Committed to integrity and its values in doing business, Yili Group aims to foster a clean, honest, and orderly work and business environment. While stepping up integrity cultivation among our employees and relevant publicity activities and training, the Group has maintained zero tolerance towards any practices that fall into the “Yili’s Off-limits Area” and handled them with tight measures. Should employees or business partners be violating the law, we would fulfill our obligation to offer full cooperation to relevant departments and hold offenders accountable.

In the first half of 2022, Yili Group found five cases of violations, resulting in the dissolution of labor contracts with six employees, three of which were prosecuted by judicial authorities for criminal liability in accordance with the law. Meanwhile, five people from three partner companies suspected of criminal violation were prosecuted by judicial authorities for criminal liability in accordance with the law. The five cases sentenced in the second half of 2022 are as follows:

Former employee Lin *sheng violated the Staff Reward and Punishment System for Staff at Yili Group and the Anti-fraud Regulation of Yili Group by taking advantage of his post to take money from distributors as buying incentives and promotion fees, totaling RMB 484,700. Yili Group dissolved the labor contract with him. He was prosecuted for non-national staff bribery crime under the Criminal Law.

Former employee Zhang * violated the Staff Reward and Punishment System for Staff at Yili Group and the Anti-fraud Regulation of Yili Group by taking advantage of his post to misappropriate company properties. Yili Group dissolved the labor contract with him. He was prosecuted for crime of duty encroachment under the Criminal Law.

Former employee Jia * violated the Staff Reward and Punishment System for Staff at Yili Group and the Anti-fraud Regulation of Yili Group by taking advantage of his post to take bribes, totaling RMB 192.900, from relevant business operators, including Guo *hua, Yang *zhu, and Liang *yan. Yili Group dissolved the labor contract with him. He was prosecuted for non-national staff bribery crime under the Criminal Law. Guo *hua, Yang *zhu, and Liang *yan were prosecuted for non-national staff bribery crime under the Criminal Law.

The staff of relevant business partner, Yu *chang, being fully aware of the non-existence of promotion campaign, forged a false promotion settlement plan that defrauded Yili Group of RMB 150,000 in closing payments. Yu was prosecuted for contract fraud under the Criminal Law.

The staff of relevant business partner, Li *hong, being fully area of the non-existence of a selling campaign, forged a sales breakdown to defraud Yili Group of RMB 199,000 as sales incentives. Li was prosecuted for contract fraud under the Criminal Law.

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

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

Dingzhou City Ruiyi Advertisement Designing Center

Huari (Inner Mongolia) Health Management and Service Co.

Yuanbao District Tangchao Decoration Shop

Inner Mongolia Tianrui Health Screening Management Co.

Huanggang Lilian Electronics Co.

Inner Mongolia Ruiyi Mapping Co.

Beijing Xiangdong Electricity and Technology Co.

Guangrao County Houyuan Modern Husbandry Co.

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

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

Telephone: 0471-3357805

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