|Evaluation Item||Implementation Status1||Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons|
|Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?||√||The company formulated and duly disclosed corporate governance best practice principles pursuant to the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies “. Corresponding norms and regulations are observed and implemented in accordance with the spirit of corporate governance. In the future, the company will continue to strengthen information transparency and board functionality through the amendment of relevant management regulations with the goal of promotion corporate governance.||No deviation|
|Shareholding structure & shareholders’ rights|
|Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure?||√||The Company has designed the specialist to handle shareholders’ suggestions, disputes, etc. and coordinate the relevant departments for implementation.||No deviation|
|Does the company possess the list of its major shareholders as well as the ultimate owners of those shares?||√||Stock service agency organization can be used to provide actual information and keep track of the shares held by directors, managers and shareholders who own more than 10% of shares.||No deviation|
|Does the company establish and execute the risk management and firewall system within its conglomerate structure?||√||All affiliates are independently responsible for the management of their assets and finances in accordance with the internal control system of the company to ensure the implementation of the risk control and firewall mechanism.||No deviation|
|Does the company establish internal rules against insiders trading with undisclosed?||√||The company has formulated “Procedures for Ethical Management and Guidelines for Conduct “against insiders trading with undisclosed.||No deviation|
|Composition and Responsibilities of the Board of Directors|
|Does the Board established a diversity policy, specific management goals and implemented it accordingly?||√||The board has formulated diversified policies with regard to membership composition. The company has also established three independent director positions. Kao, Chih-Chien, Lee, Chien-Ming and Lin, Chih-Chung currently serve as independent directors. Lin, Chih-Chung has a legal background, while Kao, Chih-Chien is a finance and accounting specialist and Lee, Chien-Ming has professor of department of Resource management background. The three independent directors set up household registration in Taiwan.
The company disclose the Board develop a diversified policy for the composition of its members on its website and the Market Observation Post System (MOPS)
|Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?||√||The company establish a Human Resources Committee in addition to the Remuneration Committee and the Audit Committee and will consider adding ones while it is necessary in the future.||No deviation|
|Does the company establish a standard to measure the performance of the Board, and implement it annually, report the results of the performance appraisal to the board of directors and apply the results for reference regarding individual directors’ remuneration and re-appointments?||√||The company has formulated rules procedures for governing the board performance evaluation on March. 22,2019. The board committee's charters shall be subject to review at least once a year as part of the Company's regulations governing performance evaluation for internal committees.
Internal board performance evaluations shall be completed before the end of the first quarter of the following year.
The company shall take into consideration its condition and needs when establishing the criteria for evaluating the performance of the board of directors, which should cover, at a minimum, the following five aspects:
1.Participation in the operation of the company;
2.Improvement of the quality of the board of directors' decision making;
3.Composition and structure of the board of directors;
4.Election and continuing education of the directors;and
The criteria for evaluating the performance of the board members (on themselves or peers), should cover, at a minimum, the following six aspects:
1.Alignment of the goals and missions of the company;
2.Awareness of the duties of a director;
3.Participation in the operation of the company;
4.Management of internal relationship and communication;
5.The director's professionalism and continuing education; and
The criteria for evaluating the performance of functional committees should cover, at a minimum, the following five aspects:
1.Participation in the operation of the company;
2.Awareness of the duties of the functional committee;
3.Improvement of quality of decisions made by the functional committee;
4.Makeup of the functional committee and election of its members and
The units performing evaluations will collect information about the activities of the board of directors and distribute self-evaluation questionnaires. When electing or nominating members of the board of directors, the Company shall base its election on the evaluation results of the performance of the board and shall base its determination of an individual director's remuneration on the evaluation results of his or her performance.
The unit responsible for evaluation or the secretariat of the board will collect all information, give scores based on the evaluation, record the evaluation results in a report, and submit the report to the board of directors for discussion and improvement.
The 2021 board performance evaluation is carried out by the Secretariat of the Board (STB) in early 2022. STB collect related information about activities of the board of Directors and distribute “the Questionnaire of self-Evaluation of Performance of the Board “to Board members for self-evaluation. The evaluation period is from Jan. 1 to Dec. 31, 2021, the evaluation scoop includes whole board of directors, individual board members, and functional Committee: Audit committee and Remuneration Committee. When nomination members of the board of directors, the company will base its election on the evaluation results of individual Board member. The result has been reported to the Board of Directors on Mar. 18, 2022.The operation of CTCI’s Board of Directors is evaluated very good on the result of the 2021 board performance evaluation.(1poor,2fair,3good,4very good,5excellent)
|Does the TWSE/TPEx listed company been equipped with competent and appropriate numbers of corporate governance personnel, and designated a CGO responsible for corporate governance-related affairs (including but not limited to providing directors and supervisors with the information required for business execution, assisting directors and supervisors with legal compliance, handling matters related to board meetings and shareholders meetings in accordance with the law, and producing meeting minutes for board of directors meetings and shareholders meetings)?||√||The accounting department of the company self-assessed the independence of certified public accountants and reported the results to the audit committee and the board of directors for review and approval on March 23, 2020. The accounting department of the company assessed that both accountant Huang Yimin and accountant Xu Wenya of Qinye Zhongxin United Certified Public Accountants meet the independence standards of the company (Note 2), and are qualified to serve as certified accountants of the company. The accounting firm issued a statement letter.||No major abnormalities.|
|Does the Company appoint competent and appropriate corporate governance personnel and corporate governance officer to be in charge of corporate governance affairs (including but not limited to furnishing information required for business execution by directors, assisting directors’ compliance of law, handling matters related to board meetings and shareholders’ meetings according to law, and recording minutes of board meetings and shareholders’ meetings)?||√||The company appointed Liu, Li-Ling of Manager for a chief corporate governance officer by the board of directors on March 19, 2020.
The governance officer Liu, Li-Ling shall be a qualified for at least three years in a public company in handling legal affairs, financial affairs, stock affairs, or corporate governance affairs.
It is required that the corporate governance affairs mentioned include handling matters relating to board meetings and shareholders meetings according to laws, producing minutes of board meetings and shareholders meetings, assisting in onboarding and continuous development of directors and supervisors, furnishing information required for business execution by directors and supervisors, assisting directors and supervisors with legal compliance, other matters set out in the articles or corporation or contracts.
The main duties of this year are as follows
Develop appropriate corporate mechanisms and organizational structures to promote the independence of the board of directors, and fulfillment of operation transparency, regulatory compliance, and internal audit of internal control.
Consult director’s opinions before planning and formulating the board meeting agenda, and notify all directors to attend the meeting with sufficient meeting information provided at least even days before the meeting held in order to help directors understand the content of relevant issues. If the content is related the interested parties and should Be avoided at least seven days before the meeting held in order to help directors understand the content of relevant issues. If the content is related to the interested parties and should be avoided, they will be reminded beforehand.
Register the date of annual shareholder’s meeting before due date in accordance with law, and report meeting notice, meeting manual and meeting minute before deadline, as well as report the change of registration upon the amendment of articles and re-election of directors.
Revies the annual corporate governance appraisal index published by corporate governance center, and screen item-by-item to ensure the achievement.
2020 Corporate Governance Executive Training Status: Note 3 for details.
Huang Ziwen, the head of corporate governance, resigned on March 19, 2020.
|Does the company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers, and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities?||√||The company has established a stakeholder section on the company has established a stakeholder identity, issues which have been concerned by major stakeholders and provide the channel for communication.||No deviation|
|Does the company appoint a professional shareholder service agency to deal with shareholder affairs?||√||The Company engaged Registrar & transfer Agency department of Grand Fortune Securities Co., Ltd. to host annual general shareholders’ meeting.||No deviation|
|Does the company have a corporate website to disclose both financial standings and the status of corporate governance?||√||The company has set up a website to disclose information regarding the company’s financials and business.||No deviation|
|Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?||√||The company has set up a Chinese/English website to disclose financials, business and corporate governance status. The company has established a spokesman system. Investor conference information is disclosed on the corporate website according to the regulation of TWSE.||No deviation|
|Does the Company announce and report the annual financial report as early as possible within two months after the end of the fiscal year, and announce and report the first, second and third quarter financial reports and the operating status of each month as early as possible before the required deadlines?||√||The company announces and reports annual financial statements, Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit.||To announce and report financial reports before the required deadlines.|
|Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?||√||The Company emphasizes employee rights and open communication channels, and provides ample education training and reasonable compensation and welfare measures.
The Company maintains open communication channels and information exchange for investors and other stakeholders, and respects and protects their entitled rights and interests.
The Company maintains a good relationship with both suppliers and customers and seeks mutually beneficial growth through cooperation.
The Company has established various internal control systems and internal management rules in accordance with laws and regulations. The audit room submits an audit plan based on risk assessment to the Board of Directors for approval. The actual audit situation and report are submitted to the audit committee for review. In addition, after completing the internal control self-assessment for the year, the relevant departments of the Company will report a statement on internal control on a yearly basis according to the Taiwan Stock Exchange and disclose the statement in the annual report of the shareholders' meeting.
The company annually purchases insurance for directors. The company didn’t set up supervisors.
Directors’ training records：Note 3
|Please explain the improvements which have been made in accordance with the results of the Corporate Governance Evaluation System released by the Corporate Governance Center, Taiwan Stock Exchange, and provide the priority enhancement measures.|
Situation after Improvement:
Measures Adopted for Improvement:
|Title||Name||Study period||Training hours||Sponsoring Organization||Course|
|Chief Corporate Governance Officer||Liu, Li-Ling||2022/08/31||3||Accounting Research and Development Foundation||Prepare TCFD Report|
|2022/08/19||3||Accounting Research and Development Foundation||CFC tax regulations and Practices|
|2022/08/17||3||Accounting Research and Development Foundation||Read TCFD Report|
|2022/08/16||3||Accounting Research and Development Foundation||Analysis of ISSB S2 Standard " Task Force on Climate- related Financial Disclosures "|
|2022/08/15||3||Accounting Research and Development Foundation||Analysis of ISSB S1 Standard " General Requirements for Disclosure of Sustainability-related Financial Information|
|2022/07/27||3||Taiwan Stock Exchange||Sustainable Development Roadmap Conference|
|Title||Name||Study period||Training hours||Sponsoring Organization||Course|
|Chairman||Tsai, Chia-Hsiang||2022/09/29||3||Securities & Futures Institute||Supply Chain Information Security Threat Hunting - Opportunities for New Ventures in Taiwan|
|2022/09/21||3||Securities & Futures Institute||Looking at Corporate Governance 3.0 from the Perspective of Inspection and Adjustment|
Director of Representative
|Hsiung Ping-Cheng||2022/11/07||6||Accounting Research and Development Foundation||Analysis of Common Lack of Internal Control Management in Enterprises and Practical Cases|
Director of Representative
|Lee, Kuang-Yao||2022/11/17||3||Accounting Research and Development Foundation||Global Net Zero Emissions Impact and ESG Actions|
|2022/11/02||3||Corporate Organization and Sustainable Development||Employer Responsibility and Policy Analysis of Enterprise Labor Management under Corporate Governance|
Director of Representative
|Lee, Wei-Kang||2022/12/21||3||Securities & Futures Institute||How should directors and supervisors guide enterprise risk management and crisis management|
|2022/10/11||3||Securities & Futures Institute||Directors and Supervisors (Independent) and Corporate Governance Executive Practice Seminar-Taipei Class|
|Independent director||Lin, Chih-Chung||2022/11/29||3||The National Federation of CPA Associations of the R.O.C||Sustainable Carbon Accounting Management|
|2022/12/13||3||The National Federation of CPA Associations of the R.O.C||Cash Eviction Merger in the Enterprise Merger and Acquisition Law and the Protection of Shareholders' Rights and Interests and Avoidance of Directors' Interests|
|Independent director||Kao, Chih-Chien||2022/09/28||3||The National Federation of CPA Associations of the R.O.C||Carbon management trends and responses towards net-zero emissions|
|2022/09/20||3||The National Federation of CPA Associations of the R.O.C||International Tax Reform and Family Wealth Inheritance|
|Independent director||Lee, Chien-Ming||2022/10/29||3||Accounting Research and Development Foundation||SSBS2 Industry Analysis Practical Application Guidelines (Part 1)|
|2022/10/24||3||Accounting Research and Development Foundation||ESG Information Disclosure Trends and Related Regulations|
The Company hosts educational awareness training pertaining to "Prevention of Insider Trading" and relevant regulations at least once a year. Newly appointed directors and managers will be scheduled for these courses respectively. The course includes non-disclosure related issues regarding material information, the definition of insider trading, and case studies.
ESON headquarters：No. 88, Yuanfeng Rd., KSND. Kunshan City, Jiangsu, China
Branch: Taiwan / Subsidiary: Wuxi, Yantai, Dongguan, Slovakia, Mexico, Vietnam, Malaysia First Plant, Malaysia Second Plant
COPYRIGHT (O) 2021.ESON Precision Engineering Co. Ltd. 蘇ICP備11060543號-1
Technical Support：Wanhe Technology