Purpose of Internal Audit

The purpose of internal audit is to assist the Board of Directors and management in examining and reviewing deficiencies in the internal control system, and to evaluate the effectiveness and efficiency of operations. It provides timely recommendations for improvement to ensure the continuous and effective implementation of the internal control system. Internal audit also serves as a basis for reviewing and amending the internal control system and supports management in fulfilling its responsibilities.

Organization of Internal Audit

The Company has established an internal audit unit directly under the Board of Directors, solely responsible for internal audit operations. In accordance with the Company’s scale, business conditions, management needs, and relevant legal requirements, a chief auditor is appointed.

Operation of Internal Audit

Internal audit activities are based on an annual audit plan formulated through risk assessment. The plan clearly defines the audit items, schedule, procedures, and methods. Audit staff conduct routine and special audits on a regular or irregular basis. The audit results are compiled into audit reports, along with working papers and relevant documents, for approval to ensure effective execution of the Company’s internal control system.

Deficiencies and irregularities identified in the internal control system are truthfully disclosed in the audit reports. After approval, follow-up reports are prepared at least quarterly until the issues are resolved, ensuring timely corrective actions by relevant departments.

Audit reports and follow-up reports, once approved, are submitted to independent directors for review and presented to the Audit Committee by the end of the month following the completion of each audit item.

If a significant violation or potential material loss to the Company is identified, internal auditors are required to immediately report the issue for approval and notify the Board of Directors and the Audit Committee.

Self-Assessment and Supervision

The appointment and dismissal of the chief auditor must be approved by the Audit Committee and resolved by the Board of Directors.

The performance evaluation and compensation of internal audit personnel are conducted annually. The results are approved by the Chairman and then submitted to the Remuneration Committee and the Board of Directors for approval.

Communication Between Independent Directors, Internal Audit Supervisor, and Certified Public Accountants (CPA)
1.  The Company’s independent directors maintain direct communication channels with the internal audit supervisor. Communication has been smooth. Quarterly Audit Committee meetings are held to discuss the annual audit plan and the implementation of internal audit activities. The internal audit supervisor submits audit reports to independent directors on a monthly basis and conducts additional communications as necessary.
2.  The Company’s independent directors also maintain good communication with the certifying CPA. During each quarterly Audit Committee meeting, the CPA reports to the independent directors on the review or audit results of the financial statements of the Company and its domestic and overseas subsidiaries. The CPA also communicates on whether there are any financial statement adjustments or changes in regulations that may affect financial reporting.

Summary of Recent Communications Between Independent Directors and Internal Audit Supervisor:

Date	Discussion Topic	Communication Outcome
2024/02/27	2023 Internal Control Statement 2023/11–12 & 2024/01 Audit Reports	Independent directors fully understood and the matter was included in Audit Committee minutes.
2024/04/30	2024/02–03 Audit Reports	Independent directors fully understood and the matter was included in Audit Committee minutes.
2024/07/30	2024/04–06 Audit Reports	Independent directors fully understood and the matter was included in Audit Committee minutes.
2023/11/05	2024/07–09 Audit Reports	Independent directors fully understood and the matter was included in Audit Committee minutes.
2023/12/10	2024/10 Audit Reports 2025 Audit Plan	Independent directors fully understood and the matter was included in Audit Committee minutes.

Summary of Recent Communications Between Independent Directors and CPAs:

Date	Discussion Topic	Communication Outcome
2024/02/27	2023 Consolidated and Individual Financial Statement Audit Results	Independent directors fully understood and the matter was included in Audit Committee minutes.
2024/04/30	Q1 2024 Consolidated Financial Statement Review Results	Independent directors fully understood and the matter was included in Audit Committee minutes.
2024/07/30	Q2 2024 Consolidated Financial Statement Review Results	Independent directors fully understood and the matter was included in Audit Committee minutes.
2023/11/05	Q3 2024 Consolidated Financial Statement Review Results Pre-audit communication prior to Audit Committee review	Independent directors fully understood and the matter was included in Audit Committee minutes.