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Implementation of Corporate Governance

Evaluation Item

Abstract Explanation

1. Does the Company established and

 disclosed the Corporate Governance

 Best-Practice Principles based on

 "Corporate Governance Best Practice

 Principles for TWSE/TPEx Listed

 Companies"?

The Company has established a Code of Practice for Corporate Governance and this was resolved by the Board to be amended on November 10, 2016, and the amended Code of Practice for Corporate Governance has been disclosed on the Company’s website.

2. shareholding structure & shareholders' rights

  • Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure?

To ensure the shareholders' rights, the Company has appointed a spokesperson and an acting spokesperson to respond to shareholders' suggestions, questions and settle disputes.

  • Does the company possess the list of its major shareholders as well as the ultimate owners of those shares?

The Company regularly check and control the main shareholders who actually control the Company and the list of final controllers of the main shareholder services agent on the book closure date. The Company also shareholders provided by the discloses, on a regular basis, the pledges and changes to equity of the shareholders who hold more than 10% of the shares according to rules.

  • Does the company establish and execute the risk management and firewall system within its conglomerate structure?

The Company has established relevant managing procedures such as "Transaction Processing Procedures for Stakeholders, Specific Companies and Corporate Groups", "Regulations Governing Subsidiaries Management", and "Operating Procedures Governing Loaning of Funds and Making of Endorsements/Guarantees". They are intended to build careful and effective mechanisms on risk management and firewall.

  • Does the company establish internal rules against insiders trading with undisclosed information ?

The Company has established: Operating procedure of handling internal significant information and the control management operation on prevention of insider trading.

3. Composition and Responsibilities of the Board of Directors

  • Does the Board develop and implement a diversified policy for the composition of its members?

The Company has established a diversity policy on the formation of the Board members in the Code of Practice for Corporate Governance, in which all members are equipped with necessary knowledge, skills, and moral fiber to carry out their responsibilities.

The Board implement a diversified policy for the composition of its members, please refer to note 1.

  • Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?

The Company has established Remuneration Committee following the requirement of the law, yet it has not established other various functional committees.

  • Does the company establish a standard to measure the performance of the Board, and implement it annually?

The Company has established procedures and methods to evaluate the performance of the Board, and will undertake internal evaluations on the performance of the Board at least once according to these procedures. The Company has already completed the 2016 Board Performance Evaluation and Board Member Self- Evaluation, and the results have been compiled and reported to the Board Meeting on March 16, 2017.

The Company when establishing the criteria for the performance assessment of the board of directors, which should cover the following five aspects:

  • Participation in the operation of the company;
  • Improvement of the quality of the board of directors’ decision making;
  • Composition and structure of the board of directors;
  • Election and continuing education of the directors; and
  • Internal control.

The criteria for performance assessments of board members (self-assessments), which should cover the following six aspects:

  • Familiarity with the goals and missions of the company;
  • Awareness of the duties of a director;
  • Participation in the operation of the company;
  • Management of internal relationship and communication;
  • The director’s professionalism and continuing education; and
  • Internal control.
  • Does the company regularly evaluate the independence of CPAs?

The Company has referred to the Bulletin of The Norm of Professional Ethics for Certified Public Accountant No.10, "Integrity, Objectivity and Independence" and other regulations, and has drawn up Assessed items, and reviewed the independence of the Company's commissioning accountants. On March 16, 2017, the Board Meeting has resolved the proposal on the evaluation of Certified Public Accountants and has begun the evaluation.

4. Does the company set up a corporate governance unit or appoint personnel responsible for

 corporate governance matters (including but not limited to providing information for

 directors and supervisors to perform their functions, handling work related to meetings of

 the board of directors and the shareholders' meetings, filing company registration and

 changes to company registration, and producing minutes of board meetings and

 shareholders’ meetings)?

The Company has designated the Finance and Administrative Division to handle all tasks relevant to corporate governance according to Article 3 of Code of Practice for Corporate Governance, as well as designated senior manager to supervise its functions.

5. Does the company establish a communication channel and build a designated section on its

 website for stakeholders (including but not limited to shareholders, employees, customers, and

 suppliers), as well as handle all the issues they care for in terms of corporate social  

 responsibilities?

There is a section on the Company's website dedicated to servicing investors, and there are designated employees handling relevant issues. The aim is to provide the shareholders and the stakeholders sufficient information, as well as a communication channel for the employees. The Company also discloses information on MOPS as required by law so that the stakeholders can make decisions to protect their own rights.

6. Does the company appoint a professional shareholder service agency to deal with

 shareholder affairs?

The Company has commissioned Fubon Securities Co., Ltd., a shareholder services agency to hold Shareholders' Meeting and other relevant affairs.

7. Information disclosure

  • Does the company have a corporate website to disclose both financial standings and the status of corporate governance?

The Company's official website contains a section for investors, and through this section the Company has revealed relevant information. In addition, one can visit TWSE's MOPS to inquire information on the Company's financial statements and corporate governance.

  • Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?

As above, the Company has built a section on our Chinese website for investors, and has designated employees dedicated to handle information and disclosure. The Company has built a complete spokesperson system and has set up a mechanism of an acting spokesperson.

8. Is there any other important information to facilitate a better understanding of the

 company’s corporate governance practices (e.g., including but not limited to employee

 rights, employee wellness, investor relations, supplier relations, rights of stakeholders,

 directors’ and supervisors’ training records, the implementation of risk management

 policies and risk evaluation measures, the implementation of customer relations policies, and

 purchasing insurance for directors and supervisors)?

  •  The Company's goal of establishing 104 Job Bank is to build a "human-based job/talent searching service channel" for Taiwan. Since our foundation, the Company has begun from this core value and launched relevant services, and has brought forth a revolutionary change to job searching channels in Taiwan. The Company has already provided over 310,000 firms with job/talent searching services. As of the end of February 2017, the Company's new product, 104 Career Social Platform, already has nearly 580,000 users, and the platform is interlinked with corporate recruitment management system while offering traditional recruitment and community recruitment services.

In the future, we will work toward the following three missions based on this core:

  • "Commitment to career matchmaking": More than a job, we help you define a career; more than an employee, we help you manage talent."
  • "Commitment to the elderly": Take advantage of the value of the healthy elderly; respect the dignity of the disabled elderly.
  • "Commitment to children": Find the ability of every child.
  • Employee's rights and employee wellness: The Company puts first and foremost of our employee's rights and well-being. We adhere to governmental regulations on labor insurance and health insurance; We establish Staff Welfare Committee and hold various staff activities, and provide opportunities of skill training for employees.

The Company has established a Code of Conduct for Employees. All employees of every level, position, and location at the Company and those of all branches and subsidiaries must adhere to this ethical standard. Generally, the Company promises to provide a safe and healthy working environment, fair opportunities and regulations of general behaviors to be followed by the employees and the Company.

  • The Company promises to create a healthy and safe working environment for the employees, and determines to build a working environment and culture for the employees  which is free from discrimination and harassment. Any forms of discrimination, harassment  (including sexual harassment) and language and behaviors which seek to incite enmity are  all strictly prohibited. Any transgressions which may cause accidental injuries or discrimination and harassment should be reported to relevant departments immediately. The Company has established a section on the company's website which accepts

 complaints of unlawful behaviors of and for employees.

  • Extra care should be taken when handling the employees' personal information, and the organizational requirements and employees' privacy should also be taken care of. Unless it is required by governmental regulations, personal information of the employee must not be disclosed under any circumstances.
  • The hiring policies of the Company must adhere to all laws and regulations. The decision of hiring is based on the Company's operational requirements, job content and the ability of the applicants; fair opportunities are provided to all applicants and staff, and must not be discriminated based on race, color of skin, social status, language, belief, religion, political parties, place of birth, sex, sexuality, marital status, complexions, facial features, disability,  former labor union membership or other non-employment factors included in governmental regulations. The Company and the employees, as well as among the employees, must treat one another with respect and integrity. There should not be any selfish motives. This principle is applicable to (but not limited within) recruitment, hiring, training, promotion, compensation, welfare, transfer of personnel and other associations or recreational activities.
  • Investor relations: The Company has established Investor Relations personnel to focus on issues related to investors.
  •  Suppliers Relations: The Company has always maintained positive relations with our suppliers, and has established supplier integrity management and evaluation standards for our key suppliers.
  • The stakeholders of the Company can consult or copy the registration information of the Company pursuant to relevant regulations.
  • Continuing education for directors and supervisors: The Company schedules appropriate courses contingently for directors and supervisors. For their studies in 2016, please refer to note 2.
  • Continuing education for the Company's finance, accounting, and audit supervisors: Please refer to note 3 for the Company's finance, accounting and audit supervisor's continuing education in 2016.
  • Implementations for risk-management policies and risk-evaluation standards: The Company has established Information and Communication Security Committee to formulate policies of information security. To all our clients and stakeholders, we promise to keep all personal information collected for operational needs private in accordance with the Personal Information Protection Act, handling and utilizing such information as provided by law, and we also promise to strengthen our information security measures to ensure the safety and security of information. We require all colleagues to abide by the various regulations on information security and trade secrets, and are putting the information security guidelines, "Information Security Is Everyone’s Responsibility", into effect.
  • Protection of consumers or execution of policies concerning our clients: The Company strictly adheres to the Employment Services Act, Personal Information Protection Act, as well as the government's regulations on consumer protection, and helps our clients to adhere to relevant regulations. We sign contracts with the clients, in which the rights and obligations of both parties are specified, so that the clients' interests are ensured. The Company has also established appropriate safety protection measures to ensure consumer's personal information is kept safe.
  • Purchase of liability insurance for the directors and supervisors by the Company: The Company purchases liability insurance for the directors and supervisors annually.

9. Please explain the improvements which have been made in accordance with the results of

 the Corporate Governance Evaluation System released by the Corporate Governance Center,

 Taiwan Stock Exchange, and provide the priority enhancement measures.

Please refer to note 4.

Note 1: The Board implement a diversified policy for the composition of its members:

Note 2: Continuing education for directors and supervisors:

 Job Title

 Names

 Date

 Organizer

  Course Name

Training hours

Chairman

Chi-Kuan Yang

105.11.10

Securities and Futures Institute

Explanations and Case Studies on Regulations on Competitive Actions for Management Rights

3 hours

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Director

Chien-An Juan

105.11.10

Securities and Futures Institute

Explanations and Case Studies on Regulations on Competitive Actions for Management Rights

3 hours

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Director

Hung-Wen Su

105.11.10

Securities and Futures Institute

Explanations and Case Studies on Regulations on Competitive Actions for Management Rights

3 hours

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Director

Mun-Kee Chang

105.11.10

Securities and Futures Institute

Explanations and Case Studies on Regulations on Competitive Actions for Management Rights

3 hours

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Independent Director

Cheng Li

105.11.10

Securities and Futures Institute

Explanations and Case Studies on Regulations on Competitive Actions for Management Rights

3 hours

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Independent Director

Wei-Lin Liou

105.11.10

Securities and Futures Institute

Explanations and Case Studies on Regulations on Competitive Actions for Management Rights

3 hours

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Supervisor

Zan-Syong Cai

105.11.10

Securities and Futures Institute

Explanations and Case Studies on Regulations on Competitive Actions for Management Rights

3 hours

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Supervisor

Mei-Fang Hsu

105.03.03

Taiwan CPA Association, ROC

Key Points and Analysis of 2015 Income Tax Declaration

6 hours

105.09.08

Taiwan CPA Association, ROC

Case Studies on Inheritance and Trust Fund

3 hours

105.11.10

Securities and Futures Institute

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Note 3: Continuing education for finance, accounting and audit supervisors:

Job Title

Names

Date

Organizer

Course Name

Training hours

CFO

Fen-Ju Lin

105.02.25~26

Accounting Research and Development Foundation

Continuing Training Class for Principal Accounting Officers of Issuers, Securities Firms, and Securities Exchanges

12 hours

105.11.10

Securities and Futures Institute

Explanations and Case Studies on Regulations on Competitive Actions for Management Rights

3 hours

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

105.12.13

Accounting Research and Development Foundation

Corporate M&A Tax

3 hours

Audit Supervisor

Yu-Mei Tu

105.04.19

The Institute of Internal Auditors-Chinese Taiwan

Practicum and case studies on Tax Accounting for Taiwanese Businesses in mainland China

6 hours

105.12.13

Computer Audit Association

IT Audit and Information Governance - Mobile Safety and Audit

6 hours

105.11.10

Securities and Futures Institute

Legal Liabilities of Directors and Supervisors in the Context of Mergers and Acquisitions

3 hours

Note 4: Below are results from the second corporate governance evaluation from the Corporate

    Governance Center in 2016:

Key targets for improvement in the 2nd corporate governance evaluation

Improvements made in 2016

Priority for improvement in the future

  • Has the Articles of Incorporation required all elections for directors and supervisors to take a nomination system?

None.

Board meeting on March 16, 2017, resolved to amend this part of the Articles of Incorporation, and proposes to discuss the matter in the 2017 Annual Shareholders Meeting.

  • When elections for directors and supervisors (excluding independent directors) are held, are names of all nominees for directors and supervisors in addition to their education, work experiences, shareholding, and the governmental and corporate institutions they represent as well as other relevant data, publicly announced 40 days prior to the annual shareholders meeting, or 25 days prior to the interim shareholders meeting?

No elections were held in 2016; not applicable.

When elections for directors and supervisors (excluding independent directors) are held in the future, relevant information will be publicly announced in accordance with legal regulations.

  • Has the annual shareholders meeting adopted an e-voting system?

The Company has already signed an agreement with the Taiwan Depository & Clearing Corporation at the end of 2016 for agency of tasks pertaining to e-voting at the Shareholders Meeting.

E-voting will be adopted starting in the 2017 Annual Shareholders Meeting.

  • Does the Company upload the English version of annual report 7 days prior to Annual Shareholders meeting?

None.

This practice will be adopted starting in 2017.

  • Does the company upload the English version of the notice for shareholders meeting 30 days prior to commencement of Annual Shareholders Meeting, as well as upload the English version of meeting agendas and supplemental information 21 days prior to the Annual shareholders meeting?

The Company has already uploaded the English version of the notice for shareholders meeting 30 days prior to commencement of the Annual Shareholders Meeting in 2016.

As for the English version of the meeting agenda and supplemental information, the Company will adopt this practice starting in 2017.

  • Have all directors and supervisors of the Company completed the required hours of continuing education in accordance with "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies"?

All required hours of continuing education for directors and supervisors in 2016 have been completed in accordance with Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.

The Company will continue to complete continuing education needs in accordance with legal requirements.

  • Does the Annual Report disclose dividend policies in a clear and coherent manner?

None.

Clear and coherent dividend policies will be disclosed starting in 2017.

  • Has the company established an exclusively (or concurrently) corporate governance unit to promote corporate ethical management, and explained about the unit's responsibilities, operations, and supervision from the Board in the annual report?

The Company has already established a corporate governance unit to promote corporate ethical management in 2015, and the Board has amended part of its articles on May 10, 2016, in which the Finance and Administrative Division is the current designated unit for the establishment and supervision over the implementation of ethical management policies. Implementations of corporate ethical management in 2015 has also been reported to the Board.

Completed.

  • Has the Company established any communication channel for the stakeholders, set up a section dedicated to stakeholders on the Company's website, and responded adequately to the stakeholders on important CSR issues of their concerns?

The Company established a Stakeholders Section on our website in 2016, and disclosed information on channels for grievances and contacts.

Completed.