labor Health and Safety;
2016 Appendix I: Key
Yes □ Fair □ No □
Performance
Indicators (KPIs) 6. Is the overall design of this report satisfactory
Sustainable Development Governance Information Disclosure
Yes □ Fair □ No □
Section I Sustainable Development Governance Mechanisms
Systematic 7. Your other comments and recommendations on the 2024 Environmental Social and Governance Report of KELUN
Supervision PHARMA are welcome.Due diligence Article 52 / Mechanisms;
Business Ethics
Audit
Stakeholder GRI 2: General Disclosures 2021; GRI 3: Stakeholder
Article 53 For any questions suggestions or feedback regarding this report please feel free to contact us through the following
communication Material Topics 2021 Communication channels:
Section II Business Conduct Address: 36 Baihua West Road Qingyang District Chengdu
Anti-commercial Business Ethics; Postcode: 610071
bribery and anti- Articles 54 and 55 GRI 205: Anti-corruption 2016 Appendix I: Key Performance Telephone: 4 006860333 (Monday to Friday 08:00-17:30 corruption Indicators (KPIs) excluding statutory holidays)
Anti-unfair E-mail: kelun@kelun.com
competition Article 54
GRI 206: Anti-competitive Behaviors
2016 Fair competition
139140
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