Hua nan financial holdings annual report

The Board of Directors and Board of Supervisors serve to formulate strategy, carry out bank policies, and execute and supervise business activities. The Directors, who number fifteen at least and twenty-one at most (including four independent directors), and Supervisors, who number five, are separately appointed by HNFHC.

The Directors among themselves elect five Managing Directors (including one independent director), who elect a Chairman one another. Internally, the Chairman is the head of the Shareholders' Meeting, Board of Directors and Board of Managing Directors, while, externally, the Chairman represents the Bank.

A Board of Directors meeting is held once every three months. In case of emergency or if more than half of the Directors so request, an Extraordinary Meeting may be held. When the Board of Directors is not in session, the Managing Directors shall perform the functions of the Board of Directors by way of a meeting convened and presided by the Chairman of the Board at any time. Under the Board of Directors, we established the Auditing Department with Chief Auditing Officer being the department head responsible for all auditing related business.

The Board of Supervisors is formed by five Supervisors, who elect a Standing Supervisor one another. The Standing Supervisor is resident in the Bank, where he or she is charged with execution of supervisory duties.

Directors and Supervisors

Structure of Internal Audit

Hua Nan Commercial Bank has set up an Auditing Department (The Department) under the Board of Directors. The Department, headed by Chief Auditing Officer, engages in audit-related operations. There are one General Manager, one Deputy General Manager, several Division Chiefs and Deputy Division Chiefs, a number of auditors and staffs in auditing and evaluating the appropriateness and validity of internal control system as well as performance of operational activities.

Internal Audit Operation

1. Internal Audit

Hua Nan Commercial Bank (The Bank) has implemented the risk-based internal audit methodology since 2019. The Bank evaluates the comprehensive risks of each auditable units following the methodology, formulates an annual internal audit plan based on the risk assessment results, and periodically reviews the risk assessment results taking into consideration the changes in the external environment or internal business developments to reflect the risks of auditable units, and decide whether to revise the annual audit plan.

2. Continuous review
(1) External examination:

The examination opinions or audit deficiencies brought up by a financial examination authority, CPA, or internal audit unit of the financial holding company.

(2) Internal examination: The examination opinions or audit deficiencies listed by the internal audit, or self-inspection.

(3) The matters specified in the internal control system statement as requiring stronger improvement efforts.

3. Self-inspection

Monitor the formulation of rules and procedures for self-inspection by business and management units, and the implementation of periodic self-inspection by each unit.

4. Reports to the Board of Directors and Supervisors

(1) The Department shall report its audit business to the Board of Directors and Supervisors at a minimum period of every six months..

(2) External examination:

The examination opinions or audit deficiencies brought up by a financial examination authority, CPA, or internal audit unit of the financial holding company.

(3) Internal examination: The examination opinions or audit deficiencies listed by the internal audit, or self-inspection.

(4) The matters specified in the internal control system statement as requiring stronger improvement efforts.