JEAN GROUP

Internal Audit Organization And Operation

I. purpose and scope

The purpose of internal audit unit is to assist the board and managers to exam and review the systems of internal controls and the effectiveness of management, and provide timely suggestions for improvement to ensure and maintain the effective implementation of the internal control systems and as a basis for review and amendment of the internal control systems.

II. internal audit organization and staffing

1. JEAN Group has established an internal audit unit which is directly under the Board of Directors. The appointment and dismissal of the chief internal auditor is agreed by the Board of Directors. In addition to regularly report audit business to the Audit Committee, chief internal auditor would also attend the board meeting and report to the Board of Directors.
2. The appointment of the internal auditors of the Company shall be in accordance with the terms and conditions set out in the Competent Authority. The internal auditors shall, in accordance with the Company's size, business conditions, management needs and other relevant laws and regulations, allocate the competent and appropriate number of full-time internal auditors. (There are 2 full-time internal auditors in the company’s internal audit unit.) Set up an audit deputy, the deputy of the implementation of the audit business in accordance with the provisions of this approach.
3. The Internal auditors have to participate in continuing education every year and take internal auditing seminars approved by the competent authority to improve audit quality and capacity.
4. Company's own listed, OTC and public offering subsidiaries, there are another full-time internal auditors shall be responsible for the audit of the subsidiary business. Internal audit unit of the Company conducts the supervision of the audit business of the subsidiary.

III. Internal Audit Operations Management

1. The internal audit implementation rules will clarify the internal control of the internal auditing and review company's operating procedures and report on the suitability of the design and routine operation of the control so as to achieve the purpose of the internal control system. The internal control system and the scope of the audit shall cover all operations of the Company and the subsidiaries of the Company.
2. Auditing work is mainly based on the annual audit plan adopted by the Board and executed accordingly. This audit plan is drawn up based on identified risk to examine the company’s internal control system, and audit reports are formulated enclosing worksheets and other relevant information.
3. Internal auditors would fully communicate the results of the annual audit subjects with the audited units, and would truthfully disclose the defects and irregularities found in the internal control systems in the audit report, and would follow up after reported and at least keep quarterly tracking reports until improved to ensure appropriate measures of improvement have been made by the relevant unit.
4. Internal audit unit would reexamine the self-assessment reports of each unit, and along with the improvement status of the discovered internal control defects and irregularities, and report to the Board and General Manager with the self-assessment results, to be the basis for the Board and General Manager’s overall assessment of the internal control systems’ effectiveness and issuance of internal control system statement.


The Way In Which The Chief Internal Auditor Communicates With The Audit Committee

1. Regularly report quarterly audit committee audit plan implementation of the situation, indicating the discovery of internal control missing and abnormal changes, and respond to the questions raised by the independent directors and follow the instructions to strengthen the risk control of the audit.
2. Monthly audit of the implementation of the audit report last month reported to the independent directors, independent directors communicate by telephone, e-mail or by face if they have questions or instructions. If a major violation is found, or internal and external personnel to report the case involving directors, should report to independent directors immediately.
3. The main communication contents of 2017 are summarized below,
(Notes: communication with the supervisor before 2017.05.26)

Date Communication content Communication situation
2017/2/23 Implementation of the 2016 audit plan.
2016 Internal Control System Statement.
Internal audit did not find significant impact on the design and implementation effectiveness of the internal control system.
The independent directors of the Company have no objection to the implementation of the audit business and the results.
2017/5/12 Until the March 2017 audit plan implementation.
2017/8/8 Until the July 2017 audit plan implementation.
2017/11/7 Until the October 2017 audit plan implementation.
2018 audit plan.

Communications Between Independent Directors, Chief Internal Auditors And CPA’s

I. Audit committee members and meeting regulations

1. The audit committee consists of all independent directors of the board.
2. The audit committee’s meeting is held at a quarterly basis. Depending on contingencies, additional meetings can be held at any time.

II. The methods of communication between internal audit managers and the audit committee

Please refer to the internal auditing manual.

III. The methods of communication between CPA and the audit committee

1. Peridioc meetings: CPA convenes with the audit committee after auditing semi-yearly financial reports.
2. Additional meetings: To be arranged if there are additional business concerns or internal control issues.
3. 2017 meeting content and summary are as follows

Date Items Content Company Feedback
2017/2/23 2016 annual financial report Auditing result of 2016 consolidated financial report and individual reports. An explanation of audit items adjusted in 2016 and a discussion of their adapted GAAP and category.
The impact of new amendments on financial reports Since 2017, the company’s financial reports have followed Audit Report No. 57 Financial Statements Audit Report. The company complies with GAAS No. 57, a disclosing of listed items in financial reports.
Auditing items Explanation Company feedback.
2017/8/8 2017 2nd quarter financial report Auditing result of 2017 consolidated financial report and individual reports. An explanation of audit items adjusted in 2017 2nd quarter.
A discussion of new GAAS statements released.
The upcoming impact of IFRS9 & IFRS15 Recommendations on business operations, human resources and accounting reports. An assessment of company compatibility.
Questionnaires and research in regards to IFRS16 An explaination of IFRS16. An assessment of company compatibility.

Corporate Governance Self-Assessment Report

Year First Second
2016  
2015
2014

Corporate Governance Evaluation Results

Year Download
2016
2015
2014
Title Download Title Download
Articles Ethical Corporate Management Best Practice Principles
Corporate Governance Code Rules Governing Financial and Business Matters Between Corporation and its Affiliated Enterprises
Rules and Procedures of Shareholders Meeting Procedures for Handling Material Inside Information and Prevention of Insider Trading
Rules of Procedure for Board of Directors Meetings Procedure for Lending of Capital
Guidelines for the Adoption of Codes of Ethical Conduct Procedure of Governing the Acquisition and Disposal of Assets
Evaluation Methods of Board Performance Procedures for Ethical Management and Guidelines for Conduct
Procedures for Halt and Resumption Applications Procedures for Endorsements and Guarantees
Audit Committee Charter Rules Governing the Scope of Powers of Independent Directors
Directions for the Implementation of Continuing Education for Directors Procedures for Election of Directors

Audit Committee

The purpose of the operation of this committee:

1. Fair presentation of the financial reports of this Corporation.
2. The hiring (and dismissal), independence, and performance of certificated public accountants of this Corporation.
3. The effective implementation of the internal control system of this Corporation.
4. Compliance with relevant laws and regulations by this Corporation.
5. Management of the existing or potential risks of this Corporation.

The powers of the Committee:

1. The adoption of or amendments to the internal control system pursuant to Article 14-1 of the Securities and Exchange Act.
2. Assessment of the effectiveness of the internal control system.
3. The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, of the procedures for handling financial or business activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or guarantees for others.
4. Matters in which a director is an interested party.
5. Asset transactions or derivatives trading of a material nature.
6. Loans of funds, endorsements, or provision of guarantees of a material nature.
7. The offering, issuance, or private placement of equity-type securities.
8. The hiring or dismissal of a certified public accountant, or their compensation.
9. The appointment or discharge of a financial, accounting, or internal audit officer.
10. Annual and semi-annual financial reports.
11. Other material matters as may be required by this Corporation or by the competent authority.

The matters under the preceding paragraph shall be subject to the approval of one half or more of the entire membership of the Committee and shall be submitted to the board of directors for a resolution.
Any matter in the paragraph 1, with the exception of subparagraph 10, that has not been approved by one half or more of the entire membership of the Committee may be adopted with the approval of two thirds or more of the entire board of directors.
"The entire membership," as used herein, shall be counted as the number of members actually in office at the given time.
The convener of the Committee shall represent the Committee to the public.

Number of meetings:

The Committee shall convene at least once quarterly, and may call a meeting at its discretion whenever necessary.


Remuneration Committee

The purpose of the operation of this committee:

To strengthen corporate governance and improve the company's directors, functional members and managerial officers remuneration system.

The powers of the Committee:

1. The Committee shall exercise the care of a good administrator to faithfully perform the following duties and present its recommendations to the board of directors for discussion.
(1). Establishing and periodically reviewing the performance goals for the directors, functional members, and managerial officers of this Corporation and the policies, systems, standards, and structure for their compensation.
(2). Periodically assessing the compensation for the directors, functional members, and managerial officers.
2. The Committee shall perform the duties under the preceding paragraph in accordance with the following principles:
(1). Performance assessments and compensation levels of directors, functional members, and managerial officers shall take into account the general pay levels in the industry, also to be evaluated are the reasonableness of the correlation between the individual's performance and this Corporation's operational performance and future risk exposure.
(2). There shall be no incentive for the directors or managerial officers to pursue compensation by engaging in activities that exceed the tolerable risk level of this Corporation.
(3). For directors and senior managerial officers, the percentage of bonus to be distributed based on their short-term performance and the time for payment of any variable compensation shall be decided with regard to the characteristics of the industry and the nature of this Corporation's business.
3. "Compensation" as used in the preceding two paragraphs includes cash compensation, stock options, profit sharing and stock ownership, retirement benefits or severance pay, allowances or stipends of any kind, and other substantive incentive measures. Its scope shall be consistent with the compensation for directors, functional members, and managerial officers as set out in the Regulations Governing Information to be Published in Annual Reports of Public Companies.
4. The board of directors should consider the amount of payroll remuneration, payment methods and future risks of the company.
5. If the board of directors does not adopt or amend the proposal of the committee, it shall be attended by more than two-thirds of all the directors and shall be subject to the approval of more than half of the directors present and shall consider whether the remuneration and remuneration passed or not Committee's recommendation.
6. The remuneration passed by the board of directors is superior to that recommended by the board of directors. Except for the differences and reasons, the remuneration approved by the board of directors shall be announced within 2 days after the approval by the board of directors on the information website designated by the competent authority.

Number of meetings:

Meetings of the Committee shall be held at least 2 times a year. In emergency circumstances, however, the meeting may be convened on shorter notice.


Corporate Sustainability Committee

The purpose of the operation of this committee:

In order to actively promote the implementation of the spirit of corporate sustainability, integrity management and social responsibility, the company set up the corporate sustainability committee to promote, including the three major areas of economy, environment and society, in order to strengthen the operating system of the company and devote itself to environmental conservation practice and improvement social responsibility.

The powers of the Committee:

1. Develop a corporate sustainability policy.
2. Corporate sustainability, integrity management and social responsibility related to the planning, implementation and review, and report regularly to the Board of Directors.
3. To review the objectives, strategies and action plans of the corporate sustainability policy and to track the progress of the programs.
4. Discuss issues of concern to all stakeholders, including shareholders, customers, suppliers, employees, governments, non-profit organizations, communities and the media, and supervise and communicate programs.
5. Review the effectiveness of corporate sustainability report preparation.

Number of meetings:

Meetings of the Committee shall be held at least 2 times a year. In emergency circumstances, however, the meeting may be convened on shorter notice.


Committee members:

Job Title Name Audit Committee Remuneration Committee Corporate Sustainability Committee
Director LIN, CHUAN-CHIEH     V Convener
Director HSU CHIH MING   V  
Independent Director CHAO CHERNG V    
Independent Director LEE SHU TAO V Convener V Convener V
Independent Director CHEN SHIOU CHERN V V V
Operational situation of Committees

Audit Committee Charter

Remuneration Committee Charter

Corporate Sustainability Committee Charter

Board Meeting Records

Year First Second Third Fourth Fifth Sixth Seventh
2017
2016  
2015
2014  
2013  
2012    
2011            
2010            

董事會績效評估

Year Download
2017
2016

董事會成員多元化政策與執行

Year Download
2017

Rules Of Procedure

  • Procedures for Election of Directors and Supervisors
  • Rules of Procedure for Board of Directors Meetings
  • Rules Governing the Scope of Powers of Independent Directors
  • Rules Governing the Scope of Powers of Supervisors
  • Guidelines for the Adoption of Codes of Ethical Conduct for Directors, Supervisors and Managers
  • Directions for the Implementation of Continuing Education for Directors and Supervisors
Job Title Name Experience and Education Current Duties in Our Company and Other Companies
Chairman of the Board K-MAY INV., LTD. / LIN, CHUAN-CHIEH Bachelor's Degree University of California Riverside
JEAN Co., LTD: Chairman of the Board
JEAN(Malaysia) SDN.BHD: Director of the Board
JERRY INV.CO.,LTD.: Director of the Board
JEFFREY INV. CO.,LTD.: Director of the Board
JET OPTOELECTRONICS CO.,LTD.: Director of the Board
JET Optoelectronics Co(Suzhou): Supervisor
JEAN PROPERTY MANAGEMENT: Chairman of the Board
SAMPO Inc.: Supervisor
Gorilla Technology Group, Inc.: Director of the Board
Telmedia Intelligence Inc.: Director of the Board
SIMON TRADING CO.,LTD: Director of the Board
Director of the Board RIVETEL CO., LTD. / LIN, CHUAN-KAI Bachelor's Degree University of California Santa Barbara
JET Optoelectronics Co.: Chairman of the Board
JET Optoelectronics Co.: Chairman of the Board
GOLDEN KNIGHTLTD: Chairman of the Board
JEAN(Malaysia) SDN.BHD: Director of the Board
JET Optoelectronics Co.(Suzhou): Chairman of the Board
JEAN Property Management Limited: Director of the Board
SIMON TRADING CO.,LTD: Chairman of the Board
Director of the Board HSU CHIH MING Master's Degree Tatung University,Master of Mechanical Engineering
EGANG CO., LTD: Vice General Manager
宜鋼股份有限公司副總經理
宜捷威科技股份有限公司董事長
智睦國際投資股份有限公司董事
Director of the Board HSU, CHANG-I Bachelor's Degree Tamkang University
UNIC Technology Corp. Inc: Deputy General Manager
Prader-Willi Syndrome Association(Taiwan): Deputy Secretary-General
RIVETEL CO., LTD.: Supervisor
JET OPTOELECTRONICS CO.,LTD.: Supervisor
Independent Director CHAO CHERNG Bachelor's Degree Kennedy Western University
Bachelor of science in Engineering
達啓投資股份有限公司副總經理
SmartInfo Co.,Ltd: General Manager
Silitech Technology Corporation: Director
達啓投資股份有限公司副總經理
Silitech Technology Corporation: Director
Independent Director LEE SHU TAO Master's Degree John f Kennedy University MBA
Cotech Engineering Corporation: Chairman
Cotech Engineering Corporation: Chairman
Independent Director CHEN SHIOU CHERN Master's Degree National Taiwan University
Department of Electrical Engineering
National Chengchi University MBA
Chunghwa Picture Tubes,Ltd.: Vice General Manager
BOE Technology Group Co., Ltd: General Manager
BOE Technology Group Co., Ltd: General Manager

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