We expect CTI's suppliers to comply with CTI's rules and practices regarding suppliers, to recognize CTI's values and to adopt principles similar to those of CTI about their responsibilities to their stakeholders:

The implementation of suppliers in environmental protection, labor protection and other aspects is also a part of our concern, we will have relevant licenses, qualifications, certification as a basis for cooperation, and we have developed the CTI Supplier Code of Conduct to guide and promote suppliers to build a sustainable business environment.

1. Supplier ESG Review

We conduct compliance reviews of suppliers at least once a year by management documents such as the Supplier Management Approach.

During the reporting period, our social and environmental assessment was included in the supplier assessment and 126 key category suppliers were selected (approximately 70% of Group lab material procurement amount) to conduct ESG audit survey, and did not identify any significant risks related to child labour, forced or compulsory labour, freedom of association, and environmental pollution.

2. Green Procurement

During procurement, we set several environment-based assessment indicators for evaluating the procurement of experimental equipment that have a greater impact on the environment, such as energy consumption, noise, wastewater, waste gas, radiation and vibration. For example, we include energy consumption competition scoring weights for comparison and selection during procurement and conduct specific environmental impact verification work after procurement. Some of our paper promotional materials are made of FSC-certified paper to promote sustainable management of forest resources.

3. Integrity Procurement

We formulate the Code of Integrity in Procurement Operations, strengthen procurement/subcontracting integrity practices to alert risks, and manage suppliers and procurement/subcontractors to eliminate risk sources, implement sunshine procurement, regulate procurement processes to control risks, implement oversight and review to monitor risks, and address fraud or corruption to warn of the risks.

Experimental equipment and materials are the main types of procurement. We explicitly require suppliers to sign the Fair Competition, Sunshine Procurement Integrity Statement, commit to abide by the integrity system of CTI, prohibit bribery and provide unfair benefits to the Company's employees, and prevent unfair competition before conducting business transactions.

We have formulated the Procurement Management System, Implementation Rules for the Procurement of Experimental Materials, Implementation Measures for the Procurement of Experimental Equipment and other documents to strictly regulate the process of procurement matters, and to ensure transparency and legal compliance in procurement.

We require all sourcing/subcontracting practitioners to sign the Sourcing/Subcontracting Personnel Integrity Commitment and require sourcing/subcontractors to receive pre-induction integrity training.

During the reporting period, the laboratory supplier's Code of Conduct for CTI Suppliers was signed at 100% and the Fair Competition and Sunshine Procurement Integrity Statement was signed at 100%.

4. Suppliers Stability

We advocate fair and open competition and establish long-term relationships based on mutual trust. We ensure that all parties participate in the procurement process fairly, honestly and in good faith. We recognize that adherence to competition principles is the key to maintaining integrity in the procurement process.