Governance

Functional committees

Audit committee

During the March 29th, 2017 board of directors meeting, the Company adopted the Regulations for Audit Committee Organization. In the June 22nd, 2017 shareholder general meeting, it was resolved to establish an audit committee and for it to replace the supervisor.

The Company's audit committee is made up of independent directors, and meets at least once a quarter. The committee is responsible for implementing proper presentation of the Company's financial reports; signing off on the selection (and dismissal) of CPAs, as well as their independence and effectiveness; effective implementation of internal Company controls; the Company's compliance with legal orders and regulations; and contol of existing and potential risks to the Company.

The audit committee's primary scope of authority is as below:

Adoption and amendment of an internal control system, pursuant to Securities and Exchange Act, Article 14-1.
Assessing the internal control system's effectiveness.
In accordance with the Securities and Exchange Act, Article 36-1, ""rules governing the applicable scope, work procedures… for… major financial or operational actions… such as acquisition and disposal of assets, engaging in derivatives trading, extension of monetary loans to others, [and] endorsements or guarantees for others"".
Matters that bear on the personal interests of any director.
Material asset and derivatives transactions.
Material monetary loans, endorsements, and provision of guarantees.
The offering, issuance, and private placement of any equity-type securities.
The hiring and dismissal of attesting CPAs, and compensation given thereto.
The appointment and discharge of financial, accounting, and internal auditing officers.
Annual financial reports, second-quarter financial reports, and quarterly financial reports that must be audited and attested by a CPA and which comply with the domestic competent authority's requirements.
Any other material matter so required by the Company or the competent authority.

Compensation committee

During the October 28, 2011 board of directors meeting, the Company adopted the Regulations for Compensation Committee Organization. The same board meeting also resolved to establish the compensation committee. The Company's compensation committee is composed of three independent directors, and meets at least twice a year.

The compensation committee performs the duty of a good manager as it faithfully carries out the following power. It is also responsible to the board of directors, and proposes suggestions to the board for discussion:

1) Setting and periodically reviewing director and president performance, as well as the remuneration policy, system, standards, and structure.
2) Periodically reviewing and setting remuneration for directors and the president.

In performing the preceding duties, compensation committee members adhere to the following principles:

1) Director and manager performance evaluations and compensation shall be done in reference to presiding standards within the industry, and shall take into consideration the reasonableness of links between personal performance, the Company's operational record, and future risks.
2) The committee shall not lead directors or managers to behave in a manner that exceeds the Company's appetite for risk in order to pursue remuneration.
3) The rates and timing of directors' and senior management's partial compensation changes due to short-term performance bonuses shall be decided taking into consideration industry characteristics and the Company's business characteristics.

Name

Audit committee

Compensation committee

Yao-Ming Huang

V(Moderator)

Hsu-Feng Ho

Mao-Chun Wang