Committees
Audit committee
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 |
|---|---|
| Hsu Fang-Yih | The person has the Bachelor degree of Accounting from National Chung Hsing University and Executive MBA from National Sun Yat-Sen University. He had ever served as a senior manager in Deloitte Taiwan, and now serves as a supervisor of accounting unit in university. As a licensed CPA in Taiwan, he has worked in the areas of commerce, finance, accounting, and otherwise necessary for the business of the company for over 20 years. |
| 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 20 years. |
| Wu Yu-Ti (Note) | The person graduated from the Accounting and Statistics department of the International School of Commerce and had ever served as an assistant specialist in the Kaohsiung Branch of Taiwan Business Bank for 17 years. She has worked in the areas of commerce, finance, accounting, and otherwise necessary for the business of the company for over 15 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 20 years. |
2023 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 | 6 | - | 100.00 | - |
| Committee member | Cai, Wen-Zhi | 6 | - | 100.00 | - |
| 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 2022 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 5, 2023, in the 12th meeting of the 1st Audit Committee and the 13th meeting of the 14th Board of Directors reviewed and approved that Accountants Chia-Ling Chiang and Chen-Li Chen 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 2023:
| Date | Discussion | Resolution & Result | The Company's action to the Audit Committee's opinions |
|---|---|---|---|
| 10th meeting of the 1st Audit Committee 2023/01/10 |
2023 Annual Financial Budget. | All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| 11th meeting of the 1st Audit Committee 2023/02/24 |
1. 2022 business report, individual financial report and consolidated financial report. 2. 2022 annual surplus distribution case. 3. Amended some provisions of the "Procedures for Acquiring or Disposing of Assets". 4. Prepare an internal control statement for 2022. 5. In 2023, Deloitte & Touche was appointed to provide non-confidential services. |
All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| 12th meeting of the 1st Audit Committee 2023/05/05 |
1. 2023 Annual certified accountant’s independence assessment and public expense. 2. Consolidated financial report for the first quarter of 2023. |
All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| 13th meeting of the 1st Audit Committee 2023/06/28 |
1. Revised the "Corporate Governance Best Practice Principles". 2. Formulated working standards related to financial transactions between related parties. |
All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| 14th meeting of the 1st Audit Committee 2023/08/04 |
1. Consolidated financial report for the second quarter of 2023. 2. Applied for a credit line from Chang Hwa Commercial Bank, Ltd. 3. Lifted the President’s non-competition restriction case. |
All members of the Audit Committee agreed to adopt it. | All attended directors agreed to adopt. |
| 15th meeting of the 1st Audit Committee 2023/11/06 |
1. Consolidated financial report for the third quarter of 2023. 2. Revised the "Internal Control System" and "Internal Audit System". 3. Formulated an annual internal audit plan for 2024. |
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. Communication between the company’s independent directors and internal audit manager
| (1) | In addition to attending the Audit Committee and the Board of Directors’ meetings to report audit execution results, the company's audit manager also sends audit (tracking) reports to independent directors for review on a monthly basis, and independent directors can respond by phone or email. |
| (2) | The company has established an audit committee on July 30, 2021. |
2. Summary of previous communications between independent directors and internal audit supervisor:
| Date | Items | Results |
|---|---|---|
| 2023/11/06 Audit Committee and Board of Directors’ meeting | 1. 2023 Audit business execution results report from July to September. 2. Formulated the annual internal audit plan for 2024. | None of the independent directors had objections. |
| 2023/08/04 Audit Committee and Board of Directors’ meeting | Audited business execution results report in June 2023. | None of the independent directors had objections. |
| 2023/06/28 Audit Committee and Board of Directors’ meeting | Audited business execution results report from April to May 2023. | None of the independent directors had objections. |
| 2023/05/05 Audit Committee and Board of Directors’ meeting | Audited business execution results report from February to March 2023. | None of the independent directors had objections. |
| 2023/02/24 Audit Committee and Board of Directors’ meeting | 1. Audited business execution results report in January 2023. 2. Prepared an internal control statement for 2022. | None of the independent directors had objections. |
| 2023/01/10 Audit Committee and Board of Directors’ meeting | Audited business execution results report in December 2022. | None of the independent directors had objections. |
| 2022/12/16 Audit Committee and Board of Directors’ meeting | Audited business execution results report from October to November 2022. | None of the independent directors had objections. |
| 2022/11/04 Audit Committee and Board of Directors’ meeting | 1. Audited business execution results report from July to September 2022. 2. Formulated the annual internal audit plan for 2023. | None of the independent directors had objections. |
| 2022/08/05 Board of Directors’ meeting | Audited business execution results report in June 2022. | None of the independent directors had objections. |
| 2022/08/05 Audit Committee’s meeting | Audited business execution results report from April to June 2022. | None of the independent directors had objections. |
| 2022/06/29 Board of Directors’ meeting | Audited business execution results report from April to May 2022. | None of the independent directors had objections. |
| 2022/05/06 Audit Committee and Board of Directors’ meeting | Audited business execution results report from January to March 2022. | None of the independent directors had objections. |
| 2022/02/25 Audit Committee and Board of Directors’ meeting | 1. Audited business execution results report in December 2021. 2. Prepared an internal control statement for 2021. | None of the independent directors had objections. |
| 2022/01/10 Audit Committee and Board of Directors’ meeting | Audited business execution results report from October to November 2021. | None of the independent directors had objections. |
| 2021/11/05 Audit Committee and Board of Directors’ meeting | 1. Audited business execution results report for the third quarter of 2021. 2. Formulated the annual internal audit plan for 2022. | None of the independent directors had objections. |
| 2021/08/06 Audit Committee and Board of Directors’ meeting | Audited business execution results report for the first half of 2021. | None of the independent directors had objections. |
| 2021/07/13 Board of Directors’ meeting | Audited business execution results report from April to May 2021. | None of the independent directors had objections. |
| 2021/05/07 Board of Directors’ meeting | Audited business execution results report for the first quarter of 2021. | None of the independent directors had objections. |
| 2021/02/26 Board of Directors’ meeting | 1. Audited business execution results report in December 2020. 2. 2020 Improvement report on internal control system deficiencies and abnormal matters. 3. Report on improvements in the preparation of financial statements. | None of the independent directors had objections. |
| 2021/01/08 Board of Directors’ meeting | 1. Audited business execution results report from October to November 2020. 2. Reported the adjustments and improvements that should be made in the preparation of financial statements. | 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 |
|---|---|---|
| 2023/08/04 Audit Committee’ meeting | Discussion related to the consolidated financial report for the second quarter of 2023. | None of the independent directors had objections. |
| 2023/02/24 Audit Committee’ meeting | 1. Accountant reported to independent directors on the scope, methods, conclusions and report types of the audit. 2. 2022 Discussion related to the annual consolidated financial report and individual financial report. | None of the independent directors had objections. |
| 2023/01/10 Audit Committee’ meeting | 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 | None of the independent directors had objections. |
| 2022/08/05 Audit Committee’ meeting | Discussion related to the consolidated financial report for the second quarter of 2022. | None of the independent directors had objections. |
| 2022/02/25 Audit Committee’ meeting | 1. Accountant reported to the independent directors on the audit method, scope and reporting type. 2. 2021 Discussion related to the annual consolidated financial report and individual financial report. | None of the independent directors had objections. |
| 2022/01/10 Audit Committee’ meeting | 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. Explain "Corporate Governance 3.0: Sustainable Development Blueprint" to independent directors. | None of the independent directors had objections. |
| 2021/08/07 Audit Committee’ meeting | Explanation on Audit Committee’s Operation and Practices | None of the independent directors had objections. |
| 2021/01/08 Before Board of Directors’ meeting | 1. Accountant reported to the independent directors on the audit scope and methods, group audit scope, fraud assessment, identification of significant risks and key audit matters. 2. Accountant’s statement of independence 3. Explain "Corporate Governance 3.0: Sustainable Development Blueprint" to independent directors. | None of the independent directors had objections. |
