ACBT — Governance Information 2019

Jul 19, 2019

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2019

All Cosmos Bio- Tech Holdings Corporation

Board of Directors

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[INTERNAL CONTROL POLICIES AND PROCEDURES – LOANS TO OTHERS]

THE INFORMATION CONTAIN HEREIN IS THE INTERNAL CONTROL POLICIES AND PROCEDURES FOR ALL COSMOS BIO- TECH HOLDING CORPORATION.

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

資金貸與他人作業管理辦法

PROCEDURES FOR LOANS TO OTHERS

DATE: 2019.06.19

A) Purposes and the regulatory basis 目的

The company may be required to lend funds to other companies (the "borrowers") depending on its business requirements. All lending activities shall comply with these procedures. These procedures were established according to the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies". Any matters that are not addressed in the procedures shall be governed by other relevant regulations.

公司可能需要根據其業務要求向其他公司（“借款人”）提供貸款。為使本公司有關資金貸與他人事 項，有所遵循特訂定本辦法。本辦法係依『公開發行公司資金貸與及背書保證處理準則』訂定，如有 未盡事宜，另依相關法令之規定辦理。

B) Borrowers and the assessment criteria 借款人和評估標準

According to Article 15 of "The Company Act", the company cannot loan to shareholders or any other parties except under the following circumstances:

公司依公司法第十五條規定，其資金除有下列各款情形外，不得貸與股東或任何他人：

1. Businesses with which the company has business dealings. The term "business dealings" mentioned above refers to purchases or sales of inventory. For loans granted to facilitate business dealings, determine whether the amount is equivalent to the underlying business transaction.

2. 與公司有業務往來的業務。所稱 ’ 業務往來 ’ ，是指購銷 存貨 。對於為促進業務往來而發放的貸款， 應 確 定其金額是否與業務往來 金額 相等。

3. The amount of loans to companies with short-term liquidity needs must not exceed 40% of the lender’s net value. Loans to each individual Company cannot exceed 20%.

有短期融通資金之必要者，其貸與金額不得超過貸款人淨值的 40% ，對個別 企業 資金貸與不得超過 20% 。

• (1) The duration of "short-term" mentioned above refers to a period of one year or one business cycle (whichever is longer).

• 所稱短期，係指一年。但公司之營業週期長於一年者，以營業週期為準。

• (2) The "amount of loans" refers to the cumulative balance of short-term capital lent by the company. 所稱融資金額，係指本公司短期融通資金之累計餘額。

• (3) Loans granted for short-term liquidity needs are permitted only under the following circumstances; the reasons for lending must also be provided. An external credit assessor may be commissioned if necessary to check borrower's credit:

• 有短期融通資金之必要而從事資金貸與者，以下列情況為限。必須提供貸款的理由。如有必要，可 委託外部信用評估員檢查借款人之信用：

• a. When short-term lending is needed to facilitate business transactions. 當需要短期貸款以便於商業交易時

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

• b. When other companies are in need of short-term financing for material purchases or for working capital.

當其他公司需要短期融資進行商品採購或營運週轉時

• c. Other circumstances approved by the company's Board of Directors.

• 公司董事會批准的其他情況。

The company's direct and indirect holding of 100% of the voting shares of foreign companies engaged in capital lending, or the company's direct and indirect holding of 100% of the voting shares of foreign companies engaged in capital lending to the public issuing company, is not subject to the restrictions of paragraph 2 of the first paragraph.

本公司直接及間接持有表決權股份百分之百之國外公司間從事資金貸與，或本公司直接及間接持有表決 權股份百分之百之國外公司對該公開發行公司從事資金貸與，不受第一項第二款之限制。

C) The total loan limit and the limits on individual borrowers 總貸款限額和個人借款人的限額

1. The company's loans to others in total must not more than 40% of its net value, as shown in the latest financial statements.

公司向他人提供的貸款總額不得超過其淨值的40％,依据最新的財務報表所示。

• (1) The amount of loans to companies with short-term liquidity needs must not aggregate more than 40% of the company's shareholders value; loans to individual borrower must not exceed 20% of the company's shareholders value.

  • 向有短期流動性需求的公司提供貸款，總額不得超超公司股東價值的 40% ；向個人借款人提 供貸款，總額不得超過公司股東價值的 20% 。

• (2) The amount of loans to companies with business dealing must not aggregate more than 40% of the company's shareholders value; loans to individual borrower with business dealing must not exceed 20% of the company’s shareholders value.

  • 對有業務往來的公司的貸款總額不得超過公司股東價值的 40% ；對有業務往來的個人借款人 的貸款總額不得超超公司股東價值的 20% 。

• Each subsidiary total lending cannot exceed 40% of its own net value as shown in its latest financial statements.

各子公司的貸款總額不得超過其最新財務報表所示淨值的 40 ％。

Loan to parent company (4) 貸款給母公司（ 4 ）

Total lending amounts to a single company cannot exceed 30% net value and the lending tenue shall not exceed 12 months. Lending can only be done upon the approval by the Board of Directors. 單個公司的貸款總額不得超過 30 ％的淨值，貸款期限不得超過 12 個月。貸款只能在董事會批准後 進行。

1. The term "latest financial statements" mentioned above refers to the company's CPA certified or reviewed financial statements that were published prior to lending to others.

以上所稱最近期財務報表，系指本公司經會計師查核或核閱後，於貸與他人前已公告之財務報表。

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

D) Loan tenor and interest accrual 貸與期限及利息應計

1. Loans cannot be extended for more than one year; the underlying interest rates must not be lower than MIBOR.

貸款期限不得超過一年;基礎利率不得低於 MIBOR 。

1. Loan tenors and methods of interest accrual are subject to approval by the Board of Directors before execution.

2. 貸款期限和應計利息方法在執行前必須經董事會批准。

3. Loans tenors for 100% foreign companies in which the Company holds 100% direct or indirect voting interest is set at a maximum of 3 years. Board of Directors approval must be obtained and a resolution passes for loan tenor’s extension.

4. 本公司直接及間接持有表決權股份百分之百之國外公司的貸款期限最多為 3 年。必須獲得董事會批 准, 並通過延長貸款期限的決議。

E) Loan execution and review procedures 辦理及審查程序

1. When a borrower requests a loan, the company shall demand the borrower provide its basic profile and financial information, together with submitting to the company an application detailing the use of funds, the loan tenor, and loan amount.

2. 借款者應提供基本資料及財務資料，並填具申請書，敘述資金用途，借款期間及金額後，送交本公 司財務部門。

3. The company will perform due diligence assessments to determine if the loan complies with its policy. The due diligence assessment must cover:

公司將進行盡職調查評估，以確定貸款是否符合其政策。盡職調查評估必須包括：

• (1) Evaluations on necessity and rationality of loans to others.

• 資金貸與他人之必要性及合理性。

• (2) Credit assessment and risk evaluation on the borrower. If the borrower exhibits sound financial strength, and its annual financial statements have been audited and certified by a certified public accountant, the company may continue to use borrower’s credit report that is less than one year old and borrower’s current CPA audited and certified financial report to support its lending decision.

• 借款人的信用評估和風險評估。如果借款人具有良好的財務實力，並且其年度財務報表已經 過註冊會計師的審計和認證，公司可以繼續使用借款人不到一年的信用報告和借款人當前的 註冊會計師審計和認證財務報告，以便支持其貸款決定。

• (3) When performing credit assessments on the borrower, the company must also evaluate the impacts on its operational risks, financial status, and shareholders' equity arising from lending the loan.

• 在對借款人進行信用評估時，公司還必須評估貸款對其經營風險、財務狀況及股東權益之影 響。

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

• (4) Determine whether collateral is needed and estimate the value of secured collateral. If the loan needs to be secured by collateral, then the borrower shall provide it accordingly. The company will ensure to create a pledge or lien against the collateral and to evaluate the value of the collateral. The collateral should be insured against fire or other hazards if necessary. To secure the company's debt entitlements, the amount of insurance coverage must not be lower than the collateral value, and the insurance policy must be underwritten as the company as the beneficiary.

確定是否需要抵押品並估計擔保抵押品的價值。如果貸款需要擔保抵押品，借款人應提供相 應的擔保抵押品。公司將確保對抵押品設定質押或留置權，並評估抵押品的價值。如有必要， 應為抵押品投保火險或相關保險。為保障公司的債權，保險金額不得低於抵押品價值，保險 單應註明以本公司為受益人。

1. All information stated above is required to be approved by Head of Division and Chief Executive Officer, and must be approved by the Board of Directors before proceeding If an independent director has any objections or reservations, he shall state them in the proceedings of the board of directors. The approval authority cannot be delegated to any other party. If the company has Independent Directors in place, the opinions of the Independent Directors must be fully taken into consideration. Any pros and cons of opinions made by Independent Directors must be shown in the Board of Directors meeting minutes. The company has set up an audit committee to formulate or amend the operating procedures for Management of Loans to others, which shall be agreed by more than one-half of all members of the audit committee and submitted to the board of directors for a resolution, and shall not apply the third provision. If the preceding paragraph has not been agreed by more than one-half of all the members of the Board of Auditors, the consent of more than two-thirds of the directors of the Board of Auditors shall prevail, and the resolution of the Board of Auditors shall be set forth in the proceedings of the Board of Directors. All members and directors of the Audit Committee referred to in the preceding paragraph shall be calculated by the actual incumbent.

上述所有資訊均須經部門主管及首席執行長批准, 並須經董事會批准後再進行。審批許可權不能委 派給任何其他方。如果公司有獨立董事, 則必須充分考慮獨立董事的意見，獨立董事如有反對意見 或保留意見，應於董事會議事錄載明。

本公司不擬將資金貸與他人者，得提報董事會通過後，免予訂定資金貸與他人作業程序。嗣後如欲 將資金貸與他人，仍應依前三項規定辦理。

本公司已設置審計委員會，訂定或修正資金貸與他人作業程序，應經審計委員會全體成員二分之一 以上同意，並提董事會決議，不適用第三項規定。

• 前項如未經審計委員會全體成員二分之一以上同意者，得由全體董事三分之二以上同意行之，並應 於董事會議事錄載明審計委員會之決議。

前項所稱審計委員會全體成員及全體董事，以實際在任者計算之。

1. Once the loan has been approved by the Board of Directors, the handling officer must notify the borrower as soon as possible of the lending terms, including the loan limit, tenor, interest rate, and collateral and guarantor requirements etc. The borrower shall be advised to sign contract within the given timeframe. If the Board of Directors does not approve the loan application, the handling officer will also respond to the borrower in writing as soon as possible to explain why the loan was rejected. 貸款經董事會準予後，經辦人員必須儘快通知借款人貸款條件，包括貸款額度、期限、利率、抵押 品和擔保人要求等，並通知借款人在 指 定的時間內簽署借貸合約。如果董事會不準予貸款申請，經 辦人員也將儘快書面答覆借款人，說明貸款被拒絕的原因。

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

1. Once the loan has been approved, the contracts has signed by the borrower, the collateral has been created as a pledge or lien, and all relevant procedures are completed without errors, the company may proceed to disburse funds.

2. 貸放條件經核准並經借款人簽妥合約，辦妥擔保品質(抵)押設定登記等，全部手續核對無誤後，即 可撥款。

3. A public company shall prepare a memorandum book for its fund-loaning activities and truthfully record the following information: borrower, amount, date of approval by the board of directors, lending/borrowing date, and matters to be carefully evaluated under paragraph 1 of the preceding Article.

公司辦理資金貸與事項，應建立備查簿，就資金貸與之對象、金額、董事會通過日期、資金貸放日 期及依前條第一項規定應審慎評估之事項詳予登載備查。

F) The authorized limits 權限

1. Before the company lends out its capital to others, it must conduct restrict assessments to determine if the transaction complies with ”Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” and the company's internal procedures on loans to others. The outcome of assessment under Article V, item2 must be provided to the Board of Directors for the final resolution; the approval authority cannot be delegated to any other party. 公司將公司資金貸與他人前，應審慎評估是否符合『公開發行公司資金貸與及背書保證處理準則』 及公司所訂資金貸與他人作業程序之規定，併同第五條第 2 項 之評估結果提董事會決議後辦理，不 得授權其他人決定。

2. Lending between the company and its parent company or subsidiaries, or lending subsidiaries among the same group, must be raised to the Board of Directors for its resolution. The Chief Executive Officer can be authorized to disburse loans in multiple drawdowns or on a revolving basis to the same borrower within a certain limit resolved by the Board of Directors for a period no more than one year.

3. 本公司與其母公司或子公司間，或其子公司間之資金貸與，應依前項規定提董事會決議，並得授權 董事長對同一貸與對象於董事會決議之一定額度及不超過一年之期間內分次撥貸或循環動用。

4. The term "certain limit" mentioned above, except for the one described in Article III, item 2, should follow the rules below. The limits authorized by the company or subsidiaries to a single business must not exceed 10% of the company's net value, as shown in the latest financial statements. 前項所稱一定額度，除符合第三條第2 項規定者外，公司或其子公司對單一企業之資金貸與之授權 額度不得超過該公司最近期財務報表淨值百分之十。

5. The company has Independent Directors in place, the Independent Directors' opinions toward the lending arrangement must be fully taken into consideration. Any pros and cons opinions made by Independent Directors must be shown in the Board of Directors meeting minutes . 本公司已設置獨立董事，必須充分考慮獨立董事對貸款安排的意見。獨立董事如有反對意見或保留 意見，應於董事會議事錄載明。

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

1. Loans to other companies amounting to more than certain figure are required to be approved by the group parent's Board of Directors before execution. The certain figure should be refer to “Limits of Authority”.

2. 向其他公司發放的貸款超過一定數額，須經集團母公司董事會准予後方可執行。具體數字應參考 “權限”。

G) Post-lending management and the procedures on overdue loans: 已貸與金額之後續控管措施、逾期債權處理程序

1. Once the loan has been disbursed, the company will monitor the financial status, the business performance, and the credibility of its borrower and guarantor. If the loan is secured by collateral, the change in collateral value is also subject to monitoring. The Chief Executive Officer needs to be informed immediately of any major changes, and the handling officer will carry out the Managing Director's instructions in the proper manner. Borrowers shall be notified of the amount of principal and interest due one month before loan maturity.

2. 貸款發放後，公司將對借款人和擔保人的財務狀況、經營業績和信譽進行監控。如果貸款由抵押品 擔保，抵押品價值的變化也要受到監控。如有重大變動，應立即通知首席執行官，並且處理官員將 以適當的方式執行總經理的指示。應向借款人通報貸款到期前一個月到期的本金和利息金額。

3. The amount of interest payable by the borrower must be calculated before repayment at maturity or prepayment before maturity. Only after the principal has been fully settled may the company revoke and return the promissory note, loan slip or other certificates of debt entitlement to the borrower, or remove encumbrances from the pledged collateral. If the borrower wishes to have all encumbrances removed from the collateral, the company must ensure that no outstanding balances exist before deciding whether to proceed with the removal.

4. 借款人應付利息的金額必須在到期還款或到期前提前還款前計算。只有在本金完全清償後，公司才 能撤銷承兌票據，貸款單或其他債權證書給借款人，或者從抵押品中取消產權負擔。如果借款人希 望從抵押物中移除所有產權負擔，在决定是否繼續移除之前，公司必須確保沒有未清餘額。

5. Borrowers must settle all outstanding principal and interest upon loan maturity. Borrowers who seek loan extensions due to their inability to make prompt repayment must submit a request for resolution by the Board of Directors before proceeding with the relevant procedures. If the borrower is unable to comply, the company may dispose of the pledged collateral and demand repayment from the guarantor.

借款人必須在貸款到期時結清所有未償本金和利息。借款人因不能及時還款而要求延期貸款的，必 須在辦理相關手續前提交董事會決議申請。借款人不能履行的，公司可以處分質押擔保物，並要求 擔保人返還。

H) Documentation of loans to others 案件之登記與保管

1. The finance unit of the company must maintain a registry of all loans granted. The registry will keep track of the borrower, the amount of loan, the Board of Directors resolution date, the effective date of loan, the lending conditions, and items that are subject to due diligence assessments under this policy.

公司財務部門必須保存所有發放貸款的登記。登記處將監督借款人、貸款金額、董事會決議日期、 貸款生效日期、貸款條件以及根據本政策進行盡職調查評估的項目。

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

1. Once the funds have been disbursed, the loan officer will file all certificates of debt entitlement such as contracts, promissory notes, etc., and the collateral documents, insurance policy, and correspondences etc., for future reference.

2. 貸放案件經辦人員對本身經辦之案件於撥貸後，提交所有債權證書，如合同，本票等，以及抵押文 件，保險單和通信等歸檔，以備將來參考。

I) Information disclosure 資訊應公告申報之時限及內容

1. The company is required to announce and report before the 10th calendar day each month the amount of loans granted by the company and its subsidiaries in the previous month. 公司應於每月 10 日前公告申報本公司及子公司上月份資金貸與餘額。

2. Loans that satisfy any of the following criteria under Article 22 of the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies" must be announced and reported within two days after the occurrence:

3. 符合『公開發行公司資金貸與及背書保證處理準則』第 22 條規定的以下任何標準的貸款，應於事 實發生日之即日起算二日內輸入公開資訊觀測站：

4. (1) When the amount lent by the company and by its subsidiaries to outsiders aggregates more than 20% of the company's net value, as shown in the latest financial statements. 本公司及子公司資金貸與他人之餘額達本公司最近期財務報表淨值百分之二十以上。

5. (2) When the amount lent by the company and by its subsidiaries to a single business aggregates more than 10% of the company's net value, as shown in the latest financial statements. 本公司及子公司對單一企業資金貸與餘額達本公司最近期財務報表淨值百分之十以上。

6. (3) When the additional lending made by the company or by its subsidiary aggregates more than NTD10 million and represents more than 2% of the company's net value, as shown in the latest financial statements.

本公司或其子公司新增資金貸與金額達新臺幣一千萬元以上且達該本公司最近期財務報表淨 值百分之二以上。

Any matters subject to announcements and regulatory reporting in item 1. and 2. above shall be made by parent company by reporting the relevant information to it.

上述第 1 項和第 2 項中公告和監管報告的任何事項均應由母公司向其報告相關信息。

1. The term "announcements and regulatory reporting" mentioned above involves inputting information into the reporting website designated by the Financial Supervisory Commission, Executive Yuan.

上述公告及監管報告，系指將資訊輸入行政院金融監督管理委員會指定之報告網站。

1. In the beginning of each month, the handling officer will compile a report on loans made to other companies in the previous month and circulate to the proper level of authority for its review and approval.

2. 每月月初，經辦人員將編制上 個 月 向 其他公司貸款情况的報告，並傳至適當的許可權級別，以供審 批。

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

J) Other important notes 其他重要事項

1. The company's internal audit staff must perform audits on loans to others at least on a quarterly basis, and produce written reports on audit findings. Any major violations must be notified immediately to each independent director in writing.

2. 公司內部稽核人員亦應至少每季稽核資金貸與他人作業管理辦法及其執行情形，並作成書面紀錄， 如發現重大違規情事，應立即以書面通知本公司稽核單位，本公司稽核單位應將書面資料送交各獨 。

3. 立董事

4. If the company is in the position of lending to the wrong parties or in excess of its authorized limits due to changes in the underlying circumstances, it must seek rectification and propose its plans to each independent director, and rectify according to plan proposed. 本公司因情事變更，致貸與對象不符本辦法規定或餘額超限時，稽核單位應督促財務部訂定改善計 畫，並將該改善計畫送各獨立董事，並依計畫時程完成改善。

5. The company shall comply with the Generally Accepted Accounting Principles to evaluate its loan portfolio and make adequate bad loan allowances. The company must also disclose properly all relevant information in its financial reports and provide any information necessary for certified public accountants to proceed with their audits.

6. 公司應評估資金貸與情形並提列適足之備抵壞帳，且於財務報告中適當揭露有關資訊，並提供相關 資料予簽證會計師執行必要之查核程序。

K) Controls on loans to others by subsidiaries 子公司資金貸與他人的控制

1. Subsidiaries who wish to make loans to others must establish their own policies on "Management of Loans to Others" based on the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies", and proceed according to its policies. 本公司之子公司若擬將資金貸與他人者，亦應訂定資金貸與他人作業管理辦法並依『公開發行公司 資金貸與及背書保證處理準則』辦理。

2. If a subsidiary wishes to lend funds to others, it must report to the company's Board of Directors for resolution in accordance with Article VI of the policy before proceeding. 若子公司若擬將資金貸與他人，必須按照本政策第六條的規定報公司董事會決議後，方可進行。

3. In the beginning of each month, the company's subsidiary will compile a registry on loans made to other companies in the previous month and circulate the report to the company. 子公司應於每月初以前編制上月份資金貸與其他公司明細表，並呈閱本公司。

4. While performing audits on the various subsidiaries according to the annual audit plan, the company's internal audit staff should also gain insights into the procedures adopted by subsidiaries when making loans to others. Internal audit staff will also follow up on rectifications toward any found weaknesses and report to the Board of Directors and to each Supervisor. 本公司稽核人員依年度稽核計劃至子公司進行查核時，應一併了解子公司資金貸與他人作業管理辦 法執行情形，若發現有缺失事項應持續追蹤其改善情形，並作成追蹤報告呈報總經理。

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1. For subsidiaries that are not listed, all matters subject to announcements and regulatory reporting under item IX of the policy shall be made by parent company. Among the announcements and reporting standards described above, the percentage of subsidiaries' loans to net value is calculated as the subsidiaries' outstanding balance proportionate to the company's net value. 未上市之子公司，其依本政策第九項規定須公告及申報之事項，均由母公司辦理。在上述公告和報 告標準中，子公司貸款占淨值的比例按子公司未償餘額占公司淨值的比例計算。

L) Penalties 罰則

1. Managers and handling officers who violate these procedures will be subject to regular assessments under the HR Policy and the Employee Manual, and penalties depending on the severity.

2. 本公司之經理人及主辦人員違反本作業程序時，依照本公司人事管理辦法與工作規則提報考核，依 其情節輕重處罰。

3. The company's internal audit staff must perform regular inspections and evaluations regarding compliance with this policy. Any major violations shall be reported to the Managing Director for disciplinary actions, and notified immediately to Supervisors in writing.

4. 公司內部審計人員必須定期對本政策的遵守情况進行檢查和評估。如有重大違規行為，應立即向執 行董事報告，並書面通知監事。

M) Implementation and revision 實施與修訂

Once the policy has been approved by the Board of Directors, it will be reported to the shareholders meeting for the final approval prior to execution.

本辦法經董事會通過，送各監察人並提報股東會同意後實施，如有董事表示異議且有紀錄或書面聲明者， 本公司應將其異議併送各監察人及提報股東會討論，修正時亦同。

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2019

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All Cosmos Bio- Tech Holdings Corporation

Board of Directors

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[INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES ENDORSEMENT AND GUARANTEES] THE INFORMATION CONTAIN HEREIN IS THE INTERNAL CONTROL POLICIES AND PROCEDURES FOR ALL COSMOS BIO- TECH HOLDING CORPORATION.

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

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背書保證管理辦法

MANAGEMENT OF ENDORSEMENTS AND GUARANTEES

DATE: 2019.06.19

A) Purposes 目的

These Procedures are adopted to establish standards for the Company’s related external endorsement/ guarantee. These Procedures are adopted pursuant to the Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies. The unclear concerns of these Procedures should be governed by related laws.

為建立公司相關對外背書 / 擔保的標準，特製定本辦法。本辦法依「公開發行公司資金貸與及背書保證 管理辦法」規定辦理。如有未盡事宜，另依相關法令之規定辦理。

B) Scope 範圍

The term “endorsements/guarantees” as used in these Procedures refers to the following: 本準則所稱背書保證係指下列事項：

1. Financing endorsements/guarantees, including bill discount financing; endorsement or guarantee made to meet the financing needs of another company; issuance of a separate negotiable instrument to a non-financial enterprise as security to meet the financing needs of the Company itself.

融資背書保證，包括：客票貼現融資 ; 為他公司融資之目的所為之背書或保證 ; 為本公司融資之 目的而另開立票據予非金融事業作擔保者。

1. Customs duty endorsement/guarantee, meaning an endorsement or guarantee for the Company itself or another Company with respect to customs duty matters.

2. 關稅背書保證，係指為本公司或他公司有關關稅事項所為之背書或保證。

3. Other endorsements/guarantees, meaning endorsements or guarantees beyond the scope of the above two subparagraphs.

4. 其他背書保證，係指無法歸類列入前二款之背書或保證事項。

5. Any creation by the Company of a pledge or mortgage on its chattel or real property as security for the loans of another company shall also comply with these regulations.

6. 公司提供動產或不動產為他公司借款之擔保設定質權、抵押權者，亦應依本準則規定辦理。

C) The beneficiaries of endorsements and guarantees 背書保證的受益人

• (1) The company may provide endorsements and guarantees to the following business parties: 本公司得對下列公司為背書保證：

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• i. Businesses with which the company has business dealings. 有業務往來之公司。

• ii. Businesses in which the company holds more than 50% direct or indirect voting interest. 公司直接及間接持有表決權之股份超過百分之五十之公司。

• iii. Businesses which hold more than 50% direct or indirect voting interest in the company. 直接及間接對公司持有表決權之股份超過百分之五十之公司。

• (2) Businesses in which the company holds more than 90% direct and indirect voting interest may provide endorsements and guarantees to each other. The amount of endorsements and guarantees must not exceed 10% of the net value of the company. This restriction does not apply to endorsements and guarantees among investees in which the public listed company holds 100% direct or indirect voting interest.

• 公司直接及間接持有表決權股份達百分之九十以上之公司間，得為背書保證，且其金額不得超過 公開發行公司淨值之百分之十。但公司直接及間接持有表決權股份百分之百之公司間背書保證， 不在此限。

• (3) For the company which need to provide guarantees to other peers or partners in a construction contract, or to investees in a joint investment arrangement, the endorsements and guarantees are not subject to the above 2 restrictions.

The investment arrangement mentioned above refers either to the direct contribution of capital by the company, or indirect contribution of capital through a 100% held subsidiary.

• 對於需要向建築合同中的其他同行或合作夥伴或共同投資安排的被投資方提供擔保的公司，背書 保證不受上述 2 項限制。

前項所稱出資，係指公司直接出資或透過持有表決權股份百分之百之公司出資。

• (4) The terms "subsidiary" and "parent company" mentioned above are defined in the Statement of Financial Accounting Standards No. 5 and No. 7 published by the Accounting Research and Development Foundation of the R.O.C.

• 上述所稱”子公司”和”母公司”係依中華民國會計研究發展基金會發佈之《財務會計準則》第 5 號和第 7 號報表中定義。

D) Limit for endorsement and guarantee 背書和保證的限額

• 1.The aggregate external endorsement/guarantee amount made by the Company for the nonsubsidiaries with an endorsement/guarantee is made due to needs arising from business dealings shall not exceed 100% of the Company’s net equity.

• 本公司因業務往來需要對外背書保證的非子公司，其對外背書保證總額不得超過公司淨權益的 100% 。

• The amount of the endorsements/guarantees made by the Company for any single non-subsidiary with an endorsement/guarantee is made due to needs arising from business dealings shall not exceed the trading amount between the two companies. The “total amount of trading” shall be the amount of the goods purchased or the amount of the goods sold, whichever is higher.

• 本公司為任何單一非附屬公司作出背書保證的背書保證金額，是因為業務交易產生的需求不得超過 兩家公司之間的交易金額。“交易總額”應為購買貨物的金額或出售貨物的金額，以較高者為准。

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• 3.The aggregate external endorsement/guarantee amount made by the Company for its subsidiaries shall not exceed 100% of the Company’s net equity.

本公司對其子公司的外部背書保證總額不得超過公司淨資產的 100 ％。

• 4.The amount of the endorsement/guarantee made by the Company for any single subsidiary shall not exceed 65% of the Company’s net equity.

本公司對任何單個子公司所做的背書保證金額不得超過公司淨資產的 65 ％。

• 5.The amount of the endorsement/guarantee made by the Company for any single entity related through Businesses who hold more than 50% direct or indirect voting interest in the company shall not exceed 65% of the Company’s net equity. The sum of all the company shall not exceed 100% of the Company’s net equity.

• 本公司對通過持有公司 50 ％以上直接或間接投票權益的企業相關的任何單一企業所作的背書保證金 額，不得超過公司淨資產的 65 ％。 所有公司的總和不得超過公司淨資產的 100 ％。

• 6.The restrictions above shall not apply to endorsements/guarantees made between the companies in which the Company holds, directly or indirectly, 100% of the voting shares, but the aggregate endorsement/guarantee amount shall not exceed 100% of the Company’s net equity or 65% for a single entity, and related matters shall be submitted to the next board meeting of the Company for future reference.

• 上述限制不適用於本公司直接或間接持有 100 ％有表決權股份的公司之間的背書保證，但整體的背 書保證金額不得超過公司淨資產的 100 ％或單一企業的 65% ，相關事宜應提交公司最近期董事會專 案備查。

• 7.If the aggregate amount of the endorsements/guarantees permitted to be made by the Company and its subsidiaries as a whole as adopted by the Company exceeds 50% of the Company’s net equity, the necessity and reasonableness thereof shall be explained in the shareholders meeting of the Company.

• 公司及其子公司同意背書保證的總額超過公司淨資產額 50% 的，應當在股東大會上說明其必要性和 合理性。

• All capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages. Each company shall not exceed 65% of the Company’s net equity. The sum of all the company shall not exceed 100% of the Company’s net equity.

• 各出資股東按持股比例對其共同投資的公司進行背書保證。公司淨資產額不得超過公司淨資產額的 65% 。公司全體股東的出資額不得超過公司淨資產額的 100% 。

E) Limits of authority 權限

• (1) All matters relating to the company's endorsements and guarantees shall proceed according to Article G of the procedures, and are subject to approval by the board of directors. 與公司背書和保證有關的所有事項，應按照程序第 G 條進行，並須經董事會批准。

• (2) Endorsements or guarantees to outsiders amounting to certain number are subject to approval by the group parent's board of directors before execution, in accordance with “Limits of Authority”. 根據“權限的限制”，對外背書或保證金額達到一定數量的，必須經集團董事會在執行前批准。

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F) Procedures for executing and reviewing endorsements and guarantees 執行和審查背書保證的程序

• (1) The execution unit

The Finance Unit is responsible for executing the company's endorsements and guarantees. The Managing Director may appoint other employees to assist in the execution if necessary. The company's major commitments and contingencies must be handled by dedicated staff in written records to monitor and track their likely impacts.

財務部門負責執行公司的背書保證。 如有必要，總經理可指定其他員工協助執行。 公司的主要 承諾和突發事件必須由專職人員以書面記錄處理，以監控和跟蹤其可能的影響。

• (2) The review procedures

All endorsements and guarantees provided by the company are subject to reviews and evaluations. The evaluation reports must cover the following aspects:

公司提供的所有背書和保證均需經過審查和評估。 評估報告必須包括以下方面：

• i. The necessity and rationality of endorsements and guarantees.

  • 背書和保證的必要性和合理性 。

• ii. Determine whether the endorsement or guarantee is necessary by assessing the financial status of the endorsed or the guaranteed.

  • 通過評估被背書人或被保證人的財務狀況，確定背書或擔保是否必要。

• iii. Monitor whether the cumulative endorsement and guarantee amount is still within limit. 監控累計背書保證金額是否仍在限額內。

• iv. For endorsements and guarantees that are provided to facilitate business dealings, determine whether the amount is equivalent to the underlying business transaction. 因業務往來關係從事背書保證，應明定背書保證金額與業務往來金額是否相當之評估標準。

• v. Credit assessment and risk evaluation on the endorsed or the guaranteed. 背書保證對象之徵信及風險評估。

• vi. Impacts to the company's operational risks, financial status, and shareholders' equity. 對公司之營運風險、財務狀況及股東權益之影響。

• vii. Whether collateral is needed and the estimated value of secured collateral. 應否取得擔保品及擔保品之評估價值。

• (3) The Finance Unit must maintain a registry of all endorsement and guarantee details. The registry will keep track of the endorsed and the guaranteed, the underlying commitments, the amount of endorsements or guarantees, the board of directors resolution date, the effective date of endorsements or guarantees, the conditions for relieving endorsement and guarantee obligations, and items that are subject to due diligence assessments under Article 7, item 2 of the policy. 財務部門必須保留所有背書和保證細節的登記。 登記處將跟蹤背書和保證，相關承諾，背書或保 證金額，董事會決議日期，背書或保證生效日期，解除背書和保證義務的條件，以及根據政策第

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7 條第 2 項進行盡職調查。

• (4) The company shall prepare a memorandum book for its endorsement/guarantee activities and record in detail the following information for the record: the entity for which the endorsement/guarantee is made, the amount, the date of passage by the board of directors or of authorization by the chairman of the board, the date the endorsement/guarantee is made, and the matters to be carefully evaluated under paragraph 1 of the preceding article. 公司辦理背書保證事項，應建立備查簿就背書保證對象、金額、董事會通過或董事長決行日期、 背書保證日期及依前條第一項規定應審慎評估之事項，詳予登載備查。

G) Procedures for the use and custody of common seals 使用和保管印鑑章程序

The company shall provide a common seal specifically for endorsements and guarantees. That common seal must be held in custody by someone authorized by the board of directors. The use of seal is subject to compliance with the company's "Management of the Use of Seals". For guarantees to foreign companies, the letter of guarantee must be signed by someone authorized by the board of directors.

公司應提供專門用於背書保證的公司印鑑章。 該印鑑章必須由董事會授權的人員保管。 該印鑑章 的使用須遵守公司的“印鑑管理制度”。對國外公司為保證行為時，公司所出具之保證函應由董事 會授權之人簽署。

H) Announcement and reporting procedures 公告和申報程序

• (1) The company is required to announce and report before the 10th calendar day each month the amount of revenues generated by the company and its subsidiaries, and the outstanding amount of endorsements and guarantees provided by the company and its subsidiaries, in the previous month. 公司應於每月十日前公告申報上月份公司及其子公司實际的收入額及公司和子公司上月份背書保證 餘額。

• (2) Apart from the monthly announcement and reporting of endorsement and guarantee balances, endorsements or guarantees that satisfy any of the following criteria must also be announced and reported within two days after the occurrence.

• 除每月公告申報背書保證餘額外，公司背書保證達下列標準之一者，應於事實發生日之即日起算二 日內公告申報：

• i. When the outstanding amount of endorsements and guarantees provided by the company and its subsidiaries amount to more than 50% of the company's net value, as shown in the latest financial statements.

公司及其子公司背書保證餘額達本公司最近期財務報表淨值百分之五十以上。

• ii. When the amount of endorsements and guarantees provided to a single business by the company and its subsidiaries amount to more than 20% of the company's net value, as shown in the latest financial statements.

• 公司及其子公司對單一企業背書保證餘額達本公司最近期財務報表淨值百分之二十以上。

• iii. When the amount of endorsements and guarantees provided to a single business by the company and its subsidiaries aggregate to more than NTD10 million, and the amount of endorsements,

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guarantees, carrying value of equity method investments, and loans to the business amount to more than 30% of the company's net value, as shown in the latest financial statements.

公司及其子公司對單一企業背書保證餘額達新臺幣一千萬元以上且對其背書保證、採用權益法之投 資帳面金額及資金貸與餘額合計數達本公司最近期財務報表淨值百分之三十以上。

• iv. When the additional endorsement or guarantee undertaken by the company or its subsidiary amounts to more than NTD30 million and represents more than 5% of the company's net value, as shown in the latest financial statements.

  • 公司或其子公司新增背書保證金額達新臺幣三千萬元以上且達本公司最近期財務報表淨值百分之五 以上。

• (3) For subsidiaries that are not listed in any domestic public exchanges, all matters subject to announcements and regulatory reporting (4) above shall be made by the company. 公司之子公司非屬國內公開發行公司者，該子公司有前項第四款應公告申報之事項，應由本公司為 之。

I) Internal audit 內部稽核

The company's internal audit staff must perform audits on endorsement and guarantee procedures at least on a quarterly basis, and produce written reports on audit findings. Any major violations must be notified immediately to each independent director in writing.

公司之內部稽核人員應至少每季稽核背書保證作業程序及其執行情形，並作成書面紀錄，如發現重大違 規情事，應即以書面通知各獨立董事。

J) Monitoring procedures for endorsements and guarantees tendered by subsidiaries 子公司的背書保證監控程序

• (1) Should any of the company's subsidiaries be required to provide endorsements or guarantees to outsiders, the company must supervise its subsidiaries in establishing endorsement and guarantee procedures according to the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies".

• 如公司的任何子公司需要對外提供背書或保證的，必須按照上市公司提供《公開發行公司資金貸與 及背書保證處理準則》的規定，監督其子公司建立背書和保證程式。

• (2) All subsidiaries must seek approval from the company's board of directors before providing endorsements or guarantees to outsiders. The company's Finance Unit and Managing Director will appoint dedicated personnel to evaluate the necessity, rationality, and riskiness of each endorsement or guarantee, and determine the likely impacts to the parent company and its subsidiaries with regard to operational risks, financial status, and shareholders' equity. These evaluations are subject to approval by the board of directors.

• 所有子公司對外提供背書或保證，必須經公司董事會准予。公司財務部門和總經理將指定專門人員 對每一項背書或保證的必要性、合理性和風險性進行評估，並確定可能對母公司及其子公司的經營 風險、財務狀況和股東權益方面可能產生的影響。這些評估須經董事會准予。

• (3) The Finance Unit needs to obtain a report on changes in subsidiaries' endorsements and guarantees to outsiders in the beginning of each month.

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財務部門每月月初需取得子公司對外背書和保證情况變更報告。

• (4) While performing audits on the various subsidiaries according to the annual audit plan, the company's internal audit staff should also gain insights to the procedures adopted by subsidiaries when providing endorsements and guarantees to others. Internal audit staff will also follow up on rectifications toward any found weaknesses and report to the Managing Director.

• 公司內部稽核人員根據年度稽核計畫對各子公司進行稽核時，還應當瞭解子公司為他人提供背書和 保證的程序。內部稽核人員也將跟進已發現的缺失的糾正措施，並向總經理報告。

K) Penalties 處罰

Any violations by the company's managers or officers in undertaking endorsements and guarantees are subject to disciplinary actions depending on the severity. Employees' violation records need to be taken into consideration during their individual performance reviews. The line manager of the violator will also receive penalties, except in circumstances where it can be demonstrated that adequate precautions have been taken in advance. For any violations against company policies or shareholders meeting resolutions by the board or its directors, the independent directors have the responsibilities to demand the board or its directors cease such conducts according to Section 218-2 of The Company Act.

公司經理或管理人員在進行背書和保證時的任何違反行為都將根據嚴重程度受到紀律處分。員工的違規 記錄需要在個人績效考核中加以考慮。違規者的直屬經理也將受到處罰，除非可以證明已經提前採取了 足够的預防措施。對於任何違反公司政策或董事會或其董事會議決議的行為，獨立董事有責任根據《公 司法》第 218-2 條要求董事會或其董事停止此類行為。

L) Other relevant notes 其他相關說明

• (1) If the company is in the position of providing endorsements or guarantees to the wrong parties or in excess of its authorized limits due to changes in the underlying circumstances, it must seek rectification and propose its plans to each independent director.

• 公司因情事變更，致背書保證對象不符本準則規定或金額超限時，應訂定改善計畫，並向各獨立董 事提出方案。

• (2) If the company is in need of undertaking endorsements or guarantees in excess of the limits specified in the Management of Endorsements and Guarantees due to business requirements, while in the meantime satisfying all relevant criteria specified in the Management of Endorsements and Guarantees, the company may proceed with the endorsement/guarantee subject to the board of directors' agreement with more than half of all board members jointly guaranteeing the likely losses to the company due to the excess. The company must also revise its Management of Endorsements and Guarantees and seek acknowledgment during the shareholders meeting; if shareholders do not agree to the revision, the company must arrange to have the excess eliminated within a given period.

公司辦理背書保證因業務需要，而有超過背書保證作業程序所訂額度之必要且符合公司背書保證作 業程序所訂條件者，應經董事會同意並由半數以上之董事對公司超限可能產生之損失具名聯保，並 修正背書保證作業程序，報經股東會追認之；股東會不同意時，應訂定計畫於一定期限內銷除超限 部分。

M) Settlement and relief of endorsement and guarantee obligations 背書保證的結算和免除

INTERNAL CONTROL POLICIES AND PROCEDURES – PROCEDUAL RULES OF LOANS TO OTHERS

2019

The company must assign dedicated personnel or someone from the Finance Unit to document the settlement or relief of all endorsements, guarantees, commitments, and contingencies. The responsible personnel will also proceed with the follow-up tracking to ensure proper management and the accuracy of maintained information.

公司必須指派專人或財務部門的人員記錄所有背書、保證、承諾和或突發事件的結算或免除。負責人還 將繼續跟蹤，以確保正確管理和維護資訊的準確性。

N) Supplementary notes on regulations 法規補充說明

Any matters that are not addressed in these procedures shall be governed by the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies". 如有未盡事宜，依《公開發行公司資金貸與及背書保證處理準則》規定辦理。

O) Implementation and amendment 實施和修訂

Once the policy has been approved by the Board of Directors, it will be reported to the shareholders meeting for the final approval prior to execution. The same applies to all subsequent revisions. 政策經董事會准予後，報股東大會最終准予後執行。這同樣適用於所有後續修訂。

P) Subsidiary with net worth lower than half of its paid-up capital

淨值低於實收資本額二分之一之子公司

The management of the object of the endorsements and guarantees being a subsidiary with a net worth lower than half of its paid-up capital:

對背書保證對象若為淨值低於實收資本額二分之一之子公司的管理：

(1) If the object of the endorsement and guarantees is a subsidiary having a net worth lower than half of its paid-up capital, the subsidiary should, on regular basis, prepare an operation report and a ratification, and shall submit them to the parent company and complete the ratification according to the timeframe set out in the plan.

背書保證對象若為淨值低於實收資本額二分之一之子公司的，則子公司應定期編制經營報告和批准書，並 將其提交給母公司和根據計劃中規定的時間表完成批准。

(2) The paid- up capital of the subsidiary with shares which have no par value or have a par value other than NT$10 shall refer to the sum of the share capital plus capital reserves minus the original issue premium. 子公司股票無面額或每股面額非屬新臺幣十元者，系指股本加資本公積减除原發行溢價之合計數為之。