2024

Boai NKY Medical Holdings Ltd.Environmental, Social, and Governance Report

Telephone number:0391-8696320Website:www.boai-nky.comContact Address: 1888 Culture Road, Boai County, Jiaozuo City, Henan Province.

Boai NKY Medical Holdings Ltd.ENVIRONMENTAL,SOCIAL AND GOVERNANCE(ESG) REPORT

Stock Code:300109

2024

2024Boai NKY Medical Holdings Ltd. Environmental, Social, and Governance Report

contents

Excellent Governance

Solidifying the Foundation for Development

E?cient GovernanceStrengthening The Management Foundation

ESG EmpowermentEnhancing Robust Governance

Integrity and ComplianceBuilding a Trustworthy DefenseInformation Security

Comprehensive Risk Prevention

Quality First

Creating Excellent ProductsCustomer-Centric

Optimizing Service Experience

Technological EmpowermentStimulating Innovation

Green ProcurementBuilding a Sustainable Supply Chain

Lean ManufacturingDeveloping New Quality Productivity

Green Development

Empowering a Low-Carbon Future

Striving for Win-WinCreating a Better Future Together

Protecting Rights

Building a Harmonious WorkplaceEmpowering Growth

Supporting Talent Development

Health FirstSafeguarding Occupational SafetyCaring for SocietyFul?lling Public Welfare Responsibilities

IntroductionABOUT THIS REPORTCHAIRMAN'S ADDRESSABOUT NKY

Report Appendix

KEY PERFORMANCE TABLEREPORT INDEX TABLEREADER FEEDBACK FORM

Green OperationsProtecting Clear Water and Green MountainsLow-Carbon Transformation

Supporting Climate Neutrality

AboutThis Report

Chairman'sAddressAbout NKY

2024 Environmental, Social, and Governance Report

Governance

Excellent

Manufacturing

Lean

Development

Green

for Win-Win

Striving

Key PerformanceTable

ReportIndex Table

0102

About This ReportOverviewThis report is the Environmental, Social, and Governance (ESG)report released by the Boai NKY Medical Holdings Ltd. (hereinaf-ter referred to as "NKY," "the Company," or "we"). The report,based on the principles of objectivity, standardization, trans-parency, and comprehensiveness, provides a detailed disclo-sure of the company's practices and performance in ESG for the?scal year ????.

Scope of the ReportUnless otherwise speci?ed, this report focuses on "Boai NKYMedical Holdings Ltd." as the main entity. The data scopeincludes Boai NKY Medical Holdings Ltd., Tianjin Boai NKY Inter-national Trade Co., Ltd., NKY (Jiaozuo) Polymer Materials Co.,Ltd., Boai NKY Chemical Co., Ltd., NKY Biotechnology Co., Ltd.,Wuhan Heer Medical Technology Development Co., Ltd., Gener-gy Bio-Technology (Shanghai) Co., Ltd., Eastwin Scienti?cInstruments Co., Ltd., Sanji Bio-technology Co., Ltd., NKY Preci-sion Medicine Co., Ltd., and NKY(Shanghai) Medical TechnologyCo., Ltd.

Time RangeThe Company's sustainability report is an annual report cover-ing the period from January ?, ????, to December ??, ????(referred to as the "reporting period"). To enhance comparabili-ty and forward-looking aspects, certain content appropriatelyreferences previous years. The report is published annually,aligning with the ?nancial year.

Approval Con?rmation

This report has been reviewed and approved by the Board of Directorsand is being released concurrently with the annual report. The Boardof Directors commits to supervising the content of the report, ensuringthe absence of any false or misleading statements, and taking respon-sibility for its truthfulness, accuracy, and completeness.

Compilation Basis

This report is prepared in accordance with the Shenzhen StockExchange Listed Company Self-Regulation Guidelines No. ? - Standard-ized Operation of GEM Listed Companies (Revised in December ????)and Shenzhen Stock Exchange Listed Company Self-Regulation Guide-lines No. ?? - Sustainable Development Report (Trial), while also refer-encing the United Nations Sustainable Development Goals (UN SDGs),Global Reporting Initiative (GRI) Sustainability Reporting Standards,and proactively drawing insights from the International FinancialReporting Sustainability Disclosure Standard No. ? - Climate-relatedDisclosures (IFRS S?) and the Ministry of Finance's Enterprise Sustain-ability Disclosure Guidelines - Basic Principles and other relevantrequirements.

Access

This report is published in electronic format. You can download theelectronic version of this report from the Shenzhen Stock Exchangewebsite (www.szse.cn) or the Company's o?cial website (ww-w.boai-nky.com) to access more company information. For any ques-tions or suggestions regarding the report, please emailboard.sec@nkygroup.cn or call ????-???????.In case of any discrepancies in the interpretation between the Chineseand English texts, the Chinese text shall prevail.Feedback

Should you have any opinions or suggestions regarding the sustainable development of the Company, please feel free to provide feedbackthrough the contact information below. Your input will assist us in continuously improving our reports.Telephone number: ????-???????.Fax number: ????-???????.Website: www.boai-nky.com.E-mail: board.sec@nkygroup.cn.Contact Address: ???? East Culture Road, Boai County, Jiaozuo City, Henan Province.

Explanation of Terms

Data Interpretation

The information and data disclosed in this report are sourced from theCompany's internal o?cial documents, statistical reports, annualreports, and daily curated ESG practice cases. During the reportingperiod, due to adjustments in statistical methods for some data, lead-ing to restatements and inconsistencies with previous years' reportdata, please refer to this report for accuracy. The ?nancial data in thisreport is denominated in Chinese Renminbi. In case of discrepancieswith the ?nancial report, the ?nancial report shall prevail.

SubjectContent

NKY, the Company, weNKY Pharmaceuticals

Tianjin NKYGerman NKYNKY Biotechnology

Heer MedicalSanji Bio-technologyGenergy Bio-TechnologyNKY (Jiaozuo) Polymer Materials

NKY(Shanghai)

NKY PrecisionEastwin

Boai NKY Medical Holdings Ltd.Boai NKY Pharmaceuticals Ltd.Tianjin Boai NKY International Trading Ltd. Boai NKY Chemical GmbH (Germany)Boai NKY Biotechnology Co., Ltd.Wuhan Heer Medical Technology Development Co., Ltd.Changsha Sanji Bio-technology Co., Ltd.Genergy Bio-Technology (Shanghai) Co., Ltd.NKY (Jiaozuo) Polymer Materials Co., Ltd.NKY(Shanghai) Medical Technology Co., Ltd.Shanghai NKY Precision Medical (Shanghai) Co., Ltd.Eastwin Scienti?c Equipments Inc.

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Governance

Excellent

Manufacturing

Lean

Development

Green

for Win-Win

Striving

Key PerformanceTable

ReportIndex Table

About NKYCompany Pro?leBoai NKY Medical Holdings Ltd. (NKY Group) was established in ???? and is a Chinese Growth Enterprise Market (GEM) listed company withstock code ??????. The company currently operates in two main business segments: Fine Chemicals and Precision Medicine. The Fine Chemi-cals segment primarily involves the production and sales of two major product series, Polyvinylpyrrolidone (PVP) and Eudragit? (PVM/MA). ThePrecision Medicine segment mainly includes the production and sales of in vitro diagnostic products, as well as investments in innovativeoncology drugs.Adhering to the corporate spirit of " Diligence Innovation" and the corporate values of "Serving Customers, Achieving Employees, RewardingShareholders and Bene?ting Society," NKY Group upholds a long-term perspective. It has evolved from a regional small chemical plant into aglobally in?uential and sustainable holding company.NKY owns a functional polymer material production base in Jiaozuo, Henan, with a totalland area of over ??? mu. In Shanghai's Songjiang district, it has a ??-mu research andproduction industrial park. As of December ??, ????, the Group had a total of ?,??? employ-ees and total assets of RMB ?.??? billion.

Total employees1,163

Total assetsbillion RMB

4.374

Chairman's AddressThe Wind Is Right to Set Sail, Embark on a New Chapter.In ????, NKY, guided by the corporate spirit of “Dedication and Innovation” and rooted in sustainable development, continues to deepen itsenvironmental, social, and governance (ESG) practices. With a ?rm commitment to high-quality growth, the Company is taking more deter-mined steps forward, injecting new momentum into the realization of its vision: “World-class Products, Centuries of Excellence.”Enhancing Governance to Build a Solid Foundation for Growth.We continue to strengthen our corporate governance capabilities,advancing compliance management and risk control systems. By foster-ing open and transparent communication, we aim to enhance investortrust. Through the integration of Party-building leadership and businessethics, we promote scienti?c decision-making and standardized opera-tions. These e?orts lay a solid foundation for long-term development andcreate sustainable value for shareholders, employees, and society.

Strengthening Responsible Collaboration for a Shared, Sustainable Future.

In our supply chain, we are enhancing green supplier evaluation mecha-nisms, promoting end-to-end digital transformation, and improvingsustainability capabilities. We strictly enforce quality and safety standardsand use intelligent management to reinforce workplace safety. At thesame time, we continuously improve the quality of our products andservices through precise customer insights and optimized service process-es, achieving win-win cooperation with partners and clients.As the tide surges, countless sails compete. Now is the time to forge ahead.

NKY will continue to steer with responsibility and sail with innovation, pressing forward on the course of sustainable development. Through practical action andunwavering commitment, we are writing a new chapter in high-quality growth.

Ful?lling Our Green Commitment to Safeguard the Ecosystem.

Green and low-carbon development remains our guiding principle. In????, we further optimized our environmental management system,reinforced energy conservation and emissions reduction throughout theproduction process, and actively advanced the adoption of renewableenergy. We improved the e?ciency of clean energy use, deepened waterresource recycling and comprehensive waste management, and built agreen manufacturing system. By driving low-carbon transformationthrough technological innovation, we contribute to the protection ofnatural ecosystems.

Driving Development Through Innovation and Leading Industry Transformation.

Innovation is the core driver of our progress. In ????, we are increasing invest-ment in research and development, focusing on technological breakthroughsin polymer new materials and precision medicine. We are accelerating thetransformation and industrial application of scienti?c and technologicalachievements, strengthening our intellectual property protection system, andfostering cross-disciplinary innovation teams. By exploring emerging marketssuch as new energy and biopharmaceuticals, we aim to empower high-qualitydevelopment across the industry through technological advancement.Empowering Employee Growth and Fostering a Culture of Care.

Employees are the Company’s most valuable asset. In the year ahead, we willcontinue to improve our talent development system, build diversi?ed careerdevelopment pathways, and support employees in enhancing their skills andrealizing their value. We are optimizing our occupational health managementmechanisms, caring for both the physical and mental well-being of our sta?,and creating an inclusive and equitable work environment where everyemployee grows in step with the Company.Giving Back to Society and Demonstrating Corporate Responsibility.

Staying true to our original aspiration of “Creating Value for Society,” we aredeepening our public welfare e?orts in ????. We are focusing on education,medical assistance, and community development, delivering warmth throughtargeted support initiatives. By leveraging our expertise in precision medicine,we are helping to improve primary healthcare services, taking concrete actionsto ful?ll our social responsibilities and contribute to a better society.

0304

NKY Chairman’s O?ce

NKY Board SecretaryO?ceNKY GeneralAdministrative O?ce

Chairman of Fine Chemicals Division

General Manager of Fine

Chemicals Division

Boai NKY Pharmaceuticals Ltd.Boai NKY Biological Technology Co., LtdNKY Electronic Materials (Shanghai) Co., Ltd.NKY (Jiaozuo) Polymer Materials Co., Ltd.Tianjin Boai NKY Internationals Trade Ltd.NKY International (USA) Inc.Boai NKY Chemical GmbH (Germany)NKY Pharmaceuticals Ltd. Shanghai BranchShanghai NKY Precision Medicine Technology Co., Ltd.NKY (Shanghai) Medical Technology Co., Ltd.Genergy Bio-Technology (Shanghai) CO., Ltd.Changsha Sanji Bio-technology Co., Ltd.Wuhan Heer Medical Technology Development Co., Ltd.Eastwin Scienti?c Equipments Inc.

Chairman and General Manager:

Zhang Junzheng

Chairman of Precision

Medicine DivisionGeneral Manager of PrecisionMedicine Division

NKY FinanceDepartmentNKY AuditDepartmentNKY LegalDepartmentNKY HumanResources Department

Historical Evolution

2003The Kyoyuan Fine Chemicals Plant,a subsidiary of the Bo'ai CountyFertilizer Factory, was among the?rst in China to producepharmaceutical excipientpolyvinylpyrrolidone (PVP) in the????s. In March ????, under theguidance of the Party and thegovernment, the founding teamcompleted the privatization andrestructuring of KyoyuanPharmaceuticals into a privateenterprise, laying the foundationfor NKY’s continued growth andexpansion.

2008In March ????, NKY launched thedevelopment of its Orris? productline. Over a decade of R&D andprocess re?nement led to thecreation of the world’s onlybenzene-free PVM/MA series ofproducts.

2006NKY established its internationalmarketing team and appointedMr. Herbert Wilhelm Ulmer asChief Scientist. Under hisleadership, the R&D departmenthas signi?cantly advanced theCompany’s productionprocesses and product quality,while continuously expanding itsproduct portfolio.

2009

In April ????, NKY wasrestructured into ajoint-stock company andbegan preparations for itsinitial public o?ering (IPO).

2021NKY divested its U.S.-basedsubsidiary, BioVision Inc.,and clari?ed its long-termdevelopment strategy.

2010

On August ??, ????, NKY waso?cially listed on the ShenzhenStock Exchange (Stock Code:

??????), issuing ? million sharesand raising RMB ??? million toexpand production capacity.

2014NKY initiated its dual-corestrategy focusing on ?nechemicals and healthcare. Itacquired three precision medicinecompanies—Changsha Sanji,Wuhan He’er, and ShanghaiJingneng—and received approvalfrom the China SecuritiesRegulatory Commission (CSRC) in????.

2011Construction of NKY’s newmanufacturing facility in Bo'aicommenced.

2013NKY relocated to its newmanufacturing site andcelebrated the ??th anniversary ofits corporate restructuring.

2015

NKY became the ?rst pharmaceu-tical excipient manufacturer inChina to receive EXCiPACT GMPcerti?cation.

2018

The Company completed theconstruction of a new R&D centerin Jiaozuo, with a total investmentof RMB ??? million and a ?oorarea of ?,??? square meters. Thatyear, NKY’s manufacturingfacility also passed its secondthird-party audit by the U.S. FDA.

2022Construction began on NKY’snew manufacturing facility inZhongzhan District, Jiaozuo.

2023NKY Zhongzhan Plant Phase IProject Completed and Put intoOperation (Annual productioncapacity: ??,??? tons of NVPmonomer and ?,??? tons of vinylether production line).NKY Group Celebrates ??thAnniversary.

2024NKY Group Joins UN Global Compact,Committing to Support the TenPrinciples on Human Rights, Labor,Environment, and Anti-CorruptionNVP Sales in Chemical Sector Exceed??,??? Tons for the First Time

2020

NKY began construction of its newcampus in Songjiang District,Shanghai, covering an area of ??mu (approximately ?.? acres).

0506

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Governance

Excellent

Manufacturing

Lean

Development

Green

for Win-Win

Striving

Key PerformanceTable

ReportIndex Table

Culture

Serving Customers,Achieving Employees,Rewarding Shareholders

and Bene?ting Society

MISSION

Loyalty,Dedication,SteadfastGratefulEMPLOYEE VALUESENTERPRISE VALUES

Innovation, Dedication to Tasks, Broad Origins and Enduring Flow.

Produce world-class products,

Be excellent for a centuryVISION

NKY, with the long accumulation of history, always maintains the dynamic spirit of innovation, adheres to the belief of dedication to

tasks, and seeks a sustainable future

Industrial Layout

Main Products in the Fine Chemicals Field

Currently, NKY's main business is divided into two segments: ?ne chemicals and precision healthcare, synergistically supporting the Compa-ny's growth through di?erent development models.In the ?eld of ?ne chemicals, the Company is the ?rst domestic high-tech enterprise specializing in the production, research and development,and sales of polyvinylpyrrolidone (PVP) series products, ethylene glycol methyl ether and maleic anhydride copolymer (PVME/MA) series prod-ucts. It is also capable of large-scale production of PVP K?? (powder and liquid), PVP K??, PVP K?? powder, and K??? powder domestically.The Company's products are widely used in various modern industrial sectors such as daily chemicals, pharmaceuticals, brewing and bever-age industry, pigments and coatings industry, textile industry, paper industry, oil recovery, photosensitive materials, and electronics industry.

In the ?eld of precision healthcare, the Company focuses on medical services such as early tumor diagnosis, molecular diagnostics, and genet-ic testing. It has established a medical service platform with two main features, "precision healthcare" and "women's health," based on threekey technologies: "device end," "reagent end," and "service end." The Company continues to explore the potential of precision healthcarebusiness on this foundation.

Since ????, NKY Group has successively invested in ?ve cell and gene therapy innovative drug projects, namelyImmunotech Biopharm, Huadao Biopharma, ViroTech, Liangyuan Bioscience, and NeoAntigen, with a total invest-ment of approximately ??? million RMB. Additionally, NKY Group has established a ??-acre precision medical basein Songjiang, Shanghai, aiming to create an industry innovation hub with a focus on cell therapy.PVPP (Cross-linked Polyvinylpyrrolidone)PVP-I and related pharmaceutical intermediates

PVP K12 (Powder and Liquid)PVP K90 and PVP K60 PowderPVP K120 Powder

GBL2-PyrrolidoneNVP MonomerPVPK Series (Polyvinylpyrrolidone)Copolyvinylpyrrolidone and other VP/VA Copolymer Series Products

????, Invested HKD ??

million, holding a?.??% stake.

????, Invested RMB??? million, holding a??% stake.

????, Invested RMB ??million, holding a??.??% stake.

????, Invested RMB ??million, holding an??.??% stake.???? onwards, Totalinvestment of RMB ??? million,holding an ??.??% stake.

Total investmentmillion RMB

0708

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Governance

Excellent

Manufacturing

Lean

Development

Green

for Win-Win

Striving

Key PerformanceTable

ReportIndex Table

Responsible Care,

Team ?rst,Pursuit of excellence,Customer oriented

Dedication & InnovationENTERPRISE SPIRIT

Annual Key Honors

The local recruitment ratio of seniorexecutives in the company is ??%.The board of directors consists of ?members, including ? non-indepen-dent directors and ? independentdirectors, with ? female members inthe gender composition of the board.The Company issued its "Code of Busi-ness Conduct," which was presentedby the ESG Director through on-siteand online formats.In June ????, the Company o?ciallyjoined the United Nations Global Com-pact (UNGC), with the Chairman sign-ing the NKY Commitment to theUnited Nations Global Compact's TenPrinciples on Human Rights, Labor,Environment, and Anti-Corruption.

ESG Key Performance IndicatorsEconomic PerformanceTotal operating revenue wasmillion RMB

1,606.32

Total assets amounted tomillion RMB4,372.05

representing an increase of%

8.77

Total government subsidies amountedmillion RMB

7.02

Governance

The Company has established a comprehensive quality management system in accordance with ISO ????:???? and ISO ?????:???? standards.The Company has been recognized as a national high-tech enterprise, awarded the high-tech enterprise certi?cation, and has collaboratedwith multiple research institutions.The Company has successfully developed a range of innovative products, including a fully automated liquid-based thin-layer cell preparationstaining integrated machine, P??Ki?? scanning analysis software, and an arti?cial intelligence AI cancer screening and diagnostic system.Establishing a labor union to promote collective bargaining on wages, safeguarding employees' rights to participate in corporate governance.Regularly convening workers' representative assemblies to ensure e?ective communication of employee opinions, reaching consensus onissues such as salary adjustments, working conditions, to maintain harmonious labor relations.By obtaining the ISO ????? Occupational Health and Safety Management System certi?cation, the Company conducts regular assessments ofoccupational disease hazards, provides tailored occupational health examinations, and reduces the risk of occupational diseases.Establish a digital security management platform utilizing intelligent monitoring and QR code-based hazard inspections to achieve online-of-?ine integration, enhancing safety management e?ciency.Continuously supporting various social welfare projects such as education, environmental protection, healthcare, ?re?ghting, and communityactivities to enhance community vitality. Facilitating rural revitalization by integrating industrial collaboration, technological assistance toagriculture, and promoting green development to advance rural economy, ecology, and livelihood improvements.

Social

By obtaining ISO ????? Environmental Management System certi?cation, a systematic and stan-dardized environmental management system is established to ensure the e?ective operation ofpollution prevention measures.Establish an environmental risk prevention and emergency response mechanism, conduct environ-mental risk assessments for all operational sites, and regularly carry out environmental emergencydrills.Utilizing advanced exhaust gas treatment technologies such as thermal incineration, activatedcarbon adsorption, and baghouse dust removal to ensure compliant emissions of VOCs, sulfur diox-ide, nitrogen oxides, etc.; implementing e?cient wastewater treatment processes including aerationregulation, hydrolysis acidi?cation, anaerobic, anoxic, aerobic stages to control pollutants such asCOD, ammonia nitrogen, total phosphorus within regulatory limits; promoting solid waste classi?ca-tion management, recycling hazardous waste for resource utilization, and repurposing generalindustrial solid waste like calcium carbide slag for cement production to enhance resource utiliza-tion e?ciency.Conduct climate risk scenario analysis to develop strategies for addressing climate risks such asextreme weather events and rising carbon prices, ensuring the Company's sustainable development.

Environmental

The Bo'ai Plant used over ??% green electricity throughout the year.The combined annual water consumption of the Bo'ai and Zhongzhan plants decreased by ?% com-pared to ????, while PVP annual production increased by ??.??% during the same period.The Bo'ai Plant obtained ISO ????? organizational-level carbon veri?cation certi?cation.

0910

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing

Lean

Development

Green

for Win-Win

Striving

Key PerformanceTable

ReportIndex Table

2024

Boai NKY Pharmaceuticals Co., Ltd.2024 Henan Province Leading

Enterprise in Manufacturing

NKY(Shanghai) Medical Technology Co., Ltd.

National-level Songjiang Economic andTechnological Development Zone2024 Annual Investment Excellence Award

Governance

Excellent

NKY adheres to excellent governance, ensuring the company's stable operation and sustainabledevelopment through an e?cient "three meetings and one layer" governance structure and a soundinternal control system. The Company actively practices ESG principles, promoting green develop-ment and social responsibility, optimizing stakeholder communication, and enhancing governancestandards. Simultaneously, it strictly enforces integrity, compliance, and information securitymanagement to prevent various risks, laying a solid foundation for the enterprise's long-termstability and growth.

CORPORATE GOVERNANCE ·INTERNAL CONTROL AND RISK MANAGEMENT ·

BUSINESS ETHICS ·ANTI-CORRUPTION ·

Aligning the United Nations Sustainable Development Goals

Excellent GovernanceSolidifying the Foundation for Development

E?cient GovernanceStrengthening The Management FoundationESG EmpowermentEnhancing Robust GovernanceIntegrity and ComplianceBuilding a Trustworthy DefenseInformation SecurityComprehensive Risk Prevention

E?cient Governance:

Strengthening the Management Foundation

NKY Group has consistently adhered to strict compliance with relevant laws and regulations such as the Company Law, Securities Law, Listing Compa-ny Governance Guidelines, and Shenzhen Stock Exchange GEM Listed Company Standard Operation Guidelines. By establishing a comprehensivegovernance structure through the formulation of the Company Charter, the Company has implemented a governance model known as the "threemeetings and one layer," consisting of the shareholders' meeting, the board of directors, the supervisory board, and senior management. This gover-nance model has laid a solid foundation for the Company's stable operation and sustainable development.The Company places a high emphasis on the diversity of the Board of Directors, clearly de?ning the responsibilities of each party, fully respecting the inde-pendence of independent directors, and ensuring the company's compliance and stable operation. As the core of corporate governance, the Board of Direc-tors plays a crucial role in decision-making and guiding the company's development. Board members possess rich experience from various ?elds such as?ne chemicals, precision medicine, ?nancial and tax management, and capital operations, enabling them to provide comprehensive professional guidanceto the company. The Board of Directors consists of ? members, including ? non-independent directors and ? independent directors. The gender composi-tion of the Board includes ? female members, and the educational backgrounds range from doctoral, master's, to bachelor's degrees among its members.The Board of Directors establishes four specialized committees: the Strategic Committee, Nomination Committee, Audit Committee, and Compensationand Assessment Committee, each consisting of ?ve members, to ensure the e?cient operation of the corporate governance structure. The Company speci-?es the convening and procedures for the Shareholders' Meeting, Board Meeting, and Supervisory Board Meeting in accordance with the Shareholders'Meeting Rules, Board Meeting Rules, and Supervisory Board Meeting Rules, respectively, to safeguard shareholders' rights to information, participation, andvoting at the Shareholders' Meeting.

The Company places great emphasis on investor relations management, strictly adhering to the requirements of the "Regulations on the Disclosure ofInformation by Listed Companies." It has established relevant systems such as the "Major Information Internal Reporting System" and the "InvestorRelations Management System" to ensure the timeliness, accuracy, completeness, and fairness of information disclosure. The Board of Directors over-sees the information disclosure work, with the Board Secretary speci?cally responsible for coordinating and organizing information disclosure a?airs toensure that all information is disclosed truthfully, completely, accurately, and promptly.During the reporting period, the Company achieved a disclosure level of B, releasing ? regular reports and ??? interim reports externally. Additionally, itheld ? performance brie?ngs and actively responded to ??? investor inquiries through an investor interaction platform. Furthermore, the Companydiligently collected and organized information from relevant stakeholders to ensure e?ective communication, disclosing information truthfully andcomprehensively through emails and regular reports.The Company designates Securities Times, Shanghai Securities News, China Securities Journal, and Shenzhen Stock Exchange as o?cial channels forinformation disclosure, maintaining good interaction with investors through diverse communication methods. During the reporting period, the Compa-ny hosted ?? investor visits, providing comprehensive investment information, legally safeguarding investors' legitimate rights, and facilitating thediscovery and recognition of the Company's investment value in the capital market.

To further strengthen its governance structure, the Company has formulated the Implementation Rules of the Board Compensation and Assessment Com-mittee to ensure transparency in compensation management. The Compensation and Assessment Committee is responsible for overseeing the compensa-tion incentive mechanisms for directors and senior executives. During the reporting period, the Company continuously improved the performance evalua-tion system for directors and senior executives, linking performance evaluations with compensation to e?ectively incentivize management to enhancecorporate performance.During the reporting period, the Company convened the SupervisoryBoard meetings ? times, the Board of Directors meetings ? times, the AuditCommittee meetings ? times, and the Compensation and AssessmentCommittee meetings ? times as planned, ensuring the e?cient operationof the governance structure. The Company continuously optimizes itscorporate governance structure, enhances internal management andcontrol systems, further improves governance standards, and promotesthe steady development of the company.

Strategy CommitteeNomination CommitteeAudit CommitteeRemuneration and Evaluation Committee

Board meetings

times

Board of Directors meetingstimes

Audit Committeemeetingstimes

Compensation and AssessmentCommittee meetings

times

The Operation and Governance of the Tripartite Meeting

Investor Relations Management

1112

Supervisory Committee

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing

02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance

01Excellent

Board of DirectorsShareholders’ General Meeting

NKY actively implements a sustainable development strategy, dedicated to integrating environmental, social, and governance (ESG)principles into corporate operations and management to enhance governance comprehensively.In June ????, the Company o?cially joined the United Nations Global Compact (UNGC), with the Chairman signing the commitment to theUNGC's Ten Principles on human rights, labor, environment, and anti-corruption. This action signi?es the Company's commitment to sustain-able development. The Company communicated this commitment to employees and stakeholders through its o?cial website and WeChatpublic account, ensuring the widespread adoption of ESG principles and facilitating the e?ective implementation of corporate responsibilities.The Company adheres to the green and sustainable development concept, considering environmental protection as a crucial component ofcorporate social responsibility. Continuously enhancing resource e?ciency, it drives synergistic development between the enterprise and theenvironment. Simultaneously, the Company highly values the needs of stakeholders such as investors, customers, employees, and partners,actively listening to and addressing ESG issues of concern. Through various channels including regular communication meetings, surveys, andonline platforms, the Company maintains close connections with stakeholders to ensure transparent information ?ow and smooth interac-tion. Based on stakeholder feedback, it optimizes ESG management strategies to establish long-term and robust cooperative relationships.

StakeholdersExpectations and DemandsProvide a response

Government

Compliance operationsLawful tax paymentEnvironmental protection

Compliance with laws and regulationsProactive tax paymentLow-carbon developmentPromotion of green manufacturingEnhancing Corporate GovernanceTimely Disclosure of InformationDividend Returns

Enhancing internal control capabilitiesRegular information disclosureSafeguarding shareholder rightsStrengthening ESG managementPrivacy protectionAfter-sales serviceProduct quality and safety

Protecting customer privacy and securityConducting customer satisfaction surveysImplementing stringent quality managementOptimizing after-sales services

InvestorsClientSupplier

Environment

EmployeeCommunity

Environmental IssuesGovernance IssuesSocial issuesEnvironmental managementResource managementPollutant emissions and controlGreen operations

Product quality and safety ｜Research and InnovationCustomer service and satisfaction｜Labor Relations ManagementOccupational Health and Safety｜Employee Training and PromotionSupply Chain Management｜Community contribution

Corporate GovernanceInternal Control and Risk ManagementBusiness ethicsAnti-corruption

The Company has established a scienti?c and substantive issue identi?cation mechanism based on ESG international standards and industrybest practices, in conjunction with its own development strategy and industry characteristics. Through extensive research on internal andexternal stakeholders, the Company updates and optimizes its ESG issue repository annually to ensure the forward-looking and e?ectivenessof the identi?ed issues. In the ?scal year ????, the Company identi?ed a total of ?? key issues covering environmental, social, and governanceaspects. A dual importance assessment method was employed for systematic analysis to ensure that the issues meet both ?nancial signi?-cance requirements and the importance of sustainable development impact.

Select topics that align with the Company'ssustainable development direction byconsidering industry trends, internationalstandards, and relevant regulations.

Topic Selection

Assess the impact and likelihood ofvarious issues through stakeholdersurveys and internal and external expertratings in the ESG domain.

Dual Materiality Assessment

The key issues identi?ed through screening shouldbe submitted to the Board of Directors for approv-al, ensuring alignment with the Company's sustain-able development strategic objectives ande?ectively addressing stakeholders' expectations.

ESG strategy

Stakeholder Engagement

Materiality Issues Assessment

Dual Materiality Assessment Steps

NKY's Dual Materiality Issues Matrix

Low Impact

High

High

Low

Medium ImpactHigh Impact

Environmentalmanagement

Business ethics

CorporateGovernanceInternal Control andRisk ManagementEmployee Training

and Promotion

Pollutant emissionsand control

Product quality

and safety

OccupationalHealth and SafetyResearch and

InnovationResourcemanagementGreen operations

Supply ChainManagementCommunitycontribution

Labor RelationsManagement

Anti-corruption

Customer service and satisfaction

Impact Materiality to the Economy, Society, and Environment

Financial Materiality to the Company

1314

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing

02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance

01Excellent

ESG Empowerment:

Enhancing Robust Governance

Supply chain managementMutual bene?tCommon developmentEstablishing career development pathwaysO?ering competitive compensation and bene?tsEnsuring occupational healthSafeguarding employees' rights.

Energy conservation, emission reductionEcological protection.Social welfare

Building a responsible supply chainAdhering to business ethicsFostering collaborationCommunication to enhance supply chain sustainability

Energy conservationGreen o?ce practicesCarbon footprint reductionAdvancement of green manufacturing processes.

Enhancing internal management systemsEnsuring employee work-life protectionStrengthening occupational health initiativesEstablishing employee communication feedback mechanismsO?ering professional training and development opportunitiesPhilanthropic DonationPromoting Community Health and Sustainable Development

Agenda Con?rmation and Approval

Immediate supervisorDepartment headGroup Audit Department (Jiao.bj@nkygroup.cn)Group Legal Department (lu.l@nkygroup.cn)

Telephone number: ????-???????.Fax number: ????-???????.Website: www.boai-nky.com.E-mail: board.sec@nkygroup.cn.Contact Address: ???? East Culture Road, Boai County, Jiaozuo City, Henan Province.

Integrity and Compliance:

Building a Trustworthy DefenseNKY has consistently adhered to the principle of operating with integrity, strictly complying with the Basic Norms for Enterprise Internal Control and itssupporting guidelines, as well as relevant laws and regulations. The Company continuously enhances its clean and compliant system to ensure thelegality and transparency of its operations. During the reporting period, there were no incidents of corruption, bribery, fraud, or unfair competitionwithin the Company.The Company has established a comprehensive internal control system, formulated and implemented management systems such as Internal ControlSystem, "、Internal Audit Management System, and Internal Control Process Compilation. By combining daily supervision and special supervision methods,the Company continuously optimizes management processes and internal control mechanisms to enhance risk prevention capabilities. In ????, the Compa-ny conducted a total of ?? internal audits, identi?ed ?? issues, formulated corrective measures, completed the recti?cation, further solidifying the foundationof corporate governance.To strengthen the compliance culture, the Company has issued the Code of BusinessConduct, which was disseminated to all employees in October ????. The ESG Directorconducted on-site and online presentations. The aim was to ensure that every employ-ee comprehends and adheres to the relevant requirements. Additionally, during thethird-quarter working meeting of the medical sector, the Company provided a brie?ngon the code to the group's decision-makers and senior management in the medicalsector. This initiative aimed to enhance the awareness and enforcement of compliancemanagement among senior executives.

Internal control system

NKY strictly adheres to domestic and international anti-money laundering laws and regulations to ensure that its operations are not used formoney laundering purposes. The Company prohibits any form of money laundering, including direct or indirect involvement in money laun-dering activities, assisting business partners in money laundering, and concealing or failing to report suspicious transactions. Additionally, theCompany encourages employees to actively study relevant laws and regulations, enhance their awareness of anti-money laundering, andpromptly report any abnormal transactions or suspected money laundering activities to the Company to safeguard the legality and compli-ance of its operations.

Anti-money laundering

NKY places great emphasis on the compliance management of business partners. The Company rigorously selects suppliers, agents, and otherpartners with a solid foundation in compliance management and a good compliance track record to ensure alignment with the Company'svalues and compliance principles during collaboration. The Company prohibits any collusion with partners in illegal or unethical activities andrequires employees to actively promote the Company's compliance principles when establishing business relationships, ensuring partnersmeet the Company's compliance standards. Throughout the collaboration, the Company continuously monitors partners' business ethics andpromptly reports any illegal or inappropriate behavior to management to uphold a fair and just business environment.

Compliance Requirements for Business Partners.

To enhance the Company's compliance management system, NKY has established a diversi?ed reporting channel for violations. Employeescan report misconduct through email or phone and receive strict information protection. The Company encourages employees to reportnon-compliant behavior in good faith and strictly prohibits any form of retaliation. For substantiated violations reported, the Company willhandle them in accordance with laws, regulations, and internal rules. At the same time, appropriate sanctions will be imposed for malicious orfalse reports to ensure the fairness and e?ectiveness of the reporting mechanism.

Non-compliance Reporting and Anti-retaliation Mechanisms

The Company adheres to the principle of fair competition, strictly prohibits any unfair competition and monopolistic behaviors, and complies rigorously withapplicable laws and regulations. The Company explicitly prohibits the disclosure of pricing, business partner dealings, operational arrangements, and otherinformation to competitors, aiming to prevent the acquisition of competitors' business information through improper means, ?rmly opposing maliciousdefamation of competitors or dissemination of false information. Furthermore, the Company prohibits participation in industry monopoly agreements orabuse of market dominance to ensure the fairness of market competition. Additionally, the Company clearly de?nes unfair competition practices, includingbut not limited to counterfeiting or imitating others' goods, exaggerating or distorting product attributes, infringing on trade secrets, damaging competitors'reputations, and other illegal or unethical business behaviors, ensuring the compliance and fairness of business activities.

Anti-unfair Competition and Monopolies

The Company consistently upholds integrity in its operations, strictly prohibiting commercial bribery and con?icts of interest, requiring employees to securebusiness opportunities through high-quality products, outstanding services, and good social responsibility. Additionally, the Company advocates for acautious approach in commercial dealings to ensure fair and transparent transactions. Employees are expected to promptly report any violations of theanti-bribery regulations to the Company's management.

Anti-commercial Bribery and Con?ict of Interest Management

Reporting Channels

Conduct a dissemination of the Code ofBusiness Conduct and the Con?dentiality Policy

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Information Security:

Comprehensive Risk PreventionNKY strictly adheres to national and regional laws and regulations such as the Personal Information Protection Law and the General DataProtection Regulation, as well as compliance requirements from regulatory authorities, ensuring the standardization and systematizationof information security management. During the reporting period, the Company did not receive any complaints regarding the infringe-ment of customer privacy, nor did it experience any incidents of customer privacy violations or data security breaches, thereby providingtrustworthy information security assurance to customers and partners.

The Company has established a comprehensive information security management system and formulated regulations such as the InformationSecurity Management System, General Guidelines for Information Security Work, Equipment Management Regulations, Data Center Manage-ment Regulations, and Information Security Emergency Plan to enhance information security protection at the regulatory level, ensuring thesecurity and con?dentiality of customer and business data.In the process of information security planning and development, the Company strictly adheres to the "three synchronous" principle, whichinvolves synchronously planning, constructing, and investing in information security alongside business development to ensure the foresightand e?ectiveness of security measures. Additionally, the Company establishes a security management system based on the information secu-rity protection system to enhance information security risk prevention capabilities, providing robust safeguards for stable business operations.

Information Security Strategy and Compliance Management

The Company adheres to the information security policy of "safety ?rst, prevention-oriented, equal emphasis on management and technology,and comprehensive prevention." It has established a security protection strategy of "partitioning, grading, and zoning," and constructed a"dual-machine dual-network" architecture to achieve controllable, manageable, and controlled information security. The Company employs amulti-layered defense strategy to e?ectively address security threats such as hacker attacks, virus intrusions, malicious code, and prevent dataleakage, information loss, and system failures, ensuring the stable operation of business systems.The Company strictly adheres to applicable privacy, data protection, and information security laws and regulations, collecting and utilizingonly necessary employee and customer data for legitimate purposes, implementing stringent measures to safeguard personal privacy. Unau-thorized disclosure, sale, or transfer of employee and customer privacy data is explicitly prohibited, with all employees required to ensureinformation security to prevent data breaches. Additionally, the Company enhances protection of customer and order information through theSAP Customer Master Data Management system, utilizing data encryption systems, vulnerability scanning systems, and external Security Oper-ations Centers (SOC) to enhance data security.

Information Security Management System

In the era of informatization, information security has become an indispensable aspect of corporate development. The Company has formulat-ed multiple contingency plans to address potential security incidents, including but not limited to network attacks, virus infections, databreaches, system failures, and other situations. The establishment and implementation of contingency plans not only enhance the company'sinformation security protection capabilities but also improve employees' safety awareness and ability to respond to emergencies, ensuringbusiness continuity and stability.Furthermore, the Company places a high emphasis on employee information security training, employing various methods to ensure employ-ees have a comprehensive understanding of information security knowledge and skills. Through regular training and practical exercises, theCompany enhances employees' ability to respond to information security incidents, reinforces a collective awareness of information securityresponsibilities, and provides robust protection for the Company's business operations.

Information Security Emergency Management and Training

The Company has established a comprehensive information security infrastructure, employing multiple technological measures to enhancesystem security, including but not limited to:

Firewall SystemBlock high-risk ports to prevent external network attacks.

Behavioral AuditMechanism

Restricting access to illegal websites to prevent malicious attacks.

Network access control

Ensure unauthorized devices cannot access the Company's internal network,strengthening security boundaries.Based on security requirements, the Company's network is divided into four levels - open, internal,important, and core. The infrastructure team is responsible for access management to ensure that ITdevices for di?erent purposes are connected to the corresponding network based on security levels,thus reducing security risks.Hierarchical networkmanagement

Data Encryption Training

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PRODUCT QUALITY AND SAFETY ·

RESEARCH AND INNOVATION ·CUSTOMER SERVICE AND SATISFACTION ·

SUPPLY CHAIN MANAGEMENT ·

Aligning the United Nations Sustainable Development Goals

NKY has established a comprehensive ESG management system covering quality management,customer service, technological innovation, and green supply chain. The Company has set up aquality assurance network covering the entire product lifecycle, enabling e?cient response tocustomer demands and precise risk tracing through intelligent management systems. By drivingindustrial upgrades through cutting-edge technology research and development, NKY has formedan innovative ecosystem with industry benchmark signi?cance. Simultaneously, it practices theconcept of green supply chain, collaboratively promoting environmentally friendly production withupstream and downstream partners, achieving the organic integration of commercial value andsocial bene?ts in the path of sustainable development.Quality FirstCreating Excellent Products

Customer-Centric

Optimizing Service Experience

Technological Empowerment

Stimulating Innovation

Green ProcurementBuilding a Sustainable Supply Chain

Lean ManufacturingDeveloping New Quality Productivity

Quality First:

Creating Excellent Products

NKY has consistently adhered to the principle of quality ?rst, strictly following national laws such as the Quality Law and internationalquality management system requirements like ISO ????. The company uses the Quality Manual as the basic standard for quality man-agement to comprehensively enhance its quality management capabilities. The Company has established complete ISO ????:???? andISO ?????:???? quality management systems and actively implements quality improvement and risk control measures to ensure thestability and safety of product and service quality. In ????, the Company did not experience any signi?cant quality liability incidents,did not violate any health and safety regulations or voluntary codes related to products and services, fully demonstrating the Compa-ny's rigorous quality management system and compliance commitment.The Company has established a comprehensive quality management system that ensures product quality from strategic commitment, stan-dardized processes, continuous improvement to system e?ectiveness validation. The company's management team bears direct responsibili-ty for formulating quality development strategies and resource allocation, convening regular quality review meetings to ensure the achieve-ment of quality objectives. The Company has set up a Regulatory A?airs Department to dynamically track industry regulatory updates, ensur-ing that the quality management system complies with international standards such as Good Manufacturing Practice (GMP), ICH Q?, U.S. CFRPart ???&???, EU GMP Part II, EXCiPACT, and actively participates in industry associations to promote the establishment and optimization ofindustry quality standards.

Quality Management System Development

Pharmaceuticals

FoodLithium Batteries

CosmeticsToothpaste

Drug Manufacturing LicenseICH Q721 CFR Part 210&211EU GMP Part IIISO9000EXCiPACT GMP forPharmaceutical Excipients

Good Manufacturing Practice forPharmaceutical Products (2010 Edition)

Food Production LicenseGeneral Hygienic Practice forFood Enterprises (GB 14881-2013)General Hygienic Practice forFood Additive Production (GB 31647-2018) Supervision and Administration Regulations

on the Primary Responsibility forFood Safety by EnterprisesISO 22000 Food Safety Management System

Halal Certi?cationKosher Certi?cation

IATF 16949 Quality Management Systemfor the Automotive Industry

Good Manufacturing Practice forCosmetics (2022 Edition)

NKY has obtained Halal certi?cation

NKY obtains EXCiPACT GMPcerti?cation for pharmaceuticalexcipients

NKY Pharmaceuticals IATF ?????:

???? certi?cation for automotiveindustry quality management system

Heer Medical ISO ?????:

???? Medical Device QualityManagement System Certi?cation

Heer Medical ISO ????:???? QualityManagement System Certi?cation

Eastwin ISO ????:???? QualityManagement System Certi?cation

Eastwin ISO ?????:???? Medical DeviceQuality Management System Certi?cation

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NKY ISO????? Food SafetyManagement System Certi?cationNKY ISO???? Quality ManagementSystem Certi?cation

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Customer-Centric:

Optimizing Service Experience

The Company is committed to optimizing its customer service system, enhancing customer experience, ensuring stable product qual-ity, and continuously improving customer satisfaction. By establishing e?cient and transparent customer complaint handling mecha-nisms and rigorous product recall procedures, the Company ensures timely responses to customer feedback and safeguards productsafety and compliance through a well-developed quality management system.The Chemical Division has established a comprehensive customer complaint management process, designating the QA Manager as the Com-plaints Supervisor responsible for coordinating and addressing all complaint matters, and regularly submitting an annual complaint report tothe management. The Company adheres to e?cient, transparent, and objective complaint handling principles to ensure that customer needsare fully addressed.

Customer Service and Complaint Management

The Company ensures product quality stability and safety through a rigorous quality control process, achieving end-to-end traceability man-agement from raw materials to ?nished products.

The Company establishes a strict supplier admission and evaluation mechanism to ensure the reliability of raw materialsand components.

The Company integrates safety principles throughout the entire product lifecycle by implementing measures such as risk prevention design,rigorous testing, and user education to ensure the health and safety of products.

Product Lifecycle Management

Supplier Management

All raw materials and packaging materials must undergo detailed testing to ensure compliance with quality standards.Incoming Quality Control

Key quality control points are set up at each stage of production, utilizing advanced testing equipment for real-time moni-

toring to ensure product quality stability.Production Process Control

All products must undergo comprehensive functional and performance testing before leaving the factory to ensure compli-

ance with international standards, customer requirements, and relevant regulations.Finished Product Inspection

The Company regularly commissions independent testing by third-party organizations such as SGS, BV, etc., to ensure

products meet global market access standards.External Testing andCerti?cation

The Company establishes a sound quality traceability system to achieve full-process tracking of products from raw materi-

als to ?nished products, enhancing problem analysis and accountability tracing capabilities.

During the product development and production process design phases, the Company utilizes DFMEA/PFMEA (Failure Modeand E?ects Analysis) methods to identify potential quality risks and formulate risk mitigation measures. Simultaneously, theCompany conducts foreign object contamination risk assessments on production lines, establishes foreign object preventionand control plans to ensure product safety and controllability.

Quality Traceability

Product Quality Testing Throughout the Lifecycle

Risk Assessment andPrevention

The Company conducts comprehensive safety testing, including electrical safety, mechanical safety, and environmental safety,before launching products into the market to ensure compliance with global market requirements.Safety Testing andCompliance Assurance

The Company provides users with detailed product usage guides and safety warnings to ensure correct product usage.Additionally, an e?ective emergency response mechanism is established to swiftly address quality issues and safety incidents,minimizing their impact.

User Education andEmergency Response

Product Safety Assurance Mechanism

Complaint Handling and Recording

All complaints are immediatelyreported to the QA department bythe ?rst contact personnel, whothen complete the "Customer Com-plaint Information Form" to meticu-lously document the complainant'sinformation, product details, com-plaint content, and relevantevidence materials.

Complaint Categorization and Investigation

The QA department classi?es complaints intomajor defects (Level ?), signi?cant defects(Level ?), and minor defects (Level ?), withdi?erent investigation timeframes set for eachlevel. In the case of major defects, the Companymay initiate a product recall process.

Complaint Handling and Feedback

The Company ensures that complaintsare acknowledged and responded towithin ?-? business days, with investiga-tions and resolution completed within ??business days. All investigation ?ndingsare documented in the "Customer Com-plaint List" and included in the annualquality audit to continuously optimizemanagement processes.

The Company strictly complies with relevant laws and regulations, establishes a sound product recall management system, and regularlyconducts simulated recall drills to ensure the e?ectiveness of the recall process. In ????, the Company did not experience any product recallincidents due to health and safety issues.Product recall management

Conditions triggeringRecall include abnormal product stability analysis, non-compliance with regulatory inspections, and failure to meet GMP requirements in theproduction process.Recall Classi?cation and Timelines

Recall levels are categorized into Level ? recall (to be completed within ? day), Level ? recall (to be completed within ? days), and Level ? recall(to be completed within ? days) based on risk assessment.

Recall Execution and TrackingDuring the recall period, the Company establishes a dedicated team led by the general manager, with various relevant departments collabo-rating to ensure the timeliness and e?ectiveness of the recall.

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The Company has formulated an annual quality training plan and actively carried out quality training activities to enhance employees' overallquality awareness and culture through concentrated learning, thereby strengthening the foundation of quality management.

Technological Empowerment:

Stimulating Innovation

The Company consistently adheres to technology-driven development, enhancing technologi-cal capabilities through optimizing product structures, recruiting high-end talent, andstrengthening R&D management to advance towards high-end markets. Simultaneously, theCompany has established a comprehensive technology innovation management systemcovering project initiation, fund management, talent development, intellectual property man-agement, ensuring e?cient R&D operations. Leveraging quali?ed platforms like engineeringlaboratories, NKY Pharmaceuticals is designated as a national high-tech enterprise, continu-ously bolstering its core competitiveness.The Company has established a comprehensive research and development innovation management system, covering the entire process fromdemand analysis to product release, ensuring the e?cient and orderly progress of all R&D activities. The organizational structure of the R&Dteam is clear, with well-de?ned responsibilities. Through close collaboration with departments such as marketing and production, the smoothprogress of R&D projects is ensured. The Company has a dedicated R&D center equipped with advanced laboratories and equipment to ensurethe smooth implementation of product development and technological innovation.

Research and Development Innovation Management System

Product Identi?cation ManagementThe style of product labels is determined by design documents, including key information such as product name, model, batch number,production date, manufacturer information, etc., to ensure product traceability.

Electronic Traceability Systemhe ERP management system provides electronic product identi?cation, covering inventory, status, shipping, returns, and other information,ensuring the full lifecycle traceability of products.

Compliance Assessment

Compliance Assessment: The Chemical Division's products have obtained EU REACH registration (number ??-??????????-??-????) andcomply with WEEE labeling and EPD environmental product declaration requirements.

The Chemical Division strictly adheres to the Identi?cation and Traceability Management Procedure to ensure the integrity and traceability ofproduct information. Key measures include:

During the reporting period, the Company did not experience any product and service information or labeling violations, nor did it receive anypenalties or warnings for marketing communication violations. In the future, the Company will continue to enhance its customer servicesystem, strengthen product quality management, and improve customer experience through high-standard compliant operations.

Product Information Compliance Management

High-tech Enterprise Certi?cate

The Company enforces strict systems in research and development management, including project approval, ?nancial management, andtalent development, ensuring optimal resource allocation to maximize technological innovation. In terms of intellectual property, the Companyhas established a dedicated management entity to ensure e?ective protection of research and development outcomes. Moreover, the Compa-ny has been certi?ed as a high-tech enterprise, collaborating with multiple research institutions to further advance technological innovation.The Company promotes e?cient advancement in technological innovation through the following measures:

Research and Development Innovation Management System

Patent Performance

Total Number ofInvention Patents

Items

Total Number ofInvention PatentsItems

Total Number of Utility Model Patents

Items

New Utility Model Patents

Items

Total Number of Design Patents

Items

New Design Patents

Items

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De?ne R&D objectives encompassing product innovation, process optimization, and market expansion.Strategic Planning

Establishing a fair and competitive compensation and reward system to stimulate the motivation of the R&D team.Incentive Mechanism

Establish a dedicated intellectual property management entity to safeguard the security of patent achievements.Intellectual Property Protection

Allocate R&D funds, talent, and equipment rationally to enhance research and development e?ciency.Resource management

Implementing a rigorous quality control system to comprehensively manage research and development risks.Quality and Risk ControlESG Key Performance Indicators

Scienti?c Progress AwardClass III Medical Device Registration Certi?cate

The Company actively establishes deep cooperative relationships with universities and research institutions, Eastwin particularly collaboratingwith Zhejiang University in jointly training postgraduates and conducting product research and development. To further promote technologi-cal innovation, the Company has established a specialized Research and Development Center spanning ?,??? square meters, encompassingmultiple laboratory spaces such as metrology laboratories, instrument laboratories, PCR reagent validation laboratories, and equipped withadvanced instruments to provide solid support for research activities.In the research and development domain, the Medical Division has achieved signi?cant breakthroughs by successfully developing a fully auto-matic liquid-based thin-layer cell preparation staining integrated machine, P??Ki?? scanning analysis software, and an arti?cial intelligence AIcancer screening and diagnostic system, among other innovative products. The Company has obtained multiple patents and professionalquali?cations, including Class II and Class III medical device registration certi?cates and production licenses, further solidifying its leadingtechnological position in the industry.On a societal level, technological innovation has driven the creation of approximately ??? job positions, facilitated the collaborative develop-ment of the upstream and downstream industrial chains, and promoted regional economic prosperity. Simultaneously, innovative productsdeveloped by the Company such as the P??Ki?? scanning analysis software and the arti?cial intelligence AI cancer screening and diagnosticsystem have not only enhanced medical diagnostic e?ciency but also improved the accuracy of disease screening, making signi?cant contri-butions to public health.The Company has made signi?cant progress in various ?elds through continuousresearch and development investment, successfully launching several competitiveproducts, advancing industry technological standards, particularly in the innovationand development of the medical and health sector. Additionally, the Company hasbeen awarded provincial and municipal-level scienti?c and technological advance-ment awards, and has obtained multiple Class III medical device registration certi?-cates to ensure compliance with market access standards.

The Economic and Social Bene?ts of Technological Innovation

The Company places a high emphasis on scienti?c ethics, consistently adhering to rigorous scienti?c ethical standards, respecting user priva-cy, safeguarding data security, and ensuring all research activities are conducted in a legal and compliant manner. The Company providesscienti?c ethics training to research and development personnel to ensure that patient rights and health are always prioritized during theresearch and development process, thus mitigating the risk of technology misuse.In the course of scienti?c research, the Company strictly adheres to the following ethical principles:

During the reporting period, the Company strictly adhered to technological ethics standards, with no violations occurring. Regular ethics train-ing sessions were organized to enhance employee compliance awareness, ensuring that research and development activities meet ethicalstandards.

Ethics and Compliance Management in Technology

Respect user privacyEnsure anonymization of research and development samples to prevent data leakage.All sample data is stored centrally by the Company, and external disclosure is strictly prohibited.All clinical trials must undergo ethical review by an Institutional Review Board (IRB) and obtain approval.Enhancing the accessibility of medical resources to bene?t more patients from technological advancements.

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Data securitymanagementClinical ResearchComplianceEquity andAccessibility

Green Procurement:

Building a Sustainable Supply ChainThe Company consistently upholds the green supply chain concept, strictly adhering to sustainable development principles in suppli-er management to promote green procurement and environmentally friendly production. Our supply chain management systemencompasses supplier admission processes, environmental and social responsibility assessments, as well as continuous improve-ment throughout the product life cycle to ensure products and services meet environmental standards and drive sustainable devel-opment of the supply chain.

Supply chain management is a crucial aspect in ensuring the stable operation of an enterprise. The Company enhances product safety andquality, as well as the stability and sustainability of the supply chain, by establishing a robust procurement and supply chain managementsystem and by strengthening the evaluation and assessment of suppliers. The Company has formulated the "Supplier Management System,"which outlines requirements such as information acquisition, quali?cation review, selection, retention, risk assessment, and scoring criteria forsuppliers. Annually, the Company evaluates suppliers and assigns ratings based on the "Supplier Risk Assessment Form," categorizing themaccording to the evaluation results. During procurement, the Company strictly limits the use of high-energy-consuming products. In equip-ment and spare parts procurement, the Company prohibits the use of nationally banned high-energy-consuming pumps and motors, ensuringthat purchased equipment contributes to reducing energy consumption.The supplier selection process involves several key steps to ensure that new suppliers meet the Company's quality, environmental, and socialresponsibility requirements. Firstly, suppliers are required to submit relevant quali?cation documents, such as business licenses and qualitysystem certi?cates. Subsequently, suppliers provide samples for testing to ensure product compliance with quality standards. Next, theirproduction capacity and compliance are evaluated through small-scale trials and on-site audits. Upon successful audit, suppliers enter into aquality assurance agreement with the Company and are o?cially included in the list of approved suppliers.

Supplier Quali?cation Process

To further strengthen suppliers' social responsibility, the Company has formulated the SupplierCode of Conduct, covering ?ve key areas: labor standards, health and safety, environmentalprotection, business ethics, and management systems. These guidelines are based on the ISO????? Social Responsibility Guidelines and the SA???? Social Responsibility International Stan-dard, aiming to ensure that suppliers comply with laws and regulations, implement environmen-tal protection measures, safeguard employee rights, and adhere to principles of fair trade in theiroperational processes.During the supplier site audit phase, the Company places particular empha-sis on assessing Environmental, Social, and Governance (ESG) factors.Suppliers must align with the Sustainable Development Goals (SDGs) andimplement necessary environmental protection measures in their produc-tion processes, such as reducing emissions and promoting energy e?cien-cy. Encouragement is given for suppliers to adhere to internationally recog-nized industry standards, with preference given to those demonstratingstrong Corporate Social Responsibility (CSR) performance when meetingthe requirements.

NKY Suppliers Code of Conduct

The Company strictly requires suppliers to implement e?ectiveenvironmental protection measures during the productionprocess. This is achieved through establishing a Supplier Riskand Opportunity Identi?cation Evaluation Form to analyzepotential risks in the supply chain and propose correspondingmitigation measures. Suppliers are mandated to comply withenvironmental regulations, implement energy-saving andemission reduction measures, reduce greenhouse gas emis-sions, and prevent environmental pollution.Through these green procurement measures and strictrequirements for suppliers, the Company is committed tocollaboratively building a sustainable industrial chain withboth upstream and downstream partners in the supply chain,promoting dual bene?ts for society and the environment.During the reporting period, the Company's procurementexpenditure from local suppliers accounted for ??.??%,demonstrating the Company's support for the local economyand sustainable development.By establishing a comprehensive supplier evaluation systemand risk management mechanism, the Company ensures thatevery link in the supply chain ful?lls corporate social responsi-bility and contributes to achieving green development goals.

Synergistic Promotion of Environmentaland Social Responsibility

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NKY consistently integrates sustainable development as a crucial component of its long-termcorporate strategy, advancing core initiatives such as environmental management, e?cientresource utilization, pollution prevention, and low-carbon transformation. The Company continu-ously enhances its environmental management system, strengthens energy and resource e?ciency,rigorously adheres to emission standards, and accelerates green and low-carbon transformation tomitigate ecological impacts. In addition, the Company proactively aligns with the national carbonpeaking and carbon neutrality goals, enhancing its green development capabilities through energyconservation, emission reduction, clean production, and circular economy measures.

Green Development

Empowering a Low-Carbon Future

Green OperationsProtecting Clear Water and Green Mountains

Low-Carbon TransformationSupporting Climate Neutrality

ENVIRONMENTAL MANAGEMENT ·RESOURCE MANAGEMENT ·POLLUTANT EMISSIONS AND CONTROL ·

GREEN OPERATIONS ·

Aligning the United Nations Sustainable Development Goals

Green Operations:

Protecting Clear Water and Green MountainsThe Company prioritizes environmental management as a core issue for sustainable development, establishing asystematic and standardized environmental management system to ensure the rooted implementation of environ-mental responsibilities. NKY Pharmaceuticals have obtained ISO ????? certi?cation for our environmental manage-ment system and developed a set of management systems covering responsibility allocation, facility management,risk alert, emergency response, and other dimensions to ensure the e?ective operation of pollution prevention mea-sures, reduce environmental risks, and enhance overall environmental performance. We adhere to transparentlydisclosing environmental information in accordance with the law, actively accepting social supervision, and are com-mitted to building a transparent and sustainable environmental management system.To strengthen environmental management, the Company has established a clear organizational structure to ensurethat personnel at all levels have well-de?ned responsibilities and collaborate to advance environmental protectione?orts. The General Manager, as the primary person responsible for environmental work, is in charge of deci-sion-making and resource allocation. The Environmental Protection Department coordinates the formulation ofmanagement policies and supervises their implementation, while various functional departments and productionworkshops implement speci?c measures. The "Environmental Protection Job Responsibility System" further elabo-rates on the division of responsibilities, ensuring that from management to ordinary employees, all have clearlyde?ned environmental obligations, ensuring that environmental responsibilities are integrated throughout thevarious aspects of the Company's operations.

Environmental Management System

In the face of potential environmental risks, the Chemical Division adheres to a dual emphasis on risk prevention and emergency response, having formu-lated a detailed Emergency Response Plan for Sudden Environmental Incidents, which has been ?led with the local ecological environment bureau. Theplan covers key aspects such as environmental risk identi?cation, early warning mechanisms, emergency organizational structure, response procedures,ensuring the enterprise's ability to promptly address sudden environmental incidents and minimize environmental impacts. During the reporting period,???% of the operating sites within the Chemical Division underwent environmental risk assessments. Additionally, the Company conducts regular environ-mental emergency drills annually to test the e?ectiveness of response mechanisms through simulated exercises, subsequently optimizing emergencyplans based on drill evaluations. The Company is equipped with ample emergency supplies and maintains close communication with external rescueunits to ensure e?cient coordination of resources and proper handling of emergency situations.

The Company continues to enhance its environmental risk management by conducting regular inspections and identifying and rectifying envi-ronmental safety issues promptly to ensure the stable operation and compliant management of production facilities. In ????, the Companyidenti?ed and recti?ed the following issues during quarterly environmental risk assessments:

By continuously conducting environmental safety hazard investigations and recti?cations, the Company has e?ectively reduced environmen-tal risks, enhanced environmental management standards, and laid a solid foundation for green and safe production.

Environmental ManagementSystem Certi?cation

General Manager First Person Responsible for Environmental ProtectionConducting Environmental

Protection Work

Work Cooperation andSupervision

Environmental EmergenciesClassi?cation of Environmental Emergencies

Severe

Level I emergency

response

Organizational Structure of Environmental Management

Emergency Rescue CommandCenter Coordinates with Higher-levelEmergency Response Plan.

On Site Command by the Leader ofthe Emergency Rescue Command

Center

On Site Command by themainperson in chargeof the workshop

Factory Emergency Response Procedure

Environmental Safety Hazard Investigation and Recti?cationCase

The identi?cation label onthe boiler exhaust pipedischarge outlet was foundto be missing. A new labelwas promptly replaced toensure the environmentalprotection facility'ssignage is clear and visible.

A leak was discovered atthe ?ange of the heattracing water pipeline inthe GBL tank area.Immediate repair wasorganized to preventenvironmental pollutionand safety hazards.

March 6, 2024May 24, 2024

Before

After

During an inspection,corrosion was detected inthe nitrogen pipeline.Immediate corrosionprevention treatment wascarried out to extend thepipeline's lifespan andreduce the risk of leaks.

Discovery of damaged glassin the ?re box of Workshop???, prompt replacementwith new glass to ensurethe ?re equipment is ingood working condition.

September 9, 2024,December 3, 2024

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04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

Vice President of Safety and Environmental Protection

Environmental Protection AuthorityMinistry of Environmental Protection Environmental

Protection Work AuthorityWorkshop Director Workshop EnvironmentalProtection Workof the First Responsible PersonTeam Leader The ?rst Person Responsible for theEnvironmental Protection Work of the Team

Vice President of Production Support to Cooperate withEnvironmental Protection WorkProduction Management Department Supervision of Productionand Environmental Protection Work of each ProjectEnvironmental Protection AdministratorInspection andSupervision of EnforcementPart-time Safety and Environmental O?cer of the Branch PlantCom-municate the Relevant Policy Requirements of the MinistryofEnvironmental Protection to the Branch Plant

LargeGeneralLevel II emergencyresponse

Level III emergencyresponse

Before

After

Before

After

The Chemical Division strictly adheres to the Environmental Protection Facility Operation Management Systemto ensure synchronized operation of pollution control facilities and production equipment, achieving stable andcompliant emissions of pollutants. The maintenance of environmental protection facilities adopts a combinedmodel of self-management and entrusted operation. Operating units are required to establish complete operat-ing procedures and operation records, enhance daily inspections, maintenance, and personnel training toensure the long-term stable and e?cient operation of the facilities. Additionally, the management of onlinemonitoring equipment is integrated into the system to ensure the accuracy and real-time nature of monitoringdata, providing strong support for environmental management.To enhance employees' awareness and practical skills in environmental protection, the Chemical Divisioncontinuously deepens its environmental training system by regularly conducting training courses covering envi-ronmental regulations, pollution prevention and control technologies, and environmental incident response.Through case studies, simulations, and other methods, employees' understanding of environmental manage-ment requirements is improved, enabling them to strictly adhere to environmental norms in their actual work.This equips them to promptly take correct measures in emergency situations, thereby reducing environmentalimpacts.To enhance the Company's environmental management level and strengthen employees' awareness oflegal compliance, the Environmental Protection Department organized an environmental laws and regula-tions training on March ??, ????, in accordance with the ???? Environmental Protection Department train-ing plan requirements. This training covered four core topics: an overview of environmental laws and regu-lations, the environmental legal framework, the Environmental Protection Law of the People's Republic ofChina, and the Regulations on the Management of Pollutant Discharge Permits. Due to the dispersed worklocations of the participants, the training was conducted through self-study PowerPoint presentationsfollowed by related exams. Through this training, employees further grasped the requirements of environ-mental laws and regulations, enhanced their compliance awareness, and laid a solid foundation for thestandardization of the Company's environmental management practices.

The Chemical Division consistently adheres to the concept of e?cient resource utilization, establishing a comprehensive energy and resource manage-ment system to drive production operations towards a green, low-carbon, and e?cient direction. By optimizing production processes, enhancingresource recycling rates, and promoting the use of renewable materials, we continuously improve resource productivity, reduce environmental impact,and achieve sustainable development.In the domain of energy and resource management, the Company has established a systematic management mechanism, strictly implementing energyconservation and emission reduction policies, and continuously optimizing the e?ciency of energy and resource utilization. The Chemical Division hasestablished an energy management system and formulated regulations such as the Energy Management System and Energy Metering ManagementSystem. Additionally, a energy-saving leadership group has been established to drive the Company's energy-saving e?orts. This leadership group has ano?ce located within the production management department, responsible for daily energy-saving management tasks. The Company has set up anenergy consumption monitoring and assessment system covering the entire industry chain, integrating energy management into the performance evalua-tion mechanism of each business unit. Through energy assessments, reward mechanisms, and accountability systems, the e?ective implementation ofenergy-saving measures at the subsidiary level is ensured.

Resource e?ciency

Establish a sound foundation for energy management, standardize energy metering, quota management, and statistical systems, rely on awell-developed energy consumption statistical ledger, strictly adhere to national statistical standards, ensuring the systematic and scienti?ccollection, aggregation, and analysis of data.Enhance energy consumption monitoring in the production process, optimize data management using information technology, establish adynamically updated energy consumption statistical system to improve the accuracy and real-time nature of energy management.To ensure the integrity and accuracy of energy statistical data, evaluate energy-saving e?ectiveness through internal checks, third-partytesting, audits, and other means. Re?ne assessment indicators, implement them at the grassroots level, strengthen energy-saving accountabil-ity, and ensure the e?ective achievement of energy-saving goals.

In water resource management, the Chemical Division has established the Water Conservation Management Regulations and the Water Con-servation Reward and Penalty System. NKY adopts a dual guarantee model of groundwater and municipal water supply to ensure stable waterresource availability. Additionally, it enhances water usage management through measures such as total water consumption control, processoptimization, and increased wastewater recycling e?ciency to reduce the water consumption per unit of product. Furthermore, the Companyactively engages in local government water resource management, collaborates with relevant departments to optimize water resource alloca-tion, and addresses water scarcity challenges in a more e?cient manner.In the ?scal year ????, the Company disclosed a total water consumption of ???,??? tons, limited to the Boai plant. In ????, a comprehensivereview and statistical analysis of water consumption across all domestic wholly-owned subsidiaries was conducted. The total water consump-tion of the Boai and Zhongzhan plants amounted to ???,??? tons, representing a decrease of ??,??? tons compared to ????. Despite a ??.??%year-on-year increase in PVP production volume, the Company achieved a signi?cant reduction in total water consumption. This reductionwas attributed to the improved reaction e?ciency at the Zhongzhan plant and the e?ective decrease in water consumption per unit of prod-uct, showcasing the Company's continuous enhancement in water resource management and green operational practices.

In the production process, each subsidiary adopts di?erent resource optimization measures based on its own business characteristics. Gener-gy Bio-Technology implements a green design concept, promoting product design schemes that are easy to disassemble, classify, and recycleto increase the use of recycled materials and reduce reliance on virgin resources. Simultaneously, there is an emphasis on increasing the recy-cling of packaging materials such as cardboard boxes and foam boxes for internal circulation use to reduce waste generation. Heer Medicaloptimizes inventory management during production to reduce waste of stagnant materials, improve the utilization rate of consumables in theproduction process, gradually increase the application proportion of renewable materials in packaging and turnover tools, and promotesustainable supply chain development. Eastwin improves adhesive coating processes to achieve controlled glue consumption, reduceresource consumption, and implements the reuse of packaging materials in the after-sales process to further reduce raw material consump-tion and waste emissions.

Energy consumption index statistics, monitoring, and assessment system

In 2024, the Company's energyconsumption is as followsThe energy usage of NKY Group in ????.

ESG Key Performance

The water usage status of NKY Group in ????.

Natural gas consumptioncubic meter15,574,796.5

Purchased of Heat Energymegajoule111,818Purchased electricitykWh68,923,507

Among them: green powerkWh23,000,000

Fuel consumptionton

1.33

Diesel consumptionton

1.71

Water consumptionton

302,991

Water intensityTons per million in revenue

188.62

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2024 Environmental, Social, and Governance Report

Manufacturing02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

Environmental Compliance Awareness TrainingCase

The Company continuously deepens its practices in the circular economy, comprehensively advancing waste recycling and utilization. Heer Medical hasestablished a system for the recycling and remanufacturing of components generated during the production process, disassembling and conducting qualityassessments on withdrawn equipment components, achieving over ??% reutilization. For reagents, the Company has implemented an internal recyclingmechanism, utilizing leftover reagents for testing and validation to further reduce waste. Additionally, Genergy Bio-Technology collaborates with specializedwaste management entities to recycle a portion of waste, transforming it into new raw materials, thereby achieving closed-loop resource utilization. Duringthe reporting period, Heer Medical's utilization of recycled materials reached ??%.The Company accelerates its green and low-carbon transformation in energy conservation and emission reduction by utilizing e?cient energy-saving equip-ment to enhance energy utilization e?ciency. Heer Medical conducts resource audits to identify and optimize energy consumption links in production,reducing energy waste from the source. Simultaneously, Eastwin reduces material scrap rates through quality control measures and establishes a rationalprocurement plan for production auxiliary materials to minimize resource consumption. The Company's subsidiaries actively promote clean production indaily operations to reduce waste generation, strictly enforce waste classi?cation management, and ensure e?cient resource recycling and reuse.

In the fourth quarter of ????, NKY initiated a pilot project in workshop ??? to retro?t the "Spray Drying System Closed-loop Circulation Transforma-tion Project". By installing a tail gas treatment system for the spray dryer, heat recovery was achieved. This system utilizes refrigerant phase changeand heat exchangers to recover waste heat from moisture discharge, increasing the air medium temperature in the drying chamber and reducing theenergy consumption of the spray dryer. The total investment for the project is ?.?? million RMB. Upon achieving the design objectives, it is estimatedthat each workshop can save ???,??? kWh of electricity and approximately ???,??? tons of water annually. In the future, the Company plans to extendthis technological upgrade to all workshops involving the spray drying process to enhance the overall energy e?ciency and facilitate the achievementof energy-saving targets.

In ????, NKY Group actively responded to the carbon peaking andcarbon neutrality goal by utilizing the roof space of NKY (Jiaozuo)Polymer Materials Co., Ltd. (the new plant in Zhongzhan) to install??,??? square meters of solar photovoltaic panels. The annualdesigned power generation capacity exceeds ? millionkilowatt-hours, equivalent to reducing hundreds of tons of carbonemissions, thus supporting the green transformation of the produc-tion process with clean energy.

系统布局图

The spray drying line's exhaust gas modi?cation utilizes a fully enclosedstructure to recover heat from the humid exhaust air through aclosed-loop circulation system. The recovered heat is then used to warmthe dehumidi?ed air. The entire process does not actively release anygases to the external environment, achieving near-zero-emission ener-gy-e?cient drying.

The Company adheres to the green development concept, strictly complies with pollution prevention and control requirements, and the ChemicalDivision has established a systematic wastes governance system covering aspects such as wastewater, waste gas, solid waste, noise, and more. By opti-mizing pollution control facilities, improving monitoring systems, and implementing clean production measures, we continuously reduce emission levelsto ensure that the environmental impact of production operations is minimized. Each business segment, in line with industry characteristics, adoptstargeted pollution control measures to promote compliance with emission standards, actively explores avenues for resource utilization, and achieves awin-win situation for both environmental and economic bene?ts.Strict enforcement of national and local standards for pollutant emissions management is adhered to. The Company regularly commissions third-partyorganizations to conduct soil and groundwater testing, develops detailed monitoring plans, constructs and maintains monitoring facilities to ensure com-pliance with environmental regulations for various pollutants, and lawfully submits monitoring data to the ecological environment authorities. None ofthe operational sites under the Group are located within ecologically sensitive areas, and no ecological sensitive zones have been identi?ed in the vicinity.Long-term monitoring results indicate that the Company's production activities have not had any adverse e?ects on the surrounding environment.In terms of waste gas management, the Chemical Division adheres to the Wastes Management System and the Plant VOCs Unorganized Emission Manage-ment System, employing a strategy that combines source control, process management, and end-of-pipe treatment to ensure emissions of waste gasmeet standards. The ?ne chemicals and pharmaceutical sectors mainly involve the generation of particulate matter, volatile organic compounds (VOCs),sulfur dioxide, nitrogen oxides, and other pollutants from processes such as gas boilers, spray drying, crushing, packaging, and incinerators. The Companyutilizes various waste gas collection and treatment facilities, including:

The Company adheres to strict control of total amount and concentration in wastewater management to ensure compliance with environmen-tal requirements for water pollutant discharge. The Company has established a comprehensive wastewater treatment system, where treatedwastewater is directed to industrial wastewater centralized treatment plants or municipal sewage networks, in accordance with national com-prehensive wastewater discharge standards. Speci?c measures include:

Pollution control and emission reduction

Waste GasCollection System

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ReportIndex TableGovernance01Excellent

Energy-saving Transformation of Spray Drying SystemCase

Photovoltaic Power Generation Facilitating Green TransformationCase

Covers key emission sources such as sewage treatment plants, spray drying towers, and incinerators to reduce unorganizedemission risks.Utilizing processes such as thermal incineration, activated carbon adsorption, baghouse dust removal, low-temperatureplasma, etc., e?ectively eliminate speci?c pollutants.Regularly inspect the emission outlets and plant area for unorganized emissions of VOCs to ensure that the concentrations ofvarious pollutants are within permitted limits.Advanced GovernanceTechnologies

optimizing the factory's drainage system to prevent clean rainwater from entering the sewage pipe network, thus reducing theburden on sewage treatment.In accordance with the Regulations on the Management System of Sewage Treatment Plants, operators strictly adhere toprocedures, conduct equipment inspections on schedule, monitor water quality, and adjust operational parameters based onmonitoring results.integrating a multi-stage treatment process including aeration regulation, hydrolysis acidi?cation, anaerobic, anoxic, andaerobic processes to enhance pollutant removal e?ciency, ensuring compliance with emission standards for key indicatorssuch as Chemical Oxygen Demand (COD), Ammonia Nitrogen (NH3-N), total phosphorus, etc.

Rainwater andsewage diversionSewage TreatmentPlant ManagementE?cient treatmentprocess

Continuous monitoring

Hazardous waste

Household waste

Low-Carbon Transformation:

Supporting Climate Neutralit

The Company is well aware of the profound impact of climate change on the global economy, environment, and society, and acknowledges itsresponsibility in promoting sustainable development and low-carbon transformation. To e?ectively manage climate-related risks and oppor-tunities, we plan to gradually establish a comprehensive climate governance framework to ensure that climate issues are integrated into thecompany's strategic and operational management systems.The Company plans to establish a Sustainable Development or ESG Committee at the board level to oversee climate-related risk management,carbon reduction strategies, and the implementation of sustainable development goals. Additionally, designated individuals within the man-agement team will be assigned to form a cross-departmental climate management group responsible for executing speci?c climate actionplans and reporting progress to the board. This governance framework will facilitate the integration of climate considerations into businessdecision-making processes and drive climate actions across the entire group.

Governance

As a corporate group spanning various industries such as ?ne chemicals and precision healthcare, our business operations involve multipleregions and subsidiaries, encountering diverse climate challenges and opportunities. We intend to progressively implement measures such ascarbon emission management, energy optimization, and low-carbon product development to proactively address climate change.We have proposed the following key strategic directions:

To better assess the potential impact of climate change on business operations, we plan to utilize climate scenario analysis tools to analyzethe risks and opportunities the Company may face in the future from various perspectives.

Climate scenario analysis enables the development of corresponding adaptation and mitigation strategies to enhance a company's climateresilience.

Strategy

Wastewater Treatment Process at a Sewage Station

Solid waste management follows the principles of "waste reduction, resource utilization, and harmlessness," with speci?c collection, storage,disposal, and utilization plans tailored to di?erent waste categories. The Company strictly adheres to the Solid Waste Treatment Technologiesand Methods and pollution discharge permit requirements to achieve safe management and e?cient utilization of solid waste:

In noise management, the Company strictly adheres to the EPM-?? Noise Management System and Noise Management System, aiming toreduce noise pollution from its origins through measures such as equipment optimization, operational protection, etc., thereby minimizing theimpact on employee health and the surrounding environment. Measures include:

optimize equipmentlayout, utilizesoundproo?ngmaterials, installsilencers, andregularly maintainnoise reductionequipment.

Engineeringcontrols

Providing employeeswith earplugs,protective earmu?s,and other protectiveequipment, andorganizing relevantsafety training toensure theimplementation ofpersonal healthprotectionmeasures.

PersonalProtection

The environmentaldepartment regularlyconducts noisemonitoring andcarries out specializedassessments duringequipment upgradesand new equipmentcommissioning toensure compliancewith nationaloccupational noiseexposure limits.

Monitoring andEvaluation

Installation of silencer on aerator pump (left) and installation ofsilencer on the outlet of the spray drying process fan (right).

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Such as distillation residues, spent catalysts, and waste mineral oils are managed through a combination of self-handling andoutsourcing to professional organizations. Some hazardous waste is recycled for resources or utilized for energy, reducingenvironmental impact.Such as bio-sludge and calcium carbide residue are comprehensively utilized, for instance, bio-sludge is sent to solid wasteland?lls, and calcium carbide residue is supplied to cement plants as production materials, achieving resource utilization.Collected and processed by the sanitation department, with waste sorting implemented in the factory area to enhancerecycling rates.General industrialsolid waste

Energy structureoptimization

Enhancing energy e?ciency in production processes, exploring the use of renewable energy to reduce Scope ? carbonGreen SupplyChain ManagementProduction facility low-carbon transformation

Promoting suppliers to adopt low-carbon production methods, optimizing logistics and transportation processes to reduce

Scope ? carbon footprint.

High physicalrisk scenario

Global temperatures continue to rise, exacerbating extreme weather events such as typhoons, ?oods, droughts, etc., impacting

production bases in coastal and inland areas. Factory facilities may be damaged due to extreme rainfall, transportation disrup-

tions leading to supply chain interruptions, and increased insurance and maintenance costs.High transitionrisk scenario

Global strict implementation of carbon emission policies leading to a signi?cant increase in carbon prices, resulting in higher

carbon compliance costs for companies. Demand for high-carbon products decreases, while the market experiences a surge in

demand for low-carbon products and renewable energy solutions.

Investing in energy-saving and consumption-reducing technologies, optimizing equipment e?ciency, and reducing carbon

emissions in the production process.Development ofenvironmentallyfriendly products

Promote green innovation by developing eco-friendly chemical materials and low-carbon medical technologies to meet market

demand.

The Company incorporates climate-related risks into its overall enterprise risk management system and conducts regular assessments of theimpact of climate risks on its operations. The Company identi?es and evaluates key climate risks, including physical risks (extreme weatherevents) and transition risks (policy regulations, market changes, technological innovations, etc.).

The Company has also encountered new market opportunities in the context of climate change, such as energy conservation, carbon reduc-tion, green supply chain management, and the development of low-carbon products. We actively identify the following opportunities to opti-mize our business layout:

Risk management

To assess and track the e?ectiveness of the Company'sclimate actions, a carbon emissions and energy e?ciencymanagement system will be gradually established topromote the quanti?ed management of greenhouse gasemissions. In the ?scal year ????, the Bo'ai Plant obtainedISO ????? certi?cation (based on ???? emission data),further enhancing the greenhouse gas accounting andveri?cation system. Additionally, in ????, the Bo'ai Plantacquired ??,??? green certi?cates (equivalent to ??million kWh), representing over ??% of the total electricitypurchased by the Bo'ai Plant in ????, laying the founda-tion for the decarbonization of the energy structure andthe increase in the proportion of renewable energy use.

Indicators and Targets

RiskTypes

Speci?crisks

Primary potential?nancial impacts.

Primarydrivers of risk

Impact leveland durationRisk DescriptionResponse MeasuresExtreme rainfall may lead to?ooding, impactingproduction bases andsupply chain transportation.

Equipmentdamage,productioninterruption,limited supply ofraw materials

Changes inprecipitationpatterns haveled toinadequateurban drainagecapacity.

Mediumterm, shortto mediumterm.

Enhance the standard of the factory'sdrainage system.Select two to three quali?ed suppliers fromdi?erent regions to ensure supply chainstability.Extremerainfall

Physical

risks

Typhoons may damagefactories, equipment, andlogistics systems, a?ectingthe transportation of rawmaterials and products.

Productionfacilities damaged,increasedtransportationcosts, operationaldisruptions.

Intensi?cationof tropicalcyclone activity

High level,short tomediumterm.

Strengthening building structures toenhance wind resistance;Evaluating site selection for criticalproduction facilities to optimize logisticsnetworks.Typhoon

Coastal ?ooding maypotentially impact theoperational and productionfacilities of enterpriseslocated in coastal areas.

Asset damage,businessinterruption,increasedinsurance costs.

Rising sea levelsand extremerainfall.

Moderate,medium tolong term.

Plan for long-term relocation or enhancecoastal infrastructure's ?ood resilience.Procure waterproof equipment anddevelop emergency response plans.Coastal?ooding.

High temperatures may leadto power system failures,impacting the stableoperation of productionequipment; hightemperatures a?ectemployee health and worke?ciency.

Decreasedproductione?ciency, increasedequipmentmaintenance costs,and rising employeehealth costs.

Heatwaves areincreasing,leading topower gridoverloads

Moderate,short tomediumterm.

The factory adopts a dual power supplysystem to ensure energy supply reliability.Additional cooling systems are installed tooptimize indoor ventilation.Extremehightemperature

Extreme low temperaturesmay lead to equipmentfreezing, a?ecting rawmaterial storage.

Production losses,additional energyconsumption.

The cold waveevent hasintensi?ed

Lowintensity,short term.

Enhance the thermal insulation capacity ofplant and warehouse facilities.Pre-stock critical raw materials in advance.Cryogenictemperature

Snowfall may impactlogistics and supply chaintransportation.

Supply chain delaysleading to deliverydefault.

An increase inextremesnowfall events.

Lowintensity,short-term.

Adjust inventory planning in advance and?exibly arrange transportation.Utilize remote work or productionscheduling.Extremesnowfall

Potential factors such asdisruptions in sales andlogistics in overseas marketsmay lead to an increase inoperational costs.

The supply chaininstability has ledto an increase intransportationcosts.

Global warmingleads to glaciermelting.

Lowintensity,long term.

Diversifying market presence to reducereliance on a?ected regions.Rising sea

levels

The government may introducestricter environmental regulations,requiring emission reduction.

Improving Energy E?ciencyRenewable Energy UtilizationDevelopment of environmentallyfriendly productsGreen Supply Chain Optimization

Reducing energy costs and enhancing production e?ciency.Reducing carbon emissions to bene?t from policy incentives.Expand into new markets to enhance pro?tability.Enhancing corporate brand value to attract ESG investors.

Investing in e?cient equipment to optimize production processes.Introducing clean energy sources such as solar and wind power.Enhancing green product research and development to meetmarket demand.Establishing a low-carbon supply chain management system.

Increased compliancecosts due to carbonemissions may lead topotential ?nes.

Global carbonneutrality goal

High level,medium tolong term.

Proactively strategizing inenvironmental technology toensure compliance;Engaging in carbon tradingmarkets to optimize carbon assetmanagement.Policy andlegal risks

The development of low-carbonmanufacturing technologies mayrender current production processesobsolete.

Increased equipmentinvestment requirementshave led to rising costs fortechnology conversion.

Low-carbontechnologicaladvancement

Moderate,medi-um-term.Technological

risk

Transition

risk

Continual investment in researchand development to upgradelow-carbon manufacturingprocessesThe market is witnessing an increasingdemand for green products, leading toa decline in the competitiveness oftraditional products.

A decrease in businessrevenue has led to adecline in market share.

The trend ofgreenconsumption isstrengthening.

Moderate,medi-um-termMarket

risk

Expand the environmentalproduct line and adjust productstrategy.There is an increasing public andinvestor interest in the performanceof Environmental, Social, andGovernance (ESG) factors.

Loss of investor trustcan damage brandimage.

Enhancementof ConsumerEnvironmentalAwareness

High degree,short to longterm.Reputationalrisk

Enhancing ESG disclosure toimprove environmental image.

Identi?cation and Management of Climate-Related Risks

Identi?cation and Response to Climate-Related Opportunities

Speci?c OpportunitiesResponse MeasuresPotential Financial Impact

4142

Greenhouse Gas Veri?cation ReporGreen Power Certi?cate Details and Credentials

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Development

03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

RiskTypes

Speci?c

risks

Primary potential?nancial impacts.

Primarydrivers of risk

Impact leveland durationRisk DescriptionResponse Measures

CUSTOMER SERVICE AND SATISFACTION ·LABOR RELATIONS MANAGEMENT ·OCCUPATIONAL HEALTH AND SAFETY ·EMPLOYEE TRAINING AND PROMOTION ·

COMMUNITY CONTRIBUTION ·

Aligning the United Nations Sustainable Development Goals

NKY consistently adheres to a people-oriented approach, striving to establish a fair, transparent,and inclusive workplace environment, providing employees with comprehensive rights protectionand career development support. The Company strictly complies with international human rightsstandards and national labor regulations, establishing robust systems for employment manage-ment, compensation and bene?ts, democratized governance, and safety in production to ensureemployees' growth in a safe, healthy, and sustainable environment. Through a well-developedtraining system and career advancement mechanism, the Company continuously empowersemployees' growth. Simultaneously, it actively promotes collective bargaining mechanisms tosafeguard employees' participation and voice, endeavoring to foster harmonious and mutuallybene?cial labor relations.

Striving for Win-WinCreating a Better Future Together

Protecting RightsBuilding a Harmonious WorkplaceEmpowering GrowthSupporting Talent DevelopmentHealth FirstSafeguarding Occupational SafetyCaring for SocietyFul?lling Public Welfare Responsibilities

Protecting Rights:

Building a Harmonious Workplace

The Company regards respecting and safeguarding human rights as the cornerstone of sustainable development, striving to create a fair, just, and inclusiveworking environment to ensure the e?ective protection of the fundamental rights of all employees and stakeholders. The Company has established a seriesof management systems based on internationally recognized human rights standards and relevant national laws and regulations, covering various aspectssuch as anti-discrimination, anti-harassment, prohibition of forced labor, and protection of external stakeholders' rights, to systematically ensure the imple-mentation of human rights principles.In safeguarding employee rights, the Company strictly adheres to the Anti-Discrimination, Anti-Harassment, Anti-Abuse Management Regulations, ensuringthat recruitment, compensation, promotion, and other aspects are not di?erentiated based on gender, ethnicity, or religious beliefs. The Company fullyimplements the principle of "equal pay for equal work" and provides equal development opportunities for female employees, persons with disabilities, andother groups. To address potential workplace misconduct, the Company explicitly prohibits any form of sexual harassment, mental abuse, and physicalpunishment. It establishes multiple channels for complaints, including hotlines, emails, mailboxes, direct submission of written or oral complaints to theHuman Resources Administrative O?ce or the General Manager, ensuring that all employees' right to complain is e?ectively protected. For con?rmed viola-tions, the Company will impose corresponding disciplinary measures based on the severity of the o?ense, and individuals involved in serious violations willbe held accountable according to the law.In terms of labor compliance management, the Company has established the Regulations Prohibiting the Use of Child Labor and Forced Labor, strictlyimplementing an identity veri?cation mechanism by verifying identity documents during the recruitment process to eliminate the employment of childlabor. Additionally, each department bears supervisory responsibilities in daily management. Upon discovering falsi?ed age information or suspected casesof forced labor, they must promptly report to the Company and take remedial measures. The Company explicitly stipulates that all production organizationsmust respect employees' wishes, schedule work hours reasonably, safeguard employees' vacation rights, and strictly prohibit any form of forced labor. Incase of violations, the Company will promptly intervene, take action against the responsible parties, and refer severe cases to judicial authorities.The Company has established a systematic mechanism for safeguarding rights and interests across various dimensions such as customers, suppliers,government agencies, non-governmental organizations, and shareholders, in accordance with the External Stakeholder Human Rights Policy.

Human Rights Policy and Commitment

The Company regards talent as the core driving force for sustainable development, strictly adheres to national labor laws and regulations,establishes a standardized and transparent talent management system to ensure fairness and impartiality in the recruitment process, andprovides employees with a stable career development path. We continuously optimize the recruitment process, enhance the assessmentmechanisms, ensure the rational allocation of human resources to meet business growth demands, and enhance the overall competitivenessof the organization.The recruitment management system covers the entire process from talent demand analysis to formal employment, ensuring the e?ciencyand compliance of recruitment work through standardized procedures. Each subsidiary formulates speci?c implementation rules based on itsown business characteristics under the guidance of uni?ed recruitment principles. All recruitment decisions are based on capabilities and job?t, una?ected by factors such as gender, age, ethnicity, or religious beliefs. The Company has established a comprehensive recruitmentapproval system internally, where departments submit position requests based on business needs, which are then reviewed by the HumanResources Department and ?nally approved by the management to ensure that recruitment needs align with the company's overall develop-ment strategy. Resume screening, interview assessments, background checks, and other processes are strictly conducted following standard-ized procedures to ensure the match between individuals and positions, thereby enhancing the quality of talent acquisition.The Company adopts a diversi?ed strategy in recruitment channel management, utilizing various methods such as recruitment websites,social media, campus recruitment, headhunting partnerships, and internal referrals to attract top talents and expand its talent pool. For keypositions, the Company establishes specialized selection mechanisms to ensure alignment between the reserve of talents for core positionsand business development needs. Simultaneously, compliance, fairness, and transparency in the recruitment process are focal points for theCompany. All candidates are provided equal opportunities, with the Company regularly reviewing its recruitment system, optimizing recruit-ment assessment tools to minimize biases, and enhancing the fairness of recruitment practices. Candidates who are not selected receive feed-back to maintain a positive employer brand image.Our workforce spans multiple industries including ?ne chemicals, pharmaceuticals, biotechnology, and medical devices, with a diverse talentstructure encompassing both technical professionals and operational management talents. To meet the needs of corporate development, theCompany adjusts personnel allocation based on market conditions and internal strategies, reasonably arranges annual recruitment plans, andadjusts talent reserve strategies in conjunction with quarterly evaluations. In terms of employee turnover management, the Company enhanc-es employee retention rates and reduces talent attrition risks through standardized probation management, performance appraisal systems,and career development path design.

In corporate culture development, the Company advocates for employees to consciously uphold workplace equality and respect. All employ-ees are required to adhere to relevant provisions in the Labor Contract prohibiting discriminatory and harassing behaviors, and undergo regu-lar training to enhance human rights awareness and ethical standards. Simultaneously, the Company provides a safe and healthy work envi-ronment, arranges regular health check-ups for employees, optimizes working conditions, continuously improves o?ce and living facilities,and enhances employees' sense of belonging and well-being. Furthermore, the Company focuses on environmental protection and economicdevelopment in the local community, actively promotes local employment, and creates more equitable job opportunities for society.The Company will continue to enhance its human rights management system, strengthen supervision and improvement measures to ensurethe basic rights of employees and all stakeholders are fully protected, and promote the mutual progress of the enterprise and society.Employee recruitment and management

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Customers andConsumers

The commitment to providing high-quality, safe products and services, strictly protecting customer privacy, and adhering to theprinciples of fair trade.

Suppliers and Partners

Advocate responsible business practices to ensure the respect of labor rights in the supply chain and conduct business cooper-ation fairly and justly.Government agenciesand regulatory bodies

actively cooperate with policy oversight, lawfully ful?ll environmental, tax, and social responsibility obligations.Non-governmental organiz-ations and social groups

actively communicate and collaborate to promote social welfare projects, ful?lling corporate social responsibility.Media and the publicMaintain a transparent information disclosure mechanism and establish e?ective public communication channels.Shareholders andinvestors

The Company strictly adheres to corporate governance standards to protect the legitimate rights and interests of investors,

ensuring the authenticity, completeness, and timeliness of information disclosure.

The Company adheres to a human-centered management philosophy, establishing a comprehensive compensation and bene?ts system to ensure the fullprotection of employees' labor rights while motivating them to grow together with the enterprise. Through a scienti?cally rational compensation system,comprehensive bene?ts package, and diverse incentive mechanisms, the Company continuously optimizes its compensation management, enhancesemployee satisfaction, and strengthens organizational cohesion.In terms of compensation management, the Company has established a market-oriented and performance-driven compensation system based on the Com-pensation Management System and Performance Management Guidelines to ensure that the compensation levels are competitive in the industry and e?ec-tively motivate employees. The salary structure includes basic salary, performance bonuses, year-end bonuses, and other incentive subsidies, which aredynamically adjusted based on job responsibilities, work performance, market salary levels, and the overall operating conditions of the Company. Somesubsidiaries implement a thirteenth-month salary or year-end rewards to recognize employees' annual contributions, while also establishing an assessmentand incentive mechanism to closely link the compensation system with individual performance and company performance.The welfare system covers statutory bene?ts and corporate-speci?c bene?ts, ensuring employees enjoy comprehensive labor protection. The Companystrictly adheres to national laws and regulations, providing pension insurance, medical insurance, unemployment insurance, work-related injury insurance,maternity insurance, and housing provident fund. Additional welfare bene?ts are o?ered based on employees' length of service and individual circumstanc-es, including:

The attendance management system ensures the reasonable arrangement of working hours while accommodating the ?exible needs of di?erent positions.Standard working hours are generally applicable to management and research and development positions, with some subsidiaries implementing ?exibleattendance policies. Research and development personnel can reasonably schedule working hours based on project requirements to ensure a balancebetween work e?ciency and personal needs.

Compensation and bene?ts security

The Company adheres to the principle of democratic management, respects and safeguards employees' democratic rights, and has estab-lished a sound collective bargaining mechanism to provide employees with open communication channels, ensuring a stable and harmoniouslabor relationship between the enterprise and its employees. In accordance with laws and regulations such as the Trade Union Law and theLabor Contract Law, the Company has set up trade union organizations to promote collective wage bargaining, ensuring e?ective protectionof employees' legitimate rights and interests.Labor unions play a crucial role in corporate governance, undertaking various responsibilities such as safeguarding employee rights, facilitat-ing communication between the company and its employees, and promoting welfare improvements. The Company encourages employees toautonomously join the union, providing necessary venues and ?nancial support to ensure the union operates e?ciently. By regularly conven-ing workers' congresses, the union solicits and provides feedback on employees' opinions, engaging in democratic negotiations regardingaspects such as salary adjustments, working hours, labor protection, and welfare bene?ts, thereby advancing transparency in corporate man-agement decision-making.

The Company encourages employees to express their opinions through various channels and actively adopts reasonable suggestions. TheSta? Representative Assembly is a crucial platform for employees to voice their concerns, encompassing discussions on topics such as laborconditions improvement, career development, and work environment optimization. Furthermore, the Company has established channels forappeals and feedback to ensure that employees can express their demands smoothly in daily work and receive timely responses. Any deci-sions involving employee labor discipline, rewards, and penalties require consultation with the labor union. Signi?cant decisions likelarge-scale job adjustments or layo?s also necessitate the approval of the labor union to fully protect employees' labor rights.The Company consistently upholds the collective bargaining mechanism to safeguard the equal negotiating rights of labor and management,ensuring that employee income levels rise in sync with the business performance. In ????, the company's labor union regularly submits wagecollective bargaining proposals to the enterprise. Representatives from both sides engage in negotiations on wage standards, distributionforms, adjustment mechanisms, and other aspects on a basis of equality and voluntariness, ultimately culminating in a legally binding Enter-prise Wage Collective Contract.

Democratic Management

Holiday and Leave PoliciesEmployees are entitled to statutory national holidays, annual leave, sick leave, marriage leave, bereavement leave, maternity leave, paternity leave, andother leaves as stipulated by the law. Some subsidiaries provide longer annual leave based on seniority, for example, employees with ?? years of servicemay be entitled to ?? days of annual leave, while those with ?? years of service may enjoy ?? days of annual leave. Additionally, certain subsidiariesextend marriage leave, bereavement leave, and maternity leave to better meet the needs of their employees.

Talent development and team buildingThe Company places emphasis on employee career development by regularly conducting internal training sessions and supporting participation inexternal learning opportunities to enhance professional skills. Additionally, certain subsidiaries regularly organize team-building activities such as travel,interest groups, sports events, etc., to strengthen employees' sense of belonging and teamwork spirit.

Overtime and compensatory time o? management

The Company strictly adheres to labor laws, providing overtime compensation as mandated by law or o?ering compensatory time o? at a ?:? ratio toensure employees receive appropriate compensation and rest time.

Healthcare Bene?ts

All employees are entitled to annual health check-ups, with some subsidiaries o?ering additional bene?ts such as free meals, holiday bonuses, heatsubsidies, etc., to enhance employee comfort and quality of life.

Regularly convene sta? symposiums to understand the needs and challenges of grassroots employees in their work and daily lives.Establishing an online public chat group where all union members can freely communicate and exchange ideas.Establishing the email address zsbgw???????@???.com and a hotline number ??????? will facilitate providing assistance to employees inneed.

Responsibilities of a labor union

In April ????, Boai NKY Co., Ltd. convened a workers' congress to discuss the draft annual wage collective bargaining agreement. Uponunanimous agreement by the worker representatives, formal negotiations on the collective wage agreement with the enterprise wereinitiated. The meeting reached consensus on key issues such as the enterprise's wage distribution system, minimum wage standards,and overtime wage payment methods, ultimately resulting in the new version of the Enterprise Wage Collective Contract. Following scru-tiny and approval through the enterprise and union processes, the contract was o?cially signed and implemented. The successfulconduct of this collective bargaining meeting not only e?ectively safeguarded the rights of employees but also promoted mutual trustand cooperation between the enterprise and its employees, advancing the establishment of harmonious and stable labor relations.

Collective Bargaining MeetingCase

4748

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

Training system and management structure

Empowering Growth:

Supporting Talent DevelopmentThe Company regards employee development as a crucial support for sustainable business growth. A systematic, hierarchical, and diversi?ed training systemhas been established to enhance employees' professional skills, management abilities, and overall qualities. In accordance with regulations such as the Train-ing Management Regulations and Training Plan Proposals, the Company standardizes the organization and implementation processes of training to ensurealignment between training content and business development. This approach aims to cultivate a high-caliber workforce, fostering mutual progress for boththe enterprise and its employees.The training system covers job skills, compliance management, professional ethics, and other aspects to meet the developmental needs of di?erent employees.Newly hired employees are required to undergo pre-job training, which includes corporate culture, administrative personnel systems, safety production norms,etc., to help them quickly adapt to the work environment. Professional skills training tailors exclusive courses for di?erent positions, including strengtheningbasic skills, interpreting industry regulations, and advancing technical training, ensuring employees continuously improve in their professional ?elds. Manage-ment training focuses on middle and senior management personnel, revolving around themes such as leadership development and interdepartmental collabo-ration to enhance management e?ciency. The Company also actively conducts cross-disciplinary integration training to encourage employees to expand theirknowledge boundaries and enhance innovation capabilities.Diversi?ed training methods, combining internal training, external training, and practical guidance, enhance learning e?ectiveness. Internal training, led bysenior employees or managers, employs classroom lectures, case studies, hands-on exercises, etc., to reinforce knowledge application. Some subsidiariesimplement a "mentorship system" for employees within their ?rst year of employment and high-potential talents, assigning experienced mentors to providebusiness guidance, facilitating rapid employee development. External training includes industry forums, professional certi?cation courses, external expertlectures, etc., providing employees with broader learning resources. Additionally, the Company encourages self-directed learning among employees, o?ering aplatform for knowledge sharing to foster a conducive learning environment.

Comprehensive Training System

The Company places a high emphasis on employees' professional growth by establishing a systematic promotion management system todrive career development in a fair, transparent, and sustainable manner. The Company adheres to regulations such as the Employee Promo-tion Management Guidelines, Skill Level Assessment Management Measures, and Compensation Management Guidelines to clearly de?nepromotion pathways, assessment criteria, evaluation processes, and corresponding salary adjustment mechanisms. This ensures that allemployees have the opportunity for promotion under qualifying conditions, enabling them to achieve their career objectives.The promotion management system has established a "dual-track + multi-sequence" framework to meet the development needs of employ-ees in di?erent positions. The Employee Promotion Management Guidelines divide into management sequence, technical sequence, produc-tion operation sequence, functional sequence, and sales sequence, each with ??-?? job grades, accompanied by corresponding job salaryranges and skill-based salary adjustment mechanisms. The management track is applicable to team managers and department heads, whilethe technical track targets core technical and business backbone roles in research and development, marketing, and supply chain, with thesupport track covering administrative, ?nancial, human resources, and IT support positions.The promotion review process follows annual and quarterly assessment mechanisms to ensure the fairness of promotion decisions. The Com-pany organizes centralized reviews in March and September each year. The Skill Level Assessment Management Measures stipulate that skillassessments include annual regular assessments and irregular assessments for new employees, covering theoretical knowledge, practicalabilities, and overall qualities. Employees go through the promotion application process, including declaration, quali?cation veri?cation,examination assessment, review announcement, and reexamination approval. Quali?ed individuals are promoted in terms of job level andsalary. For employees with exceptional contributions, the Company has a mechanism for out-of-turn promotions to encourage innovation andoutstanding performance.The internal talent mobility mechanism provides employees with more development opportunities. The Employee Internal Transfer Processstipulates that employees can achieve career expansion through inter-departmental transfers, short-term rotations, and internal job competi-tions. The internal job competition mechanism, based on the Internal Job Competition Talent Recommendation Management Measures,establishes competition criteria for managerial and technical positions and selects candidates through processes such as noti?cation, promo-tion, registration, review, evaluation, public announcement, and appointment. The Company also has a talent referral system that encouragesemployees to recommend suitable candidates for positions, o?ering corresponding rewards to optimize talent allocation.The Company focuses on the diversity and sustainability of employee career development by formulating the "Skill Level Assessment Manage-ment Measures" to promote the professional growth of technical personnel and production sta?. The Review Committee is responsible forestablishing assessment criteria and enhancing employees' skill levels through assessment evaluations, training support, job rotation, andother methods. For employees unable to perform their original duties due to physical reasons, the Company conducts reasonable job transfersin accordance with the "Employee Promotion Management Guidelines" to ensure their continued career development in suitable positions.Employees who remain capable of working upon reaching retirement age may have their labor contracts converted to service contracts forcontinued employment, thereby preserving their experiential value.

Career Development and Promotion

A comprehensive training systemc overing all employeesincluding onboarding training, job skills training, managementcapability enhancement, cross-departmental collaborationlearning, external professional training, etc., to meet the devel-opment needs of employees at di?erent levels and in di?erentpositions.

The Human Resources Department

oversees the management of training systems,integration of training resources, tracking and evalua-tion of training e?ectiveness, and the development ofannual training plans.

The implementation is led by the businessdepartments

each department formulates targeted trainingplans based on actual needs, organizes internalinstructors to teach, and participates in traininge?ectiveness evaluation.

Training MethodsOnboarding Training

Encompassingcorporate culture,regulations,professional ethics,job responsibilities,etc., to assist newemployees in quicklyadapting to thecorporateenvironment.

Mentorship ProgramSome subsidiariesadopt a mentorshipsystem, assigningexperiencedemployees to provideone-on-one guidanceto new employees orhigh-potential talents,facilitatingpersonalized growth.

Professional skills trainingTechnical positionsfocus on deepeningprofessionalknowledge, whilemanagementpositions emphasizethe development ofleadership andcross-departmentalcollaboration abilities.

External Learning SupportEncouraging employees toparticipate in industryseminars, academicexchanges, and externaltraining provided byinstitutions to broadenindustry perspectives andenhance innovationcapabilities.

Internal training instructor systemExperienced employees serveas instructors, organizinginternal seminars within thecompany to provideprofessional training oncompliance and safety,technical advancement, andpractical business operations.Training management implements a systematic assessment mechanism to ensure the e?ectiveness of training. Each business unit formulates training plansbased on annual development plans and adjusts them dynamically to adapt to changes in the company and the market. Training assessments cover theoreticaltests, practical exercises, post-training feedback, and other methods to ensure that employees can e?ectively absorb training content and apply it in their actualwork. The management of training records is strictly regulated, covering course records, assessment results, student feedback, and other contents, providingdata support for employees' career development.

In ????, to enhance employees' overall competencies, NKY Group's medical sector launched the "NKY Grand Lecture Hall" online trainingprogram. This program o?ers a weekly half-hour online training session on Wednesday evenings, conducted by in-house instructors orexternal experts, covering various topics such as new product technology introductions, business etiquette, and sales skills. A total of ??sessions are scheduled throughout the year, and employees can voluntarily participate in their spare time. After recording, the coursesare uploaded to the company's DingTalk course library for all employees to access at any time. This training model provides employeeswith ?exible and e?cient learning opportunities, supporting individual skill enhancement and career development.From December ?st to ?rd, ????, NKY held the "???? Company Strategic Breakdown and Co-cre-ation Conference" at the Tianjie International Hotel in Yuntai Mountain. This training was aimedat senior management personnel at the level of departmental vice presidents and above withinthe Company. External expert, Professor Gao Jing, was invited to lecture on methodologies suchas "Strategic House" and "Strategic Review." Participants collaborated to develop action plans tosupport the Company's strategic objectives based on the speci?c circumstances of their respec-tive departments. This training not only enhanced the strategic thinking capabilities of the man-agement team but also laid a solid foundation for the Company's future development planning.

4950

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing

02Lean

Development

03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

Online Training Empowers Employee DevelopmentCase

Strategic Training Facilitating Organizational Goal AchievementCase

5152

Health First:

Safeguarding Occupational SafetyThe Company adheres to the safety management philosophy of "people-oriented, life-?rst", establishing a sound safety production management systemto ensure the implementation of various safety measures. The Company strictly complies with national safety production laws and regulations by devel-oping standardized management systems, strengthening risk warning mechanisms, optimizing emergency response systems, implementing a full-sta?safety responsibility system, continuously enhancing safety management standards, and safeguarding employees' occupational safety and health.The safety management system is coordinated by the company-level safety committee, with speci?c implementation carried out by department-levelsafety subcommittees, ensuring the implementation of a hierarchical safety production responsibility system. At the beginning of the year, the Companysigned ?? safety target responsibility agreements with safety management personnel at all levels, incorporating safety production goals into the perfor-mance evaluation system. The Company strictly adhered to the Safety Production Responsibility System, Safety Production Responsibility AssessmentSystem, and Safety Production Reward and Punishment System, ensuring precise and e?ective implementation of responsibilities and assessments. In????, the Company continued to optimize in equipment management, hazard identi?cation, and occupational health protection. Throughout the year,there were no severe or above responsibility accidents, equipment-related incidents, or ?re-related incidents, and zero new cases of occupational diseas-es, demonstrating signi?cant achievements in safety production work.The Company has established a smooth channel for reporting safety issues, including internal safety report forms, emails, anonymous reporting hotlines,etc., to encourage employees to proactively report safety hazards. The safety management department completes a preliminary assessment within ??hours, immediately initiating emergency response for urgent situations, and arranging on-site investigations within ? working days for non-urgent cases.After the completion of handling, the Company provides feedback to the reporter within ? working days and regularly informs about recti?cation progressto ensure closure of the issue. Additionally, the Company pledges to reward employees who truthfully report safety issues and explicitly prohibits anyform of retaliation. Any violations found will be handled in accordance with the law and regulations.

Safety Management System

The Company has established a systematic safety management system to ensure comprehensive identi?cation, scienti?c assessment, rational classi?ca-tion, and e?ective control of safety risks. A dedicated safety management department has been established to develop safety production regulations,organize risk assessments, supervise implementation, and coordinate various departments to jointly promote safety management work. Each businessunit and subsidiary, within the framework of the group's safety management system, tailored detailed safety management measures according to theirbusiness characteristics to ensure that safety management covers all work areas, production processes, and relevant parties.

The Company establishes a specialized risk assessment team to systematically identify various safety risks using multidimensional information such ashistorical incident data, equipment maintenance records, and operational environment monitoring results. The risk assessment follows a combinedapproach of conventional and unconventional processes:

Identi?cation and Prevention of Safety Risks

Risk identi?cation and assessment

Regular risk assessment

The Company conducts comprehensive quarterly inspections covering all work areas, production equipment, and operational processes to ensureearly detection and recti?cation of potential hazards.Unconventional Risk AssessmentInitiate specialized assessments promptly in the event of safety incidents, introduction of new business lines, commencement of new equipmentoperations, or regulatory updates to ensure swift analysis and targeted responses to potential risks.

Engineering control measures

optimize production equipment protective devices, install safety interlock systems, improve ventilation facilities to reduce harmful gasconcentrations, enhance emergency lighting and escape route signage, to enhance personnel safety in emergency situations.Management measures

The Company establishes and strictly enforces safety operating procedures, implements a work permit system, and conducts approvaland monitoring for high-risk operations. It strengthens daily safety inspections, including comprehensive, speci?c, and seasonal inspec-tions, to ensure timely detection and recti?cation of safety hazards.

The risk assessment team utilizes the risk matrix method to quantitatively evaluate risks based on the likelihood of occurrence and impactseverity, categorizing them into high, medium, and low risk levels for graded management.

Furthermore, the Company regularly conducts emergency drills to familiarize employees with evacuation routes and emergency procedures,enhancing their ability to respond e?ectively in emergency situations.

Risk Classi?cation and Management

The Company has established a comprehensive information management system and emergency decision-making mechanism for abnormalworking conditions to ensure closed-loop management of safety risk identi?cation, reporting, and handling. The safety management depart-ment collects safety production information through various channels, including updates on regulations and policies, results of accident andhazard inspections, equipment maintenance records, etc., and processes them by timeliness to ensure accurate and e?cient informationdissemination. In anticipation of potential abnormal working conditions such as ammonia leakage, equipment malfunctions, etc., the Compa-ny has formulated the Emergency Decision Management System for Abnormal Working Conditions, specifying the authorization scope of lead-ers at all levels to ensure rapid execution of key decisions and reduce the probability of accidents.The risk prevention and control mechanisms for safety risks encompass multidimensional management approaches to ensure the e?ective-ness of risk control:

Risk management and prevention measures

High risk

Areas and operations involving signi?cant hazards require the Company to develop specialized safety control plansand implement strict engineering protection and management control measures to ensure manageable risks.Medium risk

Optimize operational processes for work environments requiring additional monitoring or control, enhance safetytraining, and improve employees' risk awareness and response capabilities.Low risk

The Company has established a comprehensive emergency response system to ensure rapid and e?ective control of situations in the event ofaccidents, minimizing losses to the greatest extent. The emergency system consists of a comprehensive plan, special plans, and on-sitedisposal plans:

Emergency response and incident management

ComprehensivePlan

Analyze primary hazards, clarify organizational responsibilities, early warning mechanisms, and emergencyresponse procedures.Special PlanOn-site EmergencyResponse Plan

AboutThis Report

Chairman'sAddressAbout NKY

2024 Environmental, Social, and Governance Report

Manufacturing02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

Maintain the ongoing implementation of existing risk control measures while incorporating safety data analysis toassess the need for further optimization.

Speci?c emergency response measures shall be established for high-risk incidents such as ?res, explosions, poison-ing, leaks, etc.Encompassing common work accidents such as electric shock and asphyxiation, ensuring frontline employees canpromptly take correct measures to mitigate the impact of accidents.

The Company will continuously enhance safety management as a critical component by conducting regular internal audits and management reviews toassess the e?ectiveness of existing safety measures. By integrating the results of risk assessments, the safety management system will be optimized.Improvement objectives will be set for weak links in the management system, processes will be optimized, and ensuring that safety responsibilities aree?ectively implemented.The Company has established a comprehensive supervision and assessment mechanism, providing rewards to departments and employees withoutstanding safety management performance, while issuing noti?cations for recti?cation in cases where safety measures are not implemented, therebyenhancing the execution of safety management and fostering a safety culture of "full participation and collective maintenance."

Continuous improvement and monitoring and evaluation.

The Company actively promotes the digital transformation of safety management, leveraging the Smart Safety Emergency Comprehensive SupervisionPlatform to enhance the precision and e?ciency of safety management. The Company divides production units and storage facilities involving hazardouschemicals into three safety risk analysis units, covering ?? sets of equipment and ? operational sites. By posting QR codes for hazard investigation in keyareas, employees can conduct on-site hazard inspections by scanning the codes, achieving seamless integration between o?ine risk control and onlinedigital systems. This platform supports hazard recording, corrective action tracking, and real-time monitoring, ensuring the visualization, digitization, andintelligence of safety management, providing robust technological support for the enterprise's safety production.

Digital Security Platform

The Company places a high priority on the occupational health and safety of employees, establishing a comprehensive management systemto ensure all employees work in a safe and healthy environment. The Chemical Division strictly complies with laws such as the OccupationalDisease Prevention and Control Law and is certi?ed with the ISO ????? Occupational Health and Safety Management System, continuouslyoptimizing the occupational health management mechanisms. In addition to the Chemical Division, safety management also covers majorsubsidiaries in the medical sector such as Heer Medical and Eastwin in Suzhou, with the occupational health and safety management systembeing piloted in other subsidiaries, with plans to gradually expand it to all employees and all production and o?ce locations.

A series of measures have been implemented to ensure the e?ective implementation of occupational health and safety measures for employees:

In terms of management structure, the Chemical Division has established an Occupational Healthand Safety Management Leadership Team responsible for overall planning, supervising implemen-tation, and evaluating improvements to the occupational health management system. Each subsid-iary appoints dedicated (or part-time) occupational health and safety management personnelresponsible for daily management, risk monitoring, and safety training to ensure e?ective imple-mentation of the system at all levels. Additionally, the Company establishes a safety productionresponsibility system to clarify the responsibilities of management personnel at all levels, creating apattern of health and safety management involving all sta? members.The Chemical Division formulates and strictly enforces documents such as the OccupationalDisease Prevention and Control Responsibility System, Occupational Health Management System,and Occupational Hazard Factor Detection and Management System to ensure the e?cient imple-mentation of occupational disease prevention and control work by assigning safety responsibilitiesat all levels. The Occupational Disease Prevention and Control Leadership Group coordinates man-agement to ensure that core indicators such as hazard noti?cation rate and personal protectiveequipment management reach ???%. Annual occupational hazard factor detection is conducted,and regular occupational health examinations are provided to employees, along with personalizedexamination plans for di?erent positions to ensure early detection, prevention, and intervention ofoccupational diseases.

Employee occupational health and safety

Intelligent Safety Emergency Comprehensive Supervision PlatformOccupational Health and SafetyManagement System Certi?cation.Health Monitoring andOccupational Disease Prevention

The Company provides annualoccupational health examinations foremployees, with specialized testsadded for high-risk positions, such ashearing tests for employees in noisyenvironments and blood tests for thosehandling chemicals. All workersundergo occupational health and safetytraining to ensure proper use ofpersonal protective equipment,including dust masks, gas masks, eardefenders, etc.

Work EnvironmentOptimizationTechnically transform adverseconditions such as hightemperature, dust, noise, etc., byupgrading ventilation systems,installing soundproo?ngequipment, optimizing workprocesses to reduce occupationalhealth risks. For positions involvingchemical operations, strictlyadhere to chemical storage,labeling, and usage managementrequirements to ensure thatoperators can correctly identifyand handle potential hazards.

Emergency Managementand Accident PreventionTechnically transform adverseconditions such as hightemperature, dust, noise, etc., byupgrading ventilation systems,installing soundproo?ngequipment, optimizing workprocesses to reduce occupationalhealth risks. For positions involvingchemical operations, strictlyadhere to chemical storage,labeling, and usage managementrequirements to ensure thatoperators can correctly identifyand handle potential hazards.

Internal Audit andSupervision InspectionThe Company conducts safetyinspections quarterly toaddress occupational healthrisks identi?ed, assessdepartmental compliance,and implement necessarycorrective actions.Non-compliance with safetystandards is required to berecti?ed within a speci?edperiod, incorporated into theperformance evaluationsystem to reinforce safetyaccountability.Employee Training and Health PromotionThe Company regularly organizes safety training covering various areas such asmechanical operations, electrical safety, chemical protection, and conducts ?rstaid skill drills including CPR, ?re evacuation, etc. Additionally, non-occupationalmedical health services are provided, including annual physical examinations,psychological health support, chronic disease management, ensuringcomprehensive health protection for employees in both work and personal life.

Data Management and Trend AnalysisEvaluate potential health risks and optimize health managementmeasures through occupational health data analysis. The Companyestablishes an occupational health record management systemcovering legal documents related to occupational disease preventionand control, testing data, employee health records, etc., to providescienti?c decision-making basis for occupational health management.

5354

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

Caring for Society:

Ful?lling Public Welfare Responsibilities

The Company has long been committed to social welfare initiatives, supporting the development of education, environmental protection,public safety, and other areas through ?nancial donations, material assistance, and volunteer actions.Charitable donations

The Company actively engages in local economic and social development by creating employment opportunities, promoting talent development,and fostering cultural activities to contribute to community prosperity and sustainable development.Contribute to community development

In September ????, the Company commis-sioned Henan Ruiante Environmental Tech-nology Co., Ltd. to conduct testing on poten-tial occupational hazards in the workplace. InNovember ????, the Company obtained theTesting Report (HNRAT[????]JC-????),providing a scienti?c basis for further opti-mizing the operational environment.

In June ????, the Company commissioned the Jiaozuo Shanyang Ciming Outpa-tient Department to conduct occupational health examinations on ??? occupa-tional disease hazard-exposed personnel, covering all individuals who shouldundergo examinations during their employment. The actual number of individu-als examined was ???, achieving a ???% examination rate. The examinationresults indicated no suspected cases of occupational diseases or occupationalcontraindications, culminating in the acquisition of the ???? Annual Occupation-al Health Examination Summary Report of Boai NKY Co., Ltd.

Examined individuals

Examination rate

%

The Company continuously enhances its occupational health management system by conducting regular occupational health risk assess-ments and health monitoring, aiming to reduce occupational disease risks and provide employees with a safe and healthy work environment.

The Company adheres to corporate social responsibility, demonstrating care for society through tangible actions and actively ful?ll-ing philanthropic duties. We continuously increase investments in philanthropic donations, community development, and ruralrevitalization, striving to create more sustainable social value and promote the mutual development of the enterprise and society.

Education SupportThe Company focuses on thegrowth of underprivilegedstudents by providingscholarships to assist them insuccessfully completing theirstudies. NKY o?ers ascholarship of ??,??? RMB tounderprivileged students,taking action to promoteeducational equity.

The Company activelyengages in environmen-tal protection bydonating ? million RMBto the EnvironmentalProtection PublicWelfare Fund to supportecological conservationand sustainabledevelopment.

The Company plays an active role invarious social welfare activities,including donating ???,??? RMB tothe construction of a beautifulcountryside in Bo'ai Tuwang Village,contributing ???,??? RMB to themedical care integration project, andparticipating in the ?? Charity Day bydonating funds, earning the title of"Outstanding ParticipatingEnterprise" on the ?? Charity Day.

The Company focuses on grassroots public serviceorganizations, donating ??,??? RMB to the ?? FireBrigade and Armed Forces Department, and ??,??? RMBto the Guitun Village public welfare projects,contributing to local community development.

Employment and Economic Contribution

The Company collaborates with local human resourcesdepartments to regularly organize social recruitment activi-ties, thereby promoting the development of the job market.During the reporting period, NKY was honored with the titleof "Henan Province Manufacturing Industry ChampionEnterprise," leveraging its industry strengths to contributeto local government revenue and create numerous jobopportunities.

The Company actively responds to the national rural revitalization strategy by leveraging its business strengths to support rural economicprosperity, ecological improvement, and enhancement of people's well-being through measures such as industrial assistance, technologicalsupport, and green development.Empowering rural revitalization

5556

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing

02Lean

Development03Green

for Win-Win

04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

Occupational Health and Safety Risk Assessment to Ensure Employee HealthCase

ESG ContributionSocial AssistanceCorporate Social Responsibility

Talent development and university collaborationThe Company has established partnerships withFudan University, Xi'an Jiaotong University, and localmaritime universities to provide students withinternship and employment opportunities. Addition-ally, the Company o?ers preferential employmentpolicies for special groups such as veterans andpeople with disabilities, facilitating their integrationinto society.

The Company activelyengages in local cultural activities,supporting the ??th HenanProvince "Three Mountains Climb-ing Together" mass mountain?tness event, and sponsoring thecounty's Spring Festival Gala toenrich residents' cultural life andenhance community cohesion.Educational Knowledge Dissemination

During the reporting period, Genergy Bio-Technology provided the ESAISinterdisciplinary curriculum program to local high school students for thefourth consecutive year. The curriculum covers various scienti?c topics,including the principles of gene sequencing, o?ering a solid platform forscienti?c enlightenment and hands-on practice.

Industrial synergy andemployment promotionNKY has initiated a new ??,???-tonlithium battery dispersant project,with strong support from the localgovernment and township. This notonly promotes rural industrialupgrading but also generatesnumerous local job opportunities,attracting migrant workers toreturn to their hometowns andinjecting vitality into the ruralareas.

Technology assistance in agric-ulture and talent developmentThe Company leverages itsadvantages in mechanicalmanufacturing and chemicalequipment to provide customizedagricultural machinery to rural areas,along with conducting technicaltraining to enhance farmers'production capabilities. Additionally,the Company establishes equipmentmaintenance service points in ruralareas to o?er long-term employ-ment support.

Environmental Protectionand Green DevelopmentThe Company advocates for greeno?ce practices and cleanproduction to reduce pollution inthe production process. Itpromotes the resource utilization ofproduction waste to contribute torural environmental improvement.Additionally, the Companyprioritizes purchasing agriculturalproducts from impoverished areasas employee bene?ts, aiming tostimulate rural economies throughconsumption.

Education philanthropy andinfrastructure support

The Company donates educationalequipment to rural schools tosupport rural educationdevelopment. Throughphilanthropic donations, itpromotes the construction of ruralinfrastructure, enhancing thequality of life for rural residents.

Key Performance Table

TopicIndicatorUnit2024

EconomicPerformanceMarketPerformance

CorporateGovernance

RiskManagement

Total government subsidiesLocal senior management ratioTotal number of board directorsNumber of female directorsPercentage of female directorsNumber of independent directorsAverage tenure of board membersNumber of supervisory board membersNumber of senior executivesCEO-to-employee pay ratioSupervisory board meetings heldBoard meetings heldAudit committee meetings heldRemuneration committee meetings heldNomination committee meetings heldTotal number of internal auditsIssues identi?ed through internal auditsIssues recti?ed after internal auditsInternal audit issue recti?cation rate

10,000 RMB

%PersonsPersons%Persons

YearsPersonsPersons

%

Times

Times

Times

Times

Times

Times

Cases

Cases%

702.07

22.22

3.4

1889.7

TopicIndicatorUnit2024

BusinessEthics

EnvironmentalCompliance

EnergyManagement

WaterManagement

Senior decision-makers trained on business ethicsPercentage of senior decision-makers trainedExecutives trained on business ethicsPercentage of executives trainedEmployees dismissed or disciplined for ethical violationsContracts terminated due to business ethics violationsLegal cases related to anti-competitive behavior,antitrust, or monopoly lawsReports ?led through whistleblower mechanismsEmployees trained in environmental a?airsSites with environmental risk assessmentsGasoline consumptionDiesel consumptionPurchased thermal energyNatural gas consumptionPurchased electricity consumptionOf which: green electricityTotal water consumption

Persons%Persons%CasesCasesCasesCases%%TonsTonsMJCubic meters

kWhkWhTons

55.56

1.33

1.71

111,81815,574,796.5068,923,50723,000,000302,991.00

5758

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

2024Total material consumptionRenewable materials consumptionPercentage of renewable materials usedNon-renewable materials consumptionTotal particulate matter (PM) emissionsTotal nitrogen oxides (NOx) emissionsTotal sulfur oxides (SOx) emissionsTotal volatile organic compounds (VOCs) emissionsTotal wastewater dischargedIndustrial wastewater dischargeCOD discharge in wastewaterAmmonia nitrogen discharge in wastewaterBOD5 discharge in wastewaterSuspended solids (SS) in wastewaterTotal solid waste generatedTotal hazardous waste generatedTotal non-hazardous waste generatedHealth and safety incidents related to products/servicesLegal penalties for violations

TonsTons%TonsTonsTonsTonsTonsTonsTonsTonsTonsTonsTonsTonsTonsTonsCasesCases

43.19

19.19

44.43

2.67

4.55

3.67

0.43

0.77

96,823.5296,823.52

9.31

0.04

2.15

1.97

62.07

2,592.58

2024O?cial warnings for violationsViolations of voluntary codesVeri?ed customer privacy complaints receivedVeri?ed privacy breach incidentsTotal customer privacy breach incidentsTotal number of invention patentsNew invention patentsTotal utility model patentsNew utility model patentsTotal design patentsNew design patentsViolations related to product/service labelingRegulatory penalties for labeling violationsO?cial warnings for labeling violationsVoluntary code violations related to labelingViolations in marketing communicationsRegulatory penalties for marketing violationsO?cial warnings for marketing violationsVoluntary code violations in marketing

CasesCasesCasesCasesCasesItemsItemsItemsItemsItemsItemsCasesCasesCasesCasesCasesCasesCasesCases

5960

TopicIndicatorUnitTopicIndicatorUnit

MaterialManagement

PollutionPrevention

Product Safety& Quality

Product Safety& Quality

Privacy & DataSecurity

ProductInnovation

ResponsibleMarketing

AboutThis Report

Chairman'sAddressAbout NKY

2024 Environmental, Social, and Governance Report

Manufacturing02Lean

Development

03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

2024Total number of employeesFemale employeesMale employeesFemale employee proportionFull-time employeesMiddle & junior-level managersFrontline employeesEmployees under 30Employees aged 30–50Employees over 50Employees with postgraduate degreesEmployees with bachelor’s degreesEmployees with associate degreesEmployees with other quali?cationsEmployees with disabilitiesEthnic minority employeesVeteran employeesNew hires

PersonsPersonsPersons%PersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersons

1,163

24.5

1,163

TopicIndicatorUnit

Compensation& Bene?ts

2024

Employment

New male hiresNew female hiresNew hires under 30New hires aged 30–50New hires over 50Employee turnoverMale turnoverFemale turnoverTurnover under 30Turnover aged 30–50Turnover over 50Overall turnover rateMale employees eligible for parental leaveFemale employees eligible for parental leaveMale employees who took parental leaveFemale employees who took parental leaveMales who returned post-parental leaveFemales who returned post-parental leave

PersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersons%PersonsPersonsPersonsPersonsPersonsPersons

16.08

6162

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing

02Lean

Development

03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

TopicIndicatorUnit

Employment

2024Employees covered by independent unionsor collective bargainingEmployees covered by collective agreementsEmployees represented by elected worker repsEmployees trained on diversity, discrimination,or harassmentTotal training sessionsTotal training hoursEmployees trainedAverage training hours per employeeMale employees trainedAvg. training hours for malesFemale employees trainedAvg. training hours for femalesExecutives trainedAvg. training hours for executivesMid/junior managers trainedAvg. training hours for mid/junior managersFrontline employees trainedAvg. training hours for frontline sta?

%%%%TimesHoursPersonsHoursPersonsHoursPersons

HoursPersons

HoursPersons

HoursPersons

Hours

800.16

42.32

60.61

58.78

98.75

118.05

62.69

2024Annual training expenditureTraining coverage rateEmployees receiving regular performance/career assessmentsWorkers covered by OH&S management systemsWork injury insurance expenditureCoverage rate of work injury insuranceOccupational injury insurance expenditureOccupational injury insurance coverageSafety production liability insuranceEmergency drills conductedSafety inspections (regular & ad hoc)Hazards identi?edHazards recti?edSafety training sessions heldEmployees trained on safetyTotal safety-related investmentNumber of work injuriesNumber of work accidents

10,000 RMB

%%%10,000 RMB

%10,000 RMB

%10,000 RMB

TimesTimesItemsItemsTimesPersons10,000 RMBPersonsCases

35.44

80.64

41.97

11.07

1,456.63

6364

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing

02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

TopicIndicatorUnitTopicIndicatorUnit

OccupationalHealth & Safety

OccupationalHealth & Safety

EmployeeRights

2024

Lost work hours due to injuryWork-related fatalitiesWork-related health incidentsSuppliers evaluatedSuppliers identi?ed with major negative impactsTotal charitable donationsVolunteer headcount (instances)Number of public welfare activitiesTotal hours of public welfare activitiesTotal rural revitalization investmentBene?ciaries of rural revitalization programs

HoursPersonsCasesEntitiesEntities10,000 RMBInstancesTimesHours10,000 RMBPersons

DimensionNumberTopicCorresponding Article(s)Report Chapter

Environment

Social

Climate Change ResponsePollutant EmissionsWaste DisposalEcosystem and Biodiversity ProtectionEnvironmental Compliance ManagementEnergy UseWater Resource UseCircular EconomyRural RevitalizationSocial ContributionInnovation-driven DevelopmentTech EthicsSupply Chain SecurityFair Treatment of SMEsProduct and Service Safety and QualityData Security & Customer Privacy ProtectionEmployees

Articles 21–28Article 30Article 31Article 32Article 33Article 35Article 36Article 37Article 39Article 40Article 42Article 43Article 45Article 46Article 47Article 48Article 50

Low-Carbon Transformation: Supporting Climate NeutralityGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green Mountains

Caring for Society: Ful?lling Public Welfare ResponsibilitiesCaring for Society: Ful?lling Public Welfare ResponsibilitiesTechnological Empowerment: Stimulating Innovation

Not ApplicableGreen Procurement: Building a Sustainable Supply Chain

Not ApplicableQuality First: Creating Excellent ProductsInformation Security: Comprehensive Risk PreventionProtecting Rights: Building a Harmonious WorkplaceEmpowering Growth: Supporting Talent DevelopmentHealth First: Safeguarding Occupational Safety

Report Index Table

Guidelines No. ?? of the Shanghai Stock Exchange for Listed Companies ? Sustainable Development Report (Trial)

6566

OccupationalHealth & Safety

Supply ChainManagement

SocialImpact

National StrategyResponse

TopicIndicatorUnit

AboutThis Report

Chairman'sAddressAbout NKY2024 Environmental, Social, and Governance Report

Manufacturing02Lean

Development03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

Boai NKY Medical Holdings Ltd. reports the following disclosures for the period from January ?, ???? to December ??, ???? with reference tothe GRI Standards (????):

SustainabilityGovernance

Due DiligenceStakeholder CommunicationAnti-bribery and Anti-corruptionAnti-unfair Competition

Article 52Article 53Article 55Article 56

Green Procurement: Building a Sustainable Supply ChainESG Empowerment: Enhancing Robust GovernanceIntegrity and Compliance: Building a Trustworthy DefenseIntegrity and Compliance: Building a Trustworthy Defense

GRI CodeDisclosure TitleCorresponding Report Chapter

General DisclosuresMaterial TopicsEconomic PerformanceMarket PresenceIndirect Economic ImpactsProcurement PracticesAnti-corruptionAnti-competitive BehaviorTaxMaterialsEnergyWater and E?uentsBiodiversity

About This ReportAbout NKYESG Empowerment: Enhancing Robust Governance

About NKYKey Performance TableKey Performance TableGreen Procurement: Building a Sustainable Supply ChainGreen Procurement: Building a Sustainable Supply ChainIntegrity and Compliance: Building a Trustworthy DefenseIntegrity and Compliance: Building a Trustworthy DefenseRefer to the relevant sections in the Annual ReportGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green Mountains

EmissionsWasteSupplier Environmental AssessmentEmploymentLabor/Management RelationsOccupational Health and SafetyTraining and EducationDiversity and Equal OpportunityNon-discriminationFreedom of Association and Collective BargainingChild LaborForced or Compulsory LaborSecurity PracticesRights of Indigenous PeoplesLocal CommunitiesSupplier Social AssessmentPublic PolicyCustomer Health and SafetyMarketing and LabelingCustomer Privacy

Green Operations: Protecting Clear Water and Green MountainsGreen Operations: Protecting Clear Water and Green MountainsGreen Procurement: Building a Sustainable Supply ChainProtecting Rights: Building a Harmonious WorkplaceProtecting Rights: Building a Harmonious WorkplaceHealth First: Safeguarding Occupational SafetyEmpowering Growth: Supporting Talent DevelopmentProtecting Rights: Building a Harmonious WorkplaceProtecting Rights: Building a Harmonious WorkplaceProtecting Rights: Building a Harmonious WorkplaceProtecting Rights: Building a Harmonious WorkplaceProtecting Rights: Building a Harmonious Workplace

Not ApplicableNot ApplicableCaring for Society: Ful?lling Public Welfare ResponsibilitiesGreen Procurement: Building a Sustainable Supply Chain

Not ApplicableQuality First: Creating Excellent ProductsCustomer-Centric: Optimizing Service ExperienceInformation Security: Comprehensive Risk Prevention

Global Reporting Initiative (GRI) ? Universal Standards (GRI Standards ????)

AboutThis Report

Chairman'sAddressAbout NKY

2024 Environmental, Social, and Governance Report

Manufacturing02Lean

Development

03Green

for Win-Win04Striving

Key PerformanceTable

ReportIndex TableGovernance01Excellent

6768

DimensionNumberTopicCorresponding Article(s)Report ChapterGRI CodeDisclosure TitleCorresponding Report Chapter

Dear Reader,Greetings! Thank you for reading the ???? Environmental, Social, and Governance (ESG) Report of Boai NKY Medical Technology Group Co., Ltd.To continuously improve our ESG practices and enhance our ESG management capabilities, we highly value your opinions and suggestions.We kindly invite you to complete the following feedback form and return it to us via one of the contact methods listed below:

Telephone: +?? ???-??????Fax: +?? ???-???????Website: www.boai-nky.comEmail: board.sec@nkygroup.cnMailing Address: No. ????, East Section of Wenhua Road, Boai County, Jiaozuo City, Henan Province, China

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