Qisda - AGM Information 2021 | FinancialReports.eu

Report Items  1

Qisda Corporation 2021 Annual General Shareholders’ Meetin g

Time: June 24, 2021

Place: No.108, Sec. 1, Nankan Rd., Luzhu Dist., Taoyuan City 338 B1 Conference Hall / Monarch Skyline Hotel

Agenda

I. Report Items

(1) To report the business of 2020 .......................................................................................................................................................... 02 (2) Audit Committee’s Review Report .................................................................................................................................................... 03 (3) To report the distribution of employees’ and directors’ remuneration of 2020 ................................................................... 04 (4) To report the cash dividends distribution of 2020 earnings ....................................................................................................... 04 (5) To report the issuance of securities in private placement ........................................................................................................... 04

II. Recognition and Discussion Items

(1) To accept 2020 Business Report and Financial Statements ......................................................................................................... 05 (2) To accept the proposal for the distribution of 2020 earnings .................................................................................................... 05 (3) To approve issuance of new common shares for cash to sponsor issuance of the overseas depositary shares and/or issuance of new common shares for cash in public offering and/or issuance of new preferred shares for cash in public offering and/or issuance of new common shares for cash in private placement and/or issuance of overseas or domestic convertible bonds in private placement .................................................................................................. 05 (4) To approve the amendment to Articles of Incorporation. .......................................................................................................... 09 (5) To approve the amendment to Handling Procedures for Acquisition or Disposal of Assets and Handling Procedures for Conducting Derivative Transactions .................................................................................................................... 09 (6) To approve the amendment to Handling Procedures for Lending Funds to Other Parties and Handling Procedures for Endorsements and Guarantees .............................................................................................................................. 09 (7) To lift non-competition restrictions on current directors and their representatives .......................................................... 10 III. Extraordinary Motions ............................................................................................................................................................................ 10 IV. Meeting Adjourn ........................................................................................................................................................................................ 10

Attachments

Independent Auditors’ Report and 2020 Financial Statements ....................................................................................................... 11 2. The 2020 Earnings Distribution Proposal ............................................................................................................................................. 31 3. Terms and Conditions for Issuance of Overseas or Domestic Convertible Bonds in Private Placement (Tentative) ....... 32 4. Comparison table for the Articles of Incorporation before and after amendment ................................................................... 34 5. Comparison table for the Handling Procedures for Acquisition or Disposal of Assets before and after amendment ...... 35 6. Comparison table for the Handling Procedures for Conducting Derivative Transactions before and after amendment ...... 39 7. Comparison table for the Handling Procedures for Lending Funds to Other Parties before and after amendment ......... 41 8. Comparison table for the Handling Procedures for Endorsements and Guarantees before and after amendment ........... 43 9. List of non-competition restrictions on current directors and their representatives proposed to be lifted ....................... 48

Appendices

Rules and Procedures for Shareholders’ Meeting ................................................................................................................................. 49 2. Articles of Incorporation (Before the amendments) ........................................................................................................................... 51 3. Shareholding of Directors ............................................................................................................................................................................ 55 4. Influence of Proposed Stock Dividend Distribution upon 2020 Operating Performance, Earnings Per Share, and Return on Investment .................................................................................................................................................................................. 55

2  Report Items

I. Report Items

1. Business Report of 2020

Greetings to all of our Valued Shareholders,

Qisda Group’s consolidated revenue for 2020 was NT$191.7 billion. The consolidated operating income was NT$6.6 billion. The consolidated net income was NT$6.4 billion. The consolidated net income attributed to Qisda Corporation was NT$5 billion. The earnings per share after tax was NT$2.54.

In recent years, Qisda has been active in transforming its business. Together with the Group’s core resources as a platform, Qisda consolidates hidden champions to be a grand fleet. Domestic publicly listed companies who identify with this concept joined us. Therefore, Qisda’s consolidated revenue hitting new record highs in three consecutive years under the uncertain conditions such as fast changes in industries, lackluster demand in displays and projectors and rise in global trade conflict. In 2020. The revenue ratio of high value-added businesses reached 28%, and continues to move toward the goal of more than half .We are dedicated to expand Qisda’s business under the four major operating policies.

(1) Optimization on current business operations: The two major products, flat panel displays and projectors, continuously gain stable results and leading position in the market. The display business outperforms the entire industry and ranks second in the world. Qisda continues to develop high-end, high unit price, professional and medical displays. Qisda not only keeps its global leading position in OEM projectors, maintains the position as the world's leading DLP projector, but the only domestic manufacturer with DLP and LCD technical capability.
(2) Fast expansion in medical business: In 2020, the revenue of two hospitals in Suzhou and Nanjing continued to grow and Suzhou Hospital received JCI certification. Hospital management was in high international standards, and the importance of protecting the health of local residents under the epidemic became more prominent. In terms of medical appliances and channel expansion, Qisda invested in Golden Spirit Co., Ltd.、E-Strong Medical Technology Co., Ltd. and Frismed (Indonesia) to create a one-stop service from production to distribution of dialyzer, dialysate and disinfectant; self-design and self-manufactured portable ultrasound tablets continue to increase marketshare in the bedside care application; the market expansion in Digital Dentistry application and hearing application will satisfy the demands for global aging population and long-term care.
(3) Acceleration on solution development: Qisda completed its strategic allocation in Information Technology (IT) and Operational Technology (OT). The purpose is to become a full-fledged total system integration solution services provider. The consolidated revenue of smart solutions in 2020 was NT$25 billion. Qisda continuously satisfying the six main intelligence vertical markets to meet the needs of contactless and cloud under the epidemic situation. Qisda worked with National Cheng Kung University to build campus security center, Qisda also provided smart system of joint care to meet long-term care service needs as well as worked with chain store to build managing platform to provide holistic view for decision-making purpose.
(4) Strategic investment in 5G Network Business: Qisda look to further increase in network communication in future technological life, Qisda increased holdings in Alpha Networks Inc.. Through subsidiaries such as Alpha Networks Inc., Hitron Technologies Inc., Interactive Digital Technologies Inc., to create broadband services that integrate wired and wireless networks.

Prospecting in 2021, while there are uncertainness such as trade conflicts and COVID, it also brings the long-term opportunities to enhance automation and accelerate digital transformation. Qisda will continue to focus on four major operating directions to create long-term values. The plans are listed as follows:

(1) Optimization on current business operations: We will keep consolidating our global leading position in the display and projector market and continuously developing towards high-end, high-resolution and high-valued professional applications.
(2) Fast expansion in medical business: BenQ Medical Center takes on the goal to be the No.1 private hospital in China. Regarding medical devices, we will prioritize the distribution channel, with focus in Asia and developing countries. Meanwhile, we will focus on self-developed products such as ultrasound, hemodialyzer and intraoral scanner. We development in three field, such us smart medical, epidemic prevention with health, life with aesthetics, and its service. We will also expand the medical industry alliance via win-win merge & acquisition or strategic cooperation model.
(3) Acceleration on solution development: The horizontal integration on internal technology and channels will continue to meet different vertical market demands. We have aggressively accelerated the integration among DFI Inc., Partner Tech Corp. in recent years to exploit synergies. We’ve also linked the well-known top-tier international brand of SYSAGE in IT field with the brand of ACE in OT field, such as Cisco, Citrix, DELL(EMC), IBM, Oracle, Redhat, SAP, Vmware, etc. to deliver the best smart solution for customers, and help them with digital transformation.

Report Items  3

(4) Strategic investment in 5G Network business: Provide products and services that meet customers’ needs with networking, expand 5G networks business, and create seamless and fast all-round broadband services.

Qisda achieves its sustainable competitive advantages through innovation and technical development. Each year, we make effort in product innovation and development, averagely around 2%-3% of revenue. We have obtained 1,140 patents worldwide.

Qisda has dedicated to the corporate sustainable operation. The sustainable development indicators on economy, environment and society in 2020 still maintained high information transparency. Qisda not only got the “Taiwan Corporate Sustainability Reports Platinum Award” of “2020 Taiwan corporate sustainability Awards (TCSA) in Top 10” running by Taiwan Institute for Sustainability Foundation (TAISE) and got “2020 Taiwan corporate sustainability Awards (TCSA)” in two years, but also received “Growth with Innovation” and “Communication with Innovation”. It shows that Qisda has implemented lavishly on sustainable development of economy, environment and society.

At last, we offer our sincerest thanks for your long-term full support and concern. Our management team and all employees will continue to strive and seek for the best interest of the Company and Shareholders.

Finally, we wish everyone good health, good luck and fortune.

Sincerely, Chairman: Peter Chen President: Peter Chen

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Chief Accountant: Billy Liou

2. Audit Committee’s Review Report

The Board of Directors has prepared the Company's Financial Statements for the year of 2020. Tang, Tzu-Chieh and Chang, Huei-Chen Certified Public Accountants of KPMG, have audited the Financial Statements. The 2020 Financial Statements, Business Report, Independent and Auditors Report have been reviewed and determined to be correct and accurate by the Audit Committee of Qisda Corporation. I, as the Chair of the Audit Committee, hereby submit this report according to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

Qisda Corporation 2021 Annual General Shareholders’ Meeting

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Chair of the Audit Committee 范成炬 Cheng-Ju (Allen) Fan March 23, 2021

The Board of Directors has prepared the Company's 2020 Earnings Distribution Proposal, which have been reviewed and determined to be correct and accurate by the Audit Committee of Qisda Corporation. I, as the Chair of the Audit Committee, hereby submit this report according to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

Qisda Corporation 2021 Annual General Shareholders’ Meeting

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Chair of the Audit Committee 范成炬 Cheng-Ju (Allen) May 11, 2021

4  Report Items

3. To report the distribution of employees’ and directors’ remuneration of 2020

Distribution of NT$429,668,000 and NT$42,925,000 in cash as remunerations to employees and directors, respectively, have been approved by the meeting of board of directors held on March 23, 2021.

4. To report the cash dividends distribution of 2020 earnings

(1) According to Article 16-1 of the Company’s Article of Incorporation, if earnings distribution plan is performed by means of cash dividends, it is proposed the Board of Directors be authorized for resolution. The resolution thereof shall be reported in the Shareholders’ Meeting.
(2) The proposed distribution is allocated from the 2020 earnings available for distribution, and cash dividends amounting to NT$2,950,172,937 were distributed to shareholders at NT$1.5 per share. It is approved by the meeting of board of directors held on May 11, 2021, and proposed that the Chairman of the Board of Directors is authorized to determine the ex-dividend date and payment date for the cash dividend distribution and other related matters.
(3) If the cash dividend distribution ratio is adjusted and need to be modified due to change of the Company's total number of outstanding common shares it is proposed to authorized the Chairman of Board of Directors with full power to adjust the distribution ratio.

5. To report the issuance of securities in private placement

(1) It has been approved by the Annual General Shareholders’ Meeting held on June 19, 2020 to authorize the Board of Directors, within the limit of 195,000,000 common shares, depending on the market conditions and the Company’s capital needs, to choose appropriate timing and one or more fund raising instruments to issue new common shares for cash to sponsor issuance of the overseas depositary shares and/or new common shares for cash in public offering and/or new preferred shares for cash in public offering and/or new common shares for cash in private placement and/or overseas or domestic convertible bonds in private placement in accordance with the applicable laws and regulations.
(2) In according to paragraph 7of Article 43-6 of the Securities and Exchange Act, the private placement may be carried out within one year of the date of the resolution of the shareholders meeting.
(3) In case the amount of the aforementioned fundraising has not been completed will be cancelled from the date of the June 18, 2021.

Recognition and Discussion Items  5

II. Recognition and Discussion Items

1. To accept 2020 Business Report and Financial Statements (proposed by the Board of Directors)

Explanation:

(1) The 2020 Financial Statements were audited by the independent auditors, Tang, Tzu-Chieh and Chang, Huei-Chen of KPMG.
(2) For the 2020 Independent Auditors' Report, and the 2020 Financial Statements, please refer to Attachment 1 (pages 11-30).

Resolution:

2. To accept the proposal for the distribution of 2020 earnings (proposed by the Board of Directors)

Explanation:

The 2020 Earnings Distribution Proposal please refer to Attachment 2 (page 31).

Resolution:

3. To approve issuance of new common shares for cash to sponsor issuance of the overseas depositary shares and/or issuance of new common shares for cash in public offering and/or issuance of new preferred shares for cash in public offering and/or issuance of new common shares for cash in private placement and/or issuance of overseas or domestic convertible bonds in private placement (proposed by the Board of Directors)

Explanation:

(1) Fund raising purpose and size:

In order to enrich working capital, have sound financial structure, purchase of materials from overseas and support the Company’s funding needs for long term development, it is hereby proposed that the shareholders meeting to authorize the Board of Directors (“Board”), within the limit of 195,000,000 common shares and preferred shares, depending on the market conditions and the Company’s capital needs, to choose appropriate timing and fund raising instrument(s), to issue new common shares for cash to sponsor DR Offering and/or issue new common shares for cash in public offering and/or issue Private Placement Shares and/or issue Private Placement CB, in accordance with the applicable laws and regulations and the following fund raising principles. For issuance of Private Placement CB, the number of common shares to be converted within the limit of 195,000,000 common shares shall be calculated in accordance with the conversion price determined at the time of issuance of Private Placement CB.

(2) Fund raising method(s) and handling principles:
A. Issuance of new common shares for cash to sponsor DR Offering:
- a. The issue price of the new common shares will be decided with reference to (a) the closing price of the Company’s common shares on the pricing date or (b) the average of the closing price of the Company’s common shares for 1, 3 or 5 trading days prior to the pricing date (each of (a) and (b) is referred to hereinafter as the "reference price"). The Chairman of the Company is authorized to coordinate with the foreign lead-underwriter(s) of the DR Offering to determine the actual issue price in accordance with market conditions, provided that, the actual issue price shall not be less than 90% of the reference price after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends. The reference price and the actual issue price will be decided in accordance with market practice and applicable law and regulations. In addition, assuming that the Company issues 195,000,000 common shares which is approximately 9.91% of the Company’s total outstanding common shares on the

6  Recognition and Discussion Items

record date for the Company’s 2020 annual shareholders meeting, as the actual issue price shall be no less than 90% of the reference price after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends, it is unlikely that such issuance will have a material dilutive effect on the holding of the current existing shareholders. Thus, determination of the issue price of the new common shares to be issued in connection with the DR Offering should be reasonable and should not have a material adverse effect on the rights and benefits of the current existing shareholders.

b. Except for 10% to 15% of the new common shares shall be allocated for the employees' subscription in accordance with Article 267, Paragraph I of the Company Act, it is proposed for the shareholders meeting to approve the rights to subscribe to the remaining shares to be waived by the shareholders and such remaining shares should be offered to the public under Article 28-1 of the Securities and Exchange Act as the underlying shares of the global depositary shares to be sold in the DR Offering. Any new common shares not subscribed by employees of the Company shall be determined by the Chairman of the Company, depending on the market needs, to be allocated as underlying shares of the global depositary shares or to be subscribed by the designated person(s).
B. Issuance of new common shares for cash in public offering:
a. The par value of the new common shares to be issued per share is NT$10. It is proposed to authorize the Chairman of the Company to coordinate with the underwriter(s) of the public offering to determine the actual issue price in accordance with the Taiwan Securities Association's Self-regulatory Rules Governing the Provision of Advisory Services by Underwriter Members to Issuing Companies for Offering and Issuing Securities and the market conditions and the issue price shall be reported to, and accepted by the regulatory authority before issuance.
b. Except for 10% to 15% of the new shares must be offered to employees in accordance with Article 267, Paragraph I of the Company Act, it is proposed to authorize the Board to choose either of the following methods to sell the new shares in the public offering through the underwriter(s) ：
(i) It is proposed for the shareholders meeting to approve the pre-emptive rights to subscribe to the remaining shares to be waived by the shareholders in accordance with Article 28-1 of the Securities and Exchange Act and such remaining shares will be offered to the public via book building. It is proposed that any new common shares not subscribed by employees of the Company will be sold to the person(s) designated by the Chairman of the Company at the issue price.
(ii) It is proposed that 10% of the new shares to be sold to the public through the underwriter(s) in accordance with Article 28-1, Paragraph 2 of the Securities and Exchange Act and the remaining shares will be subscribed to by the existing shareholders of the Company in accordance with their shareholding. It is proposed that any new common shares not subscribed by employees and shareholders of the Company will be sold to the person(s) designated by the Chairman of the Company at the issue price.
C. Issuance of new preferred shares for cash in public offering:
a. The par value of the new preferred shares to be issued per share is NT$10. It is proposed to authorize the Chairman of the Company to coordinate with the underwriter(s) of the public offering to determine the actual issue price in accordance with the Taiwan Securities Association's Self-regulatory Rules Governing the Provision of Advisory Services by Underwriter Members to Issuing Companies for Offering and Issuing Securities and the market conditions and the issue price shall be reported to, and accepted by the regulatory authority before issuance.
b. Except for 10% to 15% of the new shares must be offered to employees in accordance with Article 267, Paragraph I of the Company Act, it is proposed to authorize the Board to choose either of the following methods to sell the new shares in the public offering through the underwriter(s) ：
(i) It is proposed for the shareholders meeting to approve the pre-emptive rights to subscribe to the remaining shares to be waived by the shareholders in accordance with Article 28-1 of the Securities and Exchange Act and such remaining shares will be offered to the public via book building. It is proposed that any new preferred shares not subscribed by employees of the Company will be sold to the person(s) designated by the Chairman of the Company at the issue price.

Recognition and Discussion Items  7

(ii) It is proposed that 10% of the new shares to be sold to the public through the underwriter(s) in accordance with Article 28-1, Paragraph 2 of the Securities and Exchange Act and the remaining shares will be subscribed to by the existing shareholders of the Company in accordance with their shareholding. It is proposed that any new preferred shares not subscribed by employees and shareholders of the Company will be sold to the person(s) designated by the Chairman of the Company at the issue price.
D. Issuance of Private Placement Shares and/or Private Placement CB:
a. Basis and reasonableness for determination of the subscription price of the Private Placement Shares and issue price of Private Placement CB:
(i) The higher of (x) the simple average closing price of the Company’s common shares for either 1, 3 or 5 trading days prior to the pricing date, and (y) the simple average closing price of the Company’s common shares for 30 trading days prior to the pricing date, after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends, as the reference price of the Private Placement Shares.
(ii) The issue price of the Private Placement Shares shall be no less than 80% of the reference price. It is proposed to authorize the Board to decide the actual issue price within the range approved by the shareholders meeting, depending on the status of finding specific investor(s) and market conditions. The issue price of the Private Placement CB shall be no less than 80% of the theoretical price.
(iii) As aforementioned, subscription price of the Private Placement Shares and issue price of Private Placement CB will be determined with reference to the price of the Company’s common shares and the theoretical price in accordance with the Regulations Governing Public Companies Issuing Securities in Private Placement and which also provide for three years of transfer restrictions thus, the price should be reasonable.
b. The method, purpose, necessity and projected benefits to determine specific investor(s):
(i) The investors to subscribe to the Private Placement Shares and/or Private Placement CB must meet the qualifications listed in Article 43-6 of the Securities and Exchange Act and are limited to strategic investor(s). Priority will be given to the investor(s) who could benefit the Company's long-term development, competitiveness, and existing shareholders' rights.
(ii) The purpose, necessity and projected benefits for choosing strategic investor(s) are to accommodate the Company’s operation and development needs to have the strategic investor(s) to assist the Company, directly or indirectly, in its finance, business, manufacturing, technology, procurement, management, and strategy development, etc. so to strengthen the Company’s competitiveness and enhance its operational efficiency and long term development and positive effect on shareholder’s right and interests.
(iii) Currently there is no available specific investor and the Board is fully authorized to determine the specific investor(s).
c. The necessity of issuance of Private Placement Shares and/or Private Placement CB:
Considering the effectiveness and convenience for issuance of the Private Placement Shares/Private Placement CB and accommodating the Company’s development planning, including inviting the strategic investor(s), it would be necessary to issue the Private Placement Shares and/or Private Placement CB.
d. For the Private Placement Shares and/or the new common shares to be issued upon conversion of Private Placement CB, after expiration of three years following delivery date of the Private Placement Shares/Private Placement CB, the Board is authorized to apply for approval from the Taiwan Stock Exchange ("TSE") acknowledging that the Private Placement Shares /new common shares to be issued upon conversion of Private Placement CB meet the requirements for TSE listing before the Company submitting application with the Financial Supervisory Commission for retroactive handling of public issuance of such shares and submitting application with TSE for listing such shares on TSE.
e. The tentative terms and conditions of the Private Placement CB ("Offering Plan") are shown in Attachment 3 (pages 32-33).

8  Recognition and Discussion Items

(3) Use of proceeds, the schedule and the projected benefits:

The Company plans to use the funds raised from the DR Offering and/or issuance of the new common shares in public offering and/or issuance of the Private Placement Shares and/or Private Placement CB to invest in equipment and technology of high-end product, enrich working capital, strengthen financial structure and/or support the Company’s funding needs for long term development and after completing the fund raising and it is expected that use of such funds will strengthen the Company’s competitiveness and improve operational efficiency.

(4) The new common shares to be issued to sponsor the DR Offering, the new common shares to be issued in public offering, the new preferred shares to be issued in public offering, Private Placement Shares and the new common shares to be issued upon conversion of Private Placement CB will be issued in the script less form. Except that the Private Placement Shares and the new common shares to be issued upon conversion of Private Placement CB are subject to the selling restrictions within three years after the delivery date of the Private Placement Shares/Private Placement CB under Article 43-8 of the Securities and Exchange Act, the new common shares to be issued to sponsor the DR Offering, the new common shares to be issued in public offering, the Private Placement Shares and the new common shares to be issued upon conversion of Private Placement CB will have the same rights and obligations as the Company’s existing issued and outstanding common shares. It is proposed to authorize the Board to determine the rights and obligations of the new preferred shares in accordance with the Article of Incorporation and applicable laws and regulations.
(5) Under the situation where the issue price of the new common shares to be issued to sponsor the DR Offering, the new common shares to be issued in public offering, new preferred shares to be issued in public offering, Private Placement Shares and the conversion price for the Private Placement CB is set at a price less than the par value due to the market change, the reason for the Company not adopt other fund raising method and the reasonableness for such determination: This is mainly based on considerations of the sound operation of the Company and the security of its financial structure and issuing equity related securities for fund raising is more appropriate than pure debt financing. If the Company decides to use the fund raising methods, such as issuing new shares for cash to sponsor the DR Offering, issuing new common shares for cash in public offering, issuing new preferred shares for cash in public offering, and issuing Private Placement Shares, etc. the Company would not incur any interest of the debt in such case not only the Company's financial risk could be reduced, the Company's financial structure could be improved and the flexibility of the Company’s treasury management would also be increased. For issuance of Private Placement CB, if investor converts Private Placement CB into the common shares, such would improve the Company’s financial structure and would benefit the Company’s long-term development. Thus, it should be reasonable for the Company to issue the equity related securities. If the issue price and the conversion price is less than the par value, such would be expected to cause decrease of the Company’s capital surplus and retained earnings in which case the Company will, depending on the actual operating conditions in the future, make up for the losses. As the issue price and the conversion price will be determined in accordance with the relevant regulations, thus, after realization of the benefits of the capital increase, the Company's financial structure will be effectively improved which would be favorable to the Company’s long-term development and would not have adverse impact on the rights and benefits of the shareholders.
(6) After the shareholders meeting approves issuance of new common shares to sponsor the DR Offering, new common shares in public offering, new preferred shares in public offering, the Private Placement Shares and the Private Placement CB, it is proposed for the shareholders meeting to authorize the Board to determine and amend, at the Board’s sole discretion, the terms and condition of the new common shares to be issued for the DR Offering and/or in public offering and/or terms and condition of the Private Placement Shares and/or Offering Plan of the Private Placement CB, the plan for the use of proceeds, the schedule and projected benefits and all matters in connection therewith, in accordance with the Company’s actual needs, market conditions and relevant regulations and if any amendment thereto is required due to any change of the regulations or as requested by the regulator’s order or based on the Company’s operation evaluation or change of the market conditions, the Board is authorized to make the required amendments at the Board’s sole discretion.

Recognition and Discussion Items  9

(7) To complete the fund raising, the Chairman or the Chairman's designee is authorized, on behalf of the Company, to handle all matters relating to, and sign all agreements and documents in connection with, issuance of the new common shares to sponsor the DR Offering, issuance of new common shares in public offering, issuance of new preferred shares in public offering, and issuance of the Private Placement Shares and/or Private Placement CB.
(8) The Board is authorized to handle all matters at the Board’s sole discretion which are not addressed herein in accordance with the applicable laws and regulations.

Resolution:

4. To approve the amendment to the Articles of Incorporation (Proposed by the Board of Directors)

Explanation:

(1) To meet actual needs, it is proposed to amend the Articles of Incorporation.
(2) The comparison table for the Articles of Incorporation before and after amendment is attached hereto as Attachment 4 (pages 34).

Resolution:

5. To approve the amendment to Handling Procedures for Acquisition or Disposal of Assets and Handling Procedures for Conducting Derivative Transactions (Proposed by the Board of Directors)

Explanation:

(1) To comply with the articles and meet actual needs, it is proposed to amend the Handling Procedures for Acquisition or Disposal of Assets and Handling Procedures for Conducting Derivative Transactions.
(2) The comparison table for before and after the amendment are attached hereto as Attachment 5 and 6(pages 35-40).

Resolution:

6. To approve the amendment to Handling Procedures for Lending Funds to Other Parties and Handling Procedures for Endorsements and Guarantees (proposed by the Board of Directors)

Explanation:

(1) To comply with the articles and meet actual needs, it is proposed to amend the Handling Procedures for Lending Funds to Other Parties and Handling Procedures for Endorsements and Guarantees.
(2) The comparison table for before and after the amendment are attached hereto as Attachment 7 and 8(pages 41-47)

Resolution:

10  Recognition and Discussion Items

7. To lift non-competition restrictions on current directors and their representatives (proposed by the Board of Directors)

Explanation:

(1) According to Article 209 of the Company Act, any Director conducting business for himself/herself/itself or on another’s behalf, the scope of which business is within the scope of the Company’s business, shall explain at the Shareholders’ Meeting the essential contents of such conduct, and obtain approval from shareholders in the Meeting.
(2) It is proposed for the 2021 annual shareholders meeting to approve lifting non-competition restrictions on directors as who may invest or operate a business which is similar to the business scope of the Company.
(3) The list of non-competition restrictions proposed to be lifted by the Company on each Director is attached hereto as Attachment 9 (page 48).

Resolution:

III. Extraordinary Motions

IV. Meeting Adjourn

Attachment 1  11

Independent Auditors’ Report and 2020 Financial Statements

2020 Consolidated Financial Statements

Independent Auditors’ Report

The Board of Directors of Qisda Corporation:

Opinion

We have audited the consolidated financial statements of Qisda Corporation and its subsidiaries (the “Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the paragraph on Other Matter of our report), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the International Financial Reporting Standards, International Accounting Standards, interpretations, as well as related guidance endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the paragraph on the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

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

Key audit matters for the Group’s consolidated financial statements for the year ended December 31, 2020 are stated as follows:

Revenue recognition

Please refer to notes 4(r) and 6(y) for the accounting policy on revenue recognition and “Revenue” for the related disclosures, respectively, of the notes to the consolidated financial statements.

Description of key audit matter:

The Group has several operating segments. Each segment engages in different business activities. In addition, the Group has operations spread globally. The Group recognizes its revenue depending on the various trade terms in each individual sale transaction and service rendered, which are considered to be complex in determining the timing of revenue recognition. Therefore, revenue recognition has been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matters above, our principal audit procedures included testing the design and operating effectiveness of the Group’s internal controls over financial reporting in the sales and collection cycle; assessing whether revenue is recognized based on the trade terms with customers through reviewing the related sales contracts or other trade documents; performing a sample test on sales transactions that took place before and after the balance sheet date

12  Attachment 1

to determine whether the performance obligation has been satisfied by transferring control over the goods or services to a customer, and assessing the accuracy of the timing of revenue recognition; reviewing and understanding the reasonableness for any identified significant sales returns and allowances that took place after the balance sheet date, as well as assessing the completeness of the revenue and related sales returns and allowances.

2. Valuation of inventories

Please refer to notes 4(h), 5 and 6(f) for the inventory accounting policy, “Critical accounting judgments and key sources of estimation uncertainty” for estimation uncertainty of inventory valuation, and “Inventories” for the related disclosures, respectively, of the notes to the consolidated financial statements.

Description of key audit matter:

Inventories are measured at the lower of cost and net realizable value. Due to the rapid technological innovations and highly competitive environments in the electronic industry, the life cycle of certain products of the Group are short and their market prices fluctuate rapidly, which could possibly result in a price decline and obsolescence of inventory, wherein the inventory cost may exceed its net realizable value. Therefore, the valuation of inventories has been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included reviewing the inventory of aging report and analyzing the fluctuation of inventory aging; selecting samples to verify the accuracy of the net realizable value of inventories and inventory aging report prepared by the Group; evaluating whether valuation of inventories was accounted for in accordance with the Group’s accounting policies; and assessing the historical reasonableness of management’s estimates on inventory provisions.

3. Business combination

Please refer to notes 4(w) and 6(i) for the accounting policy on business combination, and “Business Combination” for the related disclosures, respectively, of the notes to the consolidated financial statements.

Description of key audit matter:

The Group acquired 19.02% ownership of Alpha Networks Inc. through public tender offer in July 2020, wherein the Group's ownership interest in Alpha Networks Inc. increased from 23.84% to 42.86%; therefore, it is assessed that the Group obtained control over it. To adopt the accounting treatment of business combination, the management needs to determine the fair value of the identifiable assets and liabilities. The assessment is complex and involves significant assumptions and estimation. Accordingly, the assessment of business combination has been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included obtaining the purchase price allocation report with valuation of intangible assets conducted by an external expert engaged by the management; and auditing the acquired assets and liabilities identified by the management including any fair value adjustment at the acquisition date. In doing so, we have consulted internal valuation specialists to assist in evaluating the reasonableness of the valuation model and key assumptions used. We have also confirmed that correct accounting treatment has been applied and appropriate disclosures with respect to the acquisition has been made.

Impairment of goodwill

Please refer to notes 4(p), 5 and 6(m) for the accounting policy on impairment of non-financial assets, “Critical accounting judgments and key sources of estimation uncertainty”, for estimation uncertainty of impairment of goodwill, and “Intangible assets”, and for the related disclosures, respectively, of the notes to the consolidated financial statements.

Description of key audit matter:

Goodwill arising from acquisition of subsidiaries are annually subject to impairment test or when there are indications that goodwill may have been impaired. The assessment of the recoverable amount of goodwill involves management’s judgment and estimation. Accordingly, the assessment of impairment of goodwill has been identified as one of the key audit matters.

How the matter was addressed in our audit:

Attachment 1  13

the recoverable amount; performing a sensitivity analysis of key assumptions and results; and assessing the adequacy of the Group’s disclosures with respect to the related information.

Other Matter

We did not audit the financial statements of certain subsidiaries of the Group. Those financial statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for those subsidiaries, is based solely on the report of other auditors. The financial statements of those subsidiaries reflect the total assets amounting to NT$11,354,280 thousand and NT$9,195,065 thousand, respectively, constituting 6.65% and 6.76%, respectively, of the consolidated total assets as of December 31, 2020 and 2019, and the total operating revenues amounting to NT$10,841,023 thousand and NT$9,600,253 thousand, respectively, constituting 5.66% and 5.66%, respectively, of the consolidated total operating revenues for the years ended December 31, 2020 and 2019.

Qisda Corporation has additionally prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion with other matter section.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

14  Attachment 1

date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Tzu-Chieh Tang and Huei-Chen Chang.

KPMG

Taipei, Taiwan (Republic of China) March 23, 2021

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China. The independent auditors’ audit report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and consolidated financial statements, the Chinese version shall prevail.

Attachment 1  15

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss－current 1120 Financial assets at fair value through other comprehensive income －current 1170 Notes and accounts receivable, net 1181 Notes and accounts receivable from related parties 1200 Other receivables 1210 Other receivables from related parties 130X Inventories 1470 Other current assets 1476 Other financial assets－current 1461 Non-current assets held for sale Total current assets Non-current assets: 1510 Financial assets at fair value through profit or loss－non-current 1517 Financial assets at fair value through other comprehensive income －non-current 1550 Investments accounted for using the equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 1980 Other financial assets－non-current Total non-current assets	December 31,	2020	December 31,	2019
	Amount	%	Amount	%
	$ 22,540,418 389,043 96,281 33,221,557 3,280,369 675,888 302,399 35,139,333 3,076,818 2,709,546 892,117 102,323,769 173,731 1,381,399 16,308,434 30,188,228 4,706,556 3,561,030 9,118,895 1,727,832 358,923 963,152 68,488,180	13 - - 19 2 - - 21 2 2 1 60 - 1 10 18 3 2 5 1 - - 40	10,780,507 665,037 134,479 28,904,355 2,395,806 584,859 284,450 27,890,837 1,776,711 4,915,705 - 78,332,746 120,399 1,222,603 17,778,476 23,915,978 3,502,536 3,404,112 5,069,111 1,607,147 817,349 256,036 57,693,747	8 1 - 21 2 - - 21 1 4 - 58 - 1 13 18 2 2 4 1 1 - 42

$ 170,811,949 100 136,026,493 100

Total assets

16  Attachment 1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity Current liabilities: 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss－current 2130 Contract liabilities－current 2170 Notes and accounts payable 2180 Accounts payable to related parties 2200 Other payables 2220 Other payables to related parties 2260 Liabilities related to non-current assets held for sale 2300 Other current liabilities 2365 Refund liabilities—current 2321 Current portion of bonds payable 2322 Current portion of long-term debt 2280 Lease liabilities－current 2282 Lease liabilities to related parties－current 2250 Provisions－current Total current liabilities Non-current liabilities: 2503 Financial liabilities at fair value through profit or loss－non-current 2540 Long-term debt 2580 Lease liabilities－non-current 2582 Lease liabilities to related parties－non-current 2550 Provisions－non-current 2570 Deferred income tax liabilities 2670 Other non-current liabilities Total non-current liabilities Total liabilities Equity attributable to shareholders of the Company : 3110 Common stock 3260 Capital surplus 3300 Retained earnings 3400 Other equity Total equity attributable to shareholders of the Company 36XX Non-controlling interests Total equity Total liabilities and equity	December 31,	2020	December 31,	2019
	Amount	%	Amount	%
	$ 21,131,930 139,661 1,862,107 38,398,784 2,127,536 13,331,307 16,151 358,207 796,592 2,340,052 526,507 536,537 368,303 86,737 808,823 82,829,234 78,123 22,366,798 1,473,817 91,779 687,601 1,674,510 2,646,867 29,019,495 111,848,729 19,667,820 1,879,501 15,742,825 (1,264,645) 36,025,501 22,937,719 58,963,220 $ 170,811,949	12 - 1 23 1 8 - - 1 1 - - - - 1 48 - 13 1 - - 1 2 17 65 12 1 9 (1) 21 14 35 100	19,902,070 50,046 1,559,356 29,010,933 1,836,690 9,875,371 17,388 - 389,032 1,818,468 - 400,143 321,418 85,237 441,084 65,707,236 95,860 16,674,667 1,420,402 186,050 609,373 976,539 2,320,772 22,283,663 87,990,899 19,667,820 2,220,653 12,663,994 (608,508) 33,943,959 14,091,635 48,035,594 136,026,493	15 - 1 21 2 7 - - - 2 - - - - - 48 - 12 1 - 1 1 2 17 65 14 2 9 - 25 10 35 100

Attachment 1  17

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019

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

2020		2019
Amount	%	Amount	%
$ 191,701,702 (164,874,913) 26,826,789 (10,666,420) (4,682,842) (4,920,678) 56,005 (20,213,935) 6,612,854 292,609 183,320 1,382,283 (757,999) 499,569 1,599,782 8,212,636 (1,846,075) 6,366,561 (51,838) 176,109 287,056 - 411,327 (652,622) (86,899) - (739,521) (328,194) $ 6,038,367 $ 4,988,479 1,378,082 $ 6,366,561 $ 4,630,462 1,407,905 $ 6,038,367 $	100 (86) 14 (6) (2) (3) - (11) 3 - - 1 - - 1 4 (1) 3 - - - - - - - - - - 3 2 1 3 2 1 3 2.54 2.51	169,754,115 (146,704,246) 23,049,869 (9,413,953) (3,476,106) (3,896,408) (35,315) (16,821,782) 6,228,087 288,657 215,570 1,224,188 (1,011,241) (1,000,270) (283,096) 5,944,991 (1,535,347) 4,409,644 (29,194) 322,863 63,955 - 357,624 (643,639) (231,010) - (874,649) (517,025) 3,892,619 3,575,055 834,589 4,409,644 3,139,647 752,972 3,892,619	100 (86) 14 (6) (2) (2) - (10) 4 - - 1 (1) - - 4 (1) 3 - - - - - (1) - - (1) (1) 2 2 1 3 2 - 2 1.82 1.80
$

18  Attachment 1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) QISDA CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

				Attribu	table to sharehold	ers of the Company					Non-controllin g interests	Total equity
Common stock	Capital surplus		Retain	ed earnings			Total other equity	interest		Total equity of the Company
		Legal reserve	Special reserve	Unappropriated earnings	Total retained earnings	Foreign currency translation differences	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Remeasurements of defined benefitplans	Total other equity interest
$ 19,667,820 -	2,146,076 -	1,422,973 -	383,979 -	8,994,893 (45,819)	10,801,845 (45,819)	128,329 -	46,990 -	(343,741) -	(168,422) -	32,447,319 (45,819)	7,412,327 (13,868)	39,859,646 (59,687)
19,667,820	2,146,076	1,422,973	383,979	8,949,074	10,756,026	128,329	46,990	(343,741)	(168,422)	32,401,500	7,398,459	39,799,959
- -	- -	- -	- -	3,575,055 -	3,575,055 -	- (785,841)	- 367,740	- (17,307)	- (435,408)	3,575,055 (435,408)	834,589 (81,617)	4,409,644 (517,025)
-	-	-	-	3,575,055	3,575,055	(785,841)	367,740	(17,307)	(435,408)	3,139,647	752,972	3,892,619
- - - - - - - - - - -	- - - 61,100 - - - 10,242 3,235 - -	403,506 - - - - - - - - - -	- (215,557) - - - - - - - - -	(403,506) 215,557 (1,671,765) - 4,678 - - - - - -	- - (1,671,765) - 4,678 - - - - - -	- - - - - - - - - - -	- - - - (4,678) - - - - - -	- - - - - - - - - - -	- - - - (4,678) - - - - - -	- - (1,671,765) 61,100 - - - 10,242 3,235 - -	- - - 1,631 - (481,403) 109,341 (265,028) (3,235) 5,247 6,573,651	- - (1,671,765) 62,731 - (481,403) 109,341 (254,786) - 5,247 6,573,651
19,667,820	2,220,653	1,826,479	168,422	10,669,093	12,663,994	(657,512)	410,052	(361,048)	(608,508)	33,943,959	14,091,635	48,035,594
- -	- -	- -	- -	4,988,479 -	4,988,479 -	- (756,355)	- 459,397	- (61,059)	- (358,017)	4,988,479 (358,017)	1,378,082 29,823	6,366,561 (328,194)
-	-	-	-	4,988,479	4,988,479	(756,355)	459,397	(61,059)	(358,017)	4,630,462	1,407,905	6,038,367
- - - - - - - - - - -	- - - (124,813) - - (168,911) (47,428) - - -	357,505 - - - - - - - - - -	- 440,086 - - - - - - - - -	(357,505) (440,086) (1,475,086) - - - (732,682) - - - 298,120	- - (1,475,086) - - - (732,682) - - - 298,120	- - - - - - - - - - -	- - - - - - - - - - (298,120)	- - - - - - - - - - -	- - - - - - - - - - (298,120)	- - (1,475,086) (124,813) - - (901,593) (47,428) - - -	- - - 3,279 (953,794) 163,598 (2,331,395) 47,428 9,381 10,499,682 -	- - (1,475,086) (121,534) (953,794) 163,598 (3,232,988) - 9,381 10,499,682 -
$ 19,667,820	1,879,501	2,183,984	608,508	12,950,333	15,742,825	(1,413,867)	571,329	(422,107)	(1,264,645)	36,025,501	22,937,719	58,963,220

Attachment 1  19

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Income before income tax Adjustments for: Adjustments to reconcile profit or loss: Depreciation Amortization Expected credit loss (reversal of impairment loss) Interest expense Interest income Dividend income Share-based compensation cost Share of losses (profits) of associates and joint ventures Loss on disposal of property, plant and equipment Gain on disposal of non-current assets held for sale Gain on disposal of investments Gain on bargain purchase Impairment loss on non-financial assets Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Increase in financial assets at fair value through profit or loss Decrease in notes and accounts receivable Decrease (increase) in notes and accounts receivable from related parties Decrease (increase) in other receivable Increase in other receivable from related parties Decrease in inventories Decrease (increase) in other current assets Increase in other non-current assets Net changes in operating assets Changes in operating liabilities: Increase in financial liabilities at fair value through profit or loss Increase (decrease) in notes and accounts payable Increase (decrease) in accounts payable to related parties Increase (decrease) in other payable to related parties Increase in provisions Decrease in contract liabilities Increase (decrease) in other payables and other current liabilities Decrease in other non-current liabilities Net changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash provided by operations Interest received Dividends received Interest paid Income taxes paid Net cash provided by operating activities	2020	2019
	$ 8,212,636 3,231,959 643,665 (56,005) 757,999 (292,609) (71,863) 9,381 (499,569) 138 - (690,884) - 6,585 3,038,797 (74,056) 1,516,316 (884,563) (68,086) (17,949) 329,998 (353,054) (113,240) 335,366 62,902 2,820,049 283,246 (1,237) 241,706 (167,797) 856,091 (62,441) 4,032,519 4,367,885 7,406,682 15,619,318 277,138 367,769 (833,269) (862,207) 14,568,749	5,944,991
		2,849,596 437,162 35,315 1,011,241 (288,657) (55,060) 5,247 1,000,270 16,478 (1,775) (440,789) (26,175) -
		4,542,853
		(922) 49,251 701,655 12,118 (16,954) 1,606,880 610,357 (460,049)
		2,502,336
		2,071 (2,232,928) (423,805) 3,994 18,319 (226,513) (504,618) (48,012)
		(3,411,492)
		(909,156)
		3,633,697
		9,578,688 272,616 765,669 (948,558) (1,193,114)
		8,475,301

20  Attachment 1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Continued) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Purchase of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Purchase of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Purchase of investments accounted for using the equity method Proceeds from disposal of investments accounted for using the equity method Cash decrease in disposal groups classified as held for sale Proceeds from disposal of non-current assets held for sale Additions to property, plant and equipment Proceeds from disposal of property, plant and equipment Additions to intangible assets Additions to investment property Decrease (increase) in other financial assets Acquisition of subsidiaries, net of cash received from Net cash flows used in investing activities Cash flows from financing activities: Increase in short-term borrowings Decrease in short-term borrowings Decrease in short-term notes and bills payable Increase in long-term debt Repayments of long-term debt Increase in guarantee deposits received Payment of lease liabilities Cash dividends distributed to shareholders Cash dividends paid to non-controlling interests Acquisition of subsidiary’s interests from non-controlling interests Proceeds from disposal of subsidiary’s interests (without losing control) Capital injection from non-controlling interests Net cash used in financing activities Effects of foreign exchange rate changes Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	2020	2019
	$ (61,500) 259,792 49,878 (579,752) 953,451 (635,525) 20,000 (107,704) - (4,722,802) 137,680 (232,477) (6,148) 1,695,224 1,952,767 (1,277,116) 5,549,460 (7,384,732) - 16,566,501 (10,878,626) 15,579 (505,312) (1,475,086) (953,794) (3,232,988) - 163,598 (2,135,400) 603,678 11,759,911 10,780,507 $ 22,540,418	(265,241) 14,117 - (1,285,000) 1,154,900 - 396,967 - 6,131 (2,533,632) 27,016 (121,414) (98) (4,600,235) 953,871
		(6,252,618)
		15,207,301 (12,241,274) (130,000) 18,274,062 (20,541,109) 1,288,059 (450,383) (1,671,765) (481,403) (330,850) 77,734 109,341
		(890,287)
		(170,546)
		1,161,850 9,618,657
		10,780,507

Attachment 1  21

2019 Parent Company Only Financial Statements

Independent Auditors’ Report

The Board of Directors of Qisda Corporation:

Opinion

We have audited the parent-company-only financial statements of Qisda Corporation (the “Company”), which comprise the parent-company-only balance sheets as of December 31, 2020 and 2019, and the parent-company-only statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent-company-only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the paragraph on Other Matter of our report), the accompanying parent-company-only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audit of the parent-company-only financial statements as of and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the parent-company-only financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the paragraph on the Auditors’ Responsibilities for the Audit of the parent-company-only Financial Statements of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

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

Key audit matters for the Company’s parent-company-only financial statements for the year ended December 31, 2020 are stated as follows:

Revenue recognition

Please refer to notes 4(p) and 6(u) for the accounting policy on revenue recognition and “Revenue” for the related disclosures, respectively, of the notes to the parent-company-only financial statements.

Description of key audit matter:

The Company recognizes its revenue depending on the various trade terms in each individual sale transaction and service rendered, which are considered to be complex in determining the timing of revenue recognition. Therefore, revenue recognition has been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matters above, our principal audit procedures included testing the design and operating effectiveness of the Company’s internal controls over financial reporting in the sales and collection cycle; assessing whether revenue is recognized based on the trade terms with customers through reviewing the related sales contracts or other trade documents; performing a sample test on the sales transactions that took place before and after the balance sheet date to determine whether the performance obligation has been satisfied by transferring control over the goods or services to a customer, and assessing the accuracy of the timing of revenue recognition; reviewing and understanding the

22  Attachment 1

reasonableness for any identified significant sales returns and allowances that took place after the balance sheet date, as well as assessing the completeness of the revenue and related sales returns and allowances.

2. Valuation of inventories

Please refer to notes 4(g), 5 and 6(f) for the inventory accounting policy, “Critical accounting judgments and key sources of estimation uncertainty” for estimation uncertainty of inventory valuation, and “Inventories” for the related disclosures, respectively, of the notes to the parent-company-only financial statements.

Description of key audit matter:

Inventories are measured at the lower of cost and net realizable value. Due to the rapid technological innovations and highly competitive environments in the electronic industry, the life cycle of certain products of the Company are short and their market prices fluctuate rapidly, which could possibly result in a price decline and obsolescence of inventory, wherein the inventory cost may exceed its net realizable value. Therefore, the valuation of inventories has been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included reviewing the inventory of aging report and analyzing the fluctuation of inventory aging; selecting samples to verify the accuracy of the net realizable value of inventories and inventory aging report prepared by the Company; evaluating whether valuation of inventories was accounted for in accordance with the Company’s accounting policies; and assessing the historical reasonableness of management’s estimates on inventory provisions.

Acquisition of subsidiaries

Please refer to notes 4(t) and 6(g) for the accounting policy on business combination, and the related disclosures on acquisition of subsidiaries, respectively, of the notes to the parent-company-only financial statements.

Description of key audit matter:

The Company acquired 19.02% ownership of Alpha Networks Inc. through public tender offer in July 2020, wherein the Company and its subsidiaries' ownership interest in Alpha Networks Inc. increased to 42.86%; therefore, it is assessed that the Company obtained control over it. To adopt the accounting treatment of business combination, the management needs to determine the fair value of the identifiable assets and liabilities. The assessment is complex and involves significant assumptions and estimation. Accordingly, the assessment of acquisition of subsidiaries has been identified as one of the key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included obtaining the purchase price allocation report with valuation on intangible assets, conducted by an external expert engaged by the management; and auditing the acquired assets and liabilities identified by the management including any fair value adjustment at the acquisition date. In doing so, we have consulted internal valuation specialists to assist in evaluating the reasonableness of the valuation model and key assumptions used. We have also confirmed that correct accounting treatment has been applied and appropriate disclosures with respect to the acquisition has been made.

Assessment of impairment of goodwill from investments in subsidiaries

Please refer to notes 4(n), 5 and 6(g) for the accounting policy on impairment of non-financial assets, “Critical accounting judgments and key sources of estimation uncertainty”, for the estimation uncertainty of impairment of goodwill, and “Investments accounted for using the equity method,” and for the related disclosures, respectively, of the notes to the parent-company-only financial statements.

Description of key audit matter:

Goodwill arising from acquisition of subsidiaries, which are included in the carrying amount of investments accounted for using the equity method. Goodwill are annually subject to impairment test or when there are indications that goodwill may have been impaired. The assessment of the recoverable amount of goodwill involves management’s judgment and estimation. Accordingly, the assessment of impairment of goodwill has been identified as one of the key audit matters.

Attachment 1  23

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included obtaining the assessment of goodwill impairment provided by the management; assessing the appropriateness of the valuation model and key assumptions, including the discount rate, expected growth rate and future cash flow projections, used by the management in measuring the recoverable amount; performing a sensitivity analysis of key assumptions and results; and assessing the adequacy of the Company’s disclosures with respect to the related information.

Other Matter

We did not audit the financial statements of certain investees accounted for using the equity method of the Company. Those financial statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for those investees, is based solely on the report of other auditors. Those investments accounted for using the equity method amounted to NT$5,666,505 thousand and NT$4,756,920 thousand, respectively, constituting 6.27% and 5.64%, respectively, of the total assets as of December 31, 2020 and 2019, and the related shares of profit of subsidiaries, associates and joint ventures amounted to NT$260,766 thousand and NT$366,655 thousand, respectively, constituting 4.97% and 9.54%, respectively, of the total income before income tax for the years ended December 31, 2020 and 2019.

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

Management is responsible for the preparation and fair presentation of the parent-company-only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent-company-only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

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

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

Identify and assess the risks of material misstatement of the parent-company-only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

24  Attachment 1

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent-company-only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent-company-only financial statements, including the disclosures, and whether the parent-company-only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the investees accounted for using the equity method to express an opinion on the parent-company-only financial statements. We are responsible for the direction, supervision and performance of the audit. We remained solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent-company-only financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Tzu-Chieh Tang and Huei-Chen Chang.

KPMG

Taipei, Taiwan (Republic of China) March 23, 2021

Notes to Readers

The accompanying parent-company-only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent-company-only financial statements are those generally accepted and applied in the Republic of China. The independent auditors’ audit report and the accompanying parent-company-only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and parent-company-only financial statements, the Chinese version shall prevail.

Attachment 1  25

(English Translation of Financial Statements Originally Issued in Chinese)

QISDA CORPORATION Parent-Company-Only Balance Sheets December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019
Amount	%	Amount	%
$ 865,308 56,157 9,073,131 14,017,651 1 2,531 4,433,192 109,930 28,557,901 37,438 58,752,284 1,513,839 550,191 262,739 12,327 436,876 101,771 122,110 61,789,575	1 - 10 16 - - 5 - 32 - 65 2 1 - - - - - 68	1,052,856 37,441 10,926,651 14,778,027 819 1,448 5,145,732 136,605 32,079,579 48,438 49,095,776 1,519,417 940,549 - 10,851 517,564 21,198 40,222 52,194,015	1 - 13 18 - - 6 -
			38
			- 58 2 1 - - 1 - -
			62

$ 90,347,476 100 84,273,594 100

Total assets

26  Attachment 1

(English Translation of Financial Statements Originally Issued in Chinese)

QISDA CORPORATION Parent-Company-Only Balance Sheets December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019
Amount	%	Amount	%
$ 6,227,600 8,744 305,119 1,311,156 23,527,390 1,976,962 5,865 425,226 113,606 4,448 26,371 81,721 1,247,436 35,261,644 17,819,303 753,499 - 75,259 21,745 390,525 19,060,331 54,321,975 19,667,820 1,879,501 15,742,825 (1,264,645) 36,025,501 $ 90,347,476	7 - - 2 26 2 - - - - - - 2 39 20 1 - - - - 21 60 22 2 17 (1) 40 100	7,190,000 - 252,903 1,314,927 25,741,413 1,780,866 9,931 100,000 111,584 4,770 21,516 59,946 1,115,317 37,703,173 11,347,582 867,105 4,448 82,009 10,292 315,026 12,626,462 50,329,635 19,667,820 2,220,653 12,663,994 (608,508) 33,943,959 84,273,594	9 - - 2 31 2 - - - - - - 1
			45
			14 1 - - - -
			15
			60
			23 3 15 (1)
			40
			100

Attachment 1  27

(English Translation of Financial Statements Originally Issued in Chinese) QISDA CORPORATION

Parent-Company-Only Statements of Comprehensive Income For the years ended December 31, 2020 and 2019

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

2020		2019
Amount	%	Amount	%
$ 92,411,291 (87,422,698) 4,988,593 100,943 5,089,536 (1,089,249) (861,008) (2,161,744) 3,876 (4,108,125) 981,411 11,344 169,874 705,622 (362,091) 3,744,772 4,269,521 5,250,932 (262,453) 4,988,479 (84,860) (11,000) 494,198 - 398,338 (756,355) - (756,355) (358,017) $ 4,630,462 $	100 (95) 5 - 5 (1) (1) (2) - (4) 1 - - 1 - 4 5 6 (1) 5 - - - - - - - - - 5 2.54 2.51	98,496,920 (92,860,543) 5,636,377 (89,249) 5,547,128 (1,094,220) (672,893) (1,980,680) (4,033) (3,751,826) 1,795,302 19,759 154,209 242,948 (434,209) 2,062,876 2,045,583 3,840,885 (265,830) 3,575,055 (21,181) 14,688 356,926 - 350,433 (785,841) - (785,841) (435,408) 3,139,647	100 (94)
			6 -
			6
			(1) (1) (2) -
			(4)
			2
			- - - - 2
			2
			4 -
			4
			- - - -
			-
			(1) -
			(1)
			(1)
			3
			1.82
$			1.80

28  Attachment 1

(English Translation of Financial Statements Originally Issued in Chinese)

QISDA CORPORATION

Parent-Company-Only Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Common stock	Capital surplus		Retained	earnings			Total other equity interest	Total other equity interest		Total equity
		Legal reserve	Special reserve	Unappropriat ed earnings	Total retained earnings	Foreign currency translation differences	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Remeasurem ents of defined benefitplans	Total other equity interest
$ 19,667,820 -	2,146,076 -	1,422,973 -	383,979 -	8,994,893 (45,819)	10,801,845 (45,819)	128,329 -	46,990 - 46,990 - 367,740 367,740 - - - - - (4,678) 410,052 - 459,397 459,397 - - - - - (298,120) 571,329	(343,741) -	(168,422) -	32,447,319 (45,819)
19,667,820	2,146,076	1,422,973	383,979	8,949,074	10,756,026	128,329		(343,741)	(168,422)	32,401,500
- -	- -	- -	- -	3,575,055 -	3,575,055 -	- (785,841)		- (17,307)	- (435,408)	3,575,055 (435,408)
-	-	-	-	3,575,055	3,575,055	(785,841)		(17,307)	(435,408)	3,139,647
- - - - - -	- - - 64,335 10,242 -	403,506 - - - - -	- (215,557) - - - -	(403,506) 215,557 (1,671,765) - - 4,678	- - (1,671,765) - - 4,678	- - - - - -		- - - - - -	- - - - - (4,678)	- - (1,671,765) 64,335 10,242 -
19,667,820 - -	2,220,653 - -	1,826,479 - -	168,422 - -	10,669,093 4,988,479 -	12,663,994 4,988,479 -	(657,512) - (756,355)		(361,048) - (61,059)	(608,508) - (358,017)	33,943,959 4,988,479 (358,017)
-	-	-	-	4,988,479	4,988,479	(756,355)		(61,059)	(358,017)	4,630,462
- - - - - -	- - - (172,241) (168,911) -	357,505 - - - - -	- 440,086 - - - -	(357,505) (440,086) (1,475,086) - (732,682) 298,120	- - (1,475,086) - (732,682) 298,120	- - - - - -		- - - - - -	- - - - - (298,120)	- - (1,475,086) (172,241) (901,593) -
$ 19,667,820	1,879,501	2,183,984	608,508	12,950,333	15,742,825	(1,413,867)		(422,107)	(1,264,645)	36,025,501

Attachment 1  29

(English Translation of Financial Statements Originally Issued in Chinese) QISDA CORPORATION

Parent-Company-Only Statements of Cash Flows

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Income before income tax Adjustments for: Adjustments to reconcile profit or loss: Depreciation Amortization Expected credit loss (reversal of impairment loss) Interest expense Interest income Dividend income Share of profits of subsidiaries, associates and joint ventures Gain on disposal of property, plant and equipment Gain on disposal of investments Gain on bargain purchase Unrealized (realized) profit on sales to subsidiaries, associates and joint ventures Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Increase in financial assets at fair value through profit or loss Decrease (increase) in notes and accounts receivable Decrease in notes and accounts receivable from related parties Decrease in other receivable Increase in other receivable from related parties Decrease (increase) in inventories Decrease (increase) in other current assets Increase in other non-current assets Net changes in operating assets Changes in operating liabilities: Increase (decrease) in financial liabilities at fair value through profit or loss Decrease in notes and accounts payable Increase (decrease) in accounts payable to related parties Increase (decrease) in other payable to related parties Decrease in provisions Increase (decrease) in contract liabilities Increase (decrease) in other payables and other current liabilities Decrease in other non-current liabilities Net changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash provided by operations Interest received Dividends received Interest paid Income taxes paid Net cash provided by operating activities	2020 $ 5,250,932 221,622 19,553 (3,876) 362,091 (11,344) (1,750) (3,744,772) - (460,696) - (100,943) (3,720,115) (18,716) 1,857,396 760,376 818 (1,083) 712,540 26,675 (85,538) 3,252,468 8,744 (3,771) (2,214,023) (4,066) (1,895) 52,216 247,495 (9,362) (1,924,662) 1,327,806 (2,392,309) 2,858,623 11,344 906,838 (359,873) (85,397) 3,331,535	2019 3,840,885
		209,757 13,877 4,033 434,209 (19,759) (2,250) (2,062,876) (1,485) (19,175) (20,958) 89,249
		(1,375,378)
		(23,692) (732,412) 1,942,672 225,837 (1,448) (861,916) (36,678) (4,144)
		508,219
		(2,388) (766,752) 1,218,717 3,193 (2,301) (131,918) 76,748 (52,619)
		342,680
		850,899
		(524,479)
		3,316,406 19,759 2,324,826 (428,178) (122,729)
		5,110,084

30  Attachment 1

(English Translation of Financial Statements Originally Issued in Chinese) QISDA CORPORATION

Parent-Company-Only Statements of Cash Flows (Continued)

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Purchase of investments accounted for using the equity method Proceeds from investees' capital reduction Additions to property, plant and equipment Proceeds from disposal of property, plant and equipment Additions to intangible assets Decrease (increase) in other financial assets Net cash flows used in investing activities Cash flows from financing activities: Increase (decrease) in short-term borrowings Increase in long-term debt Repayments of long-term debt Payment of lease liabilities Cash dividends distributed to shareholders Net cash provided by (used in) financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year ash and cash equivalents at end of year	2020	2019
	(7,591,175) - (88,425) - (21,029) (81,888) (7,782,517) (962,400) 9,238,864 (2,421,590) (116,354) (1,475,086) 4,263,434 (187,548) 1,052,856 $ 865,308	(3,473,583) 2,628 (125,035) 6,943 (18,133) 1,856
		(3,605,324)
		2,040,000 16,835,882 (18,659,625) (124,367) (1,671,765)
		(1,579,875)
		(75,115) 1,127,971
		1,052,856

Attachment２  31

The 2020 Earnings Distribution Proposal

The 2020 Earnings Distribution Proposal
	Unit: NT$ 4,988,479,184 (455,391,781) (656,136,626) 3,876,950,777 8,396,415,519 298,119,920 (732,681,295) 11,838,804,921 (2,950,172,937) 8,888,631,984
Net income of 2020 Less: Provisioned as Legal reserve Less: Provisioned as Special reserve Retained earnings available for distribution in 2020 Add: Unappropriated retained earnings from previous years Add: Disposal of financial assets measured at fair value through other comprehensive income by investment accounted for using the equity method and subsidiaries Less: Difference between consideration and carrying amount arising from acquisition or disposal of shares in subsidiaries Retained earnings available for distribution as of December 31, 2020 Distributable Items Cash Dividend（NT$1,500 for every 1,000 common shares） Unappropriated retained earnings after earnings distribution

The 2020 Earnings Distribution Proposal

Unit: NT$ 4,988,479,184
(455,391,781)
(656,136,626)
3,876,950,777
8,396,415,519
298,119,920
(732,681,295)
11,838,804,921
(2,950,172,937)
8,888,631,984

Net income of 2020
Less: Provisioned as Legal reserve
Less: Provisioned as Special reserve
Retained earnings available for distribution in 2020
Add: Unappropriated retained earnings from previous years
Add: Disposal of financial assets measured at fair value through other comprehensive income by
investment accounted for using the equity method and subsidiaries
Less: Difference between consideration and carrying amount arising from acquisition or disposal of
shares in subsidiaries
Retained earnings available for distribution as of December 31, 2020
Distributable Items
Cash Dividend（NT$1,500 for every 1,000 common shares）
Unappropriated retained earnings after earnings distribution

Note:

The cash dividend distribution to each shareholder will be paid to the rounded-down full NT dollar. Amounts less than one whole NT dollar are rounded-down to the nearest NT dollar. The aggregate unpaid cash dividend resulting from the above rounded-down, will be distributed to shareholders in the descending order of decimal point and the ascending order of shareholder account numbers, until the total amount of the approved cash dividend has been fully distributed.

32  Attachment 3

Qisda Corporation

Terms and Conditions for Issuance of Overseas or Domestic Convertible Bonds in Private Placement (Tentative)

1. Issuer

Qisda Corporation (“Issuer” or “Qisda”).

2. Issuance Size

The Board of Directors (“Board”) is authorized, within the limit of 195,000,000 common shares and preferred shares to issue new common shares for cash to sponsor issuance of the overseas depositary shares (“DRs”) and/or issue new common shares for cash in public offering and/or issue new preferred shares for cash in public offering and/or issue new common shares in private placement and/or issue overseas or domestic convertible bonds in private placement (“Private Placement CB”). For issuance of Private Placement CB, the number of common shares to be converted within the limit of 195,000,000 common shares shall be calculated in accordance with the conversion price determined at the time of issuance of Private Placement CB.

3. Issuance Date

The Private Placement CB will be issued in one tranche within one year after the 2021 annual general shareholders’ meeting.

4. Issuance Method

The Private Placement CB will be issued in accordance with Article 43-6 of the Securities and Exchange Act and the regulations of the jurisdiction where the Private Placement CB is issued. The investors subscribing to the Private Placement CB must meet the qualifications listed in Article 43-6 of the Securities and Exchange Act and are limited to strategic investor(s). Priority will be given to the investor(s) who could benefit the Company's long-term development, competitiveness, and existing shareholders' rights. The Board is fully authorized to determine the specific investor(s). The purpose, necessity and projected benefits for having strategic investor(s) are to accommodate the Company’s operation and development needs to have the strategic investor(s) to assist the Company, directly or indirectly, in its finance, business, manufacturing, technology, procurement, management, and strategy development, etc. so to strengthen the Company’s competitiveness and enhance its operational efficiency and long-term development.

5. Form, Denomination and Issuance Price

The Private Placement CB will be issued in registered form in denomination of US$10,000 or multiples thereof or NT$100,000 or multiples thereof and the issue price shall be no less than 80% of the theoretical price.

6. Coupon Rate

To be determined by the Board based on the dynamics of the financial market.

7. Term

The term of the Private Placement CB shall not exceed seven years.

8. Redemption

Unless previously redeemed, converted, or purchased and cancelled, the Private Placement CB will be redeemed by the Issuer at the maturity date in cash at a price equal to the par value or the par value plus interest.

9. Conversion Securities

The Private Placement CB will be convertible into Qisda’s common shares.

10. Conversion

(1) Conversion Period:

Unless previously redeemed, purchased, cancelled or converted, except during the closed period the holders are not permitted to convert under the Indenture, a holder of the Private Placement CB may request the Issuer to convert the Private Placement CB into Qisda’s common shares at any time after a designated period of time following the issuance date of the Private Placement CB and until certain days prior to the maturity date in accordance with applicable rules and regulations and terms of the Indenture.

Attachment 3  33

(2) Conversion Procedure:

To exercise the relevant conversion rights attached to the Private Placement CB, the holder thereof must deposit with the Issuer a notice of conversion together with the Private Placement CB and any other documents or certificates required by R.O.C. laws.

(3) Conversion Price Determination:

The conversion price of the Private Placement CB shall be no less than 80% of (x) the simple average closing price of the Issuer’s common shares for either 1, 3 or 5 trading days prior to the pricing date, after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends, or (y) the simple average closing price of the Issuer’s common shares for 30 trading days prior to the pricing date, after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends. It is proposed for the shareholders meeting to authorize the Board to determine and adjust the actual conversion price in accordance with applicable rules and regulations.

(4) Dividend Entitlement at Conversion

Prior to conversion of the Private Placement CB, holders are not entitled to receive any dividend distribution. Following the conversion of the Private Placement CB, the rights to receive dividend payments will be the same as the other common shareholders of the Issuer.

(5) Rights and Obligations after Conversion

Except that the Private Placement CB is subject to a three-year holding period after the delivery date of the Private Placement CB under Article 43-8 of the Securities and

Exchange Act, the new common shares to be issued upon conversion of Private Placement CB will have the same rights and obligations as the common shares.

11. Early Redemption at the Option of the Issuer

To be determined by the Board.

12. Holders’ Put Option

The Issuer may elect not to grant holders’ put option, or after expiry of a designated period following issuance of the Private Placement CB, holders may require the Issuer to redeem all or part of the Private Placement CB at a price that would result in certain annual yield on the Private Placement CB.

13. Others

The Board is authorized to determine and amend, at its sole discretion, the terms and conditions of the Private Placement CB and other matters which are not addressed herein.

34  Attachment 4

Comparison table for the Articles of Incorporation before and after amendment

Article			Reason for
	After amendment	Before amendment
No			Amendments

Article 17	The Company is in a technology-intensive and capital-intensive technology industry at a developing stage coordinating with long-term capital planning and taking into account the shareholders’ cash flow requirement, the Company's dividend policy is to pay dividends from surplus considering factors to improve the growth and sustainable operation of the Company. Dividend distribution is to consider the expanding the scale of operations and cash flow requirements in the future. When the Company has a profit at the end of each fiscal year and the retained earnings available for distribution of the current year reaches 2% of the paid in capital of the Company, no less than	The Company is in a technology-intensive and capital-intensive technology industry at a developing stage coordinating with long-term capital planning and taking into account the shareholders’ cash flow requirement, the Company's dividend policy is to pay dividends from surplus considering factors to improve the growth and sustainable operation of the Company. Dividend distribution is to consider the expanding the scale of operations and cash flow requirements in the future, every year the cash portion of the dividend shall not be less than 10% of the total dividend in the form of cash and stock.	amend according to actual need
	10% of the retained earnings available for distribution of the current year shall be distributed as dividend.Every year the cash portion of the dividend shall not be less than 10% of the total dividend in the form of cash and stock.
Article 19	These Articles of Incorporation were enacted on March 23, 1984, and amended on March 29, 1984 for the first time, (Ignored.) amended on June 21, 2019 for the forty-first time, amended on June 19, 2020 for the forty-second time. amended on June 24, 2021 for the forty-third time.	These Articles of Incorporation were enacted on March 23, 1984, and amended on March 29, 1984 for the first time, (Ignored.) amended on June 21, 2019 for the forty-first time. amended on June 19, 2020 for the forty-second time.	Added amendment date

Attachment 5  35

Comparison table for the Handling Procedures for Acquisition or Disposal of Assets before and after amendment

			Reason for
Article No	After amendment	Before amendment
			Amendments

Article 4	Public disclosure of information (Ignored.) II. Abovementioned amount of transactions shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of real estate acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. III. Where any of the following circumstances occurs with respect to a transaction that the company has already publicly announced and reported in accordance with the preceding article, a public report of relevant information shall be made on the information reporting website within 2 days counting inclusively from the date of occurrence of the event:,Change, termination, or rescission of a contract signed in regard to the original transaction；The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract；Change to the originally publicly announced and reported information. IV. 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. V. 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.	Public disclosure of information (Ignored.) Abovementioned amount of transactions shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of real estate acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. II. Where any of the following circumstances occurs with respect to a transaction that the company has already publicly announced and reported in accordance with the preceding article, a public report of relevant information shall be made on the information reporting website within 2 days counting inclusively from the date of occurrence of the event:,Change, termination, or rescission of a contract signed in regard to the original transaction；The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract；Change to the originally publicly announced and reported information. III. 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. IV. 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.	Adjustment line
Article 6	The CPA’s opinion shall be obtained for acquisition or disposal of securities, membership and intangible assets or right-	The CPA’s opinion shall be obtained for acquisition or disposal of securities, membership and intangible assets or right-	Adjust reference line

36  Attachment 5

Reason for Article No After amendment Before amendment Amendments of-use assets thereof of-use assets thereof (Ignored.) (Ignored.) The calculation of the transaction amounts The calculation of the transaction amounts referred to articles 5 and this article shall be referred to articles 5 and this article shall be done in accordance with Article 4, paragraph 2 done in accordance with Article 4, paragraph 1, herein, and "within the preceding year" as used subparagraphs 6 herein, and "within the herein refers to the year preceding the date of preceding year" as used herein refers to the year occurrence of the current transaction. Items for preceding the date of occurrence of the current which an appraisal report from a professional transaction. Items for which an appraisal report appraiser or a CPA's opinion has been obtained from a professional appraiser or a CPA's opinion need not be counted toward the transaction has been obtained need not be counted toward amount. the transaction amount. Article 9 Related person transactions Related person transactions amend (Ignored.) (Ignored.) according to The calculation of the transaction amounts The calculation of the transaction amounts laws and referred to the procedures shall be made in referred to the paragraph shall be made in regulations and accordance with Article 4, paragraph 2 herein, accordance with Article 4, paragraph 1, actual need and "within the preceding year" as used herein subparagraphs 5 herein, and "within the refers to the year preceding the date of preceding year" as used herein refers to the year occurrence of the current transaction. Items that preceding the date of occurrence of the current have been approved by the board of directors transaction. Items that have been approved by and recognized by the audit committee need not the board of directors and recognized by the be counted toward the transaction amount. supervisors need not be counted toward the transaction amount. With respect to the acquisition or disposal of With respect to the acquisition or disposal of equipment or right-of-use assets thereof held for equipment or right-of-use assets thereof held for business use and real property right-of-use assets business use and real property right-of-use assets held for business use within NT$500 million held for business use within NT$500 million between the Company and its subsidiaries, or between the Company and its subsidiaries, or between its subsidiaries in which it directly or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares indirectly holds 100 percent of the issued shares or authorized capital, the Chairman may facilitate or authorized capital, the Chairman may facilitate execution and such endorsement / guarantee execution and such endorsement / guarantee shall be submitted to the next Board of shall be submitted to the next Audit CommitteeAudit Committee Directors' Meeting for ratification. and Board of Directors' Meeting for ratification. With respect to the types of transactions engage (Added.)

With respect to the acquisition or disposal of With respect to the acquisition or disposal of equipment or right-of-use assets thereof held for equipment or right-of-use assets thereof held for business use and real property right-of-use assets business use and real property right-of-use assets held for business use within NT$500 million held for business use within NT$500 million between the Company and its subsidiaries, or between the Company and its subsidiaries, or between its subsidiaries in which it directly or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares indirectly holds 100 percent of the issued shares or authorized capital, the Chairman may facilitate or authorized capital, the Chairman may facilitate execution and such endorsement / guarantee execution and such endorsement / guarantee shall be submitted to the next Board of shall be submitted to the next Audit CommitteeAudit Committee Directors' Meeting for ratification. and Board of Directors' Meeting for ratification. With respect to the types of transactions engage (Added.) in the preceding transaction, when to be conducted between the Company’s subsidiaries and their parent or subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the Company's board of directors may delegate to decide such matters when the transaction is within NT$250 million and have the decisions subsequently submitted to and ratified by the next board of directors meeting. (Ignored.) (Ignored.) Article 11 Mergers and Consolidations, Splits, Mergers and Consolidations, Splits, Adjustment Acquisitions, and Assignment of Shares Acquisitions, and Assignment of Shares line (Ignored.) (Ignored.) XI.Where any of the companies participating in a XI.Where any of the companies participating in a merger, demerger, acquisition, or transfer of merger, demerger, acquisition, or transfer of shares is not a public company, the public shares is not a public company, the public company(s) shall sign an agreement with the company(s) shall sign an agreement with the non-public company whereby the latter is non-public company whereby the latter is required to abide by the provisions of this required to abide by the provisions of this article 、 paragraph 3 、 paragraph 4 、 article 、 paragraph 3 、 paragraph 4 、 paragraph 7 to paragraph 10. paragraph 7 to paragraph 9. Article 12 Penalty Penalty amend The company’s managers and personnel in charge The company’s managers and personnel in charge according to

Attachment 5  37

																Reason for
Article No	After amendment										Before amendment
																Amendments

	who violate thisprocedureintentionally or grossly negligent shall be dealt with in accordance with the company’s personnel and administrative rules and regulations.										who violate thisruleintentionally or grossly negligent shall be dealt with in accordance with the company’s personnel and administrative rules and regulations.					actual need
Article 13	Control procedures for subsidiaries engaged in derivative commodity transaction processing procedures 1. The acquisition or disposal of assets by the subsidiary of the companyshall be handledin accordance with this procedures.However, the subsidiary has established" Handling Procedures for Acquisition or Disposal of Assets " in accordance with the " Regulations Governing the Acquisition and Disposal of Assets by Public Companies " stipulated by the Financial Supervisory Commission, and has taken into consideration the opinions of the company,the subsidiary can handle in accordance with their procedures. (Ignored.)										Control procedures for subsidiaries engaged in derivative commodity transaction processing procedures 1. The acquisition or disposal of assets by the subsidiary of the company has established " Handling Procedures for Acquisition or Disposal of Assets " in accordance with the " Regulations Governing the Acquisition and Disposal of Assets by Public Companies " stipulated by the Financial Supervisory Commission, and has taken into consideration the opinions of the company.~~After the~~ ~~approval of the board of directors of the~~ ~~subsidiary, the company should report to the~~ ~~shareholders meeting, and it is the same to the~~ ~~amendment.~~ (Ignored.)					amend according to laws and regulations and actual need
Article 14	Others (Ignored.) IV. For the calculation of 10 percent of total assets under theseprocedure, 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. (Ignored.)										Others (Ignored.) IV. For the calculation of 10 percent of total assets under theseregulations,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. (Ignored.)					amend according to actual need
Article 16	(Ignored.)										(Ignored.)					In response to the future business development of the company and its subsidiaries and our commitment to expand the business footprint under the four major operating policies to continue to strengthen our investment layout, the company would like to change the total investable amount of equity investment in this article from 100% of
		The Compa		ny	The s		ubsidia	ries			Asset Item	Approval Personnel	Approval and Decision	Total Amount of Investment	Limits for Individual Investment
	Asset Item	Approval Personnel	Ap De	proval and cision	Approval Personnel		Ap De	proval and cision	Total Amount of Investment	Limits for Individual Investment
	Real estate and	Board of Directors	Above NT	$300,000,000	Board of Directors	Abo	ve NT	$150,000,000			Real estateand right-of-use assetsfor non-operating purpose	Board of Directors		30% of net equity	15% of net equity
	right-of-use assets for non-operati ng purpose	Chairman	Under NT (incl.)	$300,000,000	Chairman	Und (inc	er NT l.)	$150,000,000	30% of net equity	15% of net equity

	Equity	Board of Directors	Above NT	$300,000,000	Board of Directors	Abo	ve NT	$150,000,000	200% of	50% of	Equity	Board of Directors	Above NT$100,000,000	Net euit	50% of

	investment	Chairman	Under NT (incl.)	$300,000,000	Chairman	Und (inc	er NT l.)	$150,000,000	net equity	net equity	investment	Chairman	Under NT$100,000,000 (incl.)	qy	net equity

	Long-term Guaranteed	Chairman	Above NT	$100,000,000	Chairman	Abo NT	ve $50,000	,000,000			Long-term	Chairman	Above NT$100,000,000
											Guaranteed or Collateralized Bonds	President	Under NT$100,000,000 (incl.)	30% of net equity	15% of net equity
	or Collateraliz ed Bonds	President	Under NT (incl.)	$100,000,000	President	Und NT (inc	er $50,000	,000,000	30% of net equity	15% of net equity

							l.)				Short-term bonds and mone market	Chief financial officer	Above NT$50,000,000	30% of net euit	15% of net euit
	Short-term bonds and	Chief financial officer	Above NT	$50,000,000	Chairman	Abo NT	ve $25,000	,000,000	30% of	15% of

	money market fund	Financial manager	Under NT (incl.)	$50,000,000	President	Und NT (inc	er $25,000	,000,000	net equity	net equity	y fund	Financial manager	Under NT$50,000,000 (incl.)	qy	qy
							l.)					Chairman	Above NT$50,000,000	10% f	5% f
	Other	Chairman	Above NT	$100,000,000	Chairman	Abo NT	ve $50,000	,000,000	10% of	5% of	Other securities	President	Under NT$50,000,000 (incl.)	o net equity	o net equity

	securities	President	Under NT (incl.)	$100,000,000	President	Und NT (inc	er $50,000	,000,000	net equity	net equity	※ Short-term bonds shall not be operated through the principle of doubling the multiplier by any means of pledge, margin or similar, which will result in the effect of expanding profits and losses. ※ Investment and establishment of the company's direct or indirect holding of 100% of the shares of subsidiaries are not subject to the limit of the total investment of long-term equity. ※The equity refers to total equity attributable to shareholders in balance sheet.

							l.)
	※ Short-term bonds shall not be operated through the principle of doubling the multiplier by any means of pledge, margin or similar, which will result in the effect of expanding profits and losses. ※ Investment and establishment of the company's direct or indirect holding of 100% of the shares of subsidiaries are not subject to the limit of the total investment of long-term equity. ※ The equity refers to total equity attributable to shareholders ofeach companyin balance sheet.

38  Attachment 5

			Reason for
Article No	After amendment	Before amendment
			Amendments

			the company's net value (attributable to the owners' equity of the parent company) to 200%. Considering the importance of the impact on the company and the efficiency of decision- making, the company would also like to adjust the approval authority of asset items in Article 16 so as to immediately respond to the implementatio n of the company's various operational decisions.
Article 17	The Procedures were adopted on June 7, 1991. …….. The 12th amendment was made on June 21, 2019. The 13thamended was made on June 24, 2021.	The Procedures were adopted on June 7, 1991. …….. The 12th amendment was made on June 21, 2019. The 13thamended was made on June 24, 2021.	Added amendment date

Attachment 6  39

Comparison table for Handling Procedures for Conducting Derivative Transactions before and after amendment

Article										Reason for
	After amendment								Before amendment
No										Amendments

Article 6	Amount of Transaction and authority 1. The total amount of contracts that can be engaged in hedging transactions (1) Exchange rate transaction 1.1 Based on the company's business-generated positions as the amount of commitment to avoid risks 1.2 The total contract amountshall not exceed the foreign currency net assets (or liabilities), plus the estimated net positions generated by the estimated revenue (or purchases) in the next 12 months;but it is not include the foreign exchange transaction (SWAP) that is for fund scheduling. 1.3 If the net position generated by the estimated future revenue (or purchase) based on the above additional estimates exceeds 2 months, it must be approved by the general manager. (Ignored.) II. Maximum of hedging loss (Ignored.) If reach the maximum loss for all contracts or individual contracts, the top decision-making supervisor of the financial department shalltake necessary measuresand report to the board of directorsimmediately. If the company have independent directors, they shall present and express their opinions in board of directors. (Ignored.) III. The authority of foreign exchange and rate transaction								Amount of Transaction and authority 1. The total amount of contracts that can be engaged in hedging transactions (1) Exchange rate transaction Based on the company's business-generated positions as the amount to avoid risks, the total contractamount is limited to the net amount of the foreign currency operating income position in thelast three months; but it is not include the foreign exchange transaction (SWAP) that is for fund scheduling. (Ignored.) II. Maximum of hedging loss (Ignored.) If reach the maximum loss for all contracts or individual contracts,the trader shall submit the report to the top decision-making supervisor of the financial department and report to the board of directorsif necessary. (Ignored.) III. The authority of foreign exchange and rate transaction The Company Each Transction Each Day Chairman USD Above 30,000,000 USD Above100,000,000 President USD 30,000,000 USD 100,000,000 Chief financial officer USD 15,000,000 USD 60,000,000 Financial manager USD 10,000,000 USD 40,000,000 Treasurymanager USD 5,000,000 USD 20,000,000	In response to the future business development needs of the company and its subsidiaries, the company would like to modify the total amount of this exchange rate hedging transaction contract from the net amount of the foreign currency operating income in the last three months to the foreign currency net assets (or liabilities), plus the net position generated by the estimated revenue (or purchases) in the next 12 months.
		The Co	mpany			The subsidiar		ies
	Ch	Each Transction SD A 30000000	Each Day SD A100000000	S	Each Trans A 1	ction 000000	SD	Each Day A 50000000
	airman President	U bove ,, USD 30,000,000	U bove,, USD 100,000,000	U USD	bove 1	,, 5,000,000	U USD	bove ,, 50,000,000
	Chief financial officer	USD 15,000,000	USD 60,000,000	USD		7,500,000	USD	30,000,000
	Financial manager	USD 10,000,000	USD 40,000,000		None			None
	Treasurymanager	USD 5,000,000	USD 20,000,000		None			None

Article 7	Operating procedures (Ignored.) 1. Transaction (1) Trading partners: domestic and financial institutions. (Ignored.)					foreign			Operating procedures (Ignored.) 1. Transaction (1) Trading partners: domestic and foreign financial institutions,otherwise, it should be approved by the top decision-making supervisor of the financial department. (Ignored.)	amend according to actual need
Article 10	Internal Control 1. Risk management measures (1) Credit risk management: trading partners limited to domestic and foreign financial institutions. (Ignored.)								Internal Control 1. Risk management measures (1) Credit risk management: trading partners limited to domestic and foreign financial institutions.Otherwise, it should be approved by the top decision-making supervisor of the financial department. (Ignored.)	amend according to actual need
Article 11	Internal Audit 1. The internal auditors should regularly understand the adequacyof the internal								Internal Audit 1. The internal auditors should regularly understand the adequacyof the internal	amend according to actual need

40  Attachment 6

Article			Reason for
	After amendment	Before amendment
No			Amendments

	control of derivative commodity transactions in accordance with the provisions of the "internal control system", and check the compliance of the trading department on the "procedures for dealing in derivative commodity transactions" on a monthly basis, and prepare an audit report , If a major violation is found, theaudit committeeshould be notified in written form. (Ignored.)	control of derivative commodity transactions in accordance with the provisions of the "internal control system", and check the compliance of the trading department on the "procedures for dealing in derivative commodity transactions" on a monthly basis, and prepare an audit report , If a major violation is found, theindependent director should be notified in written form. (Ignored.)
Article 13	Control procedures for subsidiaries engaged in derivative commodity transaction processing procedures 1. The transactions of conducting derivative by the subsidiary of the companyshall be handledin accordance with this procedures. However, the subsidiary has established" Handling Procedures for Conducting Derivative Transactions " in accordance with the " Regulations Governing the Acquisition and Disposal of Assets by Public Companies " stipulated by the Financial Supervisory Commission, and has taken into consideration the opinions of the company,the subsidiary can handle in accordance with their procedures.	Control procedures for subsidiaries engaged in derivative commodity transaction processing procedures 1. The transactions of conducting derivative by the subsidiary of the company has established " Handling Procedures for Conducting Derivative Transactions " in accordance with the " Regulations Governing the Acquisition and Disposal of Assets by Public Companies " stipulated by the Financial Supervisory Commission, and has taken into consideration the opinions of the company.After the approval of the board of directors of the subsidiary, the company should report to the shareholders meeting, and it is the same to the amendment.	amend according to laws and regulations and actual need
Article 14	Penalty The company’s managers and personnel in charge who violate thisprocedureintentionally or grossly negligent shall be dealt with in accordance with the company’s personnel and administrative rules and regulations.	Penalty The company’s managers and personnel in charge who violate thisoperating procedureintentionally or grossly negligent shall be dealt with in accordance with the company’s personnel and administrative rules and regulations.	amend according to actual need
Article 15	Others 1. "Subsidiaries" as used in theprocedures should mean the subsidiaries as defined in the International Financial Reporting Standards. (Ignored.)	Others 1. "Subsidiaries" as used in theoperating procedureshould mean the subsidiaries as defined in the International Financial Reporting Standards. (Ignored.)	amend according to actual need
Article 16	The Procedures were adopted on October 1, 1998. The 1st amendment was made on September 6, 2001. The 2nd amendment was made on May 22, 2003. The 3rd amendment was made on June 15, 2007. The 4th amendment was made on June 16, 2009. The 5th amendment was made on June 15, 2010. The 6th amendment was made on June 21, 2019. The 7th amendment was made on June 24, 2021.	The Procedures were adopted on October 1, 1998. The 1st amendment was made on September 6, 2001. The 2nd amendment was made on May 22, 2003. The 3rd amendment was made on June 15, 2007. The 4th amendment was made on June 16, 2009. The 5th amendment was made on June 15, 2010. The 6th amendment was made on June 21, 2019.	Added amendment date

Attachment 7  41

Comparison table for Handling Procedures for Lending Funds to Other Parties before and after amendment

Article			Reason for
	After amendment	Before amendment
No			Amendments

Article 3	The aggregate amount of loans and the maximum amount permitted to a single borrower (Ignored.) II. The limit of fund- lending to the same party shall be respectively specified based on the considerations as follows: (1) The amount of an individual loan granted by the Company to a company or business with business relationship with the Company shall not exceed the business transaction amount in the most recent year or in the next year between the parties.And should not exceed 20% of the net value of the company’s most recent financial statements. Business transactional amount refers to the amount of purchase or sale between the parties, whichever is higher. (Ignored.)	The aggregate amount of loans and the maximum amount permitted to a single borrower (Ignored.) II. The limit of fund- lending to the same party shall be respectively specified based on the considerations as follows: (1) The amount of an individual loan granted by the Company to a company or business with business relationship with the Company shall not exceed the business transaction amount between the parties. Business transactional amount refers to the amount of purchase or sale between the parties, whichever is higher. (Ignored.)	amend according to actual need
Article 4	Duration of loans and calculation of interest The term of each loan and paymentshall not exceed one year orone business cycle (whichever is longer) from the date of the loan. The interest rate of the loaned funds shall be adjustedaccording to theactual situation in consideration of the company's deposit and borrowing interest rates in financial institutions. Except for special regulations, the calculation and collection of loan interest is based on the principle of monthly interest calculation, which can be collected on a monthly basis, quarterly basis, or settled once upon maturity.	Duration of loans and calculation of interest	amend according to laws and regulations and actual need
		Where the borrower finances from the company,
		the term shall not exceed one year.
Article 7	Subsequent measures for control and management of loans, and procedures for handling delinquent creditor's rights (Ignored.) (Delete)	Subsequent measures for control and management of loans, and procedures for handling delinquent creditor's rights (Ignored.) ~~IV.In accordance with this procedure, it shall be~~ ~~approved by more than half of all members~~ ~~of the audit committee. If there is not~~ ~~approve by more than one-half of all~~ ~~members of the audit committee, it may be~~ ~~agreed by more than two-thirds of all~~ ~~directors, and the resolution of the audit~~ ~~committee should be stated in the minutes.~~ ~~V.When the directors discusses in board of~~ ~~directors, the company shall fully consider~~ ~~opinion of each director, and if there are any~~ ~~objections or reservations, it shall be stated in~~ ~~the minutes.~~ ~~VI.All members of the audit committee referred~~ ~~to in this procedure and all directors referred to~~ ~~in the preceding paragraph shall be calculated~~ ~~based on actual incumbents.~~	amend according to laws and regulations

42  Attachment 7

Article			Reason for
	After amendment	Before amendment
No			Amendments

Article 8	Penalty The company’s managers and personnel in charge who violate thisprocedureintentionally or grossly negligent shall be dealt with in accordance with the company’s personnel and administrative rules and regulations.	Penalty The company’s managers and personnel in charge who violate thisoperating procedure intentionally or grossly negligent shall be dealt with in accordance with the company’s personnel and administrative rules and regulations.	amend according to actual need
Article 10	Other (Ignored.) VII.The company shall fully consider opinion of each independent director when they are discuss in board of directors, and if there are any objections or reservations, it shall be stated in the minutes.	Other (Ignored.) (Added)	amend according to laws and regulations

Article 11	Implementation and revision (Ignored.) II.The company shall fully consider opinion of each independentdirector when they are discuss in board of directors, and if there are any objections or reservations, it shall be stated in the minutes.	(Add Title) (Ignored.) II.The company shall fully consider opinion of eachdirector when they are discuss in board of directors, and if there are any objections or reservations, it shall be stated in the minutes.	amend according to laws and regulations
Article 12	The Procedures were adopted on June 7, 1991. The 1st amendment was made on August 17, 1995. The 2nd amendment was made on May 22, 2003. The 3rd amendment was made on June 13, 2008. The 4th amendment was made on June 16, 2009. The 5th amendment was made on June 15, 2010. The 6th amendment was made on June 14, 2013. The 7th amendment was made on June 21, 2019. The 8th amendment was made on June 24, 2021.	The Procedures were adopted on June 7, 1991. The 1st amendment was made on August 17, 1995. The 2nd amendment was made on May 22, 2003. The 3rd amendment was made on June 13, 2008. The 4th amendment was made on June 16, 2009. The 5th amendment was made on June 15, 2010. The 6th amendment was made on June 14, 2013. The 7th amendment was made on June 21, 2019.	Added amendment date

Attachment 8  43

Comparison table for Procedures for Endorsements and Guarantees before and after amendment

Article			Reason for
	After amendment	Before amendment
No			Amendments

Name	Handling Proceduresfor Endorsements and Guarantees before and after amendment	Proceduresfor Endorsements and Guarantees before and after amendment	amend according to actual need
Article 1	There are clear and specific operating standards for handling endorsements or guarantees for the company, and thishandling procedureis formulated in accordance with the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies" stipulated by the Financial Supervisory Commission.	There are clear and specific operating standards for handling endorsements or guarantees for the company, and thisprocedureis formulated in accordance with the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies" stipulated by the Financial Supervisory Commission.	amend according to actual need
Article 2	Entities for which the company make endorsements/guarantees The endorsement and guarantee in thishandling procedurerefers to the following matters： 1. A company with which it does business. 2. A company in which the company directly and indirectly holds more than 50 percent of the voting shares. 3. A company that directly and indirectly holds more than 50 percent of the voting shares in the company. 4. Where the company fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project, or where all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages, or where companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each othe. Capital contribution referred to in the preceding paragraph shall mean capital contribution directly by the company, or through a company in which the company holds 100% of the voting shares.	Entities for which the company make endorsements/guarantees The endorsement and guarantee in this procedurerefers to the following matters： 1. A company in which the company directly and indirectly holds more than 50 percent of the voting shares. 2. A company with which it does business. (Added)	amend according to laws and regulations and actual need

Article 3	Scope The endorsement and guarantee in thishandling procedurerefers to the following matters： (Ignored.)	Scope The endorsement and guarantee in this procedurerefers to the following matters： (Ignored.)	amend according to actual need
Article 4	The ceilings amounts (Ignored.) II. The ceilings on the amounts of Endorsements/ Guarantees for Others 1. The aggregate amount of endorsements/guarantees is set as the ceiling for the company as a whole can not reaches 50% of the most recent net worth of the company. 2. To thesame entitywhich the company make endorsements/guarantees, the ceilings amounts can not reaches 20% of the most	The ceilings amounts (Ignored.) II. The ceilings on the amounts of Endorsements/ Guarantees for Others 1. The aggregate amount of endorsements/guarantees is set as the ceiling for the company as a whole can not reaches 50% of the most recent net worth of the company. 2. To the same entity~~that directly and indirectly~~ ~~holds more than 50 percent of the voting~~ ~~shares in the company or due to needs arising~~	amend according to laws and regulations and actual need

44  Attachment 8

Article					Reason for
		After amendment		Before amendment
No					Amendments

	recent net worth of the company. 3. Where an endorsement/guarantee is made due to needs arising from business dealings, the individual amount shall not exceed the estimated amount of business transactions between the two parties in the most recent year or in the next year, and shall not exceed 20% of the most recent net worth of the company. The amount of business transactions refers to the higher of the purchase or sale amount between the two parties. III. The aggregate amount of endorsements/ guarantees is set as the ceiling for the company and its subsidiaries as a whole can not reaches 50% of the most recent net worth of the company. If the aggregate amount of endorsements/guarantees that is set as the ceiling for the company and its subsidiaries as a wholereaches50% or more of the net worth of the public company, an explanation of the necessity and reasonableness thereof shall be given at the shareholders meeting. The aggregate amount of endorsements/guarantees is set as the ceiling for the company and its subsidiaries to a single enterprise can not reaches 20% of the most recent net worth of the company.		~~from business dealings ~~which the company make endorsements/guarantees, the ceilings amounts can not reaches 20% of the most recent net worth of the company. (Added) III. The aggregate amount of endorsements/ guarantees is set as the ceiling for the company and its subsidiaries as a whole can not reaches 50% of the most recent net worth of the company. If the aggregate amount of endorsements/guarantees that is set as the ceiling for the company and its subsidiaries as a wholeexceed50% or more of the net worth of the public company, an explanation of the necessity and reasonableness thereof shall be given at the shareholders meeting. The aggregate amount of endorsements/guarantees is set as the ceiling for the company and its subsidiaries to a single enterprise can not reaches 20% of the most recent net worth of the company.
Article 5	Process (Ignored.) II. The company shall prepare a memorandum book for its fund-loaning activitiesand truthfully recordthe following information: borrower, amount, date of approval by the board of directors, lending/borrowing date, and matters to be carefully evaluated under paragraph 1 of the preceding Article. (Delete)		Process (Ignored.) II. The company shall prepare a memorandum book for its fund-loaning activities the following information: borrower, amount, date of approval by the board of directors, lending/borrowing date, and matters to be carefully evaluated under paragraph 1 of the preceding Article. ~~III. The financial department shall prepare~~ ~~relevant statements of endorsement and~~ ~~guarantee and submit them to the board of~~ ~~directors for review.~~		pursuant to laws and regulations
Article 7	Procedures for controlling and managing endorsements/guarantees by subsidiaries I. Where a subsidiary of the company intends to make endorsements/guarantees, the subsidiary shall formulate thehandling proceduresin accordance with the " Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies " stipulated by the Financial Supervisory Commission. After the procedures approved by the subsidiary's board of directors, submitted to the subsidiary's shareholders meeting, and the same for amendments. When a subsidiary company is engaged in endorsement and guarantee, it shall follow its procedures. II. Supervise and urge the subsidiary to check by themselves whether theprocedurescomply		Procedures for controlling and managing endorsements/guarantees by subsidiaries I. Where a subsidiary of the company intends to make endorsements/guarantees, the subsidiary shall formulate theproceduresin accordance with the " Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies " stipulated by the Financial Supervisory Commission. After the procedures approved by the subsidiary's board of directors, submitted to the subsidiary's shareholders meeting, and the same for amendments. When a subsidiary company is engaged in endorsement and guarantee, it shall follow its procedures. II. Supervise and urge the subsidiary to check by themselves whether therulecomply with		amend according to actual need

Attachment 8  45

Article				Reason for
	After amendment	Before amendment
No				Amendments

	with relevant standards and regulations, and whether to handle related matters in accordance with theprocedures. (Ignored.) V. If the object of the endorsement guarantee is a subsidiary whose net value is less than one- half of the paid-in capital, the financial department shall assess the operating risk of the subsidiary and its impact on the company, and submit a report to the company’s board of directorsquarterly. However, companies in which the company directly or indirectly holds 100% of the voting shares are not subject to this restriction.	relevant standards and regulations, and whether to handle related matters in accordance with therule. (Ignored.) V. If the object of the endorsement guarantee is a subsidiary whose net value is less than one- half of the paid-in capital, the financial department shall assess the operating risk of the subsidiary and its impact on the company, and submit a report to the company’s board of directors.
Article 9	Hierarchy of decision-making authority and delegation thereof (Ignored.) III. Where the company needs to exceed the limits set out in the Operational Procedures for Endorsements/Guarantees to satisfy its business requirements, and where the conditions set out in the Operational Procedures for Endorsements/Guarantees are complied with, it shall obtain approval from the board of directors and half or more of the directors shall act as joint guarantors for any loss that may be caused to the company by the excess endorsement/guarantee. It shall also amend the Operational Procedures for Endorsements/Guarantees accordingly and submit the same to the shareholders'meeting for ratification after the fact. If the shareholders'meeting does not give consent, the company shall adopt a plan to discharge the amount in excess within a given time limit. IV. Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of theseRegulations,or the amount of endorsement/guarantee exceeds the limit, the company shall adopt rectification plans and submit the rectification plans to all the audit commitee, and shall complete the rectification according to the timeframe set out in the plan. (Delete.)	Hierarchy of decision-making authority and delegation thereof (Ignored.) （Add paragraph 3, the original paragraph 3 moved to the paragraph 4, delete the original paragraph 3 to paragraph 4） ~~III.~~ Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of theserules, or the amount of endorsement/guarantee exceeds the limit, the company shall adopt rectification plans and report the rectification plans to all the audit commitee, and shall complete the rectification according to the timeframe set out in the plan.When the amount of the endorsement guarantee exceeds the limit due to changes in circumstances, the board of directors shall set a certain period of time to eliminate the excess part. ~~IV. Matters that should be agreed by the board of~~ ~~directors in accordance with procedures shall~~ ~~be approved by more than half of all members~~ ~~of the audit committee first. If there is no~~ ~~consent of more than one-half of all members~~ ~~of the audit committee, it may be agreed by~~ ~~more than two-thirds of all directors, and the~~ ~~resolution of the audit committee should be~~ ~~stated in the minutes of the board of~~ ~~directors.~~ ~~V. When the directors discusses in board of~~ ~~directors, the company shall fully consider~~		pursuant to laws and regulations
			circumstances, the board of directors shall set
			a certain period of time to eliminate the excess part. ~~Mttr tht hld b rd b th brd f~~
			~~aes a sou e agee y e oa o~~ ~~dirtr in rdn ith rdr hll~~
			~~ecos accoace w poceues sa~~ ~~b rd b mr thn hlf f ll mmbr~~
			~~e appove y oe a a o a ees~~ ~~of the audit committee first. If there is no~~ ~~nnt f mr thn nhlf f ll mmbr~~
			~~cose o oe a oe-a o a ees~~ ~~of the audit committee, it may be agreed by~~ ~~mr thn tthird f ll dirtr nd th~~
			~~oe a wo-s o a ecos, a e~~ ~~resolution of the audit committee should be~~ ~~stated in the minutes of the board of~~ ~~directors.~~ ~~When the directors discusses in board of~~ ~~directors, the company shall fully consider~~

46  Attachment 8

Article				Reason for
	After amendment		Before amendment
No				Amendments

		~~VI.~~	~~opinion of each director, and if there are any~~
			~~btin r rrtin it hll b ttd in~~
			~~ojecos o esevaos, sa e sae~~
			~~the minutes.~~ ~~All members of the audit committee referred~~
			~~t in thi rdr nd ll dirtr rfrrd~~
			~~o s poceue a a ecos eee~~
			~~to in the preceding paragraph shall be~~ ~~calculated based on actual incumbents.~~
Article 12	Penalty The company’s managers and personnel in charge who violate thisprocedureintentionally or grossly negligent shall be dealt with in accordance with the company’s personnel and administrative rules and regulations.	Penalty The company’s managers and personnel in charge who violate thisoperating procedure intentionally or grossly negligent shall be dealt with in accordance with the company’s personnel and administrative rules and regulations.		amend according to actual need
Article 13	Others 1. "Subsidiary" and "parent company" as referred to in theseHandling Proceduresshall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Where the company’s financial reports are prepared according to the International Financial Reporting Standards, "net worth" in theseHandling Proceduresmeans the balance sheet equity attributable to the owners of the parent company under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. II. Matters not covered in thisHandling Proceduresshall be handled in accordance with relevant laws and regulations and relevant regulations of the company. III. The term "announce and report" as used in theseHandling Proceduresmeans the process of entering data to the information reporting website designated by the Financial Supervisory Commission (FSC). IV. “Date of occurrence” in theseHandling Proceduresmeans the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of the loan of funds or endorsement/ guarantee, whichever date is earlier. (Ignored.)	Others 1. "Subsidiary" and "parent company" as referred to in theseProceduresshall be as determined under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Where the company’s financial reports are prepared according to the International Financial Reporting Standards, "net worth" in theseProceduresmeans the balance sheet equity attributable to the owners of the parent company under the Regulations Governing the Preparation of Financial Reports by Securities Issuers. II. Matters not covered in thisProceduresshall be handled in accordance with relevant laws and regulations and relevant regulations of the company. III. The term "announce and report" as used in theseProceduresmeans the process of entering data to the information reporting website designated by the Financial Supervisory Commission (FSC). IV. “Date of occurrence” in theseProcedures means the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of the loan of funds or endorsement/guarantee, whichever date is earlier. (Ignored.)		amend according to actual need
Article 14	Implementation and revision 1. The formulation or amendment of this Handling Proceduresshall be approved by more than half of all members of the audit committee first. If there is no consent of more than one-half of all members of the audit committee, it may be agreed by more than two-thirds of all directors, and the resolution of the audit committee should be stated in the minutes of the board of directors. II. The company shall fully consider opinion of eachindependentdirector when they are discuss in board of directors, and if there are anyobjections or reservations, it shall be	(Add Title) 1. The formulation or amendment of this Proceduresshall be approved by more than half of all members of the audit committee first. If there is no consent of more than one- half of all members of the audit committee, it may be agreed by more than two-thirds of all directors, and the resolution of the audit committee should be stated in the minutes of the board of directors. II. The company shall fully consider opinion of each director when they are discuss in board of directors, and if there are any objections or reservations, it shall be stated in		amend according to laws and regulations and actual need
			objections or reservations, it shall be stated in

Attachment 8  47

Article			Reason for
	After amendment	Before amendment
No			Amendments

	stated in the minutes. III. ThisHandling Proceduresis approved by the board of directors and submitted to the shareholders meeting for approval, the same as amended.	the minutes. III. ThisProceduresis approved by the board of directors and submitted to the shareholders meeting for approval, the same as amended.
Article 15	The Procedures were adopted on June 7, 1991. (Ignored.) The 11th amendment was made on June 21, 2019. The 12th amendment was made on June 24,	The Procedures were adopted on June 7, 1991. (Ignored.) The 11th amendment was made on June 21, 2019.	Added amendment date
	2021.

48  Attachment 8

List of non-competition restrictions on current directors and their representatives proposed to be lifted

Dierctor	Released restriction items
AU Optronics Corp.	Director , AUO Display Plus Corporation Director , AUO Health Inc. Director ,Da Ping Green Energy Corporation Director ,AUO Care Inc. Director , ADLINK TECHNOLOGY INC. Director , ENNOSTAR Inc.
Paul Peng , Representative of AU Optronics Corp.	Director , ENNOSTAR Inc. Director , AUO Digitech Holding Limited Director , AUO Digitech (CAYMAN) Limited Director , AUO Digitech Pte. Ltd. Chairman ,AUO Digitech (Suzhou) Co., Ltd.
Joe Huang , Representative of BenQ Foundation	Chairman , SIMULA TECHNOLOGY INC. Chairman , ACTION STAR TECHNOLOGY CO., LTD. Director , TOPVIEW OPTRONICS CORP.

Appendix 1  49

Rules and Procedures for Shareholders’ Meeting

Enacted on May 15, 1990 The 1st amendment was made on June 19, 1993. The 2nd amendment was made on April 16, 1998.

Qisda Corporation (the “Company”) shall convene the shareholders’ meeting in accordance with these Rules of Procedures (the “Rules”)
Shareholders or their proxies attending the shareholders’ meeting (the “Meeting”) shall submit the attendance card for the purpose of signing in. The number of shares represented by shareholders or their proxies attending the Meeting shall be calculated in accordance with the attendance cards submitted by the shareholders or their proxies plus the number of shares exercised by correspondence or electronic means.
The attendance and the voting shall be calculated based on the number of shares represented by the shareholders attending the shareholders’ meeting.
The shareholders’ meeting shall be convened at a venue where the Company is located or a venue convenient for shareholders’ attendance and suitable for the convention. The shareholders’ meeting shall not begin earlier than 9:00 a.m. or later than 3:00 p.m.
The Chairman of the Company shall preside as the chairperson at a shareholders’ meeting if the meeting is convened by the Board of the Directors of the Company. In the situation where the Chairman is on leave or unavailable to perform his or her duty and power for any cause, the Vice Chairman of the Company shall act as the chairperson for the meeting. In the situation where there is no vice chairman or the Vice Chairman of the Company is on leave or unavailable to perform his or her duty and power for any cause, the Chairman shall designate a Managing Director to act as the chairperson on his or her behalf. In the situation where there is no managing director, the Chairman shall designate one Director from the Board of Directors to act as the chairperson for the meeting. In the absence of such designation, the Managing Directors or Directors of the Board shall elect one from among themselves an acting chairperson for the shareholders’ meeting. Where the shareholders’ meeting is convened by a person who is entitled to convene the meeting but is not a member of the Board of Directors, such person shall perform the duty as the chairperson for the shareholders’ meeting. In the situation where there are two or more people who are entitled to convene the meeting, a chairperson shall be elected from among themselves.
The Company may appoint its lawyers, accountants or any other people relevant to the meeting to be present at the shareholders’ meeting. The supporting staff for the proceeding of a shareholders’ meeting shall wear an identification badge or armband.
The Company shall video-tape or audio-tape the entire proceeding of a shareholders’ meeting, and the recording shall be kept for at least one year.
The chairperson of a shareholders’ meeting shall call the meeting to order at the time when the meeting is scheduled to commence. If the number of shares represented by the attending shareholders has not yet constituted more than an aggregate of one-half of the total outstanding shares issued, the chairperson may postpone the time for the meeting. The postponements shall only reach two times at most, and the meeting shall not be postponed for more than one hour in total. If after two postponements the shares represented by attending shareholders has not reached the quorum but has constituted more than one third of the total of outstanding shares issued, a tentative resolution may be passed in accordance with the Article 175-1 of the Company Act. Before the end of such meeting, if the shares represented by the attending shareholders has constituted more than one half of the total of outstanding shares issued, the chairperson may bring the already passed resolution for voting again in accordance with the Article 174 of the Company Act.
The agenda of a shareholders’ meeting shall be established by the Board of Directors if the meeting is convened by the Board of Directors of the Company. Unless otherwise approved in the shareholders’ meeting, the meeting shall proceed in accordance with the pre-arranged agenda.
The preceding paragraph applies in the situation where a shareholders’ meeting is convened by a person, other than a member of the Board of Directors, entitled to convene such a meeting.
Unless otherwise resolved at the shareholders’ meeting, the chairperson shall not announce adjournment until the agenda prescribed in the preceding two paragraphs (including extraordinary motions) are resolved.

After the meeting is adjourned, shareholders shall not elect a chairperson and resume the meeting at the same or another venue.

50  Appendix 1

In the situation where the chairperson adjourns the meeting in violation of the Rules, a new chairperson may be elected by more than half of the votes from the shares represented by the attending shareholders so that the meeting is able to be continued.

When a shareholder attending a shareholders’ meeting wishes to speak, he or she should fill out a speech note with a summary of the speech, shareholder’s account number (or the number of attendance card) and the account name of the shareholder in advance. The sequence of speeches shall be determined by the chairperson.
If any attending shareholder at the shareholders’ meeting submits a speech note but does not speak, no speech shall be deemed to have been made by such shareholder. In case content of the speech of a shareholder are inconsistent with the content of the speech note, the content of actual speech shall be considered.

The speech of a shareholder shall remain concrete, clear, and relevant to the agenda otherwise the chairperson may stop the speech of such shareholder.

Unless otherwise permitted by the chairperson and the speaking shareholder, no shareholder shall interrupt the speech of other shareholders. The chairperson shall stop such interruption.

No shareholder shall speak more than twice regarding the same item without the chairperson’s consent, and the time of each speech shall not exceed five minutes. Nevertheless, the speech may extend for three minutes if permitted by the chairperson.
In case the speech of any shareholder violates the preceding paragraph or exceeds the scope of the agenda item, the chairperson may stop the speech of such shareholder
A corporate shareholder should only appoint one person as its representative to attend a shareholders’ meeting.
In the situation where a corporate shareholder has appointed two or more representatives to attend the shareholders’ meeting, an appointment letter shall be provided and only one representative can speak for each agenda item.
After the speech of a shareholder, the chairperson may make responses by him or herself or appoint an appropriate person to respond.
The chairperson may announce end of discussion of an item listed in the agenda and submit the item for voting if the chairperson deems that the item is ready for voting.
With respect to the voting of each proposal, the people who conduct ballot examination and counting shall be designated by the chairperson. At the same time, the ballot examiners also have to be shareholders.

The result of each vote shall be announced at the meeting immediately and shall be recorded into the minute.

Unless otherwise provided for under the Company Act, the Articles of Incorporation and other applicable laws and regulations, a proposal put to vote shall be approved by consent of a majority of shares represented by attending shareholders at the meeting. During the voting process, a proposal which proves to meet no objection from the attending shareholders after the inquiry made by the chairperson shall be deemed passed in the validity same as a proposal resolved through balloting process.
In the case of an amendment or alternative to an original proposal, the chairperson shall decide on the order of voting together with the original proposal. However, if one of such proposals has been approved, the others shall be deemed overruled and no further vote is required.
The chairperson may request picketers (or security guards) to assist in maintaining the order at the meeting venue. Members of the picket (or security guards) shall wear armbands with the word "Picket" when maintaining the order at the meeting venue.
In case of incident due to force majeure, the chair may rule the meeting temporarily suspended or resume the meeting at another venue.
Any matters which are not adequately provided for herein shall be subject to the Company Act, the Articles of Incorporation.
The Rules and any amendment shall take effect after being approved at the shareholders’ meeting.

Appendix 2  51

Articles of Incorporation (Before the amendments)

Chapter 1 General Provisions

Article 1 The Company is organized in accordance with the Company Act of R.O.C. and named Qisda Corporation (the "Company"). The Company Name in English shall be Qisda Corporation.

Article 2 The lines of business of the Company shall include the following:
1 、 CC01030 Electric Appliance and Audiovisual Electric Products Manufacturing
2 、 CC01110 Computers and Computing Peripheral Equipment Manufacturing
3 、 CC01070 Telecommunication Equipment and Apparatus Manufacturing
4 、 CC01101 Retrained Telecom Radio Frequency Equipment and Materials Manufacturing
5 、 F401021 Retrained Telecom Radio Frequency Equipment and Materials Import
6 、 CC01040 Lighting Facilities Manufacturing
7 、 CF01011 Medical Materials and Equipment Manufacturing
8 、 F108031 Wholesale of Drugs, Medical Goods
9 、 F208031 Retail Sale of Medical Equipment
10 、 F401010 International Trade
11 、 ZZ99999 All business items that are not prohibited or restricted by law, except those are subject to special approval
Article 3 The head office of the Company is located in Taoyuan, Taiwan. The Company may, as approved by the resolution of the Board of Directors, set up branch offices or factories in compliance with applicable laws and regulations in Taiwan or abroad when necessary.
Article 4 The Company may, in line with its business needs, provide guarantees externally. The total amount of the Company's investment is not subject to the restriction of Article 13 of the Company Act.

Chapter 2 Shares

Article 5 The total capital of the Company is Fifty Billion New Taiwan Dollars (NT$50,000,000,000), divided into Five Billion (5,000,000,000) shares with a par value of Ten New Taiwan Dollars (NT$10) each. The Board of Directors is authorized to issue in installments.
The Company may issue preferred shares amount the above total capital and a total of 200,000,000 shares among the above total capital stock should be reserved for issuing employee stock options. The Company may issue employee stock options at a price that is lower than the market price or the Company may transfer treasury stock to employees at a price that is lower than the average actual share repurchase price pursuant to a resolution approved by the majority (at least 50%) of total issued shares represented at the shareholders’ meeting and the consent of more than two-thirds of the attending shareholders’ voting rights.
Article 5-1 (Cancel)
Article 5-2 Regarding the Shares purchased by the Company pursuant to Securities and Exchange Act, the transferee shall include certain qualified employees of the Company’s Subsidiaries. The recipients of employee stock warrants of the Company shall include certain qualified employees of the Company’s Subsidiaries.
In the issuance of new shares by the Company, the recipients of new shares for subscription shall include certain qualified employees of the Company’s Subsidiaries.
In the issuance of restricted employee stock by the Company, the recipients of such shares shall include certain qualified employees of the Company’s Subsidiaries.
Article 5-3 The rights and obligations of the Company’s preferred share and related issuing conditions are as follows:
I. If after the annual closing of books there is a profit, the Company shall, after having provided for taxes and offset the accumulated losses of previous years, appropriate legal reserve and recognize or reverse special reserve return earnings in accordance with Article 16 of the Company’s Articles of Incorporation and applicable laws and regulations. If there is a residual amount after provisions are set aside, the residual shall be distributed as the year’s dividend for preferred share first.
Dividend on preferred share is limited to an annual rate of 8%, calculated based on the issuing price of each share. The dividend can be issued in a cash lump sum each year. After the annual shareholders’ meeting recognizes the financial report and earnings distribution, the board of directors shall set a benchmark date

52  Appendix 2

to issue the previous year’s dividend. The issuing of the issuing year and the recovery year dividend is based on the calculation of the current year’s actual issuing days. The issuing date is defined as the benchmark date to issue the preferred share.

The Company’s preferred share dividend distribution has autonomous discretion. If this Company’s annual final account shows no earnings or the earnings are insufficient for distribution, the preferred share dividend or others must be considered. If the shareholder’s meeting decides not to distribute preferred share dividend, this is not a violation of the contract. If the issued preferred share is of the non-cumulative type, and the resolution is not to distribution or to distribute insufficient dividend, this is not accumulated as deferred payment in future earnings years.
In addition to receiving dividend described in Item one, the holder of preferred share shall not participate in the distribution of common share earnings, capital reserve for cash, and capitalization.
The holder of this Company’s preferred share has priority over holders of common share in the distribution of this Company’s remaining asset. Holders of preferred share also have the same payment priority sequence as the holder of other preferred share issued by the Company, and are only second to ordinary creditors. However, this is limited to the amount calculated based on the number of circulating preferred share and the issuing price.
The holders of preferred share do not have voting or election rights in the shareholder’s meeting. However, holders of preferred share have voting rights in the preferred share shareholder’s meeting and regarding issues in the shareholders’ meeting that is related to the rights and obligations of preferred shareholders.
Preferred share cannot be converted to common share.
Preferred share has no expiration date. Holders of preferred stock cannot request this Company to buy back their preferred share. However, the Company can buy back part or all preferred share on the following day of the five-year anniversary of the issuing based on the actual issuing price. The unrecovered preferred share will continue to have the aforementioned issuing conditions and rights and obligations. If the Company decides to issue dividend for the current year, the dividend that should be issued up to the recovery date shall be calculated according to the current year’s actual number of issuing days.
The paid-in-capital that the preferred share premium is issued from shall not be used for capitalization during the preferred share issuing period other than to make up for losses.
I0. The Board is authorized to determine the name, issuance date and terms of the preferred share in accordance with market conditions and investors’ expectation, in accordance with the Company’s Articles of Incorporation and applicable laws and regulations.
Article 6 The Company may, pursuant to the applicable laws and regulations, deliver shares or other securities in bookentry form, instead of delivering physical certificates evidencing shares or other securities.
Article 7 Registration for transfer of shares shall be suspended for a period of sixty days before the convention of an annual general meeting of shareholders, thirty days before an extraordinary general meeting of shareholders, or within five days before the base date on which the dividends, bonuses, or other interests to be paid out by the Company.

Chapter 3 Shareholders' Meetings

Article 8 Shareholders' meeting shall be of two types, namely the annual and extraordinary general meeting of shareholders, with the former convened by the Board of Directors, in accordance with the law, regularly once a year within six months after the close of each fiscal year, and the later convened, in accordance with the law, when necessary.
The preferred shareholders’ meeting may be convened when it deemed necessary in accordance with applicable laws and regulations.
Article 9 Unless otherwise provided in applicable law and regulations, a resolution shall be adopted at a meeting attended by the shareholders holding and representing a majority of the total issued and outstanding shares and at which meeting a majority of the attending shareholders shall vote in favor of the resolution. In case a shareholder is unable to attend a shareholders' meeting, such shareholder may issue a proxy in the form issued by the Company, setting forth the scope of authorization by signing and affixing such shareholder's seal on the proxy form for the representative to be present on such shareholder's behalf. Except for trust enterprises or other stock transfer agencies approved by the securities authorities, if a person is designated as proxy by more

Appendix 2  53

than two shareholders, any of such person’s voting rights representing in excess of 3% of the total issued and outstanding shares shall not be considered. The relevant matters related to the use and rescission of the proxy shall be conducted in accordance with the Company Act.

Article 10 Directors shall be elected by adopting candidates’ nomination system. In these articles, the directors mean including independent directors.
Each shareholder of the Company is entitled to one vote per share, unless otherwise provided by applicable law or regulation or the preferred share with no voting rights issued by the Company.

Chapter 4 Directors and Audit Committees

Article 11 The Company shall have seven to nine directors. The term for which a Director will hold office shall be three (3) years. The directors shall be elected from among the list of candidates for directors by the Shareholders’ Meeting and are eligible for re-election. The total shares held by the entire body of either directors shall not be less than a specified percentage in accordance with the regulation prescribed by the Competent Authority. A company shall have at least three Independent Directors. Regulations governing the professional qualifications, restrictions on shareholdings and concurrent positions held, assessment of independence, methods of nomination and election, and other matters for compliance with respect to Independent Directors shall be followed in accordance with the Rules for election of Directors and relevant laws.
Article 11-1 The Company may take out liability insurance for the directors with respect to the liabilities resulting from exercising their duties during their terms of office. The Board is authorized to determine the compensation for the directors, taking into account the extent and value of the services provided for the Company’s operation and with reference to the standards of local and overseas industry.
Article 11-2 The Company shall set up the Audit Committee organized by all of the independent directors in accordance with the Securities and Exchange Act. The composition of the audit committee, duties, rules of meeting procedure and other compliance matters shall comply with the regulations prescribed by the securities supervisory authorities
Article 12 The Board of Directors is organized by directors. The Chairman of the Board of Directors shall be elected from among the attending directors by a majority vote and with the attendance over two thirds of the seats in a meeting of the Board of Directors. As necessary, a Vice Chairman may be elected among the attending directors in the same manner. The Chairman of the Board shall externally have the authority to represent the Company.
Article 13 In case the Chairman of the Board asks for leave or for other reason cannot exercise his power and authority, he may appoint another director to represent him by proxy in accordance with Article 208 of the Company Act. Where a director is unable to attend a meeting of the Board, he may appoint another director to represent him by proxy. Each director may act as a proxy for one other director only. The meeting of the Board of Directors shall be convened in accordance with the Company Act. In calling a meeting of the Board of Directors, a notice may be given to each director by means of electronic mail or facsimile.

Chapter 5 Managerial Officer

Article 14 The Company may appoint a multiple number of managerial officers whose appointment, dismissal and compensations shall be conducted in accordance with the Company Act.

Chapter 6 Accounting

Article 15 After the close of each fiscal year, the Board of Directors shall provide and submit the following reports to the shareholders' meeting for acceptance in accordance with the legal procedures.
1.Business Report 2.Financial Statement 3.Proposals regarding earning distribution or loss offsetting It shall be not later than the 30th day prior to the ordinary shareholders meeting and the Audit Committee submit the report to the shareholders at the ordinary shareholders meeting for their acceptance.
Article 16 The Company, if profitable in the year, shall set aside 5~20% of the profit as compensation for the employees and no higher than 1% as remuneration for the directors. However, the Company, when accumulated losses remain on the account, shall reserve a portion of its earnings to offset the losses first.
The Company may allocate employees’ remuneration prescribed in the preceding paragraph in the form of stock or cash to employees of an affiliated company meeting certain conditions. The Board or the person duly designated by the Board is authorized to decide the conditions and allocation method.

54  Appendix 2

Article 16-1 If after the annual closing of books there is a profit, the Company shall, after having provided for taxes and offset the accumulated losses of previous years, appropriate the 10% legal reserve and recognize or reverse special reserve return earnings in accordance with laws and regulations.
The Board may set aside certain percentage of the proposal for retained earnings distribution. Where there is remainder balance, together with the undistributed profits of previous years, as the earnings available for distributing to common and preferred shareholders, the Board shall propose the earnings distribution plan and submit to the Shareholders’ Meeting for approval by resolution before the distribution.

The rights, obligations and distribution sequence of the Company’s preferred share is executed in accordance with the Company’s Articles of Incorporation and applicable laws and regulations.

Where the aforesaid earnings distribution plan or dividend on preferred share is performed by means of cash dividends, it is proposed the Board of Directors be authorized for resolution. The resolution thereof shall be reported in the Shareholders’ Meeting.
Article 16-2 The Company may distribute new shares or cash by way of legal reserve or capital reserve in accordance with Article 241 of the Company Act.
Where the means of cash is performed in the preceding paragraph, it is proposed the Board of Directors be authorized for resolution. The resolution thereof shall be reported in the Shareholders’ Meeting.
Article 17 The Company is in a technology-intensive and capital-intensive technology industry at a developing stage coordinating with long-term capital planning and taking into account the shareholders’ cash flow requirement, the Company's dividend policy is to pay dividends from surplus considering factors to improve the growth and sustainable operation of the Company.
Dividend distribution is to consider the expanding the scale of operations and cash flow requirements in the future, every year the cash portion of the dividend shall not be less than 10% of the total dividend in the form of cash and stock.

Chapter 7 Supplementary Provisions

Article 18 With regard to the matters not provided for in these Articles of Incorporations, the Company Act shall govern.
Article 19 These Articles of Incorporation were enacted on March 23, 1984, and amended on March 29, 1984 for the first time, amended on April 1, 1984 for the second time, amended on November 5, 1984 for the third time,
amended on October 16, 1986 for the forth time, amended on May 10, 1987 for the fifth time, amended on June 19, 1987 for the sixth time, amended on March 24, 1989 for the seventh time,

…………………………………….

amended on June 15, 2016 for the Fortieth time, amended on June 21, 2019 for the Forty-first time. amended on June 19, 2020 for the Forty-second time.

Appendix 3 / Appendix 4  55

Appendix 3:

Shareholding of Directors

The Company has issued capital of the Company is NT$19,667,819,580 representing 1,966,781,958 common shares. According to Article 26 of the Securities and Exchange Act, the minimum number of shares that shall be held by all directors of the company is 47,202,766.

As of April 26, 2021, the number of shares held by all directors is 345,868,052 shares. The actual collective shareholding of directors was shown as below:

Title	Name	No. of Shareholding	Shareholding %
Honorary Chairman	Kuen-Yao (K.Y.) Lee	9,719,540	0.49
Chairman	Chi-Hong (Peter) Chen	409,123	0.02
Director	AU Optronics Corp. (Representative: Shuang-Lang (Paul) Peng)	335,230,510	17.04
Director	BenQ Foundation (Representative: Han-Chou (Joe) Huang)	608,083	0.03
Independent Director	Cheng-Ju (Allen) Fan	0	0
Independent Director	Lo-Yu Yen	0	0
Independent Director	Jyuo-Min Shyu	0	0
Total		345,967,256	17.59

Appendix 4:

Influence of Proposed Stock Dividend Distribution upon 2021 Operating Performance, Earnings Per Share, and Return on Investment

Not applicable because the Company’s Board of Directors did not propose stock dividend distribution for the year of 2020.

AI assistant

Qisda — AGM Information 2021

52023_rns_2021-09-23_1120ad94-e16c-4303-bdd8-797279628a55.pdf

Agenda

I. Report Items

II. Recognition and Discussion Items

Attachments

Appendices

I. Report Items

1. Business Report of 2020

Greetings to all of our Valued Shareholders,

2. Audit Committee’s Review Report

3. To report the distribution of employees’ and directors’ remuneration of 2020

4. To report the cash dividends distribution of 2020 earnings

5. To report the issuance of securities in private placement

II. Recognition and Discussion Items

Explanation:

Resolution:

Explanation:

Resolution:

Explanation:

Resolution:

4. To approve the amendment to the Articles of Incorporation (Proposed by the Board of Directors)

Explanation:

Resolution:

Explanation:

Resolution:

Explanation:

Resolution:

Explanation:

Resolution:

III. Extraordinary Motions

Independent Auditors’ Report and 2020 Financial Statements

2020 Consolidated Financial Statements

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

How the matter was addressed in our audit:

2. Valuation of inventories

Description of key audit matter:

How the matter was addressed in our audit:

3. Business combination

Description of key audit matter:

How the matter was addressed in our audit:

Description of key audit matter:

How the matter was addressed in our audit:

Other Matter

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income For the years ended December 31, 2020 and 2019

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) QISDA CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

QISDA CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Continued) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

2019 Parent Company Only Financial Statements

Independent Auditors’ Report

The Board of Directors of Qisda Corporation:

Opinion

Qisda AGM Information 2021