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Remuneration Management System for Directors and Senior Management

Shanghai Stock Exchange
2025/12/11

Remuneration Management System for Directors and Senior Management of Hunan Warner Pharmaceutical Co., Ltd.

Hunan Warner Pharmaceutical Co., Ltd.

Article 1 Purpose:

In order to further standardize the remuneration management of the company's directors and senior managers, establish a scientific and effective incentive and restraint mechanism, effectively mobilize the enthusiasm of the company's senior managers, achieve the company's development strategic goals, and ensure the company's internal motivation for sustainable development, this system is specially formulated in accordance with the "Company Law of the People's Republic of China", the "Code of Governance of Listed Companies" and other relevant laws and regulations and the "Articles of Association", combined with the actual situation of the company.

Article 2 The applicable objects of this system are:

  1. Company directors, including chairman, vice chairman, directors, and independent directors;

  2. All senior managers working in the company, including the general manager, deputy general manager, secretary of the board of directors, financial controller and other senior managers stipulated in the Articles of Association.

Article 3 Remuneration Principles:

  1. Adhere to the principle of combining remuneration with the long-term interests of the company;

  2. Adhere to the principle of combining remuneration with the actual situation of the company such as its size and performance;

  3. Adhere to distribution according to work, and combine salary with job responsibilities and performance of duties;

  4. Adhere to the principle of equal emphasis on incentives and constraints.

Article 4 Salary Management Organization

  1. The Remuneration and Appraisal Committee of the Company's Board of Directors, under the authorization of the Company's Board of Directors, is responsible for the assessment and management of the remuneration plans of the Company's directors and senior managers; responsible for reviewing the performance of duties by the Company's directors and senior managers and conducting annual performance appraisals; and responsible for supervising the implementation of the Company's remuneration system.

  2. The company's human resources department and other relevant departments provide professional support to the remuneration and assessment committee, are responsible for providing relevant information on the company's operations and personnel being assessed, and providing feedback on the implementation of the assessment system to the remuneration and assessment committee.

Article 5 Salary composition and standards

  1. Directors’ remuneration

1.1 Independent directors receive remuneration from the company in the form of a fixed allowance, with the allowance standard being 100,000 yuan per year (before tax); all expenses incurred for performance of duties shall be borne by the company.

Remuneration Management System for Directors and Senior Management of Hunan Huana Pharmaceutical Co., Ltd. 1.2 Directors who serve in the company receive remuneration based on their operating and management positions in the company and no longer receive director allowances.

1.3 Other directors who do not serve in the company receive fixed director allowances based on the standards for independent directors, and all expenses incurred in performing their duties shall be borne by the company.

  1. Remuneration of senior management personnel

2.1 Basic annual salary: It is the basic salary that the company's senior managers deserve for performing their corresponding job responsibilities; it is determined by the company based on a comprehensive evaluation of the senior managers' corresponding job grades, functional responsibilities, and performance capabilities combined with industry salary levels, and is adjusted in a timely manner;

2.2 Business target reward: It is a reward given by the company's board of directors to the operating team for achieving the annual business target determined by the board of directors; the board of directors determines the annual reward based on the achievement of the annual business target;

2.3 Job performance rewards: The board of directors rewards senior managers who set quantitative target responsibilities for their positions for achieving their target responsibilities; the general manager's office meeting determines the annual rewards based on the completion of job responsibility targets;

2.4 Other benefits: Social insurance and housing provident funds for the company’s senior managers are implemented by the company in accordance with relevant national and local laws and regulations; other benefits stipulated by the company, etc.

  1. The above salary standards are pre-tax standards, and the company will withhold and pay personal income tax in accordance with the law.

Article 5 Salary Determination and Payment

  1. Subsidy: The allowance standard for directors and independent directors who are not concurrently serving as senior managers of the company shall be reviewed and determined by the shareholders' meeting and shall be paid on a monthly basis based on their employment status.

  2. Basic annual salary: Basic salary is paid monthly.

  3. Business target rewards: The company's remuneration and assessment committee will confirm the reward amount based on the achievement of the company's business targets after the end of the year, and confirm the distribution plan based on the completion of each position's work and the contribution of the work to the achievement of the business targets, and issue it after the end of the accounting year.

  4. Job performance rewards: The relevant departments of the company will calculate the reward amount based on the achievement of job responsibility objectives, and submit it to the company's remuneration and assessment committee for confirmation and then issue it.

  5. When directors change or resign, or senior managers newly join or resign, and their current term is less than one year, the annual remuneration for that year will be calculated and paid based on the actual number of months of service.

  6. If any of the following circumstances occurs to the company’s directors and senior managers during their term of office, the company may not pay performance remuneration or allowances:

6.1 Being publicly condemned or declared unsuitable by the stock exchange;

Hunan Warner Pharmaceutical Co., Ltd. Remuneration Management System for Directors and Senior Managers 6.2 Administrative penalties imposed by the China Securities Regulatory Commission due to major violations of laws and regulations;

6.3 Seriously harming the interests of the company;

6.4 Other circumstances in which the company's board of directors determines that the company's relevant regulations have been seriously violated.

Article 6 Matters not covered by this system shall be implemented in accordance with relevant national laws, regulations, normative documents and the Articles of Association.

Article 7 This system shall be interpreted and modified by the company's board of directors and shall come into effect upon review and approval by the company's shareholders' meeting.

Hunan Warner Pharmaceutical Co., Ltd.

December 10, 2025