China Resources Pharmaceutical : 2020 Sustainability Report

Hold Hands for

Love and Health

China Resources Pharmaceutical Group Limited

Sustainability Report

2020

Contents

Message from CEO	03
About Us	05

Feature

Fighting COVID-19 with Concerted Efforts	19
Healthy Village Program - The Light of Hope	21

Topic Management and CSR Communication	63
Outlook	65
Appendix	67

	Guarding Your Health with Our
23	Quality Services
Boosting Development with Innovation	25
	Ensuring Drug Quality	29
	Improving Customer Service	30
	Improving Health Accessibility	32

Pursuing Ecology-oriented

35		Development with Ingenuity
		Paying Attention to Environmental Management	37
		Practicing Green Operation	38
		Sharing a Green Life	40
		Striving for Win-Win Cooperation
41		with Concerted Efforts
	Supply Chain Management	43
		Win-win Cooperation	45

Sharing the Good with Empathy

47	Protecting Employees' Rights and Interests	49
Boosting Career Growth	51
	Caring for Employees	54
	Guaranteeing Occupational Health and Safety	56

Contributing to Society with Kindness

57	Fueling the Final Fight Against Poverty	59
	Engaging in Community Development	60
	Devoted to Charity	62

Sustainability Report 2020	4

Message from CEO

2020 was an extraordinary year full of challenges. The sudden outbreak of COVID-19 pandemic disrupted our business operation and management and imposed great challenges on many annual objectives. CR Pharmaceutical braved the difficulties and took proactive measures in tackling the pandemic and industry changes. We accelerated innovation and transformation, fostered new opportunities in crises, and created new prospects in the face of changing circumstances. We have triumphed the initial stage of pandemic containment, achieved overall business performance as expected, and made new progress in fulfilling corporate social responsibility.

We were all in this fight against the pandemic, ensuring steady supply and stable price. A responsive and efficient organization system and work mechanism was immediately developed under unified command. The many executives and grassroots employees devoted themselves in this relentless fight, especially our colleagues in Wuhan and other areas of Hubei, who united as one and held fast at the front-line.During the 2020 Spring Festival, over 30,000 employees from more than 300 subsidiaries stayed on their jobs. They drove the efficient and orderly recovery of production in the industrial chain and facilitated the steady growth of the economy.

We forged ahead with the mission of safeguarding human health. Putting "human health" at the core of our business, we advocate rational medication and meet the more extensive health needs of individuals and society. Despite the COVID-19impacts, the policy of volume-basedprocurement, and shrinking end markets, our operational profit and net profit both achieved year-on-yeargrowth. We also implemented measures to improve quality and boost benefits, advanced the integration of informatization and industrialization and facilitated digitalization reform, so as to enable a more rational allocation of resources.

We are dedicated in research and development to enrich the innovation "reservoir". Guided by national policies, the trends of industry and technological development, as well as market demands, we continue to enhance our R&D and innovation capabilities, increase R&D investment, optimize R&D platforms, and develop new incentive mechanism to motivate our teams. Many products passed the consistency evaluation, and CR Sanjiu and CR Biopharmaceutical were named Technological Reform Demonstration Enterprises. Empowered by technology, we strive to create and promote innovative models and accelerate digital transformation. To pursue technological and service innovation and with a strong sense of mission, we uphold a forward-lookingvision and patriotism in our innovation, remaining steadfast to our strategy.

We take concrete actions to make the sky bluer, the mountain greener, and the water lucider. We consciously raise our ecological awareness and steadily progress the 137 items in the Three-YearAction Plan for Ecological Environmental Protection and Pollution Source Control. Besides, we actively tackle climate change and

respond to the national goal to peak emissions before 2030 and to achieve carbon neutrality before 2060. With outstanding performance in green and high-quality development, five factories of CR Pharmaceutical, including CR Double-Crane Beijing Industrial Park and CR Sanjiu Guanlan Production Base, won the honorary title of National-level Green Factories.

We join hands with stakeholders to boost the health industry. We have deepened cooperation and exchanges with the government, scientific research institutes, and companies at home and abroad, and sign strategic partnership agreements to explore new operation models. By improving supplier management and supporting the growth of partners, we strive to promote the sustainable development of China's pharmaceutical and healthcare industry.

With fraternity and inclusiveness, we respect the value of each and every employee. We make every effort to create an equal, diverse, and interdependent workplace, protect the legitimate rights and interests as well as the health of employees. A variety of cultural activities have been organized, and a comprehensive and multilevel talent training system has been established to contribute to the common growth of employees and the Company.

We devote ourselves to building a moderately prosperous society with improved health services. Attaching significance to the primary-levelmedical and healthcare facilities, we implemented the Healthy Village Program with a focus on improving the professional skills of general practitioners. We organized 104 online training sessions for primary-leveland village-baseddoctors, contributing to the successful battle against poverty and building a moderately prosperous society in all respects.

As a traditional sector, the pharmaceutical industry will see reform and innovation as the new norms in future industry development. In the face of new environments and new trends, we will seize and foster opportunities and create vitality amidst crises. We will embrace new things, new ideas, new models, breaking out of the conventional mindset to apply cross-border thinking to traditional formats, so as to empower traditional business with technologies, thus reshaping our value in the pharmaceutical industry.

2021 marks the first year of the 14th Five-year Plan and a critical juncture where the timeframes of its two centenary goals converge. CR Pharmaceuticals will enter a fast-track of development and become a high-speed train that drives the people towards a healthy and safe future.

HanYuewei

Executive Director and CEO of CR Pharmaceutical

5

China Resources Pharmaceutical Group Limited

Sustainability Report 2020

6

About Us

Company Profile

China Resources Pharmaceutical Group Limited (CR Pharmaceutical) (Stock Code: 3320.HK) is a leading integrated pharmaceutical company in China specializing in manufacturing, distribution, and retail of medicines and nutraceutical products. Since the Company went public, it has introduced a number of important capital market indexes, including Hang Seng Composite LargeCap Index, FTSE Global Large Cap Index, Morgan Stanley Capital International (MSCI) China Index, Hang Seng Stock Connect Hong Kong Index, etc.

The Fourth largest pharmaceutical manufacturer

• Its business covers a wide range of treatment fields such as chemical drugs, traditional Chinese medicine, biological drugs and supplements.
• Top OTC drug manufacturer

The Third largest pharmaceutical distributor

With a business layout coveringOperating a distribution network of

28	provinces, municipalities	176
	and autonomous regions		logistics centers

The Tenth largest retail pharmacy operator

Retail pharmacies

DTP (direct-to-patient) pharmacies

Total assets

209,371.76HK$ million

Revenue

200,423.02 HK$ million

Tax payment

8,155.53 HK$ million

Total employees

63,281

862 194

7	China Resources Pharmaceutical Group Limited	Sustainability Report 2020	8

Organizational Structure

Highlights of 2020

CR Pharmaceutical was rated Top 100 Companies in China.

CR Sanjiu and CR Double-Crane were among the "Value 100" listed companies in China.

Faster

completion of

high-quality

M&As

CR Jiangzhong won the Green Development

Award of the 15th People's Corporate Social

Responsibility Award.

Dong-E-E-Jiao won the 2020 China

Pharmaceutical Enterprise Social Responsibility

Award - the EHS Social Responsibility Award.

Major breakthroughs in technological

innovation

CR Pharmaceutical signed 35 international cooperation projects in 2020.

CR Sanjiu and Novo Nordisk jointly promoted the 10mg Norditropin NordiFlex®.

CR Sanjiu obtained the exclusive license from Oncoceutics for developing, manufacturing, and marketing the innovative drug ONC201 in Greater China.

High recognition

of the capital

market

CR Double-Crane acquired part of the stake of Dongying Tiandong Pharmaceutical Co., Ltd., enriching the products in the field of cardiovascular and cerebrovascular anticoagulation.

CR Sanjiu completed the acquisition of 100% equity interest in Aonuo Pharmaceuticals, improving categories of self-diagnosis and treatment products.

CR Sanjiu increased its capital in Runsheng Pharmaceutical, filling the company's gap in inhalation products.

Multiple social responsibility awards

The NIP292 program of CR Pharmaceutical was approved by the FDA as an orphan drug for the treatment of idiolytic pulmonary fibrosis (IPF).

CR Double-Crane's caffeine citrate injection product (Fetoca®) received the Drug Registration Approval Document issued by National Medical Products Administration (NMPA).

CR Jiangzhong won the Second Prize of the National Science and Technology Progress Award

Deepened

international cooperation

9

China Resources Pharmaceutical Group Limited

Sustainability Report 2020 10

Major Brands

11	China Resources Pharmaceutical Group Limited	Sustainability Report 2020	12

Corporate Governance

Compliance management

CR Pharmaceutical makes continuous efforts to consolidate corporate governance. We fulfill our responsibilities according to laws, regulate the operation of the Board of Directors, and improve compliance building, the strategic framework of risk management, as well as anti-corruption, striving to repay our investors with better business performance.

A sound governance structure is key to the inclusion of CR Pharmaceutical's sustainability issues into our agenda. We strictly abide by Hong Kong's Companies Ordinance and the listing rules of The Stock Exchange of Hong Kong Ltd., as well as relevant regulations

Comprehensive risk	CR Pharmaceutical emphasizes risk management and internal control. We continuously
management	strengthen the risk prevention and control ability of the Group and our subsidiaries
to enhance the effectiveness of our internal control system. In 2020, we improved
	the development of the audit system, and made progress in audit supervision, risk
	management, internal control evaluation, and other aspects despite the COVID-19
	pandemic, escorting the sound development of the Company.

For more information on policies, responsibilities, and composition of the Board and general meeting of shareholders, please refer to the 2020 Annual Report of CR Pharmaceutical or visit our official website https://www.crpharm.com/ tzzgx/gsgz/gzjg/

formulated and promulgated by the regulatory authorities, to ensure regulated and orderly operation.

Improving the governance structure

To seek support and advice for decision-making, the Board has established five committees underneath, namely the Remuneration Committee, Nomination Committee, Audit Committee, Corporate Governance Committee and Executive Committee. They provide support and suggestions for decision-making bodies, formulate policies on director nomination and diversity of board members, and regulate the functions, powers, and policy implementation rules. The Board attaches great importance to law-based responsibility fulfillment: In 2020, we held one general meeting of shareholders, five Board meetings, three Audit Committee meetings, one Remuneration Committee meeting, three Nomination Committee meetings, one Corporate Governance Committee meeting, and eight Executive Committee meetings, the numbers of which all met or exceeded the required by the Listing Rules or terms of reference.

Beforehand: Risk management. Risk management and internal control evaluation in CR Pharmaceutical are organized.

Intermediate: Consultation service. We focus on process supervision and consultation on important issues.

Afterwards: Internal audit. We carry out the audit in accordance with strategic management themes and mandatory audit requirements of the Internal Audit Department of China Resources (Holdings) Co., Ltd.(CR)

Supervision

Service strategy

Risk prevention

Value creation

Evaluation

Consultation

Practicing business ethics	The Corporate Governance Committee carries out business ethics supervision in
	accordance with the Company Law of the People's Republic of China, the Law of the
	People's Republic of China Against Unfair Competition, and other laws and regulations.
	The committee strengthens the management of corruption, embezzlement, and fraud
	issues, and strictly forbids such violations. In 2020, there were no significant corruption

Improving institutional guarantees

Compliance supervision system

Integrity culture building

		cases in CR Pharmaceutical, and 6* persons were punished for violations of rules and
		disciplines.
			Number of directors received
Warning and education conferences held *	With participants more than *	anti-corruption training *
3		5,200	65
Total hours of of anti-corruption training	Number of employees received	Total hours of of anti-corruption
for directors *		anti-corruption training *	training for employees *
156	hours	5,135	61,620	hours

*Note: The data came from the headquarters of CR Pharmaceutical and its directly managed enterprises CR Pharma Comm, CR Sanjiu, CR Double-Crane, and CR Jiangzhong.

C R P h a r m a c e u t i c a l h a s r e v i s e d t h e Administrative Measures for Assigned Directors and Supervisors to improve its corporate governance mechanisms, including the selection, appointment, and duties of directors, and has improved the Measures for the Management of Commercial Information Confidentiality in Investment Cooperation to strengthen the legal protection for business secrets, clarify the internal management responsibilities for the confidentiality of commercial information, and avoid the risk of infringement and disclosure of business secrets. We have formulated the Measures for Centralized Management of Letters and Calls and Problem Clues to protect those who report embezzlement and corruption, and strictly deal with such acts as disclosing information of whistleblowers and providing convenience for retaliating against whistleblowers in accordance with regulations and discipline.

We have formulated seven rules and regulations, including the Management Measures for the Comprehensive Supervision Work System, to standardize discipline enforcement and effectively prevent legal and disciplinary violations. The comprehensive supervision working mechanism has been clarified with a total of 51 risk points sorted out for more effective supervision. Platforms for reporting through mobile phones and WeChat have been opened to enhance public supervision.

We have made great efforts to promote and implement the Code of Business Conduct of China Resources (Holdings) Co., Ltd. Based on our values of "Integrity First, Performance Driven, Human Oriented, Innovation Constantly" and compliance concept of "Compliance Promotes Business Progress and Excellence," we have signed compliance commitment letters with all staff members to enhance the integrity awareness of all staff.

13	China Resources Pharmaceutical Group Limited	Sustainability Report 2020	14

Operation	industry, CR Pharmaceutical actively responds to changes in the market and environment,
Management	Based on the opportunities brought by the development and reform of China's healthcare
businesses and facilitate the rapid growth of new businesses. Our operation and control
	and strengthens innovation and transformation to consolidate its market position of core
	has been improved continuously, securing our leading role in the market.

Pharmacy

We keep strengthening our capabilities in R&D, production, sales, and industrial chain operation to expand our businesses in the biopharmaceutical sector. We continue to consolidate our leading position in core areas while accelerating the release of new products, so as to create products for industrial use.

Accelerating the establishment of R&D platforms in key regions, innovating in mechanisms, enhancing R&D capabilities and strengthening external cooperation to accelerate product acquisition

Expanding international cooperation to accelerate the acquisition of products and technologies, and seek opportunities for overseas expansion

Establishing a cross-regional, multi- business, and multi-model coordination mechanism to strengthen the advantages of resource allocation throughout the industrial chain

R&D

and

Innovation

International Cooperation

Synergistic

Effects

Investment

and

M&As

Internal

Improvement

Institutional

Innovation

Investing in innovation and other fast- growing areas, entering new markets with high potentials and putting capitals to full use to push forward the industrial integration

Improving the business structure and strengthening operation control to advance industry upgrading

Deepening reforms on institutional innovation, and benchmarking against world-class enterprises to enhance competitiveness

Distribution

We strive to expand new businesses, provide one-stop solutions, and improve the distribution network and our product mix.

Steady business growth

Total assets (HK$)

million

YoY growth

10.18%

Sustainable business development

In response to COVID-19 and policies, we have improved our management and the industrial layout by optimizing business structure towards innovation-driven development. In 2020, we achieved steady business growth supported by better operation.

Net profits (HK$)

million

YoY growth

4.43 %

Embracing the changes in the environment, the market, and policies, we innovate in systems and mechanisms and increase our input in innovation to speed up the growth of new businesses on the basis of interior collaboration, achieving sustainable and sound business growth.

E-commerce	Growth in medical	Growth in imports	Covered by our
business	devices business	and exports	business network

RMB	25	billion	40%	26%	28	provinces

Downstream	Logistics centers	Growth in
customers	third-party logistics
11,000 176	40%

Retail

We quicken the integration of retail resources to build an integrated operation system, and speed up the construction of professional pharmacies and community-based pharmacies, creating strong competitive advantages with standardized, differentiated, and specialized services. By far, we have a total of 862 self-operated retail pharmacies, including 194 specialized DTP pharmacies, and achieved a 9.4% year-on-year growth in operating revenue despite the COVID-19 pandemic.

15 China Resources Pharmaceutical Group Limited	Sustainability Report 2020	16

Excellence operation	We have made continuous efforts to deepen the evaluation of excellence operation,
management	introduce more innovation-oriented indicators related to product introduction, R&D
capacity building, and intelligent ability, etc., and encourage our subsidiaries to participate
	in CR's six-star enterprise certification. The development of the excellence operation
	evaluation system is also launched to help build an exchange platform for profit centers.

Protection of

the Rights and

Interests of

In compliance with the Listing Rules of HKEx, CR Pharmaceutical actively performs its responsibilities as a listed company and ensures that related transactions are fair and reasonable. Besides, we actively respond to the calls and requirements of the nation, strengthen asset supervision and inspection, improve the capital structure, guard against capital risks, and improve our operation quality, keeping all operating indicators in a healthy state in 2020.

Lean management projects

87

Project benefits

Improving the evaluation system: We have improved the excellence operation evaluation system to highlight the guiding role of innovation, increasing the proportion of innovation- driven development indicators by 8% year on year. 41 subordinate enterprises have launched the key excellence operation evaluation to strengthen basic management and base operating efficiency on an ongoing basis.

Promoting the six-star factory certification: Five subsidiaries of CR Pharmaceutical, namely CR Jiuxin Pharmaceutical Co., Ltd., CR Sanjiu Guanlan Production Base, CR Double-CraneBeijing Industrial Park, CR Sanjiu (Zaozhuang) Pharmaceutical Co., Ltd.

Investors

CR Pharmaceutical continuously strengthens its investor relations management, and ensures better information disclosure and investor communication to keep stable and harmonious investor relations. By establishing a sound investor communication mechanism, we have expanded information disclosure channels to facilitate two-way interaction with investors, accurately disclose important information, such as corporate strategy, major issues, corporate operations, and financial performance in a timely manner, continuously improve information transparency and credibility in the capital market, and enhance investors' confidence in us.

RMB 31.75million

Enhanced investment capacity

and CR Jiangzhong Wanli Production Base, were rated "six-star" model factories of CR.

Promoting exchanges in the manufacturing sector: CR Pharmaceutical has promoted the exchange and sharing of management experience of CR Sanjiu and CR Jiangzhong factories on TCM treatment, preparations, and on-sitemanagement.

CR Jiangzhong Wanli Production Base is rated a six-star factory of CR

We seize every opportunity of industry transformation and upgrading, pay close attention to investment and M&A issues, and continue to revise our rules and regulations. We have formulated the Post-investmentEvaluation Guidelines of China Resources Pharmaceutical Group Limited to improve closed-loop management, and realized sustained business growth driven by M&As and innovation.

Reports and letters of	Information disclosure channels
notification released at HKEx

59	◈ Annual reports and interim reports
◈ Provisional notices reported to HKEx
	◈ Official website
Domestic/overseas	◈ Annual general meetings of shareholders
investor summits
◈ Press releases and corporate
12	communications

Communication and exchange activities

• Long-terminvestor communication and roadshow meetings for periodic performance disclosure
• Investor exchange meetings, summits, and one-to-one promotion meetings
• Daily investor reception, investor calls and letters, consultation and other regular activities

CR Double-Crane	CR Sanjiu increased	CR Sanjiu completed	CR Double-Crane
acquired the stake of
Dongying Tiandong	its capital in Runsheng	the acquisition of 100%	acquired Zhejiang
Pharmaceutical Co., Ltd.,	Pharmaceutical, filling	equity interest in Aonuo	Peptides Biotech Co.,
enriching the products in	the company's gap in	Pharmaceuticals,	Ltd., launching its
the field of cardiovascular	inhalation products.	improving categories	transformation towards
and cerebrovascular		of self-diagnosis and	bio-medicine.
	treatment products.
anticoagulation.

2020 Annual Results Announcement

17	China Resources Pharmaceutical Group Limited

Sustainability Report 2020

18

Sustainability

As a leading integrated pharmaceutical company in China, CR Pharmaceutical shoulders the mission of "Protecting Human Health and Improving Quality of Life." We care about public health and actively assume social responsibility. Over the years, we have been

ESG supervision and management by the Board

Strategy

Holding hands

Holding hands with the government, shareholders, staff, partners and customers to serve the public and jointly promote the sustainable development of China's pharmaceutical and healthcare industry.

committed to "Holding Hands for Love and Health", striving to improve the quality of life.

	Cooperation	Green	Development
-Win
Win
Organizational
	System

Organizational management

CR Pharmaceutical's Board of Directors assumes full responsibility for the Company's environment, social responsibility, and corporate governance (ESG) strategy. The Board is responsible for assessing and determining ESG-related risks and opportunities and ensuring that the Company has a qualified and effective ESG risk management and monitoring system. The Board holds regular meetings to clarify supervision responsibilities and improve relevant processes. The Corporate Governance Committee under the Board ensures that appropriate and effective ESG risk management information is prepared and reported to the Board. To fulfill its responsibilities, the committee shall carry out ESG training on ESG Reporting Guide, Listing Rules, and other documents issued by the HKEx, and keep the Board informed of the latest ESG rules and progress as well as methods used to achieve their goals.

To improve the ESG management structure, we have established the ESG Committee in 2020 in accordance with the Environment, Society and Governance Reporting Guide issued by HKEx. The committee is mainly responsible for reviewing ESG-related objectives, formulating development plans, supervising the Company's ESG management, etc., and reporting to the Corporate Governance Committee regularly. The ESG Committee has a detailed internal division of work and responsibilities. For more details, please see the Responsibilities of the ESG Committee of China Resources Pharmaceutical Group Limited.

Love

CRPG aims to practice benevolence, improve people's health and enhance people's quality of life.

For heath

CRPG gives priority to human health and provides safe and highquality medicines and service to the public.

CreationValue	Development Philosophy	Hold Hands	Working Mechanism	HarmonySocial
for Love
and Health
			Responsible
			Brand
	Staff	Care		Customer	First

Sustainability strategies of CR Pharmaceutical

System development

Capability building

Board of Directors

Corporate Governance Committee

ESG Committee

Corporate	Environmental,	Labor and Human	Social Contribution	Secretariat
Governance Working	Safety, and Quality	Rights Working
Working Group
Group	Working Group	Group

ESG organizational structure

Through the release and implementation of the Regulations of China Resources Pharmaceutical Group Limited on Social Responsibility Work, we enhance the indicator system, improve performance management, practice communication management, prepare and disseminate reports, conduct evaluation and assessment of the sustainability management system, and urge the social responsibility work group to fulfill its tasks.

CR Pharmaceutical actively participates in research and communication activities related to the pharmaceutical industry and corporate social responsibility at home and abroad. Moreover, we invite our partners and social responsibility research institutions to provide CSR trainings to facilitate the sustainable development of the industry.

Sustainability	role of the Board in sustainability management and promoting the integration of the
Management	CR Pharmaceutical keeps improving its sustainability management by emphasizing the
sustainability concept into corporate strategy, production, operation, and management.

F o r s e v e n c o n s e c u t i v e y e a r s , C R	CR Pharma Comm has adjusted the members of its	Thanks to its continuous efforts and
corporate culture and social responsibility committee
Pharmaceutical have prepared sustainability	excellent performance in various fields
and improved relevant systems to ensure the smooth
reports and encouraged our subsidiaries	of sustainable development, such as
operation of social responsibility mechanisms. At the
to prepare social responsibility reports, and	business operation, products and
release conference of the Blue Book of Corporate
improved social responsibility management	services, and green development, CR
Social Responsibility 2020	, CR Pharma Comm
and practices to enhance the social	Sanjiu won the ESG Responsibility
shared its industry-leading social responsibility
responsibility information disclosure.	Practice Award of the 2020 DIA GOLD.
practices.

19 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 20

Fighting COVID-19	promptly established a pandemic response working group and organized
with Concerted	In early 2020, in response to the COVID-19 outbreak, CR Pharmaceutical
production as soon as possible. We guaranteed stable supplies of anti-
Efforts	all employees to devote themselves to the resumption of work and
virus materials and safeguarded people's life and health.

Contributing to the victory of COVID-19 control

• CR Sanjiu's Shenfu injection was included in the Diagnosis and Treatment Plan for Novel Coronavirus

Pneumonia, and the company was approved to produce the compound granule preparation Qingfei Paidu Decoction to fully support the frontline of the battle against the pandemic.

• CR Jiangzhong launched the Ruijie disinfectant wipes and put into production the Wenfei Huaxian Granules to facilitate clinical treatment of COVID-19 cases.

CR Jiangzhong renovated the workshop in 19 days to guarantee the production of masks

Building a community with a shared future for COVID-19 fight

Giving full play to our advantages in a global supply chain, we actively cooperated with our international partners to promote the export of anti-virus medical supplies and assist the global fight against COVID-19.

Initial victory in the COVID-19 fight

On January 24, CR Pharma Comm made the decision on ensuring a stable supply of pandemic prevention materials. Jiang Ying, General Manager of China Resources Taian Pharmaceutical Co., Ltd., took the lead in setting up a pandemic control team to coordinate the supply of related materials. Jiang Ying and her team stuck to their positions during the Spring Festival. They worked day and night selflessly and coordinated near a thousand suppliers to contribute to the normal operation of the healthcare system. A total of 860,000 masks of various types, 3,850 protective suits, 1.209 million pairs of disposable gloves, 19,685 sets of isolation gowns, 930 pairs of goggles, and other materials were delivered to isolation points, designated hospitals, and medical staff in the first time. Jiang Ying thus won the honorary titles of Role Models in the National Fight Against COVID-19 and Excellent Volunteers in the Provincial Fight Against COVID-19, as well as the May 1st Labor Medal of Shandong Province. Her spirit has inspired all staff of CR and even the whole society, and solidified their conviction to win the battle against COVID-19.

Jiang Ying

General Manager of China Resources Taian Pharmaceutical Co., Ltd.

We are a responsible company. In the face of the pandemic, CR employees will brave all winds and storms together with you.

As of the end of 2020

RMB 2.4 billion

Of anti-virus materials had been exported to Ireland, Belgium, South Korea, Japan, Thailand, etc.

CR Pharma Comm provides anti-virus materials to the Irish Government

Case

Supporting the compilation of the COVID-19 Diagnosis and Prevention Guidebook to support international pandemic response

As of the end of June 2020

Spent on purchasing drugs and	Donated in the name of the Company
devices for pandemic control	and individual employees
RMB	11.81	billion	RMB	10.81	million

CR Pharmaceutical vigorously supported the compilation of the COVID-19Diagnosis and Prevention Guidebook, which summarizes China's experience and lessons in the early stage of pandemic control, as well as experience in medical treatment, pandemic prevention, communication, logistics, bailouts, and resumption of work. The Chinese and English versions of the guidebook have been shared with governments of Brazil and other countries where the pandemic is still raging, as well as hundreds of Fortune 500 companies and international organizations to help them tide over difficulties.

21	China Resources Pharmaceutical Group Limited

Sustainability Report 2020 22

Healthy Village

Program - The

Light of Hope

Actively responding to the national call, CR Pharmaceutical, based on its expertise and resources, strives to promote poverty alleviation driven by healthcare and pushes for the integrated development of urban and rural medical services. Together with the China Women's Development Foundation, we launched the CR Healthy Village Program in September 2020. Centering on the Outline for the Development of Chinese Women (Children), the "Healthy China 2030" Planning Outline, and the Rural Vitalization Strategy, CR Healthy Village Program aims to mobilize primary-level medical institutions to form a county-level community under

1. county-township-villagecoordination system to further the reach of medical resources and improve the health of the people.

Online learning

In light of the opinions and suggestions of healthcare authorities, pundits, and trained practitioners, we have formed a team of expert consultants, set up targeted courses, and built an online training platform to give online training for primary-level doctors and continue to improve their professional competence.

• An interconnected and sustainable learning platform was built.
• Primary-levelpractitioners from departments of gynecology and obstetrics, cardiovascular,

neurology and other five major areas received targeted training.

• Led by 11 experts, the professional subject teaching and research group with 73 expert members provided trainings in 2020.
• 104 online training sessions were offered to primary-level and village-based practitioners.
• More than 1.6 million practitioners participated in the training.

Aided construction

Strong assistance

The official launch of the CR Healthy Village Program

Project

missionImproving primary-level medical services to help rural residents live a healthy life

We assisted the construction of three village clinics in Hong'an County in Hubei, Jianhe County in Guizhou, and Haiyuan County in Ningxia, and donated more than RMB 2 million of drugs and devices to the four old revolutionary base counties, namely Hong'an County in Hubei, and Qingliu County, Mingxi County, and Taining County in Fujian, benefiting more than 5,000 local families.

We launched one-to-one targeted assistance programs in CR & WISCO General Hospital and Hubei Hong'an Soviet Area Hospital. Based on an "experts + youth practitioners" model, we launched remote consultation, assigned experts to local hospitals, organized free diagnosis activities regularly, and initiated targeted donations, effectively improving comprehensive services of primary-level medical institutions.

Two programs for free clinical diagnosis and training village-based practitioners were organized in Haiyuan County, Ningxia and Wenshan Zhuang and Miao Autonomous Prefecture, Yunnan respectively. The programs helped over 90 village-based practitioners master more than 20 TCM techniques and diagnosed and treated more than 1,200 villagers.

Three-tier promotion Three-level construction

Support

from four

dimensions

Project

Objectives

County-level hospitals

Township-level health service centers

Village-based practitioners

Treatment of serious diseases in the

Treatment of common diseases in the

Treatment of minor diseases in the village

county

township

improvement Education

key for Support departments

of improvement Overall hospitals

improvement Education

outstanding Cultivating practitioners backbone

featured Building departments

improvement Education

qualified Training practitioners general organizing and appropriate on training technology

qualified Training level-primary and practitioners level-village building clinics

Software (intangible)

Hardware (tangible)

Online

Offline

• Network platform support

• Pharmaceutical assistance

• Online training

• Offline training

• Assistance for department

• Equipment assistance

• Remote consultation

• Free clinical diagnosis and

construction

• Support for standardization

• Remote Q&As

training

• License granting

• Assistance for health

• Media publicity

• Further education

• Certificate and honorary

service center construction

• Targeted tutoring by experts

titles, etc.

To establish a team of

To develop a training

To build an

To create a series

To explore a "one-

of practical skill

to-one" assistance

professional trainers

curriculum suitable

interconnected

training models

model targeting

to train grassroots

for grassroots

and sustainable

for village-based

county-level

practitioners

practitioners

learning platform

practitioners

hospitals

CR Pharmaceutical donates to the construction of Sanming City, Fujian

The program for free clinical diagnosis	Chen Jinwu, Professor of Trauma Surgery from CR & WISCO General Hospital,
and training village-based practitioners	is assigned to Hong'an Soviet Area Hospital to provide surgical demonstration
in Guanqiao Village, Haiyuan	teaching

Guarding Your Health with Our Quality Services

Sustainability Report 2020 24

Product quality is vital to the survival and development of pharmaceutical companies. We emphasize the importance of drug quality management, guarantee drug supply and fair pricing, provide customers with high-quality, responsible, and accessible health services, thus fully meeting customers' health needs.

Our Focuses

Innovation-driven development

Quality management

Service improvement

Health accessibility

Our Actions

Responsible operations

Deepening drug quality management

Leading and developing the industry standards Quality service improves customer experience Quality medical resources for all

Contribution to the SDGs

Quality training sessions organized

4,368

Participants covered

231,400

25 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 26

Boosting Development with Innovation

In 2020, CR Pharmaceutical formulated the CR Pharmaceutical R&D Strategy to promote innovation and transformation and enhance the R&D of new drugs. Upholding CR's R&D philosophy of "highlighting innovation and combining generic and innovative drugs," we aim to continuously stimulate new momentum for corporate development.

• The class I small-molecule innovative drug NIP046 developed by the The National Institutes of Pharmaceutical R&D Co., Ltd. was approved for clinical use.
• CR Double-Crane'scaffeine citrate injection product (Fetoca®) received the Drug Registration Approval Document issued by the National Medical Products Administration (NMPA) and was the only drug of its kind to be regarded as passing the consistency evaluation.

Creating an innovation system

We have established the CR Pharmaceutical Innovation and Knowledge Development Committee and the CR Pharmaceutical Science and Technology Committee, and formulated the Administrative Measures for CR Pharmaceutical Science and Technology Committee, with a sound R&D management system. Based on the Pharmaceutical Administration Law of the People's Republic of China and the Administrative Measures for Drug Registration, the Administrative Measures for CR Pharmaceutical Innovation and R&D has been issued to improve the R&D demonstration mechanism for new products and to regulate R&D behavior.

• CR Jiangzhong rolled out its new product "Jiangzhong Lihuo Probiotics," which went to space in China's experimental new-generation manned spacecraft and returned successfully for subsequent studies.

Unleashing the power of	By continuing to enhance our drug research and development capabilities and stimulating
innovation	technical staff's will to innovate, we aim to facilitate the realization of the strategic goal
of "enhancing imports in the short term, strengthening cooperation in the medium term,
	and focusing on independent innovation in the long term," and further enhance our core
	competitiveness.

A pilgrim on the road of new drug development

CR Pharma's class I new drug NIP292 received the Orphan Drug Designation (ODD) issued by the Food and Drug Administration (FDA) for the treatment of idiopathic pulmonary fibrosis (IPF), and is currently undergoing phase I clinical studies in the United States. The NIP292 project led by Dr. Yan Xu's research team kicked off in 2016. Starting

Better scientific research facilities

We have built multiple R&D centers and scientific research platforms to ensure the development of new drugs and contribute to the long-term strategic goal for R&D work.

	The
	National Institutes
CR Double-	of Pharmaceutical	CR Biopharm
Crane	R&D Co., Ltd.
Research			Research
		Institute
Institute
CR Sanjiu			CR
		Jiangzhong
Research
		Research
Institute
		Institute

Dong-E-		China Resources
E-Jiao		Pharmaceutical		CR Zizhu
Research		Research Institute		R&D Center
Institute

from scratch, they braved all difficulties to find out solutions among numerous patents and documents. Affected by COVID-19, the team maintained close contact with the manufacturer through telephone calls, video chats, and emails, and stationed in the laboratory 24 hours a day to carry out experiments and trial production repeatedly. Finally, the product met the standards for clinical drug testing. NIP292 is CR Pharmaceutical's first drug approved for clinical trials in the United States, and it marks a breakthrough for the Company in developing innovative drugs. With such an achievement, CR won the golden prize of the 2020 Best Science and Technology Innovation Award. During the obstacle-packed long journey of R&D, CR Pharmaceutical will strive for

Yan Xu

Vice General Manager of The National Institutes of Pharmaceutical R&D Co., Ltd.

In recent years, the incidence of IPF has rocketed, with its mortality rate second only to tumors and survival period of only two to three years. Without effective medication, IPF patients could only rely on corticosteroids and immunosuppressive agents to control their conditions while

Enthusiasm for innovation

Based on our reform and R&D management model and innovation incentives, we have issued the Administrative Measures for Innovation Projects and the Administrative Measures for Innovation Fault Tolerance and set up an innovation project management model and operating mechanisms. Incentive policies, such as allowing research personnel to hold shares and co-invest in projects, have been tried out, and project-based assessment mechanisms have been adopted to enhance the effect of innovation incentives.

truth relentlessly, face up to all difficulties and be a pilgrim on the road of new drug development.

suffering from severe side effects. We hope to help alleviate patients' pain and extend their lives.

R&D investment (HK$)

Research staff (headcount)

Projects under research

Newly applied patents

billion

YoY growth

YoY growth

YoY growth

YoY growth

4.33 %

51.56%

32.67%

8.79%

27 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 28

Support, cooperation, and guidance

While strengthening our support f o r p ro d u c t i n t ro d u c t i o n a n d collaborative development, we put external platforms, including industry-university-research alliances and CROs, into better use, so as to share each other's advantages and resources and jointly promote innovation.

Transformation of innovation achievement

CR Pharmaceutical and Research Institute of Tsinghua University in Shenzhen (RITS) jointly established a laboratory.

CR Sanjiu and Shenzhen Bay Laboratory signed a cooperation agreement to jointly promote the preclinical and clinical research of the QBH-196 project with WuXi AppTec.

CR Biopharm Research Institute signed strategic cooperation agreements with East China University of Science and Technology, School of Life Sciences ofc Nankai University, etc.

CR Jiangzhong signed strategic cooperation agreements with the Institute of Chinese Materia Medica under China Academy of Chinese Medical Sciences, China National Research Institute of Food & Fermentation Industry Co., Ltd. etc.

CR Jiangzhong signed a probiotic clinical research cooperation agreement with the First Affiliated Hospital of Nanchang University and the Key Laboratory of Dairy Biotechnology and Engineering of the Ministry of Education.

We promote the application of innovation achievements and improve our R&D level by combining generic drugs with innovative drugs. In strict compliance with research ethics, we obtain animal experiment licenses according to law, and enhance disease prevention and control based on responsible research and innovation. In 2020, we submitted the applications to NMPA for the launch of clinical trials of three drug products. Among them, a new class I chemical drug for the immune system and a new class I biologic drug for the blood circulatory system were approved for clinical trials by NMP, and an innovative tumor drug product had been introduced and is currently undergoing phase II/III clinical research in the United States.

Case

Tackling difficulties in new drug R&D and protect human health

Focusing on the research and development of innovative drugs, we have promoted the application for clinical licenses and experiments on the anti-tumor class I innovative drug NIP142 and M2ES (PEGylated recombinant human endostatin), a lung cancer class I innovative drug. CR Sanjiu has obtained the exclusive right to develop and manufacture the innovative drug ONC201 for brain glioma in Greater China, which is undergoing a critical clinical stage.

Exploring digital	Relying on modern technology, we have embarked on digital and intelligent transformation
transformation	towards intelligent manufacturing. By innovating in smart factory models, we have
shortened product development cycles and improved drug manufacturing efficiency,
	contributing to the "created in China" strategy in the medical sector.

Case

CR Sanjiu rated Intelligent Manufacturing Benchmarking Enterprise of China (3rd Batch), the only drug manufacturer honored the title

Active in promoting intelligent manufacturing, CR Sanjiu has worked to create a new Chinese medicine manufacturing model driven by digital twins, cloud computing, IOT, blockchain, and other technologies, which features network- wide coordination based on distributed cloud. In 2020, the company's total production efficiency increased by 20% and manufacturing costs

			Pitavastatin Calcium
			Tablets passed
			the consistency
			evaluation of the
Montmorillonite		Misoprostol Tablets	quality and efficacy of
Powder passed		became the first	generic drugs
the consistency		of its kind to pass
evaluation of the		the consistency
quality and efficacy		evaluation of the
of generic drugs	Mifepristone Tablets became	quality and efficacy of
	generic drugs	Montmorillonite
	the first of its kind to pass
	the consistency evaluation		Granules passed
	of the quality and efficacy of		the consistency
Valsartan Capsules	generic drugs		evaluation of the
		quality and efficacy of
(Suiyue) passed
		generic drugs
the consistency
evaluation of the		Valsartan and
quality and efficacy
	Hydrochlorothiazide
of generic drugs
	Tablets (Fusuiyue)
		passed the consistency
		evaluation of the quality
		and efficacy of generic
		drugs

In 2020, seven products of CR Pharmaceutical passed the consistency evaluation of the quality and efficacy of generic drugs

dropped by 15%.

Case

Dong-E-E-Jiao's intelligent manufacturing new model project wins the first prize of national equipment management and technological innovation achievements

Dong-E-E-Jiao has built a new smart factory model featuring interconnection and full-process collaboration, realizing automatic collection, analysis, judgment, feedback, and self-driving of production data of gelatin-based Chinese traditional medicine. Once completed, the project will increase the overall production efficiency by 40.9%, shorten the product development cycle by 50%, and make up for China's three shortcomings in the production of related products.

IPR protection	In compliance with the Trademark Law, the Patent Law, the Anti-unfair Competition Law
	of the People's Republic of China, we promulgated the China Resources Pharmaceutical
	Group Limited Measures for the Management of Intellectual Property Rights and Files
	of R&D Projects, to regulate the management of intellectual property rights (IPRs) and
	files of R&D projects. To protect the IPRs of all stakeholders, we have established an
	IPR management system and protection mechanism to strengthen the integration of IPR
	formation and protection in all production activities and business operations.

29 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 30

Ensuring Drug Quality

Enhancing quality management

Faced with stricter regulation and harsher punishments, CR Pharmaceutical has established a sound management system for better quality management throughout the production and operation process to guarantees controllable drug risks, safety, and stability based on stable and lean operations.

Abiding by the Drug Administration Law of the People's Republic of China, the Good Manufacturing Practice for Drugs (2010 Revision), the Good Supply Practice of Pharmaceutical Products, and other laws and regulations, we have established a quality management system up to WHO, USP, and EU standards, and improved quality management in the whole lifecycle.

Ensuring product	We have established the Drug Safety Committee and a pharmacovigilance platform,
safety	through which we aim to deepen the pharmacovigilance awareness of all staff and
provide drills on handling drug safety emergencies, thus ensuring the safety of patients
	and consumers. In 2020, all products passed all quality requirements of CR Jiangzhong,
	CR Zizhu, and Dong-E-E-Jiao.

Product variety	Complaint by	Customer service
feature on the
review	phone
official website
	Document retrieval	Customer opinion
	collection by distributors

All manufacturers of CR Pharmaceutical have obtained the Good Manufacturing Practice (GMP) certification, all companies involved in drug marketing have obtained the Good Supply Practice (GSP) certification, and ten corporate laboratories have been accredited by the China National Accreditation Service for Conformity Assessment (CNAS) certification.

Strengthening system certification

Improving monitoring and evaluation

We carry out internal assessments and evaluations on the accomplishment of monthly and annual targets, quality supervision and inspections, etc. Through product quality "blind inspections" and audits, we strive to raise employees' quality risk awareness. In 2020, CR Pharmaceutical conducted "blind inspections" on 192 product varieties and quality audits on 192 companies.

Based on the Quality Risk Management System, we have formed a management and control system of "one responsibility, two advancements, four elements, and full cycle" to continuously reduce quality risks.

Tightening control over quality risks

Organizing quality training

Production quality management staff, quality managers/ authorizers, and production staff are trained on the management system, relevant laws and regulations, and pharmacovigilance knowledge.

Improving Customer Service

Improving the service system

Case

Expand channels for reporting adverse drug reactions to control drug safety risks

Tracking customer needs, CR Pharmaceutical improves the service system constantly, ensures information authenticity in drug promotion, and guarantees fair and reasonable pricing, providing services to the satisfaction of customers continuously.

We earnestly improve our systems, procedures, standards, and evaluation mechanisms, strengthen customer service team building and talent training, and comprehensively improve our service quality and timeliness of response.

Establishing a comprehensive service system in CR Sanjiu to realize better service quality

CR Sanjiu insists on providing reassuring, sincere, heart-warming, considerate, and dedicated services for customers.

Diverse services

Customized services

Timely response

Professional services

Active services

Our "999" customer service hotline provides more than 20 services in seven categories, including medication consultation, authenticity identification, trademark infringement, etc.

We respond to customers' needs and appointments by the 999 hotline, e-mail, customer service QQ account, and WeChat online customer service, and pay return visits in time.

Incoming calls are answered within ten seconds on average.

The customer service team organizes regular training and learning activities covering drug laws and regulations, pharmacology, knowledge about drug use, service skills, etc.

We conduct customer surveys by WeChat or phone to keep abreast of users' medication experience and feedback, thus ensuring two-way communication channels.

31	China Resources Pharmaceutical Group Limited	Sustainability Report 2020 32

Fair and reasonable pricing

Responsible publicity

In a bid to enhance drug affordability for patients, we make every effort to ensure drug supplies and stabilize drug prices in strict compliance with the Opinions on Promoting the Drug Pricing Reform, the Opinions on Supervising the Drug Price, and other laws and regulations. During the COVID-19 outbreak in 2020, we worked all out to stabilize supplies and prices of drugs in medical institutions, retail pharmacies and online e-commerce platforms.

Attaching significance to information authenticity and compliance, we set up a management committee to tighten the management and supervision of advertising activities. In accordance with the Drug Administration Law, the Provisions for Drug Insert Sheets and Labels, the Advertising Law of the People's Republic of China, and so on, CR Pharmaceutical formulated the drug label management system to strengthen the regulation of product packaging design, advertising release procedures, trademark applications and use, etc. We review drug labels

Improving

Health

Accessibility

Guaranteeing drug supplies

CR Pharmaceutical has established a complete after-sales service system that protects information security and user privacy and helps safeguard the rights and interests of consumers. By guaranteeing the supplies of drugs and medical devices, we aim to facilitate the community-based health care and contribute to the Healthy China initiative.

We actively undertake the mission of storing drugs and medical devices and improve modern medical logistics to guarantee supplies for primary-level medical institutions and remote areas and promote the sharing of health rights.

meticulously, clarify possible adverse reactions that may happen to a minority of patients, and standardize the disclosure of drug and service information. As an advocate for fair deal, we sell prescription drugs according to law and promote sustainable consumption.

Strict transportation management

All transportation vehicles are

Supporting the crackdown on counterfeit drugs

An all-aroundanti-counterfeiting and

Stabilizing drug supplies during COVID-19

We h a v e re s u m e d w o r k a n d

Case

Organizing training on compliance to build a responsible drug company

We offer marketing staff with regular trainings on marketing compliance, online sales, and other key topics. In CR Pharma Comm, marketing review and control is carried out through the ERP and OA systems, and job skill training is organized regularly to provide compliant and responsible drug information.

required to install GSP tracking units. Vehicles are selected based on drugs' storage conditions and quality attributes to deliver the drugs to community-based medical institutions and remote areas while ensuring the quality and safety of drugs.

rights protection system has been established for major sales area to support the police in investigating and cracking down on counterfeit d r u g s . B y t i g h t e n i n g a c c e s s management and the management of acceptance inspections, we have stopped the entry of counterfeit drugs into the market.

production promptly and ensured the orderly operation of drug production lines. Besides, drug reserve and emergency supply mechanisms have been established to prevent shortages of drugs, disaster relief medicines, and COVID-19 preventive supplies.

Improving customer experience

Innovative drug supply model

B y d i g i t a l i z i n g o p e r a t i o n a l management, we keep innovating in retail services and explore professional and efficient service models.

Attaching great importance to customer needs, we earnestly explore digital innovation and conduct satisfaction surveys via various methods in line with principle of "maximizing customer benefits," thus continuously improving customer service experience.

Satisfaction surveys

Customers' opinions on products, logistics, services, and other aspects are collected to help us make targeted adjustments. In 2020, the customer satisfaction rates of both CR Sanjiu and CR Jiangzhong reached 100%.

The fully automatic elevated shelf from CR Jiangzhong

Case

Dong-E-E-Jiao explores the digital drug supply chain

Dong-E-E-Jiao has built a digital system that connects producers with distributors and guarantees internal and external collaboration to support the digital operation of the OTC supply chain. By improving operational accuracy, we have realized the integration of ex-warehousing of products, transportation, delivery, and reconciliation, and improved work efficiency by more than 20%. Via an innovative cooperative operation model of Yaowangshan - Traditional Chinese Medicine Health Lecture + Digital Marketing Training Camp, our live streaming lectures reached 79,700 people in total.

Protecting the rights and interests of consumers

We provide various feedback channels for customers and respond to customers' requests in a timely manner. Based on a sound product recall and compliant mechanism, we have always guaranteed drug safety and health.

Considerate after-sales service

Return visits are a part of our after-sales service. We also provide channel dealers, terminal pharmacies, and consumers with consultation, remote guidance, and face- to-face consulting during their purchasing and use of products. Based on the Drug Electronic Administration Code (DEA Code) of China and other approaches, we ensure the authenticity and traceability of drugs.

33 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 34

Complaints handled

100 %

Customer requests and complaints handled in time

482

Information security and consumer privacy

We have improved our security protection system, enhanced our capabilities in managing information confidentiality and data security, and strengthened the monitoring of information leakages. In strict compliance with the Law of the People's Republic of China on Protection of the Rights and Interests of the Consumers, we firmly protect user data and other sensitive information. Sharing, transferring, or disclosing of users' personal information to any other company without permission is strictly forbidden.

Customer complaints and feedback handling

We have formulated management systems, such as the Customer Communication and Complaint Management System and the Adverse Reaction Monitoring and Reporting Management System to regulate the handling of customer feedback and complaints. Our customer feedback channels, including the customer service hotline, the official website, the e-commerce platform, the official WeChat account, are provided to customers, with a complaint handling process covering complaint acceptance, preliminary feedback, investigation and handling, feedback response, and analysis has been established.

Emergency drug recall and destruction

We have formulated the Management System for Drug Recalls and the Simulated Recall System, established the drug quality and safety information monitoring network, and carried out simulated recall drills regularly to prevent drug safety risks. To improve our contingency plans, we have prepared the emergency response procedures in accordance with the Comprehensive Contingency Plan for Food and Drug Safety Emergencies. Expired materials and samples are destroyed in time, and hazardous waste treatment agencies licensed by environmental protection authorities are hired to destroy and dispose of unqualified drugs. In 2020, we spent RMB 446,000 on stopping losses and making compensation.

In 2020, one quality incident occurred in CR Pharmaceutical in China, involving one subsidiary. We initiated drug recall procedures and carried out self-inspections to actively reduce and eliminate hazards, and caused no medication risks to patients.

Case

A response to the quality incidents of Jiangzhong Decoction Pieces Co., Ltd. happened before its merger into CR Jiangzhong

On March 23, 2018, Zhangshu Municipal Institute for Drug Control found two quality incidents related to the net hawthorn (180124) produced by Jiangzhong Decoction Pieces Co., Ltd. in a spot check. In response to the incident, CR Jiangzhong set up a rectification team to recall related products. They went to the place of production to help improve the quality inspection measures and sent the product to related authorities for another review, in which the product met corresponding requirements.

Jiangzhong Decoction Pieces Co., Ltd. formulated a rectification plan targeting non-conforming properties of fried malt and ash content in fried stiff silkworm founded on November 20, 2017. It promptly initiated the recall procedure and destroyed unqualified products in accordance with relevant regulations. At the same time, the company strengthened the training of quality managers to avoid similar incidents in the future.

Launching health-oriented	To improve people's health and quality of life, we organize targeted trainings, lectures, and
public welfare activities	other activities to spread knowledge about medicines and healthcare. By standardizing
the disclosure of drug and service information, we strive to ensure fair and accessible
	medical and health services at all levels at home and abroad, and provide patients and
	medical staff with high-quality medical solutions.

Case

Zizhu Pharmaceutical Youth and Health Campus Tour

Since 2005, CR Zizhu has organized the Zizhu Pharmaceutical Youth and Health Campus Tour campaign, which conveys positive energy of science and health through campus exhibition sites, lectures, and interactions via new media platforms. So far, the campaign has reached more than 400 universities in more than 20 provinces and regions across the country. More than 600 lectures on adolescent physiology and mental health topics have been organized, benefiting about 1.9 million university students.

From 2017 to 2019, subsidiaries of CR Pharmaceutical received three rectification notices on quality incidents from provincial food and drug administrations and the FDA, of which one has been rectified within the deadline.

The other two incidents of Jiangzhong Decoction Pieces Co., Ltd. happened before the company was merged into CR Jiangzhong. After the merger was completed,

we have comprehensively diagnosed the company's quality management system and made improvements accordingly to avoid similar incidents in the future.

Case

Health knowledge promotion through multiple measures

To enhance public health awareness, at CR Pharma Comm, we have established medical records for patients, provide education for patients with chronic diseases and rational drug use education at the Patient and Community Education Center, and invite well-known experts to give online or offline trainings on safe drug use. At CR Double-Crane, we offer detailed introductions of our key products and the characteristics of their clinical application on the official website, and provide targeted training for clinical and nursing departments on the use of certain products to continue to popularize drug and medical knowledge.

Pursuing Ecology- oriented Development with Ingenuity

Sustainability Report 2020 36

Practicing the idea of China's ecological progress, we actively respond to climate change to ensure a harmonious relationship between humans and nature and strengthen our green competitiveness.

Our Focuses

Ecological environment management

Addressing climate change

Emissions and waste management

Resource and energy use

Our Actions

Strengthening environmental management

Promoting green production

Practicing green office

Contribution to the SDGs

Implementation of pollutant discharge permit declaration*

100%

Total investment in energy conservation and emissions reduction*

RMB 32.42 million

Year-on-year decrease in comprehensive energy consumption*

7.99 %

*Note: The statistical scope covers all industrial organizations of CR Pharmaceutical.

37 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 38

Paying Attention to Environmental Management

CR Pharmaceutical strictly abides by the Environmental Protection Law of the People's Republic of China and other laws and regulations, strengthens environmental management from multiple dimensions, such as the organizational structure, supervision and assessment, indicator statistics and accounting, education and training, hazard identification and management, and contingency plans, in an effort to minimize environmental impacts of its business operations. The EHS Department puts forward suggestions for executive performance assessment in accordance with the EHS Supervision, Management, and Evaluation System of CR Pharmaceutical.

Practicing

Green

Operation

As global climate change deteriorates and extreme weather events become more frequent and intense, the cultivation, growth, and collection of Chinese medicinal herbs are challenging our operational capabilities. It ensuing problems such as the shrinking of medicinal materials and changes in medicinal properties, will bring new challenges to our operations. Facing those difficulties, CR Pharmaceutical mitigates its environmental impacts by means of energy conservation, emission reduction, and pollution control. We have also implemented series of eco-protection measures, including the protection of herb varieties, to strive for harmonious coexistence with nature. CR Pharmaceutical is on the way towards green operation.

Environmental Management Vision

CR Pharmaceutical integrates ecological progress into its corporate development strategy and will stick to the path of green development.

Environmental Management Strategy

With one policy for one subsidiary and one policy for one area put in place, CR Pharmaceutical helps all primary-level institutions to continuously improve their capabilities to manage and control environmental risks as well as pollution. The Company aims to resolutely eliminate various environmental risks and compliance issues, and make decisive progress in the battle against pollution.

Energy conservation and emission reduction

We continue to improve energy efficiency and accelerate low-carbon development through technological and management means, such as introducing clean and renewable energy like photovoltaic power and biomass energy, and improving the energy mix. We are exploring the path to carbon neutrality by making overall plans to reduce GHG emissions through energy management, green finance, etc.

Identifying environmental impact factors to reduce ecological impacts

CR Pharmaceutical issued and implemented the Three-Year Action Plan for Ecological Environmental Protection and Pollution Source Control (2018-2020),and has basically built an environmental governance landscape where "pollution must be controlled, control must be effective, and emissions must comply with laws and regulations." By summarizing past experience, we have developed the Environmental Protection Standards and Guidelines, and carried out an in-depthinvestigation and rectification of environmental protection issues. All the 137 environmental protection targets set in 2018 have been completed with a total investment of RMB 200 million.

Promoting energy saving and environmental protection technologies

We a c t i v e l y o r g a n i z e re s e a rc h , l e a r n n e w processes and technologies, and push forward the implementation of high-qualityenergy-saving and environmental protection projects. Companies including Dong-E-E-Jiao and CR Sanjiu Jinchan have built distributed photovoltaic power plants with a total installed capacity of 16MW, reducing CO2 emissions by an average of 12,586 tons per year.

Utilizing resources sustainably

We use new environmentally friendly packaging materials and technologies and reuse packaging cartons to reduce packaging waste, striving to build a green supply chain.

Recycling water resources

Building green factories

CR Pharmaceutical has built provincial or even national green factories with the support of national policies on green manufacturing, achieving the economic, social, and environmental benefits.

China Resources Benxi Third Medicine Co., Ltd. 5th batch, provincial level

CR Double-Crane Beijing Industrial Park 5th batch, national level

Dong-E-E-Jiao

4th batch, national level

CR Jinchan

4th batch, national level

Building a green team

CR Pharmaceutical has built a environmental protection expert database and exchange platform to enhance its self-examination capability and support for the operation of environmental protection equipment, ensuring efficient operation of environmental protection facilities.

Optimizing carbon emission management

We carry out research on related subjects and give full play to the role of the carbon inventory module developed by CR Jiangzhong to promote the improvement of energy efficiency management technologies and standards.

We continuously replenish water tanks with the water processed by sewage treatment stations as a way to recycle concentrated water. CR Sanjiu Jinchan saves 80 tons of water per day and has been therefore awarded the Water-conserving Enterprise of Anhui Province.

Optimizing distribution routes to reduce energy consumption of the fleet

In order to reduce the noise and air pollution generated during transportation, we promote the use of new energy vehicles and optimize the delivery routes to reduce emissions and energy consumption.

CR Jiangzhong Wanli Manufacturing Base 4th batch, national level

CR Sanjiu Guanlan Production Base 5th batch, national level

39 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 40

Pollution prevention and control

Technicians of CR Jiangzhong search for	Green Responsibility
carbon footprints and measure carbon	Award of CR Sanjiu
inventory

In accordance with the national medium- and long-term plan for pollution control and regional development plan, and based on the actual situation of the Company, we have developed the Work Plan of China Resources Pharmaceutical Group Limited on Comprehensively Improving Environmental Protection and other systems to promote the continuous optimization of pollutant control effects and costs, and win the battle against pollution.

In 2020, all industrial organizations applied for pollutant discharging licenses. They will continue to improve their capabilities of treating solid waste, wastewater, and waste gases, help establish a platform for post-licensing management and facilitate information disclosure.

Ecological protection

The fertile land, medicinal plants, clean water, and pure air that nature offers are what pharmaceutical companies depend on for survival. We actively carry out ecological restoration and governance, and have compiled the Eco-environmentalProtection Self-inspectionHandbook for CR Pharmaceutical's Grassroots Subsidiaries and the Plan of CR Pharmaceutical on Comprehensive Eco-EnvironmentalProtection. We also protecte biodiversity by regulating artificial cultivation of medicinal plants, using fewer wildlife resources, protecting endangered herbs, and investigating wild provenances in an effort to reduce impacts of herb planting, artificial cultivation of medicinal plants and other production processes on the environment, thus achieving the coordinated and sustainable development of the Company and the ecology.

Solid waste treatment

Wastewater treatment

Waste gas treatment

• All hazardous waste was treated by third-party professional institutions.
• After the sludge of CR Qinhuangdao Zizhu Pharmaceutical was treated, waste of the company was reduced by 149.46 tons.
• Traditional Chinese medicine residue was be treated in a green and harmless way.

• All wastewater was discharged ◈ A m o n g s e v e n p h a r m a c e u t i c a l

through pipelines and not directly into	ingredient manufacturers, two emitted
natural waters.	waste gases after RTO treatment, and
◈ We applied advanced and proven	others used washing, photocatalysis,
adsorption, and other processes to
technologies and equipment to	treat waste gases and emitted them
improve wastewater treatment
after reaching the standard.
capacity and effect.

Sharing

a Green Life

CR Pharmaceutical promotes green office, strengthens environmental protection publicity and education, and participates in and launches various environmental protection activities. We call on more people to protect the ecological environment by posting notices on community bulletin boards, organizing and training volunteers, etc.

Upholding the concept of green development

◈ We saved about 200,000 kWh of electricity compared with 2019 by keeping

staggered working hours of air conditioners in the office area.

Post- licensing management	Intelligent sewage systems and energy management
Aftering passing the pollutant discharging license, we have	CR Jiangzhong and Dong-E-E-Jiao have built an intelligent energy
further sorted out the pollutant discharging license information	management platform to realize intelligent management and control
and data of each organization, wrote and submitted monthly,	of energy use and sewage systems.
quarterly, and annual performance reports, and disclosed
relevant information.

◈ Waste paper racks are set up in the copy room for more efficient recycling

and reuse.

◈ We advocate low-carbon office practices, such as telecommunicating and

video conferencing to save energy.

◈ We organize volunteers to promote garbage classification and a responsible

lifestyle in the community.

Striving for Win- Win Cooperation with Concerted Efforts

Sustainability Report 2020 42

We are dedicated to building an efficient, responsible, and green supply chain, and strive for common development with partners, and win-win cooperation for sustainable development.

Our Focuses

Supply chain management

Win-win cooperation

Our Actions

Accelerating strategic cooperation

Driving industry progress

Building a responsible supply chain

Contribution to the SDGs

Suppliers reviewed during the reporting period

39,889

43 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 44

Supply Chain Management

Improving the management platform

Case

CR Pharmaceutical, attaching importance to cooperation with national suppliers and strategic partners, upholds transparent and responsible procurement of environmentally friendly raw materials. We regard the layout of industrial chains' core areas and links as an important part of our production and operation and thus devote great efforts to it. Besides, we strengthen the corporate responsibility management of suppliers and standardize procurement transactions, thus enhancing the sustainable competitiveness of the supply chain and common development with suppliers.

In accordance with the Administrative Measures for Suppliers, an Integrity Agreement is established to improve the supplier management organization and system, and the visualization platform of supply chain information. The electronic bidding information system has been launched to further the openness, transparency, and informatization of the whole process of sourcing, and to jointly build a reliable value chain, thus promoting fair and healthy competitions among suppliers.

Emphasizing exchanges	We strengthen exchanges and cooperation with suppliers by optimizing supplier
and cooperation	structure, visiting key suppliers regularly, and providing suppliers with technical support.
These efforts have accelerated the formation of strategic partnerships with key suppliers
	and helped us build up our competitive edge in purchasing.

Case

CR Pharma Comm deepens cooperation on building the Internet-based healthcare supply chain

CR Pharma Comm established a national supply chain center in 2020. Through the implementation of the innovative market service model of "Healthcare + Internet," the center helps extend the traditional healthcare supply chain to upstream suppliers and downstream customers.

CR Shouzheng electronic bidding platform enhances the openness and transparency of purchasing

CR Shouzheng electronic bidding platform has realized the procedural and factual compliance of procurement activities based on the "intelligent control + bidding review" model, which covers ex ante prevention, interim control, and expost response. In 2020, CR Pharmaceutical implemented a total of 223 bidding projects on the platform, involving an amount of RMB 1.3442932 billion.

Enhancing evaluation	We have established a systematic and scientific supplier quality management system,
and audit	signed quality assurance commitment letters with suppliers, and set up a supplier social
responsibility performance appraisal system, thus continuously improving the quality
						of suppliers' products and services through access audit, regular audit, and dynamic
						management.
					Supplier quality audit	Practicing green sourcing

We have formulated the Management System for Supplier Audit and Evaluation with special quality audit standards for different kinds of materials. Supplier quality archives are set up to urge suppliers to rectify problems found in the audit, followed by the audit reports on the progress of the rectification. A total of 39,889 suppliers were audited in 2020.

Focusing on the environmental qualification of suppliers, we require suppliers to fulfill their responsibility for the impact of their decisions and activities on society and the environment, and encourage them to carry out quality, environmental, and occupational health and safety system certification to urge their partners to fulfill social responsibility, thus pushing forward green sourcing.

Strategic Cooperation Agreement between CR Pharma Comm and WeDoctor

Enhancing capacity	We provide targeted technical guidance for suppliers, follow up on their practices, and
building	assist them in advancing the fulfillment of duties to build a sustainable industrial chain.

Case

Dong-E-E-Jiao tightens quality control of supply sources

In 2020, Dong-E-E-Jiao convened a meeting with 65 suppliers on tightening quality control of the sources, organized intensive supplier training, and signed quality commitment letters with suppliers for honest supply, thus promoting the implementation of quality responsibility.

Case

CR Sanjiu establishes effective communication mechanisms among suppliers

CR Sanjiu has maintained close communication with suppliers through various channels, including mutual visits, unannounced inspections, on-site audits, offline training, special guidance, technical exchanges, industrial meetings, etc. It conducts discussions, analyses, and improvements on daily problems to continuously improve the quality of the supplier team.

45 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 46

Win-win	CR Pharmaceutical has enhanced partnerships with local governments, industry
associations, and academic institutions to advance mutual benefits and win-win
Cooperation	outcomes.

• CR Pharma Comm entered into a strategic cooperation agreement with Shangdong Healthcare Security.
• CR Sanjiu and Novo Nordisk jointly develop the business of human growth and development.
• CR Biopharmaceutical and College of Life Sciences of Nankai
  University jointly established a laboratory for biological drug research and development.
• CR Pharmaceutical was honored Top 100 Pharmaceutical Enterprises in China 2019 by the China Pharmaceutical Industry Information Annual Conference in 2020.

CR Pharmaceutical representatives at the founding ceremony of China Medical and Pharmaceutical Emergency Support Alliance

Leading industry development

Participation in the formulation of the group standard of the Standard for Credit Evaluation of Medical Device Business Enterprises

Participating in the revision o f t h e M e d i c a l D e v i c e Management Regulations by the National Bureau

Putting forward suggestions on the quality management of medical protective materials in the discussion on medical p r o t e c t i v e m a t e r i a l s a n d epidemic prevention and control held by the National Bureau.

We actively push for the formulation of industry standards, implement industry expansions and exchanges through various channels, and act as a professional in diverse niche markets to provide suggestions for the industry, thus furthering the healthy development of the industry in an orderly manner. Besides, we reserve talents for industry development through the top talent training class of the industrial chain and mid- and short-term planning of professional talent development.

Participating in the review of the Guidelines for the Assessment of Green Factories in the Pharmaceutical Industry

Participating in the formulation of the industry standard of the Functional Configuration Requirements for Refrigerated Vehicles for Transporting Pharmaceutical Products

Broadening cooperation	We have broadened cooperation areas and channels with stakeholders, such as
	hospitals, governments, enterprises, research institutes, and international partners, ,
	so as to foster our capability towards sustainable development and strive for a win-win
	result.

Case

International cooperation - CR Zizhu assists in preventing postpartum hemorrhage in rural areas in Bangladesh

CR Zizhu has contributed to some foreign aid projects co-sponsored by the China International Development Cooperation Agency and other organizations. Misoprostol tablets, successfully selected for the project of "Providing Safe, Comprehensive and Appropriate Intervention to Prevent Postpartum Hemorrhage for Reduction of Maternal Mortality in Bangladesh," will be delivered to designated hospitals, clinics, and health service institutions in Bangladesh to facilitate international cooperation.

Case

Government-enterprise cooperation - Official launch of Shenzhen Bay Laboratory of CR Sanjiu

CR Sanjiu and Shenzhen Bay Laboratory, a Guangdong Provincial Laboratory of Life Information and Biomedicine, have signed a cooperation agreement to jointly fund and form a project team for the preclinical and clinical research of the "QBH- 196" project with WuXi AppTec. The cooperation will encourage both parties to give full play to their advantages in resources, facilitate the collaboration in multiple fields of industry-university- research cooperation, and focus on the key areas such as Hong Kong, Macao, and high-end international resources, international cutting-edge medical technology and pharmaceutical product applications in the way of marketization.

CR Pharmaceutical participates in the formulation of various industry standards, boosting industry development

Sharing the Good with Empathy

Sustainability Report 2020 48

Upholding a talent development philosophy of "respecting value, unleashing potential and boosting happiness," we safeguard employees' legitimate rights and interests, highlight their occupational health, respect and care for their lives, and promote the sustainable growth of talents. We work to provide a platform where employees can realize their values, improve employee satisfaction and share the development fruits with employees.

Our Focuses

Employee rights and interests

Employee care

Occupational health

Our Actions

Protecting the legitimate rights and benefits of employees

Strengthening the work safety of employees

Paying attention to the growth and happiness of employees

Contribution to the SDGs

Staff training coverage in 2020

100%

Employees' occupational health and safety investment

RMB 73.2410million

49 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 50

Protecting		interests, and continuously improves the employee management system
Employees' Rights	Putting people first, CR Pharmaceutical protects employees' rights and
privacy management, and provide a humane working environment for every
and Interests		and the democratic management mechanism. We also optimize employee
	employee.
Equal employment	While strictly complying with provisions in the Company Law of the People's Republic
	of China and Labor Law of the People's Republic of China, as well as other laws and
	regulations, we continuously improve the employee management system, and forbid
	child labor and other forms of forced labor. To provide equal employment opportunities
	for everyone, we treat employees fairly and equally regardless of their nationalities, race,
	religion, gender and age, so as to create a diverse, inclusive, fair and proper workplace.
	Besides, we follow the principle of equal pay for equal work and sign labor contracts with
	all employees. In 2020, we had 63,281 employees, and all of them are full-time workers.
Employee gender structure		Employee age breakdown

Democratic management

We pay high attention to appeals of employees and continuously deepen democratic management. Our profit centers are all equipped with employee congress, engaging them in all parts of the Company's development. Also, voices of representative employees are well heard, so as to ensure employees' rights to participate and to be informed.

			Times of employee
Independent trade	Union		congresses were held
unions	members		throughout the year
201*	55,033		233

	Cultural activities for		Participants of staff
	workers		cultural activities
	701		67,073

31,536	31,745
Male employees	Female employees

Employee turnover rate by gender

Male		4,108
Female		3,888
Employee turnover rate by age group
29 years old		3,587
and below
30-50 years		3,810
old
51 years old	599
and above
Employee turnover rate by geographical region
Chinese		7,831
mainland

5,433

15,728

42,120

29 years old and below

30-50 years old

51 years old and above

Employees by geographical region

510

13

62,758

Chinese mainland

Hong Kong,Macau and Tawain

Remuneration and benefits

*Note: The data scope includes the trade unions of CR Pharmaceutical, our four first- class profit centers and their affiliated enterprises.

To build a sound system of remuneration and benefits, we strictly implementing the CR Pharmaceutical Administrative Measures for Remuneration and Benefits, and CR Pharmaceutical Administrative Measures for Vacation and Attendance, and pay social insurance and housing fund for all employees in accordance with the law. In the meantime, efforts are made to optimize the performance assessment model, improve performance feedback channels, and provide employees with more benefits apart from salary.

Hong Kong,
Macao, Taiwan	165
and overseas

Overseas

Caring for female employees on International Women's Day

51 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 52

Boosting Career Growth

Fostering talents development

Optimizing the training system

Talent development is highlighted at a strategic level. We scientifically evaluate and select talents, and train talents at all levels to unleash their full potentials and promote their professional ability and leadership. We also build career development channels to foster their continuous growth.

Valuing employee capacity building and career development, in 2020, we formulated the Administrative Measures for Professional Qualifications and Professional Level Certification, which broadens employee development channels. In addition, we have conducted a talent and organization review at all levels to assist employees in establishing personal development plans and enhancing self-awareness. The selection and training program for outstanding young managers is launched to strengthen the building of our manager pipeline. By facilitating cross-business secondment and job exchanges, we provide employees with diversified career experiences within CR Pharmaceutical, and thereby reduce staff turnover. Efforts are made to enable each employee to realize self- development while creating value in his or her position.

We have established a complete training system for all employees from executives to new recruits. Also, each subsidiary organizes training according to business needs at different levels and categories.

We have built a rich library of courses both online and offline, covering categories such as general management, production operation, marketing, laws and regulations, pharmaceutical technology, etc. In addition to the offline intensive training, employees can learn at any time on their cell phones and computers via CR College. Managers and employees are encouraged to become internal trainers and are offered corresponding empowerment training, so as to better spread corporate culture, internal cases and management experience.

Pharmaceutical

School

Project

Target group and purpose

The training

High-level training

Building a platform for executives to reach strategic consensus

program

CR Pharmaceutical

Developing the leadership of managers at key positions

system for all

Pilot Program

employees

Potential talents

Improving the back-up ability of managers at CR's direct management level

from senior

executives to

Pharmaceutical Talent

new recruits

Strengthening the professional ability of the new forces with 3-5 year work experience

Plan

Future Star

Helping new recruits transform and integrate

History and

General

Production

Marketing

Regulations

Pharmaceutical

culture

management

operation

technology

Perfect

Anti-corruption

Functional

Equipment

Product knowledge

Pharmacopoeia

Traditional Chinese

education

management

knowledge

Communication

Laws

medicine

curriculum

Company history

Self-management

SOP

and persuasion

"GXP"

Chemical medicine

system

Corporate culture

Industry knowledge

EHSQ

Marketing

Biological medicine/

Registration

... ...

Leadership

... ...

Customer

technology

... ...

... ...

... ...

management

... ...

CR Pharmaceutical formulated the Measures for the Appointment and Management of Internal Trainers, and has selected and

Part-time

trained a group of managers, professional lecturers and employees who highly recognize our corporate culture, and are proficient

internal trainer in some professional fields and willing to share. We certify, select, evaluate and motivate internal trainers according to the
team	regulations, and organize regular communication. The internal and external trainers' libraries are formed and managed effectively
	by categories at different layers, thus ensuring that the trainers meet the training needs at different scales, structures and levels.

Total number of trainees by gender and categoryAverage training hours per employee by gender and category

Male		340,691	Male	10.67
Female		302,786	Female	9.87
Senior		33,202	Senior	14.25
management		management
Middle	125,902		Middle	10.10
management		management
Ordinary		484,373	Ordinary	9.04
staff		staff

	Total training hours of all	Average training hours per
Total number of trainees	employees	employee
643,477	6,125,657	9.52

"Future Star" Training hosted by CR Sanjiu

53 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 54

Case

CR Sanjiu upgrades its innovation workshop to focus on digital innovation

In 2020, CR Sanjiu recruited and formed 11 innovation project teams of 42 participants for exploring the demand of innovation project scenarios and incubation of digital projects.

Caring for Employees

Supporting every employee

Putting employees first, we care for their work and life attentively, address their concerns and improve their working environment. We provide recreational and leisure activities depending on the needs of employees, and pay visit to employees in difficulty, so that employees can receive the care from the "CR Pharmaceutical home".

We invest more in helping our employees, secure the living needs of employees in difficulty, and are committed to helping all employees step out of their difficulties.

◈ 23 sessions of creative activities

of action learning, such as

Brainstorm meeting, Coffee Talk,

live classes, were held.

◈ 4 projects, namely, the user

operation direction of Essentiale,

the high-end product direction

of Haowawa, the general

platform direction of orthopedics

popularization, and the maternal

and infant direction of Haowawa,

were incubated as key digital

marketing projects by the

Business Division.

Employees in difficulty assisted

1,262

With the total input of

RMB 1.9 million

	Caring for female
	employees	We pay attention to the occupational health of female
		employees, and continue to provide them with mutual
		insurance on special diseases. We have also opened
		lactation rooms in the workplace to bring warmth to
		professional women during special period.
	Caring for retirees	We have established the Retiree Service Center to be
		exclusively in charge of managing retired employees.
		We pay regular visits to retirees and accompany them
		to physical exams.

Stabilizing and enhancing employment during COVID-19

Since the outbreak of COVID-19, we have been actively responding to the pandemic and initiated special action of "Stabilizing and enhancing employment during COVID-19", to promote recruitment, help workers to get a job or start a business, and contribute to the overall stability of employment.

Visiting staff on the

frontline in COVID-19fight We fully affirm their dedication and commitment during the pandemic, and provide them with all protection supply needed to safeguard them against the coronavirus.

Fully secure existing employment opportunities

• Release employment information through online and offline channels (liepin.com, WisLinks, MileagePlus, official websites of CR Pharmaceutical , employment information networks of major universities, medical talent network, national employment network, Ministry of Industry and Information Technology talent network)
• Innovate in the induction process such as online interview, online contracting and online orientation

Strengthen the support for key groups

• Focus on key job-seekers such as graduates and workers from areas at mid or high risks of the pandemic
• Actively participate in special recruitment activities in Hubei to provide job opportunities in key areas

Strengthen employee training and psychological counseling

• Carefully design courses and training plans to enhance employees' professional skills
• Strengthen the psychological counseling for employees to ensure their psychological and physical health during the pandemic

Visiting a retiree once fighting the war to resist U.S. aggression and aid Korea

55 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 56

Advocating work-life balance

We carry out various leisure and entertainment activities regularly to create a corporate culture of "work in a pleasant way and enjoy life", so as to enrich employees' life, boost their happiness and improve their life quality.

Guaranteeing	about employees' health and safety. We spare no efforts in preventing
Occupational Health	CR Pharmaceutical insists on putting employees first, and cares
wholeheartedly and provide a safe and reassuring work environment for
and Safety	safety accidents, and care for employees' mental and physical health
employees.

Friendly basketball match

Long-distance race

Strengthening EHS management

Occupational health examination rate

100%

Fostering safety culture

Continuous efforts are made to improve our occupational health and safety management system, and national laws and regulations are strictly complied such as the Law of the People's Republic of China on Work Safety and Law of the People's Republic of China on the Prevention and Control of Occupational Diseases. Also, we abide by and improve EHS Objective Management and Accountability System to strengthen our monitoring and emergency management ability. By establishing an occupational health archive management system, we have strengthened prevention and control of occupational diseases and installed safety equipment and facilities. In the meantime, we have perfected the online psychological health assessment and management system, and cooperated with CR's heart-warming hotline to provide consulting for psychological issues. Live streaming is also provided to share tips on fighting COVID-19 and communicate with employees to concretely ensure mental and physical health of all employees.

We give full play to the guiding role of safety culture by issuing EHS Management Manual for CR Group Employees and Traffic Safety Knowledge Cards to employees, and organizing activities to promote safety culture. Catering to each position's characteristics, we provide targeted support to employees and related parties to help them master safety knowledge and skills, so as to lay a solid foundation for work safety.

Safety education and training

EHS cultural activities

Fun sports meeting

Football matches

Safety training coverage rate

100%

Participants involved in safety drills

Multiple measures are adopted in safety education campaigns to equip employees with safety protection skills.

To effectively protect the occupational health of employees,we actively carry out occupational disease prevention and control activities, such as watching the promotion video Knowledge of Prevention and Control of Occupational Diseases Publicity. These efforts help raise employees' awareness, and popularize safety knowledge while promoting safety culture..

33,690

Hours of training

308,856

Happy New Year Party For Youth	Dong-E-E-Jiaoissues the Manual on Prevention and Control of Occupational
	Diseases to employees

Contributing to Society with Kindness

Sustainability Report 2020 58

By fulfilling our social responsibility, we actively give back to the society, concern about the development of poverty-stricken areas and lift them out of poverty, contributing to the social harmony and stability. We also leverage our resources to promote healthy lifestyles, create a good community atmosphere and promote our corporate values.

Our Focuses

Targeted poverty alleviation

Social welfare

Community Volunteer

Our Actions

Promoting the systematic development of public welfare management

Carrying out social public welfare activities

Contribution to the SDGs

Total investment of charitable donation

RMB 30.55million

Volunteers from business sector

1,722

Volunteer services duration from business sector

1,818.5

59 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 60

Fueling the Final

Fight Against

Poverty

CR Pharmaceutical takes active response to the national call. We exert the advantages of our resources and platforms to help people in poverty to find a job in or nearby their hometowns, and promote the workforce localization, thereby supporting the fight against poverty. Led by the poverty alleviation through better healthcare, we fully exploit the advantages of our human resources platform, and launch various types of vocational skills training, to mobilize the enthusiasm and initiative of the poor, thus laying the foundation for people in poverty to find a job and increase their income.

Case

CR Sanjiu and CR Taian Pharmaceutical jointly launch the "Hope Hut" charity support activity

CR Taian Pharmaceutical and CR Sanjiu jointly built a "Hope Hut" in Dongping County, Shandong Province. Based on the original housing, the rooms are planned, designed and decorated with about 10 square meters of independent space. The rooms are equipped with necessary furniture and school supplies to improve the living and learning environment of poor children.

An elderly man's help for poverty reduction in the remote mountains

There is an old saying in China, "if you want to get rich, build roads first." Yang Linzhong started from renovating the infrastructure of Nanzhou Village. He has participated in the infrastructure renovation projects of 10 village groups, including renovation and construction, environmental treatment and various livelihood infrastructure projects. Over the past four years, Yang has raised more than RMB 4.06 million for Nanzhou Village, turned 11 kilometers of rural roads into solid surface, and changed water supply and toilets for 195 households. These projects have completely settled the problems in transportation, communication, electricity use and access to medical services.

Upon renovating the roads, Yang Linzhong focused on industrial development. Through in-depth investigation and analysis, Yang decided to develop an ecological industry brand by leveraging the ecological advantage of 81.28% forest coverage in the village. In the mode of "cooperative (village collective)

• poor households", he led the villagers to develop green food planting and breeding industry, greatly enriching the industrial structure of Nanzhou Village. While developing the industry, he constantly improves the mechanism to benefit the poor through dividends and employment in cooperatives, which greatly enhances the villagers' sense of gain and happiness.

Through the unremitting efforts of Yang's poverty alleviation team and all villagers, Nanzhou Village has gradually transformed its resource advantages into economic advantages based on local conditions and targeted measures, and successfully lifted the label of "provincial poverty-stricken village" in 2018. Yang has received unanimous praise from township and village cadres and the public for his poverty alleviation work, and the CR Jiangzhong resident team led by him was rated as the Outstanding Team Designated for Poverty- stricken Villages of Provincial Assigned Units".

Now, the villagers are confident about the future, and carrying forward Yang's hard-working spirit, they are getting rid of poverty through their own efforts.

Yang Linzhong

A cadre assigned by CR Jiangzhong to support the poverty alleviation in Nanzhou Village, Jiangxi Province

At the end of 2016, Yang Linzhong, aged 57 then, was appointed as a resident cadre in poverty-stricken Nanzhou Village, Dongping Township, Nanfeng County, Fuzhou City, Jiangxi Province, a provincial-level poverty- stricken village during the 13th Five- Year Plan period. Over the past four years, he has always worked in the village to address the problems of the villagers and lead this mountainous village to a new path and a new life.

Case

CR Sanjiu 999® "Pneumoconiosis Free" Public Welfare Project launched for targeted poverty alleviation

CR Sanjiu offers a five-in-one model consisting of patient health lectures, pneumoconiosis medical and nursing workshops, free primary-level medical consultations by experts, household visits to patients, and donations of medicines and assistance to poor families, to win the "pneumoconiosis battle". As of May 2020, the project has educated more than 2,000 occupational doctors, provided 1,000 pneumoconiosis patients with medical consultations and medicines, visited nearly 100 poor families, and donated nearly RMB 200,000 in cash and special medicines.

Engaging in Community	of activities such as free community clinic, healthcare education
Development	Leveraging our resources, CR Pharmaceutical carries out a series
2020, 571 health care and service sites were built nationwide,
	and volunteer programs, to show our care for communities. In
	directly benefiting 100,000 people and helping create a healthy
	and positive atmosphere in communities.

Free medical consultations by

61 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 62

Case

CR Pharma Comm launches "RUN-YAO Action" to recycle expired drugs

Devoted to Charity

Case

To give back to the society, CR Pharmaceutical carries out a number of charitable and public welfare activities, and stays at the forefront of charity undertakings. We pay special attention to the vulnerable groups, popularize health knowledge, and transmit positive energy and love to society.

CR Pharma Comm launches "Run-YAO Action" in the community, unifies 200 enterprises to promote community development and forms a unified interactive brand. In 2020, in response to the call for ecological civilization and garbage sorting, "Run- YAO Action" incubated a project for recycling expired medicines, and formed a complete closed loop among upstream manufacturers, consumers, government agencies, and pharmaceutical enterprises. A pilot program was launched in eight provinces, and a total of 1,474 types of expired medicines weighing 461.47 kg and valued at RMB 116,287.26 were collected. It is one step closer to ensuring the safety of the "last mile" of medicines.

Case

Assisting the community in COVID-19 control

S i n c e t h e o u t b r e a k o f C O V I D - 1 9 , C R Pharmaceutical has actively organized employee volunteers to support the community-basedCOVID-19 response. We strengthen personnel management, publicity and education, cooperate with the unified epidemic prevention and deployment in the community which the staff dormitory belongs to, and implement responsibilities at all levels; We support the community's closed management, help post the pandemic prevention notices, disinfect the public areas such as the hallways, elevator rooms, garbage cans and sewage wells, and donate 84 disinfectant, face masks and other protective materials to the community.

CR Double-Crane (Anhui) Pharmaceutical takes an active part in local flood relief

As an active role in flood control and disaster relief, CR Double- Crane (Anhui) Pharmaceutical participated in the local flood relief work, and transported supporting materials. In this way, it actively fulfills social responsibility.

Case

CR Jiangzhong launches the "Teacher, Care the Throat" Jiangzhong Caoshanhu charity project for teachers

CR Jiangzhong visited nearly 100 schools in dozens of cities such as Shanghai, Guangzhou, Shenzhen, Tianjin, Nanchang, etc., and provided teachers with supplies, including Jiangzhong Fufang Caoshanhu Hanpian for sore throat, and wet wipes, masks and thermos cups for pandemic control to encourage scientific and reasonable use of throat and guard throat health with practical actions.

CR Jiangzhong charitable donation for the resumption of	CR Jiangzhong charitable donation of Ruijie reassurance
schooling	package for the resumption of schooling

63 China Resources Pharmaceutical Group Limited

Topic Management and CSR Communication

Materiality Management	We have aligned ourselves with domestic and international CSR standards as well as
	national and local policies, fully considered features of our industry, and benchmarked
	ourselves against model companies in CSR performance in the industry, to learn
	from their practices of disclosing sustainability information. Besides, based on our

Sustainability Report 2020 64

Stakeholder	Stakeholder communication is an important dimension for CR Pharmaceutical to
Engagement	achieve sustainable development management. We attach importance to establishing
a normalized communication mechanism with shareholders, employees, consumers,
	partners, governments, communities and other important stakeholders, expand the
	communication coverage, and strive to actively respond to the expectations and
	demands of stakeholders, so as to move forward to a sustainable development future.

development strategies and business plans, we have conducted questionnaire survey to

listen and respond to expectations and needs of stakeholders. Eventually, we identified

and screened out 25 sustainability topics for prioritized disclosure in 2020.

Stakeholders

Shareholders

Expectations and Demands

Sustainable investment value

Improving corporate governance structure

Responses

Analyzing current situation and updating business strategy in time

Establishing a good investor communication mechanism

Forming a Bank of	Prioritizing	Validating
Material Topics	Topics	Topics
Identifying internal	Collecting and sorting	Deliberating on
and external	opinions and advice for	material topics and
material topics by	sustainable development	prioritizing results by
benchmarking against	through surveying	the management of the
policies, industrial	and interviewing the	Company and external
standards and	management team	experts
corporate development	and stakeholders and
strategies, and forming	prioritizing material
a bank of topics.	topics.

Reporting

Giving special attention to prioritized material topics in the report

Employees

Open and transparent information

Special care during COVID-19

Protecting employee rights and interests

Valuing career development and training

Work-life balance

Releasing notices and circulars regularly

Providing medical materials and commending excellent anti-COVID-19 staff

Holding workers' congress

Providing employee trainings

Organizing cultural and sports activities regularly

Optimizing the quality management system

		Procedure of prioritizing material topics
Highest
			19		13		25	6
			20		11	9
		21
Importance			4			10	2	22
					14
			18
	23	17			24	12	8
to		16		5		1	7	3
stakeholders					15

High

Importance to sustainable development of CR Pharmaceutical

Highest

1.Honest and Compliant Operations

6.Drug Quality and Safety

11.Environmental Management System

16.Strengthening Strategic Cooperation

21.Promoting Career Development

2.Creating Economic Value

7.Providing Quality Services

12.Dealing with Climate Change

17.Promoting Fair Competition

22.Contributing to Targeted Poverty

Alleviation

3.Strengthening Risk Control

8.Promoting Scientific and

Technological

13.Building Green Factories

18.Promoting Industry Development

23.Promoting Community

Innovation

Development

4.Protecting Intellectual Property rights

9.Protecting Customers' Rightsrights

14.Developing Circular Economy

19.Protecting the Rights and Interests of

24.Carrying out Charity

Employees

5.Product Accessibility

10.Advocating Responsible Consumption

15.Promoting Responsible Supply Chain

20.Occupation Health and Safety

25.COVID-19 Control

Governance

Customer

Environmental

Partner

Employee

Social

Responsibility

Responsibility

Responsibility

Responsibility

Responsibility

Responsibility

Materiality Matrix of Sustainability Topics

Customers

Partners (Suppliers/ Industry)

Government

Communities

Media

Providing high quality products

Protecting the rights and privacy of customers

Caring for the health of children and the youth

Ensuring fair competition

Maintaining integrity and realizing mutual benefits

Promoting management and technological advances

Overcoming difficulties during COVID-19

Adhering to compliance operation

Leading healthy development of the industry

Serving community development

Devoted to charity

Saving energy and reducing emissions

Protecting the ecological environment

Disclosing information openly and transparently

Organizing special interviews and exchanges

Improving the after-sales service network

Guaranteeing customer information safety

Carrying out safety medication training

Developing differentiated drugs for different groups of people

Observing laws and regulations

Adhering to win-win cooperation

Strengthening supply chain management

Safeguarding healthy development of the industry

Actively responding to the national call of COVID-19 fight

Operation with integrity and paying taxes according to law

Participating in government projects and industry collaboration

Strengthening community communication and carrying out volunteer activities

Driving local employment and economic development

Actively cooperating with environmental protection authorities

Improving production techniques, technologies and equipment

Planting endangered Chinese medicinal materials

Disclosing information timely through classified media channels such as official websites and the press

Establishing a complete media communication mechanism

65 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 66

Outlook

The year 2021 marks the beginning of China's 14th Five-year Plan period. During the period, China will build on its achievements, including the building of a moderately prosperous society in all respects, the decisive victory in fighting poverty, and the successful completion of the 13th Five-year Plan, to embark on a new journey toward the second centenary goal of fully building a modern socialist country. Standing at a critical juncture where the timeframes of its two centenary goals converge, CR Pharmaceutical will continue to uphold the lofty mission of "Protecting Human Health and Improving Quality of Life" while forging ahead against all difficulties with a great sense of responsibility. We will join hands with all stakeholders to contribute to health improvement and to the implementation and development of the Healthy China initiative.

At present, the world is still faced with a severe pandemic situation. Fully recognizing the significance of regular pandemic prevention and control, we will keep implement strict pandemic control measures with all-out efforts while striving to maintain production and operation, thus ensuring a victory in this two-front battle.

Promoting innovation-driven transformation according to the "new blueprint"

Taking technological innovation and closed-loop service as the two drives of the pharmaceutical and medical sectors, and centering on the strategic positioning and business model of the new era, we will optimize the distribution of our businesses and allocate resources efficiently to consolidate the market position of our main businesses and cultivate new sectors of strategic importance. In addition, we will continue to extend the development path and speed up expansion-oriented M&As, accelerate the development of new drugs, improve production efficiency, reduce marketing costs, and improve patient experience. By empowering digital transformation with technologies, we will keep expanding and deepening our presence in the industry, integrated the new development pattern into our businesses at a faster speed, and promote high-quality and sustainable development with concerted efforts.

Creating a learning organization to jointly build a "new pattern"

We will further optimize our incentives and talent system, strengthen team building, deepen coordination, and make every effort to create a new talent ecosystem and a business atmosphere where everyone assumes responsibilities actively, makes contributions, and embraces integrity. We will build a flat organizational structure, unblock obstacles hindering cross- border talent use and management, further strengthen the talent echelon, and innovate in education and training methods, aiming to build a strong talent reserve for corporate development and create a harmonious, healthy, open, and inclusive work environment for employees.

Tightening EHSQ management for a "new journey"

Putting people's life and health first, we will work all out to improve EHSQ management. Guided by the national goal to peak emissions before 2030 and to achieve carbon neutrality before 2060, we will promote the three-year action plan for pollution control and work safety overhaul, accelerate green and low-carbon development, and seek new progress in environmental protection. We will strengthen comprehensive quality management and benchmark our product quality against international standards to ensure stable production and operation. By continuing improving our EHS management system, we try to establish a management mechanism that matches the world's first-class enterprises and create an atmosphere where everyone's safety is guaranteed.

As time flies, the 14th Five-year Plan period has begun along with the new year of 2021. Standing at the start of a new development stage, we will proactively implement the new development concepts, integrate into the new development pattern, and face up to all hardships while tackling changes and making new breakthroughs. Carrying the goal and dream of "Reshaping CR," we are ready to set sail on a new journey.

67 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 68

Appendix

Key Performance Indicators

	Index		Unit	2018	2019	2020
	Revenue		HK$ 1M	189,689.10	204,453.90	200,423.02
	Total assets ①		HK$ 1M	176,184.20	190,025.00	209,371.76
	Net assets ①		HK$ 1M	60,468.80	69,581.80	80,029.44
	Total profit①		HK$ 1M	9,182.50	6,639.60	7,075.51
	Net profit①		HK$ 1M	7,572.30	5,097.80	5,323.64
	Net profit attributable to the owners of the	HK$ 1M	3,977.60	3,286.40	3,297.13
	parent company ①
Economic	Net debt ratio		%	61.7	56.9	52.6
	Anti-corruption training coverage		%	-	100	100
	Major corruption incidents		-	-	0	0
	R&D investment		HK$ 1M	1,454.80	1,435.70	1,497.85
	Number of R&D personnel		-	600+	799	1,211
	New patent applications		-	14	91	99
	New patent granted		-	33	101	86
	Projects under research ②		-	222	150	199
	Total number of employees			59,163	65,687	63,281
	Total staff turnover			-	7,802	7,996
	Proportion of female employees		%	51.00	49.73	50.17
	Proportion of female management		%	25.8	25.7	25.8
	Days of paid annual leave per capita		days	10	10	10
	Labor contract signing rate		%	100	100	100
	Social insurance coverage		%	100	100	100
Employee	Employee training coverage		%	100	100	100
Average training hours per employee	③	hour	47.8	38.8	99.0
	Total number of trainees ③		-	2,463	1,809	643,267
	Training input ③		RMB 10,000	295.0	362.0	2,974.4
	Employee turnover rate		%	12.3	12.1	12.4
	Occupational health examination rate		%	100	100	100
	Occupational diseases occurrence		-	0	0	0
	Percentage of employees joining trade union	%	-	88.2	92.0
	Investment in supporting needy employee	RMB 10,000	193	161	190

① Note: The data in 2018 is disclosed after restatement.

② Note: In 2019, we standardized statistical scope. There were 150 new variety projects under research (excluding consistency evaluation, technical transformation, supplementary application, post market re-evaluation, process improvement, MAH, etc.), which were different from the statistical scope in 2018.

③ Note: The statistics scope in 2018 and 2019 is the headquarters of CR Pharmaceutical.

Customer

Partner

Safety

Environ-

mental

	Index	Unit	2018	2019	2020
	Percentage of customer complaint	%	100	100	100
	handled
	Customer complaint satisfaction	%	100	100	100
	Number of products recalled due to	-	-	-	964
	health and safety issues
	Percentage of products recalled due to	%	-	-	0.0005
	health and safety issues
	Ratio of economic contract fulfillment	%	100	100	100
	Ratio of suppliers passing quality man-	%	100	100	100
	agement system certification
	Number of potential suppliers rejected due	-	-	-	35
	to social responsibility non-compliance
	Number of suppliers knocked out due to	-	-	-	462
	social responsibility non-compliance
	Responsible procurement ratio	%	100	100	100
	Work safety investment	RMB 10,000	5,762.00	7,346.57	7,324.10
	Number of work-related fatalities	-	0	0	0
	Lost days due to work injury	days	130.50	210.25	219.00
	Total hours of safety training		197,778.03	237,013.46	308,856.00
	Safety training coverage	%	100	100	100
	Number of safety emergency drills	-	518	875	743
	Number of participants in safety drill	-	18,769	32,435	33,690
	Total input in environment protection	RMB 10,000	7,062.46	9,303.34	8,731.00
	Total input in energy conservation and	RMB 10,000	-	4,198.94	3,242.00
	emission reduction
	Nitrogen oxide emission ④	ton	144.42	143.27	72.37
	SO2 emission ④	ton	94.14	60.40	13.82
	Ammonia nitrogen emission ④	ton	38.54	27.34	15.48
	COD emission ④	ton	589.38	255.63	198.73
	CO2 emission ④	ton	541,956.86	560,123.09	540,802.56
	Carbon dioxide emissions per unit of	tons/RMB 10,000	0.1486	0.1412	0.2140
	output value
	Industrial wastewater generated	10,000 tons	-	-	506.25
	Harmless waste generated	ton	-	-	58,594.35
	Hazardous waste ④	ton	1,794.60	2,803.73	3,318.00

69 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 70

Environ-

mental

Community

		Index	Unit	2018	2019	2020
	Total general solid waste ④	ton	-	104,661.61	45,595.02
	HW02 medical waste	ton	-	1,137.57	935.97
	Waste drug (HW03)	ton	-	337.17	253.72
	Other hazardous wastes	ton	-	1,328.99	2,128.43
	Comprehensive energy consumption ④	10,000 TCE	14.97	15.65	14.40
	Coal consumption ④	10,000 TCE	1.45	0.69
	0
	Petrol consumption ④	ton	139.56	174.88	127.27
	Diesel consumption ④	ton	178.34	264.15	202.69
	Natural gas consumption ④	10,000 standard m3	4,756.93	5,493.95	4,670.01
	Power consumption ④	GWh	312.8130	355.7186	356.1633
	Heat consumption ⑤	GJ	484,970.06	957,911.85	1,103,074.48
	Biomass fuel consumption ④	TCE	19,069.92	1,740.46	0
	Fresh water consumption	ton /RMB 10,000	2.513	3.639	3.351
	per RMB 10,000 of output value ④
	Fresh water consumption ⑥	ton	6,736,046.00	9,000,864.50	8,469,397.00
	Reclaimed water consumption ⑥	ton	48,352.86	397,036.50	285,700.00
	Recycled water consumption ⑥	ton	28,983,593.00	36,809,066.67	52,138,556.00
	Comparable comprehensive energy con-	TCE/RMB 10,000	0.0585	0.0556	0.0570
	sumption per RMB 10,000 of output value ④
	Comparable comprehensive energy con-	TCE/RMB 10,000	0.1065	0.0997	0.1147
	sumption per RMB 10,000 of added value ④
	Office	and domestic wastewater ③	m3	9,494	6,538	1,203
	Office,	kitchen and domestic waste ⑦	L	0	126,720	195,000
	Office	power consumption ③	kWh	1,285,496	1,442,424	637,000
	Office	water consumption ③	m3	9,594	6,638	2,196
	Packing materials by weight ④	ton	-	245,759	35,560.08
	Total tax payment	HK$ 1M	7,422.70	8,425.33	8,155.53
	Number of newly-added employees	-	13,995	13,718	8,764
	Total investment in charitable donations	RMB 10,000	2,239.72	980.69	3,055.00

Content Index

Major category	Content		Page(s)
		General Disclosure: Information on the policies and compliance with relevant
	A1 :	laws and regulations that have a significant impact	on the issuer relating to air	Paying Attention to Environmental Man-
	Emissions	and greenhouse gas emissions, discharges into water and land, and genera-	agement, Practicing Green Operation
		tion of hazardous and non-hazardous waste.
	A1.1	The types of emissions and respective emissions data.	Key Performance Indicators
		Direct (Scope 1) and energy indirect (Scope 2) greenhouse gas emissions (in
	A1.2	tonnes) and, where appropriate, intensity (e.g. per unit of production volume,	Key Performance Indicators
		per facility).
	A1.3	Total hazardous waste produced (in tonnes) and, where appropriate, intensity	Key Performance Indicators
	(e.g. per unit of production volume, per facility).
	A1.4	Total non-hazardous waste produced (in tonnes) and, where appropriate, in-	Key Performance Indicators
	tensity (e.g. per unit of production volume, per facility).
	A1.5	Description of emission target(s) set and steps taken to achieve them.	Paying Attention to Environmental Man-
	agement, Practicing Green Operation
	A1.6	Description of how hazardous and non-hazardous wastes are handled, and a	Paying Attention to Environmental Man-
	description of reduction target(s) set and steps taken to achieve them.	agement, Practicing Green Operation
	A2 : Use of	General Disclosure: Policies on the efficient use of resources, including energy,	Paying Attention to Environmental Man-
A	Resources	water and other raw materials.		agement, Practicing Green Operation
A2.1	Direct and/or indirect energy consumption by type (e.g. electricity, gas or oil) in	Key Performance Indicators
Environ-
total (kWh in '000s) and intensity (e.g. per unit of production volume, per facility).
mental	A2.2	Water consumption in total and intensity (e.g. per unit of production volume,	Key Performance Indicators
	per facility).
	A2.3	Description of energy use efficiency target(s) set and steps taken to achieve	Paying Attention to Environmental Man-
	them.		agement, Practicing Green Operation
	A2.4	Description of whether there is any issue in sourcing water that is fit for pur-	Paying Attention to Environmental Man-
	pose, water efficiency target(s) set and steps taken to achieve them.	agement, Practicing Green Operation
	A2.5	Total packaging material used for finished products (in tonnes) and, if applica-	Key Performance Indicators
	ble, with reference to per unit produced.
	A3: The
	Environment	General Disclosure: Policies on minimising the issuer's significant impacts on	Paying Attention to Environmental Man-
	and Natural	the environment and natural resources.		agement, Practicing Green Operation
	Resources
	A3.1	Description of the significant impacts of activities on the environment and nat-	Paying Attention to Environmental Man-
	ural resources and the actions taken to manage them.	agement, Practicing Green Operation
	A4: Climate	General Disclosure: Policies on identification and	mitigation of significant cli-	Paying Attention to Environmental Man-
	mate-related issues which have impacted, and those which may impact, the
	Change	agement, Practicing Green Operation
	issuer.
	A4.1	Description of the significant climate-related issues which have impacted, and	Paying Attention to Environmental Man-
	those which may impact the issuer, and the actions taken to manage them.	agement, Practicing Green Operation
	Employment and Labor Practices
		Information on the policies and compliance with relevant laws and regulations
	B1:	that have a significant impact on the issuer relating to compensation and	Protecting Employees' Rights and
	Employment	dismissal, recruitment and promotion, working hours, rest periods, equal	Interests
		opportunity, diversity, anti-discrimination, and other benefits and welfare.
	B1.1	Total workforce by gender, employment type (for example, full- or part-time),	Protecting Employees' Rights and
	age group and geographical region.		Interests, Key Performance Indicators
B	B1.2	Employee turnover rate by gender, age group and geographical region.	Protecting Employees' Rights and
Interests
Social	B2 : Health	Information on the policies and compliance with relevant laws and regulations	Guaranteeing Occupational Health and
	that have a significant impact on the issuer relating to providing a safe working
	and Safety	Safety
	environment and protecting employees from occupational hazards.

④ Note: The statistics scope in 2018 and 2019 excludes the CR Pharma Comm and Pharmaceutical Research Center.

⑤ Note: The statistics scope in 2018 excludes the CR Pharma Comm and Pharmaceutical Research Center. The statistics scope includes CR Sanjiu in 2019, and the data change is mainly due to the fact that in 2019 some units changed coal-fired power to external thermal power supply.

⑥ Note: The statistics scope in 2018 excludes the CR Pharma Comm and Pharmaceutical Research Center. The data change is mainly due to the further improvement of index statistical methods and tools in 2019.

⑦ Note: The change of data in 2020 is mainly due to the increase of greening waste and more space is occupied by waste sorting.

B2.1	Number and rate of work-related fatalities occurred in each of the past three	Key Performance Indicators
years including the reporting year.
B2.2	Lost days due to work injury.	Key Performance Indicators
B2.3	Description of occupational health and safety measures adopted, how they	Guaranteeing Occupational Health and
are implemented and monitored.	Safety

71	China Resources Pharmaceutical Group Limited	Sustainability Report 2020 72

Major category	Content	Page(s)
	B3 :	Policies on improving employees' knowledge and skills for discharging du-
	Development	Boosting Career Growth
	ties at work. Description of training activities.
	and Training
	B3.1	The percentage of employees trained by gender and employee category (e.g.	Boosting Career Growth
	senior management, middle management).
	B3.2	The average training hours completed per employee by gender and employ-	Boosting Career Growth
	ee category.
	B4 : Labor	Information on the policies and compliance with relevant laws and regula-	Protecting Employees' Rights and
	tions that have a significant impact on the issuer relating to preventing child
	Standards	Interests
	and forced labor.
	B4.1	Description of measures to review employment practices to avoid child and	Protecting Employees' Rights and
	forced labor.	Interests
	B4.2	Description of steps taken to eliminate such practices when discovered.	Protecting Employees' Rights and
	Interests
	Product Practices
	B5 : Supply
	Chain	Policies on managing environmental and social risks of the supply chain.	Supply Chain Management
	Management
	B5.1	Number of suppliers by geographical region.	Supply Chain Management
		Description of practices relating to engaging suppliers, number of suppliers
	B5.2	where the practices are being implemented, how they are implemented and	Supply Chain Management
		monitored.
	B5.3	Description of practices used to identify environmental and social risks along	Supply Chain Management
	the supply chain, and how they are implemented and monitored.
		Description of practices used to promote environmentally preferable prod-
	B5.4	ucts and services when selecting suppliers, and how they are implemented	Supply Chain Management
		and monitored.
		Information on the policies and compliance with relevant laws and regula-	Ensuring Drug Quality, Improving
	B6 : Product	tions that have a significant impact on the issuer relating to health and safety,
	Customer Service, Improving Health
	Responsibility	advertising, labelling and privacy matters relating to products and services
B	Accessibility
	provided and methods of redress.
Social	B6.1	Percentage of total products sold or shipped subject to recalls for safety and	Key Performance Indicators
	health reasons.
	B6.2	Number of products and service related complaints received and how they	Improving Health Accessibility
	are dealt with.
	B6.3	Description of practices relating to observing and protecting intellectual	Boosting Development with Innova-
	property rights.	tion
	B6.4	Description of quality assurance process and recall procedures.	Ensuring Drug Quality, Improving
	Health Accessibility
	B6.5	Description of consumer data protection and privacy policies, and how they	Improving Health Accessibility
	are implemented and monitored.
	B7 : Anti-	Information on the policies and compliance with relevant laws and regula-
	tions that have a significant impact on the issuer relating to bribery, extortion,	Corporate Governance
	corruption
	fraud and money laundering.
		Number of concluded legal cases regarding corrupt practices brought
	B7.1	against the issuer or its employees during the reporting period and the	Corporate Governance
		outcomes of the cases.
	B7.2	Description of preventive measures and whistle-blowing procedures, how	Corporate Governance
	they are implemented and monitored.
	B7.3	Description of anti-corruption training provided to directors and staff.	Corporate Governance
	Community
	B8 :	Policies on community engagement to understand the needs of the commu-	Fighting COVID-19 with Concerted
	Efforts, Healthy Village Program - The
	Community	nities where the issuer operates and to ensure its activities take into consid-
	Light of Hope, Fueling the Final Fight
	Investment	eration the communities' interests.
	Against Poverty
			Fighting COVID-19 with Concerted
	B8.1	Focus areas of contribution (e.g. education, environmental concerns, labor	Efforts, Healthy Village Program - The
	needs, health, culture, sport).	Light of Hope, Fueling the Final Fight
			Against Poverty
	B8.2	Resources contributed (e.g. money or time) to the focus area.	Engaging in Community Develop-
	ment, Key Performance Indicators

Report Rating

73 China Resources Pharmaceutical Group Limited	Sustainability Report 2020 74

Feedback

Dear stakeholders:

Thank you very much for reading this report in your busy schedule. In order to better understand your expectation and demand for our sustainable development work and improve our capability, we hereby provide this questionnaire survey. We sincerely invite you to participate in the survey. Your opinions are very important to us. Thank you for your valuable comments and suggestions!

1. What is your identity for CR Pharmaceutical :

□

Employee

□

Consumers

□

Supplier

□

Regulator

□

Government department

□

Media

□

Others

2. Are you satisfied	with this report ?
□	Yes	□	No	□	Fair

3. Is the information you are concerned about reflected in this report?

□	Yes	□	No	□	Fair

4. What are your expectations or suggestions for our next sustainability report?

□	Innovation of report theme	□	Innovative structure and ideas	□	Clear logic
□	Expanding the application scope of social responsibility standards		□	More friendly reading interface
□	More friendly language style	□	Others (please Specify)

5. Do you have any suggestions or expectations for our sustainable development work?

• Formulating long-term social responsibility plan
• Strengthening the establishment of social responsibility management organizations
• Widely carrying out external communication □ Planning new influential public welfare projects

□	Incorporating social responsibility performance into management assessment	□	Others (please specify)

You can choose to provide your feedback in the following ways:

China Resources Pharmaceutical Group Limited

Address: Building 7, Courtyard 2, North Third Ring Middle Road, Chaoyang District, Beijing

Post Code: 100120

Fax: [phone]

Tel: [phone]

E-mail: [e-mail]

Website: http://www.crpharm.com

About This Report

This is the 8th Annual Sustainability Report published by China Resources Pharmaceutical Group Limited. The last report was published in May 2020. The report aims to communicate frankly with the stakeholders on its sustainability philosophy, practice and performance. Its four listed companies also have compiled their separate social responsibility reports.

Reporting Period

This report covers the period from January 1 to December 31, 2020. In order to enhance the comparability and perspectiveness of the report, some contents may extend beyond this duration when necessary.

Publication Cycle

This is an annual report.

Reporting Scope

This report includes China Resources Pharmaceutical Group Limited and its subsidiaries.

Abbreviations

For convenience and readability, "China Resources Pharmaceutical Group Limited" in the Report may be referred to as "CR Pharmaceutical" , "the Company" or "We".

Reliability Assurance

CR Pharmaceutical promises that the report is free of any fraud, misleading representations or major omissions. And we are responsible for its authenticity, accuracy and completeness.

Data Sources

All data in this report come from internal documents or the information statistics system.All monetary amounts quoted in this report are shown in RMB (yuan) unless otherwise stated(e.g. Hong Kong dollars).

Reference Standards

China Resources Group Social Responsibility Management Measures, CR Pharmaceutical Social Responsibility Management Measures, GRI Sustainability Reporting Standards (GRI Standards) issued by Global Sustainability Standard Board (GSSB), Environment, Society and Governance Reporting Guide issued by HKEx, Guidelines to the Central State-owned Enterprises Directly under the Central Government on Fulfilling Corporate Social Responsibilities by State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-CSR4.0) by Chinese Academy of Social Sciences.

Compilation Process

The preparation process of this report refers to the requirements of the above standards, and is carried out in accordance with the steps of peer benchmarking, questionnaire survey, stakeholder interview, social responsibility research, information collection, information review, report writing, review by the management, report rating, etc., so as to ensure the completeness, materiality, authenticity and balance of the report content.

Initiate	Investigate and	Collect	Prepare	Collect	Report	Report	Report
meetings	interview	data	contents	opinions	design	finalization	release

Convene preparation

Conduct

All branch

•

Confirm report

•

Collect opinions

•

Confirm overall

•

Thorough

•

Report

initiation meeting

investigations,

companies provide

outline

from all

style

proofreading of

finalization

interviews, on-site

detailed information

•

Analyze

departments

•

Separate design

the report

•

Report release

project inspections

and data

substantial

•

Collect opinions

by chapter

•

Review by the

•

Develop publicity

issues

from consulting

Company's

program

firm

management

Report Access

This report is available in both paper and electronic versions. To read or download the report, please visit http://www.crpharm.com/shzr/ shzrbg/.

Address: Floor 41, China Resources Building, 26 Harbour

Road, Wanchai, Hong Kong

Telephone: [phone]

Fax: [phone]

Address: Building 7, Courtyard 2, North Third Ring Middle Road, Chaoyang District, Beijing

Post Code: 100120

Tel: [phone]

Fax: [phone]

Website: www.crpharm.com