In order to strengthen the internal control of Livzon Pharmaceutical Group Inc. (hereinafter referred to as "the Company"), effectively prevent and control the risk of fraud within the Company, and establish anti-fraud controlsand supervision mechanisms, to ensure the healthy and sustainable development of the Company, in accordance with national laws, regulations, and the relevant requirements of the Company, this interim regulation (hereinafter referred to as "this regulation") is specially formulated.

I. Definition and main forms of fraud:

Fraud refers to the act of using illegal means such as deception and fraud to harm or seek benefits for the Company, which may bring improper benefits to individuals. The main forms include:

(1) False financial reporting, which refers to intentional acts that lead to inaccurate financial reports. This mainly includes:

1. Intentionally changing billing principles, modifying billing data, over-reporting or under-reporting income; intentionally under-reporting or over-reporting costs, over-reporting or under-reporting inventory, construction in progress, fixed assets, etc.

2. Fabricating, concealing, or deleting transactions or matters, creating false business contracts, issuing false invoices, etc.

3. Deliberately using inappropriate accounting policies and estimates or using related party transactions to adjust profits.

4. Forging or altering accounting vouchers and accounting books, concealing or intentionally destroying accounting vouchers, accounting books, financial reports, etc. that should be legally preserved.

5. Violating national tax laws and relevant regulations, intentionally evading taxes.

6. Violating the national unified accounting system and the Company's relevant regulations, and other accounting fraud behaviors that seriously affect the fair presentation of the Company's financial statements.

(2) Accepting bribes and kickbacks, misappropriating or embezzling assets, mainly including:

1. Accepting bribes and kickbacks, embezzling, misappropriating, stealing Company funds and assets, etc.

2. Obtaining funds through false transactions.

3. Setting up "small funds" or establishing "off-the-books assets".

4. Establishing "tertiary industry enterprises" and encroaching on Company interests.

(3) Violating regulations or failing to perform duties correctly, causing significant economic losses to the Company, and intentionally concealing the facts of the losses, mainly including:

1. Blindly investing externally without approval, causing waste of funds.

2. Unplanned construction or over-budget investment, resulting in long-term idleness or waste of engineering projects.

3. Unauthorized external guarantees or loans from financial institutions and external borrowing of funds.

4. Unfair economic contracts, irregular business transactions, or selling Company assets at low prices.

5. Intentionally failing to perform or incorrectly performing duties, causing damage or loss of assets, or intentionally lending Company assets without compensation or making illegal donations.

6. Leaking Company trade secrets, and other intentional acts that cause financial and asset losses to the Company.

II. Clarifying anti-fraud responsibilities:

Personnel at all levels of the Company are responsible for preventing, controlling, and supervising fraudulent behavior. The main leaders at all levels are the first "responsible persons" for anti-fraud work and should strictly perform their duties to establish an effective anti-fraud responsibility system.III. Establishing an anti-fraud control environment:

(1) Creating an honest corporate culture environment, implementing and enforcing the "Employee Code of Professional Ethics", enhancing employees' awareness of complying with professional ethical standards, and effectively preventing fraudulent behavior.

(2) Establishing a reporting mechanism and control procedures:

1. The Risk Management Headquarters serves as the Company's anti-fraud reporting and complaint acceptance center, responsible for accepting reports and complaints about fraudulent behavior and recording, reporting, investigating, and following up on reported disciplinary violations.

Formulating management measures for accepting, investigating, and handling reports and complaints, establishing reporting channels, and clarifying reporting Tel, email, or through accepting reporting letters.

2. Establishing a confidentiality system for reporting information and records, ensuring the independence of personnel receiving and managing reporting information. Strengthening security management measures for reporting mailboxes, hotlines, and emails. Personnel who violate and leak the information of whistleblowers or retaliate against whistleblowers will be dismissed, and those who violate the law will be transferred to judicial authorities for legal processing.

3. The Risk Management Headquarters should regularly report in writing to the Audit Committee, categorizing, analyzing, and following up on the results of the reported cases accepted during the period, and promptly reporting serious or significant reported events and their investigation and handling.

IV. Establishing communication channels for anti-fraud information

(1) The anti-fraud policies and reporting procedures should be promoted in a timely manner through employee handbooks, company regulations, or internal networks; regular training and communication on the Code of Professional Ethics should be conducted to ensure that employees understand all relevant content of the Company's anti-fraud policies, organizing key position employees to visit prisons to clearly understand the consequences of fraudulent behavior and the Company's serious attitude towards preventing fraudulent behavior, clarifying their roles and responsibilities in complying with the Company's anti-fraud policies.

(2) The Company's business dealings with users, suppliers, and other related units should be based on honesty and fairness, and relevant information and requirements regarding the Company's ethical standards and codes of conduct should be communicated to them.

(3) Having sufficient capability to collect information on identified fraud risks, anti-fraud control activities, existing fraudulent behaviors, and remedial measures, and being able to achieve sharing of relevant information.

(4) Major fraud events should be analyzed in a timely manner to determine whether they are widespread

, and timely propose preventive and control measures. The results of handling major fraud events should be reported to all employees, making them aware of the harmfulness of violations and serving as a warning.V. Establishing an anti-fraud supervision mechanism:

(1) The Board of Directors and the Audit Committee supervise the Company's fraud risk assessment and anti-fraud measures.

1. Regular or irregular meetings should be held to discuss the effectiveness of fraud risk assessment and anti-fraud measures.2. Supervising whether the accounting standards, accounting policies, and accounting estimates used by the Company comply with national accounting regulations.

2.监督公司运用的会计准则、会计政策和会计估计是否符合国家会计法规。

3. Supervise the company's significant unconventional transactions, the company's assessment of fraud risk, the possibility of management exceeding control systems, and behaviors that exert inappropriate influence on the financial reporting process.

4. Supervise the implementation of the company's code of professional ethics and reporting mechanisms; supervise the internal audit department's review results of the company's internal controls and the execution of audit plans addressing fraud risks.

5. Regularly meet with independent accountants to discuss the potential existence of fraud risks in the company.

(2) Management is responsible for establishing and maintaining an effective internal control system., to prevent the occurrence of fraud. 1. Management should assess the potential impact of daily fraud incidents and develop necessary response and handling procedures..

2. When fraud incidents occur, management should handle them objectively and fairly, analyze the impact of the fraud incidents, and take necessary remedial measures in a timely manner to prevent or respond to similar fraud incidents.

3. If the fraud incident involves key management personnel or requires extensive additional investigation procedures, independent legal counsel may be hired to conduct the fraud investigation under the guidance of the audit committee.

(3) The internal audit department should regularly organize assessments of fraud risks.

The internal audit department should fully consider fraud risks when formulating the audit work plan and include fraud investigations in the audit plan. Internal auditors should maintain professional prudence during routine audits, paying attention to the assessment and analysis of fraud risks,and timely detect signs of fraud.

(4) The company should take necessary investigation procedures and corrective measures for fraud incidents that have occurred.

1. Inspectors should implement necessary inspection procedures to determine whether the fraudulent behavior indicated by signs of fraud has occurred.

2. After completing the necessary investigation procedures for fraud incidents, the severity should be considered from both the nature and amount of the fraudulent behavior, and a corresponding investigation report should be issued.

3. Conduct a serious analysis and study of internal control deficiencies, classify them based on significance and impact, assign responsibility to relevant departments, and take effective corrective measures to avoid or reduce losses, while tracking the effectiveness of the corrections.

4. If existing control measures cannot control identified fraud risks, timely corresponding internal control remedial measures should be taken.

6. Implement a responsibility accountability system:

The company should hold accountable those responsible for fraud incidents.

(1) Accountability for fraud includes leadership responsibility and direct responsibility.

1. Leadership responsibility refers to the responsibility that management personnel with corresponding leadership authority should bear for fraud incidents that occur within their supervisory or management scope due to negligence or oversight, resulting in distorted accounting information, concealment of losses, etc.

2. Direct responsibility refers to the responsibility that company management personnel and their related personnel should bear for directly operating or participating in relevant decisions, or instructing, coercing, condoning, or shielding others in fraudulent activities, as well as failing to fulfill or correctly fulfill their duties, resulting in distorted accounting information, concealment of losses, etc.

(2) The company will handle fraud incidents based on relevant national laws and regulations and the company's punishment provisions,and hold relevant responsible persons accountable, including but not limited to administrative penalties, as well as disciplinary actions such as dismissal, termination of employment, and termination of labor contracts. Those who violate the law will be referred to judicial authorities.

7. These regulations are interpreted by the risk management headquarters.

8. These regulations shall take effect from the date of promulgation.

Li ZhuPharmaceuticalsGroupCo., Ltd.