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ASCENT AGM Information 2023

Jun 28, 2023

51802_rns_2023-06-28_68c778d7-d517-4eb7-9c35-cc1cad0acfc3.pdf

AGM Information

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TWSE Stock Code: 1439

ASCENT DEVELOPMENT CO., LTD. (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.)

2023 Regular Shareholders’ Meeting

Meeting Handbook

Meeting Time: 9:00 a.m. Wednesday, June 21, 2023

Venue: B2, No. 108, Dunhua S. Rd., Sec. 1, Taipei City (Fubon National Conference Center)

0

TABLE OF CONTENTS

MEETING PROCEDURES .................................................................................................... 2 MEETING AGENDA ............................................................................................................ 3 I.REPORT ITEMS .............................................................................................................. 4 II.MATTERS FOR RATIFICATION ..................................................................................... 6 III.MATTERS FOR DISCUSSIONS ..................................................................................... 7 IV.EXTEMPORE MOTIONS............................................................................................... 8 V.ADJOURNMENT ........................................................................................................... 8 ATTACHMENT .................................................................................................................... 9 [ATTACHMENT 1] 2022 BUSINESS REPORT ..................................................................... 9 [ATTACHMENT 2] AUDIT COMMITTEE’S AUDIT REPORT ............................................. 14 [ATTACHMENT 3] DETAILED REMUNERATIONS OF INDIVIDUAL DIRECTORS ............ 15 [ATTACHMENT 4] 2022 INDEPENDENT AUDITORS’ REPORT AND FINANCIAL STATEMENTS .............................................................................................................. 16 [ATTACHMENT 5] 2022 STATEMENT OF EARNING DISTRIBUTION ............................... 27 [ATTACHMENT 6] COMPARISON TABLE OF THE “HANDLING PROCEDURES FOR ACQUISITION OR DISPOSAL OF ASSETS” BEFORE AND AFTER AMENDMENT, AND DESCRIPTION THEREOF ............................................................................................. 40 [ATTACHMENT 7] COMPARISON TABLE OF THE “OPERATIONAL PROCEDURES FOR MAKING ENDORSEMENTS/GUARANTEES” BEFORE AND AFTER AMENDMENT, AND DESCRIPTION THEREOF ............................................................................................. 41 [ATTACHMENT 8] CONCURRENT POSITIONS HELD BY THE DIRECTORS IN OTHER COMPANIES ................................................................................................................ 46 APPENDIX ........................................................................................................................ 47 [APPENDIX 1] “ARTICLES OF INCORPORATION” .......................................................... 47 [APPENDIX 2] “RULES OF PROCEDURE FOR SHAREHOLDERS MEETINGS” ................ 56 [APPENDIX 3] “HANDLING PROCEDURES FOR ACQUISITION OR DISPOSAL OF ASSETS” .................................................................................................................................... 70 [APPENDIX 4] “OPERATIONAL PROCEDURES FOR MAKING ENDORSEMENTS / GUARANTEES” ......................................................................................................... 100 [APPENDIX 5] DIRECTORS’ SHAREHOLDINGS ............................................................ 111

1

ASCENT DEVELOPMENT CO., LTD.

2023 Regular Shareholders’ Meeting

Meeting Procedures

I. Call to Order

II. Chairman Remarks

III. Report Items

IV. Matters for Ratification

V. Matters for Discussions VI. Extemporary Motions

VII. Adjournment

2

ASCENT DEVELOPMENT CO., LTD.

2023 Regular Shareholders’ Meeting

Meeting Agenda

Meeting Time: 9:00 a.m. Wednesday, June 21, 2023

Venue: B2, No. 108, Dunhua S. Rd., Sec. 1, Taipei City (Fubon National Conference Center)

Meeting type: physical shareholders’ meeting

  • I. Commencement of meeting: (Announce the total number of shares represented in the meeting)

  • II. Chairman Remarks

  • III. Report Items

  • (I) 2022 business reports.

  • (II) Audit Committee’s review report on the 2022 financial statements.

  • (III) Report on the distribution of 2022 remuneration for employees and directors.

  • (IV) Report on the 2022 earning distribution.

  • (V) Report on the 2022 remuneration of directors

  • (VI) Report on the proposal made by shareholders for 2022 Regular Shareholders’ Meeting.

  • IV. Matters for Ratification

  • (I) 2022 Business Report and Financial Statements.

  • (II) Proposal of 2022earning distribution.

  • V. Matters for Discussions

  • (I) Amendment to “Handling Procedures for Acquisition or Disposal of Assets.”

  • (II) Proposal of the amendment to “Operational Procedures for Making Endorsements/Guarantees” of the Company

  • (III) Removal of restrictions on directors’ competing business involvement.

  • VI. Extemporary Motions

  • VII. Adjournment

3

I. REPORT ITEMS

Proposal 1: 2022 business report, please review.

Description: For the 2022 business report, please refer to [Attachment 1] on page 9 to page 13.

Proposal 2: Audit Committee’s review report on the 2022 financial statements, please review.

Description: For the Audit Committee’s review report, please refer to [Attachment 2] on page 14.

Proposal 3: Report on the distribution of 2022 remuneration for employees and directors, please review.

Description:

  1. The 2022 income before tax is NT$111,885,533 before deducting the distribution of employee and director remunerations. It will be provided 0.5% of such as the employee remuneration, for NT$559,428, and 0.5% of such as the director remuneration, for NT$559,428. All are paid in cash.

  2. The said distribution of employee and director remunerations are identical to the estimate in 2022, and no adjustment is required.

Proposal 4: Report on the 2022 earning distribution, please review. Description:

  1. The Company distributes the 2022 shareholders’ bonus for NT$27,600,000, or NT$0.3 per share in cash. The chairman is authorized to determine the base date of dividend distribution, distribution date, and handle other matters.

  2. When distributing the cash dividends, the calculation is based on the distribution proportion up to NTD (if less than NT$1, round-off). The fractional payment under NT$1 is accounted as the other income of the Company.

Proposal 5: Report on the 2022 directors’ remuneration, please review.

Description: The Corporate Governance Best Practice Principles are complied with, and

4

to enable the shareholders to understand how the directors receive the remuneration, for the Company’s 2022 director remuneration policy, individual remuneration description, and amount, please refer to [Attachment 3] on page 15 of the handbook.

Proposal 6: Report on the proposal made by shareholders for 2023 Regular Shareholders’ Meeting, please review.

Description: Pursuant to Article 172-1 of the Company Act, the Company accepted the shareholders’ proposals from April 14, 2023 to April 24, 2023; no shareholders’ proposal was received.

5

II. MATTERS FOR RATIFICATION

Proposal 1 Proposed by the Board of Directors

Cause: 2022 business report and financial statements, please ratify. Description:

  1. The company’s 2022 consolidated and parent-only financial statements have been audited by Hsiao, Chun-Yuan and Lin, Se-Kai, CPAs of PwC Taiwan, and submitted to the audit committee with the business report for audit, with the audit report presented.

  2. for the 2022 business report, independent auditors’ report, and financial statements, please refer to [Attachment 1] on page 9 to page 13, and [Attachment 4] on page 16 to page 38.

  3. Please ratify.

Resolution:

Proposal 2 Proposed by the Board of Directors

Cause: Proposal of 2022 earning distribution, please ratify. Description:

  1. The 2022 net profit after tax is NT$92,204,552, and the statement of earning distribution has been prepared pursuant to the articles of incorporation. Please refer to [Attachment 5] on page 39 of the handbook.

  2. Please ratify.

Resolution:

6

III. MATTERS FOR DISCUSSIONS

Proposal 1 Proposed by the Board of Directors

Cause: Present amendment to provisions of the Company’s Procedures for Acquisition or Disposal of Assets, please discuss.

Description:

  1. To cope with the Company’s business development and operational needs, it is intended to amend some provisions of the “Handling Procedures for Acquisition or Disposal of Assets.”

  2. For the comparison table before and after the amendment to the “handling procedures for acquisition or disposal of assets,” and the description thereof, please refer to [Attachment 6] on page 40.

  3. Please discuss.

Resolution:

Proposal 2 Proposed by the Board of Directors

Cause: Proposal of the amendment to “Operational Procedures for Making Endorsements/Guarantees” of the Company, please discuss.

Description:

  1. To cope with the Company’s business development and operational needs, it is intended to amend some provisions of the “Operational Procedures for Making Endorsements/Guarantees.”

  2. For the comparison table before and after the amendment to the “Operational Procedures for Making Endorsements/Guarantees,” and the description thereof, please refer to [Attachment 7] on page 41 to 45.

  3. Please discuss.

Resolution:

Proposal 3 Proposed by the Board of Directors

Cause: Removal of restrictions of non-compete on directors, please discuss.

Description:

  1. Pursuant to article 209 of the Company act, directors may obtain permission for engaging in business activities that coincide with those of the Company for

7

directors’ own benefit, or for the benefit of others, by disclosing material details during shareholders’ meetings.

  1. To adopt the expertise and related experience of directors, on the premise of not prejudicing the Company’s interest, it is requested that the shareholders’ meeting remove the restrictions of non-compete on directors. For the additional concurrent positions held by the directors in other companies, please refer to [Attachment 8] on page 46 of the handbook.

  2. Please discuss.

Resolution:

IV. EXTEMPORE MOTIONS

V. ADJOURNMENT

8

[Attachment 1] 2022 Business Report

ASCENT DEVELOPMENT CO., LTD.

(Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) 2022 Business Report

First of all, thank you for your precious time to read the 2022 business report of Ascent Development Co., Ltd. Ascent Development Co., Ltd. is a professional, innovative and responsible construction company, committed to providing high-quality and highly safe construction products. The Company’s goal is to become the most trustworthy and respected construction company for customers. To achieve our goal, we will continue to strengthen our core competitiveness, expand diversified markets, grasp the development trend of industrial technologies and cultivate outstanding professional talents.

2022 was a year full of challenges and opportunities for Ascent Development Co., Ltd. The Company has made considerable progress and achievements in operation, including being officially renamed from Chunwa Wool Industry Co., (Taiwan) Ltd. to Ascent Development Co., Ltd., and began to invest in more development projects in Taipei and New Taipei City. While facing challenges and difficulties against the backdrop

of the pandemic and economic environments, such as intensified market competition, credit control measures adopted by the Central Bank, the manpower shortage in the industry, and rising raw material prices, the Company is still actively responding and solving them. In the future, we will introduce construction products closer to customers with more features, and seek the best interests of shareholders and other stakeholders on the basis of creating sustainable value for the Company.

  • I. The company’s 2022 business results and 2023 outlook are reported below: 2022 business results

  • (I) Outcome of the business plan:

    • The company’s consolidated operating revenue in 2022 was NT$570,153 thousand, and the consolidated net profit for the current period was NT$92,205 thousand (attributable to the owner of the parent company).

  • (I) Budget implementation

    • The company did not disclose the financial forecast in 2022; therefore, there is no budget achievement.

  • (II) Revenue, expense, and profitability analysis:

    • 1.2022 Revenue and Expenses

Expressed in thousands of NTD

Items Amount
Revenues 570,153
Operating Costs (446,013)

9

Gross profit 124,140
Operating expenses (83,289)
Operating income 40,851
Net amount of the non-
operating revenue and
expenses		 121,185
Income before tax 162,036
The current net profit
attributed to:
Owner of parent
company		 92,205
Equity owned by the
previous holder under the
joint control		 13,190
Non-controlling
interests		 38,197
Total current net profit
after tax		 143,592

10

3.2022 Profitability

Expressed in thousands of NTD

Items 2022
Financial
position
(%)		 Debt to assets ratio 41.63
Long-term Fund to Property, Plant and
Equipment		 1,685,631.14
Ability to
repay debts
(%)		 Current ratio 184.56
Quick ratio 45.15
Times interest earned(TIE)ratio 14.89
Profitability Return on assets(%) 3.15
Return on equity (%) 4.68
Pre-tax income topaid-in capital ratio(%) 17.61
Netprofit margin(%) 25.18
Earningsper share:
Owner ofparent company 1.00
Equity owned by the previous holder
under thejoint control		 0.14
Total EPS(NT$) 1.14

  • (IV) Status of research and development

    • 1.Key development projects - plant-office category: Jiuzong Section, Neihu District, Taipei City; Zhongxing Section, Sanchong District, New Taipei City; Zhongyi Section, Tucheng District, New Taipei City; Zhongyuan Section, Zhonghe District, New Taipei City; and Jiangbei Section, Xizhi District, New Taipei City.

    • 2.Plain land category: Guanchian Section, Tainan City - the fourth phase of Emerald Forest.

  • II. Overview of 2023 business plan

  • (I) Carefully monitor the industry movements and development trends, and adopt the sustainability concept of environmental, social and corporate governance (ESG), valued internationally, as a blueprint for corporate development to enhance the Company’s sustainable value.

  • (II) To cope with the strong recent demands for plant-offices in the market, the Company currently focuses on plant-office commercial buildings as the main product. The related operations are conducted as scheduled, to confirm that the projects can be completed as scheduled and with the expected quality.

  • (III) Expand diversified markets, and actively participate in related businesses such as urban renewal by the government, urban renewal, renovation of dangerous and old buildings, and section expropriation.

11

  • III. Impact of the competitive environment, regulatory environment, and the overall business environment

Recently, the domestic real estate industry has been corrected in the plateau period, mainly due to the strong wait-and-see atmosphere in the market, and the wider gap of price perception between the supply and demand sides. Currently, in terms of land development, the main direction of residence is still for these self-use products with rigid demand, and most of the buyers are for the self-occupied house, replacement of self-use houses and long-term asset allocation; the demand for plantoffices remains strong. In terms of government policies and regulations, the credit control measures adopted to curb short-term speculative buying, and the passage of the amendment to the Equalization of Land Rights Act are expected to have a greater impact on small and medium-sized construction companies with weak financial positions, but developers with the sound financial position and good conditions can take advantage of the situation to gradually consolidate and expand their operation scale. In terms of the global economy, as the continued interest rate hikes in the United States tightened the liquidity, along with the impact of global inflation, the economy is expected to show a downward trend. Amidst the very uncertain external environment, we will still maintain a robust pace of operation, and prudently respond to market movements.

  • IV. Future development strategies:

Looking to the future, we are full of confidence and expectation, and have formulated medium and long-term development plans, mainly including the following aspects:

  • (I) Joint participation in the development projects by unifying affiliates of the group: The Company leads the development projects with the professional capabilities of construction, while accumulating experience and reputation, to strengthen the core competitiveness; in addition to the current plant-office commercial building development projects, we will seek residential products in the urban renewal and collaborative construction fields as the development direction.

  • (II) Replenish and reserve talent resources: other than seeking professionals in the construction industry who fit the Company’s culture and philosophy to join us, it also actively develops databases of knowledge-sharing as resources for talent education and training.

  • (III) Develop land accesses toward multiple aspects: The Company actively participates in state-owned or state-owned enterprise tenders, public urban renewal projects, and the renovation of dangerous old houses and urban renewal projects to support national policies.

  • It is believed that these plans will bring more room for growth and challenges to

12

Ascent Development Co., Ltd.

Finally, I would like to thank all shareholders and the general public for their support and trust in Ascent Development Co., Ltd. You are our most important partner and motivation. We also sincerely invite your valuable comments or advice so that we can continuously improve ourselves and create a better future. Thank you.

Wish all of our shareholders health and all the luck

Chairman: Chia-Chi Hou Managerial Officer: Hsien-Wen Liu Accounting Officer: Chien-Chang Luo

13

[Attachment 2] Audit Committee’s Audit Report

ASCENT DEVELOPMENT CO., LTD.

(Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Audit Committee’s Report on the Financial Statements

The Board has prepared and submitted the 2022 Business Report, Financial Statements (the consolidated and parent-only financial statements included), and proposal for earning distribution. The Financial Statements have been audited by Hsiao, ChunYuan and Lin, Se-Kai, CPAs of PwC Taiwan with the issuance of Independent Auditor’s Report with unqualified opinion and the sections of emphasis and other matters. The Audit Committee has audited the above-mentioned business report and financial report. No discrepancy is found and the committee hereby presents the report in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act for your approval.

For

2023 Regular Shareholders’ Meeting

ASCENT DEVELOPMENT CO., LTD.

Audit Committee Convener: Liu, Deng-Cheng

March 27, 2023

14

[Attachment 3] Detailed Remunerations of Individual Directors

ASCENT DEVELOPMENT CO., LTD.

Detailed Remunerations of Individual Directors

Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0		 Unit: Share; NT$1 thousand


Compensation received as employee
Sum of A, B, C, D, E,
F and G as a
percentage of net
income (%)
Compensation from
nvested businesses
other than
subsidiaries
Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company
All companies included
in the financial
statements
The Company
All companies included
in the financial
statements
The Company
All companies
included in the
financial
statements
The sum of A, B, C, D,
E, F, and G
The Company
All companies included
in the financial
statements
Cash
amount
Stock
amount
Cash
amount
Stock
amount
3,030
3,030
0
0
0
0
0
0
3,630 3.44
2.53
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
600 0.57
0.42
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
0
0
0
0
0
0
0
0
980 0.93
0.68
0
Title Name Directorcompensation Sum of A, B, C and D as a
percentage of net income
(%)


 Compensation received as employee Sum of A, B, C, D, E
F and G as a
percentage of net
income (%)

 ,
Compensation from
nvested businesse
other than
subsidiaries
Compensation (A)
 Pension (B)
 Remuneration of
directors (C)

Fees for services
rendered (D)

Salaries, bonuses,
special
allowances, etc.
(E)
Retirement
Pension (F)
Employee Remuneration (G)
The Company All companies included
in the financial
statements		 The Company All companies included
in the financial
statements		 The Company All companies included
in the financial
statements		 The Company All companies included
in the financial
statements		 Sum of A, B, C and D The Company All companies included
in the financial
statements		 The Company All companies included
in the financial
statements		 The Company All companies included
in the financial
statements		 The Company All companies
included in the
financial
statements		 The sum of A, B, C, D
E, F, and G		 The Company All companies included
in the financial
statements
s
Cash
amount		 Stock
amount		 Cash
amount
Stock
amount
Chairman Xue Yong Co., Ltd.
Representative: Chia-
Chi Hou		 600
600		 0
0		 0
0		 0
0
600		 0.57
0.42		 3,030
3,030		 0
0		 0 0 0 0 ,
3,630		 3.44

2.53		 0
Director Zu Sheng International
Co., Ltd.
Representative: Ming-
YuHuang		 600 600 0 0 0 0 0 0 600 0.57 0.42 0 0 0 0 0 0 0 0 600 0.57
0.42		 0
Director Yuan-Zhong Co., Ltd.
Representative: Chang
Hsu		 600 600 0 0 0 0 0 0 600 0.57 0.42 0 0 0 0 0 0 0 0 600 0.57
0.42		 0
Director Zu Sheng International
Co., Ltd.
Representative: Chien-
Ting Chen		 600 600 0 0 0 0 0 0 600 0.57 0.42 0 0 0 0 0 0 0 0 600 0.57
0.42		 0
Independent
Director		 Teng-Cheng Liu 900 900 0 0 0 0 80 80 980 0.93 0.68 0 0 0 0 0 0 0 0 980 0.93
0.68		 0
Independent
Director		 Chieh-Min Liu 900 900 0 0 0 0 80 80 980 0.93 0.68 0 0 0 0 0 0 0 0 980 0.93
0.68		 0
Independent
Director		 Hung-Mao Tien 900 900 0 0 0 0 80 80 980 0.93 0.68 0 0 0 0 0 0 0 0 980 0.93
0.68		 0

Note: 1. The remuneration of the directors of the Company complies with Article 26 of the Company’s Articles of Incorporation, that the remuneration within 2% of the year’s profit may be provided to the directors for the same year, and the remuneration will be submitted to the Remuneration Committee and the Board for review.

as the non-employee consultants of the parent company/all companies included in the financial statements/reinvested businesses): None.

15

[Attachment 4] 2022 Independent Auditors’ Report and Financial Statements

Independent Auditors’ Report

(2022) Cai-Shen-Bao-Zi No. 22004503

To ASCENT DEVELOPMENT CO., LTD.:

Audit Opinions

ASCENT DEVELOPMENT CO., LTD. (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) and its subsidiaries (the Group)’ balance sheet of December 31 of 2022 and 2021, the comprehensive income statement, changes of equity, and cash flow statement from January 1 to December 31 of 2022 and 2021 and the notes to the consolidated financial statements (including the summary of major accounting policies) have been audited by the Auditor of the Firm.

According to the opinions of the Auditor, the above-mentioned consolidated financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers in all material aspects, which are sufficient to express the financial status of the Group on December 31, 2022 and 2021, and parent company only financial performance and parent company only cash flow from January 1 to December 31 in 2022 and 2021.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group and its subsidiaries in accordance with the Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on the audit results of the Auditor and the audit reports of other auditors, we believe that we have obtained sufficient and appropriate audit evidence as the basis for expressing the audit opinion.

Matters to be Emphasized

In the third quarter of 2022, the Group acquired 33% of the equities of Hanlin Development Co., Ltd., a subsidiary of Hanshen Asset Management Co., Ltd. (the ultimate parent company of the ASCENT DEVELOPMENT CO., LTD.), and obtained the control over it. Since this equity transaction is an organizational reorganization under common control, it should be regarded as an acquisition from the beginning. Therefore, the Company has retroactively recompiled the consolidated financial statements of the previous period when preparing the consolidated financial statements of 2022. Please refer to Note 6(29) to the consolidated financial statements for details.

Key audit Items

Key audit items refer to the most important items in the audit of the Company's 2022 consolidated financial statements based on our professional judgment. These matters have been dealt with in the process of checking the consolidated financial statements and reaching audit opinions, and the we do not express opinions on these matters independently.

Key audit matters in the Group's consolidated financial statements for the year ended December 31, 2022 are as follows:

~16~

Impairment Testing of Investment Using the Equity Method Descriptions

For the accounting policy of investment using the equity method, please refer to Note 4(15) of the consolidated financial statements, for the accounting policy of impairment of non-financial assets, please refer to Note 4(20) of the consolidated financial statements, and for the description of accounting items, please refer to the Notes 6(8) of the consolidated financial statements.

On December 31, 2022, the book value of ASCENT DEVELOPMENT CO., LTD.'s investment using the equity method was NT$939,639 thousands, accounting for 20% of the total consolidated assets. In accordance with the International Accounting Standard No. 28 "Investment in Affiliated Enterprises and Joint Ventures", the management level shall assess whether the recoverable amount of the investment is lower than the book value if there is objective evidence showing signs of impairment for the investment using the equity method. Since the objective evidence of its impairment assessment and the comprehensive consideration factors for determining the recoverable amount involve the subjective judgment of the management and have a high degree of uncertainty, and the investment amount using the equity method is significant, the auditor adopts the Group’s relevant Impairment assessment of equity method investments is listed as one of the most important matters of the audit.

Audit Procedure

The auditor has implemented the following procedures to respond to the specific aspects described in the above key audit items:

  1. Interview with the management level to understand the management's assessment of the signs of impairment of investments using the equity method and evaluate its rationality.

  2. To obtain the equity value evaluation report issued by the external evaluation experts appointed by the management, the procedures performed by the auditor are as follows:

  3. (1) Assess the suitability and objectivity of the external evaluation experts appointed by the management level.

  4. (2) Assess the appropriateness of the evaluation methods adopted by the external evaluation experts appointed by the management level and the rationality of the relevant assumptions.

Appropriateness of the Vesting Period of Real Estate Sales Revenue

Descriptions

Please refer to Note 4(27) of the consolidated financial statements for the accounting policy of operating revenue in the construction industry, and Note 6(20) to the consolidated financial statements for descriptions of accounting items.

The real estate sales revenue of the construction industry is recognized when the ownership transfer of the real estate is completed and the house inspection certificate is delivered to the customer. Due to the wide market range of real estate sales in the construction industry, it is necessary to review the ownership transfer and other information one by one before recognizing the sales revenue. Usually, a lot of manual works would be required to determine the correctness of the recognition time of the sales revenue. The appropriateness of the vesting period is listed as one of the most important matters in the audit.

Audit procedure

The auditor has implemented the following procedures to respond to the specific aspects described in the above key audit items:

  1. Interview with management to understand and review the procedures for recognizing real estate sales revenue and adopt it consistently during the financial statement comparison period.

  2. Assess and verify the appropriateness of the attribution period of real estate sales income for a certain period before and after the deadline at the end of the period, including checking the land

~17~

and building ownership transfer information and relevant dates to support the correctness of the recognition time of real estate sales revenue.

Other Matters - Reference to other Audits of other Auditors

For the Group's investment using the equity method in 2022 and 2021, the financial statements were not audited by us, but by other auditors. Therefore, in the opinions expressed by us on the abovementioned consolidated financial statements, the amount listed in the financial statements of the Companies and the relevant information disclosed in Note 13 are based on the audit reports of other auditors. On December 31, 2022 and 2021, the amount of investment in the above-mentioned companies using the equity method was NT$939,639 thousands and NT$965,501 thousands, respectively, accounting for 20% and 20% of the total consolidated assets. In 2022 and 2021 the consolidated profits and losses recognized for the aforementioned companies were NT$102,193 thousands and NT$80,969 thousands, respectively, accounting for 270% and (157%) of the consolidated profits and losses for the current period.

Other Matters - Parent Company Only Financial Statements

ASCENT DEVELOPMENT CO., LTD. has compiled the parent company only financial statements for 2022, and the audit report of the emphasis and other matter paragraphs issued by the accountant with unqualified opinions is submitted for reference.

Responsibilities of management level and governance units for the consolidated financial statements

The responsibilities of the management is to prepare consolidated financial statements that are reasonably expressed in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards approved and published by the Financial Supervisory Commission and International Accounting Standards, and interpret and explain the announcement in preparation of consolidated financial statements that are fairly presented, and maintain the necessary internal controls related to the preparation of consolidated financial statements to ensure that there are no material misstatement in the financial statements that are caused by fraud or errors.

When preparing the consolidated financial statements, the responsibilities of the management level also include assessing the ability of the Group for going concern, the disclosure of related matters, and the adoption of the going-concern accounting basis, unless the management level intends to liquidate the Group or cease operations, or except for liquidation or cease of operation or has no realistic alternative but to do so.

The governance units (including the audit committee) of the Group are responsible for supervising the financial reporting process.

Responsibilities of Auditor to Audit Consolidated Financial Statements

The purpose of our audit of the financial statements is to obtain reasonable assurance as to whether there is any material misrepresentation in the consolidated financial statements as a whole resulting from fraud or error, and to issue an audit report. Reasonable certainty is of high degree of certainty, but there is no guarantee that the audit work performed in accordance with the auditing standards of the Republic of China will be able to detect material misstatement in the consolidated financial statements. Misstatements may result from fraud or error. Misstatements of individual amounts or aggregated amounts is considered material if it can reasonably be expected to affect economic decisions made by users of the consolidated financial statements.

As part of an audit in accordance with 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 perform audit procedures responsive to those risks, and

~18~

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 overriding internal controls.

  1. Obtain an understanding of the internal controls 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 controls of both the Company and its subsidiaries’ .

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

  3. Conclude on the appropriateness of management level's use of the going concern basis of accounting and whether or not a material uncertainty exists related to events or conditions that may cast a significant doubt on the Group's and its subsidiaries’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as an ongoing concern.

  4. Assess the overall presentation, structure and content of the consolidated financial statements (including relevant notes), and whether the financial statements properly represent relevant transactions and events.

  5. 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.

The planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit.

We also provide the governance units with the statements that the personnel of the accounting firm that is subject to independence regulations have complied with the independence statement in the professional ethics code for CPAs of the Republic of China, and communicate with the governance units all relationships that may be considered to affect the independence of the auditors and other matters (including relevant protective measures).

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Group's consolidated financial statements for the year 2022, and are therefore the key audit matters. We describe these matters in our auditor’s 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

Chun-Yuan Hsiao Accountant Se-Kai Lin

Former Securities and Futures Bureau, Financial Supervisory Commission

Approval No.: Jin-Guan-Zheng-Liu-Zi No. 0960042326 Jin-Guan-Zheng-Liu No. 0960072936

March 27, 2023

~19~

ASCENT DEVELOPMENT CO., LTD. and SUBSIDIARIES (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.)

Consolidated Balance Sheet Balance Sheet
December 31, 2022 and 2021
Expressed in thousands of NTD
December 31, 2022 December 31, 2021
Assets Notes Amount % Amount %
Current assets
1100 Cash and cash equivalents VI(I) $ 521,760 11 $ 953,814 20
1136 Financial assets at amortized cost- VI(IV)
Current 80,000 2 20,000 -
1150 Notes receivable, net VI(V) 19,613 - 17,218 -
1170 Net accounts receivable VI(V) 6,062 - 10,671 -
1180 Accounts receivable - related parties, VII
net 377 - 377 -
1200 Other receivables 24,346 1 26,144 1
1210 other receivables – related parties VII - - 183,213 4
1220 Current income tax assets - - 109 -
130X Inventory VI(VI)(VII), VII and
VIII 2,067,819 43 1,469,857 30
1410 Prepayments 3,319 - 2,569 -
1476 Other financial assets - current VIII 96 - 98 -
1479 Other current assets - others 18,475 - 25,936 1
11XX Total current assets 2,741,867 57 2,710,006 56
Non-current assets
1510 Financial assets at FVTPL - non- VI(II)
current 86,000 2 86,000 2
1517 Financial assets at FVTOCI - non- VI(III)
current 148,906 3 159,190 3
1550 Investments accounted for using VI(VIII)
equity method 939,639 20 965,501 20
1600 Property, plants, and equipment VI(IX) 167 - 192 -
1755 Right-of-use assets VI(X) 103 - 497 -
1760 Investment property, net VI(XI) 887,049 18 901,576 18
1840 Deferred income tax assets VI(XXVII) 338 - 2,630 -
1920 Deposits received VII 10,139 - 10,100 -
1980 Other financial assets - non-current VIII 4,766 - 37,378 1
1990 Other non-current assets - others 3,790 - 3,790 -
15XX Total non-current assets 2,080,897 43 2,166,854 44
1XXX Total assets $ 4,822,764 100 $ 4,876,860
 100

(continued on next page)

~20~

ASCENT DEVELOPMENT CO., LTD. and SUBSIDIARIES (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.)

Consolidated Balance Sheet Consolidated Balance Sheet Consolidated Balance Sheet Consolidated Balance Sheet
December 31, 2022 and 2021
Expressed in thousands of NTD
December 31, 2022 December 31, 2021
Liabilities and Equity Notes Amount % Amount %
Current liabilities
2100 Short-term borrowings VI(VII)(XII) $ 1,318,925 28 $ 675,368 14
2110 Short-term notes payable VI(XIII) 28,762 1 141,858 3
2130 Contract liabilities - current VI(XX) 31,698 1 60,178 1
2150 Notes payable 12,066 - 1,374 -
2170 Accounts payable 15,032 - 24,462 -
2180 Accounts payable - related parties VII 9,769 - 9,769 -
2200 Other payables 29,914 1 60,765 1
2220 Other payables - related parties - - 32 -
2230 Current income tax liabilities 14,180 - 5,025 -
2280 Lease liabilities - current 2,301 - 2,331 -
2320 Long-term liabilities due within one VI(XIV)
year or one business cycle 16,000 - 418,000 9
2399 Other current liabilities - others 6,958 - 29,786 1
21XX Total of current liabilities 1,485,605 31 1,428,948 29
Non-current liabilities
2540 Long-term borrowings VI(XIV) 390,000 8 - -
2570 Deferred income tax liabilities VI(XXVII) 511 - 13 -
2580 Lease liabilities - non-current 124,702 3 120,509 3
2600 Other non-current liabilities 6,942 - 7,159 -
25XX Total non-current liabilities 522,155 11 127,681 3
2XXX Total liabilities 2,007,760 42 1,556,629 32
Equity attributable to owners of
parent company
Share capital VI(XVI)
3110 Common stock capital 920,000 19 920,000 19
Capital surplus VI(XVII)
3200 Capital surplus 182,854 3 145,021 3
Retained earnings VI(XVIII)
3310 Legal reserve 357,010 8 341,774 7
3320 Special reserves 7,856 - 7,856 -
3350 Undistributed earnings 1,009,210 21 969,473 20
Other equity VI(XIX)
3400 Other equity ( 204,188) ( 4) ( 117,229) ( 2)
31XX Total equity attributable to
owners of the parent company 2,272,742 47 2,266,895 47
35XX Equity owned by the previous holder VI(XXIX)
under the joint control - - 347,601 7
36XX Non-controlling interests 542,262 11 705,735 14
3XXX Total equity 2,815,004 58 3,320,231 68
Significant contingent liabilities and IX
unrecognized contractual commitments
3X2X Total liabilities and equity $ 4,822,764
 100 $ 4,876,860 100

The attached notes to the consolidated financial statements form part of the consolidated financial statements. Please refer to them also. Chairman : Chia-Chi Hou Manager : Hsien-Wen Liu Accounting Officer : Chien-Chang Luo

~21~

ASCENT DEVELOPMENT CO., LTD. and SUBSIDIARIES (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Consolidated Statement of Comprehensive Income January 1 to December 31, 2022 and 2021

Items Expressed in thousands of NTD
(Except for earnings per share in NTD)
2022
2021
Notes
Amount
%
Amount
%
VI(VII)(XX)
$ 570,153
100
$ 615,535
100
VI(VI)(VII)
(XXV)
(
446,013) (
78) (
505,266) (
82)
124,140
22
110,269
18
VI(VII)(XXV)
(XXVI) and VII
(
32,469) (
6) (
29,180) (
5)
(
50,820) (
9) (
47,388) (
8)
XII(II)
-
-
68
-
(
83,289)(
15)(
76,500)(
13)
40,851
7
33,769
5

VI(XXI) and VII
3,738
1
3,680
1
VI(XXII)
11,001
2
45,017
7
VI(XXIII)
(
48,508) (
9) (
8,593) (
1)
VI(XXIV)
(
11,664) (
2) (
13,709) (
2)
VI(VIII)
166,618
29
120,257
19
121,185
21
146,652
24
162,036
28
180,421
29
VI(XXVII)
(
18,444)(
3) (
12,971)(
2)
$ 143,592
25
$ 167,450
27
4000
Revenue

5000
Operating Costs

5900
Gross profit
Operating Expenses

6100
Promotional expenses
6200
Administrative expenses
6450
Expected credit impairment gain
6000
Total operating expenses
6900
Operating income
Non-operating income and expense
7100
Interest income

7010
Other income

7020
Other gains and losses

7050
Financial cost

7060
Profit and loss share of the
affiliates and joint ventures
recognized using the equity
method

7000
Total non-operating income
and expenses
7900
Income before tax
7950
Income tax expenses

8200
Current period net profit

(continued on next page)

~22~

ASCENT DEVELOPMENT CO., LTD. and SUBSIDIARIES (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Consolidated Statement of Comprehensive Income January 1 to December 31, 2022 and 2021

Items Expressed in thousands of NTD
(Except for earnings per share in NTD)
2022
2021
Notes
Amount
%
Amount
%
VI(XIX)
VI(III)
( $ 41,365) (
7) ( $ 179,652) (
29)
VI(VIII)
(
64,426) (
11) (
39,288) (
6)
(
105,791)(
18) (
218,940) (
35)
( $ 105,791) (
18) ( $ 218,940) (
35)
$ 37,801
7 ( $ 51,490)(
8)
$ 92,205
16
$ 128,274
21
13,190
2
12,928
2
38,197
7
26,248
4
$ 143,592
25
$ 167,450
27
( $ 13,586) (
2) ( $ 90,666) (
14)
13,190
2
12,928
2
38,197
7
26,248
4
$ 37,801
7($ 51,490)(
8)
VI(XXVIII)
$ 1.00
$ 1.39
0.14
0.14
$ 1.14
$ 1.53
VI(XXVIII)
$ 1.00
$ 1.39
0.14
0.14
$ 1.14
$ 1.53
Other comprehensive income
(net amount)

Items not reclassified to profit or
loss
8316
Unrealized gains or losses on
investments in equity
instruments at FVTOCI

8320
Shareholding in other
comprehensive income of
affiliates and joint ventures
under equity method - items not
reclassified to income

8310
Total of items not reclassified
to profit or loss
8300
Other comprehensive income
(net amount)
8500
Total comprehensive income of
the current period
Net profit (loss) attributable to:
8610
Owner of parent company
8615
Equity owned by the previous
holder under the joint control
8620
Non-controlling interests
Total
Total comprehensive income
attributable to:
8710
Owner of parent company
8715
Equity owned by the previous
holder under the joint control
8720
Non-controlling interests
Total
Basic earnings per share

9710
Owner of parent company
9720
Equity owned by the previous
holder under the joint control
9750
Basic earnings per share
Diluted earnings per share

9810
Owner of parent company
9820
Equity owned by the previous
holder under the joint control
9850
Diluted earnings per share

The attached notes to the consolidated financial statements form part of the consolidated financial statements. Please refer to them also. Chairman : Chia-Chi Hou Manager : Hsien-Wen Liu Accounting Officer : Chien-Chang Luo

~23~

ASCENT DEVELOPMENT CO., LTD. and SUBSIDIARIES (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Consolidated Statement of Changes in Equity January 1 to December 31, 2022 and 2021

Expressed in thousands of NTD

2021 (after restatement)
Balance at January 1, 2021
Current period net profit
Other comprehensive income of current period
Total comprehensive income of the current period
Appropriation and distribution of earnings
Cash dividends
Disposal of equity instruments at FVTOCI
Changes in the net equity value of affiliates recognized under
the equity method
Disposal of equity instruments at FVTOCI by affiliates
Balance at December 31, 2021
2022
Balance at January 1, 2022
Current period net profit
Other comprehensive income of current period
Total comprehensive income of the current period
Appropriation and distribution of earnings
Appropriation of legal reserve
Cash dividends
Capital reduction in cash
Disposal of equity instruments at FVTOCI
Disposal of equity instruments at FVTOCI by affiliates
Changes in the net equity value of affiliates recognized under
the equity method
Impact of organizational reorganization
Balance at December 31, 2022		 Notes Equityattrib ut able to owners ofparent company able to owners ofparent company able to owners ofparent company Equity owned by
the previous
holder under the
joint control		 Non-controlling
interests		 Total equity
Common stock
capital		 Capital surplus R etained earnings Unrealized gains
or losses on
financial assets
measured at fair
value through
other
comprehensive
income		 Total
Legal reserve Special reserves Undistributed
earnings
VI(XIX)
VI(III)(XIX)

VI(VIII)
VI(VIII)(XVII)
(XIX)
VI(XIX)
VI(XVIII)
VI(III)(XIX)
VI(XIX)

VI(VIII)
VI(VIII)(XVII)(
XXIX)		 $ 920,000
-
-
-
-
-
-
-
$ 920,000
$ 920,000
-
-
-
-
-
-
-
-
-
-
$ 920,000		 $ 10,714
-
-
-
-
-
123,021
11,286
$ 145,021
$ 145,021
-
-
-
-
-
-
-
-
7,372
30,461
$ 182,854		 $ 341,774
-
-
-
-
-
-
-
$ 341,774
$ 341,774
-
-
-
15,236
-
-
-
-
-
-
$ 357,010		 $ 7,856
-
-
-
-
-
-
-
$ 7,856
$ 7,856
-
-
-
-
-
-
-
-
-
-
$ 7,856		 $ 817,112
128,274
(
96 )
128,178
-
45,791
-
(
21,608 )
$ 969,473
$ 969,473
92,205
696
92,901
(
15,236 )
(
18,400 )
-
76
(
19,604 )
-
-
$ 1,009,210




$ 133,334
-
(
218,844 )
(
218,844 )
-
(
42,041 )
-
10,322
($ 117,229 )
($ 117,229 )
-
(
106,487 )
(
106,487 )
-
-
-
(
76 )
19,604
-
-
($ 204,188 )		 $ 2,230,790
128,274
(
218,940 )
(
90,666 )
-
3,750
123,021
-
$ 2,266,895
$ 2,266,895
92,205
(
105,791 )
(
13,586 )
-
(
18,400 )
-
-
-
7,372
30,461
$ 2,272,742		 $ 381,882
12,928
-
12,928
(
47,209 )
-
-
-
$ 347,601
$ 347,601
13,190
-
13,190
-
-
(
99,330 )
-
-
-
(
261,461 )
$ -		 $ 775,335
26,248
-
26,248
(
95,848 )
-
-
-
$ 705,735
$ 705,735
38,197
-
38,197
-
-
(
201,670 )
-
-
-
-
$ 542,262		 $ 3,388,007
167,450
(
218,940 )
(
51,490 )
(
143,057 )
3,750
123,021
-
$ 3,320,231
$ 3,320,231
143,592
(
105,791 )
37,801
-
(
18,400 )
(
301,000 )
-
-
7,372
(
231,000 )
$ 2,815,004

The attached notes to the consolidated financial statements form part of the consolidated financial statements. Please refer to them also.

Manager: Xian-Wen Liu

Chairman: Chia-Chi Hou

Accounting Officer: Chien-Chang Luo

~24~

ASCENT DEVELOPMENT CO., LTD. and SUBSIDIARIES (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Consolidated Statement of Cash Flows January 1 to December 31, 2022 and 2021

Expressed in thousands of NTD

Cash flow from operating activities
Net income before tax
Adjustment items
Income and expenses
Depreciation expense

Amortization expense

Expected credit impairment gain

Net gain from financial assets at FVTPL

Interest income

Dividend income

Interest expense

Shareholding in the profit of the affiliates
under the equity method

Impairment loss

Loss from disposal of investment

Changes in assets/liabilities related to operating
activities
Net changes in assets related to operating
activities
Notes receivable
Accounts receivable
Other receivables
other receivables – related parties
Inventory
Prepayments
Other financial assets - current
Other current assets
Other non-current assets
Net changes in liabilities related to operating
activities
Contract liabilities
Notes payable
Accounts payable
Other payables
Other payables - related parties
Other current liabilities
Cash outflow from operations
Interest paid
Income tax paid
Net cash outflow from operating activities		 Notes
January 1, 2022
to December 31,
2022
January 1, 2022
to December 31,
2021
$ 162,036 $ 180,421
VI(IX)(X)
(XI)(XXV)
21,663
21,703
VI(XXV)
-
6
XII(II)
- (
68 )
VI(II)(XXIII)
- (
2,206 )
VI(XXI)
(
3,738 ) (
3,680 )
VI(III)(XX)
(
3,354 ) (
42,424 )
VI(XXIV)
11,664
13,709
VI(VIII)
(
166,618 ) (
120,257 )
VI(XXIII)
46,403
-
VI(XXIII)
-
233
(
2,395 ) (
6,564 )
4,609
361
1,742 (
8,475 )
-
37,722
(
597,962 ) (
215,124 )
(
750 )
26,901
2
17,819
7,461 (
5,643 )
-
192
(
28,480 )
528
10,692 (
23,355 )
(
9,430 ) (
46,589 )
(
31,741 ) (
14,398 )
(
32 ) (
25 )
(
22,828)
17,504
(
601,056 ) (
171,709 )
(
11,709 ) (
13,779 )
(
6,390) (
16,558)

(
619,155) (
202,046)

(continued on next page)

~25~

ASCENT DEVELOPMENT CO., LTD. and SUBSIDIARIES (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Consolidated Statement of Cash Flows January 1 to December 31, 2022 and 2021


Cash flow from investment activities
Acquisition of financial assets at amortized cost
Acquisition of financial assets at FVTPL
Disposal of financial assets at FVTPL
Acquisition of financial assets at FVTOCI
Disposal of financial assets at FVTOCI
Decrease (increase) of other receivables - related
parties
Proceeds from disposal of subsidiary (less deposit
in bank of subsidiary disposed of)
Decrease (increase) of other financial assets - non-
current
Decrease (increase) in refundable deposits
Interest collected
Dividends received
Net cash inflow (outflow) from investing
activities
Cash flow from financing activities
Increase in short-term borrowings

Decrease in short-term notes payable

Lease principal repayment

Repayment of long-term borrowings

Long-term borrowings

Increase (decrease) in guarantee deposits received
Distribution of cash dividends

Cash paid for organizational restructuring

Capital reduction in cash
Net cash outflow from financing
Decrease in cash and cash equivalents for the current
period
Cash and cash equivalents
Cash and equivalent cash balance at the beginning of
the period
Expressed in thousands of NTD
Notes
January 1, 2022
to December 31,
2022
January 1, 2022
to December 31,
2021
( $ 60,000 ) $ -
- (
23,305 )
-
44,489
(
65,880 ) (
426,285 )
34,799
418,032
180,000 (
80,000 )
- (
1,782 )
32,612 (
22,621 )
(
39 )
9
6,999
3,571
92,385
42,424
220,876(
45,468)
VI(III)(XXX)
643,557
393,282
VI(III)(XXX)
(
113,096 ) (
265,902 )
VI(III)(XXX)
(
1,619 ) (
1,387 )
VI(III)(XXX)
(
430,000 ) (
16,000 )
VI(III)(XXX)
418,000
-
VI(III)(XXX)
(
217 )
82
VI(XVIII)
(
18,400 ) (
143,057 )
VI(XXIX)
(
231,000 )
-
(
301,000)
-
(
33,775) (
32,982)
(
432,054 ) (
280,496 )
953,814
1,234,310
$ 521,760 $ 953,814

The attached notes to the consolidated financial statements form part of the consolidated financial statements. Please refer to them also.

Manager : Hsien-Wen Liu

Chairman : Chia-Chi Hou

Accounting Officer : Chien-Chang Luo

~26~

Independent Auditors’ Report (2022) Cai-Shen-Bao-Zi No. 22004654

To ASCENT DEVELOPMENT CO., LTD.:

Audit Opinions

ASCENT DEVELOPMENT CO., LTD. (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.)’s balance sheet of December 31 of 2022 and 2021, the parent company only income statement, changes of equity, and parent compn=any only cash flow statement from January 1 to December 31 of 2022 and 2021 and the notes to the parent company only financial statements (including the summary of major accounting policies) have been audited by the Auditor of the Firm.

According to the opinions of the Auditor, based on our audit results and the audit reports of other auditors (please refer to the paragraph on other matters), the parent company only financial statements mentioned above have been prepared in all material respects in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, which is sufficient to express the Company’s parent company only financial status on December 31, 2022 and 2021, and parent company only financial performance and cash flow from January 1 to December 31 of 2022 and 2021.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on the audit results of the Auditor and the audit reports of other auditors, we believe that we have obtained sufficient and appropriate audit evidence as the basis for expressing the audit opinion.

Matters to be Emphasized

In the third quarter of 2022, ASCENT DEVELOPMENT CO., LTD. acquired 33% of the equities of Hanlin Development Co., Ltd., a subsidiary of Hanshen Asset Management Co., Ltd. (the ultimate parent company of the ASCENT DEVELOPMENT CO., LTD.), and obtained the control over it. Since this equity transaction is an organizational reorganization under common control, it should be regarded as an acquisition from the beginning. Therefore, the Company has retroactively recompiled the parent company only financial statements of the previous period when preparing the parent company only financial statements of 2022. Please refer to Notes 6(7) and 6(26) for details.

~27~

Key Audit Items

Key audit items refer to the most important items in the audit of the Company's 2022 parent company only financial statements based on our professional judgment. These matters have been dealt with in the process of checking the overall parent company only financial statements and reaching audit opinions, and the we do not express opinions on these matters independently.

The key audit items of the Company's parent company only financial statements of 2022 are as follows:

Impairment Testing of Investment Using the Equity Method

Descriptions

For the accounting policy of investment using the equity method, please refer to Note 4(14) of the financial statements, for the accounting policy of impairment of non-financial assets, please refer to Note 4(19) of the financial statements, and for the description of accounting items, please refer to the Notes 6(7) of the financial statements.

On December 31, 2022, the book value of ASCENT DEVELOPMENT CO., LTD.'s investment using the equity method was NT$1,319,796 thousands, accounting for 39% of the total individual assets. In accordance with the International Accounting Standard No. 28 "Investment in Affiliated Enterprises and Joint Ventures", the management level shall assess whether the recoverable amount of the investment is lower than the book value if there is objective evidence showing signs of impairment for the investment using the equity method. Since the objective evidence of its impairment assessment and the comprehensive consideration factors for determining the recoverable amount involve the subjective judgment of the management and have a high degree of uncertainty, and the investment amount using the equity method is significant, the auditor adopts the Company’s relevant Impairment assessment of equity method investments is listed as one of the most important matters of the audit.

Audit Procedure

The auditor has implemented the following procedures to respond to the specific aspects described in the above key audit items:

  1. Interview with the management level to understand the management's assessment of the signs of impairment of investments using the equity method and evaluate its rationality.

  2. To obtain the equity value evaluation report issued by the external evaluation experts appointed by the management, the procedures performed by the auditor are as follows:

  3. (1) Assess the suitability and objectivity of the external evaluation experts appointed by the management level.

  4. (2) Assess the appropriateness of the evaluation methods adopted by the external evaluation experts appointed by the management level and the rationality of the relevant assumptions.

~28~

Investments (Subsidiaries) Using the Equity Method - Appropriateness of the Attribution Period of Real Estate Sales Revenue

Descriptions

Please refer to Note 4(27) of the consolidated financial statements for the accounting policy of operating revenue in the construction industry, and Note 6(20) to the consolidated financial statements for descriptions of accounting items.

The real estate sales revenue of the construction industry is recognized when the ownership transfer of the real estate is completed and the house inspection certificate is delivered to the customer. Due to the wide market range of real estate sales in the construction industry, it is necessary to review the ownership transfer and other information one by one before recognizing the sales revenue. Usually, a lot of manual works would be required to determine the correctness of the recognition time of the sales revenue. The appropriateness of the vesting period is listed as one of the most important matters in the audit.

Audit procedure

The auditor has implemented the following procedures to respond to the specific aspects described in the above key audit items:

  1. Interview with management to understand and review the procedures for recognizing real estate sales revenue and adopt it consistently during the financial statement comparison period.

  2. Assess and verify the appropriateness of the attribution period of real estate sales income for a certain period before and after the deadline at the end of the period, including checking the land and building ownership transfer information and relevant dates to support the correctness of the recognition time of real estate sales revenue.

Other Matters - Reference to other Audits of other Auditors

For the Company's investment using the equity method in 2022, the financial statements were not audited by us, but by other auditors. Therefore, in the opinions expressed by us on the above-mentioned parent company only financial statements, the amount listed in the financial statements of the Companies and the relevant information disclosed in Note 13 are based on the audit reports of other auditors. On December 31, 2022 and 2021, the amount of investment in the above-mentioned companies using the equity method was NT$833,040 thousands and NT$861,569 thousands, respectively, accounting for 24% and 30% of the total parent company only assets. In 2022 and 2021 the individual profits and losses recognized for the aforementioned companies were NT$107,639 thousands and NT$83,468 thousands, respectively, accounting for (27,169%) and (92%) of the individual profits and losses for the current period.

Responsibilities of Management Level and Governance Units for the Parent Company Only Financial Statements

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

~29~

In preparing the parent company only financial statements, management is responsible for assessing the ability of the Company to continue as a going concern, disclosing, as applicable, matters related to a going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

The governance units (including the audit committee) of the Company are responsible for supervising the financial reporting process.

Responsibilities of Auditor to Audit Parent Company Only Financial Statements

The purpose of our audit of the parent company only financial statements is to obtain reasonable assurance as to whether there is any material misrepresentation in the parent company only financial statements as a whole resulting from fraud or error, and to issue an audit report. Reasonable certainty is of high degree of certainty, but there is no guarantee that the audit work performed in accordance with the auditing standards of the Republic of China will be able to detect material misstatement in the parent company only financial statements. Misstatements may result from fraud or error. Misstatement of individual amounts or aggregated amounts is considered material if it can reasonably be expected to affect economic decisions made by users of the parent company only financial statements.

As part of an audit in accordance with 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 parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, 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 overriding internal controls.

  2. Obtain an understanding of the 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 Company’s internal control.

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

  4. Conclude on the appropriateness of management level's use of the going concern basis of accounting and whether or not a material uncertainty exists related to events or conditions that may cast a significant doubt on the ASCENT DEVELOPMENT CO., LTD’ s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only 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 auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

  5. Assess the overall presentation, structure and content of the parent company only financial statements (including relevant notes), and whether the parent company only financial statements properly represent relevant transactions and events.

  6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We

~30~

remain solely responsible for our audit opinion.

The planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit.

We also provide the governance units with the statements that the personnel of the accounting firm that is subject to independence regulations have complied with the independence statement in the professional ethics code for CPAs of the Republic of China, and communicate with the governance units all relationships that may be considered to affect the independence of the auditors and other matters (including relevant protective measures).

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year 2022, and are therefore the key audit matters. We describe these matters in our auditor’s 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 Chun-Yuan Hsiao Accountant Se-Kai Lin

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

March 27, 2023

~31~

ASCENT DEVELOPMENT CO., LTD. (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Parent company only balance sheet December 31, 2022 and 2021

Assets Notes
VI(I)
VI(II)
VI(III)
VI(III)
VI(IV)(V)
VI(VI)
VI(VII)
VI(VIII)
VI(IX)
VI(X)
VII		 December 31, 2022
Amount
%
$ 265,162
8
80,000
2
2,210
-
-
-
27
-
-
-
1,516,099
45
3,142
-
51
-
1,866,691
55
81,275
2
1,319,796
39
167
-
13
-
129,438
4
338
-
416
-
3,790
-
1,535,233
45
$ 3,401,924
100		 Expressed in thousands of NTD
December 31, 2021
Amount
%
$ 418,151
13
20,000
1
260
-
2,615
-
43
-
69
-
851,534
26
2,134
-
6
-
1,294,812
40
110,932
4
1,692,540
52
192
-
46
-
131,509
4
395
-
396
-
3,790
-
1,939,800
60
$ 3,234,612
100
Amount
$ 265,162
80,000
2,210
-
27
-
1,516,099
3,142
51
1,866,691
81,275
1,319,796
167
13
129,438
338
416
3,790
1,535,233
$ 3,401,924		 Amount
$ 418,151
20,000
260
2,615
43
69
851,534
2,134
6
1,294,812
110,932
1,692,540
192
46
131,509
395
396
3,790
1,939,800
$ 3,234,612
Current assets
1100
Cash and cash equivalents

1136
Financial assets at amortized cost-
Current

1150
Notes receivable, net

1170
Net accounts receivable

1200
Other receivables
1220
Current income tax assets
130X
Inventory

1410
Prepayments
1470
Other current assets
11XX
Total current assets
Non-current assets
1517
Financial assets at FVTOCI - non-
current

1550
Investments accounted for using
equity method

1600
Property, plants, and equipment

1755
Right-of-use assets

1760
Investment property, net

1840
Deferred income tax assets
1920
Deposits received

1990
Other non-current assets - others
15XX
Total non-current assets
1XXX
Total assets

(continued on next page)

~32~

ASCENT DEVELOPMENT CO., LTD. (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Parent company only balance sheet December 31, 2022 and 2021

Liabilities and equity Expressed in thousands of NTD
December 31, 2022
December 31, 2021
Notes
Amount
%
Amount
%
VI(V)(XI)
$ 1,093,522
32
$ 607,820
19
12,066
1
-
-
2,604
-
2,595
-
11,355
-
8,571
-
-
-
32
-
5,757
-
-
-
13
-
34
-
2,326
-
415
-
1,127,643
33
619,467
19
511
-
13
-
-
-
13
-
1,028
-
623
-
1,539
-
649
-
1,129,182
33
620,116
19
VI(XIII)
920,000
27
920,000
29
VI(XIV)
182,854
5
145,021
4
VI(XV)
357,010
11
341,774
11
7,856
-
7,856
-
1,009,210
30
969,473
30
VI(XVI)
(
204,188) (
6) (
117,229) (
4)
-
-
347,601
11
2,272,742
67
2,614,496
81
IX
$ 3,401,924
100
$ 3,234,612
100
Current liabilities
2100
Short-term borrowings

2150
Notes payable
2170
Accounts payable
2200
Other payables
2220
Other payables - related parties
2230
Current income tax liabilities
2280
Lease liabilities - current
2300
Other current liabilities
21XX
Total of 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
Common stock capital
Capital surplus

3200
Capital surplus
Retained earnings

3310
Legal reserve
3320
Special reserves
3350
Undistributed earnings
Other equity

3400
Other equity
35XX
Equity owned by the previous holder
under the joint control
3XXX
Total equity
Significant contingent liabilities and
unrecognized contractual commitments

3X2X
Total liabilities and equity

The accompanying notes to parent company only financial statements constitute part of this parent company only financial report. Chairman : Chia-Chi Hou Manager : Hsien-Wen Liu Accounting Officer : Chien-Chang Luo

~33~

ASCENT DEVELOPMENT CO., LTD. (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Parent Company Only comprehensive income statement January 1 to December 31, 2022 and 2021

Expressed in thousands of NTD (Except for earnings per share in NTD)

Items 2022
2021
Notes
Amount
%
Amount
%
VI(V)(XVII)
$ 17,776
100
$ 78,799
100
VI(IV)
(
17,601)(
99)(
78,771)(
100)
175
1
28
-
VI(V) and VII
(
1,476) (
8) (
579)
-
(
33,502) (
189) (
27,433) (
35)
XII(II)
-
-
68
-
(
34,978)(
197) (
27,944)(
35)
(
34,803) (
196) (
27,916) (
35)

1,605
9
1,271
2
288
1
9,579
12
(
43,570) (
245)
2,651
3
(
385) (
2) (
5)
-
VI(VII)
188,751
1062
162,489
206
146,689
825
175,985
223
111,886
629
148,069
188
(
6,491) (
36) (
6,867) (
9)
$ 105,395
593
$ 141,202
179
4000
Revenue

5000
Operating Costs

5900
Gross profit
Operating Expenses

6100
Promotional expenses
6200
Administrative expenses
6450
Expected credit impairment gain
6000
Total operating expenses
6900
Net operating loss
Non-operating income and expense
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Financial cost
7070
Profit and loss share of
subsidiaries, affiliated
enterprises and joint ventures
recognized using the equity
method

7000
Total non-operating income
and expenses
7900
Income before tax
7950
Income tax expenses
8200
Current period net profit

(continued on next page)

~34~

ASCENT DEVELOPMENT CO., LTD. (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Parent Company Only comprehensive income statement January 1 to December 31, 2022 and 2021

Expressed in thousands of NTD (Except for earnings per share in NTD)

Items 2022
2021
Notes
Amount
%
Amount
%
VI(XVI)
VI(VI)
( $ 29,657) (
167) ( $ 60,506) (
77)
VI(VII)
(
76,134) (
428) (
158,434) (
201)
(
105,791)(
595) (
218,940) (
278)
( $ 105,791)(
595) ( $ 218,940)(
278)
( $ 396)(
2)( $ 77,738) (
99)
$ -
-
$ -
-
$ -
-
$ -
-
$ -
-
$ -
-
$ -
-
$ -
-
$ -
-
$ -
-
$ -
-
$ -
-
$ 1.00
$ 1.39
0.14
0.14
$ 1.14
$ 1.53
$ 1.00
$ 1.39
0.14
0.14
$ 1.14
$ 1.53
Other comprehensive profit and
loss

8316
Unrealized gains or losses on
investments in equity
instruments at FVTOCI

8330
Shares of other comprehensive
profit and loss of subsidiaries,
affiliates and joint ventures
recognized using the equity
method - items not reclassified
to profit or loss

8310
Total of items not reclassified
to profit or loss
8300
Other comprehensive income
(net amount)
8500
Total comprehensive income of
the current period
The net profit is attributed to:
Owner of parent company
Equity owned by the previous
holder under the joint control
Total
Total comprehensive income
attributable to:
Owner of parent company
Equity owned by the previous
holder under the joint control
Total
Basic earnings per share
9710
Owner of parent company
9720
Equity owned by the previous
holder under the joint control
9750
Basic earnings per share
Diluted earnings per share
9810
Owner of parent company
9820
Equity owned by the previous
holder under the joint control
9850
Diluted earnings per share

The accompanying notes to parent company only financial statements constitute part of this parent company only financial report.

Manager : Hsien-Wen Liu

Chairman : Chia-Chi Hou

Accounting Officer : Chien-Chang Luo

~35~

ASCENT DEVELOPMENT CO., LTD. (Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.) Parent Company Only Statement of Changes in Individual Equity January 1 to December 31, 2022 and 2021

2021 (restated)
Balance at January 1, 2021
Current period net profit
Other comprehensive income of current period
Total comprehensive income of the current
period
Appropriation and distribution of earnings
Cash dividends
Disposal of equity instruments at FVTOCI
Changes in the net equity value of affiliates
recognized under the equity method
Disposal of equity instruments at FVTOCI by
affiliates
Balance at December 31, 2021
2022
Balance at January 1, 2022
Current period net profit
Other comprehensive income of current period
Total comprehensive income of the current
period
Appropriation and distribution of earnings
Appropriation of legal reserve
Cash dividends
Capital reduction in cash
Disposal of equity instruments at FVTOCI
Changes in the net equity value of affiliates
recognized under the equity method
Disposal of equity instruments at FVTOCI by
affiliates
Impact of organizational reorganization
Balance at December 31, 2022		 Notes Common stock capital Capital surplus Retained earnings Unrealized gains or
losses on financial
assets measured at fair
value through other
comprehensive income
Legal reserve Special reserves Undistributed earnings
VI(XVI)
VI(XV)
VI(VI)(XVI)
VI(VII)
VI(VII)(XVI)
VI(XVI)
VI(XV)
VI(VI)(XVI)
VI(VII)
VI(XVI)
VI(XIV)		 $ 920,000
-
-
-
-
-
-
-
$ 920,000
$ 920,000
-
-
-
-
-
-
-
-
-
-
$ 920,000		 $ 10,714
-
-
-
-
-
123,021
11,286
$ 145,021
$ 145,021
-
-
-
-
-
-
-
7,372
-
30,461
$ 182,854		 $ 341,774
-
-
-
-
-
-
-
$ 341,774
$ 341,774
-
-
-
15,236
-
-
-
-
-
-
$ 357,010		 $ 7,856
-
-
-
-
-
-
-
$ 7,856
$ 7,856
-
-
-
-
-
-
-
-
-
-
$ 7,856		 $ 817,112
128,274
(
96 )
128,178
-
45,791
-
(
21,608 )
$ 969,473
$ 969,473
92,205
696
92,901
(
15,236 )
(
18,400 )
-
76
-
(
19,604 )
-
$ 1,009,210		 $ 133,334
-
(
218,844 )
(
218,844 )
-
(
42,041 )
-
10,322
($ 117,229 )
($ 117,229 )
-
(
106,487 )
(
106,487 )
-
-
-
(
76 )
-
19,604
-
($ 204,188 )		 $ 381,882
12,928
-
12,928
(
47,209 )
-
-
-
$ 347,601
$ 347,601
13,190
-
13,190
-
-
(
99,330 )
-
-
-
(
261,461 )
$ -

The accompanying notes to parent company only financial statements constitute part of this parent company only financial report.

Manager: Xian-Wen Liu

Chairman: Chia-Chi Hou

Accounting Officer: Chien-Chang Luo

~36~

ASCENT DEVELOPMENT CO., LTD. (formerly known as Chung Ho Wool Industrial Co., Ltd.) Parent Company Only Statement of Cash Flows January 1 to December 31, 2022 and 2021

Expressed in thousands of NTD

Cash flow from operating activities
Net income before tax
Adjustment items
Income and expenses
Depreciation expense

Amortization expense
Expected credit impairment gain

Net gain from financial assets at FVTPL
Interest expense
Interest income
Dividend income
Shares of interests in subsidiaries and
affiliated companies recognized using the
equity method

Impairment loss

Changes in assets/liabilities related to operating
activities
Net changes in assets related to operating
activities
Notes receivable
Accounts receivable
Other receivables
other receivables – related parties
Inventory
Prepayments
Other current assets
Net changes in liabilities related to operating
activities
Notes payable
Accounts payable
Other payables
Other payables - related parties
Other current liabilities
Cash outflow from operations
Interest paid
Income tax paid
Net cash outflow from operating activities		 Notes
January 1, 2022
to December 31
January 1, 2021
to December 31
$ 111,886 $ 148,069
VI(VIII)(IX)(X)
2,129
2,128
-
6
XII(II)
- (
68 )
- (
2,491 )
385
5
(
1,605 ) (
1,271 )
- (
9,056 )
VI(VII)
(
188,751 ) (
162,489 )
VI(VII)
46,403
-
(
1,950 )
585
2,615
8,337
(
4 )
-
-
37,722
(
664,565 ) (
608,405 )
(
1,008 )
10,446
(
45 )
-
12,066
-
9 (
205 )
2,784 (
5,103 )
(
32 ) (
25 )
1,911 (
601 )
(
677,772 ) (
582,416 )
(
385 ) (
5 )
(
110 ) (
3,466 )

(
678,267 ) (
585,887 )

(continued on next page)

~37~

ASCENT DEVELOPMENT CO., LTD. (formerly known as Chung Ho Wool Industrial Co., Ltd.) Parent Company Only Statement of Cash Flows January 1 to December 31, 2022 and 2021

Expressed in thousands of NTD

Cash flow from investment activities
Acquisition of financial assets at FVTPL
Disposal of financial assets at FVTPL
Acquisition of financial assets at amortized cost
Decrease (increase) in refundable deposits
Refund of capital reduction of investments under
the equity method
Payments for organizational restructuring
Interest collected
Dividends received
Net cash inflow from investing activities
Cash flow from financing activities
Increase in short-term borrowings
Lease principal repayment
Increase in deposits received
Distribution of cash dividends

Net cash inflow from financing activities
Decrease in cash and cash equivalents for the current
period
Cash and cash equivalents
Cash and equivalent cash balance at the beginning of
the period		 Notes
January 1, 2022
to December 31
January 1, 2021
to December 31
$ - ( $ 7,440 )
-
28,909
(
60,000 )
-
(
20 )
11
200,000
-
(
231,000 )
-
1,625
1,334
147,000
9,056
57,605
31,870
485,702
450,820
(
34 ) (
33 )
405
245
VI(XV)
(
18,400 )
-

467,673
451,032
(
152,989 ) (
102,985 )
418,151
521,136
$ 265,162 $ 418,151

The accompanying notes to parent company only financial statements constitute part of this parent company only financial report.

Manager : Hsien-Wen Liu

Chairman : Chia-Chi Hou

Accounting Officer : Chien-Chang Luo

~38~

[Attachment 5] 2022 Statement of Earning Distribution

ASCENT DEVELOPMENT CO., LTD.

(Previous name: CHUWA WOOL INDUSTRY CO., (TAIWAN) LTD.)

2022 Statement of Earning Distribution

Items Unit: NTD
Amount
$935,836,563
$92,204,552
696,088
(19,527,713)
73,372,927
(7,337,293)
(204,188,293)
797,683,904
(27,600,000)
$770,083,904
Opening undistributed earnings
Comprehensive net profit after tax for the period
Plus: remeasurement of defined benefit liabilities,
net
Less: 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 net income for
the period
Provision of legal reserve (10%)
Special reserve
Distributable earnings for the period
Distributable items
Shareholder’s bonus (NT$0.3 per share)
Closing undistributed earnings

Chairman: Chia-Chi Hou Managerial Officer: Hsien-Wen Liu Accounting Officer: Chien-Chang Luo

~39~

[Attachment 6] Comparison Table of the “Handling Procedures for Acquisition or Disposal of Assets” Before and After Amendment, and Description Thereof

ASCENT DEVELOPMENT CO., LTD.

Comparison Table of the “Handling Procedures for Acquisition or Disposal of Assets” Before and After Amendment, and Description Thereof

Clauses Amended Articles Amended Articles Existingclause Explanation
Article 7
Procedures
for
acquisition
or
disposal
of real estate
or equipment


(Above is omitted)
V. Except where a limited
price, specified price, or
special price is employed
by construction companies
as the reference basis for
the transaction price, if an
appraisal report cannot be
obtained in time and there
is a legitimate reason for
the delay, the appraisal
report shall be obtained
within 2 weeks counting
inclusively from the date
of occurrence, and the
CPA’s opinion under
Subparagraph 3 of the
preceding Paragraph shall
be obtained within 2
weeks counting
inclusively from the date
of obtaining the appraisal
report.
(Above is omitted)
(The
paragraph
is
added)
1. To cope with the
Company’s
business
development
and operational
requirements,
paragraph 5 of
article 7 is added
regarding the
requirement for
construction
companies to
obtain the
appraisal report.
2. The provision is
amended
pursuant to
paragraph 2,
article 9 of the
“regulations
governing the
acquisition and
disposal of
assets by public
companies.”

price, specified price, or
special price is employed
by construction companies

as the reference basis for
the transaction price, if an

appraisal report cannot be

obtained in time and there
is a legitimate reason for
the delay, the appraisal
report shall be obtained
within 2 weeks counting
inclusively from the date
of occurrence, and the
CPA’s opinion under
Subparagraph 3 of the
preceding Paragraph shall

be obtained within 2
weeks counting
inclusively from the date
of obtaining the appraisal

report.

~40~

  • [Attachment 7] Comparison Table of the “Operational Procedures for Making Endorsements/Guarantees” Before and After Amendment, and Description Thereof

ASCENT DEVELOPMENT CO., LTD.

Comparison Table of the “Operational Procedures for Making

Endorsements/Guarantees” Before and After Amendment, and Description Thereof

Clauses Amended Articles Existingclause Explanation
5.2
Companies may be
provided with
endorsements/guarant
ees:		 5.2.1 The company may
make
endorsements/guarante
es for the following
companies:
5.2.1.1 A company
with which it
does business.
5.2.1.2 A company in
which the
public
company,
directly and
indirectly,
holds more
than 50% of
the voting
shares.
5.2.1.3 A company
that directly
and indirectly
holds more
than 50% of
the voting
shares in the
public
company.
~~5.2.2 Companies in which the~~
~~Company holds,~~
~~directly or indirectly,~~
~~90% or more of the~~
5.2.1 The company may
make
endorsements/guarante
es for the following
companies:
5.2.1.1 A company
with which it
does business.
5.2.1.2 A company in
which the
public
company,
directly and
indirectly,
holds more
than 50% of
the voting
shares.
5.2.1.3 A company
that directly
and indirectly
holds more
than 50% of
the voting
shares in the
public
company.
5.2.2 Companies in which
the Company holds,
directly or indirectly,
90% or more of the		 To cope with the
Company’s business
development and
operational
requirements, the
provision of 5.2.2 is
deleted, and the
previous provision of
5.2.3 is moved to
5.2.2 with texts
amended.

~41~

Clauses Amended Articles Amended Articles Existingclause Explanation
~~voting shares may~~
~~make~~
~~endorsements/guarante~~
~~es for each other, and~~
~~the amount of~~
~~endorsements/guarante~~
~~es may not exceed~~
~~10% of the net worth~~
~~of the Company. this~~
~~restriction shall not~~
~~apply to~~
~~endorsements/guarante~~
~~es made between~~
~~companies in which~~
~~the Company holds,~~
~~directly or indirectly,~~
~~100% of the voting~~
~~shares.~~
5.2.2Where the Company
fulfills its contractual
obligations by
providing mutual
endorsements/guarante
es for another company
in the same industry or
for joint builders for
purposes of
undertaking a
construction project, or
where all capital
contributing
shareholders make
endorsements/
guarantees for their
jointly invested
company in proportion
to their shareholding,
ages, or where		 ~~voting shares may~~
~~make~~
~~dt/t~~
voting shares may
make
endorsements/guarant
ees for each other, and
the amount of
endorsements/guarant
ees may not exceed
10% of the net worth
of the Company. This
restriction shall not
apply to
endorsements/guarant
ees made between
companies in which
the Company holds,
directly or indirectly,
100% of the voting
shares.
5.2.3 Where the Company
fulfills its contractual
obligations by
providing mutual
endorsements/guarant
ees for another
company in the same
industry or for joint
builders for purposes
of undertaking a
construction project,
or where all capital
contributing
shareholders make
endorsements/
guarantees for their
jointly invested
company in proportion
to their shareholding,
ages, or where
~~enorsemensguarane~~
~~es for each other, and~~
~~the amount of~~
~~dt/t~~
~~enorsemensguarane~~
~~es may not exceed~~
~~10% of the net worth~~
~~of the Company. this~~
~~restriction shall not~~
~~apply to~~
~~dt/t~~

~42~

Clauses Amended Articles Amended Articles Existingclause Explanation
companies in the same
industry provide
among themselves joint
and several security for
a performance
guarantee of a sales
contract for pre-
construction homes
pursuant to the
consumer protection
act for each other, such
endorsements/guarante
es may be made free of
the restriction of the
5.2.1.		 companies in the same
industry provide
among themselves
joint and several
security for a
performance
guarantee of a sales
contract for pre-
construction homes
pursuant to the
consumer protection
act for each other,
such
endorsements/guarant
ees may be made free
of the restriction of the
preceding paragraphs.
5.3
Handling Procedures		 (Above is omitted)
5.3.1.3 Limits for aggregated
endorsements/guarant
ees and to individual
entities:
(1)Financing
endorsements/guara
ntees, customs duty
endorsements/guara
ntees,
and
other
endorsements/guara
ntees:
The total amount of
the
endorsements/guaran
tees made by the
Company must not
exceed 50% of the net
worth
of
the
Company; the sum of
the










(Above is omitted)
5.3.1.3 Limits for aggregated
endorsements/guaran
tees and to individual
entities:
(1)Financing
endorsements/guaran
tees, customs duty
endorsements/guaran
tees,
and
other
endorsements/guaran
tees:
The total amount of
the
endorsements/guaran
tees made by the
Company must not
exceed 50% of the net
worth
of
the
Company; the sum of
the









To cope with the
Company’s business
development and
operational
requirements, under
the (1) financing
endorsements/guarant
ees, customs duty
endorsement/guarante
e, and other
endorsements/guarant
ees of 5.3.1.3, the
limit of
endorsements/guarant
ees to
endorsed/guaranteed
companies pursuant to
5.2.2. is added.

~43~

Clauses Amended Articles Amended Articles Existingclause Explanation
endorsement/guarant
ee
made
by
the
Company and the
subsidiaries must not
exceed 50% of the net
worth
of
the
Company.
The amount of the
endorsements/guaran
tees made by the
Company
to
any
single entity must not
exceed 50% of the net
worth
of
the
Company; the sum of
the
endorsement/guarant
ee
made
by
the
Company and the
subsidiaries to any
single entity must not
exceed 50% of the net
worth
of
the
Company.
This restriction shall






















endorsement/guarant
ee
made
by
the
Company and the
subsidiaries must not
exceed 50% of the net
worth
of
the
Company.
The amount of the
endorsements/guaran
tees made by the
Company
to
any
single entity must not
exceed 50% of the net
worth
of
the
Company; the sum of
the
endorsement/guarant
ee
made
by
the
Company and the
subsidiaries to any
single entity must not
exceed 50% of the net
worth
of
the
Company.
(Below is omitted)
















not
apply
to

endorsements/guaran
tees made pursuant to

5.2.2,
or
between

companies in which

the Company holds,

directly or indirectly,

100% of the voting

shares. Provided that
the total amount of
these
endorsements/guaran
tees shall not exceed

~44~

Clauses Amended Articles Amended Articles Existingclause Explanation
200% of the net
worth in the latest
financial
statement,
and the individual
amount
of
these
endorsements/guaran
tees shall not exceed
100% of the net
worth in the latest
financial statement
(Below is omitted)		 200% of the net

worth in the latest
financial
statement,
and the individual
amount
of
these
endorsements/guaran
tees shall not exceed
100% of the net
worth in the latest

~45~

[Attachment 8] Concurrent positions held by the directors in other companies

ASCENT DEVELOPMENT CO., LTD.

Concurrent Positions Held by the Directors in Other Companies

Title Name Company Where the
Concurrent Position is Held		 Position
Chairman Xue Yong Co., Ltd.
Representative:
Chia-Chi Hou		 Grand Hi-Lai Hotel Co.,
Ltd.		 Corporate
Representative
Director
Director Representative of Zu
Sheng International
Co., Ltd.: Ming-Yu
Huang		 Solomon
Technology
Corporation		 Independent
Director
Director Representative of Zu
Sheng International
Co.,
Ltd.:
Chien-
Ting Chen		 Visual Photonics Epitaxy
Co., Ltd		 Corporate
Representative
Director
Independent
Director		 Teng-Cheng Liu BES Engineering Inc. Independent
Director

~46~

[Appendix 1]

  • Articles of Incorporation of ASCENT DEVELOPMENT CO., LTD. Chapter 1 General Provision

  • Article 1 The Company is organized in accordance with the provisions of the Company Act and named ASCENT DEVELOPMENT CO., LTD.

  • Article 2 The business scope of the Company is as follows:

    • I. C306010 Wearing Apparel. II. C307010 CLOTHING ACCESSORIES. III. C399990 OTHER TEXTILE AND PRODUCTS MANUFACTURING.

    • IV. F101990 WHOLESALE OF OTHER AGRICULTURAL, LIVESTOCK AND AQUATIC PRODUCTS.

    • V. F104110 WHOLESALE OF CLOTHS, GARMENTS, SHOES, HATS, UMBRELLAS AND CLOTHING ACCESSORIES.

    • VI. F204110 RETAIL SALE OF CLOTHS, GARMENTS, SHOES, HATS, UMBRELLAS AND CLOTHING ACCESSORIES.

    • VII. F401010 INTERNATIONAL TRADE. VIII. F601010 INTELLECTUAL PROPERTY RIGHTS.

    • IX. H701010 HOUSING AND BUILDING DEVELOPMENT AND RENTAL.

    • X. H701020 INDUSTRIAL FACTORY DEVELOPMENT AND RENTAL.

    • XI. H701040 SPECIFIC AREA DEVELOPMENT. XII. H701050 INVESTMENT, DEVELOPMENT AND CONSTRUCTION IN PUBLIC CONSTRUCTION.

    • XIII. H701060 NEW TOWNS, NEW COMMUNITY DEVELOPMENT.

    • XIV. H703090 REAL ESTATE BUSINESS. XV. I301030 ELECTRONIC INFORMATION SUPPLY SERVICES.

XVI. H703100 REAL ESTATE LEASING. XVII. I101110 TEXTILE CONSULTING. XVIII. I501010 PRODUCT DESIGNING. XIX. I502010 CLOTHING DESIGNING. XX. C104020 MANUFACTURE OF BAKERY AND STEAM PRODUCTS.

  • XXI. F102040 WHOLESALE OF NONALCOHOLIC BEVERAGES.

  • XXII. F102170 WHOLESALE OF FOODS AND GROCERIES.

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XXIII. F106020 WHOLESALE OF DAILY COMMODITIES. XXIV. F108040 WHOLESALE OF COSMETICS. XXV. F203010 RETAIL SALE OF FOOD, GROCERY AND BEVERAGE. XXVI. F206020 RETAIL SALE OF DAILY COMMODITIES. XXVII. F208040 RETAIL SALE OF COSMETICS. XXVIII. C109010 MANUFACTURE OF SEASONING. XXIX. C105010 EDIBLE OIL AND FAT MANUFACTURING. XXX. C114010 FOOD ADDITIVES MANUFACTURING. XXXI. C110010 BEVERAGE MANUFACTURING. XXXII. C104010 MANUFACTURING OF SUGAR CONFECTIONERY. XXXIII. C106010 GRAIN HUSKING, MANUFACTURE OF GRAIN MILL PRODUCTS, STARCHES AND STARCH PRODUCTS. XXXIV. C199010 MANUFACTURE OF NOODLES, COUSCOUS AND SIMILAR FARINACEOUS PRODUCTS. XXXV. C199990 MANUFACTURE OF OTHER FOOD PRODUCTS NOT ELSEWHERE CLASSIFIED. XXXVI. F102030 WHOLESALE OF TOBACCO AND ALCOHOL.

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

  • Article 2-1 The Company’s reinvestment shall be handled in accordance with the resolution of the Board of Directors, and the total investment may exceed 40% of the paid-in share capital.

  • Article 2-2 For the business needs, the Company may handle endorsement and guarantee matters in accordance with the Company’s regulations governing endorsement and guarantee procedures.

  • Article 3 The Company is headquartered in Taipei City and may establish domestic or foreign branches subject to board of ‘directors’ approval.

  • Chapter 2 Shares

  • Article 4 The total capital of the Company is NT$1.1 billion, which is divided into 110 million shares, each with a par value of NT$10 issued in batches by the Board of Directors under authorization.

  • The shares of the Company are all in registered form, signed or sealed by the director representing the Company, and issued after being legally certified.

Shares of the Company are exempted from actual printing but shall be

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registered with the Taiwan Depository and Clearing Corporation.

  • Article 5 The Company’s stock affairs are processed in accordance with the “Criteria Governing Handling of Stock Affairs by Public Stock Companies” provided by the competent authority.

  • Article 6 Changes to the content of the register of shareholders shall be suspended during the 60 days prior to an annual general meeting, or during the 30 days prior to an extraordinary shareholders’ meeting, and during the 5 days prior to the baseline date of dividend, bonus and rights distribution.

  • Article 6-1 When the Company issues new shares, the employees entitled to purchase the shares may include employees of the controlling/controlled companies or affiliates which meet the terms and conditions set by the Board of Directors or its authorized personnel.

  • When the Company purchases the treasury stocks based on the Company Act, those for transfer may include employees of the controlling/controlled companies or affiliates which meet the terms and conditions set by the Board of Directors or its authorized personnel. Those entitled to receive stock options may include employees of the controlling/controlled companies or affiliates which meet the terms and conditions set by the Board of Directors or its authorized personnel. When the Company issues RSA, those entitled to receive RSA may include employees of the controlling/controlled companies or affiliates which meet the terms and conditions set by the Board of Directors or its authorized personnel.

Chapter 3 Shareholders’ Meeting

  • Article 7 The Company holds two types of shareholders’ meetings: the annual general meeting and the extraordinary shareholders’ meeting. The annual general meeting shall be held within six months after the end of an accounting period, whereas extraordinary shareholders’ meetings may be held whenever deemed necessary, subject to compliance with relevant laws.

  • Article 8 Shareholders shall be notified of the date, time, place and reason for convening the shareholders’ meeting 30 days before the regular meeting and 15 days before the extraordinary meeting. For shareholders holding less than 1,000 registered shares, the aforesaid convening notice may be made by public announcement.

  • Article 8-1 The shareholders’ meetings may be held by teleconferencing or other means announced by the Ministry of Economic Affairs.

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  • Article 9 Each of the shareholders of the Company has one vote for each share held, and unless otherwise specified by the Company Act, resolutions at a shareholders’ meeting shall be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares.

  • During the shareholders’ meeting of the Company, the shareholders may exercise his/her/its voting power by way of electronic transmission and shall be deemed to have attended the shareholders’ meeting in person. Such matters shall be handled in accordance with relevant laws and regulations.

  • Article 10 Shareholders unable to attend the meeting in person may offer to show the power of attorney issued by the Company that specifies the scope of authorization and authorize their proxy to attend the meeting. However, if a person is entrusted by two or more shareholders at the same time, the voting rights of the proxy shall not exceed 3% of the total number of issued shares. If the voting rights of the proxy exceeded the threshold, the excess voting rights shall not be counted. Shareholders who commission their proxy to attend meetings shall comply with the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies promulgated by the securities authority unless otherwise specified by the Company Act.

  • Chapter 4 Director

  • Article 11 The Company shall have five to seven directors (including independent directors). The election of directors shall adopt the candidate nomination system stipulated in Article 192-1 of the Company Act. The shareholders’ meeting shall elect the candidates from the list of candidates. The term of office of directors is three years and they may be re-elected. When the term of office expires and there is no sufficient time for re-election, the original term of office may be extended until the time of re-election; when the vacant directors’ seats reach one-third of all director seats or all independent directors are dismissed, the Board of Directors shall hold an extraordinary meeting of shareholders within 60 days to make up for the remaining original term of office.

Among the number of directors referred to in the preceding Paragraph, there shall be at least two independent directors and no less than one-fifth of the seats of directors. The professional qualification, shareholding,

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part-time job restrictions, nominations, means of election, as well as other relevant issues, should all be in accordance with the regulations of the competent authority.

  • Unless otherwise regulated by the Company Act, a resolution of the Board meeting shall be approved by consent of a majority of the Directors present at the meeting attended by a majority of all Directors. If any director is unable to attend in person for any reason, he/she may entrust another director to serve as the proxy, but independent directors may only entrust another independent directors as the proxy. However, each director may only be entrusted by one of the other directors.

  • Article 11-1 The convening of the meeting of the Board of Directors of the Company shall be notified to all directors seven days prior to the meeting. However, in case of an emergency, it can be convened at any time.

  • The convening notice stated in the preceding Paragraph shall specify the reasons for convening the meeting and may be prepared in writing, e- mail or fax.

  • Article 12 The Company’s business operations shall be governed by the resolution system of the Board of Directors.

  • Article 13 The Company shall have a Chairman and, if necessary, a Vice Chairman, who shall be elected among the directors. Internally, the Chairman shall serve as the chairperson of the Company’s meetings of shareholders and the Board of Directors, and convene the meetings of the Board of Directors; and externally, he/she shall represent the Company. If the Chairman is on leave or is unable to exercise duties for any reason, the Vice Chairman will act on behalf; if there is no Vice-Chairman or if the Vice Chairman is also on leave or is unable to exercise duties for any reason, the Chairman may appoint one of the directors to perform an acting duty; if no delegate is appointed by the Chairman, one shall be appointed from among the directors.

  • Article 14 The Company’s Board of Directors may establish various functional committees whose membership, the exercise of powers and related matters shall be handled in accordance with relevant laws and regulations, and shall be otherwise determined by the Board of Directors. The Company shall establish the “Audit Committee” based on Article 14-4 of the Securities and Exchange Act. Matters related to the number and term of office, the power and the rules of procedure for meetings of the Audit Committee shall be defined in the Audit Committee Charter that

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formulated under the Regulations Governing the Exercise of Powers by Audit Committees of Public Companies.

  • Article 15 All directors may receive travel expenses of the amount determined by the Board of Directors.

  • The remuneration of directors is authorized at the meetings of the Board of Directors based on their level of participation in and contribution to the ‘Company’s operation. The remuneration follows the standards among the industry peers.

  • Article 15-1 The Company shall purchase liability insurance for the directors during their term of office for the legal liability within the scope of their business execution, so as to mitigate and disperse the risks of severe damages to the Company and shareholders caused by directors’ errors or negligence.

Chapter 5 Managers

  • Article 16 The Company may create managerial positions including one position for the President and several ones for managers. Appointment, dismissal and remuneration of whom shall comply with Article 29 of the Company Act.

  • Chapter 6 Accounting

  • Article 17 The fiscal year of the Company is from January 1 to December 31. At the end of each fiscal year, the Board of Directors shall prepare the following documents, which shall be submitted to the Audit Committee 30 days before the general meeting of shareholders according to laws and regulations, and then submit them to the general meeting of shareholders for approval.

  • I. Business Report

  • II. Financial statements

  • III. Proposal for the distribution of surplus or make-up for the loss

  • Article 18 The Company shall use the current year’s pre-tax profits to deduct the benefits before distributing employee remuneration and director’s remuneration. After retaining to make up for the accumulated losses, if there is any balance, it shall allocate 0.5% to 5% of such balance as employees’ remuneration, and the directors’ remuneration shall not exceed 2%. Decisions on the distribution ratio of employees’ and ‘directors’ remuneration, and whether the employees’ remuneration shall be distributed in stocks or cash shall be made by the meeting of the Board

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of Directors attended by more than two-thirds of the directors and the resolution approved by more than half of the directors present, which shall be reported to the shareholders’ meeting.

Those entitled to receive employees’ remuneration in the forms of stocks or cash may include employees of the controlling/controlled companies or affiliates which meet the terms and conditions set by the Board of Directors or its authorized personnel.

The remuneration of directors can only be paid in cash, and the independent directors of the Company are not included in the annual remuneration distribution.

Article 18-1 The Company’s earning distribution or loss compensation may be conducted after the end of each fiscal year. If there is any surplus in the annual final accounts, taxes shall be paid first, then the accumulated losses shall be made up, then the employees’ remuneration shall be estimated to be retained., then 10% of the balance shall be allocated to the legal reserve; however, this does not apply when the legal reserve has reached the total amount of the capital of the Company. Further, based on laws or regulations of the competent authority, the special reserve shall be appropriated or reversed. If there is any surplus left, its balance shall be added to the accumulated undistributed surplus as dividends for shareholders. The Board of Directors shall prepare a distribution proposal in the form of issuance of new shares, which shall be submitted to the meeting of shareholders to reach the resolution of distribution; if in the form of cash, it shall be subject to the resolution of the Board of Directors. If after determining the annual final account and there is any profit, such profit shall be first allocated for paying the tax payable and making up the losses, and the Company shall appropriate 10% as the legal reserve. However, when the legal reserve amounts to the authorized capital, this shall not apply. Further, based on laws or regulations of the competent authority, the special reserve shall be appropriated or reversed. If there is any surplus left, its balance shall be added to the accumulated undistributed surplus as dividends for shareholders. The Board of Directors shall prepare a distribution proposal in the form of the issuance of new shares, which shall be submitted to the meeting of shareholders to reach the resolution of distribution.

Any cash distribution of dividends, profit, legal reserve or capital reserve, whether in whole or in part, must be resolved in a board meeting with more than two-thirds of the board present, voted in favor by more than

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half of attending directors, and reported in the upcoming shareholders’ meeting.

  • Article 18-2 In response to the current competitive and ever-changing business environment and continuous EXPANSION of the Company, the Company shall distribute dividends in a combination of shares and cash depending on factors such as future capital needs, financial structure, and consideration of shareholders’ rights and interests, among which cash dividends shall not be lower than 20% of the total dividends.

Chapter 7 Supplementary Provisions

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

  • Article 20 These Articles of Incorporation were formulated on August 19, 1964. The 1st amendment was effective on March 2, 1967. The 2nd amendment was effective on May 16, 1967. The 3rd amendment was effective on March 15, 1968. The 4th amendment was effective on March 24, 1970. The 5th amendment was effective on May 31, 1971. The 6th amendment was effective on April 29, 1972. The 7th amendment was effective on April 26, 1973. The 8th amendment was effective on December 21, 1974. The 9th amendment was effective on March 30, 1977. The 10th amendment was effective on July 15, 1978. The 11th amendment was effective on August 10, 1980. The 12th amendment was effective on April 11, 1981. The 13th amendment was effective on March 27, 1982. The 14th amendment was effective on April 2, 1983. The 15th amendment was effective on September 5, 1983. The 16th amendment was effective on April 27, 1985. The 17th amendment was effective on July 17, 1985. The 18th amendment was effective on April 26, 1986. The 19th amendment was effective on June 28, 1986. The 20th amendment was effective on April 25, 1987. The 21st amendment was effective on April 2, 1988. The 22nd amendment was effective on May 16, 1988. The 23rd amendment was effective on April 4, 1989. The 24th amendment was effective on April 23, 1990. The 25th amendment was effective on April 11, 1991. The 26th amendment was effective on April 15, 1993. The 27th amendment was effective on May 2, 1996. The 28th amendment was effective on May 4, 1999. The 29th amendment was effective on May 23, 2000. The 30th amendment was effective on May 8, 2001. The 31st amendment was effective on May 22, 2002. The 32nd amendment was

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effective on May 27, 2004. The 33rd amendment was effective on June 14, 2005. The 34th amendment was effective on June 9, 2006. The 35th amendment was effective on June 25, 2010. The 36th amendment was effective on June 15, 2012. The 37th amendment was effective on June 29, 2016. The 38th amendment was effective on June 6, 2017. The 39th amendment was effective on June 8, 2018. The 40th amendment was effective on June 24, 2019. The 41st amendment was effective on February 17, 2020. The 42nd amendment was effective on June 24, 2020. The 43rd amendment was made on June 23, 2022.

Chia-Chi Hou, Chairman

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[Appendix 2]

ASCENT DEVELOPMENT CO., LTD.

Shareholder’s Meeting Rules of Procedures

Revised and approved by the regular meeting of shareholders on June 23, 2022

  • ARTICLE 1: This policy has been established in accordance with Article 5 of “Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies” to promote proper governance over the ‘Company’s shareholders’ meetings and to enforce supervisory and administrative functions of such meetings.

  • ARTICLE 2: Unless otherwise specified by law or Articles of Incorporation, shareholders’ meetings shall proceed according to the terms of this policy.

  • ARTICLE 3: Unless otherwise specified by law, shareholders’ meetings are to be convened by the Board of Directors.

  • Any changes to the convening of a shareholders’ meeting shall be resolved in a board meeting, which should be completed at the latest before the notice of the shareholders’ meeting is sent.

  • The Company shall prepare an electronic file that contains the meeting advice, a proxy form, a detailed agenda of topics to be acknowledged or discussed during the meeting, and notes on the election or dismissal of directors and post it onto the Market Observation Post System (MOPS) at least 30 days before an annual general meeting, or 15 days before an extraordinary shareholders’ meeting. The meeting agenda and supplemental information of shareholdings’ meetings shall be prepared in the form of an electronic file and uploaded to the MOPS 21 days before a general meeting or 15 days before an extraordinary meeting. However, if the ‘Company’s paid-in capital reaches NT$10 billion or more as of the end of the most recent fiscal year, or if the combined percentage of foreign capital and Chinese capital holdings as recorded in the ‘shareholders’ register at the time of the most recent annual ‘shareholders’ meeting reaches 30% or more, the Company shall complete the aforementioned electronic files uploading 30 days prior to the annual ‘shareholders’ meeting. Physical copies of the shareholders’ meeting conference manual and supplementary information shall be prepared at least 15 days before the meeting, and made accessible to shareholders upon request. These documents must also be placed within the ‘Company’s premises and at the stock transfer agent.

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The Company shall provide shareholders with the meeting agenda and supplemental information in the preceding paragraph for reference on the date of the meeting and by the following means:

  • I. Distributed at the venue of the meeting for a physical shareholders’ meeting.

  • II. Distributed at the venue of the meeting for a physical shareholders’ meeting, and transmitted to the video conference platform in the form of an electronic file for a physical ‘shareholders’ meeting with the assistance of a video conference.

  • III. Transmitted to the video conference platform in the form of an electronic file for video ‘shareholders’ meeting.

The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form. Discussions concerning election or dismissal of directors, amendment of Articles of Incorporation, capital reduction, cessation of public offerings, permission for ‘directors’ involvement in competing businesses, earnings capitalization, capitalization of capital reserves, dismissal of the Company, mergers, divestments, and any issues listed in Paragraph 1, Article 185 of the Company Act, Articles 26-1 and 43-6 of the Securities and Exchange Act, and Articles 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers must be raised as part of the regular motions with summaries explained in the meeting agenda. It may not be raised in the form of a special motion.

The notification for the convening of the shareholders’ meeting has announced the re-election of directors and the inauguration date. After the re-election at the shareholders’ meeting, the inauguration date shall not be changed by extraordinary motion or other means in the same meeting.

Shareholders that own more than 1% of the ‘Company’s outstanding shares are entitled to propose motions for discussion in annual general meetings; each shareholder may only propose one motion. Proposals above that limit will be excluded from the discussion. Furthermore, if the issue raised by shareholders involves items in Paragraph 4, Article 1721 of the Company Act, the Board of Directors can omit the proposal. Shareholders may submit proposals that aim to urge the Company to promote the public interest or fulfill social responsibilities. The proposals should cover one discussion item at a time in accordance with Article 172-1 of the Company Act, and those with more than one item in the proposal will not be included in the motion.

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The Company shall announce, before the book closure date of the annual general meeting, the conditions, methods (written or electronic), places and time within which ‘shareholders’ proposals are accepted. The acceptance period must not be less than ten days.

Shareholder proposals shall be limited to 300 words. Proposals that exceed 300 words shall not be listed in the proposals. The proposing shareholders shall personally or entrust another to attend the regular shareholders’ meeting and participate in the proposal discussion. The Company shall notify each proposing shareholder of the outcomes of their proposed motions before the date the meeting advice is sent. Meanwhile, motions that satisfy the conditions listed in this Article shall be included as part of the meeting advice. During the shareholders’ meeting, the Board of Directors shall explain the reasons why certain proposed motions are excluded from the discussion.

  • ARTICLE 4: Shareholders may appoint proxies to attend shareholders’ meetings on their behalf by completing the ‘Company’s proxy form and specifying the scope of delegated authority.

  • Each shareholder may issue one proxy form and delegate one proxy only. All proxy forms must be received by the Company at least 5 days before the shareholders’ meeting. In cases where multiple proxy forms are issued, the one that arrives first shall prevail. However, this excludes situations where the shareholder has issued a proper declaration to withdraw the previous proxy arrangement.

Should the shareholder decide to attend a shareholders’ meeting personally or exercise voting rights in writing or using electronic means after a proxy form has been received by the Company, a written notice must be sent to the Company no later than two days before the meeting commences to withdraw the proxy arrangement. If the shareholder fails to withdraw the proxy arrangement before the due date, the vote of the proxy attendant shall prevail.

  • Should the shareholder decide to attend a shareholders’ meeting via video conference, a written notice must be sent to the Company no later than two days before the meeting commences to withdraw the proxy arrangement. If the shareholder fails to withdraw the proxy arrangement before the due date, the vote of the proxy attendant shall prevail.

  • ARTICLE 5: Shareholder meetings shall be held at locations that are suitable and convenient for shareholders to attend. Meetings must not commence anytime earlier than 9 AM or later than 3 PM. Independent ‘directors’ opinions shall be fully taken into consideration when choosing the meeting venue and time.

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  • ARTICLE 6: The meeting notice shall specify details such as the check-in time, venue, and other important notes for shareholders, proxy solicitors and proxies (referred to as shareholders) where relevant.

  • Admission of meeting participants shall begin at least 30 minutes before the meeting commences. The reception area must be clearly marked and stationed with competent personnel. Check-in to the teleconferencing platform of the shareholders’ meeting should be completed at least 30 minutes before the meeting starts, those who complete the check-in are considered to have attended the meeting in person.

Shareholders shall attend shareholders’ meetings by presenting valid conference pass, attendance card or other document of similar nature. The Company may not request shareholders to present additional documentary proof unless specified in advance. Proxy form acquirers are required to bring identity proof for verification.

An attendance log shall be prepared to record ‘shareholders’ attendance; alternatively, shareholders may present attendance cards to signify their presence.

Shareholders who attend the meeting shall be given a copy of the conference manual, annual report, attendance pass, opinion slip, motion ballot and any information relevant to the meeting. Prepare additional ballots if the director election is also being held during the meeting. Where the shareholder is a government agency or corporate entity, more than one representative may attend shareholders’ meetings on their behalf. Corporate entities that have been designated as proxy attendants can only appoint one representative to attend shareholders’ meeting. Shareholders who would like to attend the teleconferencing shareholders’ meeting should register with the Company at least two days before the shareholders’ meeting.

For a video shareholders’ meeting, the Company shall, at least 30 minutes before the start of the meeting, upload the meeting agenda, annual report, and other relevant information to the video conference platform and keep them posted until the end of the meeting.

  • ARTICLE 6-1 When convening a video shareholders’ meeting, the Company shall specify the following items in the notice of the meeting.

  • I. The ways for shareholders to participate in a video meeting and exercise their rights.

  • II. The countermeasures for the event that the video conferencing platform or video participation is impeded due to natural disasters, events, or other force majeure circumstances, include at least the following:

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  - (I) If the occurrence of the aforementioned circumstances continuously cannot be resolved, the time of the postponed or resumed meeting, and the date of the postponed or resumed meeting.

  - (II) Shareholders who have not registered to participate in the affected shareholders’ meeting online shall not attend the postponed or resumed session.

  - (III) When convening a physical ‘shareholders’ meeting with the assistance of a video conference, if the video conference is not able to be resumed, and the total number of shares present, after deducting the number of shares present by means of video participation, still reaches the quorum for the ‘shareholders’ meeting, the ‘shareholders’ meeting shall continue. The shares represented by shareholders attending the meeting through video conference 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 the meeting agenda of that shareholders’ meeting.

  - (IV) When the result of all motions has been announced, and the interim motion has not yet been proceeded with, the way it is handled.

  • III. When convening a video shareholders’ meeting, the appropriate alternative measures for shareholders with difficulties in participating in ‘shareholders’ meetings by video shall also be specified.

  • ARTICLE 7: When convening the shareholder’s meeting, the Chairman shall serve as the chair of such meeting. If the Chairman is on leave or is unable to exercise duties for any reason, the Chairman may appoint one of the directors to perform an acting duty; if no delegate is appointed by the Chairman, one shall be appointed from among directors.

  • When a managing director or a director serves as chair, as referred to in the preceding paragraph managing director or 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 applies if the chairperson is a representative of a corporate director. The ‘shareholders’ meeting convened by the Board of Directors shall be personally hosted by the chairman of the board. More than half of the directors (including at least one independent director) and at least one

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representing a member of various functional committees shall attend the meeting, and the attendance shall be recorded in the meeting minutes. For the meeting that is convened by the ones with the convening authority outside of the board, the meeting should be chaired by the convening authority. One person should be selected to chair the meeting if there are more than two presents.

The Company may summon its lawyers, certified public accountants and any relevant personnel to be present at shareholders’ meetings.

ARTICLE 8: The Company shall record non-stop, in audio or video, from the time admission is accepted and throughout the entire meeting proceeding, voting process and vote count.

These recordings must be retained for at least one year. However, if a shareholder raises a litigious claim against the Company in accordance with Article 189 of the Company Act, the abovementioned documents must be retained until the end of the litigation.

When convening a video shareholders’ meeting, 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.

However, if current attendance represents less than half of the ‘Company’s outstanding shares, the chairperson may announce to postpone the meeting up to two times, for a period totaling no more than one hour. 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 the event of a virtual shareholders’ meeting, this Corporation shall also declare the meeting adjourned at the virtual meeting platform.

If the quorum is not met after two postponements but the attending shareholders represent one-third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Paragraph 1, Article 175 of the Company Act. The tentative resolution may be sent to

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all shareholders to notify them of another shareholders’ meeting to be held within one month. Shareholders who wish to attend the shareholders’ meeting which is to be held by teleconferencing shall register with the Company in accordance with Article 6.

If the number of shares represented accumulates to more than half of all outstanding shares as the meeting progresses, the chairperson may propose the tentative resolutions for final voting according to Article 174 of the Company Act.

  • ARTICLE 9: ‘Shareholders’ presence is determined by the number of shares represented in a meeting. The number of shares present in a meeting is calculated based on attendance log records or the attendance cards collected, and the shares checked in on the video conference platform, plus the number of shares that have voting rights exercised in writing or through electronic means.

The chair shall call the meeting to order at the appointed meeting time and announce relevant information such as the number of non-voting rights shares and the number of shares present at the same time. However, if current attendance represents less than half of the ‘Company’s outstanding shares, the chairperson may announce to postpone the meeting up to two times, for a period totaling no more than one hour. 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 the event of a virtual shareholders’ meeting, this Corporation shall also declare the meeting adjourned at the virtual meeting platform.

If the quorum is not met after two postponements but the attending shareholders represent one-third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Paragraph 1, Article 175 of the Company Act. The tentative resolution may be sent to all shareholders to notify them of another shareholders’ meeting to be held within one month. Shareholders who wish to attend the shareholders’ meeting which is to be held by teleconferencing shall register with the Company in accordance with Article 6.

If the number of shares represented accumulates to more than half of all outstanding shares as the meeting progresses, the chairperson may propose the tentative resolutions for final voting according to Article 174 of the Company Act.

ARTICLE 10: For shareholders’ meetings that are convened by the Board of Directors, the Board of Directors will determine the meeting agenda. All proposed motions (including special motions and amendments to existing motions)

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must be voted on a case-by-case basis. The agenda cannot be changed unless resolved during the shareholders’ meeting.

The above rule also applies to shareholders’ meetings that are convened by any authorized party other than the Board of Directors.

In either of the two situations described above, the chairperson cannot dismiss the meeting while a motion (including special motion) is still in progress. If the chairperson violates conference rules by dismissing the meeting when not allowed to do so, other members of the board shall immediately assist attending shareholders in electing another chairperson that has the support of more than half of voting rights represented on-site to continue the meeting.

The chairperson must allow adequate time to explain and discuss various motions, amendments or special motions proposed during the meeting. The chairperson may announce to discontinue further discussions if the issue in question is considered to have been sufficiently discussed to proceed with voting and shall allocate ample time to vote.

  • ARTICLE 11: Shareholders who wish to speak during the meeting must produce an opinion slip detailing the topic, shareholder ID (or the attendance ID serial number) and ‘shareholder’s name. The order of ‘shareholders’ comments is determined by the chairperson.

Shareholders who submit an opinion slip without actually speaking are considered to have remained silent. If the ‘shareholder’s actual comments differ from those stated in the opinion slip, the actual comments expressed shall be taken into record.

Each shareholder shall speak no more than two times, for 5 minutes each, on the same motion unless otherwise agreed by the chairperson. The chairperson may stop shareholders from speaking if they violate any terms of the policy or speak outside the discussed topic.

While a shareholder is speaking, other shareholders cannot speak simultaneously or interfere in any way unless agreed to by the chairperson and the person speaking. Any violators shall be restrained by the chairperson.

Where a corporate shareholder has appointed two or more representatives to attend the shareholders’ meeting, only one representative may speak per motion.

After a shareholder has finished speaking, the chairperson may answer the ‘shareholder’s queries personally or appoint any relevant personnel to do so.

When convening a video shareholders’ meeting, shareholders attending the virtual meeting online may raise questions in writing at the virtual

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meeting platform from the chair declaring the meeting open until the chair declared the meeting adjourned. 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 12: Votes in a shareholders’ meeting are vested based on the number of shares represented.

  • Shares that do not carry voting rights are excluded from the calculation of outstanding shares when voting for the final resolution.

  • Shareholders cannot vote or appoint proxies to vote on any motions that present a conflict between their own interests and the interests of the Company.

The number of shares held by shareholders who are not permitted to vote shall be excluded from the calculation of total voting rights.

  • With the exception of trust enterprises and certain share transfer agencies approved by the authority, a proxy may not represent more than 3% of the total voting rights in aggregate when representing two or more shareholders during the meeting. Voting rights that exceed this threshold shall be excluded from the calculation.

  • ARTICLE 13: Every share represents one vote unless it is restricted or deemed nonvoting shares under Paragraph 2, Article 179 of the Company Act. The Company must give shareholders the option to exercise voting rights in writing or using the electronic method during shareholders’ meetings. Instructions for exercising voting rights in writing or through electronic means must be stated clearly in writing on the meeting advice. Shareholders who have voted in writing or using the electronic method are considered to have attended shareholders’ meetings in person. However, they are considered to have waived their rights to participate in any special motion or any amendment to the original discussion that may arise during the shareholders’ meeting. For this reason, the Company should avoid proposing special motions or amendments to the original motion where possible.

  • Instructions to exercise written and electronic votes must be delivered to the Company at least 2 days before the shareholders’ meeting. In the event of duplicate submissions, the earliest submission shall be taken into

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the record. However, this excludes situations where a proper declaration is issued to withdraw the previous arrangement.

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 or by teleconferencing, 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. If a shareholder exercises voting in writing or through electronic means and at the same time delegates a proxy to attend shareholders’ meeting, the voting decision exercised by the proxy shall prevail.

Unless otherwise regulated by the Company Act or stated in the Articles of Incorporation, a motion is passed when supported by shareholders representing more than half of total voting rights in the meeting. When voting, the chairperson or delegate thereof shall announce the total number of voting rights represented by attending shareholders for every motion discussed and have shareholders vote on a case-by-case basis. Details including the number of votes in favor, against, and abstained for each discussion shall be uploaded onto MOPS on the same day the shareholders’ meeting ends.

In cases where several amendments or alternative solutions have been proposed at the same time, the chairperson shall determine the order in which proposals are to be voted on. However, if any solution is passed, all other proposals shall be deemed rejected and no further voting is necessary.

The chairperson shall appoint ballot examiners and ballot counters to support the voting process. The ballot examiner must be a shareholder. Motion and election votes are to be counted openly at the shareholders’ meeting. Results of the vote, including the final tally, shall be announced on-site and recorded in minutes.

When the Company convenes a video shareholders’ meeting, after the chair declares the meeting open, shareholders attending the meeting through video conference 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.

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In the event of a virtual shareholders’ meeting, votes shall be counted at once after the chair announces the voting session has ended. The results of votes and elections shall be announced immediately.

When the Company convenes a physical ‘shareholders’ meeting with the assistance of a video conference, if shareholders who have registered to 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 through video conference, 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 14: Shareholder meetings that involve the election of directors shall proceed according to the ‘Company’s election policy. Results of the elections, including the list of elected directors and the final tally, must be announced on-site, as well as those who are not elected and the number of shares they have.

  • All ballots used in the above elections shall be sealed and signed by the ballot examiner and held in proper custody for at least one year. However, if a shareholder raises a litigious claim against the Company in accordance with Article 189 of the Company Act, the abovementioned documents must be retained until the end of the litigation.

  • ARTICLE 15: Shareholders’ meeting resolutions shall be compiled into detailed minutes, signed or sealed by the chairperson and disseminated to each shareholder no later than 20 days after the meeting. Preparation and distribution of meeting minutes can be made in electronic form.

  • The Company may disseminate meeting minutes by announcing details over MOPS. The resolution proceedings should correctly record the year, month, day, venue, name of the chair, voting method, the essentials of the proceedings and the voting results (including the statistical weights). If there is an election of directors, the votes received by each elected candidate shall also be disclosed. Minutes shall be retained for as long as the Company exists.

  • Where convening a video shareholders’ meeting, in addition to the particulars to be included in the meeting minutes as described in the

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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 a disruption to the video conference 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 video shareholders’ 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 participating in ‘shareholders’ meetings by video.

  • ARTICLE 16: The number of shares owned by the solicitors, the entrusted proxies and shareholders attending the shareholders’ meeting in writing or electronically is compiled into a chart with a prescribed format on the meeting day and is disclosed clearly at the meeting venue. For shareholders’ meetings that are held by teleconferencing, the Company shall upload the above information to the teleconferencing platform at least 30 minutes before the start of the meeting, and keep them disclosed until the end of the meeting.

  • During the ‘Company’s video shareholders’ meeting, when the meeting is called to order, the total 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.

  • The Company must disclose on MOPS in a timely manner any shareholders’ meeting resolutions that constitute material information as defined by law or the rules of the Taiwan Stock Exchange Corporation.

  • ARTICLE 17: Officers of the shareholders’ meeting must wear proper identification or an arm badge.

  • The chairperson may instruct proctors or security staff to help maintain order in the meeting. While maintaining order in the meeting, the proctors or security staff shall wear arm badges that identify their role as “Proctor”. The chairperson may stop anyone who attempts to speak using instruments that are not provided by the Company.

  • The chairperson may instruct security staff to remove shareholders who continue to violate conference rules despite being warned.

  • ARTICLE 18: The chairperson may put the meeting in recess at appropriate times. In the event of force majeure , the chairperson may suspend the meeting temporarily and resume at another time.

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If the shareholders’ meeting is unable to conclude all scheduled motions (including special motions) before the venue is due for return, participants may resolve to continue the meeting at an alternative location. Shareholders may also resolve to postpone or resume the meeting within the next 5 days, according to Article 182 of the Company Act.

  • ARTICLE 19: In the event of a video shareholders’ meeting, the Company shall disclose real-time results of votes and elections 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.

  • ARTICLE 20: When this Corporation 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.

  • ARTICLE 21: In the event of a video shareholders’ meeting, the Company may offer a simple connection test to shareholders prior to the meeting, and provide relevant real-time services before and during the meeting to help resolve communication technical issues.

  • In the event of a video 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 video conference platform or participation via the platform 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

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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 required for proposals for which votes have been cast and counted and results have been announced, or a list of elected Directors and Supervisors.

When the Company convenes a physical shareholders’ meeting with the assistance of a video conference, and the video conference cannot continue as described in the second paragraph, if the total number of shares present, after deducting the number of shares present by means of video participation, still reaches the quorum for the ‘shareholders’ meeting, then the shareholders’ meeting shall continue, and no postponement or resumption thereof under the second paragraph is required.

Under the circumstances where a meeting should continue as in the preceding paragraph, the shares represented by shareholders attending the meeting through video conference 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 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 video shareholders’ meeting, the Company shall provide appropriate alternative measures available to shareholders with difficulties in participating in ‘shareholders’ meetings by video.

  • ARTICLE 23: These Rules are to be announced and implemented after being approved by the ‘shareholders’ meeting, and likewise for the revision.

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[Appendix 3]

ASCENT DEVELOPMENT CO., LTD.

Asset Acquisition and Disposal Procedures

Revised and approved by the regular meeting of shareholders on June 23, 2022

  • ARTICLE 1: Purpose

  • These Procedures are formulated to protect assets and implement information disclosure.

  • ARTICLE 2:

  • Legal basis

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

ARTICLE 3:

  • Asset scope

  • I. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing an interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities.

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

  • III. Memberships.

  • IV. Patents, copyrights, trademarks, franchise rights, etc.

  • V. Right-of-use asset.

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

  • VII. Derivatives.

  • VIII.Assets acquired or disposed of due to mergers, spin-offs, acquisitions or shares transfer, by law.

  • IX. Other important matters.

ARTICLE 4:

Definitions

  • I. 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 variables; 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

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  • contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts.

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

  • III. Related parties, and subsidiaries: Shall be defined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

  • IV. Professional appraiser: Real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.

  • V. Date of occurrence: Refers to whichever earlier the contract date, payment date, consignment transaction date, transfer date, Board resolution date or other dates that can confirm the counterparty and transaction amount. provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.

  • VI. Investments in mainland China: Refers to the investments conducted pursuant to the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area of the Ministry of Economic Affairs, Investment Commission.

  • VII. Investment professional: 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.

  • VIII.Securities exchange: The Taiwan Stock Exchange Corporation domestically, and any organized securities exchange market that is

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regulated by the competent securities authorities of the jurisdiction where it is located overseas.

  • IX. Over-the-counter venue (OTC venue): The venue for OTC trading provided by a securities firm in accordance with the Regulations Governing Securities Trading on the Taipei Exchange domestically; 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.

  • X. The phrase “within the preceding year” refers to the year preceding the date of occurrence of the current asset acquisition or disposal transaction. Items duly announced in accordance with these Regulations need not be counted toward the transaction amount.

  • XI. The term “the most recent financial statements” refers to the financial statements of the Company legally certified or reviewed by a certified public accountant prior to the acquisitions or disposals of the assets.

  • ARTICLE 5: Limit of amount for investing in non-for-business real estate and its right-of-use assets and securities

The amount of the above-mentioned assets individually acquired by the Company and each subsidiary is determined as follows:

  • I. The total amount of real estate and right-of-use assets not for business use shall not exceed 100% of the net worth.

  • II. The total amount of investment in long-term and short-term securities shall not exceed 120% of the net worth.

  • III. The amount of investment in individual securities shall not exceed 100% of the net worth.

  • ARTICLE 6: Any professional appraiser and its appraisal personnel, certified public accountants, attorneys, or securities underwriters from whom the Company has acquired appraisal reports and opinions, shall satisfy the following requirements :

  • I. May not have previously received a final and unappealable sentence of 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. Provided that this provision does not apply if 3 years have already passed since the completion of service of the sentence, since the

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expiration of the period of a suspended sentence, or since a pardon was received.

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

  • III. If the Company has to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal personnel 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 self-discipline rules of the trade associations they are affiliated with and the following matters:

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

  • II. When working on 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.

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

  • IV. 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 appropriate and reasonable and that they have complied with applicable laws and regulations.

ARTICLE 7:

  • Procedures for acquisition or disposal of real estate or equipment

  • I. Appraisal and operating procedures When acquiring or disposing of real properties, equipment or the right-of-use assets thereof, the Company shall comply with the real property, plan and equipment cycle of its internal control system.

  • II. Determination procedures for transaction terms and amount limitation delegation

  • (I) When acquiring or disposing of real estate or its right-to-use assets, the terms of the transaction and the transaction price shall be determined by reference to the publicly announced present value, assessed present value and actual sold price for the real estate in the neighborhood, etc., and an analysis

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shall be prepared and submitted to the Chairman. If the amount is less than NT$300 million, it shall be submitted to the Chairman for approval and submitted to the next Board of ‘Directors’ meeting for ratification; if the amount exceeds NT$300 million, it shall be submitted to and approved by the Board of Directors before being conducted.

  • (II) When acquiring or disposing of equipment, either price comparison, bargain process or tender process shall be performed. If the amount is NT$5 million or less, it shall be approved by the President; if the amount is between NT$5 million and 150 million, it shall be submitted to the Chairman for approval; if the amount exceeds NT$150 million, it shall be submitted to the Chairman for approval and then passed by the Board of Directors before it is conducted.

  • III. Execution unit

  • When the Company acquires or disposes of the real properties, equipment or the right-of-use assets thereof, the using department and administration department shall be responsible for implementation after being approved by the delegated authority prescribed in the preceding paragraph.

  • IV. Real Estate or Equipment Appraisal Report

  • In the event of the Company’s acquisition or disposal of real property, equipment and/or right-of-use assets where the transaction amount reaches 20% of the Company’s paid-in capital or NT$300 million or more, except for the transactions with domestic governments, engaging others to build on their own lands, engaging others to build on rented land, or acquiring or disposing of equipment or right-of-use assets for business use, the Company shall, prior to the date of occurrence, obtain an appraisal report from a professional appraiser and shall comply with the following regulations:

  • (I) If, for any reason, the Company is in need of using restrictive, specific or special pricing to serve as a reference for the transaction price, the underlying transaction must be approved by the board resolution before proceeding. Any subsequent changes in transaction terms shall also be subject to the same procedures.

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

  • (III) 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 render a specific opinion regarding the reason for the discrepancy and the adequacy 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.

  • (IV) No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, that 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.

  • (V) For the acquisition or disposal of assets by the Company through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.

ARTICLE 8:

Procedures for acquisition or disposal of securities investments

  • I. Appraisal and operating procedures The Company’s acquisition or disposal of long- or short-term securities thereof shall be conducted in accordance with its Procedures for Investment Cycle under the internal control system.

  • II. Determination procedures for transaction terms and amount limitation delegation

  • (I) Securities trading in the security market or the business premises of securities firms shall be determined by the responsible unit based on market research, and the amount of which is NT$100 million or less shall be approved by the Chairman of the Board of Directors; if the amount exceeds

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NT$100 million, it shall be additionally approved by the Board of Directors.

  • (II) When acquiring or disposing of the securities through markets other than the centralized securities exchange market or over-the-counter market, before the Date of the Event of the acquisition or disposal of securities, the latest financial statements of the target company audited or reviewed by a certified public accountant shall be obtained for the assessment and reference of the transaction price, with the consideration of the EPS, profitability and future development potential of the target company. If the amount is NT$100 million or less, it shall be approved by the Chairman; if the amount exceeds NT$100 million, it shall be approved by the Board of Directors before it is conducted.

  • III. Execution unit

    • When the Company invests in long- and short-term securities, it shall be approved by the delegation of authorities in the preceding paragraph and then conducted by the Investment department.

  • IV. Obtain expert opinion

  • (I) Where the transaction amount of the Company’s securities acquisition or disposal reaches 20% or more of paid-in capital or NT$300 million or more, the Company shall engage a CPA prior to the date of occurrence of the event to render an opinion on 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 (FSC).

    1. Acquisition of securities by means of cash contribution for establishment or establishment in accordance with the law, and the rights recognized by the acquisition of securities shall be in proportion to the capital contribution.

    2. Engage in the subscription of securities issued by the target company at face value through cash capital increase in accordance with relevant laws and regulations.

    3. Engage in the subscription of directly or indirectly 100%-invested companies to handle cash capital

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increase and issue securities, or 100%-owned subsidiaries engage in the mutual subscription of cash capital increase and issuance of securities.

  1. Listed, public, and emerging securities traded at stock exchanges or securities firms.

  2. Domestic government bonds, and bonds are subject to repurchase and sell-back.

  3. Publicly Offered Fund.

  4. Obtain or dispose of stocks of listed/public companies in accordance with the Taiwan Stock Exchange or Taipei Exchange Rules Governing Reverse Auction of TPEx Listed Securities.

  5. Engage in the stock subscription of a domestic public company for a capital increase in cash or subscription of domestic corporate bonds (including financial bonds), and the securities obtained shall not be privately placed securities.

  6. Based on Paragraph 1 of Article 11 of the Securities Investment Trust and Consulting Act, for the purchase of domestic private equity funds before the establishment of the fund, or the domestic private equity funds purchased and bought back, the investment strategy has been stated in the trust contract, except for securities credit transactions and holdings of unsecured funds. Except for offsetting securities-related commodity positions, the investment scope shall be the same as that of public funds.

  7. (II) For the acquisition or disposal of assets by the Company through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.

ARTICLE 9: Procedures for related parties’ transaction

  • I. Acquisition and disposal of assets with related parties are subject to Articles 7 to 10, resolution procedures and rationality assessments of the Procedures if they amount to 10% or more of the ‘Company’s total assets. In addition, an appraisal report from a professional appraiser or an opinion from a CPA shall be obtained in accordance with the Procedures to support the transaction. The calculation of the aforementioned transaction amount shall be in compliance with the provision of Article 10-1. Besides, when determining whether a counterparty is a related party, in addition

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to the legal form of the counterparty, the substance of the relationship should also be considered.

  • II. 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 in 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, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directors and recognized by the supervisors:

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

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

  • (III) The evaluation information for the reasonableness of proposed transaction terms in accordance with the provisions of Subparagraph 3, Item (1) and (4) of this Article when acquiring real estate or the right-of-use assets thereof from a related party.

  • (IV) 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.

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

  • (VI) An appraisal report from a professional appraiser or a ‘CPA’s opinion obtained in compliance with the preceding paragraph.

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

Where following transactions are conducted between the Company, the parent company and its subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100% of the issued shares

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or authorized capital; the Board of Directors may delegate Chairman to make decisions within a certain amount and subsequently submit them to the most recent Board meeting for ratification:

  • I. Acquisition or disposal of operating equipment or usage rights thereof.

  • II. Acquisition or disposal of operating real estate or usage rights thereof.

When a transaction is submitted to the Board Meeting for discussion 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 being submitted to the Audit Committee for discussion in accordance with the provisions of Paragraph 2, it should be approved by consent of more than half of all members of the Audit Committee and submitted to the Board of Directors for resolution. If the consent of more than half of all members of the Audit Committee is obtained, the resolution of the Audit Committee shall be recorded in the meeting minutes of the Board of Directors. 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 its non-domestic public subsidiaries is having a transaction specified in Paragraph 2, and the transaction amount reaches 10% or more of the ‘Company’s total assets, the Company shall submit the information listed in Paragraph 2 to the ‘shareholders’ meeting for approval prior to entering into a transaction contract and making the payment. Exception can be made, however, if the transactions are between the Company and its parent and subsidiaries or between the subsidiaries.

The calculation of the transaction amount in Paragraph 2 and the preceding paragraph shall be conducted by Article 14, Paragraph 1, Subparagraph 8; and the aforementioned within one year shall be counted one year backward from the date of occurrence of this transaction. Transactions that have been submitted to the ‘shareholders’ meeting and the Audit Committee meeting and approved by the Board of Directors in accordance with these Regulations are exempt from being counted in again.

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  • III. Evaluation of the reasonableness of transaction costs:

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

  • 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.

  • 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 percent 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 shall not apply where the financial institution is a related party of one of the transaction counterparties.

  • (II) 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.

  • (III) 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-use assets thereof in accordance with Items (1) and (2) of Subparagraph 3 of this Article, it shall also engage a CPA to check the appraisal and render a specific opinion.

  • (IV) When the results of an appraisal conducted in accordance with Items (1) and (2) of Subparagraph 3 of this Article are uniformly lower than the transaction price, the following shall be done based on Item (5) of Subparagraph 3. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness

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have been obtained from a professional real property appraiser and a CPA has been obtained, this restriction shall not apply:

  1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:

  2. (1) Where undeveloped land is appraised in accordance with the means in this 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.

  3. (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.

  4. Where the Company acquiring real property, or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of completed transactions involving neighboring parcels of land of a similar size other than related party’s transactions within the preceding year. Completed transactions involving neighboring or closely valued parcels of land in the preceding paragraph in principle refer 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; transactions involving similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels

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with a land area of no less than 50% of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property or obtainment of the right-of-use assets thereof.

  • (V) When the results of an appraisal conducted in accordance with Items (1) and (2) of Subparagraph 3 of this Article are uniformly lower than the transaction price, the following shall be done. and the Company and any public company that uses the equity method to account for its investment in the Company and has set aside a special reserve under the aforementioned regulations, may not utilize the special reserve until it has recognized a loss on a decline in the 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.

  • A special reserve shall be set aside in accordance with Article 41, Paragraph 1 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in the Company, then the special reserve called for under Article 41, Paragraph 1 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public ‘company’s equity stake in the Company.

  • The Independent Directors of the Audit Committee shall perform their duties in accordance with Article 218 of the Company Act.

  • Actions taken pursuant to Items 1 and 2 of this Item shall be reported to a shareholders’ meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

  • (VI) Where the Company acquires real property or right-of-use assets thereof from a related party and one of the following

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circumstances exists, the acquisition shall be conducted in accordance with Subparagraphs 1 and 2 of this Article, and Subparagraph 3, Item (1), (2) and (3) regarding the evaluation of the reasonableness of transaction costs do not apply: 

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

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

     3. The real property is acquired through the 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.

     4. The Company acquires the real property right-of-use assets with its parent or subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100% of the issued shares or authorized capital for business use.

  - (VII) When acquiring real properties thereof from related parties, the Company shall also comply with Item (5) of Subparagraph 3 of this Article if there is other evidence indicating that the acquisition was not an arms-length transaction.

  • ARTICLE 10: Handling procedures for the acquisition or disposal of intangible assets or the right-of-use assets thereof, or memberships

  • I. Appraisal and operating procedures When acquiring or disposing of intangible assets, the right-of-use assets thereof or memberships, the Company shall comply with the real property, plan and equipment cycle of its internal control system.

  • II. Determination procedures for transaction terms and amount limitation delegation

    • (I) When obtaining or disposing of a membership certificate, the fair market value of the shall be considered when deciding the trading conditions and price, and an analysis report shall be prepared and submitted to the Chairman of the Board of Directors. If the amount is NT$30 million or less, it should be submitted to the Chairman for approval; if it exceeds NT$30 million, it shall be approved by the Board of Directors.

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  - (II) When obtaining or disposing of an intangible asset or right-ofuse asset, the appraisal by the experts or the fair market value of the shall be considered when deciding the trading conditions and price, and an analysis report shall be prepared and submitted to the Chairman of the Board of Directors. If the amount is NT$30 million or less, it should be submitted to the Chairman for approval; if it exceeds NT$30 million, it shall be approved by the Board of Directors.

  • III. Execution unit 

     - When the Company acquires or disposes of intangible assets or the right-of-use assets thereof or memberships, the administration department and the finance or administration department shall be responsible for implementation after being approved by the delegated authority prescribed in the preceding paragraph.

  • IV. Expert opinion report of the acquisition or disposal of intangible assets or the right-of-use assets thereof 

     - Where the Company acquires or disposes of intangible assets or right-of-use assets 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.

  • Article 10-1 The calculation of transaction amount in Articles 7 to 10 shall be conducted by Article 14, Subparagraph 1, Item (8); and the aforementioned “within one year” shall be counted one year backward from the date of occurrence of this transaction. Transactions that have obtained appraisal reports from professional appraisers or CPA opinions in accordance with these Regulations are exempt from being counted in again.

  • ARTICLE 11: Procedures for the acquisition or disposal of claims of financial institutions

  • The Company, in principle, does not engage in the acquisition or disposal of claims of financial institutions. If it intends to engage in the transactions, it shall propose to the Board of Directors for approval and formulate the evaluation and operation procedures.

  • ARTICLE 12: Procedures for the acquisition or disposal of derivatives

  • I. Transaction Principles and Guidelines

    • (I) Types of transactions

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  1. Derivatives of the Company: 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 variables; 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, long-term leasing contracts, or long-term purchase (sales) contracts.

  2. Any and all matters related to bond margin transactions shall be handled in accordance with the relevant provisions of these Regulations. The provisions of these Regulations may not apply to bond transactions subject to repurchase.

  3. (II) Business (hedging) strategy

    • When engaging in transactions of derivatives, the commodities traded should be those that can avoid risks generated from business operations by the Company. For foreign exchange hedging strategies, the currency held should match the actual foreign currency demand of the ‘Company’s import and export transactions; in principle, the Company should set off its internal positions (setting off foreign exchange income and expenses) to lower its overall foreign exchange risk and reduce foreign exchange trading cost. Transactions for other specific purposes must be carefully evaluated and reported to the Board of Directors for approval.

(III) Responsibilities

  1. Investment Department

  2. (1) Transaction staff

    • A. Responsible for the strategy formulation of the Company’s overall financial product transactions.

    • B. Transaction staff shall regularly calculate positions every two weeks, collect market information, conduct trend judgments and risk assessments, and formulate operating strategies, which will be used as the basis for trading after approval by the authority.

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  - C. Execute transactions in accordance with the authorized authority and established strategies.

  - D. When there is a major change in the financial market and the trader deems that the established strategy is no longer applicable, they can submit an evaluation report at any time, re-draft the strategy, and use it as a basis for trading after approval by the President.

  1. Finance and Accounting Department

  2. (1) Accounting staff

    • A. Execute transaction confirmation.

    • B. Review whether the transaction is carried out according to the authorized authority and the established strategy.

    • C. Perform evaluation every month, and the evaluation report shall be submitted to the President for approval.

    • D. Accounting processing.

    • E. Report and announce in accordance with the regulations of the Financial Supervisory Commission.

(2) Financial staff: Perform settlement.

  1. Derivatives Verification Authority

  2. (1) Approval limit for hedging trade

Approver Daily Trading Limit Net Accumulated
TradingLimit
Head of
Investment
Department		 Less than US$500
thousand		 US$1.5 million or less
President US$500 thousand -
US$2 million		 US$5 million or less
Chairman More than US$2
million		 US$10 million or less

(2) Other transactions for specific purposes shall be reported to the Board of Directors for approval before proceeding.

  1. Auditing Department

Responsible for understanding the adequacy of the internal control of derivatives transactions and checking the compliance of relevant departments with operating

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procedures, analyzing the transaction cycle, making audit reports, and reporting to the Board of Directors when there are major deficiencies.

  1. Performance Assessment

  2. (1) Hedging Trade

    • A. The performance assessment is based on the exchange rate cost on the Company’s account book and the profit and loss arising from derivative financial transactions.

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

    • C. The investment department should provide foreign exchange position evaluation, foreign exchange market trends and market analysis to the general manager as management reference and instructions.

  3. (2) Transactions of special purposes

The actual profit and loss are adopted as the basis for performance evaluation, and CPAs shall regularly prepare reports for the management level.

  1. Determination of the total amount of the contract and the upper limit of losses

  2. (1) Total Contract Price

    • A. Limit of Amount of Hedging Trade

      • The investment department shall grasp the Company’s overall position to avoid transaction risks. The amount of risk-avoiding transactions should not exceed two-thirds of the Company’s overall net positions. If it exceeds two-thirds, it shall be reported to the President for approval.

    • B. Transactions of special purposes

      • Based on the forecast of market changes, the investment department may formulate strategies as needed, and submit them to the Board of Directors for approval before proceeding.

  3. (2) Determination of the upper limit of losses

    • A. The hedging transaction is for hedging, so there is no need to set a loss limit.

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     - B. In the case of a transaction contract for a specific purpose, after the position is established, a stop loss point shall be set to prevent excessive losses. The setting of the stop loss point shall not exceed 10% of the transaction contract amount as the upper limit. If the loss exceeds 10% of the transaction amount, it shall be reported to the general manager immediately and reported to the Board of Directors to discuss necessary countermeasures.

     - C. The amount of individual contract losses 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 transactional operations for specific purposes shall be US$300,000.

  • II. Risk management measures

  • (I) Credit risk management:

    • Since the market is subject to various factors, it is easy to cause operational risks of derivative financial products, so the market risk management shall be carried out according to the following principles:

    • Counterparty of transaction: Mainly the renowned domestic and foreign financial institutes.

    • Commodities of transaction: Mainly the commodities provided by renowned domestic and foreign financial institutes.

    • Transaction amount: The unreversed transaction amount of the same transaction partner shall not exceed 10% of the total authorized amount, except for those approved by the general manager.

  • (II) Market price risk management:

    • Mainly the open foreign exchange market provided by banks, and the futures market are not considered for the time being.

  • (III) Liquidity risk management:

    • To ensure market liquidity, when choosing a derivative to trade, the main focus shall be on instruments with higher liquidity (i.e. ready to be set off in the market) provided by the financial institution. The counterpart financial institution must have sufficient information and the ability to trade in any market at any time.

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  • (IV) Cashflow risk management:

    • To ensure the stability of the ‘Company’s working capital cycle, the funding of derivative transactions shall be limited to the ‘Company’s own funds, and the trading amounts shall take into account the funding requirements of cashflow projections for the next three months.

  • (V) Operational risk management:

    1. The relevant personnel shall fully comply with the authorized limit and operating procedures, and shall be incorporated into the internal audit to prevent operational risk.

    2. Personnel engaged in trading, confirmation, and delivery of derivatives shall not be involved in any of the other two procedures concurrently.

    3. The risk measurement, monitoring, and controlling personnel shall be in a different department and shall report to the Board of Directors or senior management who do not have responsibility for trading or position decisions.

    4. The position of derivatives held shall be assessed at least once a week, provided that those necessary for business purposes should be assessed at least twice a month. The assessment report shall be submitted to the senior management authorized by the Board of Directors.

  • (VI) Instrument risk management

    • Internal traders shall possess complete and correct expertise on the financial instruments to be traded. The banks shall fully disclose relevant risks to avoid the risk of misusing financial instruments.

  • (VII) Legal risk management:

    • Documents to be entered into with financial institutions shall be reviewed by specialists in foreign exchange and legal affairs before they are formally signed to avoid legal risks.

  • III. Internal audit system

  • (I) The internal auditors shall periodically understand the suitability of internal controls on derivatives, conduct a monthly audit of how faithfully the trading department adheres to the procedures for engaging in derivatives trading, analyze the trading cycle, and prepare an audit report. If any material violation is discovered, they shall notify the Audit Committee in writing.

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  • (II) The internal auditors shall submit the audit report together with the annual inspection status of the internal audit work to the Financial Supervisory Commission before the end of February of the following year, and report the improvement of abnormal matters to the Financial Supervisory Commission for future reference no later than the end of May of the following year.

  • IV. Methods for regular assessment

  • (I) The Board of Directors shall authorize senior executives to regularly monitor and evaluate whether the derivatives transactions are conducted in accordance with the trading procedures established by the Company, and whether the risks assumed are within the tolerable range (if the loss limit has already been exceeded), it shall immediately report to the Board of Directors and take corresponding measures.

  • (II) The position of derivatives held shall be assessed at least once a week, provided that those necessary for business purposes should be assessed at least twice a month. The assessment report shall be submitted to the senior management authorized by the Board of Directors.

  • V. Principles of supervision and management of the Board of Directors when engaging in derivatives transactions

  • (I) The Board of Directors shall designate senior management personnel to pay continuous attention to monitoring and controlling derivatives trading risk and the management principles are as follows:

    1. Periodically evaluate the risk management measures currently employed are appropriate and are faithfully conducted in accordance with these Regulations 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; where a company has independent directors, an independent director shall be present at the meeting and express an opinion.

  • (II) Periodically evaluate whether derivatives trading performance is consistent with established operational strategy and whether

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the risk undertaken is within the ‘company’s permitted scope of tolerance. 

  - (III) The Company shall report to the soonest Board meeting after it authorizes the relevant personnel to handle derivates trading in accordance with its procedures for engaging in derivatives trading.

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

  • ARTICLE 13: Handling procedures of mergers and consolidations, splits, acquisitions, and assignment of Shares

  • I. Appraisal and operating procedures

    • (I) When conducting mergers, spin-offs, acquisitions, or shares transfer, the Company shall engage an attorney, CPA or securities underwriter to discuss the estimated schedule of the statutory procedures and establish an ad hoc task force to implement it in accordance with the statutory procedures. It shall also, prior to convening the Board Meeting to resolve the matter, engage a CPA, 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 Meeting for deliberation and resolution. Provided that the Company merges subsidiaries in which the Company directly or indirectly owns 100% of the outstanding shares or the total capital, and a merger between subsidiaries in which the Company directly or indirectly owns 100% of the outstanding shares or the total capital are exempt from the requirement to obtain a reasoned opinion from the foregoing expert.

    • (II) 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 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. Provided, that a provision of another act

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exempts it from convening a shareholders’ meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. 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 restrictions, 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.

  • II. Other notes

  • (I) Date of the Board meeting: the Company shall convene a Board of Directors meeting and shareholders’ meeting on the same day to resolve matters relevant to the merger, demerger, or acquisition, unless another law provides otherwise, or the FSC has been notified in advance of extraordinary circumstances and has granted consent.

  • (II) A company participating in a transfer of shares shall call a Board of Directors meeting on the day of the transaction, unless other another law provides otherwise, or the FSC has been notified in advance of extraordinary circumstances and has granted consent.

  • (III) When participating in a merger, split-off, acquisition or reception of shares, a listed company or a company that has 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 the 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.

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  1. 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 of Directors meetings.

  2. (IV) When participating in a merger, demerger, acquisition, or transfer of shares of another listed/public company, the Company 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 Items 1 and 2 of the preceding Item to the FSC for recordation.

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

  4. (VI) Prior undertaking of 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 the merger, demerger, acquisition, or transfer of shares.

  5. (VII) When the Company conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the Board of Directors to resolve the matter, shall engage a CPA, 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. In principle, the share exchange ratio or acquisition price may not be arbitrarily altered, except for the circumstances for altering stipulated in the contract which have been publicly disclosed. Circumstances that allow altering the share exchange ratio or acquisition price are as below:

  6. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of

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corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity-based securities.

  1. An action, such as the disposal of major assets, affects the ‘company’s financial operations.

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

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

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

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

  6. (VIII) The contract for participation in a merger, demerger, acquisition, or transfer of shares shall, in addition, to comply with Article 317-1 of the Company Act and Article 22 of the Business Mergers And Acquisitions Act, also record the following:

  7. Handling of breach of contract.

  8. 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.

  9. 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.

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

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

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

  13. (IX) Changes in the number of companies participating in the merger, demerger, acquisition, or share transfer: 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

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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, the such participating company may be exempted from calling another shareholders’ meeting to resolve on the matter anew.

  • (X) Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the nonpublic company and conduct in accordance with the provisions of Subparagraph 2, Item (1) Date of Board meeting, Item (6) Prior undertaking of confidentiality, and Item (9) Changes in the number of companies participate in the merger, demerger, acquisition, or share transfer of this Article.

ARTICLE 14: Procedures for disclosing information publicly

  • I. Items to be publicly announced and reported and the standard thereof

  • (I) Acquisition or disposal of real property or right-of-use assets thereof 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; provided, 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.

  • (II) Mergers and consolidations, splits, acquisitions, and assignment of Shares.

  • (III) Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company.

  • (IV) Acquisition or disposal of operating equipment or right-of-use assets thereof with an unrelated party, and the transaction amount exceeds NT$500 million.

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  • (V) As a construction business, the acquisition or disposal by the Company in the real property or right-of-use assets thereof for construction use, and the transaction counterparty is not a related party, whereas the transaction amount reaches NT$500 million or above.

  • (VI) 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.

  • (VII) Transaction of assets other than the ones listed in the six items above, disposal of debt entitlement by a financial institution, or investment into China that amounts to 20% of the ‘Company’s paid-up capital or NT$300 million or more. Provided, this shall not apply to the following circumstances:

  • Trading of domestic government bonds, or foreign government bonds with credit ratings no lower than our sovereign rating.

  • Where the Company specializes in the investment profession, any securities traded through exchange or through securities firms, or foreign government bonds, ordinary corporate bonds and ordinary bank debentures without equity attribute subscribed in the primary market (excluding subordinated bonds), or subscription/redemption of securities investment or futures trust funds, or subscription/redemption exchange-traded notes, or securities subscribed by a securities firm as part of its underwriting service or counseling service for Emerging Stock Market companies, as regulated by the Taipei Exchange.

  • Trading of bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

(VIII) The calculation of the transaction amount in Items (1) to (7) is as below, and “within one year” shall be counted one year backward from the date of occurrence of said transaction.

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Transactions that have been publicly announced in accordance with the regulations are exempt from being counted in again: 

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

II. Announcement and reporting schedule When acquiring or disposing of assets with the items in Item 1 of this Article that should be announced and the transaction amount reaches the standard that should be announced and reported, the Company shall announce and report it within 2 days counting inclusively from the date of occurrence of the event.

  • III. Announcement and reporting procedures

  • (I) The Company shall announce and report relevant information on the website designated by the FSC.

  • (II) The Company shall provide monthly reports on all derivative transactions undertaken by the Company and domestic subsidiaries up until the end of the previous month, and submit such reports to the website designated by the FSC before the 10th calendar day of each month using the prescribed format.

  • (III) When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission.

  • (IV) When acquiring or disposing of assets, the Company shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the Company, where they shall be retained for 5 years except where another act provides otherwise.

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  • (V) Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with this Article, a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event:

  • 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: The Company’s subsidiaries shall follow the rules below:

  • I. If the Company’s subsidiary is a public company, the “Procedures for Assets Acquisition or Disposal” stipulated in Article 36-1 of the Securities and Exchange Act and the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” shall be adopted and hence there would be no need to submit the report to the Board of Directors of the Company, and the same applies for amendments.

  • II. If the subsidiary of the Company is not a public company, it shall choose one of the following methods:

  • (I) The Company’s Board of Directors and relevant units will review and implement the procedures in accordance with the procedures, and the subsidiaries will cooperate with related matters.

  • (II) The “Asset Acquisition and Disposal Procedures” are formulated in accordance with the relevant regulations of the Company, which shall be submitted to the Board of Directors of the Company for approval, and the same shall apply to amendments.

  • III. When a subsidiary acquires or disposes of assets, it shall provide relevant information to the Company for reference.

  • IV. Where a subsidiary is not a public company, and its acquisition or disposal of assets reaches the public announcement and file standards set forth in Chapter XIII of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies”, the

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parent company shall perform the public announcement and file on behalf of the subsidiary.

  • V. For the “reaches 20% of paid-in capital” or “10% of total assets” stated in the standards of public announcement and file for subsidiary, the paid-in capital or total assets of the (parent) Company shall be applicable.

  • Article 15-1 For the calculation of 10% of total assets under these 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 these Procedures, 10% of total equity attributable to owners of the parent shall be substituted.

ARTICLE 16: Penalties

Any employee of the Company who engages in acquisition or disposal of assets and violates the provisions of these Procedures shall be subject to discipline in accordance with the Human Resources Management Rules and the Working Rules of the Company to be regularly evaluated and impose penalties according to the severity of the situation.

  • ARTICLE 17: Implementation and amendment

The “Asset acquisition and disposal procedures” of the Company have been approved by the Audit Committee, resolved by the Board Meeting and approved by the General Shareholders Meeting. The same shall apply to any amendment. If any director expresses dissent and there is a record or written statement, the information on the ‘Director’s dissent shall be sent to the Audit Committee and submitted to the shareholders’ meeting for discussion. Where the position of independent director has been created by the Company, when a transaction is required to be submitted for discussion by the Board of Directors pursuant to the Asset acquisition and disposal procedures, 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.

ARTICLE 18: Supplementary Provisions

Any other matters not set forth in these Procedures shall be governed by applicable laws, rules, and regulations.

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[Appendix 4] “Operational Procedures for Making Endorsements/Guarantees”

ASCENT DEVELOPMENT CO., LTD.

Operational Procedures for Making Endorsements/Guarantees

Revised and approved by the regular meeting of shareholders on August 12, 2021

1. Objective

  • 1.1 The Operational Procedures Are Established Pursuant To Article 36-1 Of The Securities And Exchange Act And The “Regulations Governing Loaning Of Funds And Making Endorsements/Guarantees By Public Companies” (The “Regulations”)

2. Applicable scope:

  • 2.1 Where the Company makes endorsements or guarantees for others, the operational procedures shall be complied with. However, if financial-related laws and regulations specify otherwise, such laws and regulations shall be complied with.

  • 2.2 Where any subsidiary of the Company intends to make an endorsement or provide guarantees for others, the operational procedures for making endorsements/guarantees of the subsidiary shall be established pursuant to the regulations and the Company’s operational procedures, and submitted to the Company’s Board of Directors; the same applies to the amendments.

    • Provided that where the Regulations or the Operational Procedures conflict with the local regulations where the subsidiary operates, the local regulations shall prevail.

  • Definition:

  • 3.1 The subsidiaries and parent companies mentioned in the operational procedures shall be defined in accordance with the regulations governing the preparation of financial reports by securities issuers.

  • 3.2 The company’s financial reports are prepared pursuant to the international financial report standards; “net worth” in these operational procedures means the balance sheet equity attributable to the owners of the parent company under the regulations

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governing the preparation of financial reports by securities issuers.

  • 3.3 The Term “Announce And Report” As Used In These Operational Procedures Means The Process Of Entering Data To The Information Reporting Website Designated By The Financial Supervisory Commission

  • 3.4 “Date of Occurrence” In These Operational Procedures Means The Date Of Contract Signing, Date Of Payment, Dates Of Boards Of Directors Resolutions, Or Other Dates That Can Confirm The Counterparty And Monetary Amount Of The Loan Of Funds Or Endorsement/Guarantee, Whichever Date Is Earlier.

  • Accountable unit:

  • 4.1 Finance and accounting department: the unit proposing the establishment of amendments to the operational procedures, and supervising the implementation thereof.

  • Operational process and description:

  • 5.1 The term “endorsements/guarantees” as used in these operational procedures refers to the following:

    • 5.1.1 Financing endorsements/guarantees, including:

      • 5.1.1.1 Bill discount financing.

      • 5.1.1.2 Endorsements or guarantees made to meet the financing needs of another company.

      • 5.1.1.3 Issuance of a separate negotiable instrument to a non-financial enterprise as security to meet the financing needs of the Company itself.

    • 5.1.2 Customs duty endorsements/guarantees, meaning an endorsement or guarantee for the Company itself or another company with respect to customs duty matters.

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

    • 5.1.4 Any creation by a public company of a pledge or mortgage on its chattel or

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real property as security for the loans of another company shall also comply with these operational procedures.

  • 5.2 Companies may be provided with endorsements/guarantees:

  • 5.2.1 The company may make endorsements/guarantees for the following companies:

    • 5.2.1.1 A company with which it does business.

    • 5.2.1.2 A company in which the public company, directly and indirectly, holds more than 50% of the voting shares.

    • 5.2.1.3 A company that directly and indirectly holds more than 50% of the voting shares in the public company.

  • 5.2.2 Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares may make endorsements/guarantees for each other, and the amount of endorsements/guarantees may not exceed 10% of the net worth of the Company. This restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares.

  • 5.2.3 Where the Company fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project, or where all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding%ages, or where companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the consumer protection act for each other, such endorsements/guarantees may be made free of the restriction of the preceding paragraphs.

  • 5.2.4 Capital contribution referred to in the preceding paragraph shall mean capital contribution directly by the Company, or through a company in which the

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Company holds 100% of the voting shares.

5.3 Handling procedures

  • 5.3.1 The company’s operational procedures for making endorsements/guarantees are as below:

  • 5.3.1.1 Companies may be provided with endorsements/guarantees:

    • Limited to those who are specified in 5.2 of the operational procedures.

  • 5.3.1.2 evaluation standards for endorsements/guarantees made due to needs arising from business dealings:

the amount of the endorsements/guarantees made by the Company does not exceed the total amount of the transactions made with the Company in the most recent year; the term “total amount of the transactions” refers to the higher between the purchase or sales amount; however, the subsidiary directly or indirectly 100% owned by the Company is not subject to the restriction.

  • 5.3.1.3 Limits for aggregated endorsements/guarantees and to individual entities:

  • (1) Financing endorsements/guarantees, customs duty

endorsements/guarantees, and other endorsements/guarantees:

The total amount of the endorsements/guarantees made by the Company must not exceed 50% of the net worth of the Company; the sum of the endorsements/guarantees made by the Company and the subsidiaries must not exceed 50% of the net worth of the Company. The amount of the endorsement/guarantee made by the Company to any single entity must not exceed 50% of the net worth of the Company; the sum of the endorsements/guarantees made by the Company and the subsidiaries to any single entity must not exceed 50% of the net worth of the Company.

~103~

  • (2) Guarantee for construction contracts:

Regarding the guarantee made pursuant to 5.2.3, the total amount of the endorsements/guarantees made by the Company must not exceed 500% of the net worth of the Company; the sum of the endorsements/guarantees made by the Company and the subsidiaries to any single entity must not exceed 500% of the net worth of the Company. The amount of the endorsements/guarantees made by the Company to any single entity must not exceed 300% of the net worth of the Company; the sum of the

endorsements/guarantees made by the Company and the subsidiaries to any single entity must not exceed 300% of the net worth of the Company.

  • 5.3.1.4 Processing procedures for endorsements and guarantees

  • (1) The applicant completes the “Application Form for Endorsement/Guarantee.”

  • (2) The finance unit of the Company shall evaluate such in detail pursuant to the detailed review procedures, and report the aggregated results. The guaranteed companies may be required to provide the pledge or mortgage on its chattel or real property as security.

  • (3) Where the Company makes endorsements/guarantees to others, if deemed necessary, the guarantee promissory note with the same amount may be presented and retained by the Company for the purpose of relative guarantee.

  • (4) Where the endorsement on a guarantee promissory note is to be cancelled due to full repayment of debt, extension or renewal, the guaranteed companies shall send the correspondence to have the original guarantee promissory note to be stamped as “cancelled” by the clerk in charge and return the note; the incoming correspondence

~104~

is retained for reference.

  • (5) The finance and accounting department shall record the cancelled guarantee promissory note to the “memorandum book of endorsements/guarantees” to reduce the accumulated amount of endorsements/guarantees.

  • 5.3.1.5 Detailed review procedures:

  • (1) Before making an endorsement/guarantee for others, the Company shall carefully evaluate whether the endorsements/guarantees is in compliance with these regulations and the Company’s operational procedures.

  • (2) The evaluation items for endorsements/guarantees shall include:

    • A. The necessity of and reasonableness of endorsements/guarantees.

    • B. Credit status and risk assessment of the entity for which the endorsement/guarantee is made.

    • C. The impact on the Company’s business operations, financial condition, and shareholders’ equity.

    • D. Whether collateral must be obtained and appraisal of the value thereof.

  • 5.3.1.6 Procedures for controlling and managing endorsements/guarantees by subsidiaries:

The Company’s internal auditors shall understand the endorsements and guarantees made by the subsidiaries regularly, and audit their compliance with the Operational Procedures for Making Endorsements/Guarantees periodically, to prepare the audit reports.

  • 5.3.1.7 Procedures for use and custody of corporate chops:

  • (1) The company shall use the corporate chop registered with the Ministry of Economic Affairs as the dedicated chop for endorsements/guarantees. The chop shall be kept in the custody of a

~105~

designated person approved by the Board of Directors and may be used to seal or issue negotiable instruments only in prescribed procedures.

  • (2) When making guarantees to foreign companies, the guarantee letter presented by the Company shall be signed by the person(s) authorized by the Board of Directors.

  • 5.3.1.8 Hierarchy of decision-making authority and delegation thereof:

  • (1) Where the Company makes endorsements or guarantees for others, the resolution adopted by the Board of Directors to approve is required. As time is of the essence, the guarantee within the limit of NT$300 million, may be approved by the chairman of the board, for subsequent submission to and ratification by the next Board of Directors’ meeting.

  • (2) Before making any endorsements/guarantees pursuant to 5.2.2, a subsidiary in which the Company holds, directly or indirectly, 90% or more of the voting shares shall submit the proposed endorsements/guarantees to the Company’s Board of Directors for a resolution. This restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares.

  • (3) Where the Company needs to exceed the limits set out in the operational procedures to satisfy its business requirements, and where the conditions set out in the operational procedures are complied with, it shall obtain approval from the Board of Directors and half or more of the directors shall act as joint guarantors for any loss that may be caused to the Company by the excess endorsement/guarantee. It shall also amend the operational procedures accordingly and submit the same to the shareholders’

~106~

meeting for ratification after the fact. If the shareholders’ meeting does not give consent, the Company shall adopt a plan to discharge the amount in excess within a given time limit. During the discussion of the board meeting in the preceding paragraph, it shall take into full consideration the opinions of each independent director; independent directors’ opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the Board of Directors’ meeting.

  • 5.3.1.9 Penalties: for any violation of the regulations or operational procedures by related personnel, the Company’s internal management regulations shall be complied with.

  • 5.3.1.10 When making endorsements/guarantees for others, the Company shall take into full consideration the opinions of each independent director; independent directors’ opinions specifically expressing assent or dissent and the reasons for dissent shall be included in the minutes of the Board of Directors’ meeting.

  • 5.3.2 The company shall prepare a memorandum book for its endorsement/guarantee activities and record in detail the following information for the record: the entity for which the endorsement/guarantee is made, the amount, the date of passage by the Board of Directors or of authorization by the chairman of the board, the date the endorsement/guarantee is made, and the matters to be carefully evaluated under 5.3.1.5.

  • 5.3.3 The company’s internal auditors shall audit the operational procedures for endorsements/guarantees for others and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the audit committee in writing of any material violation found.

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  • 5.3.4 When a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of these operational procedures, or the amount of endorsement/guarantee exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to all the supervisors, and shall complete the rectification according to the timeframe set out in the plan.

  • 5.3.5 Where the Company makes an endorsement/guarantee to a subsidiary whose net worth is lower than half of its paid-in capital, the subsidiary shall be requested for the debt repayment plan, and submitted to the Board of Directors for approval. Afterward, the implementation of the debt repayment plan is reported to the Company’s board meetings regularly.

    • In the case of a subsidiary with shares having no par value or a par value other than NT$10, the sum of the share capital plus paid-in capital in excess of par shall be substituted.

  • 5.4 Public disclosure of information

  • 5.4.1 The company shall announce and report the previous month’s balance of endorsements/guarantees of itself and its subsidiaries by the 10th day of each month.

  • 5.4.2 The company whose balance of endorsements/guarantees reaches one of the following levels shall announce and report the such event within two days commencing immediately from the date of occurrence:

    • 5.4.2.1 The aggregate balance of endorsements/guarantees by the public company and its subsidiaries reaches 50% or more of the public company’s net worth as stated in its latest financial statement.

    • 5.4.2.2 The balance of endorsements/guarantees by the public company and its subsidiaries for a single enterprise reaches 20% or more of the public company’s net worth as stated in its latest financial statement.

    • 5.4.2.3 The balance of endorsements/guarantees by the public company and

~108~

its subsidiaries for a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for, carrying value of equity method investment in, and balance of loans to, such enterprise reaches 30% or more of public company’s net worth as stated in its latest financial statement.

  • 5.4.2.4 The amount of new endorsements/guarantees made by the public company or its subsidiaries reaches NT$30 million or more, and reaches 5% or more of the public company’s net worth as stated in its latest financial statement.

The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to 5.4.2.4. 

  - 5.4.3 The company shall evaluate or record the contingent loss for endorsements/guarantees, and shall adequately disclose information on endorsements/guarantees in its financial reports and provide certified public accountants with relevant information for the implementation of necessary audit procedures.

  1. Supplemental Provisions

  2. 6.1 The operational procedures for making endorsements/guarantees are established by the Company, and, after passage by the Board of Directors, submit the same to the audit committee and for approval by the shareholders’ meeting. Where there any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinions to the audit committee and for discussion by the shareholders’ meeting. The same shall apply to any amendments to the procedures.

  3. 6.2 When the operational procedures for making endorsements/guarantees are submitted for discussion by the Board of Directors pursuant to the preceding

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paragraph, 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 of Directors meeting.

~110~

[Appendix 5] Directors’ Shareholdings

Directors’ Shareholdings

The number of shares held by individual and all directors as recorded in the shareholder register as of the book closure date of the shareholders’ meeting (April 23, 2023) is as follows:

follows:
Title Name No. of Shares
Held		 Ownership Held by
the Company
Chairman Xue Yong Co., Ltd.
Representative:
Chia-Chi
Hou		 3,238,000 3.52%
Director Zu Sheng International
Co., Ltd.
Representative: Ming-Yu
Huang		 2,233,000 2.43%
Director Zu Sheng International
Co., Ltd.
Representative: Chien-
Ting Chen
Director Yuan-Zhong Co., Ltd.
Representative: ChangHsu		 4,083,000 4.44%
Independent
Director		 Teng-Cheng Liu 0 -
Independent
Director		 Chieh-Min Liu 0 -
Independent
Director		 Hung-Mao Tien 0 -
Total 9,554,000 10.39%

Explanation:

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

  2. In accordance with Article 26 of the Securities and Exchange Act and the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies, all Directors shall hold a minimum of 7,360,000 shares.

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~112~

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