Ethical Management and Prevention of Insider Trading

Ethical Corporate Policy

To implement ethical management policy, the Company has established “Ethical Corporate Management Best Practice Principles”, “Codes of Ethical Conduct” and “Operating Procedures for Handling Internal Material Information and Preventing Insider Trading”. Dedicated units report the state of implementation to the Board of Directors at least once per year, and the relevant regulations are continuously modified and promoted according to regulatory updates. The dedicated units has conducted ethical management promotion and training, and reported the implementation status to the Board of Directors on December 19, 2023.

I. Dedicated Unit for Promoting Ethical Management:

The original dedicated unit for promoting ethical management was the General Manager Office. To fully integrate the planning and promotion of the various activities of corporate governance, the Company appoints the CFO, Alice Wang, as the Chief Corporate Governance Officer, responsible for coordinating the various corporate governance activities. The dedicated unit for ethical management is incorporated into the scope of duties of the corporate governance unit, where the Chief Corporate Governance Officer will lead the dedicated personnel from the various departments responsible for ethical management promotion.

II. Scope of duties and powers

• Assisting in incorporating ethics and moral values into the Company’s business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations.
• Analyzing and assessing the risks of unethical conduct within the business scope on a regular basis and accordingly adopting programs to prevent unethical conduct and setting out in each program the standard operating procedures and conduct guidelines with respect to the Company’s operations and business.
• Planning the internal organization, structure, and allocation of responsibilities and setting up check-and-balance mechanisms for mutual supervision of the business activities within the business scope which are possibly at a higher risk for unethical conduct.
• Promoting and coordinating awareness and educational activities with respect to ethics policy.
• Developing a whistle-blowing system and ensuring its operating effectiveness.
• Assisting the Board of Directors and management in auditing and assessing whether the prevention measures taken for the purpose of implementing ethical management are effectively operating, and preparing reports on the regular assessment of compliance with ethical management in operating procedures.

III. Employee training and regulatory advocacy

1. Bora has established the “Code of Conduct” for the Bora Group in both Chinese and English versions, which is available on the company’s intranet for all employees to reference. As of 2022, a total of 626 integrity statements have been signed, and an additional 156 statements were signed by new employees in 2023, resulting in a signing rate of 97% for the group.
2. In order to uphold the core values of integrity and honesty, the prevention of insider trading and confidentiality agreements have been incorporated into the “Ethical Corporate Management Best Practice” These regulations and guidelines were approved by the board of directors on March 16, 2023, and reported at the shareholders’ meeting on June 6, 2023. The revised procedures have been made available on both internal and external websites for all employees and stakeholders to access.
3. To enhance awareness of ethical business practices and the importance of insider trading compliance, existing employees were notified to take systematic quizzes, while new employees were required to complete a response form after reading the materials directly in the system, ensuring continuous awareness efforts. In 2023, a total of 1,042 employees in the group were educated on ethical behavior and integrity in business, totaling 20,840 minutes.
4. Procedures and regulations such as the Group’s Code of Conduct and Integrity Guidelines include provisions for reporting violations of ethical business conduct and protecting anonymity. The Company has designated personnel (Ms. Ellen Chen, Deputy Manager of Group Human Resources Department) responsible for receiving reports and coordinating subsequent investigations and responses. The reporting email address is hr80@bora-corp.com, and it is available on the company’s official website. As of 2023 and until now, one report has been received through the dedicated mailbox. Following an internal investigation, although no clear evidence was found, appropriate measures were taken for sound management. Furthermore, no other complaints related to dishonesty, unethical behavior, or suspected insider trading violations have been received.

Corporate Governance Best Practice Principles

Bora Pharmaceuticals firmly believes that sustainable management and continued success in business depends on the trust and confidence we receive from our employees, clients, and shareholders. We abide by our commitments as well as ethical and honest practices to maintain mutual trust with our stakeholders, achieve joint growth and sustainable management alongside our partners, and adhere to our Ethical Corporate Management Best Practice Principles and ethical business norms.

Our Ethical Corporate Management Best Practice Principles encompass our entire Group as well as foundations with directly or indirectly donated funds exceeding 50%. When conducting business with internal stakeholders, Bora Pharmaceuticals is not allowed to directly or indirectly accept any improper benefits; engage in unethical behaviors that involve ethical, legal, or fiduciary duty violations; or be involved in other unethical behaviors to obtain or maintain benefits.

Prevention of Insider Trading

1. In accordance with Corporate Governance Best-Practice Principles and legal amendments, the Company discussed and approved the revision of the “Internal Handling of Material Information and Prevention of Insider Trading Management Procedures” during the board meeting on March 16, 2023. The revised procedure explicitly prohibits insiders from trading company stocks for a certain period (15 days before quarterly reports/30 days before annual financial reports) after obtaining financial or performance information. The updated procedure has been made available on our company’s internal website for all employees to access.
2. In order to strengthen the promotion of ethical business practices and the importance of insider trading law compliance, all employees within the group were notified to undergo a test on these topics in 2023 through a systematic approach. New employees will be required to complete the test directly on the system after reading the materials, ensuring continuous awareness efforts.

The above courses had a total of 1,042 participants in training, with an estimated total employee investment time of approximately 20,840 minutes, and a pass rate of 96.45% in the assessment. The execution status of insider trading prevention for the year 2023 was reported to the board of directors on December 19, 2023.