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S.C.P.C AGM Information 2023

Jun 28, 2023

51900_rns_2023-06-28_18633092-91af-45dd-8c0a-7b5c3e9352f5.pdf

AGM Information

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Stock Code: 1720

Standard Chem. & Pharm. Co., Ltd.

Handbook for the 2023 Annual Meeting of Shareholders

Meeting type: Physical Shareholders’ Meeting

Time: 9:00 a.m. on Tuesday, June 20, 2023

Place: No. 154, Kaiyuan Rd., Tuku Village, Sinying District, Tainan City.

----Disclaimer----

THIS IS A TRANSLATION OF THE AGENDA FOR THE 2023 ANNUAL SHAREHOLDERS’ MEETING (“THE AGENDA”) OF STANDARD CHEM. & PHARM. CO., LTD (“THE COMPANY”). THE TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOT FOR OTHER PURPOSE. THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE AGENDA SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETAION OF THE SUBJECT MATTER STATED HEREIN.

Table of Contents

Table of Contents
I. Meeting Procedure 1
II. Meeting Agenda 2
III. Report Items 3
IV. Matters Proposed for Ratification 6
V. Matters Proposed for Discussion and Election Resolution 8
VI. Extempore Motions 10
Attachments
1. Business Report 11
2. Independent Auditors’ Report and Financial Statements 14
3. Director Candidate List 39
4. Comparison Table for the “Operating Procedures of Rules of
Procedure for Shareholders Meetings”		 40
Appendices
1. Articles of Incorporation 62
2. Rules of Procedure for Shareholders Meetings
(Before revision)		 69
3. Procedures for Election of Directors 79
4. Directors’ Shares Held at Present 82

I. Meeting Procedure

Standard Chem. & Pharm. Co., Ltd.

Procedure for the 2023 Annual Meeting of Shareholders

1. Call Meeting to Order

  1. Chairperson Remarks

  2. Report Items

  3. Matters Proposed for Ratification

5. Matters Proposed for Discussion and Election Resolution

  1. Extempore Motions

  2. Adjournment

~ 1 ~

II. Meeting Agenda

Agenda of Annual Meeting of Shareholders

Meeting type: Physical Shareholders’ Meeting

Time: 9:00 a.m. on Tuesday, June 20, 2023

Place: No. 154, Kaiyuan Rd., Tuku Village, Sinying District, Tainan City.

  1. Call Meeting to Order

  2. Chairperson Remarks

  3. Report Items

  4. (1)2022 Business Report

  5. (2)Audit Committee’s Review Report on the 2022 Financial Results

  6. (3)2022 Annual Report on Remuneration of Employees and Directors

  7. (4)Status of 2022 Dividend Distribution

  8. (5)Other Reports

  9. Matters Proposed for Ratification

  10. (1)Ratification of 2022 Business Report and Financial Statements

  11. (2)Ratification of Proposed 2022 Profit Distribution Plan

  12. Matters Proposed for Discussion and Election Resolution

  13. (1)Amendment to the “Rules of Procedure for Shareholders Meetings”

  14. (2)Election of one additional director and one additional independent director.

  15. (3)Release of newly elected Board of Director from non-competition restrictions

  16. Extempore Motions

  17. Adjournments

~ 2 ~

III. Report Items

  • (1) 2022 Business Report

The result of overall operation for Standard Chem. & Pharm. Co., Ltd. and its subsidiaries’ (the Group) were summarized as follows:

  1. Operating Income

  2. The Combined Operating Income for 2022 was NT$5,851 million; representing an increase of 27.1% in comparison with 2021, mainly due to the inclusion of the operating performance of SYN-TECH.

  3. Gross Profit

  4. Due to revenue growth, Gross Profit for 2022 increased by 20.3% in comparison with 2021.

  5. Operating Profit

Due to the increase of Gross Profit and the increase in operating expenses is smaller than the increase in gross profit, the Operating Profit for 2022 increased 27.6% in comparison with 2021.

  1. Non-operating Income and expenses Due to appreciation of the US dollar and profit on exchange , Non-operating Income in 2022 increased 105.4% in comparison with 2021.

In summation from above, Net Income for 2022 was NT$1,154 million; representing a 37.9% increase over Net Income of 2021.

~ 3 ~

  • (2) Audit Committee’s review report on the 2022 financial statements

Audit Committee’s Review Report

To Shareholders:

We have reviewed the Company's 2022 Business Report, Financial Statements, and Earnings Appropriation prepared by the Board of Directors. The standalone and consolidated financial statements were audited by PricewaterhouseCoopers Taiwan, to which they issued an unqualified opinion. Business Report, Financial Statements, and Earnings Appropriation has reviewed the abovementioned reports and found no misstatements. We hereby issue this report in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

2023 Annual Meeting of Shareholders Chairman of the Audit Committee: Lin-Yu, Li

March 14, 2023

~ 4 ~

  • (3) 2022 Annual Report on Remuneration of Employees and Directors.

The resolution was approved by the Board on March 14th, 2023.

  • i. 2022 Annual Employees’ Remuneration is NT$ 9,406,590 the amount recognized is NT$ 9,435,917. The difference of NT$ 29,327 will be recognized as an gain in 2023.

  • ii. 2022 Annual Board’s Remuneration is NT$ 3,010,110, the amounts recognized is NT$3,000,000. The difference NT$ 10,110 will be recognized as an expense in 2023.

iii.The above remunerations are distributed in cash.

  • (4) Status of 2022 Dividend Distribution

The special resolution was approved by the Board on March 14th, 2023.

  • i. Pursuant Article 26-1 of Company’s Article of Incorporation, 2022 distribution of cash dividends will be NT$2.5 per share, the total amount to be distributed will be NT$446,740,223.

  • ii. The distribution of cash dividends shall be based on the stock register record as shown on the distribution record date. It is proposed to distribute NT$2.5 per share, and the total dividend shall be rounded down to nearest NT$1.00, the remaining fraction will be adjusted by the Chairman of the Board, who is fully authorized by Board of Directors.

  • iii. The Chairman will determine the dividend distribution date in order to make adjustment and distribution for each share based on the number of actual shares outstanding on the distribution date.

  • (5) Other Reports

  • i. In accordance with Article 172-1 of the Company Act, the proposals submitted by shareholders shall be listed; no proposal is submitted in this shareholders’ meeting.

  • ii. In accordance with Article 192-1 of the Company Act, the proposed nomination submitted by shareholders shall be listed; no nomination is submitted in this shareholders’ meeting.

~ 5 ~

IV.Matters Proposed for Ratification

1. Proposed by the Board

Proposal:

Ratification of 2022 Business Report and Financial Statements

Explanation:

The 2022 Business Report (please refer to page 11-13) and Financial Statements of SCPC (please refer to page 14-38) have been approved by the Board and examined by the Audit Committee of SCPC.

Resolution:

2. Proposed by the Board

Proposal:

Ratification of 2022 Profit Distribution Plan

Explanation:

Please refer to the 2022 PROFIT DISTRIBUTION TABLE below.

~ 6 ~

Standard Chem. & Pharm. Co., Ltd. PROFIT DISTRIBUTION TABLE Year 2022

Year 2022
(Unit: NT$)
Item Amount
After-tax net profit 815,408,565
Add: Adjusted actuarial losses 26,107,711
Add: Disposal of financial assets at fair value through other
comprehensive income		 5,957,640
Less: Legal reserve (84,747,392)
Less: Special reserve (5,605,665)
Distributable profit from year 2022 757,120,859
Undistributed earnings from previous period 1,110,363,065
Accumulated undistributed earnings 1,867,483,924
Less: Dividend to shareholders-cash (NT$2.5 per share)
(2023/3/14 Board Resolution; Report on Shareholders’
meeting)
(446,740,223)
Undistributed earnings as of the end of the period 1,420,743,701

Note 1: Earning distribution for this year shall be based on the distributable profit from year 2022

Note 2: Actual cash dividend amount per share shall be calculated based on the stock register record shown on the distribution record date

Resolution:

~ 7 ~

V. Matters Proposed for Discussion and Election Resolution

1. Proposed by the Board

Proposal:

Amendment to the “Rules of Procedure for Shareholders Meetings ”

Explanation:

In compliance with regulations, it is proposed to amend the Operational procedure of Rules of Procedure for Shareholders Meetings. Please refer to Attachment 4 for comparison table for before and after revision.

Resolution:

2. Proposed by the Board

Proposal:

Election of one additional director and one additional independent director.

Explanation:

  • a. In response to the Chairman and the General Manager being the same person in our company, in accordance with Article 4 of the "Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers" it is proposed to hold an election for one director and one independent director position at 2023 shareholders' meeting.

  • b. The Directors will be elected by adopting candidates’ nomination system pursuant to regulations. The nominated candidates education and professional qualifications, experience and relevant information are attached hereto as Attachment 3 on page 39.

  • c. The tenure of newly elected director and independent director serve the same term as the 19th Board of Directors of the Company, commencing from take office to August 23, 2024.

Resolution:

~8~

3. Proposed by the Board

Proposal:

Release of newly elected Board of Director from non-competition restrictions

Explanation:

  • a. The proposal is conducted pursuant to the Article 209, paragraph 1 of the Company Act.

  • b. Wen-Jang, Lin, the director of SCPC might operate other businesses with similar business scope as SCPC and act as SCPC’s Director simultaneously. Without impeding SCPC’s interest and benefit, it is proposed to release the Director from non-complete clause restrictions.

  • c. The Director’s business activities are listed as follow:

Title name Other business and Title
Director Fan Dao Nan Foundation
Representative
Wen-Jang, Lin		 Director ,Fan Dao Nan Foundation

Resolution:

~9~

VI.Extempore Motions

VII. Adjournments

~10~

Attachments

Attachment 1:

Standard Chem. & Pharm. Co., Ltd. 2022 Business Report

  1. Company Business Direction

Standard Chem. and Pharm. Co., Ltd. (SCPC) has focused its operations on the development and manufacturing of pharmaceuticals. Through vertical integration of its corporate group and development of niche and brand differentiated specialty products, SCPC seeks to build a global marketing network. To establish itself as a world-class pharmaceutical manufacturer, SCPC strives to expand its presence in the United States, Japan, China, and Southeast Asian markets. SCPC’s principal objectives for the year 2021 were:

  • a. Continue to expand R&D investments

  • b. Develop core technologies

  • c. Actively expand international operations

  • d. Strengthen internal management

  • Implementation Overview

Throughout 2022, SCPC continued to invest in drug development, and the R&D expenses for the year was NT$148 million, which was about 5% of total revenue. To expand international business, besides markets in Japan, China, and Southeast Asian countries, SCPC has submitted ANDAs to the US-FDA, bringing our generic formulations to the next stage of the international pharmaceutical market. Strengthening of internal management and operations was evident in proposal improvement, cost reductions, and process improvements of various ongoing projects.

  1. Results of Business Plan Implementation

SCPC’s Net Sales for 2022 were NT$2.8billion, which was a 2.3% decrease over 2021. Sales from pharmaceuticals for human-use (NT$2.5 billion) represented the largest contribution to overall Net Sales at 90.8%. Sales of healthy food (NT$146 million) contributed 5.3% overall. Sales from Active Pharmaceutical Ingredients (NT$105 million) contributed 3.8% overall. Other products, including veterinarian pharmaceuticals, had sales of NT$4 million contributing 0.1% overall.

Due to decrease of Sales, Gross Profit for2022 decrease by 3.4% in comparison with 2021 ； Due to the decrease of Gross Profit, but not substantially, the Operating Profit for 2022 decreased 5.9% in comparison with 2021.

For non-operating income and expense, the profit increased NT$143 million because of the increase on long-term equity investment gain and profit on exchange.

In summation of the above, Net Income After Tax (NIAT) for 2022 was NT$815 million; representing

~11~

a 15.4% increase over NIAT of 2021.

  1. Operation Summary

Unit: NTD thousand

Operation Summary Unit: NTD thousand
Items Amount
Net Sales 2,772,204
Gross Profit 1,319,113
Income from Operations 587,565
Non-operating Income/Expenses 340,654
Income Before Income Tax 928,219
Net Income 815,408
Basic Earnings per shares (NTD) 4.56
  1. Budget Implementation

Unit: NTD thousand

Items 2022 Budget 2022 Actual Achievement%




Net sales 2,696,090
2,772,204
102.8
Costs 1,431,557
1,453,091
101.5
Gross Profit 1,264,533
1,319,113
104.3
Operating exp. 730,175
731,548
100.2
Income from Operations 534,358
587,565
110.0
Pre-tax income 806,184
928,219
115.1
  1. Profitability Analysis
Profitability Analysis
Items Ratio(%)
Return on Total Assets 13.15
Return on Shareholders’ Equity 17.93
Operating income/paid-in capital ratio 32.88
Gain before tax/paid-in capital ratio 51.94
Net Margin 29.41
Basic Earnings per share (NTD) 4.56

~12~

  1. Research and Development

  2. SCPC’s R&D expenses for 2022 were NT$148 million. Most of SCPC’s research techniques were

  3. self-developed, and all of SCPC’s new products, including both domestic and international development, were applied for drug licenses. Development results are listed below:

  4. A. Domestic pharmaceutical preparations: 5 applications were submitted and 5 certificates were approved.

  5. B. International pharmaceutical preparations: 11 applications were submitted and 13 certificates were approved.

  6. C. Domestic API: 0 application was submitted for approval.

  7. D. Food: 9 applications were submitted and 9 certificates were approved.

  8. E. New products: 4 new products were launched.

  9. F. BA/BE studies: 1 applications were submitted and 2 applications received passing result.

  10. SCPC continues its commitment to investment in R&D for new product development.

~13~

Attachment 2:

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of STANDARD CHEM. & PHARM. CO., LTD.

Opinion

We have audited the accompanying parent company only balance sheets of STANDARD CHEM. & PHARM. CO., LTD. (the “Company”) as of December 31, 2022 and 2021, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to Other matter section), the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. 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. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis 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 Company’s 2022 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters of the Company’s 2022 parent company only financial statements are as follows:

Valuation of inventories

Description

Refer to Note 4(10) for accounting policies on the valuation of inventories, Note 5(2) for the uncertainty of

~14~

significant accounting estimations and assumptions relating to valuation of inventories, and Note 6(6) for the details of allowance for inventory valuation loss. As of December 31, 2022, the carrying amount of inventories and allowance for inventory valuation loss are $575,027 thousand and $12,629 thousand, respectively.

The Company is primarily engaged in the manufacture and sales of human medicine. Due to the influence of market demand and short expiration date of medicines, there is a risk of market price decline and obsolescence of inventories. The Company measures inventories at the lower of cost and net realisable value. The net realisable values of obsolete inventories are determined based on the historical information on the selling price.

Given that the valuation of inventories is subject to uncertainty of assumptions and the accounting estimations will have significant influence on the inventory values, we considered the valuation of inventories a key audit matter.

How our audit addressed the matter

We performed the following key audit procedures on the above key audit matter:

  1. Assessed the reasonableness of policies on allowance for inventory valuation loss.

  2. Assessed the effectiveness of the management’s inventory control, based on our understanding of the operations of the warehouse management, inspected the annual inventory taking plan and performed our observation.

  3. Tested whether the basis of inventory aging used in calculating the net realisable value of inventory is consistent with the Company’s policy.

  4. Validated the net realisable value of inventories and the adequacy of allowance for inventory valuation loss.

~15~

Existence of domestic sales revenue from human medicines

Description

Refer to Note 4(27) for accounting policies on revenue recognition. Revenue is recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

The Company is primarily engaged in the manufacturing and sales of human medicines. The Company’s sales is mainly domestic-based and its customers are numerous, including hospitals, clinics and pharmacies all over the country. Since the sales transactions are numerous and would require a longer period for verification, we considered the existence of domestic sales revenue from human medicines a key audit matter.

How our audit addressed the matter

We performed the following key audit procedures for the above matter:

  1. Assessed the consistency and effectiveness of internal control relevant to sales recognition.

  2. Assessed basic information of the major customers, including the details of the chairman and major shareholders, registered address, principal place of business, capital and main business activities, etc.

  3. Selected samples of sales transactions and checked against related supporting documentation, including unit prices, quantities, reasonableness of sales allowance recognition, waybill and subsequent cash collection.

Other matter – Reference to the audits of other auditors

We did not audit the financial statements of certain investments accounted for under equity method which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these associates, is based solely on the reports of the other auditors. The balance of these investments accounted for under equity method amounted to $235,502 thousand and $205,362 thousand, constituting 3.62% and 3.43% of total assets as of December 31, 2022 and 2021, respectively, and the comprehensive income and loss recognised from subsidiaries, associates and joint ventures accounted for under equity method amounted to $33,360 thousand and ($11,473) thousand, constituting 3.96% and (1.65%) of total comprehensive income for the years then ended, respectively.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of

~16~

parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ responsibilities for the audit of the parent company only financial statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

  1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

  3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are

~17~

inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

  1. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  2. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

~18~

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

Tien, Chung-Yu Independent Accountants Yeh, Fang-Ting

PricewaterhouseCoopers, Taiwan Republic of China March 14, 2023

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~19~

STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Assets Notes
6(1)
6(4), 7 and 12
6(4), 7 and 12
6(5) and 7
5(2), 6(5)(6)
5(2) and 6(2)
5(2) and 6(3)
6(3)(7)(27) and 7
6(5)(7)(8)
6(9) and 7
6(8)(10)
6(11)
6(25)
6(8)		 December 31,2022
AMOUNT
%
$
858,252
13
100,411
2
533,695
8
72,290
1
562,398
9
47,159
1
24,973
-
2,199,178
34
10,561
-
248,366
4
2,820,888
43
1,003,055
16
15,711
-
62,987
1
6,374
-
79,609
1
27,128
1
25,685
-
5,519
-
4,305,883
66
$
6,505,061
100		 December 31,2021 December 31,2021
AMOUNT
$
858,252
100,411
533,695
72,290
562,398
47,159
24,973
2,199,178
10,561
248,366
2,820,888
1,003,055
15,711
62,987
6,374
79,609
27,128
25,685
5,519
4,305,883
$
6,505,061		 AMOUNT
$
669,875
101,981
538,485
191,470
530,284
37,331
796
2,070,222
9,849
225,274
2,413,208
966,414
17,746
46,207
6,625
96,408
92,585
37,632
6,932
3,918,880
$
5,989,102		 %
Current assets
1100
Cash and cash equivalents
1150
Notes receivable, net
1170
Accounts receivable, net
1200
Other receivables
130X
Inventories
1410
Prepayments
1479
Other current assets
11XX
Total current assets
Non-current assets
1510
Financial assets at fair value through
profit or loss - non-current
1517
Financial assets at fair value through
other comprehensive income -
non-current
1550
Investments accounted for under
equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Investment property, net
1780
Intangible assets
1840
Deferred income tax assets
1915
Prepayments for equipment
1920
Guarantee deposits paid
1990
Other non-current assets
15XX
Total non-current assets
1XXX
TOTAL ASSETS		 11
2
9
3
9
1
-
35
-
4
40
16
-
1
-
2
1
1
-
65
100

(Continued)

~20~

STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity December 31,2022
December 31,2021
Notes
AMOUNT
%
AMOUNT
%
6(12)
$
870,000
14
$
710,500
12
6(18)
35,430
1
40,569
1
141,490
2
110,969
2
7
142,739
2
176,821
3
248,593
4
249,178
4
6(25)
83,846
1
81,129
1
6(9) and 7
4,444
-
3,998
-
942
-
1,390
-
1,527,484
24
1,374,554
23
6(25)
64,893
1
61,992
1
6(9) and 7
11,540
-
14,111
-
6(13)
147,770
2
196,334
3
200
-
235
-
224,403
3
272,672
4
1,751,887
27
1,647,226
27
6(14)
1,786,961
28
1,786,961
30
6(7)(15)(27)
220,484
3
204,313
3
6(3)(16)(17)
793,498
12
709,879
12
110,329
2
-
-
1,957,837
30
1,751,052
29
6(3)(7)(17)
(
115,935) (
2) (
110,329) (
1 )
4,753,174
73
4,341,876
73
9
$
6,505,061
100
$
5,989,102
100
Current liabilities
2100
Short-term borrowings
2130
Contract liabilities - current
2150
Notes payable
2170
Accounts payable
2200
Other payables
2230
Current income tax liabilities
2280
Lease liabilities - current
2310
Receipts in advance
21XX
Total current liabilities
Non-current liabilities
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2640
Net defined benefit liability -
non-current
2645
Guarantee deposits received
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Common stock
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
3400
Other equity interest
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
3X2X
TOTAL LIABILITIES AND EQUITY

~21~

STANDARD CHEM. & PHARM. CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items For theyears ended December 31,
2022
2021
Notes
AMOUNT
%
AMOUNT
%
6(18) and 7
$
2,772,204
100
$
2,837,930
100
6(6)(8)(11)(13)(23)
(24) and 7
(
1,453,091) (
53) (
1,471,689) (
52)
1,319,113
47
1,366,241
48
6(8)(11)(13)(23)(24
) and 7
(
417,752) (
15) (
416,241) (
15)
(
166,223) (
6) (
157,806) (
5)
(
148,410) (
5) (
167,402) (
6)
12
837
- (
376)
-
(
731,548) (
26) (
741,825) (
26)
587,565
21
624,416
22
6(19)
11,232
-
2,804
-
6(3)(5)(10)(20) and
7
56,220
2
166,696
6
6(2)(5)(6)(9)(21)
and 12
75,984
3 (
88,579) (
3)
6(8)(9)(22) and 7
(
7,821)
- (
3,473)
-
6(7)
205,039
7
120,622
4
340,654
12
198,070
7
928,219
33
822,486
29
6(25)
(
112,811) (
4) (
115,752) (
4)
$
815,408
29
$
706,734
25
6(13)
$
27,915
1
$
18,459
1
6(3)(17)
(
14,235) (
1) (
14,673) (
1)
6(7)(17)
3,870
- (
6,084)
-
6(25)
(
5,583)
- (
3,692)
-
6(7)(17)
14,492
1 (
4,186)
-
$
26,459
1 ($
10,176)
-
$
841,867
30
$
696,558
25
6(26)
$
4.56
$
3.95
$
4.56
$
3.95
4000
Operating revenue
5000
Operating costs
5900
Net operating margin
Operating expenses
6100
Selling expenses
6200
General and administrative
expenses
6300
Research and development
expenses
6450
Expected credit gain (loss)
6000
Total operating expenses
6900
Operating profit
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of profit of subsidiaries,
aassociates and joint ventures
accounted for under equity method
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year
Other comprehensive income (loss)
Components of other comprehensive
income (loss) that will not be
reclassified to profit or loss
8311
Remeasurement of defined benefit
plans
8316
Unrealised losses from investments
in equity instruments measured at
fair value through other
comprehensive income
8330
Share of other comprehensive
income of associates and joint
ventures accounted for under equity
method
8349
Income tax related to components
of other comprehensive loss
Components of other comprehensive
income (loss) that will be reclassified
to profit or loss
8361
Financial statesments translation
differences of foreign operations
8300
Total other comprehensive income
(loss) for the year
8500
Total comprehensive income for the
year
Earnings per share (in dollars)
9750
Basic
9850
Piluted

~22~

STANDARD CHEM. & PHARM. CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the year ended December 31,2021
Balance at January 1, 2021
Profit for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss) for the year
Difference between proceeds from acquisition or disposal of
subsidiaries and book value
Adjustment to non-proportional acquisition of associates and
joint ventures accounted for under equity method
Overdue cash dividends payable
Disposal of financial assets at fair value through other
comprehensive income
Appropriations of 2020 earnings
Legal reserve
Cash dividends
Balance at December 31, 2021
For the year ended December 31,2022
Balance at January 1, 2022
Profit for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss) for the year
Difference between proceeds from acquisition or disposal of
subsidiaries and book value
Adjustment to non-proportional acquisition of associates and
joint ventures accounted for under equity method
Overdue cash dividends payable
Disposal of financial assets at fair value through other
comprehensive income
Appropriations of 2021 earnings
Legal reserve
Special reserve
Cash dividends
Effect of organisational restructuring
Balance at December 31, 2022		 Notes Common stock Capital Surplus Capital Surplus Capital Surplus Retained Earnings Retained Earnings Other Equity Interest Other Equity Interest Other Equity Interest Total equity
Additional paid-in
capital		 Difference between
the price for
acquisition or
disposal of
subsidiaries and
carrying amount		 Change in net equity
of associates and
joint ventures
accounted for under
equity method		 Others Legal reserve Special reserve Unappropriated
retained earnings		 Financial
statements
translation
differences of
foreign operations
Unrealised gains or
losses from financial
assets measured at
fair value through
other comprehensive
income
6(17)
6(7)(27)
6(7)(15)
6(15)
6(3)(7)(17)
6(16)
6(17)
6(7)(27)

6(7)(15)
6(15)
6(3)(17)
6(16)
6(7)(15)		 $
1,786,961
-
-
-
-
-
-
-
-
-
$
1,786,961
$
1,786,961
-
-
-
-
-
-
-
-
-
-
-
$
1,786,961		 $
143,353
-
-
-
-
-
-
-
-
-
$
143,353
$
143,353
-
-
-
-
-
-
-
-
-
-
8,735
$
152,088



$
57,454
-
-
-
(
77 )
-
-
-
-
-
$
57,377
$
57,377
-
-
-
3,521
-
-
-
-
-
-
-
$
60,898		 $
2,273
-
-
-
-
1,068
-
-
-
-
$
3,341
$
3,341
-
-
-
-
3,744
-
-
-
-
-
-
$
7,085		 $
194
-
-
-
-
-
48
-
-
-
$
242
$
242
-
-
-
-
-
171
-
-
-
-
-
$
413		 $ 658,657
-
-
-
-
-
-
-
51,222
-
$ 709,879
$ 709,879
-
-
-
-
-
-
-
83,619
-
-
-
$ 793,498


$
-
-
-
-
-
-
-
-
-
-
$
-
$
-
-
-
-
-
-
-
-
-
110,329
-
-
$
110,329		 $
1,287,735
706,734
15,100
721,834
-
-
-
114,358
(
51,222 )
(
321,653 )
$
1,751,052
$
1,751,052
815,408
26,107
841,515
-
-
-
5,958
(
83,619 )
(
110,329 )
(
446,740 )
-
$
1,957,837









($
16,788 )
-
(
4,186 )
(
4,186 )
-
-
-
-
-
-
($
20,974 )
($
20,974 )
-
14,492
14,492
-
-
-
-
-
-
-
-
($
6,482 )








$
46,093
-
(
21,090 )
(
21,090 )
-
-
-
(
114,358 )
-
-
($
89,355 )
($
89,355 )
-
(
14,140 )
(
14,140 )
-
-
-
(
5,958 )
-
-
-
-
($
109,453 )











$
3,965,932
706,734
(
10,176 )
696,558
(
77 )
1,068
48
-
-
(
321,653 )
$
4,341,876
$
4,341,876
815,408
26,459
841,867
3,521
3,744
171
-
-
-
(
446,740 )
8,735
$
4,753,174

~23~

STANDARD CHEM. & PHARM. CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Net gain on financial assets at fair value through
profit and loss

Expected credit (gains) losses

(Reverse of allowance for) provision for loss on
inventory market price decline

Fire loss - inventories

Share of profit of subsidiaries, associates and
joint ventures accounted for under equity method

Depreciation

Net loss (gain) on disposal of property, plant and
equipment

Gain from lease modification

Net loss on disposal of other non-current assets
Amortisation

Dividend income

Interest income

Interest expenses

Changes in operating assets and liabilities
Changes in operating assets
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Receipts in advance
Net defined benefit liability - non-current
Cash inflow generated from operations
Dividends received
Interest received
Interest paid
Income tax paid
Net cash flows from operating activities		 For theyears ended December31,
Notes
2022
2021
$
928,219 $
822,486
6(2)(21)
(
712 ) (
108 )
12
(
837 )
376
6(6)
(
3,807 )
7,403
6(6)
-
4,608
6(7)
(
205,039 ) (
120,622 )
6(8)(9)(10)(23)
95,641
101,113
6(21)
1,113 (
16 )
6(9)(21)
(
8 )
-
6(21)
-
5,872
6(23)
9,605
17,607
6(3)(20)
(
9,604 ) (
17,943 )
6(19)
(
11,232 ) (
2,804 )
6(22)
7,821
3,473
843 (
13,399 )
(
12,823 ) (
13,621 )
83,216 (
67,287 )
(
58,097 )
6,014
(
10,577 )
1,879
(
24,177 )
436
(
5,139 ) (
52,670 )
39,333 (
4,074 )
(
22,229 )
40,630
(
10,040 ) (
19,296 )
(
448 )
872
(
20,649 ) (
11,591 )
770,373
689,338
83,670
62,223
8,832
3,276
(
7,540 ) (
3,351 )
(
95,977 ) (
106,753 )
759,358
644,733

(Continued)

~24~

STANDARD CHEM. & PHARM. CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in financial assets at amortised cost -
current
Acquisition of financial assets at fair value through
other comprehensive income - non-current
Proceeds from disposal of financial assets at fair
value through other comprehensive income -
non-current

Prepayment for investments accounted for under
equity method
Acquisition of investments accounted for under
equity method

Proceeds from disposal of investments accounted for
under equity method

Cash paid for acquisition of property, plant and
equipment

Interest paid for acquisition of property, plant and
equipment

Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets

Increase in prepayment for equipment
Decrease (increase) in guarantee deposits paid
Proceeds from disposals of other non-current assets
Increase in other non-current assets
Cash received from segment spin-off

Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings

Decrease in short-term borrowings

Payments of lease liabilities

(Decrease) increase in guarantee deposit received

Overdue cash dividends payable

Payment of cash dividends

Net cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year
 For theyears ended December31,
Notes
2022
2021
$
- $
284,800
(
60,632 ) (
120,752 )
6(3)
23,305
18,921
- (
5,578 )
6(28)
(
51,563 ) (
315,512 )
6(7)
9,156
-
6(28)
(
159,723 ) (
69,304 )
6(8)(22)(28)
(
638 ) (
369 )
722
63
6(11)
(
3,564 ) (
4,798 )
(
88,852 ) (
92,611 )
11,947 (
16,665 )
6(28)
38,364
-
(
4,530 ) (
9,845 )
6(7)
6,973
-
(
279,035 ) (
331,650 )
6(29)
497,500
360,500
6(29)
(
338,000 ) (
140,000 )
6(29)
(
4,842 ) (
4,470 )
6(29)
(
35 )
35
6(15)
171
48
6(16)
(
446,740 ) (
321,653 )
(
291,946 ) (
105,540 )
188,377
207,543
6(1)
669,875
462,332
6(1)
$
858,252 $
669,875

~25~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of STANDARD CHEM. & PHARM. CO., LTD.

Opinion

We have audited the accompanying consolidated balance sheets of STANDARD CHEM. & PHARM. CO., LTD. and its subsidiaries (collectively referred herein as the “Group”) as of December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and reports of other auditors (refer to Other matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis 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 Group’s 2022 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters of the Group’s 2022 consolidated financial statements are stated as follows:

~26~

Valuation of inventories

Description

Refer to Note 4(11) for accounting policies on the valuation of inventories, Note 5(2) for the uncertainty of significant accounting estimations and assumptions relating to valuation of inventories, and Note 6(6) for the details of allowance for inventory valuation loss. As of December 31, 2022, the carrying amount of inventories and allowance for inventory valuation loss are $1,448,846 thousand and $62,363 thousand, respectively.

The Group is primarily engaged in the manufacture and sales of human medicine and dietary supplement. Due to the influence of market demand and short expiration date of medicines, there is a risk of market price decline and obsolescence of inventories. The Group measures inventories at the lower of cost and net realisable value. The net realisable values of obsolete inventories are determined based on the historical information on the selling price.

Given that the valuation of inventories is subject to uncertainty of assumptions and the accounting estimations will have significant influence on the inventory values, we considered the valuation of inventories a key audit matter.

How our audit addressed the matter

We performed the following key audit procedures on the above key audit matter:

  1. Assessed the reasonableness of policies on allowance for inventory valuation loss.

  2. Assessed the effectiveness of the management’s inventory control, based on our understanding of the operations of the warehouse management, inspected the annual inventory taking plan and performed our observation.

  3. Tested whether the basis of inventory aging used in calculating the net realisable value of inventory is consistent with the Group’s policy.

  4. Validated the net realisable value of inventories and the adequacy of allowance for inventory valuation loss.

~27~

Existence of domestic sales revenue from human medicines and dietary supplements

Description

Refer to Note 4(27) for accounting policies on revenue recognition. Revenue is recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

The Group is primarily engaged in the manufacturing and sales of human medicines and dietary supplements. The Group’s sales is mainly domestic-based and its customers are numerous, including hospitals, clinics, pharmacies, food and drug administrations all over the country. Since the sales transactions are numerous and would require a longer period for verification, we considered the existence of domestic sales revenue from human medicines and dietary supplements a key audit matter.

How our audit addressed the matter

We performed the following key audit procedures for the above matter:

  1. Assessed the consistency and effectiveness of internal control relevant to sales recognition.

  2. Assessed basic information of the major customers, including the details of the chairman and major shareholders, registered address, principal place of business, capital and main business activities, etc.

  3. Selected samples of sales transactions and checked against related supporting documentation, including unit prices, quantities, reasonableness of sales allowance recognition, waybill and subsequent cash collection.

Other matter –Reference to the audits of other auditors

We did not audit the financial statements of certain investments accounted for under equity method which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these associates, is based solely on the reports of the other auditors. The balance of these investments accounted fot under equity method amounted to $235,502 thousand and $205,362 thousand, constituting 2.15% and 2.03% of consolidated total assets as of December 31, 2022 and 2021, respectively, and the share of profit (loss) of associates and joint ventures accounted for under equity method amounted to $33,360 thousand and ($11,473) thousand, constituting 2.81% and (1.39%) of consolidated total comprehensive income for the years then ended, respectively.

Other matter – Parent company only financial reports

We have audited and expressed an unmodified opinion on the parent company only financial statements of STANDARD CHEM. & PHARM. CO., LTD. as of and for the years ended December 31, 2022 and 2021.

~28~

Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

Those charged with governance, including audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated financial statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

  1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

~29~

  1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  2. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

  3. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  4. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

~30~

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

Tien, Chung-Yu Independent Accountants Yeh, Fang-Ting

PricewaterhouseCoopers, Taiwan Republic of China March 14, 2023

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~31~

STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Assets Notes
6(1)
5(2) and 6(2)
6(1) and 8
6(4), 7 and 12
6(4), 7 and 12
6(5) and 7
6(29)
5(2), 6(5)(6)(9)
5(2) and 6(2)
5(2) and 6(3)
6(7)(8) and 7
6(5)(7)(9), 7 and 8
6(10) and 7
6(11)(12)(32)
6(29)
6(9)
6(17)		 December 31,2022
AMOUNT
%
$
2,259,381
21
176,148
2
163,510
1
276,995
2
985,985
9
216,601
2
67
-
1,386,483
13
95,208
1
29,115
-
5,589,493
51
15,581
-
251,532
2
577,338
5
3,658,581
33
293,700
3
224,986
2
128,373
1
156,517
2
32,002
-
40,156
1
5,378,766
49
$
10,968,259
100		 December 31,2021 December 31,2021
AMOUNT
$
2,259,381
176,148
163,510
276,995
985,985
216,601
67
1,386,483
95,208
29,115
5,589,493
15,581
251,532
577,338
3,658,581
293,700
224,986
128,373
156,517
32,002
40,156
5,378,766
$
10,968,259		 AMOUNT
$
2,564,395
134,907
289,932
277,426
880,823
331,809
13
1,217,528
86,621
797
5,784,251
15,152
228,345
525,839
2,658,198
297,147
223,618
141,445
139,240
42,710
39,094
4,310,788
$
10,095,039		 %
Current assets
1100
Cash and cash equivalents
1110
Financial assets at fair value through
profit or loss - current
1136
Financial assets at amortised cost -
current
1150
Notes receivable, net
1170
Accounts receivable, net
1200
Other receivables
1220
Current income tax assets
130X
Inventories
1410
Prepayments
1479
Other current assets
11XX
Total current assets
Non-current assets
1510
Financial assets at fair value through
profit or loss - non-current
1517
Financial assets at fair value through
other comprehensive income -
non-current
1550
Investments accounted for under
equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1780
Intangible assets
1840
Deferred income tax assets
1915
Prepayments for equipment
1920
Guarantee deposits paid
1990
Other non-current assets
15XX
Total non-current assets
1XXX
TOTAL ASSETS		 25
1
3
3
9
3
-
12
1
-
57
-
2
5
26
3
2
2
1
1
1
43
100

(Continued)

~32~

STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity December 31,2022
December 31,2021
Notes
AMOUNT
%
AMOUNT
%
6(13) and 8
$
1,350,003
12
$
1,067,989
11
6(14)
-
-
290,000
3
6(22)
83,997
1
79,115
1
7
457,858
4
301,940
3
7
228,512
2
322,406
3
6(15)
515,552
5
454,443
4
6(29)
222,038
2
164,066
2
6(10) and 7
21,205
-
20,351
-
667
-
1,013
-
6(22)
-
-
14,774
-
2,879,832
26
2,716,097
27
6(16) and 8
182,000
2
50,000
1
6(29)
84,666
1
83,845
1
6(10) and 7
236,696
2
239,637
2
6(17)
149,053
1
205,314
2
411
-
532
-
652,826
6
579,328
6
3,532,658
32
3,295,425
33
6(18)
1,786,961
16
1,786,961
18
6(8)(19)
220,484
2
204,313
2
6(3)(20)(21)
793,498
7
709,879
7
110,329
1
-
-
1,957,837
18
1,751,052
17
6(3)(8)(21)
(
115,935) (
1) (
110,329) (
1 )
4,753,174
43
4,341,876
43
4(3), 6(19)(31)(32)
2,682,427
25
2,457,738
24
7,435,601
68
6,799,614
67
9
$
10,968,259
100
$
10,095,039
100
Current liabilities
2100
Short-term borrowings
2110
Short-term notes and bills payable
2130
Contract liabilities - current
2150
Notes payable
2170
Accounts payable
2200
Other payables
2230
Current income tax liabilities
2280
Lease liabilities - current
2310
Receipts in advance
2365
Current refund liabilities
21XX
Total current liabilities
Non-current liabilities
2540
Long-term borrowings
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2640
Net defined benefit liability -
non-current
2645
Guarantee deposits received
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity attributable to owners of parent
Share capital
3110
Common stock
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
3400
Other equity interest
31XX
Equity attributable to owners of the
parent
36XX
Non-controlling interest
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
3X2X
TOTAL LIABILITIES AND EQUITY

~33~

STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items For theyears ended December 31,
2022
2021
Notes
AMOUNT
%
AMOUNT
%
6(22) and 7
$
5,851,368
100
$
4,604,082
100
6(6)(10)(11)(17)(
27)(28) and 7
(
3,363,755) (
58) (
2,536,209) (
55)
2,487,613
42
2,067,873
45
6(9)(10)(11)(17)(
27)(28) and 7
(
746,173) (
13) (
675,925) (
15)
(
353,329) (
6) (
272,547) (
6)
(
251,878) (
4) (
241,788) (
5)
12
(
17,812)
- (
931)
-
(
1,369,192) (
23) (
1,191,191) (
26)
1,118,421
19
876,682
19
6(23)
29,594
-
4,247
-
6(3)(5)(24) and 7
51,615
1
170,182
4
6(2)(5)(6)(7)(10)(
12)(25), 7 and 12
157,712
3 (
23,954) (
1)
6(9)(10)(26) and
7
(
18,775)
- (
7,250)
-
6(7)(8)
61,366
1 (
6,157)
-
281,512
5
137,068
3
1,399,933
24
1,013,750
22
6(29)
(
246,313) (
4) (
176,948) (
4)
$
1,153,620
20
$
836,802
18
4000
Operating revenue
5000
Operating costs
5900
Net operating margin
Operating expenses
6100
Selling expenses
6200
General and administrative
expenses
6300
Research and development
expenses
6450
Expected credit losses
6000
Total operating expenses
6900
Operating profit
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Share of profit (loss) of
associates and joint ventures
accounted for under equity
method
7000
Total non-operating income
and expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year

(Continued)

~34~

STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items For theyears ended December 31,
2022
2021
Notes
AMOUNT
%
AMOUNT
6(17)
$
37,658
-
$
19,657
6(3)(21)
(
14,140)
- (
21,903)
6(8)
1,047
-
73
6(29)
(
7,532)
- (
3,931)
6(21)
15,785
- (
1,283)
6(8)
225
- (
2,661)
$
33,043
- ($
10,048)
$
1,186,663
20
$
826,754
$
815,408
14
$
706,734
338,212
6
130,068
$
1,153,620
20
$
836,802
$
841,867
14
$
696,558
344,796
6
130,196
$
1,186,663
20
$
826,754
6(30)
$
4.56
$
$
4.56
$		 For theyears ended December 31, For theyears ended December 31, For theyears ended December 31,
2022 2021
%
AMOUNT
-
$
19,657

- (
21,903)
-
73

- (
3,931)
- (
1,283)
- (
2,661)
- ($
10,048)
20
$
826,754
14
$
706,734
6
130,068
20
$
836,802
14
$
696,558
6
130,196
20
$
826,754
4.56
$
4.56
$		 2021
%
Other comprehensive income
(loss)
Components of other
comprehensive income (loss) that
will not be reclassified to profit or
loss
8311
Remeasurement of defined
benefit plans
8316
Unrealised losses from
investments in equity
instruments measured at fair
value through other
comprehensive income
8320
Share of other comprehensive
income of associates and joint
ventures accounted for under
equity method
8349
Income tax related to
components of other
comprehensive income
Components of other
comprehensive income that will
be reclassified to profit or loss
8361
Financial statements translation
differences of foreign operations
8370
Share of other comprehensive
income (loss) of associates and
joint ventures accounted for
under equity method
8300
Total other comprehensive
income (loss) for the year
8500
Total comprehensive income for
the year
Profit attributable to:
8610
Owners of the parent
8620
Non-controlling interest
Total comprehensive income
attributable to:
8710
Owners of the parent
8720
Non-controlling interest
Earnings per share (in dollars)
9750
Basic
9850
Diluted		 -

-
-

-

-

-

-
18
15
3
18
15
3
18
3.95
$ $ 3.95

~35~

STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the year ended December 31, 2021
Balance at January 1, 2021
Profit for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss) for the year
Difference between proceeds from acquisition or
disposal of subsidiaries and book value
Adjustment to non-proportional acquisition of
associates and joint ventures accounted for under
equity method
Overdue cash dividends payable
Disposal of financial assets at fair value through
other comprehensive income
Appropriations of 2020 earnings:
Legal reserve
Cash dividends
Effect on business combinations
Change in non-controlling interest
Balance at December 31, 2021
For the year ended December 31, 2022
Balance at January 1, 2022
Profit for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss) for the year
Difference between proceeds from acquisition or
disposal of subsidiaries and book value
Adjustment to non-proportional acquisition of
associates and joint ventures accounted for under
equity method
Overdue cash dividends payable
Disposal of financial assets at fair value through
other comprehensive income
Appropriations of 2021 earnings:
Legal reserve
Special reserve
Cash dividends
Effect of organisational restructuring
Effect on business combinations
Change in non-controlling interest
Balance at December 31, 2022		 Notes
6(21)
6(31)
6(8)(19)
6(19)
6(3)(21)
6(20)
6(32)
6(21)
6(31)
6(8)(19)
6(19)
6(3)(21)
6(20)
6(20)
6(19)
6(32)		 Equity attri butable to owners of the parent Non-controlling
interest
$
939,903
130,068

128
130,196
(
185)
1,219
-
-
-

-
1,437,179
(
50,574)
$ 2,457,738
$ 2,457,738
338,212
6,584
344,796
(
305)
2,735
52
-
-
-

-
(
8,735)
6,199
(
120,053)
$ 2,682,427		 Total equity
Common stock Capital S urplus Others Retained Earnings Unappropriated
retained earnings		 Other Equity Interest Total
Additional paid-in
capital		 Difference
between the price
for acquisition or
disposal of
subsidiaries and
carrying amount
$
57,454
-
-
-
(
77)
-
-
-
-
-
-
-
$
57,377
$
57,377
-
-
-
3,521
-
-
-
-
-
-
-
-
-
$
60,898		 Change in net
equity of
associates and
joint ventures
accounted for
under equity
method		 Legal reserve
$
658,657
-
-
-
-
-
-
-
51,222
-
-
-
$
709,879
$
709,879
-
-
-
-
-
-
-
83,619
-
-
-
-
-
$
793,498		 Special reserve Financial
statements
translation
differences of
foreign operations
( $
16,788)
-
(
4,186)
(
4,186)
-
-
-
-

-

-
-
-
( $
20,974)
( $
20,974)
-
14,492
14,492
-
-
-
-

-

-

-
-
-
-
( $
6,482)		 Unrealised gains
or losses from
financial assets
measured at fair
value through
other
comprehensive
income
$ 1,786,961
-
-
-
-
-
-
-
-
-
-
-
$ 1,786,961
$ 1,786,961
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 1,786,961		 $
143,353
-
-
-
-
-
-
-
-
-
-
-
$
143,353
$
143,353
-
-
-
-
-
-
-
-
-
-
8,735
-
-
$
152,088		 $
2,273
-
-
-
-
1,068
-
-
-
-
-
-
$
3,341
$
3,341
-
-
-
-
3,744
-
-
-
-
-
-
-
-
$
7,085


























$
194
-
-
-
-
-
48
-
-
-
-
-
$
242

$
242
-
-
-
-
-
171
-
-
-
-
-
-
-
$
413		 $
-
-
-
-
-
-
-
-
-
-
-
-
$
-
$
-
-
-
-
-
-
-
-
-
110,329
-
-
-
-
$
110,329


























$ 1,287,735

706,734
15,100

721,834

-
-
-
114,358
(
51,222)
(
321,653)
-
-
$ 1,751,052

$ 1,751,052

815,408
26,107
841,515
-
-
-
5,958
(
83,619)
(
110,329)
(
446,740)
-
-
-
$ 1,957,837
 $
46,093
-
(
21,090)
(
21,090)
-
-
-
(
114,358)
-
-
-
-
($
89,355)
($
89,355)
-
(
14,140)
(
14,140)
-
-
-
(
5,958)
-
-
-
-
-
-
($
109,453)


























$ 3,965,932
706,734
(
10,176)
696,558
(
77)
1,068
48
-
-
(
321,653)
-
-
$ 4,341,876
$ 4,341,876
815,408
26,459
841,867
3,521
3,744
171
-
-
-
(
446,740)
8,735
-
-
$ 4,753,174






$ 4,905,835
836,802
(
10,048)
826,754
(
262)
2,287
48
-
-
(
321,653)
1,437,179
(
50,574)
$ 6,799,614
$ 6,799,614
1,153,620
33,043
1,186,663
3,216
6,479
223
-
-
-
(
446,740)
-
6,199
(
120,053)
$ 7,435,601

~36~

STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Net gain on financial assets at fair value through profit or loss
Expected credit losses

Provision for loss on inventory market price decline

Fire loss - inventories

Gain on disposal of non-current assets held for sale, net

Share of (profit) loss of associates and joint ventures
accounted for under equity method

Depreciation

Net loss on disposal of property, plant and equipment

Property, plant and equipment transferred to expenses

Fire loss - property, plant and equipment

Gain from lease modification

Net loss on disposal of other non-current assets

Amortisation

Impairment loss on non-financial assets

Interest income

Dividend income

Interest expense

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Receipts in advance
Refund liabilities - current
Net defined benefit liability - non-current
Cash inflow generated from operations
Dividends received
Interest received
Interest paid
Income tax received
Income tax paid
Net cash flows from operating activities		 For theyears ended December 31,
Notes
2022
2021
$
1,399,933 $
1,013,750
(
1,083 ) (
1,449 )
12
17,812
931
6(6)
7,030
7,658
6(6)(25)
-
4,608
6(7)(25)
- (
80,498 )
6(8)
(
61,366 )
6,157
6(9)(10)(27)
278,138
200,758
6(25)
1,632
846
6(9)
378
963
6(9)(25)
-
61,693
6(10)(25)
(
8 )
-
6(25)
6,147
5,872
6(27)
20,467
20,306
6(11)(25)
-
1,810
6(23)
(
29,594 ) (
4,247 )
6(24)
(
9,860 ) (
20,738 )
6(26)
18,775
7,250
(
41,000 )
2,000
535 (
97,161 )
(
123,104 ) (
42,003 )
78,146 (
129,624 )
(
187,629 ) (
41,143 )
(
8,587 )
17,914
(
28,036 )
765
1,506 (
2,195 )
4,882 (
56,576 )
121,473 (
29,305 )
(
93,894 )
105,314
48,414
2,029
(
346 )
984
(
14,774 ) (
111 )
(
28,272 ) (
11,837 )
1,377,715
944,721
21,860
21,735
28,292
4,303
(
17,999 ) (
7,242 )
17,487
-
(
199,521 ) (
136,483 )
1,227,834
827,034

(Continued)

~37~

STANDARD CHEM. & PHARM. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in financial assets at amortised cost - current
Cash received from withdrawal of capital on financial assets at fair
value through profit or loss- non-current

Acquisition of financial assets at fair value through other
comprehensive income - non-current
Proceeds from disposal of financial assets at fair value through
other comprehensive income - non-current

Acquisition of investments accounted for under equity method

Proceeds from disposal of investments accounted for under equity
method

Cash paid for aquisition of property, plant and equipment

Interest paid for acquisition of property, plant and equipment

Proceeds from disposal of property, plant and equipment
Proceeds from disposal of non-current assets held for sale, net

Acquisition of intangible assets

Increase in prepayments for equipment
Decrease (increase) in guarantee deposits paid
Proceeds from disposal of other non-current assets

Increase in other non-current assets
Cash (paid) received from business combinations

Net cash flows (used in) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings

Decrease in short-term borrowings

Decrease in short-term notes and bills payable

Payments of lease liabilities

Increase in long-term borrowings

Decrease in guarantee deposit received

Overdue cash dividends payable

Payments of cash dividends

Cash paid for transaction with non-controlling interests

Decrease in non-controlling interests
Net cash flows used in financing activities
Effects of foreign exchange
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year
 For theyears ended December 31,
Notes
2022
2021
$
126,422 $
181,625
6(2) and 12(3)
413
-
(
60,632 ) (
121,205 )
6(3)
23,305
18,921
6(7)
- (
288,810 )
6(8)
9,156
-
6(33)
(
681,988 ) (
126,817 )
6(9)(26)(33)
(
2,523 ) (
369 )
720
88
6(7)
-
245,553
6(11)
(
4,009 ) (
4,808 )
(
511,545 ) (
86,291 )
10,708 (
17,496 )
6(33)
38,364
-
(
4,899 ) (
9,734 )
6(32)
(
24,323 )
1,028,466
(
1,080,831 )
819,123
6(34)
2,806,682
390,213
6(34)
(
2,524,668 ) (
165,992 )
6(34)
(
290,000 )
-
6(34)
(
22,445 ) (
18,482 )
6(34)
132,000
50,000
6(34)
(
121 ) (
839 )
6(19)
223
48
6(20)
(
446,740 ) (
321,653 )
6(31)
(
322 ) (
262 )
(
120,053 ) (
50,574 )
(
465,444 ) (
117,541 )
13,427 (
404 )
(
305,014 )
1,528,212
6(1)
2,564,395
1,036,183
6(1)
$
2,259,381 $
2,564,395

~38~

Attachment 3:

Director Candidate List

  1. Pursuant to Article 192, paragraph 1 and Article 216, paragraph 1, any shareholder holding 1% or more of the total outstanding number of shares issued by SCPC may submit to SCPC in writing a roster for director and independent director candidates provided that the total number of candidates so nominated shall not exceed the quota of the director and independent director to be elected.

  2. The acceptance period for candidate nomination for 2023’s election is in between April 14, 2023 to April 24, 2023. The candidate list is then published on the Market Observation Post System in accordance with the regulation.

  3. During the period, the Board of Directors nominated one Director and one independent Director, whose qualifications were examined and proposed to the 2023 Shareholders’ Meeting for election by March 14, 2023 meeting of the Board of Directors.

Title Name Education Experience Number of
Shares Held
Director Fan Dao Nan
Foundation
Representative
Wen-Jang, Lin		 Chin-Yi
Technical
Vocational
Junior College
of Chemical
Engineering
Deputy General Manager, Standard
Chem. & Pharm. Co., Ltd.

Consultant, Standard Chem. &
Pharm. Co., Ltd.

Director, Fan Dao Nan Foundation		 5,523,881
Independent
Director		 LAWRENCE C. LEE University of
Pittsburgh
School of Law
Doctor of
Juridical
Science
Co Director, Huang & Partners

Senior Counsel, Huang & Partners

Partner, Huang & Partners

Senior Legal Consultant, Acer Inc.

Senior Legal Consultant, Wistron
Corporation		 0

~39~

Attachment 4:

Standard Chem. & Pharm. Co., Ltd.

Comparison Table of Amended “Operating Procedures of Rules of Procedure for Shareholders Meetings”

Amendedprovisions Currentprovisions Remark
Article 2：Convening shareholders
meetings and shareholders meeting
notices
1. Unless otherwise provided by law or
regulation, this Corporation's
shareholders meetings shall be
convened by the board of directors.
When a company holds a virtual
shareholder meeting, it should be
stipulated in the company's articles
of association, except as otherwise
provided in the Regulations
Governing the Administration of
Shareholder Services of Public
Companies. A resolution for the
virtual shareholder meeting must
be passed by the board of directors,
and it shall be executed only when
it is agreed upon by two-thirds or
more of the directors present and
the majority of the attending
directors, as required by the board
of directors
2. Changes to how this Corporation
convenes its shareholders meeting
shall be resolved by the board of
directors, and shall be made no
later than mailing of the
shareholders meeting notice.This
Corporation shall prepare electronic
versions of the shareholders		 Article 2：Convening shareholders
meetings and shareholders
meeting notices
1.
Unless otherwise provided by
law
or
regulation,
this
Corporation's
shareholders
meetings shall be convened by
the board of directors.
2.
This Corporation shall prepare
electronic versions of the
shareholders meeting notice
and proxy forms, and the
origins of and explanatory
materials
relating
to
all
proposals, including proposals
for ratification, matters for
deliberation, or the election
or dismissal of directors or
supervisors, and upload them
to the Market Observation
Post System (MOPS) before 30
days before the date of a
regular shareholders meeting
or before 15 days before the
date of a special shareholders
meeting.
This
Corporation
shall
prepare
electronic
versions of the shareholders
meeting
agenda
and
supplemental
meeting
materials and upload them to		 In
accordance
with the
amendment
of the
regulation

~40~

Amended provisions Current provisions Remark meeting notice and proxy forms, the MOPS before 21 days and the origins of and explanatory before the date of the regular materials relating to all proposals, shareholders meeting or including proposals for ratification, before 15 days before the date matters for deliberation, or the of the special shareholders election or dismissal of directors or meeting. In addition, before supervisors, and upload them to the 15 days before the date of the Market Observation Post System shareholders meeting, this (MOPS) before 30 days before the Corporation shall also have date of a regular shareholders prepared the shareholders meeting or before 15 days before meeting agenda and the date of a special shareholders supplemental meeting meeting. This Corporation shall materials and made them prepare electronic versions of the available for review by shareholders meeting agenda and shareholders at any time. The supplemental meeting materials meeting agenda and and upload them to the MOPS supplemental materials shall before 21 days before the date of also be displayed at this the regular shareholders meeting or Corporation and the before 15 days before the date of professional shareholder the special shareholders meeting. In services agent designated addition, before 15 days before the thereby ~~as well as being~~ date of the shareholders meeting, ~~distributed on-site at the~~ this Corporation shall also have ~~meeting place~~ prepared the shareholders meeting 3.~5. Omitted agenda and supplemental meeting 6. A shareholder holding ~~1~~ materials and made them available percent or more of the total for review by shareholders at any number of issued shares may time. The meeting agenda and submit to this Corporation a supplemental materials shall also be ~~written~~ proposal for discussion displayed at this Corporation and at a regular shareholders the professional shareholder meeting. Such proposals, services agent designated thereby. however, are limited to one This Corporate shall make the item only, and no proposal meeting agenda and supplemental containing more than one item meeting materials in the preceding will be included in the meeting paragraph available to shareholders agenda. In addition, when the

~41~

Amended provisions Current provisions Remark for review in the following manner circumstances of any on the date of the shareholders subparagraph of Article 172-1, meeting: paragraph 4 of the Company a. For physical shareholders Act apply to a proposal put meetings, to be distributed forward by a shareholder, the on-site at the meeting. board of directors may exclude b. For hybrid shareholders it from the agenda. A meetings, to be distributed shareholder may propose a on-site at the meeting and recommendation for urging the shared on the virtual meeting corporation to promote public platform. interests or fulfill its social c. For virtual-only shareholders responsibilities, provided meetings, electronic files shall procedurally the number of be shared on the virtual items so proposed is limited meeting platform. only to one in accordance with 3.~5. Omitted Article 172-1 of the Company 6. A shareholder holding one percent Act, and no proposal containing or more of the total number of more than one item will be issued shares may submit to this included in the meeting Corporation a proposal for agenda. discussion at a regular 7.~9.Omitted shareholders meeting. The 10. The venue for a shareholders number of items so proposed is meeting shall be the premises limited to one only, and no of this Corporation, or a place proposal containing more than easily accessible to one item will be included in the shareholders and suitable for a meeting agenda. When the shareholders meeting. The circumstances of any meeting may begin no earlier subparagraph of Article 172-1, than 9 a.m. and no later than 3 paragraph 4 of the Company Act p.m. Full consideration shall be apply to a proposal put forward by given to the opinions of the a shareholder, the board of independent directors with directors may exclude it from the respect to the place and time of agenda. A shareholder may the meeting. propose a recommendation for urging the corporation to promote public interests or fulfill its social

~42~

Amendedprovisions Currentprovisions Remark
responsibilities, provided
procedurally the number of items
so proposed is limited only to one
in accordance with Article 172-1 of
the Company Act, and no proposal
containing more than one item will
be included in the meeting
agenda.
7.~9. Omitted
10. The venue for a shareholders
meeting shall be the premises of
this Corporation, or a place easily
accessible to shareholders and
suitable for a shareholders
meeting. The meeting may begin
no earlier than 9 a.m. and no later
than 3 p.m. Full consideration shall
be given to the opinions of the
independent directors with
respect to the place and time of
the meeting.
The restrictions on the place of the
meeting shall not apply when this
Corporation convenes a
virtual-only shareholders meeting.
Article 3：Shareholders'Attendance,
Proxy, and Authorization.
1.~3. Omitted
4.
After a proxy form has been
delivered to this Corporation, if
the shareholder intends to attend
the meeting in person or to
exercise
voting
rights
by
correspondence or electronically, a
written
notice
of
proxy
cancellation shall be submitted to
this
Corporation
before
two		 Article 3：Shareholders'Attendance,
Proxy, and Authorization.
1.~3.Omitted
4.
After a proxy form has been
delivered to this Corporation,
if the shareholder intends to
attend the meeting in person
or to exercise voting rights by
correspondence or
electronically, a written notice
of proxy cancellation shall be
submitted to this Corporation		 In
accordance
with the
amendment
of the
regulation

~43~

Currentprovisions Remark
before two business days
before the meeting date. If
the cancellation notice is
submitted after that time,
votes cast at the meeting by
the proxy shall prevail.
Amendedprovisions Currentprovisions Remark
5.
6.
7.		 business days before the meeting
date. If the cancellation notice is
submitted after that time, votes
cast at the meeting by the proxy
shall prevail.
If, after a proxy form is delivered to
this Corporation, a shareholder
wishes to attend the shareholders
meeting online, a written notice of
proxy
cancellation
shall
be
submitted to this Corporation two
business days before the meeting
date. If the cancellation notice is
submitted after that time, votes
cast at the meeting by the proxy
shall prevail.
In
the
event
of
a
virtual
shareholders
meeting,
shareholders wishing to attend the
meeting online shall register with
this Corporation two days before
the meeting date.In the event of a
virtual shareholders meeting, this
Corporation
shall
upload
the
meeting agenda book, annual
report
and
other
meeting
materials to the virtual meeting
platform at least 30 minutes
before the meeting starts, and
keep this information disclosed
until the end of the meeting.
In
the
event
of
a
virtual
shareholders
meeting,
this
Corporation
shall
upload
the
meeting agenda book, annual
report
and
other
meeting
materials to the virtual meeting		 before two business days
before the meeting date. If
the cancellation notice is
submitted after that time,
votes cast at the meeting by
the proxy shall prevail.

~44~

Amendedprovisions Currentprovisions Remark
platform at least 30 minutes
before the meeting starts, and
keep this information disclosed
until the end of the meeting.
Article
3-1:
Convening
virtual
shareholders meetings and particulars
to be included in shareholders meeting
notice
To convene a virtual shareholders
meeting, this Corporation shall include
the
follow
particulars
in
the
shareholders meeting notice:
1.
How shareholders attend the
virtual meeting and exercise their
rights.
2.
Actions to be taken if the virtual
meeting platform or participation
in the virtual meeting is obstructed
due to natural disasters, accidents
or other force majeure events, at
least
covering
the
following
particulars:
a. To what time the meeting is
postponed or from what time
the meeting will resume if the
above obstruction continues
and cannot be removed, and
the date to which the meeting
is postponed or on which the
meeting will resume.
b. Shareholders
not
having
registered
to
attend
the
affected virtual shareholders
meeting shall not attend the
postponed or resumed session.
c. In
case
of
a
hybrid
shareholders meeting, when		 In
accordance
with the
amendment
of the
regulation

1.
2.
a.
b.
c.

~45~

Amendedprovisions Currentprovisions Remark
3. d.
To

~46~

Amendedprovisions Currentprovisions Remark
44-9,
paragraph
6
of
the
Regulations
Governing
the
Administration
of
Shareholder
Services of Public Companies, At
least the shareholders should be
provided
with
connection
equipment
and
necessary
assistance, and the period during
which shareholders may apply to
the company and other relevant
matters to be noted should be
stated.
Article 4：Shareholders' meeting
registration process
1.
This Corporation shall specify in its
shareholders meeting notices the
time during which attendance
registrations for shareholders,
solicitors and proxies (collectively
"shareholders") will be accepted,
the place to register for
attendance, and other matters for
attention.
2.
The time during which shareholder
attendance registrations will be
accepted, as stated in the
preceding paragraph, shall be at
least 30 minutes prior to the time
the meeting commences. The
place at which attendance
registrations are accepted shall be
clearly marked and a sufficient
number of suitable personnel
assigned to handle the
registrations.For virtual
shareholders meetings,
shareholders may begin to register		 Article 4：Shareholders' meeting
registration process
1. This Corporation shall specify in
its
shareholders
meeting
notices the time during which
attendance
registrations
for
shareholders will be accepted,
the
place
to
register
for
attendance, and other matters
for attention.
2. The
time
during
which
shareholder
attendance
registrations will be accepted,
as stated in the preceding
paragraph, shall be at least 30
minutes prior to the time the
meeting commences. The place
at
which
attendance
registrations are accepted shall
be
clearly
marked
and
a
sufficient number of suitable
personnel assigned to handle
the registrations.
3. Shareholders ~~or their proxies~~
~~(collectively, "shareholders")~~		 In
accordance
with the
amendment
of the
regulation

~47~

Amendedprovisions Currentprovisions Remark
on the virtual meeting platform 30
minutes before the meeting starts.
Shareholders completing
registration will be deemed as
attend the shareholders meeting
in person.
3.
Shareholders shall attend
shareholders meetings based on
attendance cards, sign-in cards, or
other certificates of attendance.
This Corporation may not
arbitrarily add requirements for
other documents beyond those
showing eligibility to attend
presented by shareholders.
Solicitors soliciting proxy forms
shall also bring identification
documents for verification
4.~5.Omitted		 shall attend shareholders
meetings based on attendance
cards, sign-in cards, or other
certificates of attendance. This
Corporation may not arbitrarily
add requirements for other
documents beyond those
showing eligibility to attend
presented by shareholders.
Solicitors soliciting proxy forms
shall also bring identification
documents for verification
4.~5.Omitted
Article 5：Chairman and Attendees of
the Shareholders' Meeting
1.~5. Omitted
6.
When this Corporation convenes a
virtual-only shareholders meeting,
both the chair and secretary shall
be in the same location, and the
chair shall declare the address of
their location when the meeting is
called to order.		 Article 5：Chairman and Attendees
of the Shareholders' Meeting
1.~5. Omitted		 In
accordance
with the
amendment
of the
regulation
Article 6：Calculation of Shareholding
for Attendance at Shareholders'
Meeting
1. Attendance
at
shareholders
meetings shall be calculated based
on numbers of shares. The number
of shares in attendance shall be
calculated accordingto the shares		 Article
6
：
Calculation
of
Shareholding for Attendance at
Shareholders' Meeting
1. Attendance at shareholders
meetings shall be calculated
based on numbers of shares.
The number of shares in
attendance shall be calculated		 In
accordance
with the
amendment
of the
regulation

~48~

Amended provisions

indicated by the attendance book and sign-in cards handed in, and the shares checked in on the virtual meeting platform, plus the number of shares whose voting rights are exercised by correspondence or electronically.

  1. On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation, the number of shares represented by proxies and the number of shares represented by shareholders attending the meeting by correspondence or electronic means, and shall make an express disclosure of the same at the place of the shareholders meeting. In the event a virtual shareholders meeting, this Corporation shall upload the above meeting materials to the virtual meeting platform at least 30 minutes before the meeting starts, and keep this information disclosed until the end of the meeting. During this Corporation's virtual shareholders meeting, when the meeting is called to order, the total number of shares represented at the meeting shall be disclosed on the virtual meeting platform. The same shall apply whenever the total number of shares represented at the meeting and a new tally of

Current provisions Remark

according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.

  1. On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation, and shall make an express disclosure of the same at the place of the shareholders meeting.

  2. The chair shall call the meeting to order at the appointed meeting time and disclose information concerning the number of nonvoting shares and number of shares represented by shareholders attending the meeting.However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements and the

~49~

Amended provisions Current provisions Remark votes is released during the attending shareholders still meeting. represent less than one third of 3. The chair shall call the meeting to the total number of issued order at the appointed meeting time shares, the chair shall declare and disclose information concerning the meeting adjourned. the number of nonvoting shares and 4. If the quorum is not met after number of shares represented by two postponements as referred shareholders attending the to in the preceding paragraph, meeting.However, when the but the attending shareholders attending shareholders do not represent one third or more of represent a majority of the total the total number of issued number of issued shares, the chair shares, a tentative resolution may announce a postponement, may be adopted pursuant to provided that no more than two Article 175, paragraph 1 of the such postponements, for a Company Act; all shareholders combined total of no more than one shall be notified of the hour, may be made. If the quorum is tentative resolution and not met after two postponements another shareholders meeting and the attending shareholders still shall be convened within one represent less than one third of the month. total number of issued shares, the 5. Omitted chair shall declare the meeting adjourned. In the event of a virtual shareholders meeting, this Corporation shall also declare the meeting adjourned at the virtual meeting platform.

  1. If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders shall be notified of

~50~

Amendedprovisions Currentprovisions Remark
5. the
tentative
resolution
and
another
shareholders
meeting
shall be convened within one
month.In the event of a virtual
shareholders
meeting,
shareholders intending to attend
the meeting online shall re-register
to this Corporation in accordance
with Article 3.
Omitted
Article 7：Documentation of a
shareholders meeting by audio or video
and and maintaining order at the
meeting place
1.
This Corporation, beginning from
the time it accepts shareholder
attendance registrations, shall
make an uninterrupted audio and
video recording of the registration
procedure, the proceedings of the
shareholders meeting, and the
voting and vote counting
procedures.The recorded materials
of the preceding paragraph shall
be retained for at least one year. If,
however, a shareholder files a
lawsuit pursuant to Article 189 of
the Company Act, the recording
shall be retained until the
conclusion of the litigation.
Where a shareholders meeting is
held online, this Corporation shall
keep records of shareholder
registration, sign-in, check-in,
questions raised, votes cast and
results of votes counted by this
Corporation, and continuously		 Article 7：Documentation of a
shareholders meeting by audio or
video and and maintaining order at
the meeting place
1.
This Corporation, beginning
from the time it accepts
shareholder
attendance
registrations, shall make an
uninterrupted audio and video
recording of the registration
procedure, the proceedings of
the shareholders meeting, and
the voting and vote counting
procedures.The
recorded
materials of the preceding
paragraph shall be retained
for at least one year. If,
however, a shareholder files a
lawsuit pursuant to Article 189
of the Company Act, the
recording shall be retained
until the conclusion of the
litigation.
2.~5. Omitted		 In
accordance
with the
amendment
of the
regulation

~51~

Amendedprovisions Currentprovisions Remark
audio and video record, without
interruption, the proceedings of
the virtual meeting from beginning
to end.
The information and audio and
video recording in the preceding
paragraph shall be properly kept
by this Corporation during the
entirety of its existence, and
copies of the audio and video
recording shall be provided to and
kept by the party appointed to
handle matters of the virtual
meeting.
In case of a virtual shareholders
meeting, this Corporation is
advised to audio and video record
the back-end operation interface
of the virtual meeting platform.
2.~5. Omitted
Article 9：Shareholder speech
1.~6. Omitted
7.
Where
a
virtual
shareholders
meeting is convened, shareholders
attending the virtual meeting
online may raise questions in
writing at the virtual meeting
platform from the chair declaring
the meeting open until the chair
declaring the meeting adjourned.
No more than two questions for
the same proposal may be raised.
Each question shall contain no
more
than
200
words.
The
regulations in paragraphs 1 to 5 do
not apply.
8.
As long as questions so raised in		 Article 9：Shareholder speech
1.~6. Omitted		 In
accordance
with the
amendment
of the
regulation

~52~

Amendedprovisions Currentprovisions Remark
accordance with the preceding
paragraph are not in violation of
the regulations or beyond the
scope of a proposal, it is advisable
the questions be disclosed to the
public at the virtual meeting
platform.
Article 10：Calculation of voting shares
and recusal system
1.~2. Omitted
3.
When a shareholder is an
interested party in relation to an
agenda item, and there is the
likelihood that such a relationship
would prejudice the interests of
this Corporation, that shareholder
may not vote on that item, and
may not exercise voting rights as
proxy for any other shareholder.
The number of shares for which
voting rights may not be exercised
under the preceding paragraph
shall not be calculated as part of
the voting rights represented by
attending shareholders.
4. Omitted		 Article 10：Calculation of voting
shares and recusal system
1.~2. Omitted
3.
When a shareholder is an
interested party in relation to
an agenda item, and there is
the likelihood that such a
relationship would prejudice
the interests of this
Corporation, that shareholder
may not vote ~~and recusal~~on
that item, and may not
exercise voting rights as proxy
for any other shareholder.
The number of shares for
which voting rights may not
be exercised under the
preceding paragraph shall not
be calculated as part of the
voting rights represented by
attending shareholders.
4. Omitted
Article 11：Voting, monitoring and vote
counting
1.~2. Omitted
3.
A
shareholder
intending
to
exercise
voting
rights
by
correspondence
or
electronic
means
under
the
preceding
paragraph shall deliver a written		 Article 11：Voting, monitoring and
vote counting
1.~2. Omitted
3.
A shareholder intending to
exercise
voting
rights
by
correspondence or electronic
means under the preceding
paragraph
shall
deliver
a		 In
accordance
with the
amendment
of the
regulation

~53~

Amended provisions declaration of intent to this Corporation before two days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent. After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person or online, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to this Corporation, by the same means by which the voting rights were exercised, before two business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.

  • 4.~8. Omitted

  • When this Corporation convenes a

Current provisions Remark written declaration of intent to this Corporation before 2 days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent. After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to this Corporation, by the same means by which the voting rights were exercised, before 2 business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights

~54~

Amendedprovisions Currentprovisions Remark
10.
11.
12.		 virtual shareholders meeting, after
the chair declares the meeting
open, shareholders attending the
meeting online shall cast votes on
proposals and elections on the
virtual meeting platform before
the chair announces the voting
session ends or will be deemed
abstained from voting.
In
the
event
of
a
virtual
shareholders meeting, votes shall
be counted at once after the chair
announces the voting session
ends, and results of votes and
elections
shall
be
announced
immediately.
When this Corporation convenes a
hybrid shareholders meeting, if
shareholders who have registered
to attend the meeting online in
accordance with Article 6 decide
to
attend
the
physical
shareholders meeting in person,
they shall revoke their registration
two days before the shareholders
meeting in the same manner as
they registered. If their registration
is not revoked within the time
limit, they may only attend the
shareholders meeting online.
When shareholders exercise voting
rights
by
correspondence
or
electronic means, unless they have
withdrawn the declaration of
intent
and
attended
the
shareholders
meeting
online,
except for extraordinary motions,		 exercised by the proxy in the
meeting shall prevail.
4.~8. Omitted

~55~

Amendedprovisions Currentprovisions Remark
they will not exercise voting rights
on the original proposals or make
any amendments to the original
proposals or exercise voting rights
on amendments to the original
proposal.
Article 13：Minutes of the meeting
1.~2. Omitted
3.
Where
a
virtual
shareholders
meeting is convened, in addition
to the particulars to be included in
the meeting minutes as described
in the preceding paragraph, the
start time and end time of the
shareholders meeting, how the
meeting is convened, the chair's
and secretary's name, and actions
to be taken in the event of
disruption to the virtual meeting
platform or participation in the
meeting online due to natural
disasters, accidents or other force
majeure events, and how issues
are dealt with shall also be
included in the minutes.
4.
When convening a virtual-only
shareholder meeting, other than
compliance with the requirements
in the preceding paragraph, this
Corporation shall specify in the
meeting
minutes
alternative
measures
available
to
shareholders with difficulties in
attending
a
virtual-only
shareholders meeting online
5.
In
the
event
of
a
virtual
shareholders
meeting,
this		 Article 13：Minutes of the meeting
1.~2. Omitted		 In
accordance
with the
amendment
of the
regulation

~56~

Amendedprovisions Currentprovisions Remark
Corporation
shall
disclose
real-time results of votes and
election immediately after the end
of the voting session on the virtual
meeting platform according to the
regulations, and this disclosure
shall continue at least 15 minutes
after the chair has announced the
meeting adjourned.
Article 15：Handling of disconnection
1.
In the event of a virtual
shareholders meeting, this
Corporation may offer a simple
connection test to shareholders
prior to the meeting, and provide
relevant real-time services before
and during the meeting to help
resolve communication technical
issues.
2.
In the event of a virtual
shareholders meeting, when
declaring the meeting open, the
chair shall also declare, unless
under a circumstance where a
meeting is not required to be
postponed to or resumed at
another time under Article 44-20,
paragraph 4 of the Regulations
Governing the Administration of
Shareholder Services of Public
Companies, if the virtual meeting
platform or participation in the
virtual meeting is obstructed due
to natural disasters, accidents or
other force majeure events before
the chair has announced the		 In
accordance
with the
amendment
of the
regulation
1.
2.

~57~

Amendedprovisions Currentprovisions Remark
3.
4.
5.		 meeting adjourned, and the
obstruction continues for more
than 30 minutes, the meeting shall
be postponed to or resumed on
another date within five days, in
which case Article 182 of the
Company Act shall not apply.
For a meeting to be postponed or
resumed as described in the
preceding paragraph, shareholders
who have not registered to
participate in the affected
shareholders meeting online shall
not attend the postponed or
resumed session.
For a meeting to be postponed or
resumed under the second
paragraph, the number of shares
represented by, and voting rights
and election rights exercised by
the shareholders who have
registered to participate in the
affected shareholders meeting and
have successfully signed in the
meeting, but do not attend the
postpone or resumed session, at
the affected shareholders meeting,
shall be counted towards the total
number of shares, number of
voting rights and number of
election rights represented at the
postponed or resumed session.
During a postponed or resumed
session of a shareholders meeting
held under the second paragraph,
no further discussion or resolution
is required for proposals for which

~58~

Amendedprovisions Currentprovisions Remark
6.
7.
8.		 votes have been cast and counted
and results have been announced,
or list of elected directors and
supervisors.
When this Corporation convenes a
hybrid shareholders meeting, and
the virtual meeting cannot
continue as described in second
paragraph, if the total number of
shares represented at the meeting,
after deducting those represented
by shareholders attending the
virtual shareholders meeting
online, still meets the minimum
legal requirement for a
shareholder meeting, then the
shareholders meeting shall
continue, and not postponement
or resumption thereof under the
second paragraph is required.
Under the circumstances where a
meeting should continue as in the
preceding paragraph, the shares
represented by shareholders
attending the virtual meeting
online shall be counted towards
the total number of shares
represented by shareholders
present at the meeting, provided
these shareholders shall be
deemed abstaining from voting on
all proposals on meeting agenda of
that shareholders meeting.
When postponing or resuming a
meeting according to the second
paragraph, this Corporation shall
handle the preparatory work

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Amendedprovisions Currentprovisions Remark
9. based on the date of the original
shareholders meeting in
accordance with the requirements
listed under Article 44-20,
paragraph 7 of the Regulations
Governing the Administration of
Shareholder Services of Public
Companies.
For dates or period set forth under
Article 12, second half, and Article
13, paragraph 3 of Regulations
Governing the Use of Proxies for
Attendance at Shareholder
Meetings of Public Companies,
and Article 44-5, paragraph 2,
Article 44-15, and Article 44-17,
paragraph 1 of the Regulations
Governing the Administration of
Shareholder Services of Public
Companies, this Corporations hall
handle the matter based on the
date of the shareholders meeting
that is postponed or resumed
under the second paragraph.
Article 16：
To convene a virtual-only
shareholders meeting, appropriate
alternative measures available to
shareholders with difficulties in
attending a virtual shareholders
meeting online shall be
specified.Except for the
circumstances specified in Article
44-9, paragraph 6 of the
Regulations Governing the		 In
accordance
with the
amendment
of the
regulation

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Amendedprovisions Currentprovisions Remark
Administration of Shareholder
Services of Public Companies, At
least the shareholders should be
provided with connection
equipment and necessary
assistance, and the period during
which shareholders may apply to
the company and other relevant
matters to be noted should be
stated.
Article17：
Any matters not specified in these
regulations shall be handled in
accordance with the provisions of the
Company Act, relevant laws and
regulations, and the Articles of
Incorporation of this company.		 Article~~15~~~~：~~
Any matters not specified in these
regulations shall be handled in
accordance with the provisions of
the Company Law, relevant laws
and regulations, and the Articles of
Incorporation of this company.		 Amended
Article
number
Article18：
These regulations shall come into effect
after being passed by the shareholders'
meeting, and the same applies to any
amendments made to them.		 Article~~16~~~~：~~
These regulations shall come into
effect after being passed by the
shareholders' meeting, and the
same applies to any amendments
made to them.		 Amended
Article
number
Article19：
These Operational Procedures were
promulgated on August 24, 2021.
Amended for first time on June 20,
2023		 Article~~17~~~~：~~
These Operational Procedures were
promulgated on August 24, 2021.		 Amended
Article
number and
Added
amendment
date

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Appendices

Appendices 1

Articles of Incorporation of STANDARD CHEM. & PHARM.CO., LTD.

Chapter 1 General Provisions

Article 1: The Company is organized according to the provisions of the Company Act and is named as "STANDARD CHEM. & PHARM. CO., LTD.

Article 2: The Company engages in the following businesses:

  1. C110010 Beverage Manufacturing

  2. F102040 Wholesale of nonalcoholic Beverages

  3. C199990 Manufacture of Other Food Products Not Elsewhere Classified

  4. F102170 Wholesale of Foods and Groceries

  5. F203010 Retail sale of Food Products and Groceries

  6. C201010 Feed Manufacturing

  7. F103010 Wholesale of Animal Feeds

  8. F202010 Retail Sale of Feeds

  9. C801110 Fertilizer Manufacturing

  10. F107050 Wholesale of Fertilizer

  11. F207050 Retail Sale of Manure

  12. C802041 Drugs and Medicines Manufacturing

  13. F108021 Wholesale of Western Pharmaceutical

  14. F208021 Retail Sale of Western Pharmaceutical

  15. C802051 Chinese Medicine Manufacturing

  16. F108011 Wholesale of Traditional Chinese Medicine

  17. F208011 Retail Sale of Chinese Medicine

  18. C802100 Cosmetics Manufacturing

  19. F108040 Wholesale of Cosmetics

  20. F208040 Retail Sale of Cosmetics

  21. CE01010 General Instrument Manufacturing

  22. CF01011 Medical Materials and Equipment Manufacturing

  23. F108031 Wholesale of Drugs, Medical Goods

  24. F208031 Retail sale of Medical Equipment 25. C802060 Veterinary Drug Manufacturing

  25. F107070 Wholesale of Veterinary Drugs

  26. F207070 Retail Sale of Veterinary Drugs 28. F401010 International Trade 29. H701040 Specific Area Development

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  1. H701060 New Towns, New Community Development

  2. I103060 Management Consulting

  3. F399040 Retail Sale No Storefront

  4. J701040 Recreational Activities Venue

  5. J801030 Athletics and Recreational Sports Stadium

  6. J802010 Sports Training

  7. ZZ99999 All business activities that are not prohibited or restricted by law, except those that are subject to special approval.

  8. Article 3: The Company is located in Tainan City and may, pursuant to a resolution adopted at the meeting of the Board of Directors, set up branch offices within or outside the territory of the Republic of China when deemed necessary.

  9. Article 4: The Company may provide external guarantee for its business needs.

Chapter 2 Capital Stock

  • Article 5: The total capital of the Company shall be in the amount of 2 billion NTD, divided into 200 million shares of 10 NTD each, which the Board of Directors is authorized to issue in installments in accordance with the law.

  • Article 6: The Company's share certificates shall be in registered form, signed or sealed and numbered by the directors on behalf of the Company, and shall be issued upon certification by a bank authorized by law to act as a certifying officer for the issuance of share certificates.

  • The shares issued by the Company may be printed jointly or without printing, and shall be registered or kept by a centralized securities depository.

  • Article 7: The name transfer of shares shall cease within 60 days prior to the regular shareholders' meeting, within 30 days prior to the shareholders' meeting or within 5 days prior to the base date of the Company's decision to distribute dividends and bonuses or other benefits.

  • Article 8: The Company's stock transactions are subject to the relevant regulations of the competent authorities.

Chapter 3 Shareholders’ Meeting

  • Article 9: Shareholders meetings of the Company are of two kinds: (1) regular meeting and (2) special meeting. Regular meetings shall be convened at least once a year by the Board of Directors according to the law within six months after the close of each fiscal year. Special meetings shall be convened whenever necessary according to the laws and regulations.

  • Article 10: Each shareholder shall be notified of the dates, places and reasons at least 30 days before the regular meeting and 15 days before the special meeting.

  • Article 10-1: The Company's shareholders' meetings may be held by video conference or other forms as announced by the authorities of the Central Government.

  • Article 11: In case a shareholder is unable to attend a shareholders' meeting for any reason, he/she may appoint a proxy to attend the meeting by presenting a document issued by the Company stating the scope of authority, with the shareholder's signature and seal on it. The authority to vote by proxy shall be governed by the

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Company Act and relevant laws and regulations.

  • Article 12: Unless otherwise provided in the Company Act, the chairman of the shareholders' meeting shall be the president of the Company. In the absence of the president, his or her proxy shall be governed by the provisions of the Company Act; if the meeting is convened by someone other than the board of directors, it shall be governed by the provisions of the Company Act.

  • Article 13: Each shareholder of the Company is entitled to one vote for each share held, with the exception of those who are not entitled to vote in accordance with Article 179 of the Company Act.

  • Article 14: Unless otherwise provided for in the Company Act, a meeting of shareholders shall proceed only if attended by shareholders representing more than one-half of the total outstanding capital stock of the Company. Resolutions of a shareholders meeting shall be made at the meeting with the concurrence of a majority of the votes held by the shareholders present at the meeting.

  • Article 15: The minutes of the shareholders' meeting shall be prepared, signed or sealed by the chairman, and distributed to the shareholders within 20 days after the meeting, and the preceding minutes shall be distributed by means of an announcement posted on the Market Observation Post System. The minutes of the meeting shall contain the year, month, date, place, the name of the chairman and the method of resolution, as well as the main points of the proceedings and the results thereof. The minutes shall be kept at the Company together with the signature book of the shareholders present and the proxy form for attendance.

Chapter 4 Directors and Audit Committee

  • Article 16: The Company shall have five to nine directors, who shall be nominated by candidates and elected by the shareholders' meeting from a list of candidates for a term of three years, and shall be eligible for re-election.

  • The total shareholding of all directors and supervisors shall be in accordance with the regulations of the competent securities authorities.

  • In accordance with Article 14-2 of the Securities and Exchange Act, the number of independent directors of the Company shall not be less than three and shall not be less than one-fifth of the number of directorships. The professional qualifications, shareholdings, restrictions on part-time employment, nomination and election of independent directors and other matters to be followed shall be in accordance with the relevant regulations of the competent securities authorities.

  • The Company has established an Audit Committee since the 19th Board of Directors, which is composed of independent directors, with at least three members, one of whom is the convener, and at least one of whom is specialized in accounting or finance.

  • The exercise of the Audit Committee's authority, organizational procedures and other matters to be followed shall be in accordance with relevant laws and regulations or the Company's regulations.

  • On the establishment date of the Audit Committee, the Supervisors shall be dismissed immediately and the relevant provisions of the Articles of Incorporation regarding the Supervisors shall cease to be effective immediately.

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To enhance the function of decision-making and strengthen the management mechanism, the Company may establish various functional committees, and the organizational procedures of each committee shall be determined by the board of directors' meeting.

  • Article 17: If a director's term expires without re-election, the director's executive duties will be extended until the re-election takes place.

  • Article 18: The Directors shall constitute the Board of Directors and shall elect one Chairman (and one vice Chairman) of the Board from among themselves by a majority at a meeting attended by at least two-thirds of the Directors. The Chairman shall externally represent the Company. In the case of an emergency, the Board of Directors may be convened at any time, and notice of such convening may be given in writing, by E-Mail, or by electronic means such as facsimile.

  • Article 19: If the number of directors' vacancies reaches one-third, the board of directors shall convene an interim meeting of shareholders within 60 days to hold a by-election, provided that the term of office of the directors to be elected shall be limited to fill the original term of office.

  • Article 20: Unless otherwise provided in the Company Act, a resolution of the Board of Directors shall be made by a majority of the directors present with the consent of a majority of the directors present. If a director is unable to attend the meeting for any reason, the director may appoint a proxy to attend the meeting for another director by listing the scope of authority to convene the meeting, but limited to the extent that one person shall be appointed by one person.

  • Article 21: The minutes of the board of directors' meetings shall be made, signed or sealed by the chairman, and distributed to the directors within 20 days after the meeting. The minutes shall record the main points of the proceedings and their results, and shall be kept in the Company together with the signature book of the attending directors and the proxy statement of attendance.

  • Article 22: Remuneration shall be paid to the directors of the Company for the performance of their duties for the Company, regardless of the Company's profit or loss. The Board of Directors is authorized to determine their remuneration based on their participation in the Company's operations and the value of their contributions, in accordance with the general standards of the industry.

  • Article 22-1: The Company shall provide liability insurance to the directors during their term of office to cover their liability under the law for the execution of their business, and the Board of Directors is authorized to make the determination of such insurance.

  • Article 23: The Board of Directors is authorized to exercise discretion and flexibility in determining the amount of the Company's transferable investments, which are not subject to the Company Act restriction that the total amount of transferable investments shall not exceed 40% of the Company's paid-in capital.

Chapter 5 Managerial Officials

  • Article 24: The Company may appoint managerial officials, who shall be appointed and dismissed in accordance with the provisions of the Company Act, and who shall have the right to manage and sign the Company's affairs within the scope of the

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Company's Articles of Incorporation.

Chapter 6 Accounting

Article 25: After the close of each fiscal year, a report on operations, financial statements and proposals concerning appropriation of net profits or making up losses shall be prepared by the Board of Directors, and shall be submitted to the regular meeting of shareholders for acceptance.

1.Business Report 2.Financial Statements 3.Proposals for appropriation of earnings or loss.

  • Article 26: On the basis of the Company's profit for the year (i.e., income before taxation before the distribution of employee remuneration and directors' remuneration as described below), the Company shall distribute the remaining balance, if any, after making up its deficit in the following manner:

  • 1% to 10% of the remaining balance is allocated as employee remuneration.

  • No more than 3% of the remaining balance is allocated as directors' remuneration.

Employee remuneration may be in the form of stock or cash, and may be granted to employees of the controlling or subordinate companies who satisfy certain criteria.

The aforementioned director's remuneration may be paid in cash only.

The distribution of employee remuneration and director's remuneration shall be reported to the board of directors by the remuneration committee, and shall be made by a resolution of the board of directors with at least two-thirds of the directors present and a majority of the directors present, and shall be reported to the shareholders' meeting.

  • Article 26-1: Given the variable industrial environment in which the Company operates and the stable growth stage of its corporate life cycle, and considering the Company's future capital needs and long-term financial planning, as well as meeting shareholders' needs for cash inflows, the Company's annual earnings, if any, are distributed in the following order:

  • To pay taxes and contributions

  • To make up losses

  • Set aside 10% of the earnings as legal reserve. However, if the legal reserve has reached the amount of paid-in capital, it shall not be used for this purpose

  • Special reserve is provided or reversed in accordance with the law

  • At least 10% of the accumulated undistributed earnings of the previous year shall be set aside as dividends to shareholders, of which no less than 20% shall be cash dividends; however, if the cash dividends are less than NT$0.50 per share, stock dividends may be paid instead by resolution of the shareholders' meeting.

If the dividends mentioned above are paid in the form of new shares, they shall be distributed after a resolution is submitted to the shareholders' meeting.

The Company authorizes the Board of Directors, with the presence of at least two-thirds of the directors and the approval of a majority of the directors

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present, to distribute all or part of the dividends and bonuses, capital surplus or legal reserve in the form of cash and report to the shareholders' meeting.

Chapter 7 Supplementary Provisions

Article 27: The Articles of Incorporation and procedures of the Company shall be otherwise determined by the Board of Directors.

Article 28: In regard to all matters not provided for in these Articles of Incorporation, the Company Act and other regulations shall govern.

  • Article 29: The Articles of Incorporation shall be implemented after the resolution of the shareholders' meeting and the approval of the competent government office, and shall be the same in case of any changes.

Article 30: These Operational Procedures were promulgated on Jun 8, 1967 Amended for first time on April 25, 1968 Amended for second time on March 30, 1970 Amended for third time on March 23, 1972 Amended for fourth time on November 30, 1980 Amended for fifth time on August 20, 1982 Amended for sixth time on October 21, 1983 Amended for seventh time on September 25, 1985 Amended for eighth time on November 23, 1987 Amended for ninth time on June 1, 1988 Amended for tenth time on September 20, 1989 Amended for eleventh time on October 5, 1990 Amended for twelfth time on October 19, 1991 Amended for thirteenth time on October 09, 1992 Amended for fourteenth time on March 05, 1993 Amended for fifteenth time on June 19, 1993 Amended for sixteenth time on June 06, 1994 Amended for seventeenth time on April 08, 1995 Amended for eighteenth time on May 28, 1996 Amended for nineteenth time on May 22, 1998 Amended for twentieth time on May 26, 2000 Amended for twenty-first time on May 26, 2000 Amended for twenty-second time on May 23, 2001 Amended for twenty-third time on May 29, 2002 Amended for twenty-fourth time on May 30, 2006 Amended for twenty-fifth time on June 18, 2008 Amended for twenty-sixth time on June 9, 2009 Amended for twenty-seventh time on June 9, 2010 Amended for twenty-eighth time on June 15, 2011 Amended for twenty-ninth on June 6, 2012 Amended for thirtieth on June 18, 2013 Amended for thirty-first time on June 17, 2014 Amended for thirty-second time on June 17,2016 Amended for thirty-third time on June 19, 2019 Amended for thirty-fourth time on June 17, 2020

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Amended for thirty-fifth on August 24, 2021 Amended for thirty-sixth time on June 21, 2022

Standard Chem. & Pharm. Co., Ltd. Representative: Tzu-Ting, Fan

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Appendices 2

Standard Chem. & Pharm. Co., Ltd.

Rules of Procedure for Shareholders Meetings

  • 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: Convening shareholders meetings and shareholders meeting notices

  • Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the board of directors.

  • This Corporation shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders meeting or before 15 days before the date of a special shareholders meeting. This Corporation shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at this Corporation and the professional shareholder services agent designated thereby as well as being distributed on-site at the meeting place

  • The reasons for convening a shareholders meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

  • Election or dismissal of directors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act, Articles 26-1 and 43-6 of the Securities Exchange Act, Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out and the

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essential contents explained in the notice of the reasons for convening the shareholders meeting. None of the above matters may be raised by an extraordinary motion.

  1. Where re-election of all directors as well as their inauguration date is stated in the notice of the reasons for convening the shareholders meeting, after the completion of the re-election in said meeting such inauguration date may not be altered by any extraordinary motion or otherwise in the same meeting.

  2. A shareholder holding 1 percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders meeting. The number of items so proposed is limited to one only, and no proposal containing more than one item will be included in the meeting agenda. When the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda. A shareholder may propose a recommendation for urging the corporation to promote public interests or fulfill its social responsibilities, provided procedurally the number of items so proposed is limited only to one in accordance with Article 172-1 of the Company Act, and no proposal containing more than one item will be included in the meeting agenda.

  3. Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce its acceptance of shareholder proposals in writing or electronically, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days.

  4. 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.

  5. Prior to the date for issuance of notice of a shareholders meeting, this Corporation 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.

  6. The venue for a shareholders meeting shall be the premises of this Corporation, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

  7. Article 3: Shareholders' Attendance, Proxy, and Authorization.

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  1. 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.

  2. For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by this Corporation and stating the scope of the proxy's authorization.

  3. A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders meeting, and shall deliver the proxy form to this Corporation before five days before the date of the shareholders meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail unless a declaration is made to cancel the previous proxy appointment.

  4. After a proxy form has been delivered to this Corporation, if the shareholder intends to attend the meeting in person or to exercise voting rights by correspondence or electronically, a written notice of proxy cancellation shall be submitted to this Corporation before two business days before the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

Article 4: Shareholder attendance registration process

  1. This Corporation shall specify in its shareholders meeting notices the time during which attendance registrations for shareholders, will be accepted, the place to register for attendance, and other matters for attention.

  2. The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel assigned to handle the registrations.

  3. Shareholders shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. This Corporation may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.

  4. This Corporation shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in.

  5. This Corporation shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors or supervisors, pre-printed ballots shall also be furnished.

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Article 5: Chairman and Attendees of the Shareholders' Meeting

  1. If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairperson of the board. When the chairperson of the board is on leave or for any reason unable to exercise the powers of the chairperson, the chairperson shall appoint one of the directors to act as chair. Where the chairperson does not make such a designation, the directors shall select from among themselves one person to serve as chair.

  2. When a managing director or a director serves as chair, as referred to in the preceding paragraph, the managing director or 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.

  3. It is advisable that shareholders meetings convened by the board of directors be chaired by the chairperson of the board in person and attended by a majority of the directors, at least one supervisor in person, and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minutes.

  4. If a shareholders meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

  5. This Corporation may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders meeting in a non-voting capacity.

  6. Article 6: Calculation of Shareholding for Attendance at Shareholders' Meeting

  7. Attendance at shareholders meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in, plus the number of shares whose voting rights are exercised by correspondence or electronically.

  8. On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation, and shall make an express disclosure of the same at the place of the shareholders meeting.

  9. The chair shall call the meeting to order at the appointed meeting time and disclose information concerning the number of nonvoting shares and number of shares represented by shareholders attending the meeting. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such

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postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.

  1. If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within one month.

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

  3. Article 7: Documentation of a shareholders meeting by audio or video

  4. This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures. The recorded materials of the preceding paragraph shall be retained for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

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

  6. The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

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

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

Article 8: Discussion of proposals

  1. If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. Votes shall be cast on each separate

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proposal in the agenda (including extraordinary motions and amendments to the original proposals set out in the agenda). The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting.

  1. The provisions of the preceding paragraph apply mutatis mutandis to a shareholders meeting convened by a party with the power to convene that is not the board of directors.

  2. The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

  3. The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed, call for a vote, and schedule sufficient time for voting.

Article 9: Shareholder speech

  1. 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.

  2. 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.

  3. Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

  4. 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.

  5. When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak

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on the same proposal.

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

Article 10: Calculation of voting shares and recusal system

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

  2. With respect to resolutions of shareholders meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

  3. When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of this Corporation, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

  4. The number of shares for which voting rights may not be exercised under the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

  5. With the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed three percent of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Article 11: Voting, monitoring and vote counting

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

  2. When this Corporation holds a shareholder meeting, it shall adopt exercise of voting rights by electronic means and may adopt exercise of voting rights by correspondence. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting.

  3. A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to this Corporation before two days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of

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intent.

After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to this Corporation, by the same means by which the voting rights were exercised, before two business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.

  1. Except as otherwise provided in the Company Act and in this Corporation's articles of incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the chair or a person designated by the chair shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

  2. When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

  3. Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of this Corporation.

  4. 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.

  5. The election of directors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, 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,

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and the names of directors not elected and number of votes they received.

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

Article 12: Recess and resumption of a shareholders meeting

  1. When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

  2. If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.

  3. A resolution may be adopted at a shareholders meeting to defer or resume the meeting within five days in accordance with Article 182 of the Company Act.

Article 13: Minutes of the meeting

  1. Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The production and distribution of meeting minutes can be announced through the MOPS.

  2. The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their voting results (including the number of voting rights), and disclose the number of voting rights won by each candidate in the event of an election of directors or supervisors. The minutes shall be retained for the duration of the existence of this Corporation.

  3. Article 14: Public disclosure

  4. If there are matters regarding resolutions of shareholders' meetings that involve significant information as prescribed by laws or regulatory authorities, this Corporation shall upload the content of such resolution to the MOPS within the prescribed time period.

  5. Article 15: Any matters not specified in these regulations shall be handled in accordance with the provisions of the Company Act, relevant laws and regulations, and the Articles of Incorporation of this company.

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Article 16: These regulations shall come into effect after being passed by the shareholders' meeting, and the same applies to any amendments made to them. Article 17: These Operational Procedures were promulgated on August 24, 2021.

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Appendices 3

Standard Chem. & Pharm. Co., Ltd.

Procedures for Election of Directors

  • Article 1: To ensure a just, fair, and open election of directors, these Procedures are adopted pursuant to Articles 21 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.

  • Article 2: The qualifications and election for the independent directors of this Corporation shall comply with Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.

  • Article 3: The election of directors and independent directors in our company follows a candidate nomination system, where shareholders are responsible for appointing from the list of director and independent director candidates. The procedures for the candidate nomination system shall be conducted in accordance with the provisions of Article 192-1 of the Company Act.

  • Article 4: The overall composition of the board of directors shall be taken into consideration in the selection of this Corporation's directors. The composition of the board of directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the company's business operations, operating dynamics, and development needs. It is advisable that the policy include, without being limited to, the following two general standards:

  • Basic requirements and values: Gender, age, nationality, and culture.

  • Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience.

Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows:

  1. The ability to make judgments about operations.

  2. Accounting and financial analysis ability.

  3. Business management ability.

  4. Crisis management ability.

  5. Knowledge of the industry.

  6. An international market perspective.

  7. Leadership ability.

  8. Decision-making ability.

More than half of the directors shall be persons who have neither a spousal relationship nor a relationship within the second degree of kinship with any other

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director.

The board of directors of this Corporation shall consider adjusting its composition based on the results of performance evaluation.

  • Article 5: The cumulative voting method shall be used for election of the directors at this Corporation. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates.

  • The board of directors shall prepare separate ballots for directors in numbers corresponding to the directors or supervisors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders. The ownership of shares is based on the company's shareholder register.

  • Article 6: The number of directors will be as specified in this Corporation's articles of incorporation, with voting rights separately calculated for independent and non-independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.

  • Article 7: Before the election begins, the chair shall appoint a number of persons with shareholder status to perform the respective duties of vote monitoring and counting personnel. The ballot boxes shall be prepared by the board of directors and publicly checked by the vote monitoring personnel before voting commences.

  • Article 8: A ballot is invalid under any of the following circumstances:

  • The ballot was not prepared by a person with the right to convene.

  • A blank ballot is placed in the ballot box.

  • The writing is unclear and indecipherable or has been altered.

  • The candidate whose name is entered in the ballot does not conform to the director candidate list.

  • Other words or marks are entered in addition to the number of voting rights allotted.

  • Article 9: When the total allocation of voting rights is less than the number of voting rights held by the electors, the reduction in voting rights is considered as abstention.

  • Article 10: The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including the list of persons elected as directors

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

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

Article 11: The board of directors of this Corporation shall issue notifications to the persons elected as directors.

Article 12: Any matters not specified in these regulations shall be handled in accordance with the Articles of Incorporation of this company.

Article 13: These Procedures, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

  • Article 14: These Operational Procedures were promulgated on August 24, 2021

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Appendices 4

Standard Chem. & Pharm. Co., Ltd. Shareholding of Directors

  1. SCPC’s total shares (issued and outstanding): 178,696,089 shares

  2. Minimum shareholding required and record of shareholding by Directors according to SCPC’s share register:

Title Minimum share required Shares record per register
Directors 10,721,766 35,435,363

Book closure date: 2023/4/22~2023/6/20

  1. Directors shareholding record table: 2023/4/21
Position Name Shares per
register		 Shareholding
ratio(%)
Chairman Fan Dao Nan Foundation
Representative: Tzu-Ting, Fan		 5,523,881 3.09
Director Chin-Tsai, Fan 20,786,813 11.63
Director Yuan-Teh Lee - -
Director Tsuey-Wen, Yeh 9,124,669 5.11
Independent
Director		 Hwei-Jiung, Wang - -
Independent
Director		 Lin-Yu, Li - -
Independent
Director		 Shao-Zong, Liu - -
Total 35,435,363 19.83
  1. The total shareholding of SCPC Directors is in accordance with the minimum shareholding requirement.

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