Primax Electronics has implemented a set of "Business Integrity Procedures and Behavioral Guidelines" that emphasizes integrity in business dealings. Employees are prohibited from accepting in appropriate gains or engaging in improper competition, and are required to enforce information transparency, respect intellectual property rights, protect the privacy of every business partner, and act responsibly when procuring supplies. The Company protects informants and has many different communication channels in place that allow stakeholders such as : employees、suppliers and customer to voice out freely without fear of retaliation. The Company contributes to cultural development and cares for the socially disadvantaged; it is actively involved in charity and constantly strives for improvement and compliance as a means of fulfilling social responsibilities, and Primax plans to establish anti-corruption policies in 2023 .【Please refer to:『Operational Procedures for Ethical Management and Guidelines of Conduct』 for the detail of our ethical management.】

Furthermore, the Company's "Work Rules" and "Employee Code of Conduct" require all employees to comply with law sand ethical guidelines when performing business activities, whereas suppliers and business partners are bound to sign a "Supplier Statement" in order to create a fair, honest, trustworthy and transparent trade environment.

Meanwhile, positions of special nature including but not limited to procurement, quality control, administration, warehousing and raw material control are rotated on a regular basis. The Company has a job rotation panel available to determine which positions are subject to rotation and how the rotation should be arranged. The panel announces its rotation guidelines in the beginning of each year, the Human Resources Department then follows and coordinates job rotation across departments, and produces an "Annual Job Rotation Plan" detailing the positions and the personnel involved for review by the panel. This practice works in favor of reducing risks of improper gain, and keeps the organization active at the same time.

Primax's important internal regulations

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Employee code of conduct

Primax carries out our corporate mission of “bringing investors and customers the greatest gain and enabling employees to work happily.” To achieve these goals, we need to earn the trust and support of customers, business partners, investors, and the public. Honest, credible, and disciplined employees become fundamental. All employees should abide by the “Employee Code of Conduct” when carrying out relevant business activities, including upholding personal moral standards, gifting and hosting regulations, protecting operations secrecy, avoiding conflict of interests, abiding by fair transaction, reporting method, and code of disciplinary action.

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Business integrity training

Primax Electronics organizes communication meetings, promotional videos and fun activities each year to convey integrity values in a comprehensive yet easily understandable manner. The Company also arranges for employees to undergo anti-corruption training. Currently, all new recruits are required to undergo 8 hours of orientation within the first month onboard, which includes a 1 -hour introduction to business integrity and ethics. Primax received a total of 4 , 323 new recruits in 2022 and delivered 4 , 323 hours of integrity/ethics training, which covered 100 % of new recruits. The training arrangement for existing employees is still under planning, and the future plan is to use online courses for training. In2022 ,  Tymphany Huizhou conducted a 0 . 5 -hour RBA basic education training (including ethics and integrity) for a total of 6 , 378 employees and non-employee workers, with a total training time of 3 , 144 . 5 hours. The training coverage for new hires was 100 % (other locations have not conducted RBA basic education training for new hires and existing employees yet).

In addition to employees, Primax works with third-party accreditation entities to hold annual social responsibility training for suppliers every year step by step. The training is mainly based on the RBA Code of Conduct, including four major topics of labor, health and safety, environment, and a code of ethics. In addition to communicating the RBA COC V 7 . 0 standards with all suppliers through the GPMS system, we offered relevant training sessions to let suppliers understand the degree of Primax’s concern about the above issues.【Please refer to:『responsable supply chian/supply chian management』 for the percentage of suppliers which received training.】

Avoidance of conflicting interests

The Company has implemented "Corporate Governance Code of Conduct" and "Business Integrity Procedures and Behavioral Guidelines," which state that, if a director, manager, board meeting participant or any of the corporate entity they represent is considered a stake holder to a topic discussed in board meeting, the party must state the stakes involved during the current meeting session and shall disassociate from all discussions and voting if the stakes are in conflict against the Company's interests. In addition, the concerned party may not exercise voting rights on behalf of other directors. All of the Company's directors are highly disciplined in their conducts, and have managed to disassociate themselves from agendas that present conflicting interest. For more disclosures regarding avoidance of conflicting interests by the highest governance body,please refer to the corporate governance chapter in "P23 of the 2022 Annual Report".

Robust internal audit system

To enforce corporate governance and self-monitoring, Primax Electronics has developed an internal check system based on operating activities of the Company and subsidiaries and Regulations Governing Establishment of Internal Control Systems by Public Companies that incorporates five main elements: "Environment control," "Risk assessment," "Processing of control," "Information and communication," and "Supervision processing."

The Company has set up an operation audit unit, including a chief auditor and two dedicated personnel. To ensure the effectiveness of internal control system in accomplishing the Company's operational goals and the effectiveness of self-verification practices across all units, Primax's General Manager serves as the convener of this unit and is fully authorized to inspect and evaluate the internal control system for defects and efficiency. In doing so, we ensure that design and implementation of the system continue to remain effective in helping the board of directors and the management fulfill their duties and supporting sound corporate governance practice.

The operation audit unit had completed inspection of all internal departments according The operation audit unit had completed inspection of all internal departments according to the 2022 internal inspection plan. Departments are being required to make improvements to the various defects highlighted during inspection, whereas the chief auditor engages independent directors in meetings at least once per quarter to report the current progress of internal audit and control, and reply to whatever queries independent directors may have. Each independent director is constantly updated on internal audit issues, and may call meetings or contact the chief auditor by phone at any time under exceptional circumstances. Please refer to:『investors/Corporate governance/governance updates 』for details of the communication between independent directors and the chief internal auditor/CPAs.