HLC's Board of Directors serves as the Company's highest governance decision-making body, responsible for the decisions and oversight of major operational policies. In 2024, the board held six meetings with an average attendance rate of 94%. As HLC was still a non-public company in 2024, it had not yet established an audit committee or remuneration committee in accordance with current Company Act. The nomination and appointment of board members are handled in accordance with the Company's Articles of Incorporation and elected by the shareholders' meeting, to ensure the legality and stability of the governance structure. In 2024, a board performance evaluation system had not yet been established. However, the Company will continue to reference relevant laws and regulations and corporate governance practices to plan an appropriate performance evaluation mechanism for both the board as a whole and individual directors, thereby enhancing governance effectiveness and transparency.

In accordance with its Articles of Incorporation, HLC's Board of Directors comprises seven directors and two supervisors, who should be elected by shareholders with legal capacity. Their term of office is three years, and they are eligible for re-election. The Chairman does not concurrently hold any senior management positions, which alignswith the spirit of excellent corporate governance. The current board has elected seven directors and two supervisors, including one female supervisor. All of the Company's directors are successful business professionals. Their academic backgrounds, experience, and professional capabilities are well-aligned with the Company's development direction. Through various information sources, they are able to understand competent authorities’ regulatory requirements.

Board Members’Training

To enhance board members' understanding and decision-making abilities regarding sustainable development, corporate governance, and international business trends, HLC's 2024 director education and training was planned and managed by the Hotai Group. The courses covered diverse topics, such as international political and economic risks, enterprise’s implementation of sexual harassment prevention with case analysis, and macroeconomic situation analysis. Through instruction by professional scholars and experts, these sessions helped directors keep abreast of key issue trends and improve their ability to fulfill their duties. In 2024, three training sessions were held, and directors and supervisors collectively completed 42 hours of training, demonstrating a high regard for their professional governance responsibilities and a commitment to continuous learning.

Conflicts of Interest Management

Regarding the management of conflicts of interest within the highest governance body, HLC has clearly stipulated in its Rules of Procedure for Board of Directors Meetings that any director with a vested interest in a matter, or whose represented legal entity has such an interest, must disclose the important details of their interest at the board meeting. If there is a risk of harming the Company's interests, they must not participate in and must recuse themselves from the discussion or voting. They also cannot act as a proxy for other directors' voting rights, to effectively implement the directors’ conflicts of interest avoidance system.

Director and Senior Manager Remuneration System

In 2024, HLC had not yet established a remuneration committee. Director compensation is handled in accordance with the Company's Articles of Incorporation, which stipulates that the remuneration of the Company's directors shall be determined by the Board of Directors, at a level consistent with industry standards. The remuneration for directors and managers was determined based on the Company's "Salary Regulations" and "Median Salary for Each Job Grade", market remuneration levels, individual responsibilities, performance, and the Company's overall operational conditions, to balance the Company's sustainable development and fair employee treatment.

To strengthen corporate governance and improve the remuneration system for the Company's directors, independent directors, and managers, HLC's "Regulations on Remuneration for Directors, Independent Directors, and Managers" was approved by the Board of Directors in March 2025. When appointing, promoting, or adjusting the salary of managers, the compensation should be determined by considering factors, such as the appointee's job title, job grade, education, experience, professional capabilities, and job responsibilities. This compensation must be approved step-by-step up to the Chairman for consent and then submitted to the remuneration committee for review. Implementation will proceed after approval by the Board of Directors; the same process applies to other rewards or non-cash compensation. Furthermore, the allocation amount for manager remuneration is determined in accordance with the Company's Articles of Incorporation. The remuneration committee reviews their annual performance and proposes a distribution plan. The remuneration is then distributed after a resolution by the Board of Directors and reported to the shareholders' meeting. Other business execution expenses are disbursed according to the “business travel management regulations”. 

Internal Control and Risk Management

To ensure comprehensive oversight of internal control quality, HLC has an independent audit unit under the Board of Directors. This unit is solely responsible for coordinating activities related to the internal control system, including inspecting and evaluating the control status of the internal control system and various management systems. It executes audit operations according to the annual audit plan, conducts special project audits, writes audit reports, and tracks the improvement of audit results. The unit regularly reports audit results annually to the Chairman and the Board .The Head of the Audit Division attends board meetings in a non-voting capacity, thus establishing a top-down culture with full employee participation. In 2024, the Company reviewed the Group's guidelines and amended the Major Risk Table. Furthermore, an external expert was commissioned to optimize the internal control mechanisms to ensure that the risk management framework aligns with actual organizational operations and strengthen internal monitoring and response capabilities, thus enhancing operational stability and governance effectiveness.