Ethical Corporate Management

The Company has set up the Administration Department as a dedicated unit to promote the integrity management, which is responsible for formulating and monitoring the implementation of integrity management policies and preventive plans, and reporting to the Board of Directors on a regular basis.
The Board of Directors and the management of the Company will actively implement the commitment made in the Integrity Management Policy and will actually execute it in the internal management and business activities.
The Company’s “Code of Conduct for Integrity” has been approved by the Board of Directors for implementation, and submitted to the shareholders’ meeting. The same procedure is applicable to any amendments thereto.

Procedures for Integrity Management and Guidelines for Conduct

Article 1: Purpose and Scope of Application

The Company engages in business activities based on the principles of fairness, integrity, trustworthiness, and transparency. In order to implement the integrity management policy and actively prevent unethical conduct, the Procedures for Integrity Management and Guidelines for Conduct are adopted pursuant to its Code of Conduct for Integrity, with a view to providing all personnel of this Company with clear directions for the performance of their duties.

Article 2: Applicable Range

For the purposes of these Procedures and Guidelines, the term “personnel of this Company” refers to any director, managerial officer, employee, appointee, and substantial controller, of this Company or its group enterprises and organizations. Any provision, promise, request, or acceptance of improper benefits by any of the Company’s personnel through a third party will be presumed to be an act by the Company’s personnel.

Article 3: Unethical Conduct

For the purposes of these Procedures and Guidelines, “unethical conduct” means that any personnel of this Company, in the course of their duties, directly or indirectly provides, promises, requests or accepts improper benefits or commits a breach of ethics, unlawful act, or breach of fiduciary duty for purposes of acquiring or maintaining benefits. The counterparties mentioned in the preceding paragraph include public servants, candidates for political offices, political parties or party officers, as well as any public or private enterprises or organizations, and their directors, supervisors, managerial officers, employees, substantial controllers or other stakeholders.

Article 4: Type of Benefits

The benefits referred to herein include any money, gratuity, gift, commission, position, service, preferential treatment, rebate, facilitating payment, entertainment, dining, or any other item of value in whatever form or name.

Article 5: Dedicated Unit and Obligations

The Company appoints its Human Resources and Administration Department as the dedicated unit (hereinafter referred to as the dedicated unit of the Company) to handle the amendment, implementation, interpretation, consultation, and notification of these Procedures and Guidelines herein and supervision of the implementation. The dedicated unit shall be responsible for the following matters and report them to the Board of Directors on a regular basis:

  1. To assist the Company to integrate the integrity and ethical values into its management strategy and adopt measures to ensure the integrity management in accordance with laws and regulations.
  2. To adopt programs to prevent unethical conduct and to set out in each program the standard operating procedures and conduct guidelines with respect to this Company’s operation and business.
  3. To plan the internal organization, structure, and allocation of responsibilities and set up check-and-balance mechanisms for mutual supervision of the business activities within the business scope which are possibly at a higher risk for unethical conduct.
  4. To promote and coordinate integrity policy training.
  5. To plan a whistle-blowing system and ensure its operating effectiveness.
  6. To evaluate whether the prevention measures taken for the purpose of implementing ethical management are effectively operating, and regularly evaluate and report on the compliance of the relevant business procedures.
  7. Prepare and properly retain documented information on the integrity management policy and its compliance statement, implementation of commitments, and enforcement status.

Article 6: Prohibition against Offering or Accepting Improper Benefits

Unless otherwise under one of the following circumstances, when providing, accepting, promising, or requesting, either directly or indirectly, any benefits as specified in Article 4, the conduct of the given personnel of the Company shall comply with the provisions of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies and these Procedures and Guidelines, the relevant procedures shall have been carried out:

  1. The conduct is undertaken to meet business needs and is in accordance with local courtesy, convention, or custom during domestic (or foreign) visits, reception of guests, promotion of business, communication, and coordination.
  2. The conduct has its basis in ordinary social activities that are attended or others are invited to hold in line with accepted social custom, commercial purposes, or developing relationships.
  3. Invitations to guests or attendance at commercial activities or factor visits in relation to business needs, when the method of fee payment, number of participants, class of accommodation, and the time period for the event or visit have been specified in advance.
  4. Attendance at folk festivals that are open to and invite the attendance of the general public.
  5. Rewards, emergency assistance, condolence payments, or honorariums from the management.
  6. Providing or accepting money, property or other benefits from a person other than relatives or friends; or gifts of property given by another party to the majority of the personnel of the company, provided that the total market value of such property is within the normal social or customs scope.
  7. Gifts or properties received due to engagement, marriage, maternity, relocation, assumption of a position, promotion or transfer, retirement, resignation, or severance, or the injury, illness, or death of the recipient or the recipient’s spouse or immediate family members with the market value within the normal social or customs scope.
  8. Other conduct that complies with the rules of the Company.

Article 7: Procedures for Disposal of Improper Benefits

Except under any of the circumstances set forth in the preceding article, when any personnel of this Company are provided with or are promised, either directly or indirectly, any benefit as specified in Article 4 by a third party, the matter shall be handled in accordance with the following procedures:

  1. If there is no relationship of interest between the party providing or offering the benefit and the official duties of the Company’s personnel, the personnel shall report to their immediate executive within 3 days from the acceptance of the benefit, and the responsible unit shall be notified if necessary.
  2. If a relationship of interest does exist between the party providing or offering the benefit and the official duties of the Company’s personnel, the personnel shall return or refuse the interest, report the event to their direct executive, and notify the Company’s dedicated unit. If the interest cannot be returned, the items shall be given to the Company’s dedicated unit for handling within three days of receiving the items.

A relationship of interest between the party providing or offering the benefit and the official duties of the Company’s personnel, as referred to in the preceding paragraph, refers to one of the following circumstances:

  1. When the two parties have commercial dealings, a relationship of direction and supervision, or subsidies (or rewards) for expenses.
  2. When a contracting, trading, or other contractual relationship is being sought, is in progress, or has been established.
  3. Other circumstances in which a decision regarding the Company’s business, or the execution or non-execution of business, will result in a beneficial or adverse impact.

The responsible unit of the Company shall make a proposal, based on the nature and value of the benefit under paragraph 1, that it be returned, accepted on payment, given to the public, donated to charity, or handled in another appropriate manner, and submit the proposal to the Chairman for approval before implementation.

Article 8: Prohibition of Facilitation Fees and Handling Procedures

The Company shall not offer or promise to offer any facilitating payment.

If any personnel of the Company provide or promise a facilitating payment under threat or intimidation, they shall submit a report to their immediate executive stating the facts and shall notify the Company’s dedicated unit.

Upon receipt of the report under the preceding paragraph, the dedicated unit shall take immediate action and undertake a review of relevant matters in order to minimize the risk of recurrence. In a case involving alleged illegality, the dedicated unit shall also immediately report to the relevant judicial authorities.

Article 9: Procedures for Handling Political Contributions

The Company maintains a politically neutral position and does not make any political contributions.

Article 10: Procedures for Handling Charitable Donations or Sponsorships

The Company shall provide charitable donations or sponsorships in accordance with the following regulations, which shall be reported to the Chairman of the Board of Directors for approval and notified to the dedicated unit of the Company. If the amount is higher than NT$1 million, it shall be reported to the Board of Directors for approval:

  1. The donations or sponsorships shall comply with the local laws and regulations.
  2. The related decisions shall be documented in written.
  3. A charitable donation shall be given to a valid charitable institution and may not be a disguised form of bribery.
  4. The returns received as a result of any sponsorship shall be specific and reasonable, and the receiver of the sponsorship shall not be the counterparty of the Company’s business or a party with which any personnel of the Company has a relationship of interest.
  5. After the donation or sponsorship has been granted, it must be confirmed that the funds are used in accordance with the intended purpose.

Article 11: Avoiding Conflicts of Interests

If the agenda items to be discussed at the Board meeting involve a conflict of interest with the Company’s directors, managerial officers and other stakeholders who are present or attend the Board meeting or the legal entities represented by them, they shall disclose the important contents of the conflict of interests at the Board of Directors meeting, and shall refrain from discussion or vote on the relevant proposals nor shall exercise the right to vote for other directors if there is likelihood of impairment to the Company’s interest. The directors shall be self-disciplined and shall not support each other improperly.

If an employee of the Company finds any conflict of interest with himself/herself or the juristic person he/she represents, or any situation that may result in improper benefits for himself/herself, his/her spouse, parents, children or any other stakeholders, he/she shall report the relevant information to his/her immediate executive and the Company’s dedicated unit at the same time, and the supervisor shall provide appropriate guidance.

The Company’s employees shall not use the Company’s resources for business activities outside of the Company, nor may any personnel’s job performance be affected by his/her involvement in the commercial activities other than those of this Company.

Article 12: The Unit in Charge of Confidentiality Regime and Its Responsibilities

The Company has set up a dedicated unit in charge of formulating and implementing procedures for managing, preserving, and maintaining the confidentiality of this Company’s trade secrets, trademarks, patents, works and other intellectual properties and it shall also conduct periodical reviews on the results of implementation to ensure the sustained effectiveness of the confidentiality procedures.

The Company’s employees shall faithfully abide by the operational directions pertaining to intellectual properties as mentioned in the preceding paragraph and shall not disclose the Company’s trade secrets, trademarks, patents, works and other intellectual properties to any other parties of which they have learned, nor may they inquire about or collect the Company’s trade secrets, trademarks, patents, works and other intellectual properties that are not related to their duties.

Article 13: Prohibition of Unfair Competition

The Company engages in business activities in accordance with the Fair Trade Act and related competition regulations and does not fix prices, make rigged bids, establish output restrictions or quotas, or share or divide markets by allocating customers, suppliers, territories, or lines of commerce.

Article 14: Preventing Products or Services from Damaging Stakeholders

The Company collects and understands the relevant regulations and international standards governing its products and services which it shall observe and publish all guidelines to cause personnel of this Company to ensure the transparency of information about, and safety of, the products and services in the course of their research and development, procurement, manufacture, provision, or sale of products and services.

The Company shall adopt and publish on its website on the protection of the rights and interests of consumers or other stakeholders to prevent its products and services from directly or indirectly damaging the rights and interests, health, and safety of consumers or other stakeholders.

Where there are media reports or sufficient facts to determine that the Company’s products or services are likely to pose a hazard to the safety and health of consumers or other stakeholders, the Company shall recall those products or suspend the services within the stipulated time limit, verify the facts, and present a review and improvement plan.

The Company’s dedicated unit shall report to the Board of Directors on the foregoing matters, the response and the subsequent improvement measures.

Article 15: Prohibition of Insider Trading and Non-disclosure Agreements

The Company’s employees shall comply with the Securities and Exchange Act and shall not take advantage of undisclosed information of which they have learned to engage in insider trading, nor shall they disclose such information to others, so as to prevent such others from using such undisclosed information to engage in insider trading.

Any organization or person outside of this Company that is involved in any merger, demerger, acquisition and share transfer, major memorandum of understanding, strategic alliance, other business partnership plan, or the signing of a major contract by this Company shall be required to sign a non-disclosure agreement in which they undertake not to disclose to others any trade secret or other material information of this Company acquired as a result, and that they may not use such information without the prior consent of this Company.

Article 16: Compliance and Declaration of Integrity Management Policy

The Company discloses its integrity management policy in its internal regulations, annual reports, website, or other publicity materials, and announces the policy at external events such as product launches and investor meeting in a timely manner so that its suppliers, customers, or other business-related organizations and employees can clearly understand its integrity management philosophy and standards.

Article 17: Evaluation of Integrity Management Prior to Development of Business Relationships

Before building business relationships with others, the Company shall firstly evaluate the legality and integrity management policy of the agents, suppliers, customers, or other business partners of such party, its policy of operation integrity, and ascertain whether they have a record of involvement in unethical conduct, so as to ensure that they conduct business in a fair and transparent manner, and do not solicit, offer, or accept bribes.

In conducting the preceding evaluation, the Company may carry out appropriate audit procedures to examine the business of the other party in the following aspects to learn about the integrity management of such party:

  1. The country, operation location, organizational structure, management policies and place where such party will make payment.
  2. Whether such party has adopted an integrity management policy, and the status of its implementation.
  3. Whether such party operates in a country with a high risk of corruption.
  4. Whether the business of such party is in an industry with high risk of bribery.
  5. The long-term operating conditions and goodwill of such party.
  6. The opinions from the partners of such party.
  7. Whether such party has a record of involvement in unethical conduct such as bribery or illegal political contributions.

Article 18: Explaining the Integrity Management Policy to Business Partners

In the course of business, the Company’s employees shall clarify to its counter-parties the Company’s integrity management policy and other related regulations, and expressly refuse to offer, promise to offer, request or accept any forms of improper benefits in any form or name, either directly or indirectly.

Article 19: Avoidance of Dealing with Unethical Business

The Company’s employees shall avoid engaging in business with agents, suppliers, customers or other partners who engage in unethical conduct. If any business dealings or cooperation partners are found any unethical conduct, the Company shall immediately cease the business with them and list them as rejected partners in order to implement the Company’s integrity management policy.

Article 20: Integrity Management in the Contract

When the Company enters into a contract with another party, it shall, if necessary, fully learn about such other party’s integrity management, incorporate the Company’s integrity management policy into the contract, and may stipulate the following matters in the contract:

  1. If either party becomes aware of a breach of any contractual terms prohibiting the acceptance of commissions, kickbacks or other improper benefits, it shall immediately inform the other party of the identity of such violator, the manner and amount of the improper benefits offered, promised, requested or accepted, provide relevant evidence, and cooperate with the other party’s investigation. If a party suffers any damage as a result, it may make claim against the other party, which may be deducted in full from the contract price payable.
  2. In case of any unethical conduct by either party in the course of its business, the other party may terminate or cancel the contract unconditionally at any time.
  3. Specific and reasonable payment terms shall be defined, including payment methods and relevant tax regulations to be complied with.

Article 21: Handling of Unethical Conduct by Personnel of the Company

The Company encourages internal and external personnel to report unethical conduct or misconduct and has formulated the “Fraud Reporting Rules”. If any matter reported is proven to be true, the Company will not only handle it according to the law or the relevant regulations of the Company, but will also provide the whistle-blower with appropriate reward according to the severity of the matter. Any employee has made any false reports or malicious accusations will be subject to disciplinary action, and in serious cases, they will be dismissed.

The Company has established and announced an internal independent reporting e-mail on its website and intranet site for the internal and external personnel of the Company to submit reports.

The whistle-blower shall at least provide the following information:

  1. The name and ID number of the whistle-blower, as well as the address, telephone number and e-mail address that can be used to contact with the whistle-blower.
  2. The name of the person being reported or other information that can be used to identify such person.
  3. The specific facts available for investigation.

The Company shall keep the identity of the whistle-blower and the matter reported confidential, and the Company undertakes to protect the whistle-blower from improper treatment as a result of the reporting.

The Company’s dedicated unit shall deal with any reported matter in accordance with the following procedures:

  1. The matters involving general employees shall be reported to the departmental heads and the matters involving directors or senior management shall be reported to independent directors.
  2. The Company’s dedicated unit and the executives or directors receiving the report in the preceding paragraph shall immediately investigate the relevant facts and, if necessary, require assistance from legal or other relevant departments.
  3. If it is proven that the person being reported has violated the relevant laws and regulations or the Company’s policies and rules on integrity management, the Company shall immediately require the reported person cease the conduct and shall punish the individual accordingly. Where necessary, such person shall be required to make compensation for damages through legal proceedings in order to protect the Company’s reputation and rights.
  4. The acceptance of reports, the investigation and the results shall be documented and maintained for five years in written or electronic copy. Before the expiration of the maintenance period, in case of any legal proceedings related to the matters reported, the related documents shall be maintained until the end of such proceedings.
  5. If the reported matters have been proven to be true through investigation, the related units of the Company shall be required to review their internal control system and operation procedures, and propose improvement measures to prevent such matters from happening again.

Article 22: Handling of Others’ Unethical Conduct against the Company

If any employee of the Company is aware of any unethical conduct by anyone else against the Company, which involves any legal matter, the Company shall report the related facts to judicial and prosecutorial authorities, and if such behavior involves public servants, the government integrity agency shall be notified.

Article 23: Internal Promotion, Establishment of Systems for Rewards, Punishments and Complaints, and Disciplinary Measures

The dedicated unit of the Company shall carry out one internal promotion activity once a year to ask the Chairman, General Manager or senior management to introduce the importance of the integrity to all directors, employees or appointees.

The Company shall integrate integrity management with employee performance examination and HR policies and establish a clear and effective reward and punishment system and a compliant system.

The Company shall dismiss or terminate the employment of related employees in accordance with the relevant laws and regulations or in accordance with the Company’s Personnel Regulations in the event of a material integrity breach.

Depending on the severity of the situation, the Company will disclose on its internal website the title and name of the employee in violation of the regulations as well as the date, violation case and punishment.

Article 24: Implementation

The Procedures and Guidelines specified herein have been approved by the Board of Directors for implementation. The same procedure is applicable to any amendments thereto.