ESG Report 2020

This production and operation model helps the explore room for improvement, and enhance the Group to reduce the external demand for major sustainability of the supply chain. In addition, as a raw materials used in the production process, raw material supplier for many antibiotic lower the risk of unstable supply and market price companies, the Group has been giving the highest fluctuations on the supply chain, so that we can priority to quality that the pharmaceutical effectively control production costs and ensure intermediates and bulk medicine produced by the stable production. In addition, full control of the Group have passed many authoritative supply chain also helps the Group to retroactively certifications such as Chinese GMP, EU CEP, and manage the production process, so as to find the US FDA. root cause of potential problems, continue to Supplier Qualification When selecting new suppliers, we conduct a place, suitable quality, suitable quantity and comprehensive evaluation on the suppliers suitable time, so as to ensure the overall quality industrial standard, reputation, product price, and material quality of the supply chain. Only the quality of samples, etc. based on the internal suppliers who meet the related requirements can principles of “ 5S ” , namely suitable price, suitable be included in the list of qualified suppliers. ’ Supplier Selection Principles “5S” Principles Suitable price, suitable place, suitable quality, suitable quantity and suitable time Environmental Protection Principles Observing the principle of proximity during procurement Purchasing energy-saving products and environmentally-friendly products promo- ted by the Country Besides, we will regularly conduct written or on- suppliers, eliminate inappropriate suppliers, so as site audits on the cooperating suppliers. The audit to avoid any suppliers without related content includes qualification certificates, qualifications or with unstable product quality from personnel qualifications, environment and entering the supply chain of the Group and facto r i e s , equ i pment qua l i t y , mate r i a l affecting the product quality of the Group. In terms management, production management, shipping of environmental protection, the Group observes logistics and quality management. In addition, the the principle of proximity during procurement. The Group will confirm whether the suppliers have suppliers cluster in the nearby provinces, which established health records for their employees and can effectively reduce transportation cost and whether they have verified the air purification carbon emissions during transportation. At the equipment to identify and promptly eliminate the same time, the Group encourages the selection of social and environmental risks of the supply chain. suppliers that provide energy-saving products and environmentally-friendly products promoted by the Regular audits help the Group to further determine Country to lessen the impacts on the environment. the performance and service standard of its Raw Materials Bulk Medicine s Users Pharmaceutical Intermediates Finished Products PRODUCTION AND OPERATION MODE 45 Environmental, Social and Governance Report 2020 The United Laboratories International Holdings Limited Contents