ESG Report 2023

Advertising Law of the People’s Republic of China Standards for the Examination and Publication of Drug Advertisements Measures for the Examination of Drug Advertisements Relevant Laws and Regulations and Guideline Product Marketing and Promotion Aspects Internal Policies Compliance Department Unannounced Inspection Process (Marketing Promotion Category) Sales Code of Conduct Compliance Promotion Guidelines Regulation on Registration, Review, and Management Policy for Pharmaceutical Representatives 7.2 Product Marketing and Promotion Pharmaceutical sale is a key sector of the Group's business, while requirements for pharmaceutical promotion information are much higher and more stringent than those of general commodities. In light of this, the Group regulates the distribution and promotion of pharmaceuticals in strict accordance with relevant laws and regulations 7.2.1 Promotion The Group has formulated relevant systems that clearly enumerate the Group's advertising requirements, application procedures of advertisement and promotion data feed, precautions for use, etc. All pharmaceutical promotion information released by the Group is based on scientific evidence, complies with the principles of accuracy, objectivity, and completeness, and contains corresponding package inserts to clarify the correct medication methods. All these comply with legal requirements. In order to ensure that the Group's advertisements comply with relevant laws and regulations, the samples of the advertising materials must be submitted to the Group's Audit and Legal Affairs Department for review before being released. 7.2.2 Responsible Marketing The Group has established a pharmaceutical preparation sales distributor or distributor management system, which is implemented by the Credit Risk Management Department to reduce the risk of bringing a negative reputation to the Group during the process. When selecting new dealers or distributors, the Group will evaluate the company's qualifications, storage conditions, business scope permits and other criteria, and sign sales contracts with qualified dealers or distributors. The storage conditions of dealers or distributors must strictly comply with the pharmaceutical storage conditions and requirements stated in the manuals for storage and use. At the same time, when quality problems emerge, they must cooperate with the Group to report and investigate the problem, collect evidence, and carry out follow-up work to guarantee the quality of products. The Group will establish archives with the cooperating dealers and distributors to completely record information, such as corporate qualification documents, signed contracts and inventory turnover. The collected data will be used for analysing, evaluating and rating dealers and distributors to effectively manage product sales. When conducting product sales activities, we require all staff at all departments to abide by relevant laws and regulations and ethics of the industry. All sales personnel must sign the Letter of Commitment for working according to laws and be committed to complying with national regulations as well as the regulations and rules of the Group being the “Sales Code of Conduct” and “Compliance Promotion Guidelines”, in order to eradicate any violation of regulations regarding sales and promotion, ensuring the Group only conducts responsible marketing. The Group’s sales team spread all over the Country, and the management of sales personnel, including recruitment, performance appraisal, training and occupational safety are collectively handled and supervised by the Group’s Head Office. This ensures that the related management personnel and frontier promotion personnel have received necessary training, and all the sales personnel have reached the same professional level so as to provide customers with the best service. In the Year, responsible marketing training was conducted for all sales personnel, focusing on the "Compliance Promotion Guidelines" and "Considerations for Drug Advertising During the Pandemic". Through these trainings, our goal was to enhance the sales team's understanding of compliance requirements and improve their professional competence and sense of responsibility during the promotion process. 42 Environmental, Social and Governance Report 2023 The United Laboratories International Holdings Limited