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| Highlights and Key Achievements

Ethical Governance and Risk Management

tsti Ethical Governance and Risk Management Highlights and Key Achievements outlines the concrete milestones that demonstrate how Tatung System Technologies Inc. (tsti) translates its core corporate values—"Innovation and Progress," "Service Excellence," "Teamwork," and "Integrity"—into measurable operational succes.

Rather than viewing governance and risk management as static compliance obligations, the sources position these achievements as a dynamic, three-year evolutionary path (2023–2025) designed to build long-term corporate resilienc.

1. The Three-Year Evolution of Key Achievements

The chapter structures its highlights across three distinct fiscal years, linking financial growth with governance improvements:

  • 2023 Milestones (Foundation of Trust):
    • Financial Growth: Revenue and Earnings Per Share (EPS) maintained steady growth, with a gross profit margin of 22.19% (a year-on-year increase of over 3.99 percentage points) and a 9.20% growth in operating incom.
    • Internal Security: Successfully completed recertification for both ISO/IEC 20000-1:2018 and ISO/IEC 27001:2022.
    • Professional Recognition: Chairman Frank Shen received the "Outstanding ICT Elite Award," and Assistant VP Ming-Te Yu was recognized as one of the "100 MVP Managers of the Year".
  • 2024 Milestones (Integrating Sustainability):
    • Governance Evaluation: The Corporate Governance Evaluation for TPEx-Listed Companies improved from the 36%–50% bracket to the 21%–35% bracke.
    • Financial Performance: Achieved a full-year gross profit margin of 24% (a YoY increase of over 9%) while operating income grew by 3%.
    • Internal Control: The Board of Directors formally approved the incorporation of sustainability information management into tsti's internal control system on December 12, 2024.
  • 2025 Milestones (Strategic Maturation):
    • Governance Leadership: tsti successfully ranked in the prestigious top 6%–20% bracket in the 11th Corporate Governance Evaluation (announced in 2025.
    • Scale and Profitability: Consolidated revenue reached NTD 5,010,638 thousand (approximately NTD 5.01 billion. While the gross profit margin adjusted to 21% (a YoY decrease of 12.5%), operating income experienced an outstanding 40.9% YoY growth.
    • Value Chain & Risk Mitigation: tsti advanced its identification of climate-related risks, executed financial impact analyses, and revised supplier onboarding policies to integrate sustainability topics.

2. The Larger Context: Structural Support for Ethical Governance

These milestones are directly underpinned by the robust structural frameworks and committees established throughout the Ethical Governance and Risk Management Chapter :

  • Upgraded Sustainability Oversight: To ensure that the 2025 achievements continue to scale, the Board of Directors resolved on December 19, 2025, to establish the Sustainability and Risk Management Committee and enact its formal Charter Composed of Director Kuo, Director Lu, and President Liu, this committee is tasked with reviewing the annual ESG report and tracking risk management executionn.
  • Zero-Tolerance Integrity Operations: The milestone of maintaining zero employee corruption incidents and zero whistleblower reports from 2023 to 2025 is sustained by the Human Resources Department's strict anti-corruption policies, digitalized approval workflows, and whistleblower protection ruless.
  • ESG-Linked Executive Compensation: To hold leadership accountable for these targets, tsti’s executive remuneration is formally tied to non-financial goals. While financial indicators weight 90% of performance bonuses, the remaining 10% is directly linked to ESG indicators, such as corporate governance compliance, information security, and climate change risk response.
  • Proactive Labor Compliance: Following two Labor Standards Act incidents at the end of 2024 (for which tsti paid NT$100,000 in fines in 2025), the company fully rectified the issues. It back-paid affected employees and deployed a modern, cloud-based Human Resources Information System (HRIS) equipped with automated overtime calculations and regulatory early-warning alerts to prevent future compliance failures.
  • Accelerated IFRS Alignment: To stay ahead of regulatory requirements, tsti established a cross-departmental IFRS Task Force in Q4 2024 to prepare for IFRS Sustainability Disclosure Standards under an accelerated timeline, with Phase I analysis slated to finish by Q4 2026.

Please refer to the Sustainability Report [PDF] relevant chapter for more details.