Integrity is a basic element for every employee at Yili, and also embodied the contract spirit that every compliant partner should uphold. With a commitment to business integrity, Yili has drawn a “Yili’s Off-limits Area”, and established and refined the risk-management system and anti-fraud system. To ensure integrity among our employees, both pre-emptive and punitive measures are adopted.

Yili maintains zero tolerance for any practices that fall into “Yili's Off-limits Area”. For any violation of law, be it of our employees or our partners, we will fulfill our due legal obligation to facilitate the investigation of competent authorities and hold offenders accountable.

In the first half of 2021, the internal audit group of Yili found three cases of malpractice with eight employees being fired and four suspects being transferred to public security departments.

Former Yili employee Liang *ming, taking RMB 72,000 from suppliers under the table by taking advantage of his post, was dismissed for violation of the Staff Reward and Punishment System for Staff at Yili Group. In addition, Liang was prosecuted for non-governmental staff bribery under the Criminal Law.

Former Yili employee Zhao *liang and other four employees, taking RMB 126,000 from suppliers under the table by taking advantage of their posts, were dismissed for violation of the Staff Reward and Punishment System for Staff at Yili Group. In addition, Zhao was prosecuted for non-governmental staff bribery under the Criminal Law.

Former Yili employees Zhang *feng and Li *xin, taking possession of RMB 147,000 of company properties in complicity with a supplier, the legal person of Taiyuan Younuo Communication Co. by taking advantage of their posts, were dismissed for violation of Staff Reward and Punishment System for Staff at Yili Group. In addition, the above-mentioned three were prosecuted for crime of duty encroachment under the Criminal Law.

All Yili’s suppliers or business partners who have been found guilty of seeking illegitimate interests through bribery or other improper means will be blacklisted. They will no longer be considered for cooperation nor will their services or products be accepted. Should there be offense of national laws, they will be transferred to relevant authorities.

Newly-added Entities to the Backlist in the First Half of 2021:

Jiangxi Pugongying Advertising and Communication Co.

Datong Yungang District Lingdu Advertising and Communication Co.

Chifeng Fangwei Printing LLC

Tianjin Si Qi Ji Yi Advertising Co.

Luohe Qifeng Business and Trade Co.

Xiamen Xiasheng Industry and Trade Co.

Shuyang County Xinwei Advertising Co.

Shannxi Haichuang Industrial Development Co.

Zongcang Ecology LLC

We encourage all employees, suppliers, and business partners to report any Yili employees who have committed or are suspected of corruption, fraud, and/or malpractices by telephones, email, or mail:

Email: yljw@ynlady.com；yilijubao@163.com；pangang@ynlady.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

Yili Group Auditing Department

2021 June