Qizheng Tibetan Medicine Releases 2012 Annual Report and Social Responsibility Report

　　On April 19, Qizheng Tibetan Medicine released its “2012 Annual Report” and “2012 Corporate Social Responsibility Report” on the Shenzhen Stock Exchange. Last year, the company’s total operating revenue reached 934 million yuan, an increase of 18.38% year-on-year; its net profit for the full year amounted to 223 million yuan, up 9.81% from the previous year; net profit attributable to shareholders of the listed company was 190 million yuan, representing a growth of 11.4% over the same period last year; and the return on net assets stood at 14.82%, an increase of 0.67% compared to the previous year. These figures fully demonstrate Qizheng Tibetan Medicine’s strong competitiveness and its driving force within the industry.

　　In 2012, Qizheng Tibetan Medicine entered a pivotal year for deepening its “Great Tibetan Medicine, Great Health” strategy and also marked an important milestone in the company’s strategic expansion into the medicinal herb business. Amidst a complex economic environment characterized by continued economic downturn in Europe and the U.S. and ongoing reforms of China’s medical and healthcare system, all employees of the company, under the leadership of the management team, closely adhered to the guiding principle of “leading with the ‘Great Tibetan Medicine, Great Health’ strategy and strengthening internal capabilities through professional and rigorous management.” As a result, Qizheng Tibetan Medicine achieved steady growth in production and operations, with continuous improvements in key performance indicators such as assets, sales, and profits, thus realizing four consecutive years of stable development since the company’s IPO.

　　Along with the release of its 2012 annual report, the company also published its 2012 Corporate Social Responsibility Report. The report summarizes Qizheng Tibetan Medicine’s commitment to social responsibility under its core principles of “value first, industry leadership, and environmental friendliness,” and showcases typical examples and effective practices in the company’s economic, environmental, and social performance.

　　From its very inception, social responsibility has been naturally integrated into Qizheng Tibetan Medicine’s business decisions, corporate culture, and employee welfare. Rooted in the company’s steadfast commitment to integrity-based management, win-win cooperation, and the inheritance and innovation of tradition, social responsibility is a vital embodiment of the company’s core values. The company consistently emphasizes corporate social responsibility and the sustainable development of its business, helping it create long-term commercial value.

　　Over the past year, the company has focused on strengthening internal management and enhancing its external image. Internally, we have comprehensively advanced the construction of our internal control system, reinforced the audit and supervision functions, and improved management efficiency. We have continuously pursued innovation in areas such as marketing mechanisms, organizational management, R&D, product development, and production technology, while also bolstering awareness of safe production. While consistently pursuing innovation and steady growth, the company has been committed to raising industry standards and promoting the upgrading and value-added of the Tibetan medicine industry through multiple channels, striving to become a model modern Tibetan medicine enterprise characterized by sustainable resource utilization and environmentally friendly production processes. Externally, we remain fully committed to safeguarding the rights and interests of our suppliers, standardizing supplier cooperation, promoting improvements in the health of local community residents, actively supporting social welfare and charitable causes, and advocating for harmonious coexistence between economic development and environmental friendliness as well as ethnic integration in Tibetan regions. We are dedicated to becoming a leading enterprise that not only preserves and protects Tibetan culture but also promotes Tibetan medical education and low-cost healthcare services in pastoral areas—serving as a role model in social公益 endeavors.

　　In 2012, the company operated in compliance with regulations and paid taxes in accordance with the law, thereby greatly boosting the economic and social development of the region where it is located. In 2012, the company paid a total of 140 million yuan in various taxes and fees, including over 130 million yuan in taxes paid in Tibet, which strongly supported the growth of tax revenues in Tibet and made a positive contribution to the region’s economic development.

　　In safeguarding consumer health, the company has rigorously enhanced its pharmaceutical production and quality management systems in strict accordance with the requirements of the new GMP standards, ensuring that all pharmaceutical products meet the relevant quality specifications. In 2012, the company’s pill, tablet, and powder products successfully obtained certification under the new GMP standards. The company also strictly labels and provides detailed instructions for its products to ensure their safety. Furthermore, the company has established a comprehensive system for monitoring and reporting adverse drug reactions and has put in place a product recall mechanism. The company has obtained organic certifications from the United States and the European Union for 61 types of medicinal herbs—including Cordyceps sinensis, Codonopsis pilosula, Astragalus membranaceus, Angelica sinensis, and Acorus calamus—as well as for 9 types of edible fungi such as Ganoderma lucidum and wood ear mushrooms, and for 6 types of grains including highland barley.

　　In terms of employee care, the company fosters honest and respectful relationships among employees through respect, communication, dialogue, and open exchange. Managers are committed to driving positive change for employees by leveraging various management and operational activities to create value, enhance employee capabilities, and ensure both income security and professional recognition. In 2012, the company had a total of 1,370 employees, among whom ethnic minority employees accounted for 15.6% of the workforce. The company continuously optimizes its compensation structure and improves internal pay equity, resulting in an average salary increase that exceeds industry averages. The company provided specialized training to nearly 260 employees and offered 1,149 relevant business courses through its online academy. Additionally, the company supported the promotion of 44 employees through open competitive recruitment processes, including 28 promotions to managerial positions and 16 promotions to director-level positions.

　　Qizheng Tibetan Medicine is committed to inheriting and preserving Tibetan culture, and actively supports various social welfare initiatives. Since launching the “Hundred Tibetan Medical Clinics Project” in 2008, the company has cumulatively donated to 11 clinics, providing local residents with treatments that are “simple, convenient, effective, and affordable.” The company also founded the Gongbu Manlong Yutuo Tibetan Medical School to support the preservation and transmission of traditional Tibetan medical education. In response to the severe hailstorm, flash flood, and mudslide disaster that struck Min County, Gansu Province on May 10, the company donated 500,000 yuan to assist in post-disaster recovery and reconstruction efforts. Furthermore, the company actively responded to the call from the Pharmaceutical Industry Chamber of the All-China Federation of Industry and Commerce, donating medicines worth over 70,000 yuan to Shangri-La County, Diqing Prefecture, Yunnan Province, thereby providing much-needed medical assistance to local residents. Additionally, the company has contributed to social welfare projects such as the Guangcai Forest Planting Initiative in Dingxi, Gansu Province, and the road construction project in the northern mountainous region of Yuzhong, which connects multiple villages and households in Gansu Province. In 2012, the company’s total donations amounted to 4.2796 million yuan, supporting the implementation of 27 different projects.

　　In the future, the company will fully leverage its unique competitive advantages—namely, the distinctive medicinal herb and ingredient resources of the western plateau as well as the rich cultural heritage of Tibet—to become a leading, value-driven modern Tibetan medicine and health industry group. We will actively build a competitive edge in both the broader Tibetan medicine sector and the greater health business, fostering the development of a vibrant and sustainable industrial ecosystem that delivers greater value to all stakeholders.