01 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report About This Report 02

About This Report

This is the second Environmental Social and Corporate Governance (ESG) Report released by Huabao Flavours & Definitions

Fragrances Co. Ltd. The report discloses in detail the practices and performance of Huabao Flavours & Fragrances

Co. Ltd. in the areas of environmental social and corporate governance responsibilities in 2024. It aims to communicate

effectively with various stakeholders and systematically respond to their expectations and requirements. For the convenience of presentation in this report:

“Huabao Flavours & Fragrances Co. Ltd.” is referred to as Huabao Flavours & Fragrances” “the Company” or “we”;

Scope of Preparation

"Huabao International Holdings Limited" is referred to as "Huabao International";

The report covers the headquarters and all branches of Huabao Flavours & Fragrances Co. Ltd. "Yingtan Huabao Flavor Co. Ltd." is referred to as "Yingtan Huabao";

"Guangzhou Huafang Tobacco Flavours Co. Ltd." is referred to as "Guangzhou Huafang";

Time Frame

"Owada Fragrance (Guangzhou) Co. Ltd." is referred to as "Guangzhou Owada"；

From January 1 2024 to December 31 2024. To enhance the comparability and forward-looking nature of the report some "Shanghai H&K Flavor Co. Ltd." is referred to as "H&K Flavor";

contents are appropriately extended to the previous and subsequent years."Jiangxi H&K Food Technology Development Co. Ltd." is referred to as "Jiangxi H&K";

References "Shanghai Yifang Agricultural Technology Co. Ltd." is referred to as "Shanghai Yifang" or "Yifang";

Shenzhen Stock Exchange's Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange - "Jiangxi Yifang Agricultural Technology Co. Ltd." is referred to as "Jiangxi Yifang";

Sustainability Report (For Trial Implementation)

"Yunnan Tianhong Fragrance Co. Ltd." is referred to as "Yunnan Tianhong";

Global Sustainability Standards Board's GRI Sustainability Reporting Standards (GRI Standards)

Chinese Academy of Social Sciences' Guidelines for Sustainability Reporting for Chinese Enterprises (CASS-ESG 6.0) "Huabao Asia Pacific Pte. Ltd." is referred to as "Huabao Asia Pacific";

China national standard Guidance on Social Responsibility Reporting (GB/T 36001-2015)

"PT Huabao Food Technology Indonesia" is referred to as "PT Huabao Food"

United Nations' Sustainable Development Goals (SDGs) Business Guide

"Xiamen Amber Daily Chemical Limited" is referred to as "Xiamen Amber"

Data Sources

Report Access

The data and cases in the report come from original records or financial reports of the actual operations of the Company.Unless otherwise stated all financial data in the report are in RMB. In the event of any discrepancy between the financial You can view and download this report on the website of Huabao Flavours & Fragrances Co. Ltd.(https://www.hbflavor.data and the Company's annual financial report the annual report shall prevail. com) the website of Shenzhen Stock Exchange (http://www.szse.cn) and China Securities Information Network (http://www.cninfo.com.cn).Feedback

If you have any comments or suggestions on the contents of this report or the Company's environmental social and

corporate governance performance please feel free to contact us by phone (021-67083333) or email (ir@hbflavor.com).03 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Speech on ESG Delivered by the Chairman 04

Speech on ESG Delivered by the Chairman

“ In the current era the international political and economic landscape is evolving rapidly amidst complex interactions This year we have harnessed the power of digitalization and intelligence to drive the transformation and global challenges persist. However China's role as a "stabilizer" in the global industrial chain remains prominent. and upgrading of the industry. The company has continuously strengthened the construction of its digital and ”

The flavor and fragrance industry in China is undergoing a structural transformation period where transitioning and intelligent management system comprehensively upgrading and transforming the Product Lifecycle Management

upgrading as well as shifting development paradigms have become critical turning points for the industry. Faced (PLM) system to reshape the R&D process across all business segments. Simultaneously we have advanced the

with new challenges and opportunities Huabao Flavours & Fragrances remains unwavering actively adjusting its formula and material collaboration system achieving end-to-end full-link collaboration across research production

strategic layout and strengthening innovation-driven initiatives to adapt to the ever-changing economic situation and supply and sales. In 2024 the company was successfully selected for the list of “Outstanding Solutions” for urgent

promote sustained healthy stable and high-quality development of the company's business. technological needs in the digital transformation of China’s light industry and was honored as a “pioneering” case in

the digital transformation of China’s light industry.Looking Back at 2024: Focusing on Strategy Steadfastly Pursuing Development

This year we have laid a foundation on human-centric values working together to build a symbiotic and

This year we have adhered to the ESG governance philosophy as our guiding principle laying a solid win-win value ecosystem. The company is committed to implementing our corporate culture by organizing diverse

foundation for sustainable development. The company has integrated the ESG concept into our top-level strategic cultural and sports activities providing comprehensive welfare benefits and establishing a broad platform for career

design optimized our governance structure and upgraded the "Strategy & ESG Committee" with the establishment development striving to enhance employees' sense of happiness and belonging. We have also improved our value-

of an ESG Management Office and ESG Working Group. I personally take on the role of the Chief Strategy & ESG oriented incentive mechanism to cultivate a high-quality and high-performing talent team. Meanwhile the company

Development Officer. Meanwhile in response to the national "dual carbon" strategy the company has established closely integrates cultural development with corporate responsibility participating in the implementation of the rural

a dedicated ESG Climate Project Working Group to accelerate the pace of green and low-carbon transformation revitalization strategy and investing in public welfare and charity. The "Flower Growth Program" is a successful

injecting new momentum into sustainable development. In 2024 the company achieved leapfrog breakthroughs example of the company's branded operation of public welfare education projects. By fulfilling our corporate social

in the ESG field: we officially joined the United Nations Global Compact (UNGC); received an A-rating from Wind responsibilities and obligations we demonstrate warmth and commitment embodying a strong sense of national and

ESG making us the only enterprise in the flavor and fragrance industry in China to receive this rating currently; and social responsibility.were awarded the "2024 Best Practice Cases for Sustainable Development Among Listed Companies" by the China

Association for Public Companies as well as being included in the "2024 Sustainable Development (ESG) Practice Looking Ahead to 2025: Upholding Integrity Embracing Innovation and Jointly Drawing a New Blueprint

Cases in China’s Fragrance Flavor and Cosmetics Industries" among others.We will adopt the strategic positioning of "focusing on natural technology to provide high-quality and cost-effective

This year we have focused on technological innovation as our core to enhance our core competitiveness. flavor and health solutions for global consumers striving to become a leading and internationally influential listed

The company has implemented a dual-engine drive strategy of "open innovation + independent research and company in the field of flavors and ingredients in China." Through high-quality development we will continuously

development" deeply integrating our strategic mission of "green nutritious and healthy" with market demands. enhance corporate value driving growth with a dual strategy of acquisitions and mergers while strengthening market

We have gradually established a comprehensive research platform that includes basic research analytical testing value management. We will improve the ESG management system adhere to long-term value orientation and

research process research applied research prospective study and innovative achievement transformation for present our concept and achievements of sustainable development to the market making our mission of "green

natural flavors and natural extracts. By closely aligning with market demands we promptly and precisely meet nutritious and healthy" resonate with the pulse of the times.customers' diversified needs for flavor and fragrance products continuously innovating and developing popular flavor

formulas and creating unique and attractive product portfolios. The successful hosting of the 2024 Science and On our grand journey guided by the vision to "Flavor Your Life" we will not be deterred by challenges or obstacles

Technology Innovation Forum of Huabao Flavours & Fragrances fostered a strong culture of innovation and boosted nor will we be hindered by mountains and seas. With the brush of fragrances and food ingredients we will outline a

technological confidence. Additionally the H&K Flavor Technology Center team a subsidiary of Huabao Flavours new landscape of Chinese flavors; by gathering the strength of innovative research and development we will write

& Fragrances was honored with the title of "Excellent R&D Team in China Fragrance Flavour and Cosmetic a new chapter in the industry. Amidst the surging waves of the times we will shine brightly with the radiance that

Industries" by the China Association of Fragrance Flavor and Cosmetic Industries (CAFFCI) demonstrating our belongs to Huabao!

commitment to being a driving force for Healthy China through concrete actions. XIA Liqun

Chairman

This year we have taken the path of global business layout to expand new horizons for market development. Huabao Flavours & Fragrances Co. Ltd.Leveraging the strategic locations of Huabao Asia Pacific and PT Huabao Food to reinforce our domestic strength

and extend our reach overseas the company has enhanced its overseas support system integrating R&D regulatory

compliance and raw material sourcing. With a reservoir of over 1000 overseas raw materials and a portfolio of

over 600 Halal-certified products we have established an efficient overseas supply chain system. While vigorously

expanding into the Southeast Asian market we are also actively opening up the African market and maintaining

steady growth in our business with European foodservice chains. With an open and inclusive attitude we are writing

the responsibility and mission of Chinese enterprises on the global map bringing the national brand "Chinese

flavors" to the world.05 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report About Huabao 06

About Huabao Corporate Culture

Company Profile

Vision

Huabao Flavours & Fragrances Co. Ltd. was established in 1996 and was successfully listed on the Shenzhen Stock Flavor your life

Exchange (stock: Huabao Flavours & Fragrances stock code: 300741) in 2018. It owns Xiamen Amber (833164.NEEQ) a

company listed on the National Equities Exchange and Quotations. The Company is mainly engaged in the R&D production

sales and services of flavors and food ingredients and is committed to providing green nutritious and healthy flavor Mission

solutions and technical services to global customers. The history of Huabao Flavours & Fragrances in flavor exploration can

be traced back to Continental Chemical Society the first national flavor business established in Shanghai in 1912. Today Green Nutritious Healthy

the Company owns a series of well-known brands including "Huabao" "H&K" "Yifang" "Huafang" "Tianhong" "Hedon"

"Owada" and "Amber" and enjoys a high reputation and popularity in the industry. Especially in the past two decades

Huabao Flavours & Fragrances has taken up the banner of promoting national fragrance and cosmetic brands to the world

worked hard to seize the phased opportunities in overseas markets continuously promoted internationalization and built

a core integrated industrial chain. It has overseas R&D centers in Holzminden Germany Singapore and etc. as well as a Values

nationally recognized enterprise technology center. Additionally it has R&D branches in Guangdong Yunnan and Fujian

upstream raw material extraction centers in Guangdong and Botswana Africa and production bases in Guangdong Jiangxi Client first Value Creation and Shared Achievements

Fujian and Hong Kong creating a globally competitive technological innovation and industrial chain platform in all aspects.Currently the Company has 46 subsidiaries in 7 countries around the world and has developed into an international modern

large-scale industrial group.Enterprise spirit

Innovation Pragmatism Loyalty and Collaboration

The Company has 46 subsidiaries in 7 countries around the world and has developed into an

international modern large-scale industrial group Talent concept

Lofty Aspiring Competent and Versatile

Corporate Strategy

Germany USA

British Virgin Islands Beijing

Indonesia Xizang Shanghai

Singapore Hubei

Strategic positioning Strategic initiatives

Jiangxi

Botswana Guangdong FujianYunnan With natural technology as the core Corporate philosophy Intelligent

Hongkong we provide global consumers with high- management Asset securitization

Hainan quality and cost-effective flavor and health and Business globalization

solutions to become China's leading and

internationally influential listed company of

flavors and ingredients.07 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report About Huabao 08

History

2023

Launched the first restricted

stock incentive plan

2024

2021 Joined the United Nations

Global Compact (UNGC);

Established PT Huabao Co-edited the Guidelines for

in Indonesia Sustainable Development

(Environmental Social and

Governance) for Flavor

2022 and Fragrance Cosmetics 2018 Enterprises; 2015 Wind ESG rating was Acquired

Huabao Flavours & upgraded to A making it Shanghai Yifang

McKinsey drafted the strategic plan for Fragrances successfully the only listed company

the Company rolling out the Company's listed on the Shenzhen in the domestic flavor

"second entrepreneurship" Stock Exchange and fragrance industry to receive an A-rating

2004

Acquired the long-established Chinese flavor and 2020

fragrance brand "H&K"

Huabao (Shanghai) Technology Center was Established Huabao Asia

recognized as a "National Center for Enterprise Pacific in Singapore

Technology"

2007

1947 Established F&G in Africa 2016

Kailong Perfume

Factory was Shanghai Huabao relocated to Lhasa

established and the Xizang and reorganized as Huabao

H&K brand was born Flavours & Fragrances

2006

Huabao International was listed on the SEHK

1996 Established the Huabao Technology Center in Germany

Established Huabao Food Flavors & Fragrances (Shanghai) Co. Ltd.

1912

Established the first national flavor business Continental Chemical Society in Shanghai09 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report About Huabao 10

Industrial Structure

Food sector

The Company is mainly engaged in the R&D production sales and services of flavors and food ingredients. Its main

Dairy beverages nuts and roasted seeds

products are edible flavors daily flavors and food ingredients which are widely used in food beverage cigarette daily

cold drinks candies puffed foods baked

chemical and other fields.goods meat products and snack foods

Food flavors

Tobacco sector

Tobacco (fragrance additives) filter rods

cigarette papers and lining papers

Industrial

Structure of Daily fragrance Daily chemical sector

Huabao Flavours

& Fragrances Aromatherapy and disinfection products washing soap products personal care

household cleaning perfumes & cosmetics

space fragrance pet care oral care and

industrial products

Food ingredients Food ingredients sector

Puffed foods roasted nuts baked foods

meat products flour-made foods instant

foods snack foods hot pot seasonings

beverages etc.11 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report About Huabao 12

Main Honors in 2024

Huabao Flavours & Fragrances

Wind ESG rating rose two levels to A-rating

making it the only listed company in the Jiading Industrial Zone Dream Classroom Student

domestic flavor and fragrance industry to Social Practice Activity Base

receive an A-rating

Fragrance and Cosmetics Industry · Sustainability (ESG) Practice Cases in China's

leading Flavors and Fragrances Company Fragrance and Cosmetics Industry in 2024

Excellent Trade Union Organization 2023 Jiading District "Wang Hongqiang

of Jiading Industrial Zone in 2023 Model Worker Innovation Studio"待补充

Pioneer of 2024 China Light Jiading District Worker's Pioneer

Industry Digital Transformation of 2023

The Company's director Ms. Yuan Xiaoqin The Company's director Ms. Yuan Xiaoqin was

was awarded "Outstanding Contributor in awarded the Honorary President of Shanghai

Fragrance and Cosmetics Industry" Food Additive & Batching Industry Association

Excellent Practice Cases of Selected in the 2024 Ranking

Sustainable Development of Masters of Technology

Excellent Practice Cases Huabao Flavours & Fragrances Jiangxi

Urgently Needed for China of Culture Construction H&K Jiangxi Yifang Shanghai Yifang H&K Jiangxi H&K was awarded as Excellent R&D of Listed Companies

Light Industry Digital of Listed Companies Flavor Xiamen Amber Yingtan Huabao and team in the flavor and fragrance industry

Transformation Guangzhou Huafang and etc. were rated as

national high-tech enterprises13 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report ESG Management 14

ESG Management Material Issue Analysis

ESG Management Architecture Huabao Flavours & Fragrances considers the expectations and requirements of stakeholders as important considerations in the Company's ESG management efforts. This year the Company carried out its first dual ESG material issues identification

work exploring the relevance of ESG issues to its business and the significance of their impact on its finance and analyzing

Huabao Flavours & Fragrances deeply understands the importance of ESG to its sustainable development. ESG is not only their dual material impact on its business development and finance. The Company conducted extensive and in-depth

the core tool for fulfilling environmental social and corporate governance responsibilities but also a key measure to promote communication with various stakeholders through various channels and identified the ESG issues that are most relevant to

the implementation of the Company's strategic goals optimize resource allocation and enhance long-term competitiveness. its business and of greatest concern to stakeholders through the following three steps.To systematically promote ESG in 2024 the Company incorporated ESG management into the Board of Directors'

Strategic Committee and renamed it the "Strategy and ESG Committee" to further optimize the ESG management system

and mechanism. The Company also established an ESG Management Office and an ESG Working Group establishing a Material Issues Identification Process

four-level management structure led and decided by the Board of Directors guided by the Strategy and ESG Committee

coordinated by the ESG Management Office and executed by the ESG Working Group to ensure that ESG responsibilities

are fully integrated into the business management decision-making system. Step 1 Identification of key issues:

In addition the Company has revised formulated and implemented the Working Rules of Strategy and ESG Committee of To understand the impact of its operations in 2024 on the economy society environment

the Board of Directors of Huabao Flavours & Fragrances Co. Ltd. and the ESG Management System of Huabao Flavours and even all stakeholders the Company carried out dual material issues identification.& Fragrances Co. Ltd providing institutional guarantees for ESG. By improving the management structure and system Through policy analysis industry research and benchmarking with peers the Company

construction the Company is promoting the deep integration of ESG concepts and business strategies with higher standards identified major trends related to ESG and identified 21 material issues based on national

and more practical measures and is committed to achieving the organic unity of economic and social benefits laying a solid policies and capital market concerns.foundation for achieving the sustainable development goals.Huabao Flavours & Fragrances ESG Management Structure Step 2 Survey on stakeholders:

The Company invited multiple stakeholders including employee shareholders government

media industry partners and the public to jointly assess the importance of the issues to

Leadership and decision-making body Huabao Flavours & Fragrances and themselves.Board of Directors

Responsible for reviewing the Company's ESG report and major ESG matters reviewing

and approving the disclosure of major information related to the Company's ESG etc.Step 3 Comprehensive analysis of material issues:

Research and guidance body The Company analyzed the questionnaire results of internal and external stakeholders and

prioritized the issues to reflect their "materiality of the economic social and environmental

Strategy and ESG Responsible for researching and developing the Company's ESG vision researching impacts" and "materiality of financial impacts" generating a substantial evaluation matrix.Committee and making comments on the Company's ESG goals strategic planning governance The Company's management reviewed the analysis results and confirmed the key

structure management system etc. reviewing and submitting the Company's ESG disclosure contents of this report as well as the objectives and implementation plan for

report and major ESG matters to the Board of Directors among others. future ESG management.Permanent management body

The office is composed of heads of ESG-related departments and the head is the

ESG Management

Office President. It is responsible for promoting the Company's ESG development strategy

participating in the research and identification of major ESG-related issues of the

Company breaking down and implementing ESG goals coordinating and supervising

the continuous development of ESG-related work etc.Execution unit

The working group is led by the Business Administration and Information Department

ESG Working and is composed of heads of relevant departments and subsidiaries. It is responsible for

Group implementing ESG work tasks in accordance with the Company's overall plan achieving

ESG interim goals and reporting the implementation status to the ESG Management

Office on a regular basis.15 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report ESG Management 16

Materiality Matrix Communication with stakeholders

Attaching great importance to communication with stakeholders the Company has established a regular stakeholder

communication mechanism to identify ESG issues of concern to stakeholders and actively respond to them. This year the

Company mainly communicated with stakeholders as follows:

High

15 19 Main stakeholders Issues of concern

Communication methods and

channels

21 20 ● Compliant operation

2217

3 ● Standardized operation of listed companies ● Workshops

● Tax contribution ● Correspondence

● Environmental management ● Information disclosure and reporting

6 ● Employment promotion ● Regular visitsGovernment departments

● Energy consumption and carbon emissions ● 9 Tax paymentand regulatory agencies

● Water management

12

7 ● General meeting of shareholders

●

Corporate governance Investor communication meeting●

●

● Value creation Investor hotline

2●

4 ● Investor relations

Company research

16 11 ● Stock exchanges' announcement 10 Shareholders and ● Business ethics website

investors

● WeChat official accounts

14

●

8 Customer satisfaction survey

● Customer management ● Email and daily telephone

●

18 Product quality and safety

communication

5

● Technology R&D innovation ● Customer email

● Information security and privacy protection ● Response to customer complaints

13 Customers ● Chemical safety ● Customer visits

● Quality management system

Low Materiality of Financial Impacts High

● Supplier management system

● Product quality and safety

● Open bidding

● Responsible supply chain

●

Supplier Procurement process

1 Due diligence 8 Ecosystem and biodiversity 15 Innovation-driven

protection

● Regular communication with business

2 Communication with 16 Supply chain security ● Industry exchange and cooperation partners

stakeholders 9 Environmental compliance ● Business ethics ● Industry seminars

management 17 Equal treatment to SMEs Other partners

3 Anti-commercial bribery and

anti-corruption 10 Energy usage 18 Safety and quality of

● Intranet

products and services ● Occupational health and safety ● Training and orientation

4 Anti-unfair competition 11 Usage of water resources ● Career training and development ● Email and suggestion box

19 Data security and customer ● Employee compensation and benefits ● Regular meetings

5 Addressing climate change 12 Circular economy privacy protection ● Employee Employment management ● Employee performance evaluation

● Employee activities

6 Pollutant discharge 13 Rural revitalization 20 Employees

● Hazardous waste and emissions

● Website

7 Waste disposal 14 Contributions to the society 21 Intellectual property ● Tackling climate change

●

protection Social media and responses● Renewable and clean energy

●

● Taking social responsibility Charitable donations and volunteer services

Society and the public ● Helping rural revitalization ● Community activities

● Emphasis on local community development

Materiality of Economic Environmental and Societal Impacts17 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 1819 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 20

Innovative R&D Case: Leading the Future Cultivating New Quality - 2024 Science and Technology

Innovation Forum of Huabao Ltd. Successfully Held

In November 2024 Huabao Flavours & Fragrances specially invited a number of major experts and scholars in the

Scientific and technological innovation is the core element in developing new quality productive forces. Huabao Flavours industry and nearly 100 people of insight in scientific and technological innovation within the Company to attend the

& Fragrances deeply implements the innovative strategy of "one generation of sales one generation of R&D and agile forum. During the forum experts shared a wealth of insights including decoding the top ten trends in global food and

transformation" actively promoting its strategic transformation from a "product designer and manufacturer" to a "solution beverage in 2025 the development opportunities and challenges of the nutritional and healthy food industry new

provider". By formulating the Guidelines of Huabao Flavours & Fragrances Co. Ltd. on Production of Technological opportunities for the development of functional food ingredients the broad application prospects of synthetic biology

Innovative Products the Company has established a complete innovative product iteration mechanism. While continuously in the food industry and how generative AI empowers the flavor and fragrance industry. These insights provides

optimizing the performance of existing products it has proactively planned the research and development of next-generation Huabao Flavours & Fragrances with valuable strategic guidance and a reference framework for future practice in

trend products accelerating the industrialization and commercialization of scientific and technological achievements and exploring the frontiers of science and technology and driving sustainable development.comprehensively improving end-to-end market responsiveness and improve the efficiency of R&D investment and output.This innovation system has effectively improved the efficiency of R&D input-output not only meeting the urgent needs of Huabao Flavours & Fragrances also provided participants at internal theme sharing session with in-depth analysis

global customers for green nutritious and healthy products but also continuing to lead the flavor innovation in the food and of its latest technological frontiers future development plans market evolution trends and other core content fully

beverage industry consolidating the Company's vision of "flavor your life". demonstrating the Company's profound heritage and outstanding strength in the field of scientific and technological

innovation.Key performance

The successful holding of this forum not only further enhanced the leading position of Huabao Flavours & Fragrances

in the field of technological innovation but also injected new vitality and impetus into the Company's future

Indicator Unit 2022 2023 2024 development.R&D investment RMB 10000 15369.36 13384.68 13652.40

Total R&D expenditure in operating income % 8.12 9.02 10.06

Group Standards Jointly Formulated by the Company

Standard name

Guidelines for the Shelf Life Management of Food Flavors

Guidelines for the Shelf Life Management of Daily-Used Spices 2024 Science and Technology Innovation Forum of Huabao Ltd.Natural Food Flavors

Odor Control Technical Guide21 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 22

Innovative R&D Results Product Innovation

The Company adheres to market demand-oriented approach actively deploys innovative research and development in food The Company's Food Innovation Center has launched multiple categories and series of innovative products such as flavored

flavors and ingredients and deeply explores new trends new technologies and new fields in the development of the flavor syrups plant essences and plant extracts. They are mainly used in beverages (such as coffee and tea) ice cream and

industry at home and abroad promoting the technological upgrading of flavor products and the innovative development of baking. With raw material innovation and technology research and development it provides the market with diversified

food ingredients to meet the diverse needs of customers. solutions.Technological Innovation Huabao Flavored Syrups

Probiotics crystal ball technology

Bursting bead rubber technology

Non-meat thermal reaction technology

Plant Essences

Sugar-reducing flavor technology

New healthy umami technology

Hot melt extrusion encapsulation technology

Plant Extracts

Microencapsulation technology23 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 24

R&D Base Construction Educational Background of R&D Personnel

During the reporting period the Company's Technological Innovation Food Ingredient Industrialization Pilot Base project

was successfully completed and put into production. Two production lines for natural plant extract concentrate and flavored

syrup were built equipped with UHT instantaneous sterilization equipment and aseptic filling lines. The workshops were built

in accordance with GMP cleanliness standards and a food ingredient laboratory with full functions such as physical and

chemical microbiological analytical testing and stability was built. This marks that the Company has explored new paths for Bachelor

industrial transformation in the field of food ingredients and has taken a solid and crucial step. Others 116

135

PhD

7 Master

43

Extraction and Concentration Workshop Preparation and Sterilization Workshop Key performance

In 2024 the Company initiated 12 scientific and technological projects successfully completed 9 projects and

had 28 projects ongoing by the end of the year.In addition Huabao Flavours & Fragrances has established close industry-university-research cooperation with many well-

Food Ingredients Laboratory known domestic universities and research institutions such as Jiangnan University Nanchang University and Jiangsu

University. Through project cooperation technical exchanges talent training and other forms it continuously introduces new

Scientific Research Team Building scientific research concepts and technical means to enhance its independent innovation ability.The Company attaches great importance to

the construction and training of a scientific Number of R&D personnel Case: Industry-university-research Collaborative Innovation Producing Breakthrough in

research team and continuously optimizes its Heat-resistant Flavor Technology in Cooperation with Nanchang University

talent structure. It has gathered an expert team

consisting of a number of foreign experts with 350 23.57%

24.57%

25%

international influence well-known domestic 301 In the industry-university-research cooperation project with

perfume experts and a group of doctors and 300 285 the College of Food Science & Technology Nanchang

masters in the fields of food science bio- 20% University the Company conducted research on heat-

engineering chemistry etc. The Company 250 resistant controlled-release flavor encapsulation technology

uses the postdoctoral research workstation as to address the problem of poor flavor retention of edible

a platform to continuously introduce doctoral 200 15% flavors under high temperature conditions. Through joint

students from universities to carry out special postdoctoral training the two sides successfully developed

research projects to help its technological a flavor product that dissolves quickly in cold or hot water

innovation. The Company also attaches equal 150 10% and maintains a continuous fresh flavor. It has been used

importance to the introduction and incentives in hot drinks tea bags solid beverages candies and other

of talents and has formulated systems such 100 fields. This project not only broke the monopoly of foreign

as the Implementat ion Rules of Huabao 5% companies on the core technology of flavor encapsulation

Flavours & Fragrances Co. Ltd. for Reward 50 Fragrance Products - Tea Bags Fragrance Beadsbut also significantly enhanced the market competitiveness

and Punishment Management of Science of the Company's flavor products. In the future the two sides will continue to deepen cooperation develop flavor

and Technology Projects to encourage every 0 0 products that can withstand high temperatures of 180°C with a long shelf life and unique flavor and further expand

researcher to actively innovate and conduct 2023 2024 their applications in frying extrusion and puffing injecting new impetus into the development of the industry.down-to-earth research to achieve a win-win

situation of value creation and personal returns. Number of R&D personnel (person) R&D personnel ratio25 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 26

Intellectual Property Protection International Expansion

The Company strictly abides by relevant national laws and regulations such as the Patent Law of the People's Republic of

China the Copyright Law of the People's Republic of China and the Enterprise Intellectual Property Management Standards In the process of globalization Huabao Flavours & Fragrances actively responds to the Belt and Road high-quality

and has formulated internal rules and regulations such as the Implementation Measures of Huabao Flavours & Fragrances development initiative taking international expansion as its core strategy and continuously improving its global

Co. Ltd. for Publishing Papers and Applying for Patents and the Implementation Rules of Huabao Flavours & Fragrances competitiveness through the two-way efforts of external market development and internal R&D system construction. The

Co. Ltd. for Patent Management to further refine and clarify the creation protection and use of intellectual property rights. Company actively develops overseas markets and builds supply chain network in Southeast Asia to integrate high-quality

resources promoting the internationalization of key categories such as food flavors and food ingredients; relying on the

global R&D collaborative system and combining localized technological innovation it also continuously optimizes its product

structure to meet the diverse needs of overseas markets.Key performance

Overseas Market Expansion

In 2024 the Company published 4 papers and applied for 1 software copyright (pending approval).Under the guidance of the Belt and Road Initiative the Company continues to deepen its international strategic layout

In 2024 the Company obtained 19 new patents including 9 invention patents and 10 utility model patents; forming a diversified market structure that focuses on emerging markets such as Southeast Asia and Africa on the basis of

consolidating the existing European market. It fully leverages the important role of its overseas companies Huabao Asia

As of the end of the reporting period the Company held 268 patents including 162 invention patents and 106 Pacific and PT Huabao Food as regional centers in Southeast Asia and continuously enhances its brand influence and

utility model patents and had a total of more than 10000 flavor formulas that have been sold. market competitiveness through a series of measures such as deepening local cooperation creating innovative products

and actively participating in international exhibitions. Relying on the strategic layout of multi-point efforts the Company

is gradually achieving steady expansion in the Southeast Asian and African markets demonstrating the location value

of overseas companies reinforcing domestic market and radiating overseas market and also injecting new impetus into

Number of Patents Held economic cooperation and cultural exchanges among countries participating in the Belt and Road Initiative.Starting from scratch PT Huabao Food has established close and trusting cooperative

relationships with many local tea and food ingredient chain companies especially with the

leading coffee chain brand Tomoro. In May 2024 it successfully launched the "Garfield" IP co-

2022 246 branded product leading the Indonesian flavored coffee market.

In August 2024 at Tomoro's 2nd Anniversary Conference PT Huabao Food was the only

supplier to receive the “Quick Response Award”.Indonesia In September 2024 at the FIA (Fi Asia Indonesia) held in Jakarta PT Huabao Food and

2023 256 Huabao Asia Pacific made their debut in the Asia-Pacific market showcasing the Company's

four major product lines of flavors and fragrances flavored syrups flavor premixes and jam

products and received a positive response from the market.

2024 268 The Company achieved business breakthroughs with a variety of fish sauce products and

winter melon flavored functional beverages;

Vietnam and In October 2024 at the Vietnam Food Ingredients Exhibition distributor P.P.T and Huabao

Thailand Flavours & Fragrances jointly exhibited Huabao flavored syrup products.

050100150200250300

The Company quickly formed a sales team initially establishing a sales network covering more

than 10 countries and has achieved sales one after another.Africa

Indonesia's Tomoro Coffee and Garfield IP Group photo of F&G Employees in Africa

Co-branded Products27 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 28

Case: PT Huabao Food Entered the "Silicon Valley" of Jakarta Case: Debut at the Fi Asia Indonesia

In June 2024 PT Huabao Food officially unveiled its new office building in the BSD in Jakarta opening a new chapter In September 2024 the Fi Asia Indonesia opened at the Jakarta International Expo. Huabao Asia Pacific and

in the development of Huabao overseas food business. The rolling out of this project marks the Company's foothold PT Huabao Food of Huabao Flavours & Fragrances jointly participated in the exhibition and explored the future

in the Southeast Asia and is also a key step for the Company to respond to the Belt and Road Initiative and deepen development trends and innovation opportunities of the food industry with more than 800 food companies from more

its global business. By integrating Indonesia's natural raw material resources with its international R&D system than 40 countries and regions in the global food industry. This event not only deepened the Company's understanding

the Company aims to provide innovative solutions to local and global customers while promoting economic and of the Southeast Asian market but also further promoted the Company's international development strategy enabling

cultural exchanges between China and Indonesia. In the future the Company will build a raw material system for it to expand global market and strengthen regional cooperation.Southeast Asian food ingredients and flavor products with Indonesia as the center providing end-to-end support for

domestic food and beverage companies to go overseas and continuing to promote the healthy development of the

internationalization strategy.PT Huabao Food Settles in the "Silicon Valley" of Jakarta

Huabao Flavours & Fragrances Participates at the Fi Asia Indonesia29 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 30

Overseas R&D System Digital Intelligence Empowerment

The Company regards technological innovation as the primary driving force for its sustainable development and has built

a global R&D system to provide strong technical support for its internationalization strategy. Relying on the product life-

cycle management (PLM) system the Company has achieved collaboration among R&D teams in Shanghai Guangzhou To improve operational efficiency reduce costs and optimize customer experience Huabao Flavours & Fragrances

Singapore and other locations forming a cross-regional and cross-organizational innovation network. Through the targeted has continuously made efforts to comprehensively integrate the digital intelligent transformation of R&D production

release of overseas projects each regional team combines local market demand with technological advantages to develop supply chain sales finance and other departments by opening up software channels and promoting cross-departmental

products that meet regional flavor preferences and gradually build a localized product system. The construction of a collaboration and information sharing striving to achieve the full implementation of intelligent decision-making intelligent

global R&D system provides a solid guarantee for the expansion of overseas markets and further promotes the in-depth operation and intelligent management and comprehensively enhance the Company's competitiveness and sustainability.implementation of the internationalization strategy.Digital Intelligent Transformation Goals of Huabao Flavours & Fragrances

Case: Overseas Raw Material Library Built

Short-term Digital Intelligent Transformation Goals

To enable overseas products to meet the regulations of different countries the Company has started to build an

overseas raw material library. As of the end of 2024 the overseas raw material library has included more than 1000

conventional raw materials. In addition taking Indonesia as a key overseas market the Company is also speeding 1. Intelligent digital R&D management: improve the efficiency of R&D project management shorten

up the halal certification of its Indonesian products. Currently the Company has more than 600 products obtained the R&D cycle and enhance product innovation capabilities with Intelligent digital tools and platforms

Indonesian halal certification. (PLM system OA software etc.).

2. Optimal supply chain management: intelligently digitalize the whole process from procurement

to production and logistics by introducing intelligent digital supply chain management systems (SAP

centralized procurement platform bar-code system etc.) thereby improving the transparency and

responsiveness of the supply chain.

3. Production efficiency improvement and operating costs reduction: improve the accuracy

efficiency and consistency of the production process and reduce labor costs and production costs by

introducing automated intelligent digital production systems (smart factories automated production

lines etc.).

4. Data-driven decision support: establish a data center and BI system to collect and analyze various

business data in real time providing a scientific basis for strategic decision-making and operational

optimization.Selected Halal Certification for the Company's Products

Long-term Digital Intelligent Transformation Goals

1. Promote intelligent product R&D with AI machine learning and big data analysis technologies to

enhance the innovation and market adaptability of product design.

2. Realize intelligent and adaptive optimization of production lines with AI and IoT technologies to

maximize the automation flexibility and precision of production.

3. Achieve intelligent management of enterprise operations with AI cloud computing and data

analysis tools to improve the Company's decision-making efficiency and response speed.31 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 32

Digital Intelligent Factories

The contract management system with a legal The SAP system achieves seamless connection between The Company actively responds to the country's new deployment to accelerate the digital industrialization and industrial

contract template library established by the Company procurement production sales finance and other modules digital transformation and continues to advance the construction of digital intelligent factories. By deeply integrating

and risk control measures in contract approval unifies and standardizes business processes realizing data advanced information technology artificial intelligence and automation equipment it breaks the bottleneck of traditional

improves the compliance and risk control capabilities standardization and integration covering the end-to-end business manufacturing models and promotes the automation upgrade of the entire chain from production planning to finished product

of contract review and achieves a full closed loop of value chain and providing data support for the Company's delivery. It not only greatly improves production efficiency but also effectively optimizes resource utilization and energy

contract management. strategic advancement business growth and key decisions. management promoting green production and low-carbon operations. The construction of digital intelligent factories not

only deeply meets the urgent needs of digital transformation in the overall national development but also brings significant

cost advantages and market competitiveness to the Company enabling the Company to better meet changes in market

The procurement The BPC system demand.management platform optimizes the key nodes

phase I leverages of the reconciliation

the advantages The contract The SAP consolidation and Case: Jiangxi H&K Further Improved Information Construction

of procurement management system reporting processes system

scale reduces of the headquarters

procurement costs and its subordinate

units accelerates the As a demonstration unit of information construction of Huabao Flavours & and enhances supply

The consolidation process Fragrances Jiangxi H&K relies on advanced information technology and chain capabilities

procurement The BPC and realizes integrated automation equipment to achieve the goals of lean production efficient realizing e-commerce management Digital Intelligent system standardized automated management and low-cost operation. In 2024 Jiangxi H&K comprehensively procurement. In platform Projects of and scalable report optimized its production planning warehouse management production addition the platform

is integrated with Huabao Flavours preparation on the basis

process finished product packaging and other links based on the existing SAP

of centralized financial MRP (Material Requirements Planning) system promoted the automation SAP OA and other & Fragrances

control improving the and intelligent upgrading of the entire production process and realized the systems to achieve

efficiency of consolidated efficient combination of manual and automated production greatly improving data integration The barcode

and business The funding system statement issuance and

production efficiency and on-time delivery rate.platform

standardization. strengthening financial Automation Equipment - Robotic Arm

control data analysis

The PLM platform and decision support

capabilities. Through precise data analysis and forecasting the SAP MRP system automatically

generates optimal production schedules and material requirements plans based on

business needs production capacity and material inventory.The barcode system is seamlessly The funding platform includes direct

connected with the SAP system bank-enterprise settlement account Production Planning The system automatically generates warehouse scheduling plans based on the

and covers key business management payment and collection and Materials first-in-first-out principle and out-of-warranty material control requirements to

processes such as procurement The PLM platform covers the raw materials management and funding forecasting Management ensure optimal use of materials monitor the inventory status of materials in real

quality inspection production formulas processes specifications and models improves payment efficiency time and automatically adjust procurement and replenishment plans.warehousing and sales ensuring regulatory management of flavors and and security and strengthens

the transparency of the production food ingredients improves data sharing transaction control promoting data

process optimizing inventory knowledge accumulation and retrieval interchange between industry and The intelligent auxiliary system helps workshop managers arrange production

management and production plan efficiency and realizes automated regulatory treasury systems and achieving tasks reasonably. The feeding process adopts automatic weighing and counting

execution and promoting the judgment enhancing R&D efficiency and resource coordination and optimal technology to ensure the accurate feeding amount of each raw material.digital and paperless management compliance. In addition the R&D formulas allocation.of the production process. are seamlessly connected to production Workshop Production The system's built-in error-proofing mechanism and tolerance ratio control

plants supporting global R&D collaboration and Quality Control effectively avoids erroneous placement of raw materials during the production

and promoting integrated product data process.management.The system automatically performs canning weighing capping and labeling

The digital intelligent projects not only improve the Company's operational efficiency and resource utilization rate but according to preset parameters to ensure that each bottle of product meets

also enable the Company to be more flexible and responsive to the market. By integrating various business systems the the specification requirements. In addition the efficient integration of automatic

Company obtains accurate data in real time and ensures the transparency and flow of information thereby supporting faster packaging and palletizing by robotic arms completes the final processing of the

decision-making and more refined management laying a solid foundation for future business expansion and technological Automated Packaging finished products.innovation. and Logistics33 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 34

Digital Intelligent Perfumery Information Security Protection

Based on the construction of digital intelligent factories the Company further applies digital intelligent technology to the In the context of accelerated digital intelligent transformation ensuring data security and customer privacy is an important

R&D field to promote the intelligent transformation of flavor R&D. So far the Company has completed the construction of part of fulfilling its social responsibilities. In 2024 the Company built a solid information security defense line by continuously

the spectrum basic database laying a solid data foundation for intelligent perfumery and intelligent manufacturing. To realize strengthening technical protection measures optimizing the Information Security Management Regulations of Huabao

AI-enabled technological innovation the Company has launched the research and development of intelligent assisted Flavours & Fragrances Co. Ltd. establishing full-time information security management specialists and enhancing

perfume making. With AI neural network deep learning technology and massive data training it conducts in-depth research employee information security awareness.on the composition of various chemical components to achieve intelligent identification of unknown flavor samples. This not

only improves the efficiency and accuracy of flavor research and development but also provides a scientific basis for the

development of innovative formulas thereby improving product quality and market competitiveness. The Company plans to

initially realize intelligent analysis of the ingredients of flavor samples in 2025 marking the comprehensive transformation of Key performance

flavor R&D from traditional experience-driven approach to data-driven and intelligent approach.In 2024 the Company had no data security incidents; no incidents of customer privacy violation.Case: Light Industry Digital Transformation Driven by Technological Innovation

In November 2024 Huabao Flavours & Fragrances based on its outstanding achievements in the field of digital Information Security Management Measures of Huabao Flavours & Fragrances

transformation was successfully selected in the 2024 Ranking of Masters of Technology Urgently Needed for

China Light Industry Digital Transformation at the 14th China Light Industry Informatization Conference and was

awarded the title of Pioneer of 2024 China Light Industry Digital Transformation. The Company focuses on the Formulate and implement the Information Security Management Regulations

research and development of flavors and food ingredients. By introducing Siemens digital technology and AI deep Improve of Huabao Flavours & Fragrances Co. Ltd. to systematically standardize data

learning models it has built an intelligent management system covering the entire life cycle of formulas significantly management management access control risk prevention and other aspects.improving R&D efficiency and compliance. In particular the Company has made important breakthroughs in the field system

of digital intelligent perfumery using AI technology to accurately identify fragrance ingredients opening up new paths

for product innovation and plans to

achieve intelligent analysis of fragrance Establishing Establish a professional team consisting of IT heads and information security

ingredients by 2025. This series of an information administrators to focus on information security management and risk prevention and

achievements not only demonstrates security team control.the Company's technological leadership

in digital transformation but also sets a

benchmark for the industry and further

consolidates its leading position in the Data backup: establish an efficient backup mechanism perform multi-level backup of

field of light industry digitalization. important data regularly and develop detailed recovery plans.Network security protection: deploy network firewalls formulate security access

Implement policies monitor network traffic in real time and prevent network attacks.safety protection

measures Data encryption: use advanced encryption technology to protect sensitive data and

prevent unauthorized access.User access control: strictly assign data access rights according to job requirements

to prevent unauthorized operations.Conduct risk

assessment and Conduct regular network and system security assessments to identify potential threats

vulnerability and fix security vulnerabilities in a timely manner.remediation

Establish an

emergency Establish an information security emergency plan to ensure rapid response and

Selected in the 2024 Ranking of Masters of Certificate of Pioneer of 2024 China Light Industry Digital response reduce the scope of impact in the event of emergencies such as data leaks or cyber

Technology Urgently Needed for China Light Transformation mechanism attacks.Industry Digital Transformation35 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 36

Main Duties of Information Security Administrators Industry Cooperation and Exchange

Data security policy: ensure the effective implementation of the Company's data security policy

covering all aspects such as data storage transmission and backup to ensure data security. Huabao Flavours & Fragrances focuses on improving consumers' quality of life and actively participates in various industry

events and innovative activities. The Company effectively links industry resources with outstanding performance and

promotes technological innovation and sustainable development of the flavor and fragrance industry. Through collaboration

Monitoring and risk assessment: conduct regular system and network security monitoring the Company not only continues to optimize product value but also injects new impetus into industry progress. It is

assess potential risks and promptly discover and repair security vulnerabilities. committed to bringing healthier and more delicious taste experience to global consumers and helping the industry move

towards a more sustainable future.User access management: strictly control data access rights to ensure that sensitive information Industry Exchange Conferences Huabao Flavours & Fragrances Participated in 2024

is only accessible to authorized personnel and prevent data leakage due to negligence in access

management.Emergency response and incident handling: organize regular emergency drills covering

scenarios such as data recovery network interruption and server failure to comprehensively March 2024

enhance emergency response capabilities. In response to sudden security incidents such as data The 27th Food Ingredients China (FIC2024)

leaks and cyber attacks we can take prompt countermeasures to minimize losses and ensure

business continuity and stability. March 2024

Personal Care and Homecare Ingredients

Employee safety training: offer information security awareness training along with employee (PCHi2024)

orientation to strengthen their safety awareness and reduce the safety risks caused by human

errors.April 2024

Case: Improving Information Security Awareness to Build a Solid Information Security The 2nd Synthetic Biology Industry

Defense Line Conference & Exhibition

May 2024

Huabao Flavours & Fragrances attaches great importance to data security and customer privacy protection. In

2024 China Science-Technology

September 2024 the Company specially incorporated this key topic into the new employee orientation training.Symposium of F&F Industry

Through interpretation of laws and regulations related to data security and customer privacy protection case analysis

and such other activities employees got a deep understanding of the significance of information security and the

serious consequences of information leakage. This training effectively enhanced new employees' information security

awareness and incident prevention capabilities.September 2024 June 2024

AAES2024 Asiaceutical Expo & Summit 2024 (the 10th) National Academic Exchange

Conference on New Technology Development

and Application of Flavors and Fragrances & The

5th New Products New Technologies and New

October 2024 Equipment Exhibition

2024 CAFFCI Annual Meeting & Expo (CAME)

November 2024

Orientation Training for New Employees November 2024

China Congress of Perfumer & Flavorist (CCPF) The 14th China Light Industry Information Conference37 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report The Big Picture: Innovation-driven International Journey 38

Case: Technological Innovation-Led Flavor Promotes Healthy and Sustainable Development Case: Jinling Ode to Fragrance: A Delicious Encounter

In May 2024 the 2024 China Science-Technology Symposium of F&F Industry organized by the China Association of In October 2024 the CAFFCI Annual Meeting & Expo (2024 CAME) was held in Nanjing. Huabao Flavours &

Fragrance Flavour and Cosmetic Industries with the theme of "Smart Technology Unlimited Possibilities" was held in Fragrances and 138 international and domestic high-quality manufacturers participated in the event and gathered

Wuxi to share the latest development trends and cutting-edge research in science and technology in the global flavor together with industry leaders experts and scholars and corporate representatives to discuss industry development

and fragrance industry. Huabao Flavours & Fragrances was invited to participate in a series of activities including trends share the latest technological achievements and jointly seek high-quality development of the industry. At the

the AI technology forum the commendation ceremony the perfumer competition preliminaries and the Technical 2024 CAME Huabao Flavours & Fragrances made a splendid appearance with its innovative achievements in the

Guidelines for Odor Control in the Flavor and Fragrance Industry group standard launch meeting demonstrating its three major business areas of food ingredients edible flavors and daily-use flavors allowing the audience to get close

outstanding comprehensive innovative strength. to and experience in person the flavored products that combine taste and health so that more people appreciate the

deliciousness and health brought by Huabao Flavours & Fragrances.Exhibition Booth for Innovative Achievements in Three Duan Jingwei Director of Business Administration

Business Areas and Information Department sharing His Views at the

Company's ESG Development

Commendation Ceremony of the 2024 China Conference of Cosmetics Science and

Technology & The 15th Academic Symposium

Case: Flavor and Fragrance Exchange Meeting Exploring Industry Innovation and Development

In June 2024 the 2024 (the 10th) National Academic

Exchange Conference on New Technology Development

and Application of Flavors and Fragrances & The 5th

New Products New Technologies and New Equipment

Exhibition co-organized by the National Light Industry

Flavor and Fragrance Industry Productivity Promotion

Center and well-known industry companies was

grandly held in Guangzhou.H&K Flavor gave a technical report at the conference

titled "Indispensable Enzymes - Research Progress Huabao Food Innovation Center Introduces its Natural

in the Preparation of Dairy Flavors with Enzymatic Extract Products Independently Developed and Produced

Hydrolysis Technology" sharing the research results

of Huabao enzymatic hydrolysis of dairy flavors from four aspects: technical background development status

product examples and trend outlook. It fully demonstrated its latest achievements in the field of flavor and fragrance

technology innovation to the industry and conducted in-depth technical exchanges and cooperation discussions with

Vice President of Huabao Flavours & Fragrances Innovation Center more than 500 well-known experts scholars and corporate representatives in the field of flavors and fragrances

Dr. Wang Hongqiang Gives a Speech at the Forum from all over the country and learned advanced technologies and innovation experiences.39 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 4041 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 42

Shareholders and the General Meeting of Shareholders

Corporate Governance The General Meeting of Shareholders serves as the Company's authority body. To regulate corporate conduct and ensure that the general meeting of shareholders exercises its authority in accordance with the law the Company strictly organizes

the general meeting of shareholders in accordance with the provisions of relevant laws and regulations including the

Company Law the Securities Law and other normative documents as well as the Articles of Association. This ensures that

Huabao Flavours & Fragrances has always been committed to building an efficient transparent and shareholders have the right to be informed about participate in and vote on significant corporate matters. The Company

compliant corporate governance system strictly following the guidance of laws and regulations such also strives to facilitate shareholder attendance at these meetings particularly safeguarding the legitimate rights and

as the Company Law and the Securities Law thoroughly implementing various requirements of the interests of minority shareholders enabling them to fully exercise their legal rights as shareholders.Code of Corporate Governance for Listed Companies and the Rules Governing the Listing of Stocks

on the ChiNext Market of Shenzhen Stock Exchange actively responding to the requirements of the

Guidelines on Self-Regulation of Listed Companies on Shenzhen Stock Exchange No.2 - Standardized

Operation of Listed Companies on the ChiNext Market and other relevant normative documents and

constantly improving and optimizing corporate governance structure. The three-committee and one- Key performance

layer governance structure consisting of the General Meeting of Shareholders the Board of Directors

the Board of Supervisors and the management further standardizes the Company's daily operation In 2024 the Company held 5 general meeting of shareholders.processes significantly enhances the scientific and standardized nature of corporate governance and

lays a solid foundation for the Company's sustainable development.Directors and the Board of Directors

The Company's Organization Chart The Board of Directors is the Company's operational decision-making and business leadership body. The Company strictly

complies with the Company Law the Securities Law the Rules Governing the Listing of Stocks on the ChiNext Market

of Shenzhen Stock Exchange and other relevant laws and regulations as well as the Articles of Association the Rules

of Procedure of the Board of Directors and the Work System for Independent Directors to regulate the deliberation and

General Meeting

Strategy and ESG decision-making procedures of the Board of Directors of the Company so as to enable the Directors and the Board of of Shareholders

Committee Directors to effectively perform their duties.Board of Supervisors Audit In order to further strengthen the professionalism and independence of decision-making the Board of Directors of the Audit Committee Department Company has established four special committees: the Audit Committee the Strategy and ESG Committee the Nomination

Board of Directors Committee and the Remuneration and Appraisal Committee. Each special committee provides scientific and professional

Nomination

Committee opinions and references for the Board of Directors' decisions in accordance with strict rules of procedure and operating Board of Directors processes.Office Remuneration and

President Appraisal Committee

Key performance

In 2024 the Company held 8 Board of Directors meetings 1 Strategy and ESG Committee meeting 6

Remuneration and Appraisal Committee meetings 5 Audit Committee meetings and 1 Nomination Committee

meeting. The average attendance rate of the Board of Directors was 100%.In 2024 the Board of Directors of the Company consisted of 9 directors including 3 independent directors

accounting for 33%; there was 1 female director accounting for 11%.Subsidiaries

Marketing Center

Technology Innovation

Center

Operation Service Center

Purchasing Department

Investment and

Development Department

HR and Administration

Department

Business Administration

and Information

Finance Department43 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 44

Diversity on the Board of Directors

Professional capabilities Investor Relations

Type Name Gender

Industry Professional Financial

experience qualification management Huabao Flavours & Fragrances adheres to the core principles of compliance equality initiative and

honesty and trustworthiness and is committed to building a fair transparent and efficient investor

Chairman Xia Liqun Male relations management system. The Company strictly abides by the Securities Law Guidelines for

Investor Relations Management of Listed Companies and other relevant laws regulations standardized

Non-independent director Lin Jiayu Male documents and relevant provisions of the Articles of Association etc. and has formulated the

Management System for Information Disclosure and Investor Relationship to ensure the accuracy and

Non-independent director Yuan Xiaoqin Female timeliness of the disclosure of all financial information and to safeguard the fair order of the capital

market.Non-independent director Gao Xu Male

Non-independent director Ren Miao Male

Non-independent director Han Pengliang Male The Company practices the investor-oriented concept actively responds to investors' concerns conducts investor

relations management through multiple channels platforms and methods provides investors with a platform to directly

Independent director Quan Ze Male understand the Company's dynamics and actively conveys corporate strategies operating results and future prospects

thereby enhancing investors' understanding and recognition of the Company. In addition the Company has long attached

Independent director Wu Changyong Male importance to protecting the legitimate rights and interests of investors especially small and medium-sized investors

creating opportunities and providing convenience for small and medium-sized investors to participate in activities ensuring

Independent director Yang Jinjian Male the smooth flow of relevant communication channels and avoiding selective disclosure of information.Investor Communication Channels

Supervisors and the Board of Supervisors

General

The Board of Supervisors serves as the Company's supervisory body and performs supervisory functions on behalf of the Meeting of

general meeting of shareholders. During the reporting period the Board of Supervisors of the Company conscientiously Shareholders

performed its duties in accordance with the Company Law the Articles of Association the Rules of Procedure of the Board WeChat Investor

of Supervisors and other relevant laws regulations and rules and independently supervised the Company's material Public Communication Account Meeting

matters related transactions financial status and the legality and compliance of the directors and senior management in

performing their duties ensuring the Company's compliance operations improving transparency and preventing risks and

promoting the Company's sustainable and healthy development. Stock Exchange Announcements Investor

and Official Hotline

Website

Key performance Q&A on Company Easy IR Research

In 2024 the Company held 5 meetings of the Board of Supervisors.In 2024 the Board of Supervisors of the Company consisted of 3 supervisors including 1 employee representative

supervisor.Key performance

In 2024 the Company held 3 investor exchange meetings communicated with 41 investors issued 3

announcements on investor relations and exchange records and responded to 15 inquiries from Easy IR

addressing a total of 16 questions.45 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 46

Information Disclosure

Huabao Flavours & Fragrances is fully aware of the importance of information disclosure in maintaining the order of the Risk Prevention and Control

capital market and protecting the rights and interests of investors. In order to standardize the Company's information

disclosure behavior and ensure the authenticity accuracy completeness timeliness and fairness of the disclosed content In today's complex and ever-changing business environment risk management has become the

the Company has formulated the Management System for Information Disclosure and Investor Relationship to clarify the cornerstone of sustainable development of enterprises. Huabao Flavours & Fragrances is well aware

standards and procedures for information disclosure strengthen internal control and supervision mechanisms and improve that establishing a sound risk management system is crucial to ensuring the Company's stable

transparency and quality of information disclosure. operation safeguarding shareholders' interests and enhancing market competitiveness.Key performance Comprehensive Risk Management System

In 2024 the Company ensured that there were no false records misleading statements or significant omissions

The Company strictly adheres to the Guidelines on Self-regulation of Listed Companies on Shenzhen Stock Exchange No.2

in the disclosed information; the Company disclosed a total of 98 announcements and related disclosure - Standardized Operation of Listed Companies on the ChiNext Market the Basic Norms of Enterprise Internal Control and

documents including 4 regular reports and 51 ad hoc announcements. its supporting guidelines which regulate the internal control of listed companies. Focusing on development strategy the

Company continuously optimizes and improves the Comprehensive Risk Management Measures of Huabao Flavours &

Fragrances Co. Ltd. It establishes a three-line risk management model persistently advances risk identification analysis

and assessment and assists in the adoption of risk response measures. While employing risk management strategies such

as acceptance mitigation transfer and avoidance the Company enhances operational efficiency and effectiveness and

Protection of Shareholders' Rights and Interests creates and protects shareholder value.The Overall Goal of the Company's Comprehensive Risk Management

On the premise of safeguarding the Company's daily operations and ensuring long-term development in order to provide

continuous returns to shareholders the Company in accordance with the relevant provisions of the Company Law the

Notice Regarding Further Implementation of Cash Dividends Distribution of Listed Companies the Regulatory Guidelines

Keep risks within a range that aligns with the Company's development strategy and is

for Listed Companies No.3 - Distribution of Cash Dividends of Listed Companies and the Articles of Association has long

manageable;

adhered to a relatively high level of cash dividends. This practice allows all shareholders to share the Company's operational

achievements and development.Over the long term the Company has focused on increasing both the frequency and amount of dividends to enhance market

competitiveness optimize capital structure and motivate management to improve efficiency. This strategy also aims to boost

investor confidence increase investment returns and enhance the flexibility of asset allocation. In April and October Ensure authenticity and reliability in internal and external communication;

2024 the Company distributed cash dividends of RMB 250 million and RMB 74 million respectively totaling RMB 324

million .Guarantee compliance with national laws regulations and policies to

maintain lawful and compliant operations;

Enhance the efficiency and effectiveness of business operations reducing

uncertainties in achieving objectives;

Establish a comprehensive risk management system aligned with the Company's

overall objectives to prevent significant losses caused by catastrophic risks or human

errors.47 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 48

Three-line Model for Risk Management of Huabao Flavours & Fragrances Internal Control Management

Internal control management is the front-line of defense for enterprise risk prevention and control and plays an irreplaceable

Organizational governance body role in ensuring asset security improving operational efficiency and promoting compliant operations. The Company attaches

Be responsible to stakeholders and assume supervisory responsibilities great importance to the construction and improvement of internal control system and has hired a professional internal

control consulting team to provide diagnosis and consulting services for the existing internal control system. It is committed

to building an internal control network that covers the entire business process and runs through all aspects of decision-

Functions of organizational governance body: integrity leadership and transparency

making execution and supervision.Case: Convening Special Internal Control Training to Continuously Improve Internal

Control Effectiveness

Management Internal audit

Take actions (including risk management) to achieve organizational goals Independent confirmation service

To strengthen the construction of the Company's internal control system and enhance the effectiveness of internal

control in September 2024 Huabao Flavours & Fragrances in collaboration with professional internal control

Front-line functions Second-line functions Third-line functions consulting agencies organized a kick-off meeting of the internal control system construction project and internal

control special training. The training covers multiple aspects including the basic concepts of internal control sharing

Provide products/services to Provide expertise support Provide expertise support of internal control cases definition and classification of risks methods and processes of core risk management

customers; Managing risk oversight and reasonable oversight and reasonable cooperation mechanism for project implementation scope of internal control system construction and project

questioning on risk-related questioning on risk-related timetable to enhance employees' understanding of internal control management and promote the Company's

matters matters sustainable development.Legend

Take the responsibility Delegate authority provide Maintain consistency communicate

and report guidance and offer resources coordinate and collaborate with

and supervise each other

Work Flow of Risk Management

Internal Control Special Training

Risk Risk Risk Risk Risk

Management Identification Assessment Response Management

Information Supervision Tax Management

Collection and

Improvement

The Company places a high priority on tax management strictly adhering to national tax laws and regulations and has

established a comprehensive tax management system to ensure the standardization and compliance of tax operations. The

Finance Department serves as the Company's primary responsible unit for tax management coordinating the tax affairs of

the headquarters and all subsidiaries including routine matters such as tax registration filing payment and accounting.By conducting regular tax risk assessments and audits the Company promptly identifies and rectifies potential tax risks

ensuring the legality and effectiveness of tax management.Additionally the Company actively applies for recognition as a high-tech enterprise and seeks preferential tax policies to

reasonably reduce tax costs and enhance operational efficiency. Furthermore the Company focuses on the standardized

management of tax records ensuring the completeness and traceability of tax documentation. Through systematic tax

management the Company consistently and effectively controls tax risks providing a solid compliance foundation for it

sustainable development.49 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 50

Business Continuity Management and Plan

In today's complex and ever-changing business environment Business Continuity Plan (BCP) has become an important part Business Ethics

of the Company's operations management. The Company attaches great importance to business continuity management.By establishing a sound business continuity management approach it ensures that key business functions can be quickly Huabao Flavours & Fragrances firmly believes in the principle that sincerity is rewarded in human

restored in the event of emergencies or external shocks thereby guaranteeing continuous services to customers and relations and trust in business. We are committed to conducting responsible business practices

stakeholders. The Company has formulated the Management Procedure for Business Continuity Plan Management according to the highest standards and maintain a zero-tolerance policy towards any form of fraud

Procedures Incident and Emergency Response Management Business Impact Analysis and Risk Assessment Control bribery and unfair competition. The Company has established a comprehensive business ethics system

Procedures and Business Continuity Strategy Management Procedures. It also has detailed emergency plans and conducts and has obtained the ISO 37001 Anti-Bribery Management System certification which clearly stipulates

regular drills and risk assessments to ensure that potential risks are effectively identified and controlled. that all employees their relatives subsidiaries and commercial partners must strictly comply with the

laws and regulations on anti-commercial bribery anti-fraud and anti-unfair competition in their daily

The Business Continuity Management Approach of Huabao Flavours & Fragrances business activities. This ensures that there is no form of improper benefit transfer or misconduct in

the Company's global business operations with the aim of jointly fostering a clean healthy fair and

transparent business environment.Business Impact Analysis Achievement of Anti-bribery Goals in 2024

(BIA) and Risk Assessment Business Continuity

(RA) Strategy and Solutions

Anti-bribery goals Achievements

Operational planning

and control of BCMS The Company strictly adheres to all applicable anti-commercial bribery laws and regulations

(Business Continuity in the locations where it operates maintains a zero-tolerance policy towards corrupt Achieved

Management System) practices and has achieved 0 bribery incidents throughout the year.Drills and tests Business Continuity Huabao Flavours & Fragrances obtained ISO 37001 Anti-Bribery Management System certificationPlans and Procedures

Certificate CN22/00000128

The management system of

Huabao Flavours & Fragrances Co. Ltd.Unified Social Credit Code: 91310000607355000X

Business Registration Address: 1F Building No 6 Second Phase of Industrial Center Area B Lhasa Economic and

Technological Development Zone

Business Operation Address: No. 1299 Yechen Road Jiading District Shanghai P.R. China

has been assessed and certified as meeting the requirements of

By implementing the business continuity plan the Company can effectively reduce the impact of unforeseen events on ISO 37001:2016

For the following activities

The anti bribery management in the process of procurement marketing and support for the production of tobacco flavors food

business operations enhance overall risk resistance and further ensure the Company's sustainable development and flavors and ingredients as well as the supervision and management for the anti bribery management in the production of flavors in Yingtan Huabao Flavours & Fragrances Co. Ltd and Jiangxi H&K Food Technology Development Co. Ltd.market competitiveness.This certificate attests that there is an anti-bribery management system in place in accordance with ISO 37001:2016 specifications.It can in no way be interpreted as guaranteeing that no act of bribery has taken place and/or shall take place within Huabao

Flavours & Fragrances Co. Ltd.’s organisation

This certificate is valid from 07 February 2024 until 19 March 2025 and remains valid subject to satisfactory surveillance audits.Issue 2. Certified since 20 March 2022

Case: BCP Training and System Construction of Jiangxi H&K Authorised by David Xin

Sr. Director - Knowledge

SGS-CSTC Standards Technical Services Co. Ltd.

16F Century YuHui Mansion No. 73 Fucheng Road Beijing P.R. CHINA 100142

t +86 (0)10 58251188 - www.sgsgroup.com.cn

This document is an authentic electronic certificate for Client’ business purposes use only. Printed version of the electronic certificate are permitted and will be considered as a copy.This document is issued by the Company subject to SGS General Conditions of certification services available on Terms and Conditions | SGS. Attention is drawn to the limitation of

liability indemnification and jurisdictional clauses contained therein. This document is copyright protected and any unauthorized alteration forgery or falsification of the content or

appearance of this document is unlawful.In order to meet the standards of international companies Jiangxi H&K has independently completed training related Page 1 of 1

to BCP (Business Continuity Plan) and established a comprehensive set of system documents. These documents

cover core aspects such as business activity identification business impact analysis risk assessment and business

continuity strategy. This initiative ensures the continuous and stable operation of the Company and provides strong

assurance of supply capabilities to overseas customers enhancing their trust and the stability of the Company's

business operations.Note: The Company has acquired the renewed certificate in February 2025.51 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 52

Anti-Commercial Bribery and Anti-Fraud Five Working Principles of Anti-Fraud and Anti-Bribery Working Group

The Company attaches great importance to anti-fraud and anti-bribery control in all business management activities

and has formulated management systems such as the Anti-Bribery Management Manual Anti-Fraud and Anti-Bribery

Management Measures Working Rules for Anti-Fraud and Anti-Bribery Working Group Gift Acceptance and Donation Establish a comprehensive anti-fraud and anti-bribery management framework

Rules and Prohibition of Private Agreement Rules. It has also established Anti-Fraud and Anti-Bribery Leadership Group Comprehen- with dedicated personnel ensuring full coverage of all regulatory and investigative

and Anti-Fraud and Anti-Bribery Working Group led by the Board of Directors which are responsible for supervising and siveness stages aligned with business operations workflows and departmental

implementing anti-fraud and anti-bribery policies and promptly investigating and handling any suspected commercial bribery Principle responsibilities.activities.The Anti-Commercial Bribery and Anti-Fraud Management System Structure of Huabao Flavours & Fragrances

Clearly define and allocate authority and accountability for anti-fraud and anti-

Responsible for overseeing the creation of an anti-fraud and anti-bribery cultural Proportional bribery oversight across the Board of Directors Leadership Group Working Group

environment across the Company by the Anti-Fraud and Anti-Bribery Leadership Responsibility departments subsidiaries employees and external teams ensuring all parties

Group establishing a robust internal control system to prevent fraud and bribery Principle bear responsibility for misconduct within their purview.Board of and continuously monitoring the Company's anti-fraud and anti-bribery efforts.Directors

Anti-Fraud and Responsible for building and maintaining the internal control system for anti-

Anti-Bribery fraud and anti-bribery ensuring sustained resource allocation and providing

Leadership Group necessary guidance and support to ensure its effective operation.During anti-fraud and anti-bribery regulatory investigations members of the

Leadership Group and Working Group must strictly base their actions on factual

Anti-Fraud and Anti-Bribery Responsible for executing daily anti-fraud and anti-bribery tasks at the Independent evidence conduct independent investigations and form decisions accordingly. The

Working Group of the Company Company and subsidiary levels. Judgment Working Group operates independently reporting directly to the Leadership Group

Principle and Board of Directors. Functional departments are prohibited from intervening

in regulatory investigations or offering opinions unless explicitly requested by the

Functional Departments and Subsidiaries Responsible for implementing specific anti-fraud and anti-bribery Working Group to assist in such efforts.of the Company tasks within their own departments/subsidiaries.During anti-fraud and anti-bribery regulatory investigations the Working Group

must strictly maintain confidentiality regarding whistleblower identities investigation

Confidentiality plans progress updates and case details. All case-related documents and

Principle materials must be properly secured. Disclosure of such information to unauthorized

personnel is prohibited and non-investigative personnel are barred from inquiring

about these matters.During anti-fraud and anti-bribery investigations any investigators assisting

Sensitive personnel or department heads with familial ties close friendships shared

Relationship business investments or other relationships to the subject under investigation

Recusal that could compromise impartiality must immediately submit a written report to the

Principle regulatory authority and voluntarily recuse themselves upon the Working Group's

designation of an investigation/response team.The Company clearly defines the boundaries of employee conduct requiring all employees not to accept offer or participate

in any form of bribery kickbacks illegal transactions or other improper exchanges of benefits. Additionally the Company

comprehensively regulates the behavior of commercial partners ensuring that all business dealings and cooperative

relationships adhere to principles of fairness and transparency avoiding any actions that could lead to conflicts of interest or

affect the impartiality of decision-making.53 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 54

Basic Control Requirements for Anti-Fraud and Anti-Bribery of Huabao Flavours & Fragrances Signing Status of the Integrity Commitment Letter and Anti-Bribery Commitment Letter

Basic Requirements for Employee Basic Requirements for Commercial Indicator Unit 2022 2023 2024

Management Partner Management

Number of employees who signed

integrity commitment letters NA 799 844 887

1. New employees must sign an Integrity and 1. The relevant department must conduct Percentage of employees who signed

Self-Discipline Commitment alongside their background checks on commercial partners integrity commitment letters1 % 65 70 72

employment contract. based on business type and collaboration scope.Number of suppliers who signed integrity NA 514 540 558

2. Employees are strictly prohibited from 2. Relevant company departments must conduct agreements

engaging in any acts defined as "fraud" or compliance evaluations of commercial partners Percentage of suppliers who signed

"bribery" under the Company's Anti-Fraud and both before establishing cooperative relationships integrity agreements % 92 92 92

Anti-Bribery Policies. and throughout the duration of such partnerships

with the evaluation results serving as a critical

3. Senior executives department heads or Additionally the Company has established the Anti-Fraud Anti-Bribery and Reporting Management System. All employees basis for determining commercial partner

other personnel designated by the Leadership and commercial partners are encouraged to report any known instances of fraud bribery or any improper conduct and qualification status.Group must undergo a special exit audit upon suspicious activities related to the Company's operations through the following channels. At the same time the Company

resignation. 3. Commercial contracts with clients suppliers explicitly states in the system that the identity and personal information of the reporter will be kept strictly confidential and

service providers or contractors must include we absolutely do not tolerate any form of retaliation against the reporter or against those who refuse to participate in actions

4. The Company shall conduct background explicit integrity clauses or be supplemented by that violate this system. Within its authority the Company ensures that the reporter and the investigators will not suffer

checks on candidates for senior executive roles standalone integrity agreements. retaliation or any form of discrimination opposition or other adverse effects due to their reporting actions.department heads or other personnel designated

by the leadership team prior to appointment. 4. The Working Group must establish a dynamic

monitoring mechanism for commercial partners

5. Employees must undergo regular integrity to streamline selection and retention.

performance evaluations within their departments.For department heads and leadership incidents 5. For commercial partners with unique

of fraud or bribery within their teams or involving circumstances or requirements the Company's

external commercial partners will directly impact anti-fraud and anti-bribery commitments must be

their evaluation scores. included as mandatory attachments to bids or

contracts.

1 Upon evaluation the risk level for production line workers is deemed to be

relatively low and as such coverage has not yet been extended to them.55 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 56

Reporting Channels Business Ethics Risk Audit

In order to further enhance the compliance and risk resistance of the Company in its business operations the Company

conducts business ethics risk audits regularly or irregularly to comprehensively assess the adequacy and effectiveness

of the Company's anti-bribery management system. The audit team conducts in-depth reviews of procurement sales

partnerships financial operations and other aspects to identify potential violations and management loopholes. Once

Report directly to members of the Report to immediate supervisors. If the potential problems are discovered the audit team will immediately communicate with relevant departments to jointly analyze

Company's Anti-Fraud and Anti-Bribery misconduct involves the immediate the causes and formulate corrective measures.Leadership Group or Working Group. supervisor bypass them and escalate

to higher-level personnel.Review Report of Anti-Bribery Compliance Function (2024)

Report Email:

Report Hotline: jubao@hbflavor.com

021-67083261

2024年度反贿赂合规职能评审报告

Report Website: Huabao Flavours & Fragrances Mailing Address: Anti-Fraud and Anti-Bribery Working

website - Integrity Huabao - I want to report Group Huabao Flavours & Fragrances Co. Ltd. 1299

(http://180.166.253.249:8006/report.aspx) Yecheng Road Jiading District Shanghai

Business Ethics Training

The Company advocates always upholding high standards of ethical conduct in decision-making and actions encouraging

employees to make correct judgments when facing complex situations. To this end the Company regularly conducts

specialized business ethics training to foster a deep understanding among employees at all levels of professionalism

transparency integrity and fairness. This aims to establish good professional ethics and behavioral norms of integrity self-

discipline diligence and dedication.57 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Governance Foundation: Empowering Long-term Enterprise Development 58

Business Ethics Training Performance

Case: Conducting Annual Training for Commercial Partners to Jointly Build a Clean

Business Environment

Indicator Unit 2024

Number of anti-commercial bribery and anti-fraud training sessions conducted Times 2 In January 2024 Huabao Flavours & Fragrances conducted annual offline training for its commercial partners covering

the topics of anti-fraud and anti-bribery publicizing the concepts and forms of fraud and bribery as well as the

Total number of directors covered by anti-commercial bribery and anti-fraud training NA 9 management system for anti-fraud and anti-bribery. Through this training the Company not only successfully conveyed

to its commercial partners its firm determination and confidence in combating corruption and building a united front

Percentage of directors covered by anti-commercial bribery and anti-fraud training % 100% against it but also fostered a closer and more solid cooperative relationship between both parties based on integrity.Total number of management personnel covered by anti-commercial bribery and anti-fraud training NA 30

Percentage of management personnel covered by anti-commercial bribery and anti-fraud training % 100% Anti-Unfair Competition

Total number of employees covered by anti-commercial bribery and anti-fraud training NA 1225 The Company strictly abides by the Anti-Unfair Competition Law the Anti-Monopoly Law and other relevant laws and

regulations resolutely opposes all acts of unfair competition and does not adopt unfair means such as false propaganda

Percentage of employees covered by anti-commercial bribery and anti-fraud training % 100% commercial bribery and infringement of commercial secrets to gain competitive advantages. The company has established

the Antitrust Compliance Management Measures to define compliance requirements for business operations and employee

responsibilities. It conducts compliance reviews on transaction agreements market behavior and competition strategies

to ensure regulatory adherence and effectively mitigate antitrust compliance risks. At the same time before engaging in

cooperation with all commercial partners the Company signs the Integrity Agreement and the Integrity Commitment Letter

with them which clearly stipulate that the business cooperation process must comply with the provisions of the Anti-Unfair

Case: Conducting Special Training to Improve Employees' Anti-Fraud and Anti- Competition Law jointly maintaining a fair just and transparent market competition environment.Bribery Awareness

Key performance

In September 2024 Huabao Flavours & Fragrances organized its annual specialized training on anti-fraud and

anti-bribery. The training was delivered through a combination of offline and online sessions to all employees at

the company’s headquarters. It provided an overview of the theories of fraud and bribery presented typical cases In 2024 the Company had not been involved in litigation/administrative penaltiesf or anti-unfair competition.reviewed relevant laws and regulations and introduced Huabao Flavours & Fragrances’ anti-fraud and anti-bribery

management system and practices. This initiative aimed to enhance employees' ability to identify and prevent

fraudulent and bribery behaviors ensuring the compliance and transparency of the company’s operations while

safeguarding its reputation and long-term development.

2024 Anti-Fraud and Anti-Bribery Training

Additionally the Company regularly conducts anti-commercial bribery and anti-fraud training for commercial partners.Through these training sessions commercial partners gain a thorough understanding of the Company's specific policies and

requirements regarding anti-fraud. This also effectively strengthens their ability to identify and prevent business ethics risks

ensuring compliance and legality in the process of cooperation between both parties.59 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Collaborative Win-Win: Building an Excellent Quality Production Line 6061 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Collaborative Win-Win: Building an Excellent Quality Production Line 62

Quality Assurance Quality Risk Control

The Company has established a well-designed Product Quality Traceability Management Procedures to maintain detailed

records of the entire production process including the receipt of raw and auxiliary materials workshop production finished

Huabao Flavours & Fragrances has always adhered to the quality policy of "Quality First Pursuing Excellence" rigorously product warehousing and final delivery ensuring full traceability and transparency.implementing the requirements of GB/T 19001-2016 and ISO 9001: 2015 quality management systems. The Company has

formulated Quality Manual Internal Quality System Audit Procedures Product Quality Traceability Management Procedures Product Quality Traceability Management Process

Non-conforming Output Control Procedures and other systems. These measures enable full-process monitoring

from technology development to product realization and quality testing ensuring that product quality meets customer

requirements on a consistent basis.Selected Quality Management

System Certification Certificates of Huabao Flavours & Fragrances Jiangxi Yifang Jiangxi H&K Purchasing Warehouse Production Quality Control Related Department Workshop Department Identifications

Certificate CN19/20345

The management system of

Jiangxi H&K Food Technology

Development Co. Ltd.Unified Social Credit Code: 91360600MA35KB4NXU

Business Registration Address: No. 6 Leye Road Longgang Industrial Park High-tech

Industrial Development Zone Yingtan City Jiangxi Province P.R. China

Business Operation Address: No. 6 Leye Road Longgang Industrial Park High-tech Industrial

Development Zone Yingtan City Jiangxi Province P.R. China

has been assessed and certified as meeting the requirements of

ISO 9001:2015

For the following activities

Manufacture of food flavors include liquid flavors emulsion flavors paste flavors and powder flavors

(blended and encapsulated)

Manufacture of solid seasoning including spice powder compound seasoning powder and semi-solid

compound seasoning sauce

Purchase Order Incoming Material Division of Areas

This certificate is valid from 03 March 2025 until 02 March 2028 and remains valid subject to satisfactory surveillance Placement

audits.Issue 4. Certified since 03 March 2019

Authorised by

Liz Moran

Business Manager

SGS United Kingdom Ltd

Rossmore Business Park Ellesmere Port Cheshire CH65 3EN UK

t +44 (0)151 350-6666 - www.sgs.com

The certification information can be verified on the web site of Certification and Accreditation Administration of the People’s Republic of

China www.cnca.gov.cn

Incoming Material Certificate of

This document is an authentic electronic certificate for Client’ business purposes use only. Printed version of the electronic certificate are permitted and will be considered as a copy. This

document is issued by the Company subject to SGS General Conditions of certification services available on Terms and Conditions | SGS. Attention is drawn to the limitation of liability

indemnification and jurisdictional clauses contained therein. This document is copyright protected and any unauthorized alteration forgery or falsification of the content or appearance of

this document is unlawful.Page 1 of 1 Inspection Issuance Conformity Non-

of Inspection Conformance

Identifications Certificate

Concession

In addition to Huabao Flavours & Fragrances Huabao Flavours & Fragrances Shanghai Xiamen Amber Jiangxi H&K Acceptance

Shanghai Yifang Yunnan Tianhong Guangzhou Huafang Guangzhou Owada and Yingtan Huabao have all obtained ISO

9001: 2015 quality management system certification.

To implement quality management effectively the Company has established a flexible and hierarchical quality management

structure. Under this overarching framework each subsidiary or branch independently develops and refines its own

quality management system based on its business characteristics and operational needs. Each subsidiary or branch has Picking Production Production

a dedicated quality management department or role responsible for formulating quality policies and objectives that are Status

appropriate for its actual situation ensuring the establishment implementation and continuous improvement of processes Identification

required by the quality management system. This approach comprehensively improves the Company's overall quality

management level.Indicator Unit 2022 2023 2024

Warehousing and Production Sampling Shipping Label

Product Qualification Rate % 100 100 100 Placement Status Inspection Issuance Barcode Label

Identification of Inspection Non-Conformance

Product Recall Rate % 0 0 0 Identifications Identification

Key performance Traceability Traceability Traceability Traceability The relevant

Implementation Implementation Implementation Implementation departments of

In 2024 the Company had no major safety or quality incidents related to its products or services. the Company can

implement traceability63 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Collaborative Win-Win: Building an Excellent Quality Production Line 64

Furthermore during the production process strict treatment procedures are adopted for any nonconforming products Lean Production

including finished products re-inspected products or outgoing products that fail to meet the Company's inspection

standards. Through this series of management and control processes the Company not only effectively prevents and

reduces potential quality risks but also ensures product consistency and compliance thereby significantly increasing

customer trust and satisfaction. Lean management is an important means for the Company to enhance efficiency stimulate vitality and build core

competitiveness. Across the organization the Company actively implements the lean production management concept

continuously improves its lean production management system raises management levels and ensures the orderly

Category II Nonconforming Products (Finished Products Outgoing Products implementation of lean production work. The Company continues to encourage employees to participate in continuous

or Re-Inspected Products Failing Internal Inspection Standards) Treatment Process improvement activities put forward improvement project proposals and use innovative thinking and scientific methods to

eliminate waste improve resource utilization efficiency and jointly drive the transformation of production methods toward

greater efficiency and sustainability. This approach not only increases productivity but also improves the Company's

competitiveness.Responsible for filling out the Nonconforming Propose the process treatment solution. If necessary the

Product Treatment Opinion Form and reviewed R&D personnel shall be notified to propose a technical Lean Production Initiatives at Jiangxi H&K

by dedicated personnel. treatment solution or confirm that no technical treatment

is feasible. For temporary formula modifications relevant

personnel shall issue an Interim Flavor Benchmark

Formula. All treatment solutions or opinions shall be

reviewed by the respective department manager. Organization and

Responsibility Establish a lean production organization and management body clarify

Implementation the division of labor and implement responsibilities

Keep the original Nonconforming The General Manager or authorized If commercial considerations are

Product Treatment Opinion Form personnel shall review the above required the related department

and the dedicated personnel treatment opinions and approve the provides treatment opinions. Optimize working time and process management

coordinates the subsequent Production Rework Concession Production

treatment. Release or Hold/Quarantine. Optimize production process nodes and reduce waiting timeEfficiency

Improvement Reduce the man-hours per batch of production

Increase the number of production batches

For Production Rework the For Concession Release the relevant For Hold/Quarantine the relevant

production unit reworks the product department annotates "Concession department issues a nonconforming

according to the approved process Release" on the relevant inspection inspection result and sends Analyze sales performance and formulate inventory preparation plans

treatment solution or technical records issues the inspection result of a copy of the Nonconforming Inventory Make reasonable production plans

treatment solution and reports it Concession Release and sends a copy Product Treatment Opinion Form Management and

for standard inspection. If qualified of the Nonconforming Product Treatment to warehouse or segregated Production Planning Improve inventory turnover and revitalize Hold/Quarantine raw materials

it is classified as conforming. Opinion Form to the production workshop storage. The warehouse initiates Avoid inventory waste

If unqualified it re-enters the or the warehouse. the scrap approval procedure at an

nonconforming product control appropriate time.procedures.Intermediate and semi-finished product storage solution

Lean Proposal Replace the product storage barrel material to extend the service life

Furthermore to ensure that products with corporate logos can enter the investigation procedure as effectively quickly and Improvement and improve stability

completely as possible when recalled from the market at any time the Company has developed the Notification and Recall Improve product quality and save production costs

Control Procedures. It analyzes the collected information on nonconforming products using the Nonconforming Product

Control Procedures assesses the extent of potential public health risks and determines the scope and depth of recalls.In the event of a voluntary or involuntary product withdrawal or recall the Company promptly communicates all relevant

information to affected customers. Promote lean production concepts and enhance employee awareness

Use visual display boards in workshops canteens offices and other

Visual Management places

Enhance employees' initiative and self-motivation in lean management

participation65 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Collaborative Win-Win: Building an Excellent Quality Production Line 66

Visual Display Board for Lean Production at Jiangxi H&K Customer Service

Since its establishment Huabao Flavours & Fragrances has always adhered to the consumer service concept of customer

first. To deliver high-quality services and safeguard customer interests the Company has formulated management systems

and procedures including the After-Sales Management System Customer Communication Control Procedure Customer

Satisfaction Evaluation Procedure Corrective and Preventive Measures Procedure and Risk and Opportunity Response

Control Procedure. These protocols apply to both the Company and its subsidiaries systematically strengthening customer

service management across all operations.The Company clearly defines the responsibilities of its Technical Center Marketing Center and Operations Service Center.The Operations Service Center is responsible for assessing customer satisfaction and handling customer complaints.Non-product-related complaints are investigated and verified by relevant departments while product-related complaints

are handled by customer service through information gathering and collaboration with the Quality Control Department

and Technical Center. This operational framework enables the Company to provide premium customized products while

maintaining service excellence through rapid coordinated responses to diverse customer needs for its products.Customer First Professional and Listening to Needs and Continuous

Highly Efficient Innovative Experience Improvement

Case: Yingtan Huabao Launched Lean Management

Always put the customer Our team has extensive Deeply understand We use customer

first and commit to professional knowledge consumers' needs feedback to drive service

understanding and and skills and they can and desires and then improvements. We are

In April 2024 Yingtan Huabao held a lean production management kick-off meeting marking the full launch of meeting their needs quickly and accurately use innovative service constantly improving our

its lean management initiative. This effort aims to enhance production efficiency reduce costs and solidify core in order to provide an solve consumers' thinking to provide them service level by collecting

competitiveness. By forming a lean management working group and signing the Lean Management Commitment exceptional service problems and needs to with a unique service and analyzing feedback

Letter the Company engages all employees in driving the implementation of the lean production concept. This experience. ensure efficient service. experience that meets and optimizing our

initiative will optimize production processes eliminate waste and raise management levels which helps Yingtan their increasingly diverse services on an ongoing

Huabao better respond to market demands improve product quality support Huabao Flavours & Fragrances' needs. basis.internationalization strategy and strengthen the Company's long-term competitive advantage.Yingtan Huabao Lean Production Management Kickoff Meeting67 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Collaborative Win-Win: Building an Excellent Quality Production Line 68

After-sales Service System Certification Certificate

Key performance

In 2024 customer satisfaction was 95.87%.Product Availability

By proactively providing product upgrades and innovative solutions to its rapidly developing customers Huabao Flavours &

Fragrances has achieved tangible results from its diversified market segmentation strategy. The diversified development of

flavors and categories such as catering channels functional beverages and snacks has driven the demand growth for food

flavorings and ingredient solutions. Through this process the Company continuously accumulates and enhances the core

competitiveness of its business areas providing customers with one-stop innovative products and services. This strategic

shift from "product designer and manufacturer" to "solution provider" allows the Company to seize the initiative in competition

and development and lead the new direction of the industry's development.In terms of the product recall procedure to ensure that products with corporate logos can enter the investigation

procedure as effectively quickly and completely as possible when recalled from the market at any time the Company Based on market demand the Company deeply explores emerging trends technologies and sectors in the development of

has developed the Notification and Recall Control Procedures to clarify the division of responsibilities of each department. the domestic and foreign flavor industry. It is constantly optimizing its product portfolio to accelerate upgrades to customers'

Product identification allows the Company to trace the product's production date or batch number. At the same time it has existing products thereby increasing their market penetration rates. At the same time the Company capitalizes on the

established a product identification system for all packaging and analyzes the collected information on nonconforming opportunity of consumption transformation by leveraging consumer insights to identify new market opportunities for clients.products using the Nonconforming Product Control Procedures assesses the extent of potential public health risks and Through integrated solutions the Company expands into new product and business markets. By continuing to improve its

determines the scope and depth of recalls. In the event of a voluntary or involuntary product withdrawal or recall the core product structure and diversify product lines the Company meets the diverse needs of its customers consolidates its

Company promptly communicates all relevant information to affected customers. industry leadership position and increases its core competitiveness.The Company always prioritizes customer satisfaction and product quality attaches importance to product quality and

safety control ensures that the products produced meet the relevant national and industry standards verifies handles and

resolves any customer complaints as soon as possible and is committed to providing customers with high-quality products

and excellent after-sales service.Huabao Flavours & Fragrances Customer Handling Procedures for Customer Complaints Related to

Nonconforming Products

A customer complains The customer service The related department If the product is conforming

that a product provided staff records the customer leads in the investigation the customer service staff will

by the Company is name complainant time testing and verification coordinate and communicate

nonconforming complaint content and in accordance with the with the customer. If the product

so on in the Customer Customer Complaint is nonconforming the General

Complaint Handling Form Handling Form and then Manager or authorized person will

releases the investigation issue instructions and arrange for

process and conclusions business staff to handle it while

including it in the nonconforming

product handling procedure.Green

Nutritious and

Healthy69 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Collaborative Win-Win: Building an Excellent Quality Production Line 70

Supply Chain Management Supplier Evaluation

Huabao Flavours & Fragrances has established a supervision and evaluation mechanism to regularly evaluate the

Huabao Flavours & Fragrances regards supply chain management as an important cornerstone of sustainable development. performance and compliance of suppliers. This helps identify and resolve potential issues promptly ensuring suppliers

It builds a transparent efficient and responsible supply chain system through rigorous access evaluation and exit consistently deliver high-quality products and services. The Company encourages suppliers to continuously improve their

mechanisms. The Company evaluates suppliers based not only on product quality and cost but also on environmental service levels through an incentive mechanism that involves granting priority purchasing rights.compliance occupational health and safety labor human rights protection and other factors. This approach encourages

both upstream and downstream supply chain participants to practice the concept of sustainable development collaboratively. Huabao Flavours & Fragrances Supplier Evaluation Requirements

At the same time the Company strengthened the transparent procurement mechanism by requiring procurement personnel

to sign the Employee Integrity and Self-Discipline Commitment Letter and sign the Integrity Agreement with suppliers

ensuring the fairness and transparency of the procurement process. Through systematic and standardized supply chain Supplier Supplier Annual Evaluation Requirements

management Huabao Flavours & Fragrances leads the industry towards a higher standard of responsible supply chains

and contributes to the creation of a sustainable industrial ecology. Category A Suppliers Every year the Company's procurement department must conduct a written evaluation.Huabao Flavours & Fragrances Procurement Workflow Every two years Huabao Flavours & Fragrances and its subsidiaries' procurement

Category B Suppliers departments must conduct a written evaluation. If the materials supplied pose

significant environmental social or quality risks an on-site evaluation is required.Excellent suppliers with evaluation results ≥85 will be given priority in procurement and unqualified suppliers with

evaluation results <70 will have their supplier qualifications revoked by Huabao Flavours & Fragrances and its

subsidiaries' procurement departments after approval.Supplier Exit

Huabao Flavours & Fragrances strictly controls the supplier exit process. Suppliers who fail to meet evaluation standards

even after rectification disrupt normal material supply or experience major quality or safety incidents will have their qualified

supplier qualifications revoked. When the qualification is revoked after approval Huabao Flavours & Fragrances and its

subsidiaries' procurement departments will immediately remove the supplier from the Qualified Supplier Directory and either

select a backup supplier or develop a new supplier.Supplier Access Transparent Procurement

The Company selects suppliers through inquiry competitive negotiation bidding or single-source procurement. In principle

qualified suppliers and procurement prices are determined by comparing at least three suppliers based on material cost Under the leadership of the Company's anti-fraud leadership group all relevant personnel responsible for procurement

analysis. The Procurement Department is responsible for screening potential suppliers and identifying candidate suppliers across the Company's departments and subsidiaries are required to sign the Employee Integrity and Self-discipline

through evaluating samples and conducting on-site assessments (applicable to certain raw materials). The final approval Commitment Letter and suppliers are required to sign the Integrity Agreement. This is done to improve internal control in the

strictly adheres to established protocols and a supplier directory is maintained. To guarantee supply chain stability the procurement process prevent fraudulent activities and ultimately create a long-term robust and sustainable supply chain

Company initiates a backup supplier development process when existing suppliers are unable to supply goods thus ecosystem.ensuring supply chain continuity and reliability.The Company imposes strict requirements on supplier admission and evaluation reviewing their qualifications such as

environmental management system certification examining their compliance with environmental regulations environmental Key performance

monitoring compliance records of environmental administrative penalties integrity and probity records financial stability

and tax compliance as well as screening for negative risks such as money laundering and monopoly to ensure no major By 2024 of suppliers signed the Integrity Agreement.illegal records within the past three years. 92%

Meanwhile the Company's commercial contracts must be accompanied by the Employee Integrity and Self-Discipline

Commitment Letter and the Integrity Agreement and suppliers are required to sign the Environmental Occupational Health

Safety and Labor Human Rights Commitment Letter fulfilling their responsibilities in environmental protection occupational Equal Treatment of SMEs

health and safety as well as labor and human rights. Suppliers must employ workers legally eliminating child labor forced

labor and discrimination safeguarding rights such as compensation benefits and vacations maintaining employee physical

and mental health and occupational safety and respecting internationally recognized human rights standards. Additionally The Company adheres to the principles of fairness and impartiality treating all partners including small and medium-sized

suppliers must comply with the company's relevant rules and regulations and accept irregular supervisory inspections. enterprises (SMEs) equally. It strictly complies with legal and regulatory requirements to ensure the compliance of supply

chain cooperation. During the reporting period the Company did not encounter any instances of overdue payments to

SMEs.Procurement Demand Identification

Supplier Qualification Review

Sample Request and Evaluation

Supplier Selection and Price

Negotiation

Budget Preparation

Contract Signing and Order

Placement

Order Tracking

Assisting Quality Control and Warehouse

in Completing Inventory Receipt

Invoice Verification and Payment

Submission

Procurement File Archiving71 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 7273 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 74

Environmental Management Goals and Progress

Environmental Management Environmental management objectives Indicator Accomplishment

In strict compliance with environmental protection laws regulations and system requirements Huabao Complete waste sorting and treatment 100% recycling of hazardous waste

Flavours & Fragrances has established a complete environmental management system and compiled

the environmental chapter in the Environmental and Occupational Health and Safety Management Fire preventing The number of fires is 0

Manual as well as internal rules and regulations such as the Eight Provisions on Environmental

Protection providing solid institutional support for the environmental management of the Company The average annual consumption of water

Energy resource consumption reduction electricity and fuel per unit of output not

and its subsidiaries. On this basis the Company has established a full-time safety and environmental Accomplishedexceeding the consumption in the previous year

management organization fully responsible for core tasks such as safety environmental protection and

Up-to-standard discharge of sewage from Sewage from wastewater treatment plant meets

fire management to ensure the effective operation of the environmental management system. During the wastewater treatment plant standard requirements after treatment

reporting period the Company did not incur any significant administrative penalties or criminal liabilities

from environmental events imposed by relevant environmental authorities. Up-to-standard emission of boiler exhaust Boiler exhaust meets the emission standards for Class II areas in Period II of GB 13271

For the purpose of further improving the level of environmental management the Company has

successfully passed the energy management system environment and occupational health

management system and other certifications and obtained corresponding certificates. As of the end of Environmental Risk Assessment and Emergency Plan

the reporting period Huabao Flavours & Fragrances Shanghai Branch Yingtan Huabao Guangzhou

Huafang Yunnan Tianhong and Guangzhou Owada have passed the ISO 14001 environmental

management system certification and formulated a series of control procedures in accordance with the The Company systematically analyzed the geographical location and surrounding environment of each factory area carried

system requirements. Through identification prevention correction monitoring and other methods they out environmental risk identification and assessment and formulated risk prevention measures for identified risk factors

have reduced the impact of operations on the environment in a comprehensive and multi-dimensional such as fire and explosion accidental emissions of waste gas and accidental emissions of wastewater. The Company has

manner and put the concept of sustainable development into practice with practical actions. prepared emergency plans for various natural disasters and emergencies and established a complete accident emergency

system covering the clarification of the responsibilities of department heads emergency material management rescue team

formation scenario analysis of various possible sudden environmental events employee training regular safety inspections

and the establishment an emergency rescue system of "activating plans organizing evacuations treating the wounded

maintaining contact and arranging life" so as to effectively reduce hazards and ensure the Company's production and

operation.Selected ISO 14001 Environmental Management System Certifications:

Huabao Flavours & Fragrances Shanghai Branch and Yingtan Huabao75 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 76

Jiangxi Yifang's Emergency Environmental Risk Ass essment and Response

Case: Guangzhou Huafang Organized Annual Fire Drill

Accident type Scenario analysis Risk prevention and control and emergency resources

Improper collection of waste gas Risk prevention and control: In November 2024 Guangzhou Huafang a subsidiary of Huabao Flavours & Fragrances conducted a fire

generated during the production process directly sent to the wastewater emergency drill. At the beginning of the drill all drill working groups quickly arrived at their locations and in the

causes waste gas concentration in the conditioning tank through the workshop stairwells and emergency exits the evacuation command team in the shortest possible time used

Production workshop to reach the limit causing harm ditch. commands and gestures to direct employee to evacuate in an orderly manner along designated routes. After

equipment area to personnel health;Leakage fire Emergency resources: fire gathering all employee carefully learned the classification and use of fire extinguishers fire-fighting precautions

and explosion Fire or explosion caused by lightning hydrants and fire extinguishers and analysis and explanation of recent fire cases and conducted practical fire-fighting drills. The emergency plan

accidents static electricity collision man-made fire installed inside and outside drill achieved the expected goals the emergency plan was reasonable and effective and any non-standard aspects

source or production operation error; the workshop; All employee were corrected on site in a timely manner.are equipped with personal

Chemical Due to the leakage of liquid materials protective equipment;

warehouse ethanol spontaneously combusted resulting in a fire accident;

When a fire occurs the fire tail water Risk prevention and control: the

flows into the rainwater pipe network. If Emergency Management Office

Rainwater the rainwater pipe is not blocked in time regularly inspects emergency

pipes are not the fire tail water will flow into the nearby supplies;

blocked in time river through the rainwater pipe network

polluting the water body and endangering

aquatic organisms and plants;

When the exhaust gas purification and Stop operation and conduct

Environmental recovery device fails the exhaust gas repairs in time;

risk prevention Failure of generated during the production process

and control exhaust gas cannot be collected and treated but

measures collection escapes into the workshop causing

fail or are not facilities the concentration in the workshop to

operating exceed the limit causing physical harm to

normally personnel;

When the sewage station's various tanks Stop operation stop draining

Failure of and storage boxes are damaged and leak and perform repairs in time;

sewage sewage may flow into the rainwater pipe

treatment and network through the roadside rainwater

discharge collection wells. If not properly handled

Fire Extinguisher Practice Drill

measures when it rains it will flow out of the factory boundary together with the rainwater and

pollute the surrounding water bodies;

There was a sudden rainstorm and All materials are stored indoors

the rainfall lasted for a long time. The and rainwater pipes are

employees failed to report the situation installed in the factory area.in the factory to the Emergency Rescue

Various natural Command in a timely manner as they

disasters did not foresee the change in the

extreme Take rainstorm situation. Water accumulated in the

weather or weather as an factory and the water level reached a

adverse example certain height in the workshop. The flood

meteorological destroyed the material yard or production

conditions facilities which may cause material

leakage. The leaked materials were

discharged into nearby water bodies with

rainwater polluting the environment and

endangering aquatic life.77 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 78

Contributing to Biodiversity Conservation

The Company actively promotes biodiversity conservation and has always been committed to protecting the green ecology. Climate Response

To protect the biodiversity where the Company is located it has adopted a series of policies and actions to regularly organize

employees to participate in various ecological protection volunteer activities by using efficient purification equipment and

innovative processes with the focus on the conservation and restoration of surrounding natural habitats so that every As the common and only habitat for mankind the Earth is facing multiple interrelated crises such

employee is a practitioner of protecting biodiversity. as climate change environmental pollution and loss of biodiversity. Huabao Flavours & Fragrances

deeply recognizes the urgency of the climate crisis and the necessity of participating in global climate

governance. While considering the risks brought by climate change it also considers the opportunities

that responding to climate change will bring to its development. Referring to the International Financial

Case: Securing Production Materials and Promoting Biodiversity Reporting Sustainability Disclosure Standard No. 2 - Climate-related Disclosures the Self-Regulatory

Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange - Sustainability Report

(For Trial Implementation) and other cutting-edge domestic and international standards on climate

information disclosure the Company monitors its business environment operating conditions and the

To further contribute to the diversity of species and ecosystems the Company grows a rich variety of fruit and implementation of risk response measures in a bid to identify various risks and provide early warnings

vegetable ingredients such as lemons mulberries grapefruits blueberries and oranges in Ji'an Jiangxi province. thereby enhancing its own climate resilience.After several years of careful cultivation the bumper harvest of the base-grown fruits provides raw material support

for the Company's production and processing laying a solid foundation for subsequent production and processing

links. While the Company's own forest land helps ensure product quality it is also of great significance to promote

biodiversity help promote the stability and anti-interference ability of the forest ecosystem and provide rich food

resources for insects birds and other animals in the forest contributing to the vigorous development of biodiversity.Climate Governance Framework

Actively responding to the country's "dual carbon" strategic goals the Company formally established the ESG climate

project working group in 2024 and fully launched the ESG climate risk management project to systematically enhance its

responsibility for environmental protection and climate governance. The working group is responsible for formulating annual

climate risk management action plans and implementation plans coordinating the collection of climate-related information

and data analysis conducting in-depth assessments of the potential impacts of climate risks and identifying climate-

related opportunities. The working group also regularly prepares climate risk project progress reports organizes internal

training and continuously improves the climate risk awareness and management capabilities of all employees providing

strong support for the Company to build a sound climate governance system. During the reporting period the Company has

completed the identification of climate risks and opportunities and formulated targeted response strategies.Climate Response Strategies

To further analyze the impact of climate-related risks and opportunities on each link in the Company value chain and

implement corresponding measures to reduce the impact on business operations the Company qualitatively assesses

climate impacts and develops climate response strategies. It adopts climate change mitigation measures such as reducing

carbon emissions and improving energy efficiency and also conducts continuous monitoring of the climate change and

socio-economic development to make the related management measures better.79 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 80

Identification and Response to Climate Risks Identification and Response to Climate Opportunities

Risk category Risk description Impact Countermeasures Opportunity cycle2 category Opportunity description

Impact

cycle3 Countermeasures

·In response to foreseeable acute climate risks

such as extreme heat and extreme precipitation The global market demand for low-carbon food Deepen the research and

regularly inspect and reinforce related facilities to ingredients continues to grow consumers' development of enzymatic

Extreme weather such as ensure that rain protection measures are in place awareness of health and environmental protection hydrolysis technology explore

precipitation high temperatures and use meteorological monitoring platforms to Driving market growth has significantly improved and low-carbon products Short- and the application of synthetic

and typhoons are more frequent Short- adjust production plans in a timely manner for green and healthy such as natural flavor bases have clear market biotechnology promote the

Acute risks and more intense affecting medium- and ·Reasonably arrange employees' work during products prospects. The Company has made deployments for

medium-term production of environmentally

the stability of the Company's long-term high temperature periods and provide necessary the enzymatic hydrolysis technology and sought to friendly fragrance-based products

operations and supply chain and heatstroke prevention and cooling facilities and research and develop synthetic biology to provide and accelerate the industrialization

causing fixed asset losses materials technical support for the green upgrade of products layout of green products

·Develop emergency response plans for extreme Stricter international environmental protection policies Transform high-energy-consuming

Physical risks weather events such as extreme precipitation have driven innovation in production processes. production links improve energy

and explore flexible operation and delivery models Developing clean Green processes reduce export compliance risks Short- and efficiency management promote

The increase in high temperature production and green and enhance international customer appeal. The medium-term the application of green and low-

hours and water pressure has led ·Adhere to water and energy conservation in technology practices of our subsidiaries have verified their carbon technologies and create a

to an increase in the Company's operations to improve the Company's resilience to commercial value and the appeal of green technology benchmark for clean production in

energy resource consumption chronic climate risks to international customers the fragrance industryShort-

Chronic risks and equipment maintenance costs; abnormal global climate medium- and ·Strengthen employees' awareness of climate

and abnormal fluctuations in long-term risks improve their emergency response Leading food and beverage companies give priority Strengthen ESG information

natural raw material procurement capabilities through training and enhance their

awareness of climate change mitigation Enhancing brand value

to suppliers with excellent ESG performance. Green

certified products help gain market competitive Medium- and

disclosure enhance brand

prices have affected the stability and customer loyalty influence through publicity

of the supply chain advantages. Investors continue to pay more attention

long-term and promotion and deepen

to leading enterprises in climate management cooperation with key customers

Countries or regions introduce

stricter climate policies such ·C ontinue to carry out greenhouse gas emissions

as imposing carbon emission accounting and continuously reduce emissions Green certified products have significant market

Policy and restrictions on the Company and Medium- and levels access advantages in the EU and Southeast Asia. Promote international certification

legal risks implementing carbon pricing long-term relying on the overseas production

mechanisms which leads to an ·Pay close attention to industry regulatory trends

The global market demand for low-carbon products

Expanding is growing. Products that meet carbon footprint Medium- and base develop an export product

increase in the Company's input and make compliance preparations in advance international markets requirements are more likely to enter the international long-term portfolio that meets mainstream

costs market and attract high-end customers. The layout environmental standards and enhance overseas market

In low-carbon transition as of overseas production bases provides support for

energy information and other market expansion

competitiveness

Technological technologies are upgraded the Short- ·C ontinuously improve our digital level and

risks Company may need to update the medium- and equipment energy efficiency to create a green and products and services purchased long-term low-carbon supply chain Abnormal climate causes annual price fluctuations of Work with suppliers to promote resulting in increased technology natural raw materials such as orange oil. Diversified sustainable procurement establish investment Optimizing supply Short- and a green supply chain management

·P ay attention to consumers' demand for low- chain stability

procurement and cooperation with green suppliers

can enhance supply chain resilience and reduce the medium-term system and ensure the stability

carbon products and continuously optimize the impact of climate-related risks and low-carbon development of

Company's products and services; expand into the supply chain

As consumers' demand for low- the field of low-carbon food ingredients promote

Transformation carbon transformation-related the research and development and application Improve the climate risk

risks services is increasing and their Short- of low-carbon technologies use enzymatic management system establish

Market risks requirements are improving the medium- and hydrolysis technology to produce low-carbon

Climate risk management capabilities have become a climate risk identification

Company needs to continuously long-term products and actively explore the potential

Enhancing enterprise one of the core competitiveness of the industry.resilience and Companies with excellent ESG performance have Long-term assessment and response

innovate products and improve application of synthetic biology competitive advantage shown greater resilience in financing channels and mechanism and incorporate

service quality ·P rioritize the use of renewable raw materials and market competition climate factors into corporate

packaging strategy and operational decision-

·Strengthen low-carbon product marketing and making

enhance consumer awareness

External stakeholders have higher

requirements for the Company's Greenhouse Gas Emissions of Huabao Flavours & Fragrances

climate-related governance ·M aintain close communication with stakeholders

performance and information Short- and improve the disclosure of climate-related Reputation disclosure. If the expectations medium- and information Key performance indicators Unit 2023 2024risks of stakeholders are not met the long-term ·Establish an ESG management system to

Company's reputation may be improve sustainable development performance Scope 1

damaged leading to the loss of (direct emissions) Tons of CO2 equivalent 2042 1575

consumers and investors

Greenhouse Scope 2

(energy indirect emissions) Tons of CO2 equivalent 7476 5765gas emissions

Total emissions Tons of CO2 equivalent 9518 7340

2 Time definition: short-term (0-3 years) medium-term (3-10 years) long-term (more than 10 years) 3 Time definition: short-term (0-3 years) medium-term (3-10 years) long-term (more than 10 years)81 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 82

Climate Mitigation Action

Case: Full Introduction of Electric Forklifts to Start Low-Carbon Energy Transformation

Huabao Flavours & Fragrances recognizes that its development environment faces many climate-related risks but risks also

contain multiple opportunities. Therefore by continuously improving energy and resource utilization efficiency upgrading The Company's new plants give priority to the introduction of new

operating models improving energy management level building a green and low-carbon supply chain the Company energy equipment to continuously reduce their dependence on

promotes our products and services to keep pace with the times enhances our resilience to climate change and create traditional fossil energy. For example Jiangxi H&K fully adopts

more opportunities for the Company's sustainable development. electric forklifts for handling operations in the warehousing process

with a total of 11 electric forklifts. Compared with traditional fuel

Equipment Energy Efficiency Upgrade forklifts electric forklifts have lower energy consumption helping the company to move steadily towards a low-carbon production model.The Company attaches great importance to the energy efficiency performance of equipment and actively purchases various

energy-saving and environmentally friendly equipment covering multiple areas from key production links to auxiliary

processes curbing the emission of pollutants at the source. The Company gives priority to energy-saving equipment with Electric Forklift

low energy consumption in the equipment selection stage. In the selection of production equipment low-energy and high-

efficiency variable-frequency motors are selected such as the use of energy-saving water pumps circulating cooling towers

and other equipment and facilities to save energy. In green lighting priority is given to energy-saving lighting equipment such

as compact fluorescent lamps high-pressure sodium lamps and low-pressure sodium lamps with high efficiency so as to Low-Carbon Upgrade of Operating Model

effectively reduce energy consumption and carbon emissions.The Company actively promotes the low-carbon upgrade of its operating model through production process optimization and

In addition the Company has taken a series of comprehensive measures to reduce carbon emissions and save energy in other means and further improves energy efficiency by reducing greenhouse gas emissions in production operations and

using natural gas including adding energy-saving heating devices to the boiler system to improve thermal energy conversion management.efficiency using warm or hot water to preheat the boiler to shorten startup time and reduce energy consumption installing

thermal insulation film on the outside of the steam pipe to reduce heat loss implementing automatic control of the steam

pipeline to accurately adjust the flow rate and flexibly adjusting the heating boiler model according to production needs so

as to promote the Company's transformation to a greener lower-carbon and sustainable development model. Case: Optimizing Processes and Layout to Promote Green and Low-Carbon Transformation

Jiangxi H&K innovates the material conveying method Jiangxi H&K optimized the layout of power facilities

and based on in-depth research and optimization of and placed them in the center of the factory reducing

the production process cleverly designs a top-down energy losses during transmission and ensuring that

high-low position differential layout. In the material flow power energy is delivered to each production link in

process the material's own weight is fully utilized for the most efficient manner further improving energy

transportation which greatly reduces the frequency utilization efficiency and helping to achieve low-carbon

of use of material conveying pumps realizes the development goals.integration of high efficiency and low carbonization of

the production process and provides an innovative

example for energy conservation and emission reduction

in the material transportation link in the industry.Frequency Conversion Energy-Saving Equipment

Material Conveying by Its Own Weight Power Facility in the Center83 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 84

Energy Management and Green Operations

Energy Management Energy-Saving and Cost-Reducing

measures of Huabao Flavours & Fragrances

Huabao Flavours & Fragrances strictly abides by the Energy Conservation Law ISO 50001:2018 and other relevant laws

and regulations and standards continuously optimizes its energy management system and formulates management

regulations such as the Electricity Conservation Management System the Resource and Energy Conservation Management Daily Electricity The Company actively advocates energy conservation and requires employees to

Regulations and the Energy Management System to implement and continuously improve the energy management system Management turn off lights when leaving office and shut down personal computers and desktop

and has passed the energy management system certification. The Company has established an energy management office equipment during non-office hours to reduce standby power consumption.system working group to strictly implement its energy management regulations across work teams and individuals fully Promote the use of energy-saving lamps and energy-saving control devices.enhance the energy-saving awareness of all employees and convey our energy management requirements to all relevant

parties. During the reporting period Yingtan Huabao has acquired the Energy Management System Certification ISO The lighting system uses segmented control switches to facilitate partial opening

50001:2018. and avoid waste of large-area lighting.

Five minutes before work and after work department heads are responsible for

turning on or off lighting and electrical appliances such as air conditioners fans

Yingtan Huabao Energy Management System Working Group lighting and computers to prevent electricity waste when no one is working.During the lunch break except in special circumstances all lighting and electrical

appliances must be turned off.● Responsible for establishing energy benchmarks energy targets and energy management

implementation plans;

● Responsible for monitoring measuring and analyzing energy performance; Air Conditioning The air conditioners are set to a unified temperature standard no lower than 26°C Management in summer and no higher than 20°C in winter.● Responsible for fully considering energy performance improvement opportunities when designing

new modified and expanded project sites; When the room temperature is below 25°C it is encouraged to open windows for

● Responsible for the energy management during the construction process of departmental technical ventilation and avoid turning on air conditioning.Energy improvement projects; Maintenance personnel regularly check the operation of the air conditioner to

Management ● Responsible for giving priority to purchasing energy-saving equipment in the equipment purchase ensure timely maintenance.Office review process;

● Responsible for evaluating the impact of newly purchased equipment on energy use energy

consumption and energy efficiency. New Equipment When purchasing new equipment all departments should give priority to energy-Selection saving and water-saving equipment under the same conditions.During use water and electricity should be used rationally and equipment

● Responsible for departmental energy review; maintenance should be done properly.● Responsible for the completion of departmental energy indicators and the implementation of the

energy management implementation plan;

Energy Management Responsible for the equipment and maintenance of the Company's water and

● Responsible for monitoring measuring and analyzing departmental energy performance; and Monitoring

Major energy- electricity metering instruments and conduct monthly metering statistics.● Responsible for formulating departmental economic operation plan;

consuming Regularly optimize and inspect energy supply and transmission lines to ensure their

departments ● Responsible for the departmental non-compliance correction and corrective and preventive actions. normal operation.Strengthen electricity management and strictly control the electricity consumption of

each department

● Responsible for the preparation revision management and control of energy management system

documents;

● Responsible for the internal audit of the energy management system;

● Responsible for assisting top management in conducting management reviews;

Energy Usage of Huabao Flavours & Fragrances

●

Technology Responsible for the collection and compliance evaluation of laws regulations and related

Department requirements applicable to the company;

● Responsible for the control of nonconformity corrective and preventive actions. Key performance indicators Unit 2023 2024

Petrol Liter 62361 35874

● Responsible for organizing relevant skills training for major energy users;

● Responsible for the allocation and adjustment of human resources; Diesel Liter 113362 24126

● Responsible for providing evidence that personnel in various positions are competent;

Administration

●

and HR Responsible for the supervision and management of personnel training plans establishing training

Natural gas Cubic meter (m3) 741728 662218

Department files and confirming training results.Electricity Megawatt hour (MWh) 13109.64 10742.9785 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 86

Wastewater Management

Waste Management The Company's wastewater includes production wastewater and domestic wastewater. Production wastewater mainly

comes from vacuum wastewater and equipment cleaning wastewater in each workshop. Domestic wastewater mainly

Huabao Flavours & Fragrances strictly abides by the Law on the Prevention and Control of Atmospheric comes from canteen catering domestic sewage and office domestic sewage. All wastewater is subject to the national and

Pollution the Law on the Prevention and Control of Water Pollution and other laws and regulations in local regulations and the emission standards specified in the Pollution Discharge Permit.the places where it operates. It actively carries out environmental pollution control and waste emission The Company implements a series of wastewater treatment measures treating domestic sewage through three-stage

management regularly monitors the emission of major pollutants such as waste gas and wastewater septic tanks and grease traps and treating it together with production wastewater through the factory sewage treatment

and actively reduces waste generation. In 2024 the Company had no major emissions or leakage station and then discharging it into the sewage treatment plant for further treatment. The sewage treatment station adopts

violations and no significant administrative penalties or criminal liabilities incurred due to pollutant the "water collection tank + sedimentation tank + conditioning tank + anaerobic tank + biological filter" treatment process

emissions. effectively reducing the adverse impact of wastewater on the surrounding environment.Waste Gas Management Wastewater Discharge of Huabao Flavours & Fragrances

The Company has formulated regulations such as the Waste Gas Pollution Management Regulations and the Waste Gas Key performance indicators Unit 2023 2024

Management Control Procedures to handle organized and unorganized waste gases in strict accordance with national and

local laws and regulations and the emission standards stipulated in the Pollution Discharge Permit. Taking the subsidiary Total wastewater discharge Cubic meters 587161 398345

Yingtan Huabao as an example Yingtan Huabao strictly implements the emission standards of Emission Standard of Air

Pollutants for Boiler (GB13271-2014) Integrated Emission Standard of Air Pollutants (GB 16297-1996) and Emission

Standards for Odor Pollutants (GB 14554-1993) for boiler flue gas non-methane total hydrocarbons volatile organic

compounds and odor to ensure that emissions comply with national regulations.In addition all subsidiaries have taken a series of waste gas management measures based on the conditions of their Solid Waste Management

respective production lines. For example Yingtan Huabao uses activated carbon + 15m exhaust pipe to discharge distillation

waste gas; Guangzhou Owada places the process where the odor of ingredients is generated in a small closed workshop

with a wind collection hood installed and a special disposal facility adopted for activated carbon adsorption; Jiangxi H&K The Company strictly implements relevant laws and regulations such as the Law on the Prevention and Control of

regularly inspects environmental protection facilities and updates corresponding accessories. For the unorganized waste Environmental Pollution by Solid Waste and the National Catalogue of Hazardous Wastes formulates internal rules and

gas generated in the production process each factory area strengthens workshop production management to reduce the procedures such as the Waste Management Control Procedures and the Solid Waste Treatment Regulations and recycles

amount of waste gas escape and reduces the impact of unorganized waste gas on the surrounding environment through waste that has utilization value by standardizing the treatment processes of different types of waste. Among them domestic

daily equipment maintenance workshop ventilation and factory greening absorption. waste is handled by the sanitation department and general solid waste sludge is handled by a third party with professional

qualifications with a Solid Waste Disposal and Industrial Service Agreement signed to ensure 100% compliance with the

waste treatment rules and ensure that the waste disposal meets the Standard for Pollution Control on the Non-Hazardous

Industrial Solid Waste Storage and Landfill (GB 18599-2020) and other national and local requirements.The Company clearly distinguishes between hazardous waste and general waste places an appropriate number of solid

waste collection bins in the office building and each workshop and labels them as hazardous waste (red label) recyclable

waste (green label) and non-recyclable waste (blue label). Each department collects solid waste by category and stores it

in the corresponding collection bins. Recyclables are handed over to the waste recycling department and a monitoring and

measurement control procedure is implemented to achieve the resource utilization harmlessness and reduction of various

types of solid waste.Jiangxi H&K Regularly Checks Jiangxi H&K Regularly Checks and Replaces

and Replaces Activated Carbon Failed UV Light Oxygen

Waste Gas Emissions of Huabao Flavours & Fragrances

Key performance indicators Unit 2023 2024

NOx emissions kg 0 4

SOx emissions kg 231 45087 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 88

Hazardous Waste Management

In accordance with national laws and regulations the Company has

formulated a series of systems including the Standard Operating Green Production and Operation

Procedures for Laboratory Waste Treatment and the Management

System for Precursor Chemicals to strengthen the Company's

Huabao Flavours & Fragrances continues to optimize its resource management system raising

chemical safety supervision and management ensure the life and

awareness of resource conservation among all employees by strengthening management and holding

property safety of employees and promote the Company's safe and

special water-saving and electricity-saving publicity activities actively recycling packaging materials

healthy sustainable development. The Company strictly implements the

to practice the circular economy advocating green procurement and green travel and is committed to

National Catalogue of Hazardous Wastes and other relevant laws and

contributing to the cause of environmental protection.regulations and formulates the Waste Management Control Procedure

Hazardous Waste Emergency Plan Registration System Hazardous

Waste Emergency Plan Hazardous Waste Storage Facility Management

System Hazardous Waste Storage Site Management Regulations

and other documents for the management of hazardous waste. For Training on Standardized Management Water Conservation

hazardous waste a safety officer is designated to be responsible for the of Hazardous Waste Generating Units

coordination and management of waste treatment. By standardizing the To promote the sustainable use of water resources reduce water waste and strengthen the scientific management of water

treatment processes of different types of waste the waste with utilization use the Company has formulated the Water Resources Management System in accordance with the relevant laws and

value is recycled and treated and subject to daily supervision regular regulations of the Water Law of the People's Republic of China and established a water resources management project

handover and disposal by entrusted qualified units. team based on its actual situation. General managers of its subsidiaries are responsible for planning organizing and

coordinating the work of various departments and making decisions on water-saving projects.Case: Upgrading Sewage Equipment to Halve Sludge Volume

Make full use of secondary water and encourage employees to use rice washing water

to water flowers collect rainwater for watering plants and flushing the ground and such

Jiangxi H&K a subsidiary of the Company actively upgraded the other water-saving measures.equipment of its sewage station purchased sludge diaphragm pumps Use water-saving faucets and encourage employees to reduce the flow of faucets as

used plate filter presses to filter the sludge controlled the moisture Employee Water much as possible for their daily water use and turn water on and off in a timely manner.content of the sludge below 73% and moved the frame filter press to Conservation Control the amount of boiling water in water heaters according to the number of

the side of the secondary sedimentation tank. The sludge is pumped Initiative production personnel and reasonably determine the number of water heaters to be

into the filter press with the help of a lifting pump and the water from turned on to avoid unnecessary consumption of water resources.the filter press is directly discharged into the biochemical pool above

the middle water pool eventually reducing the original sludge volume of Maintenance personnel are responsible for checking the water facilities on each floor

about 10 tons per month to about 5 tons. Sludge Filter Press Equipment every day to detect possible problems in a timely manner.If maintenance personnel find water leaks or damage during the inspection they should

arrange repair in time to minimize water waste and ensure the normal operation of water

Waste Discharge of Huabao Flavours & Fragrances facilities.Facility Inspection

Key performance indicators Unit 2023 2024 Regularly check the interconnection and blockage of rainwater and sewage pipes and and Maintenance use rainwater for greening through scientific planning and layout such as rainwater and

Domestic and commercial solid waste Tons 48 1028 sewage diversion to reduce the use of municipal water supply and groundwater and Non-hazardous

waste promote rainwater recycling.Industrial solid waste Tons 225 115

Hazardous waste Hazardous solid waste Tons 11 10

Note: In 2024 the solid waste increased due to technological upgrades in the Company's subsidiary.Noise Management

Huabao Flavours & Fragrances has taken a number of measures in noise management to ensure compliance with relevant

standards. Its current noise sources mainly include life transportation and boiler operation but the factory boundary noise

values meet the Industrial Enterprise Factory Boundary Noise Emission Standards. To actively prevent and strictly control

the noise and vibration pollution generated in production and operation the Company selected equipment with less noise The Company Practices Rainwater and Sewage Jiangxi H&K's 600 Cubic Meters Rainwater

and equipped the equipment with more noise with sound insulation facilities and sound insulation doors. It regularly monitors Diversion and Checks the Rainwater and Sewage Collection Tank

noise and provides employees with necessary hearing protection measures thereby effectively controlling or reducing Pipes for Cross-pipe and Blockage Conditions

noise and ensuring that it meets the factory boundary environmental noise emission standards. During the reporting period

Huabao Flavours & Fragrances did not receive any complaints about noise.89 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Green Guardian: Painting a Beautiful Picture of the Earth Together 90

Green Office

Case: Intelligent Liquid Level Control System Achieves Efficient Condensate Recovery

Huabao Flavours & Fragrances is committed to promoting green procurement and daily environmental protection strategies.In daily office and life it encourages and requires employees to behave from the details and practice the concept of

Jiangxi H&K made technical improvements to the steam condensate sustainable development with practical actions. The Company actively advocates green travel and provides employees with

recovery device in the second phase of the plant by installing a liquid level commuter vehicles encouraging them to use public transportation and take taxis when on business trips to reduce carbon

sensor on the water tank level display tube and independently developing a emissions and jointly create a low-carbon environmentally friendly working environment.complete set of control circuits. The system replenishes water through high

and low liquid levels with intelligently controlled electromagnetic valves while The Company advocates meal packing to reduce food waste and strives to reduce the purchase of non-degradable

ensuring that space is reserved in the water tank for phase II condensate disposable items. It encourages employees to use their own water cups as much as possible to reduce the use of disposable

recovery. Condensate is replenished preferentially through liquid level water cups and the canteen purchases reusable tableware to reduce the generation of plastic waste. In addition the

settings facilitating the recycling of approximately 100 kilograms of steam Company calls on all departments to reduce unnecessary newspaper subscriptions reduce paper waste and reasonably

condensate per day. arrange various types of trash cans to promote garbage sorting and recycling.Condensate Recovery Control System

Case: Water and Electricity Management Upgraded in the Park Achieves Remarkable

Results in Water Saving and Power Reducing

In 2024 Guangzhou Owada further updated the water meter statistics analysis and investigation mechanism

in the Park numbered and registered each of the 40 water and electricity meters strengthened inspections and

analysis and uniformly upgraded and renovated all corroded and leaking water pipes in the 6 guest rooms in the

Park to ensure that not a drop of water or a kilowatt-hour of electricity is wasted and that leakages are completely

prohibited. By solving a series of problems at the source water expenditures was effectively reduced helping the

Park reduce water consumption by 3800 tons of new water compared to the same period a decrease of 25%.Environmental Protection Signs Set by the Company

Circular Economy

When selecting product packaging we adhere to the principle of rationality strive to be concise and efficient and try our best

to purchase reusable or recyclable packaging materials to reduce excessive use of packaging materials and the generation

of packaging waste. For example Yingtan Huabao partially uses "paper instead of plastic" new packaging materials and

sells and disposes of recyclable waste barrels such as iron barrels and plastic barrels. In 2024 Yingtan Huabao disposed of

53.52 tons of recyclable waste barrels.

Unified Upgrading of Water Pipes in the Owada Park

In addition Jiangxi Yifang actively uses recyclable barrels for the storage and transportation of jam and all foreign guests

in the cafeteria use degradable lunch boxes to reduce dependence on disposable containers and reduce waste generation.In 2024 the total amount of recycled waste in Jiangxi Yifang was 63.76 tons. The Company has always been committed

Water Use of Huabao Flavours & Fragrances to achieving the effective recycling and reuse of recyclable resources and continuously contributing to promoting the

sustainable development of society.Key performance indicators Unit 2023 2024

Total water consumption Tons 605535 47574291 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 9293 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 94

Employee Rights and Interests Employee Composition in 2024

During the reporting period the Company had a total of 1225 employees including 178 new full-time employees.Huabao Flavours & Fragrances strictly abides by the Labor Law of the People's Republic of China the Trade Union Law

of the People's Republic of China and other relevant laws and regulations and has formulated the Human Resource

Management Measures and other relevant employee management systems to promote the standardization of the By Gender By Age

Company's operation openness of the management of the employees and rationalization of the protection of employees.

240174

Employee Recruitment 456

The Company utilizes a diverse range of recruitment channels for all positions including online job boards and offline 769

special recruitment fairs. Adhering to the employment standards of morality vision capability and solutions the Company

is committed to hiring on the basis of both virtue and talent and prohibits any discrimination in employment based on

nationality region race ethnicity gender age religious beliefs or similar factors ensuring fair hiring practices. To prevent 438

the occurrence of child labor or forced labor the Company conducts background checks on the work experiences of 373

prospective employees verifies their basic information and health status and ensures that all relevant personnel meet the

age requirements.The Company is committed to creating an inclusive diverse and respectful corporate culture that values individual Male employees 30 years old and below 41-50 years old

differences. This commitment is reflected not only in the Company's entrepreneurial spirit but also in its daily operations Female employees 31-40 years old 51 years old and above

and decision-making processes. The Company firmly believes that by building a diverse employee base it can not only

enhance the team's collaboration and market competitiveness but also promote the exchange and integration of different

backgrounds and perspectives thereby broadening the Company's vision and enriching its creativity. By Educational Background By Profession

The Company further regulates employment compensation benefits health and safety training and other related matters in 90

the Employee Handbook strictly adhering to national laws and standards. It continuously improves the employee protection 228263

mechanism to safeguard employees' legitimate rights and interests. Additionally the Company has clearly outlined the

handling procedures for employee violations and has made the channels for reporting violations publicly available. 457

71

378

Case: University Students Visit Huabao

301

229

In June 2024 more than 80 college students majoring in Perfume

and Aroma Technology and Engineering from Shanghai Institute

of Technology visited the Shanghai Park of Huabao Flavours & 265 168

Fragrances for an off-campus "Cognition Internship" course. During

the event the Company's Vice Chairman of the Joint Trade Union Master's degree and above High school and technical school Administrative staff Technical staff

and Senior Manager of the HR and Administration Department Bachelor's degree Others Production staff Finance staff

warmly welcomed the teachers and students who came to visit Associate degree Sales staff

and study. They led a tour of the Company's exhibition hall and

laboratories and delivered an engaging career planning session

sharing insights on professional learning and career planning

based on enterprise industry and personal learning and growth Visit to Huabao

experiences. The event enabled students to better plan their

studies careers and futures. For many years the Company Key performance

has had a strong school-enterprise cooperation relationship with

Shanghai Institute of Technology and they interact frequently on The Company maintains a 100% labor contract signing rate and 100% social insurance coverage.talent development major learning internship and employment

and other topics providing students with learning internship and The Company employs 30 ethnic minority employees and 7 employees with disabilities.employment platforms and opportunities.Female employees account for 21.88% of middle management and 37.5% of senior management.95 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 96

Compensation System Structure

Case: The Company Trade Union Held a Summary and Planning Meeting

The Company strictly adheres to the Labour Law of the People's Republic of China the Labour Contract Law of the People's

Republic of China and other relevant laws and regulations. It has established and implemented rules and regulations such as

the Compensation Management Regulations to provide competitive salaries and legally mandated social insurance and housing In July 2024 Huabao Flavours & Fragrances Joint Trade Union held an expanded meeting of the “Two Committees”

provident funds for employees. for the first half of 2024 in a conference room at the Shanghai Park of Huabao Flavours & Fragrances. 15 trade union

In line with its operational goals the Company covers all positions in the four major categories of production sales technology committee members and department member representatives attended. This meeting summarized the work done

and operations at various levels revising and improving performance indicators for each position. The content is combined with the during the first half of the year. With the understanding support and supervision of member employees the trade

characteristics of the job responsibilities of each department to improve the operability and practicality of performance indicators. union achieved good results and effectively implemented the Company's ESG strategy. The meeting also deployed

This strengthens the correlation between actual employee performance and performance-based compensation ensuring a key work tasks for the second half of the year. The trade union would carry out various tasks in an orderly manner

professional and rational performance evaluation process. in accordance with the deployment to serve employees and promote the development of the company including

further improving the quality of trade union services protecting employees' rights and interests and promoting the

The Company has formulated the Employee Performance Evaluation Management Measures to objectively evaluate employee

performance encourage employee work enthusiasm train employee work skills and promote scientific standardized and efficient development of the company's business.corporate management. The Company's employee integrity and safety project evaluation uses a one-vote veto system. If a related

incident occurs the evaluation will automatically halt. The superior's evaluation uses a real-name system. The reasons for each

indicator's evaluation score must be briefly explained on the superior's evaluation form. Employees can also provide objective

feedback on their opinions and views on the person being evaluated to the leadership team in a real-name setting.Upon the determination of performance evaluation results the Company conducts performance feedback through two channels:

direct supervisor interviews and feedback from the HR and Administration Department. The specific process is as follows: Firstly

based on the completion of assessment indicators the results are derived and communicated to the responsible parties by the

HR and Administration Department. Subsequently the direct supervisor holds a meeting with the employee to acknowledge

achievements identify areas for improvement and propose enhancement suggestions. If the employee has objections to the results

they may raise them through the appeal channel. The HR and Administration Department will then investigate and provide feedback

on the resolution ensuring a fair just and transparent evaluation process.Performance Evaluation Principles

Trade Union Summary and Planning Meeting

Conscientious Objective Fair Just Fact-based

Case: The Company Successfully Held the First Session of the Third Member

Representative Assembly

Furthermore based on actual business development the Company developed specific staff incentive systems such as the technical

staff incentive system the sales staff incentive system the overseas staff incentive system and the innovation project incentive The Huabao Flavours & Fragrances Joint Trade Union held its First Session of the Third Member Representative

system. These variable compensation schemes can motivate the Company's core employees and gather more power to promote Assembly at its Shanghai Park in September 2024. The assembly received high attention and active participation from

the Company's healthy development. the Company leaders and employees with 46 member representatives in attendance. The assembly comprehensively

Employee Compensation Structure reviewed the trade union's achievements over the past three years in developing six systems: employee welfare

activities care awards supervision and charity. It also made several suggestions and goals for future work. The

assembly used a secret ballot to elect new members of the trade union committee and the trade union fund audit

committee. The elected members have a reasonable structure cover multiple departments of the Company and

exhibit broad representation and professionalism. The successful trade union election infused new vitality into the

Company's future development and the happy lives of its employees and the trade union continues to work hard for

Monthly Monthly Performance Total Benefits and the Company's development and employee welfare.Position Salary Seniority Salary Bonus Allowances

Democratic Management

The Company values democratic management and establishes various communication channels to facilitate exchanges. The

company actively engages with its employees by establishing reporting boxes opinion boxes and rationalization suggestion boxes.The trade union as a joint organization democratically elected by employees regularly collects opinions and demands of employees

and promptly communicates and reflects the employees' will and interests to the Company. The Company conducts annual

employee satisfaction surveys to collect employee satisfaction with aspects such as employee health care and work environment

and promptly corrects and provides feedback for categories with low satisfaction in order to create a better workplace and corporate Member Representative Assembly

culture atmosphere.97 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 98

Employee Development Types of Company Training

Onboarding Mandatory for all new hires covering corporate culture organizational structure policies

Training employee code of conduct role-specific responsibilities skills workflows and safety protocols.Talent is the driving force for the sustainable development of Huabao Flavours & Fragrances. The Company actively

encourages employees to improve their skills and focuses on providing them with a variety of career development

opportunities and training programs. Through systematic career development plans the Company assists employees in Transfer Training Required for employees moving to roles with significant differences from their previous

achieving comprehensive personal and professional growth. The Company is committed to creating a working environment positions focusing on new knowledge and skills.that encourages and inspires employee innovation keeping the team at the forefront of the industry and laying a solid

foundation for the Company's long-term success. Based on the Company's development plans and the operational needs of various departments

Job-Skill Training employees receive job-specific skill training tailored to their professional specializations. Job-

skill training is categorized into internal training and off-site training according to different

Employee Training formats and these may be combined based on actual circumstances.The company has established relevant employee training systems and places a high value on employee training and skill Personnel in specialized roles (e.g. electricians inspectors warehouse custodians internal Specialized Role

improvement. It offers a variety of training options including onboarding training role transition training job-specific skills auditors) must complete industry-specific training pass assessments and obtain certification Training

training (both internal and external) special job training and so on based on employees' professional needs and job before assuming duties.positions. Following the training assessments and evaluations are conducted to determine whether the training produced

the desired results. To help employees grow holistically the company focuses on three key areas of employee development:

The Company encourages employees to actively apply for job-related titles and academic degree certificates in their spare

business capabilities leadership and adaptability to overseas assignments.time through self-study or relevant training in order to improve employees' personal professional and technical levels and

the Company's industry competitiveness. Within a month prior to the exam date employees can apply for two days of paid

Training Program Proposal and Implementation leave per exam subject to review without interfering with their primary work. This allows them to prepare for the exam.Employees who take the exam on a weekday can get one day of paid exam leave.Training Plan Development Key performance

Departments submit training proposals based on operational needs to the HR and Administration During the reporting period the Company invested RMB 500000 in employee training conducting 15000

Department. The HR and Administration Department consolidates these requests with corporate hours of training across 65 sessions covering 92% of employees. The average training time per employee was

strategic objectives to formulate the annual training plan by the end of December each year. 15.5 hours.Case study: "Training Camp in Africa" empowers local sales teams

Training Implementation

The HR and Administration Department monitors and tracks the execution of the annual training In December 2024 Huabao Flavours & Fragrances held an HR and

plan. Administration Work Summary Meeting at its Shanghai Park. The meeting

brought together the Company's HR and administration teams as well as HR

and administration staff from its subsidiaries to conduct in-depth discussions

and experience exchanges on a number of key employee management and

development topics. The Company invited a number of external professional

lecturers to share their perspectives focusing on the ESG concept

conducting in-depth analyses of human capital development indicators based

Training Plan Adjustments on the Company's situation and explaining in detail a variety of topics such

as talent development and incentive methods technological innovation On-site Employee Recognition

empowering HR and so on. This meeting provides a platform for HR and

Mid-year adjustments to the training plan require departmental submission of a revised proposal

administrative personnel to exchange experiences and knowledge improve

approval by the General Manager archival by the HR and Administration Department and

the HR and Administration Department's management level and prepare for

synchronization with the updated annual plan.the development of a more outstanding HR and administrative system.99 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 100

Case: The Company Held an HR and Administration Work Summary Meeting Case: Guangzhou Huafang Conducted a Special Training on Business Etiquette

To help the team quickly adapt to the local market the Company

carried out in July 2024 the "Training Camp in Africa" in five In April 2024 Guangzhou Huafang a subsidiary

places in Africa with contents focusing on daily chemical flavor of Huabao Flavours & Fragrances organized its

knowledge market research sales skills etc. The two-week employees to take an online "Business Etiquette"

training covered fragrance system analysis daily flavor test video course. The course lasted 4.57 hours. For

customer negotiation drill etc. and combined them with field employees to learn and refer to the main ideas

market research to enhance trainees' product awareness and of the video were compiled into Key Points for

market insight. Through systematic training the team not only Business Etiquette Learning. Following the course

mastered the fragrance evaluation standards and sales methods Guangzhou Huafang scheduled a business

but also accumulated practical experience in tapping into the etiquette test for trained employees to assess

market and grasping customer needs laying a solid foundation for Sales Team in Africa the effectiveness of the video course training and

the international expansion of the daily chemical flavor business assist employees in better mastering the course's

of the Company. knowledge points.Test Site

Case: PT Huabao Food Technology Indonesia's Recognition Event Promotes Career Employee Promotion

Growth

The Company has established complete employee promotion pathways and implemented employee development incentive

PT Huabao Food held an annual summary and recognition event in December 2024 where elites from various measures to encourage employees to achieve their personal improvement goals while also pooling wisdom and strength

overseas departments gathered to review the previous year's achievements and challenges as well as to plan for to achieve the Company's development goals. After employees join Huabao Flavours & Fragrances the Company will

future development. During the event the team presented highlights and innovative solutions in 2024 demonstrating assist them in conducting self-assessments in terms of their growth experience educational background personality traits

the wisdom and collaborative spirit of overseas employees. The Company awarded the "Employee of the Year" title strengths and potential. Based on the assessments and the Company's employment needs the Company will identify the

to recognize team members who have excelled in their career development setting a benchmark for the growth areas in which employees are most interested and qualified analyze their career positioning and clarify their development

of overseas teams. This event is not only a recognition of employee efforts but also an important step for Huabao directions allowing employees to fully capitalize on their strengths.Flavours & Fragrances in promoting the development of global talents. Through summary and recognition the

The company provides distinct career development pathways for different tracks of positions such as technology and

Company provides a platform for overseas employees to showcase and learn motivating the team to continuously

management and it implements regular promotions and salary increases. It also allows for job rotation and track switching

improve their professional capabilities and innovation awareness and injecting new impetus into the globalization

and encourages employees to select development pathways based on their own development needs and career goals.strategy.Multi-Track Promotion Pathways

Management Track Supervisor ...... President

Marketing Track Account Executive ...... Chief Account Director

Professional Track Perfumer ...... Chief Perfumer

Technology Track Assistant Engineer ...... Chief Engineer

PT Huabao Food Recognition Event101 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 102

Responsibility and Safety

Case: The Company Organized A Health Education Lecture

Occupational health and safety production serve as the operational cornerstones of Huabao Flavours & Fragrances' high- In April 2024 Huabao Flavours & Fragrances hosted a health

quality development. The Company adheres to the safety-first production policy continues to publicize the safety-first education lecture on "Daily Protection of Cervical and Lumbar

production concept and provides employees with a safe and healthy working environment. Diseases" at its Shanghai Park and invited doctors from a

community health service center to share common knowledge

Occupational Health Management and preventive measures for cervical and lumbar diseases

with employees. The doctor in charge thoroughly examined the

The Company strictly adheres to the Work Safety Law of the People's Republic of China the Law of the People's Republic symptoms of neck shoulder waist and leg pain shared health

of China on Prevention and Control of Occupational Diseases and other laws regulations guidelines and policies. It has information with the employees present and led them through

established a management system based on the Company's operation conditions to ensure that the occupational health cervical exercises. He encouraged employees to exercise during

management system functions effectively. The Company thoroughly reviews the corresponding work procedures and work breaks to relieve tension and strain in their neck and waist

steps in the declaration and approval process of personal injury protection at all stages of new modified and expanded muscles. Following the lecture some employees asked the

projects to ensure that they run smoothly. During the reporting period the Company's headquarters Shanghai branch doctors questions which they answered one by one offering

and subsidiaries Yingtan Huabao and Guangzhou Huafang all obtained the ISO 45001 occupational health and safety specific suggestions and solutions. This lecture is concerned with Health Education Lecture

management system certification. They established a set of control procedures in accordance with the system requirements the physical and mental health of employees and increases their

including Environmental and Occupational Health and Safety Objectives and Management Program Control Procedures awareness of cervical and lumbar diseases as well as their self-

and Environmental and Occupational Health and Safety Behavior Control Procedures for Related Parties. They also prevention capabilities.tested occupational disease hazards in the workplace on a regular basis and through identification prevention correction

monitoring and other methods they reduced the health damage to employees caused by operations from all angles and

perspectives. The remaining subsidiaries all follow this system and will actively conduct certification work. Case: The Company Conducted an Eye Health Check-up Activity

Selected ISO 45001 Certification Certificates of Huabao Flavours & Fragrances

Shanghai Branch Yingtan Huabao

In July 2024 Huabao Flavours & Fragrances held an eye health

check-up activity at its Shanghai Park inviting the eye health

service team of a professional ophthalmology hospital to bring

instruments and equipment to provide eye health services to

employees. The ophthalmologist began the activity by giving

employees a lecture on eye health knowledge detailing daily

techniques for protecting eye health. Employees learned the

value of regular eye check-ups and became more aware of how

to protect their vision in everyday life as a result of the lectures.Employees were then given an eye check-up to assess the overall

health of their eyes. The hospital has created detailed eye health

files for each employee based on their check-up results to ensure Eye Health Check-up

that everyone is aware of their eye condition in a timely manner.广州华芳急救知识专项培训

Key performance

In 2024 the Company allocated a total of RMB 453200 for employees' work-related injury insurance achieving

a 100% coverage rate. The coverage rate for occupational health examinations among employees also reached

100%. Additionally 0 occupational diseases occurred 1 work-related injury occurred no work-related fatalities

occurred and the total number of lost workdays due to injuries was 32.Employee representatives represent their colleagues' interests in occupational health and safety. The company listens to

employee feedback on a timely basis. To increase employee awareness of health and safety issues improve the operational

skills of employees in key positions related to environmental and occupational diseases and efficiently carry out specific

occupational health and safety production management tasks the Company regularly organizes health lectures and

health examinations for all personnel who have an impact on the Company's environmental and occupational health safety

performance including temporary employees and staff from related parties.103 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 104

Safety Production Management

Case: African Factory Renovation

The Company always prioritizes safety management strictly follows national safety laws and regulations establishes and

improves the safety management system formulates and improves the Safety Production Management Regulations the In 2024 the Company completed a comprehensive renovation of the F&G

Safety Production Responsibility System and other systems and forms a safety management committee and a safety Botswana factory in Africa to improve working environment and employee

management working group to ensure that safety production responsibilities are fulfilled in every position. At the same time safety. The factory's overall appearance has been completely renewed

the Company conducts regular safety training special inspections and emergency drills to fully improve employee safety through systematic renovations such as the refurbishment of building

awareness and emergency response capabilities. The Company employs systematic and refined safety management facades and roofs ground hardening and the laying of square brick

measures to cover daily operations as well as seasonal risk prevention and control to establish a solid safety production paths significantly improving the working environment and employee

line and to create a safe and stable operation environment for employees enterprises and related parties. traffic conditions thereby reducing safety hazards. Furthermore the

newly built spare parts warehouse not only meets storage requirements

but also ensures future production expansion further optimizing the African Factory Before Renovation

production process' safety.Case: Special Inspection on Summer Safety Production

At the same time environmental protection facilities have been enhanced.The rectification of the alcohol distillation tower has significantly increased

the alcohol recovery rate laying a solid foundation for subsequent sewage

In order to address the production safety risks posed by summer typhoons thunderstorms and high temperatures treatment and safety production. This renovation not only improved

the Company conducted a comprehensive special inspection on summer safety production in June 2024. The the factory's overall image but it also provided a safe and comfortable

inspection focused on key areas such as the implementation of the safety production responsibility system the working environment for employees setting a new benchmark for the

investigation of major hazard sources fire safety hazardous chemical management special equipment safety Company's safety production management.emergency management and operation management during high-temperature seasons. The inspection was divided African Factory After Renovation

into two phases: self-inspection and self-correction followed by company review. Through hidden danger detection

rectification and implementation and summary and feedback the Company's production safety management level

was comprehensively improved ensuring the achievement of the "zero production safety accidents" goal. This

demonstrates the Company's high regard for safe production. Chemical Management

The Company adheres to relevant national and international laws and regulations and establishes a sound chemical

management system to ensure the safe use and storage of chemicals. To strengthen its chemical safety supervision and

Case: The Company Held a Safety Management Training Session management the company has developed detailed management methods and regulations such as the Standard Operating

Procedures for Laboratory Waste Disposal and the Precursor Chemicals Management System. These regulations govern

the entire process of purchasing transporting storing and disposing of hazardous chemicals ensuring chemical use

compliance and safety and standardizing chemical emergency measures.The company held a special training session for all employees in June 2024 to raise safety awareness. A safety

accident case study A Safety Manager's Annual Summary video learning and an introduction to the three main The Company has implemented a comprehensive risk assessment mechanism for chemical use. It identifies and controls

safety laws were among the multi-angle materials that the Company's lecturers shared during the training. The potential hazards in the chemical use process through routine inspections and monitoring. It also sets up advanced safety

training as well as the test and feedback following the training raise employee safety awareness strengthen safety equipment protective measures and labor protection supplies to prevent potential safety hazards. For positions involving

management abilities and ensure the Company's safe operation and production. chemical operations each production department conducts regular publicity and education for employees to ensure that

they are familiar with chemical safety environmental protection and professional protection information.Hazardous Chemical Accident Response Procedures

Skin Contact

Remove contaminated clothing; wash thoroughly with

Eye Contact soap and water.Lift eyelids and flush continuously with flowing water

or saline solution; seek medical attention.Inhalation

Move to fresh air immediately; keep airway clear.Ingestion Administer oxygen if breathing is labored; seek

medical care.Safety Management Training Drink copious water induce vomiting and seek

medical assistance.105 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 106

During the access stage before applying for the purchase of required chemicals the using department determines the

hazards of the required chemicals by gathering existing information. The department assigns a hazard category to the Employee Care

chemicals based on their hazardous properties physical and chemical data and regulatory requirements and includes it in

the purchase application. During the disposal stage the using department handles the waste residues waste liquids waste

gases and so on that result from the use of the Company's hazardous chemicals. Environmental protection regulations shall

be strictly followed to avoid dumping them indiscriminately and polluting the environment. Guided by the corporate value of "sharing and win-win" the Company is committed to building an excellent corporate culture

attracting talent and uniting people. The Company strives to establish a fair and just employee compensation system and a

Chemical Safety Management Measures diverse employee welfare management system to improve employees' sense of belonging.The Company provides a variety of skill training sessions organizes diverse cultural and sporting activities and optimizes

MSDS Suppliers should have MSDS various welfare policies allowing employees to perceive the Company's care while devoting themselves to the Company.It strives to transform the intangible aspects of corporate culture into tangible experiences shifting from the abstract to the

Relevant personnel should be familiar with relevant regulations and have the ability to use

Access concrete so that employees can have real experience and feel connected to the company.and operate hazardous chemicals.The Company's Employee Welfare System

Comply with the Company's Precursor Chemicals Management System.Strictly follow the instructions for use prepare a solution preparation record and store in

Storage the designated location. Basic pension insurance basic medical insurance (including maternity insurance)

unemployment insurance employment injury insurance housing provident fund

Statutory Benefits statutory leaves etc.Standardize operations and specify placement.All operations are strictly carried out in accordance with their usage instructions.Health check-ups festival allowances birthday benefits work meals or meal subsidies

Usage

Do not store together. communication subsidies high-temperature subsidies home visit allowances

Special Benefits commuter shuttle services etc.The safety officer oversees waste disposal coordination and management.Hazardous waste should be stored separately. The Company organizes Family Day events to enhance mutual understanding between the Company employees and their

Disposal families. Team-building activities are conducted to alleviate work stress foster collaboration strengthen interpersonal bonds

Daily supervision and regular handovers. and enrich cultural lives. For female employees the Company has established the Huabao Care for Mothers Room and

hosts women-centric events to safeguard their rights and ensure every employee feels valued and respected.Case: Hazardous Chemical Leak Emergency Drill

In October 2024 J iangx i H&K he ld a

hazardous chemical leak emergency drill

in a precursor chemical warehouse. The

drill simulated a concentrated sulfuric acid

container leak. The drill participants wore

protective gear blocked the leak with fire sand

collected it in special barrels and disposed of

it properly. The drill is intended to help each

employee improve their ability to respond to

emergencies in a safe manner clarify their

responsibilities in such situations and further

understand the properties of hazardous waste.Hazardous Chemical Leak Emergency Drill Scene107 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Talent Empowerment: Building an Excellent Organization Ecology 108

Case: Women's Day Celebration Case: Autumn Harvest Sports Festival

On March 8 2024 Huabao Flavours & Fragrances In November 2024 Huabao Flavours & Fragrances launched the "Golden Autumn Rhythms Yearning for Life"

organized a Women's Day event to celebrate the 114th Harvest Sports Festival. This event aims to foster team collaboration and integration demonstrate employee care and

International Women's Day demonstrating care for female compassion implement the Company's ESG strategy and help employees step away from their busy work routines to

employees. Delicate gifts were distributed accompanied relax and rejuvenate thereby sparking innovative energy. The rice cutting and threshing activities allowed employees

by heartfelt holiday wishes. Themed "Long Live the to personally experience both the joys and hardships of farming while also gaining a profound appreciation for

Girlhood Spirit" the event featured nail art DIY and how hard-earned food truly is demonstrating the power of team collaboration. The rewards won by the top three

floral arrangement workshops allowing participants to teams will be channeled into Huabao's "Flower Growth Initiative" public welfare education program as a charitable

unwind and experience the Company's warmth. These fund to support underprivileged families. The activities not only allow employees to immerse themselves in nature

efforts highlight the Company and the trade union's and experience the joy of harvest but more importantly foster mutual understanding and trust through collaborative

commitment to advancing women's rights as well as their teamwork.compassionate support and humanistic care for female

employees.Women's Day Event

Case: Family Day Event

In May 2024 Huabao Flavours & Fragrances hosted its

annual Family Day under the theme "Scented Moments" Autumn Harvest Sports Festival

featuring parent-child games garden tours and a charity

fair to strengthen employee-company ties. Over 100

employees and their families from the Shanghai Park

participated. The event integrated philanthropic elements

channeling love not only to employee families but also

to underprivileged communities. Family Day bridges Case: Asia-Pacific Huabao Christmas Celebration

professional and personal lives promoting holistic well-

being and harmonious development.On Christmas Eve 2024 Asia-Pacific Huabao held a

Family Day Event Christmas celebration at its Singapore office conveying

the Company's profound care and warmth. The event

enhanced mutual appreciation among employees and

strengthened team cohesion through activities like

blind box draws and surprise gift-giving. The event

fostered cultural exchange and integration establishing

a bridge for communication across diverse cultural

backgrounds to further disseminate and put into

practice the Company's core values and unique culture.The celebration allowed employees to experience the

warmth of a home in a relaxed and joyful atmosphere

enhancing their sense of belonging and well-being Huabao Asia Pacific Christmas Celebration

while igniting the team's motivation to strive as the new

year approaches.109 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Giving Back to Society: Accountability Makes the Future 110111 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Giving Back to Society: Accountability Makes the Future 112Case: Shanghai-Yunnan Collaboration Enables “Yunnan Products Out ofYunnan”

Rural Revitalization

Huabao Flavours & Fragrances actively responds to the national rural revitalization strategy. By acquiring Yunnan

Huabao Flavours & Fragrances has always regarded rural revitalization as an important mission. Since

State Farms Plateau Food Co. Ltd. it deeply participates in the Shanghai-Yunnan cooperation and comprehensively

entering Xizang in 2016 the Company has actively responded to the call of the autonomous region's

promotes the "Yunnan Products Out of Yunnan" and "Yunnan Products Into Shanghai" campaigns. Relying on the

government and deeply participated in the implementation of Xizang's rural revitalization strategy. Under

collaborative model of "Yunnan resources + Shanghai market" the Company integrates the high-quality resources of

the four-in-one assistance model of assisting students helping farmers revitalizing the countryside

Yunnan State Farms and the technological innovation capabilities of Huabao to create a branding and marketization

and strengthening border areas the Company has effectively fulfilled its corporate social responsibility.path for plateau specialty agricultural products. By establishing a collaborative mechanism of "Shanghai R&D

Its rural revitalization practice results have been widely recognized and successfully make it one of

+ Yunnan manufacturing" Huabao Flavours & Fragrances has not only increased the added value of Yunnan's

the Excellent Rural Revitalization Cases of Listed the Company of the China Association for Public

specialty products but also promoted the application of technologies such as plant spice extraction and flavor

Companies The Company will continue to deepen its development in Xizang actively integrate into the

innovation helping Yunnan agricultural products enter the national market.new pattern of high-quality development there implement corporate social responsibility with greater

efforts and make positive contributions to the comprehensive promotion of rural revitalization. In addition the Company actively participated in consumer support actions and introduced Yunnan's specialty

products into the Shanghai market through the Shanghai-Yunnan cooperation platform injecting new impetus into

local farmers' income growth and rural economic development. This series of measures not only deepened the

industrial cooperation between the east and the west but also provided strong support for rural revitalization and

coordinated development of the regional economy demonstrating the Company's responsibility and commitment in

Key performance promoting agricultural modernization and sustainable development.Since entering Xizang Huabao Flavours & Fragrances has paid a total of RMB 712 million in taxes. A total of

RMB 40 million was paid in 2024.A total of RMB 2.0195 million has been invested in poverty alleviation and rural revitalization in the Xizang

autonomous region.Case: The Company Held a Donation Ceremony for the Practice Station

In November 2024 the donation ceremony for the New Era

Civilization Practice Station project in Zangxiong Village

Tanggu Township Linzhou County Lhasa was held at the

headquarters of Huabao Flavours & Fragrances in Lhasa.The completion of the practice station has promoted

Zangxiong Village to give full play to the role of the village-

level organization as a stronghold and prompted the Party

learning and education to reach every household and

maximize its value. This donation has brought support to

Zangxiong Village. With the help of the Company Zangxiong

Village will develop more rapidly and contribute greater to the

prosperity and development of Xizang.The Company consciously links its own development with

the development of Xizang and contributes nearly RMB 700

million to local tax revenue. In promoting border construction

ethnic integration and improvement of people's livelihood the

Company has demonstrated its sense of mission donated

money donations and materials to various parts of Xizang for

many times and implemented the national strategy of rural The Donation Ceremony

revitalization and development with multiple measures. Yunnan State Farms' Products113 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Giving Back to Society: Accountability Makes the Future 114

Case: The Flower Growth Scheme Launched to Support the Education Industry

Social Welfare

In August 2024 Huabao Flavours & Fragrances launched the Flower Growth Scheme a student aid project and

Huabao Flavours & Fragrances has always believed that caring about and dedicating oneself to officially released the Flower Growth Scheme brand and brand logo. The Company operates the public welfare

education will take long-term efforts. The Company cares about education. Supporting education with student aid project in a branded manner. This effectively standardizes and systematically manages all the charity

practical actions is an important measure for the Company to give back to society and better fulfill its student aid activities currently carried out by the Company enhances the influence of Huabao Charity brand

social responsibilities. promotes the implementation of student aid work and benefits more students.The petals in the flower logo of the Flower Growth Scheme represent open arms to welcome future young students.Each petal is made up of a heart shape representing the sincere love of the initiators and personnel and the public

welfare nature of the project. The yellow dot in the middle connecting the petals symbolizes the sun. The students

embrace the sun and live towards the sun. The entire graphic shape is inspired by the image of sunflowers which

face the sun symbolizing happiness and beauty.Key performance

In 2024 Huabao Flavours & Fragrances invested a total of RMB 241100 in public welfare and charity.The Public Welfare Brand Flower Growth Scheme

After field visits and surveys of two rural teaching sites the Company developed a long-term student aid plan for

the Jinzhai rural teaching site. According to the plan the Company set up Huabao Scholarships and Teaching

Awards at two funded teaching sites to encourage students with good character and academic performance and to

recognize teachers who stick to the front line of rural teaching. Considering the actual situation of the two schools

the Company also replaced their worn-out desks and printers and purchased various sports supplies such as ping-

pong tables. In the future targeted updating and purchase of items will be provided based on the needs of the two

teaching sites. The Company strives to establish the Flower Growth Scheme public welfare and education aid brand

projects and contribute its modest efforts to rural education in more regions.At the Donation Ceremony Supplies Distributed to Students115 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report Giving Back to Society: Accountability Makes the Future 116

Case: Selected for Jiading Industrial Zone Dream Classroom Social Practice Base Case: The Company Made Targeted Donations to Help Needy Students

In July 2024 the Company was selected as the sixth batch of Jiading Industrial Zone Dream Classroom student In July 2024 the vice chairman of trade union of Huabao Flavours & Fragrances and a group of employee

social practice activity base providing rich social practice opportunities for students in the area. The Company representatives came to Jinzhai in Anhui province to visit students who were specifically funded by the Company

actively fulfills its corporate social responsibility and promotes the development of basic education and higher and trade union and brought them scholarships provided by Huabao employees and relevant pairing families as

education through popular science education career guidance and other forms. In May of the same year the well as books donated by families participating in the Company Family Day "Books for Vegetables" charity event to

popular science lecture course "Learn About Spices and Essential Oils" submitted by the Company was selected warm and encourage them to pursue a better life and inspire them to fight for their dreams.into the course menu of the school-social-enterprise co-construction of Nanyuan School District in Jiading Industrial

Zone. The Company will continue to tap into its internal resources and maintain good interaction with Jiading

Industrial Zone education departments etc. to provide students with more meaningful learning opportunities and

help them grow better.The Awarding Ceremony of the Dream Classroom The school-social-enterprise co-construction

Social Practice Base in Jiading Industrial Zone course menu

At the Donation Visit

Letter of Thanks from the Students who Are Donated117 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report 118

ESG Key Performance Quantification Table Indicator Unit 2024

Hazardous waste Hazardous solid waste Tons 10

Indicator Unit 2024

Electricity kWh 10742966

Business Indicators

Diesel Liter 24126

Operating revenue RMB 10000 135679.36 Energy use

Natural gas Cubic meters 662218

Total assets RMB 10000 743711.33

Petrol Liter 35874

Governance Indicators

Water use Water Cubic meters 475742

Total number of directors covered by anti-commercial

NA 9

bribery and anti-fraud training

Paper recycling Recycled paper Kg 433

Percentage of directors covered by anti-commercial

%100

bribery and anti-fraud training

Water recycling Total amount of wastewater recycled/reused Cubic meters 130600

Percentage of management personnel covered by

%100

anti-commercial bribery and anti-fraud training

Business ethics Total amount of plastic recycled Tons 52

Number of employees who signed integrity Solid waste

commitment letters4

NA 887 recycling

Total amount of metals recovered Tons 18

Incidents of money laundering and insider trading

NA 0

violations Social Indicators

Incidents of conflict of interest violations NA 0

R&D investment RMB 10000 13652.40

Environmental Indicators

Proportion of R&D investment in operating income % 10.06

Scope 1 greenhouse gas emissions Tons of CO2 equivalent 1575 R&D

R&D technicians NA 301

Scope 2 greenhouse gas emissions Tons of CO2 equivalent 5765

Greenhouse gas Proportion of R&D personnel % 24.57

emissions

Total greenhouse gas emissions Tons of CO2 equivalent 7340

Total employee NA 1225

Tons of CO equivalent/

Greenhouse gas emission intensity 2 0.054

RMB 10000 Employee training input RMB 10000 50

Sulfur oxides Kg 4 Employee

Average training time per employee Hours

Exhaust emission 15.5

Nitrogen oxides Kg 450

Discrimination and harassment incidents NA 0

Domestic and commercial solid waste Tons 1028

Social benefits Investment in public welfare and charity RMB 10000 24.11

Non-hazardous

Industrial solid waste Tons 115

waste Total number of information security vulnerabilities NA 0

Information

Wastewater Cubic meters 398345 security Total number of customers and employees affected

NA

by violations 0

4 Upon evaluation the risk level for production line workers is deemed to be relatively low and as such coverage has not yet been extended to them.119 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report 120

Index of Topics

Primary topics Secondary topics Related chapters Primary topics Secondary topics Related chapters

Environmental

Manage risks and opportunities related to climate change Climate response Risk management

management

Environmental

Assess the adaptability of the Company's strategy business model

Climate response compliance Emergency Responsibility and safety

etc. to climate change

management

Transformation plans measures and progress to address climate- Environmental

Climate response Administrative penalties

related risks and opportunities management

Disclose information on greenhouse gas emissions in different

Climate response Use Climate response

scopes by category

Climate change tackling

Disclose information on greenhouse gas emissions by category Climate response Energy usage Clean energy Not disclosed

Environmental

Greenhouse gas emissions accounting method Climate response Saving target

management

Green production and

Greenhouse gas emission reduction practices Climate response Use

Usage of water operation

New technologies products and services that are conducive to resources Environmental

Climate response Saving target

reducing carbon emissions and achieving carbon neutrality management

Pollution discharge Waste management Goal plan Not disclosed

Sewage treatment Waste management Green production and Circular Economy Specific measures

operation

Environmental

Pollutant discharge Emission reduction targets Green production and

management Progress and effect operation

Impact on the group Not disclosed Corporate strategy Rural revitalization

Administrative penalties Waste management Rural revitalization Specific measures Rural revitalization

Amount of waste Waste management Achievement Rural revitalization

Waste disposal Processing Waste management Contributions to the Contribution Social contribution

society

Environmental

Emission reduction targets

management Strategic goals Innovative R&D

Exit Not involved Specific situation Innovative R&D

Innovation-driven

Protection measures within the region Not involved Research and development results Innovative R&D

Ecosystem and

Protection and restoration measures Not involved

biodiversity protection Innovation impact Innovative R&D

Biological genetic resources Not involved

Product life cycle impact Not involved121 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report 122

Primary topics Secondary topics Related chapters Primary topics Secondary topics Related chapters

Employee rights and

Field of work Not involved Employee recruitment

interests

Internal management Not involved Employees Occupational health and safety Responsibility and safety

Ethics of science and

technology

Violations Not involved Career development and training Employee development

Training and promotion Not involved Due diligence Due diligence progress Material Issue Analysis

Supply chain Communication with

Risk management Communication system

management Communication with stakeholders

Supply chain stakeholders

Supply chain security Safeguard measures Suggestion channel Corporate governance

management

Supply chain

Improvement measures Management system Business ethics

management

Supply chain Business ethics

Equal treatment of Unpaid amount management Risk assessment Supply chain

small and medium-sized Anti-Commercial Bribery

enterprises Supply chain

management

Specific situation and Anti-Corruption

management Training performance Business ethics

Management system Quality assurance

Event Business ethics

Quality certification Quality assurance

Management system Business ethics

Safety and quality of

Major accidents Quality assurance Anti-unfair competition

products and services Administrative penalties Business ethics

After-sales service Customer service

Accessibility Customer service

Digital intelligence

Management system

empowerment

Digital intelligence

Data security and Security incidents empowerment

customer privacy

protection Digital intelligence Customer privacy protection

empowerment

Digital intelligence

Leakage

empowerment123 Huabao Flavours & Fragrances 2024 Environmental Social and Governance (ESG) Report 124

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