Corporation Governance and operation Performance

Governance
and
Operational
Performance

Corporation Governance

The board of directors is the highest governance unit of the company.CGPC strictly requires employees, supervisors at all levels and members of the board to abide by laws and regulations, and act in accordance with the law as the operating principle. In terms of regulatory compliance, we follow changes in relevant domestic and foreign laws and regulations that affect the Company's operations and hold training courses related to laws and regulations from time to time. We also actively participate in the dissemination of information on laws and regulations, ethical management and corporate social responsibility courses and seminars organized by the competent authority (Please refer to human right policy and management plan). To achieve the goal of sustainable development, we will require all units to establish a risk reporting system in the future. Through systematic management and cooperation of the management team, we will comprehensively prevent any potential legal risks, and face the increasingly strict legal regulations in a positive and responsible manner.

Sustainable Management Policy

CGPC’s corporate social responsibility (CSR) is based on sustainability, business strategy, and corporate culture. We also take into account the concerns of stakeholders in our decision-making. We are committed to promoting our corporate sustainability strategy from all aspects, including climate change management, corporate governance, environmental protection, supply chain management, employee care, and social participation.

Introduction of Audit committee, Remuneration committee and ESG Committee

Name
Experience
Audit Committee
Remuneration committee
ESG Committee

LI,ZU-DE Independent Director
Director of Taipei Medical University.

Director of Swissray Global Healthcare Holding Ltd.

Serve as a member of remuneration committee and Convenor of audit committee.

B.S. in Dentistry, Taipei Medical College.
Convenor
Member

ZHENG,YING-BIN Independent Director
Chairman of Long Chen Paper Cor., Ltd..

Serve as a convenor of remuneration committee , member of audit committee and committee chairperson of sustainable development committee.

Master of Business Administration, National Taiwan University.
Member
Convenor
Committee Chairperson

Hsu,Chen-I Independent Director
Chairmen of TTFB COMPANY LIMITED.

Serve as member of audit committee and sustainable development committee.

Swiss Business School Master of Business Administration
Member
Member
Member

Chang,Chen-Ming Independent Director
Associate Professor, Department of Business Design, Chung Yuan University

Director, Sacred Heart Educational Development Foundation

Director of Central News Agency

Independent Director of Prince Construction and Development Co., Ltd.

Independent Director of French NHOA Energy Company

Department of Design, Hong Kong Polytechnic University
Member
Member

WU,YI-GUI Chairman
Chairman and CEO of CGPC.

Chairman and CEO of USI group (including USI, APC, CGPC, TTC and ACME etc.)
Member

HU, CHI-HONG General Manger
General Manger of CGPC

General Manger of CGPCP

Department of Business Administration, Fu Jen Catholic University
Vice Committee Chairperson

Note: The statistics in this table are as of June 30, 2024.

Sustainable Performance and implementation status

The ESG Committee conducts at least 2 meetings a year and report the management of plan, goal and implementation status with three aspect of “Corporate Governance, Environmental and society” to the board of director. The board of director is responsible for supervising, auditing the progress and providing strategic guidance.

Name of committee
Duties/ Functions
Operation and communication status

Audit Committee
Establishment and revision of the internal control systems and supervision of operations.

Establishment and revision of the control procedures of activities for major financial or business and the supervision of the operation.

The hiring (and dismissal), independence and supervision of CPAs.

The appointment and dismissal of chief financial, accounting, and internal auditor.

Fair presentation and supervision of the financial reports.

In order to fully exercise their duties and gain a better understanding of the company's financial reports and financial and business conditions, independent directors engage in separate communication with the auditors and internal audit manager at least once a year, without the presence of other directors or management personnel.

Communication between Independent Directors and Accountants/Internal Audit Manager:

Date: November 2, 2023 The Audit Committee 6th meeting of the 3rd Term	Attendees： Independent Director, Tsu-Te Li Independent Director, Ying-Pin Cheng CPA, Hsiu-Chun Huang Audit Officer, Kang-Nian Chiang.
Separate communication matters:
Accountants	Internal audit supervisor
1. Review implementation and conclusion of the 2023 Q3 consolidated financial statements. 2. 2023 annual financial report audit plan and key audit matters. 3. Introduction to IFRS S1 and S2 on Sustainability Disclosure. 4. Timeline for levying carbon fees and setting direction for carbon fees.	1. Implementation status of audit and the results. 2. Schedule of 2023 internal control self-evaluation. 3. 3.2024 audit plan. Results of communication: No opinions

The project secretary of the Audit Committee will report on the operational status of risk management for the year.

For detailed information, please refer to the official website - Audit Committee, Audit Committee’s Organizational Regulations.

Remuneration Committee
Prescribe and review the performance evaluation and remuneration policy, system, standards, and structure for directors and managerial officers.

Periodically evaluate and prescribe the remuneration of directors and managerial Officers.
The current term of office is from June 2, 2022 to May 29, 2025, with a total of 3 members, consisting of all independent directors.

The committee convenes a minimum of 2 meetings per year and in 2023, a total of 3 meetings were held, with all committee members achieving a 100% attendance rate. Regarding the operation of this committee, please refer to the Company’s website , Annual Report, or linked to the Market Observation Post System (MOPS) to research.

The committee conducts regular reviews of the (1) compensation policies, systems, standards and structures, and (2) performance evaluations of directors and executives. It considers various factors, including industry median compensation levels, individual time commitment, responsibilities, individual goal attainment, compensation of comparable positions, achievement of short-term and long-term business goals, and the financial position of the company. Based on these factors, the committee establishes and evaluates the compensation of directors and executives, subject to the approval by the Board of Directors. (GRI 2-20)
•Salary and Remuneration: Director compensation comprises remuneration, director fees, and business execution expenses. Executive compensation includes monthly salary, fixed bonuses, year-end bonuses, employee remuneration, annual special bonuses, retirement benefits, and welfare benefits as required by law. The remuneration for directors and employees is governed by the provisions of Article 25 of the company's bylaws. (GRI 2-19)

•Vinyl Chain's total compensation ratio in 2023: 15.43:1. Total compensation change ratio: 33.40%. (GRI 2-21)

•Performance evaluation: The aspect of assessment for directors' performance encompasses the understanding of company goals and missions, awareness of responsibilities, level of involvement in company operations, internal relationship management and communication, professionalism and continuous learning, and internal control, among others. The evaluation of managers' performance covers financial aspects (such as operating revenue, operating profit, and pre-tax net profit), customer aspects (customer satisfaction, service quality), product aspects (brand management, quality innovation), talent aspects (talent development, potential enhancement), safety aspects (zero pollution, zero emissions, zero occupational hazards, zero incidents, zero failure), project aspects (digital transformation, energy conservation and carbon reduction, circular economy, net-zero emissions), among which the weight of sustainability-related indicators is at least 5%. The president's performance indicators and sustainability-related items in 2023 include energy conservation and carbon reduction, process safety management , and new product development.

Note 1: Total Remuneration Ratio: Annual total remuneration of the highest-paid individual in the organization divided by the median annual total remuneration of all employees (excluding the highest-paid individual).

Note 2: Total Remuneration Change Ratio: Percentage increase in the annual total remuneration of the highest-paid individual in the organization divided by the percentage increase in the median annual

For detailed information, please refer to the official website -Remuneration Committee, Remuneration Committee’s Organizational Regulations, and Annual Report.

ESG Committee
Formulate a sustainable development policy

Supervise the implementation of strategic planning of sustainable development, annual plan and project plans and evaluate the status of implementation.

Review the ESG Report.

Report the annual implementation results of sustainable development to the board every year.
The third term of office is from June 2, 2022 to May 29, 2025 and the 4 committee members include Chairperson Yi-Gui Wu, Vice Chairperson Han-Fu Lin who concurrently serves as the president, independent directors Ying-Pin Cheng and Cheng-Yi Hsu.

The Sustainable Development Committee convened two Board meetings in 2023, and the attendance of all committee members in person reached 87.50% (100% for including attendance by proxy).

Report 2023 sustainable development progress and annual sustainability plan report to the Board of Directors.

For detailed information, please refer to the CGPC’s ESG Area (ESG Committee meeting minutes), ESG Committee’s Organizational Regulations.

Operating Performance

2021
2022
2023

Unit: Million TWD

Operating revenue
(consolidated)
20,222
17,637
13,707

Operating cost
(consolidated)
16,904
18,622
13,247

Total Assets
(consolidated)
16,975
16,684
17,750

Pre-Tax Income
(consolidated)
3,307
-517
467

Salary and benefits
(consolidated)
1,392
1,113
1,230

Dividend_entities
1,453
174
203

Income Tax
(consolidated)
676
-179
73