Special Explanation on the Proposed Non-Distribution of Profits for the Year 2021

Henan Kedi Dairy Co., Ltd. (hereinafter referred to as "the Company") held the 17th meeting of the 4th Board of Directors and the 9th meeting of the 4th Supervisory Board, where the "2021 Profit Distribution Plan" was reviewed and approved. This proposal is subject to approval at the Company's 2021 annual shareholders' meeting. The specific situation is as follows: According to the audit confirmation by Zhejiang Tianping Accounting Firm (Special General Partnership), the Company achieved a net profit attributable to shareholders of the parent company of 69,047,997.73 yuan for the year 2021, while the parent company incurred a net loss of 262,922,661.89 yuan. As of December 31, 2021, the cumulative undistributed profits in the consolid