Fraud runs counter to Yili’s corporate culture and values, and anti-fraud is the foundation for the normal function of the company. Yili Group has put in place an anti-fraud system under which employees are left with no opportunity and no desire or audacity to engage in corruption. We maintain zero tolerance for any violation of regulations and laws and any malpractices that fall into the “Yili’s Off-limits Area” and harm the company’s interests. Strong actions will be taken to hold offenders accountable.

Yili Group believes that every manager should serve as a bear-carrier of corporate culture and lead by example to preserve a clean workplace while strengthening management and guiding employees to do righteous things.

In 2022, Yili Group found six cases of violations, resulting in the dissolution of labor contracts with seven employees, four of which were prosecuted by judicial authorities for criminal liability in accordance with the law. Meanwhile, five people of our business partners suspected of criminal violation were prosecuted by judicial authorities for criminal liability in accordance with the law. We disclosed five cases in the first half of this year, and another one in the second half of this year is as follows:

Former Yili employee Yan *bo violated relevant regulations of Yili Group by taking advantage of his post to misappropriate RMB 600.000 through a false claim of expenses for the advertising campaign. Yili Group dissolved the labor contract with him. He was prosecuted for crime of duty encroachment under the Criminal Law.

Lessons on offer by the aforementioned cases are poignant and call for our reflection. Employees and relevant business partners should take warnings from them. It is imperative for all departments to refine management and procedure, strengthen integrity education, and step up punishment once corruption is found.

Newly-added Entities to the Backlist in the Second Half of 2022:

Gansu Tuosheng Construction LLC.

Gansu Xingyi Jianye Construction Co.

Daqing Houyuan Logistics Co.

Baotou Xindonghui Fire Equipment Co.

Baotou Donghui Business and Trade Co.

Mishan Xicai Waste Recycling Station

Henan Gongzhong Fire Equipment Technology Co.

Zhengheng Electricity Construction Co.

Henan Lvjian Fire Protection Technology Co.

Zhaodong Boda Automobiles Sales Co.

Suihua Zhongyuanyi Automobiles Sales and Service Co. Zhaodong Branch

Zhaodong Longda Automobiles Distribution Center

To build a sound business ecology featuring integrity and self-discipline requires the concerted efforts of employees, suppliers, and business partners to fight against corruption. For any corruption, bribery, and fraud, employees, suppliers, and business partners are obliged to stop it or report it to the Group via phones, email, or mail. Once confirmed, cases will be made public and offenders will be severely punished.

E-mail: yljw@ynlady.com；yilijubao@163.com

Telephones: 0471-3357805

Mail Address: Inner Mongolia Autonomous Region, Hohhot, Jinshan Development Zone, Jinshan Street No. 1 Inner Mongolia Yili Industrial Group Corporation Discipline Inspection Committee Office