ESG Report 2024

45 Environmental, Social and Governance Report 2024 The United Laboratories International Holdings Limited 8.1 Sustainable Supply Chain Management Efficient supply chain management is an important foundation for manufacturing enterprises to ensure stable operations. For the Group, the sustainable operation of the supply chain is not only a prerequisite for business operation, but also an excellent opportunity to enhance productivity. The Group is committed to improving the supply chain structure, optimising the procurement process and making continuous efforts in the development, monitoring, evaluation and management of suppliers. We maintain a healthy and sustainable supply chain system through the implementation of material supplier management practices. In terms of contract management, the Group's procurement contracts have clearly stipulated items such as requirements on quality of goods, delivery standards, delivery terms, intellectual property terms and integrity clauses, etc. to ensure the quality of goods supplied by suppliers and to reduce the legal and social risks in the supply chain. This production and operation model helps the Group to reduce the external demand for major raw materials used in the production process, lower the risk of unstable supply and market price fluctuations on the supply chain, so that we can effectively control production costs and ensure product quality. Besides, comprehensive control over the supply chain enables us to implement traceability management of production processes, allowing for the timely identification of potential issues and continuous optimisation, further enhancing the sustainability of the supply chain. As a raw material supplier for numerous antibiotic companies, the Group has been giving the highest priority to quality. The pharmaceutical intermediates and raw materials produced have passed several international authoritative certifications such as China GMP, EU CEP, and US FDA. 8.1.1 Production and Operation Model The Group has established a vertical integration of production and operation model of “pharmaceutical intermediates - bulk medicines - finished products”. Inner Mongolia Company purchases major raw materials for the production of pharmaceutical intermediates and , and then delivers them to the Group's other production sites for the production of bulk medicines and finished products, which are finally sold to end users through various channels. bulk medicines Standards for Quality Control of Pharmaceutical Production Measures for the Supervision and Administration of Drug Production Contract Law of the People’s Republic of China Measures for the Supervision and Administration of Circulation of Pharmaceuticals Supply Chain Sustainable Procurement Policy Supplier Code of Conduct Supplier Management and Review Process Anti-corruption Agreement Procurement Process Management Document Sustainable Procurement Policy and Green Engineering Aspects Relevant Laws, Regulations Internal Policies Raw Materials Bulk Medicines Finished Products Users Pharmaceutical Intermediates