Committees
Audit committee
| After the Company's election of Directors in the shareholders' meeting on July 30th, 2021; the original supervisory system was replaced by the Audit Committee. The Audit Committee is composed of all independent directors and has a total of four members. They meet at least once every quarter and can be convened at any time as necessary. Members’ professional qualifications and experience are as follows: | |||||
| Members | Professional qualification and experience |
|---|---|
| Li Wen-Chang | The person has the Bachelor degree of Business Administration from Tamsui Institute of Business Administration and the degree from the 1st class of the Corporate Manager Training Course of the Department of Business Administration of Sun Yat-sen University. He has been working for Chen Chi Electro-Chemical Co., Ltd. since August 1969 and is still working for the company, serving as the Chairman of the board. He has more than 40 years of work experience in business, finance, and accounting. |
| Cai Wen-Zhi | The person has the Bachelor degree of Industrial Engineering from Tunghai University. He had ever served as a manager in the operation management section of ADLIND Technology Inc. and had experienced important positions in many other companies, and now serves as the manager in QC division of DYNAHZ Technology Corporation. He has worked in the areas of commerce and otherwise necessary for the business of the company for over 30 years. |
| Wu Yu-Ti (Note) | The person graduated from the Accounting and Statistics department of the International School of Commerce. She has served as an assistant specialist in the Kaohsiung Branch of Taiwan Business Bank for 17 years and the accounting manager at Hong Te Sheng CO., LTD. for almost 8 years. She has worked in the areas of commerce, finance, accounting, and otherwise necessary for the business of the company for over 20 years. |
| Yang Fu-Hsuan | The person graduated from the Accounting and Statistics department of the International School of Commerce and has worked for SINO-JAPAN Electric Heater Co., LTD since July, 1986, and now has been serving as the assistant manager in the finance division of the same company. She has worked in the areas of commerce, finance, accounting, and otherwise necessary for the business of the company for over 30 years. |
2024 Audit Committee members and operations
| The Audit Committee is composed of four independent directors of the company. The Audit Committee held 6 meetings (A) in 2023. |
| Title | Name | Attendance Count (B) | Proxy Attendance Count | Actual Attendance rate % (B/A) | Note |
|---|---|---|---|---|---|
| Convener | Hsu, Fang-Yih | 3 | - | 100.00 | Should attend 3 times. Stepped down on June 28th, 2024. |
| Committee member | Li Wen-Chang | 3 | - | 100.00 | Should attend 3 times. Took office on June 28th, 2024. |
| Convener | Cai, Wen-Zhi | 6 | - | 100.00 | Elected Convener on June 28th, 2024. |
| Committee member | Wu Yu-Ti | 6 | - | 100.00 | - |
| Committee member | Yang, Fu-Hsuan | 6 | - | 100.00 | - |
| Audit Committee members are tasked with the following duties: | |
| I. | Stipulation and amendment of internal control system in accordance with Article 14-1 of the Securities and Exchange Act. |
| II. | Assessment of internal control system effectiveness. |
| II. | Stipulation or amendment of the Procedures for the Acquisition and Disposal of Assets, Derivative Trading or External Party Lending, Endorsement and Guarantee in accordance with Article 36-1 of the Securities and Exchange Act. |
| IV. | Matters involving the personal interests of directors. |
| V. | Major asset or derivative trading. |
| VI. | Major lending, endorsement or guarantee. |
| VII. | Public offering, issuance, or private offering of equity securities. |
| VIII. | Appointment, discharge, and remuneration of certified public accountants. |
| IX. | Appointment and removal of chief officers of finance, accounting, and internal audit. |
| X. | Annual financial reports which are signed or sealed by the chairperson, managers, and accounting officer, and second quarter financial reports that must be audited and attested by a CPA. |
| XI. | Annual business reports and profit distribution tables or loss apportionment tables |
| XII. | Other significant matters stipulated by the Company or competent authorities. |
| ■ Reviewing financial reports | |
| The board of directors prepared the company's 2023 business report, financial statements and earnings distribution proposal, among which the financial statements were audited and completed by Deloitte & Touche and an audit report was issued. The above-mentioned operating report, financial statements and earnings distribution proposal have been reviewed by the Audit Committee and are considered to be consistent with each other. | |
| ■ Evaluating the effectiveness of internal control systems | |
| The Audit Committee evaluates the effectiveness of the company's internal control system policies and procedures (including financial, operational, risk management, information security, legal compliance and other control measures), and reviews the company's audit department and certified accountants, as well as regular reports from management, including risk management and legal compliance. The Audit Committee believes that the company's risk management and internal control systems are effective and that the company has adopted necessary control mechanisms to monitor and correct violations. | |
| ■ Appointing certified accountant | |
| The Audit Committee is entrusted with the responsibility of supervising the independence of the certified public accounting firm to ensure the fairness of the financial statements. Generally speaking, except for tax-related services or specially approved projects, certified accounting firms are not allowed to provide other services to the company. All services provided by certified accountant must be approved by the Audit Committee.
In order to ensure the independence of the certified accounting firm, the Audit Committee has formulated an independence assessment form with reference to Article 47 of the Certified Public Accountant Act and the Accountant Professional Ethics Bulletin No. 10 "Integrity, Fairness, Objectivity and Independence" to evaluate the independence, professionalism, and competency of the accountant. The assessment looks at whether the accountant has relatives working at the company, has business or financial interests with the company, etc. On May 7, 2024, in the 18th meeting of the 1st Audit Committee and the 19th meeting of the 14th Board of Directors reviewed and approved that Accountants Chen Chen-Li and Chang Tzu-Yuan of Deloitte & Touche met the independence assessment standards and were qualified to serve as the Company's Finance and Tax certified accountant. | |
The operation of the Company’s audit committee in 2024:
| Date | Discussion | Resolution & Result | The Company's action to the Audit Committee's opinions |
|---|---|---|---|
| The 16th session of the first Audit Committee 01/10/2024 |
1.2024 annual financial budget 2.Revise the "Subsidiary Management Measures". 3.Formulate the "Organizational Rules of the Nomination Committee". 4.Deloitte & Touche was appointed to provide Non-assurance Services in 2024. |
All members of the Audit Committee agreed to adopt. | All attended directors agreed to adopt. |
| The 17th session of the first Audit Committee 02/22/2024 |
1.Business report, individual financial report and consolidated financial report for 2023 2.2023 Profit Distribution Proposal 3.Prepare internal control statement for 2023 4.Change accountant |
All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| The 18th session of the first Audit Committee 05/07/2024 | 1.2024 Certified Public Accountant’s independence and competency assessment and public expenses 2.Consolidated Financial Report for the First Quarter of 2024 |
All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| The 1st session of the 2nd Audit Committee 06/28/2024 | Recommend Convener. | All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| The 2nd session of the 2nd Audit Committee 08/06/2024 | 1. Consolidated Financial Report for the Second Quarter of 2024 2. Apply for a credit line from Chang Hwa Commercial Bank, Ltd |
All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| The 3rd session of the 2nd Audit Committee 11/06/2024 | 1.Consolidated financial report for the third quarter of 2024. 2.Revise the "Internal Control System" and "Internal Audit System". 3.Formulated an annual internal audit plan for 2025. 4.Revise certain provisions of the 'Internal Major Information Processing Procedures.' |
All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
Communication between the company’s independent directors and internal audit manager
1. The head of internal audit attends the audit committee meeting to report
| (1) | The annual internal audit plan. |
| (2) | The execution of internal audit activities. |
2. The accountant must attend the audit committee at least once a year to report the annual audit results.
3. Other matters: In the case of significant anomalies, or when the independent directors, audit head, or accountant deem it necessary for independent communication, meetings may be called at any time on an irregular basis.
Communication between the independent directors, accountants, and the internal audit manager in 2024:
| Date | Attendees | Items | Results |
|---|---|---|---|
| 2024/1/10 Audit Committee | Independent Director Hsu, Fang-Yih Cai, Wen-Zhi Wu Yu-Ti Yang Fu-Hsuan Accountant Chen Chen-Li | 1. 2023 Audit business execution results report from October to November. | None of the independent directors had objections. |
| 2024/02/22 Audit Committee | Independent Director Hsu, Fang-Yih Cai, Wen-Zhi Wu Yu-Ti Yang Fu-Hsuan Accountant Chen Chen-Li | 1. Audited business execution results report in December 2023. 2. Draft the 2023 Internal Control Statement. | None of the independent directors had objections. |
| 2024/05/07 Audit Committee | Independent Director Hsu, Fang-Yih Cai, Wen-Zhi Wu Yu-Ti Yang Fu-Hsuan Accountant Chen Chen-Li | Audited business execution results report from April to May 2024. | None of the independent directors had objections. |
| 2024/06/28 Audit Committee | Independent Director Li Wen-Chang Cai, Wen-Zhi Wu Yu-Ti Yang Fu-Hsuan Accountant Chen Chen-Li | Audited business execution results report from April to May 2024 | None of the independent directors had objections. |
| 2024/08/06 Audit Committee | Independent Director Li Wen-Chang Cai, Wen-Zhi Wu Yu-Ti Yang Fu-Hsuan Accountant Chen Chen-Li | 1. Audited business execution results report in June 2024. | None of the independent directors had objections. |
| 2024/11/06 Audit Committee | Independent Director Li Wen-Chang Cai, Wen-Zhi Wu Yu-Ti Yang Fu-Hsuan | 1. Audited business execution results report in July to September 2024. 2. Formulate the annual internal audit plan for 2025. | None of the independent directors had objections. |
Communication between the company’s independent directors and accountants
1. Communication between the independent directors and accountants
| The accountants shall report to the independent directors at least twice a year on the audit status of the company's financial status, etc., and shall fully communicate whether there are any major journal entries or legal amendments that affect the accounting situation. |
2. Summary of previous communications between independent directors and accountants:：
| Date | Items | Results |
|---|---|---|
| 2024/08/06 Audit Committee | Discussion related to the consolidated financial report for the second quarter of 2024. | None of the independent directors had objections. |
| 2024/02/22 Audit Committee | 1. Accountant reported to independent directors on the scope, methods, conclusions and reporting types of the audit. 2. Discussion related to the consolidated financial report and individual financial report of 2023. | None of the independent directors had objections. |
| 2024/01/10 Audit Committee | 1. Accountant reported to the independent directors on the scope and methods of the audit, the scope of the group audit, the assessment of fraud matters, the identification of significant risks and key audit matters. 2. Accountant's Statement of Independence 3. Corporate governance department pre-approved 2024 Non-assurance Services. 4. 2023 Transparency Report 5. 2022 Audit Quality Index (AQI) Report | None of the independent directors had objections. |
