Business Ethics Regulations To implement our ethical corporate management policy and diligently safeguard product quality, customer safety, and health, thereby strengthening an ethical corporate culture and a sustainable operating environment, HLC has formulated the “Procedures for Ethical Management and Guidelines for Conduct” and the “Anti-Bribery and Ethical Corporate Management Best Practice Principles”. These serve as specific guidelines for all our employees, appointees, or those with substantive control, covering prohibitions on offering or receiving improper benefits, unfair competition, illegal political donations, and inappropriate charitable donations or sponsorships. These policies were implemented following approval by the Board of Directors. Additionally, the “Corporate Governance Best Practice Principles” and “Sustainable Development Best Practice Principles” were approved by the Board of Directors on March 26, 2025. In 2025, HLC had no confirmed corruption incidents and no legal actions related to anti-competitive behavior, antitrust, or monopolistic practices. At the practical management level, HLC implements its commitment to business ethics and ethical corporate management in operations through the following mechanisms: Employee fidelity insurance To strengthen corporate operational risk management, fidelity insurance is purchased for key personnel (including sales representatives, service representatives, and technical personnel) to cover potential losses due to unethical conduct. This helps effectively transfer operational risk, reduce financial impact, and protect shareholders’ interests. Code of Conduct (including Anti- Corruption) Communication New hires must sign a “Written Statement on Prohibiting Workplace Sexual Harassment” and an “Employee Statement of Compliance with Company Regulations” upon joining the Company. These documents cover topics, such as insider trading prevention, personal data protection laws, copyright law, confidentiality obligations, and breach of contract responsibilities. Sales representatives are also required to sign a separate “Sales Representative Code of Conduct”, which expressly prohibits improper solicitation of business, the acceptance of improper benefits or remuneration, and other conduct that violates sales ethics. The signing rate reached 100% in 2025. Education and Training on the Code of Conduct (Including Anti-Corruption) The Company continues to provide education and training relating to the Code of Conduct (including anti-corruption). Annual mandatory courses for all employees cover anti-bribery and ethical management, intellectual property laws and regulations, the prevention of insider trading, and zero tolerance for unlawful conduct. Advanced courses are also provided to managers at the deputy section chief level and above, covering non-compete clauses, trade secrets, common forms of trade secret misappropriation, and related risk warnings. This tiered and audience-specific training approach comprehensively strengthens legal compliance awareness and reinforces the foundation of ethical corporate governance. In addition, senior management communicates the Code of Conduct and the principles of ethical management to all employees by email each year. On July 4, 2025, the Company issued the “HLC Employee Code of Conduct,” formally communicated its contents to all employees, and required all employees to complete the related training by December 31, 2025. During the year, the Company also reiterated the requirements of the “Sales Representative Code of Conduct” to all sales representatives in its leasing and used-vehicle distribution businesses. All sales representatives were required to complete the online course on “Zero Tolerance for Unlawful Conduct,” while department heads conducted in-person cascade training during morning and evening meetings. These measures help embed legal compliance into day-to-day business activities and ensure that sales operations are conducted in accordance with applicable laws and regulations.Anti-corruption training was not provided to Board members in 2025; however, the Company has planned relevant training programs for Board members in 2026 to further strengthen ethical governance awareness. Inclusion of ethical corporate management indicators into employee performance evaluations HLC upholds the principle of ethical corporate management and includes it into its corporate culture and management system. To ensure a fair and transparent work environment, HLC explicitly stipulates in its reward and disciplinary management regulations that employees must adhere to principles of integrity to prohibit any bribery, fraud, or other unethical or illegal behaviors. If confirmed through investigation, appropriate disciplinary actions will be taken based on the severity of the offense, including major demerits, job reassignment, or termination, to ensure a fair and transparent operating environment. Incorporation of Integrity Clauses into Supplier Contracts In October 2025, a new “Supplier Code of Conduct and Social Responsibility Commitment” was formulated and included in the contract. This demands that all suppliers fulfill their social responsibilities concerning respect for human rights at work, environmental sustainability, and anti-corruption and ethical corporate management. All existing suppliers and new suppliers are required to complete the sign of this “Supplier Code of Conduct and Social Responsibility Commitment”. In 2025, there were no incidents in which contracts with business partners were terminated or not renewed due to corruption related violations.
Reporting Mechanism If employees have concerns about the Code of Conduct, they can contact the Audit Office, the Risk Management Department of the Customer Service Department, or the Talent Assets Office of the Management Department. For unethical or improper conduct, the Company encourages internal and external personnel to report via the whistleblower email (HLCTRUST@hotaileasing.com.tw), either anonymously or with their identity disclosed. The reporting channels are included in training materials for new hires, and the email information is posted on the Company's internal website for all employees. The Audit Office is the unit for receiving reported cases. Upon formal establishment of a case, the President will appoint a project manager and an investigation team to conduct the investigation. After the investigation is completed, the project manager or investigation team must report to the President based on the investigation results and, depending on the severity of the case, report to the Board of Directors. The investigation report includes the reported case details, investigation process, recommended actions, and subsequent review and improvement measures. To protect whistleblowers’ rights, personnel involved in handling reported matters must provide a written statement to guarantee the confidentiality of whistleblowers’ identity and the content of the report, and pledge to protect whistleblowers from improper treatment due to whistleblowing. Following an investigation, violators will face disciplinary action. In cases involving criminal or illegal activities, legal proceedings will be pursued based on the severity, and compensation for damages will be sought. If a reported case is investigated and found to be true, and it advances the Company's interests and mitigates its risks, or if it provides crucial leads or evidence for a major reported case, the dedicated personnel will report it to the President; then, the Company provides appropriate rewards to the whistleblower or deserving individual(s).
Legal Compliance HLC is committed to legal compliance, to ensure that all operations are in line with the latest regulatory requirements. Each unit is responsible for monitoring regulatory changes according to its duties and announcing them in a timely manner. For example, if there are changes to the Labor Standards Act, the HR Office should review relevant regulations and announce any adjustments to all employees via email.