HAIKWANG - AGM Information 2024 | FinancialReports.eu

Stock Code:2038

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HAI-KWANG ENTERPRISE CO., LTD

Handbook for the 2024 Annual Meeting of Shareholders

Meeting Time: June 25, 2024 at 10:00 am

Meeting Place: 3F CONFERENCE ROOM, NO. 12, YEN HAI 2ND ROAD, XIAOGANG DISTRICT, KAOHSIUNG, TAIWAN, R.O.C.

Meeting Type: Physical Meeting

This meeting agenda of English version is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

HAI-KWANG ENTERPRISE CO., LTD

2024 Annual Shareholders’ Meeting Table of Contents

Meeting Procedure _______ 2 Report Items ________ 3 Proposal Items _______ 4 Discussion Items _______ 5 Extempore Motions ________ 5 Adjournment _______ 5 Attachments: Attachment 1: Year 2023 Business Report _____ 6 Attachment 2: Year 2023 Audit Committee’s Review Report ___ 13 Attachment 3: Comparison Table of Amendments to Corporate Governance Best Practice Principles _______ 14 Attachment 4: Independent Auditors’ Report and Financial Statements __ 18 Attachment 5: Year 2023 Profit Distribution Table ______ 38 Attachment 6: Comparison Table of Amendments to Articles of Incorporation _ 39 Appendix: Appendix 1: Articles of Incorporation(Before Amendment) _____ 40 Appendix 2: Rules of Procedure for Shareholder Meetings ___ 45 Appendix 3: Shareholdings of All Directors ________ 50

HAI-KWANG ENTERPRISE CO., LTD

Agenda for the 2024 Annual Meeting of Shareholders

Time: 10:00 a.m. on Tuesday, June 25, 2024

Place: 3F Conference Room, No. 12, Yen Hai 2nd Road, Xiaogang District,

Kaohsiung, Taiwan, R.O.C.

Meeting Type: Physical Meeting

Meeting Procedure:

I. Call Meeting to Order

II. Chairman’s Opening Remarks

III. Report Items

Year 2023 Business Report
Audit Committee’s review report on the 2023 Financial Statements
Report on Employees’ and Directors’ Remuneration for Year 2023
The Amendments of the Company's ‘Corporate Governance Best Practice Principles’

IV. Proposal Items

2023 Financial Statements
Proposal on the Distribution of 2023 Earnings

V. Discussion Items

The Amendments of the Company's ‘Articles of Incorporation’

VI. Extempore Motions

VII. Adjournment

Report Items

Year 2023 Business Report

Description: Please refer to Appendix 1 for the 2023 Annual Business Report

Audit Committee’s review report on the 2023 Financial Statements
Description: The audit committee was urged to read out the Review Report, Please refer to Appendix 2
Report on Employees’ and Directors’ Remuneration for Year 2023
Description: 1. Pursuant to the Company Act and Article 23 of the Articles of Incorporation, when the Company makes a profit for the year, 2-3% shall be allocated as compensation to employees and the board of directors shall decide if the distribution is in stock or cash. The recipients will be employees of the affiliated companies that meet certain conditions. The remuneration to directors shall not be higher than 3% of the balance and allocated in cash by the board of directors. The employees’ and directors’ remuneration shall be reported in the shareholders’ meeting. However, if the company has accumulated losses for the year, the compensation amount shall be reserved in advance, and the appropriation for both directors and employees will be in accordance of the preceding paragraph.
2.The company’s net income after tax for the Year 2023 was 53,315,768 NTD, it recognized 1,934,479 NTD as compensation to employees, and 1,934,479 NTD as compensation to directors. The appropriation would be paid in cash form.
3.This item was reviewed and approved by the Compensation Committee on March 12, 2024 and submitted to the Shareholders’ meeting according to the company act.
The Amendments of the Company's ‘Corporate Governance Best Practice Principles’
Description: In order to comply with the revisions of relevant regulations, revisions of the Company’s “Corporate Governance Code of Practice” have been proposed. A comparison table of the before and after provisions is attached, as shown in Appendix 3.

Proposal Items

Item One: (Proposed by the Board of Directors)

Subject: 2023 Financial Statements

Explanation: The company’s 2023 Business Report (please refer to Appendix 1 for details) and

Financial Statements (please refer to Appendix 4 for details) have been submitted to the Audit committee for review and approval, and submitted to the 2024 Annual Shareholder’s meeting for approval.

Resolution:

Item Two: (Proposed by the Board of Directors) Subject: Proposal on the Distribution of 2023 Earnings

Explanation: 1. The company’s unappropriated earnings at the beginning of the year amounted to 271,325 Thousand NTD, the net income after tax in 2023 was 53,316 Thousand NTD, coupled with a pension actuarial loss of 861 Thousand NTD and a 10% allocation of statutory surplus reserve amounting to 5,246 Thousand NTD, . the dividends for the year was 318,534 Thousand NTD.

Due to huge capital expenditure requirements, no distributable dividends will be allocated for the year. The company’s dividend distribution plan was reviewed and approved on the 4[th] meeting of the Company’s 19[th] Annual Meeting of Shareholders. Please refer to Appendix 5 for the proposed Profits Distribution Table.

Resolution:

Discussion Items

Item One: (Proposed by the Board of Directors)

Subject: The Amendments of the Company's ‘Articles of Incorporation’ Explanation: In accordance with the company’s operational requirements, some provisions of the company’s Articles of Incorporation have been amended, a comparison table of the before and after provisions is attached, as shown in Appendix 6.

Resolution:

Extempore Motions:

Adjournment

【Attachment 1】

HAI-KWANG ENTERPRISE CO., LTD

Year 2023 Business Report

Ladies and Gentlemen, Shareholders:

In 2023, the Company sold 462,700 tons of rebar, a decrease of nearly 9.5% from the previous year. Our net operating revenue was NT$9.257 billion, a 15.53% decrease from last year. However, our net profit was NT$53 million, a 75% decline from the NT$210 million earned in 2022. Due to the expectation that China’s economic recovery after the pandemic would boost the consumption of steel in early 2023, steel prices have risen month on month since the fourth quarter of 2022 up to the first quarter of 2023. However, various economic indicators in China fell short of expectations and with the continued rise in interest rates, steel prices began to gradually fall since the second quarter of 2023. Meanwhile, steel production costs have gradually increased due to rising electricity costs and stricter environmental regulations, which have squeezed steel bar profits, leading to a quarter by quarter decline in annual earnings.

Looking positively in 2024, positive factors including slowing inflation,, aninterest rate cut by the FED due to the US economy’s soft landing, stimulus measures in China, the normalization of industrial inventories, driving the recovery in global trade and production activities, and the growth in emerging technologies like AI, is driving manufacturer investments, expansion un factories and Taiwan government spending on public projects. The above mentioned factors are expected to boost Taiwan’s imports, exports and investments, leading the GDP growth rate to exceed 3% in 2024;

As far as the steel industry in concerned, the second half of 2023 was expected to be the low point for Taiwan’s steel industry. With the above-mentioned factors, a potential recovery in the steel industry was expected. However, this expectation was met with uncertainties due to The Russia-Ukraine War, Israel- Hamas War, and other unforeseen uncertainties, rising production costs due to Taiwan’s continuous electricity price increase, EU’s CBAM taking effect and the global net-zero emission goals also increased the cost burden in the steel industry. Based on the aforementioned, it will be increasingly hard to raise international steel prices due to cost pressures with the electric arc furnace processing that reflect the increase in electricity prices.

Due to the slow recovery in the economic, the overall demand is slow and sales growth for steel bars is limited, especially with the peak in domestic housing prices. Since the first half of 2023, the number of newly issued building permits and new housing have begun to decline. The Steel bar market in 2024, although public projects and factory expansion might boost consumption, with the influence of counteracting forces, will likely show flat price increases or a slight decline in volume.

The Business Results, Production and Market Situation in 2023 is shown below:

1. Business Results

1.The company’s profitability analysis is shown below Unit:NT$ Thousand

	2023	2022	Change (%)
Net Revenue	9,257,244	10,959,584	-15.53%
Operations Costs	8,942,830	10,611,016	-15.72%
Gross Profit (Loss)	314,451	348,172	-9.68%
Operating Expenses	151,132	154,105	-1.93%
Net Operating Profit (Loss)	163,319	194,067	-15.84%
Non-operating Income (expense)	(102,705)	70,688	-245.29%
Net income (loss) before tax	60,614	264,755	-77.11%
Net income (loss) after tax	53,316	210,830	-74.71%
Net income (loss) per share after tax	0.28	1.11	-74.77%

Note: The information above is the actual financial information of the company.

The Comparison of the Production Situation of the Company is shown below:

Unit: Ten thousand tons

			Unit: Ten thousand	Unit: Ten thousand
	Steel Rebar Output		Small Steel Billet Output
	2023	2022	2023	2022
Taiwan	657.7	626.8	823.1	879.4
Hai Kwang	43.95	49.87	28.82	30.32
Percentage	6.68%	7.96%	3.50%	3.45%

Source: Hai Kwang Group, Iron and Steel Workers Union

3.The Market Situation is as follows Unit: Ten thousand tons

	Steel Bar Sales	Steel Bar Sales	Estimated Consumption (Note)	Estimated Consumption (Note)	Exported Amount	Exported Amount
	2023	2022	2023	2022	2023	2022
Taiwan	724.95	687.44	656.19	621.55	5.31	5.31
Hai Kwang	46.27	51.13	46.27	51.13	0	0
Percentage	6.38%	7.4%	7.05%	8.2%	0	0

Note: According to the calculation from the Iron and Steel Association, estimated consumption = production + imports - exports

Source: Hai Kwang Group, Iron and Steel Workers Union

2. Income & Expenditure and Profitability Analysis

Item	% Year	% Year	2023	2022
Finance Structure	Debt to Asset Ratio (%)		58.61	57.76
	Long term Debt to Fixed Assets Ratio (%)		189.75	208.81
Profitability Analysis	Return on Assets (％）		1.38	3.1
	Return on Equity (％）		1.45	5.8
	Paid In Capital	Operating Income (Loss) (%)	8.58	10.7
	Equity Ratio (%)	Net income (loss) before tax (%)	3.18	14.6
	Net Profit (Loss) Margin (％）		0.58	1.9
	Earnings Per Share (NTD)		0.28	1.16

Note: The above financial information is the actual results of the company.

3. Research and Development Status

1.EAF Steel Making Plant, chemical energy combustion, transformation of oxygen blowing system, automatic temperature detection, horizontal continuous charging scrap preheating system, electrode control system.

2.Renovation of heating furnaces, rolling mills and transformation of cooling beds. The above mentioned is mainly to adhere to the energy conservation and carbon reduction trend and to improve production efficiency through equipment research.

4. Business Plan Overview

（ 1 ） Business Policy

1.Constantly upgrade the steel making and rolling machinery and optimizing the process, increase production efficiency and recovery rate, minimize material and energy consumption, cut costs, and maximize revenue.

The surface treatment business will collaborate closely with customers to offer a wide range of processes and more cutting edge technologies and solutions for their challenges.

(2) Production and Sales Policy

We do not prioritize to maximize production and sales volume, but we prioritize the timely optimization of inventory levels and order quantities based on market trends to minimize the risk of losses from depreciating inventory.

Stabilize product quality, improve service standards, and customer satisfaction.
Engage in local government projects through direct client collaboration, while also maintaining and strengthening relationships with distributors to reinforce current market position.
Offer a comprehensive range of sizes, including large, medium, and small, while expanding the output and services for cutting and bending.

(3) Impacts from External Competitions, Regulatory Compliance and Macroenvironment

Overall Domestic Business Environment

Overall Economy

In 2023, factors including high interest rates, high inflation and China’s poorer than expected post pandemic economic performance, resulted in an unfavorable global demand for steel products which led to a slowdown in manufacturing in various countries, this was coupled with the expansion of the US-China chip ban, Russia-Ukraine War, and Israel-Hamas War, global politics affected the global economic development and social stability. In Taiwan, the service industry showed an increasing trend after the pandemic and retail, tourism and transpiration industries have performed satisfactorily. However, the global slowdown affected Taiwan’s export and order performance resulting to an impact in corporate investment. This caused Taiwan’s economic growth rate to show continuous decline in the fourth quarter of 2022 up to the first quarter of 2023, and only turned positive starting the second quarter.

Looking ahead to 2024, the global economies is expected to recover. The economic performance of emerging and developing markets is also better than 2023, the global economy is showing a recovery trend, and the IMF’s forecast is for the global GDP growth to reach 2.9% in 2024, which will aid Taiwan’s foreign trade performance to slowly stabilize. Overall, the annual growth rate of Taiwan’s export orders has bottomed out in the last quarter of 2023, and a recovery wave is expected to continue in 2024. According to the latest forecast released by the Taiwan Institute of Economic Research last November 2023, the GDP growth rate in 2024 is 3.15%, an increase of 1.72% from the 1.43% in 2023.

In addition, China’s fourth quarter of 2023 average daily crude steel production and social inventory has been declining month on month, Europe has also closed down 7 blast furnaces one after the other, the effects in production cuts are more evident, and the reduction in supply will help restore the supply and demand balance in the steel market.

At the same time, the United States’ demand for downstream steel products is strong, the Taiwan government is actively progressing a number of infrastructure and public projects. The public construction budget in 2024 will reach NTD 588.6 Billion, hitting a record high, future plans are continuously being carried out, real estate buying momentum has picked up steadily, high technology company’s factory construction has started, and the construction industry has shown great improvement. This will drive the demand for steel bars, steel sections and other building materials. Last October 2023, the World Steel Association increased the forecasted growth rate of global steel in 2024 to 1.9%, with the demand increasing by 34.6 million tons as compared to 2023.

Looking ahead to 2024, with the investment in manufacturing activities significantly picking up, and demand for emerging technologies and net zero emissions continue to increase, and with the interest rate hikes in Europe and United States slowing down, the global steel market performance is expected to better than last year. However, the uncertain circumstances with the Israel-Hamas War, Russia-Ukraine War, and political risks in the Middle East, coupled with the EU CBAM global net zero emissions taking into effect, steel production costs will likely increase.

Demand Analysis

Public Construction

According to the data from the National Development Council, the public construction budget in the last 5 years are: NTD 365 Billion in 2019, NTD 437.8 Billion in 2020, NTD 501.3 Billion in 2021, NTD 431.8 Billion in 2022, NTD 587 Billion in 2023, and the proposal for 2024 is NTD 588.6 Billion. The public construction budget continued to grow and the government continued strengthen implementation of public construction in order to stabilize economic activity.

Real Estate Market

In 2023, the domestic real estate market showed a pattern of diminishing volume reaching the lowest level in the past four years. However,the first and second half performance of the year was very different, displaying a dip then a jump in trend. The first half of the year was slow, but starting from the second half of the year, the buying momentum of the domestic real estate market picked up, with the help of the preferential youth home loan programs and a buying surge at year end, the housing market slowly stabilized for own use and investment, causing the overall housing market to decrease. Under this circumstance, as show below, the Taiwan Economic Research Institute's business cycle test chart for the construction industry shifted from “pessimistic” from the first quarter of 2023 to “confidently improving” from the second to fourth quarters, reflecting a housing market trend that was initially low and then high. However the residential market in 2024 still remained in recession, with the previously mentioned factors, such as the anti-speculation policies, mortgage interest rates exceeding 2%, and weaker than expected domestic economy, causing the residential market to be less booming than in 2022.

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Chart: Overview of the trend of the business cycle by the Taiwan Economic
Research Institute
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Source：Taiwan Economic Research Institute Database，December 2023

Supply Analysis

The steel industry is domestic demand-oriented, 100% supplied by Taiwan Steel Mills. The land area required to put up a new steel mill is more than 10,000 square meters, and because

land is expensive and limited, the new supply in the steel industry is all from the existing steel mills’ increase in production by replacing the old ones with the new ones and by efficiency improvements. This means that the production capacity for new steel is limited each year. In recent years, the main factors that affected the supply was due to the imbalance in the price and volume of small international steel bars. The market was penetrated with many cheap small steep bars which led to price competition after importation of a large amount of processed single rolling mills. For example, in the past year, because of the Russian-Ukraine War, Russian steel exports were banned in Europe and the United States, and were instead sold to other countries at low prices. The interest rate difference for Taiwan Steel Mills to purchase Russian semifinished products is big, which caused a large increase in the import of semi-finished products. The single rolling mill increased its utilization rate and has accepted orders at lower prices. If the Russia-Ukraine War continues, the domestic market will still continue to be populated with lower-priced Russian semi-finished products. To mitigate this risk, the company has reduced the proportion of company produced steel to minimize the pressure from single rolling mills.

External Competitions

The southern market for steel bars was shut down three years ago due to a single rolling mill’s financial crises, improving industry order. However in 2023, another competitor over the production of small steel bard and placed them back on the market. Small steel bars are short in supply in the southern market, so the impact after reinvestment is small.

Regulatory Compliance

As Taiwan is moving towards net zero emissions by 2050, the trend that there is a price to pay for carbon emission is becoming clearer. Since 2024, public projects was first to be required to disclose carbon emissions. In the future, steel manufacturers who want to acquire public projects must reduce carbon emissions, otherwise, they won’t be allowed to bid for government projects. According to the Climate Change Law, it is expected that starting 2024, the annual carbon gas emissions fee will be included in the calculation, and will start to be collected in 2025.

In the future, there will be carbon tariffs, carbon tax, particularly, the European Union has already taken its lead in implementing these carbon tariffs and taxes. Although the company has no Europe exports and is not directly affected, with the influence of the carbon tariffs and taxes being imposed, and the need for disclosure of carbon footprint in public projects, and equipment investments to improve energy consumption, the carbon costs that will be passed on to steel will only get higher and higher, the green inflation effect is becoming more obvious, International prices of coal, iron ore, aluminum, nickel, copper, tin, zinc, manganese, cobalt, lithium, and other metals have shown to withstand adversity in the current global economic downturn. It can be seen clearly that the environmental protection and energy costs needed in the mining process are gradually increasing. With the trend of carbon reduction, the costs for steelmaking will also gradually increase and major steel mills in Taiwan, China, Japan and South Korea have announced that the goal in the future is to replace existing blast furnaces to electric furnaces for steel making, therefore, this trend will cause a tighter supply in scrap steel, electrode rods, Silicon Manganese and Ferrovanadium alloys needed for electric furnaces. Taiwan’s structure for electricity consumption is transforming, the proportion of nuclear and thermal power generation is slowly

decreasing, and instead the proportion for renewable energy power generation is increasing, causing the price of electricity to also increase, while putting the cost pressure on electric furnace steel mills.

In summary, due to the shortage in scrap steel supply, rising electricity costs, environmental protection costs, it will be difficult to increase the prices of steel bars, but the real estate buying momentum is taken into view conservatively, factories, shopping malls and public projects are expected to continuously grow. It is expected that Taiwan’s steel consumption will be stable at around 5.9 million tons in 2024.

The Company’s Future Development Strategy

The company’s 2024 Operational and Development Strategies will focus on the following key items:

(1) In accordance with the country’s goal of net zero carbon emissions by 2050, aside from the completion of the carbon inventory and assurance, steel mills, electroplating, heat treatment, baking paint continue to improve the electricity and natural gas consumption.

(2) Reduce the waste, and water waste from steel rolling meals and surface treatment business, and increase recycle and reusing.

Thanks to our shareholders for the continued interest and support. Wishing you all good health and prosperity.

Chairman： Huang, Wei-Han General Manager ： Huang, Tsan-Ming Accounting Officer ： Yang, Chien-Chang

【Attachment 2】

HAI-KWANG ENTERPRISE CO., LTD Year 2023 Audit Committee’s Review Report

The Board of Directors has prepared the Business Report, Financial Statements(including consolidated Financial Statements) and earning distribution proposal for the year ended December 31, 2023.

Certified Public Accountants of Deloitte Taiwan, Wang, Zhao-Qun and Wu, Zhang-Jun, have completed the audits and have issued an audit report.

The above-mentioned business report, financial statements and earning distribution proposal have been reviewed and determined to be correct by the Audit Committee.

We hereby submit this report in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

HAI-KWANG ENTERPRISE CO., LTD Convener of the Audit Committee: Guo, Shi-Xian March 12, 2024

【Attachment 3】

- HAI KWANG ENTERPRISE CO., LTD Rules of Corporate Governance Best Practice Principles (Comparison Table Before and After Amendment)

	Current Articles	Explanation
Article 3-1 First Principle Items related to Corporate Govern- ance in the preceding paragraph should at lease include the following: (1) Handle board of directors and shareholder matters in accordance with the law. (2) Prepare minutes for board of di- rectors and shareholders’ meetings (3) Assist directors in taking office and continuing education. (4) Provide the directors and the audit committee with the needed infor- mation to operate the business. (5) Assist directors and the audit committee to comply with the regu- lations. (6) Report to the board of directors the review results of whether the qualifications of independent direc- tors at the time of their nomination, election and during their term of of- fice comply with relevant regula- tions. (7) Handle matters related to changes in directors. (8) Other matters as stipulated in the company’s articles of incorporation, etc.	Article 3-1 First Principle Items related to Corporate Govern- ance in the preceding paragraph should at lease include the following: (1) Handle board of directors and shareholder matters in accordance with the law. (2) Prepare minutes for board of direc- tors and shareholders’ meetings (3) Assist directors in taking office and continuing education. (4) Provide the directors and the audit committee with the needed infor- mation to operate the business. (5) Assist directors and the audit com- mittee to comply with the regulations. (6) Other matters as stipulated in the company’s articles of incorporation, etc.	In accordance with the Corporate Governance 3.0 -Sustainable Devel- opment Roadmap”, legal compliance matters with regards to the qualifica- tions of independent di- rectors (including candi- dates and current direc- tors_ need to be incorpo- rated into corporate gov- ernance function; in addi- tion, to strengthen the corporate governance function, the handling of director changes will be included, and the sixth and seventh paragraphs are added respectively.
Section 2 Corporate Governance Relation- ship between the Company and Related Persons.	Section 2 Corporate Governance Relation- ship between the Company and Related Businesses.	In accordance with legal amendments. Considered that the content in this section not only includes the corporate governance relationship with the company and related businesses, but also the management of business dealings with related per- sons, this section was re- vised.
Article 17 Where the company has financial business dealings or trade with	Article 17 Where the company has business	In accordance with legal amendments. 1. Amended first item.

affiliated companies or shareholders, it shall formulate written regulations on mutual financial and business-related operations based on the principle of fairness and reasonableness. For those with signed contract, the price conditions and payment methods should be clearly defined, and irregular transactions and improper transfer of benefits should be avoided. The written regulation’s content in the preceding paragraph shall in- clude: the procedures for purchase of transactions, acquisition and disposal of assets, capital loans, endorsement guarantees, and other transactions. Major relevant transactions should be submitted to the board of directors for approval and should be approved or reported to the shareholders’ meet- ing.	dealings with affiliated companies, it shall formulate written regulations on mutual finan- cial and business-related operations based on the principle of fairness and reasonable- ness. For those with signed contract, the price conditions and payment methods should be clearly defined, and irregular transaction should be avoided. Transactions or contracts between the company and related parties and shareholders should also be handled in accordance with the preceding paragraph, and transfer of benefits is strictly prohibited.	The current provisions only regulate the dealings between the company and its affiliated compa- nies and should formulate written regulations. In or- der to strengthen the company’s management of affiliated company transactions, written reg- ulations should be formu- lated between the com- pany and affiliated companies or shareholder. In addition, the scope of affiliated companies originally includes related businesses. The current second item will be merged and moved to the first item, and this section was revised. 2. Paragraph 2 is added, to clarify the written reg- ulations in the preceding paragraph, management procedures for relevant transactions, major trans- actions should be submit- ted to the board of direc- tors for approval and should be approved or re- ported to the sharehold- ers’ meeting.
Article 20 The company's board of directors should be accountable to the shareholders’ meetings, ensure the operations and arrangements of its corporate governance system and that the board of directors exercises its powers in accordance with laws and regulations, the company's articles of incorporation, or resolutions of the shareholders' meeting. The structure of the board of directors of the company shall determine the appropriate number of directors with more than five members based on the company's business	Article 20 The company's board of directors should be accountable to the shareholders’ meetings, ensure the operations and arrangements of its corporate governance system and that the board of directors exercises its powers in accordance with laws and regulations, the company's articles of incorporation, or resolutions of the shareholders' meeting. The structure of the board of directors of the company shall determine the appropriate number of directors with more than five members based on the company's business development scale and the shareholding status of major shareholders,takinginto	In accordance with legal amendments. In order to promote diversity among the board members, Ad- hering to international trends, it is recommended that female directors should account for 1/3 of the directors composi- tion.

development scale and the shareholding status of major shareholders, taking into account the needs of practical operations. Diversity should be considered in the composition of the board of directors and an appropriate diversification policy should be drawn up based on its own operations, business model and development needs, which should include but not limited to the following 2 major standards: 1. Basic Conditions and Values: Gender, Age, Nationality, Culture, etc. Among which, the ratio of female directors should be 1/3 of the total directors. 2. Professional knowledge and skills: Professional background (law, accounting, business, finance, marketing or technology), professional skills, industry experience, etc. The members should have the nec- essary knowledge. Skills and quali- ties to be able to perform their re- sponsibilities. In order to achieve the ideal goal of corporate governance, the board of directors as a whole should have the following capabili- ties: 1. Operational judgment ability. 2. Accounting and financial analysis skills. 3. Operation Management ability. 4. Crisis handling ability. 5. Industrial knowledge. 6. International market outlook. 7. Leadership. 8. Decision-makingability.	account the needs of practical operations. The members should have the neces- sary knowledge. Skills and qualities to be able to perform their responsi- bilities. In order to achieve the ideal goal of corporate governance, the board of directors as a whole should have the following capabilities: 1. Operational judgment ability. 2. Accounting and financial analysis skills. 3. Operation Management ability. 4. Crisis handling ability. 5. Industrial knowledge. 6. International market outlook. 7. Leadership. 8. Decision-making ability.
Article 29 The first to fourth items are omitted. The company shall refer to the Audit QualityIndicators(AQIs)regularly	Article 29 The first to fourth items are omitted. The company shall regularly (at least	In accordance with legal amendments. To improve audit quality and transparency, “Cor- porate Governance 3.0 -

(at least once a year) evaluate the in- dependence and competency of the appointed CPAs. If the company has not changed its CPAs for seven con- secutive years or if its CPA has been pun- ished or its independence has been compromised, it shall evaluate whether it is necessary to change its accountant and report the result to the board of directors.	once a year) evaluate the independ- ence of the appointed CPAs. If the company has not changed its CPAs for seven con- secutive years or if its CPA has been punished or its independence has been compro- mised, it shall consider whether it is necessary to change its accountant and report the result to the board of directors.	Sustainable Develop- ment Roadmap” pro- motes the use of Audit Quality Indicators (AQIs), the company’s audit committee is en- couraged to use the AQI reference provided by the office when evaluating changes to accountants.
Article 51 This code shall come into effect upon the resolution of the Board meeting on March 20, 2015. The same willy apply to revisions. The first revision was on November 5, 2019. The second revisions was on March 12,2024.	Article 51 This code shall come into effect upon the resolution of the Board meeting on March 20, 2015. The same willy apply to revisions. The first revision was on November 5, 2019.	In accordance with legal amendments.

【Attachment 4】

Independent Auditors’ Report

To HAI-KWANG ENTERPRISE CO., LTD.：

Opinion

We have audited the accompanying financial statements of HAI-KWANG ENTERPRISE CO., LTD. (the “Company”), which comprise the parent company only balance sheets as of December 31, 2023 and 2022, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits entrusted by the Company in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. 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 Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s parent company only financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters for the Company’s parent company only financial statements for the year ended December 31, 2023 are stated as follows：

Authenticity of revenue recgonition

The operating revenue of the Company is mainly from the sales revenue of reinforcing steel bar. As the sales revenue of part of the items grew significantly in 2023, according to regulation of Statement of Auditing Standard, which presumes that there is significant risk in revenue, the authenticity of sales revenue recgonition of the aforementioned specific items is indentified as a key audit matter.

Accounting policies and disclosure information regarding revenue recognition are disclosed in Note 4 and 21 of the Parent Company Only financial statements. The audit procedures for the sales revenue recgonition of the aforementioned specific items implemented are as follows：

18 -
Obtain an understanding and test the effectiveness of internal control related to the authenticity of sales revenue recognition；
Select appropriate samples of specific sales items from sales revenue account, check whether the delivery orders have been signed by customers, verify the record of receiving the payments and check whether the payers are consistent with the sales counterparties, to ensure the authenticity of revenue.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management 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 Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of the parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to 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. Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

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 from on resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the
19 -

reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, we are required to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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 remain solely responsible for our audit opinion.

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

We also provide those charged with governance, with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 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 ended December 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

20 -

The engagement partners on the audits resulting in this independent auditors’ report are Wang, Chao-Chin and Wu, Chang-Jin.

Deloitte & Touche Taipei, Taiwan Republic of China

March 12, 2024

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

21 -

HAI-KWANG ENTERPRISE CO., LTD.

Parent Company Only Balance Sheets December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

Assets Current assets Cash and cash equivalents（Note 4 and 6） Current financial assets at fair value through profit or loss（Note 4 and 7） Current financial assets at fair value through other comprehensive income （Note 4 and 8） Notes receivables（Note 4 and 9） Accounts receivables, net（Note 4, 9, and 27） Other receivables Other receivables－related parties（Note 27） Current tax assets（Note 23） Inventories（Note 4, 5, and 10） Prepayments Other financial assets－current（Note 4, 11, and 28） Other current assets Total current assets Non-current assets Non-current financial assets at fair value through other comprehensive income（Note 4 and 8） Investments accounted for using equity method（Note 4 and 12） Property, plant and equipment（Note 4, 13, 27 and 28） Right-of-use assets（Note 4, 14 and 27） Intangible assets（Note 4） Deferred tax assets（Note 4 and 23） Prepayments for equipment Refundable deposits Net defined benefit assets－non-current（Note 4 and 19） Other non-current assets Total non-current assets Total assets Liabilities and equity Current Liabilities Short-term borrowings（Note 15 and 28） Short-term notes payables（Note 15） Current financial liabilities at fair value through profit or loss（Note 4 and 7） Current contract liabilities（Note 4 and 21） Notes payables（Note 16 and 19） Accounts payables（Note 16 and 27） Other payables（Note 17 and 27） Current provisions（Note 4 and 18） Lease liabilities, current portion（Note 4, 14 and 27） Long-term borrowings, current portion（Note 15 and 28） Other current liabilities Total current liabilities Non-current liabilities Long-term borrowings（Note 15 and 28） Non-current provisions（Note 4 and 18） Deferred tax liabilities（Note 4 and 23） Non-current lease liabilities（Note 4, 14 and 27） Guaranteed deposits received Total non-current liabilities Total liabilities Equity（Note 20） Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity Total liabilities and equity		December 31,2023	December 31,2023	％ 2 - - 2 12 - 3 - 24 1 1 - 45 10 15 29 - - 1 - - - - 55 100 19 10 - 2 1 6 2 - - 3 - 43 14 1 1 - - 16 59 21 4 1 2 3 6 10 41 100		December 31,2022	December 31,2022
		Amount $ 176,075 6,360 38,380 154,423 1,044,931 7,234 300,646 900 2,130,516 96,081 49,194 154 4,004,894 853,786 1,365,764 2,603,774 28,188 6,763 67,515 - 334 726 5,421 4,932,271 $ 8,937,165 $ 1,702,311 849,490 23,784 208,295 52,789 518,365 177,425 24,761 1,114 256,682 1,127 3,816,143 1,241,495 54,000 99,293 27,165 11 1,421,964 5,238,107 1,903,277 384,489 83,168 156,469 323,780 563,417 847,875 3,699,058 $ 8,937,165				Amount $ 167,687 7,970 38,548 92,190 934,843 3,224 150,556 343 2,068,569 266,747 50,115 1,195 3,781,987 858,549 1,474,437 2,384,739 - 6,576 89,707 48,860 104 178 3,989 4,867,139 $ 8,649,126 $ 1,921,169 289,490 23,396 185,290 89,144 475,514 218,965 53,215 - 192,814 1,345 3,450,342 1,325,857 104,822 114,402 - 11 1,545,092 4,995,434 1,812,645 387,863 61,865 156,469 383,260 601,594 851,590 3,653,692 $ 8,649,126		％
								2 - - 1 11 - 2 - 24 3 1 - 44 10 17 28 - - 1 - - - - 56 100 22 3 - 2 1 6 3 1 - 2 - 40 16 1 1 - - 18 58 21 4 1 2 4 7 10 42 100

The accompanying notes are an integral part of the parent company only financial statements.

22 -

HAI-KWANG ENTERPRISE CO., LTD.

Parent Company Only Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars, except EPS expressed in NTD)

Operating revenue（Note 4, 21, and 27） Sales revenue Service revenue Total operating revenue Operating costs（Note 4, 10, 22, and 27） Costs of goods sold Service costs Total operating costs Net gross profit Less：Unrealized gains from sales Add: Realized gains from sales Realized net operating profit Operating expenses（Note 22 and 27） Selling expenses Administrative expenses Research and development expense Total operating expenses Net operating income Non-operating income and expenses （Note 22 and 27） Interest revenue Other revenue Other gains and losses		2023		％ 99 1 100 96 - 96 4 - - 4 1 1 - 2 2 - 1 -		2022
		Amount $ 9,144,056 113,188 9,257,244 8,892,919 49,911 8,942,830 314,414 102 139 314,451 66,658 83,943 531 151,132 163,319 7,707 72,066 $ 9,574 )				Amount $ 10,869,484 90,100 10,959,584 10,570,511 40,505 10,611,016 348,568 396 - 348,172 66,581 87,170 354 154,105 194,067 3,415 47,404 $ 123,870		％
	(							99 1 100 97 - 97 3 - - 3 - 1 - 1 2 - - 1

（continued on next page）

23 -

（continued）

Financial costs Share of losses of subsidiaries accounted for using equity method Total non-operating income and expenses Profit before tax Income tax expenses（Note 4 and 23） Profit Other comprehensive income（Note 19, 20, and 23） Items not to be reclassified into profit or loss Remeasurements of defined benefit plans Unrealized valuation gains and losses from equity instrument investments measured at fair value through other comprehensive income Share of other comprehensive income of subsidiaries accounted for using equity method Income tax related to items of other comprehensive income not to be reclassified to profit or loss Other comprehensive income (net of tax) Total comprehensive income Earnings per share（Note 24） Basic Diluted		2023		％ 1 ) 1) 1) 1 - 1 - - - - - 1		2022
		Amount 84,609 ) 88,295) 102,705) 60,614 7,298 53,316 1,076 ) 3,597 ) 118 ) 215 4,576) $ 48,740 $ 0.28 $ 0.28				Amount 63,596 ) 40,405) 70,688 264,755 53,925 210,830 2,339 106,672 3,339 468) 111,882 $ 322,712 $ 1.11 $ 1.10		％
	( ( ( ( ( ( (		( ( (		( ( (		(	1 ) - - 2 - 2 - 1 - - 1 3

The accompanying notes are an integral part of the parent company only financial statements.

24 -

HAI-KWANG ENTERPRISE CO., LTD.

Parent Company Only Statements of Changes in Equity

For the Years Ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

Balance at January 1, 2022 Appropriation and distribution of 2021 earnings（Note 20） Legal reserve Cash dividends of ordinary shares Profit of 2022 Other comprehensive income of 2022, net of tax Total comprehensive income of 2022 Difference between consideration and carrying amount of subsidiaries acquired（Note 12） Disposal of investments in equity instruments at fair value through other comprehensive income Balance at December 31, 2022 Appropriation and distribution of 2023 earnings（Note 20） Legal reserve Cash dividends of ordinary shares Profit of 2023 Other comprehensive income of 2023, net of tax Total comprehensive income of 2023 Difference between consideration and carrying amount of subsidiaries acquired（Note 12） Balance at December 31, 2023	Ordinaryshares $ 1,812,645 - - - - - - - - 1,812,645 - 90,632 90,632 - - - - $ 1,903,277		Capital surplus $ 386,681 - - - - - - 1,182 - 387,863 - - - - - - 3,374) $ 384,489				Retained earnings	Retained earnings		Total retained earnings $ 660,460 - 271,897) 271,897) 210,830 1,871 212,701 - 330 601,594 - 90,632) 90,632) 53,316 861) 52,455 - $ 563,417	Other equity Unrealized valuation gains and losses from equity instrument investments measured at fair value through other comprehensive income $ 741,909 - - - - 110,011 110,011 - ( 330) 851,590 - - - - ( 3,715) ( 3,715) - $ 847,875		Total equity
					Legal reserve $ 15,995 45,870 - 45,870 - - - - - 61,865 21,303 - 21,303 - - - - $ 83,168		Special reserve $ 156,469 - - - - - - - - 156,469 - - - - - - - $ 156,469	Unappropriated retained earnings $ 487,996 ( 45,870 ) ( 271,897) ( 317,767) 210,830 1,871 212,701 - 330 383,260 ( 21,303 ) ( 90,632) ( 111,935) 53,316 ( 861) 52,455 - $ 323,780
		(						( ( ( ( ( ( (	( ( ( ( (		( ( (	( ( ( (	$ 3,601,695 - 271,897) 271,897) 210,830 111,882 322,712 1,182 - 3,653,692 - - - 53,316 4,576) 48,740 3,374) $ 3,699,058

The accompanying notes are an integral part of the parent company only financial statements.

25 -

HAI-KWANG ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

Cash flows from operating activities Profit before tax Items of income and expense Depreciation expenses Amortization expenses Net gains on financial instruments at fair value through profit or loss Financial costs Interest revenue Dividends revenue Share of losses of subsidiaries accounted for using equity method Loss from disposal and scrap of property, plant and equipment Inventory valuation losses (reversal gains) Increase in provisions Others Net changes in operating assets and liabilities Financial instruments mandatorily measured at fair value through profit or loss Notes receivables Accounts receivables Other receivables (including related parties) Inventories Prepayments Other current assets Net defined benefit assets Contract liabilities Notes payables Accounts payables Other payables Provisions Other current liabilities Net defined benefit liabilities		2023 $ 60,614 224,301 10,918 23,286 ) 84,609 7,707 ) 62,995 ) 88,295 - 28,159 ) 12,610 37 ) 25,284 62,233 ) 110,088 ) 3,896 ) 33,788 ) 170,781 1,041 1,624 ) 23,005 26,959 ) 42,851 43,579 ) 91,886 ) 218 ) -		2022
	( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( (	$ 264,755 213,011 9,822 300,228 ) 63,596 3,415 ) 39,166 ) 40,405 2,036 416 29,422 396 307,472 15,956 81,991 2,910 ) 71,737 ) 183,519 ) 1,752 178 ) 173,118 ) 2,958 24,661 ) 20,306 ) 62,912 ) 424 2,707)

（continued on next page）

（continued）

Cash inflows generated from operations Interest received Interest paid Income taxes refund (paid) Net cash inflow provided by operating activities Cash flows from investing activities Refund of paid-up capital from financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Increase in other receivables－related parties Acquisition of intangible assets Decrease (increase) in other financial assets Increase in other non-current assets Dividends received Net cash outflows provided by investing activities Cash flows from financing activities Increase in short-term borrowings Decrease in short-term borrowings Increase (Decrease) in short-term notes payables Increase in long-term borrowings Repayment of long-term borrowings Repayment of principal of lease liabilities Distribution of cash dividends Disposals of shares of subsidiaries (not resulting in loss of control) Net cash inflows provided by financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period		2023 $ 247,854 7,503 88,734 ) 557) 166,066 1,334 397,357 ) - 230 ) 150,000 ) 2,088 ) 921 10,449 ) 62,995 494,874) 6,859,276 7,078,134 ) 560,000 178,000 198,494 ) 375 ) - 16,923 337,196 8,388 167,687 $ 176,075		2022
	( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( (	$ 149,555 3,126 63,196 ) 267) 89,218 - 242,660 ) 1,491 - 150,291 ) 5,841 ) 2,574 ) 6,907 ) 39,166 367,616) 10,147,307 9,503,185 ) 420,000 ) 1,020,000 662,887 ) - 271,897 ) - 309,338 30,940 136,747 $ 167,687

The accompanying notes are an integral part of the parent company only financial statements.

Independent Auditors’ Report

To HAI-KWANG ENTERPRISE CO., LTD.：

Opinion

We have audited the accompanying financial statements of HAI-KWANG ENTERPRISE CO., LTD. and subsidiaries (the “Group”), which comprise the consolidated balance sheets as of December 31, 2023 and 2022, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company and subsidiaries as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits entrusted by the Company and subsidiaries in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. 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 Company and subsidiaries in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company and subsidiaries’s consolidated financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters for the Company and subsidiaries’s consolidated financial statements for the year ended December 31, 2023 are stated as follows：

Authenticity of sales revenue recgonition

The operating revenue of the Company and subsidiaries is mainly from the sales revenue of reinforcing steel bars. As the sales revenue of part of the items grew significantly in 2023, according to regulation of Statement of Auditing Standard, which presumes that there is significant risk in revenue, the authenticity of sales revenue recgonition of the aforementioned specific items is indentified as a key audit matter.

Please refer to Note 4 and 21 to the consolidated financial statements for the accounting policies and information disclosed of sales revenue recognition. The audit procedures for the sales revenue recgonition of the aforementioned specific items implemented are as follows：

Obtain an understanding and test the effectiveness of internal control related to the authenticity of sales revenue recognition；
Select appropriate samples of specific sales items from sales revenue account, check whether the delivery orders have been signed by customers, verify the record of receiving the payments and check whether the payers are consistent with the sales counterparties, to ensure the authenticity of revenue.

Other Matter

We have also audited the parent company only financial statements of HAIKWANG ENTERPRISE CO., LTD. as of and for the years ended December 31, 2023 and 2022 on which we have issued an unqualified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company and subsidiaries’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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 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 from on resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company and subsidiaries’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company and subsidiaries’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, we are required to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company and subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company and subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We also provide those charged with governance, with a statement that we have complied with relevant ethical requirements regarding independence, and to

communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Wang, Chao-Chin and Wu, Chang-Jin.

Deloitte & Touche Taipei, Taiwan Republic of China

March 12, 2024

Notice to Readers

HAI-KWANG ENTERPRISE CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

Assets Current assets Cash and cash equivalents（Note 4 and 6） Current financial assets at fair value through profit or loss（Note 4 and 7） Current financial assets at fair value through other comprehensive income （Note 4 and 8） Notes receivables（Note 4 and 9） Accounts receivables, net（Note 4, 9, and 28） Other receivables Current tax assets（Note 4 and 23） Inventories（Note 4, 5, and 10） Prepayments Other financial assets－current（Note 4, 11, and 29） Other current assets Costs to fulfill contracts－current（Note 21） Total current assets Non-current assets Non-current financial assets at fair value through other comprehensive income（Note 4 and 8） Property, plant and equipment（Note 4, 13, and 29） Right-of-use assets (Note 4 and 14) Intangible assets（Note 4） Deferred tax assets（Note 4 and 23） Prepayments for equipment Refundable deposits Net defined benefit assets－non-current（Note 4 and 19） Other non-current assets Total non-current assets Total assets Liabilities and equity Current Liabilities Short-term borrowings（Note 15 and 29） Short-term notes payables（Note 15） Current financial liabilities at fair value through profit or loss（Note 4 and 7） Current contract liabilities（Note 4 and 21） Notes payables（Note 16 and 19） Accounts payables（Note 16 and 28） Other payables（Note 4, 17, and 28） Current provisions（Note 4 and 18） Lease liabilities, current portion（Note 4 and 14） Long-term borrowings, current portion（Note 15 and 29） Other current liabilities Total current liabilities Non-current liabilities Long-term borrowings（Note 15 and 29） Non-current provisions（Note 4 and 18） Deferred tax liabilities（Note 4 and 23） Non-current lease liabilities（Note 4 and 14） Guaranteed deposits received Total non-current liabilities Total liabilities Equity attributable to the owner of the parent company（Note 20） Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to the owner of the parent company Non-controlling interests（Note 20 and 25） Total equity Total liabilities and equity		December 31, 2023	December 31, 2023	％ 2 - 1 2 11 - - 23 1 1 - - 41 9 49 - - 1 - - - - 59 100 18 9 - 2 1 6 2 - - 3 - 41 14 1 2 - - 17 58 20 4 1 2 3 6 9 39 3 42 100		December 31, 2022	December 31, 2022
		Amount $ 239,202 25,710 70,532 155,568 1,066,113 7,457 1,478 2,133,980 120,119 82,768 236 2,368 3,905,531 853,786 4,593,478 12,675 6,763 67,515 85 476 726 6,523 5,542,027 $ 9,447,558 $ 1,702,311 849,490 23,784 208,295 64,288 524,974 204,381 24,761 529 271,198 11,626 3,885,637 1,310,462 54,000 226,524 12,199 91 1,603,276 5,488,913 1,903,277 384,489 83,168 156,469 323,780 563,417 847,875 3,699,058 259,587 3,958,645 $ 9,447,558				Amount $ 360,852 26,700 70,840 92,785 953,795 3,349 597 2,072,295 295,684 139,731 1,207 2,619 4,020,454 858,549 4,367,792 - 6,576 89,707 49,602 246 178 6,425 5,379,075 $ 9,399,529 $ 2,011,169 289,490 26,929 185,290 91,226 486,141 318,128 53,215 - 208,297 10,965 3,680,850 1,424,844 104,822 241,633 - 11 1,771,310 5,452,160 1,812,645 387,863 61,865 156,469 383,260 601,594 851,590 3,653,692 293,677 3,947,369 $ 9,399,529		％
								4 - 1 1 10 - - 22 3 2 - - 43 9 46 - - 1 1 - - - 57 100 22 3 - 2 1 5 3 1 - 2 - 39 15 1 3 - - 19 58 19 4 1 2 4 7 9 39 3 42 100

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

HAI-KWANG ENTERPRISE CO., LTD. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars, except EPS expressed in NTD)

Operating revenue（Note 4, 21 and 28） Sales revenue Service revenue Total operating revenue Operating costs（Note 4, 10, 22, and 28） Costs of goods sold Service costs Total operating costs Net gross profit Operating expenses（Note 22 and 28） Selling expenses Administrative expenses Research and development expense Total operating expenses Net operating income Non-operating income and expenses （Note 22） Interest revenue Other revenue Other gains and losses Finance costs Total non-operating income and expenses Profit before tax		2023		％ 98 2 100 95 3 98 2 1 1 - 2 - - 1 - 1) - -		2022
		Amount $ 9,143,337 221,752 9,365,089 8,898,024 214,750 9,112,774 252,315 82,982 119,740 1,210 203,932 48,383 8,383 74,623 8,101 ) 86,003) 11,098) 37,285				Amount $ 10,867,558 177,420 11,044,978 10,570,126 165,780 10,735,906 309,072 82,539 124,704 576 207,819 101,253 4,687 48,711 147,018 63,596) 136,820 238,073		％
	( ( (		(		(		(	98 2 100 96 1 97 3 1 1 - 2 1 - 1 1 1) 1 2

（continued on next page）

（continued）

Income tax expenses（Note 4 and 23） Profit Other comprehensive income（Note 19, 20, and 23） Items not to be reclassified into profit or loss Remeasurements of defined benefit plans Unrealized valuation gains and losses from equity instrument investments measured at fair value through other comprehensive income Income tax related to items of other comprehensive income not to be reclassified to profit or loss Other comprehensive income (net of tax) Total comprehensive income Net profit attributable to： Owners of the parent Non-controlling interests Total comprehensive income (loss) attributable to： Owners of the parent Non-controlling interests Earnings per share（Note 24） Basic Diluted		2023		％ - - - - - - - - - - - - -		2022
		Amount $ 7,298 29,987 1,076 ) 3,737 ) 215 4,598) $ 25,389 $ 53,316 23,329) $ 29,987 $ 48,740 23,351) $ 25,389 $ 0.28 $ 0.28				Amount $ 53,974 184,099 2,339 110,581 468) 112,452 $ 296,551 $ 210,830 26,731) $ 184,099 $ 322,712 26,161) $ 296,551 $ 1.11 $ 1.10		％
	( ( ( ( (				( ( (			- 2 - 1 - 1 3 2 - 2 3 - 3

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

HAI-KWANG ENTERPRISE CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the Years Ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Other equity

Balance at January 1, 2022 Appropriation and distribution of 2021 earnings （Note 20） Legal reserve Cash dividends of ordinary shares Profit of 2022 Other comprehensive income of 2022, net of tax Total comprehensive income of 2022 Difference between consideration and carrying amount of subsidiaries acquired（Note 25） Increase in non-controlling interests Disposals of investments in equity instruments at fair value through other comprehensive income Balance at December 31, 2022 Appropriation and distribution of 2022 earnings （Note 20） Legal reserve Cash dividends of ordinary shares Profit of 2023 Other comprehensive income of 2023, net of tax Total comprehensive income of 2023 Difference between consideration and carrying amount of subsidiaries acquired（Note 25） Balance at December 31, 2023	Ordinaryshares $ 1,812,645 - - - - - - - - - 1,812,645 - 90,632 90,632 - - - - $ 1,903,277		Capital surplus $ 386,681 - - - - - - 1,182 - - 387,863 - - - - - - 3,374) $ 384,489			Retained earnings	Unappropriated retained earnings $ 487,996 ( 45,870 ) ( 271,897) ( 317,767) 210,830 1,871 212,701 - - 330 383,260 ( 21,303 ) ( 90,632) ( 111,935) 53,316 ( 861) 52,455 - $ 323,780	Unrealized valuation gains and losses from equity instrument investments measured at fair value through other comprehensive income $ 741,909 - - - - 110,011 110,011 - - ( 330) 851,590 - - - - ( 3,715) ( 3,715) - $ 847,875		Total $ 3,601,695 - 271,897) 271,897) 210,830 111,882 322,712 1,182 - - 3,653,692 - - - 53,316 4,576) 48,740 3,374) $ 3,699,058	Non-controlling interests $ 309,358 - - - ( 26,731 ) 570 ( 26,161) ( 1,182) 11,600 62 293,677 - - - ( 23,329 ) ( 22) ( 23,351) ( 10,739) $ 259,587		Total equity
					Legal reserve $ 15,995 45,870 - 45,870 - - - - - - 61,865 21,303 - 21,303 - - - - $ 83,168	Special reserve $ 156,469 - - - - - - - - - 156,469 - - - - - - - $ 156,469
		(					( ( ( ( ( ( (	( ( (	( ( ( (		( ( ( ( ( ( (	( ( ( (	$ 3,911,053 - 271,897) 271,897) 184,099 112,452 296,551 - 11,600 62 3,947,369 - - - 29,987 4,598) 25,389 14,113) $ 3,958,645

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

HAI-KWANG ENTERPRISE CO., LTD. AND SUBSIDIARIES Consolidated Statements of Cash Flows

For the Years Ended December 31, 2023 and 2022

(Expressed in thousands of New Taiwan Dollars)

Cash flows from operating activities Profit before tax Items of income and expense Depreciation expenses Amortization expenses Net gains on financial instruments at fair value through profit or loss Financial costs Interest revenue Dividends revenue Loss from disposal of property, plant and equipment Inventory valuation losses (reversal gain) Increase in provisions Net changes in operating assets and liabilities Financial instruments mandatorily measured at fair value through profit or loss Notes receivables Accounts receivables Other receivables Inventories Prepayments Other current assets Costs to fulfill contracts Net defined benefit assets Contract liabilities Notes payables Accounts payables Other payables Provisions Other current liabilities Net defined benefit liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash inflow provided by operating activities		2023 $ 37,285 286,852 12,251 23,920 ) 86,003 8,383 ) 65,276 ) - 28,134 ) 12,610 21,765 62,783 ) 112,318 ) 4,071 ) 33,551 ) 175,680 971 251 1,624 ) 23,005 26,142 ) 38,833 42,148 ) 91,886 ) 661 - 195,931 8,346 93,527 ) 881) 109,869		2022
	( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 238,073 247,035 11,326 299,885 ) 63,596 4,687 ) 40,650 ) 2,456 416 29,422 312,123 15,808 67,432 3,163 ) 73,143 ) 190,236 ) 1,821 461 ) 178 ) 173,118 ) 2,881 18,383 ) 14,511 ) 62,912 ) 356 2,707) 108,711 4,664 67,239 ) 466) 45,670

（continued on next page）

（continued）

Cash flows from investing activities Proceeds from disposal of financial assets at fair value through other comprehensive income Refund of paid-up capital from financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Acquisition of intangible assets Decrease (increase) in other financial assets Increase in other non-current assets Dividends received Net cash outflow provided by investing activities Cash flows from financing activities Increase in short-term borrowings Decrease in short-term borrowings Increase (decrease) in short-term notes payables Increase in long-term borrowings Repayment of long-term borrowings Increase in guaranteed deposits received Repayment of principal of lease liabilities Cash dividends paid Acquisition of equity of subsidiaries Changes in non-controlling interests Net cash inflow (outflow) provided by financing activities Decrease in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period		2023 $ - 1,334 - 527,737 ) - 230 ) 2,088 ) 56,963 10,448 ) 65,276 416,930) 6,889,276 7,198,134 ) 560,000 306,000 357,481 ) 80 217 ) - 14,113 ) - 185,411 121,650 ) 360,852 $ 239,202		2022
	( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( (	$ 1,730 - 15,223 ) 445,548 ) 1,197 24 ) 5,841 ) 42,190 ) 8,011 ) 40,650 473,260) 10,189,807 9,533,185 ) 420,000 ) 1,056,469 690,480 ) - - 271,897 ) - 11,600 342,314 85,276 ) 446,128 $ 360,852

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

【Attachment 5】

HAI-KWANG ENTERPRISE CO., LTD

Profits Distribution Table

Year 2023

According to Article 23 of the Company’s Articles of Incorporation, the company’s unappropriated earnings at the beginning of the period was NTD 271,324,611 and the net income for the year is ，

NTD 53,315,768 (as shown below) after plus the actuarial loss of NTD 860,662, a 10% statutory surplus reserve of NTD 5,245,511 was allocated, and the dividends for the current year amounted to NTD 318,534,206. No shareholder dividends were planned to be distributed this year, and the undistributed dividends at the end of the period was NTD 318,534,206.

Attached below is the Profit Distribution Table prepared by the company:

Unit: NTD

			Unit: NTD
Item	Amount
Unappropriated earnings, beginning balance Add: Net income of 2023 Less: Actuarial Loss for 2023 included in the retained earnings Less: Appropriation for legal capital reserve 10% Distributable earnings for the current period Distribution Items Stock Dividends (NT$0/per share) Unappropriated earnings, ending balance	53,315,768 (860,662) (5,245,511)	$	$271,324,611
			47,209,595
			318,534,206 0 318,534,206
Article 23-1:If the company has recorded earnings in the final reports, it shall be handled in according to the preceding article. After paying taxes as well as making up for accumulated losses according to the law, 10% shall be raised as appropriation for legal capital reserves, and the remaining shall be set aside in compliance with the relevant laws and regulations or appropriated as special reserves. If there is still remaining balance after the aforementioned allocations, it will be combined with the unappropriated earnings, and the board of directors will prepare a profit distribution proposal for distribution of shareholder dividends and submit to the shareholders’ meeting for approval. Due to huge capital expenditure requirements,no shareholder dividends will be allocated thisyear.

Note: With the adoption of IFRS for the first time, the company will transfer the special surplus reserve that is set aside for unrealized revaluation gains and accumulated conversion adjustments (surplus) to retained earnings to compensate for any losses in subsequent years. If there is still remaining surplus, until the reason for allocation the special surplus reserve is resolved, any shortfall should be supplemented and allocated before surplus distribution is made.

【Attachment 6】

- HAI KWANG ENTERPRISE CO., LTD Comparison Table of Amendments to Articles of Incorporation

	Amended Articles	Current Articles	Explanation
Article 23:	If the final annual accounts of the Company show a net profit for a given year, it shall allocate2-5 percentof the net profit as profit- sharing compensation to em- ployees, distributed by the board of directors in stock or cash and not more than 3 percent as profit- sharing compensation to Direc- tors distributed by the board of directors in cash; Distribution proposals and director remunera- tion shall be reported to the shareholders’ meeting. However, if the Company still has any ac- cumulated loss, it shall first set aside the amount to offset the loss before such allocation.	Article 23: If the final annual accounts of the Company show a net profit for a given year, it shall allocate2-3 percentof the net profit as profit-sharing com- pensation to employees, dis- tributed by the board of direc- tors in stock or cash and not more than 3 percent as profit- sharing compensation to Di- rectors distributed by the board of directors in cash; Distribution proposals and di- rector remuneration shall be reported to the shareholders’ meeting. However, if the Company still has any accu- mulated loss, it shall first set aside the amount to offset the loss before such allocation.	In accordance with the company’s operational requirements
Article 27:………。the thirty-fourth amendment was made on June 17, 2020; the thirty- fifth amendment was made on December 29, 2020; the thirty-sixth amendment was made on June 21, 2022； andthe thirty-seventh amendment was made on June 25, 2024.		Article 27:………。the thirty-fourth amendment was made on June 17, 2020; the thirty- fifth amendment was made on December 29, 2020; and the thirty-sixth amendment was made on June 21, 2022.	Update of the revision date

【Appendix 1】

HAI-KWANG ENTERPRISE CO., LTD

Articles of Incorporation

Chapter 1 General Provisions

Article 1: The company is incorporated as a company limited by shares in accordance with the Company Act and is named Hai Kwang Enterprise Corporation.
Article 2: The business scope of the Company is as follows:
CA01010 Iron and Steel Smelt
CA01020 Iron and Steel Rolling and Extruding
CA01030 Iron and Steel Casting
CA01070 Scrapped Car and Boat Dismantling and Scrap Iron and Steel Metal Processing
C901990 Other Non-Metallic Mineral Products Manufacturing
CA02990Other Metal Products Manufacturing
CA01990 Other Non-ferrous Metal Basic Industries
F401010 International Trade
ZZ9999 All business activities that are not prohibited or restricted by law, except those that are subject to special approval.
Article 3: The Company is located in Kaohsiung City. The Company may, if necessary, set up branches domestically and abroad upon the resolution of the Board of Directors. It is also not subject to the provisions of Article 13 of the Company Act wherein reinvestment should not exceed 40% of the paid-in capital. Reinvestment Related Matters should be approved by the Board of Directors.
Article 4: Except for company subsidiaries, the company may not provide endorsement and guarantee.

Chapter 2 Shares

Article 5: The total amount of authorized capital stock of the Company is NTD 3.5 Billion which is divided into 350 Million Shares at a par value of NTD 10 each. The Board of Directors is authorized to issue the shares in multiple installments as needed.
Article 6: The Company issues registered shares. The certificate should be signed or stamped by the directors representing the company, and duly certified by the competent authority. When the Company issues new shares, it may print physical share certificates or may be exempted from printing share certificates. For non-printed stock certificates, it should be registered with a centralized securities depository enterprise for safekeeping and registration.
Article 7: The stock affairs of the company shall be handled in accordance with the Regulations Governing the Administration of Shareholder Services of Public Companies promulgated by the competent authority.

Chapter 3 Shareholders’ Meeting

Article 8: Trading of stocks shall be suspended 60 days prior to the scheduled regular shareholders meeting, 30 days prior to the special shareholders meeting, or 5 days before the company dividend announcement, bonus or other benefits.

Article 9: The Shareholders meetings are comprised of regular and special meetings, where a regular meeting is conducted annually, within six months upon the close of the fiscal year, and convened by the board of directors. Shareholders shall be notified of the date, place and meeting agenda of regular shareholders meetings, 30 days in advance to the regular meeting date; and 15 days in advance to the date of special meetings.
With the agreement of the relevant parties, the notice of the shareholders meeting may be conducted electronically. For shareholders who hold less than 1000 registered shares, the aforementioned notice may be conducted through announcement.
Article 10: If a shareholder is unable to attend a shareholders' meeting due to unforeseen circumstances, a proxy may be appointed to attend by executing a power of attorney issued by the company that specifies the scope of authorization. The regulations for shareholders' proxy attendance shall be handled in accordance with the ‘Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies’ issued by the relevant authorities, aside from that provided in Article 177 of the Company Act.
Article 11: The Chairman shall have the authority to represent the Company and shall chair the of shareholders’ meeting. In case the Chairman is on leave or unable to exercise his duties for any cause, the Chairman shall designate one of the directors to act on his behalf. If someone other than the board of directors convenes the meeting, the person who called the meeting shall appoint the chairman. If there are two or more persons authorized to call the meeting, they shall elect a chairman together.
Article 12: A shareholder of the Company shall have one voting right for each share. Restrictions to the exercise of the above voting rights does not apply to those who are restricted or who have no voting rights in accordance with the Company Act.
Article 12-1: From January 1st, 2018, the Company is included electronic voting as one of the options for exercising voting rights during shareholder meetings. Shareholders who choose to exercise their voting rights electronically will be considered as present in person, and all relevant matters will be handled in accordance with the laws and regulations.
Article 12-2: The Company may hold a shareholder meeting through video conferencing or other methods that have been announced by the competent authorities.
Article 13: Unless otherwise provided by the Company Act, the resolutions of the shareholders' meeting shall require the presence of shareholders representing more than half of the total issued shares, and the approval of more than half of the voting rights represented by the shareholders in attendance. If the number of shareholders in attendance falls short of the required quorum but shareholders representing more than one-third of the total issued shares are present, the resolutions passed shall be considered tentative, and notice of such tentative resolutions shall be given to all shareholders for another meeting to be held within one month. If, at the second meeting, shareholders representing more than one-third of the total issued shares are present and more than half of the voting rights represented by them approve the resolutions, the resolutions shall be considered valid.
Article 13-1: When the company plans to cancel its public stock offering, a shareholders meeting resolution must be submitted, and this provision shall remain

unchanged during both the Stock Market period and the period of listing on the stock exchange.

Article 14: The shareholders meeting minutes shall be recorded, including the date, time, location, summary of the meetings and results, the name of the chairman, the method of resolution, and the number of shareholders present, their shareholdings and voting rights. The record shall be signed or sealed by the chairman and distributed to all shareholders within 20 days after the meeting. The distribution of the record may be done by announcement. The record, along with the attendance sheet and proxy form of the shareholders present, shall be kept by the company in accordance with the provisions prescribed by the Company Act.

Chapter 4 Directors

Article 15: The Company shall appoint 9-12 directors and a candidate nomination system shall be adapted. Shareholders with legal capacity should be elected to serve a term of three year, and may be eligible for re-election. The shareholdings of directors should not be less than a certain percentage of the total shares issues by the company.
Article 15-1: The Company is required to reserve a certain number of seats for independent directors, which shall not be less than three and shall not be lower than one-fifth of the total number of directors. Effective July 1, 2023, if the Chairman and the General Manager or equivalent positions are held by the same person or by spouses or first-degree relatives, the number of independent directors shall not be less than four. The qualifications, shareholding, restrictions, nomination and election procedures, and other matters related to independent directors shall be governed by the relevant regulations of the competent authorities. Independent and non-independent directors shall be elected simultaneously, and the number of seats to be filled by each type of director shall be calculated separately.
Article 15-2: The company shall establish an audit committee in accordance with Article 144 of the Securities Exchange Act. The committee shall be composed of all independent directors and the exercise of their duties and related matters shall be handled in accordance with the Securities Exchange Act and related laws and regulations.
Article 15-3: The company may buy liability insurance for its directors while they hold office, and the extent of coverage must be approved by the board of directors.
Article 16: When one-third of the director positions become vacant or all independent directors are dismissed, the board of directors shall convene a special shareholder meeting within 60 days to elect new directors to fill the vacancies. The term of the newly elected directors shall be limited to the remaining term of their predecessors.
Article 17: The Board of Directors is responsible for organizing the board meetings. A chairman and a Vice Chairman, if necessary, shall be elected by more than twothirds of the directors and with the approval of more than half of the directors present. All company affairs shall be handled in accordance with the laws, regulations, and resolutions of the shareholders' meetings.
Article 18: The company's board of directors resolves important matters and business policies. The first meeting of each term is called by the director who receives the most votes, while the other meetings are called by the chairman. The board should notify all directors at least seven days prior to the meeting, and this can be done

in writing, e-mail or fax. However, in case of emergencies, the board may be called into a meeting at any time. The chairman represents the company to the public, and if the chairman is on leave or is unable to perform his duties, the Vice Chairman acts as a substitute. If there is no Vice Chairman or if he is also on leave or unable to perform his duties, the chairman may appoint a director to act on their behalf, or if the chairman does not appoint a director, the directors may elect one among themselves.

Article 19: In order for a board meeting to proceed, at least two-thirds of the directors must be present. If the directors are unable to attend, a proxy may be appointed to attend by executing a power of attorney specifying the scope of authority and the reason for convening. However, each proxy may only represent one director. Resolutions must be approved by a majority of the directors present, and a record of the resolutions should be signed and sealed by the chairman and attending directors for future reference.
Article 20: Directors may receive compensation or attendance fees when conducting business on behalf of the company. The total amount of compensation for all directors, not including the director remuneration specified in Article 23 of this Articles of Incorporation, can be determined by the Board of Directors within the range of NTD 15 million per year, regardless of the company's profitability, and within the monthly payment standards set by the Board of Directors. For each meeting that directors attend, depending on the necessity, they can be reimbursed up to NTD 20,000 per person for actual expenses.

Chapter 5 Managers

Article 21: The company may appoint several managers. The appointment, dismissal and remuneration thereof shall be handled pursuant to Article 29 of the Company Act.

Chapter 6 Accounting

Article 22: The Company's fiscal year is from 1 January to 31 December for each year. When the fiscal year has closed, the board of directors shall prepare the following statements, submits them for audit 30 days before the shareholders’ meeting and present these statements at the shareholders’ meeting for approval according to the regulations.
Business report.
Financial statements.
Proposals of profit distribution or deficit compensation.
Article 23: If the final annual accounts of the Company show a net profit for a given year, it shall allocate 2-3 percent of the net profit as profit-sharing compensation to employees, distributed by the board of directors in stock or cash and not more than 3 percent as profit-sharing compensation to Directors distributed by the board of directors in cash; Distribution proposals and director remuneration shall be reported to the shareholders’ meeting. However, if the Company still has any accumulated loss, it shall first set aside the amount to offset the loss before such allocation.
Article 23-1: If the company has generated profits for the year, it shall first handle it in accordance with the preceding article, pay taxes and make up for accumulated losses, before allocating 10% of the surplus as legal reserve. The rest shall be allocated in accordance with legal regulations as special reserve. If there is still a balance, it shall be combined with the accumulated undistributed earnings, and the board of directors shall propose a profit distribution proposal and submit it to the shareholders meeting for resolution of shareholder

dividends.

Article 23-2: In addition to the profit distribution proposal mentioned above, employee stock ownership plans, employee stock option certificates, employee new stock subscription rights, and restricted new stock issuance to employees may be used to reward employees, including those who meet certain criteria among employees of parent or subsidiary companies.
The company’s industrial development has matured, and the company’s dividend distribution prioritizes the improvement of the financial structure and the fulfillment of major capital expenditures, while ensuring that no less than 50% of the total dividends distributed in the current year are paid in cash.
Article 23-3: The compensation for all directors is authorized by the board of directors, considering the level of involvement and value of contribution of each Director and by reference to the usual level of such pay in the domestic and international industries. Independent directors may be offered reasonable compensation that differs from that of regular directors. The board of directors is authorized to determine the attendance allowances for the company's directors, following industry standards.
Article 24: When the total amount of the reserves reaches the amount of the company's capital, the company may decide to stop further contributions to the fund by passing a resolution at a shareholders meeting.

Chapter 7 Supplementary Provisions

Article 25: Matters not set forth in the Articles of Incorporation shall be subject to the Company Act and relevant laws and regulations.
Article 26: Rules governing the organization and the procedures of the Company shall be separately stipulated by the resolution of the board of directors.
Article 27: These Rules were established on February 24, 1969; the first amendment was made on May 15, 1972; the second amendment was made on October 27, 1972; the third amendment was made on September 6, 1974; the fourth amendment was made on August 30, 1977; the fifth amendment was made on May 10, 1979; the sixth amendment was made on March 3, 1980; the seventh amendment was made on December 15, 1982; the eighth amendment was made on February 1, 1986; the ninth amendment was made on April 8, 1987; the tenth amendment was made on November 21, 1988; the eleventh amendment was made on September 1, 1989; the twelfth amendment was made on September 18, 1989; the thirteenth amendment was made on March 12, 1990; the fourteenth amendment was made on June 26, 1991; the fifteenth amendment was made on June 2, 1992; the sixteenth amendment was made on June 5, 1993; the seventeenth amendment was made on July 17, 1993; the eighteenth amendment was made on August 30, 1996; the nineteenth amendment was made on July 14, 1999; the twentieth amendment was made on June 28, 2002; the twenty-first amendment was made on June 30, 2004; the twenty-second amendment was made on June 22, 2005; the twenty-third amendment was made on June 29, 2006; the twenty-fourth amendment was made on June 26, 2007; the twenty-fifth amendment was made on April 30, 2008; the twentysixth amendment was made on June 4, 2009; the twenty-seventh amendment was made - -
on June 29, 2010; the twenty eighth amendment was made on June 28, 2011; the twenty ninth amendment was made on April 27, 2012; the thirtieth amendment was made on June 11, 2014; the thirty-first amendment was made on June 23, 2016; the thirty-second amendment was made on June 27, 2017; the thirty-third amendment was made on June 25, 2019; the thirty-fourth amendment was made on June 17, 2020; the thirty-fifth amendment was made on December 29, 2020; and the thirty-sixth amendment was made on June 21, 2022.

【Appendix 2】

HAI-KWANG ENTERPRISE CO., LTD

Rules of Procedure for Shareholders Meetings

The Rules which are established according to Article 5 of Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, shall be followed. The rules of procedures for the Company's shareholder meetings shall be as provided in these Rules.
The company shall include in the meeting notice the time and location for shareholder registration, as well as other matters to be noted. The registration time for shareholders in the preceding paragraph shall be at least 30 minutes before the start of the meeting. The registration location should be clearly stated, and a suitable employee should be assigned to handle it.

Shareholders or their proxies (hereinafter referred to as "shareholders") should attend the shareholders meeting with their attendance certificate, attendance card, or other attendance documents. A proxy solicitor shall also carry an identity document for verification.

The number of shares obtained by the solicitor and the number of shares represented by the authorized proxy in attendance shall be clearly disclosed and compiled in a table by the company on the day of the shareholders meeting created according to the prescribed format.

The company shall provide an attendance book for shareholders to sign when they attend a meeting, or allow them to submit a sign-in card to represent their attendance.

The company will provide shareholders who attend the meeting with a meeting handbook, annual report, attendance certificate, speaker’s slip, ballots, and other related documents. If directors or independent directors are elected, additional election ballot should also be attached. There are no limitations on the number of representatives that can attend on behalf of a government or legal entity shareholder. However, if a legal entity is designated to attend, only one representative may attend.

Unless otherwise specified by law, the board of directors is responsible for convening the shareholders meetings. The attendance and voting at the meeting will be determined based on the shareholder's shares, which will be calculated by adding the shares represented by the attendance book or sign-in card, along with any shares that exercised voting rights through written or electronic means.

The company shall submit the notice of the shareholders' meeting, power of attorney form, proposals for acknowledgment, discussion, and election or dismissal of directors and independent directors, and other relevant materials for the meeting to the Public Information System as electronic files. This should be done either 30 days before the regular shareholders' meeting or 15 days before the special shareholders' meeting. Additionally, the shareholders' meeting manual and supplementary materials for the meeting should be prepared and sent to the public information system as electronic files 21 days before the regular shareholders' meeting or 15 days before the special shareholders' meeting. The manual and supplementary materials must be prepared and displayed 15 days before the meeting for shareholders to request and read at any time. They should also be displayed at the company and its stock transfer office and distributed at the shareholders' meeting.

The place for convening a shareholders meeting shall be inside the premises of the Company, or any other place convenient for the shareholders, and suitable for holding of the said meeting. The time for commencing the said meeting shall not be earlier than 9 a.m. or later than 3 p.m. The place and time shall

be in full consideration of the opinion of independent directors.

The Chairman shall have the authority to represent the Company and shall chair the of shareholders’ meeting. In case the Chairman is on leave or unable to exercise his duties for any cause, it shall be handled in accordance with the company’s articles of incorporation. The shareholders meeting convened by the board of directors should be presided over in person by the chairman,. More than half of the board of directors, including at least one independent director, should also attend in person, along with at least one representative from various functional committees. The attendance of all attendees should be recorded in the shareholders meeting record. If the shareholder meeting is convened by someone other than the board of directors, that person should act as the chairman. If there are two or more people with the right to convene, they should nominate one person to act as chairman.
The Company may designate its lawyer, certified public accountant or other relevant persons to attend the shareholders meeting.
The Company shall document the shareholders meeting by audio or video, and the recorded materials shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recordings shall be retained until the conclusion of the litigation.
The chairman should announce the opening of a shareholders’ meeting at the specified meeting time if the attending shareholders represent more than one-half of the total number of voting shares, and also announce the number of non-voting rights, the number of shares present, and other relevant information. The chairman may declare the meeting postponed only in the event

where attending shareholders represent less than one-half of the total number of voting shares, provided that no more than two postponements may be made and not for a combined total of more than one hour; if the meeting has been postponed twice and the shareholders present still do not represent at least one-third of the total issued shares, the chair shall declare the meeting adjourned.

If the meeting has been postponed twice as stated in the preceding paragraph and if, despite the absence of the legal quorum, shareholders representing at least one-third of the total issued shares are present, a temporary resolution may be adopted with the approval of a majority of the voting rights of the shareholders present in accordance with Article 175, paragraph 1 of the

Company Act, in which case a notice of the temporary resolution shall be given to each shareholder and the shareholders’ meeting shall be convened again within one month. If the number of shares represented by the shareholders present reaches more than one-half of the total number of voting shares before the close of the meeting, the chair may re submit the tentative resolution being adopted to the shareholders’ meeting for voting in accordance with Article 174 of the Company Act.

The agenda of the Meeting shall be set by the Board of Directors if the Meeting is convened by the Board of Directors, and relevant proposals shall be voted on case-by-case . Unless otherwise resolved at the Meeting, the Meeting shall proceed in accordance with the agenda. Unless otherwise resolved at the Meeting, the chairman cannot announce adjournment of the Meeting before all the discussion items (including temporary motions) listed in the agenda are resolved. In the event that the Chairman adjourns the Meeting in violation of these Rules and Procedures, the shareholders may designate, by a majority of votes represented by shareholders attending the Meeting, one person as chairman to continue the Meeting. In order to hold a regular shareholders' meeting, a manual with the procedures must be prepared and all shareholders must be notified at least 30 days in advance. However, for shareholders holding less than 1,000 registered shares, an announcement can be made by posting on the Public Information System at least 30 days in advance.；to hold a special shareholders meeting, all shareholders must be notified at least 15 days

in advance. However, for shareholders holding less than 1,000 registered shares, an announcement can be made by posting on the Public Information System at least 15 days in advance. The reason for convening the meeting shall be specified in the notification and announcement. If agreed by the counterparties, the notification may be delivered electronically.

Appointment or dismissal of directors, supervisors, change in articles of incorporation, reduction of capital, application to suspend public offering, directors non-competition clause, capital increase from public reserve, company dissolution, mergers, splits, or matters listed in Article 185, Paragraph 1 of the Company Act, Article 26-1 and Article 43-6 of the Securities and Exchange Act, Article 56-1 and Article 60-2 of the Guidelines for the Handling of Securities Issuance and Offering by Issuers shall be listed in the notice for convening and may not be proposed by an interim motion. Shareholders may suggest proposals to urge the company to promote the public interest or fulfill its social responsibilities, but such proposals shall be limited to one item in accordance with the relevant provisions of Article 172-1 of the Company Act. If a shareholder proposes more than one item, they shall not be included in the proposal.

The shareholders' meeting has specified the purpose of the meeting, which is the re-election of directors, along with the date of their assumption of office. Once the re-election of directors is completed, the date of their assumption of office cannot be altered through a temporary motion or any other means.

Shareholders who hold over 1% of the total issued shares may submit proposals for the general shareholders' meeting, limited only to one, if there is more than one proposal, these will not be included in the motion. Additionally, if the proposal submitted by a shareholder falls under any of the circumstances listed in Article 172-1, Paragraph 4 of the Company Act, the board of directors may choose not to include it as a proposal for the meeting. The company should make an announcement regarding the acceptance of shareholders' proposal, the place of acceptance, and the acceptance period before the closing of the shareholders' general meeting. The acceptance period shall not be less than ten days. The proposal are limited to 300 words, and those that exceed this limit will not be considered. The proposing shareholder or their proxy should attend the general meeting in person to participate in the discussion of the proposal.

The company must notify the shareholders who proposed the motions of the results before the notice date of the shareholders' meeting. The proposals that comply with this article will be included in the meeting notice. If any shareholder proposals are not included, the board of directors must provide reasons for not including them at the meeting. The total number of issued shares for voting on resolutions of the shareholders' meeting shall not include the shares held by non-voting shareholders. Shareholders who have a vested interest in matters that may harm the company's interests may not vote or exercise their voting rights on behalf of other shareholders. The number of shares for which voting is not allowed in the previous paragraph will not be counted as the number of voting rights of shareholders present.

Except for a trust enterprise or a stock affairs agency approved by the competent securities authority, the voting rights of an individual who is entrusted by two or more shareholders at the same time shall not exceed 3% of the total number of issued shares, and the excess voting rights shall not be counted.

Before a shareholder can speak at a shareholders’ meeting, a shareholder shall submit a speaker's slip specifying thereon the shareholder account number (or meeting attendance card number), account name of the shareholder, and the subject of speech. The chairman shall determine the order of speaking for each such shareholder. A shareholder who has not spoken at a meeting despite the submission of a speaker's slip shall be deemed to not have spoken. If the content of a shareholder's speech does not correspond to that specified on the speaker's slip, the spoken content shall prevail. When a shareholder is giving a speech, the other shareholders shall not interrupt unless they have obtained prior consent from the Chair and the said shareholder, and the Chair shall prevent such violations.

A shareholder shall not speak more than two times for the same proposal, unless he has obtained prior consent from the Chairman, and each speech shall not exceed five minutes. If a shareholder violates the above provisions or his speech exceeds the scope of the motion, or disrupts the order of the meeting, the Chairman may terminate the speech, and other shareholders may request the Chairman to do so.
If a legal entity shareholder is authorized to attend the shareholders' meeting, it can only appoint one representative to attend. If a legal entity shareholder designates multiple representatives to attend the shareholders' meeting, only one person may speak on the same proposal.
After the speech of a shareholder, the chairman may respond in person or appoint an appropriate person to respond.
The chairman shall provide complete explanations and allow for sufficient discussion on proposals, amendments or special motions put forward by shareholders. Once the chairman deems that the proposals have reached the level that they can be voted on, he may stop the discussions, initiate voting, and arrange sufficient time for voting.
For agenda items put to vote by a poll, the chairman shall designate multiple ballot inspectors and ballot counters to discharge all relevant tasks, provided that only shareholders may be appointed as ballot inspectors. The vote on agenda items, and the counting of ballots in an election listed on the agenda, shall be conducted in a public place on the site of the relevant shareholders’ meeting. After the counting is completed, the results will be announced immediately, and the weights shall be recorded. When a general shareholders meeting is called by the company, voting rights can be exercised through written or electronic means. The notice of meeting should specify the method of exercise for such voting. If a shareholder exercises their voting rights in writing or electronically, it will be considered equivalent to attending the shareholders' meeting in person. However, abstention from voting shall be assumed In the case of a temporary motion of the shareholders' meeting or an amendment to the original motion,
After the shareholders exercise their voting writes in writing or electronic form, if the shareholder wishes to attend the shareholder meeting in person, he must withdraw the declaration of intention to exercise voting rights stated in the previous paragraph in the same manner as exercising voting rights, two days prior to the meeting. If the voting rights have been exercised through written or electronic means, and a proxy is authorized with a power of attorney to attend the meeting, then the voting rights executed by the proxy shall prevail.

For those who exercised the right to vote in writing or electronic form, their declaration of intent should be delivered to the company two days before the shareholders meeting. This rule does not apply to those who have already expressed their intention before the revocation of the declaration.

The Chairman may call for breaks during the meeting when appropriate. If a force majeure event occurs, the chairman may decide to suspend the meeting and, having regard to the circumstances, announce the time for the resumption of the meeting. If the venue of a shareholder's meeting becomes unavailable for use before the conclusion of all agenda items (including extraordinary motions), the shareholders at the meeting may resolve to continue the meeting at another venue.
A shareholders’ meeting may, by a resolution made under Article 182 of the Company Act, be adjourned to or resumed on a date within the next five days.
Unless otherwise provided by the Company Act and the company's Articles of Incorporation, the voting of proposals shall be passed by the positive vote of more than half of the voting rights of the shareholders present. When voting, the chairman or his designated representative should announce the total voting rights of the attending shareholders for each proposal, and the shareholders should vote on each proposal.

The results of the shareholders' approval, objection, and abstention should be entered into the Public Information System on the same day as the shareholders' meeting.

If there is amendment to or substitute for a proposal, the chairman shall decide the sequence of voting for such proposal, the amendment or the substitute. If any one of them has been adopted, the others shall be deemed vetoed and no further voting is necessary.
During the election of directors and independent directors at the shareholders meeting, the company's relevant election rules should be followed. The results of the election should be announced immediately, which should include the list of elected directors and independent directors along with the number of votes received, as well as the list of unsuccessful directors and the number of votes they received.

The election votes as described in the preceding paragraph should be sealed and signed by the competent authority and shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recordings shall be retained until the conclusion of the litigation.

The minutes of the meeting for the shareholders meetings’ resolutions should be prepared, signed or sealed by the chairman, and distributed to all shareholders within 20 days after the meeting. The preparation and distribution of the minutes can be done electronically.

The distribution aforementioned can be entered into the Public Information System by means of an announcement,

The minutes of the meeting shall be accurately recorded, indicating the year, month, day, location, name of the chairman, resolution method, matters discussed, and voting results (including weights). If there were director and supervisor elections, the number of votes received by each candidate shall be disclosed. The meeting minutes shall be preserved permanently throughout the existence of the company.

The Chair may direct the proctors (security personnel) to help maintain order at the meeting place. 23. All matters not covered by these Rules shall be subject to the provisions provided by the Company Act, the Securities and Exchange Act, other applicable laws or regulations, or the Corporation's Articles of Incorporation.
These Rules, and any amendment hereto, shall take force after approval at a shareholders’ meeting.
These Rules were established on March 12, 1990; the first amendment was made on June 25,1998; the second amendment was made on June 28,2002; the third amendment was made on June 28,2006; the fourth amendment was made on April 13,2007; the fifth amendment was made on June 26,2007; the sixth amendment was made on June 28,2011; the seventh amendment was made on April 27,2012; the eighth amendment was made on June 7,2013; the ninth amendment was made on June 17,2020; the tenth amendment was made on July 29,2021.

【Appendix 3】

HAI-KWANG ENTERPRISE CO., LTD Shareholdings of All Directors

As of: April 27, 2024

										Shares held in	Shares held in
						Shares held in share register		Shares held by spouse and
				Sh hld li d						the name of
		Election		ares e at e	cton ate	on the book closing date		children
										others
Position	Name	Date	Term
										Shareholdin	%
				Shareholdings	%	Shareholdings	%	Shareholdings	%
										gs



	Huang, Wei-		3

Chairman	Han	112.6	Years	1,896,315	1.05	1,991,130	1.05	0	0	0	0



	Yu Zhan
			3
	Investment	112.6		2,004,726	1.11	1,986,962	1.04	0	0	0	0
			Years
Deputy	Co Ltd
	Representati
Director
	ve:	112.6	3	1,445,512	0.80	1,436,787	0.75	2,349,551	1.23	0	0
	Wu, Yong-		Years
	Ci
Director	Liu, Ming-	112.6	3	1,175,755	0.65	1,234,542	0.65	5,603,063	2.94	0	0
	Tan		Years
	You Ming
			3
	Investment	112.6		12,806,326	7.06	13,446,642	7.06	0	0	0	0
			Years
Director	Co Ltd
	Representati
	ve: Huang,	112.6	3	0	0	0	0	0	0	0	0
			Years
	Can-Ming

	Hai Ming
	Investment			41,344,074	22.81	43,411,277	22.81	0	0	0	0
	Co Ltd		3
Director	Representati	112.6
			Years
	ve:			0	0	0	0	0	0	0	0
	Hung, Guo-

	Yu
	Hai Ming
	Investment			41,344,074	22.81	43,411,277	22.81	0	0	0	0
Director	Co Ltd		3
	Representati	112.6	Years
	ve: Chen,			0	0	0	0	0	0	0	0
	Shi-Cheng
Independent	Yang,	112.6	3	0	0	0	0	0	0	0	0
Director	Chang-Xi		Years
Independent	Guo, Shi-	112.6	2 Years	0	0	0	0	0	0	0	0
Director	Xian
Independent	Chen, Bo-	112.6	3	0	0	0	0	0	0	0	0
Director	Zhong		Years
Independent	Huang,		3
		112.6		0	0	0	0	0	0	0	0
Director	Min-Gong		Years

Note: In accordance with the ‘Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies’, if the company's paid-in capital falls between NTD 1 billion and NTD 2 billion, the total number of registered shares held by all directors should not be less than 7.5%, and if there are more than 2 independent directors, the shareholding ratio of all directors except independent directors should be reduced to 80% according to the ratio in the preceding paragraph. The table above displays the number of shares held by individual directors and all directors recorded in the shareholder register as of April 27, 2024. As of that date, the company's total paid-in capital was NTD 1,903,277,480, which was divided into 190,327,748 shares. The minimum number of shares required to be held by all directors was 11,419,664 shares (7.5%*80%=6%). As the company has an audit committee, there is no minimum shareholding requirement for supervisors.

AI assistant

HAIKWANG — AGM Information 2024

51961_rns_2024-07-08_8ab43482-1d1c-466e-995f-89977e96690d.pdf

HAI-KWANG ENTERPRISE CO., LTD

2024 Annual Shareholders’ Meeting Table of Contents

HAI-KWANG ENTERPRISE CO., LTD

Agenda for the 2024 Annual Meeting of Shareholders

I. Call Meeting to Order

Report Items

Proposal Items

Discussion Items

Extempore Motions:

Adjournment

HAI-KWANG ENTERPRISE CO., LTD

Year 2023 Business Report

Ladies and Gentlemen, Shareholders:

1. Business Results

2. Income & Expenditure and Profitability Analysis

3. Research and Development Status

4. Business Plan Overview

（ 1 ） Business Policy

(2) Production and Sales Policy

(3) Impacts from External Competitions, Regulatory Compliance and Macroenvironment

Overall Domestic Business Environment

Overall Economy

Demand Analysis

Public Construction

Real Estate Market

Supply Analysis

External Competitions

Regulatory Compliance

The Company’s Future Development Strategy

- HAI KWANG ENTERPRISE CO., LTD Rules of Corporate Governance Best Practice Principles (Comparison Table Before and After Amendment)

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

HAI-KWANG ENTERPRISE CO., LTD.

Parent Company Only Balance Sheets December 31, 2023 and 2022

HAI-KWANG ENTERPRISE CO., LTD.

Parent Company Only Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

（continued）

HAI-KWANG ENTERPRISE CO., LTD.

Parent Company Only Statements of Changes in Equity

HAI-KWANG ENTERPRISE CO., LTD.

（continued）

To HAI-KWANG ENTERPRISE CO., LTD.：

Opinion

Basis for Opinion

Key Audit Matters

Authenticity of sales revenue recgonition

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

HAI-KWANG ENTERPRISE CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2023 and 2022

HAI-KWANG ENTERPRISE CO., LTD. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2023 and 2022

（continued）

HAI-KWANG ENTERPRISE CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

HAI-KWANG ENTERPRISE CO., LTD. AND SUBSIDIARIES Consolidated Statements of Cash Flows

For the Years Ended December 31, 2023 and 2022

HAI-KWANG ENTERPRISE CO., LTD

Profits Distribution Table

Year 2023

- HAI KWANG ENTERPRISE CO., LTD Comparison Table of Amendments to Articles of Incorporation

HAI-KWANG ENTERPRISE CO., LTD

Articles of Incorporation

Chapter 1 General Provisions

Chapter 2 Shares

Chapter 3 Shareholders’ Meeting

Chapter 4 Directors

Chapter 5 Managers

Chapter 6 Accounting

HAIKWANG AGM Information 2024