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  The audit committee aims to assist the Board of Directors in fulfilling its supervisory duties 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. The committee is composed of all three independent directors. Independent director Wu Chieh-Hsin serves as the convener, and the committee is held at least once a quarter.

  1. The audit committee’s powers and considerations mainly include:

(1) Establishing or amending the internal control system in accordance with the provisions of Article 14-1 of the Securities and Exchange Act.

(2) Evaluation of the effectiveness of the internal control system.

(3) 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.

(4) Matters involving directors’ own matters of interest.

(5) Transactions of major assets or derivatives.

(6) Significant capital loans, endorsements, or guarantees.

(7) Raising, issuing, or private placement of equity securities.

(8) Appointment, dismissal, or remuneration of certified public accountants.

(9) Assessment of qualifications and independence of certified public accountants.

(9) Appointment and removal of financial, accounting, or internal audit supervisors.

(10) Financial reports for Q1, Q2 and Q3 and the annual financial reports signed or sealed by the Chairman, managerial officers and Accounting Supervisor.

(11) Self-evaluation questionnaires for audit committee performance evaluations

(12) Other important matters specified by the Company or the competent authority.

Reviews of financial reports

The Board of Directors prepared the Company’s 2020 annual business report, financial statements, and earnings distribution proposals, among which the financial statements were verified by KPMG Taiwan certified public accountants, and a verification report was 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 and compliance with laws and regulations. The Audit Committee suggests that the Company’s risk management and internal control system are effective and that the Company has adopted necessary control mechanisms to monitor and address violations.

Appointment of a certified public accountant

(1) 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.

In order to ensure the independence of the certified public accountant firm, the Audit Committee has developed an independence evaluation form in accordance with Article 47 of the Certified Public Accountant Act and Bulletin No. 10 of the Code of Professional Ethics for Accountants. Regarding the independence, professionalism, and competence of accountants, it assesses whether they are related parties, or have mutual business or financial interests with the Company. The Audit Committee, on March 25, 2021, and the Board of Directors, on March 25, 2021 both approved accountants Tseng Kuo-Yang and Chen Chung-Che of KPMG Taiwan as meeting the independence assessment standards and as qualified to serve as accountants for the Company’s financial and tax matters.

(2) On March 25, 2021, the Audit Committee resolved to change the Company’s CPAs for the audit of the financial reports from the first quarter of 2021 in line with the auditing standards and the internal operations of KPMG. The original CPAs were Tseng Kuo-Yang and Chen Chung-Che and the new CPAs are Huang Hsin-Ting and Tseng Kuo-Yang.

(1) 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.

(2) The powers of the Company’s Compensation Committee

  1. Periodically review the Compensation Committee Charter and propose amendments.
  2. 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.
  3. 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.

(3) When performing the official powers, the Compensation Committee shall follow the principles listed below:

  1. Ensuring that the remuneration arrangements of the Company comply with applicable laws and regulations and are sufficient to recruit outstanding talent.
  2. 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.
  3. Directors and managers should not be guided to engage in behaviors that exceed the Company’s risk appetite in pursuit of remuneration.
  4. 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.
  5. 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.

According to the operating needs of the Company, regular annual assessments shall be made in the executive meeting for discussion on matters of environmental preventive drills affecting operational performance (major disasters, possible incidents), social related prevention seminars (product risk, personnel risk, community risk), and governance (operational risk).

 

The Company has set up a corporate social responsibility committee with seven committee members. The chairman of the board serves as the chairman, and all deputy directors and designated personnel are ex officio members. There are four groups covering the executive office and corporate governance, food safety, social commitment, and environmental sustainability. The directors of factories, finance, human resources, marketing, etc. are part-time members. It shall integrate corporate social responsibility into the Company’s business strategy in a purposeful, systematic and organized way, cultivating and fulfilling corporate social responsibilities over the long term. It shall be expected to have capability of pushing tasks from top to bottom and regularly reporting the results to the Board of Directors.