Stock code:3533

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LOTES CO., LTD

2022 Annual General Meeting of Shareholders Meeting Agenda

Meeting type: Physical conference held.

Time: 9:00 a.m. on Friday, June 17, 2022

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

(Dawulun (with Reifang) Industrial Parks Service 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.

	Pages
I. Procedure for the 2022 Annual Meeting of Shareholders	1
II. Agenda of Annual Meeting of Shareholders for Year 2022	2
1. Management Presentation (Company Reports)	3
2. Proposals	4
3. Discussion	6
4. Extemporary Motion(s)	6
5. Adjournment	6
III. Attachment
1.Annual Business Report	7
2. Report of Audit Committee	9
3. Details of Issuance and Enforcement of Corporate Bonds	10
4. Changes in the Company's shareholding in LeRain Technology Co., Ltd.	11
5. 2022 Independent Auditor’s Report and Financial Statement	12
6. Earning Distribution Table	26
7. 2021 Cash Capital Increase Issue and First Domestic Unsecured Convertible Bonds
Comparison table of before and after the change of the scheme	27
8. Comparison Table of Articles of Incorporation	29
9. Comparison Table of Rules of Procedure for Shareholder Meetings	30
10. Comparison Table of Operational Procedures for Acquisition and Disposal of Assets	36
IV. Annex
1. Articles of Incorporation (Before Amendment)	39
2. Rules of Procedure for Shareholders Meetings (before Amendment)	43
3. Operational Procedures for Acquisition and Disposal of Assets (Before amendment)	47
4. Effect of the allotment on the Company's operating performance, earnings per share
and return on shareholders' investment	55
5. Shareholding Status of the Directors	55

LOTES CO., LTD.

Procedure for the 2022 Annual Meeting of Shareholders

I. Call the Meeting to Order

II. Chairperson Remarks

III. Management Presentation (Company Reports)

IV. Proposals

V. Discussion

VI. Extemporary Motion(s)

VII. Adjournment

LOTES CO., LTD.

Agenda of Annual Meeting of Shareholders for Year 2022

Meeting type: In-person Meeting

Time: 9:00 a.m. on Friday, June 17, 2022

Venure: 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. Management Presentation (Company Reports)

2021 Business Report
2021 Inspection Report of Supervisors
Report on allocation of employees’ and directors’ and supervisors’ compensation for 2021
Report on the Implementation of the Company's First Domestic Unsecured Convertible Bond Issuance in 2021
Report on the release of shares of the Company's planned listed (over-the-counter) subsidiary

IV. Proposals

Adoption of the 2021 Business Report and Financial Statements
Adoption of the Proposal for Distribution of 2021 Profits
Change on the plan of the Company's First Domestic Unsecured Convertible Bond Issuance in 2021.

V. Discussion

Amendment to the Company’s “Articles of Incorporation”
Amendment to the Company’s “Rules of Procedure for Shareholder Meetings”
Amendment to the Company’s “Operational Procedures for Acquisition and Disposal of Assets”

VI. Extemporary Motion(s)

VII. Adjournment

Management Presentation (Company Reports)

Report No.1:

2021 Business Report

Explanation:

For the 2021 Business Report, please refer to Attachment 1 (page 7-8 hereof).

Report No.2:

2021 Report of Audit Committee

Explanation:

For the Report of Audit Committee, please refer to Attachment 2 (page 9 hereof).

Report No.3:

Report on allocation of employees’ and directors’ and supervisors’ compensation for 2021

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$122,062,000 and directors’ and supervisors’ compensation of NT$4,480,000 for 2021. The amount appropriated as noted above is no different from the expense recognized in 2021.
All of the compensation allocated to employees and directors and supervisors was paid in cash.

Report No.4:

Report on the Implementation of the Company's First Domestic Unsecured Convertible Bond Issuance in 2021

Explanation:

The Company issued its first domestic unsecured convertible bonds (hereinafter referred to as "the Bonds") with a total amount of NT$1 billion for the purpose of replenishing its operations capital and constructing office buildings and warehouses, as approved by the Financial Supervisory Commission (FSC) in letter No. 11003494281 dated July 23, 2021. The convertible bonds were raised and listed on August 19, 2021.
Please refer to Attachment 3 for the conditions of this conversion bond issue, the circumstances of conversion and the implementation of the capital utilization plan. (page 10 hereof)

Report No.5:

Report on the release of shares of the Company's planned listed (over-the-counter) subsidiary

Explanation:

Please refer to Attachment 4 for information on the release of shares of our planned listed (over-the-counter) subsidiary, LeRain Technology Co., Ltd. (page 11 hereof)

Proposals

1. Proposed by the Board

Proposal:

Adoption of the 2021 Business Report and Financial Statements.

Explanation:

The Company’s 2021 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 the Company on March 21, 2021, were submitted to the supervisors for review and completion, with the report issued on record.
The Business Report and Financial Statements has been approved by Audit Committee.
For the Annual Business Report 2021, please refer to Attachment 1 (page 7-8 hereof); for the audit report made by a certified public accountant (CPA) and financial statement, please refer to Attachment 5 (pages 12-25 hereof).
Please review and ratify

Resolution:

2. Proposed by the Board

Proposal:

Adoption of the Proposal for Distribution of 2021 Profits.

Explanation:

The Company’s net profit after tax for 2020 was NT$3,472,201,124, and the statement of appropriation of earnings was approved by the Board of the Company on March 21, 2022, and tendered to the audit committee for approval.
For the earnings distribution table, please refer to Attachment 6 (page 26 hereof).
The Board 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:

3. Proposed by the Board

Proposal:

Change on the plan of the Company's First Domestic Unsecured Convertible Bond Issuance in 2021.

Explanation:

1. The Company's 2021 cash capital increase and the issuance of the first domestic unsecured convertible bonds will obtain a total amount of NT$2,234,473 thousands. The funds were

expected to replenish working capital, construction of office buildings and warehousing, and is expected to save on interest expenses and rental expenses and improve the overall operational management efficiency of the company.

2. The Company originally planned to invest NT$480,000 thousands for the construction of an office building and warehouse, but the time required to relocate the tenants of the old factory at the site was longer than expected and the time required for the application for various licenses and environmental assessment approval for the demolition of the old factory and the construction of the factory was significantly longer than originally estimated. In order to make effective use of the funds, it is proposed that the entire unused amount of NT$480,000 thousands be converted into working capital to meet the Company's daily working capital requirements. In view of the positive impact of the adjustment on the Company's future financial operations, the proposed change of plan is required by law.

3. This proposal has been approved by the Board on March 21, 2022. Comparison table of before and after the change of the scheme are set out in Attachment 7.( page 27-28 hereof)

Resolution:

Discussion

1. Proposed by the Board

Proposal:

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

Explanation:

It is proposed to amend certain provisions of the Company's Articles of Association in order to comply with the amendment of Section 172-2 of the Companies Act regarding adding relevant provisions of the Shareholders' Meeting convened in a form of video conderence.
For the comparison table of the articles before and after amendment, please refer to Attachment 8 (page 29 hereof)

Resolution:

2. Proposed by the Board

Proposal:

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

Explanation:

In accordance with the letter No. 11100042501 issued by Taiwan Stock Exchange (TSE), the relevant provisions of the shareholders' meeting of the Company are proposed to be amended by adding text regarding Shareholders' Meeting convened in a form of video conderence.
For the comparison table of the articles before and after amendment, please refer to Attachment 9 (page 30-35 hereof)

Resolution:

3. Proposed by the Board

Proposal:

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

Explanation:

In accordance with the amended provisions issued by Financial Supervisory Commission (FSC) via letter No. 1110380465 dated January 28, 2022 and the Company's practical operational needs, the Company intends to revise some of the provisions of the " Operational Procedures for Acquisition and Disposal of Assets ".
For the comparison table of the articles before and after amendment, please refer to Attachment 10 (page 36-38 hereof)

Resolution:

Extemporary Motion(s)

Adjournment

`【` Attachment 1 `】`

Annual Business Report

I. Business Status Report 2021

(i) Operational overview

The Company’s consolidated operating revenue for 2021 was NT$21.391 billion, up 23.75% from NT$17.291 billion in 2020, and consolidated net income after tax was NT$3.472 billion, up 27.09% from NT$2.732 billion in 2020, translating to an after-tax earnings per share of NT$33.32.

Looking back at 2021, the global economy continued to be affected by 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 2021 still saw stable growth and set a new record high since the establishment of the Company. On the profitability side, although being affected by continued increase in international raw material prices, the increase in the scale of operations, improved penetration of new products and enhanced production efficiency also contributed to a remarkable profit performance of NT$33.32 per share after tax in 2021, up 27.09% from 2019.

(ii) Business plan implementation results and profitability analysis

1. Business plan implementation results

Unit: NT$ thousands

Item	2021	2020	Amount of Increase (Decrease)	Percentage Increase (Decrease)
DesktopComputer	21,391,916	17,291,332	4,100,584	19.17%
Operatingcost	12,834,611	10,361,137	2,473,474	19.27%
Grossprofit	8,557,305	6,930,195	1,627,110	19.01%
Netprofit after tax	3,472,201	2,732,361	739,840	21.31%

2. Analysis of financial income and expenditures and profitability

	Item		2021	2020
Profitability (%)	Return on assets		15.29	15.44
	Return on equity		22.87	21.58
	Percentage in paid-in capital	Operating profit	411.33	358.30
		Gross profit before tax	428.40	354.66
	Profir margin		16.23	15.80
	Earnings per share after tax		33.32	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.

Report of Audit Committee

The Board had prepared and delivered the 2021 Business Report, Statement of Earnings Distribution and Financial Statements. The Financial Statements was confirmed by accountants Zhong, Dan-Dan and Li, Feng-Hui at KPMG Taiwan, and a review report was issued thereby. Inspections of the aforementioned reports and statements were conducted by the Committee and was found no inconsistency. The report was issued in accordance with Article 219 of the Company Act.

To the 2022 Regular Shareholders Meeting, LOTES CO., LTD.

Convenor of Audit Committee: Wu, Chang-Hsiu

`【` Attachment 3 `】`

LOTES CO., LTD. Details of Issuance and Enforcement of Corporate Bonds

Type of Corporate Bonds	The Company's First Domestic Unsecured Convertible Bonds (LOTES 1/Code 35331)
Issue Date	August 19, 2021
Denomination	NT$100,000 each bond
Total Amount	Total 10,000 bonds are issued, in a total of NT$1 billion
Interest Rate	Annual interest rate 0%
Maturity	Three-year maturity/ Maturity date: 19 August, 2024
Reason for raising	To replenish working capital and construction of office buildings and warehouses
Conversion Price	Converted at NT$ 563.2 at issuance, currently converted at NT$ 547.5
Repayment Method	The Company shall repay the Bonds held by the bondholders in cash within seven business days from the day after the maturity of the bonds, at their face value, unless the bonds are converted into common shares of the Company by the bondholders in accordance with Article 10 of the Issue and Conversion Act, or redeemed by the Company in advance in accordance with Article 17 of the Act, or purchased and cancelled by the Company from the securities dealer's office.
Terms of Redemption or Early Settlement	For details, please refer to the Rules Governing the Issuance and Conversion of the Company's First Domestic Unsecured Convertible Bonds.
Subject matter of conversion	The Company's common stock
Circumstances of conversion	As of the closing date of April 19, 2022, 1,160 bonds had been converted.
Implementation of the capital utilisation plan	The Company's 2021 cash capital increase and the issuance of the first domestic unsecured convertible bonds will obtain a total amount of NT$2,234,473 thousands, which is expected to be expended in the third quarter of 2021. On September 17, 2021 and August 19, 2021, the Company has raised NT$2,234,473 thousands from issuance of new shares and the issuance of first domestic unsecured convertible bonds. As of December 31, 2021, the Company has used NT$1,754,473 thousands and NT$0 thousands to replenish its working capital and to construct office buildings and warehouses, respectively. The Company originally planned to invest NT$480,000 thousands for the construction of an office building and warehouse, but the time required to relocate the tenants of the old factory at the site was longer than expected and the time required for the application for various licenses and environmental assessment approval for the demolition of the old factory and the construction of the factory was significantly longer than originally estimated. On March 21, 2022, the Board resolved to change the capital utilization plan to fully utilize the unused NT$480,000 thousands as working capital. The Company will use the remaining funds to replenish its working capital in the second quarter of 2022 in accordance with the changed plan. The underwriter, Yuanta Securities Co., Ltd., has confirmed that there are no material irregularities.

`【` Attachment 4 `】`

Changes in the Company's shareholding in LeRain Technology Co., Ltd.

Date	2021/09/15	2022/04/15
Purpose and manner of release of shares	In order to achieve the goal of retaining and motivating talents, and to strengthen the core technical team of LeRain.	Introduction of strategic shareholders
Issue (transfer) price	NT$ 10	NT$ 70
Approval Date by Audit Committee	2021/08/03	2022/01/27
Approval Date by the Board	2021/08/03	2022/01/27
Subject of transfer of shareholding	Employee	Strategic Partners
Total number of shares	11,192,941 shares	1,215,000 shares
Percentage of shareholding of the Company prior to the issuance (transfer)	26.80%	16.40%
Percentage of shareholding of the Company after the issuance (transfer)	16.40%	15.74%
Basis for Released Share Price Assessment	Expert opinion of reasonableness of price issued by the accountants	Expert opinion of reasonableness of price issued by the accountants
Effect on the Company's shareholders' equity	No prejudice to the interests of the original shareholders	No prejudice to the interests of the original shareholders

`【` Attachment 5 `】`

Independent Auditor’s Report

To the Board of Lotes Co., Ltd.

Audit opinion

We have audited the Balance Sheet of Lotes Co., Ltd. (hereinafter referred to as Lotes) as of December 31, 2021 and 2020, the Statement of Comprehensive Income as of January 1 to December 31, 2021 and 2020 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, 2021 and 2020 in Lotes and the financial performance and consolidated cash flow of January 1 to December 31, 2021 and 2020 prepared according to Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis of the audit opinions

The audit 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). 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 2021 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 IV (15) to the parent company only financial statements for the accounting policy in terms of income recognition. Please refer to Note VI (13) to the parent company only financial statements for the refund liability. Please refer to Note VI (21) to the parent company only 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 procedures:

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 IV (7) for the accounting policy of inventory evaluation. Please refer to Note V in the parent company only financial statements for the accounting estimates and assumed uncertainties of the inventory evaluation. Please refer to Note VI (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 the audit committee) 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 2021 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 Authority of Securities CHIN-KUAN-CHENG-SHEN-T Approval Certificate No. : ZU No. 1000011652 (88) TAI-TSAI-CHENG (VI) No. 18311 March 21, 2022

Lotes Co., Ltd.

Balance Sheet

December 31, 2021 and 2020

Unit: NT$ 1,000

Dec. 31, 2021 Amount % $ 779,913 4 - - 1,911 - 5,812,399 28 32,627 - 22,484 - 160 - 995,854 5 2,720 -	Dec. 31, 2021 Amount % $ 552,240 3 41,541 - 13,402 - 8,391 - 1,512,055 7 293,440 1 2,166 - 350,031 2 59 - 195,105 1 7,441 -	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 -
7,648,068 37
3,370 - 9,500 - 12,624,489 61 58,354 - 59 - 300,256 2 82,534 - 66,302 - 9,349 -	2,975,871 14	2,845,841 17
	911,927 5 45,220 - 6,038 - 744 -	- - 49,258 - - - 744 -
	963,929 5	50,002 -
	3,939,800 19	2,895,843 17
	1,059,779 5 1,167 - 5,283,698 25 11,200,170 54 (682,333) (3)	1,034,779 6 - - 3,958,247 24 9,101,144 56 (594,972) (3)
13,154,213 63
$ 20,802,281 100	16,862,481 81	13,499,198 83
	$ 20,802,281 100	16,395,041 100

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

Chairperson: CHU, TE-HSIANG

Accounting Manager: LIU, HSIN-HSIA

Lotes Co., Ltd.

Statement of Comprehensive Income

From January 1 to December 31, 2021 and 2020

Unit: NT$ 1,000

2021	% 100 81	2020	％ 100 78
Amount $ 14,151,210 11,411,428		Amount 11,362,435 8,817,635
2,739,782	19	2,544,800	22
389,708 308,977 55,862 (1,706)	3 2 - -	312,675 295,923 53,509 (1,310)	3 3 - -
752,841	5	660,797	6
1,986,941	14	1,884,003	16
1,746 99,908 (45,618) (6,747) (1,037) 1,905,258	- 1 - - - 13	10,165 62,514 (111,250) (1,420) 1,317 1,294,043	- 1 (1) - - 11
1,953,510	14	1,255,369	11
3,940,451 468,250	28 3	3,139,372 407,011	27 4
3,472,201	25	2,732,361	23
3,851 (4,900) (359) 770	- - - -	(7,598) - 403 (1,520)	- - - -
(2,178)	-	(5,675)	-
(82,102) -	(1) -	45,017 -	- -
(82,102)	(1)	45,017	-
(84,280)	(1)	39,342	-
$ 3,387,921	24	2,771,703	23
$	33.32		26.41
$	32.69		26.34

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

Accounting Manager: LIU, HSIN-HSIA

Unit: NT$ 1,000

Lotes Co., Ltd.

Statement of Change in Equity

From January 1 to December 31, 2021 and 2020

	Share capital		Capital reserves		Retained earnings		Other equityitems	Other equityitems	Total equity
							Exchange difference between foreign operating office’s statement	Unrealized gain or loss on financial assets measured at FVTOCI
Share capital for ordinary shares	Certificates of bond-to-stock conversion	Total		Legal reserve	Special reserve	Undistributed earnings
$ 1,034,779 - -	- - -	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 - -	- - -	1,034,779 - -	3,958,247 - -	1,299,543 - -	650,533 - -	7,151,068 3,472,201 3,081	(586,953) (8,019) - - (82,102) (5,259)		13,499,198 3,472,201 (84,280)
-	-	-	-	-	-	3,475,282	(82,102) (5,259)		3,387,921
- - - - - - 25,000 -	- - - - - - - 1,167	- - - - - - 25,000 1,167	- - - 183,236 5,460 24,931 1,050,971 60,853	271,615 - - - - - - -	- (55,561) - - - - - -	(271,615) 55,561 (1,376,256) - - - - -	- - - - - - - - - - - - - - - -		- - (1,376,256) 183,236 5,460 24,931 1,075,971 62,020
$ 1,059,779	1,167	1,060,946	5,283,698	1,571,158	594,972	9,034,040	(669,055) (13,278)		16,862,481

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

Chairperson: CHU, TE-HSIANG

Accounting Manager: LIU, HSIN-HSIA

Lotes Co., Ltd.

Statement of Cash Flows

From January 1 to December 31, 2021 and 2020

Unit: NT$ 1,000

Cash flows from (used in) operating activities: Net profit before tax Items of adjustment: Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit loss (gain) Interest expense Interest income Share of the profit from subsidiaries, associates and joint ventures accounted for using equity method Net loss on financial assets measured at FVTPL Inventory valuation and disposal loss Profit from the disposal and scaping of property, plant and equipment Compensation expense for employee stock options Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Decrease (increase) in notes receivable Increase in accounts receivable Decrease (increase) in other receivables Increase in inventory Decrease (increase) in advance payment Total net change in the assets related to operating activities Net change in the liabilities related to operating activities: Increase in contract liabilities Increase (decrease) in notes payable Decrease in accounts payable Increase (decrease) in other payables Decrease in provision for liabilities Increase (decrease) in other current liabilities Increase in refund liabilities Decrease 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 Interest received Interest paid Income taxes paid Cash flows from (used in) operating activities Cash flows in investing activities: Acquisition of financial assets measured at FVTOCI Disposal of financial assets measured at FVTPL Acquisition of investment accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase in other receivables Decrease in other receivables Increase in intangible assets Acquisition of investment property (Increase) decrease in other non-current assets Net cash outflow from investment activities Cash flows in financing activities: Increase in short-term loans Issuance of corporate bonds Repayment of lease principal Issuance of cash dividends Cash capital increase Cash flows from (used in) financing activities Increase (decrease) in cash and cash equivalents Beginning balance of cash and cash equivalents Ending balance of cash and cash equivalents	2021 $ 3,940,451 7,020 25,901 (669) 6,747 (1,746) (1,905,258) (28,565) 21,612 (467) 24,931	2020 3,139,372 7,274 11,778 (2,627) 1,420 (10,165) (1,294,043) (2,080) 29,666 (136) -
	(1,850,494)	(1,258,913)
	574 (1,526,232) (527) (306,989) 1,830	(810) (403,834) 17,123 (149,055) (910)
	(1,831,344)	(537,486)
	20,149 10,690 (525,386) (5,760) (187) (425) 33,338 -	6,394 (16,222) (233,064) 49,829 (69) 691 4,511 (199)
	(467,581)	(188,129)
	(2,298,925)	(725,615)
	(4,149,419)	(1,984,528)
	(208,968) 1,987 (3,065) (420,739)	1,154,844 10,763 (1,420) (339,638)
	(630,785)	824,549
	(14,400) 27,945 (570,421) (5,852) 467 - 86,468 (10,852) (1,516) (3,322)	- - (14,385) (1,181) 252 (966) - (58,424) (17,923) 9,435
	(491,483)	(83,192)
	552,240 1,152,983 (59) (1,376,256) 1,075,971	- - (59) (1,086,518) -
	1,404,879	(1,086,577)
	282,611 497,302	(345,220) 842,522
	$ 779,913	497,302

(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 Lotes Co., Ltd.

Audit opinion

We have audited the Consolidated Balance Sheet of Lotes Co., Ltd. and subsidiaries (Lotes Group) as of December 31, 2021 and 2020, the Consolidated Statement of Comprehensive Income as of January 1 to December 31, 2021 and 2020 as well as the Consolidated Statement of Changes in Equity, Consolidated 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, 2021 and 2020 in Lotes Group and the consolidated financial performance and consolidated cash flow of January 1 to December 31, 2021 and 2020 prepared according to Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and Interpretations approved by the Financial Supervisory Commission and issued into effect. Basis of the audit opinions

The audit 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). 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 Group 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 Group’s consolidated financial statements of fiscal year 2021 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 IV (15) to the consolidated financial statements for the accounting policy in terms of income recognition. Please refer to Note VI (16) to the consolidated financial statements for the refund liability. Please refer to Note VI (24) 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 Group. 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 Group. Corresponding audit procedures:

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

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 Group. Corresponding audit procedure:

Other Matters Lotes Co., Ltd. has prepared its parent company only financial statements for fiscal years 2021 and 2020, and we have issued an unqualified audit report thereon for your information. 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 International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and Interpretations approved by the Financial Supervisory Commission and issued into effect 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 Group’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 Group or suspend its business operation or there is no alternative practical and feasible solution other than liquidation or business suspension.

The governing unit (including the audit committee) at Lotes Group 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 Group.
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 Group’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 Group 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.
We obtained sufficient and appropriate audit evidence about the financial information of the constituent entities of the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and execution of the Group's audits and for forming an opinion on the Group's audits.
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 Group’s consolidated financial statements for fiscal year 2021 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 Authority of Securities CHIN-KUAN-CHENG-SHENApproval Certificate No. : TZU No. 1000011652 (88) TAI-TSAI-CHENG (VI) No. 18311 March 21, 2022

Lotes Co., Ltd. And Subsidiaries

Consolidated Balance Sheet

December 31, 2021 and 2020

Unit: NT$ 1,000

Dec. 31, 2021 Amount % $ 3,303,062 12 154,124 1 1,456 - 61,292 - 8,736,734 33 459,211 2 362 - 4,091,387 15 143,291 1 - - 9,018 -	Dec. 31, 2021 Amount % $ 1,142,178 4 97,494 - 16,402 - 2,613,359 10 1,998,938 8 670,568 3 220,742 1 195,105 1 34,715 - 14,805 -	Dec. 31, 2020 Amount % - - 91,659 1 3,574 - 2,501,155 13 1,206,695 6 505,527 3 71,971 - 161,767 1 33,197 - 5,335 -
	7,004,306 27	4,580,880 24
	911,927 4 29,600 - 45,220 - 31,342 - 33,906 - 285,847 1 22,539 -	- - 18,661 - 49,258 - 21,037 - 27,054 - 104,279 1 2,167 -
16,959,937 64
3,370 - 30,003 - 6,882,186 26 1,028,489 4 335,869 1 205,584 1 151,467 1 822,486 3
	1,360,381 5	222,456 1
	8,364,687 32	4,803,336 25
	1,059,779 4 1,167 - 5,283,698 20 11,200,170 42 (682,333) (3)	1,034,779 5 - - 3,958,247 21 9,101,144 (594,972) (3)
9,459,454 36
	16,862,481 63	13,499,198 70
	1,192,223 5	980,361 5
$ 26,419,391 100	18,054,704 68	14,479,559 75
	$ 26,419,391 100	19,282,895 100

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

Chairperson: CHU, TE-HSIANG

Accounting Manager: LIU, HSIN-HSIA

Lotes Co., Ltd. and Subsidiaries Consolidated Statement of Comprehensive Income From January 1 to December 31, 2021 and 2020

Unit: NT$ 1,000

2021	% 100 60	2020	% 100 60
Amount $ 21,391,917 12,834,611		Amount 17,291,332 10,361,137
8,557,306	40	6,930,195	40
748,932 1,409,600 2,030,576 8,931	4 7 9 -	642,420 1,117,631 1,459,647 2,845	4 6 8 -
4,198,039	20	3,222,543	18
4,359,267	20	3,707,652	22
13,994 - 324,926 (128,648) (28,304) (1,037)	- - 2 (1) - -	28,789 13,055 214,267 (276,469) (18,609) 1,317	- - 1 (2) - -
180,931	1	(37,650)	(1)
4,540,198 1,021,167	21 5	3,670,002 834,413	21 5
3,519,031	16	2,835,589	16
3,851 (5,077) 770	- - -	(7,598) 372 (1,520)	- - -
(1,996)	-	(5,706)	-
(82,222) (39)	- -	46,886 (1,733)	- -
(82,183)	-	48,619	-
(84,179)	-	42,913	-
$ 3,434,852	16	2,878,502	16
$ 3,472,201 46,830	16 -	2,732,361 103,228	15 1
$ 3,519,031	16	2,835,589	16
$ 3,387,921 46,931	16 -	2,771,703 106,799	16 -
$ 3,434,852	16	2,878,502	16
$	33.32		26.41
$	32.69		26.34

(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 Subsidiaries

Consolidated Statement of Changes in Equity From January 1 to December 31, 2021 and 2020

Unit: NT$ 1,000

			Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent				Non-controlling interests	Total equity
	Share capital		Capital reserves		Retained earnings		Other equity		Total equity attributable to owners of parent
							Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at FVTOCI
Share capital for ordinary shares	Certificates of bond-to-stock conversion	Total		Legal reserve	Special reserve	Unappropriated retained earnings
$ 1,034,779 - -	- - -	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) - - - (10,140)	- - - - - - - - - - - - - 10,140		- - (1,086,518) (1,313) - - -	- - - - 192,780 (49,117) -	- - (1,086,518) (1,313) 192,780 (49,117) -
1,034,779 - -	- - -	1,034,779 - -	3,958,247 - -	1,299,543 - -	650,533 - -	7,151,068 3,472,201 3,081	(586,953) (8,019) - - (82,102) (5,259)		13,499,198 3,472,201 (84,280)	980,361 46,830 101	14,479,559 3,519,031 (84,179)
-	-	-	-	-	-	3,475,282	(82,102) (5,259)		3,387,921	46,931	3,434,852
- - - - - - 25,000 - - -	- - - - - - - 1,167 - -	- - - - - - 25,000 1,167 - -	- - - 183,236 5,460 24,931 1,050,971 60,853 - -	271,615 - - - - - - - - -	- (55,561) - - - - - - - -	(271,615) 55,561 (1,376,256) - - - - - - -	- - - - - - - - - - - - - - - - - - - -		- - (1,376,256) 183,236 5,460 24,931 1,075,971 62,020 - -	- - - - - - - - 237,061 (72,130)	- - (1,376,256) 183,236 5,460 24,931 1,075,971 62,020 237,061 (72,130)
$ 1,059,779	1,167	1,060,946	5,283,698	1,571,158	594,972	9,034,040	(669,055) (13,278)		16,862,481	1,192,223	18,054,704

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

Chairperson: CHU, TE-HSIANG

Accounting Manager: LIU, HSIN-HSIA

Lotes Co., Ltd. and Subsidiaries

Consolidated Statement of Cash Flows

From January 1 to December 31, 2021 and 2020

Cash flows from (used in) operating activities: Net profit before tax Adjustments: Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit loss (gain) Net loss (gain) on financial assets or liabilities at FVTPL Interest expense Interest income Dividend income Compensation expense for share-based payment Loss (gain) on disposal of property, plant and equipment Inventory valuation and disposal loss Gain recognized in bargain purchase transaction Other adjustments Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Increase in notes receivable Increase in accounts receivable Increase in other receivables Increase in inventory Increase in advance payment Decrease (increase) in other current assets Decrease in other financial assets Total changes in operating assets Changes in operating liabilities: Increase (decrease) in contract liabilities Decrease in notes payable Increase in accounts payable Increase in other payables Decrease in provisions Decrease in other current liabilities Increase in Refund liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities : Disposal of financial assets measured at FVTOCI Acquisition 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 Acquisition of intangible assets Net cash inflows from business combination Acquisition of investment property Disposal of investment property Increase in other non-current assets Net cash flows from (used in) investing activities Cash flows from (used in) financing activities Increase (decrease) in short-term loans Issuance of corporate bonds Borrowings of long-term loans Repayments of long-term loans Payments of lease liabilities Increase in other non-current liabilities Cash dividends paid Cash dividends paid to non-controlling interests Cash capital increase Changes in non-controlling interests Changes in subsidiaries, associates and joint ventures accounted for using equity method Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	Unit: NT$ 1,000 2021 2020 $ 4,540,198 3,670,002 1,503,974 1,115,332 51,307 26,245 9,968 1,528 (25,795) (55,053) 28,304 18,609 (13,994) (28,789) (6,119) (1,341) 25,077 7,795 3,728 (2,446) 92,408 48,028 - (13,055) (2,472) 19	Unit: NT$ 1,000 2021 2020 $ 4,540,198 3,670,002 1,503,974 1,115,332 51,307 26,245 9,968 1,528 (25,795) (55,053) 28,304 18,609 (13,994) (28,789) (6,119) (1,341) 25,077 7,795 3,728 (2,446) 92,408 48,028 - (13,055) (2,472) 19
	1,666,386	1,116,872
	(7,187) (1,904,786) (107,813) (1,624,767) (81,083) (2,353) 87,320	(30,249) (788,350) (133,684) (486,885) 87,437 3,898 4,960
	(3,640,669)	(1,342,873)
	5,835 12,828 112,204 809,880 (187) 1,518 33,338	37,431 (23,091) 539,618 203,974 (69) 9,860 4,511
	975,416	772,234
	(2,665,253)	(570,639)
	(998,867)	546,233
	3,541,331 18,588 6,119 (24,622) (851,646)	4,216,235 26,790 1,341 (18,616) (756,926)
	2,689,770	3,468,824
	- (14,400) (174,504) 166,435 (3,631,931) 18,589 (101,381) (96,793) - 30,446 (284,138)	4,860 (20,186) (125,418) 297,545 (1,774,297) 38,123 (80,912) (59,647) (17,923) - (310,189)
	(4,087,677)	(2,048,044)
	1,142,178 1,152,983 29,600 (9,191) (356,459) 4,669 (1,376,256) (72,130) 1,075,971 236,940 5,435	(66,660) - 20,035 (125,583) (114,174) (75,956) (1,086,518) (49,117) - 137,365 (5,377)
	1,833,740	(1,365,985)
	(82,183) 353,650 2,949,412	48,623 103,418 2,845,994
	$ 3,303,062	2,949,412

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

Accounting Manager: LIU, HSIN-HSIA

`【` Attachment 6 `】`

Lotes Co., Ltd.

Earning Distribution Table 2021

Unit: NT$

2021	Unit: NT$
Item	Amount
Unallocated earnings at the beginning of 2021	5,558,761,225
Add: Remeasurement of net defined benefit liabilities	3,080,890

Adjusted opening undistributed earnings for 2020	5,561,842,115
Add: Net income after tax for 2020	3,472,201,124
Less: Supplementary provision for special reserve due to decrease in equity in previous years (Note 1)	87,364,087
Less: 10% legal reserve	347,528,201
Total available-for-distribution earnings	8,599,150,951

Less: Dividends to shareholders - cash (NT$16per share)	1,695,646,400

Undistributed earnings at the end of 2021	6,903,504,551
Note 1: In 2021, a net decrease of NT$682,333,048 was recorded in other shareholders' equity, and the same amount of special reserve should be provided from the current profit or loss and prior period's undistributed earnings. However, a special reserve of NT$594,968,961 was set aside from prior period's profit and loss in 2020, therefore, a special reserve of NT$87,364,087 should be provided. Note 2: The dividend distribution rate was calculated based on the number of 105,977,900 shares entitled to participate in the distribution as of December 31,2021.

Chairperson: CHU, TE-HSIANG Manager: HO, TE-YU Accounting Manager: LIU, HSIN-HSIA

`【` Attachment 7 `】`

Lotes Co., Ltd. 2021 Cash Capital Increase Issue and First Domestic Unsecured Convertible Bonds Comparison table of before and after the change of the scheme

Unit: NT$ thousands

Before change	Before change	After change	After change	Difference	Difference
Item	Funds required	Item	Funds required
A.To increase working capital	1,754,473	A.To increase working capital	2,234,473	480,000	(21.48)%
B.Construction of office buildingand warehousing	480,000	-	`－`	(480,000)	21.48%
Total	2,234,473	Total	2,234,473	`－`	`－`
Reasons for Differences
1. 480,000 increase in Item A, 480,000/2,234,473=21.48%>20%`：` To meet the demand of Company’s expansion and to save interest expense. 2. Decrease in item B by 480,000, 480,000/2,234,473=21.48%>20%`：` The time required to relocate the tenants of the old factory at the site has increased, and the time required to apply for various licenses and environmental assessments for the demolition of the old factory and the construction of the factory has increased significantly compared to the original estimate. In order to make effective use of the funds, it is proposed that the entire unused amount of NT$480,000 thousands be used to replenish the working capital to meet the Company's daily working capital requirements.

- Progress on the implementation before change

Unit: NT$ thousands

Item	Complettion Time	Funds required	Anticipated Progress of Use of Funds	Anticipated Progress of Use of Funds	Anticipated Progress of Use of Funds	Anticipated Progress of Use of Funds	Anticipated Progress of Use of Funds	Anticipated Progress of Use of Funds	Implementation (As of Dec.31, 2021)	Implementation (As of Dec.31, 2021)
			2021		2022
			Q3	Q4	Q1	Q2	Q3	Q4	Amount used	Progress
To increase working capital	2021 Q4	1,754,473	870,935	883,538	`－`	`－`	`－`	`－`	1,754,473	100%
Construction of office building and warehousing	2022 Q4	480,000	`－`	480,000	96,000	120,000	120,000	96,000	0	0.00%
Total		2,234,473	870,935	931,538	96,000	120,000	120,000	96,000	1,754,473	78.52%

- Progress on the implementation after change

Unit: NT$ thousands

			Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
Item	Complettion Time	Funds required	Anticipated Progress of Use of Funds
			2021		2022
			Q3	Q4	Q1	Q2	Q3	Q4
To increase working capital	2022 Q2	2,234,473	870,935	883,538	`－`	480,000	`－`	`－`
Total		2,234,473	870,935	883,538	`－`	480,000	`－`	`－`

Potential benefits expected before the change

To increase working capital

Of the proceeds raised, NT$1,754,473 thousands are intended to be used to replenish working capital for the Company's future development. Based on the Company's bank borrowing rate of approximately 1%, it is estimated that the Company will save NT$17,545 thousands in interest expense annually.

Construction of office building and warehousing
The Company plans to spend NT$480,000 thousands on the construction of an office building and warehouse to meet the Company's future operational needs and development, and to improve the overall operational management efficiency. The construction is expected to be completed in Q4, 2022. Upon completion of the construction, the Company's office building and warehouse will obtain an area of 14,970 sq.m. (excluding the B2 level, which is approximately 4,528.42 pings). Based on the rental rate of approximately $760 per ping at the location of the new office building and warehouse, the annual rental savings for the Company's own office building and warehouse will be approximately $41,299 thousand as compared to that of a leased office building of the same size.

Potential benefits expected after the change

Enrichment of working capital

However, after the change of plan, NT$480,000 thousands originally expected to be used for the construction of the office building and warehouse will also be used to replenish working capital to meet the increased working capital requirements of the Company's future expansion. Based on the Company's current short-term borrowing rate of approximately 1%, it is estimated that the annual interest expense savings will increase from NT$17,545 thousands to NT$22,345 thousands in following years.

`【` Attachment 8 `】`

LOTES CO., LTD. Comparison Table of Articles of Incorporation

	Content to be amended	Current content	Description
	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, 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.Meetings of shareholders may be held by video conference or by other means announced by the competent authority. If a meeting is held by video conference, a shareholder shall be deemed to be present in person if he participates the video conference.	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, 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.	Amendments to the Video Shareholders' Meeting to coincide with the amendments to Section 172-2 of the Companies Act.
	Article 22 This Articles of Incorporation was composed on Aug.9, 1986. 1st amendment was made on Jan.19,1987. ……… 25th amendment was made on Jun.26,2021. 26th amendment was made on Jun. 17, 2022.	Article 22 This Articles of Incorporation was composed on Aug.9, 1986. 1st amendment was made on Jan.19,1987. ……… 25th amendment was made on Jun.26,2021.	Add amendment date.

`【` Attachment 9 `】`

LOTES CO., LTD.

Comparison Table of Rules of Procedure for Shareholder Meetings

Content to be amended	Content to be amended	Current content	Description
Article 3 Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the Board. Changes to how the Company convenes its shareholders meeting shall be resolved by the Board, and shall be made no later than mailing of the shareholders meeting notice.		Article 3 Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the Board.	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, relatedprovisions are added.
	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. If, after a proxy form is delivered to this Corporation, a shareholder wishes to attend the shareholders meeting online, a written notice of proxy cancellation shall be submitted to this Corporation 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. 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.	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.
	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. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting. The restrictions on the place of the meeting shall not apply when this Corporation convenes a virtual-only shareholders meeting.	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. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.
	Article 6 This Corporation shall specify in its shareholders meeting notices the time during which attendance registrations for shareholders, solicitors and proxies (collectively "shareholders")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.For virtual shareholders meetings, shareholders may begin to register on the virtual meeting platform 30 minutes before the meeting starts. Shareholders completing registration will be deemed as attend the shareholders meeting in person. Shareholders shallattend shareholdersmeetings based on	Article 6 The Company shall specify in its shareholders meeting notices the time during which attendance registrations for shareholders, 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~~, solicitors and proxies~~ ~~(collectively "shareholders") s~~hall attend shareholders meetings based on attendance cards,sign-in cards,or other certificates of	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.

Content to be amended	Current content	Description
attendance cards, sign-in cards, or other certificates of attendance. This Corporation 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. This Corporation shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in. This Corporation 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. 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. In the event of a virtual shareholders meeting, shareholders wishing to attend the meeting online shall register with this Corporation two days before the meeting date. In the event of a virtual shareholders meeting, this Corporation shall upload the meeting agenda book, annual report and other meeting materials to the virtual meeting platform at least 30 minutes before the meeting starts, and keep this information disclosed until the end of the meeting.	attendance. This Corporation 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 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~~and~~ ~~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 8 This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures. The recorded materials of the preceding paragraph shall be retained 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. Where a shareholders meeting is held online, this Corporation shall keep records of shareholder registration, sign-in, check-in, questions raised, votes cast and results of votes counted by this Corporation, and continuously audio and video record, without interruption, the proceedings of the virtual meeting from beginning to end. The information and audio and video recording in the preceding paragraph shall be properly kept by this Corporation during the entirety of its existence, and copies of the audio and video recording shall be provided to and kept by the party appointed to handle matters of the virtual meeting.	Article 8 This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures. The recorded materials of the preceding paragraph shall be retained 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.	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.
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,and the shares checked in on the virtual meeting platform,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 and disclose information concerning the number of nonvoting shares and number of shares represented by shareholders attending the meeting. 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 suchpostponements,for a combined total of no more	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	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.

Content to be amended	Current content	Description
than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.In the event of a virtual shareholders meeting, this Corporation shall also declare the meeting adjourned at the virtual meeting platform. If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within one month.In the event of a virtual shareholders meeting, shareholders intending to attend the meeting online shall re-register to this Corporation in accordance with Article 6.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 CompanyAct.	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 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. When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak on the same proposal. After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond. Where a virtual shareholders meeting is convened, shareholders attending the virtual meeting online may raise questions in writing at the virtual meeting platform from the chair declaring the meeting open until the chair declaring the meeting adjourned. No more than two questions for the same proposal may be raised. Each question shall contain no more than 200 words. The regulations in paragraphs 1 to 5 do not apply.	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. When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak on the same proposal. After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.
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	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	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.

Content to be amended

Current content

Description

Content to be amended	Content to be amended	Current content	Description
	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 Extemporary Motion(s) and amendments to original proposals of that meeting. It is therefore advisable for the Company to refrain from proposing interim motions and amendments to the original motion. A shareholder intending to exercise voting rights in person orby e-conference meansunder 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 this Corporation'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 first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the 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 voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of this Corporation. Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote. When this Corporation convenes a virtual shareholders meeting, after the chair declares the meeting open, shareholders attending the meeting online shall cast votes on proposals and elections on the virtual meeting platform before the chair announces the voting session ends or will be deemed abstained from voting. In the event of a virtual shareholders meeting, votes shall be counted at once after the chair announces the voting session ends, and results of votes and elections shall be	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 Extemporary Motion(s) and amendments to original proposals of that meeting. It is therefore advisable for the Company to refrain from proposing interim motions and amendments to the original motion. 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 this Corporation'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 first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the 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 voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of this Corporation. Vote counting for shareholders meeting proposals or elections shall be conducted in

Content to be amended	Current content	Description
announced immediately. When this Corporation convenes a hybrid shareholders meeting, if shareholders who have registered to attend the meeting online in accordance with Article 6 decide to attend the physical shareholders meeting in person, they shall revoke their registration two days before the shareholders meeting in the same manner as they registered. If their registration is not revoked within the time limit, they may only attend the shareholders meeting online. When shareholders exercise voting rights by correspondence or electronic means, unless they have withdrawn the declaration of intent and attended the shareholders meeting online, except for Extemporary Motion(s), they will not exercise voting rights on the original proposals or make any amendments to the original proposals or exercise voting rights on amendments to the original proposal.	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 15 Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form. This Corporation may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS. 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 this Corporation. Where a virtual shareholders meeting is convened, in addition to the particulars to be included in the meeting minutes as described in the preceding paragraph, the start time and end time of the shareholders meeting, how the meeting is convened, the chair's and secretary's name, and actions to be taken in the event of disruption to the virtual meeting platform or participation in the meeting online due to natural disasters, accidents or other force majeure events, and how issues are dealt with shall also be included in the minutes. When convening a virtual-only shareholder meeting, other than compliance with the requirements in the preceding paragraph, this Corporation shall specify in the meeting minutes alternative measures available to shareholders with difficulties in attending avirtual-only shareholders meeting online.	Article 15 Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form. This Corporation may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS. 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 this Corporation.	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.
Article 16 On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation, the number of shares represented by proxies andthe number of shares represented by shareholders attending the meeting by correspondence or electronic means,and shall make an express disclosure of the same at the place of the shareholders meeting. In the event a virtual shareholders meeting, this Corporation shall upload the above meeting materials to the virtual meeting platform at least 30 minutes before the meeting starts, and keep this information disclosed until the end of the meeting.	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	Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.

Content to be amended	Current content	Description
During this Corporation's virtual shareholders meeting, when the meeting is called to order, the total number of shares represented at the meeting shall be disclosed on the virtual meeting platform. The same shall apply whenever the total number of shares represented at the meeting and a new tally of votes is released during the meeting. If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation (or Taipei Exchange Market) regulations, this Corporation shall upload the content of such resolution to the MOPS within theprescribed timeperiod.	Securities Market) regulations, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.
Article 19 (New) In the event of a virtual shareholders meeting, this Corporation shall disclose real-time results of votes and election immediately after the end of the voting session on the virtual meeting platform according to the regulations.		Referring to the Amendment to the “Rules of Procedure of the Shareholders’ Meeting of ○○ Corporation” issued by the Taiwan Stock Exchange by letter no. 111 000 42501, provisions on convening shareholders’ meetings by video conference are added.
Article 20 These Rules shall only take effect after having been submitted to and approved by a shareholders meeting. Subsequent amendments thereto shall come into effect in the same manner.	Article 19 These Rules shall only take effect after having been submitted to and approved by a shareholders meeting. Subsequent	New article.

`【` Attachment 10 `】`

LOTES CO., LTD. Comparison Table of Operational Procedures for Acquisition and Disposal of Assets

Content to be amended

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 self-regulatory rules of the industry associations to which they belong and with the following provisions:

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 appropriateness 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 appropriate, and that they have complied with applicable laws and regulations.

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 and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

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

Current content

Description

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

For various trade associations to which the external experts belong have made changes to the regulations governing their undertakings.

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. 2.3.1.3. Where the transaction amount is NT$1 The requirement for billion or more, appraisals from two or more external experts to follow professional appraisers shall be obtained. Where the self-regulatory the discrepancy between the appraisal results of standards of their two or more professional appraisers is 10 percent respective peer societies or more of the transaction amount, unless all the has been amended in appraisal results for the assets to be acquired are section 1.5.3, which higher than the transaction amount, or all the covers the procedures to appraisal results for the assets to be disposed of be followed for the are lower than the transaction amount, a certified issuance of an opinion by public accountant shall be engaged to perform the an accountant. 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: 2.3.2.As the Company acquire or dispose of Reason for amendment is securities, it shall, prior to the date of occurrence same as last article. 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

	Content to be amended		Current content	Description
	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. 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).		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 SupervisoryCommission(FSC).
	2.4.1.When a public company intends to acquire or dispose of real property or right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or right-of-use assets thereof from or to a related party and 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, except in 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, the company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board and recognized by the supervisors:. . . 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 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 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 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 pursuant to Article 2.4.1, the Board 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 meeting. Where an audit committee has been established in accordance with the provisions of the Act, the matters for which paragraph 2.4.1 requires recognition by the		2.4.1.When a public company intends to acquire or dispose of real property or right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or right-of-use assets thereof from or to a related party and 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, except in 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, the company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board and recognized by the supervisors: . . . 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 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 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 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 pursuant to Article 2.4.1, the Board 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 meeting.	(1)In order to strengthen the management of related party transactions and to protect the rights of minority shareholders of public companies to express their opinions on transactions between the Company and related parties, the requirement that prior approval of the shareholders' meeting should be submitted for material related party transactions is regulated. (2)In consideration of the overall business planning needs of a public company and its parent company, its subsidiaries, or its subsidiaries in relation to each other, and taking into account the exemptions of the former major international capital markets, hereby revise in the provison of the exemption of inter-company transactions from the requirement of a shareholders' meeting resolution.

	Content to be amended		Current content	Description
	supervisors shall first be approved by one-half or more of all audit committee members and then submitted to the Board for a resolution. If the Company or a subsidiary thereof that is not a domestic public company will have a transaction set out in paragraph 2.4.1 and the transaction amount will reach 10 percent or more of the public company’s total assets, the public company shall submit the materials in all the subparagraphs of paragraph 2.4.1 to the shareholders meeting for approval before the transaction contract may be entered into and any payment made. However, this restriction does not apply to transactions between the public company and its parent company or subsidiaries or between its subsidiaries. The calculation of the transaction amounts referred to in paragraph 2.4.1 and 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 shareholders meeting or Board and recognized by the supervisors need not be counted toward the transaction amount.
	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 bondsor foreign government bonds with a rating that is not lower than the sovereign rating of Taiwan. 3.1.7.2. Where done by professional investors—securities trading on securities exchanges or OTC markets, or subscription offoreign government bonds,or 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 or redemption of exchange traded notes,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. 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~~domestic or~~ ~~foreign~~securities exchanges or OTC markets, or subscription of~~domestic~~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.	In view of the fact that public companies are currently exempted from the notification requirement for the sale and purchase of domestic bonds, hereby amend this clause. In addition, consider that foreign bonds are simple in nature and their creditworthiness is usually better than that of foreign corporate bonds; therefore, they are exempted from notification.

`【` Annex 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. 2. Manufacturing, processing and trading of terminals and their finished products. 3. Manufacture, processing and trading of circuit boards for electrical appliances. 4. Import and export business in respect of the preceding item. 5. Conducting tender quotations and distribution for domestic and foreign manufacturers' products in connection with said business
CC01030 Electric Appliance and Audiovisual Electric Products Manufacturing. 7. CC01080 Electronic Parts and Components Manufacturing 8. CC01110 Computers and Computing Peripheral Equipment Manufacturing 9. CC01990 Electrical Machinery, Supplies Manufacturing 10. CF01011 Medical Materials and Equipment Manufacturing 11. CQ01010 Die Manufacturing 12. CZ99990 Other Industrial Products Manufacturing Not Elsewhere Classified 13. F106030 Wholesale of Die 14. F108031 Wholesale of Drugs, Medical Goods 15. F113020 Wholesale of Household Appliance 16. F113030 Wholesale of Precision Instruments 17. F113050 Wholesale of Computing and Business Machinery Equipment 18. F113070 Wholesale of Telecom Instruments 19. F401010 International Trade 20. CI01010 Rope, Cable and Net Manufacturing 21. 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.

Article 4

The Company may make investments in other companies as it deems necessary for its business and may, by resolution of the Board, 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 is authorized to issue the unissued shares in tranches; the issue price per share shall be determined by the Board 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.

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, 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 Audit Committee 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 in this Company. The shareholders must elect

from the candidate list of directors.

The regulations of the competent security authorities must be followed in terms of the total shareholding ratio of all its directors and supervisors.

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.

Article 13-1

The meeting of the Board 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, the Board 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 of the Company shall be notified of the convening of the Board seven days in advance and the Company may convene the Board at any time in case of emergency. The Board 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 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 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

All directors 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.

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.

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. If the Company has accumulated loss, it shall preserve in advance to make-up and then allocate the aforementioned proportion as employees' and directors' 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 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. 25th amendment was made on Jun.26,2021.

`【` Annex 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, this Corporation's shareholders meetings shall be convened by the Board. 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 and etc., 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. The abovementioned material shall be distributed on-site at the meeting.

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, Articles 26-1 and 43-6 of the Securities Exchange Act, Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out and the essential contents explained in the notice of the reasons for convening the shareholders meeting. None of the above matters may be raised by an extraordinary motion. The main content may be placed on the website designated by the Securities Authority or the Company and the said website shall be included in the notice.

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 may exclude it from the agenda. A shareholder may propose a recommendation for urging the corporation to promote public interests or fulfill its social responsibilities, provided procedurally the number of items so proposed is limited only to one in accordance with Article 172-1 of the Company Act, and no proposal containing more than one item will be included in the meeting agenda.

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 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 specify in its shareholders meeting notices the time during which attendance registrations for shareholders, 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, solicitors and proxies (collectively "shareholders") shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. This Corporation 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 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, 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, 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 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, 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

This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures. The recorded materials of the preceding paragraph shall be retained 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, the meeting agenda shall be set by the Board. Votes shall be cast on each separate proposal in the agenda (including Extemporary Motion(s) 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.

The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including Extemporary Motion(s)), 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 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 Extemporary Motion(s) 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 Extemporary Motion(s) 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 this Corporation'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 first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the 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 voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of this Corporation.

Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

Article 14

The election of directors 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.

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. The minutes shall be retained for the duration of the existence of the Company.

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 Extemporary Motion(s)) 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.

`【` Annex 3 `】`

LOTES CO., LTD. Operational Procedures for Acquisition and Disposal of Assets (Before amendment)

1. 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.

2. Disposition Procedures

2.1.Establishment and Amendment Procedures

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 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 meeting.

Where the position of independent director has been created in accordance with the provisions of the Act, when the procedures for the acquisition and disposal of assets are submitted for discussion by the Board pursuant to the preceding paragraph, the Board 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 meeting.

The terms "all audit committee members" in paragraph 2 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$100 million shall be reported to the Board for approval. If the transaction amount is less than NT$100 million (inclusive), the Board 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 after an evaluation report has been submitted by the Finance and Accounting Department or a related entity. For each transaction amounting to NT$100 million or more, the Board shall approve the transaction. For each transaction amounting to NT$100 million or less, the Board 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, 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 for approval and supervisors for acknowledgement before signing the transaction contract.

The following information shall be submitted to the audit committee for approval and acknowledgement by by one-half or more of all audit committee members 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 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 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 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 pursuant to Article 2.4.1, the Board 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 meeting. 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 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. Audut Committee shall comply with Article 218 of the Company Act. 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 and discuss necessary countermeasures with the Board.
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 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.
2.5.12. Internal Audit System
The Company shall establish a log book in which details of the types and amounts of derivatives trading engaged in, Board 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.
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 members of 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.

2.5.13. 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; 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 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 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 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 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 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 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, 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 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.

3. 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.

`【` Annex 4 `】`

Effect of the allotment on the Company's operating performance, earnings per share and return on shareholders' investment:

Not applicable

`【` Annex 5 `】`

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	9.23%
Director	CHIA-MING Investment Co., Ltd. Representative: He,De-You	9,797,037	9.23%
Director	Xie,Jia-Ying	0	0%
Director	Qu. JIen-Zhong	0	0%
Independent Director	Wang, Ren-Chun	0	0%
Independent Director	Jiang, Yi-Chen	0	0%
Independent Director	Wu, Chang-Hsiu	0	0%
Subtotal of the Shares Held by the Directors (Number of Shares)		9,797,037	9.23%
The Minimum Number of Shares Shall Be Held by the Directors		8,000,000	6%

Note 1:The share capital as of April 19, 2022, the date of cessation of transfer, was 106,189,762 shares. Note 2:The Company has established an audit committee and therefore there is no statutory shareholding requirement for supervisors.

AI assistant

LOTES — AGM Information 2022

52339_rns_2022-11-24_acaaf822-b5b1-4afa-9626-4515ed172034.pdf

LOTES CO., LTD

2022 Annual General Meeting of Shareholders Meeting Agenda

Table of Contents

LOTES CO., LTD.

I. Call the Meeting to Order

V. Discussion

VI. Extemporary Motion(s)

VII. Adjournment

LOTES CO., LTD.

Agenda of Annual Meeting of Shareholders for Year 2022

I. Call the Meeting to Order

II. Chairperson Remarks

III. Management Presentation (Company Reports)

IV. Proposals

V. Discussion

VI. Extemporary Motion(s)

VII. Adjournment

Management Presentation (Company Reports)

Report No.1:

Explanation:

Report No.2:

Explanation:

Report No.3:

Explanation:

Report No.4:

Explanation:

Report No.5:

Explanation:

Proposals

1. Proposed by the Board

Proposal:

Explanation:

Resolution:

2. Proposed by the Board

Proposal:

Explanation:

Resolution:

3. Proposed by the Board

Proposal:

Explanation:

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:

Extemporary Motion(s)

【 Attachment 1 】

Annual Business Report

I. Business Status Report 2021

(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

【 Attachment 2 】

LOTES CO., LTD.

Report of Audit Committee

Convenor of Audit Committee: Wu, Chang-Hsiu

【 Attachment 3 】

LOTES CO., LTD. Details of Issuance and Enforcement of Corporate Bonds

【 Attachment 4 】

Changes in the Company's shareholding in LeRain Technology Co., Ltd.

【 Attachment 5 】

Independent Auditor’s Report

Audit opinion

Basis of the audit opinions

Key audit matters

Corresponding audit procedures:

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

LOTES AGM Information 2022

`【` Attachment 1 `】`

`【` Attachment 2 `】`

`【` Attachment 3 `】`

`【` Attachment 4 `】`

`【` Attachment 5 `】`

`【` Attachment 6 `】`

`【` Attachment 7 `】`

`【` Attachment 8 `】`

`【` Attachment 9 `】`

`【` Attachment 10 `】`

`【` Annex 1 `】`