To achieve the goal of sustainable operation, we continuously expand new investments and new markets, enhance brand value, reduce costs, and improve operational efficiency to ensure sustained profitability of the company. We establish good corporate governance systems, comply with relevant regulations regarding the environment, society, and food safety, and take information security and personal data protection measures seriously. These efforts are all aimed to establish a sustainable company brand. The company upholds honesty and integrity as its significant core value and stipulates the "Ethical corporate management best practice principles", "Procedures for ethical management and Guidelines for conduct", and "Risk management policies". We strictly demand our employees to implement ethical corporate policies and prevent the possibility of unethical behaviors, so that an ethical corporate culture can be established and developed healthily, thus fulfilling the commitment of operating policies. Each unit should incorporate various risk factors into its management based on its business nature and the principle of risk diversification. Regular checks and assessments should be conducted, using quantitative methods whenever possible, to establish risk alert mechanisms that serve as the basis for managing and responding to risks.

 

1.Ethical Management and Corporate Governance

1.2 Operation of the Board of Directors

Operation of the Board of Directors

1.3 Ethical Management

Ethical Management Procedures

The company upholds integrity and honesty as important core values. We maintain a "zero tolerance" attitude towards unethical behaviors such as bribery and corruption. We recognize and comply with regulations such as the "United Nations Convention against Corruption," Taiwan's "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies" and "Guidelines for the Adoption of Codes of Ethical Conduct for TWSE/GTSM Listed Companies". To mitigate corruption risks, besides clearly stipulating regulations on avoiding conflicts of interest and prohibiting the transfer of benefits between stakeholders in the "Rules of Procedure for Board of Directors Meetings" and "Corporate governance best practice principles", the company also establishes the internal control system and relevant operation procedures such as the "Ethical Corporate Management Best Practice Principles", "Procedures for ethical management and Guidelines for conduct", and "Code of ethical conducts". We strictly require every employee to implement ethical management policies to prevent the occurrence of unethical behaviors, thus developing an ethical corporate culture in a comprehensive manner and fulfilling the commitment to implementing management policies. Every year, online educational courses on topics such as ethical management, information disclosure, and insider trading are organized. It is mandatory for all employees to complete these courses.
The specialized unit responsible for ethical corporate management in the company is the "Ethical corporate management promotion team," composed of the relevant management level and belongs to the Board of Directors. The team is responsible for promoting and supervising the implementation of ethical operation policies and preventive measures. It reports to the Board of Directors on an annual basis, and the report is audited by the Audit Office to fulfill the responsibility of ethical management. Additionally, at least once a year, educational or advocacy programs of this operational procedure or relevant laws and regulations are conducted for directors, audit committee members, managerial officers, shareholders holding over 10% of the shares, and employees. We also provide timely education and advocacies to newly appointed directors, audit committee members, managerial officers, and employees. The specialized unit has already presented a report on the company's implementation status of ethical business operations in 2024 to the Board of Directors during the Board meeting held on 13rd December 2024.
The company's audit office has conducted an annual audit before the requirements of the law. The company's status is reported to the independent directors (audit committee) and the Board of Directors separately. In addition to legal provisions, the audit especially strengthens its focus on the expressly prohibited clauses, such as facilitation payments and political donations. In addition, special attention is paid to the company's cash flow, such as the objects, amounts, and authorized reviewers of donations and sponsorships.
Educational or advocacy programs of this operational procedure or relevant laws and regulations are conducted at least once a year for directors, audit committee members, managerial officers, shareholders holding over 10% of the shares, and employees. We also provide timely education and advocacies to newly appointed directors, audit committee members, managerial officers, and employees.



Ethical management is of utmost importance to the company. If dishonest behavior occurs, it may have a negative impact on the company's image. If contracts are signed with customers or suppliers due to dishonest behavior, the company's interests may be harmed. Additionally, if such behavior involves legal acts such as infringement and unfair competition, the company will likely face legal compensation or other legal liabilities.
Therefore, the company has committed to preventing dishonest behavior from occurring. If the company's counterparts engage in dishonest behavior, the company may terminate or dissolve the cooperation contract with them at any time.
In accordance with the "Ethical Corporate Management Principles", the Company has set up a channel and a hotline for internal and external personnel to report and file complaints against violations of the ethical corporate management（integrity@youngqin.com.tw、03-273-7378）. The information reported will be kept confidential and appropriate protective measures will be taken to protect the personal information and privacy of the reporting party in accordance with the law.



The Company did not receive any internal or external reports or legal cases related to the Company's breach of ethical corporate management through reporting channels from January to December 2024. The Audit Office did not discover any matters related to the breach of ethical corporate management after auditing the items in the Company’s 2024 "Implementation of Ethical Corporate Management and Measures Adopted". Also, it did not find any violation of ethical management procedures and insider trading, anti-competitive behavior, monopoly or market operation, unethical or dishonest behavior.

2. Risk Management

2.1 Risk Management Culture

Internal control and audit mechanism

Based on the provisions of "Regulations Governing Establishment of Internal Control Systems by Public Companies" and the company's industry nature, the internal control system is divided into operational cycle controls such as sales and accounts receivable cycles, as well as management operations for supervising and managing subsidiaries, thereby fostering the sound operations of the company. Furthermore, it aims to provide reasonable assurance in achieving objectives related to operational effectiveness and efficiency, reliability of reporting, timeliness, transparency, and compliance with relevant laws and regulations.Internal auditing focuses on its regularity and is supplemented by test checks. Audit works are carried out at least once a year. When performing audit tasks by audit personnel, the size of the sample shall be determined by the soundness of the internal control system for every matter and quality judgment from previous audit results. As for the selection of audit items, they are assigned by senior supervisors, based on the annual audit plan, or determined by auditors based on past audit results. Continuous auditing is conducted and if there are time and resource constraints, audit items can be handled selectively. In principle, each audit item should be audited at least once within a three-year period. In addition to conducting routine audits, the internal audit unit also urges all internal units of the company to conduct self-evaluations at least once a year. A self-supervising mechanism is established within the company, and the audit unit then reviews the self-evaluation reports of each unit and subsidiary, along with the improvement status of internal control system deficiencies and abnormal findings identified during the audit process. After that, a written report on the internal audit of self-evaluation is prepared, which supports the evaluation of the overall effectiveness of the internal control system for the Board of Directors and the General Manager. This report is also used to issue a statement of the internal control system. According to the audit plan for 2022, no significant internal control deficiencies or abnormal findings were identified. However, recommendations were made regarding operational processes to serve as a reference for departments in enhancing management quality.

Risk Management

In addition to risk management and supervision by the functional committees and the audit office, employees are also cultivated to value risk management and increase awareness of crisis handling, which is our aim to promote risk management and establish crisis management mechanisms, thereby achieving the goals of corporate sustainable operations. Based on the operational policies of the company, we have defined various types of risks and established the "Regulations of risk management". The company also has emergency disaster response measures and other operating mechanisms to treat and manage risks, so that potential dangers or accidents can be prevented and the company can also be better prepared to prevent and swiftly address unforeseen events. Risk management is the responsibility of all employees, and each employee should possess risk awareness and implement procedures such as risk identification, assessment, and controls within their relevant scope of work. Each unit should incorporate various risk factors into its management based on its business nature and the principle of risk diversification. Regular checks and assessments should be conducted, using quantitative methods whenever possible, to establish risk alert mechanisms that serve as the basis for managing and responding to risks. Moreover, the company is actively engaged in building strong relationships with the external side and consumers to imprint a likable image in the heart of consumers. Currently, the company has received excellent remarks. In recent years, there have been no incidents that have changed our corporate image which further affected corporate crisis management.

2.Risk Management Mechanism

The processes related to risk identification, assessment, monitoring, and reporting in the company should be adjusted in a timely manner to align with changes in the business environment, operations, and activities.

 

3. Compliance of Laws and Regulations

Youngqin International actively monitors industry development trends and changes in various industry policies and regulations. To ensure compliance with laws and regulations, the company not only tracks and assesses existing regulations but also establishes various internal policies and procedures. Additionally, through educational training programs, all units can stay up-to-date with the latest legal requirements. The company's quality assurance department regularly monitors food-related laws and regulations, identifies the requirements that must be complied with, and provides regular reports to senior supervisors.
Youngqin International strictly adheres to the regulations and administrative guidance of relevant competent authorities. We continuously update and modify our internal operational process management mechanisms to align with the latest regulatory amendments and laws enacted. This ensures that all business operations are conducted in accordance with the relevant laws and regulations. Except for incidents related to food safety, the company has also set standards for self-disclosure of material violations as follows:
1. Violating the "Fair Trade Act" and being penalized by the Fair Trade Commission;
2. Penalties imposed by the competent authority with a fine of NTD 1 million or above in a single incident; Cases of labor laws violation with fines or penalties of NTD 500,000;
3. Material litigation involving an amount exceeding NTD 1 million;
4. Material changes in the company's operation and management, as well as other incidents considered material information by the Taipei Exchange, or incidents determined by the company's Board resolution to have a significant impact on shareholders' rights and interests.
5. Cases about our trucking fleet penalized for violating traffic regulations with traffic fines of over NTD 5,000



In addition to the disclosure of material violations stated above, the company also disclosed the total number and amount of fines paid for violating regulations in 2023 and 2024, and the data are as follows:



In 2024, no fines or penalties were imposed for violating economic regulations, environmental protection regulations, Act Governing Food Safety and Sanitation, or other laws and regulations.
In 2024, there were no incidents of violating regulations related to health and safety, and marketing and communication. No material fines or sanctions were imposed by the competent authority that involved serious violations in restaurants, confirmed cases of foodborne illnesses, or food safety recalls.

Related information is as follows in 2024:



Every year, the company provides food safety management and regulatory case advocacies, as well as education and training on food safety management and occupational safety to newly hired employees in company-owned stores. Additionally, all franchisees who joined during the fiscal year are required to attend a 30-minute store hygiene management course.



To strengthen the establishment of legal awareness, Youngqin International conducts annual advocacy courses on "Prevention of Insider Trading, Ethical Management, and Handling Material Inside Information" for directors, managerial officials, and all employees. Moreover, legal case studies are regularly announced on the company's internal network to continuously provide periodical regulatory education and advocacies to employees.