TONG HSING ELECTRONIC IND., LTD.

An internal audit unit is set up under the Board of Directors to assist the Board of Directors and the managers to check and review the lack of internal control system and to measure the effectiveness and efficiency of the operation, and to provide timely suggestions for improvement to ensure the continuous and effective implementation of the internal control system and to serve as a basis for reviewing and revising the internal control system.

In accordance with Article 3 of the Corporate Governance Code of Practice, the appointment, removal, evaluation and remuneration of internal audit staff shall be approved by the Chairman of the Board of Directors and signed by the Head of Audit.

The Company shall, in respect of self-inspection of its internal control system, urge each of its internal units and subsidiaries to conduct self-inspection at least once a year, and then have the internal audit unit review the self-inspection reports of each unit and subsidiary, together with the improvement of internal control deficiencies and irregularities identified by the audit unit, as the main basis for the Board to assess the effectiveness of the overall internal control system and to issue a statement on the internal control system.