Corporate Governance

Diversity and Independence of the Board of Directors

Our company established an Audit Committee on June 12, 2018, which consists of four independent directors. The Audit Committee regularly convenes meetings and invites auditors, audit managers, and relevant supervisors as needed.

The Audit Committee periodically assesses our company’s internal control system, internal audit staff, and their audit results. It also periodically reviews the financial statements for each quarter and discusses other matters required by relevant laws and regulations.

The committee independently reviews the appointment of the certifying accountant and the provision of audit and non-audit services by the certifying accountant.

Audit Committee Functions

Communication between Independent Directors and Internal Audit Director

To continuously strengthen corporate governance and align with international standards, our company established the “Remuneration Committee” in December 2011. Authorized by the Board of Directors, the committee supervises, reviews, and formulates the company’s overall remuneration policies and plans.

It also periodically evaluates and determines the remuneration of directors and executives. The Remuneration Committee consists of four members, including four independent directors, each with more than five years of work experience and relevant qualifications, ensuring the committee’s independence, professionalism, and impartiality.

Operation of the Compensation Committee

Board of Directors and Functional Committee Performance Evaluation Report

To fulfill the Company’s corporate social responsibility and promote sustainable development principles, the Company established a Sustainable Development Committee in December 2025. The Committee consists of three members, two of whom are directors. Based on the principle of materiality, the Committee conducts risk assessments and formulates strategies related to environmental, social, and corporate governance (ESG) issues, while the Board of Directors is responsible for overseeing the overall progress of sustainable development initiatives. The Committee convenes at least once a year and regularly reports the status of implementation to the Board of Directors to ensure that sustainable development measures are effectively implemented and continuously improved.

• In accordance with international standards such as TCFD, SASB, and GRI, the Company identifies and manages risks related to climate change, resource utilization, human rights, ethical business practices, and information security.
• The Company formulates short-, medium-, and long-term sustainability strategies as well as annual implementation plans, covering specific measures including carbon risk management, innovative product development, and improvements in energy efficiency.
• Integrity and ethical management policies, anti-corruption mechanisms, and whistleblowing and grievance systems have been established to strengthen corporate governance and social responsibility.

• The Sustainable Development Committee reports the progress and effectiveness of sustainability initiatives to the Board of Directors on an annual basis.
• Sustainability-related policies, implementation results, and disclosure information are published on the Company’s website and in the annual report for stakeholders’ reference.

Audit and Internal Control Organization and Responsibilities of Our Company:

• Internal Audit Organization: The internal audit department of our company is under the jurisdiction of the board of directors.
• Basis for Internal Audit Work: The internal audit work is primarily based on the audit plan approved by the board of directors. This audit plan is formulated based on the results of risk assessment. Additionally, special audits or reviews are conducted as needed.
• The Internal Control System Statement is reported on the designated website of the Financial Supervisory Commission within three months after the end of each fiscal year and is published in the annual report and public explanatory document.

• Internal Audit Members: This includes the audit manager and audit staff, totaling 2 persons.
• Responsibilities of the Internal Audit Organization: The internal audit department is responsible for auditing the company’s overall business, financial matters, operational conditions, conducting anomaly analysis, and providing recommendations for improvement. It periodically reviews the security of the company’s assets, assists the management in enforcing the company’s internal regulations and compliance with various requirements, and checks and evaluates the adequacy of internal control systems, supervising their effective utilization.

Audit Plan

Statement of Internal Control (SIC)

To implement corporate governance and prevent insider trading, KST has established relevant regulations in accordance with the requirements of regulatory authorities. These regulations prohibit internal personnel from trading securities using non-public information. The regulations include measures to control stock trading by internal personnel from the date they receive the company’s financial reports or related performance information. For example, directors are prohibited from trading company stock during a closed period starting 30 days before the annual financial report announcement and 15 days before each quarterly financial report announcement.

We have developed the “Management Procedures for Preventing Insider Trading,” which is publicly available on our company website for download and review. We also conduct annual education and promotion on relevant laws and regulations for current directors, managers, and employees.

KST conducted educational training and awareness sessions for a total of 651 participants, including current directors, managers, and employees, on October 9 and November 20, 2025.

The Company upholds integrity as its core corporate value and has established the “Procedures and Guidelines for Ethical Management,” which have been approved by the Board of Directors and serve as the Group’s internal policy for ethical business conduct. These procedures clearly define preventive measures against unethical conduct, including anti-corruption and anti-bribery practices, confidentiality mechanisms, prevention of monopolistic and unfair competition behaviors, prohibition of insider trading, and supervision and whistleblowing mechanisms.

To ensure that directors, supervisors, managers, and employees of the Company and its subsidiaries fully understand and implement standards of integrity and ethics, the Company formulated the “Code of Ethical Management” in August 2019. This code establishes a risk assessment mechanism for unethical conduct, under which the Company regularly analyzes and evaluates higher-risk operational activities, formulates corresponding preventive measures, and periodically reviews their appropriateness and effectiveness.

KST has designated the General Managing Division as the dedicated (or concurrent) unit responsible for promoting ethical management. This unit is in charge of the formulation, implementation, and supervision of integrity policies and preventive mechanisms, and reports the implementation results and improvement recommendations to the Board of Directors at least once a year to ensure the effective operation of the integrity governance system.

The Company has formulated preventive measures by referencing commonly adopted domestic and international standards or guidelines, covering the prevention of the following behaviors:

1. Bribery and acceptance of bribes.
2. Provision of illegal political contributions.
3. Improper charitable donations or sponsorships.
4. Offering or accepting unreasonable gifts, hospitality, or other improper benefits.
5. Infringement of trade secrets, trademark rights, patent rights, copyrights, and other intellectual property rights.
6. Engagement in unfair competition practices.
7. Products and services that, during research and development, procurement, manufacturing, provision, or sales, directly or indirectly harm the rights, health, or safety of consumers or other stakeholders.

Operation

KST is committed to continuously strengthening its information security management to safeguard operational information assets, protect customer and employee personal data, and enhance the resilience of information and communication systems. The Company adheres to the core principles of confidentiality, integrity, and availability (CIA) to mitigate operational risks and protect the rights and interests of the Company and its stakeholders.

The Company has established an Information Technology (IT) Office dedicated to promoting information security management. It appoints one information security supervisor and one information security staff member, responsible for the maintenance of hardware, software, and network security, as well as the implementation and supervision of related policies.In accordance with the information security policy, the IT Department formulates management procedures and continuously enhances protection mechanisms to ensure stable operation of information systems and to prevent unauthorized or malicious activities.

1. Personnel Security Management
   • Access revocation procedures upon employee departure
   • Information security education and training
2. Computer System Security Management
   • Management of outsourced system development and implementation
   • Prevention of computer viruses and malware
   • Client-side IPS systems
   • Password policy and rules
3. Network Security Management
   • Firewall deployment
   • Intrusion Prevention System (IPS)
   • Identity and access authentication procedures
   • Internal IP management and network access control
   • Network security usage policies
4. Email Security Management
   • Email usage management policies
   • Email logging and backup systems
   • Anti-spam systems
5. System Access Control Management
   • Security management standards and measures for outsourced IT services
   • VPN management for remote working connections
6. System and Network Intrusion Response
   • Backup and redundancy planning measures
   • Emergency response drills for production lines
   • Regular information security assessments

The Company allocates an annual information security budget for hardware and software upgrades and engages third-party professional institutions to conduct information security assessments to enhance overall protection capabilities. The scope of protection covers servers, internal networks, and end-user devices. Through mechanisms such as identity authentication, tiered access authorization, periodic password updates, and data backups, the Company reduces the risks of virus infections and external cyberattacks.

In addition, information security training is provided to new employees, and the latest security information and preventive measures are regularly communicated through the Company’s electronic announcement system. These initiatives ensure that all employees possess fundamental information security awareness and fulfill their responsibilities for information security.

Operation

KST adheres to the principles of technological innovation and sustainable development. In accordance with Article 37-2 of the Corporate Governance Best Practice Principles, the Company has established a comprehensive intellectual property management framework, covering systematic operational mechanisms for patents, trademarks, and trade secrets. The implementation status of intellectual property management is reported to the Board of Directors at least once a year to ensure effective governance and continuous improvement.

Operation

KST has formulated human rights protection policies and management mechanisms by referencing the International Covenant on Civil and Political Rights (ICCPR), the International Covenant on Economic, Social and Cultural Rights (ICESCR), and the UN Guiding Principles on Business and Human Rights (UNGP), and has incorporated these principles into its operational activities and supply chain management.

• The Company has established an Anti-Discrimination Policy, a Prohibition of Child Labor Policy, and a Supplier Commitment Letter, requiring business partners to comply with human rights standards.
• Human rights protection has been incorporated into internal management systems, including the Company Work Rules, to safeguard the right to work, equal treatment, and maternal health.

1. The Board of Directors regularly oversees the implementation progress of human rights policies.
2. Relevant policies and implementation status are disclosed on the Company’s website and in the annual report for stakeholders’ reference.

Operation

In accordance with the Personal Data Protection Act and relevant guidelines issued by competent authorities, the Company has established and regularly reviews and updates its Personal Data Security and Protection Procedures to fulfill its responsibilities for personal data protection, strengthen information security management, and safeguard the privacy rights and interests of stakeholders.
These procedures have been approved through internal review and cross-departmental consultation and are supported by audit mechanisms and revision processes to ensure regulatory compliance and effective implementation.

To ensure effective implementation of the system, the Company has designated the General Managing Division as the dedicated unit responsible for personal data protection. This unit is in charge of education and training, risk management, handling of complaints, and system audits. A clear division of responsibilities has been established across departments to ensure the traceability and accountability of personal data processing activities. Each department carries out personal data inventory, notification, use, retention, and destruction in accordance with these procedures, and regularly reports on the results of implementation.

1. The scope of this Personal Data Protection Policy covers employees, customers, suppliers, and recruitment-related activities. The Company has also established designated contact channels to respond to inquiries and complaints related to personal data protection and regularly consolidates handling records as a basis for system improvement.
   The Company is committed to conducting an annual review of its personal data protection framework and to promptly updating relevant measures in response to regulatory changes, thereby ensuring continuous improvement of the system and transparency of information.

Operation

In line with its core values of “Quality First, Customer Foremost,” the Company has established clear protection policies and complaint-handling mechanisms addressing customer health and safety, marketing information, and product labeling related to its products and services. Dedicated departments are responsible for implementation and management to ensure that the rights and interests of every customer are respected and safeguarded.

K.S. Terminals is committed to providing safe and reliable products and has adopted multiple international standards and certification systems, including:

• Management system certifications: ISO 9001, ISO 14001, IATF 16949, ISO/IEC 17025, and IECQ QC 080000.
• Product safety certifications: UL, CUL, CSA, TÜV, ABS, CQC, CNS, among others, applicable to markets in North America, Europe, China, and Taiwan.
• Quality assurance laboratory: Certified to ISO/IEC 17025 and recognized by UL as a CTDP testing laboratory, providing customized performance and reliability verification services.

All products undergo risk assessment and quality control processes to ensure compliance with safety and regulatory requirements, with continuous improvement and follow-up actions implemented on an ongoing basis.

• Product labeling is conducted in accordance with the regulations of the country of origin (such as the Commodity Labeling Act), ensuring that information is truthful, clear, and complete.
• Any exaggerated, misleading, or concealed statements regarding product functions or intended use are strictly prohibited. All external communications are subject to internal review and approval mechanisms.
• Packaging labels include information on materials, intended use, safety warnings, and certification marks to ensure transparency and regulatory compliance.

K.S. Terminals provides multiple convenient channels for customers to submit feedback or raise concerns regarding product quality, labeling information, or service content:

• 📞 Quality Hotline：+886-4-7582765
• 📧 Email：Inquiry@ksterminals.com

All complaints are recorded, investigated, and responded to in accordance with the Customer Complaint Handling Procedure. Complaint records are incorporated into the quality management system as a basis for continuous improvement, and the Quality Management Committee regularly reviews handling effectiveness and customer feedback.

• A Quality Management Committee has been established to regularly review product responsibility, labeling compliance, and customer feedback.
• All policies and procedures are managed through standard operating procedures (SOPs), process flowcharts, and standardized forms to ensure consistency and traceability in execution.
• The Quality Management Department is responsible for policy implementation and complaint handling and reports implementation status to senior management on a regular basis.

K.S. Terminals will continue to strengthen its institutional framework and information disclosure, responding to customer expectations with integrity, transparency, and accountability, and fulfilling its commitment to consumer protection across every stage of its products and services.

K.S. Terminals has established an Occupational Safety and Health Committee, which convenes quarterly to review occupational safety and health initiatives and improvement measures. A senior executive serves as the management representative, overseeing the effective implementation of related policies.

The Committee’s scope of review covers industrial safety, industrial hygiene, and education and training. Relevant personnel hold legally required certifications and regularly participate in external training programs to ensure professional competence.

The Zhangbin Xianxi Factory obtained ISO 45001 Occupational Health and Safety Management System certification in July 2023. Please refer to the relevant certification documentation for further details.

K.S. Terminals places great importance on employees’ professional development and safety awareness. In accordance with business needs and regulatory requirements, the Company continuously implements the following training programs:

• General Training: Orientation programs for new employees, occupational safety and health training, and fire prevention and disaster response training to strengthen fundamental workplace knowledge and safety awareness.
• Statutory Certification Training: Professional training programs for personnel required by regulations to hold certifications related to occupational safety and health, fire safety, and environmental protection.
• Professional Competency Training: Training programs in quality management, sustainability, research and development, and regulatory compliance are planned based on job functions and business development needs to enhance overall operational effectiveness.

K.S. Terminals is committed to promoting employees’ physical and mental well-being. In addition to conducting health examinations for new employees, employees engaged in special operations, and older employees in accordance with applicable laws, the Company provides health checkups every two years, exceeding statutory requirements.

The Company has engaged contracted occupational physicians and dedicated nurses to promote health promotion initiatives, as well as suitable job placement programs for middle-aged and older employees. In addition, the Company has established family-friendly breastfeeding rooms and medical rooms, and has continuously received the “Healthy Workplace Certification”, demonstrating its commitment to creating a safe, healthy, and inclusive workplace.

For detailed information on the implementation of employee safety and health initiatives, please refer to the ESG Reports of each respective year.

K.S. Terminals is committed to fostering an ethical, safe, and high-quality operating environment. The Company has established three dedicated reporting channels and encourages employees, suppliers, and other stakeholders to report any misconduct, risk incidents, or quality-related issues.
All reports are handled by designated units in accordance with established procedures, with full protection of whistleblowers’ privacy and rights.