Responsibilities of the Audit Committee

The Audit Committee is composed of three independent directors. Its purpose is to assist the Board of Directors in overseeing the quality and integrity of the company's accounting, auditing, financial reporting processes, and financial controls.

The annual deliberation matters of the Audit Committee mainly include the following:

1. Establishing or amending the internal control system in accordance with Article 14-1 of the Securities and Exchange Act.
2. Evaluating the effectiveness of the internal control system.
3. Formulating or revising procedures for major financial or business activities, including the acquisition or disposal of assets, derivative transactions, lending funds to others, and providing endorsements or guarantees for others, in accordance with Article 36-1 of the Securities and Exchange Act.
4. Matters involving directors' own interests.
5. Significant asset or derivative transactions.
6. Major lending of funds, endorsements, or guarantees.
7. Issuance, offering, or private placement of equity-related securities.
8. Appointment, dismissal, or remuneration of certified public accountants.
9. Appointment or dismissal of financial, accounting, or internal audit officers.
10. Annual and semi-annual financial reports.
11. 11. Other significant matters required by the company or regulatory authorities.

Resolutions on the aforementioned matters must be approved by a majority of all committee members and then submitted to the Board of Directors for resolution.

Except for item 10 of the preceding paragraph, if a resolution does not obtain approval from a majority of all committee members, it may proceed with the consent of at least two-thirds of all directors. For details on the convening of the Audit Committee meetings, please refer to the company’s annual report.

Ÿ   Review of Financial Reports

The Board of Directors has prepared the 2019 Business Report, Financial Statements, and Profit Distribution Proposal of the company. The Financial Statements have been audited by KPMG Taiwan, which issued an audit report.

The aforementioned Business Report, Financial Statements, and Profit Distribution Proposal were reviewed by the Audit Committee and deemed to be in compliance with relevant regulations without discrepancies.

Ÿ   Evaluation of the Effectiveness of the Internal Control System

The Audit Committee evaluates the effectiveness of the company's internal control policies and procedures, including controls related to finance, operations, risk management, information security, and regulatory compliance. It also reviews periodic reports from the internal audit department, certified public accountants, and management, covering areas such as risk management and regulatory compliance.

With reference to the 2013 Internal Control — Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the Audit Committee concludes that the company's risk management and internal control systems are effective. The company has implemented the necessary control mechanisms to monitor and address any violations.