ESG Report 2023

7.2.3 Unannounced Compliance Inspection To fulfill the compliance requirements for daily promotional activities and academic events and promptly identify and correct compliance issues, the Group has established a compliance department flight inspection process for market promotion. This process ensures that work is carried out in compliance with the law. The compliance department conducts unannounced inspections, which include but are not limited to reviewing the compliance of the company and its authorized sales personnel in various regions regarding promotional activities, event notifications, academic exchanges, and compliance with relevant regulations and standards in interactions with related organizations and individuals. The inspections also cover adherence to daily operational norms and compliance guidelines. Flight inspections are typically conducted by a team of 1-2 inspectors led by a team leader who is responsible for the entire inspection process, follow-up corrective actions, and any subsequent penalties. The inspection methods include: Within five working days after the completion of the inspection, the inspection report, records, and related documents are uploaded to the compliance department for filing. The inspected department or personnel should make necessary adjustments and submit a written corrective action report to the compliance department within seven working days from the date of receiving the inspection results or report. The compliance department will promptly follow up on the progress of the corrective actions. Summary of Sales Personnel Inspection Checklist Unannounced Whether there are instances of advertising prescription drugs on the OTC side. Whether the content used in promotions complies with relevant laws and regulations, and whether there are any violations of advertising laws. Verification of the sources of promotional materials and whether they have been reviewed, including whether the promotional materials were produced locally. Whether the use of promotional materials is compliant, and whether there is reuse of promotional materials, such as the reuse of academic conference scene materials on the OTC side. Whether the promotional methods and types of activities carried out are compliant. 01 Instances of tampering with product distribution. Violations related to the allocation and resale of pharmaceutical products. Promoting pharmaceutical products at end-points without the necessary qualifications. 02 Accompanying sales personnel during their daily work. Conducting on-site inspections at workplaces or offices. Reviewing daily work reports and specific job responsibilities on the OA platform. 45 Conducting interviews, surveys, or written examinations. Pharmaceutical Advertising and Promotion Pharmaceutical Good Supply Practices (GSP) Instances of improper exchanges of benefits with store personnel. Non-compliant promotional activities, such as impersonating doctors or conducting work under the guise of being a doctor. Compliance of the venues for promotional activities and instances of conducting promotions in locations not authorized for OTC business. Compliance of the types of promotional activities conducted, such as buy-one- get-one promotions. 03 Compliance of OTC Daily Promotional Activities Environmental, Social and Governance Report 2023 The United Laboratories International Holdings Limited