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Governance Updates

Promotion and implementation of corporate governance

The dedicated personnel of the Corporate Social Responsibility Office comprises the top decision-making unit responsible for implementation and promotion of corporate governance at Primax. On May 14, 2019, the BOD voted to appoint Associate Vice President Lin, Chun-Hsien (previously the special assistant to the Chairman) as the head of corporate governance reporting directly to the Chairman. The head of corporate governance is responsible for safeguarding shareholder interests and strengthening the effectiveness of the BOD. A change in assignments then resulted in Associate Vice President Su, Yu-Cheng being appointed head of corporate governance by the BOD on August 6, 2020. Mr. Su has more than three years of experience as the chief financial officer of a listed company so has all the necessary qualifications under the law.

The authority and responsibilities of the head of corporate governance include：
(1) Regular (at least annually) reports to the BOD on corporate governance progress and improvement plans
(2) The Organize of BOD and shareholders' meetings in accordance with the law
(3) Preparation of the minutes from BOD and shareholders' meetings
(4) Assisting the directors and supervisors with compliance
(5) Assisting with the appointment and continued development of directors and supervisors
(6) Providing directors and supervisors with the information they need to perform their duties
(7) Other matters as specified in the Company Charters or contracts, such as the TWSE governance evaluation, prevailing trends in corporate governance practices, and amendments to domestic laws and regulations on corporate governance

Corporate governance activities in 2020

1. The schedules for annual BOD meetings and functional committees were planned and organized to ensure compliance with the relevant laws and regulations.
2. Regular communications and meetings were held between the independent directors, CPAs, and the internal auditor.
3. Suitable continuing education courses were organized to ensure that all directors fulfilled their annual quota.
4. The date of the Shareholders' Meeting for 2020 were registered as required by law, and all the related materials and the annual reports were prepared and published in both Chinese and English.
5. Reports were presented to the BOD on May 7, 2020 about the outcome of all corporate governance activities of the preceding year, progress during the current year and corporate governance planning for 2021.
6. External evaluations of the BOD, Board members and functional committees in 2020 were planned and carried out.  The outcome of these assessments will be finalized and reported to the BOD by January 2021.
 

Continuing education for the head of corporate governance in 2020

 

Date of Class Conducting Entity Name of the Class Hours
2020/9/16 Securities and Future Institute Audit Committee Regulations and Actual Operations 3
2020/9/30 Securities and Future Institute Preventing Insider Trading and Insider Share Transactions 3
2020/10/8 Corporate Operation Association Corporate Governance 3.0: Strengthening of Corporate Governance Functions 3
2020/10/16 Taiwan Corporate Governance Association Trends in Group Tax Management in the Post-COVID Era 3
2020/10/25 Securities and Future Institute   Introduction to Strengthening Corporate Sustainability through Hedging with Futures Derivative Products for TWSE/GTSM-listed Companies 3

Policy for communication between independent directors, the head of internal audit, and CPAs

1. Regular meetings are conducted between independent directors and CPAs. Any findings or internal deficiencies discovered by audits of annual financial reports or the review of quarterly consolidated financial statements are referred to the independent directors. Extraordinary meetings may also be convened at any time should serious anomalies arise.

2. Regular meetings are conducted between the internal auditor and the independent directors to report on internal audit progress and internal controls. Any questions from the independent directors are answered on the spot. Such meetings are held at least once per quarter. Each independent director is kept up to date on the progress of internal audits. In the event of any anomaly, the internal auditor can be contacted by phone, or an extraordinary meeting may be convened.

Abstract of Past Communications between Independent Directors and CPAs

Date Discussion Resolution
2019/03/27 1.  Report of the outcome for 2018 entity/consolidated financial reports and internal audit
2. Communications about major accounting treatment policy
3. Explanation of key audit findings
4. Explanation of material revisions to the corporate governance roadmap - enhancements to the role of Directors
5. Important securities management regulations and their interpretation - revisions to the regulations governing the acquisition and disposal of assets, and those governing loans and the provision of endorsements and guarantees.		 The annual financial reports were approved by the Audit Committee and passed by the BOD before being published and submitted to the competent authority by the given date.
2019/05/14 1. Presentation of audit findings for Q1 consolidated financial statements and internal audit report by the CPA.
2. Independent directors found no major anomalies with the Q1 consolidated financial statement and internal audit report.		 The Q1 financial statement was approved by the Audit Committee and passed by the BOD before being published and submitted to the competent authority by the given date.
2019/08/14 1. Presentation of audit findings for Q2 consolidated financial statements and internal audit report by the CPA
2. Independent directors found no major anomalies with the Q2 consolidated financial statement and internal audit report.		 The Q2 financial statement was approved by the Audit Committee and passed by the BOD before being published and submitted to the competent authority by the given date.
2019/11/12 1. Presentation of audit findings for Q3 consolidated financial statements and internal audit report by the CPA.
2. Independent directors found no major anomalies with the Q3 consolidated financial statement and internal audit report.		 The Q3 financial statement was approved by the Audit Committee and passed by the BOD before being published and submitted to the competent authority by the given date.
2020/03/10 1.  Outcome of audits for 2019 entity/consolidated financial reports and internal audit report
2. Communication over major accounting treatment policy with CPA
3. Explanation of key audit findings
4. Important legislative revisions
．Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies
．Regulations Governing the Appointment and Exercise of Powers by the Compensation Committee of a Company with stock is listed on the Taiwan Stock Exchange or the Taipei Exchange
．Regulations governing the establishment of chief governance officer, and timetable for appointment of independent director when the chairman and president are the same person
．Amendments to the regulations governing information to be published in annual reports and prospectuses
．Mandatory announcement of material information in English by TWSE/GTSM-listed companies
．Questions regarding Paragraph 5, Article 240 of the Company Act.
．Amendment to the basis for all allocation of a statutory reserve fund		 The annual financial reports were approved by the Audit Committee and passed by the BOD before being published and submitted to the competent authority by the given date.
2020/05/07 1. Presentation of audit findings for Q1 consolidated financial statements and internal audit report by the CPA.
2. Independent directors found no major anomalies with the Q1 consolidated financial statement and internal audit report.		 The Q1 financial statement was approved by the Audit Committee and passed by the BOD before being published and submitted to the competent authority by the given date.
2020/08/06 1.Presentation of audit findings for Q2 consolidated financial statements and internal audit report by the CPA.
2.Independent directors found no major anomalies in the Q2 consolidated financial statement and internal audit report.		 The Q2 financial statement was approved by the Audit Committee and passed by the BOD before being published and submitted to the competent authority by the given date.
2020/11/06 1. Presentation of audit findings for Q3 consolidated financial statements and internal audit report by the CPA.
2. Independent directors found no major anomalies with the Q3 consolidated financial statement and internal audit report.		 The Q3 financial statement was approved by the Audit Committee and passed by the BOD before being published and submitted to the competent authority by the given date.

 

Abstract of previous communications among the independent directors and the head of internal audit

Date Discussion Resolution
2019/03/27 1. Report on internal audit operations for the year of 2018
2. Report on internal audits operations for the period between January and February, 2019
3. 2018 “Statement of the Internal Control System”
4. Proposed amendment to the internal control system
5. Internal directors were briefed on the scope and effect of the proposed amendment to the internal audit procedure.		 No issues were raised by the independent directors.
2019/05/14 Report on internal audits operations for the period between March and April, 2019 No issues were raised by the independent directors.
2019/08/14 1. Report on internal audits operations for the period between May and July, 2019
2. Reminder from an independent director that attention should be paid to European privacy regulations. Information security management audits will therefore be strengthened during the supervision of subsidiaries.		 No issues were raised by the independent directors.
2019/11/12 1. Report on internal audits operations for the period between August and October, 2019
2. 2020 annual audit plan
3. There were an independent director inquiry about the criteria for assessing the security of audit risks, as well as the division of operational labor between the Information Security and Audit Departments.		 No issues were raised by the independent directors.
2020/03/10 1. Report on internal audit operations for the year of 2019
2. Report on internal audits operations for the period between January and February, 2020
3. 2019 "Statement of the Internal Control System"
4. There was an inquiry from an independent director about the internal control self-assessment report and the procedure for its linkage to the internal control statement.		 No issues were raised over audit implementation by independent directors.
The independent directors were fully briefed by the head of internal audits on the outcomes of the internal control self-assessment and the preparation of the internal control statement.
2020/05/07 1. Report on internal audits operations for the period between March and April, 2020
2. Inquiry from independent director on whether to adjust the audit plan due to Covid-19.		 No issues about audit implementation were raised by the independent directors.
Head of internal audit explained that the annual audit plan can still be completed on schedule through the comparison and analysis of databases with the assistance of local personnel where necessary.
2020/08/06 1. Report on internal audits operations for the period between May and July, 2020
2. Inquiry from independent director on audit process for anomaly identified by internal controls. This included determining the responsibility of managers and connection to management performance.		 No issues about audit implementation were raised by the independent directors.
The internal auditor gave an explanation of the audit process involved in discovery of the internal control anomaly and the corrective actions that were taken.
2020/11/06 1. Report on internal audits operations for the period between August and October, 2020
2. 2021 annual audit plan
3. Inquiry from independent director:
(1)Impact on the Company’s audit operations to business trips being blocked by COVID-19 and the response strategies adopted
(2)The Company should re-assess its requirement for leased/rented employee accommodation in light of reduction in business trips		 1. No issues about audit implementation were raised by the independent directors.
2.
(1) In response to business trips being blocked by Covid-19, the internal auditor explained the need for computerized audits to be strengthened.
(2) The necessity for leasing/renting "employee accommodation" will be assessed and a report made to the Audit Committee.
 

Major Shareholders

Date: March 25, 2023

Name of Shareholder Number of Shares Percentage of Total Issued Shares
JPMorgan Chase Bank, N.A., Taipei Branch in Custody for Stichting Depositary APG Emerging Markets Equity Pool 12,231,000  2.66%
LGT Bank (Singapore) Ltd. 9,936,000  2.16%
FUBON LIFE INSURANCE CO., LIMITED. -TWOTC-FFI 9,764,000  2.13%
Pan, Yung-Chung 7,575,046  1.65%
Yeh, Yu-Fen's trust property account under custody of Cathay United Bank 7,380,227  1.61%
SAUDI CENTRAL BANK - BlackRock Financial Management Inc. as external fund manager 6,373,000  1.39%
Norges Bank 5,825,000  1.27%
HSBC GLOBAL INVESTMENT FUNDS - ASIA EX JAPAN EQUITY SMALLER COMPANIES 5,277,000  1.15%
FARGLORY LIFE INSURANCE CO., LTD. 5,237,000  1.14%
JPMorgan Chase Bank, N.A., Taipei Branch in Custody for Franklin Templeton Investment Funds - Templeton Asian Smaller Companies Fund 4,974,000  1.08%