Audit Committee
/ Responsibilities of the Audit Committee
The Audit Committee shall hold meetings at least once each quarter and may convene additional meetings as necessary. Its purpose is to assist the Board of Directors in overseeing the quality and integrity of the company’s accounting, auditing, financial reporting processes, and financial controls.
I. The Audit Committee’s primary oversight objectives include:
1. Proper presentation of the company’s financial statements.
2. Appointment (or dismissal) of certified public accountants and evaluation of their independence and performance.
3. Effective implementation of the company’s internal controls.
4. Compliance with relevant laws and regulations.
5. Management of existing or potential company risks.
II. Major items deliberated by the Audit Committee include:
1. Establishing or revising internal control systems in accordance with Article 14-1 of the Securities and Exchange Act.
2. Assessment of the effectiveness of internal control systems.
3. Establishing or revising procedures for significant financial transactions such as asset acquisitions or disposals, derivative transactions, loans to others, endorsements, or guarantees, in accordance with Article 36-1 of the Securities and Exchange Act.
4. Matters involving conflicts of interest of directors.
5. Major asset or derivative transactions.
6. Major loans, endorsements, or guarantees.
7. Issuance, private placement, or public offering of equity securities.
8. Appointment, dismissal, or remuneration of certified public accountants.
9. Appointment or dismissal of financial, accounting, or internal audit executives.
10. Annual financial reports signed or sealed by the Chairman, management, and accounting executives, as well as second-quarter financial reports subject to CPA audit.
11. Other significant matters as required by the company or regulatory authorities.
/ Members of the Audit Committee
The company’s Audit Committee is composed of three independent directors. Their qualifications and experience are as follows:
Member | Qualifications and Experience |
Chen Jin-Ji (Chairperson) | Education & Experience: - Master’s in Economics, London School of Economics- Ph.D. in Industrial Economics, Tamkang University - Independent Director at Fubon Financial Holdings / Fubon Life / Fubon Insurance - Independent Director & Chairperson of Risk Management Committee, Taiwan Financial Holdings / Bank of Taiwan Life - Independent Director, Asia Aviation- Director, SinoPac Securities - Government Advisor, Executive Yuan - Director, Yunlin County Finance Bureau Current Positions: - Professor, Graduate Institute of Financial Management, CTBC Business School - Independent Director, Global Life Insurance- Independent Director, Sigma Technology Co., Ltd. - Director, Taizong Biotechnology Co., Ltd. |
Mao En-Guang | Education & Experience: - Political Warfare School, Class 46- Deputy Secretary -General, Taiwan Electrical & Electronic Manufacturers’ Association - Specialist, Ministry of Economic Affairs- Section Chief, Industrial Development Bureau, Ministry of Economic Affairs - Secretary-General, Taiwan Wind Power Development Association Current Position: - Independent Director, Gaoli Heat Treatment Industrial Co., Ltd. |
Lin Sheng-Zhong | Education & Experience: - Ph.D., Natural Resources and Environmental Management, National Taipei University - M.A., Economics, National Taiwan University - B.A., Economics, National Chung Hsing University- Chairman, CPC Corporation, Taiwan - Deputy Minister & Administrative Deputy Minister, Ministry of Economic Affairs- Executive Director, WTO Center, Chung-Hua Institution for Economic Research - Director, Taipei City Construction Bureau- Representative, Taipei Trade Office in Switzerland and Head of Taiwan WTO Observer Delegation in Geneva - North America Affairs Coordinator, Boston Trade Office Current Positions: - Honorary Professor, Chung Yuan Christian University, Department of International Business- Consultant, Chinese National Federation of Industries- Independent Director, Fumei Industrial Co., Ltd. - Independent Director, Taiwan Glass Industry Co., Ltd. |
/ Summary of Annual Audit Committee Focus
During the past year, the Audit Committee mainly reviewed and deliberated the following:
1. Review of financial reports.
2. Deliberation of internal control systems and related policies and procedures.
3. Major asset transactions.
4. Major loans.
5. Corporate bond issuance.
6. Major investments.
7. Share buybacks.
8. Compliance with laws and regulations.
9. Identification of potential conflicts of interest between executives or directors and related parties.
10. Information security.
11. Qualifications, independence, and performance evaluation of CPAs.
12. Appointment and remuneration of CPAs.
13. Appointment or dismissal of financial, accounting, or internal audit executives.
14. Review of the Audit Committee’s fulfillment of responsibilities.
15. Self-assessment of Audit Committee performance through questionnaires.
/ Operation of the Audit Committee
Date | Agenda | Audit Committee Resolution | Company Action |
114/01/15 (2nd term, 5th meeting) | 1. 114 Business Plan 2. Proposed change of CPA 3. Assessment of CPA independence and competence 4. CPA fees for 114 tax audit 5. Confirmation of “Pre-approved Non-Assurance Services List” | Approved by all attending members | Approved by Board of Directors as proposed |
114/03/10 (2nd term, 6th meeting) | 1. 113 Business Report & Financial Statements 2. 113Earnings Distribution 3. 113Internal Control Statement 4. Non-continuation of private placement approved in 112 AGM 5. Proposed donation to establish “Century Sustainable Development Foundation” | Approved by all attending members | Approved by Board of Directors as proposed |
114/04/08 (2nd term, 7th meeting) | 1. Proposed acquisition of PT NIPPON STEEL BATAM OFFSHORE SERVICE 99.93% shares 2. Pre-purchase of machinery for overseas wind power offshore foundation manufacturing | Approved by all attending members | Approved by Board of Directors as proposed |
114/04/10 (2nd term, 8th meeting) | Implementation of first share buyback and cancellation to protect company credit and shareholders | Approved by all attending members | Approved by Board of Directors as proposed |
114/05/12 (2nd term, 9th meeting) | 1. 114 Q1 financial report 2. A/R from subsidiary Myanmar Century Steel overdue >1 year, not considered a loan | Approved by all attending members | Approved by Board of Directors as proposed |
114/05/21 (2nd term, 10th meeting) | On December 16, 113 (Taiwan calendar year), the Board of Directors submitted a proposal regarding the payment to Century Wind Power for the full ownership compensation of five plots of Type D construction land in Guanyin District, Guangxing Section, land numbers 1482, 1482-1, 1483, 1483-1, and 1483-2. The original payment amount was NT$12,695,168. After renegotiation between both parties, the compensation amount was adjusted to NT$14,724,768. | Reported for record | Reported for record |
114/06/05 (2nd term, 11th meeting) | In response to the U.S. temporarily suspending the implementation of the 90-day reciprocal tariffs and the continued uncertainties in the capital market due to exchange rate fluctuations, the company plans to implement the second share buyback program and cancel the repurchased shares. This measure aims to mitigate potential impacts from the tariffs and to protect the company’s credit and shareholders’ interests. | Approved by all attending members | Approved by Board of Directors as proposed |
114/08/11 (2nd term, 12th meeting) | 1. 114 Q2 financial report 2. 2. The company plans to undertake projects for its subsidiary, Century Offshore Wind Power Co., Ltd., involving 35 jacket-type offshore foundations at the Haisheng Wind Farm and the manufacturing of 114 underwater piles at the Haisheng Wind Farm for Century Huaxin Wind Energy Co., Ltd. The company will serve as the designated primary subcontractor for these projects, co-sign the contracts, assume joint liability, and execute a mutual letter of intent with the internal parties. 3. The company also plans to undertake projects for the same subsidiary at the Haiguang Wind Farm, involving 57 jacket-type offshore foundations and the manufacturing of 180 underwater piles for Century Huaxin Wind Energy Co., Ltd. The company will serve as the designated primary subcontractor, co-sign the contracts, assume joint liability, and execute a mutual letter of intent with the internal parties. 4. To develop the group’s overseas offshore wind foundation manufacturing business, the company intends to pre-purchase a batch of machinery on behalf of the group. | Approved by all attending members | Approved by Board of Directors as proposed |
114/09/10 (2nd term, 13th meeting) | 1.The company’s subsidiary, PT NIPPON STEEL BATAM OFFSHORE SERVICE (hereinafter “NSB”), requires funding to cover necessary initial setup costs and related operating expenses. Therefore, the company plans to provide a loan of USD 1,000,000 to NSB. 2.The company plans to revise its internal control systems, payroll cycle, and compliance management procedures. | Approved by all attending members | Approved by Board of Directors as proposed |
114/11/13 (2nd term, 14th meeting) | 1. The company’s financial report for Q3 of 114. 2. The company plans to acquire two parcels of Type D construction land (land numbers 72 and 76, Section 5, Guanyin District Industrial Zone, Taoyuan City) for business use, to construct factories, plan supply chain and storage areas, and coordinate transportation and logistics, aiming to enhance overall operational efficiency. 3. The company’s subsidiary, PT Century Indonesia Wind Energy (formerly PT NIPPON STEEL BATAM OFFSHORE SERVICE, hereinafter “CIWE”), requires funding for necessary initial setup costs and related operating expenses. Therefore, the company plans to provide a loan of USD 7,000,000 to CIWE. 4. The dissolution of the subsidiary, Century Transportation Co., Ltd., and appointment of a liquidator. 5. Approval of the subsidiary Century Transportation Co., Ltd.’s balance sheet, profit and loss statement, and property inventory as of the appointment date of the liquidator. 6. Update of the company’s 114 “Pre-approved Non-Assurance Services List.” 7. Preparation of the company’s audit plan for 115. 8. Revision of the company’s “Insider Trading Prevention and Internal Major Transaction Procedures.” 9. Revision of certain provisions of the company’s domestic 7th and 8th unsecured convertible bond issuance and conversion rules. | Approved by all attending members | Approved by Board of Directors as proposed |
/ Separate Communication between Independent Directors and Internal Audit / CPA
In 114, the internal audit manager held separate meetings with independent directors and the CPA on 114/03/10, 114/05/12, 114/08/11, and 114/11/13. The discussions focused on subsidiary internal control audit and enhancing project and corporate governance audits. The internal audit office has implemented the recommendations.
Date | Discussion | Result | Independent Director Suggestions |
114/03/10 | Scope of financial information audit; audit issues | Good | None |
114/05/12 | Scope of financial information audit; audit issues | Good | None |
114/08/11 | Scope of financial information audit; audit issues | Good | None |
114/11/13 | Scope of financial information audit; audit issues | Good | None |
/ Communication between Audit Committee and CPA
Independent directors communicate with the CPA before the annual financial report regarding audit scope, key audit matters, and major accounting issues.
Quarterly communication on financial statement review/audit results occurs, with full consensus reached.
CPA provides updates on relevant laws and whether legal changes affect accounting treatment.
Date | Discussion | Result |
114/03/10 | 113 financial report group audit scope, key audit matters, major accounting issues | No objection |
114/05/12 | 114 Q1 financial report | No objection |
114/08/11 | 114 Q2 financial report | No objection |
114/11/13 | 114 Q3 financial report | No objection |
/ Communication between Audit Committee and Internal Audit
The internal audit department submits monthly audit reports to independent directors, and quarterly reports are presented to the Audit Committee. Communication is smooth and effective.
Date | Key Discussion Points | Result |
114/03/10 | 113 Q4 internal audit execution; 113 internal control effectiveness assessment and internal control statement | No objection |
114/05/12 | 114 Q1 internal audit execution report | No objection |
114/08/11 | 114 Q2 internal audit execution report | No objection |
114/11/13 | 114 Q3internal audit execution report | No objection |