Yifan Pharmaceutical: Remuneration Management System for Directors and Senior Management (April 2026)

Yifan Pharmaceutical Co., Ltd.

Remuneration Management System for Directors and Senior Management

Chapter 1 General Provisions

Article 1 In order to further improve the salary management of directors and senior managers of Yifan Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), establish a scientific and effective incentive and restraint mechanism, effectively mobilize the work enthusiasm of the company's directors and senior managers, and improve the company's operating and management efficiency, this system is formulated in accordance with relevant laws and regulations such as the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Code of Governance for Listed Companies, the Articles of Association of Yifan Pharmaceutical Co., Ltd. (hereinafter referred to as the "Articles of Association") and other relevant provisions, and in combination with the actual situation of the company.

Article 2 This system applies to directors and senior managers of the company. Directors and senior managers referred to in this system include:

(1) Company directors (including independent directors and employee representative directors);

(2) Senior management personnel: president, executive president, senior vice president, vice president, financial director, secretary of the board of directors and other senior management personnel recommended by the president to the board of directors and registered with the Shenzhen Stock Exchange.

Article 3 The remuneration of the company's directors and senior managers is based on the company's operation and comprehensive management, and is determined after a comprehensive assessment based on the completion of the business plan, job responsibilities and work goals, personal performance and development.

Article 4 The company’s remuneration system follows the following principles:

(1) Adhere to the correct assessment orientation, with the implementation of the responsibility for asset preservation and appreciation as the core, with the improvement of value creation capabilities as the orientation, and through performance assessment, promote the realization of corporate strategic goals and the completion of annual work tasks.

(2) Insist on the unity of incentives and constraints, the consistency of remuneration with risks and responsibilities, and the linkage with job responsibilities and work objectives.

(3) Prioritize efficiency while taking into account fairness, and coordinate the salary growth of directors and senior managers with the growth of the company's economic benefits and the growth of employee wages.

(4) Adhere to the combination of short-term goals and long-term goals, the unification of result assessment and process evaluation, and the coordination of organizational performance and individual performance.

Chapter 2 Management Organization

Article 5 The remuneration plan for directors shall be determined by the shareholders' meeting and shall be disclosed; the remuneration plan for senior management personnel shall be approved by the board of directors, explained to the shareholders' meeting, and fully disclosed.

Article 6 The Remuneration and Appraisal Committee of the Board of Directors is responsible for formulating and conducting appraisal standards for directors and senior managers, and formulating and reviewing remuneration policies and plans for directors and senior managers. When the board of directors or the remuneration and appraisal committee evaluates an individual director or discusses his remuneration, the director shall recuse himself.

Article 7 The company’s Human Resources Administration Center, Financial Management Center, Board Secretariat and other relevant departments shall cooperate with the Board of Directors’ Remuneration and Assessment Committee in the specific implementation of the company’s remuneration plan for directors and senior managers.

Chapter 3 Salary Standards and Payment

Article 8 The remuneration of the company's non-independent directors (including employee representative directors) and senior management personnel consists of basic salary, performance salary, medium and long-term incentive income, allowances and others. In principle, the proportion of performance salary should not be less than 50% of the total basic salary and performance salary.

Non-independent directors who hold concurrent management positions in the company receive remuneration based on the positions they hold and will not receive additional director's allowances.

The remuneration of the company's non-independent directors (including employee representative directors) and senior managers should be consistent with market development, match the company's operating performance and personal performance, and coordinate with the company's sustainable development.

Article 9 The company's independent directors implement a fixed allowance system. The allowance standards are based on the relevant provisions of the "Administrative Measures for Independent Directors of Listed Companies" and are proposed by the board of directors and distributed on a monthly basis after review and approval by the shareholders' meeting. The reasonable expenses required by independent directors to perform their duties shall be borne by the company.

Article 10 The determination and payment of performance-based remuneration and medium- and long-term incentive income for the company's non-independent directors (including employee representative directors) and senior managers shall be based on performance evaluation. The company should determine a certain proportion of performance-based remuneration for directors and senior managers to be paid after annual report disclosure and performance evaluation. Performance evaluation should be based on audited financial data.

Article 11 The company shall withhold and pay personal income tax on the remuneration and allowances of the company's directors and senior management personnel in accordance with relevant national regulations.

Article 12 If the company's directors and senior managers leave office due to reasons such as change of term, re-election, resignation during the term, etc., their remuneration will be calculated and paid based on their actual term of office and actual performance.

Chapter 4 Salary Stop Payment Recourse and Adjustment

Article 13 If a company's directors and senior managers violate laws, regulations, normative documents or the company's rules and regulations during their term of office, thereby seriously damaging the company's interests or causing significant economic losses to the company, the company may, depending on their responsibilities and losses, propose a proposal to deduct or cancel their remuneration or allowances, and submit it to the board of directors or shareholders' meeting for review and decision.

Article 14 When a company retrospectively restates its financial report due to financial fraud or other misstatements, it shall promptly reassess the performance remuneration and medium- and long-term incentive income of directors and senior managers and recover the excess payment accordingly.

If a company's directors and senior managers violate their obligations and cause losses to the company, or are at fault for financial fraud, misappropriation of funds, illegal guarantees and other illegal activities, the company shall reduce or stop paying unpaid performance remuneration and medium- and long-term incentive income according to the severity of the case, and recover all or part of the performance remuneration and medium- and long-term incentive income that have been paid during the period when the relevant behavior occurred.

Article 15 The remuneration system for directors and senior managers should serve the company's development strategy and can be adjusted accordingly as the company's development and external operating conditions change.

Article 16 If a company turns from profit to loss or its losses expand compared with the previous fiscal year, and the average performance remuneration of directors and senior managers does not decrease accordingly, the reasons shall be disclosed.

Article 17 With the approval of the Remuneration and Appraisal Committee of the Board of Directors and the approval of the Board of Directors, special rewards or penalties may be temporarily established for special matters as a supplement to the remuneration of directors and senior managers serving in the company.

Chapter 5 Supplementary Provisions

Article 18 Matters not covered by this system shall be governed by relevant national laws and regulations and the Articles of Association. If this system conflicts with the laws and regulations promulgated by the state or the revised Articles of Association after it takes effect, the relevant laws and regulations of the state and the Articles of Association shall be followed.

Article 19 The company’s board of directors is responsible for interpreting this system.

Article 20 This system shall be implemented from the date of review and approval by the company's shareholders' meeting, and the same shall apply when it is revised.

Board of Directors of Yifan Pharmaceutical Co., Ltd.

April 24, 2026