Internal Audit

The Company's Audit office is an independent unit that reports directly to the Board
of Directors. The Audit Office shall consists of qualified persons in an appropriate
number as full-time internal auditors based on the Company’s scale, business
conditions, management needs, and other applicable laws and regulations. The Audit
Office is comprised of a Chief Audit Executive and three full-time dedicated internal
audit specialists. Any appointment or discharge of the Chief Audit Executive shall be
approved by the Board of Directors, and be reported to the FSC for recording via the
internet-based information system by the 10th of the following month.

The Charter of Internal Audit is to review the internal controls in the company's
business processes and to report on those controls with respect to the adequacy,
effectiveness, and efficiency of their design as well as their actual functioning on
day-to-day basis. All parts of the Company and its subsidiaries are open for review by
the Audit Office.

Regular internal audits are executed according to the annual audit plan, which needs
to be approved by the Board of Directors. Such plan will take into account risks that
have been identified. Special audit projects are implemented as needed. These audits
enhance internal control and provide timely recommendations for future
improvements. In accordance with corporate governance, audit reports are regularly
submitted to and reviewed by the Audit Committee.

The Method and Schedule of Contacts among The Head of Internal Audit, CPA,
and Independent Directors:

1. In additional to emailed monthly audit reports to independent directors, the head of internal
    audit reported major findings and suggestions to independent directors during Audit     Committee meetings.

2. Summarized quarterly consolidated and stand alone financial statements information should
    be delivered and communicated with independent directors during Audit Committee
    meetings in order to comply with regulations defined in No 39 Statements of Auditing
    Standards and No.0930105373 of Securities and Futures Bureau.

3. Audit Committee should have no less than one meeting per quarter. Summary discussion
    among independent directors, CAP and internal audit of each Audit Committee meetings for
    2017 as following:

Date Audit Committee Key Discussion Point
Feb 22 2017 1st term
13th meeting
1. Presented the results of 4Q16 internal audit.
2. Authorized 2016 Internal Audit Report Declaration after reviewed the internal audit procedures and results of self-evaluation.
3. CPA presented 2016 financial reports. Communicated for major financial estimation, Tax and Securities governing regulations updates. CAP also presented 2017 audit schedule and identified major risks items.
No suggestion from independent directors.
May 5 2017 1st term
15th meeting
1. Presented the results of 1Q17 internal audit.
2. CPA presented 1Q17 financial reports.Communicated for major financial estimation, Tax and Securities governing regulations updates.
No suggestion from independent directors.
Aug 8 2017 2nd term
2nd meeting
1. Presented the results of 2Q17 internal audit.
2. CPA presented 2Q17 financial reports, and communicated for major financial estimation.
No suggestion from independent directors.
Nov 1 2017 2nd term
3rd meeting
1. Presented the results of 3Q17 internal audit.
2. Established 2018 internal audit schedule.
3. CPA presented 2Q17 financial reports.Communicated for major financial estimation and Key Audit Matters (KAM).
Suggestion from independent directors:
Suggest having better control of air freight expenses when purchase from overseas. Multiple quotations and freight experts review quotations were recommended.

  
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