The Audit Committee assists the Board of Directors in performing its supervisory duties, and tasks entrusted by the Company Act, the Securities and Exchange Act, and other related laws and regulations. The Audit Committee shall conduct regular meeting at least once per year, and may conduct special sessions at any time, as needed. The Audit Committee shall maintain communication with the Company's internal audit officers and CPAs.
The task of the Audit Committee mainly includes the following:
- Establish or amend the internal control system.
- Assess the effectiveness of the internal control system.
- Establish or amend procedures for obtaining or disposing of assets, engaging in derivatives transactions, lending or endorsement guarantees.
- Matters involving major financial and business activities.
- Matters involving Director's personal interests.
- Material asset or derivatives transactions.
- Material monetary load, lending or endorsement guarantees.
- The offering, issuance, or private placement of any equity-type securities.
- Appointment, dismissal, or remuneration of CPAs.
- Independence of CPAs.
- Appointment and dismissal of financial, accounting, or internal auditing supervisors.
- Annual financial statements and semi-annual financial statements.
- Material matters related to other companies or competent authorities.
2. Members of Audit Committee:
|
Name |
Professional qualifications and experience |
|---|---|
|
Liao, Chi Chou |
St. John's University Industrial Pharmacy Ph. D |
|
Ger, Jy-Gang |
MSM from ADL School of Management, United States |
|
Chen, Chao Long |
MBA from Boston University, United States |
|
Lin, Yu-Ya |
Graduate Institute of Accounting, National Taiwan University |
3. Communications between independent directors and the Company's chief internal auditor and CPAs:
(1) The Audit Committee may invite relevant executives, internal auditors, auditors, and legal advisors to attend meetings and provide relevant information to report to independent directors.
(2) Proposals such as financial statements and the effectiveness of internal controls shall be discussed by the Audit Committee and then decided upon by the Board of Directors.
(3) Communication Frequency: Executives and audit managers shall periodically report and discuss audit and internal control issues with independent directors or auditors via email, telephone, and attend the Audit Committee at least quarterly.
| Date / Sessions | Communication Method | Communication Object | Contents of Motion | Resolutions |
|---|---|---|---|---|
| 03.23.2023 3rd Session 4 |
Audit Committee | Accountant Audit supervisor |
1.The 2023 CPAs' Independence and Competency Assessment 2.2022 Business Report and Financial Statements 3.2022 Losses Offset Proposal 4.Proposal for the Statement of Internal Control covering actual system design and effective implementation 5.Proposal for funds loaning to Tulex Pharmaceuticals Inc. (Subsidiary with 97.59% shareholding) |
Approved with No Objections |
| 04.17.2023 3rd Session 5 |
Audit Committee | Accountant Audit supervisor |
1.Proposal for making guarantees for the loan application of Jiangsu HuaHan Pharmacy-Tech Co., Ltd. | Approved with No Objections |
| 05.10.2023 3rd Session 6 |
Audit Committee | Accountant Audit supervisor |
1.2023 Q1 Financial Reports 2.Proposal for amendment to Rules Governing Affiliated Companies 3.Implementation status report of 2022 Private Placement of Securities at the Shareholders' Meeting 4.Proposal for removal of restrictions on competing business involvement for directors 5.Proposal for Private Placement of Securities 6.Proposal for funds loaning to Tulex Pharmaceuticals Inc. (Subsidiary with 97.59% shareholding) |
Approved with No Objections |
| 08.09.2023 3rd Session 7 |
Audit Committee | Accountant Audit supervisor |
1.2023 Q2 Financial Reports 2.Proposal for funds loaning to Magnifica Inc. (Subsidiary with 97.59% shareholding) 3.Proposal for US$2,000,000 capital increase in Tulex Pharmaceuticals Inc. |
Approved with No Objections |
| 09.06.2023 3rd Session 8 |
Audit Committee | Accountant Audit supervisor |
1.Proposal for adjusting fund utilization plan of 2020 Private Placement of Securities 2.Proposal for US$4,000,000 capital increase in Tulex Pharmaceuticals Inc. 3.Proposal for US$1,300,000 capital increase in Magnifica Inc. |
Approved with No Objections |
| 09.27.2023 3rd Session 9 |
Audit Committee | Accountant Audit supervisor |
1.Proposal for cash capital increase through issuance of new shares | Approved with No Objections |
| 11.08.2023 3rd Session 10 |
Audit Committee | Accountant Audit supervisor |
1.2023 Q3 Financial Reports 2.Proposal for 2024 Auditing Plan 3.Proposal for issuance and distribution of new restricted employee shares in 2021, including roster of recipients, and numbers of shares distributable |
Approved with No Objections |
4 Communication Policy between Independent Directors, Chief Internal Auditor, and CPAs
1. The chief internal auditor shall, in addition to regularly attending the Audit Committee's meetings to report on the execution of internal audits, communicate and discuss with independent directors as needed, through face-to-face meetings, phone calls, emails, or other means. Furthermore, at least once a year, a communication meeting shall be held with the Audit Committee in the absence of regular directors and management.
Summary of Communication between Independent Directors and Chief Internal Auditor in 2023
|
Date |
Communication Highlights |
Communication Result |
|---|---|---|
|
03.22.2023 |
Reports on internal audit by the chief internal auditor |
No opinions. |
|
05.10.2023 |
Reports on internal audit by the chief internal auditor |
No opinions. |
|
08.09.2023 |
Reports on internal audit by the chief internal auditor |
No opinions. |
|
11.08.2023 |
Reports on internal audit by the chief internal auditor |
No opinions. |
|
03.13.2024 |
Reports on internal audit by the chief internal auditor |
No opinions. |
|
05.08.2024 |
Reports on internal audit by the chief internal auditor |
No opinions. |
2. The CPAs, in addition to communicating with independent directors through individual communication meetings, shall attend quarterly Audit Committee and Board of Directors meetings to discuss matters concerning financial statement audits, review the results of audits, provide recommendations on internal controls, and address other relevant legal requirements.
Summary of Communication between Independent Directors and CPAs in 2023
|
Date |
Communication Highlights |
Communication Result |
|---|---|---|
|
03.22.2023 |
The CPAs provide an overview of the findings and results of the fiscal year 2022 financial statement audit and participate in discussions concerning the application of specific accounting principles and the implications of newly revised regulations. |
No opinions. |
|
05.10.2023 |
The CPAs provide an overview of the findings and results of the 2023 Q1 financial statement audit and participate in discussions concerning the application of specific accounting principles and the implications of newly revised regulations. |
No opinions. |
|
08.09.2023 |
The CPAs provide an overview of the findings and results of the 2023 Q2 financial statement audit and participate in discussions concerning the application of specific accounting principles and the implications of newly revised regulations. |
No opinions. |
|
11.08.2023 |
1.The CPAs provide an overview of the findings and results of the 2023 Q3 financial statement audit and participate in discussions concerning the application of specific accounting principles and the implications of newly revised regulations. |
No opinions. |
|
03.13.2024 |
he CPAs provide an overview of the findings and results of the fiscal year 2023 financial statement audit and participate in discussions concerning the application of specific accounting principles and the implications of newly revised regulations. |
No opinions. |
|
05.08.2024 |
The CPAs provide an overview of the findings and results of the 2024 Q1 financial statement audit and participate in discussions concerning the application of specific accounting principles and the implications of newly revised regulations. |
No opinions. |
Remuneration Committee
1. Function of the Remuneration Committee: The Remuneration Committee is responsible for formulation, regularly review and evaluation of the policies, systems, standards, and structures related to the Company's remuneration; also, responsible for evaluating the performance of directors and executives.
2. Members of Audit Committee:
| Name | Professional Qualificationsand Experience |
|---|---|
| Liao, Chi Chou | Possess the qualifications of lecturers in relevant departments of public and private colleges, and universities, required by the company's business. |
| Ger, Jy-Gang | Possess working experience in business and crisis management. |
| Chen, Chao Long | Possess working experience in business and crisis management. |
| Lin, Yu-Ya | Possess working experience in business and crisis management. |
3. Content of the motion, resolution by the board of directors, and the Company's response to the remuneration committee's opinion:
|
Date / Sessions |
Contents of Motion |
Resolutions of the remuneration committee |
The Company's response to the remuneration committee's opinion |
|
|---|---|---|---|---|
|
03.22.2023 |
1 |
Proposal for establishment of Corporate Governance Officer |
Approved with No Objections by All Participants |
Submitted to the Board of Directors, and Approved with No Objections by All Directors Present |
|
2 |
Suggestion for amending the Company regulations to include the requirement for approval by both the Remuneration Committee and the Board of Directors for the remuneration of executives in domestic and international subsidiaries with controlling interests, in accordance with corporate governance principles |
Approved with No Objections by All Participants |
Proposal for amendment to "Rules Governing Affiliated Companies" was submitted at the Session 7 of the 10th Board of Directors, aiming to strengthen oversight of subsidiary operations and management |
|
|
05.10.2023 |
1 |
Proposal for remuneration adjustment for executives |
Approved with No Objections by All Participants |
Submitted to the Board of Directors, and Approved with No Objections by All Directors Present |
|
05.10.2023 |
1 |
Proposal for 2023 year-end bonus distribution base for executives |
Approved with No Objections by All Participants |
Submitted to the Board of Directors, and Approved with No Objections by All Directors Present |
|
2 |
Proposal for issuance and distribution of new restricted employee shares in 2021, including roster of executives, and numbers of shares distributable |
Approved with No Objections by All Participants |
Submitted to the Board of Directors, and Approved with No Objections by All Directors Present |
|
|
3 |
Proposal for appointment of executives for sub-subsidiary, Jiangsu HuaHan Pharma-Tech Co., Ltd. |
Approved with No Objections by All Participants |
Submitted to the Board of Directors, and Approved with No Objections by All Directors Present |
|
2.Implementation Status of Board Evaluations:
|
Evaluation cycle |
Evaluation period |
Scope of evaluation |
Evaluation method |
Evaluation items |
Date of submission to the Board of Directors |
|---|---|---|---|---|---|
|
Once per year |
01.01.2023 - 12.31.2023 |
1.Audit Committee 2.Remuneration Committee. |
1.Internal self-evaluation of Committee |
Please refer to the evaluation results below |
03.13.2024 |
|
Results for self-evaluation to the performance of Board of Directors for 2023 |
|||||
|
Target |
Evaluation dimensions |
Number of questions |
Average score |
|---|---|---|---|
|
Audit Committee |
A. Degree of participation in the Company's operations |
4 |
4.94 |
|
B. Recognition of duties |
6 |
5.00 |
|
|
C. Improvement in the quality of decision-making |
7 |
4.96 |
|
|
D. Composition and election of members |
4 |
5.00 |
|
|
E. Internal controls |
3 |
5.00 |
|
|
Total/Average score |
24 |
4.98 (Excellent) |
|
|
Remuneration Committee |
A. Degree of participation in the Company's operations |
4 |
5.00 |
|
B. Recognition of duties |
5 |
4.90 |
|
|
C. Improvement in the quality of decision-making |
7 |
5.00 |
|
|
D. Composition and election of members |
3 |
5.00 |
|
|
Total/Average score |
19 |
4.98 (Excellent) |
|