Corporate Governance

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Audit Committee

Corporate Governance

I. Composition of the Committee

An introduction to the composition (at least the names of the members) and operation of functional committees.
(i) The Company’s Audit Committee is composed of three independent directors, whose members are introduced as follows:

Independent Directors
郭錦蓉(♀)      
Independent Directors
李慶義(♂)     
Independent Directors
邱仁鈿(♂)     

Main experience (education)

  • Master of Accounting, Southern Illinois University

Current position

  • 廣信益群聯合會計師事務所查帳員/會計師/所長
  • 台灣省會計師公會會計審計委員會主任委員
  • 台北市稅務代理人協會理事長
  • 全宇昕科技股份有限公司獨立董事
  • 南寶樹脂化學工廠股份有限公司獨立董事

Main experience (education)

  • HITOTSUBASHI UNIVERSITY MBA
  • Branded Lifestyle Holdings Limited Director
  • KT Licensing Limited President/CEO

Current position

  • 達爾膚生醫科技股份有限公司獨立董事
  • Pacific Licensing Studio PTE LTD Chairman

Main experience (education)

  • 美國南伊利諾大學會計研究所碩士
  • 經濟部政府資料開放諮詢小組 委員
  • 國立政治大學金融科技研究中心 產業顧問
  • Microsoft AI Developer Advisory Board, Redmond, Washington, USA

Current position

  • 碩網資訊股份有限公司 總經理
  • 株式會社Idrasys 取締役
  • ミラクシア エッジテクノロジー株式会社 取締役

※The committee shall consist of all independent directors, with a minimum of three members, one of whom shall be the convener, and at least one of whom shall have accounting or financial expertise.


II. Operation Introduction

II. Operation Introduction

Main tasks
  1. The company’s financial statements are presented in a fair manner.
  2. Choosing a Visa Accountant (Explanation): Independence and Performance.
  3. Effective implementation of internal controls within the company.
  4. The company complies with relevant laws and regulations.
  5. Management of existing or potential risks to the company.


Management of existing or potential risks to the company.

The term of office for the members of this committee is the same as that of the board of directors to which they are appointed. The audit committee met 5 times in the most recent year (A), and the attendance record is as follows:

  Job Title
  Name
 Actual attendance(Ｂ) Number of times delegated to attend
 Actual attendance rate(%)(Ｂ/Ａ) Remark
Independent
Directors
 郭錦蓉 2 0 100% convener
(Newly appointed on May 27, 2025)
Independent Directors
 雷振宏 3 0 100% convener
(Dismissed on 2025/5/27)
Independent Directors
 李慶義 4 1 80% none
Independent Directors
 邱仁佃 5 0 100% none


IV. Other matters that should be recorded
Meeting Date
 Period
 Proposal content
  Resolution results
2022
2022-07-12 First Session, 1th Meeting
1. Based on the Company's consolidated financial statements for 2021 and 2020
2. Appointment of Financial Officer and Audit Officer
3. Establish the company's and its subsidiaries' "Internal Control System", "Internal Audit Implementation Rules", "Internal Control Self-Inspection Procedures", and "Internal Control Management Measures (including Accounting System)".
4. Establish procedures for the company's "Acquisition or Disposal of Assets", "Derivatives Transactions", "Endorsement and Guarantee Procedures", "Lending Funds to Others Procedures", and "Related Party Transactions Procedures".
5. The Company's 2022 Audit Plan
6. Ratify the appointment of the certified public accountant by our company.
7. Issue 5,950,000 employee stock options and formulate the procedures for issuing and subscribing to employee stock options.
8. Handling the case of cash capital increase and issuance of new shares
9. Approval of the 2021 profit distribution plan.
 Passed as per the plan
2022-08-16 First Session,
2th Meeting
 1. Appointment of Chief Accountant Passed as per the plan
2022-10-11 First Session, 3th Meeting
 1. The proposed consolidated financial statements for the fiscal years 2019-2021 and the second quarter of 2022 are to be approved.
2. Internal Control System Statement (Draft)
3. Proposed revisions to the company's "Internal Control Management Procedures"
4. Proposed revisions to the Company's "Procedures for Acquiring or Disposing of Assets," "Procedures for Dealing with Derivatives," "Procedures for Related Party Transactions," "Procedures for Endorsement and Guarantee Management," and "Procedures for Lending Funds to Others."
5. Case involving cash capital increase through issuance of new shares for initial public offering and public underwriting, and existing shareholders' waiver of subscription rights.
6. Cases regarding over-allotment agreements and voluntary collective guarantee agreements
7. Proposed financial forecasts for the fourth quarter of 2022 and the first quarter of 2023.
 Passed as per the plan
2022-11-14 First Session,  4th Meeting
1.  Proposed approval of the consolidated financial statements for the third quarter of 2022. Passed as per the plan
2022-12-14 First Session, 5th Meeting
1. Proposed approval of the company's 2023 audit plan.
2. The proposed 2023 operating budget proposal.
3. The company intends to issue ordinary shares through a cash capital increase to facilitate a pre-IPO public offering.
 Passed as per the plan
2023
2023-03-10 First Session,6th Meeting
1. Proposed 2022 financial statements
2. Proposed approval of the 2022 profit distribution plan.
3. Internal Control System Statement (Draft)
4. Draft a pre-approval policy for certified public accountant firms providing non-confirmation services.
 Passed as per the plan
2023-04-28 First Session, 7th Meeting
1. Prepare the Company’s consolidated financial statements for the first quarter of 2023.
2. Proposed acquisition of the production line at the Taipei plant of Arizon RFID Technology 
3. Assessment of the Independence, Competency, Appointment, and Remuneration of the Company's Certified Public Accountants
 Passed as per the plan
2023-08-02 First Session, 
8th Meeting
1. Prepare the Company’s consolidated financial statements for the second quarter of 2023.
2. Proposed that the Company and its subsidiaries act as joint invoice issuers for the financing and loan applications of their subsidiaries with various banks, and that the Company and its subsidiaries issue letters of liability for the financing and loan applications of their subsidiaries with various banks.
3. In order to expand its market share in the United States, the Company plans to establish a subsidiary in the United States.
 Passed as per the plan
2023-09-06 First Session, 
9th Meeting
1. In order to expand its market in Vietnam, our company plans to establish a subsidiary in Vietnam. Passed as per the plan
2023-11-08 First Session, 
10th Meeting
1. Prepare the Company’s consolidated financial statements for the third quarter of 2023.
2. Proposed approval of the company's 2024 audit plan.
 Passed as per the plan
2023-12-08 First Session, 
11th Meeting
1. Our company plans to invest US$7 million in Arizon Technology (Vietnam) Co., Ltd. (tentative name), which will be used to sign land purchase contracts in Vietnam on behalf of our subsidiary to expand our operating base.
2. It is proposed to lend NT$140 million to "Arizon RFID Technology". The loan term is one year from the date of disbursement, and the loan interest rate is a fixed annual rate of 1.95%. In addition, the borrower may prepay the loan according to its financial situation during the loan term, and the repaid loan amount will be cancelled at the same time when the loan is prepaid. 
 Passed as per the plan
2024
2024-03-12 First Session, 
12th Meeting
1. Proposed 2023 financial statements
2. Proposed approval of the 2023 profit distribution plan.
3. Internal Control System Statement (Draft)
 Passed as per the plan
2024-05-09 First Session, 
13th Meeting
1. Prepare the Company’s consolidated financial statements for the first quarter of 2024.
2. Assessment of the Independence, Competency, Appointment, and Remuneration of the Company's Certified Public Accountants
3. It is proposed to lend US$6 million to its subsidiary, "Arizon Corporation," on a revolving basis for one year, with a fixed annual interest rate of 3.05%.
 Passed as per the plan
2024-08-07 First Session, 
14th Meeting
1. Prepare the Company’s consolidated financial statements for the second quarter of 2024.
2. Revise the company's internal control system "Computerized Cycle".
3. The company plans to issue its first unsecured convertible corporate bond in the Republic of China in 2024, with a maximum total face value of NT$1 billion.
 Passed as per the plan
2024-11-08 First Session, 
15th Meeting
1. Prepare the Company’s consolidated financial statements for the third quarter of 2024.
2. Approval of the Company's 2025 Audit Plan
3. Please agree to our proposal to change the functional currency from Renminbi to New Taiwan Dollar.
 Passed as per the plan
2024-12-23 First Session, 
16th Meeting
1. It is proposed to lend US$10 million to its subsidiary, "Arizon Technology (Vietnam) Co., Ltd.", for a term of one year, with a fixed interest rate of 2.80% per annum.
2. Revise and supplement the company's internal control systems: "Procurement and Payment Cycle" and "Sustainable Information Management Regulations".
3. Propose an audit plan for the company in 2025.
 Passed as per the plan
2025
2025-03-11 First Session, 
17th Meeting
1. Proposed 2024 financial statements
2. Proposed approval of the 2024 profit distribution plan.
3. Internal Control System Statement (Draft)
4. Revise the "Computerized Cycle" section of the company's internal control system.
 Passed as per the plan
2025-04-14 First Session, 
18th Meeting 
(temporary)		 1. It is proposed to issue 750 units of employee stock options and to formulate the issuance and subscription procedures for the employee stock options.
2. Proposed capital increase for its U.S. subsidiary, Arizon Corporation.
 Passed as per the plan
2025-05-12 First Session, 
19th Meeting
1. Prepare the Company’s consolidated financial statements for the first quarter of fiscal year 2025.
2. Assessment of the Independence, Competency, Appointment, and Remuneration of the Company's Certified Public Accountants
3. It is proposed to appoint Ms. Zhang Shufen as the Company's Chief Financial Officer and Spokesperson, Ms. Yan Zhaoling as the Company's Head of Accounting, and Ms. Chen Yingjie as the Company's Head of Corporate Governance.		 Passed as per the plan
2025-08-12 Second  Session, 
1th Meeting
1. Prepare the Company's consolidated financial statements for the second quarter of 2025.
2. Proposed list of employees to be allocated shares in the first issuance of shares in 2025.
 Passed as per the plan
2025-11-11 Second  Session, 
2th Meeting
1. We propose to appoint Ms. Huang Xihui as the Company's Head of Accounting and Head of Corporate Governance.
2. Prepare the Company's financial report for the third quarter of 2025.
3. The proposed 2026 operating budget of the Company.
4. It is proposed to lend US$10 million to its subsidiary, "Arizon Technology (Vietnam) Co., Ltd.", for a term of one year, to be used in a single transaction, with a proposed fixed interest rate of 3.7% per annum.
5. It is proposed to lend US$6 million to its subsidiary, "Arizon Corporation," on a revolving basis over a one-year period, with a proposed fixed interest rate of 3.7% per annum.
6. Proposed approval of the company's 2026 audit plan.
7. It is proposed to establish a "Sustainability Development Committee" and formulate "Organizational Regulations for the Sustainability Development Committee".
8. Revise certain clauses of the company's internal control system, "Measures for Preventing Insider Trading".
9. Revise certain clauses of the company's internal control system, specifically the "Risk Management Policy and Operating Procedures".
10. The company's internal control system, "Guidelines for Information and Communications Security Management," is hereby amended.
 Passed as per the plan


V. Implementation Status of Functional Committee Performance Evaluation

The Company has completed the implementation of the 2025 external performance evaluation by the Audit Committee, and the Board of Directors reported the evaluation results on November 11, 2025.

During the evaluation period
 September 1, 2024 to August 30, 2025
Scope of assessment
 Audit Committee Performance Evaluation
Evaluation methods
 The external assessment agency requested the company to provide the documents specified by it, and distributed the self-assessment questionnaires related to the performance evaluation to all directors for completion and collection. It also appointed three review committee members to issue an independence statement and conduct the assessment. On October 8, 2025, the agency conducted an online interview with the company's chairman, independent directors, corporate governance manager, and audit manager.
Assessment content
 The performance evaluation criteria for our company's functional committees cover the following five dimensions:
  1. The degree of involvement in the company's operations.
  2. Understanding the responsibilities of functional committees.
  3. Improve the quality of decision-making by functional committees.
  4. Composition and selection of members of functional committees.
  5. Internal control.
Evaluation results
 The external assessment agency issued an assessment report on October 15, 2025, summarizing the assessment conclusions and recommendations as follows:
I. Recommendations
1. Establish a functional committee at the board level for the "Sustainability Development Committee".
2. Plan for one-third of board seats to be held by women.
3. The number of board members who are also employees should be less than one-third of the total number of board seats.
4. Develop specific measures to enhance corporate value and submit them to the board of directors.
5. The Corporate Governance Practice Code should be amended to include a provision prohibiting directors or employees from trading their shares during the closed period prior to the release of financial reports, and this should be disclosed on the official website.
6. Establish succession plans for board members and key management personnel.
7. Risk management shall be overseen by a functional committee at the board level, which shall report to the board at least once a year.
8. The company shall report its compliance with the integrity management system to the board of directors at least once a year.
9. Develop an intellectual property management plan that is linked to operational objectives, and report its implementation status to the board of directors at least once a year.
10. Develop and disclose policies linking senior management compensation to ESG-related performance evaluations.
11. Actively promote environmental and social governance.
 
II. Improvement Plan
1. The selection of board members is based on the principle of meritocracy. In addition, attention should be paid to gender equality among board members, with the goal of increasing the number of female directors to more than one-third.
2. Plan and formulate specific measures to enhance corporate value, submit them to the board of directors, and disclose relevant information on the "Corporate Value Enhancement Plan Zone" of the public information observation station to promote the company's focus on shareholder value, guide it to enhance corporate value, and actively communicate with shareholders.
The evaluation results will be reported to the Board of Directors on November 11, 2025, as a reference for future improvements.


The Company has completed the 2024 Audit Committee performance evaluation and the Board of Directors reported the evaluation results on March 11, 2025.

During the evaluation period
 January 1, 2023 to December 31, 2023
Scope of assessment
 Audit Committee Performance Evaluation
Evaluation methods
 Functional Committee Self-Assessment
Assessment content
 The performance evaluation criteria for our company's functional committees cover the following five dimensions:
  1. Understanding and suggestions regarding the company's operations.
  2. Understanding the responsibilities of functional committees.
  3. Improve the quality of decision-making by functional committees.
  4. Composition and selection of members of functional committees.
  5. Internal control.
Evaluation results
 The Board of Directors provided the self-assessment questionnaire related to the performance evaluation to all directors on January 30, 2024, and collected the questionnaires on February 7, 2024. The evaluation results were then compiled as follows:
1. The self-assessment results of the Audit Committee and the Compensation Committee are "Excellent" (score 4.81).
2. The evaluation results will be reported to the Board of Directors on March 12, 2024, as a reference for future improvements.。

The Company has completed the 2023 Audit Committee performance evaluation and the Board of Directors reported the evaluation results on March 12, 2024.

During the evaluation period
 January 1, 2023 to December 31, 2023
Scope of assessment
 Audit Committee Performance Evaluation
Evaluation methods
 Functional Committee Self-Assessment
Assessment content
 The performance evaluation criteria for our company's functional committees cover the following five dimensions:
  1. Understanding and suggestions regarding the company's operations.
  2. Understanding the responsibilities of functional committees.
  3. Improve the quality of decision-making by functional committees.
  4. Composition and selection of members of functional committees.
  5. Internal control.
Evaluation results
 The Board of Directors provided the self-assessment questionnaire related to the performance evaluation to all directors on January 30, 2024, and collected the questionnaires on February 7, 2024. The evaluation results were then compiled as follows:
1. The self-assessment results of the Audit Committee and the Compensation Committee are "Excellent" (score 4.81).
2. The evaluation results will be reported to the Board of Directors on March 12, 2024, as a reference for future improvements.