Integrity Management

Ethical Corporate Management Policy

The Company follows the business philosophy of integrity, transparency, and responsibility to formulate an integrity-based policy and to create a business environment for sustainable development.

1. Prohibition of unethical conduct: All the directors, managers, employees, mandataries of the Company shall commit to conforming to all relevant laws and regulations, and shall not directly or indirectly offer, promise to offer, accept or ask for any improper benefits, nor commit unethical acts including breach of ethics, illegal acts, or breach of fiduciary duty when engaging in commercial activities.
2. Operating commercial activities with integrity: The Company shall engage in commercial activities in a fair and transparent manner based on the principle of ethical corporate management. If agents, suppliers, customers, or other trading counterparties are involved in dishonest conduct, the Company may terminate or rescind the terms of the contract at any time.
3. Avoidance of conflicts of interest: Directors, managers, employees, and mandataries of the Company should avoid conflicts of interest arising from themselves and their work. The Company should provide appropriate channels for stakeholders to explain whether they have potential conflicts of interest with the company.
4. The protection of intellectual property rights: The Company and its directors, managers, employees, mandataries shall commit to conforming to the relevant laws and regulations of intellectual property, the company's internal operating procedures and contract provisions to protect the confidential information of the company and customers; without the consent of the intellectual property owner, The use, leakage, disposition, damage or other infringement of intellectual property rights is not allowed.
5. Preventing the products or services from harming stakeholders: The Company and its directors, managers, employees, mandataries shall commit to conforming to the relevant laws and regulations and international standards in the course of research and development, procurement, manufacture, provision or sale of products and services to prevent their products and services from directly or indirectly damaging the rights and interests, health, and safety of consumers or other interested parties.
6. To fully fulfill ethical corporate management, the Company has set up the “Legal Affairs Office” under the board of directors as a dedicated unit; responsible for the formulation and supervision of the implementation of ethical corporate management policy and prevention plan, and regularly (at least once a year) report to the board of directors.
7. Educational Training and appraisal: The Company periodically organizes educational training and advocacy for directors, managers, employees and mandataries, and invites the counterparts of the commercial activities with the company to participate, so that they can be fully aware of the company's determination for ethical corporate management, the policies, prevention plans, and the consequences of unethical conducts.
8. Whistle-blowing system: The Company has formulated the "Rewards measures of the reporting on violation" and the "Whistleblower channel and protection system operating procedure", and shall scrupulously carry out the system.

Regulatory Compliance DMA (Disclosure of Management Approach)

Policy: Comply with the law and eliminate violations.
Commitment: Capture the law and continuous publicity.
Objectives: Enforce regulatory compliance check; comply with the law; develop a mutual learning environment; and avoid violations due to negligence in the provision or use of products and services or environmental issues.
Resources: Smart use of internet resources and establishment of the Audit Office, Legal Office, professionals and completion of work standards.

Business Ethics and Philosophy

In addition to regulatory compliance, Dynamic’s business philosophy covers its corporate culture: integrity, responsibility and learning demonstrated in the realization of “care for employees, partners, shareholders, the environment, and society.” Dynamic willfully raises business ethics and standards and turns them into the Code of Conduct for Employees.

• In the “Directors, Supervisors and Managers Code of Conduct”, the ethical standards of relevant personnel are specified, including prevention of conflict of interest, avoidance of seeking personal interests, non-disclosure responsibility, fair trade, protection and appropriate use of corporate assets, regulatory compliance, and encouragement of reporting illegal or unethical acts.
• In the “Employees Code of Conduct”, standards including avoidance of conflict of interest are specified for employees to follow.
• No significant error is allowed in financial statements and disclosures of relevant information. All books, records and other publicly disclosed information shall be complete, appropriate, correct, and adequate to timely reflect all transactions and asset settlement. No individual or person instructed by this individual should influence this company or a certified public accountant by means of compulsion, manipulation, misleading or fraud, either directly or indirectly. Internal auditors should be audited regularly with reference to the specifications in relevant SOPs.
• The CEO mailbox was established in 2013 for employees, suppliers, third parties and customers to file grievances or report any internal corruption, bribery or dishonest act in writing. The CEO handles and replies all grievances and reports personally and in absolute confidentiality to effectively inhibit dishonesty.
• The CEO mailbox is not only known to all new employees during induction training, but also written in the external contracts to inform our business partners, third parties and customers the channel for disclosing illegal or dishonest behaviors.

Compliance with regulations

The compliance procedure of Dynamic’s three line-defense

Dynamic has established three lines of defense for compliance procedures in different regulatory areas, including corporate governance, insider trading, securities regulations, subsidiary supervision, document management and preservation, environmental regulations, occupational safety, labor regulations, intellectual property, confidential information protection, and personal Data protection, export control, etc. Each responsible unit regularly and systematically conducts the identification, amendment, promotion and implementation of regulations to ensure that the regulations are fully complied with. Under this rigorous procedure and actual implementation, the Group has not incurred significant fines in 2021 due to violations of laws and regulations related to the provision and use of products and services, environmental issues, and other issues (fines exceeding NTD1,000,000), and no other penalties caused by other responsibility violation.

Execution Reported cases received in the CEO mailbox in 2021: none.
Man-times and man-hours of internal education and training with integrity management as the course theme in 2021:

• Taoyuan Operation Center, 2 man-times, 1 hour man-hour.
• Kunshan Plant, 8,450 man-times, 4,225.0 man-hours.
• Huangshi Factory, 647 man-times, 323.5 man-hours.

Signing 2021 Integrity Management Statement: Including all directors and senior management personnel. A total of 14 people signed which is 100% of signing rate.

Anti-corruption

To comply with anti-corruption policy, Dynamic has established a stricter supervision mechanism for departments and business activities with high risk of dishonesty, and on the other hand stated the "Reporting and Rewarding Practice Measures", specific reporting accesses, rewarding systems, and related confidentiality mechanisms of the dedicated personnel in charge and processing procedures.

The specific practices of Dynamic in implementing the ethics and integrity policy includes the following:

1. Formulate the management measures of "Directors, Supervisors and Managers' Code of Ethical Conduct" and "Staff Ethical Code of Conduct" to fully disclose the ethical behavior standards of directors, managers and employees for everyone to follow.
2. Sign quality contracts, procurement commitments, integrity commitments, non-use of harmful substances guarantees, etc. with agents, suppliers, customers and other business partners, so that partners can understand and accept Dynamic's corporate culture and create positive influences, jointly implement the cooperation model of ethics and integrity management.
3. Set up the "CEO Mailbox" (ceo@dynamicpcb.com) to provide employees, business partners and third parties with the access to reporting complaints or any corruption, taking or receiving bribery, and dishonesty within the company directly to the highest level of the company. Only the CEO can access and check the e-mail, and personally handle, reply or instruct to investigate, so as to achieve absolute confidentiality and effectively prevent the occurrence of dishonesty. The CEO's mailbox is notified during the new employee orientation, and it is also listed as a specific clause in all of Dynamic's external contracts, and it is also publicly announced on the company's website. In 2021, the CEO mailbox did not receive complaints about violations of ethics and integrity.
4. Internally set up an "unreasonable mailbox" to provide employees with an unreasonable reporting system or behavior that violates professional ethics, hoping that through the supervision of employees, the company's ethical standards can be better implemented. In 2021, the Taoyuan Operation Center did not receive any unreasonable complaints. Kunshan Plant has received 5 unreasonable complaints, and has investigated 2 of the unreasonable complaints. Employees are encouraged to strengthen communication, and relevant dereliction of duty personnel are warned or punished; the remaining 3 are suggestions for the maintenance of individual rights and administrative operations which have also been properly communicated and dealt with. Huangshi Factory has received 9 unreasonable complaints, 3 of which unreasonable reports have been improved and handled; the remaining 6 are suggestions for the maintenance of individual rights and administrative operations which have been properly communicated and handled.
5. Set up a "dedicated phone line" to provide multiple and convenient electronic way for cross-strait partners to exchange information. In 2021, no reports of complaint were received.
6. The Legal Office regularly reviews the operation of integrity and ethics.

Anti-competitive Behavior Policy At Dynamic, a well-formed and professional team reviews and assesses the legal risks of anti-competitive behavior, anti-trust, and monopoly practices and directly report the outcomes to the chairman and president to make immediate responses and avoid litigations.

Since Dynamic was established, no litigation regarding anti-competitive behavior, anti-trust, and monopoly practices has been recorded.

Human Rights Dynamic strictly abides by domestic and foreign labor and human rights norms, and introduces the "Responsible Business Alliance" (RBA), treats all employees fairly, provides equal job opportunities, no discrimination, child labor employment is disallowed, and prohibits coercion and coercion Labor, when employees' legitimate rights and interests are infringed or improperly handled and cannot be reasonably resolved, an "unreasonable mailbox" is provided as a complaint access, and the company will keep the whistleblower’s identity confidential. Important customers of Dynamic also often conduct human rights audits on their own or entrust international certified companies to the factory for audit. All the audits passed. In addition, Dynamic also conducts a strict review of all investment agreements and contracts, especially the human rights clauses involved. In 2021, Dynamic has no human rights complaints.

Man-times and man-hour of internal education and training related to "human rights" in 2021:

• Taoyuan Operation Center, 2 man-times, 1.0 man-hour.
• Kunshan Plant, 8,450 man-times, 4,225.0 man-hours
• Huangshi Factory, 647 man-times, 323.5 man-hours

Dynamic “Conflict Minerals” Policy In 2013, Dynamic established its own “conflict minerals” policy and requested suppliers and partners to support this policy, so as to avoid using materials of indecent origins, to keep up with international trends and fulfill customer requirements. Our “conflict minerals” policy is as follows:

Investment In addition, we have established the Legal Office, reporting to Chairman directly, to rigorously review all investment agreements and contracts. As we strictly comply with the provisions of RBA, not only the protection on the interests of employees and the working environment inside, we also have stringent requirements for outside vendors. Especially when it comes to an important investment agreements or contracts, we pay special attention if the object cares for RBA and human rights. These provisions involved will be particularly reviewed and requested.