LOTES - AGM Information 2021 | FinancialReports.eu

Stock Code ： 3533

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LOTES CO., LTD

2021 Annual General Shareholders’ Meeting Meeting Agenda

Time: June 22, 2021. 9:00 a.m.

Place: No. 59, Wuxun St.,Anle Dist., Keelung City 204, Taiwan

(Dawulun with Reifang Industrial ParksService Center).

This English version is only a translation of the Chinese version. If there is any inconsistency or discrepancy between the Chinese and English versions, the Chinese version shall prevail for all intents and purposes.

Table of Contents
Procedure for the 2021 Annual General Meeting of Shareholders...…………..……	1
Agenda of 2021 Annual General Meeting of Shareholders ……………………......	2
Management Presentation (Company Reports)………………………………….…	3
Proposals ……………………………….…………...…………………….……..….	5
Discussion……..…………………………………………………………..……..….	6
Elections………………………...……………………………………………..……	8
Questions and Motions………………..…………………………………….....……	8

Attachments

ttachments
1. Annual Business Report………………………………………………………..	9
2. 2020 Inspection Report of Supervisors………………………………………...	11
3. Comparison Table of “Ethical Corporate Management Best Practice
Principles” before and after Amendments……………………………………..	12
4. Comparison Table of “Procedures for Ethical Management and Guidelines for
Conduct” before and after Amendments………………………………………	16
5. Statement of Earnings Distribution Fiscal Year 2020………………………….	21
6. Earning Distribution Table……………………………………………………..	38
7. Comparison Table of “Rules of Procedure for Shareholders Meetings” before
and after Amendments…………………………………………………………	39
8. Comparison Table of “Articles of Incorporation” before and after
Amendments………….………………………………………….……………..	47
9. Comparison Table of “Operational Procedures for Acquisition and Disposal of
Assets” before and after Amendments……………………………………..…...	50
10. Comparison Table of “Operational Procedures for Loaning Funds to Others
and Endorsements and Guarantees” before and after Amendments………….	57
11. Comparison Table of “Procedures for Election of Directors” before and after
Amendments………………………………………………………………….	61
12. Rules Governing the Scope of Powers of Supervisors……………………….	68
13. Candidates of Directors and Independent Directors………………………….	71

Appendices

ppendices
1. Articles of Incorporation (Before Amendment)……………………….………	74
2. Rules of Procedure for Shareholders Meetings (Before Amendment)……..….	79
3. Operational Procedures for Acquisition and Disposal of Assets (Before
amendment)……………………………………………………………………	85
4. Operational Procedures for Loaning Funds to Others and Endorsements and
Guarantees (Before Amendment)………………………………………….….	97
5. Procedures for Election of Directors and Supervisors (Before Amendment)...	104
6. The effect of the gratis placement on the Company's operating results,
earnings per share and return on investment for shareholders…………..…….	107
7. Shareholding Status of the Directors…………………………………..………	107

LOTES CO., LTD.

Procedure for the 2021 Annual General Meeting of Shareholders

I. Call the Meeting to Order

II. Chairperson Remarks

III. Management Presentation (Company Reports)

IV. Proposals

V. Discussion

VI. Elections

VII. Questions and Motions

VIII. Adjournment

LOTES CO., LTD.

Agenda of 2021 Annual General Meeting of Shareholders

Time: 9:00 a.m. on Tuesday, June 22, 2021

Place: No. 59, Wuxun St., Anle Dist., Keelung City

(Dawulun (with Reifang) Industrial Parks Service Center)

I. Call the Meeting to Order

II. Chairperson Remarks

III. Reports

2020 Business Report
2020 Inspection Report of Supervisors
Report on allocation of employees’ and directors’ and supervisors’ compensation for 2020
Report on Amendments to the Company’s “Ethical Corporate Management Best Practice Principles”
Report on Amendments to the Company’s “Procedures for Ethical Management and Guidelines for Conduct”

IV. Proposals

Adoption of the 2020 Business Report and Financial Statements
Adoption of the Proposal for Distribution of 2020 Profits

V. Discussion

Amendment to the Company’s “Rules of Procedure for Shareholder Meetings”
Amendment to the Company’s “Articles of Incorporation”
Amendment to the Company’s “Operational Procedures for Acquisition and Disposal of Assets”
Amendment to the Company’s “Operational Procedures for Loaning Funds to Others and Endorsements and Guarantees”
Amendment to the Company’s “Procedures for Election of Directors and Supervisors”
Abrogation to the Company’s “Rules Governing the Scope of Powers of Supervisors”

VI. Elections

Re-election of the Company’s Directors

VII. Questions and Motions

VIII. Adjournment

Management Presentation (Company Reports)

Report No.1:

2020 Business Report

Explanation:

For the 2020 Business Report, please refer to Attachment 1 (page 9-10 hereof).

Report No.2:

2020 Inspection Report of Supervisors

Explanation:

For the Inspection Report of Supervisors, please refer to Attachment 2 (page 11 hereof).
Supervisors are earnestly requested to read out the audit report.

Report No.3:

Report on allocation of employees’ and directors’ and supervisors’ compensation for 2020 Explanation:

Pursuant to Article 19 of the Company’s Articles of Incorporation, by taking into account the shareholders’ equity, and with reference to the standards of the industry and the overall economic environment, the Company proposed to provide employees’ compensation of NT$97.235 million and directors’ and supervisors’ compensation of NT$4.48 million for fiscal 2020. The amount appropriated as noted above is no different from the expense recognized in 2020.
All of the compensation allocated to employees and directors and supervisors was paid in cash.

Report No.4:

Report on Amendments to the Company’s “Ethical Corporate Management Best Practice Principles” Explanation:

In order to comply with the establishment of the Audit Committee of the Company and pursuant to the Taiwan Stock Exchange Tai-Cheng-Chih-Li-Tzu No. 1080008378 Letter dated May 23, 2019, certain provisions of the Company’s “Ethical Corporate Management Best Practice Principles” are to be amended.
For the comparison table of the articles before and after amendment, please refer to Attachment 3 (page 12-15 hereof)

Report No.5:

Report on Amendments to the Company’s “Procedures for Ethical Management and Guidelines for Conduct”

Explanation:

In order to comply with the establishment of the Audit Committee of the Company and pursuant

to the Taiwan Stock Exchange Tai-Cheng-Chih-Li-Tzu No. 1090002299 Letter dated February 13, 2020, certain provisions of the Company’s “Procedures for Ethical Management and Guidelines for Conduct” are to be amended.

For the comparison table of the articles before and after amendment, please refer to Attachment 4 (page 16-20 hereof)

Proposals

1. Proposed by the Board

Proposal:

Adoption of the 2020 Business Report and Financial Statements.

Explanation:

The Company’s 2020 financial statements and consolidated financial statements that have been audited and certified by CPAs Zhong, Dan-Dan and Li, Feng-Hui with the accounting firm KPMG in Taiwan, together with the annual business report that has been approved by the board of directors of the Company on March 24, 2021, were submitted to the supervisors for review and completion, with the report issued on record.
For the Annual Business Report 2020, please see Attachment 1 (page 9-10 hereof); for the audit report made by a certified public accountant (CPA) and financial statement, please see Attachment 5 (pages 21-38 hereof).
Please review and ratify

Resolution:

2. Proposed by the Board

Proposal:

Adoption of the Proposal for Distribution of 2020 Profits.

Explanation:

The Company’s net profit after tax for 2020 was NT$2,732,361,778, and the statement of appropriation of earnings was approved by the Board of Directors of the Company on March 24, 2021, and tendered to the supervisors for examination and completion.
For the surplus earnings distribution table, please refer to Attachment 6 (page 38 hereof).
The Board of Directors would set a separate distribution base date for the distribution of cash dividends upon approval at the regular meeting of shareholders. Cash dividends are calculated and rounded to NT dollar, and any amount less than $1 is transferred to the Company’s other income.
If the number of shares outstanding is affected by the Company’s repurchase of its shares, transfer or cancellation of treasury stocks, exercise of employee stock warrants, or other reasons, and the distribution rate changes as a result, the Chairperson of the Board is authorized to make adjustments.

Resolution:

Discussion

1. Proposed by the Board

Proposal:

Amendment to the Company’s “Rules of Procedure for Shareholders Meetings”.

Explanation:

In order to comply with the establishment of the Audit Committee of the Company and pursuant to the Taiwan Stock Exchange Tai-Cheng-Chih-Li-Tzu No. 1090009468 Letter dated June 3, 2020, certain provisions of the Company’s “Rules of Procedure for Shareholders Meetings” are to be amended.
For the comparison table of the articles before and after amendment, please refer to Attachment 7 (page 39-46 hereof)

Resolution:

2. Proposed by the Board

Proposal:

Amendment to the Company’s “Articles of Incorporation”.

Explanation:

In order to comply with the establishment of the Audit Committee of the Company and the operational needs of the Company, certain provisions of the Company’s “Articles of Incorporation” are to be amended.
For the comparison table of the articles before and after amendment, please refer to Attachment 8 (page47-49 hereof)

Resolution:

3. Proposed by the Board

Proposal:

Amendment to the Company’s “Operational Procedures for Acquisition and Disposal of Assets”.

Explanation:

In order to comply with the establishment of the Audit Committee of the Company, certain provisions of the Company’s “Operational Procedures for Acquisition and Disposal of Assets” are to be amended.
For the comparison table of the articles before and after amendment, please refer to Attachment 9 (page 50-56 hereof)

Resolution:

4. Proposed by the Board

Proposal:

Amendment to the Company’s “Operational Procedures for Loaning Funds to Others and Endorsements and Guarantees”.

Explanation:

In order to comply with the establishment of the Audit Committee of the Company, certain provisions of the Company’s “Operational Procedures for Loaning Funds to Others and Endorsements and Guarantees” are to be amended.
For the comparison table of the articles before and after amendment, please refer to Attachment 10 (page 57-60 hereof)

Resolution:

5. Proposed by the Board

Proposal:

Amendment to the Company’s “Procedures for Election of Directors and Supervisors”.

Explanation:

In order to comply with the establishment of the Audit Committee of the Company and pursuant to the Taiwan Stock Exchange Tai-Cheng-Chih-Li-Tzu No. 1090009468 Letter dated June 3, 2020, it is proposed to change the name of the Company’s “Procedures for Election of Directors and Supervisors” to “Procedures for Election of Directors” and to amend certain provisions.
For the comparison table of the articles before and after amendment, please refer to Attachment 11 (page 61-67hereof)

Resolution:

6. Proposed by the Board

Proposal:

Abrogation to the Company’s “Rules Governing the Scope of Powers of Supervisors”.

Explanation:

In order to comply with the establishment of the Audit Committee of the Company in lieu of the Supervisors’ system, it is proposed to abrogate the Company’s “Rules Governing the Scope of Powers of Supervisors”.
For the “Rules Governing the Scope of Powers of Supervisors”, please refer to Attachment 12 (page 68-70 hereof)

Resolution:

Elections

1. Proposed by the Board

Proposal:

Re-election of the Company’s Directors.

Explanation:

In order to comply with the spirit of corporate governance, in accordance with Article 14-4 of the Securities and Exchange Act, an audit committee composed of independent directors was established to replace the function of supervisors and to re-elect the current (9th) Board of Directors. The new directors will take office for a term of three years from June 22, 2021 to June 21, 2024, following their election at the regular shareholders meeting.
In accordance with the Company’s Articles of Incorporation, seven directors are proposed to be re-elected, three of whom are independent directors. The election of directors is based on a candidate nomination system and the list of candidates has been approved by the Board of Directors at its meeting held on March 24, 2021. Please refer to attachment 13 (page71-73 hereof) for the list of candidates for directors and independent directors, and the shareholders shall elect the candidates from the list of candidates for directors.
The election was held in accordance with the Company’s “Procedures for Election of Directors and Supervisors” as described in appendix 5 (page 104-106 hereof).
Please vote for the most suitable candidates.

Voting Results:

Questions and Motions

Adjournment

【 Attachment 1 】

Annual Business Report

I. Business Status Report 2020

(i) Operational overview

The Company’s consolidated operating revenue for 2020 was NT$17.291 billion, up 14.60% from NT$15.088 billion in 2019, and consolidated net income after tax was NT$2.732 billion, up 31.60% from NT$2.076 billion in 2019, translating to an after-tax earnings per share of NT$26.41.

Looking back at fiscal 2020, the global economy continued to be affected by the trade tensions between the United States and China and the outbreak of the new Coronavirus (COVID-19) has created extreme uncertainty in the global economic outlook, which has also impacted the sales of some of the Company’s products. However, due to the gradual increase in the conversion rate of the new generation server and desktop CPU platform this year, as well as the results of the Company’s active involvement in the development of new customers and new products, the revenue in fiscal 2020 still saw stable growth and set a new record high since the establishment of the Company. On the profitability side, the continued increase in the scale of operations, improved penetration of new products and enhanced production efficiency also contributed to a remarkable profit performance of NT$26.41 per share after tax in 2020, up 31.60% from 2019.

(ii) Business plan implementation results and profitability analysis

1. Business plan implementation results

Unit: NT$ thousand

Item	2020	2019	Amount of Increase (Decrease)	Percentage Increase (Decrease)
DesktopComputer	17,291,332	15,088,872	2,202,460	14.60%
Operatingcost	10,361,137	9,620,962	746,175	7.76%
Grossprofit	6,930,195	5,467,910	1,462,285	26.74%
Netprofit after tax	2,732,361	2,076,043	652,266	31.60%

2. Analysis of financial income and expenditures and profitability

	Item		2019	2020
Profitability (%)	Return on assets		13.92	15.44
	Return on equity		19.47	21.58
	Percentage in paid-in capital	Operating profit	265.82	358.30
		Gross profit before tax	273.65	354.66
	Profir margin		13.76	15.80
	Earnings per share after tax		20.11	26.41

3. Research and development status

In order to continue to provide customers with high quality products, the Company is constantly raising the technological level and energy in the areas of design, process, quality control and testing to achieve

high growth goals, and has spared no effort in the development of new products and is constantly developing high-density connectors with small pitches. In order to meet the future market trend of high-speed connectors, the Company has recently made greater efforts to analyze and develop high-current and high-frequency connectors to cater for market demand. Also, to expand the product line and market size, the Company has successfully developed connectors for high-frequency servers, automobiles, high-speed transmission devices and the latest transmission interface, Type-C.

II. Operating Plan and Outlook for 2021
(i) Business plan
Guidelines for management
(1) Strengthening market ties between the three places on the two sides, and coordinating production capacity allocation, so as to keep up with market changes and demand.
(2) Reinforcing the R&D team to continuously develop new products and raising the technical level to enhance the company’s core technical capabilities in order to build a competitive advantage.
(3) Integrating group resources and improving production and management capabilities to bring down production costs and boost operational efficiency.
Important production and marketing policies
(1) Strengthening customer relationship management to enhance competitive efficiency, and actively maintaining close relationships with major international manufacturers.
(2) Being customer-oriented, close to the market leading manufacturers, providing customers with a variety of products and services.
(3) Improving the efficiency of factory management and the division of labor between domestic and overseas factories, and beefing up the inventory management capability to effectively control production costs and enhance the production and marketing mechanism.
(ii) Future prospects
Looking ahead, the Company will continue to face a highly competitive market and a volatile economic environment. However, in addition to fostering close cooperation with customers, the Company will continue to develop and improve its existing products and adopt a diversified strategy to enhance market sensitivity by maintaining good cooperation with world-class professional manufacturers, so as to keep tabs on the development trend of new products and research and develop niche products, with a view to boosting the competitive advantage of the Company and smoothly achieving the Company’s operational objectives, thereby continuously creating maximum value for shareholders.

Best wishes to all our shareholders

Chairman: Zhu, De-Xiang

General Manager: He, De-You

Chief Accounting Officer: Liu, Xing-Xia

【 Attachment 2 】

LOTES CO., LTD.

2020 Inspection Report of Supervisors

The Board of Directors had prepared and delivered the 2020 Business Report, Statement of Earnings Distribution and Financial Statements (including consolidated financial statements). The inspection of the financial statements was completed by accountants Zhong, Dan-Dan and Li, Feng-Hui at KPMG Taiwan, and a review report was issued. Inspections of the aforementioned reports and statements delivered by the Board of Directors were conducted by the supervisors who found no inconsistency. The review report was issued in accordance with Article 219 of the Company Act.

To the 2021 Regular Shareholders Meeting, LOTES CO., LTD.

Supervisor: Yang, Wen-Ming Zheng, Ming-Song Jin Ling Investment Co., Ltd.

Representative: Zhang, Kun-Yao

March 24, 2021

【 Attachment 3 】

LOTES CO., LTD. Comparison Table of “Ethical Corporate Management Best Practice Principles” before and after Amendments

	Before	After	Description
	Article 2: Operational Procedures 1. Prohibition of unethical conducts: When engaging in commercial activities, directors,~~supervisors,~~ managers, employees of the Company or Substantial Controllers shall not directly or indirectly offer, promise to offer, request or accept any improper benefits, nor commit any unethical or illegal acts, nor commit any act in breach of fiduciary duty (hereinafter referred to as the “Unethical Conduct”) for purposes of acquiring or maintaining benefits. Parties receiving benefit referred to in the preceding paragraph include civil servants, political candidates, political parties or members of political parties, state-run or privateowned businesses or institutions, and their directors~~,~~ ~~supervisors,~~managers, employees, Substantial Controllers or other interested parties of the same. 9. Prohibition of offering and acceptance of bribery: When conducting business, the Company, its directors,~~supervisors,~~ managers, employees, and Substantial Controllers shall not directly or indirectly offer, promise to offer, request, or accept any improper benefits in any form, including rebates, commissions, grease payments, or offer or accept improper benefits in other ways to or from clients, agents, contractors, suppliers, public servants or other interested parties, unless otherwise the laws of the territories where the Company operates permit so.	Article 2: Operational Procedures 1. Prohibition of unethical conducts: When engaging in commercial activities, directors, employees of the Company or Substantial Controllers shall not directly or indirectly offer, promise to offer, request or accept any improper benefits, nor commit any unethical or illegal acts, nor commit any act in breach of fiduciary duty (hereinafter referred to as the “Unethical Conduct”) for purposes of acquiring or maintaining benefits. Parties receiving benefit referred to in the preceding paragraph include civil servants, political candidates, political parties or members of political parties, state-run or privateowned businesses or institutions, and their directors, managers, employees, Substantial Controllers or other interested parties of the same. 9. Prohibition of offering and acceptance of bribery: When conducting business, the Company, its directors, managers, employees, and Substantial Controllers shall not directly or indirectly offer, promise to offer, request, or accept any improper benefits in any form, including rebates, commissions, grease payments, or offer or accept improper benefits in other ways to or from clients, agents, contractors, suppliers, public servants or other interested parties, unless otherwise the laws of the territories where the Company operates permit so.	Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

	Before	After	Description
10. 11. 12. 14.	Prohibition of offering illegal political donations: When directly or indirectly offering donations to political parties or organizations or individuals participating in political activities, the Company, its directors, ~~supervisors, m~~anagers, employees and Substantial Controllers shall comply with the Political Donations Act and the Company’s relevant internal operational procedures, and shall not make such donations in exchange for commercial benefit or business advantages. Prohibition of improper charitable donations or sponsorship: When making or offering charitable donations and sponsorship, the Company, its directors,~~supervisors,~~ managers, employees and Substantial Controllers shall comply with relevant laws and regulations and the Company’s internal operational procedures, and shall not surreptitiously engage in bribery. Prohibition of unreasonable presents, hospitality or other improper benefits: The Company and its directors, ~~supervisors, m~~anagers, employees and Substantial Controllers shall not directly or indirectly offer or accept any unreasonable presents, hospitality or other improper benefits so as to establish business relationship or affect commercial transactions. Legal compliance for business operation: When conducting business, the Company and its directors, ~~supervisors, m~~anagers, employees, and Substantial Controllers shall comply with laws and regulations and the applicable prevention programs.	10. Prohibition of offering illegal political donations: When directly or indirectly offering donations to political parties or organizations or individuals participating in political activities, the Company, its directors, managers, employees and Substantial Controllers shall comply with the Political Donations Act and the Company’s relevant internal operational procedures, and shall not make such donations in exchange for commercial benefit or business advantages. 11. Prohibition of improper charitable donations or sponsorship: When making or offering charitable donations and sponsorship, the Company, its directors,~~m~~anagers, employees and Substantial Controllers shall comply with relevant laws and regulations and the Company’s internal operational procedures, and shall not surreptitiously engage in bribery. 12. Prohibition of unreasonable presents, hospitality or other improper benefits: The Company and its directors, managers, employees and Substantial Controllers shall not directly or indirectly offer or accept any unreasonable presents, hospitality or other improper benefits so as to establish business relationship or affect commercial transactions. 14. Legal compliance for business operation: When conducting business, the Company and its directors, managers, employees, and Substantial Controllers shall comply with laws and regulations and the applicable prevention programs.

Before

15. Recusal of conflicts of interests: The Company shall adopt policies for preventing conflicts of interes, and shall also offer appropriate means for directors ~~, supervisors~~ and managers to voluntarily explain whether there is any potential conflict of interest exists between them and the Company.

After Description 15. Recusal of conflicts of interests: The Company shall adopt policies for preventing conflicts of interes, and shall also offer appropriate means for directors and managers to voluntarily explain whether there is any potential conflict of interest exists between them and the Company.

…… ……

The Company’s directors ~~, supervisors~~ and managers shall not take advantage of their positions or their influence in the Company to obtain improper benefits for themselves, their spouses, parents, children or any third party.

18. Education training and review: The Company shall periodically organize training and awareness programs for directors ~~, supervisors~~ , managers, employees and Substantial Controllers so they can fully understand the Company’s determination to implement ethical corporate management, the related policies, prevention programs and the consequences of committing Unethical Conduct.

The Company shall combine the policies of ethical corporate management with its employee performance appraisal system and human resource policies so as to establish a clear and effective reward and discipline system.

21. Review and amendment to the Principles:

The Company’s directors and managers shall not take advantage of their positions or their influence in the Company to obtain improper benefits for themselves, their spouses, parents, children or any third party.

18. Education training and review: The Company shall periodically organize training and awareness programs for directors, managers, employees and Substantial Controllers so they can fully understand the Company’s determination to implement ethical corporate management, the related policies, prevention programs and the consequences of committing Unethical Conduct.

21. Review and amendment to the Principles:

The Company shall at all times The Company shall at all times monitor the development of relevant monitor the development of relevant local and international regulations local and international regulations concerning ethical corporate concerning ethical corporate management, and encourage their management, and encourage their directors, ~~supervisors, m~~ anagers and directors, managers and employees

Before	After	Description
employees to make suggestions, thereby based on which to review and improve the adopted ethical corporate management policies and measures with a view to achieving better implementation of ethical management.	to make suggestions, thereby based on which to review and improve the adopted ethical corporate management policies and measures with a view to achieving better implementation of ethical management.
Article 3: Enforcement The Principles of the Company shall be implemented after been approved b~~y the Supervisors and~~the Board of Directors. The same apply to any amendment thereto.	Article 3: Enforcement The Principles of the Company shall beimplemented with the consent of the Audit Committee andapproved by the Board of Directors and reported to the shareholders meeting. The same apply to any amendment thereto. The consent of the Audit Committee shall be obtained from at least one-half of all members of the Audit Committee. If not approved by more than one-half of all members of the Audit Committee, it shall be approved by more than two-thirds of all directors and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors’meeting. If the Company has established independent directors, when submitting this operation to the Board of Directors for discussion in accordance with the preceding paragraph, the opinions of the independent directors shall be fully considered, and the opinions and reasons for their agreement or objection shall be included in the minutes of the meeting. If an independent director is unable to attend the Board of Directors’ meeting in person to express his or her objection or reservation, he or she shall, unless there is a valid reason, issue a written opinion in advance, which shall be included in the minutes of the Board of Directors’meeting.	Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

【 Attachment 4 】

LOTES CO., LTD. Comparison Table of “Procedures for Ethical Management and Guidelines for Conduct” before and after Amendments

Before

Article 2 (Applicable subjects)

For the purposes of these Procedures and Guidelines, the term “personnel of the Company” refers to any director, ~~supervisor, m~~ anagerial officer, employee, mandatary or person having substantial control, of the Company or its group enterprises and organizations. Any provision, promise, request, or acceptance of improper benefits by any personnel of the Company through a third party will be presumed to be an act by the personnel of the Company.

Article 3 (Unethical conduct)

For the purposes of these Procedures and Guidelines, “unethical conduct” means that any personnel of the Company, in the course of their duties, directly or indirectly provides, promises, requests, or accepts improper benefits or commits a breach of ethics, unlawful act, or breach of fiduciary duty for purposes of acquiring or maintaining benefits. The counterparties of the unethical conduct under the preceding paragraph include public officials, political candidates, political parties or their staffs, and government-owned or private-owned enterprises or institutions and their directors, ~~supervisors, m~~ anagerial officers, employees, persons having substantial control, or other interested parties.

Article 11 (Recusal)

When a director, ~~supervisor, o~~ fficer or other stakeholder of the Company attending or present at a board meeting, or the juristic person represented thereby, has a stake in a matter under discussion in the meeting, that director, ~~supervisor,~~ officer or stakeholder shall state the important aspects of the stake in the meeting and, where there is a likelihood that the interests of the Company would be prejudiced, may not participate in the

After

Article 2 (Applicable subjects)

For the purposes of these Procedures and Guidelines, the term “personnel of the Company” refers to any director, managerial officer, employee, mandatary or person having substantial control, of the Company or its group enterprises and organizations. Any provision, promise, request, or acceptance of improper benefits by any personnel of the Company through a third party will be presumed to be an act by the personnel of the Company.

Article 3 (Unethical conduct)

For the purposes of these Procedures and Guidelines, “unethical conduct” means that any personnel of the Company, in the course of their duties, directly or indirectly provides, promises, requests, or accepts improper benefits or commits a breach of ethics, unlawful act, or breach of fiduciary duty for purposes of acquiring or maintaining benefits. The counterparties of the unethical conduct under the preceding paragraph include public officials, political candidates, political parties or their staffs, and government-owned or private-owned enterprises or institutions and their directors, managerial officers, employees, persons having substantial control, or other interested parties.

Article 11 (Recusal)

When a director, officer or other stakeholder of the Company attending or present at a board meeting, or the juristic person represented thereby, has a stake in a matter under discussion in the meeting, that director, officer or stakeholder shall state the important aspects of the stake in the meeting and, where there is a likelihood that the interests of the Company would be prejudiced, may not participate in the discussion or vote on

Description Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

Before	After	Description
discussion or vote on that proposal, shall recuse himself or herself from any discussion and voting, and may not exercise voting rights as proxy on behalf of another director. The directors shall exercise discipline among themselves, and may not support each other in an inappropriate manner. Where the spouse, a blood relative within the second degree of kinship of a director, or any company which has a controlling or subordinate relation with a director has interests in the matters under discussion in the meeting of the preceding paragraph, such director shall be deemed to have a personal interest in the matter. If in the course of conducting company business, any personnel of the Company discovers that a potential conflict of interest exists involving themselves or the juristic person that they represent, or that they or their spouse, parents, children, or a person with whom they have a relationship of interest is likely to obtain improper benefits, the personnel shall report the relevant matters to both his or her immediate supervisor and the responsible unit, and the immediate supervisor shall provide the personnel with proper instructions. No personnel of the Company may use company resources on commercial activities other than those of the Company, nor may any personnel’s job performance be affected by his or her involvement in the commercial activities other than those of the Company.	that proposal, shall recuse himself or herself from any discussion and voting, and may not exercise voting rights as proxy on behalf of another director. The directors shall exercise discipline among themselves, and may not support each other in an inappropriate manner. Where the spouse, a blood relative within the second degree of kinship of a director, or any company which has a controlling or subordinate relation with a director has interests in the matters under discussion in the meeting of the preceding paragraph, such director shall be deemed to have a personal interest in the matter. If in the course of conducting company business, any personnel of the Company discovers that a potential conflict of interest exists involving themselves or the juristic person that they represent, or that they or their spouse, parents, children, or a person with whom they have a relationship of interest is likely to obtain improper benefits, the personnel shall report the relevant matters to both his or her immediate supervisor and the responsible unit, and the immediate supervisor shall provide the personnel with proper instructions. No personnel of the Company may use company resources on commercial activities other than those of the Company, nor may any personnel’s job performance be affected by his or her involvement in the commercial activities other than those of the Company.
Article 21 (Handling of unethical conduct by personnel of the Company) The Company encourages internal and external personnel to report unethical conducts. Insiders having made a false report or malicious accusation shall be subject to disciplinary action and be removed from office if the circumstance concerned is material. The Company shall internally establish and publicly announce on its website and the intranet, or provide through an independent external institution,an	Article 21 (Handling of unethical conduct by personnel of the Company) The Company encourages internal and external personnel to report unethical conducts. Insiders having made a false report or malicious accusation shall be subject to disciplinary action and be removed from office if the circumstance concerned is material. The Company shall internally establish and publicly announce on its website and the intranet, or provide through an independent external institution,an	Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

Before	After	Description
independent mailbox ([email protected])or hotline, for insiders and outsiders of the Company to submit reports. A whistleblower shall at least furnish the following information: 1. the whistleblower’s name and I.D. number (whistleblowing reports may be submitted anonymously), and an address, telephone number and e-mail address where it can be reached. 2. the informed party’s name or other information sufficient to distinguish its identifying features. 3. specific facts available for investigation. Personnel of the Company handling whistle-blowing matters shall represent in writing they will keep the whistleblowers’ identity and contents of information confidential. The Company also undertakes to protect the whistleblowers from improper treatment due to their whistleblowing. The responsible unit of the Company shall observe the following procedure in handling whistleblowing matters: 1. An information shall be reported to the department head if involving the rank and file and to an independent director~~or supervisor~~if involving a director or a senior executive. 2. The responsible unit of the Company and the department head or personnel being reported to in the preceding subparagraph shall immediately verify the facts and, where necessary, with the assistance of the legal compliance or other related department. 3. If a person being informed of is confirmed to have indeed violated the applicable laws and regulations or the Company’s policy and regulations of ethical management, the Company shall immediately require the violator to cease the conduct and shall make an appropriate disposition. When necessary, the Company will report to the competent authority,refer said	independent mailbox ([email protected])or hotline, for insiders and outsiders of the Company to submit reports. A whistleblower shall at least furnish the following information: 1. the whistleblower’s name and I.D. number (whistleblowing reports may be submitted anonymously), and an address, telephone number and e-mail address where it can be reached. 2. the informed party’s name or other information sufficient to distinguish its identifying features. 3. specific facts available for investigation. Personnel of the Company handling whistle-blowing matters shall represent in writing they will keep the whistleblowers’ identity and contents of information confidential. The Company also undertakes to protect the whistleblowers from improper treatment due to their whistleblowing. The responsible unit of the Company shall observe the following procedure in handling whistleblowing matters: 1. An information shall be reported to the department head if involving the rank and file and to an independent director if involving a director or a senior executive. 2. The responsible unit of the Company and the department head or personnel being reported to in the preceding subparagraph shall immediately verify the facts and, where necessary, with the assistance of the legal compliance or other related department. 3. If a person being informed of is confirmed to have indeed violated the applicable laws and regulations or the Company’s policy and regulations of ethical management, the Company shall immediately require the violator to cease the conduct and shall make an appropriate disposition. When necessary, the Company will report to the competent authority,refer said

Before		After	Description
person to judicial authority for investigation, or institute legal proceedings and seek damages to safeguard its reputation and its rights and interests. 4. Documentation of case acceptance, investigation processes and investigation results shall be retained for five years and may be retained electronically. In the event of a suit in respect of the whistleblowing case before the retention period expires, the relevant information shall continue to be retained until the conclusion of the litigation. 5. With respect to a confirmed information, the Company shall charge relevant units with the task of reviewing the internal control system and relevant procedures and proposing corrective measures to prevent recurrence. 6. The responsible unit of the Company shall submit to the board of directors a report on the whistleblowing case, actions taken, and subsequent reviews and corrective measures.		person to judicial authority for investigation, or institute legal proceedings and seek damages to safeguard its reputation and its rights and interests. 4. Documentation of case acceptance, investigation processes and investigation results shall be retained for five years and may be retained electronically. In the event of a suit in respect of the whistleblowing case before the retention period expires, the relevant information shall continue to be retained until the conclusion of the litigation. 5. With respect to a confirmed information, the Company shall charge relevant units with the task of reviewing the internal control system and relevant procedures and proposing corrective measures to prevent recurrence. 6. The responsible unit of the Company shall submit to the board of directors a report on the whistleblowing case, actions taken, and subsequent reviews and corrective measures.
Article 24 (Enforcement) These Procedures and Guidelines, and any amendments hereto, shall be implemented after adoption by resolution of the board of directors, and shall be delivered to each supervisor and reported to the shareholders meeting. When these Procedures and Guidelines are submitted to the board of directors for discussion, each independent director’s opinions shall be taken into full consideration, and their objections and reservations expressed shall be recorded in the minutes of the board of directors meeting. An independent director that is unable to attend a board meeting in person to express objection or reservation shall provide a written opinion before the board meeting unless there is a legitimate reason to do otherwise, and the opinion shall be recorded in the minutes of the board of directors meeting.		Article 24 (Enforcement) These Procedures and Guidelines, and any amendments hereto, shall be approved by the Audit Committee, implemented after adoption by resolution of the board of directors, and reported to the shareholders meeting. The foregoing consent of the Audit Committee shall be obtained from at least one-half of all members of the Audit Committee. If not approved by more than one-half of all Audit Committee members, it shall be approved by more than two-thirds of all directors, and the resolution of the Audit Committee shall be recorded in the minutes of the board of directors’meeting. When these Procedures and Guidelines are submitted to the board of directors for discussion, each independent director’s opinions shall be taken into full consideration, and their objections and reservations expressed shall be recorded	Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

Before	After	Description
	in the minutes of the board of directors meeting. An independent director that is unable to attend a board meeting in person to express objection or reservation shall provide a written opinion before the board meeting unless there is a legitimate reason to do otherwise, and the opinion shall be recorded in the minutes of the board of directors meeting.

【 Attachment 5 】

Independent Auditor’s Report

To the Board of Directors, Lotes Co., Ltd.:

Audit opinion

We have audited the Statement of Financial Position of Lotes Co., Ltd. (hereinafter referred to as Lotes) as of December 31, 2020 and 2019, the Statement of Comprehensive Income as of January 1 to December 31, 2020 and 2019 as well as the Statement of Changes in Equity, Statement of Cash Flows and the Notes to Individual Financial Statement (including important accounting policies summary).

In our opinions, the compilation of the above individual financial statements present fairly, in all material respects, of the financial status of December 31, 2020 and 2019 in Lotes and the financial performance and consolidated cash flow of January 1 to December 31, 2020 and 2019 prepared according to Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis of the audit opinions

The audit of the parent company only financial statements for fiscal year 2020 was conducted by us in accordance with the Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards (GAAS); The audit of the parent company only financial statements for fiscal year 2019 was conducted by us in accordance with the Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants, CHIN-KUAN-CHENG-SHEN-TZU No. 1090360805 Letter and Generally Accepted Auditing Standards (GAAS). Our responsibilities under these standards will be further explained in the responsibility paragraph of the accountant’s audit on the parent company only financial statements. The personnel regulated by independence at the accounting firm that our accountants work with have been managed according to the code of professional ethics to maintain independence from Lotes as well as perform other responsibilities addressed on the regulation. Based on the audit results of us, we believe we have obtained sufficient and appropriate auditing evidence as the basis to express our audit opinions.

Key audit matters

Key audit matters refer to the most important matters on the audits to Lotes’s parent company only financial statements of fiscal year 2020 based on the professional judgment of our accountants. The matters have been responded on the whole audited parent company only financial statements and during the process of the expression of the audit opinions. There, our accountants will not express opinions separately towards the matters. Based on the judgment of the accountants, the following key audit matters that should be communicated on the audit report are as follows: I. Recognition of income

Please refer to Note 4 (15) to the parent company only financial statements for the accounting policy in terms of income recognition. Please refer to Note 6 (11) to the parent company only financial statements for the refund liability. Please refer to Note 6 (18) to the parent company only financial statements for details about income.

Description of the key audit matters:

discounts were provided for parts of the sales of goods agreed with the customers. Based on the agreements with the customers, the management would estimate the refund liability and include it as a deduction of operating income. Thus, the income recognition evaluation is one of the fundamental evaluation items for accountants in the execution of financial report audit for Lotes Co., Ltd.

The primary audit procedure conducted by the accountants for the aforementioned key audit matters included the understanding and evaluation of the relevant control procedures and methods in the estimation of refund liabilities in terms of the sales procedure and the effectiveness of the design and execution of the control procedure. Regarding the sampling testing for sales close to the balance sheet date, external certification documents were reviewed to assess the adequacy of the income recognition timings. The management’s method to estimate and list refund liabilities were also obtained to assess whether the evaluation is based on the agreed conditions with customers. The adequacy of the refund liability estimate was analyzed with the actual situation afterward.

II. Evaluation of inventory

Please refer to Note 4 (7) for the accounting policy of inventory evaluation. Please refer to Note 5 (1) in the parent company only financial statements for the accounting estimates and assumed uncertainties of the inventory evaluation. Please refer to Note 6 (4) in the parent company only financial statements for the information on the losses from the falling price of inventory.

Description of the key audit matters:

Due to the impacts of rapid changes in the market demand and the development of production technology, the existing products are at risk to become outdated inventory or non-compliant with market demand. Parts of the inventory may become obsolete or have the market prices dropped. Thus, the inventory evaluation is one of the fundamental evaluation items for the accountants in the execution of financial report audit for Lotes Co., Ltd. Corresponding audit procedure:

The primary audit procedure conducted by the accountants for the aforementioned key audit matters included the understanding and evaluation of the basis and methods used by the management to assess the net realizable value of inventory. Review and audit were conducted in terms of the data used by the management as the basis and to estimate the net realizable value, and an evaluation was conducted on the estimated sales price to the latest sales record by sampling. To evaluate the adequacy of the drop in prices, the adequacy of the inventory aging report was checked, and the changes in the inventory aging of each period were analyzed.

Responsibility from management level and governing unit towards the parent company only financial statements

Management level’s responsibility is to prepare the parent company only financial statements present fairly according to Regulations Governing the Preparation of Financial Reports by Securities Issuers and to maintain necessary internal control related to the preparation of the parent company only financial statements in order to ensure there is no major untrue expression on the financial statements due to fraud or error.

When preparing the parent company only financial statements, the responsibility of management level also includes evaluating Lotes’s capability of continuous operation, disclosure of relevant matters and the application of continuous operation accounting model unless the management level intends to liquidate Lotes or suspend its business operation or there is no alternative practical and feasible solution other than liquidation or business suspension.

The governing unit (including supervisors) at Lotes is responsible for supervising the process of financial reports.

Responsibility of accountants’ audit on the parent company only financial statements

The purpose of the parent company only financial statements audited by our accountants is to

obtain reasonable assurance on whether the significant untrue expression exists on the whole parent company only financial statements due to fraud or error as well as issue the audit report. The reasonable assurance is the high certainty; however, it will not be able to guarantee that the significant untrue expression will definitely be able to be detected by generally accepted auditing standards, and the untrue expression might be caused from fraud or error. It is regarded as with significance if the individual amount or the aggregation number of the untrue expression can reasonably predict that it will affect the economic decisions made by the users of the parent company only financial statements.

When we conduct the audit according to generally accepted auditing standards, we use

professional judgment and maintain our professional suspicion. We also executed the following tasks:
Identifying and evaluating the risk of major untrue expression on the parent company only financial statements due to fraud or error; designing and implementing proper responding strategies towards the risk evaluated; and obtaining sufficient and appropriate audit evidence as the basis of audit opinions. Due to fraud might be involving with collusion, counterfeiting, malicious omission untrue declaration, or going out of the internal control, the risk of not detecting the major untrue expression due to fraud will be higher than that due to error.
Obtaining necessary understanding of internal control related to audit in order to design proper audit procedure under the situation of the case. However, its purpose is not to express opinion toward the effectiveness of the internal control in Lotes.
Evaluating the adequacy of the accounting policies used by the management level and the rationality of the accounting evaluation and relevant disclosure concluded.
Based on the audit evidence obtained, conclusion towards the appropriateness of continuous operation accounting basis that the management level adopts and the existence of major uncertainty on events or situations with major concerns affecting Lotes’s capability in continuous operation are made. If we believe major uncertainty existed on the event or situation, we must remind the users of parent company only financial statements on the audit report to pay attention on the relevant disclosure or modify audit opinion when the disclosure is not appropriate. The conclusion that we made is based on the audit evidence obtained up to the audit report day, but future events or situations might cause Lotes not capable in continuous operation.
Evaluating the overall expression, structure and content of the parent company only financial statements (including relevant notes) as well as whether the parent company only financial statements present fairly, in all material respects, relevant transaction and events.
Obtaining sufficient and appropriated audit evidence of the financial information from the investee companies accounted for using equity method as well as express opinions towards the parent company only financial statements. We are in charge of the directing, supervision and execution on the audit cases as well as concluding audit opinions towards the parent company only financial statements of Lotes.

The communication between us and the governing unit includes the audit scope and time planned and major audit findings (including the significant defects on the internal control identified during the auditing process).

We have also provided information to the governing unit that the personnel of the firm—under which our CPAs are working—who are subject to independence requirements have complied with the statement of independence in the CPA code of professional ethics and communicated to the governing unit all relationships and other matters (including relevant safeguards) that may be considered to affect the independence of CPAs.

We determined the key audit matters that we would like to execute on Lotes’s parent company only financial statements for fiscal year 2020 from the communication with the governing unit. We clearly stated the related matters on the audit report unless it is the specific matter that is not allowed to be disclosed to the public according to laws, or under a very rare situation that we decided not to communicate specific matters on the audit report because we can reasonably anticipate the negative influence generated by the communication will be greater than the public interests increased.

KPMG Taiwan

CPAs:

Competent ：[CHIN-KUAN-CHENG-SHEN-] Authority of TZU No. 1000011652 Securities (88) TAI-TSAI-CHENG (VI) Approval No. 18311 Certificate No.[March 24, 2021 ]

Lotes Co., Ltd.

Statement of Financial Position

Dec. 31, 2020 and 2019

Unit: NT$ thousands

Dec. 31, 2020 Amount % $ 497,302 3 2,080 - 2,485 - 4,304,076 26 13,012 - 19,702 - 90,161 1 710,477 4 4,550 -	Dec. 31, 2020 Amount % 21,392 - 2,712 - 11,421 - 2,034,411 12 299,122 2 2,092 - 305,058 2 - - 161,767 1 7,866 -	Dec. 31, 2019 Amount % 14,998 - 18,934 - 14,499 - 2,264,397 15 245,547 2 5,838 - 244,220 2 59 - 157,256 1 7,175 -
5,643,845 34
10,225,811 63 58,276 - - - 299,927 2 97,583 1 63,572 - 6,027 -	2,845,841 17	2,972,923 20
	49,258 - 744 -	41,729 - 943 -
	50,002 -	42,672 -
	2,895,843 17	3,015,595 20
	1,034,779 6 3,958,247 24 9,101,144 56 (594,972) (3)	1,034,779 7 3,959,560 27 7,471,519 50 (650,532) (4)
10,751,196 66
$ 16,395,041 100	13,499,198 83	11,815,326 80
	$ 16,395,041 100	14,830,921 100

(Please read the Notes to the Parent Company Only Financial Statements.)

Manager: HO, TE-YU

Accounting manager: LIU, HSIN-HSIA

Chairperson: CHU, TE-HSIANG

Lotes Co., Ltd.

Statement of Comprehensive Income

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands

2020	％ 100 78	2019	％ 100 82
Amount $ 11,362,435 8,817,635		Amount 9,968,334 8,162,786
2,544,800	22	1,805,548	18
312,675 295,923 53,509 (1,310)	3 3 - -	278,034 249,095 48,179 (542)	3 2 - -
660,797	6	574,766	5
1,884,003	16	1,230,782	13
10,165 62,514 (111,250) (1,420) 1,317 1,294,043	- 1 (1) - - 11	14,173 36,925 (72,584) (592) (2,407) 1,151,326	- 1 (1) - - 12
1,255,369	11	1,126,841	12
3,139,372 407,011	27 4	2,357,623 281,580	25 3
2,732,361	23	2,076,043	22
(7,598) 403 1,520	- - -	(1,148) (16,103) 230	- - -
(5,675)	-	(17,021)	-
45,017 -	- -	(317,409) -	(3) -
45,017	-	(317,409)	(3)
39,342	-	(334,430)	(3)
$ 2,771,703	23	1,741,613	19
$	26.41		20.11
$	26.34		20.06

(Please read the Notes to the Parent Company Only Financial Statements.)

Chairperson: CHU, TE-HSIANG Manager: HO, TE-YU

Accounting manager: LIU, HSIN-HSIA

Lotes Co., Ltd. and Its Subsidiaries

Statement of Change in Equity

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands

Share capital	Share capital	Capital reserve		Retained earnings		Otherequityitems	Otherequityitems	Totalequity 9,506,158 2,076,043 (334,430)
						Exchange difference between foreign operating office’s statement	Unrealized gain or loss on financial assets measured at FVTOCI
Share capital for ordinary shares	Share capital collected in advance		Legal reserve	Special reserve	Undistributed earnings
$ 934,779 - -	125,638 - -	2,466,109 - -	931,082 - -	255,202 - -	5,110,368 2,076,043 (918)	(314,561) (2,459) - - (317,409) (16,103)
-	-	-	-	-	2,075,125	(317,409) (16,103)		1,741,613
- - - - 100,000	- - - - (125,638)	- - - 193,451 1,300,000	160,857 - - - -	- 61,818 - - -	(160,857) (61,818) (900,258) - -	- - - - - - - - - -		- - (900,258) 193,451 1,274,362
1,034,779 - -	- - -	3,959,560 - -	1,091,939 - -	317,020 - -	6,062,560 2,732,361 (6,078)	(631,970) (18,562) - - 45,017 403		11,815,326 2,732,361 39,342
-	-	-	-	-	2,726,283	45,017 403		2,771,703
- - - - -	- - - - -	- - - (1,313) -	207,604 - - - -	- 333,513 - - -	(207,604) (333,513) (1,086,518) - (10,140)	- - - - - - - - - 10,140		- - (1,086,518) (1,313) -
$ 1,034,779	-	3,958,247	1,299,543	650,533	7,151,068	(586,953) (8,019)		13,499,198

(Please read the Notes to the Parent Company Only Financial Statements.)

Chairperson: CHU, TE-HSIANG

Accounting manager: LIU, HSIN-HSIA

Manager: HO, TE-YU

Lotes Co., Ltd.

Statement of Cash Flows

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands

Cash flows from operating activities: Net profit before tax Items of adjustment: Items of income and expenses Depreciation expense Amortization expense Expected credit loss Interest expense Interest income Share of the profit from subsidiaries, associates and joint ventures accounted for using equity method Net loss (gain) on financial assets (liabilities) measured at FVTPL Losses from the price drop and obsolescence of inventory Profit from the disposal and scaping of property, plant and equipment Total of the items of income and expenses Change in assets/liabilities related to operating activities: Net change in the assets related to operating activities: Decrease (increase) in notes receivable Increase in accounts receivable Decrease (increase) in other accounts receivable Increase in inventory Increase in payments in advance Total net change in the assets related to operating activities Net change in the liabilities related to operating activities: Increase in contract liabilities Decrease in notes payable Increase (decrease) in accounts payable Increase in other accounts payable Increase (decrease) in provisions Decrease in other current liabilities Increase in refund liabilities Increase in other non-current liabilities Total net change in the liabilities related to operating activities Total net change in the assets and liabilities related to operating activities Total of the adjustment items Cash inflow generated from operating activities Interests received Dividends received Interests paid Income tax paid Cash flows in investing activities: Acquisition of investment accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase in other accounts receivable Increase in intangible assets Acquisition of investment property Decrease in other non-current assets Net cash outflow from investment activities Cash flows in financing activities: Increase in short-term loans Repayment of lease principal Issuance of cash dividends Capital increase by cash Net cash outflow from financing activities Increase (decrease) in cash and cash equivalents Beginning balance of cash and cash equivalents Ending balance of cash and cash equivalents	2020 $ 3,139,372 7,274 11,778 (2,627) 1,420 (10,165) (1,294,043) (2,080) 29,666 (136)	2019 2,357,623 4,102 1,048 1,865 592 (14,173) (1,151,326) - 1,193 (17)
	(1,258,913)	(1,156,716)
	(810) (403,834) 17,123 (149,055) (910)	468 (375,345) (7,399) (77,315) 5,724
	(537,486)	(453,867)
	6,394 (16,222) (233,064) 49,829 (69) 691 4,511 (199)	11,076 (26,337) 321,375 35,535 59 716 70,373 (70)
	(188,129)	412,727
	(725,615)	(41,140)
	(1,984,528)	(1,197,856)
	1,154,844 10,763 (1,420) (339,638)	1,159,767 13,848 (1,125) (211,848)
	824,549	960,642
	(14,385) (1,181) 252 (966) (58,424) (17,923) 9,435	- (15,581) 427 (85,950) (21,357) - (9,435)
	(83,192)	(131,896)
	- (59) (1,086,518) -	(720,000) (59) (900,258) 1,274,362
	(1,086,577)	(345,955)
	(345,220) 842,522	482,791 359,731
	$ 497,302	842,522

(Please read the Notes to the Parent Company Only Financial Statements.) Chairperson: CHU, TE-HSIANG Manager: HO, TE-YU

Accounting manager: LIU, HSIN-HSIA

Independent Auditor’s Report

To the Board of Directors, Lotes Co., Ltd.:

Audit opinion

We have audited the Statement of Financial Position of Lotes Co., Ltd. (hereinafter referred to as Lotes) as of December 31, 2020 and 2019, the Statement of Comprehensive Income as of January 1 to December 31, 2020 and 2019 as well as the Statement of Changes in Equity, Statement of Cash Flows and the Notes to Consolidated financial statement (including important accounting policies summary).

In our opinions, the compilation of the above consolidated financial statements present fairly, in all material respects, of the financial status of December 31, 2020 and 2019 in Lotes and the financial performance and consolidated cash flow of January 1 to December 31, 2020 and 2019 prepared according to Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis of the audit opinions

The audit of the consolidated financial statements for fiscal year 2020 was conducted by us in accordance with the Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards (GAAS); The audit of the consolidated financial statements for fiscal year 2019 was conducted by us in accordance with the Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants, CHIN-KUAN-CHENG-SHEN-TZU No. 1090360805 Letter and Generally Accepted Auditing Standards (GAAS). Our responsibilities under these standards will be further explained in the responsibility paragraph of the accountant’s audit on the consolidated financial statements. The personnel regulated by independence at the accounting firm that our accountants work with have been managed according to the code of professional ethics to maintain independence from Lotes as well as perform other responsibilities addressed on the regulation. Based on the audit results of us, we believe we have obtained sufficient and appropriate auditing evidence as the basis to express our audit opinions.

Key audit matters

Key audit matters refer to the most important matters on the audits to Lotes’s consolidated financial statements of fiscal year 2020 based on the professional judgment of our accountants. The matters have been responded on the whole audited consolidated financial statements and during the process of the expression of the audit opinions. There, our accountants will not express opinions separately towards the matters. Based on the judgment of the accountants, the following key audit matters that should be communicated on the audit report are as follows: I. Recognition of income

Please refer to Note 4 (15) to the consolidated financial statements for the accounting policy in terms of income recognition. Please refer to Note 6 (15) to the consolidated financial statements for the refund liability. Please refer to Note 6 (23) to the consolidated financial statements for details about income.

Description of the key audit matters:

The operating income is the most critical factor when determining the operational performance of Lotes Co., Ltd. Users of the statements are cautiously concerned about the performance of the operating income. In response to the market conditions and business needs, discounts were provided for parts of the sales of goods agreed with the customers. Based on the agreements with the customers, the management would estimate the refund liability and include it as a deduction of operating income. Thus, the income recognition evaluation is one of the fundamental evaluation items for accountants in the execution of financial report audit for Lotes Co., Ltd.

Corresponding audit procedure:

II. Evaluation of inventory

Please refer to Note 4 (8) for the accounting policy of inventory evaluation. Please refer to Note 5 (1) in the consolidated financial statements for the accounting estimates and assumed uncertainties of the inventory evaluation. Please refer to Note 6 (4) in the consolidated financial statements for the information on the losses from the falling price of inventory. Description of the key audit matters:

Other matters

Lotes Co., Ltd. has prepared the parent company only financial statements of 2020 and 2019, and we have provided the audit reports with unqualified opinions which were registered for regerence. Responsibility from management level and governing unit towards the consolidated financial statements

Management level’s responsibility is to prepare the consolidated financial statements present fairly according to Regulations Governing the Preparation of Financial Reports by Securities Issuers and to maintain necessary internal control related to the preparation of the consolidated financial statements in order to ensure there is no major untrue expression on the financial statements due to fraud or error.

When preparing the consolidated financial statements, the responsibility of management level also includes evaluating Lotes’s capability of continuous operation, disclosure of relevant matters and the application of continuous operation accounting model unless the management level intends to liquidate Lotes or suspend its business operation or there is no alternative practical and feasible solution other than liquidation or business suspension.

The governing unit (including supervisors) at Lotes is responsible for supervising the process of financial reports.

Responsibility of accountants’ audit on the consolidated financial statements

The purpose of the consolidated financial statements audited by our accountants is to obtain reasonable assurance on whether the significant untrue expression exists on the whole consolidated financial statements due to fraud or error as well as issue the audit report. The reasonable assurance is the high certainty; however, it will not be able to guarantee that the significant untrue expression will definitely be able to be detected by generally accepted auditing standards, and the untrue expression

might be caused from fraud or error. It is regarded as with significance if the individual amount or the aggregation number of the untrue expression can reasonably predict that it will affect the economic decisions made by the users of the consolidated financial statements.

When we conduct the audit according to generally accepted auditing standards, we use

professional judgment and maintain our professional suspicion. We also executed the following tasks:

Identifying and evaluating the risk of major untrue expression on the consolidated financial statements due to fraud or error; designing and implementing proper responding strategies towards the risk evaluated; and obtaining sufficient and appropriate audit evidence as the basis of audit opinions. Due to fraud might be involving with collusion, counterfeiting, malicious omission untrue declaration, or going out of the internal control, the risk of not detecting the major untrue expression due to fraud will be higher than that due to error.
Obtaining necessary understanding of internal control related to audit in order to design proper audit procedure under the situation of the case. However, its purpose is not to express opinion toward the effectiveness of the internal control in Lotes.
Evaluating the adequacy of the accounting policies used by the management level and the rationality of the accounting evaluation and relevant disclosure concluded.
Based on the audit evidence obtained, conclusion towards the appropriateness of continuous operation accounting basis that the management level adopts and the existence of major uncertainty on events or situations with major concerns affecting Lotes’s capability in continuous operation are made. If we believe major uncertainty existed on the event or situation, we must remind the users of consolidated financial statements on the audit report to pay attention on the relevant disclosure or modify audit opinion when the disclosure is not appropriate. The conclusion that we made is based on the audit evidence obtained up to the audit report day, but future events or situations might cause Lotes not capable in continuous operation.
Evaluating the overall expression, structure and content of the consolidated financial statements (including relevant notes) as well as whether the consolidated financial statements present fairly, in all material respects, relevant transaction and events.
Obtaining sufficient and appropriated audit evidence of the financial information from the investee companies accounted for using equity method as well as express opinions towards the consolidated financial statements. We are in charge of the directing, supervision and execution on the audit cases as well as concluding audit opinions towards the consolidated financial statements of Lotes. The communication between us and the governing unit includes the audit scope and time planned

and major audit findings (including the significant defects on the internal control identified during the auditing process).

We determined the key audit matters that we would like to execute on Lotes’s consolidated financial statements for fiscal year 2020 from the communication with the governing unit. We clearly stated the related matters on the audit report unless it is the specific matter that is not allowed to be disclosed to the public according to laws, or under a very rare situation that we decided not to communicate specific matters on the audit report because we can reasonably anticipate the negative influence generated by the communication will be greater than the public interests increased.

KPMG Taiwan

CPA:

Competent Authority of Securities Approval Certificate No.[March 24, 2021 ]

：[CHIN-KUAN-CHENG-SHEN-] TZU No. 1000011652 (88) TAI-TSAI-CHENG (VI) No. 18311

Lotes Co., Ltd. and Its Subsidiaries

Consolidated Statement of Financial Position

Dec. 31, 2020 and 2019

Unit: NT$ thousands

Assets Current assets: 1100 Cash and cash equivalents (Note 6 (1) and (26)) 1110 Financial assets measured at FVTPL – current (Note 6 (2) and (26)) 1120 Financial assets measured at FVTOCI – current (Note 6 (2) and (26)) 1150 Net notes receivable (Note 6 (3) and (26)) 1170 Net accounts receivable (Note 6 (3) and (26)) 1200 Other accounts receivable (Note 6 (3) and (22)) 1220 Tax assets (Note 6 (19)) 130X Net inventory (Note 6 (4)) 1410 Advance payment 1476 Other financial assets – current (Note 6 (11) and (26)) 1479 Other current assets – other Non-current assets: 1517 Financial assets measured at FVTOCI – non-current (Note 6 (2) and (26)) 1600 Property, plant and equipment (Note 6 (7) and 8) 1755 Right-of-use assets (Note 6 (8)) 1760 Net worth of investment property (Note 6 (9)) 1780 Intangible assets (Note 6 (10)) 1840 Deferred tax assets (Note 6 (19)) 1980 Other financial assets – non-current (Note 6 (11) and (26)) 1900 Other non-current assets Total of assets	Dec. 31, 2020 Amount % $ 2,949,412 15 122,960 1 2,016 - 54,105 - 6,840,879 35 357,029 2 12,937 - 2,559,028 13 62,208 1 87,320 1 6,665 -	Dec. 31, 2019 Amount % 2,845,994 17 240,034 1 6,438 - 15,257 - 5,949,268 37 219,031 1 758 - 1,976,021 12 137,348 1 - - 10,563 - 11,400,712 69 - - 3,514,714 22 383,426 2 283,002 2 99,789 1 123,925 1 85,923 1 388,701 2 4,879,480 31 16,280,192 100 2130 Contract liabilities - current (Note 6 (23)) 2150 Notes payable (Note 6 (26)) 2170 Accounts payable (Note 6 (26)) 2200 Other payables (Note 6 (26)) 2230 Tax liabilities - current (Note 6 (19)) 2280 Lease liabilities - current (Note 6 (14), (26) and (29)) 2365 Refund liabilities - current (Note 6 (15)) 2300 Other current liabilities 2322 Long-term loans of which the maturity was within 1 year or 1 operating cycle (Note 6 (13), (26), (29) and Note 8) Non-current liabilities: 2540 Long-term loans (Note 6 (13), (26), (29) and Note 8) 2550 Provisions - non-current (Note 6 (16)) 2560 Tax liabilities – non-current (Note 6 (19)) 2570 Deferred tax liabilities (Note 6 (19)) 2580 Lease liabilities – non-current (Note 6 (14) and (26) and (29)) 2600 Other non-current liabilities Total of liabilities Equity to the owner of parent company: 3110 Share capital for ordinary shares (Note 6 (20)) 3200 Capital reserves (Note 6 (20)) 3300 Retained earnings (Note 6 (20)) 3400 Other equity (Note 6 (20)) Total of equity attributable to the owners of parent company 36XX Non-controlling interests (Note 6 (6)) Total of equity Total of liabilities and equity	91,659 1 19,947 - 3,574 - 19,000 - 2,501,155 13 1,885,062 12 1,206,695 6 964,415 6 505,527 3 436,898 3 71,971 - 94,851 1 161,767 1 157,256 1 33,197 - 23,337 - 5,335 - - -
			4,580,880 24 3,630,746 23
			18,661 - - - 49,258 - 41,729 - 21,037 - - - 27,054 - - - 104,279 1 60,560 - 2,167 - 1,932 -
	13,054,559 68
	20,120 - 4,495,974 23 399,749 2 368,019 2 155,510 1 127,144 1 - - 661,820 3
			222,456 1 104,221 -
			4,803,336 25 3,734,967 23
			1,034,779 5 1,034,779 6 3,958,247 21 3,959,560 24 9,101,144 47 7,471,519 46 (594,972) (3) (650,532) (4)
	6,228,336 32
			13,499,198 70 11,815,326 72
			980,361 5 729,899 5
			14,479,559 75 12,545,225 77
			$ 19,282,895 100 16,280,192 100
	$ 19,282,895 100

Liabilities and equity Current liabilities:

2100 Short-term loans (Note 6 (12), (26), (29), 8 and 9)

Dec. 31, 2020 Dec. 31, 2019 Amount % Amount % $ - - 29,980 -

(Please read the Notes to the Consolidated Financial Statements.)

Chairperson: CHU, TE-HSIANG

Accounting manager: LIU, HSIN-HSIA

Manager: HO, TE-YU

Lotes Co., Ltd. and Its Subsidiaries

Consolidated Statement of Comprehensive Income

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands

2020	% 100 60	2019	% 100 64
Amount $ 17,291,332 10,361,137		Amount 15,088,872 9,620,962
6,930,195	40	5,467,910	36
642,420 1,117,631 1,459,647 2,845	4 6 8 -	562,701 1,049,810 1,104,315 460	4 7 7 -
3,222,543	18	2,717,286	18
3,707,652	22	2,750,624	18
28,789 13,055 214,267 (276,469) (18,609) 1,317	- - 1 (2) - -	32,820 - 179,220 (105,785) (22,711) (2,407)	- - 2 (1) - -
(37,650)	(1)	81,137	1
3,670,002 834,413	21 5	2,831,761 687,293	19 5
2,835,589	16	2,144,468	14
(7,598) 372 1,520	- - -	(1,148) (16,103) 230	- - -
(5,706)	-	(17,021)	-
50,352 1,733	- -	(320,897) -	(2) -
48,619	-	(320,897)	(2)
42,913	-	(337,918)	(2)
$ 2,878,502	16	1,806,550	12
$ 2,732,361 103,228	15 1	2,076,043 68,425	13 1
$ 2,835,589	16	2,144,468	14
$ 2,771,703 106,799	16 -	1,741,613 64,937	12 -
$ 2,878,502	16	1,806,550	12
$	26.41		20.11
$	26.34		20.06

(Please read the Notes to the Consolidated Financial Statements.)

Chairperson: CHU, TE-HSIANG

Manager: HO, TE-YU

Accounting manager: LIU, HSIN-HSIA

Lotes Co., Ltd. and Its Subsidiaries

Consolidated Statement of Change in Equity

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands

		Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company	Equity attributable to the owners of the parent company		Non-controlli ng interests	Total equity 9,871,482 2,144,468 (337,918)
Share capital		Capital reserve	Retained earnings			Otherequityitems		Total equity attributable to the owners of the parent company
						Exchange difference between foreign operating office’s statement	Unrealized gain or loss on financial assets measured at FVTOCI
Share capital for ordinary shares	Share capital collected in advance		Legal reserve	Special reserve	Undistributed earnings
$ 934,779 - -	125,638 - -	2,466,109 - -	931,082 - -	255,202 - -	5,110,368 2,076,043 (918)	(314,561) (2,459) - - (317,409) (16,103)		9,506,158 2,076,043 (334,430)	365,324 68,425 (3,488)
-	-	-	-	-	2,075,125	(317,409) (16,103)		1,741,613	64,937	1,806,550
- - - - 100,000 - -	- - - - (125,638) - -	- - - 193,451 1,300,000 - -	160,857 - - - - - -	- 61,818 - - - - -	(160,857) (61,818) (900,258) - - - -	- - - - - - - - - - - - - -		- - (900,258) 193,451 1,274,362 - -	- - - - - 310,257 (10,619)	- - (900,258) 193,451 1,274,362 310,257 (10,619)
1,034,779 - -	- - -	3,959,560 - -	1,091,939 - -	317,020 - -	6,062,560 2,732,361 (6,078)	(631,970) (18,562) - - 45,017 403		11,815,326 2,732,361 39,342	729,899 103,228 3,571	12,545,225 2,835,589 42,913
-	-	-	-	-	2,726,283	45,017 403		2,771,703	106,799	2,878,502
- - - -	- - - -	- - - (1,313)	207,604 - - -	- 333,513 - -	(207,604) (333,513) (1,086,518) -	- - - - - - - -		- - (1,086,518) (1,313)	- - - -	- - (1,086,518) (1,313)

(Please read the Notes to the Consolidated Financial Statements.)

Chairperson: CHU, TE-HSIANG

Accounting manager: LIU, HSIN-HSIA

Manager: HO, TE-YU

Increase or decrease in non-controlling interests - - - - - - - - - 192,780 192,780 Disposal of the equity instruments measured at FVTOCI - - - - - (10,140) - 10,140 - - - - - - - - - - - - Cash dividends issued by subsidiaries for non-controlling (49,117) (49,117) interests Balance on Dec. 31, 2020 $ 1,034,779 - 3,958,247 1,299,543 650,533 7,151,068 (586,953) (8,019) 13,499,198 980,361 14,479,559

(Please read the Notes to the Consolidated Financial Statements.)

Chairperson: CHU, TE-HSIANG

Accounting manager: LIU, HSIN-HSIA

Manager: HO, TE-YU

Lotes Co., Ltd. and Its Subsidiaries

Consolidated Statement of Cash Flows

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands

Cash flows from operating activities: Net profit before tax Items of adjustment: Items of income and expenses Depreciation expense Amortization expense Expected credit loss Interest expense Interest income Income from dividends Loss (gain) on the disposal and obsolescence of property, plant and equipment Net loss (gain) on financial assets (liabilities) measured at FVTPL Losses from the price drop and obsolescence of inventory Profit from bargain purchase Compensation costs of employee stock options Other items Total of the items of income and expenses Change in assets/liabilities related to operating activities: Net change in the assets related to operating activities: Decrease (increase) in notes receivable Increase in accounts receivable Increase in other accounts receivable Decrease (increase) in inventory Increase in payments in advance Decrease (increase) in other current assets Decrease in other financial assets Total net change in the assets related to operating activities Net change in the liabilities related to operating activities: Increase (decrease) in contract liabilities Decrease in notes payable Increase in accounts payable Increase in other accounts payable Increase (decrease) in provisions Decrease in other current liabilities Increase in refund liabilities Increase in other non-current liabilities Total net change in the liabilities related to operating activities Total net change in the assets and liabilities related to operating activities Total of the adjustment items Cash inflow generated from operating activities Interests received Dividends received Interests paid Income tax paid Net cash inflow from operating activities Cash flows in investing activities: Acquisition of financial assets measured at FVTOCI Disposal of financial assets measured at FVTOCI Acquisition of financial assets measured at FVTPL Disposal of financial assets measured at FVTPL Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase in intangible assets acquired Cash outflow generated from merger Acquisition of investment property Increase in other non-current assets Net cash outflow from investment activities Cash flows in financing activities: Increase (decrease) in short-term loans Borrowing of long-term loans Repayment of long-term loans Repayment of lease principal Decrease in other non-current liabilities Issuance of cash dividends Issuance of cash dividends for non-controlling interests Capital increase by cash Changes in non-controlling interests Changes in subsidiaries, associates and joint ventures accounted for using equity method Net cash outflow from financing activities Effect of changes in exchange rates on cash and cash equivalents Increase in cash and cash equivalents Beginning balance of cash and cash equivalents Ending balance of cash and cash equivalents	2020 $ 3,670,002 1,115,332 26,245 1,528 18,609 (28,789) (1,341) (2,446) (55,053) 48,028 (13,055) 7,795 19	2019 2,831,761 1,023,478 12,368 2,867 22,711 (32,820) (875) 27,655 (7,267) 39,165 - 4,709 -
	1,116,872	1,091,991
	(30,249) (788,350) (133,684) (486,885) 87,437 3,898 4,960	858 (657,895) (4,427) 212,641 (46,534) 2,067 48,332
	(1,342,873)	(444,958)
	37,431 (23,091) 539,618 203,974 (69) 9,860 4,511 -	13,787 (26,396) 141,590 154,112 59 5,674 70,373 206
	772,234	359,405
	(570,639)	(85,553)
	546,233	1,006,438
	4,216,235 26,790 1,341 (18,616) (756,926)	3,838,199 42,560 875 (24,089) (497,845)
	3,468,824	3,359,700
	(20,186) 4,860 (125,418) 297,545 (1,774,297) 38,123 (80,912) (59,647) (17,923) (310,189)	- - (313,922) 177,274 (1,127,735) 6,162 (52,630) - - (181,017)
	(2,048,044)	(1,491,868)
	(66,660) 20,035 (125,583) (114,174) (75,956) (1,086,518) (49,117) - 137,365 (5,377)	(889,663) - - (121,833) - (900,258) (10,619) 1,274,362 308,003 190,996
	(1,365,985)	(149,012)
	48,623 103,418 2,845,994	(320,897) 1,397,923 1,448,071
	$ 2,949,412	2,845,994

(Please read the Notes to the Consolidated Financial Statements.)

Chairperson: CHU, TE-HSIANG

Accounting manager: LIU, HSIN-HSIA

Manager: HO, TE-YU

`【` Attachment 6 `】`

Lotes Co., Ltd.

Earning Distribution Table

2020

Unit: NT$

2020	Unit: NT$
Item	Amount
Unallocated earnings at the beginning of 2020	4,434,924,405
Add: Remeasurement of net defined benefit liabilities	-6,078,368
Add: Disposal of equity instruments measured at fair value through other comprehensive income	-10,139,625

Adjusted opening undistributed earnings for the year ended Dec. 31,2020	4,418,706,412
Add: Net income after tax for 2020	2,732,361,778
Add: Reversal of special reserve from prior years due to equityreduction(Note)	55,563,484
Less: 10% legal reserve	271,614,379
Total available-for-distribution earnings	6,935,017,295

Less: Dividends to shareholders - cash (NT$13.3per share)	1,376,256,070

Undistributed earnings at the end of 2020	5,558,761,225
Note: The net amount recorded as a deduction from other shareholders' equity in 2020 was NT$594,968,961, and the same amount of special reserve should be provided from the current period's profit or loss and prior period's undistributed earnings. The special reserve should be reversed. However, $650,532,445 of this amount has been provided for as special reserve in 2019 from prior period's profit or loss, therefore, the difference of NT$55,563,484 in special reserve should be reversed.

【 Attachment 7 】

LOTES CO., LTD.

Comparison Table of “Rules of Procedure for Shareholders Meetings” before and after Amendments

Before After Article 3 Article 3 Unless otherwise provided by law or Unless otherwise provided by law or regulation, the Company’s shareholders regulation, the Company’s shareholders meetings shall be convened by the meetings shall be convened by the board of directors. board of directors.

Description The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE.

		Amendments	Amendments
Before		After		Description
	Article 3 Unless otherwise provided by law or regulation, the Company’s shareholders meetings shall be convened by the board of directors. ~~The convening of an annual~~ ~~shareholders’ meeting shall be notified~~ ~~to each shareholder within 30 days prior~~ ~~to the date of the notice. For~~ ~~shareholders holding less than one~~ ~~thousand registered shares, the notice~~ ~~may be sent to the Market Observation~~ ~~Post System (MOPS) within 30 days~~ ~~ago. The convening of an extraordinary~~ ~~shareholders’ meeting shall be sent to~~ ~~all shareholders within 15 days of the~~ ~~date. For shareholders holding less than~~ ~~one thousand registered shares, the~~ ~~notice may be sent to the MOPS within~~ ~~15 days of the date.~~ The reasons for convening a shareholders meeting shall be specified in the meeting notice and public announcement. With the consent of the		Article 3 Unless otherwise provided by law or regulation, the Company’s shareholders meetings shall be convened by the board of directors. 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 special shareholders meeting. The Company shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. In addition, before 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 as well as being distributed on-site at the meeting place. The reasons for convening a shareholders meeting shall be specified in the meeting notice and public announcement. With the consent of the	The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE. The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted.

	Before		After	Description
	addressee, the meeting notice may be given in electronic form. Election or dismissal of directors~~or~~ ~~supervisors,~~amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a 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 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 motione; the main content of the notice may be placed on the website designated by the securities authority or the Company, and the website address shall be included in the notice. Where re-election of all directors~~and~~ ~~supervisors~~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. 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.~~However, the board of directors~~ ~~may include proposals made by a~~ ~~shareholder for urging the Company to~~ ~~promote public interests or fulfill its~~ ~~social responsibilities.When the~~ ~~circumstances of any subparagraph of~~		addressee, the meeting notice may be given in electronic form. Election or dismissal of directors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a 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 Issuersshall 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 motione. Where re-election of all 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. 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

Before	After	Description
~~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.~~	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.
Article 4 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. …… After a proxy form has been delivered to the Company, if the shareholder intends to attend the meeting in person, 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.	Article 4 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. …… 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 meetingbytheproxyshallprevail.	The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE.
Article 6	Article 6 The Company shall specify in its shareholders meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention. 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. Shareholders and their proxies	The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE.

Before		After	Description
The Company shall furnish the attending shareholders and their proxies (collectively, as “shareholders”) with an attendance book to sign, or attending shareholders may hand in a sign-in card lieu of signing in. 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. Shareholders shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. Solicitors soliciting proxy forms shall also bring identification documents for verification. 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.		(collectively, as“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. Solicitors soliciting proxy forms shall also bring identification documents for verification. The Company shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card lieu of signing in. 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. Shareholders shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. Solicitors soliciting proxy forms shall also bring identification documents for verification. 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.	The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted.
Article 7 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 thepowers of the		Article 7 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 thepowers of the	The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE.

Before		After	Description
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. 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. 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. The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders meeting in a non-votingcapacity.		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. 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. 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. The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders meeting in a non-votingcapacity.
Article 8 The Company shall make an uninterrupted audio and video recording of the shareholders meeting and retain for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.		Article 8 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 theshareholders meeting, and the voting and vote counting procedures. The recorded materialsof the preceding paragraphshall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the CompanyAct,the recordingshall	The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE.

	Before		After	Description
			be retained until the conclusion of the litigation.
	Article 13 A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act. …… Except as otherwise provided in the Company Act and in the Company’s articles of incorporation, 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 announce the total number of voting rights represented by the attending shareholders. ~~A proposal shall be deemed approved~~ ~~by the chair if there is no objection~~ ~~from all members present and shall~~ ~~have the same effect as voting; if there~~ ~~is an objection, a voting shall be taken~~ ~~in accordance with the preceding~~ ~~provisions.~~ 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. Vote monitoring and counting personnel for the votingon aproposal		Article 13 A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act. …… Except as otherwise provided in the Company Act and in the Company’s articles of incorporation, 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 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 MOPS. 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. Vote monitoring and counting personnel for the votingon aproposal	The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE.

Before	After	Description
shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company. Vote counting shall be conducted in public at the place of the shareholders meeting. The results of the voting shall be announced on-site at the meeting, and a record made of the vote.	shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company. Vote counting for shareholders meeting proposals or electionsshall 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.
Article 14 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. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.	Article 14 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. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.	The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE. The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted.
Article 15 Resolutions of a shareholders’ meeting shall be recorded in the minutes of the meeting pursuant to Article 183 of the Company Act. 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 byeach candidate in the event of	Article 15 Resolutions of a shareholders’ meeting shall be recorded in the minutes of the meeting pursuant to Article 183 of the Company Act. 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 byeach candidate in the event of	The amendments were made in accordance with the Sample Template of Rules of Procedure for Shareholders Meetings announced by the TWSE. The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted.

	Before	After	Description
	an election of directors~~or supervisors~~. The minutes shall be retained for the duration of the existence of the Company. ~~The preceding method of resolutions is~~ ~~to be determined by the chair in~~ ~~consultation with shareholders. If there~~ ~~is no objection to the resolution by~~ ~~shareholders, it shall be stated that “the~~ ~~resolution is passed without objection~~ ~~by the chair after consultation with all~~ ~~shareholders present”; however, if there~~ ~~is an objection to the resolution, the~~ ~~manner in which the resolution is~~ ~~adopted and the proportion of votes cast~~ ~~to the number of votes cast shall be~~ ~~stated.~~	an election of directors. The minutes shall be retained for the duration of the existence of the Company.

`【` Attachment 8 `】`

Lotes Co., Ltd. Comparison Table of Articles of Incorporation

ExistingProvisions	ExistingProvisions	Amendments	Amendments	Description
Chapter 4: Directors and	~~Supervisors~~	Chapter 4: Directors and Committee	Audit	The Audit Committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the Supervisors is deleted.
Article 13: The Company has five to nine directors ~~and two to four supervisors,~~all of whom are appointed for a term of three years and all the seats are entitled to be re-elected. For the aforementioned number of directors of this Company, the number of independent directors should not be less than two persons and should not be less than one-fifth of the total numbers of directors. In terms of the professional qualifications, shareholding, and part-time restrictions,independence determination, nomination and selection methods, and other compliance matters, the regulations of the competent security authorities must be followed. The nomination system is adopted for the election of the directors~~and~~ ~~supervisors i~~n this Company. The shareholders must elect from the candidate list of directors~~and~~ ~~supervisors.~~ The regulations of the competent security authorities must be followed in terms of the total shareholding ratio of all its directors~~and supervisors~~.		Article 13: The Company has five to nine directors, all of whom are appointed for a term of three years and all the seats are entitled to be re-elected. For the aforementioned number of directors of this Company, the number of independent directors should not be less than two persons and should not be less than one-fifth of the total numbers of directors. In terms of the professional qualifications, shareholding, and part-time restrictions,independence determination, nomination and selection methods, and other compliance matters, the regulations of the competent security authorities must be followed. The nomination system is adopted for the election of the directors~~i~~n this Company. The shareholders must elect from the candidate list of director. The regulations of the competent security authorities must be followed in terms of the total shareholding ratio of all its directors. The Company's Audit Committee is composed of all independent directors in accordance with the law. The Audit Committee and its members exercise their powers and responsibilities and deal with related matters in accordance with the Securities and Exchange Act and relevant laws and regulations.		The same as above.
Article 13-2: In the event that the seats of one-third of the Directors are vacant~~or all the~~ ~~Supervisors a~~re dismissed,the Board		13-2: In the event that the seats of one-third of the Directors are vacant, the Board of Directors shall convene an interim		Same as above.

ExistingProvisions	Amendments	Description
of Directors shall convene an interim election within 60 days and the term of office shall be limited to the period for which the original seats were filled.	election within 60 days and the term of office shall be limited to the period for which the original seats were filled.
Article 13-3: The Directors~~and Supervisors~~of the Company shall be notified of the convening of the Board of Directors seven days in advance and the Company may convene the Board of Directors at any time in case of emergency. The Board of Directors of the Company may be convened in writing,bye-mail or byfax.	Article 13-3: The Directors~~o~~f the Company shall be notified of the convening of the Board of Directors seven days in advance and the Company may convene the Board of Directors at any time in case of emergency. The Board of Directors of the Company may be convened in writing, by e-mail or by fax.	Same as above.
Article 15-3: Supervisors may exercise their powers according to laws and regulations and may attend the board meeting without votingright.	(Deleted)	Same as above.
Article 15~~-4:~~ All directors and supervisors of the company must be insured with the corresponding liability insurance during the term of office based on their business scope with the purpose to reduce and diversity the loss risks of the directors and supervisors of the Company, the Company, and the shareholders. In terms of the liability insurance of the directors and supervisors, the Board is authorized to take in charge of it.	Article 15~~-4:~~ All directors and supervisors of the company must be insured with the corresponding liability insurance during the term of office based on their business scope with the purpose to reduce and diversity the loss risks of the directors of the Company, the Company, and the shareholders. In terms of the liability insurance of the directors, the Board is authorized to take in charge of it.	Same as above.
Article 16: When the directors~~and supervisors~~of the Company are executing operations of the Company, the Company must pay their compensation regardless of the Company’s financial status, with surplus or loss. The compensation is based on the level of participation and contribution to the company’s operations, and the Board is authorized to consult the industry ’s usual standards, not exceeding the standard of the highest salary scale set by the Company’s salary assessment method. If the company has surpluses, the compensation shall be distributed in accordance with the provisions of Article 19.	Article 16: When the directors of the Company are executing operations of the Company, the Company must pay their compensation regardless of the Company’s financial status, with surplus or loss. The compensation is based on the level of participation and contribution to the company’s operations, and the Board is authorized to consult the industry ’s usual standards, not exceeding the standard of the highest salary scale set by the Company’s salary assessment method. If the company has surpluses, the compensation shall be distributed in accordance with the provisions of Article 19.	Same as above.
Article 18:	Article 18:	Same as above.

ExistingProvisions	Amendments	Description
At the end of every fiscal year, the board shall submit the papers and lists as below before the start of shareholder’s meeting to the shareholders~~within 20 days before~~ ~~shareholders’ meeting~~for approval. (1). Business Report; (2). Financial Statement; (3). Proposal on distribution of surplus and recoveryof losses	At the end of every fiscal year, the board shall submit the papers and lists as below before the start of shareholder’s meeting to the shareholders for approval. (1). Business Report; (2). Financial Statement; (3). Proposal on distribution of surplus and recovery of losses
Article 19: If the Company has surpluses in a year, it shall allocate not less than three percent as employee compensation and not higher than three percent as compensation for the directors~~and~~ ~~supervisors.~~If the Company has accumulated loss, it shall preserve in advance to make-up and then allocate the aforementioned proportion as employees' and director~~'/supervisors'~~ compensation. The objects of distribution of the aforementioned stock or cash compensation for the employees should include the employees who control or subordinate the Company and meet certain conditions.	Article 19: If the Company has surpluses in a year, it shall allocate not less than three percent as employee compensation and not higher than three percent as compensation for the directors. If the Company has accumulated loss, it shall preserve in advance to make-up and then allocate the aforementioned proportion as employees' and director's compensation. The objects of distribution of the aforementioned stock or cash compensation for the employees should include the employees who control or subordinate the Company and meet certain conditions.	Same as above.
Article 22: This Articles of Incorporation was composed on Aug. 9, 1986. 1st amendment was made on Jan. 19, 1987. ………… 24th amendment was made on Jun. 14, 2019.	Article 22: This Articles of Incorporation was composed on Aug. 9, 1986. 1st amendment was made on Jan. 19, 1987. ………… 24th amendment was made on Jun. 14, 2019. 25th amendment was made on Jun. 22, 2021.	Add revision date

【 Attachment 9 】

LOTES CO., LTD.

Comparison Table of “Operational Procedures for Acquisition and Disposal of Assets”

Current Article To be Amended Note 2.1.The Company shall establish the 2.1.Procedures for the establishment Some of the procedure for the acquisition and amendment of this subparagraphs are or disposal of assets in operation intended to be amended accordance with the These Procedures shall be approved to conform to the provisions of these by the Board of Directors and then establishment of the Regulations. After the reported to the shareholders' meeting Audit Committee of the procedures have been for approval. In case of amendment, Company. approved by the board of the approval of at least one-half of all directors, they shall be members of the Audit Committee submitted to ~~each supervisor~~ , shall be obtained before the and then to a shareholders' resolution of the Board of Directors meeting for approval; the is submitted. If not approved by more same applies when the than one-half of all Audit Committee procedures are amended. members, two-thirds or more of all ~~If any director expresses dissent and~~ directors shall approve the

~~If any director expresses dissent and it is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to each supervisor.~~

amendment, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors' meeting.

Where the position of independent director has been created, when the procedures for the acquisition and disposal of assets are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. The terms "all audit committee members" in ~~preceeding 2 paragraphs~~ and "all directors" in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

~~Where an audit committee has been established, when the procedures for the acquisition and disposal of assets are adopted or amended they shall be approved by one-half or more of all audit committee members and submitted to the board of directors for a resolution. If approval of one-half or more of all audit committee members as required in the preceding paragraph is not obtained, the procedures may~~

To be Amended

Note

Current Article

~~be implemented if approved by two-thirds or more of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.~~

The terms "all audit committee members" in paragraph ~~5~~ and "all directors" in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

2.2.1. Procedures for acquiring or
2.2.1. Procedures for acquiring or
disposing of real estate and other fixed assets, membership cards and intangible assets
disposing of real estate and other fixed assets, membership cards and intangible assets

2.2.1.1.The acquisition or disposal of 2.2.1.1.The acquisition or disposal of real estate, other fixed assets, real estate, other fixed assets, membership cards and intangible membership cards and intangible assets shall be carried out by the assets shall be carried out by the applicant in accordance with the applicant in accordance with the actual demand situation. The actual demand situation. The applicant shall state the reasons, applicant shall state the reasons, in in conjunction with the relevant conjunction with the relevant units, conducting consultation, units, conducting consultation, comparison, bargaining or comparison, bargaining or tender. tender. The transaction amount The transaction amount of which of which is over ~~NT$50 million~~ is over NT$100 million shall be shall be reported to the Board of reported to the Board of Directors Directors for approval. If the for approval. If the transaction transaction amount is less than amount is less than NT$100 ~~NT$50 million~~ (inclusive), the million (inclusive), the Board of Board of Directors shall Directors shall authorize the authorize the Chairman of the Chairman of the Board to decide Board to decide on the on the transaction. transaction. 2.2.2. Procedures for Acquisition and 2.2.2.Procedures for Acquisition and Disposal of Long- and Short-term Disposal of Long- and Investments in Marketable Short-term Investments in Securities Marketable Securities 2.2.2.1. The purchase and sale of

The Company intends to revise these terms and conditions in accordance with the growth of the scale of operations and the actual needs of the Company.

Current Article To be Amended Note 2.2.2.1. The purchase and sale of long-term and short-term long-term and short-term investments in securities shall investments in securities shall be subject to the approval of be subject to the approval of the Chairman of the Board of the Chairman of the Board of Directors after an appraisal Directors after an appraisal report has been submitted by report has been submitted by the financial unit or the the financial unit or the relevant unit. Each transaction relevant unit. Each amounting to NT$100 million transaction amounting to or more must be approved by ~~NT$30 million~~ or more must the Board of Directors, and the be approved by the Board of Board of Directors shall Directors, and the Board of authorize the Chairman to Directors shall authorize the decide on any transaction Chairman to decide on any amounting to less than NT$100 transaction amounting to less million (inclusive). than ~~NT$30 million~~ (inclusive).

2.3.1.1.The type of price estimate 2.3.1.1.The type of price estimate shall shall be based on the normal be based on the normal price, and price, and in the case of a limited in the case of a limited price or a price or a specific price or a specific price or a special price, it special price, it shall be stated shall be stated whether it complies whether it complies with Article with Article 10 or Article 11 of the 10 or Article 11 of the Technical Technical Specification for Land Specification for Land Valuation. Valuation. If, for special reasons, If, for special reasons, the the transaction price must be based transaction price must be based on a limited price or a specific on a limited price or a specific price or a special price, the price or a special price, the transaction shall be approved by a transaction shall be approved by a resolution of the Board of resolution of the Board of Directors, and reported to the next Directors, ~~notified to the~~ shareholders' meeting; in the event ~~Company's supervisors~~ , and of subsequent changes in the reported to the next shareholders' transaction conditions, the same meeting; in the event of appraisal report shall be made and subsequent changes in the the results of the normal price and transaction conditions, the same the limited price or specific price appraisal report shall be made and shall be evaluated separately, with the results of the normal price and each of the limited or specific the limited price or specific price conditions and whether they are shall be evaluated separately, with currently met. and the reason and

In order to accommodate the establishment of the Audit Committee of the Company, it is proposed to amend this clause. In order to accommodate the establishment of the Audit Committee of the Company, it is proposed to amend this clause.

Current Article To be Amended each of the limited or specific reasonableness of the difference conditions and whether they are from the normal price, and clearly currently met. and the reason and indicate whether the qualified or reasonableness of the difference specified price is sufficient as a from the normal price, and clearly reference for the purchase and sale indicate whether the qualified or price. specified price is sufficient as a reference for the purchase and sale price.

Note

Current Article	To be Amended	Note
each of the limited or specific conditions and whether they are currently met. and the reason and reasonableness of the difference from the normal price, and clearly indicate whether the qualified or specified price is sufficient as a reference for the purchase and saleprice.	reasonableness of the difference from the normal price, and clearly indicate whether the qualified or specified price is sufficient as a reference for the purchase and sale price.
2.4.1.If the Company acquires or disposes of real estate or assets with a related party, or acquires or disposes of assets other than real estate or assets with a related party, and the transaction amount reaches 20% of the Company's paid-in capital, 10% of its total assets, or NT$300 million or more, except for the purchase or sale of domestic bonds, bonds with repurchase or resale conditions, or the purchase or sale of money market funds issued by a domestic securities investment trust, the Company shall submit the following information to the Board of Directors for approval and supervisory approval before signing the transaction contract and making payment. The following information shall be submitted to the board of directors for approval and~~supervisors~~ ~~for~~ ~~acknowledgement~~before the transaction contract is signed and payment is made.	2.4.1. If the Company acquires or disposes of real estate or assets with a related party, or acquires or disposes of assets other than real estate or assets with a related party, and the transaction amount reaches 20% of the Company's paid-in capital, 10% of its total assets, or NT$300 million or more, except for the purchase or sale of domestic bonds, bonds with repurchase or resale conditions, or the purchase or sale of money market funds issued by a domestic securities investment trust, the Company shall submit the following information to the Board of Directors for approval and supervisory approval before signing the transaction contract and making payment. The following information shall be submitted to the board of directors for approval before the transaction contract is signed and payment is made.	In order to accommodate the establishment of the Audit Committee of the Company, it is proposed to amend this clause.
2.4.1.7.	2.4.1.7.	In order to

Current Article

Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 3.2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the ~~supervisors~~ need not be counted toward the transaction amount. With respect to the types of transactions listed below, when to be conducted between the Company and its parent or subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the company's board of directors delegate the board chairman to decide such matters when the transaction is within NT$80 million and have the decisions subsequently submitted to and ratified by the next board of directors meeting:

一、 Acquisition or disposal of equipment or right-of-use assets thereof held for business use.

二、 Acquisition or disposal of real property right-of-use assets held for business use.

To be Amended

Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 3.2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the Audit Committee need not be counted toward the transaction amount. With respect to the types of transactions listed below, when to be conducted between the Company and its parent or subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the company's board of directors delegate the board chairman to decide such matters when the transaction is within NT$80 million and have the decisions subsequently submitted to and ratified by the next board of directors meeting:

一、 Acquisition or disposal of
equipment or right-of-use assets thereof held for business use.
二、 Acquisition or disposal of real property right-of-use assets held for business use.

Note accommodate the establishment of the Audit Committee of the Company, it is proposed to amend this clause.

	Current Article	To be Amended
	Where the position of independent director has been created, when a matter is submitted for discussion by the board of directors pursuant to Article 2.4.1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. ~~Where an audit committee has~~ ~~been established, the matters for~~ ~~which Article 2.4.1 requires~~ ~~recognition by the supervisors~~ ~~shall first be approved by~~ ~~one-half or more of all audit~~ ~~committee members and then~~ ~~submitted to the board of~~ ~~directors for a resolution.~~	Where the position of independent director has been created, when a matter is submitted for discussion by the board of directors pursuant to Article 2.4.1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.
	~~r~~
2.4.3.2.2.~~Supervisors~~shall comply with Article 218 of the Company Act. ~~Where an audit committee has~~ ~~been established in accordance~~ ~~with the provisions of the Act, the~~ ~~preceding part of this~~ ~~subparagraph shall apply mutatis~~ ~~mutandis to the independent~~ ~~director members of the audit~~ ~~committee.~~		2.4.3.2.2Independent Director participating in Audit Committee shall comply with Article 218 of the Company Act.
2.5.12. Internal Audit System The Company shall establish a log book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates,and		2.5.13. Internal Audit System The Company shall establish a log book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates,andpriodic

Current Article

Note

To be Amended

priodic evaluation of trading sites, compliance of trading performance with the Company's business strategy and risk tolerance and risk management measures shall be recorded in detail in the log book.

The Company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, all ~~supervisors~~ shall be notified in writing.

evaluation of trading sites, compliance of trading performance with the Company's business strategy and risk tolerance and risk management measures shall be recorded in detail in the log book. The Company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, Audit Committee shall be notified in writing.

~~Where independent directors have been appointed, for matters for which notice shall be given to the supervisors under the preceding paragraph, written notice shall also be given to the independent directors.Where an audit committee has been established in accordance with the provisions of the Act, the provisions of paragraph 2 relating to supervisors shall apply mutatis mutandis to the audit committee.~~

【 Attachment 10 】

LOTES CO., LTD.

Comparison Table of “Operational Procedures for Loaning Funds to Others and Endorsements and Guarantees” before and after Amendments

Before

1.4.

After passage by the board of directors, ~~submit the Procedures to each supervisor and s~~ ubmit them for approval by the shareholders’ meetin ~~g; where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinion to each supervisor and for discussion by the shareholders’ meeting.~~ The same shall apply to any amendments to the Procedures. Where the Company has appointed independent directors, when it submits its Operational Procedures for discussion by the board of directors under the preceding paragraph, the board of directors shall take into full consideration each independent director’s opinion. If an independent director expresses any dissent or reservation, it shall be noted in the minutes of the board of directors meeting.

~~Where the Company has established an audit committee, when it adopts or amends its Operational Procedures for Loaning Funds to Others, the procedures or amended procedures shall require the approval of one-half or more of all audit committee members, and furthermore shall be submitted for a resolution by the board of directors, and the provisions of paragraph 2 shall not apply. If the approval of one-half or more of all audit committee members as required in the preceding paragraph is not obtained, the Operational Procedures may be implemented if approved by two-thirds or more of~~

After

1.4.

After passage by the board of directors, these procedures shall be ~~sent to each supervisor and~~ submitted to the shareholders’ meeting for approval before implementation; amendments shall be approved by at least one-half of all members of the audit committee before submission to the board of directors for resolution. If the approval of one-half or more of all audit committee members as required in the preceding paragraph is not obtained, the Operational Procedures may be implemented if approved by two-thirds or more of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. Where the Company has appointed independent directors, when it submits its Operational Procedures for discussion by the board of directors under the preceding paragraph, the board of directors shall take into full consideration each independent director’s opinion. If an independent director expresses any dissent or reservation, it shall be noted in the minutes of the board of directors meeting.

The terms “all audit committee members” and “all directors” in the preceding paragraphs shall be counted as the actual number of persons currently holding those positions.

Description Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

After

Before

Description

~~all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.~~ The terms “all audit committee members” in paragraph 3 and “all directors” in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

1.6.

The Company shall prepare a The Company shall prepare a memorandum book for its memorandum book for its fund-loaning and fund-loaning and endorsements/guarantees activities endorsements/guarantees activities and truthfully record the following and truthfully record the following information: borrower, amount, information: borrower, amount, date of approval by the board of date of approval by the board of directors, loaning/borrowing date, directors, loaning/borrowing date, and matters to be carefully and matters to be carefully evaluated under paragraph 1 of the evaluated under paragraph 1 of the preceding Article. preceding Article. The Company’s internal auditors The Company’s internal auditors shall audit the Operational shall audit the Operational Procedures for Loaning Funds to Procedures for Loaning Funds to Others and Endorsements and Others and Endorsements and Guarantees and the implementation Guarantees and the implementation thereof no less frequently than thereof no less frequently than quarterly and prepare written quarterly and prepare written records accordingly. They shall records accordingly. They shall promptly notify all the supervisors promptly notify the Audit and independent directors in Committee and independent writing of any material violation directors in writing of any material found. violation found. ~~If the Company has established an audit committee in accordance with the regulations, the provisions of the second paragraph of this Article regarding the supervisor shall apply to the Audit Committee.~~

2.3. Some of the Change in circumstances Change in circumstances subparagraphs are If, as a result of a change in If, as a result of a change in intended to be amended circumstances, an entity for which circumstances, an entity for which to conform to the an endorsement/guarantee is made an endorsement/guarantee is made establishment of the does not meet the requirements of does not meet the requirements of Audit Committee of the these Regulations or the loan these Regulations or the loan Company. balance exceeds the limit, the balance exceeds the limit, the Company shall adopt rectification Company shall adopt rectification plans and submit the rectification plans and submit the rectification plans to ~~all the supervisors and~~ plans to the Audit Committee, and

2.3.

Before After Description ~~independent directors,~~ and shall shall complete the rectification complete the rectification according to the timeframe set out according to the timeframe set out in the plan. in the plan. ~~If the Company has established an Audit Committee in accordance with the regulations, the provisions of the first paragraph of this Article regarding the supervisors shall apply to the Audit Committee.~~ 2.14.3. Some of the The Company’s internal auditors The Company’s internal auditors subparagraphs are shall audit the “Operational shall audit the “Operational intended to be amended Procedures for Loaning Funds to Procedures for Loaning Funds to to conform to the Others” and the implementation Others” and the implementation establishment of the thereof no less frequently than thereof no less frequently than Audit Committee of the quarterly and prepare written quarterly and prepare written Company. records accordingly. They shall records accordingly. They shall promptly notify all the auditing promptly notify all the auditing units in writing of any material units in writing of any material violation found. violation found, and the Company’s auditing unit shall send written information to the Audit Committee.

2.14.3.

2.14.4.

The Company’s auditors shall, in accordance with the annual audit plan, conduct audits at the subsidiaries to understand the execution of the subsidiaries’ capital loaning operations, and if any deficiencies are found, shall continue to track the improvement situation and make a tracking report to the Audit Committee. Some of the Changes of condition subparagraphs are Where as a result of changes of intended to be amended condition the entity for which an to conform to the endorsement/guarantee is made no establishment of the longer meets the requirements of Audit Committee of the these Regulations, or the amount of Company. endorsement/guarantee exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the Audit Committee, and shall complete the rectification according to the timeframe set out in the plan.

3.4. Changes of condition

Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of these Regulations, or the amount of endorsement/guarantee exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to ~~all the supervisors and independent directors,~~ and shall complete the rectification according to the timeframe set out in the plan. ~~If the Company has established an~~

After

Description

Before

~~Audit Committee, the provisions of the first paragraph of this Article regarding the supervisors shall apply to the Audit Committee.~~ 3.12.3.

The Company’s internal auditors shall audit the “Operational Procedures for Endorsements and Guarantees” and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the auditing units in writing of any material violation found.

3.12.4.

3.12.3.

3.12.4.

Some of the subparagraphs are intended to be amended to conform to the establishment of the Audit Committee of the Company.

When the Company’s auditors When the Company’s auditors conduct audits at subsidiaries in conduct audits at subsidiaries in accordance with the annual audit accordance with the annual audit plan, they should also understand plan, they should also understand the implementation of the the implementation of the operating procedures of the operating procedures of the subsidiaries’ endorsements and subsidiaries’ endorsements and guarantees for others, and if any guarantees for others, and if any deficiencies are found, they shall deficiencies are found, they shall continue to follow up on their continue to follow up on their improvement and make a improvement and make a follow-up report to the ~~supervisors.~~ follow-up report to the Audit Committee.

【 Attachment 11 】

LOTES CO., LTD. Comparison Table of “Procedures for Election of Directors” before and after Amendments

	Amendments
Before	After	Description
Procedures for Election of Directors ~~and Supervisors~~	Procedures for Election of Directors	The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted.
Article 1 To ensure a just, fair, and open election of directors~~and supervisors~~, these Procedures are adopted pursuant to the “Securities and Exchange Act” amd “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”.	Article 1 To ensure a just, fair, and open election of directors, these Procedures are adopted pursuant to the “Securities and Exchange Act” amd “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”.	Same as above.
Article 2 Except as otherwise provided by law and regulation or by the Company’s articles of incorporation, elections of directors~~and supervisors~~shall be conducted in accordance with these Procedures.	Article 2 Except as otherwise provided by law and regulation or by the Company’s articles of incorporation, elections of directors and supervisors shall be conducted in accordance with these Procedures.	Same as above.
Article 3 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: 1. The ability to make judgments about operations. 2. Accounting and financial analysis ability. 3. Business management ability. 4. Crisis management ability. 5. Knowledge of the industry. 6. An international market perspective. 7. Leadership ability. 8. Decision-making ability. ~~In addition to the requirements of the~~ ~~preceding paragraph, at least one~~ ~~among the board member of the~~	Article 3 The overall composition of the board of directors shall be taken into consideration in the selection of the Company’s directors.The composition of the board of directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the company’s business operations, operating dynamics, and development needs. It is advisable that the policy include, without being limited to, the following two general standards: 1. Basic requirements and values: Gender, age, nationality, and culture. 2. Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, and technology), professional skills, and industry experience.	Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.
	1.
	2.

Before	After	Description
~~Company must be an accounting or~~ ~~finance professional.~~	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: 1. The ability to make judgments about operations. 2. Accounting and financial analysis ability. 3. Business management ability. 4. Crisis management ability. 5. Knowledge of the industry. 6. An international market perspective. 7. Leadership ability. 8. Decision-making ability. More than half of the directors shall be persons who have neither a spousal relationship nor a relationship within the second degree of kinship with any other director.
Article 4 ~~Supervisors of the Company shall meet~~ ~~the following qualifications:~~ ~~1. Integrity and a practical attitude.~~ ~~2. Impartial judgment.~~ ~~3. Professional knowledge.~~ ~~4. Broad experience.~~ ~~5. Ability to read financial statements.~~ ~~In addition to the requirements of the~~ ~~preceding paragraph, at least one~~ ~~among the supervisors of the Company~~ ~~must be an accounting or finance~~ ~~professional.~~	Article 4 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”. 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”.	The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted. Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.
~~Article 4-1~~ ~~More than half of the directors and at~~ ~~least one supervisor position must be~~ ~~held by a person having neither one of~~ ~~the following relationships:~~ ~~1. a spousal relationship~~ ~~2. a relationship within the second~~ ~~degree of kinship~~	(Deleted)	The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted.
~~1~~
~~.~~ ~~2~~
~~.~~
~~Article 4-2~~ ~~When the original selectees of directors~~	(Deleted)	The audit committee is established in

Before	Before	After	Description
~~and supervisors do not meet the~~ ~~conditions of the preceding Article,~~ ~~determination of which directors or~~ ~~supervisors are elected shall be made~~ ~~according to the following provisions:~~ ~~1. When there are some among the~~ ~~directors who do not meet the~~ ~~conditions, the election of the~~ ~~director receiving the lowest~~ ~~number of votes among those not~~ ~~meeting the conditions shall be~~ ~~deemed invalid.~~ ~~2. When there are some among the~~ ~~supervisors who do not meet the~~ ~~conditions, the provisions of the~~ ~~preceding subparagraph shall apply~~ ~~mutatis mutandis.~~ ~~3. When there are some among the~~ ~~directors and supervisors who do~~ ~~not meet the conditions, the election~~ ~~of the supervisor receiving the~~ ~~lowest number of votes among~~ ~~those not meeting the conditions~~ ~~shall be deemed invalid.~~			accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted.
~~.~~ ~~2~~
~~.~~ ~~3~~
~~.~~
	~~ose no meeng e co~~ ~~hll b dd ilid~~
	~~sa e eeme nva.~~
Article 5 Elections of both directors~~and~~ ~~supervisors~~at the Company shall be conducted in accordance with the candidate nomination system and procedures set out in Article 192-1 of the Company Act. ~~The qualifications for the~~ ~~independent directors of the~~ ~~Company shall comply with relevant~~ ~~laws and regulations.~~		Article 5 Elections of both directors at the Company shall be conducted in accordance with the candidate nomination 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	The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted. Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.

Before	After	Description
	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.
Article 6 The cumulative voting method shall be used for election of the directors~~and~~ ~~supervisors~~at the Company. Each share will have voting rights in number equal to the director~~s or supervisors~~to be elected, and may be cast for a single candidate or split among multiple candidates. ~~Independent directors and~~ ~~non-independent directors shall be~~ ~~elected together and the number of~~ ~~elected seats shall be calculated~~ ~~separately.~~	Article 6 The cumulative voting method shall be used for election of the directors at the Company. 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.	The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted. Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.
Article 7 The~~board of directors~~shall prepare ballots. 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.	Article 7 Theperson with the right to convene shall prepare separate ballotsfor directors in numbers corresponding to the directors 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 votingshareholders.	Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.
Article 8 The number of directors~~and~~ ~~supervisors~~will be as specified in the Company’s articles of incorporation. 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.	Article 8 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,	The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted. Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently

Before	After	Description
	with the chair drawing lots on behalf of any person not in attendance.	announced by the TWSE.
Article 9 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 votingcommences.	Article 9 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 theperson with the right to conveneand publicly checked by the vote monitoring personnel before votingcommences.	Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.
~~Article 10~~ ~~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. 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~~ ~~paper, 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.~~	(Deleted)	Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.
Article 11 A ballot is invalid under any of the following circumstances: 1. The ballot was not prepared by the ~~board of directors.~~ 2. A blank ballot is placed in the ballot box. 3. The writing is unclear and indecipherable or has been altered. 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~~	Article 10 A ballot is invalid under any of the following circumstances: 1. The ballot was not prepared bya person with the right to convene. 2. A blank ballot is placed in the ballot box. 3. The writing is unclear and indecipherable or has been altered. 4. The candidate whose name is entered in the ballot does not conform to the director candidate list. 5. Other words or marks are entered in addition to the number of voting rights allotted.	With the deletion of Article 10, adjust the number of the Article. Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.

	Before	After	Description
5. ~~6~~	~~name is entered in the ballot is a~~ ~~non-shareholder, a~~nd a cross-check shows that the candidate’s name and identity card number do not match. Other words or marks are entered in addition to the~~candidate’s account~~ ~~name or shareholder account~~ ~~number (or identity card number)~~ ~~and the number of v~~oting rights allotted. ~~The name of the candidate entered~~ ~~in the ballot is identical to that of~~ ~~another shareholder, but no~~ ~~shareholder account number or~~ ~~identity card number is provided in~~ ~~the ballot to identify such~~ ~~individual.~~
~~.~~
Article 12 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~~or~~ ~~supervisors~~and the numbers of votes with which they were elected, shall be announced by the chair on the site.		Article 11 The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation,includingthe list of persons elected as directorsand the numbers of votes with which they were elected,shall be announced by the chair on the site. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.	With the deletion of Article 10, adjust the number of the Article. The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted. Amendments were made in accordance with the “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” currently announced by the TWSE.
~~Article 13~~ The board of directors of the Company shall issue notifications to the persons elected as directors~~or~~ ~~supervisors~~.		Article 12 The board of directors of the Company shall issue notifications to the persons elected as directors.	With the deletion of Article 10, adjust the number of the Article. The audit committee is established in accordance with Article 14-4 of the Securities and Exchange Act, and the content related to the supervisors is hereby deleted.
~~Article 14~~		Article 13	With the deletion of

Before	After	Description
These Procedures, and any amendments hereto, shall be implemented after approval by a shareholders meeting.	These Procedures, and any amendments hereto, shall be implemented after approval by a shareholders meeting.	Article 10, adjust the number of the Article.

`【` Attachment 12 `】`

Rules Governing the Scope of Powers of Supervisors

Purposes of adoption of these Rules
To ensure the normal business operation of this Company and to develop an effective, comprehensive, and robust supervisory system for the supervisors, allowing supervisors to fulfill their functions, and for the purpose of strengthening this Company's internal monitoring mechanisms and ensuring sound corporate governance, in order to fulfill the responsibility for safeguarding the rights and interests of this Company and all of its shareholders, these Rules are adopted pursuant to the provisions of Chapter IV of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.
Scope of application for these Rules
Except as otherwise provided by law or regulation or by the articles of incorporation, the powers and duties of the supervisors of this Company and the matters to be carried out by this Company when the supervisors exercise their powers shall be as set forth in these Rules.
Scope of duties
The supervisors shall faithfully perform their duties and fulfill the obligation to exercise the due care of a good administrator. They shall maintain a high degree of self-discipline and adopt a prudential attitude in supervising the business and financial conditions of this Company, in order to safeguard the rights and interests of this Company and its shareholders.

If in the course of their duties a supervisor violates a law, regulation, or the articles of incorporation, or if a supervisor neglects his or her supervisory duties, thereby causing damage to this Company, the supervisor shall be legally held liable to this Company for damages.

Exercise of supervisory powers
A supervisor shall be familiar with the relevant laws and regulations, shall understand the rights, obligations, and duties of the directors of this Company and the respective functions, duties, and operations of each department. Supervisors shall attend meetings of the board of directors to oversee its operation and to state their opinions when appropriate so as to control or discover any irregularity as early as possible.
In the exercise of supervisory powers by each respective supervisor, a supervisor that deems it necessary may convene a meeting, in consideration the overall interest of this Company and the shareholders, to exchange opinions with other supervisors, provided that in so doing the independent exercise of powers by other supervisors is not obstructed.
Supervision of business operations, the management team, and the internal control system of this

Company

The supervisors shall monitor the business operations of this Company, examine its financial and business conditions from time to time, and review its books and records. They may request reports to be presented by the board of directors or any of the managerial officers in order to understand the status of performance of their respective duties, and shall attend to the effectiveness and implementation of the internal control system so as to reduce the financial and operational risks of this Company.
Notification of meetings of the board of directors When a meeting of the board of directors is held, each supervisor shall be notified of the meeting in accordance with the provisions of the Regulations Governing Procedure for Board of Directors Meetings of Public Companies, and the meeting notice and sufficient meeting materials shall be delivered to all supervisors.

7. Recusal

The supervisors shall maintain a high degree of self-discipline; when a proposal put forward at a meeting bears on the personal interest of a supervisor, and such relationship is likely to prejudice the interest of this Company, the supervisor shall enter into recusal.

Limiting violations of law by the board or a director in the course of duties
Upon discovering any violation of a law or regulation, the articles of incorporation, or a shareholders meeting resolution by the board of directors or by a director in the course of their duties, a supervisor shall immediately notify the board of directors or the director to cease such conduct.
Reviewing the books and records of this Company
The supervisors shall thoroughly review and issue a report on the various books and records (including business reports, financial statements, proposals for distribution of earnings or for covering of losses) compiled by the board of directors and presented at shareholders meetings, and shall state their opinion at the shareholder meeting.
Review of the business and finances of this Company
A supervisor may at any time investigate the financial and business conditions of this Company, and the relevant departments in this Company shall provide the books and documents that may be required by the investigation.

When reviewing the financial or business conditions of this Company, a supervisor may retain attorneys or accountants on behalf of this Company to perform the review, provided that they shall inform the relevant persons of their confidentiality obligations.

The board of directors or managerial officers shall submit reports at the request of a supervisor and may not for any reason obstruct, evade, or refuse the inspections of the supervisors. When a supervisor performs his or her duties, this Company shall provide the necessary assistance in accordance with the needs of the supervisor, and any reasonable expenses required for such assistance shall be borne by this Company.

Communication channels with relevant personnel in this Company
The supervisors shall conduct periodic discussions with the internal auditors regarding their examination of deficiencies in the internal control system, and shall make a record of the discussions. This Company shall establish a channel for communication between its employees, shareholders, and interested parties and the supervisors in order to facilitate the supervisory duties of the supervisors. Upon discovering any misconduct, a supervisor shall take timely measures to curb its expansion, and if necessary shall file a report with the competent authority or relevant regulatory agencies. If any of a TSWE or GTSM listed company's independent directors, general managers, heads of finance, accounting, research and development, or internal audit departments, or CPAs resigns or is removed from their position, the supervisors shall closely investigate the reasons and make necessary recommendations or take necessary measures.
Liability insurance for supervisors
It is advisable that this Company, in accordance with the articles of incorporation or the resolution of a shareholders meeting, take out liability insurance for the supervisors with respect to liabilities resulting from the performance of duties during their terms of office, so as to reduce and spread the risk of material damage to the rights and interests of this Company and the shareholders as a result of error or negligence on the part of a supervisor.
Continuing education for supervisors
Upon becoming a supervisor and throughout their term in that position, a supervisor is advised to participate in training courses covering subjects related to corporate governance, such as finance, risk management, business, commerce, accounting, law, or corporate social responsibility, offered by the institutions designated in the Directions for the Implementation of Continuing Education for

Directors and Supervisors of TWSE Listed and GTSM Listed Companies.

These Rules, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

`【` Attachment 13 `】`

Candidates of Directors and Independent Directors

Candidate Type	Name	Education	Experience	Number of Shares Held by the Person by the Book Closure Date	Has the Person Been an Independent Director of the Company Continuously for 3 Terms/Reason
Director	CHIA-MING Investment Co., Ltd. Representative: Chu, Te-Hsiang	Department of Mechenical Engineering, Taishan Industrial High School	Chairperson of CHIA-MING Investment Co., Ltd. Supervisor of CHIN-LIN Investment Co., Ltd. Chairperson of LOTES INVESTMENT LTD. Chairperson of Lotes Suzhou Co., Ltd. Vice Chairperson of Lotes Guangzhou Co., Ltd. CHIA-YU Investment Co., Ltd. Chairperson of Ememe Robot Co., Ltd. Chairperson of Lintes Technology Co., Ltd. Chairperson of CHIA-CHUN Investment Co., Ltd. Juristic Person Director Representative of Radinet Communications Inc. Chairperson of TE-CHUANG Investment Co., Ltd. Chairperson of Compertum Microsystems Inc. Chairperson of Lerain Technology Co., Ltd. Chairperson of Good News Merdical Co., Ltd. Chairperson of Mikronpoint Co., Ltd.	9,797,037	N/A
Director	CHIA-MING Investment Co., Ltd. Representative: Ho, Te-Yu	Chung-Pu Junior High School Department of Molding, Northern Region Vocational Training Bureau	Chairperson of CHIN-LIN Investment Co., Ltd. Chairperson of TUN-LIN Investment Co., Ltd. Director of LOTES INVESTMENT LTD. Chairperson of Lotes Guangzhou Co., Ltd. Chairperson of Guangzhou Dezhi Precise Electronic Industry Co., Ltd. Director of TSUNG-KA Co., Ltd. Vice Chairperson of Lotes Suzhou Co., Ltd. Chairperson of Lotes Hengnan Co.,	9,797,037	N/A

			Ltd. Chairperson of Hengnan Dezhi Precise Electronic Industry Co., Ltd. Director of Lintes Technology Co., Ltd. Director of CHIA-YU Investment Co., Ltd. Director of Zhongshan Deyi Electronics Co., Ltd. Director of Compertum Microsystems Inc. Supervisor of Good News Merdical Co., Ltd. Director of Mikronpoint Co.,Ltd.
Director	Hsieh, Chia-Ying	Graduate Institute of Business Administration, National Taiwan University	Special Assistant of President, Realtek Semiconductor Corp. Vice President of TUNG-HSIN-CHIA Management Consulting Co., Ltd. Vice President of LIAN-CHIA International Management Consulting Co.,Ltd.	N/A
Director	Chiu, Jiann Jong	PhD, Department of Electrical Engineering, National Taiwan University	Investment Committee Member of Mega Venture Capital Investment Co., Ltd. Adjunct Associate Professor of the Department of Electronic and Computer Engineering, National Taiwan University of Science and Technology Member of the Review Committee for Listed Companies, TWSE Adjunct Teacher in Practice, Department of Business Administration, National Taiwan University Senior Application Engineer, Texas Instruments Taiwan Ltd. Adjunct Chair Professor, School of Professional Education and Continuing Studies, National Taiwan University	N/A
Independent Director	Wang, Jen-Chun	Doctor of Law, University of Pennsylvania	Law Clerk, Department of Clerks for the Justices of the ConstitutionalCourt, Judicial Yuan	None
Independent Director	Chiang, Yih-Cherng	Doctor of Mechanical Engineering, University of Delaware	Professor and Department Director, Chinese Culture University Associate Professor, Chinese Culture University Assistant Professor, Chinese Culture University Project Manager, Taiwan High Speed Rail Corp. Senior Engineer, TAIWAN AEROSPACECORPORATION	None

	Independent Director	Wu, Chang Hsiu	Master of Business Administration, Drexel University	CPA Partner, DING SHUO CERTIFIED PUBLIC ACCOUNTANTS Clerk, Public Service Pension Fund Management Board Revenue Officer, National Taxation Bureau of the Southern Area, MOF Deputy Group Leader, Deloitte Taiwan	0	None

`【` Appendix 1 `】`

Lotes Co., Ltd. Articles of Incorporation (Before Amendment)

Chapter 1: General Principle

Article 1: In accordance with the Company Act, the Company is registered as LOTES CO., LTD. Article 2: The business scope of the Company is stated as follows:

Manufacturing, processing and trading of various hardware parts and tool parts.
Manufacturing, processing and trading of terminals and their finished products.
Manufacture, processing and trading of circuit boards for electrical appliances.
Import and export business in respect of the preceding item.
Conducting tender quotations and distribution for domestic and foreign manufacturers' products in connection with said business
CC01030 Electric Appliance and Audiovisual Electric Products Manufacturing.
CC01080 Electronic Parts and Components Manufacturing
CC01110 Computers and Computing Peripheral Equipment Manufacturing 9. CC01990 Electrical Machinery, Supplies Manufacturing
CF01011 Medical Materials and Equipment Manufacturing
CQ01010 Die Manufacturing
CZ99990 Other Industrial Products Manufacturing Not Elsewhere Classified
F106030 Wholesale of Die
F108031 Wholesale of Drugs, Medical Goods
F113020 Wholesale of Household Appliance
F113030 Wholesale of Precision Instruments
F113050 Wholesale of Computing and Business Machinery Equipment
F113070 Wholesale of Telecom Instruments
F401010 International Trade
CI01010 Rope, Cable and Net Manufacturing
ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval
Article 3: Headquarter of the Company is located at Keelung City and when necessary could set up a subsidiary company inside or outside of the country, with the approval by the Board of Directors.
Article 4: The Company may make investments in other companies as it deems necessary for its business and may, by resolution of the Board of Directors, become a limited liability shareholder of such company. The total amount of which is not limited to the amount of such investments as provided in Article 13 of the Company Law.
Article 5: The company may provide external endorsement and guarantee for business purposes.

Chapter 2 Shares

Article 6: The Company's total capital is set at NT$15.5 billion, divided into 155 million shares. The amount of each share is NT$10 per share, of which the Board of Directors is authorized to issue the unissued shares in tranches; the issue price per share shall be determined by the Board of Directors in accordance with relevant laws and regulations.

The total amount of the former capital is reserved for the issuance of Employee stock options warrants in the amount of NT$5 million, which are subject to the Board's resolution.

Translated with www.DeepL.com/Translator (free version)Article 6-1: If the Company intends to repurchase the Company’s shares and transfer the shares at a price lower than the average repurchased price, it shall follow the relevant regulations and proceed to such transfer after the resolution of the most recent shareholders' meeting.
Article 6-2: If the Company intends to issue stock warrants for employees at a subscription price lower than the market price, it shall follow the relevant regulations and proceed to such transfer after the resolution

of the most recent shareholders' meeting.

Article 6-3: If the Company purchases the treasury stock in accordance with the Company Act, the object of the transfer should include the employees who control or subordinate the Company and meet certain conditions.
The object of distribution of the stock warrants for employees should include the employees who control or subordinate the Company and meet certain conditions.
When the company issues new shares, employees who control or subordinate the Company and meet certain conditions should be included for the subscription.
The object of the new restricted employee shares issued by the Company should include the employees who control or subordinate the Company and meet certain conditions.
Article 7: The Company's shares are inscribed shares. The serial number should be signed or stamped by the directors who represent the Company. The shares shall be signed by the bank that acts as the share issuer according to the laws. When the Company issues new shares, the free-print share is adopted to issue shares, the same for other marketable securities. However, it shall contact the centralized securities depository enterprises for registration.
Article 8: The change of shareholders' list shall be made no later than 60 days prior to the ordinary meeting of shareholders, no later than 30 days prior to the provisional meeting of shareholders, or no later than 5 days prior to the basis date of the Company's resolution to distribute dividends and bonuses or other benefits.
Article 8-1: The Company's share transactions are conducted in accordance with the "Guidelines Governing the Disposal of Shares of Public Companies" issued by the competent authorities.

Chapter 3: Shareholder’s Meeting

Article 9: There shall be two kinds of general meetings, ordinary and interim, which shall be convened once a year, within six months after the end of each fiscal year, as required by law, and shall be notified to each shareholder by thirty days in advance; interim meetings shall be convened as required by law, and shall be notified to each shareholder by fifteen days in advance.
The preceding notice shall state the date, place and cause of the meeting. The shareholders' meeting shall be convened by the Board of Directors, unless otherwise provided by the Act. Notice of the convening of a general meeting may be given in writing or by electronic means with the consent of the shareholders.
Article 10: In the event that a shareholder is unable to attend the general meeting for any reason, he/she may appoint a proxy to attend the meeting by issuing a letter of proxy issued by the Company specifying the scope of the authority. In addition to the provisions of Article 177 of the Company Law, the rules for the use of proxies to attend shareholders' meetings of public companies shall be in accordance with the "Rules for the Use of Proxy Forms by Public Companies" issued by the competent authorities.
Article 11: Each share is entitled one voting right. However, those restricted or those deemed by Article 179 of the Company Act to have voting rights are not within this restriction.
Article 12: Unless otherwise regulated by the relevant laws and regulations, shareholders representing more than half of the total number of issued shares should attend in person or by proxy in the shareholder meetings. Resolutions should be approved by more than half of the attended shareholders.
Article 12-1: The board shall convene the shareholder meeting and the Chairperson of the board shall be the chairperson of the meeting. In the event of the Chairperson's absence, the Chairperson shall assign a director as its proxy. If the assignment is not made, the directors shall choose one. If the meeting is convened by other conveners not belonging to the Board, the convener shall be the chairperson of the meeting. If there is more than one convener, the conveners should decide and one of them should be the chairperson.
Article 12-2: The resolutions of the shareholders' meeting shall be published in minutes and shall be dealt with in accordance with Article 183 of the Company Law.
Article 12-3: If the Company wishes to cancel the public offering of its shares in the future, it must be

submitted to the shareholders' meeting for discussion and resolution.

Chapter 4: Directors and Supervisors

Article 13: The Company has five to nine directors and two to four supervisors, all of whom are appointed for a term of three years and all the seats are entitled to be re-elected.
For the aforementioned number of directors of this Company, the number of independent directors should not be less than two persons and should not be less than one-fifth of the total numbers of directors. In terms of the professional qualifications, shareholding, and part-time restrictions, independence determination, nomination and selection methods, and other compliance matters, the regulations of the competent security authorities must be followed.
The nomination system is adopted for the election of the directors and supervisors in this Company. The shareholders must elect from the candidate list of directors and supervisors.
The regulations of the competent security authorities must be followed in terms of the total shareholding ratio of all its directors and supervisors.
Article 13-1: The meeting of the Board of Directors shall be convened in accordance with Article 204 of the Company Act.
Article 13-2: In the event that the seats of one-third of the Directors are vacant or all the Supervisors are dismissed, the Board of Directors shall convene an interim election within 60 days and the term of office shall be limited to the period for which the original seats were filled.
Article 13-3: The Directors and Supervisors of the Company shall be notified of the convening of the Board of Directors seven days in advance and the Company may convene the Board of Directors at any time in case of emergency. The Board of Directors of the Company may be convened in writing, by e-mail or by fax.
Article 14: The board shall be composed of the directors. The chairman of the board shall be elected from the directors with the agreement of over half of the directors attending the meeting, and the attendance rate should be no less than 2/3. Chairperson represents the Company externally.
Article 15: If the chairman cannot performance his/her duty due to certain reason, the assignment of his/her deputy shall be conducted in accordance with the regulations of Company Law, Art. 208.
Article 15-1: When a meeting of the Board of Directors is held by video conference, a director who participates in the meeting by video shall be deemed to be present in person; if a director is unable to attend in person for any reason, he may appoint another director to attend by proxy, and his proxy shall be in accordance with Article 205 of the Company Law.
Article 15-2: A resolution of the Board of Directors shall, unless otherwise provided in the Companies Act, be passed by a majority of the Directors present and agreed to by a majority of the Directors present.
Article 15-3: Supervisors may exercise their powers according to laws and regulations and may attend the board meeting without voting right.
Article 15-4: All directors and supervisors of the company must be insured with the corresponding liability insurance during the term of office based on their business scope with the purpose to reduce and diversity the loss risks of the directors and supervisors of the Company, the Company, and the shareholders. In terms of the liability insurance of the directors and supervisors, the Board is authorized to take in charge of it.
Article 16: When the directors and supervisors of the Company are executing operations of the Company, the Company must pay their compensation regardless of the Company’s financial status, with surplus or loss. The compensation is based on the level of participation and contribution to the company’s operations, and the Board is authorized to consult the industry ’s usual standards, not exceeding the standard of the highest salary scale set by the Company’s salary assessment method. If the company has surpluses, the compensation shall be distributed in accordance with the provisions of Article 19.

Chapter 5: Manager

Article 17: The Company shall employ managers to conduct business operations. The appointment and dismissal as well as the salary policies shall be made in accordance with the Company Law Art.29.

Chapter 6: Accounting

Article 18: At the end of every fiscal year, the board shall submit the papers and lists as below before the start of shareholder’s meeting to the shareholders for approval.
(1). Business Report (2). Financial Statement (3). Proposal on distribution of surplus and recovery of losses
Article 19: If the Company has surpluses in a year, it shall allocate not less than three percent as employee compensation and not higher than three percent as compensation for the directors and supervisors. If the Company has accumulated loss, it shall preserve in advance to make-up and then allocate the aforementioned proportion as employees' and director'/supervisors' compensation. The objects of distribution of the aforementioned stock or cash compensation for the employees should include the employees who control or subordinate the Company and meet certain conditions.
Article 19-1: If the Company has a surplus after the annual accounts, it should first complete the tax payment, make up for the previous year's losses, and deposit 10% of the statutory surplus reserve unless it has reached to the total capital. It should allocate or reserve into special surplus reserve according to the laws and regulations. If there are still surpluses, it shall be merged with the accumulated undistributed surplus. The Board shall draft a surplus allocation plan and propose to the shareholder meeting for a final resolution of distribution. The shareholder dividends distributed shall not be less than 20% of the net after-tax net profit of this year after deducting the surplus reserve provided according to law. The dividends distributed to the shareholders shall not be less than 20% of the annual net profit after tax of this year after deducting the surplus reserve allocation according to the laws and regulations.
The Company shall take the surrounding environment and growth stage of the Company, as well as the future business expansion, into consideration so that the future expenditure budget and capital needs shall be considered in the distribution of surplus. Among the dividends distributed in the current year, not less than 10% of cash dividends shall be offered.

Chapter 7: Supplementary

Article 20: The Articles of Association and the Bye-Laws of the Company shall be prescribed by the Board of Directors separately.
Article 21: Matters not listed in this article of incorporation is to be processed according to the Company Act and other relevant regulations.
Article 22: This Articles of Incorporation was composed on Aug.9, 1986.
1st amendment was made on Jan.19,1987.
2nd amendment was made on Nov.20,1987.
3rd amendment was made on Dec.29,1987.
4th amendment was made on Jan.30,1993.
5th amendment was made on May 21,1983.
6th amendment was made on Aug.2.1998.
7th amendment was made on Aug.9,2004.
8th amendment was made on Aug.25, 2004.
9th amendment was made on Oct.8, 2004.
10th amendment was made on Nov.8, 2004.
11th amendment was made on Jun.24,2005.
12th amendment was made on May 3,2006.
13th amendment was made on Jun.29,2006.
14th amendment was made on Dc.15,2006.
15th amendment was made on May 31,2007.
16th amendment was made on Jun.13,2008.
17th amendment was made on Jun.10,2009.

18th amendment was made on Jum.14,2010 19th amendment was made on Jun.10,2011. 20th amendment was made on Jun. 20,2012. 21st amendment was made onJun.10, 2014. 22nd amendment was made on Jun.6,2016. 23rd amendment was made on Jun.14,2017. 24th amendment was made on Jun.14,2019.

Lotes Co., Ltd.

Chairperson: CHU, TE-HSIANG

`【` Appendix 2 `】`

LOTES CO., LTD.

Rules of Procedure for Shareholders Meetings (before Amendment)

Article 1

To establish a strong governance system and sound supervisory capabilities for the Company’s shareholders meetings, and to strengthen management capabilities, these Rules are adopted pursuant to Article 5 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.

Article 2

The rules of procedures for the Company’s shareholders meetings, except as otherwise provided by law, regulation, or the articles of incorporation, shall be as provided in these Rules.

Article 3

Unless otherwise provided by law or regulation, the Company’s shareholders meetings shall be convened by the board of directors.

The convening of an annual shareholders’ meeting shall be notified to each shareholder within 30 days prior to the date of the notice. For shareholders holding less than one thousand registered shares, the notice may be sent to the Market Observation Post System (MOPS) within 30 days ago. The convening of an extraordinary shareholders’ meeting shall be sent to all shareholders within 15 days of the date. For shareholders holding less than one thousand registered shares, the notice may be sent to the MOPS within 15 days of the date.

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.

Election or dismissal of directors or supervisors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a 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 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 motione; the main content of the notice may be placed on the website designated by the securities authority or the Company, and the website address shall be included in the notice.

Where re-election of all directors and supervisors 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.

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. However, the board of directors may include proposals made by a shareholder for urging the Company to promote public interests or fulfill its social responsibilities.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.

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.

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.

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.

Article 4

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. 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 before 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.

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.

Article 5

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.

Article 6

The Company shall furnish the attending shareholders and their proxies (collectively, as “shareholders”) with an attendance book to sign, or attending shareholders may hand in a sign-in card lieu of signing in.

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.

Shareholders shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. Solicitors soliciting proxy forms shall also bring identification documents for verification.

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.

Article 7

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.

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.

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.

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.

Article 8

The Company shall make an uninterrupted audio and video recording of the shareholders meeting and retain for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

Article 9

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 plus the number of shares whose voting rights are exercised by correspondence or electronically.

The chair shall call the meeting to order at the appointed meeting time. 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.

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.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

Article 10

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 in 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.

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.

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.

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.

Article 11

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.

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.

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 terminate the speech.

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.

After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

Article 12

Voting at a shareholders meeting shall be calculated based the number of shares.

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.

When a shareholder is an interested party 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.

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.

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.

Article 13

A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act.

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.

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.

After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, 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.

Except as otherwise provided in the Company Act and in the Company’s articles of incorporation, 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 announce the total number of voting rights represented by the attending shareholders.

A proposal shall be deemed approved by the chair if there is no objection from all members present and shall have the same effect as voting; if there is an objection, a voting shall be taken in accordance with the preceding provisions.

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.

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. Vote counting shall be conducted in public at the place of the shareholders meeting. The results of the voting shall be announced on-site at the meeting, and a record made of the vote.

Article 14

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.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 15

Resolutions of a shareholders’ meeting shall be recorded in the minutes of the meeting pursuant to Article 183 of the Company Act.

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.

The preceding method of resolutions is to be determined by the chair in consultation with shareholders. If there is no objection to the resolution by shareholders, it shall be stated that “the resolution is passed without objection by the chair after consultation with all shareholders present”; however, if there is an objection to the resolution, the manner in which the resolution is adopted and the proportion of votes cast to the number of votes cast shall be stated.

Article 16

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 and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders meeting.

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 GreTai Securities Market) regulations, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

Article 17

Staff handling administrative affairs of a shareholders meeting shall wear identification cards or arm bands.

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.”

At the place of a shareholders meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the chair may prevent the shareholder from so doing.

When a shareholder violates the rules of procedure and defies the chair’s correction, obstructing the proceedings and refusing to heed calls to stop, the chair may direct the proctors or security personnel to escort the shareholder from the meeting.

Article 18

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.

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.

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.

Article 19

These Rules shall only take effect after having been submitted to and approved by a shareholders meeting. Subsequent amendments thereto shall be effected in the same manner.

`【` Appendix3 `】`

LOTES CO., LTD.

`“` Operational Procedures for Acquisition and Disposal of Assets `”` (Before amendment)

General Rule

1.1. Purpose

1.1.1. The Company shall handle the acquisition or disposal of assets in compliance with the Procedure.

1.2. Scope

1.2.1. All operations of the Company to acquire or dispose of assets shall be managed in accordance with the system regulated by these operations. 1.2.2. The term "assets" as used in these Regulations includes the following: 1.2.2.1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities.

1.2.2.2. Real property (including land, houses and buildings, investment property, and construction enterprise inventory) and equipment.

1.2.2.3. Memberships.

1.2.2.4. Patents, copyrights, trademarks, franchise rights, and other intangible assets.

1.2.2.5. Right-of-use assets.

1.2.2.6. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables).

1.2.2.7. Derivatives.

1.2.2.8. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law.

1.2.2.9. Other major assets. 1.3. Responsible Unit

1.3.1. The financial unit is the responsible authority of this operation, and the head of the authority is authorized to be responsible for the control of this operation and to ensure the operation in accordance with the specifications of this operation.

1.4. Term Definition

1.4.1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts.

1.4.2. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under Article 156-3 of the Company Act.

1.4.3. Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

1.4.4. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.

1.4.5. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.

1.4.6. Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.

1.4.7. Investment professional: Refers to financial holding companies, banks, insurance companies, bill finance companies, trust enterprises, securities firms operating proprietary trading or underwriting business, futures

commission merchants operating proprietary trading business, securities investment trust enterprises, securities investment consulting enterprises, and fund management companies, that are lawfully incorporated and are regulated by the competent financial authorities of the jurisdiction where they are located.

1.4.8. Securities exchange: "Domestic securities exchange" refers to the Taiwan Stock Exchange Corporation; "foreign securities exchange" refers to any organized securities exchange market that is regulated by the competent securities authorities of the jurisdiction where it is located.

1.4.9. Over-the-counter venue ("OTC venue", "OTC"): "Domestic OTC venue" refers to a venue for OTC trading provided by a securities firm in accordance with the Regulations Governing Securities Trading on the Taipei Exchange; "foreign OTC venue" refers to a venue at a financial institution that is regulated by the foreign competent authority and that is permitted to conduct securities business.

1.5. Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall meet the following requirements:

1.5.1. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received.

1.5.2. May not be a related party or de facto related party of any party to the transaction.

1.5.3. If the company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.

When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraph shall comply with the following:

1.5.3.1 Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence.

1.5.3.2 When examining a case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers.

1.5.3.3 They shall undertake an item-by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion.

1.5.3.4 They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with applicable laws and regulations.

Disposition Procedures

2.1.Establishment and Amendment Procedures

The Company shall establish the procedure for the acquisition or disposal of assets in accordance with the provisions of these Regulations. After the procedures have been approved by the board of directors, they shall be submitted to each supervisor, and then to a shareholders' meeting for approval; the same applies when the procedures are amended.

If any director expresses dissent and it is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to each supervisor.

Where an audit committee has been established, when the procedures for the acquisition and disposal of assets are adopted or amended they shall be approved by one-half or more of all audit committee members and submitted to the board of directors for a resolution.

If approval of one-half or more of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by two-thirds or more of all directors, and the

resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The terms "all audit committee members" in paragraph 5 and "all directors" in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

2.2. Acquisition or Disposal of Assets

2.2.1. Procedures for acquiring or disposing of real estate and other fixed assets, membership cards and intangible assets

2.2.1.1. The acquisition or disposal of real estate, other fixed assets, membership cards and intangible assets shall be carried out by the applicant in accordance with the actual demand situation. The applicant shall state the reasons, in conjunction with the relevant units, conducting consultation, comparison, bargaining or tender. The transaction amount of which is over NT$50 million shall be reported to the Board of Directors for approval. If the transaction amount is less than NT$50 million (inclusive), the Board of Directors shall authorize the Chairman of the Board to decide on the transaction.

2.2.2. Procedures for Acquisition and Disposal of Long-term and Short-term Investments in Securities

2.2.2.1. The Company's long-term and short-term investments in securities shall be subject to the approval of the Chairman of the Board of Directors after an evaluation report has been submitted by the Finance and Accounting Department or a related entity. For each transaction amounting to NT$30 million or more, the Board of Directors shall approve the transaction. For each transaction amounting to NT$30 million or less, the Board of Directors shall authorize the Chairman of the Board to decide on the transaction.

2.2.3. Total amount of real estate acquired for non-operating use, assets with rights to use, or marketable securities, and the limits of individual marketable securities

2.2.3.1 The total amount of the Company's acquisition of non-operating real estate and its right-to-use assets shall not exceed 20% of the Company's most recent financial statements.

2.2.3.2 The limit on short-term investments shall not exceed 20% of the Company's latest financial statements and the limit on individual marketable securities shall not exceed 10% of the Company's latest financial statements. However, purchases and sales of marketable securities that do not affect capital gains or losses (e.g., repurchased notes and domestic currency funds) may be excluded from the calculation of marketable securities not intended for business use.

2.2.3.3.The purchase of real estate and its right-to-use assets by subsidiaries for non-operating purposes shall not exceed the paid-in capital of each subsidiary.

2.2.3.4. The limit on short-term investments of subsidiaries shall not exceed the paid-in capital of each subsidiary, and individually shall not exceed 80% of the paid-in capital of each subsidiary. The limit on short-term investments shall not exceed 80% of the paid-in capital of each subsidiary.

2.3. The transaction price reference for the acquisition or disposal of assets

2.3.1. When the Company acquires or disposes of real property or equipment or its right-to-use assets, except for transactions with domestic government agencies, construction on self-owned land, construction on leased land, or acquisition or disposal of equipment or its right-to-use assets for business use, if 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 from a professional appraiser prior to the date of occurrence of the fact, and shall comply with the following The following requirements shall be met:

2.3.1.1. The type of appraised price shall be based on the normal price, and in the case of a limited price or a specific price or a special price, it shall be stated whether it complies with the provisions of Article 10 or Article 11 of the Technical Specification for Land Appraisal. If, for special reasons, a limited price or a specific price or a special price is used as a reference for the transaction price, the transaction shall be approved by a resolution of the Board of Directors, notified to the Company's supervisors and reported to the next shareholders' meeting; the same applies to any subsequent changes in the terms of the transaction. The valuation report shall also evaluate the results of the normal price and the qualified or specific price separately, and shall list each of the qualified or specific conditions and whether they are currently met, as well as the reasons and reasonableness of the difference from the normal price, and shall clearly indicate whether the qualified or specific price is sufficient as a reference for the purchase and sale price.

2.3.1.2. If the difference between the appraisal result of the appraisal institution and the transaction amount is 20 percent or more, except when the appraisal result of the assets acquired is higher than the transaction amount or the appraisal result of the assets disposed of is lower than the transaction amount, the accountant shall be required to comply with the provisions of Article 13 of Statement of Auditing Standards No. 20 and express a specific opinion on the reasons for the difference and the reasonableness of the transaction price. The difference between the said valuation result and the transaction amount is based on the transaction amount.

2.3.1.3. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. Where the discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

2.3.1.4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

2.3.1.5. If an appraisal agency issues an "hourly value survey report" or "appraisal report" in lieu of an appraisal report, the contents of the entries shall still comply with the provisions of the preceding appraisal report as to what should be entered.

2.3.2.As the Company acquire or dispose of securities, it shall, prior to the date of occurrence of the event, obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the company's paid-in capital or NT$300 million or more, the company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC).

2.3.3. Where the Company acquires or disposes of intangible assets or right-of-use assets thereof or memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a domestic government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

2.3.4.Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion. 2.3.5. If the opinion issued by the appraiser or certified public accountant appointed in accordance with this regulation is false or concealed, the company, the appraiser and the certified public accountant shall be legally responsible for the announcement in accordance with the regulations.

2.3.6.The calculation of transaction amounts in clauses 2.3.1 to 2.3.3 shall be made in accordance with the provisions of Article 3.2. of this Control Practice, and the reference to within one year shall be based on the date of occurrence of the transaction and shall be projected one year in advance, and the appraisal report or accountant's opinion issued by a professional appraiser obtained in accordance with the provisions of this Practice shall be exempted from further calculation.

2.4. Related Party Transactions

When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions according to the regulations of article 2.2 and 2.3 and 2.4 are adopted and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10 percent or more of the company's total assets, the company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of article 2.3.

The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 2.3.6 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Amount of an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provision need not be counted toward the transaction amount.

When judging whether a transaction counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.

2.4.1. The Company acquires or disposes of real estate or its right-to-use assets from a related party, or acquires

or disposes of real estate or its right-to-use assets with a related party.

If the transaction amount reaches 20% of the Company's paid-in capital, 10% of the Company's total assets, or NT$300 million or more, the Company may acquire or dispose of assets other than real estate or right-to-use assets from a related party.

In addition to the purchase and sale of domestic bonds, bonds with repurchase or repurchase conditions, and the purchase or repurchase of money market funds issued by domestic securities investment trusts, the Company shall acquire or dispose of assets other than movable assets or assets for use by the Company.

The following information shall be submitted to the board of directors for approval and supervisors for acknowledgement before signing the transaction contract.

The following information shall be submitted to the board of directors for approval and acknowledgement by the supervisor before signing the transaction contracts and making payments.

2.4.1.1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.

2.4.1.2 The reason for choosing the related party as a transaction counterparty.

2.4.1.3. With respect to the acquisition of real property or right-of-use assets thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 2.4.2 and Article 2.4.3.

2.4.1.4. The date and price at which the related party originally acquired the real property, the original transaction counterparty, and that transaction counterparty's relationship to the company and the related party. 2.4.1.5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization. 2.4.1.6. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the 。 provision of Article 2.3 herein.

2.4.1.7. Restrictive covenants and other important stipulations associated with the transaction.

The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 3.2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the supervisors need not be counted toward the transaction amount.

With respect to the types of transactions listed below, when to be conducted between the Company and its parent or subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the company's board of directors delegate the board chairman to decide such matters when the transaction is within NT$80 million and have the decisions subsequently submitted to and ratified by the next board of directors meeting:

1.Acquisition or disposal of equipment or right-of-use assets thereof held for business use.

2.Acquisition or disposal of real property right-of-use assets held for business use.

Where the position of independent director has been created, when a matter is submitted for discussion by the board of directors pursuant to Article 2.4.1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Where an audit committee has been established, the matters for which Article 2.4.1 requires recognition by the supervisors shall first be approved by one-half or more of all audit committee members and then submitted to the board of directors for a resolution.

2.4.2. Evaluate the reasonableness of the transaction costs

2.4.2.1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.

2.4.2.2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the transaction counterparties.

2.4.2.3. Where land and structures thereupon are combined as a single property purchased or leased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in Article 2.4.2.1 and 2.4.2.2.

2.4.2.4. As the Company acquires real property or right-of-use assets thereof from a related party and appraises the cost of the real property or right-of-use assets thereof in accordance with Article 2.4.2.1 and 2.4.2.3 shall also engage a CPA to check the appraisal and render a specific opinion.

2.4.2.5. Where the Company acquires real property or right-of-use assets thereof from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Article 2.4.1, and the preceding three paragraphs do not apply:

2.4.2.5.1. The related party acquired the real property or right-of-use assets thereof through inheritance or as a gift.

2.4.2.5.2. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction.

2.4.2.5.3. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land. 2.4.2.5.4The real property right-of-use assets for business use are acquired by the public company with its parent or subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital.

2.4.3. Handling of abnormal transaction prices

2.4.3.1. When the results of the Company's appraisal conducted in accordance with Article 2.4.2.1 and 2.4.2.3 are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 2.4.3.2. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply:

2.4.3.1.1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:

2.4.3.1.1.1. Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.

2.4.3.1.1.2. Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or leasing practices.

2.4.3.1.2. Where the Company acquiring real property, or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of completed transactions involving neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

2.4.3.1.3.Completed transactions involving neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions involving similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property or obtainment of the right-of-use assets thereof. 2.4.3.2. Where the Company acquires real property or right-of-use assets thereof from a related party and the results of appraisals conducted in accordance with Article 2.4.2 and 2.4.3 are uniformly lower than the transaction price, the following steps shall be taken:

2.4.3.2.1.A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, paragraph of the Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company.

2.4.3.2.2. Supervisors shall comply with Article 218 of the Company Act. Where an audit committee has been established in accordance with the provisions of the Act, the preceding part of this subparagraph shall apply mutatis mutandis to the independent director members of the audit committee.

2.4.3.2.3. Actions taken pursuant to Article 2.4.2.1 and 2.4.2.2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

2.4.3.3.The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased or leased at a premium, or they have been disposed of, or the leasing contract has been terminated, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.

2.4.3.4. When the Company obtains real property or right-of-use assets thereof from a related party, it shall also comply with provisions of Article 2.4.3.2 and 2.4.3.3 if there is other evidence indicating that the acquisition was not an arms length transaction.

2.5. Engaging in Derivatives Trading

2.5.1. Engaging in Derivatives Trading

The Company engages in derivative transactions in which the value is derived from assets, interest rates, exchange rates, indices or other interests.

The Company engages in derivative contracts, including forward contracts, futures, interest rates or exchange rates, swaps, and compound contracts that are a combination of these commodities.

The derivative contracts include forward contracts, futures, interest rate or exchange rate contracts, swaps, and compound contracts that are a combination of these commodities.

The Company may enter into option contracts, but may not enter into option transactions for the sale of purchase rights or sale rights.

2.5.2. Operating or hedging strategies: Derivatives are traded for the primary purpose of hedging the exchange rate risk arising from operations.

2.5.3. Segregation of duties ：

2.5.3.1. Finance team: responsible for foreign exchange operation management, collecting foreign exchange

market information, judging trends and risks, familiar with financial commodities and operation techniques, etc., and managing foreign exchange parts and avoiding foreign exchange risks according to company policies and authorization.

2.5.3.2. Accounting Group: To keep track of the company's overall foreign exchange position and regularly settle realized and unrealized exchange gains and losses in order to provide the capital team with hedging operations.

2.5.4. Performance evaluation: The operation details (amount, exchange rate, bank, maturity date) are recorded on the transaction details on a daily basis to grasp the profit and loss status; in addition, the exchange gain or loss is settled on a monthly, quarterly, semi-annual and annual basis.

2.5.5. Trading limit: The total amount of foreign currency forward exchange contracts and derivative contracts to hedge foreign exchange risk shall not exceed the total amount of the Company's actual import and export demand for foreign currency.

2.5.6. Loss limit: The Company's individual losses from derivative transactions shall not exceed 20% of the contract amount, and the total loss limit shall not exceed 3% of the most recent net financial statements. If the total loss exceeds the upper limit, the Company must immediately report the loss to the chairman of the board of directors and discuss necessary countermeasures with the board of directors.

Translated with www.DeepL.com/Translator (free version)

2.5.7. Authorization level: Based on the changes of the Company's turnover and net accumulated parts, the authorization level is set as follows:

Level/Amount/Accumulated undelivered parts Chairperson: USD$ 1million/Over USD$ 4 million General Manager: Below USD$ 1million/Below USD$ 4 million

2.5.8. Execution Unit: Authorize the Finance Department to execute

2.5.9. Procedure

2.5.9.1. If the transaction personnel of the Finance Department place orders with the Bank within the authorized scope, prior written approval from the relevant decision maker is required in accordance with the authority limit if the amount exceeds the authorized amount as stated above.

2.5.9.2. Based on the transaction return from the bank, the trading staff of the Finance Department should fill

out the "Transaction Contract" and apply for the seal to confirm the validity of the transaction after confirmation.

2.5.9.3. When a foreign exchange transaction is settled, the settlement officer will use the approved

"Transaction Contract" and "Application for Outward Remittance" as the basis for accounting.

2.5.9.4. The Finance Department compiles a monthly "Derivative Financial Instruments Register" as the basis for accounting evaluation.

2.5.10. Accounting procedures: In accordance with IFRS 9.

2.5.11. Internal Control System

2.5.11.1. Risk Management Measures:

2.5.11.1.1. Credit Risk Consideration: The counterparty is the bank with which the company has dealings.

2.5.11.1.2. Consideration of market risk: To the extent that the market risk is considered through interbank open foreign exchange transactions.

2.5.11.1.3. Liquidity considerations: To ensure liquidity, banks must have adequate equipment, information and transaction capabilities.

2.5.11.1.4. Operational considerations: The authorization quota and operational procedures must be followed.

2.5.11.1.5. Legal Considerations: Documents signed with the bank must be reviewed by a legal officer. 2.5.11.2. Internal Control:

2.5.11.2.1. Trading personnel and personnel working on confirmation and delivery are not allowed to work with each other.

2.5.11.2.2. Risk measurement, supervision and control personnel should be in a separate department from the personnel in 2.5.11.2.1. and should report to the Board of Directors or to a senior executive who is not responsible for making decisions about transactions or parts of the Company.

2.5.11.2.3. Confirmation officers are required to reconcile transaction details and totals with the bank on a regular basis.

2.5.11.2.4. Trading personnel shall at all times pay attention to whether the total amount of transactions exceeds the total amount of contracts stipulated in the Regulations.

2.5.11.3. Regular evaluation method:

2.5.11.3.1. The Company evaluates its holdings twice a month and submits them to the chief financial officer for review.

2.5.11.3.2. The exchange gain or loss is settled monthly, quarterly, semi-annually and annually based on market prices and disclosed in the financial statements.

2.5.14. Internal Audit System

The Company shall establish a log book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates, and periodic evaluation of trading sites, compliance of trading performance with the Company's business strategy and risk tolerance and risk management measures shall be recorded in detail in the log book.

Where independent directors have been appointed, for matters for which notice shall be given to the supervisors under the preceding paragraph, written notice shall also be given to the independent directors. Where an audit committee has been established in accordance with the provisions of the Act, the provisions of paragraph 2 relating to supervisors shall apply mutatis mutandis to the audit committee. 2.5.15. Irregular circumstances

When irregular circumstances are found in the course of supervising trading and profit-loss circumstances, appropriate measures shall be adopted and a report immediately made to the board of directors; where a company has independent directors, an independent director shall be present at the meeting and express an opinion.

2.6. Mergers and Consolidations, Splits, Acquisitions, and Assignment of Shares 2.6.1. Opinion on reasonableness

As the Company conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, it shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other

property to shareholders, and submit it to the board of directors for deliberation and passage. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by a public company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the public company directly or indirectly holds 100 percent of the respective subsidiaries' issued shares or authorized capital.

2.6.2. Disclosure of information prior to shareholders' meetings

As the Company participate in a merger, demerger, acquisition, or transfer of shares, it shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting and include it along with the expert opinion referred to in paragraph 1 of the preceding Article when sending shareholders notification of the shareholders meeting for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply.

Where the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the companies participating in the merger, demerger or acquisition shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.

2.6.3. Convening of board meetings and shareholders' meetings

Company participating in a merger, demerger, or acquisition shall convene a board of directors meeting and shareholders meeting on the day of the transaction to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the competent authority is notified in advance of extraordinary circumstances and grants consent.

Company participating in a transfer of shares shall call a board of directors meeting on the day of the transaction, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.

When participating in a merger, demerger, acquisition, or transfer of another company's shares, company that is listed on an exchange or has its shares traded on an OTC market shall prepare a full written record of the following information and retain it for 5 years for reference:

1.Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of another company's shares prior to disclosure of the information.

2.Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract, and the convening of a board of directors meeting.

3.Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of board of directors meetings.

When participating in a merger, demerger, acquisition, or transfer of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC market shall, within 2 days counting inclusively from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in subparagraphs 1 and 2 of the preceding paragraph to the competent authority for recordation.

Where any of the companies participating in a merger, demerger, acquisition, or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company(s) so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the provisions of the preceding two paragraphs.

2.6.4. Confidentiality

Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition, or transfer of shares.

2.6.5. Determination and change of share exchange ratio

As the Company participates in a merger, demerger, acquisition, or transfer of shares, it may not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares:

2.6.5.1. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.

2.6.5.2. An action, such as a disposal of major assets, that affects the company's financial operations.

2.6.5.3. An event, such as a major disaster or major change in technology, that affects shareholder equity or share price.

2.6.5.4. An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of shares from another company, buys back treasury stock.

2.6.5.5. An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.

2.6.5.6. Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed. 2.6.6. Items to be recorded in the contract

The contract for participation by the Company in a merger, demerger, acquisition, or of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following:

2.6.6.1. Handling of breach of contract.

2.6.6.2. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.

2.6.6.3. The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.

2.6.6.4. The manner of handling changes in the number of participating entities or companies.

2.6.6.5. Preliminary progress schedule for plan execution, and anticipated completion date.

2.6.6.6. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures. 2.6.7. Handling of changes in the number of participating companies

After public disclosure of the information, if any company participating in the merger, demerger, acquisition, or share transfer intends further to carry out a merger, demerger, acquisition, or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or share transfer; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.

2.6.8. The treatment of a participating company that is not a public company

Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the company shall sign an agreement with the non-public company whereby the latter is required to abide by the provisions of Article 2.6.3, Article 2.6.4, and 2.6.7.

Public Disclosure of Information

3.1. Under any of the following circumstances, as the Company acquires or disposes assets, it shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 3.1.1.Acquisition or disposal of real property or right-of-use assets thereof from or to a related party, or acquisition or disposal of assets other than real property or right-of-use assets thereof from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more; provided, this shall not apply to trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

3.1.2. Merger, demerger, acquisition, or transfer of shares.

3.1.3. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the company.

3.1.4. Where equipment or right-of-use assets thereof for business use are acquired or disposed of, and

furthermore the transaction counterparty is not a related party, and the transaction amount meets any of the following criteria:

3.1.4.1. For a public company whose paid-in capital is less than NT$10 billion, the transaction amount reaches NT$500 million or more.

3.1.4.2. For a public company whose paid-in capital is NT$10 billion or more, the transaction amount reaches NT$1 billion or more.

3.1.5. Acquisition or disposal by a public company in the construction business of real property or right-of-use assets thereof for construction use, and furthermore the transaction counterparty is not a related party, and the transaction amount reaches NT$500 million; among such cases, if the public company has paid-in capital of NT$10 billion or more, and it is disposing of real property from a completed construction project that it constructed itself, and furthermore the transaction counterparty is not a related party, then the threshold shall be a transaction amount reaching NT$1 billion or more.

3.1.6. Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and furthermore the transaction counterparty is not a related party, and the amount the company expects to invest in the transaction reaches NT$500 million.

3.1.7. Where an asset transaction other than any of those referred to in Article 3.1.1 to 3.1.6, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances:

3.1.7.1.Trading of domestic government bonds.

3.1.7.2.Where done by professional investors-securities trading on securities exchanges or OTC markets, or subscription of ordinary corporate bonds or general bank debentures without equity characteristics (excluding subordinated debt) that are offered and issued in the primary market, or subscription or redemption of securities investment trust funds or futures trust funds, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange.

3.1.7.3.Trading of bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

3.2.The amount of transactions above shall be calculated as follows:
3.2.1. The amount of any individual transaction.

3.2.2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year.

3.2.3. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use assets thereof within the same development project within the preceding year.

3.2.4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

3.3. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Regulations need not be counted toward the transaction amount.

3.4. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by the company and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month.

3.5. If there is an error or omission that should be corrected in the announcement, the Company shall re-announce and report all items within two days from the date of knowledge. When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission. 3.6. When acquiring or disposing of assets, the Company shall keep the relevant deeds, minutes, docket, valuation reports, and opinions of accountants, attorneys, or securities underwriters at the Company for at least five years, unless otherwise required by other laws. A public company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company, where they shall be retained for 5 years except where another act provides

otherwise.

3.7. Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with Article 3.1 to 3.6, a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event:

3.7.1.Change, termination, or rescission of a contract signed in regard to the original transaction.

3.7.2.The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract.

3.7.3.Change to the originally publicly announced and reported information.

4.1..Information required to be publicly announced and reported in accordance with the provisions of the preceding Chapter on acquisitions and disposals of assets by the Company's subsidiary that is not itself a public company in Taiwan shall be reported by the Company.

The paid-in capital or total assets of the public company shall be the standard applicable to a subsidiary referred to in the preceding paragraph in determining whether, relative to paid-in capital or total assets, it reaches a threshold requiring public announcement and regulatory filing.

For the calculation of 10 percent of total assets under these Regulations, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.

In the case of the company whose shares have no par value or a par value other than NT$10-for the calculation of transaction amounts of 20 percent of paid-in capital under these Regulations, 10 percent of equity attributable to owners of the parent shall be substituted; for calculations under the provisions of these Regulations regarding transaction amounts relative to paid-in capital of NT$10 billion, NT$20 billion of equity attributable to owners of the parent shall be substituted.

`【` Appendix 4 `】`

LOTES CO., LTD.

Operational Procedures for Loaning Funds to Others and Endorsements and Guarantees (before Amendment)

Chapter 1. General Principles

1.1. The Company shall comply with these Procedures when making loans to and endorsements/guarantees for others; provided, where financial laws or regulations provide otherwise, such provisions shall govern.
1.2. “Subsidiary” and “parent company” as referred to in these Procedures shall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Where the Company’s financial reports are prepared according to the International Financial Reporting Standards, “net worth” in these Procedures means the balance sheet equity attributable to the owners of the parent company under the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
1.3. The term “announce and report” as used in these Procedures means the process of entering data to the information reporting website designated by the Financial Supervisory Commission (FSC).
“Date of occurrence” in these Procedures means the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of the loan of funds or endorsement/guarantee, whichever date is earlier.
1.4. After passage by the board of directors, submit the Procedures to each supervisor and submit them for approval by the shareholders’ meeting; where any director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinion to each supervisor and for discussion by the shareholders’ meeting. The same shall apply to any amendments to the Procedures.
Where the Company has appointed independent directors, when it submits its Operational Procedures for discussion by the board of directors under the preceding paragraph, the board of directors shall take into full consideration each independent director’s opinion. If an independent director expresses any dissent or reservation, it shall be noted in the minutes of the board of directors meeting.
Where the Company has established an audit committee, when it adopts or amends its Operational Procedures for Loaning Funds to Others, the procedures or amended procedures shall require the approval of one-half or more of all audit committee members, and furthermore shall be submitted for a resolution by the board of directors, and the provisions of paragraph 2 shall not apply.
If the approval of one-half or more of all audit committee members as required in the preceding paragraph is not obtained, the Operational Procedures may be implemented if approved by two-thirds or more of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.

The terms “all audit committee members” in paragraph 3 and “all directors” in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

1.5. The Company shall announce and report the balance of funds loaned to others and endorsements/guarantees of the Company and its subsidiaries for the previous month by the tenth day of each month.
1.6. The Company shall prepare a memorandum book for its fund-loaning and endorsements/guarantees activities and truthfully record the following information: borrower, amount, date of approval by the board of directors, loaning/borrowing date, and matters to be carefully evaluated under paragraph 1 of the preceding Article.
The Company’s internal auditors shall audit the Operational Procedures for Loaning Funds to Others and Endorsements and Guarantees and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the supervisors and independent directors in writing of any material violation found.
If the Company has established an audit committee in accordance with the regulations, the provisions of the second paragraph of this Article regarding the supervisor shall apply to the Audit Committee.
1.7. The Company shall evaluate the status of its loans of funds and reserve sufficient allowance for bad debts, evaluate or record the contingent loss for endorsements/guarantees, and shall adequately disclose relevant information in its financial reports and provide certified public accountants with relevant information for implementation of necessary auditing procedures.
1.8. If a subsidiary of the Company intends to loan funds to others or to apply for or provide endorsements

and guarantees for others, the Company shall instruct the subsidiary to formulate the loaning and endorsement and guarantee policies in accordance with the provisions of these Procedures, and shall follow the prescribed procedures.

1.9. Any violation of the FSC’s “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” or the Company’s “Operational Procedures for Loaning Funds to Others and Endorsements and Guarantees” by the Company’s managers and officers shall be reported to the Company for regular evaluation in accordance with the Company’s work rules and shall be punished according to the severity of the case.

2. Procedures for Loaning Funds to Others

2.1. Entities to which the company may loan funds
Entities to which the company may loan funds are limited to the following circumstances:
2.1.1. A company or firm with which the company does business with.
2.1.2. A company or firm that has a need for short-term financing.
2.1.2.1. A company in which the Company holds at least 50% of the shares has a short-term need for financing due to business needs.
2.1.2.2. Other companies or firms that have short-term financing needs for material purchases or operating turnovers.
2.2. Loaning limit
The amount of funds lent by the Company to a company or firm with which it has business dealings shall not exceed the amount of business dealings between the Company and such company or firm in the most recent year, and the total amount shall not exceed 40% of the Company’s net worth.
The total amount of financing provided by the Company to companies or firms with short-term financing needs shall not exceed 40% of the Company’s net worth, and the amount of financing provided to a single party shall not exceed 20% of the Company’s net worth.
The amount of financing refers to the cumulative balance of the Company’s short-term financing.

The restriction in paragraph 2 shall not apply to inter-company loans of funds between overseas companies in which the Company holds, directly or indirectly, 100% of the voting shares, nor to loans of fund to the Company by any overseas company in which the Company holds, directly or indirectly, 100% of the voting shares. However, the Company shall still be subject to the following limits:

For inter-company loans of funds between overseas companies in which the Company holds, directly or indirectly, 100% of the voting shares, nor to loans of fund to the Company by any overseas company in which the Company holds, directly or indirectly, 100% of the voting shares, where short-term financing is needed, the total amount of such loans shall not exceed 60% of the Company’s net worth, and the amount of such financing by a single party shall not exceed 20% of the Company’s net worth, and the term of such loans shall not exceed five years.

When a responsible person of the Company violates this Article, the responsible person shall bear joint and several liability with the borrower for repayment; if the Company suffers damage, the responsible person also shall be liable for damages.

2.3. Change in circumstances
If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of these Regulations or the loan balance exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to all the supervisors and independent directors, and shall complete the rectification according to the timeframe set out in the plan.

If the Company has established an Audit Committee in accordance with the regulations, the provisions of the first paragraph of this Article regarding the supervisors shall apply to the Audit Committee.

2.4. Loaning responsibility
When a responsible person of the Company violates Article 1.8 or 2.1, the responsible person shall bear joint and several liability with the borrower for repayment; if the Company suffers damage, the responsible person also shall be liable for damages.
2.5. Duration of loans

The duration of the company’s capital loan shall be limited to no more than one year at a time.

2.6. Calculation of interest
2.6.1. Calculation of interest (on a daily basis):

The sum of the daily loaning balance (i.e., the total amount) multiplied by the annual interest rate of

the loan and divided by 365 is the daily interest amount. The annual interest rate of the loan shall not be less than the short-term loaning rate of the Bank of Taiwan plus 1% on the date of the loan, or the Company’s current cost of capital.

2.6.2. Advance deduction of interest:

Unless otherwise specified, the interest on the loan shall be deducted at the time of appropriation. If the borrower is a company in which the Company holds at least 50% of the shares, interest may not be deducted first.

2.7. Operating unit

The finance unit of the Company is responsible for the loaning of funds.

2.8. Evaluating unit
Before making a loan of funds to others, the Company shall carefully evaluate whether the loan is in compliance these Operational Procedures for Loaning Funds to Others. The company shall not empower any other person to make such decision.

Loans of funds between the Company and its parent company or subsidiaries, or between its subsidiaries, shall be submitted for a resolution by the board of directors pursuant to the preceding paragraph, and the chairperson may be authorized, for a specific borrowing counterparty, within a certain monetary limit resolved by the board of directors, and within a period not to exceed one year, to give loans in installments or to make a revolving credit line available for the counterparty to draw down.

The “certain monetary limit” mentioned in the preceding paragraph on authorization for loans extended by the Company or any of its subsidiaries to any single entity shall not exceed 10% of the net worth on the most current financial statements of the loaning company, except in cases of companies in compliance with Article 2.2, paragraph 5.

Where the Company has appointed independent directors, when it loans funds to others, it shall take into full consideration each independent director’s opinions; independent directors’ opinions specifically expressing assent or dissent and their reasons for dissent shall be included in the minutes of the board of directors’ meeting.

2.9. Loaning procedure
2.9.1. Application:
When applying for a loan of funds from the Company, the borrower shall issue an application or official letter to the Company’s finance unit detailing the amount, term and purpose of the loan.
2.9.2. Credit status:
For first-time borrowers, the borrower shall provide basic information for the company’s financial unit to assess the credit status.

For re-borrowers, credit status assessment will be conducted once a year, and in case of major cases, credit will be collected once every six months depending on actual needs.

If the borrower is in good financial condition and the annual financial statements have been approved by an accountant, the borrower may sign the loan by referring to the accountant’s audit report. Credit assessment is exempted if the borrower is a company in which the Company holds at least 50% of the shares.

2.9.3. Loaning approval:

After credit investigation or assessment, if the borrower’s credit assessment is unsatisfactory, or if the borrower intends to use the loan for an improper purpose, the operating personnel shall sign an official letter with the reasons for refusal, and then reply to the borrower as soon as possible. If the credit investigation results in a good credit assessment and proper use of the borrowed funds, the operating personnel shall fill out a credit report and give their opinion, prepare the loan terms and conditions, and submit them to the board of directors at each level for approval.

After the case of loan of funds is approved, the finance unit shall write to the borrower as soon as possible, detailing the terms of the Company’s borrowing, including the amount, duration, interest rate, collateral and guarantor, etc.

2.9.4. Contracts signing and identity verification:
The loan officer shall fill out the loan agreement and sign the contract in accordance with the approved conditions.
After the borrower and the joint guarantor sign the contract, the loan officer shall complete the identity verification procedures.
2.9.5. Collateral rights setting:

If the borrower is determined to provide collateral, the borrower shall apply for registration of creation of pledge or mortgage to secure the Company’s debts.

2.9.6. Insurance:

The collateral, except land, shall be covered by fire insurance, and if it is a vehicle, it shall be covered by all-risks insurance, and the amount of insurance shall be no less than the collateral value, and the policy shall be endorsed with the Company as the beneficiary of the insurance.

2.9.7. Appropriation:

The loan can be funded after the borrower signs the contract, pays the promissory note (or IOU), and completes the procedures for setting up the mortgage and insurance.

2.9.8. Entering:

The Company shall prepare a journal voucher for obtaining collateral or credit guarantee by the financial unit upon completion of each loan of funds.

2.10. Repayment

If the borrower repays the loan at or before maturity, the Company may cancel the promissory notes and other debentures and return them to the borrower only after the principal is repaid.

2.11. Collateral cancellation

When the borrower applies for the cancellation of the collateral, the Company shall first ascertain whether the principal and interest of the loan have been fully repaid, and shall agree to the cancellation of the collateral only when the loan has been repaid.

2.12. Extension of deadline date
The borrower is notified to repay the loan prior to the maturity date, and may apply for an extension if necessary with the approval of the board of directors. However, the maximum extension of the loan period plus the original loan period shall not exceed one year in aggregate, and shall be limited to one time.
2.13. Subsequent control measures for loans made
After the loan is disbursed, the financial, business and credit status of the borrower and guarantor shall be constantly monitored, and if collateral is provided, any changes in the value of the guarantee shall be noted, and any significant changes shall be reported to the general manager immediately and shall be handled appropriately in accordance with the instructions.

If the borrower fails to repay the loaned funds, the financial unit shall sign a written letter detailing the reasons and submit it to the general manager for approval before the procedures for handling delinquent creditor’s rights.

2.14. Procedures for controlling loans of subsidiaries’ funds to others
2.14.1. When a subsidiary of the Company intends to loan funds to others, it shall seek the Company’s approval before doing so. The financial unit of the Company shall evaluate specifically the necessity and reasonableness of such loaning, the risks involved, and the impact on the Company’s and its subsidiaries’ operating risks, financial position and shareholders’ equity, and submit it to the general manager for approval.
2.14.2. The finance unit shall obtain by the tenth day of each month a schedule of the balance of funds loaned to others by each subsidiary for the previous month.
2.14.3. The Company’s internal auditors shall audit the “Operational Procedures for Loaning Funds to Others” and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the auditing units in writing of any material violation found.
2.14.4. The Company’s auditors shall, in accordance with the annual audit plan, conduct audits at the subsidiaries to understand the execution of the subsidiaries’ capital loaning operations, and if any deficiencies are found, shall continue to track the improvement situation and make a tracking report to the supervisors.
2.15. Announce and report
If the Company’s loans of funds reach one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence:
2.15.1. The aggregate balance of loans to others by the Company and its subsidiaries reaches 20 percent or more of the Company’s net worth as stated in its latest financial statement.
2.15.2. The balance of loans by the Company and its subsidiaries to a single enterprise reaches 10 percent or more of the Company’s net worth as stated in its latest financial statement.

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2.15.3. The amount of new loans of funds by the Company or its subsidiaries reaches NT$10 million or more, and reaches 2 percent or more of the Company’s net worth as stated in its latest financial statement.
The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to subparagraph 3 of the preceding paragraph.

3. Procedures for Endorsements and Guarantees

3.1. Definition of endorsements/guarantees
3.1.1. Financing endorsements/guarantees, including:
3.1.1.1. Bill discount financing.
3.1.1.2. Endorsement or guarantee made to meet the financing needs of another company.
3.1.1.3. Issuance of a separate negotiable instrument to a non-financial enterprise as security to meet the financing needs of the company itself.
3.1.2. Customs duty endorsement/guarantee, meaning an endorsement or guarantee for the company itself or another company with respect to customs duty matters.
3.1.3. Other endorsements/guarantees, meaning endorsements or guarantees beyond the scope of the above two subparagraphs.
3.1.4. Any creation by the Company of a pledge or mortgage on its chattel or real property as security for the loans of another company shall also comply with these Regulations.
3.2. The Company may make endorsements/guarantees for the following companies:
3.2.1. A company with which it does business.
3.2.2. A company in which the Company directly and indirectly holds more than 50 percent of the voting shares.
3.2.3. A company that directly and indirectly holds more than 50 percent of the voting shares in the Company.
3.3. Limit of endorsements/guarantees
The total amount of the Company’s external endorsements and guarantees shall not exceed 50% of the Company’s net worth of the most recent financial statements. However, the total amount of endorsements and guarantees to a single entity shall not exceed 20% of the Company’s net worth of the most recent financial statements.
Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares may make endorsements/guarantees for each other, and the amount of endorsements/guarantees may not exceed 10% of the net worth of the Company, provided that this restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares.
3.3.1. The aggregate amount of external endorsements and guarantees by the Company and its other subsidiaries as a whole shall not exceed 60% of the Company’s net worth as of the most recent financial statements. However, the aggregate amount of the endorsement and guarantee for a single entity shall not exceed 30% of the Company’s net worth of the most recent financial statements. If the total amount of endorsements and guarantees made by the Company and its subsidiaries as a whole amounts to more than 50% of the Company’s net worth, the Company shall explain the necessity and reasonableness of such endorsements and guarantees in the shareholders’ meeting.
3.4. Changes of condition
Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of these Regulations, or the amount of endorsement/guarantee exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to all the supervisors and independent directors, and shall complete the rectification according to the timeframe set out in the plan.
If the Company has established an Audit Committee, the provisions of the first paragraph of this Article regarding the supervisors shall apply to the Audit Committee.
3.5. Limit adjustment by the Board of Directors
Where the Company needs to exceed the limits set out in the Operational Procedures for Endorsements/Guarantees to satisfy its business requirements, and where the conditions set out in the Operational Procedures for Endorsements/Guarantees are complied with, it shall obtain approval from the board of directors and half or more of the directors shall act as joint guarantors for any loss that may be

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caused to the Company by the excess endorsement/guarantee. It shall also amend the Operational Procedures for Endorsements/Guarantees accordingly and submit the same to the shareholders’ meeting for ratification after the fact. If the shareholders’ meeting does not give consent, the Company shall adopt a plan to discharge the amount in excess within a given time limit.

Before the Company makes endorsements/guarantees for subsidiaries in which the Company directly or indirectly holds more than 90% of the voting shares in accordance with the second paragraph of Article 3.3, the endorsement/guarantees shall be submitted to the Company’s board of directors for approval. This restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares.

If the Company has established independent directors, the opinions of the independent directors shall be fully considered during the aforementioned board of directors’ meeting and any objection or reservation of the independent directors shall be stated in the minutes of the board of directors’ meeting.

3.6. Operating unit
The finance unit of the Company is responsible for the endorsements/guarantees.
3.7. Evaluating unit
Before making endorsements and guarantees for others, the Company should carefully follow the provisions of these Regulations and submit them to the Board of Directors for resolution, or the Board of Directors may authorize the Chairperson of the Board of Directors to make decisions within the $200 million limit, and then report them to the Board of Directors for ratification after the most recent meeting.
If the Company has established independent directors, the opinions of the independent directors shall be fully considered when making endorsements and guarantees for others and any objection or reservation of the independent directors shall be stated in the minutes of the board of directors’ meeting.
3.8. Endorsement application and audit
When the guaranteed company requests an endorsement, the Company’s application department shall fill out a “petition”. The reason and purpose of the endorsement shall be explained, and documents such as a negotiable instrument shall be attached for verification. The key points of financial unit’s audit are as follow:.
3.8.1. Whether the reasons for the endorsement are sufficient
3.8.2. Whether the amount of the endorsement is reasonable in light of the financial position of the guaranteed company
3.8.3. Whether it is necessary for the guaranteed company to provide security for movable or immovable property
3.8.4. Whether the accumulated amount is still within the limit
3.8.5. Whether there is any other possibility of jeopardizing the Company’s interests
3.9. Approval and cancellation of endorsed instruments
3.9.1. The approved endorsed instrument may be returned to the guaranteed company after completing the following procedures:
3.9.1.1. Affix the Company seal.
3.9.1.2. Make a photocopy of the front and back of the endorsed instrument and keep it for inspection.
3.9.1.3. Register the “endorsement and cancellation memorandum book” to control the amount of endorsement.
3.9.2. If the endorsed instrument has to be cancelled due to debt or renewal, the applying unit shall fill out a “Guarantee Application (Cancellation) Form” and send it to the financial unit for cancellation together with the original endorsed instrument.
3.9.3. The financial unit records the cancellation instruments in the “endorsement and cancellation memorandum book” from time to time to reduce the accumulated endorsement amount.
3.10. Dedicated chop for endorsements/guarantees
The Company shall use the corporate chop registered with the Ministry of Economic Affairs as the dedicated chop for endorsements/guarantees. The chop shall be kept in the custody of a designated person approved by the board of directors and may be used to seal or issue negotiable instruments in accordance with the “Control Procedure for Company Chop” of the internal control system.
In the case of making guarantees to foreign companies, the guarantee letter issued by the Company shall be signed by a person authorized by the board of directors.
3.11. Endorsement and cancellation memorandum book
The endorsement and cancellation memorandum book maintained by the Company shall, in addition to

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the provisions of Article 6, record the matters related to the endorsement and cancellation of guarantees, the results of the risk assessment, the contents of the collateral obtained and the conditions and date of the release of the guarantee, etc., and make a detailed record of the endorsement and cancellation, and make an announcement and report in accordance with the relevant regulations.

3.12. Control procedures for endorsements/guarantees of subsidiaries
3.12.1. The Company shall supervise its subsidiaries to check whether the “Operating Procedures for Endorsements/Guarantees” established by the Company are in compliance with the relevant standards and whether the endorsement and guarantee transactions are conducted in accordance with the provisions of the Operating Procedures.
3.12.2. The subsidiary shall prepare and submit to the Company a schedule of endorsements and guarantees for others for the previous month by the tenth day (excluding) of each month.
3.12.3. The Company’s internal auditors shall audit the “Operational Procedures for Endorsements and Guarantees” and the implementation thereof no less frequently than quarterly and prepare written records accordingly. They shall promptly notify all the auditing units in writing of any material violation found.
3.12.4. When the Company’s auditors conduct audits at subsidiaries in accordance with the annual audit plan, they should also understand the implementation of the operating procedures of the subsidiaries’ endorsements and guarantees for others, and if any deficiencies are found, they shall continue to follow up on their improvement and make a follow-up report to the supervisors.
3.13. Announce and report
The Company’s balance of endorsements/guarantees reaches one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence:
3.13.1. The aggregate balance of endorsements/guarantees by the Company and its subsidiaries reaches 50 percent or more of the Company’s net worth as stated in its latest financial statement.
3.13.2. The balance of endorsements/guarantees by the Company and its subsidiaries for a single enterprise reaches 20 percent or more of the Company’s net worth as stated in its latest financial statement.
3.13.3. The balance of endorsements/guarantees by the Company and its subsidiaries for a single enterprise reaches NT$10 millions or more and the aggregate amount of all endorsements/guarantees for, carrying value of equity method investment in, and balance of loans to, such enterprise reaches 30 percent or more of Company’s net worth as stated in its latest financial statement.
3.13.4. The amount of new endorsements/guarantees made by the Company or its subsidiaries reaches NT$30 million or more, and reaches 5 percent or more of the Company’s net worth as stated in its latest financial statement.
The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to subparagraph 4 of the preceding paragraph.
3.14. When the Company or its subsidiaries make endorsements and guarantees for subsidiaries whose net worth is less than one-half of the paid-in capital, the Company or its subsidiaries shall, in accordance with subparagraph 3.8, examine in detail the necessity and reasonableness of the endorsements and guarantees and the risk assessment of the targets, and shall establish subsequent relevant control measures to manage the risks that may arise from the endorsements and guarantees.
In the case of a subsidiary with shares having no par value or a par value other than NT$10, the calculation of paid-in capital shall be the sum of the share capital plus paid-in capital in excess of par shall be substituted.

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【 Appendix 5 】

LOTES CO., LTD. Procedures for Election of Directors and Supervisors (before Amendment)

Article 1

To ensure a just, fair, and open election of directors and supervisors, these Procedures are adopted pursuant to the “Securities and Exchange Act” amd “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”.

Article 2

Except as otherwise provided by law and regulation or by the Company’s articles of incorporation, elections of directors and supervisors shall be conducted in accordance with these Procedures.

Article 3

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:

The ability to make judgments about operations.
Accounting and financial analysis ability.
Business management ability.
Crisis management ability.
Knowledge of the industry.
An international market perspective.
Leadership ability.
Decision-making ability.

In addition to the requirements of the preceding paragraph, at least one among the board member of the Company must be an accounting or finance professional.

Article 4

Supervisors of the Company shall meet the following qualifications:

Integrity and a practical attitude.
Impartial judgment.
Professional knowledge.
Broad experience.
Ability to read financial statements.

In addition to the requirements of the preceding paragraph, at least one among the supervisors of the Company must be an accounting or finance professional.

Article 4-1

More than half of the directors and at least one supervisor position must be held by a person having neither one of the following relationships:

a spousal relationship

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2. a relationship within the second degree of kinship

Article 4-2

When the original selectees of directors and supervisors do not meet the conditions of the preceding Article, determination of which directors or supervisors are elected shall be made according to the following provisions:

When there are some among the directors who do not meet the conditions, the election of the director receiving the lowest number of votes among those not meeting the conditions shall be deemed invalid.
When there are some among the supervisors who do not meet the conditions, the provisions of the preceding subparagraph shall apply mutatis mutandis.
When there are some among the directors and supervisors who do not meet the conditions, the election of the supervisor receiving the lowest number of votes among those not meeting the conditions shall be deemed invalid.

Article 5

Elections of both directors and supervisors at the Company shall be conducted in accordance with the candidate nomination system and procedures set out in Article 192-1 of the Company Act.

The qualifications for the independent directors of the Company shall comply with relevant laws and regulations.

Article 6

The cumulative voting method shall be used for election of the directors and supervisors at the Company. Each share will have voting rights in number equal to the directors or supervisors to be elected, and may be cast for a single candidate or split among multiple candidates.

Independent directors and non-independent directors shall be elected together and the number of elected seats shall be calculated separately.

Article 7

The board of directors shall prepare ballots 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.

Article 8

The number of directors and supervisors will be as specified in the Company’s articles of incorporation. 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.

Article 9

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

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prepared by the board of directors and publicly checked by the vote monitoring personnel before voting commences.

Article 10

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. 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 paper, 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.

Article 11

A ballot is invalid under any of the following circumstances:

The ballot was not prepared by the board of directors.
A blank ballot is placed in the ballot box.
The writing is unclear and indecipherable or has been altered.
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.
Other words or marks are entered in addition to the candidate’s account name or shareholder account number (or identity card number) and the number of voting rights allotted.
The name of the candidate entered in the ballot is identical to that of another shareholder, but no shareholder account number or identity card number is provided in the ballot to identify such individual.

Article 12

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 or supervisors and the numbers of votes with which they were elected, shall be announced by the chair on the site.

Article 13

The board of directors of the Company shall issue notifications to the persons elected as directors or supervisors.

Article 14

These Procedures, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

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`【` Appendix 6 `】`

The effect of the gratis placement on the Company's operating results, earnings per share and return on investment for shareholders:

The Company has not published its financial forecast for 20 21, therefore, it is not applicable.

`【` Appendix 7 `】`

LOTES CO., LTD. Shareholding Status of the Directors

Title	Name	Shareholding	Shareholding
		Shares	Percentage(Note)
Chairperson	CHIA-MING Investment Co., Ltd. Representative: Zhu, De-Xiang	9,797,037	9.47%
Director	CHIA-MING Investment Co., Ltd. Representative: He, De-You	9,797,037	9.47%
Director	Cai,Ming-Rui	5,954	0.01%
Director	Jin,Chang-Min	0	0%
Independent Director	Xie, Jia-Ying	0	0%
Independent Director	Hu, Rui-Qing	0	0%
Subtotal of the Shares Held by the Directors(Number of Shares)		9,802,991	9.48%
The Minimum Number of Shares Shall Be Held by the Directors		8,000,000	6%
Supervisor	Zheng,Ming-Song	0	0%
Supervisor	Jin Ling Investment Co., Ltd. Representative: Zhang, Kun-Yao	10,956,237	10.59%
Supervisor	Yang,Wen-Ming	0	0%
Subtotal of the Shares Held by the Supervisors(Number of Shares)		10,956,237	10.59%
The Minimum Number of Shares Shall Be Held by the Supervisors		800,000	0.6%
Total of the Shares Held by the Directors and Supervisors (Number of Shares)		20,759,228	20.07%

Note: The share capital as of April 24, 2021, the date of cessation of transfer, was 103,477,900 shares.

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AI assistant

LOTES — AGM Information 2021

52339_rns_2021-08-02_728a55d1-8907-4159-a3d3-f5df6b73122e.pdf

LOTES CO., LTD

2021 Annual General Shareholders’ Meeting Meeting Agenda

Table of Contents

Attachments

Appendices

LOTES CO., LTD.

I. Call the Meeting to Order

II. Chairperson Remarks

VI. Elections

LOTES CO., LTD.

Agenda of 2021 Annual General Meeting of Shareholders

I. Call the Meeting to Order

II. Chairperson Remarks

III. Reports

IV. Proposals

V. Discussion

VI. Elections

VII. Questions and Motions

VIII. Adjournment

Management Presentation (Company Reports)

Report No.1:

Explanation:

Report No.2:

Explanation:

Report No.3:

Report No.4:

Report No.5:

Explanation:

Proposals

1. Proposed by the Board

Proposal:

Explanation:

Resolution:

2. Proposed by the Board

Proposal:

Explanation:

Resolution:

Discussion

1. Proposed by the Board

Proposal:

Explanation:

Resolution:

2. Proposed by the Board

Proposal:

Explanation:

Resolution:

3. Proposed by the Board

Proposal:

Explanation:

Resolution:

4. Proposed by the Board

Proposal:

Explanation:

Resolution:

5. Proposed by the Board

Proposal:

Explanation:

Resolution:

6. Proposed by the Board

Proposal:

Explanation:

Resolution:

Elections

1. Proposed by the Board

Proposal:

Explanation:

Voting Results:

Questions and Motions

Adjournment

【 Attachment 1 】

Annual Business Report

I. Business Status Report 2020

(i) Operational overview

(ii) Business plan implementation results and profitability analysis

1. Business plan implementation results

2. Analysis of financial income and expenditures and profitability

3. Research and development status

LOTES AGM Information 2021

`【` Attachment 6 `】`

`【` Attachment 8 `】`