Strengthening Ethical & Compliance Management

Ⅰ. Governance

Decision-making Structure

Hanmi Pharmaceutical operates a compliance team dedicated to the practical operation of its compliance program, along with a Compliance Officer appointed with the approval of the Board of Directors (Audit Committee), to strengthen ethical and compliance management and establish a fair and transparent corporate culture. The Audit Committee, a committee within the Board of Directors, acts as an internal audit body, continuously overseeing CP operations and the internal accounting system to ensure sound management and maintain social trust. To support the Audit Committee's efficient audit performance, the compliance team carries out tasks such as regular audits, ad-hoc audits, special audits, and CP operations for the company, and regularly reports the results to the Audit Committee.

Ethical & Compliance Management Committee

Roles and Responsibilities

Ethics and Compliance Management Professionalism Enhancement Training

To strengthen expertise in ethical and compliance management, Hanmi Pharmaceutical provides education to its CEO, executives of key departments, and members of the CP Management Committee on fair trade-related laws and regulations, latest trends, CP monitoring results, and case studies. Additionally, to enhance the expertise of members of the dedicated CP department (Compliance Team), the company continuously offers educational opportunities through external specialized institutions.

II. Strategy_Identification of Risks and Opportunities

Based on the analysis results from internal and external experts (IRO), Hanmi Pharmaceutical identifies major risks and opportunities that could significantly impact stakeholders and sustainability related to strengthening ethical and compliance management, and continuously strives to establish effective response strategies based on these findings.

Ⅱ. Strategy_Risk and Opportunity Response Plan

Compliance Management System

Hanmi Pharmaceutical's Compliance Team aims for all employees to uphold ethical management as their top priority within a fair and transparent company, contributing to sustainable growth and the leap towards becoming a global enterprise. To achieve this, Hanmi Pharmaceutical has established and published its Code of Ethics on its website, making it easily accessible to employees, and is further strengthening the foundation of compliance management by having them sign various pledges.

In addition to its Code of Ethics, Hanmi Pharmaceutical strives to enhance company-wide ethical and compliance management awareness by implementing the following policies for all executives and employees.

The Fair Trade Compliance Handbook includes various cases and Q&As related to legal compliance, and is structured to effectively respond to various risks that may arise during the course of business.

Hanmi Pharm's Compliance Policy

Hanmi Pharm's 2025 Fair Trade
Compliance Handbook

Operation of Fair Trade Compliance Program

Hanmi Pharmaceutical establishes systematic plans for the effective operation of its CP, identifying areas for improvement derived from internal and external audits, including effectiveness evaluations. It develops strategies to swiftly respond to changes in laws and regulations, promotes compliance education, and analyzes risks through an internal control system. In 2007, Hanmi Pharmaceutical became the first in the pharmaceutical industry to voluntarily introduce and operate a compliance system, the Fair Trade Compliance Program (CP), to ensure companies adhere to fair trade laws. It meets all 8 key CP implementation standards required by the 'Regulations on CP Operation and Incentive Provision' and annually reviews and improves the program to enhance the level of ethical and compliance management.

Internal Accounting Control System

Hanmi Pharmaceutical effectively manages financial reporting risks by designing and operating internal control regulations for each business process to provide reasonable assurance that the company's financial statements are prepared and disclosed accurately and reliably. The internal accounting control system has been strengthened and operated since January 2020, and the CEO and the Chairman of the Audit Committee attend board meetings and regular general meetings of shareholders to report on the operational status of the internal accounting control system in accordance with internal accounting control regulations. Furthermore, the company prepares and discloses operational status reports and evaluation reports for the internal accounting control system, attaching them to the business report along with the auditor's opinion. Based on the ‘Conceptual Framework for the Design and Operation of Internal Accounting Control System’ in 2025, the internal accounting control system was assessed and deemed to be effectively designed and operated from a materiality perspective. The Audit Committee, upon receiving this report, also made the same judgment, and the external auditor also expressed an ‘unqualified opinion’.

Hanmi Pharmaceutical operates its internal accounting control system, aiming to enhance the reliability and transparency of information provided to users and prevent fraud and errors, classifying it into Entity Level Control (ELC), Process Level Control (PLC) and IT General Control (ITGC).
Furthermore, the dedicated internal accounting department maintains a Risk Control Matrix (RCM) which systematically describes procedures for identifying potential risks and evaluating control activities for each area, and conducts change management, risk assessment, design evaluation, and operational evaluation every fiscal year. Through regular identification of deficiencies and improvement processes, internal accounting control risks are effectively managed.

Self-Compliance Day

Hanmi Pharmaceutical designates April 1st of each year as ‘Self-Compliance Day’ to commemorate Fair Trade Day and strives to spread a culture of ethical and compliance management throughout the company. In 2025, a total of 2,854 executives and employees participated in the compliance pledge ceremony on ‘Self-Compliance Day’, and an ethical management promotional video containing the ‘3A Principles’ of employee code of conduct was produced and distributed to raise employee awareness. Additionally, 842 employees participated in the <CP O/X Quiz> event, which served to further enhance employees' interest in and understanding of compliance.

Compliance Pledge *Total of 2,854 participants	Distribution of Ethics Management Promotional Video	CEO's Message	'CP OX Quiz' Event *Total 842 participants

Fair Trade for Shared Growth with Partners

Hanmi Pharmaceutical operates a 'Business Partner Compliance' website to support the ethical and compliance management of its partners, publishing self-compliance handbooks, compliance policies, and quarterly newsletters. Furthermore, unethical conduct or legal violations can be reported at any time through the 'Report' function on the website. In 2025, the company introduced a fair trade agreement performance evaluation system, signed fair trade agreements with partners, and conducted compliance training. This enhances understanding of fair trade-related laws and regulations and contributes to establishing a culture of mutual cooperation throughout transactions with partners.

Hanmi Pharmaceutical Business Partner Compliance	Signing Ceremony for Fair Trade Agreements with Partners

Compliance Training

Hanmi Pharmaceutical continuously enhances its compliance training programs every year. The company conducts monthly regular training for employees of the domestic sales division (sales, marketing), as well as customized training considering job level, years of service, and region, and supplementary training for those who have faced HR sanctions, missed regular training, or scored low on the CP TEST. Furthermore, emphasizing the necessity and importance of ethical and compliance management, training is conducted at all stages across the entire enterprise, targeting representatives and practical staff of affiliates, subsidiaries, and partners.

CP Rating and Major Awards

Maintaining CP Rating 'AAA' for 7 Consecutive Years

Hanmi Pharmaceutical first participated in the Fair Trade Commission's CP rating evaluation in 2013, and since then, has achieved the highest rating of 'AAA' in 2020, 2022, 2023, and 2025, becoming the first domestic company to maintain the highest rating for seven consecutive years.
The CP rating evaluation system comprehensively assesses the overall operational performance of companies that have adopted and operated the Fair Trade Compliance Program (CP) for more than one year, assigns ratings, and provides incentives to outstanding companies, thereby promoting the effective operation of CP. Furthermore, Hanmi Pharmaceutical has been recognized for its contribution to spreading a CP culture as an exemplary company in ethical management based on fair trade and mutual growth, receiving numerous commendations from government agencies. Moving forward, Hanmi Pharmaceutical will continue to strive for the establishment of a compliance culture and the fulfillment of social responsibilities based on transparent and fair management.  

Year	Rating	Applicable Period
2013	BBB	2014.01.01. ~ 2014.12.31.
2014	A	2015.01.01. ~ 2015.12.31.
2015, 17, 19	AA	2016.01.01 ~ 2020.12.31.
2020, 22, 23, 25	AAA	2021.01.01 ~ 2027.12.31

Reporting and Handling of Internal and External Violations

Hanmi Pharmaceutical operates an internal reporting system, K-Whistle, accessible without restriction to all stakeholders, including employees. This system allows for the early detection of violations of critical regulations in the pharmaceutical and bio-industry, such as the Pharmaceutical Affairs Act, Fair Competition Rules, Fair Trade Act, and internal CP operating standards. All received reports are directly verified by the compliance manager and reported to the CEO when necessary.
Through continuous education and promotional activities, Hanmi Pharmaceutical actively promotes channels like Report (K-Whistle) on CES (internal intranet), the K-Whistle website, and QR codes (employee ID cards, posters, quarterly newsletters) , and others, as reporting channels. Separate regulations and guidelines have been established to protect the confidentiality of internal whistleblowers, ensuring fair and independent handling of reports.

Internal Reporting Channels

Internal Reporting Process

Voluntary Reporting of Receipt of Gifts and Entertainment

Hanmi Pharmaceutical prohibits the receipt of money, entertainment, or other similar benefits (hereinafter referred to as 'gifts, etc.') from individuals with whom there is a causal relationship with work, and operates a system for voluntary reporting in case of violation. If an individual who has received gifts, etc. voluntarily reports the fact, sanctions for the violation may be reduced or waived. An individual who has received gifts, etc. must immediately return the received items, and if return is not possible, they must follow the procedures outlined in the 'Operating Guidelines for Voluntary Reporting of Receipt of Gifts and Entertainment.' Subsequently, the compliance officer informs the gift provider of the facts related to the processing procedures for such gifts, etc. to prevent recurrence.
This system is a measure to eradicate implicit and customary work-related solicitations and to clearly communicate Hanmi Pharmaceutical's commitment to self-compliance not only to its employees but also to providers (suppliers or other stakeholders, etc.).

Voluntary Reporting Process for Receipt of Gifts and Entertainment

Sanctions and Incentives for Employees Regarding Fair Trade Regulations

Hanmi Pharmaceutical implements fair and consistent disciplinary measures for employees who violate fair trade-related laws and internal CP regulations, in accordance with its 'Rules of Employment' and 'Guidelines for Employee Sanctions and Rewards.' By identifying violations through various channels such as monitoring, audits, and internal reporting, and combining appropriate personnel sanctions with education, we continuously carry out preventive activities to prevent recurrence. Employee disciplinary procedures are carried out according to the Talent Committee's disciplinary process, and all disciplinary matters are documented. However, for minor violations that can be immediately improved, corrective and preventive measures (e.g., education) are prioritized. Furthermore, Hanmi Pharmaceutical implements various programs, such as providing incentives for excellent performers and operating CP events, to encourage employees' participation in ethical management, compliance management, and their commitment to self-compliance.

<Talent Committee Process>

<Personnel Sanctions and Incentives>

III. Risk Management

Hanmi Pharmaceutical integrates its risk and opportunity management process related to ethical management and compliance management with its Enterprise Risk Management (ERM) system. By doing so, the company effectively manages overall corporate risks, maximizes potential opportunities, and fosters sustainable growth.

Ⅳ. Indicators and Targets

Hanmi Pharmaceutical maintains ISO 37301 (Compliance Management System) and ISO 37001 (Anti-bribery Management System) certifications, using these as a foundation to advance its ethical and compliance management standards. To internalize compliance awareness among executives and employees, we are increasing the frequency of training and scoring and analyzing CP monitoring results, reflecting the specific characteristics of the pharmaceutical industry. Key inspection items specifically include the prohibition of unfair customer inducements (rebates) under fair trade-related laws and regulations.
Furthermore, we measure the practical impact of training and monitoring through effectiveness evaluations, using these results to identify improvement tasks and set objectives. These efforts lead to enhanced corporate competitiveness and increased external trust.