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ASCENT AGM Information 2022

Aug 11, 2022

51802_rns_2022-08-11_24561bc3-fed6-46a3-bd62-c295829074e5.pdf

AGM Information

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Stock Code: 1439

CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.

2022 Shareholders’ Meeting

Meeting Handbook

Time: June 23, 2022 (Thursday) 9 am

Venue: B2, No. 108, Sec. 1, Dunhua South Road, Taipei City (Fubon International Conference Center).

TABLE OF CONTENTS

Page No.

MEETING PROCEDURES.............................................................................................................. 1 MEETING PROCEDURES.............................................................................................................. 1
MEETING AGENDA....................................................................................................................... 2
I. Report items....................................................................................................................... 3
II. Matters for ratification....................................................................................................... 4
III. Matters for discussion........................................................................................................ 5
IV. Elections ............................................................................................................................ 7
V. Other Matters ..................................................................................................................... 8
VI. Extraordinary Motions....................................................................................................... 8
VII. Adjournment ...................................................................................................................... 8
ATTACHMENT ............................................................................................................................... 9
I. 2021 Business Report ........................................................................................................ 9
II. Audit Committee's Report ............................................................................................... 12
III. 2021 Auditor's Report and Financial Statements ............................................................ 13
IV. 2021 Earnings Distribution Table ................................................................................... 35
V. Table of Comparison of “Rules of Procedure for Shareholders’ Meeting”. ................... 36
VI. Table of Comparison of “Procedures for Acquisition or Disposal of Assets” ................ 52
VII. Table of Comparison of the Company’s Articles of Incorporation................................. 64
VIII.Candidate list of directors and independent directors ..................................................... 69
IX. Concurrent positions of director candidates in other companies..................................... 71
APPENDIX ..................................................................................................................................... 73
I. Articles of Incorporation ................................................................................................. 73
II. Rules of Procedure for Shareholders’ Meeting ............................................................... 78
III. Procedures for Acquisition or Disposal of Assets ........................................................... 85
IV. Procedures for Election of Directors ............................................................................. 106
V. Shareholding status of directors .................................................................................... 109

Chuwa Wool Industry Co., (Taiwan) Ltd.

2022 Shareholders’ Meeting Procedures

  1. Meeting Commencement

  2. Chairperson's Remarks

  3. Report items.

  4. Matters for ratification

  5. Matters for discussion

  6. Elections

  7. Other matters

  8. Extraordinary Motions

  9. Adjournment

- 1 -

Chuwa Wool Industry Co., (Taiwan) Ltd.

2022 Shareholders’ Meeting Agenda

Time: June 23, 2022 (Thursday) 9am

Venue: B2, No. 108, Sec. 1, Dunhua South Road, Taipei City (Fubon International Conference

Center).

Method of meeting: Physical shareholders' meeting

  1. Meeting Called to Order (announce respective number of shares held by shareholders present)

  2. Chairperson's Remarks

  3. Report Items

  4. (1) 2021 Business Report.

  5. (2) 2021 Financial Statements reviewed by the Audit Committee.

  6. (3) 2021 Distribution of Employees’ Remuneration and Directors’ Remuneration.

  7. (4) 2021 Earnings Distribution.

  8. (5) Other matters to be reported.

  9. Matters for ratification

  10. (1) 2021 Business Report and Financial Statements.

  11. (2) 2021 Earnings Distribution Proposal.

  12. Matters for Discussion

  13. (1) Amendment to the “Rules of Procedure for Shareholders’ Meeting”.

  14. (2) Amendment to the “Procedures for Acquisition and Disposal of Assets”.

  15. (3) Amendment to the “Company's Articles of Incorporation”.

  16. Elections

  17. Reelection of directors

  18. Other Matters

Waiver of non-competition clauses for newly elected directors.

  1. Extraordinary Motions

  2. Adjournment

- 2 -

Report items

Proposal 1: 2021 Business Report.

Description: For the 2021 Business Report, please refer to Attachment 1 of the Handbook.

Proposal 2: 2021 Financial Statements reviewed by the Audit Committee.

Description: For the 2021 Financial Statements reviewed by the Audit Committee, please refer to Attachment 2 of the Handbook.

Proposal 3: 2021 Distribution of Employees’ Remuneration and Directors’ Remuneration.

Description:

  1. 2021 profit before tax and before deducting distribution of employees’ remuneration and directors' remuneration was NT$136,506,164; it is proposed to set aside 0.5% amounting to NT$682,531 as employees’ remuneration, and 0.5%, amounting to NT$682,531 as directors' remuneration, to be distributed in cash.

  2. The above proposed employees’ remuneration and directors' remuneration are consistent with the estimated amounts in the accounts of 2021, hence no adjustment is required.

Proposal 4: 2021 Earnings Distribution Proposal.

Description:

  1. The Company proposes to distribute NT$18,400,000 as shareholders dividends in 2021 Q4 at NT$0.2 per share in cash, and authorizes the Chairman to set the record date and allotment date, and handle other related matters.

  2. Cash dividends will be calculated pro rata and rounded down to the nearest New Taiwan Dollar, with the sum of all fractional dividends below one New Taiwan Dollar being recognized as other income.

Proposal 5: Other Matters to be Reported.

Description:

Shareholder Proposals in 2022 Shareholders’ Meeting

The Company has in accordance with Article 172-1 of the Company Act, made a public announcement of the acceptance of shareholder proposal, and from April 15, 2022 to April 25, 2022, no shareholder proposals were received.

- 3 -

Matters for ratification

Proposal 1: (Proposed by the board of directors)

Proposal: Ratification of 2021 business report and financial statements.

Description:

  1. The 2021 Consolidated Financial Statements were audited by certified public accountants Hsiao, Chun-Yuan and Lin, Se-Kai of PricewaterhouseCoopers, Taiwan, and an audit report has been issued.

  2. For the 2021 business report, auditors' report and financial statements, please refer to Attachment 1 and Attachment 3.

  3. Please ratify.

Resolution:

Proposal 2: (Proposed by the board of directors)

Proposal: Ratification of 2021 earnings distribution proposal.

Description:

  1. The 2021 net income after tax amounted to NT$128,273,533, and a distribution of earnings is proposed according to the Articles of Incorporation, please refer to Attachment 3 of the Handbook.

  2. Please ratify.

Resolution:

- 4 -

Matters for discussion

Proposal 1: (Proposed by the board of directors)

Proposal: Amendment to the “Rules of Procedure for Shareholders’ Meeting”

Description:

  1. In response to the amendment to Article 172-2 of the Company Act, stipulating that public listed companies may hold its shareholders’ meeting by means of visual communication, the relevant regulations of the Company’s Rules of Procedure for Shareholders’ Meeting are amended by referencing the “Sample Template for XXX Co., Ltd. Rules of Procedure for Shareholders Meetings Submit” issued by the Securities and Exchange Act in its announcement, Tai-Zheng-Ji-Li No. 1110004250, dated March 8, 2022.

  2. Please refer to Attachment 5 of this Handbook for the Table of Comparison of “Rules of Procedure for Shareholders’ Meeting”.

  3. Please discuss.

Resolution:

Proposal 2: (Proposed by the board of directors)

Proposal: Amendment to the “Procedures for Acquisition and Disposal of Assets”.

Description:

  1. According to Letter Jin-Guan-Zheng-Fa No.1110380465 dated January 28, 2022 and in line with the new business direction, the Company seeks diversified investment development, and hence it is proposed that some provisions of the “Procedures for Acquisition and Disposal of Assets” be amended.

  2. Please refer to Attachment 6 for the Table of Comparison of “Procedures for the Acquisition or Disposal of Assets”

  3. Please discuss.

Resolution:

Proposal 3: (Proposed by the board of directors)

Proposal: Amendment to the “Articles of Incorporation”.

- 5 -

Description:

  1. In order to comply with the Company’s future business development plan, it is proposed to amend Article 1 of the Company’s “Articles of Incorporation”, by renaming the Company’s Chinese name to “ 雋揚國際股份有限公司 ”, and its English name to “ASCENT DEVELOPMENT CO., LTD.”; and in line with the Company’s operations and actual fund usage, it is proposed to amend Article 2 and Article 18-1.

  2. In order to allow more flexibility in convening the shareholders’ meeting, it is proposed to amend Article 8-1 of the Company’s “Articles of Incorporation”.

  3. Please refer to Attachment 7 of this Handbook for the Table of Comparison of the Articles of Incorporation.

  4. Please discuss.

Resolution:

- 6 -

Elections

Proposal: Reelection of directors

(Proposed by the board of directors)

Description:

  1. The term of the Company’s current directors will end on February 16, 2023. Considering the Company’s operations and business needs, it is proposed that the re-election of the directors be brought forward.

  2. According to Article 11 of the Company’s Article of Incorporation, seven directors, comprising three independent directors will be elected. The newly elected directors will take office from the date of election for a term of three years from June 23, 2022 to June 22, 2025, and the current directors will retire when the new directors take office.

  3. Nominees for the directors and independent directors have been reviewed and approved by the board meeting on May 11, 2022; please refer to Attachment 8 of the Handbook.

  4. For the Procedures for Election of Directors , please refer to Appendix 4 of the Handbook.

  5. Please conduct the election.

Election results:

- 7 -

Other Matters

Proposal: Proposal for the waiver of non-competition clauses for newly elected directors.

(Proposed by the board of directors)

Description:

  1. Article 209 of the Company Act stipulates that directors shall brief actions they are going to take within the scope of the Company's business operation for themselves or for others in the shareholders' meetings and obtain permission.

  2. To leverage the expertise and applicable experiences of the directors, and without jeopardizing the interest of the Company, it is proposed to waive the non-competition clauses for the newly elected directors and representative of juristic person directors during the shareholders meeting. For information of the nominees of the Company’s directors concurrently holding positions in other companies, please refer to Attachment 9 of the Handbook.

  3. Please discuss.

Resolution:

Extraordinary Motions

Adjournment

- 8 -

[Attachment I]

Chuwa Wool Industry Co., (Taiwan) Ltd.

2021 Business Report

Dear Shareholders,

First of all, I’d like to thank you for spending the time to read the 2021 Financial Report of Chuwa Wool Industry Co., (Taiwan) Ltd.

The consolidated revenue of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries was 78,799 thousand NT$ in 2021, a drop of 30.34% compared to 113,119 thousand NT$ in 2020.

Since the outbreak of the new coronavirus in March 2020, the global economy has suffered a major impact, and the demand for wool has significantly declined. Though the price of wool has gradually picked up from the lowest point in August 2020, between the current price and the pre-pandamic price. In 2021, the Company’s wool top sale volume was 213,000 kg, a decrease of 23.18% compared to 2020.

Looking forward to2022, though vaccinations are available for the new coronavirus, the virus continues to mutate which reduces the effectiveness of the vaccine. Also, the Russia-Ukraine war which ignited at the beginning of the year and the geopolitical conflicts had deepened the negative impact of the economy, and may delay the recovery of the global economy. The Company continues to take a cautious attitude towards the future development status. In view of the current decline in wool market demand, it will be committed to the expansion of real estate leasing and sale, and seek opportunities for diversified development.

The Company’s 2021 operating results and 2022 outlook report are as follows:

  1. 2021 Operating Performance

  2. (1) Business plan implementation results:

The Company’s 2021 consolidated revenue was 78,799 thousand NT$, consolidated profit for the period was 128,274 thousand NT$ (attributable to owners of the parent), and the consolidated comprehensive loss for the period was 90,666 thousand NT$ (attributable to owners of the parent).

  • (2) Budget Implementation

The Company did not announce its 2021 financial forecast, and hence there are no budget achievements.

- 9 -

  • (3) Financial Gains and Loss and Profitability

  • 2021 financial gains and losses

Unit: Thousand NT$

Unit: Thousand NT$
Item Amount
Operating revenue 78,799
Operating costs (78,771)
Gross profit 28
Operating expenses (28,155)
Operating loss (28,127)
Net non-operating income and expenses 167,403
Net profit before tax 139,276
Net profit after tax 128,274

2. 2021 Profitability

2021 Profitability
Item 2021
Financial
structure
(%)		 Debt asset ratio 21.60
Ratio of long-term capital to property, plant
and equipment		 1,180,674.48
Solvency
(%)		 Current ratio 261.37
Quick ratio 124.51
Interest coverage ratio 23,213.67
Profitability Return on assets (%) 4.84
Return on equity (%) 5.70
Pre-tax income to paid-in capital ratio (%) 15.14
Net profit margin (%) 162.79
Earnings per share (NT$) 1.39
  • (4) Research and Development Overview

The Company has no research and development activities and expenditure in 2021.

- 10 -

  1. 2022 Business Plan and Operations Strategies

  2. Expansion of real estate leasing and sales business.

  3. Seek diversified development opportunities.

  4. Impact of Competitive, Regulatory, and Operating Environments

In recent years, the wool market has been seriously challenged by man-made fibers, and its profit is being constantly eroded. The increasing awareness of environmental protection and labor rights, coupled with global maritime traffic jam, has led to the increasing cost of wool, which is not conducive to the development of the industry. In terms of the overall economic environment, the new coronavirus continues to mutate, seriously impacting the global supply chain. As a result, the global economy is still not able to recover to its pre-pandemic prosperity. In early 2021, the Russia- Ukraine border war resumed, igniting the great power diplomatic rivalry of the United States, Europe, Russia and China, and worsening the global economy. In light of the high in certainty of the external environment, the Company will adhere to a stable and conservative business approach.

  1. Company’s Future Development Strategies

In the future, besides devoting itself in the expansion of real estate leasing and sales, the Company will also actively seek and assess the opportunities in investing in other businesses other than wool products, adopting a diversified development strategy. In addition, the Company will actively participate in projects with investment values to create maximum benefits for its shareholders.

Lastly, I wish you

Great health and happiness

Chairman: Hou, Chia-Chi Manager: Liu, Hsien-Wen Accounting Manager: Lo, Chien-Chang

- 11 -

[Attachment 2]

Chuwa Wool Industry Co., (Taiwan) Ltd.

Audit Committee's Report

The board of directors has prepared and submitted the 2021 business report, financial statements (including consolidated and standalone financial statements), and earnings distribution proposal, of which the financial statements (including consolidated and standalone financial statements) have been audited by certified public accountants Hsiao, Chun-Yuan and Lin, Se-Kai of PricewaterhouseCoopers, Taiwan, and an audit report has been issued. The Audit Committee has reviewed the aforementioned business report, financial statements and earnings distribution proposal, and did not find any instances of noncompliance. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, it is hereby submitted for your review and perusal.

To:

2021 Shareholders’ Meeting

Chuwa Wool Industry Co., (Taiwan) Ltd.

Audit Committee convener: Liu, Teng-Cheng

March 23, 2022

- 12 -

[Attachment 3]

Auditor's Report

(111)Cai-Shen-Bao-Zi No.21005130

To the shareholders of Chuwa Wool Industry Co., (Taiwan) Ltd.:

Audit opinion

We have audited the accompanying consolidated balance sheets of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries as of December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity and of cash flows for the period from January 1, 2021 and 2020 to December 31, 2021 and 2020; and notes to the consolidated financial statements, including a summary of significant accounting policies.

In the opinion of the auditor, based on the audit results of the auditor and the audit reports of other auditors (please refer to Other Matters), the consolidated financial statements referred to above, present fairly in all material aspects, the consolidated financial position of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries as of December 31, 2021 and 2020, and the consolidated financial performance and consolidated cash flows from January 1, 2021 and 2020 to December 31, 2021 and 2020, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, and Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with the code. Based on the audit results of the auditors and the audit reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 2021 consolidated financial statements of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

- 13 -

The key audit matters of the 2021 consolidated financial statements of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries are as follows:

Impairment evaluation of equity method investments

Description

For accounting policies relating to equity method investment, please refer to Note 4(15) of the Consolidated Financial Statements; for accounting policies relating to impairment of non-financial assets, please refer to Note 4(21) of the Consolidated Financial Statements; for details of accounts, please refer to Note 6(8) of the Consolidated Financial Statements.

As of December 31, 2021, the carrying amount of the equity method investment of Chuwa Wool Industry Co., (Taiwan) Ltd. amounts to NTD965,501,000, which is 33% of the consolidated assets. For investments accounted for using the equity method according to the regulations of IAS 28 "Investments in Associates and Joint Ventures", if there is objective evidence of indications of impairment, the management shall evaluate whether the investment's recoverable amount is lower than the carrying amount. As the objective evidence of the impairment evaluation and the comprehensive consideration factors in determining the recoverable amount involve the subjective judgment of the management are highly uncertain, and the amount of equity method investment is high, we have listed the impairment evaluation on the related equity method investment of Chuwa Wool Industry Co., (Taiwan) Ltd. as one of the most significant matters in the audit. How our audit addressed the matter

With regards to the specific aspects as stated in the above key audit matters, we have executed the following response procedures:

  1. Interview the management to understand the management's assessment of the impairment indications of the equity method investments, and evaluate its reasonableness.

  2. Obtain equity valuation report prepared by the external evaluation experts delegated by the management; the procedures performed by auditors for which the work is used by the internal evaluation experts are as follows:

  3. (1) Evaluate the appropriateness and objectivity of the external evaluation experts delegated by the management.

  4. (2) Evaluate the appropriateness of the evaluation methods and objectivity of the relevant assumptions adopted by the external evaluation experts delegated by the management.

Other matters– The work of other auditors

The 2021 and 2020 financial statements of the equity method investments of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries are not audited by us but by other auditors. Hence, in the opinion expressed by us on the above consolidated financial statements, the amount listed and in the financial statements of these companies and information disclosed in Note 13 are based on the audit report of other auditors. As of December 31, 2021 and 2020, equity method investments of the respectively above mentioned companies were NTD965,501,000 and NTD664,067,000, accounting to 33% and 28% of consolidated assets; in 2021 and 2020, the comprehensive income recognized for the above mentioned companies were NTD8,371,000 and NTD8,371,000, accounting to 88% and 7% of comprehensive income for the current period.

- 14 -

Other matters– Standalone Financial Report

Chuwa Wool Industry Co., (Taiwan) Ltd. has prepared the 2021 Standalone Financial Report, for which the auditors have issued an audit report with an unqualified opinion and Other Matters paragraph.

Responsibilities of management and those charged with governance for the financial statements

The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the abilities of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management intends to liquidate Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries or to cease its operations, or has no realistic alternative but to do so.

Those charged with governance (including the audit committee) are responsible for overseeing the financial reporting process of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material. if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

- 15 -

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error; design and implement appropriate response measures for the risk assessed; and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements (including the disclosures) and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings (including any significant deficiencies in internal control that we identify during our audit).

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence (and where applicable, related safeguards).

- 16 -

From the matters communicated with those charged with governance, we determine those matters that were of most significance to Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries in the audit of 2021 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

PwC Taiwan

Hsiao, Chun-Yuan

Certified public accountants

Lin, Se-Kai

Former Securities and Futures Bureau, Financial Supervisory Commission No. of Approval Document: Jin-Guan-Zheng-Liuo-Zi No. 0960042326 Jin-Guan-Zheng-Liuo-Zi No. 0960072936

March 23, 2022

- 17 -

Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries CONSOLIDATED BALANCE SHEETS December 31, 2021 and 2020

Unit: Thousand NTD

Assets Notes
6(1)
6(2)
6(3)
6(3)
7
6(4)(5)
6(6)
6(7)
6(8)
6(9)
6(10)
6(24)		 December 31, 2021
Amount
%
$ 753,473
26
-
-
20,000
1
260
-
2,615
-
105
-
-
-
109
-
851,534
29
2,134
-
6
-
1,630,236
56
159,190
6
965,501
33
192
-
46
-
131,509
5
-
-
395
-
407
-
3,790
-
1,261,030
44
$ 2,891,266
100		 December 31, 2020 December 31, 2020
Amount
$ 753,473
-
20,000
260
2,615
105
-
109
851,534
2,134
6
1,630,236
159,190
965,501
192
46
131,509
-
395
407
3,790
1,261,030
$ 2,891,266
Amount
$ 831,182
18,978
20,000
845
10,884
256
37,722
3,478
243,129
12,580
6
1,179,060
424,283
664,067
216
79
133,580
6
429
418
3,790
1,226,868
$ 2,405,928		 %
Current assets
1100
Cash and cash equivalents
1110
Financial assets measured at fair
value through profit or loss - current
1136
Financial assets measured at
amortized cost - current
1150
Net notes receivable
1170
Net accounts receivable
1200
Other receivables
1210
Other receivables - related parties
1220
Current income tax assets
130X
Inventories
1410
Prepayments
1470
Other current assets
11XX
Total current assets
Non-current assets
1517
Financial assets measured at fair
value through other comprehensive
income - non-current
1550
Investments recognized under the
equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Net investment properties
1780
Intangible assets
1840
Deferred income tax assets
1920
Refundable deposits
1990
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets
35

1
1
-
-
-
2
-
10

-
-
49

18
28
-
-
5
-
-
-
-
51

100

(Continued)

- 18 -

Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries CONSOLIDATED BALANCE SHEETS December 31, 2021 and 2020

Unit: Thousand NTD

Liabilities and equity December 31, 2021
Notes
Amount
%
6(5)(11)
$ 607,820
21
2,595
-
8,723
1
4,135
-
6(9)
34
-
415
-
623,722
22
6(24)
13
-
6(9)
13
-
623
-
649
-
624,371
22
6(13)
920,000
32
6(14)
145,021
5
6(15)
341,774
12
7,856
-
949,473
33
6(16)
(
117,229 ) (
4)
2,226,895
78
9
11
$ 2,891,266
100		 December 31, 2020 December 31, 2020
Amount
$ 157,000
2,800
13,851
-
33
1,016
174,700
13
47
378
438
175,138
920,000
10,714
341,774
7,856
817,112
133,334
2,230,790
$ 2,405,928		 %
Current liabilities
2100
Short-term borrowings
2170
Accounts payable
2200
Other payables
2230
Current income tax liabilities
2280
Lease liabilities - current
2300
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2600
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity attributable to owners of
parent
Share capital
3110
Ordinary shares
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3XXX
Total equity
Significant contingent liabilities and
unrecognized contractual commitments
Significant subsequent events
3X2X
Total liabilities and equity		 6
-
1
-
-
-
7
-
-
-
-
7
38
1
14
-
34
6
93
100

The accompanying notes are an integral part of these consolidated financial statements.

Chairman: Hou, Chia-Chi

Manager: Liu, Hsien-Wen

Head of Accounting: Lo, Chien-Chang

- 19 -

Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME January 1 to December 31, 2021 and 2020

Unit: Thousand NTD (Except for earnings (loss) per share in NTD)

Item 2021
2020
Notes
Amount
%
Amount
%
6(17)
$ 78,799
100
$ 113,119
100
6(5)(22)
(
78,771) (
100) (
114,888)(
102)
28
- (
1,769)(
2)
6(22)
(23)
(
579 )
1- (
363)
-
(
27,644 ) (
35) (
28,099) (
25)
12(2)
68
-
10
-
(
28,155) (
36) (
28,452)(
25)
(
28,127) (
36) (
30,221)(
27)
6(18)
1,839
2
13,724
12
6(19)
42,948
54
47,004
42
6(5)(20)
2,365
3
(
268,006) (
237)
6(21)
(
6 )
- (
18)
-
6(7)
120,257
153
(
185)
-
167,403
212
(
207,481)(
183)
139,276
177
(
237,702) (
210)
6(24)
(
11,002) (
14) (
5,821)(
5)
$ 128,274
163
( $ 243,523)(
215)
6(16)
( $ 179,652 ) (
228) $ 112,776
99
(
39,288) (
50)
7,850
7
(
218,940) (
278)
120,626
106
( $ 218,940) (
278) $ 120,626
106
($ 90,666) (
115) ($ 122,897)(
109)
$ 128,274
163
( $ 243,523)(
215)
( $ 90,666) (
115) ( $ 122,897)(
109)
6(25)
$ 1.39
($ 2.65)
6(25)
$ 1.39
($ 2.65)
4000
Revenue
5000
Operating costs
5900
Gross profit (loss)
Operating expenses
6100
Selling expenses
6200
Administrative expenses
6450
Expected credit loss (gain)
6000
Total operating expenses
6900
Operating loss
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Share of the profit or loss of associates and
joint ventures accounted for using the equity
method
7000
Total non-operating income and expenses
7900
Net profit before tax (loss)
7950
Income tax expense
8200
Current net profit (loss)
Other comprehensive income (net)
8316
Unrealized gains (losses) from investments
in equity instruments measured at fair value
through other comprehensive income
8320
Share of the comprehensive income of
associates and joint ventures accounted for
using the equity method - not to be
reclassified to profit or loss
8310
Components of other comprehensive
income that will not be reclassified to
profit or loss
8300
Other comprehensive income (net)
8500
Total comprehensive income for the period
Net profit (loss) attributable to:
8610
Owners of the parent
Comprehensive income attributable to:
8710
Owners of the parent
Basic earnings (loss) per share
9750
Basic earnings (loss) per share
Diluted earnings (loss) per share
9850
Diluted earnings (loss) per share

The accompanying notes are an integral part of these consolidated financial statements.

Manager: Liu, Hsien-Wen

Chairman: Hou, Chia-Chi

Head of Accounting: Lo, Chien-Chang

- 20 -

Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY January 1 to December 31, 2021 and 2020

Unit: Thousand NTD

2020
Balance as of January 1, 2020
Current net profit
Other comprehensive income for the period
Total comprehensive income for the period
2019 Appropriations and distribution of retained earnings
Provision for legal reserve
Cash dividends
Reversal of special reserve
Disposal of equity instruments at fair value through other
comprehensive income
Changes in equity of associates recognized using the equity
method
Balance as of December 31, 2020
2021
Balance as of January 1, 2021
Current net profit
Other comprehensive income for the period
Total comprehensive income for the period
Disposal of equity instruments at fair value through other
comprehensive income
Changes in equity of associates recognized using the equity
method
Disposal of equity instruments by associates at fair value
through other comprehensive income
Balance as of December 31, 2021		 Notes Equityattributable Equityattributable to owners ofparent to owners ofparent Total equity
Ordinary shares Capital surplus Retained earnings Unrealized gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income
Legal reserve Special reserve Unappropriated
retained earnings
6(16)
6(15)
6(16)
6(14)
6(16)
6(16)
6(14)
6(16)
$ 920,000
-
-
-
-
-
-
-
-
$ 920,000
$ 920,000
-
-
-
-
-
-
$ 920,000
$ 8,686
-
-
-
-
-
-
-
2,028
$ 10,714
$ 10,714
-
-
-
-
123,021
11,286
$ 145,021
$ 225,134
-
-
-
116,640
-
-
-
-
$ 341,774
$ 341,774
-
-
-
-
-
-
$ 341,774
$ 7,903
-
-
-
-
-
(
47 )
-
-
$ 7,856
$ 7,856
-
-
-
-
-
-
$ 7,856
$ 1,642,430
(
243,523 )
-
(
243,523 )
(
116,640 )
(
460,000 )
47
(
5,202 )
-
$ 817,112
$ 817,112
128,274
(
96 )
126,813
45,791
-
(
21,608 )
$ 969,473		 $ 7,506
-
120,626
120,626
-
-
-
5,202
-
$ 133,334
$ 133,334
-
(
218,844 )
(
218,844 )
(
42,041 )
-
10,322
($ 117,229 )
$ 2,811,659
(
243,523 )
120,626
(
122,897 )
-
(
460,000 )
-
-
2,028
$ 2,230,790
$ 2,230,790
128,274
(
218,940 )
(
90,666 )
3,750
123,021
-
$ 2,266,895

The accompanying notes are an integral part of these consolidated financial statements.

Chairman: Hou, Chia-Chi

Manager: Liu, Hsien-Wen

Head of Accounting: Lo, Chien-Chang

- 21 -

Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS January 1 to December 31, 2021 and 2020

Unit: Thousand NTD

Cash flows from operating activities
Current net profit before tax (loss)
Adjusting items
Adjustments to reconcile profit (loss)
Depreciation

Amortization expense

Expected credit loss (gain)

Net loss (gain) on financial assets measured
at fair value through profit or loss

Interest expenses

Interest income

Dividend income

Share of losses (gain) of associates
recognized using the equity method

Loss from disposal of property, plant and
equipment

Gains from disposal of equity-accounted
investments

Impairment losses

Lease modification gain

Changes in operating assets and liabilities
Changes in operating assets
Net notes receivable
Accounts receivable
Other receivables
Other receivables - related parties
Inventories

Prepayments
Changes in operating liabilities
Accounts payable
Other payables
Other current liabilities
Cash inflow generated from operations
Interest paid
Income tax paid
Net cash outflow from operations		 Notes
January 1 to
December 31,2021
January 1 to
December 31,2020
$ 139,276 ( $ 237,702 )
6(8)(9)(10)
(22)
2,128
2,277
6(22)
6
14
12(2)
(
68 ) (
10 )
6(20)
(
2,206 )
567
6(21)
1
15
6(18)
(
1,839 ) (
13,724 )
6(19)
(
42,424 ) (
20,111 )
6(7)
(
120,257 )
185
6(20)
-
1,590
6(20)
- (
3,617 )
6(7)(20)
-
249,390
6(9)
- (
46 )
585 (
845 )
8,337 (
3,178 )
-
12
37,722
470
6(4)
(
608,405 ) (
243,129 )
10,446 (
12,042 )
(
205 )
2,800
(
5,127 ) (
1,128 )
(
601 )
954
(
582,631 ) (
277,258 )
(
1 ) (
15 )
(
3,466 ) (
2,288 )
(
586,098 ) (
279,561 )

(Continued)

- 22 -

Chuwa Wool Industry Co., (Taiwan) Ltd. and its subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS January 1 to December 31, 2021 and 2020

Unit: Thousand NTD

January 1 to January 1 to
Notes December 31,2021 December 31,2020
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets measured at fair
value through other comprehensive income ( $ 426,285 ) ( $ 422,642 )
Disposal of financial assets measured at fair value
through other comprehensive income 418,032 73,414
Disposal of financial assets measured at amortized
cost - 975,336
Acquisition of financial assets measured at fair
value through profit or loss ( 23,305 ) 228
Disposal of financial assets measured at fair value
through profit or loss 44,489 -
Acquisition of equity method investments
 6(7) - ( 522,876 )
Disposal of equity method investments
 6(7) - 61,456
Acquisition of property, plant and equipment
 6(8) - ( 148 )
Disposal of property, plant and equipment
 6(8) - 577
Decrease in refundable deposits 11 705
Acquisition of investment properties
 6(10) - ( 2,192 )
Interest received 1,991 27,545
Dividends received 42,424 20,111
New cash inflow from investing
activities 57,357 211,514
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
 6(26) 450,820 157,000
Increase in deposits received
 6(26) 245 96
Payments of lease liabilities
 6(26) ( 33 ) ( 275 )
Cash dividends paid
 6(26) - ( 460,000 )
Net cash (outflow) flows from financing
activities 451,032 ( 303,179 )
Current net decrease in cash and cash equivalents ( 77,709 ) ( 371,226 )
Cash and cash equivalents at beginning of period 831,182 1,202,408
Cash and cash equivalents at end of period $ 753,473 $ 831,182

The accompanying notes are an integral part of these consolidated financial statements.

Chairman: Hou, Chia-Chi

Manager: Liu, Hsien-Wen

Head of Accounting: Lo, Chien-Chang

- 23 -

Auditor's Report

(111)Cai-Shen-Bao-Zi No.21004923

To the shareholders of Chuwa Wool Industry Co., (Taiwan) Ltd.:

Audit opinion

We have audited the accompanying standalone balance sheets of Chuwa Wool Industry Co., (Taiwan) Ltd. as of December 31, 2021 and 2020, and the related standalone statements of comprehensive income, standalone statements of changes in equity and of cash flows for the period from January 1, 2021 and 2020 to December 31, 2021 and 2020; and notes to the standalone financial statements (including a summary of significant accounting policies).

In the opinion of the auditor, based on the audit results of the auditor and the audit reports of other auditors (please refer to Other Matters), the standalone financial statements referred to above, present fairly in all material aspects, the standalone financial position of Chuwa Wool Industry Co., (Taiwan) Ltd. as of December 31, 2021 and 2020, and the standalone financial performance and standalone cash flows from January 1, 2021 and 2020 to December 31, 2021 and 2020, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, and Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of Chuwa Wool Industry Co., (Taiwan) Ltd. in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with the code. Based on the audit results of the auditors and the audit reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 2021 standalone financial statements of Chuwa Wool Industry Co., (Taiwan) Ltd. These matters were addressed in the context of our audit of the standalone financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

- 24 -

The key audit matters of the 2021 standalone financial statements of Chuwa Wool Industry Co., (Taiwan) Ltd. are as follows:

Impairment evaluation of equity method investments

Description

For accounting policies relating to equity method investment, please refer to Note 4(14) of the Standalone Financial Statements; for accounting policies relating to impairment of non-financial assets, please refer to Note 4(20) of the Standalone Financial Statements; for details of accounts, please refer to Note 6(7) of the Standalone Financial Statements.

As of December 31, 2021, the carrying amount of the equity method investment of Chuwa Wool Industry Co., (Taiwan) Ltd. amounts to NTD1,344,939,000, which is 47% of the total assets. For investments accounted for using the equity method according to the regulations of IAS 28 "Investments in Associates and Joint Ventures", if there is objective evidence of indications of impairment, the management shall evaluate whether the investment's recoverable amount is lower than the carrying amount. As the objective evidence of the impairment evaluation and the comprehensive consideration factors in determining the recoverable amount involve the subjective judgment of the management are highly uncertain, and the amount of equity method investment is high, we have listed the impairment evaluation on the related equity method investment of Chuwa Wool Industry Co., (Taiwan) Ltd. as one of the most significant matters in the audit.

How our audit addressed the matter

With regards to the specific aspects as stated in the above key audit matters, we have executed the following response procedures:

  1. Interview the management to understand the management's assessment of the impairment indications of the equity method investments, and evaluate its reasonableness.

  2. Obtain equity valuation report prepared by the external evaluation experts delegated by the management; the procedures performed by auditors are as follows:

  3. (1) Evaluate the appropriateness and objectivity of the external evaluation experts delegated by the management.

  4. (2) Evaluate the appropriateness of the evaluation methods and objectivity of the relevant assumptions adopted by the external evaluation experts delegated by the management.

Other matters– The work of other auditors

Some of the equity method investments of the 2021 financial statements of Chuwa Wool Industry Co., (Taiwan) Ltd. are not audited by us but by other auditors. Hence, in the opinion expressed by us on the above standalone financial statements, the amount listed and in the financial statements of these companies and information disclosed in Note 13 are based on the audit report of other auditors. As of December 31, 2021 and 2020, equity method investments of the above mentioned company were NTD861,569,000 and NTD664,067,000, accounting to 30% and 28% of standalone assets; in 2021 and 2020, the comprehensive incomes recognized for the above mentioned company were NTD74,482,000 and NTD8,371,000, accounting to 82% and 7% of comprehensive income for the current period.

- 25 -

Responsibilities of management and those charged with governance for the financial statements

The management is responsible for the preparation and fair presentation of the standalone financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers as well as the International Financial Reporting Standards, International Accounting Standards, and Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of standalone financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the abilities of Chuwa Wool Industry Co., (Taiwan) Ltd. to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management intends to liquidate Chuwa Wool Industry Co., (Taiwan) Ltd. or to cease its operations, or has no realistic alternative but to do so.

Those charged with governance (including the audit committee) are responsible for overseeing the financial reporting process of Chuwa Wool Industry Co., (Taiwan) Ltd.

Auditors' responsibilities for the audit of the standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material. if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error; design and implement appropriate response measures for the risk assessed; and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of Chuwa Wool Industry Co., (Taiwan) Ltd.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- 26 -

4. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of Chuwa Wool Industry Co., (Taiwan) Ltd. to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause Chuwa Wool Industry Co., (Taiwan) Ltd. to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the standalone financial statements (including the disclosures) and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Chuwa Wool Industry Co., (Taiwan) Ltd. to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion on the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings (including any significant deficiencies in internal control that we identify during our audit).

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence (and where applicable, related safeguards).

- 27 -

From the matters communicated with those charged with governance, we determine those matters that were of most significance to Chuwa Wool Industry Co., (Taiwan) Ltd. in the audit of 2021 standalone financial statements and are therefore the key matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

PwC Taiwan

Hsiao, Chun-Yuan

Certified public accountants

Lin, Se-Kai

Former Securities and Futures Bureau, Financial Supervisory Commission No. of Approval Document: Jin-Guan-Zheng-Liuo-Zi No. 0960042326 Jin-Guan-Zheng-Liuo-Zi No. 0960072936

March 23, 2022

- 28 -

Chuwa Wool Industry Co., (Taiwan) Ltd. STANDALONE BALANCE SHEETS December 31, 2021 and 2020

Unit: Thousand NTD

Assets Notes
6(1)
6(2)
6(3)
6(3)
7.
6(4)(5)
6(6)
6(7)
6(8)
6(9)
6(10)
6(24)
6(5)(11)
6(9)
6(24)
6(9)
6(13)
6(14)
6(15)		 December 31,2021
Amount
%
$ 418,151
14
-
-
20,000
1
260
-
2,615
-
43
-
-
-
69
-
851,534
30
2,134
-
6
-
1,294,812
45
110,932
4
1,344,939
47
192
-
46
-
131,509
4
-
-
395
-
396
-
3,790
-
1,592,199
55
$ 2,887,011
100
$ 607,820
21
2,595
-
8,571
-
32
-
34
-
415
-
619,467
21
13
-
13
-
623
-
649
-
620,116
21
920,000
32
145,021
5
341,774
12
7,856
-		 December 31,2020 December 31,2020
Amount
$ 418,151
-
20,000
260
2,615
43
-
69
851,534
2,134
6
1,294,812
110,932
1,344,939
192
46
131,509
-
395
396
3,790
1,592,199
$ 2,887,011
$ 607,820
2,595
8,571
32
34
415
619,467
13
13
623
649
620,116
920,000
145,021
341,774
7,856		 Amount
$ 521,136
18,978
20,000
845
10,884
106
37,722
3,437
243,129
12,580
6
868,823
171,438
1,227,041
216
79
133,580
6
428
407
3,790
1,536,985
$ 2,405,808
$ 157,000
2,800
13,674
57
33
1,016
174,580
13
47
378
438
175,018
920,000
10,714
341,774
7,856		 %
Current assets
1100
Cash and cash equivalents
1110
Financial assets measured at fair
value through profit or loss - current
1136
Financial assets measured at
amortized cost - current
1150
Net notes receivable
1170
Net accounts receivable
1200
Other receivables
1210
Other receivables - related parties
1220
Current income tax assets
130X
Inventories
1410
Prepayments
1470
Other current assets
11XX
Total current assets
Non-current assets
1517
Financial assets measured at fair
value through other comprehensive
income - non-current
1550
Investments recognized under the
equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Net investment properties
1780
Intangible assets
1840
Deferred income tax assets
1920
Refundable deposits
1990
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets
Liabilities and equity		 22
1
1
-
-
-
2
-
10
-
-
36
7
51
-
-
6
-
-
-
-
64
100
6
-
1
-
-
-
Current liabilities
2100
Short-term borrowings
2170
Accounts payable
2200
Other payables
2220
Other payables - related party
2280
Lease liabilities - current
2300
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2645
Deposits received
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Ordinary shares
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
7
-
-
-
-
7
38
1
14
-

(Continued)

- 29 -

Chuwa Wool Industry Co., (Taiwan) Ltd. STANDALONE BALANCE SHEETS December 31, 2021 and 2020

Liabilities and equity Notes
6(16)
(
9
11		 December 31, 2021
Amount
%
$ 969,473
34

117,229 ) (
4)
2,266,895
79
$ 2,887,011 100		 Unit: Thousand NTD
December 31, 2020		 Unit: Thousand NTD
December 31, 2020
Amount
$ 969,473

117,229 )
2,266,895
$ 2,887,011		 Amount
$ 817,112

133,334
2,230,790
$ 2,405,808		 %
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3XXX
Total equity
Significant contingent liabilities and
unrecognized contractual commitments
Significant subsequent events
3X2X
Total liabilities and equity		 34
6
93
100

The accompanying notes are an integral part of these standalone financial statements.

Chairman: Hou, Chia-Chi

Manager: Liu, Hsien-Wen

Head of Accounting: Lo, Chien-Chang

- 30 -

Chuwa Wool Industry Co., (Taiwan) Ltd. Standalone Statement of Comprehensive Income January 1 to December 31, 2021 and 2020

Unit: Thousand NTD (Except for earnings (loss) per share in NTD)

Item 2021
2020
Notes
Amount
%
Amount
%
6(17)
$ 78,799
100
$ 113,131
100
6(4)(22)
(
78,771)(
100) (
114,888)(
101)
28
-
(
1,757)(
1)
6(22)
(23)
(
579)
-
(
363)
-
(
27,433) (
35) (
27,704) (
25)
12(2)
68
-
10
-
(
27,944)(
35) (
28,057)(
25)
(
27,916)(
35) (
29,814)(
26)
6(18)
1,271
2
12,912
11
6(19)
9,579
12
40,540
36
6(5)(20)
2,651
3
(
266,354) (
235)
6(21)
(
5)
-
(
18)
-
6(7)
149,561
190
4,600
4
163,057
207
(
208,320)(
184)
135,141
172
(
238,134) (
210)
6(24)
(
6,867)(
9) (
5,389)(
5)
$ 128,274
163
($ 243,523)(
215)
6(16)
( $ 60,506) (
77) ($ 47,376) (
42)
(
158,434)(
201)
168,002
148
(
218,940)(
278)
120,626
106
( $ 218,940) (
278)$ 120,626
106
($ 90,666) (
115) ($ 122,897)(
109)
6(25)
$ 1.39
($ 2.65)
6(25)
$ 1.39
($ 2.65)
4000
Revenue
5000
Operating costs
5900
Gross profit (loss)
Operating expenses
6100
Selling expenses
6200
Administrative expenses
6450
Expected credit loss (gain)
6000
Total operating expenses
6900
Operating loss
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of subsidiaries,
associates and joint ventures
accounted for using the equity
method
7000
Total non-operating income
and expenses
7900
Net profit before tax (loss)
7950
Income tax expense
8200
Current net profit (loss)
Other comprehensive income
8316
Unrealized gains (losses) from
investments in equity
instruments measured at fair
value through other
comprehensive income
8330
Share of the comprehensive
income of subsidiaries,
associates and joint ventures
accounted for using the equity
method - not to be reclassified
to profit or loss
8310
Components of other
comprehensive income that
will not be reclassified to
profit or loss
8300
Other comprehensive income
(net)
8500
Total comprehensive income
for the period
Basic earnings (loss) per share
9750
Basic earnings (loss) per share
Diluted earnings (loss) per share
9850
Diluted earnings (loss) per
share

The accompanying notes are an integral part of these standalone financial statements.

Manager: Liu, Hsien-Wen

Chairman: Hou, Chia-Chi

Head of Accounting: Lo, Chien-Chang

- 31 -

Chuwa Wool Industry Co., (Taiwan) Ltd. STANDALONE STATEMENT OF CHANGES IN EQUITY January 1 to December 31, 2021 and 2020

2020
Balance as of January 1, 2020
Current net profit
Other comprehensive income for the period
Total comprehensive income for the period
2019 Appropriations and distribution of retained earnings
Provision for legal reserve
Cash dividends
Reversal of special reserve
Disposal of equity instruments at fair value through other
comprehensive income
Changes in equity of associates recognized using the
equity method
Balance as of December 31, 2020
2021
Balance as of January 1, 2021
Current net profit
Other comprehensive income for the period
Total comprehensive income for the period
Disposal of equity instruments at fair value through other
comprehensive income
Changes in equity of associates recognized using the
equity method
Disposal of equity instruments by associates at fair value
through other comprehensive income
Balance as of December 31, 2021		 Notes
Ordinaryshares
Ordinaryshares

Capital surplus
Retained earnings
Retained earnings		 Unit: Thousand NTD
Unrealized
gains (losses)
from financial
assets measured
at fair value
through other
comprehensive
income
Total equity
$ 7,506
$2,811,659
-
(
243,523 )
120,626
120,626
120,626
(
122,897 )
-
-
-
(
460,000 )
-
-
5,202
-
-
2,028
$ 133,334
$ 2,230,790
$ 133,334
$2,230,790
-
128,274
(
218,844 ) (
218,940 )
(
218,844 ) (
90,666 )
(
42,041 )
3,750
-
123,021
10,322
-
($ 117,229 )
$ 2,266,895		 Unit: Thousand NTD
Unrealized
gains (losses)
from financial
assets measured
at fair value
through other
comprehensive
income
Total equity
$ 7,506
$2,811,659
-
(
243,523 )
120,626
120,626
120,626
(
122,897 )
-
-
-
(
460,000 )
-
-
5,202
-
-
2,028
$ 133,334
$ 2,230,790
$ 133,334
$2,230,790
-
128,274
(
218,844 ) (
218,940 )
(
218,844 ) (
90,666 )
(
42,041 )
3,750
-
123,021
10,322
-
($ 117,229 )
$ 2,266,895		 Unit: Thousand NTD
Unrealized
gains (losses)
from financial
assets measured
at fair value
through other
comprehensive
income
Total equity
$ 7,506
$2,811,659
-
(
243,523 )
120,626
120,626
120,626
(
122,897 )
-
-
-
(
460,000 )
-
-
5,202
-
-
2,028
$ 133,334
$ 2,230,790
$ 133,334
$2,230,790
-
128,274
(
218,844 ) (
218,940 )
(
218,844 ) (
90,666 )
(
42,041 )
3,750
-
123,021
10,322
-
($ 117,229 )
$ 2,266,895
Legal reserve Special reserve Unappropriated
retained
earnings
6(16)
6(15)

6(16)
6(14)
6(16)

6(16)
6(14)
6(16)		 $ 920,000
-
-
-
-
-
-
-
-
$ 920,000
$ 920,000
-
-
-
-
-
-
$ 920,000		 $ 8,686
-
-
-
-
-
-
-
2,028
$ 10,714
$ 10,714
-
-
-
-
123,021
11,286
$ 145,021		 $ 225,134
-
-
-
116,640
-
-
-
-
$ 341,774
$ 341,774
-
-
-
-
-
-
$ 341,774		 $ 7,903
-
-
-
-
-
(
47 )
-
-
$ 7,856
$ 7,856
-
-
-
-
-
-
$ 7,856		 $1,642,430
(
243,523 )
-
(
243,523 )
(
116,640 )
(
460,000 )
47
(
5,202 )
-
$ 817,112
$ 817,112
128,274
(
96 )
128,178
45,791
-
(
21,608 )
$ 969,473		 $ 7,506
-
120,626
120,626
-
-
-
5,202
-
$ 133,334
$ 133,334
-
(
218,844 )
(
218,844 )
(
42,041 )
-
10,322
($ 117,229 )		 $2,811,659
(
243,523 )
120,626
(
122,897 )
-
(
460,000 )
-
-
2,028
$ 2,230,790
$2,230,790
128,274
(
218,940 )
(
90,666 )
3,750
123,021
-
$ 2,266,895

The accompanying notes are an integral part of these standalone financial statements.

Chairman: Hou, Chia-Chi

Manager: Liu, Hsien-Wen

Head of Accounting: Lo, Chien-Chang

- 32 -

Chuwa Wool Industry Co., (Taiwan) Ltd. STANDALONE STATEMENT OF CASH FLOWS January 1 to December 31, 2021 and 2020

Unit: Thousand NTD

Cash flows from operating activities
Current net profit before tax (loss)
Adjusting items
Adjustments to reconcile profit (loss)
Depreciation

Amortization expense

Expected credit loss (gain)

Net loss (gain) on financial assets measured
at fair value through profit or loss

Interest expenses

Interest income

Dividend income

Share of losses (gain) of associates
recognized using the equity method

Loss from disposal of property, plant and
equipment

Gains from disposal of equity-accounted
investments

Impairment losses

Lease modification gain

Changes in operating assets and liabilities
Changes in operating assets
Net notes receivable
Accounts receivable
Other receivables
Other receivables - related parties
Inventories

Prepayments
Changes in operating liabilities
Accounts payable
Other payables
Other payables - related party
Other current liabilities
Cash inflow generated from operations
Interest paid
Income tax paid
Net cash outflow from operations		 Notes
January 1 to
December 31,2021
January 1 to
December 31,2020
$ 135,141 ( $ 238,134 )
6(8)(9)(10)
(22)
2,128
2,277
6(22)
6
14
12(2)
(
68 ) (
10 )
6(20)
(
2,491 )
795
6(21)
1
15
6(18)
(
1,271 ) (
12,912 )
6(19)
(
9,056 ) (
13,651 )
6(7)
(
149,561 ) (
4,600 )
6(20)
-
1,590
6(20)
- (
3,617 )
6(7)(20)
-
249,390
6(9)
- (
46 )
585 (
845 )
8,337 (
3,178 )
-
12
37,722
470
6(4)
(
608,405 ) (
243,129 )
10,446 (
12,042 )
(
205 )
2,800
(
5,103 ) (
1,185 )
(
25 )
57
(
601 )
954
(
582,420 ) (
274,975 )
(
1 ) (
15 )
(
3,466 ) (
2,247 )
(
585,887 ) (
277,237 )

(Continued)

- 33 -

Chuwa Wool Industry Co., (Taiwan) Ltd. STANDALONE STATEMENT OF CASH FLOWS January 1 to December 31, 2021 and 2020

Unit: Thousand NTD

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets measured at fair
value through other comprehensive income
Disposal of financial assets measured at amortized
cost
Acquisition of financial assets measured at fair
value through profit or loss
Disposal of financial assets measured at fair value
through profit or loss
Acquisition of equity method investments

Disposal of equity method investments

Acquisition of property, plant and equipment

Disposal of property, plant and equipment

Decrease in refundable deposits
Acquisition of investment properties

Interest received
Dividends received
New cash inflow (outflow) from
investing activities
Cash flows from financing activities
Increase in short-term borrowings

Increase in deposits received

Payments of lease liabilities

Cash dividends paid

Net cash (outflow) flows from financing
activities
Current net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period		 Notes
January 1 to
December 31,2021
January 1 to
December 31,2020
$ - ( $ 256,536 )
-
879,400
(
7,440 )
-
28,909
-
6(7)
- (
822,875 )
6(7)
-
61,456
6(8)
- (
148 )
6(8)
-
578
11
716
6(10)
- (
2,192 )
1,334
26,843
9,056
13,651
31,870 (
99,107 )
6(26)
450,820
157,000
6(26)
245
84
6(26)
(
33 ) (
275 )
6(26)
- (
460,000 )
451,032 (
303,191 )
(
102,985 ) (
679,535 )
521,136
1,200,671
$ 418,151 $ 521,136

The accompanying notes are an integral part of these standalone financial statements.

Chairman: Hou, Chia-Chi

Manager: Liu, Hsien-Wen

Head of Accounting: Lo, Chien-Chang

- 34 -

[Attachment 4]

Chuwa Wool Industry Co., (Taiwan) Ltd.

2021 Earnings Distribution Table

Item Unit: NT$ Amount
$ 817,111,539
$128,273,533
(96,674)
24,184,279


152,361,138
(15,236,114)
954,236,563
(18,400,000)
$ 935,836,563
Beginning unappropriated retained earnings
Net comprehensive income after tax for the period
Less:Remeasurements of net defined benefit
liability
Add: Disposal of equity instruments measured at
fair value through other comprehensive
income
Total amount of after-tax net income for the period
and other profit items adjusted to the current year’s
undistributed earnings other than after-tax net
income for the period
Provision for statutory surplus reserve (10%)
Distributable earnings for the period
Items for distribution
Shareholder dividend (NT$0.2 per share)
Ending unappropriated retained earnings

Chairman: Hou, Chia-Chi Manager: Liu, Hsien-Wen Accounting Manager: Lo, Chien-Chang

- 35 -

[Attachment 5]

Chuwa Wool Industry Co., (Taiwan) Ltd.

Table of Comparison of “Rules of Procedure for Shareholders’ Meeting”.

Amended provisions Current provisions Explanation
Article 3
A shareholders meeting shall, unless
otherwise provided for by the laws
and regulations, be convened by the
board of directors.
Changes to how the Company
convenes its shareholders meeting
shall be resolved by the board of
directors, and shall be made no later
than mailing of the shareholders
meeting notice.
The Company shall prepare electronic
versions of the shareholders meeting
notice and proxy forms, and the
origins of and explanatory materials
relating to all proposals, including
proposals for ratification, matters for
deliberation, or the election or
dismissal of directors and upload
them to the Market Observation Post
System (MOPS) 30 days before the
date of a regular shareholders meeting
or 15 days before the date of a special
shareholders meeting. The Company
shall prepare electronic versions of
the shareholders meeting agenda and
supplemental meeting materials and
upload them to the MOPS 21 days
before the date of the regular
shareholders meeting or 15 days
before the date of the special
shareholders meeting.If, however, the
Company has the paid-in capital of
NT$10 billion or more as of the last
day of the most current fiscal year, or
total shareholding of foreign
shareholders and PRC shareholders
reaches 30% or more as recorded in
the register of shareholders of the
shareholders meeting held in the
immediately preceding year,		 Article 3
A shareholders meeting shall, unless
otherwise provided for by the laws
and regulations, be convened by the
board of directors.
The Company shall prepare electronic
versions of the shareholders meeting
notice and proxy forms, and the
origins of and explanatory materials
relating to all proposals, including
proposals for ratification, matters for
deliberation, or the election or
dismissal of directors and upload
them to the Market Observation Post
System (MOPS) 30 days before the
date of a regular shareholders meeting
or 15 days before the date of a special
shareholders meeting. The Company
shall prepare electronic versions of
the shareholders meeting agenda and
supplemental meeting materials and
upload them to the MOPS 21 days
before the date of the regular
shareholders meeting or 15 days
before the date of the special
shareholders meeting.		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.

- 36 -

Amended provisions Current provisions Explanation
transmission of these electronic files
shall be made by 30 days before the
regular shareholders meeting.
In addition, 15 days before the date of
the shareholders meeting, the
Company shall also have prepared the
shareholders meeting agenda and
supplemental meeting materials and
made them available for review by
shareholders at any time. The meeting
agenda and supplemental materials
shall also be displayed at the
Company and the professional
shareholder services agent designated
thereby.
The Company shall make the meeting
agenda and supplemental meeting
materials in the preceding paragraph
available to shareholders for review in
the following manner on the date of
the shareholders meeting:
1. For physical shareholders
meetings, they shall be distributed
on-site at the meeting.
2. For hybrid shareholders meetings,
they shall be distributed on-site at
the meeting and shared on the
virtual meeting platform.
3. For virtual-only shareholders
meetings, electronic files shall be
shared on the virtual meeting
platform.
(The rest is omitted)		 In addition, 15 days before the date of
the shareholders meeting, the
Company shall also have prepared the
shareholders meeting agenda and
supplemental meeting materials and
made them available for review by
shareholders at any time. The meeting
agenda and supplemental materials
shall also be displayed at the
Company and the professional
shareholder services agent designated
thereby, and be distributed on-site at
the meeting place.
(The rest is omitted)
Article 4
For each shareholders meeting, a
shareholder may appoint a proxy to
attend the meeting by providing the
proxy form issued by the Company
and stating the scope of the proxy's
authorization.
A shareholder may issue only one
proxy form and appoint only one
proxy for any given shareholders
meeting, and shall deliver the proxy
form to the Company five days before
the date of the shareholders meeting.
When duplicate proxy forms are
delivered, the one received earliest
shallprevail,unless a declaration is		 Article 4
For each shareholders meeting, a
shareholder may appoint a proxy to
attend the meeting by providing the
proxy form issued by the Company
and stating the scope of the proxy's
authorization.
A shareholder may issue only one
proxy form and appoint only one
proxy for any given shareholders
meeting, and shall deliver the proxy
form to the Company five days before
the date of the shareholders meeting.
When duplicate proxy forms are
delivered, the one received earliest
shallprevail,unless a declaration is		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.

- 37 -

Amended provisions Current provisions Explanation
made to cancel the previous proxy
appointment.
After the service of the power of
attorney of a proxy to the Company,
in case the shareholder issuing the
said proxy intends to attend the
shareholders’ meeting in person or to
exercise his/her/its voting power in
writing or by way of electronic
transmission , a proxy rescission
notice shall be filed with the
Company two days prior to the date of
the shareholders’ meeting as
scheduled in the shareholders’
meeting notice so as to rescind the
proxy at issue, otherwise, the voting
power exercised by the authorized
proxy at the meeting shall prevail.
If, after a proxy form is delivered to
the Company, a shareholder wishes to
attend the shareholders meeting
online, a written notice of proxy
cancellation shall be submitted to the
Company two business days before
the meeting date. If the cancellation
notice is submitted after that time,
votes cast at the meeting by the proxy
shall prevail.		 made to cancel the previous proxy
appointment.
After the service of the power of
attorney of a proxy to the Company,
in case the shareholder issuing the
said proxy intends to attend the
shareholders’ meeting in person or to
exercise his/her/its voting power in
writing or by way of electronic
transmission , a proxy rescission
notice shall be filed with the
Company two days prior to the date of
the shareholders’ meeting as
scheduled in the shareholders’
meeting notice so as to rescind the
proxy at issue, otherwise, the voting
power exercised by the authorized
proxy at the meeting shall prevail.
Article 5
The venue for a shareholders meeting
shall be the premises of the Company,
or a place easily accessible to
shareholders and suitable for a
shareholders meeting. The meeting
may begin no earlier than 9 a.m. and
no later than 3 p.m. Full consideration
shall be given to the opinions of the
independent directors with respect to
the place and time of the meeting.
The restrictions on the place of the
meeting shall not apply when the
Company convenes a virtual-only
shareholders meeting.		 Article 5
The venue for a shareholders meeting
shall be the premises of the Company,
or a place easily accessible to
shareholders and suitable for a
shareholders meeting. The meeting
may begin no earlier than 9 a.m. and
no later than 3 p.m. Full consideration
shall be given to the opinions of the
independent directors with respect to
the place and time of the meeting.		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.
Article 6
The Company shall specify in its
shareholders meeting notices the time
during which attendance registrations
for shareholders, solicitors and		 Article 6
The Company shall specify in its
shareholders meeting notices the time
during which attendance registrations
will be accepted,theplace to register		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings,and the

- 38 -

Amended provisions Current provisions Explanation
proxies (collectively"shareholders")
will be accepted, the place to register
for attendance, and other matters for
attention.
The time during which shareholder
attendance registrations will be
accepted, as stated in the preceding
paragraph, shall be at least 30 minutes
prior to the time the meeting
commences. The place at which
attendance registrations are accepted
shall be clearly marked and a
sufficient number of suitable
personnel assigned to handle the
registrations.; For virtual shareholders
meetings, shareholders may begin to
register on the virtual meeting
platform 30 minutes before the
meeting starts. Shareholders
completing registration will be
deemed as attending the shareholders
meeting in person.
Shareholders shall attend shareholders
meetings based on attendance cards,
sign-in cards, or other certificates of
attendance. The Company may not
arbitrarily add requirements for other
documents beyond those showing
eligibility to attend presented by
shareholders. Solicitors soliciting
proxy forms shall also bring
identification documents for
verification.
The Company shall furnish the
attending shareholders with an
attendance book to sign, or attending
shareholders may hand in a sign-in
card in lieu of signing in.
The Company shall furnish attending
shareholders with the meeting agenda
book, annual report, attendance card,
speaker's slips, voting slips, and other
meeting materials. Where there is an
election of directors, pre-printed
ballots shall also be furnished.
When the government or a juristic
person is a shareholder, it may be
represented by more than one
representative at a shareholders		 for attendance, and other matters for
attention.
The time during which shareholder
attendance registrations will be
accepted, as stated in the preceding
paragraph, shall be at least 30 minutes
prior to the time the meeting
commences. The place at which
attendance registrations are accepted
shall be clearly marked and a
sufficient number of suitable
personnel assigned to handle the
registrations.
Shareholdersor proxies (hereinafter
referred to as“shareholders”)shall
attend shareholders meetings based on
attendance cards, sign-in cards, or
other certificates of attendance. The
Company may not arbitrarily add
requirements for other documents
beyond those showing eligibility to
attend presented by shareholders.
Solicitors soliciting proxy forms shall
also bring identification documents
for verification.
The Company shall furnish the
attending shareholders with an
attendance book to sign, or attending
shareholders may hand in a sign-in
card in lieu of signing in.
The Company shall furnish attending
shareholders with the meeting agenda
book, annual report, attendance card,
speaker's slips, voting slips, and other
meeting materials. Where there is an
election of directors, pre-printed
ballots shall also be furnished.
When the government or a juristic
person is a shareholder, it may be
represented by more than one
representative at a shareholders		 laws and
regulations, the
text has been
amended as
appropriate.

- 39 -

Amended provisions Current provisions Explanation
meeting. When a juristic person is
appointed to attend as proxy, it may
designate only one person to represent
it in the meeting.
In the event of a virtual shareholders
meeting, shareholders wishing to
attend the meeting online shall
register with the Company two days
before the meeting date.
In the event of a virtual shareholders
meeting, the Company shall upload
the meeting agenda book, annual
report and other meeting materials to
the virtual meeting platform at least
30 minutes before the meeting starts,
and keep this information disclosed
until the end of the meeting.		 meeting. When a juristic person is
appointed to attend as proxy, it may
designate only one person to represent
it in the meeting.
Article 6-1
To convene a virtual shareholders
meeting, the Company shall include
the follow particulars in the
shareholders meeting notice:
1. How shareholders attend the
virtual meeting and exercise their
rights.
2. Actions to be taken if the virtual
meeting platform or participation
in the virtual meeting is obstructed
due to natural disasters, accidents
or other force majeure events, at
least covering the following
particulars:
(1) To what time the meeting is
postponed or from what time
the meeting will resume if the
above obstruction continues
and cannot be removed, and the
date to which the meeting is
postponed or on which the
meeting will resume.
(2) Shareholders not having
registered to attend the affected
virtual shareholders meeting
shall not attend the postponed
or resumed session.
(3) In case of a hybrid shareholders
meeting, when the virtual
meeting cannot be continued, if
the total number of shares		 (This article has been added) 1. This article
has been
added.
2. In order to
comply with
the procedures
of convening
virtual
shareholder
meetings, and
the laws and
regulations,
the text has
been amended
as appropriate.

- 40 -

Amended provisions Current provisions Explanation
3. (4)

To
Article 8
The Company, beginning from the
time it accepts shareholder attendance
registrations, shall make an
uninterrupted audio and video
recording of the registration
procedure, the proceedings of the
shareholders meeting, and the voting
and vote counting procedures.
The recorded materials of the
preceding paragraph shall be retained
for at least one year. If, however, a
shareholder files a lawsuit pursuant to
Article 189 of the Company Act, the
recording shall be retained until the
conclusion of the litigation.		 Article 8
The Company, beginning from the
time it accepts shareholder attendance
registrations, shall make an
uninterrupted audio and video
recording of the registration
procedure, the proceedings of the
shareholders meeting, and the voting
and vote counting procedures.
The recorded materials of the
preceding paragraph shall be retained
for at least one year. If, however, a
shareholder files a lawsuit pursuant to
Article 189 of the Company Act, the
recording shall be retained until the
conclusion of the litigation.		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.

- 41 -

Amended provisions Current provisions Explanation
Where a shareholders meeting is held
online, the Company shall keep
records of shareholder registration,
sign-in, check-in, questions raised,
votes cast and results of votes counted
by the Company, and continuously
audio and video record, without
interruption, the proceedings of the
virtual meeting from beginning to
end.
The information and audio and video
recording in the preceding paragraph
shall be properly kept by the
Company during the entirety of its
existence, and copies of the audio and
video recording shall be provided to
and kept by the party appointed to
handle matters of the virtual meeting.
In case of a virtual shareholders
meeting, the Company is advised to
audio and video record the back-end
operation interface of the virtual
meeting platform.
Article 9
Attendance at shareholders meetings
shall be calculated based on numbers
of shares. The number of shares in
attendance shall be calculated
according to the shares indicated by
the attendance book and sign-in cards
handed in,and the shares checked in
on the virtual meeting platform, plus
the number of shares whose voting
rights are exercised by
correspondence or electronically.
The chair shall call the meeting to
order at the appointed meeting time,
and simultaneously announce
information in relation to the number
of shares that are not entitled to vote
and the number of shares in
attendance.
However, when the attending
shareholders do not represent a
majority of the total number of issued
shares, the chair may announce a
postponement, provided that no more
than two such postponements, for a
combined total of no more than 1		 Article 9
Attendance at shareholders meetings
shall be calculated based on numbers
of shares. The number of shares in
attendance shall be calculated
according to the shares indicated by
the attendance book and sign-in cards
handed in, plus the number of shares
whose voting rights are exercised by
correspondence or electronically.
The chair shall call the meeting to
order at the appointed meeting time,
and simultaneously announce
information in relation to the number
of shares that are not entitled to vote
and the number of shares in
attendance.
However, when the attending
shareholders do not represent a
majority of the total number of issued
shares, the chair may announce a
postponement, provided that no more
than two such postponements, for a
combined total of no more than 1		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.

- 42 -

Amended provisions Current provisions Explanation
hour, may be made. If the quorum is
not met after two postponements and
the attending shareholders still
represent less than one third of the
total number of issued shares, the
chair shall declare the meeting
adjourned. In case of a virtual
shareholders meeting, the Company is
advised to audio and video record the
back-end operation interface of the
virtual meeting platform.
If the quorum is not met after two
postponements as referred to in the
preceding paragraph, but the attending
shareholders represent one third or
more of the total number of issued
shares, a tentative resolution may be
adopted pursuant to Article 175,
paragraph 1 of the Company Act. A
notice of such tentative resolution
shall be given to each of the
shareholders, and reconvene a
shareholders’ meeting within one
month. In the event of a virtual
shareholders meeting, shareholders
intending to attend the meeting online
shall re-register to the Company in
accordance with Article 6.
When, prior to conclusion of the
meeting, the attending shareholders
represent a majority of the total
number of issued shares, the chair
may resubmit the tentative resolution
for a vote by the shareholders meeting
pursuant to Article 174 of the
CompanyAct.		 hour, may be made. If the quorum is
not met after two postponements and
the attending shareholders still
represent less than one third of the
total number of issued shares, the
chair shall declare the meeting
adjourned.
If the quorum is not met after two
postponements as referred to in the
preceding paragraph, but the attending
shareholders represent one third or
more of the total number of issued
shares, a tentative resolution may be
adopted pursuant to Article 175,
paragraph 1 of the Company Act. A
notice of such tentative resolution
shall be given to each of the
shareholders, and reconvene a
shareholders’ meeting within one
month.
When, prior to conclusion of the
meeting, the attending shareholders
represent a majority of the total
number of issued shares, the chair
may resubmit the tentative resolution
for a vote by the shareholders meeting
pursuant to Article 174 of the
CompanyAct.
Article 11
(The preceding text is omitted)
After a shareholder present at the
meeting speaks, the chair may reply in
person or assign relevant personnel to
reply.
Where a virtual shareholders meeting
is convened, shareholders attending
the virtual meeting online may raise
questions in writing at the virtual
meeting platform from the chair
declaring the meeting open until the
chair declaring the meeting adjourned.		 Article 11
(The preceding text is omitted)
After a shareholder present at the
meeting speaks, the chair may reply in
person or assign relevant personnel to
reply.		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.

- 43 -

Amended provisions Current provisions Explanation
No more than two questions for the
same proposal may be raised. Each
question shall contain no more than
200 words. The regulations in
paragraphs 1 to 5 do not apply.
As long as questions so raised in
accordance with the preceding
paragraph are not in violation of the
regulations or beyond the scope of a
proposal, it is advisable the questions
be disclosed to the public at the
virtual meeting platform.
Article 13
(The preceding text is omitted)
After a shareholder has exercised
voting rights by correspondence or
electronic means, in the event the
shareholder intends to attend the
shareholders meeting in personor
online, a written declaration of intent
to retract the voting rights already
exercised under the preceding
paragraph shall be made known to the
Company, by the same means by
which the voting rights were
exercised, two business days before
the date of the shareholders meeting.
If the notice of retraction is submitted
after that time, the voting rights
already exercised by correspondence
or electronic means shall prevail.
When a shareholder has exercised
voting rights both by correspondence
or electronic means and by appointing
a proxy to attend a shareholders
meeting, the voting rights exercised
by the proxy in the meeting shall
prevail.
Unless otherwise provided by the
Company Act or the Company’s
Articles of Incorporation, a proposal
shall be approved by the consent of
more than half of the votes of shares
represented by shareholders present.
At the time of a vote, for each
proposal, the chair or a person
designated by the chair shall first
announce the total number of voting
rights represented bythe attending		 Article 13
(The preceding text is omitted)
After a shareholder has exercised
voting rights by correspondence or
electronic means, in the event the
shareholder intends to attend the
shareholders meeting in person, a
written declaration of intent to retract
the voting rights already exercised
under the preceding paragraph shall
be made known to the Company, by
the same means by which the voting
rights were exercised, two business
days before the date of the
shareholders meeting. If the notice of
retraction is submitted after that time,
the voting rights already exercised by
correspondence or electronic means
shall prevail. When a shareholder has
exercised voting rights both by
correspondence or electronic means
and by appointing a proxy to attend a
shareholders meeting, the voting
rights exercised by the proxy in the
meeting shall prevail.
Unless otherwise provided by the
Company Act or the Company’s
Articles of Incorporation, a proposal
shall be approved by the consent of
more than half of the votes of shares
represented by shareholders present.
At the time of a vote, for each
proposal, the chair or a person
designated by the chair shall first
announce the total number of voting
rights represented bythe attending		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.

- 44 -

Amended provisions Current provisions Explanation
shareholders, followed by a poll of the
shareholders. After the conclusion of
the meeting, on the same day it is
held, the results for each proposal,
based on the numbers of votes for and
against and the number of abstentions,
shall be entered into the MOPS.
When there is an amendment or
alternative to a proposal, the chair
shall present the amended or
alternative proposal together with the
original proposal and decide the order
in which they will be put to a vote. If
any of these proposals is approved,
alternative proposals shall be treated
as rejected and not be voted on
separately.
Vote monitoring and counting
personnel for the voting on a proposal
shall be appointed by the chair,
provided that all monitoring personnel
shall be shareholders of the Company.
Vote counting for shareholders
meeting proposals or elections shall
be conducted in public at the place of
the shareholders meeting.
Immediately after vote counting has
been completed, the results of the
voting, including the statistical tallies
of the numbers of votes, shall be
announced on-site at the meeting, and
a record made of the vote.
When the Company convenes a
virtual shareholders meeting, after the
chair declares the meeting open,
shareholders attending the meeting
online shall cast votes on proposals
and elections on the virtual meeting
platform before the chair announces
the voting session ends or will be
deemed abstained from voting.
In the event of a virtual shareholders
meeting, votes shall be counted at
once after the chair announces the
voting session ends, and results of
votes and elections shall be
announced immediately.
When the Company convenes a
hybrid shareholders meeting, if
shareholders who have registered to		 shareholders, followed by a poll of the
shareholders. After the conclusion of
the meeting, on the same day it is
held, the results for each proposal,
based on the numbers of votes for and
against and the number of abstentions,
shall be entered into the MOPS.
When there is an amendment or
alternative to a proposal, the chair
shall present the amended or
alternative proposal together with the
original proposal and decide the order
in which they will be put to a vote. If
any of these proposals is approved,
alternative proposals shall be treated
as rejected and not be voted on
separately.
Vote monitoring and counting
personnel for the voting on a proposal
shall be appointed by the chair,
provided that all monitoring personnel
shall be shareholders of the Company.
Vote counting for shareholders
meeting proposals or elections shall
be conducted in public at the place of
the shareholders meeting.
Immediately after vote counting has
been completed, the results of the
voting, including the statistical tallies
of the numbers of votes, shall be
announced on-site at the meeting, and
a record made of the vote.

- 45 -

Amended provisions Current provisions Explanation
attend the meeting online in
accordance with Article 6 decide to
attend the physical shareholders
meeting in person, they shall revoke
their registration two days before the
shareholders meeting in the same
manner as they registered. If their
registration is not revoked within the
time limit, they may only attend the
shareholders meeting online.
When shareholders exercise voting
rights by correspondence or electronic
means, unless they have withdrawn
the declaration of intent and attended
the shareholders meeting online,
except for extraordinary motions, they
will not exercise voting rights on the
original proposals or make any
amendments to the original proposals
or exercise voting rights on
amendments to the original proposal.
Article 15
Matters relating to the resolutions of a
shareholders meeting shall be
recorded in the meeting minutes. The
meeting minutes shall be signed or
sealed by the chair of the meeting and
a copy distributed to each shareholder
within 20 days after the conclusion of
the meeting. The meeting minutes
may be produced and distributed in
electronic form.
The Company may distribute the
meeting minutes of the preceding
paragraph by means of a public
announcement made through the
MOPS. The meeting minutes shall
detail the date and venue of the
meeting, the Chairman's name, the
method of resolution, and the
proceeding and voting results of
various meeting agenda items
(including the statistical tallies of the
numbers of votes). For election of
directors, the number of votes of each
successful candidate shall be
disclosed. The minutes shall be
retained for the duration of the
existence of the Company.		 Article 15
Matters relating to the resolutions of a
shareholders meeting shall be
recorded in the meeting minutes. The
meeting minutes shall be signed or
sealed by the chair of the meeting and
a copy distributed to each shareholder
within 20 days after the conclusion of
the meeting. The meeting minutes
may be produced and distributed in
electronic form.
The Company may distribute the
meeting minutes of the preceding
paragraph by means of a public
announcement made through the
MOPS. The meeting minutes shall
detail the date and venue of the
meeting, the Chairman's name, the
method of resolution, and the
proceeding and voting results of
various meeting agenda items
(including the statistical tallies of the
numbers of votes). For election of
directors, the number of votes of each
successful candidate shall be
disclosed. The minutes shall be
retained for the duration of the
existence of the Company.		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.

- 46 -

Amended provisions Current provisions Explanation
Where a virtual shareholders meeting
is convened, in addition to the
particulars to be included in the
meeting minutes as described in the
preceding paragraph, the start time
and end time of the shareholders
meeting, how the meeting is
convened, the chair's and secretary's
name, and actions to be taken in the
event of disruption to the virtual
meeting platform or participation in
the meeting online due to natural
disasters, accidents or other force
majeure events, and how issues are
dealt with shall also be included in the
minutes.
When convening a virtual-only
shareholder meeting, other than
compliance with the requirements in
the preceding paragraph, the
Company shall specify in the meeting
minutes alternative measures
available to shareholders with
difficulties in attending a virtual-only
shareholders meeting online.
Article 16
On the day of a shareholders meeting,
the Company shall compile in the
prescribed format a statistical
statement of the number of shares
obtained by solicitors through
solicitation, the number of shares
represented by proxiesand the
number of shares represented by
shareholders attending the meeting by
correspondence or electronic means,
and shall make an express disclosure
of the same at the place of the
shareholders meeting. In the event of
a virtual shareholders meeting, the
Company shall upload the above
meeting materials to the virtual
meeting platform at least 30 minutes
before the meeting starts, and keep
this information disclosed until the
end of the meeting.
During the Company's virtual
shareholders meeting, when the
meeting is called to order, the total		 Article 16
On the day of a shareholders meeting,
the Company shall compile in the
prescribed format a statistical
statement of the number of shares
obtained by solicitors through
solicitation and the number of shares
represented by proxies, and shall
make an express disclosure of the
same at the place of the shareholders
meeting.
(This paragraph has been added)		 In order to
comply with the
procedures of
convening virtual
shareholder
meetings, and the
laws and
regulations, the
text has been
amended as
appropriate.

- 47 -

Amended provisions Current provisions Explanation
number of shares represented at the
meeting shall be disclosed on the
virtual meeting platform. The same
shall apply whenever the total number
of shares represented at the meeting
and a new tally of votes is released
during the meeting.
If matters put to a resolution at a
shareholders meeting constitute
material information under applicable
laws or regulations or Taiwan Stock
Exchange Corporation regulations,
the Company shall upload the content
of such resolution to the MOPS
within theprescribed timeperiod.		 If matters put to a resolution at a
shareholders meeting constitute
material information under applicable
laws or regulations or Taiwan Stock
Exchange Corporation regulations,
the Company shall upload the content
of such resolution to the MOPS
within theprescribed timeperiod.
Article 19
In the event of a virtual shareholders
meeting, the Company shall disclose
real-time results of votes and election
immediately after the end of the
voting session on the virtual meeting
platform according to the regulations,
and this disclosure shall continue at
least 15 minutes after the chair has
announced the meeting adjourned.		 (This article has been added) 1. This article
has been
added.
2. In order to
comply with
the procedures
of convening
virtual
shareholder
meetings, and
the laws and
regulations,
the article has
been added.
Article 20
When the Company convenes a
virtual-only shareholders meeting,
both the chair and secretary shall be in
the same location, and the chair shall
declare the address of their location
when the meeting is called to order.		 (This article has been added) 1. This article
has been
added.
2. In order to
comply with
the procedures
of convening
virtual
shareholder
meetings, and
the laws and
regulations,
the article has
been added.
Article 21
In the event of a virtual shareholders
meeting, the Company may offer a
simple connection test to shareholders
prior to the meeting, and provide
relevant real-time services before and		 (This article has been added) 1. This article
has been
added.
2. In order to
comply with
the procedures
of convening

- 48 -

Amended provisions Current provisions Explanation
during the meeting to help resolve
communication technical issues.
In the event of a virtual shareholders
meeting, when declaring the meeting
open, the chair shall also declare,
unless under a circumstance where a
meeting is not required to be
postponed to or resumed at another
time under Article 44-20, paragraph 4
of the Regulations Governing the
Administration of Shareholder
Services of Public Companies, if the
virtual meeting platform or
participation in the virtual meeting is
obstructed due to natural disasters,
accidents or other force majeure
events before the chair has announced
the meeting adjourned, and the
obstruction continues for more than
30 minutes, the meeting shall be
postponed to or resumed on another
date within five days, in which case
Article 182 of the Company Act shall
not apply.
For a meeting to be postponed or
resumed as described in the preceding
paragraph, shareholders who have not
registered to participate in the affected
shareholders meeting online shall not
attend the postponed or resumed
session.
For a meeting to be postponed or
resumed under the second paragraph,
the number of shares represented by,
and voting rights and election rights
exercised by the shareholders who
have registered to participate in the
affected shareholders meeting and
have successfully signed in the
meeting, but do not attend the
postpone or resumed session, at the
affected shareholders meeting, shall
be counted towards the total number
of shares, number of voting rights and
number of election rights represented
at the postponed or resumed session.
During a postponed or resumed
session of a shareholders meeting held
under the second paragraph, no
further discussion or resolution is		 virtual
shareholder
meetings, and
the laws and
regulations,
the article has
been added.

- 49 -

Amended provisions Current provisions Explanation
required for proposals for which votes
have been cast and counted and
results have been announced, or list of
elected directors and supervisors.
When the Company convenes a
hybrid shareholders meeting, and the
virtual meeting cannot continue as
described in second paragraph, if the
total number of shares represented at
the meeting, after deducting those
represented by shareholders attending
the virtual shareholders meeting
online, still meets the minimum legal
requirement for a shareholder
meeting, then the shareholders
meeting shall continue, and not
postponement or resumption thereof
under the second paragraph is
required.
Under the circumstances where a
meeting shall continue as in the
preceding paragraph, the shares
represented by shareholders attending
the virtual meeting online shall be
counted towards the total number of
shares represented by shareholders
present at the meeting, provided these
shareholders shall be deemed
abstaining from voting on all
proposals on meeting agenda of that
shareholders meeting.
When postponing or resuming a
meeting according to the second
paragraph, the Company shall handle
the preparatory work based on the
date of the original shareholders
meeting in accordance with the
requirements listed under Article 44-
20, paragraph 7 of the Regulations
Governing the Administration of
Shareholder Services of Public
Companies.
For dates or period set forth under
Article 12, second half, and Article
13, paragraph 3 of Regulations
Governing the Use of Proxies for
Attendance at Shareholder Meetings
of Public Companies, and Article 44-
5, paragraph 2, Article 44-15, and
Article 44-17, paragraph 1 of the

- 50 -

Amended provisions Current provisions Explanation
Regulations Governing the
Administration of Shareholder
Services of Public Companies, the
Company shall handle the matter
based on the date of the shareholders
meeting that is postponed or resumed
under the second paragraph.
Article 22
When convening a virtual-only
shareholders meeting, the Company
shall provide appropriate alternative
measures available to shareholders
with difficulties in attending a virtual
shareholders meeting online.		 (This article has been added) 1. This article
has been
added.
2. In order to
comply with
the procedures
of convening
virtual
shareholder
meetings, and
the laws and
regulations,
the article has
been added.
Article 23
These Rules shall come into force on
the approval of the shareholders’
meeting,as shall anyamendment.		 Article 19
These Rules shall come into force on
the approval of the shareholders’
meeting,as shall anyamendment.		 The Article is
adjusted in line
with the new
Article added.

- 51 -

[Attachment 6]

Chuwa Wool Industry Co., (Taiwan) Ltd.

Table of Comparison of “Procedures for Acquisition or Disposal of Assets”

Assets”
Amended provisions Current provisions Explanation
Article 5
Limits on investment in real property
and right-of-use assets thereof or
securities for non-business use.
The limits for acquiring the above
assets by the Company and its
subsidiaries are as follows:
1. The total amount of non-business
real estate and its right-of-use
assets shall not exceed100%of net
worth.
2. The total investment amount of
long-term and short-term securities
shall not exceed120%of net worth.
3. The investment amount on
individual securities shall not
exceed100%of net worth.		 Article 5
Limits on investment in real property
and right-of-use assets thereof or
securities for non-business use.
The limits for acquiring the above
assets by the Company and its
subsidiaries are as follows:
1. The total amount of non-business
real estate and its right-of-use
assets shall not exceed50%of net
worth.
2. The total investment amount of
long-term and short-term securities
shall not exceed80%of net worth.
3. The investment amount on
individual securities shall not
exceed50%of net worth.		 In line with the
Company's
future
investment
planning and
development, it
is proposed to
increase the
investment limit.
Article 6
(The preceding text is omitted)
When issuing an appraisal report or
opinion, the personnel referred to in
the preceding paragraph shall comply
with the self-regulatory rules of the
industry associations to which they
belong and with the following
provisions:
1. Prior to accepting a case, they shall
prudently assess their own
professional capabilities, practical
experience, and independence.
2. Whenexecutinga case, they shall
appropriately plan and execute
adequate working procedures, in
order to produce a conclusion and
use the conclusion as the basis for
issuing the report or opinion. The
related working procedures, data
collected,and conclusion shall be		 Article 6
(The preceding text is omitted)
When issuing an appraisal report or
opinion, the personnel referred to in
the preceding paragraph shall comply
with the following:
1. Prior to accepting a case, they shall
prudently assess their own
professional capabilities, practical
experience, and independence.
2. Whenreviewinga case, they shall
appropriately plan and execute
adequate working procedures, in
order to produce a conclusion and
use the conclusion as the basis for
issuing the report or opinion. The
related working procedures, data
collected,and conclusion shall be		 In line with the
revision of the
law, the text is
revised as
appropriate.

- 52 -

Amended provisions Current provisions Explanation
3.
4.		 fully and accurately specified in the
case working papers.
They shall undertake an item-by-
item evaluation of the
appropriatenessand reasonableness
of the sources of data used, the
parameters, and the information, as
the basis for issuance of the
appraisal report or the opinion.
They shall issue a statement
attesting to the professional
competence and independence of
the personnel who prepared the
report or opinion, and that they
have evaluated and found that the
information used isappropriate and
reasonable, and that they have
complied with applicable laws and
regulations.		 3.
4.		 fully and accurately specified in the
case working papers.
They shall undertake an item-by-
item evaluation of the
comprehensiveness, accuracy,and
reasonableness of the sources of
data used, the parameters, and the
information, as the basis for
issuance of the appraisal report or
the opinion.
They shall issue a statement
attesting to the professional
competence and independence of
the personnel who prepared the
report or opinion, and that they
have evaluated and found that the
information used is reasonableand
accurateand that they have
complied with applicable laws and
regulations.
Article 7
(The preceding text is omitted)
4. Appraisal reports of real property
or equipment
In acquisition or disposal of real
property, equipment or right-of-use
assets thereof, where a transaction
amount reaches 20% of the
Company’s paid-in capital or
NT$300 million or more, unless
otherwise transacting with a
domestic government agency,
engaging others to build on the land
owned or rented by the Company,
or acquiring or disposing of
equipment for operating purposes
or the right-of-use assets thereof,
the Company shall obtain an
appraisal report prior to the date of
occurrence from a professional
appraiser, and shall further comply
with the following provisions:
(1) In the event that it is necessary
to set a price limit or a specific
price or a special price as a
reference basis for the
transaction price due to special
circumstances, the transaction
shall be submitted to the board		 Article 7
(The preceding text is omitted)
4. Appraisal reports of real property
or equipment
In acquisition or disposal of real
property, equipment or right-of-use
assets thereof, where a transaction
amount reaches 20% of the
Company’s paid-in capital or
NT$300 million or more, unless
otherwise transacting with a
domestic government agency,
engaging others to build on the land
owned or rented by the Company,
or acquiring or disposing of
equipment for operating purposes
or the right-of-use assets thereof,
the Company shall obtain an
appraisal report prior to the date of
occurrence from a professional
appraiser, and shall further comply
with the following provisions:
(1) In the event that it is necessary
to set a price limit or a specific
price or a special price as a
reference basis for the
transaction price due to special
circumstances, the transaction
shall be submitted to the board		 IN LINE WITH
THE REVISION
OF THE LAW,
THE TEXT IS
REVISED AS
APPROPRIATE.

- 53 -

Amended provisions Current provisions Explanation
for approval in advance. The
above procedures shall also be
followed in case the transaction
terms are changed subsequently.
(2) Where the transaction amount is
NT$1 billion or more,
appraisals from two or more
professional appraisers shall be
obtained.
(3) If the following situation occurs
with regard to the professional
appraisal report, the Company
shall engage a certified public
accountant to handle the case
and render a specific opinion
regarding the reason for the
discrepancy and the
appropriateness of the
transaction price.
1. The discrepancy between the
appraisal result and the
transaction amount is 20% or
more of the transaction
amount.
2. The discrepancy between the
appraisal results of two or
more professional appraisers
is 10% or more of the
transaction amount.
(4) No more than 3 months may
elapse between the date of the
appraisal report issued by a
professional appraiser and the
contract execution date.
However, where the publicly
announced current value for the		 (2)
(3)
(4)		 for approval in advance. The
above procedures shall also be
followed in case the transaction
terms are changed subsequently.
Where the transaction amount is
NT$1 billion or more,
appraisals from two or more
professional appraisers shall be
obtained.
Where any one of the following
circumstances applies with
respect to the professional
appraiser's appraisal results,
unless all the appraisal results
for the assets to be acquired are
higher than the transaction
amount, or all the appraisal
results for the assets to be
disposed of are lower than the
transaction amount, a certified
public accountant shall be
engaged to perform the
appraisalin accordance with the
provisions of Statement of
Auditing Standards No. 20
published by the ROC
Accounting Research and
Development Foundation
(ARDF)and render a specific
opinion regarding the reason for
the discrepancy and the
appropriateness of the
transaction price:
1. The discrepancy between the
appraisal result and the
transaction amount is 20% or
more of the transaction
amount.
2. The discrepancy between the
appraisal results of two or
more professional appraisers
is 10% or more of the
transaction amount.
No more than 3 months may
elapse between the date of the
appraisal report issued by a
professional appraiser and the
contract execution date.
However, where the publicly
announced current value for the

- 54 -

Amended provisions Current provisions Explanation
same period is used and not
more than 6 months have
elapsed, an opinion may still be
issued by the original
professional appraiser.
(5) Where the Company acquires or
disposes of assets through court
auction procedures, the
evidentiary documentation
issued by the court may be used
as a substitute for the appraisal
report or the certified public
accountant’s opinion.		 same period is used and not
more than 6 months have
elapsed, an opinion may still be
issued by the original
professional appraiser.
(5) Where the Company acquires or
disposes of assets through court
auction procedures, the
evidentiary documentation
issued by the court may be used
as a substitute for the appraisal
report or CPA opinion.
Article 8
(The preceding text is omitted)
4. Obtain expert opinion
(1) If the dollar amount of the
acquiring or disposing of
securities is 20% of the
Company's paid-in capital or
NT$300 million or more, the
Company shall additionally
engage a certified public
accountant prior to the date of
occurrence of the event to
provide an opinion regarding
the reasonableness of the
transaction price. This
requirement does not apply,
however, to publicly quoted
prices of securities that have an
active market, or where
otherwise provided by
regulations of the Financial
Supervisory Commission.
1. Securities acquired through
cash contribution in an
incorporation by promotion
or by public offering in
accordance with the
Company Act, with the
further requirement that the		 Article 8
(The preceding text is omitted)
4. Obtain expert opinion
(1) If the dollar amount of the
acquiring or disposing of
securities is 20% of the
Company's paid-in capital or
NT$300 million or more, the
Company shall additionally
engage a certified public
accountant prior to the date of
occurrence of the event to
provide an opinion regarding
the reasonableness of the
transaction price.If the certified
public accountant needs to use
the report of an expert as
evidence, he or she shall do so
in accordance with the
provisions of Statement of
Auditing Standards No. 20
published by the ARDF.This
requirement does not apply,
however, to publicly quoted
prices of securities that have an
active market, or where
otherwise provided by
regulations of the Financial
Supervisory Commission.
1. Securities acquired through
cash contribution in an
incorporation by promotion
or by public offering in
accordance with the
Company Act, with the
further requirement that the		 In line with the
revision of the
law, the text is
revised as
appropriate.

- 55 -

Amended provisions Current provisions Explanation
rights represented by the
acquired securities be
commensurate with the
proportion of capital
contributed.
2. Participation in subscription
to an issue of securities
issued at face value by an
issuing company.
3. Participation in subscription
to securities issued by a
direct or indirect 100%
owned subsidiary that is
carrying out a cash capital
increase, or participation in
subscription to securities
among 100% owned
subsidiaries.
4. Securities listed and traded
on the Taiwan Stock
Exchange or the Taipei
Exchange or emerging
stocks.
5. Domestic government bonds,
or bonds under repurchase or
reverse purchase agreements.
6. Publicly offered funds.
7. TWSE or TPEx listed stocks
acquired or disposed of in
accordance with the TWSE
or TPEx rules governing the
purchase of listed securities
by reverse auction or rules
governing the auction of
listed securities.
8. Participation in subscription
to shares issued by a public
company for a cash capital
increase or domestic
subscription to corporate
bonds (including financial
debentures), with the further
requirement that the
securities acquired are not
privately placed securities.
9. Subscription to a domestic
privately placed fund before
the establishment of the fund
in accordance with Article
11, paragraph 1 of the		 rights represented by the
acquired securities be
commensurate with the
proportion of capital
contributed.
2. Participation in subscription
to an issue of securities
issued at face value by an
issuing company.
3. Participation in subscription
to securities issued by a
direct or indirect 100%
owned subsidiary that is
carrying out a cash capital
increase, or participation in
subscription to securities
among 100% owned
subsidiaries.
4. Securities listed and traded
on the Taiwan Stock
Exchange or the Taipei
Exchange or emerging
stocks.
5. Domestic government bonds,
or bonds under repurchase or
reverse purchase agreements.
6. Publicly offered funds.
7. TWSE or TPEx listed stocks
acquired or disposed of in
accordance with the TWSE
or TPEx rules governing the
purchase of listed securities
by reverse auction or rules
governing the auction of
listed securities.
8. Participation in subscription
to shares issued by a public
company for a cash capital
increase or domestic
subscription to corporate
bonds (including financial
debentures), with the further
requirement that the
securities acquired are not
privately placed securities.
9. Subscription to a domestic
privately placed fund before
the establishment of the fund
in accordance with Article
11, paragraph 1 of the

- 56 -

Amended provisions Current provisions Explanation
Securities Investment Trust
and Consulting Act, or
subscription to or redemption
of a domestic privately
placed fund, provided that
the trust agreement for the
fund specifies an investment
strategy in which, aside from
securities margin
transactions and open
positions held in securities-
related products, the
investment scope of the
remaining portion is the
same as that of a publicly
offered fund.
(2) Where the Company acquires or
disposes of assets through court
auction procedures, the
evidentiary documentation
issued by the court may be used
as a substitute for the appraisal
report or the certified public
accountant’s opinion.		 Securities Investment Trust
and Consulting Act, or
subscription to or redemption
of a domestic privately
placed fund, provided that
the trust agreement for the
fund specifies an investment
strategy in which, aside from
securities margin
transactions and open
positions held in securities-
related products, the
investment scope of the
remaining portion is the
same as that of a publicly
offered fund.
(2) Where the Company acquires or
disposes of assets through court
auction procedures, the
evidentiary documentation
issued by the court may be used
as a substitute for the appraisal
report or the certified public
accountant’s opinion.
Article 9
(The preceding text is omitted)
2. Appraisal and Operating
Procedures
When the Company intends to
acquire or dispose of real property
or right-of-use assets thereof from
or to a related party, or when it
intends to acquire or dispose of
assets other than real property or
right-of-use assets thereof from or
to a related party and the
transaction amount reaches 20% or
more of paid-in capital, 10% or
more of the Company's total assets,
or NT$300 million or more, except
when trading of domestic
government bonds or bonds under
repurchase and resale agreements,
or subscribing or redeeming
domestic money market funds
issued by securities investment
trust enterprises, the Company may
not proceed to enter into a
transaction contract or make a		 Article 9
(The preceding text is omitted)
2. Appraisal and Operating
Procedures
When the Company intends to
acquire or dispose of real property
or right-of-use assets thereof from
or to a related party, or when it
intends to acquire or dispose of
assets other than real property or
right-of-use assets thereof from or
to a related party and the
transaction amount reaches 20% or
more of paid-in capital, 10% or
more of the Company's total assets,
or NT$300 million or more, except
when trading of domestic
government bonds or bonds under
repurchase and resale agreements,
or subscribing or redeeming
domestic money market funds
issued by securities investment
trust enterprises, the Company may
not proceed to enter into a
transaction contract or make a		 In line with the
revision of the
law, the text is
revised as
appropriate.

- 57 -

Amended provisions Current provisions Explanation
payment until the following matters
have been reviewed by the Audit
Committee and approved by the
board of directors:
(1) The purpose, necessity and
anticipated benefit of the
acquisition or disposal of assets.
(2) The reason for choosing the
related party as a transaction
counterparty.
(3) With respect to the acquisition
of real property or right-of-use
assets thereof from a related
party, information regarding
appraisal of the reasonableness
of the preliminary transaction
terms in accordance with
Subparagraph 3, Item (1) and
(4) of this Article.
(4) The date and price at which the
related party originally acquired
the real property, the original
transaction counterparty, and
that transaction counterparty's
relationship to the Company
and the related party.
(5) Monthly cash flow forecasts for
the year commencing from the
anticipated month of signing of
the contract, and evaluation of
the necessity of the transaction,
and reasonableness of the funds
utilization.
(6) An appraisal report from a
professional appraiser or a
certified public accountant's
opinion obtained in compliance
with the preceding
subparagraph.
(7) Restrictive covenants and other
important stipulations
associated with the transaction.
With respect to the types of
transactions listed below, when to
be conducted between a the
Company and its parent or
subsidiaries, or between its
subsidiaries in which it directly or
indirectly holds 100% of the issued
shares or authorized capital, the		 payment until the following matters
have been reviewed by the Audit
Committee and approved by the
board of directors:
(1) The purpose, necessity and
anticipated benefit of the
acquisition or disposal of assets.
(2) The reason for choosing the
related party as a transaction
counterparty.
(3) With respect to the acquisition
of real property or right-of-use
assets thereof from a related
party, information regarding
appraisal of the reasonableness
of the preliminary transaction
terms in accordance with
Subparagraph 3, Items (1) and
(4) of this Article.
(4) The date and price at which the
related party originally acquired
the real property, the original
transaction counterparty, and
that transaction counterparty's
relationship to the Company
and the related party.
(5) Monthly cash flow forecasts for
the year commencing from the
anticipated month of signing of
the contract, and evaluation of
the necessity of the transaction,
and reasonableness of the funds
utilization.
(6) An appraisal report from a
professional appraiser or a
certified public accountant's
opinion obtained in compliance
with the preceding
subparagraph.
(7) Restrictive covenants and other
important stipulations
associated with the transaction.

- 58 -

Amended provisions Current provisions Explanation
1.
2.		 Company's board of directors may
delegate the board Chairman to
decide such matters when the
transaction is within a certain
amount and have the decisions
subsequently submitted to and
ratified by the next board meeting:
Acquisition or disposal of
equipment or right-of-use assets
thereof held for business purposes.
Acquisition or disposal of real
property right-of-use assets held for
business purposes.
Where the position of independent
director has been created in
accordance with the provisions of
the Act, when a matter is submitted
for discussion by the board of
directors pursuant to Paragraph 2,
the board of directors shall take
into full consideration each
independent director's opinions. If
an independent director objects to
or expresses reservations about any
matter, it shall be recorded in the
minutes of the board meeting.
When submitted for discussion by
the Audit Committee pursuant to
Paragraph 2, they shall be approved
by one-half or more of all audit
committee members and submitted
to the board of directors for a
resolution. If approval of more than
half of all audit committee
members as required in the
preceding paragraph is not
obtained, the procedures may be
implemented if approved by more
than two-thirds of all directors, and
the resolution of the audit
committee shall be recorded in the
minutes of the board meeting.
The terms"all audit committee
members"and"all directors"in the
preceding paragraph shall be
counted as the actual number of
persons currently holding those
positions.
If the Company or a subsidiary
thereof that is not a domestic public

- 59 -

Amended provisions Current provisions Explanation
company will have a transaction set
out in paragraph 2 and the
transaction amount will reach 10%
or more of the Company’s total
assets, the Company shall submit
the materials in all the
subparagraphs of paragraph 2 to the
shareholders meeting for approval
before the transaction contract may
be entered into and any payment
made. However, this restriction
does not apply to transactions
between the Company and its
parent company or subsidiaries or
between its subsidiaries.
The calculation of the transaction
amounts referred to in Paragraph 2
and the preceding paragraph shall
be made in accordance with Article
14, Paragraph 1, Subparagraph 8
herein, and"within the preceding
year"as used herein refers to the
year preceding the date of
occurrence of the current
transaction. Items that have been
approved by the shareholders
meeting, Audit Committee and the
board of directors in accordance
with the Procedures need not be
counted toward the transaction
amount.
Article 10
(The preceding text is omitted)
4. Expert assessment report on
intangible assets or on right-to-use
assets thereof
Where the Company acquires or
disposes of memberships,
intangible assets, or right-of-use
assets thereof and the transaction
amount reaches 20% or more of
paid-in capital or NT$300 million
or more, except in transactions with
a domestic government agency, the
Company shall engage a certified
public accountant prior to the date
of occurrence of the event to render
an opinion on the reasonableness of
the transactionprice.		 Article 10
(The preceding text is omitted)
4. Expert assessment report on
intangible assets or on right-to-use
assets thereof
Where the Company acquires or
disposes of intangible assets, right-
of-use assets thereof or
memberships and the transaction
amount reaches 20% of paid-in
capital or NT$300 million or more,
unless otherwise transacting with a
domestic government agency, the
Company shall engage a certified
public accountant prior to the date
of occurrence to render an opinion
on the reasonableness of the
transactionprice.The certified		 In line with the
revision of the
law, the text is
revised as
appropriate.

- 60 -

Amended provisions Current provisions Explanation
public accountant shall comply
with the provisions of Statement of
Auditing Standards No. 20
promulgated by the Accounting
Research and Development
Foundation.
Article 14
1. Declaration items and declaration
standards
(1) Acquisition or disposal of real
property or its right-of-use
assets from or to a related party,
or acquisition or disposal of
assets other than real property
or right-of-use assets thereof
from or to a related party where
the transaction amount reaches
20% or more of paid-in capital,
10% or more of the Company's
total assets, or NT$300 million
or more. However, this shall not
apply to trading of domestic
government bonds or bonds
under repurchase and resale
agreements, or subscription or
redemption of money market
funds issued by domestic
securities investment trust
enterprises.
(2) Merger, demerger, acquisition,
or transfer of shares.
(3) Losses from derivatives trading
reaching the limits on aggregate
losses or losses on individual
contracts set out in the
procedures adopted by the
Company.
(4) The type of asset acquired or
disposed of is equipment or
right-of-use assets thereof for
operating purposes, the
transaction counterparty is not a
related party, and the
transaction amount reaches
NT$500 million or more.
(5) Acquisition or disposal by the
Company in the construction
business of real property for
construction use,and the		 Article 14
1. Declaration items and declaration
standards
(1) Acquisition or disposal of real
property or its right-of-use
assets from or to a related party,
or acquisition or disposal of
assets other than real property
or right-of-use assets thereof
from or to a related party where
the transaction amount reaches
20% or more of paid-in capital,
10% or more of the Company's
total assets, or NT$300 million
or more. However, this shall not
apply to trading of domestic
government bonds or bonds
under repurchase and resale
agreements, or subscription or
redemption of money market
funds issued by domestic
securities investment trust
enterprises.
(2) Merger, demerger, acquisition,
or transfer of shares.
(3) Losses from derivatives trading
reaching the limits on aggregate
losses or losses on individual
contracts set out in the
procedures adopted by the
Company.
(4) The type of asset acquired or
disposed of is equipment or
right-of-use assets thereof for
operating purposes, the
transaction counterparty is not a
related party, and the
transaction amount reaches
NT$500 million or more.
(5) Acquisition or disposal by the
Company in the construction
business of real property for
construction use,and the		 In line with the
revision of the
law, the text is
revised as
appropriate.

- 61 -

Amended provisions Current provisions Explanation
transaction counterparty is not a
related party, and the
transaction amount reaches
NT$500 million.
(6) Where land is acquired under an
arrangement on engaging others
to build on the company's own
land, engaging others to build
on rented land, joint
construction and allocation of
housing units, joint construction
and allocation of ownership
percentages, or joint
construction and separate sale,
and furthermore the transaction
counterparty is not a related
party, and the amount the
company expects to invest in
the transaction reaches NT$500
million.
(7) Where an asset transaction other
than any of those referred to in
the preceding six items, a
disposal of receivables by a
financial institution, or an
investment in the mainland
China area reaches 20% or
more of paid-in capital or
NT$300 million. However, this
shall not apply to the following
circumstances:
1. Trading of domestic
government bondsor
foreign government bonds
with a rating that is not
lower than the sovereign
rating of Taiwan.
2. Where done by professional
investors-securities trading
on securities exchanges or
OTC markets, or
subscription offoreign
government bonds, or of
ordinary corporate bonds or
general bank debentures
without equity
characteristics (excluding
subordinated debt) that are
offered and issued in the
domesticprimarymarket,or		 transaction counterparty is not a
related party, and the
transaction amount reaches
NT$500 million.
(6) Where land is acquired under an
arrangement on engaging others
to build on the Company's own
land, engaging others to build
on rented land, joint
construction and allocation of
housing units, joint construction
and allocation of ownership
percentages, or joint
construction and separate sale,
and furthermore the transaction
counterparty is not a related
party, and the amount the
Company expects to invest in
the transaction reaches NT$500
million.
(7) Where an asset transaction other
than any of those referred to in
the preceding six items, a
disposal of receivables by a
financial institution, or an
investment in the mainland
China area reaches 20% or
more of paid-in capital or
NT$300 million. However, this
shall not apply to the following
circumstances:
1. Trading of domestic
government bonds.
2. Where done by professional
investors-securities trading
on securities exchanges or
OTC markets, or
subscription of ordinary
corporate bonds or general
bank debentures without
equity characteristics
(excluding subordinated
debt) that are offered and
issued in the primary
market, or subscription or
redemption of securities
investment trust funds or
futures trust funds, or
subscription by a securities
firm of securities as

- 62 -

Amended provisions Current provisions Explanation
subscription or redemption
of securities investment trust
funds,or subscription or
redemption of exchange-
traded note,or futures trust
funds, or subscription by a
securities firm of securities
as necessitated by its
undertaking business or as
an advisory recommending
securities firm for an
emerging stock company, in
accordance with the rules of
the Taipei Exchange.
3. Purchase or sale of bonds
under repurchase and resale
agreements, or subscription
or repurchase of money
market funds issued by
domestic securities
investment trust enterprises.
(The rest is omitted)		 necessitated by its
undertaking business or as
an advisory recommending
securities firm for an
emerging stock company, in
accordance with the rules of
the Taipei Exchange.
3. Purchase or sale of bonds
under repurchase and resale
agreements, or subscription
or repurchase of money
market funds issued by
domestic securities
investment trust enterprises.
(The rest is omitted)

- 63 -

[Attachment 7]

Chuwa Wool Industry Co., (Taiwan) Ltd.

Table of Comparison of the Company’s Articles of Incorporation

Amended provisions Current provisions Explanation
Article 1
The Company is incorporated
according to the Company Act and is
named, “ASCENT
DEVELOPMENT CO., LTD.”		 Article 1
The Company is incorporated
according to the Company Act and is
named,“CHUWA WOOL
INDUSTRY CO., (TAIWAN) LTD.”		 In line with the
Company's future
business planning
and development,
the Chinese and
English names of
the Company have
been revised.
Article 2
The Company’s scope of business
are as follows:
1. C306010 Wearing Apparel.
2. C307010 Clothing Accessories.
3. C399990 Other Textile and
Products Manufacturing.
4. F101990 Wholesale of Other
Agricultural, Livestock and
Aquatic Products
5. F104110 Wholesale of Cloths,
Garments, Shoes, Hats,
Umbrellas and Clothing
Accessories.
6. F204110 Retail Sale of Cloths,
Garments, Shoes, Hats,
Umbrellas and Clothing
Accessories.
7. F401010 International Trade.
8. F601010 Intellectual Property
Rights.
9. H701010 Housing and Building
Development and Rental.
10. H701020 Industrial Factory
Development and Rental.
11. H701040 Specific Area
Development.
12. H701050 Investment,
Development and Construction
in Public Construction.
13. H701060 New Towns, New
Community Development.
14. H703090 Real Estate Business.		 Article 2
The Company’s scope of business
are as follows:
1. C306010 Wearing Apparel.
2. C307010 Clothing Accessories.
3. C399990 Other Textile and
Products Manufacturing.
4. F101990 Wholesale of Other
Agricultural, Livestock and
Aquatic Products
5. F104110 Wholesale of Cloths,
Garments, Shoes, Hats,
Umbrellas and Clothing
Accessories.
6. F204110 Retail Sale of Cloths,
Garments, Shoes, Hats,
Umbrellas and Clothing
Accessories.
7. F401010 International Trade.
8. F601010 Intellectual Property
Rights.		 To meet the
Company's
operational
requirements and
business needs, the
Company’s
business scope is
revised.

- 64 -

Amended provisions Current provisions Explanation
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.		 H703100 Real Estate Leasing.
I301030 Electronic Information
Supply Services.
I101110 Textile Consulting.
I501010 Product Designing.
I502010 Clothing Designing.
C104020 Manufacture of Bakery
and Steam Products.
F102040 Wholesale of
Nonalcoholic Beverages.
F102170 Wholesale of Foods
and Groceries.
F106020 Wholesale of Daily
Commodities.
F108040 Wholesale of
Cosmetics.
F203010 Retail Sale of Food,
Grocery and Beverage.
F206020 Retail Sale of daily
commodities.
F208040 Retail Sale of
Cosmetics.
C109010 Manufacture of
Seasoning.
C105010 Edible Oil and Fat
Manufacturing.
C114010 Food Additives
Manufacturing.
C110010 Beverage
Manufacturing.
C104010 Manufacturing of
Sugar Confectionery.
C106010 Grain Husking,
Manufacture of Grain Mill
Products, Starches and Starch
Products.
C199010 Manufacture of
Noodles, Couscous and Similar
Farinaceous Products.
C199990 Manufacture of Other
Food Products Not Elsewhere
Classified.
F102030 Wholesale of Tobacco
and Alcohol.
ZZ99999 All business items that
are not prohibited or restricted by
law, except those subject to
special approval.		 9. H703100 Real Estate Leasing.
10.I101110 Textile Consulting.
11.I501010 Product Designing.
12.I502010 Clothing Designing.
13.ZZ99999 All business items that
are not prohibited or restricted by
law, except those subject to
special approval.
Article 8-1 (This article has been added) 1. This article has
been added.

- 65 -

Amended provisions Current provisions Explanation
The Company’s shareholders’
meeting may be held by means of
visual communication network or
other methods promulgated by the
central competent authority.		 2. Article 172-2 of
the Company
Act was
amended on
December 29,
2021, stipulating
that public listed
companies may
hold their
shareholders’
meeting by
means of visual
communication
network, and
according to
Paragraph 1 of
the Article, the
Company may
explicitly
provide in its
Articles of
Incorporation
that its
shareholders’
meeting can be
held by means
of visual
communication
network or other
methods
promulgated by
the central
competent
authority.
In line with the
competent
authority’s
policy of
promoting the
holding of
shareholders’
meeting by
means of visual
communication
network, and
responding to
the needs of
digital era,
Article 8-1 is
added toprovide

- 66 -

Amended provisions Current provisions Explanation
shareholders
with a
convenient
means of
attending the
shareholders’
meeting, and in
accordance with
the regulations,
it shall be
explicitly
provided that the
Company’s
shareholders’
meeting can be
held by means
of visual
communication
network or other
methods as
announced by
the Ministry of
Economic
Affairs.
Article 18-1
If earnings are found after closing
the fiscal year, the Company shall
first pay income taxes, make up for
any accumulated losses, estimate the
employee remuneration to be
reserved, and set aside 10% as legal
reserve. However when the legal
reserve amounts to the paid-in
capital, this shall not apply. The rest
shall be set aside or reversed into the
special surplus reserve according to
the laws and regulations, or the
regulations of the competent
authority. If earnings are still found,
this will be combined with
accumulated undistributed earnings
as shareholder dividend through
issuance of new shares, and the
board will propose an earnings
distribution motion, and ask the
shareholders meeting to resolve on
the shareholders dividend proposal.
In the case of cash dividend, a
resolution of the board of directors		 Article 18-1
If earnings are found after closing
the quarter, the Company shall first
pay income taxes, make up for any
accumulated losses, estimate the
employee remuneration to be
reserved, and set aside 10% as legal
reserve. However when the legal
reserve amounts to the authorized
capital, this shall not apply. The rest
shall be set aside or reversed into the
special surplus reserve according to
the laws and regulations, or the
regulations of the competent
authority. If earnings are still found,
this will be combined with
accumulated undistributed earnings
of each quarter as shareholder
dividend through issuance of new
shares, and the board will propose an
earnings distribution motion, and ask
the shareholders meeting to resolve
on the shareholders dividend
proposal. In the case of cash
dividend,a resolution of the board of		 In line with the
Company’s
operations and
actual fund usage,
Article 18-1 is
amended.

- 67 -

Amended provisions Current provisions Explanation
shall be obtained.
(The rest is omitted)		 directors shall be obtained.
(The rest is omitted)
Article 20:
(The preceding text is omitted)
THE 42TH amendment was made on
June 24, 2020, and the 43th
amendment made on June 23, 2022.		 Article 20:
(The preceding text is omitted)
The 42th amendment was made on
June 24, 2020.		 Added date of
amendment.

- 68 -

[Attachment 8]

Candidate list of directors and independent directors

Type of
Candidate		 Name Number of shares
(Note)		 Education/work experience
Director Xue Yong Co., Ltd.
Representative:
Hou Chia-Chi		 3,238,000 shares Master/Ph.D., Department of
Bioengineering, Stanford University
Master of Applied Computing, Harvard
University
Bachelor in Applied Mathematics and
Chemical Engineering, Johns Hopkins
University
Chief Operating Officer, Kuoyang
Group
Senior scientist at Pfizer
Director Zu Sheng
International Co.,
Ltd.
Representative:
Huang Ming-Yu		 2,233,000 shares Department of Accounting, Soochow
University
Deputy Director,
PricewaterhouseCoopers, Taiwan
Vice Chairman,
PricewaterhouseCoopers, Taiwan
Director of the 2nd term, 1st session of
the board of directors, and supervisor of
the 2nd session of the board of
supervisors, National Federation of CPA
Associations of ROC
Director Zu Sheng
International Co.,
Ltd.
Representative:
Chen Chien-Ting		 2,233,000 shares Master of Business Studies, National
Taiwan University
Department of Electrical Engineering,
National Taiwan University
Director, Celxpert Energy Corporation
Vice President, China Development
Financial Holding
Corporation/Development Technology
Consulting Co., Ltd.
Senior Vice President, Lian Chuang
Investment Co., Ltd.
Supervisor, Amiccom Electronics
Corporation
Director Yuan Zhong Co.,
Ltd.
Representative:
Hsu Chang		 4,082,000 shares Bachelor of Crime Prevention and
Corrections, Central Police University
Military Police Commander, Ministry of
National Defense
Deputy Commander, Special Service
Center, National Security Bureau

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Type of
Candidate		 Name Number of shares
(Note)		 Education/work experience
Independent
director		 Liu, Teng-Cheng 0 shares Master of International Business
(Management), National Taiwan
University
Bachelor of Laws, National Taiwan
University
Chairman, National Credit Card Center
Chairmans of Taiwan Cooperative
Bank, Bank of Taiwan, Hua Nan
Financial Holdings Co. Ltd.
Minister, Deputy Minister, Minister of
Finance
Independent
director		 Liu, Chieh-Min 0 share Masters of Law, Chinese Culture
University
Attorney-at-law, Tiao Ding Legal
Workshop
Former Supreme Court Justice
Independent
director		 Tien, Hung-Mao 0 shares PhD in Political Science, University of
Wisconsin
Chairman and President, Institute for
National Policy Research
Senior Minister, Office of the President
Chairman,Straits Exchange Foundation

Note: The number of shares held as of the book closure date for the current shareholders' meeting (April 25, 2022).

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[Attachments 9]

Concurrent positions of director candidates in other companies

Job title Name Name of other company Concurrentposition held
Director Xue Yong Co., Ltd.
Representative: Hou
Chia-Chi		 Ji Jia Industrial Co.,Ltd. Chairman
Zhuo Jia Industrial Co.,Ltd. Chairman
Xue Yong Co., Ltd. Representative of juristic
person and Chairman
Han Yang Global Co., Ltd. Representative of juristic
person and Chairman
Hanshin Shopping Plaza Co.,
Ltd.		 Representative of juristic
person and Chairman
Hanshin Department Store Co.,
Ltd.		 Representative of juristic
person and Chairman
Lian Zhong International Asset
Management Co.,Ltd.		 Representative of juristic
person and Chairman
Chong Shen Development
IndustryCo.,Ltd.		 Representative of juristic
person and Chairman
Aquis Sports Culture Co., Ltd. Representative of juristic
person and Chairman
HCW Investment Co., Ltd. Representative of juristic
person and Chairman
Grand Hi-Lai Hotel Co., Ltd. Representative of juristic
person and Deputy
Chairman
KHH Arena Corporation Representative of juristic
person director
Ji Yang Construction and
Development Co.,Ltd.		 Representative of juristic
person director
Hanshin Asset Management
Co.,Ltd.		 Representative of juristic
person director
Hanshin Investment Co., Ltd. Representative of juristic
person director
Kuo Yang Construction Co.,
Ltd.		 Representative of juristic
person director
Xing Ji International Co., Ltd. Representative of juristic
person director
Jollify4ever Ltd. Representative of juristic
person director
Xin Xi Venture Co., Ltd. Representative of juristic
person director
VERISIK Inc. Director

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Job title Name Name of other company Concurrentposition held
Director Zu Sheng
International Co., Ltd.
Representative:
Huang Ming-Yu		 Chuan Cheng Investment
ConsultingCo.,Ltd.		 Chairman
Chuan Cheng Wang Investment
Co.,Ltd.		 Chairman
Hotai Finance Co.,Ltd. Independent director
Zinwell Corporation Independent director
TRK Corporation Independent director
Nankang Rubber Tire Corp.,
Ltd.		 Representative of juristic
person director
Crazy Play Inc. Representative of juristic
person director
Bole Film Co., Ltd. Representative of juristic
person director
Jollify4ever Ltd. Representative of juristic
person director
Xin Xi Venture Co., Ltd. Representative of juristic
person director
Director Zu Sheng
International Co., Ltd.
Representative: Chen
Chien-Ting		 Celxpert Energy Corporation Director

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[Appendix1]

Chuwa Wool Industry Co., (Taiwan) Ltd. Articles of Incorporation

Chapter I General Principles

Article 1 The Company is incorporated according to the Company Act and is named, “CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.”

  • Article 2 The Company’s scope of business are as follows:

  • C306010 Wearing Apparel.

  • C307010 Clothing Accessories.

  • C399990 Other Textile and Products Manufacturing.

  • F101990 Wholesale of Other Agricultural, Livestock and Aquatic Products

  • F104110 Wholesale of Cloths, Garments, Shoes, Hats, Umbrellas and Clothing Accessories.

  • F204110 Retail Sale of Cloths, Garments, Shoes, Hats, Umbrellas and Clothing Accessories.

  • F401010 International Trade.

  • F601010 Intellectual Property Rights.

  • H703100 Real Estate Leasing.

  • I101110 Textile Consulting.

  • I501010 Product Designing.

  • I502010 Clothing Designing.

  • ZZ99999 All business items that are not prohibited or restricted by law, except those subject to special approval.

Article 2-1 The Company's investment is handled in accordance with the resolution of the board of directors, and the total investment may exceed 40% of the paid-in capital.

Article 2-2 The Company, may due to business needs, provide endorsements and guarantees in accordance with the Company’s Procedures for Endorsements and Guarantees.

Article 3 The Company is headquartered in Taipei City, and may establish domestic or foreign branches subject to the board's approval.

Chapter II Shares

Article 4 The Company's total capital is NT$1,100,000,000 divided into 110,000,000 shares with a par value of NT$10 per share. The board of directors is authorized to issue the unissued shares in installments.

The Company’s shares are registered, and affixed with the signature or seal of the director representing the Company, and shall be legally authenticated before issuance.

The Company may be exempted from printing any share certificate for the shares issued, but shall register the issued shares with a centralized securities depositary enterprise.

  • Article 5 The administration of shareholder services by the Company shall be handled in accordance with the "Regulations Governing the Administration of Shareholder

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Services of Public Companies”as published by the competent authority.

  • Article 6 Changes to the shareholder register shall be suspended within 60 days prior to the shareholders meeting, 30 days prior to the special shareholders meeting, or 5 days prior to the record date for the distribution of dividends, bonuses or other interests.

  • Article 6-1 When the Company issues new shares, employees entitled to receive shares may include employees of the parent or subsidiaries of the Company meeting certain specific requirements set by the board of directors or personnel authorized by the board.

When the Company buys back treasury shares and transfers them in accordance with the Company Act, the employees entitled to receive the shares may include employees of the parent or subsidiaries of the Company meeting certain specific requirements set by the board of directors or personnel authorized by the board.

When the Company issues a share subscription warrant, employees entitled to receive the share subscription warrant may include employees of the parent or subsidiaries of the Company meeting certain specific requirements set by the board of directors or personnel authorized by the board.

When the Company issues restricted stock for employees, employees entitled to receive shares may include employees of the parent or subsidiaries of the Company meeting certain specific requirements set by the board of directors or personnel authorized by the board.

Chapter III Shareholders' Meeting

  • Article 7 Shareholders' meetings include ordinary meetings and extraordinary meetings. Ordinary meetings shall be convened by the board of directors within six months after the end of each fiscal year, while extraordinary meetings shall be held when necessary.

  • Article 8 Notice of the date, time, place, and purpose of shareholder meetings shall be dispatched to each shareholder at least 30 days before the ordinary meetings, and at least 15 days before extraordinary meetings. The aforementioned convening notice to shareholders who own less than 1,000 registered shares may be given in the form of a public announcement.

  • Article 9 Each share is entitled to one vote. Unless otherwise required by the Company Act, shareholders' resolutions shall be adopted by at least a majority of the votes of shareholders present at a shareholders' meeting who hold a majority of all issued and outstanding shares of the Company.

  • Shareholders may exercise their voting rights by electronic means during the Company’s shareholders’ meeting. A shareholder exercising voting rights by electronic means shall be regarded as having personally attended the meeting. Its related matters shall be handled in accordance with the laws and regulations.

  • Article 10 Any shareholder, who for any reason is unable to attend shareholders' meetings, may appoint a proxy to attend a shareholders’ meeting in his/her/its behalf by executing a proxy printed by the Company, stating therein the scope of power authorized to the proxy. When a person who acts as the proxy for two or more shareholders, the number of voting power represented by him/her shall not exceed 3% of the total number of voting shares of the Company. Otherwise, the portion of excessive voting power shall not be counted.” Unless otherwise stipulated by the Company Act, the rules for appointing a proxy by shareholders to attend shareholders' meeting shall be handled in accordance with the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” issued by the competent authority.

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Chapter IV Directors

  • Article 11 The Company's board of directors has five to seven members (including independent directors). The election of directors adopts a candidates nomination system in accordance with Article 192-1 of the Company Act, where shareholders elect the directors from the nominees list during the shareholders meeting. The term of office of a director is three years, and he/she may be eligible for re-election. In case no election of new directors is effected after expiration of the term of office of existing directors, the term of office of out-going directors shall be extended until the time new directors have been elected and assumed their office. When the number of vacancies in the board of directors of a company equals to one third of the total number of directors, the board of directors shall call, within 60 days, a special meeting of shareholders to elect succeeding directors to fulfill the unexposed term of office of the predecessor.

Among the number of directors in the preceding paragraph, there shall be at least two independent directors and no less than one-fifth of the seats. Regulations governing the professional qualifications, restrictions on shareholdings and concurrent positions held, method of nomination, and other matters for compliance with respect to independent directors shall be prescribed by the competent authority.

Except where otherwise provided by the Company Act, the resolution of the board of directors shall require the approval of a majority of the directors in attendance at a board of directors meeting attended by a majority of all directors, and the minutes shall be signed or sealed by the chair. A director who is unable to attend in person may delegate other directors to attend on his/her behalf, but an independent director may only delegate another independent director to attend on his/her behalf. A director may accept the appointment to act as the proxy of one other director only.

  • Article 11-1 The convening of a board of directors meeting shall be notified to each director and at least seven days in advance. However, in case of any emergency, a board meeting may be convened at any time.

The notice set forth in the preceding paragraph shall state the reasons for calling the meeting, and be effected in writing, or by means of email or fax.

  • Article 12 The Company’s business operations shall be decided by a board resolution.

  • Article 13 The Company shall appoint one Chairman, and the directors may elect one person among themselves as the Vice Chairman where necessary. The Chairman shall internally preside the shareholders' meeting and the board meeting, and convene the board meeting; and shall externally represent the Company. If the Chairman is unable to perform such duties due to leave of absence or any other reason, the Vice Chairman shall act in this capacity on the Chairman's behalf. If the Vice Chairman is also unavailable or is non-existent, the Chairman may appoint one of the directors to act on the Chairman's behalf. If the Chairman does not appoint a delegate, one shall be elected among the directors to act on the Chairman's behalf.

  • Article 14 The Company’s board of directors may set up functional committees, and the members’ qualifications, exercising of authority and other matters for compliance shall be handled in accordance with the relevant laws and regulations prescribed by the board of directors. The Company setting up an Audit Committee according to Article 14-4 of the Securities and Exchange Act, shall have the number of members, term of office, powers and rules of procedure for meetings of the audit committee specified in the audit committee charter in accordance with the “Regulations Governing the Exercise of Powers by Audit Committees of Public Companies”.

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Article 15 All directors may be paid transportation allowance, and the amount shall be determined by the board of directors.

The board is delegated to determine the remuneration to directors based on the individual’s participation in the operation of the Company, the value of contribution, and normal industry standard.

  • Article 15-1 The Company shall take out directors liability insurance with respect to liabilities resulting from exercising their duties during their terms of occupancy so as to reduce and spread the risk of material harm to the company and shareholders arising from the wrongdoings or negligence of a director.

Chapter V Manager

Article 16 The Company shall have one president, and one or more managerial personnel, whose appointment, discharge and remuneration shall be handled in accordance with Article 29 of the Company Act.

Chapter VI Accounting

  • Article 17 The fiscal year of the Company starts on January 1 and ends on December 31. At the close of each fiscal year, the board of directors shall prepare the following statements and records and shall forward the same to the Audit Committee for their review not later than the 30th day prior to the meeting date of a general meeting of shareholders:

  • Business report.

  • Financial statements.

  • Surplus earning distribution or loss off-setting proposals.

  • Article 18 Before deducting employees’ remuneration and directors’ from the current profit before tax, the Company shall cover the accumulated losses. If there is still surplus, the Company shall allocate 0.5% to 5% as employees’ remuneration and not more than 2% as directors' remuneration.

The distribution ratio and decision of employees’ remuneration, directors’ remuneration, and whether the employees' remuneration is to be distributed in the form of shares or cash, shall be resolved by the majority of the directors at a board meeting at which over two-thirds of the directors are present and reported to the shareholders' meeting.

Employees entitled to receive the shares or cash as employees’ remuneration may include employees meeting certain specific requirements set by the board of directors or personnel authorized by the board.

  • Directors’ remuneration may only be distributed in the form of cash, and the Company’s independent directors do not participate in the annual remuneration distribution.

  • Article 18-1 If earnings are found after closing the quarter, the Company shall first pay income taxes, make up for any accumulated losses, estimate the employee remuneration to be reserved, and set aside 10% as legal reserve. However when the legal reserve amounts to the authorized capital, this shall not apply. The rest shall be set aside or reversed into the special surplus reserve according to the laws or the regulations of the competent authority. If earnings are still found, this will be combined with accumulated undistributed earnings of each quarter as shareholder dividend through

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issuance of new shares, and the board will propose an earnings distribution motion, and ask the shareholders meeting to resolve on the shareholders dividend proposal. In the case of cash dividend, a resolution of the board of directors shall be obtained.

If there are earnings following the Company's annual final accounting, these shall first be used to pay taxes and to offset cumulative losses. 10% of any remaining balance shall be allocated to the legal surplus reserve. However when the legal reserve amounts to the authorized capital, this shall not apply. The rest shall be set aside or reversed into the special surplus reserve according to the laws or the regulations of the competent authority. If earnings are still found, this will be combined with accumulated undistributed earnings as shareholder dividend through issuance of new shares, and the board will propose an earnings distribution motion, and ask the shareholders meeting to resolve on the shareholders dividend proposal.

If all or part of the dividend or legal reserve and capital reserve is to be distributed in the form of cash, it shall be approved by the majority of the directors at a board meeting in which over two-thirds of the directors are present, and then reported to the shareholders’ meeting.

  • Article 18-2 In response to the current competitive and changing business environment and the continually expanding scale, the Company’s dividend distribution shall take into consideration factors such as future capital requirements, financial structure and interests of shareholders, in the form of shares and cash dividends, where the cash dividends shall not be less than 20% of total dividends.

Chapter VII Supplementary Provisions

  • Article 19 Any matters not addressed in the Articles of Incorporation shall be governed by the Company Act.

  • Article 20 The Articles of Incorporation was established on Aug 19, 1964; the 1st amendment was made on March 2, 1967; the 2nd amendment on May 16, 1967; the 3rd amendment on March 5, 1968; the 4th amendment on March 24, 1970; the 5th amendment on May 31, 1971; the 6th amendment on April 29, 1972; the 7th amendment on April 26, 1973; the 8th amendment on December 21, 1974; the 9th amendment on March, 30, 1977; the 10th amendment on July 15, 1978; the 11th amendment on August 10, 1980; the 12th amendment on April 11, 1985; the 13th amendment on March 27, 1982; the 14th amendment on April 2, 1983; the 15th amendment on September 5, 1983; the 16th amendment on April 27, 1985; the 17th amendment on July 17, 1985; the 18th amendment on April 26, 1986; the 19th amendment on June 28, 1986; the 20th amendment on April 25, 1987; the 21st amendment on April 2, 1988; the 22nd amendment on May 16, 1988; the 23rd amendment on April 4, 1989; the 24th amendment on April 23, 1990; the 25th amendment on April 11, 1991; the 26th amendment on April 15, 1993; the 27th amendment on May 2, 1996; the 28th amendment on May 4, 1999; the 29th amendment on May 23, 2000; the 30th amendment on May 8, 2001; the 31st amendment on May 22, 2003; the 32nd amendment on May 27, 2004; the 33rd amendment on June 14, 2005; the 34th amendment on June 9, 2006; the 35th amendment on June 25, 2010; the 36th amendment on June 15, 2012:the 37th amendment on June 29, 2016; the 38th amendment on June 6, 2017; the 39th amendment on June 8, 2018; the 40th amendment on June 24, 2019; the 41st amendment on February 27, 2020; and the 42nd amendment on June 24, 2020.

Chairman Hou, Chia-Chi

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[Appendix 2]

Chuwa Wool Industry Co., (Taiwan) Ltd.

Rules of Procedure for Shareholders’ Meeting

Amendments passed at General Shareholders’ Meeting on August 12, 2021

  • Article 1 To establish a strong governance system and sound supervisory capabilities for the Company’s shareholders meetings, and to strengthen management capabilities, these Rules are adopted pursuant to Article 5 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.

  • Article 2 The rules of procedures for the Company's shareholders meetings, except as otherwise provided by law, regulation, or the Articles of Incorporation, shall be as provided in these Rules.

  • Article 3 A shareholders meeting shall, unless otherwise provided for by the laws and regulations, be convened by the board of directors.

  • The Company shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors and upload them to the Market Observation Post System (MOPS) 30 days before the date of a regular shareholders meeting or 15 days before the date of a special shareholders meeting. The Company shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS 21 days before the date of the regular shareholders meeting or 15 days before the date of the special shareholders meeting. In addition, 15 days before the date of the shareholders meeting, the Company shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent designated thereby, as well as being distributed on-site at the meeting place.

The reasons for convening a shareholders meeting shall be specified in the meeting notice and public announcement. The notice may be effected by means of electronic transmission with the prior consent of the recipients.

Election or dismissal of directors, amendments to the Articles of Incorporation, capital reduction, application for cessation of public offering, release of directors from noncompetition restrictions, capital increase from earnings, capital increase from surplus, the dissolution, merger, or demerger of the corporation, any matter under Article 185, paragraph 1 of the Company Act, any matter under Article 26-1 and Article 43-6 of the Securities and Exchange Act, or any matter under Article 56-1 and Article 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, shall be set out in the notice of the reasons for convening the shareholders meeting and explain its main content. None of the above matters may be raised by an extraordinary motion.

The reasons for convening a shareholders meeting shall indicate the re-election of directors and the tenure of office of such directors. After re-election is completed at

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the shareholders' meeting, the tenure dates may not be changed by an extraordinary motion or other method at the same shareholders' meeting.

A shareholder holding 1% or more of the total number of issued shares may submit to the Company a proposal for discussion at a regular shareholders meeting. The number of items so proposed is limited to one only, and no proposal containing more than one item will be included in the meeting agenda. When the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda. Directors may raise a proposal to urge the Company to promote public interest or fulfill social responsibilities, the procedure of which shall be conducted in accordance with relevant regulations of Article 172-1 under the Company Act stipulating that directors may only raise one proposal; proposals beyond the first one will not be included in the proposals for discussion.

The Company shall announce the acceptance of shareholders’ proposals, written or electronic acceptance methods, acceptance locations, and acceptance period before the book closure date and before the General Shareholders' Meeting. The acceptance period may not be shorter than ten days.

Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the regular shareholders meeting and take part in discussion of the proposal.

Prior to the date for issuance of notice of a shareholders meeting, the Company shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. The board of directors shall record the reasons for not including proposals in the shareholders' meeting.

Article 4 For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by the Company and stating the scope of the proxy's authorization.

A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders meeting, and shall deliver the proxy form to the Company five days before the date of the shareholders meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail, unless a declaration is made to cancel the previous proxy appointment.

After the service of the power of attorney of a proxy to the Company, in case the shareholder issuing the said proxy intends to attend the shareholders’ meeting in person or to exercise his/her/its voting power in writing or by way of electronic transmission , a proxy rescission notice shall be filed with the Company two days prior to the date of the shareholders’ meeting as scheduled in the shareholders’ meeting notice so as to rescind the proxy at issue, otherwise, the voting power exercised by the authorized proxy at the meeting shall prevail.

Article 5 The venue for a shareholders meeting shall be the premises of the Company, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

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Article 6 The Company shall specify in its shareholders meeting notices the time during which attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel assigned to handle the registrations.

Shareholders or proxies (hereinafter referred to as “shareholders”) shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. The Company may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.

The Company shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in.

The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors, pre-printed ballots shall also be furnished.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

Article 7 Shareholders' meetings convened by the Chairman shall be chaired by the Chairman. If the Chairman is unable to perform such duties due to leave of absence or any other reason, the Chairman may appoint one of the directors to act on the Chairman's behalf. If the Chairman does not appoint a delegate, one shall be elected among the directors to act on the Chairman's behalf.

When a director serves as chair, as referred to in the preceding paragraph, the director shall be one who has held that position for six months or more and who understands the financial and business conditions of the company. The same shall be true for a representative of a juristic person director that serves as chair.

It is advisable that shareholders meetings convened by the board of directors be chaired by the Chairman and be attended by a majority of the directors, at least one independent director in person, and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minutes.

If the shareholders' meeting is called by a person entitled to do so other than the Chairman, that person shall act as the Chairman. If two or more persons are entitled to call the shareholders' meeting, those persons shall elect one person to act as the Chairman.

The Company may designate retained lawyers, certified public accountants or relevant personnel to attend the shareholders’ meeting.

Article 8 The Company, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures.

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The recorded materials of the preceding paragraph shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

Article 9 Attendance at shareholders meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in, plus the number of shares whose voting rights are exercised by correspondence or electronically.

The chair shall call the meeting to order at the appointed meeting time, and simultaneously announce information in relation to the number of shares that are not entitled to vote and the number of shares in attendance.

However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act. A notice of such tentative resolution shall be given to each of the shareholders, and reconvene a shareholders’ meeting within one month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

Article 10 If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. Relevant motions (including extraordinary motions and amendments to the original motions) shall be voted by poll. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting.

The above provision applies mutatis mutandis to cases where the meeting is convened by any person, other than the board of directors, entitled to convene such meeting.

Unless by the resolution of the shareholders’ meeting, the chair may not declare the meeting ended until all items on the agenda (including extemporaneous motions) arranged as per the preceding two paragraphs have been completed. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed, call for a vote, and schedule sufficient time for voting.

Article 11 Before a shareholder present at the meeting speaks, he/she shall first fill out a statement slip stating therein the main points of the statement, the shareholder number (or the

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attendance serial number) and account name, so that the chair may determine the order of speaking.

A shareholder present at the meeting that merely submits a statement slip without speaking is considered not to have spoken. If the contents of the statement do not conform to the contents of the statement slip, the contents of the statement shall govern.

Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

Unless given consent by the chair and the speaking shareholder, other shareholders may not speak to interrupt when a shareholder is speaking; otherwise the chair shall stop the interruption.

In the event an juristic person shareholder assigns two or more representatives to attend the shareholders’ meeting, only one of the representatives may speak on any single agenda item.

After a shareholder present at the meeting speaks, the chair may reply in person or assign relevant personnel to reply.

Article 12 Voting of the shareholders' meeting shall be determined by the number of shares represented at the meeting.

With respect to resolutions of shareholders meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of the Company, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

The number of shares for which voting rights may not be exercised under the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

With the exception of trust enterprises or stock affairs agencies approved by the competent securities authority, the votes that may be cast by one proxy representing two or more shareholders shall not exceed 3% of the votes of total shares issued; any votes in excess of that limit shall not be counted.

Article 13 Each share is entitled to one vote; except when the shares are restricted shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act.

Voting rights shall be exercised electronically and may be exercised in writing during a shareholders' meeting. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. Shareholders who exercise voting rights in writing or electronically are deemed to have attended the shareholders' meeting in person. However, such shareholders are considered to have waived their rights with respect to the extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that the Company avoid the submission of extraordinary motions and amendments to original proposals.

A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company two days before the date of the shareholders meeting. When duplicate

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declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, two business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.

Unless otherwise provided by the Company Act or the Company’s Articles of Incorporation, a proposal shall be approved by the consent of more than half of the votes of shares represented by shareholders present. At the time of a vote, for each proposal, the chair or a person designated by the chair shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

When there is an amendment or alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. If any of these proposals is approved, alternative proposals shall be treated as rejected and not be voted on separately.

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company.

Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

  • Article 14 The election of directors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and their number of votes cast, and those unelected and their number of votes cast.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitors and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

  • Article 15 Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form.

The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS. The meeting minutes shall detail the date and venue of the meeting, the chair's name, the method of resolution, and the proceeding and voting results of various meeting agenda items (including the

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statistical tallies of the numbers of votes). For election of directors, the number of votes of each successful candidate shall be disclosed. The minutes shall be retained for the duration of the existence of the Company.

  • Article 16 On the day of a shareholders meeting, the Company shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders meeting.

  • If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or Taiwan Stock Exchange Corporation regulations, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

  • Article 17 The meeting personnel handling the shareholders' meeting shall bear identification cards or armbands.

  • The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

At the place of a shareholders meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the chair may prevent the shareholder from doing so.

When a shareholder violates the rules of procedure and defies the chair's correction, obstructing the proceedings and refusing to heed calls to stop, the chair may direct the proctors or security personnel to escort the shareholder from the meeting.

  • Article 18 When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.

A resolution may be adopted at a shareholders meeting to defer or resume the meeting within five days in accordance with Article 182 of the Company Act.

  • Article 19 These Rules shall come into force on the approval of the shareholders’ meeting, as shall any amendment.

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[Appendix 3]

Chuwa Wool Industry Co., (Taiwan) Ltd.

Procedures for Acquisition or Disposal of Assets

Amendments passed at General Shareholders’ Meeting on August 12, 2021

Article 1 Purpose

These Procedures are established to protect investors and implement information disclosure

  • Article 2

  • Legal Basis

These Procedures are adopted in accordance with the provisions of Article 36-1 of the Securities and Exchange Act and relevant regulations of the Financial Supervisory Commission (“FSC”).

Article 3

Scope of Assets

  1. Investments in shares, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depository receipts, call (put) warrants, beneficial interest securities, asset-backed securities, etc.

  2. Real property (including land, houses and buildings, investment property, and construction enterprise inventory) and equipment.

  3. Memberships.

  4. Patents, copyrights, trademarks, franchise rights, and other intangible assets.

  5. Right-of-use assets.

  6. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables).

  7. Derivatives.

  8. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law.

  9. Other major assets.

Article 4 Definitions of terms

  1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, longterm leasing contracts, or long-term purchase (sales) contracts.

  2. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and

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Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under Article 156-3 of the Company Act.

  1. Related party, subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

  2. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.

  3. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier. However, for investments that require the approval of the competent authority, the date of occurrence shall be determined as the earlier between the above dates and the date approved by the competent authority.

  4. Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.

  5. Investment professional: Refers to financial holding companies, banks, insurance companies, bill finance companies, trust enterprises, securities firms operating proprietary trading or underwriting business, futures commission merchants operating proprietary trading business, securities investment trust enterprises, securities investment consulting enterprises, and fund management companies, that are lawfully incorporated and are regulated by the competent financial authorities of the jurisdiction where they are located.

  6. Securities exchange: Domestic securities exchange refers to the Taiwan Stock Exchange Corporation; foreign securities exchange refers to any organized securities exchange market that is regulated by the competent securities authorities of the jurisdiction where it is located.

  7. Over-the-counter venue ("OTC venue", "OTC"): Domestic OTC venue refers to a venue for OTC trading provided by a securities firm in accordance with the Regulations Governing Securities Trading on the Taipei Exchange; foreign OTC venue refers to a venue at a financial institution that is regulated by the foreign competent authority and that is permitted to conduct securities business.

  8. Within the preceding year as used in the preceding paragraph refers to the year preceding the date of occurrence of the current acquisition or disposal of assets. Items duly announced in accordance with the Procedure need not be counted toward the transaction amount.

  9. "Latest financial statements" refers to the audited or reviewed financial statements duly disclosed by the Company prior to the acquisition or disposal of assets.

Article 5 Limits on investment in real property and right-of-use assets thereof or securities for non-business use.

The limits for acquiring the above assets by the Company and its subsidiaries are as follows:

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  1. The total amount of non-business real estate and its right-of-use assets shall not exceed 50% of net worth.

  2. The total investment amount of long-term and short-term securities shall not exceed 80% of net worth.

  3. The investment amount on individual securities shall not exceed 50% of net worth.

Article 6 Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall meet the following requirements:

  1. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received.

  2. May not be a related party or de facto related party of any party to the transaction.

  3. If the Company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.

When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraph shall comply with the following:

  1. Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence.

  2. When examining a case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers.

  3. They shall undertake an item-by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion.

  4. They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with applicable laws and regulations.

  5. Article 7 Procedure for Acquisition or Disposal of Real Property or Equipment

  6. Assessment and Operating Procedures

The Company's acquisition or disposal of real property, equipment, or right-ofuse assets thereof shall be handled in accordance with the Company's internal control system and procedures for property, plant and equipment cycle.

  1. Procedure for Determining Transaction Conditions and Authorized Amounts

  2. (1) When acquiring or disposing of real property or its right-of-use assets, the announced current value, appraised value, actual transaction price of

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neighboring real property, etc., are referenced to determine the transaction conditions and transaction price, and to prepare an analysis report and submit it to the Chairman. If the amount is less than NT$300 million, it shall be approved by the Chairman and subsequently reported at the most recent board meeting; for an amount exceeding NT$300 million, approval by the board of directors is required.

  • (2) Acquisition or disposal of equipment shall be conducted either by price inquiry, price comparison, price negotiation or tender. If the amount is less than NT$5 million (include), approval shall be obtained from the President. If the amount is above NT$5 million and below NT$150 million (include), approval from the board of directors shall be obtained. Those exceeding NT$500 million shall be approved by the board of directors after being approved by the Chairman.

3. Implementation Unit

When the Company acquires or disposes of real property, equipment, or right-ofuse assets thereof, it shall submit for approval in accordance with approval authority stipulated in the preceding paragraph; the using department and management unit shall be responsible for execution.

  1. Appraisal reports of real property or equipment

In acquisition or disposal of real property, equipment or right-of-use assets thereof, where a transaction amount reaches 20% of the Company’s paid-in capital or NT$300 million or more, unless otherwise transacting with a domestic government agency, engaging others to build on the land owned or rented by the Company, or acquiring or disposing of equipment for operating purposes or the right-of-use assets thereof, the Company shall obtain an appraisal report prior to the date of occurrence from a professional appraiser, and shall further comply with the following provisions:

  • (1) In the event that it is necessary to set a price limit or a specific price or a special price as a reference basis for the transaction price due to special circumstances, the transaction shall be submitted to the board for approval in advance. The above procedures shall also be followed in case the transaction terms are changed subsequently.

  • (2) Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.

  • (3) Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

  • The discrepancy between the appraisal result and the transaction amount is 20% or more of the transaction amount.

  • The discrepancy between the appraisal results of two or more professional appraisers is 10% or more of the transaction amount.

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  • (4) No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date. However, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

  • (5) Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be used as a substitute for the appraisal report or the certified public accountant’s opinion.

Article 8 Procedure for Acquisition or Disposal of Securities

  1. Assessment and Operating Procedures

The purchase and sale of long-term and short-term securities of the Company shall be handled in accordance with the Company's internal control system and investment cycle procedures.

  1. Procedure for Determining Transaction Conditions and Authorized Amounts

  2. (1) The trading of securities on centralized trading markets or the Taipei Exchange shall be determined by the responsible unit according to market conditions. If the amount is less than NT$100 million (inclusive), it shall be approved by the Chairman. Those exceeding NT$100 million shall be approved by the board of directors.

  3. (2) For the purchase and sale of securities not on the centralized exchange market or the business office of a securities firm, the Company shall, prior to the date of occurrence of the event, obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price; also to be considered are its net worth per share, profitability, and future development potential, etc., if the amount of which is less than NT$100 million (inclusive), it shall be approved by the Chairman. Those exceeding NT$100 million shall be approved by the board of directors.

  4. Implementation Unit

When the Company invests in long-term and short-term securities, upon approval by the approval authority in the preceding paragraph, the investment unit shall be responsible for their implementation.

  1. Obtain expert opinion

  2. (1) If the dollar amount of the acquiring or disposing of securities is 20% of the Company's paid-in capital or NT$300 million or more, the Company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the certified public accountant needs to use the report of an expert as evidence, he or she shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the FSC.

    1. Securities acquired through cash contribution in an incorporation by promotion or by public offering in accordance with the Company Act, with the further requirement that the rights represented by the acquired securities be commensurate with the proportion of capital contributed.

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  1. Participation in subscription to an issue of securities issued at face value by an issuing company.

  2. Participation in subscription to securities issued by a direct or indirect 100% owned subsidiary that is carrying out a cash capital increase, or participation in subscription to securities among 100% owned subsidiaries.

  3. Securities listed and traded on the Taiwan Stock Exchange or the Taipei Exchange or emerging stocks.

  4. Domestic government bonds, or bonds under repurchase or reverse purchase agreements.

  5. Publicly offered funds.

  6. TWSE or TPEx listed stocks acquired or disposed of in accordance with the TWSE or TPEx rules governing the purchase of listed securities by reverse auction or rules governing the auction of listed securities.

  7. Participation in subscription to shares issued by a public company for a cash capital increase or domestic subscription to corporate bonds (including financial debentures), with the further requirement that the securities acquired are not privately placed securities.

  8. Subscription to a domestic privately placed fund before the establishment of the fund in accordance with Article 11, paragraph 1 of the Securities Investment Trust and Consulting Act, or subscription to or redemption of a domestic privately placed fund, provided that the trust agreement for the fund specifies an investment strategy in which, aside from securities margin transactions and open positions held in securities-related products, the investment scope of the remaining portion is the same as that of a publicly offered fund.

  9. (2) Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be used as a substitute for the appraisal report or the certified public accountant’s opinion.

Article 9 Procedures for Related Party Transactions

  1. When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted in accordance with Article 7 to Article 10 of the Procedures, and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10% or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a certified public accountant's opinion. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article 10, Paragraph 1. In addition, when judging whether a transaction counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.

  2. Appraisal and Operating Procedures

When the Company intends to acquire or dispose of real property or right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or right-of-use assets thereof from or to a related party and the transaction amount reaches 20% or more of paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more, except when

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trading of domestic government bonds or bonds under repurchase and resale agreements, or subscribing or redeeming domestic money market funds issued by securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the audit committee and ratified by board of directors:

  • (1) The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.

  • (2) The reason for choosing the related party as a transaction counterparty.

  • (3) With respect to the acquisition of real property or right-of-use assets thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Subparagraph 3, Items (1) and (4) of this Article.

  • (4) The date and price at which the related party originally acquired the real property, the original transaction counterparty, and that transaction counterparty's relationship to the Company and the related party.

  • (5) Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.

  • (6) An appraisal report from a professional appraiser or a certified public accountant's opinion obtained in compliance with the preceding subparagraph.

  • (7) Restrictive covenants and other important stipulations associated with the transaction.

  • Reasonableness assessment of transaction costs:

  • (1) Where the Company acquires real property or right-of-use assets thereof from a related party, the Company shall evaluate the reasonableness of the transaction costs by the following means:

    1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. Necessary interest on funding is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.

    2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70% or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this may not apply where the financial institution is a related party of one of the trading counterparties.

  • (2) Where land and structures thereupon are combined as a single property purchased or leased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph.

  • (3) When the Company acquires real property or right-of-use assets thereof from a related party and appraises the cost of the real property or right-of-

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use assets thereof in accordance with subparagraph 3, Item (1) and (2), it shall also engage a certified public accountant to check the appraisal and render a specific opinion.

  • (4) Where the Company acquires real property or right-of-use assets thereof from a related party and the results of appraisals conducted in accordance with Subparagraph 3, Item (1) and (2) of this Article are uniformly lower than the transaction price, it shall process in accordance with Subparagraph 3, Item (5) of this Article. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a certified public accountant have been obtained, this restriction may not apply:

  • Where the related party acquires undeveloped or leased land for construction, it may submit proof in compliance with one of the following conditions:

    • (1) Where undeveloped land is appraised in accordance with the means in the Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.

    • (2) Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or leasing practices.

  • For acquiring real property, or obtaining real property right-of-use assets through leasing from a related party, the Company provides evidence to prove that the terms and conditions of the transaction are similar to the terms of completed transactions in an adjacent area of a similar size by unrelated parties within one year. Completed transactions involving neighboring or closely valued parcels of land in the preceding in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; “similar size” in principle refers to transactions completed by unrelated parties for properties with a land area of no less than 50% of the property in the proposed transaction; “within one year” refers to the year preceding the date of occurrence of the acquisition of the real property or right-of-use assets thereof.

  • (5) Where the Company acquires real property or right-of-use assets thereof from a related party and the results of appraisals conducted in accordance with Subparagraph 3, Items (1) and (2) of this Article are uniformly lower than the transaction price, the following steps shall be taken. When the Company has set aside a special reserve under the preceding for its investments in publicly traded stocks accounted for using the equity method, it may not utilize the special reserve until it has recognized a loss on decline

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in market value of the assets it purchased or leased at a premium, or they have been disposed of, or the leasing contract has been terminated, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.

  1. A special reserve shall be set aside by the Company in accordance with Paragraph 1, Article 41 of Securities and Exchange Act against the difference between transaction price and appraised cost of the real property or right-of-use assets thereof, and may not be distributed or used for capital increase or issuance of bonus shares. If the Company’s investor is a public company that uses the equity method to account for its investment in the Company, a special reserve shall be also set aside pro rata in a proportion consistent with such investor’s shareholding in the Company in accordance with Paragraph 1, Article 41 of Securities and Exchange Act.

  2. The independent directors of the Audit Committee shall comply with Article 218 of the Company Act.

  3. Actions taken pursuant to Subitem (1) and (2) of this Item shall be reported to the Shareholders’ Meeting, and the details of the transaction shall be disclosed in the annual report and the prospectus.

  4. (6) When the Company acquires real property or its right-of-use assets from a related party, if there is one of the following circumstances, it shall proceed with evaluation and operation procedures in accordance with the provisions of Subparagraph 1 and 2 of this Article, and Subparagraph 3, Item (1), (2), (3) of this Article may not apply on the reasonableness assessment of transaction costs:

  5. The related party acquired the real property through inheritance or as a gift.

  6. More than 5 years have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction.

  7. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the Company's own land or on rented land.

  8. Real property right-of-use assets for business purposes are acquired between the Company and its parent or subsidiaries, or with its subsidiaries in which it directly or indirectly holds 100% of the issued shares or total capital.

  9. (7) When the Company obtains real property from a related party, it shall also comply with Subparagraph 3, Item (5) of this Article if there is other evidence indicating that the acquisition was not an arms length transaction.

Article 10 Procedures for Acquisition or Disposal of Intangible Assets, Right-of-Use Assets Thereof or Memberships

  1. Assessment and Operating Procedures

Acquisition or disposal of intangible assets, right-of-use assets thereof or memberships by the Company shall follow the property, plant and equipment cycle under the Company’s internal control system.

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  1. Procedure for Determining Transaction Conditions and Authorized Amounts

  2. (1) When acquiring or disposing of membership, the fair market price is referenced to determine the transaction conditions and transaction price, and to prepare an analysis report and submit it to the Chairman. If the amount is less than NT$30 million (include), it shall be submitted to the board of directors for approval; for an amount exceeding NT$30 million, it shall be approved by the board of directors.

  3. (2) When acquiring or disposing intangible assets or the right-of-use assets thereof, the expert assessment report or fair market price is referenced to determine the transaction conditions and transaction price, and to prepare an analysis report and submit it to the Chairman. If the amount is less than NT$30 million, it shall be submitted to the board of directors for approval. Those exceeding NT$30 million shall be approved by the board of directors.

  4. Implementation Unit

When the Company acquires or disposes of intangible assets, right-of-use assets thereof or memberships, the Management Department and Finance and Accounting Department shall be responsible for implementation after the Company obtains the approval in accordance with the authority levels referred to in the preceding paragraph.

  1. Expert assessment report on intangible assets or on right-to-use assets thereof

Where the Company acquires or disposes of intangible assets, or right-of-use assets thereof and the transaction amount reaches 20% or more of paid-in capital or NT$300 million or more, except in transactions with a domestic government agency, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the certified public accountant shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

  • Article 10-1 The calculation of the transaction amounts referred to in Article 7 to Article 10 shall be done in accordance with Article 14, Subparagraph 1, Item (8) herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a certified public accountant's opinion has been obtained need not be counted toward the transaction amount.

  • Article 11 Procedures for Acquiring or Disposing of Claims of Financial Institutions

In principle, the Company does not engage in transactions to acquire or dispose of the claims of financial institutions. If it intends to engage in transactions to acquire or dispose of the claims of financial institutions in the future, it will report to the board of directors for approval before determining its evaluation and operating procedures.

  • Article 12 Procedures for Acquiring or Disposing of Derivatives

  • Transaction principles and strategies:

    • (1) Type of transactions

      1. Derivative financial products engaged by the Company refer to forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts

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or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts.

  1. Matters pertaining to bond margin trading shall be handled in accordance with the relevant provisions of the Procedures. The Procedures is not applicable for trading of securities with repurchase agreement.

(2) Management (Hedging) Strategy

Derivatives trading shall be conducted for the purpose of hedging, and commodities trading shall be selected to avoid risks arising from the business operation of the Company. The currency held shall conform to the foreign currency demand of the actual import and export transactions of the Company, and the Company's overall internal position (foreign currency income and expenditure) should be squared off by itself, so as to reduce the Company's overall foreign exchange risk and save foreign exchange operating costs. Transactions for other specific purposes shall be carefully evaluated and submitted to the board of directors for approval before proceeding.

  • (3) Rights and responsibilities

  • Investment Department

    • (1) Trading personnel

      • A. In charge of establishing financial product transaction strategies for the entire Company.

      • B. The trading personnel shall regularly calculate positions every two weeks, collect market information, make trend judgment and risk assessment, formulate operational strategies, and obtain approval from the approval authority, to be used as basis for trading.

      • C. Execute transactions according to delegation of authority and established policies.

      • D. When there are major changes in the financial market or when the trading personnel determine the existing strategies are no longer appropriate, evaluation reports shall be presented and strategies re-established, to be used as basis of transaction upon approval by the President.

  • Finance and Accounting Department

    • (1) Accounting personnel

      • A. Execute trading confirmation.

      • B. Review whether the transaction is executed in accordance with authorization and existing strategies.

      • C. Conduct monthly evaluation and submit the evaluation report to the President.

      • D. Accounting treatment.

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  - E. Declare and announce according to the regulations of the FSC.

  • (2) Financial personnel: Execute settlement duties.

  • Derivatives products authorization limit

  • (1) Hedging transactions authorization limit

Authorizing
personnel		 Daily trading limit Net cumulative
position tradinglimit
Head of Investment
Department		 Below US$500,000 Below US$1,500,000
(include)
President US$500,000 -
US$2,000,000(include)		 Below US$5,000,000
(include)
Chairman Above US$2,000,000 Below
US$10,000,000
(include)

  • (2) Other specific-purpose transactions may be executed upon approval by the board of directors.

  • Internal Audit

Responsible for understanding the adequacy of the internal control of derivatives transactions and checking the compliance of the relevant departments with operational procedures, analyzing trading cycles, and preparing audit reports and reporting to the board of directors in case of major deficiencies.

  1. Performance evaluation

  2. (1) Hedging transactions

    • A. The performance evaluation is based on the gain or loss between the exchange rate cost on the Company's books and the transaction of derivatives.

    • B. In order to fully grasp and express the evaluated risk of the transaction, the Company adopts the monthly evaluation method to evaluate the profit and loss.

    • C. The Investment Department shall provide the foreign exchange position evaluation and the foreign exchange market trend and the market analysis to the President as the management reference and instruction.

  3. (2) Specific-purpose transactions

The performance evaluation is based on actual profit and loss, and the accountants shall regularly compile the positions into reports to be used as reference for management.

  1. Determination of the total contract amount and the maximum loss limit

  2. (1) Total contract amount

    • A. Hedging transaction limit

The Investment Department shall understand the overall position of the Company to avoid transaction risks. The

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amount of hedging transactions shall not exceed two thirds of the overall net position of the Company. If the amount exceeds two thirds, it shall be reported to the President for approval.

  • B. Specific-purpose transactions

Based on the prediction of market changes, the Investment Department may formulate strategies as required and submit them to the board of directors for approval before proceeding. 

  - (2) Setting the maximum loss limit

     - A. Hedging transaction is an action employed to avoid risk, hence setting the maximum loss limit is not required.

     - B. For a specific purpose transaction contract, a stop loss point shall be established after the position is established to prevent excessive loss. The stop loss shall be limited to 10% of the transaction contract value. If the loss exceeds 10% of the contract value, it shall be reported to the President immediately and reported to the board of directors to discuss the necessary measures.

     - C. The maximum amount of loss for an individual contract shall not exceed US$20,000 or 5% of the transaction contract amount, whichever is lower.

     - D. The maximum annual loss limit of the Company’s trading operations for specific purposes is US$300,000.

  1. Risk management measures

  2. (1) Credit risk management:

As the market is subject to changes due to various factors, derivative financial products are prone to operational risks. Hence, in terms of market risk management, the following principles shall be abided:

  1. Counterparty: Mainly well-known financial institutions at home and abroad.

  2. Traded commodities: Limited to commodities offered by well-known financial institutions at home and abroad.

  3. Transaction amount: The unoffsetted amount of the same counterparty shall not exceed 10% of the total authorized amount, unless approved by the President.

  4. (2) Market risk management:

Mainly the exchange transaction market provided by banks, and futures market is currently not considered.

  • (3) Liquidity risk management:

To ensure market liquidity, financial products selected shall be mainly of high liquidity (i.e. they can be squared off in the market at any time). The entrusted financial institutions shall have sufficient information and capability to trade in any market any time.

  • (4) Cash flows risk management:

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To ensure a stable working capital turnover, the Company's source of funds for engaging in the derivative transaction shall be limited to its own capital; and for the operating amount, the cash flow forecast for the next three months shall be taken into consideration.

  • (5) Operating risk management:

  • The Company's authorization limit, operating procedures and internal audit shall be strictly complied to avoid operational risks.

  • Personnel engaged in derivatives trading may not serve concurrently in other operations such as confirmation and settlement.

  • Risk measurement, monitoring, and control personnel shall be from different departments, and they shall report to the board of directors or senior management personnel with no responsibility for trading or position decision-making.

  • The positions held for derivatives transactions shall be evaluated at least once per week. However, positions in hedging transactions held to meet business needs shall be assessed at least twice a month. The evaluation reports shall be submitted to the senior management personnel authorized by the board.

  • (6) Commodity risk management:

The internal trading personnel shall have complete and correct professional knowledge of the financial instruments, and require the banks to fully disclose the risks to avoid the risk of misuse of financial instruments.

  • (7) Legal risk management:

Documents signed with financial institutions shall first be reviewed by a foreign exchange or legal professional, or a professional legal consultant to avoid legal risks.

  1. Internal audit system

  2. (1) The internal auditors shall regularly check on the adequacy of the Company's internal control system for derivatives transactions, conduct monthly audits on the Transaction Department to ensure compliance with the Procedures, analyze trading cycling, prepare audit reports, and report to the Audit Committee in writing in case of material non-compliance.

  3. (2) The internal auditors shall submit the audit report along with the annual audit status of the internal auditing procedures to the FSC before the end of February of the following year, and also report the improvements for the irregularities to the FSC for review before the end of May the following year.

  5. Regular evaluation method

  6. (1) The board of directors shall authorize senior executives to regularly supervise and evaluate whether derivatives transactions are actually handled in accordance with the Company's transactions procedures, and whether the risks borne are within the allowable range; when there are abnormal situations in the market price evaluation report (such as holding positions exceeding the loss limit), it shall immediately be reported to the board of directors and response measures shall be taken.

  7. (2) The positions held for derivatives transactions shall be evaluated at least once per week. However, positions in hedging transactions held to meet

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business needs shall be assessed at least twice a month. The evaluation reports shall be submitted to the senior management personnel authorized by the board.

  1. Principles for supervision by the board of directors when the Company is engaging in derivatives trading

  2. (1) The board of directors shall designate senior management personnel to pay continuous attention to monitoring and controlling derivatives trading risk. Management principles are as follows:

    1. Periodically evaluate whether the risk management measures currently employed are appropriate and are faithfully conducted in accordance with the Procedure and the procedures for engaging in derivatives trading formulated by the Company.

    2. When irregular circumstances are found in the course of supervising trading and profit-loss circumstances, appropriate measures shall be adopted and a report immediately made to the board of directors; if the Company has independent directors, an independent director shall be present at the meeting and express an opinion.

  3. (2) Periodically evaluate whether derivatives trading performance is consistent with established operational strategy and whether the risk undertaken is within the Company's permitted scope of tolerance.

  4. (3) The Company shall report to the latest meeting of the board of directors after it authorizes the relevant personnel to handle derivatives trading in accordance with its procedures for engaging in derivatives trading.

  5. (4) When the Company engages in derivatives trading shall establish a log book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates, and the matters required to be carefully evaluated under Subparagraph 4, Item (2) and Subparagraph 5, Items (1) and (2) of this Article shall be recorded in detail in the log book.

Article 13 Procedures for Mergers, Demergers, Acquisitions, or Transfer of Shares

  1. Appraisal and Operating Procedures

  2. (1) When participating in a merger, demerger, acquisition or transfer of shares, it is advisable for the Company to engage an attorney, a certified public accountant and an underwriter to jointly develop an estimated schedule for the procedures prescribed by law, and a task force shall be organized to implement the actions in accordance with these procedures. Furthermore, prior to convening the board meeting to resolve the matter, the Company shall engage a certified public accountant, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage. The requirement for an opinion of the aforesaid experts is waived if the Company merges with a subsidiary in which it holds 100% of its shares or total capital whether directly or indirectly, or if a merger takes place between subsidiaries in which the Company holds 100% of their shares or total capital, whether directly or indirectly.

  3. (2) The Company shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting and include it along with the

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expert opinion referred to in Subparagraph 1, Item (1) of this Article when sending shareholders notification of the shareholders meeting for reference in deciding whether to approve the merger, demerger, or acquisition. However, where other legal provisions exempt a company from convening a General Shareholders' Meeting to approve the merger, demerger or acquisition, this restriction may not apply. Also, where the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the companies participating in the merger, demerger or acquisition shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.

  1. Other matters to implement

  2. (1) Board meeting dates: When the Company participates in a merger, demerger, or acquisition, it shall convene a board meeting and shareholders meeting on the day of the transaction to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.

  3. (2) When the Company participates in a transfer of shares, it shall call a board meeting on the day of the transaction, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.

  4. (3) When participating in a merger, demerger, acquisition, or transfer of another company's shares, the Company, listed on an exchange or having its shares traded on an OTC market, shall prepare a full written record of the following information and retain it for 5 years for reference:

    1. Basic identification data for personnel: Including the occupational titles, names and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition or transfer of another company's shares prior to disclosure of the information.

    2. Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract and the convening of a board of directors meeting.

    3. Important documents and minutes: Including merger, demerger, acquisition and share transfer plans, any letter of intent or memorandum of understanding, material contracts and minutes of board meetings.

  5. (4) When participating in a merger, demerger, acquisition, or transfer of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC market shall, within 2 days counting inclusively from the date of passage of a resolution by the board of directors, report in the prescribed format and via the Internet-based information system, the information set out in Subitem (1) and (2) of the preceding item to the FSC for recordation.

  6. (5) Where any of the companies participating in a merger, demerger, acquisition, or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company(s) so listed or traded

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shall sign an agreement with such company whereby the latter is required to abide by the provisions of Item (3) and (4).

  • (6) Prior commitment to confidentiality: Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition, or transfer of shares.

  • (7) Principles for determining or changing the share exchange ratio or purchase price: Companies engaged in mergers, demergers, acquisitions or share transfers, shall, before convening a bilateral Board meeting to approve such matter, engage a certified public accountant, attorney or securities underwriter to provide opinions on the reasonableness of the share exchange ratio, acquisition price, the cash or other property to be distributed to shareholders, etc. The proposal shall be submitted to the shareholders' meeting. The share exchange ratio or purchase price in principle may not be arbitrarily altered, however, this does not apply to terms/conditions that the contract stipulates may be altered and that have been publicly disclosed. The conditions for changing the share exchange ratio or the purchase price are as follows:

  • Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.

  • An action, such as a disposal of major assets, that affects the Company's financial operations.

  • An event, such as a major disaster or major change in technology, that affects shareholder equity or share price.

  • An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of shares from another company, buys back treasury stock.

  • An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.

  • Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.

  • (8) Contract content: In addition to the provisions of Article 317-1 of the Company Act and Article 22 of the Business Mergers and Acquisitions Act, the contract for companies participating in the merger, demerger, acquisition, or transfer of shares shall also specify the following matters:

  • Handling of breach of contract.

  • Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.

  • The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.

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  1. The manner of handling changes in the number of participating entities or companies.

  2. Preliminary progress schedule for plan execution, and anticipated completion date.

  3. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.

  4. (9) When there is a change in the number of companies participating in the merger, demerger, acquisition, or transfer of shares: After public disclosure of the information, if any company participating in the merger, demerger, acquisition, or share transfer intends further to carry out a merger, demerger, acquisition, or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or share transfer; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.

  5. (10) Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the public company shall sign an agreement with the non-public company, and shall convene a board meeting on the date in accordance with Subparagraph 2, Item (1) of this Article, the prior commitment to confidentiality in accordance with Item (6), and handle changes in the number of companies participating in the merger, demerger, acquisition, or transfer of shares in accordance with Item (9).

Article 14 Information Disclosure Procedure

  1. Declaration items and declaration standards

  2. (1) Acquisition or disposal of real property or its right-of-use assets from or to a related party, or acquisition or disposal of assets other than real property or right-of-use assets thereof from or to a related party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of the company's total assets, or NT$300 million or more. However, this shall not apply to trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

  3. (2) Merger, demerger, acquisition, or transfer of shares.

  4. (3) Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the company.

  5. (4) The type of asset acquired or disposed of is equipment or right-of-use assets thereof for operating purposes, the transaction counterparty is not a related party, and the transaction amount reaches NT$500 million or more.

  6. (5) Acquisition or disposal by the Company in the construction business of real property for construction use, and the transaction counterparty is not a related party, and the transaction amount reaches NT$500 million.

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  • (6) Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and furthermore the transaction counterparty is not a related party, and the amount the company expects to invest in the transaction reaches NT$500 million.

  • (7) Where an asset transaction other than any of those referred to in the preceding six items, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20% or more of paid-in capital or NT$300 million. However, this shall not apply to the following circumstances:

    1. Trading of domestic government bonds.

    2. Where done by professional investors-securities trading on securities exchanges or OTC markets, or subscription of ordinary corporate bonds or general bank debentures without equity characteristics (excluding subordinated debt) that are offered and issued in the primary market, or subscription or redemption of securities investment trust funds or futures trust funds, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange.

    3. Purchase or sale of bonds under repurchase and resale agreements, or subscription or repurchase of money market funds issued by domestic securities investment trust enterprises.

  • (8) The calculation of the transaction for Item (1) to (7) in the preceding paragraph is as follows, and within the preceding year refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with the regulations need not be counted toward the transaction amount.

    1. The amount of any individual transaction.

    2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year.

    3. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use assets thereof within the same development project within the preceding year.

    4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

  • Time limit for making announcement and declaration

Where the Company acquires or disposes of assets information and amount meeting the disclosure standards set out in Paragraph 1 of the Article, it shall publicly announce and declare the relevant information within 2 days commencing immediately from the date of occurrence of the event.

  1. Public announcement and regulatory filing procedures

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  • (1) The Company shall publish relevant information on the website designated by the FSC for announcement and declaration.

  • (2) The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by the Company and any foreign subsidiaries, and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month.

  • (3) When the Company makes an error or omission in an item required by regulations to be publicly announced, all the items shall be properly corrected and publicly announced in entirety within 2 days upon knowledge of its error or omission.

  • (4) When acquiring or disposing of assets, the Company shall keep all relevant contracts, meeting minutes, log books, appraisal reports and opinions of the certified public accountant, attorney and securities underwriter at the Company headquarters, where they shall be retained for five years, except where otherwise provided by laws and regulations.

  • (5) If the following situations arise after the Company has announced or reported transactions according to this article, the Company shall announce and report such matters within two days on the website specified by the FSC:

  • Change, termination or rescission of a contract signed in regard to the original transaction.

  • The merger, demerger, acquisition or transfer of shares is not completed by the scheduled date set forth in the contract.

  • Change to the originally publicly announced and reported information.

Article 15 Subsidiaries of the Company shall comply with the following provisions:

  1. If the Company’s subsidiary is a public listed company, it shall establish the subsidiary’s “Procedures for Acquisition and Disposal of Assets” according to Article 36-1 of the Securities and Exchange Act and“Regulations Governing the Acquisition and Disposal of Assets by Public Companies”, without the need to report to the Company’s board of directors, the same applies for amendments.

  2. If the subsidiary of the Company is not a public listed company, one of the following methods shall be adopted:

  3. (1) The Company’s board of directors and relevant units to approve and implement in accordance with the Procedures, and the subsidiary to handle the relevant matters accordingly.

  4. (2) Establish “Procedures for Acquisition and Disposal of Assets” in accordance with the Company’s relevant regulations, and submit to the Company’s board of directors for approval, the same applies for amendments.

  5. When handling the acquisition or disposal of assets, the subsidiaries shall provide the relevant information for the Company to review.

  6. If the subsidiary is not a public company, the parent company shall also handle the announcement and reporting on behalf of the subsidiary if the acquired or disposed assets reach the public announcement and reporting requirements under Chapter 3 of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies".

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  1. The announcement and reporting requirements of “20% of paid-in capital” or “10% of total assets" by subsidiaries refer to the paid-in capital or total assets of the parent (the Company).

  2. Article 15-1 For the calculation of 10% of total assets under the Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.

In the case of a company whose shares have no par value or a par value other than NT$10 for the calculation of transaction amounts of 20% of paid-in capital under the Procedures, 10% of equity attributable to owners of the parent shall be substituted.

  • Article 16 Penalties

  • Violations of the Procedures when handling acquisition or disposal of assets by the Company’s personnel shall be regularly reported for assessment according to the Company’s personnel management regulations and work rules, where the employees shall be penalized based on the severity of the circumstance.

  • Article 17 Implementation and Revision

  • After the Company's "Procedures for the Acquisition and Disposal of Assets" is approved by the Audit Committee and passed by a board resolution, it shall be submitted to the shareholders' meeting for approval, the same applies for amendments. If a director expresses objection and records or written statements are available, the Company shall submit information regarding the director's objection to the Audit Committee and report at the shareholders’ meeting for discussion. If the Company has appointed independent directors, and when the “Procedures for Acquisition and Disposal of Assets” is proposed for discussion by the board of directors, the independent directors' opinions shall be fully taken into consideration. Any objections or qualified opinions made by independent directors shall be detailed in board meeting minutes.

  • Article 18 Supplementary Provisions

Any other matters not set forth in the Procedure shall be handled in accordance with relevant laws and regulations.

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[Appendix 4]

Chuwa Wool Industry Co., (Taiwan) Ltd.

Procedures for Election of Directors

Amendments passed at General Shareholders’ Meeting on August 12, 2021

  • Article 1 To ensure a just, fair, and open election of directors, these Procedures are adopted pursuant to the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”.

Article 2 Except as otherwise provided by law and regulation or by the Articles of Incorporation, elections of directors shall be conducted in accordance with these Procedures.

  • Article 3 The overall composition of the board of directors shall be taken into consideration in the selection of the Company's directors. The composition of the board of directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on LITEON Technology Corporation's business operations, operating dynamics, and development needs. It is advisable that the policy include, without being limited to, the following two general standards:

  • Basic requirements and values: Gender, age, nationality, and culture.

  • Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, or technology), professional skills, and industry experience.

Each board member shall have the necessary knowledge, skill, and experience to perform his/her duties. The abilities that shall be present in the board as a whole are as follows:

  1. Ability to make sound business judgments.

  2. Ability to perform accounting and financial analysis.

  3. Ability to manage a business.

  4. Ability to handle crisis management.

  5. Knowledge of the industry.

  6. An international market perspective.

  7. Leadership ability.

  8. Decision-making ability.

A spousal relationship or a familial relationship within the second degree of kinship may not exist among more than half of the directors on the board.

The board of directors of the Company shall consider adjusting its composition based on the results of performance evaluation.

Article 4 The qualifications for the independent directors of the Company shall comply with Articles 2, 3, and 4 of the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies”.

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The election of independent directors of the Company shall comply with Articles 5, 6, 7, 8, and 9 of the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies”, and shall be conducted in accordance with Article 24 of the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”.

  • Article 5 Elections of directors at the Company shall be conducted in accordance with the candidate nomination system and procedures set out in Article 192-1 of the Company Act.

When the number of directors falls below five due to the dismissal of a director for any reason, the Company shall hold a by-election to fill the vacancy at its next shareholders meeting. When the number of directors falls short by one third of the total number prescribed in the Company’s Articles of Incorporation, the Company shall call a special shareholders meeting within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

Where the number of independent directors falls below the minimum specified in the proviso under Article 14-2, Paragraph 1 of the Securities and Exchange Act, a byelection shall be held at the next shareholders’ meeting. In the event that all the independent directors have been discharged, an extraordinary shareholders’ meeting shall be convened to hold a by-election within sixty days from the date of such occurrence.

  • Article 6 The cumulative voting method shall be used for election of the Company's directors. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates.

  • Article 7 The person with the right to convene shall prepare separate ballots for directors in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.

  • Article 8 The number of directors will be as specified in the Company's Articles of Incorporation, with voting rights separately calculated for independent and non-independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.

  • Article 9 Before the election begins, the chair shall appoint a number of persons with shareholder status to perform the respective duties of vote monitoring and counting personnel. The ballot boxes shall be prepared by the board of directors and publicly checked by the vote monitoring personnel before voting commences.

  • Article 10 A ballot is invalid under any of the following circumstances:

  • The ballot was not prepared by a person with the right to convene.

  • A blank ballot is placed in the ballot box.

  • The writing is unclear and indecipherable or has been altered.

  • The candidate whose name is entered in the ballot does not conform to the director candidate list.

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  1. Other words or marks are entered in addition to the number of voting rights allotted.

  2. Article 11 Voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including the list of persons elected as directors and the numbers of votes with which they were elected, shall be announced by the chair on the site.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitors and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

  • Article 12 The Company’s board of directors will issue certificates of election to elected directors.

  • Article 13 These Procedures shall come into force on the approval of the shareholders’ meeting, as shall any amendment.

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[Appendix 5]

Shareholding status of directors

The numbers of shares held by the directors individually and by the entire bodies as recorded in the shareholders' register as of the book closure date for the shareholders' meeting (April 25, 2022):

Job title Name Number of shares
held		 Shareholding
ratio
Chairman Xue Yong Co., Ltd.
Representative: Hou,Chia-Chi		 3,238,000 3.52%
Director Zu Sheng International Co., Ltd.
Representative: HuangMing-Yu		 2,233,000 2.43%
Director Zu Sheng International Co., Ltd.
Representative: Chen Chien-Ting
Director Yuan Zhong Co., Ltd.
Representative: Hsu Chang		 4,082,000 4.44%
Independent director Liu,Teng-Cheng 0 -
Independent director Liu,Chieh-Min 0 -
Independent director Tien,Hung-Mao 0 -
Total held bythe entire bodies of directors 9,553,000 10.39%

Description:

  1. The Company’s paid-in capital is NT$920,000,000, and the number of issued shares is 92,000,000.

  2. The number of shares that shall be held by the entire body of the directors in accordance with Article 26 of the Securities and Exchange Act and Article 2 of the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies”: 7,360,000 shares

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