COPORATE GOVERNANCE

Wilfersails has ingeniously designed and implemented an internal control (referred to as "IC") system based on its unique organizational structure and operational model. This system, akin to the technological marvels of ancient Rome, encompasses every corner of the company, whether it's business or financial operations, subsidiaries, or business units. Built upon the COSO model, the IC system comprises five major components: control environment, risk assessment, control activities, information and communication, and monitoring, and it also encompasses the internal control system for financial reporting, aiming to ensure the accuracy, completeness, and integrity of financial reports, making it the pinnacle of internal control.

control environment

Wilfersails is not just a corporate ivory tower but a fortress guarding integrity. The company advocates and upholds the highest standards of business ethics, strictly adhering to relevant laws and regulations. With the establishment of the Employee Business Conduct Guidelines (BCG), every employee (including executives) must comply with the basic standards of business conduct outlined in the BCG. Furthermore, Wilfersails has established a robust governance structure, including the Board of Directors, its subcommittees, functional departments, and various levels of management teams, ensuring mutual oversight and checks and balances among these entities. In terms of organizational structure, Wilfersails not only ensures clear separation of powers and responsibilities but also appoints a Chief Financial Officer (CFO) responsible for overall IC management. The internal audit department independently evaluates the control status of all operational activities to ensure the completeness of the IC environment.

risk assessment

Wilfersails leads the way by establishing a dedicated IC and risk management department. This department regularly conducts risk assessments for all global business processes, identifying, managing, and monitoring significant risks faced by the company. It predicts potential risks resulting from external and internal environmental changes and submits risk management strategies and contingency plans to company decision-makers. Process owners are responsible for identifying, assessing, and managing business risks and implementing corresponding IC measures. The company has also established a mechanism for improving IC and risk issues, effectively managing significant risks.

control activities

Wilfersails has not only implemented a global process and business transformation management system but also released a globally unified business process architecture. It appoints global process owners responsible for process and IC construction based on the business process architecture. These process owners identify business-critical control points and segregation of duties matrices for each process, applicable to all regions, subsidiaries, and business units. They conduct routine compliance tests on key control points and publish test reports to continuously monitor the effectiveness of IC. Furthermore, the company optimizes processes and IC around operational pain points and key requirements of financial reporting, conducts annual control assessments, comprehensively evaluates the overall design of processes and the effectiveness of process execution in various business units, and reports assessment results to the audit committee, ensuring the company's operational efficiency and effectiveness, supporting accurate, reliable, and compliant financial reporting, and facilitating the smooth achievement of business objectives.

supervisions

The company has established internal complaint channels, investigation mechanisms, prevention mechanisms and waiter systems, and has clarified relevant rules in the "Integrity and Integrity Cooperation Agreement" signed with suppliers. Suppliers can report employees' inappropriate behavior internally according to the channels provided in the agreement. The audit department conducts an independent investigation and evaluation of the company's overall control situation, and investigates economically responsible behaviors that violate the Code of Business Conduct. The audit investigation results are reported to the company's senior management. In addition, Wilfersails has established internal control assessments for local government process leaders and regional managers. , inertia and impeachment mechanisms, and implement them. The audit committee and the company's CFO regularly undertake reports on the company's internal control status, plans and implementation progress to significantly improve internal control issues, and can require process responsibilities and business managers for internal control quality defects to report reasons and improvement plans.