Luye Pharma is committed to achieving the vision of "the most respected and leading pharmaceutical enterprise in the world" and promoting the deep integration of ESG matters with its corporate governance framework. To further ensure transparency and accountability in all of the Group's operational activities, the Board of Directors adheres to corporate governance principles, benchmarks legal and commercial standards, and maintains a continuous focus on internal monitoring, fair disclosure, and accountability to all shareholders. During the Year, to clarify the priority for the stakeholders, the Group invited stakeholders to participate in a questionnaire survey to evaluate materiality issues, and through this Report, responded to their key concerns in various aspects to help us continue to manage and monitor the sustainable development performance of Luye Pharma and achieve the best commercial and social value. [...] On 29 March 2023, the Group passed a resolution through the Board of Directors to update the term of reference of the Company's Environmental, Social, and Governance Committee ("ESG Committee") under the Board of Directors. Under the ESG Committee, there is an ESG Working Group established to assist the ESG Committee's work. The ESG governance framework of the Group is as follows: [...] The ESG Committee conducts annual assessments and evaluations of its own performance and the adequacy of its term of reference, and proposes any amendments to the Board of Directors. The ESG Committee should also conduct an annual review of the following aspects related to the Group: (i) whether the resources, employee qualifications and experience, training programs, and budget related to the Company's ESG performance and reporting are sufficient; (ii) changes in the nature and degree of significant ESG risks of the Group since the last annual review; and (iii) the scope and quality of management's ongoing monitoring of ESG risks. All meeting minutes of the ESG Committee, all written resolutions and such meetings are made available for review by the members of the Board within a reasonable time. [...] The ESG Committee shall hold at least one meeting annually, which shall be convened by the company secretary of the Company at the request of the chairman, to guide and review the specific contents of ESG management within the Group and to timely report on ESG-related matters to the Board of Directors and make recommendations. The main functions of the ESG Committee established by the Group are detailed as follows: (a) Coordinate, identify, evaluate, and manage ESG matters of the Group, and report to the Board of Directors on any significant issues; (b) Formulate and review the principles and strategies of ESG policies of the Group, and closely monitor the implementation and effectiveness of ESG policies and measures; (c) Set ESG-related goals according to the actual situation of the Group, and periodically review the Group's progress and performance based on those goals; (d) Assist the Board of Directors in reviewing the annual ESG Report and coordinate the preparation of the ESG Report; (e) Understand regulatory requirements and oversee the Group's compliance with relevant laws and regulations; and (f) Coordinate any other ESG-related work that the Board of Directors may assign. [...] The main functions of the ESG Working Group established by the Group are detailed as follows: (a) Be responsible for the specific implementation of all ESG work and management under the guidance of the ESG Committee; (b) Assist the ESG Committee in preparing the ESG Report, and prepare to collect relevant data and information; and (c) Regularly review and report to the ESG Committee on the effectiveness of ESG measures implemented by the responsible department, and communicate with representatives of various departments within the ESG Working Group to promote effective implementation.