Novatech complies with regulatory requirements and has established company regulations and periodic review mechanisms to ensure its policies align with the
latest international legal trends. This approach prevents significant operational impacts from delayed responses to regulatory changes, while supporting commitments to environmental and social protection and promoting business growth. The Company's definition of significant penalties follows the regulations in the Taipei Exchange Procedures for Verification and Disclosure of Material Information of Companies with TPEx Listed Securities.
The criteria include incidents that cause major damage or impact to the Company, orders from relevant authorities to suspend work, suspend business, cease operations,revoke or cancel pollution-related permits, or single incidents with cumulative fines reaching or exceeding NT$1 million. In 2024, Novatech had no significant fines affecting company operations or violations of socioeconomic regulations.
Regulatory Compliance ┃ Management Approach
Significance and Meaning to the Company
- Through establishing compliance regulations for company business conduct to ensure directors and managers operate in accordance with relevant government regulations.
Management Strategies
- Establish regular review mechanisms for laws and other requirements to prevent company violations of standards and ensure compliance with new regulatory trends and requirements.
Policy/Commitment
- Established internal regulations including Ethical Corporate Management Best Practice Principles, Procedures and BehavioralGuidelines for Ethical Management, and Principles of Ethical Behaviors
- Established comprehensive internal control systems and formulated and implemented annual audit plans in accordance with the Company's Internal Control Systems
Actual and potential, negative and positive impacts
Positive:
- Strictly comply with relevant domestic and international regulations to maintain a positive corporate image,stabilize market order, protect the natural environment and stakeholders' interests.
Negative:
- If violations of laws and regulations occur, the Company may face fines and penalties. In serious cases, restrictions on sales activities in affected regions may be imposed,damaging its corporate image and impacting business operations.
Action
- Regularly review legal compliance status. Any violations must be reported to the Board of Directors or shareholders' meetings, and disciplinary actions shall be implemented accordingly.
- Establish a whistleblowing system that includes reporting procedures, whistleblower protection mechanisms, and incentive mechanisms.
- For employees who violate integrity management principles, disciplinary actions will be taken according to the Employee Reward and Punishment Regulations as appropriate.
* This material topic has no actual activities or business relationships involving negative impacts in the current year.
Reporting Mechanisms and Channels for Violations of Regulations and Anti-corruption
Based on formal legal regulations and review mechanisms, Novatech also actively encourages employees to report any illegal or unethical conduct that violates the Principles of Ethical Behaviors. The Company has established a Whistleblowing System that covers areas such as violations of company policies, actions that may harm company interests, or behaviors that could potentially cause damage. To protect whistleblowers, the Company has established protection mechanisms and incentive mechanisms, maintains records,conducts investigations, and implements penalties for each reported case. The audit unit also conducts supervision in accordance with relevant regulations and updates the company's internal regulations as needed. If any violations of professional ethics or company internal rules are discovered, they will be recorded, investigated, and penalized according to relevant regulations to maintain the company's reputation for integrity and fairness.
The Company has established a public Integrity Management Violation Reporting Mailbox and provides an employee-exclusive suggestion box for internal staff to
submit integrity management-related suggestions. Through these comprehensive internal and external communication channels, we ensure that all internal and external stakeholders can effectively provide feedback and file complaints. In 2024, Novatech did not receive any reports or cases regarding bribery, corruption, or anti-competitive behavior, and therefore there were no related legal proceedings or associated costs.
