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.

2024 The state of ethical corporate management

Assessed ItemsImplementation StatusAny Variance from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and the Reason for Any Such Variance
YesNoDescription
I. Adopting ethical corporate management policy and programs
(I) Has the Company formulated its ethical management policy approved by the Board of Directors, clarified it in its regulations and external documents and the commitment of board of Directors and senior Managers to active implementation?V(I) According to the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, the Company has formulated the Ethical Corporate Management Best Practice Principles, the Procedures for Ethical Management and Guidelines for Conduct and other relevant measures, which shall be disclosed on the Company's website after being adopted by the Board of Directors, stating that Directors, Managers, employees, appointees or persons with material control shall abide by the principle of good faith, the commitment that they shall not engage in unethical conduct and shall actively implement the policy of good faith, and shall follow in their internal management and external business activities. The members of the Board of Directors and senior management also adhere to the principle of ethical corporate management in operating the Company, and report to the Board of Directors once a year on the implementation of ethical corporate management in the current year.No material difference.
(II) Does the Company establish a risk assessment mechanism against unethical conduct, analyze and assess on a regular basis business activities within their business scope which are at a higher risk of being involved in unethical conduct, and establish prevention programs accordingly, which shall at least include preventive measures against the behaviors as stipulated in item 2, Article 7 of "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies"?V(II) According to the Ethical Corporate Management Best Practice Principles, the Company has formulated the Procedures for Ethical Management and Guidelines for Conduct, which explicitly defines business activities within its business scope which are at a higher risk of being involved in unethical conduct, and has formulated the preventive measures and notification procedures against the unethical conducts as stipulated in Paragraph 2, Article 7 of Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies.

In order to prevent any unethical conduct, the Company requires all suppliers not to engage in any illegal business conduct and not to provide improper benefits and bribes to the Company's employees, and regularly conduct audits and evaluations on the suppliers. In case of a manufacturer engaging in unethical conduct of high risk, the Company may terminate or rescind the contract with it at any time, and if the case is serious, the Company will notify the judicial unit.
(III) Has the Company in the prevention programs for unethical conduct clearly prescribed the operation procedures, conduct guidelines and disciplinary and appeal system for violations of the ethical corporate management rules and implemented them, and conducted review and amendment on the aforementioned programs on a regular basis?V(III) The Company has formulated the “Procedures for Ethical Management and Guidelines for Conduct”, the “Operating Procedure and Conduct Guide for Ethical Corporate Management” and the “Regulations for the Whistle-blowing of Fraudulent Conduct”, which stipulate the prohibitions against unethical conduct, reporting system and disciplinary system, which shall be implemented in the operation of each unit, and the relevant contents shall be regularly educated, publicized and reviewed and revised.
II. Implementation of ethical corporate management
(I) Does the Company evaluate the ethical record of its business partners and set ethical conduct policies in the terms and conditions of its contracts with the clients?V(I) For the internal control system and various management measures that should be followed by suppliers and customers, the Company shall conduct credit investigation or evaluation operations, and avoid engaging in business transactions with agents, suppliers, customers or other business associates involved in unethical conduct. If the business associates or cooperation partners have engaged in unethical conduct, the Company shall immediately stop the business dealings with them and list them as the objects of refusal to engage in business dealings to implement the ethical management policy of the Company.No material difference.
(II) Has the Company set up exclusively dedicated units supervised by the Board of Directors to be in charge of ethical corporate management which report its ethical management policy, prevention programs for unethical conduct, and the supervision and implementation state to the Board of Directors?V(II) In publicity and implementation of ethical corporate management, the Company designates the Human Resources and Administration Department as the dedicated unit to be in charge of formulating and supervising the implementation of the ethical corporate management policies and prevention programs, and reporting the implementation status to the Board of Directors every year. The latest reporting date was October 31, 2024 and it was disclosed on the Company’s website.
(III) Does the Company work out policies to prevent conflicts of interest, provide proper statement channels and implement?V(III) The Company’s “Rules of Procedure for Board of Directors Meetings” provides for a system of recusal of Directors from participation in discussion and voting, and shall not act as a proxy for other Directors to exercise voting rights in respect of matters in the meetings and board resolutions which are in conflict with the interests of the Company or the legal person represented thereby and are likely to prejudice the interests of the Company. To prevent conflicts of interest, the Company has formulated the "Ethical Corporate Management Best Practice Principles", the “Operating Procedure and Conduct Guide for Ethical Corporate Management” and the “Regulations for the Whistle-blowing of Fraudulent Conduct” and implements as required by the Principles. In case of any unlawful act, the whistle-blower can report to the dedicated unit through the independent whistle-blowing mailbox (report@sitronix.com.tw).
(IV) Has the Company established an effective accounting system, internal control system to put ethical corporate management into practice? The internal auditors shall draw up the relevant audit plan to audit the compliance of the prevention programs for unethical conduct according to the risk valuation results of the unethical conduct, or audited by CPAs?V(IV) To ensure ethical corporate management, the Company has set up an effective accounting system and internal control system in accordance with the relevant laws and regulations. Internal auditors shall conduct audits in accordance with the audit plan, submit quarterly reports to the Board of Directors, and submit them to Independent Directors for signature before the end of the following month after the completion of the audit report; Moreover, the implementation of self-evaluation operations is used to ensure that the design and implementation of the internal control system is continuously effective, which is the basis for issuing the internal control system statement, and is submitted to the Board of Directors for approval.
(V) Does the Company organize internal or external trainings on the ethical corporate management regularly?V(V) "Procedures for Ethical Management and Guidelines for Conduct" and the "Procedures for Handling Material Inside Information" are required mandatory courses for new employees. Additionally, all employees will receive training and promotion on the "Introduction to Regulations on Insider Trading" Directors and managers participate in annual corporate governance courses in compliance with regulations.

In 2024, the employees attended the ethical corporate management courses organized by the Company:
Course Name Number Of Trainees Completed Total Training Hours Completion Rate
Procedures for Ethical Management and Guidelines for Conduct 36 persons 6 hours 100%
Procedures For Handling Material Inside Information 36 persons 6 hours 100%
Introduction to Regulations on Insider Trading 411 persons 193 hours 93.9%
III. Operation of the Company's Whistle-blowing System
(I) Has the Company set specific whistle-blowing and reward system to facilitate the whistle-blowing channel and assign appropriate specialist accepting to spot the whistle-blowing object? V(I) The Company has set up the “Regulations for the Whistle-blowing of Fraudulent Conduct", and provides an independent whistle-blowing mailbox (report@sitronix.com.tw) for external and internal whistle-blower of the Company. This whistle-blowing channel is publicly disclosed on the website of the Company, and a dedicate unit is designated to handle reporting cases according to the impeachment content.No material difference.
(II) Has the Company set the standard operating procedures, follow-up measures shall be adopted depending on the severity of the circumstances after investigations of cases reported are completed and relevant confidentiality mechanism to investigate reported misconducts?V(II) The Company clearly stipulates in the "Regulations for the Whistle-blowing of Fraudulent Conduct" the standard operating procedures, and that it will keep the whistle-blowers' identity and contents of information confidential.
(III) Has the Company taken measures to protect whistle-blowers from inappropriate disciplinary actions due to their whistleblowing?V(III) The Company clearly stipulates in the "Regulations for the Whistle-blowing of Fraudulent Conduct" that it will keep the whistle-blowers' identity and contents of information confidential. The Company also undertakes to protect the whistle-blowers from improper treatment due to their whistle-blowing.
IV. Strengthening information disclosure
Does the Company disclose the information of implementation and results of ethical management on its website and the MOPS?VThe Company has established relevant measures such as the “Ethical Corporate Management Best Practice Principles" and the "Operating Procedure and Conduct Guide for Ethical Corporate Management", which will be disclosed on the MOPS. The content and effectiveness of the established Ethical Corporate Management Best Practice Principles will also be disclosed on the Company's website.No material difference.
V. If the Company develops its own ethical management rules according to the Integrity Operation Best Practice Principles for TWSE/GTSM-Listed Companies, please state the differences: No difference.
VI. Other important information for better understanding of the ethical management: (such as review and amendment of the regulations on ethical management )
(I) The Company complies with the Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Anti-Corruption Act, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest, and the relevant rules and regulations on TWSE/TPEx -Listed Companies and business conduct as the foundation for implementing ethical corporate management.
(II) The Company’s “Rules of Procedure for Board of Directors Meetings” provides for a system of recusal of Directors from participation in discussion and voting, and shall not act as a proxy for other Directors to exercise voting rights in respect of board resolutions which are in conflict with the interests of the Company or the legal person represented thereby and are likely to prejudice the interests of the Company.
(III) The Company has formulated the “Procedures for Handling Material Inside Information” and disclosed it on the Company’s website in order to establish a good internal material information processing and disclosure mechanism for the Company. It is also to avoid improper disclosure of information and ensure the consistency and accuracy of information disseminated to the public.
(IV) The Company regularly arranges corporate governance courses for the Directors and Managers to enhance their ability to supervise and manage the Company, with a view to enhancing the effectiveness of corporate governance and the implementation of ethical management.