Responsible Governance

Governance and Integrity

In order to establish a corporate culture of ethical management and sound development, the Company has a business philosophy of honesty, transparency and responsibility while also upholding policies of integrity referencing the “Ethical Management Principles” of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies, which was approved by the 2020 Board of Directors. The Company clearly requires its employees to not directly or indirectly provide, accept, promise or request any illegitimate interests or engage in other dishonest acts that violate the integrity, illegality or breach of fiduciary obligations when engaging in business conduct, and require employees to conduct business with fairness and transparency.

The Company is committed to preventing the following behaviors under the principle of ethical management:

  • Giving and receiving bribes.
  • Making illegal political contributions.
  • Improper charitable donations or sponsorships.
  • Offer or accept unreasonable gifts, entertainment or other improper advantages.
  • Violation of trade secrets, trademark rights, patent rights, copyrights and other intellectual property rights.
  • Engage in acts of unfair competition.
  • Products and services that directly or indirectly damage the rights, health, and safety of consumers or other stakeholders during research and development, procurement, manufacture, provision or sale.

Risk Management

In light of various uncertain risks to the Company’s operations, the management of Twinhead International Corp. discusses response measures from time to time. After arriving at a decision, the response will be executed by the department handling the Company’s businesses and the results will be reviewed at all times.

Risk Item
Risk Description
Response Measures

Financial Risks

Risk Description

The Company may fail to pay the interest or principal due to debt financing on time and may go bankrupt.

Response Measures

The Company adopts comprehensive risk management to clearly identify, measure, and control all risks of the Company (including market risk, credit risk, liquidity risk and cash flow risk). Therefore, the Company’s management can effectively control and measure market risk, credit risk, liquidity risk and cash flow risk.

Business Competition Risk

Risk Description

Component suppliers have long delivery times and increased minimum order quantities.

Response Measures

The Company established buffer stocks to effectively use the inventory circulation mechanism and avoid shortage of supply.

Risk Description

Military/industrial grade notebook computers are high-mix and low-volume products and the investment of research and development resources for these computers is relatively high.

Response Measures

The Company established the design of modular components while different models share the same module parts and provides customers with high-mix low-volume needs to reduce R&D resources, inventory and costs and obtain higher profits.

Business Competition Risk

Risk Description

The growth of the market size is slowing down as competitors compete for orders at lower prices, and large commercial manufacturers are diving into the military/industrial market, resulting in increased pressure on price competition and serious exploitation of profit margins.

Response Measures
  1. The Company continues to increase investment into research and development, intensify its research and development capabilities, enhance marketing acumen, develop products of different levels, features, and styles according to customer needs and aim to develop high value-added vertical market products to maintain expected profits.
  2. The Company develops opportunities to cooperate with major international manufacturers, and use their influence to reduce procurement costs.
Risk Description

Key components rely on imports and most of the products are mainly marketed in the United States and Europe and the risk of exchange rate fluctuations will also affect the Company’s profits.

Response Measures
  1. The Company increased the added value of product designs to lower the ratio of procurement costs of parts and components in the selling price.

  2. The Company has enhanced the risk-avoidance awareness of the financial personnel, and have them study and determine the trends in exchange rate fluctuations at all times to assess the use of risk-avoiding foreign exchange operating tools in a timely manner.

Environmental Pollution and Climate Change Risk

Risk Description

Countries are actively investing in the development of new energy and alternative energy in response to global climate change, and the issue of energy conservation and carbon reduction is closely integrated with the products and services provided by various enterprises, which directly or indirectly affects the business operations and consumer consumption behavior.

Response Measures
  1. Design energy-saving and carbon-reducing products.
  2. Products continue to comply with green product regulations and customer requirements.
  3. Cooperate with the government’s energy-saving policy.

Product Liability Risk

Risk Description

Due to differences in legal systems and regulations, ignorance of the local legal environment and its regulations along with failure to properly manage the serious consequences of product liability risks may cause companies to be exposed to huge operating risks.

Response Measures
  1. Establish a legal identification system.
  2. Implement the management and monitoring mechanism for product safety and patents.

Information Security Risk Management Framework

The Company conducts information security inspections every year, reviews the use of computerized information processing operations and reports to the board of directors after the end of the year. The main focus is to review the overall structure of the information, the integrity and availability of the backup information, the comprehensiveness of the information security measures, the comprehensiveness of the internal security protection mechanisms and implement specific improvement measures.

Information Security Policy

Compliant with ISO 9001 information regulations and standards:

If relevant content needs to be added, revised or abolished for the policy, the handling information unit will use the digital signature authorization system to apply for the ISO document/form processing application form, state the contents to be amended in the summary, and carry out the signature authorization process as the policy will be provided as a relevant reference within the Company.

Information Security Management Policy

The Company has formulated the IT Policy to effectively manage the use of related computers and information resources. The contents cover the work devices used by individual employees, the use of wireless networks, the management of e-mail and web browsing, anti-virus management mechanisms and practices, legally authorized use and audit of software, file access management and authorization to effectively maintain the security of the Company’s internal information environment.

Legal Compliance

Legal compliance is the foundation for business operations while laws and regulations can enhance the protection and trust between all parties and enterprises, and create win-win relationships where everyone prospers and sustainably develop. Twinhead International Corp. has always upheld and complied with:

  • The Company Act, Securities and Exchange Act, Business Entity Accounting Act, relevant regulations for TWSE/TPEx-Listed Companies and any other laws and regulations related to environmental protection, labor human rights and product liability.
  • Establish an excellent management and risk control mechanism.
  • The responsible department pays attention to the promulgation and revision of laws and regulations related to its businesses at all times according to its duties.
  • Establish acceptance channels including employee opinion mailboxes and external stakeholder mailboxes so that stakeholders can report illegal activities (including whistle blowing) in a timely manner and pay attention to the risks of legal compliance.
  • The Legal Department does full-time reviews of contracts regarding Twinhead International Corp’s external transactions to ensure that there are zero illegal records.