Corporate culture is the soul of a company and its inexhaustible source of energy. To follow through the corporate culture of honesty and integrity and achieve unity in thinking and action, we have revised and released Staff Reward and Punishment System for Staff at Yili Group, underscoring that trespass into the “Yili Off-limits Area” cannot be condoned and runs counter to Yili’s corporate culture.

It is regrettable and lamentable that a few employees and partners who fell prey to temptation took advantage of their posts to act against the interests of the company, and even committed offenses, causing irreparable harm to themselves and their family.

In the first half of 2020, the internal audit department of Yili Group found ten cases of malpractice with 8 employees being dismissed and ten suspects being transferred to public security departments.

1. Former Yili employees Li Yongheng, Xu Bingbing, Xin Xiaoming, Li Shihua, Zhou Lanzhu, Zhu Lidong, and Li Zhujun, taking 1.4288 million yuan from suppliers as kickback by taking advantage of their post, were dismissed for violation of Staff Reward and Punishment System for Staff at Yili Group. In addition, the aforementioned seven were prosecuted for non-governmental staff bribery under the Criminal Law.

2. Former Yili employee supervisor Luo Huaying, taking possession of 490,000 yuan of our company's property by taking advantage of his post, was dismissed for violation of Staff Reward and Punishment System for Staff at Yili Group. In addition, Luo was prosecuted for crime of duty encroachment under the Criminal Law.

3. Our company’s cooperative distributors Chengdu Longxinwang Business and Trade Co. and Shehong Dingshan Hall Business and Trade Co. were guilty of contract fraud for swindling Yili Group out of 798.9 thousand yuan and 675.1 thousand yuan respectively. Yili Group terminated cooperation with the companies concerned. Wu Yanmei and Tan Weiqiang, who are in charge of the above companies, were prosecuted for criminal liability for committing contract fraud.

In the aforementioned cases, former Yili Group employees were prosecuted for criminal liability for taking advantage of their posts to misappropriate company properties and gain personal profits, and former external partners were blacklisted by Yili Group for them swindling Yili Group’s property to gain illegitimate interests.

Newly-added Entities to the Backlist in 2020:

Yunan Red Forest Construction Co.

Taixing City Hongda Machinery Parts Factory

Inner Mongolia Jindong Instrument Co.

Changsha Dashen Advertising Co.

Hunan Aozhuo Culture and Communication Co.

Yueyang Tulong Advertising and Design Co.

Zhangjiajie Fengshang Advertising and Communication Co.

Hunan Jimei Advertising and Communication Co.

Jishou Fumin Advertising Co.

Changsha Limei Advertising Co.

Shaoyang Xiangyu Culture and Communication Co

Yiyang Chaoyang Yunheng Advertising and Printing Center

Chengdu Longxinwang Business and Trade Co.

Shehong Dingshan Hall Business and Trade Co.

All employees and business partners are encouraged to report any potential or existing corruption, fraud, and malpractices involving Yili employees via the following means:

Email: yljw@ynlady.com；yilijubao@163.com；pangang@ynlady.com

Telephones: 0471-3357805

Mail Address: Inner Mongolia Autonomous Region, Hohhot, Jinshan Development Zone, Jinshan Street No. 1, Inner Mongolia Yili Industrial Group Corporation Discipline Inspection Committee Office

Yili Group Auditing Department