Regulations Governing Establishment of Internal Control Systems by Public Companies Article 39

A public company shall execute at least the following control activities when supervising and managing its subsidiaries' business management:1. Establish an adequate organizational control structure between it and each subsidiary, including the election of, the assignment of authority and responsibility to, and the remuneration policy and system for the subsidiary's directors, supervisors, and high-level managers.2. Set out overall business strategies, risk management policies, and guidelines applicable to it and its subsidiaries, as a basis for each subsidiary to map out business plan and risk management policies and procedures for relevant business operations.3. Set forth policies and procedures applicable to it and each subsidiary in relation to business segmentation, liaison regarding order placement, materials preparation methods, inventory allocation, conditions for accounts receivable and accounts payable, and account processing.4. Set forth policies and procedures for supervising each subsidiary's material financial and business matters such as business plan and budget, material investment and reinvestment in equipment, borrowings and debt, lending of funds to others, endorsement/guarantees, obligations and commitments, investment in securities and derivatives, important contracts, major changes in assets, and management of the adoption of the International Financial Reporting Standards (IFRSs), the accounting professional judgment process, and the process for changes in accounting policies and accounting estimates.