RECHI PRECISION CO., LTD.

Meeting Handbook for 2021 Annual Meeting of Shareholders

I.	Meeting procedure`............................................... 2`
II.	Meeting Agendas`................................................. 3`
III.	Company Reports`................................................ 4`
IV.	Proposals`....................................................... 8`
V.	Matters for discussion`............................................ 9`
VI.	Questions and Motions`........................................... 10`
VII.	Adjournment`................................................... 10`
VIII.	Attachment`.................................................... 11`
	Attachment I 2020 Business report ......................................................................... 11
	Attachment II Audit Committee’s Review Report`........................ 15`
	Attachment III Auditor’s Report`...................................... 16`
	Attachment IV The 2020 Statement of Retained Earnings`................... 39`
	Attachment V Removal of the current directors and their representatives from the
	non-compete restriction list`.............................. 40`
IX.	Appendices`.................................................... 41`
	Appendix 1 Company Corporate Charter (Articles of Incorporation)`........ 41`
	Appendix 2 Rules of Procedure for Shareholder Meeting (before amendment)`47`
	Appendix 3 Director Shareholding Schedule`.......................... 51`
	Appendix 4 Influence on the company business performance, EPS, and
	shareholder ROI by the proposal of stock grant in this shareholders’
	meeting: Not applicable`................................. 51`

I. Meeting procedure

RECHI PRECISION CO., LTD. Procedure for the 2021 Annual Meeting of Shareholders

I. Call the Meeting to Order
II. Chairperson Remarks
III. Company Reports
IV. Proposals
V. Discussion
VI. Questions and Motions

VII. Adjournment

II. Meeting Agendas

RECHI PRECISION CO., LTD. Agenda of 2021 Annual Meeting of Shareholders

Time: 9:00 a.m. on June 17 (Thursday), 2021

Address: No. 943, Sec. 2, Chenggong Rd., Guanyin Dist., Taoyuan City

I. Call the Meeting to Order
II. Chairman Remarks

III. Matters to be reported

The company's 2020 business report.
Audit Committee’s Review Report of 2020 Financial Statements.
The 2020 Report on the distribution of remuneration to employees and directors
The 2020 report on guarantees and endorsements
Amendment report of the Company’s “Rules of Procedure for Board of Directors Meetings.”
IV. Proposals
The company’s 2020 business report and financial statements
The company’s earnings distribution proposal for the year of 2020
V. Discussion
A motion for partial amendment to the Company's “Rules of Procedures Governing Shareholders’ Meeting.”
Proposal for canceling the non-compete restriction for current directors and their representatives.
VI. Questions and Motions

VII. Adjournment

III. Company Reports

Proposal: Presenting the Company's 2020 Business Report. Explanation: Please refer to Page 11 to 14 of 2020 Business Report.
Proposal: Presenting the audit committee’s report on the Company’s 2020 closing statements.
Explanation: Please refer to Page 15 for audit committee’s report on the Company’s 2020 closing statements.
Proposal: Presenting the report on the Company’s 2020 employee remuneration and director remuneration.
Explanation: The board of directors of the Company resolved on 22 March 2021 to issue NT$14,261,698 as 2020 director remuneration and NT$49,440,551 as 2020 employee remuneration, all of which to be issued in cash.
Proposal: Presenting the report on the Company’s guarantees and endorsements in 2020. Explanation: The report on the Company’s guarantees and endorsements as of 31 December 2020 shows the following information:
(1) The Company’s guarantees and endorsements for subsidiaries (2020/12/31)

				Unit: NT$thousand
The party receiving the endorsement and/or guarantee	The party receiving the endorsement and/or guarantee Company name	The limit of endorsements and/or guarantees to a single business entity (Note 1)	The highest balance of endorsements and/or guarantees in the currentperiod	The ending balance of endorsements and/or guarantees
RECHI PRECISION CO.,LTD.	Rechi Holdings Co., Ltd.	NTD8,062,969	NTD2,779,641 (USD90,500)	NTD2,256,298 (USD76,000)
RECHI PRECISION CO., LTD.	Rechi Precision(Qingdao) Electric Machinery Limited	NTD8,062,969	NTD739,448 (USD24,000)	NTD227,840 (USD8,000)
RECHI PRECISION CO.,LTD.	Rechi Precision (Jiujiang) Electric MachineryLimited	NTD8,062,969	NTD1,872,809 (USD51,000) (CNY70,000)	NTD1,430,919 (USD38,000) (CNY70,000)
Total			NTD5,391,898	NTD3,915,057

Note 1: Limit amount of guarantee/endorsement for individual target is NTD8,062,969 thousand (net value) × 100% = NTD8,062,969 thousand.

Limit amount of guarantee/endorsement is NTD8,062,969 thousand (net value) × 150% = NTD12,094,454 thousand.

Note 2: Net value is the number audited by CPA in the third quarter of 2020.

(2) Subsidiaries’ guarantees and endorsements for subsidiaries (2020/12/31)

Unit: NT$ thousand

The party receiving the endorsement and/or guarantee	The party receiving the endorsement and/or guarantee Companyname	The limit of endorsements and/or guarantees to a single business entity (Note 1)	The highest balance of endorsements and/or guarantees in the currentperiod	The ending balance of endorsements and/or guarantees
Rechi Precision (Qingdao) Electric Machinery Limited	Qingdao Rechi Electric Machinery Sales Company	NTD4,267,347 (CNY998,660)	NTD1,770,651 (CNY410,000)	NTD1,259,872 (CNY290,000)
Dyna Rechi Co., Ltd.	Dyna Rechi Jiujiang Co., Ltd.	NTD594,348	NTD188,070 (USD6,000)	NTD90,060 (USD3,000)
Dyna Rechi Co., Ltd.	Ablek Technology Co.,Ltd.	NTD594,348	NTD30,000	NTD30,000
Total			NTD1,988,721	NTD1,379,932

Note 1:

Rechi Precision(Qingdao) Electric Machinery Limited Note 1: Limit amount of guarantee/endorsement for individual target is CNY998,660 thousand (net value) × 100% = CNY998,660 thousand.
Rechi Precision(Qingdao) Electric Machinery Limited

Limit amount of guarantee/endorsement is CNY998,660 thousand (net value) × 150% = CNY1,497,990 thousand.

Dyna Rechi Co., Ltd.:

Limit amount of guarantee/endorsement for individual target is NTD1,188,696 thousand (net value) × 50% = NTD594,348 thousand.

     - Dyna Rechi Co., Ltd.:

        - Limit amount of guarantee/endorsement is NTD1,188,696 thousand (net value) × 50% = NTD594,348 thousand.

Limit amount of guarantee/endorsement by Rechi Precision (Qingdao) Electric Machinery Limited for Qingdao Rechi Electric Machinery Sales Company is the joint guarantee/endorsement by Rechi Precision (Qingdao) Electric Machinery Limited and TCL Rechi (Huizhou) Refrigeration Equipment Company Limited.
Note 2: Net value is the number audited by CPA in the third quarter of 2020.
(3) Total amount of guarantees/endorsements by the Company and subsidiaries is NTD5,294,989 thousand (2020/12/31) exceeds 50% of the Company’s net value, mainly due to the fact that subsidiaries of the Company need guarantees/endorsements from the Company when they acquire (seek) credit facilities from financial institutions. When the Company’s subsidiaries borrow funds in Mainland China, the banks require parent-company guarantees in order to acquire credit facilities. Therefore, the guarantees/endorsements by the Company are necessary and reasonable.
(4) Customs duty endorsement/guarantee
- The Company provides a bank guarantee of NTD10,000,000 to the Customs Administration as customs duty endorsement/guarantee.
- Dyna Rechi Co., Ltd. provides a bank guarantee of NTD500,000 to the Customs Administration as customs duty endorsement/guarantee.

Proposal: Amendment report for “Rules and Procedures of Board of Directors Meetings.” Explanation: The mapping of the clauses of the “Rules and Procedures of Board of Directors’ Meetings” before and after the amendment:

Amendedprovisions	Existingclauses	Explanation
Article 5 The Company’s administrative unit for the board of directors’ meetings of the Company is its Administration and Human Resource Center. The meeting administrative unit shall prepare or compile the agenda of board of directors’ meetings and send them together with the meeting notice. Notice for board of directors’ meetings may be done electronically if agreed by the counterparties. Omitted hereinafter	Article 5 The Company’s administrative unit for board of directors’ meetings is its Administration and Human Resource Center. The meeting administrative unit shall prepare or compile the agenda of board of directors’ meetings and provide sufficient meeting materials, which shall be sent together with the meeting notice (notice for board of directors’ meetings may be done electronically if agreed by the counterparties). Omitted hereinafter	Manner of expressing amendments. In accordance with Article 204-2 of the Company Act.
Article 14 The Chairman of the board meeting is to have the proposal in discussion that is ready for balloting put to the vote. The Chairman is to consult the proposal ready for balloting with the directors presented at the board meeting and it is deemed as passed if there is not any objection raised. The Chairman is to put the motion to vote if there is any objection from any of the directors presented at the board meeting. The Chairman is to have the way of balloting determined in accordance with one of the following alternatives; however, the opinion of the majority shall prevail upon the objection of the directors presented: 1. Balloting by raising hands or voting device 2. The roll-call balloting. 3. Balloting. 4. The Company’s own choice of balloting The chair may appoint vote counting personnel for the voting on a proposal in board of directors’ meetings, with all directors attending the meeting being vote monitoring personnel. The outcome of the vote must be documented and announced on site.	Article 14 The Chairman of the board meeting is to have the proposal in discussion that is ready for balloting put to the vote. The Chairman is to consult the proposal ready for balloting with the directors presented at the board meeting and it is deemed as passed if there is not any objection raised. The Chairman is to put the motion to vote if there is any objection from any of the directors presented at the board meeting. The Chairman is to have the way of balloting determined in accordance with one of the following alternatives; however, the opinion of the majority shall prevail upon the objection of the directors presented: 1. Balloting by raising hands or voting device 2. The roll-call balloting. 3. Balloting. 4. The Company’s own choice of balloting The chair may appoint vote counting personnel for the voting on a proposal in board of directors’ meetings, with all directors attending the meeting being vote monitoring personnel. The outcome of the vote must be documented and announced on site.	Manner of expressing amendments.

Amendedprovisions	Existingclauses	Explanation
“Directors attending the meeting” referred toin this articledoes not include directors who do not exercise voting rights in accordance with Paragraph 1, Article 16.	“Directors attending the meeting” referred toin the previous two paragraphsdoes not include directors who do not exercise voting rights in accordance with Paragraph 1,Article 16.
Article 17 Above omitted 9. Additional information. The resolutions reached in the board meeting that are subject to the following circumstances should be documented in the minutes of the meeting and disclosed on the reporting system designated by the competent authorities within two days from the board meeting date: (1) The objections or reservations of the independent directors that are recorded or in writing; (2)Not approved by the audit committee and approved by 2/3 of all directors, where the attendance register of the board of directors’ meeting shall be part of the meeting minutes and kept in due custody during the existence of the Company. Omitted hereinafter	Article 17 Above omitted 9. Additional information. The resolutions reached in the board meeting that are subject to the following circumstances should be documented in the minutes of the meeting and disclosed on the reporting system designated by the competent authorities within two days from the board meeting date: 1. The objections or reservations of the independent directors that are recorded or in writing; 2.For companies with an audit committee,not approved by audit committee and approved by 2/3 of all directors, where the attendance register of the board of directors’ meeting shall be part of the meeting minutes and kept in due custody during the existence of the Company. Omitted hereinafter	Amending numerical titles to consistent Chinese characters and delete redundant text.

IV. Proposals

Proposal: The company’s 2020 business report and financial statements are submitted for recognition. (Proposed by the Board)
Proposal: The Company’s 2020 business report, individual and consolidated financial statements are prepared, approved by the Board of Directors and submitted to and reviewed by the audit committee. For individual and consolidated financial statements, CPAs Tsai, Chen-Tsai and Chang, Ching-Fu from Deloitte and Touche performed audit and issued CPA’s audit report, which is submitted for recognition. (Please refer to Pages 16–27 and Pages 28–38)

Resolution:

Proposal: The Company’s earnings distribution proposal for the year of 2020 is submitted for recognition. (Proposed by the Board) Explanation:
In accordance with the law and the Company’s Articles of Association, the Company prepared the earnings distribution proposal for the year of 2020, which has been approved by resolution of the board of directors’ meeting and audited by the audit committee. (Please refer to Page 39)
After approval by the annual meeting of shareholders, the board of directors is authorized to establish the record date and other relevant matters.

Resolutions:

V. Matters for discussion

Proposal: Partial amendments to the “Rules of Procedure for Shareholders Meetings” for discussion. (Proposed by the Board) Explanation:
The mapping of the clauses of the “Rules of Procedure for Shareholder Meeting ” before and after the amendment

After amendment	Existingclauses	Explanation
Article 5-3 Matters pertaining to election or discharge of directors, alteration of the Articles of Incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the Company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, dissolution, merger, spin-off, or any matters as set forth in Paragraph 1, Article 185 hereof shall be itemized in the causes or subjects to be described and the essential contents shall be explained in the notice to convene a meeting of shareholders, and shall not be brought up as extemporary motions.	Article 5-3 Matters pertaining to election or discharge of directorsand supervisors, alteration of the Articles of Incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the Company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, dissolution, merger, spin-off, or any matters as set forth in Paragraph 1, Article 185 hereof shall be itemized in the causes or subjects to be described and the essential contents shall be explained in the notice to convene a meeting of shareholders, and shall not be brought up as extemporary motions;the essential contents may be posted on the website designated by the competent authority in charge of securities affairs or the Company, and such website shall be indicated in the above notice.	In accordance with the template in the letter from TWSE Tai-Zheng-Zhi-Li-Zi No. 11000014461 and deletion of supervisor based on the current situation.
Article 5-4 Where reelection of all directors as well as their inauguration date is stated in the “reasons for convening the shareholders meeting” of the notice, after the completion of the reelection in said meeting, such inauguration date may not be altered by any extraordinary motion or any other way in the same meeting.	Article 5-4 Where reelection of all directorsand supervisorsas well as their inauguration date is stated in the “reasons for convening the shareholders’ meeting” of the notice, after the completion of the reelection in said meeting, such inauguration date may not be altered by any extraordinary motion or any other wayin the same meeting.	Delete supervisors based on the current situation.
Article 8 The chairperson should announce the commencement of the meeting as soon as it is dueand announce relevant information such as the number of non-voting shares and the number of shares represented in the meeting. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If attending shareholders represent more than one-third but less than half of outstanding shares after two postponements, the attending shareholders mayreach a tentative	Article 8 The chairperson should announce the commencement of meeting as soon as it is due. However, if current attendants represent less than half of the Company's outstanding shares, the chairperson may announce to postpone the meeting up to two times, for a period totaling no more than one hour. If attending shareholders represent more than one-third but less than half of outstanding shares after two postponements, the attending shareholders may reach a tentative resolution according to Paragraph 1, Article 175 of the Company Act. If the number of shares represented accumulates to more than half of all outstanding shares as the meeting progresses,the chairperson may propose	In accordance with the template in the letter from TWSE Tai-Zheng-Zhi-Li-Zi No. 11000014461.

After amendment	Existingclauses	Explanation
resolution according to Paragraph 1, Article 175 of the Company Act. If the number of shares represented accumulates to more than half of all outstanding shares as the meeting progresses, the chairperson may propose the tentative resolutions for final voting according to Article 174 of The Company Act.	the tentative resolutions for final voting according to Article 174 of The Company Act.
Article 16 Above omitted. The election of directors at a shareholders’ meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected,the names of those not elected as directors and the number of votes received.	Article 16 Above omitted. The election of directors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected.	In accordance with the template in the letter from TWSE Tai-Zheng-Zhi-Li-Zi No. 11000014461.

Submitted for review.

Resolutions:

Proposal: Canceling the non-compete restriction for current directors and their representatives. (Proposed by the Board) Explanation:
According to Article 209 of the Company Act, directors shall explain the main content of their conduct for themselves or other persons within the business scope of the company to the shareholders meeting for approval.
According to Article 209 of the Company Act, propose to cancel non-compete restriction for current directors and their representatives.
If the Company’s corporate director reappoint corporate representatives due to business requirements, non-compete restriction for these corporate directors’ representatives is also cancelled.
Names and titles of directors permitted for competition:
- A. CHEN, SHENG TIEN, Chairman
- B. CHEN, CHIAO MING, Director
- C. NAKASHIMA, MITSUO, Director
- D. Cheng, Chi-Chao, Director
- E. Representative of Chuan Bao Investment Co., Ltd.: Chen, Sheng-Chuan, Director
- F. SU, CHING YANG, Director
- G. LEE, JEN FANG, Independent Director
Names of directors released from non-compete restrictions. (Please refer to Page 40) 6. Submitted for review.

Resolutions:

VI. Questions and Motions

VII. Adjournment

VIII. Attachment

Attachment I

RECHI PRECISION CO., LTD. 2020 Business report

Dear shareholders,

Japan’s JARN magazine predicted that the global household air-conditioning sales would fall by 27% in the first half of 2020 due to the impact of the COVID-19 pandemic. The sales volume in global air-conditioning market as a whole fell by 8.9% in 2020 over the year of 2019. The air-conditioning industry in China had delayed in resuming production and sales after the Chinese New Year of 2020. Fortunately, the supply and demand of the air-conditioning industry restarted after March, and the market has gradually recovered since May. However, the sales volume in domestic market of China had declined by 12.89% throughout the year due to the pandemic. In terms of exports, the sales volume in annual export market grew by 4.65%. (Source: Industry Online, JARN Magazine)

Air conditioner and compressor production and sales report of China

					Unit: 1,000pcs
Itam			2020 (January ~ December)	Year-on-year growth	2019 (January ~ December)
Air conditioner	Total production		144,905	-5.17%	152,801
	Sale	Total	141,464	-6.08%	150,627
		Domestic sales	80,281	-12.89%	92,163
		Export	61,184	4.65%	58,465
Compressor	Total production		210,411	-1.55%	213,716
	Sale	Total	211,551	-1.69%	215,181
		Domestic sales	177,752	-2.03%	181,442
		Export	33,799	0.18%	33,739

The Company’s overall compressor sales volume in 2020 was 19.31 million units, a year-on-year increase of 5.95%, and consolidated income was NT$19,319,962 thousand, a year-on-year decline of 4.04%. Market uncertainty increases, price competition worsens, and the domestic air conditioner market in China is sluggish due to the impact of COVID-19 pandemic on global economy. Under the implementation of the new national standard, the pressure of heavy inventory of constant frequency air conditioners has led to a price war; at the same time, the significant increase in cost of raw materials and the oversupply of compressor have made the competition in the compressor industry worsened.

I. Review of business operation results in 2020:
Profitability:

Consolidated Financial Statements

Unit: NT$1 thousand

Item	2020	2019	Increase (decrease) in amount	Growth rate %
Operating revenue - net	19,319,962	20,132,944	(812,982)	-4.04%
Operating cost	17,019,887	17,393,058	(373,171)	-2.15%
Gross profit	2,300,075	2,739,886	(439,811)	-16.05%
Net Operating Income	819,805	865,948	(46,143)	-5.33%
Consolidated pre-tax net profit	988,015	801,266	186,749	23.31%
Consolidated net income	722,644	646,849	75,795	11.72%
Net income attributable to the company	709,491	655,960	53,531	8.16%

Main reasons for profit growth: The global economy in 2019 was deeply affected by the China-US trade conflict, the rapid growth of air-conditioning industry for two consecutive years, the high inventories of the industry, and the change of constant frequency and inverter frequency structure faced by the industry; therefore, the market competition became severe. The oversupply of compressors has led to a price war and a decline in gross profit. Rechi under the influence of China-US trade conflict and tariffs in 2020 had quickly adjusted the production base to produce compressors in Taiwan and directly sell them into the US market; at the same time, it comprehensively improved the internal cost structure and optimized production efficiency with the good effect resulting gradually in 2020.

Compressor business:
A. Research & Development:
- The Company based on the 2020 development plan has successively completed the development of North American unit-type new energy-efficient compressors, China 1.5HP and 3.0HP miniaturized compressors, Japan new energy-saving high-efficiency inverter compressors, car-roof high-efficiency horizontal compressor, European R290 mobile air-conditioning miniaturized compressors, and multi-functional smart micro air-conditioning.

B. Sales:

The number of compressors sold in Southeast Asia, Europe, and the Chinese market increased year-on-year; also, the application of products in inverter mini-split A/C, unitary A/C, heat pump dryers, and roof top A/C increased year-on-year; however, the sale in North America, South Asia, and Central and South America decreased year-on-year.
C. Production:
The production/assembly line of the Company’s Guanyin plant in Taiwan for a capacity of 2 million units of compressor is completed and in production; also, the capacity expansion plan of Qingdao Plant is ongoing for a planned production capacity of 12 million units. The production capacity of Huizhou plant is planned for 6 million units and the production capacity of Jiujiang plant is planned for 6 million units for a grand total of 26 million units.

II. Summary of 2021 Business Plan:

In prospect of 2021, the environment affecting the Company’s operations is illustrated as follows:

Global economic environment:
The International Monetary Fund (IMF) released the “Global Economy Watch” report predicting the global economy decline by 3.5% last year.

In prospect of this year, the momentum of global recovery is stronger than expected. The IMF predicts that the global economy is to expand by 5.5% because the market expects the launch of vaccines to stimulate economic growth and the policy stimuli from the United States, Japan, and other countries.

Air conditioner and compressor industry:
A. Air-conditioning industry:
- The air-conditioning industry of China accounts for approx. 85% of the global production capacity; also, the manufacturers have begun and accelerated overseas plant construction due to the ongoing China-US trade conflict; also, they are actively expanding the European market.
- In terms of industrial competition, the two major air-conditioner manufacturers in China with self-made compressors for the reason of cleaning out constant frequency inventory and cornering inverter frequency market share after China’s implementing new energy efficiency standards in 2020 had adopted price reduction strategies to lead the air-conditioner market, which caused market prices to crash. Also, due to the gradual recovery in demand and the global central bank monetary quantitative easing policy adopted in the second half of 2020, hot money flowed to bulk commodities that caused the cost of raw materials to rise sharply and put great pressure on the industry taking as a whole.
- The global air-conditioning market declined due to the impact of the pandemic in 2020. It is expected that the launch of vaccines and the stimulation of fiscal and economic policies of various countries will help the overall air-conditioning market demand return to the level before the outbreak of the pandemic.
B. Air-conditioning energy-efficiency regulations:
- China has the constant frequency and inverter frequency integrated new energy efficiency standards formally implemented in July 2020. Australia and New Zealand also has new energy efficiency standards announced in 2020, while India will implement new energy efficiency standards in 2022. The overall air-conditioning trend is moving quickly towards inverter frequency conversion and high efficiency.
C. Compressor industry:
- The production capacity of major compressor manufacturers continues to expand, and the overall global compressor production capacity has reached 260 million units, which is an oversupply that causes severe competition in the compressor industry. Especially as the inverter compressor is the future of the industry, the market competition is therefore expected to be even more severe while fighting for market share.
- The consumer market for heat pump dryers in Europe has grown due to the home-bound regulations during the crisis of the COVID-19 pandemic that indirectly triggered the demand for home appliances. The demand for compressors that are used in the heat pump dryers has been growing dramatically since 2020 Q4.

The operating challenges arising from the changes in the overall environment in 2021 will be more severe than in previous years. The operating strategies of the Group are summarized as follows:

The annual compressor sales target is 19.5 million units and more.
The Company will continue to promote inverter compressors to account for 25% or more in response to the competition in the inverter frequency products.
Expand the economic scale and comprehensively develop new customers, new models, and new applications.
Improve product competitiveness and promote cost reasonableness continuously.

Enhance product technology reserves, and enhance basic research and mid-term/long-term product development.
Based on the 2020 CPK to improve the quality consistency in 2021.
Promote reasonableness and automation of production continuously to improve production efficiency.
Improve the efficiency of indirect personnel and continuously improve the operation process. 9. Increase the capital turnover rate and strictly control the total inventory of finished products.
Optimize human resources and substantiate talent pool management.

In prospect, the Company will continue to uphold the concept of a going concern and corporate ethical management, and based on the strategy of value innovation to continuously improve the Company’s competitiveness, to develop together with global strategic customers, and to realize the mission of maximizing corporate value.

Chairman: CHEN, SHENG TIEN President: FENG, MING FA Accounting Officer: Wu, Chin-Mei

Attachment II

RECHI PRECISION CO., LTD.

Audit Committee’s Review Report

Approved

The board of directors prepared the Company’s 2020 financial statements, earnings distribution proposal, and business report that were audit by Deloitte Taiwan and reviewed by the Audit Committee without any discrepancy identified; therefore, a report is furnished in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

Yours sincerely,

2021 Regular Shareholders Meeting

RECHI PRECISION CO., LTD.

Chair of the Audit Committee: SU, CHING YANG

May 5, 2021

Attachment III

Auditor’s Report

Audit opinions

We have audited the accompanying consolidated balance sheet of RECHI PRECISION CO., LTD. (the “Company”) and subsidiary (collectively, the “Group”) as of December 31, 2020 and 2019, and the related consolidated statement of income, consolidated statement of changes in shareholders equity, consolidated statement of cash flows, and notes to the consolidated financial statements (including major accounting policy) for the years then ended.

In my opinion, the financial statements as referred to present fairly, in all material aspects the financial position of RECHI PRECISION CO., LTD. as of December 31, 2020 and 2019, and the results of its operations and cash flows for the years then ended in conformity with the Regulation Governing the Preparation of Financial Reports by Securities Issuers, and applicable IFRS, IAS,SIC, and IFRIC as recognized by the Financial Supervisory Commission .

The basis for opinions

We conducted our audit in accordance with the Regulations Governing Auditing and Attestation of Financial statements by Certified Public Accountants and generally accepted auditing standards. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the consolidated financial statements. We are independent of RECHI Group in accordance with the Code of Ethics for certified public accountants in the part relevant to the audit of the consolidated financial statements of RECHI Group, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believed that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matter

Key audit matters are those matter that, in our professional judgment, were of most significant in our audit of the consolidated financial statements of RECHI Group in 2020. These matters were addressed in the content 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 those matters.

The key audit matters of the 2020 consolidated financial statements of RECHI PRECISION CO., LTD (RECHI Group) and its subsidiaries are described as follows:

Estimating impairments on accounts receivable

The Group’s net accounts receivable from non-related parties as of December 31, 2020 were NT$4,008,821,000, of which accounts receivable for export accounted for 55%, which was material to the overall consolidated financial statements. The assessment of impairment of accounts receivable is based on the assumption of the expected loss rate of the Group.

The Group’s impairment assessment of accounts receivable is based on assumptions on default rate and expected loss rate, while by considering historical experience, current market conditions, and forward-looking information to make assumptions and select inputs for impairment assessment. If the actual future cash flows are less than expected, a material impairment loss may have resulted.

Because of the materiality of the balances of such accounts and the critical judgments that must be exercised by the management during the assessment, the assessment of impairment of accounts receivable is a key audit item.

For the estimation and relevant disclosures of the uncertainties of accounting policies, accounting estimates, and assumptions related to accounts receivable, please refer to Notes 4, 5, and 10 of the consolidated financial statements.

The main audit procedures that we have implemented for the impairment assessment of accounts receivable above are as follows:

Understand the allowance policy for the estimated impairment of accounts receivable put forth by the management, test the correctness of the aging of the balance of accounts receivable, and check the correctness of the amount of allowance for loss put forth by the management.
Evaluate the reasonableness of the expected credit loss rate based on the status of recovery of account receivables from customers and relevant forward-looking information, while considering the current year's recovery of receivables and other available information to evaluate the reasonableness of the loss allowance.
Evaluate the status of recovery of the overdue accounts receivable in cash after the deadline to consider whether it is necessary to provide additional loss allowances.

Other information

The Company has also prepared the parent company only financial statements for the years ended December 31, 2020 and 2019, for which we have issued an unqualified opinion.

Responsibilities of Management and Those in Charge with Governance of the Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The responsibility of management is to prepare fairly presented consolidated financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reports Standards, International Accounting Standards interpretations, and announcements of interpretations recognized and published by the Financial Supervisory Commission and maintain necessary internal control related to the preparation of consolidation of financial statements in order to ensure the material misstatement caused by fraud or error does not exist in the consolidated financial statements.

In preparing the consolidated financial statements, the management is responsible for assessing the ability of the Group in continuing as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless the management intends to liquidate the Group or cease the operations without other viable alternatives.

The governing body of the Group (including the Audit Committee) are responsible for supervising the financial reporting process.

Auditor’s Responsibilities for the Audit of the Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

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 and auditor’s report. Reasonable assurance is a high level of assurance, but is not a guarantee that and audit conducted in accordance with the accounting principles generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. If fraud or errors are considered materials, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the accounting principles generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also perform the following works:

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 risks, and obtain evidence that is sufficient and appropriate to provide a basis of 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.
Understand the internal control related to the audit in order to design appropriate audit procedures under the circumstances, while 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 reasonability of accounting estimates and related disclosures made by the management.
Conclude the appropriateness of the use of the going concern basis of accounting by the management, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on RECHI Group and its 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 consolidated financial statements or, if such disclosure are inappropriate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause RECHI Group to cease to continue as a going concern.

Evaluate the overall presentation, structure, and content of the consolidated statements, including related notes, whether the consolidated statements represent the underlying transactions and events in a matter that achieves fair presentation.
Obtain sufficient and appropriate audit evidence on the financial information of business entities within the Group in order to express an opinion on the consolidated financial statements. We are responsible for guiding, supervising, and performing the audit and forming an audit opinion on the Group.

We communicate with those in charge of 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 in charge of 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 the governing body, we determined the key audit matters for the audit of the Group's consolidated financial statements for the year ended December 31, 2020. We describe these matters in our auditor’s 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 communications.

Deloitte & Touche CPA TSAI, CHEN TSAI CPA CHANG, CHING FU

Securities and Futures Bureau Approval Securities and Futures Bureau Approval Document No. Document No. Tai-Cai-Zheng (6) Zi No. 0920123784 Tai-Cai-Zheng (6) Zi No. 0920123784

March 22, 2021

RECHI PRECISION CO., LTD. and its subsidiaries

Consolidated Balance Sheet

December 31, 2020 and 2019

Code 1100 1110 1120 1136 1150 1160 1170 1180 1200 130X 1410 1470 11XX 1517 1550 1600 1755 1821 1805 1840 1990 15XX 1XXX Code 2100 2110 2150 2160 2170 2180 2200 2230 2250 2280 2365 2399 21XX 2540 2542 2570 2580 2640 2670 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX 36XX 3XXX	Assets Current assets Cash and cash equivalents (Note 4 & 6) Financial assets through profit and/or loss with measuring for the faire values--current (Note 4 & 7) The financial assets measured for the fair values through other comprehensive income- current (Notes 4 & 8) Financial assets at amortized cost- current (Notes 4, 9, and 31) Notes receivable-non-related parties (Note 4, 10 & 31) Notes receivable-related parties (Note 4 & 30) Notes receivable-non-related parties (Note 4, 5 & 10) Accounts receivable-related parties (Note 4 & 30) Other receivables (Note 30) Inventory (Note 4 and 11) Prepayments (Note 16) Other current assets (Note 16) Total current assets Non-Current assets The financial assets measured for the fair values through other comprehensive income- non-current (Note 4 & 8) Investment under Equity method (Note 4 & 13) Real property, plant and equipment (Note 4, 14 & 31) Right-of-use assets (Note 4 & 15) Other intangible assets (Note 4) Goodwill (Note 4 & 26) Deferred income tax assets (Note 4 & 23) Other non-current assets (Note 16) Total non-current assets Total assets Liabilities and equity Current liabilities Short-term borrowings (Note 17) Short-term notes payable (Note 17) Notes payable - non-related party Payable notes-related parties (Note 30) Accounts payable - non-related parties Accounts payable-related parties (Note 30) Other payables (Note 18 & 26) Income tax liability (Note 4 & 23) Liability reserve-Current Lease liabilities-current (Note 4 & 15) Refund liabilities - current (Note 21) Other current liabilities Total of current liabilities Non-current liabilities Long-term borrowings (Note 17 & 31) Long-term notes payable (Note 17) Deferred tax liabilities (Note 4 and 23) Lease liabilities-non-current (Note 4 & 15) Net defined benefit liabilities (Note 4 & 19) Other non-current liabilities Total non-current liability Total liabilities Equity of the company (Note 12, 20 & 27) Common stock Capital reserves Retained earnings Statutory surplus reserves Special surplus reserves Undistributed earnings Total retained earnings Other equity Treasury shares Total equity of the company Uncontrolled equity Total equity Total Liabilities and Equity		December 31,2020	December 31,2020	% 12 4 4 9 15 - 14 - 1 8 2 - 69 - 2 25 1 - - 2 1 31 100 6 2 20 - 9 1 3 2 - - 2 1 46 13 3 3 - - - 19 65 17 5 3 4 4 11 3) - 30 5 35 100		Unit: NT$1 December 31,2019	Unit: NT$1 December 31,2019	thousand % 4 4 3 10 13 - 17 - 1 9 4 - 65 - 2 27 1 - - 2 3 35 100 9 - 16 - 9 - 3 2 - - 2 - 41 17 4 3 - - - 24 65 19 5 3 3 4 10 5) - 29 6 35 100
			Amount $ 3,576,943 1,114,251 1,122,182 2,706,359 4,556,421 - 4,008,821 2,538 173,562 2,287,780 761,845 26,310 20,337,012 25,500 518,232 7,304,877 201,270 41,629 55,725 531,980 404,483 9,083,696 $ 29,420,708 $ 1,862,583 649,693 5,805,047 64,459 2,731,900 134,719 876,820 514,837 90,467 10,720 610,010 243,534 13,594,789 3,683,240 999,546 735,767 45,557 52,253 29,749 5,546,112 19,140,901 5,049,151 1,343,868 923,331 1,199,368 1,066,053 3,188,752 743,222) 306) 8,838,243 1,441,564 10,279,807 $ 29,420,708				Amount $ 1,158,126 1,161,644 692,830 2,510,524 3,574,646 782 4,460,765 161 107,274 2,486,785 1,115,064 35,709 17,304,310 27,240 519,427 7,207,022 163,609 43,448 55,725 553,256 811,626 9,381,353 $ 26,685,663 $ 2,500,210 99,937 4,168,451 30,331 2,321,114 57,593 816,390 404,056 51,304 3,258 478,246 51,704 10,982,594 4,510,660 998,879 641,390 13,075 54,727 34,754 6,253,485 17,236,079 5,060,131 1,351,403 857,735 863,535 1,025,691 2,746,961 1,199,368) 34,266) 7,924,861 1,524,723 9,449,584 $ 26,685,663
		( (		(		( (		(

The notes attached shall constitute an integral part of this Consolidated financial statement.

Chairman: CHEN, SHENG TIEN Manager: FENG, MING FA

Accounting Manager: WU, CHIN MEI

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Income Statement

January 1 to December 31, 2020 and 2019

Unit: NTD thousands, except Earnings Per Share (NTD)

Code 4100 Sales revenue (Note 4, 21 & 30) 5000 Operating cost (Note 11, 22 & 30) 5900 Gross profit Operating expenses (Note 22 & 30) 6100 Marketing expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (reversal gain) (Note 10) 6000 Total operating expenses 6900 Net Operating Income Non-operating income and expense (Note 22 & 30) 7100 Interest revenue 7010 Other income 7020 Other profits and losses 7050 Financial costs 7060 The share of profit/loss on associates accounted for using the equity method (Note 13) 7000 Total non-operating revenues and expenses		2020

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Code 7900 Net profit before tax 7950 Income tax expenses (Note 4 and 23) 8200 Net profits of the current year Other comprehensive income 8310 Titles not reclassified as profit and loss accounts: 8311 Determined Benefit Plan Reevaluation (Note 4 & 19) 8316 Unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive income (Note 20) 8349 Incomes tax related to titles not subject to reclassification (Note 20 & 23) 8360 Accounts to be reclassified to profit or loss subsequently: 8361 Exchange differences from the translation of financial statements of foreign operations (Note 4 & 20) 8399 Income tax related to titles that could be reclassified (Note 20 & 23) 8300 Other comprehensive income of the current year (net amount after taxation) 8500 Total amount of comprehensive income of the current year		2020		% 5 1) 4 - 2 - 2 - - - 2 6		2019
		Amount $ 988,015 265,371) 722,644 636 427,612 85,620) 342,628 158,571 30,069) 128,502 471,130 $ 1,193,774						%
	( ( (		(				4 ( 1) 3 - - - - ( 3 ) 1 ( 2) ( 2) 1

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Code Profit attributable to: 8610 The company’s shareholders 8620 Uncontrolled equity 8600 Total comprehensive income attributable to: 8710 The company’s shareholders 8720 Uncontrolled equity 8700 Earnings per share (Note 24) Business units in continuing operation 9710 Basic 9810 Diluted		2020		% 4 - 4 6 - 6		2019
		Amount $ 709,491 13,153 $ 722,644 $ 1,166,146 27,628 $ 1,193,774 $ 1.41 $ 1.40				Amount $ 655,960 9,111) $ 646,849 $ 319,951 70,402) $ 249,549 $ 1.30 $ 1.29		%
					( (			3 - 3 1 - 1

The notes attached shall constitute an integral part of this Consolidated financial statement.

Chairman: CHEN, SHENG TIEN Manager: FENG, MING FA Accounting Manager: WU, CHIN MEI

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Statements of Changes in Shareholders’ Equity January 1 to December 31, 2020 and 2019

			December 31, 2020 and 2019
Code A1 Balance as of January 1, 2019 Dividend allocation and distribution for 2018 B1 Statutory surplus reserves B3 Special surplus reserves B5 Cash dividend to the Company’s shareholders O1 Cash dividend to the Subsidiaries’ shareholders M7 Changes in the ownership equity on a subsidiary C3 Generated as a result of endowments D1 Net profits of the 2019 D3 Other comprehensive net income in 2019 D5 Total profit and loss in 2019 O1 Increase in non-controlling interests - capital increase by subsidiaries Z1 Balance as of December 31, 2019 Dividend allocation and distribution for 2019 B1 Statutory surplus reserves B3 Special surplus reserves B5 Cash dividend to the Company’s shareholders L1 Purchase of treasury stock L3 Deregistration of treasury shares O1 Cash dividend to the Subsidiaries’ shareholders D1 Net profits of the 2020 D3 Other comprehensive net income in 2020 D5 Total profit and loss in 2020 Z1 Balance as of December 31, 2020 Chairman: CHEN, SHENG TIEN			Equityof the company		Total $ 8,197,464 - - 605,898 ) - 11,693 1,651 655,960 336,009) 319,951 - 7,924,861 - - 252,458 ) 306 ) - - 709,491 456,655 1,166,146 $ 8,838,243		Unit: NT$1 thousand Uncontrolled equity Total equity $ 1,529,711 $ 9,727,175 - - - - - ( 605,898 ) 40,586 ) ( 40,586 ) - 11,693 - 1,651 9,111 ) 646,849 61,291) ( 397,300) 70,402) 249,549 106,000 106,000 1,524,723 9,449,584 - - - - - ( 252,458 ) - ( 306 ) - - 110,787 ) ( 110,787 ) 13,153 722,644 14,475 471,130 27,628 1,193,774 $ 1,441,564 $ 10,279,807
		Capital stock Shares (in Thousand shares) Amount Capital reserves Statutory surplus reserves 506,013 $ 5,060,131 $ 1,338,059 $ 747,592 - - - 110,143 - - - - - - - - - - - - - - 11,693 - - - 1,651 - - - - - - - - - - - - - - - - - 506,013 5,060,131 1,351,403 857,735 - - - 65,596 - - - - - - - - - - - - 1,098 ) ( 10,980 ) ( 7,535 ) - - - - - - - - - - - - - - - - - 504,915 $ 5,049,151 $ 1,343,868 $ 923,331 The notes attached shall constitute an Manager: FENG , MING FA	Retained earnings
		Shares (in Thousand shares) 506,013 - - - - - - - - - - 506,013 - - - - 1,098 ) - - - - 504,915
	(			( ( ( (		( ( ( ( (		$ 9,727,175 - - ( 605,898 ) ( 40,586 ) 11,693 1,651 646,849 ( 397,300) 249,549 106,000 9,449,584 - - ( 252,458 ) ( 306 ) - ( 110,787 ) 722,644 471,130 1,193,774 $ 10,279,807

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Statements of Cash Flow

January 1 to December 31, 2020 and 2019

Unit: NT$1 thousand

Code Cash flow from operating activities A10000 Current year net profit before taxation A20010 Profits and loss A20100 Depreciation expenses A20200 Amortization expenses A20300 Expected credit impairment loss (reversal gain) A20400 Net gains on financial assets at fair value through profit or loss A20900 Interest expenses A21200 Interest revenue A21300 Dividend income A22300 The shares of profit and/or loss at equity method over the associates A22500 Net gains on disposal of property, plant and equipment and prepaid rents A23700 Impairment loss of property, plant and equipment A23700 Inventory valuation and obsolescence losses A24100 Unrealized foreign currency exchange loss (gain) A29900 Gains on lease modification A30000 Net change in operating assets and liabilities A31115 Decrease (increase) in financial assets mandatorily measured at fair value through profit or loss A31130 Increase in notes receivable A31140 Decrease in notes receivable-related party A31150 Decrease in accounts receivable A31160 Decrease (increase) in accounts receivable-related parties A31180 Increase in other receivable A31200 Decrease in inventories A31230 Decrease in prepayments A31240 Decrease in other current assets A32125 Increase in return liability- current A32130 Increase in notes payable	2020 $ 988,015 876,830 9,629 ( 6,977 ) ( 44,877 ) 148,846 ( 74,693 ) ( 31,658 ) ( 1,368 ) ( 2,252 ) - 9,738 ( 59,473 ) - 92,270 ( 915,438 ) 782 584,450 ( 2,377 ) ( 74,303 ) 217,485 353,219 9,399 133,463 1,541,765	2019
		$ 801,266 824,731 9,864 5,864 ( 40,552 ) 250,285 ( 79,085 ) ( 32,390 ) ( 7,939 ) ( 46 ) 2,317 7,440 7,583 ( 10 ) ( 265,863 ) ( 115,711 ) 957 423,314 141 ( 43,950 ) 110,764 88,413 9,086 186,998 557,814

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Code
A32140
Increase (decrease) in notes payable
-related parties
A32150
Increase in accounts payable
A32160
Increase (decrease) in accounts
payable -related parties
A32180
Increase (decrease) in other
accounts payable
A32200
Increase (decrease) in provisions
A32230
Increase (decrease) in other current
liabilities
A32240
Increase decrease in net defined
benefit liability
A33000
Cash inflow from operating activities
A33100
Interest received
A33300
Interest payment

A33500
Income tax payment

AAAA
Net cash inflow from operating
activities
Cash flow from investing activities
B00040
Financial assets acquired on the basis of
cost after amortization
B00050
Financial assets on the basis of cost after
amortization
B01800
Acquisition of investment in associates.
B02200
Net cash outflow from acquisition of
subsidiary
B02700
Purchase of property, plant, and
equipment
B02800
Proceeds from disposal of property, plant
and equipment
B04500
Purchase of intangible assets

B06700
Increase of other non-current assets

B07600
Dividends received
B09900
Acquisition of government subsidies

BBBB
Net cash outflow from investing
activities
Cash flow from financing activities
C00200
Decrease in short-term loans

C00500
Increase in short-term notes payable
C00600
Decrease in short-term notes payable
C01600
Proceeds from long-term loan
C01700
Re-payments of long-term borrowings

C01800
Increase in long-term notes payable
C03000
Collect the guarantee deposits received
C03100
Return of guarantee deposits received

C04020
Repayments of principal portion of the
lease
C04500
Pay owners' dividends

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Code C04900 Purchase of treasury stock C05800 Increase (Decrease) in reduced non-controlling interest CCCC Net cash outflow from financing activities DDDD Impact of changes in exchange rate on cash and cash equivalents EEEE Net increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents balance – beginning of year E00200 Cash and cash equivalents balance – end of year	2020 ( $ 306 ) ( 110,787) (1,266,165) 12,308 2,418,817 1,158,126 $ 3,576,943		2019
		$ - 65,414 ( 522,122) ( 150,549) ( 533,737 ) 1,691,863 $ 1,158,126

The notes attached shall constitute an integral part of this Consolidated financial statement.

Chairman: CHEN, SHENG TIEN Manager: FENG, MING FA Accounting Manager: WU, CHIN MEI

Auditor’s Report

To: RECHI PRECISION CO., LTD.:

Audit opinions

We have audited the accompanying individual balance sheet of RECHI PRECISION CO., LTD. (the “Company”) as of December 31, 2020 and 2019, and the related individual statement of income, individual statement of changes in shareholders equity, individual statement of cash flows, and notes to the individual financial statements (including major accounting policy) for the years then ended.

In our opinion, the accompanying individual financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019 and for the years then ended, and and its individual financial performance and its individual cash flows for the years then ended in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

The basis for opinions

We conducted our audit in accordance with the Regulations Governing Auditing and Attestation of Financial statements by Certified Public Accountants and generally accepted auditing standards. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the separate financial statements. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believed that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matter

Key audit matters are those matter that, in our professional judgment, were of most significant in our audit of the individual financial statements of te Company in 2020. These matters were addressed in the content of our audit of the individual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on those matters.

The key audit matters of the 2020 individual financial statements of the Company are described as follows:

Estimating impairments on accounts receivable

The Company’s net accounts receivable from non-related parties as of December 31, 2020 were NT$2,257,126,000, which was material to the financial statements. The impairment assessment of accounts receivable is based on assumptions on default rate and expected loss rate, while by considering historical experience, current market conditions, and forward-looking information to make assumptions and select inputs for impairment assessment. If the actual future cash flows are less than expected, a material impairment loss may have resulted.

For the major sources and relevant disclosures of the uncertainties of accounting policies and significant accounting judgement, estimates, and assumptions related to accounts receivable, please refer to Notes 4, 5, and 8 of the individual financial statements.

The main audit procedures that we have implemented for the impairment assessment of accounts receivable above are as follows:

Understand the allowance policy for the estimated impairment of accounts receivable put forth by the management, test the correctness of the aging of the balance of accounts receivable, and check the correctness of the amount of allowance for loss put forth by the management.
Evaluate the reasonableness of the expected credit loss rate based on the status of recovery of account receivables from customers and relevant forward-looking information, while considering the current year's recovery of receivables and other available information to evaluate the reasonableness of the loss allowance.
Evaluate the status of recovery of the overdue accounts receivable in cash after the deadline to consider whether it is necessary to provide additional loss allowances.

Responsibilities of Management and Those in Charge with Governance of the Individual Financial Statements

Management is responsible for the preparation and fair presentation of the individual financial 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 individual financial financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the individual financial statements, the management is responsible for assessing the ability of the Company in continuing as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless the management intends to liquidate the Company or cease the operations without other viable alternatives.

The governing body of the Company (including the Audit Committee) are responsible for supervising the financial reporting process.

Auditor’s Responsibilities for the Audit of the Individual Financial Statements

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

Identify and assess the risks of material misstatement of the individual financial statements, whether due to fraud or error, design, and perform audit procedures responsive risks, and obtain evidence that is sufficient and appropriate to provide a basis of 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.
Understand the internal control related to the audit in order to design appropriate audit procedures under the circumstances, while not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonability of accounting estimates and related disclosures made by the management.
Conclude the appropriateness of the use of the going concern basis of accounting by the management, 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 and its 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 individual financial statements or, if such disclosure are inappropriate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the 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 individual statements, including related notes, whether the individual statements represent the underlying transactions and events in a matter that achieves fair presentation.

Obtain sufficient and appropriate audit evidence on the financial information of business entities within the Company in order to express an opinion on the individual financial statements. We are responsible for guiding, supervising, and performing the audit and forming an audit opinion on the Company.

From the matters communicated with the governing body, we determined the key audit matters for the audit of the Company's individual financial statements for the year ended December 31, 2020. We describe these matters in our auditor’s 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 communications.

Deloitte & Touche CPA TSAI, CHEN TSAI

CPA CHANG, CHING FU

Securities and Futures Bureau Approval Securities and Futures Bureau Approval Document No. Document No. Tai-Cai-Zheng (6) Zi No. 0920123784 Tai-Cai-Zheng (6) Zi No. 0920123784

March 22, 2021

RECHI PRECISION CO., LTD.

Individual Balance Sheet

December 31, 2020 and 2019

Unit: NT$1 thousand

Code 1100 1120 1150 1160 1170 1180 1200 1210 130X 1410 1470 11XX 1550 1600 1755 1780 1840 1990 15XX 1XXX Code 2100 2110 2170 2180 2200 2230 2280 2365 2399 21XX 2541 2542 2570 2580 2640 2670 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 3XXX	Assets Current assets Cash and cash equivalents (Note 4 & 6) The financial assets measured for the fair values through other comprehensive income- current (Notes 4 & 7) Notes receivable- non-related parties (Notes 4 & 8) Notes receivable-related parties (Notes 4 & 24) Notes receivable-non-related parties (Notes 4, 5 & 8) Accounts receivable-related parties (Notes 4 & 24) Other receivables Other receivables-related parties (Note 24) Inventory (Note 4 and 9) Prepayments Other current assets Total current assets Non-Current assets Investment accounted for using equity method (Notes 4 and 10) Property, plant and equipment (Notes 4, 11 & 25) Right-of-use assets (Notes 4 & 12) Other intangible assets (Note 4) Deferred income tax assets (Note 4 and 19) Other non-current assets Total non-current assets Total assets Liabilities and equity Current liabilities Short-term borrowings (Note 13) Short-term notes payable (Note 13) Accounts payable - non-related parties Accounts payable-related parties (Note 24) Other payables (Notes 14 & 24) Income tax liability (Notes 4 & 19) Lease liabilities-current (Note 4 & 12) Refund liabilities - current (Note 17) Other current liabilities Total of current liabilities Non-current liabilities Short-term borrowings (Notes 13 & 25) Long-term notes payable (Note 13) Deferred tax liabilities (Note 4 & 19) Lease liabilities-non-current (Note 4 & 12) Net defined benefit liabilities (Note 4 & 15) Other non-current liabilities Total non-current liability Total liabilities Equity (Notes 16 & 21) Common stock Capital reserves Retained earnings Statutory surplus reserves Special surplus reserves Undistributed earnings Total retained earnings Other equity Treasury shares Total equity Total Liabilities and Equity		December 31,2020	December 31,2020	% 1 6 1 - 13 - - 5 3 - - 29 66 4 - - 1 - 71 100 4 3 - 12 2 1 - - 1 23 18 6 4 - - - 28 51 28 7 5 7 6 18 4) - 49 100		December 31,2019	December 31,2019
			Amount $ 230,166 1,067,276 193,861 - 2,257,126 28,439 5,874 936,965 425,313 25,062 1,514 5,171,596 11,930,726 735,790 1,811 25,749 133,600 26,848 12,854,524 $ 18,026,120 $ 706,849 499,854 28,739 2,267,932 328,618 148,927 838 73,681 155,123 4,210,561 3,199,080 999,546 724,995 950 52,253 492 4,977,316 9,187,877 5,049,151 1,343,868 923,331 1,199,368 1,066,053 3,188,752 743,222) 306) 8,838,243 $ 18,026,120				Amount $ 71,974 639,810 182,376 9 2,315,355 25,917 27 419,761 380,617 24,485 4,241 4,064,572 11,728,422 627,170 1,294 23,260 184,673 128,473 12,693,292 $ 16,757,864 $ 335,900 - 18,183 2,353,587 253,173 75,887 1,254 92,264 17,571 3,147,819 4,001,000 998,879 630,215 71 54,727 292 5,685,184 8,833,003 5,060,131 1,351,403 857,735 863,535 1,025,691 2,746,961 1,199,368) 34,266) 7,924,861 $ 16,757,864		%
		( (		(		( (		(	- 4 1 - 14 - - 3 2 - - 24 70 4 - - 1 1 76 100 2 - - 14 2 - - 1 - 19 24 6 4 - - - 34 53 30 8 5 5 6 16 7) - 47 100

The notes attached shall constitute an integral part of this individual financial statement. Chairman: CHEN, SHENG TIEN Manager: FENG, MING FA Accounting Manager: WU, CHIN MEI

RECHI PRECISION CO., LTD.

Individual Income Statement

For the Years Ended December 31, 2020 and 2019

Unit: NTD thousands, except Earnings Per Share (NTD)

Code 4110 Operating income (Notes 4, 17 & 24) 5000 Operating cost (Notes 9, 18 & 24) 5900 Gross profit 5920 Realized loss on subsidiaries 5950 Realized gross profits Operating expenses (Notes 18 & 24) 6100 Marketing expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (Note 8) 6000 Total operating expenses 6900 Net Operating Income Non-operating income and expense (Notes 18 & 24) 7100 Interest revenue 7010 Other income 7020 Other profits and losses 7050 Financial costs 7070 Share of profit or loss on subsidiaries accounted for using the equity method 7000 Total non-operating revenues and expenses		2020

(Continued on next page)

(Continued from previous page)

Code 7900 Net profit before tax 7950 Income tax expenses (Note 19) 8200 Net profits of the current year Other comprehensive income 8310 Titles not reclassified as profit and loss accounts: 8311 Remeasurement of defined benefit plan (Note 15) 8316 Unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive profit or loss (Note 16) 8330 Share of other comprehensive income on subsidiaries accounted for using the equity method 8349 Incomes tax related to titles not subject to reclassification (Note 19) 8360 Accounts to be reclassified to profit or loss subsequently: 8361 Exchange differences from the translation of financial statements of foreign operations (Note 16) 8399 Income tax related to items that may be reclassified (Note 16 & 19) 8300 Other comprehensive income of the current year (net amount after taxation) 8500 Total amount of comprehensive income of the current year (Continued on next page)		2020		% 10 2) 8 - 5 - 1) 4 1 - 1 5 13		2019
		Amount $ 889,955 180,464) 709,491 636 427,466 146 85,620) 342,628 141,393 27,366) 114,027 456,655 $ 1,166,146						%
	( ( (		( (				10 ( 2) 8 - - - - - ( 5 ) 1 ( 4) ( 4) 4

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Code Earnings per share (Note 20) Business units in continuing operation 9710 Basic 9810 Diluted		2020	%		2019
		Amount $ 1.41 $ 1.40			Amount $ 1.30 $ 1.29	%

The notes attached shall constitute an integral part of this individual financial statement.

Chairman: CHEN, SHENG TIEN Manager: FENG, MING FA Accounting Manager: WU, CHIN MEI

Unit: NT$1 thousand

RECHI PRECISION CO., LTD.

Individual Statements of Changes in Shareholders’ Equity

For the Years Ended December 31, 2020 and 2019

Capital stock Shares (in Thousand shares) Amount 506,013 $ 5,060,131 - - - - - - - - - - - - - - - - 506,013 5,060,131 - - - - - - - - ( 1,098 ) ( 10,980 ) - - - - - - 504,915 $ 5,049,151	Capital stock Shares (in Thousand shares) Amount 506,013 $ 5,060,131 - - - - - - - - - - - - - - - - 506,013 5,060,131 - - - - - - - - ( 1,098 ) ( 10,980 ) - - - - - - 504,915 $ 5,049,151	Capital reserves $ 1,338,059 - - - 11,693 1,651 - - - 1,351,403 - - - - ( 7,535 ) - - - $ 1,343,868		Retained earnings		Other equity Exchange differences from the translation of financial statements of foreign operations Unrealized gain on financial assets at fair value through other comprehensive profit or loss ( $ 719,013 ) ( $ 144,522 ) - - - - - - - - - - - - ( 356,548) 20,715 ( 356,548) 20,715 ( 1,075,561 ) ( 123,807 ) - - - - - - - - - - - - 114,027 342,119 114,027 342,119 ($ 961,534) $ 218,312	Other equity Exchange differences from the translation of financial statements of foreign operations Unrealized gain on financial assets at fair value through other comprehensive profit or loss ( $ 719,013 ) ( $ 144,522 ) - - - - - - - - - - - - ( 356,548) 20,715 ( 356,548) 20,715 ( 1,075,561 ) ( 123,807 ) - - - - - - - - - - - - 114,027 342,119 114,027 342,119 ($ 961,534) $ 218,312	Treasuryshares ( $ 34,266 ) - - - - - - - - ( 34,266 ) - - - ( 306 ) 34,266 - - - ($ 306)		Total equity
						Exchange differences from the translation of financial statements of foreign operations ( $ 719,013 ) - - - - - - ( 356,548) ( 356,548) ( 1,075,561 ) - - - - - - 114,027 114,027 ($ 961,534)
Shares (in Thousand shares) 506,013 - - - - - - - - 506,013 - - - - ( 1,098 ) - - - 504,915			Statutory surplus reserves $ 747,592 110,143 - - - - - - - 857,735 65,596 - - - - - - - $ 923,331	Special surplus reserves $ 570,493 - 293,042 - - - - - - 863,535 - 335,833 - - - - - - $ 1,199,368
(	(	(			( ( ( ( ( ( ( (	( ( ( ( (	( (	( ( ( (	( ( ( (	$ 8,197,464 - - 605,898 ) 11,693 1,651 655,960 336,009) 319,951 7,924,861 - - 252,458 ) 306 ) - 709,491 456,655 1,166,146 $ 8,838,243

The notes attached shall constitute an integral part of this individual financial statement.

Chairman: CHEN, SHENG TIEN

Manager: FENG, MING FA

Accounting Manager: WU, CHIN MEI

RECHI PRECISION CO., LTD. Individual Statements of Cash Flow

For the Years Ended December 31, 2020 and 2019

Code
Cash flow from operating activities
A10000
Current year net profit before taxation

A20010
Profits and loss
A20100
Depreciation expenses
A20200
Amortization expenses
A20300
Expected credit impairment loss
A20900
Interest expenses
A21200
Interest revenue

A21300
Dividend income

A22300
Share of profit or loss on
subsidiaries accounted for using
the equity method
A22500
Net gains on disposal of property,
plant and equipment
A23700
Inventory valuation and
obsolescence losses
A24000
Realized net loss on subsidiaries
A24100
Unrealized foreign currency
exchange loss (gain)
A29900
Gains on lease modification
A30000
Net change in operating assets and
liabilities
A31130
Increase in notes receivable

A31140
Decrease in notes receivable-related
party
A31150
Decrease in accounts receivable
A31160
Decrease (increase) in accounts
receivable-related parties
A31180
Increase (decrease) in other accounts
receivable
A31190
Decrease (increase) in other
receivables-related parties
A31200
Increase in inventories

A31230
Increased in Advance

A31240
Increase (decrease) in other current
assets
A32125
Increase (decrease) in return
liability- current
A32150
Increase (decrease) in accounts
payable
A32160
Increase (decrease) in accounts
payable -related parties
A32180
Increase (decrease) in other accounts
payable
A32240
Increase decrease in net defined
benefit liability
A32230
Increase (decrease) in other current
liabilities
A33000
Cash inflow from operating activities

Unit: NT$1 thousand
2020
2019
$ 889,955
$ 822,861
62,021
57,793
3,318
3,242
2,117
398
73,021
65,579
(
11,192 )
(
8,983 )
(
30,459 )
(
30,067 )
(
744,577 )
(
527,410 )
(
956 )
(
308 )
-
4,221
-
14,462
(
66,206 )
32,105
-
(
10 )
(
8,762 )
(
129,995 )
9
1,730
111,196
52,927
(
3,480 )
17,819
(
5,847 )
712
59,350
(
7,357 )
(
44,696 )
(
119,437 )
(
577 )
(
10,090 )
2,727
(
651 )
(
16,884 )
32,912
10,556
(
26,811 )
(
123,003 )
499,466
57,049
(
98,176 )
(
1,838 )
(
13,067 )

137,552
(
17,593)
350,394
616,272

(Continued on next page)

(Continued from previous page)

Code A33100 Interest received A33300 Interest payment A33500 Income tax payment AAAA Net cash inflow from operating activities Cash flow from investing activities B02700 Purchase of property, plant, and equipment B02800 Proceeds from disposal of property, plant and equipment B04300 Increase in other receivables - related parties B04400 Decreased in other receivables - related parties B04500 Purchase of intangible assets B06700 Increase of other non-current assets B07600 Dividends received BBBB Net cash inflow in investing activities Cash flow from financing activities C00100 Increase of short-term loans C00200 Decrease in short-term loans C00500 Increase in short-term notes payable C00600 Decrease in short-term notes payable C01800 Increase in long-term notes payable C01600 Proceeds from long-term loan C01700 Re-payments of long-term borrowings C03000 Collect the guarantee deposits received C04020 Repayments of principal portion of the lease C04500 Dividends paid C04900 Purchase of treasury stock C05400 Acquisition of equity of subsidiaries CCCC Net cash outflow from financing activities EEEE Net increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents balance – beginning of year E00200 Cash and cash equivalents balance – end of year	2020 $ 8,422 ( 73,574 ) ( 74,557) 210,685 ( 35,216 ) 9,620 ( 880,040 ) 353,920 ( 5,807 ) ( 21,472 ) 714,271 135,276 368,314 - 499,854 - - 1,413,080 ( 2,215,000 ) 200 ( 1,453 ) ( 252,458 ) ( 306 ) - ( 187,769) 158,192 71,974 $ 230,166	2019
		$ 6,135 ( 67,722 ) ( 186,872) 367,813 ( 23,399 ) 1,465 - - ( 1,342 ) ( 143,689 ) 172,137 5,172 - ( 700,161 ) - ( 429,820 ) 998,879 4,486,000 ( 3,385,000 ) - ( 1,901 ) ( 605,898 ) - ( 906,140) ( 544,041) ( 171,056 ) 243,030 $ 71,974

The notes attached shall constitute an integral part of this individual financial statement.

Chairman: CHEN, SHENG TIEN Manager: FENG, MING FA Accounting Manager: WU, CHIN MEI

Attachment IV

RECHI PRECISION CO., LTD. The 2020 Statement of Retained Earnings

Unit: NTD

	Unit: NTD	Unit: NTD
Item	Amount
Opening undistributed earnings Cancelled treasury shares and debited it to “retained earnings” The defined benefit plans re-measured amount is recognized in the “retained earnings” account. Unappropriated adjusted earnings Add: Net income Less: Legal Capital Reserve Add: Reversal of legally appropriated special reserve Current distributable earnings	371,803,434 (15,751,122) 509,210	709,491,287 (69,424,938) 456,145,630
	356,561,522
		1,452,773,501
Distribution: Shareholder dividends – cash (NTD0.7 per share) – Stock share (NT$0.0per share)		(353,426,574) 0
Closing undistributed earnings		1,099,346,927

Note 1: The proposal for earnings distribution is calculated according to the outstanding 504,915,105 shares on the date the resolution was reached by the Company’s board of directors. However, if the issued convertible corporate bonds are converted into common stock shares or the treasury shares are repurchased before the cash dividend distribution base date, causing the number of outstanding shares to go up or down on the Company’s cash dividends distribution base date, the board of directors shall be authorized to adjust the cash dividends per share according to the cash dividend amount resolved for current earnings distribution proposal and the actual number of outstanding shares on the cash dividend distribution base date.

Chairman: CHEN, SHENG TIEN Manager: FENG, MING FA Accounting Officer: WU, CHIN MEI

Attachment V Removal of the current directors and their representatives from the non-compete restriction list

Identity	Name	Representative(individual)/Job Position	Address	Main business operations	Note
Director	SAMPO CORPORATION Representative: CHEN, SHENG TIEN	Chairman of SAMPO CORPORATION Chairman of Rechi Investments Co., Ltd. Chairman of Rechi Holdings Co., Ltd Chairman of AMIGO LOGISTICS CORPORATION Chairman of Sampo Japan Co., Ltd. Chairman of SAMPO International Food Service Co., Ltd.	No. 26, Dinghu Rd., Guishan Dist., Taoyuan City 333008 10F.-1, No. 374, Sec. 2, Bade Rd., Songshan Dist., Taipei City 10556 Palm Grove House, P.O. Box 438, Road Town Tortola, British Virgin Islands No. 18-1, Dinghu 5th St., Guishan Dist., Taoyuan City 11F, Iwatani 2ndBuilding, 2-14, Azuchi-cho, Chuo-ku, Osaka, Japan No. 26, Dinghu Rd., Guishan Dist., Taoyuan City 333008	Manufacturing and sales of home appliance Investment business Investment business and trade of compressor and components Warehousing and Logistics Sales of home appliances and electronic products Meal manufacturing, food and miscellaneous goods,beverages,and tobacco and alcohol retail	Incumbent
Director	SAMPO CORPORATION Representative: CHEN, CHIAO MING	Director of GR Holdings (Hong Kong) Limited Director of Rechi Refrigeration Dongguan Co., Ltd. Director of Dongguan Rechi Compressor Co., Ltd. Director of TCL Rechi (Huizhou) Refrigeration Equipment Company Limited Director of Rechi Precision(Huizhou) Machanism Company Director of Dyna Rechi Co., Ltd. Director of Rechi Precision (Jiujiang) Electric Machinery Limited Chairman of Ablek Technology Co., Ltd. Director of Rechi Investments Co.,Ltd.	Room 1610-1611, Gi-Chen Centre, No. 302-308, Hennessy Road, Wanchai, Hong Kong No. 38, Gaoke 3rdRoad, Shinlian High-Tech Industrial Zone, Humen Township, Dongguan City, 523917 No. 38, Gaoke 3rdRoad, Shinlian High-Tech Industrial Zone, Humen Township, Dongguan City, 523917 No.7 Area, Zhongkai High-tech Development Zone, Huizhou City, 516006 No.7 Area, Zhongkai High-tech Development Zone, Huizhou City, 516006 No. 25, Jingjian Rd., Pingtung City, Pingtung County 90093 No. 13, Chunjiang Road, Chengxikong District, Economic and Technological Development Zone, Jiujiang City, Jiangxi Province No. 259, Sanyuan St., Yangmei Dist., Taoyuan City 326 10F.-1,No. 374,Sec. 2,Bade Rd.,Songshan Dist.,Taipei City10556	Investment business and motor trading Motor manufacturing Compressor motor manufacturing Compressor assembly Compressor components Design and production of BLDC motors Sales of new electromechanical components, compressors, and components Trade of motor and components Investment business	Current
Director	Chuan Bao Investment Co., Ltd. Corporate representative: CHEN, SHENG CHUAN	Chairman of NUCOM INTERNATIONAL CORPORATION Vice Chairman of SAMPO CORPORATION Director of Sunpo International Investment Co., Ltd. Director of AMIGO LOGISTICS CORPORATION Director of DongGuan Sheng Bo Electronics Co., Ltd.	2F., No.58, Sec. 1, Minsheng E. Rd., Songshan Dist., Taipei City No. 26, Dinghu Rd., Guishan Dist., Taoyuan City 333008 Omar Hodge Building, Wickhams Cay I, P.O. Box 362, Road Town, Tortola, British Virgin Islands No. 18-1, Dinghu 5th St., Guishan Dist., Taoyuan City Building B, Shintai Industrial Park, Du-Lun Road, Chisha Village, Shatian Township,Dongguan City,GuangdongProvince	Holdings Manufacturing and sales of home appliance Investment holdings and trading Warehousing and Logistics Manufacturing and sales of electronic products	Incumbent
Director	Sharp Corporation Representative: NAKASHIMA,MITSUO	Manager and Assistant Manager of SAS Department/Manager of Domestic and International air-conditioningPCI Department	No. 72, 3-chome, 1, Kitakaicho, Yao City, Osaka Prefecture (581-8585)	Production and development of “white goods” (major appliance) and “PCI air” purification products	Current
Director	China Steel Corporation Representative: Cheng, Chi-Chao	Acting Vice President of Technical Department of China Steel Corporation Director of Dyna Rechi Co., Ltd. Chairman of INFOCHAMP SYSTEMS CORPORATION	No. 1, Zhonggang Rd., Xiaogang Dist., Kaohsiung City No. 25, Jingjian Rd., Pingtung City, Pingtung County 90093 19F.,No. 88,Chenggong2nd Rd., Qianzhen Dist.,KaohsiungCity	Manufacturing and processing of various carbon steels and low-alloy steels Manufacturing and sales of motor Computer system integration service	Incumbent
Independent director	SU , CHING YANG	Independent Director/Audit Committee/Remuneration Committee of Aerowin Technology Corporation Independent Director/Audit Committee/Remuneration Committee of KENDA RUBBER INDUSTRIAL CO., LTD. Director of NATUREWISE BIOTECH & MEDICALS CORPORATION	No. 1, Ln. 13, Xingong Rd., Xinying Dist., Tainan City No. 146, Sec. 1, Zhongshan Rd., Yuanlin City, Changhua County 6F., No. 36, Sec. 3, Bade Rd., Songshan Dist., Taipei City	Manufacturing of aero engine components Manufacturing of bicycle and components R&D and sales of new Chinese herbal medicines and health foods Various technical services clinical trials	Incumbent
Independent director	LEE, JEN FANG	Independent Director/Audit Committee/Remuneration Committee of BenQMedical Tech Co.,Ltd.	7F., No. 46, Zhouzi St., Neihu Dist., Taipei City	Development, manufacturing, and sales of medical equipment and instruments	Incumbent

IX. Appendices

Appendix 1 RECHI PRECISION CO., LTD. Company Corporate Charter (Articles of Incorporation)

Chapter 1 General Principles

Article 1 The Company is organized as a stock limited company in accordance with the Company Act and is named RECHI PRECISION CO., LTD.
Article 2 The Company operates below businesses:
CB01990 Other Machinery Manufacturing
CC01010 Manufacture of Power Generation, Transmission and Distribution Machinery
CC01030 Electrical Appliances and Audiovisual Electronic Products Manufacturing
F601020 Electronic appliance installation
E603050 Automatic Control Equipment Engineering
E801070 Kitchenware and Sanitary Fixtures Installation Engineering
F113020 Wholesale of Electrical Appliances
IG03010 Energy Technical Services
ZZ99999 Non-prohibited or non-restricted businesses, in addition to the permitted business
Article 2-1 The total amount of investment by the Company is not subject to the limit under Article 13 of the Company Act.
Article 3 The Company may provide business guarantees as required for business. Article 4 The Company’s headquarters is in Taoyuan City and it may set up branch organizations in other suitable locations as required, the incorporation and closure of which shall be determined by the board of directors.
Article 5 The Company makes public announcements in accordance with Article 28 of the Company Act.

Chapter 2 Shares

Article 6 The Company’s total capital is NT$6,000,000,000, divided into 600,000,000 shares at NT$10 per share, which are all ordinary shares. The board of directors is authorized to issue unissued shares as required for the Company’s business through multiple issuances.
Article 6-1 The price at which the Company issues employee stock options is not subject to the limits imposed by applicable laws. However, the issuance must be approved by shareholders representing 2/3 of the voting rights represented in a shareholders’ meeting that is attended by shareholders representing the majority of outstanding shares. Multiple filings may be made within one year from the date of the shareholders’ resolution.
Article 6-2 The Company may transfer treasury shares that it has repurchased to employees at a price that is lower than the average actual share repurchase price, subject to applicable laws and consent of the shareholders’ meeting.
Article 7 The Company’s shares may be issued without share certificates, subject to registration with the centralized securities custodian institution.
Article 8 The Company shall process stock matters in accordance with applicable laws and the regulations of the government authority. Shareholder service matters may be handled by shareholder service institutions designated by the Company.
Article 9 Share transfer registration is suspended during a period of 60 days before general meeting of shareholders, 30 days before special meeting of shareholders and 5 days before the record date determined by the Company for distribution of dividend, bonus or other interest.

Chapter 3 Meeting of shareholders

Article 10 The Company’s meetings of shareholders are divided into general meetings and special meetings. General meetings of shareholders are held once every year and shall be convened by the board of directors within 6 months from the end of each accounting year. Special meetings of shareholders are convened in accordance with the law as required.
Article 10-1 Shareholders should be informed of the meeting date, place and subject 30 days in advance for the Annual Meeting of Shareholders and 15 days in advance for the extraordinary meeting of shareholders. A shareholder holding 1 percent or more of the total number of issued shares may submit to the Company a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. The Board of Directors may disregard shareholder proposals if the proposed agendas exhibit any of the conditions described in Paragraph 4, Article 172-1 of the Company Act. Prior to the book closure date before a regular shareholders meeting is held, the Company shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days. Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the regular shareholders meeting and take part in discussion of the proposal. Prior to the date for issuance of notice of a shareholders meeting, the Company shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. At the shareholders meeting the board of directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.
Article 11 Each shareholder of the Company has one vote per share, but there are no voting rights, in event of the occurrence of such events stated in Article 179 of the Company Act.
Article 12 If a meeting of shareholders is convened by the board of directors, it shall be chaired by the chairman. If the chairman is on leave or cannot exercise his/her duties due to any reason, the vice chairman shall act on the chairman’s behalf. If the vice chairman is also unavailable due to any reason, one director designated by the chairman shall act on the chairman’s behalf.

If the shareholders meeting is convened by any person entitled to convene the meeting other than the board of directors, such person shall chair the meeting.

Article 13 Except otherwise regulated by The Company Act, a shareholders meeting resolution is passed when more than half of all outstanding shares are represented in the meeting, and is approved by more than half of all voting rights represented during the meeting. According to the authority's instructions, shareholders of the Company may vote using electronic means. Shareholders who vote using the electronic method are considered to have attended the shareholder meeting in person. Electronic voting shall proceed as regulated by law.
Article 13-1 Resolutions of shareholder’s meetings shall be recorded in minutes, specifying the year, month, date and location of the meetings, the main proceedings and results of the meetings, the chair’s name, the method of resolution, number of shareholders present and number of shares represented. The minutes shall be affixed with the chair’s signature or seal and distributed to all shareholders within 20 days from the meeting. The minutes may be distributed by public announcements. The minutes shall be kept in custody on permanent basis during the existence of the Company. The attendance registry for the signature of the attending shareholders or the proxy of the representative should be reserved for at least one year.

Chapter 4 Directors and the Board of Directors

Article 14 The Company has 9 directors to form the board of directors, to be elected by the shareholders’ meeting from among persons of legal capacities. The term is 3 years and the same person may be reelected upon expiry of the term. The Company may purchase liability for directors and officers to protect the interest of all shareholders and to lower the operation risk of the Company.

Article 14-1 No more than half of the directors of the Company shall have any of the following relationships among them. 1. Spouse.
A familial relationship within the second degree of kinship.
Article 14-2 Among the number of directors under the previous article, the Company has 3 independent directors in accordance with Article 14-4 of the Securities and Exchange Act. Matters related to the exercise of duties by independent directors are in accordance with applicable provisions of the Securities and Exchange Act.
Article 14-3 The Company’s directors and independent directors are elected under candidate nomination system. Shareholders holding 1% or more of all outstanding shares and the board of directors may propose a list of candidates for directors and independent directors. Following review of the conditions required of directors and independent directors by the board of directors, the list shall be submitted to the shareholders’ meeting. The shareholders shall elect the directors and independent directors from the candidate list.

Matters related to the director and independent director nomination acceptance manner and public announcements shall be in accordance with applicable provisions of the Company Act and the Securities and Exchange Act. Article 15 All total number of shares held by all directors of the Company shall be in accordance with Article 2 of the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.” Article 16 The directors form the board of directors. One chairman and once vice chairman shall be elected by 2/3 directors attending a meeting that is attended by the majority of directors. The chairman serves as the Company’s representative. If the chairman cannot perform his/her duties due to any reason, the vice chairman shall act on the chairman’s behalf. If the vice chairman also cannot perform his/her duties due to any reason, one director appointed by the chairman shall act on the chairman’s behalf. Article 17 The board of directors has the following duties:

Drafting of the articles of association of the Company.
Approval and amendment of organizational charters of the Company.
Approval of annual budget and review of annual closing, including the review of annual business plan and supervision of its execution.
The Company’s application for financing, guarantee, acceptance of notes within a certain amount or price (determined by the board of directors under authorization) from financial institution or any third party, as well as other lending, indebtedness or non-business advance of funds.
Hiring and dismissal of important employees.
Approval for endorsement, guarantee or acceptance of notes in the name of the Company.
Establishment and closing of branch organizations.
Approval for the Company’s investment in other companies.
Proposal of lien, sale, lease, pledge, mortgage or other disposition of all or important part of Company properties.
Approval of application to list the Company’s shares.
Approval for plant establishment or expansion investment plans and the amendments or terminations thereof.
Approval for signature for acquisition, transfer, license of know-how or patent or technical cooperation contract and the amendments or terminations thereof.
Distribution of profit.
Proposal to increase or decrease the capital of the Company.

Approval for major operational or organizational matters.
Article 18 Board meetings are convened and chaired by the chairman. If the chairman is absent, the vice chairman shall act on the chairman’s behalf. If the vice chairman is also unavailable, one director designated by the chairman shall act on the chairman’s behalf. Board meetings are held once every 3 months. The chairman may convene special meetings as required. Board meetings of the Company may be convened electronically if agreed by the counterparties. During the intersessional period of the board of directors, other than matters that should be discussed by the board of directors in accordance with the law, the board of directors may authorize the chairman to exercise the duties of the board of directors in accordance with the law.
Article 19 Unless otherwise provided by law, board resolutions shall be approved by the majority of directors attending a meeting that is attended by the majority of directors.
Article 20 Any director who cannot attend a board meeting may designate another director to attend the meeting on his/her behalf. However, a director shall represent no more than one other director in attending a board meeting.

Chapter 5 Audit Committee

Article 21 The Company has an audit committee in accordance with the law, which is formed by all independent directors.
Article 22 The duties to be exercised by the supervisors in accordance with the Company Act, the Securities and Exchange Act and other laws shall be exercised by the audit committee.
Article 23 The number of members of the audit committee, their term, the rules for their performance of duties and the resources that should be provided by the Company when they exercise their duties shall be further provided in the organizational charter of the audit committee in accordance with the law. .

Chapter 6 Managers

Article 24 If deemed necessary for the operation and organization of the group by the board of directors, the Company may have CEO, COO, president, vice president or other officers in accordance with the Company’s operational or management needs.
Each of the above officers may include one or multiple persons. Each officer shall follow the policies and operating guidelines resolved by the board of directors and the orders of the chairman and execute to manage all business within the scope of their allocated responsibilities.
Article 25 The CEO, COO and president report to the chairman, the hiring, dismissal and remuneration of which shall be in accordance with Article 29 of the Company Act.

Chapter 7 Accounting

Article 26 The Company’s accounting year is from 1 January to 31 December.
Article 27 The board of directors shall prepare below statements after the annual closing of the Company, which shall be submitted to the shareholders’ meeting for approval.
Business report
Financial statements
Profit distribution of loss compensation proposal.

Article 27-1

If the Company has profit in a year, no more than 3% shall be provisioned as director remuneration and no less than 1 % and no more than 8% as employee remuneration. The proposed distribution of director remuneration and employee remuneration shall be submitted to the shareholders’ meeting.

However, if the Company has accumulated losses, the amount to compensate the losses shall first be provisioned. Then director remuneration and employee remuneration shall be provisioned in accordance with the ratios under the previous paragraph.

Employee remuneration may be distributed in cash or stock and the targets of distribution may include employees of subsidiaries who meet certain conditions. Such conditions shall be determined by the board of directors or the person authorized by the

board of directors.

Article 27-2

When the Company issues employee treasury shares, employee stock options, employee remuneration, new share subscription by employees and new shares with restrictive employee rights, the targets may include employees of controlled companies or subsidiaries who meet certain conditions. If there are rules about the scope of target employees under the previous paragraph by the securities authorities, such rules shall be complied with.

Article 28 The Company’s dividend policy is established to satisfy the needs for the Company’s sustainable operation and business growth, while in consideration of the maintenance of its profitability.
Condition and timing of distribution: If there is profit at annual closing, after taxes are paid and accumulated losses are compensated, 10% shall be provisioned as legal reserve. Then special reserve shall be provisioned or recycled in accordance with the law or the rules of the competent authority. If there is profit remaining, 25% to 99% shall be provisioned as shareholder bonus.
Provision of special reserve: Other than provision made in accordance with the Company’s actual needs, the Paragraph 1, Article 41 of the Securities and Exchange Act shall be complied with to debit shareholders’ equity accounted for in the current year and provision for special reserve in the same amount as after-tax profit of the current year and non-distributed profit from previous period. If the amount of shareholders’ equity is recycled, profit may be distributed from the recycled portion.
Amount and type of distribution: The board of directors shall propose shareholder bonus distribution in accordance with the law every year and submit it to the shareholders’ meeting. Shareholder bonus is issued in the form of cash dividend and stock dividend, among which cash dividend shall represent no less than 10% of the issuance and the rest may be stock dividend.
Article 29 The board of directors is authorized to determine and pay to directors remuneration for the performance of duties for the Company based on the common standard of the industry, regardless of whether the Company is profit-making or loss-making.

Chapter 8 Additional notes

Article 30 The organizational charters and bylaws of the Company shall be further established. Article 31 Any matter that is not stipulated in these articles of association shall be governed by the Company Act.
Article 32 The Articles of Association was established on December 8, 1989.

The 1st amendment was made on December 10, 1990. The 2nd amendment was made on February 23, 1991. The 3rd amendment was made on July 1, 1991. The 4th amendment was made on July 24, 1991. The 5th amendment was made on September 20, 1991. The 6th amendment was made on September 30, 1991. The 7th amendment was made on May 22, 1992. The 8th amendment was made on April 16, 1993. The 9th amendment was made on April 20, 1994. The 10th amendment was made on November 24, 1994. The 11th amendment was made on May 18, 1995. The 12th amendment was made on May 10, 1996. The 13th amendment was made on May 8, 1997. The 14th amendment was made on April 20, 1998. The 15th amendment was made on November 15, 1999. The 16th amendment was made on June 7, 2000. The 17th amendment was made on June 27, 2002.

The 18th amendment was made on June 10, 2003. The 19th amendment was made on June 15, 2004. The 20th amendment was made on June 7, 2005. The 21st amendment was made on June 22, 2006. The 22nd amendment was made on June 13, 2007. The 23rd amendment was made on June 13, 2008. The 24th amendment was made on June 19, 2009. The 25th amendment was made on June 18, 2010. The 26th amendment was made on June 15, 2012. The 27th amendment was made on June 15, 2013. The 28th amendment was made on June 11, 2014. The 29th amendment was made on June 18, 2015. The 30th amendment was made on June 7, 2016. The 31st amendment was made on June 22, 2017. The 32nd amendment was made on June 16, 2020.

Appendix 2

RECHI PRECISION CO., LTD. Rules of Procedure for Shareholder Meeting (before amendment)

Article 1 The rules of procedures for the Company's shareholders meetings, except as otherwise provided by law, regulation, or the articles of incorporation, shall be as provided in these Rules.
Article 2 The Company shall accept shareholder attendance registration at least 30 minutes before the meeting. The location for attendance registration shall be clearly identified and staffed by sufficient and suitable staff. The shareholders or their representatives (hereinafter referred to as the "shareholders") shall attend the shareholders’ meeting with the evidence of the attendance card, attendance register, or other attendance documents; the proxy solicitors should bring proof of identity with them for examination.
The Company shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in. The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors, pre-printed ballots shall also be furnished. When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting. The number of shares represented in the meeting shall be calculated based on the attendance register or the number of attendance cards collected.
Article 3 Attendance and votes in shareholder meetings shall be calculated based on shares. The number of shares in attendance shall be calculated according to the shares indicated by the sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.
Article 4 The place of meeting of shareholders should be at the Company’s or any suitable location or for shareholders to attend the meeting conveniently; also, the meeting of shareholders shall not be started before 9:00 or after 15:00.
Article 5 If the shareholders’ meeting is convened by the board of directors, the meeting shall be chaired by the chairman. If the chairman is on leave or cannot exercise his/her duties due to any reason, the vice chairman shall act on the chairman’s behalf. If the vice chairman is also unavailable due to any reason, one director designated by the chairman shall act on the chairman’s behalf. When a director serves as chair, the director shall be one who has held that position for six months or more and who understands the financial and business conditions of the company. The same shall be true for a representative of a juristic person director that serves as chair. If the shareholders meeting is convened by any person entitled to convene the meeting other than the board of directors, such person shall chair the meeting.
Article 5-1 30 days before a shareholders’ meeting or 15 days before a special shareholders’ meeting, the shareholders’ meeting notice, proxy form, relevant proposals for recognition, discussion, election or dismissal of directors, etc., and explanation information shall be prepared as electronic files and sent to the Market Observation Post System. The Company shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. The Annual Meeting Handbooks and the

		supplementary information are made available to shareholders fifteen days prior to the
		annual meeting of shareholders; also, on display at the Company’s and its Stock Agent’s
		and distributed to shareholders at the meeting place.
Article	5-2	The reasons for convening the meeting should be stated in the notice and announcement.
		The notice with the consent of the counterparty can be issued electronically.
Article	5-3	Matters pertaining to election or discharge of directors and supervisors, alteration of the
		Articles of Incorporation, reduction of capital, application for the approval of ceasing its
		status as a public company, approval of competing with the company by directors,
		surplus profit distributed in the form of new shares, reserve distributed in the form of
		new shares, dissolution, merger, spin-off, or any matters as set forth in Paragraph 1,
		Article 185 hereof shall be itemized in the causes or subjects to be described and the
		essential contents shall be explained in the notice to convene a meeting of shareholders,
		and shall not be brought up as extemporary motions; the essential contents may be
		posted on the website designated by the competent authority in charge of securities
		affairs or the company, and such website shall be indicated in the above notice.
Article	5-4	The reasons for the convening of the shareholders' meeting have indicated the full
		re-election of directors and supervisors, and the date of appointment. After the
		re-election of the shareholders' meeting is completed, the date of appointment shall not
		be changed by temporary motion or other means at the same meeting.
Article	5-5	Shareholder(s) holding one percent (1%) or more of the total number of outstanding
		shares of a company may propose to the company a proposal for discussion at a regular
		shareholders’ meeting, provided that only one matter shall be allowed in each single
		proposal, and in case a proposal contains more than one matter, such proposal shall not
		be included in the agenda. A shareholder proposal proposed for urging a company to
		promote public interests or fulfill its social responsibilities may still be included in the
		list of proposals to be discussed at a regular meeting of shareholders by the board of
		directors. In addition, when the circumstances of any subparagraph of Article 172-1,
		paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the
		board of directors may exclude it from the agenda.
Article	5-6	Prior to the book closure date before a regular shareholders meeting is held, the
		Company shall publicly announce that it will receive shareholder proposals,
		correspondence or electronic means, and the location and time period for their
		submission; the period for submission of shareholder proposals may not be less than 10
		days.
Article	5-7	Shareholder-submitted proposals are limited to 300 words, and no proposal containing
		more than 300 words will be included in the meeting agenda. The shareholder making
		the proposal shall be present in person or by proxy at the regular shareholders meeting
		and take part in discussion of the proposal.
Article	5-8	Prior to the date for issuance of notice of a shareholders meeting, the Company shall
		inform the shareholders who submitted proposals of the proposal screening results, and
		shall list in the meeting notice the proposals that conform to the provisions of this article.
		At the shareholders meeting the board of directors shall explain the reasons for exclusion
		of any shareholder proposals not included in the agenda.
Article	6	The Company may assign its attorney, accountant or relevant staff to attend the
		shareholders meeting. The shareholders’ meeting staffs shall wear identification card or
		armbands.
Article	7	The resolutions reached in the shareholders’ meeting must be documented in the minutes
		of meeting for the signature or seal of the Chairman. The minutes of meeting must be
		distributed to the shareholders in 20 days. The meeting minutes may be produced and
		distributed in electronic form. The Company may distribute the meeting minutes of the
		preceding paragraph by means of a public announcement made through the MOPS.
		The meeting minutes shall accurately record the year, month, day, and place of the
		meeting, the chair’s full name, the methods by which resolutions were adopted, and a
		summary of the deliberations and their voting results (including the number of voting
		rights), and disclose the number of voting rights won by each candidate in the event of

an election of director. It should be permanently reserved throughout the duration of the Company.

The company, starting from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures. The audio and video recording shall be kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.
Article 8 The chairperson should announce the commencement of meeting as soon as it is due. However, if current attendants represent less than half of the Company's outstanding shares, the chairperson may announce to postpone the meeting up to two times, for a period totaling no more than one hour. If attending shareholders represent more than one-third but less than half of outstanding shares after two postponements, the attending shareholders may reach a tentative resolution according to Paragraph 1, Article 175 of the Company Act. If the number of shares represented accumulates to more than half of all outstanding shares as the meeting progresses, the chairperson may propose the tentative resolutions for final voting according to Article 174 of The Company Act.
Article 9 If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. Votes shall be casted on each separate proposal in the agenda (including extraordinary motions and amendments to the original proposals). The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting.
If the meeting of shareholders is convened by an authorized person other than the Board, the provision referred to above is applicable. Before the agenda scheduled under the previous two paragraphs (including motions) is completed, the chairman shall not declare the meeting closed without resolution.

Once the meeting has been dismissed, shareholders cannot extend the meeting, either in the current or in another location, by appointing another chairman.

The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote and arrange sufficient time for voting.
Article 10 The chairperson may call the meeting into recess at a suitable time. Article 11 Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair. A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail. When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.
Article 12 Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. When a shareholder speaks in breach of the above rules or beyond the scope of the agenda, the chairman may stop the shareholder’s statement.
Article 13 When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting. When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak on the same proposal.
Article 14 After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

Article 15 A Chairman who believes that the proposal under discussion is ready for voting may at his discretion stop the discussion and call for a vote.
Article 16 Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company. Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote. The election of directors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected.
Article 17 For the resolution of proposals, unless otherwise provided in the Company Act and the Company Corporate Charter (Articles of Incorporation), the consent of a majority vote of the attending shareholders shall prevail. The shareholders are entitled to one vote per share, provided that the Company has no voting right for its own shares that it holds. When a shareholder attends a shareholders’ meeting by proxy, unless it is a trust enterprise, if a person acts as the proxy for 2 or more shareholders, the voting rights represented shall not exceed 3% of the voting rights represented by all outstanding shares. Any voting right in excess of such limit shall be excluded from calculation. Shareholders cannot vote, or appoint proxies to vote, on any agendas that present conflicting interests, if doing so may compromise The Company's interests.
Article 17-1 When this Corporation holds a shareholders meeting, it may allow the shareholders to exercise voting rights by correspondence or electronic means. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that the Company avoid the submission of extraordinary motions and amendments to original proposals.
Article 18 When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. If any solution is passed, all other proposals shall be deemed rejected and no further voting is necessary.
Article 19 The meeting chairman may instruct picketers (or security staffs) to help maintain order in the meeting. While maintaining order in the meeting, all scrutineers or security staff shall wear arm badges that identify their role as "Scrutineer."
Article 20 In case of air strike alarm during a meeting, the meeting shall be suspended immediately and the participates shall be evacuated. The meeting shall resume one hour after the alarm is lifted.
Article 21 Any matter that is not provided in these Rules shall be governed by the Company Act and the Articles of Association of the Company.
Article 22 These Rules, and any amendments hereto, shall be implemented after adoption by shareholders meetings.
(The amendments to these Rules have been approved by annual general meeting of shareholders on 16 June 2020)

Appendix 3

RECHI PRECISION CO., LTD. Director Shareholding Schedule

Date: April 19, 2021

		Date: April 19,2021
Title	Name	Shareholding
		Shares
Chairman	SAMPO CORPORATION Representative: CHEN,SHENG TIEN	135,610,160
Vice chairman	SAMPO CORPORATION Representative: YANG,CHENG MING
Director	SAMPO CORPORATION Representative: CHEN,CHIAO MING
Director	Chuan Bao Investment Co., Ltd. Representative: CHEN, SHENG CHUAN	4,135,762
Director	Sharp Corporation Representative: NAKASHIMA, MITSUO	22,771,289
Director	China Steel Corporation Representative: Cheng,Chi-Chao	23,002,022
Independent director	SU, CHING YANG	0
Independent director	LEE, JEN FANG	0
Independent director	CHEN, SHENG WANG	0
Subtotal of shares held by all directors		185,519,233
Minimum number of shares to be held by all directors		16,157,283

Note: As of the record date, the capital includes 504,915,105 shares.

Appendix 4

Influence on the company business performance, EPS, and shareholder ROI by the proposal of stock grant in this shareholders’ meeting: Not applicable

AI assistant

RECHI — AGM Information 2021

52399_rns_2021-09-10_8d3dc6c8-2981-473a-88e5-95f7dd26d0f7.pdf

RECHI PRECISION CO., LTD.

Meeting Handbook for 2021 Annual Meeting of Shareholders

Table of Contents

I. Meeting procedure

RECHI PRECISION CO., LTD. Procedure for the 2021 Annual Meeting of Shareholders

VII. Adjournment

II. Meeting Agendas

RECHI PRECISION CO., LTD. Agenda of 2021 Annual Meeting of Shareholders

III. Matters to be reported

III. Company Reports

(2) Subsidiaries’ guarantees and endorsements for subsidiaries (2020/12/31)

IV. Proposals

V. Matters for discussion

VI. Questions and Motions

VII. Adjournment

VIII. Attachment

Attachment I

RECHI PRECISION CO., LTD. 2020 Business report

B. Sales:

Attachment II

RECHI PRECISION CO., LTD.

Audit Committee’s Review Report

Approved

Attachment III

Auditor’s Report

Audit opinions

The basis for opinions

Key audit matter

Estimating impairments on accounts receivable

Other information

Responsibilities of Management and Those in Charge with Governance of the Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Auditor’s Responsibilities for the Audit of the Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

RECHI PRECISION CO., LTD. and its subsidiaries

Consolidated Balance Sheet

December 31, 2020 and 2019

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Income Statement

January 1 to December 31, 2020 and 2019

Unit: NTD thousands, except Earnings Per Share (NTD)

(Continued from previous page)

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Statements of Changes in Shareholders’ Equity January 1 to December 31, 2020 and 2019

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Statements of Cash Flow

January 1 to December 31, 2020 and 2019

(Continued from previous page)

(Continued from previous page)

Auditor’s Report

To: RECHI PRECISION CO., LTD.:

Audit opinions

The basis for opinions

Key audit matter

Estimating impairments on accounts receivable

Responsibilities of Management and Those in Charge with Governance of the Individual Financial Statements

Auditor’s Responsibilities for the Audit of the Individual Financial Statements

RECHI PRECISION CO., LTD.

Individual Balance Sheet

December 31, 2020 and 2019

RECHI PRECISION CO., LTD.

Individual Income Statement

(Continued from previous page)

(Continued from previous page)

RECHI PRECISION CO., LTD.

Individual Statements of Changes in Shareholders’ Equity

RECHI PRECISION CO., LTD. Individual Statements of Cash Flow

For the Years Ended December 31, 2020 and 2019

(Continued from previous page)

Attachment IV

RECHI PRECISION CO., LTD. The 2020 Statement of Retained Earnings

Attachment V Removal of the current directors and their representatives from the non-compete restriction list

IX. Appendices

Appendix 1

RECHI PRECISION CO., LTD. Company Corporate Charter (Articles of Incorporation)

Chapter 1 General Principles

Chapter 2 Shares

Chapter 3 Meeting of shareholders

Chapter 5 Audit Committee

Chapter 6 Managers

Chapter 7 Accounting

Chapter 8 Additional notes

RECHI AGM Information 2021