In 2024, COFCO continued to strengthen corporate governance by refining its decision-making mechanisms for major issues, key personnel appointments, major investments and significant fund usage. We clarified the responsibilities of the Party Leadership Group, the board of directors and the management team, improved reporting procedures between the management and the board, and standardized rules for internal deliberation. A closed-loop compliance management system was established, ensuring that strategic decisions are made by the board and implemented by the management. This structure has enhanced alignment between strategic direction, risk control, and operational execution. In October 2024, COFCO issued the Guiding Opinions on Deepening the Development of the Boards of Subsidiaries, establishing a checklist-based management mechanism to define the scope and scale of board building and enhance the governance effectiveness of subsidiaries in a science-based manner.

Law-based and compliant operations

In 2024, COFCO continued to prioritize integrity and compliance as the baseline for its business operations. We strengthened compliance management by focusing on key areas such as anti-monopoly, anticommercial bribery, environmental protection, safe production, and labor practices. We also increased efforts to hold accountable those responsible for violations in business and investment practices. Meanwhile, we strengthened integrity building and management, improved our incentive and restraint mechanisms, performed responsibilities at higher quality, and enhanced commercial reputation, creating a positive image both domestically and internationally. We organized legal compliance training and legal education exchanges, enhancing the professional skills and expertise of legal personnel, and promoting the deep integration of business operations and the rule of law.

In terms of audit, we continued to improve the "centralized, unified, comprehensive, and efficient" audit supervision system, strengthening the coordination between disciplinary inspections, supervisions and audits. The internal audit function focuses on serving the core responsibilities of COFCO, expanding the breadth and depth of audits. We have established an overseas audit department and a domestic audit center, achieving a full coverage of economic responsibility audits within the 5-year cycle. The function focuses on key areas to carry out audit supervision, with a firm commitment to preventing systemic risks and reinforcing the baseline of compliant operations.

Taking anti-unfair competition actions

COFCO attaches great importance to anti-unfair competition work. In 2024, we introduced regulations such as the Guidelines on COFCO Advertising, Packaging, and Publicity Legal Compliance Review and the Management Measures on COFCO Limited Trademark, clearly defining the key points for legal compliance reviews of advertising, packaging, and publicity under the anti-unfair competition law. The guidelines require operators to refrain from engaging in practices that confuse, deceive, or mislead consumers, aiming to prevent unfair competition disputes to the greatest extent and protect consumer rights.

Protecting and utilizing intellectual property

In 2024, COFCO continues to deepen intellectual property protection and utilization, focusing on establishing a comprehensive trademark lifecycle management system. At the system-building level, we have created a global trademark registration matrix for seven core brands, including "COFCO" "Fortune" and "Greatwall". We have also improved management standards, established a training mechanism, and strengthened the trademark protection awareness among all employees. In terms of specialized operations, we have implemented centralized procurement for trademark agency services. By leveraging a multi-dimensional evaluation system that assesses professional capabilities, service reputation, and cost control, we select partner agencies meticulously, enhancing the quality and efficiency of trademark operations. In terms of intellectual property compliance management, we have established a legal compliance review mechanism to regulate the use scenarios of brand authorization, providing strong support for brand extension and rights protection decisions.

Strengthening the risk prevention and control system

In 2024, facing numerous unexpected internal and external challenges, COFCO continued to improved its risk prevention and control system. We focused on strengthening risk assessment and analysis, as well as dynamic monitoring and reporting, aiming to effectively address market, international operation, credit, asset-liability, and compliance risks. We also advanced the integration and optimization of internal control systems and supervision evaluations, preventing risks and reinforcing risk prevention and control.

In terms of market and credit risk prevention, we strengthened whole-process management by establishing a comprehensive credit risk control mechanism and a dishonored customer management system. We expanded credit insurance coverage, ensuring a positive interaction between high-quality development and high-level security.

Upholding Party Integrity for a clean and positive work environment

COFCO implements the responsibility system for comprehensive strict governance within the Party and constantly works on party integrity. Specific actions include: (a) Improving the supervision mechanism across the board, pushing forward inspection rectifications, strengthening coordination between inspections and audits, and addressing issues related to grain purchase and sales, overseas corruption, and insider self-dealings; (b) Enforcing the Eight Central Regulations and their implementation details and campaigning against formalism, bureaucracy, hedonism, and extravagance; and (c) Maintaining a clean culture in the new era, organizing integrity warning education activities, and solidifying the ideological defense against corruption.