Operation Compliance
Compliance and risk management are crucial safeguards for steady development and risk prevention. Yili ensures its business in accordance with regulatory requirements such as the Company Law, Securities Law, Code of Corporate Governance for Listed Companies, and other applicable laws and regulations.
In accordance with the internal controls standards, Yili continuously improves its internal control system in alignment with the development strategy, management objectives, and practical business needs. This enhances our governance capability, standardizes our management implementation, and strengthens our supervision and control to build a healthy operation environment.
Internal Control and Risk Management
The risk management principles of Yili are 'strengthening internal controls, preventing potential risks, and enhancing compliance,' which are specifically implemented through the following approaches:
Based on the "Policy of Yili Group Internal Control and Risk Management System", Yili continuously improves mechanisms related to internal control, risk management, and compliance management.
Conducts risk identification for key business operations, establishes risk inventories, and develops risk response plans to ensure the company's healthy operation and sustainable development.
Through internal control self-inspection, self-assessment, and cross-functional audits, supervises its internal control and risk management systems and enhances the risk prevention awareness of all employees.
Anti-fraud and Anti-corruption
Yili has built a robust anti-fraud supervision, prevention, and control system based on the core concept of "zero tolerance for fraud and corruption". The audit department is a formal organization within Yili responsible for matters related to business ethics. It has clear duties and responsibilities, which include developing and reviewing anti-fraud workflows and systems, conducting internal audits, providing training and guidance, establishing and monitoring the fraud reporting mechanism, and building a company culture free from fraud and corruption.
Yili Sunshine
Issued the "Yili Group's Anti-Fraud Management Measures", clarified the fraudulent behaviors and standardized the mechanisms for rewards and punishments
Issued the "Management Standards for Audit Issues Handling", provided a basis for addressing fraud and , ensuring that related issues are handled objectively, fairly, justly, and rigorously.
Yili has established the "Complaint Reporting Confidentiality Management Guidelines". The guidelines require all personnel (i.e., complaint receivers, processors, and investigators) who come into contact with the whistleblower-reported information (i.e., whistleblower's identity and the content of the report) to maintain strict confidentiality.
All employees have signed the "Anti-Fraud Commitment" which informs employees about the anti-fraud policies, personal commitment goals, and anti-fraud requirements, ensuring that all employees clearly understand their obligations against fraud.
All external business partners are required to sign a business ethics agreement known as the "Sunshine Agreement". The agreement is applied to both new and existing suppliers at the contract signing and renewal stages. The Sunshine Agreement stipulates that business partners should also maintain their own anti-fraud compliance management policy, enforce integrity and self-discipline among their business personnel, and require business partners to report any identified fraudulent activities.
Yili has established various business ethics reporting channels, including a hotline, email, and physical complaint mailbox. All these channels are publicly disclosed and can be accessed at any time.
For more details, please visit "
Yili Sunshine"
Business Ethics Management Mechanism
Yili has established a Board-level Audit Committee, which is responsible for overseeing Yili's anti-fraud programs and guiding, supervising and evaluating their implementation. The Committee reports directly to the Board.
The Audit Department of Yili oversees the investigation of business ethics breaches and corruption and conducts follow-ups to ensure the effective operation of anti-fraud monitoring and prevention mechanisms.
On a quarterly basis, the Audit Committee reviews internal audit reports prepared by the Audit Department to monitor the progress of anti-fraud programs. These include Yili's fraud governance plans, audit findings, complaint investigations, and remediation status. This ensures that the Audit Committee fulfills its anti-fraud responsibilities effectively.
Act
Every year, seminars are held on major systemic corruption cases, and relevant business processes are rectified and optimized with specific deadlines set
Internal and external channels for exposing corruption cases have been established, with regular updates on the corruption cases and their violation results
Established business ethics profile for all employees, which use as references for performance review and promotions
A "blacklist" is established for suppliers found to have business ethics issues. Suppliers added to this blacklist will not be engaged for a period of 5 years
Plan
Each year "Work Promotion Plan for the Collaborative Governance System on Fraud of Yili Group" clarifies the annual anti-fraud direction, objectives, and detailed plans
Do
Monitoring complaints through multi-channel business ethics reporting channels, with a 100% follow-up and investigation rate
100% of employees signed the business ethics commitment, 100% of external partners signed the "Yili Sunshine Agreement"
Business ethic audits are conducted individually by the audit department, covering all of Yili's operations on a three-year rotation, with self-inspections conducted by all business units on an annual basis
Check
Annual online and offline business ethics training is conducted for employees, achieving 100% employee coverage
Annual business ethics training and communication are conducted for suppliers through various approaches, achieving a 100% supplier coverage rate
Annual surveys on the awareness of business ethics are conducted among suppliers to evaluate the effectiveness of Yili's business ethics management approaches
