Jilin Aodong: 2025 Annual Audit Report

Jilin Aodong Pharmaceutical Group Co., Ltd.

Audit report

Dehaoshenzi[2026]00001480

Beijing Dehao International Certified Public Accountants (Special General Partnership) Beijing Dehao International Certified Public Accountants (LimitedLiabilityPartnership)

Jilin Aodong Pharmaceutical Group Co., Ltd.

Audit reports and financial statements

(from January 1, 2025 to December 31, 2025)

Table of Contents Pages

1. Audit report 1-6

2. Audited financial statements

Consolidated balance sheet 1-2 Consolidated income statement 3 Consolidated cash flow statement 4 Consolidated statement of changes in shareholders' equity 5-6 Balance sheet of the parent company 7-8 Income statement of the parent company 9 Cash flow statement of the parent company 10 Statement of changes in shareholders' equity of the parent company 11-12 Notes to the financial statements 1-139

Audit report

Dehaoshenzi[2026]00001480

All shareholders of Jilin Aodong Pharmaceutical Group Co., Ltd.:

1. Audit opinions

We have audited the financial statements of Jilin Aodong Pharmaceutical Group Co., Ltd. (hereinafter referred to as Jilin Aodong), including the consolidated and parent company balance sheets on December 31, 2025, the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in shareholders' equity, and notes to relevant financial statements for 2025.

We believe that the attached financial statements have been prepared in accordance with the Accounting Standards for Business Enterprises in all material respects and fairly reflect the consolidated and parent company's financial position of Jilin Aodong as of December 31, 2025, as well as the consolidated and parent company's operating results and cash flows in 2025.

2. The basis for forming audit opinions

We performed the audit work in accordance with the Chinese Certified Public Accountants Auditing Standards. Our responsibilities under these standards are further described in the "CPA's Responsibilities for the Audit of Financial Statements" section of the auditor's report. In accordance with the "Independence Standards for Chinese Certified Public Accountants No. 1 - Requirements for Independence in Financial Statement Audit and Review Engagements" and the Chinese Code of Professional Ethics for Certified Public Accountants, we are independent from Jilin Aodong and have fulfilled other responsibilities in terms of professional ethics. In our audit, we followed the independence requirements for audits of public interest entities. We believe,

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The audit evidence we obtained is sufficient and appropriate, providing a basis for issuing an audit opinion.

3. Key audit matters

Key audit matters are matters that we, based on our professional judgment, consider to be most important in the audit of the current period's financial statements. The response to these matters is based on the audit of the financial statements as a whole and the formation of audit opinions. We do not express opinions on these matters individually.

We have determined that the following matters are key audit matters that need to be communicated in the audit report.

(1) Recognition of pharmaceutical sales revenue

1. Description of the matter

Jilin Aodong is mainly engaged in the production and sales of drugs. In 2025, the operating income from wholesale and retail of drugs and chain pharmacies was RMB 2,100,487,733.76, accounting for 89.95% of the operating income, a decrease of approximately 7.62% from the same period last year. Jilin Aodong is mainly engaged in the production and sales of pharmaceuticals. Since pharmaceutical sales revenue is one of Jilin Aodong's key performance indicators, there may be inherent risks of management manipulating revenue recognition in order to achieve specific goals or expectations. Therefore, we identified Jilin Aodong's pharmaceutical sales revenue recognition as a key audit matter.

2. Audit response

(1) Understand, evaluate and test the rationality and operational effectiveness of Jilin Aodong’s key internal control designs related to drug sales revenue recognition;

(2) Conduct interviews with management and select samples to examine sales contracts, identify contract terms and conditions related to the transfer of product control rights, and evaluate whether the timing of revenue recognition in Jilin Aodong complies with the provisions of the Accounting Standards for Business Enterprises;

(3) Select major customers to implement the confirmation procedure to confirm the sales volume of the current period and the balance of accounts receivable at the end of the period, implement replacement procedures for customers who have not responded to the letter, and verify the authenticity and accuracy of drug sales revenue;

(4) Select samples to perform income details testing, and check supporting documents such as sales contracts, invoices, sales outbound orders, logistics documents, receipt confirmation notes, and bank receipt receipts to evaluate

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Whether price-related revenue recognition complies with the company’s accounting policies for revenue recognition;

(5) Combined with the development of the industry to which Jilin Aodong belongs and the actual operating characteristics of the company, perform analytical review procedures to identify whether there are major or abnormal fluctuations and analyze the causes of fluctuations; (6) Perform cut-off testing on drug sales revenue before and after the balance sheet date to evaluate whether the revenue is recorded in the appropriate accounting period;

(7) Check whether the presentation of operating income in financial statements is appropriate.

(2) Recognition of long-term equity investment income calculated using the equity method

1. Description of the matter

Jilin Aodong's long-term equity investment income calculated by the equity method in 2025 was 2,556,313,157.21 yuan, accounting for 105.61% of the total profit for the year. Since the investment income of this period has a significant impact on the financial statements, we identified the confirmation of long-term equity investment income calculated by the equity method as a key audit matter.

2. Audit response

(1) Understand, evaluate and test the rationality of the design and operation effectiveness of Jilin Aodong’s key investment-related internal controls;

(2) For long-term equity investments accounted for using the equity method, obtain the basis for judgment that Jilin Aodong has a significant impact on the invested unit to evaluate the rationality of Jilin Aodong using the equity method for accounting;

(3) Obtain the annual financial statements of the invested unit that have been audited by certified public accountants, and review the management’s adjustments to the net profit and loss of the invested unit, including accounting policy adjustments, fair value adjustments at the time of investment and the offset of unrealized gains and losses from internal transactions;

(4) Recalculate the investment income that should be recognized under the equity method;

(5) Evaluate the independence and professional competence of the certified public accountants of important associates; (6) Communicate with the important component certified public accountants to understand the major matters identified during the audit of the invested unit, the audit process and the audit conclusions formed, etc., in order to judge

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Determine its impact on the financial statements of Jilin Aodong.

4. Other information

Jilin Aodong management is responsible for other information. Other information includes the information covered in Jilin Aodong's 2025 annual report, but does not include the financial statements and our auditor's report.

Our audit opinion on the financial statements does not cover other information, nor do we express any form of assurance conclusion on other information.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the audit or otherwise appears to be materially misstated.

If we determine, based on the work we have performed, that other information is materially misstated, we should report that fact. We have nothing to report in this regard.

5. Responsibility of management and those charged with governance for financial statements

The management of Jilin Aodong is responsible for preparing financial statements in accordance with the provisions of the Accounting Standards for Business Enterprises to achieve fair reflection, and to design, implement and maintain necessary internal controls so that the financial statements do not contain material misstatements due to fraud or errors.

When preparing financial statements, Jilin Aodong's management is responsible for assessing Jilin Aodong's ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless management plans to liquidate Jilin Aodong, terminate operations, or has no other realistic option. Those charged with governance are responsible for overseeing Jilin Aodong’s financial reporting process.

6. Responsibilities of certified public accountants for auditing financial statements

Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free of material misstatements due to fraud or error, and to issue an audit report containing an audit opinion. Reasonable assurance is a high level of assurance, but it does not guarantee that an audit performed in accordance with auditing standards will always detect a material misstatement when it exists. Misstatements may be caused by fraud or error, and if misstatements are reasonably expected individually or in aggregate, they may affect the users of financial statements in making decisions based on the financial statements.

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economic decisions, misstatements are generally considered material.

In the process of performing audit work in accordance with the auditing standards, we use professional judgment and maintain professional skepticism. At the same time, we also perform the following tasks:

(1) Identify and assess the risks of material misstatement of financial statements due to fraud or errors, design and implement audit procedures to respond to these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. Because fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls, the risk of failing to detect a material misstatement resulting from fraud is higher than the risk of failing to detect a material misstatement resulting from error.

(2) Understand the internal controls related to auditing to design appropriate audit procedures.

(3) Evaluate the appropriateness of the accounting policies adopted by the management and the reasonableness of the accounting estimates and related disclosures made.

(4) Draw conclusions on the appropriateness of management’s use of the going concern assumption. At the same time, based on the audit evidence obtained, a conclusion is drawn as to whether there are significant uncertainties in matters or conditions that may cause significant doubts about Jilin Aodong's ability to continue as a going concern. If we conclude that significant uncertainty exists, auditing standards require us to draw the attention of users of the report to the relevant disclosures in the financial statements in the audit report; if the disclosures are insufficient, we should issue a modified opinion. Our conclusions are based on information available as of the date of the auditor's report. However, future events or conditions may cause Jilin Aodong to cease to continue as a going concern.

(5) Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.

(6) Obtain sufficient and appropriate audit evidence on the financial information of Jilin Aodongzhong’s entities or business activities to express an opinion on the financial statements. We are responsible for directing, supervising and performing group audits and take full responsibility for our audit opinions.

We communicate with those charged with governance regarding the planned audit scope, timing and significant audit findings, including communicating the internal control deficiencies of concern that we identified during the audit.

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sink.

We also provide statements to those charged with governance that we have complied with ethical requirements related to independence and communicate with those charged with governance all relationships and other matters that may reasonably be considered to affect our independence, and related safeguards, if applicable.

From the matters communicated with those charged with governance, we determine which matters are most significant to the audit of the current period's financial statements and therefore constitute key audit matters. We describe these matters in our auditor's report unless laws or regulations prohibit public disclosure of the matter or, in rare circumstances, we determine that the matter should not be communicated in our auditor's report if the adverse consequences of communicating the matter in the auditor's report are reasonably expected to outweigh the benefits in the public interest.

Beijing Dehao International Accounting Firm (Special General Partnership) Chinese Certified Public Accountants:

(Project Partner) Zhao Huantong

Beijing, China Chinese Certified Public Accountant:

Qu Bo

April 16, 2026

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Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Jilin Aodong Pharmaceutical Group Co., Ltd.

Notes to the 2025 Financial Statements

1. Basic information of the company

(1) Company profile

Jilin Aodong Pharmaceutical Group Co., Ltd. (hereinafter referred to as the "Company" or "the Company") was approved by the Economic Structural Reform Commission of Jilin Province in March 1993 with the Jilin Stock Approval (1993) No. 31 document, and was jointly established by Yanbian Aodong Group Company, Jilin Provincial Trust and Investment Company, and Jilin Light Industry Co., Ltd. to establish Yanbian Aodong Pharmaceutical (Group) Co., Ltd. The company's A shares were officially listed for trading on the Shenzhen Stock Exchange on October 28, 1996. The company was renamed Jilin Aodong Pharmaceutical Group Co., Ltd. in 1998. The largest shareholder of the company is Dunhua Jincheng Industrial Co., Ltd., and the actual controllers of the company are Mr. Li Xiulin, Dunhua Jinyuan Investment Co., Ltd. and 4 Jincheng Company shareholders. The company's business license unified social credit code: 91222400243805786K. The industry it belongs to is pharmaceutical manufacturing.

As of December 31, 2025, the company's registered capital was RMB 1,195,895,387. The business scope is: planting and breeding, commerce (except for state special control and franchise); machinery repair and warehousing; import of raw and auxiliary materials, mechanical equipment, instruments, and spare parts required for the enterprise's production and scientific research (except for the 12 imported goods approved by the state); pharmaceutical industry, pharmaceutical commerce, pharmaceutical scientific research and development; car rental services; and self-owned real estate operations. (Projects that require approval according to law can only carry out business activities after approval from relevant departments).

Company registration and headquarters office address: No. 2158 Aodong Street, Dunhua City, Jilin Province.

The company's financial report was approved by the resolution of the 23rd meeting of the company's 11th board of directors on April 16, 2026, and the disclosure date is April 18, 2026.

(2) Scope of consolidated financial statements

As of December 31, 2025, the subsidiaries within the scope of the company's consolidated financial statements are as follows:

Subsidiary name

Jilin Aodong Yanbian Pharmaceutical Co., Ltd.

Jilin Aodong Taonan Pharmaceutical Co., Ltd.

Jilin Aodong Pharmaceutical Group Yanji Co., Ltd.

Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd.

Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

Jilin Aodong Pharmaceutical Co., Ltd.

Jilin Aodong Deer Industry Co., Ltd.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Subsidiary name Jilin Aodong Ruifeng Technology Co., Ltd.

Yanbian Highway Construction Co., Ltd.

Jilin Aodong Enzyme Technology Co., Ltd. Jilin Aodong Health Technology Co., Ltd.

Jilin Aodong Shihang Pharmaceutical Co., Ltd. Jilin Aodong Linyuan Pharmaceutical Marketing Co., Ltd. Jilin Aodong Pharmaceutical Technology Co., Ltd.

Jilin Aodong Biotechnology Co., Ltd. Jilin Zhengrong Pharmaceutical Development Co., Ltd. Jilin Aodong Industrial Park Public Asset Management Co., Ltd. Aodong International (Hong Kong) Industrial Co., Ltd. Jilin Aodong Pharmacy Chain Co., Ltd. Jilin Aodong Innovative Pharmaceutical Technology Co., Ltd. Beijing Yingwei Qixin Information Consulting Co., Ltd. Fushun Aodong Pharmacy Chain Co., Ltd. Aodong Pharmacy Chain (Yanbian Prefecture) Co., Ltd. Jilin Aodong Pharmacy Pharmaceutical Co., Ltd. Dunhua Hongshixiang Renhe Crops Co., Ltd. Jilin Aodong Medicinal Seed Industry Technology Co., Ltd. Anguo Aodong Shihang Pharmaceutical Co., Ltd.

Bozhou Aodong Shihang Pharmaceutical Co., Ltd.

Dingxi Aodong Shihang Pharmaceutical Co., Ltd.

Aodong Pharmaceutical (Anhui) Co., Ltd. Hangzhou Aodong Interactive Media Co., Ltd.

Anhui Aodong Pharmaceutical Co., Ltd.

For details on the scope of the consolidated financial statements for this period and its changes, please refer to "7. Changes in the scope of consolidation" and "8. Equity in other entities" of this note.

2. Basis for preparation of financial statements

(1) Basis for compilation

The company is based on going concern, based on actual transactions and events, in accordance with the "Accounting Standards for Business Enterprises - Basic Standards" promulgated by the Ministry of Finance and various specific accounting standards, the Application Guidelines for Accounting Standards for Business Enterprises, Interpretations of Accounting Standards for Business Enterprises and other relevant regulations (hereinafter collectively referred to as "Accounting Standards for Business Enterprises"), and the China Securities Regulatory Commission Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Financial statements will be prepared in accordance with the disclosure provisions of "Information Disclosure and Preparation Rules for Companies that Offer Securities to the Public No. 15 - General Provisions on Financial Reports".

(2) Going concern

There are no major problems with the company's ability to continue operating in the 12 months from the end of the reporting period.

3. Important accounting policies and accounting estimates

Note: For details of the specific accounting policies and accounting estimates formulated by the Company based on the actual production and operation characteristics and in accordance with the relevant accounting standards for enterprises, please refer to Note 3. (11) Financial Instruments, 3. (22) Fixed Assets, 3.

(25) Biological assets, 3. (26) Intangible assets, 3. (35) Income.

(1) Statement on compliance with accounting standards for enterprises

The financial statements prepared by the company comply with the requirements of the Accounting Standards for Business Enterprises and truly and completely reflect the company's financial status, operating results, cash flow and other relevant information.

(2) Accounting period

A fiscal year runs from January 1 to December 31 of the Gregorian calendar.

(3) Business cycle

The company's operating cycle is 12 months.

(4) Accounting standard currency

RMB is the currency of the main economic environment in which the Company and its domestic subsidiaries operate. The Company and its domestic subsidiaries use RMB as the functional currency for accounting. The Company's overseas subsidiaries determine their recording currency based on the currency of the main economic environment in which they operate. The currency used by the Company in preparing these financial statements is RMB.

(5) Determination method and selection basis of materiality standards

1. The importance of financial statement items

The company determines the importance of financial statement items based on the principle of whether it affects the economic decisions of users of financial statements, and considers both nature and amount. The importance of the amount of items in the financial statements is based on the relevant items accounting for 5% of a certain proportion of total assets, total liabilities, total owners' equity, operating income, and net profit; the importance of the nature of the items in the financial statements is based on whether it is a daily operating activity, whether it causes changes in profits and losses, whether it affects regulatory indicators, and other factors that have a greater impact on the financial status and operating results.

2. The importance of detailed items in the notes to financial statement items

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

The company determines the importance of the detailed items in the notes to the financial statement items. Based on the importance of the items in the financial statements, the specific items account for a certain proportion of the item, or combined with the amount, while taking into account the nature of the specific items. Certain items are not material to the financial statements but may be material to the notes and still require separate disclosure in the notes. The relevant materiality standards for the notes to financial statement items are:

Project Materiality Criteria

Important individual accounts receivable with provision for bad debts whose ending balance exceeds 10 million yuan

Important prepayments aged more than 1 year and ending balance exceeding RMB 5 million

Important construction projects under construction with ending balance exceeding RMB 10 million

Important capitalized R&D projects with ending balances exceeding RMB 10 million

Important accounts payable and other payables aged more than 1 year with a closing balance of more than 5 million yuan

One of the total assets, operating income or total profits of subsidiaries (or the absolute value of losses of important non-wholly owned subsidiaries) or both account for more than 5% of the corresponding items in the consolidated financial statements.

Important debt restructuring with items expected to affect the consolidated financial statements amounting to more than RMB 5 million

yuan debt restructuring

Significant contingencies expected to affect the consolidated financial statements with an amount exceeding 1,000

10,000 yuan contingencies

Joint ventures or associates whose book value accounts for a significant amount of long-term equity investments in the consolidated financial statements

More than 5% of the total

(6) Accounting treatment methods for business combinations under the same control and those not under the same control

Business merger under common control: The assets and liabilities acquired by the company in the business merger are measured according to the book value of the assets and liabilities of the merged party on the merger date (including the goodwill formed by the acquisition of the merged party by the ultimate controlling party) in the consolidated financial statements of the ultimate controlling party. The difference between the book value of the net assets acquired in the merger and the book value of the merger consideration paid (or the total face value of the shares issued) is adjusted to the equity premium in the capital reserve. If the equity premium in the capital reserve is insufficient to offset it, the retained earnings are adjusted.

Business merger not under the same control: The assets paid and liabilities incurred or assumed by the company as consideration for the business merger are measured at fair value on the acquisition date, and the difference between the fair value and its book value is included in the current profit and loss. The Company recognizes the difference between the merger cost and the fair value share of the acquiree's identifiable net assets obtained in the merger as goodwill; the difference between the merger cost and the fair value share of the acquiree's identifiable net assets obtained in the merger shall be included in the current profit and loss after review.

Intermediary fees such as auditing, legal services, evaluation consulting, and other directly related expenses incurred for business mergers are included in the current profits and losses when incurred; transaction costs for the issuance of equity securities for business mergers are offset against equity.

(7) Judgment standards for control and preparation methods of consolidated financial statements

1. Judgment criteria for control

The scope of consolidation of consolidated financial statements is determined based on control. The investee Jilin Aodong Pharmaceutical Group Co., Ltd. has the following three elements:

2025

Notes to Financial Statements

An investment unit is deemed to have control over it: it has power over the invested unit, enjoys variable returns due to participation in relevant activities of the invested unit, and has the ability to use its power over the invested unit to affect the amount of returns.

2. Scope of consolidation

The scope of the company's consolidated financial statements is determined on the basis of control, and all subsidiaries (including divisible parts of investees controlled by the company) are included in the consolidated financial statements.

3. Merger procedure

The company prepares consolidated financial statements based on its own and its subsidiaries' financial statements and other relevant information. The company prepares consolidated financial statements, treating the entire enterprise group as an accounting entity, and reflecting the overall financial status, operating results and cash flow of the enterprise group in accordance with the recognition, measurement and presentation requirements of relevant accounting standards for enterprises and in accordance with unified accounting policies.

The accounting policies and accounting periods adopted by all subsidiaries included in the scope of the consolidated financial statements are consistent with the Company's. If the accounting policies and accounting periods adopted by the subsidiaries are inconsistent with the Company's, necessary adjustments shall be made in accordance with the Company's accounting policies and accounting periods when preparing consolidated financial statements. For subsidiaries acquired through business combinations not under common control, their financial statements will be adjusted based on the fair value of the identifiable net assets on the date of acquisition. For a subsidiary acquired through a business combination under common control, its financial statements will be adjusted based on the book value of its assets and liabilities (including the goodwill formed by the ultimate controller's acquisition of the subsidiary) in the financial statements of the ultimate controller.

The owner's equity of subsidiaries, current net profit and loss and current comprehensive income belonging to minority shareholders are presented separately under the owner's equity item in the consolidated balance sheet, the net profit item and the total comprehensive income item in the consolidated income statement. If the current losses shared by the minority shareholders of a subsidiary exceed the minority shareholders' share of the subsidiary's opening owner's equity, the balance is offset against the minority shareholders' equity.

(1) Add subsidiaries or businesses

During the reporting period, if a subsidiary or business is added due to a business merger under the same control, the opening balance of the consolidated balance sheet will be adjusted; the income, expenses, and profits from the beginning of the current period to the end of the reporting period of the subsidiary or business combination will be included in the consolidated income statement; the cash flow of the subsidiary or business combination from the beginning of the current period to the end of the reporting period will be included in the consolidated cash flow statement, and relevant items in the comparative statement will be adjusted at the same time. The post-merger reporting entity will be deemed to have existed from the time when the ultimate controlling party began to control.

If it is possible to exercise control over an investee under the same control due to additional investment or other reasons, the parties involved in the merger will be deemed to have existed in their current state when the final controlling party began to control and adjustments will be made. For equity investments held before obtaining control of the merged party, relevant profits and losses, other comprehensive income and other changes in net assets have been recognized between the date of acquisition of the original equity and the date when the merging party and the merged party are under the same control, whichever is later, to the date of merger, and shall be offset against the opening retained earnings or current profits and losses during the comparative statement period respectively.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

During the reporting period, if a subsidiary or business is added due to a business combination not under common control, the opening balance of the consolidated balance sheet will not be adjusted; the income, expenses and profits of the subsidiary or business from the date of acquisition to the end of the reporting period will be included in the consolidated income statement; the cash flow of the subsidiary or business from the date of acquisition to the end of the reporting period will be included in the consolidated cash flow statement.

If it is able to exercise control over an investee that is not under the same control due to additional investment or other reasons, the Company will remeasure the equity of the purchased party held before the acquisition date based on the fair value of the equity on the acquisition date, and the difference between the fair value and its book value will be included in the investment income of the current period. If the equity of the purchased party held before the purchase date involves other comprehensive income under equity method accounting and other changes in owner's equity other than net profit and loss, other comprehensive income and profit distribution, the related other comprehensive income and changes in other owner's equity will be converted into investment income for the current period on the purchase date, except for other comprehensive income arising from the investee's remeasurement of the net liabilities or changes in net assets of the defined benefit plan.

(2) Disposal of subsidiaries or businesses

①General treatment methods

During the reporting period, if the company disposes of a subsidiary or business, the income, expenses and profits of the subsidiary or business from the beginning of the period to the date of disposal will be included in the consolidated income statement; the cash flow of the subsidiary or business from the beginning of the period to the date of disposal will be included in the consolidated cash flow statement.

When the company loses control over the investee due to the disposal of part of the equity investment or other reasons, the company will remeasure the remaining equity investment after the disposal according to its fair value on the date of loss of control. The difference between the sum of the consideration obtained for disposing of the equity and the fair value of the remaining equity, minus the sum of the share of the original subsidiary's net assets calculated continuously from the date of purchase or merger based on the original shareholding ratio and the sum of goodwill, shall be included in the investment income in the period when control is lost. Other comprehensive income related to the equity investment in the original subsidiary or other changes in owner's equity other than net profit and loss, other comprehensive income and profit distribution will be converted into investment income for the current period when control is lost, except for other comprehensive income arising from the investee's remeasurement of the net liabilities or changes in net assets of the defined benefit plan.

② Disposal of subsidiaries step by step

If the equity investment in a subsidiary is disposed of step by step through multiple transactions until the control is lost, the terms, conditions and economic impact of each transaction to dispose of the equity investment in the subsidiary meet one or more of the following circumstances, which usually indicates that multiple transactions should be accounted for as a package deal:

A. These transactions were entered into at the same time or after taking into account mutual influence;

B. Only these transactions as a whole can achieve a complete business result;

C. The occurrence of one transaction depends on the occurrence of at least one other transaction;

D. A transaction is uneconomical when viewed alone, but is economical when considered together with other transactions.

If the various transactions involving the disposal of equity investments in subsidiaries until the loss of control belong to a package transaction, the company Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Each transaction is accounted for as a transaction that disposes of a subsidiary and loses control; however, the difference between the price of each disposal and the share of the net assets of the subsidiary corresponding to the disposal investment before the loss of control is recognized as other comprehensive income in the consolidated financial statements, and is transferred to the profit and loss of the current period when control is lost.

If the various transactions involving the disposal of equity investments in subsidiaries until the loss of control do not belong to a package deal, before the loss of control, accounting treatment will be carried out according to the relevant policies for partial disposal of equity investments in subsidiaries without losing control; when control is lost, accounting treatment will be carried out according to the general treatment method for disposal of subsidiaries.

(3) Purchase minority shares in subsidiaries

The difference between the company's newly acquired long-term equity investment due to the purchase of minority shares and the share of the subsidiary's net assets calculated continuously from the purchase date (or merger date) calculated based on the new shareholding ratio, shall be adjusted to the equity premium in the capital reserve in the consolidated balance sheet. If the equity premium in the capital reserve is insufficient to offset, the retained earnings shall be adjusted.

(4) Partially dispose of equity investments in subsidiaries without losing control

The difference between the disposal price obtained from the partial disposal of the long-term equity investment in the subsidiary without losing control and the share of the subsidiary's net assets calculated continuously from the date of purchase or merger corresponding to the disposal of the long-term equity investment shall be adjusted to the equity premium in the capital reserve in the consolidated balance sheet. If the equity premium in the capital reserve is insufficient to offset, the retained earnings shall be adjusted.

(8) Classification and accounting treatment of joint arrangements

Joint arrangements are divided into joint operations and joint ventures.

When the company is a party to a joint venture arrangement, enjoys the relevant assets of the arrangement and assumes the relevant liabilities of the arrangement, it is a joint operation.

The company confirms the following items related to the interest share in joint operations, and performs accounting treatments in accordance with the relevant accounting standards for enterprises:

(1) Recognize the assets held solely by the company, and recognize the assets held jointly according to the company's share; (2) Recognize the liabilities borne by the company alone, and recognize the liabilities jointly borne according to the company's share; (3) Recognize the income generated from the sale of the company's share of joint operating output;

(4) Recognize the income generated by the joint operation from the sale of output according to the company’s share;

(5) Recognize the expenses incurred individually, and recognize the expenses incurred by joint operations based on the company’s share. The Company’s accounting policies for investments in joint ventures are set out in Note “3. (20) Long-term Equity Investment” in this note.

(9) Determination standards for cash and cash equivalents

When preparing the cash flow statement, the company's cash on hand and deposits that can be used for payment at any time are recognized as cash. Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Investments that meet the four conditions of short term (due within three months from the date of purchase), strong liquidity, easy conversion into known cash, and small risk of value changes are determined as cash equivalents.

(10) Foreign currency business and foreign currency statement conversion

1. Foreign currency business

For foreign currency business, the spot exchange rate on the date of transaction is used as the conversion exchange rate to convert the foreign currency amount into RMB for accounting. The balance of foreign currency monetary items on the balance sheet date is converted at the spot exchange rate on the balance sheet date. The resulting exchange differences, except for the exchange differences arising from special foreign currency borrowings related to the acquisition and construction of assets that meet capitalization conditions, are treated in accordance with the principle of capitalization of borrowing costs, and are included in the current profit and loss.

2. Conversion of foreign currency financial statements

Assets and liability items in the balance sheet are translated using the spot exchange rate on the balance sheet date; owners' equity items, except for "undistributed profits" items, are translated using the spot exchange rate at the time of occurrence. Income and expense items in the income statement are translated using the spot exchange rate on the date of transaction.

When disposing of an overseas operation, the translation difference of the foreign currency financial statements related to the overseas operation will be transferred from the owner's equity items to the current profit and loss of the disposal.

(11) Financial instruments

A financial instrument is a contract that forms a financial asset of one party and a financial liability or equity instrument of another party.

1. Recognition and derecognition of financial instruments

The Company recognizes a financial asset or financial liability when it becomes a party to a financial instrument contract.

Financial assets shall be derecognized if they meet one of the following conditions:

(1) The contractual right to receive cash flows from the financial asset terminates;

(2) The financial asset has been transferred, and the transfer meets the provisions of "Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets" regarding the derecognition of financial assets.

If the current obligation of a financial liability (or part thereof) has been discharged, the enterprise shall terminate the recognition of the financial liability (or part thereof).

If the company (borrower) and the lender sign an agreement to replace the original financial liability by assuming a new financial liability, and the contract terms of the new financial liability are substantially different from the original financial liability, the company shall terminate the recognition of the original financial liability and recognize a new financial liability at the same time.

If an enterprise makes substantial modifications to the contract terms of the original financial liability (or part thereof), it shall terminate the recognition of the original financial liability and recognize a new financial liability in accordance with the modified terms. If a financial liability (or part thereof) is derecognised, the difference between its book value and the consideration paid (including non-cash assets transferred out or liabilities assumed) shall be included in the current profit and loss.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

When financial assets are bought and sold in a regular manner, accounting recognition and derecognition will be carried out based on the transaction date.

2. Classification and measurement of financial assets

Upon initial recognition, the Company classifies financial assets into the following three categories based on the business model for managing financial assets and the contractual cash flow characteristics of financial assets: ① Financial assets measured at amortized cost; ② Financial assets measured at fair value with changes included in other comprehensive income; ③ Financial assets measured at fair value with changes included in current profits and losses.

(1) Financial assets measured at amortized cost

If the company meets the following conditions at the same time, the financial assets shall be classified as financial assets measured at amortized cost:

① The enterprise’s business model for managing the financial assets is to collect contractual cash flows as its goal;

②The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of principal and interest based on the outstanding principal amount.

After initial recognition, such financial assets are measured at amortized cost using the effective interest rate method. Gains or losses arising from financial assets that are measured at amortized cost and are not part of any hedging relationship are included in the current profit and loss when derecognized, reclassified, amortized according to the effective interest method, or impairment is recognized.

(2) Financial assets measured at fair value with changes included in other comprehensive income

If the company meets the following conditions at the same time, the financial assets shall be classified as financial assets measured at fair value with changes included in other comprehensive income:

① The enterprise’s business model for managing the financial assets aims at both collecting contractual cash flows and selling the financial assets.

②The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of principal and interest based on the outstanding principal amount.

For investments in non-trading equity instruments, the Company may irrevocably designate them as financial assets at fair value through other comprehensive income upon initial recognition.

Debt investments measured at fair value through other comprehensive income

After initial recognition, such financial assets are subsequently measured at fair value. Interest, impairment losses or gains and exchange gains and losses calculated using the actual interest rate method are included in the current profit and loss; other gains or losses formed by the fair value of debt investments measured at fair value and changes included in other comprehensive income and the book value at the actual interest rate are included in other comprehensive income. When derecognition is terminated, the accumulated gains or losses previously included in other comprehensive income will be transferred out of other comprehensive income and included in the current profit and loss.

Equity instrument investments measured at fair value through other comprehensive income

After initial recognition, such financial assets are subsequently measured at fair value. Dividend income is included in profit or loss, and other gains or losses are included in other comprehensive income. When derecognised, Jilin Aodong Pharmaceutical Group Co., Ltd. that was previously included in other comprehensive income

2025

Notes to Financial Statements

Accumulated gains or losses are transferred out of other comprehensive income and included in retained earnings.

(3) Financial assets measured at fair value and changes included in current profits and losses

Except for the above-mentioned financial assets measured at amortized cost and at fair value with changes included in other comprehensive income, the Company classifies all remaining financial assets as financial assets measured at fair value with changes included in current profits and losses. At the time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Company irrevocably designates some financial assets that should have been measured at amortized cost or at fair value through other comprehensive income as financial assets at fair value through profit or loss for the current period. After initial recognition, such financial assets are subsequently measured at fair value, and the resulting gains or losses (including interest and dividend income) are included in the current profits and losses, unless the financial assets are part of a hedging relationship.

3. Classification and subsequent measurement of financial liabilities

The Company classifies financial liabilities as:

(1) Financial liabilities measured at fair value and changes included in current profits and losses

This type of financial liabilities includes trading financial liabilities (including derivatives that are financial liabilities) and financial liabilities designated as measured at fair value with changes included in current profits and losses. At the time of initial recognition, if the accounting mismatch can be eliminated or significantly reduced, or in accordance with the company's risk management or investment strategies stated in formal written documents, the financial liability portfolio or the financial assets and financial liability portfolio will be managed and evaluated on the basis of fair value, and reported to key management personnel within the company on this basis. , the company can irrevocably designate financial liabilities as financial liabilities measured at fair value and whose changes are included in current profits and losses. After initial recognition, such financial liabilities are subsequently measured at fair value. Except for hedging accounting, gains or losses (including interest expenses) arising from changes in fair value are included in current profits and losses.

(2) Financial liabilities measured at amortized cost

Other financial liabilities adopt the actual interest rate method and are subsequently measured at amortized cost. Gains or losses arising from derecognition or amortization are included in the current profits and losses.

4. The distinction between financial liabilities and equity instruments

(1) Financial liabilities refer to liabilities that meet one of the following conditions:

①Contractual obligation to deliver cash or other financial assets to other parties.

② Contractual obligations to exchange financial assets or financial liabilities with other parties under potentially adverse conditions.

③ Non-derivative contracts that must or can be settled with the enterprise's own equity instruments in the future, and the enterprise will deliver a variable number of its own equity instruments according to the contract.

④ Derivative contracts that must or can be settled with the enterprise's own equity instruments in the future, except for derivative contracts that exchange a fixed number of its own equity instruments for a fixed amount of cash or other financial assets. Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(2) Equity instruments refer to contracts that can prove ownership of the remaining equity in the assets of an enterprise after deducting all liabilities. If a financial instrument issued by an enterprise meets the following conditions at the same time, it meets the definition of an equity instrument, and the financial instrument shall be classified as an equity instrument:

① The financial instrument shall not include contractual obligations to deliver cash or other financial assets to other parties, or to exchange financial assets or financial liabilities with other parties under potentially adverse conditions;

②The financial instrument must or can be settled with the enterprise's own equity instruments in the future. If it is a non-derivative instrument, the financial instrument shall not include the contractual obligation to deliver a variable number of its own equity instruments for settlement; if it is a derivative instrument, the enterprise can only settle the financial instrument by exchanging a fixed number of its own equity instruments for a fixed amount of cash or other financial assets.

5. Fair value of financial instruments

Fair value refers to the price that can be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

The Company measures relevant assets or liabilities at fair value and assumes that an orderly transaction to sell assets or transfer liabilities is conducted in the main market for the relevant assets or liabilities; if there is no main market, the Company assumes that the transaction is conducted in the most favorable market for the relevant assets or liabilities. The main market (or the most advantageous market) should be the trading market that the enterprise can enter on the measurement date. The Company uses assumptions used by market participants to maximize their economic interests when pricing the asset or liability. For financial assets or financial liabilities that have an active market, the Company determines their fair value using quotes in the active market. If there is no active market for a financial instrument, the Company uses valuation techniques to determine its fair value. When measuring non-financial assets at fair value, the ability of market participants to use the asset for its best purpose to generate economic benefits is considered, or the ability to sell the asset to other market participants who can use it for its best purpose to generate economic benefits.

At each balance sheet date, the Company reassesses the assets and liabilities recognized in the financial statements that continue to be measured at fair value to determine whether there is a transition between fair value measurement levels.

6. Impairment of financial assets

(1) Scope of expected credit losses

Based on expected credit losses, the Company conducts impairment accounting and recognizes bad debt provisions for financial assets measured at amortized cost (including receivables, including notes receivable and accounts receivable), receivable financing, lease receivables, and other receivables.

(2) Method for determining expected credit losses

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Based on expected credit losses, the Company conducts impairment accounting and recognizes loss provisions for financial assets measured at amortized cost (including receivables), financial assets classified as measured at fair value with changes included in other comprehensive income (including receivables financing), lease receivables, and long-term receivables.

The Company evaluates on each balance sheet date whether the credit risk of relevant financial instruments has increased significantly since initial recognition, divides the process of credit impairment of financial instruments into three stages, and conducts different accounting treatments for the impairment of financial instruments at different stages:

① In the first stage, if the credit risk of a financial instrument has not increased significantly since the initial recognition, the company shall

Loss provisions are measured based on the expected credit losses of the financial instrument in the next 12 months, and interest income is calculated based on its book balance (that is, before deducting impairment provisions) and the actual interest rate; on the balance sheet date, if the company determines that the financial instrument has only low credit risk, the company directly makes the assumption that the credit risk of the instrument has not increased significantly since the initial recognition.

② In the second stage, if the credit risk of the financial instrument has increased significantly since the initial recognition but no credit impairment has occurred,

The company measures loss provisions based on the expected credit losses throughout the entire duration of the financial instrument, and calculates interest income based on its book balance and actual interest rate;

③ In the third stage, if credit impairment occurs after initial recognition, the company measures the loss provision based on the expected credit losses throughout the entire duration of the financial instrument, and calculates interest income based on its amortized cost (book balance minus accrued impairment provisions) and the actual interest rate.

A. Method of measuring loss provisions for financial instruments with lower credit risk

For financial instruments with low credit risk on the balance sheet date, the company can directly make the assumption that the credit risk of the instrument has not increased significantly since the initial recognition without comparing the credit risk with the initial recognition.

If the default risk of a financial instrument is low, the debtor has a strong ability to fulfill its contractual cash flow obligations in the short term, and even if there are adverse changes in the economic situation and operating environment in the longer term, it may not necessarily reduce the borrower's ability to fulfill its contractual cash flow obligations, the financial instrument is considered to have lower credit risk.

B. Methods of measuring loss provisions for notes receivable and accounts receivable financing

The company's notes receivable and accounts receivable financing are divided into two categories according to the risk level of the acceptor: one is risk-free silver Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

bank acceptance bill portfolio; the other is commercial acceptance bill. For bank acceptance bills where the issuer has a high credit rating, has no history of bill default, has extremely low credit loss risk, and has a strong ability to fulfill its contractual cash flow obligations in the short term, bad debt provisions should be measured with reference to historical credit loss experience, current conditions, and expectations for future economic conditions; for commercial acceptances For bills of exchange, the combination is determined based on the credit risk of the acceptor, endorser, drawer and other debtors; for notes receivable with provision for bad debts on an individual basis, provision for bad debts is made based on the difference between the present value of future cash flow and its book value, and for bills receivable with provision for bad debts based on aging combinations, expected credit impairment losses are made based on the aging analysis method.

The first category has a higher credit rating. Taking into account the historical default rate of zero, the expected credit loss rate for bank acceptance bills receivable is determined to be zero; the second category accrues loss provisions based on the expected credit loss rate during the entire duration before the maturity date, and the expected credit loss rate is determined with reference to the expected credit loss rate in the accounts receivable aging portfolio.

C. Method of measuring loss provision for accounts receivable and lease receivables

The company adopts a simplified method for receivables formed by transactions regulated by "Accounting Standards for Business Enterprises No. 14 - Revenue" (whether or not it contains a significant financing component), as well as lease receivables regulated by "Accounting Standards for Business Enterprises No. 21 - Lease", that is, the loss provision is always measured based on expected credit losses throughout the duration. Depending on the nature of the financial instrument, the Company evaluates whether the credit risk has increased significantly on the basis of a single financial asset or a combination of financial assets. To evaluate the credit risk of financial assets with significantly different credit risks individually, the expected credit loss shall be determined based on the difference between the carrying amount of the receivable and the present value of the cash flow expected to be received, such as: receivables for which there are obvious signs that the debtor is likely to be unable to fulfill its repayment obligations, etc. In addition to financial assets for individual assessment of credit risk, the Company divides financial assets into different groups based on the same risk characteristics, and assesses credit risk on a combination basis. The basis for determining the combination is as follows and the accrual method is as follows:

Item Basis for determining combination Provision method

Accounts receivable portfolio Aging analysis portfolio Aging analysis method

Method for determining the aging of accounts receivable: The company starts to calculate the age when it initially recognizes accounts receivable and meets the revenue recognition conditions. The actual aging period is from the time of initial recognition to the balance sheet date.

For accounts receivable divided into portfolios, the company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, to prepare the aging of accounts receivable and compare it with the expected credit loss rate for the entire duration Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

table to calculate expected credit losses.

The expected credit loss rate of the aging analysis portfolio is as follows:

Aging Expected credit loss rate of accounts receivable (%)

Within one year 5.00

One to two years 10.00

Two to three years 20.00

Three to four years 30.00

Four to five years 80.00

More than five years 100.00

If there is objective evidence that a certain receivable or lease receivable has been credit-impaired, the company will make individual loss provisions for the receivable or lease receivable and recognize expected credit losses.

D. Methods of measuring loss provisions for other financial assets

For financial assets other than the above, such as: debt investments, other debt investments, other receivables, long-term receivables other than lease receivables, etc., the company measures loss provisions in accordance with the general method, that is, the "three-stage" model.

When measuring credit impairment on financial instruments, the Company considers the following factors when assessing whether credit risk has increased significantly:

① Adverse changes in business, financial or external economic conditions that are expected to cause significant changes in the debtor's ability to fulfill its debt repayment obligations.

② Significant changes in actual or expected operating results of the debtor.

③ Significant adverse changes in the regulatory, economic or technological environment in which the debtor operates.

④ Significant changes in the value of collateral used as debt collateral or the quality of guarantees or credit enhancements provided by third parties.

⑤ Significant changes in the debtor’s expected performance and repayment behavior.

⑥Overdue information.

For individual credit risks of other financial assets with significantly different credit risks, expected credit losses are determined based on the difference between the carrying amount of other receivables and the present value of the expected cash flows, such as receivables for which there are obvious signs that the debtor is likely to be unable to fulfill its repayment obligations, etc. In addition to individual assessment credit Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

In addition to risky financial assets, the company divides other receivables into different groups based on the same risk characteristics, and evaluates credit risks on the basis of the combination. The basis for determining the combination and the accrual method are as follows:

Item Basis for determining combination Provision method

Other receivables portfolio 1 Interest receivable Other receivables portfolio without provision for bad debts 2 Dividends receivable Other receivables portfolio without provision for bad debts 3 Aging analysis portfolio Aging analysis method

The company begins to calculate the aging of other receivables when they are initially recorded, and the actual aging period is from the time of initial recognition to the balance sheet date.

For other receivables classified into portfolios, they are combined based on age as the credit risk characteristic, and expected credit losses are calculated based on all reasonable and evidence-based information, including forward-looking information.

The expected credit loss rate of the aging analysis portfolio is as follows:

Aging Expected credit loss rate of accounts receivable (%) within one year

5.00

one to two years

10.00

two to three years

20.00

three to four years

30.00

four to five years

80.00

more than five years

100.00

(3) Accounting treatment method of expected credit losses

In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the company re-measures expected credit losses on each balance sheet date. The resulting increase or reversal of loss provisions shall be included in the current profit and loss as impairment losses or gains. Depending on the type of financial instrument, the book value of the financial assets listed in the balance sheet shall be reduced or included in estimated liabilities (loan commitments or financial guarantee contracts) or included in other comprehensive income (debt investments measured at fair value and changes in other comprehensive income).

7. Transfer of financial assets

The transfer of financial assets refers to the transfer or delivery of a financial asset (or its cash flow) by an enterprise (the transfer-out party) to another party (the transfer-in party) other than the issuer of the financial asset.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

When a company transfers financial assets, it shall evaluate the degree of risks and rewards in retaining ownership of the financial assets, and handle the following situations respectively:

(1) If a company transfers substantially all risks and rewards of ownership of a financial asset, it shall derecognize the financial asset and separately recognize the rights and obligations arising or retained in the transfer as assets or liabilities. (2) If the company retains substantially all risks and rewards of ownership of the financial asset, it shall continue to recognize the financial asset.

(3) If a company neither transfers nor retains substantially all risks and rewards of ownership of financial assets (i.e. other situations other than the above 2 items), it shall handle the following situations based on whether it retains control of the financial assets:

① If the company does not retain control over the financial asset, it shall terminate the recognition of the financial asset and separately recognize the rights and obligations arising or retained in the transfer as assets or liabilities.

② If the company retains control over the financial assets, it shall continue to recognize the relevant financial assets according to the extent of its continued involvement in the transferred financial assets, and recognize relevant liabilities accordingly.

8. Offset of financial assets and financial liabilities

Financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset against each other. However, if the following conditions are met at the same time, the net amount after offsetting each other shall be presented in the balance sheet:

(1) The company has the legal right to offset the confirmed amount, and this legal right is currently enforceable;

(2) The company plans to settle on a net basis, or to realize the financial assets and pay off the financial liabilities at the same time. For transfers of financial assets that do not meet the conditions for derecognition, the transferor shall not offset the transferred financial assets and related liabilities.

(12) Notes receivable

For details, please refer to “III. (11) Financial Instruments” in this note.

(13) Accounts receivable

For details, please refer to “III. (11) Financial Instruments” in this note.

(14) Accounts receivable financing

For details, please refer to “III. (11) Financial Instruments” in this note.

(15) Other receivables

For details, please refer to “III. (11) Financial Instruments” in this note.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(16) Inventory

1. Classification of inventory

The company's inventory is divided into raw materials, inventory goods, products in progress, packaging materials, consumable biological assets, low-value consumables, commissioned processing materials, etc.

2. Valuation method for shipped inventory

The company's inventory is priced using the weighted average method.

3. The basis for determining the net realizable value of inventories and the method of accruing inventory depreciation reserves

After conducting a comprehensive inventory of the inventory at the end of the period, the inventory depreciation reserve is withdrawn or adjusted based on the lower of the inventory cost and the net realizable value.

For commodity inventories that are directly for sale, such as inventory goods and materials for sale, in the normal production and operation process, the net realizable value is determined by the estimated selling price of the inventory minus the estimated sales expenses and related taxes;

For inventory of materials that need to be processed during normal production and operation, the net realizable value is determined based on the estimated selling price of the finished products minus the estimated costs to be incurred upon completion, estimated sales expenses and related taxes. For inventories held for the execution of sales contracts or labor contracts, the net realizable value is calculated based on the contract price. If the quantity of inventory held is greater than the quantity ordered in the sales contract, the net realizable value of the excess inventory is calculated based on the general sales price.

At the end of the period, inventory depreciation provisions are accrued based on individual inventory items; however, for inventories with large quantities and low unit prices, inventory depreciation provisions are accrued according to inventory categories; inventory depreciation provisions are made on a consolidated basis for inventories that are related to product series produced and sold in the same region, have the same or similar end use or purpose, and are difficult to measure separately from other items.

If the factors that caused the previous write-down of the inventory value have disappeared, the amount of the write-down will be restored and reversed within the amount of the inventory devaluation provision that was originally accrued, and the reversed amount will be included in the current profit and loss.

Unless there is clear evidence that the market price on the balance sheet date is abnormal, the net realizable value of inventory items is determined based on the market price on the balance sheet date.

4. Inventory inventory system

The inventory system of the Company's inventory adopts the perpetual inventory system.

5. Amortization method for low-value consumables and packaging materials

(1) Low-value consumables adopt the one-time amortization method;

(2) The one-time amortization method is adopted for packaging materials.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(17) Contract assets

The Company presents the right to receive consideration for goods or services transferred to the customer (and the right depends on factors other than the passage of time) as a contract asset. The provision for impairment of contract assets shall be based on the expected credit loss method for financial instruments. For contract assets that do not contain or have significant financing components, the Company adopts a simplified method to measure loss provisions. For contract assets that contain significant financing components, the Company measures loss provisions in accordance with the general method. If an impairment loss occurs on a contract asset, "Asset Impairment Loss" will be debited and "Contract Asset Impairment Provision" will be credited according to the amount that should be written down; when the accrued asset impairment provision is reversed, the opposite entry will be made.

(18) Contract costs

1. Cost of obtaining the contract

The incremental costs incurred by the company to obtain the contract (that is, costs that would not have been incurred without obtaining the contract) that are expected to be recovered are recognized as an asset, and are amortized on the same basis as the revenue recognition of goods or services related to the asset, and included in the current profit and loss. If the amortization period of the asset does not exceed one year, it will be included in the current profit and loss when incurred. Other expenses incurred by the company to obtain the contract shall be included in the current profit and loss when incurred, unless it is clearly borne by the customer.

2. Cost of performing the contract

The costs incurred by the company to fulfill the contract are recognized as an asset if they do not fall within the scope of other business accounting standards other than the revenue standards and meet the following conditions at the same time: ① The cost is directly related to a current or expected contract; ② The cost increases the company's resources for fulfilling the performance obligations in the future; ③ The cost is expected to be recovered. The recognized assets are amortized on the same basis as the revenue recognition of goods or services related to the assets and included in the current profits and losses. If the book value of the contract cost is higher than the difference between the first item minus the second item below, an impairment provision is made and recognized as an asset impairment loss: first, the remaining consideration expected to be obtained from the transfer of the goods related to the asset; second, the estimated cost to be incurred for the transfer of the related goods. If the factor of impairment in the previous period subsequently changes, so that the difference between the first item minus the second item mentioned above is higher than the book value of the contract cost, the asset impairment provision that has been previously accrued should be reversed and included in the current profit and loss, but the book value of the contract cost after the reversal should not exceed the book value of the asset on the date of reversal assuming that no impairment provision is made.

(19) Assets held for sale

If a company mainly recovers its book value through sale (including non-monetary asset exchange with commercial substance, the same below) rather than continuing to use a non-current asset or disposal group, it should be classified as held for sale.

The company's non-current assets or disposal groups are classified as held for sale and must meet the following conditions at the same time: Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(1) According to the practice of selling such assets or disposal groups in similar transactions, they can be sold immediately under the current conditions;

(2) The sale is very likely to occur, that is, the enterprise has made a resolution on a sale plan and obtained a firm purchase commitment, and the sale is expected to be completed within one year. If relevant regulations require the approval of the relevant authority or regulatory department of the enterprise before it can be sold, the approval must have been obtained.

A firm purchase commitment refers to a legally binding purchase agreement signed between an enterprise and other parties. The agreement contains important terms such as transaction price, time, and sufficiently severe penalties for breach of contract, making the possibility of major adjustments or cancellation of the agreement extremely small.

If the non-current assets or disposal groups acquired by the company specifically for resale meet the specified conditions of "the sale is expected to be completed within one year" on the acquisition date, and are likely to meet other classification conditions for the held-for-sale category in the short term (usually 3 months), the company shall classify it as the held-for-sale category on the acquisition date.

(20) Long-term equity investment

1. Judgment criteria for joint control and significant influence

Joint control refers to the shared control over an arrangement in accordance with relevant agreements, and the relevant activities of the arrangement must be decided only with the unanimous consent of the parties sharing control rights. If the company and other joint venture parties jointly control the invested unit and have rights to the net assets of the invested unit, the invested unit is a joint venture of the company.

Significant influence means having the power to participate in the financial and operating decisions of an enterprise, but not being able to control or jointly control the formulation of these policies with other parties. If the company can exert significant influence on the invested unit, the invested unit shall be an associate of the company.

2. Determination of initial investment cost

(1) Long-term equity investment formed by business merger

Business mergers under common control: If the company pays cash, transfers non-cash assets or assumes debts, or issues equity securities as the merger consideration, the initial investment cost of the long-term equity investment will be the share of the book value of the owner's equity of the merged party in the consolidated financial statements of the ultimate controlling party on the merger date. If it is possible to control an investee under the same control due to additional investment or other reasons, the initial investment cost of the long-term equity investment shall be determined based on the share of the book value of the combined party's net assets in the final controlling party's consolidated financial statements on the merger date on the merger date. The difference between the initial investment cost of the long-term equity investment on the merger date and the book value of the long-term equity investment before the merger plus the book value of the new consideration for further acquisition of shares on the merger date is adjusted to the equity premium. If the equity premium is insufficient to offset it, the retained earnings are offset.

Merger of businesses not under common control: The company shall use the merger cost determined on the purchase date as the initial investment cost of the long-term equity investment. Jilin Aodong Pharmaceutical Group Co., Ltd. can control investees that are not under common control due to additional investment and other reasons.

2025

Notes to Financial Statements

If the cost method is used, the sum of the book value of the original equity investment plus the new investment cost shall be used as the initial investment cost to be calculated according to the cost method.

(2) Long-term equity investment obtained through other means

For long-term equity investments obtained by paying cash, the actual purchase price paid shall be regarded as the initial investment cost.

For long-term equity investments obtained by issuing equity securities, the initial investment cost shall be based on the fair value of the equity securities issued.

Under the premise that the non-monetary asset exchange has commercial substance and the fair value of the assets exchanged or the assets exchanged can be reliably measured, the initial investment cost of the long-term equity investment exchanged in the non-monetary asset exchange shall be the fair value of the assets exchanged and the relevant taxes payable, unless there is conclusive evidence that the fair value of the assets exchanged is more reliable; for non-monetary asset exchanges that do not meet the above premises, the book value of the assets exchanged and the relevant taxes payable shall be used as the initial investment cost of the long-term equity investment exchanged.

For long-term equity investments obtained through debt restructuring, the book value is determined based on the fair value of the relinquished claims and taxes and other costs directly attributable to the asset, and the difference between the fair value of the relinquished claims and the book value is included in the current profit and loss.

3. Subsequent measurement and profit and loss recognition methods

(1) Long-term equity investment calculated using cost method

The company's long-term equity investments in subsidiaries are accounted for using the cost method. In addition to the actual price paid when acquiring the investment or the cash dividends or profits that have been declared but not yet distributed included in the consideration, the company recognizes the current investment income based on the cash dividends or profits declared and distributed by the investee.

(2) Long-term equity investment accounted for by equity method

Long-term equity investments in associates and joint ventures are accounted for using the equity method. If the initial investment cost is greater than the fair value share of the investee's identifiable net assets that should be enjoyed at the time of investment, the initial investment cost of long-term equity investment will not be adjusted; if the initial investment cost is less than the fair value share of the investee's identifiable net assets that should be enjoyed at the time of investment, the difference will be included in the current profit and loss.

The company recognizes investment income and other comprehensive income respectively according to its share of the net profit or loss and other comprehensive income realized by the investee, and adjusts the book value of the long-term equity investment at the same time; calculates the share of the profits or cash dividends declared by the investee to be distributed, and reduces the book value of the long-term equity investment accordingly; for other changes in the owner's equity of the investee other than net profits and losses, other comprehensive income and profit distribution, the company adjusts the book value of the long-term equity investment and includes it in the owner's equity. When confirming the share of the investee's net profits and losses, the fair value of the investee's identifiable net assets when the investment is obtained is used as the basis, and the net profit of the investee is adjusted and recognized in accordance with the company's accounting policies and accounting period. During the period when the investment is held, if the invested unit prepares consolidated financial statements, Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Calculation is based on the amount attributable to the invested unit in the net profit, other comprehensive income and other changes in owner's equity in the consolidated financial statements.

Unrealized profits and losses from internal transactions between the company and its associates and joint ventures are calculated based on the proportion attributable to the company and are offset, and investment income is recognized on this basis. Unrealized internal transaction losses with invested entities, which are asset impairment losses, are recognized in full. If there is a transaction of investing or selling assets between the company and its associates or joint ventures, and the assets constitute a business, the accounting treatment methods for business combinations under the same control and those not under the same control and "3.

(7) Accounting treatment shall be carried out in accordance with the relevant policies disclosed in "Control Judgment Standards and Preparation Methods of Consolidated Financial Statements".

When the company confirms that it should share the losses incurred by the invested unit, it shall proceed in the following order: First, offset the book value of the long-term equity investment. Secondly, if the book value of the long-term equity investment is not sufficient to offset it, investment losses will continue to be recognized to the extent of the book value of other long-term equities that essentially constitute a net investment in the investee, and the book value of long-term receivable items, etc. will be offset. Finally, after the above processing, if the enterprise still bears additional obligations according to the investment contract or agreement, estimated liabilities will be recognized based on the estimated obligations and included in the current investment losses.

(3) Disposal of long-term equity investments

When a long-term equity investment is disposed of, the difference between its book value and the actual price obtained shall be included in the current profit and loss. When disposing of a long-term equity investment accounted for using the equity method, the same basis as the investee's direct disposal of relevant assets or liabilities will be used, and the portion originally included in other comprehensive income will be accounted for in a corresponding proportion. Owner's equity recognized due to changes in other owners' equity of the investee other than net profit and loss, other comprehensive income and profit distribution shall be carried forward to the current profit and loss on a proportional basis, except for other comprehensive income arising from changes in the investee's remeasurement of the net liabilities or net assets of the defined benefit plan.

If joint control or significant influence over the invested unit is lost due to the disposal of part of the equity investment or other reasons, the remaining equity after disposal shall be accounted for in accordance with the financial instrument recognition and measurement standards, and the difference between its fair value and book value on the date of loss of joint control or significant influence shall be included in the current profit and loss. Other comprehensive income recognized as a result of the original equity investment being accounted for using the equity method will be accounted for on the same basis as if the investee directly disposed of relevant assets or liabilities when the equity method is terminated. Owners' equity recognized due to changes in other owners' equity of the investee other than net profit and loss, other comprehensive income and profit distribution will all be transferred to the current profit and loss when the equity method is terminated.

If the control over the invested unit is lost due to the disposal of part of the equity investment or other reasons, when preparing individual financial statements, if the remaining equity after disposal can exercise joint control or significant influence on the invested unit, it shall be accounted for according to the equity method, and the remaining equity shall be deemed to have adopted equity since the time of acquisition. If the remaining equity after disposal cannot jointly control or exert significant influence on the invested unit, it will be accounted for in accordance with the relevant provisions of the financial instrument recognition and measurement standards. Its fair value on the date of loss of control is the same as that of Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

The difference between the book values is included in the current profit and loss.

The disposed equity is acquired through a business merger due to additional investment and other reasons. When preparing individual financial statements, if the remaining equity after disposal is accounted for using the cost method or the equity method, other comprehensive income and other owners' equity recognized for the equity investment held before the acquisition date due to the equity method will be carried forward in proportion; if the remaining equity after disposal is accounted for in accordance with the financial instrument recognition and measurement standards, all other comprehensive income and other owners' equity will be carried forward.

(21) Investment real estate

1. Types of investment real estate

Investment real estate is divided into: leased land use rights, land use rights held and prepared to be transferred after appreciation, and leased buildings.

2. Measurement model of investment real estate

The Company's investment properties are initially measured at cost. The cost of purchasing investment real estate includes the purchase price, relevant taxes and other expenses directly attributable to the asset. The cost of self-constructing investment real estate consists of the necessary expenditures incurred before the asset reaches its intended usable condition. The Company adopts the cost model for subsequent measurement of investment real estate on the balance sheet date, and measures, depreciates or amortizes investment real estate in accordance with the regulations on fixed assets and intangible assets. If there are signs of impairment, estimate the recoverable amount. If the recoverable amount of the investment real estate is lower than its book value, the book value of the investment real estate will be written down to the recoverable amount. The amount of the write-down will be recognized as asset impairment loss and included in the current profit and loss, and the corresponding investment real estate impairment provision will be made. After the impairment loss of the investment real estate is confirmed, the depreciation or amortization expenses of the impaired investment real estate will be adjusted accordingly in the future period, so that the adjusted book value of the investment real estate (deducting the estimated net residual value) will be systematically apportioned within the remaining useful life of the investment real estate.

Once the impairment loss on investment real estate is recognized, it cannot be reversed in subsequent accounting periods.

(22) Fixed assets

1. Confirm conditions

Tangible assets held by the company for the purpose of providing labor services, leasing or operating management, etc., with a useful life of more than one year (exclusive of one year) shall be included in fixed assets. Including houses and buildings, machinery and equipment, transportation equipment, etc. If the software that comes with the purchase of computer hardware is not separately priced, it should be incorporated into the computer hardware as fixed asset management; software that is separately priced should be included in intangible assets.

2. Depreciation method

Category Depreciation method Depreciation period (years) Residual value rate (%) Annual depreciation rate (%) Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Category Depreciation method Depreciation life (years) Salvage value rate (%) Annual depreciation rate (%) Houses and buildings Straight-line method 10-40 3-5 2.38-9.70 Machinery and equipment Straight-line method 4-15 3-5 6.33-24.25 Transportation equipment Straight-line method 5-12 3-5 7.92-19.40 Office equipment Straight-line method 3-12 3-5 7.92-32.33

Highways and tunnels Straight-line method 10-30 3-5 3.17-9.70 Depreciation of fixed assets is calculated using the straight-line method. Based on the category of fixed assets, estimated service life and estimated net residual value rate, the depreciation rate of fixed assets is determined. Depreciation is calculated on a monthly basis in the month after the fixed assets are acquired (except for fixed assets that have been fully depreciated and are still in use and land that is separately valued and recorded).

3. Basis for identification, valuation and depreciation methods of fixed assets leased under financing

For fixed assets leased under financial leasing, if it is reasonably certain that ownership of the leased asset will be obtained at the expiration of the lease term, depreciation will be accrued within the remaining useful life of the leased asset; if it is not reasonably certain that ownership of the leased asset will be obtained at the expiration of the lease term, depreciation will be accrued during the shorter of the lease term and the remaining useful life of the leased asset.

(23) Projects under construction

1. Categories of projects under construction

The category of projects under construction is divided into expenditures incurred for various construction and installation projects such as infrastructure construction and renovation.

2. Standards and timing for transferring construction in progress to fixed assets

The cost of projects under construction is determined based on actual expenditures incurred. If the built fixed assets or improvements to operating leased fixed assets have reached the intended usable state but the final settlement of completion has not yet been processed, from the date it reaches the intended usable state, the estimated value shall be transferred to the fixed assets or long-term prepaid expenses based on the project budget, cost or actual cost of the project, and depreciation or amortization shall be accrued; after the final accounts of completion have been processed, the original estimated value will be adjusted based on the actual cost, but there is no need to adjust the originally accrued depreciation or amortization.

The standards and timing for transferring different types of construction in progress to fixed assets are as follows:

Houses and buildings: (1) The main construction project and supporting projects have been substantially completed; (2) The construction project has met the predetermined design requirements and has been accepted by survey, design, construction, supervision and other units; (3) Accepted by external departments such as fire protection, land and planning, etc.;

Machinery and equipment that need to be installed and debugged: (1) Relevant equipment and other supporting facilities have been installed; (2) The equipment can maintain normal and stable operation for a period of time after debugging; (3) The production equipment can stably produce qualified products for a period of time; (4) The equipment has been accepted by asset managers and users.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

3. Impairment testing method and impairment provision accrual method for projects under construction

On the balance sheet date, the company conducts impairment tests on individual projects for projects under construction that show signs of impairment, and estimates their recoverable amounts. If the recoverable amount is lower than the book value, the book value of the asset will be written down to the recoverable amount, and the amount written down will be included in the current profit and loss, and corresponding asset impairment provisions will be made. The recoverable amount is determined as the higher of the asset's fair value less disposal costs and the present value of the asset's future cash flows. Once the impairment provision is made, it will not be reversed in subsequent accounting periods.

(24) Borrowing costs

1. Recognition principles for capitalization of borrowing costs

(1) Recognition principles for capitalization of borrowing costs:

Assets that meet the conditions for capitalization refer to fixed assets, investment real estate, inventories and other assets that require a considerable period of acquisition, construction or production activities to reach the intended usable or salable state. Borrowing costs include borrowing interest, amortization of discounts or premiums, auxiliary expenses, and exchange differences arising from foreign currency borrowings. If the borrowing costs incurred by the company can be directly attributed to the purchase, construction or production of assets that meet the capitalization conditions, they will be capitalized and included in the cost of the relevant assets; other borrowing costs will be recognized as expenses based on the amount incurred when they are incurred and included in the current profits and losses.

(2) Capitalization of borrowing costs begins when the following conditions are met at the same time:

① Asset expenditures have occurred. Asset expenditures include expenditures in the form of cash payments, transfers of non-cash assets or interest-bearing debts for the acquisition, construction or production of assets that meet capitalization conditions;

②The borrowing costs have been incurred;

③The necessary purchase, construction or production activities to bring the assets to the intended usable or salable state have begun.

2. Capitalization period of borrowing costs

Borrowing costs incurred for the acquisition and construction of fixed assets that meet the above capitalization conditions and are incurred before the asset reaches its intended usable or salable state shall be included in the asset cost.

3. Capitalization suspension period

If the purchase and construction activities of fixed assets or investment real estate are abnormally interrupted, and the interruption lasts for more than 3 months, the capitalization of borrowing costs will be suspended and recognized as current expenses until the purchase and construction activities of the assets restart; when the intended usable or salable state is reached, the capitalization of borrowing costs will be stopped, and the borrowing costs incurred thereafter will be directly included in financial expenses in the current period.

4. Calculation method of capitalized amount of borrowing costs

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(1) If a special loan is borrowed for the purpose of purchasing, constructing or producing and developing assets that meet the capitalization conditions, the amount shall be determined based on the interest expense actually incurred on the special loan in the current period, minus the interest income obtained from depositing the unused borrowed funds in the bank or the investment income obtained from temporary investment.

(2) Capitalization of borrowing auxiliary expenses

Before the assets that are purchased, constructed or produced that meet the capitalization conditions reach the intended usable or salable state, the borrowing auxiliary expenses are capitalized according to the amount incurred when incurred and included in the cost of the assets that meet the capitalization conditions; after the assets that are purchased, constructed or produced that meet the capitalization conditions reach the intended usable or marketable state, they are recognized as expenses based on the amount incurred when incurred and included in the current profits and losses. (3) Capitalized amount of general borrowing interest expenses

During the capitalization period of borrowing costs, the amount of interest that should be capitalized on general borrowings used by the company for the purchase, construction or production of assets that meet the capitalization conditions shall be calculated according to the following formula:

General borrowing interest expenses Accumulated asset expenditures exceed the special borrowing portion of the assets occupied by general borrowings

= ×

Capitalized amount Weighted average of expenditures Capitalization rate of general borrowings

= Weighted average interest rate of general borrowings occupied

capitalization rate

The total interest actually incurred on the general borrowings occupied during the period

=

Weighted average of general borrowing principal occupied

The principal of general borrowings occupied plus the number of days occupied by each general borrowing in the current period

= ∑ [×] Weighted average number of borrowing principal Number of days in the current period

(25) Biological assets

Biological assets refer to living animals and plants.

1. Classification of biological assets

Biological assets are divided into consumable biological assets, productive biological assets and public welfare biological assets.

Consumable biological assets refer to biological assets held for sale or harvested as agricultural products in the future, including growing field crops, vegetables, timber forests, and livestock held for sale.

Productive biological assets refer to biological assets held for the purpose of producing agricultural products, providing labor services or leasing them, including economic forests, firewood forests, livestock and draft animals, etc.

Public welfare biological assets refer to biological assets with the main purpose of protection and environmental protection, including windbreak and sand-fixing forests, soil and water conservation forests, and water source conservation forests.

2. Recognition and initial measurement of biological assets

Biological assets can only be recognized if they meet the following conditions at the same time:

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(1) The enterprise owns or controls the asset due to past transactions or events;

(2) The economic benefits or service potential contained in the asset are likely to flow into the enterprise;

(3) The cost of the asset can be measured reliably.

Initial measurement of biological assets:

(1) Biological assets acquired by an enterprise shall be initially measured according to the cost at the time of acquisition.

(2) The cost of outsourced biological assets includes the purchase price, transportation fees, insurance premiums, relevant taxes and other expenses directly attributable to the purchase of the asset.

(3) The cost of self-cultivation, establishment, reproduction or breeding of consumable biological assets shall be determined in accordance with the following provisions:

① The cost of self-cultivated field crops and vegetables is determined based on the necessary expenses such as seeds, fertilizers, pesticides and other materials consumed before harvest, labor costs, and indirect expenses that should be shared.

② The cost of self-cultivated consumptive biological assets of forest trees shall be determined based on necessary expenditures such as afforestation fees, tending fees, silviculture facility fees, improved variety testing fees, survey and design fees, and other management and protection fees incurred before the canopy is closed. ③The cost of self-bred fattening animals shall be determined based on the necessary expenditures such as feed costs, labor costs and apportioned indirect costs incurred before sale.

④ The cost of aquaculture animals and plants is determined based on the necessary expenses such as seed, feed, fertilizer and other material costs, labor costs, and indirect costs that should be allocated before they are sold or put into storage.

(4) The cost of self-created or propagated productive biological assets shall be determined in accordance with the following provisions:

① The cost of self-cultivated forest productive biological assets shall be determined based on necessary expenditures such as afforestation fees, tending fees, forest management facility fees, improved variety testing fees, investigation and design fees, and other management and protection fees incurred before reaching the intended production and operation purpose.

② The cost of self-bred livestock and draft animals shall be determined based on the necessary expenditures such as feed costs, labor costs, and indirect costs that should be shared before they reach the intended production and operation purpose (age).

(5) The cost of self-created public welfare biological assets shall be determined based on necessary expenditures such as afforestation fees, tending fees, forest protection fees, forest management facility fees, improved variety testing fees, investigation and design fees, and other management and protection fees incurred before reaching canopy closure.

(6) Borrowing costs that should be included in the cost of biological assets shall be handled in accordance with the provisions of "Accounting Standards for Business Enterprises No. 17 - Borrowing Costs". Borrowing costs incurred for consumable forest biological assets shall cease to be capitalized when the canopy is closed.

(7) The cost of biological assets invested by investors shall be determined according to the value stipulated in the investment contract or agreement, unless the value stipulated in the contract or agreement is unfair.

(8) The cost of biological assets of natural origin shall be determined based on the nominal amount.

(9) The cost of biological assets acquired through a business merger shall be determined in accordance with the Accounting Standards for Business Enterprises No. 20 - Enterprise Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Merger" confirmed.

(10) The cost of biological assets obtained from the exchange of non-monetary assets shall be determined in accordance with the "Accounting Standards for Business Enterprises No. 7 - Exchange of Non-monetary Assets".

(11) The cost of biological assets obtained through debt restructuring shall be determined in accordance with "Accounting Standards for Business Enterprises No. 12 - Debt Restructuring".

3. Subsequent measurement of biological assets

(1) The company adopts the cost model for subsequent measurement of biological assets.

(2) Subsequent expenditures incurred for replanting forest biological assets due to selective felling, thinning or tending and renewal logging shall be included in the cost of forest biological assets.

Subsequent expenditures such as management, care, and feeding expenses incurred after biological assets are closed or achieve their intended production and operation purposes are recognized as current expenses.

(3) Enterprises shall accrue depreciation on a regular basis for productive biological assets that have achieved the intended production and operation purposes, and include them into the cost of related assets or current expenses according to their uses.

The depreciation life and annual depreciation rate of various productive biological assets of the Company are as follows:

Asset category Residual value rate Useful life Annual depreciation rate

Draft animals 23% 8-12 years 6.42%-9.63% (4) The enterprise shall inspect consumable biological assets and productive biological assets at least at the end of each year, and there is conclusive evidence that due to natural disasters, pests and diseases, animal disease invasion or changes in market demand, etc. If the net realizable value of a consumable biological asset or the recoverable amount of a productive biological asset is lower than its book value, a provision for depreciation or impairment of the biological asset shall be made based on the difference between the net realizable value or the recoverable amount and the book value, and shall be recognized as a loss for the current period.

If the influencing factors of the impairment of consumable biological assets have disappeared, the amount of the write-down shall be restored and reversed within the amount of the provision for decline in price originally accrued, and included in the current profit and loss. Once the provision for impairment of productive biological assets is made, it cannot be reversed.

No provision for impairment is made for public welfare biological assets.

4. Harvest and disposal of biological assets

(1) For consumable biological assets, when harvested or sold, the cost shall be carried forward according to its book value. The method of carrying forward costs adopts the weighted average method.

(2) The cost of agricultural products harvested from productive biological assets is calculated and determined based on the necessary expenditures such as material costs, labor costs, and indirect costs that should be allocated during the output or harvesting process, and the weighted average method is used to transfer their book value to the cost of agricultural products.

Agricultural products after harvesting shall be handled in accordance with "Accounting Standards for Business Enterprises No. 1 - Inventory".

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

The cost of biological assets after the use is changed shall be determined based on the book value at the time of change of use.

(3) When a biological asset is sold, suffers a loss or dies or is damaged, the balance of the disposal income after deducting its book value and relevant taxes and fees shall be included in the current profit and loss.

(26) Intangible assets

1. Valuation method of intangible assets

(1) Intangible assets refer to identifiable non-monetary assets without physical form owned or controlled by the company. Intangible assets are initially measured at cost.

(2) The Company initially measures intangible assets based on the acquisition cost of the intangible assets or expenditures that are attributable to the development stage of the intangible assets and can be measured reliably.

① The cost of outsourced intangible assets includes the purchase price, import duties and other taxes, and other expenses directly attributable to achieving the intended use of the asset.

If the purchase price of intangible assets is deferred beyond normal credit conditions, the cost of the intangible assets shall be its equivalent cash price.

The difference between the actual price paid and the recognized cost shall be recognized as interest expense within the credit period, except for those that should be capitalized in accordance with "Accounting Standards for Business Enterprises No. 17 - Borrowing Costs".

② The cost of self-developed intangible assets includes self-satisfaction with "Accounting Standards for Business Enterprises No. 6 - Intangible Assets"

The total amount of expenditures incurred after the provisions of Articles 4 and 9 before reaching the intended purpose, but expenditures that have been expensed in previous periods will not be adjusted.

③ The intangible assets invested by investors shall be costed according to the value stipulated in the investment contract or agreement, unless the value stipulated in the contract or agreement is unfair.

④The cost of intangible assets acquired through a business merger shall be determined in accordance with the "Accounting Standards for Business Enterprises No. 20 - Business Merger".

⑤ The cost of intangible assets obtained from the exchange of non-monetary assets shall be determined in accordance with the "Accounting Standards for Business Enterprises No. 7 - Exchange of Non-monetary Assets".

⑥The cost of intangible assets obtained through debt restructuring shall be determined in accordance with "Accounting Standards for Business Enterprises No. 12 - Debt Restructuring".

⑦The cost of intangible assets obtained through government subsidies shall be recognized in accordance with the "Accounting Standards for Business Enterprises No. 16 - Government Subsidies".

Intangible assets with limited service life are amortized using the straight-line method over the estimated service life starting from the month of acquisition. Intangible assets with indefinite service life are not amortized and are tested for impairment at the end of the period.

The company will review the service life and amortization method of intangible assets at least at the end of each year, and make adjustments if necessary.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Estimation of service life of intangible assets with limited service life

For intangible assets with a definite service life, if they are derived from contractual rights or other legal rights, their service life should not exceed the term of the contractual rights or other legal rights; if the contractual rights or other legal rights can be extended upon expiration through contract renewal, etc., and there is evidence that the company does not need to pay a large cost for the renewal, the renewal period shall be included in the service life. If the contract or law does not stipulate the service life, the company shall comprehensively judge all aspects of the situation to determine the period during which the intangible assets can bring future economic benefits to the enterprise:

Item Estimated service life Basis

Street naming fee, contract period or comprehensive judgment, contract, period expected to bring future economic benefits to the enterprise

Software Contract term, statutory term or comprehensive judgment Contract, regulations, term expected to bring future economic benefits to the enterprise Trademark Contract term, statutory term or comprehensive judgment Contract, statutory term or comprehensive judgment Contract, statutory term, fee-based operating rights expected to bring future economic benefits to the enterprise Contract term, legal term or comprehensive judgment Contract, regulations, term expected to bring future economic benefits to the enterprise Land use rights Contract term, legal term Contract, regulations

Patent rights Contract term, legal term or comprehensive judgment Contract, regulations, term expected to bring future economic benefits to the enterprise

3. Basis for judgment of intangible assets with indefinite service life

If the period during which the intangible asset can bring economic benefits to the enterprise cannot be reasonably determined according to the above methods, the intangible asset shall be regarded as an intangible asset with an indefinite useful life.

Factors that companies usually consider when determining the useful life of intangible assets:

(1) The asset’s usual product life cycle and available information on the service life of similar assets;

(2) The current situation of technology, process, etc. and estimates of future development trends;

(3) Market demand for the products (or services) produced by the asset;

(4) Actions expected by current or potential competitors;

(5) Expected maintenance expenditures to maintain the asset’s ability to generate future economic benefits, and the company’s expected ability to pay relevant expenditures;

(6) The control period of the asset, legal or similar restrictions on use, such as the franchise period, lease period, etc.;

(7) Correlation with the service life of other assets held by the company, etc.

4. Provision for impairment of intangible assets

If there is conclusive evidence that an intangible asset is impaired, the company will conduct an impairment test on the balance sheet date to estimate its recoverable amount. If the recoverable amount is lower than its book value, the book value of the intangible asset will be written down to the recoverable amount, and the amount of the write-down will be included in the current profit and loss, and the corresponding intangible asset impairment provision will be made. For intangible assets with indefinite useful lives, impairment testing is performed every year regardless of whether there is any indication of impairment. Once an asset impairment loss is recognized, it cannot be reversed in subsequent accounting periods.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

5. Scope of aggregation of R&D expenditures and related accounting treatment methods

The scope of the company's R&D expenditures is mainly determined based on the company's research and development projects, and mainly includes: R&D personnel salary, test and inspection fees, direct investment expenses such as material samples, depreciation and amortization expenses, entrusted external research and development expenses, and other expenses, etc.

Expenditures in the research stage are included in the current profits and losses when incurred. Expenditures in the development stage that meet the following conditions at the same time are recognized as intangible assets. Expenditures in the development stage that do not meet the following conditions are included in the current profit and loss: (1) It is technically feasible to complete the intangible asset so that it can be used or sold;

(2) Have the intention to complete the intangible asset and use or sell it;

(3) The way intangible assets generate economic benefits includes being able to prove that there is a market for the products produced using the intangible assets or that the intangible assets themselves have a market. If the intangible assets will be used internally, their usefulness can be proven;

(4) Have sufficient technical, financial and other resource support to complete the development of the intangible assets, and have the ability to use or sell the intangible assets;

(5) Expenditures attributable to the development stage of the intangible asset can be measured reliably.

If it is impossible to distinguish between expenditures in the research stage and expenditures in the development stage, all R&D expenditures incurred will be included in the current profit and loss.

Specific criteria for dividing the research stage and development stage of internal research and development projects: The corresponding projects of the Group are in

Once the above conditions are met and the project is approved, it will enter the development stage and start capitalization.

(27) Impairment of long-term assets

Long-term equity investments, investment properties measured using the cost model, fixed assets, projects under construction, intangible assets and other long-term assets will be tested for impairment if there are signs of impairment on the balance sheet date. If the impairment test results show that the recoverable amount of the asset is lower than its book value, impairment provisions will be made based on the difference and included in the impairment loss. The recoverable amount is the higher of the asset's fair value less disposal costs and the present value of the asset's expected future cash flows. Asset impairment provisions are calculated and recognized on the basis of individual assets. If it is difficult to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs is determined. An asset group is the smallest combination of assets that can independently generate cash inflows.

Goodwill is tested for impairment at least at the end of each year.

The company conducts a goodwill impairment test. The book value of goodwill formed due to business mergers will be allocated to the relevant asset groups in a reasonable manner from the date of purchase. If it is difficult to allocate it to the relevant asset groups, it will be allocated to the relevant asset group combinations. When allocating the book value of goodwill to relevant asset groups or combinations of asset groups, the allocation is based on the proportion of the fair value of each asset group or combination of asset groups to the total fair value of the relevant asset group or combination of asset groups. If the fair value is difficult to measure reliably, the fair value shall be apportioned according to the proportion of the book value of each asset group or asset group combination to the total book value of the relevant asset group or asset group combination.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

When conducting an impairment test on a relevant asset group or combination of asset groups that contains goodwill, if there are signs of impairment in the asset group or combination of asset groups that are related to goodwill, first conduct an impairment test on the asset group or combination of asset groups that does not contain goodwill, calculate the recoverable amount, and compare it with the relevant book value to confirm the corresponding impairment loss. Then conduct an impairment test on the asset group or asset group combination containing goodwill, and compare the book value of these related asset groups or asset group combinations (including the book value portion of the allocated goodwill) with their recoverable amount. If the recoverable amount of the relevant asset group or asset group combination is lower than its book value, the impairment loss of goodwill is recognized. Once the above-mentioned asset impairment losses are recognized, they will not be reversed in subsequent accounting periods.

(28) Long-term deferred expenses

Long-term deferred expenses are various expenses that have been incurred by the company but should be borne by the current period and subsequent periods for more than one year.

Long-term deferred expenses are recorded according to the actual amount incurred, and are amortized evenly over the benefit period or a specified period. If a long-term deferred expense item cannot benefit future accounting periods, all the amortized value of the item that has not been amortized will be transferred to the current profit and loss.

(29) Contract liabilities

Contract liabilities refer to the company's obligation to transfer goods or services to customers for consideration received or receivable from customers. Contract assets and contract liabilities under the same contract are presented on a net basis.

(30) Employee compensation

1. Accounting treatment method for short-term compensation

During the accounting period when employees provide services to the company, the company recognizes the actual short-term compensation as a liability and includes it in the current profit and loss or related asset costs.

The company pays social insurance premiums and housing provident funds for its employees, as well as union funds and employee education funds withdrawn in accordance with regulations. During the accounting period when employees provide services to the company, the corresponding amount of employee remuneration is calculated and determined based on the prescribed accrual basis and accrual ratio.

If employee benefits are non-monetary benefits, if they can be measured reliably, they are measured at fair value.

2. Accounting treatment of post-employment benefits

Set up a savings plan

The company pays basic pension insurance and unemployment insurance for its employees in accordance with relevant regulations of the local government. During the accounting period when employees provide services to the company, the payment base and proportion stipulated by the local government are used to calculate the payment payable.

The amount is recognized as a liability and included in the current profit and loss or related asset costs.

3. Accounting treatment method for dismissal benefits

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

When the company cannot unilaterally withdraw the dismissal benefits provided by the termination of labor relationship plan or layoff proposal, or when it recognizes the costs or expenses related to the restructuring involving the payment of dismissal benefits (whichever is earlier), the employee compensation liabilities arising from the dismissal benefits are recognized and included in the current profit and loss.

(31) Asset transfer with repurchase conditions

When the company sells products or transfers other assets, it signs a repurchase agreement with the buyer for the products sold or transferred assets, and determines whether the goods sold meet the revenue recognition conditions based on the terms of the agreement. If the post-sale repurchase is a financing transaction, the company does not recognize sales revenue when the product or asset is delivered. If the repurchase price is greater than the sales price, interest will be accrued periodically during the repurchase period and included in financial expenses.

(32) Estimated liabilities

Estimated liabilities are liabilities that may arise due to contingencies, including estimated liabilities arising from external guarantees, pending litigation, product quality assurance, restructuring obligations, and fixed asset disposal obligations.

1. Recognition standards for estimated liabilities

Obligations related to contingencies that meet the following conditions at the same time should be recognized as estimated liabilities: the obligation is a current obligation borne by the company; the performance of the obligation is likely to result in the outflow of economic benefits from the company; and the amount of the obligation can be measured reliably.

(1) The obligation is a current obligation borne by the company;

This obligation is a current obligation borne by the company, which means that the obligation related to the contingency is an obligation that has been assumed by the company under the current conditions. The company has no other realistic choice but to fulfill this current obligation.

(2) Fulfilling this obligation is likely to result in the outflow of economic benefits from the company;

The performance of the obligation is likely to cause the outflow of economic benefits from the company, which means that when performing the current obligations related to the contingency, the possibility of causing the outflow of economic benefits from the company is more than 50% but less than or equal to 95%.

(3) The amount of the obligation can be measured reliably;

The amount of the obligation can be measured reliably, which means that the amount of the current obligation related to the contingency can be reasonably estimated.

2. Measurement method of estimated liabilities

(1) Determination of the best estimate:

Estimated liabilities should be initially measured based on the best estimate of the expenditure required to fulfill the relevant current obligations. The determination of the best estimate should be handled in the following two situations:

① If there is a continuous range (or interval, the same below) of required expenditures, and various results within the range are equally likely to occur, the best estimate should be determined based on the middle value within the range, that is, the average of the upper and lower limits.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

② There is no continuous range of required expenditures, or although there is a continuous range, the likelihood of various results occurring within this range is not the same. In this case, the best estimate shall be determined according to the following method: A. If the contingency involves a single project, it shall be determined according to the most likely amount.

B. If the contingencies involve multiple projects, they shall be calculated and determined based on various possible outcomes and related probabilities.

(2) Processing where compensation is expected:

If all or part of the expenditures required by an enterprise to settle estimated liabilities are expected to be compensated by a third party, the compensation amount can only be recognized as an asset separately when it is basically certain that it can be received. The amount of compensation recognized should not exceed the book value of estimated liabilities.

The company reviews the book value of estimated liabilities on the balance sheet date. If there is conclusive evidence that the book value cannot truly reflect the current best estimate, the book value shall be adjusted based on the current best estimate.

(33) Share-based payment

Share-based payment refers to a transaction in which an enterprise grants equity instruments or assumes liabilities determined based on equity instruments in order to obtain services from employees and other parties.

1. Types of share-based payment

The recognition and measurement of the company's share-based payment shall be based on a true, complete and effective share-based payment agreement. Specifically divided into: equity-settled share-based payment and cash-settled share-based payment.

2. Determination method of fair value of equity instruments

(1) For shares granted to employees, their fair value is measured based on the market price of the company’s shares, and adjusted by taking into account the terms and conditions on which the shares are granted (excluding vesting conditions other than market conditions). If the business is not publicly traded, it should be measured at the estimated market price, adjusted to take into account the terms and conditions under which the shares were granted.

(2) For stock options granted to employees, if there are no trading options with similar terms and conditions, the fair value of the options granted should be estimated through an option pricing model.

When an enterprise determines the fair value of an equity instrument on the grant date, it should consider the impact of market conditions and non-vestigation conditions in the vesting conditions stipulated in the share-based payment agreement. If there are non-exercisable conditions for share-based payment, as long as the employees or other parties meet all the non-market conditions (such as service period, etc.) among the exercisable conditions, the enterprise should confirm the corresponding costs and expenses of the services received.

3. Basis for confirming the best estimate of exercisable equity instruments

On each balance sheet date during the waiting period, the company makes its best estimate based on the latest changes in the number of vested employees and other subsequent information, and corrects the number of equity instruments expected to be vested to make the best estimate of the vested equity instruments.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

4. Accounting treatments related to the implementation, modification, and termination of share-based payment plans

If equity-settled share-based payment is exchanged for services provided by employees, it shall be measured at the fair value of the equity instruments granted to employees. Equity-settled share-based payments that are exercisable immediately after grant in exchange for employee services will be included in relevant costs or expenses based on the fair value of the equity instrument on the date of grant, and the capital reserve will be increased accordingly. For equity-settled share-based payments in exchange for employee services that are vested upon completion of services within the waiting period or upon meeting specified performance conditions, on each balance sheet date during the waiting period, based on the best estimate of the number of exercisable equity instruments and the fair value on the date of grant of the equity instrument, the services obtained in the current period are included in the relevant costs or expenses and capital reserves.

Cash-settled share-based payments are measured based on the fair value of the liability calculated and determined based on shares or other equity instruments assumed by the company. Cash-settled share-based payments that become exercisable immediately after grant will be included in the relevant costs or expenses at the fair value of the liability assumed by the company on the date of grant, with a corresponding increase in liabilities. For cash-settled share-based payments in exchange for employee services that are vested upon completion of services within the waiting period or upon meeting specified performance conditions, on each balance sheet date during the waiting period, based on the best estimate of the vesting situation and the fair value of the liability borne by the company, the services obtained in the current period are included in costs or expenses and corresponding liabilities.

If the modification increases the fair value of the equity instruments granted, the company will recognize the increase in the services obtained according to the increase in the fair value of the equity instruments; if the modification increases the number of equity instruments granted, the company will recognize the increased fair value of the equity instruments as an increase in the services obtained accordingly; if the company modifies the vesting conditions in a way that is beneficial to employees, the company will consider the modified vesting conditions when processing the vesting conditions.

If the modification reduces the fair value of the equity instruments granted, the company will continue to recognize the amount of services obtained based on the fair value of the equity instruments on the date of grant, regardless of the decrease in the fair value of the equity instruments; if the modification reduces the number of equity instruments granted, the company will treat the reduction as the cancellation of the equity instruments granted; if the vesting conditions are modified in a way that is unfavorable to employees, the modified vesting conditions will not be considered when processing the vesting conditions.

If the company cancels the granted equity instruments or settles the granted equity instruments during the waiting period (except for cancellation due to failure to meet vesting conditions), the cancellation or settlement will be treated as accelerated vesting, and the amount originally recognized during the remaining waiting period will be immediately recognized.

Accounting treatment of share-based payment transactions involving different enterprises within an enterprise group

(1) If the settlement enterprise settles with its own equity instruments, the share-based payment transaction will be treated as equity-settled share-based payment. Otherwise, share-based payments are treated as cash-settled.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

If the settlement enterprise is an investor in the enterprise that receives services, it shall be recognized as a long-term equity investment in the enterprise that receives services based on the fair value of the equity instruments or the fair value of the liabilities on the date of grant, and the capital reserve (other capital reserve) or liabilities shall be recognized at the same time.

(2) If the service-receiving enterprise has no settlement obligation or the employees of the enterprise are granted equity instruments of its own, the share-based payment transaction shall be treated as equity-settled share-based payment; if the service-receiving enterprise has settlement obligations and the employees of the enterprise are granted equity instruments of other enterprises within the enterprise group, the share-based payment transaction shall be treated as equity-settled share-based payment.

Processing of share-based payments for cash settlement.

(34) Repurchase the company’s shares

If a company adopts the method of acquiring the company's stocks and reduces its capital after approval according to legal procedures, the share capital will be reduced by the total face value of the canceled stocks, and the owner's equity will be adjusted by the difference between the price paid for repurchasing the shares (including transaction costs) and the face value of the shares. The part exceeding the total face value shall be offset against the capital reserve (share premium), surplus reserve and undistributed profits in sequence; if it is lower than the total face value, the part lower than the total face value shall increase the capital reserve (share premium).

Before the shares repurchased by the company are canceled or transferred, they are managed as treasury shares, and all expenditures for repurchasing the shares are converted into the cost of the treasury shares.

When treasury shares are transferred, the portion of the transfer income that is higher than the cost of the treasury shares will increase the capital reserve (equity premium); the portion that is lower than the cost of the treasury shares will be offset in turn against the capital reserve (equity premium), surplus reserve, and undistributed profits. If the company's shares are repurchased due to the implementation of equity incentives, during the repurchase, all expenditures for the repurchased shares will be treated as treasury shares and will be registered for future reference.

(35) Income

The company fulfills its performance obligations in the contract, that is, when the customer obtains control of the relevant goods, revenue is recognized. Obtaining control over relevant goods means being able to direct the use of the goods and obtain almost all economic benefits from them. If the contract contains two or more performance obligations, the Company will allocate the transaction price to each individual performance obligation based on the relative proportion of the standalone selling price of the goods or services promised by each individual performance obligation on the contract commencement date. The Company measures revenue based on the transaction price allocated to each individual performance obligation.

Transaction price refers to the amount of consideration that the Company expects to be entitled to receive for transferring goods or services to customers, excluding amounts collected on behalf of third parties and amounts expected to be returned to customers. The company determines the transaction price based on the terms of the contract and its past practices, and when determining the transaction price, it takes into account the impact of variable consideration, significant financing components in the contract, non-cash consideration, consideration payable to customers and other factors. The Company determines transaction prices that include variable consideration at an amount that does not exceed the amount at which a significant reversal of accumulated recognized revenue is unlikely to occur when the relevant uncertainty is eliminated. If there is a significant financing component in the contract, the company determines the transaction price based on the amount payable in cash when the customer obtains control of the goods or services, and uses the actual profit Jilin Aodong Pharmaceutical Group Co., Ltd. during the contract period.

2025

Notes to Financial Statements

The difference between the transaction price and the contract consideration is amortized using the rate method. If one of the following conditions is met, the performance obligation is performed within a certain period of time; otherwise, the performance obligation is performed at a certain point in time:

(1) When the company performs the contract, the customer obtains and consumes the economic benefits brought by the company's performance. (2) Customers can control the products under construction during the company's performance of the contract.

(3) The goods produced by the company during the performance of the contract have irreplaceable uses, and the company has the right to collect payment for the cumulative performance part completed so far during the entire contract period.

For performance obligations performed within a certain period of time, the Company will recognize revenue based on the performance progress during that period, except where the performance progress cannot be reasonably determined. The company considers the nature of the goods or services and uses the output method or the input method to determine the progress of the contract. When the progress of contract performance cannot be reasonably determined and the costs incurred are expected to be compensated, the Company will recognize revenue based on the amount of costs incurred until the progress of contract performance can be reasonably determined.

For performance obligations fulfilled at a certain point in time, the Company recognizes revenue at the point when the customer obtains control of the relevant goods. When judging whether the customer has obtained control of the goods or services, the company considers the following signs:

(1) The company has the current right to receive payment for the product, that is, the customer has the current payment obligation for the product. (2) The company has transferred the legal ownership of the goods to the customer, which means that the customer already has the legal ownership of the goods.

(3) The company has physically transferred the commodity to the customer, that is, the customer has physically taken possession of the commodity.

(4) The company has transferred the main risks and rewards of ownership of the commodity to the customer, that is, the customer has obtained the main risks and rewards of ownership of the commodity.

(5) The customer has accepted the product.

Specific principles for revenue recognition:

①Retail business

The company's pharmaceutical retail business is a performance obligation that is fulfilled at a certain point in time. The company conducts cash sales (including bank cards) or medical insurance card sales through its retail stores to sell goods to retail customers and collect prices or obtain bank card payment receipts and medical insurance card payment receipts to recognize the realization of sales revenue.

②Wholesale business

The company's pharmaceutical wholesale business is a performance obligation that is performed at a certain point in time. After the company signs a purchase and sales contract with the buyer, it will send the goods to the buyer according to the buyer's purchase requirements. Generally, after receiving a receipt signed by the buyer, the company will confirm the transfer of the main risks and rewards of drug ownership and confirm the realization of sales revenue.

(36) Government subsidies

1. Judgment basis and accounting treatment method for asset-related government subsidies

Government subsidies refer to the monetary assets and non-monetary assets that the company obtains free of charge from the government. Government subsidies are divided into asset-related government subsidies and income-related government subsidies.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

The company's asset-related government subsidies refer to government subsidies obtained by the enterprise and used to purchase, construct or otherwise form long-term assets. Government subsidies related to assets should be offset against the book value of the relevant assets or recognized as deferred income. If government subsidies related to assets are recognized as deferred income, they shall be included in profits and losses in installments according to a reasonable and systematic method within the useful life of the relevant assets. Government subsidies measured according to the nominal amount are directly included in the current profit and loss. If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the undistributed balance of relevant deferred income shall be transferred to the profits and losses of the current period of asset disposal.

2. Judgment basis and accounting treatment method for government subsidies related to income

The company's income-related government subsidies refer to government subsidies other than asset-related government subsidies. For government subsidies that contain both asset-related parts and income-related parts, different parts should be distinguished and accounted for separately; if it is difficult to distinguish, they should be classified as a whole as income-related government subsidies.

(1) If it is used to compensate the enterprise for relevant costs or losses in the future period, it is recognized as deferred income, and during the period when the relevant costs or losses are recognized, it is included in the current profit and loss or offsets the relevant costs;

(2) If it is used to compensate for the relevant costs or losses incurred by the enterprise, it shall be directly included in the current profit and loss or offset the relevant costs.

Government subsidies related to the daily activities of the enterprise shall be included in other income or offset relevant costs and expenses according to the economic business essence. Government subsidies that have nothing to do with the daily activities of the enterprise shall be included in non-operating income.

(37) Deferred income tax assets and deferred income tax liabilities

1. Basis for recognizing deferred income tax assets

(1) The company recognizes deferred income tax assets arising from deductible temporary differences to the extent that it is likely to obtain taxable income in the future that can be used to offset the deductible temporary differences. However, deferred income tax assets arising from the initial recognition of assets or liabilities in transactions with the following characteristics will not be recognized:

①The transaction or event does not constitute a business combination;

② When the transaction occurs, it neither affects accounting profits nor taxable income (or deductible losses).

(2) The company recognizes corresponding deferred income tax assets for deductible temporary differences related to investments in subsidiaries, associate companies and joint ventures, and if the following conditions are met at the same time:

① Temporary differences may reverse in the foreseeable future;

② It is very likely that taxable income will be obtained in the future to offset the temporary differences.

(3) For deductible losses and tax credits that can be carried forward to future years, the company recognizes corresponding deferred income tax assets to the extent that it is likely to obtain future taxable income that can be used to offset the deductible losses and tax credits.

2. Basis for recognizing deferred income tax liabilities

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Except for deferred income tax liabilities arising from the following circumstances, the Company recognizes all deferred income tax liabilities arising from taxable temporary differences:

(1) Initial recognition of goodwill;

(2) Initial recognition of assets or liabilities arising from transactions that simultaneously meet the following characteristics:

①The transaction is not a business combination;

② When a transaction or event occurs, it will neither affect accounting profits nor taxable income (or deductible losses). (3) The company has taxable temporary differences related to its investments in subsidiaries, associate companies and joint ventures, and the following conditions are met at the same time:

① The investing enterprise can control the time of reversal of temporary differences;

②The temporary difference is likely not to be reversed in the foreseeable future.

(38) Leasing

1. Accounting treatment of leased assets

On the start date of the lease period, the Company recognizes right-of-use assets and lease liabilities for leases other than short-term leases and low-value asset leases, and recognizes depreciation expenses and interest expenses respectively during the lease period.

The company uses the straight-line method in each period of the lease term to include lease payments for short-term leases and low-value asset leases into current expenses.

(1) Right-of-use assets

Right-of-use assets refer to the lessee’s right to use the leased assets during the lease term. On the commencement date of the lease term, the right-of-use asset is initially measured at cost. This cost includes: ① the initial measurement amount of the lease liability; ② the lease payment amount paid on or before the start date of the lease term, and if there is a lease incentive, the amount related to the lease incentive that has been enjoyed is deducted; ③ the initial direct costs incurred by the lessee; ④ the lessee's expected costs to dismantle and remove the leased asset, restore the site where the leased asset is located, or restore the leased asset to the state agreed upon in the lease terms. The company's right-of-use assets are depreciated using the straight-line method. If it is reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, depreciation will be accrued within the estimated remaining useful life of the leased asset; if it is not reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, depreciation will be accrued during the shorter of the lease term and the remaining useful life of the leased asset.

The company determines whether the right-of-use assets have been impaired and performs accounting treatment in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 8 - Impairment of Assets".

(2) Lease liabilities

Lease liabilities are initially measured based on the present value of the unpaid lease payments at the beginning of the lease term. Lease Payment Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

The amount includes: ① fixed payments (including substantial fixed payments), if there is a lease incentive, the amount related to the lease incentive is deducted; ② variable lease payments that depend on the index or ratio; ③ the amount expected to be paid based on the guaranteed residual value provided by the lessee; ④ the exercise price of the purchase option, provided that the lessee is reasonably certain that the option will be exercised; ⑤ the amount required to exercise the option to terminate the lease, provided that the lease term reflects that the lessee will exercise the option to terminate the lease;

The Company uses the incremental borrowing rate as the discount rate. The company calculates the interest expense of the lease liability in each period during the lease term based on a fixed periodic interest rate and includes it in financial expenses. The periodic interest rate refers to the discount rate used by the Company or a revised discount rate.

Variable lease payments that are not included in the measurement of lease liabilities are included in the current profit and loss when actually incurred.

When the company's evaluation results of the lease renewal option, lease termination option or purchase option change, the lease liability will be remeasured based on the present value calculated by the changed lease payment and the revised discount rate, and the book value of the right-of-use asset will be adjusted accordingly. When the actual lease payments, the expected amount payable of the guaranteed residual value, or the variable lease payments that depend on an index or ratio change, the lease liability is remeasured based on the present value of the changed lease payments and the original discount rate, and the book value of the right-of-use asset is adjusted accordingly.

(3) As a lessee, the judgment basis and accounting treatment method for simplified treatment of short-term leases and low-value asset leases

For short-term leases with a lease period of no more than 12 months, as well as leases with a low value when a single asset is new, the company chooses not to recognize right-of-use assets and lease liabilities, and the relevant rental expenses will be included in the current profit and loss or related asset costs on a straight-line basis in each period during the lease period.

2. Accounting treatment of leased assets

(1) Accounting treatment of operating leases

The Company uses the straight-line method to recognize the lease receipts from operating leases as rental income in each period during the lease term. The Company capitalizes the initial direct expenses related to operating leases and includes them into current income in installments during the lease period on the same recognition basis as rental income.

(2) Accounting treatment of financial leases

On the start date of the lease, the Company recognizes the difference between the sum of the finance lease receivable, the unguaranteed residual value and its present value as unrealized financing income, and recognizes it as lease income in each period in which the rent is received in the future. The initial direct costs incurred by the company related to the leasing transaction are included in the initial entry value of the finance lease receivable.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(39) Changes in major accounting policies and accounting estimates

1. Changes in major accounting policies

There were no changes in important accounting policies during the reporting period.

2. Changes in accounting estimates

The main accounting estimates have not changed during the reporting period.

(40) Other major accounting policies, accounting estimates and financial statement preparation methods

Measurement of income tax expenses:

1. On the balance sheet date, current income tax liabilities (or assets) formed in the current period and previous periods are measured at the amount of income tax expected to be paid (or refunded) calculated in accordance with the provisions of the tax law; deferred income tax assets and deferred income tax liabilities are measured at the applicable tax rate during the period when the asset is expected to be recovered or the liability is paid off, in accordance with the provisions of the tax law. If the applicable tax rate changes, the recognized deferred income tax assets and deferred income tax liabilities should be remeasured. Except for the deferred income tax assets and deferred income tax liabilities arising from transactions or events directly recognized in the owner's equity, the impact shall be included in the income tax expenses of the current period of change.

2. On the balance sheet date, the company reviews the book value of deferred income tax assets. If it is probable that sufficient taxable income will not be available in future periods to offset the benefits of deferred tax assets, the carrying amount of the deferred tax assets will be reduced. The amount of the write-down is reversed when it is probable that sufficient taxable income will be obtained.

4. Taxes

The company’s main tax types and tax rates

Type of tax Tax calculation basis Tax rate

Sales of goods and provision of taxable services calculated in accordance with tax laws

and sales of services, intangible assets or real estate acquisitions

6%, 9%, 13% or levy rate 3%, 5% value-added tax. The output tax is calculated based on the income and is allowed in the current period of deduction.

After the input tax is deducted, the difference is the value-added tax payable

Property tax: original value of property or rent 1.2%, 12%

Urban maintenance and construction tax turnover tax payable 1%, 5%, 7%

Consumption tax Taxable sales income and quantity 20% plus 0.5 yuan/500ml education surcharge Amount of turnover tax payable 3%

Local education surcharge, turnover tax payable 2%

Corporate income tax: taxable income 15%, 20%, 25%, 16.5%

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

The income tax rates applicable to the company's different tax entities are as follows:

Name of taxpayer Applicable income tax rate Jilin Aodong Pharmaceutical Group Co., Ltd. 25% Jilin Aodong Yanbian Pharmaceutical Co., Ltd. 15% Jilin Aodong Taonan Pharmaceutical Co., Ltd. 15% Jilin Aodong Pharmaceutical Group Yanji Co., Ltd. 15% Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd. 15% Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd. 25% Jilin Aodong Pharmaceutical Co., Ltd. 25% Jilin Aodong Luye Co., Ltd. Duty-free Jilin Aodong Ruifeng Technology Co., Ltd. 15% Yanbian Highway Construction Co., Ltd. 20% Jilin Aodong Enzyme Technology Co., Ltd. 15% Jilin Aodong Health Technology Co., Ltd. 15% Jilin Aodong Shihang Pharmaceutical Co., Ltd. 15% Jilin Aodong Linyuan Pharmaceutical Marketing Co., Ltd. 25% Jilin Aodong Pharmaceutical Technology Co., Ltd. 25% Jilin Aodong Biotechnology Co., Ltd. 25% Jilin Zhengrong Pharmaceutical Development Co., Ltd. 25% Jilin Aodong Industrial Park Public Asset Management Co., Ltd. 25% Aodong International (Hong Kong) Industrial Co., Ltd. 16.5% Jilin Aodong Pharmacy Chain Co., Ltd. 25% Jilin Aodong Innovative Pharmaceutical Technology Co., Ltd. 20% Beijing Yingweiqi Information Consulting Co., Ltd. 20% Fushun Aodong Pharmacy Chain Co., Ltd. 25% Aodong Pharmacy Chain (Yanbian Prefecture) Co., Ltd. 20% Jilin Aodong Pharmacy Pharmaceutical Co., Ltd. 25% Dunhua Hongshixiang Renhe Crops Co., Ltd. Duty-free Jilin Aodong Medicinal Seed Industry Technology Co., Ltd. 25% Anguo Aodong Shihang Pharmaceutical Co., Ltd. 20% Bozhou Aodong Shihang Pharmaceutical Co., Ltd. 20% Dingxi Aodong Shihang Pharmaceutical Co., Ltd. 20% Aodong Pharmaceutical (Anhui) Co., Ltd. 20% Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Name of taxpayer Applicable income tax rate

Hangzhou Aodong Interactive Media Co., Ltd. 20%

Anhui Aodong Pharmaceutical Co., Ltd. 20%

1. According to the first batch of high-tech enterprise registration lists certified and reported by the Jilin Provincial Certification Agency in 2023, subsidiaries Jilin Aodong Yanbian Pharmaceutical Co., Ltd., Jilin Aodong Taonan Pharmaceutical Co., Ltd., Jilin Aodong Health Technology Co., Ltd., and Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd. passed the high-tech enterprise review on October 16, 2023, and enjoy a three-year corporate income tax preferential policy of 15% in accordance with relevant regulations.

2. According to the Ministry of Finance Announcement No. 23 of 2020, the Ministry of Finance, the State Administration of Taxation, and the National Development and Reform Commission announced the continuation of the corporate income tax policy for the development of the western region and the approval of the local tax bureau. The subsidiaries Jilin Aodong Yanbian Pharmaceutical Co., Ltd. and Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd., Jilin Aodong Enzyme Technology Co., Ltd., Jilin Aodong Pharmaceutical Group Yanji Co., Ltd., Jilin Aodong Ruifeng Technology Co., Ltd., and Jilin Aodong Shihang Pharmaceutical Co., Ltd. enjoy the preferential corporate income tax policy of 15% for the Western Development.

3. Subsidiary Jilin Aodong Deer Industry Co., Ltd. and its subsidiary Dunhua Hongshixiang Renhe Crops Co., Ltd. enjoy tax reductions and exemptions on income from agriculture, forestry, animal husbandry, and fishery projects.

4. According to the Ministry of Finance and the State Administration of Taxation's Announcement No. 6 of 2023 "Announcement of the Ministry of Finance and the State Administration of Taxation on Preferential Income Tax Policies for Small and Micro Enterprises and Individual Industrial and Commercial Households", from January 1, 2023 to December 31, 2024, the annual taxable income of small and low-profit enterprises does not exceed 1 million yuan, a reduced rate of 25% will be included in the taxable income, and the corporate income tax will be paid at a tax rate of 20%. According to the Announcement No. 12 of 2023 of the Ministry of Finance and the State Administration of Taxation, "Announcement on Relevant Tax Policies to Further Support the Development of Small and Micro Enterprises and Individual Industrial and Commercial Households," the policy of calculating taxable income at a reduced rate of 25% for small and low-profit enterprises and paying corporate income tax at a rate of 20% will continue until December 31, 2027. Jilin Aodong Innovation Pharmaceutical Technology Co., Ltd., Yanbian Highway Construction Co., Ltd., Aodong Pharmacy Chain (Yanbian Prefecture) Co., Ltd., Beijing Yingweiqi Information Consulting Co., Ltd., Anguo Aodong Shihang Pharmaceutical Co., Ltd., Bozhou Aodong Shihang Pharmaceutical Co., Ltd. The company, Dingxi Aodong Shihang Pharmaceutical Co., Ltd., Aodong Pharmaceutical (Anhui) Co., Ltd., Anhui Aodong Pharmaceutical Co., Ltd., and Hangzhou Aodong Interactive Media Co., Ltd. meet the certification of small and low-profit enterprises, and will declare and pay corporate income tax as small and low-profit enterprises in 2025.

In addition to the above-mentioned companies, the group company headquarters and subsidiaries Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd., Jilin Aodong Biotechnology Co., Ltd., Jilin Aodong Linyuan Pharmaceutical Marketing Co., Ltd., and Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Jilin Aodong Pharmaceutical Technology Co., Ltd., Jilin Aodong Industrial Park Public Asset Management Co., Ltd., Jilin Zhengrong Pharmaceutical Development Co., Ltd., Jilin Aodong Pharmacy Chain Co., Ltd., Jilin Aodong Pharmaceutical Co., Ltd., and third-tier subsidiaries Fushun Aodong Pharmacy Chain Co., Ltd., Jilin Aodong Medicinal Seed Industry Technology Co., Ltd., and Jilin Aodong Pharmacy Pharmaceutical Co., Ltd. implement a corporate income tax rate of 25%.

East International (Hong Kong) Industrial Co., Ltd. implements a corporate income tax rate of 16.50%.

5. Notes on Consolidated Financial Statement Items

(The following amounts are in RMB unless otherwise specified)

(1) Monetary funds

1. Classification list:

Item Ending balance Beginning balance

Cash on hand 75,931.17 198,555.01 Bank deposits 1,153,283,902.47 1,079,282,999.05 Other monetary funds 9,178,372.39 27,522,192.59

Total 1,162,538,206.03 1,107,003,746.65 Including: Total amount deposited abroad 10,018,219.77 5,297,852.69

2. There are restrictions on the use of funds at the end of the period:

Item Ending balance Beginning balance

Online platform sales deposit 1,897,033.83 1,357,292.26 Bank acceptance bill deposit 5,000,000.00

Litigation deposit 2,821,582.76

Total 9,718,616.59 1,357,292.26

3. The company’s funds deposited abroad at the end of the period:

The company's subsidiary Aodong International (Hong Kong) Industrial Co., Ltd. held bank deposits of US$13.78, equivalent to RMB 96.86, at the end of 2025; bank deposits of HK$5,652,746.75, equivalent to RMB 5,105,673.92; and other monetary funds of HK$5,438,817.77, equivalent to RMB.

4,912,448.99 yuan.

4. The company does not have any funds with potential recovery risks at the end of the period.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(2) Trading financial assets

Item Ending balance Beginning balance

Measured at fair value with changes included in current profit and loss

1,800,368,175.49 1,568,102,858.51 beneficial financial assets

Including: Equity instrument investment 1,726,333,547.20 1,469,567,675.18 Others 74,034,628.29 98,535,183.33

Total 1,800,368,175.49 1,568,102,858.51 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(3) Accounts receivable

1. Accounts receivable are listed according to the bad debt accrual method:

Ending balance Beginning balance

Book balance Bad debt provision Book balance Type of bad debt provision

Provision Proportion Book Value Provision Proportion Book Value Amount Proportion (%) Amount Amount Proportion (%) Amount

(%) (%) Accounts receivable for which bad debt provisions are made individually 13,127,137.45 1.77 13,127,137.45 100.00 12,958,492.60 1.50 11,107,126.64 85.71 1,851,365.96 Of which:

The individual amount is significant and bad provisions are made individually

accounts receivable

The individual amount is not significant but the individual provision is made

13,127,137.45 1.77 13,127,137.45 100.00 12,958,492.60 1.50 11,107,126.64 85.71 1,851,365.96 Accounts receivable for bad debt provision

Accounts receivable with provision for bad debts on a group basis 728,211,008.39 98.23 61,421,795.92 8.43 666,789,212.47 852,333,543.32 98.50 66,779,442.38 7.83 785,554,100.94 of which:

Provision for bad debts based on aging combinations

728,211,008.39 98.23 61,421,795.92 8.43 666,789,212.47 852,333,543.32 98.50 66,779,442.38 7.83 785,554,100.94Accounts receivable

Total 741,338,145.84 100.00 74,548,933.37 10.06 666,789,212.47 865,292,035.92 100.00 77,886,569.02 9.00 787,405,466.90 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Accounts receivable for which bad debt provisions are made individually:

(1) At the end of the period, the company had no accounts receivable with a single significant amount and for which bad debt provisions were individually made.

(2) Accounts receivable whose individual amounts are not significant at the end of the period but for which bad debt provisions are individually made:

Beginning balance Closing balance

Name Provision Ratio Remarks

Book balance Provision for bad debts Book balance Provision for bad debts

Example(%)

Has been sued and executed by Guangzhou Rongyuan

The person currently has no property to support the chain co., ltd.

4,079,911.37 2,241,712.41 4,079,911.37 4,079,911.37 100.00 It is expected that the amount cannot be recovered

The account age is long, and it has been approved by the public to transform the Chinese medicine

Security Agency Full Distribution Co., Ltd.

2,143,689.70 2,143,689.70 2,135,689.70 2,135,689.70 100.00 It is estimated that the amount cannot be recovered

China Da Hengbei

The account age is relatively long, and Jinglong Hi-Tech Co., Ltd.

Security Agency Full Power Technology Co., Ltd.

1,900,000.00 1,900,000.00 1,900,000.00 1,900,000.00 100.00 It is expected that the money will not be recovered by the Hunchun Service

at

The account has a long age, and it is expected that the amount will not be recovered after being jointly recovered by Jiangxi Tianru Medical Security Agency Pharmaceutical Co., Ltd. 1,100,000.00 1,100,000.00 1,100,000.00 1,100,000.00 100.00

The account has a long age and is leased by Jiangxi Ziguang

Security Agency Full Leasing Services Co., Ltd.

690,000.00 690,000.00 690,000.00 690,000.00 100.00 It is estimated that the amount cannot be recovered by the company

The payment and account age are longer than those of Fujian Youmani. The public security agency Food Co., Ltd. fully cooperated in the recovery, 448,200.00 448,200.00 448,200.00 448,200.00 100.00

The company expects the money to be unrecoverable

The account has a long age, and it is expected that the amount will not be recovered after the Tumen Storage and Transportation Public Security Bureau fully cooperates with the company to recover it.

The account age is relatively long, and Jilin Agricultural University

Security agencies are fully committed to allocating school funds for settlement

200,000.00 200,000.00 200,000.00 200,000.00 100.00 It is estimated that the amount cannot be recovered

The account age is relatively long, and Huang Mingpei was fully allocated by the public security organ.

174,237.57 174,237.57 174,237.57 174,237.57 100.00 It is estimated that the amount cannot be recovered

The account age is relatively long, and Li Yang has been fully allocated by the public security organ.

121,394.00 121,394.00 121,394.00 121,394.00 100.00 It is estimated that the amount cannot be recovered

The account age is relatively long, and it is estimated that the amount cannot be recovered after being jointly recovered by Gongliuhe Shuangli Plastics Co., Ltd. 116,216.50 116,216.50 116,216.50 116,216.50 100.00

Jilin Province Huangni has a long account age and has been jointly recovered by the Gonghe Forestry Bureau and the Security Bureau. The amount is expected to be unrecoverable.

company

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Beginning balance Closing balance

Name Provision Ratio Remarks Book Balance Bad Debt Provision Book Balance Bad Debt Provision

Example(%)

The account age is longer, and the

The security agencies are fully equipped with Li Jun

103,279.79 103,279.79 103,279.79 103,279.79 100.00 It is estimated that the amount cannot be recovered

The account age is relatively long, and it has been approved by Tonghua Great Wall Pharmaceutical Co., Ltd.

Security Bureau Quanli Distribution Co., Ltd.

89,488.65 89,488.65 64,488.65 64,488.65 100.00 It is estimated that the amount cannot be recovered

The account age is long, and other insignificant amounts are expected to be unrecoverable. The security agencies will fully cooperate with the recovery.

12,958,492.60 11,107,126.64 13,127,137.45 13,127,137.45

3. In the combination, accounts receivable for which bad debt provisions are made based on the aging combination:

Ending balance

Aging

Balance of accounts receivable Bad debt provision Proportion of provision (%) Within 1 year 582,381,701.91 29,119,085.10 5.00 1-2 years 87,430,633.43 8,743,063.34 10.00 2-3 years 34,246,054.48 6,849,210.90 20.00 More than 3 years 24,152,618.57 16,710,436.58 ---Including: 3-4 years 8,778,552.27 2,633,565.68 30.00 4-5 years 6,485,976.99 5,188,781.59 80.00 More than 5 years 8,888,089.31 8,888,089.31 100.00

Total 728,211,008.39 61,421,795.92 ---

4. Accounts receivable are listed according to age:

Ending balance Beginning balance

Aging

Within 1 year 582,381,701.91 668,240,102.61

Among them: Items within one year

Subtotal within one year 582,381,701.91 668,240,102.61 1 to 2 years 88,194,612.63 143,304,393.32 2 to 3 years 37,720,893.50 20,788,442.97 More than 3 years 33,040,937.80 32,959,097.02 3 to 4 years 8,857,376.52 11,157,386.51

4 to 5 years 6,548,752.49 5,534,194.39 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Ending balance Beginning balance

Aging

More than 5 years 17,634,808.79 16,267,516.12Total 741,338,145.84 865,292,035.92Other explanation: includes single provision and combined provision.

5. Bad debt provisions accrued, recovered or reversed in the current period:

Amount of changes in the current period Closing balance category Opening balance Recovery or write-off

Provision

transfer back

Consolidation of single items with significant amounts

Separate provision for bad debts

Accounts receivable

The individual amount is not significant but

Separate provision for bad debts

Accounts receivable 11,107,126.64 2,020,010.81 13,127,137.45

Provision for bad debts based on aging combination

Accounts receivable for account preparation 66,779,442.38 -5,357,646.46 61,421,795.92 Total 77,886,569.02 -3,337,635.65 74,548,933.37

6. Accounts receivable and contract assets of the top five closing balances collected by debtors:

Accounts receivable and combined

Accounts receivable, bad debts, quasi-accounts receivable, ending balance, contract assets, accounts receivable and contracts, ending balance of same assets

Unit name Provision and contract asset reduction Closing balance Assets closing balance Proportion of total amount

value provision ending balance

(%)

Yanbian Traditional Chinese Medicine Hospital Yanji Traditional Chinese Medicine Hospital

65,925,565.37 65,925,565.37 8.89% 4,591,379.61 Hospital

The First Hospital of Jilin University 57,815,097.96 57,815,097.96 7.80% 2,890,754.90 Yanbian Korean Autonomous Prefecture Korean Medicine Hospital

Hospital (the second one in Yanbian Korean Autonomous Prefecture)

37,050,331.62 37,050,331.62 5.00% 4,044,252.11 People’s Hospital, Yanbian Korean Autonomous

State Cancer Hospital)

Jilin Boao Pharmaceutical Co., Ltd.

11,185,904.85 11,185,904.85 1.51% 559,295.24Company

Dashanlin Pharmaceutical Group Co., Ltd.

10,997,032.64 10,997,032.64 1.48% 726,170.47 Company

Total: 182,973,932.44 182,973,932.44 24.68% 12,811,852.33

7. At the end of the period, the Company had no receivables derecognized due to transfer of financial assets.

8. At the end of the period, the company has no assets or liabilities arising from the transfer of accounts receivable and continued involvement.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

9. There is no recovery in this period of the full provision of bad debt provisions in previous years, and the proportion of bad debt provisions in previous years is relatively large.

accounts receivable or recovered through other means such as debt restructuring.

(4) Receivables Financing

1. Receivables financing classification:

Item Closing balance Opening balance Bank acceptance bill

334,525,194.58 369,928,243.51 total

334,525,194.58 369,928,243.51Other instructions

At the end of the period, the company's bank acceptance bills intended to be endorsed or discounted among the bills receivable are listed as receivable financing.

2. Financing of receivables that have been endorsed or discounted by the company and have not yet matured on the balance sheet date:

Category Status Amount derecognized at the end of the period Amount not derecognized at the end of the period Bank acceptance bill Endorsement 95,030,044.50

Bank Acceptance Bill Discount -

Total 95,030,044.50

3. There is no mortgage or pledge of notes receivable in the closing balance of accounts receivable financing.

(5) Prepaid accounts

1. Prepayments are listed based on aging:

Ending balance Beginning balance aging

Book balance proportion (%) Book balance proportion (%) Within 1 year 21,656,164.73 86.98 24,372,423.21 93.48 1-2 years 2,606,078.56 10.47 956,274.17 3.67 2-3 years 450,808.64 1.81 207,000.20 0.79 More than 3 years 183,941.28 0.74 537,108.23 2.06

Total 24,896,993.21 100.00 26,072,805.81 100.00

2. Situation of the top five companies in terms of prepayment amount:

Accounting for the ending balance

Prepayment object Relationship with the company Book balance Aging

Proportion (%)

Henan Guoxin Traditional Chinese Medicine Co., Ltd. Not included in the scope of consolidation

3,566,600.00 14.33 Within 1 year

internal related parties

Responsible company

Chongqing University of Traditional Chinese Medicine Supplier 2,000,000.00 8.03 1-2 years Jilin Huakang Pharmaceutical Co., Ltd.

Supplier 1,863,696.00 7.49 Limited company within 1 year

Yunnan Taihua Fenggong Pharmaceutical has suppliers 1,821,500.00 7.32 Within 1 year Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Account for prepayment objects in the closing balance. Relationship with the company. Book balance. Aging of accounts.

Proportion (%) of Co., Ltd.

Jiangxi Hongyu Pharmaceutical Co., Ltd.

Supplier 825,000.00 3.31 Within 1 year

Total -- 10,076,796.00 40.48

(6) Other receivables

Item Closing balance Opening balance Interest receivable

Dividends receivable

Other receivables

25,254,608.98 23,183,058.83 total

25,254,608.98 23,183,058.83 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

1. Other receivables

(1) Other receivables are listed according to the bad debt accrual method:

Ending balance Beginning balance

Book balance Bad debt provision Book balance Type of bad debt provision

Provision Proportion Book Value Provision Proportion Book Value Amount Proportion (%) Amount Amount Proportion (%) Amount

(%) (%)

Other receivables with provision for bad debts individually

11,147,376.13 24.22 9,314,640.84 83.56 1,832,735.29 13,618,641.70 31.48 10,815,243.42 79.41 2,803,398.28

Among them:

The individual amount is significant and bad provisions are made individually

Other receivables prepared for accounts

The individual amount is not significant but the individual provision is made

11,147,376.13 24.22 9,314,640.84 83.56 1,832,735.29 13,618,641.70 31.48 10,815,243.42 79.41 2,803,398.28 Other receivables for bad debt provision

Other receivables with provision for bad debts on a group basis

34,877,332.35 75.78 11,455,458.66 32.84 23,421,873.69 29,643,507.94 68.52 9,263,847.39 31.25 20,379,660.55

Among them:

Provision for bad debts based on aging combinations

34,877,332.35 75.78 11,455,458.66 32.84 23,421,873.69 29,643,507.94 68.52 9,263,847.39 31.25 20,379,660.55 Other receivables

Total 46,024,708.48 100.00 20,770,099.50 45.13 25,254,608.98 43,262,149.64 100.00 20,079,090.81 46.41 23,183,058.83 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(2) Other receivables for which bad debt provisions are made individually:

① At the end of the period, the company has no other receivables that are individually significant and for which bad debt provisions are individually made.

② Other receivables whose individual amounts are not significant at the end of the period but for which bad debt provisions are individually made:

Beginning balance Closing balance

Name Provision Ratio Remarks Book Balance Bad Debt Provision Book Balance Bad Debt Provision

Example(%)

Guangdong Zhancui Food Estimated accounts department 3,500,692.32 1,717,966.37 3,500,692.32 1,938,302.00 55.37

Jilin Province Dongfeng Pharmaceutical Co., Ltd. is unable to recover the shares after deducting the pledged property, and there is no company to pay the debt. The execution property has a long aging, and the public security organ of Guangzhou Liwan District Quanzhongqiao Trading Co., Ltd. 1,203,520.00 1,203,520.00 1,203,520.00 1,203,520.00 100.00 Cooperate fully with the recovery, (Gu Rongzhang) It is expected that the amount cannot be recovered

Nutrition House (Chengdu)

Estimated payment Department Biopharmaceutical Co., Ltd. 921,647.57 467,741.21

Points cannot be recovered from the company

The account age is relatively long, and the public security agency has confirmed that the account is in Xinshenghua, Shaanxi Province.

633,250.00 633,250.00 633,250.00 633,250.00 100.00 Cooperate fully with the recovery, Industrial Co., Ltd.

It is expected that the amount cannot be recovered

Shandong Dong'a Centennial Year

Tang Ejiao Biological Manufacturing Estimated accounts department 465,677.82 172,860.93 465,677.82 195,332.85 41.95

Products Co., Ltd. cannot recover its shares

The account age is relatively long, and the Jilin University Foundation has been approved by the public security organ.

400,000.00 400,000.00 400,000.00 400,000.00 100.00 Cooperate fully with the recovery, School of Medicine

It is expected that the amount cannot be recovered

Weihai Lily Biology

Estimated Payment Department Technology Co., Ltd. 372,369.76 101,887.19

Points cannot be recovered from the company

The account age is relatively long, and other non-significant accounts have been cleared by the public security organs.

4,579,984.23 4,576,517.72 4,944,235.99 4,944,235.99 100.00 Cooperate fully with the recovery, calculated

It is expected that the amount cannot be recovered

Total 13,618,641.70 10,815,243.42 11,147,376.13 9,314,640.84

---

(3) Classification of other receivables according to nature of payment:

Nature of payment Ending balance Beginning balance

Business transactions 40,725,318.48 35,298,867.95

Security deposit 5,299,390.00 7,963,281.69

Total 46,024,708.48 43,262,149.64 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(4) Bad debt provision accrual:

Phase 1 Phase 2 Phase 3 Total next 12 months Expectation for the entire duration Expectation for the entire duration

Provision for bad debts

Expected credit losses Credit losses (not issued Credit losses (issued

Credit impairment occurs due to loss) Credit impairment occurs due to loss)

Balance on January 1, 2025 9,263,847.39 10,815,243.42 20,079,090.81 Balance on January 1, 2025

---

This issue

Provision for the current period 2,191,611.27 -1,500,602.58 691,008.69 Write-off for the current period

Balance on December 31, 2025 11,455,458.66 9,314,640.84 20,770,099.50

(5) Other receivables for which bad debt provisions are made based on aging combinations:

Ending balance

Aging

Balance of other receivables Bad debt provision Proportion (%) Within 1 year 15,717,516.67 785,875.83 5.00 1-2 years 4,599,702.33 459,970.23 10.00 2-3 years 3,197,079.96 639,415.99 20.00 More than 3 years 11,363,033.39 9,570,196.61 ---Including: 3-4 years 556,485.43 166,945.63 30.00 4-5 years 7,016,484.90 5,613,187.92 80.00 More than 5 years 3,790,063.06 3,790,063.06 100.00

Total 34,877,332.35 11,455,458.66 ---

(6) Other receivables are listed based on aging:

Aging Book balance at the end of the period Book balance at the beginning of the period

Within 1 year 15,758,476.67 12,840,753.47

Among them: Items within one year

Subtotal within one year 15,758,476.67 12,840,753.47 1 to 2 years 5,122,959.23 4,333,266.29 2 to 3 years 3,347,079.96 5,968,992.79 More than 3 years 21,796,192.62 20,119,137.09 3 to 4 years

4,102,977.75 7,177,840.30 4 to 5 years

7,116,529.58 1,152,061.50 More than 5 years

10,576,685.29 11,789,235.29 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Total 46,024,708.48 43,262,149.64

(7) Bad debt provisions accrued, recovered or reversed in the current period:

Amount of changes in the current period

Category: Beginning balance, recovery or closing balance, write-off

transfer back

The individual amount is significant and separate

Other provisions for bad debts

Accounts receivable

The individual amount is not significant but the individual amount is

Other companies that make separate provision for bad debts

10,815,243.42 -1,500,602.58 9,314,640.84 Other receivables

Provision for bad debts based on aging combination

Other receivables prepared 9,263,847.39 2,191,611.27 11,455,458.66

Total 20,079,090.81 691,008.69 20,770,099.50

(8) The top five companies in terms of other receivables at the end of the period:

Account for other receivables

Unit name Nature of payment Closing balance Aging Account balance Book balance Proportion of bad debt provision (%)

521,491.75 within 1 year

Yuan, 15,000.00 for 1-2 years

Yanbian Traditional Chinese Medicine Hospital

Current accounts and RMB, 4-5 years

Yanji Traditional Chinese Medicine Hospital 8,921,491.75 19.38 7,012,574.59 Deposit 7,000,000.00 yuan, 5

hospital

1,385,000.00 years and above

Yuan

150,000.00 for 2-3 years

Guangdong Zhancui Food

Current account 3,500,692.32 yuan, 3-4 years 7.61 1,938,302.00 Co., Ltd.

3,350,692.32 yuan

1-2 years 1,500,000.00

Chongqing Kunyuantang Medical Center

Security deposit 2,500,000.00 yuan, 2-3 years 5.43 350,000.00 Pharmaceutical Co., Ltd.

1,000,000.00 yuan

Sandamao, Dunhua City Within 1 year

Forest Production Professional Co., Ltd. Current accounts 1,864,665.39 1,260,122.69 yuan, 1-2 4.05 123,460.40 Cooperative Annual 604,542.70 yuan

Jiangsu Zhongbo Communications

Security deposit 1,610,015.00 Within 1 year 3.50 80,500.75 Co., Ltd.

Total -- 18,396,864.46 39.97 9,504,837.74

(9) There are no other receivables involving government subsidies at the end of the period.

(10) At the end of the period, the company has no other receivables that have been derecognized due to the transfer of financial assets and that have not been fully derecognised.

money.

(11) At the end of the period, the company has no assets or liabilities arising from the transfer of other receivables and continued involvement. Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(7) Inventory

1. Inventory classification:

Ending balance Beginning balance

Project

Book balance Provision for price decline Book value Book balance Provision for price decline Book value Raw materials 339,107,753.46 13,548,954.78 325,558,798.68 405,849,459.83 13,191,522.79 392,657,937.04Consigned processing materials 38,328.54 38,328.54 49,197.08 49,197.08Product in progress 163,297,985.22 28,704,320.85 134,593,664.37 205,489,266.77 6,636,544.08 198,852,722.69 Inventory goods 301,534,454.49 21,453,204.12 280,081,250.37 316,676,343.29 31,215,259.26 285,461,084.03 Consumable biological materials

Produced 56,571,035.56 56,571,035.56 55,384,193.91 55,384,193.91 Self-made semi-finished products 4,092,791.08 657,697.98 3,435,093.10 3,368,128.74 675,290.05 2,692,838.69 Materials in transit 132,743.36 132,743.36 Goods shipped 1,819,953.03 1,819,953.03 1,666,247.08 1,666,247.08Total 866,462,301.38 64,364,177.73 802,098,123.65 988,615,580.06 51,718,616.18 936,896,963.88

2. Preparation for inventory decline:

Increase amount in this period Decrease amount in this period

Item Opening balance Ending balance Provision Others Reversal/write-off Others

Self-made semi-finished products 675,290.05 92,336.28 109,928.35 657,697.98 Raw materials 13,191,522.79 9,016,847.41 8,659,415.42 13,548,954.78 Work in progress 6,636,544.08 23,755,115.53 1,687,338.76 28,704,320.85 Inventory goods 31,215,259.26 27,953,630.83 37,715,685.97 21,453,204.12Total 51,718,616.18 60,817,930.05 48,172,368.50 64,364,177.73Other instructions

The provision for inventory depreciation in the current period was written off in the amount of RMB 48,172,368.50, which was mainly caused by the subsidiary's disposal of some inventories that had been provided for impairment in the current period.

3. The closing balance of inventories does not include the capitalized amount of borrowing costs.

(8) Other current assets

Item Ending balance Beginning balance

Value-added tax input tax to be deducted 4,232,947.71 12,672,359.84 Corporate income tax paid in advance 540,629.97 515,536.55 Prepaid expenses 1,711,025.34 1,153,883.63

Total 6,484,603.02 14,341,780.02 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(9) Long-term equity investment

Increases and decreases in the current period

The opening balance (book price, impairment provision, current period), the ending balance (book price, impairment provision, invested unit, decrease, recognized under the equity method, other comprehensive, other equity changes, declared cash distribution value), the opening balance, additional investment, impairment provision, the ending balance, investment gains and losses from investments, income adjustment, dividends or profits, etc.

Preparation 1. joint venture

small plan

2. Associates

GF Securities Co., Ltd.

24,337,877,955.25 29,050,876.76 2,563,420,291.95 -92,646,452.51 46,763,147.90 -764,955,883.50 26,119,509,935.85 Company (a)

Tonghua Iron and Steel Group Dunhua Tower East

9,675,554.24 9,675,554.24 Mining Co., Ltd.

Jilin Boya Special Medical Nutrition

14,581,143.28 -3,452,076.40 11,129,066.88 Technology Co., Ltd. (b)

Henan Guoxin Chinese Medicinal Materials Co., Ltd.

72,442,371.21 -3,655,058.34 68,787,312.87 Limited liability company (c)

Subtotal 24,352,459,098.53 9,675,554.24 101,493,247.97 2,556,313,157.21 -92,646,452.51 46,763,147.90 -764,955,883.50 26,199,426,315.60 9,675,554.24 Total 24,352,459,098.53 9,675,554.24 101,493,247.97 2,556,313,157.21 -92,646,452.51 46,763,147.90 -764,955,883.50 26,199,426,315.60 9,675,554.24Other instructions

(a) The details of increases and decreases in this period of GF Securities Co., Ltd. (hereinafter referred to as GF Securities) are as follows:

① The additional investment in this period is the purchase of a total of 1.824 million H shares of GF Securities, increasing the investment cost by RMB 29,050,876.76;

② According to the current period, the net profit of GF Securities attributable to shareholders of the parent company was increased by RMB 2,563,420,291.95 based on the equity method;

③According to the current period, the net after-tax amount of other comprehensive income attributable to shareholders of the parent company of GF Securities is reduced by RMB 92,646,452.51;

④ According to changes in other equity interests attributable to shareholders of the parent company of GF Securities in the current period, the amount was increased by RMB 46,763,147.90;

⑤ According to the current dividend of GF Securities, the dividend is reduced by RMB 764,955,883.50.

(b) The long-term equity investment in Jilin Boya Te Medical Nutrition Technology Co., Ltd. decreased in the current period, mainly due to the loss of Jilin Boya Te Medical Nutrition Technology Co., Ltd. in the current period, and the company adjusted it according to the equity method. (c) The increase in the long-term equity investment in Henan Guoxin Chinese Medicinal Materials Co., Ltd. in the current period is due to the investment in it during the current period and the adjustment according to the equity method at the end of the year. Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(10) Other equity instrument investments

1. Investment in other equity instruments:

Designated as measured at fair value and included in other comprehensive in this period. Included in other comprehensive in this period. Accumulated in other comprehensive in this period. Accumulated in it at the end of this period. Dividend income recognized in this period.

Item name Closing balance Opening balance Changes are included in other comprehensive income Gains and losses in other comprehensive income Gains and losses in other comprehensive income

reason

Jilin Aodong Innovation Industry Fund Management Long-term holding, no control 64,329,035.52 111,597,460.98 47,268,425.46 47,268,425.46

Center (Limited Partnership)

and equity investment with significant influence Zhuhai Guangfa Xinde Aodong Pharmaceutical Industry Long-term holding, no control 120,939,255.45 70,845,662.88 50,093,592.57 50,093,592.57

Equity Investment Center (Limited Partnership)

and long-term holding of equity investments with significant influence, without control Zhongshan Xiangshan Small Loan Co., Ltd. 11,533,380.82 12,335,016.67 801,635.85 801,635.85 317,487.58

and equity investment with significant influence in GF Xinde Zhonghenghui Gold (Longyan) shares Long-term holding, no control 6,565,751.44 6,205,846.97 2,598,857.30 2,598,857.30 1,419,399.96

Equity Investment Partnership (Limited Partnership)

and equity investments with significant influence in Ausikang Biotech. Long-term holding, no control 7,082,941.20 12,000,000.00 4,917,058.80 4,917,058.80

(Nantong) Co., Ltd.

and equity investment with significant influence Zhuhai Guangfa Xinde Houze Venture Capital Long-term holding, no control 32,376,710.07 30,000,000.00 2,376,710.07 2,376,710.07

Partnership (limited partnership)

and equity investment with significant influence Jiangsu Langyan Life Technology Holdings Co., Ltd. Long-term holding, no control 6,270,910.52 7,153,472.00 882,561.48 882,561.48

company

and equity investment with significant influence Guangzhou Guangfa Xinde Health Venture Capital Long-term holding, no control 24,666,464.82 44,775,000.00 6,316,785.18 6,316,785.18 2,032,234.92

Fund partnership (limited partnership)

and equity investment Immunic, Inc. (Nasdaq Capital) with significant influence. Long-term holding, no control 2,014.43 3,860.17 1,845.74 13,006,985.57

This market's stock code "IMUX")

Total equity investments with significant influence 273,766,464.27 294,916,319.67 55,069,159.94 60,188,312.51 55,069,159.94 73,193,452.34 3,769,122.46

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. There is no termination of confirmation in this period.

3. Investment in non-trading equity instruments:

Other Comprehensive Other Comprehensive Dividends designated as recognized at fair value plus income for the current period are transferred to Measurement and changes are included in the project Accumulated profits Accumulated losses Transferred to retained income Retained earnings The amount of original earnings of other comprehensive income Reasons

Reasons for Jilin Aodong Innovation Industry Long-term holding, no equity investment in fund management center (limited partnership with 47,268,425.46 control rights and significant influence) Zhuhai Guangfa Xinde Aodong Long-term holding, no equity investment in pharmaceutical industry equity investment 50,093,592.57 control rights and significant influence center (limited partnership)

Long-term holding, no Zhongshan Xiangshan small loan

317,487.58 801,635.85 Control and significant influence Co., Ltd.

Equity investment of GF Xinde Zhongheng Huijin

Long-term holding, no equity investment in (Longyan)

1,419,399.96 2,598,857.30 Control and significant influence partnership (limited partnership

equity investment partners)

Long-term holding, no ownership of Auscom Biotech (Nantong)

4,917,058.80 Control and significant influence Co., Ltd.

Equity investment in Zhuhai Guangfa Xinde Houze Long-term holding, equity investment without venture capital partnership 2,376,710.07 control and significant influence (limited partnership)

Long-term holding, no ownership of Jiangsu Langyan Life Technology

882,561.48 Control and Significant Influence Holdings Co., Ltd.

Equity investment in Guangzhou Guangfa Xinde Health Long-term holding, no venture capital fund partnership 2,032,234.92 6,316,785.18 Control and significant influence Enterprise (limited partnership) Equity investment in Immunic, Inc. (Na Long-term holding, no Stark Capital Market shares 13,006,985.57 Control and significant influence Ticket code "IMUX") Total equity investment 3,769,122.46 55,069,159.94 73,193,452.34

--

(11) Investment real estate

1. Investment real estate using cost measurement model:

Item Houses, buildings Total

1. Original book value

1. Opening balance 36,116,534.88 36,116,534.88 2. Increase in current period 22,032,788.13 22,032,788.13 (1) Transfer of fixed assets 22,032,788.13 22,032,788.13

2. Reduction amount in this period

(1) Transfer to fixed assets

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Houses, buildings Total

4. Closing balance 58,149,323.01 58,149,323.01

2. Accumulated depreciation and accumulated amortization

1. Opening balance 14,002,168.49 14,002,168.49 2. Increase in current period 8,947,463.68 8,947,463.68 (1) Provision or amortization 1,390,854.08 1,390,854.08 (2) Transfer of fixed assets 7,556,609.60 7,556,609.60 3. Decrease amount in this period

(1) Transfer to fixed assets

4. Closing balance 22,949,632.17 22,949,632.17

3. Impairment provision

1. Opening balance

2. Increase in the current period 9,552,332.28 9,552,332.28 (1) Transfer of fixed assets 9,552,332.28 9,552,332.28 3. Decrease in the current period

(1) Disposal

(2) Other transfer-out

4. Closing balance 9,552,332.28 9,552,332.28

4. Book value

1. Book value at the end of the period 25,647,358.56 25,647,358.56 2. Book value at the beginning of the period 22,114,366.39 22,114,366.39

2. The company’s investment real estate that has not completed the ownership certificate at the end of the period:

Item Book value Reason for not completing the ownership certificate Jilin Aodong Pharmaceutical Co., Ltd. Warehouse 539,271.79 Processing in progress

Total 539,271.79 --

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(12) Fixed assets

1. Fixed assets:

Items Houses and buildings Machinery and equipment Transportation equipment Office equipment Others Total

1. Original book value:

1. Opening balance 2,313,223,353.34 1,412,837,078.47 55,568,096.59 65,253,696.38 80,380,644.94 3,927,262,869.72 2. Increase in the current period 144,235,562.45 62,185,374.49 1,432,111.31 2,402,316.07 1,069,817.32 211,325,181.64 (1) Purchase 2,824,563.13 20,501,365.83 1,432,111.31 2,332,078.90 851,852.71 27,941,971.88 (2) Transfer of construction in progress 141,410,999.32 41,684,008.66 70,237.17 217,964.61 183,383,209.76 (3) Transfer of investment real estate

2. Reduction amount in the current period 51,235,786.05 17,201,557.52 3,688,601.38 2,280,245.74 1,342,102.97 75,748,293.66 (1) Disposal or scrapping 29,202,997.92 17,201,557.52 3,688,601.38 2,280,245.74 1,342,102.97 53,715,505.53 (2) Transferred to investment real estate 22,032,788.13 22,032,788.13 4. Closing balance 2,406,223,129.74 1,457,820,895.44 53,311,606.52 65,375,766.71 80,108,359.29 4,062,839,757.70

2. Accumulated depreciation

1. Opening balance 701,615,899.43 947,156,985.04 36,580,507.34 51,122,297.63 63,338,715.40 1,799,814,404.84 2. Increase in the current period 68,868,166.03 74,073,886.60 2,743,522.97 3,990,443.55 2,720,385.91 152,396,405.06 (1) Provision 68,868,166.03 74,073,886.60 2,743,522.97 3,990,443.55 2,720,385.91 152,396,405.06 (2) Transfer of investment real estate

2. Decrease amount in the current period 34,497,632.81 15,217,926.61 2,177,498.87 2,067,503.99 998,791.81 54,959,354.09 (1) Disposal or scrapping 26,941,023.21 15,217,926.61 2,177,498.87 2,067,503.99 998,791.81 47,402,744.49 (2) Transferred to investment real estate 7,556,609.60 7,556,609.60 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Items Houses and buildings Machinery and equipment Transportation equipment Office equipment Others Total 4. Closing balance 735,986,432.65 1,006,012,945.03 37,146,531.44 53,045,237.19 65,060,309.50 1,897,251,455.81

3. Impairment provision

1. Opening balance 26,178,164.35 19,891,997.27 392,448.87 1,151,854.38 47,614,464.87 2. Increase in the current period 99,640,163.18 20,677,764.36 23,592.56 47,741.50 150,329.79 120,539,591.39 (1) Provision 99,640,163.18 20,677,764.36 23,592.56 47,741.50 150,329.79 120,539,591.39 3. Reduction amount in the current period 9,558,969.39 5,900.05 4,560.25 9,569,429.69 (1) Disposal or scrapping 6,637.11 5,900.05 4,560.25 17,097.41 (2) Transfer to investment real estate 9,552,332.28 9,552,332.28 4. Closing balance 116,259,358.14 40,563,861.58 411,481.18 1,199,595.88 150,329.79 158,584,626.57

4. Book value

1. Book value at the end of the period 1,553,977,338.95 411,244,088.83 15,753,593.90 11,130,933.64 14,897,720.00 2,007,003,675.32 2. Book value at the beginning of the period 1,585,429,289.56 445,788,096.16 18,595,140.38 12,979,544.37 17,041,929.54 2,079,834,000.01

2. Impairment testing of fixed assets:

Other notes:

In this period, the company's management conducted impairment tests on the long-term assets of some subsidiaries whose operating performance did not meet expectations, and used different methods to predict their recoverable amounts for different asset groups. Among them, for fixed assets that are temporarily idle or have small expected income and negative future cash inflows, the net amount after the fair value minus disposal costs is used to determine the recoverable amount of the asset; for fixed assets that can generate expected stable income in the future or where it is difficult to obtain comparable transaction cases, the recoverable amount is determined using the method of the present value of the expected future cash flows.

(1) The recoverable amount is determined based on the net amount of fair value minus disposal costs:

Item Book value Recoverable amount Impairment provision How to determine fair value and disposal costs Key parameters Basis for determining key parameters Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Book value Recoverable amount Impairment provision How to determine fair value and disposal costs Key parameters Key parameters are determined based on the fair value based on the market potential for the most likely disposal recovery

According to the actual comprehensive analysis of the asset group

price charged. Disposal expenses include those related to asset disposal

44,340,119.99 22,057,497.67 22,282,622.32 The most likely houses and buildings of the same kind of assets to be determined according to the most recent matching situation 44,340,119.99 22,282,622.32 The relevant legal fees, related taxes, transportation fees and

The price that can be disposed of and recovered. The transaction price is the direct cost of bringing the asset to a salable state.

Grid.

Acceptance fees, etc.

Machinery and equipment 1,011,440.80 484,664.71 526,776.09 Same as above Same as above Same as above Office equipment 53,004.63 13,999.80 39,004.83 Same as above Same as above Same as above

Total 45,404,565.42 22,556,162.18 22,848,403.24 ----- ----- ----- (2) The recoverable amount is determined based on the present value of the expected future cash flows:

Year of the forecast period Key parameters in the stable period Book value Recoverable amount Impairment amount Key parameters in the forecast period Key parameters in the stable period

The limit is determined based on future income, costs and expenses, net future income, costs and expenses, net

Profit, additional working capital amount, Profit, additional working capital amount,

Net cash flow before tax (relevant forecast Net cash flow before tax (relevant forecast) Based on long-term industry average

Average growth of operating income for the period Average growth rate of operating income for the period, company-owned houses and buildings 607,963,824.92 530,606,284.06 77,357,540.86 5 years - sustainable

Parameters such as rate, average gross profit margin during the forecast period, false discount rate for stable operations during the maturity period, etc. are set according to different parameters such as discount rate, etc. According to different business regulations of the company to which the asset group belongs. Business regulations of the company to which the asset group belongs.

The average ratio of planning and industry is determined) The average ratio of planning and industry is determined)

Machinery and equipment 201,232,443.83 181,081,455.56 20,150,988.27 5 years-perpetual Same as above Same as above Same as above Transportation equipment 82,637.48 59,044.92 23,592.56 5 years-perpetual Same as above Same as above Same as above Office equipment 32,433.64 23,696.97 8,736.67 5 years - perpetual Same as above Same as above Same as above Other equipment 3,434,527.72 3,284,197.93 150,329.79 5 years - perpetual Same as above Same as above Same as above

Total 812,745,867.59 715,054,679.44 97,691,188.15 ----- ----- ----- -----Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

3. Temporarily idle fixed assets:

Item Original book value Accumulated depreciation Impairment provision Book value Remarks

Houses and buildings 31,507,948.85 10,927,358.22 19,005,193.19 1,575,397.44

Total 31,507,948.85 10,927,358.22 19,005,193.19 1,575,397.44

4. At the end of the period, the company had no fixed assets leased through financial lease.

5. At the end of the period, the Company had no fixed assets leased through operating leases.

6. Fixed assets whose property rights certificates have not been completed at the end of the period:

Item Book value Reasons for not completing the ownership certificate Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

Office building of modern traditional Chinese medicine intelligent production line of the company 3,656,530.02 Handling the application for Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

Gatekeeper of the company's modern Chinese medicine intelligent production line 975,828.24 Handling the application for Zhongjilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

The company's modern traditional Chinese medicine intelligent production line warehouse 5,090,339.94 Handled the application for Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

Company’s modern Chinese medicine intelligent production line power station 2,373,198.05 Handling the application for Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

The modern Chinese medicine intelligent production line preparation building of the company 18,974,593.28 Handled the application for Zhongjilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

Extraction Building of the Company’s Modern Traditional Chinese Medicine Intelligent Production Line 11,457,474.07 Handling the application for Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

Dangerous Goods Warehouse of the Company’s Modern Traditional Chinese Medicine Intelligent Production Line 591,568.48 Handling the application for Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

Sewage station of modern Chinese medicine intelligent production line 1,435,528.12 Handling the industrial affairs of Jilin Aodong Yanbian Pharmaceutical Co., Ltd.

Park Extraction Workshop 3,358,207.97 Processing Jilin Aodong Yanbian Pharmaceutical Co., Ltd. Intelligent

Extraction workshop 90,561,067.77 Handling the front office of Jilin Aodong Yanbian Pharmaceutical Co., Ltd.

Processing and extraction workshop 126,918,673.44 Processing in Jilin Aodong Pharmaceutical Group Co., Ltd. Changchun

Floor 1-3 of Building 7# of the real estate 8,027,255.00 Processed by Jilin Aodong Pharmaceutical Group Co., Ltd. Changchun

Floor 1-3 of Building No. 8 of the real estate 10,913,932.96 Processed by Jilin Aodong Pharmaceutical Group Co., Ltd. Changchun

01, Floor 1-3, Building No. 9, Real Estate 10,261,027.24 For processing, Jilin Aodong Pharmaceutical Group Co., Ltd. Changchun

Floor 02, Floor 1-3, Building No. 9, Real Estate 8,025,935.95 Total in process --

302,621,160.53

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(13) Projects under construction

1. Projects under construction:

Ending balance Beginning balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Taonan Pharmaceutical Automated Production Line Construction Project: Note

140,541,806.48 8,214,622.11 132,327,184.37 130,544,220.93 130,544,220.93 Injection workshop

Jilin Aodong Yanbian Pharmaceutical Co., Ltd. Traditional Chinese Medicine

Formula granule project - Formula granule pre-processing and extraction 103,694,485.74 103,694,485.74 Workshop

Expansion of Jilin Aodong Yanbian Pharmaceutical Co., Ltd.

67,299,930.00 63,208,186.88 63,208,186.88 Phase II of the upgrade project 67,299,930.00

Jilin Aodong Yanbian Pharmaceutical Co., Ltd. Traditional Chinese Medicine

62,037,270.61 62,037,270.61 61,440,037.89 61,440,037.89 Formula granule project - Formula granule preparation workshop

Taonan Pharmaceutical Factory Renovation and Expansion Construction Project 1

51,706,049.35 3,038,284.89 48,667,764.46 46,943,452.91 46,943,452.91 phase project

Jilin Aodong Yanbian Pharmaceutical Co., Ltd. Traditional Chinese Medicine

14,299,663.31 14,299,663.31 14,290,229.35 14,290,229.35 Formula Granule Project - Formula Granule Comprehensive R&D Building

Boiler upgrade and renovation project 3,772,181.29 3,772,181.29

Maintenance and renovation project of Hongshi Deer Industry Hongshi Field Area 979,669.00 979,669.00

Total 335,884,719.75 11,252,907.00 324,631,812.75 424,872,463.99 424,872,463.99Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Changes in major construction projects under construction:

Interest capital Including: Current period Interest project investment in this period Project progress

Project name Budget amount Beginning balance Increase in the current period Transfer to fixed assets Other decreases Ending balance Capital accumulation Interest capital Capitalization rate Proportion of fund sources in the budget (%) (%)

Calculated amount (%) Taonan Pharmaceutical Automated Production Line Construction Project: Note

Raised and self-raised 164,044,700.00 130,544,220.93 10,572,806.79 575,221.24 140,541,806.48 85.67 90.00

Injection workshop

Jilin Aodong Yanbian Pharmaceutical Co., Ltd. Traditional Chinese Medicine

Formula granule project - Formula granule pre-treatment and extraction Raised and self-raised 220,000,000.00 103,694,485.74 37,513,228.84 141,207,714.58 66.26 100.00

workshop

Expansion of Jilin Aodong Yanbian Pharmaceutical Co., Ltd.

Raised and self-raised 330,000,000.00 63,208,186.88 4,091,743.12 67,299,930.00 81.42 94.00

Upgrading project phase 2 project

Jilin Aodong Yanbian Pharmaceutical Co., Ltd. Traditional Chinese Medicine

Raised and self-raised 120,000,000.00 61,440,037.89 597,232.72 62,037,270.61 58.15 75.00

Formula granule project-Formula granule preparation workshop

Taonan Pharmaceutical Factory Renovation and Expansion Construction Project 1

Self-raised 93,446,000.00 46,943,452.91 4,762,596.44 51,706,049.35 55.33 80.00

Phase 1 project

Jilin Aodong Yanbian Pharmaceutical Co., Ltd. Traditional Chinese Medicine

Raised and self-raised 45,000,000.00 14,290,229.35 9,433.96 14,299,663.31 31.78 35.00

Formula Granule Project-Formula Granule Comprehensive R&D Building

-

Total 972,490,700.00 420,120,613.70 57,547,041.87 141,782,935.82 335,884,719.75 -----Other instructions

The project budget includes equipment costs.

3. Impairment testing of projects under construction

Project name Beginning balance Increase in the current period Decrease in the current period Ending balance Reason for accrual Taonan Pharmaceutical Automated Production Line Construction Project: Note

8,214,622.11 8,214,622.11 Injection workshop where the asset group has signs of impairment

Taonan Pharmaceutical Factory Renovation and Expansion Construction Project

3,038,284.89 3,038,284.89 The asset group has signs of impairment in the first phase of the project

Total 11,252,907.00 11,252,907.00

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

4. Impairment testing of projects under construction:

The recoverable amount is determined based on the present value of expected future cash flows:

Year of the forecast period Key parameter items in the stable period Book value Recoverable amount Impairment amount Key parameters in the forecast period Key parameters in the stable period

The limit is determined based on future income, costs and expenses, future income, costs and expenses,

Net profit, additional working capital Net profit, additional working capital

Amount, net cash flow before tax (corresponding to

Taonan Pharmaceutical Automation Production is based on the industry's long-term average production line construction project: Injection 140,541,806.48 132,327,184.37 8,214,622.11 7-year-sustainable average growth rate, average growth rate during the forecast period, average growth rate during the forecast period, company maturity period

Parameters such as gross profit margin, discount rate, etc. Parameters such as average gross profit margin, discount rate, etc. Stable operating assumptions and other parameters workshop

According to the common number to which different asset groups belong. According to the common number to which different asset groups belong.

The company's business plan and industry average belong to the company's business plan and industry average

The ratio is determined) The industry average ratio is determined)

Taonan Pharmaceutical Factory Renovation and Expansion

Construction project one 51,706,049.35 48,667,764.46 3,038,284.89 7 years - sustainable Same as above Same as above Same as above

Phase 1 project

Total 192,247,855.83 180,994,948.83 11,252,907.00 ----- ----- ----- -----Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(14) Productive biological assets

Project Planting Industry (Epimedium) Livestock Breeding Industry (Sika Deer) Total

1. Original book value

1. Opening balance 68,093.71 7,376,307.69 7,444,401.40 2. Increase in current period 23,203.83 4,014,400.00 4,037,603.83 (1) Self-cultivation 23,203.83 4,014,400.00 4,037,603.83 3. Reduction amount in the current period 27,582.48 2,165,421.10 2,193,003.58 (1) Disposal 27,582.48 2,165,421.10 2,193,003.58 4. Closing balance 63,715.06 9,225,286.59 9,289,001.65

2. Accumulated depreciation

1. Opening balance 2,390,708.31 2,390,708.31 2. Increase in the current period 701,534.72 701,534.72 (1) Provision 701,534.72 701,534.72 3. Decrease in the current period 775,009.39 775,009.39 (1) Disposal 775,009.39 775,009.39 4. Closing balance 2,317,233.64 2,317,233.64

3. Impairment provision

1. Opening balance

2. Increase amount in this period

(1) Provision

3. Reduction amount in this period

(1) Disposal

4. Ending balance

4. Book value

1. Book value at the end of the period 63,715.06 6,908,052.95 6,971,768.01 2. Book value at the beginning of the period 68,093.71 4,985,599.38 5,053,693.09 Other notes:

The company's productive biological assets are all used for production and operation purposes, and there are no mortgages or guarantees. The company conducts inspections of productive biological assets at the end of each year. No signs of impairment were found in the current period, so no impairment provision was made.

(15) Right-of-use assets

Project Houses and Buildings Woodland Total

1. Original book value

1. Opening balance 135,370,720.80 233,250.00 135,603,970.80 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Project Houses and Buildings Woodland Total

2. Increase in the current period 781,069.29 781,069.29 (1) Increase in rental housing 781,069.29 781,069.29 3. Decrease in the current period 69,088,288.40 69,088,288.40 (1) Decrease in rental housing 69,088,288.40 69,088,288.40 4. Closing balance 67,063,501.69 233,250.00 67,296,751.69

2. Accumulated depreciation

1. Balance at the beginning of the period 87,178,350.40 47,736.71 87,226,087.11 2. Increase in the current period 22,371,782.02 15,549.96 22,387,331.98

(1) Provision 22,371,782.02 15,549.96 22,387,331.98 3. Decrease amount in the current period 59,289,768.05 59,289,768.05

(1) Disposal 59,289,768.05 59,289,768.05 4. Ending balance 50,260,364.37 63,286.67 50,323,651.04

3. Impairment provision

1. Opening balance

2. Increase amount in this period

(1) Provision

3. Reduction amount in this period

(1) Disposal

4. Ending balance

4. Book value

1. Book value at the end of the period 16,803,137.32 169,963.33 16,973,100.65 2. Book value at the beginning of the period 48,192,370.40 185,513.29 48,377,883.69Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(16) Intangible assets

1. Intangible assets:

Item Street naming fee Software Trademark Land use rights Patent rights Others Total

1. Original book value

1. Opening balance 1,000,000.00 22,080,204.88 401,604.54 329,513,430.49 400,932,941.53 51,454,462.42 805,382,643.86

998,753.04 19,788.83 56,110,509.87 57,139,843.82 2. Increase in the current period 10,792.08

319,141.38 19,788.83 21,387,290.57 21,737,012.86 (1) Purchase 10,792.08

(2) Internal research and development 679,611.66 34,723,219.30 35,402,830.96

26,548.67 4,624,731.28 453,820.00 5,114,502.06 3. Decrease amount in the current period 9,402.11

26,548.67 4,624,731.28 453,820.00 5,114,502.06 (1) Disposal 9,402.11

1,000,000.00 23,052,409.25 329,533,219.32 452,418,720.12 51,000,642.42 857,407,985.62 4. Closing balance 402,994.51

2. Accumulated amortization

1. Opening balance 1,000,000.00 16,342,661.25 364,446.57 66,497,196.39 222,975,878.52 27,677,609.46 334,857,792.19 2. Increase in the current period 1,293,656.85 10,949.44 7,451,198.45 25,721,908.77 4,645,735.47 39,123,448.98 (1) Provision 1,293,656.85 7,451,198.45 25,721,908.77 4,645,735.47 39,123,448.98 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Street naming fee Software Trademark Land use rights Patent rights Others Total

10,949.44

3. Decrease amount in the current period 26,548.67 3,535,108.65 287,230.06 3,848,887.38 (1) Disposal 26,548.67 3,535,108.65 287,230.06 3,848,887.38 4. Closing balance 1,000,000.00 17,609,769.43 375,396.01 73,948,394.84 245,162,678.64 32,036,114.87 370,132,353.79

3. Impairment provision

1. Opening balance 44,178.06 796,373.79 29,334,811.17 3,033,604.24 33,208,967.26 2. Increase in the current period 18,752,520.13 27,462,860.86 3,334,300.00 49,549,680.99 (1) Provision 18,752,520.13 27,462,860.86 3,334,300.00 49,549,680.99 3. Decrease amount in the current period

(1) Disposal

4. Closing balance 44,178.06 19,548,893.92 56,797,672.03 6,367,904.24 82,758,648.25

4. Book value

1. Book value at the end of the period 5,398,461.76 27,598.50 236,035,930.56 150,458,369.45 12,596,623.31 404,516,983.58 2. Book value at the beginning of the period 5,693,365.57 37,157.97 262,219,860.31 148,622,251.84 20,743,248.72 437,315,884.41Other instructions

The proportion of intangible assets formed through the company's internal research and development in this period accounted for 4.13% of the balance of intangible assets.

2. At the end of the period, there is no land use right for which the property rights certificate has not been completed.

3. Impairment testing of intangible assets

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(1) The recoverable amount is determined based on the net amount of fair value minus disposal costs:

Fair value and disposal costs

Item Book value Recoverable amount Impairment amount Key parameters How to determine the basis for determining key parameters

Patent-related products cannot be produced, and patent rights are also patent rights 3,588,082.14 3,588,082.14 Total non-transferable value 3,588,082.14 3,588,082.14 ----- ----- -----

(2) The recoverable amount is determined based on the present value of expected future cash flows:

Year of the forecast period Items of key parameters in the stable period Book value Recoverable amount Impairment amount Key parameters in the forecast period Key parameters in the stable period

The limit is determined based on future income, costs and expenses, future income, costs and expenses,

Net profit, additional working capital Net profit, additional working capital

Amount, net cash flow before tax (corresponding to

The average growth rate, average growth rate during the forecast period, average growth rate during the forecast period, stable gross profit margin during the company's maturity period, discount rate and other parameters. Certain operating assumptions, etc. are based on the public numbers to which different asset groups belong.

The company's business plan and industry average belong to the company's business plan and industry average

The ratio is determined) The industry average ratio is determined)

Patent rights 158,971,061.13 135,096,282.41 23,874,778.72 5 years - perpetual Same as above Same as above Same as above Others 8,722,933.20 5,388,633.20 3,334,300.00 5 years - perpetual Same as above Same as above Same as above

Total 317,846,851.06 271,885,252.21 45,961,598.85 ----- ----- ----- -----Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(17) Development expenditure

Increase in the current period The number of transfers in this period

Item Beginning balance Closing balance

Internal development expenses Others included in current profit and loss Recognized as intangible assets Others transferred out

Research and development of generic drugs 29,165,387.55 356,989.09 990,099.01 18,990,048.85 11,522,426.80 Research and development of classic traditional Chinese medicine prescriptions 28,320,736.94 23,870,101.39 4,450,635.55

Terbutaline sulfate atomized liquid generic drug Category 4 (preparation + raw materials) 6,875,694.06 206,429.43 7,082,123.49

Children's Piweishu Oral Liquid (Children's Qixuan) 4,569,811.19 4,569,811.19

Research on polyvinyl alcohol eye drops 3,603,255.85 3,382,255.85 221,000.00

Nicardipine hydrochloride API 3,563,601.19 179,110.20 520,000.00 4,262,711.39 Classic famous prescription Kaixin Powder 3,497,181.80 3,497,181.80

The classic famous prescription Qianghuoshengshi Decoction 3,091,834.87 170,884.87 2,920,950.00

Classic famous prescriptions Qingjin Huatan Decoction and Qingzao Jiufei Decoction 3,078,327.52 157,377.52 2,920,950.00

The classic prescription Xiehuang Powder 2,660,000.00 2,660,000.00

Research on generic drugs of L-carnitine injection (5ml:1g) 2,452,487.38 2,981.05 2,455,468.43 Classic famous prescription Baoyuan Decoction 2,450,000.00 2,450,000.00

Health food development 1,296,111.84 361,386.14 818,155.56 839,342.42 Acetylcysteine injection (3ml:300mg) generic drug project 2,229,978.75 184,441.21 872,868.17 3,287,288.13 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Increase in the current period The number of transfers in this period

Item Beginning balance Closing balance

Internal development expenses Others included in current profit and loss Recognized as intangible assets Others transferred out

Nicardipine Hydrochloride Injection 2,141,306.82 233,484.14 580,000.00 2,954,790.96 Amikacin Sulfate Injection (1ml:100mg, 2ml:200mg) Generic Drug Research 1,399,540.19 248,789.11 1,648,329.30 Establish a germplasm bank, gene bank, specimen bank and database of 10 northern medicinal materials 943,396.24 754,716.98 1,698,113.22 Cultivate a new excellent ginseng strain 943,396.22 754,716.98 1,698,113.20 Breeding a new excellent epimedium strain 943,396.22 754,716.98 1,698,113.20 Generic levo-ornidazole disodium phosphate for injection (0.125g) 735,849.06 134,900.06 870,749.12 Chinese medicinal material genetic identification system 679,611.66 679,611.66

Roxithromycin tablets 525,012.74 562,115.17 10,000.00 1,097,127.91 Healthy food to improve bone density 230,000.00 230,000.00

Supplementary health food for chemical liver injury 230,000.00 230,000.00

Nanofloxacin malate and sodium chloride injection 127,837.74 392,000.00 519,837.74 Research on changes in sterilization process and quality standard improvement of Zhenshi burn ointment 297,029.70 297,029.70 Total 105,625,918.09 2,237,077.20 6,287,533.96 37,835,356.77 35,402,830.96 6,062,900.00 34,849,441.52

For details, please see [Note 6. R&D Expenditure]

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(18) Goodwill

1. Original book value of goodwill:

Increased number of enterprises in this period Decreased in this period

Name of invested unit Beginning balance Closing balance

Disposal formed by merger

Jilin Aodong Taonan Pharmaceutical Co., Ltd. 15,868,050.66 15,868,050.66 Jilin Aodong Pharmacy Chain Co., Ltd. 48,411,942.24 48,411,942.24 Jilin Aodong Pharmacy Pharmaceutical Co., Ltd. 1,776,672.76 1,776,672.76 Fushun Aodong Pharmacy Chain Co., Ltd. 22,502,256.00 22,502,256.00

Total 88,558,921.66 88,558,921.66

2. Goodwill impairment provision:

Increase in the current period Decrease in the current period Closing balance Name of invested unit Opening balance

Provision Other Disposal Other

Jilin Aodong Taonan Pharmaceutical Co., Ltd. 15,868,050.66 15,868,050.66 Jilin Aodong Pharmacy Chain Co., Ltd. 48,411,942.24 48,411,942.24 Jilin Aodong Pharmacy Pharmaceutical Co., Ltd. 1,776,672.76 1,776,672.76 Fushun Aodong Pharmacy Chain Co., Ltd. 22,502,256.00 22,502,256.00

Total 88,558,921.66 88,558,921.66

3. Relevant information about the asset group or asset group combination where the goodwill is located

Whether it is the same as the name of the previous year. The composition and basis of the asset group or portfolio it belongs to. The operating segment and basis it belongs to.

The pharmaceutical segment to which the degree remains consistent is controlled by the Company.

Production flow of injections based on calf spleen extract injection

Jilin Aodong Taonan Pharmaceutical Co., Ltd. Jilin Aodong Taonan Pharmaceutical Co., Ltd.

The independent assets of the process and the shared assets of this product are allocated according to the sales revenue. Jilin Co., Ltd. merged with Jilin Industry Co., Ltd.

Assets as asset groups

Mayinglong Pharmaceutical Co., Ltd. was formed.

Jilin Aodong Pharmacy Chain Co., Ltd., a holding subsidiary of the company

The company acquired a total of 60 pharmacies from multiple independent third parties

(except inventory) assets and businesses, and also undertakes the wholesale and retail of its chain drugstores

Jilin Aodong Pharmacy Chain

Relevant employees and businesses of these pharmacies, etc. The acquired assets segment is the assets of the purchased pharmacy and is a limited company

Although the combination does not constitute an independent legal person, it already has investment business, etc.

input and output capabilities, and can independently calculate its costs and expenses or

revenue generated, the transaction is considered a business combination.

Wholesale and retail chain pharmacies affiliated to Jilin Aodong Pharmacy Medicine

It was formed through the acquisition of Jilin Renxiu Shande Pharmaceutical Co., Ltd. It is a branch of the company and a purchased pharmaceutical company.

It is Fushun Aodong Pharmacy Co., Ltd., a third-level subsidiary controlled by the company.

Lock Co., Ltd. wholesales and retails to Liaoning Fuzhu Pharmaceutical Chain Co., Ltd. and its affiliated chain pharmacies.

Fushun Aodong Pharmacy Chain

Li Yanrong, an independent third party, acquired a total of 71 drugstore branches, purchasing the assets and assets of the drugstore. It is a limited company.

(other than inventory) assets and businesses, and at the same time undertook business, etc.

Relevant employees and businesses of these pharmacies, etc.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Other instructions

All goodwill has been fully provided for impairment in previous years, so the book value of goodwill at the end of the period is

0.00 yuan, no new impairment test is required for this period.

(19) Long-term deferred expenses

Others

Item Opening balance Amount increased during the period Amortization amount for the period Closing balance

reduce

Decoration fee 5,690,377.15 369,837.01 3,276,179.63 2,784,034.53 Network service fee 84,730.54 84,730.54

Mold costs 172,615.62 172,615.62

Total 5,947,723.31 369,837.01 3,533,525.79 2,784,034.53

(20) Deferred income tax assets and deferred income tax liabilities

1. Deferred income tax assets without offset:

Ending balance Beginning balance

Projects can deduct temporary differences

Deferred income tax assets Deductible temporary differences Deferred income tax assets

different

Provision for bad debts 18,629,084.78 2,854,173.06 52,675,284.55 10,885,131.31 Inventory 17,761,747.58 2,664,262.13 23,936,532.45 3,590,479.88 Impairment of intangible assets 30,109,254.74 4,516,388.21 6,908,582.15 1,036,287.32 Impairment of fixed assets 46,566,568.31 6,984,985.24 29,885,803.72 4,482,870.56 Changes in fair value of trading financial assets 977,991,757.50 242,619,664.93 1,143,621,808.21 279,684,465.74 Changes in fair value of other equity instrument investments 18,124,292.40 4,450,909.52 13,005,139.83 3,251,284.96 Long-term equity investment 9,675,554.24 2,418,888.56 9,675,554.24 2,418,888.56 Unrealized profits from internal transactions 4,165,922.41 601,213.74 8,342,578.67 1,242,443.41 Deferred income 62,443,433.95 9,366,515.09 65,934,167.65 9,890,125.15 Lease liabilities 3,181,679.38 795,419.85 16,510,187.97 4,127,546.99Non-current liabilities due within one year 9,293,329.70 2,323,332.430 22,477,538.59 5,619,384.65 Impairment of construction in progress 11,252,907.00 1,687,936.05

Total 1,209,195,531.99 281,283,688.81 1,392,973,178.03 326,228,908.53

2. Deferred income tax liabilities without offset:

Ending balance Beginning balance

Project

Taxable temporary differences Deferred income tax liabilities Taxable temporary differences Deferred income tax liabilities Changes in fair value of trading financial assets 24,006,610.66 3,665,028.93 15,717,130.71 2,401,288.83 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Ending balance Beginning balance

Project

Taxable temporary differences Deferred income tax liabilities Taxable temporary differences Deferred income tax liabilities Right-of-use assets 16,973,100.65 4,226,278.83 48,377,883.69 12,075,919.59 Accelerated depreciation of fixed assets 31,767,320.46 4,765,098.07 37,967,215.44 5,695,082.34

Total 72,747,031.77 12,656,405.83 102,062,229.84 20,172,290.76

3. Deferred income tax assets or liabilities presented on a net basis after offsetting:

Deferred income tax assets and liabilities Deferred income tax assets and liabilities after offset Deferred income tax assets and liabilities Deferred income tax items after offset

The offsetting amount of debts at the end of the year or the balance of liabilities at the end of the year The offsetting amount of debts at the beginning of the year The balance of assets or liabilities at the beginning of the year

Deferred income tax assets 11,297,131.24 269,986,557.57 326,228,908.53 Deferred income tax liabilities 11,297,131.24 1,359,274.59 20,172,290.76

4. Details of unrecognized deferred income tax assets:

Item Ending balance Beginning balance

Deductible temporary differences 289,481,846.15 120,943,801.54 Deductible losses 967,285,227.21 1,083,266,084.35

Total 1,256,767,073.36 1,204,209,885.89

5. Deductible losses that have not been recognized as deferred income tax assets will expire in the following years:

Year Ending balance Beginning balance Remarks

2025 176,649,123.94

2026 101,981,226.86 276,156,742.30

2027 92,639,176.62 94,832,382.36

2028 190,005,902.30 249,581,960.22

2029 194,598,901.36 194,598,901.36

2030 140,864,068.39

2034 82,958,965.91 91,446,974.17

2035 164,236,985.77

Total 967,285,227.21 1,083,266,084.35

(21) Other non-current assets

Category and content Closing balance Opening balance

Prepayment for engineering equipment 28,397,056.67 56,215,215.70 Prepayment for outsourced research and development 10,000,000.00

Total 28,397,056.67 66,215,215.70 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(22) Short-term borrowings

1. Classification of short-term loans:

Item Ending balance Beginning balance

Mortgage loan 14,936,175.20 Pledge loan 3,020,150.00

Credit loan 900,000,000.00 1,240,000,000.00

Total 903,020,150.00 1,254,936,175.20Other instructions

(1) The closing balance of the pledged loan represents the factoring financing of accounts receivable of Jilin Zhengrong Pharmaceutical Development Co., Ltd., a subsidiary of the Company, of RMB 3,000,000.00 and the accrued interest of RMB 20,150.00.

(2) The closing balance of credit loans is the current borrowing of 400,000,000.00 yuan from Jilin Aodong Yanbian Pharmaceutical Co., Ltd., a subsidiary of Jilin Aodong Yanbian Pharmaceutical Co., Ltd., from Agricultural Bank of China Co., Ltd. Dunhua Branch, 150,000,000.00 yuan from Bank of China Co., Ltd. Dunhua Branch, and 150,000,000.00 yuan from Industrial and Commercial Bank of China Co., Ltd. The Hua City Branch borrowed 100,000,000.00 yuan, the Dunhua City Branch of China Construction Bank Co., Ltd. borrowed 150,000,000.00 yuan, and the subsidiary Jilin Aodong Pharmaceutical Group Yanji Co., Ltd. borrowed 100,000,000.00 from the Yanbian Korean Autonomous Prefecture Branch of China Construction Bank Co., Ltd. Yuan.

2. There are no overdue short-term loans in this period.

(23) Notes payable

Item Ending balance Beginning balance

Bank acceptance bill 14,654,077.97 8,321,022.61 Commercial acceptance bill

Total 14,654,077.97 8,321,022.61

(24) Accounts payable

1. Accounts payable are listed as follows:

Item Ending balance Beginning balance

Within 1 year 225,149,246.62 338,156,331.00 1-2 years 28,295,870.37 66,572,823.00 2-3 years 32,738,930.31 2,153,543.30 More than 3 years 9,579,366.69 10,511,158.98

Total 295,763,413.99 417,393,856.28

2. Important accounts payable aged more than one year:

Item Ending balance Reason for outstanding or carry-forward Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Closing balance Reason for outstanding repayment or carry-forward Jilin Dunhua Construction Engineering Group Co., Ltd. 13,021,543.43 Pending settlement

Yanbian Hengyu Architectural Decoration Engineering Co., Ltd. 11,506,158.77 To be settled

Jilin Hanlin Purification Engineering Installation Co., Ltd. 7,015,545.38 To be settled

Total 31,543,247.58 --

(25) Advance payments

Item Ending balance Beginning balance

Lease fees collected in advance 1,173,343.85 1,557,019.45

Total 1,173,343.85 1,557,019.45

(26) Contract liabilities

1. Presentation of contract liabilities:

Item Ending balance Beginning balance

Contract liabilities related to transferred goods 30,502,590.64 34,693,584.81

Total 30,502,590.64 34,693,584.81

(27) Employee benefits payable

1. List of employee benefits payable:

Item Opening balance Increase in the current period Decrease in the current period Ending balance Short-term compensation 65,557,546.07 375,264,547.84 340,368,721.39 100,453,372.52 Post-employment benefits - defined contribution plan 55,736,394.88 55,699,019.88 37,375.00 Dismissal benefits 287,249.93 227,117.75 227,117.75 287,249.93 Other benefits due within one year -

Total 65,844,796.00 431,228,060.47 396,294,859.02 100,777,997.45

2. List of short-term remuneration:

Item Opening balance Increase in the current period Decrease in the current period Ending balance wages, bonuses, allowances and subsidies 63,194,696.31 320,722,506.92 286,193,889.65 97,723,313.58 Employee welfare fees 9,684,091.00 9,684,091.00 - Social insurance fees 22,943,460.30 22,925,669.80 17,790.50 Including: medical insurance premium 21,158,153.09 21,140,960.59 17,192.50

Work injury insurance premium 1,785,307.21 1,784,709.21 598.00 Housing provident fund 16,359,323.22 16,359,323.22 -Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Beginning balance Increase in the current period Decrease in the current period Ending balance trade union funds and employee education funds 2,362,849.76 5,555,166.40 5,205,747.72 2,712,268.44 Short-term paid absence - Short-term profit sharing plan -

Total 65,557,546.07 375,264,547.84 340,368,721.39 100,453,372.52

3. Set up the withdrawal plan list:

Item Opening balance Increase in the current period Decrease in the current period Ending balance Basic pension insurance

53,509,429.35 53,473,549.35 35,880.00Unemployment insurance 2,226,965.53 2,225,470.53 1,495.00Total 55,736,394.88 55,699,019.88 37,375.00Other instructions

The Company participates in the pension insurance and unemployment insurance plans established by government agencies as required. The Company participates in the pension insurance and unemployment insurance plans respectively.

Monthly deposit fees are paid in proportion to the employee contribution base.

(28) Taxes payable

Item Ending balance Beginning balance

Value-added tax 11,216,625.08 14,437,117.08 Consumption tax 760.01 32,953.11 Corporate income tax 3,592,222.95 5,896,147.36 Personal income tax 565,827.82 473,916.24 Urban maintenance and construction tax 644,798.07 991,436.30 Property tax 89,972.65 83,253.44 Education fee surcharge 463,979.88 651,973.74 Land use tax 1,407.91 1,407.91 Stamp duty 453,148.65 728,075.59 Withholding tax 15,932.05 5,685.14 Value-added tax payable on the transfer of financial products 139.09 6,360.65 Environmental protection tax 24,578.19 23,023.64 Vehicle and vessel use tax 9,000.00

Resource tax 25,206.92

Total 17,103,599.27 23,331,350.20

(29) Other payables

Item Ending balance Beginning balance

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Ending balance Beginning balance

Interest payable 24,068,493.15 Dividends payable 5,186.46 665,696.46 Other payables 613,930,924.39 606,180,689.07

Total 613,936,110.85 630,914,878.68

1. Interest payable

Item Ending balance Beginning balance

corporate bond interest

24 Jilin Aodong MTN001 (Kechuang Notes) Interest 24,068,493.15

Total 24,068,493.15

2. Dividends payable

Item Ending balance Beginning balance

Dividends on ordinary shares 5,186.46 665,696.46

Total 5,186.46 665,696.46

3. Other payables

(1) Other payables are listed according to aging:

Item Ending balance Beginning balance

Within 1 year 389,298,293.75 171,088,632.51 1-2 years 46,602,906.43 159,382,745.37 2-3 years 116,714,561.45 168,693,064.90 More than 3 years 61,315,162.76 107,016,246.29

Total 613,930,924.39 606,180,689.07

(2) At the end of the period, the company had no important other payables aged more than one year.

(30) Non-current liabilities due within one year

Item Ending balance Beginning balance

Bonds payable due within one year 24,068,493.15

Lease liabilities due within one year 9,293,329.70 22,477,538.59 Total 33,361,822.85 22,477,538.59

Other instructions

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

The closing balance of non-current liabilities due within one year increased by 48.42% compared with the opening balance, mainly due to the increase in accrued interest on bonds payable.

(31) Other current liabilities

Item Ending balance Beginning balance

Output tax to be transferred 3,765,197.83 4,422,546.78

Total 3,765,197.83 4,422,546.78

(32) Long-term borrowings

1. Classification of long-term loans:

Item Ending balance Beginning balance

Pledge loan 2,100,000.00

Credit loan 300,000,000.00

Total 302,100,000.00

Other instructions

(1) The closing balance of the pledged loan is RMB 2,100,000.00 in factoring financing of accounts receivable of Jilin Zhengrong Pharmaceutical Development Co., Ltd., a subsidiary of the Company, with a borrowing interest rate of 2.5%.

(2) The closing balance of the credit loan is the long-term loan of 90,000,000.00 yuan borrowed by the parent company Jilin Aodong Pharmaceutical Group Co., Ltd. from the Dunhua Branch of Agricultural Bank of China Co., Ltd. with a term of 3 years and a borrowing interest rate of 2%; And last year, it borrowed a short-term loan of 210,000,000.00 yuan from the Dunhua Branch of Agricultural Bank of China Co., Ltd. In this period, the two parties signed a supplementary agreement to modify the loan period to three years and transfer it to long-term loan accounting, with a borrowing interest rate of 1.9%.

2. There are no overdue long-term loans in this period.

(33) Bonds payable

1. List of bonds payable:

Item Ending balance Beginning balance

Jilin Aodong Pharmaceutical Group Co., Ltd.

The first tranche of medium-term notes in 2024 (Kechuang Notes

997,240,720.20 995,218,998.39 According to )

Total 997,240,720.20 995,218,998.39 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Increases and decreases in bonds payable (excluding preference shares, perpetual bonds and other financial instruments classified as financial liabilities):

Interest repayment in this period Coupon face value Date of issuance Bond period Provision based on face value Premium, discount and amortization Name of bond period Face value Issue amount Opening balance Ending balance Interest rate Period Term Interest issued and written off

Return the shares of Jilin Aodong Pharmaceutical Group

Ltd. 2024 No.

1,000,000,000.00 3.5% 2024-4-23 3 years 1,000,000,000.00 995,218,998.39 35,000,000.00 2,021,721.81 35,000,000.00 997,240,720.20 first-term medium-term notes (Kechuang notes

According to)

total

--- --- --- 1,000,000,000.00 995,218,998.39 35,000,000.00 2,021,721.81 35,000,000.00 997,240,720.20

3. Description of conversion conditions and conversion time of convertible corporate bonds

None

4. Description of other financial instruments classified as financial liabilities

(1) Basic information on preferred shares, perpetual bonds and other financial instruments outstanding at the end of the period

None.

(2) Explanation of the basis for classifying other financial instruments as financial liabilities

None.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(34) Lease liabilities

Item Ending balance Beginning balance

House rental fees payable 3,181,679.38 16,510,187.97

Total 3,181,679.38 16,510,187.97

(35) Deferred income

Item Beginning balance Increase in the current period Decrease in the current period Ending balance Reasons for product research and development subsidies and technological innovation

New subsidies, industrial government subsidies 223,868,771.87 11,527,371.70 22,412,365.61 212,983,777.96 Park land subsidies, infrastructure construction subsidies, etc.

Total 223,868,771.87 11,527,371.70 22,412,365.61 212,983,777.96 --

(36) Share capital

Changes in the current period (+, -)

Shares Beginning balance Closing balance

Issuance of new shares Bonus shares Conversion of provident funds Others Subtotal

Total number of shares 1,195,895,387.00 1,195,895,387.00

(37) Capital reserve

Item Opening balance Increase in the current period Decrease in the current period Ending balance Equity premium 1,046,800,365.31 76,349.45 1,046,876,714.76 Other capital reserves 3,804,700,259.25 46,763,147.90 3,851,463,407.15

Total 4,851,500,624.56 46,839,497.35 4,898,340,121.91

(38) Treasury shares

Item Opening balance Increase in the current period Decrease in the current period Ending balance treasury shares 300,004,613.74 120,000,804.68 420,005,418.42Total 300,004,613.74 120,000,804.68 420,005,418.42Other notes

The company held the 14th meeting of the company's 11th board of directors on November 8, 2024, and reviewed and approved the "Proposal on Repurchasing Part of Public Shares" and agreed to repurchase the company's shares through centralized bidding transactions. As of the end of this reporting period, the company has accumulated repurchases through centralized bidding transactions through a special securities account for stock repurchases.

The company has 23,513,800 A shares.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(39) Other comprehensive income

Amount incurred in this period

Return after tax

Item Beginning balance before income tax for the current period Less: included in other comprehensive items in the previous period Attributable to other comprehensive items Ending balance less: income tax expense Attributable to the parent company after tax

Amount incurred Earnings transferred to retained earnings in the current period Minority

shareholders

1． Other comprehensive income that cannot be reclassified into profit or loss 102,681,753.11 120,098,023.97 -1,199,624.56 121,297,648.53 223,979,401.64 Among them: other comprehensive income that cannot be transferred to profit or loss under the equity method 112,435,607.98 125,217,176.54 125,217,176.54 237,652,784.52

Changes in fair value of other equity instrument investments -9,753,854.87 -5,119,152.57 -1,199,624.56 -3,919,528.01 -13,673,382.88 2. Other comprehensive income that will be reclassified into profit and loss 711,414,627.24 -218,016,396.62 -218,016,396.62 493,398,230.62 Among them: other comprehensive income that can be transferred to profit and loss under the equity method 710,375,274.20 -217,863,629.05 -217,863,629.05 492,511,645.15 Difference in translation of foreign currency financial statements 1,039,353.04 -152,767.57 -152,767.57 886,585.47

Total other comprehensive income 814,096,380.35 -97,918,372.65 -1,199,624.56 -96,718,748.09 717,377,632.26Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(40) Surplus reserve

Item Opening balance Increase in the current period Decrease in the current period Ending balance Statutory surplus reserve 2,660,762,841.17 249,694,894.01 2,910,457,735.18 Discretionary surplus reserve 20,836,710.63 20,836,710.63

Total 2,681,599,551.80 249,694,894.01 2,931,294,445.81

(41) Undistributed profits

Item Amount for the current period Amount for the previous period

Undistributed profits at the end of the previous period before adjustment 19,784,500,915.63 19,384,796,645.55 Total undistributed profits at the beginning of the period before adjustment (adjustment +, decrease -)

Undistributed profit at the beginning of the adjusted period 19,784,500,915.63 19,384,796,645.55 Plus: Net profit attributable to owners of the parent company for the period 2,395,240,134.98 1,551,393,070.70 Less: Appropriation of statutory surplus reserve 249,694,894.01 194,972,491.02 Withdrawal of discretionary surplus reserve

Withdraw general risk reserve

Common stock dividends payable 586,190,793.50 956,716,309.60 Common stock dividends converted into equity capital

Add: other comprehensive income carried forward to retained earnings

Selling other equity instrument investments

Undistributed profits at the end of the period 21,343,855,363.10 19,784,500,915.63

(42) Operating income and operating costs

1. Operating income and operating costs:

Amount of current period Amount of previous period

Project

revenue cost revenue cost

Main business 2,316,495,699.90 1,202,127,989.37 2,536,712,534.34 1,513,232,402.24 Other businesses 18,695,563.90 7,823,494.78 73,862,569.09 46,254,143.27 Total 2,335,191,263.80 1,209,951,484.15 2,610,575,103.43 1,559,486,545.51

2. Income generated from the contract this year:

Contract classification Operating income Operating costs

Product type 2,335,191,263.80 1,209,951,484.15 of which:

Traditional Chinese medicine 1,424,249,226.64 616,923,934.35 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Chemicals 294,731,597.72 145,474,240.66 Chain drugstore wholesale and retail 381,506,909.40 282,442,797.63 Food 183,367,937.61 129,576,898.77 Other products 32,640,028.53 27,710,117.96 Other business income 18,695,563.90 7,823,494.78 Classification by operating area 2,335,191,263.80 1,209,951,484.15 Of which:

Northeast 842,995,112.99 505,353,789.53 North China 205,789,338.85 99,342,610.16 East China 526,546,394.82 243,643,299.86 South China 298,522,932.17 147,853,672.71 Northwest 150,163,102.99 73,380,990.34 Southwest 311,174,381.98 140,377,121.55 Classified by sales channel 2,335,191,263.80 1,209,951,484.15 Of which:

Self-operated marketing 1,953,684,354.40 927,508,686.52 Chain marketing 381,506,909.40 282,442,797.63 Total 2,335,191,263.80 1,209,951,484.15

3. Description of performance obligations:

The company's main business recognizes revenue when the customer obtains control of the relevant products.

4. Description of apportionment to remaining performance obligations:

At the end of this reporting period, the amount of revenue corresponding to the performance obligations that have been signed but have not been performed or have not been completed is 30,502,590.64 yuan, of which: 30,502,590.64 yuan will be recognized as revenue in 2026.

(43) Taxes and surcharges

Item Amount for the current period Amount for the previous period

Consumption tax 158,916.55 125,776.33 Urban maintenance and construction tax 10,689,987.19 8,150,892.69 Education surcharge 7,632,297.64 5,826,854.60 Property tax 18,348,235.88 17,717,017.08 Land use tax 3,106,771.97 3,035,683.96 Stamp tax 1,504,904.21 2,169,949.16 Vehicle and vessel use tax 126,189.02 135,051.14 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Amount for the current period Amount for the previous period

Environmental protection tax 103,428.18 112,248.97 Resource tax 38,214.32

Cultural undertaking construction fee 10,977.13 8,501.30

Total 41,719,922.09 37,281,975.23

(44) Sales expenses

Item Amount for the current period Amount for the previous period

Advertising and publicity fees 224,181,711.82 183,978,223.08 Market maintenance fees 122,467,509.59 101,652,763.33 Employee compensation 107,382,116.10 112,466,498.43 Travel expenses 183,664,899.89 140,286,971.98 Vehicle expenses 6,033,769.11 20,346,908.09 Office expenses 62,337,999.77 35,394,208.05 Labor expenses 25,163,327.01 31,968,663.39 Market development fee 34,976,278.96 42,386,080.21 Depreciation fee 21,195,868.90 27,730,046.02 Others 37,924,210.68 32,813,476.62

Total 825,327,691.83 729,023,839.20

(45) Management expenses

Item Amount for the current period Amount for the previous period

Employee compensation 158,216,101.36 140,462,081.87 Depreciation expense 17,017,515.85 17,387,500.37 Amortization expense 29,010,442.96 32,508,711.96 Office expenses 15,772,618.21 18,367,189.91Travel expenses 5,971,168.58 17,840,368.38Others 34,329,810.75 99,819,410.61

Total 260,317,657.71 326,385,263.10

(46) Research and development expenses

Amount of current period Amount of previous period

Employee compensation 21,021,895.24 22,583,731.07 Material expenses 27,068,772.52 18,219,777.41 Fuel and power expenses 5,407,490.55 3,824,539.61 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Amount of current period Amount of previous period

Depreciation and amortization expenses 6,762,205.41 13,281,033.52 Office expenses 290,817.26 3,422,728.23 Travel expenses 576,087.32 874,671.25 Commissioned external research and development expenses 36,716,630.13 16,532,061.64 Others 4,069,368.76 3,460,826.67

Total 101,913,267.19 82,199,369.40

(47) Financial expenses

Item Amount for the current period Amount for the previous period

Interest expense 52,258,878.57 92,084,674.18 Interest income -7,841,730.15 -22,173,932.33 Handling fee 624,051.17 1,080,081.34 Others 1,362,505.42 Total 45,041,199.59 72,353,328.61Other instructions

Financial expenses for this period decreased by 37.75% compared with the same period last year, mainly due to the year-on-year decrease in interest expenses for this period.

(48) Other income

1. Classification of other income

Sources of other income Amount incurred in the current period Amount incurred in the previous period

Government subsidies 40,959,639.07 54,462,322.71 Income from debt restructuring 223,313.99 116,788.96 Total

41,182,953.06 54,579,111.67

2. Details of other income

Sources of other income Amount incurred in the current period Amount incurred in the previous period Policy realization funds for the second phase of the industrial park project 5,094,542.60 3,728,940.93 Value-added tax and surcharge exemption 5,048,287.47 10,769,298.55 Delayed administrative development [2013] No. 15: Regarding the grant to Jilin Aodong Pharmaceutical Group Yanji Co., Ltd.

Decision on fund subsidy and extension of the company's capital subsidy [2014] No. 21: Regarding the grant to Jilin Aodong Pharmaceutical

Decision on fund subsidy of Group Yanji Co., Ltd., Yanzhou Financial Construction Index [2015] No. 95: 2,991,300.00 3,012,330.00 Regarding the central infrastructure investment in 2015 (Industrial Transformation and Upgrading Project - Strengthening the Manufacturing Core

Competitiveness) Budget Notice

Jifu Industry Index [2024] No. 1111: Regarding the issuance of provincial industrial and information technology high-tech projects in 2024

2,000,000.00

Notice on Special Funds for Quality Development (Development Direction of Pharmaceutical Industry) (Post-incident Rewards and Subsidies for Formula Granules)

Duncai Jianzhi [2025] No. 0028: Regarding the issuance of provincial high-quality industrial development special projects in 2025

2,000,000.00

Notice of project funds (pharmaceutical industry development part) (post-event reward for Guiqishen Oral Liquid)

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Sources of other income: Amount incurred in the current period Amount incurred in the previous period Yanzhou Caijianzhi [2024] No. 161: Regarding the 2025 provincial high-quality industrial development plan issued in advance

Notice of 1,469,500.00 524,716.00 Special Exhibition Funds ("Intelligent Transformation to Digital Transformation" Part)

Duncaiyu [2012] No. 426: Notice on allocating funds (Aodong Industrial Park Infrastructure

1,460,279.79 1,988,849.08 construction)

Job stabilization subsidy 1,347,699.72 1,541,018.69 Jifa Investment [2017] No. 784: Jilin Provincial Development and Reform Commission issued the third notice of 2017

Notice of approving the capital construction fund investment plan within the provincial budget, Ji Cai Jian Zhi [2018] No. 289:

Regarding the 2018 Central Infrastructure Investment (Special Project for Adjustment and Transformation of Old Industrial Bases in Northeast China)

Notice on the budget for the relocation and reconstruction of the old industrial zone in Yicheng District, Jicai Finance Industry Index [2018] No. 423: 1,026,428.57 1,026,428.57 Notice on the allocation of special funds for the development of provincial key industries in 2018, Jicai Finance Education Index [2022]

No. 1003: Notice on issuing the 2023 centrally guided local science and technology development fund budget in advance

Zhi (automated production line upgrade project)

Dunwei Nongbanfa [2024] No. 39: Notice on the issuance of relevant systems for producer subsidies 899,649.00 Urban land use tax and real estate tax exemptions and exemptions, and environmental protection tax refunds 877,484.36 877,484.36 Jilin Industry Index [2024] No. 961: Regarding the issuance of high-quality provincial industrial development in 2025 in advance

Notice of special funds for the development of the project ("Intelligent Transformation and Digital Transformation" part) (anti-tumor product engineering project post-event award 857,142.86 supplement)

Duncaiyu [2018] No. 275: Notice on the allocation of funds (new solid vehicle in the industrial park

812,806.29 1,724,157.25 rooms)

Ji'ao Yanfa [2018] No. 6: Technical transformation of environmental protection equipment and facilities 764,578.32 868,113.86 Duncai Jianzhi [2020] No. 24: Regarding the allocation of subsidies for the construction of the central emergency material support system

750,000.00 750,000.00 Financial Budget Notice (Emergency Material Reserve Support System Construction Project)

Refund of personal income tax withholding fees 709,237.29 563,936.14 Duncaiyu [2017] No. 72: Notice on allocating funds (new solid workshop in industrial park) 687,242.39 1,960,532.77 Dunzhengbanfa [2025] No. 11: Dunhua Municipal People's Government Office issued the "2025 Dunhua

593,129.40 Notice on the Implementation Plan of Hua City’s Farmland Fertility Protection Subsidy

Yanzhou Gongxinfa [2013] No. 60: Regarding the release of construction funds for the second phase of Jilin Aodong Industrial Park

517,444.26 1,186,925.29 gold notice

Ji Cai Liang Zhi [2025] No. 743: Regarding the issuance of a special plan for the high-quality development of the business service industry in 2025

Notification of 500,000.00 funds

Dun Caijiao [2023] No. 06: Regarding the central government’s guidance on local science and technology development in 2023 issued in advance

Notice of capital budget (technical upgrade of Xiaoer Chai Gui Antipyretic Oral Liquid and re-evaluation of clinical application system price 500,000.00)

Yanzhou Finance and Construction Guide [2016] No. 56: Regarding the release of central infrastructure investment in 2016 (Northeast China)

Notice of the District’s Three-Year Action Plan to Cultivate and Develop Emerging Industries) Budget, Jifa Reform Investment [2016]

478,022.92 557,320.88 No. 512: Jilin Provincial Development and Reform Commission issued an order to cultivate and develop the northeastern region of the province in 2016

Notice on the three-year action plan for emerging industries and the investment plan within the central budget

Jicai Caijiaozhi [2025] No. 181: Regarding the release of the 2025 Jilin Province Science and Technology Convergence Project

Notice on project funds, Jicai Jiaogui [2025] No. 365: Notice on the allocation of 450,000.00 special funds for science and technology in Jilin Province in 2025 (second batch)

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Sources of other income: Amount incurred in the current period Amount incurred in the previous period Duncaiyu [2019] No. 451: Notice on the release of funds (project construction support funds),

Duncaiyu [2019] No. 452: Notice on the release of funds (industrial development support award funds 415,000.00 415,000.00)

Dun Cai Jian Gui [2018] No. 58: Regarding the adjustment of central infrastructure investment (cultivation and development of new

Notice on the Budget of the Three-Year Industrial Development Action Plan Project, Jifa Gaoji [2018] No. 953:

385,714.20 385,714.20 Jilin Provincial Development and Reform Commission’s three-year action plan project on adjusting, cultivating and developing emerging industries

Notice on the investment plan within the central budget

Yanzhou Finance and Construction Index [2013] No. 131: Regarding the release of central infrastructure investment (industrial promotion) in 2013

Notification of the budget for the second batch of Xinghe Technical Transformation Project (renovation and expansion of the Shuanghuang Enteritis dispersible tablets production line 368,000.00 368,000.00 construction)

Jicainongzhi [2008] No. 1594: Regarding the issuance of special resources for provincial agricultural industrialization in 2008

Jin’s Notice, Ji Cai Jian Zhi [2013] No. 529: Regarding the issuance of the 2013 high-tech industry development plan

357,142.86 357,142.86 Notification of industrial technology research and development funds for the exhibition project (high-tech industrialization of Qingnao Zhitong Capsules

Demonstration project model)

Jifu Industry Index [2023] No. 1177: Regarding the early release of the 2024 industrial and information technology

Notice of Special Funds for Quality Development ("Intelligent Transformation and Digital Transformation" Award and Subsidy) (Automated Production Line Construction Project 357,142.86 Post-incident Award and Subsidy)

Jinongfa [2017] No. 32: Jilin Provincial Comprehensive Agricultural Development Office on Agriculture in 2017

343,714.32 343,714.32 Approval of the implementation plan of the financial subsidy project for comprehensive development and industrialization development

Jinongfa [2016] No. 61: Jilin Provincial Comprehensive Agricultural Development Office on Agriculture in 2016

308,000.00 308,000.00 Approval of the implementation plan of the financial subsidy project for comprehensive development and industrialization operation

Funding from the Provincial Science and Technology Development Plan of the Department of Science and Technology of Jilin Province (a kidney rejuvenation device with improved stability)

300,000.00 Kang tablets and preparation method results transformation)

Duncai Qizhi [2024] No. 1: Regarding the early release of high-quality development plans for industry and information technology in 2024

Notice of 282,765.94 Special Exhibition Funds ("Intelligent Transformation to Digital Transformation" Award and Subsidy)

Dunnong Lianfa [2022] No. 9: Dunhua Municipal Agriculture and Rural Affairs Bureau and Dunhua Municipal Finance Bureau issued the "Dunhua Municipal Bureau of Agriculture and Rural Affairs"

274,321.80 Notice of Hua City’s 2022 “Grain to Feed” Work Implementation Plan

Jiren Shelianzi [2019] No. 72: Opinions on the comprehensive implementation of the new apprenticeship system in enterprises 257,500.00 60,000.00 Debt restructuring income 223,313.99 116,788.96 Jifa Gai Investment [2011] No. 1269: Regarding the implementation of the old industrial bases in northeastern and other provinces in 2011

Notice on the investment plan within the central budget of the local adjustment and transformation project (second batch) (water needle and freeze-drying 221,428.57 221,428.57 needle workshop new version GMP technical transformation project)

Ji Cai Jian Zhi [2020] No. 723: Regarding the issuance of subsidies for the construction of the central emergency material support system

214,285.71 214,285.71 Notice of Fund Budget (Emergency Anti-epidemic Drug Production Line Construction Project)

Duncaiqi [2015] No. 17: Provincial key industry development guidance funds, Duncai Construction Index [2015]

No. 18: Notice on issuing the 208,333.33 500,000.00 expenditure budget for guiding funds for the strategic adjustment of the provincial economic structure in 2015, Duncaiqi [2016] No. 8: Guiding funds for the development of provincial key industries in 2016

Ancaixingzhi [2023] No. 148: Regarding the order issued by Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

205,026.12 205,026.12 Notice of special subsidy funds for the modern Chinese medicine intelligent production line project of the Co., Ltd.

Yanzhou Caijianzhi [2024] No. 53: Regarding the allocation of provincial small and medium-sized enterprise development projects in 2024

Notice of 200,000.00 funds (second batch)

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Sources of other income generated Amount incurred in the current period Amount incurred in the previous period Ji Caijiao Index [2024] No. 934: Regarding the advance release of the 2025 Jilin Province Science and Technology Innovation Special Project

Notification of 250,000.00 funds (selection of “Science and Technology Innovation Specialist”)

Jifu Industry Index [2025] No. 694: Regarding the issuance of provincial-level industrial high-quality development special projects in 2025

Notice of 191,666.86 funds (pharmaceutical industry development part) (post-event compensation for oseltamivir phosphate capsules)

Jifu Industry Index [2025] No. 694: Regarding the issuance of provincial-level industrial high-quality development special projects in 2025

Notice of 175,000.00 funds (pharmaceutical industry development part) (post-incident reward for Lysine Pirin for Injection)

Duncaiyu [2019] No. 449: Notice on the release of funds (intelligent production of liquid workshops

169,043.92 169,043.89 lines)

Jiren Social Federation [2021] No. 151: Regarding the forwarding of "On Comprehensive Implementation of New Enterprises with Chinese Characteristics"

Notice on the Guiding Opinions on Strengthening the Training of Skilled Talents under the RMB 167,500.00 Apprenticeship System

Yanzhou Finance and Construction Index [2025] No. 101: Regarding the issuance of provincial-level industrial high-quality development special projects in 2025

Notice of 160,000.00 funds (rewards and subsidies for stable industrial growth in the first quarter)

Duncaiqi [2019] No. 4: Regarding the allocation of special funds for the development of provincial key industries in 2019 (No.

157,142.88 157,142.88 batch) notice

Jicaijiaozhi [2024] No. 934: Regarding the early release of the 2025 Jilin Province Science and Technology Innovation Special

Notification of 150,000.00 funds (generic risperidone microspheres for injection)

Jicai Caijiaozhi [2024] No. 934: Regarding the early release of the 2025 Jilin Province Science and Technology Innovation Project

Notification of 150,000.00 funds (clinical re-evaluation technology research and development of Xuefu Zhuyu Oral Liquid, a large variety of traditional Chinese medicine)

Research on key technologies of the sika deer industry and development of comprehensive health products 150,000.00 Ji Caijiao Guide [2024] No. 934: Regarding the advance issuance of the 2025 Jilin Province Science and Technology Innovation Special

Notification of 150,000.00 funds (classic famous prescription Astragalus Guizhi Wuwu Decoction)

Duncaiyu [2016] No. 163: Notice on the allocation of funds (new inspection of Aodong Industrial Park

127,472.13 303,482.83 center)

Duncaiqi [2020] No. 11: Regarding the allocation of special funds for the development of provincial key industries in 2020

123,999.96 Notice of 123,999.96

2020 Modern Industrial Park Project 115,000.00 180,992.03 Technology upgrading and expansion and transformation funds 112,436.65 2,191,870.96 Yanbian Prefecture Science and Technology Development Plan Project Fund of Yanbian Korean Autonomous Prefecture Science and Technology Bureau (Ginseng Bone

100,000.00 Research and development of collagen peptide products)

Yanbian Prefecture Science and Technology Development Plan Project Fund of Yanbian Korean Autonomous Prefecture Science and Technology Bureau 100,000.00 330,000.00 Notice on the establishment of the Yanbian Prefecture Science and Technology Development Plan project and the allocation of special funds (phosphorus for injection

100,000.00 Research on generic drugs of levonidazole disodium acid)

Yanzhou Fa [2016] No. 23: Yanbian Prefecture Committee of the Communist Party of China and Yanbian Prefecture People's Government on in-depth implementation

100,000.00 Implementation opinions on innovation-driven development strategy to promote green transformation (award and subsidy for high-tech enterprises)

Postdoctoral funding 100,000.00 Duncaiyu [2015] No. 259: Notice on the allocation of funds (technological transformation project funds) 96,327.31 329,848.68 Duncaiyu [2014] No. 35: Notice on the allocation of funds (technological innovation funds) 93,922.48 89,469.24 Duncaiyu [2017] No. 365: Notice on allocating funds (technical renovation of environmental protection equipment and facilities

93,750.00 125,000.00)

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Sources of other income Amount incurred in the current period Amount incurred in the previous period Taocai Zi [2018] No. 140: Regarding the allocation of projects to Jilin Aodong Taonan Pharmaceutical Co., Ltd.

Notice of R&D funds for Project 90,277.78 41,666.67

Technical transformation of testing equipment 80,657.80 100,000.00 Yanzhou Finance Construction Index [2013] No. 69: Regarding the distribution of high-tech industry development project products in 2013

Notice of 69,377.18 261,520.95 Industrial Technology Research and Development Funds (High-tech Industrialization Demonstration Project of High-quality Ginseng Pieces)

Jicai Caijiaozhi [2022] No. 1002: Regarding the advance release of the 2023 Jilin Province Science and Technology Innovation

Notice of Special Funds, Jicai Jiaogui [2022] No. 683: Regarding the release of Jilin’s 2022

60,000.00 50,000.00 Provincial Science and Technology Innovation Special Fund (Second Batch) Notice (Anti-tumor Targeted Agent Palbociclib Glue

Generic drug development)

Duncaiqi [2018] No. 1: Special funds for the development of key industries at the provincial level 58,333.32 58,333.32 Special subsidy funds for the public rental housing construction project for college students in Aodong Industrial Park 54,489.24 54,326.52 Duncaijianzhi [2019] No. 30: Regarding the second batch of provincial budget capital construction in 2019

Notice of Capital Expenditure Budget (Renovation and Expansion Phase II Project), Yanzhou Development and Reform Investment [2019]

50,000.00 50,000.00 No. 39: Regarding the breakdown of preliminary work funds for investment projects within the state and provincial budgets in 2019

Planned Notice

Jicaiyu [2023] No. 1: Notice on Approving the Department Budget for 2023 (Five Chinese Herbal Medicines

50,000.00 50,000.00 Special Fund for Scientific and Technological Innovation for Research on Fresh-cut Production Technology and Quality Standards in the Origin)

Jilin Provincial Department of Science and Technology Provincial Science and Technology Development Plan Project Fund 50,000.00

Regarding the selection of 137 scientific and technological talents including Wu Yanxiong as the fourth batch of Jilin Provincial Enterprise "Science and Technology Talents" in 2024

50,000.00

Notice of "Innovation Specialist (Vice President of Science and Technology Innovation)"

Secondary development of Shaofu Zhuyu Granules, a large variety of traditional Chinese medicine 50,000.00

Jicai Caijiaozhi [2025] No. 365: Regarding the issuance of the 2025 Jilin Province Science and Technology Convergence Project

50,000.00

Notice of the second batch of funds (Jilin Province Enterprise R&D Investment Guidance Plan Project Allocation)

Dunchufa [2014] No. 04: Notice on the allocation of special funds for supporting basic infrastructure

49,791.96 49,791.96 Zhi

Yanzhou Finance and Construction Index [2016] No. 26: Regarding the allocation of provincial industrial innovation special funds in 2016

49,491.71 62,500.00 Expenditure Budget Notice (Pilot Testing Innovation Platform for Traditional Chinese Medicine Oral Preparations)

Yanzhou Caijianzhi [2016] No. 182: Regarding the issue of pollution reduction and air pollution prevention in 2016

Notice on special funds for pollution control, Duncai Jianzhi [2016] No. 59: Notice on the allocation of special funds for pollution reduction and air pollution prevention and control in 2016 41,783.81 48,546.96

Duncaiqi [2016] No. 10: Regarding the issuance of guidance funds for the development of provincial key industries in 2016

Notice of 41,163.56 87,790.21 gold (subsidy for the relocation of a pre-processing workshop of 10,000 tons of Chinese medicinal materials per year)

Changfu Office Mingdian [2025] No. 2: The General Office of the Changchun Municipal People’s Government on the afterburner to achieve a quarter

35,000.00 35,000.00 Notice on several policy measures to “get off to a good start” and continue to promote stable economic growth

Research on key technologies and quality standards for processing traditional Chinese medicine pieces 35,000.00

Duncainong [2015] No. 21: Regarding the release of provincial-level modern agricultural development guidance funds in 2015

Notice of 32,500.00 65,000.00

Duncaizong [2014] No. 6: Notice on the allocation of land acquisition and demolition compensation costs 31,106.52 31,106.52 Yanzhou Gongxinfa [2018] No. 113: Yanbian Prefecture Industry and Information Technology Bureau issued notice on the 2018

30,000.00 30,000.00 Notice on the use plan of state-level project funds

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Sources of other income Amount incurred in the current period Amount incurred in the previous period Special funds for air pollution prevention and control 22,587.91 17,611.08 One-time job retention subsidy 21,000.00 Yanzhou Zhenghan [2007] No. 170: Yanbian Korean Autonomous Prefecture People's Government's Notice on Grants to Jilin

19,500.00 23,000.00 Approval of internal subsidy for retired employees of Aodong Pharmaceutical Group Co., Ltd.

One-time job expansion subsidy 19,500.00 10,500.00 Yanji Municipal Human Resources and Social Security Bureau-trainee subsidy 15,000.00 53,080.00 Sewage station land subsidy 14,078.72 12,309.00 Duncaiyu [2012] No. 268: Notice on the allocation of funds (Technology Innovation Award for Traditional Chinese Medicine Pieces

14,059.57 13,994.16 incentive funds

Yanji Municipal Bureau of Industry and Information Technology declares the construction of key industrial projects for service in 2024 and

Notice on writing off application fees for special fund projects at or above the national and provincial levels (2024 Kyrgyzstan 14,000.00 Lin Province Manufacturing “Intelligent Transformation to Digital Transformation” Project Award and Subsidy Fund)

Yanzhou Finance and Construction Index [2023] No. 242: Regarding the issuance of high-quality industrial and information technology in 2024 in advance

Notice of 12,600.00 special funds for development ("Intelligent Transformation and Digital Transformation" awards and subsidies)

Project funds from the Provincial Science and Technology Development Plan of the Department of Science and Technology of Jilin Province (Acanthopanax germplasm resource evaluation and

11,320.75 Research on key technologies for quality improvement)

Duncai Jianzhi [2015] No. 18: Regarding the guidelines for the strategic adjustment of the provincial economic structure in 2015

10,993.40 10,942.20 Notice on capital expenditure budget

Dun Caijiao [2023] No. 46: About the allocation of special funds for scientific and technological innovation in Jilin Province in 2023

Notice of 10,714.32 10,714.32 (medicine cut off)

Provincial Science and Technology Development Plan Project Fund from the Department of Science and Technology of Jilin Province (Key Technologies for Special Processing of Linxia Ginseng)

9,433.96 technical research and application)

Dunnongfa [2024] No. 84: Regarding the issuance of the "Name of the Agricultural Socialization Service Subject Created by Dunhua City"

9,155.00 Notice on the Library Implementation Plan

Finance and Taxation [2019] No. 21: Retired soldiers on further supporting self-employed retired soldiers to start their own businesses

7,500.00 9,000.00 Notice on employment-related tax policies

Unemployment Stabilization Refund 6,909.42 Jilin Provincial Department of Market Supervision and Administration (subsidy for patent-intensive products) 5,000.00 First prize of the 10th Maker China Jilin Provincial Small and Medium Enterprises Innovation and Entrepreneurship Competition Yanbian Division 5,000.00 Jilin Provincial Department of Science and Technology Announcement on the first batch of technology-based small and medium-sized enterprises entering the database in 2025 (Science and Technology

1,000.00 technical small and medium-sized enterprises to enter the treasury as bonus and subsidy funds)

Yanzhou Kelianfa [2025] No. 2: Regarding the release of the "Yanbian Prefecture Science and Technology Development Plan 2025"

1,000.00 Project Application Guidelines” Notice

Yanzhou Kelianfa [2025] No. 2: Regarding the release of the "Yanbian Prefecture Science and Technology Development Plan 2025"

1,000.00 Project Application Guidelines" (Scientific and Technological Innovation Capacity Building Award and Subsidy Fund)

Letter about the organization recommending national science and technology small and medium-sized enterprises to subsidize projects in 2025 1,000.00 Baike Cai Lian Zi [2025] No. 7: About the allocation of "About Supporting Baicheng City Science and Technology Innovation Awards"

1,000.00 Measures (Second Batch) Fund Notice

Receive market monitoring subsidy from Antu Commerce Bureau 900.00 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Sources of other income: Amount for the current period Amount for the previous period Concerning the allocation of funds to support project research and development of Jilin Aodong Taonan Pharmaceutical Co., Ltd.

1,785,714.29 known

Duncainong [2024] No. 1006: 2021 Provincial Modern Agricultural Industrial Park Northern Authentic Traditional Chinese Medicine

1,170,000.00 material project funds

Registration acceptance award for ancient classic traditional Chinese medicine preparation Loquat Qingfei Granules 900,000.00 consistency evaluation award project for chemical generic drug vildagliptin tablets 825,000.00 consistency evaluation research award for erlotinib hydrochloride tablets 800,000.00 Yanzhou Finance Construction Index [2012] No. 192, Yanzhou Finance Construction Index [2012] No. 141: Sterile Preparation Technology

799,230.00 technical renovation project

Special funds for the development of the medical and health industry (technical upgrade of the major traditional Chinese medicine brand Xuefu) 630,000.00 Six taxes and two fees 613,555.83 Subsidy for converting grain into feed silage 534,079.00 Yanzhou Finance and Education Guide [2023] No. 169: Regarding the allocation of the 2023 Jilin Province Science and Technology Innovation Special Project

Notice of 525,000.00 funds (medicine cuts)

Dun Nong Daily [2023] No. 129: Provincial Sika Deer Genetic Resources Conservation Farm Award and Subsidy Fund in 2023 500,000.00 R&D investment subsidy fund 438,000.00 Dun Caiyu [2016] No. 260: Technical transformation funds (new intelligent elevated tower in Aodong Industrial Park

417,244.25 body bank)

Integrated research on ecological planting technology of high-quality authentic medicinal material Nasturtium 400,000.00 Ji Caijiao Zhi [2021] No. 739, Ji Caijiao Zhi [2022] No. 1002: generic drug tetrabenazine

400,000.00 Research and Development of Zinzi Tablets

Arable land fertility protection subsidy 377,007.25 Ji Caijiao Guide [2023] No. 964: Regarding the early release of the 2019 Jilin Province Science and Technology Innovation Special

Notice of 350,000.00 funds

Duncainong [2024] No. 1005: 2022 Dunhua City Provincial Rural Revitalization Project (Agricultural Products Processing

310,000.00 industrial development) funds

Ji Cai Jiao Zhi [2024] No. 242: The central government guides local science and technology development funds 300,000.00 Jilin Provincial Science and Technology Department Provincial Science and Technology Development Plan Project Fund (Treatment of Thrombocytopenia, Anemia

300,000.00 (transformation of technical achievements of drugs, preparation methods and quality control methods)

Ministry of Industry and Information Technology's Advanced Basic Technology Talent Fund 250,000.00 Dunhua City's Awards and Subsidies for Enterprises with Stable Industrial Economic Growth in the First Quarter of 2024 214,300.00 Ji Caijiaozhi [2024] No. 375: 2024 Jilin Province Scientific Innovation Special Fund (Second Batch) 210,000.00 Dun Caijiao [2024] No. 06: Regarding the allocation of the Yanbian Prefecture Science and Technology Development Plan Project in 2023

Notification of 200,000.00 funding

Dunzheng Banfa [2023] No. 5: Agricultural machinery purchase and application subsidies in 2022-2023 184,800.00 Yanzhou Finance and Education Index [2022] No. 194: Jilin Provincial Science and Technology Innovation Special Fund (first batch) 175,000.00 Dunhua City Talent Exchange Service Center Employment Internship Subsidy 102,000.00 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Sources of other income generated Amount incurred in the current period Amount incurred in the previous period Jilin Provincial Science and Technology Department Provincial Science and Technology Development Plan Project Fund (Naoxinshu Oral Liquid Quality Improvement

100,000.00 key technology research and development)

Yanbian Prefecture school-enterprise cooperation project funds (research and development of sea buckthorn fruit and vegetable enzymes) 100,000.00 planting subsidy 96,474.00 Jigong New Plan [2014] No. 277: Provincial key industry development guidance funds 87,712.98 Duncaiyu [2014] No. 295: new product development subsidy funds 84,479.17 Jicaishezhi [2020] No. 498: Dunhua Municipal Finance Bureau transferred to Jilin Province Talent Training in 2020

82,164.24 base (mature type) subsidy funds

Jiaocaiqi [2023] No. 6: Regarding the allocation of provincial small and medium-sized enterprises and private economic development in 2023

Notice and reminder of special special funds (2023 provincial-level "specialized, special and innovative" small and medium-sized enterprises awards and subsidies)

80,000.00 Caiqizhi [2023] No. 7: Regarding the release of the provincial special fund budget for small and medium-sized enterprises in 2023

Notification

Yanbian Prefecture School Science and Technology Development Plan Project Fund (development of a health care product to alleviate breast diseases) 80,000.00 Research and demonstration of key technologies for ecological planting of ginseng 70,754.72 Yanzhou Finance and Education Guide [2012] No. 188: Technology Upgrading Project of Anshen Bu Nao Liquid, a large variety of traditional Chinese medicine 62,500.00 Jilin Provincial Department of Science and Technology Provincial Science and Technology Development Plan Project Fund (Jilin Provincial Enterprise "Science and Technology Innovation Specialist"

50,000.00 special item)

Yanbian Prefecture School-Enterprise Cooperation Project Fund (R&D of Dendrobium officinale Blueberry Drink Health Products) 50,000.00 Continuous Production Subsidy for Key Industrial Enterprises during the Spring Festival 40,000.00 Jilin Provincial Science and Technology Department Provincial Science and Technology Development Plan Project Fund (Korean Epimedium and Licorice Origin

25,000.00 Research on key technologies and quality standards for fresh cutting)

Yanzhou Finance and Education Guide [2022] No. 134: Regarding the allocation of the 2022 Jilin Province Science and Technology Innovation Special Project

Notice of 22,750.00 funds (part of the special medical funds cut into pieces and released)

Yanzhou Finance and Education Index [2022] No. 146: Jilin Province Science and Technology Innovation Special Fund in 2022 (Second

12,250.00 batch)

Subsidy for exhibitors of the 32nd China Food Expo 6,000.00 Yanzhoufa [2013] No. 6: Regarding the issuance of detailed implementation rules for Yanbian Prefecture to highlight the development of private economy

3,000.00 Notice-2023 Market Development Enterprise Subsidy

Research on the construction of quality evaluation system of authentic medicinal materials for windbreak and key technologies for quality improvement 2,358.49

Total 41,182,953.06 54,579,111.67

(49) Investment income

Item Amount for the current period Amount for the previous period

Long-term equity investment income calculated using the cost method

Income from long-term equity investments accounted for using the equity method 2,556,313,157.21 1,745,085,808.56 Investment income from disposal of long-term equity investments

Investment income from trading financial assets during the holding period 14,513,218.79 17,368,426.84 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Amount for the current period Amount for the previous period

Long-term equity investment income calculated using the cost method

Investment income from disposal of trading financial assets 9,096,866.19 12,872,743.77 Investment income from other equity instrument investments during the holding period 3,769,122.46 79,120,359.85 Income from debt restructuring 3,718,054.16

Total 2,587,410,418.81 1,854,447,339.02

(50) Gains from changes in fair value

Sources of income from changes in fair value Amount for the current period Amount for the previous period

Trading financial assets 173,864,614.91 -121,672,850.53

Total 173,864,614.91 -121,672,850.53

(51) Credit impairment losses

Item Amount for the current period Amount for the previous period

Bad debt losses on accounts receivable -284,482.91 6,233,346.76 Bad debt losses on other receivables -691,008.69 9,860,469.95

Total -975,491.60 16,093,816.71

(52) Asset impairment losses

Item Amount for the current period Amount for the previous period

Inventory depreciation losses -60,817,930.05 -42,830,825.04 Fixed asset impairment losses -120,539,591.39 -37,424,980.40 Intangible asset impairment losses -49,549,680.99 -26,449,461.10 Development expenditure impairment losses -1,056,213.99 Impairment losses on construction in progress -11,252,907.00

Total -242,160,109.43 -107,761,480.53

(53) Income from asset disposals

Included in extraordinary items for the current period Amount for the current period Amount for the previous period

Amount of non-current assets disposal gains and losses 1,322,174.39 -670,692.32 1,322,174.39

Total 1,322,174.39 -670,692.32 1,322,174.39

(54) Non-operating income

1. Non-operating income by item:

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Included in extraordinary items for the current period Amount for the current period Amount for the previous period

Amount of permanent gains and losses Total gains from scrapping non-current assets 5,416.11 17,985.61 5,416.11 Including: Gains from scrapping fixed assets 5,416.11 17,985.61 5,416.11 Penalty and confiscation income 116,377.72 106,355.92 116,377.72 Others 14,209,562.76 37,417,844.79 14,209,562.76Total 14,331,356.59 37,542,186.32 14,331,356.59Other instructions

Non-operating income - other items are mainly income generated from the difference between the investment cost of increasing the H shares of GF Securities Co., Ltd. and the investment enterprise's fair value share of the investee's identifiable net assets at the time of investment. Non-operating income decreased by 61.83% in this period compared with the same period last year, mainly due to the increase in the company's current period.

This was due to the year-on-year decrease in income generated from holding H shares of GF Securities Co., Ltd.

(55) Non-operating expenses

Included in non-recurring items for the current period Amount for the current period Amount for the previous period

Amount of profit and loss Total losses from scrapping of non-current assets 1,672,948.87 419,992.61 1,672,948.87 Including: losses from scrapping of fixed assets 1,286,250.22 230,178.19 1,286,250.22 Loss from disposal of intangible assets 166,589.94 189,814.42 166,589.94

Loss from scrapping of productive biological assets 220,108.71 220,108.71Donation expenses 829,941.52 1,213,174.00 829,941.52Others 2,798,435.44 13,348,195.40 2,798,435.44

Total 5,301,325.83 14,981,362.01 5,301,325.83

(56) Income tax expenses

1. Details of income tax expenses:

Item Amount for the current period Amount for the previous period

Current income tax calculated in accordance with tax laws and relevant regulations 20,695,726.72 28,478,290.22 Deferred income tax expense 38,628,959.35 -26,248,395.47 Total 59,324,686.07 2,229,894.75 Other notes

Income tax expenses for this period increased by 2560.43% compared with the same period last year, mainly due to the increase in deferred income tax expenses for this period.

Due to the increase in the same period last year.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Adjustment process of accounting profits and income tax expenses:

Item Amount for this period

Total profit 2,420,594,632.14 Income tax expenses calculated according to statutory [or applicable] tax rates 605,148,658.04 Impact of different tax rates applicable to subsidiaries 289,246.78 Impact of adjusting income tax in previous periods

Effect of non-taxable income -663,197,642.90 Effect of non-deductible costs, expenses and losses 26,828,781.04 Effect of using deductible losses of unrecognized deferred income tax assets in the previous period -1,231,095.52 Effect of deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period 91,486,738.63 Income tax expenses 59,324,686.07

(57) Calculation process of basic earnings per share and diluted earnings per share

1. Basic earnings per share

Basic earnings per share =P ÷S

S=S ＋S ＋S×M÷M –S×M÷M –S

0 1 i i 0 j j 0 k

Among them: P is the net profit attributable to the company's common shareholders or the net profit attributable to common shareholders after deducting non-recurring gains and losses; S is the weighted average number of common shares outstanding; S is the total number of shares at the beginning of the year; S

0 1 is the increase in the number of shares due to the transfer of public reserve funds to share capital or stock dividend distribution during the reporting period; S is the increase in the number of shares due to issuance during the reporting period

i

The number of shares is increased due to new shares or debt-for-equity swaps; S is the decrease in the number of shares due to repurchase during the reporting period; S is the reduction in the number of shares during the reporting period.

j k

Number of shares; M is the number of months in the reporting period; M is the cumulative number of months from the month after the increase in shares to the end of the reporting period;

0i

M is the cumulative number of months from the next month when shares are reduced to the end of the reporting period.

j

2. Diluted earnings per share

Diluted earnings per share = P/(S + S + S×M÷M –S×M÷M –S + warrants, share options,

1 0 1 i i 0 j j 0 k

Weighted average number of common shares increased by conversion of bonds, etc.)

Among them, P is the net profit attributable to the company's common shareholders or the net profit attributable to the company's common shareholders after deducting non-recurring gains and losses. The impact of dilutive potential common shares will be taken into account and adjusted in accordance with the Accounting Standards for Business Enterprises and relevant regulations. When calculating diluted earnings per share, the company should consider the impact of all dilutive potential ordinary shares on the net profit attributable to the company's common shareholders or the net profit attributable to the company's common shareholders after deducting non-recurring gains and losses and the weighted average number of shares, and include the diluted earnings per share in descending order of dilution degree until the diluted earnings per share reaches the minimum value.

Calculation process:

(1) Basic earnings per share

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Basic earnings per share is calculated by dividing the consolidated net profit attributable to the company's ordinary shareholders by the weighted average number of outstanding ordinary shares of the company:

Item Amount for the current period Amount for the previous period

Consolidated net profit attributable to ordinary shareholders of the company 2,395,240,134.98 1,551,393,070.70 Weighted average number of ordinary shares outstanding of the company 1,173,242,570.00 1,177,193,400.00 Basic earnings per share (yuan/share) 2.0416 The weighted average number of 1.3179 common shares is calculated as follows:

Item Amount for the current period Amount for the previous period

Number of common shares issued at the beginning of the period 1,195,895,387.00 1,168,418,131.00 Plus: the weighted number of common shares increased in the current period 54,877,958.00 minus: the weighted number of common shares repurchased in the current period 22,652,817.00 46,102,689.00 The weighted number of common shares outstanding at the end of the year 1,173,242,570.00 1,177,193,400.00Other instructions:

① The weighted average number of common shares increased by 54,877,958 shares in the same period last year was due to the conversion of convertible corporate bonds issued by the company into A shares of the company. The conversion period was from January 1, 2024 to March 13, 2024. The calculation is weighted based on the conversion date.

② The company will launch a share repurchase plan in November 2024. The weighted number of common shares repurchased in this period and the previous period is calculated based on the weighted repurchase progress.

(2) Diluted earnings per share

Diluted earnings per share is calculated by dividing the adjusted consolidated net profit attributable to the Company's ordinary shareholders by the adjusted weighted average number of outstanding ordinary shares of the Company:

Item Amount for the current period Amount for the previous period

Consolidated net profit attributable to the company's ordinary shareholders 2,395,240,134.98 1,551,393,070.70 Dilutive potential ordinary shares recognized as expenses in the current period

interest

Attributable to ordinary shareholders of the company after adjustment in the current period

Consolidated net profit of 2,395,240,134.98 1,551,393,070.70

Adjusted weighting of the Company’s outstanding common shares

1,173,242,570.00 1,177,193,400.00Average

Diluted earnings per share (yuan/share) 2.0416 1.3179

The calculation process for the adjusted weighted average number of common shares outstanding of the Company is as follows:

Item Amount for the current period Amount for the previous period

Weighted number of common shares outstanding at the end of the year 1,173,242,570.00 1,177,193,400.00 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Amount for the current period Amount for the previous period

Add: Assumes conversion of dilutive potential common shares into outstanding shares

The number of common shares increased by the issuance of common shares

Adjusted weighting of the Company’s outstanding common shares

1,173,242,570.00 1,177,193,400.00Average

(58) Notes on cash flow statement items

1. Cash related to operating activities

(1) Other cash received related to operating activities:

Item Amount for the current period Amount for the previous period

Financial subsidies 36,586,088.33 26,913,163.80 Current accounts 48,035,779.28 31,405,591.29 Deposit interest 7,841,730.15 22,173,932.33 Salesperson’s mortgage 34,869,865.29 26,938,411.44 Others 9,800,887.73 13,748,207.26 Total 137,134,350.78 121,179,306.12 Other instructions

Current accounts among other cash received related to operating activities mainly refer to temporary receipts from other businesses.

payment.

(2) Other cash paid related to operating activities:

Item Amount for the current period Amount for the previous period

Operating expenses 684,579,869.97 761,227,095.47 Advertising expenses 72,237,374.25 84,300,703.76 Technology development expenses 6,195,826.59 17,804,473.88 Others 11,391,419.69 7,089,816.12Total 774,404,490.50 870,422,089.23Other instructions

Operating expenses in other cash paid related to operating activities mainly refer to cash paid related to operating activities.

travel expenses, office expenses, insurance premiums, etc.

2. Cash related to investing activities

(1) Important cash received related to investing activities:

Item Amount for the current period Amount for the previous period

Recovery of investment in trading financial assets 2,250,434,717.64 6,767,014,421.36 Distribution and recovery of investment costs of other equity instruments 16,030,702.83 44,070,877.07 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Amount for the current period Amount for the previous period

total

2,266,465,420.47 6,811,085,298.43

(2) Important cash payments related to investment activities:

Item Amount for the current period Amount for the previous period

Use own funds to purchase trading financial assets and other investments

Cash paid for financing 2,299,000,163.98 6,785,815,156.54 Purchase of equity in an associate (GF Securities)

16,772,291.72 25,952,533.30 Payment for purchasing minority interests in subsidiaries

231,540.00

total

2,316,003,995.70 6,811,767,689.84

3. Cash related to financing activities

(1) Other cash paid related to financing activities:

Item Amount for the current period Amount for the previous period

Repurchase of company shares 120,000,804.68 300,004,613.74 24 Underwriting of Jilin Aodong MTN001 (Kechuang Notes)

Fee 2,120,000.00 2,200,000.00

Total 122,120,804.68 302,204,613.74Other instructions

The company held the 14th meeting of the company's 11th board of directors on November 8, 2024, and reviewed and approved the "Proposal on Repurchasing Part of Public Shares" and agreed to repurchase the company's shares through centralized bidding transactions. During the reporting period, the company repurchased 7,261,900 A shares of the company through centralized bidding transactions through a special stock repurchase securities account.

Changes in various liabilities arising from financing activities:

Increase in this period Decrease in this period

Item Beginning balance Closing balance

Cash changes Non-cash changes Cash changes Non-cash changes

short term borrowing

1,254,936,175.20 963,356,890.22 20,150.00 1,105,293,065.42 210,000,000.00 903,020,150.00 Non-current due within one year

Moving liabilities 22,477,538.59 46,017,490.96 13,700,046.99 21,433,159.71 33,361,822.85 Interest payable

24,068,493.15 38,769,712.66 62,838,205.81

Dividends payable

665,696.46 586,190,793.50 586,851,303.50 5,186.46 Bonds payable

995,218,998.39 2,021,721.81 997,240,720.20 Long-term borrowings

92,100,000.00 210,000,000.00 302,100,000.00Total

2,297,366,901.79 1,055,456,890.22 883,019,868.93 1,768,682,621.72 231,433,159.71 2,235,727,879.51

(59) Supplementary information for cash flow statement

1. Supplementary information for cash flow statement:

Item Amount for the current period Amount for the previous period

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Amount for the current period Amount for the previous period

1. Adjust net profit to cash flow from operating activities

Net profit 2,361,269,946.07 1,519,190,955.96 plus: credit impairment loss 975,491.60 -16,093,816.71

Asset impairment provision 242,160,109.43 107,761,480.53 Depreciation of fixed assets, depletion of oil and gas assets, productive organisms

Depreciation of assets 154,459,153.33 171,249,181.02 Depreciation of right-of-use assets 22,371,782.02 27,490,401.47 Amortization of intangible assets 37,898,226.18 35,769,075.65 Amortization of long-term prepaid expenses 3,533,525.79 3,837,119.40 Disposal of fixed assets, intangible assets and other long-term assets

Loss (income is listed with "-") -1,322,174.39 670,692.32 Loss from scrapping of fixed assets (income is listed with "-") 1,667,532.76 402,007.00 Loss from changes in fair value (income is listed with "-") -173,864,614.91 121,672,850.53 Financial expenses (income is listed with "-") 64,673,593.57 100,311,372.18 Investment losses (income is listed with "-") -2,587,410,418.81 -1,854,447,339.02 Decrease in deferred income tax assets (increase is listed with "-") 46,144,844.28 -16,386,366.56 Increase in deferred income tax liabilities (decreases are indicated by "-") -7,515,884.93 -9,862,028.91 Decrease in inventories (increases are indicated by "-") 67,488,851.08 -113,742,021.62 Decrease in operating receivables (increases are indicated by "-") 76,791,340.05 268,543,051.23 Increase in operating payables (decreases are indicated by "-") -24,783,896.91 -254,639,540.29 Others -12,278,585.04 -32,243,566.35 Net cash flow from operating activities 272,258,821.17 59,483,507.83

2. Major investments and financing activities that do not involve cash receipts and payments

Debt converted into capital 1,052,818,796.16 Convertible corporate bonds due within one year

Financing leased fixed assets

3. Net changes in cash and cash equivalents

Closing balance of cash 1,152,819,589.44 1,105,646,454.39 Less: Opening balance of cash 1,105,646,454.39 1,719,935,438.95 Plus: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents 47,173,135.05 -614,288,984.56 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Net cash paid to acquire subsidiaries in this period:

Item Amount of the current period Cash or cash equivalents paid in the current period for business mergers that occurred during the current period

1.00 of which: cash

1.00 Obtain net cash paid by subsidiaries

1.00

3. Composition of cash and cash equivalents:

Item Ending balance Beginning balance

1. Cash 1,152,819,589.44 1,105,646,454.39 Including: Cash on hand 75,931.17 198,555.01 Bank deposits that can be used for payment at any time 1,145,460,919.71 1,079,282,999.05 Other monetary funds that can be used for payment at any time 7,282,738.56 26,164,900.33 Amounts deposited with the central bank that can be used for payment

Deposit funds from other banks

Funds placed with other banks

2. Cash equivalents

Including: Bond investments due within three months

3. Balance of cash and cash equivalents at the end of the period 1,152,819,589.44 1,105,646,454.39

4. Monetary funds that are not cash and cash equivalents

Item Amount for the current period Reason for the previous period

Monetary funds 9,718,616.59 1,357,292.26 Restricted use

Total 9,718,616.59 1,357,292.26 --

(60) Notes on items in the statement of changes in shareholders’ equity

Explain the names of "other" items that were adjusted to the closing balance of the previous year and the amount of adjustment, etc.:

None.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(61) Assets with restricted ownership or use rights

Ending balance

Beginning balance items

Book balance Book value Restricted type Restricted situation Book balance Book value Restricted type Restricted situation Monetary funds

9,718,616.59 9,718,616.59 Restricted use Security deposit and litigation preservation 1,357,292.26 1,357,292.26 Restricted use Accounts receivable deposited as deposit

7,518,264.85 6,946,272.75 Pledge Total factoring of accounts receivable

17,236,881.44 16,664,889.34 1,357,292.26 1,357,292.26 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(62) Foreign currency monetary items

1. Foreign currency monetary items:

Item Foreign currency balance at the end of the period Conversion exchange rate Monetary funds converted into RMB at the end of the period --- --- 10,018,219.77 Including: US dollars 13.78 7.02880 96.86 Euros

HKD 11,091,564.52 0.90322 10,018,122.91 Accounts receivable

Of which: US dollars

Euro

Hong Kong dollar

short term borrowing

Of which: US dollars

Euro

Hong Kong dollar

2. Description of overseas operating entities:

The company's wholly-owned subsidiary Aodong International (Hong Kong) Industrial Co., Ltd. has its main overseas business location in Hong Kong. Since the currency in the main economic environment in which the company operates is Hong Kong dollars, the company's daily economic activities

Income and expenses are denominated and settled in Hong Kong dollars, so the company's recording currency is Hong Kong dollars.

(Sixty-three) Leasing

1. The company serves as the lessee

Item Amount for this period

Short-term lease expenses with simplified treatment included in the current profit and loss in the current period 5,917,803.14 Low-value asset lease expenses with simplified treatment included in the current profit and loss in the current period

Interest expense on lease liabilities 778,829.83 Variable lease payments included in the current profit and loss that are not included in the measurement of lease liabilities

Income from subletting right-of-use assets

Total cash outflows related to leasing 26,403,716.27 Related gains and losses arising from sale and leaseback transactions

2. The company serves as the lessor

Including: Available items not included in lease receipts Lease income

Income related to variable lease payments Land lease 307,024.86

House rental 6,876,757.40

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Including: Available items not included in lease receipts Lease income

Income related to variable lease payments Vehicle lease income 1,061.95

Total 7,184,844.21

(64) Government subsidies

1. Liability items involving government subsidies:

This issue

credited

Financial statement items: New subsidy in the current period Business transferred to other revenue in the current period Other deductions in the current period and assets/revenue

Beginning balance Closing balance

The current additional income is less and the profit-related deposit is

Um

Deferred income from assets 200,323,958.07 10,081,700.00 20,508,439.52 189,897,218.55 Related

Deferred income from income 23,544,813.80 1,445,671.70 1,873,926.09 30,000.00 23,086,559.41 Total related 223,868,771.87 11,527,371.70 22,382,365.61 30,000.00 212,983,777.96

2. Government subsidies included in current profits and losses:

Accounting accounts Amount for the current period Amount for the previous period

Other income

40,959,639.07 54,462,322.71Non-operating income

financial charges

12,414,715.00 8,226,698.00 Total

53,374,354.07 62,689,020.71

6. R&D expenditures

1. List according to nature of expenses

Item Amount for the current period Amount for the previous period

Employee compensation 21,459,834.55 24,331,002.15 Material expenses 27,948,444.28 20,032,860.46 Fuel and power expenses 5,410,587.89 3,869,362.66 Depreciation and amortization expenses 6,791,845.94 15,809,785.39Office expenses 1,097,359.62 3,415,572.75Travel expenses 592,887.27 880,716.74Entrusted external research and development expenses 43,004,164.09 27,216,160.12Others 4,132,754.71 4,353,593.52 Total 110,437,878.35 99,909,053.79 Including: expensed R&D expenditures 101,913,267.19 73,635,187.81

Capitalized R&D expenditure 8,524,611.16 26,273,865.98 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. R&D projects that meet capitalization conditions

Increase amount in this period Decrease amount in this period

Item Opening balance Closing balance Impairment provision Closing net amount

Internal development expenditures Others Transferred to current profits and losses Confirmed as intangible assets Research and development of other generic drugs 29,165,387.55 356,989.09 990,099.01 18,990,048.85 11,522,426.80 11,522,426.80 Research and development of classic traditional Chinese medicine formulas 28,320,736.94 23,870,101.39 4,450,635.55

Terbutaline sulfate aerosol solution imitation

6,875,694.06 206,429.43 7,082,123.49

Category 4 medicines (preparations + raw materials)

Children's Piweishu Oral Liquid (Children's

4,569,811.19 4,569,811.19

Qihao)

Research on polyvinyl alcohol eye drops 3,603,255.85 3,382,255.85 221,000.00 Nicardipine hydrochloride API 3,563,601.19 179,110.20 520,000.00 4,262,711.39 4,262,711.39 Classic Fang Kaixin Powder 3,497,181.80 3,497,181.80

The classic famous prescription Qianghuoshengshi Decoction 3,091,834.87 170,884.87 2,920,950.00 The classic famous prescription Qingjin Huatan Decoction, Qing

3,078,327.52 157,377.52 2,920,950.00 Zao Jiufei Decoction

The classic prescription Xiehuang Powder 2,660,000.00 2,660,000.00

L-carnitine injection (5ml:1g)

2,452,487.38 2,981.05 2,455,468.43 2,455,468.43 Generic drug research

Classic famous recipe Baoyuan Soup 2,450,000.00 2,450,000.00

Health food development 2,352,325.83 361,386.14 818,155.56 614,843.09 1,280,713.32 441,370.90 839,342.42Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Increase amount in this period Decrease amount in this period

Item Opening balance Closing balance Impairment provision Closing net amount

Internal development expenditures Others Transferred to current profits and losses Confirmed as intangible assets Others

Acetylcysteine Injection

(3ml:300mg) Generic drug items 2,229,978.75 184,441.21 872,868.17 3,287,288.13 3,287,288.13 items

Nicardipine Hydrochloride Injection 2,141,306.82 233,484.14 580,000.00 2,954,790.96 2,954,790.96 Amikacin Sulfate Injection

(1ml:100mg, 2ml:200mg) 1,399,540.19 248,789.11 1,648,329.30 1,648,329.30 Generic drug research

Create 10 species of northern medicinal materials

Quality bank, gene bank, specimen bank and 943,396.24 754,716.98 1,698,113.22 1,698,113.22 database

Cultivate a new excellent ginseng product

943,396.22 754,716.98 1,698,113.20 1,698,113.20 series

Cultivation of 1 Excellent Epimedium New

943,396.22 754,716.98 1,698,113.20 1,698,113.20 strain

Levornidazole Phosphate for Injection

735,849.06 134,900.06 870,749.12 870,749.12 Sodium generic drug (0.125g)

Gene identification system of Chinese medicinal materials 679,611.66

679,611.66

Terlipressin injection 614,495.10 614,495.10 614,495.10

Roxithromycin tablets 525,012.74 562,115.17 10,000.00 1,097,127.91 1,097,127.91 Healthy food to improve bone density 230,000.00 230,000.00

Supplementary health food for chemical liver injury

230,000.00 230,000.00

product

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Increase amount in this period Decrease amount in this period

Item Opening balance Closing balance Impairment provision Closing net amount

Internal development expenditures Others Transferred to current profits and losses Confirmed as intangible assets Others

Nanofloxacin malate sodium chloride injection

127,837.74 392,000.00 519,837.74 519,837.74Cumshot

Changes in the sterilization process of Zhenshi Burn Ointment

297,029.70 297,029.70 297,029.70 and research on improving quality standards

Total 107,296,627.18 2,237,077.20 6,287,533.96 37,835,356.77 35,402,830.96 6,677,743.09 35,905,307.52 1,055,866.00 34,849,441.52

(1) Important capitalized R&D projects

Project R&D progress Estimated completion time Estimated method of generating economic benefits Time point to start capitalization Specific basis for starting capitalization

Process verification is in progress and registration is being written. The project approval report has been completed and substantial generic drug development has begun. January 31, 2026. Production and sales of corresponding drugs. December 28, 2018.

Application materials The process research and development of medicinal preparations will be carried out successively during the preliminary research and development stage.

The project establishment report has been approved and has entered into substantial research and development of classic traditional Chinese medicine prescriptions, stability inspection, and registration application writing. December 31, 2026. Production and sales of corresponding drugs. April 27, 2018.

sexual development stage

Report information

(2) Provision for impairment of development expenditures

Item Beginning balance Increase in the current period Decrease in the current period Ending balance Impairment test Terlipressin injection 614,495.10 614,495.10 Project terminated, full provision for health food development 1,056,213.99 614,843.09 441,370.90 No progress in the project for a long time

Total 1,670,709.09 614,843.09 1,055,866.00

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

7. Changes in consolidation scope

(1) Business merger not under common control

1. Business mergers under the same control that occurred in the current period

In a business combination, from the date of purchase to the date of purchase, from the date of purchase to the date of purchase, from the date of purchase to the date of acquisition of the equity of the merged party on the date of purchase

Equity acquired Purchase date Last purchased party Last purchased party Last purchased party Remarks name Determination basis Method

Proportion (%) of Revenue to Net Profit of Cash Flow Anhui Aodong 2025 Change Completion

Pharmaceutical Co., Ltd. 100 October 31 Business registration date Purchase 4,916,586.65 1,982,654.75 6,151,170.01 Company date

2. Merger costs

Merger cost Anhui Aodong Pharmaceutical Co., Ltd. Cash 1.00 Book value of non-cash assets

Book value of debt issued or assumed

Par value of equity securities issued

contingent consideration

Others

Total merger cost 1.00 minus: fair value share of identifiable net assets acquired 63,860.54 goodwill (the difference between the merger cost and the share)

The amount by which the merger cost is less than the fair value share of identifiable net assets acquired (included in

-63,859.54 current profit and loss)

3. The fair value of the assets and liabilities of the merged party on the acquisition date

Anhui Aodong Pharmaceutical Co., Ltd. project

Purchase date

Monetary funds

Accounts receivable

Inventory

Fixed assets 59,255.17 Intangible assets

Other current assets 4,605.37 minus: borrowings

Accounts payable

Employee compensation payable

Deferred income tax liability

Net assets 63,860.54 minus: minority interests

Net assets acquired 63,860.54 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Other notes:

(1) The assets and liabilities of the purchased party have a simple structure and a low book value. The fixed assets were all purchased in 2024. The depreciation is normal. The book value is approximately equal to the replacement cost. There is no significant difference between the fair value and the book value.

(2) In this period, the company acquired 100% equity of Anhui Aodong Pharmaceutical Co., Ltd. at a price of RMB 1.00. The transaction was deemed a business combination not involving enterprises under common control. The difference between the merger cost and the fair value of the identifiable net assets obtained was RMB 63,859.54, which has been recognized as non-operating income for the current period. Since the date of purchase, the company has been included in the company's consolidated financial statements.

(2) Merger of enterprises under common control

None.

(3) Reverse purchase

None.

(4) Disposal of subsidiaries

None.

(5) Changes in consolidation scope due to other reasons

The company's 13th meeting of the 11th board of directors and the 12th meeting of the 11th board of supervisors held on October 30, 2024 reviewed and approved the "Proposal on Absorption and Merger between Subsidiaries", agreeing that the subsidiary Jilin Aodong Deer Industry Co., Ltd. will absorb and merge its wholly-owned subsidiary Jilin Aodong Hongshi Deer Industry Co., Ltd. The Company directly or indirectly holds 100.00% of the capital contribution of the subsidiaries involved in this merger, and their financial statements have been included in the scope of the Company's consolidated financial statements. The merger will not have a substantial impact on the Company's consolidated statements. Jilin Aodong Hongshi Deer Industry Co., Ltd. has completed the cancellation of company registration on May 15, 2025.

8. Interests in other entities

(1) Interests in subsidiaries

1. Structure of enterprise groups

Registered capital Main shareholding ratio (%)

Name of subsidiary company Registration place Nature of business How to obtain

Place of business direct indirect

Jilin Aodong Yanbian Pharmaceutical Co., Ltd. 888,000,000.00 Dunhua City Dunhua City Pharmaceutical 99.99 0.01 Initiated the establishment of Jilin Aodong Taonan Pharmaceutical Co., Ltd. 70,170,757.00 Taonan City Taonan City Pharmaceutical 98.70 Initiated the establishment of Jilin Aodong Pharmaceutical Group Yanji Co., Ltd. 161,526,808.00 Yanji City Yanji City Pharmaceutical 99.94 0.06 Initiated the establishment of Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd. 199,600,000.00 Dunhua City Dunhua City Pharmaceutical 98.05 1.03 Initiated the establishment of Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd. 179,082,483.00 Antu County Antu County Pharmaceutical 99.42 0.58 Initiated the establishment of Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Registered capital Main shareholding ratio (%)

Name of subsidiary company Registration place Nature of business How to obtain

Place of business direct indirect

Jilin Aodong Pharmaceutical Co., Ltd. 30,800,000.00 Yanji City Yanji City Commerce 84.42 15.48 Initiated the establishment of Jilin Aodong Deer Industry Co., Ltd. 50,000,000.00 Dunhua City Dunhua City Animal Husbandry 95.84 4.16 Initiated the establishment of Jilin Aodong Ruifeng Technology Co., Ltd. 258,700,000.00 Dunhua City Dunhua City Pharmaceutical excipients and packaging materials 100.00 Initiated the establishment of Yanbian Highway Construction Co., Ltd. 20,000,000.00 Yanji City Yanji City Highway construction and toll collection 100.00 Initiated the establishment of Jilin Aodong Enzyme Technology Co., Ltd. 100,000,000.00 Dunhua City Dunhua City Enzyme liquid product production and sales 51.00 Initiated the establishment of Jilin Aodong Health Technology Co., Ltd. 188,900,000.00 Dunhua City Dunhua City Ginseng and antler products 52.94 Initiated the establishment of Jilin Aodong Shihang Pharmaceutical Co., Ltd. 355,524,930.00 Dunhua City Dunhua City Processing of traditional Chinese medicine pieces 76.43 12.32 Initiated the establishment of Jilin Aodong Linyuan Pharmaceutical Marketing Co., Ltd. 28,600,000.00 Dunhua City Dunhua City Wholesale of medicines and health care products 54.55 1.39 Initiated the establishment of Jilin Aodong Pharmaceutical Technology Co., Ltd. 26,000,000.00 Dunhua City Dunhua City Wholesale of medicines and medical equipment 98.08 1.92 Initiated the establishment of Jilin Aodong Biotechnology Co., Ltd. 350,000,000.00 Dunhua City Dunhua City Manufacturing of special chemicals 51.43 5.71 Initiated the establishment of Jilin Aodong Industrial Park Public Asset Management Co., Ltd. 169,800,000.00 Dunhua City Dunhua City Heat and water production and supply 100.00 Initiated the establishment

2,200,000,000.00

Aodong International (Hong Kong) Industrial Co., Ltd. Hong Kong Hong Kong Investment 100.00 Establishment (Hong Kong dollars)

Medicines, health foods, food,

Jilin Zhengrong Pharmaceutical Development Co., Ltd. 48,594,263.00 Dunhua City Dunhua City Medical device distribution, Chinese herbal medicines 87.65 10.96 Acquisition

acquisition

Jilin Aodong Pharmacy Chain Co., Ltd. 270,000,000.00 Changchun City Changchun City Wholesale and retail industry 100.00 Initiated establishment

Drug research and development, sales, etc.

Jilin Aodong Innovative Pharmaceutical Technology Co., Ltd. 50,000,000.00 Dunhua City Dunhua City 62.08 Initiated and established

Information consulting; advertising design,

Beijing Yingweiqi Information Consulting Co., Ltd. 112,500.00 Beijing City Beijing City Production 99.90 Initiated and established

Chinese patent medicines, chemical pharmaceutical preparations,

Jilin Aodong Pharmacy Pharmaceutical Co., Ltd. 30,000,000.00 Changchun City Changchun City Antibiotic sales, etc. 100.00 Acquisition of Fushun Aodong Pharmacy Chain Co., Ltd. 70,000,000.00 Fushun City Fushun City Wholesale and retail industry 100.00 Initiated establishment

Drug retail, etc.

Aodong Pharmacy Chain (Yanbian Prefecture) Co., Ltd. 2,000,000.00 Dunhua City Dunhua City 100.00 Initiated and established

Primary processing of edible agricultural products, etc.

Dunhua Hongshixiang Renhe Crops Co., Ltd. 2,132,975.08 Dunhua City Dunhua City 100.00 Acquisition

Chinese herbal medicine planting

Jilin Aodong Medicinal Seed Industry Technology Co., Ltd. 85,000,000.00 Antu County Antu County 90.00 Initiated and established

Pharmaceutical manufacturing industry

Anguo Aodong Shihang Pharmaceutical Co., Ltd. 1,000,000.00 Baoding City Baoding City 88.75 Initiated and established

wholesale industry

Bozhou Aodong Shihang Pharmaceutical Co., Ltd. 1,000,000.00 Bozhou City Bozhou City 88.75 Initiated and established

wholesale industry

Dingxi Aodong Shihang Pharmaceutical Co., Ltd. 1,000,000.00 Dingxi City Dingxi City 88.75 Initiated and established

Pharmaceutical manufacturing industry

Aodong Pharmaceutical (Anhui) Co., Ltd. 20,000,000.00 Hefei City Hefei City 100.00 Initiated and established

retail industry

Hangzhou Aodong Interactive Media Co., Ltd. 100,000.00 Hangzhou City Hangzhou City 52.94 Initiated and established

Western medicine wholesale

Anhui Aodong Pharmaceutical Co., Ltd. 10,000,000.00 Hefei City Hefei City 100.00 Acquisition of Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Important non-wholly owned subsidiaries

Minority shareholders belong to the minority in this period. Announce to minority shareholders in this period. The name of the subsidiary with minority interests at the end of the period.

Shareholding ratio Shareholder's profit and loss Dividends distributed Balance Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd. 0.92% 90,484.80 2,256,332.08 Jilin Aodong Health Technology Co., Ltd. 47.06% 382,221.78 112,287,656.57 Total -- 472,706.58 114,543,988.65 Explanation on the difference between the shareholding ratio of minority shareholders of subsidiaries and the voting rights ratio:

None.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

3. Main financial information of important non-wholly owned subsidiaries

Subsidiary name Closing balance Opening balance

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Jilin Aodong

Group power source

215,995,681.43 97,396,337.88 313,392,019.31 64,036,120.93 3,266,531.52 67,302,652.45 307,541,350.62 103,552,186.53 411,093,537.15 170,879,646.08 3,495,269.70 174,374,915.78 Pharmaceutical shares

Ltd.

Jilin Aodong

health technology

180,326,092.71 80,828,436.18 261,154,528.89 20,425,053.49 2,115,047.46 22,540,100.95 183,508,691.43 84,978,269.32 268,486,960.75 27,987,543.97 2,606,002.92 30,593,546.89 Co., Ltd.

Amount of current period Amount of previous period

Subsidiary name

Operating income Net profit Total comprehensive income Cash flow from operating activities Operating income Net profit Total comprehensive income Cash flow from operating activities Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd. 175,199,919.19 9,370,745.49 9,370,745.49 46,350,628.79 125,282,978.78 2,202,002.00 2,202,002.00 -47,491,734.74 Jilin Aodong Health Technology Co., Ltd. 167,799,536.09 721,014.08 721,014.08 2,224,773.71 200,528,797.13 -36,291,452.12 -36,291,452.12 41,033,353.96 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

4. Major restrictions on the use of enterprise group assets and repayment of enterprise group debts:

None.

5. Financial support or other support provided to structured entities included in the scope of consolidated financial statements:

None.

(2) Transactions in which the ownership share of the subsidiary changes and the subsidiary is still controlled

1. Description of changes in owner’s equity share of subsidiaries

The company acquired 370,200.00 minority shares of Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd. in this period, and the company's shareholding ratio increased from 98.90% to 99.08%;

The increase in the Company's shareholding ratio in Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd. resulted in the Company's consolidated shareholding ratio in Jilin Aodong Linyuan Pharmaceutical Marketing Co., Ltd. increasing from 55.929% to 55.931%.

2. The impact of the transaction on minority shareholders’ equity and owner’s equity attributable to the parent company

Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd. Jilin Aodong Linyuan Pharmaceutical Marketing Co., Ltd. project

Company Purchase cost/disposal consideration

--cash

370,200.00

--Fair value of non-cash assets

Total purchase cost/disposal consideration

370,200.00

Less: Calculated based on the proportion of equity acquired/disposed of

446,037.98 511.47 Subsidiary’s share of net assets

difference

-75,837.98 -511.47 of which: Adjustment of capital reserve

75,837.98 511.47 Adjusted surplus reserve

Adjust undistributed profits

Other instructions

None.

(3) Interests in joint arrangements or associated enterprises

1. Important joint ventures or associates

Shareholding ratio (%) of joint ventures or joint ventures or major businesses

Place of registration Nature of business Name of joint venture invested by the operating enterprise Camp Direct Indirect

Accounting treatment method GF Securities Co., Ltd. Guangzhou Guangzhou Securities Brokerage 19.63 0.48 Equity method Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Main financial information of important associates

Ending balance/Amount of current period Beginning balance/Amount of previous period

Project

GF Securities Co., Ltd. GF Securities Co., Ltd. Current assets 915,340,884,962.34 708,649,003,779.96 Non-current assets 60,143,368,959.79 50,096,104,153.13 Total assets 975,484,253,922.13 758,745,107,933.09 Current liabilities 715,184,931,936.59 527,275,824,225.57 Non-current liabilities 97,841,470,530.13 78,383,902,399.22 Total liabilities 813,026,402,466.72 605,659,726,624.79 Minority shareholders’ equity 6,346,368,273.01 5,483,466,102.01 Equity attributable to shareholders of the parent company 156,111,483,182.40 147,601,915,206.29 Share of net assets calculated based on shareholding ratio 26,119,509,935.85 24,337,877,955.25 Adjustments

—Goodwill

— Unrealized profits from insider transactions

—Others

Book value of equity investments in associates

26,119,509,935.85 24,337,877,955.25 Equity investments in associates with publicly quoted prices

Fair value of 31,994,122,828.44 22,994,622,240.32

Operating income 35,492,783,045.20 26,422,056,649.42 Net profit 14,952,109,970.64 10,544,672,524.34 Net profit from discontinued operations

Other comprehensive income -463,656,658.82 2,495,717,838.25 Total comprehensive income 14,488,453,311.82 13,040,390,362.59 Dividends received from associates this year 764,955,883.50 610,700,026.80

3. Summary financial information of unimportant joint ventures and associates

Item Closing balance/Amount of the current period Opening balance/Amount of the previous period

Joint Venture:

Total book value of investments

The following items are based on shareholding ratio

Example calculation total

--Net profit

--Other comprehensive income

--Total comprehensive income

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Closing balance/Amount of the current period Opening balance/Amount of the previous period

Associates:

Total investment book value 79,916,379.75 14,581,143.28 The following items are based on shareholding ratio

Example calculation total

--Net profit -46,002,414.89 -53,872,770.20 --Other comprehensive income

--Total comprehensive income -46,002,414.89 -53,872,770.20

4. There are no major restrictions on the ability of joint ventures or associates to transfer funds to the company.

5. As of the end of the reporting period, joint ventures or associates incurred excess losses

Unrecognized losses in the current period

Joint ventures or associates Accumulated unrecognized names before the current period Accumulated unrecognized names at the end of the period Accumulated losses for the period Loss

(or net profit shared in this period)

Tonghua Iron and Steel Group Dunhua Tadong Mine

Industry Co., Ltd. -268,758,298.69 -38,895,280.15 -307,653,578.84

6. The Company has no unconfirmed commitments related to investment in joint ventures at the end of the period

7. The company does not have any contingent liabilities related to investments in joint ventures or associates at the end of the period

(4) Important joint operations

None.

(5) The company has no interests in structured entities that are not included in the scope of consolidated financial statements.

9. Risks related to financial instruments

The Company faces various financial risks in the course of its operations: credit risk, market risk and liquidity risk. The company's board of directors is fully responsible for the determination of risk management objectives and policies, and assumes ultimate responsibility for risk management objectives and policies. However, the board of directors has authorized the company's internal control and audit department to design and implement procedures that can ensure the effective implementation of risk management objectives and policies. The board of directors reviews the effectiveness of the implemented procedures and the reasonableness of risk management objectives and policies through the internal control self-assessment report submitted by the internal control audit manager. The Company's internal auditors also audit risk management policies and procedures and report relevant findings to the Audit Committee.

The overall goal of the company's risk management is to formulate risk management policies that reduce risks as much as possible without unduly affecting the company's competitiveness and resilience.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(1) Credit risk

Credit risk refers to the risk that one party to a financial instrument fails to perform its obligations, causing financial losses to the other party. The Company mainly faces customer credit risks caused by credit sales. Before entering into new contracts, the Company conducts an assessment of the credit risk of new customers, including external credit ratings and, in some cases, bank references when this information is available. The company sets a credit sales limit for each customer, which is the maximum amount that does not require additional approval.

The company ensures that the company's overall credit risk is within a controllable range through quarterly monitoring of existing customer credit ratings and monthly review of aging analysis of accounts receivable. When monitoring customer credit risk, group customers according to their credit characteristics. Customers rated as "high risk" will be placed on the restricted customer list, and only with additional approval, the company can sell to them on credit in the future period, otherwise they must be required to pay the corresponding amount in advance.

(2) Market risk

Market risk of financial instruments refers to the risk that the fair value or future cash flows of financial instruments fluctuate due to market price changes, including exchange rate risk, interest rate risk and other price risks.

1. Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market interest rates. The Company has no long-term borrowings and there is no interest rate risk related to long-term borrowings.

2. Exchange rate risk

Exchange rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in foreign exchange rates. The Company tries its best to match foreign currency income with foreign currency expenditures to reduce exchange rate risk. In addition, the company may also sign forward foreign exchange contracts or currency swap contracts to avoid exchange rate risks. In 2025 and 2024, the Company has not signed any forward foreign exchange contracts or currency swap contracts.

3. Other price risks

The Company holds equity investments in other listed companies, and management believes that the market price risks faced by these investment activities are acceptable.

The Company’s equity investments in listed companies are listed as follows:

Item Ending balance Beginning balance

Trading financial assets 1,726,333,547.20 1,469,567,675.18 Other equity instrument investments 2,014.43 3,860.17

Total 1,726,335,561.63 1,469,571,535.35 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(3) Liquidity risk

Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligations to settle by delivering cash or other financial assets. The Company's policy is to ensure that sufficient cash is available to meet its debt obligations as they fall due. Liquidity risk is centrally controlled by the Company's financial department. The Finance Department ensures that the company has sufficient funds to repay its debt under all reasonable forecasts by monitoring cash balances, marketable securities that are readily liquidable, and rolling forecasts of cash flows over the next 12 months.

The Company's various financial liabilities are listed as follows based on undiscounted contractual cash flows by maturity date:

Ending balance

Project

Within 1 year 1-2 years 2-3 years More than 3 years Total short-term borrowings 903,020,150.00 903,020,150.00 Notes payable 14,654,077.97 14,654,077.97 Accounts payable 225,149,246.62 28,295,870.37 32,738,930.31 9,579,366.69 295,763,413.99 Other payables 389,298,293.75 46,602,906.43 116,714,561.45 61,315,162.76 613,930,924.39 non-payments due within one year

33,361,822.85 33,361,822.85 Current liabilities

Total 1,565,483,591.19 74,898,776.80 149,453,491.76 70,894,529.45 1,860,730,389.20

Opening balance

Project

Within 1 year 1-2 years 2-3 years More than 3 years Total short-term borrowings 1,254,936,175.20 1,254,936,175.20 Notes payable 8,321,022.61 8,321,022.61 Accounts payable 338,156,331.00 66,572,823.00 2,153,543.30 10,511,158.98 417,393,856.28 Other payables 171,088,632.51 159,382,745.37 168,693,064.90 107,016,246.29 606,180,689.07 Non-payment due within one year

22,477,538.59 22,477,538.59 Current liabilities

Total 1,794,979,699.91 225,955,568.37 170,846,608.20 117,527,405.27 2,309,309,281.75

10. Disclosure of fair value

(1) Closing fair value of assets and liabilities measured at fair value

Closing fair value

Project First level fairness Second level fairness Third level fairness

total

value measurement value measurement value measurement

1. Continuous fair value measurement

1,800,368,175.49 1,800,368,175.49

(1) Trading financial assets

1. Financial assets measured at fair value and changes included in current profit and loss 1,800,368,175.49 1,800,368,175.49

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Closing fair value

Item Level 1 Fairness Level 2 Fairness Level 3 Fairness Total

Value measurement Value measurement Value measurement (1) Debt instrument investment

1,726,333,547.20 1,726,333,547.20 (2) Equity instrument investment (a)

(3) Derivative financial assets

74,034,628.29 74,034,628.29 (4) Others (b)

2. Designated to be measured at fair value and its changes

Financial assets included in current profits and losses

(1) Debt instrument investment

(2) Equity instrument investment

2,014.43 273,764,449.84 273,766,464.27

(2) Investment in other equity instruments (c)

1,800,370,189.92 273,764,449.84 2,074,134,639.76Total assets continuously measured at fair value

(3) Trading financial liabilities

Including: trading bonds issued

Derivative financial liabilities

Others

(4) Designated to be measured at fair value and changes

Financial liabilities included in current profits and losses

Total liabilities measured at fair value on an ongoing basis

2. Non-continuous fair value measurement

None

(2) Basis for determining the market price of continuous and non-continuous first-level fair value measurement items

a. The market price of trading equity instruments is determined based on the closing price of the stocks of Shanghai Stock Exchange, Shenzhen Stock Exchange and The Stock Exchange of Hong Kong Limited;

b. Other trading financial assets are fund investments purchased by the company, and their fair value and market price are determined based on the net value quotation of the relevant fund company;

c. The market price of investment in other equity instruments is determined based on the closing price of stocks on the Shanghai Stock Exchange, Shenzhen Stock Exchange, and The Stock Exchange of Hong Kong Limited, and the closing price of stocks on the Nasdaq Market in the United States multiplied by the central parity rate of RMB against the U.S. dollar on that day.

(3) Continuous and non-continuous second-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters

None.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(4) Continuous and non-continuous third-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters

For restricted stocks, unlisted equity investments, other investments, financial liabilities and derivative financial instruments, the Group inquires from counterparties or uses valuation techniques to determine their fair value. Valuation techniques include discounted cash flow method, market price discount method, market multiplier method, risk pricing model and option pricing model, etc. The measurement of its fair value uses important unobservable parameters, such as credit spread, default loss rate, volatility, liquidity discount, etc. Financial instruments measured at continuous Level 3 fair value have no significant sensitivity to reasonable changes in these unobservable inputs.

(5) Continuous third-level fair value measurement items, reconciliation information between the opening and closing book values and sensitivity analysis of unobservable parameters

None.

(6) Ongoing fair value measurement items, if there is a conversion between various levels during the current period, the reasons for the conversion and the policy for determining the time of conversion

None.

(7) Valuation technology changes that occurred during the current period and reasons for the changes

None.

(8) Fair value of financial assets and financial liabilities not measured at fair value

None.

11. Related parties and related transactions

(1) Information about the company’s parent company

The name of the parent company of the parent company, the place of registration, the nature of the business, the registered capital

Shareholding ratio (%) Voting rights ratio (%)

Dunhua Jincheng Industrial Co., Ltd. Dunhua City, Jilin Province Limited liability 52,374,400.00 27.35 27.35 (1) Description of the parent company of this enterprise

Name of the largest shareholder: Dunhua Jincheng Industrial Co., Ltd.

Legal representative: Xiu Gang

Date of establishment: May 18, 2000

Registered capital: 52.3744 million yuan

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Business scope: enterprise management consulting, enterprise management planning, and medical technology promotion services. (Projects that require approval according to law can only be carried out with the approval of relevant departments)

The ultimate controlling parties of this company are Mr. Li Xiulin, Dunhua Jinyuan Investment Co., Ltd. and 4 shareholders of Jincheng Company.

(2) Information about the company’s subsidiaries

For details of the company's subsidiaries, please refer to "Eight. Equity in Other Entities" in this note.

(3) The Company’s joint ventures and associated enterprises

For details of the company’s important joint ventures or associates, please refer to “Eights in Other Entities” in this note.

(4) Information about other related parties

Names of other related parties Relationship between other related parties and the company

The Jilin Aodong Innovation Industry Fund Management Center (Limited Partnership) invested by the company is a shareholder of Yanbian Baolixiang Bee Industry Co., Ltd., the company's vice chairman and general manager Ms. Guo Shuqin and the actual controller of Yanbian Baolixiang Bee Industry Co., Ltd., Yanbian Baolixiang Bee Industry Co., Ltd.

The chairman of the board, Mr. Guo Chunsheng, is a brother-sister relationship. The transactions that the company's holding subsidiaries purchase from Yanbian Baolixiang Bee Industry Co., Ltd. for honey and other raw materials due to production and operation needs are determined to be related parties and related transactions.

(5) Related transactions

1. Related transactions related to the purchase and sale of goods, provision and receipt of services

Procurement of goods/service acceptance form

Whether it exceeds

Approved transaction amount within related-party transactions

Related parties Current period’s amount Transactions Previous period’s amount Tolerance

Quota

Yanbian Baolixiang Bee Industry

Purchase of raw materials 15,835,711.60 30,000,000.00 No 14,552,016.60 Co., Ltd.

Henan Guoxin Chinese Medicinal Materials

Purchase of raw materials 442,201.84 5,000,000.00 No

limited liability company

List of goods sold/services provided

Related parties Related transaction content Amount for the current period Amount for the previous period Yanbian Baolixiang Bee Industry Co., Ltd. Goods 99,051.34 382,374.68 Yanbian Baolixiang Bee Industry Co., Ltd. Services 100,000.00 Henan Guoxin Chinese Medicinal Materials Co., Ltd. Goods 1,481,346.33

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Related entrusted management/contracting and entrusted management/outsourcing situation

None.

3. Related leasing situation

As a lessee, our company:

Lease assets Recognized in the current period Recognized in the previous period Lease paid in the current period Name of the lessor paid in the previous period

Category Rental fee Rental fee Gold Jinyanbian Baolixiang Bee Industry Co., Ltd.

House 110,091.74 110,091.74 110,091.74 110,091.74

Ltd.

4. Related guarantees

None.

5. Fund lending by related parties

None.

6. Asset transfer and debt restructuring of related parties

None.

7. Remuneration of key management personnel

Item Amount for the current period Amount for the previous period

Remuneration of key management personnel (after tax) 15,195,580.46 15,467,951.70

8. Other related transactions

None.

(6) Accounts receivable and payable from related parties

Closing balance Beginning balance item name Related parties

Book balance Provision for bad debts Book balance Provision for bad debts

Yanbian Baolixiang Bee Industry Co., Ltd.

Accounts receivable 23,912.00 1,195.60 47,380.47 3,097.70 Co., Ltd.

Henan Guoxin Chinese Medicinal Materials Co., Ltd.

Prepaid accounts 3,566,600.00 Responsible company

Yanbian Baolixiang Bee Industry Co., Ltd.

Accounts payable 831,299.22 446,193.86

Ltd.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(7) Related party commitments

None.

(8) Others

None.

12. Share-based payment

As of the date of issuance of this statement (April 16, 2026), the Company has not incurred any share-based payments that would affect the reading and understanding of the Company's financial statements.

13. Commitments and contingencies

(1) Important commitments

As of the balance sheet date (December 31, 2025), the company has no major commitments that affect the reading and understanding of the company's financial statements.

(2) Contingencies

As of the balance sheet date (December 31, 2025), the Company has no contingent liabilities arising from pending litigation or arbitration that would affect the reading and understanding of the Company's financial statements.

14. Events after the balance sheet date

(1) Important non-adjustment matters

None.

(2) Profit distribution

Number of dividends to be distributed for every 10 shares (yuan) 3.00 Dividend shares to be distributed for every 10 shares (shares)

Number of shares proposed to be allocated for conversion (shares) for every 10 shares

The company's profit distribution plan for 2025 is: the company plans to deduct 23,513 shares from the company's stock repurchase special securities account from the total share capital of 1,195,895,387 shares on March 31, 2026. , 1,172,381,587 shares after 800 shares are used as the base number, a cash dividend of 3.00 yuan (tax included) will be distributed to all shareholders for every 10 shares, and it is expected to distribute cash of 351,714,476.10 yuan. No bonus shares will be issued this year, and no capital reserve will be converted into share capital. The adjustment principle of this profit distribution plan: If the total share capital of the company changes between the disclosure date of the profit distribution plan and the equity registration date of the implementation of the profit distribution plan, the company will maintain the distribution ratio per share unchanged and adjust the total cash dividend distribution accordingly. The actual amount distributed shall prevail.

(3) Sales returns

None.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(4) Description of other post-balance sheet events

None.

15. Description of other important matters

(1) Correction of accounting errors in previous periods

There were no corrections of previous period accounting errors using the retrospective restatement method during the reporting period.

(2) Debt restructuring

During the reporting period, subsidiaries Jilin Aodong Taonan Pharmaceutical Co., Ltd. and Jilin Aodong Ruifeng Technology Co., Ltd. reached a debt restructuring with their suppliers to pay off debts with assets, and obtained a debt restructuring income of RMB 223,313.99. Jilin Aodong Medicinal Seed Industry Technology Co., Ltd., a third-tier subsidiary, and Henan Guoxin Chinese Medicinal Materials Co., Ltd. reached a debt restructuring by converting debt into equity. The book value of the original restructured debt was 68,820,252.65 yuan, and the recognized debt restructuring gain was 3,622,118.56 yuan. The equity obtained by Jilin Aodong Medicinal Seed Industry Technology Co., Ltd. through debt restructuring accounted for 39.00% of the total shares of the debtor. Subsidiary Jilin Aodong Deer Industry Co., Ltd. obtained debt restructuring proceeds of RMB 95,935.60 by reaching an agreement with creditors to reduce or reduce part of the payment.

(3) Asset replacement

No asset replacement business occurred during the reporting period.

(4) Annuity plan

There were no annuity plans during the reporting period.

(5) Termination of operations

There was no discontinuation of operations during the reporting period.

(6) Segment information

1. Basis for determination of reporting segments and accounting policies

The company determines operating segments based on its internal organizational structure, management requirements, and internal reporting systems, and determines reporting segments and discloses segment information based on operating segments. If an operating segment meets one of the following conditions, the enterprise will determine it as a reporting segment:

(1) The segment revenue of this operating segment accounts for 10% or more of the total revenue of all segments.

(2) The absolute amount of segment profits (losses) of the segment accounts for 10% or more of the greater of the absolute amount of the total profits of all profitable segments or the absolute amount of the total losses of all loss-making segments.

(3) The segment assets of this segment account for 10% or more of the total assets of all segments.

If two or more operating segments have similar economic characteristics and meet certain conditions, they can be combined into one operating segment.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Financial information of reporting segments

Wholesale and retail chain pharmacies

Item Group investment segment Pharmaceutical Food Other segments Inter-segment elimination Total

for sale

Operating income 1,651,676.86 1,798,138,497.98 383,292,826.63 199,702,750.28 140,822,688.00 -188,417,175.95 2,335,191,263.80 Including: inter-segment transaction income 37,307.32 79,157,673.62 1,785,917.23 16,334,812.67 91,101,465.11 -188,417,175.95 -Income from foreign transactions 1,614,369.54 1,718,980,824.36 381,506,909.40 183,367,937.61 49,721,222.89 - 2,335,191,263.80 Operating costs 772,642.10 847,052,112.78 283,521,995.84 146,178,544.19 121,796,109.15 -189,369,919.91 1,209,951,484.15 Interest expense 43,063,725.76 8,369,980.59 792,259.08 - 581,465.53 -548,552.39 52,258,878.57Interest income 2,355,959.67 2,640,921.11 49,182.98 2,457,165.25 887,053.53 -548,552.39 7,841,730.15Depreciation and amortization expenses 4,635,354.38 154,014,330.24 31,283,397.82 7,934,966.04 21,793,202.21 -128,150.08 219,533,100.61 Investment income of associates 2,559,968,215.55 -3,655,058.34 - 2,556,313,157.21Total profit 2,637,839,406.93 -102,754,551.68 -21,174,001.96 -31,391,498.22 -78,637,082.34 16,712,359.41 2,420,594,632.14 Income tax expense 36,699,670.74 20,727,615.99 -1,129,995.84 -12,526.86 1,012,704.07 2,027,217.97 59,324,686.07Net profit 2,601,139,736.19 -123,482,167.67 -20,044,006.12 -31,378,971.36 -79,649,786.41 14,685,141.44 2,361,269,946.07 Total assets 33,335,873,024.36 6,016,951,470.86 227,768,765.65 328,581,125.68 486,840,460.36 -5,978,105,160.45 34,417,909,686.46 of which: non-current assets (excluding deferred income

338,527,940.66 2,381,667,124.91 38,548,324.86 107,111,462.85 266,163,189.41 -6,476,346.83 3,125,541,695.86 tax assets, long-term equity investment)

Investment in associates 26,130,639,002.73 68,787,312.87 - 26,199,426,315.60 Segment liabilities 2,189,789,535.06 2,179,908,292.10 247,291,923.73 28,360,154.85 104,593,425.35 -1,220,378,848.85 3,529,564,482.24 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

3. Other instructions

None.

(7) Other important matters that have an impact on investors’ decision-making

As of the issuance date of this statement (April 16, 2026), the company's largest shareholder Dunhua Jincheng Industrial Co., Ltd. has pledged a total of 109.375 million shares of the company (accounting for 33.44% of the company's shares held by Dunhua Jincheng Industrial Co., Ltd.), accounting for 9.15% of the company's total share capital as of December 31, 2025.

(8) Others

Except for the above matters, as of the issuance date of this statement (April 16, 2026), the Company has not experienced any other important events that affect the reading and understanding of the Company's financial statements.

16. Notes on main items of the parent company’s financial statements

(1) Other receivables

Item Closing balance Opening balance Interest receivable

Dividends receivable

Other receivables 14,130,474.45 11,956,232.53

Total 14,130,474.45 11,956,232.53 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

1. Other receivables

(1) Other receivables are listed according to the bad debt accrual method:

Closing balance Opening balance Book balance Bad debt provision Book balance Type of bad debt provision

Provision Proportion Book Value Provision Proportion Book Value Amount Proportion (%) Amount Amount Proportion (%) Amount

(%) (%) Other receivables for which bad debt provisions are made individually

Among them:

Individual amounts are significant and bad debt provisions are made individually

of other receivables

The individual amount is not significant but the individual provision for bad debts is allowed

Other receivables prepared

Other receivables with provision for bad debts on a group basis 17,077,035.34 100.00 2,946,560.89 17.25 14,130,474.45 14,613,333.38 100.00 2,657,100.85 18.18 11,956,232.53 of which:

Other liabilities for provision of bad debt provisions based on aging combinations

17,077,035.34 100.00 2,946,560.89 17.25 14,130,474.45 14,613,333.38 100.00 2,657,100.85 18.18 11,956,232.53 Collection

Total 17,077,035.34 100.00 2,946,560.89 17.25 14,130,474.45 14,613,333.38 100.00 2,657,100.85 18.18 11,956,232.53 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(2) Classification of other receivables according to the nature of the payment:

Nature of payment Ending balance Beginning balance

Current accounts 17,077,035.34 14,613,333.38

Total 17,077,035.34 14,613,333.38

(3) Bad debt provision accrual:

The first stage The second stage The third stage

Lifetime expectations Lifetime expectations

Provision for bad debts Estimated total credit losses in the next 12 months (unissued Credit losses (issued

period credit losses

resulting in credit impairment) resulting in credit impairment)

Balance on January 1, 2025 2,657,100.85 2,657,100.85

The balance on January 1, 2025 in this period --- --- ---

Provision for the current period 289,460.04 289,460.04

Balance as of December 31, 2025 2,946,560.89 2,946,560.89

(4) Other receivables for which bad debt provisions are made based on aging combinations:

Ending balance

Aging

Other receivables Bad debt provision Proportion (%) Within 1 year 8,293,538.18 414,676.91 5.00

1 to 2 years 1,105,636.77 110,563.68 10.00

2 to 3 years 6,570,675.11 1,314,135.02 20.00

More than 3 years 1,107,185.28 1,107,185.28 --

Of which: 3-4 years 30.00

4-5 years 80.00

More than 5 years 1,107,185.28 1,107,185.28 100.00

Total 17,077,035.34 2,946,560.89 --

(5) Other receivables are listed based on aging:

Aging Book balance at the end of the period Book balance at the beginning of the period

Within 1 year 8,293,538.18 1,750,927.50

Among them: Items within one year

Subtotal within one year 8,293,538.18 1,750,927.50 1 to 2 years 1,105,636.77 9,031,112.17 2 to 3 years 6,570,675.11 2,575,108.43Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Aging Book balance at the end of the period Book balance at the beginning of the period More than 3 years 1,107,185.28 1,256,185.28 3 to 4 years 5,000.00 4 to 5 years 506,318.58 More than 5 years 1,107,185.28 744,866.70

Total 17,077,035.34 14,613,333.38 (6) Bad debt provisions accrued, recovered or reversed in the current period:

Amount of changes in the current period

Category Beginning Balance Ending Balance

Provision, recovery or transfer

Provision for bad debts based on aging combinations

2,657,100.85 289,460.04 2,946,560.89 Other receivables

Total 2,657,100.85 289,460.04 2,946,560.89 (7) There were no other receivables written off during the reporting period.

(8) Other receivables with the top five closing balances collected by debtors:

Provision for bad debts

% of other receivables

Unit name Nature of payment Ending balance Aging of accounts

Proportion of counts (%)

Ending balance

7,758,873.28 within 1 year

Jilin Aodong Biotechnology

Yuan, 1 to 2 years

Co., Ltd. Current accounts 15,206,734.52 89.05% 1,787,515.91 900,000.00 yuan, 2 to 3

6,547,861.24 yuan per year

Jilin Provincial Pharmaceutical Administration

Current funds 414,000.00 More than 5 years 2.42% 414,000.00 Beijing Yingweiqi Information Consulting

Consulting Co., Ltd. Current account 362,318.58 More than 5 years 2.12% 362,318.58

188,940.00 within 1 year

Zhao Renhe

Current account 361,732.92 yuan, 1 to 2 years 2.12% 26,726.29

172,792.92 yuan

Yanbian Prefecture Agricultural Reclamation and Specialty Products Bureau

Current accounts 317,216.70 More than 5 years 1.86% 317,216.70

Total -- 16,662,002.72 97.57% 2,907,777.48

(9) There are no receivables involving government subsidies at the end of the period.

(10) There are no other receivables derecognized due to transfer of financial assets at the end of the period.

(11) At the end of the period, there are no assets and liabilities formed by transferring other receivables and continuing to be involved.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(2) Long-term equity investment

Closing balance Beginning balance items

Book balance Impairment provision Book value Book balance Impairment provision Book value Investment in subsidiaries

4,798,416,767.55 926,706.39 4,797,490,061.16 4,657,963,435.15 926,706.39 4,657,036,728.76 Investment in associates and joint ventures

25,457,770,774.79 9,675,554.24 25,448,095,220.55 23,721,825,699.81 9,675,554.24 23,712,150,145.57Total

30,256,187,542.34 10,602,260.63 30,245,585,281.71 28,379,789,134.96 10,602,260.63 28,369,186,874.33

1. Investment in subsidiaries

Balance at the beginning of the period (book price, impairment provision at the beginning of the period, balance at the end of the period (book price), provision for impairment during the period, impairment provision at the end of the period, invested unit, increase during the period, decrease during the period

Value) Balance Value) Provision Balance Jilin Aodong Yanbian Pharmaceutical Co., Ltd. 1,316,516,700.00 134,393,064.00 1,450,909,764.00 Jilin Aodong Pharmaceutical Group Yanji Co., Ltd.

Company 597,368,288.76 597,368,288.76 Jilin Aodong Group Jinhaifa Pharmaceutical Co., Ltd.

Co., Ltd. 184,510,400.00 184,510,400.00 Jilin Aodong Pharmaceutical Co., Ltd. 26,280,000.00 26,280,000.00 Jilin Aodong Industrial Park Public Asset Management Co., Ltd.

Co., Ltd. 169,800,000.00 169,800,000.00 Jilin Aodong Ruifeng Technology Co., Ltd. 257,950,000.00 257,950,000.00 Jilin Aodong Deer Industry Co., Ltd. 10,000,000.00 36,060,268.40 46,060,268.40 Jilin Aodong Taonan Pharmaceutical Co., Ltd. 524,232,540.00 926,706.39 524,232,540.00 926,706.39 Jilin Aodong Group Liyuan Pharmaceutical Co., Ltd.

Company 195,708,800.00 195,708,800.00 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Balance at the beginning of the period (book price, impairment provision at the beginning of the period, balance at the end of the period (book price), provision for impairment during the period, impairment provision at the end of the period, invested unit, increase during the period, decrease during the period

Value) Balance Value) Provision Balance Jilin Aodong Health Technology Co., Ltd. 100,000,000.00 100,000,000.00 Yanbian Highway Construction Co., Ltd. 20,000,000.00 20,000,000.00 Jilin Aodong Enzyme Technology Co., Ltd. 51,000,000.00 51,000,000.00 Jilin Aodong Linyuan Pharmaceutical Marketing Co., Ltd.

Company 15,600,000.00 15,600,000.00 Jilin Aodong Shihang Pharmaceutical Co., Ltd. 233,900,000.00 233,900,000.00 Jilin Aodong Pharmaceutical Technology Co., Ltd. 25,500,000.00 25,500,000.00 Jilin Aodong Biotechnology Co., Ltd. 180,000,000.00 180,000,000.00 Aodong International (Hong Kong) Industrial Co., Ltd. 400,000,000.00 400,000,000.00 Jilin Zhengrong Pharmaceutical Development Co., Ltd. 20,000,000.00 20,000,000.00 Jilin Aodong Pharmacy Chain Co., Ltd. 268,670,000.00 268,670,000.00 Jilin Aodong Innovative Pharmaceutical Technology Co., Ltd. 30,000,000.00 30,000,000.00 Jilin Aodong Hongshilu Industry Co., Ltd. 30,000,000.00 30,000,000.00

Total 4,657,036,728.76 926,706.39 170,453,332.40 30,000,000.00 4,797,490,061.16 926,706.39Other instructions

(a) The increase in the long-term equity investment in Jilin Aodong Yanbian Pharmaceutical Co., Ltd. during the current period is due to the company’s additional investment in it during the current period;

(b) The increase in long-term equity investment in Jilin Aodong Deer Industry Co., Ltd. in this period is due to the merger of Jilin Aodong Deer Industry Co., Ltd. in this period and the additional investment in Jilin Aodong Hongshi Deer Industry Co., Ltd.;

(c) The long-term equity investment in Jilin Aodong Hongshi Deer Industry Co., Ltd. decreased in the current period because Jilin Aodong Hongshi Deer Industry Co., Ltd. was absorbed by Jilin Aodong Deer Industry Co., Ltd.

Due to merger.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

2. Investment in associates and joint ventures

Increases and decreases in the current period are calculated in the current period

Opening balance (book price Impairment provision period Decrease in investment unit recognized under equity method Other comprehensive income adjustment Declaration of cash dividends and other comprehensive income impairment) Opening balance Additional investment Other changes in equity) Ending balance

Investment profit or loss or profit he prepares

1． joint venture

None

2. Associates

GF Securities Co., Ltd.

23,697,569,002.29 29,050,876.76 2,501,645,337.28 -90,413,798.57 45,636,219.41 -746,521,483.50 25,436,966,153.67 Co., Ltd. (a)

Tonghua Iron and Steel Group Dunhua Tower

Dong Mining Co., Ltd. 9,675,554.24 9,675,554.24 Company

Jilin Boya Special Medical Camp

Yang Yang Technology Co., Ltd. 14,581,143.28 -3,452,076.40 11,129,066.88 (b)

Subtotal 23,712,150,145.57 9,675,554.24 29,050,876.76 2,498,193,260.88 -90,413,798.57 45,636,219.41 -746,521,483.50 25,448,095,220.55 9,675,554.24Total 23,712,150,145.57 9,675,554.24 29,050,876.76 2,498,193,260.88 -90,413,798.57 45,636,219.41 -746,521,483.50 25,448,095,220.55 9,675,554.24Other instructions

(a) The closing balance of the long-term equity investment in GF Securities Co., Ltd. increased compared with the opening balance, mainly due to the increase in the holding of GF Securities H shares by a total of 1.824 million shares during the period, and the fact that GF Securities Co., Ltd. was profitable, and the company adjusted it according to the equity method;

(b) The long-term equity investment in Jilin Boya Te Medical Nutrition Technology Co., Ltd. decreased in the current period, mainly due to the loss of Jilin Boya Te Medical Nutrition Technology Co., Ltd. in the current period. The company adjusted the equity according to the equity method.

To.

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(3) Operating income and operating costs

Amount for the current period Amount for the previous period

Project

revenue cost revenue cost

Other business 1,651,676.86 772,642.10 1,718,408.27 915,279.69Total 1,651,676.86 772,642.10 1,718,408.27 915,279.69Other instructions

Other business income for the current period is mainly the house rental income obtained by the company.

(4) Investment income

Item Amount for the current period Amount for the previous period

Long-term equity investment income calculated using the cost method

363,890,366.05 Long-term equity investment income calculated by equity method

2,498,193,260.88 1,702,856,976.36 Investment income from disposal of long-term equity investment

Investment income from trading financial assets during the holding period

10,148,794.81 14,964,396.21 Investment income obtained from disposal of trading financial assets

8,308,055.08 12,280,706.37 Investment income from other equity instrument investments during the holding period

3,451,634.88 79,120,359.85 total

2,520,101,745.65 2,173,112,804.84

(5) Supplementary information for cash flow statement

Item Amount for the current period Amount for the previous period

1. Adjust net profit to cash flow from operating activities

net profit

2,496,948,940.12 1,949,724,910.22 plus: credit impairment losses

289,460.04 -1,519,045.51 Asset impairment provision

Fixed asset depreciation, oil and gas asset depreciation, productive organisms

Asset depreciation

4,417,918.21 4,012,618.52 Amortization of intangible assets

217,436.17 220,740.36 Amortization of long-term deferred expenses

Disposal of fixed assets, intangible assets and other long-term assets

Loss (income is listed with "-")

Loss from scrapping of fixed assets (income is listed with "-")

3,373.35 Loss from change in fair value (income is listed with "-")

-117,205,229.81 161,389,951.77 Financial expenses (income is filled in with "-")

42,712,138.45 68,313,845.71 Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Amount of the current period Investment loss of the previous period (income is filled in with "-")

-2,520,101,745.65 -2,173,112,804.84 Decrease in deferred income tax assets (increases are indicated with "-")

28,562,465.70 -23,327,005.78 Increase in deferred income tax liabilities (decreases are indicated with "-")

Decrease in inventory (increases are listed with "-")

Decrease in operating receivables (increases are indicated with a “-” sign)

-2,992,095.70 29,093,437.46 Increase in operating payables (decreases are indicated with “-”)

-8,811,123.42 57,304,789.60 Others

-12,278,585.04 -32,243,566.35Net cash flow generated from operating activities

-88,240,420.93 39,861,244.51

2. Major investments and financing activities that do not involve cash receipts and payments

debt to capital

1,052,818,796.16 Convertible corporate bonds due within one year

Financing leased fixed assets

3. Net changes in cash and cash equivalents

Closing balance of cash

53,664,812.62 226,849,958.72 Less: Opening balance of cash

226,849,958.72 557,647,298.49 plus: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents

-173,185,146.10 -330,797,339.77

17. Supplementary information

(1) Detailed statement of non-recurring gains and losses for the current period:

Item Amount for the current period Description of gains and losses from disposal of non-current assets, including the write-off of asset impairment provisions

-345,358.37 is included in the current profit and loss government subsidies, but is closely related to the company’s normal business operations and is consistent with the company’s normal business operations.

It complies with national policies and regulations, is enjoyed according to determined standards, and has a lasting impact on the company’s profits and losses.

Except for government subsidies worth 40,959,639.07

Fund occupation fees charged to non-financial enterprises included in current profits and losses

The investment cost for an enterprise to acquire subsidiaries, associates and joint ventures is less than the investment cost

12,342,444.58 shall enjoy the income generated from the fair value of the investee’s identifiable net assets.

Gains and losses on non-monetary asset exchanges

Gains and losses from entrusting others to invest or manage assets

Provisions for impairment of various assets due to force majeure factors, such as natural disasters

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Item Amount for this period Explanation of debt restructuring gains and losses

3,941,368.15 One-time expenses incurred by the enterprise due to the discontinuation of relevant business activities, such as placement of employees

expenses, etc.

Gains from transactions where the transaction price appears to be unfair

Net profit and loss for the current period from the beginning of the period to the date of merger of subsidiaries resulting from business combinations under common control

Profit and loss arising from contingencies unrelated to the company's normal business operations

In addition to effective hedging business related to the company's normal business operations, non-financial enterprises

Gains and losses from changes in fair value and disposal fees arising from holding financial assets and financial liabilities

182,961,481.10 Gains and losses arising from financial assets and financial liabilities

Reversal of impairment provision for accounts receivable that has been individually tested for impairment

Profit and loss from external entrusted loans

Changes in the fair value of investment real estate using the fair value model for subsequent measurement

Profit and loss incurred

One-time impact on current profits and losses due to adjustments to tax, accounting and other laws and regulations

One-time confirmation of share-based payment expenses due to cancellation or modification of equity incentive plan

For cash-settled share-based payment, after the vesting date, the amount of employee compensation payable shall be

Gains and losses arising from changes in fair value

Custody fee income from entrusted operations

Other non-operating income and expenses other than the above

-1,644,881.06 Other profit and loss items that meet the definition of non-recurring profits and losses

Less: Impact on income tax 41,431,617.29 Impact on minority shareholders’ equity (after tax) 1,609,908.66

Total 195,173,167.52

(2) Return on net assets and earnings per share:

Weighted average net capital Earnings per share (yuan) Profit for the reporting period

Yield of profit (%) Basic earnings per share Diluted earnings per share Net profit attributable to the company’s ordinary shareholders 8.03 2.0416 2.0416 After deducting non-recurring gains and losses, net profit attributable to the company’s ordinary shareholders

Net profit of shareholders 7.38 1.8752 1.8752

(3) Explanation of abnormal situations and reasons for the company’s main accounting statement items

1. Balance sheet items:

Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

Serial number Item Ending balance Beginning balance Change amount Year-on-year increase or decrease

Other current assets

(1) 6,484,603.02 14,341,780.02 -7,857,177.00 -54.79%

productive biological assets

(2) 6,971,768.01 5,053,693.09 1,918,074.92 37.95%

right-of-use assets

(3) 16,973,100.65 48,377,883.69 -31,404,783.04 -64.92%

development expenditure

(4) 34,849,441.52 105,625,918.09 -70,776,476.57 -67.01%

Long-term deferred expenses

(5) 2,784,034.53 5,947,723.31 -3,163,688.78 -53.19%

Other non-current assets

(6) 28,397,056.67 66,215,215.70 -37,818,159.03 -57.11%

Notes payable

(7) 14,654,077.97 8,321,022.61 6,333,055.36 76.11%

Employee compensation payable

(8) 100,777,997.45 65,844,796.00 34,933,201.45 53.05%

interest payable

(9) 24,068,493.15 -24,068,493.15 -100.00%

Dividends payable

(10) 5,186.46 665,696.46 -660,510.00 -99.22%

Non-payments due within one year

(11) Current liabilities 33,361,822.85 22,477,538.59 10,884,284.26 48.42%

long term borrowing

(12) 302,100,000.00 302,100,000.00

Lease liability

(13) 3,181,679.38 16,510,187.97 -13,328,508.59 -80.73%

Deferred income tax liability

(14) 1,359,274.59 20,172,290.76 -18,813,016.17 -93.26%

treasury stock

(15) 420,005,418.42 300,004,613.74 120,000,804.68 40.00% (1) The closing balance of other current assets decreased by 54.79% compared with the beginning balance, mainly due to the decrease in input VAT to be deducted at the end of the period compared with the beginning of the year;

(2) The closing balance of productive biological assets increased by 37.95% compared with the beginning balance, mainly due to the increase in the number of adult sika deer cultivated by ourselves in the current period;

(3) The closing balance of right-of-use assets decreased by 64.92% compared with the beginning balance, mainly due to the decrease in the number of leased houses in the current period;

(4) The closing balance of development expenditures decreased by 67.01% compared with the beginning balance, mainly due to the recognition of part of the capitalized R&D expenditures of subsidiaries as intangible assets in the current period;

(5) The closing balance of long-term deferred expenses decreased by 53.19% compared with the balance at the beginning of the period, mainly due to the amortization of long-term deferred expenses of subsidiaries in the current period;

(6) The closing balance of other non-current assets decreased by 57.11% compared with the beginning balance, mainly due to the decrease in prepaid engineering equipment in this period compared with the previous year;

(7) The closing balance of notes payable increased by 76.11% compared with the beginning balance, mainly due to the increase in bank acceptance bills payable by subsidiaries in the current period;

(8) The closing balance of employee benefits payable increased by 53.05% compared with the balance at the beginning of the period, mainly due to the year-on-year increase in provision for employee benefits in the current period;

(9) The closing balance of interest payable decreased by 100.00% compared with the beginning balance, mainly due to the payment of medium-term note interest in the current period; Jilin Aodong Pharmaceutical Group Co., Ltd.

2025

Notes to Financial Statements

(10) The closing balance of dividends payable decreased by 99.22% compared with the opening balance, mainly due to the payment of common stock dividends in the current period; (11) The closing balance of non-current liabilities due within one year increased by 48.42% compared with the opening balance, mainly due to the accrual of medium-term note interest in the current period;

(12) The closing balance of long-term borrowings increased by RMB 302,100,000.00 compared with the opening balance, mainly due to the company's borrowing from the Dunhua Branch of Agricultural Bank of China Co., Ltd. during the current period;

(13) The closing balance of lease liabilities decreased by 80.73% compared with the beginning balance, mainly due to the decrease in the number of houses leased in the current period;

(14) The closing balance of deferred income tax liabilities decreased by 93.26% compared with the beginning balance, mainly due to the decrease in deferred income tax liabilities accrued for right-of-use assets in the current period;

(15) The closing balance of treasury shares increased by 40.00% compared with the beginning balance, mainly due to the repurchase of the company's shares in the current period.

2. Income statement items:

Serial number Item Amount for the current period Amount for the previous period Change amount Year-on-year increase or decrease (1) Financial expenses

45,041,199.59 72,353,328.61 -27,312,129.02 -37.75% (2) Investment income

2,587,410,418.81 1,854,447,339.02 732,963,079.79 39.52% (3) Gains from changes in fair value

173,864,614.91 -121,672,850.53 295,537,465.44 242.90% (4) Credit impairment loss

-975,491.60 16,093,816.71 -17,069,308.31 106.06% (5) Asset impairment loss

-242,160,109.43 -107,761,480.53 -134,398,628.90 124.72% (6) Asset disposal income

1,322,174.39 -670,692.32 1,992,866.71 297.14% (7) Non-operating income

14,331,356.59 37,542,186.32 -23,210,829.73 -61.83% (8) Non-operating expenses

5,301,325.83 14,981,362.01 -9,680,036.18 -64.61% (9) Income tax expense

59,324,686.07 2,229,894.75 57,094,791.32 2560.43% (10) Owned by the parent company

Net profit of shareholders 2,395,240,134.98 1,551,393,070.70 843,847,064.28 54.39% (11) Attributable to owners of the parent company

of other comprehensive income

-96,718,748.09 499,395,704.53 -596,114,452.62 -119.37%

net of tax

(1) Financial expenses decreased by 37.75% in the current period compared with the same period last year, mainly due to the year-on-year decrease in interest expenses in the current period; (2) Investment income increased by 39.52% in the current period compared with the same period last year, mainly due to the increase in investment income from GF Securities Co., Ltd. in the current period;

(3) Gains from changes in fair value increased by 242.90% for the current period compared with the same period last year, mainly due to a year-on-year increase in gains from changes in fair values of trading financial assets such as stocks and funds held by the company during this period;

(4) Credit impairment losses increased by 106.06% in this period compared with the same period last year, mainly due to the increase in expected credit impairment losses on accounts receivable in this period;

(5) Asset impairment losses increased by 124.72% this period compared with the same period last year, mainly due to inventory depreciation losses accrued by subsidiaries in this period.