ESG Report 2022

Supplier Qualification When selecting new suppliers, we conduct a terms of environmental protection, the Group comprehensive evaluation on the suppliers' follows the principle of proximity for procurement. industrial standard, reputation, product price, Suppliers are concentrated in nearby provinces, quality of samples, etc. based on the internal which effectively reduces transportation costs and principles of “5S”, namely suitable price, suitable carbon emissions during transportation. At the place, suitable quality, suitable quantity and same time, the Group encourages the selection of suitable time, so as to ensure the overall quality suppliers who provide energy-saving products and and material quality of the supply chain. Only the environmentally friendly products promoted by the suppliers who meet the related requirements can state to reduce the impact on the environment. be included in the list of qualified suppliers. In Suitable price, suitable place, suitable quality, suitable quantity and suitable time “ 5S” Principles Environmental Protection Principles Observing the principle of proximity during procurement Purchasing energy-saving products and environmentally-friendly products promoted by the Country Besides, we will conduct monthly written or on-site production management, shipping logistics and audits on the cooperating suppliers’ facilities, quality management. processes, and daily operations. The Group will In addition, the Group will confirm whether the assign employees or third-party auditors to conduct suppliers have established health records for their on-site or investigation assessments of the facilities employees and whether they have verified the air and processes of indirect/secondary suppliers. The purification equipment to identify and promptly content subject to review includes resource eliminate the social and environmental risks of the management, quality management, design and supply chain. The monthly audits help the Group to development management, production and further determine the performance and service procurement management, and warehouse standard of its suppliers, eliminate inappropriate management. The auditor will report and provide suppliers, so as to avoid any suppliers without recommendations on the assessment results after related qualifications or with unstable product the review is completed. The audit content for daily quality from entering the supply chain of the Group operations includes qualification certificates, and affecting the product quality of the Group. personnel qualifications, environment and factories, equipment quality, material management, During the Year, the Group had a total of 119 major suppliers in terms of purchase amount, providing the Group with raw materials, auxiliary materials and packaging materials. Supplier Distribution East China North China Central China Southwest China Northwest China South China Contents Supplier Selection Principles 38 Environmental, Social and Governance Report 2022 The United Laboratories International Holdings Limited 21 . 9% 30 . 3% 17 . 6% 5% 1 . 7% 2 . 5% 0.8% Supplier Distribution 20 . 2% Northeast China Outside of China