Communication between independent directors, head of internal auditor and CPAs
1.The head of internal auditor reports to the Audit Committee and the Board of Directors at least once every three months on audit operations and the status of implementation at the Board Meeting. The internal audit report was delivered to the independent directors for review at the end of each month. All discussion items will be declared in the regular Board meeting minutes. The independent directors and head of internal auditor maintain effective communication with one another.
The Communications between Independent Directors and Head of Internal Auditor：
|2016.10.31||1.Proposed internal audit plan of 3Q16. |
2.Proposed the 2017 audit operational risk assessment reports and annual audit plans.
|2016.07.25||1.Proposed internal audit plan of 2Q16. |
2.Proposed the additional audit tasks of the 2016 Audit Plan.
|2016.04.25||1.Proposed internal audit plan of 1Q16. |
2.Proposed the amendment to the rules of internal control system and internal audit system.
|2016.03.03||1.Proposed the summarized reports of audit task progress and activities. |
2.Proposed the 2015 internal control system statement.
|2016.01.25||1.Proposed internal audit plan of 4Q15.|
2.While processing the review of the annual financial statements at the Audit Committee and the Board Meeting, the Board of directors appoints its CPAs to be present for reporting the audit results of financial report, material asset valuation and accounting estimates. CPAs shall discuss and communicate with directors about the issues related to financial statements.
The Communications between Independent Directors and CPAs：
|2016.01.25||1.Proposed reports on audited 2015 consolidated and individual financial statements. |
2.Proposed statement of significant asset valuation and accounting estimation.
3.Proposed other significant accounting and auditing issues.
Special task force for handling Ethical Corporate Management and its operation status：
1.The Best Practice Principles of Ethical Corporate Management and the Codes of Ethical Conduct are established accordingly. Holtek designates the Resource Management Center to be responsible for implementing and supervising a policy of ethical management. All related units of Sales & Marketing Center, Design Center, Product Center and Quality Assurance & Reliability Division shall actively co-prevent unethical conduct. Holtek’s Board of Directors is regularly reported which business activities within its business scope which are possibly at a higher risk of being involved in an unethical conduct every year. The directors and employees of the Company are avoided to provide or receive improper benefits and illegal political donations. The preventive measures are also strengthened to ensure the execution of ethical policy of corporate management.
2.When entering into contracts with agents, suppliers, customers, or other commercial transaction counterparties, Holtek shall include in such contracts terms requiring compliance with ethical policy of corporate management and that in the event the trading counterparties are involved in unethical conducts, the Company may at any time terminate or rescind the contracts.
3.Holtek shall periodically organize training and awareness programs of ethical policy for directors, managers and employees. When material misconducts or likelihood of material impairment to the Company come to their awareness upon investigation, they all have the responsibility to immediately report its supervisors of department or thru any whistleblowing channels, to prevent the consequences of committing unethical conducts. The Company shall apply the ethical policy of corporate management when evaluating its employee performance appraisal system and human resource policies to establish a clear and effective reward and discipline system.
4.There have not been any relevant cases about violating ethical corporate management up to now.