Corporate Governance Practice

The Company passed the Rules and Procedures on Evaluating the Performance of the Board and Functional Committees to enhance efficiency, under which the Nomination and Remuneration Committee conducts an analysis and submits a report on proposed improvements to the board after an annual performance evaluation and uses it as a reference for remuneration and re- appointment. The performance evaluation was completed through self-assessments by board members (Assessment Report), which covered evaluations of the performance of the board, board members and functional committees. Both the board and committees performed well, with an average rating of over 4.98, with 5 being the highest score.

The Company appointed the Taiwan Corporate Governance Association (TCGA) to conduct its board evaluation in January 2024. The evaluation, covering the period from April 1, 2023 to March 31, 2024, focused on eight aspects: composition, guidelines, authorization, supervision, communication, internal controls and risks, self-discipline and support systems. The report was issued on May 27, 2024, and presented to the Board of Directors by the Nomination and Remuneration Committee on August 5, 2024. The results of the evaluation and proposed are as follows:

A. Comments：

(a) The company values the professional and diverse skills of the Board of Directors. Board members are selected based on the Company’s development strategy, with qualified candidates being recruited from various fields. The Board consists of nine members, more than half of whom are independent directors (including one female director). Aside from attending regular meetings, the five independent directors are responsible and proactive in participating in expert discussions on specialized fields, such as strategy development, new tech knowhow, mergers and acquisitions, and investment management. With a forward-looking and international perspective, they provide valuable insights to the management team and fully assist the Board in fulfilling its guiding and supervisory functions.

(b) As the leader of the Company, the Chairman is open and receptive to suggestions, fostering a team environment in which board members feel free to speak their minds fully. When dealing with important decisions and issues (such as the group's investment strategy), the board fully respects the opinions of independent directors. This clearly demonstrates the proactive and open culture of the board's deliberations, which is commendable.

(c) Each year, the Board of Directors sets the balanced scorecard (BSC) goals for the general manager, which serve as the performance targets for the entire company. The assessment indicators include both financial and non-financial metrics, with approximately 30% linked to ESG performance. The achievement of ESG goals is tied to compensation to assist the Company in realizing its sustainability objectives.

(d) The Company has a comprehensive supervision mechanism for its investments in affiliates, which includes thorough pre-investment evaluations and post-investment management. The audit unit regularly compiles and reports the internal audit results of major investments to the Board of Directors. Additionally, the managers of key subsidiaries report regularly to the board to complete the management process and implement proactive risk controls.

(e) From the perspective of the 5Cs (Compliance, Culture, Communication, Collaboration, Competency), all board members possess the required professional competencies, adhere to legal regulations, maintain comprehensive internal and external communication mechanisms, collaborate fully with the management team and have fostered a culture of effective board operation.

B. Suggestions/Implementation:

(a) The Company has established multiple committees. There might be similarities and overlaps in the functions and responsibilities of these committees, and their degree of subordination to the board varies. It is recommended that the Company periodically review the organizational rules of each committee (including the feasibility of consolidation) according to operational development needs to enhance their effectiveness. The Company will conduct regular reviews as recommended.

(b) To help stakeholders better understand the structure and operations of the functional committees under the Board of Directors and other management-level committees, it is recommended that the Company uniformly and clearly disclose relevant information, such as the organizational structure, division of responsibilities, and reporting methods of each committee, on various communication platforms (e.g., website, annual report and sustainability ESG report). The Company has implemented the suggestion accordingly.

The heads of finance and other divisions of the Company and its subsidiaries conduct annual evaluations of the independence and reappointment of CPAs according to The Bulletin of Norm of Professional Ethics for Certified Public Accountants of the Republic of China, Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies, and Audit Quality Indicators (AQIs) based on the following criteria and procedures:

1.The CPAs’ resumes.

2.The CPAs neither serve as a director/supervisor/ manager nor hold a position with major influence in the Company or its subsidiaries and have no interests that conflict with the Company’s.

3.The CPAs have not served as auditors for the Company for seven consecutive years.

4.The CPAs should provide the Company with a Declaration of Independence on a quarterly basis.

5.The CPAs have not provided non-audit services to the Company which might affect their independence.

6.The CPAs are not involved in any significant lawsuit or litigation and have never been censured by any regulatory body.

7.The CPA firm’s involvement, quality control review and innovative plans.

8.Effective interaction with manager and internal audit officer.