The audit committee aims to assist the Board of Directors in fulfilling its supervisory duties on the effectiveness of the internal monitoring mechanism, and is responsible for the tasks entrusted to it by the Company Act, the Securities and Exchange Act and other relevant laws and regulations, and for implementing the quality and integrity of accounting, auditing, financial reporting processes, and financial control. Since 2016, the Company’s Audit Committee is made of all three independent directors, and a committee meeting is held at least once a quarter.
The Audit Committee’s powers and considerations mainly include
- Establishing or amending the internal control system in accordance with the provisions of Article 14-1 of the Securities and Exchange Act.
- Evaluating the effectiveness of the internal control system.
- In accordance with the provisions of Article 36-1 of the Securities and Exchange Act, to stipulate or amend the procedures for acquiring or disposing of assets, engaging in derivatives transactions, making loans to others, endorsing or providing guarantees for others, and procedure for major financial operations.
- Matters involving directors’ own matters of interest.
- Transactions of major assets or derivatives.
- Significant capital loans, endorsements, or guarantees.
- Raising, issuing, or private placement of equity securities.
- Appointment, dismissal, or remuneration of certified public accountants.
- Assessment of qualifications and independence of certified public accountants.
- Appointment and removal of financial, accounting, or internal audit supervisors.
- Financial reports for Q1, Q2 and Q3 and the annual financial reports signed or sealed by the Chairman, managers and Accounting Supervisor.
- Self-evaluation questionnaires for audit committee performance evaluations.
- Other important matters specified by the Company or the competent authority.
Reviews of financial reports
The Board of Directors prepared the Company’s 2023 annual business report, financial statements, and earnings distribution proposals, among which the financial statements were verified by CPAs of EY Taiwan, with a verification report issued. The above-mentioned business reports, financial statements, and profit distribution proposal have been checked by the audit committee and it was found that there are no discrepancies.
Assess the effectiveness of the internal control system
The Audit Committee evaluates the effectiveness of the Company’s internal control system policies and procedures (including control measures such as finance, operation, risk management, information security, outsourcing, compliance with laws and regulations). Furthermore, it reviews the Company’s audit department, certified accountants, and management’s regular reports, including risk management and compliance. With reference to the “Internal Control – Integrated Framework” published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013, the Audit Committee found the Company’s risk management and internal control systems to be effective. The Company has adopted the necessary control mechanisms to monitor and correct violations.
Appointment of a certified public accountant
The audit committee is assigned the responsibility of supervising the independence of the certified public accounting firm to ensure the fairness of the financial statements.
On July 18, 2023, the Company’s Audit Committee and Board of Directors’ meeting reviewed and approved the appointment of CPAs. On the same day, it was assessed that both Lin Su-Wen and Yang Chi-Hui, CPAs of EY Taiwan, met the independence evaluation standards and were qualified to serve as the Company’s CPAs for financial and tax matters.
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The functions of the Company’s Compensation Committee are based on the attention of good managers, evaluating the remuneration policies and systems of directors, independent directors and managers of the Company, and meeting at least twice a year. Furthermore, it may hold meetings at any time as needed to make recommendations to the Board of Directors for its decision-making reference.
The powers of the Company’s Compensation Committee
- Periodically review the Compensation Committee Charter and propose amendments.
- Formulate and regularly review the Company’s directors, independent directors and managers’ annual and long-term performance targets and remuneration policies, systems, standards, and structures.
- Regularly evaluate the achievement of the performance targets of the directors, independent directors, and managers of the Company, and evaluate and set the content and amounts of their individual salaries.
When performing the official powers, the Compensation Committee shall follow the principles listed below:
- Ensuring that the remuneration arrangements of the Company comply with applicable laws and regulations and are sufficient to recruit outstanding talent.
- The performance evaluation and remuneration of directors, independent directors and managers should refer to the usual level of payment in the industry. It also considers the time invested by the individual, the responsibilities assumed by the individual, the status of achieving personal goals, the performance of other positions, and the salary remuneration given by the Company to those in the same position in recent years. It also evaluates the rationality of the relationship between individual performance and the Company’s operating performance and future risks through the achievement of the Company’s short-term and long-term business goals and the Company’s financial status.
- Directors and managers should not be guided to engage in behaviors that exceed the Company’s risk appetite in pursuit of remuneration.
- The ratio of dividends to the short-term performance of directors and managers and the payment time of part of the variable salary shall be determined in consideration of the characteristics of the industry and the nature of the Company’s business.
- Members of this committee shall not participate in discussion and voting on their personal salary and remuneration decisions.
The salary and remuneration mentioned in the preceding two paragraphs include cash remuneration, stock options, dividends, retirement benefits or severance payments, various allowances and other measures with substantial incentives. Its scope should be consistent with the remuneration of directors, independent directors and managers in the Regulations Governing Information to be Published in Annual Reports of Public Companies.
If the remuneration of directors and managers of a subsidiary of the Company is subject to the approval of the Company’s Board of Directors according to the subsidiary’s hierarchical responsibility, the Board of Directors shall make recommendations before submitting it to the board for discussion.
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The Company’s “CSR Committee” was renamed “ESG Committee” in March 2022. The Chairman is the chairman of the “ESG Committee”. The other committee members are jointly served by the general manager and first-level supervisors. The Company’s asset manager serves as the head of the responsible office, which is divided into four main groups. Senior executives in different fields serve as convener. They follow the policies formulated by the “ESG Committee” to develop the corresponding projects, supervise and manage the goals, results, commitments, and plans of sustainable operation and social responsibility, fulfill long-term commitments with stakeholders, and disclose information regarding sustainable development to the public.
The Responsibility Office is responsible for coordinating and implementing the relevant ESG strategic goals, plans and actions, convening regular meetings to assist the committee in ensuring that all commitments are fulfilled on time The Responsibility Office also grasps the information communicated with relevant stakeholders by various groups and departments, and regularly discloses the work results. The Responsibility Office is divided into four major groups: “Corporate Governance”, “Health and Safety”, “Environmental Sustainability”, and “Corporate Commitment”. Regular management meetings are held through the Responsibility Office to discuss the status of each department’s work, and regular reports to the ESG Committee for guidance. All implementation plans must be approved by the members of the Committee.
In 2023, the “ESG Development” reported 3 times to the Board of Directors,including stakeholder identification, carbon inventory plan and results
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