EMC — AGM Information 2023

Jun 8, 2023

TWSE stock code: 2383

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Elite Material Co., Ltd.

Year 2023 Annual Shareholders’ Meeting

Meeting Agenda (Translation)

Date: 31 May 2023 Time: 9:00am Taipei time Place: No. 18, Datong 1[st] Road, Guanyin District, Taoyuan City Taiwan

Method of convening: Entity shareholders' meeting

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Table of Contents

A. Meeting agenda----------------------------------------------------------------------------------------------------------3 B. Reporting Items----------------------------------------------------------------------------------------------------------4 I. To report Year 2022 business operations and financial statements -------------------------------------------------------------4 II. Review report by the Audit Committee ------------------------------------------------------------------------------------------------22 III. Information of employees’ compensation and Directors’ remuneration in Year 2022-------------------------------------23 IV. Year 2022 earnings distribution cash dividend situation report ----------------------------------------------------------------23 V. Year 2022 fund raising corporate bonds report -----------------------------------------------------------------------------------23 C. Approval Items----------------------------------------------------------------------------------------------------------24 I. To accept the Year 2022 business report and financial statements------------------------------------------------------------24 II. To approve the proposal for distribution of 2022 profits---------------------------------------------------------------------------24 D. Extemporary motion--------------------------------------------------------------------------------------------------25 E. Appendix------------------------------------------------------------------------------------------------------------------26 I. Articles of Incorporation of Elite Material Co., Ltd. ---------------------------------------------------------------------------------26 II. Meeting rules of stockholders of Elite Material Co., Ltd --------------------------------------------------------------------------32 III. Current shareholding of Directors and Independent Directors-----------------------------------------------------------------35

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Meeting Agenda for

2023 Annual General Shareholders’ Meeting of Elite Material Co., Ltd.

• A. Call the meeting to order B. Chairperson takes chair C. Chairperson remarks

• D. Report items

• E. Proposed resolutions

• F. Extemporary motion G. Meeting adjourned

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Reporting Items

1. To report Year 2022 business operations and financial statements

Year 2022 Business report

I. Year 2022 business results

Unit: NT$ thousands

Items	Year 2022	Year 2021	% change
Revenue	38,672,549	38,500,026	0.45%
Grossprofit	9,710,062	10,068,554	-3.56%
Operating profit	6,225,247	6,922,620	-10.07%
Income before tax	6,296,055	6,911,896	-8.91%
Net income	5,076,240	5,500,157	-7.71%

Note: The net income of year 2022 includes NT$3,366 thousand belongs to the minority interests.

Execution results of business plan

• a. Guanyin/Hsinchu production site of Taiwan: Monthly production capacity has achieved 650,000 sheets.

• b. Kunshan production site of Jiangsu Province, China: Monthly production capacity has achieved 1.35 million sheets. (Expected capacity of 1.65 million/Month in 1Q23)

• c. Zhongshan production site of Guangdong Province, China: Monthly production capacity has achieved 950,000 sheets.

• d. Huangshi production site of Hubei Province, China: Monthly production capacity has achieved 900,000 sheets.

ii. Summary of cash flow statements

Unit: NT$ thousands

Items	Year 2022
Net cash provided by operating activities	7,498,208
Net cash used in investing activities	6,595,595
Net cash used in financing activities	2,687,468
Effects of changes in foreign exchange rate on cash
and cash equivalents	211,468
Increase in cash in reporting period	3,801,549

iii. Analysis of profitability

Items	Year 2022 Year 2021
Return on assets (%)	12.70 17.26
Return on equities (%)	24.26 30.11
Percentage of paid-in capital (%)	Operating profit 186.99 207.94
	Income before tax 189.12 207.62
Net margin (%)	13.13 14.29
Earningsper share(NT Dollar)	15.24 16.50

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iv. Results of research and development:

EMC is the world's largest supplier of halogen-free and Prepreg laminate material, among which the market share of HDI/SLP laminate materials for handheld devices has ranked number one in the world for several consecutive years, and among high-speed related application products such as servers and switches, global market share also rises from nothing to the top three, and the company's long-term development and growth can be expected.

In addition to continuing to focus on the development of halogen-free laminate materials for handheld and high-speed related applications, the company also extends the development of laminate materials for other applications, in year 2022, the company successfully developed a non-PTFE high-frequency laminate material, which can meet the processability of general PCB wet process and meet the needs of base station antennas and self-driving cars for the Internet of Things; The development of substrate is another key focus, at present, it has been mass-produced, and has been qualified by many customers for its quality, achieving localized supply, breaking the situation that Japanese manufacturers monopolized, and EMC’s market share is rapidly increasing.

The development of substrate materials is also a major focus. At present, products with X, Y-CTE < 6ppm/ ℃ have been developed and promoted to customers for certification, so as to improve the localized supply against the exclusive Japanese manufacturers substrate material for packaging.

New products successfully developed by the Company in 2022:

1. RCC material adopted in 5G high-end handheld device has been certified by many customers and is actively preparing for mass production.

2. Non PTFE high frequency laminate material for Self-driving Radar and Antenna has been mass produced.

3. PCIe 5 II and PCIe 6 high speed data transmission material qualified by various customers and continuously gain market share.

4. 800GHz Switch material verified and pilot run by global brand companies and ready for mass production.

In addition to product innovation and commercialization, the competitiveness of the company, intellectual property is also an indispensable item. EMC has been developing innovative products with its own technology, and has been constantly protecting its own technology property rights through patent applications. The foil laminate material industry ranks No. 1 in Taiwan and No. 4 in the world. In the future, it will continue to apply for patents to improve the company's technological value and competitiveness.

II. Summary of Year 2023 business plan

• i. Planning of sales and production

• a. Promote eco-friendly laminate material

• b. Capacity expansion

• c. Balancing sales and production, flexible inventory adjustment and active cash management

• ii. Operating strategy

• a. 5G infrastructure servers and switch laminate materials continue to be introduced into high-end HDI processes, and EMC has stabilized its top three material suppliers in the infrastructure market.

• b. The substrate material is an extension of its own substrate material technology. It has been mass-production and shipped, and its quality has been recognized by customers. It will continue to develop this market.

• c. To maintain lion’s share in high end HDI segment.

• d. To penetrate into LEO market, aggressively seize the growth of market share.

• e. To develop laminate material for high end vehicle market.

• iii. Sales volume target

• a. Expected sales volume target:

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Copper clad laminates (CCLs): 43 million sheets/year Prepreg (PP): 960 thousand rolls/year Mass Lam (M/L): 1.05 million panels/year

III. Effects from changes in competitions, regulations, and business environment on the future development strategy of the company

i. Future development strategy of EMC:

• a. To develop high speed/ high frequency and low loss materials

• b. To solidify the leading position of EMC’s materials consumed by HDI PCBs in the global market.

• c. Enlarge offshore market, diversify risks.

ii. Perfectness of Internal control, enhance management efficiency

iii. Effects from changes in competitions, regulations, and business environment:

Due to the outbreak of Covid-19 in those two years, the company and all sites have been strictly following the quarantine protocol to make sure that the company still operates on the track.

Looking forward, although the overall economic environment is full of uncertainties, technological innovation is still the only way for enterprises to grow. The requirements for the speed and quality of information transmission are getting higher and higher, and the trend of enterprise product specification upgrades will not change. The market share in server and switch products has increased generation by generation with the launch of new generations of products; 5G mobile phone shipments will continue to grow due to the rapid increase in penetration rate. EMC continues to improve self-competitiveness and has a positive view toward the future operating prospects.

Chairman: Dong Ding-Yu President: Guan En-Xiang Director of Accounting Department: Sara Yen

*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

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2. Year 2022 financial statements

1. Balance Sheet of year 2021 and 2022

2. Income statement of year 2021 and 2022

3. Statement of changes in Equity of year 2021 and 2022

4. Statement of cash flow of year 2021 and 2022

The full financial reports prepared and audited by KPMG can be viewed and downloaded at the company website: - https://www.emctw.com/en global/report/index; or at the website of MOPS operated by the Taiwan Stock Exchange: http://mops.twse.com.tw

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2.Review report by the Audit Committee

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*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

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3.Information of employees’ compensation and Directors’ remuneration in Year 2022

Unit: NT$ Dollar

Unit: NT$ Dollar Year 2022 Earnings before tax, employee's compensation, $ 5,763,857,571 and Directors' remuneration Accumulated losses - Distributable earnings to employees and Directors Employees' compensation (3% of the distributable $ 172,915,727 earnings) Directors' remuneration (0.65% of the distributable $ 37,465,074 earnings)

The said employees’ compensation and Directors’ remuneration will be distributed in cash.

4. Year 2022 earnings distribution cash dividend situation report

1. In accordance with Article 36 of the company's articles of association, if all or part of the dividends and bonuses distributed by the company or the statutory surplus reserve and capital reserve are distributed in cash, the board of directors shall be authorized by two-thirds or more of the directors. The meeting shall be attended by more than half of the directors present, and shall be reported to the shareholders' meeting.

2. The total amount of cash dividends for the year 2022 earnings distribution is NT$2,829,805,542, and NT$8.5 is distributed per share, calculated up to yuan, and rounded up; the total amount of abnormal payments is included in other income of the company.

3. This proposal was approved by the board of directors on February 23, 2023, and authorized the chairman to set another ex-dividend base date, distribution date and other related matters. When the total share counts changes, impacting the outstanding shares, the chairman is also authorized to deal with it in accordance with the company law or other relevant laws and regulations.

5. Year 2022 fund raising corporate bonds report

Name of Bond: Elite Materials Co., Ltd.'s fifth domestic unsecured conversion of corporate bonds. Use of funds: purchase of real estate, factory buildings and repayment of bank loans. Total denomination issued: NT$3,465,300,000.

Issue date: April 25, 2022. Expiration date: April 25, 2027

Duration: 5 years Coupon rate: Fixed 0%

*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

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Approval Items

1. To accept the Year 2022 business report and financial statements

The Board of Directors proposes and recommends that each shareholder vote FOR the acceptance of the Year 2022 business report and financial statements.

Explanatory Notes:

• i. EMC’s Year 2022 business report and financial statements, including balance sheet, income statement, statement of changes in shareholders’ equity, and statement of cash flows, have been resolved to accept by the board meeting in February 23[rd] , 2023, and have been examined by and determined to be correct and accurate by the Audit Committee of EMC. We thereby submit this report.

• ii. Please approve the aforesaid business report and financial statements

2. To approve the proposal for distribution of 2022 profits

The Board of Directors proposes and recommends that each shareholder vote FOR the distribution of 2022 profits.

Explanatory Notes:

• i. Net income of year 2022 is NT$ 5,072,874,461.

Elite Material Co., Ltd. Profit Allocation Proposal of Year 2022

	Unit: NTD
Beginning of 2022, unappropriated earnings.	8,272,685,499
Plus:
Other (actuarial adjustment of defined benefit)	15,789,158
Net income of 2022	5,072,874,461
Special reserve of earnings	354,619,195
Less:
10% legal reserve	508,866,362
Earnings available for distribution as of 31 December 2022	13,207,101,951
Distribution items:
Cash dividends to common share holders (Cash dividend per common share is calculated based on a total number of shares outstanding of 332,918,299)	2,829,805,542
Total distribution	2,829,805,542
Unappropriated earnings	10,377,296,409

Note:

The priority of earnings distribution is unappropriated earnings of 2022.

Chairman: Dong Ding-Yu President: Guan En-Xiang Director of Accounting Department: Sara, Yen

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Extemporary motion:

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APPENDIX

I. Articles of Incorporation of Elite Material Co., Ltd.

As last amended on 26 May 2022

Chapter 1. General Provisions

Article 1 The Company is duly incorporated under the provisions of the Company Act of the Republic of China, and shall be called “台光電子材料股份有限公司” and “ ELITE MATERIAL CO., LTD. ” In English.

Article 2 The Company’s businesses are as follows:

• 1) CC01080 Manufacturing of electronic components

• 2) CB01020 Manufacturing of business machines

• 3) CC01110 Manufacturing of computers and the peripherals

• 4) C801010 Basic chemical industry

• 5) C801990 Manufacturing of other chemical materials

• 6) C901990 Manufacturing of other non-metallic mineral products

• 7) F401010 International commerce

• 8) ZZ99999 Except where permits are required, to run operations not forbidden or limited by laws and regulations

• Article 3 The Company may, where it businesses require, provide guarantee subject to approval of the Board of Directors. Article 4 When the Company is required to invest in another company and become a limited liability partner, the total

• amount of all investment shall not exceed the limit of 40 percent of the share capital received under Article 13 of the Company Law, and the relevant transfer of investment shall be handled by resolution of the Board of Directors.

• Article 5 The headquarters of the Company is located in Taoyuan City, and may, depending on the actual needs of domestic and foreign appropriate locations to set up branches.

• Article 6 Deleted.

Chapter 2. Shares

• Article 7 The Total Capital of the Company is set at NT$6 billion, divided into NT$600 million of shares, NT$10 per share, and unissued shares shall be issued by the Board of Directors in sub-issues at a later date as necessary. Out of the above total capital amount, One Hundred and Fifty Million New Taiwan Dollar (NT$150,000,000) shall be divided into 15,000,000 shares of NT$10 each, to be issued as stock options for employees to subscribe.

• Article 7-1 The Company may issue employees’ stock options with an exercise price lower than the prevailing market price of the ordinary shares, provided such issue is approved by a resolution of the Shareholders’ Meeting, and the resolution shall be made with more than half of the total amount of shareholders with issued share present, and with the agreement of more than two third of the agreement of the shareholders present. The issue of the employees’ stock options can be carried out at different stages within one year effective from the day proposal resolved by the Shareholders’ Meeting.

• Article 7-2 Should the Company buy back shares, it may resell those shares to employees at an price lower than the average buy-back price, provided, the resell shall be approved by a resolution at the upcoming Shareholders’ Meeting, and the resolution shall be made with more than half of the total amount of shareholders with issued share presented, and with the agreement of more than two third of the agreement of the shareholders presented.

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• Article 8 Shares issued by the Company may be exempted from being printed, but should be contacted with the TDCC for stock registration.

• Article 8-1 Deleted.

• Article 9 The company's stock affairs are handled in accordance with the " Regulations Governing the Administration of Shareholder Services of Public Companies " and other relevant laws and regulations.

• Article 10 Deleted.

• Article 11 Deleted. Article 12 Deleted.

• Article 13 Registration of share transfer shall be closed within sixty (60) days prior to General Shareholders' Meeting, or within thirty (30) days prior to Extraordinary Shareholders' Meeting or within five (5) days prior to the record date on which Company distributes the dividends or bonuses.

Chapter 3. Shareholders’ Meeting

• Article 14 The Company’s Shareholders’ Meeting is divided into two types: ordinary and extraordinary meetings. The ordinary meeting is convened at least once every year in compliance with the regulation within six months after the end of the every fiscal year. The extraordinary meeting shall be convened when necessary.

• While the company holds the shareholders' meeting, it may be carried out by video conference or other ways announced by the central authority.

Article 15 The procedure and execution matters at the Shareholders’ Meeting are the following:

• 1) Formulation and amendment of the Articles of Incorporation.

• 2) Election of Directors.

• 3) The review and examination of the reports prepared by the Board of Directors and the auditing report prepared by the Audit Committee.

• 4) The decision to increase or decrease capital.

• 5) Resolution to allocate earnings and dividends.

• 6) Resolution of other important matters.

• Article 16 Notices of General Shareholders' Meeting shall be in writing and delivered to the shareholders along with a public notice thirty (30) days before the General Shareholders' Meeting and fifteen (15) days before the Extraordinary Shareholders' Meeting. The said notices shall specify the date, place and reasons for calling the Shareholders' Meeting.

• Article 17 Unless otherwise stipulated by the Company Act, a quorum shall be present at the Shareholders' Meeting if shareholders representing more than half of the shares issued by the Company are in attendance, and resolutions at the said assembly shall be passed if approved by a majority of the shareholders in attendance. Pursuant to the regulations of the competent authority, the Company’s shareholders may exercise the voting right via electronic transmission, and shall be deemed to have attended the said shareholders' meeting in person. Matters about electronic voting shall comply with all relevant laws and regulations. When the number of shareholders present does not constitute the quorum prescribed in this article, but those present represent one-third or more of the total number of issued shares, a tentative resolution may be passed by a majority of those present. A notice of such tentative resolution shall be given to each of the shareholders, and reconvene a Shareholders' Meeting within one month. In the aforesaid meeting of shareholders, if the tentative resolution is again adopted by a majority of those present who represent one-third or more of the total number of issued shares, such tentative resolution shall be deemed to be an officially approved resolution.

• Article 18 Except in the circumstances set forth in Article 179 of the Company Act, a shareholder shall have one voting power in respect of each share in his/her/its possession.

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• Article 19 When a shareholder entrusts an agent to attend a shareholders' meeting, he shall issue a power of attorney issued by the Company, which shall be delivered to the Company five days before the shareholders' meeting, and a shareholder shall issue a power of attorney and entrust one person to a limit. Where the power of attorney is duplicated, it shall prevail to the person who served first, but the principal before the declaration is revoked shall not be limited to this limit. Except for a trust business or a share transfer agency and registrar approved by the securities authority, when a person is entrusted by two or more shareholders at the same time, the voting power of his agent shall not exceed three percent of the total number of shares issued, and his voting power shall not be calculated if it exceeds that amount. The method of entrusting shareholders to attend shall, unless otherwise provided in the Company Law, be handled in accordance with the Rules on the Use of Power of Attorney by TDCC to attend shareholders' meetings.

• Article 20 During the shareholders' meeting, except Company Law and these Articles of Association, it shall be handled in accordance with the rules of procedure of the shareholders' meeting of the Company.

• Article 21 The resolutions of the shareholders' meeting shall be made into a meeting minutes, signed or sealed by the Chairman, and distributed to the shareholders within 20 days after the meeting. The minutes shall record the year, month, day, place, name of the Chairman and the method of resolution of the meeting, and shall record the keys of the proceedings and their results, and shall be kept in the Company with the signature sheet of the shareholders present and the power of attorney for the attendance of the agent. The distribution of the minutes shall be made in such a manner of public announcement.

Chapter 4. Directors

Article 22 The Company has seven to nine directors, all of which are appointed by the Shareholders' meeting with a capacity for conduct. Of the aforementioned directorships, there shall be at least three independent directors and no less than 1/5 of board seats.

• Article 22-1 In compliance with Article 14-4 of Securities and Exchange Act, the Company shall establish the Audit Committee comprising of all Independent Directors. The Committee, to substitute Supervisors, shall perform the duties specified in the Company Act, the Securities and Exchange Act, and other laws and regulations. Matters about members, powers and authorities, and other relevant functional procedures of the Audit Committee shall comply with relevant laws, regulations, and the Company’s Articles and Procedures. The rules of organization of the Audit Committee shall be established otherwise by the Board of Directors.

• Article 23 The respective appointments of Directors are for a period of 3 years. They may be reappointed following their re-election. In case no election of new Directors is effected after expiration of the term of office of existing directors, the term of office of out-going Directors shall be extended until the time new Directors have been elected and assumed their office. However, the competent authority may, ex officio, order the company to elect new directors within a given time limit; and if no re-election is effected after expiry of the given time limit, the out-going directors shall be discharged ipso facto from such expiration date.

• Article 24 The authorities that the Board of Directors may exercise and the business it may conduct are as follows:

• 1) Resolve to propose amendment of the Articles of Incorporation and to approve important procedures and rules.

• 2) To approve the establishment and abolition of business branch(es).

• 3) The approval of annual financial budget, the examination of financial statements, and the review, supervision and implementation of the annual business plan.

• 4) Resolve to propose earnings distribution, loss make-up, capital increase, or capital reduction.

• 5) Resolve to approve the investment on other businesses by the Company, and the acquisition of equity shares of others.

• 6) To appoint and discharge the certified public accountants of the Company.

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• 7) To propose the transfer of the right of dien, selling, rental, pledge, mortgage or any other action to the whole or material parts of the Company’s property or business.

• 8) To approve the financing application from, providing guarantee to, make acceptance payment to, make capital lending to or borrowing from financial institutions and any other third parties with a total amount of NT$ Twenty Million or more. When the total dollar amount is less than NT$ Twenty Million for the aforesaid business activities, the person-in-charge may execute in advance; however, shall report to the most upcoming meeting of the Board of Directors. Any monetary payment for a single purpose shall not be divided and made directly to avoid the examination of the Board of Directors.

• 9) To approve the capital expenditure, being included in the annual budget, of which the total amount is NT$ Fifty Million or more and the capital expenditure, not being included in the annual budget, of which the total amount is NT$ Ten Million or more. For capital expenditure of which the total amount is more than NT$ Five Million and less than NT$ Ten Million, the person-in-charge may make the payment in advance; however, shall report to the most upcoming meeting of the Board of Directors. Any capital expenditure payment made for a single purpose shall not be divided and made directly to avoid the examination of the Board of Directors.

• 10) To approve the endorsement/guarantee provided and make acceptance payment in the name of the Company, of which the total amount is NT$ Ten Million or more.

• 11) To approve the signing of contracts of which the validness will sustain for one year or more and of which the total contemplated amount is NT$ Fifty Million or more.

• 12) To approve major transactions between the Company and the related parties including affiliated enterprises.

• 13) To hire and dismiss the managerial personal with a level of Vice General Manager or higher for the Company.

• 14) To approve the acquisition, transfer, and authorization of the proprietary technologies, patents, trademarks, and copyrights, and to approve, amend, and terminate the contracts for technology cooperation.

• 15) Other powers and duties being authorized by laws, the Articles of Incorporation, and resolutions of the Shareholders’ Meetings.

• Article 25 The Board of Directors of the Company shall comprise all directors. A Chairman and a Vice Chairman to

• externally represent the Company shall be elected from among the Directors by a majority vote at a meeting attended by over two-thirds of the Directors. The duties and powers of Chairman and Vice Chairman shall comply with laws, the Articles of Incorporation, and resolutions of Board of Directors meetings and Shareholders’ Meetings.

• Article 26 Meetings of the Board of Directors shall be convened in compliance with the Company Act. A written notice of convening meetings shall be given to each Director by mail, fax, or electronic transmission. The Chairman of the Board of Directors shall internally preside the meeting of the Board of Directors. In case the Chairman of the Board of Directors is on leave or absent or cannot exercise his power and authority for any cause, the Vice Chairman shall act on his behalf. Where the Vice Chairman is also unavailable, the Chairman shall appoint a Director to act on his behalf, failing which the Board of Directors shall nominate from among them a person to act on behalf of the Chairman of the Company.

• Article 27 Unless otherwise stipulated by the Company Act, a quorum shall be present at the Board of Directors if it is attended by more than half of the Directors, and a resolution passed if approved by a majority of the Directors in attendance.

• When the number of vacancies in the Board of Directors of a company equals to one third of the total number of Directors, the Board of Directors shall call, within sixty (60) days, a special meeting of shareholders to elect succeeding Directors to fill the vacancies.

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• Article 28 When a Director is unable to personally attend the meeting of the Board of Directors, s/he may entrust another Director to represent her/him with a written proxy and therein the scope of authority with reference to the subjects to be discussed at the meeting is stated. A Director may accept the appointment to act as the proxy referred to in the paragraph of one other Director only. In case a meeting of the board of directors is proceeded via visual communication network, then the directors taking part in such a visual communication meeting shall be deemed to have attended the meeting in person.

• Article 29 Deleted.

• Article 30 Deleted.

• Article 31 The remunerations of Chairman, Vice Chairman, and Directors who conduct the Company businesses are authorized the Board of Directors to determine, with reference to the levels of similar domestic and international industries.

• Article 32 Upon the request of the Board of Directors, managerial personnel may attend meetings of the Board of Directors. Except Directors, attendees of meetings of the Board of Directors may not have voting rights.

• Article 32-1 Liability insurance programs covering the Chairman, the Vice Chairman, and each Director may be purchased by the Company.

Chapter 5. Managers

• Article 33 The Company may have managerial personnel. The appointment, dismissal, and compensation of managerial personnel shall comply with Article 29 of the Company Act.

• Article 34 The President and General Managers of the Company shall not do anything for himself/herself/themselves or on behalf of another person that is within the scope of the company's business.

Chapter 6. Accounting

• Article 35 At the end of fiscal year of the Company, the Board of Directors shall in accordance with law furnish 1) business reports; 2) financial statements; 3) profits distribution or loss makeup proposal and various documents and statements, and the same shall be submitted for approval at the General Shareholders' Meeting.

• Article 36 The distribution of dividends shall take into consideration the changes in the outlook for the Company's businesses, the financial situation and the return on shareholders’ equity that have an impact on future capital needs and taxation. Dividends shall be distributed at the ratio as set forth in these Articles of Incorporation aimed at maintaining the stability of dividend distributions. Save for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required, when distributing dividends, the cash dividends shall not be less than twenty per cent (20%) of the aggregate sum of dividends distributed in the same year. During the year losses occur, the Company may choose not to pay dividends.

• Apart from paying all its income taxes in the case where there are profits at the end of the year, the Company shall make up for accumulated losses in past years. Where there is still balance, ten per cent (10%) of which shall be set aside by the Company as legal reserve. The Company shall also set aside certain portion of the profits as special reserve as required by Article 41 of the Securities and Stock Exchange Act, or by resolutions of Shareholders’ Meetings.

While the Company distributes earnings to the shareholders, the paid-out amount shall be more than ten per cent (10%) but less than seventy per cent (70%) of the distributable earnings, which equals to earnings realized after deducting legal, special and all other required reserves, but together with undistributed profits from previous years.

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Depending on the business operating results, the earnings to be distributed to shareholders shall be proposed by the Board of Directors, and submitted to the Shareholders’ Meeting and decided by the resolution from in the Shareholder’s Meeting.

Dividends distributed by the company, if paid in cash, are authorized by the board of directors to do so in the presence of more than two-thirds of the directors and with the consent of a majority of the directors, and to report at the shareholders' meeting.

Article 36-1 In case the Company makes profits for the year, three per cent (3%) shall be allocated for the employees compensation, and no more than one point two per cent (1.2%) for the remuneration of Directors. However, in case there are accumulated losses carried on the accounting book of the Company, profits shall be reserved for the make-up of accumulated losses before distribution.

In case shares or cash is distributed as employees’ compensation, those employees can be distributed shall include the employees of affiliated enterprises meeting certain criteria. The distribution method shall otherwise be formed by the Board of Directors.

Chapter 7. Supplementary

Article 37 All matters not covered herein shall be undertaken in accordance with the Company Act of the Republic of China and the other relevant law and regulations.

Article 38 This Charter was amended with the existing provisions (slightly) on February 25, 1992 by unanimous agreement of all the promotors. The 1st to 24rd amendments were the same as current clause (Omitted). The 25th amendment was made on May 26, 2022.

First amendment on March 12th, 1992, Second amendment on January 5th, 1993, Third amendment on July 7th, 1993, Fourth amendment on January 23rd, 1995, Fifth amendment on December 15th, 1995, Sixth amendment on May 17th, 1996, Seventh amendment on May 30th, 1997, Eighth amendment on July 30th, 1997, Ninth amendment on May 28th, 1999, Tenth amendment on May 16th, 2000, Eleventh amendment on May 25th, 2001, Twelfth amendment on June 11th, 2002, Thirteenth amendment on November 12th, 2003, Fourteenth amendment on November 12th, 2004, Fifteenth amendment on June 29th, 2005, Sixteenth amendment on June 15th, 2006, Seventeenth amendment on June 13th, 2007, Eighteenth amendment on June 13th, 2008, Nineteenth amendment on June 16th, 2009, Twentieth amendment on June 14th, 2010, Twenty-first amendment on June 13th, 2012,Twenty-second amendment on June 15th, 2015 Twenty-third amendment on June 13th, 2016, and.Twenty-four amendment on July 1, 2021. Twenty-five amendment on May 26, 2022.

*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

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II. Meeting Rules of Stockholders of Elite Material Co., Ltd.

As last amended on 26 May 2022

1. Purpose: The meeting rules of stockholders (hereinafter as “Rules”) is to specify related matters for the Annual General Shareholders’ Meetings and the Extraordinary Shareholders’ Meetings.

2. Scope of application: General Shareholders’ Meeting and Extraordinary Shareholders’ Meetings.

3. Rules of Procedure:

4. 1) The Company’s Shareholders’ Meeting shall follow these “Rules” unless it is otherwise regulated by law and regulations.

5. 2) A signature book shall be provided for the shareholders who attend the Shareholders’ Meeting for signature, or the shareholders who attend the Shareholders Meeting shall hand in signed attendance cards in replacement of the signature. The number of attending shares shall be calculated with the signature book or the attendance cards. When Shareholders’ Meeting is convened, the voting power of a shareholder may be exercised in writing or by way of electronic transmission, provided, however, that the method for exercising the voting power shall be described in the shareholders' meeting notice to be given to the shareholders if the voting power will be exercised in writing or by way of electronic transmission. A shareholder who exercises his/her/its voting power at a Shareholders Meeting in writing or by way of electronic transmission as set forth in this Paragraph shall be deemed to have attended the said Shareholders' Meeting in person, but shall be deemed to have waived his/her/its voting power in respective of any extemporary motion(s) and/or the amendment(s) to the contents of the original proposal(s) at the said Shareholders' Meeting.

The attendance of the shareholders at the meeting shall be calculated on the basis of shares. The total number of attending shares shall be calculated with the number of shares represented by attendance cards together with the number of shares of which shareholders exercising voting power via the electronic transmission.

• 3) The shareholder’s presence and voting shall be calculated with the number of shares. The total number of attending shares shall be calculated with the number of shares represented by attendance cards together with the number of shares of which shareholders exercising voting power via the electronic transmission.

• 4) The location for Stockholders’ Meeting shall be the Company’s place of business or a place convenient for attendance by stockholders (or by proxies) that is suitable to holding of this meeting. The meeting shall be held between 9:00AM and 3:00PM.

For a Shareholders’ Meeting convened by the Board of Directors, the Chairman of the Board of Directors shall preside at the meeting. If the Chairman of the Board of Directors is on leave or unable to exert the rights, the Vice Chairman of the Board of Directors shall preside instead. If the position of Vice Chairman is vacant or the Vice Chairman is on leave or unable to exert the rights, the Chairman of the Board of Directors shall designate a Managing Director to preside at the meeting. If the position of Managing Director is vacant, the Chairman shall designate a Director to preside at the meeting. If no director is so designated, the Chairman of the meeting shall be elected by the Board of Directors from among themselves.

For a Shareholders’ Meeting convened by any other person having the convening right, he/she shall act as the chairman of that meeting.

• 5) The Company may appoint lawyers, accountants or related personnel to attend the Shareholders’ Meeting.

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The personnel in charge of handling the affairs of the meeting shall wear identification badge or armband.

• 6) The complete processes of the meeting shall be recorded by voice and video recorders and all the records shall be kept by the Company for a minimum period of at least one year.

• 7) The chairperson shall announce starting of the meeting when the attending stockholders (or proxies) represent more than half of the total shares issued in public. The chairperson may announce postponement of meeting if the legal quorum is not present after the designated meeting time. Such postponement is limited to two times and the aggregated postponed time shall not exceed one hour. If quorum is still not present after two postponements but the attending stockholders (or proxies) represent more than one third of the total shares issued in public, tentative resolution/s may be passed with respect to ordinary resolution/s by a majority of those present, according to Paragraph 1 of Article 175 of the Company Act.

According to Article 174 of the Company Act, after proceeding with the aforesaid tentative resolutions, the chairperson may put the tentative resolutions for re-voting over the meeting if and when the shares represented by the attending stockholders (or proxies) reached the legal quorum.

• 8) If the Shareholders’ Meeting is convened by the Board of Directors, the agenda shall be designated by the Board of Directors. The meeting shall proceed in accordance with the designated agenda and shall not be amended without resolutions.

If the meeting is convened by person, other than the Board of Directors, having the convening right, the provision set out in the preceding paragraph shall apply mutatis mutandis.

Except with stockholders’ resolution, the chairperson shall not declare adjournment of the meeting before the first two matters set out in the agendas (including extemporary motions) are concluded.

When the meeting is adjourned by resolution, the stockholders shall not elect another chairperson to continue the meeting at the same location or another venue. During the meeting, if the chairperson declares adjournment of the meeting in violation of the Rules, a new chairperson may be elected by a resolution to be adopted by a majority of the voting rights represented by the shareholders attending the said meeting to continue the proceedings of the meeting.

• 9) The stockholders (or proxies) shall complete statement slip setting out the number of his/her attendance card, name and statement brief before speaking, and the chairperson will designate the order in which each person is to speak during the session.

No statement will be considered to have been made if the stockholder (or proxies) merely completes the statement slip without speaking at the meeting. If there are any discrepancies between the content of the statement slip and the speech made, the statement to be adopted shall be the statement confirmed.

When a stockholder (or proxy) is speaking, other stockholder (or proxy) shall not interrupt without consent of the chairperson and the speaking stockholder (or proxy). Any disobedient of the preceding rule shall be prohibited by the chairperson.

• 10) For the same proposal, each person shall not speak more than two (2) times. The lasting period for the said person to speak each time shall be limited to 5 minutes. The chairperson may restrain stockholders (or proxies) from speaking if that stockholders (or proxies) speak overtime, speak beyond the allowed frequency or content of the speech is beyond the scope of the proposal.

• 11) When a juristic person is a stockholder, only one representative shall be appointed to attend the meeting. If more than two representatives were appointed to attend the meeting, only one representative is allowed to speak for the same proposal.

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• 12) After speaking by the attending stockholder (or proxy), the chairperson may reply in person or assign relevant officer to reply.

• 13) Over the proposal discussion, the chairperson may conclude the discussion in a timely manner and where necessary announce discussion is closed. For proposal in which discussion has been concluded or closed, the chairperson shall submit it for voting.

• 14) The personnel responsible for overseeing and counting of the votes for resolutions shall be appointed by the chairperson. The person responsible for vote overseeing shall be of the stockholder status. The results of voting shall be reported on the spot and kept for records.

• 15) During the meeting, the chairperson may at his/her discretion declare time for break.

• 16) In regards to the resolution of proposals, unless otherwise provided for in the relevant law and regulation or Company’s Articles of Incorporation, resolution shall be passed by a majority of the voting rights represented by the stockholders (or proxies) attending the meeting.

When proposals are put to vote, the Chairman may decide to adopt to vote-by-case, or vote at one or different stages and counted respectively for each of the items (including the election).

• 17) If there are amendments or substitute proposals for the same proposal, the sequence of which to be put to vote shall be decided by the chairperson. If one of the two proposals has been approved, the other shall be deemed rejected without requirement to put it to vote.

• 18) The chairperson may maintain the meeting order by instructing the security guards. The security guards shall wear the armband for identification when helping maintaining the venue order.

• 19) The Rules herein take effect after approval at the Shareholders’ Meeting, the same applies for any amendments.

*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

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III. Current shareholding of Directors and Independent Directors

				Book closure date: 2 April 2023	Book closure date: 2 April 2023	Book closure date: 2 April 2023	Book closure date: 2 April 2023
Position	Name of persons or companies	Date elected	Term (Years)	Shareholding when elected		Current shareholding
				Share	%	Share	%
Chairman	Dong, Ding-Yu	26 May 2022	3	5,265,766	1.58	5,265,766	1.58
Vice Chairman	Yu Chang Investment Co., Ltd. Representative appointed: Tsai,Fei Liang	26 May 2022	3	25,471,477 447,244	7.65 0.13	25,471,477 500,244	7.65 0.15
Director	Yu Chang Investment Co., Ltd. Representative appointed: Lee,Wen Shiung	26 May 2022	3	25,471,477 0	7.65 0.00	25,471,477 0	7.65 0
Director	Hsieh, Mon Chong	26 May 2022	3	0	0.00	0	0.00
Independent Director	Shen, Bing	26 May 2022	3	0	0.00	0	0.00
Independent Director	Cheng, Duen-Chian	26 May 2022	3	0	0.00	0	0.00
Independent Director	Chen, Hsi-Chia	26 May 2022	3	0	0.00	0	0.00

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