On-going risk assessment report on Jizhong Energy Group Finance Co., Ltd.

North China Pharmaceutical Co., Ltd.

About Jizhong Energy Group Finance Co., Ltd.

Risk Continuous Assessment Report

According to the "Shanghai Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 5 - - Transactions and Related Transactions", North China Pharmaceutical Co., Ltd. (hereinafter referred to as "North China Pharmaceutical" or the "Company") evaluated its operating qualifications, business and risk status by checking the "Financial License", "Enterprise Legal Person Business License" and other documents of Jizhong Energy Group Finance Co., Ltd. (hereinafter referred to as the "Finance Company"), and reviewed the financial company's regular financial reports including balance sheet, income statement, cash flow statement, etc. The specific situation report is as follows:

1. Basic information of financial companies

Jizhong Energy Group Finance Co., Ltd., formerly known as North China Pharmaceutical Group Finance Co., Ltd., was established with the approval of the People's Bank of China (Yinfu [1993] No. 245) and obtained the "Enterprise Legal Person Business License" (Unified Social Credit Code 91130000104337206A) on August 18, 1998. In 2009, in accordance with the requirements of Hebei Guozi Zi [2009] No. 84, Jizhong Energy Group Co., Ltd. (hereinafter referred to as "Jizhong Energy Group") implemented a strategic reorganization of North China Pharmaceutical Group Co., Ltd. and acquired its shares in North China Pharmaceutical Group Finance Co., Ltd. to become a shareholder of North China Pharmaceutical Group Finance Co., Ltd. In 2009, with the approval of the Hebei Supervision Bureau of the China Banking Regulatory Commission (CBRC Hebei Bureau Fu [2009] No. 283), North China Pharmaceutical Group Finance Co., Ltd. was renamed Jizhong Energy Group Finance Co., Ltd. As of now, the registered capital of the finance company is 5.50 billion yuan. The legal representative is Gao Wenzan. The registered address is: 9th and 10th floors, Tower B, Jinyuan Building, No. 3 Zhonghua North Street, Xinhua District, Shijiazhuang City, Hebei Province.

On November 12, 2009, with the approval of the Hebei Supervision Bureau of the China Banking Regulatory Commission (CBRC Hebei Bureau Fu [2009] No. 346), the Finance Company added a new shareholder, Jizhong Energy Co., Ltd. (formerly Hebei Jinniu Energy Co., Ltd., hereinafter referred to as "Jizhong Shares"), and the registered capital increased from 300 million yuan to 1 billion yuan. After the capital increase, the shareholders and capital contribution ratios As follows: Jizhong Energy Group invested RMB 450 million, accounting for 45.00% of the registered capital; Jizhong Shares invested RMB 350 million, accounting for 35.00% of the registered capital; North China Pharmaceutical invested RMB 195 million, accounting for 19.50% of the registered capital; North China Pharmaceutical Kangxin Co., Ltd. invested RMB 0.05 million, accounting for 0.50% of the registered capital.

In November 2011, as approved by the Hebei Supervision Bureau of the China Banking Regulatory Commission (CBRC Hebei Bureau Fu [2011] No. 250), North China Pharmaceutical transferred 50 million yuan of equity in the finance company held by North China Pharmaceutical Kangxin Co., Ltd., and the shareholding ratio increased to 20%, while the shareholding ratios of the remaining shareholders remained unchanged.

In December 2016, as approved by the Hebei Supervision Bureau of the China Banking Regulatory Commission (Jiyinjianfu [2016] No. 335), the three shareholders of the Finance Company increased their capital by a total of 1.00 billion yuan in proportion to the original shareholding ratio. The registered capital after the change was RMB 2.00 billion, of which: Jizhong Energy Group invested RMB 900 million, accounting for 45.00%, Jizhong Co., Ltd. invested RMB 700 million, accounting for 35.00%, and North China Pharmaceutical invested RMB 400 million, accounting for 20.00%.

In June 2021, with the approval of the Hebei Supervision Bureau of the China Banking and Insurance Regulatory Commission, the three shareholder units of the Finance Company increased their capital by a total of 1.200 billion yuan in the same proportion as the original shareholding ratio, and the changed registered capital was RMB 3.200 billion. , among which: Jizhong Energy Group invested RMB 1.440 billion, accounting for 45.00%, Jizhong Shares invested RMB 1.120 billion, accounting for 35.00%, and North China Pharmaceutical invested RMB 640 million, accounting for 20.00%.

In November 2023, with the approval of the Hebei Supervision Bureau of the State Administration of Financial Supervision and Administration, the three shareholders of the Finance Company increased their capital by a total of 1.300 billion yuan in the same proportion as the original shareholding ratio. The changed registered capital was RMB 4.500 billion, of which: Jizhong Energy Group invested RMB 2.025 billion, accounting for 45.00%, and Jizhong Shares contributed RMB 1.575 billion, accounting for 45.00%. 35.00%, North China Pharmaceutical invested RMB 900 million, accounting for 20.00%.

In May 2025, as approved by the Hebei Supervision Bureau of the State Administration of Financial Supervision and Administration (Ji Jinfu [2025] No. 139), the three shareholder units of the finance company increased their registered capital by 1 billion yuan in proportion to their original shareholding proportions with their undistributed profits. After the capital increase is completed, The registered capital is 5.5 billion yuan, of which: Jizhong Energy Group invested RMB 2.475 billion, accounting for 45.00%, Jizhong Energy Group invested RMB 1.925 billion, accounting for 35.00%, and North China Pharmaceutical invested RMB 1.100 billion, accounting for 20.00%.

Financial company business scope: Licensed projects: Enterprise group financial company services. (Projects that require approval according to law can only be carried out with the approval of relevant departments. Specific business projects shall be subject to the approval documents or licenses of relevant departments)

2. Basic situation of the company’s compliance management and risk control

(1) Internal control environment

Finance companies implement a general manager responsibility system under the leadership of the board of directors. According to the "Articles of Association of Jizhong Energy Group Finance Co., Ltd." (hereinafter referred to as the "Articles of Finance Company"), the financial company has a shareholders' meeting and a board of directors. The "Finance Company Articles of Association" clearly stipulates the responsibilities of the board of directors, directors, and managers in internal control, and clarifies the corporate governance structure in which the shareholders' meeting, the board of directors, and managers each bear their own responsibilities, coordinate operations, and have effective checks and balances. In accordance with the needs of operation and management and the requirements of the "Management Measures for Enterprise Group Financial Companies", the finance company has established seven departments: financial business department, fund settlement department, financial statistics department, risk control department, financial information department, audit and audit department, and comprehensive work department. The organizational structure of the financial company is shown below:

(2) Daily operations

1. The finance company carries out daily business in strict accordance with the business scope approved by the Hebei Supervision Bureau of the State Administration of Financial Supervision. Currently, it provides settlement business for member units to assist member units in realizing payment and other types of deposit business, credit business, intermediary business and other business types, and there are no business activities that exceed the scope or violate regulations.

2. In accordance with the requirements of the "Implementation Measures for Administrative Licensing Matters of Non-Bank Financial Institutions" and the "Measures for the Administration of Qualifications of Senior Managers of Financial Institutions", the financial company shall strictly perform the necessary approval procedures during the process of business start-up, changes of directors and senior managers, and there shall be no unauthorized changes without approval.

3. The financial company shall, in accordance with the principle of prudent operation, formulate various business rules and procedures, and establish and improve its internal control system.

4. The board of directors of the financial company shall entrust a qualified intermediary agency to audit the financial status and operating results of the previous year every year, and submit an annual audit report to the Hebei Supervision Bureau of the State Administration of Financial Supervision in accordance with regulations.

5. The finance company has established financial and accounting systems in accordance with relevant national regulations. Follow prudent accounting principles to truly record and fully reflect business activities and financial status. The finance company submits accounting statements and 1104 off-site supervision statistical statements and other required statements to the Hebei Supervision Bureau of the State Financial Supervision and Administration Bureau on schedule.

6. The finance company shall deposit deposit reserves in accordance with the regulations of the People's Bank of China, classify assets in accordance with the "Asset Risk Classification Management Measures" of the finance company, and withdraw asset loss reserves and general risk reserves in accordance with the relevant regulations of the Ministry of Finance and the China Banking and Insurance Regulatory Commission. At present, the financial company's various asset loss reserves are sufficient.

(3) Risk control of main business

1. Deposit and settlement business management

In accordance with various rules and regulations stipulated by relevant national departments and the People's Bank of China, the finance company has formulated business management measures and business implementation rules such as the "Member Units Deposit Account Management Measures", "Member Units RMB Deposit Business Management Measures", "Online Banking Business Management Measures", "Settlement Business Management Measures", "Large Transaction and Suspicious Transaction Report Management Measures", "Customer Due Diligence and Customer Identity Data and Transaction Records Preservation Management Measures" and other business management methods and business implementation rules, which effectively prevents internal operational risks and irregularities, prevents illegal activities such as money laundering and financial fraud, and ensures the safety of the finance company and customer funds.

(1) In terms of account management, the financial company strictly implements the relevant regulations on account management and conscientiously implements the regulations on the management of depositor account opening and closing. Strictly manage reserved signatures and deposit payment vouchers, and establish a regular reconciliation system between the financial company and its customers, as well as the internal business ledgers and accounting accounts of the financial company.

(2) In terms of deposit business, the financial company strictly follows the principles of equality, voluntariness, fairness and good faith to ensure the safety of the funds of member units and safeguard the legitimate rights and interests of all parties.

(3) In terms of fund settlement, the "Jizhong Energy Group Finance Co., Ltd. Electronic Banking Corporate Customer Service Agreement" was signed with member units. Member units open settlement accounts in the financial company, and use the bank's collection and payment functions to realize online settlement of member unit funds, strictly ensuring the safety and speed of settlement, and at the same time having high data security.

(4) In terms of interbank fund management, financial companies strictly implement the "Fund Management Measures" to transfer funds.

(5) In terms of seal (online banking U-shield) management, the financial company strictly follows relevant regulations such as the Seal and Important Certificates Management Measures. Passwords, keys and other authentication methods used in the online banking system are treated as the company's reserved seal management to ensure safe use and safekeeping. The finance company implements strict accounting management of important blank vouchers, strictly implements the procedures for warehousing, registration, and collection, and performs regular inventory checks.

2. Credit business control

The finance company's credit business is limited to members of Jizhong Energy Group. The finance company's credit business implements unified credit management, has established a customer credit risk identification and monitoring system, and established a relatively complete credit decision-making and approval mechanism. We have formulated various management measures for financing and credit business, including the "Loan Review Committee Working Rules", "Working Capital Loan Management Measures", "Syndicated Loan Management Measures", "Working Capital Revolving Loan Management Measures", "Asset Risk Classification Management Measures", "Entrusted Loan Management Measures", "Electronic Commercial Bill Discounting Business Management Measures", "Electronic Commercial Acceptance Bill Discounting Business Management Measures", etc. Corresponding operating procedures have been formulated for existing businesses, and business systems are regularly revised and improved to meet the requirements of business development. At present, the credit business of finance companies mainly includes working capital loans, bill discounting, electronic bill acceptance business, etc.

(1) The financial company shall set up an independent credit risk management department to conduct unified credit management, with reasonable division of labor and clear responsibilities for credit positions, so as to separate loan review, business management and accounting processing.

(2) The finance company has established a loan review committee to review credit business.

(3) The financial company has established credit operating regulations to clarify the work standards and due diligence requirements for each link including pre-loan investigation, loan review, and post-loan inspection.

(4) The finance company has established asset risk classification management methods to standardize the standards and procedures for determining loan quality. It is strictly prohibited to cover up the true status of non-performing loans to ensure the authenticity of loan quality.

(5) The finance company has established a credit risk responsibility mechanism to clarify the risk responsibilities of department positions.

3. Internal control of accounting

The finance company formulates and implements the company's accounting management system in accordance with the accounting standards for enterprises and the unified national accounting system. The accounting positions of the financial company implement the principle of separation of responsibilities and mutual restraint. It is strictly prohibited for one person to hold incompatible positions or complete the entire accounting process alone. The financial company clearly stipulates the responsibilities and authority of the accounting department and accounting personnel. Accounting departments and accounting personnel act within their respective authority. Any violation of authority must be authorized and approved before handling. The finance company supervises the entire accounting process to ensure that the accounting records, receipts, accounts, accounting facts, and accounting statements are consistent. The finance company has established accounting and financial accounting reporting systems to promptly, truthfully and completely disclose accounting and financial information in accordance with regulations to meet the information needs of shareholders and regulatory authorities.

4. Investment business control

The finance company carries out investment business in strict accordance with the "Administrative Measures for Enterprise Group Finance Companies" and has established and improved the investment business management system. As of June 30, 2026, the closing balance of the finance company's fund investment was 921.8032 million yuan.

5. Internal audit control

The finance company implements an internal audit system and establishes an audit department. The "Audit Management Measures" and "Anti-Money Laundering Internal Audit Management Measures" and other systems have been established to conduct internal audit supervision and business audit inspections throughout the economic management activities. Supervise and inspect the implementation of internal controls and the legality, compliance, risk, accuracy, and effectiveness of business and financial activities, identify weaknesses in internal controls and related risks, and provide valuable improvement opinions and suggestions to the management. From January to June 2026, the Finance Company continued to expand the scope of internal audit, and conducted full-process audit supervision in key areas such as credit management, financial statistics, credit bill business, information business continuity management, fund revenue and expenditure management, and asset risk classification, and strictly supervised the rectification of problems to ensure the effective use of audit results.

6. Information system control

The Finance Company has supplemented and improved the information technology system, formulated the "Information System Operation and Maintenance Management Work Rules", "Emergency Plan and Emergency Drill Management Measures", "Information Technology Security Management Measures" and other systems, and revised the "Computer Room Management System" and "Business Authorization Management Measures". The information technology governance structure has been continuously improved. An information technology management committee has been established under the managerial level, and the financial information department has been clarified as the information technology work office, with full-time personnel responsible for daily work. By continuously enhancing the functions of the core business system, the business processing capabilities and risk prevention and control functions have been further enhanced, and the process and electronic prevention of risk control have been realized.

In order to ensure the safe and efficient development of capital business, the financial company has made great efforts to conduct information system governance by preventing major risks and ensuring business continuity. Strengthen the construction of the disaster recovery data center and create a data disaster recovery system that can operate completely and independently. Business continuity is effectively guaranteed and meets regulatory requirements; we strengthen emergency response drills, conscientiously implement the computer room system inspection system, and improve IT Contingency plan, disaster recovery system switching, data recovery drills and annual computer room emergency drills are carried out to ensure that the production business system and disaster recovery system can still operate continuously and safely in the event of extreme circumstances; and the core business system security reinforcement project has been completed, which not only ensures the safe and stable operation of the core business system, but also enhances risk prevention and control capabilities. 7. Comprehensive risk management

The board of directors has established a risk compliance committee, an audit committee, and a remuneration and appraisal committee; the management has established a risk control department and an audit and audit department, enriched full-time risk control staff, and strengthened the organizational guarantee of the comprehensive risk management system. At the same time, the responsibilities of the "three lines of defense" for risk prevention and control have been further clarified through the combing of the Articles of Association of the Financial Company, rules of procedure, and department responsibilities. The board of directors assumes the implementation responsibility for comprehensive risk management for the ultimate risk management person and senior management, and the business lines bear direct responsibility for risk management; the risk control department is responsible for organizing the formulation and implementation of risk management systems covering various businesses; establishing a major risk indicator system to guide relevant departments to conduct risk monitoring and provide risk reminders. The internal audit department is responsible for auditing the performance of business departments and risk management departments. Based on the "Comprehensive Risk Management Measures", a risk management system with industry characteristics that subdivides risk types has been formulated, and institutional arrangements have been made for the key risks faced by financial companies. From January to June 2026, the finance company will increase its efforts in information technology risk management and control, organize comprehensive business impact analysis, formulate business continuity work plans, and improve the company's emergency support and information technology risk management and control capabilities.

(4) Overall evaluation of internal control

The financial company's internal control system is complete and its execution is effective. In terms of capital management, the company has better controlled the risk of capital flow; in terms of credit business, the company has established corresponding credit business risk control procedures to control the overall risk at a reasonable level.

3. Operation and management of financial companies

(1) Business conditions

As of June 30, 2026, the finance company's total assets were 19.943 billion yuan, and total liabilities were 13.560 billion yuan; from January to June 2026, the cumulative total profit realized was 201 million yuan, and the net profit was 152 million yuan.

(2) Management situation

Since its establishment, the Finance Company has always adhered to the principle of sound operations, regulated business activities and strengthened internal management in strict accordance with the "Company Law of the People's Republic of China", "Banking Supervision Law of the People's Republic of China", "Corporate Accounting Standards", "Administrative Measures for Financial Companies of Enterprise Groups" and relevant national financial laws and regulations and the "Articles of Association of Finance Companies".

(3) Supervision indicators

According to the "Administrative Measures for Financial Companies of Enterprise Groups", on June 30, 2026, the various regulatory indicators of financial companies are as follows:

1. The capital adequacy ratio shall not be lower than the minimum regulatory requirements of the China Banking and Insurance Regulatory Commission: capital adequacy ratio = net capital/total risk-weighted assets = 34.96% 2. The liquidity ratio shall not be lower than 25%:

Liquidity ratio = current assets/current liabilities = 65.43%

3. The loan balance shall not be higher than 80% of the sum of deposit balance and paid-in capital. The proportion of loan balance = loan balance/(deposit balance + paid-in capital) = 78.69%

4. The total liabilities outside the group shall not exceed the net capital:

Total liabilities outside the group/net capital=8.60%

5. The balance of bill acceptance shall not exceed 15% of the total assets:

Bill acceptance balance/total assets=11.73%

6. The balance of bill acceptance shall not be higher than 3 times the balance of deposits with banks: balance of bills acceptance/balance of deposits with banks = 0.52

7. The total amount of bill acceptance and rediscount shall not be higher than the net capital: total amount of bill acceptance and rediscount/net capital = 38.45%

8. The balance of the acceptance bill margin shall not exceed 10% of the total deposit: balance of acceptance bill margin/total deposits = 0.13%

9. The total investment shall not exceed 70% of the net capital:

Total investment/net capital=13.95%

10. Net fixed assets shall not exceed 20% of net capital:

Net fixed assets/net capital=0.03%

The above indicators all comply with the regulatory indicator requirements of Article 34 of the "Measures for the Administration of Financial Companies of Enterprise Groups".

The finance company adheres to the business philosophy of relying on the group and serving the group, and continuously promotes business transformation, technological progress, and deepening of reform. The first is to speed up the construction of the treasury system. In accordance with the "Opinions of the State-owned Assets Supervision and Administration Commission of the State Council on Promoting Central Enterprises to Accelerate the Construction of Treasury Systems and Further Strengthen Fund Management", we will accelerate the construction of a fund pool and bill pool, and strive to create a unified centralized fund bill management platform for group companies; benchmark professional banks, establish a fund inquiry mechanism, increase market business efficiency, and improve fund use efficiency; second, we will continue to strengthen asset and liability management. Deepen the integration of industry and finance, adjust the scale, structure and term of credit assets in an orderly manner, increase credit support for third-level units and green agriculture-related small, medium and micro key areas, and at the same time strengthen the matching management of external financing and deposit product structure, quota and term; third, accelerate the advancement of digital construction. Promote the iteration of core business system functions, increase investment in technology project construction, deepen the application of new productivity, and deepen the promotion of RPA technology in settlement, business, finance and other scenarios to help improve management efficiency.

(4) As of June 30, 2026, shareholders’ deposits and loans in the finance company:

Unit: 10,000 yuan

Shareholder name Stock code Capital contribution Deposits Loans and advances Jizhong Energy Group Co., Ltd. 247,500.00 142,543,65 1,237,280.00Jizhong Energy Co., Ltd. 000937 192,500.00 549,937,16 5,000.00North China Pharmaceutical Co., Ltd. 600812 110,000.00 19,900.00 20,000.00 (Note) Note: The finance company discounted commercial bills for 200 million yuan for North China Pharmaceutical Co., Ltd.

The finance company issued loans to Jizhong Energy Group Co., Ltd. that were greater than its capital contribution. The finance company has reported the above matters to the Hebei Supervision Bureau of the State Administration of Financial Supervision in accordance with the provisions of Article 35 of the "Administrative Measures for Financial Companies of Enterprise Groups".

4. Deposits and loans of the company and its subsidiaries in finance companies

As of June 30, 2026, the company and its subsidiaries' deposits and loans in the finance company:

Unit: RMB 10,000 related transactions Related transactions 2026 As of 2026/6/30 Share of related parties in similar business

Category Content Estimated amount Balance Proportion (%) Finance company Deposit business 100,000.00 19,900.00 16.87 Financial industry Finance company Loan business 40,000.00 0.00 0.00 Finance company Bill business 60,000.00 20,000.00 1.82 Subtotal 200,000.00 39,900.00

Note: The balances in the above table as of June 30, 2026 are consolidated data.

The company's deposits with the financial company have good security and liquidity, and there has been no delay in payment due to insufficient cash position by the financial company. The company's deposit and loan ratio in the finance company is reasonable and compliant. As of now, the company has no major operating expenditure plans, and the above-mentioned deposits and loans from the finance company have not affected the company's normal production and operations.

5. Risk assessment opinions

Based on the above analysis and judgment, the company believes that:

(1) The financial company has a legal and valid "Financial License" and "Enterprise Legal Person Business License";

(2) The finance company is not found to have violated the provisions of the "Administrative Measures for Financial Companies of Enterprise Groups" promulgated by the China Banking and Insurance Regulatory Commission;

(3) The finance company strictly complies with the relevant provisions of the "Guidelines for the Provision of Bank Loan Loss Provisions" and maintains a relatively high provision rate. As of June 30, 2026, all member units of Jizhong Energy Group Co., Ltd. were able to repay principal and interest on time. There was no overdue loan principal or failure to pay acceptance bills in a timely manner, and the overall risk was controllable. During the reporting period, the Finance Company had no major events such as deposit runs, failure to pay due debts, serious computer system failures, robberies and frauds, serious disciplinary violations or criminal cases involving directors or senior managers. Based on the understanding and evaluation of risk management, as of June 30, 2026, no major flaws were found in the risk control systems such as capital, credit, auditing, and information management related to financial statements.

Board of Directors of North China Pharmaceutical Co., Ltd.

August 21, 2026