Internal Audit

Task Force: 6 Internal Audit Personnel

The Company's Internal Audit task force is comprised of specialists and is directly under the Board of Directors. The Company’s board of directors passed the resolution of the proposed draft of “Appointment, Removal, KPI, and Remuneration of Internal Auditors” on November 11, 2021. The task force includes one internal audit supervisor and six audit personnel (three of which are Certified Internal Auditors).

Internal Audit Plan

The task force is responsible for drafting and publishing the annual audit plan. In November of each year, the task force starts drafting the annual audit plan for the upcoming year. The first task is to assess risks from high to low and prioritize audit subjects and items according to the level of risks. After the annual audit plan has been approved by the Board of Directors, following Securities and Futures Bureau (SFB) regulations, the annual audit plan will be uploaded to SFB reporting system for future reference.

Plan Execution Process

• Hold pre-audit meeting
• Carry out audit tasks
• Write internal audit suggestion reports
• Hold completion meeting

Submit Audit Report

The audit reports need to be approved by the Chairperson and notices will be sent to audited departments and units with a deadline for improvements. After the audit reports and the follow-up reports have been approved, the reports are required to be sent to the Audit Committee within the Board of Directors for verification and filing before the end of the following month after all audited items have been improved and verified.

Improvement Follow-Ups

Audited departments and units are required to make improvements. The internal audit task force will draft follow-up reports and submit the reports to the Chairperson and the Audit Committee within the Board of Directors. Following the regulations set by the Securities and Futures Bureau, the audit task force is required to draft “Annual Internal Audit Improvements List” before the end of May. The list is required to be approved by the Chairperson and uploaded to the SFB reporting system for future reference.

Internal Control System Statements

Review the self-assessment report of the internal control system of each unit and subsidiary of the Company. The internal control evaluation results of each unit shall be submitted to the Board of Directors for approval before the end of March each year, and compile to form an Internal Control System Statement.

Supervision of Subsidiaries

The task force assists and supervises the execution of the internal control system of various subsidiaries. The task force also includes the subsidiaries into the internal audit scope. Furthermore, the task force verifies the annual audit plan, actual implementation, audit reports and self-inspection results of various subsidiaries.

Random Inventory Checks of Cash, Securities, Fixed Assets and Raw Materials

Random inventory checks on the Company’s use, management, and budget execution of cash. In addition, the task force also conducts random inventory checks on fixed assets and raw materials.

Communications between Independent Directors and Internal Auditors

• Written report: Each month, the internal audit supervisor submits the audit and follow-up reports for the preceding month to the Chairperson, and subsequently submits the reports to independent directors before the end of the following month.
• Oral report: Provide audit progress reports and any internal control deficiencies to independent directors at least once every quarter at the Audit Committee meeting and answer related questions.

Reporting Mechanism for Violation of Code of Conduct

The Company has a comprehensive whistleblower and grievances channels in order to protect the reputation, property and assets of the Company as well as the rights and interests of the Company's shareholders, employees and partners; and to strengthen corporate governance and to ensure the legal rights and interests of the complainants and other stakeholders.

• Via e-mail：mp.buster@tawiancement.com
• Via post: No. 113, Sec. 2, Zhongshan N. Rd., Zhongshan Dist., Taipei City 104, Taiwan; Attn: Audit Office, Taiwan Cement Corporation
• In person: The Audit Office
• When filing a complaint, the complainant must provide his/her name, ID card number, contact address, phone number, email with which the complainant can be effectively reached, and the specific details of the complaint as well as the supporting documents. Anonymous complaints or complaints where the relevant information or supporting documents are missing will not be accepted.
• Download the contents of the Reporting Mechanism for Violation of Code of Conduct here.