Procedure on Reporting>>

Procedure Reporting

Objective

Implement code of ethics. Strengthen internal supervisory system, carry forward corporate culture of honesty abiding of the law. Guarantee the healthy development of AOBO. Encourage and protect the person who expose behavior that harm the interest of AOBO.

Definition

“Report” in the procedure refers to any organization or individual, either publicly or in private, exposing behavior which is in violation of AOBO’s code of ethics and/or other behavior which harms the interest of AOBO.

Basic principle

Respect whistle blower, reward whistle blower, and protect the whistle blower. AOBO encourage employees, external organizations and individuals to expose behavior that is in violation of law, regulation and discipline, as well as fraudulent behavior using various methods, including anonymous letter.

Employee of AOBO who is also employed at a company which is a competitor of AOBO or at any other company which may harm the interest of AOBO, including residing on the board or committee of company that has conflict of interest with AOBO.

Using company property, information without approval, and abusing power for personal gains, illegal possession of company property or indulging and ignoring harming of company property by other people .

Employees of AOBO who hold ownership interest of non-public listed entities which are competitors of AOBO, or employees who hold more than 5% ownership interest of public listed companies which are competitors of AOBO but fail to disclose the amount to the Board of Directors .

AOBO employee makes other transaction, receive any form kickback, commission or other personal interests by obtaining loan or personal debt guarantee from major clients, suppliers or competitors.

AOBO employee makes illegal payments to any governmental official directly or indirectly;

AOBO's employee disclose, publish or sell out company trade secret and other confidential data, or handle company confidential data beyond ones responsibility and without AOBO's prior approval.

Violation and fraud in accounting, financial management, and auditing etc., such as manager or employee direct or indirectly influences the truthfulness and accuracy of financial reports by any method, and forces, manipulates, misleads or deceive the independent auditing of AOBO, resulting in serious misleading effect for the financial reports of AOBO.

All other circumstance which violent AOBO's applicable law, code, procedure and policy.

Prosecutor

Any behaviour in violation of integrity policy of AOBO, as well as harming the company’s interest, including but not limited to:

demanding money from personbeing managed or served; accepting gift or banquet invitation that may affect the just execution of one’s duty; obtain personal gain under false pretense and fraud during business transactions and harm the interest of AOBO; demanding kickback from undertaking projects; jobbing, appropriation of company property for personal use, reimburse personal expense using company fund or charging company credit card for personal use; revealing information on distribution of managerial positions or obtaining post improper for oneself or others; in violation of policy that not to utilize company vehicle or other property for personal use.

Reporting methods

The accuser could report the informant center via telephone number, fax, letter, E-Mail as follows:

Email: integrity@bioaobo.com

Tele: 0451-82468960

Fax: 0451-82468989

Mail address: No. 485 Nanzhi Road, Daowai Dist. Harbin

Reporting box location: Beside elevator entrance on the first floor of AOBOOfficeBuilding; Three-Happiness: InsideOfficeBuilding hall; HSPL Location: Beside HSPL Extraction Workshop; GLP Location: Beside enterprise cultural propaganda column opposite the OfficeBuilding;

Reporting to the informant center directly;

Forwarding the reporting via other internal department;

AOBO will publish the accusation through internal files, related newspapers and periodicals,, web site to facilitate the reporting process.

Registration and handling of reporting

registration

The Company has dedicated staff for professional ethics to register accusation reports.Accusation reports sent by E-mail should be printed out for filing; and both envelop and letter should be preserved.for record for accusation reports sent by letters.

After collecting the accusation reports by various methods, the staff must register the reports and report them immediately to the president of Human resources & CultureCenter.

The president of Human resources & CultureCenter shall examine the alleged misconduct carefully and decide whether it should be investigated.

For those alleged misconducts that don’t merit investigation, the staff shall prepare written report stating the reason for the disqualification. The report shall bear the signature of the president of Human resources & CultureCenter and file for record.

Treatment

For those alleged misconducts that merit investigation, the president of Human resources & CultureCenter shall appoint designated personnel and establish investigative unit to initiate the investigation.

The alleger has the right to find out the treatment of alleged misconduct. If a reply isn’t given within a reasonable period, the alleger may request a respond from the Human resources & CultureCenter.

Investigation

The investigation unit may adopt direct or indirect investigative method depend on the specific information of the alleged misconduct.

Depend on specific circumstances, principal investigator decides whether to notify the alleger the preliminary investigation date, whether to necessitate the help from the alleger and whether to ask the alleger to provide further information. Unless it is absolutely necessary, the staff shall not meet the alleger in person to alleviate the risk of exposing the alleger.

Depending on the fact of investigation after finishing the necessary investigative procedure, the investigation unit shall submit relevant investigative report to auditing committee and AOBO CEO,and recommend appropriate treatment. The final opinion should bear the signatures of CEO office, the Human resources & CultureCenter,, auditing and supervision center, and the relevant president.

After investigation, for genuine case that are in violation of national law, they shall be handed over to judicial authorities by AOBO law department.

Relevant requirements and provisions

Requirements and provisions for the investigation unit:

The staff to deal with allegation disclosure are required to have extensive auditing experience as well as competence to investigate malpractices activities.

He/she mustbe loyal, honest, confidential ,the specific requirements are as follows:

The information on allgers’ name, work units, home address etc. and reported content must be strictly kept secret. The materials included in the report are categorized into confidential files;

forward the alleging material to the disclosed unit or the person being alleged against；

The privacy is essential when accept the allegation from alleger or verify the information with alleger, such work should be carried out without exposing the alleger’s identity.

For those staff dealing with disclosure ,who have breached privacy provision or performed duties unfairly, he/she should be severely punished depend on specific condition and consequence; if the breach constitutes criminal offencec,the person should be handed over to judicial authorities according to law..

The withdrawal system is required for handling disclosure affair .In the one of followingcases, the working personnel shouldinitiatively bring forth to evade, concurrently the alleger also has right to request the undertaker related to or involving with alleged issue should evade:.

he /she has relative or friend relation with alleger or the alleged;.

the alleger, relative or friends has conflict of interest with the allegation.

other relations connecting with the allegation which may prejuidice the treatment of allegation fairly..

no name of alleger or his/her working unit should be disclosed under any circumstances ,unless the consent is given by the alleger.

The requirements and provisions for alleger:

The alleger shouldfurnish information regarding the alleged, such as name,work unit,any detailed facts as much as possible that were in violation of laws, regulations and disciplines.

Alleger should present the issue according to the facts and take responsibility what he has disclosed. Neither he /she is allowed to report on behalf of other person, nor is allowed to make reprisal by disclosure. After verification, if he/she does intend to maliciously prosecute or defame the alleged, he/she will be punished according to the relevant laws and regulations.

The alleger should report issues to the informant center through valid source, instead of transmitting information via other channel outside of orgnization or using extreme method to report problems .. ；

When the alleger is require to cooperate during investigation and collecting evidence, he should tone in positively, without providing false and deceiving information or disturb the investigative work maliciously or affecting the professional judgement of working personnel in charge of dealing with disclosure..

Encourage anonymous disclosure as well as onymous ones.The informant center will treat both onymous and anonymous in the same measure, however the onymous disclosure will be dealt with priority..

Requirements and provisions for other relevant departments or employees:

Cooperate with investigative personnel closely to investigate and collect evidence;.

Any unit or any individual is prohibited from stopping, suppressing the allegation to surface or retaliating upon the alleger i any way..

If anyone retaliates upon the alleger, he/she will be punished severely according to relevant regulations once ascertained. In the case of constituting criminal offence, he/she will be delivered to judicial authorities according to law..

Maintenance of reporting archive

Reporting archives refer to all documentations collected in the procedure in which from the commencement of accepting allegatioin till issuance of investigation report, including text and recording material.

The director of archives is responsible for maintaining reporting. Within 30 days after issuing investigation report, project manager on disclosure should collect the investigative documentation or manuscripts and hand them over to archive director after cleaning up. All report documents are classified as confidential document..

Reward for reporting

For those allegations which prove to be true after verification, AOBO will give reward the alleger. For those alleger who have made significant contribution, AOBO shall reward heavily.

For the amount of loss which may be recovered, the reward will be given according to certain ratio of recovered amount. The specific reward rates are as follows:.

For those unrecoverable economic loss,,if the allegation proved to be true, then reward should be offered. The reward depends on the severity of the case involved or how AOBO punishes the alleged, the incentive payment is within RMB100 to100,000.

AOBO reward alleger by electrical remittance account..

Authority for the interpretation

The Human resources & CultureCenter is responsible to construe this enforcement rules.

Effective date

The enforcement regulations come into effect at of the date of promulgation.

　　　　　　　　　　　　　　　　　　　　　　　　　Human resources & Culture Center , AOBO