GT — Proxy Solicitation & Information Statement 2023

Aug 16, 2023

CHIU TING MACHINERY CO., LTD.

Reference materials for various proposals of the shareholders' meeting in 2023

Report Items

1. 2022 Businss Report. (Please refer to page 5-9)
2. Audit Committee's Review Report. (Please refer to page 10)
3. Reports on 2022 employee compensation and directors' remuneration distribution (please refer to page 11)
4. Report on the Company's indirect investment in Mainland China. (Please refer to page 12)

Proposal Items

Proposal 1Proposed by the board of directors

Proposal: Proposal for the Ratification of 2022 Business Report and Financial Statements.

Explanation: The Board of Directors approved the Company's 2022 Business Report and Financial Statements audited by CPAs of Crowe (TW) CPAs, Huang, Chien-Chen and Lin, Ming-Shou, and the Audit Committee has completed its review and issued the Audit Committee's Audit Report (see pages 13-32).

Resolution:

Proposal 2Proposed by the board of directors

Proposal: Proposal for the Ratification of the 2022 Earnings Distribution Plan.

Explanation:

• • • 1. The Company's after-tax earnings in 2022 was NT$392,238,578. After adding the unappropriated earnings of NT$518,936,202 at the beginning of the period and adding the remeasurement of the defined benefit plan recognized in retained earnings of NT$3,047,400 and deducting the cumulative gain or loss on disposal of equity instruments measured at fair value through other comprehensive income to retained earnings of NT$4,875,000, the Company's distributable earnings amounted to NT$909,347,180.
  • After appropriating 10% of the legal reserve of NT$39,041,098 in accordance with the law and the Company's articles of incorporation, the Company proposes to distribute a cash dividend of NT$163,425,000 to shareholders for 2022. For shareholders on the register of shareholders, based on the shares held by them as at the basis date of dividend distribution, NT$2.5 per share in cash (calculated and rounded up to the nearest dollar; the total amount of the deficiency is included in other income of the Company) will be allotted. Upon the approval of the shareholders' meeting, it is proposed to request the shareholders' meeting to authorize the board of directors to set another base date for dividend distribution, payment date and other related matters. Subsequent changes in the number of outstanding shares due to changes in capital stock, and consequently changes in the dividend distribution rate to shareholders, are proposed to be adjusted by the chairman of the board of directors with the authorization of the shareholders' meeting.
  • Earnings Distribution Table (Please refer to page 33).

Resolution:

Election Matters

Proposal 1Proposed by the board of directors

Proposal: Please conduct the re-election of Directors of the Company

Explanation:

1. The term of office of the directors of the Company will expire on June 18, 2023. We intended to re-elect the directors at this Annual Shareholders' Meeting.
2. In accordance with Article 18 of the Company's Articles of Incorporation, seven directors (including the election of three independent directors) shall be elected at the Annual Shareholders' Meeting for a three-year term commencing on June 13, 2023 and ending on June 12, 2026.
3. In accordance with Article 18 of the Company's Articles of Incorporation, a candidate nomination system was adopted and the "List of Director Candidates" was reviewed and approved at the 16th Meeting of the 8th Board of Directors (see page 34).

Election Results:

Other Discussions

Proposal 1 Proposed by the board of directors

Proposal: Discussion on the release of the non-compete clause for Company’s directors.

Explanation:

1. Article 209 of the Company Act stipulated that a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
2. We proposed to the shareholders' meeting to release such directors from the prohibition of engaging in competing business from the date of their appointment as director or manager of each such peer company.

Resolution:

Extempore Motions