Corporate Governance
FAVITE Inc’s corporate governance affairs are handled by each unit by the division: the board of directors, the audit committee, and the shareholders’ meeting are handled by the accounting department; the human resources department handles the remuneration committee; the company’s operates with integrity will be coordinated and implemented by the general manager’s office.
The annual business performance is as follows:
- Arranging directors’ refresher courses.
- Plan and handle matters related to meetings such as the annual schedule of the board of directors and the date of the shareholders’ meeting.
- Prepare minutes of the board of directors and shareholder meetings.
- Assist and remind directors of the laws and regulations that should be observed when performing business or making formal resolutions of the board of directors.
- Matters concerning the release of important information on essential resolutions of the board of directors, and ensuring the legitimacy and correctness of the content of the important information, to protect the equivalence of investor transaction information.
- Regularly evaluate the performance of the board of directors in accordance with the company’s “Performance Evaluation Method for the Board of Directors”.
1. Board of Directors
FAVITE Inc. has a “Corporate Governance Principle” that requires the composition of the board of directors should consider diversity. Except for that directors who are also managers of the company should not exceed one-third of the directors, the company shouldn’t appoint independent directors in accordance with the articles of the association less than two persons, and shall not be less than one-fifth of the number of directors. Independent directors should also have professional knowledge, and should not act as directors (including independent directors) or supervisors of more than five listed OTC companies at the same time, and should maintain independence within the scope of business execution, and should not cooperate with The company has direct or indirect interests, and the company has obtained a written statement from each independent directors confirming the independence of itself and its immediate family relatives from the company. The professional qualifications of the company’s current four independent directors, restrictions on shareholding and part-time jobs, determination of independence, nomination methods, and other matters to be followed are in accordance with the Securities and Exchange Law, the establishment of independent directors of public companies and matters to be followed Measures and regulations of the stock exchange.
The current board of directors of FAVITE Inc. has a total of 9 members, including 4 independent directors. At present, the current nine directors have professional backgrounds in the industry and academia and also have expertise in business management, leadership decision-making, industrial knowledge, academics, finance and other fields. Among them, directors with employee status account for 11%, and independent directors accounted for 44%. In the future, the company will continue to add and revise the diversification policy according to the operation, operation pattern, and development needs of the board of directors, so as to ensure that the members of the board of directors should generally have the necessary knowledge, skills and accomplishments required to perform their duties. The specific management objectives and achievement of the diversity policy and independence of the board of directors are as follows：
| Management Objective | Completion Status |
|---|---|
| There shall be at least two independent directors and the number of seats shall not be less than one-fifth of the number of directors | Accomplished |
| Directors who concurrently serve as company managers should not exceed one-third of the directors' seats | Accomplished |
| Sufficient and diverse professional knowledge and skills | Accomplished |
2. Director’s Professional Background
| Title | Name |
|---|---|
| Chairman | CHEN, YUNG-HUA |
| Director | Utechzone Co., Ltd. .Representative: CHANG, WEN-CHIEH |
| Director | YEH, SHENG-FA |
| Director | Utechzone Co., Ltd. Representative: LIN, FANG-LUNG |
| Director | LIN, HUNG-JEN |
| Independent Director | TSENG, HSIANG-CHI |
| Independent Director | LEE, SHIH-CHENG |
| Independent Director | LEE, SHIH-CHENG |
| Independent Director | LO, CHIH-PING |
三、Diversity Policy & Operation
- The company advocates and respects the policy of diversification of directors. In order to strengthen corporate governance and promote the development of the composition and structure of the board of directors, it is believed that the policy of diversification can help improve the overall performance of the company. The selection and appointment of members of the board of directors are based on the principle of talent person. They have diverse complementary capabilities across industries, including basic conditions and values (such as age, gender, nationality, culture, etc.), and they also have industrial experience, relevant skills, and professional backgrounds. (such as law, accounting, industry, finance, management, or technology), professional skills and industry experience, as well as business judgment, business management, leadership decision-making, and crisis management capabilities. In order to strengthen the functions of the board of directors and achieve the ideal goal of corporate governance, Article 20 of the company’s “Corporate Governance Principle” clearly states that the board of directors as a whole should have the following capabilities：
董事整體應具備能(néng)力 營運判斷能(néng)力 產業知識 會計及財務分(fēn)析能(néng)力 國際市場觀 經營管理(lǐ)能(néng)力 領導能(néng)力 危機處理(lǐ)能(néng)力 決策能(néng)力 - The company’s current board member diversity policy and its implementation are as follows, which is sufficient to show that the current directors have achieved the goal of complementing each other’s expertise and diversification. The implementation of the board member diversity policy is as follows：
- Composition
基本組成 姓名 兼任本公司員工 性別 年齡 獨立董事任期年資 51至60歲 61至70歲 3年以下 3~9年 9年以上 陳永華 ✔ 男 ✔ 由田新(xīn)技(股)公司
代表人：張文(wén)杰男 ✔ 葉勝發 男 ✔ 由田新(xīn)技(股)公司
代表人：林芳隆男 ✔ 林宏仁 男 ✔ 曾祥器 男 ✔ ✔ 李詩政 男 ✔ ✔ 沈錫文(wén) 男 ✔ ✔ 羅志(zhì)平 男 ✔ ✔ - Professional Distribution
董事名稱 營運判斷 會計財務 經營管理(lǐ) 危機處理(lǐ) 產業知識 國際市場觀 領導能(néng)力 決策能(néng)力 陳永華 ✔ ✔ ✔ ✔ ✔ ✔ ✔ 由田新(xīn)技(股)公司
代表人：張文(wén)杰✔ ✔ ✔ ✔ ✔ ✔ ✔ 葉勝發 ✔ ✔ ✔ ✔ ✔ ✔ ✔ 由田新(xīn)技(股)公司
代表人：林芳隆✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ 林宏仁 ✔ ✔ ✔ ✔ ✔ ✔ ✔ 曾祥器 ✔ ✔ ✔ ✔ ✔ 李詩政 ✔ ✔ ✔ ✔ ✔ ✔ 沈錫文(wén) ✔ ✔ ✔ ✔ ✔ ✔ ✔ 羅志(zhì)平 ✔ ✔ ✔ ✔ ✔ ✔ ✔
- Composition
| 2023/05/29 | 2023 4th Board Resolution | |
| 1. The company's new accounting executive salary review and ratification case. 2. The company's new corporate governance supervisor's remuneration review and ratification case. 3. Revise some texts of the company's "Rules of Procedure for Shareholders' Meetings". |
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| 2023/05/05 | 2023 3th Board Resolution | |
| 1. The company's consolidated financial statements for the first quarter of 2023. 2. The case of the company's new "corporate governance supervisor". 3. It is proposed to formulate a review method plan for the pre-approval of non-confirmation services provided by the company's certified accountants. 4. The company's application for bank financing quota. |
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| 2023/2/24 | 2023 2th Board Resolution | |
| 1. The company's 2022 annual employee remuneration and directors' and supervisors' remuneration are listed and issued. 2. The company's 2022 individual financial statements and consolidated financial statements. 3. The company's 2022 annual business report and 2023 annual business plan. 4. The company's 2022 profit distribution plan. 5. Approved the company's 2022 internal control system statement. 6. Amend some articles of the company's "Articles of Association". 7. Determine the date, venue and reason for the 2023 ordinary shareholders meeting. 8. Determine the place and period for accepting proposals from shareholders who hold more than 1% of the shares at the ordinary meeting of shareholders in 2023. 9. The case of lifting the restrictions on non-competition for the company's directors and their representatives. 10. Revise some texts of the company's "Code of Practice on Corporate Governance". 11. The case of changing the financial supervisor of the company. 12. The case of changing the accounting supervisor of the company. 13. The company's application for bank financing line. |
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| 2023/1/13 | 2023 1th Board Resolution | |
| 1. The company's 2023 budget. 2. The company's 2022 year-end bonus distribution case for managers. 3. Revise the text of some articles of the company's "internal material information processing and management procedures for preventing insider trading". 4. Revise some texts of the company's "Code of Practice on Corporate Governance". 5. The company's 2022 certification accountant independence and suitability assessment case. 6. The company's 2023 certification accountant appointment and remuneration case. 7. The company's application for bank financing quota. |
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| 2022/11/4 | 2022 6th Board Resolution | |
| 1. The company's consolidated financial statements for the third quarter of 2022. 2. The company has set up a "information security supervisor" case. 3. It is proposed to revise the company's "2022 Internal Audit Plan". 4. The company's 2023 annual audit plan. 5. Amended some articles of the company's "Board of Directors' Rules of Procedures" and renamed it as "Board of Directors' Rules of Procedures". 6. Amended some articles of the company's "Procedures for Application for Suspension and Resumption of Trading Operations". 7. Revise some texts of the company's "Rules on the Scope of Responsibilities of Independent Directors". 8. Re-drafted the company's "Related Persons, Specified Companies and Group Enterprise Transaction Operation Measures". 9. Formulate the company's "Risk Management Policies and Procedures" proposal. 10. Revise some articles of the company's "Salary and Compensation Committee Operation Management". 11. Amended some articles of the company's "Management Operations Applicable to International Accounting Standards". 12. Revise some texts of the company's "Procedures for Accounting Professional Judgment, Accounting Policies and Estimate Changes". 13. Revise some texts of the company's "Budget Operation Method". 14. Revise the company's "investment cycle" internal control system and "internal audit implementation rules - investment cycle" part of the text. 15. Amend the company's "financing cycle" internal control system and some texts of "internal audit implementation rules-financing cycle". 16. Revise some articles of the company's "Position Authorization and Agency System". 17. The company's application for bank financing line. |
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| 2022/8/5 | 2022 5th Board Resolution | |
| 1. The company's consolidated financial statements for the second quarter of 2022 2. Proposal on adjustment of remuneration of independent directors of the Company 3. The company's 2021 remuneration payment for directors and supervisors 4. The company's 2021 annual manager employee compensation payment case 5. The company's 2022 annual salary adjustment plan for managers 6. Matters related to the determination of the ex-dividend base date and cash dividend distribution date for the 2021 annual surplus distribution 7. Renewal of liability insurance for directors, supervisors and key employees of the company upon expiration 8. Revise some texts of the company's "Internal Audit System and Implementation Rules" and "Internal Audit Implementation Rules-Management Measures" 9. Revision of some articles of the company's "Corporate Governance Code" 10. Amended some articles of the company's "Board of Directors' Self-evaluation or Peer Evaluation Method" and renamed it as "Board of Directors' Performance Evaluation Method" 11. Revision of some articles of the company's "Salary and Remuneration Committee Organization Regulations" 12. Revision of some articles of the company's "Salary and Remuneration Committee Operation Management" 13. The company's application for bank financing line |
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| 2022/6/24 | 2022 4th Board Resolution | |
| 1. The election of the ninth chairman of the board. 2. Appointment of members of the Remuneration Committee. |
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| 2022/5/6 | 2022 3th Board Resolution | |
| 1. Nomination of directors, independent directors and confirmation of director candidates. 2. It is proposed to lift the non-competition case of the company's new directors and their representatives. 3. Review whether the proposals of shareholders holding more than 1% of the shares of the 2022 shareholders' meeting are included in the agenda of the shareholders' meeting. 4. Added and amended the "Articles of Association" of the company. 5. Revise some texts of the company's "Code of Practice on Corporate Governance". 6. The company's greenhouse gas inventory and verification plan. 7. The company's application for bank financing quota. |
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| 2022/3/25 | 2022 2th Board Resolution | |
| 1. 2021 the company's employees' remuneration and directors' and supervisors' remuneration will be listed and issued. 2. The company's business report, individual financial statements and consolidated financial statements for 2021. 3. The company's profit distribution case in 2021. 4. 2022 annual business plan. 5. Appoint Deloitte United Accounting Firm to handle the company's 2022 annual financial statement visa case. 6. Approved the statement of the company's internal control system in 2021. 7. Amend some articles of the company's "Articles of Association". 8. Proposal to re-establish the company's "Rules of Procedure for Shareholders' Meetings". 9. Revise some texts of the company's "Derivative Commodity Transaction Processing Procedures". 10. Amended some articles of the company's "Procedures for Acquisition or Disposal of Assets". 11. Revise some texts of the company's "Operating Procedures for Loaning Funds to Others". 12. Revise some texts of the company's "endorsement guarantee operation procedures". 13. Repeal the company's "Director and Supervisor Election Method", and formulate the company's "Director Election Procedure". 14. Repeal the company's "Regulations on the Scope of Authority of Supervisors". 15. Proposal for overall re-election of directors of the company. 16. Accept the related operations of the nomination of directors and independent director candidates. 17. The proposal to lift the non-compete case of the company's new directors and their representatives. 18. Determine the date, venue and reason for the 2022 shareholders' meeting. 19. Decide on the place and period for accepting proposals from shareholders holding more than 1% of the shares of the 2022 shareholders meeting. 20. Formulate the company's "Audit Committee Organization Regulations". |
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| 2022/1/21 | 2022 1th Board Resolution | |
| 1. The company's 2022 budget. 2. The company's 2021 year-end bonus distribution case for managers. 3. Formulate the company's "Integrity Management Operation Procedures and Behavior Guidelines" plan. 4. Amended some articles of the company's "Corporate Social Responsibility Code of Practice" and renamed it "Corporate Sustainable Development Code of Practice". 5. Revise some texts of the company's "Corporate Governance Code". 6. Revise some texts of the company's "Code of Ethical Conduct". 7. Revise the text of some articles of the company's "internal material information processing and management procedures for preventing insider trading". 8. Revise some texts of the company's "accounting system". 9. Amended some articles of the company's "Management of Financial Statement Preparation Process". 10. The company's application for bank financing quota. |
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| 2021/11/05 | 2021 6th Board Resolution | |
| 1. The company's consolidated financial statements for the third quarter of 2021. 2. The company's 2022 annual audit plan. 3. Revise the company's "production cycle" internal control system and internal audit implementation rules. 4. The company's application for bank financing quota. 5. Resolution not to dispose of the company's land and buildings. |
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| 2021/08/26 | 2022 5th Board Resolution | |
| 1. The company's application for bank financing quota. |
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| 2021/08/06 | 2022 4th Board Resolution | |
| 1. Appointment case of accounting supervisor and financial supervisor of the company. 2. The company's consolidated financial statements for the Q2 of 2021. 3. Renewal of the company's directors, supervisors and important staff liability insurance due. 4. The company's annual salary adjustment plan for managers in 2021. 5. Revise the company's "Verification Authority Form". 6. Revise some texts of the company's "Seal Seal Management Measures". 7. The company's application for bank financing quota. 8. Revise some texts of the company's "accounting system". 9. In response to the epidemic situation, the company changed the date and venue of the 110th Annual General Meeting of the Republic of China. |
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| 2021/05/07 | 2022 3th Board Resolution | |
| 1. Review whether the proposals of shareholders holding more than 1% of the shares of the 2021 shareholders' meeting are included in the agenda of the shareholders' meeting. | ||
| 2021/03/26 | 2022 2th Board Resolution | |
| 1. The company's business report, individual financial statements and consolidated financial statements for 2020. 2. The company's loss compensation plan for 2020. 3. 2021 annual business plan. 4. Appoint Deloitte United Accounting Firm to handle the company's 2021 financial statement visa case. 5. Approved the company's 2020 internal control system statement. 6. Revise some articles of the company's "Articles of Association". 7. Revise some texts of the "Rules of Procedures for Shareholders' Meetings". 8. The company's application for bank financing line. 9. Determine the date, venue and reason for the 2021 shareholders' meeting. 10. Decide on the place and period for accepting proposals from shareholders holding more than 1% of the shares of the 2021 shareholders meeting. |
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| 2021/01/29 | 2022 1th Board Resolution | |
| 1. The Company's budget for 2021. 2. 2020 year-end bonus distribution case for the company's managers. 3. Appointment of the company's senior executives engaged in the supervision and control of derivatives transactions. 4. The company applied for a bank financing line. |
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1. Remuneration Committee
- On August 26, 2011, FAVITE Inc. approved the establishment of a remuneration committee by the board of directors. Its members are appointed by the board of directors resolution. The Salary and Compensation Committee shall hold regular meetings at least twice a year. The Salary and Compensation Committee shall, with the attention of a good manager, faithfully perform the following functions and powers, and submit the proposed recommendations to the Board of Directors for discussion.
- Formulate and regularly review the policies, systems, standards, and structures for performance evaluation and remuneration of directors and managers.
- Regularly evaluate and determine the remuneration of directors and managers.
- The latest term of the Remuneration Committee is from June 24, 2022 to June 23, 2025. For the attendance rate of each member of this committee. please refer to the annual reports of the company.
- Remuneration Committee Member
姓 名 薪酬委員會 曾祥器(獨立董事) ● (主席) 李詩政(獨立董事) ● 沈錫文(wén)(獨立董事) ● 羅志(zhì)平(獨立董事) ● - The meeting information of Remuneration Committee
日期 議案內容 議決結果 113.01.26 審議本公司112年度經理(lǐ)人年終獎金計畫案。 經主席徵詢全體出席委員，無異議照案通過。
2. Audit Committee
- The committee is composed of all independent directors, the number of which shall not be less than three, one of whom shall be the convener, and at least one of them shall have accounting or financial expertise.
- The duties of this committee are as follows :
- The adoption of or amendments to the internal control system pursuant to Article 14-1 of the Securities and Exchange Act.
- Assessment of the effectiveness of the internal control system.
- The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, of the procedures for handling financial or business activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or guarantees for others.
- Issues in which a director is an interested party.
- Asset transactions or derivatives trading of a material nature.
- Loans of funds, endorsements, or provision of guarantees of a material nature.
- The offering, issuance, or private placement of securities with equity features.
- The offering, issuance, or private placement of securities with equity features.
- The appointment or discharge of a financial, accounting, or internal audit officer.
- The annual financial report signed or sealed by the chairman, manager, and accounting supervisor, and the second quarter financial report must be audited and certified by an accountant.
- Other material issues as may be required by the Company or by the competent authority.
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Term of the first committee member : 2022/06/24 – 2025/06/23
In 2022, the first audit committee held 6 meetings, and the attendance of independent directors was as follows :職稱 姓 名 實際出席次數 委託出席次數 實際出席率
(%)獨立董事(主席) 曾祥器 9 0 100% 獨立董事 李詩政 9 0 100% 獨立董事 沈錫文(wén) 9 0 100% 獨立董事 羅志(zhì)平 9 0 100% -
Other issues required to be recorded
日期 議案內容 議決結果 111.06.24 1.推選第一屆審計委員會召集人及會議主席案。 所有(yǒu)獨立董事對議案均一致通過 111.08.05 1.本公司111年第二季合併財務報表案。
2.本公司董監事及重要職員責任保險到期續保案。
3.修訂本公司「內部稽核制度暨實施細則」及「內稽實施細則-管理(lǐ)辦法」部分(fēn)條文(wén)案。
4.本公司申請銀行融資額度案。所有(yǒu)獨立董事對議案均一致通過 111.11.04 1.本公司111年第三季合併財務報表案。
2.擬修訂本公司「111年度內部稽核計畫」。
3.本公司112年度稽核計畫案。
4.修訂本公司「董事會議事規則」部分(fēn)條文(wén)案並更名為「董事會議事規範」案。
5.修訂本公司「申請暫停及恢復交易作業程序」部分(fēn)條文(wén)案。
6.修訂本公司「獨立董事之職責範疇規則」部分(fēn)條文(wén)案。
7.重行訂定本公司「關係人、特定公司及集團企業交易作業辦法」案。
8.訂定本公司「風險管理(lǐ)政策與程序」案。
9.修訂本公司「薪資報酬委員會運作管理(lǐ)」部分(fēn)條文(wén)案。
10.修訂本公司「適用(yòng)國際會計準則之管理(lǐ)作業」部分(fēn)條文(wén)案。
11.修訂本公司「會計專業判斷程序會計政策與估計變動之流程」部分(fēn)條文(wén)案。
12.修訂本公司「預算作業辦法」部分(fēn)條文(wén)案。
13.修訂本公司「投資循環」內部控制制度及「內稽實施細則-投資循環」部分(fēn)條文(wén)案。
14.修訂本公司「融資循環」內部控制制度及「內稽實施細則-融資循環」部分(fēn)條文(wén)案。
15.修訂本公司「職務授權及代理(lǐ)制度」部分(fēn)條文(wén)案。
16.本公司申請銀行融資額度案。
所有(yǒu)獨立董事對議案均一致通過 112.01.13 1.修訂本公司「內部重大資訊處理(lǐ)暨防範內線交易管理(lǐ)作業程序」部分(fēn)條文(wén)案。
2.本公司111年度簽證會計師獨立性與適任性評估案。
3.本公司112年度簽證會計師委任及報酬案。
4.本公司申請銀行融資額度案。所有(yǒu)獨立董事對議案均一致通過 112.02.24 1.本公司民(mín)國111年度個體財務報表暨合併財務報表案。
2.本公司111年度營業報告書及112年度營業計劃案。
3.本公司111年度盈餘分(fēn)派案。
4.本公司111年度「內部控制制度聲明書」案。
5.解除本公司董事新(xīn)增職務競業禁止之限制案。
6.本公司財務主管異動案。
7.本公司會計主管異動案。
8.本公司申請銀行融資額度案。
所有(yǒu)獨立董事對議案均一致通過 112.05.05 1.本公司112年第一季合併財務報表。
2.擬制定本公司簽證會計師提供非確信服務預先核准之審核辦法案。
3.本公司申請銀行融資額度案。
所有(yǒu)獨立董事對議案均一致通過 112.08.04 1.本公司112年第二季合併財務報表。
2.本公司董事及重要職員責任保險到期續保案。
3.修訂本公司「關係人、特定公司及集團企業交易作業辦法」部分(fēn)條文(wén)案。
4.修訂本公司「內稽實施細則-管理(lǐ)辦法」部分(fēn)條文(wén)案。
5.本公司續約銀行融資額度案。
所有(yǒu)獨立董事對議案均一致通過 112.11.03 1.112年第三季合併財務報表案。
2.擬捐贈等值新(xīn)台幣16,671,086元備品性質之物(wù)料予中原大學案。
3.銀行融資額度新(xīn)增及續約案。
4.113年度稽核計畫案。
5.增訂「檢舉非法與不道德或不誠信行為案件之處理(lǐ)辦法」案。
6.修訂「核決權限表」部分(fēn)條文(wén)案。
7.修訂「公司治理(lǐ)實務守則」部分(fēn)條文(wén)案。
8.修訂「內部重大資訊處理(lǐ)暨防範內線交易管理(lǐ)作業程序」部分(fēn)條文(wén)案。
9.修訂「企業永續發展實務守則」部分(fēn)條文(wén)案。所有(yǒu)獨立董事對議案均一致通過 -
Communication between independent directors, internal audit supervisors, and accountants :
Audit supervisors and accountants can directly contact independent directors as needed, and the communication is good.
In addition to receiving audit reports on a monthly basis, the independent directors of the company also report on important business activities of the company to the independent directors on the board of directors and have fully communicated with the audit business implementation and results.
In the board of directors, accountants report to independent directors on the results and findings of quarterly/annual financial statements.Summary of previous communications between independent directors, accountants ,and internal audit supervisors：
日期 與內部稽核之重大溝通事項 與簽證會計師之重大溝通事項 111/1/21 • 內部稽核業務報告 111/3/25 • 內部稽核業務報告 • 會計師就110年度財務報告重點進行說明。 111/5/6 • 內部稽核業務報告 • 會計師就111年度第一季財務報告重點進行說明。 111/8/5 • 內部稽核業務報告 •法規變動報告
•民(mín)國111年第二季財務報表審閱情況，包括任何審閱的問題或困難以及經營階層的回應（單獨會議）111/11/4 • 內部稽核業務報告 •法規變動報告
•民(mín)國111年第三季財務報表審閱情況，包括任何審閱的問題或困難以及經營階層的回應（單獨會議）112/1/13 • 內部稽核業務報告 •無 112/2/24 • 內部稽核業務報告 •法規變動報告
•民(mín)國111年度個體及合併財務報表查核情況，包括任何審閱的問題或困難以及經營階層的回應（單獨會議）112/5/5 • 內部稽核業務報告 •法規變動報告
•民(mín)國112年第一季財務報表審閱情況，包括任何審閱的問題或困難以及經營階層的回應（單獨會議）112/8/4 • 內部稽核業務報告 •法規變動報告
•民(mín)國112年第二季財務報表審閱情況，包括任何審閱的問題或困難以及經營階層的回應（單獨會議）112/11/3 • 內部稽核業務報告 •法規變動報告
•民(mín)國112年第三季財務報表審閱情況，包括任何審閱的問題或困難以及經營階層的回應（單獨會議）
Internal Audit
FAVITE Inc’s internal audit is an independent unit, directly subordinate to the board of directors, and has a full-time auditor. In addition to reporting at the regular meeting of the board of directors, it reports to the chairman every month or when necessary. The internal audit regulations stipulate that internal auditors review the company’s internal control procedures and report on the adequacy, effectiveness, and efficiency of the design of such controls and routine operations, covering all operations of the company and its subsidiaries.
The audit method is mainly carried out by the annual audit plan approved by the board of directors, and also conducts special audits or reviews according to actual needs, so as to timely discover possible deficiencies in internal control and provide suggestions for improvement. To sum up the above, the execution of general audits and projects can provide management with knowledge of the operation status of internal control, and it is another channel for management to understand existing or potential deficiencies.
In addition, the internal audit also urges each unit to perform self-assessment, establish a company self-monitoring mechanism, and use the assessment results as a basis for recommending the company’s board of directors and general manager to issue an internal control statement.
, effectiveness and efficiency of the design of such controls and routine operations, covering all operations of the company and its subsidiaries.
The audit method is mainly carried out by the annual audit plan approved by the board of directors, and also conducts special audits or reviews according to actual needs, to timely discover possible deficiencies in internal control and provide suggestions for improvement. To sum up the above, the execution of general audits and projects can provide management with knowledge of the operation status of internal control, and it is another channel for management to understand existing or potential deficiencies.
In addition, the internal audit also urges each unit to perform self-assessment, establish a company self-monitoring mechanism, and use the assessment results as a basis for recommending the company’s board of directors and general manager to issue an internal control statement.
Risk Management policy
FAVITE Inc. has a “Risk Management Policy” which will be approved by the board of directors in 2022. Risks are assessed regularly every year, and various risks are defined in accordance with the company’s overall operating policy. Within the acceptable risk range, possible losses are prevented to increase shareholder value. And achieve the optimization principle of the company’s resource allocation.
Risk Management Scope
Risk Type
1. Strategy Risk
The impact on the Company’s financial business due to changes in the overall domestic and foreign economic situation, and important policies and laws.
2. Operational Risk
Including risks of sales concentration, procurement concentration, legal regulations, talent recruitment and retaining, and impacts of technological and industrial changes, etc.
3. Financial Risk
Interest rate changes, exchange rate changes, inflation, deflation, as well as impacts on the Company’s profits and losses due to policies for high-risk/high-leverage investment, capital loans to other parties, endorsements, and derivative commodity transactions.
4. Information Risk
The risks of information disclosure of the Company’s major operating information, personal data, and/or client data required to be protected under contract provisions due to computer viruses, hacking, and/or various internal and external information security threats.
5. Legal Risk
Failure to comply with relevant regulations or the contract itself has no legal effect, ultra vires behavior, poor regulation, omissions in clauses or other factors, resulting in the inability to constrain the transaction partner to perform its obligations in accordance with the contract, which may result in the risk of financial or reputation losses.
6. Integrity Risk
Risks caused by wrong behavior or improper handling of personnel, or violations of corporate ethics and business ethics (such as: corruption, gift acceptance, bribery, leaking secrets, conflicts of interest, etc.)
7. Other Risk
Such as sudden natural disasters or climate change; water and electricity supply; impact of epidemic infectious diseases and other emerging risks.
Organization Structure
1. Board of Directors
FAVITE Inc.’s board of directors is the highest unit of the company’s risk management. It aims to follow laws and regulations, promote and implement the company’s overall risk management, clearly understand the risks faced by operations, ensure the effectiveness of risk management, and bear the ultimate responsibility for risk management.
2. Senior Management
The general manager is the command center, and is responsible for business decision-making planning, implementing the risk management decisions of the board of directors, and coordinating cross-department risk management interaction and communication to reduce strategic risks.
3. Audit Unit
The audit office is affiliated with the board of directors, assisting the board of directors and managers to inspect and review the deficiencies of the internal control system, and measure the effectiveness and efficiency of operations. An annual audit plan is drawn up based on the risk assessment results every year, and the audit implementation results are regularly reported to the Audit Committee and the Board of Directors.
4. Authority
Each authority and responsibility unit is the direct unit for initial risk discovery, assessment, and control. The supervisor of the business execution unit is responsible for risk management and is responsible for supervising and controlling the relevant risks within the unit to ensure that the company’s risk management system can completely and effectively control the relevant risks.
Operating Condition
Since 2023, FAVITE Inc. has actively promoted the implementation of the risk management mechanism. Through the operation and management meeting chaired by the general manager or the relevant operation supervisor, the company is responsible for the risk assessment of various operation plans and projects, and the personnel of each dedicated department identifies potential risks within the scope of their duties. risk, evaluate, and formulate response control plans and returns, and report to the board of directors on November 4, 2022 on the operation of risk management. Operational status of relevant risk management such as risk assessment and response measures.
Information Security Policy
In order to maintain the confidentiality, integrity and availability of the company’s information assets, comply with the requirements of relevant laws and regulations, and protect user data privacy from internal and external deliberate or accidental threats. The company integrates the information security objectives of departments at all levels and establishes the company’s overall information security policy objectives as follows:
- Protect the company’s business activity information from unauthorized access and ensure confidentiality.
- Protect the company’s business activity information to avoid unauthorized modification and ensure accuracy and integrity.
- Establish a sustainable operation plan for the information business to maintain the company’s business operations and ensure availability.
- The company’s business execution complies with the requirements of relevant laws and regulations to ensure regulatory compliance.
Information Security Committee
- The company established the Information Security Committee in July 2012, and the deputy general manager of the General Management Office serves as the chairman of the Information Security Committee. This committee coordinates the coordination of information security policies, plans, operations, and resource scheduling. and management review, and hold management review meetings regularly every year or as necessary to conduct management reviews of information security policies and implementation effectiveness to implement the effectiveness of information security management measures. The Information Security Committee regularly reports to the Board of Directors on the effectiveness of information security management, information security-related issues and directions, etc.
Information security management measures
The company has passed the ISO 27001 information security standard and verification in December of the Republic of China, including employee information security behavior. It regularly reviews the relevant regulations every year to see if they comply with the changes in the operating environment, makes timely adjustments according to needs, and is committed to preventing external information security threats. Through the construction of a multi-level information security protection system, the security of the overall information environment has been improved. In 2012, the information security expenses invested reached NT$1.2 million.
We ensure that internal personnel follow the company’s policies and implement information security management measures to ensure the sustainable operation of the company’s business. The detailed measures are as follows:
Specific management plan
- Establish a safe and reliable information system environment through information security protection software and network firewalls.
- Important information systems or equipment should establish appropriate backup or monitoring mechanisms and conduct regular drills to maintain their availability.
- Colleagues should install anti-virus software on their personal computers, regularly check for virus code updates, and are prohibited from using unauthorized software.
- Colleagues’ accounts, passwords, and permissions should be kept and used responsibly and replaced regularly.
- Design appropriate information security incident response and reporting procedures to quickly respond to incidents and avoid further damage.
- Conduct information security risk assessments and audits regularly every year to ensure effective management and compliance with legal regulations.
- At present, the company’s information security risk is not a major operational risk, so there is no need to purchase information security insurance.
Invest resources in information security management
- Endpoint protection system: The host uses the FortiEDR/MDR system, and the user uses the IST (IP Guard) system. In the 112th year of the Republic of China, we strengthened the monitoring, recording, and control access functions of the company’s computers, and controlled high computer risks. Cloud service uses functions to strengthen the protection mechanism against sensitive data leakage.
- Backup system: Purchase additional Veeam Backup system licenses to expand the backup scope of the virtual host system. In the 112th year of the Republic of China, a total of 5 system backup functions were added to improve the feasibility of system disaster recovery.
- Data recovery: Invest in the core system RTO (Recovery Time Objective) to shorten the disaster recovery completion time to less than 4 hours.
- Vulnerability scanning: Entrust a third-party impartial organization to conduct vulnerability scanning of the company’s important core systems and repair risk weaknesses to ensure the security of system operations.
Information security education and training
- The company regularly implements information security education and training courses for internal staff every year to enhance the information security knowledge and professional skills of internal staff. In the 112 years of the Republic of China, a total of 20 people were implemented for a total of 62 hours.
- New employees are required to participate in information security education and training to enhance their awareness of information security protection. In the 112th year of the Republic of China, information security education and training for new employees was conducted for a total of 9 times.
- Every year, information security promotions are conducted regularly for all colleagues to enhance the information security awareness of all employees and reduce the occurrence of information security risks. In the 112 years of the Republic of China, information security promotions for all employees were conducted a total of 4 times.
Ethical Management
FAVITE Inc. has established the “Principle of Integrity Management”, which regulates internal management and external business activities. It should be based on the concepts of integrity, transparency and responsibility, and abide by laws and regulations.
Executive Division
FAVITE Inc.’s general manager office supervises the relevant operations in accordance with the work duties and scope of each unit to ensure the implementation of the principle of integrity management.
Executive condition
- Formulate integrity management policies and plans
No. Executive Project Operating Condition (1) Does the company clearly state the policies and practices of integrity management in its regulations and external documents, as well as the commitment of the board of directors and management to actively implement the business policies? FAVITE Inc. has a “Principle of Integrity Management”, which is actually implemented in internal management and external business activities; in addition, the company’s “Board of Directors’ Rules of Procedure” also specifies the director’s interest avoidance system. Those who represent the interests of a legal person shall explain the important content of their interests at the meeting of the board of directors. If there is a risk of harming the interests of the company, they shall not participate in the discussion and vote, and shall avoid the discussion and vote, and shall not act as an agent for other parties. Directors exercise their voting rights. (2) Does the company formulate a plan to prevent dishonesty, and clearly stipulate operating procedures, behavior guidelines, punishment and complaint systems for violations in each plan, and implement them? FAVITE Inc. has a “Principle of Professional Ethics for Employees”, which states that employees must not use their powers to seek illegal benefits, accept entertainment, gifts, kickbacks, embezzle public funds or other illegal benefits, so as to prevent dishonest behavior from affecting business relationships or transactions. (3) Does the company take preventive measures against the subparagraphs of Item 2 of Article 7 of the “Principle of Integrity Management for Listed OTC Companies” or other business activities within the scope of business that have a relatively high risk of disintegrity? FAVITE Inc. has established relevant preventive measures for the risks arising from relatively high levels of Integrity. - Implement Integrity Management
No. Executive Project Operating Condition (1) Does the company evaluate the integrity records of its counterparties, and specify the terms of honest behavior in the contracts it signs with its counterparties? FAVITE Inc. abides by the Company Law, Securities Exchange Law, Commercial Accounting Law, relevant regulations on listing and OTC listing, or other business conduct-related laws and regulations as the basis for implementing honest management. (2) Does the company set up a unit affiliated to the board of directors to promote corporate integrity management, and regularly report its implementation to the board of directors? FAVITE Inc.’s general manager office supervises relevant matters based on the work duties and scope of each unit, ensures the implementation of the code of integrity management, and reports to the board of directors at least once a year on the plan and implementation of the promotion of integrity management. The general manager reported the implementation of the operation to the board of directors on November 4, 2022. In order to achieve effective implementation, the company promotes the awareness of honesty, morality and anti-corruption to colleagues throughout the company through the weekly meetings of various departments and the newcomer education and training of Jingcai Technology Co., Ltd., and digitizes the teaching materials so that all departments and all colleagues can Apply for a course of study at any time. From October 2021 to September 2022, the number of participants in physical and online courses reached 230, and the total teaching hours were 38.33 hours. From October 2021 to September 2022, the company had no complaints or reports due to operations, employees’ violation of integrity and morality, or any illegal behavior.
(3) Does the company formulate policies to prevent conflicts of interest, provide appropriate reporting channels, and implement them? Employees’ opinions can be reflected to the management through multiple channels. Regularly train and communicate with employees to protect the rights and interests of employees while preventing unintegrity behavior. (4) Has the company established an effective accounting system and internal control system in order to implement honest management, and has it been regularly checked by the internal audit unit, or has an accountant been entrusted to perform the check? FAVITE Inc. has established the “Principle of Integrity Management” and “Standards of Professional Ethics for Employees” as the basis for implementing integrity management. And in order to ensure the implementation of honest management, the company has established an effective accounting system and internal control system, and internal auditors regularly check the compliance with the preceding system. (5) Has the company formulated measures to prohibit insider trading and implemented them? The company has formulated the “Internal Material Information Processing and Insider Trading Prevention Management Procedures” to ensure the consistency and accuracy of the company’s information published to the outside world, and to strengthen the prevention of insider trading. For new directors, managers and employees, education and publicity will be provided within one month after taking office.
FAVITE Inc. has conducted education and publicity for new colleagues from October 2010 to September 2011. The course content includes the definition of important internal information, daily confidentiality operations, and penalties and handling of violations. The number of participants in physical and online courses reached 230 , the total number of teaching hours is 38.33 hours. Make colleagues understand the norms and implement relevant regulations.
- The operation of the company whistleblowing system
No. Executive Project Operating Condition (1) Does the company formulate a specific whistleblowing and reward system, establish channels to facilitate whistleblowing, and assign appropriate specialists to handle whistleblowers? FAVITE Inc. has established the “Principle of Integrity Management” and “Principle of Professional Ethics for Employees”, which can be reported to the management through multiple channels, and the company will implement punishment according to the regulations. By establishing good corporate governance, risk control mechanism and perfect internal regulations, we can prevent the occurrence of dishonest behaviors and create an operating environment for the company’s sustainable development. (2) Does the company formulate investigation standard operating procedures and related confidentiality mechanisms for accepting reports? The company has established the “Principle of Integrity Management” and “Principle of Professional Ethics for Employees”, which specify the company’s investigation standard operating procedures and related confidentiality mechanisms for accepting reports. (3) Does the company take measures to protect whistleblowers from being improperly dealt with due to whistleblowing? FAVITE Inc. has established the “Principle of Integrity Management” and “Principle of Professional Ethics for Employees”, which specify the company’s measures to protect whistleblowers from being mistreated due to whistleblowing.
Board Member Succession Planning and Operating
FAVITE Inc.’s “M&A” stipulates that the election of directors adopts a comprehensive candidate nomination system, and it is stipulated in the “Corporate Governance Practice Code” and “Director Election Procedures” that the composition of the board of directors should consider diversity, and consider the company’s own operations, business model and Develop diversified policies for development needs, including but not limited to the standards of basic conditions and values or professional knowledge and skills.
The company establishes a database of director candidates according to the following standards:
- Integrity, responsibility, innovation, and decision-making power, in line with the company’s core values, with professional knowledge and skills that are helpful to the company’s operation and management.
- Possess industry experience relevant to the business of the Company.
- The members of the board of directors as a whole should have the capabilities of operational judgment, accounting and financial analysis, business management, crisis management, and international market outlook.
- The selection process of the company’s list of director candidates must comply with the qualification review and relevant regulations to ensure that the appropriate new director candidates can be effectively identified and selected.
- FAVITE Inc. has formulated the “Performance Evaluation Method of the Board of Directors” to confirm the effective operation of the board of directors and evaluate the performance of directors as a reference for future selection of directors.
Key Management Succession Planning and Operating
The main structure of the company’s key management succession planning is as follows:
- According to the future development strategy, define the company’s required positions and talent needs, and regularly review the succession plan in response to changes in operations and strategies.
- Discover potential and talented executives to enter the succession planning candidate talent pool, and establish a sound training mechanism and talent development plan for training.
- Promptly promote middle-level supervisors as job agents of senior supervisors, and understand the cultivation status of middle-level supervisors through performance appraisal and use it as a reference for succession planning.
Intellectual Property Management
The purpose of the company is to produce high-quality, high-precision automatic testing equipment, and continue to research and develop to enhance the company’s value and competitiveness. In order to maintain this purpose, protect R&D results and respect the intellectual property of others, the following intellectual property management plan is specially established to strengthen corporate governance and ensure sustainable operation.
1. Patent Management
- Protect R&D results by applying for and obtaining patents.
- The proposal to apply for a patent for the research and development results, and to apply for and obtain a patent for the research and development results with the competent authorities of domestic and foreign intellectual property rights shall be handled and handled by the responsible units within the company.
- After the research and development results are granted a patent by the competent authority of intellectual property rights, the preservation of the relevant application and approval documents of the patent, as well as the maintenance of the patent, are handled and handled by the company’s legal office.
- Regularly review the application of the patented research and development results to assess the need for continued maintenance.
- The “Research and Creation and its Incentive Measures” have been formulated to encourage and reward the company’s employees to engage in job-related research and development, creation and improvement.
- In the employment contract between the company and its employees, it has been aimed at the employee’s job completion, not based on the job’s needs but related to the job, and not related to the job but completed using the company or the company’s affiliated companies For inventions, new models or designs based on resources or experience, the ownership of patent application rights and patent rights shall be expressly stipulated.
2. Trademark Management
- FAVITE Inc.’s trademark has been approved and registered by the authority since 2004, and after years of layout, it has gradually become complete, covering relevant categories, and has spread throughout major countries.
- Regularly registered and announced trademarks and review their use conditions to assess the necessity of continuing to extend the period of trademark rights.
- According to the company’s future business development, weigh the application for registration of a new trademark.
- Matters related to the application for registration of new trademarks, as well as the extension of the period of trademark rights of trademarks that have been registered and announced, are handled and handled by FAVITE Inc.’s legal office。
3. Copyright Management
- FAVITE Inc. has set up a software research and development unit to develop the application software required for the assembly and matching of various products by itself, so as to effectively reduce the problem of adaptability
- In the employment contract between the company and the employee, the works completed by the employee on the job, the works not based on the needs of the job but related to the job, and the works not related to the job but completed using the company or this company For works on the resources or experience of corporate affiliates, expressly agree on the author, the ownership of the copyright, and the ownership of the original copy of the work.
- When cooperates with others to develop and produce products, the ownership of the copyright and the original copy of the product will be stipulated in the contract.
4. Management of Trade Secrets
- The employees of the company must take corresponding confidentiality measures for sales, research and development, procurement, manufacturing, and operation information, materials and documents that they receive or receive, which have economic value or are confidential.
- The company’s computer equipment can only be used by employees who log in and identify with a password, and the password must be changed regularly, and the rights to read and access computer files are controlled according to the nature of the employee’s job.
- The company will allocate personal access control magnetic cards to employees, and control their access rights according to the nature of the employee’s duties. When visitors enter the company, their identity will be registered, and a temporary identity badge will be provided for them to wear, and they will be accompanied by the company’s employees throughout the process.
- Regularly remind and publicize employees not to disclose business secrets.
- When the employees of the company leave the company, they must hand over the information, materials and documents under their control.
- In the employment contract between the company and the employees, it has been clearly stipulated that the employees shall not disclose, provide or present the information, materials and documents of the company that they have learned that have economic value or confidential nature during the period of employment and within a certain period of time after resignation to others.
- If the company needs to disclose or provide its economic value or confidential information, materials, or documents to a business partner, it must sign a confidentiality contract or clause with the target to protect the above information, materials and documents.
5. Management of Infringement
- In the employment contract between the company and its employees, as well as in the “Intellectual Property Management Measures” stipulated by the company, there are express restrictions on employees:
- No direct, indirect or disguised use or use of software, business secrets or other intellectual property that is not legally authorized in the location, region and scope of the company’s business, and no infringement of other people’s software, business secrets or other intellectual property Behavior.
- Do not directly, indirectly or in disguise use or utilize the software, business secrets or other wisdom of others received, contacted or known in the work or position before employment in the company in the location, region and scope of the company’s business property.
- All works done on the job, or not based on the needs of the job but related to the job, are all created by themselves, and there is no plagiarism, imitation, or infringement of other people’s copyrights, patents, trade secrets, and intellectual property rights in any way. .
- When the company has a dispute over software, business secrets, or other intellectual property, the company’s legal office may, at its discretion, or appoint or entrust external professionals to deal with it.
6. Executive Condition
- FAVITE Inc. reports to the board of directors at least once a year on the intellectual property management plan or its major implementation. The latest report date is November 4, 2022.
- The company’s intellectual property list and achievements as of September 30, 2022, are as follows：
- There are 3 valid invention patents, 2 valid model patents, and 8 valid trademarks.
- There are “Intellectual Property Management Measures” and “R&D Creation and Its Incentive Measures” formulated.
- There are no cases of litigation over software, trade secrets, or other intellectual property.
