1. Audit Committee

1. The Audit Committee of the company was established on February 23, 2022, consisting of 3 members.

2. The current term is from February 23, 2022, to February 22, 2025. As of Aug 7, 2024, the committee has held 11 meetings. The attendance of the members is as follows:

Title Name Actual Attendance (B) Proxy Attendance Required Attendance (A) Attendance Rate (B/A) Remarks
Independent Director Jiang-Liang Lin 14 0 14 100.00 Convener
Independent Director Wei-Chen Wang 13 1 14 93.00
Independent Director Ming-huang Chang 14 0 14 100.00

Professional Qualifications and Experience of Audit Committee Members

Please refer to the information on board members.

Key Focus Areas of the Audit Committee for the Year

  • Establishing or amending the internal control system in accordance with Article 14-1 of the Securities and Exchange Act.
  • Assessing the effectiveness of the internal control system.
  • Establishing or amending procedures for handling significant financial and business activities.
  • Matters involving the interests of the directors themselves.
  • Major asset or derivative transactions.
  • Significant lending, endorsements, or guarantees.
  • Raising, issuing, or privately placing equity-related securities.
  • Appointment, dismissal, or remuneration of the certifying CPA.
  • Appointment or dismissal of financial, accounting, or internal audit officers.
  • Annual and semiannual financial reports requiring CPA review and certification.
  • Other significant matters as stipulated by the company or competent authorities.

2. Remuneration Committee

1. The Compensation Committee of the company was established on October 13, 2011, consisting of 3 members.

2. The current term is from February 23, 2022, to February 22, 2025. As of Aug 7, 2024, the committee has held 6 meetings. The attendance of the members is as follows:

Title Name Actual Attendance (B) Proxy Attendance Required Attendance (A) Attendance Rate (B/A) Remarks
Independent Director Wei-Chen Wang 7 0 7 100.00 Convener
Independent Director Jiang-Liang Lin 7 0 7 100.00
Independent Director Ming-huang Chang 7 0 7 100.00

Responsibilities of the Compensation Committee

  • Establish and regularly review performance evaluation standards and policies, structures, and systems for compensation.
  • Regularly assess the achievement of performance goals and determine compensation content and amounts accordingly.
  • Disclose performance evaluations and compensation decisions in the annual report and shareholder meetings.

 

Policy and Guidelines


In adherence to the principles of fairness and honesty, our company conducts business activities guided by a comprehensive framework to uphold integrity. This framework includes the Code of Ethical Conduct, Procedures for Ethical Business Practices and Guidelines for Conduct, and Standards of Ethical Behavior, all approved by the Board of Directors. The Sustainability Development Committee oversees implementation, reporting to the Board at least annually. The most recent report was presented on November 7, 2024.


Preventive Measures


Prevention of Insider Trading
Our company has established mechanisms for the disclosure and management of significant information through the Insider Trading Prevention Operational Procedures, accessible to employees via the internal "DCC Information Center." These measures ensure compliance and prevent occurrences of insider trading.


Integrity Clauses
Employees sign an employment agreement upon hiring, which includes provisions for the protection and appropriate use of confidential information within their job scope. These confidentiality obligations extend beyond employment. Additionally, relevant documents, including the Code of Ethical Conduct, are disclosed on the company website. Suppliers are required to sign a Supplier Integrity Commitment.


Conflict of Interest Avoidance
The company's Board of Directors Meeting Rules include a conflict of interest avoidance policy. Directors must disclose any personal interest related to agenda items during board meetings. If such interests may harm the company, directors can express opinions but must abstain from discussion and voting, and cannot represent others in such matters. This policy has been fully implemented, with related abstentions documented in meeting minutes.

 

Regular Internal Training
Annual training sessions reinforce employees' understanding and application of core values related to integrity management. Topics include corporate social responsibility, professional ethics, protection of confidential information, and intellectual property rights. These initiatives enhance legal awareness and ethical standards among all employees.

 

Whistleblowing Mechanism


To ensure comprehensive implementation of ethical practices, a complaint mailbox (檢舉制度4.3) is available for internal and external stakeholders to report any violations of integrity. All reports are handled confidentially by designated units, investigated thoroughly, and, if verified, addressed with appropriate action.

 

Implementation Overview

  1. All employees sign an employment agreement upon joining.
  2. Directors and senior managers achieve a 100% signing rate for integrity statements.
  3. Full compliance with the conflict of interest avoidance policy by the Board.
  4. No whistleblower reports were received this year.
  5. Conducted internal training on integrity management, insider trading prevention, information security, and trade secrets protection, with 110 participants completing a total of 252 hours.
1. Ethical Corporate Management Best Practice Principles
PDF
2. Procedures for Ethical Management and Guidelines for Conduct
PDF
3. Codes of Ethical Conduct
PDF
4. Ethical Corporate Summy Checklist
PDF

Purpose of Internal Audit

The purpose of conducting internal audits is to assess the effectiveness, efficiency, and compliance of the company's policies and procedures, assist the board of directors and management in evaluating internal control systems, identify deficiencies and imbalances, and provide recommendations for improvement. This ensures that the internal control system remains effective and serves as a basis for revising internal control measures.

Internal Audit Organization

The internal audit unit of our company reports directly to the board of directors and is staffed by an audit supervisor and personnel approved by the audit committee and the board of directors.

Operation of Internal Audits

Audit Scope

The scope of audits covers all operations of the company and its subsidiaries.

Audit Methods

Audit work focuses on evaluating the effectiveness of internal controls for various business activities and assessing the quality of risk management and control. Regular audits and unscheduled audits are conducted as needed.

Each year, the company prepares an audit plan based on the risk assessment results of various activities, specifying the scope and frequency of audits. The audit findings and recommendations for improvements are reported to the audit committee and the board of directors, serving as a basis for improving the internal control system.

Audit Reports

Except for reports approved by the audit committee, the audit supervisor also reports periodically to the audit committee and the board of directors on the progress and results of the audit.

 

I. Information Security Management Strategy and Structure

(1) Information Security Risk Management Structure

1. Information Security Governance Organization

The company’s dedicated information security unit is managed by the Information Department, currently with a Chief Information Security Officer (CISO) (held concurrently by the General Manager), one Information Security manager and one security personnel. They are responsible for the formulation, implementation, risk management, and compliance of information security policies, with regular reviews and adjustments. The Audit Office conducts annual audits of the information security management operations and reports the results to the Board of Directors and the Audit Committee.

2. Information Security Organizational Structure

(2) Information Security Policies

The company has established operational procedures such as "Information Management Procedures", "Information System Access Control Procedures", "Data Backup Management Procedures", and "Information Security Inspection Procedures".

(1) Establish monitoring and control mechanisms for information assets, with all personnel having the responsibility and obligation to protect their respective information assets, ensuring the confidentiality, integrity, and availability of the company’s critical information assets.

(2) Job responsibilities should be appropriately segregated, and only the necessary permissions and information required for job completion should be granted.

(3) Necessary assessments should be conducted when hiring personnel, and relevant operational guidelines should be signed to ensure that maintaining information security is an obligation embedded in daily work.

(4) Establish a business continuity management mechanism to maintain its applicability.

(5) The company’s information security measures must comply with legal regulations and the company’s information security-related procedures; the establishment and modification of all information security standards or procedures must adhere to the mechanisms of the information security management system.

 

1. Specific Management Plans:

Information security management measures are explained as follows:

(1) Regulatory Compliance: The company has established several internal information security standards and procedures to regulate the information security behaviors of personnel, regularly reviewing relevant systems to ensure compliance with operational changes and adjusting as needed.

(2) System Protection: To prevent various internal/external information security threats, in addition to network architecture design, the company has also implemented firewall and endpoint protection software to enhance the overall security of the information environment.

(3) Personnel Training: The company regularly promotes information security issues to enhance employees’ information security knowledge and professional skills.

Specific Practices:

Item Specific Management Plan

Network Control

Restrict access to the company’s network to only company devices and wired network access points. The firewall restricts access to VPN resources; wireless networks provide only internet services, prohibiting the use of wireless networks to connect to internal company resources.

System Access Control

Systems include ERP, Run Portal, E-Mail, VPN, etc. For new employees, the management department fills out the "New and Change Information System Account and Access Control Application Form," and the Information Engineering unit creates accounts and sets default permissions. Upon employee resignation, the Information Engineering unit deletes or disables the employee’s account according to the "Resignation Management Procedures." The Information unit also periodically provides access lists to supervisors to review the appropriateness of their subordinates’ access rights.

Data Backup and Restoration

Regularly back up important file data; the file server automatically synchronizes with the file synchronization server and off-site file server in real-time.

Virus Protection

The firewall has built-in virus engines/WAN control, and computers are equipped with endpoint protection software.

Data Leakage Prevention

During the product development process, output data at each stage is reviewed by the supervising unit and transferred to the Document Control Center (DCC) for filing. If product development documents are needed for reference or borrowing, a "Product Development Document Borrowing and Copying Application Form" must be filled out and approved by the authorized supervisor before borrowing and copying. Critical R&D data is stored on the company’s file server, located behind the firewall, with access controls in place, granting read-only access to approved applicants.

Review and Continuous Improvement

Item Specific Management Plan

Education and Training Promotion

Information security issues and recent events are periodically promoted to all employees via internal emails. New employees must complete the "Information System and Information Security Introduction Course" to ensure they understand the company’s information security policies.

 

2. Resources Invested in Information Security Management

The company regularly reviews the overall information security planning to reflect the current situation and strengthens the promotion of information security concepts among employees. In addition, the company regularly inspects and maintains host equipment and firewalls, incorporating computer information system-related control operations into the annual audit plan.

 
II. Information Security Risks and Mitigation Measures

The company has established information security protection measures, but it cannot guarantee complete avoidance of cyber-attacks. Continuous improvements to information security standards are necessary to keep up with evolving threats.

 

III. Major Information Security Incidents
In the past year and up to the date of the annual report, the company has not experienced any major information security incidents. However, with the increasing threats to information security, the requirements and tools for information security will need to evolve accordingly.

 

IV. Board Reporting Date
November 7, 2024

Intellectual Property Management Vision

Our company places a high emphasis on compliance with laws and the protection of intellectual property rights. Understanding the importance of laws and intellectual property to enterprises, we established the Legal and Intellectual Property Department at the inception of our company. This department integrates legal resources with intellectual property management to identify legal risks related to intellectual property, achieving a comprehensive risk management mechanism that includes "planning, prevention, management, execution, obstruction, and perfection." Our company does not proactively use legal actions as a tool for business competition but instead strengthens legal measures and emphasizes preemptive prevention as a means of defense against disputes. We have established a comprehensive intellectual property management system to rigorously protect our advanced and critical technologies developed through the dedication of our research and development personnel, and to defend against competitors' attempts to use intellectual property litigation as a means of achieving business competition objectives, thereby reducing the risk of operational infringement and achieving a strategy of sustainable operation.

Basic Policies for Intellectual Property Management

Our company combines the basic policy of intellectual property rights with the company's business goals and research and development resources, ensuring that our core technologies, innovative inventions, research and development works, know-how, trademarks, and trade secrets are well protected and that the relevant rights of others are not infringed.

Intellectual Property Management System

1. Patent Rights and Integrated Circuit Layout Protection

  1. Our company has established the "Patent Proposal Incentive Plan," setting up a mechanism for patent review committees that clearly stipulates the classification of ideas/technologies, the patent application process, the determination of application categories and countries, the agreement on patent ownership, and the obligations of patent inventors. All patent proposals must be reviewed by the patent review committee, supplemented by a hierarchical evaluation process to distinguish between those that will be treated as trade secrets or filed for patent applications based on the importance and nature of the technology. At the same time, we have set up a reward system for employee patent proposals and granted patents to enhance and adequately protect our patent assets in terms of both quality and quantity.
  2. We have established a complete patent management system to manage patent-related information and the payment of maintenance fees, and to conduct annual reviews of patent rights.
  3. We regularly review patent assets and effectively combine existing patent assets with our company's projects or products to enhance the market competitiveness and economic value of our products.
  4. We actively engage in strategic collaborations with other companies, using existing patent rights to develop customized products for customers or for cross-licensing, thereby maximizing the use of patent assets and achieving a win-win situation between our company and others.
  5. Before developing new products, we conduct patent searches, design patent maps, and regularly monitor competitors' patent technologies to provide references for our R&D personnel in developing innovative products, thereby avoiding infringement and respecting third-party intellectual property rights while reducing the waste of our company's R&D resources.
  6. We have established important circuit layout output and protection policies that regulate the qualifications, applications, levels, permissions, and methods of access personnel.
  7. Our R&D personnel regularly engage in brainstorming sessions and idea excavation to inspire infinite possibilities of innovative technologies and enhance the quality of patent proposals.
  8. We conduct regular internal patent education and training, explaining patent laws, promoting patent application procedures, and discussing practical cases.

2. Trade Secret Protection

  1. We have formulated various document and data control procedures, specifying the classification and control regulations for all internal and external documents and data.
  2. We have established computer file management, network, and information security control procedures to ensure the confidentiality, integrity, security, and availability of all intangible assets, information, and trade secrets. Important drawings, software programs, electronic documents, etc., must be strictly encrypted and stored.
  3. We have established personal data protection management methods to ensure the correct use and storage of internal and external personal data.
  4. We have established physical access control and important entrance and exit controls, along with security measures to adequately protect the company's trade secrets.
  5. New employees undergo orientation training and sign employment contracts upon joining, informing them not to bring trade secrets from previous employers to our company. They must only use confidential information created and known during their employment within their job scope. Employees agree to comply with the employee code of conduct, in-service confidentiality obligations, loyalty obligations, and post-employment confidentiality obligations, and are prohibited from disclosing any company confidential information to third parties without prior written consent from the company.
  6. Employees involved in major confidential projects during their employment must also sign specific confidentiality agreements.
  7. We sign confidentiality agreements with customers, suppliers, and agents to adequately protect the trade secrets of both parties.

3. Trademark Protection

  1. To enable third parties to distinguish the source and representation of goods or services, our company applied for trademarks in multiple countries at the time of its establishment, actively obtaining trademark rights for the company's and its affiliates' business names and product representations. Through trademark rights, we build the company's reputation, guide market trust, and further create the company's brand value.
  2. Trademark rights are the soul of a well-managed company. Applying for and registering trademarks can obtain exclusive trademark rights protected by law, effectively preventing third parties from registering identical or similar trademarks on identical or similar goods or services.
  3. We regularly manage and review the trademark register, handling trademark renewals and usage declarations according to deadlines to ensure the validity of trademarks.
  4. We effectively exercise trademark rights by marking approved trademark designs on software, documents, products, packaging, and various related items to enhance trademark distinctiveness and prevent improper infringement, thereby reducing damage to the company's reputation.
  5. We track trademark status quarterly and search for similar trademarks to prevent infringement of the company's trademark rights.
  6. In contracts with partners, we clearly define the scope, duration, and marking methods of trademark licensing to ensure legal and reasonable use of trademarks.

4. Copyright Protection

  1. In the employment contracts of new employees, we clearly stipulate that "the copyright of works produced on duty" or "the copyright of works produced using company resources" belongs to the company to protect the company's copyrights.
  2. We implement policies for R&D logs/notes, recording and properly preserving ideas or technologies produced by internal R&D personnel during the innovation and development process.
  3. We designate specific custodians and encrypt/lock important R&D-related documents or disks.
  4. We regulate the use of company computers and the installation/uninstallation of software, all controlled by the IT department to prevent copyright infringement or being infringed.
  5. We clearly stipulate copyright ownership with customers, suppliers, and agents and require partners to guarantee that they do not infringe on the intellectual property rights of others.

Implementation

In response to the intellectual property management plan, our company revises related management methods in real-time to comply with updated regulations and regularly reviews implementation status:

1. Patent Rights and Integrated Circuit Layout Protection

  1. Our company summarizes and reports the management and implementation results of intellectual property rights to the Board of Directors once a year. The report date for the Board of Directors is as follows: November 07, 2024.
  2. As of the end of October 2024, our company has accumulated 108 approved patents worldwide, distributed in Taiwan, China, the United States, and other regions, with 3 patents pending.
  3. We conduct prior art searches for our company's R&D innovation projects, strengthen patent layouts, assist R&D teams in design avoidance, and obtain patent rights to create competitiveness and economic value for company products.
  4. We regularly maintain patents and review their applicability to company products or projects, while also creating patent maps and R&D flowcharts that align with the company's business goals.

2. Trade Secret Protection

  1. We regularly collaborate with the IT department to promote trade secret protection and conduct employee computer inspections, strengthening trade secret and information security management.
  2. We regularly collaborate with the R&D department to inspect R&D logs/notes, properly protecting the trade secrets of important core technologies.
  3. We regularly inventory and establish management lists for the scope of trade secrets.
  4. We establish a cross-protection mechanism for patents and trade secrets.
  5. We strengthen external confidentiality measures and specify confidentiality obligations and scopes in confidentiality agreements.
  6. We set up account passwords for personal computers and enforce regular password updates. Appropriate firewall equipment is installed to block malicious external attacks.
  7. We implement access control, setting permissions for employee access cards based on job nature. Visitors must register their identities when entering the company, and unauthorized access to the warehouse is prohibited.
  8. We regularly conduct educational training on trade secret protection and supervise its implementation in the workplace environment.

3. Trademark Protection

  1. As of the end of October 2024, our company has obtained 18 approved trademark rights worldwide.

4. Copyright Protection

  1. To avoid copyright infringement, all software installation permissions are managed uniformly by the IT department.
Stakeholders

Pursuing sustainable development, the company establishes transparent and effective multi-directional communication channels with all stakeholders to understand their needs and expectations for Fintek. This serves as an important reference for developing business strategies, CSR policies, and related plans.

Stakeholder Identification

Stakeholders are defined as individuals or groups who affect or are affected by the company. Based on this definition, we have identified four main stakeholder categories: investors, employees, customers, and suppliers.

Stakeholder Issues, Communication Channels, and 2024/09 Communication Results
Stakeholder Issues of Concern Communication Channels & Frequency Contact Window 2024/09 Communication Outcomes
Shareholders and Investors Business and financial information
Corporate governance
Shareholder rights
Regulatory compliance		 *Market Observation Post System (as required)
*Investor conferences (irregular)
*Investor email contact
*Annual shareholders’ meeting		 Spokesperson: VP Kris Chen
Tel: (03)5600-168
Email: kris_chen@fintek.com.tw
Stock Agent: Mega Securities Co., Ltd.
Address: 1F, No. 95, Sec. 2, Zhongxiao E. Rd., Taipei
Tel: (02)3393-0898		 *Shareholder meeting attendance rate: 56.77%
*Investor section and contact info available on company website; all inquiries are directed to appropriate personnel for prompt handling
Employees Employee benefits
Career development
Regulatory compliance
Occupational safety and health
Labor relations		 *Welfare announcements (irregular)
*Training sessions (irregular)
*Performance evaluations (biannually)
*Labor-management meetings (quarterly)		 HR Department
Tel: (03)5600-168
Email: hr@fintek.com.tw		 *4 birthday events, 8 travel info posts
*Onboarding and professional training
*Performance reviews twice a year
*4 labor-management meetings
Customers Product quality and delivery
Customer service
Product showcases		 *Service hotline and email
*Annual customer satisfaction survey
*Real-time updates on product software via official website
*Dealer meetings (twice/month)		 Customer Service
Tel: (02)8227-8027
Email: sales@fintek.com.tw		 *One customer satisfaction survey with average score of 9.1/10; all issues resolved
*15 complaints received and resolved
Suppliers Supplier management
Business integrity		 *Two-way communication
*Supplier evaluation (regular)
*Annual audits of each contractor		 Product Quality
Tel: (03)5600-168
Email: qa@fintek.com.tw		 *4 contractor audits conducted
Government / Regulatory Agencies Regulatory compliance
Financial performance
Information security
Waste management
Labor relations		 *Government policy briefings (irregular)
*Market Observation Post System (irregular)
*Company website (irregular)
*Official document correspondence (irregular)		 Spokesperson: VP Kris Chen
Tel: (03)5600-168
Email: kris_chen@fintek.com.tw		 *All required disclosures made in accordance with regulations
*Official letters from authorities (e.g. Ministry of Labor, MOEA, Tax Bureau) are forwarded to responsible departments for processing

The stakeholder concerns and communication outcomes are compiled and reported to the Board of Directors once annually. The latest report was submitted on November 7, 2024.

Month

Monthly

Same Month Last Year

YoY

YTD

Previous YTD

YoY

Jan.

43,461

39,635

9.65%

43,461

39,635

9.65%

Feb.

39,084

36,461

7.19%

82,545

76,096

8.47%

 

Company Spokesperson

Kris Chen

Phone No.：+886-3-560-0168

kris_chen@fintek.com.tw

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