2023
The Audit Committee convened five times (A) during the 2023 fiscal year. The attendance of independent directors, the committee’s annual work priorities, and its operational highlights for the year are as follows:
Title |
Name |
Actual Attendance (B) |
Proxy Attendance |
Actual Attendance Rate (B/A) |
Remarks |
Independent Director |
Chin-Tung (Daniel) Chang (Note) |
5 |
0 |
100.00% |
Reappointed on June 9, 2023 |
Independent Director |
Kuang-Jen (KJ) Chou |
3 |
0 |
100.00% |
Newly appointed on June 9, 2023 |
Independent Director |
Jin-Fa Huang (Note) |
5 |
0 |
100.00% |
Reappointed on June 9, 2023 |
Note: Independent Director Mr. Jin-Fa Huang passed away on January 24, 2024. The company currently has a vacancy for one Independent Director. Independent Director Mr. Chin-Tung (Daniel) Chang assumed the role of convener starting February 5, 2024.
The actual attendance rate is calculated based on the number of Audit Committee meetings held during the tenure of each Independent Director and their actual attendance.
Other matters to be recorded:
1.Annual Work Priorities, Operations, and Resolutions in Accordance with Article 14-5 of the Securities and Exchange Act or Matters Approved by Two-Thirds of All Directors Without Audit Committee Approval
The Audit Committee convened five meetings during the 2023 fiscal year, with key deliberations including:
Formulation or revision of the internal control system in accordance with Article 14-1 of the Securities and Exchange Act; evaluation of the effectiveness of the internal control system; formulation or revision of procedures for significant financial and business activities, such as the acquisition or disposal of assets, derivative transactions, lending of funds, and providing endorsements or guarantees, in accordance with Article 36-1 of the Securities and Exchange Act; matters involving directors' conflicts of interest; major asset or derivative transactions; significant lending of funds, endorsements, or guarantees; the issuance, offering, or private placement of equity-related securities; the appointment, dismissal, or remuneration of CPAs; the appointment or dismissal of financial, accounting, or internal audit officers; annual financial reports signed or sealed by the Chairman, management, and accounting officers, as well as second-quarter financial reports audited by CPAs; and other significant matters stipulated by the company or regulatory authorities.
Review of Financial Reports
The Board of Directors prepared the 2023 Business Report, Financial Statements, and Profit Distribution Proposal. The Financial Statements were audited by KPMG Taiwan, which issued an audit report. These documents were reviewed by the Audit Committee and found to be compliant with applicable regulations without discrepancies.
Evaluation of Internal Control System Effectiveness
The Audit Committee assessed the effectiveness of the company’s internal control policies and procedures, including controls over finance, operations, risk management, information security, and regulatory compliance. It also reviewed periodic reports from the internal audit department, CPAs, and management on risk management and compliance.
Referring to the 2013 Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the Audit Committee concluded that the company’s risk management and internal control systems are effective. The company has implemented necessary mechanisms to monitor and rectify any violations.
Appointment of CPAs
The Audit Committee is responsible for overseeing the independence of the CPA firm to ensure the integrity of financial statements. Generally, the CPA firm is prohibited from providing services unrelated to taxation unless explicitly approved. All services provided by the CPA firm must be authorized by the Audit Committee.
To ensure independence, the Audit Committee follows Article 47 of the Accounting Act and Statement of Auditing Standards No. 10, which emphasize integrity, impartiality, objectivity, and independence. An independence evaluation form is used to assess the CPA’s independence, professionalism, and suitability, including any business or financial relationships with the company.
On October 28, 2022, during the 3rd Audit Committee Meeting (14th Session) and the 14th Board Meeting (15th Session), the Audit Committee and the Board of Directors confirmed that CPAs Tzu-Chieh Tang and Jing-Wun Gao from KPMG Taiwan met the independence evaluation standards and were deemed qualified to serve as the company’s financial and tax auditors.
Operational Status for the Year 2023
Meeting Date Agenda Items and Follow-up |
Matters Listed in Article 14-5 of the Securities and Exchange Act |
Matters resolved without the approval of the Audit Committee and approved by more than two-thirds of all directors |
2023-01 Audit Committee Meeting - March 2, 2023 |
|
|
◎Proposal on the "Statement of Internal Control System" and the "Self-Assessment Report on Implementation Results" for the Year 2022. |
V |
- |
◎Proposal to Amend the Company's "Internal Control System" and "Detailed Implementation Rules for Internal Audit Operations." |
V |
- |
◎Proposal on the Financial Statements and Business Report for the Year 2022 and the Business Plan for the Year 2023. |
V |
- |
◎Proposal for Earnings Distribution for the Year 2022. |
V |
- |
◎Proposal to Discontinue the Private Placement of Securities Approved at the 2022 Annual General Shareholders' Meeting. |
V |
- |
◎To approve issuance of new common shares for cash to sponsor issuance of the overseas depositary shares and/or issuance of new common shares for cash in public offering and/or issuance of new preferred shares for cash in public offering and/or issuance of new common shares for cash in private placement and/or issuance of overseas or domestic convertible bonds in private placement . |
V |
- |
◎Review of the Proposal for Auditor Service Fees for 2023. |
V |
- |
◎Establishment of the Company's Pre-Approval Policy for Non-Assurance Services. |
V |
- |
Resolution of the Audit Committee: Approved unanimously by all attending members of the Audit Committee. |
|
|
Company's handling of the Audit Committee's opinion: The proposal was submitted to the Board of Directors and approved unanimously by all attending directors. |
|
|
2023-02 Audit Committee Meeting - April 26, 2023 |
|
|
◎Approval of the Consolidated Financial Report for the First Quarter of 2023. |
V |
- |
Resolution of the Audit Committee: Approved unanimously by all attending members of the Audit Committee. |
|
|
Company's handling of the Audit Committee's opinion: The proposal was submitted to the Board of Directors and approved unanimously by all attending directors. |
|
|
2023-03 Audit Committee Meeting - August 4, 2023 |
|
|
◎Approval of the Consolidated Financial Report for the Second Quarter of 2023 . |
V |
- |
◎Approval of the Proposal to Invest in Common Shares of " K2 International Medical Inc." |
V |
- |
Resolution of the Audit Committee: Approved unanimously by all attending members of the Audit Committee. |
|
|
Company's handling of the Audit Committee's opinion: The proposal was submitted to the Board of Directors and approved unanimously by all attending directors. |
|
|
2023-04 Audit Committee Meeting - October 30, 2023 |
|
|
◎Formulation of the Internal Audit Plan for 2024. |
V |
- |
◎Approval of the Consolidated Financial Report for the Third Quarter of 2023. |
V |
- |
◎Appointment of the Auditor for the Certification of the Company's 2024 Financial Statements. |
V |
- |
Resolution of the Audit Committee: Approved unanimously by all attending members of the Audit Committee. |
|
|
Company's handling of the Audit Committee's opinion: The proposal was submitted to the Board of Directors and approved unanimously by all attending directors. |
|
|
2023-05 Audit Committee Meeting - December 13 2023 |
|
|
◎Approval of the Proposal to Sell the Equity of "Sanfeng Dongxing Medical Equipment (Jiangsu) Co., Ltd." |
V |
- |
Resolution of the Audit Committee: Approved unanimously by all attending members of the Audit Committee. |
|
|
Company's handling of the Audit Committee's opinion: The proposal was submitted to the Board of Directors and approved unanimously by all attending directors. |
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|
2. Execution of Independent Directors’ Recusal from Conflict-of-Interest Proposals: None.
3. Communication Between Independent Directors, Internal Audit Supervisors, and CPAs:
The company regularly convenes Audit Committee meetings and, as needed, invites CPAs, internal audit supervisors, and relevant management personnel to attend.
The internal audit supervisor provides periodic summary audit reports to the Audit Committee based on the annual audit plan. The Audit Committee also regularly reviews and communicates on matters related to the company’s internal control systems, internal audit personnel, and their work, offering recommendations as necessary.
Each year, the Audit Committee engages with the company’s CPAs to discuss the review or audit results of semi-annual or annual financial statements, as well as other communication matters required by regulations. Additionally, the committee conducts independence evaluations regarding the selection of CPAs and the auditing and non-auditing services they provide.