Internal Audit

Corporate Governance

Internal Audit Organization

The company's internal audit function is an independent unit that reports directly to the Board of Directors. In addition to reporting at the regular board meetings, the internal audit team also reports to the Chairman and independent directors on a monthly basis or as needed. The audit team attends the company’s regular board meetings and provides audit reports.
In accordance with Article 11 of the "Regulations Governing Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as “the Regulations”), issued by the Securities and Futures Bureau of the Financial Supervisory Commission (FSC), Executive Yuan, the company has established an Audit Center under the Board of Directors. The organizational structure of the Audit Center is as follows:

Objectives of Internal Audit

The primary objective of internal audit is to assist the Board of Directors and management in reviewing and evaluating deficiencies in the internal control system and to assess operational effectiveness and efficiency. The audit function also provides timely recommendations for improvements to ensure the continuous and effective implementation of internal controls and to serve as a basis for reviewing and revising the internal control system.
Audit activities are conducted based on an annual audit plan, which is developed according to identified risks and approved by the Board of Directors. The audit process provides management with insights into the operation of internal controls and serves as an alternative channel for identifying existing or potential deficiencies.

Internal Audit Procedures

A、Internal audit procedures include cyclical audits as well as mandatory monthly, quarterly, or annual audits as required by laws and regulations, and incorporated into the annual audit plan upon approval by the Board of Directors.

B、The audit is carried out in strict accordance with the annual audit plan schedule, examining both internal and external company operations and preparing audit reports. Any deficiencies or irregularities identified during the audit must be truthfully disclosed in the report. After the report is submitted for approval, follow-up actions are taken to ensure that the audited unit has promptly implemented appropriate corrective measures.

C、During regular board meetings, the execution status of audit reports is reviewed. Any deficiencies or irregularities are followed up on, and the progress of corrective actions is reported to the Board of Directors.

D、The execution status of the previous year’s audit plan shall be reported by the end of February each year.

Audit Frequency

Audit Frequency	Description	Content
At least once a year	Based on the Regulations	Information security inspection, management of the Remuneration Committee's operations, management of the Audit Committee's operations, management of the Board of Directors' operations, acquisition or disposal of assets, management of the financial statement preparation process, supervision and management of subsidiaries, management of related party transactions, and compliance with laws and regulations.
	Independently included	Budget management, personal data protection management, management of liabilities, commitments, and contingencies, asset management, shareholder services management, financial and non-financial information management, execution of job authorization and proxy systems, seal usage management, and check issuance management.
	Based on company operations	Research and development cycle, real estate, plant, and equipment cycle, investment cycle, payroll cycle, financing cycle, production cycle, procurement and payment cycle, sales and collection cycle, and computerized information system processing.
At least once a quarter	Based on the Regulations	Endorsements, guarantees, and loans to others
At least once a month	Based on the Regulations	Derivative financial instruments

Internal control self-inspection procedures

In accordance with the Regulations, the company conducts at least one self-assessment per year. The Audit Center reviews self-assessment reports from each department and subsidiary, along with improvements made to internal control deficiencies and irregularities identified by the Audit Center. These serve as the primary basis for the Board of Directors and the President in assessing the overall effectiveness of the internal control system and issuing the Internal Control System Statement.

Legal Compliance

Upholding the principle of sustainable operations, all departments must strictly comply with laws and regulations when carrying out their duties and adhere to the company's established code of ethical conduct. Department heads continuously monitor and collect regulatory updates relevant to their respective departments and disseminate such information through regular meetings. To enhance employees' legal awareness, the company will conduct a series of lectures and training sessions focusing on corporate governance, labor rights, environmental protection, safe production, occupational health, and social responsibility. The company will continuously ensure compliance with regulations related to its operations, update relevant documents, and carry out risk management and regulatory enforcement.