Livzon Pharmaceutical Group Inc.

Physical Climate Adaptation Plan

Article 1  Purpose

This Plan establishes context-specific adaptation arrangements for physical climate risks. Adaptation measures shall correspond to specific locations, specific hazards and specific assets. The Plan anticipates adverse physical impacts that climate change may have on production and operations, applies engineering and non-engineering measures to prevent or reduce identified material damage, and captures operational opportunities such as water conservation, flood protection and reliable energy supply.

This Plan applies to the Group’s existing production operations and to production assets that are newly planned, under construction or newly placed in service. It is the management document through which the results of climate risk assessment are converted into adaptation actions. The Plan is consistent with the Group’s enterprise risk management system and with the climate governance, scenario analysis, physical-risk responses and site-level water assessments disclosed in the environmental, social and governance report. Material adaptation measures for existing activities may be implemented and completed in phases within five years. Relevant measures for new activities shall be incorporated at the design and construction stage and shall be in place at the time of commissioning.

Article 2  Governance

This Plan is overseen by the Board of Directors and the ESG Committee under the Board. Climate-related physical risks are integrated into the Group’s enterprise risk management and are identified, assessed, monitored and addressed together with other risk sources such as operations, compliance and the supply chain. The ESG Committee leads climate-change management, reports to the Board on a dedicated basis at least once a year, and oversees the identification, assessment, targets and responses relating to physical risks. The ESG Working Group coordinates implementation with the relevant business units.

Each relevant department shall report annually to the ESG Working Group of the Board Secretary’s Office at Group headquarters on the implementation of adaptation measures. The report shall cover the principal hazards at the site, engineering and non-engineering measures already implemented, outstanding items and arrangements for the following year. The Group shall compile an annual Climate Risk Management Report, which shall be reviewed by the ESG Working Group and submitted to the ESG Committee. The ESG Committee shall report regularly to the Board on the implementation of this Plan and make recommendations for the Board’s decision-making and oversight.

Article 3  General Requirements

The Group shall conduct context-specific assessments of physical risks including typhoons, floods, heavy rainfall, heatwaves, cold waves, drought, rising mean temperature, air pollution, high humidity and water scarcity, taking into account the region of each manufacturing site, process characteristics and dependence on water and electricity, and shall formulate adaptation measures corresponding to the assessment results. Assessments shall refer to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and shall combine the low-carbon scenario SSP1-2.6 and the high-carbon scenario SSP5-8.5 with short-term (0 to 3 years), medium-term (3 to 10 years) and long-term (10 to 30 years) time horizons. Impacts shall be graded as high, medium-high, medium, medium-low or low.

For physical risks assessed as material, both engineering and non-engineering measures shall be put in place, with responsible units, completion deadlines and review methods specified. Existing production operations shall follow Articles 4 to 7 of this Plan. New production assets shall follow Article 8. No adaptation arrangement may weaken medicinal product quality, safety, regulatory compliance or continuity of supply.

Article 4  Scope and Coverage

The scope of existing operations is consistent with the scope of the Group’s consolidated financial statements and covers all manufacturing sites within that boundary. All production operations included in the consolidated statements shall be included in the hazard identification and adaptation arrangements under this Plan. Non-production office premises are subject to the same emergency and environment, health and safety systems. Location-hazard scoring focuses on manufacturing sites.

Under the boundary above, this Plan covers all manufacturing sites in production for existing operations. For external reporting, coverage of existing operations may be described by reference to production operating revenue or the number of manufacturing sites within the consolidated reporting boundary. New operations mean plants, workshops, warehouses or major capacity projects that are planned, under construction or placed in service after the reporting period. If in a given year the Group has no new production assets planned, this shall be recorded as “no new assets planned” in the annual Climate Risk Management Report.

Article 5  Location and Hazard Identification

Physical hazards vary by location. A single set of countermeasures shall not be applied to all sites. Coastal and southern manufacturing sites, including those in Zhuhai, Fuzhou and Shanghai, are more exposed in the short term to typhoons, floods and heavy rainfall, which mainly affect warehouse roofs and walls, workshop inundation, moisture damage to raw materials and medicinal products, interruption of electricity and steam, and logistics disruption. Inland sites and areas affected by drought face greater exposure to drought, water shortage and high temperature, which mainly affect security of process water, cooling and refrigeration loads, heat stress on employees, and upstream supply of Chinese medicinal materials or agricultural raw materials. In the northwest and other dry or dust-affected regions, additional attention shall be paid to water-resource stability and the impact of air pollution on clean production.

Group-level chronic risks include rising mean temperature, air pollution, high humidity and water scarcity. The above hazards shall be listed by site, together with the assets or processes that may be affected, the expected time horizon and the response measures, to form a site-level register as an annex to the annual report.

Water-related physical risks shall be assessed at operating locations using the World Resources Institute Aqueduct tool or an equivalent method, covering dimensions such as water stress, drought, coastal flood and groundwater depletion, classified as low, medium-low, medium-high, high or extremely high, and used to prepare site-level management plans. Assessment results and improvement measures shall be reported to the ESG Committee. The 2025 assessment of manufacturing sites was as follows: low, zero sites; medium-low, three sites; medium-high, six sites; high, two sites; extremely high, four sites. Sites rated high or extremely high shall, in the same year, define priority measures for water conservation, backup water sources or emergency water supply.

The most significant quantified physical risks in 2025 were heavy rainfall, typhoons and floods. Potential financial impact before action was approximately RMB 25 million, mainly comprising damage to facilities and equipment and losses from production stoppages. Response costs were approximately RMB 4 million, mainly comprising preventive maintenance, emergency-material reserves and plant repairs. The expected time horizon is the short term, 0 to 3 years. The above figures are drawn from the 2025 Environmental, Social and Governance Report.

Article 6  Engineering Measures for Existing Operations

Engineering measures shall be configured to correspond to the hazards identified under Article 5, and shall be implemented on site by each production unit. Group-level statements of principle shall not substitute for site measures.

For typhoons, floods and heavy rainfall: complete inspections and necessary reinforcement of roofs, drainage, doors, windows and warehouses before extreme weather; stockpile sandbags, tarpaulins, drainage pumps and other protective materials; implement insurance and upgraded protection in high-risk areas; and organise facility maintenance after rainfall to avoid continued operation of damaged equipment.

For drought and water scarcity: install buffer tanks and emergency water supply; advance water reuse and water-saving equipment upgrades; safeguard purified-water systems and water-quality testing; and prepare production-curtailment or switchover arrangements for water-intensive processes. Sites rated high or extremely high by Aqueduct shall implement this paragraph as a priority.

For heatwaves, cold waves and rising mean temperature: implement, as needed, energy-efficiency upgrades of air-conditioning and ventilation, off-peak electricity use and backup energy arrangements; and re-validate storage and process parameters for temperature-sensitive medicinal products and biologics. For high humidity: install industrial dehumidification and moisture-proof warehousing to prevent damp damage to raw materials, packaging materials and finished products. For air pollution: implement air-purification upgrades as needed to protect clean areas and personnel.

Relevant reconstruction and expansion shall, where feasible, apply green-factory and resilient-building requirements, and treat drainage capacity, wind resistance, temperature and humidity control, and backup energy as items for acceptance of the works.

Article 7  Non-Engineering Measures for Existing Operations

The Group and each production unit shall formulate and implement extreme-weather emergency plans, define the responsibilities of the emergency office and each department, monitor meteorological warnings, specify arrangements for attendance, logistics and the reduction or suspension of outdoor work during events, and organise post-event loss review and resumption of production. Emergency plans shall state the dominant hazard of the site.

Supplier risk analysis shall be conducted. Safety stocks and transport-routing arrangements shall be established for critical raw materials to reduce logistics disruption caused by extreme weather. Heat-health protection for employees, emergency drills and training shall be conducted. Water-risk grading and site-level management plans shall be incorporated into day-to-day environmental management.

Implementation of adaptation measures shall be included by each unit in its annual report, submitted to the ESG Working Group of the Board Secretary’s Office at Group headquarters, and reviewed annually by the ESG Committee. The implementation timetable for existing operations is as follows. Material measures for short-term acute risks such as typhoons, floods, heavy rainfall, heatwaves and water shortage shall already be in operation, and shall be maintained, reinforced and reviewed within the five-year window from 2025 to 2029. For medium- and long-term chronic risks such as drought, warming, high humidity and air pollution that constitute material risks, equipment, process and water-saving projects shall be arranged in phases within the same five-year window. Other items shall be recorded in the risk register and tracked on an ongoing basis. “Long-term attention” shall not substitute for verifiable action.

Article 8  Adaptation Requirements for New Operations

Before approval of a new plant, workshop, warehouse or major capacity project, the responsible unit shall complete the following and keep written records: first, identify location hazards of the proposed site using the Group risk inventory and tools such as Aqueduct; second, test the site’s exposure to typhoons, floods, high temperature and water shortage under short-, medium- and long-term horizons and high- and low-emission scenarios; third, write engineering measures such as drainage, flood elevation, wind resistance, temperature and humidity control, water storage and reuse, and backup energy into design specifications and cost estimates; fourth, write non-engineering measures such as emergency plans, insurance and dual sourcing of suppliers into commissioning arrangements.

An asset for which the foregoing has not been completed shall not be treated as climate-adapted. The project approval unit may make adaptation screening a precondition of construction. Material adaptation measures for new operations shall be implemented at the design and construction stage and shall be in place at commissioning. Assessment shall not be deferred until after commissioning.

Article 9  Opportunities, Monitoring and Review

Adaptation work shall be advanced together with improvements in resource efficiency, energy substitution, infrastructure resilience, assessment of suppliers’ climate-response capacity, and photovoltaic or energy-storage projects that support reliable power supply during extreme weather. Projects that both reduce physical-risk exposure and reduce operating interruption shall be given priority in the annual improvement plan.

Environment- and climate-related indicators shall be included in the performance appraisal of relevant managers. This Plan shall be reviewed at least once a year, or upon a major extreme-weather event or a change in the portfolio of manufacturing sites. The review shall verify whether the site-level register has been updated, whether measures at sites with high or extremely high water risk are in place, and whether outstanding items within the five-year window have corrective deadlines. Matters not covered by this Plan shall be handled in accordance with applicable laws, regulations and normative documents and the Group’s environmental and occupational health and safety requirements.

Article 10  Miscellaneous

This Plan has been reviewed and approved by the ESG Committee under the Board of Directors. The ESG Committee reports regularly to the Board on the implementation of this Plan and provides recommendations for the Board’s decision-making and oversight.

The ESG Committee has full responsibility for implementing, overseeing and periodically reviewing this Plan as a whole. The ESG Committee is responsible for the interpretation and amendment of this Plan.

This Plan takes effect on the date of issuance.

Livzon Pharmaceutical Group Inc.

September 2026