Corporate Governance

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Implementation Status

Evaluation Item Implementation Status1 Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Yes No Abstract Illustration
Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”? The company formulated and duly disclosed corporate governance best practice principles pursuant to the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies “. Corresponding norms and regulations are observed and implemented in accordance with the spirit of corporate governance. In the future, the company will continue to strengthen information transparency and board functionality through the amendment of relevant management regulations with the goal of promotion corporate governance. No deviation
Shareholding structure & shareholders’ rights
Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? The Company has designed the specialist to handle shareholders’ suggestions, disputes, etc. and coordinate the relevant departments for implementation. No deviation
Does the company possess the list of its major shareholders as well as the ultimate owners of those shares? Stock service agency organization can be used to provide actual information and keep track of the shares held by directors, managers and shareholders who own more than 10% of shares. No deviation
Does the company establish and execute the risk management and firewall system within its conglomerate structure? All affiliates are independently responsible for the management of their assets and finances in accordance with the internal control system of the company to ensure the implementation of the risk control and firewall mechanism. No deviation
Does the company establish internal rules against insiders trading with undisclosed? The company has formulated “Procedures for Ethical Management and Guidelines for Conduct “against insiders trading with undisclosed. No deviation
Composition and Responsibilities of the Board of Directors
Does the Board established a diversity policy, specific management goals and implemented it accordingly? The board has formulated diversified policies with regard to membership composition. The company has also established three independent director positions. Kao, Chih-Chien, Lee, Chien-Ming and Lin, Chih-Chung currently serve as independent directors. Lin, Chih-Chung has a legal background, while Kao, Chih-Chien is a finance and accounting specialist and Lee, Chien-Ming has professor of department of Resource management background. The three independent directors set up household registration in Taiwan.
The company disclose the Board develop a diversified policy for the composition of its members on its website and the Market Observation Post System (MOPS)
No deviation
Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? The company establish a Human Resources Committee in addition to the Remuneration Committee and the Audit Committee and will consider adding ones while it is necessary in the future. No deviation
Does the company establish a standard to measure the performance of the Board, and implement it annually, report the results of the performance appraisal to the board of directors and apply the results for reference regarding individual directors’ remuneration and re-appointments? The company has formulated rules procedures for governing the board performance evaluation on March. 22,2019.  The board committee's charters shall be subject to review at least once a year as part of the Company's regulations governing performance evaluation for internal committees. Internal board performance evaluations shall be completed before the end of the first quarter of the following year.
The company shall take into consideration its condition and needs when establishing the criteria for evaluating the performance of the board of directors, which should cover, at a minimum, the following five aspects:
1.Participation in the operation of the company;
2.Improvement of the quality of the board of directors' decision making;
3.Composition and structure of the board of directors;
4.Election and continuing education of the directors;and
5.Internal control.
The criteria for evaluating the performance of the board members (on themselves or peers), should cover, at a minimum, the following six aspects:
1.Alignment of the goals and missions of the company;
2.Awareness of the duties of a director;
3.Participation in the operation of the company;
4.Management of internal relationship and communication;
5.The director's professionalism and continuing education; and
6.Internal control.
The criteria for evaluating the performance of functional committees should cover, at a minimum, the following five aspects:
1.Participation in the operation of the company;
2.Awareness of the duties of the functional committee;
3.Improvement of quality of decisions made by the functional committee;
4.Makeup of the functional committee and election of its members and
5.Internal control.
The units performing evaluations will collect information about the activities of the board of directors and distribute self-evaluation questionnaires. When electing or nominating members of the board of directors, the Company shall base its election on the evaluation results of the performance of the board and shall base its determination of an individual director's remuneration on the evaluation results of his or her performance.
The unit responsible for evaluation or the secretariat of the board will collect all information, give scores based on the evaluation, record the evaluation results in a report, and submit the report to the board of directors for discussion and improvement.
The 2022 board performance evaluation is carried out by the Secretariat of the Board (STB) in early 2023. STB collect related information about activities of the board of Directors and distribute “the Questionnaire of self-Evaluation of Performance of the Board “to Board members for self-evaluation. The evaluation period is from Jan. 1 to Dec. 31, 2022, the evaluation scoop includes whole board of directors, individual board members, and functional Committee: Audit committee and Remuneration Committee. When nomination members of the board of directors, the company will base its election on the evaluation results of individual Board member. The result has been reported to the Board of Directors on Mar. 13, 2023.The operation of CTCI’s Board of Directors is evaluated very good on the result of the 2022 board performance evaluation.(1poor,2fair,3good,4very good,5excellent)
No deviation
Does the company regularly evaluate the independence of CPAs? The accounting department implements a self-evaluation of the independence of certified public accountants. Evaluation results were reported to the Audit Committee and Board of Directors on March 13, 2023 for their review and approved accordingly. The accounting department of evaluated CPA Huang, Yi-Min and Shyu, Wen-Yea of Deloitte & Touche. Both CPAs conform to the standards of independence established by the company(Note1) and are capable of serving as independent auditors of the company. The company required certified accountants to provide a signed Declaration of Independence. No deviation
Does the TWSE/TPEx listed company been equipped with competent and appropriate numbers of corporate governance personnel, and designated a CGO responsible for corporate governance-related affairs (including but not limited to providing directors and supervisors with the information required for business execution, assisting directors and supervisors with legal compliance, handling matters related to board meetings and shareholders meetings in accordance with the law, and producing meeting minutes for board of directors meetings and shareholders meetings)? The company appointed Liu, Li-Ling of Manager for a chief corporate governance officer by the board of directors on March 19, 2020.
The governance officer Liu, Li-Ling shall be a qualified for at least three years in a public company in handling legal affairs, financial affairs, stock affairs, or corporate governance affairs.
It is required that the corporate governance affairs mentioned include handling matters relating to board meetings and shareholders meetings according to laws, producing minutes of board meetings and shareholders meetings, assisting in onboarding and continuous development of directors and supervisors, furnishing information required for business execution by directors and supervisors, assisting directors and supervisors with legal compliance, reporting the nomination, election, and appointment of independent directors and whether their qualifications comply with all relevant laws and regulations to the board, handle matters related to the change of directors, and other matters set out in the articles of incorporation or contracts.
The main duties of this year are as follows
Develop appropriate corporate mechanisms and organizational structures to promote the independence of the board of directors, and fulfillment of operation transparency, regulatory compliance, and internal audit of internal control.
Consult director’s opinions before planning and formulating the board meeting agenda, and notify all directors to attend the meeting with sufficient meeting information provided at least even days before the meeting held in order to help directors understand the content of relevant issues. If the content is related the interested parties and should Be avoided at least seven days before the meeting held in order to help directors understand the content of relevant issues. If the content is related to the interested parties and should be avoided, they will be reminded beforehand.
Register the date of annual shareholder’s meeting before due date in accordance with law, and report meeting notice, meeting manual and meeting minute before deadline, as well as report the change of registration upon the amendment of articles and re-election of directors.
Revies the annual corporate governance appraisal index published by corporate governance center, and screen item-by-item to ensure the achievement.
The corporate governance affairs training records: Note 2
No deviation
Does the company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers, and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities? The company has established a stakeholder section on the company has established a stakeholder identity, issues which have been concerned by major stakeholders and provide the channel for communication. No deviation
Does the company appoint a professional shareholder service agency to deal with shareholder affairs? The Company engaged Registrar & transfer Agency department of Grand Fortune Securities Co., Ltd. to host annual general shareholders’ meeting. No deviation
Information Disclosure
Does the company have a corporate website to disclose both financial standings and the status of corporate governance? The company has set up a website to disclose information regarding the company’s financials and business. No deviation
Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)? The company has set up a Chinese/English website to disclose financials, business and corporate governance status. The company has established a spokesman system. Investor conference information is disclosed on the corporate website according to the regulation of TWSE. No deviation
Does the Company announce and report the annual financial report as early as possible within two months after the end of the fiscal year, and announce and report the first, second and third quarter financial reports and the operating status of each month as early as possible before the required deadlines? The company announces and reports annual financial statements, Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit. To announce and report financial reports before the required deadlines.
Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)? The Company emphasizes employee rights and open communication channels, and provides ample education training and reasonable compensation and welfare measures.
The Company maintains open communication channels and information exchange for investors and other stakeholders, and respects and protects their entitled rights and interests.
The Company maintains a good relationship with both suppliers and customers and seeks mutually beneficial growth through cooperation.
The Company has established various internal control systems and internal management rules in accordance with laws and regulations. The audit room submits an audit plan based on risk assessment to the Board of Directors for approval. The actual audit situation and report are submitted to the audit committee for review. In addition, after completing the internal control self-assessment for the year, the relevant departments of the Company will report a statement on internal control on a yearly basis according to the Taiwan Stock Exchange and disclose the statement in the annual report of the shareholders' meeting.
The company annually purchases insurance for directors. The company didn’t set up supervisors.
Directors’ training records:Note 3
No deviation
Please explain the improvements which have been made in accordance with the results of the Corporate Governance Evaluation System released by the Corporate Governance Center, Taiwan Stock Exchange, and provide the priority enhancement measures.
Situation after Improvement:
Item Evaluation Item Specific Improvements
1.3 Did more than half of the directors (including at least one independent director) and the audit committee convener (or at least one supervisor) attend the AGM in person, and did the company disclose in the minutes the names of those who attended? The annual shareholders’ meeting was attended in person by at least half of the directors (including at least one independent director) since 2022.
2.2 Has the Company established a diversity policy for the members of the board and disclosed the policy's specific management goals and implementation in the Company's website and annual report? Since 2022, the Company has disclosed the diversity policy of board members on the company website and annual report.
2.24 Has the Company established a framework for information security risk management, established an information security policy and specific management plans, and disclosed this information on the company's website or annual report? Since 2022, the Company has disclosed the information security policy and specific management plans on the company's website.
3.18 Has the Company established an English company website with information relating to the Company's finances, operations, and governance? Since 2022, the Company has established an English website to provide information relating to the Company's finances, operations, and governance.
3.20 Has the Company been invited (independently) to convene at least two investor conferences, held at intervals of more than 3 months apart within the year under evaluation? The Company was invited to convene investor conferences on May 26, 2022 and November 15, 2022.

Measures Adopted for Improvement:
Item Evaluation Item Specific Improvements
1.15 Has the Company established and disclosed on the company website internal policies prohibiting directors, employees, or internal personnel from utilizing undisclosed information to buy and sell securities, including (but not limited to) prohibiting directors from trading their shares within the closing period 30 days before the announcement of the annual financial statements and 15 days before the announcement of quarterly financial statements, and provide details of this implementation? Since 2023, the Company's website has disclosed internal policies prohibiting directors, employees, and internal personnel from utilizing undisclosed information to buy and sell securities.

The corporate governance affairs training records

TitleNameStudy periodTraining hoursSponsoring OrganizationCourse
Chief Corporate Governance OfficerLiu, Li-Ling2023.06.093Securities & Futures InstitutePrevention of Insider Trading Promotion Conference
2023.07.133Taiwan Stock ExchangeListed and Over-the-Counter Companies Sustainable Development Action Plan Promotion Conference
2023.08.189Taiwan Corporate Governance AssociationNet Zero Sustainable Talent Development Program - Corporate Low-Carbon Transformation Strategy

Directors’ training records

Title

Name

Study period

Training hours

Sponsoring Organization

Course

Director of 

Representative and

Chairman

Tsai, Chia-Hsiang

2023.09.28

3

Securities & Futures Institute

Transformation Opportunities and Challenges for Taiwanese Industries Amid Geopolitical Dynamics

2023.10.04

3

Securities & Futures Institute

How Non-Financial Background Directors and Supervisors Review Financial Statements

Director of Representative

Hsiung Ping-Cheng

2023.12.11

6

Accounting Research and Development Foundation

Legal Responsibilities and Practical Internal Control/Audit Measures for "Employee Fraud"

Director of Representative

Lee, Kuang-Yao

2023.07.04

6

Taiwan Stock Exchange

Cathay Sustainable Finance and Climate Change Summit

Director of Representative

Lee, Wei-Kang

2023.10.12

3

Securities & Futures Institute

Advanced Seminar for Directors, Supervisors (including Independent), and Corporate Governance Executives

2023.11.08

3

Securities & Futures Institute

Advanced Seminar for Directors, Supervisors (including Independent), and Corporate Governance Executives

Independent director

Lin, Chih-Chung

2023.10.28

3

The National Federation of CPA Associations of the R.O.C.

Latest Trends and Practices in Anti-Money Laundering

2023.11.08

3

The National Federation of CPA Associations of the R.O.C.

Practical Operations Analysis for IndependentDirectors and Audit Committees

Independent

director

Kao, Chih-Chien

2023.08.15

3

The National Federation of CPA Associations of the R.O.C.

Overview and Quick Guide to ESG

2023.08.16

3

The National Federation of CPA Associations of the R.O.C.

Analysis of Money Laundering and Insider Trading Patterns and Cases

Independent

director

Lee, Chien-Ming

2023.10.10

3

Accounting Research and Development Foundation

How Board of Directors and Senior Executives Review ESG Sustainability Reports

2023.10.22

3

Accounting Research and Development Foundation

Understanding Corporate Governance Evaluation Indicators Correctly

Preventing insider trading education promotion

The Company hosts educational awareness training pertaining to "Prevention of Insider Trading" and relevant regulations at least once a year. Newly appointed directors and managers will be scheduled for these courses respectively. The course includes non-disclosure related issues regarding material information, the definition of insider trading, and case studies.

  • ESON headquarters:No. 88, Yuanfeng Rd., KSND. Kunshan City, Jiangsu, China

  • Branch: Taiwan / Subsidiary: Wuxi, Yantai, Dongguan, Slovakia, Mexico, Vietnam, Malaysia First Plant, Malaysia Second Plant

  • +86-512-57572938

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