Assessment Item

Implementation Status

Gaps with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies

Yes

No

Summary

1. Establishment of Corporate Conduct and Ethics Policy and Implementation Measures

(1) Does the Company have a clear ethical corporate management policy approved by its Board of Directors, and bylaws and publicly available documents addressing its corporate conduct and ethics policy and measures, and commitment regarding implementation of such policy from the Board of Directors and the top management team?

V

(1) "Leading, Integrity, Unity, Efficiency" is the business philosophy of Nan Pao.The Company has formulated "Procedures for Ethical Management and Guidelines for Conduct" and "Code of Ethical Conduct" on April 5, 2017 board meeting. And the latest revision was approved by the resolution of the board of directors on December 17, 2020 and August 10, 2022 respectively.Except for the policies and practices of the Company's integrity management to clearly demonstrate the policy and methods of ethical management, the Company’s directors and management have signed "Integrity Statement" to cautiously fulfilling their duties in compliance with the obligation of attention of a prudent administrator. In addition, the Board of Directors and the management also actively fulfill the promise to ethical management policy. The enactment of "Procedures for Ethical Management and Guidelines for Conduct" and "Code of Ethical Conduct" has been disclosed on the Company’s website.

No significant discrepancy

(2)Whether the Company has established an assessment mechanism for the risk of unethical conduct; regularly analyzes and evaluates within a business context, the business activities with a higher risk of unethical conduct; has formulated a program to prevent unethical conduct with a scope no less than the activities prescribed in paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?

V

(2) The Company has formulated "Procedures for Ethical Management and Guidelines for Conduct", which have already covered the preventive measures for each paragraph of paragraph 2, Article 7 of the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies". The Company has also set up a dedicated unit which affiliated to the board of directors, regularly analyzes and evaluates business activities with a high risk of dishonesty in the business scope, and formulate a plan to prevent dishonesty against bribery, providing illegal political contributions, improper charitable donations or sponsorships, providing or accepting unfair interests, infringing business secrets, engaging in unfair competition, and damaging the rights and interests of interested parties.

No significant discrepancy

(3) Whether the Company has established relevant policies that are duly enforced to prevent unethical conduct, provided implementation procedures, guidelines, consequences of violation and complaint procedures, and periodically reviews and revises such policies?

V

(3)The "Procedures for Ethical Management and Guidelines for Conduct" of the Company is clearly stipulated that directors, managers, employees, assignees and persons with substantial control capabilities should not directly or indirectly provide, promise, request or receive any illegitimate benefits in the execution of their business, or make other acts that violate good faith, illegality or breach of acceptance. In order to urge employees to maintain an awareness of integrity behaviors, the Company will not only disclose the integrity standards related to business behaviors to internal website, and encourage employees to sign the “Statement of Ethics” and “Compliance with the Code of Ethics Data Registration”. In addition, through regularly or irregularly in weekly meetings or other internal meetings and other multiple methods to conduct honest behaviors for colleagues, the system and related case propaganda should be followed. In order to implement the high requirements of compliance with laws and regulations and professional ethics, the Company has set up a "Regulations Governing Whistle-blowing from Internal and External Parties". Financial Management Division of the Company, under the board of directors as the responsible unit for integrity management has responsible for the implementation of integrity management policies and prevention plans. At the same time, the relevant systems and measures are regularly reviewed and revised.

No significant discrepancy

2. Ethic Management Practice

(1) Whether the Company has assessed the ethics records of whom it has business relationship with and include business conduct and ethics related clauses in the business contracts?

V

(1) When conducting external commercial activities, the Company will consider the integrity record before dealing with the counterparty. The Company's Legal unit also incorporates the terms of good faith into the Company's various types of system contracts, requiring the transaction partners to strictly observe integrity code. If there is any dishonest behavior, the Company may unconditionally terminate or cancel the contract at any time. In 2022, the Company encourages suppliers to sign the "Supplier Code of Ethics and Conduct". The priority is given to those enterprises that sign the integrity commitment.

No significant discrepancy

(2) Whether the Company has set up a unit which is dedicated to promoting the company’s ethical standards and regularly (at least once a year) reports directly to the Board of Directors on its ethical corporate management policy and relevant matters, and program to prevent unethical conduct and monitor its implementation?

V

(2)The Company has assigned Financial Management Division under the board of directors, which is responsible for the integrity management policy and prevention plan, as well as reporting implementation results to the Board of Directors on an annual basis. The implementation of ethical corporate management was reported to the Board of Directors on December 20, 2023.

No significant discrepancy

(3)Whether the Company has established policies to prevent conflict of interests, provide appropriate communication and complaint channels and implement such policies properly?

V

(3)The Company’s "Procedures for Ethical Management and Guidelines for Conduct" and "Code of Ethical Conduct" have clearly stipulates that all employees can not receive improper benefits, to avoid damage on company rights. If any violation of the integrity regulations is found, the Company can follow the “Regulations Governing Whistle-blowing from Internal and External Parties” which provide grievance channels. For the accused, the opportunity to express their opinions or appeal is also provided.

No significant discrepancy

(4) To implement relevant policies on ethical conducts, has the Company established effective accounting and internal control systems, audit plans based on the assessment of unethical conduct, and have its ethical conduct program audited by internal auditors or CPA periodically?

V

(4) To ensure the implementation of integrity in operations, the Company has established an Audit Committee to oversee the accuracy of accounting and financial processes and the effectiveness of internal controls. The Financial Management Department is responsible for dynamic management of financial risks under the supervision of the Audit Committee. Additionally, the Internal Audit Office evaluates compliance with laws and regulations, adherence to the five elements of COSO internal control, and assesses risks at all levels of the Company based on the strategic objectives and past audit experiences. The annual audit plan for the following year is formulated within the existing organizational framework and is presented for approval to the Audit Committee and the Board of Directors in the fourth quarter of each year. The compliance with periodic audit procedures is reported to the Audit Committee and the Board of Directors. The 2024 audit plan was approved by the Audit Committee and the Board of Directors on December 20, 2023. In addition, each year in the fourth quarter, internal units and subsidiaries conduct self-assessments of their internal control systems. The results of the self-assessments are compiled in the first quarter of the following year and reported to the Audit Committee and the Board of Directors. This process is to evaluate the overall control of internal and external environments, operational risks, and the effectiveness of the design and implementation of internal control systems within the Company. The self-assessment results for 2022 were reported to the Audit Committee and the Board of Directors on March 27, 2023.

No significant discrepancy

(5)Does the Company provide internal and external ethical conduct training programs on a regular basis?

V

(5)The Company clearly stipulates in the employment contract of new recruits that employees are required to abide by the Company's integrity management policy, and sign the "Declaration of Ethics Standards" when they arrive on the job. In addition, it regularly holds internal education and training courses for new recruits every year, and at the same time disseminates the “Procedures for Ethical Management and Guidelines for Conduct” and “Code of Ethical Conduct” and other relevant norms of honest management. The Company also arranges education course at least once a year for the current directors, managers and employees about relevant laws and regulations. The Company has conducted an online training course on the principles of ethical business on Nan Pao E-Learning, with a total of 1,042 participants and 442 hours. In addition, in accordance with the “Regulations Governing Prevention of Insider Trading” regulations, the Company arranges education course at least once a year for the directors, supervisors, managers and employees on laws and regulations related to insider trading prevention procedures. On November 23, 2023, a total of 15 participants of directors, managers and employees were given a total of 15 hours education and publicity on "Insiders' Shareholding Declaration Instructions and Prevention of Insider Trading". The course content includes confidential work of important information. As well as the reasons for the formation of insider trading, the identification process and transaction examples.

No significant discrepancy

3. Implementation of Complaint Procedures

(1) Does the Company establish specific complaint and reward procedures, set up conveniently accessible complaint channels, and designate responsible individuals to handle the complaint received?

V

(1)The Company has established "Procedures for Ethical Management and Guidelines for Conduct" and "Regulations Governing Whistle-blowing from Internal and External Parties" to standardize the standards for employees to conduct business in good faith and conduct ethics. There is also a reporting mailbox (audit@nanpao.com) and a dedicated line for employees, outsiders and suppliers to directly report any financial, legal and integrity-related unfair practices. The acceptance unit is the Auditing Office of the board of directors, and the Auditing Office is responsible for handling.

No significant discrepancy

(2)Whether the Company has established standard operation procedures for investigating the complaints received, follow-up measures after investigation are completed, and ensuring such complaints are handled in a confidential manner?

V

(2)Articles 4 and 5 of the Company's "Regulations Governing Whistle-blowing from Internal and External Parties" specify the reporting channels and handling procedures, the standard operating procedures for the investigation of reported matters, and the follow-up measures to be taken after the investigation is completed. In addition, a confidentiality mechanism is established in Article 6. Regarding the whistleblower or the personnel involved in the investigation and their contents, the Company adopts the procedures of confidentiality and prudence in accordance with the regulations.

No significant discrepancy

(3)Does the Company adopt proper measures to prevent a complainant from retaliation for his/her filing a complaint?

V

(3)Article 6 of the Company's "Regulations Governing Whistle-blowing from Internal and External Parties" clearly defines the whistleblower protection mechanism. The Company will protect the whistleblower or the personnel involved in the investigation and the contents of the whistleblower. Any form of unfair treatment or retaliation against those who report in good faith or assist in an investigation is strictly prohibited.

No significant discrepancy

4. Information Disclosure

Does the Company disclose its guidelines on business ethics as well as information about implementation of such guidelines on its website and Market Observation Post System (“MOPS”)?

V

The Company has placed integrity-related regulations and promotional information on the internal website for employees to access at any time. The external website (https://www.nanpao.com.tw) under the "Investor Relations" section contains the Company's annual report (also available on the MOPs), important internal regulations, and detailed disclosure of integrity-related policy requirements, code of conduct, and information under the "Corporate Sustainability" section in the sustainability report.

No significant discrepancy

5. If the Company has established corporate governance policies based on Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, please describe any discrepancy between the policies and their implementation: None

6. Other important information to facilitate better understanding of the Company’s corporate conduct and ethics compliance practices (e.g., review the Company’s corporate conduct and ethics policy).

(1)As the basis to fulfilling ethical management in practice, the Company is in compliance with the Company Act, the Securities and Exchange Act, relevant regulations for TWSE/TPEx listed companies, and other legal regulations related to business activities.

(2)The Company's board of directors approved the amendment of the "Code of Ethical Conduct" on August 10, 2022. The Company's board of directors approved the amendment of the "Procedures for Ethical Management and Guidelines for Conduct " on December 17, 2020. The Company's board of directors approved the amendment of the "Regulations Governing Whistle-blowing from Internal and External Parties" on December 22, 2021.