hytech

Stock Code: 6573

HY Electronic (Cayman) Limited

蚣揚發展科技股份有限公司

2026 Annual Shareholders' Meeting Meeting Agenda

Time : 09:00 a.m., June 22, 2026 (Monday)

Address : 2F., No. 223, Sec.3, Beixin Rd., Xindian Dist., New Taipei City (Convention Hall 2D, Taipei Innovation City Convention Center)

I. MEETING PROCEDURES ... 1
II. MEETING AGENDA ... 2
MATTERS FOR REPORT ... 3
MATTERS FOR RATIFICATION ... 3
MATTERS FOR DISCUSSION ... 4
MATTERS FOR ELECTION ... 5
OTHER MATTERS FOR DISCUSSION ... 5
PROVISIONAL MOTIONS ... 5
ADJOURNMENT ... 5
III. ATTACHMENTS ... 6
(I). BUSINESS REPORT OF 2025 ... 6
(II). AUDIT COMMITTEE'S REVIEW REPORT OF 2025 ... 8
(III). 2025 DIRECTORS' COMPENSATION ... 9
(IV). CONSOLIDATED FINANCIAL STATEMENTS AND CPA REVIEW REPORT OF 2025 ... 14
(V). 2025 STATEMENT OF LOSS COMPENSATION ... 81
(VI). COMPARISON TABLE OF AMENDMENTS TO SELECTED PROVISIONS OF THE "PROCEDURES FOR LENDING FUNDS TO OTHERS" ... 82
(VII). COMPARISON TABLE OF AMENDMENTS TO SELECTED PROVISIONS OF THE "PROCEDURES FOR ACQUISITION OR DISPOSAL OF ASSETS" ... 83
(VIII). COMPARISON TABLE OF AMENDMENTS TO SELECTED PROVISIONS OF THE "RULES OF PROCEDURE FOR SHAREHOLDERS' MEETINGS" ... 84
(IX). LIST OF BOARD DIRECTOR CANDIDATES ... 85
(X). LIST OF CONCURRENT ROLE(S) OF DIRECTORS ... 87
IV. APPENDIXES ... 88
(I). CORPORATION'S ARTICLES OF INCORPORATION ... 88
(II). RULES OF PROCEDURE FOR SHAREHOLDERS' MEETINGS ... 135
(III). REGULATIONS GOVERNING ELECTION OF DIRECTORS ... 145
(IV). PROCEDURES FOR LENDING FUNDS TO OTHERS ... 148
(V). PROCEDURES FOR ACQUISITION OR DISPOSAL OF ASSETS ... 153
(VI). SHAREHOLDING STATUS OF DIRECTORS AS OF THE DATE FOR SUSPENSION OF SHARE TRANSFER FOR THIS ANNUAL GENERAL MEETING ... 167

I. Meeting Procedures

HY ELECTRONIC (CAYMAN) LIMITED

Procedure for the 2025 Annual Meeting of Shareholders

Announcing a Meeting
Chairman Statements
Matters for Report
Matters for Ratification
Matters for Discussion
Matters for Election
Other Matters for Discussion
Provisional Motions
Adjournment

II. Meeting Agenda

HY ELECTRONIC (CAYMAN) LIMITED
2026 Agenda of Regular Shareholders' Meeting

Time : 09:00 a.m., June 22, 2026 (Monday)

Address : 2F., No. 223, Sec.3, Beixin Rd., Xindian Dist., New Taipei City
(Convention Hall 2D, Taipei Innovation City Convention Center)

I. Report the Number of Shares Represented by the Attending Shareholders and Announce Meeting in Session.

II. Chairman Statements

III. Matters for Report:

The Business Report of the Company in 2025.
Audit Committee's Review Report of the Company in 2025.
Annual Employees' and Directors' Compensation and Remuneration Distribution Report of the Company in 2025.
The Directors’ Compensation Report of the Company in 2025.

IV. Matters for Ratification:

The consolidated financial statements and Business Report of the Company in 2025.
Proposal for the Company’s 2025 profit and loss compensation.

V. Matters for Discussion:

Amendments to the Company's "Procedures for Lending Funds to Others".
Amendments to the Company's "Procedures for Acquiring or Disposing of Assets".
Amendments to the Company's "Rules of Procedure for Shareholders' Meetings".

VI. Matters for Election

The board of directors (including independent directors) was fully re-elected.

VII. Other Matters for Discussion

Proposal to Release Newly Elected Directors (Including Independent Directors) from Non-Competition Restrictions.

VIII. Provisional Motions

IX. Adjournment

Matters for Report

Item 1

Subject: 2025 Annual Business Report

Explanation: Please refer to Attachment 1, Page 6 - 7 of this handbook for details on the Company's business performance in 2025.

Item 2

Subject: 2025 Audit Committee Report

Explanation: The Audit Committee’s report on its review of the Company’s 2025 financials and internal controls can be found in Attachment 2, Page 8 of this handbook.

Item 3

Subject: Employee and Directors' Compensation Report for 2025

Explanation:

This matter is handled in accordance with Article 14.4 of the Company’s Articles of Incorporation.
As the Company’s accumulated deficit after carryforward for 2025 is NT$161,715,301, no allocation is proposed for this year.

Item 4

Subject: The Directors’ Compensation Report of the Company in 2025.

Explanation: In line with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, details on the Company’s directors’ compensation policy and individual remuneration figures are available in Attachment 3, Pages 9 - 13 of this handbook.

Matters for Ratification

Item 1 (Proposed by the Board of Directors)

Subject: 2025 Annual Business Report and Consolidated Financial Statements

Explanation: The 2025 Consolidated Financial Statements have been audited by CPAs Hsiu-Li Chen and Wen-Pin, Chen of Candor Taiwan CPAs. They have issued an unqualified audit opinion. The Annual Business Report and Financial Statements are enclosed in Attachment 1, Pages 6 - 7 and Attachment 4, Pages 14 - 80 of this handbook.

Resolution:

Item 2 (Proposed by the Board of Directors)

Subject: Proposal for the Company’s 2025 profit and loss compensation.

Explanation: The Company’s beginning accumulated deficit for 2025 was NT$229,885,629. After adding net income after tax of NT$98,715,100 for the current year and deducting NT$30,544,772 attributable to changes in ownership interests in subsidiaries recognized outside of current year net income, the ending accumulated deficit for 2025 is NT$161,715,301. This amount is proposed to be retained on the books and carried forward to be offset against future earnings. Accordingly, no dividends, whether in cash or stock, are proposed for this year. Please refer to Attachment 5, page 81 of this Handbook.

Resolution:

Matters for Discussion

Item 1
(Proposed by the Board of Directors)

Subject: Proposed amendments to the Company's "Procedures for Lending Funds to Others", submitted for discussion.

Explanation: To align with applicable regulations and operational requirements, certain provisions of the "Procedures for Lending Funds to Others" are proposed to be amended. A comparison table of the amendments is provided in Attachment 6, pages 82 of this Handbook.

Resolution:

Item 2
(Proposed by the Board of Directors)

Subject: Proposed amendments to the Company's "Procedures for Acquisition or Disposal of Assets"; submitted for discussion.

Explanation: To comply with applicable regulations and operational requirements, certain provisions of the Company's "Procedures for Acquisition or Disposal of Assets" have been revised. Please refer to Appendix 7, pages 83 of this Meeting Handbook for the comparison table of the amended provisions.

Resolution:

Item 3
(Proposed by the Board of Directors)

Subject: Proposed amendments to the Company's "Rules of Procedure for Shareholders' Meetings," submitted for discussion.

Explanation: In accordance with Taiwan Stock Exchange Letter Tai-Zheng-Governance No. 11500029701, certain provisions of the "Rules of Procedure for Shareholders' Meetings" are proposed to be amended. A comparison table of the amendments is provided in Attachment 8, pages 84 of this Handbook.

Resolution:

Matters for Election

Item 1
(Proposed by the Board of Directors)

Subject: The board of directors (including independent directors) was fully re-elected.

Explanation:
1. The term of office of all directors of the Company’s current fifth Board will expire on June 20, 2026. Pursuant to Article 195 of the Company Act, directors may serve terms of up to three years and may be re-elected upon expiration of their terms. If re-election is not completed before the expiration of a director’s term, such director shall continue to perform his or her duties until the newly elected directors assume office.
2. Under the Company’s Articles of Incorporation, the Board shall consist of no fewer than seven and no more than eleven directors. The Company proposes to conduct a full re-election of directors, including independent directors, at the 2026 Annual General Meeting. A total of nine directors, including four independent directors, will be elected under the candidate nomination system set forth in the Articles of Incorporation. The newly elected directors, including independent directors, will assume office on the date of re-election and serve a three year term from June 22, 2026 through June 21, 2029. Please refer to Attachment 9, pages 85 - 86 of this Handbook for information regarding the educational and professional backgrounds of the director candidates.
3. Subject to the election of directors, including independent directors, at the shareholders’ meeting, it is proposed that the Company’s registered agent be authorized and instructed to file the updated register of directors and complete other related filings with the Cayman Islands Registrar of Companies.

Election Result:

Other Matters for Discussion

Item 1
(Proposed by the Board of Directors)

Subject: Proposal to Release Newly Elected Directors (Including Independent Directors) from Non-Competition Restrictions.

Explanation:
1. This proposal is submitted pursuant to Article 209 of the Company Act, which provides that a director engaging, for himself or herself or on behalf of another person, in any activity within the scope of the Company’s business shall disclose the material details of such activity to the shareholders’ meeting and obtain its approval.
2. To benefit from the professional expertise and industry experience of the Company’s directors, including independent directors, it is proposed that the shareholders approve the release of non-competition restrictions applicable to the newly elected directors, including independent directors, effective from the date they assume office. Please refer to Attachment 10, page 87 of this Handbook.

Resolution:

Provisional Motions

Adjournment

III. Attachments

(I). Business Report of 2025

HY ELECTRONIC (CAYMAN) LIMITED
Business Report of 2025

In 2025, the global economy continued to face geopolitical tensions, and the overall macroeconomic environment remained challenging. Uncertainties arising from interest rate policy adjustments, exchange rate fluctuations, and supply chain restructuring created significant operating pressure for businesses across industries.

Amid these headwinds, HY Electronic Corp. remained committed to maintaining stable operations and pursuing growth opportunities. Nevertheless, due to continued weakness in global consumer electronics demand and supply and demand imbalances in the green energy market, the Company’s overall revenue performance for 2025 did not meet expectations.

2025 Operating Results

I. Operating Performance

In 2025, consolidated revenue totaled NT$833 million, with a consolidated gross profit of NT$95 million. Consolidated net profit after tax for the year stood at NT$99 million.

II. Based on the foregoing, consolidated earnings per share for 2025 were NT$1.23.

Unit: NT$ Thousand

Item			2025	2024 (Restated)	Increase (Decrease) (%)
Financial Information	Operating Revenue		833,212	962,465	-13.43%
	Gross Profit		94,685	32,248	193.62%
	Net Profit (Loss) After Tax		98,973	-77,001	228.53%
Financial Ratios	Return on Assets (%)		6.10	-1.30	569.23
	Return on Equity (%)		11.67	-9.07	228.67
	Percentage to Paid-in Capital (%)	Operating Income	-12.63	-22.18	43.06
		Profit Before Tax	13.65	-4.86	380.86
	Net Profit Margin (%)		11.88	-8.00	248.50
	Earnings Per Share (NT$)		1.23	-1.94	163.40%

III. Research and Development Status

HY Electronic recorded consolidated research and development expenses of NT$33,068 thousand and NT$40,185 thousand in 2025 and 2024, respectively, representing 3.97% and 4.18% of consolidated revenue for the respective periods. Such expenditures were primarily related to the implementation of automated packaging processes, innovative wafer manufacturing technologies, and new product development. The Company will continue to optimize production processes, develop new products, and enhance automated manufacturing capabilities to improve the flexibility of capacity utilization. The Company currently holds a total of 12 granted patents in the PRC and the Republic of China, including 2 invention patents and 10 utility model patents.

IV. Budget Execution Status

As the Company did not publicly issue financial forecasts for 2025, disclosure of budget execution status was not required.

Summary of Annual Business Plan

Amid intensifying price competition in the industry, uneven recovery in end market demand, the rapid expansion of competitors in the China market, and rising customer expectations for cost, quality, delivery, and technical support, the Company recognizes that future growth cannot rely solely on existing products and markets. Accordingly, the Company is taking a more proactive approach to product upgrades, customer portfolio optimization, and operational improvement in order to gradually overcome the low margin, highly competitive environment traditionally associated with the discrete component industry.

I. Corporate Transformation and Operational Enhancement

HY Electronic remains committed to building long-term competitiveness through forward-looking strategic initiatives. Over the past year, the Company undertook broad adjustments to its production and sales mix and actively implemented inventory reduction measures to maintain competitiveness. Through the collective efforts of the team, total inventory was reduced by NT$49,869 thousand compared with 2024. In product development, in addition to continuing investment in power-related products aligned with the Company's core business, the Company has also expanded its research and development efforts into products and applications related to artificial intelligence, cloud computing, data centers, high performance computing, automotive electronics, and industrial automation.

II. Operating Strategy

In response to challenges including trade disputes, geopolitical tensions, and inflationary pressures, HY Electronic has adjusted its production and sales strategy. The Company has reduced or discontinued production and order intake for low margin and low return legacy product lines, with the objective of improving overall profitability rather than pursuing revenue growth through low-priced orders.

III. Corporate Sustainability

The Company continues to advance its sustainability initiatives through the Board-level Sustainability Development Committee, which oversees the direction of sustainability policies. In addition, under the leadership of the Chief Sustainability Officer and six dedicated sustainability task forces, the Company continues to promote internal and third-party carbon footprint and greenhouse gas inventory initiatives, as well as third-party assurance activities. The Company also works closely with supply chain partners and customers to support sustainability initiatives in compliance with applicable regulations, while continuing to advance its carbon neutrality objectives.

Impact of the External Competitive, Regulatory, and Overall Business Environment:

Looking ahead to 2026, growth momentum in artificial intelligence, cloud computing, and data center industries is expected to continue. These trends are expected to increase market demand for the Company's power management related components. In addition, expanding applications in automotive electronics and industrial automation are expected to further drive demand for the Company's high-end current protection and control components. The Company will continue to capitalize on these market opportunities by strengthening product quality, customer service, technical support, and cost management capabilities. At the same time, the Company will actively develop high value-added products and diversify its market presence in order to enhance long-term competitiveness and improve profitability amid an increasingly competitive industry environment.

Over the past three decades, HY Electronic has advanced steadily through challenges and market changes. Supported by a solid operational foundation and a commitment to innovation, the Company has continued to strengthen its competitive position, enhance corporate governance, foster a positive workplace environment, and fulfill its corporate social responsibilities, thereby driving sustainable corporate development. Going forward, we will remain committed to creating long-term value for shareholders.

Finally, we sincerely ask for the continued encouragement and support of our shareholders and extend our appreciation for your long-standing trust and support of the Company.

Chairman: Kao, Kuei-Jen
Manager: Kao, Kuei-Jen
Chief Accountant: Lin, Yu-Hsiang

(II). Audit Committee's Review Report of 2025

Audit Committee's Review Report

The Board of Directors has prepared the Company’s 2025 Business Report, consolidated financial statements, and earnings appropriation proposals. The consolidated financial statements have been audited by Hsiu-Li, Chen and Wen-Pin, Chen, Certified Public Accountants of Candor Taiwan CPAs, as appointed by the Board, and an independent auditors’ report has been issued.

The Audit Committee has reviewed the Business Report, financial statements, and earnings appropriation proposal and found no material inconsistencies or non-compliance. This report is therefore submitted in accordance with the Securities and Exchange Act and the Company Act.

Respectfully submitted for review

TO Shareholders’ Annual General Meeting for 2026, HY Electronic (Cayman) Limited

The Audit Committee, HY Electronic (Cayman) Limited
Convener: CHENG, KONG-FAH
Date: 2026/3/10

(III). 2025 Directors' Compensation

Directors' Compensation Policy and Structure

Compensation Policy, Standards, Structure, and Determination Procedures

(1) Policy: To strengthen corporate governance by ensuring that directors' compensation is transparent, reasonable, and standardized.

(2) Standards: Directors, including independent directors, are elected by the shareholders' meeting in accordance with the Company's Articles of Incorporation and applicable laws and regulations. Directors are classified into three categories based on their roles: external directors, being non-independent directors who do not hold other positions within the Company; internal directors, being non-independent directors who also serve as employees or members of management; and independent directors, who meet the independence requirements under applicable laws and regulations. The Company may pay directors a fixed monthly compensation ranging from NT$10,000 to NT$50,000 regardless of profitability. Such compensation may be adjusted by the Compensation Committee based on each director's level of involvement and contribution.

Earnings distribution applies when the Company generates profits and has no accumulated deficits from prior years. In such circumstances, distributions are made in accordance with the appropriation ratios set forth in the Articles of Incorporation. The Compensation Committee reviews the overall performance of the Board, the Company's operating results, and future operating risks, and submits a proposed allocation. The Board incorporates this proposal into the earnings distribution plan, which is then submitted to the shareholders' meeting for approval. Following approval, allocations are made based on each director's level of participation and contribution.

The Company reviews its compensation policies, standards, and framework primarily with reference to overall operating performance. The Chairman assumes primary responsibility for strategic planning, business development, and overall operating results, and therefore receives compensation within a range of 0% to 150% of industry benchmarks. Independent directors may receive fixed monthly compensation of NT$10,000 to NT$50,000 regardless of the Company's profitability.

The applicable compensation items for directors, including independent directors, and members of functional committees are summarized below:

Applicable Personnel and Compensation Items	Independent Directors	External Directors	Internal Directors
(Fixed) Salary Compensation	Applicable	Applicable	Not Applicable
Directors’ Remuneration from Earnings Distribution	Applicable	Applicable	Applicable
Business Execution Expenses (Transportation Allowance)	Applicable	Applicable	Not Applicable
Position Allowance	Not Applicable	Not Applicable	Applicable (Note)
Severance Pay	Not Applicable	Not Applicable	Applicable (Note)
Retirement Pension	Not Applicable	Not Applicable	Applicable (Note)

Note: Where directors concurrently serve as employees, compensation shall be determined in accordance with the Company's internal policies and procedures.

(3) Composition:

Directors’ Remuneration	In accordance with the Articles of Incorporation, when the Company reports annual profits, the Compensation Committee considers overall Board performance, operating results, future business outlook, and risk appetite, and proposes a distribution plan. Up to 3% of profits may be allocated as remuneration to directors, excluding independent directors. Directors who concurrently serve as managerial officers are not eligible to participate in this distribution. The Board includes this allocation in the earnings distribution proposal, which is submitted to the shareholders’ meeting for approval. Upon approval, remuneration is allocated based on each director’s level of participation and contribution, using a weighted allocation methodology.
Salary Compensation	Compensation Director Remuneration Structure and Payment Principles: Fixed Compensation: 1. The Company may pay directors a fixed monthly salary ranging from NT$10,000 to NT$50,000, regardless of profitability. Such compensation may be adjusted by the Remuneration Committee based on each director’s level of involvement and contribution to the Company’s operations. 2. Where an inside director also serves as an employee of the Company, including as General Manager, Deputy General Manager, or other managerial personnel, compensation for such roles shall be determined in accordance with the Company’s internal policies and procedures. 3. The Remuneration Committee may assess and recommend fixed compensation for individual directors based on their participation and contributions, with reference to industry benchmarks, within a range of 0% to 150% of prevailing market levels. Such assessments may be conducted on either a monthly or annual basis.
Expenses Related to Business Execution	These refer to attendance fees paid to directors for participating in Board meetings, shareholders’ meetings, and functional committee meetings in the course of their duties. 1. Directors not involved in day-to-day management shall receive NT$5,000 per meeting attended, including participation via video conference. Where multiple meetings are attended on the same day, only one attendance fee shall be paid. 2. No additional compensation, including transportation allowances, special allowances, travel expenses, or other subsidies, shall be provided, except that reimbursement may be made in accordance with the Company’s travel policies where travel is required for business purposes. Any compensation not specified above, or any item otherwise not provided, shall only be granted upon evaluation by the Remuneration Committee, taking into account necessity, reasonableness, legal compliance, operational risk, and industry practice, and subsequent review and approval by the Board of Directors.

Directors’ Remuneration

In accordance with the Articles of Incorporation, when the Company reports annual profits, the Compensation Committee considers overall Board performance, operating results, future business outlook, and risk appetite, and proposes a distribution plan. Up to 3% of profits may be allocated as remuneration to directors, excluding independent directors. Directors who concurrently serve as managerial officers are not eligible to participate in this distribution. The Board includes this allocation in the earnings distribution proposal, which is submitted to the shareholders’ meeting for approval. Upon approval, remuneration is allocated based on each director’s level of participation and contribution, using a weighted allocation methodology.

Salary Compensation

Compensation Director Remuneration Structure and Payment Principles: Fixed Compensation: 1. The Company may pay directors a fixed monthly salary ranging from NT$10,000 to NT$50,000, regardless of profitability. Such compensation may be adjusted by the Remuneration Committee based on each director’s level of involvement and contribution to the Company’s operations. 2. Where an inside director also serves as an employee of the Company, including as General Manager, Deputy General Manager, or other managerial personnel, compensation for such roles shall be determined in accordance with the Company’s internal policies and procedures. 3. The Remuneration Committee may assess and recommend fixed compensation for individual directors based on their participation and contributions, with reference to industry benchmarks, within a range of 0% to 150% of prevailing market levels. Such assessments may be conducted on either a monthly or annual basis.

Expenses Related to Business Execution

These refer to attendance fees paid to directors for participating in Board meetings, shareholders’ meetings, and functional committee meetings in the course of their duties. 1. Directors not involved in day-to-day management shall receive NT$5,000 per meeting attended, including participation via video conference. Where multiple meetings are attended on the same day, only one attendance fee shall be paid. 2. No additional compensation, including transportation allowances, special allowances, travel expenses, or other subsidies, shall be provided, except that reimbursement may be made in accordance with the Company’s travel policies where travel is required for business purposes. Any compensation not specified above, or any item otherwise not provided, shall only be granted upon evaluation by the Remuneration Committee, taking into account necessity, reasonableness, legal compliance, operational risk, and industry practice, and subsequent review and approval by the Board of Directors.

(4) Procedures for Determining Compensation and Operating Performance:

The Compensation Committee and the Board conduct annual reviews of director performance and the appropriateness of compensation. Evaluations consider each director's performance results and contributions, as well as the Company's overall operating performance, industry

risks, and development trends. The compensation framework is also reviewed as needed in response to operating conditions and applicable laws and regulations. In addition, prevailing corporate governance practices are taken into account to ensure reasonable compensation while balancing sustainable growth and risk management.

Director compensation amounts are determined based on an evaluation by the Compensation Committee of annual financial and operating performance and are subject to approval by the Board.

The Company reported net income after tax of NT$98,715 thousand for 2025. However, due to accumulated losses of NT$161,715 thousand, the Board resolved on March 10, 2026 not to distribute employee or director compensation.

(5) Future Risks:

Director compensation is closely tied to operating performance and therefore presents relatively low forward-looking risk. Compensation for external and independent directors is fixed and controllable, and no material future risks have been identified.

2. Remuneration for Directors and Independent Directors

December 31, 2025: NT$1,000; %

Title	Name (Note 1)	Director Remuneration							The total amount of items A, B, C, and D, and their proportion to the net profit after tax (Note 10)	Remuneration received by those serving concurrently as part-time employees							The total amount of items A, B, C, D, E, F, and G, and their proportion to the net profit after tax (Attachment 10)	Receiving remuneration from invested businesses other than subsidiaries or from the parent Company (Note 11)
		Compensation and Remuneration (A) (Note 2)		Retirement pension (B)		Directors' Remuneration (C) (Note 3)		Business execution expenses (D) (Note 4)			Salaries, bonuses, and special allowances, etc. (E) (Note 5)		Retirement pension (F)		The Company					All Companies Included in the Financial Report (Note 7)
		The Company	All Companies Included in the Financial Report (Note 7)	The Company	All Companies Included in the Financial Report (Note 7)	The Company	All Companies Included in the Financial Report (Note 7)	The Company	All Companies Included in the Financial Report (Note 7)	The Company	All Companies Included in the Financial Report (Note 7)	The Company	All Companies Included in the Financial Report (Note 7)	Cash Amount	Share certificates Amount	Cash Amount	Share certificates Amount			The Company	All Companies Included in the Financial Report (Note 7)
Director	Director & President	Kao, Kuei-Jen	-	-	-	-	-	-	-	$-	$-	1,859	3,433	-	-	-	-	-	-	$1,859	$3,43
																				1.88%	3.48%
	Director & VP of the Branch	Fang, Hsin-Yi	-	-	-	-	-	-	-	$-	$-	1,329	2,148	70	70	-	-	-	-	$1,399	$2,218
																				1.42%	2.25%
	Director & President of Subsidiary	*Fang, Wen-Chieh								$-		$-	42	84	2	2				$44	$87
											0.04$									0.09%
	Director & President of Subsidiary	*Fang, Wen-Te	159	159	-	-	-	-	-	-	$159	$159	-	-	-	-	-	-	-	$159	$159
											0.16%	0.16%								0.16%	0.16%
Independent Director	Independent Director	*Yang, Ming-Hsiang	166	166	-	-	-	-	-	-	$166	$166	-	-	-	-	-	-	-	$166	$166
											0.17%	0.17%								0.17%	0.17%
	Independent Director	Chien, Chia-Yin	368	368	-	-	-	-	-	-	$368	$368	-	-	-	-	-	-	-	$368	$368
											0.37%	0.37%								0.37%	0.37%
	Independent Director	Cheng, Kong-Fah	373	373	-	-	-	-	-	-	$337	$337	-	-	-	-	-	-	-	$337	$337
											0.38%	0.38%								0.38%	0.38%
	Independent Director	Chin, Jui-Ting,	336	336	-	-	-	-	-	-	$336	$336	-	-	-	-	-	-	-	$336	$336
											0.34%	0.34%								0.34%	0.34%
	Independent Director	*Huang, Cheng-Yuan	77	77	-	-	-	-	-	-	$77	$77	-	-	-	-	-	-	-	$77	$77
0.08%											0.08%	0.08%								0.08%

Please specify the remuneration policy, system, standards, and structure for independent directors. Explain the correlation between the remuneration amount and factors such as the responsibilities borne, risks, and time invested:
(1) Under Article 14.4 of the Company's Articles of Incorporation, when the Company generates profits in a fiscal year, $2\%$ to $15\%$ shall be allocated for employee compensation and up to $3\%$ for director compensation, including independent directors. If accumulated losses remain, an amount must first be set aside to offset such losses.
(2) In accordance with the Company's Regulations Governing Compensation and Performance Evaluation for Directors and Managers, allocations may be made only when the Company is profitable and has no prior-year losses to be covered. Based on the allocation ratios set forth in the Articles of Incorporation, the Compensation Committee considers overall Board performance, operating results, and future business risks, and submits a proposed distribution to the Board. The Board includes such proposal in the earnings appropriation plan, which is subject to shareholder approval, after which compensation is allocated according to each director's level of participation and contribution.
The Company reported net income after tax of NT$98,715 thousand for 2025. However, due to accumulated losses of NT$161,715 thousand, the Board resolved on March 10, 2026 not to distribute employee or director compensation.

(3) Under the compensation policy, directors are categorized based on their roles as external directors, internal directors, and independent directors. External directors are non-independent directors who do not hold other positions within the Company. Internal directors are non-independent directors who concurrently serve as employees or managers. Independent directors meet the statutory requirements for independence. Directors may receive a fixed monthly salary ranging from NT$10,000 to NT$50,000 regardless of operating results, subject to adjustment by the Compensation Committee based on their level of participation and contribution.

(4) The Company's director compensation is in compliance with its Articles of Incorporation, remains within market standards, and is deemed reasonable.

In addition to the disclosures in the table above, directors of the Company receiving any remuneration for services provided to all companies within the financial statements for the most recent fiscal year (such as serving as consultants and not classified as employees): None.

Note: Fang, Wen-Chieh passed away on January 14, 2025.

Yang, Ming-Hsiang resigned on May 19, 2025.

Fang, Wen-Te was elected by AGM on June 23, 2025.

Huang, Cheng-Yuan was elected by EGM at an on September 15, 2025.

(IV). Consolidated Financial Statements and CPA Review Report of 2025

Stock Code:6573

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

Consolidated Financial Statements With Independent Auditors' Report

For the Years Ended December 31, 2025 and 2024 (Restated)

Address: P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205 Cayman Islands

Telephone: (02)8913-1399

The independent auditors' report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' report and consolidated financial statements, the Chinese version shall prevail.

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Chapter 1. Cover Page 1
Chapter 2. Table of Contents 2
Chapter 3. Independent Auditors' Report 3~7
Chapter 4. Consolidated Balance Sheets 8
Chapter 5. Consolidated Statements of Comprehensive Income 9
Chapter 6. Consolidated Statements of Changes in Equity 10
Chapter 7. Consolidated Statements of Cash Flows 11~12
Chapter 8. Notes to the Consolidated Financial Statements
1. Company history 13
2. Approval date and procedures of the consolidated financial statements 13
3. Application of Newly Issued and Revised Standards and Their Interpretations 13~14
4. Summary of material accounting policies 14~26
5. Significant accounting assumptions and judgments, and major sources of estimation uncertainty 27
6. Explanation of significant accounts 27~49
7. Related-party transactions 49~51
8. Pledged assets 51
9. Commitments and contingencies 51
10. Losses due to major disasters 51
11. Subsequent events 51
12. Other 52~58
13. Other disclosures 58
(1) Information on significant transactions 58、61~64、67
(2) Information on investees 58、65
(3) Information on investment in Mainland China 58、66
14. Segments Information 58~60

Independent Auditors' Report

To the Board of Directors of HY Electronic (Cayman) Limited :

Opinion

We have audited the consolidated financial statements of HY Electronic (Cayman) Limited and its subsidiaries (“the Group”), which comprise the consolidated balance sheet as of December 31, 2025 and 2024 (restated), the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024 (restated), and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Emphasis of Matter

As described in Notes 4(2) and 6(7) to the consolidated financial statements, HY Electronic (Cayman) Limited acquired 100% of the equity interest in Yangzhou Hongyu Electronic Technology Co., Ltd. from a related party, Ms. Fang Hsin-Yi, in October 2025 through a cash transaction. According to the IFRS Q&A issued by the Accounting Research and Development Foundation of the Republic of China (Taiwan), the aforementioned transaction is considered a reorganization under common control

and should be accounted for as if the combination had occurred from the beginning. Accordingly, HY Electronic (Cayman) Limited and its subsidiaries have restated their consolidated financial statements for the year 2024. Our audit opinion has not been modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2025 consolidated financial statements are stated as follows:

Evaluation of impairment of accounts receivable

As of December 31, 2025, the balance of accounts receivable was $233,684 thousand, accounting for 13% of the Group’s total assets. Please refer to Note 4(7), 5(1), 6(4) and 6(19) for relevant information. The impact on the financial statements of the Group’s is significant, as the process of assessing allowance for doubtful accounts to reflect credit risk and the appropriateness of the provisioning policy involves subjective judgments. Therefore, evaluation of accounts receivable has been identified as one of our key audit matters.

We have carried out the following main audit procedures of the above matters:

Understand the management's credit limits and credit terms for customers.
Obtain the provision policy for allowance for doubtful accounts from the Group, as well as an aging analysis of accounts receivable as of the balance sheet date, and sampling check to ensure consistency with actual circumstances.
Recalculate the provision for allowance for doubtful accounts and expected credit losses based on the balances provided by management, applying the proportion of impairment for individual customers to verify the accuracy of the provision.
Review the reversal of expected credit losses from the current year and prior years to assess the reasonableness of the provision for allowance for doubtful accounts.
Obtain information on the collection status of significant accounts receivable from the Group, and check for individual amounts that are significant and have been outstanding for over one year, as well as reasons for uncollected amounts, to determine whether appropriate provisions for allowance for doubtful accounts have been made by management.
4 -

Evaluate the cash collection status of overdue receivables from the Group during the subsequent period to assess the need for additional provision for allowance for doubtful accounts.

Inventories Evaluation

As of December 31, 2025, the balance of Inventories was $108,987 thousand, accounting for 6% of the Group’s total assets. Please refer to Note 4(8), 5(2) and 6 (6) for relevant information.

The Group mainly engages in the manufacture and sale of rectifiers, diodes, and related semiconductor components, wherein the Group's production and research activities are based on market demand. The probable changes in market demand and price can cause relevant product demand to fluctuate. Inventories are valued at the lower of cost or net realizable value, and the Group’s management assesses the inventory value through internal and external relevant information. Therefore, inventories evaluation has been identified as one of our key audit matters.

We have carried out the following main audit procedures of the above matters:

Assessing the reasonableness of the policy for the valuation of inventory obsolescence and inventory allowance. Also, to ensure the policy has been implemented, we performed procedures including sampling to examine the accuracy of inventory aging report and analyzing the changes in inventory aging report.
Inspecting the selling condition of inventories and evaluating the net realizable value basis adopted to verify the reasonableness of the estimation of inventory allowance.

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

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

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

-5-

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
6 -

Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

The engagement partners on the audit resulting in this independent auditors' report are Hsiu-Li Chen and Wen-Pin Chen.

Candor Taiwan CPAs
Taipei, Taiwan (Republic of China)
March 10, 2026

Notes to Readers

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

The auditors' report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors' report and consolidated financial statements, the Chinese version shall prevail.

-7-

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Code	Assets	Notes	December 31, 2025		December 31, 2024(Restated)
			Amount	%	Amount	%
Current assets
1100	Cash and cash equivalents	4(6),6(1)	$ 156,306	9	$ 185,105	9
1110	Current financial assets at fair value through profit or loss	4(7), 6(2)	4,569	-	-	-
1136	Financial assets at amortized cost-current	4(7),6(3),8	85,039	5	65,048	3
1150	Notes receivable, net	4(7),6(4)(19)	22,901	1	22,335	1
1170	Accounts receivable, net	4(7),6(4)(19)	233,684	13	262,838	13
1200	Other receivables	4(7), 6(5)	12,268	1	5,700	-
1220	Current tax assets	4(15),6(22)	495	-	1,126	-
130x	Inventories	4(8),6(6)	108,987	6	158,856	8
1410	Prepayments		17,369	1	25,554	2
1461	Non-current assets held for sale	4(9),6(8)(12)	-	-	-	-
1479	Other current assets	7	8,440	-	13,590	1
11xx	Total current assets		650,058	36	740,152	37
Non-current assets
1517	Financial assets at fair value through other comprehensive income-non-current	4(7),6(9)	2,175	-	4,906	-
1550	Investment accounted for using the equity method	6(7)	-	-	-	-
1600	Property, plant and equipment	4(10)(12),6(10),8	984,289	54	1,077,405	53
1755	Right-of-use assets	4(12)(13),6(11),8	64,812	4	92,674	5
1760	Investment property, net	4(11)(12),6(12),8	26,596	1	26,596	1
1840	Deferred tax assets	4(15),6(22)	7,833	1	16,055	1
1915	Prepayments for business facilities		1,231	-	181	-
1920	Refundable deposits-non-current	7,8	27,958	2	21,562	1
1990	Other non-current assets, others		42,929	2	45,683	2
15xx	Total non-current assets		1,157,823	64	1,285,062	63
1xxx	Total assets		$ 1,807,881	100	$ 2,025,214	100
Current liabilities
2100	Short-term borrowings	4(18),6(13)(24)	$ 372,270	21	$ 358,053	18
2130	Contract liabilities-current	4(16),6(19)	4,732	-	4,429	-
2150	Notes payable		68,899	4	72,065	4
2170	Accounts payable		187,819	10	249,425	12
2200	Other payables	6(14)	147,152	8	217,260	11
2220	Other payables to related parties	7	29,835	2	-	-
2230	Current tax liabilities	4(15),6(22)	694	-	691	-
2280	Lease liabilities-current	4(13),6(11)(24),7	4,349	-	389	-
2320	Long-term liabilities due within one year or one business cycle	4(18),6(15)(24)	61,425	3	42,114	2
2399	Other current liabilities		2,872	-	3,405	-
21xx	Total current liabilities		880,047	48	947,831	47
Non-current liabilities
2540	Long-term borrowings	4(18),6(15)(24)	106,028	6	59,806	3
2570	Deferred tax liabilities	4(15),6(22)	294	-	326	-
2580	Lease liabilities-non-current	4(13),6(11)(24),7	4,854	-	79	-
2622	Other	7	119,342	7	-	-
2645	Guarantee deposits		172	-	170	-
2600	Other non-current liabilities	6(16)	-	-	18,588	1
25xx	Total non-current liabilities		230,690	13	78,969	4
2xxx	Total liabilities		1,110,737	61	1,026,800	51
Equity
3110	Common stock		804,993	45	804,993	40
3200	Capital surplus		-	-	-	-
3300	Retained earnings
3310	Legal reserve		-	-	-	-
3320	Special reserve		54,591	3	54,591	3
3350	Accumulated deficit		(161,715)	(9)	(229,885)	(12)
3400	Other equity		(76,970)	(4)	(80,298)	(4)
31xx	Total equity attributable to owners of the parent		620,899	35	549,401	27
35xx	Equity attributable to former owner of business combination under common control				366,207	18
36xx	Non-controlling interests		76,245	4	82,806	4
3xxx	Total equity		697,144	39	998,414	49
2-3xxx	Total liabilities and equity		$ 1,807,881	100	$ 2,025,214	100

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

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

	Notes	2025		2024(Restated)
		Amount	%	Amount	%
4000	Operating revenue	4(16),6(19)	$ 833,212	100	$ 962,465	100
5000	Operating costs	6(6)	(738,527)	(89)	(930,217)	(97)
5900	Gross profit from operations		94,685	11	32,248	3
	Operating expenses
6100	Selling expenses		(73,886)	(9)	(75,102)	(7)
6200	Administrative expenses		(92,803)	(11)	(100,170)	(10)
6300	Research and development expenses		(33,068)	(4)	(40,185)	(4)
6450	Expected credit impairment gains (losses)	6(4)(5)	3,387	-	4,648	-
6000	Total operating expenses	7	(196,370)	(24)	(210,809)	(21)
6900	Operating gains (losses)		(101,685)	(13)	(178,561)	(18)
	Non-operating income and expenses
7100	Interest income		2,285	-	1,463	-
7010	Other income	4(19),6(20)	275,759	33	10,651	1
7020	Other gains and losses, net	6(20)	(45,699)	(5)	155,322	16
7050	Financial costs	4(18),6(20),7	(20,797)	(2)	(27,992)	(3)
7060	Share of profit (loss) of associates and joint ventures accounted for using equity method, net	6(7)	-	-	-	-
7000	Total non-operating income and expenses		211,548	26	139,444	14
7900	Loss before income tax		109,863	13	(39,117)	(4)
7950	Income tax expenses	4(15),6(22)	(10,890)	(1)	(37,884)	(4)
8200	Net loss for the period		98,973	12	(77,001)	(8)
	Other comprehensive income (loss)	6(21)
8310	Items that will not be reclassified subsequently to profit or loss
8316	Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income		(2,731)	-	(4,994)	(1)
8360	Items that may be reclassified subsequently to profit or loss
8361	Exchange differences on translation of foreign financial statements		5,240	1	20,984	2
8300	Total other comprehensive income (loss)		2,509	1	15,990	1
8500	Total comprehensive income (loss)		$ 101,482	13	$ (61,011)	(7)
8600	Net income (loss) attributable to:
8610	Shareholders of the parent		$ 98,715	12	$ (155,877)	(16)
8615	Former owner of business combination under common control		-	-	6,990	1
8620	Non-controlling interests		258	-	71,886	7
			$ 98,973	12	$ (77,001)	(8)
8700	Comprehensive income (loss) attributable to:
8710	Shareholders of the parent		$ 102,043	13	$ (138,323)	(15)
8715	Former owner of business combination under common control		-	-	7,027	1
8720	Non-controlling interests		(561)	-	70,285	7
			$ 101,482	13	$ (61,011)	(7)
	Loss per share	6(23)
9750	Basic loss per share		$	1.23	$	(1.94)

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

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	Common Stock	Capital Surplus	Retained Earnings			Other Equity		Total Equity Attributable to Owners of the Parent	Equity attributable to former owner of business combination under common control	Non-controlling Interests	Total Equity
			Legal Reserve	Special Reserve	Accumulated Deficit	Exchange Differences on Translation of Foreign Financial Statements	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income
Balance at January 1, 2024 (Restated)	$ 804,993	$ 427,964	$ 37,533	$ 54,591	$(539,505)	$(97,852)	$-	$ 687,724	$ 359,180	$ 12,521	$ 1,059,425
Appropriation and distribution of 2023 retained earnings
Legal reserve to cover losses	-	-	(37,533)	-	37,533	-	-	-	-	-	-
Other changes in additional paid-in capital
Capital surplus used for offsetting deficit	-	(427,964)	-	-	427,964	-	-	-	-	-	-
Net loss for 2024	-	-	-	-	(155,877)	-	-	(155,877)	6,990	71,886	(77,001)
Other comprehensive income for 2024	-	-	-	-	-	21,050	(3,496)	17,554	37	(1,601)	15,990
Balance at December 31, 2024	$ 804,993	$-	$-	$ 54,591	$(229,885)	$(76,802)	$(3,496)	$ 549,401	$ 366,207	$ 82,806	$ 998,414
Balance at January 1, 2025	$ 804,993	$-	$-	$ 54,591	$(229,885)	$(76,802)	$(3,496)	$ 549,401	$ 366,207	$ 82,806	$ 998,414
Net income for 2025	-	-	-	-	98,715	-	-	98,715	-	258	98,973
Other comprehensive income for 2025	-	-	-	-	-	5,240	(1,912)	3,328	-	(819)	2,509
Reorganization	-	-	-	-	(30,545)	-	-	(30,545)	(366,207)	-	(396,752)
Changes in non-controlling interests (Note)	-	-	-	-	-	-	-	-	-	(6,000)	(6,000)
Balance at December 31, 2025	$ 804,993	$-	$-	$ 54,591	$(161,715)	$(71,562)	$(5,408)	$ 620,899	$-	$ 76,245	$ 697,144

(Note) The Company's subsidiary, Taiwan GPP Inc., has approved a distribution of cash dividends in the amount of NT$20,000 thousand from the legal reserve, as resolved by the Annual General Meeting of Shareholders on June 26, 2025.

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

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	2025	2024(Restated)
Cash flows from operating activities:
Net Loss before tax	$ 109,863	$ (39,117)
Adjustments:
Adjustments to reconcile profit (loss) not affecting cash flow
Depreciation expense	103,853	114,295
Amortization expense	3,021	4,680
Expected credit impairment losses (gains)	(3,387)	(4,648)
Net gain on financial assets at fair value through profit or loss	(278)	-
Financial costs	20,006	25,669
Interest income	(2,285)	(1,463)
Dividend Income	(268)	-
Losses on disposals of property, plant and equipment	193	4,896
Gain on disposal of non-current assets held for sale	-	(152,983)
Losses (gains) on disposal of investments	(781)	-
Impairment loss on non-financial assets	10,400	-
Profit from lease modification	33,695	-
Accumulated Depreciation to Other Income	(3,606)	-
Changes in operating assets and liabilities
(Increase) Decrease in Contract assets	(371)	1,443
(increase) Decrease in notes and accounts receivable	32,087	71,930
(Increase) Decrease in Inventories	49,869	51,168
(Increase) Decrease in Other current assets	12,640	3,102
Increase (Decrease) in Contract liabilities	303	(6,313)
Increase (Decrease) in Notes payable	(62,423)	5,221
Increase (Decrease) in Other payables	(80,298)	6,983
Increase (Decrease) in Other payables to related parties
(including non-current)	149,177	-
Increase (Decrease) in Other current liabilities	(533)	(1,835)
Cash inflow (outflow) generated from operations	370,877	83,028
Income tax paid	(2,336)	569
Net cash inflow from operating activities	368,541	83,597

(continued)

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	2025	2024(Restated)
Cash flows from investing activities:
Acquisition of financial assets at fair value through other comprehensive income or loss	$ -	$ (9,900)
Acquisition of Financial Assets at Fair Value through Profit or Loss	(11,861)	-
Disposal of financial assets at fair value through profit or loss	8,069	-
Share capital from acquisition of subssidiaries	(380,671)	-
Acquisitions of financial assets at amortized cost	(19,991)	(60,048)
Proceeds from disposal of non-current assets held for sale	-	366,515
Acquisitions of property, plant and equipment	(10,157)	(26,538)
Disposal of property, plant and equipment	573	8,620
Decrease in refundable deposits	(6,396)	2,112
Increase in other non-current assets-others	(269)	(1,568)
Dividends received	268	-
Interest received	2,212	1,451
Net cash outflow from investing activities	(418,223)	280,644
Cash flows from financing activities:
Increase in short-term borrowings	390,230	362,859
Decrease in short-term borrowings	(376,990)	(455,769)
Proceeds from long-term borrowings	152,919	61,626
Repayments of long-term borrowings	(87,565)	(247,339)
Repayment of the principal portion of lease liabilities	(4,470)	(4,525)
Increase in other noncurrent liabilities	(18,586)	626
Interest paid	(19,742)	(23,412)
Change in non-controlling interest	(6,000)	-
Net cash inflows (outflows) from financing activities	29,796	(305,934)
Effect of exchange rate changes	(8,913)	(8,187)
Increase (decrease) in cash and cash equivalents	(28,799)	50,120
Beginning balance of cash and cash equivalents	185,105	134,985
Ending balance of cash and cash equivalents	$ 156,306	$ 185,105

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Company history

HY Electronic (Cayman) Limited (the “Company”). was incorporated in 2009 in the Cayman Islands. The Company was originally 100% owned by Top Mission Limited. Multi-Glory Services Inc. has then become the parent company as some shares were transferred from Top Mission Limited to Multi-Glory Services Inc. in October 2016. The Company engages in the manufacture and sale of rectifiers, diode, and related semiconductor components.

The Company's shares have been listed on the Taiwan Stock Exchange since September 26, 2017.

Yangzhou HY Technology Development Co., Ltd. (hereinafter referred to as “Yangzhou HY”), a subsidiary of the Company, acquired 100% of the equity interest in Yangzhou Hongyu Electronic Technology Co., Ltd. from a related party, Ms. Fang Hsin-Yi, through a cash transaction, with October 23, 2025 as the acquisition date. This transaction is a reorganization under common control. Please refer to Note 6(7) for further details.

Approval date and procedures of the consolidated financial statements:

These consolidated financial statements were authorized for issue by the Board of Directors on March 10, 2026.

Application of Newly Issued and Revised Standards and Their Interpretations:

(1) Applicable to International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), International Financial Reporting Interpretations Committee (IFRIC) and Standing Interpretation Committee (SIC) (“IFRS”) as endorsed and issued into effect by the Financial Supervisory Commission (“FSC”)

The application of any effective IFRS revised, approved and issued by FSC will not result in any major change of any accounting policy of the Group.

13 -

(2) Applicable IFRSs Approved by FSC in 2026

Newly Issued/ Amended/ Revised/ Standards and Their Interpretations	Effective Date Established by IASB
Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7	January 1, 2026
Nature-dependent Electricity Contracts - Amendments to IFRS 9 and IFRS 7	January 1, 2026
Annual Improvements to IFRS Accounting Standards - Volume 11	January 1, 2026

The Group continue to assess the effects of the amendment to the aforementioned accounting standard and interpretation on the financial position and operating results as of the approval and issuing date of the consolidated financial statement herein and the effects will be disclosed when the assessment is completed.

(3) IFRSs those have been issued by the International Accounting Standards Board (IASB) but not been endorsed and issued by the FSC yet

Newly Issued/ Amended/ Revised/ Standards and Their Interpretations	Effective Date Established by IASB (Note 1)
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28	To be determined by IASB
IFRS 18 Presentation and Disclosure in Financial Statements	January 1st, 2027 (Note 2)
IFRS 19 Subsidiaries without Public Accountability: Disclosures	January 1st, 2027
Translation to a Hyperinflationary Presentation Currency - Amendments to IFRS 21	January 1st, 2027

Note 1: Unless otherwise indicated, the above newly issued/ amended/ revised standards or interpretations shall be effective for the annual periods upon respective effective dates.

Note 2: On September 25th, 2025, the FSC announced in a press release that International Financial Reporting Standard 18 (hereinafter referred to as IFRS 18) would apply to the publicly listed companies from the fiscal year of 2028. In addition, if a company needs to adopt IFRS 18 in advance, they may adopt it in advance after being approved by the FSC.

The Group continue to assess the effects of the amendments to the aforementioned accounting standards and interpretations on the financial position and performance as of the approval and issuing date of the consolidated financial report herein and the effects will be disclosed when the assessment is completed.

Summary of material accounting policies:

The material accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(1) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as "the Regulations") and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C.

(2) Basis of preparation

A. Basis of measurement

Except for financial instruments measured at fair value, the consolidated financial statements have been prepared under the historical cost basis. For assets, it refers to the cash, cash equivalents, or fair value of consideration paid to acquire the asset. For liabilities, it refers to the amount received when assuming the obligation, or the amount expected to be paid to settle the liability.

B. Business Merger under Joint Control

When a business combination arises from the transfer of equity interests in entities under the control of a shareholder who controls the combining entities, the combination is accounted for as if it had occurred at the beginning of the earliest comparative period presented in the financial statements, or at the date when common control was established, whichever is later. Comparative information is restated accordingly. The assets and liabilities acquired under such common control are recognized at their carrying amounts as reflected in the consolidated financial statements of the controlling shareholder. No goodwill is recognized, nor is any excess of the consideration transferred over the share of the fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the carrying amounts under common control.

In preparing the consolidated balance sheet, the related equity arising from the acquisition is presented as "Equity attributable to the predecessor under common control." In preparing the consolidated statement of comprehensive income, the results of the previously controlling shareholder are presented as "Net income (loss) attributable to the predecessor under common control."

(3) Basis of consolidation

A. Basis for preparation of consolidated financial reports:

The Group include all subsidiaries as entities in the preparation of the consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed or entitled to variable returns from their involvement in the entity and have the ability to affect those returns through their power over the entity. Subsidiaries are included in the consolidated financial statements from the day when the Group obtains control over them, and are excluded when the Group loses control.

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Inter-company transactions, balances, and unrealized gains and losses within the consolidated entities have been eliminated. Necessary adjustments have been made to the subsidiaries' accounting policies, which are consistent with those adopted by the Group.

The various components of profit or loss and other comprehensive income are attributable to the owners of the parent company and non-controlling interests; the total comprehensive income is also attributable to the owners of the parent company and non-controlling interests, even if the resulting loss of non-controlling interests occurs.

If the change in the ownership of a subsidiary does not result in the loss of control (transaction with non-controlling interests), it is treated as an equity transaction, that is, as a transaction with owners. The difference between the adjusted amount of noncontrolling interests and the fair value of the consideration paid or received is directly recognized as equity.

When the consolidated entities lose control over a subsidiary, the remaining investment in the former subsidiary is remeasured at fair value and recognized as the fair value of the originally recognized financial asset or the cost of the originally recognized investment in an affiliate or joint venture, and the difference between the fair value and the carrying amount is recognized in profit or loss for the period. All amounts previously recognized in other comprehensive income and related to that subsidiary will be accounted for in the same manner as the Group directly dispose of the related assets or liabilities, i.e., if a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss upon disposal of the related assets or liabilities, the gain or loss is reclassified from equity to profit or loss when the Group loses control over the subsidiary.

B. List of subsidiaries in the consolidated financial statements:

Name of Investor	Name of subsidiary	Abbreviation	Nature of business	Shareholding %
				December 31,2025	December 31,2024	Note
The Company	Jetper Technology Limited	JETPER	General investment	100%	100%
The Company	HY Technology Development (H.K.) Co., Limited	HY(HK)	Sale of rectifier, diode and other semiconductors	-	-	Note 1
The Company	Taiwan GPP Inc.	Taiwan GPP	Sale of wafer, rectifier and other semiconductor	70%	70%
JETPER	Yangzhou HY Technology Development Co., Limited	YANGZHOU HY	manufacture and sale of rectifier and other semiconductors	100%	100%
Taiwan GPP	Yangzhou GPP Inc.	YANGZHOU GPP	Sale of semiconductor rectifier, semiconductors, components and parts	-	-	Note 2
YANGZHOU HY	Yangzhou Hongyu Electronic Technology Co., Ltd.	Hongyu Tech.	Sale of semiconductors, components and parts	100%	-	Note 3

Note 1: HY Technology Development (HK) Limited was deregistered in accordance with a resolution of its board of directors on September 29, 2023. The Hong Kong Inland Revenue Department and the Hong Kong Companies Registry agreed to deregister and declare the dissolution of the company foregoing on December 28, 2023 and May 31, 2024 separately and relevant documents of the company were filed on August 5, 2024.

Note 2: Yangzhou GPP Inc. was liquidated according to a resolution of the board of directors of Taiwan GPP Inc. on May 24, 2024 and its business license cancellation was completed on June 28, 2024.

Note 3: Yangzhou HY, one of the subsidiaries of the Company purchased 100% of the equities of Yangzhou Hongyu Electronic Technology Co., Ltd. from a related person, Ms. Fang Xinyi on October 23rd, 2025. And Yangzhou Hongyu Electronic Technology Co., Ltd. was dissolved after the equity transfer. The foregoing transaction is organizational restructuring under joint control and should be regarded as a business acquisition from the start. The book value method was adopted to restate the comparative consolidated financial reports of the previous period. When preparing the consolidated financial report for the year of 2025, the Company and its subsidiaries have retrospectively restate the consolidated financial report for the year of 2024.

C. Subsidiaries excluded from consolidation financial statements: None.

(4) Foreign currencies

The parent company-only financial statement of each consolidated entity are measured in the functional currency of the entity. When preparing consolidated financial statements, the operational results and financial performance of each consolidated entity are translated into New Taiwan Dollar.

When preparing parent company-only financial statement of each consolidated entity, for entities transacting in currencies other than the functional currency (foreign currencies), the initial recognition is presented at the exchange rate on the transaction date. At the end of each reporting period, foreign currency monetary items are translated based on the closing exchange rate on that date, and the exchange difference is recognized as the current profit or loss. For foreign currency non-monetary items measured at fair value, the fair value as of the determination date is translated based on the exchange rate on that day. If the fair value change is recognized in profit or loss, the resulting exchange difference is recognized in current profit or loss; if the fair value change is recognized in other comprehensive income, the resulting exchange difference is recognized in other comprehensive income. Foreign currency non-monetary items measured at historical cost are not translated.

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For the preparation of the consolidated financial statements, the assets and liabilities of the foreign operations are translated into New Taiwan Dollars at the closing exchange rates as of the end of each reporting period. Revenue and expense items are translated at the average exchange rates for the period. Any resulting exchange differences are recognized in other comprehensive income and accumulated in equity under the exchange differences resulting from translating the financial statements in foreign operations (and appropriately allocated to non-controlling interests).

(5) Classification of current and non-current assets and liabilities

Current assets include cash and cash equivalents (excluding those assets that are restricted from being exchanged or used to settle liabilities within 12 months after the reporting period), assets held primarily for the purpose of trading, assets expected to be realized within 12 months after the reporting period or expected to be realized, sold, or consumed in the ordinary course of business, and assets that are not classified as current assets are classified as non-current assets.

Current liabilities include liabilities held primarily for the purpose of trading, liabilities expected to be settled within 12 months after the reporting period or expected to be settled in the ordinary course of business, and liabilities with a repayment deadline that cannot be unconditionally deferred for at least 12 months after the reporting period, and liabilities that are not classified as current liabilities are classified as non-current liabilities.

(6) Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand deposits with banks, and shortterm, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Bank certificate deposits with an original maturity of three months or less, held for the purpose of meeting short-term cash commitments rather than for investment or other purposes, are considered cash equivalents as they are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value, and therefore are reported as cash and cash equivalents.

(7) Financial instruments

Financial assets and financial liabilities are recognized on the consolidated balance sheet when the contract terms of the instrument become effective for the Group.

Upon initial recognition of financial assets and financial liabilities, if the financial assets or financial liabilities are not measured at fair value through profit or loss, they are measured at fair value plus transaction costs directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs directly attributable to the acquisition or issue of financial assets or financial liabilities measured at fair value through profit or loss are immediately recognized in profit or loss.

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A. Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

(a) Measurement Categories

The financial assets held by the Company and its subsidiaries comprise financial assets at fair value through profit or loss, financial assets at amortized cost, and investments in equity instruments designated at fair value through other comprehensive income.

i. Financial assets measured at fair value through profit or loss

The financial assets measured at fair value through profit or loss include the mandatory financial assets measured at fair value through profit or loss and those designated measured at fair value through profit or loss.

The mandatory financial assets measured at fair value through profit or loss include the investments in equity instruments not designated measured at fair value through other comprehensive income and the investments in debt instruments not classified as those measured at amortized cost or at fair value through other comprehensive income of the Company and its subsidiaries.

The financial assets measured at fair value through profit or loss are measured at fair value, and the profits or losses arising from their remeasurement (including any dividends or interests generated by the financial assets) are recognized in Profits and Losses.

ii. Measured at amortized cost

The types of financial assets held by the Group are measured at amortized cost, referring to those in alignment with the following criteria: :

(i) Held under an operating model aimed at holding financial instruments to collect contractual cash flows.

(ii) Contractual terms generating cash flows on specified dates that are solely used for paying interest on the principal and outstanding principal amounts.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Cash and cash equivalents include highly liquid time deposits that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, held for the purpose of meeting short-term cash commitments.

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iii. Fair value through other comprehensive income (FVOCI)

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

(b) Impairment of financial assets

On each balance sheet date, the Group measures impairment losses on financial assets measured at amortized cost (including accounts receivable) based on expected credit losses.

Allowance for credit losses is recognized for accounts receivable based on expected credit losses over the duration. For other financial assets, the Group first assess whether the credit risk has increased significantly since initial recognition. If there is no significant increase, allowance for credit losses is recognized based on 12-month expected credit losses; if there is a significant increase, allowance for credit losses is recognized based on expected credit losses over the duration.

Expected credit losses are determined using a weighted average of credit losses weighted by the risk of default. The 12-month expected credit losses represent the expected credit losses arising from default events that may occur within 12 months after the reporting date, while the lifetime expected credit losses represent the expected credit losses arising from default events throughout the expected remaining life of the financial instrument. Impairment losses on all financial assets are recognized by reducing their carrying amounts through an allowance account.

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

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The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

B. Financial Liabilities

(a) Subsequent Measurement

All financial liabilities of the Group are measured at amortized cost using the effective interest method.

(b) Derecognition of Financial Liabilities

When derecognizing financial liabilities, any difference between the carrying amount and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(8) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(9) Noncurrent Assets Held for Sale

Noncurrent assets or disposal groups are classified as noncurrent assets held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the noncurrent asset held for sale is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Noncurrent assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Recognition of depreciation would cease.

(10) Property, plant and equipment

Property, plant, and equipment are measured at cost less accumulated depreciation and accumulated impairment. Cost refers to the cash, cash equivalents, or fair value of consideration paid or payable for the acquisition or construction of assets, and the estimated costs of dismantling and removing the assets. When significant components of property, plant, and equipment have different useful lives, they are treated as separate items.

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Depreciation is calculated by deducting the residual value from the cost of the asset (or the amount of any other alternative costs) to arrive at the depreciable amount, using the straightline method based on the estimated useful lives of the individual components of property, plant, and equipment. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets, or over the lease term if shorter.

The estimated useful lives, residual values, and depreciation methods are reviewed at the end of each fiscal year, with any changes in estimates being accounted for prospectively.

The costs incurred when a part of property, plant, and equipment is replaced are recognized as an asset if the future economic benefits are likely to flow into the Group, with the carrying amount of the replaced portion being derecognized. Routine maintenance costs for property, plant, and equipment are recognized in profit or loss when incurred.

The gain or loss arising from the disposal or retirement of property, plant, and equipment is determined by the difference between the disposal proceeds and the carrying amount, and is recognized as a net amount in the profit or loss under other gains and losses.

(11) Investment properties

Investment properties refer to properties held to earn rentals, for capital appreciation, or both, including office buildings or land held under operating leases. Investment properties are measured at cost less accumulated depreciation and accumulated impairment, with initial recognition and subsequent measurement based on the same principles as those for property, plant, and equipment.

Profits or losses resulting from the disposal of investment properties are determined by the difference between the disposal proceeds and the carrying amount, and are recognized as net in the profit or loss under other gains and losses.

(12) Impairment of tangible and intangible assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

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The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(13) Lease

The Group evaluates whether a contract is, or contains, a lease at the inception date of the contract.

A. As a Lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

The lessor recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

B. As a Lessee

Except for leases of low-value assets or short-term leases, the lease payment is recognized as an expense on a straight-line basis over the lease term starting from the lease commencement date. For other leases, the right-of-use assets and lease liabilities are recognized at the lease commencement date.

Right-of-use assets are initially measured at cost (including lease liabilities initially measured, lease payments paid before the commencement date, less lease inducements received, original direct costs, and estimated costs of recovering the underlying asset) and subsequently measured at cost less

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accumulated depreciation and accumulated impairment losses, with adjustments to the remeasured amount of lease liabilities. Right-of-use assets are separately presented in the balance sheet.

Depreciation of right-of-use assets is recognized on a straight-line basis, starting from the lease commencement date to the useful life expires or the lease term expires, whichever is earlier.

Lease liabilities are initially measured at the present value of lease payments (including exercise prices of fixed payments, and penalties for termination already reflected in the lease term, less lease inducements). If the rate implicit is determinable, lease payments are discounted at the rate; otherwise, the lessee's incremental borrowing rate are used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized during the lease term. When changes in the assessment result in changes in future lease payments, the Group will reassess lease liabilities and adjust corresponding right-of-use assets in the remeasurement; however, if the carrying amount of the right-of-use asset has been reduced to zero, the remaining remeasurement amount is recognized in profit or loss. Lease liabilities are separately presented in the consolidated balance sheet.

Lease agreements for leases with variable lease payments based on changes in an index or rate are recognized as expenses in the period incurred.

(14) Employee benefits

For defined contribution retirement benefit plans, payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution. For defined benefit retirement benefit plans, the cost of providing benefit is recognized based on actuarial calculations.

Employees' compensation and directors' remuneration are recognized as expenses and liabilities when there are legal or constructive obligations and the amount can be reasonably estimated. If there is a difference between the amount actually distributed and the estimated amount, it shall be treated as a change in accounting estimates. If employee remuneration is paid in shares, the basis for calculating the number of shares is the closing price on the day before the resolution of the Board of Directors.

(15) Income tax

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

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Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred income tax expense is recognized for the temporary differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax assets and liabilities are measured using the tax rates expected to apply when the temporary differences reverse, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred income tax assets and liabilities are offset only when there is a legally enforceable right to offset current income tax assets and liabilities, they relate to the same taxable entity and are levied by the same taxation authority, or they belong to different taxable entities, but there is an intention to settle the current tax liabilities and assets on a net basis or realize the assets and repay the liabilities simultaneously.

Unused tax losses, income tax credits, and deductible temporary differences are recognized as deferred tax assets to the extent that it is probable that future taxable profits will be available for use within the scope of their offset. They are reassessed at each reporting date, with any reduction for the extent to which it is no longer probable that the related tax benefit will be realized.

The portion of corporate income tax levied on undistributed profits in the current year is recognized as income tax expense on undistributed profits only after the actual earnings distribution is approved by the shareholders' meeting in the following year.

(16) Revenue recognition

After the Group identify performance obligations in customer contracts, the transaction price is allocated to each performance obligation and revenue is recognized when each performance obligation is satisfied.

If the interval between the transfer of goods or services and the receipt of consideration is less than one year, the transaction price is not adjusted for significant financial components of the contract.

Sales of products

The Group recognizes revenue from the sale of product when the product is shipped, when it arrives at the customer's designated location, or when the promised product is delivered to the customer and the customer obtains control (i.e., the customer's ability to direct the use of the product and obtain substantially all of the residual benefits of the product), rectifiers, diode, and related semiconductor components. Revenue is recognized based on the contracted prices.

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The credit period for the sales of products of The Group ranges from 30 to 210 days. For most of the contracts, accounts receivable is recognized when the control of products is transferred to customer, and the Group has the unconditional right to receive consideration. These accounts receivable are usually short term and do not have significant financial components. However, for some contracts, a portion of the consideration is received from the customer prior to the transfer of the merchandise, and the Group has an obligation to transfer the merchandise subsequently, so a contract liability is recognized.

(17) Earnings Distribution

Dividends distributed to the shareholders of the Company are recognized in the financial statements when they are declared by the shareholders' meeting. Cash dividends are recognized as liabilities, while stock dividends are recognized as stock dividends to be distributed and transferred to common stock upon the issuance date of the new shares.

(18) Borrowing cost

The borrowing costs that can be directly attributed to the acquisition, construction, or production of qualifying assets are considered part of the cost of that asset, until almost all necessary activities to prepare the asset for its intended use or sale have been completed.

Specific borrowings, such as investment income earned from temporary investments made before the occurrence of qualifying capital expenditures, are deducted from the borrowing costs that meet the capitalization criteria.

Apart from the above, all other borrowing costs are recognized as profit or loss in the period in which they occur.

(19) Government grants

The Group recognizes an unconditional government grant related to wages and salaries in profit or loss as other income when the grant becomes receivable. Grants that compensate the Group for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the expenses or losses are recognized.

(20) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group's chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

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Significant accounting assumptions and judgments, and major sources of estimation uncertainty

In preparing these consolidated financial statements, management has made judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

(1) Impairment loss of trade receivables

The Group has estimated the loss allowance of trade receivables based on the risk of a default occurring and the rate of expected credit loss. The Group has considered historical experience, current economic conditions and forward-looking information at the reporting date to determine the assumptions to be used in calculating the impairments and the selected inputs.

(2) Valuation of inventory

Since inventory should be measured at the lower of cost or net realizable value, the Company reevaluates the amount of inventory that is deteriorating from wear and tear, obsolescence or has no market value at the reporting date. The cost of those inventories is then reduced to their net realizable value. The inventory valuation is mainly influenced by market demand and prices within a specific period in the future, which may significantly affect the value of the inventory due to rapid changes in the industry.

Explanation of significant accounts

(1) Cash and cash equivalent

	December 31,2025	December 31,2024
Cash on hand and petty cash	$ 1,622	$ 1,673
Checking and demand deposits	154,684	183,432
	$ 156,306	$ 185,105

All bank deposits of the Group for a designated or restricted purpose as of December 31, 2025 and that of 2024 are recognized in "Financial Assets Measured at Amortized Cost", please refer to note 6(3).

(2) Financial assets at fair value through profit or loss – current

	December 31,2025	December 31,2024
Non-derivative financial assets - current
Equity instruments
Current restricted bank deposits- bank deposits	$ 4,569	$ -

No guarantee or pledge is provided to the financial assets measured at fair value through profit or loss mentioned above.

(3) Financial assets at amortized cost

	December 31,2025	December 31,2024
Current items:
Time deposits	$ 65,000	$ 65,000
Current restricted bank deposits-bank deposits	20,039	48
	$ 85,039	$ 65,048

As of December 31, 2025 and that of 2024 the annual interest rate of time deposits with original maturities of more than 3 months was 1.7%.

For the financial assets measured at amortized costs of the Group been pledged as collateral for its short-term and long-term borrowings, please refer to Note 8.

(4) Notes receivable and accounts receivable

Notes receivable	December 31,2025	December 31,2024
Arising from business operations	$ 22,901	$ 22,335
Less: Loss allowance	-	-
Net Notes receivable	$ 22,901	$ 22,335
Accounts receivable	December 31,2025	December 31,2024
Arising from business operations	$ 233,835	$ 266,489
Less: Loss allowance	(151)	(3,651)
Net Trade receivables	$ 233,684	$ 262,838

The credit periods of the Group for the sale of goods range from 30 to 210 days and the accounts receivable are not interest-bearing. The Group uses the simplified approach as indicated in IFRS 9 to recognize the loss allowances for receivables measured in accordance with lifetime expected credit losses. For the purpose of the measurement, these accounts receivable are grouped based on the common feature of credit risk which represents the customers' ability to pay all amounts due under the terms of their contracts and are incorporated with forward-looking information including general economic information and related industrial information.

The following table details the loss allowance of notes receivable and accounts receivable:

December 31, 2025

	Not past due	Overdue 1~90 days	Overdue 91~180 days	Overdue 181~365 days	Overdue 365 days	Total
Gross carrying amount	$ 250,718	$ 5,701	$ 181	$ 90	$ 46	$ 256,736
Allowance for losses (expected credit losses over the remaining period of existence)	(63)	(9)	(7)	(26)	(46)	(151)
Amortized cost	$ 250,655	$ 5,692	$ 174	$ 64	$ -	$ 256,585

The expected credit losses of notes receivable and accounts receivable of the Group in 2025 are analyzed as follows:

Region	Days Overdue	Weighted Average Expected Rate of Credit Losses
Taiwan	Not past due	-
Mainland of China	Not past due	0.03%
	Overdue 1~90 days	0.16%
	Overdue 90~180 days	4.42%
	Overdue 181~365 days	28.89%
	Overdue 365 days	100%

December 31, 2024

	Not past due	Overdue 1~90 days	Overdue 91~180 days	Overdue 181~365 days	Overdue 365 days	Total
Gross carrying amount	$ 266,533	$ 19,269	$ 1,329	$ 1,654	$ 39	$ 288,824
Allowance for losses (expected credit losses over the remaining period of existence)	(206)	(1,344)	(760)	(1,302)	(39)	(3,651)
Amortized cost	$ 266,327	$ 17,925	$ 569	$ 352	$ -	$ 285,173

The expected credit losses of notes receivable and accounts receivable of the Group in 2024 are analyzed as follows:

Region	Days Overdue	Weighted Average Expected Rate of Credit Losses
Taiwan	Not past due	-
	Overdue 1~90 days	-
Mainland of China	Not past due	0.10%
	Overdue 1~90 days	7.02%
	Overdue 90~180 days	57.19%
	Overdue 181~365 days	78.72%
	Overdue 365 days	100%

The movement in the allowance for notes receivable and accounts receivable were as follows:

	2025	2024
Balance at January 1	$ 3,651	$ 2,527
Impairment losses recognized (reversed)	(3,387)	1,054
Amounts written off	-	(23)
Foreign exchange gains(losses)	(113)	93
Balance at December 31	$ 151	$ 3,651

(5) Other receivables

	December 31,2025	December 31,2024
Other receivables	$ 66,381	$ 59,598
Less: Loss allowance	(54,113)	(53,898)
Net Notes receivable	$ 12,268	$ 5,700

The movement in the allowance for other receivables were as follows:

	2025	2024
Balance at January 1	$ 53,898	$ 57,620
Impairment losses recognized (reversed)	-	(5,702)
Foreign exchange gains(losses)	215	1,980
Balance at December 31	$ 54,113	$ 53,898

(6) Inventories

	December 31,2025
	Cost	Allowance for valuation losses	Book value
Finished goods	$ 54,303	$ (10,331)	$ 43,972
Work in process	42,711	(5,735)	36,976
Raw materials	34,118	(6,079)	28,039
Total	$ 131,132	$ (22,145)	$ 108,987
	December 31,2024
	Cost	Allowance for valuation losses	Book value
Finished goods	$ 90,492	$ (19,056)	$ 71,436
Work in process	55,489	(8,846)	46,643
Raw materials	51,377	(10,600)	40,777
Total	$ 197,358	$ (38,502)	$ 158,856

The cost of inventories recognized as expense or loss for the year:

	2025	2024
Cost of the inventories sold	$ 739,004	$ 907,111
Reversal of write-downs	(15,925)	(12,203)
Disposal of inventories	6,498	24,619
Idle capacity costs	6,749	7,785
Others	2,201	2,905
Total	$ 738,527	$ 930,217

Note: As part of inventory that had been recognized as Inventory Write-down was sold by the Company and its subsidiaries, a gain from the reversal of inventory write-down was recorded.

(7) Business combinations

(1) Consideration for the subsidiary transfer

The Company and its subsidiaries concluded an equity transfer agreement with the related party, Ms. Fang Xinyi on September 18th, 2025, whereby, Yangzhou HY, one of the Company's subsidiaries acquired 100% of the equities of Yangzhou Hongyu Electronic Technology Co., Ltd. from Ms. Fang Xinyi in RMB 88,180 thousand and dissolved Yangzhou Hongyu Electronic Technology Co., Ltd. after the equity transfer. The equity transfer registration for the aforementioned transaction was completed on October 23rd, 2025, enabling the Company to gain control over Yangzhou Hongyu Electronic Technology Co., Ltd. that was included in the merged entity as of the acquisition date.

(2) Identifiable net assets acquired

The book value details of the identifiable assets and liabilities of Yangzhou Hongyu Electronic Technology Co., Ltd. obtained on October 23rd, 2025 are stated as follows:

Consideration for the Transfer:
Cash $ 380,671

Book values of identifiable assets acquired and liabilities assumed:
Cash & Equivalent Cash $ 7,548
Other Receivables 5,284
Advance Payments 10,361
Other Current Assets 7,881
Real Estate, Plant and Equipment 354,839
Right-of-use Assets 53,715
Contract Liabilities - Current (4,225)
Other Payables (85,277) 350,126
Debit Retained Earnings $ 30,545

As this merger belongs to organizational restructuring under joint control, the portion that the consideration paid by the Company and its subsidiaries for the transfer exceeds the book value of the identifiable net assets of Yangzhou Hongyu Electronic Technology Co., Ltd. is Debit Retained Earnings of RMB 30,545 thousand.

(8) Non-current assets held for sale

On April 23rd, 2024, the Board of Directors of Taiwan GPP Inc., one of subsidiaries of the Company, adopted a resolution to dispose of the land and buildings of the Yongfeng Plant in Taoyuan City. In addition, on May 8th, 2024, a resolution was adopted by an extraordinary general meeting of the shareholders of Taiwan GPP Inc. to reclassify the land aforementioned as a non-current asset for sale.

On May 20, 2024, the Company and its subsidiaries entered into a real estate sale and purchase agreement with Hongze Industrial Co., Ltd. for a total consideration of NT$370,000 thousand. The transaction was completed in the third quarter of 2024, resulting in a gain on disposal of NT$152,983 thousand. Please refer to Note 6(20) for further details.

(9) Financial assets at fair value through other comprehensive income

	December 31,2025	December 31,2024
Non-derivatives financial assets-non-current
Equity instruments
Unlisted company stocks	$ 2,175	$ 4,906

The board of directors of the Company decided to invest $9,900 thousand for 900,000 shares in La Strong Precision Industry Co., Ltd. in April 2024. These equity instruments held by our Company are strategic investments and are not held for any trading purpose; therefore, they are measured at fair value through other comprehensive profit and loss.

(10) Property, plant and equipment

Own use	December 31,2025			December 31,2024
			$ 984,289			$ 1,077,405
Cost	Land	Buildings	Machinery and equipment	Other facilities	Leasehold improvement	Construction in progress	Total
Balance on January 1, 2025	$ 76,597	$ 627,467	$ 812,099	$ 154,362	$ 378,437	$ 1,209	$ 2,050,171
Additions	-	3,815	999	874	-	-	5,688
Disposal	-	-	(35,983)	(7,725)	-	-	(43,708)
Reclassification	-	-	-	-	(2,349)	-	(2,349)
Transfer from/(to) other assets	-	-	(1,727)	-	-	-	(1,727)
Reclassified to Leasehold Improvements	-	-	-	-	1,214	(1,214)	-
Exchange rate difference	-	2,179	3,195	560	1,516	5	7,455
Balance on December 31, 2025	$ 76,597	$ 633,461	$ 778,583	$ 148,071	$ 378,818	$ -	$ 2,015,530
Depreciation and impairments loss	Land	Buildings	Machinery and equipment	Other facilities	Leasehold improvement	Construction in progress	Total
Balance on January 1, 2025	$ -	$ 145,848	$ 608,827	$ 129,146	$ 88,945	$ -	$ 972,766
Depreciation	-	26,552	43,647	6,740	21,162	-	97,831
Disposal	-	-	(35,260)	(7,682)	-	-	(42,942)
Transfer from/(to) other assets	-	-	117	-	-	-	117
Accumulated Depreciation to Other Income	-	(3,606)	-	-	-	-	(3,606)
Exchange rate difference	-	1,248	4,019	658	1,150	-	7,075
Balance on December 31, 2025	$ -	$ 170,042	$ 621,350	$ 128,592	$ 111,257	$ -	$ 1,031,241
Cost	Land	Buildings	Machinery and equipment	Other facilities	Leasehold improvement	Construction in progress	Total
Balance on January 1, 2024	$ 158,857	$ 578,642	$ 817,671	$ 165,573	$ 366,053	$ 33,711	$ 2,120,507
Additions	-	4,977	14,956	4,079	-	5,908	29,920
Disposal	-	-	(37,063)	(20,580)	(380)	-	(58,023)
Transfer to Investment property	(12,120)	-	-	-	-	-	(12,120)
Transfer from/(to) other assets	-	-	3,666	-	-	-	3,666
Transfer to Asset held for sale	(70,140)	(19,807)	(14,534)	285	-	-	(104,196)
Reclassification	-	40,124	-	-	-	(40,124)	-
Exchange rate difference	-	23,531	27,403	5,005	12,764	1,714	70,417
Balance on December 31, 2024	$ 76,597	$ 627,467	$ 812,099	$ 154,362	$ 378,437	$ 1,209	$ 2,050,171

Depreciation and impairments loss	Land	Buildings	Machinery and equipment	Other facilities	Leasehold improvement	Construction in progress	Total
Balance on January 1, 2024	$ -	$ 126,923	$ 576,449	$ 133,894	$ 65,236	$ -	$ 902,502
Depreciation	-	25,624	52,092	7,728	21,699	-	107,143
Disposal	-	-	(27,394)	(16,733)	(380)	-	(44,507)
Transfer from/(to) other assets	-	-	2,773	-	-	-	2,773
Transfer to Asset held for sale	-	(11,336)	(14,534)	165	-	-	(25,705)
Exchange rate difference	-	4,637	19,441	4,092	2,390	-	30,560
Balance on December 31, 2024	$ -	$ 145,848	$ 608,827	$ 129,146	$ 88,945	$ -	$ 972,766

A. The estimated useful lives of property, plant and equipment are as follows: Buildings 5~50 years, Machinery and equipment 3~10 years, Other equipment 2~10 years, leasehold improvements 10~20 years.

B. For more information regarding the Group’s property, plant and equipment pledged to others, please refer to Note 8.

C. Reclassification :

(a) Due to Taiwan GPP, a subsidiary of the Group, disposed its land and buildings of the Taoyuan Yongfeng factory, the Group reclassified part of the property, plant and equipment into asset held for sale.

(b) Due to the changes in purpose, the Group reclassified part of the property, plant and equipment into investment property.

(11) Lease agreement

A. Right-of-use assets

	December 31,2025	December 31,2024
Carrying amount of right-of-use assets
Land	$ 55,749	$ 92,223
Buildings	7,546	-
Transportation equipment	1,517	451
	$ 64,812	$ 92,674
	2025	2024
Depreciation of Right-of-use Assets	$ 12,847	$ -
Disposal of Right-of-use Assets	$ 34,989	$ -

	2025	2024
Depreciation of right-of-use asset
Land	$ 1,787	$ 2,180
Buildings	3,773	3,778
Transportation equipment	462	510
	$ 6,022	$ 6,468

B. Lease liabilities

	December 31,2025	December 31,2024
Carrying amount of lease liabilities
Current	$ 4,349	$ 389
Non-current	$ 4,854	$ 79

The Group's discount rate range for lease liabilities was as follows:

	December 31,2025	December 31,2024
Buildings	3.54%	3.46%
Transportation equipment	2.565%-4.78%	3.05%-4.78%

C. Other lease information

	2025	2024
Interest on lease liabilities	$ 358	$ 103
Expenses relating to short-term leases	$ 6,229	$ 7,684
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	$ 168	$ 168

The amounts recognized in the statement of cash flows for the Group was as follows:

	2025	2024
Total cash outflow for leases	$ (4,470)	$ (4,525)

(a) Real estate leases

The leases of factory and office space typically run for a period of two to twenty years, and of right of use of land in China for fifty years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Yangzhou HY, one of subsidiaries of the Company, agreed to terminate related contract with the leaser on August 31st, 2025.

(b) Other leases

The Group leases vehicles and equipment, with lease terms of two to three years. In some cases, the Company has options to purchase the assets at the end of the contract term; in other cases, it guarantees the residual value of the leased assets at the end of the contract term.

Besides, the Group leases facilities such as offices, parking spaces, air conditioners and copy machines, etc., with lease terms of one to three years. These leases are short-term or low-value leases. The Group chooses to apply the exemption requirements and does not recognize its related right-of-use assets and lease liabilities.

For more information regarding the Group’s right-of-use assets pledged to others, please refer to Note 8.

(12) Investment property

	December 31,2025		December 31,2024
Land	$	26,596	$	26,596
Buildings		-		-
	$	26,596	$	26,596
Cost	Land	Building	Sum
Balance as of January 1, 2025 (i.e. balance as of December 31, 2025)	$ 26,596	$ 5,009	$ 31,605
Accumulated depreciation	Land	Building	Sum
Balance as of January 1, 2025 (i.e. balance as of December 31, 2025)	$ -	$ 5,009	$ 5,009
Cost	Land	Buildings	Total
Balance at January 1, 2024	$ 100,476	$ 76,428	$ 176,904
Reclassification from property, plant and equipment	12,120	-	12,120
Reclassification to noncurrent asset held for sale	(86,000)	(71,419)	(157,419)
Balance at December 31, 2024	$ 26,596	$ 5,009	$ 31,605
Accumulated depreciation	Land	Buildings	Total
Balance at January 1, 2024	$ -	$ 26,703	$ 26,703
Depreciation	-	684	684
Reclassification to noncurrent asset held for sale	-	(22,378)	(22,378)
Balance at December 31, 2024	$ -	$ 5,009	$ 5,009

A. The fair value of the investment properties was $39,643 thousand on December 31, 2025. The management of the Group had used the situation of the investment properties and market price that market participants would use in determining the fair value. The valuation was arrived at by reference to market evidence of transaction prices of similar properties. The investment properties were not valued by independent valuators.

B. The estimated useful lives of property, plant and equipment are as follows: Buildings 10-50 years.

C. For more information regarding the Group’s Investment property pledged to others, please refer to Note 8.

(13) Short-term borrowings

Category of loan	December 31,2025		December 31,2024
	Range of interest rates(%)	Amount	Range of interest rates(%)	Amount
Secured bank loans	2.40%~3.95%	$ 372,270	2.32%~4.68%	$ 358,053

For the collateral for short-term borrowings, please refer to Note 8.

(14) Other payables

	December 31,2025	December 31,2024
Accrued payroll	$ 20,030	$ 20,023
Accrued social insurance expense	24,869	26,976
Payables for construction	13,574	11,963
Payables for equipment	638	4,057
Accrued professional service fees	1,992	2,729
Rent payable	162	13,703
Payable borrowings and loans with other	72,596	99,232
Others	13,291	38,577
Total	$ 147,152	$ 217,260

(15) Long-term borrowings

Category of loan	December 31,2025		December 31,2024
	Range of interest rates(%)	Amount	Range of interest rates(%)	Amount
Secured bank loans	2.44%~4.25%	$ 86,755	2.32%~4.34%	$ 57,394
Other borrowings		80,698		44,526
Less: current portions		(61,425)		(42,114)
Total		$ 106,028		$ 59,806

By the manner of entering into a sale-and-leaseback agreement for its machinery and equipment, the Group borrowed funds from the following financial leasing entities: IBT International Leasing Corp., Shin Kong Leasing (Suzhou) Co., Ltd., Chailease International Finance Corp., Maxwell Financial Leasing Co., Ltd., Zhongxin International Finance Leasing Co., Ltd. and Risheng International Financial Leasing Co., Ltd.

For the collateral of long-term borrowings, please refer to Note 8.

(16) Other Non-current Liabilities

	December 31,2025	December 31,2024
Deferred income	$ -	$ 18,588

Yangzhou HY, one of subsidiaries of the Company, reached a plant relocation agreement with the People's Government of Huaisi Town, Hanjiang District, Yangzhou City on 2012 and the government mentioned above agreed to provide a relocation subsidy to Yangzhou HY as per the agreement. As of September 30th, 2025, the government had fully disbursed the relocation subsidy of RMB 65,000 thousand (approximately NT$ 281,211 thousand) where RMB 10,000 thousand (approximately NT$ 43,704 thousand) was disbursed on August 19th, 2022 and NT$ 25,778 thousand was reclassified as the Income from Governmental Subsidy in June 2023. The remaining subsidiary of RMB 55,000 thousand (equivalent to NT$ 237,507 thousand) was collected in full and all the Deferred Incomes were reclassified as the Income from Government Subsidy on September 26th, 2025.

Yangzhou HY, one of subsidiaries of the Company transferred its plant property ownership certificate to the People's Government of Huaisi Town, Hanjiang District, Yangzhou City in July, 2024 and relevant transfer procedures were completed in September, 2025.

(17) Employee benefits

A. Defined contribution plan

The pension system under the Labor Pension Act applicable for our Company and two subsidiaries - HY Electronic (Cayman) Limited, Taiwan Branch and Taiwan GPP Inc. is a defined contribution retirement scheme administered by the government of Taiwan and specifies 6% of an employee's monthly salary should be contributed to a special personal account in the Bureau of Labor Insurance as the employee's pension.

Our Company and one of its subsidiary - Yangzhou HY Technology Development Co., Limited prepare the employee pension pursuant to relevant regulations of the governments of Mainland China and Yangzhou City, Jiangsu Province and various insurances and allowances are contributed to the special personal accounts at specific percentages of employee monthly salary.

The pension amounts contributed by the Group were $9,759 thousand and $7,170 thousand in 2025 and 2024 respectively.

38 -

(18) Equity

A. Common stock

	December 31,2025	December 31,2024
Authorized capital stock	$ 1,500,000	$ 1,000,000
Paid-up capital stock	$ 804,993	$ 804,993

On July 25th, 2025, the Company's board of directors approved the revision of the total authorized capital as stipulated in the Articles of Association of the Company, increasing the authorized capital stock from original NT$ 1,000,000 thousand to NT$ 1,500,000 thousand. The above-mentioned amendment to the Articles of Association was approved by an extraordinary general meeting of the shareholders on September 15th, 2025.

The denomination of each common stock issued is $10 and each stock carries one vote and the right to receive dividends.

B. Capital surplus

On March 13, 2024, the company's board of directors resolved to use the capital reserve of $427,964 thousand and the legal surplus reserve of $37,533 thousand to offset losses. This resolution was approved by the shareholders' meeting on June 24, 2024.

C. Retained earnings & Dividend

The Company's article of incorporation stipulates that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, except that the appropriation of earnings to the legal reserve equals the Company's paid-in capital. If the Company has no deficit and the legal reserve has exceeded 25% of the Company's paid-in capital, the excess may be transferred to capital or distributed in cash.

In accordance with the requirements issued by the FSC, a portion of earnings shall be allocated as special reserve during earnings distribution. If the Company has already reclassified a portion of earnings to special reserve under the preceding subparagraph, it shall make supplemental allocation of special reserve for the amount of the current-period total net reduction of other shareholders' equity. An equivalent amount of special reserve shall be allocated from the after-tax net profit in the period, plus items other than after-tax net profit in the period, that are included in the undistributed current-period earnings and the undistributed prior-period earnings. A portion of undistributed prior-period earnings shall be reclassified to special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to the net reduction of other shareholders' equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions.

39 -

According to the Cayman Company Law and the public company rules, before the distribution of dividends, the Company shall first take into consideration its operating environment, industry developments, and the long-term interests of stockholders, as well as its programs to maintain operating efficiency and meet its capital expenditure budget and financial goals in determining the stock or cash dividends to be paid. After the above appropriations, current and prior-period earnings that remain undistributed will be proposed for distribution by the Board of Directors, and a meeting of shareholders will be held to decide on this matter. The cash dividends shall not be more than 10% of total dividends.

The general meeting of shareholders resolved not to appropriate the earnings on June 23, 2025 due to the Company's net loss in 2024.

The general meeting of shareholders resolved not to appropriate the earnings on June 24, 2024 due to the Company's net loss in 2023.

D. other equity items

(a) Exchange differences on translation of foreign financial statements

	2025	2024
Balance at January 1	$ (76,802)	$ (97,852)
Exchange differences on foreign operations	5,240	21,050
Balance at December 31	$ (71,562)	$ (76,802)

(b) Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income

	2025	2024
Balance at January 1	$ (3,496)	$ -
Change in Fair Value	(1,912)	(3,496)
Balance at December 31	$ (5,408)	$ (3,496)

(19) Operating revenue

	2025	2024
Revenue from contracts with customers
Sales revenue	$ 833,212	$ 962,465

A. Explanation of revenue from contracts with customers

Please refer to Note 4(16).

B. Disaggregation of revenue

	2025
Primary geographical markets:	Mainland China Department	Taiwan GPP Department	Taiwan and HK Sales Department	Total
China (including H.K.)	$ 568,833	$ 3,387	$ 15,565	$ 587,785
Asia	62,605	7,376	134,214	204,195
Europe	-	4,070	31,141	35,211
Other	-	1,144	4,877	6,021
	$ 631,438	$ 15,977	$ 185,797	$ 833,212
Major products:
Solar diode	$ 149,391	$ -	$ 2,926	$ 152,317
Rectifier	348,674	264	117,797	466,735
Diode	85,658	13,226	63,127	162,011
Other	47,715	2,487	1,947	52,149
	$ 631,438	$ 15,977	$ 185,797	$ 833,212
	2024
Primary geographical markets:	Mainland China Department	Taiwan GPP Department	Taiwan and HK Sales Department	Total
China (including H.K.)	$ 660,994	$ 3,054	$ 15,580	$ 679,628
Asia	95,718	9,672	129,775	235,165
Europe	1,051	5,469	31,790	38,310
Other	-	4,590	4,772	9,362
	$ 757,763	$ 22,785	$ 181,917	$ 962,465
Major products:
Solar diode	$ 278,686	$ -	$ 1,930	$ 280,616
Rectifier	322,547	257	103,243	426,047
Diode	98,951	16,442	75,517	190,910
Other	57,579	6,086	1,227	64,982
	$ 757,763	$ 22,785	$ 181,917	$ 962,465

41 -

42 -

C. Contract balances

	December 31,2025	December 31,2024	January 1,2024
Note receivable (Note 6(4))	$ 22,901	$ 22,335	$ 60,523
Accounts receivable(Note 6(4))	$ 233,684	$ 262,838	$ 297,727
Contract liabilities	$ 4,732	$ 4,429	$ 10,503

(20) Net income (loss)

Net income (loss) include the following items:

A. Other income

	2025	2024
Government grants	$ 259,142	$ 603
Dividend Income	268	-
Others	16,349	10,048
	$ 275,759	$ 10,651

B. Other incomes and losses

	2025	2024
Gains (losses) on disposal of property, plant and equipment	$ (193)	$ (4,896)
Gains on disposal of investments	781	-
Gains on disposal of non-current assets held for sale	-	152,983
Net Foreign Exchange Gains	(1,895)	8,340
Net gains (losses) on financial liabilities at fair value through profit or loss	278	-
Profit (losses) from lease modification	(33,695)	-
Impairment loss on non-financial assets	(10,400)	-
Others	(575)	(1,105)
	$ (45,699)	$ 155,322

C. Finance costs

	2025	2024
Interest expense	$ (20,006)	$ (25,669)
Other finance costs	(791)	(2,323)
	$ (20,797)	$ (27,992)

D. Employee benefits expenses

| By function
By item | 2025 | | | 2024 | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Operating costs | Operating expense | Total | Operating costs | Operating expense | Total |
| Employee benefits | | | | | | |
| Salary | $ 45,589 | $ 100,612 | $ 146,201 | $ 53,356 | $ 101,574 | $ 154,930 |
| Labor and health insurance expenses | 3,301 | 6,220 | 9,521 | 3,828 | 3,934 | 7,762 |
| Pension | 4,872 | 4,887 | 9,759 | 5,650 | 1,520 | 7,170 |
| Others | 6,847 | 5,983 | 12,830 | 11,672 | 4,296 | 15,968 |
| Depreciation | 88,763 | 15,090 | 103,853 | 95,920 | 18,375 | 114,295 |
| Amortization | 37 | 2,984 | 3,021 | 47 | 4,633 | 4,680 |

Note: Depreciation expense include:

	2025	2024
Depreciation of property, plant and equipment	$ 97,831	$ 107,143
Depreciation of investment properties	-	684
Depreciation of right-of-use asset	6,022	6,468
	$ 103,853	$ 114,295

Employee compensation and directors' and supervisors' remuneration

In accordance with the articles of incorporation the Company should contribute no less than 2% and no higher than 15% of the profit as employee compensation and less than 3% as directors' remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The recipients of shares and cash may include the employees of the Company's affiliated companies who meet certain conditions.

The employee remuneration and directors' remuneration were not estimated because of net loss in 2025 and 2024, respectively. Related information would be available at the Market Observation Post System website.

(21) Other comprehensive income

	2025
	Amount before tax	Income tax benefit(expense)	Amount after tax
Items that will not be reclassified subsequently to profit or loss:
Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income	$ (2,731)	$ -	$ (2,731)
Items that may be reclassified subsequently to profit or loss:
Recognized in other comprehensive profit or loss
Exchange differences on translation of foreign financial statements	$ 5,240	$ -	$ 5,240
	2024
	Amount before tax	Income tax benefit(expense)	Amount after tax
Items that will not be reclassified subsequently to profit or loss:
Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income	$ (4,994)	$ -	$ (4,994)
Items that may be reclassified subsequently to profit or loss:
Recognized in other comprehensive profit or loss
Exchange differences on translation of foreign financial statements	$ 20,984	$ -	$ 20,984

(22) Income taxes

A. Main composition of income tax (benefit) expense recognized in profit or loss:

	2025	2024
Current income tax expense
Current period	$ 2,940	$ 24,449
Adjustment for prior periods	(6)	9,998
Deferred tax expense
Origination and reversal of temporary differences	7,956	3,437
Total current income tax (benefit) expense	$ 10,890	$ 37,884

The Group has no income tax recognized directly in equity and other comprehensive income for 2025 and 2024.

Reconciliation between accounting profit and income tax expense:

	2025	2024
Loss before income tax	$ 109,863	$ (39,117)
Income tax using the domestic tax rates in jurisdiction	$ 12,418	$ 16,246
Change in unrecognized loss carryforwards and temporary differences	(6,219)	27,731
Non-deductible expenses	1,967	444
Tax-exempt income	(210)	(40,700)
Recognition of previously unrecognized tax losses	(6)	9,998
Land value increment tax	-	24,165
Others	2,940	-
Income tax expense recognized in profit or loss	$ 10,890	$ 37,884

B. Current tax assets and liabilities

	December 31,2025	December 31,2024
Current tax assets
Current tax assets	$ 495	$ 1,126
Current tax liabilities
Tax payable	$ 694	$ 691

C. Recognized deferred tax assets and liabilities

Deferred tax assets

	2025
	Balance at January 1	Recognized in profit or loss	Recognized in other comprehensive income	Exchange difference	Balance at December 31
Temporary differences
Allowance for inventory $	5,841	$(2,412)	$-	$(65)	$3,364
Allowance for bad debt	548	(508)	-	(17)	23
Others	9,666	(5,068)	-	(152)	4,446
	$16,055	$(7,988)	$-	$(234)	$7,833

46 -

	2024
	Balance at January 1	Recognized in profit or loss	Recognized in other comprehensive income	Exchange difference	Balance at December 31
Temporary differences
Allowance for inventory	$ 7,054	$ (1,439)	$ -	$ 226	$ 5,841
Allowance for bad debt	379	155	-	14	548
Others	11,118	(1,827)	-	375	9,666
	$ 18,551	$ (3,111)	$ -	$ 615	$ 16,055

Deferred tax liabilities:

	2025
	Balance at January 1	Recognized in profit or loss	Recognized in other comprehensive income	Foreign currency translation	Balance at December 31
Temporary differences Others	$ 326	$ (32)	$ -	$ -	$ 294
	2024
	Balance at January 1	Recognized in profit or loss	Recognized in other comprehensive income	Foreign currency translation	Balance at December 31
Temporary differences Others	$ -	$ 326	$ -	$ -	$ 326

D. Details of unrecognized deferred tax assets are as follows:

	December 31,2025	December 31,2024
Tax losses	$ 185,782	$ 199,372
Deductible temporary differences	$ 816	$ 2,661

The R.O.C. Income Tax Act and the Law of the P.R.C. on Enterprise Income Tax allows net losses, as assessed by the tax authorities, to offset taxable income over a period of five years for local tax reporting purposes.

Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilize the benefits therefrom.

As of December 31, 2025, the information of the Group’s unused tax losses for which no deferred tax assets were recognized are as follows:

Expiry date	Unused tax loss
	HY Taiwan Branch	Yangzhou HY	Taiwan GPP
2026	$ -	$ -	$ 37,894
2027	-	-	34,527
2028	-	142,215	13,567
2029	-	186,039	25,841
2030	-	-	95,826
2031	-	-	95,269
2032	-	-	202,306
2033	37,285	-	71,344
2034	35,257	-	244
2035	33,163	-	196
合計	$ 105,705	$ 328,254	$ 577,014

E. Assessment of tax

The tax returns of the Company’s Taiwan Branch and Taiwan GPP Inc. through 2023 were assessed by the tax authorities.

The tax returns of the subsidiary s have been declared within the deadlines according to the local governments of each country.

F. In accordance with the Income Tax Law of the People's Republic of China, the standard tax rate is 25% and the unused tax losses can be used for a period of five years, in the case of no tax incentives.

G. A tax incentive is granted to Yangzhou HY for qualifying as a high-tech enterprise in China on November 18, 2025. The qualification is applicable every three years; the tax rate remains at 15%, and the unused tax losses can be used for a period of ten years.

(23) Loss per share

(Expressed in New Taiwan dollars per share)
	2025	2024
Basic loss per share	$ 1.23	$ (1.94)

The net income/(loss) and weighted average number of ordinary shares used to calculate earnings per share are as follows:

Net income/(loss)

	2025	2024
Net loss used to calculate earnings per share	$ 98,715	$ (155,877)

	2025	(Shares: thousand) 2024
Weighted average number of ordinary shares used to calculate loss per share	80,499	80,499

The Group did not have dilutive potential ordinary shares.

(24) Cash flow information

A. Investing activities with partial cash payments

	2025	2024
Acquisition of property, plant and equipment	$ 5,688	$ 29,920
Add: Opening balance of payable on equipment	4,057	4,010
Less: Ending balance of payable on equipmen	(638)	(4,057)
Less: Current change in prepaid equipment payment	1,050	(3,335)
Cash paid during the year	$ 10,157	$ 26,538

B. Changes in liabilities from financing activities:

2025

	January 1, 2025	Cash flow	Non-cash changes			December 31, 2025
			Impact of exchange rate	Other	Interest expense
Short-term borrowings	$ 358,053	$ 13,240	$ 977	$ -	$ -	$ 372,270
Lease liabilities (current and non-current)	468	(4,470)	-	12,847	358	9,203
Long-term borrowings (including due within one year)	101,920	65,354	179	-	-	167,453
	$ 460,441	$ 74,124	$ 1,156	$ 12,847	$ 358	$ 548,926

2024

	Non-cash changes
	January 1, 2024	Cash flow	Impact of exchange rate	Other	Interest expense	December 31, 2024
Short-term borrowings	$ 427,320	$ (92,910)	$ 23,643	$ -	$ -	$ 358,053
Lease liabilities (current and non-current)	4,890	(4,525)	-	-	103	468
Long-term borrowings (including due within one year)	283,052	(185,713)	4,581	-	-	101,920
	$ 715,262	$ (283,148)	$ 28,224	$ -	$ 103	$ 460,441

7. Related-party transactions

Intercompany balances and transactions between the Group, which are related parties of the company, have been eliminated upon consolidation; therefore, those items are not disclosed in this note. The following is a summary of significant transactions between the Company and other related parties:

(1) Names and relationship with related parties

Name	Relationship with the Group
Kao Kuei Chen	Chairman and general manager of the Company
Fang Ting Yu	Spouse of the company’s chairman
Fang Xin Yi	Vice President of the company
Smart Investment Co., Ltd. (Smart Investment)	Related party in substance

(2) Significant transactions with related parties

A. Guarantee:

The Group's borrowings guaranteed by related-party were as follows:

Name	Items	December 31,2025	December 31,2024
Kao Kuei Chen	Real estate	74,654	44,780
Fang Ting Yu	Real estate	33,720	35,824
Related party (Note 1)	Real estate	140,061	141,394
		$ 248,435	$ 221,998

Note1: The related party Smart Investment and the Company's chairman and general manager guaranteed the short-term and long-term borrowings of the Group by their real estates.

B. Other current assets:

Name	December 31,2025	December 31,2024
Fang Ting Yu	$ 1,798	$ -

C. Other Payables – Related Parties (including Non-current Payables):

Name	December 31,2025	December 31,2024
Fang Xin Yi	$ 149,177	$ -

As of December 31st, 2025, the remaining payment ( NT$ 149,177 thousand) for purchasing 100% of the equities of Yangzhou Hongyu Electronic Technology Co., Ltd. from the related party, Ms. Fang Xinyi by the Company and its subsidiaries still has not been made. For more details, please refer to Point (7) of Annotation 6 herein.

D. Leases:

Name	Items	December 31,2025	December 31,2024
Smart Investment	Lease liabilities	3,746	-
Kao Kuei Chen	Lease liabilities	3,933	-
		$ 7,679	$ -
Name	Items	2025	2024
Kao Kuei Chen	Refundable deposits	$ 340	$ 340
Name	Items	2025	2024
Kao Kuei Chen	Rental fee	$ 168	$ 168
Name	Items	2025	2024
Smart Investment	Interest expense	167	36
Kao Kuei Chen	Interest expense	177	37
		$ 344	$ 73

The lease contract was negotiated with reference to the market price and general payment terms.

The Company had leased a factory building in the Beishan Automobile Industrial Park, Hanjiang District, Yangzhou City from the original substantive related party, Yangzhou Hongyu Electronic Technology Co., Ltd. for production and the lease period is 20 years from January 1st, 2018 to December 31st, 2037. However the lease agreement with the original substantive related party, Hongyu Electronic Technology Co., Ltd. was terminated on August 31st, 2025 for completion the future organizational restructuring plan of the group.

A parking spot has been leased from Gao Guizhen for a period of 1 year by the Company, which is a short-term lease according to our judgment.

(3) Remuneration of key management is described as follows:

	2025	2024
Short-term employee benefits	$ 16,936	$ 19,399

The remuneration of key management is determined by the Company's Compensation Committee by reference to the usual compensation level of the same industry and in consideration of the reasonableness of the associations between remuneration with individual performance, the Company's operating performance and future risks.

8. Pledged assets

The carrying values of pledged assets were as follows:

Name of pledged assets	December 31,2025	December 31,2024
Property, plant and equipment	$ 471,738	$ 442,695
Right-of-use assets	31,509	247,271
Investment property	26,596	26,596
Restricted bank deposits (included in financial assets at amortized cost)	20,039	48
Guarantee deposits	24,548	16,748
Total	$ 574,430	$ 733,358

9. Commitments and contingencies:

The Group has reached an agreement with the Yangzhou Taiwan Compatriots Investment Enterprise Association (hereinafter referred to as YTIEA) to donate the space that takes up 1,500 square meters in the Taiwan Businessmen Guildhall built by the Group to YTIEA jointly with related land certificate and property certificate. The amount of the immovable property concerned amounted to $40,122 thousand and is currently recognized in other non-current assets and will be recognized as Donation Outlay during transfer of title in the future.

Losses due to major disasters: None.
Subsequent events: None.
51 -

Other

(1) Financial instruments

A. Categories of financial instruments

Financial assets	December 31,2025	December 31,2024
Cash and cash equivalents	$ 156,306	$ 185,105
Current financial assets at fair value through profit or loss	4,569	-
Financial assets at amortized cost-current and non-current	85,039	65,048
Notes and Accounts receivable	256,585	285,173
Other receivables	12,268	5,700
Financial assets at fair value through other comprehensive income-non-current	2,175	4,906
Refundable deposits-non-current	27,958	21,562
Total	$ 544,900	$ 567,494
Financial liabilities	December 31,2025	December 31,2024
Short-term borrowings	$ 372,270	$ 358,053
Notes and Accounts payable	256,718	321,490
Other payables	147,152	217,260
Lease liabilities (current and non-current)	9,203	468
Long-term borrowings (including due within one year)	167,453	101,920
Other payables to related parties (including Non-current Payables)	149,177	-
Guarantee deposits	172	170
Total	$ 1,102,145	$ 999,361

B. Purpose of financial risk management

The Group’s financial risk management objective is to manage financial risks related to its operational activities, including market risk (including exchange rate risk, interest rate risk, and other price risks), credit risk, and liquidity risk. To mitigate these financial risks, the Group is committed to identifying, evaluating and avoiding market uncertainties to reduce the potential changing impact of market fluctuations on its financial performance.

52 -

C. Market risk

The Group is primarily exposed to market risks such as foreign exchange rate fluctuations and interest rate changes. There have been no changes in the exposure to financial instrument market risks and the methods of managing and measuring such risks in 2025 and 2024.

(a) Foreign exchange rate risk

The Group’s net investment in foreign operations is primarily conducted in foreign currencies, resulting in exposure to exchange rate risk. The management strategy for exchange rate risk involves regularly reviewing the net positions of various currency-denominated assets and liabilities and managing the risk associated with those net positions.

The following information is presented in aggregate for currencies other than the functional currency of the Group, and the disclosed exchange rates refer to the rates at which these foreign currencies are translated into the functional currency. The significant foreign currency assets and liabilities are as follows:

December 31,2025	Monetary item	Foreign currency amount		Exchange rate	Carrying amount
Financial assets	USD	USD	4,138	31.430	$ 130,067
	EUR	EUR	90	35.770	3,311
Financial liability	USD	USD	109	31.430	$ 3,411
December 31,2024	Monetary item	Foreign currency amount		Exchange rate	Carrying amount
Financial assets	USD	USD	4,343	32.785	$ 142,327
Financial liability	USD	USD	83	32.785	2,719

The Group’s exchange rate risk mainly arises from cash and cash equivalents, accounts receivable and other receivables, loans, accounts payable, and other payables denominated in foreign currencies, resulting in foreign exchange gains or losses upon translation. As of December 31, 2025, and 2024, if the New Taiwan Dollar were to depreciate or appreciate by 1% against the USD, CNY, JPY, etc., while all other factors remained constant, the before-tax net loss for the years 2025 and 2024 would increase or decrease by $1,300 thousand and $1,396 thousand, respectively. The 1% represents the sensitivity ratio used by the Company's key management for reporting exchange rate risk internally and also reflects the assessment of the reasonable range of possible fluctuations in foreign exchange rates by the management.

53 -

For the years 2025 and 2024, the Group’s foreign exchange gains (realized and unrealized) were a loss of $1,895 thousand and a gain of $8,340 thousand, respectively. Due to the diverse functional currency types involved in foreign currency transactions, it is not feasible to disclose the exchange gains or losses by significant foreign currency.

(b) Interest rate risk

Interest rate risk refers to the risk of changes in the fair value of financial instruments due to fluctuations in market interest rates. The Group borrows funds through both fixed and floating interest rate for their long-term and short-term borrowings, resulting in exposure to both changes in fair value and cash flow risks arising from changes in market interest rates.

The sensitivity analysis of interest rate risk is determined based on the interest rate exposure of derivative and non-derivative instruments at the end of the reporting period. For floating-rate liabilities, the analysis assumes that the outstanding liabilities at the end of the reporting period remain outstanding throughout the entire year. The changing rate used by the Group’s key management for reporting is a 0.5% increase or decrease in interest rates, which also represents the management's assessment of the reasonable range of possible fluctuations in interest rates. If interest rates were to increase (decrease) by 0.5%, with all other variables held constant, the after-tax net loss of the Group for the years 2025 and 2024 would decrease (increase) by $2,699 thousand and $2,300 thousand, respectively, mainly due to the interest rate risk associated with the Group’s floating-rate liabilities.

(c) Other price risk

The Company and its subsidiaries were exposed to equity price risk arising from the investments in listed or over-the-counter equity securities. The equity investments are strategic investments, not for trading.

The sensitivity analysis was performed based on the equity price risk as of the balance sheet date.

If the equity price rose (fell) by 1%, the pre-tax profits and losses for 2025 and 2024 would increase (decrease) by NT$ 460 thousand and NT$ 0 thousand respectively due to the change in the fair value of financial assets measured at fair value through profit or loss.

If the equity price rose (fell) by 1%, the other comprehensive incomes pretax for 2025 and 2024 would increase (decrease) respectively by NT$ 22 thousand and NT$ 49 thousand respectively due to the change in the fair value of financial assets measured at fair value through other comprehensive income.

54 -

The financial assets measured at fair value through profit or loss and those at FVTOCI invested by the Company and its subsidiaries are subject to the change in market prices; but the Company and its subsidiaries have set the stop-loss points; therefore, no significant market risk is expected to occur.

D. Credit risk

Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of financial instruments which were settled in accordance with trading conditions.

The major customers of the Group are centralized in the semiconductor industry. To minimize credit risk, the Group periodically evaluates the customers' financial positions and the possibility of collecting trade receivables. Besides, the Group monitors and reviews the recoverable amount of the trade receivables to ensure the uncollectible amount are recognized appropriately as impairment loss. As of December 31, 2025, and 2024, 15% and 22%, respectively, of trade receivables were from a single customer.

E. Liquidity risk management

The management objective of the Group's liquidity risk is to maintain the availability of cash and cash equivalents, highly liquid securities, and sufficient bank financing limits necessary for operations, ensuring adequate financial flexibility and mitigating the impact of cash flow fluctuations for the Group. As of December 31, 2025, the Company's current assets of $650,058 thousand and current liabilities $880,047 thousand, presenting a liquidity risk that current liabilities exceed current assets. The Company's management monitors the utilization of bank financing limits and ensures compliance with loan contract terms. As of December 31, 2025, and 2024, the amount of the bank financing limits which the Group had not utilized were $50,379 thousand and $44,929 thousand, respectively.

December 31, 2025
Non-derivative financial liabilities	Within 1 year	2-3 Years	4-5 years	More than 5 years	Total	Carrying amount
Short-term borrowings	$ 372,270	$ -	$ -	$ -	$ 372,270	$ 372,270
Notes and accounts payables	256,718	-	-	-	256,718	256,718
Other payables	147,152	-	-	-	147,152	147,152
Long-term borrowings (including due within one year)	67,859	40,744	23,654	50,749	183,006	167,453
Other payables to related parties (including Non-current Payables)	33,223	64,208	61,224	-	158,655	149,177
Lease liabilities (current and non-current)	4,604	4,953	-	-	9,557	9,203
Guarantee deposits	-	172	-	-	172	172
	$ 881,826	$ 110,077	$ 84,878	$ 50,749	$ 1,127,530	$ 1,102,145

56 -

December 31, 2024
Non-derivative financial liabilities	Within 1 year	2-3 Years	4-5 years	More than 5 Years	Total	Carrying amount
Short-term borrowings	$ 358,053	$ -	$ -	$ -	$ 358,053	$ 358,053
Notes and accounts payables	321,490	-	-	-	321,490	321,490
Other payables	217,260	-	-	-	217,260	217,260
Long-term borrowings (including due within one year)	45,585	18,797	12,435	34,864	111,681	101,920
Lease liabilities (current and non-current)	399	80	-	-	479	468
Guarantee deposits	-	170	-	-	170	170
	$ 942,787	19,047	12,435	34,864	1,009,133	999,361

F. The categories and fair value of financial instrument

(a) Financial instruments not measured at fair value

The management of the Group believes that the carrying amounts of financial assets and financial liabilities not measured at fair value approximate their fair values.

(b) Fair value measurement recognized in the consolidated balance sheet

The table below provides an analysis of financial instruments measured at fair value after initial recognition, classified into three levels based on the observability of fair value:

i. Level 1 fair value measurement refers to quoted prices (unadjusted) in active markets for identical assets or liabilities

ii. Level 2 fair value measurement refers to the observable inputs for fair value of asset or liability, directly (i.e., prices) or indirectly (i.e., derived from prices), other than the quoted prices included in Level 1.

iii. Level 3 fair value measurement refers to the unobservable market data (unobservable inputs) for fair value of asset or liability.

	December 31, 2025
	Level 1	Level 2	Level 3	Total
Current financial assets at fair value through profit or loss	$ 4,569	$ -	$ -	$ 4,569
Financial assets at fair value through other comprehensive income	-	-	2,175	2,175
	$ 4,569	$ -	$ 2,175	$ 6,744

December 31, 2024

	Level 1	Level 2	Level 3	Total
Financial assets at fair value through other comprehensive income	$ -	$ -	$ 4,906	$ 4,906

There was no transfer between Level 1 and Level 2 in 2025 and 2024.

The fair value of financial assets and financial liabilities is determined as follows:

i. For financial assets and financial liabilities with standard terms and conditions that are traded on active markets, the fair value is determined by reference to market quotes (including listed redeemable corporate bonds, bills of exchange, corporate bonds, and perpetual bonds).

ii. If no market prices are referable, valuation methods are used for estimation. The estimates and assumptions used by the Group in the valuation methods are consistent with the information used by market participants when pricing financial instruments.

iii. The fair value of other financial assets and financial liabilities (excluding those mentioned above) is determined based on generally accepted pricing models using discounted cash flow analysis.

iv. The evaluation process of the Group used for the fair values classified under Level 3 is carried out by the financial department for independent verification on the fair values of financial instruments. The data from independent sources is used to make the evaluation results close to the market conditions and regular reviews are made to ensure that the evaluation results are reasonable.

The sensitivity analysis regarding the changes of significant unobservable inputs of the evaluation model used for measuring the fair values classified under Level 3 is described as below:

	Fair Value on December 31 2025	Evaluation Technique	Significant Unobservable Input value	Interval (Weighted Average)	Relation between Input and Fair Value
Non-derivative Equity Instruments
Unlisted OTC stocks	$ 2,175	Net asset value method	Net asset value	-	The higher the net asset value, the higher the fair value

(2) Capital management

The Group’s objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

The Group’s debt-to-equity ratio at the reporting date is as follows:

	December 31,2025	December 31,2024
Total liabilities	$ 1,110,737	$ 1,026,800
Less: cash and cash equivalents	(156,306)	(185,105)
Net debt	$ 954,431	$ 841,695
Total equity	$ 697,144	$ 998,414
Debt-to-equity ratio	136.91%	84.30%

13. Additional Disclosures

(1) Information on significant transactions :

A. Loaning funds to others: Please refer to table 1.
B. Provisions of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Please refer to table 4
E. See Table 3 attached; E. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.
F. The business relationship between the parent and the subsidiaries and significant transactions between them: Please refer to table 7

(2) Information on investees :

Names, locations and other information of investee companies: Please refer to table 5.

(3) Information on investments in Mainland China: Please refer to table 6.

14. Segment information:

(1) General information

The Group engages in the manufacture and sale of rectifiers, diode, and related semiconductor components. The Group uses the information mainly categorized by region that the chief operating decision maker reviews as the basis to determine resource allocation and make a performance evaluation. The regions mentioned above are Mainland China Department, Taiwan and HK Sales Department. Taiwan GPP's products and gross profit are different from the Group's original business, so is defined as an independent operating department. In summary, the Group's segment can be divided into Mainland China Department, Taiwan GPP Department and Taiwan and HK Sales Department, the same as the information used by the chief operating decision maker.

(2) Information about reportable segments and their measurement

The basis for the measurement of income from operations is the same as that for the preparation of financial statements. Please refer to the consolidated statements of comprehensive income for the related segment revenue and operating results.

(3) Information about reportable segments

A. The Group’s operating segment information and reconciliation are as follows:

	2025
	Mainland China Department	Taiwan GPP Department	Taiwan and HK Sales Department	Reconciliation and elimination	Total
Revenue
Revenue from external customers	$ 631,438	$ 15,977	$ 185,797	$ -	$ 833,212
Intersegment revenues	132,017	-	5,367	(137,384)	-
Total revenue	$ 763,455	$ 15,977	$ 191,164	$ (137,184)	$ 833,212
Reportable segment profit or loss	$ 144,683	$ 861	$ 101,706	$ (137,387)	$ 109,863
	2024
	Mainland China Department	Taiwan GPP Department	Taiwan and HK Sales Department	Reconciliation and elimination	Total
Revenue
Revenue from external customers	$ 757,763	$ 22,785	$ 181,917	$ -	$ 962,465
Intersegment revenues	167,790	135	1,775	(169,700)	-
Total revenue	$ 925,553	$ 22,920	$ 183,692	$ (169,700)	$ 962,465
Reportable segment profit or loss	$ (140,651)	$ 216,599	$ (152,281)	$ 37,216	$ (39,117)

B. Product and service information:

For the revenue from the external customers of the Group, please refer to Note 6(19).

C. Geographic information :

In presenting information on the basis of geography, segment assets are based on the geographical location of the assets. For the revenue presented on the basis of geography, please refer to Note 6(19).

60 -

Geographical information	December 31,2025	December 31,2024
Non-current assets:
Taiwan	$ 173,960	$ 160,264
China	945,897	1,082,275
Total	$ 1,119,857	$ 1,242,539

Non-current assets include property, plant and equipment, investment property, right-of-use assets, intangible assets, prepayments for business facilities and other assets, not including financial instruments and deferred tax assets.

Table 1 (Loaning Funds to Others)

For the Year Ended December 31, 2025

(Expressed in thousands of NewTaiwan dollars / thousands of foreigncurrencies)

Number	Lending Company	Lender	Dealings	Whether it is a related party	Maximum amount for the period	Ending balance	Actual drawdown amount	Interest rate	Nature for Financing	Amount of business dealings	Reason for Financing	Allowance for bad loans	Collateral		Financing Limits for Each Borrowing Company	Financing Company's Total Financing Amount Limits
													Item	Value
1	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	YANGZHOU HY	Other receivables from related parties	Yes	$ 39,288 (USD1,250)	$ - (USD -)	$ - (USD -)	2.44%	The need for short-term financing	-	Operating turnover	-		$ -	Note1	Note1
2	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	YANGZHOU HY	Other receivables from related parties	Yes	$ 38,345 (USD1,220)	$ 38,345 (USD1,220)	$ 38,345 (USD1,220)	2.44%	The need for short-term financing	-	Operating turnover	-	Promissory Note	$ 38,345 (USD1,220)	Note1	Note1
3	Taiwan GPP	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	Other receivables from related parties	Yes	$ 60,000	$ -	$ -	2.44%	The need for short-term financing	-	Operating turnover	-	-	-	Note2	Note2
4	Taiwan GPP	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	Other receivables from related parties	Yes	$ 40,000	$ -	$ -	2.44%	The need for short-term financing	-	Operating turnover	-	-	-	Note2	Note2
5	Taiwan GPP	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	Other receivables from related parties	Yes	$ 60,000	$ 60,000	$ 60,000	2.44%	The need for short-term financing	-	Operating turnover	-	Promissory Note	$ 60,000	Note2	Note2
6	Taiwan GPP	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	Other receivables from related parties	Yes	$ 30,000	$ 30,000	$ 30,000	2.44%	The need for short-term financing	-	Operating turnover	-	Promissory Note	$ 40,000	Note2	Note2

Note 1: If HY Electronic (Cayman) Limited, Taiwan Branch needs to grant a capital loan to a company or corporate for short-term financing, the total amount of the loan shall not exceed 40% of the net value of the creditor and the limit shall be $ 620,899 thousand 40% = $ 248,360 thousand. ; specific capital loans shall not exceed 10% of the net value of Taiwan GPP Inc. and the limit shall be $ 620,899 thousand 10% = $ 62,090 thousand.
Note 2: If Taiwan GPP Inc. needs to grant a capital loan to a company or corporate for short-term financing, the total amount of the loan shall not exceed 40% of the net value of the creditor and the limit shall be $ 245,483 thousand * 40% = $ 98,193 thousand. ; specific capital loans shall not exceed 40% of the net value of Taiwan GPP Inc. and the limit shall be $ 245,483 thousand * 10% = $ 98,193 thousand.
Note 3: The maximum balance for the period, ending balance, and actual amount drawn down in this table are translated using the following exchange rates:

Exchange Rate : USD: NTD End of period 1:31.43

Table 2 (Guarantee for Others)
For the Year Ended December 31, 2025
Expressed in thousands of New Taiwan dollars, except as otherwise indicated

Number (Note 1)	Endorser / guarantor	Party being endorsed/guaranteed		Limit on endorsements / guarantees provided for a single party (Note 3)	Maximum outstanding endorsement / guarantee amount as at December 31, 2025 (Note 4)	Outstanding endorsement / guarantee amount at December 31, 2025 (Note 5)	Actual amount drawn down	Amount of endorsements / guarantees secured with collateral	Ratio of accumulated endorsement / guarantee amount to net asset value of the endorser / guarantor company	Ceiling on total amount of endorsements / guarantees Provided (Note 3)	Provision of endorsements / guarantees by parent company to subsidiary (Note 6)	Provision of endorsements / guarantees by subsidiary to parent Company (Note 6)	Provision of endorsements / guarantees by subsidiary to parent Company (Note 6)	Footnote
		Company name	Relation ship with the endorser / guarantor (Note 2)
1	Taiwan GPP	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	(3)	$ 49,097	$ 30,000	$ -	$ -	$ -	-	$ 1,472,898	N	Y	N	Note 7
1	Taiwan GPP	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	(3)	49,097	33,000	33,000	33,000	33,000	13.48%	1,472,898	N	Y	N	Note 7
1	Taiwan GPP	HY ELECTRONIC (CAYMAN) LIMITED, TAIWAN BRANCH	(3)	49,097	19,000	12,000	12,000	12,000	4.90%	1,472,898	N	Y	N	Note 8

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:
(1) The Company is '0'.
(2) The subsidiaries are numbered in order starting from '1'.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories:
(1) Having business relationship.
(2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
(4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.
(5) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(6) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.
Note 3: The amount of guarantee provided by Taiwan GPP to an individual entity shall not exceed 20% of the net value of Taiwan GPP, moreover, the total amount of guarantee provided by Taiwan GPP shall not exceed 50% of the net value of Taiwan GPP. The amount of guarantee provided by Taiwan GPP and its subsidiaries to related parties shall not exceed 600% of the net value of Taiwan GPP.
Note 4: The maximum balance of endorsement guarantees for others in current year.
Note 5: The endorsement guarantee limit of the Group.
Note 6: Column Y must be completed in case that a listed parent company provides endorsement guarantee to a subsidiary, a subsidiary provides endorsement guarantee to a listed parent company and an endorsement guarantee is provided in the Mainland of China.
Note 7: The board of directors of the Company adopted a resolution to approve the guarantee line of NT$ 30,000 thousand on May 10th, 2024 and the deadline of the guarantee period was May 9th, 2025. On March 14th, 2025, the board of directors of the Company made another resolution, approving the guarantee line of NT$ 33,000 thousand for debt refinancing and adjustment of the guarantee line.
Note 8: The board of directors of the Company adopted a resolution to approve the guarantee line of NT$ 19,000 thousand on June 16th, 2025 and the deadline of the guarantee period was June 15th, 2026. On August 29th, 2025, the board of directors of the Company made another resolution to reduce the original guarantee line to NT$ 12,000 thousand.

December 31, 2025
Unit: NT$ Thousand or Share

Table 3 (Material Negotiable Securities Held at the End of the Period) (Excluding those for investment in subsidiaries, affiliated enterprises and joint control)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	As at December 31, 2025				Footnote
				Number of shares	Book value (Note 2)	Ownership (%)	Fair value
Taiwan GPP	Stock
	Taiwan Semiconductor Co., Ltd.	None	Current financial assets at fair value through profit or loss - current	55,000	$ 2,838	-	$ 2,838	Note3
	Chunghwa Telecom Co., Ltd.	None	Current financial assets at fair value through profit or loss - current	10,000	1,305	-	1,305	Note3
	Eurocharm Holdings Co., Ltd.	None	Current financial assets at fair value through profit or loss - current	3,000	426	-	426	Note3
	La Strong Precision Industry Co., Ltd.	None	Financial assets at fair value through other comprehensive income - non-current	900,000	2,175	11.65%	2,175	Note4

Note 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from such items, that are within the scope of IFRS 9 "Financial Instruments".
Note 2: For securities measured at fair value, the field of Book Balance is the book balance adjusted with fair value evaluation.
Note 3: They are listed companies.
Note 4: The Company is an unlisted company.

63 -

For the Year Ended December 31, 2025
Unit: NT$ Thousand

Table 4 (Transactions with Related Parties Amounting to NT$ 100 million or 20% of Paid-in Capital or More.)

Purchaser (Seller)	Transacting Party	Relation	Transaction				Transaction Conditions Different from Common Transaction Conditions & Reasons for the Differences		Note & Account Receivable (Payable)		Remark
			Purchase/Sale	Amount	Proportion in Total Purchase/Sale (%)	Credit Period (Days)	Unit Price	Credit Period (Days)	Balance	Proportion in total Note & Account Receivable (Payable) (%)
HY Electronic (Cayman) Limited, Taiwan Branch	Yangzhou HY Technology Development Co., Limited	Sub-subsidiary	Purchase	$ 132,056	27.06%	90 Days	-	-	$ (47,142)	(18.36%)

Note : The above amounts had been reconciled and eliminated upon consolidation.

64 -

Table 5 ( Information on investees ) ( excluding information on investees in Mainland China )
For the Year Ended December 31, 2025
Unit: NT$ Thousand or Share

Investor	Investee	Location	Main business activities	Initial investment amount		Shares held as at December 31, 2025			Net income (losses)of investee	Share of profits/losses of investee	Footnote
				Balance as at December 31, 2025	Balance as at December 31, 2024	Number of shares	Ownership (%)	Carrying value
The Company	JEPTER	Hong Kong	General investment	USD 26,746	USD 26,746	26,746	100.00	$ 531,338	$ 136,784	$ 136,784	(Note)
The Company	Taiwan GPP	Taiwan	Sale of wafer, rectifier, diode and other semiconductors	$ 354,886	$ 354,886	14,000	70.00	$ 180,351	$ 861	$ 603	(Note)

Note: The above amounts had been reconciled and eliminated upon consolidation.

Table 6 (Information on investment in mainland China)
For the Year Ended December 31, 2025
1. The names of investees in Mainland China, the main businesses and products, and other information (Expressed in thousands of NewTaiwan dollars / thousands of foreigncurrencies)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2025	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2025	Net income (losses) of the investee (Note 3)	Percentage of ownership	Profit (loss) on investments recognized currently (Note 2)	Book Value of Investments at the end of the period (Note 3)	Accumulated remittance of earnings in current period
					Outflow	Inflow
YANGZHOU HY	Manufacture and sales of rectifier, diode and other semiconductors	$ 903,530 (USD 26,746)	(2)	$ 903,530 (USD 26,746)	-	-	$ 903,530 (USD 26,746)	$ (136,848) (USD 4,389)	100%	$ (136,848) (USD 4,389) (2)2	$ 524,850 (USD 16,699)	-
Yangzhou Hongyu Electronic Technology Co., Ltd.	Sales of semiconductor rectifier, semiconductor and components	$ 410,258 (CNY 91,250)	(3)	$ -	-	-	$ -	$ (14,673) (CNY 3,386)	100%	$ (11,752) (CNY 2,712) (2)2	$ 352,453 (CNY 78,393)	-
Accumulated Investment in Mainland China as of December 31, 2025	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
---	---	---
-	-	N/A

Note 1: Investment methods are classified into the following three kinds and related numbers may be used for indication:

(1) Direct investment in the Mainland of China.
(2) Reinvestment in the Mainland of China through a company in the third region: reinvestment of a reinvested company (JETPER Technology Limited) of which all stocks are held by our Company indirectly.
(3) Another Method: direct investment in the companies in the Mainland of China through reinvestment (of YANGZHOU HY Inc.).

Note 2: In the field of Investment Loss & Profit Recognized Currently:

(1) It should be indicated if the investment still is in preparation without profit or loss.
(2) The basis for recognition of investment profit or loss shall be indicated.

A. The financial statements have been audited by an international CPA firm with which CPA firms in the ROC. has a cooperative relationship.
B. The financial statements have been audited by the attesting CPA of the parent company in Taiwan.
C. Others: Financial statements not audited by CPAs.

Note 3: Conversion based on Exchange Rate:

(1) Current profits (losses) of the invested companies, investment profits (losses) recognized currently and final book values of the investments stated in the table are converted based on the exchange rates as below:

Exchange Rate: USD: NTD End of period 1:31.430 Average 1:31.1797

Exchange Rate: USD: RMB End of period 1:6.9907 Average 1:7.1952

Table 7 ( Business relationships and significant intercompany transactions )
For the Year Ended December 31, 2025
Unit: NT$ Thousand

Number (Note 1)	Transaction company	Counterparty	Relationship (Note 2)	Transaction
		Name		General ledger account	Amount	Transaction terms	Percentage of consolidated total revenues or total assets (Note3)
0	The Company	YANGZHOU HY	1	Accounts payable	47,142	General Terms Condition	3%
		YANGZHOU HY	1	Purchase	132,056	General Terms Condition	16%
		YANGZHOU HY	1	Other receivables	38,345	General Terms Condition	2%
		Taiwan GPP	1	Other receivables	90,000	General Terms Condition	5%

Note 1: The business dealings between the Group should be separately annotated in the number column. The numbers are filled in as follows:

(1) For the Company, fill in 0.
(2) For subsidiaries, number in order starting from "1".

Note 2: There are three types of relationships with the counterparty, indicate the type:

(1) The company to subsidiary.
(2) Subsidiary to the company.
(3) Subsidiary to subsidiary.

Note 3: The percentage of transaction amount to consolidated total revenues or total assets is calculated as the ending balance to consolidated total assets in the case of assets and liabilities, or as the amount to consolidated total revenues in the case of profit or loss.

Note 4: The above transactions have been eliminated in full upon the preparation of the consolidated financial statements.

(V). 2025 Statement of Loss Compensation

HY Electronic (Cayman) Limited
2025 Statement of Loss Compensation

Unit: NT$

Item	Amount
Beginning accumulated deficit	($229,885,629)
Add (Less): Net income (loss) after tax for the year	98,715,100
Add (Less): Items recognized outside current year net income
Changes in equity attributable to ownership interests in subsidiaries	(30,544,772)
Accumulated deficit for the year	(161,715,301)
Loss compensation items:
Add: Legal reserve applied to offset deficit	0
Add: Special reserve applied to offset deficit	0
Add: Capital surplus applied to offset deficit	0
Ending accumulated deficit	($161,715,301)

Chairperson: Kao, Kuei-Jen
Manager: Kao, Kuei-Jen
Chief Accountant: Lin, Yu-Hsiang

(VI). Comparison Table of Amendments to Selected Provisions of the "Procedures for Lending Funds to Others"

Description of Amendments

Item	Before Amendment	After Amendment
5.3.1.	The aggregate amount of funds loaned by the Company shall not exceed 40% of the Company’s net worth.	The aggregate amount of funds loaned by the Company shall not exceed 40% of the Company’s net worth.
Overall lending limits:
5.3.1.1.	None.	For counterparties with business relationships with the Company, the total amount of loans shall not exceed the amount of business transactions between the parties.
“Amount of business transactions” refers to the higher of the actual or reasonably estimated purchase or sales amount between the parties within the most recent one year or the forthcoming one year, and in any case shall not exceed 40% of the Company’s net worth.
5.3.1.2.	None.	For counterparties with short-term financing needs, the total amount of loans shall not exceed 40% of the Company’s net worth.
5.3.2.1.	For counterparties with business relationships with the Company, each individual loan shall not exceed the amount of business transactions between the parties.
“Amount of business transactions” refers to the higher of the purchase or sales amount between the parties in the most recent fiscal year, and shall not exceed 10% of the Company’s net worth.	For counterparties with business relationships with the Company, each individual loan shall not exceed the amount of business transactions between the parties.
“Amount of business transactions” refers to the higher of the actual or reasonably estimated purchase or sales amount between the parties within the most recent one year or the forthcoming one year, and shall not exceed 10% of the Company’s net worth.
5.3.3.	For lending of funds between overseas subsidiaries in which the Company directly or indirectly holds 100% of the voting shares, the total and individual loan amounts shall not exceed 10% of the Company’s net worth, and the loan term shall be limited to one year.	For lending of funds between overseas subsidiaries in which the Company directly or indirectly holds 100% of the voting shares, the total and individual loan amounts shall not exceed 10% of the lending entity’s net worth, and the loan term shall be limited to one year.

(VII). Comparison Table of Amendments to Selected Provisions of the "Procedures for Acquisition or Disposal of Assets"

Description of Amendments

Item	Before Amendment	After Amendment
7.2.	In conducting related party transactions, engaging in derivative transactions, or carrying out mergers, demergers, acquisitions, or share transfers, the Company shall comply not only with the provisions of the preceding paragraph, but also establish procedures in accordance with Sections 3 through 5 of this Chapter.	In conducting related party transactions, engaging in derivative transactions, or carrying out mergers, demergers, acquisitions, or share transfers, the Company shall comply not only with the provisions of the preceding paragraph, but also establish procedures in accordance with Section 15 through 30 hereof.

(VIII). Comparison Table of Amendments to Selected Provisions of the "Rules of Procedure for Shareholders' Meetings"

Description of Amendments

Item	Before Amendment	After Amendment
3.4.	The Company shall, at least 30 days before a regular shareholders’ meeting or 15 days before a special shareholders’ meeting, upload electronic copies of the meeting notice, proxy forms, and explanatory materials for all agenda items, including ratification matters, discussion items, and the election or removal of directors and independent directors, to the Market Observation Post System. It shall also, at least 21 days before a regular shareholders’ meeting or 15 days before a special shareholders’ meeting, upload the shareholders’ meeting handbook and supplementary materials. However, companies with paid-in capital of NT$10 billion or more as of the most recent fiscal year-end, or whose foreign and Mainland Chinese shareholdings recorded in the shareholders’ register reach a combined 30% or more, shall complete such filings at least 30 days before the regular shareholders’ meeting. The shareholders’ meeting handbook and supplementary materials shall be made available for inspection and displayed at the Company and its appointed shareholder services agent at least 15 days prior to the meeting.	The Company shall, at least 30 days before a regular shareholders’ meeting or 15 days before a special shareholders’ meeting, upload electronic copies of the meeting notice, proxy forms, explanatory materials for all agenda items, as well as the shareholders’ meeting handbook and supplementary materials, to the Market Observation Post System. The Company shall also make the handbook and supplementary materials available for inspection and display them at the Company and its appointed shareholder services agent at least 15 days prior to the meeting.
13.7.	The scrutineers and vote counters for proposal voting shall be appointed by the chairperson, and scrutineers must be shareholders. The scrutineers and vote counters for proposal voting shall be appointed by the chairperson, and scrutineers must be shareholders.	The scrutineers and vote counters for proposal voting shall be appointed by the chairperson, and scrutineers must be shareholders. The scrutineers and vote counters for proposal voting shall be appointed by the chairperson, and scrutineers must be shareholders. If a shareholders’ meeting includes an election of directors where the number of candidates exceeds the number of available seats, a proposal to remove directors, or matters specified under Article 185 or Article 316 of the Company Act, Article 18, Article 27, Article 29, or Article 35 of the Business Mergers and Acquisitions Act, or Article 24, Paragraph 2, Subparagraph 1 or Article 26, Paragraph 2, Subparagraph 1 of the Financial Holding Company Act, the chairperson should appoint a lawyer, certified public accountant, or notary public to serve as scrutineer. The persons appointed under the preceding paragraph shall not be responsible for any part of the voting process, and shall not be directors, officers, or employees of the Company or its affiliates. Scrutineers shall oversee the voting and counting process and sign the vote tabulation report. Where scrutineers are appointed by the chairperson, the minutes of the shareholders’ meeting shall include their names and titles.

(IX). List of Board Director Candidates

List of Board Director Candidates

No.	Nominee Type	Name	Gender	Shares Held (Note)	Principal Education/Working Experiences
1	Director	KAO, KUEI-JEN	Female	1,153,559 Shares	National Ilan University - M.B.A. Union-Choice Technology Co., Ltd. - Director
Regal Sheen Investments Limited - Director
Yangzhou HY Technology Development Co., Ltd. - Director
Taiwan GPP Inc. - Corporate Director	Union-Choice Technology Co., Ltd. - Director
Regal Sheen Investments Limited - Director
Yangzhou HY Technology Development Co., Ltd. - Director
Taiwan GPP Inc. - Corporate Director
2	Director	FANG, HSIN-YI	Female	127,383 Shares	Anglia Ruskin University MBA Deputy General Manager, HY Electronic (Cayman) Limited
Deputy General Manager, HY Electronic (Cayman) Limited, Taiwan Branch
Director, Yangzhou HY Real Estate Development Co., Ltd.
Executive Director, Yangzhou HY Electronic Co., Ltd.
Director, Jumbo Elite Holdings Limited	Director and concurrently General Manager and Chief Executive Officer, HY Electronic (Cayman) Limited
Chief Executive Officer, HY Electronic (Cayman) Limited, Taiwan Branch Supervisor, Taiwan GPP Incorporation
Chief Executive Officer, HY Electronic (Yangzhou) Limited
Director, Yangzhou HY Real Estate Development Co., Ltd.
Executive Director, Yangzhou HY Electronic Co., Ltd.
Director, Jumbo Elite Holdings Limited
3	Director	FANG, WEN-TE	Male	45,000 Shares	National Ilan University - M.B.A. Union-Choice Technology Co., Ltd. - Director
Regal Sheen Investments Limited - Director
Yangzhou HY Technology Development Co., Ltd. - Director
Taiwan GPP Inc. - Corporate Director	Director, HY Electronic (Yangzhou) Limited
Legal Director
Representative, Taiwan GPP Incorporation
Chairman, Smart Rise International CO., LTD.
Director, Regal Sheen Investments Limited
4	Director	YU, PENG-SHUN	Male	333,000 Shares	M.S., Information Management, Shih Hsin University, Taiwan Manager, Information Services Department, HY Electronic (Cayman) Limited, Taiwan Branch Director, Ya Cheng International Co., Ltd.
Deputy Manager, Information (Materials) Department, Dong Guan Lien Hsin Sporting Goods Co., Ltd.	Associate Vice President, Information Division, HY Electronic (Cayman) Limited
Associate Vice President, Information Division, HY Electronic (Cayman) Limited, Taiwan Branch Associate Vice President, Information Division, Taiwan GPP Incorporation
Director, Ya Cheng International Co., Ltd.

No.	Nominee Type	Name	Gender	Shares Held (Note)	Principal Education/Working Experiences	Current Role(s)
5	Director	LEE, YUNG-CHIH	Male	0 Shares	Master's Degree in Management, Tamkang University Deputy General Manager, HY Electronic (Yangzhou) Limited Deputy General Manager, Gulf Semiconductor (Shan Dong) Co.,Ltd. Manager / Associate Vice President, Lead Precision Industry Co.,Ltd. / Taiwan Sintered Metals Co., Ltd. Manager, Vishay General Semiconductor Taiwan Ltd.	Special Assistant, HY Electronic (Yangzhou) Limited
6	Independent Director	CHENG, KONG-FAH	Male	0 Shares	University of Missouri Ph.D. in Business Administration Professor, Department of Business Administration and Graduate Institute of Marketing Management, National Chung Cheng University, Taiwan Director, Marketing Strategy and Creativity Research Center, National Chung Cheng University, Taiwan Lecturer in Marketing Management, EMBA Program in Taiwan, Royal Roads University, Canada Lecturer, EMBA Program, National Sun Yat-sen University / National Open University, Taiwan Publications: Marketing Management: Theory Analysis and Practical Application, Principles of Marketing, International Marketing, and more than ten university-level textbooks	Professor, Department of Business Administration and Graduate Institute of Marketing Management, National Chung Cheng University, Taiwan
7	Independent Director	CHIEN, CHIA-YIN	Female	0 Shares	LL.B., Department of Law (Financial and Economic Law Division), National Taiwan University Associated Attorney, Weiyes Attorneys-at Law Honorary Attorney, Small and Medium Enterprise Administration, Ministry of Economic Affairs, Taiwan Associate Attorney, Elite Law Office Trainee Attorney, Taichung Office, Lee and Li, Attorneys-at-Law Legal Specialist, Aerospace Industrial Development Corporation Attorney, Taiwan Taichung District Court Passed the Higher Examination for Attorneys, Examination Yuan, Taiwan	Associated Attorney, Song Cheng Law Office
8	Independent Director	CHIN, JUI-TING	Male	0 Shares	UCAM Universidad Católica San Antonio de Murcia DBA Special Assistant to the Superintendent's Office, Shuang Ho Hospital, Ministry of Health and Welfare, Taiwan	None
9	Independent Director	HUANG, CHENG-YU AN	Male	18,000 Shares	B.B.A., Department of Accounting, National Chengchi University, Taiwan Independent Director, Honyi International Company Limited Finance Manager, China Times Publishing Company Assistant Manager, Audit Department, Deloitte & Touche Taiwan	Chief Financial Officer, China Times Publishing Co., Ltd. Independent Director, La Kaffa International Co., Ltd.

(X). List of Concurrent Role(s) of Directors

List of Concurrent Role(s) of Directors

No.	Type	Name	Concurrent Role(s)
1	Director	KAO, KUEI-JEN	Chairman, HY Electronic (Cayman) Limited
Chairman, Taiwan GPP Incorporation
Director, Fastwin Information Corp.
Chairman, E-Poly Technology (Yangzhou) Corporation
Director, Multi-Glory Services Inc.
Director, Smart Investment Co., Ltd.
Director, M&W Artistic Culture Co., Ltd.
2	Director	FANG, HSIN-YI	Director and concurrently General Manager and Chief Executive Officer, HY Electronic (Cayman) Limited
Chief Executive Officer, HY Electronic (Cayman) Limited, Taiwan Branch
Supervisor, Taiwan GPP Incorporation
Chief Executive Officer, HY Electronic (Yangzhou) Limited
Director, Yangzhou HY Real Estate Development Co., Ltd.
Executive Director, Yangzhou HY Electronic Co., Ltd.
Director, Jumbo Elite Holdings Limited
3	Director	FANG, WEN-TE	Director, HY Electronic (Yangzhou) Limited
Legal Director Representative, Taiwan GPP Incorporation
Chairman, Smart Rise International CO., LTD.
Director, Regal Sheen Investments Limited
4	Director	YU, PENG-SHUN	Associate Vice President, Information Division, HY Electronic (Cayman) Limited
Associate Vice President, Information Division, HY Electronic (Cayman) Limited, Taiwan Branch
Associate Vice President, Information Division, Taiwan GPP Incorporation
Director, Ya Cheng International Co., Ltd.
5	Director	LEE, YUNG-CHIH	Special Assistant, HY Electronic (Yangzhou) Limited
6	Independent Director	CHENG, KONG-FAH	Professor, Department of Business Administration and Graduate Institute of Marketing Management, National Chung Cheng University, Taiwan
7	Independent Director	CHIEN, CHIA-YIN	Associated Attorney, Song Cheng Law Office
8	Independent Director	CHIN, JUI-TING	None
9	Independent Director	HUANG, CHENG-YUAN	Chief Financial Officer, China Times Publishing Co., Ltd.
Independent Director, La Kaffa International Co., Ltd

IV. Appendixes

(I). Corporation's Articles of Incorporation

THE COMPANIES ACT (Revised)

COMPANY LIMITED BY SHARES
TENTH AMENDED AND RESTATED MEMORANDUM

AND

ARTICLES OF ASSOCIATION

HY Electronic (Cayman) Limited
虹橋發展科技股份有限公司

(adopted by a Special Resolution passed on September 15, 2025)

THE COMPANIES ACT (Revised)
COMPANY LIMITED BY SHARES
TENTH AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
HY Electronic (Cayman) Limited
蚊揚發展科技股份有限公司
(adopted by a Special Resolution passed on September 15, 2025)

The name of the Company is HY Electronic (Cayman) Limited 蚊揚發展科技股份有限公司.
The Registered Office of the Company shall be at the offices of Vistra (Cayman) Limited, P. O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1 - 1205 Cayman Islands, or at such other place as the Directors may from time to time decide.
The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by any law as provided by the Companies Act (Revised).
The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by the Companies Act (Revised).
Nothing in the preceding sections shall be deemed to permit the Company to carry on the business of a Bank or Trust Company without being licensed in that behalf under the provisions of the Banks and Trust Companies Act (as amended), or to carry on Insurance Business from within the Cayman Islands or the business of an Insurance Manager, Agent, Sub-agent or Broker without being licensed in that behalf under the provisions of the Insurance Act (as amended), or to carry on the business of Company Management without being licensed in that behalf under the provisions of the Companies Management Act (as amended).
The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands.
The liability of each Member is limited to the amount from time to time unpaid on such Member's shares.
The authorised share capital of the Company is New Taiwan Dollars 1,500,000,000.00 divided into 150,000,000 ordinary shares of a par value of New Taiwan Dollars 10.00 each provided always that subject to the provisions of the Companies Act (Revised) and the Articles of Association, the Company shall have power to redeem or purchase any of its shares and to sub-divide or consolidate the said shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be Ordinary, Preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided.
If the Company is registered as exempted, its operations will be carried on subject to the provisions of Section 174 of the Companies Act (Revised).

THE COMPANIES ACT (Revised)
COMPANY LIMITED BY SHARES
TENTH AMENDED AND RESTATED ARTICLES OF ASSOCIATION
OF
HY Electronic (Cayman) Limited
虹揚發展科技股份有限公司
(Adopted by a Special Resolution passed September 15, 2025)

Table A

INTERPRETATION

Definitions

Power to Issue Shares
Redemption and Purchase of Shares
Rights Attaching to Shares
Share Certificates
Preferred Shares

REGISTRATION OF SHARES

Register of Members
Registered Holder Absolute Owner
Transfer of Registered Shares
Transmission of Registered Shares

ORDINARY RESOLUTION, SPECIAL RESOLUTION AND SUPERMAJORITY RESOLUTION

Alteration of Capital
Special Resolution and Supermajority Resolution
Variation of Rights Attaching to Shares

DIVIDENDS AND CAPITALISATION

Dividends
Capital Reserve and Power to Set Aside Profits
Method of Payment
Capitalisation

MEETINGS OF MEMBERS

Annual General Meetings

DIRECTORS AND OFFICERS

Extraordinary General Meetings
Notice
Giving Notice
Postponement of General Meeting
Quorum and Proceedings at General Meetings
Chairman to Preside
Voting on Resolutions
Proxies
Proxy Solicitation
Dissenting Member's Appraisal Right
Shares that May Not be Voted
Voting by Joint Holders of Shares
Representation of Corporate Member
Adjournment of General Meeting
Directors Attendance at General Meetings
Number and Term of Office of Directors
Election of Directors
Removal of Directors
Vacation of Office of Director
Compensation of Directors
Defect in Election of Director
Directors to Manage Business
Powers of the Board of Directors
Register of Directors and Officers
Officers
Appointment of Officers
Duties of Officers
Compensation of Officers
Conflict of Interest
Indemnification and Exculpation of Directors and Officers

MEETINGS OF THE BOARD OF DIRECTORS

Board Meetings
Notice of Board Meetings
Participation in Meetings by Video Conference
Quorum at Board Meetings
Board to Continue in the Event of Vacancy
Chairman to Preside
Validity of Prior Acts of the Board

CORPORATE RECORDS

Minutes
Register of Mortgages and Charges
Form and Use of Seal

TENDER OFFER AND ACCOUNTS

Tender Offer
Books of Account
Financial Year End

AUDIT COMMITTEE

Number of Audit Committee Members
Power of Audit Committee

VOLUNTARY DISSOLUTION AND WINDING-UP

Voluntary Dissolution and Winding-Up

CHANGES TO CONSTITUTION

Changes to Articles

LITIGIOUS AND NON-Litigious AGENT

Appointment of Litigious and Non-Litigious Agent

OTHERS

ROC Securities Laws and Regulations
Shareholder Protection Mechanism
Social Responsibilities

THE COMPANIES ACT (Revised)
COMPANY LIMITED BY SHARES

TENTH AMENDED AND RESTATED ARTICLES OF ASSOCIATION
OF
HY Electronic (Cayman) Limited
蚱揚發展科技股份有限公司

(adopted by a Special Resolution passed on September 15, 2025)

Table A

The regulations in Table A in the First Schedule to the Law (as defined below) do not apply to the Company.

INTERPRETATION

Definitions

1.1 In these Amended and Restated Articles, the following words and expressions shall, where not inconsistent with the context, have the following meanings, respectively:

Applicable Law
the Applicable Public Company Rules, the Law or such other rules or legislation applicable to the Company;

Applicable Public Company Rules
the ROC laws, rules and regulations (including, without limitation, the Company Law of the ROC, the Securities and Exchange Law of the ROC, the rules and regulations promulgated by the FSC, and the rules and regulations promulgated by the TWSE, as amended from time to time) affecting public reporting companies or companies listed on any ROC stock exchange or securities market that from time to time are required by the relevant regulator as applicable to the Company;

Articles
the Articles of Association as altered from time to time;

Audit Committee
the audit committee of the Board, which shall comprise solely of all the Independent Directors of the Company;

Board
the board of directors appointed or elected pursuant to the Articles and acting at a meeting of directors at which there is a quorum in accordance with the Articles;

Capital Reserve
for the purpose of the Articles only, comprises of the premium paid on the issuance of any

	share and income from endowments received by the Company from the Members;
Chairman	the Director elected amongst all the Directors as the chairman of the Board;
Company	HY Electronic (Cayman) Limited 紅揚發展科技股份有限公司;
Compensation Committee	a committee of the Board, which shall be comprised of professional individuals and having the functions, in each case, prescribed by the Applicable Public Company Rules;
Cumulative Voting	the voting mechanism for an election of Directors as described in Article 35.2 hereof;
Directors	the directors for the time being of the Company and shall include any and all Independent Director(s);
Dissenting Member	has the meaning given thereto in Article 28.2;
Electronic Record	has the same meaning as in the Electronic Transactions Law;
Electronic Transactions Law	the Electronic Transactions Act (Revised) of the Cayman Islands;
Family Relationship within Second Degree of Kinship	in respect of a person, means another person who is related to the first person either by blood or by marriage of a member of the family and within the second degree shall include the parents, siblings, grandparents, children and grandchildren of the first person as well as the parents, siblings and grandparents of the first person's spouse;
FSC	the Financial Supervisory Commission of the ROC;
Independent Directors	the Directors who are elected as "Independent Directors" in accordance with the Applicable Public Company Rules or the Articles;
Joint Operation Contract	a contract between the Company and one or more person(s) or entity(ies) where the parties thereto agree to pursue the same business venture and jointly bear losses and enjoy profits arising out of such business venture in accordance with the terms thereof;
Law	The Companies Act (Revised) of the Cayman Islands and every modification, reenactment or revision thereof for the time being in force;
Lease Contract	a contract or arrangement between the Company and any other person(s) pursuant to which such person(s) lease or rent from the

Company the necessary means and assets to operate the whole business of the Company in the name of such person, and as consideration, the Company receives a pre-determined compensation from such person;

Litigious and Non-Litigious Agent
a person appointed by the Company pursuant to the Applicable Law as the Company's process agent for purposes of service of documents in the relevant jurisdiction and the Company's responsible person in the ROC under the Securities and Exchange Law of the ROC;

Management Contract
a contract or arrangement between the Company and any other person(s) pursuant to which such person(s) manage and operate the business of the Company in the name of and for the benefit of the Company, and as consideration, such person(s) receive a pre-determined compensation from the Company while the Company continues to be entitled to the profits (or losses) of such business;

Market Observation Post System
the public company reporting system maintained by the TWSE;

Member
the person registered in the Register of Members as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Members as one of such joint holders or all of such persons, as the context so requires;

Memorandum
the memorandum of association of the Company;

Merger
means:
(a) a "merger" or "consolidation" as defined under the Law; or
(b) other forms of mergers and acquisitions which fall within the definition of "merger and/or consolidation" under the Applicable Public Company Rules;

month
calendar month;

Notice
written notice as further provided in the Articles unless otherwise specifically stated;

Officer
any person appointed by the Board to hold an office in the Company;

Ordinary Resolution
a resolution passed at a general meeting (or, if so specified, a meeting of Members holding a class of shares) of the Company by not less than a simple majority vote of the Members present at the meeting, in person or by proxy. (Members who attended the meeting but did not vote will be recorded as having abstained from voting but they will still be counted towards the quorum of the meeting);

Preferred Shares
has the meaning given thereto in Article 6;

Private Placement
means, for so long as the shares are listed on the TWSE in the ROC, the private placement by the Company of shares or other securities of the Company as permitted by the Applicable Public Company Rules;

Register of Members
the register of members of the Company maintained in accordance with the Law and (as long as the shares of the Company are listed on the TWSE in the ROC) the Applicable Public Company Rules;

Registered Office
the registered office for the time being of the Company;

Restricted Shares
has the meaning given thereto in Article 2.5;

ROC
Taiwan, the Republic of China;

Seal
the common seal or any official or duplicate seal of the Company;

Secretary
the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary and any person appointed by the Board to perform any of the duties of the Secretary;

share(s)
share(s) of par value New Taiwan Dollars 10.00 each in the Company;

Share Swap
a 100% share swap as defined in the ROC Business Mergers and Acquisitions Act whereby a company (the "Acquiring Company") acquires all the issued and outstanding shares of another company with the consideration being the shares of the Acquiring Company, cash or other assets;

Special Resolution
Subject to the Law, means a resolution passed at a general meeting of the Company by a majority of at least two-thirds of the votes

cast by such Members who, being entitled to do so, vote in person or by their proxies, or, in the case of Members that are corporations or other non-natural person, by their duly authorised representatives by computing the number of votes to which each Member is entitled. (Members who attended the meeting but did not vote will be recorded as having abstained from voting but they will still be counted towards the quorum of the meeting);

Spin-off
a spin-off as defined in the ROC Business Mergers and Acquisitions Act whereby a company transfers a part or all of its business that may be operated independently to an existing company or a newly incorporated company (the "Acquirer") with the consideration being the shares of the Acquirer, cash or other assets;

Subsidiary
with respect to any company, (1) the entity, more than one half of whose total number of the issued voting shares or the total amount of the share capital are directly or indirectly held by such company; or (2) the entity that such company has a direct or indirect control over its personnel, financial or business operation;

Supermajority Resolution
a resolution passed by a majority vote of the Members present at a general meeting attended by Members who represent two-thirds or more of the total issued shares or, if the total number of shares represented by the Members present at the general meeting is less than two-thirds of the total issued shares, but more than one half of the total issued shares, means instead, a resolution passed by two-thirds or more of votes cast by the Members present at such general meeting. (Members who attended the meeting but did not vote will be recorded as having abstained from voting but they will still be counted towards the quorum of the meeting);

Treasury Shares
means shares of the Company held in treasury pursuant to the Law and the Articles;

TDCC
the Taiwan Depository & Clearing Corporation;

TWSE
the Taiwan Stock Exchange Corporation; and

year
calendar year.

1.2 In the Articles, where not inconsistent with the context:

(a) words denoting the plural number include the singular number and vice versa;

(b) words denoting the masculine gender include the feminine and neuter genders;

(d) the words:-

(i) "may" shall be construed as permissive; and

(ii) "shall" shall be construed as imperative;

(e) "written" and "in writing" include all modes of representing or reproducing words in visible form, including the form of an Electronic Record;

(f) a reference to statutory provision shall be deemed to include any amendment or re-enactment thereof;

(g) unless otherwise provided herein, words or expressions defined in the Law shall bear the same meaning in the Articles; and

(h) Section 8 of the Electronic Transactions Law shall not apply to the extent that it imposes obligations or requirements in addition to those set out in the Articles.

1.3 Headings used in the Articles are for convenience only and are not to be used or relied upon in the construction thereof.

Power to Issue Shares

2.1 Subject to Applicable Law, the Articles and any resolution of the Members to the contrary, and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have the power to issue any unissued shares of the Company on such terms and conditions as it may determine and any shares or class of shares (including the issue or grant of options, warrants and other rights, renounceable or otherwise in respect of shares) may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital, or otherwise as the Company may, subject to Article 6.1, by Ordinary Resolution of the Members prescribe, provided that no share shall be issued at a discount except in accordance with the Law and the Applicable Public Company Rules.

2.2 Unless otherwise provided in the Articles, the issue of new shares of the Company shall be approved by a majority of the Directors at a meeting attended by two-thirds or more of the total number of the Directors. The issue of new shares shall at all times be subject to the sufficiency of the authorized capital of the Company.

2.3 After the application for listing in the ROC has been approved by the TWSE, where the Company increases its issued share capital by issuing new shares for cash

consideration in the ROC, the Company shall allocate 10% of the total amount of the new shares to be issued, for offering in the ROC to the public ("Public Offering Portion") unless it is not necessary or appropriate, as determined by the FSC or the TWSE for the Company to conduct the aforementioned public offering or otherwise provided by Applicable Law. However, if a percentage higher than the aforementioned 10% is resolved by the Members in a general meeting by Ordinary Resolution to be offered, the percentage determined by such resolution shall prevail and shares corresponding to such percentage shall be reserved as Public Offering Portion. The Company may also reserve 10% to 15% of such new shares for subscription by the employees of the Company and its Subsidiaries (the "Employee Subscription Portion"). The Company may prohibit such employees from transferring the shares so subscribed within a certain period; provided, however, that such a period cannot be more than two years.

2.4 Unless otherwise resolved by the Members in general meeting by Ordinary Resolution, where the Company increases its issued share capital by issuing new shares for cash consideration pursuant to Article 2.3 hereof, after allocation of the Public Offering Portion, including, for the avoidance of doubt, any percentage in excess of 10% of the total amount of the new shares to be issued for offering in the ROC to the public as resolved by the Members in general meeting be offered pursuant to Article 2.3, and the Employee Subscription Portion pursuant to Article 2.3 hereof, the Company shall make a public announcement and notify each Member that he is entitled to exercise a pre-emptive right to purchase his pro rata portion of the remaining new shares, to be issued in the capital increase for cash consideration. The Company shall state in such announcement and notices to the Members the procedures for exercising such pre-emptive rights. Where an exercise of the pre-emptive right may result in fractional entitlement of a Member, the entitlements (including fractional entitlements) of two or more Members may be combined to jointly subscribe for one or more whole new shares in the name of a single Member, subject to compliance with such directions and terms and conditions as determined by the Board and the Applicable Public Company Rules. If the total number of the new shares to be issued has not been fully subscribed for by the Members within the prescribed period, the Company may consolidate such shares into the public offering tranche or offer any un-subscribed new shares to a specific person or persons in such manner as is consistent with the Applicable Public Company Rules.

If any person who has subscribed the new shares (by exercising the aforesaid pre-emptive right of Members or subscribing the Public Offering Portion or the Employee Subscription Portion) fails to pay when due any amount of the subscription price in relation to such newly-issued shares within the payment period as determined by the Company, the Company shall fix a period of no less than one month and call for payment of the subscription price or the Company may declare a forfeiture of such subscription. No forfeiture of such subscription shall be declared as against any such person unless the amount due thereon shall remain unpaid for such period after such demand has been made. Notwithstanding the provisions of the preceding sentence, forfeiture of the subscription may be declared without the demand process if the payment period for subscription price set by the Company is one month or longer. Upon forfeiture of the subscription, the shares remaining unsubscribed to shall be offered for subscription in such manner as is consistent with the Applicable Public Company Rules.

2.5 Subject to the Applicable Law, the Company may issue new shares with restricted

rights ("Restricted Shares") to employees of the Company and its Subsidiaries with the sanction of a Supermajority Resolution provided that Article 2.3 hereof shall not apply in respect of the issue of such shares. For so long as the shares are listed on the TWSE in the ROC, the terms of issue of Restricted Shares, including but not limited to the number of Restricted Shares so issued, issue price of Restricted Shares and other related matters shall be in accordance with the rules promulgated by the competent authority of securities of the ROC.

2.6 The pre-emptive right of employees under Article 2.3 and the pre-emptive right of Members under Article 2.4 shall not apply in the event that new shares are issued due to the following reasons or for the following purposes:

in connection with a Merger, Spin-off, Share Swap, or pursuant to any reorganization of the Company;
in connection with meeting the Company's obligations under share subscription warrants and/or options, including those rendered in Articles 2.8 and 2.11 hereof; or in connection with any issuance of shares to employees under Article 2.8;
in connection with the issue of Restricted Shares in accordance with Article 2.5 hereof;
in connection with meeting the Company's obligations under convertible bonds or corporate bonds vested with rights to acquire shares;
in connection with meeting the Company's obligations under Preferred Shares vested with rights to acquire shares; or
in connection with the issue of shares in accordance with Article 14.5 or 17;
in connection with Private Placement of the securities issued by the Company.

2.7 The Company shall not issue any unpaid shares or partly paid-up shares.

2.8 Notwithstanding Article 2.5 hereof, the Company may, upon approval by a majority of the Directors at a meeting attended by two-thirds or more of the total number of the Directors, adopt one or more employee incentive programmes and may issue shares or options, warrants or other similar instruments, to employees of the Company and its Subsidiaries, and for the avoidance of doubt, resolution of the Members is not required.

2.9 Options, warrants or other similar instruments issued in accordance with Article 2.8 above are not transferable save by inheritance.

2.10 Directors of the Company and its Subsidiaries shall not be eligible for Restricted Shares pursuant to Article 2.5 hereof or the incentive programmes pursuant to Article 2.8 hereof, provided that directors who are also employees of the Company or its Subsidiaries may subscribe for Restricted Shares or participate in an incentive programme in their capacity as an employee and not as a director of the Company or its Subsidiaries.

2.11 The Company may enter into agreements with employees of the Company and/or the employees of its Subsidiaries in relation to the incentive programme approved

pursuant to Article 2.8 above, whereby employees may subscribe for, within a specific period, a specific number of the shares. The terms and conditions of such agreements shall be no less restrictive on the relevant employee than the terms specified in the applicable incentive programme.

3. Redemption and Purchase of Shares

3.1 Subject to the Law, the Company is authorised to issue shares which are to be redeemed or are liable to be redeemed at the option of the Company or a Member.

3.2 The Company is authorised to make payments in respect of the redemption of its shares out of capital or out of any other account or fund authorised for this purpose in accordance with the Law.

3.3 The redemption price of a redeemable share, or the method of calculation thereof, shall be fixed by the Board at or before the time of issue.

3.4 Every share certificate relating to a redeemable share shall indicate that the share is redeemable.

3.5 For so long as the shares are listed on the TWSE in the ROC, subject to the provisions of the Applicable Law and the Articles, the Company may, upon approval by a majority of the Directors at a meeting attended by two-thirds or more of the total number of the Directors, purchase its own shares (including any redeemable shares) on such terms and in such manner as the Directors may determine and hold them as Treasury Shares in accordance with the Applicable Law PROVIDED THAT if any purchase of the Company's own shares from all the Members involves any immediate cancellation of shares of the Company, such repurchase of shares is subject to approval by the Members by way of an Ordinary Resolution and the number of shares of the Company to be cancelled shall be effected based on the then prevailing percentage of shareholding of all the Members as of the date of such cancellation on a pro rata basis (as rounded up or down to the nearest whole number as determined by the Directors), unless otherwise provided for in the Law or the Applicable Public Company Rules.

Upon approval by Members by way of an Ordinary Resolution to repurchase and cancel shares of the Company, the repurchase price may be paid in any manner authorized by the Law, including in cash or in kind, provided that where any repurchase price is to be paid in kind, the monetary equivalent value of such payment in kind shall be (a) assessed by an ROC certified public accountant before being submitted by the Board to the Members for approval as part of the Ordinary Resolution authorising the repurchase and cancellation of shares of the Company; and (b) agreed to individually by each Member who will be receiving the repurchase price in kind. Without prejudice to this Article 3.5, in the case of a repurchase of shares by the Company for purposes of changing the currency denomination of share capital of the Company, consent of the holders of the shares subject to such repurchase shall not be required.

3.6 In the event that the Company proposes to purchase any share listed on the TWSE in the ROC pursuant to the preceding Article, the resolution of the Board approving such proposal and the implementation thereof should be reported to the Members in the next general meeting in accordance with the Applicable Public Company Rules.

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Such reporting obligation shall also apply even if the Company does not implement the proposal to purchase its shares listed on the TWSE in the ROC for any reason.

3.7 For so long as the shares are listed on the TWSE in the ROC, the Company is authorised to purchase any share listed on the TWSE in the ROC in accordance with the following manner of purchase:

(a) the total price of the shares purchased by the Company shall not exceed the sum of retained earnings minus earnings distribution resolved by the Board or the general meeting, plus the following realized capital reserve:

(i) the premium received from the disposal of assets that has not been booked as retained earnings;

(ii) the premium paid on the issuance of any share and income from endowments received by the Company provided however that income from the shares shall not be included before such shares have been transferred to others;

(b) the maximum number of shares purchased by the Company shall not exceed ten percent of the total number of issued and outstanding shares of the Company; and

(c) the purchase shall be at such time, at such price and on such other terms as determined and agreed by the Board in its sole discretion provided however that:

(i) such purchase transactions shall be in accordance with the applicable ROC securities laws and regulations and the Applicable Public Company Rules; and

(ii) such purchase transactions shall be in accordance with the Law.

3.8 Subject to Article 3.5 and the Applicable Public Company Rules, the redemption or repurchase price may be paid in any manner permissible under the Law as determined by the Board.

3.9 A delay in payment of the redemption price shall not affect the redemption but, in the case of a delay of more than thirty days, interest shall be paid for the period from the due date until actual payment at a rate which the Directors, after due enquiry, estimate to be representative of the rates being offered by banks holding "A" licenses (as defined in the Banks and Trust Companies Act (Revised) of the Cayman Islands) in the Cayman Islands for thirty day deposits in the same currency.

3.10 The Directors may exercise as they think fit the powers conferred on the Company by Section 37(5) of the Law (payment out of capital) but only if and to the extent that the redemption could not otherwise be made (or not without making a fresh issue of shares for this purpose).

3.11 Subject as aforesaid, the Directors may determine, as they think fit all questions that may arise concerning the manner in which the redemption of the shares shall or may be effected.

3.12 No share may be redeemed unless it is fully paid.

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3.13 The Board may designate as Treasury Shares any of its shares that it purchases or redeems, or any shares surrendered to it, in accordance with the Applicable Law.

3.14 No dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the Company's assets (including any distribution of assets to Members on a winding up of the Company) may be made to the Company in respect of a Treasury Share.

3.15 The Company shall be entered in the Register of Members as the holder of the Treasury Shares provided that:

(d) the Company shall not be treated as a Member for any purpose and shall not exercise any right in respect of the Treasury Shares, and any purported exercise of such a right shall be void; and

(e) a Treasury Share shall not be voted, directly or indirectly, at any meeting of the Company and shall not be counted in determining the total number of issued shares at any given time, whether for the purposes of the Articles or the Law.

3.16 After the Company purchases the shares listed on the TWSE in the ROC, any proposal to transfer the Treasury Shares to the employees of the Company and its Subsidiaries at a price below the average actual repurchase price must be approved by Special Resolution in the next general meeting and the items required by the Applicable Public Company Rules shall be specified in the notice of the general meeting and may not be proposed as an extemporary motion. The aggregate number of Treasury Shares resolved at all general meetings and transferred to the employees of the Company and its Subsidiaries shall not exceed 5% of the total issued shares, and each employee may not subscribe for more than 0.5% of the total issued shares in aggregate. The Company may prohibit such employees from transferring such Treasury Shares within a certain period; provided, however, that such a period cannot be more than two years.

3.17 Subject to Article 3.16 and the Applicable Public Company Rules, Treasury Shares may be disposed of (by cancellation or transfer) by the Company on such terms and conditions in accordance with the Applicable Law as determined by the Directors.

Rights Attaching to Shares

Subject to Article 2.1, the Memorandum and the Articles, other contractual obligations or restrictions that the Company is bound by and any resolution of the Members to the contrary and without prejudice to any special rights conferred thereby on the holders of any other shares or class of shares, the share capital of the Company shall be divided into shares of a single class the holders of which shall, subject to the provisions of the Articles:

(a) be entitled to one vote per share;

(b) be entitled to such dividends as recommended by the Board and approved by the Members at general meeting;

(c) in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganization or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company; and

(d) generally be entitled to enjoy all of the rights attaching to shares.

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Share Certificates

5.1 The Company may issue shares in uncertificated/scripless form or issue share certificates. Where share certificates are issued, every Member shall be entitled to a certificate issued under the Seal (or a facsimile thereof), which shall be affixed or imprinted with the authority of the Board, specifying the number and, where appropriate, the class of shares held by such Member. The Board may by resolution determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical means. For so long as the shares are listed on the TWSE in the ROC, shares of the Company shall be issued in uncertificated/scripless form unless the issuance of share certificates is required by the provisions of the Applicable Public Company Rules.

5.2 If any share certificate shall be proved to the satisfaction of the Board to have been worn out, lost, mislaid, or destroyed the Board may cause a new certificate to be issued and request an indemnity for the lost certificate if it sees fit.

5.3 Share may not be issued in bearer form.

5.4 When the Company shall issue share certificates pursuant to Article 5.1 hereof, the Company shall deliver the share certificates to the subscribers within thirty (30) days from the date such share certificates may be issued pursuant to the Law, the Memorandum, the Articles, and the Applicable Public Company Rules, and shall make a public announcement prior to the delivery of such share certificates pursuant to the Applicable Public Company Rules.

5.5 Where the Company shall issue the shares in uncertificated/scripless form, the Company shall comply with the Law and the Applicable Public Company Rules to handle relevant matters, and shall deliver the shares to the subscribers by book-entry transfer within thirty (30) days after the Company is permitted by applicable listing laws and regulations to issue such shares and make a public announcement prior to the delivery.

5.6 The Company shall not convert its shares into shares without par value.

Preferred Shares

6.1 The Company may by Special Resolution designate one or more classes of shares with preferred or other special rights (shares with such preferred or other special rights, the "Preferred Shares"), and amend the Memorandum and these Articles as appropriate to reflect the designation of shares as Preferred Shares.

6.2 For so long as the shares are listed on the TWSE in the ROC, the rights and obligations of Preferred Shares may include (but not limited to) the following terms and shall be consistent with the Applicable Public Company Rules:

(a) the order of priority and fixed amount or fixed ratio of allocation of dividends and bonus on Preferred Shares;

(b) the order of priority and fixed amount or fixed ratio of allocation of surplus assets of the Company;

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no voting rights whatsoever) of the Members holding the Preferred Shares;

(d) the method by which the Company is authorized or compelled to redeem the Preferred Shares, or a statement that redemption rights shall not apply; and
(e) other matters concerning rights and obligations incidental to Preferred Shares.

REGISTRATION OF SHARES

7. Register of Members

(a) For so long as shares are listed on the TWSE in the ROC, the Board shall cause to be kept a Register of Members which may be kept outside the Cayman Islands at such place as the Board shall appoint and which shall be maintained in accordance with the Law and the Applicable Public Company Rules.
(b) In the event that the Company has shares that are not listed on the TWSE in the ROC, the Company shall also cause to be kept a register of such shares in accordance with Section 40 of the Law.

8. Registered Holder Absolute Owner

Except as required by law:

(a) no person shall be recognised by the Company as holding any share on any trust; and
(b) no person other than the Member shall be recognised by the Company as having any right in a share.

9. Transfer of Registered Shares

9.1 Title to shares listed on the TWSE in the ROC may be evidenced and transferred in a manner consistent with the Applicable Public Company Rules (including through the book-entry system of the TDCC).
9.2 All transfers of shares which are in certificated form may be effected by an instrument of transfer in writing in any usual form or in any other form which the Board may approve and shall be executed by or on behalf of the transferor and, if the Board so requires, by or on behalf of the transferee. Without prejudice to the foregoing, the Board may also resolve, either generally or in any particular case, upon request by either the transferor or transferee, to accept mechanically executed transfers.
9.3 The Board may refuse to recognise any instrument of transfer in respect of shares in certificated form unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer.
9.4 The joint holders of any share may transfer such share to one or more of such joint holders, and the surviving holder or holders of any share previously held by them jointly with a deceased Member may transfer any such share to the executors or administrators of such deceased Member.
9.5 The Board may in its absolute discretion and without assigning any reason therefor

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refuse to register the transfer of a share in certificated form in the event such registration of transfer would (i) conflict with the Applicable Law; or (ii) conflict with the Memorandum and/or the Articles. If the Board refuses to register a transfer of any share, the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal.

10. Transmission of Registered Shares

10.1 In the case of the death of a Member, the survivor or survivors where the deceased Member was a joint holder, and the legal personal representatives of the deceased Member where the deceased Member was a sole holder, shall be the only persons recognised by the Company as having any title to the deceased Member's interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by such deceased Member with other persons. Subject to the provisions of Section 39 of the Law, for the purpose of this Article, legal personal representative means the executor or administrator of a deceased Member or such other person as the Board may, in its absolute discretion, decide as being properly authorised to deal with the shares of a deceased Member.

10.2 Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Board may deem sufficient or may elect to nominate some person to be registered as a transferee of such share.

10.3 On the presentation of the evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Member. Notwithstanding the foregoing, the Board shall, in any case, have the same right to decline or suspend registration or refuse registration as stipulated in Article 9.3 hereof as it would have had in the case of a transfer of the share by that Member before such Member's death or bankruptcy, as the case may be.

10.4 Where two or more persons are registered as joint holders of a share or shares, then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to the said share or shares and the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.

ORDINARY RESOLUTION, SPECIAL RESOLUTION AND SUPERMAJORITY RESOLUTION

11. Alteration of Capital

11.1 The Company may from time to time by Ordinary Resolution alter the conditions of its Memorandum to:

increase its share capital by new shares of such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;

consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares;

convert all or any of its paid up shares into stock and reconvert that stock into paid up

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shares of any denomination for the purpose of redenominating its share capital;

sub-divide its existing shares, or any of them into shares of a smaller amount provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived and may by such resolution determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may have any such preferred, deferred or other rights or be subject to any such restrictions as compared with the other or others as the Company has power to attach to unissued or new shares; or

cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.

11.2 The Board may settle as it considers expedient any difficulty which arises in relation to any consolidation and division under the last preceding Article and in particular but without prejudice to the generality of the foregoing may issue certificates in respect of fractions of shares or arrange for the sale of the shares representing fractions and the distribution of the new proceeds of sale (after deduction of the expenses of such sale) in due proportion amongst the Members who would have been entitled to the fractions, and for this purpose the Board may authorise some person to transfer the shares representing fractions to their purchaser or resolve that such net proceeds be paid to the Company for the Company's benefit. Such purchaser will not be bound to see to the application of the purchase money nor will his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

12. Special Resolution and Supermajority Resolution

12.1 Subject to the Law and the Articles, the Company may from time to time by Special Resolution:

(a) change its name;
(b) alter or add to the Articles;
(c) alter or add to the Memorandum with respect to any objects, powers or other matters specified therein;
(d) reduce its share capital and any capital redemption reserve fund; or
(e) effect a Merger under the Law.

12.2 Subject to the Law, the Company may, by Special Resolution, issue securities by way of Private Placement within the territory of the ROC in accordance with Applicable Public Company Rules; provided that, for issuance of corporate bonds which do not involve the grant of a warrant, option, or right of conversion or otherwise grant the holders of the bonds the right to acquire equity or similar rights by way of Private Placement within the territory of the ROC, the Company may do so by resolution of the Board in different tranches within one year from the date of the resolution of the Board in accordance with Applicable Public Company Rules.

12.3 Subject to the Law and Article 12.4 hereof, the following actions by the Company

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shall require the approval of the Members by a Supermajority Resolution:

(a) effecting any capitalization of distributable dividends and/or bonuses and/or any other amount prescribed under Article 17 hereof;

(b) effecting any Merger (except for any Merger which falls within the definition of "merger" and/or "consolidation" under the Law, which requires the approval of the Company by Special Resolution only), Share Swap or Spin-off of the Company;

(d) the transferring of the whole or any essential part of the business or assets of the Company; or

(e) acquiring or assuming the whole business or assets of another person, which has a material effect on the Company's operation.

12.4 Subject to the Law, the Company may be wound up voluntarily:

(a) if the Company resolves by Ordinary Resolution that it be wound up voluntarily because the Company is unable to pay its debts as they fall due; or

(b) if the Company resolves by Special Resolution that it be wound up voluntarily for reasons other than set out in Article 12.4(a) above.

12.5 Subject to the Applicable Law, the Company may by Supermajority Resolution, distribute its Capital Reserve, in whole or in part, by issuing new shares which shall be distributed as bonus shares to its existing Members in proportion to the number of shares being held by each of them or by cash distribution to its Members.

Variation of Rights Attaching to Shares

If, at any time, the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up, be varied with the sanction of a Special Resolution passed at a general meeting of the holders of the shares of the class. Notwithstanding the foregoing, if any modification or alteration in the Articles is prejudicial to the preferential rights of any class of shares, such modification or alteration shall be adopted by a Special Resolution and shall also be adopted by a Special Resolution passed at a separate meeting of Members of that class of shares. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith. To any such meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis.

DIVIDENDS AND CAPITALISATION

Dividends

14.1 The Board may, subject to approval by the Members by way of Ordinary Resolution

or, in the case of Article 12.3(a), Supermajority Resolution and subject to the Articles and any direction of the Company in general meeting, declare a dividend to be paid to the Members in proportion to the number of shares held by them, and such dividend may be paid in cash or shares.

14.2 Subject to the Applicable Law, no dividends or other distribution shall be paid except out of profits of the Company, realised or unrealised, out of share premium account or any reserve, fund or account as otherwise permitted by the Law. Except as otherwise provided by the rights attached to any shares, all dividends and other distributions shall be paid according to the number of the shares that a Member holds. If any share is issued on terms providing that it shall rank for dividend as from a particular date, that share shall rank for dividends accordingly

14.3 Subject to the Law and this Article and except as otherwise provided by the rights attached to any shares, the Company may distribute profits in accordance with a proposal for profits distribution approved by the Board and sanctioned by the Members by an Ordinary Resolution, in annual general meetings.

14.4 Upon the final settlement of the Company's accounts, if there is surplus profit (as defined below), the Company shall set aside two per cent (2%) to fifteen per cent (15%) as compensation to employees and no more than three per cent (3%) as remuneration for the Directors (including the Independent Directors). However, if the Company has accumulated losses, the Company shall reserve an amount thereof for making up the losses.

The employees' compensation referred to in the preceding paragraph may be distributed in the form of shares or in the form of cash, and may be distributed to employees of the Company and its Subsidiaries, whose qualification shall be determined by the Board. The Directors' remuneration shall be distributed in the form of cash. The distribution of employees' compensation and remuneration to the Directors shall be determined by a majority of the Directors at a meeting attended by two-thirds or more of the total number of Directors.

"Surplus profit" referred to above means the net profit before tax and for the avoidance of doubt, such amount is before any payment of compensation to employees and remuneration for the Directors.

14.5 The Company is in the growth stage. The Board shall prepare the dividend proposal by taking into account various factors it considers relevant including, but not limited to, the profit of the financial year, overall development, financial plans, capital need, projection of the industry and the Company's prospects, and submit the proposal for the Members' approval. For so long as the shares are listed on the TWSE in the ROC, if there are profits, in making the profits distribution recommendation, the Board shall set aside out of the profits of the Company for each financial year: (i) a reserve for payment of tax for the relevant financial year; (ii) an amount to offset losses incurred in previous years; (iii) ten per cent (10%) as reserve ("Statutory Reserve") (unless the Statutory Reserve has reached the total paid-up capital of the Company); and (iv) a special surplus reserve as required by the applicable securities authority of the ROC under the Applicable Public Company Rules. The remaining balance, if any, together with a part or whole of accumulated undistributed profits in the previous years, subject to the Law and the Applicable Public Company Rules and after having considered the financial, business and operational factors of the Company, may be distributed as

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dividends to Members in proportion to their shareholdings in the amount of no less than ten per cent (10%) of profit after tax of the relevant year. In the event that dividends are distributed to Members in a combination of share dividend and cash dividend, cash dividend shall be no less than ten per cent (10%) of the total dividends.

14.6 The Board shall fix any date as the record date for determining the Members entitled to receive any dividend or other distribution.

14.7 For the purpose of determining Members entitled to receive payment of any dividend or other distributions, the Directors may provide that the Register of Members be closed for transfers for five (5) days before the relevant record date or such other period consistent with the Applicable Public Company Rules subject to compliance with the Law.

14.8 No unpaid dividend shall bear interest as against the Company.

15. Capital Reserve and Power to Set Aside Profits

15.1 The Board may, before declaring a dividend, set aside out of the surplus or profits of the Company, such sum as it thinks proper as a reserve to be used to meet contingencies or for meeting the deficiencies for implementing dividend distribution plans or for any other purpose to which those funds may be properly applied. Pending application, such sums may be in the absolute discretion of the Board either be employed in the business of the Company or invested in such investment as the Board may from time to time think fit, and need not be kept separate from other assets of the Company. The Board may also, without placing the same to reserve, carry forward any profit which it decides not to distribute.

15.2 Subject to any direction from the Company in general meeting, the Board may on behalf of the Company exercise all the powers and options conferred on the Company by the Law in regard to the Capital Reserve. Subject to compliance with the Law, the Board may on behalf of the Company set off accumulated losses against credits standing in the Capital Reserve and make distributions out of the Capital Reserve.

16. Method of Payment

16.1 Any dividend, interest, or other monies payable in cash in respect of the shares may be paid by wire transfer to the Member's designated account or by cheque or draft sent through the post directed to the Member at such Member's address in the Register of Members, or to such person and to such address as the holder may in writing direct.

16.2 In the case of joint holders of shares, any dividend, interest or other monies payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the address of the holder first named in the Register of Members, or to such person and to such address as the holder may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.

16.3 For so long as the shares are listed on the TWSE in the ROC, the payment of any dividend shall comply with the Applicable Public Company Rules and the Law.

17. Capitalisation

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Subject to the Applicable Law and Article 12.3(a), the Board may capitalise any sum for the time being standing to the credit of the Capital Reserve or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Members.

MEETINGS OF MEMBERS

18. Annual General Meetings

18.1 The Company shall hold a general meeting as its annual general meeting within six months following the end of each fiscal year, which shall be called by the Board.

18.2 Subject to Article 18.1, the general meeting of the Company may be held at such time and place as the Board shall determine. For so long as the shares are listed on the TWSE in the ROC, unless otherwise provided by the Law, the physical general meetings shall be held in the ROC. If the Board resolves to hold a physical general meeting outside the ROC, the Company shall apply for the approval of the TWSE within two (2) days after the Board adopts such resolution. Where a general meeting is to be held outside the ROC, the Company shall engage a professional stock affairs agent in the ROC to handle the administration of such general meeting (including but not limited to the handling of the voting of proxies submitted by Members).

18.3 The general meeting may be held by means of video conference or other methods promulgated by the competent authority of the ROC. So long as the shares are listed on the TWSE in the ROC, the conditions, operation procedures and other matters of the general meeting held by means of video conference shall be in compliance with the Applicable Public Company Rules.

18.4 Members may participate in any general meeting by means of video conference or other communication facilities, as permitted by the Applicable Law, where all persons participating in the meeting communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

19. Extraordinary General Meetings

19.1 General meetings other than annual general meetings shall be called extraordinary general meetings.

19.2 The Board may convene an extraordinary general meeting of the Company whenever in their judgment such a meeting is necessary or is desirable.

19.3 For so long as the shares are listed on the TWSE in the ROC, the Board shall on a Member's requisition as defined in Article 19.4 forthwith proceed to convene an extraordinary general meeting of the Company.

19.4 A Member's requisition set forth in Article 19.3 is a requisition of one or more Members of the Company holding in the aggregate at the date of deposit of the requisition not less than three per cent (3%) of the total number of issued shares of the Company which as at that date have been held by such Member(s) for at least one year.

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19.5 The Member's requisition must state in writing the matters to be discussed at the extraordinary general meeting and the reason therefor.

19.6 If the Board does not within fifteen (15) days from the date of the deposit of the Member's requisition dispatch the notice of an extraordinary general meeting, the requisitionists may themselves convene an extraordinary general meeting in the same manner, as nearly as possible, as that in which general meetings may be convened by the Board. If it is proposed that the extraordinary general meeting be held outside the ROC, an application shall be submitted by such requisitionists to the TWSE for its prior approval.

19.7 For so long as the shares are traded on the TWSE in the ROC, any one or more Member(s) may summon an extraordinary general meeting, provided that such Member or Members shall hold more than fifty per cent. of the total issued shares of the Company for a continuous period of no less than three months. The number of the shares held by a Member and the period of which a Member holds such Shares, shall be calculated and determined based on the Register of Members as of the first day of the Book Closure Period. The Book Closure Period has the meaning as defined in Article 20.3.

Notice

20.1 Before the shares are listed on the TWSE in the ROC, at least five (5) days' notice of a general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, place and time at which the meeting is to be held and the general nature of business to be conducted at the meeting.

20.2 For so long as the shares are listed on the TWSE in the ROC, at least thirty (30) days' notice of an annual general meeting, and at least fifteen (15) days' notice of an extraordinary general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, place and time at which the meeting is to be held and the general nature of the business to be considered at the meeting. The notice may, as an alternative, be given by means of electronic transmission, after obtaining a prior written consent from the recipient(s) thereof.

20.3 For so long as the shares are listed on the TWSE in the ROC, the Board shall fix a record date for determining the Members entitled to receive notice of and to vote at any general meeting of the Company in accordance with Applicable Public Company Rules and close its Register of Members accordingly in accordance with Applicable Public Company Rules. The Board shall fix the period that the Register of Members shall be closed for transfers (the "Book Closure Period").

20.4 Subject to Article 23.4, the accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.

20.5 For so long as the shares are listed on the TWSE in the ROC, the Company shall announce to the public the notice of a general meeting, the proxy instrument, agendas and materials relating to the matters to be reported and discussed in the general meetings, including but not limited to, election or discharge of Directors, in accordance with Article 20.2 hereof, and shall transmit the same via the Market Observation Post System in accordance with Applicable Public Company Rules. If

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the voting power of a Member at a general meeting shall be exercised by way of a written ballot, the Company shall also send the written document for the Member to exercise his voting power together with the above mentioned materials in accordance with Article 20.2. The Directors shall prepare a meeting handbook of the relevant general meeting and supplemental materials, which will be made available to all Members and shall be transmitted to the Market Observation Post System in accordance with the Applicable Public Company Rules. If the Company's total paid-in capital exceeds NT$2 billion at the most recent financial year end date, or if the shareholding of foreign and PRC investors reaches more than 30% of the total number of issued shares as recorded in the Register of Members as of the date of the general meeting held in the most recent financial year, the foregoing transmission of information and materials via or to the Market Observation Post System shall be completed at least thirty (30) days for an annual general meeting.

20.6 For so long as the shares are listed on the TWSE in the ROC, the following matters shall be stated in the notice of a general meeting, with a summary of the major content to be discussed, and shall not be proposed as an extemporary motion:

(a) election or discharge of Directors,
(b) alteration of the Memorandum or Articles,
(c) capital deduction,
(d) application to terminate the public offering of the Shares,
(e) (i) dissolution, Merger, Share Swap or Spin-off, (ii) entering into, amending, or terminating any Lease Contract, Management Contract or Joint Operation Contract, (iii) transfer of the whole or any essential part of the business or assets of the Company, and (iv) acquisition or assumption of the whole of the business or assets of another person, which has a material effect on the operations of the Company,
(f) ratification of an action by Director(s) who engage(s) in business for himself or on behalf of another person that is within the scope of the Company's business,
(g) distribution of the whole or part of the surplus profit of the Company in the form of new shares, capitalization of Capital Reserve and any other amount in accordance with Article 17,
(h) making distributions of new shares or cash out of the Statutory Reserve, the premium received on the issuance of any shares and income from endowments received by the Company to its Members, and
(i) Private Placement of any equity-related securities to be issued by the Company.

The major content of the above matters may be announced at the website designated by the securities authority of the ROC or by the Company, and the Company shall specify the link to the website in the notice of the relevant general meeting.

20.7 For so long as the shares are listed on the TWSE in the ROC, the Board shall keep the Memorandum and Articles, minutes of general meetings, financial statements, the Register of Members, and the counterfoil of any corporate bonds issued by the

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Company at the Registered Office (if applicable) and the Company's stock affairs agent located in the ROC. Members may request, from time to time, by submitting document(s) evidencing his interests involved and indicating the designated scope of the inspection, access to inspect, review or make copies of the foregoing documents. If the relevant documents are kept by the Company's stock affairs agent, upon the request of any Member, the Company shall order the Company's stock affairs agent to provide such Member with the requested documents.

20.8 For so long as the shares are listed on the TWSE in the ROC, the Company shall make available all the statements and records prepared by the Board and the report prepared by the Audit Committee which will be submitted to the Members at the annual general meeting at the Registered Office (if applicable) and its stock affairs agent located in the ROC ten (10) days prior to such annual general meeting in accordance with Applicable Public Company Rules. Members may inspect and review the foregoing documents from time to time and may be accompanied by their lawyers or certified public accountants for the purpose of such inspection and review.

20.9 If the general meeting is convened by the Board or other person entitled to convene a general meeting in accordance with these Articles or any Applicable Law, the Board and such person may request the Company or the Company's stock affairs agent to provide the Register of Members. Upon the request, the Company shall (and shall order the Company's stock affairs agent to) provide the Register of Members.

21. Giving Notice

21.1 Any Notice or document, whether or not to be given or issued under the Articles from the Company to a Member, shall be in writing either by delivering it to such Member in person or by sending it by letter mail or courier service to such Member at his registered address as appearing in the Register of Members or at any other address supplied by him to the Company for the purpose or, as the case may be, by transmitting it to any such address. For the purpose of this Article, a notice may be sent via electronic means if so agreed to by the Members in writing.

21.2 Any Notice or other document shall be deemed to be effective when it is sent in accordance with Articles 20 and 21 of these Articles.

Any Notice or document may be given to a Member either in the Chinese language or the English language, subject to due compliance with all Applicable Law, rules and regulations.

This Article shall apply mutatis mutandis to the service of any document by a Member on the Company under the Articles.

22. Postponement of General Meeting

The Board may postpone any general meeting called in accordance with the provisions of the Articles provided that notice of postponement is given to each Member before the time for such meeting. A notice stating the date, time and place for the postponed meeting shall be given to each Member in accordance with the provisions of the Articles provided that in the event that the Members resolve to postpone the general meeting to a specified date which is not more than five days, Articles 20.1, 20.2, 20.3, 20.4, 20.5 and 21 do not apply and notice of the adjournment shall not be required.

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23 Quorum and Proceedings at General Meetings

23.1 No resolutions shall be adopted unless a quorum is present. Unless otherwise provided for in the Articles, Members present in person or by proxy or in the case of a corporate Member, by corporate representative, representing more than one-half of the total issued shares of the Company entitled to vote, shall constitute a quorum for any general meeting.

23.2 For so long as the shares are listed on the TWSE in the ROC, the Board shall submit business reports, financial statements and proposals for distribution of profits or allocation of losses prepared by it for the purposes of annual general meetings of the Company for ratification by the Members in a manner consistent with the Applicable Public Company Rules. After ratification by the Members at the general meeting, the Board shall distribute copies of or announce to the public the ratified financial statements and the Company's resolutions on distribution of profits or allocation of losses, to each Member or otherwise make the same available to the Members in accordance with the Applicable Public Company Rules.

23.3 Unless otherwise provided in the Articles, a resolution put to the vote of the meeting shall be decided on a poll.

23.4 For so long as the shares are listed on the TWSE in the ROC, if and to the extent permitted under the Law, nothing in the Articles shall prevent any Member from initiating proceedings in a court of competent jurisdiction for an appropriate remedy in connection with the convening of any general meeting or the passage of any resolution in violation of applicable laws or regulations or the Articles within 30 days after passing of such resolution. The Taiwan Taipei District Court, ROC, may be the court for adjudicating any disputes arising out of the foregoing.

23.5 Unless otherwise expressly required by the Law, the Memorandum or the Articles, any matter which has been presented for resolution, approval, confirmation or adoption by the Members at any general meeting may be passed by an Ordinary Resolution.

23.6 For so long as the shares are listed on the TWSE in the ROC, member(s) holding one per cent (1%) or more of the Company's total issued shares immediately prior to the relevant book close period, during which the Company closed its Register of Members, may propose to the Company in writing or by any electronic means designated by the Company one matter for discussion at an annual general meeting. The Company shall give a public notice in such manner and at such time as permitted by Applicable Law specifying the place and a period of not less than ten (10) days for Members to submit proposals. Proposals submitted for discussion at an annual general meeting shall be included in the agenda of the annual general meeting by the Board unless (a) the proposing Member(s) holds less than one per cent (1%) of the Company's total issued shares, (b) the matter of such proposal may not be resolved by a general meeting or the proposal exceeds 300 Chinese words; (c) the proposing Member(s) has proposed more than one proposal; or (d) the proposal is submitted to the Company outside the period fixed and announced by the Company for accepting Member(s)' proposal(s). If the purpose of the proposal is to urge the Company to promote public interests or fulfil its social responsibilities, the Board may accept such proposal to be discussed in general meeting.

23.7 The rules and procedures of general meetings shall be established by the Board and

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approved by an Ordinary Resolution, and such rules and procedures shall be in accordance with the Law, these Articles and the Applicable Public Company Rules.

24. Chairman to Preside

24.1 In the event that the general meeting is convened by the Board, the Chairman shall act as chairman at all meetings of the Members at which such person is present. In his absence the Directors who are present at the meeting of Members shall elect one from among themselves to act as the chairman at such meeting in lieu of the Chairman.

24.2 For so long as the shares are listed on the TWSE in the ROC, the chairman at all meetings of the Members shall be appointed or elected in accordance with the Applicable Public Company Rules.

25. Voting on Resolutions

25.1 Subject to any rights, privileges or restrictions attached to any share, every Member who (being an individual) is present in person or by proxy or (in the case of a corporation or other non-natural person) by duly authorized corporate representative(s) or by proxy shall have one vote for every share of which he is the holder. A Member who holds shares for benefit of others, need not use all his votes or cast all the votes he holds in the same way as he uses his votes in respect of shares he holds for himself. The qualifications, scope, methods of exercise, operating procedures and other matters with respect to exercising voting power separately shall comply with the Applicable Public Company Rules.

25.2 No person shall be entitled to vote at any general meeting or at any separate meeting of the holders of a class of shares unless he is registered as a Member on the record date for such meeting nor unless he has paid all the calls on all shares held by such Member.

25.3 Votes may be cast either in person or by proxy. A Member may appoint another person as his proxy by specifying the scope of appointment in the proxy instrument prepared by the Company to attend and vote at a general meeting, provided that a Member may appoint only one proxy under one instrument to attend and vote at such meeting.

25.4 Subject to the Law, for so long as the shares are listed on the TWSE in the ROC, the Company shall provide the Members with a method for exercising their voting power by way of electronic transmission. The method for exercising such voting power shall be described in the general meeting notice to be given to the Members if the voting power may be exercised by way of a written ballot or electronic transmission. Any Member who intends to exercise his voting power by way of a written ballot or by way of electronic transmission shall serve the Company with his voting decision at least two (2) days prior to the date of such general meeting. Where more than one voting decision are received from the same Member by the Company, the first voting decision shall prevail, unless an explicit written statement is made by the relevant Member to revoke the previous voting decision in the later-received voting decision. A Member who exercises his voting power at a general meeting by way of a written ballot or by electronic transmission shall be deemed to have appointed the chairman of the general meeting as his proxy to vote his shares at the general meeting only in the manner directed by his written instrument or electronic document. The chairman of

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the general meeting as proxy shall not have the power to exercise the voting rights of such Members with respect to any matters not referred to or indicated in the written or electronic document and/or any amendment to resolution(s) proposed at the said general meeting. For the purpose of clarification, such Members voting in such manner shall be deemed to have waived their voting rights with respect to any extemporary matters or amendment to resolution(s) proposed at the general meeting.

25.5 In the event any Member who intended to exercise his voting power by way of a written ballot or electronic transmission and has served his voting decision on the Company pursuant to Article 25.4 hereof later intends to attend the general meetings in person, he shall, at least two (2) days prior to the date of such general meeting, serve the Company with a separate notice revoking his previous voting decision. Such separate notice shall be sent to the Company in the same manner (e.g., by courier, registered mail or electronic transmission, as applicable) as the previous voting decision under Article 25.4 was given to the Company. Votes by way of a written ballot or electronic transmission shall remain valid if the relevant Member fails to revoke his voting decision before the prescribed time.

25.6 A Member who has served the Company with his voting decision in accordance with Article 25.4 for the purpose of exercising his voting power by way of a written ballot or by way of electronic transmission may appoint a person as his proxy to attend the meeting in accordance with the Articles, in which case the vote cast by such proxy shall be deemed to have revoked his previous voting decision served on the Company and the Company shall only count the vote(s) cast by such expressly appointed proxy at the meeting.

Proxies

26.1 The instrument of proxy shall be in the form approved by the Board from time to time and be expressed to be for a particular meeting only. The form of proxy shall include at least the following information: (a) instructions on how to complete such proxy, (b) the matters to be voted upon pursuant to such proxy, and (c) basic identification information relating to the relevant Member, proxy and the solicitor (if any). The form of proxy shall be provided to the Members together with the relevant notice for the relevant general meeting, and such notice and proxy materials shall be distributed to all Members on the same day.

26.2 An instrument of proxy shall be in writing, be executed under the hand of the appointor in writing, or, if the appointor is a corporation or other non-natural person, under the hand of an officer or attorney duly authorised for that purpose. A proxy need not be a Member of the Company

26.3 For so long as the shares are listed on the TWSE in ROC, subject to the Applicable Public Company Rules, except for an ROC trust enterprise or stock affair agents approved pursuant to Applicable Public Company Rules, save with respect to the Chairman being deemed appointed as proxy under Article 25.4, in the event a person acts as the proxy for two or more Members, the total number of issued and voting shares entitled to be voted as represented by such proxy shall be no more than three per cent (3%) of the total number of issued and voting shares of the Company immediately prior to the relevant Book Closure Period, during which the Company close its Register of Member; any vote in respect of the portion in excess of such three per cent (3%) threshold shall not be counted.

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26.4 In the event that a Member exercises his voting power by way of a written ballot or electronic transmission and has also authorised a proxy to attend a general meeting, then the voting power exercised by the proxy at the general meeting shall prevail. In the event that any Member who has authorised a proxy to attend a general meeting later intends to attend the general meeting in person or to exercise his voting power by way of a written ballot or electronic transmission, he shall, at least two (2) days prior to the date of such general meeting, serve the Company with a separate notice revoking his previous appointment of the proxy. Votes by way of proxy shall remain valid if the relevant Member fails to revoke his appointment of such proxy before the prescribed time.

26.5 The instrument of proxy shall be deposited at the Registered Office or the office of the Company's stock affairs agent in the ROC or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company not less than five (5) days before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, save with respect to the Chairman being deemed appointed as proxy under Article 25.4. Where more than one instrument to vote are received from the same Member by the Company, the first instrument received shall prevail, unless an explicit written statement is made by the relevant Member to revoke the previous proxy in the later-received instrument.

Proxy Solicitation

For so long as the shares are listed on the TWSE in the ROC, the use and solicitation of proxies shall be in compliance with the Applicable Public Company Rules, including but not limited to "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies."

Dissenting Member's Appraisal Right

28.1 Subject to compliance with the Law, in the event any of the following resolutions is passed at general meetings, any Member who has abstained from voting in respect of or voted against such matter and expressed his dissent therefor, in writing or verbally (with a record) before or during the meeting, may request the Company to purchase all of his shares at the then prevailing fair price:

(a) the Company proposes to enter into, amend, or terminate any Lease Contract, Management Contract or Joint Operation Contract;

(b) the Company transfers the whole or an essential part of its business or assets, provided that, the foregoing does not apply where such transfer is pursuant to the dissolution of the Company;

(c) acquires or assumes the whole business or assets of another person, which has a material effect on the operation of the Company;

(d) the Company proposes to undertake a Spin-off, Merger or Share Swap; or

(e) the Company generally assumes all the assets and liabilities of another person or generally assigns all its assets and liabilities to another person.

Shares which have been abstained from voting in accordance with this Article 28.1

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shall not be counted in determining the number of votes of the Members being cast at a general meeting but shall be counted towards the quorum of the general meeting.

28.2 Without prejudice to the Law, any Member exercising his rights in accordance with Article 28.1 (the "Dissenting Member") shall, within twenty (20) days from the date of the resolution passed at the general meeting, give his written notice of objection with the repurchase price proposed by him. If the Company and the Dissenting Member agree on a price at which the Company will purchase the Dissenting Member's shares, the Company shall make the payment within ninety (90) days from the date of the resolution passed at the general meeting. If, within ninety (90) days from the date of the resolution passed at the general meeting, the Company and the Dissenting Member fail to agree on a price at which the Company will purchase the Dissenting Member's shares, the Company shall pay the fair price it deems fit to the Dissenting Member within ninety (90) days from the date of the resolution passed at the general meeting. If the Company fails to pay the fair price it deems fit to the Dissenting Member within the ninety (90)-day period, the Company shall be deemed to agree on the repurchase price proposed by such Dissenting Member.

28.3 Without prejudice to the Law, if, within sixty (60) days from the date of the resolution of the general meeting, the Company and the Dissenting Member fail to agree on a price at which the Company will purchase such Dissenting Member's shares, then, within thirty (30) days immediately following the date of the expiry of such sixty-day period, the Company shall file a petition with the court against all the Dissenting Members for a determination of the fair price of the Shares held by all the Dissenting Members. The Taiwan Taipei District Court, ROC, may be the court of the first instance for this matter.

Notwithstanding the above provisions under this Article 28, nothing under this Article shall restrict or prohibit a Member from exercising his right under section 238 of the Law to payment of the fair value of his shares upon dissenting from a merger or consolidation.

Shares that May Not be Voted

29.1 Shares held:

(a) by the Company itself;

(b) by any entity in which the Company owns, legally or beneficially, more than fifty per cent (50%) of its total issued and voting share or share capital; or

(c) by any entity in which the Company, together with (i) the holding company of the Company and/or (ii) any Subsidiary of (a) the holding company of the Company or (b) the Company owns, legally or beneficially, directly or indirectly, more than fifty per cent (50%) of its issued and voting share or share capital.

shall not carry any voting rights nor be counted in the total number of issued shares at any given time but only for so long as the circumstances as set out in sub-paragraphs (a) to (c) (as applicable) above continue.

29.2 A Member who has a personal interest in any motion discussed at a general meeting, which interest may be in conflict with and impair those of the Company, shall abstain from voting such Member's shares in regard to such motion and such shares shall not

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be counted in determining the number of votes of the Members present at the said meeting. However, such shares may be counted in determining the number of shares of the Members present at such general meeting for the purposes of determining the quorum. The aforementioned Member shall also not vote on behalf of any other Member.

29.3 For so long as the shares are listed on the TWSE in the ROC, if the number of shares pledged by a Director at any time amounts to more than 50% of the total shares held by such Director at the time of his latest appointment, such pledged shares exceeding 50% of the total shares held by such Director at the time of his latest appointment, shall not carry any voting rights and such above-threshold shares shall not be counted in determining the number of votes of the Members present at a general meeting.

30. Voting by Joint Holders of Shares

In the case of joint holders, the joint holders should appoint among themselves one person to exercise the rights of a Member pursuant to the Applicable Public Company Rules. In case no agreement is reached among the joint holders, the vote of the senior who tenders a vote (whether in person or by proxy) shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.

31. Representation of Corporate Member

31.1 A corporation or non-natural person which is a Member may, by written instrument, authorise such person or persons as it thinks fit to act as its representative at any meeting of the Members and any person so authorised shall be entitled to exercise the same powers on behalf of the corporation or such non-natural person which such person represents as that corporation or non-natural person could exercise if it were an individual Member, and that Member shall be deemed to be present in person at any such meeting attended by its authorised representative or representatives.

31.2 Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation or non-natural person which is a Member.

32. Adjournment of General Meeting

The chairman of a general meeting may, with the consent of a majority in number of the Members present at any general meeting at which a quorum is present, and shall if so directed, adjourn the meeting. Unless the meeting is adjourned to a specific date, place and time announced at the meeting being adjourned, or if the meeting is adjourned for more than five days, a notice stating the date, place and time for the resumption of the adjourned meeting shall be given to each Member entitled to attend and vote thereat in accordance with the provisions of the Articles.

33. Directors Attendance at General Meetings

The Directors of the Company shall be entitled to receive notice of, attend and be heard at any general meeting.

DIRECTORS AND OFFICERS

Number and Term of Office of Directors

34.1 There shall be a Board consisting of no less than seven (7) and no more than eleven (11) persons. The term of office for each Director shall not exceed a period of three (3) years provided that in the event the expiration of the term of office of such Directors would otherwise leave the Company with no Directors, the term of office of such Directors shall be extended automatically to the date of the general meeting next following the expiration of such term, at which new Directors will be elected to assume office. Directors may be eligible for re-election. The Company may from time to time by Special Resolution increase or reduce the number of Directors, subject to the foregoing and the Applicable Law.

34.2 For so long as the shares are listed on the TWSE in the ROC, unless otherwise approved by the ROC competent authority, the number of Directors having a spousal relationship or Familial Relationship within the Second Degree of Kinship with any other Directors shall be less than half of the total number of Directors.

34.3 In the event that the Company convenes a general meeting for the election of Directors and any of the Directors elected does not meet the requirements provided in Article 34.2 hereof, the non-qualifying Director(s) who was elected with the fewest number of votes shall be deemed not to have been elected, to the extent necessary to meet the requirements provided for in Article 34.2 hereof. Any person who has already served as a Director but is in violation of the aforementioned requirements shall be automatically discharged from his office effective from such violation without any action required on behalf of the Company.

34.4 For so long as the shares are listed on the TWSE in the ROC, unless otherwise permitted under the Applicable Public Company Rules, there shall be at least three (3) Independent Directors accounting for not less than one-fifth of the total number of Directors. To the extent required by the Applicable Public Company Rules, at least one of the Independent Directors shall be domiciled in the ROC and at least one of them shall have accounting or financial expertise. Before the shares are listed on the TWSE in the ROC, the Board may resolve that the Company shall hold an election of Independent Director(s) at the general meeting.

34.5 For so long as the shares listed on the TWSE in the ROC, the Directors shall be nominated by adopting the candidate nomination system specified in the Applicable Public Company Rules.

34.6 Independent Directors shall have professional knowledge and shall maintain independence within the scope of their directorial duties, and shall not have any direct or indirect interests in the Company. The professional qualifications, restrictions on shareholdings and concurrent positions, and assessment of independence with respect to Independent Directors shall be consistent with the Applicable Public Company Rules.

Election of Directors

35.1 The Company may at a general meeting elect any person to be a Director, which vote shall be calculated in accordance with Article 35.2 below. Members present in person or by proxy, representing more than one-half of the total issued shares shall constitute a quorum for any general meeting to elect one or more Directors.

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35.2 The Director(s) shall be elected by Members upon a poll vote by way of cumulative voting (the manner of voting described in this Article to be referred to as "Cumulative Voting") in the following manner:

(a) on an election of Directors, the numbers of votes attached to each voting share held by a Member shall be cumulative and correspond to the number of Directors nominated for appointment at the general meeting;

(b) the Member(s) may vote all or part of their cumulated votes in respect of one or more Director candidates;

(c) such number of Director candidates receiving the highest number of votes in the same category (namely, independent or non-independent) of Directors to be elected shall be appointed; and

(d) where two or more Director candidates in the same category receive the same number of votes and as a result the total number of new Directors in such category intended to be appointed is exceeded, there shall be a draw by such Director candidates receiving the same number of votes to determine who shall be appointed; the chairman of the meeting shall draw for a Director nominated for appointment who is not present at the general meeting.

35.3 For so long as the shares are listed on the TWSE in the ROC, if the number of Independent Directors is less than three (3) persons due to the resignation or removal of such Independent Directors for any reason, the Company shall hold an election of Independent Directors at the next following general meeting. If all of the Independent Directors are resigned or removed, the Board shall hold, within sixty (60) days from the date of resignation or removal of last Independent Director, a general meeting to elect succeeding Independent Directors to fill the vacancies.

35.4 For so long as the shares are listed on the TWSE in the ROC, if the number of Directors is less than 5 persons due to the vacancy of Director(s) for any reason, the Company shall call an election of Director(s) at the next following general meeting to fill the vacancies. When the number of vacancies in the Board of the Company equals to one third of the total number of Directors elected, the Board shall hold, within sixty (60) days from the date of the occurrence of vacancies, a general meeting to elect succeeding Directors to fill the vacancies.

35.5 Where a legal entity is a Member, its authorized representative may be elected as Director of the Company in accordance with the Articles. If there are more than one authorized representatives, each of them may be nominated for election at a general meeting.

Removal of Directors

36.1 The Company may from time to time by Supermajority Resolution remove any Director from office. Where re-election of all Directors is effected prior to the expiration of the term of office of existing Directors, the term of office of all current Directors is deemed to have expired on the date of the re-election or any other date as otherwise resolved by the Members at the general meeting if the Members do not resolve that all current Directors will only retire at the expiration of their present term of office. Members present in person or by proxy, representing more than one-half of the total issued shares shall constitute a quorum for any general meeting to re-elect all

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Directors.

36.2 For so long as the shares are listed the TWSE in the ROC, in case a Director has, in the course of performing his duties, committed any act resulting in material damages to the Company or is in serious violation of applicable laws, regulations and/or the Articles, but has not been removed by a Supermajority Resolution, the Member(s) holding three per cent (3%) or more of the total number of issued shares of the Company may, within thirty (30) days after such general meeting, to the extent permissible under Applicable Law, institute a lawsuit to remove such Director. The Taiwan Taipei District Court, ROC, may be the court of for this matter.

37. Vacation of Office of Director

37.1 The office of Director shall be vacated:

(a) if the Director is removed from office pursuant to the Articles;

(b) if the Director dies;

(d) if the Director resigns his office by notice in writing to the Company;

(e) if the Director is the subject of a court order for his removal in accordance with Article 36.2; or

(f) with immediate effect without any action required on behalf of the Company if

(i) the Director has been adjudicated bankrupt or the court has declared a liquidation process in connection with the Director, and such Director has not been reinstated to his rights and privileges;

(ii) an order is made by any competent court or official on the grounds that the Director has no legal capacity, or his legal capacity is restricted according to Applicable Law;

(iii) the Director has been adjudicated of the commencement of assistantship (as defined under the Civil Code of the ROC) or similar declaration and such assistantship/declaration has not been revoked yet;

(iv) the Director has committed an offence as specified in the ROC statute of prevention of organizational crimes and subsequently has been adjudicated guilty by a final judgment, and (A) has not started serving the sentence, (B) has not completed serving the sentence, (C) the time elapsed after completion of serving the sentence or expiration of the probation is less than five years, or (D) was pardoned for less than five (5) years;

(v) the Director has committed an offence in terms of fraud, breach of trust or misappropriation and subsequently has been punished with imprisonment for a term of more than one (1) year by a final judgement, and (A) has not started serving the sentence, (B) has not completed serving the sentence, (C) the time elapsed after completion of serving the sentence or expiration

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of the probation is less than two years, or (D) was pardoned for less than two (2) years;

(vi) the Director has been adjudicated guilty by a final judgment for committing offenses under the Anti-Corruption Act of the ROC, and (A) has not started serving the sentence, (B) has not completed serving the sentence, (C) the time elapsed after completion of serving the sentence or expiration of the probation is less than two years, or (D) was pardoned for less than two (2) years; or

(vii) the Director has been dishonored for use of credit instruments, and the term of such sanction has not expired yet.

In the event that any of the foregoing events specified in Article 37(f) has occurred in relation to a candidate for election of Director, such person shall be disqualified from being elected as a Director.

37.2 For so long as the shares are listed on the TWSE in the ROC, in case a Director (other than an Independent Director) has, during the term of office as a Director, transferred more than one half of the Company's shares being held by him at the time he was elected, he shall, ipso facto, be removed automatically from the office of Director with immediate effect and in such case no approval from the Members shall be required.

37.3 For so long as the shares are listed on the TWSE in the ROC, the election of a newly elected Director (other than an Independent Director) shall be forthwith invalidated if said Director, before assuming office, transferred more than one half of the Company's shares being held by him at the time of his election as a Director, or if said Director, during the Book Closure Period prior to a general meeting, has transferred more than one half of the Company's shares being held by him.

38. Compensation of Directors

38.1 For so long as the shares are or listed on the TWSE in the ROC, the Board shall, in accordance with the Applicable Public Company Rules, establish a Compensation Committee comprised of at least three (3) members, one of whom shall be an Independent Director. The professional qualifications of the members of the Compensation Committee, the responsibilities, powers and other related matters of the Compensation Committee shall comply with the Applicable Public Company Rules. Upon the establishment of the Compensation Committee, the Board shall, by a resolution, adopt a charter for the Compensation Committee the provisions of which shall be consistent with the Applicable Public Company Rules. Before the shares are listed on the TWSE in the ROC, the Board may resolve to establish a Compensation Committee.

38.2 The compensation referred in the preceding Article shall include the compensation, stock option and other incentive payments of Directors and managers of the Company.

38.3 The compensation of the Directors may be decided by the Board by reference to recommendation made by the Compensation Committee (if established), the standard generally adopted by other enterprises in the same industry, and shall be paid in cash only. The Directors may also be paid all travel, hotel and other expenses properly incurred by them in attending and returning from the meetings of the Board, any

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committee appointed by the Board, general meetings of the Company, or in connection with the business of the Company or their duties as Directors generally. A Director is also entitled to distribution of profits of the Company if permitted by the Law, the Applicable Public Company Rules, the service agreement or other similar contract that he/she has entered into with the Company.

39. Defect in Election of Director

Subject to Article 23.4 and the Applicable Law, all acts done in good faith by the Board or by a committee of the Board or by any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the election of any Director, or that they or any of them were disqualified, be as valid as if every such person had been duly elected and was qualified to be a Director.

40. Directors to Manage Business

The business of the Company shall be managed and conducted by the Board. In managing the business of the Company, the Board may exercise all such powers of the Company as are not, by the Law or by the Articles, required to be exercised by the Company in general meeting subject, nevertheless, to the Articles, the provisions of the Law, and to such directions as may be prescribed by the Company in general meeting.

41. Powers of the Board of Directors

Without limiting the generality of Article 40 and subject to the Applicable Law, the Board may:

(a) appoint, suspend, or remove any manager, secretary, clerk, agent or employee of the Company and may fix their compensation and determine their duties;

(b) exercise all the powers of the Company to borrow money and to mortgage or charge or otherwise grant a security interest in its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party;

(c) appoint one or more Directors to the office of managing director or chief executive officer of the Company, who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company;

(d) appoint a person to act as manager of the Company's day-to-day business and may entrust to and confer upon such manager such powers and duties as it deems appropriate for the transaction or conduct of such business;

(e) by power of attorney, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions so vested in the attorney. Such attorney may, if so authorised, execute any deed or instrument in any

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manner permitted by the Law;

(f) procure that the Company pays all expenses incurred in promoting and incorporating the Company;

(g) delegate any of its powers (including the power to sub-delegate) to a committee of one or more persons appointed by the Board and every such committee shall conform to such directions as the Board shall impose on them. Subject to any directions or regulations made by the Directors for this purpose, the meetings and proceedings of any such committee shall be governed by the provisions of the Articles regulating the meetings and proceedings of the Board;

(h) delegate any of its powers (including the power to sub-delegate) to any person on such terms and in such manner as the Board sees fit;

(i) present any petition and make any application in connection with the liquidation or reorganisation of the Company;

(j) in connection with the issue of any share, pay such commission and brokerage as may be permitted by law; and

(k) authorise any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any agreement, document or instrument on behalf of the Company.

42. Register of Directors and Officers

42.1 The Board shall cause to be kept in one or more books at the Registered Office a Register of Directors and Officers in accordance with the Law and shall enter therein the following particulars with respect to each Director and Officer:

(a) first name and surname; and

(b) address.

42.2 The Board shall, within the period of thirty days from the occurrence of:

(a) any change among its Directors and Officers; or

(b) any change in the particulars contained in the Register of Directors and Officers,

cause to be entered on the Register of Directors and Officers the particulars of such change and the date on which such change occurred, and shall notify the Registrar of Companies in accordance with the Law.

43. Officers

The Officers shall consist of a Secretary and such additional Officers as the Board may determine all of whom shall be deemed to be Officers for the purposes of the Articles.

44. Appointment of Officers

The Secretary (and additional Officers, if any) shall be appointed by the Board from time to time.

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Duties of Officers

The Officers shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them by the Board from time to time.

Compensation of Officers

The Officers shall receive such compensation as the Board may determine.

Conflicts of Interest

47.1 Any Director, or any Director's firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company and such Director or such Director's firm, partner or company shall be entitled to compensation as if such Director were not a Director; provided that this Article 47.1 shall not apply to Independent Directors.

47.2 Notwithstanding anything to the contrary contained in this Article 47, a Director who is directly or indirectly interested in any matter under discussion at a meeting of the Directors or a contract or proposed contract or arrangement with the Company shall declare the nature and the essential contents of such interest at the relevant meeting of the Directors as required by the Applicable Law. If the Company proposes to enter into any transaction specified in Article 28.1 or effect other forms of mergers and acquisitions in accordance with Applicable Law, a Director who has a personal interest in such transaction shall declare the essential contents of such personal interest and the reason why he believes that the transaction is advisable or not advisable at the relevant meeting of the Directors and the general meeting as required by the Applicable Law. The Company shall, in the notice of a general meeting, disclose the essential contents of such Director's personal interest and the reason why such Director believes that the transaction is advisable or not advisable. The essential contents can be announced at the website designated by the securities authority of the ROC or by the Company, and the Company shall specify the link to the website in the notice of the relevant general meeting. Where the spouse, the person related to a Director by blood and within the second degree, or any company which has a controlling or controlled relation with a Director has interests in the matters under discussion in the meeting of the Directors, such Director shall be deemed to have a personal interest in the matter. The terms "controlling" and "controlled" shall be interpreted in accordance with the Applicable Public Company Rules.

47.3 Notwithstanding anything to the contrary contained in this Article 47, a Director who has a personal interest in the matter under discussion at a meeting of the Directors, which may conflict with and impair the interest of the Company, shall not vote nor exercise voting rights on behalf of another Director; the voting right of such Director who cannot vote or exercise any voting right as prescribed above shall not be counted in the number of votes of Directors present at the board meeting.

47.4 Notwithstanding anything to the contrary contained in this Article 47, a Director who is engaged in anything on his own account or on behalf of another person, which is within the scope of the Company's business, shall explain to the Members in a general meeting the essential contents of such conduct and seek their approval by Supermajority Resolution.

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Indemnification and Exculpation of Directors and Officers

48.1 The Directors and Officers of the Company and any trustee for the time being acting in relation to any of the affairs of the Company and every former director, officer or trustee and their respective heirs, executors, administrators, and personal representatives (each of which persons being referred to in this Article as an "indemnified party") shall be indemnified and secured harmless out of the assets of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and no indemnified party shall be answerable for the acts, receipts, neglects or defaults of the others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto, PROVIDED THAT this indemnity shall not extend to any matter in respect of any fraud, dishonesty or breach of duties provided under Article 48.4 which may attach to any of the said persons.

48.2 The Company may purchase and maintain insurance for the benefit of any Director or Officer of the Company against any liability incurred by him in his capacity as a Director or Officer of the Company or indemnifying such Director or Officer in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Director or Officer may be guilty in relation to the Company or any Subsidiary thereof.

48.3 To the extent permitted under the laws of the Cayman Islands, Members continuously holding one per cent (1%) or more of the total issued shares of the Company for six months or longer may send a written request to the Audit Committee to pass a resolution to authorise any Independent Director or Independent Directors, acting singly or collectively, to file a petition with the Taiwan Taipei District Court for and on behalf of the Company against any of the Directors. If within thirty days after receiving the above written request by the Member(s), the Audit Committee fails to pass the aforementioned resolution, or after the relevant resolution was passed by the Audit Committee, the relevant Independent Director(s) fail(s) to file such petition, such Member(s) may, to the extent permitted under the laws of the Cayman Islands, file a petition with the Taiwan Taipei District Court for and on behalf of the Company against the relevant Directors.

48.4 Without prejudice and subject to the general directors' duties that a Director owe to the Company and the Members under common law principals and the laws of the Cayman Islands, a Director shall perform his fiduciary duties of loyalty and due care of a good administrator in the course of conducting the Company's business, and shall indemnify the Company, to the maximum extent legally permissible, from any loss incurred or suffered by the Company arising from breach of his fiduciary duties. If a Director has made any profit for the benefit of himself or any third party as a result of any breach of his fiduciary duties, the Company shall, if so resolved by the Members by way of an Ordinary Resolution, take all such actions and steps as may be appropriate and to the maximum extent legally permissible to seek to recover such

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profit from such relevant Director. If a Director has, in the course of conducting the Company's business, violated any laws or regulations that causes the Company to become liable for any compensation or damages to any person, such Director shall become jointly and severally liable for such compensation or damages with the Company and if any reason such Director is not made jointly and severally liable with the Company, such Director shall indemnify the Company for any loss incurred or suffered by the Company caused by a breach of duties by such Director. The Officers, in the course of performing their duties to the Company, shall assume such duties and obligations to indemnify the Company in the same manner as if they are Directors.

MEETINGS OF THE BOARD OF DIRECTORS

49. Board Meetings

49.1 Board meetings shall be convened by the Chairman, and the Board may meet for the transaction of business, adjourn and otherwise regulate its meetings as it sees fit.

49.2 The Company shall hold regular meetings of the Board at least on a quarterly basis and for so long as the shares are listed on the TWSE in the ROC, such meetings shall be held in compliance with the Applicable Public Company Rules.

49.3 A resolution shall be passed by a majority vote of the Directors present at the meeting and entitled to vote on such resolution, and in the case of equality of votes the resolution shall fail. For these purposes, where Directors present and entitled to vote at the meeting do not cast a vote at the meeting, such Directors will be deemed to vote against the resolution.

49.4 A Director may be represented at any meetings of the Board by a proxy appointed in writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that of the appointing Director.

49.5 The instrument appointing a proxy shall be in writing in such form as the Directors may approve and may at any time be revoked in like manner, and notice of every such appointment or revocation in like manner.

49.6 A proxy must be a Director and can only act on behalf of one appointing Director at a meeting of the Board.

50. Notice of Board Meetings

50.1 The Chairman may, and the Secretary on the requisition of the Chairman shall, at any time summon a meeting of the Board.

50.2 Before the shares are listed on the TWSE in the ROC, at least forty-eight (48) hours prior notice shall be given for any meeting of the Board provided that in the case of urgent circumstances as agreed by a majority of the Directors, a meeting of the Board may be convened on short notice, or be held anytime after notice has been given to every Director or be convened without prior notice if all Directors agree. For so long as the shares are listed on the TWSE in the ROC, to convene a meeting of the Board, a notice setting forth therein the matters to be considered and if appropriate, approved at the meeting shall be given to each Director no later than seven (7) days prior to the scheduled meeting date. However, in the case of emergency as agreed by a majority of the Directors, the meeting may be convened with a shorter notice period in a manner

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consistent with the Applicable Public Company Rules. For the purpose of this Article, a notice may be sent via electronic means if so agreed to by the Directors.

51. Participation in Meetings by Video Conference

Directors may participate in any meeting of the Board by means of video conference or other communication facilities, as permitted by the Applicable Law, where all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

52. Quorum at Board Meetings

The quorum for a meeting of the Board shall be more than one-half of the total number of the Directors.

53. Board to Continue in the Event of Vacancy

The Board may act notwithstanding any vacancy in its number.

54. Chairman to Preside

The Chairman, if there be one, shall act as chairman at all meetings of the Board at which such person is present. In his absence a chairman shall be appointed or elected in accordance with the Applicable Public Company Rules.

55. Validity of Prior Acts of the Board

No regulation or alteration to the Articles made by the Company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation or alteration had not been made.

CORPORATE RECORDS

56. Minutes

The Board shall cause minutes to be duly entered in books provided for the purpose:

(a) of all elections and appointments of Officers;

(b) of the names of the Directors present at each meeting of the Board and of any committee appointed by the Board; and

(c) of all resolutions and proceedings of general meetings of the Members, meetings of the Board, meetings of managers and meetings of committees appointed by the Board.

57. Register of Mortgages and Charges

57.1 The Directors shall cause to be kept the Register of Mortgages and Charges required by the Law.

57.2 The Register of Mortgages and Charges shall be open to inspection by Members and creditors in accordance with the Law, at the Registered Office on every business day

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in the Cayman Islands, subject to such reasonable restrictions as the Board may impose, so that not less than two (2) hours in each such business day be allowed for inspection.

58. Form and Use of Seal

58.1 The Seal shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors in that behalf; and, until otherwise determined by the Directors, the Seal shall be affixed in the presence of a Director or the Secretary or an assistant secretary or some other person authorised for this purpose by the Directors or the committee of Directors.

58.2 Notwithstanding the foregoing, the Seal may without further authority be affixed by way of authentication to any document required to be filed with the Registrar of Companies in the Cayman Islands, and may be so affixed by any Director, Secretary or assistant secretary of the Company or any other person or institution having authority to file the document as aforesaid.

58.3 The Company may have one or more duplicate Seals, as permitted by the Law; and, if the Directors think fit, a duplicate Seal may bear on its face of the name of the country, territory, district or place where it is to be issued.

TENDER OFFER AND ACCOUNTS

59. Tender Offer

For so long as the shares are listed on the TWSE in the ROC, within fifteen (15) days after the receipt of the copy of a tender offer application form and relevant documents by the Company or its Litigious and Non-Litigious Agent, the Board shall resolve to recommend to the Members whether to accept or object to the tender offer and make a public announcement of the following:

(a) the types and number of the shares held by the Directors and the Members holding more than ten per cent (10%) of the total issued shares in their own names or in the names of other persons.

(b) the result of the verification on the identity and the financial conditions of the offeror, the fairness of the tender offer conditions and the reasonableness of the offeror's fund source, and recommendations to the Members on the tender offer, which shall specify the Directors' specific consenting or dissenting opinions on the tender offer and the reason(s) therefor.

(c) whether there is any material change in the financial condition of the Company after the submission of the latest financial report and an explanation of the change, if any.

(d) the types, numbers and amount of the shares of the tender offeror or its affiliates held by the Directors and the Members holding more than ten per cent (10%) of the total number of issued shares held in their own names or in the name of other persons.

60. Books of Account

60.1 The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to:

(a) all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) all assets and liabilities of the Company.

Such books of account shall be kept for at least five (5) years from the date they are prepared.

60.2 Such records of account shall be kept and proper books of account shall not be deemed to be kept with respect to the matters aforesaid if there are not kept, at such place as the Board thinks fit, such books as are necessary to give a true and fair view of the state of the Company's affairs and to explain its transactions.
60.3 The instruments of proxy, documents, forms/statements and information in electronic media prepared in accordance with the Articles and relevant rules and regulations shall be kept for at least one (1) year. However, if a Member institutes a lawsuit with respect to such instruments of proxy, documents, forms/statements and/or information mentioned herein, they shall be kept until the conclusion of the litigation if longer than one (1) year.

61. Financial Year End

Unless the Directors otherwise specify, the financial year of the Company:

(a) shall end on 31st December in the year of its incorporation and each following year; and
(b) shall begin when it was incorporated and on 1st January each following year.

AUDIT COMMITTEE

62. Number of Audit Committee Members

For so long as the shares are listed on the TWSE in the ROC, the Board shall set up an Audit Committee. The Audit Committee shall comprise solely of Independent Directors and all Independent Directors shall be members of the Audit Committee. The number of Audit Committee members shall not be less than three (3). One of the Audit Committee members shall be appointed as the convener to convene meetings of the Audit Committee from time to time and at least one of the Audit Committee members shall have accounting or financial expertise. A valid resolution of the Audit Committee requires approval of one-half or more of all its members. Before the shares are listed on the TWSE in the ROC, the Board may resolve to establish an Audit Committee.

63. Powers of Audit Committee

63.1 The Audit Committee (if established) shall have the responsibilities and powers as specified under the Applicable Public Company Rules. Any of the following matters of the Company shall require the consent of one-half or more of all Audit Committee members and be submitted to the Board for resolution:

(a) adoption of or amendment to an internal control system;

(b) assessment of the effectiveness of the internal control system;
(c) adoption of or amendment to the handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, or endorsements or guarantees for others;
(d) any matter relating to the personal interest of the Directors;
(e) a material asset or derivatives transaction;
(f) a material monetary loan, endorsement, or provision of guarantee;
(g) the offering, issuance, or Private Placement of any equity-related securities;
(h) the hiring or dismissal of an attesting certified public accountant, or the compensation given thereto;
(i) the appointment or discharge of a financial, accounting, or internal auditing officer;
(j) approval of annual and semi-annual/second quarter financial reports (if applicable under the Applicable Public Company Rules); and
(k) any other matter so determined by the Company from time to time or required by any competent authority overseeing the Company.

With the exception of item (j), any other matter that has not been approved with the consent of one-half or more of all Audit Committee members may be undertaken upon the consent of two-thirds or more of the members of the Board, and the resolution of the Audit Committee shall be recorded in the minutes of the Directors meeting.

63.2 Subject to the Applicable Law and to the extent permitted under the laws of the Cayman Islands, the Independent Directors of the Audit Committee shall supervise the execution of business operations of the Company, and may at any time or from time to time investigate the business and financial conditions of the Company, examine the accounting books and documents, and request the Board or officers to report on matters referred to above. Subject to the Applicable Law and to the extent permitted under the laws of the Cayman Islands, the Board may authorise any Independent Director of the Audit Committee to appoint on behalf of the Company, a practicing lawyer and independent auditors to conduct the examination.

63.3 The Audit Committee shall audit the various financial statements and records prepared by the Board for submission to the general meeting, and shall report their findings and opinions at such meeting.

63.4 Subject to compliance with the Law, before the meeting of the Directors resolves any matter specified in Article 28.1 or other mergers and acquisitions in accordance with the Applicable Law, the Audit Committee shall review the fairness and reasonableness of the relevant merger and acquisition plan and transaction, and report its review results to the meeting of the Directors and the general meeting; provided, however, that such review results need not be submitted to the general meeting if the approval of the Members is not required under the Applicable Law. When the Audit Committee

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conducts the review, it shall engage an independent expert to issue an opinion on the fairness of the share exchange ratio, cash consideration or other assets to be offered to the Members. The review results of the Audit Committee and the fairness opinion issued by the independent expert shall be distributed to the Members, along with the notice of the general meeting; provided, however, that the Company can only report matters relating to such merger and acquisition at the next following general meeting if the approval of the Members is not required under the Applicable Law. Such review results and fairness opinion shall be deemed to have been distributed to the Members if the same have been uploaded onto the website designated by the securities authority of the ROC and made available to the Members for their inspection and review at the venue of the general meeting.

VOLUNTARY DISSOLUTION AND WINDING-UP

64. Voluntary Dissolution and Winding-Up

64.1 The Company may be voluntarily wound-up in accordance with Article 12.4.

64.2 If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution, divide amongst the Members in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members subject to the Applicable Law. The liquidator may, with the like sanction, vest the whole or any part of such assets in the trustees upon such trusts for the benefit of the Members as the liquidator shall think fit, but so that no Member shall be compelled to accept any shares or other securities or assets whereon there is any liability.

CHANGES TO CONSTITUTION

65. Changes to Articles

Subject to the Law and to the conditions contained in its Memorandum, the Company may, by Special Resolution, alter or add to its Articles.

LITIGIOUS AND NON-LITIGIOUS AGENT

66. Appointment of Litigious and Non-Litigious Agent

For so long as the shares are listed on the TWSE in the ROC, the Company shall appoint a Litigious and Non-Litigious Agent pursuant to the Applicable Law to act as the Company's responsible person in the ROC under the Securities and Exchange Law of the ROC to handle matters stipulated in the Securities and Exchange Law of the ROC and the relevant rules and regulations thereto. The Litigious and Non-Litigious Agent shall be an individual who has a residence or domicile in the ROC.

OTHERS

67. ROC Securities Laws and Regulations

For so long as the shares are listed on the TWSE in the ROC, the qualifications, composition,

appointment, removal, exercise of functions and other matters with respect to the Directors, Independent Directors, Compensation Committee and Audit Committee which are required to be followed by the Company shall comply with the applicable ROC securities laws and regulations.

68. Shareholder Protection Mechanism

If the Company proposes to undertake:

(a) a merger or consolidation which will result in the Company being dissolved;

(b) a sale, transfer or assignment of all of the Company's assets and businesses to another entity;

(d) a Spin-off,

which would result in the termination of the Company's listing on the TWSE, and where (in the case of (a) above) the shares in the surviving entity, (in the case of (b) above) the shares in the transferee, (in the case of (c) above) the shares in the entity whose shares has been allotted or who pays cash or uses its assets as the consideration in exchange for the Company's shares and, (in the case of (d) above) the shares in the existing or newly incorporated spun-off company, are not listed on the TWSE or the Taipei Exchange, then in addition to any requirements to be satisfied under the Law, such action shall be first approved at a general meeting by a resolution passed by Members holding two-thirds or more of the votes of the total number of issued and voting shares of the Company.

69. Social Responsibilities

When the Company conducts the business, the Company shall comply with the laws and regulations as well as business ethics and may take actions which will promote public interests in order to fulfill its social responsibilities.

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(II). Rules of Procedure for Shareholders' Meetings

HY ELECTRONIC (CAYMAN) LIMITED

Rules of Procedure for Shareholders' Meetings

Purpose:
To establish a strong governance system and sound supervisory capabilities for the Company's Shareholders' Meetings, and to strengthen management capabilities, with rules promulgated for compliance.
Foundation:
These Rules are adopted pursuant to Article 5 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies. The rules of procedures for the Company's Shareholders' Meetings, except as otherwise provided by laws or regulations, shall be as provided in these Rules.
Shareholders' Meeting Convocation and Notification:
3.1 Unless otherwise provided by law or regulation, the Company's Shareholders' Meetings shall be convened by the Board of Directors.

3.2 Where the Company intends to convene a virtual-only Shareholders' Meeting, the rules thereof shall be, except as otherwise provided for in the Regulations Governing the Administration of Shareholder Services of Public Companies, specified in the Company's Articles of Association and shall be resolved by the Board of Directors. In addition, a Shareholder's Meeting may be convened in the form of virtual-only meeting after resolved by more than two-third of all votes in a Board of Directors meeting attended by a majority of all directors.

3.3 Changes to how the Company convenes its Shareholders' Meeting shall be resolved by the Board of Directors, and shall be made no later than the mailing of the Shareholders' Meeting notice.

3.4 The Company shall prepare electronic versions of the Shareholders' Meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular Shareholders' Meeting or before 15 days before the date of a Extraordinary General Shareholders' Meeting. The Company shall, in addition, prepare electronic versions of the Shareholders' Meeting agenda and supplemental meeting materials and upload them to the Market Observation Post System (MOPS) before 21 days before the date of the regular Shareholders' Meeting or before 15 days before the date of the Extraordinary General Shareholders' Meeting. If, however, the Company has the paid-in capital of NT$10 billion or more as of the last day of the most current fiscal year, or total shareholding of foreign shareholders and PRC shareholders reaches 30% or more as recorded in the register of shareholders of the Shareholders' Meeting held in the immediately preceding year, transmission of these electronic files shall be made by 30 days before the regular Shareholders' Meeting. Furthermore, 15 days before the date of the Shareholders' Meeting, the Company shall also have prepared the Shareholders' Meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent designated thereby.

3.5 The reasons for convening a Shareholders' Meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

3.6 Election or dismissal of directors or independent directors, amendments to the Articles of Association, reduction of capital, application for the approval of ceasing its status as a

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public Company, approval of competing with the Company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act, Articles 26-1 and 43-6 of the Securities Exchange Act, Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out and the essential contents explained in the notice of the reasons for convening the Shareholders' Meeting. None of the above matters may be raised by an extraordinary motion.

3.7 Where re-election of all directors and independent directors as well as their inauguration date is stated in the notice of the reasons for convening the Shareholders' Meeting, after the completion of the re-election in said meeting such inauguration date may not be altered by any extraordinary motion or otherwise in the same meeting.

3.8 A shareholder holding one percent or more of the total number of issued shares may submit to the Company a proposal for discussion at a regular Shareholders' Meeting. The number of items so proposed is limited to one only, and no proposal containing more than one item will be included in the meeting agenda. When the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the Board of Directors may exclude it from the agenda. A shareholder may propose a recommendation for urging the corporation to promote public interests or fulfill its social responsibilities, provided procedurally the number of items so proposed is limited only to one in accordance with Article 172-1 of the Company Act, and no proposal containing more than one item will be included in the meeting agenda.

3.9 Prior to the book closure date before a regular Shareholders' Meeting is held, the Company shall publicly announce its acceptance of shareholder proposals in writing or electronically, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days.

3.10 Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the regular Shareholders' Meeting and take part in discussion of the proposal.

3.11 Prior to the date for issuance of notice of a Shareholders' Meeting, the Company shall inform the shareholders who submitted proposals of the proposal screening results and shall list in the meeting notice the proposals that conform to the provisions of this article. At the Shareholders' Meeting the Board of Directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.

Regulations for Proxy Form:

4.1 For each Shareholders' Meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by the Company and stating the scope of the proxy's authorization.

4.2 A shareholder may issue only one proxy form and appoint only one proxy for any given Shareholders' Meeting and shall deliver the proxy form to the Company five days before the date of the Shareholders' Meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail unless a declaration is made to cancel the previous proxy appointment.

4.3 After a proxy form has been delivered to the Company, if the shareholder intends to attend the meeting in person or to exercise voting rights by correspondence or electronically, a written notice of proxy cancellation shall be submitted to the Company before two business days before the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

4.4 If, after a proxy form is delivered to the Company, a shareholder wishes to attend the Shareholders' Meeting online, a written notice of proxy cancellation shall be submitted to the Company two business days before the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

Principles for Place and Location for Convening a Shareholders' Meeting:

5.1 The venue for a Shareholders' Meeting shall be the premises of the Company, or a place easily accessible to shareholders and suitable for a Shareholders' Meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

5.2 The restrictions on the place of the meeting shall not apply when the Company convenes a virtual-only Shareholders' Meeting.

Furnishing of Attendance Book and Relevant Documents:

6.1 The Company shall specify in its Shareholders' Meeting notices the time during which attendance registrations for shareholders, solicitors and proxies will be accepted, the place to register for attendance, and other matters for attention.

6.2 The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel assigned to handle the registrations. For virtual Shareholders' Meetings, shareholders may begin to register on the virtual meeting platform 30 minutes before the meeting starts. Shareholders completing registration will be deemed as attend the Shareholders' Meeting in person.

6.3 Shareholders shall attend Shareholders' Meetings based on attendance cards, sign-in cards, or other certificates of attendance. The Company may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders.

6.4 Solicitors soliciting proxy forms shall also bring identification documents for verification.

6.5 The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors or supervisors, pre-printed ballots shall also be furnished.

6.6 When the government or a juristic person is a shareholder, it may be represented by more than one representative at a Shareholders' Meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

6.7 In the event of a virtual Shareholders' Meeting, shareholders wishing to attend the meeting online shall register with the Company two days before the meeting date.

6.8 In the event of a virtual Shareholders' Meeting, the Company shall upload the meeting agenda book, annual report, and other meeting materials to the virtual meeting platform at least 30 minutes before the meeting starts, and keep this information disclosed until the end of the meeting.

6.9 When convening a virtual Shareholders' Meeting, the convocation notice shall specify the following details:

6.9.1 How shareholders attend the virtual meeting and exercise their rights.

6.9.2 Actions to be taken if the virtual meeting platform or participation in the virtual meeting is obstructed due to natural disasters, accidents or other force majeure events, at least covering the following particulars:

6.9.2.1 To what time the meeting is postponed or from what time the meeting will resume if the above obstruction continues and cannot be removed, and the date to which the meeting is postponed or on which the meeting will resume.

6.9.2.2 Shareholders not having registered to attend the affected virtual Shareholders' Meeting shall not attend the postponed or resumed session.

6.9.2.3 In case of a hybrid Shareholders' Meeting, when the virtual meeting cannot be continued, if the total number of shares represented at the meeting, after deducting those represented by shareholders attending the virtual Shareholders' Meeting online, meets the minimum legal requirement for a shareholder meeting, then the Shareholders' Meeting shall continue. The shares represented by shareholders attending the virtual meeting online shall be counted towards the total number of shares represented by shareholders present at the meeting, and the shareholders attending the virtual meeting online shall be deemed abstaining from voting on all proposals on meeting agenda of that Shareholders' Meeting.

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6.9.2.4 Actions to be taken if the outcome of all proposals have been announced and extraordinary motion has not been carried out.

6.9.3 To convene a virtual-only Shareholders' Meeting, appropriate alternative measures available to shareholders with difficulties in attending a virtual Shareholders' Meeting online shall be specified. Apart from circumstances stated in paragraph 6, Article 44-9 of the Regulations Governing the Administration of Shareholder Services of Public Companies, the Company shall at least provide connection equipment and necessary assistance to shareholders and set out the application period with the Company and other matters of notice.

Chair and Appointed Personnel in the Shareholders' Meeting:

7.1 If a Shareholders' Meeting is convened by the Board of Directors, the meeting shall be chaired by the chairperson of the board. When the chairperson of the board is on leave or for any reason unable to exercise the powers of the chairperson, the vice chairperson shall act in place of the chairperson; if there is no vice chairperson or the vice chairperson also is on leave or for any reason unable to exercise the powers of the vice chairperson, the chairperson shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed to act as chair. Where the chairperson does not make such a designation, the managing directors or the directors shall select from among themselves one person to serve as chair.

7.2 When a managing director or a director serves as chair, as referred to in the preceding paragraph, the managing director or director shall be one who has held that position for six months or more and who understands the financial and business conditions of the Company. The same shall be true for a representative of a juristic person director that serves as chair.

7.3 It is advisable that Shareholders' Meetings convened by the Board of Directors be chaired by the chairperson of the board in person and attended by a majority of the directors, at least one supervisor in person, and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minutes.

7.4 If a Shareholders' Meeting is convened by a party with power to convene but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

7.5 The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a Shareholders' Meeting in a non-voting capacity.

Documentation of a shareholders' meeting by audio or video:

8.1 The Company, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the Shareholders' Meeting, and the voting and vote counting procedures.

8.2 The recorded materials of the preceding paragraph shall be retained for at least one year. However, if a shareholder raises a litigious claim against the Company according to Article 189 of The Company Act, the abovementioned documents must be retained until the end of the litigation.

8.3 Where a Shareholders' Meeting is held online, the Company shall keep records of shareholder registration, sign-in, check-in, questions raised, votes cast and results of votes counted by the Company, and continuously audio and video record, without interruption, the proceedings of the virtual meeting from beginning to end.

8.4 The information and audio and video recording in the preceding paragraph shall be properly kept by the Company during the entirety of its existence, and copies of the audio and video recording shall be provided to and kept by the party appointed to handle matters of the virtual meeting.

8.5 In case of a virtual Shareholders' Meeting, the Company is advised to audio and video record the back-end operation interface of the virtual meeting platform.

Calculation of Shares Represented by Attending Shareholders and Calling Meeting to Order:

9.1 Attendance at Shareholders' Meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in, and the shares checked in on the

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virtual meeting platform, plus the number of shares whose voting rights are exercised by correspondence or electronically.

9.2 The chair shall call the meeting to order at the appointed meeting time and disclose information concerning the number of nonvoting shares and number of shares represented by shareholders attending the meeting.

9.3 However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned. In the event of a virtual Shareholders' Meeting, the Company shall also declare the meeting adjourned at the virtual meeting platform.

9.4 If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another Shareholders' Meeting shall be convened within one month. In the event of a virtual Shareholders' Meeting, shareholders intending to attend the meeting online shall re-register with the Company in accordance with Article 6.

9.5 When, prior to the conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chairperson may resubmit the tentative resolution for a vote by the Shareholders' Meeting pursuant to Article 174 of the Company Act.

Discussion of proposals:

10.1 If a Shareholders' Meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of Directors. Votes shall be cast on each separate proposal on the agenda (including extraordinary motions and amendments to the original proposals set out in the agenda). The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the Shareholders' Meeting.

10.2 The provisions of the preceding paragraph apply mutatis mutandis to a Shareholders' Meeting convened by a party with the power to convene that is not the Board of Directors.

10.3 The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the Shareholders' Meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the Board of Directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

10.4 The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed, call for a vote, and schedule sufficient time for voting.

Shareholder speech:

11.1 Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair.

11.2 A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

11.3 Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may

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terminate the speech.

11.4 When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.

11.5 When a juristic person shareholder appoints two or more representatives to attend a Shareholders' Meeting, only one of the representatives so appointed may speak on the same proposal.

11.6 After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

11.7 Where a virtual Shareholders' Meeting is convened, shareholders attending the virtual meeting online may raise questions in writing at the virtual meeting platform from the chair declaring the meeting open until the chair declaring the meeting adjourned. No more than two questions for the same proposal may be raised. Each question shall contain no more than 200 words. The regulations in paragraphs 1 to 5 do not apply.

11.8 As long as questions so raised in accordance with the preceding paragraph are not in violation of the regulations or beyond the scope of a proposal, the questions shall be disclosed to the public at the virtual meeting platform.

Calculation of voting shares and recusal system:

12.1 Voting at a Shareholders' Meeting shall be calculated based on the number of shares.

12.2 With respect to resolutions of Shareholders' Meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

12.3 When a shareholder is a party of interest in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of the Company, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

12.4 The number of shares for which voting rights may not be exercised under the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

12.5 With the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed three percent of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Voting of Proposals:

13.1 A shareholder shall be entitled to one vote for each share held, except when the shares are restricted to shares or are deemed non-voting shares under Article 179, Paragraph 2 of the Company Act.

13.2 When the Company holds a shareholder meeting, it shall adopt exercise of voting rights by electronic means and may adopt exercise of voting rights by correspondence. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the Shareholders' Meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that the Company avoid the submission of extraordinary motions and amendments to original proposals.

13.3 A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company before two days before the date of the Shareholders' Meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

13.4 After a shareholder has exercised voting rights by correspondence or electronic means,

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in the event the shareholder intends to attend the Shareholders' Meeting in person or online, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, before two business days before the date of the Shareholders' Meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a Shareholders' Meeting, the voting rights exercised by the proxy in the meeting shall prevail.

13.5 Except as otherwise provided in the Company Act and in the Company's Articles of Association, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote for each proposal, the chair or a person designated by the chair shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the Market Observation Post System (MOPS).

13.6 When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

13.7 Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company.

13.8 Vote counting for Shareholders' Meeting proposals or elections shall be conducted in public at the place of the Shareholders' Meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

13.9 When the Company convenes a virtual Shareholders' Meeting, after the chair declares the meeting open, shareholders attending the meeting online shall cast votes on proposals and elections on the virtual meeting platform before the chair announces the voting session ends or will be deemed abstained from voting.

13.10 In the event of a virtual Shareholders' Meeting, votes shall be counted at once after the chair announces the voting session ends, and results of votes and elections shall be announced immediately.

13.11 When the Company convenes a hybrid Shareholders' Meeting, if shareholders who have registered to attend the meeting online in accordance with Article 6 decide to attend the physical Shareholders' Meeting in person, they shall revoke their registration two days before the Shareholders' Meeting in the same manner as they registered. If their registration is not revoked within the time limit, they may only attend the Shareholders' Meeting online.

13.12 When shareholders exercise voting rights by correspondence or electronic means, unless they have withdrawn the declaration of intent and attended the Shareholders' Meeting online, except for extraordinary motions, they will not exercise voting rights on the original proposals or make any amendments to the original proposals or exercise voting rights on amendments to the original proposal.

Election:

14.1 The election of directors or supervisors at a Shareholders' Meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and supervisors and the numbers of votes with which they were elected, and the names of directors and supervisors not elected and number of votes they received.

14.2 The ballots for the election referred to in the preceding paragraph shall be sealed with

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the signatures of the monitoring personnel and kept in proper custody for at least one year. However, if a shareholder raises a litigious claim against the Company according to Article 189 of The Company Act, the abovementioned documents must be retained until the end of the litigation.

Recording, Signing and Announcement of Meeting Minutes:

15.1 Matters relating to the resolutions of the Shareholders' Meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form.

15.2 The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the Market Observation Post System (MOPS).

15.3 The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their voting results (including the number of voting rights) and disclose the number of voting rights won by each candidate in the event of an election of directors or supervisors. The minutes shall be retained for the duration of the existence of the Company.

15.4 Where a virtual Shareholders' Meeting is convened, in addition to the particulars to be included in the meeting minutes as described in the preceding paragraph, the start time and end time of the Shareholders' Meeting, how the meeting is convened, the chair's and secretary's name, and actions to be taken in the event of disruption to the virtual meeting platform or participation in the meeting online due to natural disasters, accidents or other force majeure events, and how issues are dealt with shall also be included in the minutes.

15.5 When convening a virtual-only shareholder meeting, other than compliance with the requirements in the preceding paragraph, the Company shall specify in the meeting minutes alternative measures available to shareholders with difficulties in attending a virtual-only Shareholders' Meeting online.

Public disclosure:

16.1 On the day of a Shareholders' Meeting, the Company shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation, the number of shares represented by proxies and the number of shares represented by shareholders attending the meeting by correspondence or electronic means, and shall make an express disclosure of the same at the place of the Shareholders' Meeting. In the event a virtual Shareholders' Meeting, the Company shall upload the above meeting materials to the virtual meeting platform at least 30 minutes before the meeting starts, and keep this information disclosed until the end of the meeting.

16.2 During the Company's virtual Shareholders' Meeting, when the meeting is called to order, the total number of shares represented at the meeting shall be disclosed on the virtual meeting platform. The same shall apply whenever the total number of shares represented at the meeting and a new tally of votes is released during the meeting.

16.3 If matters put to a resolution at a Shareholders' Meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation (or Taipei Exchange Market) regulations, the Company shall upload the content of such resolution to the Market Observation Post System (MOPS) within the prescribed time period.

Maintenance of Venue Order:

17.1 Staff handling administrative affairs of a Shareholders' Meeting shall wear identification cards or arm bands.

17.2 The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

17.3 At the place of a Shareholders' Meeting, if a shareholder attempts to speak through any

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device other than the public address equipment set up by the Company, the chair may prevent the shareholder from so doing.

17.4 Shareholders who contravene the rules of proceedings and refuse to comply with the chair's corrections, thereby obstructing the progress of the Shareholders' Meeting despite being restrained, may be requested by the chair to leave the premises, with the assistance of appointed inspectors or security personnel.

Recess and resumption of a Shareholders' Meeting:

18.1 When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

18.2 If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the Shareholders' Meeting may adopt a resolution to resume the meeting at another venue.

18.3 A resolution may be adopted at a Shareholders' Meeting to defer or resume the meeting within five days in accordance with Article 182 of the Company Act.

Disclosure of information at virtual meetings:

In the event of a virtual Shareholders' Meeting, the Company shall disclose real-time results of votes and election immediately after the end of the voting session on the virtual meeting platform according to the regulations, and this disclosure shall continue at least 15 minutes after the chair has announced the meeting adjourned.

Locations of the virtual conference chair and the recording personnel

When the Company convenes a virtual-only Shareholders' Meeting, both the chairperson and secretary shall be in the same location, and the chairperson shall declare the address of their location when the meeting is called to order.

Handling of disconnection:

21.1 In the event of a virtual Shareholders' Meeting, the Company may offer a simple connection test to shareholders prior to the meeting and provide relevant real-time services before and during the meeting to help resolve communication technical issues.

21.2 In the event of a virtual Shareholders' Meeting, when declaring the meeting open, the chair shall also declare, unless under a circumstance where a meeting is not required to be postponed or resumed at another time under Article 44-20, paragraph 4 of the Regulations Governing the Administration of Shareholder Services of Public Companies, if the virtual meeting platform or participation in the virtual meeting is obstructed due to natural disasters, accidents or other force majeure events before the chair has announced the meeting adjourned, and the obstruction continues for more than 30 minutes, the meeting shall be postponed or resumed on another date within five days, in which case Article 182 of the Company Act shall not apply.

21.3 For a meeting to be postponed or resumed as described in the preceding paragraph, shareholders who have not registered to participate in the affected Shareholders' Meeting online shall not attend the postponed or resumed session.

21.4 For a meeting to be postponed or resumed under the second paragraph, the number of shares represented by, and voting rights and election rights exercised by the shareholders who have registered to participate in the affected Shareholders' Meeting and have successfully signed in the meeting, but do not attend the postpone or resumed session, at the affected Shareholders' Meeting, shall be counted towards the total number of shares, number of voting rights and number of election rights represented at the postponed or resumed session.

21.5 During a postponed or resumed session of a Shareholders' Meeting held under the second paragraph, no further discussion or resolution is required for proposals for which votes have been cast and counted and results have been announced, or list of elected directors and supervisors.

21.6 When the Company convenes a hybrid Shareholders' Meeting, and the virtual meeting cannot continue as described in second paragraph, if the total number of shares

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represented at the meeting, after deducting those represented by shareholders attending the virtual Shareholders' Meeting online, still meets the minimum legal requirement for a shareholder meeting, then the Shareholders' Meeting shall continue, and not postponement or resumption thereof under the second paragraph is required.

21.7 Under the circumstances where a meeting should continue as in the preceding paragraph, the shares represented by shareholders attending the virtual meeting online shall be counted towards the total number of shares represented by shareholders present at the meeting, provided these shareholders shall be deemed abstaining from voting on all proposals on meeting agenda of that Shareholders' Meeting.

21.8 When postponing or resuming a meeting according to the second paragraph, the Company shall handle the preparatory work based on the date of the original Shareholders' Meeting in accordance with the requirements listed under Article 44-20, paragraph 7 of the Regulations Governing the Administration of Shareholder Services of Public Companies.

21.9 For dates or period set forth under Article 12, second half, and Article 13, paragraph 3 of Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies, and Article 44-5, paragraph 2, Article 44-15, and Article 44-17, paragraph 1 of the Regulations Governing the Administration of Shareholder Services of Public Companies, the Company shall handle the matter based on the date of the Shareholders' Meeting that is postponed or resumed under the second paragraph.

Handling of digital divide:

When convening a virtual-only Shareholders' Meeting, the Company shall provide appropriate alternative measures available to shareholders with difficulties in attending a virtual Shareholders' Meeting online. Apart from circumstances stated in paragraph 6, Article 44-9 of the Regulations Governing the Administration of Shareholder Services of Public Companies, the Company shall at least provide connection equipment and necessary assistance to shareholders and set out the application period with the Company and other matters of notice.

Effecting and Amendment:

These Rules shall take effect after having been submitted to and approved by a Shareholders' Meeting. Subsequent amendments thereto shall be affected in the same manner.

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(III). Regulations governing Election of Directors

HY ELECTRONIC (CAYMAN) LIMITED
Regulations governing Election of Directors

Purpose:
These Regulations are adopted to ensure a just, fair, and open election of directors as well as regulations for compliance.
Foundation:
2.1. These Regulations are adopted pursuant to Articles 21 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.
2.2. Except as otherwise provided by law and regulation or by the Company's Articles of Incorporation, elections of directors shall be conducted in accordance with these Regulations.
Abilities of Board Members:
The overall composition of the Board of Directors shall be taken into consideration in the selection of the Company's directors. Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows:
3.1. The ability to make judgments about operations.
3.2. Accounting and financial analysis ability.
3.3. Business management ability.
3.4. Crisis management ability.
3.5. Knowledge of the industry.
3.6. An international market perspective.
3.7. Leadership ability.
3.8. Decision-making ability.
Qualification for Independent Directors:
4.1. The qualifications for the independent directors of the Company shall comply with Articles 2, 3, and 4 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
4.2. The election of independent directors of the Company shall comply with Articles 5, 6, 7, 8, and 9 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, and shall be conducted in accordance with Article 24 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.
Election Rules:
Elections of directors at the Company shall be conducted in accordance with the candidate nomination

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system and procedures set out in Article 192-1 of the Company Act. When the number of directors falls below five due to the dismissal of a director for any reason, the Company shall hold a by-election to fill the vacancy at its next shareholders meeting.

When the number of directors falls short by one third of the total number prescribed in the Company's Articles of Incorporation, the Company shall call a special shareholders meeting within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

When the number of independent directors falls below that required under the proviso of Article 14-2, paragraph 1 of the Securities and Exchange Act, a by-election shall be held at the next shareholders meeting to fill the vacancy. When the independent directors are dismissed en masse, a special shareholders meeting shall be called within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

6. Election of Directors:

The single-name-registration cumulative voting method shall be used for election of the directors at the Company. Except as otherwise provided for by laws and regulations, each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.

7. Ballots:

The Board of Directors shall prepare separate ballots for directors in numbers corresponding to the directors or supervisors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.

8. Criteria for Being Elected:

The number of directors will be as specified in the Company's Articles of Incorporation, with voting rights separately calculated for independent and non-independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.

9. Vote Monitoring Operations:

Before the election begins, the chair shall appoint a number of persons with shareholder status to perform the respective duties of vote monitoring and counting personnel. The ballot boxes shall be prepared by the Board of Directors and publicly checked by the vote monitoring personnel before voting commences.

10. Notice for the Candidates:

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If a candidate is a shareholder, a voter must enter the candidate's account name and shareholder account number in the "candidate" column of the ballot; for a non-shareholder, the voter shall enter the candidate's full name and identity card number before a ballot is placed in the ballot box. However, when the candidate is a governmental organization or juristic-person shareholder, the name of the governmental organization or juristic-person shareholder shall be entered in the column for the candidate's account name in the ballot, or both the name of the governmental organization or juristic-person shareholder and the name of its representative may be entered. When there are multiple representatives, the names of each respective representative shall be entered.

Rules concerning Invalid Ballots:

A ballot is invalid under any of the following circumstances:

11.1. The ballot was not prepared by a person with the right to convene.
11.2. A blank ballot is placed in the ballot box.
11.3. The writing is unclear and indecipherable or has been altered.
11.4. The candidate whose name is entered in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register, or the candidate whose name is entered in the ballot is a non-shareholder, and a cross-check shows that the candidate's name and identity card number do not match.
11.5. Other words or marks, symbols or unknown items are entered in addition to the account name (name) of the candidate or account number (identification number) of the shareholder and number of voting rights allotted.
11.6. The name of candidate entered in the ballot is identical to other shareholders but no identification including shareholder's account number or ID number is entered.
11.7. A ballot is not placed in the ballot box.
11.8. The number of candidates entered exceeds the specified number of positions.
11.9. The aggregate number of voting rights allotted is more than the number of voting rights held by a candidate.

Ballot Calculation Oppuperations:

The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including the list of persons elected as directors and the numbers of votes with which they were elected, shall be announced by the chair or a designated master of ceremony on the site.

Operations after Directors are Elected:

The Board of Directors of the Company shall issue notifications to the persons elected as directors.

Implementation and Amendment: These Regulations, and any amendments hereto, shall be implemented after adoption by the Board of Directors and submitted for approval by a shareholders meeting.

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(IV). Procedures for Lending Funds to Others

HY ELECTRONIC (CAYMAN) LIMITED
虹橋發展科技股份有限公司
Procedures for Lending Funds to Others

Purpose:
In accordance with Article 36-1 of the Securities and Exchange Act, Article 15 of the Company Act, and the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, these Procedures are established to provide a basis for the Company's lending of funds to others. Any matters not provided for herein shall be handled in accordance with applicable laws and regulations.
Scope of Application:
These Procedures shall apply to all lending of funds by the Company to others.
Allocation of Responsibilities:
Responsible unit: Finance Department.
Definitions:
4.1 “Subsidiary” and “parent company” shall be defined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
4.2 If the Company’s financial reports are prepared in accordance with International Financial Reporting Standards, “net worth” refers to equity attributable to owners of the parent as presented in the balance sheet under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
4.3 “Public announcement and filing” refers to the submission of information through the reporting website designated by the Financial Supervisory Commission.
4.4 “Date of occurrence” refers to the earliest of the contract execution date, payment date, date of Board resolution, or any other date on which the counterparty and transaction amount are determinable.
4.5 “Net worth of the Company” refers to the net worth shown in the Company’s most recent financial statements.
Operating Procedures:
5.1 Eligible Borrowers:
5.1.1 Companies or firms with which the Company has business relationships.
5.1.2 Companies or firms requiring short-term financing from the Company.

“Short-term” as used above means one year. If the Company’s operating cycle exceeds one year, the operating cycle shall apply.

The “financing amount” under Section 5.1.2 refers to the cumulative outstanding balance of short-term funding provided by the Company.

Lending of funds between overseas subsidiaries in which the Company directly or indirectly holds 100% of the voting shares is not subject to the restriction in Section 5.1.2, and the loan term is not limited to one year or the operating cycle. However, such subsidiaries shall specify lending limits and terms in their own procedures in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements or Guarantees by Public Companies.

5.2 Purpose and Necessity of Lending Funds:
Where the Company provides loans due to business transactions with other companies or firms, such lending shall comply with Section 5.3. Lending for short-term financing needs shall be limited to the following circumstances:

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5.2.1 Companies in which the Company holds more than 50% of the shares and that require short-term funding for operational purposes.

5.2.2 Other lending cases approved by the Company's Board of Directors.

5.3 Limits on Total Lending and Individual Exposure:

5.3.1 The aggregate amount of funds loaned by the Company shall not exceed 40% of the Company's net worth.

5.3.2 Limits on Individual Borrowers:

5.3.2.1 For counterparties with business relationships with the Company, each individual loan shall not exceed the amount of business transactions between the parties. "Amount of business transactions" refers to the higher of the purchase or sales amount between the parties in the most recent fiscal year, and shall not exceed 10% of the Company's net worth.

5.3.2.2 For companies or firms requiring short-term financing, each individual loan shall not exceed 10% of the Company's net worth.

5.3.3 For lending of funds between overseas subsidiaries in which the Company directly or indirectly holds 100% of the voting shares, the total and individual loan amounts shall not exceed 10% of the Company's net worth, and the loan term shall be limited to one year.

5.4 Lending Procedures:

5.4.1 Application: For any lending transaction, the borrower shall submit the required corporate and financial information and apply for a credit line by filing a "Financing Request Form" with the Company.

5.4.2 Application: For any lending transaction, the borrower shall submit the required corporate and financial information and apply for a credit line by filing a "Financing Request Form" with the Company.

5.4.2.1 The necessity and justification for the loan.

5.4.2.2 Whether the proposed loan amount is appropriate in light of the borrower's financial condition.

5.4.2.3 Whether aggregate lending remains within the prescribed limits.

5.4.2.4 The potential impact on the Company's operations, financial position, and shareholders' equity.

5.4.2.5 Whether collateral is required and its assessed value.

5.4.2.6 Credit checks and documented risk assessment records for the borrower.

5.4.3 Collateral: In any lending transaction, the Company shall obtain a promissory note in an amount equal to the loan. Where necessary, security over movable or immovable property shall also be established. If the borrower provides a guarantor with sufficient financial capacity and credit in lieu of collateral, the Board of Directors may proceed based on the Finance Department's credit assessment report. Where a corporate guarantor is provided, its Articles of Incorporation shall be reviewed to confirm that it is authorized to provide guarantees.

5.4.4 Authorization:

5.4.4.1 All lending transactions, following credit review by the Finance Department, must be approved by the General Manager and the Chairman and then submitted to the Board of Directors for resolution prior to execution. Such authority may not be delegated.

If the Company has independent directors, their views shall be fully considered when approving loans to others, and their specific opinions, including any

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objections and reasons, shall be recorded in the Board minutes.

5.4.4.2 Loans between the Company and its parent or subsidiaries, or among subsidiaries, shall be approved by the Board in accordance with the preceding paragraph. The Board may authorize the Chairman to make disbursements in tranches or allow revolving use within a specified limit and for a period not exceeding one year.

The "specified limit" under the preceding paragraph, unless otherwise compliant with Section 5.3.3, shall not exceed 10% of the net worth reported in the most recent financial statements of the Company or its subsidiaries for any single borrower.

5.4.5 Insurance:

5.4.5.1 All collateral, other than land and marketable securities, shall be covered by fire insurance and other appropriate insurance, with the Company named as beneficiary under the policies.

5.4.5.2 The responsible personnel shall notify the borrower to renew the insurance coverage before its expiration.

5.4.6 Repayment:

5.4.6.1 Following disbursement, the Company shall continuously monitor the borrower's and guarantor's financial condition, operations, and credit standing. Where collateral is provided, its value shall also be reviewed for any changes. Any material changes shall be promptly reported to the Chairman, and appropriate actions shall be taken as instructed.

5.4.6.2 Upon repayment, whether at or prior to maturity, accrued interest shall be calculated first. The loan shall be settled in full, including both principal and interest, before any promissory notes are canceled and returned or any mortgage registrations are released.

5.5 Loan Term and Interest:

5.5.1 Each loan shall have a term not exceeding one year in principle.

5.5.2 The lending interest rate shall not be lower than the Company's highest short-term borrowing rate from financial institutions and shall be implemented after submission to the Board of Directors. The loan agreement shall specify repayment and interest payment terms, with interest calculated on a monthly basis. Adjustments may be made in special cases subject to Board approval.

5.6 Ongoing Monitoring and Overdue Loan Management:

5.6.1 Borrowers shall repay all principal and accrued interest upon maturity. In the event of default, the Company may enforce its rights against the collateral or pursue recovery from guarantors in accordance with applicable laws.

5.6.2 The Finance function shall maintain a register for all lending transactions, recording the borrower, loan amount, date of Board approval, disbursement date, and all required evaluation items under these Procedures. Such records shall be submitted to the General Manager for review.

5.6.3 Internal audit personnel shall conduct audits of these lending procedures and their implementation at least on a quarterly basis and maintain written records. Any material non-compliance shall be promptly reported in writing to the supervisors or the Audit Committee.

5.6.4 If changes in circumstances result in a borrower no longer meeting the requirements of these Procedures or cause lending balances to exceed prescribed limits, the Company shall formulate a corrective action plan, submit it to the supervisors or the

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Audit Committee, and complete remediation within the specified timeframe.

5.6.5 Receivables from related parties that remain outstanding beyond normal credit terms and are reclassified as other receivables shall be treated as loans and handled in accordance with these Procedures, and submitted to the most recent Board meeting for approval. If such reclassification results in a breach of lending limits, Section 5.6.4 shall apply.

5.6.6 The Company shall evaluate its lending exposure, recognize an adequate allowance for doubtful accounts, and provide appropriate disclosures in its financial statements. Relevant information shall also be provided to the auditors to facilitate required audit procedures.

5.7 Controls over Subsidiaries’ Lending Activities:

5.7.1 If a subsidiary intends to lend funds to others, the Company shall require it to establish procedures in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements or Guarantees by Public Companies and to follow such procedures. Net worth shall be calculated based on the subsidiary’s most recent CPA-audited or reviewed financial statements.

5.7.2 Each subsidiary shall prepare a monthly report on its lending balances for the preceding month and submit it to the Company by the 5th day of each month.

5.7.3 When conducting audits of subsidiaries under the annual audit plan, the Company’s internal auditors shall also review the implementation of lending procedures. Any deficiencies shall be tracked until resolved, and a follow-up report shall be submitted to the supervisors or the Audit Committee.

5.8 Disclosure and Filing:

5.8.1 The Company shall, by the 10th day of each month, publicly disclose and file the prior month’s lending balances for both the Company and its subsidiaries.

5.8.2 The Company shall make a public announcement and filing within two days from the date of occurrence if any of the following thresholds is met:

5.8.2.1 The combined lending balance of the Company and its subsidiaries reaches or exceeds 20% of the Company’s net worth as reported in its most recent financial statements.

5.8.2.2 The lending balance to any single enterprise reaches or exceeds 10% of the Company’s net worth as reported in its most recent financial statements.

5.8.2.3 Any new loan extended by the Company or its subsidiaries is NT$10 million or more and represents 2% or more of the Company’s net worth as reported in its most recent financial statements.

5.8.3 For any subsidiary that is not a domestic public company, the Company shall make the required public announcement and filing on its behalf if any of the above conditions are met.

5.9 Penalties:

All lending activities shall be conducted in accordance with these Procedures. Any material violations by managerial or responsible personnel shall be subject to performance review under the Company’s personnel policies and work rules, with disciplinary action imposed based on the severity of the violation.

Adoption and Amendment:

6.1 These Procedures shall be approved by the Board of Directors, submitted to the supervisors, and presented to the shareholders’ meeting for approval. If any director records an objection or submits a written dissent, such dissent shall be forwarded to the supervisors and presented to the shareholders’ meeting for discussion. The same process applies to any amendments.

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6.2 If the Company has independent directors, their views shall be fully considered when these Procedures are submitted to the Board for discussion. Their specific opinions, including any objections and reasons, shall be recorded in the Board meeting minutes.

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(V). Procedures for Acquisition or Disposal of Assets

HY ELECTRONIC (CAYMAN) LIMITED
虹揚發展科技股份有限公司

Procedures for Acquisition or Disposal of Assets

Purpose:
These Procedures are established to provide a standardized framework for the acquisition and disposal of the Company's assets, ensure that all asset acquisitions and disposals are subject to appropriate evaluation and approval procedures, promote adequate information disclosure, and comply with applicable laws and regulations.
Legal Basis:
These Procedures are adopted pursuant to the Securities and Exchange Act and the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
Scope of Applicable Assets
3.1 Investments in stocks, government bonds, corporate bonds, financial debentures, securities representing fund interests, depositary receipts, call and put warrants, beneficial securities, and asset-backed securities.
3.2 Real property, including land, buildings and structures, investment property, and construction inventory, as well as equipment.
3.3 Membership certificates.
3.4 Intangible assets, including patents, copyrights, trademarks, and franchise rights.
3.5 Right-of-use assets.
3.6 Claims against financial institutions, including receivables, purchased bills and discounts, loans, and overdue receivables.
3.7 Derivative products.
3.8 Assets acquired or disposed of through mergers, demergers, acquisitions, or share transfers conducted in accordance with applicable laws.
3.9 Other significant assets.
Definitions
4.1 Derivative Products: Refers to forward contracts, options contracts, futures contracts, leveraged margin contracts, swap contracts, combinations of the foregoing contracts, or hybrid and structured products embedded with derivatives, the value of which is derived from specified interest rates, financial instrument prices, commodity prices, exchange rates, price or rate indices, credit ratings or credit indices, or other variables. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term lease agreements, or long-term purchase or sales agreements.
4.2 Assets Acquired or Disposed of Through Mergers, Demergers, Acquisitions, or Share Transfers Conducted Pursuant to Law: Refers to assets acquired or disposed of through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institutions Merger Act, or other applicable laws, or through the issuance of new shares to acquire shares of another company pursuant to Article 156-3 of the Company Act.
4.3 Related Parties and Subsidiaries: Shall be determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
4.4 Professional Appraiser: Refers to a real property appraiser or any other person legally authorized to conduct appraisals of real property or equipment.
4.5 Date of Occurrence: Refers to the earliest of the contract signing date, payment date, trade execution date, title transfer date, Board resolution date, or any other date sufficient to determine the transaction counterparty and transaction amount. For investments requiring

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approval from the competent authority, the earlier of the foregoing dates or the date on which approval is obtained from the competent authority shall apply.

4.6 Investment in Mainland China: Refers to investments or technical cooperation activities in Mainland China conducted in accordance with the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area promulgated by the Investment Commission of the Ministry of Economic Affairs.

4.7 Professional Investment Institutions: Refers to financial holding companies, banks, insurance companies, bills finance companies, trust enterprises, securities firms engaged in proprietary trading or underwriting business, futures firms engaged in proprietary trading, securities investment trust enterprises, securities investment consulting enterprises, and fund management companies that are established in accordance with applicable laws and regulated by the competent local financial authorities.

4.8 Stock Exchange: A domestic stock exchange refers to the Taiwan Stock Exchange Corporation; a foreign stock exchange refers to any organized securities trading market regulated by the securities regulatory authority of the relevant jurisdiction.

4.9 Securities Firm Business Premises: Domestic securities firm business premises refer to locations where securities firms conduct trading through dedicated over-the-counter trading facilities in accordance with the Regulations Governing Securities Trading on Securities Firms' Trading Premises. Foreign securities firm business premises refer to the business locations of financial institutions regulated by foreign securities authorities and authorized to conduct securities business.

Requirements Governing Appraisal Reports and Opinion Letters

5.1 With respect to appraisal reports obtained by the Company, or opinion letters issued by certified public accountants, attorneys, or securities underwriters, the professional appraisers and their appraisal personnel, certified public accountants, attorneys, or securities underwriters shall satisfy the following requirements:

5.1.1 They must not have been sentenced with finality to imprisonment for one year or more for violations of the Securities and Exchange Act, Company Act, Banking Act, Insurance Act, Financial Holding Company Act, Business Entity Accounting Act, or for offenses involving fraud, breach of trust, embezzlement, forgery of documents, or occupational crimes.

This restriction shall not apply where more than three years have elapsed since completion of the sentence, expiration of probation, or pardon.

5.1.2 They may not be a related party to any transaction party or have any substantive related party relationship with any transaction party.

5.1.3 Where the Company is required to obtain appraisal reports from two or more professional appraisers, such appraisers and their appraisal personnel may not be related parties to one another or have any substantive related party relationship with one another.

5.2 The persons referred to in the preceding paragraph shall comply with the following requirements when issuing appraisal reports or opinion letters:

5.2.1 Before accepting an engagement, they shall carefully assess their professional qualifications, practical experience, and independence.

5.2.2 In carrying out an engagement, they shall appropriately plan and perform necessary procedures to support their conclusions and issue the corresponding report or opinion letter. The procedures performed, information collected, and conclusions reached shall be accurately documented in the working papers for the engagement.

5.2.3 The appropriateness and reasonableness of the information sources, parameters, and other data used shall be individually evaluated as the basis for issuing the appraisal report or opinion letter.

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5.2.4 The declaration statement shall include confirmation that the relevant personnel possess the required professional qualifications and independence, that the information used has been evaluated as appropriate and reasonable, and that applicable laws and regulations have been complied with.

Procedures

6.1 The Company shall adopt Procedures for Acquisition or Disposal of Assets in accordance with these Regulations. Such procedures, and any amendments thereto, shall be approved by the Board of Directors, submitted to each supervisor, and presented to the shareholders' meeting for approval. Where any director expresses dissenting opinions that are recorded or submitted in writing, the Company shall also provide such dissenting information to each supervisor.

6.2 Where the Company has established independent directors in accordance with applicable regulations, the Board shall fully consider the opinions of each independent director when discussing the Procedures for Acquisition or Disposal of Assets pursuant to the preceding paragraph. Any objection or qualified opinion expressed by an independent director shall be recorded in the minutes of the Board meeting.

6.3 Where the Company has established an audit committee in accordance with applicable laws and regulations, the adoption or amendment of the Procedures for Acquisition or Disposal of Assets shall require the approval of more than one-half of all audit committee members and shall then be submitted to the Board of Directors for resolution.

6.4 If approval by more than one-half of all audit committee members cannot be obtained pursuant to the preceding paragraph, the matter may be approved by more than two-thirds of all directors. The resolution of the audit committee shall also be recorded in the minutes of the Board meeting.

6.5 The term "all audit committee members" as referred to in Paragraph 6.3 and "all directors" as referred to in the preceding paragraph shall be calculated based on the number of members and directors actually in office.

Required Provisions

7.1 The Company's Procedures for Acquisition or Disposal of Assets shall include the following matters, and all transactions shall be handled in accordance with such procedures:

7.1.1 Scope of applicable assets.

7.1.2 Evaluation procedures, including pricing methodologies and reference basis.

7.1.3 Operating procedures, including authorization limits, approval hierarchy, responsible departments, and transaction processes.

7.1.4 Procedures for public disclosure and regulatory filings.

7.1.5 The aggregate amount of real property, right-of-use assets, and securities not for operational use that may be acquired by the Company and its subsidiaries, as well as limits on individual securities investments.

7.1.6 Control procedures governing subsidiaries' acquisition or disposal of assets.

7.1.7 Disciplinary measures applicable to personnel who violate these Regulations or the Company's Procedures for Acquisition or Disposal of Assets.

7.1.8 Other material matters.

7.2 In conducting related party transactions, engaging in derivative transactions, or carrying out mergers, demergers, acquisitions, or share transfers, the Company shall comply not only with the provisions of the preceding paragraph, but also establish procedures in accordance with Sections 3 through 5 of this Chapter.

7.3 If the Company does not intend to engage in derivative transactions, it may, upon approval by the Board of Directors, be exempt from adopting procedures governing derivative transactions. Should the Company subsequently intend to engage in derivative transactions,

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it shall first comply with the provisions of the preceding section and the preceding paragraph.

7.4 The Company shall supervise and ensure that its subsidiaries adopt and implement Procedures for Acquisition or Disposal of Assets in accordance with these Regulations.

Review by the Board of Directors and Audit Committee

8.1 Where the acquisition or disposal of assets by the Company is subject to Board approval under the applicable procedures or relevant laws and regulations, and any director expresses dissenting opinions that are recorded or submitted in writing, the Company shall provide such dissenting information to each supervisor.

8.2 Where the Company has established independent directors in accordance with applicable laws and regulations, the Board shall fully consider the opinions of each independent director when reviewing any acquisition or disposal of assets transaction pursuant to the preceding paragraph. Any objection or qualified opinion expressed by an independent director shall be recorded in the minutes of the Board meeting.

8.3 Where the Company has established an audit committee in accordance with applicable laws and regulations, any material asset transaction or derivative transaction shall be approved by more than one-half of all audit committee members and submitted to the Board of Directors for resolution. The provisions of Paragraphs 6.4 and 6.5 shall apply mutatis mutandis.

Obtaining Appraisal Reports or Certified Public Accountant Opinions

Where the Company acquires or disposes of real property, equipment, or related right-of-use assets, and the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more, the Company shall obtain an appraisal report issued by a professional appraiser prior to the date of occurrence, except for transactions with domestic government agencies, self-constructed projects on owned or leased land, or acquisitions and disposals of equipment or right-of-use assets for operational use. Such transactions shall comply with the following requirements:

9.1 Where a limited price, specified price, or special price must be adopted as the basis for determining the transaction price due to special circumstances, the transaction shall first be approved by the Board of Directors. The same requirement shall apply to any subsequent changes to the transaction terms and conditions.

9.2 Where the transaction amount is NT$1 billion or more, appraisals from at least two professional appraisers shall be obtained.

9.3 If any of the following circumstances applies to the appraisal results, a certified public accountant shall be engaged to provide a specific opinion regarding the reasons for the discrepancy and the fairness of the transaction price, unless all appraisal results for acquired assets exceed the transaction amount or all appraisal results for disposed assets are lower than the transaction amount:

9.3.1 The difference between the appraisal result and the transaction amount is 20% or more of the transaction amount.

9.3.2 The difference between the appraisal results of two or more professional appraisers is 10% or more of the transaction amount.

9.4 The appraisal report issued by the professional appraiser may not be dated more than three months prior to the execution date of the agreement. However, where the same publicly announced current land value is applicable and no more than six months have elapsed, the original professional appraiser may issue an opinion letter in lieu thereof.

Except where limited prices, specified prices, or special prices are adopted as the basis for determining the transaction price, if a construction company is unable to obtain the appraisal report in a timely manner for legitimate reasons, the appraisal report and the certified public accountant's opinion referred to in Subsection 9.3 shall be obtained within two weeks from the date of occurrence.

Basis for Determining Transaction Prices

When acquiring or disposing of securities, the Company shall obtain the most recent financial statements of the target company, audited or reviewed by a certified public accountant, prior to the date of occurrence as a reference for evaluating the transaction price. In addition, where the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more, the Company shall engage a certified public accountant prior to the date of occurrence to issue an opinion regarding the reasonableness of the transaction price.

The foregoing requirement shall not apply where the securities are quoted in an active public market or where otherwise provided by the Financial Supervisory Commission.

Regulations Governing Intangible Assets and Right-of-Use Assets

Where the Company acquires or disposes of intangible assets, related right-of-use assets, or membership certificates, and the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more, the Company shall engage a certified public accountant prior to the date of occurrence to provide an opinion on the reasonableness of the transaction price, except for transactions with domestic government agencies.

Calculation of Transaction Amounts

The calculation of transaction amounts under the preceding three sections shall be conducted in accordance with Paragraph 31.2. The term "within one year" shall be calculated retrospectively from the date of occurrence of the current transaction. Any portion for which an appraisal report issued by a professional appraiser or a certified public accountant's opinion has already been obtained in accordance with these Regulations shall not be included in the calculation.

Court Auction Transactions

Where the Company acquires or disposes of assets through court auction procedures, supporting documents issued by the court may be used in lieu of appraisal reports or certified public accountant opinions.

Transaction Amount Requirements

When the Company acquires or disposes of assets from or with a related party, it shall comply with the applicable approval procedures and assess the reasonableness of the transaction terms in accordance with the preceding section and this section. In addition, where the transaction amount reaches 10% or more of the Company's total assets, the Company shall also obtain an appraisal report issued by a professional appraiser or a certified public accountant's opinion in accordance with the preceding section.

The calculation of transaction amounts referred to in the preceding Section shall be conducted in accordance with Section 12.

In determining whether a transaction counterparty is a related party, consideration shall be given not only to the legal form of the relationship, but also to its substantive nature.

Regulations Governing Related Party Transactions

15.1 Where the Company acquires or disposes of real property or related right-of-use assets from or with a related party, or acquires or disposes of assets other than real property or related right-of-use assets from or with a related party, and the transaction amount reaches 20% of the Company's paid-in capital, 10% of total assets, or NT$300 million or more, the following information shall be submitted to the Board of Directors for approval and the Audit Committee for consent before the execution of the transaction agreement or payment of any consideration, except for transactions involving domestic government bonds, bonds under repurchase or resale agreements, or subscriptions or redemptions of money market funds issued by domestic securities investment trust enterprises:

15.1.1 The purpose, necessity, and expected benefits of the acquisition or disposal of the assets.

15.1.2 The reasons for selecting the related party as the transaction counterparty.

15.1.3 In the case of acquiring real property or related right-of-use assets from a related

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party, relevant information assessing the reasonableness of the proposed transaction terms in accordance with Sections 16 and 17.

15.1.4 The original acquisition date and price of the asset by the related party, the transaction counterparty, and the relationship among the transaction counterparty, the Company, and the related party.

15.1.5 Projected monthly cash receipts and expenditures for the one-year period commencing from the anticipated contract month, together with an evaluation of the necessity of the transaction and the reasonableness of the planned use of funds.

15.1.6 The appraisal report issued by a professional appraiser or the certified public accountant’s opinion obtained pursuant to the preceding section.

15.1.7 Any restrictive terms and other material agreements relating to the transaction.

15.2 For the following transactions conducted between the Company and its parent company, subsidiaries, or subsidiaries in which the Company directly or indirectly holds 100% of the issued shares or total capital, the Board of Directors may authorize the Chairman, pursuant to Subsection 7.1.3, to approve such transactions within a specified authorization limit, with subsequent ratification by the most recent Board meeting:

15.2.1 Acquisition or disposal of equipment or related right-of-use assets for operational use.

15.2.2 Acquisition or disposal of real property right-of-use assets for operational use.

15.3 Where the Company has established independent directors in accordance with applicable laws and regulations, the Board shall fully consider the opinions of each independent director when reviewing matters submitted pursuant to Paragraph 15.1. Any objection or qualified opinion expressed by an independent director shall be recorded in the minutes of the Board meeting.

15.4 Where the Company has established an audit committee in accordance with applicable laws and regulations, matters requiring supervisor approval pursuant to Paragraph 15.1 shall first be approved by more than one-half of all audit committee members and then submitted to the Board of Directors for resolution. The provisions of Sections 6.4 and 6.5 shall apply mutatis mutandis.

15.5 Where the Company or any of its subsidiaries that is not a domestic public company engages in a transaction described in Paragraph 15.1, and the transaction amount reaches 10% or more of the total assets of the public company, the Company shall submit the information specified in Paragraph 15.1 to the shareholders’ meeting for approval before entering into the transaction agreement or making any payment. However, this requirement shall not apply to transactions between a public company and its parent company or subsidiaries, or among subsidiaries.

15.6 The calculation of transaction amounts under Paragraphs 15.1 and 15.5 shall be conducted in accordance with Paragraph 31.2. The term “within one year” shall be calculated retrospectively from the date of occurrence of the current transaction. Any portion that has already been submitted to and approved by the shareholders’ meeting or Board of Directors, or approved by the Audit Committee in accordance with these Regulations, shall not be included in the calculation.

Evaluation of Related Party Transactions

16.1 Where the Company acquires real property or related right-of-use assets from a related party, the reasonableness of the transaction cost shall be assessed using the following methods:

16.1.1 Based on the related party’s transaction price plus necessary financing interest and costs legally borne by the buyer. The financing interest cost shall be calculated using the weighted average borrowing interest rate for the year in which the Company acquired the asset, provided that such rate may not exceed the maximum borrowing rate for non-financial enterprises announced by the Ministry of Finance.

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16.1.2 If the related party has previously used the subject property as collateral for a loan from a financial institution, the total appraised lending value determined by the financial institution for the subject property may serve as a reference, provided that the actual cumulative loan amount extended by the financial institution reaches at least 70% of the appraised lending value and the loan term exceeds one year. This method shall not apply where the financial institution and either party to the transaction are related parties.

16.2 Where land and buildings relating to the same property are purchased or leased together, the transaction costs for the land and buildings may be separately assessed using any of the methods set forth in the preceding paragraph.

16.3 Where the Company acquires real property or related right-of-use assets from a related party, the Company shall assess the cost of such real property or right-of-use assets in accordance with the preceding two paragraphs and engage a certified public accountant to review the assessment and issue a specific opinion thereon.

16.4 Where the Company acquires real property or related right-of-use assets from a related party under any of the following circumstances, the provisions of the preceding section shall apply, and the preceding three paragraphs shall not apply:

16.4.1 The related party acquired the real property or related right-of-use assets through inheritance or gift.

16.4.2 More than five years have elapsed between the date on which the related party acquired the real property or related right-of-use assets and the execution date of the current transaction.

16.4.3 The Company enters into a joint construction agreement with the related party, or acquires real property through engaging the related party to construct real property on the Company's own land or leased land.

16.4.4 The Company, its parent company, subsidiaries, or subsidiaries in which it directly or indirectly holds 100% of the issued shares or total capital acquire real property right-of-use assets for operational use from one another.

Evidentiary Requirements for Related Party Transaction Prices

17.1 Where the evaluation results obtained by the Company pursuant to Paragraphs 16.1 and 16.2 are lower than the transaction price, the Company shall comply with the provisions of Section 18. However, this requirement shall not apply if the Company can provide objective evidence together with specific opinions on reasonableness issued by a professional real property appraiser and a certified public accountant under any of the following circumstances:

17.1.1 Where the related party acquired undeveloped land or leased land for subsequent construction, the Company may provide evidence demonstrating compliance with any of the following conditions:

17.1.1.1 The undeveloped land has been evaluated using the methods set forth in the preceding section, and the building value is calculated based on the related party's construction costs plus a reasonable construction profit, with the combined amount exceeding the actual transaction price. The term "reasonable construction profit" shall refer to the lower of the average gross profit margin of the related party's construction division over the most recent three fiscal years or the latest gross profit margin for the construction industry published by the Ministry of Finance.

17.1.1.2 Comparable transactions involving other floors of the same property or properties in neighboring areas within the preceding year have been conducted between non-related parties, with similar floor areas and comparable transaction terms after reasonable adjustments for floor or regional price differences based on prevailing real property sale or lease

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market practices.

17.1.2 The Company may provide evidence demonstrating that the transaction terms for the acquisition of real property from a related party, or the leasing of real property right-of-use assets from a related party, are comparable to those of non-related-party transactions in neighboring areas within the preceding year and involving properties of similar size.

17.2 The term “transactions in neighboring areas” referred to in the preceding paragraph shall, in principle, mean transactions located within the same or adjacent block and within a radius of no more than 500 meters from the subject property, or with similar publicly announced current land values. The term “similar size” shall, in principle, mean that the floor area of the comparable non-related-party transaction is no less than 50% of the floor area of the subject property. The term “within one year” shall be calculated retrospectively from the date of occurrence of the current acquisition of real property or related right-of-use assets.

Procedures for Transactions Determined to Be Below Evaluated Value

18.1 Where the Company acquires real property or related right-of-use assets from a related party, and the evaluation results obtained pursuant to the preceding two sections are lower than the transaction price, the Company shall undertake the following actions:

18.1.1 The difference between the transaction price and the evaluated cost of the real property or related right-of-use assets shall be appropriated to a special surplus reserve in accordance with Article 41, Paragraph 1 of the Securities and Exchange Act, and may not be distributed or capitalized for share issuance. Where an investor applying the equity method to account for its investment in the Company is itself a public company, such investor shall also appropriate a special surplus reserve in proportion to its shareholding pursuant to Article 41, Paragraph 1 of the Securities and Exchange Act.

18.1.2 The supervisors shall perform their duties in accordance with Article 218 of the Company Act. Where the Company has established an audit committee in accordance with applicable laws and regulations, the provisions of the preceding sentence shall apply mutatis mutandis to the independent director members of the audit committee.

18.1.3 The handling of the matters set forth in the preceding two subparagraphs shall be reported to the shareholders’ meeting, and detailed information regarding the transaction shall be disclosed in the annual report and prospectus.

18.2 Where the Company has appropriated a special surplus reserve pursuant to the preceding paragraph, such reserve may not be utilized until the assets purchased or leased at an excessive price have recognized impairment losses, been disposed of, or the lease has been terminated, or appropriate compensation has been made or restoration completed, or other evidence confirms the absence of any unreasonable circumstances, and approval has been obtained from the Financial Supervisory Commission.

18.3 Where the Company acquires real property or related right-of-use assets from a related party and other evidence indicates that the transaction was not conducted on arm’s-length terms, the Company shall also comply with the provisions of the preceding two paragraphs.

Procedures for Risk Management and Audit Matters

When engaging in derivative transactions, the Company shall establish controls over the following key risk management and audit matters and incorporate them into its operating procedures:

19.1 Trading principles and policies, including the categories of derivative transactions permitted, operating or hedging strategies, allocation of responsibilities and authority, performance evaluation guidelines, the aggregate contract amount permitted for derivative transactions, and maximum loss limits for both total and individual contracts.

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19.2 Risk management measures.
19.3 Internal audit systems.
19.4 Procedures for periodic evaluations and the handling of abnormal circumstances.
19.5 Other material risk management and audit matters.

Risk Management Measures

When engaging in derivative transactions, the Company shall adopt the following risk management measures:

20.1 The scope of risk management shall include credit risk, market price risk, liquidity risk, cash flow risk, operational risk, and legal risk management.
20.2 Personnel responsible for derivative trading may not concurrently serve as personnel responsible for trade confirmation or settlement operations.
20.3 Personnel responsible for risk measurement, monitoring, and control shall belong to departments separate from those referred to in the preceding subsection and shall report to the Board of Directors or senior management personnel who are not responsible for trading or position-related decision-making.
20.4 Positions held in derivative transactions shall be evaluated at least once each week. However, where hedging transactions are conducted for business purposes, evaluations shall be conducted at least twice each month, and the evaluation reports shall be submitted to senior management personnel authorized by the Board of Directors.
20.5 Other material risk management measures.

Board Oversight

21.1 When engaging in derivative transactions, the Board of Directors shall exercise proper oversight and management in accordance with the following principles:

21.1.1 Designated senior management personnel shall continuously monitor and control the risks associated with derivative transactions.
21.1.2 The Board shall periodically evaluate whether the performance of derivative transactions is consistent with the Company's established operating strategies and whether the risks undertaken remain within the Company's acceptable risk tolerance.

21.2 Senior management personnel authorized by the Board of Directors shall manage derivative transactions in accordance with the following principles:

21.2.1 Regularly assess whether the risk management measures currently in place remain appropriate and are being properly implemented in compliance with these Regulations and the Company's procedures governing derivative transactions.
21.2.2 Supervise transaction activities and profit and loss conditions. Upon discovery of any abnormal circumstances, necessary response measures shall be promptly adopted and immediately reported to the Board of Directors. Where the Company has established independent directors, such independent directors shall attend the Board meeting and express their opinions.

21.3 Where the Company authorizes relevant personnel to conduct derivative transactions in accordance with its procedures governing derivative transactions, such transactions shall subsequently be submitted to the most recent Board meeting for reporting.

Recordkeeping and Reporting

22.1 When engaging in derivative transactions, the Company shall maintain a record book detailing the categories and amounts of derivative transactions, the dates of Board approvals, and the matters requiring careful evaluation pursuant to Paragraph 20.4 and Subparagraphs 21.1.2, and 21.2.1. Such matters shall be fully recorded in the record book for inspection and reference.
22.2 The Company's internal auditors shall periodically review the adequacy of internal controls over derivative transactions and shall conduct monthly audits of the trading department's compliance with the Company's procedures governing derivative transactions. Audit reports shall be prepared, and any material violations identified shall be reported in writing to each supervisor.

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22.3 Where the Company has established independent directors in accordance with applicable laws and regulations, written notice to the independent directors shall also be provided concurrently with the written notice to supervisors pursuant to the preceding paragraph.

22.4 Where the Company has established an audit committee in accordance with applicable laws and regulations, the provisions relating to supervisors in Paragraph 22.2 shall apply mutatis mutandis to the audit committee.

Regulations Governing Mergers, Demergers, Acquisitions, or Share Transfers

When the Company conducts a merger, demerger, acquisition, or share transfer, it shall, prior to the Board meeting convened for approval of such transaction, engage a certified public accountant, attorney, or securities underwriter to issue an opinion regarding the reasonableness of the share exchange ratio, acquisition price, or the cash or other property to be distributed to shareholders, and submit such opinion to the Board of Directors for review and approval. However, this requirement shall not apply to a merger between the Company and a subsidiary in which the Company directly or indirectly holds 100% of the issued shares or total capital, or to a merger between subsidiaries in which the Company directly or indirectly holds 100% of the issued shares or total capital.

Shareholder Information Compilation

24.1 A public company participating in a merger, demerger, or acquisition shall prepare a public document for shareholders prior to the shareholders' meeting, setting forth the material terms and related matters of the merger, demerger, or acquisition. Such document, together with the expert opinion referred to in Paragraph 23 and the notice of the shareholders' meeting, shall be provided to shareholders as reference for determining whether to approve the proposed merger, demerger, or acquisition. However, this requirement shall not apply where other applicable laws or regulations exempt the transaction from shareholder approval.

24.2 Where any company participating in a merger, demerger, or acquisition is unable to convene a shareholders' meeting or pass a resolution due to insufficient attendance, insufficient voting rights, or other legal restrictions, or where the proposal is rejected by the shareholders' meeting, the participating companies shall immediately make a public disclosure explaining the reasons for the occurrence, the subsequent handling procedures, and the anticipated date for reconvening the shareholders' meeting.

Timing for Convening Board and Shareholders' Meetings

25.1 Unless otherwise provided by applicable laws or unless special circumstances have been approved in advance by the Financial Supervisory Commission, companies participating in a merger, demerger, or acquisition shall convene their respective Board meetings and shareholders' meetings on the same day to resolve matters relating to the merger, demerger, or acquisition.

25.2 Unless otherwise provided by applicable laws or unless special circumstances have been approved in advance by the Financial Supervisory Commission, companies participating in a share transfer transaction shall convene their respective Board meetings on the same day.

25.3 A listed company or a company whose shares are traded on a securities firm's trading venue participating in a merger, demerger, acquisition, or share transfer shall prepare complete written records of the following information and retain such records for a period of five years for inspection purposes:

25.3.1 Basic information of personnel, including the titles, names, and national identification numbers, or passport numbers in the case of foreign nationals, of all individuals participating in the merger, demerger, acquisition, or share transfer plan or its implementation prior to public disclosure of the information.

25.3.2 Dates of material events, including the dates of execution of letters of intent or memoranda of understanding, engagement of financial or legal advisors, execution of agreements, and Board meetings.

25.3.3 Material documents and meeting minutes, including documents relating to the

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merger, demerger, acquisition, or share transfer plan, letters of intent or memoranda of understanding, material agreements, and minutes of Board meetings.

25.4 A listed company or a company whose shares are traded on a securities firm’s trading venue participating in a merger, demerger, acquisition, or share transfer shall, within two days from the date of the relevant Board resolution, submit the information specified in Subparagraphs 25.3.1 and 25.3.2 to the Financial Supervisory Commission for recordation through the designated Internet information reporting system in the prescribed format.

25.5 Where any company participating in a merger, demerger, acquisition, or share transfer is not a listed company or a company whose shares are traded on a securities firm’s trading venue, the listed company or the company whose shares are traded on a securities firm’s trading venue shall enter into an agreement with such company and comply with the requirements set forth in the preceding two paragraphs.

Confidentiality Undertaking

All persons participating in or having knowledge of the Company’s merger, demerger, acquisition, or share transfer plan shall execute a written confidentiality undertaking. Prior to public disclosure of the information, such persons may not disclose the content of the plan to any third party, nor may they trade, either directly or through another person’s name, in the shares or other equity-related securities of any company involved in the merger, demerger, acquisition, or share transfer transaction.

Regulations Governing Permissible Amendments

Where the Company participates in a merger, demerger, acquisition, or share transfer transaction, the share exchange ratio or acquisition price may not be altered arbitrarily except under the following circumstances. Any permissible circumstances for amendment shall be expressly stipulated in the merger, demerger, acquisition, or share transfer agreement:

27.1 A cash capital increase, issuance of convertible corporate bonds, stock dividends, corporate bonds with warrants, preferred shares with warrants, warrants, or other equity-related securities is carried out.

27.2 The disposal of material assets or other events affecting the Company’s financial condition or business operations occurs.

27.3 Major disasters, significant technological changes, or other events affecting shareholders’ equity or securities prices occur.

27.4 Any participating company in the merger, demerger, acquisition, or share transfer repurchases treasury shares in accordance with applicable laws and regulations.

27.5 There is a change in the participating entities or in the number of participating companies involved in the merger, demerger, acquisition, or share transfer transaction.

27.6 Other conditions permitting amendments have been specified in the agreement and publicly disclosed.

Required Contract Provisions

Where the Company participates in a merger, demerger, acquisition, or share transfer transaction, the agreement shall specify the rights and obligations of the participating companies and shall also include the following matters:

28.1 Procedures for handling breaches of contract.

28.2 Principles governing the handling of equity-related securities previously issued or treasury shares repurchased by a company extinguished through merger or separated through demerger.

28.3 The quantity of treasury shares that participating companies may repurchase in accordance with law after the record date for determining the share exchange ratio, and the principles governing the handling thereof.

28.4 Procedures for handling changes in participating entities or in the number of participating companies.

28.5 The anticipated progress and completion schedule of the transaction plan.

28.6 Relevant handling procedures in the event the transaction plan is not completed on schedule, including the scheduled date for convening a shareholders’ meeting as required

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by applicable laws and regulations.

Regulations Governing Board Authorization

After information regarding a merger, demerger, acquisition, or share transfer has been publicly disclosed by any participating company, if any party subsequently intends to engage in another merger, demerger, acquisition, or share transfer with a different company, all procedures and legal acts previously completed in connection with the original transaction shall be carried out again by all participating companies. However, where the number of participating companies is reduced and the shareholders' meeting has already adopted a resolution authorizing the Board of Directors to make such changes, the participating companies may be exempt from reconvening a shareholders' meeting for a new resolution.

Regulations Applicable Where the Transferee Company Is Not a Public Company

Where any company participating in a merger, demerger, acquisition, or share transfer is not a public company, the public company shall enter into an agreement with such company and comply with the provisions set forth in Section 25, Section 26, and the preceding section.

Reporting of Acquisition or Disposal of Assets

31.1 Where the Company acquires or disposes of assets under any of the following circumstances, it shall, based on the nature of the transaction and in the prescribed format, publicly announce and file the relevant information on the website designated by the Financial Supervisory Commission within two days from the date of occurrence of the event:

31.1.1 Acquisition or disposal of real property or related right-of-use assets with a related party, or acquisition or disposal of assets other than real property or related right-of-use assets with a related party, where the transaction amount reaches 20% of the Company's paid-in capital, 10% of total assets, or NT$300 million or more. However, this requirement shall not apply to transactions involving domestic government bonds, bonds purchased or sold under repurchase or resale agreements, or subscriptions or redemptions of money market funds issued by domestic securities investment trust enterprises.

31.1.2 Conducting a merger, demerger, acquisition, or share transfer transaction.

31.1.3 Losses arising from derivative transactions reaching the maximum allowable loss limit for either aggregate or individual contracts as specified in the applicable operating procedures.

31.1.4 Acquisition or disposal of equipment or related right-of-use assets for operational use, where the transaction counterparty is not a related party and the transaction amount reaches any of the following thresholds:

31.1.4.1 For a public company with paid-in capital of less than NT$10 billion, the transaction amount reaches NT$500 million or more.

31.1.4.2 For a public company with paid-in capital of NT$10 billion or more but less than NT$50 billion, the transaction amount reaches NT$1 billion or more.

31.1.4.3 For a public company with paid-in capital of NT$50 billion or more, the transaction amount reaches 5% or more of the Company's paid-in capital.

31.1.5 Where a public company engaged in construction business acquires or disposes of real property or related right-of-use assets for construction use, and the transaction counterparty is not a related party, with a transaction amount of NT$500 million or more. However, where the public company has paid-in capital of NT$10 billion or more and disposes of self-developed completed construction projects to a non-related party, the transaction amount threshold shall be NT$1 billion or more.

31.1.6 Acquisition of real property through self-owned land construction, construction on leased land, joint construction with partition of units, joint construction with profit

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sharing, or joint construction with separate sale allocation, where the transaction counterparty is not a related party and the Company's anticipated investment amount reaches NT$500 million or more.

31.1.7 For a public company with paid-in capital of NT$50 billion or more, transactions involving government bonds, ordinary corporate bonds, and general financial debentures without equity characteristics, excluding subordinated bonds, conducted on a securities exchange or at a securities firm's trading venue, where such transactions do not fall within the circumstances specified in the proviso to Subparagraph 31.1.8 and the transaction counterparty is not a related party, and where the transaction amount reaches 5% or more of the Company's paid-in capital.

31.1.8 Asset transactions other than those specified in the preceding seven subsections, disposal of creditor's rights by financial institutions, or investments in Mainland China where the transaction amount reaches 20% of the Company's paid-in capital or NT$300 million or more. However, the following circumstances shall not be subject to this requirement:

31.1.8.1 Trading of domestic government bonds or foreign government bonds with a credit rating not lower than the sovereign credit rating of Taiwan.

31.1.8.2 Securities trading conducted by professional investment institutions on a securities exchange or at a securities firm's trading venue, subscription in the primary market of ordinary corporate bonds and general financial debentures without equity characteristics, excluding subordinated bonds, subscriptions or redemptions of securities investment trust funds or futures trust funds, or securities subscribed by securities firms as required for underwriting business or in their capacity as recommending securities firms for emerging stock companies in accordance with the regulations of the Taipei Exchange.

31.1.8.3 Trading of bonds under repurchase or resale agreements, or subscriptions or redemptions of money market funds issued by domestic securities investment trust enterprises.

31.2 The transaction amount referred to in the preceding paragraph shall be calculated in accordance with the following methods:

31.2.1 The amount of each individual transaction.

31.2.2 The cumulative amount of acquisitions or disposals involving the same type of underlying asset with the same counterparty within a one-year period.

31.2.3 The cumulative amount of acquisitions or disposals, calculated separately for acquisitions and disposals, of real property or related right-of-use assets under the same development project within a one-year period.

31.2.4 The cumulative amount of acquisitions or disposals, calculated separately for acquisitions and disposals, of the same securities within a one-year period.

31.3 The term "within one year" in the preceding paragraph shall be calculated retrospectively from the date of occurrence of the current transaction, and any portion already publicly announced in accordance with these Regulations shall not be included again.

31.4 A public company shall, by the 10th day of each month, upload to the information reporting website designated by the Financial Supervisory Commission, in the prescribed format, the status of derivative transactions conducted by the Company and its subsidiaries that are not domestic public companies as of the end of the preceding month.

31.5 If any item required to be publicly announced by the Company contains an error or omission at the time of filing and requires correction, the Company shall, within two days from the date it becomes aware of such error or omission, re-file and publicly announce all relevant items in full.

31.6 In connection with any acquisition or disposal of assets, the Company shall retain all

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relevant agreements, meeting minutes, memorandum records, appraisal reports, and opinions issued by certified public accountants, attorneys, or securities underwriters. Unless otherwise required by applicable laws or regulations, such documents shall be retained for a minimum period of five years.

Public Announcement and Filing Requirements

After the Company has publicly announced and filed a transaction in accordance with the preceding section, if any of the following events occurs, the Company shall, within two days from the date of occurrence of such event, publicly announce and file the relevant information on the website designated by the Financial Supervisory Commission:

32.1 Any amendment, termination, or cancellation of the relevant agreement originally entered into for the transaction.

32.2 Failure to complete a merger, demerger, acquisition, or share transfer in accordance with the timeline specified in the agreement.

32.3 Any change to the information originally announced and filed.

Regulations Applicable to State-Owned Enterprises

Where a state-owned enterprise acquires or disposes of assets, it shall comply only with the information disclosure requirements set forth in the preceding section and may otherwise be exempt from compliance with the regulations promulgated by the Financial Supervisory Commission.

Filing Requirements for Non-Public Subsidiaries

Where a subsidiary of the Company is not a domestic public company, and its acquisition or disposal of assets falls within the circumstances requiring public announcement and filing under the preceding section, such filing and announcement shall be made by the public company.

For the subsidiaries referred to in the preceding paragraph, the thresholds for public announcement and filing under Subparagraph 31.1.1 relating to paid-in capital or total assets shall be determined based on the paid-in capital or total assets of the public company.

Determination of Total Assets and Paid-in Capital

For purposes of the provision relating to ten percent of total assets, the calculation shall be based on the total assets reported in the Company's most recent parent company only financial statements or individual financial statements prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Where the Company's shares have no par value or a par value other than NT$10 per share, the transaction amount thresholds under these Regulations relating to twenty percent of paid-in capital shall instead be calculated based on ten percent of equity attributable to owners of the parent. The thresholds relating to five percent of paid-in capital shall be calculated based on two and one-half percent of equity attributable to owners of the parent. The thresholds relating to paid-in capital of NT$10 billion shall instead be calculated based on equity attributable to owners of the parent of NT$20 billion, while the thresholds relating to paid-in capital of NT$50 billion shall instead be calculated based on equity attributable to owners of the parent of NT$100 billion.

Implementation and Effectiveness

These Procedures shall be subject to the approval of the Audit Committee, adoption by the Board of Directors, and approval by the shareholders' meeting. The same procedure shall apply to any amendments hereto.

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(VI). Shareholding status of directors as of the date for suspension of share transfer for this Annual General Meeting

Directors (incl. Independent Directors') Shareholding
Record Date (Share Transfer Suspension Date): April 23, 2026

Title	Name	Date of Election	No. of Shares Held at Election			Current No. of Shares Held
			Type	No. of Shares Held	Percentage of total issued shares at that time	Type	No. of Shares Held	Percentage of total issued shares at that time
Chairman	Kao, Kuei-Jen	2023/6/21	Common Stock	1,153,559	1.43	Common Stock	1,206,559	1.50
Director	Fang, Hsin-Yi	2023/6/21	Common Stock	127,383	0.16	Common Stock	127,383	0.16
Director	Fang, Wen-Te	2025/6/23	Common Stock	45,000	0.06	Common Stock	45,000	0.06
Independent Director	Cheng, Kong-Fah	2023/6/21	Common Stock	-	-	Common Stock	-	-
Independent Director	Chien, Chia-Yin	2023/6/21	Common Stock	-	-	Common Stock	-	-
Independent Director	Chin, Jui-Ting	2024/12/26	Common Stock	-	-	Common Stock	-	-
Independent Director	Huang, Cheng-Yuan	2025/9/15	Common Stock	18,000	0.02	Common Stock	18,000	0.02
			Total Shares	1,343,942	1.67%	Total	1,343,942	1.67%

Note 1: Total number of shares issued as of June 22, 2026 (date of election): 80,499,345 shares.
Note 2: The Company has set up the Audit Committee. The supervisors' shareholding does not apply.
Note 3: Article 26 of the Securities and Exchange Act is not applicable to the Company

AI assistant

HY — AGM Information 2026

52585_rns_2026-05-22_df46ce5c-b0b7-4399-aac6-1cddfec95224.pdf

HY Electronic (Cayman) Limited

蚣揚發展科技股份有限公司

2026 Annual Shareholders' Meeting Meeting Agenda

Table of Contents

II. Meeting Agenda

Matters for Report

Matters for Ratification

Matters for Discussion

Other Matters for Discussion

Provisional Motions

Summary of Annual Business Plan

I. Corporate Transformation and Operational Enhancement

II. Operating Strategy

III. Corporate Sustainability

Impact of the External Competitive, Regulatory, and Overall Business Environment:

2. Remuneration for Directors and Independent Directors

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

Table of contents

Opinion

Basis for Opinion

Emphasis of Matter

Key Audit Matters

Evaluation of impairment of accounts receivable

Inventories Evaluation

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

HY ELECTRONIC (CAYMAN) LIMITED AND SUBSIDIARIES

B. Financial Liabilities

(a) Subsequent Measurement

(b) Derecognition of Financial Liabilities

(8) Inventories

(9) Noncurrent Assets Held for Sale

(10) Property, plant and equipment

(11) Investment properties

(12) Impairment of tangible and intangible assets

(10) Property, plant and equipment

B. Lease liabilities

C. Other lease information

(a) Real estate leases

(16) Other Non-current Liabilities

(17) Employee benefits

A. Defined contribution plan

(24) Cash flow information

7. Related-party transactions

(1) Names and relationship with related parties

(2) Significant transactions with related parties

A. Guarantee:

8. Pledged assets

9. Commitments and contingencies:

(b) Interest rate risk

(c) Other price risk

D. Credit risk

E. Liquidity risk management

13. Additional Disclosures

14. Segment information:

TABLE OF CONTENTS

Table A

INTERPRETATION

SHARES

REGISTRATION OF SHARES

ORDINARY RESOLUTION, SPECIAL RESOLUTION AND SUPERMAJORITY RESOLUTION

DIVIDENDS AND CAPITALISATION

MEETINGS OF MEMBERS

DIRECTORS AND OFFICERS

MEETINGS OF THE BOARD OF DIRECTORS

CORPORATE RECORDS

TENDER OFFER AND ACCOUNTS

AUDIT COMMITTEE

VOLUNTARY DISSOLUTION AND WINDING-UP

CHANGES TO CONSTITUTION

LITIGIOUS AND NON-Litigious AGENT

OTHERS

3. Redemption and Purchase of Shares

HY AGM Information 2026