Ethical Management

Employee code of conduct

Primax Electronics is committed to fulfilling its mission of "maximizing yield for shareholders and customers, and creating a joyful environment for employees to work in." To achieve such goals, we need the trust and support from customers, business partners, shareholders and the general public, and employees who are honest, credible and law-abiding become an important foundation. The "Employee Code of Conduct" is the basic standard of conduct that all employees of Primax shall abide by when performing related business activities. It includes personal ethical standards, regulations on gifts and hospitality, protection of trade secrets, avoidance of conflicts of interest, compliance with fair trade, whistleblowing methods and disciplinary principles.

The relevant facts will be investigated if any of Primax's employees is found or accused of being involved in any unethical conduct. If any violations of relevant laws and regulations or the employee code of conduct are proven, depending on the severity of the circumstances, sanctions such as reprimand, retraining, withholding of performance bonus or dividend, demotion or dismissal may be imposed in accordance with the work rules applicable locally. In the case of material circumstances, the employment contract may be terminated in accordance with local laws and the terms of the employment contract, and the Company may pursue the employee's criminal and civil liabilities pursuant to laws.

Ethical corporate management education and training

Every year, Primax Electronics regularly organizes various communication meetings, promotional videos, and fun activities to convey the integrity value in simple terms. Meanwhile, it also arranges employees to undergo anti-corruption education and training. Each new employee must participate in the orientation training courses for 8 hours within one month after his/her onboard. The courses include the introduction and explanation of employee code of conduct, ethics and integrity for one hour. The training percentage of new employees was 100%. Meanwhile, the Company also offered ethical corporate management education and training courses to the existing employees. In 2023, a total of 813 classes were organized, attended by a total of 17,790 participants. In 2023, Tymphany Huizhou organized the RBA basic training (including ethics and integrity) for 0.5 hour in 2023, where 3,882 employees and non-employees received a total of 1,941 hours of training, with 100% of new employees receiving training. (RBA basic education training for new employees and training for existing employees have not been conducted at other locations).

In addition to employees, Primax works with third-party accreditation entities to hold annual social responsibility training for suppliers every year step by step. The training is mainly based on the RBA Code of Conduct, including four major topics of labor, health and safety, environment, and a code of ethics. In addition to communicating the RBA COC V7.0 standards with all suppliers through the GPMS system, we offered relevant training sessions to let suppliers understand the degree of Primax's concern about the above issues. Please refer to the chapter on 【sustainable supply chain for the percentage of suppliers which received training】.

Avoidance of conflicting interests

Primax Group has formulated the "Corporate Governance Best Practice Principles" and "Operational Procedures for Ethical Management and Guidelines of Conduct," which state that, if a director, manager, or any stakeholder attending or presenting at the Board meeting has interest in any motion discussed in the Board meeting, himself/herself or on behalf of the juristic person represented by him/her, he/she must state the stakes involved during the current meeting session and shall disassociate from all discussions and voting if the stakes are in conflict against the Company's interests. Meanwhile, the concerned party may not exercise voting rights on behalf of other directors. All of the directors are highly disciplined in their conducts, and have managed to disassociate themselves from agendas that present conflicting interest. For more disclosures regarding avoidance of conflicting interests managed by the highest governance body, please refer to the section about corporate governance on 《 P42 of the 2024 Annual Report of Annual General Meeting》.

Robust internal audit system

In order to implement the corporate governance and self-supervisory mechanism, in accordance with the "Regulations Governing Establishment of Internal Control Systems by Public Companies," and in consideration of the overall business activities of Primax and its subsidiaries, Primax Group has the Chairman call the audit unit and managers to prepare the internal control system subject to approval of the Board of Directors, aiming to "promote the effective operation of the corporate organization."

Primax Electronics has set up an operation audit unit, including one chief internal audit officer and two dedicated personnel. Each unit and subsidiary of the Company conducts a self-inspection at least once a year. Then, the internal audit unit will review the self-inspection results of each unit and subsidiary. The result, together with the deficiencies found in the internal control by the internal audit unit, will serve as the reference helping the managers evaluate the effectiveness of the overall internal control system. The Audit Committee and directors shall hold regular meetings with the chief internal audit officer regarding the deficiencies found in the internal control system, and meeting minutes shall be prepared to facilitate the implementation of the internal control system. The minutes shall be submitted to the Board of Directors.

The Company's internal audit unit formulates an annual audit plan for the next year based on the risk assessment results by December of each year, and implements various audit items according to the audit plan. The internal auditors summarize the problems discovered during the audit, formulate improvement suggestions, prepare the "Internal Audit Report" and request each improvement unit to complete the improvement countermeasures and then submit them to the chief internal audit officer and Chairman for review. Deficiencies and abnormalities found in the internal control system during the inspection shall be disclosed in the audit report honestly. Upon submission of the report, we will follow up them at least on a quarterly basis until they are corrected, in order to ensure that relevant units have taken appropriate improvement measures in a timely manner. In 2023, the internal audit plan has been completed, and all units have been audited. For details on the communication between independent directors and chief internal audit officers and CPAs, 【please refer to】 the Company's website.