STOCK CODE : 1338

廣華控股有限公司

Hiroca Holdings Ltd.

2024 Annual Report

Notice to readers

This English-version annual report 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 and Chinese versions, the Chinese version shall prevail.

Taiwan Stock Exchange Market Observation Post System:
http://newmops.twse.com.tw
2024 Annual Report is available at: http://www.hirosawa.com.cn
Printed on March 23, 2025

Spokesperson and Deputy Spokesperson:
Spokesperson : Chiu,Shou-Ray, Financial Senior Manager
Tel : +86 769-8927-8888 Email : [email protected]
Deputy Spokesperson : Huang,Chien-Chung, GM
Tel : +86 769-8927-8888 Email : [email protected]

Litigation/non-Litigation agent in the Republic of China
Name : Yu,Che-Ming, Chairman
Tel : 0903119680 Email : [email protected]

Director

Title	Name	First elected	Elected day	Term	Nationality	Resume
Chairman	Yu,Che-Ming	2009.12.08	2024.05.31	3 years	ROC	Representative, Szu Mao Development Limited
Director	Huang,Chien-Chung	2015.06.05	2024.05.31	3 years	ROC	Manager, Changan Ford STA
Director	Chuang,Wu- Chuan	2024.05.31	2024.05.31	3 years	ROC	Section Chief of Technology Department, FONG YUE AUTOMOTIVE PARTS CO., LTD.
Director	Chen,Nai-Rung	2018.05.30	2024.05.31	3 years	ROC	Director, Tung Kai Technology Engineering Co., Ltd
Independent Director	Lin,Shen-Sheng	2021.07.01	2024.05.31	3 years	ROC	Director, Tung Kai Technology Engineering Co., Ltd
Independent Director	Lai,Chia-Yi	2024.05.31	2024.05.31	3 years	ROC	Chairmain, Holdwell Accounting Firm
Independent Director	Chen,Hsu-Yi	2024.05.31	2024.05.31	3 years	ROC	Financial Controller, NCSIST

Address and Telephone Numbers of Company's Headquarter and Factories:

I. Company Name : Hiroca Holdings Limited

II. Operations Headquarters : cum Dongguan Subsidiary

Name : Dongguan Hirosawa Automotive Trim Co., Ltd. Website: http://www.hirosawa.com.cn
Address : No. 6 Nanxing Rd., Houjie Town, Dongguan City, Guangdong Province, 523960, P R China
Tel : +86 769-8927-8888

III. Samoa subsidiaries :

Lofty Success Group Limited Address : Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa TEL : +86 769-8927-8888
Hirogen International Limited Address : Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa TEL : +86 769-8927-8888
Hiroyoshi Investment Limited Address : Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa TEL : +86 769-8927-8888
Yoshisawa Investment Limited Address : Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa TEL : +86 769-8927-8888
Hiroyuki Investment Limited Address : Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa TEL : +86 769-8927-8888
Hirotai Investment Limited Address : Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa TEL : +86 769-8927-8888
Smart Scene Holding Limited Address : Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa TEL : +86 769-8927-8888

IV Other subsidiaries :

Wuhan Hiroyoshi Automotive Trim Co., Ltd.
Address : No. 516, Weihu Road, Hannan District, Wuhan, Hube Province Tel : +86 27 8485-6999

Hunan Hiroyoshi Automotive Trim Co., Ltd.
Address : No. 1 Workshop of Liuyang Hongyi Technology Development Co., Ltd., Yong'an Industrial Manufacturing Base, Yong'a Town, Liuyang City, Hunan Province

Kaifeng Guangjia Automobile Accessories Co., Ltd.
Address : North Middle Section of Longhai Second Road, Kaifeng New District, Kaifeng City, Henan Province Tel : +86 371-2332-1000

Xianyang Hiroyoshi Automotive Trim Co., Ltd.
Address : No. 1, Suzhou, Shenzhen Industrial Park, High Tech Zone, Xiangyang City, Hubei Province Tel : +86 710-2399-7000

Hirosawa Automotive Trim USA Co.
Address : 23135 COMMERCE DR FARMINGTON HILLS MI 48355

Hirotai Automotive Trim Sa De Cv
Address : VILLAS DE LAS ROSAS #106-A, COL. VILLAS BUGAMBILIAS, LEON, GUANAJUATO, MEXICO

Dongguan Hiroca Automotive Trim Technology Co., Ltd.
Address : No. 6 Nanxing Rd., Houjie Town, Dongguan City, Guangdong Province, 523960, P R China Tel : +86 769-8927-8888

Hiroca Automotive Trim Corporation
Address : No. 101, Neili Sec., Guanpu Rd., Xinpu Township, Hsinchu County 305044, Taiwan Tel : (03) 496-7998

Stock transfer agency :

Transfer Agency Dept., Mega Securities Co., Ltd.
Adress : 3F., No.95, Sec. 2, Zhongxiao E. Rd., Da'an Dist., Taipei City 106083, Taiwan
Website: http://www.emega.com.tw
Tel : (02)3393-0898

Finance CPAs:

Lien,Shu-Ling, Chen,Yi-Chun CPA firm: KPMG Taiwan
Address: 68F No. 7, Sec. 5, Xinyi S. Road, (Taipei 101 Building), Taipei City, Taiwan Tel.: (02) 8101-6666
Website: http://www.kpmg.com.tw

Overseas Securities Exchange : Not applicable

Website: http://www.hirosawa.com.cn

I. LETTER TO SHAREHOLDERS ... 4

II. CORPORATE GOVERNANCE REPORT ... 7
2.1 COMPANY AND GROUP PROFILE ... 7
2.2 GROUP STRUCTURE AND EVOLUTION ... 8

III. CORPORATE GOVERNANCE REPORT ... 9
3.1 INFORMATION OF DIRECTORS, PRESIDENT, VICE PRESIDENTS, SENIOR MANAGERS, AND HEADS OF DEPARTMENTS AND BRANCHES ... 9
3.2 REMUNERATION PAID TO DIRECTORS, SUPERVISORS, THE PRESIDENT, AND VICE PRESIDENTS IN THE MOST RECENT YEAR ... 18
3.3 IMPLEMENTATION OF CORPORATE GOVERNANCE ... 27
3.4 INFORMATION ON THE COMPANY'S AUDIT FEES ... 96
3.5 REPLACEMENT OF CPAS: NO DIFFERENCES SINCE 2023 ... 96
3.6 WHERE DIRECTORS, THE PRESIDENT, THE CHIEF FINANCIAL OFFICER, OR THE CHIEF ACCOUNTING OFFICER HAS BEEN EMPLOYED BY THE ACCOUNTING FIRM OR ITS AFFILIATES DURING THE MOST RECENT YEAR, THE NAME, TITLE, AND PERIOD OF EMPLOYMENT AT THE FIRM WHERE THE CPAS WORK OR ITS AFFILIATE SHALL BE DISCLOSED: ... 96
3.7 THE CHANGES IN THE TRANSFER OR PLEDGE OF EQUITY SHARES BY DIRECTORS, SUPERVISORS, MANAGERS, OR SHAREHOLDERS HOLDING MORE THAN 10% OF THE SHARES ISSUED BY THE COMPANY IN THE MOST RECENT YEAR AND UP TO THE PUBLICATION DATE OF THIS ANNUAL REPORT: DISCLOSED IN PUBLIC INFORMATION OBSERVATORY ... 97
3.8 INFORMATION ON THE TOP TEN SHAREHOLDERS WHO ARE RELATED PARTIES TO EACH OTHER OR SPOUSES OR RELATIVES WITHIN THE SECOND DEGREE OF KINSHIP OF ANOTHER ... 97
3.9 THE TOTAL NUMBER OF SHARES HELD AND THE COMBINED SHAREHOLDINGS IN ANY SINGLE INVESTEE BY THE COMPANY, ITS DIRECTORS, SUPERVISORS, MANAGERS, OR ANY COMPANIES CONTROLLED EITHER DIRECTLY OR INDIRECTLY BY THE COMPANY. ... 98

IV. FUND RAISING ... 100
3.1 CAPITAL AND SHARES ... 100
3.2 CORPORATE BONDS (INCLUDING OVERSEAS CORPORATE BONDS): ... 103
3.3 ISSUANCE OF PREFERENCE SHARES: ... 106
3.4 ISSUANCE OF DEPOSITORY RECEIPTS: ... 106
3.5 ISSUANCE OF EMPLOYEE STOCK WARRANTS AND RESTRICTED STOCK AWARDS: ... 106
3.6 ISSUANCE OF RESTRICTED STOCK AWARDS: ... 106
3.7 ISSUANCE OF NEW SHARES IN CONNECTION WITH MERGERS OR ACQUISITIONS OR WITH ACQUISITIONS OF SHARES OF OTHER COMPANIES: ... 106
3.8 FUND APPLICATION PLAN EXECUTION: ... 106

V. OVERVIEW OF OPERATIONS ... 107
4.1 INFORMATION ON BUSINESS ... 107
4.2 OVERVIEW OF THE MARKET AND PRODUCTION AND SALES ... 126
4.3 THE NUMBER OF IN-SERVICE EMPLOYEES DURING THE MOST RECENT TWO YEARS AND UP TO THE PUBLICATION DATE OF THIS ANNUAL REPORT ... 137
4.4 INFORMATION ON ENVIRONMENTAL PROTECTION EXPENDITURE ... 137
4.5 LABOR-MANAGEMENT RELATIONS ... 137
4.6 CYBER SECURITY MANAGEMENT ... 140
4.7 IMPORTANT CONTRACTS ... 142

VI. FINANCIAL POSITION AND FINANCIAL PERFORMANCE REVIEW
ANALYSIS AND RISK MANAGEMENT ... 145

5.1 FINANCIAL POSITION ... 145
5.2 FINANCIAL PERFORMANCE ... 146
5.3 CASH FLOWS ... 147
5.4 MAJOR CAPITAL EXPENDITURE ITEMS : ... 147
5.5 THE COMPANY'S INVESTMENT POLICY FOR THE MOST RECENT YEAR, THE MAIN
REASONS FOR PROFIT OR LOSS, IMPROVEMENT PLAN, AND INVESTMENT PLAN FOR
THE FOLLOWING YEAR ... 147
5.6 THE FOLLOWING MATTERS THAT SHOULD BE ANALYZED AND ASSESSED FOR RISKS . 149
5.7 OTHER IMPORTANT MATTERS: ... 164

VII. SPECIAL MATTERS ... 165

6.1 SPECIAL DISCLOSURE ... 165
6.2 PRIVATE PLACEMENT OF SECURITIES IN THE MOST RECENT YEAR UP TO THE
PUBLICATION DATE OF THIS ANNUAL REPORT: ... 172
6.3 OTHER NECESSARY SUPPLEMENTARY INFORMATION: ... 172

VIII. ANY EVENT SPECIFIED IN ARTICLE 36, PARAGRAPH 3,
SUBPARAGRAPH 2 OF THE SECURITIES AND EXCHANGE ACT WITH A
MATERIAL IMPACT ON SHAREHOLDERS' RIGHTS OR SECURITIES
PRICES DURING THE MOST RECENT YEAR AND UP TO THE
PUBLICATION DATE OF THIS ANNUAL REPORT: ... 175

I. LETTER TO SHAREHOLDERS

2024 marked the first full year since the Chinese government lifted its pandemic control measures. However, the economy did not achieve the anticipated growth. The overall environment faced a shortfall in effective demand, with insufficient consumer demand being particularly pronounced. Investment demand remained sluggish, dragged down by the downturn in the real estate sector. The weakening of demand was transmitted to the supply side, resulting in a predicament of insufficient domestic demand and supply-demand imbalance. 2023 was a pivotal year witnessing the rise of Chinese domestic automotive brands, as their market share surpassed 50% for the first time within China. Supported by sustained national policies and incentives, and amid intensifying price competition, the penetration rate of new energy passenger vehicles exceeded 50% for five consecutive months starting from July 2024. During the same period, the market shares of domestic brands surged to 65.2% in 2024, further cementing China's position as the world's largest automobile exporter for the second consecutive year. We have observed that new energy vehicles have continuously replaced the traditional fuel vehicle market. Nevertheless, countless automobile companies and business operators enter into fierce competition to fight for the market share against this growth backdrop. In this market environment, even the production and sales figures reach a new high, it is difficult to hide the anxiety and insecurities of the OEMs and the supply chain. As per the data from the China Association of Automobile Manufacturers, the number of new cars sold in China's auto market in 2024 reached 31.436 million, an annual increase of 4.5%. The sales of passenger cars increased by 5.8% compared to 2023. While many joint venture brand car manufacturers in China made mistakes in their new energy vehicle strategies, the joint-venture manufacturers showed a significant decline. The three major Japanese car manufacturer customers of the Company have faced the challenge of new energy vehicles, and the proportion of revenue has declined to about 45%, while the proportion of self-brand customers has increased significantly to 28%. Therefore, the Company's overall revenue in 2024 will decrease by 11.8% from 2023. The trade disputes between the United States and China persisted last year. However, driven by government subsidy policies and price reduction incentives, sales of new energy vehicles (NEVs) surpassed 12.866 million units in 2024, representing a 35.5% increase compared to 2023. In the same year, the revenue contribution from NEV sales for the Company also reached 18.6%. It is expected that automobile brands will not only focus on lightweight technologies but enhance AI-based and eco-friendly interiors of new cars. With the competitive advantage of having a complete vertical and horizontally integrated manufacturing process, we are confident in obtaining more orders and opportunities for new car models, so as to maintain the high uptime of the production capacity of our production sites, to enable our operating performance to be better than the average sales growth rate in the new car market.

Chinese consumers' demand for automobiles is also changing. As living standards improve, consumers have higher requirements for the safety, comfort, and intelligence of cars. A simple price war is no longer enough to satisfy the diversified needs of consumers. It is necessary for car companies to increase investment in R&D and launch more competitive products. Therefore, 2025 will still be a challenging year for the car industry. In addition to maintaining a strong presence with the three major Japanese automotive manufacturers in Mainland China, the Company will focus on expanding its business with domestic brands as a key driver of revenue growth. Furthermore, due to the expiration of the lease at Dongguan Hirosawa Plant No. 1, production lines will be relocated to the nearby Xitou Plant, with the capacity transfer scheduled for completion in the third quarter of 2025. The Company shall continue to actively expand its customer base and support customers in the development of new light-weight and intelligent products with environmentally friendly production processes while optimizing the operation efficiency of production sites and maximizing value for shareholders. The results of business operations and the net assets and liabilities in Company's 2024 Consolidated Financial Statements, profitability analysis, and future development strategies are as follows:

(I) Results of business operations:

In 2024, the Company's consolidated revenue was NT$5,087,625 thousand, the consolidated gross profit was NT$1,130,877 thousand, and the consolidated net loss after tax was NT$45,829 thousand. The consolidated net loss after tax attributable to shareholders of the parent company was NT$95,049 thousand, and the consolidated losses per share after tax was NT$1.14.

(II) Net assets and liabilities

As of December 31, 2024, the Company’s consolidated total assets totaled NT$10,666,525 thousand and the consolidated total liabilities totaled NT$4,317,283 thousand, which equaled 40% of consolidated total assets. The total consolidated shareholders' equity was NT$6,349,242 thousand, which equaled 60% of the total consolidated assets.

(III) Profitability analysis

In the Company's 2024 Consolidated Financial Statements, the losses per share after tax was NT$1.14, the net income ratio was -0.9%, the return on assets was 0.59%, and the return on equity was -0.72%.

(IV) Future development strategies

Production capacity expansion: Due to the expiration of the lease at the Company’s flagship manufacturing facility, Dongguan Hirosawa Plant No. 1, production lines will be relocated to the nearby Xitou Plant, with the capacity transfer expected to be completed in the third quarter of 2025. In line with business expansion, Hirotai in Mexico acquired a new land parcel of 46,000 square meters in August 2024, which will be developed in five phases starting from 2025. In Taiwan, Hiroca not only establishing a production line for decorative film printing but is also investing in a new joint venture plant in Korea to serve the Hyundai Motor Group.
Introduction of automation equipment: To address the tightening labor market in Mainland China and improve product yield rates, the Company continues to optimize production processes and actively adopt automated equipment. At Dongguan Hirosawa Xitou Plant, one new automated water transfer printing line and two coating lines will be established.
Introduction of diverse surface treatment technologies: The Company continues to develop production technologies for plastic trims for the interior and exterior of automobiles. We also actively develop several types of new eco-friendly surface trim processing technologies with tremendous potential. We have acquired wooden, plastic electroplating, and laser engraving interior trim technologies from joint ventures and we are actively developing thermal printing and vacuum transfer printing technologies. We have recently focused on the development of illuminated, touch control, and smart electronic trim products for automobiles with the aim of providing customers with the best services and the most diverse product options and winning purchase orders.
Development of surface materials, pattern design, and mechanisms for automobile interior trims: The Company is currently working with auto manufacturers on the design and development of the interior trims of several new vehicles. We also actively promote environmentally friendly, translucent, and touch control surface materials with the aim of becoming an important strategic supplier for customers and ensuring stable purchase orders for the Company.

Due to the policies implemented by the Mainland Chinese government, car brands have maintained their development toward energy conservation and carbon reduction, electric vehicles, and smart vehicles. As the Company has accumulated years of track records and developed the capacity for the R&D, design, and mass production technologies for interior and exterior trim of cars, we are now actively accelerating the development of technologies for light-weight and environmentally friendly surface treatment for trims. We also actively integrate smart automotive

electronic components and modules. In addition to continuous improvements of the existing process technologies for trims, we also enhance the capacity for mass production of new environmentally friendly trims. We use the one-stop service to satisfy customer demand for trim for different surfaces and continue to maintain our position as a key partner for auto manufacturers.

The Company will continue to work hard and use professional manufacturing capacity and high-quality services to serve customers. We shall do our best to continue our success in operations.

Chairman : Yu, Che-Ming

II. CORPORATE GOVERNANCE REPORT

2.1 COMPANY AND GROUP PROFILE

Hiroca Holdings Ltd. was established on December 8, 2009 (hereinafter referred to as “Hiroca Holdings” or “the Company”) as a holding company incorporated in the Cayman Islands. Hiroca Holdings invests in other businesses through the overseas investment holding company, Lofty Success Group Limited. (hereinafter referred to as “Lofty Group”). Among them, the main operating sites are Dongguan Hirosawa Automotive Trim Parts Co. Ltd. (hereinafter referred to as “Dongguan Hirosawa”) and Wuhan Hiroyoshi Automotive Trim Co., Ltd. (hereinafter referred to as “Wuhan Hiroyoshi”); the Company has additionally established Dongguan Guang Neng Automotive Trim Co., Ltd. (hereinafter referred to as “Dongguan Guang Neng”), Hunan Hiroyoshi Automotive Trim Co., Ltd. (hereinafter referred to as “Hunan Hiroyusi”), Kaifeng Guangjia Automobile Accessories Co., Ltd. (hereinafter referred to as “Kaifeng Guangjia”), and Xiangyang Hiroyoshi Automotive Trim Co., Ltd. (hereinafter referred to as “Xiangyang Hiroyoshi”). Our main business covers injection molding, surface coating, and cubic painting of automotive interiors, and our main clients are the spare parts suppliers for the three major Japanese automakers in the southern China and central China regions. In addition to Dongguan Hirosawa, Wuhan Hiroyoshi, Dongguan Guang Neng, Hunan Hiroyoshia, Kaifeng Guangjia, and Xiangyang Hiroyoshi, we have established a professional investment company, Hirogen International Limited. (hereinafter referred to as “Hirogen International”), Hiroca Investment Co., Ltd. (hereinafter referred to as “Hiroca Investment”), Hiroyoshi Investment Co., Ltd. (hereinafter referred to as “Hiroyoshi Investment”), Yoshisawa Investment Co., Ltd. (hereinafter referred to as “Yoshisawa Investment”), Hiroyuki Investment Co., Ltd. (hereinafter referred to as “Hiroyuki Investment”), Hirotai Investment Co., Ltd. (hereinafter referred to as “Hirotai Investment”), and Smart Scene Holdings Co., Ltd. (hereinafter referred to as “Smart Scene Holdings”) through Lofty Success Group Limited to invest in other automotive interiors manufacturing or surface treatment plants.

In recent years, Lofty Success Group Limited has invested in the establishment of Dongguan Hirosawa Automotive Trim Technology Co., Ltd. (hereinafter referred to as “Hirosawa Technology”), and Suzhou Hiroyuki Automotive Trim Co., Ltd. (hereinafter referred to as “Suzhou Hiroyuki”). Then, the Company invested in the establishment of Hiroca Automotive Trim Corporation in Taiwan (hereinafter referred to as “Hiroca Taiwan”). The country of incorporation and the main functions of each of the Group's subsidiaries are summarized below:

Name of company	Registration place	Principal business
Hiroca Holdings Ltd.	CHINA	General investment business
Lofty Success Group Limited	SAMOA	International trade and general investment business
Hiroca Automotive Trim Corporation	TAIWAN	R&D and sales of automotive trim parts
Shin Shih Technology Co., Ltd.	TAIWAN	Manufacturing and sales of cars and their spare parts and sales of molds
HS Automotive Trim Co., Ltd.	KOREA	Manufacturing and sales of cars and their spare parts and sales of molds
Hirogen International Limited	SAMOA	General investment business
Hiroyoshi Investment Limited	SAMOA	General investment business
Yoshisawa Investment Limited	SAMOA	General investment business
Hiroyuki Investment Limited	SAMOA	General investment business
Hirotai Investment Limited	SAMOA	General investment business
Smart Scene Holding Limited	SAMOA	General investment business
WIN INC.	CAYMAN	International trade and general investment business

2.2 Group structure and evolution

III. CORPORATE GOVERNANCE REPORT

3.1 Information of Directors, President, Vice Presidents, Senior Managers, and Heads of Departments and Branches

(I) Directors(I)

Basic information

March 31,2025 : Unit : Shares

Title and Name	Shareholding when elected	Current shareholding	Current shareholdings by spouse and minor children	Shares held in the name(s) of others	Principal Experience (Education)	Other current positions within the Company and in other companies	Spouse or relatives within the second degree of kinship or closer acting as other supervisors, directors, or supervisors		Remark
							Title	Name
	First date elected	2009.12.8	2009.12.8	2015.6.5	2018.5.30
Term	3years	3year	3year	3year
Date elected	2024.5.31	2021.7.1	2024.5.31	2024.5.31
Gender / age	Male / 51-60	Male / 41-50	Male / 51-60	Male / 41-50
Nationality	Taiwan	Taiwan	Taiwan	Taiwan
Director Chung,Chia-Hsiang (Note9)	13,949,847	16.64%	14,220,847	16.97%	-	2,719,245	3.24%	Vocational School Representative, Szu Mao Development Limited	Note1
Director Chung,Chia-Hsiang (Note9)	580,955	0.69%	1	0.00%	-	-	-	Ba of Chinese Culture University College of Department of Printing and Communication Sales vice manager, Trustbond Technology Corp.	Note2
Director Huang,Chien-Chung	28,600	0.03%	28,600	0.03%	-	-	-	Master of Syracuse University STA Manager, Changan Ford	Note3
Director Chen,Nai-Rung	-	-	-	-	-	-	-	Master of Soochow University Manager, Hongda Investment Co., Ltd.	Note4

Title and Name	Shareholding when elected	Current shareholding	Current shareholdings by spouse and minor children	Shares held in the name(s) of others	Principal Experience (Education)	Other current positions within the Company and in other companies	Spouse or relatives within the second degree of kinship or closer acting as other supervisors, directors, or supervisors		Remark
							Name	Title
Director Chuang,Wu-Chuan	2024.5.31	0.89%	775,647	0.89%	-	-	Vanung University, Department of Mechanical FONG YUE AUTOMOTIVE PARTS CO., LTD.	Note6	-
Independent Director Lin,Shen-Sheng	2024.5.31	0.89%	-	-	-	-	Note5	Note7	-
Independent Director Shen,Chao-Chun-wu (Note9)	2024.5.31	0.89%	-	-	-	-	EMBA of the Institute of Technology Management, National Tsing Hua University COO of Greater China, Synopsys Taiwan Co., Ltd	-	-
Independent Director Ou-Yang,Hung (Note9)	2024.5.31	0.89%	-	-	-	-	Juris Doctor (JD), Washington University in St. Louis, USA Lawyer, Brain Trust International Law Firm	Note8	-
Independent Director La,Chia-Yi (Note10)	2024.5.31	0.89%	-	-	-	-	EMBA from the College of Management, National Taiwan University, Chairman of Holdwell Accounting Firm	Note11	-
Independent Director Chen,Hsu-Yi (Note10)	2024.5.31	0.89%	-	-	-	-	Department of Accounting, National Defense Management College Financial Controller of NCSIST	-	-

Note1. Chairman of the company, Lofty Success Group Limited, Dongguan Hirosawa Automotive Trim Co., Ltd., Hiroca Investment Limited, Hirogen International Limited, Hirotai Investment Limited, Hiroyoshi Investment Limited, Yoshisawa Investment Limited, Hiroyuki Investment Limited, Dongguan Mono Automotive Trim Co., Karyu Automotive Trim Co., Ltd, HIROTAI AUTOMOTIVE TRIM SA DE CV, Smart Scene Holding Limited, Hiroca Automotive Trim Corporation, Profit Up Group Limited, Kimisawa International Inc. and Kimisawa Enterprise Limited.
Director of Win Inc, Hunan Hiroyoshi Automotive Trim Co., Ltd., Hirosawa Automotive Trim USA Co, Cubic (Tianjin) Printing Co., Ltd, Suzhou Hiroyuki Automotive Trim Co., Ltd. and Regal Concept Limited., HS Automotive Trim Co., Ltd. < Shin Shih Technology Co., Ltd.
Supervisor of Dongguan Hirosawa Automotive Trim Technology Co., Ltd.

Director and Sales Vice President of the company, Lofty Success Group Limited and Dongguan Hirosawa Automotive Trim Co., Ltd.
Chairman of Kaifeng Guangjia Automobile Accessories Co., Ltd., and Conserve & Associates, Inc.
Director of Dongguan Taica Hirosawa Technologies Co., Ltd, Hiroyoshi Investment Limited, Wuhan Hiroyoshi Automotive Trim Co., Ltd. And Profit Up Group Limited.
Chairman and General manager of Guang Neng Automotive Trim Co., Ltd., Hunan Hiroyoshi Automotive Trim Co., Ltd., Hirosawa Automotive Trim USA Co.
Chairman of Xianyang Hiroyoshi Automotive Trim Co., Ltd., Vice chairman of Jiangmen Tsukada Riken Automotive Trim Co., Ltd. and Dongguan Xinze Mold Co., Ltd.
Director and General manager of the company, Lofty Success Group Limited, Dongguan Hirosawa Automotive Trim Co., Ltd, Wuhan Hiroyoshi Automotive Trim Co., Ltd., Changshu Mono Hirosawa Automotive Trim Co., Hirotai Automotive Trim Sa De Cv, Suzhou Hiroyuki Automotive Trim Co., Ltd.
Director of Hiroyoshi Investment Limited, WIN INC, Karyu Automotive Trim Co., Ltd, Chongqing Zhengze Automotive Componet Co., Ltd, Smart Scene Holding Limited, Hiroca Investment Limited < Profit up group Limited. Supervisor of Hiroca Automotive Trim Corporation.
Director of Semisils Applied Materials Corp., Ltd.
Master, School Management Ming Chuan University. National Taiwan University Law Credit Class 38th, Adjunct Lecturer, Department of Finance, School of Business, Chinese Culture University. Manager, assistant manager, deputy general manager and director of the underwriting and stock agency department of a large comprehensive securities firm. Chairman and GM, Chuan Shan Investment Trust.
R&D VP of Lofty Success Group Limited and Dongguan Hirosawa Automotive Trim Co., Ltd. Director of Hunan Hiroyoshi Automotive Trim Co., Ltd., Losang-Hirosawa mold Co. Ltd. Profit up group Limited, HE-DENG INDUSTRIAL INC. General manager of Dongguan Hirosawa Automotive Trim Technology Co., Ltd.
Independent director, Kaulin Manufacturing Co., Ltd and Kingray Technology Co., Ltd, The second director of the China Association of Independent Directors, the fifth supervisor of the China International Tax Association.
Director, Fulltech Fiber Glass Corp., Independent director, Longwell Company, Vice-President of AEA the Asia Region of the International Bar Association, Adjunct Assistant Professor at National Tsing Hua University, Cultural University, National Taipei University of Commerce, Soochow University.
2024.05.31 Complete re-election and dismissal
2024.05.31 Complete re-election
MetaEdge Corporation, PANCOLOUR INK CO., LTD. Independent director,

Major shareholder of major institutional shareholder: The Company's directors and independent directors not representatives of institutional shareholders, so this does not apply.
Information on directors and supervisors (II)

(1) Disclosure of information on directors' and supervisors' professional qualifications and the independence of independent directors:

March 31, 2025

Name	Criteria	Professional qualifications and experience (Note 1)	Conditions of independence	Number of other public companies where he/she concurrently serves as an independent director
Yu,Che-Ming		Hirosawa Business Vocational School.
Worked as representative, Szu Mao Development Limited
With car decoration manufacturing, car supply chain management, and familiar with the Chinese automobile ecosystem.		0
Huang,Chien-Chung		Master of Syracuse University.
Worked at Changan Ford and Changan Mazda in Nanjing.
With automobile manufacturing major, automobile supply chain management, familiar with China's automobile ecology.		0
Chuang,Wu-Chuan		Vanung University, Department of Mechanical
FONG YUE AUTOMOTIVE PARTS CO., LTD.		0
Chen,Nai-Rung		Bachelor of Economics of Soochow University, have financial literacy.
He works in Hongda Investment and Changxiang Investment Company responsible for entrepreneurial investment management. In addition to serving as the director of Hiroca Holdings Limitd, he also serves as a director of Tung Kai Technology Engineering Co., Ltd, Image Match Design Inc. Supervisor, Director of Semisils Applied Materials Corp., Ltd, and Director of Syner-G Technology Co., Ltd.
Served as Shin Kong Investment Trust Manager and the operation manager of the Yuanta Securities:
With financial accounting, overall economic analysis, market direction and industrial technology analysis and management capabilities, it will improve the governance quality and supervision function of the board of directors.		0

Criteria Name	Professional qualifications and experience (Note 1)	Conditions of independence	Number of other public companies where he/she concurrently serves as an independent director
Lin,Shen-Sheng	Ba, department of accountant of Fu Jen Catholic University. Master, Management Institute of Ming Chuan University, National Taiwan University Law Credit Class No. 38. Currently an adjunct lecturer at the Department of Finance, Chinese Culture University, also serves as the independent director of Kaulin Manufacturing Co., Ltd, the independent director of Hiroca Holdings Ltd, the independent director of Kingray Technology Co., Ltd, the lecturer of the "home lecture" of the Chinese Governance Association, and the second term director of the Chinese Independent Directors Association. Worked as manager, associate manager, deputy general manager and director of the underwriting department and stock agency department of a large comprehensive securities company, and worked as the general manager and chairman of Transcend Securities Investment Trust Co., Ltd. He also served as independent director and director of a number of listed, OTC and Emerging Stock companies. Based on the above experience, he can provide better suggestions in the fields of financial accounting and related securities finance, implement and strengthen the functions of the board of directors, guide due diligence governance and deepen the company's sustainable governance culture.	1. None of themselves, their spouses, or relatives within the second degree of kinship serve as directors, supervisors or employees of the company or its affiliated companies. 2. themselves, their spouse and relatives within the second degree do not hold shares of the company 3. Not serving as a director, supervisor or employee of a company that has a specific relationship with the company. 4. In the past two years, there has been no remuneration for providing business, legal, financial, accounting and other services to the company or its affiliates.	2
Lai,Chia-Yi	EMBA from the College of Management of National Taiwan University, with professional knowledge in finance and accounting; She is currently the director of Holdwell Accounting Firm, an independent director of MetaEdge Corporation, an independent director of PANCOLOUR INK CO., LTD. and a member of the Public Debt Management Committee of Keelung City Government. She has served as the third president of the EMBA Association of National Taiwan University, senior manager of Deloitte Touche Taipei branch and associate of the Los Angeles branch of Deloitte, lecturer at Soochow University, tax consultant of the National Federation of Dental Associations of the Republic of China, member of the 20th Disciplinary Committee of the Taipei Certified Public Accountants Association, and independent director of JARLLYTEC CO., LTD. Having capabilities in corporate governance, financial accounting and management will enhance the quality of corporate governance of the board of directors and the supervisory function of the audit committee.		2
Chen,Hsu-Yi	He graduated from the Department of Accounting of the National Defense Management College, and has professional training in finance and accounting. Currently he is a manager of the Accounting Group of the Finance Office of the NCSIST. He has served as the head of the Accounting Group of the Finance Office of the NCSIST for 7.5 years. Possess extensive experience in business and financial accounting, and perform supervisory functions.		0

(2) Board diversity and independence:

A. Board diversity:

Board diversity policy and achievement

(a) Board diversity policy

The Company has the Corporate Governance Best Practice Principles in place, in which the diversity policy is set out in Chapter 3 Chapter 3 "Enhanced Functions of the Board of Directors"

We adopt a candidate nomination system for the nomination and selection of board members in accordance with the Articles of Incorporation. In addition to evaluating each candidate's education and experience, we refer to our stakeholders' opinions and comply with the Rules of Election of Directors and the Corporate Governance Best Practice Principles to ensure the diversity and independence of board members.

As per Article 20, paragraph 3 of the Corporate Governance Best Practice Principles, we consider diversity for the composition of the Board of Directors. The number of directors serving as the Company's managers concurrently shall not exceed one-third of all directors. We have formulated an appropriate diversity policy based on its operation, operating model, and development needs, including but not limited to the two criteria below:

I. Basic criteria and values: Gender, age, nationality, and culture.
II. Professional knowledge and skills: Professional backgrounds (such as law, accounting, industry, finance, marketing, or technology), professional skills, and industry experience.

Board members should possess the knowledge, skills, and qualities needed to perform their duties. The Board of Directors as a whole should possess the capabilities and skills below to achieve the ideal goal of corporate governance:

I. Business judgment.
II. Accounting and financial analysis.
III. Business management (including managing the subsidiaries' business).
IV. Crisis management.
V. Industry knowledge.
VI. An international market perspective.
VII. Leadership.
VIII. Decision-making.
IX. Risk management knowledge and ability.

The seventh Board of Directors consists of seven directors, including three independent directors and two managing directors (director-cum-President and director-cum-Vice President). With the extensive experience and a variety of professional backgrounds in the fields of engineering, business, legal affairs, and management, they can provide professional advice from different perspectives, which is of significant help to improve the Company's operating performance and management efficiency.

Of the board members, there should be at least one person in banking, asset management, legal affairs, accounting, information technology, and risk management, respectively. The seven directors are all Taiwanese citizens between 40 and 60 years old. In addition, the company also focuses on gender equality in the composition of its board members. During the re-election in May 2024, the company added one female director to the board. The reason why the representation of either gender on the board has not yet reached one-third is mainly due to the nature of the industry, where finding talent in a short period of time is challenging. Moving forward, before the next board re-election, the company will expand its pool of potential candidates, supported by training and individual development plans. It will also explore multiple channels to attract professional candidates, aiming to achieve gender diversity and implement the board diversity policy.

(b) The implementation of the board diversity policy:

Core Diversification Projects	Basic component						Industry experience			Professional ability
	Gender	In employee status	Age	Term of Independent Director	Above 6 years	Banking	Securities	Insurance	Asset Management	Accounting	Law	Information	Risk Management
Director name			40-50 Years Old	51-60 Years Old	61-70 Years Old

Title and Name	Organizer	Refresher course	Date	Hours
Chairman Yu,Che-Ming	Securities & Futures Institute	2024 Insider Trading Prevention Briefing	2024.09.11	3
	Securities & Futures Institute	2024 Insider Equity Trading Law Compliance Awareness-Raising Event	2024.11.11	3
Director Huang,Chien-Chung	Securities & Futures Institute	Institutional Investors' Perspectives Forum	2024.06.11	3
	Securities & Futures Institute	2024 Insider Trading Prevention Briefing	2024.09.11	3
Director Chuang,Wu-Chuan	Securities & Futures Institute	2024 Insider Trading Prevention Briefing	2024.09.11	3
	TWSE/OTC	Digital finance and sustainable finance concerto under the AI boom	2024.10.11	3
	Securities & Futures Institute	2024 Insider Equity Trading Law Compliance Awareness-Raising Event	2024.11.11	3
	Securities & Futures Institute	2024 Insider Equity Trading Law Compliance Awareness-Raising Event	2024.11.11	3
Director Chen,Nai-Rung	TIDA Taiwan	【ESG Sustainability Forum】Win-win situation for environment and economy in 2024: Taiwan’s ESG practice path	2024.10.11	3
	TWSE/OTC	Digital finance and sustainable finance concerto under the AI boom	2024.10.11	3
Independent Director Lin,Shen-Sheng	Taiwan Institute Of Director	Steer the course of corporate wisdom and lead the way with corporate governance	2024.10.11	3
	TIDA Taiwan	Analysis of the legal responsibilities of directors (independent directors) and practical cases	2024.04.11	3
	Taiwan Institute Of Director	How to achieve business growth through strategic mergers and acquisitions	2024.05.11	3
Independent Director Lai,Chia-Yi	Securities & Futures Institute	Carbon trading mechanism and carbon management application	2024.08.11	3
	Taiwan CPA	Investment grade perpetual report	2024.12.11	2
Independent Director Chen,Hsu-Yi	TIDA Taiwan	【ESG Sustainability Forum】Win-win situation for environment and economy in 2024: Taiwan’s ESG practice path	2024.10.11	3
	TWSE/OTC	"GHG Protocol Corporate Standard and Scope 3 Standard Promotion Course" of "Using Sustainable Knowledge to Create a New Carbon Era Promotion Conference"	2024.10.11	7
	Securities & Futures Institute	2024 Insider Equity Trading Law Compliance Awareness-Raising Event	2024.11.11	3

B. Board independence:

The Company's sixth Board of Directors consists of seven directors, including three independent directors, accounting for 43% of all directors;

None of the seven directors are spouses or relatives within the second degree of kinship of another director as stipulated in Article 26-3, paragraphs 3 and 4 of the Securities and Exchange Act.

(II) Information Regarding President, Vice Presidents, Assistant Vice President, and the Supervisors of All the Company's Divisions and Branch Units:
March 31,2025 Unit : Shares

Title	Nationality	Name	Gender	Date appointed (took office Date) (Note 1)	Number of shares held		Spouse and minor children holding shares		Shares held in the name(s) of others		Principal Experience (Education)	Office(s) Concurrently held in Other Companies	Spouse or relatives within the second degree of kinship or closer acting as managerial officers Manager			Remarks
					shares	Percentage of ownership	shares	Percentage of ownership	shares	Title			name	Relationship
President	ROC	Huang, Chien-Chung	Male	2007.01.01	28,600	0.03%	-	-	-	-	Master of Syracuse University STA Manager, Changan Ford	Note 2	-	-	-	None (The Chairman and the President or person in an equivalent position are the same person, spouses, or relatives within the first degree of kinship)
Sales Vice President	PRC	Zhang, Sheng-Xiang	Male	2024.01.01	-	-	-	-	-	-	Section Chief, Automotive Department, Marubeni (Guangzhou) Trading Co., Ltd. Minth Group APO Global Business Director	Sales Vice President of Dongguan Hirosawa	-	-	-
R&D Vice President	ROC	Chuang, Wu-Chuan	Male	2003.07.21	775,647	0.93%	-	-	-	-	Vanug Engineering College Section manager of Fong Yue Automotive Parts Co., Ltd.	Note 3	-	-	-
Sales Vice President	Japan	Ichikawa Hideyuki (Note 4)	Male	2007.07.17	-	-	-	-	-	-	Shizuoka University Faculty of Law and Economics Junior College Minister of Domestic and Overseas Sales department of Taica Corporations (Japan)	Vice President of Operations, Dongguan Hirosawa, Lofty Success; Supervisor, Karyu Automotive; Director, Guangdong Kawasawa.	-	-	-

CFO	ROC	Huang, Sheng-Chang	Male	2008.04.01	20,651	0.03%	-	-	-	-	Note 5	Note 6	-	-	-
Production Vice President	ROC	Kung, Shiang-Hsu	Male	2014.04.01	-	-	10,000	0.01%	-	-	Department of Mechanical Engineering, Chung Yuan Christian University Senior manager of Foxconn Group	President of Wuhan Hiroyoshi	-	-	-
Purchase Vice President	ROC	Wang, Hsiao-Chun	Female	2013.06.01	-	-	-	-	-	-	Note 7	Vice President of Procurement, Dongguan Hirosawa, Lofty Success Group; Supervisor, Dongguan Hirosawa	-	-	-
Production Assistant Senior Manager	ROC	Ku, Ming-Chun	Male	2007.08.01	22,000	0.03%	-	-	-	-	Note 8	Senior Manager of Production, Dongguan Hirosawa, Lofty Success Group	-	-	-
R&D Assistant Vice President	ROC	Lo, Tsai-Ching (Note 9)	Male	2011.03.01	-	-	-	-	-	-	Dept. of Chung Hua University Industrial Management Engineer of Fong Yue Automotive Parts Co., Ltd.	Assistant Vice President of R&D, Dongguan Hirosawa, Lofty Success Group	-	-	-
Chairman assistant	ROC	Yu, Chia-Chin (Note 10)	Male	2024.01.01	1,000	0.00%	-	-	-	-	Department of Information Management, Ming Chuan University, Auditor at KPMG Firm	Director of Lofty Success Dongguan Hirosawa Automotive and Kaifeng Guangjia	-	-	-
Audit Manager	ROC	Chen, Jui-Sheng (Note 11)	Male	2018.10.22	-	-	-	-	-	-	Note 12	Audit Manager, Dongguan Hirosawa, Lofty Success Group	-	-	-
Corporate Governance Officer	ROC	Chiu, Shou-Ray (Note 13)	Male	2024.04.18	20,000	0.02%	-	-	-	-	Department of Accounting, National Taiwan University, Senior Manager at KPMG Accounting Firm	Supervisor of HS Automotive Trim Co., Ltd	-	-	-

Audit Manager	ROC	Chang, Ya-Yun (Note 14)	Female	2025.3.14	-	-	-	-	-	-	Department of Accounting, Chinese Culture University ITEQ, Controller of Finance Department Unitech PCB, Internal auditor and accounting	Audit Manager, Dongguan Hirosawa, Lofty Success Group	-	-	-

Note 1: It refers to the date of the main operating entity, Dongguan Hirosawa, taking office.
2: The Chairman and the President of Hunan Hiroyoshi Automotive Trim Co., Ltd., and HIROSAWA AUTOMOTIVE TRIM USA CO.; Chairman of Xianyang Hiroyoshi Automotive Trim Co., Ltd.; Vice Chairman of Jiangmen Tsukada Riken Automotive Trim Co., Ltd. and Losang-Hirosawa mold Co.Ltd.; director and the President of the Company, Lofty Success Group Limited, Dongguan Hirosawa Automotive Trim Co., Ltd., Wuhan Hiroyoshi Automotive Trim Co., Ltd., Dongguan Mono Hirosawa Automotive Trim Co., HIROTAI AUTOMOTIVE TRIM SA DE CV, and Suzhou Hiroyuki Automotive Trim Co., Ltd.; director of Hiroyoshi Investment Limited, WIN INC., Karyu Automotive Trim Co., Ltd., Smart Scene Holding Limited, Hirotai Investment Limited, Conserve & Associates, Inc., and supervisor of Hiroca Automotive Trim Corporation.
3: Vice President of R&D of Lofty Success Group and Dongguan Hirosawa; director of Hunan Hiroyoshi Automotive Trim Co., Ltd., Losang-Hirosawa mold Co.Ltd. and He-Deng Industrial Inc.; managing director and the President of Dongguan Hirosawa Automotive Trim Technology Co., Ltd.
4: Dismissed on 14 March 2024
5: Bachelor of International Trade, National Taiwan University and Master of International Business Administration, Thunderbird; Finance Department of Taiwan Cement Corporation (in charge of the listing of Taiwan Cement Corporation in Hong Kong), Assistant Manager of Finance Department of Universal Scientific Industrial Co., Ltd., and senior special assistant to the President of Kunshan Apollo Wire & Cable Co., Ltd.
6: Chief Financial Officer of Lofty Success Group, Dongguan Hirosawa; director of Smart Scene Holding Limited, HIROSAWA AUTOMOTIVE TRIM USA CO.; Supervisor of Wuhan Hiroyoshi, Hunan Hiroyoshi, Kaifeng Guangjia, ChangShu Mono Hirosawa Automotive Trim Co., Ltd., and Xiangyang Guangjia Automotive Trim Co., Ltd.
7: Bachelor of Finance and Economics, Xiamen University and Bachelor of Economics, Nanjing University; financial manager of the Company, China Branch of Ou-Ma Technology, and Jiangsu Lianxin.
8: Bachelor of Environmental Engineering, Vanung University and Bachelor of Mechanical Engineering, Nanya Institute of Technology; section manager of Mei-Fu Curved Surface Technology Co., Ltd.
9: Dismissed on 18 April 2024
10. Dismissed on 7 March 2025
11. Resignation on 15 March 2025
12. Department of Accounting, Tunghai University; Director of Accounting, Longchen Paper & Packaging Co., Ltd.; Deputy Audit Manager of the Company. Resigned on March 14, 2025
13. Taking office on 18 April 2024
14. Taking office on 15 March 2025

3.2 Remuneration paid to directors, supervisors, the President, and Vice Presidents in the most recent year
(I) Remuneration to general directors and independent directors (individuals' names and remuneration are disclosed)
March 31, 2025; Unit: NT$ thousand

Title / Name	Director's remuneration							Ratio of total compensation (A+B+C+D) to net profit after tax (%) (Note 10)	Pay received as an employee							Ratio of total compensation (A+B+C+D+E+F+G) to net profit after tax (%) (Note 10)	Remuneration from investments other than subsidiaries (Note 10)
	Remuneration (A) (Note 2)		Retirement pension (B)		Director's remuneration (C) (Note 3)		Business expenses (D) (Note4)			Salary, bonuses and allowances (E) (Note 5)		Retirement pension (F)		Employee's remuneration (G) (Note 6)
	The Company	All companies in the financial statements (Note 7)	The Company	All companies in the financial statements (Note 7)	The Company	All companies in the financial statements (Note 7)	The Company	All companies in the financial statements (Note 7)	The Company	All companies in the financial statements (Note 7)	The Company	All companies in the financial statements (Note 7)	Share value		The Company	All companies in the financial statements (Note 7)		Share value	The Company	All companies in the financial statements (Note 7)
													Cash value	Cash value
Chairman Yu,Che-Ming	-	-	-	-	-	-	-	-	-	-	6,749	-	-	-	-	-	-	6,749 (7.10%)	6,749 (7.10%)	None
Director Huang,Chien-Chung	-	-	-	-	-	-	-	-	-	-	3,510	-	-	-	-	-	-	3,510 (3.69%)	3,510 (3.69%)	None
Director Chuang, Wu-Chuan	-	-	-	-	-	-	-	-	-	-	4,143	-	-	-	-	-	-	4,143 (4.36%)	4,143 (4.36%)	None
Director Chen,Nai-Rung	500	500	-	-	-	-	-	500 (0.53%)	500 (0.53%)	-	-	-	-	-	-	-	-	500 (0.53%)	500 (0.53%)	None
Independent Director Lin,Shen-Sheng	500	500	-	-	-	-	-	500 (0.53%)	500 (0.53%)	-	-	-	-	-	-	-	-	500 (0.53%)	500 (0.53%)	None
Independent Director Lai,Chia-Yi	500	500	-	-	-	-	-	500 (0.53%)	500 (0.53%)	-	-	-	-	-	-	-	-	500 (0.53%)	500 (0.53%)	None
Independent Director Chen,Hsu-Yi	500	500	-	-	-	-	-	500 (0.53%)	500 (0.53%)	-	-	-	-	-	-	-	-	500 (0.53%)	500 (0.53%)	None

Please specify the policy, system, standard, and structure of remuneration to independent directors, and the association between the amount of remuneration and the responsibilities and risks assumed, time spent, and other
Except as disclosed in the above table, the remuneration received by the Company's directors for providing services to the parent company, all companies in the financial statements, or investees (such as serving as a
The net profit after tax for the year was negative.

Remuneration range table

Range of remuneration paid to each director Of the Company	Director name
	The total amount of the first four remuneration items (A+B+C+D)		The total amount of the first seven remuneration items (A+B+C+D+E+F+G)
	The Company (Note 8)	All companies in the financial reports (Note 9)H	The Company (Note 8)	All companies in the financial reports (Note 9)H
Less than NT$1,000,000	Yu,Che-Ming Huang,Chien-Chung Chuang,Wu-Chuan Chen,Nai-Rung Lin,Shen-Sheng Lai,Chia-Yi Chen,Hsu-Yi	Yu,Che-Ming Huang,Chien-Chung Chuang,Wu-Chuan Chen,Nai-Rung Lin,Shen-Sheng Lai,Chia-Yi Chen,Hsu-Yi	Yu,Che-Ming Huang,Chien-Chung Chuang,Wu-Chuan Chen,Nai-Rung Lin,Shen-Sheng Lai,Chia-Yi Chen,Hsu-Yi	Chen,Nai-Rung Lin,Shen-Sheng Lai,Chia-Yi Chen,Hsu-Yi
NTD 1,000,000 (inclusive) - 2,000,000 (exclusive)	-	-	-	-
NTD 2,000,000 (inclusive) - 3,500,000 (exclusive)	-	-	-	-
NTD 3,500,000 (inclusive) - 5,000,000 (exclusive)	-	-	-	Huang,Chien-Chung Chuang,Wu-Chuan
NTD 5,000,000 (inclusive) -10,000,000 (exclusive)	-	-	-	Yu,Che-Ming
NTD 10,000,000 (inclusive) - 15,000,000 (exclusive)	-	-	-	-
NTD 15,000,000 (inclusive) - 30,000,000 (exclusive)	-	-	-	-
NTD 30,000,000 (inclusive) - 50,000,000 (exclusive)	-	-	-	-
NTD 50,000,000 (inclusive) - 100,000,000 (exclusive)	-	-	-	-
Over NTD 100,000,000	-	-	-	-
Total	-	-	-	-

Note 1: The names of directors shall be listed separately (the names of institutional shareholders and their representatives shall be listed separately), and general directors and independent directors shall be listed separately, with various payment amounts disclosed in an aggregate manner. If a director concurrently serving as the President or the Vice President shall be entered in this table or table (3-1), or tables (3-2-1) and (3-2-2) below.
Note 2: Refers to the directors' remuneration in the most recent year (including director salary, executive differential pay, severance pay, various bonuses, and incentives).
Note 3: Refers to the amount of directors' remuneration approved by the resolution of the Board of Directors in the most recent year.
Note 4: Refers to the directors' professional service fees in the most recent year (including honoraria, special allowance, various allowances, dormitory rooms, and company cars). When houses, cars, and other means of transportation or exclusive personal expenses are provided, the nature and costs of the assets provided and the actual cost or fair market value of rents, fuels, and other payments shall be disclosed. In addition, when a chauffeur is provided, please indicate the relevant payments made by the Company to the chauffeur, but such payments are not included in the remuneration.

Note 5: Refers to the salary, executive differential pay, severance pay, various bonuses, incentives, honoraria, special allowance, various allowances, dormitory rooms, and company cars received by directors who serve as employees concurrently (including the President, Vice Presidents, other managers, and employees). When houses, cars, and other means of transportation or exclusive personal expenses are provided, the nature and costs of the assets provided and the actual cost or fair market value of rents, fuels, and other payments shall be disclosed. In addition, when a chauffeur is provided, please indicate the relevant payments made by the Company to the chauffeur, but such payments are not included in the remuneration. Salary and wages recognized in accordance with IFRS 2 Share-based Payments, including employee stock warrants and restricted stock awards acquired and shares for capital increased subscribed for, shall also be included in the remuneration.

Note 6: Refers to directors who have received employee remuneration (including stock and cash) in the most recent year for serving as employees concurrently (including the President, Vice Presidents, other managers, and employees). The amount of employee remuneration approved by the Board of Directors in the most recent year shall be disclosed. If it is impossible to estimate the amount, the percentage adopted for the amount paid out last year shall be adopted to calculate the proposed amount for this year, while Table 1-3 shall be filled out additionally.

Note 7: The total amount of remuneration paid to the directors of the Company by all companies (including the Company) in the consolidated financial statements shall be disclosed.

Note 8: The names of the directors shall be disclosed in the applicable ranges based on the total amount of remuneration paid by the Company to each director.

Note 9: The total amount of remuneration paid to each of the Company's directors by all companies (including the Company) in the consolidated financial statements shall be disclosed, with the name of each director disclosed in their applicable range.

Note 10: Net income after tax refers to the net income after tax for the most recent year; where the International Financial Reporting Standards have been adopted, the net income after tax refers to the net income after tax in the parent company only or individual financial statements for the most recent year.

Note 11: a. This column shall clearly indicate the amount of remuneration received by the directors of the Company from investees other than subsidiaries or from the parent company (if there is none, please fill in "None").

b. If a director of the Company receives remuneration from investees other than subsidiaries or from the parent company, the remuneration received by the director from investees other than subsidiaries or from the parent company shall be included in column I of the remuneration range table with said column renamed "Parent company and all investees".

c. Remuneration refers to the compensation, remuneration (including employee, director, and supervisor remuneration), and professional service fees received by the directors of the Company for serving as directors, supervisors, or managers of investees other than subsidiaries or the parent company.

*The content of remuneration disclosed in this table is different from the concept of income under the Income Tax Act, so this table is for disclosure purposes rather than for taxation purposes.

(II) Supervisors' remuneration: The Company did not appoint a supervisor, so it does not apply.

(III) Remuneration paid to the President and Vice Presidents in the most recent year (individuals' names and remuneration are disclosed) March 31, 2025; Unit: NT$ thousand

Title / Name	Salary (A) (Note 2)		Retirement pension (B)		Bonuses and special expenses (C) (Note 3)		Employee remuneration (D) (Note 4)				Ratio of the total amount of A, B, C and D vs. net profit after tax (Note 8)		Renumeration received from investee companies outside of subsidiaries or from the parent company (Note 9)
	The Company	The Company	All companies in the financial statements (Note 5)	The Company	All companies in the financial statements (Note 5)	The Company	The Company		All companies in the financial statements (Note 5)		The Company	All companies in the financial statements (Note 2)
							Cash amount	Stock amount	Cash amount	Stock amount
President Huang,Chien-Chung	-	3,250	-	-	-	260	-	-	-	-	-	3,510 (3.69%)	None
R&D Vice President Chuang, Wu-Chuan	-	3,834	-	-	-	309	-	-	-	-	-	4,143 (4.36%)	None
CFO Huang,Sheng-Chang	-	3,271	-	-	-	407	-	-	-	-	-	3,678 (3.87%)	None
Production Vice President Kung, Shiang-Hsu	-	3,093	-	-	-	248	-	-	-	-	-	3,341 (3.51%)	None
Purchase Vice President Wang, Hsiao-Chun	-	3,138	-	-	-	246	-	-	-	-	-	3,384 (3.56%)	None
Sales Vice President Zhang, Sheng-Xiang	-	2,673	-	-	-	80	-	-	-	-	-	2,753 (2.90%)	None

*Those whose positions are equivalent to the President or the Vice President (such the president, chief executive officer, or director) shall be disclosed regardless of the title.

Remuneration range table

Range of remunerations paid to President(s) and deputy President(s)	Name of President and Deputy President(s)
	The Company (Note 6)	All companies in the financial statements (Note 7)
Less than NT$1,000,000	Huang,Chien-Chung, Chuang, Wu-Chuan, Huang,Sheng-Chang, Kung,Shiang-Hsu, Wang, Hsiao-Chun, Zhang, Sheng-Xiang	—
NTD 1,000,000 (inclusive) – 2,000,000 (exclusive)	—	—
NTD 2,000,000 (inclusive) – 3,500,000 (exclusive)	—	Wang, Hsiao-Chun, Kung, Shiang-Hsu, Zhang, Sheng-Xiang
NTD 3,500,000 (inclusive) – 5,000,000 (exclusive)	—	Huang,Chien-Chung, Chuang, Wu-Chuan, Huang,Sheng-Chang
NTD 5,000,000 (inclusive) –10,000,000 (exclusive)	—	—
NTD 10,000,000 (inclusive) – 15,000,000 (exclusive)	—	—
NTD 15,000,000 (inclusive) – 30,000,000 (exclusive)	—	—
NTD30,000,000 (inclusive) – 50,000,000 (exclusive)	—	—
NTD50,000,000 (inclusive) – 100,000,000 (exclusive)	—	—
Over NTD 100,000,000	—	—
Total	—	—

Note 1: The names of the President and Vice Presidents shall be listed separately, with the amounts of various payments disclosed in an aggregate manner. If a director concurrently serving as the President or the Vice President shall be entered in this table and table (1-1) above, or tables (1-2-1) and (1-2-2).
Note 2: Refers to the President's and Vice Presidents' salary, executive differential pay, and severance pay.
Note 3: Refers to the President's and Vice Presidents' various bonuses, incentives, honoraria, special allowance, various allowances, dormitory rooms, company cars, and other remuneration in the most recent year. When houses, cars, and other means of transportation or exclusive personal expenses are provided, the nature and costs of the assets provided and the actual cost or fair market value of rents, fuels, and other payments shall be disclosed. In addition, when a chauffeur is provided, please indicate the relevant payments made by the Company to the chauffeur, but such payments are not included in the remuneration. Salary and wages recognized in accordance with IFRS 2 Share-based Payments, including employee stock warrants and restricted stock awards acquired and shares for capital increased subscribed for, shall also be included in the remuneration.
Note 4: Refers to the amount of employee remuneration (including stock and cash) paid out by the Board of Directors to the President and Vice Presidents in the most recent year. If it is impossible to estimate the amount, the percentage adopted for the amount paid out last year shall be adopted to calculate the proposed amount for this year, while table 1-3 shall be filled out additionally. Net income after tax refers to the net income after tax for the most recent year; where the International Financial Reporting Standards have been adopted, the net income after tax refers to the net income after tax in the parent company only or individual financial statements for the most recent year.
Note 5: The total amount of remuneration paid to the President and Vice Presidents of the Company by all companies (including the Company) in the consolidated financial statements shall be disclosed.
Note 6: The names of the President and Vice Presidents shall be disclosed in the applicable ranges based on the total amount of remuneration paid by the Company to each President and Vice President.
Note 7: The total amount of remuneration paid to each President and Vice President of the Company by all companies (including the Company) in the consolidated financial statements shall be disclosed, with the name of each President and Vice President disclosed in their applicable range.

Note 8: Net income after tax refers to the net income after tax for the most recent year; where the International Financial Reporting Standards have been adopted, the net income after tax refers to the net income after tax in the parent company only or individual financial statements for the most recent year.

Note 9:
a. This column shall clearly indicate the amount of remuneration received by the President and Vice Presidents of the Company from investees other than subsidiaries or from the parent company (if there is none, please fill in "None").
b. If the President or a Vice President of the Company receives remuneration from investees other than subsidiaries or from the parent company, the remuneration received by the President or the Vice President from investees other than subsidiaries or from the parent company shall be included in column E of the remuneration range table with said column renamed "Parent company and all investees".
c. Remuneration refers to the compensation, remuneration (including employee, director, and supervisor remuneration), and business execution expenses received by the President or a Vice President of the Company for serving as directors, supervisors, or managers of investees other than subsidiaries or the parent company.
*The content of remuneration disclosed in this table is different from the concept of income under the Income Tax Act, so this table is for disclosure purposes rather than for taxation purposes.

Remuneration to the Five Highest Remunerated Management Personnel of a TWSE or TPEx listed Company (Individual Disclosure of Names and Remuneration Items) (Note 1)

Job title	Name	Salary (A) (Note 2)		Retirement pay and pension (B)		Rewards and special disbursements (C) (Note 3)		Employee profit-sharing compensation (D) (Note 4)				Sum of A+B+C+D and ratio to net income (%) (Note 6)		Remuneration received from investee enterprises other than subsidiaries or from the parent company (Note 7)
		The Company	All consolidated entities (Note 5)	The Company	All consolidated entities (Note 5)	The Company	All consolidated entities (Note 5)	The Company		All consolidated entities (Note 5)		The Company	All consolidated entities
								Amount in cash	Amount in stock	Amount in cash	Amount in stock
Chairman	Yu, Tse-Ming	-	6,244	-	-	-	505	-	-	-	-	-	6,749 7.10%)	None
Vice President, R&D	Chuang, Wu-Chuan	-	3,834	-	-	-	309	-	-	-	-	-	4,143 (4.36%)	None
Vice President, Finance	Huang, Sheng-Chang	-	3,271	-	-	-	407	-	-	-	-	-	3,678 (3.87%)	None
President	Huang, Chien-Chung	-	3,250	-	-	-	260	-	-	-	-	-	3,510 (3.69%)	None
Vice President, Procurement	Wang, Hsiao-Chun	-	3,138	-	-	-	246	-	-	-	-	-	3,384 (3.56%)	None

Note 1: "Management personnel" in the "Five Highest Remunerated Management Personnel" means managerial officers of the Company. "Managerial officers" means those falling within the applicable scope defined in 27 March 2003 Order No. Tai-Cai-Zheng-III-0920001301 of the former Securities and Futures Commission, Ministry of Finance. The "five highest remunerated" is calculated as those ranked in the top five in remuneration based on the sum total of the amounts of salary, retirement pay and pension, rewards and special disbursements, and employee profit-sharing compensation (i.e., the sum of items $\mathrm{A + B + C + D}$ ) received by each of the Company's managerial officers from all companies in the consolidated financial reports. If any concurrently serving director(s) is among those top, fill out this table and also Table (1-1) above.
Note 2: This refers to the salary, duty allowances, and severance pay of each of the five highest remunerated management personnel in the most recent fiscal year.
Note 3: This refers to the amount of all rewards, incentives, travel expenses, special disbursements, stipends of any kind, and provision of facilities such as accommodations or vehicles, and other remuneration of the five highest remunerated management personnel in the most recent fiscal year. When houses, cars, and other means of transportation or exclusive personal expenses are provided, the nature and costs of the assets provided and the actual cost or fair market value of rents, fuels, and other payments shall be disclosed. In addition, when a chauffeur is provided, please indicate the relevant payments made by the Company to the chauffeur, but such payments are not included

in the remuneration. Salary and wages recognized in accordance with IFRS 2 Share-based Payments, including employee stock warrants and restricted stock awards acquired and shares for capital increased subscribed for, shall also be included in the remuneration.

Note 4: This refers to employee profit-sharing compensation (including stocks and cash) received by the five highest remunerated management personnel in the most recent fiscal year. If the amount cannot be forecasted, disclose the amount expected to be distributed by calculating pro-rata to the amount that was actually distributed in the preceding fiscal year. Table 1-3 should also be completed.

Note 5: Disclose the total amount of remuneration in each category paid to the five highest remunerated management personnel by all companies in the consolidated financial report (including the Company).

Note 6: Net income means the net income after tax on the parent company only or individual financial report for the most recent fiscal year.

Note 7: a. In this column, specifically disclose the amount of remuneration received by the five highest remunerated management personnel of the Company from investee enterprises other than subsidiaries or from the parent company (if none, state "None").

b. Remuneration means remuneration received by the five highest remunerated management personnel of the Company for serving in capacities such as director, supervisor, or managerial officer at investee companies other than subsidiaries or at the parent company, including base compensation, profit-sharing compensation (including employee, director, and supervisor profit-sharing compensation) and expenses and perquisites.

*The content of remuneration disclosed in this table is different from the concept of income under the Income Tax Act, so this table is for disclosure purposes rather than for taxation purposes.

(IV) Name of the manager who receives employee remuneration and distribution
March 31, 2025, Unit: NTD Thousand

	Title	Name	Share remuneration amount	Amounts of cash compensation	Total	As percentage of income after tax (%)
Manager	Chairman	Yu,Che-Ming	-	0	0	0
	President	Huang,Chien-Chung
	Vice President	Chuang, Wu-Chuan
	Vice President	Zhang, Sheng-Xiang
	Vice President	Huang,Sheng-Chang
	Vice President	Kung, Shiang-Hsu
	Vice President	Wang, Hsiao-Chun
	Senior Manager	Ku, Ming-Chun
	Senior Manager	Chiu, Shou-Ray
	Audit Manager	Chen, Jui-Sheng(Note:2)
	Audit Manager	Chang, Ya-Yun (Note:3)

Note1: The employee remuneration has been distributed by the resolution of the Board of Directors.
Note2: Dismissed on March 14, 2025
Note3: Newly appointed on March 15, 2025

An analysis of the total remuneration paid to the Company's directors, supervisors, the President, and Vice Presidents by the Company and all companies in the consolidated financial statements as a percentage of the net income after tax for the most recent two years, and a description of the remuneration policy, standard, and package, the procedure for determining the remuneration, and the association between business performance and future risks:

(1) The total remuneration paid to the Company's directors, supervisors, the President, and Vice Presidents by the Company as a percentage of the net income after tax:

Unit: NT$ thousand

Item	2023				2024
	The Company		All companies in the financial reports		The Company		All companies in the financial reports
	Amount	%	Amount	%	Amount	%	Amount	%
Directors	1,800	(1.1%)	15,842	(9.64%)	2,000	(2.1%)	16,403	(17.26%)
President and Deputy resident(s)	-	-	25,034	(15.24%)	-	-	13,155	(13.84%)

Explanation: The company suffered an after-tax loss in 2023 and 2024, only paid part of the director's remuneration and no director's remuneration; it also did not pay employee remuneration in 2023 and 2024.

(2) The remuneration policy, standard, and package, the procedure for determining the remuneration, and the association between business performance and future risks:

(a) The Company pays directors' remuneration in accordance with the Articles of Incorporation as per the resolution by the Board of Directors, which should be reported to the shareholders' meeting. We pay remuneration to independent directors regardless of profit or loss. The Board of Directors is delegated by the shareholders' meeting to decide on the annual amount of remuneration to each independent director within the range of NT$400,000 to NT$700,000 per year. We decide on the annual amount of remuneration to general directors depending on their degree of participation and values of their contribution to the Company's operations with reference to the usual payment standards in the industry at home and abroad. In addition to the directors' remuneration

stipulated in the Articles of Incorporation, no additional remuneration will be paid.

(b) The President and Vice Presidents are also responsible for the executive management and operations of the Company. Their salary includes salary and bonuses. The Remuneration Committee reviews and determines their individual amounts based on the Company's operating performance, personal performance achievement and contribution, and the general standards in the industry before paying it to them.
(c) The Company's remuneration policy is formulated based on the Company's financial position and operating performance for the year as well as future fund application plans, and we pay employee remuneration and directors' remuneration in accordance with the Articles of Incorporation to minimize the possibility of risks in the future.

3.3 Implementation of corporate governance

(I) Information on the operations of the Board of Directors

The Board of Directors held 9 [A] meetings during the most recent year (2024), and directors' attendance is as follows:

Title	Name	Actual number of attendance (B)	Frequency of attendance	Actual attendance (%) [B/A]	Note
Charman	Yu,Che-Ming	9	0	100%
Director	Chang,Chia-Hsiang	3	0	100%	Resigned on May 31, 2025
Director	Huang,Chien-Chung	9	0	100%
Director	Chuang, Wu-Chuan	6	0	100%	Taking office on May 31, 2025
Director	Chen,Nai-Rung	8	1	88.9%
Independent Director	Lin,Shen-Sheng	9	0	100%
Independent Director	Shen,Chao-Chun	3	0	100%	Resigned on May 31, 2025
Independent Director	Ou-Yang,Hung	3	0	100%	Resigned on May 31, 2025
Independent Director	Lai,Chia-Yi	6	0	100%	Taking office on May 31, 2025
Independent Director	Chen,Hsu-Yi	6		100%	Taking office on May 31, 2025

Additional information

(1) If the operations of the Board of Directors is under any of the circumstances below, the date of the board meeting, the session, the content of the proposal, all independent directors' opinions, and the Company's response to said opinions shall be specified:

(a) Matters under Article 14-3 of the Securities and Exchange Act:

Date of Board Meeting	Term of the board	Summary of proposal	Independent directors' opinions	The Company's response to said opinions

March 14, 2024	21st meeting of the 6th Board of Directors	The 2023 directors' remuneration proposal.	Passed as proposed	Implemented in accordance with the resolution
2023 business report and financial statements	Passed as proposed	Implemented in accordance with the resolution
2023 earnings distribution proposal.	Passed as proposed	Implemented in accordance with the resolution
In response to the short-term financing and plant construction needs, the Company's subsidiary, Lofty Success Group Co., Ltd. ("Lofty Success Group") intends to loan US$3 million to another related company of the Company, Hiroca Automobile Trim Co., Ltd. ("Hiroca Automobile").	Passed as proposed	Implemented in accordance with the resolution
Due to business needs, the Company's subsidiary, Lofty Group Co., Ltd., intends to sign a short-term loan credit agreement with Shanghai Commercial and Savings Bank for a limit of US$3 million, and authorizes the Chairman to sign and deliver the credit agreement and all related credit documents on behalf of the Company.	Passed as proposed	Implemented in accordance with the resolution
Due to business needs, the Company's subsidiary, Lofty Group Co., Ltd., intends to sign a short-term loan facility agreement with E.Sun Bank, Hong Kong Branch for a loan amount of US$6 million, and authorizes the Chairman to sign and deliver the facility agreement and all related facilities documents on behalf of the Company.	Passed as proposed	Implemented in accordance with the resolution
April 18, 2024	22nd meeting of the 6th Board of Directors	Dongguan Hirosawa Automotive Trim Co., Ltd. (Dongguan Hirosawa), a wholly-owned subsidiary of the Company's subsidiary Lofty Success Group Co., Ltd., leased the land and factory buildings of the High-end Equipment Manufacturing Center Project (Phase I) from Xitou Shareholding Economic Union of Houjie Town, Dongguan City (Xitou Economic Union).	Passed as proposed	Implemented in accordance with the resolution
The dismissal and appointment of managers of the Company. (Chairman Yu avoid due to conflict of Interest)	Passed as proposed	Implemented in accordance with the resolution
The Company's investee company Lofty Success Group Limited ("Lofty Success Group") proposes to reclassify the accounts receivable from Hirotai Investment Limited (hereinafter referred to as "Hirotai Investment") as loans in accordance with regulations	Passed as proposed	Implemented in accordance with the resolution
Dong Guan Hirosawa Automotive Trim Co., Ltd. (hereinafter referred to as "Dong Guan Hirosawa"), a wholly-owned subsidiary of the Company's investee Lofty Success Group Limited, proposes to reclassify the accounts receivable from Dongguan Conserve & Associates, Inc. as loans in accordance with regulations.	Passed as proposed	Implemented in accordance with the resolution
Dong Guan Hirosawa Automotive Trim Co., Ltd. (hereinafter referred to as "Dong Guan Hirosawa"), a wholly-owned subsidiary of the Company's investee Lofty Success Group Limited, proposes to reclassify the accounts receivable from Dongguan Mono, Inc. as loans in accordance with regulations.	Passed as proposed	Implemented in accordance with the resolution
In order to improve its financial structure and raise medium- and long-term operating funds, our subsidiary Lofty Success Group Co., Ltd. intends to sign a medium-term loan facility contract with Mega	Passed as proposed	Implemented in accordance with the resolution

		International Commercial Bank for a term of US$8 million for three years, and asks our company to provide endorsement guarantee. Is this feasible?		with the resolution
May 13, 2024	23rdmeeting of the 6th Board of Directors	Lifting the non-compete clause for new directors	Passed as proposed	Implemented in accordance with the resolution
		Our subsidiary, Hiroca Automotive Trim Co., Ltd. (Taiwan Hiroca), established a joint venture with SKC Co Ltd. of South Korea in South Korea.	Passed as proposed	Implemented in accordance with the resolution
		Due to short-term financing requirements, Dong Guan Hirosawa Automotive Trim Co., Ltd. (hereinafter referred to as “Dong Guan Hirosawa”), an investee company of the Company's subsidiary Lofty Success Group Limited, proposes to loan RMB 5 million to the wholly-owned subsidiary Hunan Hiroyushi Automotive Trim Co., Ltd. (hereinafter referred to as “Hunan Hiroyushi”).	Passed as proposed	Implemented in accordance with the resolution
June 20, 2024	2ndmeeting of the 7th Board of Directors	Our subsidiary, Hiroca Automotive Trim Co., Ltd., signed a lease agreement for the Xinpu plant with Xingxi Technology Co., Ltd. (Chairman Yu avoid due to conflict of Interest)	Passed as proposed	Implemented in accordance with the resolution
August 26, 2024	4thmeeting of the 7th Board of Directors	The Company's subsidiary, Lofty Success Group Co., Ltd. ("Lofty Success Group"), intends to participate in the cash capital increase of Conserve & Associates,Inc. ("Conserve & Associates"). (Chairman Yu and Director Chen Nai Rong recuse themselves from the relevant interests)	Passed as proposed	Implemented in accordance with the resolution
		Wuhan Hiroyushi Automotive Trim Co., Ltd., an investee of the Company's subsidiary Lofty Success Group Limited, proposes to renew the application for a one-year financing loan with Shenzhen Branch of East West Bank (China) Co., Ltd. with a credit limit of RMB 35 million, and request Dong Guan Hirosawa Automotive Trim Co., Ltd. to continue to provide endorsement and guarantee.	Passed as proposed	Implemented in accordance with the resolution
		In response to the short-term financing needs and the need to build production lines, the Company's wholly-owned subsidiary, Lofty Success Group Co., Ltd. ("Lofty Success Group"), intends to increase the loan limit for another wholly-owned subsidiary, Hiroca Automotive Co., Ltd. ("Hiroca Automobile"), from US$3 million to US$6 million.	Passed as proposed	Implemented in accordance with the resolution
December 27, 2024	6thmeeting of the 7th Board of Directors	Review and assessment of directors' remuneration	Passed as proposed	Implemented in accordance with the resolution
		The company's managers' 2024 employee bonus distribution plan	Passed as proposed	Implemented in accordance with the resolution
		Review the company's managers' monthly salary structure, year-end bonuses and employee bonus payments	Passed as proposed	Implemented in accordance with the resolution
		Added the company's "Sustainable Information Management Regulations" and revised the internal control system and internal audit system	Passed as proposed	Implemented in accordance with the
		information management regulations.		resolution.

(b) Other matters resolved by the Board of Directors with objection or reservation made by any independent directors, with records or a written statement: None.

(2) Directors' recusal from proposals:

We have formulated the "Rules of the Procedure for Board of Directors Meetings", which clearly specify the terms of directors' recusal from proposals in which their personal interest is involved, and proceed in accordance with applicable regulations.

2024.03.14 At the 21st meeting of the 6th session, the first case was discussed, the 2023 directors' remuneration case. Directors Chen, Lin, Ouyang, and Shen recused themselves from participating in the discussion and resolution. The other directors present passed the case without objection.
At the 22nd meeting of the Sixth Session on April 18, 2024, the fourth case, the dismissal and appointment of the company's managers, was discussed. Chairman Yu abstained from participating in the discussion and resolution, and the other directors present passed the case without objection.
At the 2nd meeting of the 7th session on June 20, 2024, the third case was discussed, namely, the case of the Xinpu factory lease contract signed between Hiroca Automotive Trim Co., Ltd., a subsidiary of the Company, and Xingxi Technology Co., Ltd. Chairman Yu abstained from participating in the discussion and resolution, and the other directors present passed the case without objection.
At the 4th meeting of the 7th term on 26 August 2024, the third proposal was discussed, that the Company's subsidiary Lofty Success Group Co., Ltd. ("Lofty Success Group") intends to participate in the cash capital increase proposal of Conserve & Associates, Inc. ("Conserve & Associates"). Chairman Yu and Director Chen Nai Rong abstain from participating in the discussion and resolution, and the other directors present approved the proposal without objection.

The implementation of the board evaluation:

Cycle	Period	Scope	Method	Content
Once per year	Evaluation of the board performance between January 1, 2024 and December 31, 2024.	Evaluation of the performance of the board as a whole, individual directors, and functional committees	Internal self-evaluation by the Board of Directors and board members’ self-evaluation and peer evaluation.
Appointment of external professional institutions or experts or other appropriate means for performance evaluation. (once every three years)	See the table below for details.

Evaluation indicators
Board performance evaluation	Board member performance evaluation	Functional committee performance evaluation
1. Degree of involvement in the Company's operations.	1. Alignment with the Company's goals and mission.	1. Degree of involvement in the Company's operations.
2. Improvement to the quality of the Board of Directors' decision-making.	2. Awareness of responsibilities as a director.	2. Awareness of responsibilities as a functional committee member.
3. The composition and structure of the Board of Directors.	3. Degree of involvement in the Company's operations.	3. Improvement to the quality of the functional committee's decision-making.
4. The election of directors and their continuing education.	4. Internal relationship management and communication.	4. The composition and selection of members of the functional committee.
5. Internal control.	5. Directors' professional and continuing education.	5. Internal control.
	6. Internal control.

The Board of Directors has passed the resolutions on 2016.12.19 and 2020.11.10 to formulate and amend the Rules of the Performance Evaluation of the Board of Directors that the board performance evaluation by an external entity should be conducted at least once every three years.

Board member performance evaluation and board performance evaluation In December 2024, the meeting affairs unit distributed seven copies of the self-evaluation questionnaire for the Board Member Performance Evaluation, seven of which were all returned, and the formulated the Board Member Self-evaluation Questionnaire Statistics Table as well as the evaluation indicators as per the Rules of the Performance Evaluation of the Board of Directors. Then, the unit compiled the above documents as well as the performance evaluation results (implemented as per the evaluation standards) into a report and submitted it to the 7th meeting of the 7th Board of Directors on February 14, 2025.
Functional committee performance evaluation

In December 2024, the meeting affairs unit distributed three copies of the Audit Committee Performance Self-Evaluation Questionnaire, three of which were all returned, and the evaluation results were at the Excellent level.

Board performance evaluation by an external entity

In October 2024, we appointed KPMG Advisory Services Co., Ltd., which does not have business dealings with the Company and is independent of the Company, to conduct the 2024 (January 2024 to December 2024) board performance evaluation between October 29 to December 26, 2024, by a team of experts led by Tsai, Yang-Tsung, Executive Committee Member of Taiwan Institute of Ethical Business. The institute and executive experts evaluated the four major aspects of board performance evaluation: board professionalism (board composition and structure, director selection and continuing education), board decision-making (degree of participation in company operations, improving the quality of board decision-making), the board's emphasis on and supervision of internal control, and the board's attitude towards sustainable operations. The evaluation method combined data analysis,

questionnaires and interviews, and issued a performance evaluation report on December 26, 2024 based on the evaluation results.

The Company submitted the evaluation results to the Board of Directors on February 14, 2025.

(a) General comment in the evaluation report

The Company's Board of Directors has formulated policies and procedures in accordance with applicable laws and regulations and domestic corporate governance indicators. The Board of Directors consists of directors with relevant expertise and professional capabilities; they are assigned tasks based on their experience to effectively leverage the relevant functions of the Board of Directors consists and functional committees. The overall evaluation results ranged from Good to Excellent.

(b) Improvement suggestions and future improvement plans

Item	Suggestions in the evaluation report	Planned measures to be taken
1	Strengthen the diversity of the board of directors:
To strengthen board functions, it is encouraged that the board be composed of members with diverse backgrounds.
The evaluated company currently has one female board member out of seven, which is slightly below the one-third recommendation outlined in the Corporate Governance Best-Practice Principles. To foster greater diversity and support gender equality and sustainable development discussions, it is recommended that the company consider expanding the search scope for board candidates both within and outside the industry to further balance gender representation and incorporate a broader range of perspectives. As a foreign company listed in Taiwan, the evaluated company must comply with both the regulations of its country of registration and Taiwanese securities laws. Given its numerous overseas subsidiaries and potential investment or joint venture plans, the company faces complex compliance requirements related to environmental protection, labor, and legal issues. Therefore, it is also recommended that the evaluated company consider recruiting board members with expertise in legal affairs, compliance, environmental protection, or labor rights to enhance the board's professional diversity and improve resilience and decision-making effectiveness in response to legal or regulatory risks.	The Company’s directors were re-elected at the shareholders’ meeting on May 31, 2024. The new board members differ from the previous composition, with the addition of members possessing industry R&D and technical practical experience. For the first time since the Company’s establishment, a female director has been appointed, reflecting the Company’s continued commitment to promoting diversity within the Board. In addition, the Company will actively assist board members in their participation and engagement to enhance their professional knowledge and skills.
2	Establishing a Performance Tracking and Review Mechanism for Subsidiaries and Investees:
Several directors mentioned during interviews and in surveys that the evaluated company operates numerous overseas subsidiaries and investee businesses. They expected to strengthen the Board’s oversight and performance tracking mechanisms for these investees. Therefore, the evaluated company has already taken active steps, including arranging visits for directors to overseas plants and occasionally inviting senior overseas personnel to attend board gatherings, fostering meaningful exchanges between directors and operational management.	The Company’s various functional departments conduct regular online management meetings with their counterparts at each investee. The operational status and business performance of the investees are key items on the meeting agenda. The Company also plans to proactively arrange mutual visits between directors and local management teams to further strengthen the Board’s ability to effectively monitor and evaluate the performance of its investee operations.

Item	Suggestions in the evaluation report	Planned measures to be taken
	Building on these efforts, the evaluated company may consider adopting practices used by other enterprises with extensive overseas investments—such as convening regular virtual management meetings by business segment, operational function, or geographic region. These meetings could provide updates on the operations and performance of investee businesses, with full board participation encouraged for discussion and oversight. Even if directors are unable to personally visit every overseas plant or meet each local manager, such a structure would still enable the Board to stay informed of key developments within a shorter timeframe. If the aforementioned approach is adopted, considering that management meetings are held regularly, directors would be able to engage in scheduled discussions with managers of overseas plants. This would allow them to gain timely insights into the operational performance and developments—both progress and setbacks—of overseas subsidiaries and investee companies. Such engagements would facilitate more substantive and effective reviews and improvement discussions. Furthermore, directors would gain a clearer understanding of the performance of key personnel, which would support the planning and development of future talent.
3	Establishing a Dedicated and Integrated Risk Management Unit:

Enterprise Risk Management (ERM) is a critical component of corporate governance. Its scope extends beyond traditional risks such as inventory or cash management and encompasses broader areas including internal controls, human resources, information security, regulatory compliance, taxation, and market-related risks.

Interviewed directors observed that the evaluated company conducts production and sales activities globally, facing intense competition and diverse risks. As a result, many board members possess a strong sense of crisis awareness, actively pursuing research and development or strategically planning overseas deployment in advance. Through proactive transformation, the company aims to widen its lead over industry peers and build sufficient capacity to manage | Plan and establish an enterprise risk management system, including the establishment of relevant policies and operational procedures, and set annual priorities for monitoring business risks, ensuring that these are incorporated into regular oversight activities. Establish a mechanism for regularly reporting the implementation status of risk management to the Audit Committee or Risk Management Committee. |

Item	Suggestions in the evaluation report	Planned measures to be taken
	potential risks effectively. However, given the diverse range of risks, some of which may exceed the professional background of individual directors or fall outside the scope of business competition, it is recommended that the evaluated company consider integrating or independently establishing a dedicated risk management unit, such as a Risk Management Committee under the Board of Directors. This would enable comprehensive risk monitoring and prevention.
4	Establishing a public whistleblowing channel and strengthening the independence of the receiving unit to ensure whistleblower trust in the reporting system:

According to the Transparency International and the Business Anti-Corruption Code (Point 6.5.1), "To be effective, the Programme should rely on employees and others to raise concerns and violations as early as possible. To this end, the enterprise should provide secure and accessible channels through which employees and others should feel able to raise concerns and report violations (“whistle-blowing”) in confidence and without risk of reprisal.” This highlights the critical importance of establishing a whistleblowing system for companies to achieve their anti-corruption objectives.

According to the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, it is recommended that listed companies establish and disclose both internal and external whistleblowing channels, with the receiving unit being independent. Furthermore, Article 23, Paragraph 1, Subparagraph 5 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies encourages allowing anonymous whistleblowing to better protect the whistleblowers.

The evaluated company handles reports of illegal, unethical, or dishonest behaviors through a spokesperson who receives reports from shareholders, investors, and other stakeholders, while the audit supervisor handles reports from internal employees, customers, and suppliers. However, it appears that the contact | The Company should also plan to establish more diverse and comprehensive whistleblowing channels on its website, strengthening both the independence of the channels and the whistleblower's trust in the reporting mechanism, while reducing the psychological pressure of retaliation or suppression. |

Item	Suggestions in the evaluation report	Planned measures to be taken
	information or whistleblower email for the chief auditor has not been publicly disclosed. It is recommended to publicly disclose the contact information of the chief auditor or the whistleblowing email address on the evaluated company's official website. In addition, to further strengthen the independence of the whistleblowing channels, it may be considered that in cases where the subject of the report involves directors or senior management, an independent director should serve as the receiving unit. This will enhance the trust of the whistleblower in the reporting mechanism and reduce the psychological pressure of facing retaliation or suppression.

(3) The objectives of reinforcement of the competency of the Board of Directors (such as establishing an audit committee or improving information transparency) in the current year and the most recent year and evaluation of the implementation.

(a) On April 18, 2024, the board of directors of the company approved the establishment of a sustainable development committee and nominated three independent directors and the chairman as members to strengthen the company's sustainable development-related monitoring mechanism.

(b) Moreover, to be aligned with the international corporate governance development trend, the Company formulated the Rules of the Procedure for Board of Directors Meetings and the Audit Committee Charter on April 30, 2010 and continues to amend them in line with the amendments to the laws and regulations, to continue to improve our corporate governance quality.

(c) To improve information transparency, we immediately announce important resolutions on the Market Observation Post System (MOPS) after each board meeting, while updating relevant organizational rules on the Company's website to safeguard shareholders' equity and increase investors' understanding and recognition of the Company.

(II) The operations of the Audit Committee

The Audit Committee held 8 [A] meetings during the most recent year (2024), and independent directors' attendance is as follows:

Job title	Name	Attendance in person (B)	Attendance (%) (B/A)	Remarks
Independent director	Lin, Sheng-Sheng	8	100%
Independent director	Shen, Chao-Chun	3	100%	Resigned on May 31, 2025
Independent director	Ou-Yang, Hung	3	100%	Resigned on May 31, 2025
Independent director	Lai, Chia-Yi	5	100%	Taking office on May 31, 2025
Independent director	Chen, Hsu-Yi	5	100%	Taking office on May 31, 2025

The discussions at the meetings aimed to ensure the fair presentation of the Company's financial statements, the effective implementation of the Company's internal control, the Company's compliance with applicable laws and regulations, and the management and control of the Company's existing or potential risks.

Matters reviewed and discussed included:

1. Financial statements	10.Grievance reports
2. Auditing and accounting policies and procedures	11.Fraud prevention plans and fraud investigation reports
3. The internal control system and relevant policies and procedures	12. Information security
4. Significant asset transactions or derivative trading	13.Corporate risk management
5. Significant loans or endorsements/guarantees provided to others	14. Qualifications, independence, and performance evaluation of certified public accountants (CPAs)
6. Offering or issuing securities	15. Appointment, dismissal, or remuneration of CPAs
7. Derivative financial products and cash investments	16. Appointment and dismissal of the chief financial or accounting officer or the chief internal auditor
8. Compliance	17. Performance of duties by the Audit Committee
9. Whether the managers and directors had transactions with any related party and potential conflicts of interest	18. Audit Committee’s performance self-evaluation questionnaire

Review of financial statements

The Board of Directors prepared the 2024 business report, financial statements, and a statement of earnings distribution, among which the financial statements have been audited by CPAs at KPMG Taiwan, by whom an audit report has been issued. We have reviewed the business report, financial statements and the statement of earnings distribution and did not discover any misstatement.

Assessment of the effectiveness of the internal control system

The Audit Committee evaluated the effectiveness of the policies and procedures of the Company's internal control system (including finance, operations, risk management, information security, outsourcing, and compliance) and reviewed the Company's Audit Department, CPAs, as well as management's regular reports, including risk management and compliance reports. The Audit Committee believed that the Company's risk management and internal control systems were effective, and that we have adopted necessary control mechanisms to monitor and rectify violations.

Appointment of CPAs

The Audit Committee is responsible for supervising the independence of the accounting firm to ensure the impartiality of the financial statements. Generally speaking, the accounting firm is not allowed to provide other services to the Company except for tax-related services or specially approved projects. All services provided by the accounting firm should be approved by the Audit Committee.

To ensure the independence of the accounting firm, the Audit Committee formulated an independence assessment form with reference to Article 47 of the Certified Public Accountant Act and the principle of "Integrity, Impartiality, Objectivity, and Independence" under the Bulletin of Norm of Professional Ethics for Certified Public Accountant of the Republic of China No. 10 to assess the independence, professionalism, and competence of the CPAs and evaluate whether they are related parties to, have business dealings with, or financial interest involved in the Company. The 6th meeting of the 6th Audit Committee on Feb 14, 2025 and the 8th meeting of the seventh Board of Directors on Feb 14, 2024 reviewed and approved that Chen, Yi-Chun and Lien, Shu-Ling, CPAs at

KPMG met the independence criteria and were competent to serve as the CPAs to audit Company's financial statements and tax compliance.

Additional information

If the operations of the Audit Committee fall under any of the circumstances below, the date of the Audit Committee meeting, the session, the content of the proposal, any objection, reservation, or major suggestion made by independent directors, the results of resolutions by the Audit Committee, and the Company's response to the committee's opinions shall be specified.

(1) Matters under Article 14-5 of the Securities and Exchange Act:

Date of the board meeting	Term of the Audit Committee	Summary of proposal	Audit Committee's opinions	The Company's response to the committee's opinions
March 14, 2024	5th term Audit Committee 21th meeting	2022 business report and financial statements	Passed as proposed	Implemented in accordance with the resolution
2022 earnings distribution proposal.	Passed as proposed	Implemented in accordance with the resolution
Issue "Internal Control System Statement"	Passed as proposed	Implemented in accordance with the resolution
In response to the short-term financing and plant construction needs, the Company's subsidiary, Lofty Group Co., Ltd. ("Lofty Group") intends to loan US$3 million to another related company of the Company, Hioca Automotive Trim Co., Ltd. ("Hioca Automotive").	Passed as proposed	Implemented in accordance with the resolution
Due to business needs, the Company's subsidiary, Lofty Group Co., Ltd., intends to sign a short-term loan credit agreement with Shanghai Commercial and Savings Bank for a limit of US$3 million, and authorizes the Chairman to sign and deliver the credit agreement and all related credit documents on behalf of the Company.	Passed as proposed	Implemented in accordance with the resolution
Due to business needs, our subsidiary, Ao Cheng Group Co., Ltd., intends to sign a short-term loan facility agreement with E.Sun Bank, Hong Kong Branch for a loan amount of USD 6 million, and authorizes the Chairman to sign and deliver the facility agreement and all related facilities documents on behalf of the Company for approval.	Passed as proposed	Implemented in accordance with the resolution
April 18 2024	5th term Audit Committee 22th meeting	Dongguan Hirosawa Automotive Trim Co., Ltd. (Dongguan Hirosawa), a wholly-owned subsidiary of the Company's subsidiary Lofty Group Co., Ltd., leased the land and factory buildings of the High-end Equipment Manufacturing Center Project (Phase I) from Xitou Shareholding Economic Union of Houjie Town, Dongguan City (Xitou Economic Union).	Passed as proposed	Implemented in accordance with the resolution
The Company's investee company Lofty Success Group Limited ("Lofty Success Group") proposes to reclassify the accounts receivable from Hirotai Investment Limited (hereinafter referred to as "Hirotai Investment") as loans in accordance with regulations	Passed as proposed	Implemented in accordance with the resolution
Dong Guan Hirosawa Automotive Trim Co., Ltd. (hereinafter referred to as "Dong Guan Hirosawa"), a wholly-owned subsidiary	Passed as proposed	Implemented in

		of the Company's investee Lofty Success Group Limited, proposes to reclassify the accounts receivable from Dongguan Conserve & Associates, Inc. as loans in accordance with regulations.		accordance with the resolution
		Dong Guan Hirosawa Automotive Trim Co., Ltd. (hereinafter referred to as "Dong Guan Hirosawa"), a wholly-owned subsidiary of the Company's investee Lofty Success Group Limited, proposes to reclassify the accounts receivable from Dongguan Mono, Inc. as loans in accordance with regulations.	Passed as proposed	Implemented in accordance with the resolution
		In order to improve its financial structure and raise medium- and long-term operating funds, our subsidiary Lofty Group Co., Ltd. intends to sign a medium-term loan facility contract with Mega International Commercial Bank for a term of US$8 million for three years, and asks our company to provide endorsement guarantee. Is this feasible?	Passed as proposed	Implemented in accordance with the resolution
May 13, 2024	5th term Audit Committee 23th meeting	The Consolidated Financial Statements for the first quarter of 2024	Passed as proposed	Implemented in accordance with the resolution
		Our subsidiary, Hiroca Automotive Trim Co., Ltd. (Taiwan Hiroca), established a joint venture with SKC Co Ltd. of South Korea.	Passed as proposed	Implemented in accordance with the resolution
		Due to short-term financing requirements, Dong Guan Hirosawa Automotive Trim Co., Ltd. (hereinafter referred to as "Dong Guan Hirosawa"), an investee company of the Company's subsidiary Lofty Success Group Limited, proposes to loan RMB 5 million to the wholly-owned subsidiary Hanan Hiroyushi Automotive Trim Co., Ltd. (hereinafter referred to as "Hunan Hiroyushi").	Passed as proposed	Implemented in accordance with the resolution
June 20, 2024	6th term Audit Committee 2th meeting	Our subsidiary, Hiroca Automotive Trim Co., Ltd., signed a lease agreement for the Xinpu plant with Xingxi Technology Co., Ltd.	Passed as proposed	Implemented in accordance with the resolution
August 26 2024	56th term Audit Committee 3th meeting	The Company's Consolidated Financial Statements for the second quarter of 2024	Passed as proposed	Implemented in accordance with the resolution
		The Company's subsidiary, Lofty Success Group Ltd. ("Lofty Group"), intends to participate in the cash capital increase of Conserve & Associates,Inc. ("Conserve & Associates").	Passed as proposed	Implemented in accordance with the resolution
		Due to short-term financing requirements, Dong Guan Hirosawa Automotive Trim Co., Ltd. (hereinafter referred to as "Dong Guan Hirosawa"), an investee company of the Company's subsidiary Lofty Success Group Limited, proposes to loan RMB 35 million to Wuhan Hiroyushi Automotive Trim Co., Ltd. (hereinafter referred to as "Wuhan Hiroyushi"), another investee of the Company.	Passed as proposed	Implemented in accordance with the resolution
		In response to the short-term financing and production line construction needs, the Company's wholly-owned subsidiary, Lofty Group Co., Ltd. ("Lofty Group"), intends to increase the loan limit for another wholly-owned subsidiary, Hiroca Automotive Trim Co., Ltd. ("Hiroca Automobile"), from US$3 million to US$6 million.	Passed as proposed	Implemented in accordance with the resolution
November 13, 2024	6th term Audit Committee 4th meeting	The Company's Consolidated Financial Statements for the third quarter of 2024	Passed as proposed	Implemented in accordance with the resolution
December 27, 2024	6th term Audit Committee 5th	2025 budget	Passed as proposed	Implemented in accordance with the resolution

	meeting			with the resolution
		Proposal to change the subsidiary's executive director and director	Passed as proposed	Implemented in accordance with the resolution
		Add the company's "Sustainable Information Management Methods" and revise the internal control system and internal audit system for discussion	Passed as proposed	Implemented in accordance with the resolution

*Independent directors did not express any objection, reservation, or major suggestions on the above proposals.

(2) Other than those described above, any resolutions not approved by the Audit Committee but approved by more than two-thirds of all directors: None.

In the event of independent directors' recusal from proposals, the name of the independent director, the content of the proposal, the reasons for recusal, and the participation in voting shall be specified:

The company didn't have the above situation.

Communication between independent directors and the chief internal auditor/CPAs (including material financial and business matters communicated and communication methods and results)

To enable the Company's independent directors to be informed of the Company's finance, business condition, operational risks, and improvements made in real-time, we have established an internal control system and relevant management measures in accordance with the Regulations Governing Establishment of Internal Control Systems by Public Companies. To reasonably ensure the effective implementation of the internal control system, the Company has established an audit unit directly governed by the Board of Directors. The unit formulates audit plans in accordance with competent authorities' regulations, submits an audit report and the improvement to the audit defects immediately after each audit is completed, and reports to the independent directors at the Audit Committee meetings in a non-voting capacity. CPAs may attend the Audit Committee meetings in a non-voting capacity to participate in the discussions depending on the topics. Therefore, our independent directors can stay informed of the Company's finance, business conditions, operational risks, and improvements in real time.

Our independent directors communicate and discuss the Company's finance and business conditions with CPAs or the chief internal auditor alone through meetings or discussions at least once per year.

Communication between independent directors and the chief internal auditor

Time and date: 09:40 on December 27, 2024

Meeting method: A video conference

Participants: Independent directors Lin, Sheng-Sheng, Lai, Chia-Yi, and Chen, Hsu-Yi

Chief internal auditor Chen, Jui-Sheng

Issues communicated: 1. Auditors review progress reports.

Explanation for the results of the auditor's inspection.

Explanation for Loaning of Funds to Others
Other discussion items.

Independent directors' suggestions and advice: None.

Communication between independent directors and the CPAs

Time and date: 13:00 on December 20, 2024

Venue: Conference Room 6802, KPMG Taiwan, 68F, Taipei 101

Participants: Independent directors Lin, Sheng-Sheng, Lai, Chia-Yi, and Chen, Hsu-Yi

KPMG CPAs

Issues communicated: 1. Discussion on the key audit matters for 20234
2. Recent company-related issues
3. Recent updates of the Securities and Exchange Act.

Independent directors' suggestions and advice: None.

(III) The operations of corporate governance and the deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
I. Has the company formulated and disclosed the Corporate Governance Best Practice Principles in accordance with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies?	V		We have disclosed the Corporate Governance Best Practice Principles on the Company's official website and the MOPS.	No major difference.
II. The Company's shareholding structure and shareholders' equity
(I) Has the company formulated internal operating procedures for handling shareholders'		V	(I) The Company convenes each shareholders' meeting in accordance with the Company Act and applicable laws and regulations and formulates complete rules of procedure. Matters that should be resolved by the shareholders'	(I) No major difference.

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
suggestions or questions or disputes and litigation with them and complied with the procedures?	V		meeting are resolved by the shareholders' meeting in accordance with the rules of procedure. Also, we have a spokesperson in place to respond to shareholders' suggestions or questions and a shareholder service unit in place to handle relevant business.
(II) Does the company have a list of the major shareholders with ultimate control over the company and a list of the ultimate controllers of the major shareholders?	V		(II) The Company and our shareholder service personnel keep abreast of the shareholdings of directors, managers, top ten shareholders, and major shareholders each holding more than 10% of the total issued shares; and we file a report on the changes in their shareholdings or their shares pledged or cancellation of their pledged shares on a monthly basis.	(II) No major difference.
(III) Has the company established and implemented a risk control and a firewall mechanisms between itself and affiliates?	V		(III) We have formulated the Operating Regulations on Mutual Financial Business Between Affiliates and Companies of the Group, the Procedures for Loaning of Funds to Others, the Operating Procedures for Endorsements and Guarantees, the Guidelines for Online Filing of Public Information, and the Procedures for Handling Material Internal Information; and have established a complete internal material information processing and disclosure mechanism to avoid improper leakage of information and ensure the consistency and accuracy of the information disclosed to the public. We handle such matters in accordance with applicable regulations to establish a	(III) No major difference.

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
(IV) Has the company formulated internal regulations to prohibit insiders from using information undisclosed in the market to buy and sell securities?			risk control and firewall mechanism.
(IV) We have formulated the Insider Trading Prevention Management Procedures, which clearly stipulate the insider trading counterparties, insider data input and reporting and announcements, material information announcement, and internal material information disclosures, while disclosing the procedures on the Company's website.	(IV) No major difference.
III. Composition and responsibilities of the Board of Directors
(I) Has the board of directors formulated a diversity policy and specific management objectives and implemented them accordingly?
(II) Has the company voluntarily established other functional committees in addition to the remuneration and the audit committees established in accordance with the law?	V	V	(I) To achieve sustainable and balanced development, we have formulated a board diversity policy and regards the increasing board diversity as a key to supporting the Board of Directors’ strategic goals and maintaining its sustainable development. (The implementation of the board diversity policy is listed in page 14 and is disclosed on the Company's official website)
(II) After considering the size of the Company's Board of Directors and the number of independent directors, the Company has currently established a Sustainability Committee and a Remuneration Committee in accordance with legal regulations. Each business also has an internal control management mechanism and has established project, operation and decision-making meetings. Important issues are evaluated through such meetings to	(I) No major difference.
(II) No major difference.

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
(III) Has the company formulated board performance evaluation regulations and evaluation methods, conducted performance evaluations annually and regularly, reported the results of performance evaluations to the board of directors, and adopted such results as a reference for deciding the remuneration of and nominating candidates for individual directors?	V		provide reference for the Board of Directors to perform its supervisory duties. We has have established an Audit Committee to replace supervisors on June 5, 2010 and will establish other functional committees depending on the business plan.

(III)The Board of Directors passed the Rules of the Performance Evaluation of the Board of Directors, which stipulate that the internal board performance evaluation shall be conducted at least once per year, and board performance evaluation by an external professional independent organization or external experts or scholars at least once every three years. | (III) No major difference. |
| (IV) Does the company regularly assess the independence of the CPAs? | V | | (IV) The Company’s Finance Department evaluates the independence of the Company's CPAs at least once per year in accordance with the Corporate Governance Best Practice Principles and evaluate its suitability with reference to the Audit Quality | (IV) No major difference. |

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
			Index (AQI). We formulated an evaluation form (listed below) as per the provisions regarding independence of CPAs and professional ethics under the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the Certified Public Accountant Act and evaluate the independence of the CPAs according to the evaluation indicators one by one and report the evaluation results to the Audit Committee and the Board of Directors. We reported the CPA independence assessment results to the Board of Directors on Feb 14, 2025.
IV. Has the company has appointed an appropriate number of competent corporate governance personnel and designated a corporate governance officer to be responsible for corporate governance affairs (including but not limited to providing directors and supervisors with the materials required for performance of their duties, assisting directors and supervisors with compliance, handling matters	V		On April 18, 2024, the Board of Directors of the Company approved the appointment of Chiu Shou Ray, Senior Finance Manager, as the Director of Corporate Governance. The Corporate Governance Team will be responsible for handling and promoting corporate governance-related matters. The main tasks include:
1. Managing the affairs of the board meetings, the Audit Committee meetings, and the Remuneration Committee meetings, including providing materials required for directors to perform their duties, setting out agendas, sending meeting notices, handling meeting affairs, and keeping minutes, to facilitate the discussions in meetings.
2. Handling matters related to the shareholders' meetings: Registering the date of the shareholders' meeting per year prior to a deadline specified by law, preparing and reporting a meeting notice and meeting agenda handbook	No major difference.

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
related to board meetings and the shareholders' meetings, and preparing minutes of board meetings and shareholders' meetings)?			prior to a deadline specified by law, and handling the change registration after the amendments to the Articles of Incorporation or an election of directors.
3. Assisting directors with their appointment and continuing education, providing them with materials needed to perform their duties, and assisting them in complying with laws and other matters stipulated by laws, the Articles of Incorporation, or contracts.
4. Evaluating and purchasing appropriate directors, supervisors, and managers liability insurance.
5. Maintaining the Investor section on the Company’s website.
6. The Company has formulated the Standard Operating Procedures for Handling Directors’ Requests as a benchmark to follow.
7. Reviewing the corporate governance evaluation indicators issued by the Corporate Governance Center per year and check the Company's compliance indicator by indicator.
V. Has the company has established communication channels with stakeholders (including but not limited to shareholders, employees, clients, and suppliers) and set up a section dedicated to stakeholders on the company's website to properly respond to stakeholders’	V		(1) We attach great importance to the balance of rights and obligations among stakeholders (including shareholders, employees, clients, suppliers, banks, and creditors). We maintain smooth communication with our stakeholders and have a Stakeholders section on the official website as a channel for communication with them (please refer to the table below). Our spokesperson properly responds to important corporate social responsibility issues about which stakeholders are concerned.
(2) We have a Corporate Governance	No major difference.

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
major CSR issues of concern?			section on the official website for investors to check and download corporate governance rules and regulations.
VI. Does the company appoint a professional stock affairs agency to handle the affairs related to shareholders' meetings?	V		We have appointed a professional stock affairs agency in Taiwan (Registrar and Transfer Agency Department of Mega Securities) to handle matters related to the shareholders' meeting.	No major difference.
VII. Information disclosures
(I) Has the company set up a website to disclose information on financial business and corporate governance?
(II) Does the company adopt other methods to disclose information (such as setting up an English website, designating personnel to collect and disclose company information, implementing a spokesperson system, or placing the proceeding of investor	V		(I) We have set up an official website to disclose corporate governance information and place a link to the MOPS to disclose our financial information and relevant reports or announcement at any time.
Website: http://www.hirosawa.com.cn/
(II) We have a spokesperson and an acting spokesperson in place in accordance with the regulations and designated a person to be responsible for reporting financial and business information on the MOPS and disclosing information on the official website, while placing the investor conferences on the official website step by step.	(I) No major difference.
(II) No major difference.

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
(III) conferences on the company website)?
Does the company announce and submit an annual financial report to the competent authority within two months after the end of each fiscal year and announce and submit the financial reports for the first, second, and third quarters and the operations of each month to the competent authority before a specified deadline?		V	(III) We announce and report relevant financial statements and operating performance for each month in accordance with the competent authority’s regulations. We aim to file our annual financial statements and announce them within two months after the end of each fiscal year with the concerted efforts of various departments and the cooperation of our accounting firm to provide shareholders and investors with more transparent and real-time financial disclosures.	(III) No major difference.
VIII. Does the Company have other important information that facilitates the understanding of the operations of corporate governance (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholders’ rights, directors’	V		1. Safeguarding employees’ rights and caring for them:
(1) Purchased the pension, unemployment, occupational injury, medical treatment, and outpatient care insurance polices as well as has a housing provident fund in place.
(2) Provided employees with free health examination on-site.
(3) Providing various employee benefits (such as emergency relief, wedding and funeral allowances, and gift packages upon three major holidays).
(4) Providing employees with on-the-job training to improve their	No major difference.

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
and supervisors’ continuing education, the implementation of risk management policies and risk measurement standards, the implementation of client policies, and the company’s purchase of directors and supervisors liability insurance)?			professional knowledge and skills.
(5) Providing staff dormitories for free.
(6) Providing three meals per day for free and late-night snacks for workers working night shifts for free.
(7) Prohibiting smoking in the plants and allowing smoking at designated smoking spots to protect other workers’ health.
(8) Holding labor-management meetings from time to time to enhance labor-management harmony and clearly regulating labor-management relations and labor conditions to protect employees' rights.
2. Investor relations: Setting up an Investor section on the official website to keep shareholders informed of company information with personnel dedicated to responding to shareholders' suggestions.
3. Supplier relations: The relations with suppliers are harmonious, without any disputes or lawsuits occurring; holding supplier conferences from time to time to commend excellent suppliers.
4. Stakeholders’ rights: Stakeholders may communicate with and make suggestions to the Company to safeguard their legitimate rights.
5. Directors' training: 1.Please see page 11 “Board Member Refresher Courses”. 2. Relevant information is disclosed on the MOPS.
(http://mops.twse.com.tw)
6. Implementation of the client policy:

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
			We have maintained positive and stable partnerships with clients to create business profits.
7. Purchase of directors and managers liability insurance: We the renewed the insurance policy in May 2024 for our directors and managers, to reduce and diversify the risk of significant damage posed to the Company and shareholders caused by directors’ illegal conduct.
8. Announcing the Company's material information on the MOPS in accordance with the law to protect investors’ rights and interest.
9. The management team regularly reports on the business and financial business to the directors.
10. Formulated various internal rules and regulations as per law to manage and assess various risk and implemented them accordingly.
11. Entering into contracts or issuing purchase orders for all business transactions with affiliates, to specify both parties’ rights and obligations; setting the prices depending on the general standards in the market.
12. Information security risk management:
The Company considers the goals in this regard, safeguards the security of confidential information, and protects important corporate information in compliance with applicable laws and regulations and takes necessary measures to prevent confidential files from being leaked or destroyed, to ensure the security of various information operations and continuous operations, thereby minimizing the operating losses.

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
			The Company's information security policy:
(1) Comply with requirements in laws and contracts.
(2) Maintain the integrity and availability of data.
(3) Restrict the access to confidential information.
(4) Ensure that permitted users can access files and resources.
(5) Prevent unauthorized access.
(6) Prevent accidents from causing damage to hardware, software, and other resources.
(7) Prevent vandalism to hardware, software, and other resources.
(8) Prevent improper use of online resources.
(9) Information security risk analysis and specific management projects: (please refer to the table below)
IX. Please specify any improvements made as per the results of the corporate governance evaluation announced by the Corporate Governance Center, Taiwan Stock Exchange Corporation, in the most recent year and put forth prioritized measures to improve those that have not yet improved. (Companies not included in the evaluation do not need to answer this question).
The Company ranked among the top 80% - 100% of companies with a score of 53.77 in the 10th "Corporate Governance Evaluation" conducted in the year 2023.
The improvements to the indicators that the Company failed to obtain scores are specified below:
(1) Safeguarding shareholders' rights and treating them equally:
The Company failed to satisfy the requirements of the six evaluation indicators in the 18 indicators mainly as minutes of the shareholders' meeting did not record important information about shareholders' questions and the company's responses
(2) Enhancing the board structure and operations:
The Company failed to satisfy the requirements of the 10 evaluation indicators in the 25 indicators mainly as after an election of directors at the 2021 shareholders' meeting, there was no female member; the Company has not yet set up functional committees other than those required by law; and the Company has not yet appointed a full-time corporate governance officer, etc.
(3) Improving information transparency:
The Company failed to satisfy the requirements of the 8 evaluation indicators in the 15 indicators mainly as we did not have an English website in place, did not provide quarterly

Item	Operations		Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
(4)	financial statements in English, and did not provide financial forecasts.Promoting sustainable development:The Company failed to satisfy the requirements of the 16 evaluation indicators in the22 indicators mainly as our efforts in fulfilling the corporate social responsibility needed to be strengthened; we failed to disclose our human rights protection policies and failed to completely disclose the employee benefit measures and pension system and the implementation thereof; failed to completely disclose the efforts in the environment and safety aspects, such as energy conservation and carbon reduction.

Note: Either "Yes" or "No" checked, the operation shall be specified in the brief description column.

A succession plan for board members and implementation

The Articles of Incorporation clearly stipulates that the Company shall adopt a comprehensive candidate nomination system for elections of directors. As per Article 20 of the Corporate Governance Best Practice Principles and Article 6 of the Rules of Election of Directors, the Company shall consider diversity for the composition of the Board of Directors, and formulate a diversity policy based on its operation, operating model, and development needs, including but not limited to the two aspects of basic criteria and values and professional knowledge and skills.
We continue to implement the succession plan for director and build a database of director candidates as per the criteria below:

(1) Is honest, responsible, innovative, and able to make decisions, with the core values aligned with the Company's core values; has professional knowledge and skills conducive to the Company's operations and management.
(2) Has industry experience related to the Company's business.
(3) Can continue to allow the Company to have an effective, coordinated, diverse Board of Directors and meet the Company's needs when joining the board. We aim to have at least one female director on the board, and the board as a whole should possess the expertise in business strategies, accounting and taxation, finance, law, administrative management, and production management. The process of selecting director candidates should be in compliance with the regulations on qualification review and applicable rules, to ensure that when the number of directors elected is insufficient or to be increased, we can effectively identify and select suitable new director candidates.

The Company also formulated the Rules of the Performance Evaluation of the Board of Directors to clearly specify the performance evaluation indicators, including the alignment with the Company's goals and mission, awareness of responsibilities, involvement in the Company's operations, internal relationship management and communication, professional and continuing education, internal control, and specific opinion expression, to ensure the effective operations of the board and evaluate directors' performance as a reference for the selection of director candidates in the future.
In the election of directors at the 2024 general shareholders' meeting, three independent

directors who were nominated by shareholders and approved by the Board of Directors were elected. Their educational background covers the master or doctor of business, law, and management and experience covers the fields of finance, holding company, technology engineering, academics (professor), and law to further enhance the effective operations of the board.

A succession plan for key management personnel and implementation

The Human Resources Department coordinates the establishment of a succession talent development mechanism. For each position above the vice president level, there are two to three succession candidates selected, with a timeline for the preparation for succession set. It focuses on training resources for training and development depending on the candidates' advantages and abilities to be developed, including management courses, enhanced ability to adopt new technology, and job rotation. As per the competency evaluation results and the company and departmental missions and objectives, we strengthen the candidates' abilities for their positions to get them more prepared for succession.
We offer top-level manager training (including the President) and themed courses and discussions on future strategic plans from time to time, including systematic thinking, performance management and talent management, organizational reforms and continuous update, reform management, strategic thinking and plans, leadership and career development, talent development, as well as succession.
We promoted Ms. Wang, Hsiao-Chun, who had previously served as the Company's chief financial officer and the Assistant Vice President of the Group's Procurement Department, to the Vice President of the Group's Administrative Management Department in July 2020 to reinforce the performance of the Company's corporate governance.

Hiroca Holdings Ltd.
CPA Independence Assessment Form
Parties assessed: Chen,Yi-Chun and Lien, Shu-Ling, CPAs at KPMG Taiwan

Assessment indicator:	Yes	No	N/A
a) Regularly audit the company's financial position and internal control
Corresponding law: Article 29 of the Corporate Governance Best Practice
Principles for TWSE/TPEx Listed Companies	☑	☐	☐
b) Discover and disclose anomalies or defects in due course during the audit process
with specific improvement or fraud prevention suggestions made
Corresponding law: Article 29 of the Corporate Governance Best Practice
Principles for TWSE/TPEx Listed Companies	☑	☐	☐
c) The Company has not replaced its CPA for seven consecutive years, or the CPA has been punished or their independence was undermined.
Corresponding law: Article 29 of the Corporate Governance Best Practice
Principles for TWSE/TPEx Listed Companies and Article 61 of the Certified Public Accountant Act	☐	☑	☐
d) Whether the CPA is under any of the following circumstances:
Corresponding law: Article 6 of the Certified Public Accountant Act
1. Has previously received a final and unappealable sentence to a punishment of not less than one year of imprisonment for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime.
Notwithstanding the foregoing, this provision does not apply if three years have already passed since service of the term was completed or pardon was received after partial service of the prison term.
2. Has been declared by a court to be under guardianship or assistance and that declaration has not been voided.
3. Has been declared bankrupt and his or her rights have not yet been reinstated.
4. Has suffered from mental illness or is in irregular physical or mental condition, with two or more medical physicians of the appropriate specialty consulted upon request of the competent authority, who has determined that they are unable to practice.
5. Has been dismissed from public service as a result of disciplinary sanction and the period during which he or she is barred from reappointment has not yet expired.
6. Has been disciplined by being barred from practice as provided for in this Act.	☐	☑	☐
e) Whether the CPA is under any of the following circumstances:
Corresponding law: Article 47 of the Certified Public Accountant Act
1. The CPA is currently employed by the client or audited entity to perform routine work for which he or she receives a fixed salary, or currently serves as a director thereof.
2. The CPA has previously served for the client or audited entity as a director, supervisor, managerial officer, or an employee with material influence over attestation, and has been separated from the position for less than two years.
3. The CPA is a spouse, lineal relative, direct relative by marriage, or a collateral relative within the second degree of kinship of any responsible person or managerial officer of the client or audited entity.
4. The CPA, or the spouse or a minor child thereof, has invested in the client or audited entity, or shares in financial gains therewith.	☐	☑	☐

Assessment results:

The CPA met the independence criteria.
The CPA failed to meet the independence criteria.

Reasons for not meeting the independence criteria.

February 14, 2025

Channels for communication with stakeholders:

Title	Issue of concern	Communication channel, response method, and communication frequency	Unit responsible for response
Shareholders/Investors	Corporate governance Investment plans Shareholder participation Operating performance	1. Announcement of monthly revenue and quarterly financial position2. Holding of investor conferences or online investor conferences from time to time3. Holding of an annual shareholders' meeting per year and publication of an annual report4. Setup of an Investor section on the official website for communication with them	Name: Chiu Shou Ray Tel: 769 8927 8888 EMAIL: [email protected]
Employees	Living environment Work environment Labor-management relations Physical and psychological health	1. The Staff Service Center is in charge of the living environment, and employees can register matters to be handled in a designated area or by phone (from time to time).2. The General Affairs Section is in charge of the work environment and is responsible for daily cleaning and inspections; and it holds a monthly meeting to review the living and the work environment.3When employees join the company, the human resources department is responsible for establishing a harmonious labor relationship between the employer and the employee in compliance with regulations. Employee complaints and feedback are actively handled through negotiation. Employees can provide feedback through the QR code suggestion box, the company's official account feedback, the union group and other channels.4.Every quarter, the Human Resources Department holds a new employee orientation seminar (official account), employee resignation interview survey (normal resignation), employee satisfaction survey (once every six months), and medical first aid knowledge training for the deputy factory manager of health, etc., to pay close attention to the physical and mental health of each employee.	Name: Wang, Ai-hong Tel: 13922921797/673 EMAIL: [email protected]
Clients	Product and service quality Product price competitiveness Delivery dates Client relations management Client privacy protection	1. Phone (from time to time)2. Email (from time to time)3. Client visits or on-site audits (from time to time)4. Client/Supplier conference (once per year)5. Signing of contracts on product prices on an annual basis (once at the end of each year)6. Cost reduction plans (from time to time)	Name: Zhao, Xun-zheng Tel: 13802396083 EMAIL: [email protected]
Suppliers	Supplier management On-site audit Performance evaluation Product quality Safety	1. Supplier visits (from time to time)2. On-site audits of suppliers (see the 2022 annual audit plan)3. Phone or email (from time to time)4. Email (from time to time)5. Online training meetings (held from time to time depending on	Name: Zhang Hui-Qing Tel: 13642376070 EMAIL: [email protected]

Information security risk analysis and specific management projects

Assets	Risk analysis		Specific management plan
Important system hardware and software	System/Software vulnerabilities	System hacking	Repair software vulnerabilities in important systems at any time, combined with firewall control
	No system backup	Recovery process and time too long	Actions are taken to virtualize systems and establish backup systems on different hosts.
	No backup data	Damaged data	Important data is backed up regularly.
	No strict control over accounts	Unauthorized data theft	All account passwords must be complex and will become invalid if entered incorrectly three times in a row. They must be changed every three months.
Personal computer	Natural disasters	Damaged systems	A remote backup system is established.
	Operating system vulnerabilities	System hacking	Using system update service, the personal computer is placed behind a firewall.
Enterprise application systems	Computer virus	Computers infected with viruses	The virus patterns in the centralized anti-virus system are updated at any time; actions are taken to scan viruses, monitor virus events, and eliminate the events.
	Access permissions not checked regularly	Unauthorized access to information	User access permissions are reviewed regularly.
Employees	Programs not tested rigorously	Data error	There is a strict operating process for program modification.
	Inadequate information security concept	Computers infected with viruses	The awareness of information security is raised from time to time.

(IV) The composition, responsibilities, and operations of the Remuneration Committee:

The composition of the Remuneration Committee and member information:

To reinforce corporate governance and the Company's directors and managers remuneration system, we have formulated the Remuneration Committee Charter as per the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange, which has been approved by the Board of Directors on December 21, 2011; the three independent directors have formed the Remuneration Committee. Independent director Lin, Sheng-Sheng was elected as the convener on May 31, 2024 to review the directors and managers salary system and remuneration standards.

Information on the Remuneration Committee members:

March 31, 2025

Criteria Title & name		Professional qualifications and experience	Independence status	Number of other public companies where the individual serves as a Remuneration Committee member concurrently
Independent director (convener)	Lin, Sheng-Sheng	Accounting Department, Fu Jen Catholic University; Master of Management, Ming Chuan University, and the 38th continuing education credit-bearing program in law, National Taiwan University. Is an adjunct lecturer in the Department of Banking and Finance, Chinese Culture University; concurrently an independent director of Kaulin Manufacturing Co. Ltd., Hiroca, and Kingray Technology Co., Ltd.; an on-site instructor of Taiwan Corporate Governance Association; a director of the 2nd board of Taiwan Independent Director Association. Used to be the manager, assistant vice president, vice president, and director of the underwriting department and the stock affairs agency department of a large securities firm; the president and chairman of Chuanshan Investment Trust Co., Ltd.; an independent director and a director of many companies publicly listed on TWSE/TPEx or the emerging stock market. With the above experience, he will provide more comprehensive suggestions in the fields of financial accounting and securities to leverage and reinforce the board functions, guide stewardship, and strengthen the Company's sustainable governance culture.	1. The individual and the spouse and relatives within the 2nd degree of kinship thereof are not directors, supervisors, or employees in the Company or any of its affiliate. 2. The individual and the spouse and relatives within the second degree of kinship thereof do not hold the Company's shares. 3. The individual is not serving as a director, supervisor, or employee of a company with specific relations with the Company. 4. The individual did not receive remuneration for providing business, legal, financial, accounting, or other services to the Company or its affiliates in the most recent two years.	2

Independent director	Lai, Chia-Yi	EMBA from the College of Management of National Taiwan University, She is currently the director of Holdwell Accounting Firm, an independent director of MetaEdge Corporation, an independent director of PANCOLOUR INK CO., LTD. and a member of the Public Debt Management Committee of Keelung City Government. She has served as the third president of the EMBA Association of National Taiwan University, senior manager of Deloitte Touche Taipei branch and associate of the Los Angeles branch of Deloitte, lecturer at Soochow University, tax consultant of the National Federation of Dental Associations of the Republic of China, member of the 20th Disciplinary Committee of the Taipei Certified Public Accountants Association, and independent director of JARLLYTEC CO., LTD.		2
Independent director	Chen, Hsu-Yi	He graduated from the Department of Accounting of the National Defense Management College, Currently he is a manager of the Accounting Group of the Finance Office of the NCSIST. He has served as the head of the Accounting Group of the Finance Office of the NCSIST for 7.5 years.		None

Responsibilities of the Remuneration Committee

The Company's Remuneration Committee evaluates the directors' and managers' salary and remuneration policies and systems with the duty of care as a good manager in a professional and objective manner. It holds meetings at least twice per year and may hold meetings at any time as needed. It also makes suggestions to the Board of Directors as a reference in the decision-making process.

(1) The duties of the Remuneration Committee:

a. Regularly reviewing the Company's remuneration policy and put forth revision suggestions.
b. Formulating and regularly reviewing the policies, systems, standards, and structures for directors and managers' performance evaluation and remuneration.
c. Regularly evaluating the directors and managers' remuneration.

(2) When the Remuneration Committee performs its duties, it shall follow the standards below:

a. The management of salary should be consistent with the Company's salary policy.
b. The directors and managers' performance evaluation and remuneration should be determined with reference to the general standard in the industry, with the reasonableness of the relations between individual performance and the Company's operating performance and future risks considered.
c. Directors and managers should not be guided to engage in behavior beyond the Company's risk appetite in pursuit of salary or remuneration.
d. The percentage for dividends for directors and top-level managers' short-term performance and the time of payment of partial variable remuneration should be determined as per the characteristics of the industry and the nature of the Company's business.

e. The committee members must not participate in discussions and votes on their own personal salary and remuneration proposals.

Information on the operations of the Remuneration Committee

(1) The Company's Remuneration Committee consists of three members.
(2) The term of office of the committee members: from May 31, 2024 to May 30, 2027. The Remuneration Committee held 4 [A] meetings during the most recent year (2024), and the committee members' attendance is as follows:

Job title	Name	Attendance in person (B)	Attendance by proxy	Attendance (%) [B/A] Note	Remarks
Convener	Lin, Sheng-Sheng	4	0	100%
Member	Shen, Chao-Chun	2	0	100%	Resigned on May 31, 2025
Member	Ou, Yang-Hung	2	0	100%	Resigned on May 31, 2025
Member	Lai, Chia-Yi	2	0	100%	Taking office on May 31, 2025
Member	Chen, Hsu-Yi	2	0	100%	Taking office on May 31, 2025
Additional information: 1. If the Board of Directors did not adopt or amend the Remuneration Committee’s suggestions, the date of the board meeting, the session, the content of the proposal, the results of the resolutions by the Board of Directors, and the Company's response to said opinions shall be specified (if the remuneration approved by the Board of Directors is better than the Remuneration Committee’s suggestions, the difference and the reasons therefor shall be specified): None. 2. For proposals resolved by the Remuneration Committee, if any members expressed objection or reservation with a record or written statement, the date of the Remuneration Committee meeting, the session, the content of the proposal, all members’ opinions, and the response to the members’ opinions shall be specified: None.
Remuneration Committee	Content of proposal	Resolution result	The Company’s response to the committee’s opinions
---	---	---	---
5th term 1st meeting in 2024 2024.03.14	1. The 2023 directors’ remuneration proposal.	Approved by all members of the committee	Submitted to the Board of Directors and approved by all directors present and reported to the shareholders’ meeting
5th term 2nd meeting in 2024 2024.04.18	1. Appointment of the Company's Corporate Governance Director 2. Appointment of the Company's Managers	Approved by all members of the committee	Submitted to the Board of Directors and approved by all directors present and reported to the shareholders’ meeting
6th term 3rd meeting in 2024 2024.05.31	1. Elect the convener and chairperson of the meeting.	Approved by all members of the committee	Submitted to the Board of Directors and approved by all directors present and reported to the shareholders’ meeting

(V) The promotion of sustainable development and the deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor:

Item	Operations (Note 1)			Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description (Note 2)
I. Has the company established a governance structure to promote sustainable development and set up a dedicated (concurrent) unit to promote sustainable development, governed by the senior management as authorized by the board of directors, which supervises the implementation?	V		We put great emphasis on corporate governance, environmental protection, and social participation, and have included them in the Company's management policies and relevant operating activities. While pursuing the sustainable development and business profits, we take into account stakeholders' rights and fulfill our corporate social responsibility. The Company has set up a Sustainable Development Promotion Group and a Sustainable Development Committee, which are authorized by the Board of Directors to be handled and supervised by senior management. Regularly report sustainable development implementation results and future work plans to the Board of Directors and the Sustainable Development Committee. In 2024, we commissioned a third party to complete the inventory and verification of our company's greenhouse gas emissions and issue relevant reports. Based on the inventory data, we will set 2023 as the base year and promote our	If there are legal or necessary needs, the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies should apply.
			governance, environmental protection, and social participation, and have included them in the Company's management policies and relevant operating activities. While pursuing the sustainable development and business profits, we take into account stakeholders' rights and fulfill our corporate social responsibility. The Company has set up a Sustainable Development Promotion Group and a Sustainable Development Committee, which are authorized by the Board of Directors to be handled and supervised by senior management. Regularly report sustainable development implementation results and future work plans to the Board of Directors and the Sustainable Development Committee. In 2023, we have introduced a third party to complete the inventory and verification of our company's greenhouse gas emissions and issue relevant reports. Based on the inventory data, we will set 2022 as the base year and promote our

Item	Operations (Note 1)
	Yes	No	Brief description (Note 2)
			energy conservation and carbon reduction plan in 2024. We have completed the installation of solar panels in 2024.
II. Does the company conduct risk assessments of environmental, social, and corporate governance issues related to company operations as per the principle of materiality? Has the company formulated relevant risk management policies or strategies? (Note 2)	V		We conduct risk assessments of environmental, social, and corporate governance issues related to company operations as per the principle of materiality and have formulated relevant risk management policies or strategies. (Refer to the risk assessment and the risk management policy or strategy below)
III. Environmental issues (I) Has the company set up an appropriate environmental management system as per its industrial characteristics?	V		(I) All plants and subsidiaries of the Company have established an environmental management system as per the ISO 14001 standard and continue to pass third-party verification. The latest recertification date was January 16, 2023 and it is valid till May 4, 2026. We also conduct annual greenhouse gas inventory in accordance with the ISO14064-1 standard to follow on the reduction performance. The results are disclosed in the ESG report and the official website. (http://www.hirosawa.com.cn/) In 2024, we have commissioned a third party to complete the inventory and verification of our company's greenhouse gas emissions for 2023 and to issue a relevant report. Based on the inventory data, our company will set 2023 as the base year and promote our energy conservation and carbon reduction plan in 2024. In addition, the 2024 greenhouse gas inventory and

Item	Operations (Note 1)
	Yes	No	Brief description (Note 2)
(II) Is the company committed to improving energy efficiency and adopting recycled materials with low environmental impact?	V	(II)	verification is also proceeding as planned. The Company has a Management Department in place to be responsible for the overall environmental resource planning, formulating the energy and resource management procedures, and reasonably allocating and using energy and resources, to improve the use rate, reduce waste, and cut product costs, while improving the use efficiency of various recycled resources and using recyclable packaging materials. (Refer to the energy conservation and carbon reduction, greenhouse gas reduction, water reduction, or other waste management policy below) The installation of solar panels at the Dongguan Hirosawa headquarters was completed in 2024, and is expected to further promote energy conservation and carbon reduction.
(III) Has the company assessed its current and future potential risks and opportunities of climate change and taken countermeasures against climate-related issues?	V	(III)	We put equal emphasis on environmental protection and manufacturing and production, have formulated an environment, safety, and health policy, reduce the impact on the environment in the process of production and operations, and have adopted the international ISO 14001 standard to establish, implement, and maintain our environmental management system, to ensure the appropriate and effective

Item	Operations (Note 1)
	Yes	No	Brief description (Note 2)
(IV) Has the company counted the greenhouse gas emissions, water consumption, and total weight of waste over the past two years and formulated policies on greenhouse gas reduction, water consumption reduction, or other waste management?	V	(IV)	operations of our environmental management, thereby reducing the burden on the environment, satisfying the requirements of relevant environmental laws and green consumers’ needs, and establishing a comfortable, safe, and pleasant work environment. Please refer to the CSR Report for details on the use of energy resources, energy conservation, carbon reduction, water saving measures, pollution prevention, as well as waste and wastewater management. We have an independent environmental protection management unit and have formulated environmental protection management policies, including the Electricity Conservation Management Plan, the Water Conservation Management Plan, and the Paper Conservation Management Plan. We count the greenhouse gas emissions, water consumption, and total weight of waste per year and have formulated the energy conservation and carbon reduction, greenhouse gas reduction, water reduction, and other waste reduction measures.
IV. Social issues
(I) Does the company formulate relevant management policies and procedures in accordance with	V	(I)	We comply with the Labor Standards Act and applicable labor laws and regulations to protect employees’ legitimate rights; have signed a

Item	Operations (Note 1)
	Yes	No	Brief description (Note 2)
applicable laws and the International Bill of Human Rights?			collective bargaining agreement with the labor union in accordance with the Collective Agreement Act and formulated the employee code of conduct, We also refer to international human rights conventions such as ICERD and CEDAW to compile employee codes of conduct to create a fair working environment. while holding employee forums from time to time and providing them with channels to express their opinions and stay informed of the Company's business activities.
(II) Has the company formulated and implemented reasonable employee benefit measures (including remuneration, leave, and other benefits) and reflected business performance or achievements in employee remuneration appropriately?	V	(II)	We have formulated the rules and regulations on employment, employee attendance, leave of absence, employee benefits, employee care, labor protection, employee rewards and punishments, confidentiality, and non-compete clause, to reasonably protect their critical rights
(III) Does the company provide employees with a safe and healthy work environment and offer safety and health education to employees regularly?	V	(III)	We purchased hospitalization and accident insurance policies and other policies as required by the government for all employees, provide them with a safe work environment, and regularly offer safety and health education and training. We have also formulated an occupational illness protection management

Item	Operations (Note 1)
	Yes	No	Brief description (Note 2)
(IV) Has the company established an effective career development training program for employees?	V		(IV) system to protect workers’ health and safety. We have established a comprehensive training policy, including pre-employment training for new employees, professional and general ability training, managerial ability training, and international talent training, allowing employees to receive appropriate education and training in different periods, so as to establish an effective career development training program for them.
(V) Does the company comply with applicable laws and international standards regarding issues, such as customer health and safety, customer privacy, as well as marketing and labelling of products and services? Has it formulated relevant policies and complaint procedures to protect consumers’ or customers’ rights and interests?	V		(V) We are committed to developing critical core technologies, adopting water-based coatings, and prohibiting the use of heavy metals. All our products are in compliance with the international safety standards and the international environmental protection regulations, to provide clients with the best quality and satisfactory service. To protect clients’ privacy, we have signed relevant technology and R&D confidentiality agreements with clients and formulated the Confidential Information Management Regulations, the Intellectual Property Management Regulations, and the Employee Code of Conduct to protect clients’ patents, technology information, and other business information. Also, to provide clients with a

Item	Operations (Note 1)			Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description (Note 2)
(VI) Has the company formulated a supplier management policy, required suppliers to follow applicable regulations on issues, such as environmental protection, occupational safety and health, or labor rights? The implementation thereof?	V	(VI)	variety of channels for feedback, they can provide feedback directly to their exclusive salespersons by email and provide product shipment details and relevant shipping documents through the online business platform. Meanwhile, we have established the Client Complaint Handling Guidelines to deal with any complaints raised by clients as quickly as possible to prevent recurrence of similar incidents, reduce their dissatisfaction, and ensure the Company's reputation. In addition to the labels on products or packaging, we provide environmental protection and risk labels. We have also formulated the Supplier Management Regulations, which clearly stipulate that each supplier contract should contain the warranty for non-use of hazardous substances to comply with the ELV Directive and clients’ special requirements, restrict the use of hazardous substances, abide by the occupational safety and health regulations, and safeguard workers’ human rights. Whether a supplier has a record of causing an impact on the environment and society in the past is one of the critical indicators for the Company to evaluate suppliers. (Refer to the Supplier Sustainable

Item	Operations (Note 1)
	Yes	No	Brief description (Note 2)
			Development Management Guidelines below)
V. Has the company referred to the internationally accepted reporting standards or guidelines to prepare reports, such as ESG reports that discloses the company’s non-financial information? Has a third-party verification entity provided assurance or assurance opinion for said report?	V		V. We prepared the 2023 Sustainability Report in 2024 as per the Core Option of the GRI Sustainability Reporting Standards (GRI Standards) published by the Global Reporting Initiative (GRI) and the China CSR Reporting Guidelines, while establishing a CSR section on the official website to disclose information on corporate social responsibility. We will complete the 2024 CSR Report in the third quarter of this year.
VI. Where the company has formulated its own sustainable development code in accordance with the Sustainable Development Best Practice Principles, please specified the differences between the implementation and the principles: We have formulated the Corporate Social Responsibility Best Practice Principles and implement relevant projects in accordance with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies, without major differences from the principles.
VII. Other important information that facilitates the understanding of the promotion of sustainable development: (I) Our relevant human resources regulations (e.g. the Employee Code of Conduct) are in compliance with the Labor Standards Act, and we have personnel dedicated to handling the tasks related to human resources. The Employee Code of Conduct contains the regulations on safeguarding employees and job applicants’ rights and obligations and rules of complaints and punishments to protect employees' right to work. (II) We put much emphasis on the relations with clients and have formulated a written operating procedure of emergency response workflow to solve clients' problems as quickly as possible. (III) We believe that the implementation of environmental protection, safety, and health business should be in compliance with applicable domestic laws and regulations and in alignment with internationally recognized standards. The Company has obtained the environmental management system (GB/T 24001-2016/ISO14001:2015) and the occupational health and safety management system (GB/T 28001-2011/OHSAS 18001:2007) certification. (IV) The company firmly believes in the impact of corporate social responsibility on the country, provides employees with a stable and high-quality employment environment, and seeks the greatest benefits for the company's shareholders and related stakeholders. In the

Item	Operations (Note 1)			Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description (Note 2)
spirit of "taking from society and giving back to society", the company continues to actively participate in social charity activities and sponsorship activities for disadvantaged groups in society. Although the group's profit performance has not been good in recent years, it is still actively involved in social welfare, such as donating furniture and materials and sponsoring local marathon activities, with an annual expenditure of more than NT$300,000. While engaging in business operations, it actively practices corporate social responsibility to meet the international trend of balancing the development of the environment, society and corporate governance.

Note 1: If "Yes" is checked for Operations, please specify the important policies, strategies, and measures adopted, and the implementation situation; if "No" is checked, please specify the circumstances and reasons for the differences as well as plans to adopt relevant policies, strategies, and measures in the future in the column of "Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor".
Note 2: The principle of materiality refers to those who have a significant impact on the Company's investors and other stakeholders in respect of environmental, social and corporate governance issues.

Sustainable development governing unit

The Administrative Management Department is the concurrent sustainable development unit, and the department will coordinate relevant departments to establish an ESG task force to integrate sustainable development into the Company's business strategy, to ensure that the sustainable development strategy is thoroughly implemented in the Company's daily operations in a purposeful, systematic, and organized manner, thereby fulfilling our corporate social responsibility in a long term.

Information on the operation of the Sustainability Committee

(1) The Company has four members in the Sustainability Committee. Among them, Mr. Lin Shen-Sheng has served as an independent director and director of a number of listed, OTC and emerging companies. His experience as a university lecturer and his continuous studies in recent years on sustainable development-related issues have given him professional knowledge and capabilities in corporate sustainability. Together with the other members' rich experience in the industry, they can effectively promote corporate sustainable development.
(2) The main responsibilities of the Sustainability Committee include: formulating the company's sustainable management strategy, systems and related management policies, reviewing corporate sustainability reports, and formulating sustainability-related annual plans and project plans.
(3) In the most recent fiscal year (2024), the Sustainable Development Committee held one meeting (A). The membership qualifications and attendance of the committee members are as follows:

Job title	Name	Attendance in person (B)	Attendance by proxy	Attendance (%) [B/A] Note	Remarks
Convener	Yu, Che-Ming	1	0	100%	Taking office on May 31, 2025
Member	Lin, Sheng-Sheng	1	0	100%	Taking office on May 31, 2025
Member	Lai, Chia-Yi	1	0	100%	Taking office on May 31, 2025
Member	Chen, Hsu-Yi	1	0	100%	Taking office on May 31, 2025
Sustainability Committee	Content	Committee's opinions
---	---	---
1st term 1st meeting in 2024 2024.08.26	1. The company's 2023 annual sustainability report. 2. The Company's Sustainability Task Force's 2024 first half year work report and second half year work plan.	Approved by all members of the committee

Risk assessment and the risk management policy or strategy

As per the materiality principle for sustainable development, we conducted a risk assessment of material ESG issues and formulated relevant risk management policies or strategies based on the assessed risks below:

Material issue	Item	Risk management policy or strategy
Environment	Environmental impact and management	1. Adhering to the concept of sustainable development, we attach great importance to client values and shareholders' equity, assume our corporate social responsibility, and are committed to enhancing our corporate governance, management, and competitiveness. We focus on technology research and development (R&D) and innovation, sustainable environmental protection, employee health and safety, and participation in social charity events.
2. To avoid the loss of international clients, particularly our main markets in Japan, Europe and the U.S., which require compliance with environmental protection regulations for our products, we have implemented the ISO14001 environmental protection system since 2005 and been certified on a regular basis. The most recent certification is valid until May 4, 2026.
3. We draw up key implementation projects per year and regularly follow up on and review the progress of the endeavors to achieve each goal to ensure that we achieve the goals as planned.
4. We draw up an annual internal audit plan per year to check the Company's compliance with the applicable environmental laws and regulations and audit each operating process to confirm the compliance with the regulations.
Society	1. Occupational safety	1. We provide a safe and healthy work environment to employees and are committed to reducing the hazards to employees' safety and health. In 2018, we obtained the OHSAS18001 occupational health and safety system certification. We also hold medical examinations twice per year for occupational illness and general employee medical examinations once per year to ensure employees' personal safety in the work environment and improve their health and safety.
2. We hold regular fire exercises and occupational safety education and training each year to develop employees' emergency response and personal safety management abilities.
	2. Product safety	1. All the Company's products are in compliance with the government's various product and service laws and regulations and the EU RoHS Directive without containing any hazardous substances. With strict quality system management, we provide clients with stable product quality. Meanwhile, to ensure good quality of our customer service and improve clients' satisfaction, we have set up customer service hotlines and communication websites and actively conduct a customer service satisfaction survey per year to reinforce the ties with them, enabling the partnerships on the basis of the mutual benefit and shared prosperity to be the cornerstone of sustainable business development.
2. To establish and improve the control over hazardous substances, we have formulated the Hazardous Substances Management Manual, which contains the guidelines and goals

Material issue	Item	Risk management policy or strategy
		for the control over hazardous substances, a management system established by the Company to properly control hazardous substances, the necessary processes for control, as well as the criteria and approaches required for effective operations and control processes, to ensure that hazardous substances in the entire process in the organization are aligned with clients’ and legal/regulatory requirements.
3. We actively adopt more eco-friendly production processes, including in-mold decoration and out-mold decoration, and jointly developed the eco-friendly paint film (EPF) with a supplier to replace spray coating. It can greatly reduce wastewater, volatile organic compounds (VOC) and waste paints generated, thereby cutting environmental maintenance costs and creating a more comfortable and healthy work environment for production personnel. In the future, we will work with car manufacturers to design and develop the interiors of a variety of new car models and actively adopt eco-friendly surface materials and new technologies to achieve the vision of business sustainability.
Corporate governance	1. Socioeconomic and legal compliance	1. Establishing a governance organization and implementing an internal control mechanism to ensure that all our personnel and operations are in compliance with applicable laws and regulations.
2. Checking the compliance with the applicable laws and regulations on operations.
3. Applying for patents for the products developed by the Company to protect the Company’s rights.
	2. Strengthening the board functions and duly assuming directors’ responsibilities	1. To enable directors to understand their rights and legal responsibilities, we set training topics for them and inform them of the latest laws, system development, and policies per year
2. To achieve sustainable and balanced development, we regard the diversity of board members as a key to sustainable development; we have formulated the Board Diversity Policy. We will consider board members from various aspects to ensure the diversity of the board structure, including but not limited to gender, age, cultural and educational background, ethnicity, professional experience, skills, knowledge, and length of service.
	3. Communication with stakeholders:	1. We attach great importance to stakeholders’ opinions and learn about their material issues of concern through communication and negotiation with them. With reference to the GRI Standards and industry characteristics, we draw up a questionnaire on material issues in a systematic method. Through the questionnaire survey, we listen to their opinions. Meanwhile, we consider the impact of such issues on the Company to identify the Company’s material issues, which are prioritized for response to meet all stakeholders’ expectations.
2. As per the AA1000 Stakeholder Engagement Standard, we adopted five major assessment indicators of responsibility, influence, tension, diverse perspectives, and dependency,

Material issue	Item	Risk management policy or strategy
		identified and sorted the degree of association with stakeholders, and the stakeholders sorted by the degree of the association are government agencies, clients, employees, suppliers, neighboring communities, investors, and contractors.
3. We disclose information through diverse communication channels and in an open and transparent manner to ensure effective and positive results in communication with stakeholders.
4. We also put much emphasis on various stakeholders’ expectations for the Company and incorporated their issues of concerns collected during the communication process into the references for drawing up the Company’s business and sustainable business development strategies, to duly promote sustainable development and fulfill our corporate social responsibility.

Energy conservation and carbon reduction, greenhouse gas reduction, water reduction, or other waste management policy:

(I) Quantitative management targets for energy conservation, carbon reduction, and water reduction

Energy conservation and carbon reduction:
The Company's future quantitative management target for energy conservation and carbon reduction is to reduce the carbon dioxide intensity by 25% by 2025 compared to 2023.
Water consumption management:
Our future quantitative management target for reducing water consumption is to reduce the water intensity (total water consumption per million output value in CNY) by 25% by 2025 compared to 2023.
Waste management
The Company's future quantitative management target for waste reduction is to reduce the amount of waste generated by 2025 by 25% compared with 2023.

(II) Measures to achieve the targets

Energy conservation and carbon reduction:
(1) The General Affairs Section makes power efficiency signs and places them at the Company's power switches in a conspicuous manner.
(2) Raising all employees’ awareness of conservation and the methods and measures to save electricity.
(3) Installing a photovoltaic power generation system to increase the use of renewable energy.
(4) The period for each department to turn on air-conditioners is from 07:55 a.m. through 17:25 p.m. from May through November in summer, with the

temperature not lower than 26°C. They should turn off the air conditioners without personnel in the office.

(5) When purchasing electrical equipment and systems, the Procurement Department should ensure that the equipment and systems used are energy-efficient in alignment with the national standards. It is strictly forbidden to purchase and use electrical equipment with high energy consumption that is explicitly prohibited by the government.

Water consumption:

(1) The General Affairs Section makes the water saving signs, and all departments post them where appropriate.

(2) Raising employees' awareness of conservation and the methods and measures to save water.

(3) After leaving a pantry room or toilet, people should turn off the faucet to save water.

(4) The personnel at the Equipment Maintenance Department need to check each department's water equipment every day and repair it in time if it is dripping or leaking water.

(5) When purchasing water equipment and devices, the Procurement Department should ensure that the equipment and devices used are water-efficient in alignment with the national standards. It is strictly forbidden to purchase and use water devices that is explicitly prohibited by the government.

(6) Improving the production processes, actively adopting advanced water-efficient technologies and methods, minimizing water consumption, and increasing water use utilization efficiency.

Waste:

a) Improving the production processes and reduce the volume of waste created.

b) Adopting non-toxic or low-toxic raw and auxiliary materials, reducing the hazards of toxic and hazardous substances from the source, and reducing the use of toxic and harmful raw and auxiliary materials during the production processes.

(III) The achievement of the targets

With 2023 as the base year, greenhouse gas emissions reduced by 59.97% in 2024. (As per the Guangdong Province Carbon Peak Guidelines(Interim) and the Outline for the Preparation of a Prefecture-Level Carbon Peak Implementation Plan in Guangdong Province published by the National Development and Reform Commission, Guangdong Province, the average carbon emission factor of Guangdong's electricity consumption is calculated based on Table 4: Greenhouse gas emissions in 2023 are 54,111.56 tCO2e, and the target carbon reduction by 2024 is 8,117 tCO2e

Greenhouse gas emissions in 2024 are 21,656.74 tCO2e, and the target carbon reduction by 2023 is 32,454.82 tCO2e

Achieve the target carbon reduction of 59.97%

With 2023 as the base year, water use intensity was reduced by 19.37% in 2024.

Water consumption in 2023 is 395,011 M3, and the target water reduction by 2024 is 59,251.65 M3

Water consumption in 2024 is 318,479 M3, a reduction of 76,532 M3 compared with 2023

Exceeded target water reduction by 19.37%

With 2023 as the base year, waste generated decreased by 37.11% in 2024.

The amount of waste generated produced in 2023 was 414.82 tons, and the target

The amount of waste generated in 2024 is 56.52 tons.

The amount of waste generated produced in 2024 was 260.867 tons, a decrease of 153.953 tons compared with 2023.

Achieved target reduction waste output of 37.11%.

Policies and specific management plans for human rights protection

The Company has formulated and disclosed human rights protection policies and specific management plans with reference to the International Bill of Human Rights. In 2020, we put forth a long-term target for human rights in an inclusive workplace by 2030. With the core value of "commitment", we regard all employee as the most precious assets, assign meaningful tasks, and provide a safe and healthy work environment and competitive salary and benefits, encouraging them to balance their work and life, including family bonding, friends making, and personal interest development. We further implement the Company's human rights policy.

The Company's Declaration of Human Rights:

Comply with applicable labor laws and regulations, protect workers' legitimate rights such as ICERD and CEDAW, and respect the internationally recognized basic human rights for workers, and prohibit anything that undermines their basic rights.
Protect workers' basic human rights and establish appropriate management methods and procedures.
Provide information to employees to keep them informed of their rights under labor laws in the country where they work.
Provide employees with a safe and healthy work environment, including necessary health and first aid facilities, and strive to reduce the hazards to employees' safety and health, thereby preventing occupational accidents.
Create a suitable environment for employees' career development and establish an effective career training program.
Establish a channel for communication with employees regularly, to ensure their right to access information and express opinions on the Company's management and decisions.

Human rights concerns and approaches:

	Goals and actions	Risk assessment	Mitigation measure	Remedial approach	Compliant channel
Provide a safe and healthy work environment	Prevent occupational illness and promote employees' physical and psychological health	Record whether there are occupational illness caused by exposure to chemicals, and the voluntary participation in health programs not required by law indicates the effectiveness of our endeavors in promoting employees' health.	We care about employees' health, organize free health examination every August, and arrange for doctors and nurses to bring equipment to the Company to carry out medical examination for employees on-site. We organize free health examination twice per year for those exposed to coatings, dust, and noise.	Immediately remove them from the job, Provide adequate medical assistance, Offer them paid days off and additional salary according to law, Prevent recurrence	The labor union, the official website, suggestion boxes, and the Company's official WeChat account
Prevent illegal discrimination to ensure equal job opportunities	Strictly comply with the local government's labor laws, international regulations, and the Company's human rights policies; implement applicable internal regulations; launch and implement internal control procedures; disclose in the Company's Rules and Regulations the principle of non-discrimination to prohibit any discrimination due to race, social class, language, ideology, religion, party affiliation, place of origin, place of birth, gender, sexual orientation, age, marital status, pregnancy, appearance, or disabilities; the recruitment unit is	From the beginning of the recruitment process, we strictly prevent any illegal discrimination as per the internal control procedures. Applicants will not be requested to provide personal information that is not related to work in the Company's resume system.	From the beginning of recruitment, we carry out the employment process as per law to prevent illegal discrimination.		The labor union, the official website, suggestion boxes, and the Company's official WeChat account

	prohibited from asking about job applicants’ personal information unrelated to work during the interviews.
No child labor	As per the amended Employee Recruitment Management Regulations in the Company's human rights policy, the Company shall only interview job applicants who are not child labor and checks the hired employees’ identity to ensure that their age meets the requirement.	Job applicants should provide their identification documents (such as national ID card, driver's license, social security card, or certificate of degree) to the Company to confirm their age.	From the beginning of recruitment, we carry out the employment process as per law to prevent the child labor issue.		1 Labor union committee
2 Local community resident committee
3 Human Resources and Social Security Bureau
No forced labor	We comply with local labor laws, international regulations, and the Company’s human rights policies, and do not force or coerce any personnel to do work they are unwilling to do. It is clearly stipulated in the work rules that if employees work overtime, they should file a report on the number of overtime hours on their own, and we will calculate overtime pay or offer days off based on their number of overtime hours.	We control working hours with an internal system and set up multiple complaint channels to raise workers’ awareness and control the working hours.	We set the upper limit of overtime hours in the attendance system to control the overtime hours in a timely and effective manner.	If forced labor is discovered, we take necessary improvement measures with the supervisors and protect employees’ rights.	We have complaint channels in place, such as employee suggestion boxes and the official WeChat account, and hold regular communication meetings for employees to raise issues at any time.
We help employees maintain physical and psychological health and a work-life balance.	We provide a variety of activities in the aspects of arts and culture, sports, family bonding, and parent-child interaction and enhance the interpersonal	We review employee’ participation and their satisfaction evaluation results.	We work with the labor union committee members and organizations in plants to motivate employees to participate.	We conduct employee satisfaction surveys as a basis for future improvement.	We have complaint channels in place, such as employee suggestion boxes and the official WeChat account, and

	interaction between employees through clubs, to realize the concept of work-life balance. We provide housing and leisure activities to employees' families, so that employees can work without worries.				hold regular communication meetings for employees to raise issues at any time.

Human rights protection training approaches:

[Internal communication structure]

In the pre-employment training for new employees, we inform them of applicable laws and regulations, including the prohibition of forced labor and child labor, anti-discrimination, anti-harassment, working hours management, and humane treatment.

[Online anti-harassment and anti-fraud courses]

We raise workers' awareness of the concept of sexual harassment, sexual harassment prevention, and how the Company responds to sexual harassment incidents.

[Complete occupational safety training]

We offer different safety training session for different scenarios that employees will encounter in the workplace, such as fire, emergency response, first aid personnel, general safety and health education, and factory safety training sessions.

[Corporate social responsibility education and training]

The Company's corporate social responsibility education and training is offered to 100% of our employees. Corporate social responsibility is one of the important topics in the employee manual. Each new employee should read it on the first day of work. We are committed to living up to the business ethics and the principle of ethical management and have established relevant systems to regulate all our employees to comply with laws, regulations, and the Company's policies.

Party concerned	Party affected	Human rights issues	Evaluation/Communication channels	Mitigation measure
Employees	Females with disabilities	Work environment protection, safety and anti-discrimination, child labor issues, working hours and wages, as well as freedom of speech, religion, and association	Employee suggestion boxes
Labor union committee
Employee satisfaction survey
Seminar with employees	Education and training: Raise new employees' awareness of anti-harassment and personal data protection in the new employee training to increase their human rights awareness.
	Pregnant or	Health	Fetal anomalies,	Plan to set up

	nursing employees	(pregnancy and breastfeeding)	miscarriage, or breastfeeding problems	breastfeeding rooms Provide paid leave
	All employees	Health	Poor health examination results	Health examination reminder and awareness raising
		Health (occupational illness)	Occupational illness or accidents	Implement occupational hazard prevention plans
Suppliers/Contractors	Contractors’ employees or migrant workers	Privacy (supply chain management)	Supplier meetings, suppliers’ self-assessment, and on-site audit	Supplier meetings, suppliers’ self-assessment, and on-site audit
Clients	All employees	Privacy	Meetings	Non-disclosure commitment

Employee benefit measures

We purchased the pension, unemployment, occupational injury, medical treatment, and outpatient care as well as have a housing provident fund in place; provide free board and lodging, and employees can select their meals; regarding the staff dormitory, it is two to six people per room, and we provide additional single rooms to leaders, family rooms with two bedrooms and one living room, and couple rooms to solve their family housing issues.

There are employee restaurants, convenience stores, and parking lots in the plants, as well as free shuttle bus services for employees to commute to and from work. We serve all employees by providing a variety of benefit measures. We have established various indoor and outdoor sports facilities and venues, such as a basketball court, badminton court, table tennis room, fitness center, and employee activity center, to meet their needs for diverse leisure activities.

We draft a budget for leisure activities per year, and the Management Department will organize special and interesting activities as well as basketball games, tug-of-war, festivals, seminars, and a year-end party from time to time.

We plan working hours and holidays based on the national holidays; employees who have served for one year or more are entitled to 5-15 days of paid days off a per according to law. In addition, we provide paid days off for weddings and funerals and cash gifts.

We have a labor union and an employee meal committee in place. Representatives are elected through elections by employees and responsible for handling employee benefits and labor-management relations, to provide favorable working conditions to employees and meet their needs for benefits.

In addition, our female employees account for the majority, so we continue to implement the maternal health protection program. The details are as follows:

Pregnancy	Childbirth	Breastfeeding	Childcare
Reduce uncertainty	Alleviate physical and mental stress	Encourage breastfeeding	Facilitate the work-life balance

Establish psychological support Provide information on pregnancy
1 • Our managers take good care of pregnant and breastfeeding female employees by adjusting their workloads depending on their physical conditions during the special periods and providing various convenient measures as much as possible to enable them to feel belonged.
2 • We have set up breastfeeding rooms to provide pregnant and breastfeeding employees a convenient place for a rest.	1 • We provide employees with paid days off for maternity leave, and they can request the pay after returning to work.
2 • We provide 178 paid days off for maternity leave according to law, and the spouses can also enjoy 15 days of paid days off for paternity leave.	We attach great importance to females’ rights in the workplace and provide paid days off for daily breastfeeding: Such employees are given one hour of breastfeeding paid leave per day after a child was born till the child is one-year-old. We also built a mother's room, which is equipped with a couch, a refrigerator, an air conditioner, and other devices, and the cleaning staff regularly disinfect it, to provide the best childcare environment for working women.	1. We provide a quality living and accommodation environment and children's playground, which solve the problems of taking care of children and reaching the work-life balance.
2. We provide shuttle bus service to employees' children to and from school, so that employees can work at the Company with peace of mind.

Basic benefit program

Item	Content	Party concerned
● Basic benefits	Free board and lodging, birthday cash gifts, wedding and funeral allowances and paid leave, maternity leave, breastfeeding leave, paternity leave, and annual leave	All employees
● Insurance	Social insurance policies (pension, unemployment, occupational injury, medical treatment, and outpatient care) as well as a housing provident fund.	All employees
● Subsidy measures	Accommodation subsidy $300-800/person; business trip subsidy	People who need to stay at a hotel overnight due to business and people on business trip
● Seminars and courses	Online courses	All employees
● Health	Once per year for general personnel; twice	All employees/Personnel

examination	or three times per year for personnel involved in special operations	involved in special operations
• Pension insurance	We purchase social insurance policies for all employees in accordance with local labor laws and regulations, and we contribute to the pension insurance on a monthly basis in accordance with local laws to ensure their benefits.	All employees

Social insurance policies

The Company's main operating site is in mainland China, and most of our employees are citizens in China. We purchased the pension, unemployment, occupational injury, medical treatment, and outpatient care insurance policies as well as have a housing provident fund in place for them.

Details of social security insurance expenses paid by the Company per month (unit: CNY)

Payment baseline value	Payment baseline value	Company payment		Personal payment
		Rate	Amount	Rate	Amount
Endowment insurance	4,767	16%	762.72	8.00%	381.36
Social and basic medical insurance (Contains fertility)	4,767	3%	143.01	0.50%	23.84
Occupational injury insurance	4,546	0.8%	36.37	0.00%	0.00
Unemployment insurance	4,546	0.8%	36.37	0.20%	9.09
Company payment total:			978.47		414.29

Note: Of them, the amount of $381.36 paid by individuals to the monthly pension insurance is sent to their personal accounts, and the amount of $762.72 is sent by each unit to the overall account (for payment of pensions to retirees). After the amount in the personal account is paid out (an estimated period of 12 years), the pension will be paid from the overall account. The amount of the pension to be paid and the social security insurance payment period are closely associated with the payment amount, the local average salary, and the retirement age.

Supplier Sustainable Development Management Guidelines

We attach importance to suppliers' CSR and sustainable development. To manage suppliers, we have formulated the procurement control procedures and the supplier management regulations to regularly manage most-polluting suppliers, new suppliers, and qualified suppliers according to the management control procedures.

We classified suppliers into nine categories as per the attributes, services, and products: raw materials, molds, outsourced projects, packaging materials, consumables, repair and maintenance, transportation, equipment, and engineering construction.

Management of most-polluting suppliers

For most polluting suppliers in the fields of electroplating and surface treatment, we check if there are suppliers who are punished for violation of environmental laws based on the information on environmental punishments published by the Institute of Public and Environmental Affairs (IPE). The

information released by local environmental protection departments contains information on most-polluting enterprises, including supervisory monitoring, limited production or production termination, accidents, safety monitoring, environmental impact assessment, and supervision. For most pollution electroplating and surface treatment suppliers who are subject to new rules and annual audits, we regularly review their data and materials per month.

For high-polluting suppliers such as electroplating and surface treatment under the new regulations and annual reviews, we regularly review the data and information on the suppliers' discharge permits, and record the "Special Process Supplier Environmental Questionnaire" for control. In 2024, we have managed a total of 16 suppliers involving high-polluting suppliers.

Supplier evaluation

We have formulated the Supplier Management Regulations and prioritize those who have obtained ISO or IATF management system for collaboration; we regularly evaluate existing suppliers per year, pay close attention to their efforts in fulfilling corporate social responsibility or promoting sustainable development, and conduct CSR questionnaire survey if necessary. New regulations require suppliers to undergo a CSR questionnaire survey during their review

Suppliers with unqualified scores in the supplier assessment are required to participate in improvement meetings. In addition, the Company conducts monthly performance rating for all suppliers in the five major areas of "quality, delivery, cost, service, and safety." Suppliers rated A for their performance throughout the year and suppliers rated as excellent will be awarded the Outstanding Supplier Award for joint growth with suppliers.

There were a total of 302 raw material suppliers in 2024, All of them have been assessed and the assessment results are as follows:

, and the evaluation results are as follows:

Supplier rating	Number of supplier	Percentage
A	281	93%
B	20	6.6%
B	1	0.4%
D	0	0%

The Company planned to conduct on-site audits of 38 suppliers in 2024 and completed all the audit work as planned. Among them, 31 suppliers were rated A and 7 B, auditing issues will continue to be tracked down to suppliers.

Supplier sustainability management

We are committed to forming positive partnerships and anticipate to jointly achieve sustainable development of the industry with our suppliers. We signed the Warranty for Non-Use of Hazardous Substances and the Supplier Integrity Commitment with suppliers. At the same time, we conduct investigations on the carbon footprint of suppliers, such as, carbon emission factors and transport carbon emissions. For most-polluting suppliers in electroplating and surface treatment, we investigated their environmental risks and IPE for their special processes and offered them education and training on VOC, odor, and supplier change management. According to the "Supplier CSR Inspection Checklist", the following 12 items were investigated and audited:

Child Labor and Juvenile Labor, 2. Forced Labor, 3. Discrimination and Disciplinary Action, 4. Freedom of Association and Communication, 5. Hourly Wage, 6. Business Ethics, 7. Fire Protection, 8. Chemical Safety, 9. Equipment Safety and health, 10. Dormitory and cafeteria, 11. Management system, 12. Conflict minerals.

Criteria for new suppliers

As per the basic procurement principles of "5R", we purchase goods and services in the right quantity, at the right price, right place, and right time, and with the right quality. Before working with new suppliers, raw material production suppliers should go through on-site assessment, except for those who meet the self-assessment criteria. The procurement unit organizes relevant units to participate in the on-site audit and scoring of suppliers. The ratings are divided into four grades: A, B, C, and D. Suppliers rated A or B can become qualified suppliers directly. Those rated C should submit a three-to-six-month improvement report, and after the reviewer confirms that the report is valid, they will send personnel to conduct another on-site audit to confirm if it is qualified; we do not work with those rated D.

Regarding the non-monopoly goods or services, a bid is awarded based on each supplier's business condition; as for services, a bid is awarded based on the same service specifications; regarding equipment, a bid is awarded based on the standardized brand, specification, model, quantity, as well as delivery and payment terms. Prices, quality, delivery dates, business credit, environmental protection, and safety are considered before a bid is awarded. We plan to include the management of occupational health and safety, as well as energy conservation and emission reduction into suppliers' bidding conditions for future bidding projects. When signing an agreement, all suppliers should sign the Basic Transaction Agreement, the Construction Safety and Environmental Protection Agreement, the Supplier Integrity Commitment, the Warranty for Non-Use of Hazardous Substances, the Quality Assurance Agreement, and the Non-Disclosure agreement. We worked with 32 new suppliers during 2023, and $100\%$ of them were selected as per the environmental and social standards.

Local procurement

Adhering to the principle of local development and local supply, we actively work with local suppliers to make purchases timely and locally, to reduce management and operation costs, reduce carbon emissions caused by long-distance transportation, create local job opportunities, and promote economic prosperity. There were 302 suppliers who traded with us in 2024, including 262 suppliers in Guangdong Province, accounting for $86\%$ of all suppliers.

Green procurement

The Company attaches great importance to the impact of its operations on the environment and reduces carbon emissions. For example, it is carrying out a distributed photovoltaic energy storage system project. The planned installation area of photovoltaics is expected to be about 15,800 square meters. We will select equipment that is environmentally friendly, where possible.

Implementation of Climate-Related Information

Item

Implementation Status

1. Describe the board of directors' and management's oversight and governance of climate-related risks and opportunities.

1. The Board of Directors is the highest governing body for the Company's climate risk management. Its goal is to comply with regulations, oversee the company's overall climate-related risk management, understand the risks faced by operations, and ensure the effectiveness of risk management. For significant investments or plans related to climate actions, they are also monitored by the Board of Directors.

Item	Implementation Status
2. Describe how the identified climate risks and opportunities affect the business, strategy, and finances of the business (short, medium, and long term).	2. With the global trend toward achieving net-zero carbon emissions, the short-term impact of rising electricity costs due to high temperatures and the imposition of carbon fees by various countries in the medium to long term will inevitably increase the Company's product and operational costs. At the same time, brand customers' increasing demand for manufacturers to reduce carbon emissions and provide sustainable products will create new business opportunities for the Company. Therefore, in the short term, the Company will implement various energy-saving projects, replace energy-intensive equipment, and install additional solar panels. In the medium to long term, the Company will focus on energy-efficient factories, green processes (EPF), and reducing the carbon footprint of products.
3. Describe the financial impact of extreme weather events and transformative actions.	3. Extreme climate events may result in work stoppages, water shortages, flooding, power outages, and damage to power systems, leading to increased company expenses or operational losses. In addition, transition actions (as mentioned previously) will also increase the Company's capital expenditures.
4. Describe how climate risk identification, assessment, and management processes are integrated into the overall risk management system.	4. The Board of Directors is the highest decision-making body for the Company's risk management. To enhance management functions, the Board has approved the establishment of the "Sustainable Development Committee," responsible for identifying and managing operational risks, including physical and transition risks associated with climate change, and leading the planning of relevant response measures.
5. If scenario analysis is used to assess resilience to climate change risks, the scenarios, parameters, assumptions, analysis factors and major financial impacts used should be described.	5. The Company has not yet adopted scenario analysis for climate change risk assessment.
6. If there is a transition plan for managing climate-related risks, describe the content of the plan, and the indicators and targets used to identify and manage physical risks and transition risks.	6. To achieve energy conservation and reduce emissions, the Company has developed a comprehensive plan focused on actively cutting carbon emissions and increasing the use of renewable energy to lower its carbon footprint.
The Company has designated 2023 as the base year for tracking greenhouse gas emissions and setting reduction targets. The goals are as follows:
Reduce emissions by 15% in 2024; reduce emissions by 25% in 2025, in line with the energy efficiency and emissions reduction strategy.
7. If internal carbon pricing is used as a planning tool, the basis for	7. The Company has not yet implemented internal carbon pricing.

Item	Implementation Status
setting the price should be stated.
8. If climate-related targets have been set, the activities covered, the scope of greenhouse gas emissions, the planning horizon, and the progress achieved each year should be specified. If carbon credits or renewable energy certificates (RECs) are used to achieve relevant targets, the source and quantity of carbon credits or RECs to be offset should be specified.	8. In 2025, in accordance with relevant government regulations and the government’s renewable energy (green certificate) consumption target of 32%, the Company successfully purchased 13,800 domestic green energy certificates. In addition, the Company has engaged third-party firms to conduct greenhouse gas (GHG) inventory and verification. Data collection for the inventory is currently in progress, with 2023 set as the base year. According to the energy conservation and emission reduction plan, the Company aims to achieve a 15% reduction in emissions in 2024 and a 25% reduction in 2025.
9. Greenhouse gas inventory and assurance status and reduction targets, strategy, and concrete action plan (separately fill out in points 1-1 and 1-2 below).	9. Not applicable (In accordance with requirements by competent authority, the Company is required to disclose greenhouse gas inventory information starting in 2027 and to complete assurance disclosure by 2029).

(VI) The Company's implementation of ethical management and any deviation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and reasons therefor:

Item	Operations			Deviation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
I. Formulation of ethical management policies and plans
(I) Has the company formulated an ethical management policy approved by the board of directors and disclosed the policy and practice of ethical management in its regulations and public documents? Are the board of directors and the senior management committed to actively implementing the policy?	V	(I)	We engage in commercial activities based on the principles of fairness, honesty, integrity, and transparency. To implement the ethical management policy and actively prevent unethical conduct, we have formulated the Procedures for Ethical Management and Guidelines for Conduct, the Code of Ethical Conduct, and the Insider Trading	(I) No major difference.

Item	Operations
	Yes	No	Brief description
(II) Has the company established an assessment mechanism for the risk of unethical conduct to regularly analyze and evaluate the business activities with high risk of unethical conduct within the business scope and formulated a prevention plan accordingly, at least covering the prevention measures for the acts under each subparagraph under Article 7, paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies?	V	(II)	Prevention Management Procedures. The Chairman's Office is responsible for formulating ethical management policies and prevention plans supervising the implementation of the plans and reports to the Board of Directors per year to ensure the proper implementation of ethical management. No corruption incidents occurred during 2023. We have the risk and opportunity response and control procedures in place and have established comprehensive risk and opportunity management measures and an internal control system to reinforce our ability to resist risks, while guiding the inclusion and the adoption of such measures in the quality control system and the evaluation of the effectiveness of such measures.
1. The Vice President is responsible for regularly reviewing the risk management mechanism, and the Quality Department is responsible for establishing the risk	(II) No major difference.

Item	Operations
	Yes	No	Brief description
(III) Has the company clearly specified operating procedures, guidelines for conduct, and a violation punishment and complaint system in the unethical conduct prevention plan and duly implemented them? Does the company regularly review and revise said plan?	V	(III)	and opportunity response and control procedures; then, each department identifies potential risks in its business and formulates countermeasures based on the identified risks.
2. For identified risks, we prioritize discipline and integrity, strengthen ethical management, safeguard the Company’s assets, and protect stakeholders’ rights by formulating policies and measures, signing agreements with suppliers, and providing complaints and reporting channels.
We have formulated a corresponding prevention plan in the Procedures for Ethical Management and Guidelines for Conduct, which specifically defines the prohibition of the Company's personnel from directly or indirectly accepting illegitimate benefits and the handling procedures therefor.	(III) No major difference.
II. Implementation of ethical management

Item	Operations			Deviation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
(I) Does the company evaluate each counterparty’s records for ethics? Has the company specified the terms of ethical conduct in each contract signed with each counterparty?	V	(I)	Before forming business ties with others, we first evaluate the legitimacy of their agents, suppliers, clients, or other counterparties, the above parties’ ethical management policy, and whether said parties have a record of unethical conduct, while requiring the suppliers to sign an integrity commitment, to ensure that they conduct business in a fair and transparent manner without requesting, offering, or accepting bribes.	(I) No major difference.
(II) Has the company established a dedicated (concurrent) unit under the board of directors to conduct ethical corporate management, regularly (at least once a year) report to the board of directors on its ethical management policies and prevention plans for unethical conduct, and supervise the implementation?	V	(II)	The Company has a Chairman's Office in place, which is directly governed by the Board of Directors, and has formulated the Procedures for Ethical Management and Guidelines for Conduct. The Chairman's Office is responsible for formulating ethical management policies and prevention plans supervising the implementation of the plans and reporting to the Board of Directors per year.	(II) No major difference.
(III) Has the company formulated policies to prevent conflicts of interest, provided appropriate	V	(III)	The Company's Procedures for Ethical Management and	(III) No major difference.

Item	Operations			Deviation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
methods for stating one’s conflicts of interest, and implemented them appropriately?	V		Guidelines for Conduct specifically specify the recusal from matters in which personal interest is involved.

(IV) The chief internal auditor is appointed in accordance with the regulations, with the necessary educational attainment and experience to hold the position. The auditor modifies the internal control system at any time in accordance with laws and regulations, duly implements the internal control system inspection and internal audit work, regularly submits an audit report by the audit unit to the Audit Committee for review, and reports to the Board of Directors in a non-voting capacity.

(V) Does the company regularly hold internal and external education and training on ethical management? | (IV) No major difference. |
| (IV) Does the company regularly hold internal and external education and training on ethical management? | V | | (V) Employees will be required to read the Rules and Regulations and the Code of Integrity on their first day of work and sign off after reading. Human Resources personnel will also raise employees’ awareness in real time to ensure that they understand the Company’s Code of Conduct. | (V) No major difference. |
| III. Implementation of the Company’s | | | | |

Item	Operations			Deviation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
whistleblowing system
(I) Has the company formulated a specific whistleblowing and reward system, established a convenient whistleblowing method, and assigned appropriate personnel to handle the party accused?	V		(I) The Board of Directors passed the Procedures for Handling Cases of Illegal and Unethical or Dishonest Conduct in December 2016, which specify the unit accepting reports, reporting channels (such as phone, email, or letters), handling procedures, and relevant incentive programs, to duly implement the Company’s Code of Ethical Conduct and Ethical Corporate Management Best Practice Principles and ensure that whistleblowers’ and counterparties’ legal rights.	(I) No major difference.
(II) Has the company formulated standard operating procedures for investigation of reported cases, the follow-up measures to be taken after the investigation is completed, and a confidentiality mechanism?	V		(II) We handle reported cases in a confidential manner and investigate the cases through independent channels, and the relevant processing procedures are specified in the Procedures for Handling Cases of Illegal and Unethical or Dishonest Conduct.	(II) No major difference.
(III) Does the company take measures to protect whistleblowers from being mistreated due to their whistleblowing behavior?	V		(III) We take protective measures to protect whistleblowers in accordance with relevant internal regulations, to prevent them from improper	(III) No major difference.

Item	Operations			Deviation from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
			treatment due to whistleblowing.
IV. Enhanced information disclosure Has the company disclosed the content of its Ethical Corporate Management Best Practice Principles and the effectiveness of the implementation of the principles on its website and the MOPS?	V		We disclose the content of the Ethical Corporate Management Best Practice Principles and the implementation results in the Ethical Corporate Management section on the official website and in the CSR report.	No major difference.
V. If the company has formulated its own Ethical Corporate Management Best Practice Principles as per the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, please specify the difference between its operation and the principles: There is no difference between the Ethical Corporate Management Best Practice Principles and the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies.
VI. Other important information that facilitates the understanding of the company's ethical management (e.g., reviewing and amending the company's corporate governance best practice principles): 1. The Company complies with the Company Act, the Securities and Exchange Act, the Business Entity Accounting Act, the regulations on listing on Taiwan Stock Exchange and Taipei Exchange, or other business conduct laws and regulations as the basis for implementing ethical management. 2. The Company's Rules of the Procedure for Board of Directors Meetings has specified a mechanism for directors to recuse themselves from discussion and voting on proposals in board meetings, in which their person interest is involved and may jeopardize the Company's interest. while they may state their opinions and answer questions and shall not exercise their voting rights on behalf of other directors. 3. The Company requires employees to comply with the regulations on trade secrets and not to disclose the Company's trade secrets to others; prohibits them from inquiring about or collecting information on trade secrets that are not related to their work, while requiring them to abide by the Securities and Exchange Act and not to use the undisclosed information to engage in insider trading, nor disclose it to others, thereby preventing other parties from using the undisclosed information to engage in insider trading.

Note: Either "Yes" or "No" checked, the operation shall be specified in the brief description column.

(VII) Other important information that may facilitate the understanding of the operation of corporate governance:

We also have the Procedures for Ethical Management and Guidelines for Conduct and the Code of Ethical Conduct in place to strengthen corporate governance and have published them on the official website.

(VIII) Implementation of the internal control system:

Statement of the Internal Control System :Disclosed in Public Information Observatory
For those who appointed a CPA to review the internal control system, the CPA's review report shall be disclosed: None.

(IX) Important resolutions by the shareholders' meeting and the Board of Directors in the most recent year and up to the publication date of the annual report:

Important resolutions by the shareholders' meeting

Date of meeting	Resolution	Resolution result	Implementation
2024.05.31	1. Ratification of the 2023 financial statements.	The total number of votes represented by the shareholders present upon voting on this proposal was 57,356,952; after voting, there were 56,802,678 votes for and 2,876 votes against this proposal, zero invalid, and 551,398 abstentions/uncast votes; the number of votes for this proposal accounted for 99.03% of the total votes represented by the shareholders present. This proposal was passed by voting as proposed.	The 2023 business report and financial statements were ratified by the resolution of the shareholders' meeting and were published online on May 31, 2024.
	2. Ratification of the 2023 statement of earnings distribution: A cash dividend of $0.5 per share.	The total number of votes represented by the shareholders present upon voting on this proposal was 57,356,952; after voting, there were 56,883,673 votes for and 2,879 votes against this proposal, zero invalid, and 470,400 abstentions/uncast votes; the number of votes for this proposal accounted for 99.17% of the total votes represented by the shareholders present. This proposal was passed by voting as proposed.	As per the resolution by the shareholders' meeting, we announced online on May 31, 2024 that July 23 was the ex-dividend record date and completed the payout of cash dividends of $0.5 per share, totaling $41,920,000, on August 2.
	3. Proposal to amend the Company's "Rules of Procedure for Shareholders' Meetings".	The total number of votes represented by the shareholders present upon voting on this proposal was 57,356,952; after voting, there were 56,883,644 votes for and 2,938 votes against this proposal, zero invalid, and 470,370 abstentions/uncast votes; the number of votes for this proposal accounted for 99.17% of the total votes represented by the shareholders present. This proposal was passed by voting as proposed.	As per the resolution by the shareholders' meeting, we announced it online on May 31, 2024 and proceeded as per the amended version.
	4. Election of 7 directors (including 3 independent directors)	Election Results: List of elected directors: Number of votes received by the elected person. Yu Che-Ming 129,066,609 Rights Huang, Chien-Chung 47,412,552 Rights Chen Nai-Rong 47,405,928 Rights Zhuang Wu-Chuan 47,397,471 rights List of elected independent directors: Number of votes received by the elected person. Lin Shen-Sheng 41,017,309 Rights Lai Chia-Yi 38,461,556 Rights Chen Hsu-Yi 37,951,554 Rights	As per the resolution by the shareholders' meeting, we announced it online on May 31, 2024.

2. Important resolutions by the Board of Directors

Date and term of the board meeting	Important resolutions and subsequent actions	Matters under Article 14-3 of the Securities and Exchange Act
6th term 21st meeting 2024.03.14	1. The 2023 directors' remuneration proposal. (Directors Chen, Lin, Ouyang, and Shen recused themselves due to a conflict of interest)	V
	2. The Company's 2023 business report and financial statements.	V
	3. The Company's 2023 earnings distribution proposal.	V
	4. Follow-up procedures for major overdue accounts receivable.
	5. Issuance of the "Statement of the Internal Control System".
	6. The proposal for the re-election of the Company's board of directors (including independent directors).
	7. Matters related to convening of the Company's 2024 shareholders' meeting.
	8. Due to short-term financing requirements, the Company's subsidiary, Lofty Success Group Limited ("Lofty Success"), proposed to lend of funds in the amount of US$3 million to Hiroca Automotive Trim Corporation ("Hiroca Automotive"), the other affiliate of the Company.	V
	9. Due to business requirements, the Company's subsidiary Lofty Success Group Limited proposes to sign a short-term loan contract with Shanghai Commercial and Savings Bank with a credit limit of US$3 million. The Chairman is authorized to sign and deliver the loan contract and all related loan documents on behalf of the Company.	V
	10. Due to business requirements, the Company's subsidiary Lofty Success Group Limited proposes to renew the short-term loan contract with E.SUN Bank Hong Kong Branch with a credit limit of US$6 million. The Chairman is authorized to sign and deliver the loan contract and all related loan documents on behalf of the Company.	V
	11. The Vice President, Hideyuki Ichikawa, has been transferred to a different position due to business need; therefore, the Company proposes to terminate his role as manager on the date of approval of the Board of Directors in accordance with company regulations.
	Independent directors' opinions: None.
	The Company's response to said opinions: None.
	Resolution result: Passed unanimously by all directors in attendance.
6th term 22nd meeting 2024.04.18	1. Hiroca Automotive Trim Corporation ("Hiroca Automotive"), a 100% owned subsidiary of Lofty Success Group Limited, a subsidiary of the Company, leased the land and factory premises of the High-end Equipment Manufacturing Center Project (Phase I) from Xitou Joint-Stock Economic Federation, Houjie Town, Dongguan City.	V
	2. Review the list of director (including independent director) candidates proposed by the Company's shareholders.
	3. The change of the company's corporate governance officer.
	4. The dismissal and appointment of the company's managerial officer. (Note: Chairman Yu recused himself from voting due to a conflict of interest)	V

Date and term of the board meeting	Important resolutions and subsequent actions	Matters under Article 14-3 of the Securities and Exchange Act
	5. The Company's investee company Lofty Success Group Limited (“Lofty Success Group”) proposes to reclassify the accounts receivable from Hirotai Investment Limited (“Hirotai Investment”) as loans in accordance with regulations.	V
	6. Dong Guan Hirosawa Automotive Trim Co., Ltd. (“Dong Guan Hirosawa”), a wholly-owned subsidiary of the Company's investee Lofty Success Group Limited, proposes to reclassify the accounts receivable from Dongguan Conserve & Associates, Inc. as loans in accordance with regulations.	V
	7. Dong Guan Hirosawa Automotive Trim Co., Ltd. (“Dong Guan Hirosawa”), a wholly-owned subsidiary of the Company's investee Lofty Success Group Limited, proposes to reclassify the accounts receivable from Dongguan Mono Hirosawa Automotive Trim Co. (Dongguan Mono Hirosawa) as loans in accordance with regulations.	V
	8. To improve its financial structure and raise medium-to-long-term operating capital, the Company's subsidiary, Lofty Success Group Limited, proposes to sign a three-year medium-term loan agreement for USD 8 million with Mega International Commercial Bank, with the Company providing a guarantee. The feasibility of this proposal is under review.	V
	9. Established the Sustainability Development Committee and discussed related charter.
	Independent directors' opinions: None.
	The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
6th term 23rd meeting 2024.05.13	1. The Company's Consolidated Financial Statements for the first quarter of 2024.
	2. Follow-up procedures for major overdue accounts receivable.
	3. The proposal to remove the non-compete clause for new director.	V
	4. The Company's subsidiary, Hiroca Automotive Trim Corporation LTD. (Hiroca Automotive), established a joint venture in Korea with SKCCoLtd.	V
	5. Renewal of the Company's Directors and managers' liability insurance policy.
	6. Proposal for amendments of general principles for the Company's advance approval of non-assurance services.
	7. Dong Guan Hirosawa Automotive Trim Co., Ltd. (“Dong Guan Hirosawa”), a wholly owned subsidiary of the Company's subsidiary Lofty Success Group Limited (“Lofty Success Group”), proposes to distribute cash dividends.
	8. The subsidiary Lofty Success Group Limited (“Lofty Success Group”) proposes to distribute cash dividends.
	9. Wuhan Hiroyushi Automotive Trim Co., Ltd. and Kaifeng Hiroyushi Automotive Trim Co., Ltd., investee companies of the Company's subsidiary Lofty Success Group Limited, signed a short-term loan for shared working capital totaling RMB 30 million with E.SUN Bank Shenzhen Branch, and requested the Company to issue a Letter of Support.
	10. Wuhan Hiroyushi Automotive Trim Co., Ltd., an investee company of the Company's subsidiary Lofty Success Group Limited, signed a short-term loan for working capital totaling RMB 30 million with Bank SinoPac (China) Guangzhou Branch, and requested the Company to issue a Letter of Support.
	11. Due to short-term financing requirements, Dong Guan Hirosawa Automotive Trim Co., Ltd. (“Dong Guan Hirosawa”), an investee company of the Company's subsidiary Lofty Success Group Limited, proposes to loan RMB 5 million to the wholly-owned subsidiary Hunan Hiroyushi Automotive Trim Co., Ltd. (“Hunan Hiroyushi”).	V
	Independent directors' opinions: None.

Date and term of the board meeting	Important resolutions and subsequent actions	Matters under Article 14-3 of the Securities and Exchange Act	Objection or reservation by any independent directors
	The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term1st meeting2024.05.31	1. Re-election of the Chairman of the Board of Directors.
2. Appointment of members of the 6th term Audit Committee of the Company.
3. Appointment of members of the Remuneration Committee of the Company.
Independent directors' opinions: None.
The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term2nd meeting2024.06.20	1. The proposal for the Company's 2024 ex-dividend date for the cash dividends and dates for related operations.
2. Appointment of members of the Sustainable Development Committee of the Company.
3. The Company's subsidiary, Hiroca Automotive Trim Corporation entered into a lease contract for the Xinpu Plant with Xingxi Science and Technology Co., Ltd. (Note: Chairman Yu recused himself from voting due to a conflict of interest)	V
Independent directors' opinions: None.
The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term3rd meeting2024.08.15	1. The Company proposed to repurchase its own shares to maintain its credit and protect shareholders' interests.
Independent directors' opinions: None.
The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term4th meeting2024.08.26	1. The Company's Consolidated Financial Statements for the second quarter of 2024.
2. Follow-up procedures for major overdue accounts receivable.
3. The subsidiary Lofty Success Group Limited (“Lofty Success Group”) proposed to participate in the cash capital increase of Conserve& Associates, Inc. (“Conserve & Associates”). (Chairman Yu and Director Chen recused themselves due to a conflict of interest)	V
4. Due to short-term financing requirements, Dong Guan Hirosawa Automotive Trim Co., Ltd. (“Dong Guan Hirosawa”), an investee company of the Company's subsidiary Lofty Success Group Limited, proposes to loan RMB 35 million to Wuhan Hiroyushi Automotive Trim Co., Ltd. (“Wuhan Hiroyushi”), another investee of the Company.	V
5. Due to short-term financing need and and the construction of production lines, the Company's subsidiary, Lofty Success Group Limited (“Lofty Success”), proposed to increase the amount of loan from US$ 3 million to US$ 6 million to Hiroca Automotive Trim Corporation (“Hiroca Automotive”), another 100% owned subsidiary of the Company.	V
Independent directors' opinions: None.
The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term5th meeting2024.11.13	1. The Company's Consolidated Financial Statements for the third quarter of 2024.
2. Review the follow-up procedures for major overdue accounts receivable.
3. The Company proposed to change the original purpose of share buyback to transfer of shares to employees.
4. Proposal for amendments of general principles for the Company's advance approval of non-assurance services.
Independent directors' opinions: None.
The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term6th meeting	1. The Company's 2025 budget.
2. Reviewed and evaluated directors' remuneration proposal.	V

Date and term of the board meeting	Important resolutions and subsequent actions	Matters under Article 14-3 of the Securities and Exchange Act
2024.12.27	3. The manager's 2024 employee bonus distribution proposal.	V
4. Reviewed the managers' monthly salary structure, year-end bonuses, and employee bonuses.	V
5. Amendment to the Company's first share buyback and transfer to employees as requested by the Securities and Futures Bureau of the Financial Supervisory Commission (FSC).
6. Establishment of the 2025 audit plan for the Company and important subsidiaries.
7. Added the Company's "Regulations on Sustainable Information Management" and amended the internal control system and internal audit system.	V
8. Amendment to the Corporate Governance Best Practice Principles.
9. Change of the Company's spokesperson.
10. In order to effectively promote the sustainable development of ESG in the Company, the Company has proposed to formulate the Regulations on ESG KPI Management.
11. Recognition of the current bank credit limits of the Group.
Independent directors' opinions: None.
The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term 7th meeting 2025.01.13	1. To boost employee morale and retain talent, the Company plans to buyback its own shares for transfer to employees.
Independent directors' opinions: None.
The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term 8th meeting 2025.02.14	1. Investment and planning of the film production line for the Hiroca Automotive Trim Corporation (Hiroca Taiwan), the subsidiary of the Company. (Chairman Yu, Tse-Min recused himself)	V
2. The Company's subsidiary, Hiroca Automotive Trim Corporation (Hiroca Taiwan), participated in the capital increase of a joint venture, HS Automotive Trim Co.	V
3. Due to short-term financing need and and the construction of production lines, the Company's subsidiary, Lofty Success Group Limited ("Lofty Success"), proposed to loan of funds for amount of US$ 9 million to Hiroca Automotive Trim Corporation (Hiroca Taiwan), the another 100% owned subsidiary of the Company.	V
4. Matters related to convening of the Company's 2025 shareholders' meeting.
5. The implementation status of the Company's treasury stock buyback in 2024.
6. Amendment to the Company's first and second share buyback and transfer to employees as requested by the Securities and Futures Bureau of the Financial Supervisory Commission (FSC).
7. The results of the ESG KPI self-assessment of the Company for the year 2024 are submitted for discussion.
8. The proposal to remove the non-compete clause for new directors.	V
Independent directors' opinions: None.
The Company's response to said opinions: None.
Resolution result: Passed unanimously by all directors in attendance.
7th term 9th meeting 2024.03.14	1. 2024 directors' remuneration proposal. (Directors Lin, Lai, Chen and Chen recused themselves due to a conflict of interest)	V
2. The Company's 2024 business report and financial statements.	V
3. The Company's 2024 earnings distribution proposal.	V
4. Follow-up procedures for major overdue accounts receivable.
5. Issuance of the "Statement of the Internal Control System".
6. Proposal for changing the organizational structure of the Group.
7. Appointment of the Company's new audit manager.	V

Date and term of the board meeting	Important resolutions and subsequent actions	Matters under Article 14-3 of the Securities and Exchange Act
	8. Amendments to the Articles of Incorporation.	V
	9. Amendments to the “Rules of Procedure for Board of Directors Meetings”.
	10. Amendments to the “Audit Committee Charter”.
	11. The dismissal of the Company's managerial officer.
	Independent directors’ opinions: None.
	The Company's response to said opinions: None.
	Resolution result: Passed unanimously by all directors in attendance.
7th term
10th meeting
2025.03.24	1. By-election of independent directors and nomination and review of independent director candidates of the Company.
	2. Matters related to convening of the Company’s 2025 shareholders’ meeting.
	Independent directors’ opinions: None.
	The Company's response to said opinions: None.
	Resolution result: Passed unanimously by all directors in attendance.

(X) Other matters resolved by the Board of Directors with objection or reservation made by any independent directors or supervisors, with records or a written statement during the most recent year and up to the date publication of this annual report: None.

3.4 Information on the Company’s audit fees

Unit: NT$ thousand

Accounting firm	Name of CPA	Audit period	Audit fees	Non-audit fees	Total	Remarks
KPMG Taiwan	Chen,Yi-Chun	2024.01.01 ~ 2024.12.31	7,979	-	7,979
	Lien,Shu-Ling	2024.01.01 ~ 2024.12.31

Specify the non-audit service contents: For reviewing the issuance of unsecured corporate bonds and issuing opinion letters.

(I) When the Company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons shall be disclosed: None.

(II) When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 10 percent or more, the reduction in the amount of audit fees, reduction percentage, and reason(s) thereof shall be disclosed: None.

3.5 Replacement of CPAs: No differences since 2023

3.6 Where directors, the President, the chief financial officer, or the chief accounting officer has been employed by the accounting firm or its affiliates during the most recent year, the name, title, and period of employment at the firm where the CPAs work or its affiliate shall be disclosed:

None.

3.7 The changes in the transfer or pledge of equity shares by directors, supervisors, managers, or shareholders holding more than 10% of the shares issued by the Company in the most recent year and up to the publication date of this annual report: Disclosed in Public Information Observatory

(I) The counterparty to which the equity is transferred is a related party: None.
(II) The counterparty for which the equity is pledged is a related party: None.

3.8 Information on the top ten shareholders who are related parties to each other or spouses or relatives within the second degree of kinship of another

March 31,2025

| Name
(Note 1) | Shareholding | | Shareholding of spouse or minor children | | Total shareholding by nominee arrangement | | Information on the relationship among the top 10 shareholders if anyone is a related party, a spouse, or a relative within second degree of kinship of another and their names (Note 3) | | Remarks |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Number of shares | Share-holding | Number of shares | Share-holding | Number of shares | Share-holding | Title (or name) | Relationship | |
| Yu,Che-Ming | 14,220,847 | 16.96% | — | — | 2,719,245 | 3.24% | (1) Profit UP Group Ltd.
(2) Lin, Mei-ying
(3) Lin, Tian-fa | (1) Legal representative of the company
(2) Relative within the second degree of kinship
(3) Relative within the second degree of kinship | — |
| Cheng Hui-Min | 3,813,899 | 4.55% | — | — | — | — | — | — | — |
| Profit UP Group Ltd.
Representative Yu, Che-Ming | 2,719,245 | 3.24% | — | — | — | — | (1) Yu,Che-Ming
(2) Lin, Mei-ying
(3) Lin, Tian-fa | (1) Legal representative of the company
(2) The legal representative of the company is a relative within the second degree of kinship
(3) The legal representative of the company is a relative within the second degree of kinship | — |
| | 14,220,847 | 16.96% | — | — | 2,719,245 | 3.24% | | | |
| Iiroca Holdings Limited
Treasury Stock Account | 2,098,000 | 2.50% | — | — | — | — | — | — | — |
| Hong, Qing-Zhon | 1,754,000 | 2.09% | — | — | — | — | — | — | — |
| Y.C.C. PARTS MFG. CO., LTD.
Representative Hao-Chen Lin | 1,298,000 | 1.55% | — | — | — | — | — | — | — |
| | — | — | — | — | — | — | | | |
| TransGlobe Life Insurance Inc.
Representative Lin, Wen-Hui | 1,256,000 | 1.50% | — | — | — | — | — | — | — |
| | — | — | — | — | — | — | | | |
| Huang, Zheng-Yuan | 1,240,000 | 1.48% | — | — | — | — | — | — | — |
| Lin, Mei-ying | 1,213,935 | 1.45% | — | — | — | — | (1) Yu,Che-Ming
(2) Profit UP Group Ltd.
(3) Lin, Tian-fa | (1) Relative within the second degree of kinship
(2) Relative within the second degree of kinship of the representative
(3) Relative within the second degree of kinship | — |
| Lin, Tian-fa | 1,172,000 | 1.40% | — | — | — | — | (1) Yu,Che-Ming
(2) Profit UP Group Co., Ltd.
(3) Lin, Mei-ying | (1) Relative within the second degree of kinship
(2) Relative within the second degree of kinship | — |

Note.1 All the top ten shareholders shall be listed, and if they are institutional shareholders, the names of the institutional shareholders and their representatives shall be listed separately.

Note.2 The shareholding refers to each individual’s shareholding or shareholding of their spouse or minor children or by nominee arrangement.

Note.3 The shareholders listed above include juridical persons and natural persons, and the relations between them shall be disclosed as per the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

3.9 The total number of shares held and the combined shareholdings in any single investee by the Company, its directors, supervisors, managers, or any companies controlled either directly or indirectly by the Company

Combined shareholdings

March 31, 2025 Unit: Share; %

| Investee
(Note 1) | Investment by the Company | | Investment by directors, supervisors, managers, or any companies controlled either directly or indirectly by the Company | | Combined investment | |
| --- | --- | --- | --- | --- | --- | --- |
| | Number of shares | Shareholding (%) | Number of shares | Shareholding (%) | Number of shares | Shareholding (%) |
| Lofty Success Group | 38,285,716 | 100% | - | - | 38,285,716 | 100% |
| Dongguan Hirosawa | Note2 | 100% | - | - | Note2 | 100% |
| Hunan Hiroyoshi | Note2 | 100% | - | - | Note2 | 100% |
| Kaifeng Guangjia | Note2 | 100% | - | - | Note2 | 100% |
| Xianyang Hiroyush | Note2 | 100% | - | - | Note2 | 100% |
| Dongugan Karyu | Note2 | 51% | - | - | Note2 | 51% |
| Dongugan Losang-Hirosawa | Note2 | 30% | - | - | Note2 | 30% |
| Hirogen International | 19,414,080 | 79% | - | - | 19,414,080 | 79% |
| Hiroyoshi Investment | 32,500,000 | 100% | - | - | 32,500,000 | 100% |
| Wuhan Hiroyoshi | Note2 | 100% | - | - | Note2 | 100% |
| Hiroyuki Investment | 3,309,477 | 100% | - | - | 3,309,477 | 100% |
| WIN INC. | 25,480 | 49% | - | - | 25,480 | 49% |
| Yoshisawa Investment | 880,000 | 100% | - | - | 880,000 | 100% |
| Hirotai Investment | 29,475,000 | 68.55% | - | - | 29,475,000 | 68.55% |
| Smart Sense Holding | 500,000 | 100% | - | - | 500,000 | 100% |
| Hirotai Automotive Trim SA DE CV | 739,627,198 | 68.55% | - | - | 739,627,198 | 68.55% |

Hirosawa Automotive Trim USA Co.	60,000	100%	-	-	60,000	100%
Dongguan Mono	Note2	49%	-	-	Note2	49%
Hiroca Technology	Note2	100%	-	-	Note2	100%
Suzhou Hiroyuki	Note2	51%			Note2	51%
Hiroca Taiwan	16,335,367	100%			16,335,367	100%
Chongqing Rebo	1,886,637	1.15%			1,886,637	1.15%
Shin Shih Technology	5,160,000	30%			5,160,000	30%
HS Automotive Trim Co., Ltd.	30,600	51%			30,600	51%
Conserve & Associates	2,414,400	7.27%			2,414,400	7.27%

Note 1: It is an investment made by the Company using the equity method.
Note 2: It is a limited company, so it does not hold shares

IV. Fund Raising

3.1 Capital and shares

(I) Source of share capital

The formation of share capital

Month/Year	Par Value	Authorized Capital		Paid-in Capital		Note
		Shareholding (shares)	Amount	Shareholding (shares)	Amount	Source of Capital	Capital Increase by Assets Other than Cash	Others
2009.12	USD 1	11,428,580	USD11,428,580	11,428,580	USD11,428,580	Establish and issue new shares and shareholders of Softy Group for stock exchange	—
2000.04	-	150,000,000	NTD1,500,000,000	36,097,169	NTD360,971,690	Note1	—
2000.04	NTD 10	150,000,000	NTD1,500,000,000	60,000,000	NTD600,000,000	Capital increase by capital reserves	—	Note2
2000.04	NTD 64	150,000,000	NTD1,500,000,000	63,000,000	NTD630,000,000	Capital increase by cash	—	Note3
2002.12	NTD 80	150,000,000	NTD1,500,000,000	71,000,000	NTD710,000,000	Capital increase by cash	—	Note4
2003.05	NTD 10	150,000,000	NTD1,500,000,000	78,100,000	NTD781,000,000	Capital increase by retained earnings	—	Note5
2004.07	NTD103	150,000,000	NTD1,500,000,000	85,000,000	NTD850,000,000	Capital increase by cash	—	Note6
2005.03		150,000,000	NTD1,500,000,000	83,840,000	NTD838,400,000	Treasury shares reduction	-	Note7

Note:
1. The Board of Directors (2010.4.9) and the shareholders' meeting on (2010.4.19) passed a resolution to amend the Articles of Incorporation and the memorandum, in which the par value of the share capital was changed from US$1 to NT$10, the authorized share capital was increased to $1,500,000 thousand, and the paid-in capital was converted from US$11,428,580 into NT$360,971,690 at a rate of 1 USD to 31.585 NTD.
2. The Board of Directors (2010.4.9) and the shareholders' meeting on (2010.4.19) passed a resolution to capitalize capital surplus to increase the capital by NT$239,028,310.
3. The Board of Directors (2010.4.9) passed a resolution to conduct a cash capital increase by NT$30,000,000 at NT$64 per share, and the payment was completed on 2010.4.28. (As an overseas company before being listed on the emerging stock market, no approval number was available.)
4. The Board of Directors (2012.12.12) passed a resolution to conduct a cash capital increase by NT$80,000,000 at NT$80 per share, and the payment was completed on 2012.12.17. Effective date and document number: 2012.11.7; Jin-Guan-Zheng-Fa No. 1010049770.
5. The Board of Directors (2013.3.21) and the shareholders' meeting on (2013.5.24) passed a resolution to capitalize earnings to increase the capital by NT$71,000,000. The effective date and the competent authority's approval number for the capitalization was 2014.7.23 and Tai-Zeng-Shang-II No. 1020014607, respectively.
6. The Board of Directors (2014.03.24) passed a resolution to conduct a cash capital increase by NT$69,000,000 at NT$103 per share, and the payment was completed on 2014.7.7. Effective date and document number: 2014.5.23; Jin-Guan-Zheng-Fa No. 1030017675.
7. The Board of Directors (2015.03.06) passed a resolution to repurchase treasury shares and cancel them, and the change was completed on 2015.3.18. The approval date and document number for the cancellation were 2015.3.13 and Tai-Zeng-Shang-II No. 1040004392.

100

101

2. Type of stock

As of March 31, 2025

Share Type	Authorized Capital (shares)			Note
	Issued Shares	Unissued Shares	Total
Common stock	83,840,000(note)	66,160,000	150,000,000	Listed stock

(II) List of major shareholders

Names of shareholders whose individual shareholding exceeds 5% or shareholders whose individual shareholding rank in the top ten, number of shares held, and shareholding (%)

As of March 31 2025

| Shareholding
Name of Major Shareholders | Number of shares held | Shareholding (%) |
| --- | --- | --- |
| Yu,Che-Ming | 14,220,847 | 16.96% |
| Cheng Hui-Min | 3,813,899 | 4.55% |
| Profit UP Group Ltd. | 2,719,245 | 3.24% |
| Hiroca Holdings Limited Treasury Stock Accoun | 2,098,000 | 2.50% |
| Hong, Qing-Zhon | 1,754,000 | 2.09% |
| Y.C.C. PARTS MFG. CO., LTD. | 1,298,000 | 1.55% |
| TransGlobe Life Insurance Inc. | 1,256,000 | 1.50% |
| Huang, Zheng-Yuan | 1,240,000 | 1.48% |
| Lin, Mei-ying | 1,213,935 | 1.45% |
| Lin, Tian-fa | 1,172,000 | 1.40% |

(III) Dividend policy and implementation

The dividend policy stipulated in the Articles of Incorporation.

As per Article 130 of the Articles of Incorporation, the rules of dividend distribution are as follows:

The Company is in the growth stage. The Company's dividends will be distributed to the shareholders in cash and/or stock based on the needs for capital expenditure, business expansion, and a complete financial plan, as well as the Company's future capital expenditure budget and capital needs to ensure sustainable development.

Unless otherwise stipulated by Taiwan Stock Exchange’s regulations, if the Company makes a profit for a year, the Board of Directors shall make an earnings distribution proposal in the following method and order and submit it to the shareholders’ meeting for resolution:

(a) Profit shall be used for paying taxes;
(b) Offsetting a cumulative deficit (if any);
(c) Setting aside 10% of the remaining profit as a legal reserve unless it has reached the total amount of the Company’s paid-in capital;
(d) Setting aside a special reserve in accordance with Taiwan Stock Exchange’s regulations laws or the competent authority’s requirement;
(e) Any remaining profit (the year’s earnings less (a) to (d), together with any undistributed retained earnings from the beginning of the period (hereinafter referred to as the “cumulative distributable earnings”), shall be adopted by the Company’s Board of Directors as the basis for making a distribution

proposal, which shall then be submitted to the shareholders’ meeting for a resolution before distribution as per Taiwan Stock Exchange’s regulations. The dividends can be distributed in cash and/or stock, and at least 15% of the year’s distributable earnings shall be set aside for distribution, and the cash dividends to be paid out should not be lower than 20% of the total dividends to be paid out.

Except for the circumstances stipulated in Article 130A of the Articles of Incorporation, when the Company has no cumulative distributable earnings, it shall not distribute dividends and bonuses.

This year’s approved distribution of the dividends:

The Board of Directors, on March 14, 2025, approved the distribution of shareholders' cash dividend of NT$0.75 per share, totaling NT$ 62,880,000, and will submit it to the 2025 general shareholders’ meeting for ratification.

(IV) The influence of the stock dividend proposed at the shareholders' meeting on the Company's operating performance and earnings per share:

No stock dividend proposed to this year's shareholders' meeting.

(V) Employee remuneration and directors’ remuneration:

As per the Articles of Incorporation, if the Company makes a profit for a year, it shall offset a cumulative deficit, if any; allocate no higher than 3% of the annual income before tax as the remuneration to directors in cash by the resolution of the Board of Directors; allocate no higher than 7% and no lower than 1% as employee remuneration in stock or cash to employees at the Company or affiliates who meet certain criteria. The resolution shall also be reported to the shareholders' meeting. Said income before tax shall include the amount of employees' remuneration and director's remuneration to be paid out.

Basis for estimation of employee remuneration and directors’ remuneration in this period, basis for the calculation of the number of shares for stock dividends to employees, and accounting treatment if the amount paid out is different from the estimated amount:

The Company's employee remuneration and directors' and supervisors' remuneration are appropriate estimates based on applicable laws and regulations, the Articles of Incorporation, and past experience. Any discrepancy between the distributed amount and the estimated amount will be treated as a change in the accounting estimates and recognized as profit or loss for the following year.

Distribution of employee remuneration approved by the Board of Directors:

(a) Distribution of employee remuneration in cash or stock and remuneration to directors and supervisors: The company had a loss in 2024 and did not distribute employee remuneration and director remuneration.

(b) The amount of employee remuneration in stock as a percentage of the sum of net income after tax and the total employee dividends for this period: N/A (The Company did not distribute employee remuneration in stock.)

(c) Estimated earnings per share after the proposed employee remuneration and directors’ and supervisors’ remuneration are distributed: N/A (The Company did not distribute employee remuneration.)

(d) The employee remuneration and directors’ remuneration paid out for the prior year:

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The Company did not pay any employee or director remuneration in 2023.

(VI) The repurchase of the Company's shares (repurchase completed):

The company repurchases its own shares (if completed)

As of March 31, 2025

Buyback Period	1st time (period)	2nd time (period)
Purpose of buying back	Transferring shares to employees	Transferring shares to employees
Buyback period	August 16, 2024 to October 15, 2024	January 23, 2025 to March 22, 2025
Buyback range price	21~45	20~38
Type and quantity of shares repurchased	1,500,000 shares	598,000 shares
Amount of shares repurchased	49,521,007 NTD	18,135,210 NTD
The ratio of the purchased quantity to the scheduled purchased quantity (%)	75%	59.8%
Number of shares cancelled and transferred	0 shares	0 shares
Cumulative number of shares held in the company	1,500,000 shares	2,098,000 shares
Cumulative number of shares held in the Company	1.79%	2.50%
Total number of issued shares (%)

3.2 Corporate bonds (including overseas corporate bonds):

(I) Issuance of the Company's corporate bonds a of the publication date of this annual report:

Types of corporate bonds	The first unsecured convertible corporate bonds in the Republic of China
Date of issuance	January 19, 2021
Par value	NT$100,000
Place of issuance and trading	Taipei Exchange
Issue price	Issued at the face value
Total amount	NT$600 million
Interest rate	Coupon rate: 0%
Term	Five years Maturity date: January 19, 2026
Guarantee institution	N/A
Trustee	Trust Division, Bank SinoPac
Underwriting institution	IBF Securities Co., Ltd.
Attorney	Chen, Yu-Liang, attorney at Jheding International Law Offices
CPAs	Chiang, Chung-I and Lien, Shu-Ling, CPAs at KPMG Taiwan
Repayment method	Unless the convertible corporate bond holders plan to convert the bonds into the Company's ordinary shares in accordance with Article 14 of these rules, or the bondholders exercise the right to reverse repurchase in accordance with Article 23 of these rules, or the Company redeems the bonds early in accordance with Article 22, or the Company repurchases the bonds and cancels them at the premises of the securities firm, the Company shall redeem the bonds in cash at the face value of the bonds in a lump sum upon the maturity date.
Outstanding principal	NT$ 0 (as of March 31, 2024)
Terms of repurchase or early redemption	As per Article 22 of the Company's bond issuance and conversion rules, from the day after the bonds have been issued for three months

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		to 40 days before the end of the issuance period, if (1) the closing price of the Company’s common stock in the centralized trading market is at least 30% higher than the If the conversion price for 30 consecutive business days, the Company may, within the following 30 business days, or (2) when the outstanding balance of the convertible corporate bonds is lower than 10% of the total issuance amount, Company shall send a letter to request Taipei Exchange to make an announcement and redeem the bondholder’s convertible corporate bonds at the face value of the bonds within five business days after the bond redemption record date.
Restrictive covenants		None
Name of the credit rating agency, rating date, and company rating results		N/A
Other rights attached	Amount of converted ordinary shares (exchanged or subscribed for), depository receipts, or other marketable securities as of the publication date of this annual report	None
	Issuance and conversion rules	Please refer to the Company's First unsecured convertible corporate bonds in the Republic of China issuance and conversion rules.
Possible dilution of equity and impact on the existing shareholders’ equity due to the regulations on the issuance, conversion, swap, or subscription, and terms of issuance		As of April 1, 2024, all 6,000 shares have been redeemed or repurchased, and had no dilution of the company's equity.
Custodian of exchanged assets		None
Types of corporate bonds	The Second unsecured convertible corporate bonds in the Republic of China
---	---
Date of issuance	December 1, 2023
Par value	NT$100,000
Place of issuance and trading	Taipei Exchange
Issue price	Issued at the face value
Total amount	NT$600 million
Interest rate	Coupon rate: 0%
Term	Five years Maturity date: December 1, 2028
Guarantee institution	N/A
Trustee	Trust Division, Bank SinoPac
Underwriting institution	IBF Securities Co., Ltd.
Attorney	Chen, Yu-Liang, attorney at Jheding International Law Offices
CPAs	Chen, Yi-Chun and Lien, Shu-Ling, CPAs at KPMG Taiwan
Repayment method	Unless the convertible corporate bond holders plan to convert the bonds into the Company’s ordinary shares in accordance with Article 14 of these rules, or the bondholders exercise the right to reverse repurchase in accordance with Article 23 of these rules, or the Company redeems the bonds early in accordance with Article 22, or the Company repurchases the bonds and cancels them at the premises of the securities firm, the Company shall redeem the bonds in cash at the face value of the bonds in a lump sum upon the maturity date.
Outstanding principal	NT$600 million (as of March 31, 2024)
Terms of repurchase or early redemption	As per Article 22 of the Company’s bond issuance and conversion rules, from the day after the bonds have been issued for three months to 40 days before the end of the issuance period, if (1) the closing price of the Company’s common stock in the centralized trading market is at least 30% higher than the If the conversion price for 30 consecutive business days, the Company may, within the following 30 business days, or (2) when the outstanding balance of the convertible corporate bonds is lower than 10% of the total issuance amount, Company shall send a letter to request Taipei Exchange to make an announcement and redeem the bondholder’s convertible corporate bonds at the face value

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		of the bonds within five business days after the bond redemption record date.
Restrictive covenants		None
Name of the credit rating agency, rating date, and company rating results		N/A
Other rights attached	Amount of converted ordinary shares (exchanged or subscribed for), depositary receipts, or other marketable securities as of the publication date of this annual report	None
	Issuance and conversion rules	Please refer to the Company's Second unsecured convertible corporate bonds in the Republic of China issuance and conversion rules.
Possible dilution of equity and impact on the existing shareholders' equity due to the regulations on the issuance, conversion, swap, or subscription, and terms of issuance		The conversion of the corporate bonds will not dilute the Company's equity before the bondholders exercise the right to convert the bonds. Also, the bondholders will exercise the right to convert the bonds depending on the timing, so their timings of requesting conversion are different, which will effectively delay the dilution effect on our earnings per share. As per the share capital of 83,840,000 shares issued and the conversion price of NT$39.4 per share, the number of unconverted bonds as of March 31, 2025 is 6,000. If all outstanding corporate bonds are converted into ordinary shares at this time, the number will increase by 15,228,000, with share dilution of approximately 18.16%. Thus, the impact on the existing shareholders' equity should be limited. For the existing shareholders' equity, although the convertible corporate bonds issued before conversion will slightly increase the Company's liabilities, when the convertible corporate bonds are converted into ordinary shares, the liabilities will decrease and shareholders' equity will increase. The impact on the existing shareholders' equity is not that far-reaching in the long term.
Custodian of exchanged assets		None

(II) Convertible corporate bonds

Types of corporate bonds		The first unsecured convertible corporate bonds in the Republic of China
Year Item		Up to March 31, 2025
Market price of convertible corporate bonds	Highest	117.00 (note)
	Lowest	97.10 (note)
	Average	107.55 (note)
Conversion price		2020.1.19-2025.3.31: Not applicable(Note)
Date of issuance and conversion price prevailing at the time of issuance		January 19, 2021/ NT$68.80
Method of fulfilling conversion obligations		Fulfilling the conversion obligations by issuing new shares

Note: As of the book closure date (April 1, 2025), all have been redeemed or repurchased..

Types of corporate bonds		The Second unsecured convertible corporate bonds in the Republic of China
Year Item		Up to April 1, 2025
Market price of convertible corporate bonds	Highest	98.55
	Lowest	97
	Average	97.38
Conversion price		2023.12.1-2025.4.1: 39.4

Date of issuance and conversion price prevailing at the time of issuance	December 1, 2023/ NT$39.4
Method of fulfilling conversion obligations	Fulfilling the conversion obligations by issuing new shares

Note: As of the book closure date (March 31, 2025), there has been no conversion taking place.

(III) Shelf registration of the issuance of corporate bonds: None.

The total amount of planned offering and issuance	NT$1,200,000 thousand
Total amount offered and issued	January 19, 2021: NT$600,000 thousand December 1, 2023: NT$600,000 thousand
Balance of the issuance in shelf registration	NT$600,000 thousand
The issuance period was not partially scheduled.	N/A

3.3 Issuance of preference shares: None.
3.4 Issuance of depository receipts: None.
3.5 Issuance of employee stock warrants and restricted stock awards: None.
3.6 Issuance of restricted stock awards: None.
3.7 Issuance of new shares in connection with mergers or acquisitions or with acquisitions of shares of other companies: None.
3.8 Fund application plan execution: N/A.

V. Overview of Operations

4.1 Information on business

(I) Scope of business

Details of main business

The Company is a holding company, and its subsidiaries with substantive operating functions are Dongguan Hirosawa, Wuhan Hiroyoshi, Hunan Hiroyoshi, Kaifeng Guangjia, and Xiangyang Hiroyoshi Automotive Trim Co., Ltd; their main business includes injection molding, surface coating, and cubic painting (water transfer painting) of automotive plastic interiors; IMD/INS, TOM, 3D laser marking, as well as wooden and aluminum surface decoration processing, and EPF process of automotive exterior trims, injection molding and ambient lighting for interior/exterior trims.

Business proportion

The Company's product proportions are calculated based on the 2024 operating revenue, and the proportions are as follows:

Unit: NT$ thousand

Item	2024
		Net revenue	Proportion
Automotive parts (Note 1)	Surface coating	1,698,999	33.39%
	Injection molding	1,288,969	25.34%
	Transfer printed parts	1,683,199	33.09%
	Others (Note 2)	181,813	3.57%
Molds		234,645	4.61%
Net sales		5,087,625	100.00%

Note 1: The auto parts are classified based on the status of shipment. For example, cubic painted parts include products that have only undergone the cubic painting process and those going through the molding and coating processes and then the cubic painting process.
2: Others are purchased parts and samples.

The Company's existing products and services

(1) Injection molding, surface coating, and cubic painting (water transfer painting) of automotive interiors; in-mold decoration (IMD) and out-mold decoration (OMR) (three dimension overlay method, or TOM), leather covering, knob assembly and decoration: Mainly used in automotive armrest console, gearbox, dashboard, door, seat, and steering wheel.
(2) Injection molding and EPF process for automotive exterior trims.
(3) The MINI LED technology is used for the ambient lighting of automotive interior/exterior trim parts.
(4) Plastic part mold making: Auto part mold manufacturing and sales.
(5) Others: Casings for consumer electronic products

New products (services) planned to be developed

(1) Seeking to work with surface treatment companies, such as ambient lights or technology to replace coating, or directly working with OEMs to produce

illuminated emblems, high brake lights, book lights, and tail lights, thereby diversifying our products.

(2) Providing a wide range of product design, mold making, production, surface treatment, and parts assembly for the parts required by auto parts manufacturers, to provide on-stop services to clients.

(II) Overview of the industry

Current status and development of the industry

Starting from the invention of the steam engine and the internal combustion engine by the British people, the advent of the first gasoline three-wheeled automobile car invented by the German Karl Benz in 1886, automobile components, after more than a hundred years of technological evolution, have undergone various stages of developments of automobile and been advanced in terms of appearance, materials, and functionality. Also, it needs 8,000 to 15,000 components to make a car depending on the required complexity and precision; the process covers many industries, including machinery, automation, electronics, information, materials, and chemicals, while tens of thousands of auto parts and accessories are made by the metals, non-metals, electronic information, textile, and petrochemicals industries due to different application scopes and materials. Thus, the automotive industry is known as the "locomotive industry" and is a highly integrated industry featuring high precision and high technology.

The automotive industry is an OEM supply system centered on car manufacturers, consisting of car manufacturers, Tier 1 suppliers, Tier 2 suppliers, and Tier 3 suppliers from top to bottom. The car manufacturers control the right to set the functions and specifications of the components and carry out the whole car assembly, the R&D of key technologies, and the manufacturing of some parts and components. Tier 1 suppliers supply goods to car manufacturers and are responsible for developing and producing systems or subsystems. Tier 2 suppliers are responsible for producing module products to supply goods to Tier 1 suppliers. Tier 3 suppliers are responsible for producing auto parts or components. They have formed close supply ties with each other.

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OEM supply chain relations in the automotive industry

However, as the automotive industry enters the stage of globalization, the relations between car manufacturers and component suppliers, are no longer rigid due to the trend of global procurement. Parts manufacturers may work with multiple car manufacturers at the same time. Also, to reduce costs many large car manufacturers have successively transferred the R&D and design work to component suppliers, enabling car manufacturers to create higher added values than before in the industrial value chain. Also, in the OEM market, the appearance, functionality, and specifications of components vary depending on car manufacturers' needs, so most of the components are customized, and the chance of standardization is low. However, to cut costs, car manufacturers and OEMs have to increase the proportion of the outsourced business in response.

With the current development and trends, the automotive industry should continue to innovate to make breakthroughs in appearance designs and performance as well as fashionable and leisure styles, diverse designs, environmental protection, AI functions, and lightweight. They need to adopt different materials (light metals, such as magnesium alloys and titanium alloys, to replace steel and engineering plastics) and incorporate information and electronic technology into the traditional conductor configuration or devices to create new applications, such as car LED lights, GPS systems, collision avoidance systems, automated driving systems, safe and intelligent designs, audio-visual multimedia systems, and wireless data communication systems. As such, the auto components industry has gradually expanded and become a new high-level industry as the fourth electronic industry, following consumer electronics, computers, and communications, and has unlimited potential for future development.

Auto components can be mainly divided into those used in original manufacturers and those used in after-sales car repair workshops. The sales channels for parts can be divided into the markets of original equipment manufacturing (OEM), original design manufacturing (ODM), original equipment service (OES), and after market

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(AM). Among them, the OEM and ODM markets are for parts to the original manufacturers for assembly, which are closely related to the sales of new cars; they are also the potential markets of AM and OES. OES is for the parts certified by the original manufacturers for repair after sales; the parts provided by AM are AM parts for after-sales repair and maintenance and the refitted vehicle market. Generally speaking, most auto parts manufacturers supply parts for the original car markets and the after-sales repair markets at the same time.

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Distribution of auto components
Source: Automotive Research & Testing Center's reports

According to the report, global new vehicle sales in 2023 will reach 89.19 million units, up by $11\%$ from 2022. China still accounts for $34\%$ of the auto market, coming out of the impacts of COVID-19 pandemic over the past three years. However, the ongoing China-Us trade conflicts, inflation, soaring interest rates and geopolitical conflicts have caused major uncertainties to the economic outlook. It is estimated that the number of new vehicles sales will reach 88.30 million in 2024, of which the output of new energy vehicles is expected to reach 13.30 million. U.S. car sales are expected to increase to 15.1 million units in 2024, a $2\%$ increase from 2023, and the number of pure electric vehicles will reach 1 million. However, U.S. consumers will continue to face difficulties such as high interest rates and tight credit conditions. Despite the geopolitical conflicts and rising energy consumption, the automobile production recovers quickly, and the sales volume of new cars in Europe is still expected to reach 15.1 million units in 2024, up $2.9\%$ from 2023. Based on the data of 2023, the trend of large SUVs and pickup trucks replacing sedans in the North American market was still ongoing. However, high car prices and high interest rates have a slowing effect on the promotion of new energy vehicles, the challenges posed to the future of the automotive industry are daunting.

Although China's car preferential policies or measures have been due or canceled since 2011, China's government has gradually switched from a macro-control policy to a proactive fiscal policy and a stable monetary policy due to the pressure of inflation, the auto market has witnessed two consecutive years of low growth, but in 2013, it surged by $14\%$ . Both the production and sales of new cars exceeded the 20 million mark. Although it only grew by $4.7\%$ in 2015, China's government launched a policy to halve the purchase tax for cars with a 1,600 c.c. (or lower) engine in 2016, pushing up new car sales growth by $13.7\%$ . In 2017, the preferential policy of halving the purchase was extended for one year by $2.5\%$ , and the growth rate dropped to $3.04\%$ . In 2018, the number of new cars sold was 28.081 million, an annual decrease of $2.8\%$ . In 2019, due to the impact of the China-US trade conflict, the number of passenger cars sold decreased by $9.6\%$ compared with 2018. This is the first time in 20 years that China's car sales have declined for two years. In the future, low-speed growth will become the normal phenomenon in China's auto market. From 2020 to 2022, new car sales in mainland China continued to decline due to the impact of COVID-19. 2023 is a critical year for the Chinese auto market to witness the rise of independent brands, and their market share account for more than half of the market in China for the first time. In 2024,

the market share of domestic brand passenger cars has reached 65.2%. It has overtaken Japanese and German cars and become the world's largest car exporter. We have observed that under the guidance and support of national policies, new energy vehicles have gradually replaced the traditional fuel vehicle market, allowing independent brands to take advantage of the trend to increase market share. Nevertheless, countless automobile companies and business operators enter into fierce competition to fight for the market share against this growth backdrop. In this market environment, even the production and sales figures reach a new high, it is difficult to hide the anxiety and insecurities of the OEMs and the supply chain. As per the data from the China Association of Automobile Manufacturers, the number of new cars sold in China's auto market in 2024 reached 31.436 million, an annual increase of 4.5%. The sales of passenger cars increased by 5.8% compared to 2023. It is estimated that the sales volume of new cars in China will reach 32.9 million units in 2025, which is a 4.7% growth from 2024. Our strategy is to continue to consolidate and deepen our ties with the existing clients, i.e. Japanese car manufacturers in South China and Central China and actively develop new clients in east China, while striving to obtain orders from European and the U.S. car manufacturers with our professional manufacturing skills and high-quality services. With consumers' demand for new cars after the pandemic and the launch of competitive products by various brands driven by government policies, it is expected that automobile brands will not only focus on lightweight and eco-friendly technologies but enhance AI-based and luxurious interiors of new cars. With the competitive advantage of having a complete vertical and horizontally integrated manufacturing process, we are confident in obtaining more orders and opportunities for new car models, so as to maintain the high uptime of the production capacity of our production sites, to enable our operating performance to be better than the average sales growth rate in the new car market.

While many joint venture brand car manufacturers in China made mistakes in their new energy vehicle strategies, the independent brand car manufacturers took advantage of policy support and the sales of new energy vehicles boosting the passenger car market share at a record high of 56%. Japanese and German car manufacturers showed a significant decline. The three major Japanese car manufacturer customers of the Company have faced the challenge of new energy vehicles, and the proportion of revenue has declined to about 45%, while the proportion of self-brand customers has increased significantly to 28%. Therefore, the Company's overall revenue in 2024 will decrease by 11.69% from 2023. The trade disputes between the United States and China persisted last year. With the support of the purchase tax reduction and allowance policy, sales of alternative fuel vehicles exceeded 12.866 million last year, which was a 35.5% increase compared to 2023. The Company's revenue from the sales of alternative fuel vehicles also reached 18.6% in 2024. It is expected that automobile brands will not only focus on lightweight technologies but enhance AI-based and eco-friendly interiors of new cars. With the competitive advantage of having a complete vertical and horizontally integrated manufacturing process, we are confident in obtaining more orders and opportunities for new car models, so as to maintain the high uptime of the production capacity of our production sites, to enable our operating performance to be better than the average sales growth rate in the new car market.

The Company provides clients in the automotive industry with one-stop services, from injection molding of automotive interiors and exterior trim parts, and cubic painting to surface coating. Currently, our main clients are the three major Japanese automakers of Nissan, Honda and Toyota in South China. Due to the impact of the China-Japan conflict over the Senkaku Islands in the fourth quarter of 2012, the sales of Japanese car models plunged in the fourth quarter of 2012. In response to the political disputes between China and Japan, Japanese car manufacturers also launched remedial measures to reduce the impact of the tide of anti-Japanese nationalism. With the launch of the remedial measures and the subsiding tide in China, the sales of new Japanese cars have rebounded since September 2013. Honda and Toyota also set new records in China's market in 2015. New car sales hit a record high. In the fourth quarter of 2015, China's government launched the policy of halving the

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purchase tax, pushing up the sales of Japanese cars in 2016. From 2020 to 2022, due to the impact of COVID-19 and the ongoing trade war between the US and China, consumer demand has fallen sharply. Sales in China's new car market were in a slump. 2023 will be the year for China's new car market to witness the rise of independent brands. Its market share exceeded 50% in China for the first time. In 2024, the market share of domestic self-brand passenger cars has reached 65.2%. In addition to catching up with Japanese and German cars, it has become the world's largest car exporter in two consecutive years. We have observed that under the guidance and support of national policies, new energy vehicles have gradually replaced the traditional fuel vehicle market, allowing independent brands to take advantage of the trend to increase market share. Nevertheless, countless automobile companies and business operators enter into fierce competition to fight for the market share against this growth backdrop. In this market environment, even the production and sales figures reach a new high, it is difficult to hide the anxiety and insecurities of the OEMs and the supply chain. With the active optimization of the supply chain structure and the guidance and support of national policies, the self-owned brand car manufacturers have reached a record high of 56% in the passenger car market, while the Japanese and German brand car manufacturers have declined significantly. The Company's main revenue comes from the three major Japanese car manufacturer customers who account for more than 45% of the revenue. In addition, the proportion of self-owned brand customers has increased significantly to 28%. The lifting of the pandemic lockdown measures of the Chinese government in 2023 has not led to the expected economic surge, there was a lagging impact from the three-year pandemic on the general public, and the potential growth momentum cannot be restored immediately, resulting in the Company's overall revenue in 2024 to decline by 11.8% compared to 2023. In addition to focusing on serving the three major Japanese car manufacturers in mainland China, we have successfully entered the European, the U.S. and self-owned car brands' supply chain systems in recent years. Suzhou Hiroyuki Automotive Trim Co., Ltd., which was established in East China, has gone into mass production since the fourth quarter of 2022. We will be committed to adjusting the client structure, to expand the client base and avoid the risk of client concentration. In addition, we are actively adopting automated equipment in production lines, developing smart cockpit decorative parts, new eco-friendly materials and manufacturing techniques, and optimizing each production site's operating efficiency. Thus, the Company's future revenue growth is promising.

The relations between the up-, mid-, and downstream industries

The automotive industry is a highly integrated industry featuring high precision and high technology. The manufacturing process is very complicated and covers a wide range of aspects. There are hundreds of small- and medium-sized manufacturers in this field, which require cooperation between various industries. The number of auto components is large. It usually needs 8,000 to 15,000 components to make a car. The needs for auto components come from the car assembly manufacturers, who need the parts to assemble new cars for sale, and the after-sales repair/maintenance service providers to replace parts. The parts can be divided into metal parts and non-metallic parts based on the materials, including steel, non-ferrous metals, rubber, glass, asbestos, ceramics, and fibers, covering a wide range of industries. The parts and components manufacturing methods include casting, stamping, forging, powder metallurgy, machining, and thermal treatment. After passing the inspection, the qualified components are sent to the central plants

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for assembly. Therefore, the auto components industry can drive the development of a country's entire basic industry and the peripheral industries.

In recent years, due to global competition, auto components manufacturers no longer only served specific car manufacturers. Instead, they have gradually obtained the right to develop parts and components. The variability of their products and the number of industries they work with have increased, and their downstream clients have also become more diverse than before. The relations between the up-, mid-, and downstream auto components industries:

Source: Taiwan Institute of Economic Research

3. Product development trends

(1) Continuous innovation of surface treatment technology

Surface treatment refers to the skill of using the chemical composition structure of the surface of materials to change the functions to create new functions through physical or chemical reactions. There are a wide range of items that need to go through the surface treatment process, ranging from traditional industries to high-tech industries and from the metal surfaces to the plastic and non-metallic surfaces. Through surface treatment, the material will be more corrosion-resistant, wear-resistant, and heat-resistant, which not only prolongs the lifetime of materials but improves the characteristics, gloss, and appearance of the surface of materials, thereby increasing the added values of products. Thus, surface treatment plays an indispensable role in various processing and manufacturing industries.

Surface treatment is not the mainstream sector in the industry, but only with surface treatment can the characteristics and values of products be fully leveraged. Plating, anodizing, conversion coating, and coating can achieve anticorrosion; improve weldability, lubricity, wear resistance, and adherence; prevent steel carburization. With increasing higher quality of life, people pay more attention to the sense of aesthetics for the objects used in addition to their practicality. Therefore, various coating technologies have emerged. After some

ordinary product cases are coated with three-dimensional paints, they are better protected, look better, or have other effects.

In cubic printing, a polymer film is chemically treated with patterns printed and then fed out onto the surface of a water tank. The natural pressure of the water impresses the ink onto the surface of an object evenly, and the excessive film will be automatically dissolved after cleaning and drying, and then a layer of transparent paint will be applied on the surface to emerge from the water tank with a new visual effect.

Cubic printing is a high-efficiency printing production technology, which is called water transfer painting, that is, printing on uneven surfaces to achieve an excellent visual effect; it addresses the shortcomings of flat surface printing, that is, it cannot be applied to uneven surfaces, and the equipment is expensive. The production cost of cubic printing is relatively low, it can be adopted widely, and it is practical and user-friendly, making it a very popular technique. The products undergoing cubic printing can almost reach 100% of the desired effect. Today, cubic printing can be applied to hardware (copper, iron, aluminum, non-metals, etc.), wood, footwear, household items, and automotive interior decoration, plastics (ABS, PU, PP, PE, TPR, 4FS, PVC, etc.), stone, bakelite, ceramics, and other surface materials. The added value of cubic-printed products is multiplied as the color and the gloss improve. For designers, this technique has expanded the field of design more extensively.

Regarding IMD, after heated and vacuumed, the resin is combined with the ink layer on the back of a film, so that the resin and the ink are integrated and molded, so as to transfer the color on the film to the surface of the product. It is a new injection molding process for plastic surfaces.

OMD is an emerging high-efficiency printing production technology, which is called high-pressure transfer printing. After printing a pattern and text on a transparent film, the high-pressure vacuum transfer technology is adopted to coat the pattern and the text onto a plastic or metal object to have a three-dimensional pattern and text on the surface.

(2) Car consumers continue to pursue better and fancy appearance, and the demand for surface treatment of automotive interiors does not decrease.

Consumers are the final decision makers when buying a car. Besides prices, quality, appearance, product uniqueness, and whether it is fashionable and trendy all affect consumers' decisions, which is particularly true for auto parts. When the quality and prices are not obviously different, whether a product is unique or aligned with the fashion trend and is popular with consumers and the different consumers' preferences in different regions will all affect the car sales. As various transfer printing technologies can be extensively adopted for various automotive plastic interiors, dashboards, or consoles, improving the sense of space, style, and cost-effectiveness of small cars as well as increasing the sense of aesthetics and practicality of car interiors to make

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high-end cars appear more luxurious and create a pleasant visual effect will significantly increase the car values.

Market competition

The automotive industry is a closed market with a small number of car manufacturers. All automotive components should undergo a strict and protracted testing and certification process before they can be adopted by original car manufacturers, and the quality is guaranteed. It is still necessary to be identified as a supplier with development potential so that internationally renowned car manufacturers will be willing to provide the required specifications regarding quality, reliability, and product lifetime to the supplier for product development and testing. The time and cost of the protracted process cannot be underestimated, and this has led to a barrier to entry to some extent.

In 1999, the Company adopted Japan's cubic printing technology and Sweden's automatic ABB coating system for surface treatment and added injection molding equipment in 2001 to provide clients in the automotive industry with one-stop services for injection molding, cubic printing, and surface coating of automotive interiors and exterior trim parts. The Company 20 years or more of experience in R&D and production of automotive interiors and exterior trim parts with excellent technical skills in mold design, moldmaking, injection molding, surface coating, cubic printing, IMD, OMR, as well as wood and aluminum decoration; thus, we have occupied a place in this industry in terms of business scale, production technologies, and ability to accept orders. In recent years, we have actively adopted automation equipment and optimized our production processes to cut labor costs and reinforce competitiveness.

(III) Technology and R&D

Technological capabilities

The Company mainly engages in injection molding, surface coating, imitation wood grain printing of automotive interior parts. With the economic development, consumers have begun to consider the appearance besides the prices and safety of cars. Thus, in addition to the car model and the appearance, a variety of surface treatment technologies have been developed for automotive interiors. The main surface treatment technologies include spray coating, cubic printing, IMD, OMR, leather covering, and wood and metal plating. The surface treatment technologies used for automotive interiors vary depending on the proposition of each car model. The interiors used in low-cost cars usually only underwent injection molding, without spray coating or other surface decoration processing. Accessories with imitation wood grains or metal patterns are often adopted for mid-to-high-end cars; wood, aluminum, or metal plated accessories are adopted in high-end cars. Thus, interiors manufacturers with different surface treatment technologies will have

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different product propositions and therefore have different clients in car manufacturing. In addition to the injection molded parts for low-cost cars, the Company produces spray-coated products, imitation wood grain, and leather covered products for mid-to-high-end cars, providing clients with a variety of product choices. In the future, in addition to providing injection molded, surface coated, imitation wood grain printed, and leather covered automotive interiors for mid-to-high-end cars, we will gradually develop wooden and aluminum accessories for high-end cars. With LED, LCD, and touch functions, as well as the self-developed light-transmitting films and light-transmitting leather, we will create items with the surface featuring diverse, gradient, and soft light effects, which will not only diversify the Company's product lines but also help expand the business scale.

Research and development

As an enterprise, technological innovation is always an essential means of survival. Technological innovation motivates enterprises to continuously design and produce new products in alignment with the market demand. Product innovation is the continuation and extension of technological innovation. Whether an enterprise can continuously engage in product innovation and develop new products in alignment with the market demand has become the key to achieving sustainable and stable development for an enterprise. In particular, in the new economic era where the technology is advancing and the product life cycle is greatly shortened, the challenges faced by enterprises are more daunting. The Group and our partners are committed to developing smart and integrated touch systems featuring excellent lighting and aesthetic effects with environmental protection as the core, so as to create a customized, healthy, comfortable, efficient, eco-friendly, and energy-saving in-vehicle environment.

With that, we adhere to our quality policy of "continuing to engage in R&D and innovation with clients at the center and providing high-quality eco-friendly products" and the business strategy of "R&D of green production processes, improving energy conservation and environmental protection approaches, and fulfilling corporate social responsibility"; in recent years, our R&D focus is on the aspects below:

(1) Development of eco-friendly coating-free films

With economic development and the more rigorous market demand, traditional plastic decoration technologies have gradually been unable to meet the needs of the new era. Meanwhile, the industry will face market and energy issues in the next ten years, such as clean production and environmental protection, high efficiency and regulations, as well as accountability and coordination. Energy efficiency, environmental protection, safety, and high efficiency are issues that every enterprise should face up-front. Compared with traditional processes, IMD can reduce production steps and reduce the components to be assembled, so it allows efficient production, thereby saving time and costs, while improving the quality and appearance. As a decoration process to replace spray coating, it can greatly reduce wastewater, VOC and

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waste paints generated, as well as environmental maintenance costs, and ensure a more comfortable and healthy production and work environment of employees. At present, all decorative films for this technology can only purchase overseas. To address this issue, we are developing films for the purpose of manufacturing films in Taiwan. The endeavor aims to promote the printing of overseas film manufacturing plants and develop new and specific films with the competitiveness unique to the Group.

(2) R&D of technology of automotive smart ambient light cockpit system

Light is an indispensable element in people's daily lives. The adjustment to lighting and shades creates different atmospheres and is an important embodiment of the pursuit of comfort. To make the car interior more comfortable at night, drivers and passengers can set their favorite ambient lighting modes depending on their needs. Different colors create different atmospheres and feelings. At present, the Company is working with car manufacturers to design smart ambient products to meet customers' needs for customized ambient lights.

(3) Soft smart surface decorations with photoelectric display function

To further improve consumers' satisfaction with the perceived quality of cars, the concept of soft smart surface decorations with photoelectric display function has been created. Due to the material properties and formula design for the soft leather material, its ability to achieve an excellent light transmission effect is worse than that of hard decorative materials. As developing light-transmitting leather materials with an excellent light-transmitting effect is very difficult, there are few cases of mass production of products combining soft materials with photoelectric display function, and the application can only be seen in Haval's H6 and SOL's X8 car models and was all developed by Best Chain with a long development cycle at high material costs. Smart surface decorations are a critical field for the design and development of automotive interiors in the future, and the adoption of new materials and new processes is the key to realizing smart interiors. At present, hard smart surface decorations with photoelectric display functions have begun to be mass-produced and applied widely, and many OEMs are also researching and developing soft smart decoration technology and smart decoration technology with touch functions. We are working with car manufacturers to develop leather materials with smart surfaces for the interiors of new models.

(4) Research on car lighting systems

A car lighting system is one of the necessary systems for safe driving. It mainly includes interior/exterior lights and interior/exterior signal lamps. We are working with car manufacturers to engage in the preliminary research and development of interior/exterior lights and signal lamps for a variety of new models.

(5) Research on automobile smart surface control display technology

Smart surfaces refer to decorative and functional interior surfaces. Every interior surface in the future can be a smart surface, including door trims, dashboards, steering wheels, sunroof modules, and lighting systems. These surfaces have now evolved from decorative functions to seamlessly integrated mechatronic user interfaces. Now the smart surface technology is being launched to the market in the stage of growth, so it bears huge development potential. Improving the smart surface technology requires the collective efforts

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of OEMs, solution designers, component suppliers, and material suppliers. In the future, this will be the Group's focus in R&D.

Before researching and developing new products, the R&D center will investigate competitors' situations, conduct preliminary evaluations and market surveys, publish a letter of intent, make a sample, and then carry out experiments. If the finished goods meet the requirements, we will mass-produce them.

3.Future R&D plan and estimated R&D expenses

NO.	Projects for the most recent year	Current progress	R&D investments to be made (million RMB)	Year and month in which mass production is completed	Main factors influencing the success of future R&D
A-01	Research on Laser Engraving + Piano Black Film Technology	The film project confirms the key items and testing methods for the film and laser engraving. The project formulation and formula adjustments are currently underway.	6.7	2025/10/30	The application prospects for laser engraving combined with piano black film technology are vast. The unique glossy black finish of piano black film, when integrated with laser inner engraving technology, enables the creation of intricate and highly realistic patterns within the film, such as wood grain, leather texture, and geometric designs. This significantly enhances product aesthetics and expands possibilities for customized designs. Significantly enhances the product's added value, thereby increasing its market competitiveness.
A-02	Development of JYD AIO Digital Printing Film	Adhesion testing of film coating Appearance evaluation for the Toyota project is confirming	35.2	2026/1/30	The AIO digital printing film integrates the flexibility of digital printing with the characteristics of film materials, enabling benefits such as plate-free production and variable data printing, which is particularly suited for customized orders. Optimization of the production process significantly reduces manual intervention and material waste, enhancing product consistency and delivery efficiency. The rapid iteration capability of digital printing technology (such as high-precision inkjet technology) improves both the quality and efficiency of film printing, making it more competitive in rendering complex patterns and fine textures.
A-03	Research on Toyota Emblem Film Thermoforming and Decoration Technology	Third round of color adjustment is in progress Feasibility of the film thermoforming solution has been confirmed	6.6	2025/8/30	The traditional Toyota emblem uses electroplating and is non-illuminated. Applying PVD processing could enable light transmission, but the resulting color does not match the existing product and has a high defect rate. The film processing method can improve both color accuracy and defect rate issues. However, due to the large stretching and multiple perforations of the Toyota emblem, the film and process requirements are highly demanding. Through ongoing research on film decoration technology, improvements are being made to enhance product competitiveness.
A-04	Development of Mold Etching + INS Film Technology	Injection molding tests after mold etching have been successfully completed Mold texture adjustment and improvement are in progress	11.8	2025/9/30	By utilizing mold etching for one-step molding, the need for post-processing is reduced. The integration of these two processes shortens the production cycle and lowers costs.. Mold etching can directly impart fine textures (such as leather-like or wood grain patterns) onto product surfaces during injection molding, while INS films, through in-mold decoration (IMD) processes, add colors and patterns. The combination of these two technologies enhances both tactile and visual depth. The integration of mold etching and INS films offers environmental benefits and high added value; however,
					the production cycle is much more efficient. This is especially important for the production process, as the film is more efficient and more efficient.

					challenges remain in material compatibility and process coordination that need to be addressed for optimal performance. With the growing demand for new energy vehicles and consumer electronics, this technology is expected to achieve an annual market growth rate of 15%-20% from 2025 to 2030, becoming one of the mainstream solutions in the field of surface decoration.
A-05	Research on Laser Embossing and Color-Wiping Technology for Automotive Interior Trim	Prototype samples of laser-embossed and color-wiped WL door trim panels for the North American market have been completed. Physical property testing of the embossed and color-wiped samples is currently in progress.	22.2	2025/10/30	The current color-wiping technology is primarily applied in the finishing process of natural wood veneers in genuine wood decorative techniques, enhancing the richness of the wood's color tones. However, due to the high cost of genuine wood veneers, their application is currently limited to premium vehicle models, making it difficult for more affordable models to adopt such high-cost decorative solutions. By utilizing our proprietary laser embossing technology in combination with the color wiping technique traditionally used in genuine wood finishing, we have developed a new laser-embossed and color-wiped decorative process. This innovation replicates the texture and tactile feel of real wood grain while offering a cost-effective alternative to genuine wood decoration. It further enriches the variety of interior decorative components and provides customers with a broader range of design options. This enhances the competitiveness of the Company's products.
A-06	Research on 3D Laser Engraving Technology for Automotive Trim	Feasibility study on the process plan and equipment is underway. Laser engraving design files are under review.	7.6	2025/12/30	Currently, most automotive interior and exterior trim decoration techniques only achieve 2D-level decorative effects. Based on laser engraving technology, we are developing a new process that uses an auto-focusing laser engraving device, which reacts within transparent PMMA or crystal products to create 3D patterns, offering a three-dimensional decorative effect. This innovation enriches the variety of in-car decorative accessories, providing customers with more diverse options. This enhances the competitiveness of the Company's products.
A-07	Research on Laser Engraving Technology for Eco-friendly Automotive Decoration Materials	Market Research on Eco-friendly Materials Performance Evaluation of the Integration of Eco-friendly Materials and Laser Engraving Additives	7.5	2025/12/30	Due to the tightening global environmental regulations, such as the European Union's proposal on "Vehicle Design for Circularity and End-of-Life Vehicle Management," which clearly stipulates that at least 25% of the plastic used in new vehicles must be made from post-consumer recycled plastic, with 25% of that coming from recycled end-of-life vehicles. In other words, 6.25% of the total plastic used in vehicles must come from recycled materials sourced from scrapped cars. Therefore, the development of this project aims to meet the market's increasing demand for environmentally sustainable products. This innovation enriches the variety of in-car decorative accessories, providing customers with more diverse options. This enhances the competitiveness of the Company's products.
A-08	Research on the Application of Metal Light Transmission Technology in Automotive DP and IP Components	The research on the processability and surface treatment of metals is ongoing, with the preliminary data already completed. Currently, prototype testing is being conducted to evaluate light transmission properties.	17.564	2025/12/30	With continuous advancements in technology, the demands for material performance are becoming increasingly higher. Traditionally, metals have been widely used due to their excellent electrical and thermal conductivity, as well as mechanical strength. However, due to their reflective and absorbent properties regarding light, metals have generally been considered opaque. Recent research, however, has shown that with special structural design and treatment methods, metals can achieve light transmission under certain conditions.
A-10	Research on the Thick-Wall Injection	Feasibility research and design for the process structure are under	12.456	2025/12/30	As plastic products are widely applied in various fields, the demand for thick-wall injection molded products has been steadily increasing. The thick-wall injection

4. R&D personnel and their educational attainment and experience

Unit: Person

Item Educational attainment	2022	2023	2024
Doctoral degree	0	0	0
Master's degree	1	1	2
College or university	148	102	127
Senior high school	25	26	33
Total	174	129	162

R&D expenses spent in each of the most recent three years
Unit: NT$ thousand

Item\Year	2022	2023	2024
R&D expenses	226,506	259,332	265,139
Net revenue	7,344,840	5,761,288	5,087,625
% of net revenue	3.08%	4.50%	5.21%

Technologies or products successfully developed in recent years

No.	Patent name	Type	Patent No. or Application No.	Application date	Remark
P-532	一種汽車排揚板雙工位組裝機	Invention	202110255057.6	2021.03.10	Patented
P-533	一種汽車排揚板雙工位組裝機	Utility model	202120501360.5	2021.03.10	Patented
P-534	一種汽車排揚板組裝設備	Utility model	202120501358.8	2021.03.10	Patented
P-535	一種汽車排揚板擺動式組裝定位治具	Utility model	202120501152.5	2021.03.10	Patented
P-536	一種汽車排揚板錨螺絲機	Utility model	202120501310.7	2021.03.10	Patented
P-537	一種汽車排揚板組裝卡扣設備	Utility model	202120501215.7	2021.03.10	Patented
P-538	一種汽車排揚板雙工位錨螺絲機	Utility model	202120500615.6	2021.03.10	Patented
P-539	一種打螺絲治具	Utility model	202120432479.1	2020.03.01	Patented
P-540	一種揚聲器支架防茶治具	Utility model	202121503466.5	2021.07.05	Patented
P-541	一種換揚面板檢測治具	Utility model	202121503448.7	2021.07.05	Patented
P-542	一種門把手內孔檢測治具	Utility model	202121503386.X	2021.07.05	Patented
P-543	一種用於精雕機繞水口的排揚面蓋定位治具	Utility model	202121503499.X	2021.07.05	Patented
H-076	一種多功能薄型miniLED汽車車燈	Utility model	202120491232.7	2021.3.8	Patented
H-077	一種金屬透光汽車裝飾件的製造方法	Invention	202110252047.7	2021.3.9	Patented
H-078	一種金屬透光汽車裝飾件	Utility model	202120491302.9	2021.3.8	Accepted
H-079	一種石材透光汽車裝飾件的製造方法	Invention	202110252046.2	2021.3.8	Patented
H-080	一種石材透光汽車裝飾件	Utility model	202120491293.3	2021.3.8	Accepted
H-081	一種燈板定位式膠膜汽車裝飾件的注塑製造方法	Invention	202110252048.1	2021.3.8	Patented
H-082	一種燈板定位式膠膜汽車裝飾件	Utility model	2020120491316.0	2021.3.8	Patented
H-083	一種內澆鍍式膠膜汽車裝飾件	Utility model	202120491231.2	2021.3.8	Accepted
H-084	一種內澆鍍式膠膜汽車裝飾件的製造方法	Invention	202110252083.3	2021.3.8	Patented
H-085	一種遮蔽內澆鍍式車用發光裝飾件	Utility model	202120491282.5	2021.3.8	Patented
H-086	一種遮蔽內澆鍍式車用發光裝飾件的製造方法	Invention	202110252020.8	2021.3.8	Patented
H-087	一種雙色遮蔽內澆鍍式車用發光裝飾件	Utility model	202120491219.1	2021.3.8	Patented
H-089	一種遮蔽燙印式汽車裝飾件	Utility model	202120491216.8	2021.3.8	Accepted
H-090	一種噴塗遮蔽燙印式汽車裝飾件的製造方法	Invention	202110252080.X	2021.3.8	Patented
H-091	一種用於模擬檢測汽車膠膜變形量的構造	Utility model	202121229244.9	2021.6.3	Patented
H-093	一種伸縮彈出式汽車儲物盒	Utility model	202121879926.4	2021.8.12	Patented
H-094	一種用於汽車的轉動式杯托限位結構	Utility model	202121874909.1	2021.8.12	Patented
H-095	一種用於汽車連接導線的防水構造	Utility model	202121874982.9	2021.8.12	Patented
H-096	一種汽車用升降式杯托	Utility model	202121874907.2	2021.8.12	Patented
H-097	一種卡持結構便拆裝式車用杯托構造	Utility model	202121879889.7	2021.8.12	Accepted
H-098	一種具有發光功能的汽車裝飾件的製造方法	Invention	202110993513.7	2021.8.27	Patented
H-099	一種具有發光功能的汽車裝飾件	Utility model	202122040784.9	2021.8.27	Patented
H-100	一種ACC車標標牌膠膜構造	Utility model	202220078809.6	2022.1.12	Accepted
H-101	一種水晶面板燈	Invention	202211489444.7	2022.11.25	Patented
H-102	一種水晶面板燈	Utility model	202223154014.8	2022.11.28	Patented

122

No.	Patent name	Type	Patent No. or Application No.	Application date	Remark
H-103	一種具有觸控漸變水波紋效果的觸摸按鍵面板	Utility model	202320237388.1	2023.2.17	Accepted
H-104	一種具有觸控漸變水波紋效果的觸摸按鍵面板	Invention	202310126885.9	2023.2.17	Patented
H-105	一種淡水灰固燈及具有該淡水灰固燈的汽車	Utility model	202320786789.2	2023.4.11	Accepted
H-106	一種可進行多種場景切換的汽車飾板及其應用	Invention	202311510929.4	2023.11.14	Accepted
H-107	一種可進行多場景切換的汽車飾板	Utility model	202323066435X	2023.11.14	Patented
H-108	一種灰固燈的導光機構、灰固燈及汽車	Utility model	202421808477.8	2024/7/30	Patented
H-109	一種具有彩虹效果的汽車灰固燈	Utility model	202323020040.6	2023/11/9	Accepted
H-110	一種可條形動態變化的彩色投影燈及具有該投影燈的汽車	Utility model	202420714392.7	2024/4/8	Accepted
H-111	一種可條形動態變化的彩色投影燈及其控制方法和汽車	Invention	202410414998.3	2024/4/8	Patented
H-112	一種條紋投影燈及具有該條紋投影燈的汽車	Utility model	202421643672.X	2024/7/12	Patented

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(IV) Long-term and short-term development plans

Item	Short-term development plan	Long-term development plan
Sales strategy	1. As for the increasingly stringent trends of vehicle electrification, light weighting, intelligence, and environmental protection, we use the company's product design and development capabilities to establish technical and business partnerships with customers, providing customers with product concepts, product design, mold development, and post-processing Serve. Comprehensive solutions for various surface decorations of products, strengthen technology and business promotion, participate in the early development and cooperation of customer products, and use our company's existing mold opening, molding, surface spraying, transfer printing, IMD, INS, and TOM to provide solid wood aluminum materials, 3D laser engraving technology, expand various surface decoration products such as smart lighting, and establish integrated product and service capabilities to meet the diversified and personalized needs of customers.
2. In the Chinese market, taking advantage of the market advantages of being the world's largest market and number one in export volume, in addition to continuing to cooperate with existing customers from Japan, Europe and the United States, and independent brands, we have also upgraded our products to meet customers' intelligent and personalized needs. Upgrade opportunities, seek direct cooperation opportunities with OEMs, develop new customer sources, especially new energy customers, and strive for more investment opportunities; in overseas markets, based on the global stronghold layout, we will comply with the international layout trends of OEMs and T1 customers, and actively cooperate with Connect with OEMs and T1 customers to expand the promotion of new environmentally friendly decoration and optoelectronic products on the basis of traditional decorative products, and explore global opportunities for cooperation.
3. In the future, we will focus on our film products (EPF/INS/IMD/TOM) and photoelectric ones (grilles/emblems/ceiling lamps/high mount brake lights/book lights/taillights/gear shift lights) as the main direction of our business, to strive for more orders.
4. In addition to the car industry, we will actively develop new clients in the electronics industry with our existing surface treatment technologies to diversify our product lines.	Formulate mid- to long-term sales strategies, formulate marketing strategies for different markets and customers, and establish a PDCA cycle management mechanism for sales strategies. Strengthen the construction of marketing and project management systems, and establish a pull system that is sales-oriented, R&D-based, and project management-supported. Develop and introduce CRM (customer relationship management system) to strengthen the refined management of the sales process. In terms of product strategy, based on the customer base established by the original water transfer and decorative products, we will introduce diaphragms and two-color injection molding products. Relying on interior products, we will expand exterior products and optoelectronic products, and expand the range of high-end vehicle types. Easy-to-use real wood related technologies are used to establish a product sequence that meets the needs of each customer, with high, medium and low levels. Relying on the Chinese market and customers, and in response to customers' globalization trends, we establish a global development and supply system with customers. Provide customers with the best services and the most diverse products, and maintain long-term cooperative relationships with customers..
R&D plans	1. Follow the world's environmental protection trends and alternative energy vehicle trends as well as research and develop low-pollution, lightweight, thinner materials and processes.
2. Establish a cross-strait design center to respond to the globalization trends, strive to improve product designs and R&D equipment, improve product yields, and shorten the process time, to effective reduce the needs for manpower.
3. Develop multi-layer INS decoration and laser engraving technology to replace the traditional painting and laser engraving processes, develop light-transmitting leather, touch, and vibration materials and processes, and continue to develop mini LED light technology.
4. Continue to develop new eco-friendly decorative materials, develop light-transmitting films, leather, mini LED, touch, and vibration plastic and electrical integrated system, develop thinner and more lightweight modules for	1. Become the top business in the integration of automotive surface decoration, smart, and lighting systems with a sense of aesthetics considered around the world as the Company's vision. Increase the R&D manpower for automotive smart electronic controls, interior ambient/lighting lights, and exterior signal lights and actively train outstanding R&D talents to reinforce our R&D team.
2. Establish a cross-strait design and R&D center to respond to the globalization trends, adopt mini LED or MICO LED lighting technology or develop various thin ambient lights, illuminated car emblems/car grilles, signal lights, taillights, and high mount brake lights to display diverse indication effects of flowing water patterns.
3. Seek collaboration for joint development with suppliers of various surface treatment technologies,

Item	Short-term development plan	Long-term development plan
	interiors and exterior trim parts, and create more diverse and more competitive products.5. Adopt CAE simulation software to improve product reliability and shorten the design cycle to cut costs.6. Adopt automotive smart surface control display technology as well as reliability testing/testing equipment for interior ambient/lighting lights and exterior signal lights.	smart, lighting, and electronic control materials, thereby meeting clients' diverse needs.4. Continue to develop decorative and eco-friendly materials, with eco-friendly decoration as the core, to integrate the smart, touch, and lighting systems with a sense of aesthetics.5. Continue to cultivate CAE analysis talents in structure, fluid, optics, and heat dissipation to improve product reliability and shorten a design cycle, thereby cutting costs.6. Continue to train surface decoration, smart electronic control, interior ambient/lighting lights, and exterior signal lights testing/inspection talents based on benchmarking data analysis results.
Production plans	1. Establish a flow production process to form a complete production system from mold making, molding, transfer printing to assembly, to improve yield and efficiency.2. Pay attention to the allocation of manpower and machines, control the production processes, and strengthen the sense of responsibility of employees in the production lines.3. Facilitate the adoption of automated equipment and reduce the number of manpower in the production processes without added values.4. Digitalize the production information and adopt digital signage management to visualize process management, that is, paperless records.5. It is planned to relocate Plant 1 to the Xitougong Plant in the second quarter of 2025, and transfer the forming and transfer coating process capacity of the original Plant 1.	1. Extend the product lines to increase the added values of products from the production of various car parts to the assembly of combination products.2. Continue to expand the scale of production, move toward modular, high-speed, and automated production, and enhance output value and quality.3. Continue to promote a flat organizational structure to maximize personnel's output values.4. Facilitate lean production, reduce waste, and improve efficiency to achieve the Group's goal of net income.
Financial and operations management	1. Coordinate and allocate company resources in alignment with the future business development direction through sound financial plans and operations management approaches, thereby fully leveraging the values of the Company's resources.2. Actively draw up each subsidiary's financial independence plans to develop an ability to rapidly expand the business scale and an ability to adopt new technologies.3. Plan to take out medium- and long-term loans to reinforce the financial structure, to avoid the uncertain factors of short-term financing.	1. Reinforce the internal control system and the corporate governance structure to protect shareholders' equity, establish a system to leverage the management team's professional experience to improve the effectiveness of corporate governance.2. Reinforce the financial structure and the Group's foundation through diverse financing channels in the capital market, enhance long-term development capabilities, actively avoid adverse exchange rate risks, improve the management team, and enhance the Company's reputation and image in alignment with the growth of the business scale.3. Seek strategic alliances in the same or different industries with reasonable return on investment, to stabilize the Company's position in the industry and expand the business scale and optimize our product mix.
Human resources	1. Implement “agile” management to maintain competitive advantages in the industry.2. Recruit external talents to optimize the internal manpower structure and increase the competitiveness of the Company.3. Establish a digital human resource system and enhance the real-time monitoring of human resource information and data of subsidiaries.4. Focus on CSR/ESG issues and improve sustainable development awareness of the Company.5. We actively carry out employee vocational skills training projects and have established the company's technical talent certification qualifications for junior, intermediate and senior workers.	1. Train internal technical experts and talents to pass external license certifications for experts and talents within 3 years.2. Pay close attention to the HR effectiveness of the Company and find an optimal balance between cost and benefits.3. Adjust the salary and incentive mechanisms and align employees' personal development with corporate development with the same values.4. Enhance training and create an echelon suitable for the development needs of the Company.5. Improve career development plans for employees and design reasonable career development paths. Establish a qualification assessment system for technician-level and senior technician-level talents.

4.2 Overview of the market and production and sales

(I) Market analysis

Main regions where the Company's products are sold:

The Company mainly supplies components to the three major Japanese car manufacturers in South China, so the main region where the Company's products are sold is China, while we sell some products to Japan, the Americas, Europe, and Africa.

Unit: NT$ thousand

Year Area	2023		2024
	Net sales	Proportion (%)	Net sales	Proportion (%)
Mainland China	4,037,676	70.08	3,540,084	69.58
Americas	1,096,473	19.03	877,186	17.24
Others Area	627,139	10.89	670,355	13.18
Total	5,761,288	100.00	5,087,625	100.00

2. Market share

Due to the huge domestic market in China, major international car manufacturers and corresponding small- and medium-sized factories have moved to China. In addition, local car manufacturers in China have joined the competition. There are many local auto component manufacturers in China, of whom many auto interiors manufacturers are equipped with the basic molding and surface spray coating technologies, but if they want to adopt imitation wood grain or metal grain printing technology and rubber molds that are often used in mid-to-high-end cars, they need to be certified by the original manufacturers of the technologies or the car manufacturers before going into production. Regarding the plastic surface decoration technologies, cubic printing (water transfer printing), IMD, and OMR are widely adopted. The Company's clients are mainly Japanese car manufacturers in Central and South China. Suzhou Hiroyuki, which was established in East China, has gone into mass production since the fourth quarter of 2021, to expand the client base in East China. Moreover, we have obtained wooden and plastic plating and laser engraving technologies for car interiors through joint ventures. Meanwhile, we are actively developing technologies of thermal printing, vacuum transfer printing, smart cockpit accessories, and new eco-friendly materials and construction methods. In the future, we will focus on our film products (EPF/INS/IMD/TOM) and photoelectric ones (grilles/emblems/ceiling lamps/high mount brake lights/book lights/taillights/gear shift lights) as the main direction of our business, to strive for more orders. We have a mold design center in place to provide clients with one-stop manufacturing services, from moldmaking, injection molding, water transfer printing, IMD, OMR to surface coating. The Company 20 years or more of experience in R&D and production of automotive interiors and exterior trim parts with excellent technical skills in mold design, moldmaking, injection molding, surface coating, cubic printing, IMD, and OMR; thus, we have occupied a place in this industry in terms of business scale, production technologies, and ability to accept orders.

Supply and demand and growth potential of the market in the future:

(1) Increased income per capita in China

As per China's 14th Five-Year Plan from 2020, to joint the high-income ranks according to the World Bank's standards, maintaining the growth of domestic consumption is the key for China's government's planned economic growth, indicating China's consumption power will further increase.

The outbreak of the epidemic in the Yangtze Delta in April 2022 resulted in different levels of the suspension of work and transportation for tens of thousands of automobile suppliers, which practically paused everything in China's overall automobile market. By the end of May, the Chinese government proposed a reduction of passenger car taxes in separate phases totaling RMB 60 billion to save the dwindling automobile market. However, the impact of unfavorable factors such as the rebound of the epidemic after the end of restrictions in the fourth quarter, decline in demand, and impact on the supply chain affected the entire economy, which created continuous downward pressure on the sales of the new automobile market. However, the strong growth of new energy vehicles continued with the support of government policies and subsidies, which powered the steady growth of China's overall automobile market after the upheaval. The year 2024 marks one year since the Chinese government relaxed its epidemic lockdown policy. The economy has not brought about expected growth. The overall environment faces insufficient effective demand, among which the shortage of consumer demand is more obvious. Investment demand continues to be sluggish due to the decline in real estate. The weakening of the demand side is transmitted to the supply side, leading to the dilemma of insufficient domestic demand and imbalance between supply and demand. 2023 is a key milestone year for the Chinese automobile market as it witnesses the rise of domestic brands. Their market share in China has exceeded 50% for the first time. However, with the continuous guidance and support of national policies and the involution of prices, the penetration rate of new energy passenger vehicles has exceeded 50% for five consecutive months since July 2024. The market share of domestic brands has taken advantage of the opportunity to reach 65.2% in 2024, making it the world's largest automobile exporter for two consecutive years. We have observed that under the guidance and support of national policies, new energy vehicles have gradually replaced the traditional fuel vehicle market, allowing independent brands to take advantage of the trend to increase market share. Nevertheless, countless automobile companies and business operators enter into fierce competition to fight for the market share against this growth backdrop. In this market environment, even the production and sales figures reach a new high, it is difficult to hide the anxiety and insecurities of the OEMs and the supply chain. As per the data from the China Association of Automobile Manufacturers, the number of new cars sold in China's auto market in 2024 reached 31.436 million, an annual increase of 4.5%. The sales of passenger cars increased by 5.8% compared to 2023. While many joint venture brand car manufacturers in China made mistakes in their new energy vehicle strategies, the independent brand car manufacturers took advantage of policy support and the sales of new energy vehicles boosting the passenger car market share at a record high of 65%. Japanese and German car manufacturers showed a significant decline. The three major Japanese car manufacturer customers of the Company have faced the challenge of new energy vehicles, and the proportion of revenue has declined to about 45%, while the proportion of self-brand customers has increased significantly to 28%. Therefore, the Company's overall revenue in 2024 will decrease by 11.8% from 2023. Among them, the company's new energy vehicle sales revenue will also account for 18.6% in 2024. It is expected that automobile brands will not only focus on lightweight technologies but enhance AI-based and eco-friendly interiors of new cars. With the competitive advantage of having a complete vertical and horizontally

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integrated manufacturing process, we are confident in obtaining more orders and opportunities for new car models, so as to maintain the high uptime of the production capacity of our production sites, to enable our operating performance to be better than the average sales growth rate in the new car market. In addition, as the Chinese government imposes more stringent regulations on vehicle emission standards, alternative fuel vehicles will replace vehicles that do not meet the regulations. Coupled with a continuous wave of urbanization, there remains a very strong and inelastic demand in the Chinese automobile market.

(2) Continuous increase in the global demand for cars

The global demand for cars will continue to increase in the next few decades, and countries around the world are also actively developing the automotive industry, indicating the increasingly critical role that the automotive industry is playing. There are three major car markets in the world, namely Asia, the U.S. and Europe. All three markets are huge with mass production capabilities. According to the report, global new vehicle sales in 2024 will reach 89 million units, up by 2% from 2023. China still accounts for 29% of the auto market, coming out of the impacts of COVID-19 pandemic over the past three years. However, the ongoing China-Us trade conflicts, inflation, soaring interest rates and geopolitical conflicts have caused major uncertainties to the economic outlook. It is estimated that the number of new vehicles sales will reach 90.60 million in 2025, of which the output of new energy vehicles is expected to reach 16.29 million. U.S. car sales are expected to increase to 16.3 million units in 2025, a 1% increase from 2024, and the number of pure electric vehicles will reach 1 million. However, U.S. consumers will continue to face difficulties such as high interest rates and tight credit conditions. Despite the geopolitical conflicts and rising energy consumption, the automobile production recovers quickly, and the sales volume of new cars in Europe is still expected to reach 13.59 million units in 2025, up 1% from 2024. Based on the data of 2024, the trend of large SUVs and pickup trucks replacing sedans in the North American market was still ongoing. However, high car prices and high interest rates have a slowing effect on the promotion of new energy vehicles, the challenges posed to the future of the automotive industry are daunting.

Although China's car preferential policies or measures have been due or canceled since 2011, China's government has gradually switched from a macro-control policy to a proactive fiscal policy and a stable monetary policy due to the pressure of inflation, the auto market has witnessed two consecutive years of low growth, but in 2013, it surged by 14%. Both the production and sales of new cars exceeded the 20 million mark. Although it only grew by 4.7% in 2015, China's government launched a policy to halve the purchase tax for cars with a 1,600 c.c. (or lower) engine in 2016, pushing up new car sales growth by 13.7%. In 2017, the preferential policy of halving the purchase was extended for one year by 2.5%, and the growth rate dropped to 3.04%. In 2018, the number of new cars sold was 28.081 million, an annual decrease of 2.8%. In 2019, due to the impact of the China-US trade conflict, the number of passenger cars sold decreased by 9.6% compared with 2018. This is the first time in 20 years that China's car sales have declined for two years. "Low-speed growth" will become a new normal in China's car market in the future. In 2020, new car sales in mainland China continued to decline due to the impact of the pandemic. Although the global shortage of automotive chips in the first three quarters of 2021 affected the production and

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sales of cars, a silver lining appeared at the end of the third quarter. With car manufacturers' full-speed delivery in China during the peak season at the end of the year, the sales of the passenger car market in China showed a trend of growing from a low point throughout the year. The number of new cars sold in 2022 reached 26.684 million, an annual increase of 2.1%, without being impacted by the epidemic. The sales of passenger cars increased by 1.9% compared to 2021. The number of new cars sold in China's auto market in 2023 reached 30.094 million, an annual increase of 12%. New car sales in 2024 will reach 31.436 million units, a year-on-year increase of 4.5%, of which passenger car sales will increase by 5.8% compared to 2023. While many joint venture brand car manufacturers in China made mistakes in their new energy vehicle strategies, the independent brand car manufacturers took advantage of policy support and the sales of new energy vehicles boosting the passenger car market share at a record high of 65.2%. Japanese and German car manufacturers showed a significant decline. It is estimated that the sales volume of new cars in China will exceed 32.9 million units in 2025, with a growth rate of 4.7% compared to 2024. Our strategy is to continue to consolidate and deepen our ties with the existing clients, i.e. Japanese car manufacturers in South China and Central China and actively develop new clients in east China, while striving to obtain orders from European and the U.S. car manufacturers with our professional manufacturing skills and high-quality services.

To sum up, we continue to enhance our injection molding, surface coating, water transfer printing, IMD, OMR, wooden and plastic plating, and laser engraving technologies for automotive interiors and exterior trim parts in the future, while actively developing thermal printing, vacuum transfer printing technologies as well as illuminated and smart products with touch function. The continuous increase in the global demand for cars and the growth momentum in China's car market will further drive the growth in the Company's business performance.

Competitive niche:

(1) Excellent surface treatment technology

Surface treatment technology is one of the Company's core technologies. We adopted Japan's cubic printing technology in 1999, and its advantage is that patterns can be printed on any curved surface, and a plastic sheet can be turned into a sheet with imitation walnut wood patterns, to enhance the appearance and practicality of car interiors, bringing luxurious cars to the next level. We adopt water transfer printing and dry transfer (IMD and OMR) technologies to produce car interiors and have entered the Japanese car manufacturers' supply chains, showing that our skills and management have been recognized. In China's three major Japanese car brands' flagship cars, including Guangzhou Honda's Accord, Guangzhou Toyota's Camry, and Nissan's Altima, the plastic decoration parts for their gearboxes, dashboards, and doors are all produced by the Company. In addition, the same technology is adopted for Nissan's X-trial and Chrysler's Jeep.

(2) Certified by many international car manufacturers for quality with an independent training system established

The Company already passed the ISO 9002 quality assurance certification and the QS 9000 international quality management system assurance certification in the car industry in 2002 and also passed the IATF 16949 international quality management system quality assurance certification in the car industry in 2004.

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Each stage of the process from manufacturing, quality inspection to sales are regulated by relevant systems and operating standards. Our quality system has been audited by many international car manufacturers and recognized by awards, including the Q1 Quality Award by FORD in 2008. Furthermore, we have a complete training system to cultivate technical, quality, and management talents on a long-term basis to meet the needs for future development.

(3) Stable quality and price advantages

The automotive industry is an oligopolistic and closed market dominated by a small number of car manufacturers. The most basic condition for entering the component supply chain is to pass the QS 9000 and the TS 16949 certifications. The certification process is long and cumbersome. With our own resources and excellent management team, the Company is one of the few auto component suppliers that have passed the QS 9000 and the IATF 16949 certifications and implemented the factory 5S management system. We occupy a leading position in the industry in terms of product technology and quality. Our products have bee trusted by clients, we have formed stable partnerships with them, so products with stable quality and competitive prices are the Company's competitive niches.

(4) Solid market position due to a high barrier to entry for products with few competitors

The R&D cycle of general auto components is about half a year, but the verification time usually lasts for three months to one year. If a car manufacturer works with a Tier 1 supplier for the first time, it takes as long as three years from qualification review, verification to delivery of samples. For Tier 1 suppliers, it takes considerable cost and time to maintain and supervise their existing suppliers, so if they want to terminate the collaboration with the existing suppliers and replace them with other suppliers, they need to go through the certification process again, it is unable to predict the influence of new parts on the products. Therefore, due to a conservative approach and the consideration for cost and risk, Tier 1 suppliers usually do not easily change their parts suppliers, so the possibility of such suppliers being replaced is low. This is a special phenomenon for the car industry, and it is also a barrier to entry for other suppliers. Therefore, there are few competitors in the market; once entering the market, most suppliers can maintain long-term business. The Company has formed trustworthy and stable partnerships with joint ventures of car manufacturers, including Toyota, Nissan, Honda, Ford, General Motors, and Chrysler, has obtained new orders from self-owned brands, and obtained BYD's Tier 1 supplier qualification, has successfully entered the system formed by automotive component suppliers and downstream automobile manufacturing businesses. Thus, our position as an auto components supplier is firm and stable with great potential for the development and marketing of other auto components in the future.

(5) Adoption of high-precision machinery and equipment from Japan and Europe to ensure product quality and stability

We continue to enhance production equipment by adopting high-precision machinery and equipment, including cubic printing and automated spray coating robot arms as well as inspection and injection molding machines from Japan, Germany, and Sweden, to ensure production quality and the output of products as well. Also, mold design, automated processing, and performance

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testing have been gradually moved toward automated operations, so we can meet clients' delivery needs and deliver goods on time, while increasing production capacity, cutting costs, and developing high value-added products, to stand out in the market competition.

The favorable and unfavorable factors for future development and countermeasures

(1) Favorable factors

A. The orders from car manufacturers are for planned production, so the quantity in the orders placed to component suppliers is relatively stable and long-term.

The automotive industry is very strict about product quality testing and certification, which is a tedious and lengthy process, and it takes about three to five years for car manufacturers to find suitable suppliers and place orders officially. Thus, once a component supplier becomes part of a car manufacturer's supply chain, it will not easily transfer orders or terminate contracts. Car manufacturers adopt a planned production model and usually place orders in an estimated quantity for several months or even a year for suppliers to schedule production, and suppliers produce and manufacture goods as per the scheduled delivery plan. Thus, the quantity in orders placed to component suppliers is relatively stable and long-term.

B. Major car manufacturers adopt a global procurement strategy to increase sales opportunities

In recent years, oil prices and raw material prices have continued to rise, which has seriously affected the survival of the automotive industry. In addition to actively seeking new alternative energy vehicles, this industry still needs to further cut the cost of car manufacturing to increase the Company's profitability. Also, with global Tier 1 component suppliers' mergers or restructuring, major car manufacturers and Tier 1 component suppliers will adopt a global procurement and outsourcing strategy to cut procurement costs. In the future, global car production orders will be released to other component manufacturers in a large quantity. The quality and price control for our products have been deeply recognized by major car manufacturers, so there is still substantial room for future growth.

C. China is the world's largest production base for automobiles, and China's growth is accelerating.

China's growth is accelerating. In 2023, the sales volume of new vehicles will reach 30,094,000 units, a year-on-year increase of 12%. The sales volume of passenger cars will increase by 10.6% from 2022, and continue to rank first in the world. Despite the impact of the COVID-19 pandemic in the past three years, the US-China trade war has not eased. Inflation, soaring interest rates, and geopolitical conflicts have created significant uncertainties for the economic outlook.

Despite the impact of the epidemic, the government's incentive policies for people's willingness to change cars will continue to prop up the stable growth of China's car market, with great potential for future growth. The market opportunities from stable sales will make China the most potential market for the auto components industry.

Also, in recent years, China has adjusted its foreign investment policy strategically, to shift its focus from quantity to quality and structural optimization based on the major foreign direct investments. Electronic

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products, most car components, and even finished goods are manufactured in China and exported to the rest of the world. After this strategic adjustment, the industrial structure will be fundamentally reinforced, and more car manufacturers and relevant components manufacturers will be attracted to move their processing and manufacturing plants to China. Consequently, the future demand for auto components will be enormous for the Company, which is actively building a business layout in China.

D. Japanese car manufacturers are still actively building business layouts in China’s car market.

The thriving car market has made China a market into which international car giants are actively stepping. Foreign brands and their joint ventures have stepped up their investments and business operations in China, to strive to expand their production capacity in China. Among them, Japanese ones have demonstrated their great ambition. Japanese car manufacturers aimed to quickly obtain information on the needs in China’s auto market through localization of R&D and production, to speed up the conversion of product ideas into production capacity, while making the most of China's natural resources and labor resources to realize the market values of products and expand their market share in China. However, due to the impact of the China-Japan conflict over the Senkaku Islands in the fourth quarter of 2012, the market shares of Japanese car models plunged with great uncertainty about whether the Japanese car manufacturers would expand as planned. However, as China’s car market was the largest in the world and the tension between China and Japan continued to ease, the sales of the three major Japanese car manufacturers in China’s market exceeded one million units in 2016 and witnessed double-digit growth in 2017. In 2023, despite the decline in production and sales due to the impact of the pandemic and the market share of self-owned brand new energy vehicles, the Japanese cars still have a growth market share of 17.01%. However, due to the internal competition of domestic brands, they have cut prices drastically to seize the market. The Japanese automobile manufacturers continued to accelerate the development of alternative fuel vehicles in the Chinese market. According to the strategies they completed for the Chinese market, the Company has the opportunity to follow the expansion plans of Toyota, Nissan, and Honda and attain stable growth.

E. Orders from global car models and European and the U.S. car manufacturers are obtained

With the globalization trend and strategy, to improve the cost of repeated purchase of molds produced at multiple sites for the same models of cars and make the most of China's production, the car manufacturers have begun to adopt a strategy of production at only one site and global delivery to enhance their competitiveness. Since 2014, we have begun to cooperate with their strategy by providing global car production services. We are delivering our finished goods for Nissan's X-trial and Murano. In addition, our new Mexico plant’s automated dry transfer line went into mass production in alignment with the clients’ new car production schedule in the third quarter of 2020. The Company has also made significant progress in the orders from European and the U.S. car brands in China’s market. After Ford, we have entered the supply chains of GM and Chrysler. We are

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actively cooperating with the car manufacturers' development of a variety of new cars, In addition, in August 2024, 46,000 square meters of land has been purchased in Mexico to expand production capacity in line with the needs of North American customers. which is beneficial to future revenue growth.

(2) Unfavorable factors and specific countermeasures

A. Rising labor costs in China

Since January 1, 2008, China’s government has begun to launch the new Labor Contract Law of the People's Republic of China. Social insurance, training costs, leave of absence, and rewards and punishments are clearly regulated, and enterprises also need to sign clear written labor contracts with workers. Relevant regulations have led to a significant increase in enterprises’ labor costs. In recent years, China’s government has been committed to bridging the gap between urban and rural areas and enhancing rural development. After the economic environment and employment conditions have improved in rural villages, the number of workers who are willing to leave their hometowns and work in coastal cities has decreased considerably. As a result, workers are insufficient, and coastal cities launched policies to increase wages and improve working conditions to attract workers. Also, China has been undergoing a wave of adjusting the local minimum wage standard since 2010, and most of the pay raises are above 15%. The 2025 minimum monthly salary in Dongguan has been raised from 1,910 RMB to 2,080 RMB, but we have raised it to attract talent. The growing salary costs have also caused labor costs to continue to rise, which has, in turn, caused a negative impact on business profits.

Countermeasures:

a. As for the shortage of manpower in China's labor market, we will widely sign internship agreements with schools, recruit workers through dispatch work agencies, and promote employee referrals to effectively alleviate the issue of manpower shortage in the future.
b. We will replace partial manual operation with more semi-automated equipment, continue to improve the existing production and operating processes, and adopt advanced production equipment to improve production efficiency and reduce manufacturing costs.

B. Price cuts in alignment with car manufacturers' policies and export tariffs to North America

After a car model is mass-produced, a car manufacturer may face competition from other car brands. To maintain its sales, it is pressured to lower the selling price of the car and ask the upstream suppliers to reduce the price of components to transfer the pressure of the price cut, which will reduce component manufacturers' gross profit. In addition, due to the Sino-US trade friction, the limited conversion of additional tariffs also pushed up sales expenses.

Countermeasures:

a. Take measures to increase the product yield, improve the production process, improve the reasonableness of production costs, and expand sales in the global market, so as to increase production volume and

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value, expand the economies of scale for production, and reduce the proportion of fixed production costs.

b. Continue to improve the existing technology, adopt other decoration technologies, optimize the production line process, and adopt automated equipment, vertically integrate and horizontally expand technologies, improve our management quality and operating efficiency, as well as develop high value-added products to maintain the overall gross margin.

C. Strict and lengthy product quality verification process

As the quality and reliability of auto components are more important than those of information products, even if long-term partnerships on the basis of mutual trust have been established, new products still need to go through a long-term testing and verification process, which is costly and risky. For the Company, investing in developing new products or maintaining the existing product lines are closely associated with our future development, so it is a potential risk that cannot be ignored.

Countermeasures:

a. We have a number of products that have been verified by clients and mass-produced and shipped, so our business operations are stable, and we are competent to cope with the time and costs required for new product verification in the future.
b. We have been engaging in the surface treatment of interiors and exterior trim parts of cars for many years. Our product quality has been highly recognized by clients with a good reputation established in the industry. Therefore, it will be easier for us to develop new products.
c. We will improve the organization of the R&D Department, enhance our R&D capabilities, increase the number of products to be developed, and reduce the impact of the lengthy certification process for individual products on business performance by developing a large number of products. With a large number of new products, the idle period due to product certification can be shortened.

(II) Important functions and production processes of main products

Important functions of main products

Main products	Functions of products (services)
Molding and surface treatment of plastic parts, such as cubic printing (water transfer printing), spray coating, IMD, OMR and 3D laser engraving, etc..	1. Interior appearance decoration, such as the armrest consoles, dashboards, steering wheels, and door handles.
2. Decoration of car seats and airbag covers.
3. Electronic product casings.
4. Knob assembly and decoration
5. Car interior leather covering

2. Production process of main products

(1) Water transfer printing process

(2) IMD process

(3) OMR process

(4) Leather covering for interior parts

(5) Car atmosphere light assembly and processing

3. Supply of main raw materials

The Company has established long-term positive supply partnerships with major raw material suppliers, while paying attention to the market conditions to stabilize the purchase prices of key raw materials and establish long-term strategic partnerships with suppliers. Thus, the supply of materials is stable.

Major raw material	Suppliers	Supply status
Gum	Guangzhou Shitian Material Technology Co., Ltd.	Good

(III) List of major clients and suppliers

Information on major suppliers in the most recent two years

Unit: NT$ thousands

No.	2023				2024
	Name	Amount	Percentage in Total Net Supply (%)	Relations hip with the Issuer	Name	Amount	Percentage in Total Net Supply (%)	Relations hip with the Issuer
1	NISSAN TRADING (CHINA)	188,856	6.93	-	NISSAN TRADING (CHINA)	139,781	6.07	-
2	NISSHA (Shenzhen)	173,487	6.36	-	NISSHA (Shenzhen)	115,960	5.04	-
	Others	2,363,850	86.71	-	Others	2,051,889	88.89	-
	Net Purchases	2,726,193	100.00	-	Net Purchases	2,307,630	100.00	-

The increase/decrease in the supply by major suppliers in the most recent two years As all suppliers in the automotive industry need to pass a car manufacturer's certification, to ensure the stable quality of raw materials, the suppliers of our raw materials are mainly designated by clients.

Information on major clients in the most recent two years

Unit: NT$ thousands

No.	2023				2024
	Title	Amount	% of annual net sales	Relations with the issuer	Title	Amount	% of annual net sales	Relations with the issuer
1	Marelli (Guangzhou)	509,831	8.85	-	NISSAN TRADING (CHINA)	480,208	9.44	-
2	Toyota (Foshan)	421,870	7.32	-	YanFeng	372,645	7.32	-
3	YanFeng	406,351	7.05	-	Marelli (Guangzhou)	326,123	6.41	-
4	Guangzhou Yingtai Automotive Trim	321,458	5.58	-	Yanfeng Automotive Trim Systems (Changsha) Co., Ltd.	266,203	5.23	-
5	Others	4,101,778	71.20	-	Others	3,642,446	71.60	-
	Net Sales	5,761,288	100.00	-	Net Sales	5,087,625	100.00	-

Explanation of the increase and decrease of the amount and ratio:

The changes in the Company's sales customers are mainly due to adjustments in business strategies, market and individual customer business needs and performance. There have been no significant changes in the sales customers in the past two years and the most recent period.

In 2014, Toyota Gosei withdrew from the top ten customers due to the discontinuation of Camry under GAC Toyota and poor sales of fuel vehicles in the market, which resulted in customers having difficulty in transporting goods. In 2014, Guangzhou Yingtai Automotive

Trim Co., Ltd. dropped from the fourth largest customer in the previous year to the seventh largest customer. There were no major changes in the rest of the customers.

4.3 The number of in-service employees during the most recent two years and up to the publication date of this annual report

Unit: Person

Year		2023	2024	As of March 31, 2025
Number of Employees	Direct employees	1,583	1,479	1,224
	Indirect employees	731	675	615
	Total	2,314	2,154	1,839
Average Age		37.12	37.34	38.17
Average Service Year		5.09	5.43	5.36
Academic distribution ratio	Ph.D	0.0%	0.0%	0%
	Master's degree	0.3%	0.3%	0%
	College and university	22.2%	20%	24%
	High school	17.1%	23%	17%
	Below high school	60.4%	57%	49%

4.4 Information on environmental protection expenditure

Any losses suffered by the Company during the most recent two years and up to the publication date of this annual report due to environmental pollution incidents (including any compensation) and total amount of the penalty, as well as the countermeasures (including improvement measures) and an estimate of potential expenses (including the potential loss, penalty, and compensation that might be incurred due to the failure to take countermeasures. If the amount cannot be reasonably estimated, please specify the fact that it cannot be reasonably estimated):

During the most recent year and up to the publication date of this annual report, the Company did not suffer any loss (including compensation) nor was imposed with any penalty due to environmental pollution.

4.5 Labor-management relations

(I) Any employee benefit measures, continuing education, training, pension system and implementation, labor-management agreement, as well as measures taken to protect employees' rights

Employee benefit measures

The Company has a union and an Employee Meal Committee in place, and the representatives of such organizations were elected by employees to handle employee benefits and labor-management relations. Also, the Company's main operating sites are located in mainland China, so we purchased social insurance policies (pension, unemployment, occupational injury, medical treatment, and maternity insurance) as well as participated in a housing provident fund for all employees in accordance with local labor laws and regulations. We also purchase accident insurance for employees to protect their well-being. We contribute to the housing provident fund in accordance with the Dongguan City Housing Provident Fund Contribution Regulations within one month after each employee is recruited, to provide them with a comprehensive benefits package. We regularly hold employee lottery activities per year at an expense of about

500,000-600,000 RMB per year.

We provide free board and lodging. In terms of accommodation: dormitory rooms are divided into rooms with a single bed or a double bend and couple room with high quality. We provide a warm breastfeeding environment for nursing employees.

We provide an elegant dining environment. The restaurant is equipped with air-conditioners and TV, and the meal quality is also constantly improving.

We offer free shuttle bus services for employees to commute to and from work. We regularly organize free health examination for employees every September or October and free health examination for employees in special operations per quarter to ensure their health.

We offer a certain amount of birthday cash gifts to employees who have served for one year in the month in which their birthday takes place. If an employee is newly married, they can apply for a wedding cash gift of 300-1500 RMB with their marriage certificate. If there is an employee’s immediate family member passed away, they can apply for a funeral condolence payment of 100-1200 RMB. The cost of this benefit fund is about 60,000 RMB per year.

The Company has established an employee activity center to for employees to learn, have fun, mingle, and exercise to enrich their life after work.

We offer relevant employee retention incentives and hold employee activities per year, such as cultural and sports competitions, holiday gift packs, and employee gathering parties, to enhance their loyalty and teamwork.

Employee training, training system, and implementation are as follows:

To enable all our employees to understand the Company's history, goals, and mission and be familiarized with the work environment and rules and regulations, we offer pre-employment training for new employees in accordance with rules. To continuously improve employees' performance and professional skills, each department draws up an annual training plan as per the Company's development goals and implements the internal and external training plan based on said plan, to pass on our experience and knowledge and access the latest information in a timely manner.

To improve employees' cultural literacy and professional skills, we encourage them to actively participate in the on-the-job training and skills training based on their job positions, while having our employees sign up for an on-the-job training and professional skills training program together per year. Employees can obtain nationally recognized academic certificates and develop their professional skills through the on-the-job training program. The Company has been awarded the "Vocational Skill Level Accredited Enterprise" in July 2023. A total of 231 junior, intermediate and senior skilled talents have passed the assessment to participate in the assessment of the city's "Skilled Master Studio" qualification.

The pension system and implementation

The Company's main operating sites are located in China. We purchased pension insurance for employees in accordance with local labor laws and regulations and also contribute to the employee insurance funds on a monthly basis in accordance with local regulations to protect their well-being. The Company shall retire employees who have reached the statutory retirement age

138

in accordance with laws and regulations. Some retired employees are re-hired based on their physical and mental health, individual wishes and the Company's needs.

Work environment and personal safety protection measures

We obtained ISO 14001 environmental management system certification in 2005 and adopted the traditional Plan-Do-Check-Act (PDCA) management approach. All our employees follow the Company's environmental policy to prevent pollution and comply with environmental laws and regulations. We continue to make improvements to reduce waste of resources. We protect the environment and build a garden factory with our employees.

Employees in dangerous operations (such as manufacturing, warehousing, and transportation) need to implement the standard operating process in accordance with the special equipment management regulations and the hazardous chemical management regulations.

We also offer annual safety production education and training and obtained the level 2 safety production standardization certificate in 2014.

Regarding safety in the factories, we trained the security guards on our access control management system to thoroughly protect personal safety in the factories and hold four factory-wide fire exercises per year to improve personnel's ability to evacuate and use firefighting equipment in the event of a fire.

The Company obtained the OHSAS 18001 occupational health and safety system certification in 2018 to enhance the protection of our employees. We hold the occupational illness examination twice per year and the employee medical examination once per year to ensure their personal safety in the work environment.

To reduce domestic waste and enhance recycling and non-hazardous management, while accelerating the development of recycling and a low-carbon economy, we have begun to sort waste at some factories since April 2021 as per the national, provincial, and municipal requirements as well as the Company's needs.

Labor-management agreements and employee right protection measures

The Company's subsidiaries have safeguarded workers' legitimate rights in accordance with the Labor Contract Law of the People's Republic of China. To create harmonious labor-management relations, a labor union has been established in accordance with the law, harmonious relationship. Moreover, a two-way coordination model is often adopted to address labor-management issues to ensure harmonious labor-management relations. In addition, we have established a comprehensive document management system, which clearly contains employees' rights and obligations and benefits projects in various management regulations. With regular union meetings held, the Employee Welfare Committee can adjust the benefits in a timely manner based on employees' reasonable requirements to maximize employees' benefits.

(II) Losses suffered due to labor disputes in the most recent years and up to the publication date of this annual report, the estimated potential amount at present and in the future, and countermeasures; if the amount cannot be reasonably estimated, please specify the fact that it cannot be reasonably estimated.

There were three labor disputes in the Company last year.

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(a) X-Hung Liao: for the dispute over the salary payment during the probationary period, the Company compensated $7,700 RMB, and the case has been closed. (at the year of 2023)

(b) X-Lin Tan: Due to the payment of leave wages during the pandemic, the plaintiff applied for labor arbitration, requesting the company for compensation of $76,065 RMB. Currently, the Dongguan City No. 2 People's Court has ordered compensation of $41,932 RMB. An appeal was filed. Since the two parties failed to reach an agreement on the mediation plan at the stage of second instance, the trial will proceed to the stage of second instance. The second instance court ruled that the company should pay RMB 1,510 and the case has been closed. (at the year of 2024)

(c) X-Hua Chiang: A labor dispute arose with the Company over high-temperature allowance and financial compensation issues. After a trial in accordance with the law, the arbitration tribunal ruled that the Company should pay the employee a high temperature allowance of $1,500; the case has been closed. (at the year of 2024)

(d) Qing Hui: The employee had a labor dispute with the company over shift pay during the May Day holiday and unused annual leave pay, and the total amount of the claim was RMB 7,460.95. After the arbitration hearing, it was ruled that the company should pay the employee a total amount of RMB 1,864.83. Case closed. (at the year of 2024)

(e) Chen Jingrong: The employee filed an arbitration request with the company for compensation for termination of the labor contract, unused annual leave wages, accommodation allowance, etc., with a total amount of RMB 42,536.9. After the arbitration was heard in accordance with the law and the two parties reached a mediation intention through negotiation, the company paid the employee RMB 10,000 to settle the case. (at the year of 2024)

4.6 Cyber security management

(I) Cyber security risk management framework

The Company's Information Department is in charge of cyber security. With the President's full authority and guidance, we have formulated cyber security policies and established a security system to prevent potential risks and ensure information security.

(II) Cyber security policies

Should be in compliance with the requirements in laws and contracts
Maintain the integrity and availability of data
Restrict the access to confidential information
Ensure that permitted users can access files and resources
Prevent accidents from causing damage to hardware, software, and other resources
Prevent vandalism to hardware, software, and other resources
Prevent improper use of online resources

(III) Specific management plans and resources put in cyber security management

Item	Risk analysis	Risk prevention specific measures and resources invested
Should be in compliance with the requirements in laws and contracts	The use of pirated software poses legal risks to the Company.	The Company complies with the Regulations on Computers Software Protection and purchases an amount of copyrights corresponding to the software required by the Company for office work.
Maintain the integrity and availability of data	Data corruption or unusable backup data is prevented	The Company's important databases are backed up on time automatically every day, and the data for every three months is retained at the end of every three months on a rolling basis, and the backup data is regularly compared with the original data.
Restrict the access to confidential information	Leakage of confidential data will not only cause losses to the Company, and clients may lost their trust in the Company.	We have purchased and adopt IPGuard software to encrypt confidential data to prevent improper access to important data.
Ensure that permitted users can access files and resources	Improper access to data is prevented.	We have assigned a user ID and a password to each computer user, and the data access rights are regulated as per their job positions and responsibilities.
Prevent accidents from causing damage to hardware, software, and other resources	Hardware is down suddenly, leading to interruption of operations.	We have installed lightning surge protection devices on the rooftop of the Company's data center, and the uninterrupted power supply (UPS) system in the data center is equipped with an anti-surge function. We have signed maintenance contracts with the suppliers of the hardware servers purchased, to ensure on-site warranty services for unexpected hardware failures 24/7.
Prevent vandalism to hardware, software, and other resources	Vandalism to hardware will cause data loss and damage to the Company's property.	The Company's servers are placed in the data center. The systems are equipped with a disaster recovery mechanism and a necessary UPS system. Access to the data center is limited to the MIS personnel. The OS system of the servers is protected by anti-virus software, and the latest virus pattern is updated online where appropriate. RAID1 or RAID5 is adopted for data storage, and data is backed remotely.
Prevent improper use of online resources	Intrusion into the Company's network and data leakage may happen.	We have adopted Sangfor Technologies Inc.'s internet behavior management gateway and firewalls and defined the network access rights. Unauthorized access to external networks is restricted. Visitors in the Company can only access the Company's extranet and cannot access the intranet without permission.

(IV) No loss was incurred to the Company due to major cyber security incidents during the most recent year and up to the publication date of this annual report.

4.7 Important contracts

The parties concerned, main contents, restrictive covenants, and the start and the end dates of supply and sales, technical cooperation, engineering, long-term loan contracts, and other important contracts that can affect shareholders' equity, which were still valid as of the publication date of this annual report or expired during the most recent year.

Nature of contract	Parties concerned	Start and end dates	Main contents	Restrictive covenants
Technology licensing	Taica Corporation, Dongguan Hirosawa, and Wuhan Hirosawa	Between May 10, 2010 and May 9, 2020, the three parties did not notify each other of the termination one year before the expiration date, the contract period is automatically extended for two years.	License to use cubic printing technology in eight provinces and regions of China	Confidentiality of technological information; Relevant technologies cannot be transferred without Taica Corporation's permission.
Lease agreement	Dongguan Mingda Industrial Co., Ltd. and Dongguan Hirosawa	2009.4.1 through 2055.4.30	Dongguan Hirosawa leased factory D from Dongguan Mingda Industrial Co., Ltd.	None
Investment agreement	Wuhan Hannan District People's Government and Hiroyoshi Investment	Signed on June 30, 2010	The 100-acre land is used for an auto component production project and development projects	None
Trading agreement	Taica Corporation, Lofty Group, Dongguan Hirosawa, and Wuhan Hirosawa	The agreement was signed on November 1, 2010, and the validity period is the same as that in the technology licensing agreement.	Dongguan Hirosawa and Wuhan Hiroyoshi purchased the films and activating agents for the cubic printing process from Taica Corporation through Lofty Group.	Party A and Party B shall not disclose or leak the technology and the transaction information obtained through this agreement or relevant agreements to any third party within the agreement period and within three years after the agreement expires without the other party's written consent.
CUBIC Accessory contract	Dongguan Hirosawa, Wuhan Hiroyoshi, and Wuhan Hiroyoshi	Signed in July 2012	Dongguan Hirosawa and Wuhan Hirosawa agreed to terminate the outsourced processing work between both parties. Wuhan Hirosawa no longer had the right to engage in outsourced processing related to cubic printing and must not engage in business activities related to the cubic printing process or in competition against cubic printing, and Wuhan Hirosawa should transfer its rights and obligations in the Cubic Technology Licensing Agreement and business assets related to this technology to Wuhan Hiroyoshi. Meanwhile, Dongguan Hirosawa promises that Wuhan Hiroyoshi will carry out the business outsourced by Dongguan Hirosawa and related to this technology. This contract took effect upon Dongguan Hirosawa's instructions.	None
Lease agreement	Dongguan Yichang Industrial Co., Ltd. and Dongguan Hirosawa	2023.03.11 through 2025.10.31	Lease the steel structure iron shed on the 2nd and 3rd floors of factory building A and on the roof.	None

Nature of contract	Parties concerned	Start and end dates	Main contents	Restrictive covenants
Lease agreement	Dongguan Yichang Industrial Co., Ltd. and Dongguan Hirosawa	A new supplementary agreement has been added to extend the expiration date to 2025.10.31	Lease the workshops B and C, warehouse B, dormitory B, paint warehouse, and equipment room	None
Property management contract	Dongguan Yiwang Property Management Co., Ltd and Dongguan Hirosawa	2023.03.11 through 2025.10.31	Dongguan Hirosawa lease the property management fees of workshops B and C from Yichang Industrial Co., Ltd. on the 2-3 floors of workshop A and the roof iron shed, warehouse B, dormitory B, paint warehouse, and equipment room
Service contract	Dongguan Houjie Science and Technology Industrial City Co., Ltd. and Dongguan Hirosawa	2023.12 until the end of the land contract	Dongguan Hirosawa Hetian Factory Management Service Fee
Land transfer agreement	Dongguan Houjie Technology Industrial Co., Ltd. and Dongguan Hirosawa	2020.6.3 through 2070.6.2	Dongguan Hirosawa leased a factory, occupying an area of 39,589.1 square meters, from Dongguan Houjie Technology Industrial Co., Ltd.	None
Loan(s) for financing	Dongguan Hirosawa /China Citic Bank	2020.11.23 through 2030.11.23	Ten-year fixed-asset loan of 240 million RMB	Land and property pledged as collateral with four certificates submitted; a combined property insurance policy was purchased; the percentage of its own fund for the project is not less than 20%.
Utilities projects	Guangdong Guangzhihang Energy Technology Co., Ltd.	2022.05.09 through 2023.05.08	Primary side power distribution installation project of 3# factory building of new factory	Completed according to the date agreed in the contract, the warranty period is one year
Renovation Project	Dongguan Huayuan Construction Engineering Co., Ltd. and Dongguan Hirosawa	2022.06.02 through 2023.06.01	New factory 4# dormitory building decoration project	If there is an increase or decrease in the construction process, the settlement will be made according to the actual materials and consumption, and a supplementary agreement will be signed later
Renovation Project	Guangdong Aiifan Construction Co., Ltd. and Dongguan Hirosawa	2022.08.02 through 2023.08.01	New factory 5# old canteen decoration project	Completed according to the date agreed in the contract, the warranty period is one year
Equipment contract	Dongguan Tonghui Electromechanical Engineering Co., Ltd. and Dongguan Hirosawa	2022.08.04 through 2023.08.03	Daikin central air-conditioning (1# complex building)	Completed according to the date agreed in the contract, the warranty period is one year
Renovation Project	Guangdong Aiifan Construction Co., Ltd. and Dongguan Hirosawa	2023.01.13 through 2024.01.02	Weak current project of new plant (including equipment)	Completed according to the date agreed in the contract, the warranty period is one year

Nature of contract	Parties concerned	Start and end dates	Main contents	Restrictive covenants
Renovation Project	Guangdong Aiflan Construction Co., Ltd. and Dongguan Hirosawa	2022.06.08 through 2024.01.02	Interior decoration project of No. 1 Comprehensive Building	The construction period will be adjusted according to the civil engineering acceptance status. If there are additions or subtractions during the construction process, settlement will be based on actual materials and usage, and a supplementary agreement will be signed later.
Renovation Project	Dongyi Central Air Conditioning Co., Ltd. and Dongguan Hirosawa	2023.01.13 2024.01.02	Workshop clean room partition project	Completed according to the date agreed in the contract, the warranty period is one year
Clean Room	Dongguan Hirosawa/Dongguan Construction Supervision Co., Ltd.	2023.1.31 through 2024.1.31	Cleanroom partition project for 2F electronics workshop of 3# Plant of the new plant	Project is completed as per the date of contract, warranty period is one year
Decoration project	Dongguan Hirosawa/Guangdong Aifulan Construction Co., Ltd.	2023.3.14 through 2024.4.14	Park planning (new plants)	Project is completed as per the date of contract, warranty period is one year
Civil engineering works	Dongguan Hirosawa and Dongguan Huayuan Construction Engineering Co., Ltd.	2023.9,8 through 2024.9.08	Additional civil engineering works for Guangze production project in Dongguan	If there is an addition or removal in the construction process, the settlement will be made based on the amount of materials used, and a supplemental agreement would be signed later.
Lease agreement	Dongguan Hirosawa and Dongguan City Houjie Town Xitou Joint Stock Economic Association	20-year lease term from factory delivery	Dongguan Hirosawa lease approximately 123,261.5 square meters of construction area including workshops, comprehensive buildings, dormitories, supporting electric rooms, and basements from Dongguan City Houjie Town Xitou Joint Stock Economic Association	The contract was signed on August 18, 2023 with a deposit of RMB 15 million has been paid. If there is a breach of contract, there will be liable for breach of contract.

VI. Financial Position and Financial Performance Review Analysis and Risk Management

5.1 Financial position

Comparative Analysis of Financial Position

Unit: NT$ thousands, %

Year Item	2023	2024	Difference
			Amount	% of change
Current Assets	6,018,115	5,573,889	(444,226)	(7.38)
Property, plant and equipment	3,885,937	3,656,377	(229,560)	(5.91)
Other assets	1,372,192	1,436,259	64,067	4.67
Total assets	11,276,244	10,666,525	(609,719)	(5.41)
Current liabilities	3,961,802	3,307,898	(653,904)	(16.51)
Total liabilities	4,845,355	4,317,283	(528,072)	(10.90)
Share capital	838,400	838,400	-	-
Capital surplus	2,787,090	2,787,090	-	-
Retained earnings	3,110,930	2,973,961	(136,969)	(4.40)
Other equity interest	(632,615)	(530,688)	101,927	(16.11)
Treasury stock	—	(49,515)	(49,515)	—
Non-controlling interest	327,084	329,994	2,910	0.89
Total Equity	6,430,889	6,349,242	(81,647)	(1.27)
Description of major changes: (the change in amount is more than 10%, and the amount reaches 1% of the total assets of the year) 1. Decrease in Current Liabilities : Mainly due to repayment of first conversion corporate bond in January 2024. 2. Increase in Other equity interest : Mainly due to the change in the exchange rate. The above differences are all normal business changes and have no material impact on the company's financial position.

5.2 Financial Performance

(I) Analysis of operating performance for the most recent two years

Unit: NT$ thousand; %

Year Item	2023	2024	Difference
			Amount	% of change
Net Sales	5,761,288	5,087,625	(673,663)	(11.69)
Cost of Sales	4,486,785	3,956,748	(530,037)	(11.81)
Gross Profit	1,274,503	1,130,877	(143,626)	(11.27)
Operating Expenses	1,230,091	1,221,056	(9,035)	(0.73)
Operating Income	44,412	(90,179)	(134,591)	(303.05)
Non-operating Gains and Losses	(163,783)	103,569	267,325	163.24
Income(loss) Before Tax	(119,371)	13,390	132,761	111.22
Tax Expense	50,953	59,219	8,266	16.22
Net Income(loss)	(170,324)	(45,829)	124,495	73.09
Description of major changes: (the change in amount is more than 10%, and the amount reaches 1% of the total assets of the year) Decrease in Net Sales, Cost of Sales, Gross Profit, Operating Income, Income Before Tax and Profit: Under the continuous guidance and support of China's national policies, coupled with the involution of prices, the penetration rate of new energy passenger vehicles has exceeded 50% for five consecutive months since July 2024, and the market share of domestic brands has taken advantage of the opportunity to reach 65.2% in 2024, resulting in the sales of traditional fuel vehicles being squeezed again. The market shares of the three major Japanese automakers, the company's main customers, has continued to decline. Therefore, the company's overall revenue in 2024 decreased by 11.69% compared with 2023. Due to reduced operating costs, gross profit and net profit were lower than in fiscal 2023. Increase in Non-operating Gains and Losses : The main reason is that exchange gains and losses and fair value change gains and losses were exchange gains and fair value valuation gains in 2024, while both items were losses in 2023, resulting in non-operating income in 2023 and non-operating expenses in 2023. The above differences are all normal business changes and have no material impact on the company's financial position.

(II) Estimated sales volume and the basis for estimation, potential impact on the Company's future finance, and response plans

The Company and our subsidiaries mainly refer to the market analysis by professional research institutions when estimating sales and regularly confirm the order situation with clients based on their estimated needs. Meanwhile, we also consider our production capacity plan and past operating performance to set an annual shipment target.

(III) Potential impact on the Company's future finance, and response plans

We will continue to develop parts and components with various car brands; considering China's enormous domestic demand and vehicle production capacity, we predict that our future performance will continue to grow, and our financial condition will be excellent and stable due to the continuous business growth and the increase in profits.

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5.3 Cash flows

(I) Analysis of changes in the most recent year’s cash flows

Unit: NT$ thousand

Beginning balance (1)	Net cash flows from operating activities(2)	Cash Surplus (Deficit) (3)	Cash surplus (deficit) (1)+(2)-(3)	Leverage of Cash Deficit
				Investment plans	Financial plans
2,986,053	612,016	(1,061,660)	2,536,409	-	-
Analysis of changes in cash flow for the year:
1. Net inflow from operating activities was NT$612,016 thousand: mainly due to recovery of accounts receivable.
2. Net outflow from investment activities NT$415,766 thousand: mainly due to the purchase of property, plant and equipment and the increase in investments using the equity method.
3. The net outflow of financing activities was NT$ 686,203 thousand: mainly due to the repayment of corporate bonds.

(II) Improvement plans for insufficient liquidity

We did not encounter insufficient liquidity during this year.

(III) Analysis of the following year’s cash flows

Unit: NT$ thousand

Beginning balance (1)	Net cash flows from operating activities(2)	Cash Surplus (Deficit) (3)	Cash surplus (deficit) (1)+(2)-(3)	Leverage of Cash Deficit
				Investment plans	Financial plans
2,536,409	650,117	(675,821)	2,510,705	—	fundraising
1. Analysis of financial ratio change:
(1) NT$650,117 thousand in cash inflow from business activities:
Mainly due to the recovery of accounts receivable.
(2) NT$472,141 thousand in cash outflow from investing activities:
Mainly due to the expected further investment and expansion of plant equipment.
(3) NT$203,680 thousand in cash outflow from financing activities:
Mainly due to the expected repayment of bank loans and distribution of cash dividends.
2. Remedial measures and liquidity analysis of estimated cash insufficiency:
To address future business requirements, the Company and subsidiaries will issue corporate bonds or obtain financing loans to make up for shortfalls in cash.

5.4 Major Capital Expenditure Items :

(I) The use of major capital expenditures and sources of funds: None.
(II) Impact on the finance: None.

5.5 The Company's investment policy for the most recent year, the main reasons for profit or loss, improvement plan, and investment plan for the following year

(I) The Company's investment policy:

The Company's current investment policy aims to expand operating sites or production lines and increase manufacturing processes. Our relevant execution departments are implementing this policy as per the investing cycle and the Procedures for Asset Acquisition and Disposal in the internal control system. The above procedures or system has been discussed and approved by the Board of Directors or the shareholders’ meeting.

(II) The main reasons for profit or loss and improvement plan:

Unit: NT$ thousand

Name of investor	Investments made during 2024	Main reason	Improvement plan
Lofty Success Group	(65,089)	The proportion of revenue from its subsidiaries' major customers declined	It will gradually improve after the mark normalizes.
Hiroca Taiwan	(73,217)	It was just established and still in the preparation period without any profit made.	It will gradually improve after it goes in production.
Shin Shih Technology	(198)	The newly established company is still in the preparation stage and has not yet generated any benefits.	It will gradually improve after it goes in production.
HS Automotive Trim Co.,Ltd.	(67)	The newly established company is still in the preparation stage and has not yet generated any benefits.	It will gradually improve after it goes in production.
Hiroca Investment	(7,459)	Its subsidiary Taica Hirosawa ended its business and liquidated its assets	Deregistered
Hirogen International	(8)	Profits and losses are the Company's annual costs and foreign exchange difference.	Not applicable.
Hiroyoshi Investment	31,502	Business has grown steadily.	Not applicable
Yoshisawa Investment	(33)	Profits and losses are the Company's annual costs and foreign exchange difference.	Not applicable
Hiroyuki Investment	(3,915)	Its investment company Dongguan Mono suffered a loss due to the decline in revenue.	The subsidiary's business has gradually improved.
Hirotai Investment	107,271	Business has grown steadily.	Not applicable
Smart Scene	(34,312)	Its investment company HIROSAWA USA suffered a loss due to the decline in revenue in the United States	It will gradually improve after the mark normalizes.
WIN	(3,891)	It recognizes that the profit and loss of the investment company is less than the amortization expenses of intangible assets and overseas salary expenses.	It will gradually improve after the mark normalizes.
Hirotai (Mexico)	170,363	Business has grown steadily.	Not applicable.
Hirosawa USA	(34,280)	Revenue decline and loss	It will gradually improve after the mark normalizes.
Dongguan Hirosawa	(189,617)	The Company's three major Japanese automaker customers have seen their revenue share decline due to the challenges faced by new energy vehicles.	Actively explore the domestic new energy vehicle market to make up for the loss of share of joint ventures
Dongguan Taica Hirosawa	(7,381)	Ended its business and liquidated its assets	Deregistered
Wuhan Hiroyoshi	33,596	Business has grown steadily.	Not applicable.
Dongguan Mono	1,435	Business has grown steadily.	Not applicable.
Kaifeng Guangjia	(19,129)	After the epidemic blockade policy was relaxed, it did not bring about the expected economic surge and revenue decline.	It will gradually improve after the market normalizes.
Hunan Hiroyoshi	20,137	Business has grown steadily.	Not applicable.
Guang Neng Automotive	(6,261)	Due to the preparation for closing down business and liquidating assets	Deregistered in January 2025
Xianyang Hiroyoshi	9,501	Business has grown steadily.	Not applicable.
Dongguan Hiroca Technology	7,199	Business has grown steadily.	Not applicable.
Losang-Hirosawa	(5,581)	Affected by the pandemic, the market for the car models supplied did not perform well.	It will gradually improve after the market returns to normal.
Karyu Automotive	(862)	Due to poor market performance of the supplied laser engraving process	It will gradually improve after the market returns to normal.
Suzhou Hiroyuki	(7,807)	Production capacity still needs to be improved to generate income	Gradually improve after normal production.

(III) The Company's investment plan for the coming year:

The Company's investment plan for the coming year:

In the coming year, we will continue to focus on our core business to complete our business layout in each region and will form strategic alliances to diversify our products, while making investments based on the evaluation reports submitted by the relevant execution departments as per the investing cycle and the Procedures for Asset Acquisition and Disposal in the internal control system. The details of the Company's 2025 investment plan are as follows:

Unit:NTD$1,000

Investment project	Investment (%)	Estimated investment amount
The final payment for the construction of Dongguan Hirosawa factory and the new	100%	282,614
Dongguan Thorsawa factory		282,614
Dongguan Taica Thorsawa	100%	282,614
Dongguan Mono	100%	282,614
Dongguan Taica Taica Thorsawa	100%	282,614

equipment of Xitou factory
Taiwan Hiroca Film Production Line Added	100%	57,519
South Korean joint venture factory construction plan	51%	91,000
Total	—	431,133

5.6 The following matters that should be analyzed and assessed for risks

(I) Risks

If a single overseas business location or a subsidiary meets the criteria for an important subsidiary during the most recent year and up to the publication date of this annual report, the risks associated with the overseas business location or the subsidiary should be specified:

The company is registered in the British Cayman Islands. Most of its overseas holding companies are established in the Samoa Islands, and its main operating base is located in mainland China. The responsible departments of our company and its invested companies always pay attention to important policies and legal changes in the countries or regions where they are located, as well as changes in policies and regulations of the local competent authorities, and deal with them in a timely manner, such as the release and implementation of the new economic substance law in the country where our company is registered; Document No. 62 of the State Council of mainland China, Document No. 7, Document No. 42, Document No. 64 of the State Administration of Taxation, and the deepening of the business tax reform and tax rate adjustment. Regarding the risks of the overall economy, political and economic environment changes, foreign exchange controls, taxes and related laws in the Cayman Islands, Samoa and mainland China, as well as whether the civil judgments of our courts are recognized, please refer to the explanation in Item 2 below. Please refer to Item 11 for details of the Company’s matters regarding the concentrated risk of purchases and sales and the corresponding measures.

The risks associated with the macro economy, changes in the political and economic environment, applicable laws and regulations, foreign exchange control, and taxation in the country where the foreign issuer is registered and the country where the main operations are conducted, if such countries recognize the effectiveness of civil judgments by the courts of the R.O.C, and countermeasures adopted shall be specified:

Hiroca Holdings Ltd. is a holding company registered in the British Cayman Islands. The Company does not engage in real economic activities in the Cayman Islands except for entrusting professional service agencies in the Cayman Islands to assist in managing the compliance matters. The management and the operating activities are conducted by the investees, Dongguan Hirosawa and Wuhan Hiroyoshi, in mainland China. They mainly engage in the molding of automotive plastic trims, cubic printing, surface spray coating, and other surface treatment processes. Also, due to China’s foreign exchange control, Dongguan Hirosawa and Wuhan Hiroyoshi's sales and purchases outside of China are carried out through Lofty Group located in

Samoa. The risks associated with the Cayman Islands, the country where the Company is registered, and Samoa, the country where our main business is carried out, the macro economy, changes in the political and economic environment, applicable laws and regulations, foreign exchange control, taxation, and if such countries recognize the effectiveness of civil judgments by the courts of the R.O.C, are specified as follows:

(1) British Cayman Islands

① Macro economy and political and economic environment

The British Cayman Islands (hereinafter referred to as the "Cayman Islands") is a British overseas territory located in the Caribbean Sea, with English as the main official language. It is politically stable with a high degree of autonomy despite the British legal system adopted.

The main economic income of the Cayman Islands comes from the financial service and the tourism industries, making it one of the world's major financial centers. The rise of its financial service industry is mainly attributable to its stable political situation without foreign exchange control and direct taxation. With a rigorous legal system in the Cayman Islands, the government has actively enhanced its laws to cooperate with the international anti-money laundering and anti-tax avoidance trends in recent years, to ensure its dominant position in finance, insurance, and commerce, and is committed to enabling its enterprises' normal and legal operations not to be affected. There are many banks, trust institutions, and insurance companies in this region, and there are also many legal, accounting, and other professional service institutions established to provide convenient services to overseas holding companies.

The Cayman Islands' macro economy and political and economic environment are stable, and so far no incident with a significant impact on the Company's overall operations has taken place.

② Foreign exchange control, applicable laws and regulations, and tax risks

The currency used in the Cayman Islands is the Cayman Islands Dollar with a fixed exchange rate system. There are no exchange control measures or other currency restrictions adopted in this region.

The Cayman Islands currently does not tax personal or corporate profits, income, gains, or appreciations, nor other tax liabilities that may cause a material impact on the Company. Stamp duty is not required when a company's shares in the Cayman Islands are transferred unless the company has interest involved in a piece of land in the Cayman Islands. Despite the international anti-tax avoidance trend in recent years, the changes in the applicable laws and regulations of the Cayman Islands have not caused a major adverse impact on the Company's overall operations so far.

Regarding laws and regulations, although the Cayman Islands has a company law enacted, the matters not expressly specified in the company law are still regulated by the English common law of the Cayman Islands (as per the Cayman Islands' few court judgment precedents and English common law). To

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protect Taiwanese investors' and shareholders' rights, we have amended the Company's Articles of Incorporation within the scope of the laws and regulations of the Cayman Islands in accordance with Taiwan's Company Act and Securities and Exchange Act. However, the differences between the laws and regulations of the Cayman Islands and Taiwan's laws on business operations and securities trading systems may result in conflicts in the application of laws or interpretation. Investors cannot fully adopt the perspective of legal right protection adopted for investments in Taiwan's companies for the companies in the Cayman Islands in which they invest.

We pay close attention to the changes in the important policies and laws in the Cayman Islands and consult attorneys, CPAs, and other professionals timely, to respond to such changes and take appropriate measures in a timely manner.

③ Whether the country recognizes Taiwan courts' civil judgments

If a foreign court judgment is for a monetary award and meets the following conditions, the court will recognize and enforce the foreign court judgment without going through the common law reexamination procedure: A. The foreign court judgment is final and final; B. the foreign court has jurisdiction over the defendant in the foreign judgment under the Cayman Islands private international law rules; C. The court rules that the debtor is obliged to pay a fixed amount; D. The foreign court judgment is a monetary claim not for the payment of a fine, tax, penalty, or similar financial or tax obligation; E. and the manner in which the foreign court judgment was obtained and enforced was not contrary to natural justice or the public order policy of the Cayman Islands.

In summary, according to the laws of the Cayman Islands, civil final judgments made by our courts that meet the above requirements may be recognized and enforced in the Cayman Islands.

(2) The country where the main operations are conducted: Samoa

① Macro economy and political and economic environment

Samoa, also known as Western Samoa or the Independent State of Samoa, is located in the center of the Islands of Polynesia. It used to be a territory of New Zealand and became independent in 1962 as the first independent country in the South Pacific. Samoa's economic activities are dominated by agriculture. It mainly produces coconuts and cocoa. There is also the light industry on a small scale and the agricultural product processing industry. Tourism is also one of the main economic activities in Samoa. With a stable political, economic, and trade environment, the Government of Samoa encourages foreign investment, is committed to creating a good investment environment, and encourages and expands investments by foreign companies by passing legislation. For example, it passed the international corporate law in 1987 to regulate the establishment of overseas companies as well as the international trust law, the offshore banking laws, and the international insurance law that was passed in 1988. Today, Samoa has formal diplomatic relations with mainland China, so investing in China

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through offshore companies established in Samoa is convenient in terms of the administrative procedures.

② Foreign exchange control, applicable laws and regulations, and tax risks

Samoa does not have any foreign exchange control measures in place. In terms of applicable laws and taxation, Samoa has not yet signed a bilateral tax agreement with any country. As per Samoa's tax laws, companies located in Samoa in a long term should have their global income taxed. If they are not resident in the country in a long term, they only need to have their income earned from Samoa taxed. After the international corporate law was enacted, offshore companies (international business companies) established in accordance with the law can have their all income exempt from the country's taxation. As the Government of Samoa is still encouraging and supporting foreign investments, the changes in applicable laws and regulations should pose limited operational risks to the Group.

We pay close attention to the changes in the important policies and laws in Samoa and consults attorneys, CPAs, and other professionals timely, to respond to such changes and take appropriate measures in a timely manner.

③ Whether the country recognizes Taiwan courts' civil judgments

As per Samoa's legal opinion, as Taiwan is not a country recognized by the Samoan Reciprocal Enforcement of Judgments Act, the Samoan courts do not recognize the judgments made by the courts of the R.O.C.

(3) The country where the main operations are conducted: Mainland China

① Macro economy and political and economic environment

Since the reform and opening up in 1979, China has carried out the annual, five-year, and ten-year economic development plans and has just completed its 13th five-year plan (from 2016 through 2020). In 2018, China's economic development slowed down greatly, and its expansion rate reached one of the lowest points in ten years; however, China's economy still achieved an annual growth rate of 6.5%. China's 2019 fiscal deficit increased from 2.6% to 2.8%, but local governments' bond projects increased to 2.15 trillion RMB from 800 billion RMB compared with last year, which is conducive to future investment in the construction of infrastructure. Since the end of 2010, inflation has gone up steadily. By the middle of 2011, the annual growth rate of the Consumer Price Index has exceeded 6%, which was twice or more the long-term average value. To curb the inflationary pressure, China's government has implemented many policies, including a tight monetary policy, interest rate control measures, and required reserve ratio hikes, which brought the growth of bank loans to slow down. In 2011, although the growth of monetary quantity remained at 16%, it was significantly lower than 20% in 2010. In recent years, China's government has begun to implement a quantitative easing policy and lowered the required reserve ratio to alleviate the pressure on the money market. Since the beginning of 2018, to enable China's economy to buck the trend under the China-US trade

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conflict, in order to support the development of the real economy and promote the stability with reduction of financing costs, the Bank has cut the deposit reserve ratio several times. As of September 27, 2024, the bank deposit reserve ratio has been reduced to 9.5%, but the short-term LPR benchmark interest rate has also been reduced to 3.1%. Although there are sufficient funds in the market, there is still a gap in the actual mobilization.

In 2017, China focused on supply-side structural reforms (cutting overcapacity, reducing inventory, de-leveraging, lowering costs, and strengthening weak links) and implemented measures for the optimization of various industrial structures, power conversion, and quality improvement; thus, economic growth was better than expected. However, in the second half of 2018, the China-US trade dispute occurred, so the GDP growth rate in the fourth quarter of 2018 dropped to 6.4%. Facing the low domestic demand, the escalating China-US trade conflict, and the declining global economic growth momentum, China's economic growth rate in 2019 plunged to 6.1%, the lowest point in 30 years. In 2019, China's domestic demand declined, while exports were sluggish. Policy uncertainty, plus higher tariffs on exports to the U.S., cast a shadow over the manufacturing activities and investor sentiment. Despite a series of measures to boost economic growth, China's financial and debt risks surged. The outbreak of the COVID-19 pandemic in 2020 has impacted all China's industries. The slowdown of the pandemic and the policies as guidance helped tide China's economy over the impact of the pandemic. In 2020, its GDP only grew by 2.3%, the smallest growth in 30 years. The GDP growth in 2024 will be approximately 5%. Although it reached the government's expected target of 5%, under the circumstance that the deflation pressure continues and the real estate industry is seriously declining, the government policy makers are under increasing pressure to introduce more stimulus measures.

② Foreign exchange control, applicable laws and regulations, and tax risks

A. Risk of foreign exchange control

After the foreign exchange reform was carried out in China in 1994, a banking exchange system was implemented. The foreign exchange income under domestic organizations' current account should be transferred back to the domestic country. Except for foreign exchange income that is allowed to be reserved in foreign exchange accounts with designated banks, foreign exchange income should be sold to designated foreign exchange banks at the exchange rates announced by the banks. Meanwhile, RMB current account items can be exchanged conditionally. Enterprises can purchase foreign currency from designated foreign exchange banks with valid documents and business documents within the specified scope. In 1996, China approved the terms under Article 8 of the Agreement of the International Monetary Fund to allow the exchange of all foreign exchange current account items, but the capital account is still under strict control. Although the RMB currency can

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be exchanged in the general import and export, the authenticity of import and export transactions is still supervised by the State Administration of Foreign Exchange to avoid excessive flow of speculative funds. There is a verification and write-off system in place to review import payments and receipts for exports.

The RMB exchange rate fluctuated greatly in 2024, and faced a process of depreciation and rapid depreciation. The closing price of the spot exchange rate against the U.S. dollar at the end of the year was 7.2988, with a cumulative decline of 2.9% for the whole year. From late July to late September, affected by factors such as the weakening of the U.S. dollar and the appreciation of the Japanese yen, the offshore RMB exchange rate once broke through the 7 mark, and then the U.S. dollar index returned to strength, and the RMB exchange rate once again tested the 7.3 mark.

After the new US President Trump took office, the trade friction between China and the United States has further escalated, and the economy has not stabilized as expected, so the uncertainty remains high. If the issue of mutual tariffs between China and the United States continues to be delayed, coupled with the Federal Reserve's slowdown in the interest rate cut cycle, it will eventually affect the direction of the exchange rate. As the RMB continues to internationalize, if China's domestic consumer economy can maintain a steady upward trend, the exchange rate should automatically have a stable trend. If the Sino-US tariff war continues to rage, the probability of the RMB depreciating to counter the tariffs will increase.

The Group's main trading currency is RMB. Although some exports and purchases are denominated in USD or JPY, the proportion is relatively low, and the Group's operating entities in China follow China's regulations on foreign exchange verification and write-off, so the exports and purchases are mainly conducted through offshore companies, to reduce the time for collection and payment in foreign currencies, thereby reducing the risk of foreign exchange control. However, the Mexican subsidiary has suffered significant exchange losses due to the inconsistency of the Mexican peso against the US dollar recently with the world's leading trend. This will cause the company to suffer foreign exchange losses in 2023, but will result in foreign exchange profits in 2024. On March 4, 2025, the United States will impose a 25% tariff on Mexico, and the Mexican peso is expected to face a new fluctuation. In terms of the capital account, China promulgated the Notice on Issues Concerning Management of Domestic Enterprises' Foreign Currencies and Overseas Loans in June 2009 to relax the restriction on the sources and amounts of loans by domestic enterprises to overseas enterprises directly. The Overseas Direct Investment and Foreign Exchange Management Regulations were published in July to relax the restrictions on and the procedures for the outward remittance of foreign investments by

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domestic institutions, including the measures that domestic institutions can adopt multiple sources of foreign exchange funds for direct overseas investments; the review of the sources of foreign exchange funds has been changed from examination beforehand to registration afterward; and the management of capital remittance has been adjusted from an approval mechanism to a registration one, enabling the Company's capital movement and business expansion to be more flexible and timely. Although some foreign exchange control measures still exist in China, they continued to be relaxed due to the influence of global economic development trends, so foreign exchange control causes no significant impact on the Company's operations.

B. Risk of changes in law

To develop complete regulations on labor contracts and protect workers' rights, China launched the Labor Law of the People's Republic of China in January 1995 (amended in August 2009 and December 2018) and implemented a labor contract system and a social insurance system. The implementation of the Labor Law did not do well, so China adopted the Labor Contract Law of the People's Republic of China on June 29, 2007 and officially implemented it on January 1, 2008, to clearly regulate the rights and obligations of employers and employees, including the signing of labor contracts between employers and employees, the payment for salary during the probationary period, social insurance contributions, overtime pay, and severance pay. Affected by the Labor Contract Law, employers' cost of manpower has increased. However, due to the regulation of the Labor Contract Law, employees are obliged to abide by the contract after signing it, so employers can effectively reduce the risk of investments in employee training.

The State and Local Taxation Management System Reform Program was launched on July 20, 2018, which stipulated that the basic pension, basic medical treatment, unemployment, occupational injury, and maternity insurance premiums should all be collected by tax authorities starting from January 1, 2019. The General Office of the State Taxation Administration of China published the Notice on the Collection and Management of Social Insurance Premiums on September 13, 2018, to require tax authorities at all levels to ensure that the reform is carried out smoothly as planned, the provincial taxation bureaus should break down the tasks and clearly define the division of labor and the deadline under the guidance of the State Taxation Administration and local governments, to ensure that all social insurance premiums are collected by the tax authorities starting from January 1, 2019. Before this reform was duly implemented, all local governments should maintain the existing collection policy and are not allowed to inspect prior years' overdue payments. This reform will not cause a substantively

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adverse impact on enterprises' production and operations in China at this stage.

In response to the novel coronavirus pneumonia epidemic, on February 18, 2020, Li Keqiang, former Premier of the State Council of the People's Republic of China, presided over an executive meeting of the State Council and decided to phase out the reduction and exemption of corporate social security premiums and implement a policy of postponing corporate payment of housing provident funds, taking multiple measures to stabilize enterprises and employment. In all provinces except Hubei, the above three fees can be exempted for small and micro enterprises from February to June, and the fees can be halved for large enterprises from February to April; Hubei Province can exempt all types of insured enterprises from February to June. At the same time, before the end of June, enterprises can apply for deferred payment of housing provident funds. During this period, provident fund loans for employees who are unable to repay normally due to the impact of the epidemic will not be treated as overdue.

On July 16, 2021, the Ministry of Human Resources and Social Security, the National Development and Reform Commission, the Ministry of Transport, the Ministry of Emergency Management, the State Administration for Market Regulation, the National Healthcare Security Administration, the Supreme People's Court, and the All-China Federation of Trade Unions jointly issued the "Guiding Opinions on Protecting the Labor Security Rights and Interests of Workers in New Employment Forms", which stipulates the improvement of systems, filling in gaps in the protection of workers' rights and interests, improving the minimum wage and payment guarantee system, promoting the inclusion of workers in new employment forms who do not fully meet the conditions for establishing labor relations into the scope of institutional protection, improving the rest system, and promoting the industry to clarify labor quota standards and scientifically determine the workload and labor intensity of workers. Urge enterprises to reasonably determine rest methods in accordance with regulations and pay reasonable remuneration during statutory holidays that is higher than the labor remuneration for normal working hours.

On April 20, 2022, the 34th meeting of the Standing Committee of the 13th National People's Congress of mainland China revised the Vocational Education Law of the People's Republic of China, which will come into effect on May 1, 2022. It clearly stipulates that it is not allowed to organize, arrange, or manage student internships and training through human resources service agencies, labor dispatch units, or units or individuals illegally engaged in human resources services or labor dispatch business in violation of relevant regulations, and the corresponding legal responsibilities are stipulated.

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On December 12, 2023, the Supreme People's Court of mainland China issued the "Interpretation of the Supreme People's Court on the Application of Laws in the Trial of Labor Dispute Cases (II) (Draft for Comments)", which intends to confirm that over-age and non-retired workers can claim labor remuneration and work-related injury compensation in accordance with the Labor Law, and unify the national judicial judgment standards.

To cut personnel costs, we have gradually increased the percentage of automated production and continued to improve our machinery and equipment to enhance production efficiency. Thus, the risk of changes in laws on the Company should be limited. However, changes in laws in China will still cause an impact on the Company to some extent in the future. We will continue to pay attention to such changes and formulate countermeasures as soon as possible.

C. Tax risk

Since China's reform and opening up in the 20th century, to attract foreign investment and develop the economy, China has launched a preferential tax policy for enterprises funded by foreign investors (not applicable to those by domestic investors). The income tax rate applied to enterprises funded by domestic investors was 33%, while it was 24% or 15% for those funded by foreign investors. In addition, foreign producers also enjoyed the tax incentives of two-year tax exemption and three-year tax reduction by half (tax exemption for the first two years after a profit is made, and tax reduced by 50% for the next three years). However, to maintain national tax revenue and fair play, China's government adopted the Enterprise Income Tax Law of the People's Republic of China on March 16, 2007 to implement a preferential tax policy for industry-specific enterprises and then for region--specific ones rather than for enterprises funded by foreign investors. As per the new law, enterprises funded by both domestic and foreign investors would be subject to a business income tax rate of 25% from 2008. The tax incentives of "two-year exemption and three-year tax reduction by half" and tax reduction by half for export-oriented Taiwanese businesses would be gradually phased out and canceled during a five-year buffer period. However, high-tech enterprises or environmental and energy-saving businesses supported by China could still enjoy a preferential tax rate of 15%. Also, the value-added tax rate for the manufacturing industry has been reduced from 16% to 13% since April 1, 2019.

Regarding the distribution of dividends and bonuses, as the Company is a holding company, the ability to pay dividends depends on the earnings distributed by its main operating sites as well as the distribution method and amounts approved by the Board of Directors. As per China's Enterprise Income Tax Law, a non-resident enterprise that does not have an

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establishment in China or that has an establishment with the income earned without connection with the establishment, shall still pay enterprise income tax on its income earned in China at an applicable tax rate of 20%. However, as per the Regulations on the Implementation of Enterprise Income Tax Law of the People's Republic of China, the above income should be levied at a lower tax rate of 10%. The parent company of our investees in China is located in Samoa, which did not sign any preferential tax agreement with China, so the operating entities would need to pay the income tax at the above rate of 10% when distributing the earnings to the parent company in the future. Also, as per China's law, companies in China can only distribute and pay out dividends from their income after tax, and the amount of the income after tax is determined on the basis of retained earnings calculated in accordance with China's generally accepted accounting principles and China's financial laws, which is not aligned with Taiwan's generally accepted accounting principles. Moreover, companies in China should contribute 10% of their annual net income after tax to the statutory reserve fund that cannot be used for the distribution of dividends (however, when the cumulative reserve fund reaches 50% of the Company's registered capital, the contribution may be stopped). The above restrictions on the distribution of dividends or outward remittance of earnings by China's domestic companies and changes in tax rates will affect the Group's ability and flexibility to distribute dividends to shareholders.

③ Whether the country recognizes Taiwan courts' civil judgments

In the case of any civil judgment made by a court of the R.O.C. on commerce, intellectual property rights, maritime disputes, or other civil disputes (including civil rulings, mediation agreements, pay warrants, and rulings by Taiwan's arbitration institutions), where the residence, domicile, or location of the property to be executed is located in a province, autonomous area, or municipality directly under the Government of China, the party concerned may, within two years after the judgment took effect, apply to a court in China for recognition and enforcement based on the specified format and contents in accordance with the Supreme People's Court on the People's Courts' Recognition of Civil Judgments of the Relevant Courts of the Taiwan Region and the Supplementary Provisions of the Supreme People's Court on the People's Courts' Recognition of Civil Judgments of the Relevant Courts of the Taiwan Region. (Implemented on July 1, 2015, and revised on December 17, 2024) A civil judgment made by a court in Taiwan recognized by a court in China has a legal effect in China and the same effect as that of a judgment made by a court in China; however, a civil judgment made by a court in Taiwan to be recognized shall not fall under any of the circumstances below:

A. The validity of the civil judgment has not yet been finalized;

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B. The civil judgment is made in the absence of the defendant without a legal summons or when the defendant did not have legal capacity without proper representation;

C. The case falls within the jurisdiction of courts in China;

D. Both parties in the case have entered into an arbitration agreement;

E. The case has been ruled by a court in China, or a court in a country or region other than China, or by an arbitration institution in a country or region other than China, and has been recognized by a court in China;

F. The civil judgment is against the One-China principle; or

G. The civil judgment is in violation of the basic principles of national law or undermines the public interest.

(Ⅱ) Risk factors should be analyzed and assessed based on the following matters for the most recent fiscal year and up to the date of the annual report’s publication.

The impact of the movements in interest rates and exchange rate and inflation on the Company's profit or loss and future countermeasures

(1) The impact of the movements in interest rates and exchange rate on the Company's profit or loss and future countermeasures

The Company's borrowings are mainly USD borrowings. The proportion of interest expenses to revenue after the US Federal Reserve's significant interest rate hike has increased. Interest expenses in 2024 were NTD 147,975 thousand, accounting for 3.02% of net operating revenues. While the interest revenue was NTD 58,462 thousand. The Company’s business remains steady. With the completion of major investments, the Company is still using long-term financing and short-term working capital for financial adjustment. The change of interest rate will have a greater impact on the Company in the short term. The interest expense is expected to decrease after the end of the US Fed's interest rate hike cycle. The Company have kept in close contact with banks and other financial institutions to strive for better loan conditions, while adopting a sound financial plan and financial instruments in the hope to reduce the risk of the movements in interest rates.

(2) The impact of the movements in exchange rates on the Company's profit or loss and future countermeasures

The People's Bank of China announced, on August 11, 2015, the measures to improve the RMB central parity formation mechanism by referring to the closing prices of the interbank foreign exchange market on the prior day (rather than adopting the RMB central parity instructed by the government) and correcting the spread between the central parity and the market exchange rate within the next three trading days, resulting the largest drops of RMB exchange rates in two days since 1994. The exchange rate reform is conducive to enable the RMB to be internationalized. In October 2016, the International Monetary Fund (IMF) included the RMB in the special drawing rights (SDR), which was a critical milestone for China’s economy to integrate into the global financial system and represented the

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international recognition of the efforts made by China’s government in the currency and financial system reform. In 2022 China will continue to adopt the managed floating exchange rate system and, building on that foundation, enhance the reference to a basket of currencies, to maintain the basic stability of the RMB exchange rate against the basket of currencies.

The region where the Company's products are sold and where raw materials are purchased are mainly in China, and the transactions are mainly denominated in RMB. Although some export and outsourcing transactions are denominated in USD or EUR, they only account for 10% of the total sales and total purchases. Thus, although the appreciation or depreciation of the RMB will result in exchange gains or losses on our foreign currency positions, the impact is small. To alleviate the impact of exchange rate fluctuations on our profit or loss, we keep in close contact with banks to keep abreast of the movements in the foreign exchange market. The quotes offered by our Sales Department for export and outsourcing transactions will also be adjusted in a timely manner according to the movements in exchange rates, so the impact of exchange rate between USD and RMB fluctuations should be minimized. However, the Mexican subsidiary recently suffered huge exchange losses in 2023 due to the large fluctuations in the Mexican peso against the US dollar, but it will have foreign exchange profits in 2024.

(3) The impact of the movements in inflation on the Company's profit or loss and future countermeasures

We pay close attention to the fluctuations in market prices and maintain positive relations with clients and suppliers. In recent years, inflation has not caused a significant impact on our profit or loss. If the purchase cost increases due to inflation, we will also adjust the selling prices where appropriate to alleviate the impact on our profit and loss.

The policy on engagement in high-risk and highly leveraged investment, loans to others, endorsements/guarantees provided, and derivatives trading, the main reason for profit or loss, and countermeasures

We focus on the operation of our core business and has not engaged in other high-risk industries, and we adopt a prudent and conservative approach to our financial management without making highly leveraged investments, so the risk is limited. Also, we have formulated operating procedures for loans to others, endorsements/guarantees provided to others, and derivatives trading in accordance with applicable regulations and implement them accordingly.

Future R&D plan and estimated R&D expenses:

The Company's products are automotive interiors, and its specifications are mainly specified by major car manufacturers. Thus, we are actively cultivating R&D talents, developing molds in alignment with clients' needs, and improving the yield rate of finished goods and reducing the manufacturing cost by upgrading our equipment and machinery. We will continue to invest in R&D to enhance our competitiveness in the industry.

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The R&D expenses in 2023 and 2024 were NT$259 million and NT$265 million, accounting for 4% and 5% of the year's revenue, respectively. In 2025, the estimated R&D investment is NT$270 million.

The impact of the changes in important policies and law at home or abroad on the Company's finance and countermeasures:

The country where the Company is registered and the country where the main operations are conducted are the Cayman Islands and Samoa; and mainland China, respectively. We conduct business operations in accordance with the important policies and laws and regulations in the country where the Company is registered and the country where the main operations are conducted, while paying attention to the policy development trends and changes in law at any time, to respond to changes in the market environment and take appropriate countermeasures timely. After a legislation was passed in the Cayman Islands in 2019, it requires companies registered in the country should meet the requirement of engaging in substantive economic activities in the country from 2019, but the relevant enforcement rules are still in the interpellation stage. There is some room for discussion on how a tax resident and substantive economic activities are determined, so the Company will continue to pay close attention. As of the publication date of this annual report, no change in important policies and law at home or abroad cause a significant impact on the Company's finance.

The impact of changes (including information security risks) in technology or the industry on the Company's finance and countermeasures:

In the most recent year and as of the publication date of this annual report, no change in technology or the industry has caused a significant impact on the Company's finance. With the continuous advancement of surface treatment technology for auto parts, we not only continuously improve our product quality and manufacturing processes but adopt new technologies in a timely manner and keep in close touch with car manufacturers to keep abreast with the latest trends. Also, we adopt a sound and stable financial management strategy to maintain our market competitiveness.

With the continuous advancement of information technology, information security issues have become increasingly critical. How to ensure the security of information systems has become a crucial foundation for business development and maintenance of core competitiveness.

To ensure the confidentiality and integrity of the information system, prevent unauthorized copying and the security of the given system, the we are committed to reinforcing the information security management mechanism and our defense capabilities by establishing a secure and reliable digital environment to ensure the security of the systems, data, equipment, and network, thereby protecting our critical information assets and ensuring the normal operation of information systems.

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The Company's strategy and plan for information security enhancement are as follows:

The Company's daily operation data is automatically and fully backed up on time and updated on a rolling basis to minimize data loss in the event of a risk and ensure that each department's daily operations are not affected.

The impact of a change in corporate image on corporate crisis management and countermeasures

Since the Group was established, we have focused the development of our core business, and our product quality has been recognized by major car manufacturers. Our operating performance and reputation are excellent. No incident in the market that affected the Company's corporate image occurred, and we did not encounter any issue with the change in our corporate image.

Estimated benefits and potential risks of M&A and countermeasures: None.
Estimated benefits and potential risks of plant expansion and countermeasures

The land purchased by Dongguan Hirosawa from the local industrial park started construction of the factory in November 2020. The main project was completed in 2023 and equipment is being installed in succession. The relocation of the group headquarters was completed on April 10, 2023. In addition, due to the expiration of the lease of Dongguan Hirosawa Factory 1, the production line will be transferred to the nearby Xitou Factory. The capacity transfer is scheduled to be completed in the third quarter of 2025. Suzhou Hiroyuki, a company engaged in in-mold transfer printing

process in East China, has started mass production in the fourth quarter of 2021. Hunan Hiroyoshi purchased land and built a factory and completed the relocation in the second quarter of 2021. Xiangyang Hiroyoshi completed construction in the third quarter of 2022. After the completion of the above-mentioned new factory and its installation, the company's production capacity will be effectively increased, revenue will be generated, and the scale of operations will be expanded.

Risks of supplier or client concentration:

(1) Risk of supplier concentration

The Company's main products are automotive interiors. As the supply chain of the automotive industry is relatively closed, all suppliers need to pass car manufacturers' certification. To ensure the stability of raw material quality, our raw materials are mainly sourced from the suppliers designated by clients or from the most suitable suppliers based on the costs at the time of procurement. Of the Company's suppliers, the top five suppliers account for 18.66% of the total purchase amount, and the purchase amount from each of the remaining suppliers is quite even. There was no purchase from a single supplier in a large quantity, so there is no risk of supplier concentration existing.

(2) Risk of client concentration

The Company's main products are automotive interiors, and our clients are mainly auto components suppliers of the three major Japanese car manufacturers in China. As the supply chain of the automotive industry is relatively closed, car manufacturers can influence procurement and sales decisions. The clients of our products are usually designated by the car manufacturers. Some car manufacturers even require that the sales should be carried out through their investees, so that the Company's sales are concentrated on certain clients. The sales to clients designated by the top three Japanese car manufacturers account for about 45% of the annual sales, but as this is the characteristic of the automotive industry, there should be no risk of client concentration. We have continued to expand our business by working with European and U.S. car manufacturers and self-owned car brands and working to supply goods to global car models, to reduce the risk of client concentration.

The impact of massive transfer or replacement of shares by the directors, supervisors, or shareholders each holding more than 10% of the shares issued by the Company, the risk thereof, and countermeasures:

The Company's directors, supervisors, or major shareholders each holding more than 10% of the shares issued by the Company did not transfer or replace their shares in a large quantity, so no impact was caused on the Company's finance and business operations.

The impact of change in the Company's management right and the risk thereof

During the most recent year and up to the publication date of this annual report, there has been no change in our management rights affecting the Company's operations.

(III) Court cases or non-contentious cases:

163

i. Regarding cases with the final ruling made or still in major legal proceedings, non-contentious matters, or administrative disputes during the most recent year and as of the publication date of this report, where the result thereof may significantly affect shareholders' equity or stock price, the fact of the contentions, the amount involved, the commencement date of the proceedings, the major litigants in the proceedings, and the current profess shall be disclosed: None.

ii. Any directors, supervisors, the President, the de facto responsible person, shareholders each holding more than 10% of company shares, or affiliates involved in cases with the final ruling made or still in major legal proceedings, non-contentious matters, or administrative disputes, with the result thereof that may significantly affect shareholders' equity or stock price: None.

iii. Any of the Company's directors, supervisors, managers, or major shareholders each holding more than 10% of the Company's total issued shares fell under any circumstances under Article 157 of the Securities and Exchange Act during the most recent two years and up to the publication date of this annual report and the Company's response: None.

iv. Where any of the Company's directors, supervisors, managers, or major shareholders each holding more than 10% of the Company's total issued shares encountered difficulty with financial solvency or lost a good credit rating during the most recent two years and up to the publication date of this annual report, the impact on the Company's financial position shall be specified: None.

(IV) Other important risks and countermeasures: None.

5.7 Other important matters:
None.

164

VII. Special Matters

6.1 Special Disclosure

(I) Consolidated Business Report of Affiliates

Organizational chart of affiliates:

Basic information on each affiliate:
Unit: NT$ thousand; as of December 31, 2024

Name of company	Date of incorporation	Address	Paid-in capital	Principal business
Lofly Success Group Limited	2004.04.27	Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa	1,091,930	International trade and general investment business
Hiroca Automotive Trim Corporation	2020.02.10	No. 101, Neili Section, Guanpu Road, Xinpu Township, Hsinchu County	163,354	Manufacturing and sales of cars and their spare parts and sales of molds
Shin Shih Technology Co., Ltd.	2017.08.18	No. 101, Neili Section, Guanpu Road, Xinpu Township, Hsinchu County	172,000	Gas-electricity cogeneration industry, renewable energy self-use power generation equipment industry, thermal energy supply industry, industrial plant development, leasing and sales industry, real estate leasing industry, electrical and audio-visual electronic product manufacturing industry, electronic component manufacturing industry
HS Automotive Trim Co., Ltd.	2024-05-31	Seonggok-dong, Banwol Industrial Complex) #5BA806, 52 Byeolmang-ro 128beon-gil, Danwon-gu, Ansan-si, Gyeonggi-do, Republic of Korea	6,633	Manufacturing and sales of cars and their spare parts and sales of molds
Hirogen International Limited	2009.02.25	Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa	110,046	General investment business
Hiroyoshi Investment Limited	2010.05.14	Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa	932,017	General investment business
Yoshisawa Investment Limited	2010.09.29	Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa	25,497	General investment business
Hiroyuki Investment Limited	2011.01.12	Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa	91,469	General investment business
Hirotai Investment Limited	2015.01.06	Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa	1,269,896	General investment business
Smart Scene Holding Limited	2008.04.03	Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa	32	General investment business
WIN INC.	2011.04.07	Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa	183,270	General investment business
HIROTAI AUTOMOTIVE TRIM SA DE CV	2015.03.27	VILLAS DE LAS ROSAS #106-A, COL. VILLAS BUGAMBILIAS, LEON, GUANAJUATO, MEXICO	1,190,049	Production and sales of automotive trim parts, electronic plastic parts, and polypropylene corrugated boxes; sales and import and export of molds, jigs, fixtures, and inspection tools; provision of design and technical consultation and after-sales services for the above products. R&D and sales of molds and mold parts.
HIROSAWA AUTOMOTIVE TRIM USA CO.	2008.09.09	43500 GEN MAR, NOVI, MI 48375, USA	31	International trade
Dongguan Hirosawa Automotive Trim Co., Ltd.	2002.12.20	Dongye Road, Houjie Science and Technology Industrial Park, Houjie Town, Dongguan City, Guangdong Province	698,661	Production and sales of automotive trim parts, electronic plastic parts, and polypropylene corrugated boxes; road freight; wholesale and import and export of molds, jigs, fixtures, and inspection tools; provision of design and technical consultation and after-sales services for the above products. R&D, production, and sales of molds and mold parts.
Wuhan Hiroyoshi Automotive Trim Co., Ltd.	2010.08.30	No. 516, Weihu Road, Hannan District, Wuhan, Hube Province	854,744	Production and sales of various automotive trim parts, electronic plastic parts, and polypropylene corrugated boxes; provision of design and technical consultation and after-sales services for the above products.
Dongguan Mono Automotive Trim Co.	2012.09.24	Nanxin Road, Changkun Industrial Park, Shajizhang Town, Changshu City, Jiangsu Province	94,972	Production and R&D of auto trim parts, auto components, and parts; provision of technical consultation and technical services; sales of self-produced products.
Kaifeng Guangjia Automobile Accessories Co., Ltd.	2013.06.28	North Middle Section of Longhai Second Road, Kaifeng New District, Kaifeng City, Henan Province	313,460	Production an sales of a variety of automotive trim parts, electronic plastic parts, polypropylene corrugated boxes, and molds.

Name of company	Date of incorporation	Address	Paid-in capital	Principal business
Hunan Hiroyoshi Automotive Trim Co., Ltd.	2012.09.17	No. 1 Workshop of Liuyang Hongyi Technology Development Co., Ltd., Yong'an Industrial Manufacturing Base, Yong'an Town, Liuyang City, Hunan Province	335,850	Production an sales of a variety of automotive trim parts, electronic plastic parts, polypropylene corrugated boxes, and molds.
Dongguan Guang Neng Automotive Trim Co., Ltd.	2012.05.25	Keji Road, Houjie Science and Technology Industrial City, Houjie Town, Dongguan City, Guangdong Province	22,390	Sales of a variety of automotive trim parts, electronic plastic accessories, polypropylene corrugated boxes, and molds.
Xianyang Hiroyoshi Automotive Trim Co., Ltd.	2014.03.17	No. 1, Suzhou, Shenzhen Industrial Park, High Tech Zone, Xiangyang City, Hubei Province	223,900	Production an sales of a variety of automotive trim parts, electronic plastic parts, polypropylene corrugated boxes, and molds.
Dong Guan Hiroca Automotive Trim Technology Co., Ltd.	2019.07.25	Room 101, Building 2, No. 2, Dongye Road, Houjie Town, Dongguan City, Guangdong Province	44,780	R&D and sales of automotive trim parts; auto parts design, development, technical consultation, and technical services, as well as technology promotion and technology transfer.
Dongguan Losang-Hirosawa mold Co.Ltd	2014.06.13	Houjie Science and Technology Industrial Park, Houjie Town, Dongguan City, Guangdong Province, China	22,299	Production and sales of plastic and metal molds and provision of design and development and technical consultation services.
Dongguan Karyu Automotive Trim Co., Ltd	2014.07.10	Houjie Science and Technology Industrial Park, Houjie Town, Dongguan City, Guangdong Province, China	55,975	Production and sales of auto components and electronic components.
Suzhou Hiroyuki Automotive Trim Co., Ltd.	2020.01.14	No. 68, Dong'an Road, Xinhu, Shuangfeng Town, Taicang City	427,649	R&D, development, production, processing, and sales of auto trim parts, auto components, alternative energy auto components, alternative energy auto electronic controllers, auto electronic control systems, electronic components, automotive lights, plastic products, communication equipment, hardware products,
Conserve & Associates,Inc.	2000.08.01	5F-3, No. 185, Kewang Road, Longtan District, Taoyuan City	332,214	Production, sales and research of auto components and electronic components.
Jiangmen Tsukada Riken Automotive Trim Co., Ltd.	2011.11.28	1st and 2nd Floor, Side B, Block 211, Phase II, New Fortune Environmental Protection Electroplating Base, Yamen Town, Xinhui District, Jiangmen City, Guangdong Province	246,112	Plating of hardware and plastics; production and operation of hardware and plastic products, automotive trim parts, and bathroom trim parts.

Information on those presumed to be controlling and controlled companies as per Article 369-3 of the Company Act: None.
Industries to which the affiliates belong:

The Group and all affiliates engage in the production and sales of a variety of automotive trim parts, electronic plastic parts, plastic corrugated board, and molds.

For the inter-relationship of affiliated companies, the Sales Division is mainly responsible for taking orders, while Dong Guan Hirosawa Automotive Trim Technology Co., Ltd. is responsible for R&D. Part of the export is produced and delivered through Lofty Success Group, while the rest is sold through Dong Guan Hirosawa, Wuhan Hiroyushi, and Hunan Hiroyushi, Kaifeng Hiroyushi, and Xiangyang Hiroyushi, and all the business transactions between the affiliated enterprises are entered into contracts or purchase orders. The price is set according to the general market price. If there is no market price, the two parties set the price on an arm's length basis.

All business transactions between related companies are concluded with contracts or purchase orders. The prices are determined according to general market conditions.

Information on directors, supervisors, and presidents of affiliates:

Up to March 31, 2025

Company Name	Job title	Name	Hold shares
			shares	%
Lofty Group	Chairman	Yu,Che-Ming	-	-
	Director	Yu,Chia-Chin Huang,Chien-Chung	-	-
	President	Huang,Chien-Chung	-	-
Dongguan Hirosawa	Chairman	Yu,Che-Ming
	Director	Yu,Chia-Chin Huang,Chien-Chung	-	-
	President	Huang,Chien-Chung	-	-
	Supervisor	Wang, Hsiao-Chun	-	-
Hiroca Investment	Chairman	Yu,Che-Ming	-	-
Hirogen International	Chairman	Yu,Che-Ming	-	-
Hirotai Investment	Chairman	Yu,Che-Ming	-	-
	Director	Huang,Chien-Chung Mochizuki Kazuri	-	-
Dongguan Taica Hirosawa	Chairman	Uoya Masaki	-	-
	Vice Chairman	Yu,Che-Ming	-	-
	Director	Suzuki Daden Xie, Xin Mori Akira	-	-
	President	Xie, Xin	-	-
	Supervisor	Sudo Akira	-	-
Hiroyoshi Investment	Chairman	Yu,Che-Ming	-	-
	Director	Yu, Chia-Chin Huang,Chien-Chung	-	-
Wuhan Hiroyoshi	Chairman	Yu,Che-Ming	-	-
	Director	Yu, Chia-Chin Huang,Chien-Chung	-	-
	Supervisor	Huang,Sheng-Chang	-	-
	President	Huang,Chien-Chung	-	-
Yoshisawa Investment	Chairman	Yu,Che-Ming	-	-
Hiroyuki Investment	Chairman	Yu,Che-Ming	-	-
WIN INC	Director	Yu,Che-Ming Huang,Chien-Chung GAP INVESTMENT S.A	-	-

Company Name	Job title	Name	Hold shares
			shares	%
		MM HOLDING INC.
Jiangmen Tsukada Riken	Chairman / President	Shimojima Satoshi	-	-
	Vice Chairman	Huang,Chien-Chung	-	-
	Director	Shimojima Yasubo Takemura Yoshihiro Yoneyama Ryouji	-	-
	Supervisor	Shima Ryoichi	-	-
Dongguan Guang Neng	Chairman / President	Huang,Chien-Chung	-	-
	Supervisor	Huang,Sheng-Chang	-	-
Hunan Hiroyoshi	Chairman / President	Huang,Chien-Chung	-	-
	Director	Yu,Che-Ming Chuang, Wu-Chuan	-	-
	Supervisor	Huang,Sheng-Chang	-	-
Kaifeng Guangjia	Executive Director	Yu, Chia-Chin	-	-
	Manerger	Wu, Xian-qun	-	-
	Supervisor	Huang,Sheng-Chang	-	-
Dongguan Mono	Chairman	Yu,Che-Ming	-	-
	Director	F.BANDURA A.ADORANTE P.BRISSA Huang,Chien-Chung	-	-
	President	Huang,Chien-Chung	-	-
	Supervisor	Huang,Sheng-Chang	-	-
Xianyang Hiroyoshi	Executive Director	Huang,Chien-Chung	-	-
	President	Kung, Shiang-Hsu	-	-
	Supervisor	Huang,Sheng-Chang	-	-
Dongguan Karyu	Chairman	Yu,Che-Ming	-	-
	Director	Huang,Chien-Chung Takaaki Kirihara	-	-
	President	Takaaki Kirihara	-	-
	Supervisor	Ichikawa Hideyuki	-	-
Losang-Hirosawa	Chairman	Li, Dai-Wei	-	-
	Vice Chairman	Huang,Chien-Chung	-	-
	Director	Chuang, Wu-Chuan Liu, Dex-long Tang, Bai-Qiao	-	-
	President	Tang, Bai-Qiao	-	-
Hirotai Mexico	Chairman	Yu,Che-Ming	-	-
	Director	Huang,Chien-Chung Uoya Masaki	-	-
	President	Huang,Chien-Chung	-	-
Smart Scene	Chairman	Yu,Che-Ming	-	-
	Director	Huang,Chien-Chung Huang,Sheng-Chang	-	-
Hirosawa USA	Director	Yu,Che-Ming Huang,Chien-Chung Huang,Sheng-Chang	-	-
	President	Huang,Chien-Chung	-	-

Company Name	Job title	Name	Hold shares
			shares	%
Cubic (Tianjin)	Chairman	Yasuhiro Iizuka
	Director	Yasuhiro Oda Li, Chon-Gzhuo Suzuki Daden Uoya Masaki Yu,Che-Ming Zheng, Wenyong	-	-
	President	Yasuhiro Oda	-	-
Hiroca Technology	Executive Director President	Chuang, Wu-Chuan	-	-
	Supervisor	Yu,Che-Ming	-	-
Suzhou Hiroyuki	Chairman	Meng, Sui-Chuan	-	-
	Director	Yu,Che-Ming Huang,Chien-Chung Qi, Li	-	-
	President	Huang,Chien-Chung	-	-
	Supervisor	Wang, Jie	-	-
Hiroca Automotive Trim Corporation (Hiroca Taiwan)	Chairman	Yu,Che-Ming	-	-
	Supervisor	Huang,Chien-Chung	-	-
Hsin Shi Technology	Chairman	Chang, Ming-Hung	-	-
	Director	Chiang, Kai-Liang Lin,Hong-Zhou	-	-
	Supervisor	Wu, Wen-Hsuan	-	-
	Chairman	SHIN JUNG-KI
	Director	SHIN JONG-HAN、Yu,Che-Ming、Choi, Yun-Ill
	Supervisor	Chiu Shou-Ray

6. Overview of the operations of affiliates:

Unit: NT$ thousand except for earnings per unit.

Name of company	Capital	Total assets	Total liabilities	Net worth	Operating revenue	Operating income
Lofty Group	1,091,930	8,108,279	1,744,660	6,363,619	832,986	125,138
HS Automotive Trim Co., Ltd.	163,354	328,630	253,919	74,711	5,311	(64,016)
Hsin Shi Technology	172,000	531,875	364,592	167,283	11,802	(59)
HS Automotive Trim Co., Ltd.	6,633	6,579	72	6,507	0	(136)
Hirogen International	110,046	1,426	0	1,426	0	(30)
Hiroyoshi Investment	932,017	760,769	964	759,805	0	(2,521)
Yoshisawa Investment	25,497	7,835	192	7,643	0	(30)
Hiroyuki Investment	91,469	34,480	4	34,476	0	(30)
Hirotai Investment	1,269,896	1,110,112	61,913	1,048,199	3,169	(13,109)
Smart Scene Holding	32	74,857	429	74,428	0	(25)
WIN INC.	183,270	147,572	79,850	67,722	0	(10,578)
Hirotai Mexico	1,190,049	1,248,447	139,390	1,109,057	798,282	80,522
Hirosawa USA	31	220,649	145,847	74,802	649,362	(26,301)
Dongguan Hirosawa	698,661	7,069,284	1,968,762	5,100,522	3,127,293	(209,963)
Wuhan Hiroyoshi	854,744	1,056,487	306,308	750,179	761,879	41,402
Dongguan Mono Hirosawa	94,972	188,924	104,764	84,160	142,955	3,167
Kaifeng Guangjia	313,460	535,728	48,605	487,123	152,594	(33,227)
Hunan Hiroyoshi	335,850	433,449	150,724	282,725	294,740	19,471
Dongguan Guan Neng	22,390	18,565	0	18,565	(4,799)	(6,499)
Xianyang Hiroyoshi	223,900	624,957	95,746	529,211	281,910	1,099
Dongguan Hiroca Technology	44,780	81,145	7,437	73,708	53,160	6,923
Losang-Hirosawa	22,299	147,838	140,669	7,169	136,702	(18,238)
Dongguan Karyu	55,975	30,244	4,098	26,147	12,057	(1,713)
Suzhou Hiroyuki	427,883	613,375	270,605	342,770	191,125	(15,706)

~172~

Hiroca Holdings Limited and Subsidiaries

Notes to the Consolidated Financial Statements(Continued)

(II) Consolidated financial statements of affiliates
Disclosed in Public Information Observatory-Financial Statements

(III) Affiliation report:
The Company is not a subsidiary defined in the Affiliates chapter of the Company Act, so it does not apply.

6.2 Private placement of securities in the most recent year up to the publication date of this annual report:
None.

6.3 Other necessary supplementary information:
Details of major differences from our country's regulations on shareholder right protection: The Company has stipulated in the Articles of Incorporation or other internal regulations to protect shareholders' equity in accordance with the Taiwan Stock Exchange Checklist for Shareholder Rights Protection in the Country Where Foreign Issuers are Registered (hereinafter referred to as the "Checklist for Shareholder Rights Protection"). However, due to the restrictions under the laws of the Cayman Islands, there are differences between the Company's Articles of Incorporation and the requirements in the Checklist for Shareholder Rights Protection. Such differences are specified below:

Differences	Laws of the Cayman Islands and details	Articles of Incorporation and details
1. The Company shall not cancel its shares unless its capital reduction proposal is approved by the resolution of the shareholders' meeting; the capital shall be reduced in proportion to the number of shares held by shareholders.
2. If the Company reduces its capital, it may return the capital contributions other than cash; the property to be returned and the amount of property other than cash shall be adopted by the resolution of the shareholders' meeting and approved by the shareholder, to whom the capital contributions are returned.
3. The Board of Directors shall submit the value of the property mentioned in the preceding paragraph and the amount of property other than	As per the Cayman Islands company law, the reduction of issued capital shall be passed by a supermajority resolution and approved by the court before it can take effect.	To not violate the Cayman Islands company law, Article 39B of the Company's the Articles of Incorporation specifies a requirement to achieve the effect of capital reduction in proportion to the number of shares held by shareholders by means of compulsory redemption or repurchase of shares. As there is no difference in terms of execution between the two, the impact on shareholder rights should be limited.

Hiroca Holdings Limited and Subsidiaries
Notes to the Consolidated Financial Statements(Continued)

Differences	Laws of the Cayman Islands and details	Articles of Incorporation and details
cash to a CPA of the Republic of China for audit and certification prior to a shareholders' meeting.
Shareholders who have continued to hold 3% or more of the total issued shares for at least one year may request the Board of Directors (stating their proposals and reasons in writing) to convene an extraordinary shareholders' meeting. If the Board of Directors fails to call a meeting within 15 days after the request is made, the shareholders may call a meeting on their own with the competent authority's approval.	When shareholders convene a shareholders' meeting on their own, the Cayman Islands company law does not bestow any power to any competent authority to grant its approval.	As per point 2(III) in the Letter Tai-Zeng-Shang No. 0991701319 issued by the Taiwan Stock Exchange dated April 13, 2010, the failure to stipulate in the Articles of Incorporation that shareholders must obtain the competent authority's approval to convene a shareholders' meeting by themselves should not affect shareholders' rights.
When the Company allows the exercise of voting rights in writing or by electronic means, the method of exercising voting rights shall be specified in the notice of shareholders' meeting. Shareholders who exercised their voting rights in writing or by electronic means shall be deemed to have attended the shareholders' meeting in person. However, they shall be deemed to have abstained from voting on extempore motions and the revised motions at the shareholders' meeting.	As per an attorney's advice in the Cayman Islands, shareholders who exercised their voting rights in writing or by electronic means cannot be deemed to have attended the shareholders' meeting in person as they cannot discuss the content of the given motion with other shareholders at the same time.	As per Article 68 of the Company's Articles of Incorporation, shareholders who exercised voting rights in writing or by electronic means are not deemed to be present in person but deemed to have entrusted the chair of the shareholders' meeting to exercise voting rights in accordance with their instructions in writing or by electronic means (but the entrustment is not regarded as entrustment of proxies to attend the shareholders' meeting under Taiwan Stock Exchange's laws). As there is no difference in terms of execution between the two, the impact on shareholder rights should be limited.
The motions below involving shareholders' major rights shall be adopted with the consent of shareholders representing a majority of voting rights present at a shareholders' meeting attended by shareholders representing more than two-thirds of the total issued shares. If the	The supermajority resolution stipulated in Article 60 of the Cayman Islands company law refers to a resolution adopted by shareholders representing two-thirds or more of the voting rights who are eligible to exercise voting rights at the shareholders' meeting. If motions that should be	Regarding any amendments to the Articles of Incorporation, any amendments to the Articles of Incorporation prejudicial to preference shareholder rights, mergers, or voluntary dissolution due to inability to settle debts when they are due, the Articles 158, 18, 31 and 33 (Article b) of

~173~

Hiroca Holdings Limited and Subsidiaries
Notes to the Consolidated Financial Statements(Continued)

Differences	Laws of the Cayman Islands and details	Articles of Incorporation and details
total number of shares represented by shareholders present is lower than the above-mentioned one, it may be adopted with the consent of shareholders representing two-thirds or more of the voting rights present at a shareholders’ meeting attended by shareholders representing a majority of the total issued shares.
1. Entering into, amending, or terminating any contract for lease of the Company’s business in whole, or for entrusted business, or for regular joint operation with others; transferring the whole or any essential part of its business or assets; accepting the transfer of another entity’s whole business or assets, which has great influence on the Company’s business operation.
2. Amendment to the Articles of Incorporation
3. In the case of any amendment to the Articles of Incorporation prejudicial to the special shareholders’ rights, it shall be adopted by resolution of the meeting of preference shareholders;
4. Distribution of all or part of dividends and bonuses by issuing new shares;
5. Resolution of dissolution, merger, or demerger;
6. Issuers of new shares with restricted employee rights
7. Share swap
Where the TWSE primary listed foreign companies is delisted due to its participation in any dissolution after merger, general transfer, share swap, or demerger,	passed by supermajority resolution, such as amendment to the Articles of Incorporation, dissolution, or merger, is passed by less than the supermajority, it shall be invalid.
Where the Company resolves to voluntarily dissolve because it cannot settle its debts when they are due, as per Article 116(d) of the Cayman Islands company law, a resolution shall be adopted with a majority vote at a shareholders’ meeting.	the Company’s Articles of Incorporation shall be passed by supermajority resolution in accordance with the Cayman Islands company law. Any voluntary dissolution due to the inability to settle debts shall be passed with a majority vote by the resolution of a shareholders’ meeting according to Article 33(a) of the Company’s Articles of Incorporation. The remaining cases shall be passed in accordance with the resolution methods listed above. With reference to the gist in the Letter Tai-Zeng-Shang No. 0991701319 issued by the Taiwan Stock Exchange dated April 13, 2010, the impact of the above differences on shareholders’ rights should be limited.

~174~

Hiroca Holdings Limited and Subsidiaries
Notes to the Consolidated Financial Statements(Continued)

Differences	Laws of the Cayman Islands and details	Articles of Incorporation and details
and the surviving, transferee, existing, or new company is a non-TWSE/TPEx-listed company, it shall be adopted with the consent of shareholders representing two-thirds of the total issued shares.
Directors' remuneration, if not defined in the Articles of Incorporation, shall be determined by the shareholders' meeting and shall not be ratified afterwards.	No particular regulation is in place.	As per Article 85 of the Company's Articles of Incorporation, directors' remuneration shall be determined by the Board of Directors based on the general standards in the industry, and Article 86B also sets out that a remuneration committee shall be established to determine directors' remuneration and other incentive measures. With reference to the gist of the Interpretation Letter Shang No. 09302030870 issued by the Ministry of Economic Affairs of the Republic of China dated March 8, 2004, and the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange, the above regulations should have no adverse impact on shareholders' rights.

VIII. Any event specified in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act with a material impact on shareholders' rights or securities prices during the most recent year and up to the publication date of this annual report: None.

~175~

AI assistant

Hiroca — Annual Report 2024

51782_rns_2025-07-30_68363c1a-9591-49f5-a971-0f7e26be7d7d.pdf

廣華控股有限公司

2024 Annual Report

Contents

II. CORPORATE GOVERNANCE REPORT

2.1 COMPANY AND GROUP PROFILE

2.2 Group structure and evolution

III. CORPORATE GOVERNANCE REPORT

3.1 Information of Directors, President, Vice Presidents, Senior Managers, and Heads of Departments and Branches

(I) Directors(I)

Board diversity policy and achievement

(a) Board diversity policy

3.3 Implementation of corporate governance

(I) Information on the operations of the Board of Directors

Additional information

(II) The operations of the Audit Committee

Additional information

A succession plan for board members and implementation

A succession plan for key management personnel and implementation

Assessment results:

Sustainable development governing unit

Information on the operation of the Sustainability Committee

Energy conservation and carbon reduction, greenhouse gas reduction, water reduction, or other waste management policy:

Policies and specific management plans for human rights protection

The Company's Declaration of Human Rights:

Human rights protection training approaches:

Employee benefit measures

Basic benefit program

Social insurance policies

Supplier Sustainable Development Management Guidelines

Management of most-polluting suppliers

Supplier evaluation

Supplier sustainability management

Criteria for new suppliers

Local procurement

Green procurement

2. Important resolutions by the Board of Directors

3.4 Information on the Company’s audit fees

3.5 Replacement of CPAs: No differences since 2023

2. Type of stock

(II) List of major shareholders

(III) Dividend policy and implementation

3.2 Corporate bonds (including overseas corporate bonds):

3. Product development trends

(1) Continuous innovation of surface treatment technology

4. R&D personnel and their educational attainment and experience

4.2 Overview of the market and production and sales

(I) Market analysis

2. Market share

2. Production process of main products

3. Supply of main raw materials

(III) List of major clients and suppliers

4.3 The number of in-service employees during the most recent two years and up to the publication date of this annual report

4.4 Information on environmental protection expenditure

4.5 Labor-management relations

4.6 Cyber security management

4.7 Important contracts

VI. Financial Position and Financial Performance Review Analysis and Risk Management

5.1 Financial position

5.2 Financial Performance

5.3 Cash flows

5.4 Major Capital Expenditure Items :

5.5 The Company's investment policy for the most recent year, the main reasons for profit or loss, improvement plan, and investment plan for the following year

(II) The main reasons for profit or loss and improvement plan:

(III) The Company's investment plan for the coming year:

5.6 The following matters that should be analyzed and assessed for risks

(I) Risks

VII. Special Matters

6.1 Special Disclosure

6. Overview of the operations of affiliates:

Hiroca Holdings Limited and Subsidiaries

Notes to the Consolidated Financial Statements(Continued)

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