AP Memory | Investor Relations

Organization Chart

Board of Directors

Committee

Corporate Governance Officer

Internal Audit

IP Management Plan

Information Security

Major Internal Policies

Risk Management

Organization Chart

AP Memory's internal management structure

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Board of Directors

Board Diversity

The “Corporate Governance Practice Principles” of the Company sets the composition of the Board of Directors to consider diversification and formulates appropriate diversification policies based on the Company’s operation, operation type, and development needs. The Board of Directors must also have the knowledge, skills, and literacy necessary to perform their duties. Currently, the 7 members of the Board have professional backgrounds and each has expertise in management, decision-making, industrial experience, academy, finance and accounting. The number of independent directors is 3 now.

Members of Board

Title

Name

Main Experience

Chairman

Mr. Chen, Wen-Liang

Ph.D., Yale University (Applied Physics)
CEO, AP Memory Technology Corporation

Director

Mr. Hung, Chih-Hsun

Ph. D., National Yang Ming Chiao Tung University
(Industrial Engineering and Management)
President, AP Memory Technology Corporation

Director

Mr. Yeh, Jui-Pin
(Representative of Shanyi Investment Co.,Ltd)

M.S., National Central University (Electrical Engineering)
Director of Board, Mytek Corp.
Independent Director of the Board, Progate Group Corporation

Director

Mr. Hsieh, Ming-Lin
(Representative of Li Shun Investment Co.)

MBA, National Taiwan University
President, Powerchip Investment Holding Corporation
Independent Director, iChat Technology, Inc.

Independent Director

Mr. Liu, Frank

M.S., Massachusetts Institute of Technology (Electrical Engineering and Computer Science)
M.S., Purdue University (Physics)
Chairman of Chelmsford. International Ltd
Director of the board of Taiwan Mergers & Acquisitions and Private Equity Council

Independent Director

Ms. Wang, Hsuan

Ph.D., National Taiwan University (Accounting)
Certified Public Accountant
Certified Internal Auditor
Assistant Professor of Yuan Ze University
Independent Director of the Board of Highpoint Service Network Corporation
Independent Director of the Board of Kian Shen Co., Ltd.

Independent Director

Ms. Sun, Elizabeth

Ph.D., University of Cincinnati Carl H. Lindner College of Business
Honorary Chairperson, Taiwan Investor Relations Institute
Member, AGGA
Consultant, MediaTek Inc.

Performance Evaluation of Board of Directors

Evaluation Period

Method of Evaluation

Results and Suggestions of Evaluation

2024

External Evaluation Organization｜Taiwan Institute of Ethical Business (TIEBF)
TIEBF and its executive committee members have no business relationship with the Company and are independent.
Method｜Check and review the Company’s internal regulations internal documents and meeting minutes. Interviews with the Directors of Board and questionnaire responses.
Standards｜Bases on 4 major components: the professionals, the effectiveness of the board's decision-making, the board's emphasis on and supervision of internal control, and the board's attitude toward sustainability.

Report Date｜2024/12/18
Report the result to Board Date｜2024/12/27
Results and Suggestions｜
• The number of directorships may be increased or decreased according to the scale of its operation, so as to minimize the possibility that the motion will not be passed due to a tie vote.
• Enhance the minutes to record in detail the proceedings of the board's discussions on various motions.
• Evaluating the establishment of a risk management committee; or designating a specific dept., which may strengthen the interaction between board and the management team.
• The issue of succession continues to ferment in the industry. The Company has not yet defined a succession system, which can build up a talent pool that will be conducive to the sustainable development of the enterprise.
• The Directors have recognized the importance of the issue of sustainability, which is moving towards more diversified development to keep stakeholders informed.

Note: Already reported to the board of directors on December 27, 2024

Committee

Audit Committee

Compensation Committee

Audit Committee

The Audit Committee consists of all independent directors, with Dr. Sun, Elizabeth as the convener. The main purpose of the audit committee is to assist the board of directors in supervising the quality and integrity of the company’s accounting, auditing, financial reporting process, and financial control. A total of 5 audit committee meetings were held in 2024, with 100% attendance by independent directors. For more details, please refer to our annual report.

The Audit Committee is responsible to review the following major matters:

Internal control systems and related policies and procedures;
Financial reports;
Related-party transactions and potential conflicts of interests involving executive officers and directors;
Material asset or derivatives transactions;
Material lending funds, endorsements or guarantees;
Offering or issuance of any equity-type securities;
Derivatives and cash investments;
Appointment or discharge of financial, accounting, or internal auditing officer.

Recent committee proceedings.:

The discussions and resolutions

Meeting Date

Meeting Summary

2024-12-27

Appointment of the certified public accountant of the Company and relevant audit fee of 2025
Review of non-assurance services scope provided by CPA in 2025

2024-10-30

Review of the internal audit report
Review of the Q3 2024 financial report
Revision of Internal Control System

2024-07-31

Review of the internal audit report
Review of the Q2 2024 financial report

2024-05-03

Review of the internal audit report
Review of the Q1 2024 financial report
Audit of acquisition of securities
Revision of Internal Control System and Internal Audit System

2024-03-01

Review of the internal audit report
The Statement of Internal Control System of 2023
Review of 2023 annual financial report

Performance Self-Assessment

Evaluation Period

Method of Evaluation

Contents of Evaluation

2023

Evaluate the performance of the Audit Committee and individual committee member.

Overall performance evaluation of the audit committee: Considering the evaluation indicators formulated by the competent authority, the degree of participation in the operation of the Company, the perception of the responsibilities of the audit committee, the decision quality of the audit committee, the composition and selection of the audit committee, and the internal control, etc.

Note: Already reported to the board of directors on March 1, 2024

The Communications between independent directors and the internal auditor

On October 25, 2024, the independent directors and the internal auditor jointly reviewed the 2024 deficiencies and improvements and discussed the 2025 audit plan based on the risk assessment results. The independent directors also advised optimizing the presentation of the audit report and audit techniques. Additional, Independent Directors reminded that considering the internal control system covers many procedures, it is recommended to classify the risk of procedures and plan the frequency of audit accordingly in order to focus on the audit; the audit supervisor replied that he will review the current internal audit implementation rules and make adjustments accordingly, which will be used as a reference basis for the planning of audit program in 2025.

The Communications between independent directors and the engaged Certified Public Accountant (CPA)

On October 25, 2024, the independent directors discussed the key audit matters and AQI result with the engaged CPA.

Compensation Committee

The members of the Compensation Committee are appointed by the Board in accordance with the law. The current members are 3 members, namely, Independent Director Wang, Hsuan (Convener), Independent Director Liu, Frank and Mr. Chen, Ken which is in compliance with the requirement the "Rules Governing the Organization and Administration of the Compensation Committee". The Compensation Committee assists the Board of Directors in fulfilling its responsibilities with respect to the Company's compensation and benefit policies, plans, and programs, and conducts compensation evaluations of directors and managers. To enhance the independence of the Compensation Committee, the Board of Directors appointed Mr. Chen, Ken who was the President of Global Unichip Corp, with his rich experience in the industry, Mr. Chen is in a better position to demonstrate the professional competence of the Company's Compensation Committee in discharging its duties.

The discussions and resolutions of the Compensation Committee in the last year

The discussions and resolutions

Meeting Date

Meeting Summary

2024-12-18

Revisions “compensation calculation rules”
Review and discuss the managers’ compensation plan
Review and discuss managers’ the list of employee stock option

2024-06-13

Review and discuss on the managers’ and newly manger’s compensation plan

2024-03-27

Review and discuss managers promotion and salary adjustments
Review and discuss 2023 Directors' remuneration distribution

Performance Self-Assessment

Evaluation Period

Method of Evaluation

Contents of Evaluation

2023

Evaluate the performance of functional committee and individual committee member.

Overall performance evaluation of the compensation committee: Taking into account the evaluation indicators formulated by the competent authority, the degree of participation in the operation of the Company, the perception of the responsibilities of the compensation committee, the improvement of decision quality of the compensation committee, and the composition and selection of the compensation committee, etc.

Note: Already reported to the board of directors on March 1, 2024

Corporate Governance Officer

Ms. Shu-Ling, Hong was appointed as the Corporate Governance Officer by the Board of Directors in May 2021 and promptly assumed the position.
She is primarily responsible for corporate governance-related matters, including
Legally handling matters related to the Board of Directors, Audit Committee, Compensation Committee, and Shareholders’ Meetings;
Assisting directors with their appointments and on-the-job training;
Providing directors with the necessary information to perform their duties.

The duties performed by the Corporate Governance Officer in 2024 are as follows:

Assisted Chairperson of Board of Directors and Committees’ Chairs to convene 13 Meetings.
2024 Annual Shareholders’ Meeting.
Provided continuing education information to directors.
Assisted the directors in performing their duties, including providing supplementary meeting materials, arranging independent meetings between the audit committee and the engaged CPA, arranging communication meetings between the audit committee and the internal auditor, etc..
Provided related legal compliance reports to the Board of Directors, and timely responded to all directors’ requests, etc..

Corporate Governance Officer Training in 2024

Training

Date

Host

Training/Speech Title

Duration

2024-06-06

Taiwan Stock Exchange

Empowering the Carbon Era with Sustainable Knowledge

7 hrs

2024-12-09

Taiwan Corporate Governance Association

How to Adjust Internal Control System for the New ESG Requirements

6 hrs

Internal Audit

Internal Audit function is an independent unit that reports directly to the Board of Directors. Besides informing the Board during its ordinary meetings, it briefs the Audit Committee on a quarterly and on as needed basis. The majority of the audit work is executed according to an annual plan, which needs to be approved by the Board of Directors and special audits are conducted as needed.
The purposes of internal audit are to assist the Board of Directors and managers in reviewing the effectiveness of the Company’s internal controls, operational effectiveness and efficiency, and then to provide recommendations.
In addition, the company supplements the review activities by Internal Audit with documented self-assessments by the divisions. Internal Audit sees to it that these activities do take place, and reviews the submissions to ensure the quality of the process; it consolidates the results of the self-assessments for the Audit Committee and the Board of Directors.
The appointment or dismissal of the Internal Audit supervisor is reviewed by the Audit Committee and decided by the Board of Directors. His/her performance review and remuneration are based on company rules and reported to the Audit Committee and the Board of Directors.

IP Management Plan

We reinforce our technology development and market application in DRAM industry by building up IP management strategy, which enables us to achieve better performance in profit, maximize corporation value, and secure our competition advantage.

Patent Portfolio Management

We establish patent review, award system, and training course for patent filing to protect our invention and sustain our market leadership among our competitors. We are devoted to developing the patent management strategy, discovering and filing of inventions in relevant fields, and managing benefit and effectiveness of patent. Besides, through patent review system and cooperation with top-ranking law firm, not only can we ensure the quality of our patent, but we also can bring out the energy of innovation and increase the quantity of patent with practice of internal strategies.

Trade Secret Management

Through internal confidential information management system, staff training, system management, and Non-Disclosure Agreement (NDA), we are able to protect our key technology and prevent the disclosure of client’s confidential information to ensure Client’s trust in our technology and sustain competitive advantage of our exclusive technology.

Other IP management

We protect our trademark, copyright, rights in circuit layouts, and other intangible properties in accordance with our business strategies and demands. Besides, we strengthen our brand layout by closely collaborating with our marketing team members. Meanwhile, through internal audit system and periodical review, we continuously develop the innovation and management of IP rights in a flexible way.

Implementation Recently

AP Memory regularly reports matters related to intellectual property rights management to the board of directors. The latest report date is December 27, 2024.
As of December 31, 2024, AP Memory has obtained a total of 32 global patents, among which 7 patents were approved in 2024.

Information Security

Information Security Governance

AP Memory established the "Information Security Governance Committee" in July 2023 to ensure information security for stakeholders and provide a secure environment. The committee formulated a policy in compliance with the FSC's guidelines to ensure the confidentiality, integrity, and availability of information assets, and to establish a secure operating environment.

Governance Structure

The committee oversees the "Information Security Technical Team" and the "Information Security Planning Team," which include IT professionals, business unit heads, auditors, and legal advisors. They are responsible for planning and implementing information security strategies.

Protection and Training

Penetration Testing and Vulnerability Remediation

Annual penetration testing and vulnerability scanning are conducted. Based on the results, improvements are made and re-verified to reduce security risks.

Social Engineering Drills

Two company-wide drills are conducted annually. The 2024 drills showed a significant reduction in erroneous clicks or inputs compared to 2023, demonstrating the effectiveness of the drills and security awareness campaigns.

Education and Training

Two company-wide information security training sessions are held annually to enhance employee awareness and implement security measures. Information security personnel also participate in external training and conferences as needed.

Major Internal Policies

Document

Download

Articles of Incorporation

Rules Governing the Procedures for Shareholders Meetings

Procedures for the Election of the Directors

Procedures of Board of Director Meetings

Procedures for Acquisition or Disposal of Assets

Risk Management

To strengthen corporate governance and carry out risk management against uncertain factors that may threaten company’s operation

Risk Management Policies

To strengthen corporate governance and carry out risk management against uncertain factors that may threaten company’s operation, AP Memory formulated the “Risk Management Measures” which is approved by the board of directors in May 2020 and were set to be the supreme guiding principles in controlling risk.

AP Memory conducts annual risk evaluation, the company’s cross-functional organization identifies and analyzes the degree of impact that each risk factors could cause on the company, and formulate risk control priorities to report to the Management Committee (CMC). CMC is responsible for formulating risk management policies and operational structures, regularly tracking the implementation of each risk management procedure, and reporting to the Audit Committee and the Board of Directors.

Risk Management Framework and Duties

Board of Directors：As the highest governance

Approve risk management policies, procedures and structure
Ensure that operational strategic is consistent with risk management policies
Ensure that appropriate risk management mechanisms and risk management culture have been established
Supervise and ensure the effective operation of the overall risk management mechanism
Assign sufficient and appropriate resources to enable risk management to operate effectively.

Audit Committee: As the supervisory

Regularly obtain relevant reports and understand the company's implementation of risk management and make suggestions for improving the design of risk management policies, systems, and processes.

Management Committee (CMC)

Review risk management policies, procedures, and frameworks, and periodically review their applicability and effectiveness.
Recognition risk tolerance then to guide resource allocation
Define risk control priorities and risk levels
Ensure that the risk management mechanism adequately addresses the risks faced by the Company and is integrated into the daily operation.
Review the implementation of risk management, propose necessary improvements, and report to the Board of Directors on a regular basis (at least once a year).
Execute Decisions of the Board

Operation Departments

In charge of identifying, analyzing, evaluating, and responding to the risks, and establishing a crisis management mechanism when necessary.
Regular reporting of risk management information to CMC
Ensure risk management and related control procedures are effectively implemented in line with the risk management policy

Risk Management Scope and Strategy

AP Memory actively manages the risks that may affect operation process, involving various aspects such as strategy, operation, finance, and hazardous events. By establishing an enterprise risk analysis and assessment table and assessing the frequency of risk events and the severity of the impact on the company’s operations, AP Memory defines the risk level and the priority of risk management, and adopting corresponding risk management strategies according to the risk level.

Risk Categories｜Natural disaster or emergency risk

Risk statement｜Natural disasters such as earthquakes, fires or power outages will affect the company’s operation

Control method｜

According to the “Code of Practice for Safety and Health”, set up occupational safety and health personnel responsible for supervising occupational safety and health management plan.
Cooperate with the office building management committee to set up emergency response measures for power outages, earthquakes and fires
Implement annual education and training plans and drills for environmental safety and health.

Risk Categories｜Information Security Risk

Risk statement｜Intrusion of important information or operational systems, resulting in operational interruption or the risk of important information being stolen or tampered with

Control method｜

The “Information Security Management Measures” has been formulated to strengthen the control over the use of information hardware and software by colleagues, and a firewall and related backup equipment have been built to control and maintain the normal operation of the company’s important information and systems.

Risk Categories｜Supply chain risk

Risk statement｜Risk of single upstream supply source

Control method｜

Establish a long-term partnership with a world-renowned wafer foundry as the main source of wafers to ensure sufficient capacity and to improve the stability of wafer supply.

Risk Categories｜Financial risk

Risk statement｜Risk of corporate losses due to the uncertainty of exchange rates and interest rates fluctuation

Control method｜

Regularly evaluate the bank’s various project deposit and loan interest rates, and monitor the effect of market interest rates fluctuation, thus taking flexible measures to adjust idle funds.

If there is a need for derivative products hedging, we will consider the cost of hedging and the benefits of hedging, and use financial instruments in a timely manner to avoid the risk of exchange rate changes.

Risk Categories｜Risk of business information leakage

Risk statement｜The risk of employees, upstream and downstream customers improperly disclosing the company’s confidential information

Control method｜

The employment contract has a confidentiality clause, requiring employees to abide by the principle of confidentiality; Promoting the importance of business secrets and the concept of confidentiality.
Add a penalty for breach of confidentiality contract, and strengthen the implementation of the inspection mechanism that requires the other party to destroy and return it within specified period.

Risk Management Operations

The Company's risk management process includes risk identification, risk analysis, risk assessment, risk response, and monitoring and review mechanisms. Company conducts risk assessment annually, in which the cross-functional organization identifies the risk factors it may face, analyzes the likelihood of an event occurring and the degree of negative impact if it occurs, in order to understand the impact of the risk on the company, and draws up a risk control priority and countermeasure, which is submitted to the CMC for review and approval then report to the Audit Committee and the Board. 2024 assessment result and countermeasure submitted on October 30, 2024.

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Corporate Governance

Risk Management Policies

Risk Management Framework and Duties

Risk Management Scope and Strategy

Risk Management Operations

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