COSMO — AGM Information 2023

Jun 20, 2023

Cosmo Electronics Corporation

2023 Annual General Sharehodlers’Meeting Minutes

Means of Meeting Convention ： Physical shareholders meeting

Time of Meeting ： June 15, 2023 at 9:00 am

Location of Meeting ： Conference Room B2, No. 716, Zhongzheng Road, Zhonghe District, New Taipei City 235, Taiwan

Total shares represented by shareholders presented in person or by proxy ：

109,287,348 shares, accounting for 65.01% of the Company’s total outstanding shares Directors present ： Chairman ： TSAI, NAI-CHENG

Director ： Chao Chia-chi 、 Hung Yu-han 、 Liu Chin-mu 、 Lee Chih-chin

Independent Director ： Wu Yong-fu (Audit Committee Convenor) 、 Xu Bo-yu (For and on behalf of PricewaterhouseCoopers)

Nonvoting ： Taiwan Accountant Tsai, Yi Tai 、 Liyun Chang's law firm

Chairman ： TSAI, NAI-CHENG, the Chairman of the Board of Directors

Recorder ： Wu Xiu Hui

Meeting Commencement Announced ： The aggregate shareholding of the shareholders and proxies present constituted a quorum. The Chairman called the meeting to order.

㇐、 Chairperson Remarks （ Omitted ）

二、 Management Presentations

• 1、 The business report for fiscal year 2022.（Please see Attachment 1）

• 2、 The Audit committee's review report on the Company's business report and financial statements for fiscal year 2022. （Please see Attachment 2）

• 3、 The report of remuneration distribution to employees and directors for fiscal year 2022.

Explanation: The 2022 profit is NT $116,103,460. The 5% of the profit shall be allocated for the employees’ bonus which is NT $5,805,173 and 1% of that will be for the Board of Directors’ remuneration which is NT $1,161,035, those were paid in cash.

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4 、 Annual Report of director compensation for fiscal year 2022.

Explanation:

1. The remuneration policies, standard and structure which paid to the directors, independent directors are based on the responsibilities, risks and time devotion which are:

2. (1) Remuneration policies, standard and packages:

3. A. The independent directors of the Company receive fixed compensation and no other compensation.

4. B. Directors who are involved in the Company’s business affairs are paid monthly in accordance with the Company’s salary plan, regardless of profit or loss.

5. C. The compensation of directors and supervisors is appropriated according to the business performance of the Company in the year and the stipulated percentage in Article 19 of the Articles of Incorporation, which stipulate that: “From the profit earned by the Company as shown through the annual account closing, not more than 3% of the gross profit shall be taken for directors’ and supervisors’ compensation, provided that the amount of accumulated loss, if any, be first withheld.”

6. (2) Procedures for setting compensation:

7. A. Compensation for President and Vice President consists of salary and bonus. Salary is paid with reference to industry standards, title, rank, education, professional ability and responsibilities, and is based on the scope of authority and responsibility of the position within the Company and its contribution to the Company’s operating objectives and performance. The bonus is based on the performance evaluation items of managerial personnel, which include financial indicators (such as the achievement rate of the Company’s revenue, profit before tax and profit after tax) and non-financial indicators (such as the preservation and management of assets, quality control of production, and significant deficiencies in compliance with laws and regulations and operational risks of the departments under the management).

8. B. The compensation of directors, supervisors and managers shall be evaluated and set by the Compensation Committee of the Company on a regular basis and approved by the Board of Directors, in addition to the provisions of the Company’s Articles of Incorporation.

9. (3) Correlation of operating performance and future risks:

10. A. The bonus and compensation of directors, supervisors, and managers take into account the Company’s operating objectives and financial condition, as well as their professional competence and responsibilities.

11. B. Important decisions by the Company’s management are made after weighing various risk factors. The performance of these important decisions is reflected in the Company’s profitability, which in turn is related to the management’s compensation, i.e., the compensation of the Company’s directors, supervisors and managers is related to the performance of future risk management.

12. C. In order to regularly evaluate the managerial personnel’s bonus based on his or her participation in the Company’s operations and personal performance contributions, and in accordance with the Company’s “Regulations Governing the Year-End Bonus and Operating Performance Bonus”, the “Regulations Governing the Year-End Bonus and Operating Performance Bonus” will be reviewed from time to time in accordance with the actual operating conditions and relevant laws and regulations, including financial indicators (such as the achievement rate of the Company’s revenue, profit before tax and profit after tax) and nonfinancial indicators (such as asset preservation and management, product quality control, and significant deficiencies in compliance with laws and regulations and operational risks of the departments under the supervision of the Company) in order to provide reasonable compensation.

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2. Remuneration paid during the most recent fiscal year to directors

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Ratio of Total
Ratio of Total Compensation Compensation
Compensation (A+B+C+D) to Net Relevant Compensation Received by Directors Who are Also (A+B+C+D+E+F+G) to
Name Employees Net
Title Income (%)
Income (%)
Base Severance Pay Directors Salary, Bonuses, and
Compensation (A) (B) Compensation (C) Allowances (D) Allowances (E) Severance Pay (F) Employee Compensation (G) Compens
ation from
All All All All All All All companies All companies ventures
companyThe consolidastatementfinancial companies in the ted companyThe statemenfinancial companiconsolides in the ated companyThe statemenfinancial companiconsolides in the ate d companyThe statemenfinancial companiconsolides in the ated company The All companies consolidated statementsfinancial in the companyThe consolidatcompaniestatementfinancial s in the e d compaThe ny consolidatcompaniestatementfinancial s in the e d CashThe companyStock consolidatedCashstatementsfinancial in the Stock companyThe consolidated statementsfinancial in the other than companysubsidiar from the parenties or
s ts ts ts s s
Chairperson TSAI, NAI-CHENG 0 0 0 0 194 194 0 0 194 0.18% 194 0.18% 0 0 0 0 0 0 0 0 194 0.18% 194 0.18% 0
DIGICROWN
Director & TECHNOLOGIES
President LTD. 0 0 0 0 194 194 0 0 194 0.18% 194 0.18% 2,174 2,174 86 86 0 0 0 0 2,454 2.23% 2,454 2.23% 0
(Representative:
Chao Chia-chi)
Director & DIGICROWN
Chief TECHNOLOGIES
Financial LTD. 0 0 0 0 194 194 0 0 194 0.18% 194 0.18% 1.525 1.525 66 66 0 0 0 0 1,785 1.62% 1,785 1.62% 0
Officer (Representative:
Hung Yu-han )
DIGICROWN
TECHNOLOGIES
Director
LTD. 0 0 0 0 193 193 0 0 193 0.18% 193 0.18% 514 514 30 30 0 0 0 0 737 0.67% 737 0.67% 0
(Representative
: Ho Wei-chan )
Bank SinoPac as
Custodian for Fine
Director &
Asia Int’l Ltd.
Deputy Investment Account 0 0 0 0 193 193 0 0 193 0.18% 193 0.18% 1,578 1,578 67 67 0 0 0 0 1,838 1.67% 1,838 1.67% 0
GM
(Representative:
Liu Chin-mu)
Director & Bank SinoPac as
Deputy GM Custodian for Fine
& Corporate Governance Asia Int’l Ltd. Investment Account 0 0 0 0 193 193 0 0 193 0.18% 193 0.18% 1,596 1,596 67 67 0 0 0 0 1,856 1.68% 1,856 1.68% 0
Officer (Representative: Lee
Chih-chin)
Independentdirector Wu Yong-fu 600 600 0 0 0 0 0 0 600 0.54% 600 0.54% 0 0 0 0 0 0 0 0 600 0.54% 600 0.54% 0
Independentdirector Xu Bo-yu 480 480 0 0 0 0 0 0 480 0.44% 480 0.44% 0 0 0 0 0 0 0 0 480 0.44% 480 0.44% 0
Independentdirector Lee Tan 280 280 0 0 0 0 0 0 280 0.25% 280 0.25% 0 0 0 0 0 0 0 0 280 0.25% 280 0.25% 0
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Description:

Note: The compensation to directors and supervisors and the compensation to employees for the year 2022 have been approved by the board of directors on March 21, 2023, and the amount of $1,161,035 has been

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5. Report of the "Rules Governing Financial and Business Matters Between this Corporation and its Affiliated

Enterprises"

Explanation:

1. The revision is in accordance with the official letter# 1112201443 issued by the TWSE.

2. Comparison Table of Rules Governing Financial and Business Matters Between this Corporation and its Affiliated Enterprises（Please see Attachment 6）

三、 Proposals

Proposal 1 ： The business report and financial statements for fiscal year 2022 (Proposed by the Board

of Directors)

Explanation:

1. The Board has adopted the Proposal for 2022 Annual Business Report, 2022 Parent Company only Financial Statements, and 2022 Consolidated Financial Statements. The 2022 Parent Company only Financial Statements and 2022 Consolidated Financial Statements have been viewed by the accountants Ms. Tsai, I-tai and Ms. Liang, Channu, and together with 2022 Annual Business Report have sent and reviewed by the Audit Committee.

2. The 2022Annual Business Report （Please see Attachment 1）, the 2022 Parent Company only Financial Statements and Report of Independent Accountants（Please see Attachment 3）, the 2022 Consolidated Financial Statements and Report of Independent Accountants （Please see Attachment 4）. Submission for acknowledge.

3. Resolution: There is no question raised by the shareholders. Approved and acknowledged as proposed be by the Board of Diredtors by Voting

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Shares represented at the % of the total represented
Voting Results
time of voting share present
Votes in favor: 107,383,276 votes
98.25%
(15,381,291 Votes)
Votes against: 124 votes
0.00%
109,287,348 votes (124 Votes)
Votes invalid: 0 votes 0.00%
Votes abstained: 1,903,948 votes
1.74%
(1,903,948 Votes)
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*including votes casted electronically (numbers in brackets)

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Proposal 2：The proposal for distribution of profit for fiscal year 2022 (Proposed by the Board of

Directors)

Explanation:

1. The Board has adopted the Proposal for Distribution of 2022 Profits and has sent and reviewed by the Audit Committee.

2. The 2022 Earnings Distribution Table （Please see Attachment 5）. Submission for acknowledge.

Resolution: There is no question raised by the shareholders. Approved and acknowledged as proposed be by the Board of Diredtors by Voting

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Shares represented at % of the total represented
Voting Results
the time of voting share present
Votes in favor: 107,383,276 votes
98.25%
(15,381,291 Votes)
Votes against: 124 votes
0.00%
109,287,348 votes (124 Votes)
Votes invalid: 0 votes 0.00%
Votes abstained: 1,903,948 votes
1.74%
(1,903,948 Votes)
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*including votes casted electronically (numbers in brackets)

四、 Discussion

Discussion 1：New common share issuance through the increase of capital by capitalization of capital reserve (Proposed by the Board of Directors)

Explanation:

1. To enhance the scale of capital and strengthen financial structure, the Company plans to appropriate NT $33,619,350 from the capital reserve acquired from the amount derived from the issuance of new shares at a premium. The new common share issued is 3,361,935 shares with the par value NT$10, the dividend distribution is NT $0.2 per share based on the shareholding ratio of shareholders listed on Shareholders' Rosters on the base day. If fractional shares are issued, shareholders may register with agent for stock affairs for consolidation of them within 5 days of ex-rights date. If not consolidated or still short of 1 share after consolidation, a cash payment will be made in accordance with Article 240 of the Company Law. It will be calculated to 1 N.T. dollar (less will be discarded). The chairman of the board is authorized to negotiate with specific parties for them to purchase such shares at par value.

2. Upon approval by the shareholders meeting and competent authorities, the Board of

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Directors is authorized to set base dates for issuing new shares and other relevant matters.

1. If share capital changes after appropriation of dividend affect the number of outstanding

shares and thus causing changes in the dividend rate, it is proposed that the Board of

Directors shall be fully authorized by the shareholders meeting to handle the matter in accordance with relevant rules and regulations.

1. The new shares shall have the same rights and obligations of the original shares.

Resolution: There is no question raised by the shareholders. Approved and acknowledged as proposed be by the Board of Diredtors by Voting

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Shares represented % of the total represented
Voting Results
at the time of voting share present
Votes in favor: 107,383,276 votes
98.25%
(15,381,291 Votes)
Votes against: 124 votes
0.00%
109,287,348 votes (124 Votes)
Votes invalid: 0 votes 0.00%
Votes abstained: 1,903,948 votes
1.74%
(1,903,948 Votes)
----- End of picture text -----*

*including votes casted electronically (numbers in brackets)

五、 Extempore Motions ： None 。

There is no question to extemporary motions raised by the shareholders.

六、 Adjournment ： The Chairman adjourned the meeting (9:15 am on the same day).

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Attachment 1

Summary of 2022 Annul Business Report

(This document is prepared in accordance with the Chinese version and is for reference only. In the event of any discrepancy between the English version and the Chinese version, the Chinese version shall prevail.)

1. Business Policy

(1) Optoelectronics Department

As a specialist manufacturer of optocouplers and relays, we can respond quickly to market dynamics in terms of making decisions and actions. Our main target markets are those with a large number of users and a wide range of channels, but lacking the capability of designing products. We can provide integrated product specifications, designing and producing services to meet the specific needs of our customers. Furthermore, we will develop new products in line with the trend of lighter, thinner, shorter, and smaller products by applying our core technology. Improve the quality of our products continuously to ensure our dominant position in the market. Taking cost reduction and marketing strategy into consideration, we decided to establish manufacturing facilities in Indonesia to improve the quality of customer services and also the sales performance in the local market. Last but not least, increasing the profitability by rising the sales ratio of high-margin products which will be produced after upgrading production equipment and adjusting product restructure. Tapping into different markets such as industrial automation systems, Artificial Intelligence, automotive electronic parts, and 5[th] -generation mobile networks to seize business opportunities.

(2) LED Lighting

In recent years, the price-performance ratio of LED lighting has improved and its penetration rate in the total lighting market is gradually on the rise. The company had invested in automated production lines in facilities, research and development of new products and service quality improvement to meet the needs of clients. In the U.S. market, we have applied for patents to protect our intellectual property rights to enhance our competitiveness in the market and also increase the market share of our products.

(3) Clean Steam Department

The company is dedicated to achieving net zero emissions in ESG standards before 2050. To achieve that, we will continuously develop high-efficiency, low-cost and long-life energy sources to cut carbon emissions and pollution. The Clean Steam Department is expected to bring advantages and niches to the growth of the business.

(4) Industrial Park Development

The level of investment attraction has increased in Indonesia because of Indonesia’s demographic dividend, the removal of its barriers to foreign investment and tax incentives under the New Southbound Policy promoted by the Taiwanese government and the Investment Act promulgated by the Indonesian government.

To increase the profitability of the group/shareholders, the company has decided to invest in the development of industrial parks. As a part of diversification in operation, it can help various Taiwanese SMEs to not only gain a foothold in the Indonesian market quickly but also jointly polish up the image of the Taiwanese industry. These can be the reasons leading to the increase in our international visibility. The Group since 2008 has been proactive in looking for suitable lands to develop an industrial park. However, we decided to take stable steps regarding industrial development due to worldwide uncertainty in economics, politics, the pandemic and also delay of local construction. As of the year 2022, the company has acquired approximately 161 hectares of land and obtained groundbreaking permits. We will continue to search for desirable lands in the vicinity of the development area.

2. Important production and marketing policies

(1) Marketing strategy:

• (I) Improving the quality of services and sales network through the expansion of regional distributors and

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agents.

• (II) Being able to promote products to the market, expand the business scope, raise the visibility of new products and follow current market trends by participating in international expositions or through brand/product advertising.

• (III) Adjust the sale ratio in Asia region from 80% to 60% and increase European market development for operating risk diversification

(2) Production strategy:

• (I) Executing effective production management, enhancing product quality, improving production yield and increasing product reliability.

• (II) Mastering key technology, increasing efficiency in automation, shortening production period, raising productivity and reducing the cost to make more profits.

• (III) Increasing the knowledge and ability of our staff to meet the needs of customer services. Providing positive and efficient services to build customer loyalty.

• (IV) Building manufacturing facilities in Indonesia for its stable workforce and reasonable salary to reduce manufacturing costs.

(3) Product orientation:

• (I) Developing new product specifications under existing product lines, increasing the value of our products in relation to the development of technologies, and making continuous efforts to reduce costs to improve the ability in the competition and raise the market share of our products.

• (II) Applying the latest technique to the specifications of products that are not only in high demand but also in our customers’ needs to improve the development of customized OEM products.

• (III) Investing in new product developments which relate to the latest technique. Develop and innovate new products to diversify the Company’s product portfolio. Improving sales performance and enhancing brand popularity.

• (IV) Upgrading equipment to manufacture high-end products, improve production efficiency and increase production yield and profitability.

• (V) Developing marketing strategy in relation to industrial automation systems, Artificial Intelligence, automotive electronic parts and 5[th] -generation mobile networks.

3. Results of business plan implementation

The Company’s net operating revenues for fiscal 2022 were $1,390,778 thousand, operating costs were $1,053,647 thousand, operating expenses were $298,032 thousand, non-operating net income was $74,239 thousand, and income tax expenses was $3,114 thousand. After offsetting income and expenses, the net income for the period was $110,224 thousand, an increase of $54,939 thousand compared to the net income of $55,285 thousand in fiscal 2021, mainly due to an increase in revenue and gross profit.

4. Budget implementation

For fiscal 2022, operating revenues reached 86% of the estimated goal, and the estimated performance of each accounting item is as follows:

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Unit: NT$ thousands
Actual amount Estimated amount Achievement rate
Item
in FY2022 for FY2022 (%)
Operating revenues 1,390,778 1,618,092 86%
Operating costs 1,053,647 1,310,655 80%
Operating expenses 298,032 177,990 167%
Net operating gain 39,099 129,447 30%
Net non-operating
74,239 36,555 203%
revenues and expenses
Net income after tax 110,224 149,402 74%
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5. Analysis of financial income and expenses and profitability

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Unit: NT$ thousands
Actual amount in Actual amount
Item
FY2022 in FY2021
Operating profit 39,099 725
Financial Net non-operating income and
74,239 65,666
income and expenses
expenses Profit before tax 113,338 66,391
Profit after tax 110,224 54,939
Return on assets (%) 3.68 2.09
Return on equity (%) 6.18 3.32
Operating (loss)
Profitability Ratio to capital income 2.33 0.04
stock (%)
Profit before tax 6.74 4.11
Profit margin (%) 7.93 4.09
Earnings per share (NT$) 0.66 0.33
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Chairman: TSAI,NAI-CHENG / General Manage: Chao Chia-chi /Accounting Supervisor: Hung Yu-han

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Attachment 2

Audit Committee's review report of 2022.

Audit Committee's Review Report of Cosmo Electronics Corporation.

The Board of Directors has prepared the Cosmo Electronics Corporation. (“the Company”) 2022 Business Report, financial statements, and proposal for earnings distribution. The CPA firm of PwC was retained to audit the Company’s financial statements and has issued an audit report relating to financial statements. The above Business Report, financial statements, and earnings distribution proposal have been examined and determined to be correct and accurate by the Audit Committee of Cosmo Electronics Corporation. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Law, we hereby submit this report.

Cosmo Electronics Corporation 2023 Shareholders’ Meeting Audit Committee Convener ： Wu Yong-fu

March 21,2023

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Attachment 5

Cosmo Electronics Corporation

PROFIT DISTRIBUTION TABLE

Year 2022

(Unit: NTD) Opening Unappropriated Retained Earnings $$ 0 $ Add: Net profit for 2022 110,223,685 Add ： OTHER COMPREHENSIVE INCOME (Re-measurement of defined benefit 12,192,684 Plan recognized in retained earnings) Subtotal 122,416,369 Less: 10% legal reserve (12,241,637) Less: Special reserves (77,537,417) 32,637,315 Distributable surplus for the current period Less: Cash Dividends to Common Share Holders ( NTD 0.19 per share) (31,938,385) $ 698,930 Unappropriated Retained Earnings

Notes:

1. It is planned to allocate NT$31,938,385 in cash dividends from the distributable surplus in 2022, and distribute NT$0.19 per share. , transferred to other income of the company

2. After the approval of capital increase and issuance of new shares by the shareholder meeting, the board of directors will separately set the base date,issuance date and other related matters of capital increase and allotment. If the share capatal is affected and thus the number of shares outstanding is affected which leads to changes of shareholding ratio, the board of directors will be fully autoriozed to handle such matter under the Company Act or any other applicable regulations.

Chairman: TSAI,NAI-CHENG / General Manage: Chao Chia-chi /Accounting Supervisor: Hung Yu-han

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Attachment 6

COSMO ELECTRONICS CORPORATION

Rules Governing Financial and Business MattersBetween Affiliated Enterprises Amendment Articles comparison table

The basis and the Content reasons of amendment Articles under amendment Current articles Article 1 Article 1 Cooperate with Taiwan To ensure sound financial and business These measures are specially formulated Securities Governance No. interactions between this Corporation and its in order to grasp the rationality of the 1110017532 release affiliated enterprises and to prevent non arm'sCompany's operations, business, and instructions for the length transactions and improper channeling of financial transactions with related operation of the 2023 interests with respect to the purchase and sale of parties, specific companies, and group corporate governance goods, the acquisition and disposal of assets, the companies. evaluation system and the provision of endorsements and guarantees, and executing of evaluation loans of funds between this Corporation and its indicators affiliated enterprises, these Rules are adopted pursuant to Article 17 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies. Article 2 Article 2 Except as otherwise provided by law and Transactions between the Company and regulation or by the articles of incorporation, related parties, specific companies, and financial and business matters between this group companies shall be handled in Corporation and any of its affiliated enterprises accordance with these regulations in shall be handled in accordance with the addition to the relevant systems and provisions of these Rules. procedures of the company. Article 3 Article 3 The term "affiliated enterprise" as used here in The so-called group companies,specific means an enterprise that, in accordance with companies and related parties,is defined Article 369-1 of the Company Act, exists by Accounting Research and independently and has either of the following Development Foundation in IASC relationships with this Corporation: published the sixth IFRSs 「 The 1.A relationship of control or subordination. disclosure of transcation of related 2.A relationship of mutual investment. parties 」 the meanings of related In determining whether a relationship of control parties,and mentioned in TWSE or subordination under the preceding Supplementary Provisions to the Taiwan subparagraph exists, the substance of the Stock Exchange Corporation Rules for relationship shall be considered in addition to the Review of Securities Listings the legal form. meaning of group companies and specific companies. Article 4 Article 4 This Corporation shall pay close attention to the The transaction referred to in this following matters when exercising supervision regulation,include the following items: over the operation and management of its 1. Purchase affiliated enterprises: 2. Sales 1.This Corporation shall obtain an appropriate 3. Property transactions and long-term number of director and supervisor seats in the equity investment affiliated enterprise in accordance with the 4. Lease of real estate percentage of the shares it holds. 5. Consignment sales and commission 2.A director that this Corporation assigns to an collection and payment affiliated enterprise shall attend the affiliate's 6.Consignment processing and board meetings, and report the matter to the processing fee collection and payment chairperson or general manager of this 7. Financial intermediation and interest Corporation. collection and payment 3.A supervisor assigned to an affiliated enterprise 8.Endorsement by this Corporation shall supervise the affiliate's 9.Other business operations, and report to the chairperson or general manager of this Corporation. 4.This Corporation shall assign competent

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personnel to assume important positions at its affiliated enterprise, in order to assume the duties and responsibilities of management, decisionmaking, and supervision and evaluation. 5.Subsidiaries of this Corporation shall submit financial statements and management table every month, for management and control by this Corporation. Other affiliated enterprises shall also regularly submit financial statements, for analysis and review by this Corporation. Article 5 Article 5 The division of powers and responsibilities between this Corporation and its affiliated enterprises with respect to personnel management shall be clearly identified, and personnel transfers between the two shall be avoided. However, where personnel support or transfer is indeed necessary, the scope of work, division of powers and responsibilities, and allocation of costs shall be specified in advance.

• The trading conditions are as follows: 1.When purchasing goods, if it’s in special circumstances or given advantageous conditions that differ from those of ordinary suppliers,

• under which the granting of preferential pricing or terms of payment can be reasonably stipulated, any other prices and payment terms shall be commensurate with those offered to ordinary suppliers.

2.When selling goods,if in cases of longterm cooperation or other special factor that are different from ordinary clients, under which reasonable stipulations may be made to grant preferential pricing or terms of payment, any other prices and payment terms shall be ommensurate with those offered to ordinary clients. 3.Property transaction and long-term equity investment shall comply with procedures for the acquisition or disposal of assets in accordance with the provisions of Company’s Regulations ,and in accordance with fair market value(which is obvious) or the evaluation price to negotiate 4.Lease of real estate shall set a reasonable rent contract and be commensurate with reasonable price to calculate rent.

5.Consignment sales shall be commensurate with general agent to calculate commission. 6.Consignment processing shall be commensurate with general processing manufacturers to calculate processing fee. 7.Financial intermediation shall comply with Operational Procedures for "Loaning Funds to Others "stipulated by the Company to conduct. 8.Endorsement shall comply with regulations Governing Loaning of Funds and Making of Endorsements/Guarantees stipulated by the Company to conduct. 9.Others are negotiated on a case-by-case basis.

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Article 6

Article 6 Every single transaction amount over This Corporation shall establish an effective NTD 50 million or cumulative transaction amount over NTD 300 system of communication with each affiliated million dollars,shall besides comply with article 5 to conduct,it must also be enterprise with respect to financial and approved by the resolution of the board. business matters,and to mitigate credit risks, shall In case of business needs, the chairman of the board can be authorized to regularly conduct comprehensive risk approve and conduct it first, and then assessments of their banks,principal clients, and ratified by the board afterwards. suppliers.With respect to an affiliated enterprise with which it has financial and business interactions, this Corporation shall especially maintain close control over material financial and business items for the purpose of risk management. Article 7 Article 7 Any loans or endorsements The Company’s supervisor shall check if /guarantees between this Corporation and an specific companies,group companies and affiliated enterprise shall be carefully assessed related party are exist,and check the and carried out in compliance with the provisions following specific companies,group of the Regulations Governing Loaning of Funds companies and related party transaction and Making of Endorsements/Guarantees by procedure at any time. Public Companies and with the procedures 1.Whether the transaction amount prescribed by this Corporation regarding loans to and conditions of specific companies, others and provision of endorsements/guarantees. group companies or related parties are the same as those of non-specific companies, non-group companies or nonrelated parties.If there’s difference,is it reasonable? 2.Is there proper approvement of specific companies,group companies and related parties transaction? If there is a quota,whether the transaction amount is within the limit. 3.Whether the disclosure of transactions of related party and other necessary disclosures in financial report are consistent with the account. Article 8 Article 8 Price terms and payment methods shall be The supervisor may assign the company's expressly stipulated for any business interaction auditors or accountants to audit the between this Corporation and any affiliated financial statements to conduct regular enterprise. The purpose,pricing, and terms of a inspections in accordance with Article 7. transaction, and its formal and substantive nature If violations of regulations or apparent and the related handling procedures, shall not abnormalities are found, the supervisor differ markedly from those of a normal shall inform the board and ask them to transaction with a non-related party, nor may they explain and make necessary be obviously unreasonable. When business needs improvements. require the purchase of finished products, semifinished products, or materials from an affiliated enterprise, purchasing personnel shall thoroughly evaluate the reasonableness of the price quoted by the affiliated enterprise based on market prices and other transaction terms and conditions. Except in special circumstances, or given advantageous conditions that differ from those of ordinary suppliers, under which the granting of preferential pricing or terms of payment can be reasonably stipulated, any other prices and payment terms shall be commensurate with those

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offered to ordinary suppliers. Price quotes for the sale of any finished products, semi-finished products, or materials to an affiliated enterprise shall be made with reference to current market prices. Except in cases of long-term cooperation or other special factors that are different from ordinary clients, under which reasonable stipulations may be made to grant preferential pricing or terms of payment, any other prices and payment terms shall be commensurate with those offered to ordinary clients. For professional or technical services provided between this Corporation and an affiliated enterprise, both parties shall enter into a contract stipulating the scope of the services, fees charged, time period, payment terms, and after-sales service. The contract shall be implemented after approval by the general manager or the chairperson of this Corporation, and all contract terms and conditions shall comply with normal business practice. By the end of each month, the accounting personnel of both this Corporation and its affiliated enterprises shall perform cross checks of the purchases and sales of goods between them for the preceding month and the related balances of accounts payable and receivable.If any discrepancies are found, accounting personnel shall identify the cause and prepare a reconciliation statement.

Article 9

Any asset transaction, derivative trading, merger, demerger, acquisition, or share transfer between this Corporation and an affiliated enterprise shall be conducted in accordance with the act and the procedures for acquisition and disposal of assets prescribed by this Corporation.

Article 10

With respect to any financial or business interaction between this Corporation and any affiliated enterprise that requires a resolution of the board of directors, full consideration shall be given to each independent director's opinion. Specific opinions by independent directors expressing assent or dissent, and the reasons for dissent, shall be included in the minutes of board meetings. When a director is an interested party with respect to a particular agenda item, that director shall enter into recusal and may neither vote on that item nor exercise voting rights as proxy for another director. Directors shall maintain selfdiscipline among themselves and may not enter into relationships of inappropriate mutual support with other directors.

Article 9

Financial department shall report related party transactions of any event which has a material impact on securities prices or shareholders' equity to competent authority for future reference after reporting to general manager and the board.

Article 10

This act is formulated by financial department ,and conducted after approved by the board. The same procedure shall be followed when the principles have been amended.

Upon discovering that, in the course of their duties, the board of directors or a director has committed a violation of law or regulation, the articles of incorporation, or a shareholders meeting resolution, a supervisor shall immediately notify the board of directors or the individual director to cease the misconduct, and shall take appropriate measures to curb expansion of the misconduct. When necessary, a supervisor

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shall also file a report with the relevant regulatory
authority or agency.
Article 11 Article 11
This Corporation, in compliance with the This articles were orginally established
requirements of laws and regulations, shall make on 23 April,1998.
arrangements for the provision by each subsidiary The first amendment was made on 20
of required financial and business information, or June,2001.
to retain CPAs to audit or review the financial
reports of each subsidiary.
The company shall announce the relevant
information of affiliated enterprises in accordance
with the regulations of the competent authority
and information on any material transaction
between this Corporation and an affiliated
enterprise shall be fully disclosed.
If an affiliated enterprise experiences financial
difficulties, this Corporation shall assess the
resulting effect on the finances, business, or
operations of this Corporation, and when
necessary, appropriate conservatory measures
shall be adopted to safeguard this Corporation's
rights as a creditor. Under the above
circumstances, in addition to specifying the
resulting effect on this Corporation's financial
position in its annual report and prospectus, this
Corporation shall also make a timely
announcement of material information on the
Market Observation Post System (MOPS).
If this Company has an "important subsidiary",
it should upload its previous
month's turnover, endorsement guarantee and
balance of funds and loans, statistics of various
product business revenues, and other related
declaration matters before the tenth of each month
in accordance with the regulations. The so-called
"important subsidiaries" are defined in
accordance with the regulations of the competent
authority.
Article 12
This Company,shall in accordance with the
regulations of the competent authority, announce
and declare relevant matters on behalf of
affiliated companies that are private issue.
Article 13
These Rules, and any amendments hereto, shall
be implemented after adoption by the board of
directors.
Article 14
These Articles were originally established on
April 23, 1998.
The first amendment was made on June 20,2001.
The second amendment was made on March
21,2023.
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