Compliance and Integrity Management

Compliance and Integrity Management

Management Approach：

To implement ethical management, Bora Pharmaceuticals has established the “Ethical Corporate Management Best Practice Principles,” “Codes of Ethical Conduct,” and “Operating Procedures for Handling Internal Material Information and Preventing Insider Trading.” Dedicated units regularly report the state of implementation to the Board of Directors. Bora continuously monitors regulatory updates and adjusts relevant procedures to ensure the effective execution of its ethical policies. This year, a comprehensive report on promotion and implementation was presented to the Board of Directors on November 13, 2024.

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.

Scope of duties and powers

A. 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.

B. 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.

C. 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.

D. Promoting and coordinating awareness and educational activities with respect to ethics policy.

E. Developing a whistle-blowing system and ensuring its operating effectiveness.

F. 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.

G. Preparing and properly maintaining documented information related to the ethical management policy, including declarations of compliance, commitments to implementation, and records of execution.

Employee training and regulatory advocacy

A. Bora has established the Bora Group Code of Conduct in both Chinese and English versions. This Code is available on the company’s intranet for all employees to access. All new employees are required to sign an integrity statement, achieving a 100% signing rate across the group.

B. To uphold the company’s core values of integrity and honesty, Bora has incorporated insider trading prevention measures and confidentiality agreements into its Ethical Corporate Management Best Practice Guidelines. These measures are further integrated with initiatives such as advocacy, training programs, integrity statement signing, and whistleblowing mechanisms. The guidelines were approved by the Board of Directors on March 16, 2023, and reported to the shareholders’ meeting on June 6, 2023. The revised procedures are available on both internal and external websites for all employees and stakeholders to reference.

C. To enhance awareness of ethical business practices and the importance of insider trading compliance, Bora conducts annual training programs on corporate integrity and insider trading prevention. In 2024, a total of 169 training hours were completed.

Whistleblower System (Derong)

Bora Pharmaceuticals has established a comprehensive whistleblowing and grievance mechanism to provide employees with a safe channel for reporting actions that harm employees, jeopardize the company’s interests, or involve other illegal activities. All reported cases are investigated by the responsible departments, with appropriate disciplinary measures taken based on the severity of the misconduct. To further protect whistleblowers, the company has engaged an independent third-party platform, Conduct Watch, as the designated whistleblowing and grievance platform, ensuring confidentiality and security throughout the reporting process. For more details, please refer to the “Management Regulations for the Whistleblowing and Grievance System.”

Prevention of Insider Trading

A. 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.

B. 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 since 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.

C. Between December 11 and 29, 2023, Bora conducted courses for internal employees on “Prevention of Insider Trading Advocacy” and “Article 157-1 of the Securities and Exchange Act: Insider Trading and Material Information Assessment.” The training covered employees from Bora, Bora Pharmaceutical Laboratories, TWi, Bora Biologics, Bora Pharmaceuticals Ophthalmic, Bora Health, and SunWay. A total of 1,042 participants attended the sessions, with employees collectively dedicating approximately 169 hours to the courses. The pass rate for assessments reached 100%. The implementation status of insider trading prevention for 2024 was reported to the Board of Directors on November 13, 2024.

D. Bora enforces closed-period management for insider stock transactions and regularly notifies all directors and insiders regarding relevant arrangements to ensure compliance with insider trading prevention regulations. Notification records are as follows:：

1. February 3, 2023: Closed period for insider stock transactions applicable to the 2022 annual financial report.
2. March 31, 2023: Closed period for insider stock transactions applicable to the Q1 2023 financial report.
3. July 3, 2023: Closed period for insider stock transactions applicable to the Q2 2023 financial report.
4. October 4, 2023: Closed period for insider stock transactions applicable to the Q3 2023 financial report.
5. January 3, 2024: Closed period for insider stock transactions applicable to the 2023 annual financial report.
6. April 2, 2024: Closed period for insider stock transactions applicable to the Q1 2024 financial report.
7. July 4, 2024: Closed period for insider stock transactions applicable to the Q2 2024 financial report.
8. October 6, 2024: Closed period for insider stock transactions applicable to the Q3 2024 financial report.
9. January 3, 2025: Closed period for insider stock transactions applicable to the 2024 annual financial report.