RECHI PRECISION CO., LTD.

Meeting Handbook for 2022 Annual Meeting of Shareholders

One. Meeting procedure ................................................................................................ 2
Two. Meeting Agendas .................................................................................................. 3
Three. Company Reports .............................................................................................. 4
Four. Proposals ............................................................................................................. 12
Five. Matters for discussion ........................................................................................ 13
Six. Questions and Motions ........................................................................................ 18
Seven. Meeting adjourned .......................................................................................... 18
Eight. Attachment ........................................................................................................ 19
Attachment I 2021 Business report............................................................. 19
Attachment II Audit Committee’s Review Report............................................ 22
Attachment III Guidelines for the Ninth Repurchase of Shares and Transfer to
Employees ............................................................................................... 23
Attachment IV Auditor’s Report...................................................................25
Attachment V The 2021 Statement of Retained Earnings................................... 48
Attachment VI Removal of the current directors and their representatives from the
non-compete restriction list..................................................... 49
IX. Appendices ............................................................................................................. 50
Appendix 1 Articles of Incorporation (before amendment)............................... 50
Appendix 2 Rules of Procedure for Shareholders’ Meeting.............................. 56
Appendix 3 Director Shareholding Schedule................................................ 60
Appendix 4 Influence on the company business performance, EPS, and
shareholder ROI by the proposal of stock grant in this shareholders’
meeting: Not applicable.......................................................... 60

One. Meeting procedure RECHI PRECISION CO., LTD. Procedure for the 2022 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

Two. Meeting Agendas

RECHI PRECISION CO., LTD. Agenda of 2022 Annual Meeting of Shareholders

Time: 9:00 a.m. on June 15 (Wednesday), 2022.

Method for Convening: Physical Meeting

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

I. Call the Meeting to Order

II. Chairman’s Remarks

III. Matters to be reported

The Company’s 2021 Business Report.
Audit Committee’s Review Report of 2021 Financial Statements.
The 2021 Report on the distribution of remuneration to employees and directors.
The 2021 report on guarantees and endorsements.
Formulation report on the Company’s “Guidelines for Repurchase and Transfer of Shares for Employees.”
Amendment report of the Company’s “Corporate Social Responsibility Best-Practice Principles.”
Report on the implementation of the repurchase of treasury stocks.

IV. Proposals

The company’s 2021 business report and financial statements.
The company’s earnings distribution proposal for the year of 2021.
V. Discussion
Partial amendments to the “Regulations Governing the Acquisition and Disposal of Assets.”
Partial amendments to the “Articles of Incorporation.”
Proposal for canceling the non-compete restriction for current directors and their representatives.

VI. Questions and Motions

VII. Adjournment

Three. Company Reports

Proposal: Presenting the Company’s 2021 Business Report. Explanation: Please refer to Page 19 to 21 of 2021 Business Report.
Proposal: Presenting the audit committee’s report on the Company’s 2021 closing statements.
Explanation: Please refer to Page 22 for audit committee’s report on the Company’s 2021 closing statements.
Proposal: Presenting the report on the Company’s 2021 employee remuneration and director remuneration.
Description: On March 16, 2022, the board of directors of the Company passed a resolution to approve the proposal for directors remuneration of 2021 as NT$11,276,777 and employees wage of 2021 as NT$35,333,901, which would all be distributed in cash.
Proposal: Presenting the report on the Company’s guarantees and endorsements in 2021. Explanation: The report on the Company’s guarantees and endorsements as of December 31, 2021 shows the following information:
(1) The Company’s guarantees and endorsements for subsidiaries (2021/12/31)

		Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
The party receiving the endorsement and/or guarantee	The party receiving the endorsement and/or guarantee of 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 current period	The ending balance of endorsements and/or guarantees
RECHI PRECISION CO.,LTD.	Rechi Holdings Co., Ltd.	NTD8,989,780	NTD2,256,298 (USD76,000)	NTD1,604,760 (USD57,000)
RECHI PRECISION CO., LTD.	Rechi Precision (Qingdao) Electric Machinery Limited	NTD8,989,780	NTD227,840 (USD8,000)	NTD0 (USD0)
RECHI PRECISION CO., LTD.	RECHI Precision (Jiujiang) Electric Machinery Limited	NTD8,989,780	NTD1,448,079 (USD40,000) (CNY70,000)	NTD1,419,369 (USD40,000) (CNY70,000)
Total			NTD3,932,217	NTD3,024,129

Note 1: Limit amount of guarantee/endorsement for individual target is NTD8,989,780 thousand (net value) × 100% = NTD8,989,780 thousand.

Limit amount of guarantee/endorsement is NTD8,989,780 thousand (net value) × 150% = NTD13,484,670 thousand.

Not 2: Net value is the number audited by CPA in the third quarter of 2021.

(2) Subsidiaries’ guarantees and endorsements for subsidiaries (2021/12/31)

Unit: NT$ thousand

				Unit: NT$thous
The party receiving the endorsement and/or guarantee	The party receiving the endorsement and/or is 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 current period	The ending balance of endorsements and/or guarantees
Rechi Precision (Qingdao) Electric Machinery Limited	Qingdao RECHI Electric Machinery Sales Company	NTD4,560,751 (CNY1,062,061)	NTD1,473,557 (CNY340,000)	NTD1,172,662 (CNY270,000)
Dyna RECHI Co., Ltd.	Dyna Rechi JiujiangCo.,Ltd.	NTD538,524	NTD90,060 (USD3,000)	NTD83,580 (USD3,000)
Dyna RECHI Co., Ltd.	ABLEK Technology Co., Ltd.	NTD538,524	NTD30,000	NTD30,000
Dongguan RECHI Compressor Co., Ltd.	RECHI Refrigeration Dongguan Co., Ltd.	NTD356,144 (CNY82,935)	NTD216,400 (CNY50,000)	NTD108,790 (CNY25,000)
Total			NTD1,810,017	NTD1,395,032

Note 1:

Rechi Precision (Qingdao) Electric Machinery Limited Note 1: Limit amount of guarantee/endorsement for individual target is CNY1,062,061 thousand (net value) × 100% = CNY1,062,061 thousand
Rechi Precision (Qingdao) Electric Machinery Limited Limit amount of guarantee/endorsement is CNY1,062,061 thousand (net value) × 150% = CNY1,593,092 thousand
Dyna RECHI Co., Ltd.:

Limit amount of guarantee/endorsement for individual target is NTD1,077,048 thousand (net value) × 50% = NTD538,524 thousand

Dyna RECHI Co., Ltd.:
Limit amount of guarantee/endorsement is NTD1,077,048 thousand (net value) × 50% = NTD538,524 thousand
Dongguan RECHI Compressor Co., Ltd.: Note 1: Limit amount of guarantee/endorsement for individual target is CNY82,935 thousand (net value) × 100% = CNYCNY82,935 thousand
Dongguan RECHI Compressor Co., Ltd.: Limit amount of guarantee/endorsement is CNY82,935 thousand (net value) × 150% = CNY124,403 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.

Not 2: Net value is the number audited by CPA in the third quarter of 2021.

(3) Total amount of guarantees/endorsements by the Company and subsidiaries is NTD4,419,161 thousand (2021/12/31) exceeds 200% of the net worth of the company's most recent financial statements, mainly due to the fact that subsidiaries of the

Company need guarantees/endorsements from the Company when they acquire (apply) 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: Formulation report of the Company’s “Guidelines for Repurchase and Transfer of Shares for Employees.”
Description: Please refer to page 23 for the Company’s “Guidelines for Repurchase and Transfer of Shares for Employees.”
Proposal: Amendment report of the Company’s “Corporate Social Responsibility Best-Practice Principles.”

Explanation: The mapping of the clauses of the “Corporate Social Responsibility

Best-Practice Principles” before and after the amendment:

Amendedprovisions	Existingclauses	Explanation
Sustainable Development Best-Practice Principles	Corporate Social Responsibility Best-Practice Principles	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.
Article 1 In order to implement corporate social responsibility, promote economic, environmental and social progress and achieve the goal of sustainable development, the Company hereby formulates the Sustainable Development Best-Practice Principles (hereinafter referred to as the Principles) with reference to the “Sustainable DevelopmentBest-Practice Principles for TWSE/TPEx Listed Companies” established by the competent authority.	Article 1 In order to implement corporate social responsibility, promote economic, environmental and social progress and achieve the goal of sustainable development, the Company hereby formulates the Corporate Social Responsibility Best-Practice Principles (hereinafter referred to as the Principles) with reference to the “Corporate Social ResponsibilityBest-Practice Principles for TWSE/TPEx Listed Companies” established by the competent authority.	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.
Article 2 The scope of these Principles covers the overall operating activities of the Company and its group companies. While engaging in business operations, the Company shall actively practicesustainable developmentto be in line with	Article 2 The scope of these Principles covers the overall operating activities of the Company and its group companies. While engaging in business operations, the Company shall actively practicecorporate social responsibility to be in line with	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No.

Amendedprovisions	Existingclauses	Explanation
international development trends, improve the quality of life of employees, communities and society, and promotesustainable development-oriented competitive advantages.	international development trends, improve the quality of life of employees, communities and society, and promotecorporate social responsibility-oriented competitive advantages.	11000241731 of TWSE.
advantages.	advantages.
Article 3 To promotesustainable development, the Company shall be aware of the rights and interests of other stakeholders. While pursuing sustainable operation and profitability, it shall also be aware of environmental, social and corporate governance factors, and incorporate them into company management and operational activities. (Omitted below)	Article 3 To promotecorporate social responsibility,the Company shall be aware of the rights and interests of other stakeholders. While pursuing sustainable operation and profitability, it shall also be aware of environmental, social and corporate governance factors, and incorporate them into company management and operational activities. (Omitted below)	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.
Article 4 To implementsustainable developmentinitiatives, the Company is advised to follow the principles below: 1. Exercise corporate governance. 2. Foster a sustainable environment. 3. Preserve public welfare. 4. Enhance disclosure of corporate sustainable development information.	Article 4 To implement responsibility	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.
Article 5 The Company shall take into consideration the correlation between the development of domestic and internationalsustainable development and corporate core business operations, and the effect of the operation of individual companies and of their respective business groups as a whole on stakeholders, in establishing their policies, systems or relevant management guidelines, and concrete promotion plans for sustainable developmentprograms, which shall be approved by the board of directors and then reported to the shareholders’ meeting. When a shareholder proposes a motion involvingsustainable development,the company’s board of directors is advised to review and consider including it in the shareholders’ meeting agenda.	Article 5 The Company shall take into consideration the correlation between the development of domestic and internationalcorporate social responsibilityprinciples and corporate core business operations, and the effect of the operation of individual companies and of their respective business groups as a whole on stakeholders, in establishing their policies, systems or relevant management guidelines, and concrete promotion plans forcorporate social responsibilityprograms, which shall be approved by the board of directors and then reported to the shareholders’ meeting. When a shareholder proposes a motion involvingcorporate social responsibility,the company’s board of directors is advised to review and consider including it in the shareholders’ meetingagenda.	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.

Amendedprovisions	Existingclauses	Explanation
Article 7 The Company shall exercise the due care of good administrators to urge the company to perform its sustainable developmentinitiatives, examine the results of the implementation thereof from time to time and continually make adjustments so as to ensure the thorough implementation of its sustainable developmentpolicies. The board of directors of the company is advised to give full consideration to the interests of stakeholders, including the following matters, in the company’spromote of its sustainable development initiatives: 1. Identifying the company’s sustainable developmentmission or vision, and declaring its sustainable developmentpolicy, systems or relevant management guidelines; 2. Makingsustainable development the guiding principle of the company’s operations and development, and ratifying concrete promotional plans for sustainable development initiatives; and 3. Enhancing the timeliness and accuracy of the disclosure of sustainable development information. (Omitted below)	Article 7 The Company shall exercise the due care of good administrators to urge the company to perform itscorporate social responsibilityinitiatives, examine the results of the implementation thereof from time to time and continually make adjustments so as to ensure the thorough implementation of its corporate social responsibility policies. The board of directors of the company is advised to give full consideration to the interests of stakeholders, including the following matters, in the company’s performance of its corporate social responsibilityinitiatives: 1. Identifying the company’s corporate social responsibility mission or vision, and declaring its corporate social responsibility policy, systems or relevant management guidelines; 2. Makingcorporate social responsibilitythe guiding principle of the company’s operations and development, and ratifying concrete promotional plans for corporate social responsibility initiatives; and 3. Enhancing the timeliness and accuracy of the disclosure of corporate social responsibility information. (Omitted below)	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 1090002299 of TWSE issued on Feb. 13, 2020.
Article 8 The Company respects the rights and interests of stakeholders, and sets up a dedicated section for stakeholders on the Company’s official site; it adopts appropriate communication methods to understand the reasonable expectations and needs of stakeholders, and appropriately responds to important sustainable development issues they are concerned about.	Article 8 The Company respects the rights and interests of stakeholders, and sets up a dedicated section for stakeholders on the Company’s official site; it adopts appropriate communication methods to understand the reasonable expectations and needs of stakeholders, and appropriately responds to important issues they are concerned about.	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 1090002299 of TWSE issued on Feb. 13, 2020.
Article 10 The Company is committed to improvingenergy useefficiencyand usingrecycled materials with low	Article 10 The Company is committed to improving the utilization efficiency ofvarious resources, anduses	As per the amended “Corporate Social Responsibility Best-Practice Principles

Amendedprovisions	Existingclauses	Explanation
impact on the environment, so that the Earth’s resources can be utilized sustainably.	recycled materials with low impact on the environment, so that the Earth’s resources can be utilized sustainably.	for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.
Article 15 The company will assess the potential risks and opportunities of climate change to the enterprise now and in the future, and adopt relevant countermeasures. The Company is advised to adopt standards or guidelines generally used in Taiwan and abroad to enforce corporate greenhouse gas inventory and to make disclosures thereof, the scope of which shall include the following: 1. Direct greenhouse gas emissions: emissions from operations that are owned or controlled by the company. 2. Indirect greenhouse gas emissions: emissions resulting from the generation ofinputelectricity, heating, or steam. 3. Other indirect emissions: The emissions from the Company’s activities are not indirect emissions from energy sources, but come from sources owned or controlled by other companies. (Omitted below)	Article 15 The Company will assess the potential risks and opportunities of climate change to the company now and in the future, and take measures to respond toclimate-relatedissues. The Company is advised to adopt standards or guidelines generally used in Taiwan and abroad to enforce corporate greenhouse gas inventory and to make disclosures thereof, the scope of which shall include the following: 1. Direct greenhouse gas emissions: emissions from operations that are owned or controlled by the company. 2. Indirect greenhouse gas emissions: emissions resulting from the generation of externally purchased or acquired electricity, heating, or steam. (Omitted hereinafter)	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.
Chapter 5 Enhance disclosure of corporatesustainable development information	Chapter 5 Enhance disclosure of corporate social responsibility information	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.
Article 22 The Company shall disclose information according to relevant laws, regulations and the Corporate Governance Best-Practice Principles for the Company and shall fully disclose relevant and reliable information relating to their sustainable developmentinitiatives to improve information transparency. Relevant information relatingto	Article 22 The Company shall disclose information according to relevant laws, regulations and the Corporate Governance Best-Practice Principles for the Company and shall fully disclose relevant and reliable information relating to theircorporate social responsibilityinitiatives to improve information transparency. Relevant information relatingto	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.

Amendedprovisions	Amendedprovisions	Existingclauses	Explanation
sustainable developmentwhich the Company shall disclose includes: 1. The policy, systems or concrete promotion plans forsustainable developmentinitiatives, as resolved by the board of directors. 2. The risks and the impact on the corporate operations and financial condition arising from exercising corporate governance, fostering a sustainable environment and preserving social public welfare. 3. Goals and measures for realizing thesustainable development initiatives established by the companies, andpromotionin implementation. 4. Major stakeholders and their concerns. 5. Disclosure of information on major suppliers’ management and performance with respect to major environmental and social issues. 6. Other information relating to sustainable development initiatives.		corporate social responsibilitywhich the Company shall disclose includes: 1. The policy, systems or concrete promotion plans for corporate social responsibility initiatives, as resolved by the board of directors. 2. The risks and the impact on the corporate operations and financial condition arising from exercising corporate governance, fostering a sustainable environment and preserving social public welfare. 3. Goals and measures for realizing thecorporate social responsibility initiatives established by the companies, andperformancein implementation. 4. Major stakeholders and their concerns. 5. Disclosure of information on major suppliers’ management and performance with respect to major environmental and social issues. 6. Other information relating to corporate social responsibility initiatives.
	initiatives.
Article 23 The Company adopts recognized standards		Article 23 The Company adoptsinternationally recognized GRI guidelines for sustainability reportto disclose the promotion of corporate social responsibility in the preparation of the sustainability report whose contents include: 1. The policy, system, or concrete promotion plans for implementing corporate social responsibility initiatives. 2. Major stakeholders and their concerns. 3. Results and a review of the exercising of corporate governance, fostering of a sustainable environment, preservation of public welfare and promotion of economic development. 4. Future improvements andgoals.	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.
Article 24 The Company will always pay attention to the development of relevant standards forsustainable developmentboth domestic and		Article 24 The Company will always pay attention to the development of relevant standards forcorporate social responsibilityboth domestic	As per the amended “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed

Amendedprovisions	Existingclauses	Explanation
abroad and the changes in the corporate environment, so as to review and improve the established sustainable developmentsystem to enhance the effectiveness of promotingsustainable development.	and abroad and the changes in the corporate environment, so as to review and improve the established corporate social responsibilitysystem to enhance the effectiveness of promotingcorporate social responsibility.	Companies” specified in the official letter of Tai-Zheng-Zhi-Li-Zi No. 11000241731 of TWSE.

VI. Proposal: Report on the implementation of the treasury stock repurchase.

Description: The information in the report on the implementation of the eighth treasury stock repurchase of the Company is as follows:

repurchase of	the Company is as follows:	the Company is as follows:
	April 30,2022
No. of repurchase	8threpurchase	9threpurchase
Purpose	Transfer to employees	Transfer to employees
Period of repurchase	2020/04/14 – 2020/06/13	2021/11/04 – 2021/12/02
Price range of the shares to be repurchased	NT$ 11.35 – NT$ 25.50	NT$ 13.20 – NT$ 28.20
Type and no. of shares repurchased	Common shares/20 thousand shares	Common shares/5,000 thousand shares
Monetary amount of shares repurchased	NT$ 306,436	NT$ 95,169,587
No. of shares retired or transferred	0	100 thousand shares
Accumulated no. of shares held	4,920 thousand shares
Accumulated no. of shares held as a percentage to the total issued share (%)	0.97%

Four. Proposals

I. Proposal: The company’s 2021 business report and financial statements are submitted for recognition. (Proposed by the Board)
Explanation: The Company’s 2021 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 Chang, Ching-Hsia and Tsai, Chen-Tsai from Deloitte and Touche performed audit and issued CPA’s audit report, which is submitted for recognition. (Please refer to Pages 25–36 and Pages 37–47)

Resolutions:

II. Proposal: The Company’s earnings distribution proposal for the year of 2021 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 2021, which has been approved by resolution of the board of directors’ meeting and audited by the audit committee . (Please refer to Page 48)
After approval by the annual meeting of shareholders, the board of directors is authorized to establish the record date and other relevant matters.

Resolutions:

Five. Matters for discussion

I. Proposal: Partial amendments to the “Regulations Governing the Acquisition and Disposal of Assets” for discussion. (Proposed by the Board) Explanation:
The comparison table of the amended provisions of the Company’s “Regulations Governing the Acquisition and Disposal of Assets” is as follows:

Amendedprovisions	Existingclauses	Explanation
5.5.5 Where the discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount or such discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount,a certified public accountant shall be engaged to render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction	5.5.5 Where the discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount or such discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount,a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Article 13 Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price (the discrepancy between the appraisal result and the transaction amount is based on the actual transaction amount).	Amended in accordance with the Guidelines for the Disposal of Assets Acquired or Disposed of by Publicly Issued Companies.
price (the discrepancy between the appraisal result and the transaction amount is based on the actual transaction amount).
6.3 Appraisal: Where the Company or its subsidiary that is not a domestic public company engages in any acquisition or disposal of securities investment, the most recent financial statement of the target company that has been audited or reviewed by a CPA shall be obtained prior to the date of occurrence of the event shall serve as a reference for appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the Company’s paid-in capital or NT$300 million or more, the Company shall additionally	6.3 Appraisal: Where the Company or its subsidiary that is not a domestic public company engages in any acquisition or disposal of securities investment, the most recent financial statement of the target company that has been audited or reviewed by a CPA shall be obtained prior to the date of occurrence of the event shall serve as a reference for appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the Company’s paid-in capital or NT$300 million or more, the Company shall engage a	Amended in accordance with the Guidelines for the Disposal of Assets Acquired or Disposed of by Publicly Issued Companies.

Amendedprovisions	Existingclauses	Explanation
engage a CPA prior to the date of occurrence of the event to provide an	certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price. The CPA shall comply with the provisions of the Statement of Auditing Standards No. 20 published by the ARDF. However, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the FSC.
opinion regarding the reasonableness
of the transaction price.
7.1 Where the Company acquires or disposes of real property or its right-of-use assets from any related party, or acquires or disposes of real property or other assets other than its right-of-use assets from a related party, whose transaction price reaches 20% of its paid-in capital and total assets 10% or more than NT$300 million, except for the transaction of domestic public bonds, bonds with repurchase agreement, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the following materials shall be submitted for approval by the Audit Committee and the board of directors for signing the transaction contract and payment;where the Company or its subsidiary that is not a domestic public company engages in any transaction specified in the preceding Paragraph, and the transaction amount is more than 10% of the total assets of the Company, it shall submit the following materials to the shareholders’meeting for approval to proceed to reach the agreement and make the payment. However, this does not apply to the transaction between the public company and its parent company or subsidiaries, or the transaction between its subsidiaries.	7.1 Where the Company acquires or disposes of real estate or its right-of-use assets from any related party, or acquires or disposes of real estate or other assets other than its right-of-use assets from a related party, whose transaction price reaches 20% of its paid-in capital and total assets 10% or more than NT$300 million, except for the transaction of domestic public bonds, bonds with repurchase agreement, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the following materials shall be submitted for approval by the Audit Committee and the board of directors for signing the transaction contract and payment.	Amended in accordance with the Guidelines for the Disposal of Assets Acquired or Disposed of by Publicly Issued Companies.
8.3.3Where the Company acquires or disposes of intangible assets or right-of-use assets thereof or	8.3.3Where the Company acquires or disposes of intangible assets or right-of-use assets thereof or	Amended in accordance with the Guidelines for the Disposal of Assets Acquired

Amendedprovisions	Amendedprovisions	Existingclauses	Explanation
memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million		memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a domestic government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an	or Disposed of by Publicly Issued Companies.
or more, except in transactions with a domestic government agency, the company shall engage a certified public accountant prior to the date of
occurrence of the event to render an opinion on the reasonableness of the
transaction price.		opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.
12.1 7. Where an asset transaction other than any of those referred to in the preceding six subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; this shall not apply to the following circumstances: (1)Trading of domestic government bonds or foreign government bonds with a credit rating not below the sovereignty rating of our government. (2) Where done by professional investors-securities trading on securities exchanges or OTC markets, or subscription of foreign government bonds or ordinary corporate bonds and general bank debentures without equity characteristics (excluding subordinated bonds) that are offered and issued in the primary market, or subscription or redemption of ETNs, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange. (3) Trading of bonds under repurchase and resale agreements,or subscription or		12.1 7. Where an asset transaction other than any of those referred to in the preceding six subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; this shall not apply to the following circumstances: (1)Trading of domestic government bonds. (2) Where done by professional investors-securities trading on securities exchanges or OTC markets, or subscription of ordinary corporate bonds or general bank debentures without equity characteristics (excluding subordinated bank debentures) that are offered and issued in the primary market, or subscription or redemption of securities investment trust funds or futures trust funds, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange. (3) Trading of bonds under repurchase and resale agreements,or subscription or	Amended in accordance with the Guidelines for the Disposal of Assets Acquired or Disposed of by Publicly Issued Companies.
	rating not below the sovereignty
	rating of our government. Where done by professional investors-securities trading on securities exchanges or OTC markets, or subscription of foreign government bonds or ordinary corporate bonds and general bank debentures without equity characteristics (excluding subordinated bonds) that are offered and issued in the primary market, or subscription or redemption of ETNs, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange. Trading of bonds under repurchase and resale agreements,or subscription or

Amendedprovisions	Existingclauses	Explanation
redemption of money market funds issued by domestic securities investment trust enterprises.	redemption of money market funds issued by domestic securities investment trust enterprises.

Submitted for review.

Resolutions:

II. Proposal: Partial amendments to the “Articles of Incorporation” for discussion. (Proposed by the Board) Explanation:
The mapping of the clauses of the “Articles of Incorporation” before and after the amendment

amendment
Amendedprovisions	Existingclauses	Explanation
Article 28The 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. 1. 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. 2. Provision of special reserve: Other than provision made in accordance with the Company’s actual needs, Paragraph 1, Article 41 of the Securities and Exchange Act, for thenet deduction of equity in the current year, the equivalent amountof special reserve shall be set from the net surplus after tax of the current year and the amount other than the net surplus after tax of the current year shall be included in the undistributed surplus.If there remains any shortfall,it shall be withdrawn from the undistributed surplus of the previous year;the special reserve of the equivalent amount shall be set from the	Article 28The 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. 1. 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. 2. Provision of special reserve: Other than provision made in accordance with the Company’s actual needs, Paragraph 1, Article 41 of the Securities and Exchange Act shall be complied with to debitshareholders’ equity accounted for in the current year and provision for special reserve in the same amount as after-tax profitof 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. 3. Amount and type of distribution: The board of directors shall propose shareholder bonus	1. According to Jin-Guan-Zheng-Fa-Z i Order No. 1090150022, the specification for the provision of special reserve was amended. 2. Amended in accordance with Article 240 of the Company Act.

	Amendedprovisions	Existingclauses
undistributed surplus of the previous year. If there is still any shortfall, the current after-tax net surplus shall be added to the current after-tax net surplus and the items other than the current after-tax net profit shall be included in the undistributed surplus of the current years for allowance. If the amount of shareholders’ equity is recycled, profit may be distributed from the recycled portion of special reserve. 3. 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 theshareholders’meeting.For stock dividends, the board of directors shall formulate a proposal for the distribution of earnings, and submit a resolution to the shareholders’meeting to distribute dividends to shareholders.If cash dividends are proposed to be distributed, a resolution from a board meeting with more than two-thirds of the directors of participating in and consent of more than half of the directors present, and shall be submitted to the shareholders’ meeting. If the distribution of dividends to shareholders is conducted in a mixture of cash dividends and stock dividends, the cash dividends shall not be less than 10%, and the rest shall be in stock dividends.	undistributed surplus of the previous year. If there is still any shortfall, the current after-tax net	distribution in accordance with the law every year and submit it to theshareholders’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.
3.
	to the shareholders’meeting to distribute dividends to shareholders.If cash dividends are proposed to be distributed, a resolution from a board meeting with more than two-thirds of the directors of participating in and consent of more than half of the directors present, and shall be submitted to the shareholders’ meeting. If the distribution of dividends to shareholders is conducted in a mixture of cash dividends and stock dividends, the cash dividends shall not be less than 10%, and the rest shall be in stock dividends.

Submitted for review.

Resolutions:

III. 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.
Names and titles of directors permitted for competition:
A. CHEN, SHENG-TIEN, Chairman
B. YANG, CHENG-MING Vice Chairman
C. CHEN, CHIAO-MING, Director
D. NAKASHIMA, MITSUO, Director
E. CHENG, CHI-CHAO, Director
F. Representative of Chuan Bao Investment Co., Ltd.: CHEN, SHENG-CHUAN, Director
G. SU, CHING-YANG, Director
H. Lee, JEN-FANG, Independent Director
Names of directors released from non-compete restrictions. (Please refer to Page 49)
Submitted for review.

Resolutions:

Six. Questions and Motions

Seven. Meeting adjourned

Eight. Attachment

Attachment I

RECHI PRECISION CO., LTD.

2021 Business report

Dear shareholders,

According to the JARN report and the Company’s estimates, the global air conditioner market reached 126 million units in 2021, which was a year-on-year increase of 3.0%. As work from home becomes the new normal, the market of household air conditioners recovered more rapidly than the one for commercial air conditioners. In terms of China’s air-conditioning market, however, industrial inventories have increased significantly, mainly due to policy-based stockpiling due to uncertain factors such as the turbulent epidemic, soaring price of raw materials, and rising freight costs. As of December 2021, the sales volume of air conditioners in China increased by 7.9% year-on-year, of which the domestic sales market increased by 5.5% year-on-year, exports increased by 11.0%, and the industrial inventory has exceeded to over 20 million units. (Source: Industry Online, JARN Magazine)

Air conditioner and compressor production and sales report of China

					Unit: 1,000pcs
			2021 (January to December)	Year-on-year growth	2020 (January to December)
Air conditioner	Total production		155,007	7.0%	144,905
	Sale	Total	152,593	7.9%	141,464
		Domestic sales	84,699	5.5%	80,281
		Export	67,892	11.0%	61,184
Compressor	Total production		238,248	13.2%	210,411
	Sale	Total	238,571	12.8%	211,551
		Domestic sales	198,434	11.6%	177,752
		Export	40,137	18.8%	33,799

The Company’s sales volume of compressors in 2021 was 20.26 million units, a year-on-year increase of 4.9%. The consolidated revenue was NT$22,601,601,000, a year-on-year increase of 17.0%. The recovery of the global economy has driven the growth of the overall market. However, the fluctuating epidemic situation, rising commodities price, energy prices and freight costs, coupled with the oversupply of compressors in China, have all led to market price cuts and a decline in gross profit. The overall compressor industry continues to compete fiercely.

I. Review of business operation results in 2021: 1. Profitability:

Consolidated Financial Statements

Unit: NT$ thousand

Item	2021	2020	Increase (decrease) in amount	Growth rate %
Operatingrevenue – net	22,601,601	19,319,962	3,281,639	17.0%
Operatingcost	20,249,123	17,019,887	3,229,236	19.0%
Grossprofit	2,352,478	2,300,075	52,403	2.3%
Net OperatingIncome	586,790	819,805	(233,015)	-28.4%
Consolidatedpre-tax netprofit	695,989	988,015	(292,026)	-29.6%
Consolidated net income	518,114	722,644	(204,530)	-28.3%
Net income attributable to the company	542,921	709,491	(166,570)	-23.5%

Research & Development:
- According to the development plan of 2021, the Company has completed the development of unit-based new energy-efficient compressors in North America, the 1.5HP and 3.0HP miniaturized compressors in China, and the 2.2–3.6KW of Japan’s new energy law, high-efficiency inverter compressors, vertical inverter compressors for parking air conditioners, all-aluminum wire fixed speed compressors, and DC12V, DC48V micro inverter compressors.
Sales:
- The sales volume of compressors in Europe, North America, East Asia, and Central and South America all increased year-on-year, while in China, Southeast Asia, the Middle East, and South Asia, the sales volume declined. Application products in heat pump dryers, Unitary A/Cs, wall-mounted machines, Roof top A/Cs and other applications increased year-on-year, while split type air-conditioners and window type air-conditioners declined year-on-year.
Production:
- The inverter expansion plan was completed, and the production capacity was increased to 10.8 million units.
II. Summary of 2022 Business Plan:

In prospect of 2022, the environment affecting the Company’s operations is illustrated as follows:

Global economic environment:
The IMF estimates that the annual growth rate of global GDP will slow down to 4.9% in 2022, of which the United States will decrease from 6.0% to 5.2%, China’s dual control policy on energy consumption will result in a decrease from 8.0% to 5.6%, with 5.0% to 4.3% in Europe, and 2.4% to 3.2% in Japan.
Status of the air conditioner and compressor industry:
In terms of the air-conditioning industry: under the implementation of China’s new national energy efficiency standards, the domestic sales of domestic household air-conditioning inverters accounted for 94.6% in 2021 (accounted for 61.4% in 2020). It is estimated that the frequency conversion product competition among air-conditioning enterprises will become more intense in 2021, and the survival pressure of small and medium-sized brands will increase.
Compressor industry: The total sales volume of compressors in China in 2021 reached 238 million units, an increase of 12.8% year-on-year, of which the domestic sales volume was

198 million units, an increase of 11.6% year-on-year, and the export volume was 40.13 million units, an increase of 18.8% year-on-year; the new application market demand is gradually increasing. The global compressor production capacity has reached 280 million units. It is estimated that the compressor production capacity will still be oversupplied in 2022, and the cost of raw materials will rise sharply, which will hamper the profitability of the industry.

Raw materials:
Copper: LME copper prices rose 24% year-on-year in December compared to January, and copper inventories hit their lowest level since 1974 in October. Goldman Sachs speculates that there will be a severe imbalance between supply and demand in the copper market, and the policy and supply and demand situation are still favorable for the medium and long-term performance of copper prices. It is estimated that it will still be at a high stage before Q2 of 2022. Quantitative tightening and interest rate hike expectations will bring uncertainty to the second half of the year.
Steel: According to worldsteel, the recovery in global steel demand has been stronger than expected, with demand in all regions except China returning to levels of pre-pandemic era. It is estimated that global steel demand will increase by 2.2% in 2022 to 1.9 billion tons.
Rare-earth elements: As the demand for green energy such as wind power, electric vehicles and energy-saving inverter air conditioners continues to rise, the price of didymium metal reached RMB1.05 million per ton by the end of December, which was an annual increase of 106%, and dysprosium ferroalloy reached about RMB2.9 million per ton by the end of December, which was an annual increase of 50%, and terbium reached RMB14.25 million per ton by the end of December, which was an annual increase of 55%. It is estimated that the global supply and demand of rare-earth elements will be in a tight balance in the long run.

The operating challenges arising from the changes in the overall environment in 2022 will be more severe than in previous years. The operating strategies of the Group are summarized as follows:

The annual compressor sales target is 17.98 million units and more.
In response to the market competition of frequency conversion products, we will continue to promote inverter compressors to increase the market share.
In response to the global trend of net zero, we will grasp medium and long-term low-carbon business opportunities, and strive to reach new customers, develop new models and adopt new applications.
Focus on product competitiveness, response speed and forward-looking product development; invest in basic research and product practice R&D projects.
Strengthen cost control and improve asset utilization efficiency.
Accelerate production automation and intelligence, and improve the consistency of the Group’s product quality.
Shorten the processing time of customer complaints on products and improve customer satisfaction.
Implement ESG sustainable development responsibilities, and practice energy conservation and carbon reduction.

Looking forward to 2022, the compressor industry is still oversupplied, and the market continues to compete with price cuts. The Company adheres to the concept of sustainable operation and integrity management, adjusts its operation strategy, and will focus on pursuing a reasonable gross profit margin as its primary goal, and will continue to enhance its research and development capabilities, break through technical barriers and improve customer satisfaction to maximize 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 2021 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,

2022 Regular Shareholders’ Meeting

RECHI PRECISION CO., LTD.

Chair of the Audit Committee: SU, CHING YANG

May 4, 2022

Attachment III

RECHI PRECISION CO., LTD.

Guidelines for the Ninth Repurchase of Shares and Transfer to Employees

Article 1 In order to motivate employees and enhance internal cohesion, the Company hereby formulated these Guidelines for Repurchase and Transfer of Shares for Employees in accordance with Article 28-2, Paragraph 1, Subparagraph 1 of the Securities and Exchange Act and the “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies” issued by the Financial Supervisory Commission. When the Company repurchases shares and transfers them to employees, in addition to the provisions of relevant laws and regulations, it shall be handled in accordance with the provisions of these Guidelines.
Article 2 The shares transferred to employees this time are common shares, and their rights and obligations are the same as other outstanding shares, unless otherwise stipulated by relevant laws and regulations.
Article 3 The shares repurchased this time may be transferred to employees at one time or in installments within five years from the date of repurchasing the shares in accordance with the provisions of these Guidelines. Those that are not transferred within the time limit shall be regarded as unissued shares by the Company, and their registration shall be eliminated in accordance with the laws.
Article 4 All full-time employees of the Company and any of its domestic/foreign subsidiaries who have been onboard for at least one year at the base date of subscription (The definition of subsidiaries shall be based on Articles 369-2, 369-3, Paragraph 2 of Article 369-9 and Article 369-11 of the Company Act) shall be eligible for subscription in accordance with the subscription amount specified in Article 5 of these Guidelines.
Article 5 Number of shares to be subscribed by employees:
The number of shares that employees can subscribe is based on their levels of job titles and performance results. Such number can be adjusted separately for employees having special contributions to the Company. All share subscription thresholds shall be authorized by the chairman of the board.
The number of shares, price, subscription payment period and other related matters for each transfer operation shall be authorized by the chairman of the board to be separately approved in accordance with relevant regulations.
Employees who do not subscribe and pay upon the subscription and payment period expires will be considered having waived the subscription right. The balance of the insufficient subscription shall be subscribed by the chairman of the board and other employees.
Article 6 The procedures for the repurchase of shares and transfer to employees:
The resolutions of the board of directors shall be announced and reported, and the shares of the Company shall be repurchased within the execution period.
The employee’s share subscription base date, the standard for the number of shares to be subscribed, the subscription payment period and the content of rights and other operational matters shall be determined and announced by the chairman of the board.
Calculate the number of shares actually subscribed and paid, and proceed to the registration of transfer of shares.
Article 7 If the repurchased shares transferred to employees this adopt the average price of actual repurchase as the transfer price, or as per the Company’s Articles of Association,

an average price lower than the actual repurchase price, the latest repurchase shall be, prior to the transfer, approved by the resolution of the most recent the shareholders’ meeting with the attendance shareholders holding more than half of the total number of issued shares, in which the consent of more than two-thirds of the voting rights of the shareholders present is obtained, and the matters stipulated in Article 10-1 of the “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies” shall be listed and explained in the reasons for convening the abovementioned shareholders’ meeting.

Article 8 After the repurchased shares are transferred to the employees and the transfer registration is completed, the remaining rights and obligations are the same as the original shares unless otherwise specified.
Article 9 These Guidelines shall become effective after being passed by the resolution of the board of directors, and may be amended upon the any relevant resolution of the board of directors.
Article 10These Guidelines shall be submitted and reported to the shareholders’ meeting, and the same shall apply to the amendments.

These Guidelines were formulated on November 3, 2021.

Attachment IV

Auditor’s Report

To RECHI PRECISION CO., LTD.:

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, 2021 and 2020, 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, 2021 and 2020, 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 matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of RECHI Group in 2021. 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 2021 consolidated financial statements of RECHI PRECISION CO., LTD (RECHI Group) and its subsidiaries are described as follows:

The timing of recognition of export sales revenue

RECHI Group is mainly engaged in the manufacture and trading of refrigerant compressors. The sales are divided into domestic sales and export sales. The export sales targets are located in many regions around the world, and the transaction conditions agreed with different customers may differ.

The sales revenue of RECHI Group is based on the transaction conditions agreed by individual customers, and the sales revenue is recognized when the transaction conditions are reached and the control of the goods has been transferred to the buyer. Due to the long delivery period of some export transactions, and that the transaction conditions agreed with specific customers will involve manual judgment in the revenue recognition process, it is possible that the sales revenue may not be recorded in the correct period, so the accountant will export sales under specific transaction conditions. The correctness of the time point for the recognition of cargo revenue is listed as one of the most important issues in this year’s audit.

The main audit procedures performed by the CPA on the recognition time of the above sales revenue are as follows:

Understand and appraise the operating procedures and internal control systems at the time of recognition of sales revenue, and test the effectiveness of these controls.
A cut-off test is performed for the sales transactions of specific customers in a certain period before and after the balance sheet date, including checking the transaction conditions, customs declarations and other documents of the transaction and inquiring about the shipping schedule to confirm that the revenue recognition has been recorded in the appropriate period.
Obtain the shipment details of the manual operation summary for a specific period for inspection, and check the relevant vouchers randomly to confirm whether the adjustment of the time point of revenue recognition is correct.

Other information

The Company has also prepared the parent company only financial statements for the years ended December 31, 2021 and 2020, for which we have issued an unqualified opinion.

Responsibilities of Management and Those in Charge of 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 material, 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 disclosures 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, 2021. 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 CHANG, CHING HSIA CPA TSAI, CHEN TSAI

The document number approved by the Securities and Futures Bureau Approval Financial Supervision Management Document No. Committee Tai-Cai-Zheng (6) Zi No. 0920123784 Jin-Guan-Zheng-Shen Zi No. 1090347472

March 6, 2022

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

Code 1100 1110 1120 1136 1150 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 2320 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, & 29) Notes receivable – non-related parties (Note 4, 10 & 29) Notes receivable – non-related parties (Note 4 & 10) Accounts receivable – related parties (Notes 4 & 28) Other receivables (Note 28) Inventory (Note 4 & 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 & 29) Right-of-use assets (Note 4 & 15) Other intangible assets (Note 4) Goodwill (Note 4) 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 28) Accounts payable – non-related parties Accounts payable – related parties (Note 28) Other payables (Note 18) Income tax liability (Note 4 & 23) Liability reserve – Current Lease liabilities – current (Note 4 & 15) Refund liabilities – current (Note 21) Long-term borrowings due within one year (Note 17 & 31) Other current liabilities Total of current liabilities Non-current liabilities Long-term borrowings (Note 17 & 29) 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) 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 Non-controlling interests Total equity Total Liabilities and Equity		December 31,2021	December 31,2021	% 11 5 - 12 11 13 - 1 11 4 - 68 - 2 26 1 - - 2 1 32 100 2 1 22 - 11 1 3 2 - - 2 1 1 46 9 3 3 - - - 15 61 19 5 4 3 7 14 4) - 34 5 39 100		Unit: NT$ December 31,2020	Unit: NT$ December 31,2020	thousand % 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
			Amount $ 3,045,098 1,239,339 - 3,281,365 2,998,597 3,489,300 766 146,864 2,897,985 1,042,814 25,056 18,167,184 18,120 506,214 6,866,585 188,799 37,655 55,725 500,585 241,640 8,415,323 $ 26,582,507 $ 612,380 349,698 5,760,034 36,320 2,987,695 142,605 876,227 453,327 99,147 12,438 481,107 225,754 150,163 12,186,895 2,453,886 649,463 752,046 37,131 53,625 36,521 3,982,672 16,169,567 5,049,151 1,343,868 992,756 743,222 2,044,866 3,780,844 1,075,955) 95,476) 9,002,432 1,410,508 10,412,940 $ 26,582,507				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
		( (		(		( (		(

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

Chairman: CHEN, SHENG TIEN

Manager: FENG, MING FA

Accounting Officer: Wu, Chin-Mei

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

For the Years Ended December 31, 2021 and 2020

Unit: NT$ thousand, except Earnings Per Share (NT$)

Code 4100 Sales revenue (Note 4, 21 & 28) 5000 Operating cost (Note 11, 22 & 28) 5900 Gross profit Operating expenses (Note 22 & 28) 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) 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		2021

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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 Income 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 (Continued on next page)		2021		% 3 - 3 - - - - - - - - 3		2020
						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		%
					( ( (		(	5 1) 4 - 2 - 2 - - - 2 6

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Code Profit attributable to: 8610 The company’s shareholders 8620 Non-controlling interests 8600 Total comprehensive income attributable to: 8710 The company’s shareholders 8720 Non-controlling interests 8700 Earnings per share (Note 24) Business units in continuing operation 9710 Basic 9810 Diluted		2021		% 2 - 2 3 - 3		2020
		Amount $ 542,921 24,807) $ 518,114 $ 612,786 31,056) $ 581,730 $ 1.08 $ 1.07				Amount $ 709,491 13,153 $ 722,644 $ 1,166,146 27,628 $ 1,193,774 $ 1.41 $ 1.40		%
	( (							4 - 4 6 - 6

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

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

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Statements of Changes in Shareholders’ Equity For the Years Ended December 31, 2021 and 2020

Unit: NT$ thousand

			Equityof the company	Equityof the company					Total equity
Capital stock Shares (in thousand shares) Amount 506,013 $ 5,060,131 - - - - - - - - ( 1,098 ) ( 10,980 ) - - - - - - - - 504,915 5,049,151 - - - - - - - - - - - - - - - - 504,915 $ 5,049,151	Capital reserves $ 1,351,403 - - - - ( 7,535 ) - - - - 1,343,868 - - - - - - - - $ 1,343,868		Retained earnings	Undistributed earnings $ 1,025,691 ( 65,596 ) ( 335,833 ) ( 252,458 ) - ( 15,751 ) - 709,491 509 710,000 1,066,053 ( 69,425 ) 456,146 ( 353,427 ) - 542,921 ( 3,980) 538,941 406,578 $ 2,044,866	Other equity Exchange differences from the translation of financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income ( $ 1,075,561 ) ( $ 123,807 ) - - - - - - - - - - - - - - 114,027 342,119 114,027 342,119 ( 961,534 ) 218,312 - - - - - - - - - - ( 52,541) 126,386 ( 52,541) 126,386 - ( 406,578) ($ 1,014,075) ($ 61,880)	Treasuryshares ( $ 34,266 ) - - - ( 306 ) 34,266 - - - - ( 306 ) - - - ( 95,170 ) - - - - ($ 95,476)
					Exchange differences from the translation of financial statements of foreign operations ( $ 1,075,561 ) - - - - - - - 114,027 114,027 ( 961,534 ) - - - - - ( 52,541) ( 52,541) - ($ 1,014,075)
Shares (in thousand shares) 506,013 - - - - ( 1,098 ) - - - - 504,915 - - - - - - - - 504,915		Statutory surplus reserves $ 857,735 65,596 - - - - - - - - 923,331 69,425 - - - - - - - $ 992,756
(						( ( ( ( (	( ( ( (	( ( ( (	$ 9,449,584 - - ( 252,458 ) ( 306 ) - ( 110,787 ) 722,644 471,130 1,193,774 10,279,807 - - ( 353,427 ) ( 95,170 ) 518,114 63,616 581,730 - $ 10,412,940

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

Chairman: CHEN, SHENG TIEN

Manager: FENG , MING FA

Accounting Officer: Wu, Chin-Mei

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

For the Years Ended December 31, 2021 and 2020

Unit: NT$ 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 loss (income) from the disposal and obsolescence of property, plant, equipment and right-of-use assets A23700 Inventory valuation and obsolescence losses A24100 Net foreign exchange benefits were not realized A30000 Net change in operating assets and liabilities A31115 Decrease (increase) in financial assets mandatorily measured at fair value through profit or loss A31130 Decrease (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 Decrease (increase) in other accounts receivable A31200 Decrease (increase) in inventories A31230 Increase (decrease) in prepayments A31240 Decrease in other current assets A32125 Increase (decrease) in return liability – current A32130 Increase (decrease) in notes payable A32140 Increase (decrease) in notes payable – related parties A32150 Increase in accounts payable	2021 $ 695,989 914,039 10,481 ( 14,223 ) ( 55,961 ) 77,406 ( 102,148 ) ( 8,205 ) ( 3,776 ) 6,037 14,170 ( 39,547 ) ( 69,127 ) 1,539,685 - 502,257 1,772 50,216 ( 634,472 ) ( 256,144 ) 1,254 ( 127,631 ) ( 14,010 ) ( 28,139 ) 270,598	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 34,128 368,389

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Code A32160 Increase in accounts payable – related parties A32180 Increase in other payables A32200 Increase 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 B00020 Disposal of financial assets at fair value through other comprehensive income B00040 Financial assets acquired on the basis of cost after amortization B00050 Financial assets on the basis of cost after amortization 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 inflow (outflow) in 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 Repayments of long-term borrowings C01900 Decrease 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 C04900 Purchase of treasury stock C05800 Decrease in non-controlling interests CCCC Net cash outflow from financing activities DDDD Impact of changes in exchange rate on cash and cash equivalents		2021 $ 7,886 2,500 9,162 93,371 ) 3,604) 2,653,094 78,620 79,831 ) 202,634) 2,449,249 1,282,152 618,423 ) 43,417 244,536 ) 3,805 6,590 ) 141,212 ) 21,066 25,095 364,774 1,198,906 ) - 299,995 ) 462,081 1,452,081 ) 350,000 ) 6,916 - 11,635 ) 353,427 ) 95,170 ) - 3,292,217) 53,651)		2020
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 77,126 77,588 39,163 191,830 1,838) 4,538,861 67,269 156,217 ) 140,335) 4,309,578 - 1,565,538 ) 1,369,703 411,854 ) 81,599 7,584 ) 141,901 ) 31,658 7,013 636,904) 638,839 ) 549,756 - 1,915,413 2,717,333 ) - - 4,870 ) 6,741 ) 252,458 ) 306 ) 110,787) 1,266,165) 12,308

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Code 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	2021 ( $ 531,845 ) 3,576,943 $ 3,045,098		2020
			$ 2,418,817 1,158,126 $ 3,576,943

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

Chairman: CHEN, SHENG TIEN Manager: FENG , MING FA Accounting Officer: 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, 2021 and 2020, 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, 2021 and 2020 and for the years then ended, 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 matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the individual financial statements of the Company in 2021. 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 2021 individual financial statements of the Company are described as follows:

The timing of recognition of export sales revenue

RECHI Precision Co., Ltd. is mainly engaged in the manufacture and sale of refrigerant compressors. The sales types are divided into domestic sales and export sales. Among them, export sales targets are located in many regions around the world, and the transaction conditions agreed between different customers may differ.

The export sales revenue of RECHI Precision Co., Ltd. is based on the transaction conditions agreed by individual customers, and the sales revenue is recognized when the transaction conditions are reached and the control of the goods has been transferred to the buyers. Due to the long delivery period of some export transactions, and that the transaction conditions agreed with specific customers will involve manual judgment in the revenue recognition process, it is possible that the sales revenue may not be recorded in the correct period, so the accountant will export sales under specific transaction conditions. The correctness of the time point for the recognition of cargo revenue is listed as one of the most important issues in this year’s audit.

The main audit procedures performed by the CPA on the recognition time of the above sales revenue are as follows:

Understand and appraise the operating procedures and internal control systems at the time of recognition of sales revenue, and test the effectiveness of these controls.
A cut-off test is performed for the sales transactions of specific customers in a certain period before and after the balance sheet date, including checking the transaction conditions, customs declarations and other documents of the transaction and inquiring about the shipping schedule to confirm that the revenue recognition has been recorded in the appropriate period.
Obtain the shipment details of the manual operation summary for a specific period for inspection, and check the relevant vouchers randomly to confirm whether the adjustment of the time point of revenue recognition is correct.

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

Management is responsible for the preparation and fair presentation of the individual 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 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 material, 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 disclosures 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, 2021. 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 CHANG, CHING HSIA

CPA Tsai Chen Tsai

The approval number of the Financial Supervision and Administration Commission Jin-Guan-Zheng-Shen Zi No. 1090347472

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

March 16, 2022

RECHI PRECISION CO., LTD. Individual Balance Sheet December 31, 2021 and 2020

Code 1100 1120 1150 1170 1180 1200 1210 130X 1410 1470 11XX 1550 1600 1755 1780 1840 1990 15XX 1XXX Code 2100 2110 2170 2180 2200 2230 2280 2320 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 – non-related parties (Note 4 & 8) Accounts receivable – related parties (Notes 4 & 23) Other receivables Other receivables – related parties (Note 23) 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 & 24) 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 23) Other payables (Notes 14 & 23) Income tax liability (Notes 4 & 19) Lease liabilities – current (Note 4 & 12) Long-term borrowings due within one year (Note 13) Refund liabilities – current (Note 17) Other current liabilities Total of current liabilities Non-current liabilities Short-term borrowings (Notes 13 & 24) 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 (Note 16) 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 31,2021	December 31,2021	% 2 - 1 11 - - 4 5 - - 23 72 4 - - 1 - 77 100 - 1 - 20 2 1 - - - - 24 13 4 5 - - - 22 46 30 8 6 5 12 23 6) 1) 54 100		Unit: NT$ thousand December 31,2020 Amount % $ 230,166 1 1,067,276 6 193,861 1 2,257,126 13 28,439 - 5,874 - 936,965 5 425,313 3 25,062 - 1,514 - 5,171,596 29 11,930,726 66 735,790 4 1,811 - 25,749 - 133,600 1 26,848 - 12,854,524 71 $ 18,026,120 100 $ 706,849 4 499,854 3 28,739 - 2,267,932 12 328,618 2 148,927 1 838 - - - 73,681 - 155,123 1 4,210,561 23 3,199,080 18 999,546 6 724,995 4 950 - 52,253 - 492 - 4,977,316 28 9,187,877 51 5,049,151 28 1,343,868 7 923,331 5 1,199,368 7 1,066,053 6 3,188,752 18 743,222) ( 4) 306) - 8,838,243 49 $ 18,026,120 100	Unit: NT$ thousand December 31,2020 Amount % $ 230,166 1 1,067,276 6 193,861 1 2,257,126 13 28,439 - 5,874 - 936,965 5 425,313 3 25,062 - 1,514 - 5,171,596 29 11,930,726 66 735,790 4 1,811 - 25,749 - 133,600 1 26,848 - 12,854,524 71 $ 18,026,120 100 $ 706,849 4 499,854 3 28,739 - 2,267,932 12 328,618 2 148,927 1 838 - - - 73,681 - 155,123 1 4,210,561 23 3,199,080 18 999,546 6 724,995 4 950 - 52,253 - 492 - 4,977,316 28 9,187,877 51 5,049,151 28 1,343,868 7 923,331 5 1,199,368 7 1,066,053 6 3,188,752 18 743,222) ( 4) 306) - 8,838,243 49 $ 18,026,120 100
			Amount $ 348,207 - 143,597 1,791,191 532 30,887 578,767 867,175 43,296 1,684 3,805,336 12,075,673 712,409 3,110 22,942 156,775 9,950 12,980,859 $ 16,786,195 $ - 149,793 31,019 3,326,531 308,742 178,090 1,478 4,314 108,441 24,040 4,132,448 2,204,766 649,463 741,303 1,666 53,625 492 3,651,315 7,783,763 5,049,151 1,343,868 992,756 743,222 2,044,866 3,780,844 1,075,955) 95,476) 9,002,432 $ 16,786,195				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
		( (		( (		( (		(

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, 2021 and 2020

Unit: NT$ thousand, except Earnings Per Share (NT$)

Code 4110 Operating income (Notes 4, 17 & 23) 5000 Operating cost (Notes 9, 18 & 23) 5900 Gross profit Operating expenses (Notes 18 & 23) 6100 Marketing expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit reversal gain (impairment loss) (Note 8) 6000 Total operating expenses 6900 Net Operating Income Non-operating income and expense (Notes 18 & 23) 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		2021

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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 (Note 16) 8349 Income 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)		2021

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Code Earnings per share (Note 20) Business units in continuing operation 9710 Basic 9810 Diluted		2021	%		2020
		Amount $ 1.08 $ 1.07			Amount $ 1.41 $ 1.40	%

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

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

RECHI PRECISION CO., LTD. Individual Statements of Changes in Shareholders’ Equity

For the Years Ended December 31, 2021 and 2020

Unit: NT$ thousand

Capital stock Shares (in thousand shares) Amount 506,013 $ 5,060,131 - - - - - - - - ( 1,098 ) ( 10,980 ) - - - - - - 504,915 5,049,151 - - - - - - - - - - - - - - - - 504,915 $ 5,049,151	Capital stock Shares (in thousand shares) Amount 506,013 $ 5,060,131 - - - - - - - - ( 1,098 ) ( 10,980 ) - - - - - - 504,915 5,049,151 - - - - - - - - - - - - - - - - 504,915 $ 5,049,151	Capital reserves $ 1,351,403 - - - - ( 7,535 ) - - - 1,343,868 - - - - - - - - $ 1,343,868		Retained earnings	Undistributed earnings $ 1,025,691 ( 65,596 ) ( 335,833 ) ( 252,458 ) - ( 15,751 ) 709,491 509 710,000 1,066,053 ( 69,425 ) 456,146 ( 353,427 ) - 542,921 ( 3,980) 538,941 406,578 $ 2,044,866	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 ( $ 1,075,561 ) ( $ 123,807 ) - - - - - - - - - - - - 114,027 342,119 114,027 342,119 ( 961,534 ) 218,312 - - - - - - - - - - ( 52,541) 126,386 ( 52,541) 126,386 - ( 406,578) ($ 1,014,075) ($ 61,880)	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 ( $ 1,075,561 ) ( $ 123,807 ) - - - - - - - - - - - - 114,027 342,119 114,027 342,119 ( 961,534 ) 218,312 - - - - - - - - - - ( 52,541) 126,386 ( 52,541) 126,386 - ( 406,578) ($ 1,014,075) ($ 61,880)	Treasury shares ( $ 34,266 ) - - - ( 306 ) 34,266 - - - ( 306 ) - - - ( 95,170 ) - - - - ($ 95,476)		Total equity
						Exchange differences from the translation of financial statements of foreign operations ( $ 1,075,561 ) - - - - - - 114,027 114,027 ( 961,534 ) - - - - - ( 52,541) ( 52,541) - ($ 1,014,075)
Shares (in thousand shares) 506,013 - - - - ( 1,098 ) - - - 504,915 - - - - - - - - 504,915			Statutory surplus reserves $ 857,735 65,596 - - - - - - - 923,331 69,425 - - - - - - - $ 992,756	Special surplus reserves $ 863,535 - 335,833 - - - - - - 1,199,368 - ( 456,146 ) - - - - - - $ 743,222
(	(	(		(	( ( ( ( ( ( (	( ( ( ( (	( ( (	( ( ( ( (	( ( ( (	$ 7,924,861 - - 252,458 ) 306 ) - 709,491 456,655 1,166,146 8,838,243 - - 353,427 ) 95,170 ) 542,921 69,865 612,786 - $ 9,002,432

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

Chairman: CHEN, SHENG TIEN

Manager: FENG , MING FA Accounting Officer: Wu, Chin-Mei

RECHI PRECISION CO., LTD. Individual Statements of Cash Flow For the Years Ended December 31, 2021 and 2020

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) 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 A24100 Unrealized foreign currency exchange loss (gain) A30000 Net change in operating assets and liabilities A31130 Decrease (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 A31190 Decreased in other receivables – related parties A31200 Increase in inventories A31230 Increased in Advance A31240 Increase (decrease) in other current assets A32125 Increase (decrease) in refund liability – current A32150 Increase 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 A33100 Interest received (Continued on next page)	2021 $ 697,826 63,997 5,071 ( 9,824 ) 57,225 ( 9,485 ) ( 8,069 ) ( 433,137 ) ( 308 ) 13,601 29,822 50,799 - 457,764 29,547 ( 24,835 ) 2,082 ( 455,463 ) ( 18,234 ) ( 170 ) 33,965 2,280 1,075,407 ( 7,092 ) ( 3,604 ) ( 131,083) 1,418,082 13,150	Unit: NT$ thousand 2020 $ 889,955 62,021 3,318 2,117 73,021 ( 11,192 ) ( 30,459 ) ( 744,577 ) ( 956 ) - ( 66,206 ) ( 8,762 ) 9 111,196 ( 3,480 ) ( 5,847 ) 59,350 ( 44,696 ) ( 577 ) 2,727 ( 16,884 ) 10,556 ( 123,003 ) 57,049 ( 1,838 ) 137,552 350,394 8,422

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Code			2021		2020
A33300	Interest payment	( $	56,870 )	( $	73,574 )
A33500	Income tax payment	(	144,074)	(	74,557)
AAAA	Net cash inflow from operating
	activities		1,230,288		210,685
	Cash flow from investing activities
B00020	Disposal of financial assets at fair value
	through other comprehensive income		1,193,308		-
B02400	The investee company that uses the
	equity method reduces capital and
	returns the share price		240,000		-
B02700	Purchase of property, plant, and
	equipment	(	28,718 )	(	35,216 )
B02800	Proceeds from disposal of property, plant
	and equipment		1,609		9,620
B04300	Increase in other receivables – related
	parties	(	558,330 )	(	880,040 )
B04400	Decreased in other receivables – related
	parties		880,040		353,920
B04500	Purchase of intangible assets	(	2,264 )	(	5,807 )
B06700	Increase of other non-current assets	(	8,231 )	(	21,472 )
B07600	Dividends received		16,533		714,271
BBBB	Net cash inflow in investing
	activities		1,733,947		135,276
	Cash flow from financing activities
C00100	Increase of short-term loans		-		368,314
C00200	Decrease in short-term loans	(	706,012 )		-
C00500	Increase in short-term notes payable		-		499,854
C00600	Decrease in short-term notes payable	(	350,061 )		-
C01900	Decrease in long-term notes payable	(	350,000 )		-
C01600	Proceeds from long-term loan		210,000		1,413,080
C01700	Repayments of long-term borrowings	(	1,200,000 )	(	2,215,000 )
C03000	Collect the guarantee deposits received		-		200
C04020	Repayments of principal portion of the
	lease	(	1,524 )	(	1,453 )
C04500	Dividends paid	(	353,427 )	(	252,458 )
C04900	Purchase of treasury stock	(	95,170)	(	306)
CCCC	Net cash outflow from financing
	activities	(	2,846,194)	(	187,769)
EEEE	Net increase in cash and cash equivalents		118,041		158,192
E00100	Cash and cash equivalents balance – beginning
	of year		230,166		71,974
E00200	Cash and cash equivalents balance – end of
	year	$	348,207	$	230,166
The	notes attached shall constitute an integral part of this		individual financial statement.

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

Attachment V

RECHI PRECISION CO., LTD. The 2021 Statement of Retained Earnings

Unit: NTD

	Unit: NTD	Unit: NTD
Item	Amount
Opening undistributed earnings Effect of retrospective application and retrospective restatement Undistributed surplus at the beginning of the adjustment period Retained earnings due to adjustment of investments using the equity method Dispose of equity instrument investments at fair value through other comprehensive gains and losses, and the accumulated gains and losses are directly transferred 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 Less: Provision of special reserve according to laws Current distributable earnings	1,099,346,927	542,921,083 (94,551,802) (332,732,686)
	1,099,346,927
	21,691,081 384,886,434 (3,980,582)
	1,501,943,860
		1,617,580,455
Distribution: Shareholder dividends – cash (NTD0.7 per share) - Stock share (NT$0.0per share)		(349,926,574) 0
Closing undistributed earnings		1,267,653,881

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.
Note 2: The cash dividends are calculated according to the distribution ratio up toMT$1, and the amount below NT$1 will be rounded off. The total amount of irregularities distributed less than NT$1 will be included in other non-operating income.

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

Attachment VI

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., Dahua Village, 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., Dahua Village, Guishan Dist., Taoyuan City 11F, Iwatani 2ndBuilding, 2-14, Azuchi-cho, Chuo-ku, Osaka, Japan No. 26, Dinghu Rd., Dahua Village, Guishan Dist., Taoyuan City 333008	Manufacturing and sales of home appliance Investment business Investment business 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: YANG, CHENG-MING	Chairman of Dyna RECHI Co., Ltd.	No. 25, Jingjian Rd., Qianjin Village, Pingtung City, Pingtung County 90093	Design and production of BLDC motors	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 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., Qianjin Village, Pingtung City, Pingtung County 90093 No. 13, Chunjiang Road, Chengxikong District, Economic and Technological Development Zone, Jiujiang City, Jiangxi Province 10F.-1,No. 374,Sec. 2,Bade Rd.,Songshan Dist.,Taipei City10556	Investment business Motor manufacturing Compressor motor manufacturing Compressor assembly Compressor components Design and production of BLDC motors Sales of new electromechanical components, compressors, and components Investment business	Incumbent
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 ShengBo Electronics Co.,Ltd.	2F., No.58, Sec. 1, Minsheng E. Rd., Songshan Dist., Taipei City No. 26, Dinghu Rd., Dahua Village, 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., Dahua Village, 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 Manufacturingand sales of electronicproducts	Incumbent
Director	Sharp Corporation Representative: NAKASHIMA, MITSUO	Manager and Assistant Manager of SAS Department/Manager of Domestic and International air-conditioning PCI 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	Incumbent
Director	China Steel Corporation Representative: Cheng, Chi-Chao	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., Qianjin Village, Pingtung City, Pingtung County 90093 19F., No. 88, Chenggong 2nd Rd., Qianzhen Dist., Kaohsiung City	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 BenQ Medical Tech Co., Ltd. Independent director of Formosa Pharmaceuticals,Inc.	7F., No. 46, Zhouzi St., Neihu Dist., Taipei City 8F.-6,No. 57,Guangfu N. Rd.,Songshan Dist.,Taipei City	Development, manufacturing, and sales of medical equipment and instruments Medical drugresearch and development	Incumbent

IX. Appendices

Appendix 1 RECHI PRECISION CO., LTD. Articles of Incorporation (before amendment)

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 nine 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.
		2. A familial relationship within the second degree of kinship.
Article	14-2	Among the number of directors under the previous article, the Company has three
		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:
		1. Drafting of the articles of association of the Company.
		2. Approval and amendment of organizational charters of the Company.
		3. Approval of annual budget and review of annual closing, including the review of
		annual business plan and supervision of its execution.
		4. 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.
		5. Hiring and dismissal of important employees.
		6. Approval for endorsement, guarantee or acceptance of notes in the name of the
		Company.
		7. Establishment and closing of branch organizations.
		8. Approval for the Company’s investment in other companies.
		9. Proposal of lien, sale, lease, pledge, mortgage or other disposition of all or
		important part of Company properties.
		10. Approval of application to list the Company’s shares.
		11. Approval for plant establishment or expansion investment plans and the
		amendments or terminations thereof.
		12. Approval for signature for acquisition, transfer, license of know-how or patent or
		technical cooperation contract and the amendments or terminations thereof.
		13. Distribution of profit.
		14. 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. 1. Business report 2. Financial statements 3. 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 Shareholders’ Meeting

		RECHI PRECISION CO., LTD. Rules of Procedure for Shareholders’ Meeting
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, 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	5-4	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	5-5	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 the meeting as soon as it is due
		and 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 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.

		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, the names of those not
		elected as directors, supervisors and the number of votes received.
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 two 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 August 26, 2021)

Appendix 3

RECHI PRECISION CO., LTD. Director Shareholding Schedule

Date: April 17, 2022

		Date: April 17,2022
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 2022

52399_rns_2022-06-29_50b7089f-3346-4d49-bc5b-4d22925ad107.pdf

RECHI PRECISION CO., LTD.

Meeting Handbook for 2022 Annual Meeting of Shareholders

Table of Contents

One. Meeting procedure RECHI PRECISION CO., LTD. Procedure for the 2022 Annual Meeting of Shareholders

Two. Meeting Agendas

RECHI PRECISION CO., LTD. Agenda of 2022 Annual Meeting of Shareholders

II. Chairman’s Remarks

III. Matters to be reported

IV. Proposals

VI. Questions and Motions

VII. Adjournment

Three. Company Reports

Four. Proposals

Five. Matters for discussion

Six. Questions and Motions

Seven. Meeting adjourned

Eight. Attachment

Attachment I

RECHI PRECISION CO., LTD.

2021 Business report

Dear shareholders,

I. Review of business operation results in 2021: 1. Profitability:

Attachment II

RECHI PRECISION CO., LTD. Audit Committee’s Review Report

Attachment III

RECHI PRECISION CO., LTD.

Guidelines for the Ninth Repurchase of Shares and Transfer to Employees

Attachment IV

Auditor’s Report

To RECHI PRECISION CO., LTD.:

Audit opinions

The basis for opinions

Key audit matters

The timing of recognition of export sales revenue

Other information

Responsibilities of Management and Those in Charge of 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, 2021 and 2020

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

For the Years Ended December 31, 2021 and 2020

(Continued from previous page)

(Continued from previous page)

RECHI PRECISION CO., LTD. and its subsidiaries Consolidated Statements of Changes in Shareholders’ Equity For the Years Ended December 31, 2021 and 2020

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

(Continued from previous page)

Auditor’s Report

Audit opinions

The basis for opinions

Key audit matters

The timing of recognition of export sales revenue

Responsibilities of Management and Those in Charge of 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, 2021 and 2020

RECHI PRECISION CO., LTD. Individual Income Statement

For the Years Ended December 31, 2021 and 2020

(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, 2021 and 2020

Attachment V

RECHI PRECISION CO., LTD. The 2021 Statement of Retained Earnings

Attachment VI

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

IX. Appendices

Appendix 1

RECHI PRECISION CO., LTD. Articles of Incorporation (before amendment)

Chapter 1 General Principles

Chapter 7 Accounting

Chapter 8 Additional notes

Appendix 2

RECHI PRECISION CO., LTD. Rules of Procedure for Shareholders’ Meeting

RECHI PRECISION CO., LTD. Director Shareholding Schedule

Appendix 4

More from RECHI

RECHI AGM Information 2022